In a virtual meeting, the Department of Human Settlements presented its quarter two and three performance for the 2020/21 financial year.
In quarter two, the Department received an unqualified audit outcome with no findings on its financial statements. The Housing Consumer Protection Bill 2019 was further revised and updated. The Human Settlement Development Bank Bill was redrafted and tabled before the Social Cluster for public comments.
Departmental performance increased by 8% in quarter two as compared to quarter one. The Department managed to achieve 62% of its set targets, 20% of the targets were partially achieved and 18% were not achieved.
During the lockdown, the Department took an initiative to de-densify the densely populated informal settlements in nine Provinces by constructing Temporary Relocations Units (TRUs). Provinces reported an expenditure of R5, 3 billion (35% of total available funds) and that yielded 25 828 (9 373 sites and 16 455 units) of the 34 649 housing opportunities.
The total expenditure that was allocated for quarter three was R29 079 019 and only 61% of it was spent. The Department spent 51% of the allocated operational expenditure. The Department spent 118% of the allocated COVID-19 money from the operational budget. The overall Departmental Performance increased between the second and third quarter with 5% and was sitting at 67%. The Department achieved 67% of its targets, 28% were partially achieved and 5% were not achieved during the third quarter of the financial year.
Members raised concerned with the title deeds programme pointing out that provincial performance in respect of title deeds restoration was unsatisfactory. It was stated that the failure to issue title deeds was necessitated by the fact that most areas have not yet been declared as townships and provinces cannot issue title deeds before the township declarations.
Concerns were also raised with regards to the 30% grant set aside for women and youth. Members indicated that provinces were not implementing the directive regardless of several promptings from the Committee.
The Committee raised concerns with regards to overspending in the Western Cape and also the Housing Development Agency’s (HDA) failure to submit financials to the Department. Members urged the Department to put in place monitoring mechanisms to ensure that transferred funds to provinces are accounted for and HDA submits its financial and non-financial performance reports in time.
Opening remarks by the Chairperson
The Chairperson welcomed Committee Members to the meeting. She noted that the Committee had invited the Department to brief Members on the second and third quarter performance reports.
She requested that the Members observe a moment of silence, prayer and meditation for the country, that it be able to defeat the COVID-19 pandemic. She said the Committee should pray for the people of South Africa who have lost their loved ones to the pandemic and wished all those affected a speedy recovery.
The Chairperson moved for the adoption of the meeting’s agenda and the agenda was adopted.
The Committee Secretary told the Chairperson that there were no apologies for the day and reminded the Committee that Mr Ngwezi (IFP) was no longer with the Committee and there was a Member who was to join the Committee as his replacement. She indicated that Mr M Mabika (DA) was also no longer with the Committee and that the Committee was still waiting to hear from the Democratic Alliance on who will be the replacement.
The Chairperson said on the list it appeared that Ms S Buthelezi from IFP would be in the meeting. She asked if Ms Buthelezi was in the meeting.
The Secretary indicated that she did not have Ms Buthelezi’s details and was still waiting for IFP to forward the details.
The Chairperson welcomed the Department and the Director-General (DG) to the meeting. She said the Department would present on the two quarters because they were interlinked. After the presentations, Members will then be given an opportunity to engage with the Department.
Opening Remarks by Deputy Minister
Deputy Minister Pam Tshwete stated that the Minister had attended the Cabinet Committee Meeting and she did not know why there was no written apology.
The Deputy Minister indicated that she was going to highlight the reports and then hand over to the DG who will lead on both presentations. The DG would also introduce the team from the Department of Human and Settlements, Water and Sanitation.
She highlighted that the Department was going to present on the second and third quarter financial and non-financial reports for the periods July-September and October-December 2020 respectively.
She reminded Members that these two quarterly reports sum up the performance of the Department during the time when COVID-19 essentially led to the shutdown of the economy through the hard lockdown and the adjusted alert levels lockdowns. In addition, when the Department appeared before the Committee in May 2020 to present the medium term strategic framework and annual performance plan, the Department did report to the Committee that it had been directed by National Treasury to adjust the plans in line with the realities of COVID-19 and impact on the work of the Department. The Department adjusted the plans and revision of the budget could only mean one thing; the scaling down of targets.
Deputy Minister Tshwete reminded Members that the Department appeared before the Committee and was turned back to adjust the report. The Department appeared again before the Committee to present the adjusted report. She said the Department now has a fair sense of the issues that the Portfolio Committee raises from time to time with it.
She highlighted that during the lockdown, the Department undertook the scaling up and upgrading of informal settlements in nine provinces and the provision of services for beneficiaries in the informal settlements. However, the title deeds restoration programme has remained one of the concerning areas. Most of the provinces have been producing unsatisfactory levels of performance in the area of title deeds restoration.
She acknowledged that the situation has been worrying and Members of Parliament have been telling the Department that it is not doing well. She indicated that even the National Department was not happy with the performance of provinces on the issue of title deeds.
She said it has been concerning that the majority of provinces continue to disregard the directive on the 30% set aside for women and 10% set aside for the youth. She recalled that the Portfolio Committee has been asking the question several times and the provinces that are performing better in that area are Mpumalanga and Limpopo.
She reiterated that these two areas of concern remain the areas of focus for the Department.
The Deputy Minister reminded the Committee that the Human Settlement Development Grant (HSDG) had been reduced significantly even before the COVID-19 lockdown. As a result, the Department is making a concerted effort to address the non-expenditure of these grants.
The Deputy Minister explained that she has been leading provincial road shows and reporting to provincial heads so as to sensitise Provinces that are not performing well in terms of utilising finances. The road shows have been focused on the 30% and 10% set aside for women and youth respectively, the title deeds restoration programme, the military housing programme and update on mining towns. During these road shows, the Department had three provinces that caused sleepless nights as far as performance is concerned and these are; Eastern Cape, Limpopo and Free State. She indicated that it was important to mention that, as it would come up in the presentation and there was no need to hide these challenges.
She indicated that there are other provinces that are doing well and these are Western Cape, Northern Cape and Gauteng. However, the Department was worried that there was no balance between money spent and the number of houses erected. She confirmed that the Western Cape always spends 100% of the money and the Department needs to see the output of the money that the province would have used.
She said during provincial road shows, the Department has been encouraging provinces to come up with recovery plans in identified areas of weaknesses. It was during these road shows that many of the provinces have made remarkable effort on the performance of their respective departments.
Deputy Minister Tshwete stated that in spite of the setbacks to the original plan, the Department has been able to achieve 62% of its original targets for the second quarter and 67% for the third quarter. She reiterated that that the DG will present on the full picture of the Department’s performance for the period under review.
Mr Mbulelo Tshangana, Director-General: Department of Human Settlement, thanked the Deputy Minister and Chairperson for the opportunity to present. He commended the Deputy Minister on doing a good job in giving a summary of the reports but stated that there is a need to get into detail of what happened in the quarters under review.
Report on the DHS performance for the quarter ending 30 September 2020 (Quarter Two)
The DG led the Portfolio Committee through the presentations.
The Department received an unqualified audit outcome with no findings on financial statements. The Housing Consumer Protection Bill 2019 was further revised and updated. The Human Settlement Development Bank Bill was redrafted and tabled before the Social Cluster for public comments.
During the lockdown, the Department took an initiative to de-densify the densely populated informal settlements in nine Provinces by constructing Temporary Relocation Units (TRUs). The Department’s overall budget was adjusted and that had an impact on performance. The overall financial expenditure for the Department was 35% of its allocated budget.
Under operational expenditure, the Department spent 184% on COVID-19 which was higher that the initial projections. Departmental performance increased by 8% in quarter two as compared to quarter one. The Department managed to achieve 62% of its set targets. 20% of the targets were partially achieved and 18% were not achieved.
The Human Settlement Development Grant Expenditure Performance for the quarter was represented by a table which shows that the Department transfers were at 52% and the percentage spent vs transferred funds was at 68%. Western Cape was overspending against the initial allocation. Provinces reported an expenditure of R5, 3 billion (35% of Total Available Funds) and that yielded 25 828 (9 373 sites and 16 455 units) of the 34 649 housing opportunities.
The Department is generally dissatisfied with the performance from some of the provinces such as Free State, KwaZulu-Natal and Limpopo. There are engagements underway to afford affected Provinces an opportunity to present recovery plans.
R377, 8 million has been reprioritised from the 2020/21 Title Deeds Restoration Grant and allocated to the Provincial Emergency Housing Grant to cater for impacts of COVID-19. R70, 8 million was approved for allocation to the Northern Cape for the provision of 1 100 TRAs.
The Department faced a number of challenges the main being that provinces and municipalities are not spending within the stipulated time periods.
Report on DHS performance for the quarter ending 31 December 2020 (quarter three)
The Department developed an audit action plan to address the 2019/20 audit findings which is monitored quarterly. The Department received the final certification from the Chief State Law Advisor to introduce the Housing Consumer Protection Bill to Parliament. A pre-certification legal opinion from the Chief State Law Advisor and the Socio-Economic Impact Assessment System (SEIAS) report on the Human Settlements Development Bank Bill were also received.
The total expenditure that was allocated for the third quarter was R29 079 019 and only 61% of it was spent. The Department spent 51% of the allocated operational expenditure. The Department spent 118% of the allocated COVID-19 money from the operational budget.
The overall Departmental Performance increased between the second and third quarter by 5% and was sitting at 67%. The Department achieved 67% of its targets, 28% were partially achieved and 5% were not achieved during the third quarter of the financial year.
Only Eastern Cape and Free State had green indicators in terms of performance sites. Mpumalanga and Gauteng had green indicators on performance units.
The Department will introduce a number of interventions such as strengthening the project readiness and pipeline projects and strengthening monitoring mechanisms to ensure that provinces are implementing the projects that are in the approved business plan. A request was sent to National Treasury to convert R100 million from the Provincial Emergency Housing Grant to the Municipal Emergency Housing Grant.
The Department is in the process of addressing the identified monitoring and oversight deficiencies across the sector.
The Chairperson thanked the team from the Department for its presentation and welcomed back the Chief Financial Officer (CFO). She invited Committee Members to engage with the presentation and opened the floor for discussions.
Ms R Mohlala (EFF) raised questions on the second quarter performance report. She asked how the R300 million allocated to Social Housing Regulatory Authority (SHRA) will provide relief in the affordable housing sector.
She indicated that the Committee should take note of the incorrect classification of R126, 7 million transferred to the National Housing Finance Corporation (NHFC) by the Department. What was the amount allocated for specifically?
She said looking at the third quarter report, the report shows that the money spent does not correlate with the percentage of the work done. In provinces like Eastern Cape, the report shows that the money spent is more than the work that was done according to what the province had planned. In the presentation slide, the Department said it will do a reallocation of the funds of those municipalities failing to spend money. Her questions were what did the Department do? Without this reallocation of money, is there an investigation taking place on why there is no correlation between the two? Is there any consequence management because it seems someone is “chowing” the money because plans must always go with the amount of money and the work done?
She stated that the Department cannot just go and spend money. When the Department says it will build ten houses with a budget of R10 million ends up building five houses from the same money, there must be some consequence management taking place. The Department therefore has to tell the Portfolio Committee of the investigation processes that are taking place in that regard.
Ms Mohlala highlighted that the Human Settlement Department has not touched R600 million in rental relief to tenants. She had seen that somewhere and the Minister had also talked about it. The Minister had said she is busy with the policy framework for residential rent relief scheme programme that is being developed by the Department. She asked how far the Department was with the policy framework and if it has already been finalised, how many people were assisted by the programme?
She recalled that from the presentation, the Department withheld the HSDG transfers to three provinces due to non-compliances with the reporting requirements prescribed by the Division of Revenue Act. The affected provinces were North West in October, Eastern Cape and Free State in November. She said transfers had resumed for all provinces but what were the factors attributed to the failure by provinces to adhere to the requirements set out in the Division of Revenue Act? How have these challenges since been addressed?
She indicated that the Committee had been told that there will be a reallocation of money but Members were not told of the reasons for the failure by the Provinces to spend their money in the first place.
Ms S Mokgotho (EFF) said R11 billion was budgeted to alleviate the backlog of housing in the country yet only R9.8 billion was spent leaving a lot of people homeless. The underspending of R1.2 billion occurred due to lower grant transfers for HSDG and the Urban Settlement Grant. Why did the Department not intervene timeously to prevent the under expenditure in programme two? Why did the Department fail to timeously capacitate the North West province to prevent consistent non-compliance with the requirements prescribed by the Division of Revenue Act which resulted in the transfer of HSDG and Urban Settlements Development Grant (USDG) being lower than projected? Why were amendments made to the payment schedule of each grant? Did the Department put in place corrective measures for the submission of credible claims in future to avoid or prevent lower conditionality grant transfers?
She noted that the main appropriation for bursaries for non-employees was reduced from R8.1 million to R4.1million in the special adjusted budget. Actual expenditure in the second quarter for this item totalled R300 000. She asked what the nature and purpose of this programme was and how many bursaries were awarded during the current financial year?
She said the third quarter expenditure for programme three was R31.1 million higher than projected primarily due to higher than anticipated transfers of the emergency housing grant. To what extent, if at all were these transfers related to the COVID-19 pandemic?
Ms Mokgotho indicated that under programme four, the Institutional Investment Grant transfer processed in November was lower than anticipated and erroneously classified in the affordable housing programme. The presentation highlighted the Department’s transfer of R22.4 million to SHRA despite the specifically appropriated items table reflecting no transfers being made against the Institutional Investment Grant. She said the expenditure was incorrectly classified on the basic accounting system and is therefore in the specifically appropriated table in the third quarter report. Her question was, how did this error occur and how is the Department addressing this matter?
She recalled that under programme five, the year to date headcount change indicated a reduction of seven employees. Her question was what is the reason for this change in headcount?
Ms Mokgotho noted that the budget outcome for bursaries for non-employees indicated an underspending of R600 000 compared to the projected spending of R2.1 million. She asked what the reasons for the low spending are?
Ms E Powell (DA) said in quarter three, North West and Eastern Cape did not receive their HSDG transfers due to non-compliance with reporting requirements. Why is this? What remedial action has taken place?
She recalled that in the opening remarks, the Deputy Minister indicated that nine informal settlements had been identified for upgrading. She wanted clarity on whether the Deputy Minister misspoke because the presentation that was circulated August 2020 noted that they were 29 informal settlements that were identified for upgrading. She asked the Deputy Minister to clarify on that.
She stated that in terms of the Social and Rental Housing, only R544 million was spent against a target of R887 million and in terms of the Social Housing Regulatory Authority, the operational transfers scheduled for December were not transferred again due to the entities non-adherence to the Department’s financial management controls. She recalled that these were some of the key findings of the Auditor-General at the end of 2019/20 and the DG had presented that there was an audit action plan that was being implemented to prevent this sort of irregularity occurring again. She asked, how has this occurred in light of the DG’s audit action plan?
She indicated that this was now quarter three of the following financial year and it seemed little had been done with regards to financial management control of entities. She said there was again an expenditure shortfall on affordable housing of more than 51% which was as a result of the National Housing Financing Corporation not receiving transfers because it also did not adhere to the financial management process requirements of the Department. She asked what was being done about the situation and how the Department had allowed that to happen?
Ms Powell stated that only 11% was spent by the end of December on the informal settlements programme and asked the DG to provide some clarity on that.
She noted that there was only a single line item being provided to the Committee with relation to information on the National Housing Development Agency (HDA) which has been responsible for implementing COVID-19 informal settlement upgrades across the country. HDA spent R230 million which was the entire budget that was allocated against an unknown progress result. She stated that expenditure was one thing and until it can be compared to progress, it means nothing to the Department. She asked how the HDA’s worked relating to the informal settlement programme only reaching the 11% target. She asked the DG to let the Committee know why the work of the HDA over the last three quarters had not yet been presented to the Committee and at what point the Committee should expect a full presentation on the HDA’s work?
Ms Powell highlighted that she personally visited a number of informal settlements across the country and saw a pattern of work having been stopped at these emergency COVID programmes because sub-contractors have not yet been paid or the budget has been exceeded with the work not having been completed. She reiterated that progress and expenditure is one thing but the Committee needed an update in terms of the results.
She said it was fine for the Department to appear before the Committee and present that 100% of the budget has been spent and 60% of the targets have been met, but unless people are actually being relocated it means nothing. For example, there were allocated transfers to Doma Avenue and millions of Rands have been spent but the engineering and the civil works are so poor that grading has now collapsed to the back doors of the houses and no one has been relocated from Kennedy Road. She said she had visited the area in January and the buildings had not yet been connected to basic services but according to the report, 100% of the budget was used but. She asked, what results transpired on the ground? That was the information that the Committee needed in these progress reports.
She stated that there was a new line item called COVID which registers 118% expenditure on operational expenditure. Also, more than R1.5 million was spent by the Ministry on events. She asked for clarity on the events the Minister hosted during lockdown that resulted in the over expenditure. In August, the projected procurement expenditure including PPE expenditure for events was R2.8 million and it shot up to R4.2 million. The line items provide for the amounts and for instance, R700 000 spent on sanitisers. She said there was need for clarity in that regard.
Ms Powell highlighted that she has been tracking National Treasury’s COVID-19 dashboard and there was an undertaking late last year for all National Departments to be placing all of their COVID-19 procurement information onto National Treasury’s website. She said she visited the website before the meeting and it seemed the Department had not yet uploaded procurement information to Treasury’s website yet all other government departments have done so. She asked if there was an explanation for that.
She indicated that on the Emergency Municipal Grant, 18% had been spent and such a percentage in the third quarter was not great. She said, how does this relate to the delivery of projects that were identified early last year for emergency COVID-19 identification? Why is there no information on targets, contracts and progress of the HDA? Where are the results for progress and expenditure on the Residential Rent Relief Scheme?
She stated that the Committee would know from media and the question from IFP to the Minister in January that as at the end of quarter three, not a single Rand had been spent because the Department was still formulating the policy. She asked why it took the Department three quarters to finalise a policy for what was supposed to be an emergency rental relief grant. How did that happen? She said there is a Human Settlements Command Council and there are competent officials in the Department and the in the Policy Unit. So, how was that R600 million was allocated but by December there was no policy formulated and not a single cent spent? She indicated that it was pretty shocking as it has direct consequences for the people of South Africa. As such, the Department had to brief the Committee on when Members can expect to see progress against that specific grant.
Ms G Tseke (ANC) appreciated the presentation by the DG and the team from the Department. She said there has been progress regarding the two Bills that are before the Department specifically the Housing Consumer Protection Bill. However, there are no timeframes attached to the Bills on when they will be presented before Parliament. She indicated that these are matters that the Committee has continuously raised to the Department. She asked the following question, is there a specific timeframe within which the Bills, especially the Housing Consumer Protection Bill will be presented to Parliament?
She highlighted that the reports reflected that the Western Cape is overspending the budget dispensed to them and the CFO also indicated that Western Cape received an extra R150 million in quarter three which was from the budget of other provinces. She asked if there is any output that equals the budget that is currently being given to the Western Cape. She said she was raising that issue because there are still a lot of people in informal settlements in the Western Cape especially among black people. Where can the Department therefore boldly stand and say this is the service delivery by the Western Cape?
She indicated that there are a lot of disasters in Western Cape and she was not sure if the Department was convinced that there is progress regarding service delivery in the form of houses and title deeds issued. There were no title deeds being issued and she wanted to know if the Department could boldly say out of the budget being given to the Western Cape, this is the service delivery, these are the numbers of projects that were completed and this is how the projects managed to change the lives of people residing in Western Cape.
Ms Tseke noted that there were some challenges previously with regards to the construction of the Temporary Residential Units (TRUs) especially in Limpopo and the Free State. It was therefore important that the Committee gets a progress report from the Department on how those matters were resolved.
She stated that previously, Limpopo was performing very well in terms of delivery of houses and she was not sure of what went wrong. She requested that the Committee be given feedback by the Department on the challenges that are being faced in Limpopo. She said she could not speak much of Eastern Cape and Free State, because they are currently in ICU but would need intervention by the National Department.
She highlighted that on the Provincial Emergency Grant, the CFO had indicated that there were disasters that happened in December and January in most areas. She wanted to find out if the Department was able to secure the budget for the grant before the end of the financial year. The affected areas require government intervention and the Department should not lose money to National Treasury.
She referred to the part of the presentation which said HDA was not submitting its annual reports because most of the employees were contracting COVID-19. She asked if there was a letter presented to the speaker or tabled for the speaker on those reasons. The Committee has not seen the letter. The only letter that had been tabled before Parliament was from the Water and Sanitation. She asked when HDA was going to present the annual report.
Ms Tseke noted that the scholarship programme under Departmental transfers was not doing well as there was no progress in both quarters and she was not sure of the reasons.
She said in 2020, when the Committee was interacting with the entities of the Department, the Auditor- General raised several issues with regards to SISOS and the Estate Agency. The findings of the audit were that there were no sufficient controls, revenue management was a disaster and the entities received qualified audit opinions. She asked how the Department was assisting the entities in addressing those issues.
On the 30% set aside grant for the women and the 10% set aside for the youth, Ms Tseke said she was not quite sure why provinces are not implementing this directive and the Department needed to furnish the Committee with those reasons. She stated that the majority of the population in the country is made up of women and young people. She confirmed that there were female and youth contractors hence Ms Tseke wanted to know why provinces are not implementing the directive. She emphasised that the directive was non-negotiable as the Committee will never compromise the women and youth of South Africa.
Mr M Tseki (ANC) recalled an interesting statement that the DG always uses when he is tasked with making a report in which he says, ‘we were contracted to do one two three.’ Mr Tseki said he extracts much value from the statement.
He noted that in one slide, Western Cape was reported to have spent 100% yet on performance, there was a red indicator. The CFO mentioned three greens, three yellows and three reds and Western Cape was among those that are green. However, in the preceding slide, Western Cape had red indicators on both the performance of units and the performance of sites. He said he found that to be contradictory and asked the Department to explain further.
Mr Tseki said he could not differentiate between FLISP and Affordable housing as they were presented in the same category by the Department. He asked, what is the difference between FLISP and affordable housing?
Ms N Mvana (ANC) stated that she was interested in knowing why Raymond Mhlaba and Mbhashe Municipalities were not accounting for the money that had been transferred to them. Is the Department aware of the reasons?
She asked if the Department had managed to check why provinces were not implementing the programme for title deeds. She recalled that the DG had said that the Department would change the stance and use other strategies to make the provinces utilise these monies that are set aside for the title deeds knowing exactly that there is a need for the people to get them as the programme is long overdue. She asked if the Department was aware of the reasons.
Ms Mvana said she was interested in knowing that out of the monies being given to the Western Cape, why was the money not accounted for. She asked, why is Western Cape not giving information to the relevant people that are supposed to know about the finances and what the provincial office would have done with the money?
Mr R Mashego (ANC) noted that of the R861 451 000 that the Department had set aside as operational budget, only 51% was spent. He asked if the Department was saying in the last three months left before the end of the financial year the remaining 49% of the budget would be spent. If so, the Department was to brief the Committee on the plans thereof.
He highlighted that the Department spent 118% of the budget that had been set aside for COVID-19. He asked the Department to explain how it spent money that was not there. He asked if it was not a financial misconduct and if it was, what the Department was going to do about it.
Mr Mashego indicated that over the rain season, he was in Mpumalanga and at one point, after it had rained, he could not pass to Nelspruit because the road was gone. Currently, the bridge in R4 is gone and there is a hollow. Mr Mashego said he received a call that in Phalaborwa, people are not going to town because the bridge that was being built there by FORSCO a company contracted to build the bridge by the government had been swept off by the rains. As a result, people are not going to work or school and that constituted an emergency. He said in some areas such as Kwazulu-Natal and Eastern Cape where emergency relief is needed given the continuous downpours of the rain, the Department has transferred 0% of the money from the Emergency Relief Fund. He asked if there was a plan to transfer funds to attend to these emergency needs.
He indicated that the two issues not to be undermined relate to HDA and Western Cape. He said he was once the MMC for roads and infrastructure in Ekurhuleni but before then, he was the chief whip. He recalled that in Ekurhuleni, they had encountered difficulties around the practices happening in and around HDA. Most of the municipalities and provinces hide money into HDA and then go and use that money for different reasons because once it is put there, it can no longer be accounted for by the Accounting Officer of the Metro or Department. As a result, HDA is becoming a milking cow where people can just go and milk that money without accounting for what that money does.
He reiterated the question, ‘why is HDA failing to give their annual report?’ and said it was because the money being pumped in either by the Department or metros and provinces cannot be accounted for because it is not being used for any predetermined outcomes. He indicated that the assumption he was making for which he would like to be proven wrong by the Department was that HDA is being used as a conduit for money laundering and that is why it cannot account for the money.
He noted that there was a point in which the Minister was having an issue with HDA but for whatever reason, that issue faded as it is no longer being spoken of. They said the Committee needs to understand what really is the predetermined programme and outcome by the HDA. HDA has failed to give annual reports three years in succession yet more money is still going in the entity every day, why?
Mr Mashego said the situation was the same in Western Cape as the condition that the people in Western Cape in terms of housing are subjected to is worrisome. He made the assumption that when Western Cape applies for housing money from National Treasury, the money is released on the strength of the fact that National Treasury knows and sees the suffering of the people in the province in terms of housing development. So, when Western Cape asks for money, it is given 100% of the money. However, the province cannot show how the money was spent, how many houses have been built and where. The money being given to the Western Cape is not going to the Department as a non-expenditure which could mean that the money is being siphoned for something different.
He recalled that the CFO had mentioned that the Department still wanted to give R150 million to Western Cape yet the province does not account for the money to the Department and the Department is also not making a follow- up to know where the money is going. He reiterated that the houses that are supposed to have been built in Western Cape are not there and the issue of ‘Masiphumelele’ is getting worse. He recalled that there was a man ransoming naked at some point in Western Cape because he needed a house to stay in, whether it was legal or not, the issue is there are no houses in Western Cape and people are living in squatters. He said money was being given to Western Cape which is not accounted for but the Department keeps giving the province more money and actually has the guts to paint Western Cape green yet there is no progress.
Mr Mashego said he went to confront the MEC of Human Settlement in Gauteng around the issue of title deed because when he was in Ekurhuleni the title deeds administration was in his Department. Mr Mashego indicated that he was of the impression that the problem was a perpetuation of the territorial battle that is there in which when the municipality wants to issue title deeds, the province says this is my territory, when the National Department wants title deeds to be dispensed then provinces say this is our territory.
However, the MEC for Human Settlement said the bigger issue was that of the township declaration as one cannot give title deeds from a place that has not yet been declared a township. Mr Mashego indicated that the process of declaring a township is cumbersome, for instance, where he is staying the place was established in 1958 but is still not yet declared a township. Ethwathwa and Daveyton were established in 1940 and to declare them as townships is an issue. He asked what the Department was doing to circumvent the process that is too cumbersome to meet in order to declare a township establishment speedily that title deeds can be issued.
Ms C Seoposengwe (ANC) started by commending the Department, on a lighter note for at least receiving a clean audit.
She indicated that she wanted to emphasise on the 30% and 10% set aside grant for women and youths respectively. She was raising that issue because the Department has great potential of providing jobs and the Department should not deny women a chance to get involved in the main stream economy to eradicate poverty. She reiterated that there was so much reluctance to implement the directive yet the majority of people in South Africa are women and poverty has a female face. She reminded the Department that if the Department empowers women, it empowers the nation. She suggested that the Committee invite the provincial departments to a meeting. The issue had been raised in meetings with different Provinces but there seem to be reluctance. She wanted to know why.
She asked for a breakdown of the emergency fund as per province. She said she knew that there were few areas that had never been attended to.
Ms Seoposengwe said she had a vested interest in the Gamagara project because it is in the Northern Cape. This project has been talked about but the Department has not yet concluded it. She indicated that she has consistently raised the issue in previous meetings and is still raising it because this reflect badly on the Committee, as if to say the Committee is not doing any oversight.
She noted that the issue of title deeds is long overdue. She said the Department could not be having a situation post 1994 in which people are still struggling to have their title deeds. She expressed joy in the fact that the Department said it was going to take over the function where the provinces are not performing. She commended the Department for taking that decision which she said was long overdue.
Ms N Tafeni (EFF) said the Eastern Cape budget is high but there are no way forwards. Schools in Eastern Cape do not have access to clean water or toilets and this has a great impact on school children as it puts them at risk due to the pandemic. Also Mbhashe Municipality is failing to do its job. There are households struggling to access clean water because they are no taps. They get water from the rain and they are currently suffering since there is a drought. She indicated that a budget of R340 000 was approved in Eastern Cape for the pandemic but the schools are a sorry state due to lack of clean water.
She indicated that the Western Cape budget has run out but the coloured people in the province are still suffering as they are living in shacks with no signs of them having better living conditions.
Ms Tafeni said the budget that had been set aside for title deeds in the Eastern Cape should be cancelled for it serves no purpose as the issue of title deeds is not working at all in South Africa.
The Chairperson commented on the criteria that the Department that is used to take money from other Provinces to the others that are perceived to be performing better. She said based on the strategic objective of government which is to create jobs and empower women and the youth, it would help if the Department uses the assessment of the totality of the predetermined objectives instead of looking at the amounts involved. She asked if the Department could achieve one of the objectives of MTSF which is to create jobs and empower the women and youth of South Africa.
She reminded the DG that during the last engagement with the Committee, the DG promised the Committee that there would be a 30% put in the division of revenue. She asked if the Department fulfilled that undertaking and also if the Provinces that are getting extra money from the Department are complying with the directive to set aside 30% for women and 10% for the youth.
She asked if the Department could send the reports on non-performance and spending to provincial legislators so that they know that the money that is being budgeted for their provinces is not being utilised for the purpose and also so that the legislators can push their provincial departments where there is a backlog. She said the backlog in performance is an indicator that provincial legislators are not following up on provincial departments as they are supposed to and that had to be addressed.
The Chairperson highlighted that HDA had tabled its annual report on 4 December and the Members will have an opportunity to engage with the report then but the Department still had to respond to the issues that had been raised by the Committee.
She said progress was going to be affected by the rains. For instance, in Limpopo, it has been raining non-stop since December and obviously that has affected construction work in the province. As the country moves towards winter, that will negatively affect the Western Cape. Therefore, the Department has to consider the set back and ensure that in those months when it is not raining, Provinces are assisted in a way that they perform to their maximum. She reiterated that when the Department is looking at the performance of provinces, regard also had to be given to the environment and other conditions and not on the amounts of money involved only.
The Chairperson indicated that there are a lot of unfinished houses that municipalities are complaining about. She asked how the Department could assist the provinces to ensure that some of the budget is utilised towards dealing with those rectifications. She said for instance in North West there are a lot of unfinished projects and the question therefore becomes, what is the Department doing with those that would have been raised as unfinished projects? How should the National Department assist provinces to ensure they get money from service providers that have not finished projects? She emphasised that it should be a collaborative effort with national so that there is accountability to its maximum.
She agreed with the other Members that for the three provinces that have not yet performed, the Committee should probably look at how it can meet with the provincial legislators to ventilate the concerns raised. She said she was concerned with non-performance particularly in the Free State. She said she could not remember how many times the Department had taken money from Free State and if the Committee does not follow up on the matter, money will be returned into the sector but the people will continue to suffer. Therefore, there was need to summon the provincial legislators and also send reports so that they can see that their provinces are not performing well.
She indicated that when the Committee met with Ekurhuleni, the municipality indicated that they were short of some millions for them to finalise the building of a reservoir to give water to the people. Also, there is currently a sewerage spillage that is running in Bonaero Park town. She said she visited Ethwathwa and the situation is unbearable. The Department needs to come up with ways to ensure that these municipalities are not hiding money somewhere. The Committee would be happy if the money is retained in the sector but the reality is that the money is not being used to improve infrastructure in those areas. She emphasised the need to ensure through MINMEC that money taken to provinces addresses the issues raised.
The Chairperson said although the country is blessed by the rains, they have created damage and it is a problem. She asked how the Department could collaborate with the Department of Cooperative Governance and Traditional Affairs (CoGTA) and be able to combine efforts and assist communities that have been affected.
She emphasised the importance of job creating and pointed out that the Committee needed to see work that has been created so far by the Department. She said even though there is a disaster, there is also an opportunity for job creation and the Department had to inform the Committee on the jobs that were created against the appropriated budget.
The Deputy Minister responded to the question that was directed to her regarding the number of informal settlements. She reiterated that during the lockdown, the Department scaled up the upgrading of informal settlements in nine Provinces and the provision of service sites for beneficiaries residing in informal settlements. Deputy Minister Tshwete said in her opening remarks, she was referring to programmes and not projects that will be carried out in nine Provinces. On the other hand, in the presentation, the DG was referring to twenty-seven settlements to be upgraded. She emphasised that there is a difference between projects and programmes, and in her opening remarks she was referring to programmes and not projects.
She concurred with Members that the Committee needed to invite all the provinces to give an account for their performance regarding the set aside grants for women and youth. She stated that provinces needed to be sensitised as they are not taking the directive seriously. It is only Limpopo and Mpumalanga that are implementing the directive. The rest of the provinces are not.
The DG said there was R300 million that was not spent for NHFC and another R300 million for SHRA. These monies were not spent because the Department is gearing itself for the disbursement of the social relief grant the process for which will be explained further.
He noted that Western Cape and HDA had been cited as examples on overspending vis-a-vis non-performance indicators but all provinces are presenting the same challenge. However, the case of the Western Cape is explicit because the province is overspending the budget but without output. The Western Cape Department is using municipalities as implementing agencies and the City of Cape Town gets 70% of the whole budget. He reminded the Committee that in the previous years, Western Cape has been managing its cash flows and the real problem this year has been the management of cash flow. Overspending is a financial misconduct because it means there is mismanagement of cash flow and the Department has indicated that to the Province.
Mr Tshangana indicated that the Department always looks at the milestones as part of a reality check to see if it will get the numbers that are expected at the end of the financial year. The mistake made was that during the presentation, the Department did not present on the work in progress per province for it is in work in progress that the Committee can see where and how the money was spent.
He said an assessment of Western Cape would reveal that the money allocated was spent on slabs and rooftops but it is not accounted for because the Department only accounts for completed projects. Every milestone that has been achieved towards the project is not accounted for; it is only a full service site or unit that gets to be accounted for.
He highlighted that the last quarter is always the recovery quarter for Western Cape. In the last three financial years, the province always started very slow and then pick up pace a bit later. Western Cape transferred money to the City of Cape Town in three tranches but it did not buy anything. It is only in the third and final quarters that real progress will start showing. The remainder of the budget goes to other Municipalities that are outside Cape Town.
He indicated that the Department is closely monitoring the space and auditing money to see what it buys. The Department meets regularly with the provinces and there already has been three performance reviews in which the Department has stressed concerns regarding the issue of non-performance.
He indicated that a number of other provinces were not submitting numbers on financial targets except Gauteng and KZN. However, what makes Western Cape stand out is overspending which essentially is a financial misconduct.
The DG stated that HDA is the implementation agency for most provinces and there is nothing wrong with that arrangement as long as it is done in the beginning of the year. The only problem arises when provinces and municipalities transfer money to HDA towards the end of the financial year because it will come across as fiscal dumping and the provinces are constantly advised of that. He said it is not so much of a problem if the money is transferred to municipalities as they are also allowed to act as implementing agencies. The problem that arises in the case of transfers to HDA is necessitated by the fact that HDA has the same financial year as National Departments and if money is transferred towards the end of the year, it becomes problematic. The Department once ran into trouble in 2017 when North West and Gauteng transferred money to HDA towards the end of the financial year and the money was frozen by National Treasury and moved out of the sector completely.
He highlighted that the rule is that if any province is to transfer money to HDA, there must be a contract in place and proper procurement processes that are done so that by the time the money is transferred, all the processes would have been in place such as cash flow projections and contractual issues. If that is not in place, the Department always writed to that povince telling the officials that they are in violation of s17 of Division of Revenue Act.
He indicated that the reallocation criteria are very straightforward. Provinces are informed that if by the end of October they are in red, the money is taken away, if in amber, there will not be a further allocation of money and if in green, then there is a probability for additional allocation from other provinces in red. Reallocation is a way for the Department to ensure that money stays within the sector but that is not the only measure that is implemented.
Mr Tshangana said Eastern Cape is not doing well because they have done away with term key contracts that they used to utilise in the past. Currently, there are a number of sites in Eastern Cape with no toll structures because in the past, key term contractors were appointed who would do everything from services to structures but now, the processes have been separated. The province started the year without any contractors for toll structures and they are yet to be appointed. The DG stated that since November last year, he has been meeting with the HODs of provinces, Head of Department of Treasury, the Heads of Department for Human Settlements and their teams coming up with strategies on how to assist Eastern Cape spend the money that they have and also strategies to avoid the same mistakes recurring. The meetings are held weekly on Fridays from 5pm.
He indicated that North West lost money during the reallocation process. It lost R100 million and it was because the province has an entirely new Department. All of the officials who were working with Human Settlement are now with the Department of Cooperative Governance in the province. The Head of Department of the Department of Cooperative Governance used to be the Head for both Departments and so was the CFO. He said the CFO should not have been allowed to leave Human Settlements and when the management left, an entirely new team moved to the Department. The current Head of Department and CFO are from Tourism and they are struggling with managing the North West Department. It is for that reason that the province received a disclaimer in the last audit year. However, the Department is putting in effort to assist the province. The National Department’s CFO went to Northwest to help them comply with a lot of compliance requirements.
The DG reminded the Committee that from the presentation, Limpopo was also in red at the end of October. However, the Department was not worried with the performance of the province but still had to take R100 million because of the need to maintain objectivity, impartiality and fairness in the reallocation process.
He highlighted that all the provincial HODs were aware of the fact that if their provinces are not sitting at least at 40% of expenditure by 30 October, then they were going to lose the budget due to reallocation. The only problem with reallocation is that it is tantamount to collective punishment of the citizens of those provinces. Unfortunately, if the Department does not act and move to reallocate the budget, someone else is going to. National Treasury has a right to activate s19 of DORA and move the money out of the sector at any time. So it is always a two way approach; the first approach is to have the bilateral and assist the provinces spend money. For instance in Eastern Cape, the Department is busy with perfecting procurement processes. He said Eastern Cape currently does not have a procurement manager. So, the Department will be seconding an official to help with procurement processes so that at least by 1 April, the Department will be done with procurement processes.
The DG confirmed that HDA submitted its annual report in November. However, there are still other areas that HDA has not been compliant. For instance, in the second quarter, HDA submitted the quarterly report late and the Department wants to make sure that such problems are sorted out.
He said once an entity fails to meet the annual report deadline, the failure has a cascading effect on the quarters. He recalled that when TCT missed the deadline that affected a lot of other things and the Department will ensure that HDA addresses that anomaly.
Ms Funani Matlasi, Chief Financial Officer, Department of Human Settlements, outlined the standard practice or guideline procedure for transferring money to entities. She said money is transferred from the Department to the entities in light of the cash the entities would have indicated to the Department. The process is done on a quarterly basis and NHFC has three grants including the social relief grant that have not been transferred yet. With regards to the FLISP capital grant that is disbursed after the applications by the beneficiaries have been approved, only R111million from the R334 million was transferred to NHFC during the first and third quarter. Although R111 million was transferred, a concern remains that there is an outstanding amount of R92 million which has not yet been expended. The remainder of the money from the R334 million is due for transfer and is being prepared to be transferred before the end of February.
She reiterated that the R15million is the operational budget that supports the capital budget. She referred to the slide in the presentation that cover issues of personal costs such as equipment that assist the programme and said it was for that reason that the Department had to provide that R15 million allocation. The money was transferred at the beginning so as to help procure the sources that are required to support capital grant. 675 of the money is transferrable now and the Department has already received it.
She reiterated that the decision to start reallocating funds was necessitated by the fact that the Provinces in the red were at a risk of losing their money. She said the R9.8 billion was informed largely by the expenditure of Western Cape, Mpumalanga and Northern Cape.
She emphasised that there are a number of variables that a grant funds that support or contribute to the development of houses and sites. The funds are not reported as sites and services and that is the reason why there is a gap in the amounts reflected even if the calculations are made in terms of quantity and subsidy quantum. She said the Department noted that the money that was allocated to sites could not be stamped given the gaps that are in the non-financial information that followed performance on the ground.
She reiterated the remarks by the DG that some of the provinces project the end of the financial year as the recovery period and that is also the reason why the Department had to look into the reallocation grant. As the Department is moving towards the last quarter of the financial year, it expects better performance from the provinces especially Western Cape.
She noted the concerns that had been raised by the Members on the R150 million that was allocated as an additional budget to Western Cape. She stated that the additional budget would offset the minuses at the end of the financial period. Western Cape will not be having an underspending because the R150 million will supplement the funding that was expended to the projects that the funds were earmarked for.
Ms Matlasi stated that the Department does not segment or break down per province the emergency grant because disbursement depends on the disasters. The figures are shown as per the approval period for the disaster having met all the requirements and all the provinces and metros having provided to the Department the reasons for transfers to be made. The figures that were reflected in the presentation were for the amounts transferable to metros and provinces. She referred to slide 52 of the presentation which stated that the adjusted budget for the Municipal emergency grant sat at 158 for the better part of the 2021 budget. The amount that is reflected under transfers relate to the actual applications that were made and approved towards disasters that occurred. The Department can never come up with a breakdown because no one knows if a disaster will occur and the type thereof.
She indicated that it was highly unlikely that the Department will be able to catch up and spend the entire operational budget. The first three months of the financial year were affected by the hard lockdown. There are also other factors affecting non-spending chief being the filling in of vacancies. The Department is currently in the process of filling in vacancies and the process for the appointment of Chief Directors will be completed in the coming financial year. She said the money that had been budgeted for the positions that could not be filled still remain unspent and that will necessitate non-expenditure that goes under personal costs.
She highlighted that the major problem that provinces and metros have been facing relating to performance has been in relation to steel procurement. Steel could not be delivered to the country because of the lockdown and there are still a number of provinces currently being affected by the unavailability of steel. She reiterated the remarks by the DG that the Department needed to do better planning now so that by 1 April 2021, the procurement process will have begun.
She stated that the Department is currently having an intervention in the Eastern Cape. Free State and Eastern Cape are still finalising the procurement process for this financial year and the Department indicated to the Provinces that the actions were not going to make any difference in terms of the figures. Hence, the provincial departments should incorporate in their business plans for next year the projects that could not be attended to during this period. She said there were also indications of disruptions by the communities as well as protests that slowed the delivery of services because contractors could not be on the ground. Also, the low cash flows experienced during lockdown contributed to the slow delivery of services by contractors. She concluded by saying if the risks could be classified from the highest to the lowest, the highest risk for provinces would be poor planning and procurement processes.
Ms Powell (in the chat box) said in the last financial year, Western Cape delivered 8 491 title deeds against a target of 7 000 which in fact means the Province far exceeded the target. This was in response to the comments made by Members that Western Cape was not delivering title deeds.
Ms Sindisiwe Ngxongo, Deputy Director-General: Acting Corporate Services and Chief Operations Officer, DHS, said the Department is winding down on the scholarship programme based on the fact that there is the implementation of the NSFAS which also seeks to address the plight of the poor students in the country. As a result, the Department is not taking any new students. She indicated that the transfers by the Department are on a monthly basis to cover residence, tuition fees and monthly allowances. Currently, the Department has 22 students that it is winding down on the scholarship programme and it is unlikely that the all of the allocated budget will be spent hence there was need to transfer the remainder to meet the other Departmental needs.
She highlighted that the Department will be presenting the Housing Consumer Protection to Cabinet during the first week of March for the introduction of the Bill to Parliament. Thereafter, the Bill will be introduced to Parliament in March 2021 and then parliamentary processes will take over.
She said the Human Settlement Development Bill which is the new Bill that the Department is working on will be tabled to Cabinet for public comments. The Bill will be open for public comments for a period of 60 days and parallel to that process, the Department will also be conducting the provincial information sessions. The gathered information and comments will be consolidated and the Bill enhanced or amended. Thereafter, the process will follow in which the Bill is tabled to Parliament for introduction.
She said the Department intends to cover all the steps pertaining to the Human Settlement Development Bill during the next financial year 2021/22. Parallel to the process towards the end, the Department will also be drafting the Regulations for the Human Settlement and Development Bill which will enable the effective implementation thereof. She emphasised that the Department is aiming to have concluded all the processes and then have the Bill presented to the President so as to be accented into law during the 2021/22 financial year. However, that was going to be dependent on the status of COVID-19 in the country.
She reiterated that there were delays in the tabling of the HDA financials last year. There were changes in the tabling of the financials last year to November 2020. However, HDA tabled its financials to December 2020 and this was as a result of a number of questions that had been raised during the auditing process. In the middle of answering those questions, there was also the challenge of COVID-19 where the officials of the entity contracted COVID-19 and that contributed to the delays. She emphasised that the Department was taking note of a trend of non-compliance by HDA and the Department was addressing the issue.
She said that HDA has been non-compliant in a number of areas including the submission of their quarterly targets. The third quarter performance report was due on 29 January and HDA wrote to the Minister requesting for an extension to 19 February 2021. The Minister has already sent a response indicating that it is non-compliance in terms of National Treasury Regulations. She reiterated that the Department was addressing all the entities’ non-compliance.
Ms Ngxongo stated that the Department was concerned about the qualified opinions for CSOS and EAAB. She emphasised that the Department received a clean audit and an assessment of the qualification of Departmental entities shows that all of the challenges are centred on financials and compliance. As a result, the Department was putting up a plan to address the governance, compliance and financials.
She said the Department uses the CO forum to discuss with CSOS on the strategic areas and monitoring improvements. The Department will also be tabling the appointment of the senior officials in the first week to cabinet as part of the process that will hopefully bring some stability in CSOS. She stated that the Department was monitoring the filling in of management and executive positions for all entities.
She indicated that the collection management system by the CSOS has not been procured. There was an advert that SISOS made towards the end of the financial year which meant that there was an underspending of their finances. The Department then approached National Treasury in December last year requesting for the roll-over of funds. Partly it was to cover the procurement of the management system because it is a stumbling block that needs to be addressed as a matter of urgency. During the discussions with National Treasury, there was an indication that National Treasury would support the retention of R180 million towards the procurement of the system. The Department is currently waiting for the official written response from National Treasury. If that process is completed, the levies collection system should be ready in the next financial year.
She indicated that the Department does not complete transfers to entities where there are shortcomings. The Department has managed to transfer the requested transfers to all entities.
Ms Nonhlanhla Buthelezi, Chief Director: Operational Policy Frameworks, DHS, explained what affordable housing is. She said the Department refers to affordable housing as gap housing. Gap housing is when there is the Finance Linked Individual Subsidy Programme (FLISP) intervention which is offered to those normally earning between R3 501 and R22 000. The beneficiaries are those that cannot get a bond from the bank and also do not qualify for a UPDP house.
She stated that there were other definitions of affordable housing that the Department will at some point engage. For instance, there are a number of interventions outside the Department which are often announced such as when the Minister of Finance makes service offers in terms of transfer costs. The Finance Minister can make the pronouncement that certain beneficiaries are not supposed to pay transfer costs because the properties in question are below R1million. These are some of the interventions that should be consolidated as affordable housing. She hoped that at some point the Department would meet with the Committee and get into detail on affordable housing as there many other interventions.
She noted that the Scheme has been in the pipeline since COVID-19 started and the delays have been partly on policy development. The policy was developed but the Department had to deal with legalities on how to structure funding given that the allocations were split into two. Naturally, that would have created an unfair division between the two institutions that the Department is dealing with and also, the different rental reforms that the country is currently dealing with.
She indicated that the definition of rentals in the Rental Amendment Act is very broad and will include people residing in the backyard, emerging renters, those in hostels and also renters in private sector rentals. The Department had to split the components to be able to define who it is the Amendment Act is referring to. The beneficiaries of the Act were qualified as those below R15 000 including those in the backyard markets. The unfortunate part however is that the backyard market often does not have rental agreements between the tenant and the landlords and this has exacerbated the delays in coming up with the Amendment Act.
She said the other challenge was in relation to the changes in regulations. In August, there were regulations that were issued and there were changes towards the end of the year around what the Department needs to do when it comes to providing rental services under COVID-19. These changes created additional delays.
She stated that there were also issues around engagements with institutions like SASAC that already have systems in place. Also, they were audit findings coming from the Auditor-General in relation to the duplication off payments and the Department was asked to look into the situation to endure that there will not be an overlap in terms of the beneficiaries. She said the process became long and the Department ended up having to come up with management mechanisms for disbursements.
Ms Buthelezi indicated that the number of beneficiaries is extracted from the statistics that come from StatsSA which says that there are about 4 500 households in the rental market. She said there are about 600 000 households in the backyard rental market, 40 000 in the social housing unit and 500 000 as part of the emerging rental market. The Department was going to get an exact number based on the actual applications that will be processed. She emphasised that the money that is set aside to cater for the entire market is insufficient to meet the demand.
Mr Neville Chainee, Deputy Director General: Human Settlements Planning and Strategy, DHS, referred Members to quarter three presentation on the operational grant allocation for COVID-19 relief interventions in the Department. The total allocation for the financial year was R5 million which caters for all operational stuff such as sanitisers, front line staff sanitisers and occupational health and safety. As at 31 December 2020, the Department had spent R4.2 million from the full amount allocated.
He indicated that the Department outreach events include events that are arranged on behalf of the Minister such as launches, public engagements and meetings. As a result of the introduction of COVID-19 occupational health and safety, the Department had to put in place controls to ensure that COVID-19 numbers are kept to what the norm is, that areas are sanitised and other containment measures. The allocation of PPE therefore does not relate to the purchase of PPE only but also to occupational health and safety mechanisms.
He said capital expenditure as referred to in various programmes relates to capital programmes that were funded either through HSDG or USDG and are dependent on what the agreement was between various Provinces, housing agencies or Municipalities.
He noted that Members raised concerns on the emergency grant particularly its utilisation in relation to the bridges that are being swept away by the rains. He highlighted that the emergency fund focuses on emergency situations that arise in relation to houses or infrastructures. The Department has been working closely with CoGTA National Disaster Management Centre or Public Works. The DG has been very proactive in informing the Acting DG of Public Works of bridges that have been broken down and the Departments have intervened. Therefore, it was necessary for the Members to forward information pertaining to the specific bridges that had been swept away to the Department.
He stated that there are interventions that are currently being undertaken in North West in terms of s108 (b) on the rectification process. One of the issues being dealt with in the province is the issue of the substantial number of programmes that ended up being blocked. As a result, there are applications currently pending to receive funding through the rectification programme so as to unblock the programmes.
Mr Chainee indicated that there were interventions that the Department has been making with the Head of Departments for provincial departments together with Treasury to ensure that provinces account for money. One of the issues that the Department raised with the provinces relate to actions carried outside compliance and regulatory prescripts. He reiterated that the Department has to ensure that provinces account for money and one of the steps is to ensure that there are proper auditing processes.
The DG highlighted that the Department could make available information requested by the Committee on the progress report of TRUs. He said the Department will ask HDA to avail the information to the Committee specifically on the TRUs they are managing and the contracts that are currently active.
He said the Deputy Minister has been managing the implementation of the 30% programme set aside for women and the youth. Whenever the Deputy Minister would go for road shows in all the Provinces, she should always emphasise on the programme. The DG indicated that for him, they were two issues preventing Provinces from implementing fully the programme and this related to lack of political and administrative will. He said if Mpumalanga could do it then all other provinces could and there was need to ensure that the programme is implemented.
He stated that there are major culprits that have never moved in respect of the 30% set aside grant particular programme and they could be named and shamed. The Department could provide a list of those provinces that have never attempted to implement the programme in the last three years. He said the Auditor-General could help the Department enforce compliance by ensuring that the provinces that are using that money for something else are qualified. The Department of Women, Youths and Persons with Disabilities has been supporting the Department on this matter both departments attended MINMEC. The 30% grant for women and youth is a standing item on MINMEC and Technical MINMEC and it was raised in the last MINMEC which was held a fortnight ago.
The DG reiterated that the number of informal settlements is 29 and not 27.
Mr Tshangana highlighted that the Department was going to present to the Committee on both the expenditure and non-financial targets for HDA. The Department was more than willing to present on what HDA was contracted to do and what they managed to do during the financial year in question. While the Department was agreeing with Members that there was non-compliance in HDA, the Department could not comment on the allegations of money laundering within the entity as there was no evidence thereof. Regardless, the Department was going to hold the entity accountable for the funds that were transferred to it and the contracts that were activated.
He indicated that the Department had a plan on how to proceed on the issue of title deeds. He concurred with Members on the fact that if the township register is not fixed, it becomes difficult to issue title deeds. He said in areas where title deeds have not yet been issued, the main issue has been that the township register is yet to be opened properly. There are subdivisions that have never been opened or submitted into the township register and the process is further complicated by the fact that some of the beneficiaries have long since moved or passed on without the finalisation of the process. He emphasised that the title deeds issue was a planning issue that required the Department to dedicate capacity to deal with that.
He said the Department needed to think about the issue of title deeds in subsections could be dealt with. About three years ago, the Department received a report that the conveyancing process was a bit outdated. In the first world countries, it does not take 2 months after purchase to finalise the conveyancing process. However, the situation is different in South Africa. As a result, the whole process has to be changed going forward and the Department’s policy is to find the best way to deal with the situation because there is already a new backlog.
The DG stated that the social housing audit operational plans are work in progress and the Department has been meeting regularly with the Social Housing Regulatory Authority.
He said there is a shortfall on affordable housing and the demand is huge. The Department will not be able to service the entire market but will find a way to deal with the shortfall in both the operational and the capital budget. He reminded Members that the operational budget of NNFS that supports the FLISP has been reduced. So the Department was making engagements to see how the gap can be closed. The DG indicated that he met with the CEO last week and they agreed to fix the situation.
He indicated that the Department will be spending 18% only on the emergency grant. The emergency grant for both the provinces and municipalities depleted because there were too many disasters this year. There were disasters in the Eastern and Western Cape, they currently are disasters in Limpopo and Mpumalanga so that money will be utilised. The fund is already overcommitted with hope that the other components will be financed in the next financial year. There were disasters in the Eastern and Western Cape, they currently are disasters in Limpopo and Mpumalanga so that money will be utilised.
He highlighted that the Department of Water and Sanitation can best respond to the question on the R8 billion Gamagara project as it is part of the Department’s strategic projects.
He indicated that the Emergency Grant is not operating on the same level as the Housing and Urban Settlement Grant. The Emergence Grant was on demand and could only be utilised when there is a disaster. The Department can only give a breakdown by province for the year that is about to end providing the Committee with information on provinces that had disasters and the applications that were made towards the disasters. However, the Department could not break down the grant for the next financial year as there are no applications that have been made.
He said so far, it is only the allocation to Mpumalanga and Limpopo that will likely come from the budget from the next financial year.
He said the Department would get the specific information and present it to the Committee on the relocation of people from Kennedy Road. He recalled that the project was part of the 29 informal settlements that the Department was focusing on and further information could be provided.
The DG concluded by reiterating that the R5 million COVID-19 expenditure was from the operational budget of the Department.
The Chairperson thanked the DG and the team from the Department for the responses. She indicated that there was a parliamentary sitting at 2pm which Members needed to attend hence the meeting had to be adjourned.
Ms Powell asked that the Department provides written responses to the Committee on the question on Treasury’s website publicising of procurement.
The Chairperson emphasised that the floor was not going to be opened for follow up questions as it was in the interest of time. Members would get an opportunity to engage with the Department when they appear again before the Committee. Some questions could be posed to the Minister during the parliamentary sitting.
The meeting was adjourned
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