201920 Fourth Quarter Financial Cumulative and Non Financial

2019/20 Fourth Quarter Financial (Cumulative) and Non Financial Performance th 11 June 2020 Portfolio Committee on Public Works and Infrastructure (Parliament, RSA) Office of the Director-General South Africa Works because of Public Works

Purpose • To present to the Portfolio Committee on the 2019/20 Fourth Quarter Financial (Cumulative) and Non Financial Performance Information (Preliminary) 2

Table of Contents Content A. Mandate B. Q 4 Non-Financial Performance – DPW and PMTE C. Top 5 Risks (DPW and PMTE) D. Q 4 Financial Performance – DPW and PMTE E. Recommendation 3

Section A Mandate 4

Mandate of the Department Constitutional mandate The Constitutional mandate is provided for in Schedule 4, Part A, of the Constitution of the Republic of South Africa: Functional Areas of Concurrent National and Provincial Legislative Competence. Legislative mandate The legislative mandate is primarily governed by the Government Immovable Asset Management Act, 2007. The Department regulates the construction industry and built environment through the Construction Industry Development Board Act, 2000 (Act No. 38 of 2000) and the six Professional Council Acts that regulate the six Built Environment Professions (BEPs), and through the Council for the Built Environment Act (Act No. 43 of 2000) Policy mandates • • DPW White Paper: Public Works, Towards the 21 st Century, 1997 DPW White Paper: Creating an Enabling Environment for Reconstruction, Growth and Development in the Construction Industry, 1999 Construction Sector Transformation Charter, 2006 Property Sector Transformation Charter, 2007 DPW Broad-based Black Economic Empowerment Strategy, 2006 Property Management Strategy on BBBEE, Job Creation and Poverty Alleviation, 2007 Green Building Framework, 2011 5

Programme Structure DPW PMTE Programme 1: Administration • Finance and Supply Chain Management Programme 2: Inter-Governmental Coordination Programme 2: Real Estate and Investment Services Programme 3: Expanded Public Works Programme (EPWP) Programme 3: Construction Project Management Programme 4: Property and Construction Industry Policy and Research Programme 4: Real Estate Management Services Programme 5: Prestige Policy Programme 5: Real Estate Information & Registry Services Programme 6: Facilities Management 6

Programme Structure and Shared Services Main Vote PMTE Shared Services • EPWP • Property and Construction Industry Policy • Prestige Management • Corporate Services • Governance, Risk and Compliance • Inter-Governmental Coordination • Finance and Supply Chain Management • • • Real Estate and Investment Services Construction Project Management Real Estate Information and Registry Facilities Management 7

Section B DPW - Non- Financial Performance Information Q 4 Preliminary Information 8

Performance Legend Not a Target for that Quarter in the APP but performance reported in the operational Plans/Not Applicable 9

Programme 1: Administration Performance Indicator Annual Target Quarter 4 Target Quarter 4 Performance Comments on Performance Sub-Programme: Management Strategic Objective: To improve governance processes within the Department and PMTE Number of initiatives undertaken to 36 accelerate the transformation agenda of the Department 9 initiatives undertaken to accelerate the transformation agenda of the Department 100% (4 out of 4) 100% Investigations instituted within 30 days of instituted within validated reported allegations 30 days of validated reported allegations 1 x intervention (CFO) Number of interventions recommended 2 x interventions recommended for mitigation of resulting from fraud risk management mitigation of fraud risk within DPW and risk within DPW PMTE and PMTE Percentage of investigations instituted within 30 day of validated reported allegations 100% Investigations instituted within 30 days of validated reported allegations 9 Target Achieved 10

Programme 1: Administration Performance Indicator Annual Target Quarter 4 Target Quarter 4 Performance Comments on Performance Sub-Programme: Finance and Supply Chain Strategic Objective: To provide a compliant internal control, financial and supply chain management service Percentage of compliant 100% invoices settled within 30 days 100% 97% Percentage change in the 100% (R 114 irregular expenditure million) baseline 100% (R 114 million)1% Lack of supporting documents (which led to the transactions being reported as Irregular Expenditure) and centralisation of the condonation process to National Treasury contributed to high-level of underperformance. Some transactions are being investigated externally Percentage of bids 75% awarded within 56 working days from closure of tender advertisement 75% Implementation of SCM Circular No. 92 of 2019/20 - which added more steps in the procurement value chain led to no bids being closed and/or awarded in the period. Introduced external probity audits in Q 3 which impacted turnaround times. Closure of government tender bulletin. External dependency on State Security Agency to security clear service providers. Turnaround time afforded to service providers to resolve and clarify tender information including tax compliance in terms of PAJA Implementation of the PPR 2017 sub-contracting clause which included additional steps in the process (validation of sub-contractors information) Turnaround time for client departments to confirm funding for tenders Inability of Bid Committees to make a quorum due to competing priorities 0% Delay in certification and submission of invoices for processing by line managers 11

Programme 1: Administration Performance Indicator Annual Target Quarter 4 Target Quarter 4 Performance Comments on Performance Sub-Programme: Finance and Supply Chain Strategic Objective: To provide a compliant internal control, financial and supply chain management service Percentage of quotations awarded within 30 90% working days from requisition date 90% 83% 72 Out of 87 Quotations were awarded within 30 days Target Exceeded. Positive market response - Bidders submitted quotes in line with the Request for Quotations. Minimal non-compliance issues (tax, BBBEE, CSD) had to be resolved. Percentage of procurement spend for bids awarded to designated groups in line with Preferential Procurement Regulations 2017 80% 100% bid worth 454 687 awarded to designated groups Percentage of bids awarded to designated groups in line with Preferential Procurement Regulations 2017 80% 100% 1 out of 1 bid awarded to designated groups Target exceeded. SCM Circular 6 of 2018 was promulgated to target designated groups when advertising tenders where feasible - the low volumes (only one bid for the period and one response) led to the exceeding of the target. (NB: the award was made in January 2020 with the bid process started in Q 3. 12

Programme 1: Administration Performance Indicator Annual Target Quarter 4 Target Quarter 4 Performance Comments on Performance Sub-Programme: Corporate Services Strategic Objective: To facilitate organisational transformation through effective performance management Percentage of funded prioritized vacancies filled as per approved recruitment plan 100% Number of Property Management modules 1 implemented (Investment Analysis module) 1 Number of modules enhanced as per ERP implementation plan (Scheduled maintenance, condition assessment, lease in, lease out, and construction project management) 1 5 36% (42 of 118) funded prioritised The majority of the positions were advertised vacancies filled within 6 months during the 2018/19 financial year and were from date of advertisement affected by the moratorium on the filling of positions(from June 2019 to September 2019) Investment Analysis module not User requirements solicitation sessions to fully Implemented (20% completion continue and process mapping, vanilla system of the Investment Analysis Module) walk through Construction Project Module completed (1 of 5 = 20%) 1. Pilot and training Environment configuration 2. Vanilla User manuals developed 3. Training end users on vanilla CPM module of ARCHIBUS, 10 regional office Process mapping, vanilla system walk through 4. Mapping of active Project data in preparation for migration 5. Draft URS/ FRS(Functional Requirements Specifications) 13

Programme 1: Administration Performance Indicator Annual Target Quarter 4 Performance Target Comments on Performance Sub-Programme: Corporate Services Strategic Objective: To facilitate organisational transformation through effective performance management Integrated Single Asset Register developed for the Public Works sector Phase 1 Percentage of reported fraud and 100% corruption misconduct cases subjected to disciplinary processes 100% Percentage of default judgments against 100% the Department prevented 100% Phase 1 of the Integrated Single Asset Register not implemented for the Public Works sector Only a Final Feasibility Report and Digital Strategy completed 100% of reported fraud and corruption misconduct Target Achieved cases subjected to disciplinary processes (A total of four (4) cases of fraud and corruption were addressed in Quarter four) Status of cases: 1 Finalised 2 Pending finalisation of disciplinary hearings 1 pending Council to set down the matter for hearing 100% (10 of 10) default judgments against the Target Achieved Department prevented 14

Programme 2: Intergovernmental Coordination Performance Indicator Annual Target Quarter 4 Performance Target Comments on Performance Sub-Programme: Intergovernmental Relations Strategic Objective: To ensure integrated planning and coordination of concurrent functions Number of performance review reports 2 for the sector Programme of Action presented to Technical Min. Mec 1 No performance review report for the Sector DPME has advised the sector to plan on Programme of Action presented to Technical standardised performance indicators for the Min. Mec owing to the changes in administration 2020/21 financial year. and aligning of the sector to the new priorities of Government Number of agreements signed for joint 15 service delivery with IGR partners 5 Eleven (11) agreements were signed with IGR partners. Number of reviews conducted on the 1 intergovernmental governance structures 1 One (1) review conducted on IGR governance structures Delays in signing of agreements in the previous quarters is the result of: (a) The overachievement, (b) The MOU with the Free State Province and KZN municipalities which were planned for this f/y will only be finalised in the new financial year. (b) The NT agreement is pending finalisation between the IGR partners. A deadlock may result in the agreement not being signed at al 15

Programme 2: Intergovernmental Coordination Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Sub-Programme: Professional Services Strategic Objective: To restore the skills pipeline in the built environment Number of beneficiaries participating 1 212 in the skills programmes 1 212 beneficiaries participating in the skills programmes Target Achieved Number of provinces with state 3 capacity building in the built environment aligned to skills pipeline programme 3 3 provinces with state capacity building in the Target Achieved built environment aligned to skills pipeline programme Number of schools programmes participants enrolled for built environment qualifications 40 40 40 schools programmes participants enrolled Target Achieved for built environment qualifications Number of bursary scheme beneficiaries with completed built environment qualifications 40 40 40 bursary scheme beneficiaries with completed built environment qualifications Public Works academy established Public Works academy not operational Works academy operational academy operations Target Achieved Department has put on hold the Academy plan 16

Programme 3: Expanded Public Works Programme Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Purpose: Coordinate the implementation of the expanded public works programme which aims to create work opportunities and provide training for unskilled, marginalized and unemployed people in South Africa Number of work opportunities 981 497 reported in the EPWP-RS by public bodies Percentage EPWP participation among 55% (Y) 55% youth designated groups (women, youth and 60% (W) 2% 60% women persons with disabilities) reported on the (PWD) 2% persons EPWP RS by public bodies with disabilities 994 699 work opportunities reported in the EPWP More work opportunities were reported than -RS by public bodies. was expected. 41. 94% Youth 68. 33% Women 0. 96% persons with disabilities Failure to attract Youth and Persons with disabilities due to project design and lack of sufficient engagement with Youth and Persons with disability. Target on participation of Women was exceeded because many of the programmes implemented are conducive and attractive for their participation. 17

Programme 3: Expanded Public Works Programme Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Purpose: Coordinate the implementation of the expanded public works programme which aims to create work opportunities and provide training for unskilled, marginalized and unemployed people in South Africa Number of contracted Non Profit 350 Organisations (NPOs) to implement the Non-State Sector (NSS): NPO Programme supported Number of public bodies provided with 290 technical support 350 339 contracted NPOs supported 290 291 public bodies provided with technical support. Number of frameworks on sector convergence approved 1 framework 1 Draft Framework (EPWP Policy). approved (EPWP Policy) 1 Framework approved (EPWP Policy). Most of NPOs that applied were not compliant and some that were appointed did not accept the allocated the conditions of the contract given to them. Marginal deviation due to demand for technical support from public bodies. Further consultation on key draft policy positions could not be undertaken in 2019/21 due to delays experienced with the approval process for the document to be further consulted with all stakeholders. 18

Programme 4: Property and Construction Industry Policy and Research Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Strategic Objective: To research and develop policies and legislative prescripts for the construction and property sectors Developed Public Works Bill Draft Public Works White Paper submitted to Minister for Parliamentary process. Developed Expropriation Act Draft Expropriation Bill submitted to Minister for Parliamentary process The Draft Public Works White paper Due to lack of capacity to drive the White has not been submitted to paper process, the work is in abeyance. the Minister for Parliamentary process Draft Expropriation Bill submitted The Draft Expropriation Bill has not Consultations with NEDLAC took longer to Minister for Parliamentary been submitted to the Minister for than anticipated. process Parliamentary process. Finalisation of the NEDLAC report to the Executive Authority and the Speaker of the National Assembly which precedes the tabling of the Bill for parliamentary processes was delayed as a result of the lockdown. 19

Programme 4: Property and Construction Industry Policy and Research Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Strategic Objective: To research and develop policies and legislative prescripts for the construction and property sectors Developed Construction Industry Draft legislative Draft Revised CIDB Amendment Bill Development Board (CIDB) amendments developed for Policy developed but could not be Amendment Bill submission to Minister submitted to the Minister. Draft Preliminary SEIAS developed. Developed Council for the Built Environment (CBE) Amendment Bill. Further engagements on proposed amendments had to be undertaken including clause by clause engagements in order to address Policy and legal matters. Legal opinion received recommended that due process must be undertaken which include policy development process must be completed prior to the legislation being drafted. This has led the DPWI to focus on development of a Policy position document for consideration by the Minister. Revised Built Environment Final Draft Revised Built Policy development process took longer than Profession (BEPs) Policy Environment Profession (BEPs) anticipated. Due processes including policy submitted to Minister for Policy developed towards development needed to be completed prior to approval. submission to Minister for approval. the legislation being drafted. This has led the DPWI to focus on development of a Policy position document for consideration by the Minister. 20

Programme 5: Prestige Policy Performance Indicator Annual Target Quarter 4 Performance Comments on Performance No Policy approved Stake-holder consultations and engagement on the policy took longer than initially anticipated. Strategic Objective: To improve the delivery of services to Prestige clients Number of prestige policies approved Number of planned state events supported with movable structures Percentage of movable assets provided within 60 days after approval by Prestige clients Signed infrastructure worklists (Presidency and Parliament) 2 policies approved 1 Policy approved 8 planned state events 2 Planned State Events supported with movable structures 7 Unplanned State Events 85% movable assets provided 85% movable assets No request received within 60 days after approval provided within 60 days by Prestige clients after approval by Prestige clients 1 signed infrastructure 1 Signed infrastructure worklists (Presidency and Parliament) Ensure stricter time-frames for stakeholder consultation and engagements. Target Achieved No request received due to moratorium placed on purchase of Furniture Target Achieved 21

PMTE - Non- Financial Performance Information Q 4 Preliminary Information 22

Programme 1: Administration Performance Indicator Annual Target Quarter 4 Performance Target Comments on Performance Sub-Programme: Finance and Supply Chain Strategic Objective: To provide a compliant internal control, financial and supply chain management service Percentage of compliant invoices settled 100% within 30 days 100% 92% Client Departments not confirming funds Percentage change in the irregular expenditure baseline 100% (R 114 million) 100% 1% Percentage of bids awarded within 56 working days from closure of tender advertisement 75% 65% 100% 2 out of 2 bids awarded within 56 working days of closure of tender advertisement Lack of supporting documents (which led to the transactions being reported as Irregular Expenditure) and centralisation of the condonation process to National Treasury contributed to high-level of underperformance. Some transactions are being investigated externally Target Exceeded due to adequate response from the market. An emergency procurement process was invoked. Percentage of quotations awarded within 90% 30 working days from requisition date 80% 83% Target Exceeded. Positive market response - Bidders submitted quotes in line with the A total of 898 out of 1 071 Quotations were awarded Request for Quotations. Minimal nonwithin 30 days compliance issues (tax, BBBEE, CSD) had to be resolved. 23

Programme 1: Administration Performance Indicator Annual Target Quarter 4 Performance Target Comments on Performance Sub-Programme: Finance and Supply Chain Strategic Objective: To provide a compliant internal control, financial and supply chain management service Percentage of procurement spend for bids awarded to designated groups in line with Preferential Procurement Regulations 2017 80% Percentage of bids awarded to designated groups in line with Preferential Procurement Regulations 2017 80% Target exceeded. SCM Circular 6 of 2018 was promulgated to target A total rand value of R 323 835 702 out of R 344 494 designated groups when advertising 112 bids were awarded to designated groups tenders where feasible. The Department has designated all its tenders to achieve transformation and implement sub-contracting. 83% Target exceeded. SCM Circular 6 of 2018 was promulgated to target designated groups when advertising A total of 20 out of 24 bids were awarded to tenders where feasible. The designated groups Department has designated all its tenders to achieve transformation and implement sub-contracting. 94% 24

Programme 2: Real Estate Investment Services Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Sub-Programme: Planning and Precinct Development services Strategic Objective: To direct precinct planning and development for national government in urban and rural areas Number of Government Precinct Development plans aligned with identified municipal (rural & urban) Integrated Development Plans 4 3 Government Precinct Development Target Achieved Precinct Plans: TICRP Church Square, CP development plans Somerset West & Bushbuckridge) aligned Number of sites established for development 4 3 sites established 2 Sites Established: Kunye & Howick There were delays in terms of acquiring city for development Precincts blocks from the City of Tshwane Number of concept designs completed 6 for identified user departments 4 concept designs completed for Target Achieved identified user departments: Howick & Kimberly Precincts, DHSWS Northern Gateway Precinct, Somerset West 25

Programme 2: Real Estate Investment Services Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Sub-Programme: Real Estate Investment Management Strategic Objective: To inform asset management decisions through optimal investment solutions Percentage of feasibility studies 90% feasibility studies completed 101% Information was easily accessible from completed within scheduled timeframes with schedule timeframe (67/66) Feasibility studies external dependencies. completed with schedule timeframe Number of High Level / UAMP Feasibility (Quarterly target of 66 projects) Studies conducted. Some requests contained more than one subproperty / request Percentages of valuations completed within schedules timeframes Percentages of responsive disposal requests approved within scheduled timeframes Number of buildings performance measured in identified performance areas 90% valuations completed within 121% scheduled time frames 80/66 valuation reports completed within scheduled time frame 90% disposal requests processed 84% by 31 March 2019 by 31 March 2020 228/270 disposal requests processed by 31 March 2019 Land Reform - 100 Human Settlements - 20 Commercial - 30 Commercial - 150 800 200 buildings performance 232 buildings performance reports measured in identified completed performance areas Extra Effort was made by Investment Analysis 80 valuations completed due to backlog in the previous quarter Some of the planned projects could not be processed owing to insufficient supporting documentation. To cover shortfall from previous quarter 26

Programme 3: Construction Project Management Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Sub-Programme: Construction Project Management Strategic Objective: To develop detailed construction plans that direct the execution of construction projects and ensure that construction programmes are implemented according to approved criteria Number of approved infrastructure project designs 103 25 18 Slow progress in achieving sketch plan approvals due to Consultants not meeting required specifications. Designs completed late due to changes by the Clients. Number of approved infrastructure projects ready for tender 140 30 15 Number of infrastructure sites handed over for construction 116 25 16 Procurement instruction being revised to accommodate additional scope categorized as capital works. Delays by Clients to confirm Funds. Late approval and confirmation of funds by the Clients Number of infrastructure projects completed 116 98 Contractors being behind with completion due to cash flow (Cumulative) problems, capacity constrains of appointed service providers. Poor performance by the Contractors. Follow-on contracts to be approved by NT 27

Programme 3: Construction Project Management Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Sub-Programme: Construction Project Management Strategic Objective: To develop detailed construction plans that direct the execution of construction projects and ensure that construction programmes are implemented according to approved criteria Number of infrastructure projects within agreed construction period 92 (80%) 92 53 Contractors being behind with completion due to cash flow (Cumulative) problems, capacity constrains of appointed service providers. Poor performance by the Contractors. Follow-on contracts to be approved by NT Number of infrastructure projects completed within the approved budget 92 (80%) 92 87 Contractors being behind with completion due to cash flow (Cumulative) problems, capacity constrains of appointed service providers. Poor performance by the Contractors. Follow-on contracts to be approved by NT Number of EPWP work opportunities created through construction projects 8 200 2 000 1 054 Under reporting as a result of poor management of Project Managers and Contractors Percentage reduction of infrastructure projects backlogs 30% 10% Number of contractors incubated through the Contractor Incubation Programme (CIP) 297 0 Contractors being behind with completion due to cash flow problems, capacity constraints of appointed service providers. Poor performance by the Contractors. Delays in the conclusion of the Procurement Strategy through the bid committees and lockdown restrictions, as this was not advertised in March 2020 as planned. The programme is initially driven by PMO. 28

Programme 4: Real Estate Management Services Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Sub-Programme: Real Estate Management Strategic Objective: To provide functional leased accommodation for user departments Percentage of lease agreements signed within scheduled timeframes 100% 49% Lease agreements could not be signed within schedule timeframe due to the delays in the value chain, i. e. Landlord requiring ample time to consult their financial sponsors and legal advisors before they can sign the lease agreement. 29

Programme 4: Real Estate Management Services Performance Indicator Annual Target Quarter 4 Target Sub-Programme: Small Habours and Coastal Development Strategic Objective: To optimise the utilisation of State owned buildings Number of private leases reduced within the security cluster 13 13 Percentage increase in revenue generation through letting of stateowned properties (excluding harbour properties) Number of identified vacant surplus state-owned properties let out Percentage of revenue increased rentals of state owned small harbour and coastal properties Number of work opportunities created through the letting out of small harbour and state owned coastal properties 15% 70 20% 2 000 15% 35 20% 1 000 Quarter 4 Performance 0 0 35 20% 492 Comments on Performance Facilities not being made available/ handed over to Acquisition unit as ready for occupation to reduce the leasing portfolio. Budget to be made available to refurbish and rehabilitate state-owned facilities to be utilized by Client departments. Target not achieved because the 2019/2020 leases signed were for residential low rental leases Target Achieved The process of renewing the current leases has been delayed. No new letting out leases were signed due to the Department still defining the letting out process. 30

Programme 5: Real Estate Information & Registry Performance Indicator Annual Target Quarter 4 Performance Target Comments on Performance Sub-Programme: Real Estate Investment Management Strategic Objective: To maintain a compliant Immovable Asset Register (IAR) and provide guidance and support to other custodians in the compilation of compliant Immovable Asset Registers Percentage of approved disposals (in 90% 90% of approved disposals (in respect of Target Achieved respect of socio economic purposes) processed for transfer Percentage of immovable assets updated 100% on the IAR for completed infrastructure projects 100% Number of land parcels vested (confirmation of ownership) 900 225 Number of immovable assets physically verified to validate existence 24 636 6 158 100% of immovable assets updated on Target Achieved the IAR for completed projects (9 0 f 9 completed projects capitalised and added to IAR) 133 land parcels vested Vesting applications on various stages are in process on LAW residing at DRDLR, however regions should engage Provincial DRDLR Offices to identify blockages Regular monitoring and review of vesting applications 5 388 Immovable assets physically Mobile application had error issues/Contracts of staff verified to validate existence. terminated/Vehicle contracts terminated/Lockdown due to Covid-19/AFS priorities Contract issues sorted mid Feb/Car contract reinstated in March/Mobile Application needs upgrade. CT to assist Unit. Number of provincial immovable asset registers assessed for compliance Number of National and Provincial Number of National and Immovable Asset registers incorporated Provincial Immovable Asset into single repository (National database registers incorporated of state properties) 2 2 Provincial Immovable Asset Registers assessed for compliance (EC and KZN) 2 0 National and Provincial Immovable Business Case, Funding Model, Project Governance Structure Asset registers incorporated into single and Procurement To. R not yet finalised repository 31

Programme 6: Facilities Management Performance Indicator Annual Target Quarter 4 Performance Comments on Performance Sub-Programme: Facilities Management Strategic Objective: To manage maintenance programmes in accordance with an approved plan and ensure resource efficiency in State-owned buildings Number of facilities with maintenance contracts in place 550 150 Percentage of unscheduled maintenance incidents resolved within agreed timeframes 20% Reduction in energy consumption (kilowatt 155 000 kwh hours) in identified buildings 534 facilities with maintenance Due to a focus on preventative maintenance regions are contract in place encourage to enter into term contracts. 1. 12% of unscheduled Works 4 U – inadequacy of the system which reflects faulty maintenance incidents resolved controls from the design within agreed timeframes Migration from works 4 U to Archibus has commenced with 8 out of 11 regional offices 39 500 000 kwh 38 478 045. 9 k. Wh Target Achieved Percentage term contracts awarded to BBBEE companies 40% Number of kilowatt hours of renewable energy generated 20 000 kwh 9 900 000 kwh 0 Phase 1 of Renewable Energy Programme launching and implemented in Q 4 2020 5 500 000 kwl 4 336 805. 5 Kl Information still being process between DPW and Municipalities in terms of the billing cycle Reduction in water consumption (kilolitres) 15 000 kl in identified buildings 97% maintenance term contracts awarded to BBBEE companies Target over achieved 32

High Level Summary – DPW Q 4 DPW Performance % (Targets Achieved - Preliminary) 120. 0 100. 0 80. 0 66. 7 60. 0 33. 3 40. 0 20. 0 Management Finance and SCM Corporate Services Inter-governmental coordination Prog. 1 Prog. 2 Professional Services Expanded Public Works Programme Property and Construction Industry Policy and Research Prestige Policy Prog. 3 Prog. 4 Prog. 5 33

High Level Summary – PMTE Q 4 PMTE Performance % (Targets Achieved - Preliminary) 120 100 83 80 67 60 50 50 50 40 25 20 11 0 Finance and SCM Prog. 1 Planning and Precint Development Real Estate Investment Management Prog. 2 Constrution Project Management Prog. 3 Real Estate Management Small Habours and Real Estate and Costal Development Iinformation Registry Services Prog. 4 Prog. 5 Facilities Management Prog. 6 34

Overall Q 4 Comparison Q 4 % Performance (Targets Achieved) 100. 0 90. 0 80. 0 70. 0 60. 0 58. 8 50. 0 40. 0 Q 4 DPW Q 4 PMTE 35

Quarter on Quarter Performance (% Targets Achieved) 100 Excellent Performance 90 80 Good Performance (Average) 70 60 DPW, 55. 5 PMTE , 56. 3 PMTE , 50 DPW, 59 DPW, 53. 6 DPW, 58. 8 PMTE , 50. 0 PMTE , 46 50 40 30 Weak Performance 20 10 Poor Performance 0 Q 1 Q 2 Q 3 Q 4 36

Section C Top 5 Risks Q 4 Preliminary Information 37

DPW Risk (Cumulative achievement on implementation of action plans) No. Risk Title Cumulative achieved for Q 1 Cumulative for achieved Q 2 1. Inadequate service delivery leading to the erosion of the Department’s mandate. 25% 48% 2. Breach of key legislation prescripts, acts, regulations and policies (e. g. PFMA, GIAMA, etc. ). 21% 3. Lack of good governance to ensure accountability by public works sector including entities. 4. 5. Cumulative achieved for Q 3 Cumulative achieved for Q 4 Risk exposure to date 63% - High 18% 63% - High 25% 50% 60% - High Untransformed built environment disciplines, construction industry and property sector. 15% 32% 50% - Medium Credibility of EPWP eroded due to nonadherence to EPWP prescripts by participating and/or implementing public bodies. 25% 50% 83% - Medium 38

PMTE Risk (Cumulative achievement on implementation of action plans) No. Risk Title Cumulative achieved for Q 1 Cumulative achieved Q 2 1. Inadequate service delivery leading to the erosion of the Department's mandate. 23% 2. Inadequate maintenance safeguarding of State assets. and 3. for Cumulative achieved for Q 3 Cumulative achieved for Q 4 Risk exposure to date 46% 47% - High 16% 48% 56% - High Inadequate delivery of national Government priorities. 25% 48% 73% - High 4. Weakening financial viability and sustainability of PMTE. 15% 30% 56% - High 5. Inability to maintain a reliable and accurate immovable asset register (IAR). 19% 40% 52% - Medium 39

Section D Financial Performance Information Q 4 Cumulative Information 40

Summary Expenditure per Programme: 31 March 2020 Adjusted Allocation Exp. as at 31 March 2020 Variance as at 31 March 2020 % Spent as at 31 March 2020 Drawings as at 31 March 2020 Expenditure Versus Drawings variance R'000 % R'000 R’ 000 Programmes Prog 1. Administration Prog 2. Intergovernmental Coordination Prog 3. Expanded Public Works Programme Prog 4. Property and Construction Industry Policy and Research Prog 5. Prestige Policy 511 013 460 716 50 297 90. 2% 511 013 50 297 56 386 52 447 3 939 93. 0% 56 386 3 939 2 680 814 2 638 163 42 651 98. 4% 2 680 814 42 651 4 538 905 4 523 840 15 065 99. 7% 4 538 905 15 065 119 927 85 094 34 833 71. 0% 119 927 34 833 7 907 045 7 760 260 146 785 98. 1% 7 907 045 146 785 Total 41

Budget Allocation per Programme Chart - 2019/20 1% 0% 8% 55% 36% Administration Intergovernmental Coordination Expanded Public Works Programme Property and Construction Industry Policy and Research Prestige Policy 42

Summary Expenditure per Economic Classification Adjusted Allocation Exp. as at Variance as at 31 % Spent as at 31 March 2020 Drawings as at 31 March 2020 Expenditure Versus Drawings variance R'000 R’ 000 Economic classification R'000 % R'000 Compensation of employees 557 085 503 536 53 549 90. 4% 557 085 53 549 Goods and services 451 737 364 804 86 933 80. 8% 451 737 86 933 107 - 100% 107 - 6 874 725 6 874 183 542 100% 6 873 984 542 23 241 17 782 5 459 75% 23 241 5 759 150 - 100% 150 - 7 907 045 7 760 260 146 785 98. 1% 7 907 045 146 785 Interest Transfers and subsidies Machinery and equipment Payments for financial assets Total 43

Allocation per Economic Classification Chart – 2019/20 0% 7% 87% 6% 0% Compensation of employees Goods and services Interest Transfers and subsidies Machinery and equipment 44

Notes to Expenditure Summary per Economic Classification Total expenditure as at the end of March 2020 is R 5. 7 billion and equivalent to 98% of the total budget allocation of R 7. 9 billion. The variance between expenditure and the drawings amount to R 147 million. The variance (1. 9%) between drawings and expenditure is detailed below per economic classifications: • Compensation of employees’ expenditure as at the end of March 2020 is R 503 million, and the expenditure is equivalent to 90% of the budget allocation of R 557 million. Against the drawings of R 557 million, R 54 million remain under spent at the end of the financial year, and the variance is due to delay in filling of posts prioritised for filling because of the moratorium and those vacated in the current financial year. • Goods and Services’ expenditure amounts to R 365 million and is equivalent to 81% of the budget allocation o R 452 million. Against the drawings of R 452 million, the expenditure is equivalent to 78% (or R 87 million positive variance). The variance between drawings and actual expenditure relate to low spending in Programme 1 (communication, computer services and office accommodation items), 3 (outsourced services item) and 5 (state functions). • Transfers and subsidies expenditure for the financial year ended March 2020 is 100%, and all transfers including conditional grants were in full compliance to conditions of the transfers • Machinery and equipment expenditure as at the end of March 2020 is R 18 million, and the expenditure is equivalent to 75% of the budget allocation of R 23 million. Against the drawings of R 23 million the expenditure, R 5 million remain under spent and the under spending is linked delay in posts prioritised for filling including higher than projected spending for Prestige Management. 7

Earmarked Budget Allocation: 31 March 2020 Allocation Exp. as at 31 March 2020 % Spent as at 31 March 2020 R'000 % Construction Industry Development Board 76 160 100% Council for the Built Environment 52 796 Agrement South Africa 31 062 100% EPWP Integrated Grant for Provinces 437 388 100% EPWP Integrated Grant for Municipalities 730 046 100% EPWP: Non-state Sector 750 424 100% 44 486 100% 430 793 100% 4 315 736 100% 10 599 100% 5 000 100% Management Fee to the Non-state sector transfer budget EPWP Social Sector for Provinces Property Trading Entity Management Parliamentary Villages Management Board Independent Development Trust Total 6 884 490 100% 46

PMTE FINANCIAL PERFORMANCE 47

Revenue Budget And Receipts 2019/20 Final budget R'000 Actual receipts 2018/19 Variance R'000 % recovered R'000 % Final budget Actual receipts R'000 Variance % recovered R'000 % Accommodation charges – leasehold 5 039 642 3 986 164 1 053 478 79% 4 394 218 4 785 640 -391 422 109% Accommodation charges – state owned 7 566 959 7 330 966 235 993 97% 7 487 291 6 141 302 1 345 989 82% 58 320 49 100 9 220 84% 54 000 50 675 3 325 94% 4 315 736 0 100% 4 009 490 0 100% 9 592 0% 9 084 20 195 -11 111 222% 78% 1 159 777 4 484 162 3 700 594 783 568 83% 100% Accommodation charges freehold- private Augmentation Interest, fines, recoveries and other receipts Municipal Services recovered Municipal Services Management Fees 5 235 826 4 076 049 212 220 193 734 18 486 91% 184 633 185 030 -397 22 438 295 19 951 749 2 486 546 89% 20 951 373 19 221 421 1 729 952 Construction revenue Total 48 92%

Allocation per Economic Classification Chart – 2019/20 Municipal Services recovered, 23% Accommodation charges – leasehold, 22% Municipal Services Management Fees, 1% Augmentation, 19% Accomodation charges freehold- private, 0% Interest, fines, recoveries and other receipts, 0% Accommodation charges – state owned, 34% 49

Budget And Expenditure Per Economic Classification 2019/20 Final allocation % spent Final allocation Actual expenditure % spent 276 746 5 081 000 1 057 534 1 781 095 499 004 1 008 110 1 813 276 454 156 0 11 970 922 %% 91% 100% 79% 100% 88% 89% 0% 95% R'000 298 521 4 536 489 1 416 540 1 570 448 388 605 1 386 125 1 763 057 518 330 328 495 12 206 610 R'000 280 002 4 533 567 1 309 223 1 548 005 363 698 1 210 051 1 763 856 565 013 328 495 11 901 910 R'000 18 519 2 922 107 316 22 443 24 907 176 074 -799 -46 683 0 304 700 94% 100% 92% 99% 94% 87% 100% 109% 100% 98% 2 083 443 54 750 2 474 459 0 0 4 612 652 1 531 878 30 409 2 003 368 0 0 3 565 654 551 565 24 341 471 092 0 0 1 046 997 74% 56% 81% 0% 0% 77% 1 496 365 31 440 2 706 979 20 206 5 611 4 260 601 1 409 365 29 222 1 715 756 20 206 5 611 3 180 161 87 000 2 218 991 223 0 0 1 080 441 94% 0% 63% 100% 75% Total 17 202 469 15 536 577 1 665 892 90% 16 467 211 15 082 070 1 385 141 92% Municipal Services recovered Grand Total 5 235 826 22 438 296 4 076 049 19 612 626 1 159 777 2 825 669 78% 87% 4 367 572 20 834 783 4 300 639 19 382 709 66 933 1 452 074 98% 93% Capital payments Capital non-recoverable Machinery & Equipment Capital recoverable Intangibles Finance Leases Total capital payments R'000 Variance R'000 26 516 17 642 281 895 0 0 0 237 773 55 070 0 618 895 Current payments Cleaning and Gardening Leasing (Private owned) Repairs Day-to-day Maintenance Municipal Services non-recoverable Property Rates Compensation of Employees Admin Goods and Services Construction costs Total current payments R'000 303 263 5 098 642 1 339 429 1 781 095 499 004 1 008 110 2 051 049 509 226 0 12 589 817 Actual expenditure 2018/19 Variance 50

Allocation per Economic Classification Chart – 2019/20 Cleaning and Gardening, 1% Municipal Services recovered, 23% Leasing (Private owned), 23% Repairs, 6% Capital recoverable, 11% Day-to-day Maintenance, 8% Machinery & Equipment, 0% Municipal Services nonrecoverable, 2% Capital non-recoverable, 9% Admin Goods and Services, 2% Compensation of Employees, 9% Property Rates, 4% 51

Notes to Expenditure Summary per Economic Classification Current year budget and expenditure analysis Compensation of employees The under expenditure on compensation of employees is attributable to the delays in the filling of the vacancies which were budgeted for. Goods and services The under expenditure on goods and services is attributable to the funds which were budgeted to conduct an investigation of Properties/Land the updating and correcting of immovable asset register. These funds were not fully spend as at the end of the financial year. Another contributing factor was the underspending on the Repair budget. This budget is based on the cash flow projection relating to the planned projects rolled-out of an extensive project portfolio The underspending was due to the delay in the execution of some of the projects which was caused by poor performance of some of the contractors. Capital Infrastructure expenditure The reasons for the underspending was due to the delay in the execution of projects which was caused by poor performance of some of the contractors, delays in appointing new contractors as well as the delays of the extension of time on some of the projects. As most of the projects are recoverable, the PMTE has to request approval from the client departments before tenders are advertised, when recommended bids are higher than the estimate and every time there is an increase in the cost of the project. Delays in client responses is a major cause of under-expenditure. Machinery and Equipment The underspending on Machinery and Equipment is attributable to the funding which were budgeted for the roll out of additional VC facilities in regions to cut down on the cost of traveling. Tenders were advertised but could not be adjudicated before the end of the financial year. Also funding allocated for procurement of laptops has not been spent due to delays experienced in ICT with the SITA contract. 9

Allocation vs Expenditure per Programme 2019/20 Final allocation Actual expenditure R'000 2018/19 Variance % spent Final allocation Actual expenditure Variance % spent R'000 % Administration 934 223 778 041 156 182 83% 861 944 856 726 5 218 99% Real Estate Investment Services 206 705 183 195 23 510 89% 180 818 175 529 5 289 97% Construction Project Management 4 977 810 3 924 616 1 053 194 79% 4 936 049 3 920 153 1 015 897 79% Real Estate Management Services 6 802 946 6 743 696 59 250 99% 6 451 061 6 245 850 205 211 97% 106 580 62 995 43 585 59% 56 032 54 469 1 563 97% 4 174 205 3 844 034 330 171 92% 3 981 307 3 829 343 151 963 96% 17 202 469 15 536 577 1 665 892 90% 16 467 211 15 082 070 1 385 141 92% Real Estate Information & Registry Services Facilities Management Services Total* * Excluding Recoverable Municipal Service 53

Budget Allocation per Programme Chart - 2019/20 Administration, 5% Real Estate Investment Services, 1% Facilities Management Services, 24% Construction Project Management, 29% Real Estate Information & Registry Services, 1% Real Estate Management Services, 40% 54

Section E Recommendation 55

Recommendations It is recommended that the Portfolio Committee on Public Woks and Infrastructure: • Notes the 2019/20 Fourth Quarter Financial (Cumulative) and Non Financial Performance Information • Advise on areas where the Department can improve 56

Thank You Department of Public Works and Infrastructure (DPW&I) Head Office: Public Works CGO Building 256 Madiba Street Pretoria Central Private Bag X 65 Pretoria 0001 Website: http: //www. publicworks. gov. za 57