Interventions to stabilise Housing Development Agency & Property Practitioners Regulatory Authority; Plans to accelerate transformation of the real estate sector; with Minister & Deputy Minister

Human Settlements

23 March 2022
Chairperson: Ms R Semenya (ANC)
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Meeting Summary


The Portfolio Committee convened on a virtual platform for a briefing by the Department of Human Settlements (DHS) on the interventions undertaken to stabilise the Housing Development Agency (HDA) and the Property Practitioners Regulatory Authority (PPRA), formally known as the Estate Agency Affairs Board (EAAB). The Department and the PPRA also briefed the Committee on plans to accelerate transformation in the real estate sector.

The Minister and the Deputy Minister were present, and the entities were accompanied by the chairpersons of their respective boards and their CEOs. The Minister began with a brief introduction, stating that the Department had appointed the boards of both entities on 1 November 2021. There was a need to build relationships with stakeholders, including those with which the Department had been involved in litigation, to address outstanding issues. The priority of the DHS was to stabilise the entities by filling outstanding vacancies, particularly executive positions, and ensuring good governance practices were in place. Where reports and allegations were made, they would be investigated. Details of the various investigations undertaken in the entities would be reported to the Committee once they were finalised. She stressed the importance of service delivery by the entities and assured that work was being done to address the issues the entities were facing.

The Department’s presentation focused on the process followed to appoint the new boards of the entities, which had been done in line with the provisions of the relevant acts. For the HDA, adverts had been published in newspapers and a new chairperson appointed. The process of filling in the positions of chief executive officer (CEO) and chief financial officer (CFO) was underway. The HDA aimed to improve performance by rebuilding its brand through ministerial visits and board roadshows and repositioning it as a developer of choice. In the PPRA, the CEO had been appointed from 1 February 2019 on a five-year employment contract, but the entity was experiencing challenges in filling the CFO post. A new board and chairperson had been appointed. The PPRA aimed to improve stakeholder engagement and focus on transformation in the sector.

The PPRA said the board was dealing with transitioning from the EAAB to the PPRA and was engaging with issues of change management and strategic planning. It had put in place a turnaround strategy to deal with its reputational damage and the litigation issues it was previously involved in. It was meeting with various stakeholders in this regard and putting plans in place to improve perceptions of the entity. The legislation empowered it to establish a transformation fund in response to its transformation agenda, and it would also establish a research centre to improve its response to transformation issues, particularly in relation to the economic participation of vulnerable persons. The presentation also expanded on the PPRA’s mandate to encourage the participation of previously disadvantaged individuals (PDIs) in the property sector through transformation programmes such as the youth “One Learner, One Property Practitioner” programme and the amnesty campaign.

The HDA said that its major responsibility was to support government in transforming spatial settlements and deal with past land distortions. The entity had faced issues of instability in the past, as there had been no stable board, which had resulted in a trust deficit and disgruntled members within the entity. The high turnover of senior executives had also resulted in consecutive qualified audits for the entity. The new board had swiftly established committees to ensure proper governance oversight and perform various functions to ensure stability. It was working to address the audit findings, more than half of which had already been dealt with, and investigations were being conducted by the Special Investigating Unit (SIU) in relation to some of the findings. The outcomes would be communicated to the Committee once completed. Disciplinary processes were underway where required, and the board was trying to reinstate a culture of following internal processes. The HDA had also put targets in place to focus on PDIs in its transformation agenda, and it was keen to investigate alternative innovations in the implementation of human settlement development.

Members appreciated the long road travelled and the extent of the efforts put in by the Minister in turning around the entities. The Deputy Minister said the DHS had come a long way, and it was an ongoing process to stabilise the entities. Members stressed the importance of transformation agendas in the entities. A question on whether the CEO of the PPRA would be placed on precautionary suspension due to allegations levelled against her, could not be answered because the process was ongoing. A Member questioned the seemingly unequal participation of PDIs in the property sector, and the PPRA assured the Committee that the emergence of a new market would allow it to address a wider scope of vulnerable people and geographical areas. It also rejected concerns that the PPRA was not ready to implement the Property Practitioners Act, and dismissed concerns about media reports smearing the entity, highlighting the entity’s strong transformation agenda.

Members raised issues around the irregular, fruitless and wasteful expenditure in the HDA and its plans for anti-fraud and anti-corruption implementation. The HDA said the issue was an ongoing matter that was being addressed and internal controls and preventative measures were being put in place, while implicated staff members were being held responsible. The Chairperson asked where the PPRA would be getting funding for its transformation process, and the DHS said it was in talks with the PPRA to engage with Treasury to assist with its unfunded mandates. The HDA, on the other hand, had a secondary mandate of recapitalisation, so it could manage its own budget in future. On issues surrounding ongoing investigations, such as the SIU investigation at the PPRA, the Department and entities would return with reports on the outcomes of the respective matters once they were finalised, as they were not yet in a position to disclose the progress.

Meeting report

Chairperson’s introduction

The Chairperson welcomed the Minister and the Department of Human Settlements (DHS) to the meeting. The Committee had been allocated three hours for the meeting and the Chairperson requested that that time be managed effectively. Ms A Buthelezi’s (IFP) apology was acknowledged and the Committee wished her a speedy recovery, having sent her flowers and well-wish messages. The chairpersons of the Housing Development Agency (HDA) and the Property Practitioner Regulatory Authority (PPRA) were welcomed, and the Minister was congratulated for having speedily appointed the boards of the two entities.

Minister’s opening remarks

Ms Mmamoloko Kubayi, Minister of Human Settlements, said she had sent an apology to the Committee requesting she be excused early from the meeting as that she had a matter to present in the Cabinet, and she was constitutionally required to attend Cabinet meetings.

She began with a background on the Department’s actions in stabilising the PPRA and the HDA. The DHS had appointed both boards by 1 November 2021. She had received the reports from the entities and the chairpersons would take the Committee through their progress. She had addressed the need to ensure that the Department builds relationships with stakeholders by meeting with them. This included those that the Department had previously found themselves in court over. This was to ensure that it was in agreement on issues and reduce the risk of litigation between the Department and the sector -- for example, the Real Estate Business Owners of South Africa (REBOSA). The Department would engage the board and give them an opportunity to settle, and to look at the issues previously raised, including operational issues that may have been previously flagged so that the board could deal with them. In the process of appointing the board, the Department had ensured that it had appointed people who were members of, or practitioners in, the sector to help deal with issues. The Department was confident that it was on the right track and was committed to working with the entities to ensure issues were resolved.

On the stabilisation of the PPRA, there had been a number of allegations and reports in the media. She had forwarded one of the reports she had received which had come from the Public Service Commission (PSC) to the board to process, and it was being dealt with by the board. The Department’s priority was to stabilise, ensure operational efficiencies and ensure that there was brand management and brand protection for their entities. This responsibility included ensuring good governance practices where there were allegations made so that the Department could investigate. It also included ensuring that the relevant authorities dealt with the allegations.

At times, there was a misunderstanding of the role of executive authority, where there was an expectation for the Minister to get involved in minor issues, or issues concerning junior officials in the entities, which would reflect as interference from the executive authority. The Department was working on ensuring this did not happen. The Minister had met with the board instructing them to ensure that there was stability and to fill their vacancies, but also to ensure that with their induction, they understood the Public Finance Management Act (PFMA) and what needed to be complied with. The Department had gone through the PPRA’s annual performance plans (APPs), given feedback and ensured that what the entity presented to Parliament, they could take responsibility for.

The Department had given the HDA a clear mandate to stabilise, rebuild the brand and ensure that executive positions had been filled. The previous day, the DHS had received a submission from the board with recommendations and requests for concurrence on the appointment of the chief executive officer (CEO) and the chief financial officer (CFO). This would be processed and announced in due course. Despite giving all boards a deadline of end of February to fill vacancies. She was happy that progress had been made but felt the board should be able to move faster in ensuring leadership stability. The HDA’s brand had been damaged and needed to be worked on.

The Minister felt that the public, especially in the media space, placed unfair pressure or expectation on the boards. It was not recognised that sometimes boards had limited time to address issues, and there were expectations that could compromise the entities’ work and processes. Since the Minister had arrived in the portfolio, there had been many allegations, one of which had been written by an employee and had come through WhatsApp, which was extremely worrying. Some allegations had come through whistle-blowing. The Department had asked the HDA board to engage with and protect one whistleblower, who also had to ensure that they followed whistleblower laws, to investigate the allegations. The Department could not go into detail about some of the investigations as they were still pending but would report to the Committee once the reports were completed.

The Department had previously committed to accounting fully in terms of investigations and recommendations from the audits at quarterly performance briefings. What they were doing that week was a full media briefing in terms of the portfolio announcing new policy developments that were coming into effect from 1 April. The Minister’s interest was to ensure that all the boards were not derailed from focusing on the work at hand and providing services to people by focusing on investigations, as they did not have the capacity. The Department would announce a mechanism to deal with the investigations in terms of ensuring stability. There was a sentiment of complacency in the entities, with individuals having seen boards, executives and ministers come and go. Therefore, change would not be easy but was important to get work back on track and systems in place to work and produce output for the people of the country. The important thing was not whether the entities were compliant by receiving clean audits, but in ensuring that they made an impact on the ground and provided service delivery.

The Minister requested that the Department be allowed to deal with pending investigations, including allegations against members of the executive of the HDA. These allegations were not to derail the DHS from focusing on its work, as there were rumours and misinformation. She appealed to members of the public that where information was valid and where there was evidence, the Department be informed to deal with the allegations. Her instruction to the board of the HDA had been to focus on ensuring that the entity became a developer of choice to redeem its reputation. She acknowledged that change was not going to be easy.

DHS's interventions to restore stability

Ms Sindisiwe Ngxongo, Deputy Director-General: Entities Oversight, Inter-governmental Relations, Monitoring and Evaluation, presented the Department’s interventions undertaken to stabilise the HDA and the PPRA. She noted that the Minister had covered some of the content in her introduction.

HDA background

The board that was appointed on 23 April 2019 had been dissolved by the Minister of Human Settlements, Water and Sanitation on 29 July 2019 because Cabinet concurrence had not been obtained. An interim board and administrators were appointed as an intervention.

The process followed:

  • First priority was to appoint a board in terms of section 9 of the HDA Act. The appointment of other individuals from other departments was critical because of their contribution.
  • The advert was published in the City Press, Sunday Times and the Government Gazette with a closing date of 19 September 2021.

Members of the new board:

  • Members would serve on the board of the HDA in concurrence with Cabinet for a period of not more than three years, effective from 26 November 2021 to 25 November 2024.
  • Dr Tshilidzi Ratshitanga had been appointed chairperson of the Board, and Ms Marina Dumakude had been appointed deputy chairperson.

The Executive Authority had directed the new Board to prioritise the filling of vacant and funded posts and the filling of the CEO and the CFO posts were underway.

Improving performance was to be achieved by:

  • Rebuilding the HDA brand through Ministerial visits and board roadshows in the provinces.
  • Attending to the Auditor-General's (AG's) recommendations and any other investigation reports.
  • Repositioning the HDA as the developer of choice.
  • Looking at a funding model and framework for public private partnerships.

PPRA background

  • The Minister of Human Settlements, Water and Sanitation had appointed the transitional board effective from 6 July 2019 until the PPRA came into effect.
  • The CEO had been appointed from 1 February 2019 in terms of a five-year employment contract.
  • Challenges had been experienced with the filling of the CFO post since the resignation of Mr S Mmotong on 18 July 2017.

Process followed:

  • The Minister had approved the initiation of the appointment process of the new board on 20 August 2021, and the nomination committee was appointed on 16 September 2021.
  • The Department had published an advert in the City Press, Sunday Times and the Government Gazette, with a closing date of 19 September 2021.

Members of the new Board:

  • Members would serve on the board of the PPRA in concurrence with Cabinet for a period of not more than three years, effective from 26 November 2021 to 25 November 2024.
  • Mr Steven Ngubeni had been appointed chairperson of the board.

The Executive Authority had directed the new Board to prioritise the filling of vacant and funded posts.

Improving performance was to be achieved by:

  • Attending to the AG's recommendations and any other investigation reports.
  • Improving stakeholder engagement.
  • Focusing on transformation and support for the sector

PPRA Chairperson’s input

Mr Ngubeni said the Board of the PPRA was appointed in November 2021, upon which it was expected to immediately deal with transitioning from the Estate Agency Affairs Board (EAAB) to the PPRA. There were changes in terms of the mandate, its extent and issues of change management. The board was also expected to deal with corporate plans, including the renewal of the strategic plan, the APP for the last two months of the existence of the EAAB, as well as new the APPs, which they had done successfully. Due to the amount of time at its disposal, the PPRA had allocated further time to deal in detail with the corporate plans and had held its strategic planning session. The entity had identified areas that required its attention in terms of the new mandate and believed that it was making progress.

Challenges that the EAAB had faced in the past included the findings from the AG, litigation issues that existed in the industry, the question of a public trust deficit, reputational damage on the EAAB brand, as well as the perceived inefficiencies in the organisation insofar as turnaround times were concerned. The PPRA had put in place a turnaround strategy which was a work in progress and included meeting with the stakeholders and understanding their issues, where they came from, what caused the conflict between them and the PPRA, and identifying common ground. They had met with REBOSA and discussed the many litigation issues that they had against the Board. There was a possibility of settling the matters out of court and opportunity for proper engagement as partners in the property sector and the Board was amenable to working with the PPRA Act in that spirit.

According to the views of REBOSA and the PPRA, the issues that had led to litigation were not issues of real conflict, so they were being dealt with decisively. The entity continued to meet with stakeholders in the industry to make sure that there was a working relationship with the PPRA. The turnaround strategy was also related to reputational damage. Many of the media reports did not contain real and tangible issues that the entity was dealing with, and some actions taken were not assisting the process. The reports were a smearing of the organisation, sometimes even originating from inside the organisation or from disgruntled stakeholders. The entity had realised the extent of this impact when dealing with the insurance cover for the board members, for example, with insurers rejecting covering members due to the reputation of the entity. Therefore the PPRA had put in place a turnaround strategy to improve perceptions of the organisation.

The specific matter that had been referred to the Minister by the Public Service Commission was a complaint against the CEO, and that matter was being attended to with all the due processes. The board had received an explanation from the CEO on the matter, considered the CEO’s responses and taken decisive measures to address the matter. The board was not at liberty to disclose what decisions had been taken but assured that the matter was receiving their utmost attention within the confines of the law. The board urged patience and cooperation in the process.

Part of the scope of the extension of the entity’s mandate was a focus on the transformation of the property sector in general. To that extent, the legislation empowered it to establish a Property Sector Transformation Fund and a property transformation programme, as outlined in the presentation. The PPRA was engaging with stakeholders and getting positive feedback and willingness to cooperate with the entity on its transformation agenda.

As part of the new mandate extension, the PPRA was to establish a property research centre that would focus on research issues around the property sector. The entity intended to focus on topical issues that would help fast-track transformation in the sector by exploring opportunities for expansion towards the township economy, to allow previously disadvantaged individuals (PDIs) access to participate meaningfully in the economy. The PPRA’s statistics on estate agents were poor in terms of race, geographic and gender representation. These were the issues they believed their research efforts should focus on.

HDA Chairperson’s input

Dr Ratshitanga said the HDA was a strategic implementing agency within the Department of Human Settlements. It was charged with the major responsibility of identifying, acquiring, assembling and packaging land parcels for the development of integrated and sustainable human settlements in South Africa. It was an agency that supported government in its endeavour to transform the spatial settlements in South Africa and deal with the distortions that had been inherited from the past.

The new board had been appointed in the middle of November 2021 and had found an ailing organisation mired in a number of challenges. Some of those challenges had arisen as a result of non-compliance with governance protocols. Because of the instability that had been taking place over the years as a result of the lack of a stable board, the organisation had been run by a few administrators and interim boards. This had created a culture of trust deficit within the organisation, hence the numerous media reports where some disgruntled staff had opted to air their grievances.

On the issue of consecutive qualified audits from the audit of previous years, the board had dealt with the high turnover of senior executives in the organisation. This had contributed to the instability that the new board had to address. They had received clear orders from the Minister when they were appointed, which emphasised and complemented the mandate of the board and the HDA Act. Among others, they had to deal with the stabilisation of governance within the organisation and swiftly establish board committees so that the organisation could be managed through proper governance oversight. The board had established an audit and risk committee, a social and ethics committee, a remunerations and corporate support committee, as well as the land development management and investment fund committees. The committees were instrumental in stabilising the organisation through their various functions. The two senior executive positions of CEO and CFO had been filled on the board’s recommendation and as required, the Minister had been tasked with finalising the appointments.

On the qualified audit findings, the board had been giving oversight on the implementation of the audit findings action plan. So far, 17 of the 28 audit findings had been dealt with. The HDA was closely observing the implementation of all the findings to aim for an unqualified audit in the coming audit. Some of the audit findings had led to both internal and external investigations. They were being dealt with by the Special Investigating Unit (SIU) and were in the courts. The courts would be hearing some of these flagged matters in the coming months. In due time, the outcomes of these matters would be shared with the Committee.

There were also internal investigations that had been undertaken as a result of wrongdoing or lack of proper procedure and protocols in the procurement area. These were being taken seriously and being dealt with. Some of the staff members that had been implicated had had to leave to organisation because of the investigations and disciplinary processes that had taken place. There were also grievances that the HDA had dealt with, occasionally from within the organisation, and the entity was in discussions with the union and processing all these grievances. This was in an endeavour to enable belief in the internal procedures and protocols of the entity, and end the culture of running to the public domain to express grievances.

When the new board was appointed, the Minister was worried about low-performance levels, and the Board had instituted a performance turnaround strategy and plan. A performance turnaround operation centre was established to look at projects that were having performance-related challenges. The Minister had indicated that as a result of the organisation’s instability, it had suffered a serious blow to its reputation and image. The board had been directed by the Minister to rectify this. The board had undertaken roadshows in the provinces to meet with their various stakeholders and clients. This was also for the board to gain first-hand experience of the projects that were taking place on the ground, and the process of continuous interaction was ongoing.

The process of reviewing the structure of the organisation was already underway, and the organisation was being recalibrated to become fit for purpose by having the appropriate skills and competencies in place and appropriate human capital to support its work. This part of the process would be critical in the change management process which should result in turning around the organisation's culture and improving trust in it.

Targets had been put in place to ensure that in the procurement and implementation of the HDA’s work, there was a focus on the empowerment of vulnerable groups as part of transformation. There was also work to ensure enterprise development and boost the involvement of PDIs utilising the HDA's work. Transformation in the industry also required looking into innovations that could be used for the implementation of human settlement development. The entity was keen on investigating alternative building technologies that could result in savings in the fiscus. This would also bring about a different quality of products produced as an entity.

The HDA’s reliance on work sourced from provinces and metros, allowing the entity to generate a fee, was unsustainable. The entity was aggressively implementing a transition towards the primary mandate of their developer status as a developer of choice. It was in conversation with the Minister, who had been very supportive of alternative ways of capitalising the HDA to become a financially self-sustainable entity that could fulfil its mandate of integrated and sustainable human settlements. Fortunately, the entity had been made the custodian of ownership or possession of land that belonged to the state. It was continuously being given land that was owned by the Department of Public Works and Infrastructure (DPWI) and other state organs, which it could package for human settlement purposes. This allowed it to target land parcels that were located in environments that were still affected by spatial distortions and contribute to the transformation of spatial settlements in the country by bringing about inclusive living.

The HDA had recognised the need to collaborate with sister agencies and had begun a process of engaging with all of them to benefit from leveraging from their different vantage points. It had been meeting with agencies such as the Social Housing Regulatory Authority (SHRA) and would be engaging with other sister agencies such as the National Housing Finance Corporation (NHFC), the National Home Builders Registration Council (NHBRC) and the PPRA. The HDA would soon be creating a forum for all of these agencies so that they could continuously strategise together on how they could impact positively in human settlements.

PPRA presentation

Ms Mamodupi Mohlala, PPRA Chief Executive Officer, described the process leading to the establishment of the PPRA as a replacement of the EAAB.

Purpose of transformation

  • To ensure economic inclusion of PDIs in the property sector.
  • To engage with the DPWI to ensure PDI participation in the property business.
  • To promote consumer education and awareness and protection by engaging other stakeholders in the property value chain, like finance providers.

Legislative mandate of the PPRA

  • To regulate, educate and transform the activities of property practitioners in the public interest.
  • Issue fidelity fund certificates to qualifying applicants.
  • Investigate complaints against property practitioners and institute disciplinary proceedings against offending property practitioners where required.
  • Manage and control the Property Practitioners Fidelity Fund.

Key transformation programmes

  • Internship/learnership : The “One Learner, One Property Practitioner” youth brigade programme was a process where a learner was placed under the control of a suitably qualified property practitioner to complete his/her National Qualifications Framework (NQF) Level 4 qualification.
  • Amnesty Programme: The PDI resolution exempted black people who could prove that they were previously disadvantaged, from all regulatory fee requirements, including for Fidelity Fund Certificates (FFCs), financial audits and mandatory fees for education and training.
  • Consumer awareness campaigns.
  • Incubation for small, medium and micro enterprises (SMMEs), aimed to expose SMMEs to mainstream markets of the property sector and emphasised the willingness of government to promote small businesses.

Amnesty campaign (PDI resolution)

  • The PPRA board had passed a resolution to assist PDIs (see above).
  • Currently, the PPRA had exempted 308 property practitioners/ property practitioner principals/ property candidates, with Gauteng having a total of 197, the Western Cape 33 and the Eastern Cape nine.

Consumer awareness campaigns

  • Radio interviews, social media, television, public workshops, anti-racism campaigns.
  • Future plans include print media, billboard outdoor advertising and the promotion of the transformation programmes available.

Incubation for SMMEs

  • Approved by the board and advertised, inviting participants to apply.
  • The incubation programme would provide budding entrepreneurs with physical space, infrastructure and shared services, access to specialised knowledge, market linkages, training in the use of new technologies and access to finance; and permit experienced property practitioners with three or more years of experience to help them to develop their own business.
  • This transformation initiative would identify 25 SMMEs in the black-owned property practitioner sector per annum.

Incubation for principalisation

  • This involved aggressive recruitment of all suitable qualifying previously disadvantaged persons and businesses and assisting them to qualify as property practitioner principals within the property sector.

Transformation Fund

  • The Act creates a Property Sector Transformation Fund under section 21.
  • The Authority must utilise the Property Sector Transformation Fund in such a manner as may be prescribed, which may include the following transformation and empowerment programmes:


  1. Principalisation programme, to promote black-owned firms and principals.
  2. Regularisation programme, to promote and encourage participation of the historically disadvantaged due to non-compliance.
  3. Consumer awareness programme, to promote awareness of property transactions and business undertaking.
  4. Work readiness programme, to promote and enhance participation of the historically disadvantaged in the property sector.


  • Funding from other institutions.
  • Property Sector Transformation Fund.
  • 3% funding from the Fidelity Fund.
  • PPRA to be able to fund the projects.


The Chairperson requested that Members limit their questions to a maximum of five for both entities, with a three-minute time limit. If there was more time later, Members would be given another opportunity to ask questions.

Ms E Powell (DA) said that limiting members to three minutes to engage with two entities on two subjects was outrageous. She understood that the Z list said the meeting would run until 12:30, but if Members were not able to effectively and robustly engage in terms of their constitutional obligations, she requested that the Committee reconvene a continuation of the meeting to fully ventilate their issues.

The Chairperson said Members must ask questions so that they got responses. If there was a need to reconvene, they would, but at that moment she stood firm in her limits.

Ms Powell welcomed Mr Ngubeni and believed that his board would do good work at the PPRA. She acknowledged the long road ahead of them in tackling some of the very severe challenges. On 10 December 2021, the Minister had instructed him to investigate a number of serious allegations levelled at the PPRA and had given him ten days to report back to her office. This was notwithstanding the pension fund adjudicator's ruling, which had made some damning findings against the PPRA in respect of pension deductions not being actioned. A number of these allegations had concerned the CEO. There was also a previous investigation that the former Minister, Lindiwe Sisulu, had instructed the board to conduct which the Committee had not received any feedback on. Would the CEO be placed on a precautionary suspension pending the outcome of that investigation? If he was unable to answer the question at the moment in terms of due process, could he provide a timeline when he would be able to communicate with the Committee on what steps would be taken so that the entity could conduct the investigation openly without active intimidation?

She asked Ms Mohlala if the PDI resolution presented was justified by an interpretation of section 27(b) of the old Act, as this section no longer existed given the implementation of the replacement Act. Why had the PPRA not rather implemented regulation 41.14, which required no application or consideration whatsoever? For those suffering financial hardship, regulation 41.14 offered a simple and better solution, exempting those that were suffering financial hardship or, in the interests of justice, from the obligation of having to pay prescribed fees.

Regarding the PPRA not issuing certificates between 1 April and 1 February, individuals had been told that the entity was in a transitional period, but the Property Practitioners Act (PPA) had come into effect from 1 February 2022, and no transitional provisions were contained in the regulations in terms of this phasing-in approach that applicants had been informed was in progress. All of the provisions in the regulations were based on the expectation that the PPA would be immediately effective on its date of commencement. Surely this was unlawful? Could Ms Mohlala tell the Committee why the PPRA was not ready to implement the Act and the regulations, despite ample warning on 1 February? What specific legislative clause could be pointed to, either in the Act or in the concomitant regulations, which allowed for this phasing-in approach that was being used to deny individuals FFCs?

Ms S Mokgotho (EFF) asked the HDA what the primary reasons were for the inadequate system for identifying and recording irregular, fruitless and wasteful expenditure, and how it was addressing this ongoing challenge. What were the reasons for the anti-fraud and corruption plan and the risk implementation plan not being implemented? Could detail be provided about the non-compliance with the recruitment and selection policy, irregular appointments, non-adherence to pay scales, and the unreconciled payroll against budget, as raised by the audit and risk committee (ARC)? The ARC had raised a number of concerns, including excessive powers of delegation bestowed on the CEO. Could the entity expand on this matter? Why was the implementation support provided in Gauteng to catalytic projects not reported? How was the issue of poor-performing contractors being addressed?

To the PPRA, she asked how many of the PDIs it had enabled to participate in the real estate/property sector.

Mr A Tseki (ANC) thanked the Minister, chairpersons and all members who were in support of making sure that the HDA improved in terms of stabilisation. The HDA was at some point under administration, if not still. The Minister and her team were trying their best to bring the HDA to normality. For the purposes of correcting the minutes, he said that at no stage had the Department come to the Committee and said the HDA and PPRA were facing challenges of stabilisation. There had been issues raised, like those mentioned by Ms Powell, particularly from the media, but those had never resulted in a crisis. Therefore, the Committee could not be assumed as having taken a stance that there was a crisis at the PPRA. Those issues raised by Ms Powell were normal to be raised from time to time, and for the Minister or the Department and the PPRA to respond to them.

He said it was for the Minister to take a view on the justification for or against the suspension of the PPRA’s CEO, but the Committee should note that the DA and many other parties that were against transformation would always find fault, and requested Ms Mohlala to take note of this. The DA had an agenda against the ANC which should not be agreed with.

Ms Powell interjected with a point of order. She said that Mr Tseki was casting aspersions on the DA saying that it was anti-transformation. She requested that he refrain from casting aspersions, and stated for the record that the DA was pro-transformation. Mr Tseki’s casting of aspersions was unacceptable, and she requested that the Committee focus on the business at hand.

Mr Tseki said that the PPRA was on a drive for transformation, and should not fall into the trap of anyone trying to block that transformation. The property sector was a very lucrative sector for investment. As government, they should propel the PPRA to lead that transformation. At this stage, no stabilisation of the PPRA was required. The Minister would report to them at the next meeting.

Ms N Sihlwayi (ANC) said that the Committee should appreciate the road well-travelled by the Minister within a short space of time. It was the Committee that had called for a revamp of HDA and also the EAAB, given the issues that had been experienced that were preventing service delivery. She noted that the presenter had talked about having two representatives who were appointed by the Departments of Agriculture and Public Works. What did this mean? Had they been relieved of their previous positions and become members of the board? She highlighted that change management within the organisation was important, as this was what the Committee had wanted them to do. The establishment of governance structures and committees by the HDA board was key, and they would lead the entity well. She highlighted that importance of daily oversight of the entities by the Department as an extension of its responsibilities to achieve its own objectives.

On the consequence management issue raised by Ms Powell, she said Ms Powell was preaching to the converted. The Minister was an ANC Member who understood that when wrong things happened, somebody had to account. The State Capture inquiry came about because of the moral obligation of the ANC, with no one else having done so. The past government had never been transparent about the atrocities it had committed. The Department could not be taught that there should be consequence management. Investigations would clearly end up with consequence management for those who had engaged in wrongdoing. However, it was important that the Committee had given an order to the Department to avoid raising matters outside of the Committee meetings and creating media issues, as that was not how things were to be done. The Committee’s responsibility was to deliver and focus on the mandate. Those expressing issues with the Department outside of the meetings were not honourable. She appreciated the focus of the PPRA on building relations and emphasised the importance of achieving the objectives of the Committee. She further appreciated the Minister’s undertaking to return to the Committee when the investigations were ready to be reported on.

Ms Powell raised a point of order and asked if all Members were subject to the three-minute rule.

The Chairperson said Ms Sihlwayi had a few seconds left to finalise her points.

Ms Sihlwayi said the Minister must proceed and return to the Committee when she believed that she had done her work as an ANC Member who had responsibilities and moral obligations to the Department.

The Chairperson welcomed the presentations from the entities and acknowledged the work done and their efforts in a short space of time. Referring to the first presentation, she noted the HDA’s advertising had been in City Press, the Sunday Times and Government Gazette. Was there any reason for choosing those two mainstream media? Why were other emerging media not being utilised for adverts? When the PPA was passed, there was supposed to be a budget attached to it, but the presentation had not indicated this. Could the Committee get clarity in terms of where they were going to get money for funding the PPRA’s transformation because it was important for the state to fund that process?

She had noted the "skewedness" of the transformation work between the provinces, stressing that all provinces needed to be given the opportunity to participate in the transformation agenda. What was the PPRA going to do to ensure that they turned around the situation? Although they had not gone into detail about the audit findings with the HDA chairperson, the Committee appreciated that the board was already focussing on addressing the issues raised by the AG, having indicated that 17 out of 28 findings had been dealt with. How far was the Department on consequence management? On the issue of the temporary accommodation which had resulted in an SIU investigation, was it engaging the SIU to finalise the process as soon as possible? There had been a report from the National Home Builders Registration Council (NHBRC) that had been commissioned by the Department which outlined how compliance had been ignored. How then had it handled these issues?

Department’s response

Ms Pam Tshwete, Deputy Minister of Human Settlements, responded to the comments made by Mr Tseki and Ms Sihlwayi and said that the two entities had come a long way over the last few months. The priority was to bring stability and improve the efficiency in both entities. The Department had focused on appointing boards to deal with challenges of governance and filling vacant executive positions to direct the organisational strategy. She commended the turnaround strategy done by the Minister. She agreed with Mr Tseki regarding transformation. Transformation was previously not occurring, but now that the Department was trying its best to ensure transformation, it was not being recognised and appreciated but instead being criticised. She said the Committee was not necessarily a platform to criticise, but was a platform to advise, as the intention was to improve the Department. She took note of Ms Sihlwayi’s point to always monitor the Department as the executive.

Ms Ngxongo, in response to Ms Sihlwayi, said the representatives present from the other departments had been covered in the enabling legislation, based on the nature of their portfolio. Regarding land that may be acquired for human settlements development in line with section 6.1 of the HDA Act, the legislation referred to land that might be vested in any organ of state. This meant that any land that was in the hands of a national department involved in land would become critical in the delivery of human settlements. The legislation enabled the HDA to begin conversations with the relevant departments, and the representatives from those departments would be able to assist and fast-track the DHS’s mandate. However, the representatives remained officials of their respective departments, but attended board meetings and offered support to the DHS.

The Department had positively received the comment by Ms Sihlwayi on the Department’s daily oversight of the entities and agreed that it needed to strengthen its oversight to deal with any emerging problems.

On the Chairperson's question about the selection of media channels, the enabling legislation required the Department to advertise in any two national newspapers. The City Press and Sunday Times were being used in terms of their reach and their target market, which was relevant to the Department’s target market for the boards they wished to appoint.

Regarding the budget of the PPRA, the EAAB had not been receiving a budget from the fiscus, as they had been self-sufficient. Section 32 of Chapter 6 of the PPA, section 32, covered the funding of the authority, and the Department had deliberately included this section, which included the funding of the authority that should come to be appropriated by Parliament. It had been included on the basis that the PPA now had a huge mandate to deal with in cases where the funding was not sufficient. The new entity had to be assisted by the appropriation from Parliament. There was a reason why initially there had been no budget apportioned or approved for the PPA from the EAAB.

Mr Ngubeni thanked Members for engaging with their presentation. He was unable to respond to the question of whether the CEO would be placed on precautionary suspension. He requested the Committee give the board of the PPRA some latitude and space to do their work in a manner that was not biased or prejudicial but in a manner that was open and transparent. The board undertook to be transparent in their processes and to inform the Committee of decisions made in due course. In line with its fiduciary duties, it assured that it was judicious in making decisions, being cognisant of the fact that it was dealing with a very sensitive issue. The board was not responsive to impatience and would work with the facts before it. The Minister had written to the board on the issue of the CEO on 10 December 2021, and it had responded with the timelines and processes on how it was going to attend to the issue, which she had acknowledged and approved. The board had already written to the CEO and afforded her a fair and just opportunity to respond to the allegations raised against her. She had cooperated and responded. The board was still processing its decision, and the due process was still undergoing. The Committee was assured that the board's decisions were rational and it would be able to account for those decisions.

At the moment, the PPRA was focused on the various state agencies as part of the property sector. However, the new legislation encouraged the entity to widen its scope to not only focus on estate agents but conveyancers, developers and others involved in the selling or letting of properties. This widened scope would result in a slight change to its numbers. The PPRA's transformation agenda specifically targeted the participation of women, persons living with disabilities and the youth, and also targeted the spatial nature of their work. It also wanted to look into the new market emerging in the country, which included the township economy, while attending to issues facing vulnerable people. Therefore, the entity anticipated that their statistics would spread geographically with the new markets, and would not be concentrated in Gauteng and the Western Cape. The entity was dealing only with real estate agents who were demand-driven at that moment, noting that there were no real estate agents in areas where properties were not being sold or bought. Johannesburg, Cape Town and Durban dominated the property sector insofar as buying and selling were concerned. By implication, the real estate agents would be located and concentrated in those areas, and that was what accounted for the skewed numbers seen in the targets and statistics presented.

Dr Ratshitanga, responding to Ms Mokgotho’s question on the primary reasons for irregular and wasteful expenditure and anti-fraud and corruption plans not being implemented, said it was due to the absence of oversight. A gap in oversight would result in non-compliance because the reason boards existed was to ensure proper compliance with rules and regulations and policies and procedures. During the instability of the HDA, there were no proper governance protocols in place and with constant interim leadership structures, a culture of non-compliance crept in. The board had moved swiftly to deal with these issues by ensuring the reports of the various committees were within the realm of the regulations. The Public Finance Management Act (PFMA) was clear in directing how things were to be done, as well as Treasury regulations and instruction notes. There was hardly any ambiguity in the rules in respect of procurement and anti-fraud. It was the board’s responsibility to exercise its oversight role. The board was ensuring that there was implementation of corrective measures and remedial measures on audit findings in relation to the non-compliance with appointments of executives. Law firms had been appointed to scrutinise the matter, and the board would return with a comprehensive report on the outcome of the investigations. The executives responsible for non-compliance were processed through disciplinary hearings and were allowed to defend themselves through the proper channels, therefore no outcome had been determined yet.

Regarding the sentiment around the excessive powers of the former CEO, the entity was in the process of reviewing the organisational structure and assessing whether the powers were indeed excessive. The organisational structure review process was a very professional process that was being undertaken with professionals assisting the entity to ensure that it met its mandate. On whether there was consequence management with regard to the findings, the entity was undertaking investigations and following up on the prescripts of the findings. The Committee would receive a report in the coming months demonstrating that consequence management had taken place.

Ms Mohlala responded to the assertions made by Ms Powell and said that the PPRA was stable. It had never been put under administration, it had an unqualified audit that indicated that it had good governance systems in place, and this had been confirmed by the AG. On the ushering in of the PPRA and the PPA, systems and guidelines had been put in place and on the PPRA website and guidelines for the licensing, transformation, education and training across the business of the PPRA were available to show that it was ready. It had invited the industry not only to comment in writing but to have individual meetings. The entity was ready for the PPRA and was implementing the PPA.

On the issues raised about the media, she requested that Ms Powell and other Members go back and read those articles carefully. Those articles related to letters that had been sent by the Minister to the chairpersons of the boards. Some articles were in relation to matters that she had never seen or come into possession of. Therefore some of the communications were being intercepted and ended up in media, and there was clear interference. She ruled out interference by the office of the CEO or the institution itself.

On the matter of transformation, each time she appeared before Parliament, she believed that Ms Powell would raise many concerns around the PPRA, and it was crystal clear that the reason for this was simply because the entity had a very strong transformation agenda. For the first time in the history of the institution, there was a CEO who was pushing and ensuring the realisation of transformation. That afternoon, the entity would be undertaking racism hearings, and from its investigations around racism within the property sector, it had found that a lot of racist practices were actually being undertaken in the Western Cape. From that kind of reporting and the fact that it was undertaking racism workshops, she, as the CEO, would never be a favourite person of Ms Powell.

Ms Powell had also raised an issue around precautionary suspension.

The Chairperson called Ms Mohlala to order and said that Ms Powell was raising the issue of suspension in relation to the chairperson of the entity, and not to her as CEO of the entity.

Ms Powell raised a point of order. She said the comments made by Ms Mohlala in relation to the Western Cape and directed to her specifically were unacceptable. She requested that Ms Mohlala be called to order and that she be asked to answer the questions that had been put to her in terms of the specifics around not issuing certificates, the implementation of the PDI resolution and the PPRA. There was no space for personal aspersions to be cast, especially by officials who were bound by higher principles.

Ms Mohlala said she was responding to the issues that Ms Powell had actually put on the table. The issues around the Western Cape were factual -- they were not theoretic or aspersions, as she was alleging. She believed that there was a serious conflict of interest in relation to Ms Powell. Ms Powell had not made it clear to the Committee that she was engaged in litigation with Ms Mohlala, because she had put a tweet on her Twitter account sometime in 2021 where she had made allegations that Ms Mohlala’s husband had brought a gun to the offices of the EAAB. Ms Mohlala had asked her to retract the tweet and she had refused. Ms Mohlala then took the matter to court because at the time her husband was not in possession of a gun, and at the time he was her estranged husband.

Several Members raised a point of order.

The Chairperson said that what the CEO was raising was very sensitive, and if it was not part of this meeting, she should indicate the issue in writing to the Committee because the Committee was shocked and surprised at what the CEO was saying.

Ms Mohlala said she would be writing formally, because she would have expected Ms Powell, in line with the protocol of Parliament, to have recused herself as she was conflicted.

The Chairperson stressed that Ms Powell was a Member of the Committee, that the Committee was guided by the rules of Parliament and that Ms Powell had not been found guilty of anything, for now, so she would participate.

Ms Powell interrupted and said that the High Court had dismissed the matter with costs.

Ms Mohlala said that this was not true and that the matter was still current. She repeated she would be writing to the Committee.

Ms Powell said an aspersion had been cast -- that she had a conflict of interest in conducting her duty as a Member of Parliament sitting in the Committee. She wanted it to be placed on record that she did not have a conflict of interest. If Ms Mohlala believed that there was a conflict of interest, she should recuse herself. She asked that Ms Mohlala’s point that she was conflicted be withdrawn and that the matter be dealt with in writing before the Chair of Chairs because she would not have matters that had nothing to do with the business of Parliament being ventilated on Portfolio Committee platforms. She would be happy to have an open discussion on what was really going on. However, Ms Mohlala’s comments were out of order and she asked that the matter be dealt with in writing and resolved in writing, as she would not be told before Parliament that she had a conflict of interest in conducting her oversight duties.

The Chairperson said she had indicated that this Committee was guided by the rules of Parliament. In terms of the rules and the Constitution, Ms Powell had not been found guilty of anything, therefore had the right to participate. The matter was cleared.

Ms Powell said she just wanted it to be noted in writing.

The Chairperson said that she had responded to that request.

Ms Daphney Ngoasheng, Acting CEO of the HDA, responded to the question of the anti-fraud and corruption plan not being implemented and said it was being implemented. The report had been prepared and would be served at the ordinary ARC. All the processes that were intended to be put in place, including the risk management and fraud policies and plan, had been approved in June 2021. The HDA was trying to strengthen the section dealing with whistle-blowing in the anti-fraud and corruption plan, which would be taken to the social and ethics committee on 4 April. Training and anti-fraud awareness had been completed and anti-corruption posters and awareness campaigns in a newsletter were available to staff. A few of the staff’s financial interest disclosures were still outstanding, and the head of corporate services was following up on this. There were disciplinary processes that the entity was following.

Forensic investigations into the Talana hostel and Duncan Village issues were being conducted by the SIU. The Talana matter had been heard in court on 22 March and had been postponed to 19 April. The three staff members that were appearing in court would continue to appear. About seven staff members of the HDA had also been subpoenaed to give evidence in the Talana matter. The HDA would be able to report after 19 April as to how the case had been finalised by the SIU. On Duncan Village, the HDA had received a preliminary report, and the SIU had promised that they would give the HDA a final report by the end of March. On the Mamelodi transitional residential units (TRUs), the HDA had done an investigation internally and the board was dealing with the report on that.

Once the CEO had been appointed, the board would review the delegations of authority document.

On the issue of poor performance by contractors, as raised by Ms Mokgotho, the HDA had put the contractors on terms and had cancelled some of the contracts of contractors that were not performing. Unsurprisingly, these contractors would not be happy,\ and would take the HDA to court, which the entity would deal with.

On consequence management, as far as the audit outcomes and the irregular expenditure were concerned, the entity had a committee that was dealing with the matter.

Follow up questions

Ms Mokgotho asked why the implementation support that was provided in Gauteng catalytic projects had not been reported. How was the instruction from National Treasury to return R195.8 million for non-compliance with the Division of Revenue Act (DoRA) likely to impact the operations of the entity? What was the essence of the non-compliance as raised by National Treasury? Why did accruals increase dramatically from R90 000 to R78.8 million? Why was no appropriate action taken by the board against employees implicated in the allegations of corruption in the awarding of a tender for TRUs in Limpopo? How many employees were involved, and at which level were they implicated? When did this alleged corruption take place? How far were the court processes in respect to the issue?

Ms Powell addressed the CEO of the PPRA. She said REBOSA had brought an application that had been granted with punitive costs last year and had launched a second application in respect of contempt of court. REBOSA had stated that this was still progressing, as the PPRA had not filed the required court papers nor responded to settlement talks. Could the CEO advise what outcome was being pursued? She understood that there were a number of contracts that had been awarded for a value of under R500 000 and that some of these had actually been flagged by the banks. Were transactions below R500 000 procured with or without obtaining other price quotations, as required by Treasury regulations?

She expressed concern on the HDA admitting that all the irregularities were a result of a culture of non-compliance and a leadership lacuna created by the ex-Minister and the ex-board, as well as a lack of oversight. The Committee had been warning about this for three years. She welcomed the new board chairperson and new board and welcomed the decisive action that the Minister had taken in regard to the HDA. Their calls as the DA in the Committee had fallen on deaf ears. She had written to Mr Neville Chainee, the DDG for Research, Policy, Strategy and Planning in the Department, who was acting as the administrator in March 2021, in reference to section 65.1 of the PFMA, which stated that the executive authority responsible for any department or entity had to table in the National Assembly the findings of any disciplinary board and any sanctions imposed by a board which heard such a case. This meant that the Minister was required by law to inform Parliament of the findings of any disciplinary board of any entity which heard a case in relation to financial misconduct against any accounting authority in terms of section 81 or 83 of the PFMA. When she wrote to Mr Chainee, he had written back in March 2021 stating that they did not have anything for her, and no action had been taken. Could it be indicated when Parliament would receive such a report in terms of section 65.1 of the PFMA?

The irregular expenditure within the HDA was in excess of R147 million, leading again to a qualified audit. Despite the recommendations of the Committee, it seemed that until Minister Kubayi had replaced Minister Sisulu, no action had been taken. This had to serve as a warning to the Committee that when recommendations were made, even by opposition Members such as the DA, they had to be binding recommendations before Parliament that called for decisive action or action taken in terms of the new Audit Act. Additionally, the Committee and Department should work in a collaborative manner as opposed to shielding and protecting officials, as they had done with the HDA until Minister Kubayi had come in and right-sized the board. She had more questions that she would put in writing, and requested written responses from the officials.

Mr Tseki said that Ms Powell seemed to have internal information about the Department. He requested that since these letters seemed to be for public consumption, they be acquired along with the response from the CEO, and be sent officially to the Chairperson. The Chairperson would decide how to distribute them to the Committee because it seemed other Members were talking from a blind spot, while Ms Powell was talking from a hotspot. He requested that the Committee be briefed exactly on what was being investigated in the PPRA. He asked for further information and the context of Ms Powell’s comments so that when he responded, he would respond with an informed engagement. 

The Chairperson said that the chairperson of the PPRA had indicated that the Act was giving them the mandate to expand on the value chain. One of the problems that had been in the property sector had been the valuation processes. She requested the chairperson and the entity to look into the issue of the valuation processes in the property sector and transformation in the valuation of properties, as she was concerned people were losing money because of this issue. Could the Committee be educated on the process of the valuation of properties?

On the HDA, the Committee noted that the entity was not being funded, and this affected the audit outcome, particularly on contract management, where the provinces took on projects which compromised the audit outcomes in terms of project management. She welcomed the focus on the recapitalisation of the HDA. Could the entity brief the Committee on what would be entailed in its recapitalisation?

On the issue of transformation of spatial planning, provinces continued to build reconstruction and development programme (RDP) houses on the outskirts of certain areas, and the Committee welcomed the efforts that the HDA was undertaking. The Committee wanted to know whether the entity was engaging provinces. She requested the HDA to return to report on what it was doing to ensure that there was indeed a transformation of spatial planning in the provinces and that it did not perpetuate apartheid spatial planning.

Department’s response

Mr Mbulelo Tshangana, Director-General, DHS, echoed the point made by the chairperson of the HDA about the financing model. The HDA had been very much involved in the implementation of its second mandate, where they were acting as an implementing agent for provinces and in some cases, for municipalities. In the long run, the Department wanted the HDA to focus on its primary mandate, which was land assembly for human settlements developments. Part of the problem was that the entity was never capitalised, but there were always two ways of capitalising the entity -- either by capitalisation through the fiscus or by using state assets. In the long run, the Department intended to make sure that the HDA did not rely on the fiscus to run its operations.

There were hazards in the execution of the secondary mandate of recapitalisation, because the HDA did not have full control of that budget. The Department wanted the entity to manage its own budget and get into partnerships with various property developers and property funders so that the secondary mandate remained a secondary mandate, but at that moment, the secondary mandate was being operationalised as if it was a primary mandate.

Concerning the PPRA, the Department had met with the technical team and had asked them to operationalise the cost of implementing the expanded mandate. The implementation of that expanded mandate was going to require funding because it was not budgeted for at that stage. The Department had asked the PPRA to prepare a submission so it could arrange a meeting with Treasury to assist it with its unfunded mandates. The financing of the primary mandate of the HDA and the financing of the expanded mandate of the PPRA had been discussed in the CEO’s forum and was to be prioritised with Treasury. To capitalise the HDA in the budget for the next financial year, the process of submitting to Treasury would have to begin soon. There was some creativity required on the Department’s side, because some of the land parcels that it was going to be receiving from the DPWI could be used to strengthen the balance sheet of the HDA, depending on how the DHS packaged their development concepts or development proposal. The CEO and chairperson of the PPRA were urged to start costing the implementation of the expanded mandate so that the Department could apply its mind before it approached Treasury.

Dr Ratshitanga said that informing the success of the transition towards the primary mandate of financial self-sustainability, in the long run, was the creation of the necessary capacity within the organisation that would implement this developer mandate. Part of the process of the review of the organisation's structure was to bring in the right capacity and skills, including professionals who could engage with the private sector financial institutions, and put together packages for these partnerships. Some of the institutions flagged as having a common interest and partnership potential were the Development Bank of Southern Africa (DBSA), the Public Investment Corporation (PIC) and the National Housing Corporation (NHC). There were also many pension funds with the appetite to invest in human settlement projects. These were regarded as strategic transactions that were governed by concurrence with the executive authority. The board was in the process of packaging the business plan for the developer mandate and would soon be engaging with the Minister for support as required by law.

He agreed with the Chairperson that the new board had experienced a rush of bringing projects to the HDA towards the end of the financial year in the fourth quarter, in what Treasury had sometimes alluded to as "fiscal dumping" by the provinces. The entity realised that this was a result of a lack of proper planning, as the projects would have been in discussions between the HDA and the provinces, but not finalised in terms of the implementation protocols and funding agreements that had to be in place for the HDA to assist provinces. The entity had to be strict in ensuring that planning was spread out across the financial year to avoid the likelihood of fiscal dumping, which would be regarded as an audit finding. The entity had the support of the Minister, and during Ministers and Members of Executive Council (MinMEC) meetings, the issue was brought up that provinces allocate work to the HDA in time for its implementation.

Engagements with the provinces were crucial for the transformation of spatial settlements. Many of the projects that they were undertaking on their own on the basis of strategic land parcels and properties acquired, were guided by having to ensure that they were located within the priority human settlement development areas which, according to the spatial development frameworks of the various districts in the provinces, would have been earmarked as the correct places for spatial transformation. Therefore, cooperation with provinces and municipalities was necessary to ensure the HDA’s projects fell in line with the spatial frameworks so that the bulk infrastructure that was required was present.

Ms Ngoasheng responded to the question that had been asked by Ms Powell about section 65 of the PFMA and said that the letter had been written to Mr Chainee when he was the administrator in the HDA. She suggested that Ms Powell write a similar kind of letter to the current board, and it would be responded to.

The issue of irregular expenditure for 2020/21 was an ongoing matter. There was a team of executives that were dealing with the issue, particularly the issue of consequence management. The HDA had established a condonation committee. In areas where it needed to submit cases to National Treasury, especially those involving financial misconduct, the committee would assist by identifying where staff members had to be held responsible for the irregular expenditure that they had caused.

The HDA was in the process of putting internal controls and prevention measures in place. It had on-the-job training for all its supply chain management (SCM) staff and had reviewed all its tender files. It had a probity team that ensured compliance with all the prescripts before matters proceeded to the bid evaluation and adjudication committees. The SCM policy had recently been revised and was aligned with all the National Treasury regulations. The issue of compliance was taken very seriously, with compliance officers assisting the HDA to ensure that all its projects were compliant with all the applicable legislation. Its accounting officers and executives were looking into preventing a recurrence of its audit findings.

Regarding spatial planning and transformation, the HDA had a unit that assisted them in making sure that all their projects were mapped, and if they fell within the Priority Housing Development Areas (PHDAs), they were noted.

A Member had wanted to know how its funding model had an impact on how it managed its contracts and how it dealt with its contractors. There were instances where it was required to first create value before they could receive the funding. There were also instances where the provinces and municipalities paid the HDA the funds in advance, and then it would report on the work that it had done. In instances where it was required to create value first, recapitalisation would come in handy, because it would have its own funds to use, which it could then claim after it had implemented the projects.

She did not understand Ms Mokgotho’s question on the catalytic projects in Gauteng, and as a result, was not in a position to provide a response. She requested a clarification of the question.

She had answered the question about the TRUs in Limpopo earlier on -- the court matter had been scheduled for 22 March and had been postponed to 19 April.

She requested clarification on the question concerning accruals.

Mr Ngubeni responded to Ms Powell’s question on the flagged procurement contracts and said the board was not aware of any contracts being flagged by the banks or any issues raised insofar as they were concerned. Relying on the previous year’s audit outcomes, the procurement processes were being followed, but if there was further information that the Member had, the board would be happy to look into it.

On the point made by the Chairperson on the expanded mandate of the PPRA, he indicated that the property valuers, of which he was one, were regulated in terms of the Professional Valuers Act, which was looked after by the South African Council for the Property Valuers Profession (SACPVP), and was situated in the DPWI. The valuations done insofar as they affected the state were related to issues of expropriation, the buying and selling of property by the state and the rating of properties by the municipalities. The Council regulated the code of conduct amongst the valuers. In the value chain, it was not a statutory requirement for a valuer to be involved in the buying-selling process. Hence there was a distinction between the property value, the estimate thereof and the asking price. In the value chain dealt with by the PPRA in the context of the expanded mandate, the property valuers were not covered as part of the scope per se. The Council regulated property valuers. The PPRA intended to interact with the Council to explore whether they could achieve synergy in their work.

Ms Mohlala referred to the litigation with REBOSA and said the PPRA had provided all the information and had raised the issue of urgency. REBOSA could not stand on the issue of urgency and had withdrawn the urgent application because the PPRA had proved its case to REBOSA. The PPRA had presented information to the board at the time that the alleged unprocessed and unissued FFCs had actually been issued. There had been seven applicants, and of those seven, six had been issued certificates. Only one had been outstanding, which was then issued prior to the date of the hearing, which had nullified the issue of urgency. The allegation that was made by Ms Powell had also been raised weeks previously in relation to the new board, where it had been indicated that REBOSA would be taking the PPRA to court. The communication was in fact an internal communication between REBOSA’s CEO and its board. It was quite irregular that that kind of communication would be presented. Since then, the PPRA had not received any communication or court process from REBOSA indicating that they were proceeding with the matter, or that the matter had been set down for a date of hearing. Even the PPRA’s attorneys of record had indicated that they had not yet heard anything further, other than that there had been an exchange of pleadings.

On the issue around the contracts that were under the value of R500 000, the regulation had been amended by National Treasury, and it now referred to all procurements that were under R1 million. Even previously, when the PPRA was dealing with procurements under the amount of R500 000, the process was undertaken by SCM. They got three quotes and an assessment was made as to which entity met the highest points in relation to price and BEE requirements. However, with the recent Constitutional Court judgment, assessment was now done according to price.

With regard to the assertion that were certain transactions that had been flagged by the banks, as far as the entity was aware, there had been one matter in December 2021 where the banks had sent a query to the PPRA to confirm that a certain individual was a service provider of the EAAB. It had made that information available as to whether that person was a service provider or not. This was to ensure that when payment was made or released, it received confirmation that that person was a service provider. The finance department was taking care of that matter, and she would follow up to find out exactly what the final outcome in relation to that matter was.

On the question of how many PDIs had been brought into the real estate sector, the PPRA’s annual report had indicated that the total number was over 3 200, which included full status agents and interns. Regarding the “One learner One Property Practitioner” programme, in the past financial year, the entity had been able to bring in a reasonable number of young people into the sector. It had brought in a total of 240 learners and in the current financial year, it was looking at bringing in between 600 and 2 000 learners.

She agreed with the issues raised by Mr Tseki. She believed that the issue of transformation still remained a very thorny issue and would continue to be a thorny issue until there was a firm decision made on transformation. All obstacles or persons who wanted to deter or defer transformation had to be dealt with directly to ensure transformation prevailed.

The Chairperson said further questions could be submitted in writing.

Ms Mokgotho clarified her question again to the HDA. Why did accruals increase so dramatically, from R90 000 to R78.8 million? How was the instruction from National Treasury to return R195.8 million for non-compliance with DoRA likely to impact the operations of the entity? What was the essence of this non-compliance?

Ms Ngoasheng said Ms Mokgotho’s question was very specific, and she would have to go into the whole list of accruals to check why they had increased. She would not be able to provide those details at the moment. There were a number of compliance issues with DoRA and to determine exact numbers, she would have to check what in the DoRA framework the entity had not complied with. The HDA received funds from the various provinces and municipalities that it worked with, and it had to ensure that those funds were properly accounted for. She was unsure why Treasury had said the HDA was not in compliance with the DoRA, as Treasury was very specific in telling entities the specific sections of the DoRA that they did not comply with. She would be able to provide those specific answers only when she was sitting in front of the financials.

The Chairperson requested that Ms Ngoasheng provide those answers in writing to the secretary of the Committee within seven days.

Deputy Minister Tshwete apologised to the Committee for the conduct displayed by Ms Mohlala in the meeting. It was by no means a reflection of the PPRA and the Department, who had to respect protocol, hold the Committee in high esteem and appreciate its role of oversight.

Addressing Ms Powell, she said that the Minister in her opening remarks had addressed the issue of the SIU and said that once the report was ready, it would be brought to the Committee. She had never heard about the matter being under investigation. Once a matter was sub judice, it was not to be discussed until it was finalised.

She advised Ms Mohlala to write a formal letter to the Committee so that her matter was attended to by the Committee because the matter that had been raised was not part of this meeting.

She thanked all the Members who had commended the work of the Minister and her team. The Committee could rest assured that all the concerns and comments made would be followed up on. The Department would also follow up on Ms Powell’s letter to Mr Chainee.

The Chairperson said questions would be sent to the PPRA and the Department to be responded to in writing. The Committee would continue to have oversight on the DHS.

The Department and entities were released.

Adoption of minutes

The Committee's minutes dated 12 November 2021 were considered.

Mr Tseki and Ms Powell differed on two aspects of the minutes. One aspect related to whether the amounts reported on were alleged figures or audit findings.

The Chairperson said since the report was not directly from the auditor, the figures concerned were considered to be alleged.

The minutes were adopted by the Members.

 The DA objected to the approval of the minutes.

The minutes dated 23 February 2022 were considered and adopted.

The DA objected to the approval of the minutes.

Minutes dated 02 March 2022 were considered and adopted.

Ms Powell raised concern over the limited amount of time allocated for the Committee meetings. Was there any way to Z list the meeting till 13:30, to allow for genuine and robust engagement?

The Chairperson said that the meetings never followed the three-hour allocation and always went overtime. The Committee could not meet twice a week, because some Members were serving in other Committees. Previous attempts to acquire more meeting slots had been rejected by Parliament.

The meeting was adjourned.

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