1. BRIEFING THE PORTFOLIO COMMITTEE ON WATER AND SANITATION ON THE PROCLAMATION BY THE STATE PRESIDENT Presenter: Mr T Balzer Director-General (Acting) Portfolio Committee on Water & Sanitation Date: 30 July 2014 Presenter: Mr T Balzer Director-General (Acting) Portfolio Committee on Water & Sanitation Date: 30 July 2014

2. PRESENTATION OUTLINE 2 Slide Number 1.Introduction3 2.The Presidential Proclamation4 3.The NMOS Process5 3.1 NMOS Terms of Reference (TORs)5 3.2NMOS Legal Aspects6 3.3NMOS Governance Structure7 3.4 NMOS Steering Committee Composition and Functions8 3.5 NPT Composition and Functions9 3.6 DPT Composition and Functions10 3.7 General NMOS Reporting Protocol11 3.8NMOS Programme Timelines12 4.The Sanitation Function13 4.1 Sanitation mandate13 4.2 Current Overview of the Sanitation programme14 4.3 Current Sanitation Functional Configuration15 4.4 Operational Budget Allocation16 4.5 Capital Budget Allocation (BEP)17 4.6 Capital Budget Allocation (RHIG)17 5. Implementation Progress19 6.Risks and Mitigation26 7. Conclusion27

3. 1. Introduction  New Cabinet was announced on 25 May 2014 and introduced a number of changes to the previous configuration of the national Executive and departments in terms of sections 91(2) and 93(1) of the Constitution.  The Announcement had a direct impact on the structures in support of Ministers and Deputy Ministers: New departments were created, some with the transfer of functions between departments to give effect to government’s mandate for efficient delivery.  For the Department of Water Affairs, the functional content of departments will change to give effect to the new ministerial portfolio, mainly by transferring the sanitation function from the Department of Human Settlements (DHS), to form the Department of Water and Sanitation. 3

4. 2. PRESIDENTIAL PROCLAMATION  The Presidential Proclamation no. 43 of 2014 (dated 8 July 2014) paves way for the establishment of various Departments in support of new ministerial portfolios. This includes the establishment of the Department of Water and Sanitation (DWS).  The Department of Water and Sanitation thus incorporates the mandates of the Department of Water Affairs and the sanitation function transferred from the Department of Human Settlements (DHS).  The transfer of the sanitation function from DHS is facilitated through the National Macro Organisation of the State (NMOS) Programme, coordinated by the Department of Public Service and Administration (DPSA), National Treasury and led by the Presidency. 4

5. 3. GENERAL OUTLINE OF THE NMOS PROGRAMME 5 3.1NMOS Terms of Reference (TORs)  Describe the programme of action needed to ensure that the macro organizational changes give administrative effect to the President’s new Cabinet portfolios.  Ensures alignment between the announced Ministerial portfolios and the administrative structures in support of ministers responsible for such portfolios.  Sets out the roles and functions of the primary role players governing and contributing to the roll-out of the NMOS programme –Governance structures (NSC, NPT, DPT) –Stakeholders (labour, entities, departments) –Support staff The NMOS TORs were developed to:

6. 3. GENERAL OUTLINE OF THE NMOS PROGRAMME 6 3.2NMOS Legal Aspects Public Service Regulation (PSR) 1/III/H - If the Minister or a premier of a province makes a determination regarding the transfer of functions between departments- The relinquishing department shall transfer all concomitant resources, including personnel, to the receiving department; The recipient department shall co-ordinate the transfer; The recipient department shall accept accountability for the functions on the date of the transfer; The accounting officer of the relinquishing department shall retain accountability for matters originating prior to the date of transfer; The transfer of personnel shall take place with due regard to the requirements of the Labour Relations Act; and The transfer of funds shall take place in accordance with the requirements of paragraph 6.5 of the Treasury Regulations.

7. 3. NMOS PROGRAMME NMOS 2014: National Steering Committee: DG: DPSADG: Presidency (Chair) DG: GCISDG: DPW DG: NTDGs of Affected departments NMOS 2014: National Steering Committee: DG: DPSADG: Presidency (Chair) DG: GCISDG: DPW DG: NTDGs of Affected departments NMOS: National Project team. DG DPSA: ChairDDG: Governance: DPSA Secretariat NMOS: National Project team. DG DPSA: ChairDDG: Governance: DPSA Secretariat PRESIDENT 7 Departmental Project Team (DPT) Work streams: WS 1 Org Scoping/ HR Staff Audit WS 2 Infrastructure & Assets WS 3 Finance & Budgets WS 4 ICT Systems WS 5 Legal & Policy Matters WS 6 Labour, Change Mgt &Communications National Project Team (NPT) Work streams: WS 1 Org Scoping/ HR Staff Audit WS 2 Infrastructure & Assets WS 3 Finance & Budgets WS 4 ICT Systems WS 5 Legal & Policy Matters WS 6 Labour, Change Mgt &Communications 3.3NMOS Governance Structure

8.  Composition: –DGs in the Presidency, GCIS, DPSA, National Treasury, Public Works and the DGs of all affected departments.  Functions: i.The implementation of the mandate of Government as determined by the President and Cabinet. ii.The overall management of the NMOS Programme as described as above. iii.To provide overall guidance pertaining to issues that may emerge from time to time. iv.To resolve and trouble-shoot any ambiguity in interpretation of political decisions and legal mandates and refer to political principals. v.To unblock obstacles that may emerge during the roll-out of the programme in any line department. vi.To receive progress reports from the National Project Team on the work done in the NPT and DPTs. vii.To ensure quality assurance of the final products and reports for decision-making by political office bearers. viii.To act as a high level forum for consultation for affected departments and support to departments. 8 3. NMOS PROGRAMME (Cont…) 3.4 National Steering Committee Composition and Functions

9.  Composition: - NPT with representatives from the relinquishing and recipient departments, under the stewardship of the DPSA. Task teams will be supported by officials from the DPSA, the National Treasury and DPW.  Functions: i.The overall management of the reconfiguration process at departmental level. ii.To oversee the implementation of the domesticated work-plan for each DPT derived from the generic work plan. iii.To provide regular progress reports of the DPT to the NMOS Steering Committee. iv.Render support and advice to the DPTs. v.To ensure quality assurance of the products and reports of the relevant DPT. vi.To unblock obstacles that may be encountered by the DPTs. vii.To act as a forum of consultation between NPTs and DPTs. viii.To integrate the product of the DPTs before submission to the NMOS Secretariat 9 3. NMOS PROGRAMME (Cont…) 3.5 National Project Team (NPT) Composition and Functions

10.  Composition (relinquishing and recipient departments share one DPT): –DPT with representatives from the relinquishing and recipient departments, under the chairpersonship of the recipient DG. Departmental work streams will be supported by officials from the National Project Team.  Functions: i.The overall management of the different departmental work streams. ii.To implement the domesticated work-plan for each DPT (derived from the generic work plan). iii.To provide regular progress reports to the NPT. iv.Ensure quality assurance of the products and reports of the relevant DPT. v.Unblock obstacles that may be encountered by the various work streams. vi.Act as a forum of consultation between various work streams. vii.Integrate the product of the work streams before submission to the DG and NPT. viii.DPTs must render their own secretariat services and maintain minutes of all meetings. ix.Ensure that the DG/HOD of recipient and relinquishing departments sign off on progress report. 10 3.6 Departmental Project Team (DPT) Composition and Functions 3. NMOS PROGRAMME (Cont…)

11. 11 3.7General NMOS Reporting Protocol 3. NMOS PROGRAMME (Cont…)  The DPSA is responsible for the project management (Secretariat) in support of the NMOS programme and channels reports to the National Steering Committee, via the DG:DPSA.  The NMOS Project Team and Secretariat in consultation with the Steering Committee, determine a schedule of meetings for purposes of enabling the NPT to provide progress reports to the National Steering Committee.  NPT sequence and schedule own meetings and reporting arrangements to be aligned with those of the National Steering Committee (Reporting Meetings takes place once every second Friday).  A generic project plan and template for reporting had been developed.  DPT sequence and schedule own meetings and reporting arrangements to be aligned with those of the NPT.

12. 12 3.8NMOS Programme Timelines 3. NMOS PROGRAMME (Cont…) Prospective Deadline Status a)Establish programme governance structures13 June 2014Done b)Preparation for programme execution by work-streams13 June 2014Done c)Transfer the administration of legislation to Ministers27 June 2014Done d)Creation of departments and transfer of functions26 Sept 2014Done e)Organizational structuring of affected departments26 Sept 2014 On schedule g) Infrastructure and Assets29 August 2014On schedule h)Finance and Budgets26 Sept 2014 On schedule i)ICT systems29 August 2014 On schedule j)Legal matters26 Sept 2014 On schedule k)Change management and communicationongoing On schedule  The national steering Committee has set the following timelines:

13. 4. THE SANITATION FUNCTION 13 4.1Sanitation Mandate  The Constitution, 1996 (Act no 108 of 1996) I.Section 10: Every person has inherent dignity and the right to have their dignity respected and protected II.Sec 24(a) Everyone has the right to an environment that is not harmful to their health or well being.  The National Water Act (NWA) and the Water Services Act (WSA), are the primary legal instrument relating to the accessibility and provision of water services (which include drinking water and sanitation services).  Water Services Act,108 of 1997, Section 3, (1) – (3): Right of access to basic water supply and basic sanitation i.Everyone has a right of access to basic water supply and basic sanitation. ii.Every water services institution must take reasonable measures to realise these rights. iii.Every water services authority must, in its water services development plan. Provide for measures to realise these rights. iv.The rights mentioned in this section are subject to the limitations contained in this Act.  In terms of the WSA, it is the responsibility of water services authorities to ensure access to both water supply services and basic sanitation.

14. 4. THE SANITATION FUNCTION 14  The Department of Human Settlement (DHS) is relinquishing a sanitation function to the Department of Water Affairs (DWA), after which it will eventually translate into the Department of Water and Sanitation.  The function is performed at a Chief Directorate level named, National Sanitation Programme. The function is being executed in line with the following key functional outputs: i.Implementation of the Rural Household Infrastructure Grant (RHIG). ii.The Implementation of Bucket Eradication Programme (BEP) iii.Supporting Municipalities on the implementation of sanitation programmes funded by Municipal Infrastructure Grant iv.Supporting municipalities on Health and Hygiene advocacy v.Mainstreaming of sanitation in IDPs including councillor induction vi.The White Paper on Sanitation developed, DWS will handle approval process vii.MDG target on sanitation met, RSA need to meet country target: Universal access 4.2Current overview of the Sanitation Programme

15. 4. THE SANITATION FUNCTION (Cont.. ) 15 Directorate: Sanitation Admin & Coordination Directorate: Sanitation Programme Support Directorate: Sanitation Inter dept Coordination Sanitation Programme: Regional operations CD: National Sanitation Programme Branch: Programme Management Unit 4.3Sanitation Functional Configuration  The Sanitation function is located under the Branch Programme Management Unit in the Department Human Settlements,  Function is performed at both National (Four Directorates) and Provincial levels (Across all nine Provinces at Sub-Directorate level).

16. 16 Budget itemAll inclusive budget Information (e.g. compensation, goods and services, accommodation, capital, transfers) Portion of the budget to be shifted (R000.00) Changes in budget required for function shift. (R000.00) Total Budget (R000.00) Line Function/ budget programme structure: Compensation of Employees--38 297 Goods & Services--52 505 Capital Assets684 TOTAL-91 487 Expenditure (31 May 2014) - 2 mths-6 092 Remaining Budget (31 May 2014)--85 395 4. THE SANITATION FUNCTION (CONT...) 4.4 Operational Budget allocation

17. 17 BUCKET ERADICATION PROGRAM: ALLOCATION PER PROVINCE 2014 / 20152015 / 2016 Eastern CapeR143 443 000R155 602 000 Free StateR335 337 000R363 763 000 GautengR98 915 000R107 299 000 Kwazulu NatalR36 086 000R39 145 000 LimpopoR1 851 000R2 008 000 MpumalangaR13 850 000R15 024 000 Northern CapeR125 297 000R135 919 000 North WestR38 748 000R42 032 000 Western CapeR105 650 000R114 606 000 TotalR899 177 000R975 399 000 Targeted Delivery(30,000 units targeted) (32,500 units Targeted) 4. THE SANITATION FUNCTION (CONT....) 4.5 Capital Budget Allocation: Bucket Eradication Programme (BEP) NB: During 2013/14: Budget: DHS allocated R450m and DWA R200m During 2013/14: Delivery: 28,146 toilets delivered (RHIG) & 6000 buckets replaced)

18. 18 4. THE SANITATION PROGRAMME (cont...) RHIG PROGRAM: ALLOCATION PER PROVINCE 2014 / 20152015 / 2016 Eastern CapeR25 000 000R24 328 000 Free StateR4 500 000R5 000 000 Gauteng ---- Kwazulu NatalR42 124 000R50 000 000 LimpopoR22 000 000R23 000 000 MpumalangaR4 500 000R 4 000 000 Northern CapeR4 500 000R 4 000 000 North WestR9 000 000R 8 000 000 Western Cape ---- TOTALR 113 124 000R 118 328 000 Targeted Delivery(3,700 units Targeted) (3,900 units Targeted) 4.6 Capital Budget Allocation (RHIG)

19. 5. NMOS IMPLIMENTATION PROGRESS 19 5.1 Scope of work  Establishment of the Departmental Project Team (DPT) to manage the work of work streams and manage reports to the NPT.  Manage the transfer of the sanitation function from Department of Human Settlement (DHS) to align the departmental functions with the new ministerial portfolio. The department will be created through the transfer of functions DHS.  Review of the functional content of department to give effect to the new ministerial portfolio.

20. 5. NMOS IMPLIMENTATION PROGRESS 20 5.2 Progress on milestones  Progress in accordance with the NMOS Plan: Milestone/Work Area Progress 5.2.1 Establishment of the DPT Establishment of the DPT Governance structure The DPT was established 09 June 2014, following the National Steering Committee and National Project Team meetings. The DPT is chaired by the acting DG, supported by a Project Leader and a two Deputies. Six work streams were also established, with membership from both Departments. Establishment of Work Streams, activity plans and reporting.

21. 5. NMOS IMPLIMENTATION PROGRESS 21 5.2 Progress on milestones (Continued)  Progress in accordance with the NMOS Plan: Milestone/Work AreaProgress Work stream Progress-- 5.2.2Organizational scoping, staff audit and organizational design Analysis of the function, organizational design, posts and staff audit, transfer of posts and employees  The analysis of the function and the designing of the organisational structure is underway.  The identification of posts to be transferred had been done, with 99 posts (67 filled) related to the Sanitation function to be transferred from DHS.  Employees to be transferred once the entire administrative process is completed.  The Audit of personnel files is underway.

22. 5. NMOS IMPLIMENTATION PROGRESS 22 5.2 Progress on milestones (Continued)  Progress in accordance with the NMOS Plan: Milestone/Work AreaProgress Work stream Progress-- 5.2.3Infrastructure and Assets Analyze assets register, building and accommodation needs, including parking requirements.  The audit capital assets for 2013/14 had been finalised as part of the current audit process.  Audit and analysis of the asset register is underway, verification of assets to commence on 10 August 2014.  The determination of office accommodation and parking requirements is underway

23. 5. NMOS IMPLIMENTATION PROGRESS 23 5.2 Progress on milestones (Continued)  Progress in accordance with the NMOS Plan: Milestone/Work AreaProgress Work stream Progress -- 5.2.4Finance and Budget Gather information on the approved budget of the relinquishing departments as it pertains to the functions to be transferred. Identify the portion of the budget to be transferred to the new departments.  Budget is as published in the ENE document.  Discussions are underway on identifying other related financial implications 5.2.5ICT SystemsGather information on ICT systems, audit and analyze the ICT assets should be ring- fenced for transfer.  Audit of ICT assets is being undertaken.

24. 5. NMOS IMPLIMENTATION PROGRESS 24 5.2 Progress on milestones (Continued)  Progress in accordance with the NMOS Plan: Milestone/Work AreaProgress Work stream Progress -- 5.2.6Legal and Policy Matters Conduct an audit of all legal instruments guiding service delivery in the Department (legislation, contracts, service level agreements, memorandums of understanding, etc.)  List of all contracts relating to sanitation services has been compiled and due diligence is being performed.  The draft transfer agreement has been completed, to be finalised for approval once all annexures are completed.

25. 5. NMOS IMPLIMENTATION PROGRESS 25 5.2 Progress on milestones (Continued)  Progress in accordance with the NMOS Plan: Milestone/Work AreaProgress Work stream Progress -- 5.2.7Labour Relations, Change Management and Communication Develop management Plan for the change associated with the transfer of functions and the creation of a the Department. This will include Batho Pele Engagements and Communication Strategy to manage the transition and also consultation with labour.  The DPSA is managing the engagement with labour, at high level.  At departmental level, general Internal Communication has gone out to employees and consultation with labour has begun.

26. 6. RISKS AND MITIGATION 26 Risk IdentifiedPossible ImpactMitigation 6.1 NMOS: Transfer of staff with function and budget Slow down in the rate of delivery Ensure staff transfer is smooth/ budget transfer done with National Treasury and Programme Management (BEP&RHIG) un- hindered 6.2 Lack of Operation and Maintenance (O&M) budget Backlog increases against increased delivery (No inverse relationship) DWS and National Treasury consider establishing an O&M budget ring-fenced 6.3 Meeting the universal target backlog (2.4 million households) Increased population without adequate sanitation thus disease outbreak. WSA, DCOG and National Treasury to ring-fence Sanitation budget within MIG. Increased allocation proposed. 6.4Bulk infrastructure inadequate Waterborne sanitation to limited households, contamination of water resources Increased budget allocation for bulk infrastructure

27. 7. CONCLUSION 27  There is sufficient support and collaboration from the DPSA and the National Treasury towards NMOS processes at the DPT and the NPT levels. Work-streams from both departments have sound working relationship and are implementing such joint work-stream plans that yield fruitful results on a regular basis this far.

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