Department of Human Settlements 2021/22 Annual Report: briefing by the Department, with Minister and Deputy Minister

Human Settlements

10 November 2021
Chairperson: Ms M Semenya (ANC)
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Meeting Summary


Annual Reports 2020/21

The Department of Human Settlements briefed the Committee, on a virtual platform, on its 2020/21 Annual Report.

The Minister’s opening remarks included the need for transparency and effort in rebuilding the trust of the Committee and people through the corruption clean-up process. Unfinished projects would be accounted for, and consequence management policies would be implemented.

Overall, 55% of the targets set in the Annual Performance Plan for 2020/21 were achieved, 30% were partially achieved and 15% were not achieved. Of the 40 targets, 22 had been achieved, 12 partially achieved, and 8 not achieved by 31 March 2021. The Department’s Annual Report included an unqualified audit opinion with no matters of emphasis on the annual financial statements, but with material findings on performance information for one of the programmes. The Auditor-General said there was a need for improvement on the usefulness of the indicators.

The Committee was taken through the performance of each of the Department’s programmes.

Members were most concerned by what they perceived to be a general lack of consequence management in cases where there had been fruitless and wasteful, irregular or unauthorized expenditure, or where Departmental programmes had failed to meet approved performance targets. The Minister was asked to give specific steps that would be taken, and that the Director-General was taking and that the entity Chief Executive Officers would take, to ensure that consequence management was implemented in all entities.

Another common area of questioning related to the widespread – and long-standing - problems with title deeds and property registration. Was the Department going to collaborate with other departments affected by the issue, even at local level?

Members asked whether the internal control issues had been addressed. These issues opened the way to possible corruption in the procurement sector.

Members were concerned over performance indicators on many housing issues lacking coordination between the spheres of government. Members asked why there were delays in the disbursement of the Relief Fund.

The Minister was asked to detail specific interventions undertaken to stabilize the Housing Development Agency and Estate Agents Affairs Board, both of which had significant leadership, internal audit and legal challenges. There was discussion on the capacitation of provinces and municipalities, as their performance was inadequate. Provinces were said to be struggling and a meeting would be called to interrogate all provinces and reasons for their underperformance. Members asked why the Auditor-General had, in some instances, not implemented the amendments to the Public Audit Act to deal with, for instance, a tender that was fraudulently obtained.

Meeting report

Ms Mmamoloko “Nkhensani" Kubayi, Minister of Human Settlements, focused her opening remarks on transparency and efforts to rebuild the trust of the Committee and people through the corruption clean-up process. Unfinished projects would be accounted for, and consequence management policies would be implemented.

Mr Mbulelo Tshangana, Director-General (DG), Department of of Human Settlements (DHS), spoke to the Departmental performance per program. Overall, 55% of the targets were achieved, 30% were partially achieved and 15% were not achieved. The executive summary showed that of the 40 targets, 22 had been achieved, 12 partially achieved, and 8 not achieved.

Program one had seven targets with two achieved and five partially achieved
Program two had 14 targets: 8 were achieved, 3 partially achieved and 3 none achieved
Program three had 6 targets: 3 were achieved, 2 partially achieved and one not achieved
Program four had 7 targets: 4 were achieved, 2 partially achieved and one not achieved
Program five had 6 targets: 5 were achieved and one none achieved

Performance per quarter showed the weakest performance in quarter 1 due to COVID-19 and removal of contractors. From quarter 2-3 there was improved performance as contractors returned to sites. In quarter 3-4 there was significant improved performance.

Ms Nelly Letsholonyane, Deputy Director-General (DDG): Corporate Services, spoke on the unqualified audit opinion with no matters of emphasis on the annual financial statements (AFS), and material findings on performance information for program three (see slide 12). She said there was a need for improvement on the issues raised by the auditor on the usefulness of the indicators.

The Committee was taken through the performance of each of the Department’s programmes. [Please see the presentation slides for the details of what the DHS presented to the Committee].

Within Programme 1: Administration, performance on compliance with statutory tabling and prescripts showed 81% achievement against the target of 100%.

The following areas of focus were complied with: 

Administrative support
Annual Performance Plan (APP) and Strategic plans
Quarterly and Annual Performance Reports
Interim and Annual Financial Statements
Mid Term Expenditure Framework 
Estimate of National Expenditure (ENE)
Monthly early warning system reports
Departmental Procurement Plan 
Qualitative Assessment

The following were not achieved

Timely responses on Parliamentary questions from Provinces and Municipalities. 
94 out of 5 263 Invoices were not processed on time due to COVID-19, as officials were self-isolated

91% of the Internal Audit Plans had been completed - a total of 30 out of 33. The other 3 were in progress at year end. Verification had been delayed due to delayed status reports on Temporary Residential Units (TRUs).

89% of the approved Anti-Fraud Corruption Implementation Plan, had been completed. The preliminary investigation had not been concluded due to capacity constraints.

The approved Risk Management Plan had been implemented in full.

Only 54% of the activities for the Human Resource Implementation Plan were carried out, calling for further improvement.

Four reports on the development of legislation were approved during the year, as targeted. The Housing Consumer Bill was successfully tabled in Parliament. The Human Settlements Development Bank Bill had been approved by the Forum of South African Director-Generals (FOSAD) and Cabinet Committee

Mr Neville Chainee, DDG: Research, Policy, Strategy and Planning, took the Committee through the Integrated Human Settlement Planning and Development Programme section.

Of the 19 integrated implementation programmes for Priority Development Areas (PDAs), 7 were completed and 12 integrated implementation programmes for Municipal Priority Housing Development Areas (PHDAs) were reviewed based on available funding. (See slide 16)

DHS admitted to not having performed well on providing support for the 9 provincial Departments to register title deeds. In Limpopo and Mpumalanga title deeds were not submitted due to capacity constraints as a result of State of Disaster COVID- 19 contractual delays.

Dr Zoleka Sokopo, Chief Director (CD): Human Settlements Strategy, said the Informal Settlements Programme target of upgrading the informal settlements in the provinces was only partially achieved due to oversight visits being affected by the unavailability of stakeholders as a result of COVID-19.

75% of the Upgrading of Informal Settlements Program (UISP) projects under implementation were fully monitored - Human Settlements Development Grant (HSDG) and Urban Settlements Development Grant (USDG).

Mr Joseph Leshabane, DDG: Affordable, Rental and Social Housing, DHS, took the Committee through the rental and Social Housing Programme. This was only partially managed due to monitoring and support not being fully provided to all provinces and municipalities as a result of COVID-19 restrictions. There was100% compliance with statutory tabling and prescripts (Public Entity Oversight -Social Housing Regulatory Authority (SHRA)).

2 350 households received financial assistance and purchased units through the disbursements of Finance Linked Individual Subsidy Programme (FLISP). All of these were fully monitored.

Ms Funani Matlatsi, Chief Financial Officer (CFO), DHS, took the Committee through the financial performance of the Department. A total of R29 billion had been allocated. From the previous financial year R303 482 000 had rolled over into the 2021/22 year. After the initial budget of R16.6 billion was reduced, the HSDG had been left with R14.8 billion. The hard lockdown affected some activities leading to less expenditure. Funds from Limpopo, Eastern Cape and Northwest had been transferred to other provinces that were eligible to absorb the funds at the time.
The audit highlights were:

DHS received an unqualified audit opinion on the AFS for 2019/20 and 2020/21 financial years.
Whilst there was need for improvement, Information Technology (IT) audit status had improved from “requiring intervention” to being “concerning”.
Program two had received a qualified audit opinion because targets were not properly specified. (Slide 41).

Recommendations included:

Ensuring complete alignment between the APP of the Department and the APP of provinces as well as municipalities
Improved integrated planning, budgeting, implementation and reporting to ensure timeous achievement of the Medium-Term Strategic Framework (MTSF) targets and set APP targets
Improved inter-sectoral collaboration to ensure timeous availability of sector performance information
Improved efficiency on certain processes, that is, payment of valid invoices within the prescribed period of 30 days and response to Parliamentary questions within turnaround time of 2 weeks.

Ms S Mokgotho (EFF) posed a series of questions on the Annual Report.

She asked if the Department had dealt with the issues in the Auditor-General (AG) report effectively. Was consequence management exercised upon the implicated officials for the loss of the R50 million?

Was consequence management applied in the financial year regarding the irregular expenditure of R15 million in debt incurred by the Housing Development Agency (HDA)?

In the previous 2019/20 financial year, fruitless expenditure of R14,5 million was incurred by the HDA. How far was the process of consequence management regarding this matter? Were there any consequence management efforts being applied currently?

According to the AG’s report, the Estate Agency Affairs Board (EAAB) had received an unqualified audit opinion with findings on compliance. What measures had the Department put in place to deal with this effectively? Were there any consequence management efforts applied?

The Annual Report listed achievements of houses in 9 provinces that were delivered through the Peoples Housing Process (PHP)/Zenzeleni policy. However, the supporting evidence provided by the AG differs from the report. Why was this so? Why did the Department mislead the AG in that regard?

The AG identified the material misstatements in the performance information of program two. The Department corrected some of these statements. Why did the Department choose to select only some? Was the Department hiding something?

The AG also raised concerns in the 2019/20 and 2020/21 annual reports on internal control. How has the Department responded to the internal control deficiencies? What had been done to address these deficiencies? What had been done to ensure oversight performance had been improved?

What were the reasons for incomplete records to verify the reported achievement of the target projects of 100% under the implementation monitored with regards to the HSDG, USDG and Title Deeds Restoration Grant (TRG)?

What were the reasons for the late appointment of the service provider for the UISP evaluation study? What was the current status of the Human Settlements Development Bank?

Ms Mokgotho asked the Minister: In the Ruth Mompati region, in Naledi subregion, in a place called Stella, the municipal building set to accommodate the municipal staff has laid empty since 2016. The staff instead had used the communal hall as their offices thus meaning the community had no space to conduct its activities. In Greater Taung in Ward 20, 14, 18 and 8, particularly Ward 18 and 14 there had been RDP houses that had been built before 2016, a similar sight in Ward 20. Those RDP houses are unoccupied and vandalized despite having been allocated to relevant beneficiaries. This was a sign of fruitless expenditure.

Tax monies had been wasted despite having the poor and needy suffering and unable to build houses for themselves. These communities had reported this to the municipalities to no avail. When was the Minister going to ensure the proper beneficiaries occupied their houses?

Ms E Powell (DA) welcomed the Minister and her immediate efforts in stabilizing and cleaning up the boards of critical entities which had been used by some members as vehicles of patronage and had suffered extensive political interference in recent years. The Minister was asked to spend time at the end of the meeting detailing some of the specific interventions undertaken to stabilize the HDA and EAAB, both of which had significant leadership, internal audit and legal challenges.

The Minister was asked to inform the Committee on the projected timeline for implementing the Property Practitioners Act, considering it was an issue MP’s often get questions on.

The audit report, as with the previous year, had shown general lack of consequence management for financial and material irregularity. Some of the investigations that were supposed to have been undertaken in the previous financial year had not been completed. There were inadequate disciplinary actions taken against the responsible staff who had caused unauthorized, irregular, and fruitless and wasteful expenditure. This meant protection of corrupt officials. Despite guarantees, no action had been taken in certain entities yet. This was despite the previous Chief Executive Officer (CEO) and leadership having provided the Committee with guarantees of punitive action being taken. The Minister was asked to give specific steps that would be taken, and that the Director General (DG) was taking and that the CEOs would take to ensure that consequence management was implemented in all entities.

Whilst it was commendable that the DHS had received an unqualified audit opinion, given the wasteful and fruitless expenditure, it was still not a clean audit.

In Limpopo, the Special Investigating Unit (SIU) had shared their findings and remedial action with the previous Minister and Departmental management. According to the audit report, there were no further actions taken against the implicated individuals. Why was that? Despite it not being a part of the Minister’s job, what recommendations could the Committee make in that regard? The AG and Minister were asked if the Committee required a special hearing for the implicated individuals. What was the Minister doing to ensure remedial action was taken in respect of the SIU reports?

The Portfolio Committee Chairperson was asked to address the recommendations of this Committee regarding previous annual and audit reports. It had been noted in the previous meeting that one of the key recommendations of the AG this year regarding the annual report, as with previous years, had been to monitor and regularly follow up with executive authority and accounting officers. This was done on the progress against audit outcomes. The discussion on the key recommendations to follow up on the entities that had fruitless and wasteful expenditure was not fully concluded in the previous meeting.

In the past two years, several Members, inclusive of Ms Powell, had sent out numerous official requests seeking follow ups to be conducted by the Committee, but to no avail. This shows failure by the Committee to summon the HDA before the Committee for a progress report on the implementation of the audit actions. This ought to have happened before the tabling of the next annual audit. This makes the Committee derelict in its duties as it was a formal recommendation tabled before the Parliament. The Committee had oversight obligations and powers to summon any individual. Time should be set aside for this.

The final reports of the National Historical Publications and Records Commission (NHPRC) and SIU for various COVID-19 projects, including Duncan Village and Talana had not been received. Ms Powell asked the Chairperson, why were these reports not served before the Committee despite being finalized months ago? When would Members be expected to get these reports in preparation of the Committee’s formal recommendation to Parliament?

The Committee was urged to set aside time, even on weekends, to discuss these important issues. Regular engagement with the Department and entities was urged outside the statutory requirements such as the quarterly reports.

Ms Powell asked the DG about the [Social Housing Regulatory Authority] Relief Fund. Despite it being a question for the relevant entity, the Department still had oversight over the issue. By October 2021, it was noted there had been no disbursement of funds towards the Relief Fund. Only 54 applications had been approved. Despite it being a key Departmental intervention in alleviating economic stress it is noted it took a year to finalize the policy. Everything takes a while to finalized in this country. Why did it take so long and what is being done to expedite further applications? Despite the SHRA having twittered on the matter, it was not people on Twitter applying for rental relief funds, it is people staying in TRUs.

What steps was the Department taking towards clearly defining targets using smart indicators? It was noted from the audit and the Department of Planning, Monitoring and Evaluation (DPME) reports, there had been a problem with some of the indicators because they could not be measured properly. The Minister and Department were urged to get better data for Key Performance Indicators (KPIs).

Ms Powell said the highest percentage of the human settlement development grants invested in the Priority Human Settlements development areas was in the Western Cape, Limpopo, Mpumalanga and Northern Cape. Nothing was achieved towards the target. She asked the DG what the Department was doing to rectify this underperformance, particularly considering Priority Development Areas (PDAs) which were approved and ought to have been prioritized?. There was no shift from the baseline in upgrading of the 1 500 formal settlements entitlements by midterm 2024. Nothing had been done towards the phase three settlements for this year and this remains the same in the second year. What tangible support could the DHS provide to provinces to improve this? Should this indicator be revised entirely, especially in line with the new grant?

Mr Chainee was asked to comment on the title deeds issue. Despite it being a recurrent unchanging issue, the Committee saw desperate underperformance in all provinces except the Western Cape, Northwest and KZN who had spent their full grants. The Eastern Cape municipalities had indicated that within the 26 years of democracy they had no appropriate systems in place for the registration of title deeds. On the other hand, the Western Cape, which had not been able to roll out the smart electronic system, still delivered 6 300 in the last financial year. Sadly, against the national need for over 90 000 services, only 3 400 had received their deeds. Mr Chainee had admitted that the Department had not done anything due to the given constraints, but the way it had been worded was vague. What were those constraints? How could they be remedied? The same conversation is echoed through the years. The Department was advised to perhaps look to Western Cape’s new smart system which gives immediate deeds to build houses within the province. Can smart systems be implemented? How can they be changed?

Of the 20% target of land acquired falling within the PDAs that needs to be rezoned, only 0.14% progress was made this year – a slow pace. A colleague had spoken at length in the previous meeting. The slow pace on land reform was compounded by the devasting economic state of South Africa. There was a 63% youth unemployment rate. Land invasions across the country are running rampant. If land reform and metropolitan rezoning continued to track at >1% achievement against targets, the country would fail.

Ms Powell asked the DG and the policy staff what legislative or policy-based solutions could be implemented. There was a need for a legislative and policy-based response due to the rezoning; it had to be done in coordination with the pace of rezoning. Something had to change. Despite the Department’s inadequate, understaffed, and failed municipalities, the Department had to be asked on this.

The UISP grant was previously a component of two other grants and was a standalone grant itself. The performance of this program had been poor with half of the targets reached and 80% of the budget spent, despite not having completed the evaluation study due to late appointment of a service provider. The Department was asked to explain the misalignment between the targets and budget that was spent.

Against an overall expenditure of 98% [of the rental and social housing budget], 57% of targets had been achieved. The Department touched on this in their presentation, she asked if any consequence management or remedial measures were taken to recover the irregular expenditure, that had occurred within the gap between expenditure and performance?

Ms Powell suggested that the Committee set special time aside, perhaps in the following week, to discuss and deliberate over recommendations, for example those shared by the AG and DPME. It would allow for thorough engagement in discussing the program of action as a committee as well as hold the Department and its entities to account. Previously the way in which they had done things had not been fruitful. Things were getting worse with little to no officials being held accountable. Doing this as a committee would remedy this.

Mr A Tseki (ANC) appreciated the Minister’s opening remarks. They all may have different reasons when coming to Parliament, however, the African National Congress (ANC), was there to lead transformation and advance the interests of the masses. Everything done ought to have an impact on the people. Strategic intent should be noted, in particular for parties like the DA.

He said the Minister had made two important comments. First, on transparency, there was nothing private about the Department’s activities considering they were there to serve the South African republic. On the National data registration, the Department was asked what had stopped them from doing it, considering it had been a matter raised in previous sessions. With transparency, any person from any municipality would be able to go to any Department and easily see their status regarding human settlement.

Second, he noted the Minister’s advocation for a technologically advanced system implementation such as the one resembling that of the Electoral Commission (IEC) where a person can check their progress online. This could be used if there is no jeopardizing of the system. If these two things happened there would be improvement in the Department.

He referred to Ms Mokgotho’s question on how many houses were completed and yet empty. What is happening with those houses? There were a number of those in Gauteng particularly those which had been allocated to people and yet materially were not occupied and were actually being invaded and vandalized. The Minister was asked to follow up on that.

The Department was urged to work with the municipalities and the provinces in fast tracking the re-blocking process. Regarding informal settlements, re-blocking could assist in two ways. Those able to build their houses in known stands could do so and get the Department’s approval. This would enable people to help themselves and save the Department’s time as they move to the next case. Re-blocking was similar to the Rapid Land program.

Ms A Buthelezi (IFP) noted there was no change in the audit outcome on compliance with legislation. This meant continued disregard for legislation in the preparation of financial statements, expenditure and consequence management and procurement. She raised concern over procurement leading to potential corruption. The inadequate number of quotations, the lack of invitation for competitive bids, material misstatements in the preparation of financial statements, these could have pointed to an issue of misrepresentation of information.

What was the AG doing to enforce compliance with legislation? With the increase in total irregular, expenditure amounting to about R13 million and wasteful, fruitless expenditure amounting to R453 000, what was the AG intending to do about these findings?

In terms of procurement, the Department did not appear to understand what they were doing regarding incorrect evaluation of bids and inadequate procurement of relevant quotations and yet it continued to experience problems. What was the AG doing about this?

Despite the known financial constraints, we ought to know the consequences of such actions. Within the AG’s powers, what did they intend to do?

In September 2021, there was a R15,3 million government tender on the construction of Talana Hostel in Limpopo which was fraudulently obtained. Had the AG investigated those allegations? What were the findings? Have any of the funds been obtained or were there steps made towards the recovery of them?

Ms C Seoposengwe (ANC) said the title deed issue was not only a Departmental issue but one that was multifaceted. The Department was urged to urgently collaborate with other departments consequently affected by the issue even at local level. The issue was frustrating especially to the people whose issues had not been addressed. What was the Department’s comment on this? It was noted the issue had been raised by the DG, the Auditor General and the Planning, Monitoring and Evaluation Department. The Committee should have a special meeting on this matter.

On the internal audit issue, the findings from the Auditor General showed that there was no control in terms of procurement legislation. Additionally, there was inadequate management of the implementation of the review of statements meant to add to performance reporting and [a lack of] monitored controls over their preparation. This was a problem. The Department was asked to explain what was difficult in ensuring they had good systems so that by the time AG came around all was in place?

The restoration grant was not fully utilized. What was the reason?

On program two on the human settlement and variable planning, the contributing factor for underspending in the house subsidy system budget was the speed at which the Information Technology Agency system had conducted themselves. They had not provided the required services as per the service level agreement. The same reason was presented in the 2019/20 annual report. Has the Department engaged on this persistent challenge? What was the outcome?

The Department was asked to provide more information on the late payment of employee and employer pension plan contributions.

The Department was congratulated on their audit outcome. The Minister was congratulated on her appointment and her opening speech which also included an admission of challenges faced.

Adv M Masutha (ANC) said he commended the Ministers’ efforts despite her being newly appointed.

In an earlier meeting, the AG was asked about a claim by the officials of the Department (or one of the entities) that one of the reasons for negative findings on procurement was due to their [the officials’] failure to publish certain tenders on a portal they had no control over. The AG had denied having such a finding relating to this procurement issue. Someone had missed the point and it would be helpful to get the accurate information as to what led to those findings.

There were several issues from the morning interaction with the AG and DPME which were of critical importance. One of the issues was on the continued degeneration when it came to consequence management and no implementation of previous recommendations. The Department was urged to get a recording of that meeting and revert to the Committee on ways to resolve their issues. The Department is allowed to raise concerns with the Committee over unfair findings by the AG. The AG would then clarify its findings for fairness’ sake.

When the AGs office is evaluating the performance indicators that the Department set for themselves in the APPs, what informs its relevance? Are departments and the entities at liberty to choose what is considered significant enough? To what extent can they lower down targets so that they are more attainable, even when the mandated target is below what would have been previously established?

According to Chapter two of the Constitution, on socioeconomic rights, there is a minimum flow of rights that South Africans are entitled to. The Department is implicated on this. There is a series of constitutional and court judgments that, when put together, offer a jurisprudence which further clarifies the extent to which some of these constitutional obligations are articulated in the Constitution. This includes implications for the government, the concerned three spheres and the constitutional obligations that flow out of it. There was minimal reaction from government departments to the report collated from 1996 by his predecessor, Minister Radebe of the Department of Justice. The Department [DHS] was urged to look into the report and those after it and reflect on how they were delivering on the promises of the Constitution. Section 146 of the Constitution has to do with universal, uniform, national standard-setting [through national legislation]. If such was in place it would be possible to achieve all seven objectives listed. Every South African who qualified for any category of grant would be guaranteed access to it, irrespective of municipality. With housing it was slightly complex. What measures had the portfolio put across to ensure they led from the front at national level and set standards and norms in law? An enforceable law would avoid the current results and produce individual province APPs working towards the same goal clearly articulated in the Constitution and the law. The current APPs [of the provincial departments responsible for human settlements], when cross referenced, showed no commonality. Twenty-seven years later the Department was only starting to work towards that. Boldness was required to reshape the entire system. The Department was urged to exercise the power afforded by the Constitution and not be threatened by federalist tendencies or attitudes.

The registering of deeds was under the competence of the Department of Land Affairs, which was not a component of the human settlements ministry. The Department was asked about its understanding in ensuring effectiveness in the title deed performance area. What was their understanding of their role in the value chain? What was their understanding of what should propel other concerned components in the value chain especially regarding rezoning? Despite not having political or legal authority to constantly sue one other as government institutions, were they struggling to mobilize collective effort between portfolios and the three entities involved in the land question?

Relating to the section 21 initiative by Parliament, there was an initiative delegated to the Deputy President to lead a multi-sectoral review of the land reform process. The Committee of experts led by Prof Vuyo Mahlati had covered most if not all the significant issues in their report. Why had no one said anything about it? Why had the Department kept quiet despite having been a part of the process? How could the government spend resources on processes of policy reform seeking to improve performance, and then nothing be done? The Committee should take seriously the frameworks it had participated in.

Adv Masutha said he supported Ms Powell’s plea to have a session with all three spheres. There was no law or any provision of the Constitution, needing them to seek permission to so.

In a previous meeting Ms Powell had promised factual supporting information to confirm that his statement regarding the Western Cape was false. According to Ms Powell, Western Cape was said to have prioritized the issuing of title deeds in ensuring the reversal of the 1913 Land Act and inequality built over a century, (asset accumulation and wealth accumulation through physical asset ownership explains racial disparities). The Department was asked if they had facts supporting the allegation of a false statement.

Ms N Sihlwayi (ANC) commented on the AG and DPMEs findings having helped analyze the Department performance. Despite the action plan’s implementation, there were no results for the Department’s benefit on the service delivery. This shows the Department’s inability in resolving the findings relating to irregular expenditure and inadequate financial statements. The Housing Development Agency had been identified as one of the agents with an unclean audit despite the action plan - this includes the NHFC and NHPRC.

The Community Schemes Ombud Services (CSOS) entity had failed to present creative systems for the collection from different schemes. What were the Department’s clear reasons for this?

Regarding the HDA there were no clear consequence management measures. The financial statement was inadequate and could require the management to oversee lower level officials of some entities.

In some of the entities there were no internal audits. How could the performance be monitored internally without the internal audits?

The customisation of the indicators showed lack of coordination between levels of government. Was the integrated development model not helping in that regard? What was the Departments’ strategy? Houses had been built without being allocated to the owners. Why was this an issue? The lack of proper record keeping, meant an inability to represent the [work of the] Department adequately.

In Limpopo, an issue had been raised concerning a program that had been inadequately implemented. The SIU had investigated, and findings showed lack of consequence management measures. Why was it like this, what was the issue? Why were the recommendations by SIU not implemented? There was a logical framework clarifying the activities at each level. Whose role was it to ensure the program achieves its objectives? There was no clear program performance evaluation during its implementation, meaning objectives were not achieved. This was not a personal attack. The Department was urged to monitor operations and help the officials concerned in reaching their objectives.

From the self-evaluation of performance results, the Department was asked to continue achieving its set objectives and not deviate (page 10) in its strategy to avoid budget waste. Why were the programmes that had reached a point of not yielding favorable results not visible?

Why was the AG waiting on the Department’s report at the end of the financial year? Why are they not rendering a democratised service of delivery and helping the people of this nation? Despite the Department’s defense in alluding to times the Committee had assisted in intervening on the unfeasible indicators and measures, the goal is to improve service delivery and have the budget reach its goals.

Management notes that in cases of underutilisation and lack of performance, funds get redirected from one province to another. But communities will still want service delivery. Sometimes the reasons were not known by the people. What if this was recurring, what if they do not know that the areas of no performance had been addressed? What if government was blamed in this regard? The Department was urged not to continue with these actions.

Mr Tseki asked for Ms Powell to be called to order regarding her chat response to the Western Cape issue raised by Adv Masutha considering his statement and knowledge on what was happening in the province.

The Chairperson asked the Committee to use the chat space for constructive issues and if there were issues, members were urged to interact in a way that allowed the concerned party to respond.

Ms Powell pointed out the Committee had seemed to pick on others by name. The response in the chat was to avoid wasting the official’s time in calling Adv Masutha to order. If the chat is not allowed, a ruling must be made in the Committee and abided to and perhaps disabled. When she was personally attacked, she would continue to defend herself.

The Chairperson emphasised the need for the Committee to engage in a manner that allowed the other to respond considering Mr Masutha’s status. Adv Masutha was denied the opportunity to respond on the matter.

Concerning the questions directed to the AG by Ms Buthelezi, the Chairperson requested a written response if the AG was not present to answer.

Minister Kubayi appealed for the reservation of selected questions to relevant entities to the time when the entities appeared before the Committee on Friday 12 November. If it was an oversight issue, the Department would comment.

On the correction of misstatements in program two, DDG Leshabane confirmed effecting a correction relating to the reported development plans for the declared priority development areas.

The AG had noted that, despite DHS having the choice to make new plans, the DHS had not developed new plans but had rather recognized the already existing plans [formulated in the local government sphere]. This had been flagged as “no achievement” on the DHS side. The submission was revised to lower the number of new plans. There had been no need to duplicate and develop new plans where municipal plans were sufficient.

On the restatement of the initial achievement, the DDG confirmed monitoring of projects despite the AGs findings showing inadequate evidence that supported the DHSs [claims about the] level of monitoring.

A service provider for evaluations of informal settlements upgrading and rental housing tribunals had not been appointed due to the initial lack of response [from potential bidders]. This wasted the DHS time as they had to return to the market.

On the vandalised, incomplete, or unallocated houses in Greater Taung, an investigation was required. Engagement with the province would verify the reasons for this. DHS would revert to the Committee on the matter on 1 December.

On the 136 priority human settlements, the Minister said the Committee was aware the housing development areas had been gazetted in May 2020. The provincial delivery plans had been approved by March 2020. The provinces could however not reconcile what they were investing in the declared areas. The provincial plans could then be upheld in this round of delivery plans.

Slide 20 showed the rigorous verification by the Department on provinces’ reports on registered title deeds. Most members had called for the turnaround intervention as the program had not been performing. A strategy had been put in place to ensure that township formalisation or proclamation had been made first priority. The Minister said collaboration with multisectoral Departments had been strengthened. Continued efforts were made on the rezoning of land. Lower performance in those areas was due to time lags in the finalisation and approval of applications.

Treasury had approved rollovers on unspent portions of the title restoration grant in all credible cases. Provinces had realised they could not register titles if they lacked a township register of titles. This meant under expenditure of the grant. Whilst the grant had been discontinued, the funding remained a part of the human settlement development grant. There was no loss of funding opportunity as the grant still funded the Restoration Programme.

DDG Chainee asked for the rental relief issue raised by Ms Powell to be addressed during the meeting scheduled for 2 December when the entities presented their findings.

Adv Masutha’s comments were welcome, especially on the overlooked point of starting with the Constitution, the National Development Plan (NDP) and MTSF. There was a need to resolve audit findings on an evaluation which went against the Constitution and mandated objective.

The AG determined there was inadequate reliable evidence on the issue raised by Ms Mokgotho around the PHP. There were a number of iterations and consultations by the AG. The AG would never mislead the DHS or misrepresent issues, as a Chapter 9 Institution under the Constitution.

DDG Mahlatsi admitted the AG had not accepted the population sample [used to evaluate the PHP]. The DHS were currently correcting the APP to avoid recurrence of issues.

There had been no proper planning for the Zenzeleni program and for its indicators. The DHS had noted the mess and were working towards finding indicators that would yield appropriate outcomes and deliverables. The DPME and AG had been included in the customization of these indicators.

On the delay in the pension fund contribution payments, recommendations had been made to have the money deducted from the employees by the Internal Audit and Labor Relations Unit.

Fruitless and wasteful expenditure was under evaluation. Results would be disclosed after assessments had been finalised and subsequently consequence management would be instituted.

Despite the internal control deficiencies and the issues raised on the indicators by the AG, the APP would go ahead. Although not finalized, the draft had been done. Issues identified by the AG had been considered, particularly problems 2-5, with problem one having been a recurring problem in the audit. Though the current APP would not solve problems in the past it would avoid the current findings being repeated in future.

The DHS had been repositioning capacity development as part of the Inter-Governmental Relations (IGR) activities within the sector. Skills development at provincial level would include residents from the relevant provinces with special attention being paid to the vulnerable groups, such as women, youth, and people with disability. This would promote economic transformation within the sector. In enhancing the IGR participation, it was believed it would assist in the issuing of title deeds.

Ms Letsholonyane confirmed there would be increased efforts to support municipalities on their internal capacity, for the oversight of the entities.

Dr Sokopo confirmed the DHS had begun to rationalize operations on informal settlements, thus ensuring they provided project level support to the municipalities and provinces. There was focus on the end goal particularly the township establishment in enabling the issuing of title deeds.

DHS was pushing for permanent bulk infrastructure. The upgrading of about 1 000 informal settlements was being paid for. Informal settlements in phase one were known, together with the municipalities that would have put them within the business plans. Currently there were 323 informal settlements currently in phase three. The procurement delays on the installation of infrastructure were still of concern. Support had been provided and processes as per the Spatial Planning and Land Use Management Act (SPLUMA) in allowing for a period of advertising had been followed.

On the reblocking issues, once a layout plan had been established, the process would start. Whilst agreeing on the need to expedite security of tenure, this would be possible through township establishment processes.

The issues on the performance of the Department raised by the DPME would be explained in the following meetings.

The DG confirmed the Department’s involvement in the Inter-Ministerial Committee (IMC) for land reform. Minister Kubayi and Minister de Lille had agreed to the transfer of 14 000ha of public works land to human settlement development, showing leadership in the IMC.

On the issue of security of tenure and service stands, focus was to be made towards providing fully subsidized houses to the vulnerable, elderly and indigent.

A workshop for all provinces was needed to interrogate all areas that were not performing well. Informal settlement upgrading and the title deeds program ought to be further interrogated.

A budget to finance innovation for addressing the national deeds register issue was needed. Despite previous efforts in establishing an app, challenges were faced at municipal level. Improvement and innovation was still required.

On the asset ownership issue raised by Adv Masutha, the real estate and asset management business in South Africa would be studied. +90% of real estate business in the country was untransformed.

Opportunities for tweaking the operating model in human settlements and easing the disbursement of the human settlement grant did not always exist. Reality in practice and policy intent may not always align.

Ms Pam Tshwete, Deputy Minister (DM) of Human Settlements, confirmed some provinces had been struggling to deliver on their housing mandate. The DM agreed with Adv Masutha’s comments for a need for APP commonality across provinces, an observation made by the Minister as well. On the Western Cape issue, the Committee was urged to go and conduct oversight visits and formulate their own findings as the Minister would do soon.

The Minister reassured the Committee issues would be responded to with time. The Department had interacted with the entities. Appointments to the HDA, NHPRC, SHRA, CSOS and the EAAB/Property Practitioners Regulatory Authority, were expected by Friday 12 November. The NHPRC board had been dissolved following communities’ feedback concerning their function. The HDA administrator was left to proceed until they had appointed a board. With the coming quarterly reports the Committee was assured they would receive the action plans detailing the Department’s progress.

On the unfinished projects, business plans of provinces and municipalities will be drawn on. Engagement between the executive authority of the portfolio, and that of the provinces and municipalities (and municipal leadership), receiving the grants would ensure sign off on the business plans. This would ensure alignment in terms of national priorities and relative issues on the ground.

On the Talana project, the SIU had opened cases against the contractors involved. Consequence management had been applied after the AG’s report and therefore was not recorded in the 2020/21 Annual Report.

Ms Mokgotho asked again about the reasons for inconsistent status reports for the Temporary Relocation Units (TRU’s) project. What was the current status for the HSD bank? What were the reasons for the late appointment of the service provider for the UISP study? DHS was asked to provide details on the R24 million from program 3-2 that had been repurposed from COVID-19 relief funds to the Estate Agents Affairs Board.

Ms Sihlwayi commended the appointments of the Chairperson and the Minister.

Ms Powell apologised for not being aware of a sight-impaired Member of the Committee and said she ought to have verbalised her comments rather than putting them on the chat.

The Minister said the Human Settlements Development Bank was in its final stages. Meanwhile the entity would reposition itself towards the process while the Bill is awaiting Parliamentary approval.

On the TRU’s, despite others calling for the dissolution of the TRU project, TRUs do help in temporarily housing people while the repositioning plans are under way. The DHS was currently upholding quality infrastructure and standardizing the costs. The Minister said in some cases engagement with the communities had not occurred, causing problems. TRU’s helped in 24 hour disaster housing response. The other issues raised by Ms Mokgotho had been previously answered. Cost for building was higher in some areas such as Northern Cape due to lack of local manufacturing. The Minister confirmed everything was still a work on progress and promised to work with the Committee.

The AG’s representative, Mr Songwevu, assured the Committee of continued engagement with both the accounting officer and authorities as well as the management of the entities in trying to influence the implementation of consequence management principles. The AG was unable to implement the Public Audit Act (PAA) amendments at entities that were not part of those entities implementing phase 2. On the Limpopo project they were yet to follow up - in the 2021/22 audit - considering the report had been based on the period ending on 31 March 2021.

The Chairperson made closing remarks.

The meeting was adjourned.

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