1. Standing Committee on Appropriation Office of the Director-General
DEPARTMENT OF PUBLIC WORKS 4th Quarter Performance of 2015/16 and 1st Quarter Performance of 2016/17 for the Department of Public Works
Standing Committee on Appropriation
Parliament, Cape Town
15th September 2016
Office of the Director-General

2. Content Content Slide No.
Areas of under expenditure - Summary Expenditure per Economic Classification
3 – 4
Performance Information per programme (details in Annexure A and B) 5
Service delivery implications from slow expenditure and implications fro the targets in the NDP
6 – 7
Challenges of the IDT 9

3. Areas of under expenditure
Summary Expenditure per Economic Classification – as at 31st March 2016 (2015/16)
Expenditure Economic classification – as at 31st March 2016 – (100% Guideline)
As at 31 March 2016
2014/15
Percentage of total budget
Annual Appropriation
Actual Expenditure as at 31 March 2016
Actual Expenditure – March 2015 %
R'000
Current payments
Compensation of employees 7%
96%
99%
Goods and services
98%
Transfers and subsidies
85%
100%
Payment for capital assets
Infrastructure -
82%
Machinery & equipment / intangible assets 0%
28 060
23 537
84%
Payments for financial assets 1%
44 403
3 439
Total
The Department spent 99% of the total allocation for 2015/16 and the unspent of 1% relates to:
Compensation of employees under spent (4%) due to vacant positions filled in the latter part of the financial year. The under spending relate to EPWP.
Goods and services under spent (2%) due to late receipt of invoices and therefore reported as accruals in the financial statements.
Machinery and equipment under spent (16%) and the under spent amount is linked to vacancies

4. Summary Expenditure per Economic Classification - 30 June 2016
Expenditure Economic classification – First Quarter Report – (25% Guideline)
For the first quarter ended 30 June 2016
2015/16
Percentage of total budget
Annual Appropriation
Actual Expenditure as at 30 June 2016
Actual Expenditure – June 2015 %
R'000
Current payments
Compensation of employees 7%
25%
21%
Goods and services
67 940
16%
79 112
19%
Transfers and subsidies
85%
28%
31%
Payment for capital assets
Machinery & equipment / intangible assets 1%
38 508
6 598
17%
4 612
Total
26%
29%
Compensation of employees expenditure of 25% is in line with the guidelines for the first quarter.
Goods and services expenditure of 16% is within the spending trend for the first quarter. Not under and over spending projected
Transfer and subsidies expenditure of 28% is in line with drawings, and funds will be fully spent at the end of the financial year.
Machinery and equipment spending of 16% is within the guidelines for the first quarter.

5. DPW– 2015/16 and 2016/16 Q1 % Achievement per Programme
Of the 38 targets for the Quarter, 21 were achieved (55%)
Of the 22 targets for the Quarter, 17 were achieved (77%)

6. National Development Plan Targets - 2015/16
 National priorities
NDP Chapter & MTSF National Outcome
MTEF Budget
Related performance indicators
2015/16 Performance
Creating decent employment through inclusive economic growth
NDP Chapter 3: Economy and employment
New Growth Path : Jobs Driver 4 : Investing in Social Capital
MTSF Outcome 4: Decent employment through inclusive economic growth
The medium-term budget allocation for EPWP (including compensation of employees and goods and services) is R2 billion.
Number of work opportunities as reported in the EPWP reporting system aligned to the EPWP Business Plan (Phase III)
work opportunities created through the EPWP Phase 3
Creating an inclusive social protection system
NDP Chapter 11 : Social protection
MTSF Outcome 13 – An inclusive and responsive social protection system
The medium-term budget allocation for EPWP Social Sector Grant is R226 million
Creating a skilled and capable workforce to support an inclusive growth path
NDP Chapter 9 : Improving education, training and innovation
MTSF Outcome 5 - Skilled and capable workforce to support an inclusive growth path.
CETA: R50 million (ending March which is the end of the current commitments on National Skills Development Strategy 111)
DPW Young Professional Programme : R45 million (ending 2016/2017)
DPW Management Trainees: R16,2 million (ending 2016/2017)
DPW Mentorships (Professional Services): R9,6 million (ending 2016/2017
CBE : R23.9 million
Number of beneficiaries participating in the DPW skills development programme
1 294 Beneficiaries participating in the DPW Skills Development
90 Young Professionals
700 Interns
319 Learnerships
52 Management Trainees
133 Programme Artisans
(Target beneficiaries)

7. National Development Plan Targets - 2016/17
 National priorities
NDP Chapter & MTSF National Outcome
MTEF Budget
Related performance indicators
Creating decent employment through inclusive economic growth
NDP Chapter 3: Economy and employment
New Growth Path : Jobs Driver 4 : Investing in Social Capital
MTSF Outcome 4: Decent employment through inclusive economic growth
The medium-term budget allocation for EPWP (including compensation of employees and goods and services) is R2.3 billion.
Number of quarterly reports on Public Employment Programmes (PEPs) within EPWP completed
Creating an inclusive social protection system
NDP Chapter 11 : Social protection
MTSF Outcome 13 – An inclusive and responsive social protection system
The medium-term budget allocation for EPWP Social Sector Grant is R360 million
Creating a skilled and capable workforce to support an inclusive growth path
NDP Chapter 9 : Improving education, training and innovation
MTSF Outcome 5 - Skilled and capable workforce to support an inclusive growth path.
CETA funds: R50 mil : 2013/14 – 2016/2017 (end of current commitments on National Skills Development Strategy III)
Young Professional Programme : R45m /2017
Management Trainees - R16,2m : 2016/2017
Mentorships (Professional Services) - R9,6m : 2016/2017
Bursary Scheme – R9.8m: 2016/2017
CBE skills development programme – R40.2 million
Number of beneficiaries participating in the DPW skills development programme

8. IDT CHALLENGES

9. CHALLENGES OF THE IDT
After 11 consecutive unqualified audit opinions, spanning 2002/03 to 2012/13, the IDT received a qualified audit opinion for the 2013/14 financial year followed by a disclaimed opinion in 2014/15 and another disclaimer in 2015/16.
Basis of the disclaimer
Presentation of material balances of Programme spend and of Programme reserves and liabilities for audit purposes without accurate and complete underlying accounting records.
Inadequacy of reconciliations performed on the underlying accounts relating to Management fees, Trade receivables, Impairment of Trade receivables and Provision for doubtful debts.
The impact of take-on balances in the project accounting system emanating from the migration process that took place in 2013/14.
Vulnerable funding model opening the organisation to the threat of solvency i.e. model highly dependent on business portfolio size, payments by clients, and management fee rates.
Prolonged transformation process impacting adversely on staff morale, staff turnover, strategic and operations planning, and organisational performance.
Funding from National Treasury was obtained at a level of R50 million for the last three years ending 31 March The support helped to bridge the transition to self-funding. Considering the vulnerable state of the IDT finances, the continuation of the support for a further two years will strengthen the organisation.
Action has been and continue to be taken against responsible officials for transgressions and dereliction of duty. These include action against the former CFO and Acting Executive responsible for Strategy and Corporate Performance both of whom had their services terminated.

10. Thank You