Induction by AGSA on mandate and current state of governance in DPWI

Video In a virtual meeting, the Portfolio Committee on Public Works and Infrastructure received a briefing from the Auditor-General of South Africa (AGSA) on their mandate and on the audit outcomes for the Department of Public Works and Infrastructure (DPWI) and its entities. The Committee heard that there had been overall improvement in audit outcomes. Most entities achieved over 50 percent of their targets, except for the DPWI itself and the Property Management Trading Entity (PMTE). The DPWI spent 86 percent of the budget for its key service delivery programme, but met only 20 percent of the planned targets. Delays in infrastructure projects affected service delivery and could lead to requests for additional funds, further straining the fiscus. The presentation emphasised that the public works portfolio consistently failed to deliver projects that met quality standards, adhered to timelines, and stayed within budget. In the 2022/23 financial period, there were 107 projects, with a total capital expenditure of R3.9 billion, which were significantly delayed. The delays were primarily attributed to the underperformance of contractors. Of the 107 delayed projects, 63 were behind schedule by more than three years. There were ongoing concerns about inadequate financial planning, unfair or uncompetitive procurement processes, a lack of project management, and ineffective consequence management. The audits identified 11 material irregularities related to non-compliance and suspected fraud. The material financial loss was estimated at R746 million. Members raised a number of issues. These ranged from the systemic financial irregularities reported, delayed projects, project management capacity at the PMTE, a lack of effective monitoring and accountability, as well as a disconnect between performance and spending.