ATC231208: Report of the Portfolio Committee on Human Settlements on the 2023/24 Second Quarter Financial and Non-Financial Performance of the Department of Human Settlements, 08 December 2023

Human Settlements

Report of the Portfolio Committee on Human Settlements on the 2023/24 Second Quarter Financial and Non-Financial Performance of the Department of Human Settlements, 08 December 2023

 

The Portfolio Committee on Human Settlements (the Committee), having considered the 2023/24 second quarter report on the expenditure and performance of the Department of Human Settlements (the Department), reports as follows:

 

 

1. Introduction

 

The Committee considered the 2023/24 second quarter report of the Department on 29 November 2023. This report provides a reflection on the expenditure and non-financial performance of the Department by the end of the second quarter of the 2023/24 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 the National Treasury.

 

1. An overview of the overall expenditure: Second Quarter

Total expenditure in 2022/23 was R32.9 billion, 98.1% of the adjusted appropriation for the year. Mid‐year expenditure in 2022/23 was R14.1 billion, 42.2% of the adjusted appropriation, whereas expenditure in the first half of 2023/24 was R13.6 billion, 42.8 % of the adjusted appropriation of R31.8 billion. Compared to the first half of 2022/23, expenditure over the same period in 2023/24 decreased by R539.5 million, 3.8%. This was mainly due to delayed transfers because of the late approval of business plans for the informal settlements upgrading partnership grant and the urban settlements development grant.

 

Mid‐year revenue in 2022/23 was R474 000, 73.4% of the adjusted estimate, whereas revenue for the first half of 2023/24 was R546 000, 50% of the adjusted estimate of R1.1 million. Compared to the first half of 2022/23, revenue over the same period in 2023/24 increased by R72 000, 15.2%, mainly due to an increase in the recovery of debt.

 

Adjustments due to significant and unforeseeable economic and financial events, Cabinet approved reductions of R3.184 billion to the Department’s baseline, of which:

• R15 million was in Programme 1: Administration.

• R2.267 billion was in Programme 2: Integrated Human Settlements Planning and Development.

• R828.815 million was in Programme 3: Informal Settlements Upgrading and Emergency Housing.

• R47 million was in Programme 4: Rental and Social Housing.

• R26.588 million was in Programme 5: Affordable Housing.

 

3. Programme performance

3.1 Programme 1 Performance

The following was programme performance:

• 100% compliance with statutory prescripts - 100% compliance with statutory prescripts.
• 35% implementation of the approved internal audit plan - 38% implementation of the approved internal audit plan.
• 100% execution of the approved anti-fraud and corruption implementation plan - 100% execution of the approved anti-fraud and corruption implementation plan. 
• 56% implementation of the approved Risk Management Implementation Plan - 56% implementation of the approved Risk Management Implementation Plan.
• 100% implementation of the Human Resource Implementation Plan - 88% implementation of the Human Resource Implementation Plan. 12% of the Human Resource Implementation Plan was not executed (non-filing of vacant prioritized post).
• 50% implementation of the approved annual ICT plan - 50% implementation of the approved annual ICT plan.
• 50% implementation of the approved communication plan - 50% implementation of the approved communication plan.
• SLA on Digital Transformation Strategy and Implementation Plan developed - Terms of Reference not approved. Deviation was because there were no approved Terms of Reference.
• 50% implementation of the approved communication plan - 50% implementation of the approved communication plan.
• 2022/23 unqualified audit opinion with no material findings - 2022/23 unqualified audit opinion with no material findings.
• 1 report on monitoring of set aside for the designated groups (USDG and HSDG) - 1 report on set aside for the designated groups (USDG and HSDG was submitted however monitoring was not conducted in six metros. Deviation was because no performance information was received for six metros.
• 1 quarterly assessment (1st quarter of 2023/24 financial year) conducted on HSDG performance - 1 quarterly assessment conducted on HSDG performance.
• 1 quarterly assessment (1st quarter of 2023/24 financial year) conducted on ISUPG performance - 1 quarterly assessment conducted on ISUPG performance.
• 1 quarterly assessment (4th quarter of 2022/23 financial year) conducted on USDG performance – 1 quarterly assessment conducted on USDG performance.
• 1 quarterly assessment (1x 4th quarter of 2022/23 financial year) conducted on ISUPG performance - 1 quarterly assessment conducted on ISUPG performance.

 

3.2 Programme 2 Performance

The following was programme performance:

• 1 report on monitoring the development of integrated implementation programmes for PDAs - 1 report on monitoring the development of integrated implementation programmes for PDAs.
• 1 report on monitoring Human Settlements allocations to PDAs - 1 report on monitoring Human Settlements allocations to PDAs.  
• 1 report on monitoring rezoning of land acquired within PDAs during 2014-2019 - 1 report on monitoring rezoning of land acquired within PDAs during 2014-2019.
• 2023/24 metros business plans assessed - 2023/24 metros business plans assessed.
• Consultation report on the review of the 2019-2024 MTSF - Consultation report on the review of the 2019-2024 MTSF.
• Draft Policy programme - Draft Policy programme developed.
• Draft research agenda - Draft research agenda developed.
• 1 report on monitoring entities performance - 1 report on monitoring entities performance produced.
• 1 Report on monitoring of projects as per approved business plans - 1 Report on monitoring of projects as per approved business plans developed.
• 5 intergovernmental relations programmes implemented - 12 intergovernmental relations programmes implemented. An additional 7 intergovernmental relations programmes were implemented.
• Monitoring Progress of informal settlements upgrading projects in 9 Provinces and 8 Metros - Monitoring Progress of informal settlements upgrading projects in 9 Provinces and 8 Metros conducted.

 

3.3 Programme 3 Performance

The following was programme performance:

• Monitoring Progress of informal settlements upgrading projects in 9 Provinces and 8 Metros - Progress of informal settlements upgrading projects in 9 Provinces and 8 Metros monitored.

 

 

 

 3.4 Programme 4 Performance

The following was programme performance:

• 1 report on the monitoring of the Rental Housing programme - 1 report on the monitoring of the Rental Housing programme.
• 1 report on the monitoring of the CRUs programme - 1 report on the monitoring of the CRUs programme.

 

3.5 Programme 5 performance

The following was programme performance:

• 1 quarterly report on monitoring title deeds registered - 1 quarterly report on monitoring title deeds registered.
• 1 quarterly report on monitoring of 320 blocked projects across 9 provinces - 1 quarterly report on monitoring of 320 blocked projects across 9 provinces was submitted, but no POE for progress report on the updating of the Housing Subsidy System.
• 1 report on monitoring the delivery of BNG units - 1 report on monitoring the delivery of BNG units.
• 1 report on monitoring the delivery of Serviced sites - 1 report on monitoring the delivery of serviced sites not finalized. POE not submitted.
• 1 report on monitoring of households that received financial assistance through FHF or FLISP - 1 report on monitoring of households that received financial assistance through FHF.
• 1 quarterly report on monitoring job opportunities created - 1 quarterly report on monitoring job opportunities created.
• 1 report on monitoring the eradication of asbestos roofs - 1 report on monitoring the eradication of asbestos roofs.
• 1 report on monitoring the eradication of uninhabitable mud houses - 1 report on monitoring the eradication of uninhabitable mud houses.

 

4. Committee observations and recommendations

The Committee raised the following with the Department in respect of the second quarterly report for 2023/24:

 

4.1 Observation: Appreciated the overall second quarter performance by the Department which stood at 86%, with 14% of targets not achieved. Out of 35 targets pursued, 30 were achieved, and five were not. In addition, overachievement was noted in the Intergovernmental Relations Programme. The Committee edged the Department to maintain good performance in the coming performance cycles.

Recommendation: Maintain good performance and reward employees who contribute positively to in the Department.

 

4.2 Observation: noted the optimism in the Departments’ strategy to address the issuance of title deeds. The Committee also welcomed the Title Deeds Friday Initiative by MinMec. However, the Committee remained concerned about the backlog in the issuance of title deeds.

Recommendation: Improve the performance of the title deeds programme and the utilization of the informal settlements upgrading programme. Maximize the Title Deeds Friday Initiative and address other challenges affecting the programme.

 

4.3 Observation:  Concerned about progress on informal settlements upgrading partnership grant.

Recommendation: Develop strategy to overcome challenges preventing progress in the grant and present it to Committee in the next quarter.

 

4.4 Observation: Noted efforts by the Department in addressing the 40% set aside challenge, such as establishing a task team to address procurement delays, policy inadequacies, and transformation issues related to this allocation.

Recommendation: Ensure close monitoring of Provinces and Metros with a particular focus on underspending Provinces to utilise funds by the end of the fiscal year. Furthermore, the Department should address procurement challenges and transformation challenges at provincial level. Improve follow-up processes and intergovernmental relations within the sector. Submit the consequence management process applied to underspending Provinces and Metros within 3 months after the adoption of this report.

 

4.5 Observation: Noted positive reporting by Entities in relation to plan submission and target achievement. However, the Committee was concerned about challenges faced by first-time homebuyers such as rejection by financial providers.

Recommendation: Furnish the Committee with a plan to assist individuals or prospective beneficiaries who are under debt review. Ensure that beneficiaries experience a smoother home buying process.

 

4.6 Observation: Noted with concern budget cuts in all programmes of the Department which has implications for the Department.

Recommendation: Ensure the effective utilization of limited resources. Prevent wasteful and irregular expenditure.

 

4.7 Observation: Welcomed the filling of senior management positions, but the Committee still concerned about the backlog. The Committee strongly emphasising the importance of addressing unemployment rates in the country.

Recommendation: Fast-track the filling of remaining vacancies to address the unemployment problem in the country.

 

4.8 Observation: Noted efforts by the Department to training and education through scholarship programme. However, more information was requested by the Committee.

Recommendation: Maintain and improve efforts in the training and education development. Provide the Committee with a report on the scholarship programme a month after the adoption of this report.

 

 

Report to be considered.