Property Practitioners Regulatory Authority update on implementation of AGSA recommendations; Implementation of FLISP Programme, with Deputy Minister

Human Settlements

22 March 2023
Chairperson: Ms R Semenya (ANC)
Share this page:

Meeting Summary


In a virtual meeting, the Portfolio Committee was briefed by the Property Practitioners Regulatory Authority (PPRA) on implementing the Auditor-General South Africa (AGSA) recommendations. The Committee also received a progress report on the implementation of the Finance Linked Individual Subsidy Programme (FLISP).

The Deputy Minister, who attended the meeting, stated in her address that the first change to be made towards implementing FLISP is to rebrand the entity. Research carried out indicated that ordinary people had insufficient knowledge about the programme.

The PPRA delivered a presentation which discussed progress made on implementing the AGSA’s recommendations with the focus being on material findings which resulted in a qualified audit opinion and also disclosing the status of the high vacancy rate and other Human Resource issues.

One of the audit findings included the Inventories (Existence of Inventory Communication of Audit Findings 35). The PPRA explained to the Committee that one of the steps taken to resolve this finding was that the management in finance would perform inventory counts and invite AGSA as of 31 March 2023. The AGSA’s administrative findings include non-compliance with the recruitment policy during the appointment process as per the Communication of Audit Findings (COAF) 28 with 31 March as the timeline of completion. The Executive and Board of the PPRA approved appointments. Since the dismissal of the previous CEO, recruitment for the position has not yet commenced. An unfair dismissal dispute with the Commission for Conciliation Mediation and Arbitration (CCMA) has been set down for 25 April 2023. The Board of the PPRA agreed to update the Committee on the progress of the matter once it has commenced.

The First Home Finance Programme has been developed by the Department of Human Settlements to enable sustainable and affordable first-time homeownership opportunities to South African citizens and legal permanent residents earning between R3 501 and R22 000 per month, (the ‘affordable’ or ‘gap’ market). One of the challenges this programme seeks to address is enabling households in rural areas accessibility to the First Home subsidy to build decent and quality homes. To grow the uptake of this programme, the entity seeks to target private sector employers with Employer Assisted Housing Schemes to enable their employees to access the subsidy.

The Committee discussed the implementation of the audit findings by the PPRA including the entity’s IT systems, duration of the finalisation of the litigation process with the former CEO and the challenges to filling all vacancies, amongst others.

The Committee also inquired how the rural areas can access loans without collaterals and suggested strategies to drive wider awareness about the FLISP programme.

Meeting report

The Chairperson welcomed all Committee Members to the meeting and observed a moment of silence for meditation and prayer. 

The meeting agenda was adopted.

The Secretary noted apologies from some Committee Members. The Minister was unable to join the meeting because she was out of the country.

The meeting was called to receive progress reports by the Housing Development Agency and the Property Practitioners Regulatory Authority (PPRA) on implementing the Auditor-General of South Africa (AGSA) recommendations. It was also to get a progress report on implementing the Finance Linked Individual Subsidy (FLISP) Programme.

The Chairperson advised that due to the need for all Members to attend the plenary at the City Hall, the meeting would be cut short or adjourned earlier than the scheduled time.

Ms E Powell (DA) inquired why the Housing Development Agency (HDA) was unable to distribute its presentation within 24 hours of the meeting, as initially emphasised. Two weeks ago, the Committee received an undertaking from the Secretary that all materials would be distributed 24 hours before the meeting to provide adequate time for Committee Members to review and interrogate the materials.  

The Secretary confirmed that the material was sent the moment she received it in the evening.

The Deputy Minister of Human Settlements, Pamela Tshwete, apologised for the late disbursement of materials. This was due to the need for the Minister’s approval and thorough review from the Ministry. She, however, noted the Committee’s concern and stated that the Ministry would work within the deadline in subsequent times.

The Chairperson stopped the HDA from presenting and said that a different time would be fixed for its presentation because Committee Members require more time to evaluate and review its presentation.

Ms Powell requested a timeline within which the HDA presentation will be brought before the Committee since there is a high chance of postponement. 

The Chairperson said that she was unable to provide a timeline due to the need for the submission of the programme to Parliament and that the Secretary would look into an appropriate time. The presentation was scheduled for this term and must, therefore, be conducted this term.

The Chairperson further apologised to the acting chairperson of the HDA for the postponement of its presentation and stated that the rescheduled details of the presentation would be communicated to them.

Overview by the Deputy Minister

Deputy Minister Tshwete apologised for the postponement of the HDA presentation while stating the purpose of the meeting. She indicated that the aim of the meeting was to brief the Committee on the Auditor-General’s (AG’s) findings and the FLISP programme. During the presentation, the Committee will note that all findings and gaps caused by vacancies of executive employees are works in progress with specific timeframes and are in the final stages. However, the outstanding matter is the legal matter with the CEO which is yet to be concluded.


The first change towards the implementation of FLISP is to rebrand the entity. Research carried out indicated that ordinary people had insufficient knowledge about the programme. As such, rebranding makes it easier for the beneficiaries to understand it better.


The Deputy Minister explained that the presentation would highlight the number of beneficiaries from the programme since 2019 and subsidies approved. Additionally, it would mention the challenges that the programme has encountered. Research performed by banks and housing development identified that people earning less than R10 000 are less likely to be approved for bonds even with subsidies that the programme offers. This poses a huge concern for the Ministry. The presentation would also display some recommendations that could bridge this gap.


PPRA 2021/22 AGSA Findings Action Plan


The purpose of this presentation is to present to the Portfolio Committee for Human Settlements the progress on the AGSA action plans, focusing on material findings that resulted in a qualified audit opinion. It is also to disclose the status of the high vacancy rate and other Human Resource issues.

Audit Findings

-Misstatement in completeness of receivables/payables from exchange transactions. The remedial steps taken to correct this finding is that the management in finance has split the 2022 age analysis between debtors' balances relating to exchange and Non-exchange transactions as required by the Generally Recognised Accounting Practice (GRAP). The timeline for the total turnaround for this finding is 31 May 2023. For 2022, the splitting of the Age Analysis between debtor’s balance is complete while for 2023, the management in finance are in the process, but require year end data (as at 31 March) to complete the task. Timeline for completion is 30 April 2023.

-Revenue from non-exchange - Portion of penalties incorrectly recorded in the current year. The remedial steps taken include reviewing penalties in the General Ledger for all revenue transactions relating to prior years, by the management in finance. Penalties identified relating to previous years gave rise to a prior period error adjustment on the revenue amounts disclosed in the audited 31 March 2022 Annual Financial Statements. The timeline for completion is 31 May 2023, while the timeline for completion for the limited current IT system is 30 April 2023. 

-Inventories (Existence of Inventory Communication of Audit Findings 35). The step taken to solve this finding is that the management in finance will perform inventory counts and invite the AG as of 31 March 2023.

Administrative Findings

-Human Resource Management: High vacancy rate with 30 April 2023 as the timeline of recruitment

-Human Resource Management: Non-compliance with recruitment policy during the appointment process. Communication of Audit Findings (COAF) 28 with 31 March as the timeline of completion.

Executive and Manager Appointments Approved by the Board

-Chief Information Officer to commence on 1 May 2023.

-Chief Corporate Support Services, the Manager- Property Sector (Transformation), Executive Manager (Licensing) and the Executive Manager (Investigation and Enforcement) to commence on 1 April 2023.

-The commencement for the appointment of the role of Manager- Property Sector (Research) is yet to be confirmed although the interview was done on 17 January 2023.

-The process for filling the CEO position has not yet commenced since the dismissal of Ms Mamodupi Mohlala. There is an ongoing unfair dismissal matter currently with the CCMA (M Mohlala - Mulaudzi // PPRA). The matter has been set down for 25 April 2023 and the Board of The PPRA to advise on the commencement of this process.

See attached for full presentation

First Home Finance Implementation Progress Report

First Home Finance is a once-off housing subsidy that enables qualifying beneficiaries to buy or build their homes on an affordable basis. The Programme was developed by the Department of Human Settlements to enable sustainable and affordable first-time homeownership opportunities to South African citizens and legal permanent residents earning between R3 501 and R22 000 per month, (the ‘affordable’ or ‘gap’ market).

First Home Finance Performance against Medium Term Strategic Framework (MTSF) Target as at 31/01/23. Sector First Home Finance Units MTSF target was 20 000 and by the end of Q3 of the 2022/23 Financial Year— the sector had delivered 18 720 units. National Housing Finance Corporation (NHFC) contribution was 9 063 at the end of January 2023 against the planned MTSF, NHFC target of 13 234. The sector will meet the MTSF target as the sector was at about 94% at the end of December 2022 (M&E Unit Stats). Programme implementation so far has been with mortgage product throughout the period. Significant improvement is expected when implementing non-mortgage products in both urban and rural areas for the benefit of households in lower income brackets.

Performance reported to date is based on mortgage loans. Mortgage loans are largely granted to households earning above R15k p.m.—therefore receive, on average, a lower amount of subsidy. The Agency expects to see improvement in value of approvals and disbursements when implementing First Home Finance with non-mortgage products as these are mainly accessed by households in lower income brackets—therefore would receive higher subsidies. As a result, programme performance is behind in value of applications approved and value of disbursements.

Key Challenges First Home Finance Programme Seeks to Address

-Legacy challenge of households in the lower income brackets to access home loans and subsidy—both urban (mortgages) and rural areas

-Challenge of households in rural areas accessing the First Home subsidy to build decent and quality homes.

-Rising cost of building materials leading to affordable housing stock priced beyond the reach of First Home Finance market.

-High level of indebtedness that our target market faces makes it difficult to access home loans from lenders when they want to build or buy their first homes (NCR Report shows rejection rates of about 66% for all types of credit)

First Home Finance Improvements

As a result of the additions of the new housing finance products offering, the NHFC will broaden (geographic spread) and deepen (going into lower income segments) the reach of the First Home Finance Programme:

-Households in the lower income brackets of the programme will be able to access the subsidy as they normally access non-mortgage products such as unsecured housing loans and pension-backed housing loans.

-Households in rural areas will be able to access the subsidy with housing finance products they have used for years—such as unsecured housing loans offered by the NHFC retail finance intermediaries and the banks or even with own savings.

-Members of community savings schemes (such as property stokvels) will be able to access the subsidy with loans offered by their Schemes.

-Households unable to buy for various reasons, such as poor affordability levels, can opt to enter into rent-to-own agreements and access the subsidy at the time they want to buy.

-Applicants now apply online via First Home Finance Online Application Portal—a platform that will improve turnaround times of application processing, while updating applicants at each milestone via SMS.

High level of indebtedness that the Agency’s target market faces makes it difficult to access home loans from lenders when they want to build or buy their first homes. NHFC, in partnership with the private sector players, will look at assisting employees with poor credit records through the following measures:

-Enrol them on a financial literacy course.

-Once completed, our partners will negotiate settlements with their creditors and settle them, offering a loan at a lower rate than the existing loans.

-With these interventions, credit scores will improve, enabling employees to buy houses.

-The partners the NHFC will work with have already implemented with large private sector players in mining, retail, food and even financial institutions.

-The Department, Banking Association South Africa (BASA) and NHFC embark on a housing consumer education programme (financial literacy programme) to help households avoid indebtedness.

-Such interventions should contribute to the uptake of the Programme.

High Level Actions Underway to Grow the Uptake of the Programme

-Approval of Implementation Guidelines for non-mortgage products enables the Programme to be accessed by many households who want to build their first homes in rural areas and townships – this remains outstanding

-NHFC is working with SALGA to workshop Policy with Municipalities as they are expected to support the implementation of the Programme.

-Working on the Memorandum of Understanding (MOU) with the National Home Builders Registration Council (NHBRC) to ensure subsidised homes are enrolled and inspections conducted – objective is to deliver quality homes for the beneficiaries, even in rural areas.

-NHFC is engaged with several lenders of non-mortgage products (banks and non-bank lenders) so that they package their home loans with the First Home Finance subsidy to make home building affordable for their borrowers.

-NHFC has signed an MOU with the PPRA: Roadshows targeting property practitioners, especially women and youth to package sales with FLISP.

-Resume Provincial roadshows with the Department of Public Service and Administration (DPSA) targeting Government Employees Housing Scheme members who are within the First Home Finance income bracket—about 321 000 as at the end of January 2023.

-Target private sector employers with Employer Assisted Housing Schemes to enable their employees to access the subsidy— currently engaging companies in the mining sector (one MOU signed), financial services (one MOU reviewed by their legal team), retail sector (one MOU signed with leading building merchant).

The Chairperson thanked the teams for their presentations. She called for Members engagement.


Ms Powell appreciated the entities for their presentations and welcomed the new application options for people who were previously disadvantaged. She welcomed the acting CEO of PPRA and praised her for the good work done in bringing stability to the entity. She applauded the Chairperson for tackling the challenges that were of utmost concern to her in the past.

She requested clarity on the timeline of the conclusion of the process of litigation of the CEO. She asked about potential risks of litigation regarding the advertisement of the CEO position before the final termination has been upheld at the CCMA.

The PPRA IT systems are non-functional regardless of the millions spent on them. What efforts have been put in place to resolve the IT challenges? What are the financial recovery attempts made by PPRA for awards made outside of approved and acceptable supply chain management and Treasury regulation, as was the case of the application? Besides the material findings for the PPRA, are there additional findings threatening another qualified audit and what is the PPRA doing about it?

An oversight body and civil society inquired about the agents of attorney’s registers. The members are unable to register agents in the system because they were asked for firm pens that do not apply to the attorney’s registers. Is there a plan for these agents? Ms Powell raised her concern over the various stages/statuses and sector descriptions, leading to confusion. She then recommended that the entity create a template, format and processes for different sectors and agent statuses.

In Ms Powell’s follow-up question, she asked for PPRA’s new age policy where delegations for appointment of C-suite and senior staff lie. Is it with the acting CEO or the board?

Ms M Makesini (EFF) welcomed the PPRA presentation and commended the initiative taken to resolve the challenges, indicating the hopes to achieve the goals. Is the entity confident that all the vacant positions will commence on 1 April 2023 and does it foresee any challenges it may encounter? Is there a plan to minimise the timeframe of processing applications on the FLISP programme to enable people to purchase properties in good time?

Dr N Khumalo (DA) reiterated the previous Members’ comments and praised the entity for a job well done. She asked if there has been disciplinary consequence management regarding the audit and ministry findings on the non-compliance of recruitment process. Further, she recommended that the entity should consider partnering with employers to drive more awareness about the FLISP programme although collaborating with every employer in the country will be a bit challenging. Are there available platforms for regular citizens to access resources? Is this available to the informal business class? What are the timeframes from application phase to receiving the finance? Is the entity considering utilising public education with representatives and municipalities for more awareness? 

Mr A Tseki (ANC) emphasised the need to drive wider awareness about the FLISP programme. He also asked how rural communities can access these loans without collateral. What are the interest rates of Cosmopolitan Development firm?

Mr C Malematja (ANC) expressed his delight forr the timeframes for filling the vacant roles. The recruitment will provide a better way to hold the entity accountable, and he asked that the Committee support them. He recognised how inclusive of all persons the programme was and questioned the 20th payment period of the mortgage plan. Is there an attempt to reduce the repayment duration from the 20th?

Ms N Sihlwayi (ANC) appreciated the presentation and inquired about the programme performance on value and investment. What mechanisms have been established to maximise the programme for the new people to be involved? Is there a system to mobilise the new and old employees to create educational awareness through the unions for full participation in the programme?


The Deputy Minister appreciated the acknowledgements from Members and noted their comments.

Mr Steven Ngubeni, Chairperson, Property Practitioners Regulatory Authority, indicated that the entity would keep up the momentum and ensure its performance increases. The entity can unfortunately not provide the length of duration of the legal issue surrounding the outgoing CEO because it is not in control of the follow-up dates. The major challenge being faced at the CCMA is the consistency in establishing new charges, thereby increasing the delays of the finalisation. Nonetheless, the board has resolved to proceed with the advertisement of the position as there is no existing relationship between the entity and the past CEO. The risk may be present, but a legal representative is available to mitigate it. Mr Ngubeni to the Committee that the entity has confidence in recruiting new employees as stipulated within the timeframes. The most challenging aspect of recruitment has been overcome.

The Property Practitioners’ Act is clear that the delegations and the recruitment of the C-suite lie with the CEO; however, it is done within the purview of further directives in the policy and shareholders compact. While the CEO is the employer, she consults with the board, concurrently with the Minister. The three positions affected are those of the CEO, CFO, and COO, where the entity is still dealing with the process of inclusion of C-suite positions into the compact agreement. It has always been the policy of the PPRA that the CEO is responsible for recruiting her subordinates with the consultation of the board.

Ms Thato Ramaili, Acting Chief Executive Officer, Property Practitioners Regulatory Authority, stated that the need to procure an Enterprise Resource Planning (ERP) system via the transversal contractor through National Treasury was not successful because the transversal contract on IT-related procurements is only for cellphones, systems, and smaller ERP systems. To adhere to procurement processes, the entity is finalising the specifications and the systems will be procured soon. The entity wanted to ensure due diligence and that proper IT diagnostic was performed.

To ensure financial recovery, three weeks ago, the entity appointed an attorney where the Intellectual Property (IP) holder issued summons that have been responded to and defended with the view that the app was unfit for use. Also, it received a counterclaim to recoup the expenses with the belief that it was paid in error because the app does not meet the standards and cater to the need it was created for.

Ms Ramaili discussed other non-material findings highlighted by the AG. One of these findings was about the provision of performance bonuses that were inappropriately recognised as a provision in the books. During the audit, the AG noted that management recognised a provision for performance bonuses during the current financial year without properly assessing whether they met the criteria. The board did not approve the bonuses last year because the entity does not have performance evaluations which are believed to be the first criteria for bonuses. The second finding is on inventory. There is an absence of proper safeguarding of assets like laptops and ACs stored in an unsafe areas. The entity has mitigated the findings. Another finding was that the policy was not reviewed in the current year and the entity has performed an internal review of all policies to ensure an alignment with legislation and the views of the PPRA. There will be a workshop to present all these policies to the board by 24 March and approval before the end of the financial year. The other finding was inadequate cyber incident management and other IT-related issues but the entity is confident that these issues will be resolved.

The Act requires the entity to register attorney agents and issue them with registration certificates. Although in the past, the entity erroneously issued Fidelity Fund Certificates (FFC) but since last year December, the agents have been issued with certificates as required by the Act. The format of the FFC is highlighted in Regulation 22 of the Act so the difference between the past FFC and current one is that FFCs needed to stipulate whether you are a candidate agent or principal agent. With the new dispensation, the entity is not required to classify them under candidate or principal agent, but they need to know the sections of the practitioners and the section of the auctioneer or real estate section or managing agent. With the implementation of the new Act last year, the entity still issued the previous certificate which has since been rectified.

She welcomed the suggestion to provide a clear diagram of the registration path for all the sectors.

Some of the issues highlighted in the forensic investigation were the irregular appointment of employees of the PPRA and most of them are undergoing DC processes and the entity is looking to finalise the process in the future. The process started in February and will be concluded in April to commence the consequence management.

Ms Azola Mayekiso, Chief Executive Officer, National Housing Finance Corporation, said the entity is open to collaborating and partnering with unions on municipal and provinicial level. The current plan of the entity is to initiate the MOU in place with the PPRA to engage state agents to act as the channel to drive wide awareness about the programme. The entity also plans to embark on a national campaign, utilising all media platforms, via social media and cost effective methods like running radio advertisements. Furthermore, the entity has commenced an internal plan to take the programme to municipalities to aid the general public in applying and utilise the portal to route their applications. To enhance public knowledge about the programme, the entity will engage in workshops with various parties.

The Cosmopolitan Development’s main interest is selling of homes. A qualified home loan applicant gets payment, who, in turn, owes the bank. The process of vetting the risk profile of the applicant is vested within the bank, which informs the interest rate that will be charged to the end beneficiaries. The developers do not stand to benefit anything concerning interests that gets charged to the members. The intermediaries that assist with the application process do not benefit from the process as well because the payment is made directly to the bank that is granting the mortgage or through their lawyers in instances where deposits were required.

Ms Mayekiso noted that the efforts to reduce the 20th-year repayment period for mortgages are outside of the responsibility of the NHFC because it is not the grantors of the mortgages. Though with the intention to migrate the NHFC into Human Settlements Development Bank (HSDB), the new model will accommodate them to offer mortgages directly to the public if their mandate allows them to do that. It will be advised that the HSDB should grant more competitively priced mortgages than what the public gets from their banks. The business model will consider whether concessions can be made on interest rates charged to the public and the repayment period.

Mr Jabulani Fakazi, Grant Facilitation Executive, National Housing Finance Corporation, stated that the entity requires strategies for financial literacy programmes with consumer education to target potential first home beneficiaries before they become indebted. The role of the entity, Department and banks becomes critical in creating a win-win solution. Unfortunately, many employees are already indebted. Therefore, what needs to be recognised is that the lending takes place in the context of the initial creditors act. The entity plans to work together with public/private employers to put in systems to alleviate the pains of highly indebted employees. He suggested that a mechanism is put in place through a lender who can provide a consolidation loan to settle creditors and pay in monthly instalments. The risk with this mechanism is that the debt consolidation makes allowance for people to take non-house related loans. The informal business people can also benefit from it with their income being stated as they are also eligible to qualify for subsidies.

On the non-availability of collateral in rural areas, the NHFC has products provided by intermediaries to offer loans to them. The subsidies can thereby augment the loan that people have access to so that they can purchase their houses quicker and easier. The lenders perform an assessment as required by the initial Credit Act and regulations without any risks. Cases of rural people being indebted to banks rarely exist for more than 20 years, so has the seizure of houses by banks.

The Chairperson thanked everyone for their attendance and admonished the entities to keep up the good work so that the outcome would reflect in their annual reports.

The Deputy Minister expressed her gratitude to the Committee for their continued support towards the progress of the Ministry.

Committee Minutes

The meeting was adjourned.

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: