SELECT COMMITTEE ON PUBLIC SERVICES

PRESENTATION ON THE 2010/2011 DEPARTMENTAL ANNUAL REPORT

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Contents

1. Introduction and overview 2. Human Resources Management3. Legal and Governance3. Research, Monitoring, Evaluation and Capacity Building Support4. Priority Project Support5. Sanitation Programme6. Intergovernmental Relations and Stakeholder Management7. Human Settlements Entities Summary8. Financial Report9. Challenges10.Proposed Interventions

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Introduction and Overview

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Introduction and Overview• In terms of financial management the Department has received an

unqualified audit report.• The matters of emphasis will receive attention more particularly the

matter of departmental performance management and reporting. • The Outcome Based Performance Management introduced by Cabinet

came into place and required substantial readjustment in how we work and perform as a Department

• The Department was “internal” focused and there is a clear need for the Department to take its place as the leader and driver of ensuring the facilitation of sustainable human settlements and improving household quality of life.

• A Departmental Turn-Around Strategy was commenced with in order to ensure the mandate change from “housing to human settlements” development is implemented and achieved.

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Introduction and Overview• A key issue is that the Departmental monitoring and reporting

programme is weak and will be strengthened in the turn-around.• The lack of appropriate programme and project management

capacity at the provinces and municipalities is a matter which clearly is reflected in performance and measurement of the outcomes.

• A number of policy, planning, funding and implementation gaps have been identified including data collection and integrity, value for money, improved performance of the grants and subsidy instruments and steps taken to close the gaps.

• Governance and compliance gaps will also be closed, improved and strengthened and this includes the entities until control of the Department and Minister.

• The strengthening of policy responsiveness is also a matter for critical action and intervention including cooperative housing.

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Human Resources Management

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Personnel Employed and Vacancies

ProgrammeNumber of

PostsNumber of Posts filled

Vacancy Rate %

Programme 1: Administration 316 281 11.1

Programme 2: Housing Policy Research & Monitoring 82 60 26.8

Programme 3: Housing Planning & Delivery Support 203 144 29.1

Programme 4: Housing Development Finance 105 87 17.1

Programme 5: Strategic Relations & Governance 157 124 21

TOTAL 863 696 19.4

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Annual Staff Turnover Rate

EMPLOYMENT AT BEGINNING OF

PERIOD (APRIL 2010)

Appointments Terminations Turnover rate

559 199 86 15.4

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Staff Turnover Rate

TERMINATION TYPE

NUMBERPERCENTAGE OF

TOTAL RESIGNATIONS

PERCENTAGE OF TOTAL

EMPLOYMENT TOTAL

Resignation 23 26.7 4.1 86

Expiry of contract

55 64 9.8 86

Transfers 1 1.2 0.2 86

Dismissal-misconduct

1 1.2 0.2 86

Retirement 6 7 1.1 86

TOTAL 86 100 15.4 86

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Performance Rewards

SALARY BAND NUMBER OF BENEFICIARIES COST (R’000)

Levels – 1-12 204 2855

SMS 14 603

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Labour Relations Management

TYPE OF MISCONDUCT NUMBER

Dismissal 1

Progressive discipline 6

Suspension without pay as a sanction 1

Pre-cautionary suspension 2

Strike Action 95

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Training & Development

TYPE OF TRAINING NUMBER

Generic & Short Courses 629

Internships 42

Learnerships – Public Management 24

Learnerships – Public Administration 16

Bursaries awarded 20

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Legal and Governance

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Legal Matters

• Sectional Titles Schemes Management Act, 2011 was promulgated;• Community Schemes Ombud Service Act, 2011 was promulgated;• Rental Housing Amendment Bill was submitted to Cabinet for

approval to introduce in Parliament;• The Department was a party in the Makhaza case where the City

of Cape Town was ordered to build and closed the unenclosed toilets;

• The Department held a watching brief in the Blue Moonlight case where the Joburg City’s differentiated approach to provision of emergency housing measures was declared to be unconstitutional;

• The drafting of the regulations for the SHRA commenced.

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Legal Matters

• Sectional Titles Schemes Management Act, 2011 was promulgated;• Community Schemes Ombud Service Act, 2011 was promulgated;• Rental Housing Amendment Bill was submitted to Cabinet for

approval to introduce in Parliament;• The Department was a party in the Makhaza case where the City

of Cape Town was ordered to build and closed the unenclosed toilets;

• The Department held a watching brief in the Blue Moonlight case where the Joburg City’s differentiated approach to provision of emergency housing measures was declared to be unconstitutional;

• The drafting of the regulations for the SHRA commenced.

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Special InvestigationsThe progress on matters under investigation by Special Investigating Unit (SIU) in terms of the Presidential proclamation issued for the 2010/ 2011 financial year are furnished below:Municipal Employees

• 401 municipal employees were arrested and 334 court cases were finalized.

• 860 acknowledgements of debt to the value of R8.2 million were signed by municipal employees who committed fraud in terms of the National Subsidy Programme.

• The relevant Provincial Departments are managing disciplinary cases as maybe required.

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Special Investigations

Government Employees• A total of 936 government officials were arrested and 871 were

convicted of offences related to the National Subsidy Programme - The sentences handed down include suspended sentences and with conditions to repay subsidy amounts.

• 1615 acknowledgements of debt to the value of R21.7 million were signed by civil servants who defrauded the Department and/or Provinces.

• The department has to date recovered a total amount of R19 million. This figure is a consolidation of both government and municipal employees.

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Research, Monitoring, Evaluation and Capacity Building Support

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The Research Programme

The Research Programme for the period included the following:

• Economic Impact of Government Housing Programmes in low cost housing construction

• Assessment of the performance of government subsidised housing as an asset

• The costs of building an informal dwelling in informal settlements

• Understanding beneficiaries’ perceptions on alternative technologies:

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The Monitoring and Evaluation Unit

The Unit conducted the following in respect of monitoring and evaluation:

• The physical verification of project performance done in 285 projects in all Provinces and monitoring reports completed

• An Impact Assessment Study of the Upgrading of Informal Settlements Programme in Limpopo, Free State and Gauteng Provinces was completed

• Specific physical monitoring done and reports produced on projects in Matatiele, Mount Frere, Mount Ayliff, Flagstaff and Jansenville in Eastern Cape

• The unit prepared and submitted a progress report on the development of a Human Settlement Index

• The unit prepared and submitted quarterly POA Summary Reports and Cabinet Memorandum regarding the performance of Outcome 8 and updated the POA System accordingly.

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Capacity Building Support

• Two hundred and eight one (281) previously disadvantaged learners were awarded scholarships to study towards human settlements qualifications

• Four provinces were supported to effectively implement the South African Cuban Technical Support Programme

• Hands on support was provided to all provinces in developing credible provincial capacity development business plans

• Human Settlements specific training programmes were conducted and 998 councillors,officials and community members were reached

• 30 000 beneficiaries were reached through the human settlements consumer education programmes sessions and print material

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Priority Projects Support

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Priority Projects SupportPROJECT UNITS PLANNED STATUS COMPLETED ESTIMATED PROJECT

BUDGETESTIMATED EXPENDITURE

N2 Gateway (Western Cape)

30 000 Project in progress 8 450 units R6 bill R1 bill

Zanemvula (Eastern Cape)

14 401 3805 sites serviced and ready for top structure construction

4361 units R617 mill R485 mill

Mount Moriah (KwaZulu-Natal)

2100 Project has been finalized by Ethekwini

2069 R172mill R245 mill

Emnambithi (KwaZulu-Natal)

4 442 No funds were allocated by province

Nil R50 mill Nil

Chief Albert Luthuli X6 (Gauteng)

300 Province is undertaking the project

151 R17mill R5 mill

Mokopane Ex 20 (Limpopo)

Ph 1 – 962Ph 2 - 997

Province is undertaking project

962 R315mill R83 mill

Grasslands (Free State)

Ph 2 - 2885Ph 3 - 2814

Housing delivered but roads, and services yet to be finalised

5 699 Still to be provided Still to be provided

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Priority Projects SupportPROJECT UNITS PLANNED STATUS COMPLETED ESTIMATED PROJECT

BUDGETESTIMATED EXPENDITURE

Klarinet (Mpumalanga)

12 000 Phase 1 in progress 6 units R1,4bill R139mill

Lerato Park (Northern Cape)

4 200 Planning for Phase 1 complete, major arterial road complete

Nil R910mill R107 mill

Ouboks (Northern Cape)

2 354 In progress 250 units R135mill R88 mill

Thornhill (Eastern Cape)

5 000 Stalled due to lack of bulk water supply

509 units R 546 mill R96mill

Duncan Village (Eastern Cape)

20 000 In progress 3 137 units R1.2 bill R305 mill

Khutsong (Gauteng) 25 085 Phase 1 in progress 235 units R3 bill R259mill

Klarinet (Mpumalanga)

12 000 Phase 1 in progress 6 units R1,4bill R139mill

Cornubia (KwaZulu-Natal)

24 800 Planning for Phase 1 complete. Tender for road construction to be advertised

Nil R24 bill R374 mill

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Priority Project SupportPROJECT UNITS PLANNED STATUS COMPLETED ESTIMATED PROJECT

BUDGETESTIMATED EXPENDITURE

Diepsloot (Gauteng) 7 500 Land purchased, planning in progress,Environmental scoping complete

Nil R1,2 bill R102 mill

Lephalale (Limpopo) 4 000 Planning, land assembly,

Nil R670 mill R140 mill

Sweetwaters (Gauteng)

2 698 Planning complete but progress will be stalled due to lack of bulk capability

Nil Being calculated R6,3 mill

Lufhereng (Gauteng) 25 000 In progress 907 R4,6 bill R276 m

Drommedaris 1 588 Planning in progress Nil R160mill R18mill

Cornubia (KwaZulu-Natal)

24 800 Planning for Phase 1 complete. Tender for road construction to be advertised

Nil R24 bill R374 mill

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Sanitation Programme

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Sanitation Unit

Measure / Indicator Target Actual

No. Of households provided with basic sanitation services including buckets removal

7,418 households served through ACIP11 000 households served through RHIP

8,426 served through ACIP5,497 served through RHIP

No. Of jobs created through sanitation related projects

200 sustainable job created 275 sustainable jobs created

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Intergovernmental Relations and Stakeholder Management

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Intergovernmental Relations

• Eight municipalities were recommended for accreditation to Level 1 & 2, – Six (6) Metropolitan Municipalities; and – Two (2) District Municipalities in the Northern Cape.

• The Municipal Capacity and Compliance Assessment Panel (MCCAP) has been re-established with two key outputs :– To assess and determine state of readiness for the priority

municipalities to assume level one and two accreditation functions; and

– To facilitate and manage the post accreditation transitional process.

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Intergovernmental Relations

• The Department has in place a Technical MinMec as well as a MinMec.

• The Implementation Forum with a Technical component has been established.

• A Joint MinMec with CoGTA was held as well as a Joint MinMec with Water Affairs and CoGTA.

• A Special Presidential Coordinating Council was convened. • Delivery Agreements on Outcome 8 were concluded with all

Provinces as well as with the Ministers’ of Rural Development and Land Reform, Cooperative Governance and Public Enterprises.

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Human Settlements Entities Summary

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National Urban Reconstruction and Housing Agency (NURCHA)

• The Department authorized a loan of R75m approved from Cadiz as well as recapitalization of NURCHA in the amount of R300m

• Contractor Training and Development Programme completed• The value of loans disbursed under the affordable housing for

houses & sites serviced is R84.9 million• The number of houses built and sites serviced under the affordable

housing programme are 2092.• 33 projects under the infrastructure and community programme

were completed during the period review.

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Rural Housing Loan Fund (RHLF)

• The Department approved the recapitalization of the Fund in the value of R49m to assist with the implementation of the Rural Voucher Scheme

• Number of loans disbursed : 40 289 against target of 44 933

• Value of loans disbursed is R113.6m against target of R112m

• Total disbursements of R224.4m against target of R202m

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National Housing Finance Corporation (NHFC)• The Mortgage Default Insurance Program was approved by the

MinMec in November 2010.• The Department supported the approval of an agreement with the

European Investment Bank for the rand equivalent of EUR 30 million.

• An agreement with Old Mutual Life Assurance Company of South Africa and its BEE Partners to participate in an Affordable Housing Fund with initial funding of R900 million to finance the development and sale of 25 000 affordable units.

• The Trust for Urban Housing Finance (TUHF), loan portfolio reached more than R 1bn mark (R 1.2bn).

• The distressed clients’ turnaround and collection recovery strategy was successfully implemented.

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Housing Development Agency (HDA)

• Seven Implementation Protocols have been signed with the provincial governments of Limpopo, Free State, Western Cape, Eastern Cape and the City of Tshwane.

• In excess of 33 000 hectares of state land was identified for evaluation for release for human settlements development focused on the Outcome 8 which requires the release of 6 250 hectares of public land

• A Joint Coordinating Committee on State Land Release has been established by the Department with the HDA as secretariat to manage the requirements of Output Three of the Delivery Agreement.

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• A policy outlining the criteria for identifying land, and a procedure for the transfer of state-owned land to the Department and/or HDA has been finalised with the relevant state departments.

• In Limpopo the HDA has taken transfer of 72 hectares of land in Bela Bela, acquired on behalf of the Limpopo Department of Local Government and Housing, for human settlements development

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Social Housing Registration Authority (SHRA)

Social Housing Regulatory Programme (“SHORP”)• A total of eighteen Social Housing Institutions were accreditatedSocial Housing Investment Program (“SHIP”)• A Call for proposal for SHIP II was issued and in summary, a total of

11 242 units were applied for with a budget requirement of R1,2 billion;

• Launched the Emerald Sky, TAU Village and Drommedaris Projects• Facilitated the delivery 1050 Social Housing units;• Implemented the regulatory programme which assisted the SHRA

in identifying some policy and legislative challenges with respect to the current program.

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National Home Builders Registration Council (NHBRC)NON SUBSIDY – HOME ENROLMENTS

Type EC FS GP KZN LP MP NC NW WC Total

Target 2,100 1050 15,750 3,360 3,045 3,150 945 3,300 6,300 39,000

Performance 2,315 903 15,267 2,270 2,389 2,318 714 1,600 4,648 32,424

Variance 215 -147 -483 -1,090 -656 -832 -231 -1,700 -1,652 -6,576

No. of houses

completely

inspected

888 253 7391 917 960 1,015 364 643 3,200 15,631

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SUBSIDY – HOME EROLMENTS

Type EC FS GP KZN LP MP NC NW WC Total

Target 15,000 2500 35,000 15,500 6,500 3,000 3000 7,500 6,000 94,000

Performance 15,422 1,229 15,200 6,000 0 800 1,159 1,948 8,171 49,929

Variance 422 -1,271 -19,800 -9,500 -6,500 -2,200 -1,841 -5,552 2,171 -44,071

No. of

houses

completely

inspected

16,101 1,301 4,586 17,501 7,563 694 788 3,210 5,676 57,420

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Financial Report

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2010/11 Allocation

Programme Adjusted

appropriation 2009/10

Allocation 2010/11 Adjustments Adjusted

allocation

1. Administration 167,770m 176,175m 45,013m 221,188m

2. Housing Policy, Research and Monitoring 72,175m 45,907m -2,036m 43,871m

3. Housing Planning and Delivery Support 250,899m

206,831m 365m 207,196m

4. Housing Development Finance 13,380,695m 15,598,126m 76,269m 15,674,395m

5. Strategic Relations and Governance 164,659m 174,442m -29,333m 145,109m

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Adjustments• A rollover amounting to R82,678 million was approved as follows:

– Programme 1: Administration :R7,1 million• R1,9 million for the renewal of Microsoft licenses delayed

due to outstanding documents from SITA. The renewal was paid in April 2011 and R5,2 million paid for the purchasing of server which was delayed as it had to be imported.

– Programme 2: Housing Policy, Research and Monitoring: R1,2 million

• Outstanding payment on a contract to the value of R1,2 million.

– Programme 4: Housing Development Finance: R34,9 million• This amount is for a transfer payment to the Social Housing

Regulatory Authority (SHRA) for establishment

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– Programme 5: Strategic Relations and Governance: R7,7 million• R7,7 million is for outstanding payments on the following

tenders: – Closure of Thubelisha Homes; – Business plan and establishment of SHRA;– Policy development for SHRA; and – Determination of institutional arrangement and

establishment of Human Settlements Development Finance Institution.

• In addition Treasury approved an amount of R31.5 million for outstanding sanitation expenditure not provided for in the Department’s 2010/11 budget allocation

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• Virements approved– R27 million required to fund the Special Investigation Unit (SIU)

for an audit in the provinces. This Audit is an extension for the expanded mandate to the current agreement between the Department and the SIU to provide for Proclamation R7 of 2007.

– R14,4 million was to fund the appointment of a services provider to develop and facilitate a turnaround strategy for the Department.

– R34 million to assist Servcon with its outstanding income tax liability.

– R7,6 million required to fund the Servcon closure process which was approved after the end of the previous financial year and transferred could not be effected.

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Expenditure per Programme - 31 March 2011

Programme ExpenditureRm

Adjusted Allocation

Rm

VarianceRm % Spent

1. Administration 188,577 221,188 32,611 85%

2. Housing Policy, Research and Monitoring 32,636 43,871 11,235 74%

3. Housing Planning and Delivery Support 158,375 207,196 48,821 76%

4. Housing Development Finance 15,624,981 15,674,395 49,414 100%

5. Strategic Relations and Governance 87,384 145,109 57,725 60%

Total 16,091,954 16,291,759 199,805 99%

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Total Departmental Expenditure as at 31 Mar 2011

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Expenditure per Economic Classification - 31 March 2011

Classification Expenditure Total Allocation Variance

% SpentRm Rm Rm

Compensation of employees 216,455 240,095 23,640 90%

Goods and services 222,457 307,518 85,061 72%

Interest Paid Financial Leases 173 751 578 23%

Payments For Financial Assets 199 209 10 95%

Transfer and subsidies 15,533,357 15,541,437 8,080 100%

Payment for Capital Assets 119,312 199,252 79,940 60%

Total 16,091,954 16,291,759 199,805 99%

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Human Settlements Development Grant Allocation

Province

2010/11

VotedAdjustment during year

Total Adjusted Allocation

Total Available to ProvincesProvincial

adjustmentsNational

AdjustmentsR'000 R'000 R'000 R'000 R'000

Human Settlements Development Grant Eastern Cape 1,598,646 - 39,000 1,637,646 1,637,646 Free State 1,300,691 - (263,000) 1,037,691 1,037,691 Gauteng 3,771,831 - 115,000 3,886,831 3,886,831 KwaZulu-Natal 2,714,109 77,024 (80,000) 2,634,109 2,711,133 Limpopo 1,234,750 11,400 130,000 1,364,750 1,376,150 Mpumalanga 975,863 35,170 - 975,863 1,011,033 Northern Cape 273,260 - 174,000 447,260 447,260 North West 1,288,770 203 (100,000) 1,188,770 1,188,973 Western Cape 1,868,843 83,878 - 1,868,843 1,952,721 Total 15,026,763 207,675 15,000 15,041,763 15,249,438

Housing Disaster Relief GrantKwa Zulu Natal 133,800 - - 133,800 133,800 Grant Total 15,160,563 207,675 - 15,175,563 15,383,238

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Human Settlements Development Grant expenditure

Grant Province

Total Adjusted

Voted Allocation

Transfers to Provinces as

per Total Adjusted

Spent by Provinces Spent as % of

total available to Provinces

Spent as % of transfer as per total adjusted

Unspent as at 31 March

2011

R'000 R'000 R'000 R'000

Human Settlements Development Grant Eastern Cape 1,637,646 1,637,646 1,503,816 92% 92% 133,830 Free State 1,037,691 1,037,691 1,037,685 100% 100% 6 Gauteng 3,886,831 3,886,831 3,855,064 99% 99% 31,767 KwaZulu-Natal 2,711,133 2,634,109 2,711,234 100% 103% -101 Limpopo 1,376,150 1,364,750 1,264,584 92% 93% 111,566 Mpumalanga 1,011,033 975,863 1,011,033 100% 104% 0 Northern Cape 447,260 447,260 472,944 106% 106% -25,684 North West 1,188,973 1,188,770 1,040,163 87% 87% 148,810 Western Cape 1,952,721 1,868,843 1,940,037 99% 104% 12,684Total 15,249,438 15,041,763 14,836,560 97% 99% 412,878 Housing Disaster Relief GrantKwa Zulu Natal 133,800 133,800 133,800 100% 100% 0Grant Total 15,383,238 15,175,563 14,970,360 97% 99% 412,878

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Delivery – 01 April 2010 to 31 March 2011

Province Serviced SitesTargets

Serviced Sites Completed

Houses Targets

Houses Completed

TotalAnnual Target

Total Delivery

EC 8,000 12,979 22,000 10,784 30,000 23,763

FS 13,351 0 5,328 5,136 18,679 5,136

GP 6,791 21,866 33,129 25,117 39,920 46,983

KZN 8,001 4,028 25,002 20,991 33,003 25,019

LP 3,000 2,334 15,489 15,647 18,489 17,981

MP 5,409 2,159 9,656 9,860 15,065 12,019

NC 1,912 2,176 2,524 4,620 4,436 6,796

NW 5,046 6,376 15,996 16,816 21,042 23,192

WC 18,000 11,628 15,000 12,908 33,000 24,536

Total 69,510 63,546 144,124 121,879 213,634 185,425

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Challenges

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Challenges

• Under and Non-reporting by Provinces on the total value chain.• The lack of a planned and implementable programme and project

pipeline• Failure by provinces to prioritize and budget for the resolution of

blocked projects.• Lack of capacity to verify performance of all projects in the nine

Provinces;• Reliability and verification of reported programme and project

performance data;• Availability of reliable data for indicators to measure Human

Settlement Index• Intergovernmental co-ordination of Capacity Development

Programme.

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Challenges• Improvement in provincial allocation for resources for the

implementation of the capacity development interventions including training and consumer education.

• Required improvements in the alignment and accuracy of delivery performance between the Local, Provincial the National Department.

• Delays in the reporting timeframe and gaps in the information being reported need to be addressed.

• Lack of availability of capacity and expertise at provinces for project management to ensure the effective utilisation of available resources within current priority programmes and projects

• Alignment of provincial and municipal budget allocations to achieve required national outputs and outcomes.

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Proposed Interventions

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Proposed Interventions• A Departmental Turn-Around Strategy has been approved for

implementation.• The establishment of a Programme Management Unit has commenced. • An Implementation Forum has been established to ensure proper

accountability for agreed outputs and outcomes. • A Human Settlements and Basic Services Task Team has been

established to improve National, Provincial and Municipal Coordination.• Required evaluations are to be conducted on key programmes including

informal settlement upgrading and social and rental housing to improve performances in funding, planning and implementation.

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Proposed Interventions• The development and commissioning of an appropriate performance

management system to monitor and manage internal and stakeholder performance has commenced with the assistance of SITA.

• Improved governance, compliance and performance oversight of provinces, human settlements entities and municipalities is consistent work-in-progress.

• Improved human resource recruitment, capacity, training and development is planned when the revised organizational structure is implemented.

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Thank You

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