Department of Human Settlement Annual Report 2008/2009: briefing

Human Settlements, Water and Sanitation

13 October 2009
Chairperson: Ms B Dambuza (ANC)
Share this page:

Meeting Summary

The Department of Housing briefed the Committee on its 2008/09 Annual Report. The Department’s operations were split into four main programmes and each of those programmes was described both in terms of their scope and the achievements during the year. Most of the budget was directed towards housing development finance and there was a net increase of 1.7 billion in funding between the previous year and the year under review. All programmes performed well ranging from 97% use of funds to 100%. The Department informed the committee that the system of auditing performance for 2009/2010 will be done in the same manner as financial statements were conducted. The Auditor-General’s municipal audit report showed that between 1994-2004, 6 905 municipal officials had unlawfully received low income houses. Out of this, 2 585 files had already been handed over to the Special Investigations Unit (SIU) for investigation. Extensive engagements were undertaken with provincial housing departments, municipalities and implementation agents, to assist with delivery on their respective mandates in respect of National priority projects. Agreements of cooperation between the three spheres of government were concluded for the Klarinet Housing Project and the Khutsong Redevelopment Initiative. Implementation agreements were being finalised among the executive principals of administration of the three spheres of government for the Kalahari Housing Project, the Khutsong Redevelopment Initiative and the Lerato Park Housing Project. 4000 subsidised housing units were handed over to beneficiaries of the N2 Gateway Housing Project and the partnership between government and the banking sector enabled the construction of bonded housing units for mixed-income households with the emphasis on sustainability.

Members were pleased to hear of the unqualified audit report but emphasised the need for better implementation of programmes within the Department. They also advised the Department to improve its staffing levels as this was negatively impacting on its performance. One of the contentious issues that were raised was in relation to the criteria used for beneficiaries. The Department assured Members that it was working on a new system of establishing criteria that would soon be made available. The Committee queried about the lack of information on non-financial performance and the amendments made to the Consumer Protection Measures Act. Members advised DHS to improve on their monitoring of programmes so as to resolve some of the problems on the ground. The department informed the committee that in line with its monitoring mandate, it had carried out monitoring of occupancy beneficiaries and that a full report would be provided in the next meeting.

Meeting report

Briefing by the Department of Human Settlement (DHS) on 2008/09
Mr Itumeleng Kotsoane, Director-General, Department of Human Settlement, stated that the constitutional provision of the “right to access adequate housing” remained a key reference point for the programmes of the Department.

There were four main programmes carried out by the Department for the year under review. Programme 1: administration focused on strategic leadership and administrative and management support services to the Department. Some of the achievements under this programme included the conclusion of new legislation- the Housing Development Agency Act and Social Housing Act. Two further pieces of legislation (Sectional Tiles Schemes Management Bill and Community Schemes Ombuds Service Bill) were developed and certified by the Office of the State Law Advisers and were expected to be processed through parliament during 2009/10. Work on the special investigations component emanating from the 2006 Auditor General Report resulted in 513 cases involving civil servants being finalised - with convictions and suspended sentences and some with conditions to repay subsidy amounts. A further 1440 acknowledgements of debt to the value of R18, 399,778.00 were signed by civil servants who had defrauded the housing subsidy system. The Department had received a cash amount of R1 797,799.00 as the initial amount emanating from civil recoveries for the period under review. The Auditor-General’s municipal audit report showed that between 1994-2004, 6 905 municipal officials had unlawfully received low income houses. Out of this, 2 585 files had already been handed over to the Special Investigations Unit (SIU) for investigation.

Mr Mziwonke Dlabantu, Deputy Director-General and Chief Financial Officer, DHS, presented Programme 2. The purpose of Programme 2 was to develop and promote sustainable human settlement and housing policies, supported by a responsible research agenda. Major achievements of this programme included the completion and subsequent approval of the Revised Farm Resident Housing Assistance Programme and Housing Code by the Minister on 13 February 2009. On the monitoring and evaluation front, he stated that an occupancy audit of the Seraleng Housing Project in Rustenburg was conducted in order to determine to what extent completed houses were being occupied by unauthorised beneficiaries. The aim of the audit was to assess the profile of occupiers and to make recommendations on how to regularise the situation.

The purpose of programme 3 was to provide implementation and delivery support for housing and human settlement programmes. The six sub-programmes under this programme were set out and the achievements under each one were also highlighted in the presentation (See document).Extensive engagements were undertaken with provincial housing departments, municipalities and implementation agents, to assist with delivery on their respective mandates in respect of National priority projects. Agreements of cooperation between the three spheres of government were concluded for the Klarinet Housing Project and the Khutsong Redevelopment Initiative. Implementation agreements were being finalised among the executive principals of administration of the three spheres of government for the Kalahari Housing Project, the Khutsong Redevelopment Initiative and the Lerato Park Housing Project. 4000 subsidised housing units were handed over to beneficiaries of the N2 Gateway Housing Project and the partnership between government and the banking sector enabled the construction of bonded housing units for mixed-income households with the emphasis on sustainability.

Mr Dlabantu, stated that the purpose of programme 4 was the funding of national housing and human settlement programmes. He mentioned the achievements of this programme, which included, amongst other things, the preparation and submission o financial statements, monthly reconciliations and the maintenance of the fixed asset register.

He referred the Committee to the financial performance and budget overview. Mr Dlabantu stated that there was a net increase of 1.7 billion between the previous year and the year under review largely due to an increase in the allocation for housing development finance- a dominant programme that representing 96% of the total funding. Under Financial performance as at 31st March 2009, a comparison of allocation versus expenditure revealed that all programmes performed well ranging from 97% use of funds to 100%.The amount that remained unspent in 2008 was 8.2 million which was requested as part of the roll over into the current year 2009.

Mr Dlabantu then gave a breakdown of the expenditure of four programmes. He informed the Committee that explanations had been provided in the report for funds that had been reported as unspent and also emphasised that the unspent portion was an insignificant portion of the budget.

He reported that the Department’s Audit for 2008/09 was unqualified but that one of the legislative issues arising from the audit was the non- compliance with sections 66, 70(1) (a), 38(1) (c) (ii) and 38(2) of the Public Finance and Management Act (PFMA) arising from an agreement with the National Housing Finance Corporation
(NHFC) and Thubelisha Homes for a loan to the value of R100 million for the N2 Gateway Project. Performance information for 2009/2010 Audit would be audited in the same manner as financial statements were carried out so the Department was preparing for this change based on the issues raised in the audit for the period under review. Lastly, he referred the Committee to the additional pages added to the presentation which set out expenditure trends over three years and housing delivery of the Department over five years.

Discussion
Mr A Steyn (DA) congratulated the Department for receiving an unqualified audit opinion. At that same time, he wanted to know what the Department was doing to assist emerging contractors as a proactive way of addressing spiralling costs.

Mr Kotsoane proposed that the number of running projects be reduced to about 2000, with a focus on contractors who had skills and who would then sub-contract to emerging contractors. These skilled contractors would assume responsibility for the quality of work and any challenges that may arise. He added that this proposal had been discussed and approved by the Ministers and Members of Executive Councils (MinMEC).

Mr Steyn asked whether the activities under the SIU were feasible as R 10 million had been spent (on investigations) but only R 1.7 million had been recovered.

Mr Koatsoane replied that the full amount should have been returned by now but the Department would check this information as the recoveries did not come back straight to the Department and instead went to Treasury first.

Mr Steyn pointed out that houses were built without infrastructure so he wondered what the use of the grant fund was.

Mr Dlabantu responded that they were varying situations throughout the country from municipality to municipality and that in order to deliver the full product, it was desirable that some of the municipalities have access to the grant.

Ms M Borman (ANC) asked if the Department had sorted its office accommodation problem.

Mr Kotsoane replied that the issue of office accommodation had been resolved. Two branches were moving into the new accommodation that was acquired through the Department of Public Works.

Ms Borman referred to the 23% vacancy rate and wanted to know how the Department had handled this issue as vacancies resulted in problems.

Mr Kostanse conceded that the vacancy rate was unacceptably high but pointed out that the vacancies were not filled due to accommodation problems. Looking ahead, it was unlikely that the vacancies would be filled as the Department was affected by the economic crunch, which would result in budget cuts.

Mr R Bhoola (MF) congratulated the Department on its unqualified audit but wanted to know the synchronisation of land availability in relation to sector partners.

Mr Kotsonane explained that the mandate of the Department was to acquire land in partnership with provinces and municipalities for the development of human settlements. Its secondary mandate was to develop land. In instances where there was a joint venture programme between two spheres of government, they were required to approach the Department and request that it act as a development agency on their behalf.

Mr Bhoola asked about Department’s working relationship with the provinces in terms of the national development agency.

Mr Kotsoane replied that the Department was working closely with provinces through managing risks and the monitoring and evaluation chief directorate.

The Chairperson noted that the department had the plans but the problem was with implementation as evidenced from what was happening on the ground.

Mr Kotsoane responded that the Department was doing everything to ensure that things were done but that it had about 4000 running projects and this therefore increased the chance of some of the projects not meeting expectations.

The Chairperson wanted to know what was contained in the international agreements with foreign countries as the Committee had not been availed with the documents but the Committee had a right to have access.

Mr Kotsoane stated that DHS would make available the Memorandum of Understandings (MOUs) that had been signed with different countries. In addition, the Department would clarify the nature of the agreements and level of investments that have been reached.

The Chairperson requested an explanation on the issue of amnesty in relation to what it was about and what was approved.

Mr Kotsoane explained that the issue of amnesty related to those that procured houses unlawfully and that a concept on the amnesty was approved but it had not been implemented due to other legal considerations made later on.

The Chairperson pointed out that the Committee had not seen the regulations that were amended with regards to the Consumer Protection Measures Act despite appeals made by Members.

Mr Dlabantu gave an assurance that this information would be provided to Members.

The Chairperson questioned whether the Department’s communication strategy was directed at ordinary people.

Mr Kotsoane replied that the Department used both the television and radio platforms to communicate its messages with ordinary people. Provision was made to ensure that the message was communicated in all the official languages.

Ms Borman asked what criterion was being used for the military veterans programme.

Mr Martin Maphisa, Deputy Director-General, DHS, responded that the South African Defence Force had provided the Department with an audited list and assisted in identifying. The Department also consulted with other stake holders such as the South African Military Veterans Association, which is recognised by the Military Defence Act.

Ms Borman referred to the housing project for orphaned children in the Eastern Cape and asked the Department to shed more light on it.

Mr Maphisa replied that it was part of the Department’s policy to collaborate with the Department of Social Development on projects of this nature.

One of the members asked about information relating to the beneficiary audit.

Mr Philip Chauke, Chief Director: Monitoring and Evaluation, DHS, replied that the Department had embarked on an occupancy beneficiary audit in the year under review in seven provinces. Four of the seven reports were ready and three were still outstanding though data had been collected already. What the reports had indicated thus far was that about 70% of households visited were the rightful occupants.

Mr Steyn wondered how all the funding had been used up despite a shortfall in personnel.

Mr Dlabantu replied that the Department was allowed to transfer funds meant for personnel to other programmes in instances where they had been under expenditure. The only limitation was that regulations did not allow for funds from other programmes to be diverted to personnel in instances where staff positions had exceed the total budgeted for.

Mr Steyn enquired why there was no information on outcomes as it was important to include non-financial outcomes.

Mr Kotsoane replied that the Department would try and reflect this information in future.

Ms Borman asked if the Department was beginning to looking at better ways of handling the beneficiary lists.

Mr Dlabantu responded that the Department was in the process of concluding the new allocation program, which had various elements on the criteria for qualification. This would be done within the next two months.

The Chairperson stated that the Department was trying its best. However, he noted that there were problems on the ground that needed to be resolved by the Department. The issue of Environmental Impact Assessments (EIAs) was not being done well and needed to be looked into. She advised the Department to have termination clauses for contractors- this could be activated when they do not deliver.

The meeting was adjourned.

 

Present

  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: