Human Settlements Budgetary Review and Recommendation Report 2011: discussion

Meeting report

Apologies where made for Ms N Mnisi (ANC), Ms D Dlakude (ANC) and Ms Mashes (ANC).

The Chairperson noted the reluctance by the Department to provide the Committee with information on the turnaround strategy. She was informed that the report was currently with the Public Service Administration for the approval of the organogram.

The Chairperson mentioned that issues raised by the Auditor General concerning the conduct of the Accounting Officer could be raised directly with the Minister.

Ms M Borman (ANC) expressed dissatisfaction at the Department’s failure to provide the turnaround strategy report as it was critical for the review.

Budgetary Review and Recommendation Report
The Chairperson tabled the Committee’s Budgetary Review and Recommendation Report. The report outlined the strategic priorities and measurable objectives of the Department and provided an analysis of its operational plans, financial statements and expenditure reports. The Report also highlighted information from the Standing Committee on Public Accounts and the Committee’s observations.

Mr A Steyn (DA) referred to the table of contents and noted the need to include page numbers and the years under review.

Mr Steyn highlighted the need to add a list of acronyms at the end of the report.

Mr Steyn referred to page 4 highlighted the absence of the Social Housing Regulatory Authority as an additional entity of the Department.

Mr Steyn referred to page 4 and suggested that the first sentence be changed to – The following entities report to the National Department of Human Settlements.

Mr Steyn expressed concern about the contradictions in terms of the high vacancy rates and the employment of contract versus permanent staff members.

Mr Steyn and Ms Borman referred to section 3 and suggested the need for a standard reporting format starting with purpose and then the outcomes of each project.

The Chairperson expressed dissatisfaction over the reasons given on non achieved projects- an example being the Housing Subsidies when the Department had recorded a total of R11 million unspent funds.

Mr Steyn observed contradictions in the annual report concerning the study being carried out to assess the performance of Government Subsidised Housing project. The annual report on page 52 stated that the research had been completed while on page 55 of the same report the research was said to be delayed due to challenges faced in releasing data by the Departments: Information Management Unit.

Ms Borman expressed disappointment at the Failure of the Department to finalise the Framework for Human Settlement Planning which was critical to success in their performance.

Mr Steyn reiterated that the failure by the Department to finalise various strategies, in particular the Informal Settlement Strategy, was the biggest none achievement.

Members expressed concern as to why so many programmes were still awaiting approval.

Mr J Matshoba asked the meaning of capacity constrains noted by the Department throughout the BRRR report.

The Chairperson noted and queried the R180 million that had been allocated over the Medium Expenditure Framework (MTEF) for specific departmental targets (3.2.1).

The Chairperson indicated that she would to advise the Department to consolidate all quarterly reports for 2010/2011 and provide an analysis of this.

Ms Borman suggested the use of the percentage signs instead of words.

Mr Matshoba questioned the delays for filling vacant posts.

Members were still awaiting the submission of the July to September financial report which could change the figures reported as at 30 August 2011.

Ms Borman suggested the use of consultants by the Department to avoid inconsistencies in reporting.

The Chairperson highlighted that the Department seemed to give different figures to Treasury and the Committee.

The Chairperson and Mr Steyn highlighted contradiction on the R 49 million given to Rural Housing Loan Fund under the Rural Voucher Scheme which in a previous meeting the Department had highlighted that it had been allocated to a different programme.

Members queried the R 14 million in interest that THUBLISHA still owed the NHFC.

Mr Steyn expressed concern at the practise by the Department of giving advances for work not yet completed.

Members disputed the Department’s budget of 16.2 billion listed under section 4.1 of the preliminary report at the end of the year. They highlighted that this figure differed from the one previously given to them in past presentations.

Ms Borman suggested that tables should be reflected on one page and not overlap into another page.

Mr Steyn suggested that the Department should include the Standing Committee on Public Accounts (SCOPA) on page 135 of the annual report.

Mr Matshoba queried the statistics given for the Free State under section 5.3.1.

Ms Borman commented on the state of the nation address and stated that the presentation needed to be broken down into each Province allowing a clear picture of the finances used.
Mr Steyn referred to the annual report pg 134 and noted that a separate report on the Free State needed to be complied.

The Chairperson expressed dissatisfaction of the Department’s citing of policy that had not yet been authorised by the Minister for example the Green Paper.

The report was not adopted as the Committee wanted to clarify certain information in the next meeting with the Presidency to be held the following day (20 October 2011).

Letter from the Legal Unit regarding the Free State
The Chairperson consulted with the Parliamentary Legal Unit regarding the issue of unauthorized expenditure by the Free State Provincial Department of Cooperative Governance, Traditional Affairs and Human Settlements. The letter read that according to the research brief given to the Legal Unit, the Department concerned, had incurred expenditure not approved in the Business Plans submitted for the 2010/11 and 2011/12 allocation of the Human Settlement Development Grant.

It went on to state that in doing so the Provincial Government was in contravention of the Division of Revenue Act 2010 Section 33 and 34. This constituted irregular spending and misconduct. The Legal Unit, referring to the Department’s contractual commitments that could not be met due to suspended payments, stated that this could have serious legal implications from the creditors.

The Legal Unit went on to explain that it was not clear if the Free State had applied to the National Treasury in relation to it’s 2010/2011 unpaid invoices. The remedial recommendations given were that the Accounting Officer of the Provincial Department was to assess the circumstances, nature and seriousness of the transgression and if found serious the officers involved were to be placed under a disciplinary hearing.

In the meantime the oversight of the Provincial Department fell under the Provincial Legislature. In conclusion the Parliament was to communicate the above matter to the Provincial Legislature in order to address it.

The meeting was adjourned.