ATC210301: Report of the Portfolio Committee on Human Settlements, Water and Sanitation on the 2020/21 First Quarter Financial andNon-Financial Performance of the Department of Human Settlements, dated 26 February 2021

Human Settlements, Water and Sanitation

logoReport of the Portfolio Committee on Human Settlements, Water and Sanitation on the 2020/21 First Quarter Financial andNon-Financial Performance of the Department of Human Settlements, dated 26 February 2021

 

The Portfolio Committee on Human Settlements, Water and Sanitation, having considered the 2020/21 firstquarter report on the expenditure and performance of the Department of Human Settlements (the Department), reports as follows:

 

  1. Introduction

 

The Portfolio Committee on Human Settlements, considered the 2020/21 first quarter report of the Department on 06 November 2020. This report provides a reflection on the expenditure and non-financial performance of the Department by the end of the first quarter of the 2020/21 financial year. It also provides the Portfolio Committee’s key deliberations, observations, and recommendations. Those are based on the documents presented to the Portfolio Committee by the Department of Human Settlements, the Adjusted Estimates of National Expenditure (AENE)and section 32 report published by National Treasury.

 

  1. An overview of the overall expenditure: First Quarter

The main appropriation for the Department, for 2020/21, amounts to R31.3 billion. By the end of the first quarter, the Department spent R4.3 billion (13.7%) of this amount, which was R469.9 million (9.9%) less than the projected expenditure. This was mainly attributed to transfers that were not made to public entities (such as the Community Schemes Ombud Service and Housing Development Agency) in the Rental and Social Housing Programme, Affordable Housing Programme and the Integrated Human Settlements Planning and Development Programme.

 

  1. Expenditure and performance per program

A brief summary per programme is provided below:

 

  1. Programme 1 (Administration)

Expenditure under Programme 1 was R70.3 million, against a projected R105.5 million in the first quarter. Spending under this programme was therefore R35.3 million (33.4%) lower than projected. This was primarily due to lower than planned spending on goods and services due to the national lockdown. The lockdown restrictions required most employees to work from home and resulted in reduced economic activity. Expense requirements for goods and services for day-to-day operations of the Department were therefore reduced.

 

  • Target: Submission of financial statements and performance information on predetermined objectives for 2019/20 to AGSA - submission of financial statements and performance information on predetermined objectives for 2019/20 to AGSA was extended to 31 July 2020 as per National Treasury Instruction Note and the Department complied accordingly.
  • Target: 100% compliance with statutory tabling and prescripts target was partially achieved - 71% compliance with statutory tabling and prescripts. The following compliance was achieved:Monthly early warning system; Departmental Quarterly Performance Reports; Quarterly report on appearance before Parliament and Cabinet Committees; Quarterly report on Administrative support provided.The following activities were not achieved;Qualitative Assessments through submission of quarterly reports on the status of services provided and submissions to NARS and DOJCD; Valid invoices paid within 30 days.
  • Target: 15% implementation of the approved internal audit plan -target was achieved; 16% implementation of the approved internal audit plan.
  • Target: 100% of the approved anti-fraud and corruption implementation plan implemented - target was partially achieved; 89% of the Anti-fraud and Corruption Implementation Plan implemented during the performance period. 8 out of 9 activities were achieved.The following were the activities that were achieved: review of Anti-corruption strategy;conduction of Financial Disclosure for SMS members; verification of Financial Disclosure for SMS members; presentation of Anti-fraud and corruption awareness; promotion of whistle blowing policy; develop fraud risk Register; analyse reported cases and register the case; draft report on forensic investigations.The following activity was not achieved; Fraud and Ethics Monitoring tool not completed.
  • Target: 46% implementation of the approved risk management plantarget was achieved; 55% of the approved risk management plan implemented.Six out of eleven activities of risk management plan for the period under review were achieved which translates to 55% achievement exceeding the planned target with 9%.
  • Target: 100% implementation of the Annual Human Resource Implementation Plan -target was not achieved (not assessed- due to the fact that there is no approved 2020/21 HR Implementation plan to be used to measure performance).
  • Target: 1 report on the development of legislation as per approved legislative Programme – target was achieved; 1 report on the development of legislation as per approved legislative Programme. The progress status on the Bills for the period under review was as follows:Housing Consumer Protection Bill, 2019: Pursuant to the publishing of the bill for public comments including the information sessions, Department revised and updated the Bill accordingly; Human Settlements Development Bank Bill: The Department redrafted and updated the bill in accordance with the comments received from the National Treasury and the Office of the Chief State Law Adviser respectively.

 

 

  1. Programme 2 (Integrated Human Settlements Planning and Development)

Programme 2 had spent R4.168 billion in the first quarter against a projected spending of R3.9 billion. Spending under this programme was therefore R313.8 million (8.1%) higher than projected, due to higher transfer payments to provinces on the Human Settlements Development Grant.Despite the higher than projected spending, the Department has not transferred the Title Deeds Restoration Grant during the first quarter. This was due to provincial departments not submitting their business plans for approval. Operational transfers to the Community Schemes Ombud Service (CSOS) and the Housing Development Agency (HDA) were also not paid, as both entities still had to submit claims for their respective transfers. Claims submission, along with other measures, forms part of the financial management process requirements for transfer payments.

 

  • Target: Progress report on development of integrated implementation programmes for PDAs- target was achieved; progress report on development of integrated implementation programmes for PDAs submitted.The Department gazetted the 136 declared Priority Development Areas (referred to as Priority Human Settlements and Housing Development Areas (PHSHDAs) in the National Government Notice No. 43316 of 15 May 2020. The Draft Implementation Plan for putting together the Integrated Implementation Programmes for PDAs was developed and presented at the National Human Settlements Spatial Planning Forum Sessions.
  • Target: Revitalisation of distressed mining communities programme managed in 6 provinces -Target was achieved; A report on management of Revitalization of Distressed Mining Communities Programme in 6 provinces. Twenty-three (23) municipalities were supported by the Department to implement the approved business plans.
  • Target: Support provided to 9 provincial departments to register pre 1994title deeds - target was achieved; support provided to 9 provincial departments to register pre 1994 title deeds.
  • Target: Support provided to 9 provincial departments to register post 1994title deeds -target was achieved; support provided to 9 provincial departments to register post 1994 title deeds.
  • Target: Support provided to 9 provincial departments to register post 2014title deeds -target was achieved; support provided to 9 provincial departments to register post 2014 title deeds.
  • Target: Support provided to 9 provincial departments to register new title deeds(2019-2024 MTSF) target was achieved; support provided to 9 provincial departments to register new title deeds (2019-2024 MTSF).Support provided by the National Project Office to 9 provinces on the implementation of the Title Restoration Project.
  • Target: Three (3) provinces supported in the delivery of PHP/Zenzeleni policy - target was achieved; four (4) provinces (KZN, FS, EC, and GP) were supported in the delivery of PHP/Zenzeleni policy.The following activities were performed to support the delivery of PHP/Zenzeleni policy: assessment of approved Provincial Business Plans; delivery of PHP capacity development workshops to Provinces, Municipalities and Civil Society; engagement with PHP Sector Support agencies including Provinces, Municipalities and Civil Society; monitoring and evaluation of the implementation of the Programme in the Provinces; facilitating collaborations between the PHP stakeholders for best practice and to share lessons learned.
  • Target: 1 Research report on Integrated Human Settlement Planning and Development drafted- target was achieved; 1 Research report on Integrated Human Settlement Planning and Development drafted.
  • Target: 100% of projects under implementation monitored (HSDG, USDG and TRG) -target was partially achieved; 67% of projects under implementation monitored, in particular, HSDG and USDG. HSDG projects with expenditure were 1505 according to HSS Finance Milestone Report and were all monitored through the desktop exercise since the onsite monitoring could not be undertaken due to the Covid-19 challenges. USDG projects with expenditure are 460 and were all monitored through the desktop exercise since the onsite monitoring could not be undertaken due to the Covid-19 challenges. The monitoring of TRG was not done.
  • Target: 4 Conceptual Frameworks developed- target was partially achieved, there are draft Terms of references for the 4 conceptual frameworks.
  • Target: 100 % compliance with statutory tabling and prescripts-target achieved; 100 % compliance with statutory tabling and prescripts. Compliance with statutory tabling and prescripts included:submissions to the Minister for the approval of the initiation of the process for the appointment of the Board / Council of the HDA, SHRA, CSOS and the EAAB (PPRA), the Minister resolved to retain the current Council of the NHBRC and therefore the submission for the initiation of the process for the appointment of a new Council was no longer required.
  • Target: Assess the required sector capacity for the implementation of the integrated human settlements planning and development programme -target was not achieved; assessment on the required sector capacity for the implementation of the integrated human settlements planning and development programme was not done.Capacity Assessment was only done for Northern Cape, COGHTA due to national lockdown.
  • Target: Draft framework for partnering compacts coordinated - target was achieved; draft framework for partnering compacts was coordinated.Coordination included the following:cconsultation with stakeholders including sector departments, provincial and local government on the three implementation plans, the IGR, People Housing Process (Zenzeleni) and Innovation and Transformative Technologies.
  • Target: 3 Quarterly performance assessments conducted for Human Settlements Grants - target was partially achieved; 3 preliminary quarterly performance assessments conducted for Human Settlements Grants.

 

  1. Programme3 (Informal Settlements)

Programme 3 managed to spend only R8.5 million against the projected R249.8 million in the first quarter. Expenditure under this programme was therefore R241.3 million (96.6%) lower than projected, which was due to transfers not made to the Emergency Housing Fund. Transfers for this grant are only made when a request is made for funds, which meets the qualifyingcriteria. By 30 June 2020, the Department had not received any requests from provinces or municipalities.

 

  • Target: Management of the informal settlements programme in 9 provinces - target was partially achieved; management of the programme was not done as planned i.e. the quarterly Forum and oversight site visits were not done as planned. Instead the monitoring of programme performance based on approved business plans was carried out by convening Quarterly Informal Settlements Upgrading forum and projects oversight. This is mainly due to Covid-19 and restricted movement.The following activities were performed:Department engaged the provinces and metros on informal settlements upgrading projects in the 2020/21 financial year business plans;business plans for metros were also analysed;Department through the HDA took an initiative to de-densify the densely populated settlements within the nine provinces by constructing Temporary Relocation Units (TRU’s), resettling households to identified vacant land and moving households to makeshift tents.
  • Target: One Research report on Informal Settlement Upgrading drafted (Benchmark report - target was achieved; one Research report on Informal Settlement Upgrading drafted (Benchmark report).
  • Target: 100% of UISP projects under implementation monitored (HSDG and USDG) - target not achieved; UISP projects under implementation not monitored (HSDG and USDG) due to Covid-19 challenges.
  • Target: 1 UISP conceptual framework developed - target was partially achieved; UISP conceptual framework was not done, only the TOR’s were developed.
  • Target: Assess the required capacity for implementation social and rental housing programme - target not achieved; assessment on the required capacity for implementation social and rental housing programme was only for the Northern Cape, COGHTA thus the target not achieved.

 

  1. Programme 4 (Rental and Social Housing)

Programme 4 spent R37.9 million against the projected R407.2 million in the first quarter of 2020/21. The expenditure under this programme was therefore R369.3 million (90.7%) lower than projected, primarily due to two grant payments not being made, namely the Social Housing Regulatory Authority’s Consolidated Capital Grant, and the Institutional Investment Grant. The reason provided for the non-payment of grants, was the failure of the entity to adhere to financial management process requirements (failure to submit claims for payment).

 

  • Target: Rental and social housing programme managed in 9 provinces - targets were not achieved; rental and social housing programme was managed in 3 provinces (KwaZulu-Natal, Western Cape and Gauteng Province).
  • Target: Community residential units’ programme managed in 9 provinces - target was not achieved; Community residential units programme was not managed in all the provinces due to national lockdown.
  • Target: Benchmark Research report - target was achieved; Benchmark Research report was developed (CRU).
  • Target: 100% of Social and Rental Housing Projects under implementation monitored - target was achieved; 100% of Social and Rental Housing Projects under implementation monitored. The total number of subsidies planned for CRU, according to the approved business plan was 1044. All Provincial Departments managed to disburse 755 subsidies to Social and Rental (CRU) beneficiaries.
  • Target: 2 conceptual frameworks developed - target was partially achieved; Conceptual frameworks were not developed. Only the TOR’s were developed.
  • Target: 100% compliance with statutory tabling and prescripts - target was achieved; 100% compliance with statutory tabling and prescripts.The following activities were complied with: ssubmission for the appointment of the Board / Council for (SHRA), and the 4th quarter report of SHRA for the 2019/20 financial year was received and analysed.
  • Target: Assess the required capacity for implementation social and rental housing programme - target was not achieved; assessment on the required capacity for implementation social and rental housing programme was only for the Northern Cape, COGHTA thus the target not achieved.

 

 

 

 

 

 

  1. Programme 5 (Affordable Housing)

Spending under Programme 5 reached R11.1 million in the first quarter, against the projected spending of R148.9 million. This translates to spending that was R137.8 million (92.5%) lower than projected, due to the Finance-Linked Individual Subsidy (FLISP) transfers to the National Housing Finance Corporation not being paid. The transfers were not paid, as the entity failed to adhere to financial management process requirements (failure to submit claims for payment).

 

  • Target: 1 Research on affordable housing developed (Benchmark report)- target was achieved; benchmark report developed (Stokvel).
  • Target: 100% of FLISP subsidies disbursed monitored- target was achieved; 100% of FLISP subsidies disbursed monitored.The total number of subsidies planned for FLISP according to the approved business plan was 2 219. All Provincial Departments managed to disburse 763 subsidies to FLISP beneficiaries.
  • Target: 1 conceptual frameworks developed - target was partially achieved; 1 conceptual framework not developed. Only the Terms of reference were developed.
  • Target: Assess the required capacity for the implementation of the affordable housing programme -target not achieved, assessment on the required capacity for the implementation of the affordable housing programme was only done for the Northern Cape, COGHTA. Thus the target was not achieved.
  • Target: 100 % compliance with statutory tabling and prescripts - target was achieved; 100% compliance with statutory tabling and prescripts. The 4th quarter report of NHFC for the 2019/20 financial year was received and analysed.
  • Target: 1 performance assessment of FLISP conducted -target was partially achieved; the Department conducted preliminary performance assessment of FLISP during the period under review.

 

 

 

 

 

 

 

 

  1. Committee observations and Recommendations

 

The Portfolio Committee raised the following with the Department in respect of the first quarterly report for 2020/21:

 

  1. The Committee was concerned about underspending on personnel costs.The projected spending of R102 million personnel cost against R86.3 million at the end of the first quarter represented an underspending of R15.8 million, which was unacceptable.

Recommendation:

  • Ensure the spending of personnel cost by filling all vacant postsof the Department.

 

  1. The Committee observed that the Title Deeds Restoration Grant was not transferred due to the late submission of business plan by provinces, except the Western Cape.

Recommendation:

  • Assist provincial departments in compiling and submitting their business plans on time. Consequence management should be considered in cases of non-performance by Head of Departments (HODs). 

 

  1. The Committee observed that provinces and municipalities did not submit requests for emergency housing funds.

Recommendation:

  • Assist provincial departments and municipalities in submitting their requests for emergency housing funds. There should be training and education on various housing programmes for provincial departments and municipalities.

 

  1. The Committee observed that the Western Cape spent 100% of the USDG budget but performed at 21%. This could be a result of high level of land invasions or poor performance.

Recommendation:

  • Ensure that the spending of budgets is aligned to performance. Assist provincial departments to prevent land invasions and ensure consequence management for lack of performance.

 

  1. The Committee observed that human settlements were still build in peripheries, away from amenities.

Recommendation:

  • Develop a strategy to redress building human settlements in periphery of towns and cities.

 

  1. The Committee observed construction of houses was hampered by the hard lockdown in response to Covid-19. 

Recommendation:

  • There should be a lockdown recovery plan to ensure that delays in construction are rectified.

 

5.7.       The Committee noted that there several officials in the Department who were affected by Covid-19. This had implications in the performance of the Department.

Recommendation:

  • Provide the Committee with a list of officials affected by Covid-19 in the Department.

 

5.8.       The Committee observed that provinces,especially the Western Cape, only provide the list of people who have benefited from housing programmes. However, details such as race and gender are often omitted.  This does to assist the Committee in tracking the level of transformation in provinces.

Recommendation:

  • Provide the Committee with a report on housing beneficiaries. This report should include race and gender of housing beneficiaries in all provinces. This would assist the Committee to track transformation.

 

5.9.       The Committee observed that Department made adjustments to its annual plan due to Covid-19, but the details of these adjustments were not presented to the Committee.

Recommendation:

  • Present to the Committee the adjustments the Departmental annual plan due to Covid-19.

 

Report to be considered.

 

Documents

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