Human Settlements, Water and Sanitation Budgetary Review and Recommendations Report 2019

Meeting report

Human Settlements, Water and Sanitation Budgetary Review and Recommendations Report 2019
The Chairperson asked the Content Adviser to take the Committee through the BRRR and focus on the observations and recommendations of the Committee.

Ms Shireen Dawood, Committee Content Adviser, noted the Committee observations:

- The transfer of the title deeds was at a slow pace for pre and post 1994. Of 448 022 new houses delivered, only 101 180 title deeds were issued, adding to the already large backlog of 346 842. This meant over 1.2 million individuals that received subsidized housing were not yet the registered owners.
- The delivery of the Finance Linked Subsidy Programme (FLISP) programme was a concern.
- Social housing performed below the MTSF target with 13 850 of the targeted 27 000 units achieved.
- The performance for the land acquisition and release was 19 962.2 hectares against the 10 000 of the MTSF target. However, only 2 241.7 hectares was rezoned for development.
- There was no alignment of financial and non-financial performance outcomes to allow for improved accountability, improved service delivery and demonstrating value for money.
- The Community Schemes Ombud Service improperly invested in the Venda Building Society Bank (VBS).
- It remained a challenge for CSOS to determine the total number of community schemes in South Africa as defined by the CSOS Act, as the public entity cannot reliably collect all the levies due to the entity.
- The performance against predetermined objectives of the Department and entities (National Housing Finance Corporation (NHFC); National Home Builders Registration Council (NHBRC) were not well defined and therefore not verifiable. DHS did not exercise adequate oversight on the reliability of reported performance against predetermined objectives.
- The NHBRC Board was not transformed.
- Poor workmanship and project management remained a challenge, which led to delays. This problem was further compounded by lack of community involvement in projects.
- There was poor utilization of the Urban Settlements Development Grant (USDG). While expenditure on the Human Settlements Development Grant (HSDG) was high, the average expenditure rate in fact masks some of the disparities between provinces, especially with respect to delivery targets. Low spending on the USDG and Title Deed Restoration Grant also warrants closer oversight.
- The leadership did not exercise effective oversight responsibility over performance information reported in the annual performance report and information technology governance, resulting in repeat audit findings.
- There was fraud and/or lack of consequence management.
- There was lack of leadership to guide governance issues within the Housing Development Agency (HDA)
- The department received an unqualified audit report.
- Proper record keeping was not always implemented in a timely manner to ensure that complete, relevant and accurate information was accessible and available to support performance reporting.
- Regular, accurate and complete performance reports that were supported and evidenced by reliable information was not prepared throughout the financial year.
- Under Programme 1, the HR plan was not fully implemented, and this has been a recurring challenge.
- The department did not monitor the governance of the Housing Development Agency.
- The target for the number of Informal Settlements Upgrading Plans (ISUP) were not met. Only 319 plans were developed out of a planned 500 plans.
- Some houses were built and left for a long time to be occupied, which creates a problem of vandalism and misallocation.
- The role of the Estate Agency Affairs Board (EAAB), CSOS and NHBRC were not well known in most rural areas of South Africa.
- There was general disregard of Treasury Regulations and the Public Finance Management Act (PFMA) by CSOS in procurement processes.
- There were no social housing units completed in the Northern Cape.

The Chairperson said that some of the observation are similar and talk to each and suggested that the third and fourth observations should be combined into one observation.

Mr M Mashego (ANC) noted that observations 10 and 11 on the NHBRC should also be combined.

The Committee agreed.

The Chairperson asked Ms Dawood to go through the recommendations of the Committee.

Ms Dawood said that after having been briefed by Auditor-General South Africa, the Department of Planning, Monitoring and Evaluation (DPME) and the Department of Human Settlements (DHS) and its Entities on their Annual Reports, the Committee recommends that the Minister should ensure:

• Delivery of title deeds is improved and fast-tracked. The growing backlog of title deed transfers requires unblocking.
• Mobilize communities to know about the FLISP programme.
• Social housing delivery is improved.
• Land acquisition and release in order to meet MTSF target is improved. In addition, these land parcels must be rezoned for development.
• Proper planning for the alignment of financial and non-financial performance outcomes to allow for improved accountability, improved service delivery and demonstrating value for money.
• CSOS board retrieves funds improperly invested with VBS, and there must be consequence management.
• CSOS develops a complete database and implement a credible revenue management system that would allow it to collect all levies from all liable schemes. The entity should provide the Committee with timeframes for the implementation of the revenue system.
• Performance of planning and reporting of the department and its grant beneficiaries is customized in the respective annual performance against predetermined objectives.
• NHBRC board is transformed to include women, youth and people with disabilities.
• All new subsidized houses built by DHS are enrolled with the NHBRC to ensure quality houses are built.
• DHS publishes list of beneficiaries to ensure transparency and to avoid vandalism and illegal occupation of houses.
• DHS undertakes the utilization of the USDG, which was raised as a concern by the Committee.
• DHS strengthens its monitoring and evaluation of provinces so that the HSDG is fully utilized.
• DHS capacitates the leadership at the HDA to address governance issues
• DHS provides feedback on the implementation and progress of action plans to address and implement audit findings and report to the Committee on a quarterly basis related to transgressions of key control mechanisms and provide progress reports on measures taken remediate irregular, fruitless and wasteful expenditure incurred with details of consequence management.
• DHS has proper record keeping and it is implemented on a timely basis to strengthen the systems with relevant and accurate information.
• Regular, accurate and complete performance reports are prepared throughout the financial year.
• DHS implements the HR plan.
• Strengthen the implementation of the Informal Settlement Upgrading Programme.
• Services offered by EAAB, CSOS and NHBRC is well communicated to people in the rural areas.
• Northern Cape DHS includes social housing in the planning and building processes.

Ms M Mohlala (EFF) said that Ms Dawood should work on the content of the report so that it becomes clear to Members and to the general public at large because these recommendations are not elaborate enough.

The Chairperson said that it is the submission of the Committee that the implementation of these recommendations would positively respond to the objectives of the department and its entities, the National Development Plan and lives of the people. Recurring challenges observed would be resolved as swiftly as possible if accountability regarding these recommendations could be forthcoming from all the entities within the sector. They will ensure the realization of these objectives at specified timeframes, the Committee will conduct its oversight on specified intervals. In addition, Parliament should track the implementation of these recommendations by the Executive.

Mr M Tseki (ANC) said the recommendations are in line with the observations of the Committee and what is needed is the implementation of these recommendations by the Department, and the Committee will exercise its oversight role in this.

The Committee adopted the BRRR with amendments.

The Committee adopted the minutes of the 10, 11 and 15 October 2019.

The meeting was adjourned.