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Outline

DEPARTMENT OF PUBLIC WORKS P RESENTATION OF 2009/10 ANNUAL REPORT TO THE PUBLIC WORKS PORTFOLIO COMMITTEE 19 OCTOBER 2010. Outline. Minister’s Overview Presentation per Programme/ Sub-Programme Financial Performance and Audit Reports for the year ended 31 March 2010. 1. 1. 1.

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Outline

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  1. DEPARTMENT OF PUBLIC WORKSPRESENTATION OF 2009/10 ANNUAL REPORT TO THE PUBLIC WORKS PORTFOLIO COMMITTEE 19 OCTOBER 2010

  2. Outline • Minister’s Overview • Presentation per Programme/ Sub-Programme • Financial Performance and Audit Reports for the year ended 31 March 2010 1 1 1

  3. MINISTER’S OVERVIEW Planning for the fiscal year 2009/10 was guided by the following government policy priorities: • Poverty alleviation and addressing unemployment • Building the state’s capacity to implement programmes and policies of government • Investment in productive infrastructure • Implementation of projects of government-priority pojects 2

  4. MINISTER’S OVERVIEW Critical attention was paid to the following flagship programmes: • Up-scaling of Expanded Public Works Programme • Enhancement of the Immovable Asset Register • Energy Efficiency • Implementation of the Government Immovable Asset Management Act (GIAMA) • Dolomite management • Land Ports of Entry 3

  5. MINISTER’S OVERVIEW Public Entities have implemented the following programmes: • IDT:Construction of infrastructure on behalf of government • CIDB: National Contractor Development Programme and establishment of Contractor Contact Centres in all provinces • CBE: Assessment of the skills pipeline in the built environment • Agrément South Africa: Issuing of fit-for-purpose certificates for non-standardised products and increasing participation in the Innovation Hub – with a view to market alternative building materials for human settlements 4

  6. Some challenges faced The following challenges were faced, but progress was made in each: • Adjudication of tenders to prevent fraud and corruption • Internal controls • Risk management capability • EPWP web-based reporting Lease management and fast tracking the vesting process remain challenges 5

  7. Programmes/Sub-programmes 6

  8. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME Programme 1: Finance & SCM 8 887 7 8 7

  9. Programme 1: Finance & SCM ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME 8

  10. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME (cont….) Programme 1: Internal Audit & Investigation Services 9

  11. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME Programme 1: Monitoring & Evaluation 10

  12. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME Programme 1: Corporate Services 11

  13. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME Programme 2:Asset Investment Management 12

  14. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME Programme 2: Asset Investment Management 13

  15. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMMEin line with the ENE Programme 2: Asset Investment Management 14

  16. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME Programme 2: Regional Operations 15

  17. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME • Programme 2: Inner City Regeneration 16

  18. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME • Programme 2: Inner City Regeneration 17

  19. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMMEin line with the ENE Programme 3: Expanded Public Works Programme 18

  20. ACHIEVEMENTS PER PROGRAMME/ SUB-PROGRAMME Programme 3: Construction and Property Policy Regulation 19

  21. Financial Performance and Audit Reports for the year ended 31 March 2010 20

  22. Financial Performance and Audit Reports for the year ended 31 March 2010 21

  23. Total Dept- Financial Performance 2009/10 22

  24. DPW - Financial Performance 2009/10 23

  25. DPW - Fruitless and Irregular Expenditure An amount of R30,8 million was reported as Irregular Expenditure for the 2009/10 financial year. This amount included R5 mil from prior years. Details: • Proper procurement processes not followed – R15,683 mil • Tax clearance certificate not attached – R11,719 mil 24

  26. PMTE – Financial Performance • The department has managed for the first time to report the PMTE financial statements in line with Generally Accepted Accounting Principles as directed by the PFMA. • The transition from modified cash basis to GAAP came with some challenges relating to compliance with the International Accounting Standards on receivables and payables. • Bank overdraft at year end was R1,67 billion (2008/09:R 1,5 billion) 25

  27. PMTE - Fruitless and Irregular Expenditure • Fruitless expenditure: R 392 000 • An amount of R392 000 was reported as fruitless expenditure. This amount relates to cases in Joburg where clients vacated the buildings before the end of the lease contracts. • Irregular Expenditure: R 264 million • No proper authorizing – R 4,2 million • No tax clearance certificate – R82 million • No supporting documents – R 109 million • Procurement process not followed – R 69 million 26

  28. Audit Report - 2009/10DPW 27

  29. DPW - Audit Qualification Basis for qualification: • Immovable Asset Register • Irregular Expenditure Emphasis of Matter: • Fruitless and wasteful expenditure to the amount of R389,000 was incurred 28

  30. Progress to date – Immovable Assets • Information from Asset Register was extracted and prioritised according to blank and incomplete fields. • Process of analyzing authenticity of information is ongoing • Progress monitored monthly to ensure population of identified blank and incomplete fields on the Asset Register • Number of properties extracted = 33972, • Properties investigated = 18029 (54%) and properties updated on AR after investigation = 8083 (24%) • Task Team formed to facilitate the vesting process (OAG, DRDRL, NT & DPW) and GIAMA TECHNICAL COMMITEE) -sitting Quarterly • Inter-Ministerial Committee is also active in providing leadership and support towards addressing challenges around immovable assets (Ministers of Finance, Public Works and Rural Dev. and Land Reform). • Asset Register Guideline completed. To be discussed with OAG before end October 2010 29

  31. Progress to date – Irregular Expenditure • Setting up of a compliance unit: • The unit is in the process of being established. We are currently evaluating the posts for finalization of the structure. Target date – Dec 2010. • Develop new policies and improve internal controls: • Policy on irregular expenditure has been developed and it is currently being circulated to regions for comments. It will be submitted for approval to the Accounting Officer by 31 Oct. • Check lists have been improved. New checklists have also been developed for the Bid Adjudication Committee at Head Office. The checklist are currently being rolled out to the regions. • Measures have been put in place to validated VAT registration for all invoices • Capacity has been increased through the use of contractors while we are trying to prioritize funds for getting permanent staff. • All regions have been allowed to work overtime in order to conduct a compliance check all documents retrospective from April 2010. • As a compensating control, the head office officials will be visiting all regions to conduct a random check of compliance with SCM policies 30

  32. Audit ReportProperty Management Trading Entity (PMTE) 31

  33. PMTE - Audit Qualification Basis for qualified opinion: • Revenue and receivables • Related parties • Expenditure and payables • Irregular Expenditure Emphasis of matter: Restatement of corresponding figures 32

  34. Progress to date – Revenue & Receivables Management • We are currently continuing to resolve reconciling differences identified during the previous year’s reconciliation process and engaging client department to pay. • Almost 90% of the reconciliations have been completed. • Significant progress has already been made with the current revenue and debtors management as evidenced by the 98% collections at year end. • We are in the process of increasing capacity to ensure sustainability of the work done by consultants as well as to improve technical skills relevant for the PMTE. 33

  35. Progress to date - Related Parties • The following are the related parties of PMTE: • National Department of Public • Other National Departments and Public Entities reporting to the National Departments because they are subject to common control .National Departments operate together to achieve a common objectives determined by Cabinet /Provincial Legislature • Specifications for the acquisition of a new financial system have already been submitted for approval. • IT is currently looking at possible systems that can be compatible to the current operations systems called iEWorks. • We are targeting the end of Dec for acquisition of the system. 34

  36. THANK YOU! 35

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