Department of Human Settlements 4th Quarter Performance Report 2012/13

Meeting report

Department of Human Settlements Quarterly Report
The Chairperson noted that this presentation was important to determine the spending of the Department of Human Settlements (DHS or the Department) at the end of the fourth quarter, which would then be combined with the other quarters to give an indication of spending in the whole year.

Ms Sindiswe Ngxongo, Chief Operations Officer, Department of Human Settlements, tendered the apologies of the Director-General and Chief Financial Officer.

She explained the abbreviations on slide 3 as follows:
CS: Corporate Services Branch
HSDF: Human Settlements Development Framework
HSSP: Human Settlements Strategy and Planning
PPMU: Project and Programme Management Unit
CFO: Chief Financial Officer
COO: Chief Operations Officer
DHS: Department of Human Settlements.

This slide showed the number of targets approved, achieved and not achieved for the branches. She said that the DHS did not achieve all targets for the fourth quarter. As indicated for the various branches, she ran through all of the targets and the achievement. Of the total of 99 targets, 40 were not achieved.

She went into details of the core branches of the Department, which would indicate more about the targets, and noted that those targets were as outlined in the Strategic Plan. Programme 2 (Human Settlements Delivery Frameworks) had three Chief Directorates. She sought guidance from the Committee at this point as to whether the DHS must read out all the targets, or whether Members wished to read them for themselves.

The Chairperson asked her to summarise them for the moment, but said there would be questions asked later.

Ms Ngxongo said that this branch concentrated upon policy development. The branch was not in a position to achieve all targets. She highlighted that the reasons behind non-achievement were known, and the DHS had acknowledged that in future it needed to put more emphasis on planning. This was a point also highlighted by the Office of the Auditor-General (AG).

Programme 3: Human Settlements Strategy and Planning comprised of planning, strategy and Intergovernmental Relations (IGR), and the latter point had been emphasised in previous meetings.

For the Office of the Chief Financial Officer, only one target was not achieved. The DHS had set a strategy for the Official Development Assistance (ODA) strategy. It was reflected here as not achieved because, although the strategy had been drawn, it had not yet been approved by the end of the fourth quarter. This was another pointer to the need to frame targets better and to indicate where the achievement was dependent on factors outside the direct control of the DHS itself.

Programme 4: Projects and Programme Management, was a new branch to assist with human settlements delivery, by improving the pipeline for project planning, the delivery and to establish at what point the sector would be in a position to say which projects were ready, and which were not. The emphasis was on timeous planning.

In the whole sector, the DHS relied on other roleplayers. It had planned for communication outreach, and had managed to achieve a number of visits and outreach, as outlined on slide 11. The Portfolio Committee had participated in some of the events, such as the transfer of the Estate Agency Affairs Board, which had now been appointed and was attending to appointment of the Chair and Deputy Chair. The project in Walmer Link, Port Elizabeth, was launched by the Minister.

She described the upgrading of informal settlements, which fell under government Outcome 8. She noted everything that had been achieved to date, in support of the delivery agreement. The percentages that would be given were the percentages achieved against the whole agreement to deliver by 2014.

Mr Mbulelo Tshangana, Deputy Director General, Department of Human Settlements, noted that by 31 March there had been delivery of 177 598 serviced sites. This represented 44.4% of the 2014 targets to upgrade informal settlements. This figure excluded the Urban Settlements Development Grant (USDG), but if the USDG was included the figure would rise to 230 111 households, or 57.5% of the 2014 targets. He emphasised that the figure spoke to serviced sites. If the top structures were included as well, the figure would rise to 182 065 formal housing units, and the two figures added together meant that more than 400 000 housing opportunities had been delivered in informal settlements. Outcome 8 emphasis was on services, not top structures, and that was why the figure was split in this way.

Members indicated that they wanted to ask questions, but the Chairperson ruled that the presentation on Outcome 8 must finish first.

Mr Tshangana said that this was an aggregated figure and the next slide (slide 13) broke down the figures by province, showing the plans and achievements. KwaZulu Natal had the lowest achievement, at 26.6% of targets, with Free State showing the highest, at 68.9%. Of the total intended delivery of 400 000, there was delivery between 2010 and 2013 of 177 598, with 53 622 being delivered in 2012/13, or the 44.4% he had mentioned earlier. Again, he emphasised that this excluded top structures.

The next slide examined the provision of well-located rental accommodation. A total of 35 641 affordable rental units was provided, through both the Human Settlements Development Grant (HSDG) and USDG, and this represented 44.6% of the 2014 targets. If the private sector figures were added in, this brought the figure up to 43 884 rental units, or 54.9% of the 2014 target. He provided a breakdown by province (see slide 16).

In pursuance of Government Outcome 8, the Housing Development Agency (HDA) had identified 69 163 pieces of state land for possible release. From this, 47 604 had been assessed for suitability and 7 477 had been released, to Free State, Gauteng, KwaZulu Natal, Limpopo and North West. This was in excess of the targets. Some provincial DHS offices had also acquired their own land but this was not included in the reporting.

He noted that the stringent qualification criteria applied by banks was not promoting growth in the affordable housing sector. The banks had been complaining about risk sharing, claiming that they took too much of the risk, and some of the measures around Finance Linked Subsidy Programme (FLISP) and Mortgage Default Insurance (MDI) were created to try to share the risk. The process of engagement was still ongoing. This was one target that had not been achieved. There had not been significant progress, although some headway had been made. He set out who the players were who were helping with improvement of the markets. The National Housing Finance Corporation (NHFC), who had delivered 1 791 loans, which was 92.8% of its own internal target, as well as 12 968 incremental loans ( 31.9% of its target) and wholesale funding in 21 964 matters (or 55.8% of target). The Rural Housing Loan Finance (RHLF) delivered 125 141 services, which was 68.8% of its target. NURCHA (one of the DHS agencies) had managed to deliver 70% of its five-year target. In total 175 891 housing opportunities were provided. The five-year target was 600 000, so DHS accepted that there had not been good enough delivery on internal property markets.

In the last quarter, the number of direct jobs created stood at 21 204 job opportunities in all, broken down by direct, indirect and induced jobs, in respect of the serviced stands and top structures.

Mr Tshangana then outlined the progress in having metros accredited. There had been a change in the accreditation framework, so that now the executive assignment of duties would be attended to by the Premier and MECs, who would be responsible for assigning administration and housing development mandates to the six metros. There was a March deadline, and it was hoped that by the end of the municipal financial year, all of the metros would be accredited. There had been a meeting last week to discuss some concerns around disbursements, lines of accountability and funding of functions. The funds had to follow the function, so there would be a direct disbursement to the metros and there would also be asset implications. The MECs and housing officials were dealing with this. He recommended that perhaps the Committee needed to get a briefing from the Financial and Fiscal Commission (FFC) on the risks, accreditation and mitigation of risks. The Financial and Fiscal Commission was basically in favour of this, and agreed to work within the MinMEC time frames.

Mr Tshangana thought that the next slide, on sanitation, was perhaps too detailed and he wondered if the Committee wanted to get a full briefing.

The Chairperson said it was indeed relevant and this Committee needed to know also about the jobs created and training.

Mr Tshangana then took Members through the slides on sanitation. He noted that there was a funding proposal for funding of three skills development initiatives, in response to the Construction Sector Education and Training Authority (CETA) call for applications for discretionary funding of sector skills development initiatives. The different types of training were set out, but they were basically artisan skills, since a study done by the Development Bank of Southern Africa (DBSA) had suggested that there were not enough artisans in municipalities. The targeted training programmes were intended to capacitate the youth and others who had lower skills levels, to be able to then undertake higher level theoretical and practical training, so that they would be employable at the end of training. The DHS had responded to the request by CETA and was hoping to get a discretionary allocation. Some provinces were already proceeding with their own individual funding. More training funding proposals would be developed for submission to potential funders, including CETA.

Most municipalities were given the status of Water Service Authorities (WSA) after 2003. Between January 2013 and March 2013, rollout inceptions and follow ups were held with six newly identified municipalities in Eastern Cape, Free State and Limpopo. Everything was more or less still in the planning stage, with little implementation. Follow ups had been made with the DHS Western Cape sanitation team, where funding had been put aside to support 18 municipalities. The allocation was essentially targeting the rural municipalities, but Gauteng, KwaZulu Natal and Western Cape were using own funding as well, either through the Municipal Infrastructure Grant (MIG) or other funding.

Support to existing sites consisted of support to cooperatives or small, medium and micro enterprises (SMMEs). Tonga Precast Cooperative was being supported to get manufacturing off the ground, and was linked to the Department of Trade and Industry (dti) support. He corrected the slide, stating that there had been one, not “no” project steering committee meeting. The needs and interventions were set out.

The next slide outlined the Rural Household Infrastructure Programme (RHIP) job creation. The RHIP reportedly created 8 886 jobs since 2010, at 50 municipalities. A provincial breakdown was given. The Chief Operations Officer had noted that all the figures needed to be audited by the Monitoring and Evaluation Unit as well as by the AG.

By end February 2013 the programme also apparently created 4 557 jobs during Phase 3 implementation at 28 municipalities, of which about 836 were for women, 2 273 for youth, and 17 for people living with disabilities. Skills and jobs under RHIP were planned in a number of sectors, as outlined on slide 27, and jobs were actually created in pit digging and lining, as well as assembly of prefabs and slabs.  All these skills were linked to the Rural Housing Infrastructure Grant (RHIG) grant programme. He said that he could break it down further, by project and municipality, if Members wanted.

Ms Ngxongo said that the performance of DHS also depended on the performance of the DHS entities. She noted that the Social Housing Registration Authority (SHRA) had accredited 43 social housing institutions (SHIs). A social housing programme had been prepared, with calls for proposals, and only accredited social institutions were permitted to apply. It had done the first draft of the National Social Housing pipeline to present to provinces for their endorsement. In order for the SHRIs to succeed, they would have to partner well with the provinces, so provincial endorsement was essential. She also noted that SHRA was developing a regulatory framework, with a risk-based approach, to find a better way to measure performance. It had been able to develop a tool that would be used to assist in providing feedback of the social housing institutions. All the SHIs had to be assessed, and feedback compiled and given to them.

The second entity was the Housing Development Agency (HDA). The DHS had presented on it in detail in the past. It was doing well in assisting the Department by identifying well located and suitable land for human settlements, and was assisting the provinces and metros to fast-track delivery of human settlements. The HDA had exceeded its 2014 target. There had also been implementation protocols concluded with the provincial Departments of Human Settlements in KwaZulu Natal, and informal settlement upgrading work was well under way in the Northern Cape. She added that the HDA had developed a tool to assist in the analysis of the well-located land for human settlements. This would be implemented by provinces and municipalities, and could also assist others looking for well-located land.

The National Urban Reconstruction Housing Agency (NURCHA) had signed five out of the eleven targeted contracts, in the fourth quarter. Although this was below target in terms of numbers, she wanted to point out that the value of those contracts was R416 million, substantially in excess of the target value of R277 million. It had also signed 6 073 contracts in respect of houses and sites, against a target of 4 235.  There were 650 houses built and sites serviced, against the target of 20. It had assisted the Department well. However, the one area where it – and indeed the whole DHS – was falling short was the ‘gap market’, where performance was generally low across the board. The value of projects in affordable housing was R223 million against the target of R115 million. Three contracts (out of the target of eight) were signed. DHS knew that it must focus significantly on the performance of the gap market.

The Chairperson interjected at this point, to ask the DHS to jump to slide 44. The information being given now was a mixture of the information that would be given in the annual report, and there would be time for further interaction on that at a further meeting.

Mr Nyameko Mbengo, Chief Director: Financial Management, DHS, said that slide 44 set out the allocation for each of the five programmes, which totalled R25.1 billion. During the year, virements were made, but this did not change the adjusted allocation. Funds were shifted from programme 1: Administration (R20.5 million) and from Programme 3: Housing Planning and Delivery Support (R12.3 million) to programme 5, which thus received an extra R32.8 million. He then detailed the virements, setting out the purpose. Servcon required R36.8 million as part of its closure costs, and savings from other programmes were used (as set out already) to do this.

He set out the expenditure per programme as at 31 March 2013, by each of the programmes, and summarised the variance and percentages spent. These included all transfers and payments to public entities. The next slide, on operational expenditure, excluded the grant payments. This gave a figure of R751 million, of which R543 million was spent, with a variance of R207 million. This showed that the Department had spent 72% of its own allocation at the end of the financial year. When the grants and transfers to public entities were shown, these amounted to R24 billion, and there was spending on most of them of 100%, with HSDG at 98%, and RHIG grant at 70%, giving a total spending of 99%. Under the HSDG, a total of R330.9 million was not transferred to provinces.

The Chairperson interrupted at this point to say again that this was in fact a mixture of annual report and quarterly report figures. The figures now given were not specific to the fourth quarter, but included information from the other three quarters. Whilst, on the one hand, it was useful to get this information as a “preview” to the annual report figures, they were not in fact relevant to today's meeting. This Committee, at a previous meeting on the third quarter expenditure, had expressed concern at under-spending in the prior months, and that was why it was so important to address the fourth quarter specifically. The DHS itself had said that a certain amount was expected to be spent by the provinces. The Committee had specifically said to the DHS that it wanted to be assured that the fourth quarter would not show fiscal dumping, and that could only be ascertained if the figures were given separately. The Committee had also noted that the DHS must visit the provinces itself, including those who indicated that they were going to spend, in order to verify what they were doing, and she had expected a report-back on those issues.

Discussion
Ms G Borman (ANC) thought that the Committee was supposed to be getting a quarterly report, in terms of section 32 of the Public Finance Management Act (PFMA), and she understood that the figures could be obtained from National Treasury. What was being reported now did not reflect what the Committee needed. If DHS did not have the figures, it should request them directly from NT.

Ms D Dlakude (ANC) agreed that this was in fact a yearly report, and she had been expecting a progress report following up from the last meeting on the third quarter performance.

Mr S Mokgalapa (DA) agreed, pointing out that the Committee had considered the Third Quarter Report in February, and he wanted to know the progress from the third to fourth quarter. He fully agreed with the Chairperson that it was necessary to analyse the spending, between January and end March, and compare that to the figures presented for October to December.

Mr Tshangana said that in February, when the DHS reported to the Committee on the third quarter spending, it had already indicated that there were some areas of poor performance. He asked if the Members wanted to know if the turnaround strategy was working. The DHS reporting was cumulative, and the fourth quarter was considered to be an amalgamation of all the other spending in previous quarters, and he had not intended to speak to that quarter only. He could, however speak about the individual provincial performance from January to March, if the Committee wanted.

The Chairperson pointed out that the problem was that the Committee was already quite sceptical about the figures as presented previously. The quarterly assessment was a necessary oversight exercise. This presentation effectively meant that the Committee was unable to distinguish what had happened in the fourth quarter from what happened in the whole year. There were a few issues on which the Committee could interact with DHS, but the Committee still needed a fourth quarter report.

Ms Borman referred to section 32 of the PFMA and said that this was very clear, so she was surprised that DHS had not produced the required information.

Mr R Bhoola (MF) said that the third quarter report had been quite clear. The Committee was impressed with the responses given in the February meeting about fiscal dumping, and he reminded DHS that there was an assurance given on the MinMEC. His main concern was that this report now being presented was distorted in that there was no clear indication of what the spending was in the quarter.

Ms J Sosibo (ANC) agreed that although it was positive that this information had been provided, the DHS should have said how it was going to spend in this quarter.

The Chairperson stressed that information was needed on the serviced sites. The DHS had given an assurance, in February, that before it would disburse, it would verify what was happening in the provinces. The Members therefore needed to be told what had happened. She asked if DHS had, as requested, made site visits to Mpumalanga, Free State and the other places identified. It was clear that Eastern Cape had surrendered its funds.

Ms Dlakude said that Members were also interested in getting the numbers in the provinces, to do their own oversight. She asked for an indication of the main reasons for not achieving targets, specifically if this was related to capacity problems, and why there was poor planning. The budget and targets should inform the planning.

Ms Dlakude asked about the upgrading of informal settlements. There were numbers mentioned for “upgraded services” but she wanted to know what this comprised, and in what areas.

Ms Dlakude also noted assistance to upgrade 182 000 households, and questioned how many informal settlements were involved in that particular programme.

Ms Dlakude asked which provinces had acquired land for human settlements development purposes.

Ms Dlakude pointed out that the rectification programme had not been mentioned and she wanted to know if it was still in existence and operating.

Ms Dlakude noted that in 2009 there was mention of a 2.1 million housing backlog. She asked if this was increasing or decreasing.

Ms Dlakude wanted to know more details on the bursaries, including to how many learners they were awarded, and at which institutions.

Mr Mokgalapa asked for clarity on slide12 and informal settlement upgrades. He noted that the DHS had done separate calculations of achievements. To date, it appeared that 177 000 households had been upgraded, which was 44% of targets, yet inclusion of other figures brought the figure up. He did not understand how or why this was done. He emphasised again that in this report he had been expecting to hear about the fourth quarter performance. He also noted that by the end of the third quarter R2 billion of the R7 billion was spent on the USDG, and he was again unclear on the figures, because it was very difficult to make comparisons of quarterly and whole year spending.

Mr Mokgalapa asked that the confusion between transfers from the DHS and actual spending should be more clearly set out. The Committee had heard that Mangaung and eThekwini had not spent. The figures did not seem to show much consistency.

Mr Mokgalapa said that planning and setting of targets had to be improved, so that realistic targets were set and achieved.

Mr Mokgalapa said that in respect of RHIG there was no quantification of what the six new service providers had done to ensure that RHIG had achieved its purpose, and there was still an underspend, with no reasons given, and no indication that the new service providers had made any dent in the backlogs.

Ms Borman expressed her frustration overall with lack of clarity on the totals, delivery, and figures. The Committee had to be able to verify the figures. Looking, for example, at the page on the fourth quarter targets, there was mention that 40 targets that were not achieved. The next page listed 26 only. Overall, there was no correlation in the reporting and this was of concern.

She wanted to make a general comment. When speaking of upgrades of information settlements and rental accommodation, it was clear that the DHS was behind. Although the targets were 2014 targets, the DHS should have achieved around 80% by now, but none were close to this. She commended the HDA who seemed to be doing quite well, but noted that there was “hopeless underachievement” in the gap market. The Committee was particularly concerned on this point, the Minister had spoken about it and it was specifically raised in the budget speeches. She pleaded with the DHS that this sector should not be allowed to fall into similar difficulties as the RHIG. She also commented that, from slide 24, it did not appear that DHS truly appreciated the urgency of attending to sanitation. There had been three years of underspending and she urged the DHS to get things moving much faster.

Ms Borman also noted that the 20% allocated to priority projects seemed to be excluded from the report. She needed to know how that was being spent, on a regular basis.

Mr Bhoola said again that it was very difficult to correlate this information. The DHS had to act according to what it could do. The Director General was given an ultimatum to resolve certain challenges at a previous meeting. It was necessary for the DHS to specify exactly what had been done, between the third and the fourth quarter, and the Committee would have to establish whether that would tally with the entire report.

Mr Bhoola said that the fact of the matter was that the DHS still had to go back and resolve the issues of finances. The underspending on rural areas was of concern. The President had urged that the provinces who lacked capacity must be assisted. There had been information given at previous meetings on the changing of the grant schedules. The fact remained that the rural provinces were under-performing, and he asked what the DHS would do to correct this.

Mr Bhoola noted that the DHS had conceded that it needed better planning. He questioned why, in addition to being aligned to its own budget and strategic plans, there was not planning in line with the National Development Plan. This should provide guidance to the Committee.

Mr Bhoola said that this report did not correlate with reports of excellent spending that had been given by the eThekwini Metro on the previous day, and he had left the meeting to try to check which of the reports was in fact correct.

Mr Bhoola noted that there was quite a strong report on HDA. However, there were projects that were still blocked, and he asked what was happening on those. He also needed to know any developments in regard to expropriation.

Ms Sosibo noted the provincial reporting, but asked for further breakdowns on land release.

Ms Sosibo noted that “no” steering committee meetings were listed as held, and asked why.

Ms Sosibo referred to slide 49, which listed “savings” in Eastern Cape and Limpopo. She wanted more clarity on that point.

Mr Tshangana said that this money was not released because of poor performance.

Ms M Njobe (COPE) agreed with other Members' concerns, and said that normally the DHS was quite vigilant in producing quarterly reports, but she was disappointed in today's report. She needed the quarterly figures, for each of the quarters separately, to check how the Eastern Cape was doing. The media had reported that this province was far behind in spending.

Ms Njobe referred to slides 22 and 23 about the accreditation of municipalities and assignment of the functions to the metros. She noted that discussions had gone quite far, but her concern was that not all the metros were not on the same level as each other, as far as capacity was concerned. She asked what would be done to bring the lesser-capacitated metros to a point where they could fully utilise the USDG, and avoid the kind of problems seen in the past. It was necessary to move forward.

Ms Njobe also wanted to raise a point around training of artisans. Although the training was currently seemingly confined to artisans in the sanitation sector, she would like to see this extended across all skills and disciplines needed in the whole human settlements sector. She particularly stressed the need for construction skills, which were particularly important for the rural areas. In her view, DHS should be working with other relevant departments to ensure that rural populations, particularly young people, would be given skills, which would not only help them to improve their own living areas, but to develop skills for life.

Ms A Mashishi (ANC) asked for clarity on slide 18, with a provincial breakdown.

Ms Mashishi also sought clarity on land release of state land, set out on slide 17. Only some provinces were noted, and she asked about the others.

Mr J Matshoba (ANC) agreed with his colleagues that the DHS was ideally placed to monitor matters on the ground, although the Members did not have that information. He was concerned about creation of jobs and costs of material in certain projects. Officials at some districts were operating their own companies. The practicalities of the situation were difficult, and he cited some examples in his areas. He wanted more details on the precise nature of the job creation and was worried that there were some incorrect practices.

The Chairperson referred to page 2, which set out the heading “Departmental Fourth Quarter performance”, and a graph. She asked whether the targets set out were annual or quarterly targets. The Committee was concerned about the HSDF, HSSP and PPMU, which were the key delivery instruments in the Department. Corporate Services was also important. The Committee had specifically asked, in February, a number of questions, including whether the DHS could (as one example) give an assurance that by 1 April the vacancy rate would have been addressed. She would have expected to get feedback on that, particularly the filling of strategic vacancies. It was not only the PPMU where problems were apparent, but other units as well, and information and specific report-backs were needed.

The Chairperson noted that only 64% had been spent in Programme 3: Planning and Delivery Support. However, in the periods prior to that, the DHS had already indicated that it had been busy with planning, and so she would have expected to see substantial performance in this quarter. The DHS had said that there had been vacancies, but that this problem would be addressed. She pointed out that the strategic plan and budget were presented in March, and it was unfortunate that there was lack of alignment between performance and spending.

The Chairperson noted that private rental units were included in the figures given for affordable rental housing, but she questioned that since, as far as she knew, the DHS did not have any policy on private rental. There was only social housing rental, but she added that no rental strategy had yet been presented to this Committee, despite request. Housing Rental legislation had been brought to this Committee, which had been concerned that the proposals did not represent the holistic rental system, and she asked what would guide the DHS on private rental, and stressed that she was expecting reports on affordable rental housing subsidies only. 

The Chairperson referred to the State of the Nation Address 2011, which had noted that the construction industry was a known driver for job opportunities. This Address had also said that 400 000 households should have security of tenure by 2014. There was nothing on security of tenure, either in this document or in the oral report, and the information was needed. Access to basic services in the informal settlements was another target that had to be reported upon, separately and clearly. She pointed out that relocation of people to certain areas was not the same as upgrading, and the Committee should be able to get a good idea of all the concepts, with figures. Without that, the unfortunate impression was created that the Department was not very transparent in its reporting.

The Chairperson also asked, in relation to slide 9, what exactly had been done to improve monitoring and evaluation. A note that “a report has been drawn” was not enough; the Committee needed to know the content of the report and what it had achieved, in order to assess whether the DHS was performing properly. A mere statement that a report had been delivered was in effect meaningless. She added that the problems of delivery were clearly linked to problems of housing development. Members could not monitor properly if they were not apprised of the policies that were being implemented. She pointed out that the DHS was not supposed to be developing policies as an academic exercise for itself, but for the benefit of the country. Some implications of certain policies may become apparent, and the Committee was quite entitled to ask how the DHS could have, for instance, accredited a certain metro. Accreditation dated back to 2008 and it was essential to know the current status.

The Chairperson also raised questions on Servcon. There had been a dispute between Department of Public Works and Servcon, but the Committee still did not know whether that dispute had been resolved.

The Chairperson said more information was also needed on the training. She had thought that the CETA was under administration, but no reports had been given on that. The Energy and Water Services SETA had also reported that it had money for training on sanitation. She had expected the DHS to sign an agreement with this SETA, as it was equally crucial to the human settlements sector. Generally, she was critical that too little information was being given, and said that this was disturbing and out of kilter with the relationship that should exist between Department and Committee.

The Chairperson pointed out that the same report had been given in February, on the Special Investigating Unit (SIU), as the current report, with no indication on what had happened between February and now, and she wondered if there had been any attempts to address the cases.

Mr Matshoba asked for more clarity on the shifting of funds to Programme 5.

Ms D Duncan (DA) said she did not want to see this situation again, and asked that a very strong message be sent to the Director-General that this report was not acceptable. Ms Borman had correctly referred to section 32 of the PFMA and the DHS should have been well aware of the process, and what the report should contain. She had managed to get some clarity herself on the issues only by going through the excellent report prepared for the Committee by the Parliamentary Research Unit, to whom she wanted to express her thanks, and suggested that perhaps DHS needed to be given a copy of that report in order to comment. The DHS had to start reporting against SMART principles. Perhaps the Committee was speaking to the wrong officials, since not all were present.

The Chairperson said that she did not think if appropriate to release the Research Unit’s report to DHS - it should do the correct thing itself.

Ms Ngxongo commented on slide 4, on page 2. She sought clarity whether the Committee now wanted to get the finances aligned per quarter, to empower it to do a full comparison. When Members agreed, she said the DHS would now attend to that. Information would be given on the under-performance of the support branches as well.

She noted that the vacancy rate under the Corporate Services as at 31 March 2013 had improved. DHS had filled 568 posts, leaving 253 vacancies. These were in the process of being filled.

The Chairperson stopped her at this point, and said she was not expecting a full report on that now; the figures should be put in writing. She had cited the vacancies as one example of information that the Committee had expected to hear about, following the discussions on the Third Quarter report. 

Ms Dlakude said that it was clear that the DHS had come with the wrong report. She suggested that, instead of trying to address some issues, it would make more sense to release the DHS team, ask them to prepare a new and correct report, and, when it presented that, to address the issues raised today.

The Chairperson agreed that this would make sense.

Mr Tshangana agreed, and said that he would now attend to drawing a correct report, talking to Quarter 4 performance only. He understood that a comparison between quarters 3 and 4 spending was needed.

He did, however, think it necessary to clarify Mr Bhoola’s query about eThekwini. The municipality still had three months to spend its budget fully, because of the different financial year-ends. The report given to the Committee was a correct reflection of the spending to date (up to June), whereas the DHS report was up to the end of March.

The Chairperson said that this was an illustration of confusion that arose by the mixing of quarterly and annual figures.

Ms Borman asked that a comparison of the spending in each of the quarters, and the full spending in the fourth quarter, be given in the next report.

The meeting was adjourned.