The Portfolio Committee on Human Settlements met virtually for the consideration and adoption of its draft Budget Review and Recommendations Report for the Department of Human Settlements and its entities for the 2020/2021 annual performance.
The key recommendations by Members comprised the inclusion of targets against which the achievements of entities could be compared; the inclusion of the Auditor-General’s recommendations in the BRRR; various requests of the Committee to strengthen and broaden recommendations and include correct timeframes; compliance with legislation; the recommendation to spend the Human Settlements Development Grant and to provide support and capacity; the need to ensure consequence management, prevent irregular, fruitless, and wasteful expenditure, and implement audit recommendation plans; the provision of timeframes in which progress reports on allegations of fraud and corruption were to be provided; dealing with the lack of a coordinated response to address corruption and ensure coordination of all spheres of government and entities in the implementation and monitoring process; the drawing up of anticorruption plans; to develop a single housing delivery model for spheres of government and entities and that progress should be reported quarterly; the implementation of the Committee’s recommendations and ensuring compliance; the decline in the number of community schemes registered which was not stated in the BRRR; a request that the annual target be written such that an external reader may have an idea of performance; the filling of vacancies; the scheduling of relevant meetings per Committee recommendations each term; and dealing with the underspending by the Department, especially as it related to its failure to provide housing.
The Committee adopted the draft BRRR subject to the above recommendations. The EFF did not support the adoption of the BRRR. Members were to receive the edited draft BRRR before it was to be tabled.
In addition, the Committee considered and adopted its outstanding minutes.
The Chairperson welcomed the Committee.
Budgetary Review and Recommendations Report 2021
Mr Sabelo Mnguni, Committee Content Advisor, presented the draft BRRR on the Department and its entities for 2021.
The Chairperson thanked Mr Mnguni and asked members to interact with the BRRR.
Ms E Powell (DA) thanked Mr Mnguni for drafting the BRRR because she thought that in many ways he had done a very good job. She recommended that the percent sign be added under point 7.3 so that it was clear it was percentages and not actuals. Point 8 of the BRRR addressed the Housing Development Agency (HDA), and at the top Mr Mnguni had detailed some of what the critical issues were. She thought that Mr Mnguni had done a good job of detailing those critical issues. However, on page 13 the sentence that began with “The HDA achieved the following…”: when one read this without looking at the actual report of the entity, one would not know what the targets were. For example, if it was said that “19 development plans for priority human settlements development areas were completed”, nobody who was reading the BRRR would be able to understand what kind of achievement that was because there were no targets against which to compare. She thought that in the context of saying what the entity achieved it would be useful to any person reading the BRRR to understand that the achievements were against X, Y, and Z targets. There were thus the percentages at the top of the report but not the actual targets where the achievements were detailed. Detailing the achievements are then essentially meaningless because it could be, for example, a 2% achievement but without the context of the targets it would be impossible to know how significant this achievement was.
Point 9 was titled “Reflection by the Auditor-General” and detailed some of what the Auditor-General had said. There was a spelling error in the title. In section 10, there were two contributions to the Committee: one by the Department of Planning, Monitoring, and Evaluation (DPME) and one by the Auditor-General, both of whom had made key recommendations. On point 10 which spoke about the DPME, it was very clearly indicated in the BRRR what the DPME’s recommendations were. However, on point 9 which was the Auditor-General’s, there was no section included on the recommendations of the Auditor-General. Point 9 only included a narrative of some of what was discussed in the meeting and then a reflection on special reports but did not include a section on the recommendations of the Auditor-General as was done with the DPME. She thought that consistency was needed in the BRRR in terms of what the recommendations were of both the Auditor-General and the DPME.
She continued onto the Committee’s recommendations (page 22). She said Mr Mnguni had done a very good job of outlining some of the most critical recommendations. Recommendation 2 spoke about the provinces not spending the Human Settlements Development Grant (HSDG) on time as the result of contracts being late. The recommendation in the BRRR was to provide support and capacity to provinces in order to implement the HSDG. Firstly, the recommendation would be to spend the HSDG. She wanted the Committee to be clear on who must provide support and capacity. Is it the national Department of Human Settlements? Is it the Committee? Who must provide support?
Recommendation 4 said that some entities did not take effective and appropriate steps to prevent irregular expenditure which was caused by noncompliance with Supply Chain Management (SCM) prescripts X, Y and Z, and disciplinary steps were taken against officials for incurring irregular expenditure. The recommendation was to follow up with entities that incurred irregular, fruitless, and wasteful expenditure to ensure that there was consequence management.
Mr A Tseki (ANC) hoped that the questions being raised by Ms Powell were being directed at the Committee and not Mr Mnguni.
Ms Powell clarified that she was raising her contributions to the Committee but that she was talking to Mr Mnguni because he needed to write it down in the event that the Committee agreed. She continued with recommendation 4, saying that the Committee’s interest was not just in ensuring consequence management but was in ensuring that it did not happen again. On recommendation 4, her suggestion to the Committee was to ensure that there is consequence management as agreed but also to include that there is an implementation of the audit recommendations or audit turnaround plans. This was so that the Committee was not just talking about consequence management but that they were also making a recommendation to Parliament that the entities implement the audit recommendations and audit turnaround plans.
Recommendation 6 was not clear in terms of who was being spoken about. The sentence started with “Some did not exercise oversight responsibility over internal controls and the review of financial performance…”. When Mr Mnguni referred to “Some”, not all entities were guilty thereof as some entities had done better than others. She thus thought that recommendation 6 should state which entities did not exercise oversight responsibility over internal controls, review of financial reports, and so on. The Committee should be clear on who they were talking to.
Recommendation 7 read: “to provide a progress report to the Committee on the results of the investigation of allegations and ensure consequence management”. She asked that a timeframe be included as the events had occurred in the previous year. The recommendation thus said that a progress report was to be provided. Other recommendations that had been included had timeframes. For example, it would say “once a quarter” or “once a year”. She thought that when the Committee spoke about providing a progress report on allegations of fraud and corruption that they should say when it must happen.
Recommendation 8 meant nothing to her. It said that there was no compliance with legislation in some entities, and the recommendation was that the management team was to ensure compliance with legislation. The Committee had to broaden this recommendation. How should management do that? What is the Committee going to do to ensure that the management team achieves this? The management team knew that they had to ensure compliance with legislation but they had not achieved that. So, the Committee telling the management team that they must ensure compliance with legislation meant nothing. As a Committee she thought that the recommendation could be strengthened and clarified.
On recommendation 13, the timeframe of the first quarter detailed had already passed. The recommendation said that the intervention plans should be presented to the Committee in the first quarter of the 2021/2022 financial year. This timeframe had long passed so a different date was needed.
Recommendation 16 read that the Committee was concerned about the lack of coordinated response to deal with corruption in the sector. The recommendation was then to ensure coordination of all spheres of government and entities in the implementation and monitoring processes. There were specific anticorruption plans for each entity, but some of the entities had not concluded them: the HDA was one of the entities that had not concluded an anticorruption plan for various reasons. The coordination of all spheres of government was not the key recommendation in responding to corruption. Her opinion was that this recommendation did not fit. When talking about corruption—and perhaps members had some ideas here—she thought that the Committee needed a much stronger recommendation when talking about how they were going to assist in arresting corruption.
Recommendation 20 also needed to be strengthened and said that the Committee was apprehensive about the lack of management of beneficiary lists. “Apprehensive” was not the right word as it meant unsure. Perhaps the recommendation should say that the Committee had raised various problems or concerns about the lack of management of beneficiary lists. The recommendation was to ensure the proper management of beneficiary lists and prevent political interference. Again, this said nothing. This recommendation needed to be strengthened in terms of what the Committee’s ideas were to stop the ongoing issue that there was around beneficiary lists.
Recommendation 21 needed to be discussed in terms of what it meant to the Committee as it was a very strong recommendation. The point raised was that the Committee observed that there was no single delivery model for spheres of government and entities and that as a result there was a lack of coordination in the sector. The recommendation was to develop a single delivery model for the human settlements sector and that a progress on the model should be reported quarterly. What did a single delivery model mean? There were national rules, standards, quanta, standardised monitoring and evaluation processes, and standard typologies. Everything was standardised. Therefore, when talking about a single delivery model for the human settlements sector, this was a very strong recommendation, but she, as a Committee member, was not even sure what it was supposed to mean. As a Committee this needed to be discussed. Recommendation 24 went back to her concern that the DPME’s recommendation was included in section 10 but the Auditor-General’s recommendation was omitted in section 9. When this recommendation said that the Committee must adopt the recommendations proposed by the DPME and the Auditor-General, the Auditor-General’s recommendations were in fact not detailed in the BRRR.
There were many meetings that were going to be required if the Committee adopted the quarterly monitoring contained in many recommendations. The Committee had to decide whether they were going to monitor the implementation of their own recommendations. For example, it would be recalled that from the previous BRRR and Audit Report cycle that one of the recommendations was the quarterly monitoring of the HDA’s independent auditor’s recommendation turnaround plan. Due to the recess period and diary problems, the Committee had actually failed to do that, so the meeting was never held and it was a recommendation that the Committee had themselves put to Parliament. The Committee needed to be very astute in making sure that every quarter their programme contained meetings that addressed their own recommendations.
Ms S Mokgotho (EFF) said that under the Community Schemes Ombud Service (CSOS) there was a decline in the number of community schemes registered but that was not stated in the BRRR. Instead, what was stated was that CSOS had achieved about 1 127 community schemes but the deviation of the actual number of community schemes that were supposed to have been registered was omitted. The deviation was 3 873; in other words, CSOS did not do very well here because they were supposed to have achieved 5 000. There was also a percentage of disputes conciliated in terms of which CSOS had achieved 28%, but there was no target matched or compared against that 28%. She requested that the annual target should also be written so that another person who was not in the Committee or who was not going through the initial presentation of CSOS should have an idea of exactly how CSOS had performed in this regard. There was, further, a percentage of disputes adjudicated whereby it was stated that CSOS had only adjudicated about 27%. Again, 27% against which target? This should also be stated. It was also not mentioned that CSOS had failed to appoint previously disadvantaged individuals as executive management agents. She thought that this should also be stated in the BRRR. Under HDA, during the financial year 2020/2021 there was an irregular expenditure of R15 million which was not stated in the BRRR, as well as the fruitless and wasteful expenditure of R8 000.
On the National Housing Finance Corporation (NHFC), it was known that the NHFC did not do very well because to date it was still functioning with an Acting CEO and Acting CFO. The vacancies of CEO and CFO had not yet been filled and should also appear in the presentation.
Ms N Tafeni (EFF) suggested that, under section 9 on the Auditor-General, the Committee insist that the specific recommendations made by the Auditor-General be included as had been done for the DPME in section 10. Further, she suggested that the Committee had to develop a robust programme of action whereby they were able to schedule the relevant meetings as per their own recommendations each term. There were a lot of recommendations about the Committee monitoring relevant issues on a quarterly basis and they had to make sure that it happened.
Mr Tseki had heard what members were saying and he thought that they were raising quite important issues. Members were not to forget that the BRRR was informed by all the activities they engaged with through the Auditor-General and also with the DPME.
Ms Mokgotho raised a point of order. She said that Mr Tseki was to stop addressing members and had to say whatever he wanted to say based on the BRRR.
The Chairperson said that the issues that Ms Powell had raised before were issues that the Committee had to engage on. If Ms Mokgotho was saying that Mr Tseki was not to talk to those issues, were they being dismissed without speaking to them?
Mr Tseki had made his point. He appreciated the BRRR and thought that it was well written with those few amendments, in particular, the issue of the Auditor-General.
On the HDA, there was a process that the HDA Management had given to the Committee and the Department had assured them on the way forward in terms of the HDA. Consequence management and many interventions were being applied to resolve those challenges of the HDA.
On the area raised by Ms Mokgotho where CSOS had failed, Ms Mokgotho would assume that he was addressing Members but he was addressing issues raised by Members as a Members himself. He thought that the issue was the language used.
The Committee had given CSOS action, like what Ms Powell had said about monitoring. The Committee’s job was to do oversight on the Department and its entities, so the issue was neither here nor there. The Committee would have the relevant meetings to get responses. He supported the BRRR and thought that it was a very good report.
Ms C Seoposengwe (ANC) said that she was not part of the meeting when the Committee took decisions but that she was part of the discussions when the Auditor-General and DPME team had briefed the Committee. She suggested that it was important that in the achievements of the Department and agencies that they should also be able to break down the provinces. This was so that one could know if there was any movement in other provinces, especially the outlying provinces that were not the centre of the country’s economy, so that one could know if there was anything happening in those areas. She hoped that her suggestion would not divert the Committee from its main discussions but it was important to know the difference that was made. For example, in rural areas, when talking about 30%, were the women, youth, and persons with disabilities also benefitting?
The Chairperson told Mr Mnguni that members had raised their issues. Indeed, the Committee had to be consistent. The issue of the Auditor-General and DPME had been raised, as well as the recommendations of the Auditor-General. When the Committee had closed the meeting they had actually endorsed the recommendation of the Auditor-General and it had to be included in the BRRR.
On the issues that members had raised about the use of “some”, she agreed that the BRRR should actually specify which entities were being referred to. On the corruption issues, indeed departments were expected to draw up anticorruption plans. The Committee should then be able to say that both the Department and the entities should develop anticorruption plans that would actually curb corruption in the sector itself.
On the issue of CSOS failing to appoint the previously disadvantaged persons, this could be looked at. In general it was agreed that some of the recommendations needed to be strengthened and that the correct timeframes needed to be included.
On the issue of the single model for housing delivery, from national to local level there should be similarities in terms of the implementation of the framework. She thought that this was what the BRRR was trying to capture because in some instances there was no coordination or framework. This had been raised by the Auditor-General and, as part of the recommendations, the Committee should be able to get the Department to establish or develop a single framework that actually spoke to all implementers of Human Settlements. She thus thought that the recommendation was relevant.
Ms Mokgotho said that by the end of the 2020/2021 financial year the Department, instead of spending R29.1 billion in order to provide indigent people with decent housing and improve their living conditions, the Department had failed to do so. The Department had underspent by R261.8 million. It was known that there was a huge backlog of housing in the country, and as a result people were suffering and were homeless.
The EFF was not adopting the BRRR and thus rejected it.
The Chairperson reiterated that Mr Tseki was moving for the adoption of the BRRR with the strengthening of some of the recommendations about which members had spoken.
Ms Tafeni reiterated that the EFF rejected the BRRR as she was experiencing network challenges.
Mr T Malatji (ANC) said that the ANC adopted the BRRR.
Ms Powell asked that Mr Malatji provide clarity on whether the ANC was adopting the BRRR with the recommended edits as suggested and agreed to.
The Chairperson said that there was an issue to strengthen recommendations and that Ms Powell was asking whether the adoption of the BRRR included the recommendations as amendments. Some of the recommendations would not come up in the way that Members had raised them.
Mr Malatji confirmed that the ANC was adopting the BRRR with the recommendations per the Committee.
Ms Powell was battling to understand the mention of Mr Tseki, who was one of the individuals that had made inputs. Did this mean that only Mr Tseki’s recommendations were going to be taken?
The Chairperson said that some of the issues that had been raised to strengthen the resolutions should be clarified. The Committee also agreed with the issue of the single framework.
Ms Powell asked if the Committee could go through which recommendations were agreed to and which were not. She thought that this was important. To make it simple and to refrain from it becoming a political argument, which was not her intention, she thought that the question should be which of the recommendations were not accepted as there had been broad consensus on most. Which recommendations made by members were rejected?
Mr Malatji said that the normal procedure was that when recommendations were made by different members, there were certain recommendations that were more dominant than others to strengthen the BRRR. Obviously, the recommendations that had to be considered were those that had to do with strengthening the report. Some of the recommendations were just comments and did not have anything to do with strengthening the BRRR. The Committee was to focus on those recommendations which strengthened the BRRR as Mr Tseki had recommended.
Ms Powell agreed that Mr Malatji had made a fair point. There were some questions, for example, on the single system and there were also recommendations in terms of whether the Committee was going to have a discussion as a committee about which specific recommendations they could make on the issue of corruption. Generally, she thought that most of the recommendations looked broadly, neutral, and in a non-political way, at strengthening the BRRR as a Committee. She thus agreed and was happy to accept it if the Committee could provide a date that the edited report would be shared with them to see what edits and inputs had been made.
The Chairperson said that before the BRRR would be tabled to the Announcement, Tabling, and Committee Reports (ATC) it would be circulated to members. The Committee was expected to report by 3 December 2021 on which date the BRRR should be on the ATC. She told Mr Mnguni that some of the recommendations had to be strengthened and that the BRRR should then be circulated to members. Members then still had the right to say that they did not agree with the recommendations through other processes within the House. However, the things that had been mentioned were the strengthening of the recommendations.
On the issue of beneficiary lists, it was important to say what was meant by political interference. The Committee needed the Department to develop a system to ensure that beneficiary lists are not being tampered with without referring to political interference. This was because it might not be true that there was political interference as it might be the external system that actually captured those that came onto the list that had to be protected. The new ones had to follow the old ones, so that the system could be transparent to everybody and provide the beneficiary list of a particular municipality. This was a genuine recommendation that had to be worked on and captured the essence of what members wanted to see in the beneficiary management system.
On the issue of corruption, she agreed that one could not refer to coordination when talking about corruption. There had to be anticorruption plans developed by the Department and all entities, which was a requirement in terms of the Department of Public Service and Administration which expected every other department to have anticorruption plans.
She agreed on the issue of the recommendations of the Auditor-General, in that they should appear in the BRRR. The recommendation should not be mentioned without saying what they are. It would be the recommendation of the Auditor-General that would be adopted as a recommendation of the Committee as they tabled the BRRR to Parliament.
Ms Powell agreed with the Chairperson.
Committee Minutes dated 31 August 2021
The minutes were adopted.
Committee Minutes dated 10 November 2021 (Session 1)
The minutes were adopted.
Committee Minutes dated 10 November 2021 (Session 2)
Adv M Masutha (ANC) indicated that he had not been with the Committee for over an hour due to connectivity issues. This comment was just so that the Committee was aware that he was having problems with connectivity.
The Chairperson said that if there was anything that he had wanted to amend or raise on the BRRR, he could send it in writing to Mr Mnguni so that it could then be part of the BRRR. The Committee was now adopting the outstanding minutes.
Adv Masutha said that he did not know what had transpired and that it was water under the bridge. He had just wanted the Committee to be aware.
The minutes were adopted.
Committee Minutes dated 12 November 2021
Ms Powell said that when the draft minutes had been circulated to Members for suggested edits, she had sent through a few edits as the minutes had confused the deliberations between the HDA and the EEAB. She asked if the Committee could read through the deliberations part of the draft minutes carefully. There were significant issues with the minutes and she had submitted a whole bunch of suggested inputs to the Committee Secretary the previous day. The Committee had had extensive discussions on three points under the deliberations of the HDA. For example, under the EEAB, the Secretary included section 65(1)(b) of the Public Finance Management Act, which was a deliberation that took place in terms of the HDA. Going down to fiduciary liabilities of the Minister and the Accounting Officer for deviations, this was something that had taken place in terms of the HDA. She asked if the Committee Secretary had received the edits she had sent to her the previous day because, without her political imperatives in terms of the discussions that had really taken place, the minutes were incorrect.
The Chairperson asked if it could be agreed that the minutes would be referred back.
Ms Powell continued with another example, saying that the minutes were “pretty confused”.
Mr Tseki said that the Chairperson’s advice would be taken to send the minutes back.
Mr Malatji said that there was also an apology of Dr Z Mkhize (ANC) that did not appear in the minutes. The minutes were to be sent back, the additions were to be made, and then they could be brought back to the Committee.
The Chairperson said that the minutes had been withdrawn. The Committee Secretary was to listen to the recordings of the meetings. All deliberations were to be included. Members had asked questions and there were responses from the Department. All of the issues were to appear in the minutes.
Committee Minutes dated 17 November 2021
The minutes were adopted.
The Chairperson thanked everyone for attending the meeting.
The meeting was adjourned.
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