The Social Housing Regulatory Authority’s oriented goals were to establish a well-skilled, resourced and ably led organisation, to support policy and sectoral leadership within the social housing sector, and to establish a functioning organisation for agents and entities delivering units that met a landlord’s responsibilities to the tenant.
The entity’s budget was allocated to four programmes: Administration; Compliance, Accreditation and Regulation; Sector Development; and Project Development and Funding. A comprehensive performance management process that included performance targets and standards would be developed and submitted for approval, plus the entity’s targets for obtaining an unqualified audit opinion for the 2016/17, 2017/18 and 2018/19 financial years. By the end of March 2018, the 2017/18 information management and information communication technology (ICT) action plans must have been completed and implemented.
For the 2017/18 financial year, at least 30 832 units would be registered and 90% of conditionally and fully accredited Social Housing Institutions (SHIs) would be asked to submit operational reports. At least 30% of the conditionally accredited SHIs, and 30% of the fully accredited SHIs, would be classified as Broad-Based Black Economic Empowerment (BBBEE) owned or controlled companies. Further, 6 000 social housing units would be delivered.
The National Home Builders Registration Council’s (NHBRC’s) goal was to improve cost effectiveness and internal efficiencies of operations through its ICT systems. The entity wanted at least 30 of their policies to be reviewed and implemented during the 2017/18 financial year, and 100% of their human resource strategy. In addition, a total of 68 402 units for homebuilders would be enrolled; a key satisfaction survey would be conducted; forensic investigations would be conducted within the prescribed 30 days from the date of receipt of appointment letters, and geotechnical investigations within 45 days. The NHBRC would train and develop 2 000 youths, 400 artisans, 300 people with disabilities, 2 000 homebuilders, and 400 learners would be registered in the learnership programme. The entity wanted to establishment a call centre, and to outsource the divisions of the inspectorate and a training academy.
Revenue would decline by 5% in 2017/18, which was mainly due to a decline in subsidy project enrolments. Cash operating expenses grew by 9.2% in 2017/18, compared to 2016/17, largely as a result of inflationary adjustments for the permanent staff, an increase in ICT costs, as well as an additional budget provided for an outsourced inspectorate.
The Estate Agency Affairs Board (EAAB) aimed to ensure that 100% of the registered estate agents were fully qualified in terms of legislative requirements by the end of the financial year. The entity would also develop and implement programmes to accelerate the achievement of at least 30% participation by people from a previously disadvantaged background in the profession of estate agents. The implementation of a research unit within the EAAB would be developed to support the transactional support function and to gain an understanding of illegal trading by estate agents.
The EAAB would assume the role of project management and secretariat support for the title deed restoration project (TRP). Further, a dedicated task team reporting directly to the Deputy Director General (DDG) of Programme and Project Management located within the Department, had been established. In addition, the entity would assume responsibility for the TRP dashboard, and offer a view and recommendations regarding the expected delivery and assessment of the performance of the current strategic plans. The levies had increased, but due to the limit in funding, spending on goods and services had been affected. However, 30 young graduates had been taken up by the entity through a Sector Education and Training Authority.
The Community Scheme Ombud Service (CSOS) would be resolving all community schemes’ disputes at all levels of the CSOS dispute resolution model. It would assume control of community schemes’ governance documentation, and all new developments would also be registered with CSOS. 700 disputes were targeted for resolution at specified service levels, as per the dispute resolution model. A database of all the existing and new schemes’ governance documentations would be recorded and created. At least 20 000 governance documentations would be reviewed and recorded on the database, and 20 000 certificates would be issued for community schemes’ governance documentation. A revenue management framework would be drafted and approved by the Board. 50 000 community schemes and their managing agents would be registered in the database. The approved budgets for the entity’s three programmes was R39 603 000, which was a decrease from the estimated budget of R57 348 000.
The Committee was concerned mainly about the entities’ transformation policies and plans, and how the plans would be implemented. There were also concerns around the slow transformation of the sector, in terms of the low number of black estate agents. The low target for the accreditation of BBBEE companies was worrisome for some of the Committee Members. It was asked that the training and development of women, youths and people with disabilities should be prioritised as a means of transforming the sector and attracting young people to it.
The Chairperson asked for a moment of silence as a mark of respect for the passing of Ahmed Kathrada. She announced that Ms V Bam-Mugwanya (ANC), who had missed her flight, and Ms M Mokause (EFF) had sent in their apologies and would not be attending the meeting.
Mr Mbulelo Tshangane, Director-General: DHS, said that Mr Neville Chainee, Deputy Director-General, would also not be attending the meeting due to other commitments.
Briefing by the Social Housing Regulatory Authority (SHRA)
Mr Rory Gallocher, Chief Executive Officer, said the SHRA’s strategic outcome oriented goals were focused on the following elements:
- to establish a well skilled, resourced and led organisation;
- to support policy and sectoral leadership within the social housing sector;
- to establish functioning and well-trained delivery agents/entities delivering units that met a landlord’s responsibilities to its tenants;
- to effectively regulate the social housing sector through a risk-based automated system;and
- to deliver social housing units that result in the restructuring of cities and integrated communities.
SHRA’s budget would be located to the entity’s four programmes -- Administration; Compliance, Accreditation and Regulation; Sector Development and Project Development and Funding.
Mr Nyameko Mbengo, Acting Deputy Director-General/Chief Financial Officer, said the 2017/18 corporate services targets would have an adherence of 80% to their strategic human resource plan’s action plan. The action plan would include work to be undertaken and timeframes. SHRA also planned to implement a comprehensive performance management process that included performance targets and standards. The Authority was targeting on obtaining an unqualified audit opinion from the external auditors for the 2016/17, 2017/18 and 2018/19 financial years.
By the end of March 2018, 80% of the 2017/18 information management action plan and the information communication technology (ICT) action plan had to be implemented. The state of the sector report, including a research plan for the following financial year, would be tabled at the Executive Committee (EXCO) by the end of March 2018. This was also the deadline for 80% of the annual research plan to have been completed, plus a 70% achievement of the stakeholder management matrix. The state of the sector report would be released by Ministers and Members of Executive Council (MinMec) once it had been approved.
Mr Gallocher said a social housing regulatory plan for 2018/19 would be developed and submitted in accordance with the Social Housing Act by the end of March 2018. During the 2017/18 financial year, 30 832 units would be under registration and 90% of conditionally and fully accredited Social Housing Institutions (SHIs) with stock would be asked to submit completed quarterly reports to SHRA. It took an average of 60 days to table an intervention plan to EXCO for non-compliant SHIs from the date of tabling the monthly compliance report at EXCO that identified those which were non-compliant. At least 30% of the conditionally-accredited and fully-accredited SHIs would be classified as Broad-Based Black Economic Empowerment (BBBEE) owned or controlled companies, as defined in the BBBEE Act. 75% of the SHIs who received an Institutional Investment Grant (IIG) should have maintained their level of accreditation or improved on their level of accreditation from the date the grant was approved at EXCO, unless the SHI lost its accreditation status or if it dropped. At least 75% of the projects that received an IIG would be recommended to the Technical Evaluation Committee (TEC) for a capital grant award.
In terms of the funding programme, 6 000 social housing units would be delivered during the 2017/18 financial year. It would take an average of three months for a tenant to occupy a unit from the time a unit reached practical completion within the 2017/18 financial year; 12 000 social housing units would be approved for the capital grant award and at least 95% expenditure of the 2017/18 Consolidated Capital Grant (CCG) would be allocated. The Social Housing Investment Plan for 2019/20 would be developed and submitted, in accordance with the Social Housing Investment Act, by the end of March 2018. At least 15% of the CCG allocation for 2017/18 would be awarded to other delivery agencies, and 50% of the CCG allocation would be awarded to BBBEE qwned/controlled companies.
Mr Mbengo added that the Medium Term Expenditure Framework (MTEF) budget for the 2017/18 financial year was R926.963 million. The MTEF comprised of the consolidated capital grant; operations; regulations and institutional investments. The consolidated grant had been allocated with R851.658 million; operations R46.815 million; regulations R8 million; and institutional investments had been allocated R20.49 million.
Mr H Mmemezi (ANC) said the report was informative and promising, and it looked like SHRA was determined to make improvements. However, the entity should not forget that the African National Congress’s main focus was to empower the previously disadvantaged, so he believed that a target of 30% for accreditation of BBBEE companies was not enough to improve the lives of these people. There was still an enormous gap between the rich and the poor. He asked for clarity on why SHRA had chosen the target of 30% for accrediting BBBEE companies, and why only 50% of the CCG grant was allocated to BBBEE companies.
Ms T Baker (DA) asked if the entity had sufficient accreditation specialists and compliance officials to help it reach its accreditation target; what the initial targets for social housing units and the social housing units approved for the capital grant were; how far the entity was with getting the Social Housing Investment Plan approved; and what percentage of the total budget did the CCG make up?
Mr K Sithole (IFP) asked why the entity described itself as a new organisation. How far were they with the relocation of hostels under the entity, and why did SHRA think that their targets for the delivery of social housing units were achievable?
Ms L Mnganga-Gcabashe (ANC) said that the entity had improved – the Department, board and the executive management had been working very well together to turn the entity around. She said that the target for the annual research plan should not be the same percentage for all three financial years, but should increase every year once they had reached the previous year’s target. The entity should hire graduates and allow them to work with consultants as a means of transferring skills and knowledge. SHRA should try by all means to stop outsourcing goods and services, which should be provided internally.
The Chairperson said that only 65 SHIs would be receiving BBBEE certificates, and questioned whether this would be enough to transform the property sectorThe Social Housing Regulatory Plan needed to be guided by a timeframe. How would the Department and provincial departments work together to ensure that, although the CCG would not fall under the SHRA, the stakeholders continued to work well together without constraints?
Mr Gallocher replied that the 30% target was indeed conservative. The SHRA had an unaudited baseline, meaning that based on the data it had collected from its database, it showed that only 65 accredited companies had not been awarded as yet. It was confident that it would exceed the 30% accreditation target, but it could be revised only once it received its audited data. The sector had a reputation of being untransformed due to the fact that some of the accredited companies responsible for the best performance, in terms of production, had the appearance of being untransformed.
The 50% for the CCG allocation could be explained. What happened was that most contract awards for funding had shifted towards conditionally accredited SHIs that were more representative from a numerical perspective. There were only 13 fully-accredited SHIs, and these took up most of the budget. The 50% did not comprise only the contracts to transform SHIs, but also some of the small contracts.
The SHRA did not have enough human resources to accredit the companies, but it had an efficient structure to monitor the employees who had to carry out these services. The entity did not have a target for the number of SHIs it accredits, because in the beginning there were eight SHIs, which had eventually grown to 13 SHIs, and now there were 65 SHIs. Consequently, it no longer focused on having a target of SHIs to be accredited, but rather accredited the SHIs according to the quality of work and capacity building. The first step in having the investment plan approved involved presenting the Performance Improvement Plan to the Investment Committee and Council in April 2017. Once the Investment Committee and Council approved it, a final plan would be presented in October 2017. Research plans often took longer than a year to complete, and when the year ended before the completion of the research plan it created the impression that the target had not been achieved. The SHRA had been in consultation with Wits University to try and hire more black consultants.
Mr Mbengo said SHRA and the provinces had been in consultation regarding the development of a task team who would be responsible for setting out a plan relating to how the entity and provinces would ensure that they worked as a team.
Mr Tshangane added that the amalgamation of the social housing and the restructuring capital grant (RCG) into the SHRA would help to create an easier way to administer funding for social houses. The provincial steering committees would be responsible for management of the RCGs, and would also be responsible for the approval of projects in the provinces and manage the other aspects of the institutional subsidies.
Briefing by National Home Builders Registration Council (NHBRC)
Ms Thandiwe Ngqobe, Acting Chief Executive Officer, said the NHBRC had a total of five programmes -- administration and governance; regulation and protection; legal, compliance and enforcement; Centre for Research and Housing Innovation; and the Warranty Fund.
In terms of the administration and governance programme, the NHBRC aimed to improve cost effectiveness and internal efficiencies of operations by achieving a 95% uptime on their ICT systems. In addition, 30 of their policies would be reviewed and implemented during the 2017/18 year. 100% of their human resource strategy, which was in line with their project plan, would be implemented.
In terms of regulation and protection, 4 035 homebuilders would be registered; 12 130 homebuilders would have their registrations renewed; 50 660 homes would be inspected in the non-subsidy sector; and a total of 17 947 units for projects would be enrolled. A total of 68 402 units for homebuilders would be enrolled; a key satisfaction survey would be conducted; forensic investigations would be conducted within 30 days from the date of receipt of the appointment letter; and a geotechnical investigation would be conducted within 45 days from the date of receipt of the appointment letter.
In terms of legal compliance and enforcement, an annual compliance plan would be implemented. The five-year strategic corporate plan for 2014-2019 was for an average of 160 days to be taken to prosecute a defaulting homebuilder from the date of suspension, but for the 2017/18 year the NHBRC target had been cut to only 120 days.
In terms of the Centre for Research and Housing Innovation, six technical papers would be published; the entity would train and develop 2 000 youths; 400 artisans would be trained and developed; 300 people with disabilities would be trained and developed; 2 000 homebuilders would be trained and developed and 400 learners would be registered in the learnership programme. In addition, 450 military veterans would be trained and developed, and nine innovative building technologies as per the research agenda would be implemented.
In terms of the Warranty Fund, the suppliers would be paid within 30 days. A 100% resolution of the audit findings would be implemented, and 51% of the BBBEE fund would be spent.
The total budget available for the Council’s top ten priorities were as follows:
- Leader in knowledge creation: R20 million;
- Products and service budget: R2 million;
- Review of the operating model: R1 million;
- Review of legislation: 500 000;
- The SAP change request: R9 million;
- Investment strategy: R500 000;
- A clean audit: R4.5 million;
- Social transformation strategy: R10.8 million;
- Strategic capacitation of the NHBRC: R1.5 million; and
- Visibility and accessibility: R25 million.
Some of the key business activities for the year were the establishment of a call centre, which would cost the entity R5 million; outsourcing of an inspectorate would cost the entity R10 million for the first year, and R30 million for the next three years; a training academy, which would form as part of a turn-around strategy, would cost R91 million over three years; and the upgrading of reception areas across all provinces would cost R5 million for three years.
Regarding the model budget, the forecast for the 2017 budget was R892.422 million, the budget was R948.146 million and the model budget was R1 041.148 million. The adjusted budget for the 2017/18 financial year was R896.175 million. The budget included insurance premium revenue; subsidy project enrolment; fee revenue; technical services revenue and other incomes. The revenue would decline by 5% in 2017/18, and this was mainly due to a decline in subsidy project enrolments. Cash operating expenses would grow by 9.2% in 2017/18, compared to 2016/17, largely due to an inflation adjustment for the permanent staff, an increase in ICT costs, as well as an additional budget provided for the outsourced inspectorate. Operating profit declined by 1.2% in 2017/18 due to the above.
Mr M Malatsi (DA) said the entity must create a sustainable environment, and in doing so it should attract highly skilled individuals. He asked for a breakdown of the actual positions that were held in the organisation, and how far the entity was with the establishment of mobile offices.
Mr Mmemezi said South Africa had been doing well in improving human settlements, to the point where other African countries had adopted its policies to deliver human settlements. The training and development of artisans was very important, so the target should be revised -- and perhaps the entity should set a higher target.
Ms Baker asked how the effective regulatory requirements targets were determined; how many defaulting homebuilders the entity was currently dealing with; what processes were involved with the training and development of artisans, since it required a lot of technical work; and on a national basis, how many inspectors did the entity have?
Ms Mnganga-Gcabashe said the entity should provide a breakdown of the number of women, youths and military veterans that would be trained and developed. The training of artisans was very important, but the entity should also target training more black people. There had been complaints that the innovative technology of pilot projects had failed to control the dampness of the walls. The research plans should also take note of this matter.
The Chairperson said it was important that the entity presented the final draft of the Transformation Charter. The budget for the social transformation strategy was a little over R10 million, and she asked if this amount would be enough to transform the sector. The training of women through the Gordon Institute of Business Sciences (GIBS) was a good idea, and the Committee would like a report on how far the entity had come with the programme.
Ms Ngqobe replied that the one thing the entity had committed itself to keeping separate was the processes of inspection and the processes of homebuilders. In addition, they had conducted a fraud programme where the activities of fraud were explained, as well as the disciplinary processes taken against fraud activities. The reality was that in the process of trying to contain costs, the entity was also losing experienced female engineers to companies that offered higher salaries. Homebuilders and the internal technical staff were trained, based on an analysis of the compliance issues. The transformation strategy budget relates only to women’s empowerment. The training of youths and military veterans would remain with the Centre for Research.
Mr Shafeeq Abrahams, Chief Financial Officer, said R10.8 million was for only one programme. What this meant was that the Transformation Charter would influence only every other rand, except for the salaries. The entity was aware of the skills challenges, and was developing ways to try and meet the highly professional skills with high salaries. There were 40 heads in the top management structure, while the rest of the employees were technical advisers and engineers.
Ms Sharon Horton said there were two mobile buses that had been completed and were fully operational. The idea was to ensure that communities knew of the NHBRC and what services and goods it offered. The entity had inspectors situated in all the provinces who were tasked with the inspection of projects. Through research that had been conducted, it had been found that the Innovative Building Technologies, (IBTs), were suitable only in a particular micro climate. She was not sure of the type of research that had been done before the implementation of the IBT had started. Once the entity had investigated the cause and assessed the research, it could respond to the question.
Dr Awelani Malada, Head of Strategy; NHBRC, said a bottom-up approach had been devised to set the targets. A five-year strategic plan, the MTFS and targets for the 2017/18 financial year had been presented. The targets for youth, women and military veterans had previously been presented under one programme before the Committee had suggested that it be separated into three categories.
Mr Tshangane said that an IBT must receive an Agrèment SA certificate, an approval by the NHBRC and the Department. The IBT must comply with all sorts of climatic conditions for the IBT to be approved. The IBT in Delft would have to be inspected, and if it was found that the contractor had not complied with the standards, then the contract would have to be terminated.
Briefing by Estate Agency Affairs Board (EAAB)
Mr Bryan Chaplog, Chief Executive Officer, said the Medium Term Strategic Framework (MTSF) included the expanded mandate of the EAAB in respect of the National Development Plan 2030 vision and trajectory. This was reflected in the Outcome Number 8, which referred to “substantial and improved quality of household life.” In respect of the MTSF, the Department was required to ensure a sustainable residential property market based on the EAAB’s responsibilities, such as: intensifying homeownership induction programmes for the affordable housing market; establishing transactional support for the affordable housing market; monitoring and reporting transactions in the secondary housing subsidy market; collecting analysis and disseminating information on property trends and values; and developing a policy and administration systems. The strategic oriented outcome goals included 100% compliance with all relevant legislation from all estate agents, and the EAAB had to ensure that at least two million consumers were made aware of property transactions through the appropriate media platforms by the end of 2018/19, and continue to ensure that the Fidelity Fund was efficient and effective.
The EAAB would ensure that 100% of the registered estate agents were fully qualified in terms of legislative requirements by the end of 2017/18, and that the entity developed and implemented programmes to accelerate the achievement of 30% participation of those with a previously disadvantaged background in the profession of estate agents. The entity’s priorities for 2017/18 included assisting the Department in the eradication of the title deeds backlog by 2019; implementation of a research unit within the EAAB to support the transactional support function and gaining an understanding of illegal trading by estate agents; implementation of the new transformation function activities and outputs; and ensuring that MTSF targets were achieved.
Mr Anton Carelse, Executive Manager: Business Operations, said in terms of the Title Restoration Project (TRP), the Department had initiated a programme for the eradication of the pre and post 1994 title deeds backlog. The programme would be continued and the intention was the current programme would result in the eradication of the backlog as at July 2014. In support thereof, the EAAB had, and would continue, to avail itself as project management and secretariat support to the TRP. A dedicated task team, comprising of the EAAB and Departmental officials had been established, and located within and reporting directly to the DDG of Programme and Project Management within the Department. The task team’s responsibilities included access to all records related to the registration backlog within provinces and metro cities; assuming responsibility for the TRP dashboard; offering views and recommendations regarding expected delivery; and being party to all new appointments of service providers (SPs) and the assessment of the performance of current SPs.
Mr Chaplog said their 2017-2019 transformation strategy inputs were to drive transformation both internally and externally to ensure compliance with applicable legislation, like the Employment Equity Act, BBBEE and the Property Charter Council. It would ensure that barriers to entry were reduced; and position and sustain those inside the retail business and engage with the Department of Public Works to ensure that previously disadvantaged individuals (PDIs) participated in the real estate sector. The EAAB planned on starting a real estate incubator for small struggling estate agencies, and for the rehabilitation of non-compliant estate agencies and the empowerment of the youth, women and people with disabilities. It also intended to promote consumer education, awareness and protection by engaging with other stakeholders in the property value chain, like finance providers. He said that he would not go through the annual targets, as they had been presented to the Committee at a previous meeting.
Ms Funani Matlatsi, Chief Financial Officer: Department of Human Settlements (DHS), said the levies had increased, and due to the limit on funding, spending on goods and services had been affected. However, 30 young graduates had been taken up by the entity through a Sector Education and Training Authority (SETA). The administration and staff costs would both increase due to inflation.
Mr L Khoarai (ANC) asked what type of media platform the entity had used to acquire the 30 graduates.
Mr Sithole asked if the entity had programmes dedicated to the development of women and youths. What criteria would the consumer protection and awareness campaigns follow? The entity spoke to transformation, but there did not seem to be a plan or policy which would assist the entity to plan for transformation.
Ms Baker asked what the role of the SA Police Service (SAPS) was with regards to the irregular sale of homes, and how the Department was assisting SAPS to identify what an irregular or regular sale was. She also asked what the difference between the forecast budget and the actual budget was.
Mr Malatsi said most of the presented transformation plans dealt with the external environment, and the internal transformation seemed to have been forgotten. He asked if there were plans to investigate and stop estate agents who discriminated against potential buyers by excluding them.
Mr Mmemezi said the Committee would like some proof of how the Board had tried to transform the legacy left by apartheid. The estate agency sector was still controlled by the minority group. He asked how far the entity had gone to transform the sector. Were places like Camps Bay, which had a property value of billions, still excluding black estate agents from selling properties in that area?
The Chairperson asked how far the entity was with the ‘One learner, One estate agent’ programme, since it formed part of the entity’s transformation strategy. How did the real estate incubator differ from the already established estate agents, and what were the timeframes related to the incubator programme?
Mr Silence Mmotong, Chief Financial Officer, replied that the 30 graduates were part of an internal programme, where graduates were placed in different departments. The Services SETA was co-funding the graduate internship programme. The administration expense had increased, but when analysed in real time, this could be regarded as a decrease due to the inflation rate. The employment equity plan had been revised, and as a consequence there were more women who held top executive positions.
Mr Nkosinathi Biko, Chairperson of the Board, said there were four elements to the entity’s transformation. Firstly, the internal transformation included the employment of the Employment Equity Act (EEA) and preferential procurement. Secondly, the entity was tasked with transforming the sector as a whole, and this was being done through sector policies and plans. The entity’s objectives sought to achieve transformation of the ownership of the sector, in terms of which there was transformation of the culture of how the sector operates. The ‘one learner, one estate agent’ programme had been a challenge in terms of how it should improve the retention of young learners in the industry.
Mr Carelse said the issue raised around the SAPS could undermine the objectives of the TRP by perpetuating “informal sales”, vetting or authorising illegal sales. The Human Settlements Development Grant (HSDG) continued to remain a purposefully allocated grant to provinces.
Mr Tsepiso Moloi, Chief Director: Department of Human Settlements, said access to information and awareness for the previously disadvantaged, including women and people with disabilities, was very important. The focus was also to establish these campaigns in rural areas and townships where the previously disadvantaged were located.
Mr Tshangane announced that Mr Chaplog was leaving his position as CEO of the EAAB, and would be joining the management of the Housing Development Agency (HDA). In terms of transformation, the sector was unfortunately still being governed by the 1976 Act. In terms of the Properties Practitioners Bill, the Department had a number of levers it could use, such as tightening up the process of issuing of licences. It had been proposed that a real estate fund should be created. The fund would operate as a Section 21 company, and its role would be to focus on transformation functions.
Briefing by Community Schemes Ombud Service (CSOS)
Mr Themba Mthethwa, Chief Ombud, said the CSOS’s strategic objectives included providing a dispute resolution service to community schemes in SA; taking custody and control of community schemes’ governance documentation; ensuring that CSOS was an efficient and effective organisation; promoting good governance and providing stakeholder training, consumer education and public outreach. The above objectives had been established under three programmes of the CSOS – administration, regulation, and education and training.
In terms of dispute resolution, the CSOS would be resolving all community schemes disputes at all levels of its dispute resolution model. With regard to the schemes’ governance documentation, CSOS would assume custody of community schemes’ governance documentation. All new developments would also be registered with the CSOS. In terms of the training and development, CSOS would continue with stakeholder engagement and roll out public outreach and awareness activities. In terms of sustainability and efficiency, it would collect levies from community schemes to ensure the sustainability of the organisation.
With respect to dispute resolution, 700 disputes were targeted for resolution at specified service levels as per the dispute resolution model, and the budget for the target was R9.817 million. A database would be recorded and created of all existing and new schemes’ governance documentation as received from the community schemes and other entities. A schemes’ governance and records management and documentation system would be implemented, and the CSOS would ensure that the documentation was adequately secured, protected and easily accessible. At least 20 000 governance documentations were targeted to be reviewed and recorded on the database, and 20 000 certificates would be issued for community schemes’ governance documentation that had been quality assured. The budget that would be used for the target was R4.845 million. A revenue management framework would be drafted and approved by the Board, and a review of existing policies, to ensure their adequacy, would be completed. The cost of these targets was R35 000 and R1 200 000, respectively.
In terms of good governance, a framework for Community Schemes governance documentation would be developed; 50 000 community schemes and their managing agents would be registered in the database, costing R1 200 000.
Mr Themba Mabuya, Chief Financial Officer, said there were four income streams for the 2017/18 financial year: the government grant was R29 400 000; the CSOS levy income was R25 000 000; interest income was R2 448 000; and other incomes were R500 000. The approved budgets for the three programmes were R39 603 000, which was a decrease from the estimated budget of R57 348 000. The approved administration budget was R17 289 000; the regulation budget was R17 469 000; and the education and training budget was R4 845 000.
Ms Baker said there was a huge difference between the estimated and actual budget; how would this impact on the entity’s strategic objectives? She asked how the entity determined the target for the number of certificates which needed to be issued, and how many community schemes were actually operating.
The Chairperson commended the entity on its decision to partner with SHRA to assist them with the tracking of community schemes. The entity seemed to be successfully dealing with the dispute resolutions – how many dispute resolutions had it resolved out of the number of disputes that had been logged?
Mr Mthethwa replied that these were disputes that had been logged in relation to arbitration, which needed the intervention of the courts.
Mr Mabuya said there two types of budgets -- the estimated and the approved budget. The estimated budget was compiled by the internal staff by estimating how much money it would need to reach its targets. After extensive consultation with the National Treasury, it had been recommended that the levy projection be reduced from R25 million to R8.5 million. This had had an impact on the adjustment budget.
Ms Matlasti replied saying while the department had assisted the entity during the 2016/17 financial year in terms of the conditions that were recommended the R6.1 million had to be put against the adjustment budget.
Mr Tshangane said it was important to point out that the R6.1 million was a bailout for the entity to assist them with paying salaries. The Committee had asked the Auditor General and CSOS to present the audit status of the entity, but the AG had wanted the entity to attend to some issues first, such as the capacity of the organisation at the operational and strategic level.
Adoption of Draft Minutes
Mr Memezi moved the adoption of the minutes of 14 March.
Ms Baker second the motion.
Mr Memezi moved the adoption of the minutes of 17 March.
Mr Sithole seconded the motion.
The minutes were adopted.
The meeting was adjourned.