Annual Performance of the DPWI for the 2022/23 Financial Year

Briefing the Portfolio Committee on Public Works and Infrastructure, the report covers the Department of Public Works and Infrastructure's mandate, financial performance, strategic overview emphasizing integrity and professionalism, and structure of its programs and entities (Main Vote and PMTE). It highlights the Department's role in asset management, infrastructure delivery, and sustainable development, aiming to provide quality services while ensuring safety, environmental protection, and community well-being.

• DPWI
• Annual Report
• Infrastructure
• Asset Management
• Public Works

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1. Annual Performance of the DPWI for the 2022/23 Financial Year Report Portfolio Committee on Public Works and Infrastructure Parliament of South Africa 10th October 2023 Office of the Director-General

2. Purpose and Contents To brief the Portfolio Committee on Public Works and Infrastructure on the 2022/23 Annual Report for the Department of Public Works and Infrastructure 1 Mandate of the Department 2 Highlights and Performance Information 3 DPWI: Financial Performance 4 PMTE: Financial Performance PMTE: Debtors Information 5 2

3. DPWI Strategic Overview A trusted choice for innovative asset management and quality Infrastructure delivery for sustained economic growth. To provide strategic direction and quality services that offer innovative asset management and pro- active socio-economic Infrastructure delivery and maintenance of public assets while protecting the environment and the cultural and historic heritage, safety in the working environment and safer communities towards sustainable development. INTEGRITY PROFESSIONALISM BY DEMONSTRATING A HIGH DEGREE OF SKILL, COMPETENCY AND CHARACTER. RESPONSIVENESS BY ANTICIPATING THE NEEDS OF THE CLIENTS AND THE CITIZENS WE SERVE. DEPENDABILITY BY BEING TRUSTWORTHY AND RELIABLE IN THE SERVICES WE PROVIDE. EFFICIENCY BY CONSISTENTLY HONOURING OUR COMMITMENTS, UPHOLDING ETHICAL, HONEST BEHAVIOUR AND TRANSPARENT COMMUNICATION. BY STRIVING TOWARDS SIMPLIFIED WAYS OF DOING THINGS AND OPTIMIZE CLIENT S MANDATE THUS CREATING MORE VALUE 3

4. Structure of the Departments Programmes The Department is split into two entities The Main vote and the Property Management trading Entity (PMTE) Main Vote PMTE Shared Services (Administration) Corporate Services Governance, Risk and Compliance Finance and Supply Chain Management Real Estate and Investment Services Construction Project Management Real Estate Management Real Estate Information and Registry Facilities Management Inter-Governmental Coordination EPWP Property and Construction Industry Policy Infrastructure South Africa Prestige Management 4

5. Section 1 Mandate of the Department 5

6. Mandate of the Department Main Vote 1 A shared competency between the National and Provincial Governments on immovable asset register, construction and property management, the implementation of Government Immovable Asset Management Act (2007) COORDINATION 2 Build capacity for the state, coordinate and manage the supply of built environment skills to support the state infrastructure delivery. SKILLS PIPELINE 3 COORDINATION, POLICY AND WORK OPPORTUNITIES Regulation and Policy that promote the growth and transformation of the construction and property industries, standardisation and promotion of best practice in construction and immovable asset management in the public sector. POLICY Coordinate the implementation of the expanded public works programme (EPWP) which aims to create work opportunities, income support to poor & unemployed people through labour-intensive methods in the delivery of public and community assets and services WORK OPPORTUNITIES 4 Manage the delivery of services to prestige clients such as the Presidency, Ministerial Accommodation, Members of Parliament, provision of support to State Events such as State visits and State funerals. PRESTIGEOUS PORTFOLIO 5 6

7. Mandate of the Department - PMTE 1 PRECINCT DEVELOPMENT Plan and develop integrated government precincts in urban and rural areas for improved government accommodation and enhanced service delivery. 2 Plan for project delivery through project implementation planning, procurement of professionals, design development and appointment of contractors and project manage the delivery of construction projects CONSTRUCTION 3 CONSTRUCTION, ASSET MANAGEMENT AND FACILITIES MANAGEMENT Provide and manage suitable office accommodation to government departments in order for them to meet their service delivery objectives. Types of office accommodation may be in the form of either freehold properties or leasehold accommodation. ESTATE MANAGEMENT Maintain an accurate and reliable Immovable Asset Register (IAR) and surveying of State Domestic Facilities (SDFs), vesting of land parcels and endorsement of title deeds in collaboration with other National and Provincial custodians 4 ASSET REGISTER Ensure that buildings/properties used by government departments and the public are optimally utilised and maintained in a safe, secure healthy and ergonomic environment while contributing to job creation, skills development and poverty alleviation FACILITIES MANAGEMENT 5 7

8. Section 2 Highlights and Performance Information 8

9. Highlights 2022/23 Financial Year (Audited) R3.05 billion was spent on contractors and consultants for infrastructure projects. About 95 infrastructure projects were completed and 65 sites were handed over to contractors. A total of 120 997.71 hectares(110 landparcels) were processed for release in support of land reform programme. R433 million transferred to eligible Provincial Departments - R418.1 million (97%) was spent Managed a property portfolio of 28 683 registered and unregistered land parcels on which 77 537 improvements (buildings and structures) are located across 52 client departments countrywide R2.7 billion was spent on maintenance 88 SIPs have been gazetted covering foundational infrastructure networks in energy, water & sanitation, transport as well as digital communications infrastructure. The SIPs also cover human settlements, agriculture, and agro-processing. Unqualified Audit opinion on the Asset register 9

10. Highlights 2022/23 Financial Year (Audited) A total of 506 cases of allegation of fraud, corruption and serious maladministration investigated since 2009. 16 cases investigated for the 22/23 FY 11% Vacancy rate (DPSA baseline is 10%). This is improvement from the previous financial years Over R3 billion was spent on Construction Project Management (about 86% of its budget allocation for the FY) 1 100 beneficiaries participated in the DPWI skills pipeline, 18 Candidates obtained Professional Registration within the built environment and 22 of Artisan Trainees obtained trade certificates in various construction fields To date from the inception of EPWP Phase 4,, a total of 4 120 307 work opportunities against the 5 million phase 4 work opportunities target have been achieved translating to 82% achievement Spent 97% (R7.9 billion of R8.1 billion) on the budget on operations of the Department 10

11. Performance Level This performance is based on the number of targets achieved above 90% per programme. 2022/23 FY Annual Targets Acheved (%) 120 100 100 100 100 100 100 80 67 67 58 50 60 44 33 40 20 20 0 Prog 1 Prog 2 IGC Prog 3 EPWP Prog 4 Policy Prog 5 Prestige Prog 6 Finance (PMTE) Prog 7 REIS Prog 8 CPM Prog 9 REMS Prog 10 REIRS Prog 11 FM Annual Administration Main Vote PMTE Programme Prog 1 Administration Prog 2 IGC Prog 3 EPWP Prog 4 Policy Prog 5 Prestige Overall KPI % (Ave) Programme Prog 6 Finance (PMTE) Prog 7 REIS Prog 8 CPM Prog 9 REMS Prog 10 REIRS Prog 11 FM Overall KPI % (Ave) 79% 100% 100% 80% 67% 85% 95% 100% 75% 231% 95% 57% 108% 92% Expenditure 97% Expenditure 11

12. Performance Information (Main Vote) Programme Prg 1: Administration KPIs Compliance rate Challenges Experienced in the Period under Review Areas such as disciplinary cases take longer owing to a number of postponements, changes in representatives and unforeseen circumstances While the Department strives to reach the target of 2%, the unavailability of suitable applicants with disabilities in specific areas is still a challenge. The 3 business solutions are progressing well and nearing the final stages: E-Leave System in progress working with HR Fleet Management System in progress working SCM S&T Project in progress with SCM now conducting user acceptance testing/ end-user testing after which it will go live Business solutions for digitization have been affected by the delay in approving the procurement strategy. This also delays the recommendations to the procurement committees to conclude the process Designated groups in SMS level in the Department - PWD 2% Percentage business process automation Number of business solutions for digitization 12

13. Performance Information (Main Vote) Programme Prg 3: EPWP KPIs Number of reports produced that reflect work opportunities reported by the public bodies on the EPWP-RS Challenges Experienced in the Period under Review Non-reporting by Public bodies affecting the WO reported DPWI will continue to provide Technical support to public bodies to increase labour-intensity of projects, leading to an increase in the creation of work opportunities. Engage public bodies to use their own funding through other conditional grants or equitable share to mitigate budget cuts. 13

14. Performance Information (Main Vote) Programme Prg 4: Property and Construction Industry Policy and Research KPIs Public Works Bill (1 draft Public Works Bill Gazetted) Challenges Experienced in the Period under Review In the process of drafting the bill, clarity was sought and provided by the Office of Chief State Law Advisers (OCSLA) on the trajectory of the Draft Bill. This is being processed after which the draft will be ready for gazetting Infrastructure Development Act (IDA) amendments submitted to Cabinet Infrastructure Development Amendment Bill was not introduced to Parliament owing to extensive consultations with National Treasury on institutional arrangement regarding public infrastructure investment management ecosystem 14

15. Performance Information (EPWP WO) Performance against work opportunity targets by sector Sector Number of public bodies Annual work opportunity target Work opportunities reported Percentage achieved of annual target Environment and Culture Sector Infrastructure Sector Non-State Sector Community Work Programme Non-State Sector Non Profit Organisations Social Sector Total 269 294 193 260 348 819 252 818 52 198 176 474 1 023 569 206 501 246 911 214 999 117 278 204 997 990 686 106,9% 70,8% 85,0% 224,7% 116,2% 96,8% 1 1 251 352 Performance against work opportunity targets by sphere Sphere Number of public bodies Annual work opportunity target Work opportunities reported Percentage achieved of annual target Municipal Provincial National Total 256 89 256 429 339 185 427 955 1 023 569 246 088 345 243 399 355 990 686 96,0% 101,8% 93,3% 96,8% 7 15 352

16. Performance Information (EPWP WO) Performance against municipal and provincial sphere work opportunity targets by province Province Number of public bodies Annual work opportunity target Work opportunities reported Percentage achieved of annual target Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape Total 50 32 22 66 36 30 39 31 39 97 764 36 003 97 737 131 831 58 852 45 056 21 263 40 452 66 654 595 613 107 439 20 991 80 528 153 650 56 583 35 027 17 980 33 993 85 140 591 331 109,9% 58,3% 82,4% 116,6% 96,1% 77,7% 84,6% 84,0% 127,7% 99,3% 345 16

17. Performance Information (PMTE) Programme Prg 3: Construction Project Management KPIs Number of projects completed within agreed construction period Challenges Experienced in the Period under Review The underperformance with regards to completed infrastructure projects was affected by: 1. Late approval of funding by the client departments after awarding of projects, contributing to the delays in handing over sites for construction. Extensions requested by contractor and lack of access to certain courts and offices by the client. Extension of time due to sourcing of the replacement contract, inclement weather, inability of the client availing the working space for the contractor etc. Cancellation of bids due to bidders being unresponsive Contractors not performing at Taung both projects and consultant also not performing (Brits SAPS). Slow progress by contractors due to financial difficulties 2. 3. 4. 5. 6. 17

18. Performance Information (PMTE) Programme KPIs Challenges Experienced in the Period under Review Initial guidelines developed were inadequate and had to be revised to suit the changing environment Guidelines to being implemented Prg 4: Real Estate Management Services Number of unutilized vacant state owned properties let out Insufficient requests and information received from DALRRD resulted in delays in quantifying the hectares to released Ha released from the DPWI portfolio for development of infrastructure programs and socio-economic objectives. 18

19. Performance Information (PMTE) Programme Prg 5: Real Estate Information Registry Services KPIs Number of land parcels vested (confirmation of ownership) Challenges Experienced in the Period under Review Owing to the previous disclaimer on the Asset register, efforts were geared towards addressing the audit issues and improve the audit outcome for the period under review. Parallel to this exercise, the Department also ran the process of upgrading the physical verification tool as a result the migration of data from the old system to the new system took some time Delays experienced delays in the roll-out of the Multidisciplinary Technical Team Panel which affected the critical components to be assessed as per the target. Prg 6: Facilities Management Number of conditions assessments conducted on identified/prioritized properties Number of critical components assessed to determine conditions of components(lifts and boilers) 19

20. Interventions to Address Underperformance Continued with the 10 Principles to improve performance Change Management Programme (appointed champions) Service Delivery Improvement Programme (SDS and SLAs completed) Business Process Management Programme (Iin progress) ERP Fast Track Programme (in progress some modules at testing stages) Macro Business and Delivery Model of the DPWI (in progress as part of the development of AOPs and business process management) Ethics & Compliance, Infrastructure and Consequence Management Unit (Position of an Ethics officer already advertised and Ethics committee being reconstituted) Contract Management and Monitoring Capacity (Completed consultations on the document) Organisation Wide Skills Assessment (Completed) Organisation-Wide Maturity In Strategic Management (in progress and the Impact matrix will serve as a base to test maturity) Clean Audit (Improvement realised in the period under review) Repositioning of DPWI This repositioning strategy seeks to develop a guiding framework to reposition the Department of Public Works and Infrastructure (DPWI) to play its envisaged role as a driver of infrastructure development and custodian of the biggest property portfolio in South Africa. This strategy further denotes that the South African government has taken the position of driving the Economic Reconstruction and Recovery Plan (ERRP) through infrastructure development and investments. The Department of Public Works and Infrastructure is placed at the forefront of driving this national imperative 20

21. Section 3 DPWI: Financial Performance 21

22. Progress on Audit Outcomes PMTE Main Vote DPWI Audit Progress Outcome 2021/22 Unqualified 2022/23 Unqualified 2020/21 Unqualified Emphasis Matters: 1. Impairment of receivables Emphasis Matters: 1. Impairment of receivables 2. Fruitless and wasteful expenditure under assessment Emphasis Matters: Restatement of corresponding figures 22

23. Cont. Spending Per Economic Classification 2022/23 Actual 2021/22 Final Final Variance Expenditure as % of final appropriation Actual Appropriation Expenditure Appropriation expenditure R'000 R'000 R'000 % R'000 R'000 Current payments Compensation of employees 1 076 288 596 930 942 713 514 155 133 575 82 775 87.6% 86.1% 578 887 392 955 497 360 279 591 Goods and services Interest 479 358 428 558 50 800 89.4% - - - - - - Transfers and subsidies Provinces and municipalities Departmental agencies and accounts Foreign governments and international organisations 7 364 911 7 299 156 7 055 745 6 955 732 100 013 98.6% 1 636 351 4 087 700 28 432 1 636 342 4 087 700 28 432 9 - - 100% 100% 100% 1 595 629 4 526 375 28 265 1 594 154 4 526 375 28 265 Public corporations and private enterprises 260 675 160 675 100 000 61.6% 180 972 180 972 Non-profit institutions Households 1 032 693 9 894 1 032 693 9 890 - 4 100% 100% 1 020 414 13 256 956 134 13 256 Payments for capital assets Machinery and equipment Software and other intangible assets 19 095 10 121 8 974 53.0% 17 322 5 953 19 095 10 121 8 974 53.0% 17 322 5 953 - - Payments for financial assets Total 1 601 - 1 601 100.0% 97.0% 135 135 23 8 152 729 7 910 167 242 562 8 354 210 8 082 195

24. Explanatory Notes To Expenditure Variance Total expenditure for the year-ended March 2023 is R7.910 billion, which is 97% of the total adjusted budget allocation of R8.153 billion. The variance between expenditure and the drawings amounts to R243 million and is discussed below under each economic classifications: Compensation of employees total expenditure as at the end of March 2023 is R514 million, and the expenditure is equivalent to 86% of the adjusted budget allocation of R597 million, the unspent balance is R83 million. The variance between actuals and drawings is attributed to the delay in filling of critical positions during the financial year. Goods and Services total expenditure as at the end of March 2023 amounts to R429 million and the expenditure is equivalent to 89% of the adjusted budget allocation of R479 million. The balance of R50 million remained unspent at the end of the financial year. The underspending is mainly due to delays in receipt of invoices from services providers, implementation of the cost containment measures as well lower than projected expenditure in certain items. Transfers and Subsidies expenditure amounts to R6.955 billion and the expenditure is equivalent to 99% of the adjusted budget allocation of R7.056 billion.The underspent budget of R100 million was allocated after the adjustments estimates process and the funding was allocated with conditions before funds can be transferred for the programme to be implemented. The delays in fulfilling the conditions due to the external factors resulted in funds not being transferred. The funding was allocated for the implementation for the project preparation implemented by Infrastructure South Africa Machinery and Equipment expenditure for the end of March 2023 is R10 million, and the expenditure is equivalent to 53% of the adjusted budget allocation of R19 million. The unspent budget is R9 million and the underspending is due to delay in acquisition of assets ordered but not delivered at year end. 24

25. FINANCIAL STATEMENTS - STATEMENT OF FINANCIAL PERFORMANCE Note 2022/23 R 000 2021/22 R 000 Year on Year comparative - Increase /(decrease) R 000 Revenue 8 186 044 8 369 678 (183 634) 8 152 729 Annual appropriation 1 8 354 210 (201 481) 33 315 Departmental revenue 2 15 468 17 847 Expenditure 7 910 167 514 155 8 082 195 ( 172 028) Compensation of employees 3 497 360 16 795 428 558 Goods and services 4 279 591 148 967 Transfers and subsidies 7 6 955 732 7 299 156 (343 424) Tangible capital assets 8 10 121 5 953 4 168 Payments for financial assets 6 1 601 135 1 466 Surplus for the year 275 877 287 483 (11 606) 25

26. Explanatory Notes To Expenditure Variance Annual appropriation Year on year budget decrease with reduced funding on transfers and subsidies Departmental revenue Interest revenue of R17 million from transfer payment for the Non-state Sector Programme Goods and services Significant increases on Travel & subsistence post COVID, Increase in non state sector and fees charges by IDT and Technical Assistance Programme of ISA. Transfers and subsidies Decrease in budget for the 2022/23 mainly on the transfer payments for PMTE budget adjustment (R343m) to the Department of Transport to support the small bridges programme Surplus for the year Under spending of compensation of employees and goods and services 26

27. STATEMENT OF FINANCIAL POSITION Note 2022/23 R 000 2021/22 R 000 Year-on-Year comparative - Increase /(decrease) R 000 (184 978) 566 268 381 290 Assets 500 420 255 079 216 440 300 361 (200 059) Current Assets 255 079 - Unauthorised expenditure 9 Cash and cash equivalents 255 253 10 38 813 11 Prepayments and advances 2 280 3 616 (798) 12 Receivables 42 828 19 195 (23 633) Non-current assets 65 848 80 929 80 929 15 081 12 65 848 15 081 Receivables 633 282 562 086 71 196 Liabilities 236 472 272 015 (35 543) Voted funds to be surrendered to the Revenue Fund 13 14 Departmental revenue to be surrendered to the Revenue Fund 23 521 11 728 11 793 15 Bank overdraft - 44 475 44 745 16 Payables 373 289 3 087 233 868 4 182 139 421 (1 095) Net assets 27

28. EXPLANATORY NOTES FINANCIAL POSITION Prepayments and advances The decrease is mainly due to the Department expensing the majority of the Advances paid out in respect of EPWP programmes. Receivables Mainly an increase in claims recoverable i.r.o. PMTE. Cash and cash equivalents Money received during the Financial Year for Bailey bridges and not spent by year-end. Bank overdraft No bank overdraft due to underspending of the vote as well as funds received for Bailey bridges. Payables The increase is mainly due to funds paid over to the Department for Bailey bridges. 28

29. Disclosure notes 2022/23 2021/22 Comments R 000 82 305 R 000 18 420The increase is due to DOD balance confirmation letter/statement amounting to R71m 244Increase in commitments for Vehicles as well as laptops 21 090 Municipal services accrual. 956 ILO R5m and training R1m 54 299 Decrease in number of leave days not taken 3 036A new lease contract for Photocopy machines which started during the second half of the financial year Contingent liabilities 4 494 Commitments 23 464 Accruals 9 177 Payables not recognised 49 394 Employee benefits 5 966 Finance leases 29

30. UNAUTHORISED EXPENDITURE 2021/22 R 000 66 178 8 569 178 087 2 245 Prior years R 000 Overspending on compensation of employees Overspending on goods and services Unauthorised expenditure as a result of capital expenditure on schools Overspending on transfer and subsidies 66 178 8 569 178 087 2 245 Closing balance 255 079 255 079 No unauthorised expenditure incurred in the current financial year. 30

31. IRREGULAR EXPENDITURE 2022/23 2021/22 Note to Annual Report R 000 R 000 Opening Balance 116 787 196 124 - (83 120) Prior period error Add: Irregular expenditure confirmed 3 939 3 784 120 726 116 787 Closing balance - An application for condonation amounting to R188 million was submitted to National Treasury on 02 August 2022. National Treasury responded with several letters and the matters are with the Accounting Officer as the delegated authority in line with the Compliance Framework for a decision. One of the responses from NT indicated that transactions amounting R83 million did not meet the definition of irregular expenditure and were classified as Prior Period Error.. New irregular expenditure reported in the 2022/23 financial year amounting to R3,9 million relate to salary payments made to officials whose appointments were found to be irregular by the PSC investigation. This matter is currently before the Labour Court. Transactions amounting to R46 million included in the balance of R120.7 million have been referred to Labour Relations to implement consequence management. - - 31

32. FRUITLESS AND WASTEFUL EXPENDITURE 2022/23 2021/2022 Note to Annual Report: R 000 55 514 R 000 55 514 Opening balance Prior period errors Add: Fruitless and wasteful expenditure confirmed Less: Fruitless and wasteful expenditure written off - - - - - (118) Less: Fruitless and wasteful expenditure recoverable - - Closing balance 55 396 55 514 - - The opening balance was restated with an amount of R54.5 million for the beautification of schools projects for the Department of Basic Education. The amount of R118 thousand was written off in accordance with NT s Framework and by the delegated authority. Officials were subject to consequence management where necessary. There were no new transactions identified in the 2022/2023 financial year. - 32

33. Section 4 PMTE: Financial Performance 33

34. Progress on Audit Outcomes PMTE Main Vote Audit outcomes for PMTE 2022/23 Qualified 2021/22 Disclaimer 2020/21: Qualified Disclaimer Matters: 1. PPE 2. Payables from exchange transactions. understated 3. Payable from exchange accrued expenses municipal services overstated 4. Lease Accruals and expense Qualification Matters 1. Payables: Accruals, Leases, Opex projects, trade payables 2. Lease straight line 3. Accommodation charges Freehold intergovernmental 4. Commitments Qualification matters 1. Lease Asset and Lease Accruals

35. SUMMARY OF ACTUAL RECEIPTS 2022/23 2021/22 Final budget Actual receipts Variance % Recov. Final budget Actual receipts Variance % Recov. Revenue Items R'000 R'000 R'000 % R'000 R'000 R'000 % 5 473 266 5 204 134 269 132 95% 5 371 909 5 068 340 303 569 94% Accommodation charges-leasehold 7 111 379 6 880 296 231 083 97% 8 057 366 6 626 292 1 431 074 82% Accommodation charges state owned 73 468 61 676 11 792 84% 68 026 58 121 9 905 85% Accommodation charges freehold- private 3 912 823 3 912 823 0 100% 4 349 655 4 349 655 0 100% Augmentation 30 000 31 727 - 1 727 106% 63 000 1 350 61 650 2% Interest, fines, recoveries and other receipts 255 006 148 195 106 811 58% 252 476 164 215 88 261 65% Municipal Services Management Fees 16 855 942 16 238 851 617 091 96% 18 162 432 16 267 973 1 894 459 90% Total 2 145 849 58% 1 043 156 77% Municipal Services recovered 5 100 126 2 954 277 4 479 745 3 436 589 87% 87% Total revenue 21 956 068 19 193 128 2 762 940 22 642 177 19 704 562 2 937 615 The actual receipts for the period ended 31 March 2023 amounts to R19.1 billion, which represents 87% of the projected annual receipts. This is mainly due to unpaid invoices for the State owned accommodation charges and Municipal Services paid on behalf of the Client Departments.

36. SUMMARY OF EXPENDITURE OUTCOME PER ECONOMIC CLASSIFICATION 2022/23 2021/22 Final budget Total Expenditure Variance % Spent Final budget Total Expenditure Variance % Spent Expenditure Items R'000 R'000 % R'000 R'000 % R'000 R'000 Current Payments Cleaning and Gardening Admin Goods and Services Maintenance Municipal Services recovered Leasing (Private owned) Property Rates Compensation of Employees Municipal Services non-recoverable Covid 19- Requirements Total current payments Capital Payments Capital recoverable Capital non-recoverable Machinery & Equipment Total capital payments 346 551 399 943 2 785 518 346 886 359 923 2 774 431 - 335 40 020 11 087 1 330 779 - 212 674 - 7 880 14 607 - 4 037 100% 90% 100% 74% 104% 100% 99% 101% 383 244 424 637 2 724 230 346 451 383 417 2 575 750 36 793 41 220 148 480 90% 90% 95% 100% 100% 96% 97% 84% 59% 97% 0 5 100 126 5 639 869 1 815 978 2 155 560 429 419 3 769 347 5 852 543 1 823 858 2 140 953 433 456 4 479 745 5 526 170 1 918 660 2 030 733 564 053 31 255 18 082 727 4 479 745 5 510 568 1 838 706 1 969 628 471 562 18 399 17 594 226 15 602 79 954 61 105 92 491 12 856 587 846 0 0 0 0 18 672 964 17 501 397 1 171 567 94% 2 042 809 1 186 462 53 833 3 283 104 1 396 218 1 215 143 52 145 2 663 506 646 591 - 28 681 1 688 619 598 68% 102% 97% 81% 2 261 789 2 235 541 62 120 4 559 450 1 648 904 1 360 744 33 674 3 043 322 612 885 874 797 28 446 1 516 128 73% 61% 54% 67% 91% 92% Total 21,956,068 20,164,903 1,791,165 22,642,177 20,637,548 2,004,629 36

37. SUMMARY OF EXPENDITURE ANALYSIS Construction Management Services The variance between the budget and the actual expenditure is due to a reclassification of projects between capital and operational after the financial year-end. This seeming overspending is off-set by underspending on the Capital items where these projects were budgeted for. As 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 was a major cause of under-expenditure. Clients are expected to sign-off on their available allocations before the start of the financial year, but some Clients only make the allocations available during the first quarter of the financial year. This leads to further delays and under-expenditure as projects cannot be placed on the Procurement Plan before approval of the budget. Further delays are experiences on site by defaulting contractors and other contractors not delivering in accordance with the projected project expenditure. The delay in the filling of the vacant funded positions have also contributed to under spending. 37

38. SUMMARY OF EXPENDITURE OUTCOME PER PROGRAMME (cont.) Real Estate Management Services The cause driver of the low spending on this programme is the Municipal Services paid on behalf of the Client Departments. Although the function of payments for municipal services was devolved in 2006, the PMTE has been administrating these accounts on behalf of the Clients. This is being devolved in totality and will be phased out. The item is fully recoverable and only included for cash flow purposes. Municipal Services expenditure is based on actual consumption by Client departments and will fluctuate due to load shedding and saving initiatives implemented by Clients. The budget amount is only for cash flow projection purposes and cannot be seen as a underspending. The unspent funds which were allocated for the rectification of illegally occupied properties have also contributed to under spending. 38

39. Financial Position - Assets Year on Year R 000 -1,105,072 2023 R 000 2022 R 000 % change Comments 3,558,996 4,664,068 -24% Current assets The reduction due to subsequent payments received from some client departments and impairment on some client department. In addition, the implementation of the Prescription Act on private leases owed to the landlords resulted in a decrease in revenue accrual from the client department. 4%Amount not significant 3,063,507 4,182,857 -1,119,350 -27% Receivables from exchange 982 941 41 Receivables from non-exchange -1%Amount not significant 471,867 477,464 -5,597 Operating lease asset 707%Interest received from implementing agents (COEGA) R20 million 22,640 2,806 19,834 Cash and cash equivalent 149,720,936 150,442,852 -125,005 -0,09% Non-current assets 153,279,932 155,106,920 -943,846 -0,6% TOTAL ASSETS 39

40. Financial Position - Liabilities 2022 R 000 2023 R 000 11,820,678 % change Comments Year on Year R 000 Current liabilities 11,931,487 -110,809 -1% Amount not significant. Operating lease liability 458,860 461,765 -2,905 -1% Bank overdraft 1,843,111 851,502 991,609 116% Slow recoveries of debts from client departments on payments made on their behalf. This is a function of the amount of capital expenditure incurred and the number of projects that reached practical completion. Deferred revenue 4,280,416 4,022,860 257,556 6% -35%Due to write off. Restatement of prior year accruals identified from subsequent payments. 13%Overall retention has decreased by 1%, however more projects were due for completion in the year under review, therefore the short term liability has increased. -11% Leave liability decreased due to officials taking annual leave post-COVID period. 116%Increase due to cellphones and printing machinery leases concluded in the year under review. 44% Increase due to maintenance (day-to-day). -6% -2% Payables from exchange 3,344,878 5,133,998 -1,789,120 Retention liabilities 371,032 329,191 41,841 Employee obligation 185,382 206,273 -20,891 Finance lease obligation 5,752 2,661 3,091 Provision Non-current liabilities TOTAL LIABILITIES NET ASSETS (Accumulated Surplus) Current liabilities 1,331,247 2,769,165 14,589,843 923,237 2,947,248 14,878,735 408,010 -178,083 -288,892 -1,538,096 -1% 138,690,089 140,228,185 40 -110,809 -1% 11,820,678 11,931,487

41. Statement of Financial Performance Highlights Augmentation revenue decreased from R4,3billion to R3,9billion Impairment loss on receivables decreased from R2.4 billion to R1,6 billion Deficit of R1.54 billion (2022: R1.60 billion) 41

42. Statement of Financial Performance Year on Year R 000 -584,478 -202,567 -406,724 % change Comments 2023 R 000 16,893,464 12,782,414 4,019,560 91,490 18,431,561 91,483 3,083,539 2022 R 000 17,477,942 12,984,981 4,426,284 66,677 19,074,454 66,677 3,145,541 -3% -2%Accommodation charges decreased due to budget cut for DCS. -10%Reduced budget from DPWI. 37%Increase in expenditure and projects.. -3% 37%Increase in expenditure and projects. -2% TOTAL REVENUE Revenue from exchange Revenue from non-exchange Construction revenue TOTAL EXPENSES Construction expenses Depreciation, amortisation and impairments on assets Employee related costs Impairment loss on receivables 24,813 -642,893 24,806 -62,002 1,986,271 1,667,611 1,933,553 2,372,018 52,718 -704,407 3% -30%This has reduced due to debts recovered 73%Increase due to procurement of new photocopy machines (Finance leases) 4293%Disposal of land (R198million). Interest expense Loss on disposal of asset 726 413 313 186,922 4,255 182,667 Operating leases Property maintenance (contracted services) 5,551,132 2,867,418 5,330,208 2,969,012 220,924 -101,594 4% -4% Property rates Sundry operating expenses 1,556,807 1,439,652 1,907,751 1,345,026 -350,944 94,626 -18%Restatement of (2021/22) accruals identified from subsequent payments. 7%Average increase on municipal services by municipalities. 42 58,415 -4% (DEFICIT) / SURPLUS -1,538,097 -1,596,512

43. IRREGULAR EXPENDITURE 2022/23 2021/22 Note to Annual Report R 000 R 000 Opening Balance 1 816 149 1 654 726 - (3 863) Prior period error Add: Irregular expenditure confirmed 161 637 165 286 1 977 786 1 816 149 Closing balance - An application for condonation amounting to R1.6 billion was submitted to National Treasury on 02 August 2022. National Treasury responded with several letters and the matters are with the Accounting Officer as the delegated authority in line with the Compliance Framework for a decision. The prior period error transactions for R3.8 million relates to the 2021/2022 financial year. The addition in the 2021/22 financial year of R165 million includes an amount of R67 million which was discovered during the 2022/23 financial year. Due to the change in the reporting framework issued by National Treasury, the 2021/22 balance had to be adjusted to include the R67 million. New irregular expenditure reported in the current financial year amounted to R161.6 million, R141 million of which was discovered in the current audit cycle. - - - 43

44. FRUITLESS AND WASTEFUL EXPENDITURE 2022/23 2021/2022 Note to Annual Report: R 000 137 349 R 000 Opening balance Prior period errors Add: Fruitless and wasteful expenditure confirmed Less: Fruitless and wasteful expenditure written off 136 943 - 4 - - 406 - Less: Fruitless and wasteful expenditure recoverable - - Closing balance 137 353 137 349 - The 2021/22 opening balance of fruitless and wasteful expenditure was restated with an amount of R46,5 million that relates to the beautification of schools projects for the Department of Basic Education. The amount of R406 thousand added in the 2021/22 financial year was discovered in 2022/23. Included in this amount is R377 thousand which was referred to Labour Relations to implement consequence management. The disciplinary proceedings are still on going. The addition of R4 thousand in the 2022/23 financial year was also routed to Finance to recover money from the responsible official. - - 44

45. Section 5 PMTE: Debtors Information

46. PMTE: Total Outstanding Debt as at 31 March 2023 Categories Opening balance Amount Received for prior years Amounts Invoiced for 2022/23 Amount Received for 2022/23 % Total Recovery Outstanding Balance R 000 R 000 R 000 R 000 % R 000 5 398 102 Accommodation (State Owned) 1 723 357 158 615 5 089 855 94% 1 872 989 Accommodation (Private) 940 465 326 843 5 331 756 4 877 291 91% 1 068 087 Municipal Services 4 933 976 271 304 4 332 396 2 850 407 66% 6 144 661 PACE 455 430 363 525 1 163 356 1 059 905 91% 195 356 Recoverable: CA 251 775 76 306 196 361 132 360 67% 239 470 Total 8 305 003 1 196 593 16 421 971 14 009 818 85% 9 520 563 Of the opening balance of R8.3 billion and only R1.2b was received in 2022/23 financial year. 46

47. PMTE: Debtors Age analysis as at 31 March 2023 Categories Current 30 Days >60 Days Total 2022/23 Prev Years Total R 000 R 000 R 000 R 000 R 000 R 000 Accommodation (State Owned) 1 557 086 18 822 101 321 195 760 315 903 1 872 989 Accommodation (Private) 420 141 56 331 49 752 541 863 647 946 1 068 087 Municipal Services 5 435 130 434 557 200 588 74 386 709 531 6 144 661 PACE 91 161 85 353 2 273 16 569 104 195 195 356 Recoverable: CA 175 469 32 557 7 525 23 919 64 001 239 470 Total 7 678 987 627 620 361 459 852 497 1 841 576 9 520 563 47

48. Recommendation It is recommended that the Portfolio Committee on Public Works and Infrastructure : Notes the presentation on the DPWI 2022/23 Annual Report 48

49. Department of Public Works and Infrastructure (DPWI) Head Office: Public Works CGO Building 256 Madiba Street Pretoria Central Private Bag X65 Pretoria 0001 Thank You Website: http://www.publicworks.gov.za 49