ATC230921: Report of the Portfolio Committee on Human Settlements on the 2022/23 Fourth Quarter Financial and Non-Financial Performance of the Department of Human Settlements, 21 September 2023

Human Settlements

Report of the Portfolio Committee on Human Settlements on the 2022/23 Fourth Quarter Financial and Non-Financial Performance of the Department of Human Settlements, 21 September 2023.

 

The Portfolio Committee on Human Settlements (the Committee), having considered the 2022/23 fourth quarter report on the expenditure and performance of the Department of Human Settlements (the Department), reports as follows:

 

 

1. Introduction

 

The Committee considered the 2022/23 fourth quarter report of the Department on 31 May 2023. This report provides a reflection on the expenditure and non-financial performance of the Department by the end of the fourth quarter of the 2022/23 financial year. It also provides the Committee’s observations and recommendations. Those are based on the documents presented to the Committee by the Department, the Adjusted Estimates of National Expenditure (AENE) and section 32 report published by National Treasury.

 

1. An overview of the overall expenditure: Fourth Quarter

The main appropriation of the Department for 2022/23 amounted to R33 024.7 billion, which was adjusted slightly upwards to R33 478.5 billion through the adjusted appropriation. By the end of the fourth quarter, the Department spent R32.9 billion or 98.1% of the available budget. There was an underspending of R621.1 million or 1.9%, mainly due to the partial transfer of the Provincial Emergency Housing Grant (PEHG) and lower than anticipated spending on goods and services.

 

3. Performance per expenditure

3.1 Programme 1 (Administration) expenditure

This Programme spent R482.5 million against the available budget of R513.9 million. The preliminary underspending of R31.3 million or 6.1% was mainly due to lower than anticipated expenditure on compensation of employees and capital assets. There were delays in filling vacancies, procuring computers, and replacing ICT network equipment.

 

3.2 Programme 1 performance

The following was programme performance:

• 100% compliance with statutory prescripts - 80% compliance with statutory prescripts. Some of the furnished Draft Replies had to be returned for amendments, including incomplete information provided by municipalities and provinces.
• 100% implementation of the approved internal audit plan - 100% implementation of the approved internal audit plan.
• 100% implementation of the approved Risk Management Implementation Plan - 100% implementation of the approved Risk Management Implementation Plan.
• 100% execution of the approved anti-fraud and corruption implementation plan - 100% execution of the approved anti-fraud and corruption implementation plan. 
• 100% implementation of the Human Resource Implementation Plan - 100% implementation of the Human Resource Implementation Plan.
• 100% implementation of the approved annual ICT plan - 100% implementation of the approved annual ICT plan.
• 100% implementation of the approved communication plan - 100% implementation of the approved communication plan.
• 2023/24 Human Settlements Grants Framework Approved - Approved 2023/24
  Human Settlements Grants Framework.
•  1 quarterly assessment conducted on Human Settlements Grant (HSDG) - 1 quarterly assessment conducted on Human Settlements Grant.
• 1 quarterly assessment conducted on Human Settlements Grant (USDG) – 1 quarterly assessment conducted on Human Settlements Grant.
• 1 quarterly financial performance analysis conducted on ISUPG for Provinces - 1 quarterly financial performance analysis conducted on ISUPG for Provinces.
• 1 quarterly financial performance analysis conducted on ISUPG for Metros - 1 quarterly financial performance analysis conducted on ISUPG for Metros.

 

3.3 Programme 2 (Integrated Human Settlements Planning Development) expenditure

This Programme spent R22 billion against the available budget of R22.1 billion. This programme recorded an under-expenditure of R79.7 million or 0.4%, which was mainly due to lower than anticipated expenditure on goods and services such as consultants and computer services. The under-expenditure was also attributed to delays in the recruitment process for the appointment of professional services and delays in procuring of computer equipment for staff within the programme.

 

3.4 Programme 2 performance

The following was programme performance:

• 1 report on the total human settlement’s allocation in PDAs - 1 analysis report on the total Human Settlements allocation in PDAs was completed, however sector investments could not be verified. The sector investment data could not be verified against a credible source.  
• 1 report on integrated implementation programmes for priority development areas completed per year - 1 report on integrated implementation programmes for priority development areas completed per year.
• 1 analysis report completed on land acquired during 2014-2019 within PDA’s rezoned - 1 analysis report completed on land acquired during 2014-2019 within PDA’s rezoned however, the rezoning was not achieved.
• 3 research reports completed - 2 research reports completed, report on exploration of indigenous knowledge systems and alternative technology in the provision of Enhanced Peoples Housing Process in the rural South Africa and the research report on the extent of housing support provided to beneficiaries of 1996.
• Policy Foundation for Housing and Human Settlements developed - Policy Foundation for Housing and Human Settlements developed.
• Procurement Policy for housing and Human Settlements developed - Procurement Policy for housing and Human Settlements developed.
• 1 Policy Programme on Upgrading of Informal Settlements developed - 1 Policy Programme on Upgrading of Informal Settlements developed.
• Rent to Buy Policy Programme developed - Rent to Buy Policy Programme developed.
• Small Scale Rental Policy Programme developed - Small Scale Rental Policy Programme developed.
• Reformed Social Housing Policy Programme developed - Reformed Social Housing Policy Programme developed.
• Consumer and Borrower Education Policy Programme developed - Consumer and Borrower Education Policy Programme developed.
• 1 Report on projects monitored as per approved business plans - 1 Report on projects monitored as per approved business plans.
• 1 Report on blocked projects monitored - 1 Report on blocked projects monitored.
• 1 Report on the monitoring of MTSF Sector Indicators - 1 Report on the monitoring of MTSF Sector Indicators.
• Evaluation studies completed: Implementation evaluation of the Operational Capital Programme (OPSCAP) - Draft report on Evaluation study completed: Implementation evaluation of the Operational Capital Programme (OPSCAP).
• 1 Design and implementation for ISUPG evaluation study completed - 1 Design and implementation for ISUPG evaluation study not completed. The draft Inception report was done. Late appointment of the service provider.
• 1 report on intergovernmental relations programmes implemented - 1 report on intergovernmental relations programmes implemented.

 

3.5 Programme 3 (Informal Settlements) expenditure

This Programme spent R8.9 billion against the allocated budget of R9.4 billion. The under-expenditure of R441 million or 4.7% was mainly due to the partial transfer of the PEHG, which was only disbursed when there were qualifying and approved applications. From the available budget of R795.8 million, only R426.2 million or 53.6% was transferred.

 

3.6 Programme 3 performance

The following was programme performance:

• Support provided to 9 Provinces and 8 Metros for planning in the upgrading of informal settlements – 9 Provinces and 8 Metros were supported for planning in the upgrading of informal settlements through the assessment of the draft Provincial business plans and giving feedback to provinces, however all provincial business plans were not approved by the National Department. Monitor and report progress of informal settlements upgrading projects in 9 Provinces and 8 Metros.
• Monitor and report progress of informal settlements upgrading projects in 9 Provinces and 8 Metros - Informal settlements upgrading projects in 9 Provinces and 8 Metros were monitored. Report on progress of informal settlements upgrading projects prepared.

 

3.7 Programme 4 (Rental and Social Housing) Expenditure

This Programme spent R906.9 million against the appropriated budget of R962.8 million. The under-expenditure of R55.9 million or 5.8% was attributed to lower than anticipated expenditure on goods and services emanating from delays in appointing professional services to augment skills and capacity within the programme.

 

 3.8 Programme 4 Performance

The following was programme performance:

• National Rental Housing Plan developed - National Rental Housing Plan developed.

 

 

 

3.9 Programme 5 (Affordable Housing Programme) Expenditure

This Programme spent R581.9 million against the approved allocation of R595.1 million. An under-expenditure of R13.2 million or 2.2% was mainly due to lower-than-expected spending on the Department’s scholarship program and various goods and services items such as consultants, travel, and subsistence.

 

3.10 Programme 5 performance

The following was programme performance:

• 6 affordable housing programme agreements for mining communities developed – 2 affordable housing programme agreements for mining communities developed. The Department did not have the additional capacity to achieve the target.
• 1 Quarterly Report on title deeds registered - 1 Quarterly Report on title deeds registered not completed.
• National Unblocking Programme (NUP) developed - National Unblocking Programme (NUP) developed.
• 1 Quarterly Report on the number of job opportunities created - 1 Quarterly Report on the number of job opportunities created but not completed. No standardized format to collect data for jobs created.

 

4. Committee observations and recommendations

The Committee raised the following with the Department in respect of the fourth quarterly report for 2022/23:

 

4.1 Observation: Welcomed improvements by the Department in filling vacancies of all Head of Departments (HOD) positions, involving women contractors in human settlements construction, reducing the title deeds backlog, and the achievement of 51% to 71% performance.

 Recommendation: Maintain good performance in all areas of human settlement’s development. Strive to achieve 100% performance in the future. Award individuals to who positively contribute to the image of the Department.

 

4.2 Observation: Noted the appointment of the Policy and Legislative Review Team (POLERT) and its work in reviewing human settlements programmes such as township establishments, rental policy, alternative building technology, Agri-builders, etc. The Committee expressed a need for the Department to present to the Committee the achievements of POLERT to evaluate its usefulness.

Recommendation: Provide the Committee with a report on the work done by POLERT in the review of human settlements programmes. Furthermore, more information about the policy must be shared with the Committee on land acquisition, title deed process and mining towns. This report must be submitted to the Committee within a month after the adoption of this report.

 

4.3 Observation: Expressed concern about unfinished and unoccupied houses in provinces and municipalities. This resulted in these houses being vandalised and stealing of building materials. An example of 11 000 unfinished houses in Free State was put forward. However, the Committee acknowledges the commitment by the Department to deal with unfinished houses.

Recommendation: Develop strategies and measures to understand the magnitude of the problems. Develop on-site safety plans to curb theft of building materials. The Department must fast-track the development of the indicated plans and strategies.

 

4.4 Observation: Concerned about corrupt practice where municipal officials were alleged to be bribed by prospective beneficiaries to move up on the beneficiary list. This was a problem in Fleuhof and Dube.

Recommendation: Provide evidence on the corruption allegations. Refer this matter to a department that has a mandate to deal with corruption. Fast-track the upgrading and the digitalization of the beneficiary list to deal with corruption. Ensure that municipal beneficiary lists are tabled as Council resolution to prevent manipulation.

 

4.5 Observation: noted the allegations of corruption of NHBRC inspectors in approving poorly constructed houses to solicit bribes.

Recommendation: Investigate these allegations and provide a report to the Committee once the investigation has been completed. In addition, lifestyle audits should be conducted on housing inspectors.

 

4.6 Observation: Noted the slow pace in the Department’s responses to Members questions. This affected Members work in their constituencies.

Recommendation: Ensure that Members’ questions are responded to on time to assist them with their constituency work.

 

4.7 Observation: Concerned about poor performance in the Free State Provincial Department of Human Settlements.

Recommendation: The Minister should visit the Provincial Department to develop capacity and skills to assist the province. Additionally, Minister is encouraged to assist with providing technical skills to assist the provinces.

 

4.8 Observation: Concerned about poor expenditures on goods and services and the payment of capital.

Recommendation: Develop a clear plan to intervene to fully utilise allocated funds.

 

4.9 Observation: Concerned that there were still projects that were not integrated to economic activities.

Recommendation: Use the District Development Model (DDM) to ensure integrated planning.

 

4.10 Observation: Noted improvements by the Department in awarding contracts to women contractors. However, the Committee felt that more can be done to involve women contractors. That in some cases women contractors were often given sub-contractor work.

Recommendation: Provide a breakdown of contracts awarded to women, youth, and persons with disabilities. These contracts should have a notable economic value for women.

 

Report to be considered.