Transport and Public Works
- (a) Why does Go George and Fleet Management (GIPTN) fall under Community Safety and not Finance, (b) what agreements and arrangements were made between the Executive Mayor and the Municipal Manager with the previous Director of Human Settlements who is now the Director of Community Safety and (c) why was an instruction issued to transfer a substantial amount of funds (from national grant funding) from the GIPTN budget to the Province;
- whether the transfer of these funds is proper procedure; if not, why not; if so; what are the relevant details;
- whether he will institute a forensic audit; if not, why not; if so, what are the timelines?
- (a) The question should ideally be referred to the George Council, whose
prerogative it is to establish the municipal macro-structure. Whilst Province, through the Department of Transport and Public Works, has provided input to the possible locations of the function in the Municipality in the past, the Department was not involved in the decision of where to locate the function. In engagements with the Municipality, the Department has expressed its preference to see the transport function housed in its own department, in the long-term. However, in the short term and until adequate capacity has been developed in the Municipality, the function must be housed within one of the existing departments in the Municipality. It is understood that the Municipality’s choice of Community Safety was prompted by the overlap of functions between Traffic Management and Public Transport.
Mr Dyantyi’s suggestion of the Finance department would be a consideration from a revenue and asset management perspective. However, it is the Department’s understanding that the Finance department does not have the capacity to take on the management of operational contracts and it is therefore our understanding that the Municipal Council’s preference was not to locate the function in the Finance department. It is worth noting that the Deputy CFO has, in the past, performed the role of acting Public Transport Oversight Officer (PTOO). It is therefore assumed that the decision by the Municipal Council not to locate the function in Finance was carefully considered and informed.
(b) The Department of Transport and Public Works is not aware of any specific agreements or arrangements other than the standard contract of employment arising out of the employment process that was undertaken to fill this post.
(c) The Province and the Municipality are jointly managing the George Integrated Public Transport Network (GIPTN) as allowed by section 12(1) of the National Land Transport Act (NLTA). An Intergovernmental Agreement (IGA) was signed in 2012 to govern this joint relationship. Clause 9(3) of the IGA specifically provides that should national grant funding be secured, it will be used to offset the financial responsibilities of the Province (since the Province is providing the bulk of the funding and is also bearing the full financial liability of the operational contracts for the GIPTN). As a result, when national grant funding was first secured (in the 2013/14 financial year), the Province and Municipality signed an agreement additional to the IGA to provide for the Province to be reimbursed for certain expenses from the Municipality, with these expenses being eligible for funding from the national grant. Addenda to this reimbursement agreement have been signed each year since then, detailing the amount that the Province is able to claim from the Municipality as part of the overall balanced GIPTN budget. The full GIPTN budget is captured in the Municipality’s annual budget which is approved by Council each year. The payment made by the Municipality to the Province was in terms of the latest addendum and in line with the approved Municipal budget. It was also supported by the necessary supporting documentation to demonstrate proof and authorisation of expenditure, and was in line with the DORA framework with respect to eligible expenditure under the Public Transport Network Grant.
(2) It is important to first clarify that any payments by the Municipality to the Province are in terms of a reimbursement for expenditure already incurred on the pre-approved GIPTN budget, and are not transfers.
The signed agreement and its addenda between the Province and the Municipality referred to above have now been subject to 8 audit cycles – 4 in the Municipality and 4 in the Department of Transport and Public Works. The Auditor General is therefore well aware of the arrangement.
- As per the response to question 2, the Auditor General has full knowledge of the arrangement that has been in place for the past 5 financial years. Moreover, a legal opinion has been obtained from senior counsel regarding the reimbursement process. It is therefore the Department’s view that a forensic audit is not justified and would amount to unnecessary expenditure.
