Improving Public Infrastructure and creating employment opportunities to make Gauteng work better

Transcription

1 Department of Infrastructure Development Annual Report 2010/2011

2 Improving Public Infrastructure and creating employment opportunities to make Gauteng work better

3 Submission of the Annual Report to the Executive Authority Mr. Simon Bhekizwe Nkosi Member of the Executive Council Gauteng Department of Infrastructure Development I, the Accounting Officer of the Gauteng Department of Infrastructure Development (GDID) Vote 12, Ms. Mapula Modipa have pleasure in presenting the Department s Annual Report for the 2010/11 Financial Year, in accordance with Section 40 of the Public Finance Management Act (PFMA) to you, the Executive Authority, the Legislature and the Community of Gauteng. Ms. Mapula Modipa Head of Department Department of Infrastructure Development 31 May

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5 CONTENTS Section 1. GENERAL INFORMATION... 6 Vision, Mission and Values... 6 Organisational Structure... 7 Legislative Mandate... 8 Entities Reporting to the MEC... 9 MEC s Statement Overview by the Head of Department Section 2. INFORMATION ON PREDETERMINED OBJECTIVES Overall Performance Voted Funds Aim of Vote Summary of Programmes Key Strategic Objectives Achievements Overview of the Service Delivery Environment for 2010/ Overview of the Organisational Environment for 2010/ Key Policy Developments and Legislative Changes Departmental Revenue and Expenditure Departmental Expenditure Transfer Payments Conditional Grants and Earmarked Funds Capital Investment, Maintenance and Asset Management Plan Programme Performance Programme 1: Administration Programme 2: Infrastructure Development/Public Works Programme 3: Property Management Programme 4: Expanded Public Works Programme

6 Section 3. ANNUAL FINANCIAL STATEMENTS Report of the Audit Committee Report of the Accounting Officer Report of the Auditor General Appropriation Statement Notes to the Appropriation Statement Statement of Financial Performance Statement of Financial Position Statement of Changes in Net Assets Cash Flow Statement Notes to the Annual Financial Statements (including Accounting policies) Disclosures Notes to the Annual Financial Statements Annexures Section 4. HUMAN RESOURCE MANAGEMENT Section 5. OTHER INFORMATION Acronyms List of Contact Details

7 Section 1 General Information

8 1. GENERAL INFORMATION Vision, Mission and Values Vision of the Department To be a leading infrastructure provider and facilitator which positions Gauteng as a globally competitive city region with a sustainable and growing economy. Mission of the Department To facilitate service delivery through the development, construction and management of public infrastructure so as to optimise the creation of decent jobs and the promotion of a better life for all. Values of the Department The Department of Infrastructure Development espouses values that underpin its operations and the conduct of its officials with regard to its clients and citizens. They are as follows: Values of the Department of Infrastructure Development Integrity Honesty Professionalism Transparency Accountability Collective responsibility Compassion Innovation Value addition The Department will encourage conduct by its employees and contractors which engenders reliability, veracity, honour and truthfulness The Department promotes sincere, frank and open service to its clients and the citizens of the Province The Department commits to a service which is proficient and exceptional, displaying high levels of competence and skill The Department promotes simplicity and intelligibility of all its communication, engagement and services in general to ensure that citizens know and understand its functions and interventions The Department commits its staff and service providers to be answerable to the public and oversight institutions of government for services they render and commitments they make The Department espouses a culture of collective work, resourcefulness, ingenuity and initiatives to ensure seamless service delivery The Department pledges to deliver its services to clients and Gauteng residents with care, kindness and empathy in the selfless pursuit of a better life for all The Department commits to uphold highest standards of novelty and uniqueness in all the services that it provides, using all its potential to introduce fresh ideas and innovative ways of service delivery The Department promotes service delivery which improves the quality of business processes, state conduct and the lives of the citizens people of Gauteng 6

9 Interim Organisational Structure of the Department 7

10 Legislative Mandate Overarching Mandate The Constitutional mandate of the Gauteng Department of Infrastructure Development is drawn from Schedules 4 and 5 of The Constitution of the Republic of South Africa (Act 106 of 1996), which grants all Provinces concurrent (i.e. with National Government) and exclusive (i.e. provincial only) competencies. Provincial competencies are in essence legislative competencies on specific functional areas such as public works. The core mandate of the Department of Infrastructure Development is described as: Implementing all the GPG CAPEX budget allocation and other small, medium and large scale infrastructure projects which utilise sole or joint GPG financial investments; and to maximise the social and economic benefits that can be gained from the GPG property portfolio. The Department of Infrastructure Development plays a key role in utilising the construction sector as a catalyst to the development of skills, creation of jobs and the development of sustainable communities. Coupled with the Expanded Public Works Program (EPWP) and effective skills development programs linked to both CAPEX and Maintenance projects, the services rendered by the Department will yield a positive impact on the development of skills and the reduction of poverty within communities. All projects and programs within the Department are underpinned by a skills development and job creation component. In addition, the Department implements the policies of BBBEE and Preferential Procurement in line with the approved national targets, ensuring the empowerment of vulnerable and marginalised target groups, i.e. women, youth, and people with disabilities. Non-entity specific legislation The following National legislation and policies provide the broad legislative and policy context within which the Department of Infrastructure Development plans are implemented: Public Finance Management Act, Act 1 of 1999 Construction Industry Development Board Act, Act 38 of 2000 Constitution of the Republic of South Africa, Act 108 of 1996 Supply Chain Management Act Regulations Preferential Procurement Policy Act, Act 5 of 2000 Broad Based Black Economic Empowerment Act, Act 53 of 2003 White Paper Public Works: Towards the 21st Century White Paper Creating and Enabling Environment for Reconstruction and Development in the Construction Industry Government Immoveable Assets Management Act, Act 19 of 2007 The Inter-Governmental Relations Act Planning Professions Act, 2002 Architectural Professions Act, 2000 Built Environment Professions Act, 2000 Engineering Professions Act, 2000 Project and Construction Management Act, Property Valuers Professions Act,

11 National Spatial Development Perspective National Environmental Management Act, 1998 Occupational Health and Safety Act, 1993 Division of Revenue Act 1 of 2010 Expanded Public Works Programme Guidelines for implementation of labour intensive construction Prevention of Illegal Eviction from and Unlawful Occupation of Land Act Space Planning Norms and Standards Notice 1665 of 2005 Local Government: Municipal Property Rates Act, 2004 Deeds Registries Act, Act 47 0f 1937 Gauteng Land Administration Act, Act 11 of 1996 Promotion of Access to Information Act, Act 2 of 2000 Minimum Information Security Standards. The Criminal Procedure Act, Act 51 of 1997 as amended The Protection of Information Act, Act 84 of 1982 as amended Public Service Regulations, of 2001 The Prevention and Combating of Corrupt Activities Act, Act 12 of 2004 The National Building Regulations and Standards Act, Act 103 of 1956 as amended Employment Equity Act, Act 55 of 1998 Labour Relations Act, Act 66 of 1995 Public service Act, 1994 as amended Provincial Policy Mandates Provincial Policy and Legislative Mandates are derived from the following, among others: Gauteng Spatial Development Perspective Gauteng Growth and Development Strategy Municipal Integrated Development Plans Gauteng Strategy on Sustainable Development Gauteng Housing Management Plans Gauteng Planning and Development Act, Act 3 of 2003 Entities Reporting to the MEC No entities were reporting to the MEC for Gauteng Department of Infrastructure Development for the year ended 31 March

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13 Statement by the Member of the Executive Council Mr. Simon Bhekizwe Nkosi Member of the Executive Council A historic episode - South Africa hosting the FIFA World Cup - has come and gone, and 2010 is now a memory. The built industry is still staggering in the aftermath of the hard preparations, and Government is relieved to have witnessed its increased expenditure on new and rehabilitated infrastructure contributing towards this success. The Department has played a significant part in the story of its success through the upgrades of Sinaba Stadium, and HM Pitje Stadium is also going to be challenging in the sense that the country expects this vibe and momentum to continue. Moving forward after the landmark year of 2010, and as is common in developing countries such as ours, the key challenge is not necessarily going to be around delivering new infrastructure, but more on sustainable operations afterwards in terms of the maintenance and servicing of such infrastructure. It is in this context that one of the Department s critical focus areas for 2010 / 2011 has been the intensified repairs and maintenance programme of our Province s socio-economic infrastructure. The Gauteng Provincial Government (GPG) has placed strong emphasis on tracking deliverables as part of ensuring that we come up with innovative ways and also alternative construction methods to best deliver services to our people at a much faster pace. The stark reality is that our Nation s infrastructure needs are tremendous and Gauteng, which is at the epicentre of our economy, has to accommodate the bulk of the infrastructure demands. The Department of Infrastructure Development (DID) has been strategically positioned to enable the achievement of the GPG goals around quality education and health care, employment creation, poverty relief, skills training and development and access to quality service delivery. In essence DID is designed to help define and reposition the portfolio of socioeconomic infrastructure in the social growth and development agenda of the Province. All our service delivery efforts with regard to the above mandate should be biased towards addressing the challenge of employment creation, skills development and poverty relief efforts of the Gauteng Provincial Government. Concerted efforts will be made within the Department s Programmes of Action, to infuse the attainment of both the National and Provincial job creation targets. 11

14 The Department of Infrastructure Development is also intensifying energy saving efforts as part of the going green revolution in our service delivery programme. We are contributing to the reduction of our carbon footprint by promoting infrastructure which is relevant, useful, but also promotes sustainable development. Looking back at the 2010/2011 Financial Year, whilst the achievements of DID are considerable, there is still a need to closely monitor the systems we have put in place to ensure that previous concerns highlighted by the Auditor General unauthorised, irregular, fruitless and wasteful expenditure arising from internal control deficiencies and instances of non-compliance with applicable legislation are a thing of the past for our Department. The Accounting Officer and Chief Financial Officer have been leading our efforts to improve financial management systems and are working conscientiously to achieve a clean audit. The Department is committed to ensuring that its activities are underpinned by sound governance structures and the implementation of effective internal controls in all areas of operations. The Audit Committee continues to provide invaluable support and direction throughout the year and ensures that the Department remains focused on maintaining sound financial, internal controls and risk management systems. We remain committed to continuously implementing effective strategies which will result in the Department obtaining a clean audit report. This will be my priority as the Executing Authority. We look forward to the new Financial Year 2011/12 with hope and excitement, fuelled by the amount of ground already covered in the year under review. History has taught us lessons to help us prepare for the future characterised by improved service delivery, good corporate governance and capacity building. It is upon these virtues that a future competitive and competent social infrastructure will be developed, providing skills and employment to the most marginalised section of our society as we stride toward a better life for all. It is an honour for me to be deployed to and be given the responsibility of guiding the service delivery programme of the Department of Infrastructure Development. I commit myself, the Senior Management of the Department and all our valued employees across the Province to overcome these audit and other challenges and to work with determination to achieve our service delivery mandate. Mr. Simon Bhekizwe Nkosi Member of the Executive Council Gauteng Department of Infrastructure Development 12

15 Overview by the Head of Department Ms. Mapula Modipa Head of Department FINANCIAL YEAR: 2010/11 SCORING A GOAL FOR AFRICA I am the happiest man to announce that the World Cup in South Africa was a huge financial success for everybody, for Africa, for South Africa and for FIFA, FIFA President: Sepp Blatter (03/03/2011) What a year this was! One cannot begin any statement without reflecting on the highlight of the 2010/11 Financial Year. The successful hosting of the 2010 FIFA World Cup, as confirmed by FIFA, but more importantly by the fans, bears testimony that as a Country, our skills, technology and expertise is more than world class. With Gauteng being host to both the opening as well as closing events, the success of this tournament is indeed a success of this Department as the lead infrastructure provider for the Province. It is however important to note that the 2010 FIFA SWC, is but one of many success stories of this Department for the 2010/11 Financial Year. The Department remained focus on its over-arching strategic goals of providing a better life for all in Gauteng by creating employment opportunities via its Expanded Public Works Programme. The provision of quality public infrastructure continued with the completion of 13 GDE construction projects, 2 SRAC construction projects and 2 EMS construction projects. Provision of quality public infrastructure, while key, is not the end as such. Infrastructure needs to be continuously maintained to ensure prolonged service life and enhanced safety of the facility. In this regard, the Department has maintained 120 Health facilities and 33 Social Development facilities, as well as 27 of its own facilities. 13

16 Youth, Gender and Disability Mainstreaming within the Department has ensured that the interests of these target groups are well served. The Department has provided employment opportunities to the Youth, to Women and 36 to People living with Disabilities. In addition, the Department via its Maintenance Sub-Programme has availed 11% of all its maintenance jobs to the Youth, 16% to Women and 0,4% to People living with Disabilities. To ensure that skills are created and retained, EPWP beneficiaries have been trained in various artisan skills including plumbing, bricklaying and carpentry, while 77 contractors have been trained via the EPWP Contractor Incubation Programme. As the custodian of the Provincial property portfolio, the Department has verified 900 state owned properties in accordance with Market Related Rentals and 134 residential leases have been concluded. 100% of the Department s own asset register has been maintained, while the maintenance of the GPG asset register is at 45% completion. In addition, R11.3M in property revenue has been collected by the Department, while R211M in rates and taxes has been paid to Municipalities A skilled and empowered staff complement will enhance productivity and service delivery and as such the Department has trained and developed 983 staff members, and the Department has also put in place an Anti-Corruption Strategy to ensure that the fight against corruption continues unabated. Notwithstanding these achievements, going forward the Department remains focused on maintaining its place as the leading public infrastructure provider in Gauteng. The Department will pull out all the stops in building on the experiences of 2010/11 and ensuring that levels of achievement are improved in our service delivery plans for 2011/12. In closing, a note of appreciation goes out to all staff members and role players who have weathered the challenges of the 2010/11 Financial Year with the Department by means of their commitment and dedication. A call is made to increase such commitment, dedication and motivation towards ensuring that Gauteng indeed becomes a better place for all. Ms. Mapula Modipa Head of Department Gauteng Department of Infrastructure Development 14

17 Section 2 Information on Predetermined Objectives

18 2. INFORMATION ON PREDETERMINED OBJECTIVES 2.1 Overall Performance Voted Funds Main Appropriation Adjusted Appropriation Actual Amount Spent (Over) / Under Expenditure Responsible MEC Administering Department Accounting Officer R 000 R 000 R 000 R 000 1,204,239 1,314,038 1,167, , Aim of Vote Mr. Simon Bhekizwe Nkosi Gauteng Department of Infrastructure Development Ms. Mapula Modipa The aim of the vote is to achieve socio-economic growth, development and enhanced quality of life for all people in Gauteng Province Summary of Programmes Programme 1. Administration 2. Infrastructure Development/ Public Works Description The purpose of the Administration Programme is to ensure that all strategic operational and financial mechanisms and systems required for the delivery of the Department s goals and objectives are established and function at optimal efficiency. Furthermore, it ensures that Departmental staff adheres to the code of ethics regarding the Batho Pele principles. The Programme is also responsible for ensuring that the Department achieves its transformation targets and priorities, thereby contributing to National transformation targets and priorities, particularly in respect of poverty, unemployment and creating decent work and sustainable livelihood. Infrastructure Development Programme aims to ensure implementation of all GPG CAPEX projects through the provision, maintenance and refurbishment of social infrastructure. It includes ensuring that the infrastructure industry operates professionally and is inclusive of all previously disadvantaged people such as women, youth and people with disabilities. The Programme also ensures that infrastructure development is designed to support economic growth and investment within a framework that benefits the poor and underprivileged in the Province 16

19 Programme 3. Property Management 4. Expanded Public Works Programme Description Property Management Programme is responsible for the provision of accommodation within as well as outside of the CBD precinct area for all Provincial Departments. The Programme further aims at managing the Provincial property portfolio for the optimum benefit of all concerned. It provides facilities for all Provincial Departments to be able to render service to communities and involves the efficient management of properties and facilities owned or leased by the Department Expanded Public Works Programme (EPWP) facilitates the implementation of multi-sectoral community based projects across the Province whereby particularly youth, women and people with disabilities are provided with relevant training and productive employment opportunities such that skills and enterprises are developed and sustained, infrastructure is developed and maintained, and local economies enhanced. It focuses on drawing significant numbers of the unemployed into productive work through public works programs, in a manner where they gain skills while being employed. The EPWP is a Nation-wide Programme which will draw significant numbers of the unemployed into productive work particularly women (40%), youth (30%) and people with disability (2%), so that workers gain skills while they work, and increase their capacity to earn income. Further the Programme focuses on addressing the previously marginalised community through engagement with communities and local Municipalities in areas where projects will be implemented. This will ensure sustainability of projects. The Programme also provides platform for two-way dialogue between Government and people since communities are consulted prior to implementation of a project. * Please note that in terms of the Budget and Programme Structure there are three Programmes, viz. Administration, Public Works and Expanded Public Works Programme. Infrastructure Development and Property Management are sub- programmes under the Programme: Public Works. Property Management is therefore funded under Public Works Programme. However for the purpose of Departmental operations and reporting during 2010/11 Property Management was reported as a Programme in line with the interim organisational structure. 17

20 2.1.4 Key strategic objectives achievements The following is the list of Department s key achievements in relation to its strategic objectives during the year under review: 1. Provision and maintenance of public infrastructure to promote development of the less developed parts of the Province and redress economic disparities To prolong the life of public infrastructure, improve accessibility and keep equipment in a functional state, the Department rendered unplanned maintenance which included day to day maintenance and emergency maintenance for the Gauteng Department of Health and Social Development, as well as Agriculture and Rural Development. The following major maintenance was conducted: 3 Replacement of 2 chillers at Dr Yusuf Dadoo Hospital 3 Replacement of water pipes in theatre and X-ray room at Helen Joseph Hospital 3 Replacement and repair of laundry equipment at TMI laundry. 2. Expand infrastructure facilities to keep abreast of the growing demand for infrastructure and serve socio-economic ends The Department, through its capital works projects and its contribution to the Outcome Improved quality of basic education, has completed 13 Education projects which included new schools as well as refurbishment of existing schools. The new construction projects included Bronkhorstspruit Primary School, Katlehong South School, Rietvallei Primary School and Polokong Primary School. Additions and renovations were conducted at Mandisa Shiceka High School in Kagiso. In addition, the Department refurbished incontinence clinics at JISWA, Murial Brandt, Felicitas, Hope, Philadelphia, Francis Vorwerg, Phillip Kushlick and Adelaide Tambo Schools. Furthermore the Department completed 2 Sports, Recreation, Arts and Culture (SRAC) projects, namely the upgrade of Sinaba Stadium, the construction of new grandstand, ablution blocks and associated site works at HM Pitje Stadium, and the Lakeside Multi Purpose Community Centre (MPCC) was also completed. 3. Enhance the coordination of infrastructure across the Province To contribute to the Outcome Sustainable human settlements and improved quality of household life, the Department continued with the implementation of the Government Immovable Asset Management Act of 2007 (GIAMA). A workshop which included engagement with Provincial and National property custodians was held in order to provide a communication channel for the implementation of the Act. The Department also finalised 10 User Asset Management Plans (U-AMP). Furthermore, the Department through its vesting process succeeded in obtaining approval for 456 applications by the Provincial State Land Disposal Committee. One of the key requirements of the GIAMA, is the compilation of an accurate property asset register. To this effect the Department efficiently and effectively maintained 100% of its Asset Register and 45% of the GPG Asset Register. A total of 900 properties were verified. With regard to the Outcome A Responsive, Accountable, Effective and Efficient Local Government System the Department implemented Market Related Rentals with effect from June Door-to-door visits to ensure that the lease agreements are signed had been conducted where tenants were cooperative. Furthermore with regard to Devolution of Rates and Taxes grant, the Department continued to pay the rates and taxes of state owned properties. An amount of R211 million was spent from these allocations. 18

21 Rental revenue of R11,3 million was realised during the year under review of which R9,942 million was collected. 4. Implement and co-ordinate Expanded Public Works Programme (EPWP) in a manner that enhances skills development and optimises decent employment and entrepreneurship The Department contributed to the Outcome Decent employment through inclusive economic growth by implementing 17 Community based projects which include, Lillian Ngoyi Market, Thulasizwe School, Simunye School, Sekhulisile School, Rietvallei School, Diepsloot School, Sharpeville Hall, Germiston Hospital, Natalspruit Hospital, Bronkhorspruit School, Katlehong School, Polokong School, Lakeside Multi Purpose Community Centre (MPCC), Tsakane School, June 16 Memorial Site, Winnie Mandela School and National Youth Service Programme. Employment opportunities were created for youth, women and 36 people with disabilities temporary jobs were created. 77 emerging contractors were offered opportunities to participate in EPWP projects. 5. Continuous improvement of the technical and administrative capacity of the Department to pursue the goals of the developmental State The Department engaged in the process to overhaul its Departmental supply chain management system, including the re-engineering of processes and systems, skill assesments and the development of an appropriate structure. This will also assist in promoting the development of sustainable contractors owned and controlled by historically disadvantaged individuals. Furthermore the Department embarked on a head count to verify Departmental staff pursuant to the split of the then Department of Public Transport, Roads and Works, which is saving the Department approximately R36m per annum. An Anti-Corruption Strategy was also developed Overview of the service delivery environment for 2010/11 External factors that have negatively impacted on the Department s ability to deliver against its target include the following: With regard to the Devolution of Rates and Taxes grant, late submission, incomplete or inaccurate Municipal information and technical challenges in the electronic payment systems, non-receipt of some Municipal billing schedules and incomplete Municipal valuation rolls. The delay in the interface between the operations of the Integrated Electricity Asset Management System (IE Works) and the Basic Accounting System (BAS) hindered the payment process. The Department however has set up a joint task team with Municipalities to ensure that data is up to date as a correctional measure. A Debt Management Committee has been established to address the challenges related to billing by the Municipalities. Treasury has also been roped in to address this challenge. With regard to Market Related Rentals, there has been resistance to pay Market Related Rentals by tenants due to the protracted legal processes on eviction. Delays in confirmation of budget by client Departments and poor performance by some contractors have also impacted negatively on the Department s ability to deliver on certain projects. Irregular sittings of the Provincial State Land Disposal Committee impacted on the properties to be vested. The Department also experienced challenges with the participation of women and people with disabilities in the Expanded Public Works Programme (EPWP). Women and people with disabilities are reluctant to participate in EPWP projects due to fear of forfeiting the social grant. 19

22 2.1.6 Overview of the organisational environment for 2010/11 Organisational challenges impacted on the Department s ability to deliver on its services include the following: Finalisation of the migration process for personnel arising from the reconfiguration process Lack of financial and human resources delegation Finalisation and approval of the organisational structure Skilled human resource, i.e. engineers Instability of the Department due to prolonged temporary employment contracts Poor record keeping and inadequate registry divisions Inadequate budgets to deliver key client projects The effects of the closure of the three trading entities, which created disparity and oversupply of administrative personnel Key policy developments and legislative changes The following key policies were approved by the Accounting Officer during the year under review and have facilitated service delivery of the Departmental programmes and projects Human Resource Management Leave Policy Internship Policy Learnership Policy Gender Policy Overtime Policy Resettlement Policy Strike Management Policy Bursary Policy for Serving Employees Bursary Policy for External Applicants HIV and Aids Policy Employee Wellness Policy Sexual Harassment Policy Recruitment and Selection Policy Sport and Recreation Policy Strike Management Policy Risk Management Enterprise Risk Management Policy Fraud Prevention and Anti-Corruption Policy Office Services Landline Telephone Usage Management Policy Records Management Policy Charter EMT Charter 20

23 2.1.8 Departmental revenue, expenditure and other specific topics Collection of Departmental revenue Departmental Revenue 2007/08 Actual 2008/09 Actual 2009/10 Actual 2010/11 Target 2010/11 Actual % Deviation from Target Non-tax revenue 2,193 28,438 14,177 14,289 16, % Sales of capital assets Financial transactions (Recovery of loans and advances) Total Departmental Receipts ,193 28,438 14,177 14,289 16, % Departmental expenditure Programmes Voted for 2010/11 Roll-overs and Adjustments Virement Total Voted Actual Expenditure Variance R 000 R 000 R 000 R 000 R 000 R 000 Administration 126, ,796 98,493 28,303 Public Works 868, , , ,604 43,638 Expanded Public Works Programme 209, , ,098 74,902 Total 1,204, ,799-1,314,038 1,167, , Transfer payments Transfer payments were made to Municipalities in respect of the Devolution of Rates and Taxes grant received from the National Department of Public Works. Payments in terms of the conditional grant are governed by the Division of Revenue Act. An amount of R was transferred to Kopanong Precinct as disclosed in the Annual Financial Statement (Annexure 1 C). The invoices already submitted to the entity had to be processed and paid from the Department. 21

24 Conditional grants and earmarked funds Overview of grant received and actual expenditure on allocation Type of Grant Budget R 000 Actual Expenditure R 000 Devolution of Rates and Taxes grant % Available funds spent by the Department 294, ,819 72% Confirmation of Transfer It can be confirmed that the funds received as a result of the devolution of rates and taxes grant was allocated by the Gauteng Department of Finance: Treasury Division into the bank account of the Department. Indication of extent to which objective was achieved The amount of R211 Million had been spent from the allocated R294 Million. This translates to an achievement of 72% on the Devolution of Rates and Taxes budget. Reasons for variance The reasons for variance on the grant include: Non submission and late submission of billing schedules or invoices by Municipalities. Over projections by Municipalities also contributed to the under expenditure. Measures to improve performance The Department will continue to engage Municipalities with regard to submission of billing schedules or invoices. The MEC has also established a political oversight committee with MMCs to oversee this challenge. Furthermore a Debt Management Committee has been established where all Municipalities and GPG Departments continue to work out efficient ways of promoting accurate billing. Compliance with the Division of Revenue Act 1 of 2010 The Department has complied with the Act. The grant allocated was used solely for payment of rates and taxes as required. 22

25 Capital investment, maintenance and asset management plan Capital Investment List of projects during the year under review (2010/11) No. Project Name Project Description A. New Construction 1. Sokhulumi MPCC 2. Protea Glen Welding Skills 3. Zola MPCC Eldorado Park Stadium June 16 Heritage Site 6. Lakeside MPCC Kagiso Heritage Site Lillian Ngoyi African Market Construction of a MPCC Project Duration Start Finish Programme Funding Source April /03/2012 EPWP Equitable Share Erection of palisade April /03/2011 EPWP Equitable Share Construction of a MPCC April /11/2011 EPWP Equitable Share Tracks for the stadium April /03/2011 EPWP Equitable Share Construction of a heritage site Construction of a MPCC Construction of a heritage site Construction of a market April /10/2012 EPWP Equitable Share April /05/2011 EPWP Equitable Share April /05/2010 EPWP Equitable Share April /03/2011 EPWP Equitable Share 9. Klipspruit Hall Construction of a hall April 2007 April 2010 EPWP Equitable Share 10. Pfananani Enterprise Development 11. T-Shad Phase Kokosi MPCC 13. Tembisa MPCC Soshanguve Block H Jameson Park Home Based Care Centre Construction of an enterprise development centre Construction of a recycling plant Construction of a MPCC Construction of a MPCC for the aged Nov 2005 April 2010 EPWP Equitable Share Nov 2005 Jun 2010 EPWP Equitable Share March 2005 April 2010 EPWP Equitable Share Nov 2005 May 2010 EPWP Equitable Share Storm water upgrade Nov 2005 May 2010 EPWP Equitable Share Construction of a home based care centre Nov 2007 April 2010 EPWP Equitable Share 23

26 No. Project Name Project Description 16. Eldorado Park Taxi Rank Construction of a taxi rank Project Duration Start Finish B. Rehabilitation/Upgrade Johannesburg 1. Boiler replacement April 2007 March 2010 Hospital Boiler Johannesburg Hospital Upgrade of DID properties Koedoespoort Laboratory 3 Vacuum pumps April 2009 April 2010 Upgrade and refurbishment of various buildings Upgrading of laboratory 5. HM Pitje Staduim Upgrading 6. GPG Building Upgrade of access and security control 7. Sinaba Stadium Upgrading Katlehong Old Age Phase 11 Langalibahle Primary School Rehabilitation of an old age home Upgrading of a sports field Programme Funding Source April 2005 April 2010 EPWP Equitable Share April 2010 March 2013 April 2008 March 2011 March 2007 March 2010 April 2008 March 2011 March 2007 April 2009 April 2007 March March March 2011 Infrastructure Development Infrastructure Development Infrastructure Development Infrastructure Development Infrastructure Development Property Management Infrastructure Development EPWP EPWP Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Plans to close down or down-grade any current facilities No plans existed to close down or down-grade any facilities during the year under review. Maintenance backlog Conditional assessments to quantify and determine Departmental maintenance backlog will commence in the new financial year. No conditional assessments were conducted to determine the maintenance backlog during the year under review due to financial constraints. 24

27 Asset Management It is imperative to devise adequate internal controls to manage and safe-guard all Departmental assets. This was done through the drafting of a Policy and a Procedure Manual, which will guide all staff on the management and safe-guarding of assets. In 2010/2011 the asset portfolio increased significantly due to the incorporation of the entity assets whose operations were discontinued at the end of the 2009/2010 Financial Year. In addition capital assets from the Department of Roads and Transport, the Department of Community Safety and the Department of Local Government and Housing were transferred in accordance with the provisions of Section 42 of the Public Finance Management Act, The Department also transferred assets which previously belonged to Impophoma Infrastructure Support Entity and are related to the functions of the Department of Roads and Transport. Bearing in mind that the Department inherited assets from the former Department of Public Transport Roads and Works it came to light during the annual physical verification that some had exceeded their lifespan and were no longer usable. This prompted management to take a decision to write off such assets that the Department s records portray an accurate reflection of its asset portfolio. These consisted of 366 items of computer equipment and printers. To enhance accountability and reliability on financial information provided, the Department continued to prepare monthly reconciliations between the accounting system BAS and the asset register BAUD. This ensured that the asset register remained up-to-date during the year with respect to acquisitions, transfers and disposals. This information was also reviewed by the Provincial Asset Management Team which acts as an oversight body. As we close the current financial year, the state of the Department s asset portfolio is fairly good. Approximately 75% of the portfolio is in good working condition, 20% is fair and 5% has reached the end of its lifespan. A decision will be taken during 2011/2012 on these assets which have reached the end of their lifespan. In respect of immovable assets, the processes of verifying properties, buildings and land is still ongoing. Vesting of properties after verification is also still ongoing. Included in the verification process is a door-to-door exercise of verifying the property and the tenant to address revenue related issues as well. Major Maintenance projects which have been undertaken during the period under review No major Departmental maintenance projects were undertaken for the period under review, except for client Departments. Facilities that were closed down or down-graded during the period under review No Departmental facilities were closed down or down-graded during the year under review. 25

28 Projects that will be carried forward to the forthcoming financial year (2011/12) No. Project Name Project Description A. New Construction 1. Sokhumi MPCC 2. Zola MPCC June 16 Heritage Site Boipatong Heritage Site Kagiso Heritage Site Lillian Ngoyi African Market B. Rehabilitation/Upgrade Upgrade of DID properties Langalibahle Primary School Construction of a MPCC Construction of a MPCC Construction of a heritage site Construction of a heritage site Construction of a heritage site Construction of a market Upgrade and refurbishment of various buildings Upgrading of a sports field Project Duration Start Finish Programme Funding Source April 2010 April 2013 EPWP Equitable Share April 2007 April 2013 EPWP Equitable Share April 2009 April 2013 EPWP Equitable Share April 2007 April 2012 EPWP Equitable Share April 2007 April 2012 EPWP Equitable Share April 2007 April 2012 EPWP Equitable Share April 2010 March 2013 Infrastructure Development Equitable Share April 2007 April 2012 EPWP Equitable Share 26

29 New projects that will commence in the forthcoming financial year (2011/12) No. Project Name New and Replacements 1 Lehae MPCC 2 Eikenhof VIP toilets and communal water supply 3 Diepkloof paving 4 Bazami farmers settlements 5 Replacement of 10 lifts at 78 Fox, 3 at Thusanong, 3 at Peoples Bank, 8 at Corner House 6 Replace 2 generators at Fox street 7 Replace generator at Sage 8 Replace HVAC at 78 Fox 9 Replace smoke detection at 78 Fox Programme Programme 3 Programme 3 Programme 3 Programme 3 Programme 2 Programme 2 Programme 2 Programme 2 Programme 2 Municipality City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg Project description/type of structure Construction of a MPCC 1 Eikenhof VIP toilets and communal water supply Paving streets Fencing/water irrigation Mechanical installation Mechanical installation Mechanical installation Mechanical installation Mechanical installation Outputs 300 Toilets and 100 stand water and sanitation points Streets paved Fencing/water irrigation 24 lifts 2 generators replaced Generator at Sage replaced HVAC replaced Smoke detection replaced 27

30 No. Project Name Rehabilitation/Upgrading 1 Cleaning of vacant stands 2 GPG Precinct buildings Programme Municipality Project description/type of structure Programme 2 GPG Maintenance of vacant stands, grass cutting, rubble removal etc Programme 2 City of Johannesburg Building construction Outputs Vacant stands Building construction 3 Electrical compliance at 78 Fox Programme 2 City of Johannesburg Mechanical installation Electrical compliance Maintenance and Repairs 1 Maintenance of GPG Precinct buildings Programme 2 City of Johannesburg Maintenance GPG Precinct buildings maintained 2 Maintenance of social infrastructure 3 Maintenance of state houses 4 Maintenance of reserves Programme 2 GPG Maintenance Social infrastructure maintained Programme 2 GPG Maintenance State houses maintained Programme 2 GPG Vaal Dam and Roodeplaat Reserves maintained 28

31 The following process was in place in respect of the procurement system utilised by the Department, however, a Supply Chain Management reengineering processes was initiated and during 2011/12 the Gateway model will be implemented. Therefore, changes to the process flow will be eminent during the 2011/12 Financial Year. 29

32 Maintenance The Departmental Maintenance programme was severely impacted on by the shifting of funds from maintenance goods and services to maintenance compensation of employees to fund salaries of staff transferred from Impophoma Infrastructure Support Entity. Prior to the closure of the entities, the entities were required to fund its operating expenditure from the revenue it was supposed to generate from its operations. Therefore, the compensation of employees for the entities was never budgeted for in the past. However, based on the fact that the entities were not generating sufficient revenue, erstwhile Department of Public Transport, Roads and Works had to fund the compensation of employees. After the split of the former Department into the two newly formed Departments, the officials of the entities were absorbed into the relevant organisational structures. During the budget processes for the 2010/11 Financial Year, the Department did not budget fully for the officials of the then Impophoma Infrastructure Support Entity. The funding in respect of compensation of employees that was received from Provincial Treasury was also not sufficient to cover the expenditure fully. Therefore, during the adjustment budget process, funding had to be moved from goods and services to create sufficient budget for the staff absorbed from the various entities as Provincial Treasury was not able to assist with additional funding to fund the compensation of employees. Expenditure in comparison to property industry norms The Departmental expenditure on maintenance can be reported to be less than the property industry norms as there had been no major maintenance projects undertaken during the period under review. The main reason that contributed to the properties not being maintained appropriately was due to lack of funding. The budget related to property management in the main was linked to the Kopanong Precinct, Devolution of Rates and Taxes and some funding for goods and services. Since accruals from the previous financial year had to be met from the allocation, limited funding was available for maintenance. Progress made and intervention measure in addressing maintenance backlog In an effort to address the maintenance backlog, a team led by the Chief Financial Officer was established to assist in fast tracking the procurement process. This team assisted in the reduction of maintenance backlog despite limitations due to financial constraints. Maintenance backlogs relating to the Kopanong Precinct buildings and Departmental infrastructure could not be adequately addressed due to financial constraints emanating from prior financial year obligations that had to be fulfilled. As an intervention measure, the Departmental maintenance was temporarily transferred to the Sub-Programme: Property Management to ensure dedicated attention and focus on Departmental maintenance. This shift will therefore allow focus on conditional assessment to determine the extent of Departmental maintenance backlog and will also assist in the reduction of this backlog. 30

33 2.2 Programme Performance The activities of the Gauteng Department of Infrastructure Development are organised in the following programmes: Programme 1: Administration Programme 2: Infrastructure Development/Public Works Programme 3: Property Management Programme 4: Expanded Public Works Programme * Please note that in terms of the Budget and Programme Structure there are three Programmes, viz. Administration, Public Works and Expanded Public Works Programme. Infrastructure Development and Property Management are sub-programmes under the Programme: Public Works. Property Management is therefore funded under Public Works Programme. However for the purpose of Departmental operations and reporting during 2010/11 Property Management was reported as a Programme in line with the interim organisational structure. Programme 1: Administration Purpose: The purpose of the Administration programme is to ensure that all strategic operational and financial mechanisms and systems required for the delivery of the Department s goals and objectives are established and function at optimal efficiency. Furthermore, it ensures that Departmental staff adheres to the code of ethics in line with Batho Pele principles. The Programme is also responsible for ensuring that the Department achieves its transformation targets and priorities, thereby contributing to National transformation targets and priorities, particularly in respect of poverty, unemployment and creating decent work and sustainable livelihood. Strategic Objective of the programme Continuous improvement of the technical and administrative capacity of the Department to pursue goals of the Gauteng Provincial Government. Service Delivery Objectives and Indicators Office of the MEC Measurable Objective To coordinate the mainstreaming of MEC special projects into Departmental programmes Measure/ Indicator % of special projects integrated Actual Performance against Target Reason for Variance Target Actual 100% 100% - 31

34 Measurable Objective To strengthen intersectoral and community relations To timeously respond to questions from the Legislature Measure/ Indicator No. of outreach programmes No. of special events facilitated % of Legislature queries responded on time Actual Performance against Target Reason for Variance Target Actual % 100% - To coordinate the tabling of relevant documents to Legislature To establish and maintain political relationships with strategic partners within the private and public sectors To coordinate the formalisation of new/existing international, bilateral and multilateral cooperative agreements No. of documents tabled No. of initiatives formalised No. of cooperative agreements formalised Only twelve documents required for tabling for the year under review 15 4 Project put on hold and to continue in next financial year 6 0 No bilateral/ multilateral agreements entered into during the year under review To resolve queries received from the public in relation to service delivery % of queries resolved 100% 100% - 32

35 Office of the HOD Measurable Objective To Interface MEC s office with Administration To provide confidentiality over HoD documents To facilitate Departmental performance by the HoD. To create a transparent and accessible governance mechanism for the Department Measure/Indicator Actual Performance against Target Target Actual Reason for Variance Quarterly updated Calendar % compliance to deadlines on responses to Legislature Questions & queries from the MEC Turnaround time for submission of committee reports Submission by deadline 100% 100% - Submission by deadline % times reception is manned 100% 100% - % compliance to the Minimum Information Security Standards No. of progress/ performance review meetings with Chief Directorates No. of Performance Reviews with branches A two way communications mechanism to ensure a governance system that is transparent and accessible Commission a revised Communications Strategy to include regular communication updates to all staff related to executive decisions as well as current happenings within the Department. Introduction Management on the Floor where the HOD communicates current happenings within the Department 100% 100% Draft strategy developed and in the process of discussion