Department of Human Settlements on 1st quarter 2011 peformance: briefing

Meeting report

Department of Human Settlements. Departmental performance report: April-June 2011. Presentation 
Mr Thabani Zulu, Director-General (DG), Department of Human Settlements (DHS), the Department),  informed the Committee that it was Mr Nyameko Mbengo’s last day as an acting Chief Financial Officer (CFO) and the newly appointed CFO was to start as from 01 September 2011.
The Department of Human Settlements (DHS, the Department) reported on annual performance monitoring (slide 4), overall Departmental performance (slide 5),  communication and outreach key (slides 6-8), delivery Agreement - Outcome 8 (slides 9-11),  job creation (slide 12),  accreditation of municipalities (slide 13), turnaround strategy (slide 14) , entities performance (slides 15-20), matters for action and redress (slides 21-22), allocation per programme (slide 23), allocation per economic classification (slide 24), expenditure per programme as at 30 June 2011 (slide 25), expenditure  per classification as at 30 June 2011 (slides 26-27), operational  expenditure (slide 28),  detail of transfer payments (slide 29), expenditure per programme as at 31 July 2011 (slide 30),  delivery performance as at 31 July 2011 (slide 31),  HSDG performance as at 30 June 2011 (slides 32-33), provincial transfers versus (vs) expenditure 2011/12 (slides 34-35), and payment schedule vs expenditure as at 31 July 2011 (slide 36). 

The Department had achieved 54% approved targets on its annual performance plan monitoring during April – June 2011 and Strategic Relations and Governance had the highest percentage in achieving its target. The DG's Office monitored the national Human Settlement performance. Mr Zulu informed the Committee that the percentage of targets achieved would change in the following quarter.
Communication and outreach programmes were attended by both the Minister, the Hon. Tokyo Sexwale, and his Deputy. These outreaches were made in the Limpopo, Western Cape, KwaZulu Natal, Free State and Northern Cape. Some of the key issues of communication and outreach were the Budget Vote 2011/12, Freedom Day, at which the Department participated in the National Freedom Day Celebration on 27 April 2011, and the Youth Build Limpopo, where Minister Sexwale and Mr Soviet Lekganyane, Member of the Executive Council (MEC) for Local Government and Housing, Limpopo, handed over, on 07 June 2011, 76 houses in commemoration of the 1976 youth.
The establishment of Mortgage Default Insurance (MDI) was approved by the National Housing Finance Corporation (NHFC) and shareholders and the interest of commercial banks was confirmed Improved Property Market output) (slide 9).
On Delivery Agreement Outcome 8, the Department noted the following matters requiring attention and action:
Output 1: Improved technical support and capacity building to municipalities and provinces by the National Upgrading Support Programme (NUSP).
Output 2: Uniform norms and standards for  basic services and human settlements service standards provided at  municipal and provincial spheres. The Human Settlements & Basic Services Task Team was addressing this matter.
Output 3: Policy approval, coordination and implementation at provincial and municipal spheres of higher densities.
Output 4: Mortgage Default Insurance (MDI) only addressed 30% of target and development finance institutions (DFIs) another 20%, leaving 50% unresolved. The DFI performances should be enhanced by picking institutions and associated product lines that performed exceptionally well and channelling additional funding and capacity  towards these “winners”. (Slide 10)

The Technical Human Settlements Implementation Forum and Human Settlements Implementation Forum were convened and considered and approved the Programme of Action (POA) Reports for Outcome 8. The POA report was finalised in consultation with Provincial Human Settlement Departments, Housing Entities, as well as the Departments of Public Enterprises, Public Works, Rural Development and Land Reform, and Cooperative Governance. There would be delivery agreements to be entered into with relevant municipalities for the implementation of Outcome 8. The sustainable Human Settlements and Basic Services Task Team had been established to provide policy and implementation support to Outcome 8. (Slide 11)

DHS had developed a model to measure and report on job creation. The model covered the entire delivery chain of Human Settlements Development and measured direct, indirect, and induced job creation. The results of the model showed that the Department had created 14 868 direct jobs during the construction as well as 7 510 indirect jobs (Slide 12)
Preparations had been completed for the assessment of the next round of municipalities for accreditation. Post-accreditation support was provided and was on-going for the transition, transfer and delegation of housing functions to provinces and the eight municipalities provided with compliance certificates.

DHS had completed its turnaround strategy which would be presented to the Portfolio Committee. The drafting of the organogram and job evaluations commenced during the period of review. The process to establish the Programme Management Unit had also commenced and it formed part of the organogram. (Slide 13).

Figures were given for hectares of state land that had been identified and were under evaluation (slide 15). In addition a total of 175 hectares and two properties had been acquired from Servcon. DHS also commissioned an evaluation of Transnet properties. A multipurpose community centre in Port Elizabeth, as part of Zanemvula Project was completed. As to the Social Housing Registration Authority, 18 Social Housing Institutions were accredited for 2011/12 financial year and one of the 18 institutions was approved for Intervention grant. (Slide 16)

There were 631 new registrations which were completed with National Home Builders Registration Council against a target of 700.  The Council received 102 complaints and 18 were closed (slide 19).  As to the National Housing Finance Corporation, during the period under review work progressed to activate the Mortgage Default Insurance (MDI) including submissions to Treasury for approvals as well as submission of a Cabinet memorandum for approval by Cabinet. The process to  sell the retail book commenced. On this project 4 478 units were impacted by development, 16 785 people benefited and approximately and 878 jobs were created (slide 20).

Mr Mbengo summarised financial allocations per programme (slide 23: see presentation document for further details).

The Department recognised the need to improve capacity for monitoring and oversight internally and externally. Another need that was recognised by DHS was the need for implementation of electronic performance management systems to ensure steps taken to redress the less than satisfactory performance. Provinces were requested to provide explanations and mitigation measures on provincial performances against the approved business plans. Special amendments had to be adopted on provincial oversights that were being conducted by the Department. The Internal focus of the Department programmes contradicted its role as the sector leader of human settlements development and a branch for strategy and planning was to be established. 


Discussion
The Chairperson wanted to know if the Department could not create an office that would liaison with Parliament so that the Committee would be well informed about the Department and its progress.

Mr K Sthole (IFP) recommended the work done by the Department. He wanted to know how many students benefited from the Rural Housing Loan Fund (RHLF).

Mr Mbengo explained that 270 students benefited from RHLF and the bursary was for the DHS employees and the scholarship was for students and youth.

Ms M Njobe (COPE) told the Department that the Committee needed more time to read the presentation so they could have constructive questions. She asked the Department to clarify the reason why there was a slow growth in the Human Settlements Development Grant (HSDG) performance and in the Provincial transfers vs HSDG expenditures.

Mr A Figlan (DA) informed the Department that the issue of outside built toilets in the Free State was really frustrating. He wanted to know if the figurers stated in the report about job creation were for the all provinces.

Mr Neville Chainee, Chief Operations Officer, Department of Human Settlements,  promised to provide the Committee with the provincial breakdown of jobs created.

Ms N Mnisi (ANC) stated that she was concerned about the monies that were not transferred to the provinces or projects while there was a budget allocated for them.

Mr A Steyn (DA) suggested that the Committee should be provided with the presentation before the presentation day so the Committee should prepare their questions. Mr Steyn wanted clarity as to what were the requirements for household to get the insurance and who were the target components on the insurance. He asked the Department to clarify the fact that the office of disclosure had to be established while it had already been established four years ago. He also asked DHS to explain whether the job creation model had been used by other private companies, how accurate was it and if there was consultation done regarding the model. According to the presentation 18 Social Housing institutions were accredited for 2011/2012 financial year but only one was had an intervention grant approved; Mr Steyn wanted to know if the five projects approved in KwaZulu-Natal were given to this one institution.

Mr Chainee explained that Intervention Grant was given to an institution which needed more capacity.

Mr Zulu admitted that the feeling of vacancies was very slow because before the posts could be advertised they had to be evaluated and that was a length process. He informed the Committee that the Department had already submitted its micro structure to the Minister so to minimise the delays.

Ms G Borman (ANC) also congratulated the Department on its excellent job. She prompted the Department to be cautious on the under spending especially on the first quarter with expenditure and payments. She wanted clarity as to whether the proper jobs created were permanent. She asked the Department to provide the time frame of the drafting of organogram.

Mr Anton Arendse, Chief Director: Human Settlement Planning Unit, DHS, stated that there would be meeting for Provinces to explain their expenditures to the National Department.

Mr Mbengo clarified that sometimes it would look like the Department was under spending while it was because  the Department received invoices in the following financial quarter or year.

The Chairperson wanted to know why the Department agreed with the provinces to build outside toilets because it was not safe to use them especially at night. She insisted that the DG had to reprimand the Free State  for continuing building outside toilets. She told the Department to stop playing games with the Committee.  She would appreciate if she could hear the Minister of Public Service and Administration announcing that she had signed the turnaround strategy because she, the Chairperson,  did not know what was causing the delays.

Ms Njobe asked the Department to clarify why Northern Cape had the lowest funds transferred.

Mr Rakane (ANC)wanted to know how the Department measured the actual delivery or performance.

The Chairperson told the Department that it had to redefine some of the meanings of words like 'sanitation' or 'bucket system' because she believed that toilets that were build outside the house  constituted the 'bucket system'. She advised the Department that it had to go back to the drawing board.
Mr Zulu agreed with the Chairperson that some words had to be redefined.

Mr Steyn asked the acting CFO to clarify why there was a difference between money transferred and performance delivered.

Mr R Bhoola (MF) recommended the remarkable work done by the Department since the beginning of the democracy. 

Ms Borman raised her concern about the DHS not meeting its targets on the Affordable Rental Housing.

Mr Zulu informed the Committee that there were challenges that the Department were facing which affected the Department’s ability to meet the target but he promised the Committee that DHS was working very hard to meet the targets.

The Chairperson wanted to know if the Department was using the skills development programmes, like those of the Public Administration Leadership and Management Academy (PALAMA), internally to retain employee from leaving the Department. Lastly she wanted to know how transformed was NHFC as the Committee had been complaining about the NHFC.

Mr Mbengo explained that DHS had a budget for training of staff and this training was linked to the employee’s development requirements.

The Chairperson told the Department that its policy development was failing.
Committee report on AfricaSan 3 Conference on Hygiene and Sanitation: consideration
The adoption of the AfricaSan 3 (Third Africa Conference on Sanitation and Hygiene, Kigali, Rwanda, 19-21 July 2011) Report was postponed to the 2 September 2011. 

Committee report on Mpumalanga oversight: consideration
The adoption of the Mpumalanga Oversight Report was postponed to 2 September 2011. 

The meeting was adjourned.