The Gauteng and Northern Cape Departments of Housing presentations focused largely on their allocations in relation to actual spending, delivery and monitoring.
The Gauteng Department assured the Committee that there were plans to spend exactly what had been allocated. The Committee asked what impact the constant migration in this province had, and asked what plans there were to pass responsibility over to municipalities. The Committee commended the Gauteng Department for retaining the responsibility of housing delivery as opposed to passing it on to municipalities who lacked capacity.
Ms R Soodeyal, Executive Manager: Housing- Northern Cape Department of Housing, read through the presentation document, which focused on the following areas:
Allocation against Actual Expenditure, housing delivery during 2006/0, allocations against targets 2007/08, planned delivery, and drawdowns against expenditure. The targets against delivery, performance Measures- Quarter 1 to 3, delivery per District, performance Measures per Region- Quarter 1 to 3, analysis and monitoring were also outlined.
The Chairperson referred to the slide on housing delivery during 2006/07 and asked whether the projects were aligned with the Integrated Development Plans (IDPs).
Ms Soodeyal responded that while some projects were aligned with IDPs, many were not and that remained a huge challenge. The Department had however put in place mechanisms to ensure such alignment for 2008. The priority had been the completion of blocked projects, although one of these had not been completed and would therefore spill over into 2008.
The Chairperson referred to the slide on ‘Drawdowns vs Expenditure’. He asked why there were fluctuations from month to month. He also asked whether this was due to poor planning.
Ms Soodeyal replied that there were cases where projects were just being completed. There were also cases in which projects had, for whatever reason, stood still. Overall, the Department’s spending was on track in this area.
The Chairperson asked how the procurement problem was responsible for the low expenditure during the first quarter.
Ms Soodeyal answered that the municipalities had opted to be the developers in this province. The process involved the drafting of business plans, tendering and submission of specifications, which resulted in the delay of the procurement process. The Department had learned from this. The Department had to take over from municipalities in some cases where the procurement process had been delayed within the municipalities.
The Chairperson argued that there should not be the option of giving municipalities the money to build houses. This should remain the responsibility of the Department until the municipalities had capacity to deliver.
The Chairperson asked what risks there were if the Department were to receive the R100 million they were requesting, and what would be the situation if it did not receive this money. He asked if the Department had received any written undertaking from the National Government to ensure that they would in fact receive this money.
Ms Soodeyal responded that if the Department were to receive the money now there could be the risk that it would not be able to implement projects immediately. The Department had however already started the processes of implementing projects in order to reduce this risk. There was sufficient written evidence that National Government would provide this money to the province. The MEC had written to the Minister requesting this amount. Undertakings had been made during MinMEC discussions. In addition the Minister had announced that the Department would be receiving this sum from National Government.
The Chairperson did not understand why the Department kept saying that it had exhausted all the resources during the past financial year, when a Department official had, during a visit to the
Ms Soodeyal said that she too wished to know the person’s name. It was not possible for the official to simply add projects to the Department’s workload, since the budgetary allocations had been done during the previous financial year. Although the buffer strip was very important for the 2008 financial year, it had not been listed as a priority during the previous year.
Gauteng Department of Housing presentation
Mr A Green, Chief Financial Officer- Gauteng Department of Housing, read through portions of the presentation document, which focused on outcomes of the audited report of 2006/07 and the Department’s plans to address shortcomings, the data on trends in allocations, transfers and actual expenditure of conditional grants and capital expenditure, the monitoring capacity for the financial year 2007/08, the spending/ overspending and capacity constraints and monthly reports received from receiving departments or municipalities. He noted that the Department was exactly on track with spending and that there had been an unqualified audit opinion on the vote, with an emphasis of matter around the auditing of assets and restatement of the comparisons for 2005/06. On the housing fund, there was a qualified audit opinion, but he detailed the action plan that would address the shortcomings identified. There had been over expenditure on remedial work in terms of rectification and regularization programmes, based on fast-tracking of delivery.
The Chairperson expressed his approval of the content of the presentation.
Ms D Robinson (DA) agreed, emphasising that there were positive and effective monitoring and capacity building initiatives.
The Chairperson asked what the reasons were for the over- or under spending in the respective quarters.
Mr Green responded that firstly, the Department had developed a strategy in terms of which it could maximize its arrangement with established developers to assist them via Public Private Partnerships (PPPs). In terms of these arrangements the developers would take on the majority of the risk of construction within a given financial year, after which the Department would buy back the product during the following financial year. This would continue until budgetary allocations were increased. Secondly, spending in the final quarter could be attributed to the public services strike. Since payment had been submitted to Gauteng Shared Service Centre (GSSC) for processing, it only took place after the strike and this had a knock-on effect for the Department. In addition, the Department proceeded with projects on the strength of additional funding promised by the National Government.
The Chairperson asked what risks there were in the event of the Department either over- or under-spending. He asked what plans the Department had to deal with either situation.
Mr Green assured the Committee that there were plans to spend every cent allocated to the Department (including the R200 million requested from the National Government). There was a drive within the Department not to overspend and he could therefore assure the Committee that this would not occur.
The Chairperson referred to the fact that people were constantly migrating to and from
Ms Manching Monama, Head of Gauteng Department of Housing, replied that this had not been dealt with formally as yet, but had been raised informally. The focus had thus far been on housing in terms of the Reconstruction and Development Programme (RDP), which was not appropriate in the case of migrant workers because receipt of such a house in one province would preclude the person from applying in another province. The preferred approach should involve considering the needs of the individual in order to best accommodate them.
The Chairperson noted that the presenter had spoken well of the Gauteng Shared Services Centre despite the fact that other Departments complained regularly about late payments. The Committee was in fact planning to ask GSSC to address them.
Mr Green responded that the Department had had problems with the GSSC in the past. However these had been addressed by the introduction of a service level agreement between the Head of Department and the Chief Executive Officer of GSSC. GSSC had up scaled their capacity and employed temporary staff when necessary. Although there were still problems, they no longer involved payment issues.
Ms Monama added that the Department did send feedback through to GSSC whenever there was a dip in the standard of service. This served as a system of peer review.
The Chairperson commended the Department for retaining the responsibility of housing delivery within the Department instead of passing it on to municipalities. However the potential did exist for this function to be passed on to municipalities once capacity had been established. He asked what the Department was doing to ensure that this happened and that large municipalities could obtain accreditation.
Mr Green responded that this was being piloted in the Ekhuruleni municipality and the same was taking place in Tswane and
The Chairperson expressed approval that the Gauteng Department did not foresee under spending, as was the case in
He asked the presenters if they suggested that he should contact the National Department to ensure that they committed to the additional allocation which had been promised to the
He felt that it would be preferable to take money from the provinces that were not yet ready to spend it and give it to those that were. This should be done at the beginning of the financial year. He felt that it was a good idea for the provincial departments to be present at the briefing by the National Department of Housing (to be held on 5 February 2008).
The meeting was adjourned.
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