Department of Human Settlements 2012/13 fourth quarter performance: briefing

Meeting report

Opening remarks
The Chairperson noted that the Department of Human Settlements (DHS) had a lot of work ahead, and that the Committee appreciated the cordial working relations with officials. The Committee would receive a briefing on the fourth quarter spending. She noted that some Members were still on oversight as it was the “Committee week”. The Committee would also undertake an oversight visit to the Northern Cape (NC) next week, and it was preferable if DHS would send officials to accompany Members. She handed over to the Department.

DHS Departmental Quarterly Performance Report January- March 2013 Presentation
Mr Thabane Zulu, DHS Director General (DG), apologised on behalf of the new Minister, the Hon. Connie September, who was attending an induction that day. The presentation would focus on the fourth quarter spending and particularly the R4 billion that appeared to be an issue; spending was a challenge for most provinces. DHS would also reflect on why at times there appear to be a discrepancy on financial performance. There had been issues relating to the upgrading of the informal settlements, and a number of factors resulted in 30% under expenditure on national level on that programme.

The factors varied and included the late receipt of invoices for work done by the Special Investigating Unit (SIU) for the Department. An effective spending arrangement had been entered into with the intention of dealing with fraud and corruption in the sector. Although better working relations with the SIU now existed,  the invoices were received quite late, and the resulting underspending amounted to R14.5 million.

There had been challenges with office space at the Department. The Department had a leasing agreement with the Department of Public Works (DPW) to address the challenge. This challenge had an impact on filling of vacancies, but DHS had in the third quarter started filling vacancies. Office accommodation had however an impact on filling of vacancies. Some challenges with filling of vacancies were beyond DHS’s control and related to processes that had to be followed after appointing certain people.

The reasons for falling just short of some of the objectives and targets included the slow filling of vacancies. Filling a vacant post, even after an appointment had been made took longer. The state was very strict on this aspect because of corruption where people had faked documents. A position had been taken with the Public Service Commission (PSC) that the exhaustive process of verifying information be undertaken before a candidate could be confirmed. There were clearances that were also required; this took longer than the Department had anticipated.

Mr Zulu cited two instances where he could not fill vacancies in his offices due to the length of time it took to hire. By the time the verification process was complete, the concerned individuals had been usurped by the private sector. The process needed to be expedited or else government risked losing quality candidates who were keen to joining the public service. The turnaround time needed to be reviewed and the matter had been raised with the concerned departments like the Department of Public Service and Administration (DPSA).

There was an ongoing challenge with information technology (IT) services that the Department required from the State Information Technology Agency (SITA). Delays in implementing the IT related service impacted negatively on DHS spending for the past three years. The service level agreement (SLA) that stipulated that particular actions be taken on IT services had not been done. A meeting had been held with the Chief Executive Officer of SITA on the challenges and the turnaround times. It was agreed that the relations needed to be reviewed. But also DHS was looking at available options to take, to avoid the same situation happening again.

The presentation also reflected on the challenges that were there with the Rural Household Infrastructure Grant (RHIG), and how it contributed to the under expenditure. DHS had also committed to do a presentation on the national rectification programme. The Department supported the idea and would like to have a special session with the Committee where it would present an update on the national rectification programme. The Department was now putting in place a rectification programme of what would be happening where.

There also was a delay finalising the National Upgrading Support Programme (NUSP), as requested by National Treasury (NT). A lot of work had been done on this programme with various municipalities that had been identified. Task teams had been dispatched to municipalities. Despite all this, under expenditure occurred on the programme. A detailed presentation could be prepared on those municipalities that had benefited from this programme.

Overall, the Department had not regressed; it had improved structurally. This year DHS had successfully established a Programme Management Unit (PMU) branch with the intention of empowering the Department and following where the money was being spent. Business plans had been treated differently than before, and DHS was strict on ensuring what the business plans contained was achieved. He said he was optimistic the Department would be stronger as it implemented the turnaround strategy.

The Department took responsibility for areas where it failed, and had committed to avoiding any impact on the business plan and the annual performance plan (APP) when the turnaround was implemented. Efforts had been made to make a seamless transition, but implementing a new strategy with a new structure was not an easy assignment. This was a challenging exercise. Given all the dynamics it would be fair to conclude that the Department had done well.

Mr Mbulelo Tshangana, DHS Deputy Director General (DDG): Project Monitoring Unit (PMU), said he would provide an overview of the Outcome 8 targets. As of 31 March 2013, DHS had delivered 177 598 top structures in informal settlements, about 44% of the 2014 target. If one included the Urban Settlements Development Grant (USDG), DHS had deliver 230 111 serviced sites. Over the same period provinces had delivered 182 065 top structures to households in informal settlements.

Mr Phillip Chauke, DHS Acting Chief Director: Sanitation, said progress was being made on rental accommodation. If the 44% achievement figure was added to what the private sector contributed to the sector the figure was significantly higher. Gauteng and KZN were the highest delivering provinces in terms of units; of course this was as a result of high demand in those provinces. Targets on acquisition of land earmarked for human settlements had already been surpassed.

There was slow movement on the improved property market due to delays in “operationalising” the Mortgage Insurance Scheme (MIS). In the last two years the Department had numerous discussions with National Treasury to try and “actualise” MIS. As all guarantees, that should be issued in favour of the banks and needed to be rectified and approved by National Treasury.

The policy was in place in terms of the finance-linked individual subsidy programme (FLISP) and the programme had already been launched in the Eastern Cape (EC). Although the programme had a steady start, it was now moving in the right direction. DHS needed to reinforce engagements with the banks to try and gain full momentum on this aspect.

In-house development finance institutions had in the period under review delivered 125 000 loans and these were at 35% of the targets. The National Upgrading Support Programme (NUSP) – a programme set up to assist municipalities with upgrading plans – had a tough start, but had registered progress in 2012. Budget for the programme was in place and progress was being realised. Technical personnel had been deployed to various municipalities as per the intentions of NUSP. Job opportunities created in the servicing of stands in the period under review were about 21 204.

Collaboration with Sector Education and Training Authorities (SETAs) did not work as planned in the past year, but efforts would not be spared in ensuring improvements. A lot of funding had been availed in the area of training in the sanitation sector. DHS had engaged various water services authorities in most municipalities. The authorities were expected to develop plans around training, and a number of municipalities had complied in this regard. Tongaat Precast Cooperative was currently the best practice. This was in line with the vision of the Committee that cooperatives be established.

DHS moved the fastest on Rural Household Infrastructure Programme (RHIP) in the last quarter, with over 19 000 units being constructed in 53 municipalities. The EC, Mpumalanga and KZN led in the number of units completed. A number of job opportunities had been created in this programme as most of the projects were labour intensive.

Mr Martin Maphisa, DHS DDG: Policy, Research and Monitoring, said DHS was meetings its delivery obligations on the accreditation framework for the metros. The Financial and Fiscal Commission (FFC) review report had been received and although favourable, a couple of other things required attention. The Department was seized with that task, and was consulting with provinces on how best to implement the FFC’s recommendations.

There had been smooth progress in the Western Cape and Gauteng, with implementation glitches being experienced in the EC and KZN. The targets would be met nevertheless. Assignment task teams had been constituted in all the four provinces where DHS was involved. Local councils, the South African Local Government Association (SALGA), National Treasuries and the provincial treasuries were also being involved in the process.

Ms Funani Matlatsi, DHS Chief Finance Officer (CFO), said expenditure figures were reflective of other quarters and could not be read in isolation. A risk of under spending was forecast in January 2013, where a R8 billion appeared unlikely to be spent. The figure included R4.3 billion from the USDG, and the remainder was from operational budget. The main concern was however the USDG. During this time expenditure was around 68% but that had since improved. At the end of the fourth quarter, R7.4 billion of the forecast R8 billion under expenditure had been spent.

It was indicated previously that the bulk of the money went to the USDG and the Human Settlements Development Grant (HSDG). It was also indicated that DHS had a recovery plan that was endorsed by the MinMec (Minister and the MECs forum). It was agreed that the funds would not be transferred to two provinces – EC and Limpopo – due to inability to spend; those funds were subsequently stopped resulting in an amount of R330 million not being transferred. The rest of the funding was indeed spent on the projects that provinces indicated on recovery plans.

There also was a challenge of invoices that were not coming during the previous quarter, and when they started coming in the last quarter that boosted expenditure. In the recovery plans, the issue of redirecting funds to other departmental entities that could spend was brought up. Among the benefiting entities was the Social Housing Regulator Authority (SHRA). The overall expenditure of the Department currently stood at 97% of the R25 billion-budget for 2012/13 financial year (Table, slide 48).

Ms Mahlatsi alerted the Committee to the fact that transfers did not mean expenditure, even though it would be reflected as such in the annual report. The drastic increase in the expenditure of the HSDG around January was mainly due to invoices being received during this time. A portion of the money was transferred to KZN, EC and Free State (FS) provinces for the purposes of social housing projects, and reports were submitted by SHRA. There had been rollovers, despite that DHS could not transfer to some provinces.

DHS had since received a number of invoices from contractors for projects that were implemented based on the recovery plans. Most of the provinces paid for the services based on the work that had been delivered on the ground. It was important that the Department closely scrutinised the current business plans so as to avoid challenges with such issues as land acquisition, environmental impact assessments (EIAs), and bulk services. DHS was moving towards a performance-based business plan.

(See presentation document)

Discussion
Mr S Mokgalapa (DA) commented there had been a significant improvement compared with what had been achieved in the previous quarters. But 60% expenditure – of the overall budget - was unacceptable. The question should be what happened to the 40% not being achieved. The challenge was the financial years of national and local government running parallel to each other.

An assumption now was that the municipalities had roughly about two months to spend whatever was left of the budget; otherwise it would be improbable that over R7 billion would be spent in a matter of two months. He sought clarity on whether only the few months left of the municipal financial year could allow for the budget to be exhausted.

Ms Mahlatsi clarified that the 60% was departmental; the figure was from the departmental perspective and that had since changed. This one was from the serviced sites and top structures. The Department was not proud of the figure. She agreed that spending might not tally with performance. While the HSDG provided for sites and top structures, there were other milestones that the grant was used for like land acquisition. The National Treasury formula, of dividing the total grant allocation by the value of the subsidy to determine the number of houses to be constructed, was not appropriate. The metros indeed had an advantage in that they could use the money that provinces transferred until the end of their financial years.

Mr Mokgalapa commented that the point about transferring of funds not amounting to actual spending needed to be emphasised. The new PMU branch was a welcome relief especially that it would be following where the money was being spent. But still there was a discrepancy with regards to those provinces which declared savings, and yet a claim would be made that they had spent their budgets. This was senseless. The issue that needed to be looked at thoroughly was whether there was correlation in the transferring of funds and the actual output.

Ms Mahlatsi replied the transfers did not mean expenditure. When the Department indicated a transfer it did not mean that constituted expenditure until it was satisfied in terms of projects that were in the pipeline. The same was true for provinces; when they had effected a transfer provinces had to ensure there was value for money on the ground.

Mr Mokgalapa commented that it was highly likely that the Outcome 8 objective of building 400 000 households, by year-end appeared impossible given that delivery was currently at 44%. He however acknowledged the point that the Department was still aligning the business plan. The question of how realistic targets against performance targets were set was crucial.

Mr Mokgalapa said the Committee welcomed the fact that the Department looked to put FLISP out on the open market, as this had been the initial view of the Members. It was worth noting that there was some movement on the programme. He said he found it strange that NUSP was not getting off the ground. This programme was initiated to ensure that Government assisted with the informal settlements upgrading. Why did the programme not fulfil the intentions it was founded for, he asked?

Mr Johan Wallis, DHS Chief Director: Programme Implementation Facilitation, clarified that NUSP was a technical support programme, and not a capital programme that implemented human settlements projects. At the end of the fourth quarter, ten municipalities had been done, but up to now 21 municipalities were bound with service level agreements. It had been a long process to get the municipalities, the councils and the councillors on-board the process.

A decision had been taken that DHS would not go into a municipality without approval from council. It was useless preparing informal settlements plan without the support of the councillors. Currently the Department was busy with 33 municipalities and it was hoped in the next three months there would be technical expertise within the municipalities.

About 800 priority informal settlements would be targeted across the country. The Department had started creating a pipeline; the municipalities were getting their plans ready. These would eventually go to the provincial business plans for funding. The pipeline of the informal settlement projects over the next medium term expenditure framework (MTEF) period was starting to come to fruition; this was over and above the green field projects. The programme would again not spend the money it had been allocated for the year. One could not throw money on a problem; the programme had been given too much money.

Mr Mokgalapa asked at what level was the process of formulating legislation pertaining to administering of sanitation function by DHS. This had been a contested territory with such departments as the Department of Water Affairs (DWA) and the Department of Cooperative Governance and Traditional Affairs (Cogta).

He sought clarity on why the Department held an opinion that the EC, KZN and the FS were the best performing provinces when it came to RHIG programme. Could this performance be as a result of the fact that it was easy to construct a ventilated improved pit (VIP) toilet, and most of the rural municipalities were in the three provinces? Challenges with contractors were well documented.

Mr K Sithole (IFP) commented that he was concerned with the expenditure figures for the USDG grant as they looked suspicious. He cited the expenditure pattern by the Nelson Mandela Bay Metropolitan Municipality (NMBM), which jumped from 18% in December 2012, to about 66% by the financial year-end.

Ms Mahlatsi replied the jump in expenditure of the USDG – from 18% to 60% - could best be contextualised in the challenges with the Buffalo City Metropolitan Municipality (BCM) and the NMBM. The challenges were of a political nature, and some had impacted on the tender processes. This had led to situations of contracts being terminated, also necessitating re-appointment of some of the contractors. Those challenges had since been resolved by the political leadership in BCM. The new approach adopted by the metro had led to improved delivery record on basic services like electricity connections. The Department had visited the metro, and had witnessed the performance and was pleased with expenditure. KZN was another challenged province when it came to administration; they had weak reporting systems but delivery on the ground was visible.

Mr Sithole asked why the EC, FS and Gauteng were able to create more jobs than many other provinces. What had occurred in those provinces that had failed to commit? A number of residential areas in the City of Tshwane (Pretoria) had been without water for a number of years. He cited those areas as Winterveld, Sokhulume and Eerstrus where housing development, with toilets, had happened, but with no running water.

Mr Mokgalapa clarified that these areas of Tshwane mainly used makeshift systems like the VIP toilets in areas where Reconstruction and Development Programme (RDP) houses had been constructed, but the challenge was a bit more in informal settlements where there was nothing at all. The challenge was a bit worse in nearby Moretele, where people had even resorted to using a dam to fetch water. This was a cross border issue between the provinces of North West (NW) and Gauteng, and both provinces appeared hesitant to provide services.

Mr Tshangana replied the list of provinces who had not committed could be provided as the information was available.

Mr Zulu said a separate presentation on sanitation would be a good idea. There were many developments that needed to be brought on board including the model of delivery, targets, new approach, historical perspective, way forward, the current model being proposed by National Treasury, and the challenges.

Mr Tshangana said the performance on sanitation, broken down by province, could be provided.

Mr Sithole commented that the informal settlements were on the increase in Eerstrus and asked if this trend had been noted, and whether it was being monitored by the Department. He sought clarity on the task team, established to monitor the accreditation of municipalities. It would be preferable if the Committee could be provided with the names of those serving the task team.

Mr Tshangana replied it would have been ideal to have come and do a presentation to the Committee on the accreditation approach taken in terms of assigning the metros. There were two aspects to accreditation; either by legislation or executive assignment. The panel agreed that the executive assignment should be the chosen approach, and that had since been approved by MinMec. He said he would prefer to make a presentation on this aspect as it applied to the six metros.

Ms P Duncan (DA) said she believed the Department in saying it had achieved the 97% expenditure, and requested that a separate report be prepared on the R600 million that was unspent. The Department had to monitor provinces and municipalities, and had to spend enough time in ensuring that the monitoring and evaluation (M&E) worked. It was through the M&E that DHS would be able to measure and see that spending happened at provinces. DHS should be hard on provinces and municipalities and make sure money was spent on intended purposes. The two spheres of government – provinces and local – should have Integrated Development Planning (IDP) and Spatial Development Framework (SDF) plans in place including the land required for housing.

Ms Duncan asked if equity on people with special needs was a consideration at all in the Department when it came to filling of vacancies. She commented that the additional contractors’ delivery performance on sanitation seemed shameful. The contractors were expected to deliver just over 9 000, and yet so far a mere 1 000 had been delivered. What was the current situation on the provision of toilets?

Mr Zulu replied there was an employment equity plan that accommodated people with disabilities and women. There were even posts that were earmarked for disabled people and women, when such posts were advertised they would be designated as such.

Ms Duncan requested that a separate sanitation report be provided to the Committee. The report should indicate the figures and the nationwide progress so that Members could make informed decisions together with the new Minister. Sanitation was not a standalone thing; it had to be integrated into building houses. A sanitation report on backlogs would indicate the real extent of the challenge, and an informed decision on what had to be done could be arrived at.

Ms J Sosibo (ANC) sought clarity on whether SITA trained people for the purposes of cooperatives. She sought clarity on whether invoices from the SIU had been successfully submitted regarding the work the Unit undertook on behalf of the Department.

Ms Mahlatsi said DHS had received invoices to the value of R14.5 million from the SIU. The rest of the invoices would be submitted in the current financial year.

Ms Sosibo wondered about the role of the private sector in sanitation provision especially in small towns, and whether sanitation had an impact on economic opportunities in such towns. She cited an example of Nando's and Kentucky Fried Chicken (KFC), who indicated they could not open shops in some towns – like Dumbe and Vryheid – as there were serious challenges of sanitation. If this was the case, small towns would not be developed to desirable standards. She asked for how long would the Department remain with vacancies.

Mr R Bhoola (MF) commented the involvement of private sector business in building toilets would be a positive approach, even more so in the advancement of development in the country. This required decisive steps. It would appear that the Department had adopted a constructive approach in aligning the challenges, with targets, budget and planning.

He commented that it was ideal that DHS had committed to providing the technical support to municipalities. In terms of the provision of the support provided to municipalities; was the Department pleased that it correlated and added up to what the master plan wanted to achieve. Also satisfying was the fact that something was being done on fraud and corruption.

Mr Bhoola said he was concerned with land acquisition. He sought clarity on whether there was a constructive plan on land acquisition that regulated how and when transfer of funds happened. He also wanted to know if the Department would commit to sorting out under spending on upgrading of informal settlements.

Mr Bhoola sought clarity on whether opening a sectional title register on rental stock was not an ideal approach, instead of DHS’s approach of waiting for a three-year period to write off balances. He cited an area in iSiphingo (KZN), where poor people occupied 950 units of rental stock. The approach by the Department appeared to be a major discrepancy given the President’s emphasis on security of tenure. What would happen to the balances; some people were R60 000 in arrears. The eThekwini Metro had adopted an enhanced discount benefit scheme (EDBS) where the arrears were parked off. Would this not be an appropriate method?

Mr Tshangana said the proposal on the EDBS was a concrete proposal. There were limitations on this aspect as the programme was meant to have a start and an end date. Not all the government-owned rental stock was meant for EDBS. It would be ideal if the policy was reviewed especially if one looked at the Western Cape. He cited an example of a challenge posed by high density apartments where one could not transfer an individual unit to an individual owner. The current arrangement was to transfer the units that were stand alone units; these were easy to administer and write-off the loans. A multiple storey apartment was difficult to give individual ownership, but this was something worth looking at. Part of the programmes for the next financial year was about reviewing the subsidy programmes. A special arrangement was made for municipal-owned rental stock, and that too could be looked at.

Ms A Mashishi (ANC) sought clarity on the housing backlogs, and said it appeared that the country was falling short of the Millennium Development Goals (MDGs) on eradicating informal settlements. She wanted to know how many informal settlements were there in the country. The pace at which the country moved in eradicating these informal settlements did not seem to be promising.

Mr Tshangana replied in terms of the Outcome 8 targets a recommendation was made to move away from a project based approach to an open market based approach. The internal discussion had centred on whether it was necessary to ask provinces to commit; an open market approach meant there would not be ability to allocate subsidies to the provinces. The concern that National Housing Finance Corporation (NHFC) had been raising was that provinces implemented FLISP however they liked, and not how it was suppose to be administered as recommended by MinMec. If DHS would be at the mercy of provinces when it came to implementing the programmes then it was in trouble. FLISP was a big concern for everyone.

Mr Tshangana said the biggest issue on Outcome 8 was that, the figure of 57% was for services delivered in informal settlements. About 230 000 serviced stands had been done. If one looked at the top structures delivered in informal settlements to date the figure stood at 177 000. From 2009 to now, 230 000 serviced sites had been delivered in informal settlements, over and above 177 000 housing units that had been built. The 57% figure was only informed by serviced stands; this meant focus had to be on services only and not top structures.

The Chairperson interjected and sought clarity on how security of tenure was dealt with given the two scenarios.

Mr Tshangana replied there was a task team working on verification of security of tenure. There were various form of tenure, but DHS had only been accounting for the formal tenure. He said all the 177 000 top structures, and the 230 000 serviced stands were formal tenures. Shack services arrangement had not been counted in. There was a task team working on this aspect, particularly looking at high density shack settlements that had been approved by councils for upgrading.

Ms Mashishi said it would be ideal if the Department could provide a provincial breakdown of job creation statistics.

Mr Tshangana said job creation statistics, analysed by province, would be later availed to the Committee.

The Chairperson asked if finalisation of refurbishment of office space would impact on vacancies. A number of posts had been advertised on sanitation; although a good step, how would these people be accommodated if the finalisation of office space was pending. The Committee had suggested that the money not being spent could be used to buy caravans in the mean time, so as to accommodate staff. The departmental operations should not lag.

Mr Zulu said the comments by Members empowered officials and would improve the work of the Department. Most of the comments would be taken into consideration as the Department moved to implement its programmes in the current term. Some of the issues had already been incorporated to the plans of the Department.

The issue of accommodation was central to DHS’s operational challenges and had been accorded the necessary attention. The executive had rejected the timelines to deal with the issue. The thinking had been that the timelines would work against the Department’s operational efficiencies and the progress made in filling the vacancies. DHS could not bring people and keep them on floor; there was no correlation between the speed with which the Department hire and office space. But the Department tried hard to get the vacancies filled. The next presentation would indicate how the matter was being tackled, but the only issue was that DHS continually budgeted for this arrangement and the money was not being used.

Ms Mahlatsi said the refurbishments were particularly worrying, but the Department had a space in one of the three departmental buildings. She was hopeful all the vacancies would still be accommodated. Even within the building that the DG and the Minister occupied there was still another floor that was available.

The Chairperson said human settlements was too broad, and the presentation needed to be specific on the programmes for Outcome 8. On affordable rental programme there was the Community Residential Units (CRU) programme; this was government priority programme and the report did not reflect the progress made. Progress on the enhanced discount benefit scheme should be reflected on. Provinces deliberately avoid the scheme; they do not want to do work thoroughly, and as a result some sub-programmes got lost along the way. DHS should look at these issues, and ensure that after a number of years rental stock was given to the people.

Mr Tshangana replied in terms of the Outcome 8 targets a recommendation was made to move away from a project based approach to an open market based approach. The internal discussion had centred on whether it was necessary to ask provinces to commit; an open market approach meant there would not be ability to allocate subsidies to the provinces. The concern that National Housing Finance Corporation (NHFC) had been raising was that provinces implemented FLISP however how they like, and not how it was suppose to be administered as recommended by MinMec. If DHS would be at the mercy of provinces when it came to implementing the programmes then it was in trouble. FLISP was a big concern for everyone.

The Chairperson said she was worried about KZN, Gauteng and the Western Cape on upgrading of informal settlements. The Census 2011 had indicated that informal settlements were on the rise in these three provinces. Spending on the programme by the provinces was concerning, and the monitoring and evaluation unit, and the PMU should focus on the three provinces.

The Chairperson pointed out that private renting should not only be thought of as only happening in urban areas. This should be looked at broadly and thought out well; there were professional renting in rural areas. She said the issue of renting in Limpopo was less satisfactory.

The Chairperson said the Committee was less happy with the financial year. Transferring the funds to programmes did not assist in any way. Officials should be more concerned with where the money went. It had been transferred and yet there was no improvement at the end of the current financial year.

The Chairperson sought clarity on the statement that DHS, in conjunction with DPSA, was developing a policy for the provision of access and finance by public servants. Could this statement be elaborated on? She said the Committee had earlier complained about the revised accreditation framework for municipalities. The Committee did not support the policy, even though it had been approved. DHS went at great lengths to review the policy without involving the Committee. Members foresee challenges with the reviewed policy; it would be more open to manipulation by provinces than the initial policy. The reviewed should be referred to Parliament so that Members could comment on it.

The Chairperson sought clarity on the status of the Construction SETA as it was on administration when Members last checked. DHS should also consider roping in the Energy SETA, as it was allocated funding that could be utilised by human settlements. The Committee would also like to receive a briefing on the rectification. This was a programme that was fully supported by Parliament as it had to do with the dignity of the people. But there had to be a time when rectification had to stop and would not be tolerated. When would such time come? This also spoke to the issues of monitoring as this aspect of delivery was not about the National Department only. Someone had to account, rectification cost government a lot of money.

Mr Tshangana replied that screws had been tightened on rectification. Perhaps, it would be ideal if the new Chief Executive Officer (CEO) of the National Home Builders Registration Council (NHBRC) could be invited to come and present on the new approach being undertaken. The entity had upped its performance. Together with the CEO, all the projects funded by DHS in all provinces had been visited. The law stipulates that every project should be registered with the NHBRC; whoever deviated from this requirement was breaking the law. The Department would not be rectifying forever, and the Minister had pronounced just as much. The rectification would be done because the Department had committed to that, but there was a time lag. Most projects that were meant for the rectification programme were those that were done before 2002, before the NHBRC came into existence.

Mr Tshangana said he would confirm the status of the Construction SETA on whether it was still under administration.

The Chairperson said under expenditure was a challenge as only 60% of the transferred funds could be spent. She chose not to comment on the USDG as it was a “disgraced programme” and the matter involving the SITA. The matter with the IT in the Department had to be resolved or else SITA would have to come to the Committee and account. What it was doing really frustrated the work of the Department. The Committee expected progress in the IT front at the next meeting, failing which would result in the SITA being invited to the Committee to account on its working relationship with the Department. She requested officials to be vocal on how the sanitation portion in Municipal Infrastructure Grant (MIG) was spent.

Ms Mahlatsi replied the transfers made to the institutions were two-fold especially to the Social Housing Regulatory Authority (SHRA). There was a structuring grant that enhanced the capital of the social housing institution in line with the authority, as well as the operational budget for the institution. The transfers that the provinces had made came from the HSDG in line with the provincial business plans.

When DHS agreed to the recovery plan, it was based on the redirecting of funds to social housing projects that showed performance progress. At the time the decision was taken to transfer the money to SHRA it was February already, but the projects were running. DHS had reports that SHRA had provided in line with the business plans of provinces.

Mr Zulu replied that he noted the advice on SITA.

Closing remarks
Mr Zulu said that DHS was reviewing budgets including NUSP. The technical assistance that was required in dealing with the upgrading of the informal settlements programmes was so huge. But the Department did not want to dump money, rather it wanted to ensure that there was value. The Department needed to improve on delivery this financial year; there could not be any excuses for not planning appropriately. The year had not been easy, but systems were in place.

The Chairperson said the report was acceptable but much improvement was required. Officials and Members should work together in the future. The Department should avail information on those municipalities that were not cooperating, so that Members could assist the Department. The oversight by Parliament was not only limited to the work of the national Department.

The meeting was adjourned.