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1.0 Introduction

Presentation on EPWP incentive grant performance to the Standing Committee on Appropriations 29 th June 2011 Presented by Stanley Henderson, Deputy Director General: EPWP. 1.0 Introduction.

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1.0 Introduction

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  1. Presentation on EPWP incentive grant performance to the Standing Committee on Appropriations29th June 2011Presented by Stanley Henderson, Deputy Director General: EPWP

  2. 1.0 Introduction • The EPWP incentive grant was introduced in EPWP phase 2 to further enhance the creation of work opportunities through the payment of fiscal incentives. • The EPWP incentive is paid on the basis of Full Time Equivalents (FTEs) created above a particular threshold. • The EPWP incentive grant helps ensure that Public Bodies implement their projects labour-intensively. • The EPWP incentive is paid on a quarterly basis dependent on reports on EPWP submitted by a Public Body.

  3. 2.0 EPWP incentive processes The EPWP incentive business processes are as follows: a) The National Department of Public Works determines the eligibility, thresholds, Performance and Allocations for different Public bodies. Public bodies must have reported in the prior financial year before the 15th of October to be considered for the incentive in the subsequent financial year. b) EPWP incentive thresholds, targets and allocations are published in the Division of Revenue Act ( DORA) after going through the normal budget processes. c) Public bodies ( Provincial Departments and Municipalities) sign an incentive agreement with the National Department of Public Works valid for one financial year agreeing to abide by the conditions of the incentive grant. d) Public bodies register their projects on the National Department of Public Works reporting system and update their data on a monthly basis. EPWP information has to be on the system 20 days after the end of quarter to be considered for incentive payment for a particular quarter.

  4. 2.0 EPWP incentive processes cont’d e) The National Department of Public Works verifies data on the system, 20 days after the quarter to determine the number of Full Time Equivalents ( FTEs) by each eligible Public body to determine the incentive payments to be made. f) Payments are made to eligible Public bodies after the verification of reported data, 45 days after the end of the quarter. g) The National Department of Public Works carries out audits on data reported through site visits and verification of Public body project details on a continuous basis. h) The National Department of Public Works may make adjustments in incentive payments on the basis of Performance and audit reports.

  5. 3.0 Roles of Different Stakeholders in the EPWP Infrastructure sector incentive Roles of the National Department of Public Works • Development and review of policy framework for the incentive. • Determination of the targets, thresholds, performance targets and incentive allocations for each Public body. • Provide technical support to Public bodies to help them implement projects in their EPWP plans in order to meet the EPWP incentive targets. • Verification of data reported on the EPWP system for incentive payments. • Disbursement of the incentive payments once verification has been done. • Auditing of Public bodies to ascertain compliance to incentive requirements.

  6. Roles of eligible Public bodies • Preparation of EPWP project plan to meet or exceed targets. • Implementation of planned EPWP projects. • Registration of EPWP projects on which the incentive will be claimed on the EPWP reporting system. • Updating of project information on the EPWP reporting system on a monthly basis. • Ensuring that project and or payroll records are available for audit performances.

  7. Roles of Provincial Treasury • Disburse incentive to Provincial Departments. • Monitor incentive spending and compliance to the Division of Revenue Act (DORA). Roles of National Treasury • Monitor the compliance of the National Department of Public Works and Public Bodies to the DORA in terms of the incentive. . • Monitor incentive spending by National Public Works and Public Works on the incentive. • Support the National Department of Public Works in the development of the incentive policy framework.

  8. Key Process Points: View for Public Bodies

  9. Disbursement Flow: Provincial Departments • Disbursement • DPW Sends out a disbursement letter to provincial treasuries and public bodies indicating the specific incentive amount earned to be disbursed to each public body based on verified performance. • For 2011/12, this letter and disbursement will go out 45 days after the end of the quarter DPW Provincial Treasuries Provincial dept

  10. Disbursement Flow: Municipalities • Disbursement • DPW Sends out a disbursement letter to municipalities indicating the specific incentive amount earned to be disbursed to the public body based on verified performance. • For 2011/12, this letter and disbursement will go out 45 days after the end of the quarter DPW Municipality

  11. 4.0 Progress of the Infrastructure sector incentive in the 10/11 financial year • Provincial Departments in 7 out of the 9 Provinces have been able to access the EPWP infrastructure sector incentive. R185.9 million will be paid out of the R330 million available for the 10/11 financial year considering 3rd quarter reporting. This represents 56% of the Provincial allocation. Only the Northern Cape and North West Provinces have not accessed their incentive allocation for the 10/11 financial year. • For Municipalities, R 273.306 million of the R 622.996 million will be paid considering 3rd quarter reporting of the 10/11 financial year. This represents 44% of the Municipal allocation for the 10/11 financial year. • Considering the overall infrastructure incentive allocation, R 459 Million of the R 954 Million or 48% has been accessed.

  12. 4.0. Progress of the Infrastructure sector incentive in the 10/11 financial year (cont’d) • 91 of the 126 eligible Municipalities accessed the incentive in the 10/11 financial year. This shows that more municipalities received the incentive in the 10/11 financial year compared to the 47 in the 09/10 financial year. • The incentive paid to Public bodies has increased from R201.6 Million in the 09/10 financial year to R459 Million in the 10/11 financial year. • The challenge is that Public bodies are not drawing down their full incentive allocations due to under reporting and low labour-intensity of projects implemented. The Department has been in place measures to help Public Bodies address these challenges.

  13. 4.1. Performance on the EPWP infrastructure incentive by Provinces after the 3rd quarter of the 10/11 financial year reporting (Paid in 4th quarter) 11

  14. 4.2 Performance on the EPWP infrastructure incentive by Municipalities after 3rd quarter 10-11 reporting 12

  15. 5.0 Progress of the Infrastructure sector incentive in the 11/12 financial year • 6 Provincial Departments in 4 Provinces have accessed the Infrastructure Incentive considering the 4th Quarter of the 10/11 financial year. A total of R 49.4 Million out of R 267.269 Million available for Provincial Departments ( 18%) of the allocation will be paid. • 80 out of the 126 Municipalities will be paid a total amount of R 55.665 Million considering 4th quarter reporting of the 10/11 financial year. This represents 8% of the total allocation of R 679.583 Million for the current financial year.

  16. 5.1. Performance on the EPWP infrastructure incentive by Provinces after the 4th quarter of the 10/11 financial year reporting (Paid in 1st quarter of the 11-12 financial year) 11

  17. 5.2. Performance on the EPWP infrastructure incentive by Municipalities after the 4th quarter of the 10/11 ( Paid in the 1st quarter of the 11-12 financial year) 11

  18. 6.0 Challenges being faced by Public Bodies in drawing down the EPWP incentive • Poor quality of data reported • Under reporting • Lack of capacity and consistency of reports • M&E function not institutionalized by all implementing bodies. • Projects not being implemented Labour-intensively due to poor designs or lack of technical capacity. • Poor understanding of the EPWP incentive by Public body officials.

  19. 7.0 Measures put in place to accelerate expenditure • The Capacity of the Municipal Technical Support Directorate has been strengthened by appointment of more officials to support Municipalities. Additional Officials have been appointed. • EPWP Unit officials have been assigned to Municipalities to help in reporting. • Public bodies (Provincial Departments and Municipalities) are being provided with support to report on EPWP • A partnership with DBSA through the Siyenza Manje programme has been put in place to support municipalities jointly. • Training of officials in Municipalities in Labour-intensive methods of construction with LG-SETA is on-going. • Training on reporting is also being done for public body officials to enable them to report better on EPWP. • Technical support being provided to public bodies to implement their projects more labour-intensively so as to create more work opportunities and Full Time Equivalents that will increase the incentive drawn down. 19

  20. Challenges with Current Funding Model • Implementing bodies (especially small rural municipalities) do not have allocations to accelerate job creation meaningfully – in spite of high levels of unemployment (in both rural and urban areas) • Inadequate human capacity (technical and management) to implement projects • Lack of integrated planning including conceptualization and design/IDP

  21. Proposed Changes • Ring-fenced EPWP allocations to implementing bodies across spheres of government aligned to implementation plans. (Including Dpw as coordinating body) • Implementing bodies to be allowed to use EPWP incentive funding to ensure capacity to implement and report on clearly identified projects

  22. WE THANK YOU

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