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2015 Adjustment Appropriation Bill

South Africa Works because of

Public Works

I Public Works I Parliament I Cape Town

Presentation to the Standing Committee on Appropriation

10 November 2015

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Contents

1. Budget Adjustments Slide 3

2. 2015 Budget Adjustment Implications Slide 7

3. Financial Performance Slide 10

4. Non-financial Performance Slide 13

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Budget Adjustment

Purpose of the Presentation

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Adjusted Budget Allocation

  2015/16

Voted (Main

appropriation)

Virements and shifts

due to savings

Declared unspent

funds

Adjusted appropriation

R thousand R`000 R`000 R`000 R`000Programmes

Administration                   475,996           1,350                 -                477,346 

Intergovernmental Coordination                     47,223          (1,500)                -                  45,723 

Expanded Public Works Programme                1,992,234                 -          (38,865)          1,953,369 

Property and Construction Industry Policy and Research                3,802,962                 -          (60,000)          3,742,962 

Prestige Policy                     92,672              150                 -                  92,822 

                              -                   -                   -                          -   

Total for Programmes 6,411,087 - (98,865) 6,312,222

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  2015/16

Voted (Main

appropriation)

Virements and shifts

due to savings

Declared unspent

funds

Adjusted appropriation

R thousand R`000 R`000 R`000 R`000Economic classification        Current payments 882,781 1,300 - 884,081

Compensation of employees                   474,995                 -                   -                474,995 Goods and services                   407,786           1,300                 -                409,086          

Transfers and subsidies 5,500,246 (1,300) (98,865) 5,400,081

Provinces and municipalities                1,178,866                 -          (38,865)          1,140,001 Departmental agencies and accounts                3,703,137          (1,300)       (60,000)          3,641,837 Foreign governments and international organisations                     23,273                 -                   -                  23,273 Public corporations and private enterprises                     50,000                 -                   -                  50,000 Non-profit institutions                   534,816                 -                   -                534,816 Households                     10,154                 -                   -                  10,154 

Payments for capital assets 28,060 - - 28,060 Machinery and equipment                     28,060                 -                   -                  28,060 

Total 6,411,087 - (98,865) 6,312,222

Adjusted Budget Allocation

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Reduced Transfers

Voted (Main

appropriation)

Declared unspent funds

Adjusted appropriation

R thousand R`000 R`000 R`000

     

Provinces and municipalities 591,175 (38,865) 552,310

Expanded public works programme integrated grant for provinces             350,612                   (24,405)                 326,207 

Social sector expanded public works programme incentive grant for provinces             240,563                   (14,460)                 226,103 

      

Departmental agencies and accounts 3,584,652 (60,000) 3,524,652

Property Management Trading Entity          3,584,652                   (60,000)              3,524,652 

Total 4,175,827 (98,865) 4,076,962

Reduced allocations

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2015 Budget Adjustment Implications

Purpose of the Presentation

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A total of 1 127 186 work opportunities were planned for 2015/16, with the total budget allocation of R1.7 billion.

During the adjustment estimates R38 million was reduced from both EPWP Integrated Grant (R24 million) and Social Sector Incentive Grant (R14 million) resulting in the revised target of 1 126 779 for work opportunities.

Reduced budget allocation for the grants will result in:

Creation of less employment opportunities for the current financial year

Less opportunities for skills development

Service delivery being impacted negatively as less people being employed

2015 Budget Adjustment Implications: EPWP Incentive Grant

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The Department is in the process of acquiring the property known as Parliament Towers in Cape Town.

This property houses the DG’s of the respective departments and is in close proximity to Parliament.

An investment analysis has shown that it would be in the best interest of Government to acquire the property instead of continuing the lease of the building from a private sector company.

Due to the budget adjustment, the department will not be able to afford the full offer price in the current financial year and the acquisition will have to be postponed to the next financial year.

2015 Budget Adjustment Implications

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Financial Performance

Purpose of the Presentation

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 30-Sep-15

Adjusted appropriation

Expenditure Projections for the remaining period

Actual Expenditure %

R thousand R`000 R`000 R`000 Programmes

Administration                   477,346                216,743                260,603  45%

Intergovernmental Coordination                     45,723                  15,024                  30,699  33%

Expanded Public Works Programme                1,953,369             1,029,925                923,444  53%

Property and Construction Industry Policy and Research                3,742,962             1,194,894             2,548,068  32%

Prestige Policy                     92,822                  42,123                  50,699  45%

         

Total for Programmes 6,312,222 2,498,709 3,813,513 40%

Financial Performance

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  30-Sep-15

Adjusted

appropriationExpenditure Projections for the

remaining periodActual

Expenditure %

R thousand R`000 R`000 Economic classification        Current payments 884,081 404,939 479,259 46%

Compensation of employees                   474,995                219,859                255,136  46%

Goods and services                   409,086                184,963                224,123  45%

Interest and rent on land                        117                          -    0%

         

Transfers and subsidies 5,400,081 2,083,241 3,316,840 39%

Provinces and municipalities                1,140,001                630,674                509,327  55%

Departmental agencies and accounts                3,641,837             1,076,200             2,565,637  30%

Foreign governments and international organisations                     23,273                  23,363                        (90) 100%

Public corporations and private enterprises                     50,000                  50,000                          -    100%

Non-profit institutions                   534,816                293,154                241,662  55%

Households                     10,154                    9,850                       304  97%

Payments for capital assets 28,060 10,529 38%

Machinery, equipment and intangible assets                     28,060                  10,529                  17,531  38%

         

Total 6,312,222 2,498,709 3,796,099 40%

Financial Performance

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Non-financial Performance

Purpose of the Presentation

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Selected Performance Indicators as per the ENE

Performance Indicator Annual Target Cumulative Performance (Q1&2)

Comments (on the basis of Q2)

Number of work opportunities reported

1 127 186 work opportunities created through EPWP Phase 3.

318 108 work opportunities reported through EPWP Phase 3..

Target partially Achieved - Delays in the reporting system

Number of work opportunities created in rural municipalities aligned to the EPWP business plan.

700 000 Work opportunities created in rural municipalities.

269 844 work opportunities created in rural municipalities.

Target partially Achieved – Delays in the reporting system

Percentage of EPWP participation among designated groups (women, youth and persons with disabilities) aligned to the EPWP Phase III Business Plan.

55% Women 55% Youth 2% PWD

70.5% Women 45.4% Youth 1.7% PWD

The target on Youth will improve once the projects that target Youth have been awarded.

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Non-financial Performance

Performance Indicator Annual Target Cumulative Performance (Q1&2)

Comments (on the basis of Q2)

Number of IGR forums convened for oversight of the Public Works Sector

12 intergovernmental forums convened

7 intergovernmental forums convened

Target Achieved

Promulgation of a public works act - Draft 1 of Public Works White Paper consulted with key stakeholders

Revised procurement strategy (moving from nominated service provider to open tender) was initiated.

Development of Prestige norms and standards

Norms and standards for category III approved by Parliament

First Draft norms and standards for category iii clients developed

In the process of completing the remainder of standards and norms and getting them approved

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Non-financial Performance

Performance Indicator Annual Target Cumulative Performance (Q1&2)

Comments (on the basis of Q2)

Number of projects completed within agreed construction period

62 48 Target overachieved Continuation of the turnaround strategy to improve performance. 1). Encourage termination of non performing contractors & consultants. 2).Called intervention meetings with contractors. 3). Issued mora letters. 4). Increased project monitoring

Number of projects completed within approved budget

77 47

Percentage of identified Real Estate Assets verified

100% of identified Real Estate Assets verified

99.12% of identified Real Estate Assets verified

Target Achieved: Cumulative target therefore most of the Real Estate Assets were verified by 31 March 2015

Percentage efficiency (turnaround time) for unscheduled maintenance on freehold property within 5 days

65% 32% calls managed (logged and completed)

Currently developing the manual for uniformity and alignment of business processes to the system

Some PMTE Performance Highlights

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Department of Public Works (National )Head Office: Public WorksCGO BuildingCnr Bosman and MadibaPretoria CentralPrivate BagX65Pretoria0001Website: http://www.publicworks.gov.za

Thank You