DA calls on National Treasury to place Public Works under administration

The Department of Public Works 2012/13 Annual Report confirms that the Department is completely dysfunctional and unable to account for its multi-billion rand budget. 

Auditor-General (A-G) Terence Nombembe has issued a Disclaimer of Opinion - the worst possible audit outcome - for the Department's Property Management Trading Entity (PMTE) for the third year in a row. 

A Disclaimer of Opinion is issued when the A-G cannot conduct a proper audit because the financial records are either non-existent or in complete disarray. 

This means that, for three years running, Public Works has rendered its main function -the management of government owned property - un-auditable.

The dysfunction of the Department of Public Works and its PMTE affects the service delivery of all government departments and organs of the state that rely on the Department to manage their property needs. 

An example of this is the recent case in Newcastle where SAPS was evicted from its offices because the Department of Public Works had not paid the rent for the building. 

The Department itself also received a qualified audit opinion from the A-G for, amongst others, a lack of evidence for reported irregular expenditure amounting to over R32 million.

What a disgraceful condemnation for any government department.

The DA will write to the Minister of Finance, Pravin Gordhan, requesting that National Treasury intervene by placing Public Works' PMTE under administration in terms of the provisions of section 6 of the Public Finance Management Act (PFMA), read with section 216 of the Constitution.

In his report the A-G stated that Public Works - in relation to the PMTE, could not provide sufficient appropriate evidence for him to determine, amongst others:

• whether the more than R2.6 billion in irregular expenditure reported by the PMTE was valid, accurate or complete;
• whether the more than R254 million in fruitless and wasteful reported by the PMTE was valid, accurate or complete;
• whether the PMTE had properly charged and accounted for revenue for accommodation charges for leases held; and
• whether the PMTE had properly accounted for any of its operating leases.

The A-G also noted that a number of ongoing investigations were being conducted by the Department to establish whether there was collusion between officials and service providers and to determine any reckless spending of funds. The majority of these investigations have not been finalised.

With regards to the ongoing ‘Nkandlagate' scandal, the A-G noted that the Public Protector's report into the alleged misappropriation of funds has not been completed, and that he did not conduct an additional investigation.

It is clear that Minister Thulas Nxesi has failed to rehabilitate the ailing PMTE. The time has therefore come for National Treasury to place the Department of Public Works' PMTE under administration. 

The Department of Public Works is supposed to assist other departments to focus on their core functions of delivering essential services while it manages their accommodation needs. 

Instead, Public Works is proving to be a hindrance to service delivery across the board.

This cannot be allowed to continue. 

The evidence is clear - we trust Minister Gordhan will agree to our request.

Statement issued by Anchen Dreyer MP, DA Shadow Minister of Public Works, October 2 2013

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