1. 1 FREE STATE: DEPARTMENT OF LOCAL GOVERNMENT AND HOUSING SELECT COMMITTEE ON FINANCE 13 FEBRUARY 2008 MEC: M J MAFEREKA

2. 2 Table of Contents 1. Audit outcome for 2006/07 - financials - non-financials 2. Third Quarter Performance Information - financials - non-financials 3. Planned measures to improve spending 4. Service delivery challenges 5. Capital expenditure 6. Conclusion

3. 3 AUDIT OUTCOMES 2006/07

4. 4 HOUSING GRANT EXPENDITURE UNTIL 31 MARCH 2007 Amount Budgeted Expenditure 31/03/2007 % Spending Project Linked466,770,000466,751,009100% PHP49,964,00049,919,54099.91% Individual2,339,0002,262,73396.67% Discount Benefit100,00027,88027.88% Sub Total519,173,000518,961,16299.96% Human Settlement9,456,0009,451,90299.96% TOTAL528,629,000528,413,06499.96%

5. 5 UNITS COMPLETED

6. 6 CASH FLOW DEVIATION

7. 7 2007/08: 3 rd quarter report

8. 8 ACTUAL EXPENDITURE 3 rd QUARTER 2007/08

9. 9 ACTUAL EXPENDITURE/BUDGET ALLOCATION UNTIL END OF 3 rd QUARTER Amount BudgetedExpenditure%Spending Project Linked436 129 000.00309 648 054.0071.00% PHP173 870 000.008 058 793.604.63% Individual9 459 000.001 906 866.5520.16% Rural Housing4 350 000.000.000% Hostel Upgrading0.00 0% Discount Benefit1 000 000.0071 750.007.18% Institutional Subs10 000 000.00343 500.003.44% Disaster management10 000 000.000.000% Building and other maintenance4 350 000.0089 082.092.05% Human Settlement8 700 000.005 403 544.1462.11% TOTAL657 858 000.00325 521 590.3849.48%

10. 10 UNITS COMPLETED UNTIL END OF 3 rd QUARTER

11. 11 Projected under-spending Note should be taken that although the spending were at 49% end of December 2007, the following improvement can be noted as at February 2008: Total budget-R657,7 m Actual to date (Feb/08)-R410,5 m Difference-R247,2 m Adjustment-(R100,0 m) Projection to end March/08-(R60,0 m) Projected underspending-R87,2 m

12. 12 Planned measures to improve spending The following measures have been put in place to address the projected under-spending: Acquisition of land - Matjhabeng (2665Ha) -R26,7 m - Moqhaka (1814.64Ha) -R18,3 m - Mangaung (1291Ha) -R25,0 m - Mantsopa (30Ha) -R0,09 m - Setsoto (166Ha) - R5,00 m - Mafube (20Ha) - R0,09 m - Phumelela (1000Ha) -R3,94 m - Tswelopele (560Ha) -R1,70 m

13. 13 Planned measures to improve spending cont… Acquisition of land - Dihlabeng (367,568Ha) -R1,70m - Letsemeng (150Ha)-R0,36 m - Ngwathe(155Ha) -R3,40m - Kopanong (100Ha) -R0,24m - Maluti-A-Phofung (1049,238Ha)-R9,10m - Mohokare (793Ha)-R3,70m - Propnet-R6,10m - Naledi (33Ha)-R1,00m - Masilonyane (820Ha)-R3,70m Total-R85,12 m

14. 14 SERVICE DELIVERY CHALLENGES ChallengesResponses Township registers are not in place in municipalities. The Department will sign service level agreements with municipalities. The Department will verify that township registers are in place before allocations are made. Varying capacity of contractors.Most contractors are on the contractor development programme. Unprecedented weather conditions in April and May (Rainy to very dry). Lack of capacity in Housing Component of Municipalities relating to the management of beneficiaries. Intervention programmes in the major six towns are implemented, e.g. level one accreditation of Mangaung Municipality.

15. 15 SERVICE DELIVERY CHALLENGES ChallengesResponses Experience shortage of skills (artisan) due to the competition brought about by bucket eradication. Introduction of internship for artisans to accelerate skills acquisition. Appointment of consultants to assist with the following areas: - To audit informal settlements - To do housing inspections Lack of capacity within the municipalities to draw Housing IDP Chapters. (resulting in lack of planning to deal with urban sprawl, rehabilitation costs and eradication of buffer strips) Funds have been requested from NDOH to assist Municipalities with their Housing Sector Plans. Lack of suitable land for housing developmentAcquisition of land Capacity of the Department in district level is low. The Department is in the process of filling posts at district level.

16. 16 Conclusion The Chairperson should take into consideration the spending improvement between January - February 2008. To further take into consideration the huge spending that might take place in March 2008.

17. 17 Thank You