1. DEPARTMENT OF PUBLIC WORKS Portfolio Committee Presentation 7 th August 2012 Parliament of the Republic of South Africa DEPARTMENT OF PUBLIC WORKS Portfolio Committee Presentation 7 th August 2012 Parliament of the Republic of South Africa 1

2. Portfolio Committee Presentation 07 August 2012 2 1.Purpose 2.Overall Financial Performance 3.Overall Financial Performance per Programme 4.Budget Analysis per Branch 5.Earmarked Funds 6.Performance Information (Annexure) 7.Progress on Turnaround

3. Portfolio Committee Presentation 07 August 2012 3 Purpose of the Presentation by the Department of Public Works -To update the Portfolio Committee on Public Works on the financial and Information performance of the Department of Public Works for the 1 st Quarter of the financial year 2012/13. Objective of the Portfolio Committee on Public Works -To monitor financial spending in the department versus the roll-out of the departmental programmes

4. 4 Portfolio Committee Presentation 07 August 2012

5. 5 Linear Benchmark 25% Overall Allocation for the year = R7.99bn Expenditure as at Q1 = R2.17bn % spent Q1 2012 = 27% compared to Q1 2011 = 17% Programme Budget Allocation 2012/13 Exp 30 June 2012 % Spent as at 30 June 2012 % Spent as at 30 June 2011 R'000 Prog 1. Administration893,978233,27926%23% Prog 2. Immovable Asset Management 5,364,0431,578,03429%17% Prog 3. Expanded Public Works Programme 1,659,000317,35419%9% Prog 4. Property and Construction Industry Policy Regulation 37,43613,85737%32% Prog 5. Auxiliary and Associated Services 39,33926,89168%39% Total7,993,7962,169,41527%17% Portfolio Committee Presentation 07 August 2012

6. 6 Linear Benchmark 25% Economic classification Budget Allocation 2012/13 Exp 30 June 2012 % Spent as at 30 June 2012 % Spent as at 30 June 2011 R'000 Compensation of employees1,260,154327,28826%23% Goods and services596,580161,77427%17% Office Accommodation469,052129,49728%23% Transfers and subsidies4,085,8261,398,78234%19% Infrastructure1,484,742146,29010% Machinery and equipment97,4425,3756%9% Total7,993,7962,169,41527%17% Portfolio Committee Presentation 07 August 2012

7. 7 Compensation of employees’ expenditure for the month ended 30 June 2012 is R327 million This expenditure is equivalent to 26 % for Q1 2012 compared to 23% of Q1 2011 For Q1 2012: against the straight line guideline set at 25% Overall Compensation of Employees exceed the guidelines by 1% - (26%) Programme 2 (IAM) also exceeded by 1% - (26%) Programme 3 (EPWP) is at 25% Programme 4 (Construction and Property Policy) is below by 12% - (13%) Portfolio Committee Presentation 07 August 2012

8. 8 Transfers and subsidies expenditure for the end of 30 June 2012 is R 1.3 billion This expenditure is equivalent to 34% of the allocation of R4 billion for the year Expenditure on transfers and subsidies include the following payments: R792 million payment to provinces for Devolution of Property Rates and Taxes Fund. R323 million for Augmentation of Property Management Trading Entity R140 million for Non-State Sector R62 million for EPWP Integrated Grant to Provinces R54 million for Social Sector. Portfolio Committee Presentation 07 August 2012

9. 9 Infrastructure expenditure for the month ended June 2012 is R 146 million and expenditure is equivalent to 10% of the allocation of R 1.484 billion. Expenditure is far below (at 10%) the guideline and possible under spending is projected. Expenditure for machinery and equipment including intangible assets is R5.3 million and expenditure is equivalent to 6% of the total allocation of R97 million for Q1 2012 Portfolio Committee Presentation 07 August 2012

10. 10 Portfolio Committee Presentation 07 August 2012

11. 11 Economic classification Budget Allocation 2012/13 Exp 30 June 2012 % Spent as at 30 June 2012 % Spent as at 30 June 2011 R'000 Compensation of employees198,01751,19526%23% Goods and services201,21149,74125%23% Property Management469,052129,49728%23% Transfers and subsidies625729117%0% Machinery and equipment25,07319928%35% Total893,978233,27926%23% Purpose: Provide strategic leadership and support services, including the accommodation and overall management of the department. Portfolio Committee Presentation 07 August 2012

12. 12 Internal Audit and Investigation Services Intergovernmental Relations and Parliamentary Services Strategic Management Unit Monitoring and Evaluation Overall ProgressThe overall progress of Internal Audit is satisfactory as they are achieving all the targets set out for them in Quarter 1. Satisfactory progress Unsatisfactory Highlights19 Fraud Prevention Awareness workshops conducted against a Q1 target of 3 Achieve 5 of the 7 targets set for Q1 (71% achievement) Achieve 100% for Q1 (i.e. 1 target on updating risk registers) Only 1 target (of 3 targets) could be achieved – one-on-one engagements with business units to align performance reporting Challenges/ Recommendatio ns Lack of cooperation from other branches Capacity constraints (headcount) May need to revise targets in future given the increase in the critical meetings Since this unit deals with Strategic Plans and APP, reporting takes place in the 2 nd Quarter The nature of the other targets spans over a period and reporting on a quarterly basis poses a challenge Ensure effective performance reporting systems Capacity constraints (4 personnel) Strategic Objective: Ensure effective corporate governance and sound resources management

13. Portfolio Committee Presentation 01 August 2012 13 Economic classification Budget Allocation 2012/13 Exp 30 June 2012 % Spent as at 30 June 2012 % Spent as at 30 June 2011 R'000 Compensation of employees953,923250,06026%21% Goods and services183,72340,06023%14% Transfers and subsidies2,670,9771,138,55343%19% Infrastructure1,484,742146,29010% Machinery and equipment70,6782,9144%6% Total5,364,0431,578,03429%14% Purpose: Provide and manage government’s immovable property portfolio in support of government’s social, economic, functional and political objectives.

14. 14 Asset RegisterPortfolio Performance and Monitoring Portfolio Analysis Overall ProgressThere is some degree of progress – more work needs to done Slow progress in the implementation of the C-AMP Some progress made in the Lease Profile in three region (Durban, Port Elizabeth, Cape Town and Pretoria) Highlights- Desk top completed 21 448 land parcels verified through desktop analysis and updated with Deeds’ Web information NO Progress - still in the process of revising the C-AMP framework 60% of leases reviewed Challenges/ Recommendations Verification process to start Refining of information is time consuming Lack of resources

15. Portfolio Committee Presentation 01 August 2012 15 Economic classification Budget Allocation 2012/13 Exp 30 June 2012 % Spent as at 30 June 2012 % Spent as at 30 June 2011 R'000 Compensation of employees95,59724,37025%19% Goods and services169,66033,00019%14% Transfers and subsidies1,392,176259,50019%13% Machinery and equipment1,56745829%14% Total1,659,000317,35419%13% Purpose: To ensure creation of work opportunities for the poor and unskilled people in South Africa by co- ordinating the implementation of the programme and providing overall strategic leadership across the three spheres of government.

16. 16 NYS LearnersSupport to Municipalities implementing projects EPWP Work Opportunities across spheres of Gvnt reported to EPWP Provincial Road Projects implemented and reported to EPWP Overall ProgressFair progressSatisfactory progress against target for Q1 Progress will be measured once data has been validated Highlights847 learners recruited against a target of 1200 for Q1 (71% achieved) 157 Municipalities out of a target of 120 for Q1 have reported on EPWP targets - (131% achievement) Information yet to be validated. The EPWP system closed on the 20 th of July and usually takes some time to validate data. Once data has been validated, will be reported to Parliament 78 130 Work Opportunities (reflected in the PMIS system but figure yet to be validated) Challenges/ Recommendatio ns Actual progress attributed to delays in awarding projects Differences in reporting cycles (National & Provincial) causing delays for DPW to report on performance information

17. 17 Economic classification Budget Allocation 2012/13 Exp 30 June 2012 % Spent as at 30 June 2012 % Spent as at 30 June 2011 R'000 Compensation of employees12,6171,66313%15% Goods and services24,69512,18249%42% Transfers and subsidies- Machinery and equipment124119%6% Total37,43613,85737%32% Purpose: Promote the growth and transformation of the construction and property industries. Promote uniformity and best practice in construction and immovable asset management in the public sector. Note: High % spent for goods and services Portfolio Committee Presentation 07 August 2012

18. 18 Agrément SA BillBuilt Environment Professionals Expropriation Bill Developed policy framework to ensure environmental sustainability in the Construction and Property sectors through implementation of the Green Building Framework and related policies Overall Progress Unsatisfactory as this is characterised by delays and lack of planning To be reported in Q2 Progress is slow Highlights Draft Bill (Draft 8) submitted to DRDLR for comment and discussions held with DRDLR officials on draft Bill. Draft TOR for service provider to assist DPW in development of Built Environment Green Economy Programme (BEGEP) developed Challenges/ Recommendati ons Lack of proper planning resulting in delays Capacity constraints Lack of proper planning resulting in delays Capacity constraints Service Provider required

19. Portfolio Committee Presentation 01 August 2012 19 Goods and services - % spent for Q1 – 2012 is 49% compared to 42% of Q1 – 2011 High expenditure under goods and services in programme four relate to state function for the funerals state events by the President. Expenditure was unforeseen and unavoidable and therefore additional funding to offset over spending will be requested during adjustment estimates.

20. Portfolio Committee Presentation 01 August 2012 20 Economic classification Budget Allocation 2012/13 Exp 30 June 2012 % Spent as at 30 June 2012 % Spent as at 30 June 2011 R'000 Goods and services17,29126,891156%0% Transfers and subsidies 22,048-0%70% Total39,33926,89168%39% Purpose: To provide for various services, including compensation for losses on the government assisted housing scheme and assistance to organisations for the preservation of national memorials. Meet the protocol responsibilities for state functions.

21. 21 Completed Construction Projects Contracts/Projects Completion Professional Skills Development for 100 graduates Affirmable Business Enterprises ( specialists) access job Opportunities as Sub Contractors or Suppliers to Main Contractors Overall Progress Some degree of progress Satisfactory progress Possibly to be reported in Q2 as no awards of Major Contracts took place in Q1 Draft of Delegation Completed & Draft Turnaround Proposal Submitted; No service provider appointed Highlights 31 Projects Completed against the target 50 for Q1 2012 (62% Achievement) 13 202 Jobs reported against the target 10 000 for Q1 2012 (132% Achievement) 86 Capital Projects on tender stage Award expected in by end Q2 Challenges/ Recommendatio ns Area characterised by non-complying contract - Apply penalties to non- performing Contracts

22. 22 Portfolio Committee Presentation 07 August 2012

23. 23 BranchesCompensation of EmployeesGoods & Services and Capital Payments Budget R’000 Exp R’000 % Spent Budget R’000 Exp R’000 % Spent Minister and Support8,5581,66920%10,0001,99620% Deputy. Minister and Support 000%00 Asset Management28,2179,25033%5,5501,23022% EPWP41,39711,58228%148,25729,89020% Projects52,87215,14129%12,6301,72614% Policy Regulation8,3621,66320%9,7702,28023% Inner City6,6091,74726%1,90027414% KAM and Prestige20,3935,15925%2,70033612% DG Direct Reports36,7069,97027%14,5001,46810% COO and Direct Reports 11,7692,09518%3,08078626% Corporate Services80,92622,67628%82,06524,79830% Regions908,590227,73725%156,70038,24424% CFO55,75516,25029%21,7008,40839%

24. BranchesTransfers (Household)Machinery and equipment Budget R’000 Exp R’000 % Spent Budget R’000 Exp R’000 % Spent Minister and Support10-0%87024328% Deputy. Minister and Support Asset Management000%4354210% EPWP50714%1,56728418% Projects10770%86523627% Policy Regulation000%160117% Inner City8079100%11022% KAM and Prestige109100%576224% DG Direct Reports000%1,520564% COO and Direct Reports000%3474413% Corporate Services120118100%27,1191,1644% Regions3,40086025%39,2402,7787% Finance and SCM590 100%4,7474089% 24

25. 25 BranchesCompensation of EmployeesGoods & Services and Capital Payments Budget R’000 Exp R’000 % Spent Budget R’000 Exp R’000 % Spent Bloemfontein 81,79518,78623%13,4002,44418% Cape Town 171,14042,13624%29,4009,65733% Durban 121,66932,11626%20,2004,28621% Johannesburg 74,37619,81926%9,3501,09212% Kimberley 47,18411,18323%10,3001,68116% Mmabatho 51,80712,98325%10,1002,29622% Nelspriut 46,51611,61624%10,3002,08120% Polokwane 60,31315,01524%10,2002,08120% Port Elizabeth 76,12518,98625%14,0002,88321% Pretoria 139,20035,55725%20,6007,74114% Umthatha 38,4659,53424%8,8501,99723% TOTAL 908,590227,73725%156,70038,24424%

26. Portfolio Committee Presentation 01 August 2012 26 Regional Offices Allocation for Compensation of Employees is R908 million 47.5% (or R432 009 million) of the of the total budget allocation towards compensation is shared by three Regional Offices (Cape Town – 18.8%, Pretoria – 15.3% and Durban -13.4%) Overall Compensation of Employees expenditure for Q1 is 25% (in line with the straight line guideline set at 25%) Goods and Services Budget Allocation for the year is R156 700 24% of the allocation spent in Q1 2012, Cape Town being the highest (33%)

27. 27 BranchesTransfers : HouseholdMachinery and Equipment Budget R’000 Exp R’000 % Spent Budget R’000 Exp R’000 % Spent Bloemfontein 4005113%1,450967% Cape Town 60022237%11,7503543% Durban 4003910%2,80051018% Johannesburg 20013568%1,4801369% Kimberley 30001,10012411% Mmabatho 15001,30023018% Nelspriut 150076013017% Polokwane 3501900326% Port Elizabeth 400131,40013410% Pretoria 4003979915,5009116% Umthatha 50080011715% TOTAL 340086025%39,2402,7787%

28. 28 Portfolio Committee Presentation 07 August 2012

29. 29 Function Budget Allocation 2012/13 Exp 30 June 2012 % Spent/ Transfers as at 30 June 2012 % Spent as at 30 June 2011 Office Accommodation469,052129,49718%21% DPW Infrastructure1,484,742146,29010%5% CIDB66,88250% CBE27,43813,71950% Agrement Board9,903 100% Boundary Fencing7,00000% Aug of PMTE646,849323,4245050% Property Rates – Conditional Grants1,918,659792,35341%0% EPWP Incentives to Provinces292,76161,58121%0% EPWP Incentives to Municipalities599,2403,6131% IDT Intermediaries9,639 100%

30. 30 Function Budget Allocation 2012/13 Exp 30 June 2012 % Spent/ Transfers as at 30 June 2012 % Spent as at 30 June 2011 EPWP Incentives Non-State Sector469,052129,49718%21% EPWP Social Sector to Provinces217,40154,35025%50% Audit Fees: Financial Accounting35,76413,71937%50% Asset Register20,0001,2326%0% Portfolio Committee Presentation 07 August 2012

31. 31 Portfolio Committee Presentation 07 August 2012

32. 32 Slogan - Sonke ◘ Kaofela ◘ Together Portfolio Committee Presentation 07 August 2012

33. 33 1)Appointment of Support team members Little success since February 2012 (on 6 Core team members and 14 functional specialist) 2) Establishment of a Turnaround Unit Department for Public Service and Administration (DPSA) was approached in June 2012 for advice 3) Meetings held Workshop with Minister and DM – 3/4 July 2012 -Workshop coordinated by DG, facilitated by TAU and report produced by Turnaround Secretariat Extended Manco 20 July 2012 - Invited Manco to input into the turnaround and suggest ways to do things Differently, Quicker and Better Extended Manco – Strategic Plan of DPW - 25/26 July 2012

34. 34 Planned Meetings – further engagement and ownership Extended Manco – Annual Performance Plan - 20/21 August 2012 Stake-holder Management meetings Branch and Units sessions Some Initiatives Appointed Ilima Trust Property Management – to do scoping Tender to be issued (possibly 24 th August) for the review of current leases from the 1 st of April 2012. The appointed service provider to start on 1 st of November 2012. Portfolio Committee Presentation 07 August 2012

35. 35 Projects Identified (Progress in Some) Project 1 Immovable Asset Register Project 2 Leases Project 3: Clean Audit Project 4 Regional Support Project 5 Anti-Corruption Campaign Project 6 Re-opening of workshops Project 7 SCM Review Project 8 Governance and Performance Management Review – TA Projects 9 Compliance Review and Enforcement Project 10Bills for Parliament Project 11 ICR Project 12 HR - Building of Skills in DPW Project 13 LR - Employee Issues/Grievances Project 14 Key Accounts Management (KAM) Project 15 Prestige Project 16 Head Quarters Portfolio Committee Presentation 07 August 2012

36. 36 Portfolio Committee Presentation 07 August 2012 National Department of Public Works (NDPW) Head Office: Public Works CGO Building Cnr Bosman and Madiba Pretoria Central Private Bag X65 Pretoria 0001 Website: http://www.publicworks.gov.zahttp://www.publicworks.gov.za