The Committee met on a virtual platform to consider its Budgetary Review and Recommendations Report (BRRR) on the Department of Human Settlements and its entities.
The leading contention in the meeting pertained to the Committee’s undertaking to receive quarterly progress reports from the entities. One Member strongly suggested that the Committee neglected to meet with entities quarterly to monitor their progress on implementing plans. Other Members challenged this position and argued that the Committee had met with the necessary entities, particularly the Housing Development Agency (HDA), for their quarterly reports. The Department, in its annual reports, also addressed the quarterly reports of the entities. This disagreement was not resolved.
A number of recommendations were made by Members, including the upfront inclusion of details of targets that the entities had not met. Members also requested the inclusion of the Auditor-General’s recommendations, such as consequence management against those found to have transgressed regulations. It was stressed that the Committee did not have leeway to schedule more meeting days to engage with entities, and that Members’ questions and concerns had to be raised at scheduled meetings or through writing.
Following the deliberations, the Committee adopted its report with objections from the EFF and the DA. The Committee also considered and adopted outstanding minutes.
Mr Sabelo Mnguni, Committee Content Advisor, took the Committee through the Budgetary Review and Recommendations Report (BRRR), section by section.
Read full report here https://pmg.org.za/tabled-committee-report/5143/
Ms E Powell (DA) said she had gone through both this year’s and last year’s BRRRs. In the BRRR that the Committee adopted for the current financial year under review, the Committee had made undertakings on a number of quarterly progress reports that were supposed to have been presented to the Committee in the current calendar year. These were all detailed and adopted in the previous BRRR. For example, one undertaking was to take disciplinary actions against staff who caused irregular, fruitless and wasteful expenditure in the National Housing Finance Corporation (NHFC), the National Home Builders Registration Council (NHBRC) and the Community Schemes Ombud Service (CSOS). The Committee had to be informed of actions taken in the first quarter of the 2021/22 financial year. The report also referred to the Auditor-General’s (AG's) findings and that the Department had to develop action plans to address these findings and an internal audit plan. Progress on implementing each of the entities’ plans had to be reported to the Committee quarterly. The rental relief fund was a huge issue last year. The report also said that action should be taken and reported to the Committee quarterly. She was concerned, because, having gone through every Committee meeting that had been held this year, none of these quarterly reports had been presented to the Committee from the entities. Therefore the Committee had not fulfilled its own undertakings from last year’s BRRR.
Going forward, the Committee needed to be cautious of whatever it adopted that day. It needed to ensure that it was able to schedule those meetings and that the Committee content advisers took note of what had been adopted, and whether there had to be three meetings a week. The Committee was currently in dereliction of its own undertakings.
She was concerned that the BRRR listed and spoke to achievements, but not directly to the failures. It was not necessarily an upfront true reflection of the shocking performance of the Department. There was general consensus in the Committee of just how poorly the Department performed this year, having achieved only 41% of its targets. The first recommendation was that upfront, where the report detailed the financial performance of the National Department and per entity, it also detailed the performance against the four programmes in terms of the achievements. For example, the DHS achieved only 41% of its targets in the Integrated Human Settlements Programme. While the report provided a financial report and then a list of achievements, it did not truly reflect the actual progress. There was no upfront indication per entity of the extensive amounts of irregular, fruitless and wasteful expenditure. The report needed to detail upfront where targets were not met in entities, as only the financials and achievements were reflected.
In the past financial year, the Committee had received only the annual performance plans (APPs) of entities, but not once to date this year had it received a quarterly performance report from a single entity. The Committee had had a performance report from the national Department, which spoke only to the performance of its four programmes. The Committee needed to ensure that in this BRRR, it received quarterly reports from each of the entities, which could contain the recommendations regarding their turnarounds. The Committee had not received a single report from any of the metros on their Urban Settlement Development Grant (USDG) or their Human Settlements Development Grant (HSDG) expenditure for the entire calendar year. She had noted that the metros’ reports were being moved off the current term’s agenda. The Committee could not have a full year in Parliament where it did not receive a single metro report on the USDG or HSDG.
Turning to the observation/recommendation two on page 24 of the report, she asked what consequence management was being referred to, and how would it be monitored. The recommendation needed to be firmed up. On observation five, she questioned the use of the word ‘stagnant,’ and said the entities had drastically under-performed and their performance had been abominable. ‘Stagnant’ was not the right word to use. Recommendation five was a huge undertaking, and she stressed that the Committee was already in the first quarter of the 2022/23 financial year, as referred to. She did not think that the Department had been given enough time to present the plan and that the recommendation needed to say ‘the second quarter’.
In recommendation seven, the Committee made a huge number of recommendations to the Housing Development Agency (HDA), so what did the details of the controls referred to look like? The HDA’s issues could not be addressed by just saying ‘put in place controls and prevent further control deficiencies.’ What kind of reporting would the HDA have to provide to Parliament, and when? In observation nine, she noted a spelling error.
She said recommendation nine contained the basics. Providing training on developing a business plan was not going to turn around the issues in the provinces. There was a need for a much firmer recommendation. It was not fair to single out the North West and the Free State to present a turnaround plan on the challenges encountered, when six of the nine provinces had rollovers. Two of them had been rejected by National Treasury. So all six of those provinces that were not able to spend their money had to present to the Committee on their turnaround plans, not just the two provinces. Provinces were obliged to supply business plans, so that recommendation was poor.
On recommendation 13, when the Committee spoke with Deputy Director-General (DDG) Neville Chainee and other officials on the issue of the rezoning of land, it was determined that it was not a Human Settlements issue. She suggested that this be reworded, because Human Settlements kept failing on a metric that was in fact the responsibility of municipalities. She recommended that the rezoning of land would require an intergovernmental solution that the Department of Cooperative Governance and Traditional Affairs (COGTA) needed to get involved in, because municipalities did not have the correct zoning systems and were dragging their heels in rezoning priority development areas (PDAs). The Department was hamstrung by the inability of municipalities to do the very basics of rezoning, which was why 0% had been achieved on the target for PDAs.
The Chairperson interrupted the Member with a request that other Members be given an opportunity to speak. If there was time, she could continue or if there was no time, she could submit her recommendations.
Ms Powell asked to quickly finalise her comments. On observation 15, she said that the provinces, not the Department, had failed to utilise the total allocated budget.
Ms S Mokgotho (EFF) agreed with Ms Powell, because the Committee was also concerned that the Department had failed to honour its promise of giving the Committee a quarterly report on its progress on the implementation of the annual strategic plan and that of its entities.
The report omitted the following points:
The National Housing Finance Corporation (NHFC) failed to disburse the allocated budget of R346 million which was targeted to assist the missing middle sector of society. As a result, they remained without access to housing.
The HDA failed to deliver the targeted 2 787 Innovative Building Technologies (IBT) housing units, and instead only 1 685 IBT housing units were delivered, which left more people who were identified as beneficiaries without houses.
The Social Housing Regulatory Authority (SHRA) failed to meet its target of delivering 3 500 social housing units, and instead of delivering 100% of the targeted social housing, it delivered 2 771. It had also failed to deliver 4 000 social housing units tenanted, having delivered only 2 057.
Lack of progress in implementing these projects perpetuated citizens’ lived experiences of having to travel long distances to work and incurring exorbitant transport costs. The AG had recommended that the accounting officers or authorities implement consequence management against those found to have transgressed laws and regulations and ensure that vacant positions were filled timeously. Further, the AG had stated that Ministers and Members of Executive Councils (MECs) should track project commitments and regularly follow up on the implementation of action plans by the respective sector’s role players to ensure that appropriate and committed actions were being implemented to eliminate repeat findings.
Mr A Tseki (ANC) responded to Ms Powell’s comments on quarterly reports. Every time the Department presented its quarterly reports, there were slides that spoke about the USDG and slides about the provinces.
Ms Powell responded in the Zoom char, and said that the Committee had not received a single quarterly report from the metros or entities. The Department's report spoke only to the four key programmes of the Department. The Committee had also not fulfilled the majority of the undertakings made in the previous BRRR.
She asked the Chairperson to protect her from Mr Tseki’s response to her input, as the Chairperson had previously asked that Members not be singled out and responded to. He was out of line by continuously singling her out and giving his own responses to her.
The Chairperson said that Mr Tseki was reminding the Committee.
Ms Powell clarified that her point was about metros, not provinces.
The Chairperson requested that Mr Tseki address issues as raised by Members, and not address Members directly.
Mr Tseki said he would not mention names. On the entities and USDGs, there were quarterly reports. If the Committee wanted more, the entities could be called in from time to time, as had happened previously. On recommendation four, a way had to be found to have a special meeting to deal with the recurrence or repetitive issues raised by Department of Mineral Resources and Energy (DMRE) and the AG. Observation 14 stated that correct tendering measures were not followed, but no money was lost. The important point was that procedures were not followed, even if no money was lost. The recurrence of this needed to be stopped. With those few points, he supported the report.
On the issue of quarterly reports, in some instances, he did not agree with what Ms Powell had said.
The Chairperson reminded Members that the Speaker of the National Assembly, on the recommendations of the BRRR, wrote to the departments through the leader of government business. There was a response to all the issues that were raised in BRRR. The report was distributed to all Members. The report which came through from the Speaker’s office said that there could not be a meeting on every single resolution that the Committee had taken, but that the Department was obliged to respond through the Speaker’s office. The Committee was scheduled to engage with the HDA and CSOS, since it had been worried about them at the time.
It was true that every quarter, when the Department presented its quarterly reports, there was a section that spoke to the oversight of the Committee. The previous Committee minutes reflected that the Committee had said it had only one day per week to meet with the Department because of its time constraints. When it presented to the Committee, the Department had to present its oversight on the entities. In future, when the Committee writes the letter to Department as it receives the quarterly reports, it should raise particular questions that have been resolved on.
The issue of having three days of meetings was impossible to resolve, and the Committee had to try not to take decisions that it knew were impossible. This Committee was not the only Committee. There were other Members in this Committee sitting in other committees. Therefore it was not possible to have meetings three days a week -- the Committee had been given Wednesdays. She suggested that after receiving the BRRR responses from the Department through the Speaker, if the Committee was not satisfied with the answers, it could raise issues that it thought were not adequately responded to at the scheduled meetings on a quarterly basis. The Committee also had other avenues to use, such as the statement of Parliament, to raise some of the issues that the Department had to respond to, through the Minister. The Committee should ask questions to the Minister in meetings which were scheduled quarterly. The Committee could schedule special meetings on request, depending on approval by the Chair of Chairs and the Chief Whip. If Members were not happy with the response of the Department, as per the response received from the Speaker, they could indicate so. On the response to the BRRR forwarded through the committee secretary from the Department through the Speaker, the Committee was supposed to have raised its concerns around particular issues, which it had not done, not the issues that had not been dealt with in the report.
Ms Powell said that having had a single response to the BRRR that had been sent via the Speaker still did not speak to the undertakings made to the Committee to receive quarterly reports on crucial audit and entity issues. So there had been a response, but the undertakings made to receive quarterly reports on these crucial audit and entity issues had not been forthcoming in the previous financial year.
The Chairperson interrupted and said that every quarter the Committee had received a quarterly report from the Department, and the Committee had taken decisions.
Ms Powell requested that she be allowed to finish her input before the Chairperson responded. She had gone through those quarterly reports and the list of meetings that the Committee had had. The quarterly reports that the Department presented had not included quarterly reports for the entities, but spoke only to the four programmes of the Department. The undertakings made in the BRRR to receive quarterly reports on audit and entity-related issues had not been received. It was an indisputable fact.
The Committee could also consider two further recommendations, one on the residential rental relief of the Social Housing Regulatory Authority (SHRA) which had still not been spent, and the other on the debt relief under-spending on the NHBRC that had still not been spent. She drew the Committee’s attention to Rule 166 4(b) of the rules of the National Assembly, that where a report of a committee was not unanimous, the report must specify in which respects there was no consensus and, in addition to the views of the majority, must express any views of a minority. This meant that her recommendations as an opposition Member needed to be included in the report.
The Chairperson said this was a misinterpretation of the rule, and her specific input would not be included in the report. If she wanted to do it, she could do it herself.
Ms Powell said the rule was a rule of the National Assembly and could not be argued with. The views of opposition Members could not be excluded from the BRRR.
Mr C Malematja (ANC) said that the Chairperson had clarified how the processes of Parliament worked. He said to Ms Powell that new rules should not be created for certain meetings. He requested that the meeting be allowed to proceed without interruptions.
Ms Powell, in the Zoom chat, quoted Rule 166 4(b) of the National Assembly, and said the rules of Parliament were non-negotiable. She had referred the matter to the Speaker, who had said that the rule must be applied to Committee reports.
Mr Malematja said that the Members had been given time to go through the BRRR, and they knew what it contained. Once a target was set and achieved, he asked how there could be shortfalls. The report was very clear that there were targets set and met, and there were measures to deal with targets that were not met. The Committee could not come and create shortfalls where there were none. The Chairperson was correct in saying that annual reports consisted of quarterly reports. If there was a time when a quarterly report needed a debate of high magnitude, Ms Powell should have raised it then. Now that the Committee was dealing with annual reports, it did not need to revert back and deal with previous quarterly reports. It would not be in the spirit of what the Committee aimed to achieve. What the Committee aimed to achieve was to ensure that the entities worked correctly. There was nothing wrong with correcting issues that were not right, but it was wrong to create a perception that the entities were not working and that the Committee was not providing oversight. The Committee had given recommendations where it felt things were not right. Compared to other entities, the entities referred to had performed much better. He was worried about how some Members conducted themselves when the majority did not necessarily agree with their views.
Ms N Tafeni (EFF) said the NHBRC was doing well in the report. On recommendation 20, she wanted to know where it would get its inspectors. She said it was better for the Committee to get a report quarterly because, at the end of the year, the annual report came with mixed issues that were supposed to be debated quarterly. The HDA had come with a 0% achievement report, and she did not understand this. This report did not suit the Committee and as the EFF, the report was not accepted.
The Chairperson stressed that the comment by Members that the Committee had not interacted with entities was incorrect and was a false narrative. The Committee met with the HDA twice in one quarter, on 11 March and 25 May. The HDA was an entity that the Committee had identified with worry. The Committee had met with the CSOS because it was worried about it, and the entity had come and presented. The CSOS had actually improved because the Committee had engaged with them. These were the entities that the Committee was worried about, because they had qualified outcomes. In the meeting on 25 May with the HDA, the chair and the CEO, Ms Daphney Ngoasheng, attended. The Committee had requested them to submit their condonation, because the Committee was worried about their irregular expenditure, and this had been submitted, but the report did not indicate whether Treasury had approved the condonation. So the issue that the Committee had not yet engaged with the Department was a false narrative. It was politicking because every quarter, the Committee met with the Department. The Committee had decided that it was impossible to engage with entities because it was given one day, Wednesdays, to meet with the Department.
She recalled that when the Department presented, Ms Mokgotho had rightly asked the Acting Director-General (DG) about its 100% oversight achievement. She asked whether the entity had dealt with the matters affecting it, and the Acting DG responded. She reminded Members that the Department had oversight responsibilities over the entities to ensure that they carried out the mandate of the Department. Parliament provided oversight on the Department and its entities. The one day given to the Committee would never be enough for Members to interact with the sector. More meeting days had been requested via the Committee secretary, but this request was rejected. The Committee could only request day-to-day special meetings that it needed. In some instances, these requests were rejected because Parliament was sitting. At some point, when the Committee had requested to meet when a slot was found, some Members had refused because they said they did not want to have a Committee meeting when Parliament was sitting. The Committee would have to reconvene and look at how to deal with this issue.
When dealing with the quarterly reports, there was nothing wrong with Members asking the Department specific questions about entities to get a response. If the Committee adopted the first and second quarter engagements without asking the Department critical questions, it was not right to come back and say that it had not done its work. It should be agreed that those issues that were correct and of assistance that Members raised, should go into the report. The BRRR reflected the issues and challenges faced by the entities in terms of their audit outcomes and not meeting their targets. She agreed with Members that it should be reflected that the Department had achieved 51%, which could be linked to the recommendation on what it must do.
In the second quarter, the Committee needed to engage with the Department on details on whether it had reviewed its medium term strategic framework (MTSF) numbers and how it intended to ensure that it met its targets. It would not simply be a meeting to discuss that it had achieved 51% and what it was going to do in that regard. Because the Committee was going to deal with strategic plans and the annual performance plan (APP) of the Department, Members had to take cognisance that in the previous year, it had obtained 51% and therefore, in the coming years, the Committee had to look at the targets and indicate to the Department when it would not be able to reach its targets. Further, the Committee had to ensure that the Department covered the shortfalls it had missed in its annual report.
She agreed with Mr Tseki that, at some point, the Committee had to engage the Department on its recurring issues. The AG had said that the Department was not addressing the root causes of some of the recurring issues, so even if issues were being dealt with today, another similar situation would arise tomorrow because the root causes were not addressed. The Committee needed to engage the Department on the root causes as identified by the AG, and see how the Department's audit action plans were addressing them. Those were the issues that the Committee needed to agree on in the report as presented by the Committee's content adviser.
Ms Powell raised a point of order. She said that the Committee needed to comply with Rule 166 of the National Assembly and include inputs where there had been a divergent opinion by the minority of the Committee where applicable.
The Chairperson said that Ms Powell was misinterpreting the rules and that she was not a minority, but an individual.
Ms Powell said there was a letter from the Speaker clarifying the rule.
The Chairperson said she was not a minority and that a minority was all the political parties that were in the Committee.
Ms Powell said the majority was the ANC and the minority was the opposition. Rule 166 was clear.
The Chairperson repeated that she was not the minority alone. There were other opposition parties in the Committee which were the minority.
The Chairperson and the Ms Powell repeated themselves as they spoke over each other.
Ms Powell said she would be referring this matter, with the recording, to the Speaker of the National Assembly.
The Chairperson repeated that she was not the minority and that the minority was the group of parties sitting in the Committee. Ms Powell was misinterpreting the rules.
Ms Powell said that the rule was clear and she would not argue with the Chairperson. She would refer the matter to the Speaker for determination. She asked that the input from the DA be noted in the BRRR.
The Chairperson noted the objection of the EFF and the DA to the BRRR.
Ms Powell said she was not objecting to the report -- she was reserving all her opinions for when the report would be tabled in the National Assembly. She was asking that the inclusions of the DA be recorded in terms of the recommendations she made.
The Chairperson said that the Committee would not include those recommendations. She was uncertain as to whether the DA was objecting to the adoption of the report.
Ms Powell said that the DA did not agree with the contents of the report.
The Chairperson said that this was an objection. There was nothing wrong if Ms Powell wanted to object.
Ms Powell said the report could only be objected to when it was tabled in Parliament. This was not the correct forum to lodge a formal objection. Therefore it could be indicated that the DA did not agree with the content of the report. She reserved her objection for the National Assembly.
The Chairperson noted Ms Powell’s objection.
The BRRR was adopted, with the objection of the EFF and the DA.
Three sets of minutes, dated 12, 14 and 19 October 2022, were adopted.
The Chairperson said the minutes of 14 October must indicate that the presentations were attached to the minutes so that the reader could follow.
Mr Tseki acknowledged the Chairperson’s correction, but said he could imagine how voluminous the bundle of minutes and presentations were sometimes, and asked her to talk to the Committee secretary after the meeting.
Chairperson's concluding remarks
The Chairperson thanked the Members for the engagement. She asked Mr Mnguni to include the inputs made in the meeting to table the report before the Minister of Finance read the budget.
She reminded Members that there would be a joint visit to Vhembe on the petition forwarded to the Committee, the Department of Water and Sanitation (DWS) and COGTA. In the meeting that took place, it was agreed that the DWS would lead and the Committee would participate in the process because it was mainly the DWS which was responsible for the building of houses. However, the building of houses remained within Human Settlements. Human Settlements was affected because, in terms of the law, all the houses that were supposed to be built were supposed to be enrolled with the NHBRC, which was an entity over which the Committee provided oversight. Members were requested to indicate their availability to go to Vhembe to meet with the petitioners so the coordinator could coordinate accordingly.
Members were also requested to indicate their availability for the Western Cape public hearings. She pleaded with them to make themselves available for both engagements, and thanked those who had represented the Committee in the visit to North West, which had gone well.
The meeting was adjourned.
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