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ATC240318: Report of the Portfolio Committee on Human Settlements on the 2023/24 Third Quarter Financial and Non-Financial Performance of the Department of Human Settlements, 13 March 2024.

Human Settlements

Report of the Portfolio Committee on Human Settlements on the 2023/24 Third Quarter Financial and Non-Financial Performance of the Department of Human Settlements, 13 March 2024.

 

The Portfolio Committee on Human Settlements (the Committee), having considered the 2023/24 third 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 third quarter report of the Department on 28 February 2024. 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 key deliberations, observations, and recommendations. Those are based on the documents presented to the Portfolio 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 performance: Third Quarter

The Department spent R23.4 billion (73.7%) of the available budget of R31.8 billion. This spending was R118.7 million (0.5%) higher than projected on transfers and subsidies (R167 million), and goods and services (R700 thousand). This was mainly due to higher than anticipated conditional grant transfers in programme 2 (the Integrated Human Settlements Planning and Development) and the costs incurred for the publication of the Human Settlements Guide, respectively.

 

However, higher than projected spending of R118.7 million was partially offset by lower than projected spending on Compensation of Employees (CoE) and payments for capital assets. The lower than projected spending on the CoE amounting to R12.6 million was due to the non-renewal of expired contracts for the 19 employees who had left the Department and the slow filling of vacant posts (107 vacant posts). The lower than projected spending on payments for capital asset was attributed to the Emergency Housing Grant which can only be expended when there are qualifying and approved applications.

 

 

 

  1. Expenditure per programme

This section covers the performance of each programme in the Department. Performance per programme is presented in thematically as programme expenditure and programme performance:

 

  1. Programme 1 Expenditure (Administration)

Spending under this Programme reached R405.7 million against a projection of R353.5 million. This over-expenditure of R52.1 million or (14.7%), was on account of higher than planned expenditure on operating payments for the printing and publication fees of the newly developed Human Settlements Guide.

 

  1. Performance: Programme 1

The following was programme performance:

  • Target: 100% compliance with statutory prescripts - 50% compliance with statutory prescripts (Quarter 2 Departmental performance report), 1 invoice submitted late for payment due to lack of supporting documentation.
  • Target: 100% implementation of the approved internal audit plan - 56% implementation of the approved internal audit plan.
  • Target: 100% execution of the approved anti-fraud and corruption implementation plan - 67% of the approved anti-fraud and corruption implementation plan. 33% of the approved anti-fraud and corruption implementation plan: lifestyle review, anti-fraud and corruption awareness campaign to employees were not conducted.
  • Target: 75% implementation of the approved Risk Management Implementation Plan - 75% implementation of the approved Risk Management Implementation Plan.
  • Target: 100% implementation of the HR Implementation Plan - 100% implementation of the Human Resource Implementation Plan.
  • Target: 100% implementation of the approved annual ICT plan - 75% implementation of approved annual ICT plan.
  • Target: SLA on Digital Transformation Strategy and Implementation Plan developed - Appointment of the service provider (Digital Transformation Strategy and Implementation Plan) not done. The service provider was not appointed.
  • Target: 100% implementation of the approved communication plan - 75% implementation of the approved communication plan.
  • Target: Draft 2024/25 Human Settlements Grants Framework Approved - Draft 2024/25 Human Settlements Grants Framework.
  • Target: 1 report on monitoring of set aside for the designated groups (USDG and HSDG) - 1 report on monitoring of set aside for the designated groups.
  • Target: 1 quarterly assessment (1x 2nd quarter of 2023/24 financial year) conducted on HSDG performance - 1 quarterly assessment conducted on HSDG performance.
  • Target: 1 quarterly assessment (1x 2nd quarter of 2023/24 financial year) conducted on ISUPG performance -   1 quarterly assessment conducted on ISUPG performance.
  • Target: 1 quarterly assessment (1x 1st quarter of 2023/24 financial year) conducted on USDG performance - 1 quarterly assessment conducted on USDG performance.
  • Target: 1 quarterly assessment (1x 1st quarter of 2023/24 financial year) conducted on ISUPG performance - 1 quarterly assessment conducted on ISUPG performance.

 

3.2 Programme 2 Expenditure (Integrated Human Settlements Planning and Development)

This Programme spent R16 billion against a projection of R15.2 billion. Spending was R750.6 million (4.9%) more than projected was due to higher than anticipated conditional grant transfers. The monthly Human Settlements development grant and quarterly urban settlements development grant transfer payments were both adjusted upwards to align with the latest approved payment schedule for each grant.

 

3.2.1 Performance: Programme 2

The following was Programme performance:

  • Target:  SEIAS Phase I submitted to presidency - SEIAS Phase 1 submitted to Presidency.
  • Target:  2019-24 MTSF reviewed - 2019-24 MTSF Reviewed.
  • Target:  Consultation Report on the development of the 2025-2030 MTSF - Consultation report on the development of 2025-30 MTSF.
  • Target: 1 report on monitoring entities’ performance - 1 report on monitoring entities performance.
  • Target: 1 Report on monitoring of projects as per approved business plans - 1 Report on monitoring of projects as per approved business plans.
  • Target: Draft Evaluation Report completed: Design and Implementation evaluation of the Priority Human Settlements and Housing Development Areas Programme (PHSHDA) - The Draft Evaluation Report completed: Design and Implementation evaluation of the PHSHDA was not completed. The consultation process on the evaluation to be done took longer than expected.
  • Target: 4 intergovernmental relations programmes implemented - 14 intergovernmental relations programmes implemented.

 

  1.  Programme 3 (Informal Settlements Upgrading and Emergency Housing)

Under Programme, the Department spent R6 billion against a projection of R6.2 billion, with spending therefore being 3.9% lower than projected (preliminary underspending of R242.5 million). This was predominantly attributed to less than planned transfers against the Provincial Informal Settlements Upgrading Partnership Grant. This included the Programme variance which was attributed to emergency housing allocations. It was not possible to predetermine projected expenditure for the capital allocation, as spending was initiated by the occurrence of emergency housing incidents.

 

Despite the provisional expenditure projections, expenditure against the emergency housing capital allocation can only occur when there were qualifying and approved emergency housing applications. Given the above, only R42.2 million of the R523.3 million annual allocation was spent in the first three quarters of 2023/24.

 

In addition to this, by the end of December 2023, the Department spent R322 079 against the projected R7.1 million of the emergency housing support allocation that was earmarked for developing disaster risk reduction and mitigation strategies in the sector.

 

3.3.1 Performance: Programme 3

The following was Programme performance:

  • Target: Assessment of draft of Business Plans received from 9 Provinces - Assessment of draft Business Plans received from 9 Provinces.
  • Target: 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.
  • Target: 1 report on the monitoring of the Rental Housing programme - 1 report on the monitoring of the Rental Housing programme.
  • Target: 1 report on the monitoring of the CRUs programme - 1 report on the monitoring of the CRUs programme.

 

  1. Programme 4 (Rental and Social Housing)

Spending under this Programme stood at R490.6 million against a projection of R916.9 million. Spending was R426.3 million (or 46.5%) lower than projected mainly due to the delayed transfer of the Social Housing Regulatory Authority’s consolidated capital grant in the Third Quarter. The Quarter transfers scheduled for November and December 2023 were delayed considering in-year budget reductions that had an impact on the entity’s annual allocation.

 

3.4.1 Performance on Programme 4

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.
  • 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.

 

3.5 Programme 5 (Rental and Social Housing)

Spending under this Programme reached R528.9 million against a projection of R544.2 million. In this programme, the total spending was R15.3 million (2.8%) lower than projected primarily due to less than anticipated spending on the consultants’ budget. Underspending on the appointment of professional resource teams was because of the in-year budget reductions and delays in procurement and supply chain management processes.

 

3.5.1 Programme 5

The following was programme performance:

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

 

4. Committee observations and recommendations

The Portfolio Committee raised the following with the Department in respect of the third quarterly report for 2024/25:

 

4.1   Observation: Concerned about the general situation in the municipalities (The political instability of the coalition governments) which results in the delayed delivery services.

Recommendation: Consider mechanisms to strengthen the District Development Model (DDM) in collaboration with other spheres of government in the implementation of its priorities and thereby deliver services to the communities.

 

Report to be considered.

 

 

 

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