The Budgetary Review and
Recommendation Report of the Portfolio Committee on Human Settlements for 2011,
dated 20 October 2011
In 2009, the
President assented to the Money Bills Amendment Procedure and Related Matters Bill..
The Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009) came
into effect on 16 April 2009. The Act aims to provide for a procedure to amend
money Bills before Parliament. In broad terms, the Act provides the procedure
for Parliament to amend the budget, which includes the annual Division of
Revenue Bill (although the bill is not classified as a money bill in terms of
the Constitution), the Annual Appropriation Bill and the Adjustments
Appropriation Bill. Provision is also made for the procedure to amend other
money Bills.
In light of the need to speed up progress on
The
Department of Human Settlements was formerly known as the Department of Housing
and this change came about during the reconfiguration of certain departments by
the new Cabinet in 2009. In addition, the
sanitation function which used to be under the former Department of Water
Affairs and Forestry was transferred to the Department of Human Settlements.
The
Portfolio Committee on Human Settlement’s Budgetary Review and Recommendation
Report (BRRR) is based on its engagement with the following documentation:
Entities reporting to the National
Department of Human Settlements:
1.1 The role of the Committee
The mandate of the Portfolio Committee on Human Settlements is to:
·
Consider legislation referred to it;
·
Initiate amendments to legislation;
·
Exercise oversight over the Department of Human Settlements,
its entities and implementing agents;
·
Consider international agreements referred to it;
·
Facilitate public participation in its processes;
·
Facilitate appointments to statutory bodies, where
applicable;
·
Learn from international best practices through study tours,
etc;
·
Participate in international programmes, activities and
capacity building programmes.
1.2 The Department
The mandate
of the Department of Human Settlements is to determine, finance, promote,
co-ordinate, communicate and monitor the implementation of housing policy and
human settlements.[1]
Since the formulation of the Comprehensive Housing Plan in 2004, the Department
has conducted various initiatives to enhance the creation of comprehensive,
integrated, co-ordinated and sustainable human settlements and quality housing.
These initiatives include the review of the National Housing Code which
determines national norms and standards in respect of housing development, as
well as the provision of the Farm Worker/Occupier Housing Assistance Programme,
and the establishment of the Housing Development Agency. Subsequently during
the course of January 2010, Cabinet approved an outcome-based approach to the
mandate of the Department with the adoption of Outcome 8 – Sustainable Human
Settlements and Improved Quality of Household Life. Section 26 of the
Constitution of the
2.1 Strategic Priorities of the
Department
The
Department has five strategic objectives that are aligned with each programme,
as follows:
·
Strategic objective 1: Provide strategic leadership, administrative and
management support services to the Department.
·
Strategic objective 2: Develop
and promote human settlements and housing policies supported by a responsive
research agenda and monitor and assess the implementation, performance and
impact of national housing policies and programmes.
·
Strategic objective 3: Support
implementation and delivery, build capacity, liaise and communicate with
stakeholders for effective housing and human settlements programmes, and
co-ordinate and monitor the implementation of priority projects and the
sanitation programme.
·
Strategic objective 4: Fund
housing and human settlement development programmes, provide financial and
grant management services, promote investment in housing finance, mobilise and
promote financial probity within housing institutions, and manage all matters
provided for by the Home Loan Mortgage Disclosure Act (2000).
·
Strategic objective 5: Co-ordinate the Department’s mandate within the
inter-governmental relations framework, manage international relations and
promote good governance practices within the Department and its public
entities. Provide timely and integrated business information to the Department.
Each programme has a number of sub-programmes, strategic objective
statements and measures.
2.2 Measurable Objectives of the
Department
Strategic goal 1:
Administration: Provides strategic
leadership, administrative and management support services to the Department.
Strategic
objectives and measures:
·
Executive Support Services provides executive support.
·
Internal Audit, Risk Management and Special Investigations
co-ordinate the provision of Internal Control, Risk Management and Special
Investigations services.
·
Corporate Support provides corporate support to the Department
that will enhance a quality work life in terms of acquisition of office
accommodation, security services and records management services.
·
Human Resource Management manages and provides human
resource administration, organisational design and performance management,
labour relations and human resource development.
·
Information Technology and Systems provides information
technology systems, services, infrastructure and business application support
in the Department.
·
Legal Services provides legal services in the Department
which includes the development of human settlements legislation.
Strategic goal 2:
Housing
Policy, Research and Monitoring: Manages the development, promotion, monitoring and
evaluation of sustainable human settlements policies and programmes supported
by responsive research.
Strategic
objectives and measures:
Measures:
Strategic goal 3:
Housing
Planning and Delivery Support: Supports implementation and delivery, build capacity, and
liaises and communicates with stakeholders for effective housing and human
settlement programmes.
Strategic
objectives and measures:
Measures:
Strategic goal 4:
Housing
Development Finance: Funds housing and human settlement development programmes,
provides financial and grant management services, promotes investment in
housing finance, mobilises and promotes financial probity within housing
institutions and manages all matters provided for by the Home Loan and Mortgage
Disclosure Act (2000).
Strategic
objectives and measures:
Measures:
Strategic goal 5:
Strategic
Relations and Governance: Co-ordinates the
Department’s mandate within the intergovernmental relations framework, manages international relations, and promotes good governance practices within the Department and its public entities, and provides timely and integrated business information to the Department.
Strategic
objectives and measures:
Measures:
Programme 1 – Administration
The purpose of the programme is to
provide strategic leadership and administrative and management support services
to the Department and promote and facilitate the flow of information between
the Department and its stakeholders.
It has
been reported that bulk verification of qualifications was conducted, including
matric for all employees who are permanently employed. Two bills were processed
and passed by Parliament i.e. the Sectional Titles Schemes Management Bill and the
Community Schemes Ombud Service Bill.
The
appointment of officials on contract and interns were made to ensure that
service delivery is not hampered by the turnaround process.
Outcomes
in monitoring external cases being investigated by Special Investigating Unit
(SIU):
1. Subsidies: municipal employees
·
401 municipal employees were arrested and 334 court cases
were finalised.
·
860 acknowledgements of debt to the value of R8.2 million
were signed by municipal employees who defrauded the Housing Subsidy System.
·
No disciplinary cases prepared by the SIU were dealt with.
2. Subsidies: Government employees
·
936 Government officials were arrested and 871 were
convicted. Different penalties were handed down from suspended sentence and
some with condition to repay subsidy amounts.
·
1615 acknowledgement of debt to the value of R21.7 million
were signed by civil servants who defrauded the housing subsidy.
·
1588 disciplinary files involving Government officials were
prepared during the period under review. A joint process with the Department of
Public Service and Administration for co-ordinating disciplinary action against
civil servants who have unlawfully benefited from low income housing subsidies
has commenced.
·
The department has to date a total amount of R17.8 million.
This figure is a consolidation of both Government and municipal employees.
·
The project values for each contract amounted to R968 130.31
and R8 110 500.00 respectively.
·
Both cases have been referred to SAPS for the issuing of
warrants of arrest to appear in court.
·
Other cases investigated include Tsakane Extention 11 & 15
(
A number
of targets could not be achieved because they were subject to the finalisation
of the departmental turnaround strategy, such as filling of vacancies, approved
alignment of departmental structure, and the revision of the Information
Communication Technology (ICT) System, etc. Capacity constraints in this
programme resulted in the following not being achieved:
·
an impact analysis and evaluation of policies, fourteen
planned internal audit projects and two special projects.
Programme 2 – Housing Policy,
Research and Monitoring
To develop and promote policies on
human settlement and housing supported by a responsive research agenda and to
monitor and assess the implementation, performance and impact of national
housing policies and programmes.
The
Department’s 2010/11 Annual Report claims that no major variances were reported
for Programme 2 during the period under review. However, Programme 2
experienced mixed levels of success in terms of meeting set targets. For
example, the Department exceeded its target to undertake applied research and
produce two research reports on identified themes. In addition to meeting the
target, it also published a paper and initiated two additional studies, which
will be completed during 2011/12. Furthermore, it also developed the following
three policy proposals: new national policy for the Ministerial Technical
Standards regarding the subsidy-financed housing sector, a comprehensive new
Human Settlements Policy and a Human Settlements Bill, as well as a policy on
the housing-subsidy scheme quantum for 2011/12.
Economic
research on housing resulted in the following three reports: Assessment of the
Economic Impact of Government Housing Programmes, preliminary report on
Assessment of the Performance of Government-subsidised Housing as an Asset, and
a booklet and compact disk on a Directory of Exhibitors: Alternative Building
Technologies Indaba.
A study on
the extent to which urban dwellers in polygamous marriages might be
discriminated against by the current housing policies and programmes was also
undertaken. The first result of the study has been completed. Research was
conducted on the cost of building an informal dwelling in informal settlements
and data and fieldwork reports have been collected.
The
following were not achieved:
·
Only one report instead of two was completed on assessing
the impact of national housing policies, programmes and projects. The
Department reported that the second study only commenced during the 3rd
quarter and data collection was still in progress by the end of the financial
year.
·
The Department was supposed to complete two occupancy audit
reports but not a single report was drafted. The Department reported that the
occupancy audit could not continue due to insufficient funding and was therefore
discontinued.
·
Four quarterly technical construction reports were due for
completion, but instead not a single report was drafted. The Department
reported that approval was not granted for the establishment of the National
Verification Unit due to insufficient funding and therefore this output was discontinued.
·
Understanding beneficiaries’ perception on alternative
technologies.
·
There was no response from the office on the Accounting
Officer regarding research to develop a national framework to assess the
sustainability of human settlements. This project was therefore not completed
within the planned time.
·
A study to assess the performance of Government–subsidised
housing as an asset was delayed due to challenges in releasing data by the
Department of Human Settlements’ Information Management Unit.
·
Non-approval of the National Verification Unit
due to insufficient funding resulted in the discontinuation of the key performance
area (KPA) i.e. Technical Construction Reports.
·
Two beneficiary occupancy audits were targeted for this
financial year and the audit discontinued due to insufficient funding. This
also resulted in the discontinuation of the KPA.
·
Two audits were expected to be conducted on the impact on
national housing policies, programmes and projects.
Programme 3: Housing Planning and
Delivery Support
It aims to support the
implementation and delivery, building capacity, and liaising and communicating
with stakeholders for effective housing and human settlement programmes, and to
co-ordinate and monitor the implementation of priority projects and the
sanitation programme.
Programme 3 reported to have achieved a number of key strategic
objectives during the year under review, including:
·
Signing of delivery agreements between the Department of
Cooperative Governance and Traditional Affairs (COGTA), Department of Rural
Development and Land Reform (DRDLR), Department of Public Works (DPW),
Department of Water Affairs (DWA) and Department of Public Enterprises (DPE).
·
Conducted training programmes that reached 998 councillors,
officials and community members.
·
281 previously disadvantaged learners were awarded
scholarships to study towards a human settlements qualification.
·
Instead of 2 150 net hectares of State land released to
the Housing Development Agency (HDA) as planned, a total of 33 000 hectares
of land has been released.
·
100% (all nine provinces) developed Health & Hygiene
Plans, instead of 80% as planned.
·
A total of 275 sustainable jobs were created, instead of 200
as planned. It would assist the Committee to receive further information on these
jobs, e.g. the nature of the jobs, in which communities they were created, and
the demographic profile of beneficiaries.
·
The Free Basic Sanitation Strategy was rolled out to 63% of
municipalities, instead of 30% as planned. However, while the Department
exceeded the target for the number of households provided with basic sanitation
services through the Accelerated Community Infrastructure Programme (ACIP)
(8 426 households instead of 7 418 as planned), it failed with
respect to targets set for the Rural Household Infrastructure Programme (RHIP)
(only 5 580 households instead of 11 000 as planned).
·
Eight municipalities received accreditation to level 1 &
2: six
·
Provided support to priority projects.
·
30 unproclaimed settlements were provided with adequate
basic sanitation.
To a significant extent, the following targets were not achieved due to
the inadequate responses from the provincial departments:
·
A multi-year national Human Settlement Development Plan was not
completed – the Department indicated that nine (possibly) provincial plans were
required. However, it is not stated which provincial plans were outstanding and
what resulted in the delays.
·
Information sessions were not held with all nine provinces
on the strategy to unblock stalled projects – instead sessions were held with
six provinces during June 2010 and eight provinces during December 2010.
·
Reports on the reasons for projects being blocked were
compiled based on information received from four provinces – five provinces
failed to submit their input. The inadequate input also resulted in a priority list
of blocked projects to be undertaken in provinces which could not be completed.
·
The delivery of at least 5 000 People’s Housing Process
(PHP) housing units across nine provinces could not be supported – instead only
four provinces implemented PHP during 2010/11 and only 3 500 units could
be supported. The rest of the provinces did not plan or budget for PHP. It
should be noted that in 2009/10, the Department raised similar concerns in
respect of PHP.
·
A review of the National Programme for Human Settlement
Chapters of Integrated Development Plans did not materialise – the Terms of
Reference for appointment of service providers has been submitted to the
Director-General and a response was still outstanding by the end of the
financial year.
·
A Framework for Human Settlements Planning not finalised – it
was submitted to the Director-General for approval.
·
·
Revision of the informal settlement strategy document was
not approved and was removed from the business plan of the NSPU due to limited
funding.
·
A final draft of the revised basic household sanitation
policy was not approved due to delays in the procurement of the professional
service provider to support the Department with the review processes.
·
Under the strategic objectives,
the review and development of sanitation qualifications did not take place.
Programme 4: Housing Development
Finance
The Programme is responsible for
funding housing programmes and human settlement development programmes. It also
provides financial and grant management services. Furthermore, it promotes
investment in housing finance. It mobilises and promotes financial probity
within housing institutions. In addition, it manages all matters provided for
the Home Loan Mortgage Disclosure Act (No. 63 of 2000).[2]
Programme
4 reported to have achieved the following key strategic objectives during the
period under review:
·
Relevant monthly reports and financial statements were
submitted to the National Treasury as required.
·
Three reports were produced on the analysis of information
by financial institutions to detect lending patterns and practices on home
loans.
·
In order to facilitate increased support of affordable
housing finance, a report on the progress of the guarantee fund was finalised.
·
Two reports on Employee Assisted Housing (EAH) were
facilitated.
Outputs
not achieved:
Housing Equity: Reports
on Secretariat function to the Office of Disclosure in terms of the Act
·
There was no achievement in performance measures/indicators
due to no meetings held related to the indicator during the 2010/11 financial
year, the non-appointment of members of the Office of Disclosure and the lack
of co-ordination and dissemination of information to provinces and
municipalities in terms of the Home Loan and Mortgage Disclosure Act (HLAMDA).
·
No co-ordination and dissemination of information to
provincial human settlements departments and municipalities in terms of HLAMDA.
·
Finalisation of the Official Development Assistance strategy
could not be achieved since the final draft was submitted for approval and has
yet to be approved.
·
With respect to investments for human settlements and
infrastructure development, instead of two reports on the implementation of the
Official Development Assistance (ODA), only one report on the draft strategy
was developed. This was due to the fact that the ODA strategy has not been
finalised and is awaiting approval.
Programme 5: Strategic Relations and
Governance
Programme 5 is responsible for
overseeing the management of housing institutions through performance and
corporate planning monitoring as well as policy advocacy and governance
oversight. It provides integrated business solutions and support as well as
business information and related products by maintaining the housing and human
settlements database[3].
Achievements
during 2010/11 include the following:
The
Department met all its targets in respect of the strategic and performance
plans to provide systems that support sector-business processes. These include,
amongst others:
·
The Department of Human Settlements participated in
preparations of
·
The programme facilitated continued implementation of the
Danida-funded project (
Outputs
not achieved:
·
The Department planned to develop, implement, manage and
review the media services strategy and plans. It stated that there were delays
in approval processes and some of the submissions and activities were partially
implemented.
·
Organisational Transformation Programmes are partially co-ordinated
and managed because some of the organisational transformation strategies and
policies are pending approval.
·
The Department had targeted to produce two reports on
verification visits to housing institutions and submit them to the Director-General
for noting and/or action where necessary. It was reported that the target could
not be reached due to capacity constraints. The Social Housing Foundation was
due to be completely dissolved and this did not fully materialise.
Further challenges
reported by the Department:
·
Under and non-reporting by provinces on the total value
chain.
·
The lack of planned and implementable programmes and project
pipelines.
·
Failure by provinces to prioritise and budget for the
resolution of blocked projects.
·
Lack of capacity to verify performance of all projects in
the nine provinces.
·
Reliability and verification of reported programme and
projects performance data.
·
Availability of reliable data as indicator to measure human
settlements index.
·
Intergovernmental co-ordination of Capacity Development
Programme.
·
Non-alignment and accuracy in delivery performance between
local, provincial and the national Address.
·
Lack of availability of capacity and expertise at provinces
for project management to ensure effective utilisation of available resources
within current priority programmes projects.
·
Non-alignment of provincial and municipal budget allocation
to achieve required national outputs and outcomes.
Interventions
comprised the following:
·
A departmental turnaround strategy has been approved for
implementation.
·
The establishment of the Programme Management Unit has commenced.
·
An implementation forum has been established to ensure
proper accountability for agreed outputs and outcomes.
·
A Human Settlements and Basic Service Task Team has been
established to improve national, provincial and municipal co-ordination.
·
Required evaluations are to be conducted on key performance
programmes, including informal settlements upgrading and social and rental
housing to improve performance in funding, planning and implementation.
·
Improved governance, compliance and performance oversight of
province, human settlements entities and municipalities is consistent
work-in-progress.
·
Improved human resources recruitment, capacity, training and
development is planned when the revised organisational structure is
implemented.
3.1 Summary of the Department’s five-year
strategic plan
The Medium Term Strategic Framework (MTSF) positions human settlements
as a key to achieving two strategic objectives, i.e. expansion of social and
economic infrastructure, and building cohesive, caring and sustainable communities.
The shift in focus from housing to human settlements was due to the
realisation that housing is not just about building a shelter over people’s
heads. Instead, it is about economic growth and social development that are in
balance with the capacity of the natural system on which people depend for
their existence, and which subsequently results in sustainable development. The
Breaking New Ground (BNG) programme is regarded as a response to this
challenge.
3.1.1 Guidance and
support for implementing policy
Over the MTEF period, the Department of Human Settlements will emphasise
providing guidance and support on policy implementation. This will include
direct support to provinces and municipalities on the implementation of
projects, supporting projects where there are blockages, and facilitating co-operation
with the private sector.
Further,
the Department will continue to refine the role of municipalities in the
housing delivery chain, as well as to establish the necessary mechanisms for
the rollout of accreditation, as provided for in the Housing Act (No. 107 of
1997).
3.1.2 Housing and quality
audit
A preliminary housing quality audit is being conducted by the Department
and will focus on the persistent and chronic problems in the delivery of quality
houses and in the allocation subsidies to non-qualifying beneficiaries.
3.1.3 Addressing spatial
planning challenges
Having adopted a comprehensive approach to human settlements, the
Department will look at key challenges around spatial planning, such as
urbanisation and migration patterns, and the further mushrooming of informal
settlements.
3.1.4 Co-ordinated sanitation programme
The Department anticipates that the acquisition of the sanitation
function will ensure that the provision of sanitation services countrywide is
consolidated and co-ordinated.
3.1.5 Key policy
developments
The National Housing Code was updated in 2008 in line with the
Comprehensive Plan for Sustainable Human Settlements. Focusing on particular
areas, such as informal settlements upgrading, integrated residential
development, rural and social housing, the code provides for considerable
flexibility in contracting strategies and aims at improving urban efficiency by
focusing on the developmental needs of an entire community or area.
The Department identified the following challenges: inadequate planning,
lack of co-ordination and integration of different government functions, lack
of social cohesion, and spatial capital. Nonetheless, to a large extent housing
delivery still negates the role of civil society and the citizens themselves,
thereby undermining social capita and building dependency on the State while
burdening the State and compromising its delivery capacity.
3.2 Outcome 8
The
January 2010 Cabinet Lekgotla accepted an outcomes-based approach to service
delivery. For each outcome, a limited number of measurable outputs with targets
were identified. Each output is linked
to a set of activities as prepared by the Presidency. While a total of 12 outcomes were identified,
Outcome 8 speaks directly to Human Settlement’s targets. Outcome 8 seeks to “create sustainable human
settlements and improve the quality of household life”. The delivery
agreement for Outcome 8 sets 2014 targets for:[4]
·
Releasing 6 250 hectares of
well located state-owned land for delivery of sustainable human settlements.
3.2.1 Targets
Specific departmental performance targets will be
finalised once service delivery agreements are concluded in support of the
identified outcomes. This process will be overseen by new functions.
The
Department informed the Committee that the housing function is a concurrent
function and, therefore, the agreement for this output has been signed between
the Minister of Human Settlements and the provincial MECs. This agreement is
still applicable should accreditation to level 2 be granted to a municipality
as per the accreditation framework.
4.1. Preliminary report at the end
of year
Overview of
the fourth Quarter Expenditure: 2010/11
Expenditure per appropriation Act, 2010 |
Appropriated budget |
Total additional
appropriation |
Shifts & virements
after ENE |
Available budget |
Year to date actual
expenditure |
Percept of budget
expended |
|
Expenditure per appropriation Act, 2010 |
Appropriated budget |
Total additional
appropriation |
Shifts & virements after ENE |
Available budget |
Year to date actual
expenditure |
Percept of budget
expended |
|
1 Administration |
176,175 |
35,822 |
9,450 |
221,447 |
188,570 |
85.2% |
|
2 Housing Policy,
Research and Monitoring |
45,907 |
1,779 |
(3815) |
43,871 |
32,640 |
74.4% |
|
3 Housing Planning and
Delivery Support |
206,831 |
18,390 |
(18025) |
207,196 |
156,827 |
75.7% |
|
4 Housing Development
Finance |
15,598,126 |
51,069 |
25,200 |
15,674,395 |
15,626,543 |
99.7% |
|
of which |
|
|
|
|
|
|
|
-Rural Households
Infrastructure: Indirect grant |
100 000 |
- |
- |
100,000 |
66,722 |
66.7% |
|
Conditional Grants to
provinces |
|
|
|
|
|
|
|
-Human Settlements
Development Grant |
15,026,763 |
15,000 |
- |
15,041,763 |
15,041,763 |
100% |
|
-Housing Disaster
Relief Grant |
133,800 |
- |
- |
133,800 |
133,800 |
100% |
|
Departmental agencies
and accounts |
|
|
|
|
|
|
|
-Social Housing
Foundation: Contribution to operations |
6,621 |
- |
- |
6,621 |
6,621 |
100% |
|
-Social Housing
Regulatory Authority: Contribution for creation, capacity building and
operational grants |
151,772 |
34,999 |
- |
186,771 |
186,771 |
100% |
|
-Housing Development
Agency: Contribution to operations |
69,300 |
- |
- |
69,300 |
69,300 |
100% |
|
-Rural Housing Loan
Fund: Contribution to operations |
49,500 |
- |
- |
49,500 |
49,500 |
100% |
|
5 Strategic Relations
and Governance |
174,442 |
-16,782 |
(12810) |
144,850 |
87,514 |
60.4% |
|
Total for vote |
16,201,481 |
90,278 |
- |
16,291,759 |
16,092,094 |
98.7% |
Source:
National Treasury 2010/11
The Department received a budget of R16.2
billion, of which R16 billion or 98.8% expenditure was recorded by the end of
the fourth quarter. As a result, R199 665 million (or 1.2% of the
available budget) under expenditure was recorded.
·
Current
payments were allocated
R585 378 million, of which R441 819 million or 75.5% expenditure was
recorded.
o
Compensation
of Employees was allocated R250 840 million, of which R216 452
million or 86.3% expenditure was recorded.
o
Goods and
Services received R334 053 million, of which R225 195 million or 67.4%
expenditure was recorded.
·
Transfers
and Subsidies received R15.5
billion, all of which was spent.
·
Payments
for Capital Assets received R171.3 million, of which R116.7 million or 68.1% expenditure was
recorded.
Though the Department’s performance reflects 100% expenditure on
transfers and subsidies, under expenditure of R1.7 million was still recorded. In addition, the Department also recorded
notable under expenditure on various programmes (including Housing, Policy
Research and Monitoring; Housing Planning and Delivery; Strategic Relations and
Governance). Under expenditure in the Department is hugely attributed to
vacant positions not being filled; under-spending on the Accelerated Community
Infrastructure Programme and the Rural Household Infrastructure Grant, which
recorded under expenditure of R33.3 million (or 33.3% of its R100 000
million available budget).
The Human Settlements Development Grant makes up 93% of the Department’s
adjusted appropriated allocation. Whilst 100% of the grant was transferred to
provinces, provincial spending equates to 97%, with largest under-spending by
4.2 First
Quarter (2011/12) Expenditure:
4.2.1.
Overall Expenditure Performance
The Department of Human Settlements received an allocation of R22.5
billion, but only managed to spend R3.9 billion (17.7%) at the end of the first
quarter. This signals slow spending when benchmarked against the 25% threshold.
4.2.2
Expenditure Performance per Economic Classification
·
Current
Payments
o
Current Payments were allocated
R642.2 million but only R83.5 million (13%) spent on Compensation of Employees
had R319 million but only R57.3 million (17.9%) had been spent.
o
Goods and Services was allocated
R322.7 million, but only R26.1 million (8.1%) had been spent.
·
Transfers
and Subsidies
Transfers and subsidies were allocated R21.7 billion but only R3.8
billion (17.8%) was spent. Transfers and subsidies account for 96% of the total
departmental budget. This implies that much focus should be on:
o
How the Department is transferring
funds to receiving entities.
o
How the Department is providing
support and monitoring the spending of transferred funds.
·
Payment for Capital Assets
The capital payments budget amounted to R235.7 million but only R4.1
million (1.7%) was spent).
4.2.3
Expenditure Performance per Programme
Overall
Programme Performance
The Department implements it budget through five (programmes) namely: (1)
Administration; (2) Housing Policy, Research and Monitoring; (3) Housing
Planning and Delivery Support; (4) Housing Development Finance; and (5) Strategic
Relations and Governance. All the programmes performed below the 25% threshold.
Programme 2 (Housing Policy, Research and Monitoring) performed slightly better
as it came close to 20% of its allocated budget. Programme 5 (Strategic
Relations and Governance) had the slowest spending of 9.9% of its R155.5 million
allocated budget. The slow expenditure was due to:
·
Delays in the payment of computer
services in support of the Rural Household Infrastructure Programme (RHIP);
·
Non-filling of vacant posts.
Programme 1:
Administration
Programme 1 reflected the second slowest spending of 10.9 % of its
allocated budget. Slow expenditure in Administration resulted from non-payments
of the Special Investigating Unit and the leasing of office accommodation. The
Department of Public Works had not issued the invoice for the leased office
accommodation.
Other programmes spent in the margin of 17.5% to 17.6%. Slow expenditure
in Programme 3 (Housing Planning and Delivery Support) is said have resulted
from unfilled vacant posts.
Key Area of
Focus
Programme 4:
Housing Development Finance
This programme accounts for 97% of the total departmental budget and
manages transfers and subsidies to provinces, municipalities and other spending
institutions. For this reason programme 4 is the main area of focus as it
largely determines the Department’s success or lack of it in pursuit of
achieving its mandate.
Of the R21.9 billion allocated, the programme had spent R3.9 billion
(17%) at the end of the first quarter; of which:
·
Rural Households Infrastructure
(Indirect grant) was allocated R231 million but only R40.5 million (17.5%) was
spent.
·
Urban Settlement Development Grant
was allocated R6.3 billion but only R2.5 million was spent.
·
Human Settlement Development Grant
received R14.9 billion, and none of these funds had been transferred at the end
of the first quarter.
·
Social Housing Regulatory Authority
(Contribution to operations) received R19.3 million but no transfers had
been done at the end of the first quarter.
·
Rural Housing Loan Fund
(Recapitalisation) received R50.5 million and had spent R142 million (286.8%)
at the end of the first quarter.
·
Housing Development Agency
(Contribution to operations) was allocated R89.1 million and had spent
R267 million (300%) at the end of the first quarter.
·
National Urban Reconstruction and
Housing Agency (Recapitalisation) was allocated R1 million and had spent nearly
half of its allocation which is R49.5 million (49.5%) at the end of the
first quarter.
·
Social Housing Foundation
(Contribution to operations) was allocated R3 million but none of these funds
were transferred at the end of the first quarter.
·
Social Housing Regulatory Authority
(Capital restructuring Grant) was allocated R226.2 million but no transfers had
taken place at the end of the first quarter.
4.3 Expenditure as at 30 August 2011/12 (part
of the second quarter)
In July 2011, the Department spent R3.5 million, which is 15.7% of its
budget, bringing total expenditure to 33.2% at the end of July. This high
expenditure was the result of transfers amounting to R3.5 million for the month
of July. The Department should explain this transfer to the Committee,
indicating the receiving entity or body, what the funds are for, as well as
outlining the manner in which the use of these funds will be monitored.
Expenditure for August 2011 amounted to 1.4 million, which is 6.5% of
the allocated budget. Transfer expenditure decreased significantly from R3.5
million in the previous month to R1.4 million in August. This resulted in a
decrease in expenditure, despite the fact that capital payments expenditure
increased marginally in August. Overall expenditure as at 30 August 2011 was
R8.9 million or 39.7%.
4.4
Conclusion and overall observation
The analysis of the Department of Human Settlements’ first quarter
expenditure performance indicates an overall low expenditure of 17.4%. This low
expenditure performance is mainly attributable to the following reasons:
·
Slow transferral and, in various
instances, non-transferal to receiving institutions. The issue of
non-transferral should be resolved as a matter of urgency since it impacts
significantly on the receiving entities whose expenditure performance is
dependent on these transfers. This is reflected in Programme 4 (Housing
Development Finance), which houses transfers and accounts for 97% of the Departments’
budget.
·
The on-going restructuring process
has to be expedited and completed to resolve the challenge of unfilled vacant
posts prevalent across programmes. This is reflected in the slow spending
(17.9%) on Compensation of Employees.
·
The Department faces challenges of
late payments due to late issuing of invoices by the relevant parties. This is
reflected on the very slow spending (1.7%) of the Capital Payments budget. In this regard, effective measures have to be
taken to ensure that invoices are issued on time as this impedes on the
Department’s expenditure performance.
5.1 Performance overview
1. Notable higher or lower than expected programme
spending
·
Programme 1: Administration: Expenditure amounted to R188.6 million which is 85 per
cent of the adjusted appropriation of R221.4 million. Under-spending
is as a result of funds provided for legal advisory services not
utilised and the non-filling of vacant posts.
·
Programme 2: Housing Policy, Research and Monitoring: At the end of 4th quarter, expenditure
amounted to R32.6 million, or 74 per cent of the adjusted appropriation of
R43.9 million. Under-spending is due to delay in the roll out of a new research
framework that intends to establish housing research institutes at various
universities in South Africa and also due to agency support services and
unfilled vacant posts.
· Programme 3:
Housing Planning and Delivery Support:
Expenditure in this programme amounted to R156.8 million, or 76 per cent of
adjusted appropriation of R207.2 million. Under-spending
in the Programme is as a result of delays in the implementation of the
Accelerated Community Infrastructure Programme (ACIP) and the non-filling of
vacancies.
· Programme 4:
Housing Development Finance:
Expenditure at the end of the 4th quarter amounted to R15.6 billion,
or 99 per cent of the adjusted appropriation of R15.7 billion. Under-spending
of R33.3 million can be attributed to delays in the implementation of projects
on the Rural Household Infrastructure Grant. The under-spending relates to the
delay in the procurement process and the finalisation of appointing service
providers.
· Programme 5: Strategic Relations and Governance: Expenditure at the end of 2010/11 financial year
amounted to R87.5 million, or 60.4% of the adjusted appropriation of R144.9
million. Under-spending can mainly be attributed to unfilled
vacant posts and delays in appointing service providers to maintain and render
the necessary support to provinces on the Housing Subsidy System. Another
contributing factor is the reduction in foreign visits and the curtailment of
media campaigns.
2. Significant departmental under-expenditure per
economic classification
· Current
payments: Expenditure amounted to
R442 million, or 75% against the adjusted allocation of R585 million.
Under-expenditure relates to non-filling of vacant posts and the
non-utilisation of available funds for consultants and advertising.
· Payments for
capital assets: Total expenditure
amounted to R117 million, or 68% of total adjusted allocation of R171 million.
Under-expenditure was predominantly due to under-performance on the Rural
Household Infrastructure Grant.
5.2
Department Entities
Following
is an overview of entities reporting to the Department:
5.2.1 National Urban
Reconstruction and Housing Agency (NURCHA)
The Department authorized a loan of R75 million approved from
5.2.2 Rural Housing Loan Fund (RHLF)
The Department approved the recapitalization of the Fund in the value of
R49 million to assist with the implementation of the Rural Voucher Scheme. It
was reported that a 40 289 loans have been disbursed against target of
44 933. Loans at the value R113.6m have been disbursed against target of
R112m. A total disbursements of loans at
the value of R224.4 million against target of the value of R202 million was
recorded.
However,
RHLF is experiencing challenges such as competitive nature of the market and
from other big financial institutions. Also, the collection rate of debts is
also a challenge but it was stated that the situation is improving. Among the
lowest income band, more than 40% (these are people earning less than R1500 per
month) of loans disbursed were mainly used for improvement of houses. RHLF had
targeted about 80% of loans outside metros on housing related matters; however
their target was exceeded and reached 85%.
RHLF
stated that more loans were granted to people employed in the public sector
than those employed in the private sector. The majority of these were reported
to have been women. RHLF further
advised the committee that, the 49million allocation does not form part of the
Rural Voucher Scheme but to assist in recapitalizing the agency.
5.2.3 National
Housing Finance Corporation (NHFC)
An agreement with Old Mutual
Life Assurance Company of South Africa and its BEE Partners to
participate in an Affordable Housing Fund with initial funding of R900 million to finance the
development and sale of 25 000
affordable units. In regard to the
Trust for Urban Housing Finance (TUHF), the loan portfolio reached more than the
R 1 billion mark (R1.2 billion). The distressed clients’ turnaround and
collection recovery strategy was successfully implemented.
NHFC’s enterprise development includes social housing institutions,
private clients, and inner city regeneration programmes. It was stated that an
amount of R100 million was recovered from the previously distressed clients.
Repossessed properties at a value of R40 million were also reported.
The challenges experienced by the NHFC are, among others, the
rectification of flats and the culture of non-payment. THUBLISHA still owes
NHFC an amount of R14 million in interests. The Mortgage Default Insurance
Program was approved by the MinMec in November 2010. The Department supported
the approval of an agreement with the European
Investment Bank for the rand equivalent of EUR 30 million
5.2.4 Housing
Development Agency (HDA)
The
Department reported that seven implementation protocols have
been signed with the provincial governments of
Key features of these implementation protocols is the joint planning and
programme with other organs of state. In terms of land acquisition, an MOU has
been signed between COGTA, the Department of Public Enterprises and the
Department of Public Works. The
5.2.5 Social
Housing Regulatory Authority (SHRA)
The Department reported that Social Housing
Regulatory Programme (“SHORP”) has managed to accredit 18
Social Housing Institutions.
In terms of the Social Housing Investment
Programme (“SHIP”), it was reported that a call for proposals for SHIP II was
issued and, in summary, a total of 11 242 units were applied for with a
budget requirement of R1,2 billion.
Social housing projects, namely the
Emerald Sky,
The CEO has been appointed in January 2011 and SHRA has been operational
for three months. However, the Board agreed to report on financial statements
early rather than to wait for 15 months. Organisational work had been started
immediately after the appointment of the Board in 2010 April. The Chairperson was
been acting as the CEO until the appointment had been filled. The organisation
has 21 vacant posts and by end of March 2011, 12 vacant posts were already been
filled. The remaining vacant posts are specialised and in respect of scarce
skills such as engineers, etc.
5.2.6 National
Home Builders Registration Council (NHBRC)
NHBRC’s
mandate is to protect housing consumers from unscrupulous homebuilders. It
provides an exclusive regulatory function in the home building environment;
promote innovative technology and compliance as well as to capacitate
homebuilders.
During the
year under review, the NHBRC registered a total of 11 115 homebuilders and
renewed 3 650. The non subsidy home
enrolments 32 424 against a target of 39,000 it set for itself. Further, a total of 49 929 subsidy homes are
enrolled against a target of 94 000.
The number of houses that were completely inspected in subsidy home
enrolments was 57 420, whilst in the non subsidy were 15 631. There were 966 late enrolments reported.
During the
year under review the entity received 937 complaints of which 536 were
conciliated.
It was
reported that remedial works that was undertaken cost the entity R22
million. There were 1 505 homebuilders
trained whilst 512 homebuilders had been suspended. Projects that were enrolled with the entity totalled
25 090.
NHBRC has
reported to have achieved the following:
On
governance issues, the current board of management undertook an initiative to
build and strengthen the relationship of the institution and that of the
Auditor General. Declarations that were made in different forms than what was
required by the Auditor- General was said to have been rectified and the
relationship is improving. Peer review was conducted to deal with Internal
Audit issues and the board agreed to outsource that function and an executive
officer has been appointed to monitor the audit function. The board further
undertook an initiative to strengthen the leadership of the institution and
requested the chairperson to be visible in the office at least for three days
in a week. The IT-System, the NHBRC commissioned an audit by Deloitte and
Touche to look in to integrating the IT-System that was polarised and was not
speaking to other systems. This system was open to abuse that is why there was
a need for it to be improved.
The
ongoing investigations within the institution are carried out by the Special
Investigating Unit and the report is in the process of being completed.
5.3
Human Settlements Development Grant
5.3.1
Allocations and expenditure
|
Total Adjusted Voted Allocation |
Transfers to Provinces as per Total Adjusted |
Spent by Provinces |
Spent as % of total available to Provinces |
Spent as % of transfer as per total adjusted |
Unspent as at 31 March 2011 |
||
R'000 |
R'000 |
R'000 |
R'000 |
|||||
|
||||||||
Human
Settlements Development Grant |
||||||||
|
1,637,646 |
1,637,646 |
1,503,816 |
92% |
92% |
133,830 |
||
|
1,037,691 |
1,037,691 |
1,037,685 |
100% |
100% |
6 |
||
|
3,886,831 |
3,886,831 |
3,855,064 |
99% |
99% |
31,767 |
||
|
2,711,133 |
2,634,109 |
2,711,234 |
100% |
103% |
-101 |
||
|
1,376,150 |
1,364,750 |
1,264,584 |
92% |
93% |
111,566 |
||
Mpumalanga |
1,011,033 |
975,863 |
1,011,033 |
100% |
104% |
0 |
||
Northern Cape |
447,260 |
447,260 |
472,944 |
106% |
106% |
-25,684 |
||
North West |
1,188,973 |
1,188,770 |
1,040,163 |
87% |
87% |
148,810 |
||
Western Cape |
1,952,721 |
1,868,843 |
1,940,037 |
99% |
104% |
12,684 |
||
Total |
15,249,438 |
15,041,763 |
14,836,560 |
97% |
99% |
412,878 |
||
|
|
|
|
|
|
|
||
Housing Disaster Relief Grant |
||||||||
KwaZulu Natal |
133,800 |
133,800 |
133,800 |
100% |
100% |
0 |
||
Grant Total |
15,383,238 |
15,175,563 |
14,970,360 |
97% |
99% |
412,878 |
||
5.3.2 Total Delivery – 01 April
2010 to 31 March 2011
Province |
Serviced Sites Targets |
Serviced Sites Completed |
Houses Targets |
Houses Completed |
Total Annual Target |
Total Delivery |
EC |
8,000 |
12,979 |
22,000 |
10,784 |
30,000 |
23,763 |
FS |
13,351 |
0 |
5,328 |
5,136 |
18,679 |
5,136 |
GP |
6,791 |
21,866 |
33,129 |
25,117 |
39,920 |
46,983 |
KZN |
8,001 |
4,028 |
25,002 |
20,991 |
33,003 |
25,019 |
LP |
3,000 |
2,334 |
15,489 |
15,647 |
18,489 |
17,981 |
MP |
5,409 |
2,159 |
9,656 |
9,860 |
15,065 |
12,019 |
NC |
1,912 |
2,176 |
2,524 |
4,620 |
4,436 |
6,796 |
NW |
5,046 |
6,376 |
15,996 |
16,816 |
21,042 |
23,192 |
WC |
18,000 |
11,628 |
15,000 |
12,908 |
33,000 |
24,536 |
Total |
69,510 |
63,546 |
144,124 |
121,879 |
213,634 |
185,425 |
The SCOPA report had not been received by the Portfolio Committee during
the period of the drafting of this report. However, in the annual report tabled
by the Department, it was indicated that the issues pertaining to the SCOPA
report had already been dealt with.
7.1 The
State-of-the-Nation address
The 2010
State of the Nation Address highlighted the following key strategic objectives
that are pertinent to human settlements:[5]
·
Spending R846 billion on public infrastructure.
·
Upgrading well-located informal settlements and providing
proper service and land tenure to at least 400 000 households by 2014.
·
Setting up a guarantee fund of R1 billion to incentivise the
private banking and housing sector to develop new products to meet the housing
demand.
·
Implementing the Comprehensive Rural Development Programme.
7.2 The
Presidency: Department of Performance Monitoring and Evaluation (DPME)
The Community had an opportunity to interact with the DPME. The purpose
was to share the views and observations by the DPME on the performance of the
Department of Human Settlements, in particular, the progress made towards
achieving Outcome 8 targets. The Committee felt strongly that the session would
advance and enhance its oversight mandate.
The delegation from the DPME was lead by the Director General Dr S
Phillip (DG). The DG outlined the back ground of DPME and the informed the
committee that, it was established in April, 2010 by the President (Jacob Zuma)
and was mandated to perform the following:
·
Facilitate the development of plans
for the cross cutting priorities or outcomes of government and monitor and
evaluate the implementation of these plans
·
Monitor the management performance
of individual national and provincial government departments and
municipalities, in partnership with the Offices of the Premier, which will be
starting in November 2011
·
Monitor frontline service delivery
in partnership with the Offices of the Premier
·
Carry out evaluations
·
Promote good Monitoring and
Evaluation (M&E) practices in government.
·
Implement interventions to address
blockages in delivery, in partnership with delivery institutions.
Over a period of time DPME has developed a methodology to assess
performance of government departments, including provinces and municipalities.
Dr Phillip informed the Committee that the aim of outcomes approach is
to improve service delivery and comprises of the following outputs by:
·
Introducing whole-of-government
planning linked to key outcomes, clearly linking inputs and activities to
outputs and the outcomes.
·
Implementing the constitutional
imperative for co-operative governance by negotiating inter-departmental and
inter-governmental delivery agreements for the outcomes.
·
Increasing strategic focus of
government.
·
Making more efficient and effective
use of limited resources through introducing more systematic monitoring and
evaluation.
·
The outcomes based approach is not a
unique to South Africa, and DPME has
undertook international studies to a
number of countries, including the USA, Colombia, Chilli,etc. What these countries have in common is
similar or shared goals and, therefore, South Africa agreed to a limited set of
outcomes.
The DPME has developed a project management tool with traffic lights
code that gives an indication where there is .progress, as indicated below:
Sub
outputs which are on track and require
no major interventions |
|
Sub
outputs which are either proceeding slower than targeted or which face
impediments requiring intervention |
|
Sub
outputs which are either substantially behind timelines or which face
impediments which will require urgent intervention at the Ministerial or
Cabinet level |
|
Government identified 12 key priority areas that require particular
attention and improvement. However, this does not mean that other areas are not
of significant importance. He emphasized that Outcome 8 focuses on integrated
human settlements and improved quality of household life.
Delivery agreements
A Delivery Agreement is a charter between all the key
stakeholders who need to work together to achieve the outcome.
·
Delivery Agreements describe key
activities, sub-outputs, outputs, indicators, and targets, identify required
inputs and clarify roles and responsibilities of each key body which
contributes to the achievement of the outcome.
·
Performance Agreements between President
and other Ministers also requested them to work with the co-ordinating
Ministers on relevant delivery agreements.
The terms of reference should adequately reflect commitments made to
such delivery agreements. Quarterly progress reports are provided in order to
identify bottlenecks and subsequently come up with solutions. The process of
signing delivery agreements has been concluded in November 2010.
Overall progress of human
settlements against the outcomes is identified as follow:
Output 1:
Accelerated delivery of housing opportunities
·
Progress has been made with
exceeding the initially low target of 20 000 households to have access to basic
services and secure tenure. The targets are progressively higher over the outer
years.
However, these targets could be at
risk if provincial budgetary commitments are not made to match the higher
targets in the outer years.
·
Meeting the targets in 2014 would
also require direct management and dedicated technical support for provinces
and municipalities by the NDHS.
·
Furthermore, reaching planning/agreements on the funding
alignment (between Urban Settlement Development Grant and Human Settlement
Development Grant), and targets for informal settlement upgrading between
provinces and municipalities is critical.
There is also a need to align support for the upgrading of informal
settlements with municipal development plans.
·
The Department has met the targets
for the 2010/11 financial year. However, budgets have not yet been secured to
meet the 2014 targets for social housing, putting the 2014 targets at risk.
There needs to be policy and programme adjustments to bring the communal
residential units and institutional subsidy programmes under the Social Housing
Regulatory Authority’s ambit of responsibility.
This is necessary to ensure regulatory oversight.
·
The Department also needs to
complete a policy framework for private rental, including backyard rental
housing.
·
Furthermore, the Department has to
develop a clearer monitoring model to understand the contribution of the
private sector to the target rental market.
·
DPME is encouraged by the
Department’s process to establish a programme management unit and a rental
housing task team. This will draw all
the role players into a joint effort to achieve the overall target.
·
Given the accreditation of 8
municipalities in 2010/11 to level 2 as well as the recent assessment processes
carried out it is likely that the 2014 targets will be met.
·
However, the Department needs to
resolve issues related to human resources, systems (Housing Subsidy System) and
related budgets from provinces to municipalities in order to confidently allow
for the accreditation targets to be met.
Output 2:
Improved access to basic services
·
It needs
to be noted that the Department of Co-operative Governance is co-ordinating
these sub-outputs. Other line departments are, however, responsible for
implementing the programmes to realise the targets.
·
It appears
that good progress has been made against the targets set for 2014. However, the reported progress is against
particular departmental norms. Different departments are using different
definitions (norms and standards) to measure access to basic services. This
means that there may be different calculations of the extent of the backlogs
and the progress made to date.
·
A policy framework
setting out the density pre-conditions for land released especially in metros
and secondary cities still needs to be finalised by the Department. A monitoring mechanism to measure the density
performances has to be developed and put in place.
·
There is a
need for this to be addressed by the relevant departments. The Sustainable
Human Settlements and Basic Services Task Team that has met on more than one
occasion, but has had limited success in addressing these matters.
·
Accelerated infrastructure delivery
in priority areas will hopefully reshape the programme and activities of the
Sustainable Human Settlements and Basic Services Task Team. However, in order for this to occur, the
Joint Work Programme of the Task Team will have to be reviewed. The report requested by the South African
Human Rights Commission on the national state of sanitation will also assist in
determining a common baseline for the rolling out of sanitation programmes.
Output
3: Land assembly and effective
utilisation
·
While there has been
progress in identifying and acquiring properties, there is concern that the
Department of Public Works and other associated public land holding agencies
are not prioritising the processing of land identified with HDA speedily
enough. The Department should disaggregate the land acquired by provincial
departments into that acquired from public land holdings and that acquired from
private land holdings.
·
The current density
performances of well located BNG type mixed income projects will have to be
evaluated
·
There is furthermore a
need for the HDA to conclude technical support arrangements with provinces and
municipalities for the obtaining of land and the finalisation of the land
financing agreements amongst government departments.
·
Whilst
the DRLDR is responsible for preparing the legislation and regulations, a
policy position by the national Department of Human Settlements responding to
the new policy framework and regulations should be developed.
Output 4:
Improved affordable property market
·
Notwithstanding progress in the
development of the Mortgage Default Insurance (MDI) the DPMI is concerned that
the level of progress may not allow the 2014 target to be achieved.
·
Banks still have to agree that they will
use the programme to address the affordable housing finance challenges and the
administrative arrangements and schedules for the use of the instrument have to
be agreed upon.
·
Despite the progress in revising the
programme of Finance Linked Individual Subsidy (FLISP) programme, however the
programme still has to be launched.
·
Take up with the banks still has to
be negotiated and programme scheduling and administrative arrangements agreed
upon. In terms of policy formulation
regarding the introduction of a long term fixed interest rate: no progress has
been made.
·
Given the fact that, the policy will
not be concluded by 2014 this will impact negatively towards achieving the
target. DPME believes that, an early
policy review should be undertaken in anticipation of developing a fully
fledged instrument.
·
DPME informed the committee that,
initially they were concerned about performance based on the 2010/11 progress
reports. However significant progress in
the first quarter of 2011/12 indicates that the Development Finance
Institutions (DFIs) could be on target to realise the 2014 targets.
·
DPME believes that the DFI’s
recapitalisation into a single entity and identifying the stronger programmes
should afford further sector impetus and will support a concerted engagement
with the banks. The role of the DFI’s in providing support to provinces and
municipalities to frame and package integrated projects should be strengthened.
·
With regards to construction finance
loans issued for the construction of 6686 of affordable housing by 2014, the
recent recapitalisation
process has resulted in a significant progress particularly in the 1st
quarter of 2011.
·
However, care should be taken with
the DFI rationalisation to ensure that it does not disrupt this programme.
With regards to housing finance opportunities contributed by sector
stakeholder, very little progress has been reported and requires increased
effort for banks to make funds available to the affordable market. Moreover,
the DPME further raised the following concerns:
o
The Department is not adequately
monitoring and reporting the progress of banks making loan finance available in
the affordable housing market.
o
The process of rationalising the
Development Finance Institutions’ (DFIs) needs to include a focus on putting in
place arrangements to enable private sector participation.
o
The national Department of Human
Settlements should use the Home Loan and
Mortgage Disclosure Act as well as existing reports of financial institutions
to come to grips with the current trading performances in the gap market.
o
Engagement with public, private,
social, community and labour stakeholders should be arranged to occur in
parallel to the ongoing process to rationalise the DFIs.
o
A more direct engagement with the
Private Finance Sector regarding the affordable housing targets may need to be
asserted.
o
This sub-output is important as all the other initiatives of output 4 still
leaves up to 41% of the target to
deliver 600 000 housing finance opportunities unresolved.
Drawing
on the NPC’s Material Conditions Diagnostic for a Sustainable Human Settlement
Vision
·
A network of matured well established cities is
positive for a redirected human settlements programmatic approach.
·
However our cities and towns are spatially inefficient
and unequal and there is inertia in
spatial form:
o
Costs of inefficiency on economy and households
(>20% of household expenditure).
·
Migration patterns are complex making planning for
human settlement development challenging.
·
Urban informal settlements are the primary locations
for where the urban and rural meet. Because they will continue play this
role we need to focus on the
management and upgrading of these settlements.
·
New entrants into cities in the pursuit of work
opportunities often require other housing support options i.e. rental
programmes.
·
At the lower end there is still a total reliance on
the subsidy programme.
·
The policy shift towards a sustainable human
settlement approach needs to be complemented by more detailed work on costs, institutional
capacities, and funding arrangements.
This then has to be developed into appropriate support programmes.
7.3 The
Financial and Fiscal Commission (FFC)
Mr B Khumalo, Acting Chairperson of the Commission, led the delegation
and outlined the presentation. He
informed the Committee that the FFC specific focus on Department of Human
Settlements strategic plan, look at the achievements and expenditure
outcomes. The FFC also drew the
attention of the Committee to the progress and recommendation made.
The FFC reported on selected strategic objectives for 2010/11 of the
Department. It was indicated that a
target of 220 000 housing units per annum will be delivered. It was reported that the actual delivery was
not specified by the Department in its annual report, but a total of 121 879
completed houses are reported on the Department’s website.
Selected strategic objectives in the
3rd quarter for 2010/11
Target |
Actual delivery |
220 000 Housing units per annum |
Not specified in the annual report 121 879 housing completed (DHS website) |
Facilitate 80 000 affordable social and rental units (over 2010/11
MTEF(target not specified per annum) |
It is difficult to ascertain the progress under this objective as the
Department does not differentiate between units under construction, completed
and handed over to beneficiaries |
Access to basic service ·
Roll out Free Basic Sanitation Strategy (FBSS)
to 30% municipalities
|
|
·
With regard to Human Settlements Development Grant –
an overall high level of aggregate expenditure (98, 6%) of total adjusted
budget. But in the in-year reallocation
of funds away from Free State (less 263 000 or 20%), KwaZulu Natal (less R80
000 or 2.9%) and North West (less R100 000 OR 7.8%) of voted allocation.
·
Material under-spending of the Rural Household
Infrastructure Grant – the grant underspent by R38 million or 38.4% of total
allocation.
·
The Department violated DORA – the accounting Officer
did not complete and submit to the National Treasury the compliance certificate
as required by S10(1)(a) of DORA 2010 by 15 April 2011, in respect of the Rural
Household Infrastructure Grant.
7.3.1 Progress on past FFC
recommendations
·
The FFC’s previous work has revealed that the current
institutional arrangements, funding and some of the policy issues relating to
the delivery of housing have to be reviewed.
FFC has made a number of recommendations pertaining to policy
(especially the accreditation of municipalities based on their capacities to
administer housing programme), funding and institutional issues over the past
years).
·
The FFC felt that the process of accreditation is very
slow and to date not a single municipality has been accredited with level
3. Only six metros have been given level
2 accreditation. The number of municipalities
accredited in 2010/11 remains at 18, same number as in 2009/10 financial
year.
·
On Social and Rental housing the FFC recommended
relaxation and flexibility on eligibility criteria for accessing Social Housing
Restructuring Conditional Grant to allow projects falling outside the zone to
access funding; number of Designated Restructuring Zone (DRZ) to excess demand
for rental housing and minimum unit size for redevelopment of existing
building. A progress has only been made
with respect to increasing number of DRZs as according to the annual report
there is 75 DRZs in total. Consideration
should be given to link new housing subsidies with MIG and LES formula to
ensure that LES allocation keep pace with the installation of new housing
infrastructure among other things.
7.3.2 FFC’s
recommendations for 2012/13 and the impact of inefficient land use
·
In its Annual Submission for the
2012/13 DORA, the FFC highlighted a number of issues on inefficient land-use
and the current funding for built environment which is unco-ordinated and not
supporting the delivery of integrated and sustainable human settlements. The FFC
stated that land use is key to addressing some of the challenges
indicated by the NDoHS (that the housing subsidy programme has continued to
entrench segregated spatial patterns, marginalising the poor from economic
opportunities).
·
On the issue of comparison between
the Compact City and the Sprawling City, the FFC highlighted that City
Efficiency Costing Model has shown that a sprawling city is more costly than a
compact city and that:
o
Costs savings in a compact relative
to sprawling city amount to 7% after 10 years.
o
If this is extrapolated to 6 metros,
saving amounts to approximately 1.4% of GDP by year 10.
o
There are significant energy savings
in a compact city compared to a sprawling urban form.
o
Carbon emissions are 22% less carbon
resulting from more efficient public transport and less travelling.
The FFC
stated that government should actively and specifically pursue development of a
more spatially compact urban form for cities, by developing and adopting
appropriate policies and financing instruments and specific fiscal
instruments include:
·
Wider use of development charges in financing infrastructure
associated with the land development process.
·
Public transport subsidies that specifically target high
density low-income areas.
·
Fiscal incentives for urban land development projects
located within the existing urban form.
·
Fiscal incentives to promote
densification and in-fill development.
It was
further stated that government should also conduct a broad-based review of the
efficacy of current housing finance arrangements in meeting housing needs
within the context of creating sustainable and more compact human settlements.
7.3.3 FFC’s issues for future
consideration:
·
Built Environment related grants
have an urban focus and ignore rural
challenges and setting:
o
Little infrastructure delivery
taking place in rural areas
o
Limited capacity to deliver in rural
areas and interventions are not appropriately targeted.
·
There is a lack of information on
the performance (non-financial data) of Rural Household Infrastructure Grant.
·
Reporting format makes it difficult to understand the
actual delivery in some instances as for example units completed and under
construction are combined (CRU and SH)
·
The overall spending of the department is 98.8%,
however, there is a concern that some programmes (housing policy, research
& monitoring, and strategic relations & governance) underspent by 25%
and 40% respectively.
7.4
Auditor-General’s Report
The
Department of Human Settlements received an unqualified audit opinion for the
2010/11 financial year. However, the
following emphasis of matter has been raised:
·
Claims against the
Department
The AG flagged the issue of lawsuits that were brought
against the department and the budget that is stated as a contingency liability
for the value of R4.9 million.[6]
·
Irregular expenditure
The Department incurred irregular expenditure of R12.1
million, which was in contravention of the PFMA, Treasury regulations relating
to supply chain management and Public Service Regulations.[7]
·
Material under-spending
of the Rural Household Infrastructure grant
The Department has materially underspent the budget on
programme 4, sub-programme – Rural Infrastructure Development to the amount of
R38 million of a total allocation of R100 million. As a consequence, the
Department failed to achieve some of its objectives of providing sanitation
services to rural communities.[8]
Compliance with laws and regulations
·
Annual financial
statements, performance and annual reports
The accounting officer submitted financial statements for
auditing that were not prepared in all material aspects in accordance with
generally recognised accounting framework prescribed by the National Treasury,
as required by sections 40(1)(a) and (b) of the PFMA.[9]
·
Expenditure management
(i)
The Accounting Officer did not take effective steps to
prevent irregular expenditure, as per the requirements of section 38(1)(c)(ii)
of the PFMA AND TR9.1.1.
(ii)
The evaluation criteria and system to be used in awarding
preference points for the procurement were not specified in the bidding
documents, nor did it specify the maximum points to be awarded for Historically
Disadvantaged Individuals |(HDI) as required by section 7 of the Preferential
Procurement Policy Framework (No.5 of 2000).
(iii)
The payments due to creditors were not always settled within
30 days from receipt of an invoice as per the requirements of section 38(1)(f)
of the PFMA and Treasury Regulations (TR) 8.2.3.[10]
·
Procurement and contract
management
Invitations for competitive bidding were not advertised for
a minimum period of 21 days as per the requirements of TR 16A6.3(c).[11]
·
Transfer of funds and/or
conditional grants
The accounting officer did not complete and submit to the
National Treasury, the compliance certificate as required by Section 10(1)(a)
of Division of Revenue Act, (No 1 of 2010) (DoRA) by 15 April 2011, in respect
of the Rural Household Infrastructure grant.[12]
Predetermined objectives
·
Usefulness of information
The AG indicated that the reported information was deficient
in respect of the following criteria:
(i)
Measurability – The targets are not
measurable.
For the selected indicators, 29% of the planned and reported
targets were not measurable in identifying the required performance.
(ii)
Reliability of
information - The reported performance information did not occur and does not
pertain to the entity.
Sufficient appropriate evidence to support the reasons for
mayor variances between the planned and the actual reported targets could not
be obtained; therefore 40% of the reasons for mayor variances could not be
verified. For 48% of the selected material reported targets the source
information or evidence provided was not valid.
Internal control
·
Leadership
The Accounting Officer did not exercise oversight
responsibility regarding financial and performance reporting and compliance
with laws and regulations related to internal controls.
·
Financial and performance
management
o
Management did not prepare regular, accurate and complete
financial and performance reports that are supported and evidenced by reliable
information.
o
Management did not review and monitor compliance laws and
regulations.
The objective of the oversight activities was to oversee
compliance/adherence to human settlements legislation, policies and
implementation of service delivery programmes and projects. Furthermore, objective
was to ascertain any challenges in the implementation of such policy,
legislative aspects, as well assessing the impact on changing the people’s
lives. The oversight activities were also aimed at providing advice where
necessary.
In order
to give effect to above-mentioned objective, the delegation held briefing
sessions with the national Department, respective provincial Departments and
municipalities, including other stakeholders.
The focus was on the roll out and implementation of the Human
Settlements strategic plans, projects, programmes and on conducting site
visits.
8.1 Oversight visit to KwaZulu-Natal
Province
The Portfolio Committee on Human Settlements undertook an oversight
visit to the
KwaZulu-Natal province during the second term of the Parliamentary Programme
from 27 February to 4 March 2011.
8.1.1 Observations made by the
delegation
1. There is no
adherence to IGR (lack of synergy) and co-operative governance. The delegation
was able to bring in people from various levels in the province, that is,
provincial and municipalities. This made the oversight visit very easy and
manageable because all parties had an opportunity to have a common
understanding and observe what is actually happening on the ground.
2. No new
projects that were reported. In almost all the areas the delegation had
visited, most of the projects were due for rectification.
3. Proper co-ordination
between the districts and local municipality remained a challenge.
4. The report
on the current response to post-disasters in the province has not been able to
convince the delegation that the municipalities were capable of responding to
disasters. The province did not provide a detailed report reflecting the areas,
number of people affected and those that have been supported.
5. The Cornubia
development is still not clear; the inclusion of other stakeholders’ role is
not defined.
6. The
relocation of families occurred from one site to the other and people were left
for many years before their housing needs could be attended to.
7. The
Department did not work closely with the deeds registry.
8. Transit
camps are made of corrugated iron sheets, and the time frame of 18 months was
adhered to.
9. Lack of
skilled and adequate personnel, particularly technical employees
10. Some
municipalities are not accredited but continue to appoint contractors to build
houses.
11. Engineers were
signing geotechnical reports, despite not being registered with the national
engineering boards.
12. Municipalities
do not clearly distinguish in their reports as to how much was allocated to a
particular project and how much money was left before the project could be
completed.
13. The use of
consultants delayed progress, for instance the municipality would report that
there is a scarcity of water but during the delegation’s site visits, it would
find that water is indeed available. Instead, what was required is a creative
effort in developing concrete plans and programmes to source the water.
14. Sub-standard
material is used to construct houses.
15. There is a
tendency by some of the farmers to destroy the graves of farm workers’
relatives, especially in Kokstad.
16. The
delegation observed a dispute amongst community members on the occupancy of the
units in Imbali 1 – ward 19. There was
an allegation of selling of such units by councillors – which units were in a dilapidated
state.
8.1.2 Recommendations
The Committee recommended the
following:
Recommendations to the Minister of
Humans Settlements
Recommendations to the Minister of
Rural Development and Land Reform
·
The Minister should urgently intervene in the conflict
between farm workers/dwellers and farmers in relation to the destruction of
their ancestral graves in Kokstad.
Recommendations to the Department of
Human Settlements
8.2 Oversight visit to Mpumalanga
The Portfolio Committee undertook an oversight visit to the Mpumalanga
Province from 24 to 30 July 2011 and the following observations as well as the
recommendations were highlighted:
8.2.1 Observations of the Committee
in Mpumalanga
1.
The province still faces a huge housing backlog. However,
the delegation observed that it is difficult for the province to quantify its
backlog.
2.
Lack of bulk infrastructure: as a consequence houses were
constructed with no basic infrastructure in a number of projects.
3.
Inadequate planning: projects were being approved on land
without having conducted any proper geotechnical studies. For example, in Thaba
Chweu, it was discovered that land on which a project had been approved was
dolomitic.
4.
Invisibility of the National Home Builders’ Registration
Council, as well as the Housing Development Agency.
5.
Lack of dedicated policy to regulate the roll-out of the
sanitation programme, including a lack of commitment from both the national and
provincial Departments to fast track and upscale sanitation programmes.
6.
No evidence-based report to quantify the provision of
sanitation services in the province.
7.
Lack of monitoring of contractors, resulting in incomplete
housing structures, non-compliance with regulations and project management
capacity thus compromising quality.
8.
Disaster-affected areas were not prioritised – in
Bushbuckridge Municipality bridges that were washed away following heavy rains
were not rebuilt. As a consequence school children were struggling to get to
schools in the affected areas.
9.
Inadequate capacity within some of the municipalities: provincial
inspectors were accused of not doing enough to assist municipalities.
10. Shoddy workmanship on
houses and toilets which remain unused due to poor quality.
11. Non-availability of a
quantifiable report on state-owned land or private land in the province.
12. There are still people
residing in houses that contain asbestos roofing. No arrangements had been made
to re-house people with asbestos–free houses.
13. The role of the private
sector was not clarified.
14. The delegation visited
the Graskop project in Thaba Chewu municipality which is the result of a
partnership between South Africa and the People’s Republic of China.
15. The delegation observed
that at Simile flats in Thaba Chewu municipality the wall separating the toilet
from the rest of the dwellings had collapsed, which served as a health hazard
since occupants had to climb over the debris.
16. The delegation further
observed that in Thaba Chewu municipality a very old and uninhabitable hostel
is occupied by people despite the safety risks it poses. Furthermore, the
delegation determined that this building has not been transferred to the
Department of Public Works post 1994 (it legally still remains under the previous
regime).
17. The delegation was
informed by the municipality that in Pilgrims Rest, a primary school still
utilises the bucket system.
18. Two bridges were swept
away during a disaster in ward 29, Bushbuckridge municipality and in eSandleni,
Albert Luthuli municipality. This resulted in local children being unable to attend
school.
19. During the same
disasters, the roof of a school in eSandleni, Albert Luthuli
municipality was blown away.
20.
In Thaba Chewu, about 200 beneficiaries were approved
and later discovered that the land where the project was to be developed is
dolomitic.
8.2.2 Recommendations
To Parliament
1. The
Mpumalanga based-members of the Committee together with municipalities and
members of provincial committee in the legislature should conduct an evidence-based
approach site visit to verify 513 completed sanitation project units in Nkomazi
and report to Parliament by January 2012.
To the Minister of Human Settlements
It is recommended that the Minister of Human Settlements:
To the Minister of Public Works
The Minister is requested to intervene urgently on the following:
1.
Disaster-affected bridges in Thulamashe at
Bushbuckridge Municipality (Ward 29, Kumane and Wisane villages) which were
washed away by heavy rains.
2.
Disaster-affected bridge in eSandleni at Albert
Luthuli Municipality
3.
Assist in transferring the dilapidating Graskop hostel
from the previous government (pre 1994) to the Department of Human Settlements
as it posed a huge risk and hazard to the hostel dwellers in an endeavor to
intervene and facilitate the redevelopment/upgrading as per the Department of
Human Settlements’ Community Residential Units policy.
To the Minister of Basic Education
To the national Department of Human
Settlements
1. The
national Department should assist the province and the municipality in
providing temporary relocation units for residents of Simile as a matter of
urgency.
To the Mpumalanga province
1. Asbestos
roofing should be eradicated and replaced with a proper roofing system as this
is a health hazard to communities (Nkangala District Municipality).
2. A full,
detailed report on land purchased (R95 million spent in 2008) by the province,
how much land has been utilised by each benefiting structure i.e. the
municipalities and Social Housing Association, the extent of the land purchased
for Mbombela, when and in which specific areas should be provided to the
Committee
3. The province
should ensure the provision of adequate qualitative and sustainable sanitation
infrastructure to communities and expand the capacity to roll out and
accelerate sanitation programmes. It is also recommended that greater priority
should be given to Amsterdam, Dipaleseng, and Mkhondo municipalities. The
province should urgently communicate with the municipality and ensure that the
residents of Rooikopan are connected to a sewer system.
4. A list of
all villages that benefited from the provision of sanitation managed through
the Department of Human Settlements during the 2010/11 financial year in
Nkomazi Municipality should be provided to the Committee. The report should be forwarded to the
Committee within a month after the receipt of this report.
5. The province
should provide the names of places where farm worker assistance projects would
be constructed.
6. Detailed
information on how Burn Stone Mine has assisted in building of houses should be
provided, including the number of houses and contributions in respect of each house.
7. The
provinces should provide a detailed list of job opportunities created through
housing delivery in the province, its impact on communities and the types of
skills transferred.
8. Public
participation with the communities and in particular with the traditional
leaders should be strengthened.
9. More housing
inspectors should be appointed as the shortage of such capacity comprises the
quality of houses delivered.
10. A list of
the projects to be unblocked with plans to unblocked them should be provided.
11. A list of
informal settlements which would include clear plans and programme on how these
would be upgraded or eradicated should be provided.
12. The province
should provide the report on how the deregistration of beneficiaries was done
when the beneficiaries could not be found or had died before the allocation of
a house.
13. A detailed
report and role of the Mpumalanga Housing Finance Corporation should be
provided to the Committee.
14. A written
response on how much was spent in addressing disaster-affected areas should be
provided.
8.3 Oversight visit to the Free
State province
The
Portfolio Committees on Human Settlements and on Cooperative Governance and
Traditional Affairs undertook a joint oversight visit to Free State Province on
15 and 16 September 2011 in preparation for the People’s Assembly.
8.3.1 Delegations’ observations
Observations by Committee
The Committee observed that the Free
State significantly underspent on the 2010/2011 allocation and tried to recover
from this towards the end of the financial year by purchasing an excessive
amount of building materials. The Committee further noted that not only was
this purchase not provided for in the 2010/2011 business plan (and thus not
approved), but during a Special Technical Minmec sitting, Free State was warned
that such a purchase would contravene the conditions of the grant.
Accordingly, funds that were not yet
transferred for the 2010/2011 financial year were stopped by the national
Department of Human Settlements in consultation with the National Treasury and
reallocated in accordance with the provisions of the 2010 Division of Revenue Act.
It was furthermore noted that funds
transferred based on the 2011/2012 allocation were again not used in terms of
the approved business plan, but were used to pay outstanding invoices of
2010/2011.
The
Committee therefore makes the following findings:
1.
Section 10 of the 2010 DORA requires that a business plan of
the province setting out how the allocation will be utilised, must be approved
prior to the start of the financial year.
2.
Section 12 of the Act requires monthly reports on
expenditure and challenges experienced, as well as quarterly and annual
performance evaluations.
3.
Section 15 of the Act stipulates that an allocation may only
be used for the purpose stipulated in the payment schedule approved by National
Treasury.
4.
Section 33(2) of the Act provides that any spending in
contravention of the Act, or a framework
published under the said Act, constitutes irregular expenditure in terms of the
Public Finance Management Act, 1999 (Act No. 1 of 1999) (“PFMA”).
5.
Section 17(4)(a) of the 2010 DORA provides that the Minister
may approve that the stopped allocation or a part thereof may be used to meet
the Province’s outstanding contractual financial commitments. The Act defines
‘the Minister’ as the Minister of Finance.
8.3.2 Recommendations
To Parliament
1.
The Committee requests that Parliament (Honourable Speaker)
communicates the above state of affairs with respect to the Free State province
to the Provincial Legislature, in an endeavour to draw the attention to and
address issues of compliance.
2.
The Portfolio Committee on Human Settlements in compliance
with the Money Bills Amendment Procedure and Related Matters Act, 2009, should
confer with the Standing Committees on Finance and Appropriations as to the
remedies available to Parliament directly, such as the Act itself. This process can be used to address moneys
allocated to the provincial Department through the Human Settlements
Development Grant as well as to ensure that the national Department exercises
more effective controls over moneys transferred to the provincial Departments.
To the Minister of Finance
The
Minister should brief the Committee on:
1.
Whether the Free State province obtained authorisation from
the National Treasury to utilise the Human Settlements Development Grant as
approved according to section 10 of the 2010 DORA to purchase building
materials in 2010/11.
2.
Whether the Free State province obtained authorisation from
the National Treasury to utilise 2011/12 transfers to settle 2010/11
outstanding invoices in terms of section 17(4)(a) of the 2010 DORA.
To the Minister of Human Settlements
1. The
Minister of Human Settlements should commission the Auditor-General to
investigate whether any irregular expenditure and misappropriation was incurred
in respect to the Human Settlements Development Grant by the Free State
province to purchase R343 million of building material in 2010/11.
To
the national Department of Human Settlements
1.
The Department should urgently investigate the
roll-out of the water-based, chemical-free toilets that can be used where there
was no sewer infrastructure, particularly in rural areas.
To the Free State
province
1. The provincial Department of Human Settlements should assist in
the challenges pertaining to the North West Housing Corporation. The houses belonging to the Corporation
should either be transferred to its occupants or to the municipality.
2.
The provincial Department should take
steps to mitigate an expectation by future beneficiaries to receive 56m² houses
when this laudable delivery is no longer possible when the available serviced
stands have all been used. The provincial Department
should stick to norms and standards as stipulated in the Housing Code as it
perpetuates differences between the communities in the province and other
provinces as well.
3.
Facilitate provision of high mast lights in informal
settlements such as Khotsong, Bloemside phase 9 and 10 and Botshabelo Ext 1 that
need to have such lights.
4.
Facilitate the building of recreation centres for the youth
to be kept busy and develop youth programmes.
5.
Facilitate the provision of a satellite police station in
Brandfort.
6.
Facilitate the upgrading of a clinic in Brandfort with the
Department of Health.
8.4
The
Millennium Development Goals[13]
In September 2000, the world’s leaders met in New York to set out a new global
vision to strengthen efforts for peace, human rights, democracy, strong
governance, environmental sustainability and poverty eradication. South Africa,
together with 188 other UN member countries, adopted the resulting Millennium
Declaration, which committed signatories to ambitious targets with clearly
defined deadlines. The roadmap for achieving the Declaration’s commitments
resulted in the Millennium Development Goals (MDGs), consisting of eight goals,
21 indicators and 60 official targets to be achieved by 2015.
Goal 7 of the MDGs
“Ensuring environmental sustainability” has specific relevance for human settlements
and is given effect through the following targets:
·
Target 7C:
Halve, by 2015, the proportion of people without sustainable access to safe
drinking water and basic sanitation.
·
Target 7D improving the lives of at least 100 million slum
dwellers.
Government has
adopted 12 Outcomes as its key focus of work by 2014. Each Outcome has a set
number of measurable outputs with targets. Outcome 8 aims to provide
Sustainable Human Settlements and improved quality of household life. Under Outcome 8, the target is to increase
the provision of basic services by the year 2014, including increasing access
to sanitation from 69% to 100%.[14] In terms of the Department’s Strategic Plan,
the aim is to achieve the eradication of sanitation backlogs by 2014, one year
prior to the target specified by MDG 7.
Sustainable human settlements and improved quality of household life are
defined by:
·
Access to adequate accommodation
that is suitable, relevant, appropriately located, affordable and fiscally sustainable.
·
Access to basic services (water,
sanitation, refuse removal and electricity).
·
Security of tenure irrespective of
ownership or rental, formal or informal structures.
·
Access to social services and
economic opportunity within reasonable distance.
Outcome
8 is of critical importance for various reasons. Firstly, it is a requirement
of the Constitution and the Bill of Rights. Secondly, it is core to human
dignity and social stability and is a key enabler of health, education and
social cohesion outcomes. Lastly, with good planning, it can also serve as a
catalyst for economic development and job creation. Ultimately, the outcomes of the national
effort around human settlements must be seen in the context of social
development and transformation as well as meeting the objectives of rolling
back under-development.
8.4.1
Issues for consideration
1.
The delay by the Department to develop a framework for
procurement processes and management of the sanitation programme adversely
affected the delivery of sanitation and may lead to potential fraud and
corruption in the administration of procurement systems.
2.
Delays in the development or integration of policies and
systems to manage the RHIP resulted in the programme not being implemented more
than a year after the announcement by the President in 2009.
3.
The capacity of the Department to deliver on the service
level agreement signed with the municipalities is questionable.
4.
Service providers citing the inaccessibility of some
areas/communities as the cause of their failure to deliver services raised a
serious concern with the Committee, as it undermines citizens’ constitutional
right to basic services.
5.
The appointment of a service provider that does not have
sufficient experience in implementing sanitation projects has also been a
serious concern.
6.
Unavailability of a risk management plan to address the
issue of unexpected rainfall challenges.
7.
The lack of a clear quality assurance strategy to monitor
project implementation.
8.
Under-expenditure is a possible indication of capacity
constraints resulting in poor service delivery.
9.
Alarming high projections revealed at the performance and
expenditure at the end of the financial year was questionable.
10.
Provision of advance payment to service providers without
proper precautions (risk management plan) posed a serious challenge in
acceleration of MDGs.
11.
The Committee is of the view that unless the pace of service
delivery is accelerated, the MDG target of eradicating poverty and providing
proper sanitation may not be realised.
8.5 Recommendations
8.5.1 Overall recommendations to the
Department of Human Settlements
1.
Collaborative planning between the Department of Human
Settlements and other sectors dealing with water, waste management, energy and
education, for more effective and efficient utilisation of resources should be
enhanced.
2.
Provision of advance payments to service providers without
proper precautionary measures and proper consultations with the National
Treasury posed serious challenges on the acceleration of sanitation. Therefore, this issue requires serious
consideration.
3.
Monitoring and evaluation mechanisms should be
strengthened; furthermore, an advanced and enforcement framework should be
developed.
4.
Capacity building – employees should be well trained to
function properly and external capacity should be exploited such as the Development
Bank of Southern Africa and the Public Administration Leadership and Management
Academy.
5.
A review of the White Paper on Basic Household Sanitation
and promotion of health and hygiene should be fast-tracked.
6.
The National Sanitation Task Team should be revived.
7.
A 5-year sanitation strategy and Rural Policy on Hand-Wash
should be drafted.
8.
A comprehensive and effective communication strategy should
be developed as it would foster effective participation and promote space for
engagement of citizens and all role players.
9.
Sanitation planners should be encouraged to use innovative
and creative methodologies for delivery of sanitation services to communities.
Further, such methodologies should be monitored and their impact evaluated on a
regular basis.
10.
Equity, equality and sustainability should be critical
elements in the implementation of a sanitation programme.
11.
National and international sanitation “days”, such as Global
Hand Wash and Hygiene days should be marketed and observed on an annual basis.
12.
The national Department of Human Settlements should co-ordinate
the drafting of a progress report on the eThekwini commitments and submit it to the African Ministers Council on Water (AMCOW)
before 19 August 2011.
13.
The Department should upscale the sanitation
delivery process. Therefore, expansion of the delivery capacity by appointing
more service providers to roll out the programme for the benefit of ensuring
accelerated provision of sanitation services is required.
14.
The Department should urgently attend to
communities where sanitation services remain a challenge.
15.
Provinces raised concerns on certain policy issues which
required urgent attention.
16.
The Department should disaggregate per province the
target of ensuring proper services and security of tenure for 400 000
households by 2014. This would assist the Committee in enhancing its oversight
function in respect of meeting the targets of Outcome 8, as well as progress
towards achieving the MDGs.
17.
A common definition of the bucket system should be developed
to ensure that all stakeholders have a shared understanding of the issue. The
Department should ensure that affordable rental products are incorporated into
the policy.
18.
The Department should prioritise the drafting of a policy on
hostel re-development.
19.
The Department should develop a strategy to encourage
provinces to utilise the services of the HDA to address the availability of
land issue, which has been identified as a universal challenge.
20.
The Department to provide appropriate TRs rather than
corrugated iron facilities as they are a health hazard to the lives of the
people.
21. While
it is acknowledged that the Department cannot necessarily be strictly subjected
to the normal 25% threshold, it should take all available measures to avoid the
late transfer of funds, which often has an overarching effect on the whole of Government.
22. The
Department should ensure that all transfers take place as required and that
receiving institutions are supported and monitored and progress reports are
submitted to the Committee on a quarterly basis.
1. The
Committee faced a challenge in finalising its BRRR report within the time frame
allocated to this process due to insufficient time.
2.
The Department’s overall expenditure of 98% in some
instances masks significant under-expenditure in some of its main programmes
(such as Housing Policy, Research & Monitoring, and Strategic Relations
& Governance under-spending by 25% and 40% respectively).
3. The Committee
acknowledges that relevant stakeholders have shared similar experiences and
observations on a number of issues raised, e.g. DPME, FFC and AG, etc.
4. The
information reported in the annual report makes it difficult to assess the
actual delivery of completed units and those that are still in foundation
phases.
5.
Lack of performance information provided on
RHIP. Material under expenditure on the Rural Household Infrastructure Grant
(RHIG) resulted in inadequate service delivery to poor rural communities.
6. There are
discrepancies between planned (as recorded in strategic and performance plans)
and actual performance, as well as funding appropriated by Parliament for
specific purposes.
7. No dedicated
policy and legislation on housing co-operatives, as well as the policy
provision housing to backyard dwellers.
8. Issues
raised in the Auditor-General’s report are a matter of critical concern to the Committee
as some may be detrimental to service delivery.
9. The
discontinuation of key performance areas in a number of instances is a result
of non-approval by the accounting officer and targets could not be met.
10. Quite often
a number of roll-overs, virements and adjustments have been made, however
expected targets were not achieved, subsequently resulting in under expenditure
in some programmes.
11. While
appreciating the DPME’s work, the Committee is concerned that the DPME only
relies on the information provided by the Department and does not conduct
on-site monitoring and evaluation.
12. The
appointment of a service provider for RHIP, which is currently also serving
approximately 18 government departments, poses a serious risk to the
achievement of targets. Moreover, only two service providers were appointed to
implement a programme to the value of R1.2 million over a three-year period.
13. The quality
of some housing units, as well as sanitation facilities delivered to date, is a
serious concern to the Committee.
14. While it is
acknowledged that significant progress has been made with the rollout of
sanitation services, the Committee is very concerned about quality, equity and
sustainability aspects related to sanitation.
Respective departments are using different definitions
(norms and standards) to measure access to basic services. This means that
there may be different calculations of the extent of the backlogs and progress
made to date. The Committee therefore fully supports the call for
the SAHRC to conduct a national audit of sanitation facilities rolled out to
date.
15. Community
participation in the development of human settlements remains a serious
concern.
16. Delays in the
appointment of service providers to maintain and render necessary support to
provinces in management of Housing Subsidy System (HSS) is also a concern.
17. The costs
associated with the non-filling of vacancies are a serious concern as it
hampers service delivery.
18. The
Department administers transfers to receiving institutions (such as provincial
departments, municipalities and other agencies involved in the provision of
integrated human settlements), which are subject to performance and compliance
by receiving institutions and often have time implications. However, the
Department has an obligation to ensure that all transfers take place as
required and that receiving institutions are supported and monitored.
19.
In some instances the lack of alignment of
provincial outputs with national policy priorities has a detrimental impact on
achieving national outputs and outcomes, for example the rectification
programme, the farm worker programme, People’s Housing Process (PHP), budgeting
for blocked projects, etc.
20.
There is a lack of capacity and expertise at
provincial level for project management to ensure effective utilisation of
available resource within current priority programmes projects.
21.
Meeting the 2014 target of ensuring proper services
and security of tenure for 400 000 households requires that agreement be
reached on the funding alignment (between Urban Settlement Development Grant
and Human Settlement Development Grant), as well as targets for informal
settlement upgrading between provinces and municipalities.
22.
The non-finalisation of the national Department of
Human Settlements Turnaround Strategy resulted in a number of vacancies not
being filled, and alignment of departmental structure and revision of the
Information Communication Technology System (ICTs) not being approved – ultimately it resulted in under expenditure
in some programmes.
23.
A number of outputs under Programme 2: Housing
Policy Research & Monitoring, could reportedly not be completed due to a lack
of funding and was subsequently
discontinued by the Department. However, this programme still managed to
underspend 25% of its budget.
24.
By the end of the first quarter of the 2011/12
financial year, funds have yet to be transferred to some of the entities.
25.
As was the case the previous year, the
Auditor-General again highlighted the fact that the Department’s indicators are
not measurable and in some instances performance variances could not be
verified.
26. While to date 33 000 hectares of land has been identified compared
to a target of 6 500 hectares by 2014, the holding agencies are not prioritising the processing of land identified
with the HDA as speedily as required.
27. Progress has been made with respect to meeting the 2014 target of
ensuring an improved affordable housing market such as the development of a Mortgage
Default Insurance and a review of the Finance Linked Individual Subsidy
Programme (FLISP). However, further engagement is required with the banking
sector and there is a risk that the target may not be met by 2014, and the need
to fast-track appointment of a board for HLAMDA.
28. The accreditation of municipalities has been slow to date, with not a
single municipality awarded level 3 accreditation – currently six metros have
level 2 accreditation.
29.
Inefficient land use patterns evident through urban
sprawl and the segregated spatial patterns (the poor accommodated on the
fringes far from economic opportunities and adequate public transport
infrastructure) impact negatively on achieving social cohesion, as well as on
reducing carbon emissions and energy usage.
30.
Enrolment of projects with the NHBRC is still
inadequate and the entity reported that a total of 49 929 subsidy homes were
enrolled in 2010/11 against a target of 94 000.
31.
The NHBRC took a decision to outsource its internal
audit function – this decision will be pursued by the Committee in future
engagements with the entity.
32.
The Auditor-General emphasised areas related to
expenditure management, as well as procurement and contract management for the
Department, which constituted deviations from relevant frameworks. These
matters will require close monitoring by Parliament in future engagements with
the Department.
10. Recommendations
1.
Overall
recommendations pertaining to the Annual Report 2010/11
To Parliament
1. To ensure effective and
efficient engagement with the BRRR process, Parliament should consider
expanding the current time frame for processing of BRR reports through
reviewing relevant legislation in this regard.
2.
The Committee requests that Parliament (Honourable Speaker)
communicates the above state of affairs with respect to the Free State province
to the Provincial Legislature in an endeavour to draw the attention and address
issues of compliance.
To the Minister of Human Settlements
1. The Minister
should brief the Committee on curative measures and plans to remedy issues
raised by the Auditor-General in his 2010/11 report by 2 November 2011.
2. The
Minister should provide the Committee with a report from the Auditor-General in
respect of the Free State Department’s grant expenditure as well as the
validity of the expenditure incurred in the last months of the 2010/2011
financial year.
3. If
the Auditor-General has already provided this report to the Minister in the
normal course of duties, the Portfolio Committee requests a briefing on the
above.
4. The
Minister should brief the Committee on progress on the above-mentioned matter by
January 2012.
5. The
Minister should brief the Committee on the national Department’s monitoring of
the Free State in respect of 2011/12 grant funds by 2 November 2011.
6. The
Minister should brief the Committee on the Auditor-General’s report for 2010/11
and curative measures planned to address matters of emphasis by 2 November 2011.
To the Minister of Finance
1. In terms of sections of 33 and 34 of DORA,
the actions of the Free State department could constitute irregular expenditure
and financial misconduct, and therefore the Committee requests the National
Treasury to provide a report on the Free State department’s expenditure in
relation to the grant, as well as whether DORA was contravened, and if, so what
steps National Treasury has taken.
To the national Department of Human
Settlements
1. The
Department should consider the issue of vacant posts as a matter of urgency,
given the requirements of the Public Service Act (No. 103 of 2004) coupled with
the President’s call for departments to fill all vacant posts.
2. The
Department should brief the Committee on its proposed turnaround strategy by 2
November 2011.
3. The Department should fast track the review of relevant policies and
legislation, and thus include dedicated policy, legislative framework on
housing co-operatives management and administration.
4. The Department should fast track the review of the current institutional
funding arrangements.
5. The Department should strengthen monitoring and evaluation mechanisms.
6. Accreditation of municipalities should not just be a compliance matter,
but proper procedures should be followed – relevant processes should be
procedurally sound, systematic and sustained over the long term.
7. The Department should brief the Committee on the progress made on
recommendations made by the Committee on RHIP, including current progress.
8. The Department should upscale the sanitation delivery process, thus the expansion
of the delivery capacity by appointing more service providers to accelerate service
delivery.
To the DPME
1.
The DPME should intensify its monitoring oversight on
compliance by the respective departments on the delivery agreements signed, as
well as fostering intergovernmental relations and co-operative governance
principles.
2. The DPME should consider conducting on-site visits and enhancing its
monitoring mechanism to ensure less reliance on the Department.
It is
worth noting that, a number of critical observations and recommendations have
been made throughout the document and will also require an urgent intervention.
A review of the work of the Department of Human
Settlements suggests that the ability (or commitment) of provinces to give
effect to national priorities and outcomes impact significantly on the national
Department’s ability to achieve its strategic objectives. While considerable
progress has been made to date, there are still a number of challenges facing
the achievement of sustainable human settlements, which are exacerbated by the
challenges within the Department. Most noteworthy is the extent to which the
inadequate human resources impact on the Department’s ability to meet its
objectives and it should be noted that the Auditor-General raised issues of
leadership in his report.
Further, while on average the Department did not
perform too poorly in terms of under expenditure, the high rate of under expenditure
in some of the main programmes is of serious concern. Despite the shifting of
funds between programmes, as well roll overs, the Department still failed to
meet all set targets for the 2010/11 financial year. Again, this raises questions of capacity in
the Department, which is supported by the fact that the Department took a
decision to discontinue some of its outputs due to financial constraints, as
well as non-approval by the accounting officer.
The Department’s progress towards achieving
sustainable sanitation services in rural communities is also far from desirable
and this will remain an oversight priority in future engagements with the
Department.
The issue about the measurability of the Department’s
performance indicators was again highlighted by the Auditor-General – an issue
which the Committee raised with the Department during the previous financial
year.
Non-performance in meeting the set targets on service
stands, as well as unauthorised expenditure on building materials raises
questions on the efficiency, effectiveness and economical use of money
appropriated by Parliament for a specific purpose. In this respect, the Committee will intensify
its oversight responsibility during the remainder of this financial year.
Report to be considered.
References
National Treasury, 2001. 1st Quarter Expenditure Report
2011/12 Financial Year
PSC, Public
Service Act (No. 103 of 1994) available at:
Money Bills Amendment Procedures and Related Matters Act (No. 9 of 2009).
Available at: www.gov.za
National Treasury. 2011. Estimates of National Expenditure.
Department of Human Settlements. 2011. Annual Report 2010/11.
Department of Human Settlements. 2010. Department Updated Strategic and
Performance Plans 2010 – 2013.