1. REPORT ON URBAN SETTLEMENTS DEVELOPMENT GRANT
Select Committee On Appropriations: 30 May 2017

2. ALLOCATIONS AND EXPENDITURE
TOTAL ALLOCATIONS AND EXPENDITURE FOR ALL METROS FROM 2011/ /17 FINANCIAL YEARS
Municipality
ALLOCATIONS AND EXPENDITURE
Voted Funds
Roll-over
Total Available Funds
Spent
% Spent
Unspent Funds
R'000
2011/12 -
90.3
2012/13
94.1
2013/14
93.9
2014/15
93.0
2015/16
94.8
AS AT 31 MARCH 2017
53.6
CONSOLIDATION SINCE INCEPTION FOR ALL METROS
  AMOUNT
TOTAL VOTED FUNDS
TOTA EXPENDITURES
TOTAL UNSPENT FUNDS

3. ALLOCATIONS AND EXPENDITURE FOR 2011/12
Municipality
2011/12
Voted Funds
Spent
% Spent
Unspent Funds
R'000
Buffalo City
36.9
Nelson Mandela Bay
100 -
Mangaung
68.8
Ekurhuleni
97.7
25 681
City of Johannesburg
92.6
76 439
City of Tshwane
98.9
10 118
eThekwini
97.4
28 369
City of Cape Town
91.4
70 869
Total
90.3

4. ALLOCATIONS AND EXPENDITURE FOR 2012/13
Municipality
2012/13
Voted Funds
Roll-over
Total Available Funds
Spent
% Spent
Unspent Funds
R'000
Buffalo City
72.9
Nelson Mandela Bay -
100
Mangaung
78.9
Ekurhuleni
25 681
94.4
69 509
City of Johannesburg
76 439
City of Tshwane
10 118
eThekwini
28 369
City of Cape Town
70 869
93.6
66 276
Total
94.1

5. ALLOCATIONS AND EXPENDITURE FOR 2013/14
Municipality
2013/14
Voted Funds
Roll-over
Total Available Funds
Spent
% Spent
Unspent Funds
R'000
Buffalo City
99.9
652
Nelson Mandela Bay -
100
Mangaung
90.0
72 717
Ekurhuleni
69 509
89.1
City of Johannesburg
City of Tshwane
96.5
44 830
eThekwini
City of Cape Town
66 276
77.3
Total
93.9

6. ALLOCATIONS AND EXPENDITURE FOR 2014/15
Municipality
2014/15
Voted Funds
Roll-over
Total Available Funds
Spent
% Spent
Unspent Funds
R'000
Buffalo City -
100
Nelson Mandela Bay
Mangaung
72 717
89.3
77 536
Ekurhuleni
75.5
City of Johannesburg
City of Tshwane
44 830
97.6
36 868
eThekwini
City of Cape Town
90.1
Total
93.0

7. ALLOCATIONS AND EXPENDITURE FOR 2015/16
Municipality
2015/16
Voted Funds
Roll-over
Total Available Funds
Spent
% Spent
Unspent Funds
R'000
Buffalo City
42 403
100
115
Nelson Mandela Bay -
Mangaung
77 536
92.2
59 978
Ekurhuleni
87.5
City of Johannesburg
94.5
94 984
City of Tshwane
36 868
eThekwini
City of Cape Town
90.6
Total
94.8

8. ALLOCATIONS AND EXPENDITURE AS AT 31 MARCH 2017 :2016/17 FINANCIAL YEAR
Municipality
AS AT 31 MARCH 2017
Voted Funds
Roll-over
Total Available Funds
Spent
% Spent
Unspent Funds
R'000
Buffalo City - 70
Nelson Mandela Bay 51
Mangaung
58 644 75
Ekurhuleni 43
City of Johannesburg
94 984 57
City of Tshwane 65
eThekwini 45
City of Cape Town 55
Total
55.0

9. ALLOCATIONS AND QUARTERLY EXPENDITURE AS AT 31 MARCH 2017 - 3RD QUARTER MUNICIPAL YEAR
YEAR TO DATE (01 JULY MARCH 2017)
Municipality
Voted Funds
Roll Over Funds
Total Available Funds
Transferred Funds
Expenditure - 1st Quarter
Expenditure -2nd Quarter
Expenditure -3rd Quarter
Cumulative Expenditure
R'000
Buffalo City -
87 527
Nelson Mandela Bay
Mangaung
58 644
74 037
Ekurhuleni
City of JHB
94 984
City of Tshwane
eThekwini
City of Cape Town
Total

10. Key Recommendations Of DPME Based On The USDG Evaluation
The DHS and National Treasury should confirm the USDG status as a Schedule 4B Grant for the 2015 DORA, but increase municipal accountability.
The DHS should revise the monitoring framework, inclusive of rationalizing outcome, outputs, and indicators, to focus on changes at beneficiary level.
The DHS must clarify the grant intent within identified existing programmes, and the specific outcomes associated with these programmes, and related contributions, in a revised policy framework.
The DHS and National Treasury should amend the USDG policy framework to stipulate the portion that may be used to procure technical and project management expertise.

11. Departmental Response to the USDG Evaluation
Confirmation of the status of the USDG as a supplementary grant:
The USDG is a Schedule 4b Grant and remains as such at this point in time, however it is also part of the broader local government fiscal review and the outcome of this process will have an impact on the grant;
Impact on the broader review by National Treasury of Local Government infrastructure Grants:
The department has provided inputs into the local government infrastructure review process through the applicable channels. The review has an impact on the USDG as alignment is required between the USDG, PTIG, INEP and NDPG which form part of a Built Environment Performance Plan (BEPP)

12. Review by National Treasury on Local Government Infrastructure Grants
The finding of the USDG Evaluation that the USDG should remain a schedule 4 grant is aligned with the direction of reform agreed through the Review of Local government Infrastructure Grants;
The Review’s recommendations for enhancing the structure of conditional grants emphasizes the importance of two factors: differentiation and grant consolidation. In the context of the USDG, these mean:
1. Differentiation – means that the grant system should be different for urban and rural municipalities. In metros, the grant system should allow for greater flexibility so that cities can combine grant funds with their own revenues to deliver integrated infrastructure programmes that serve mixed-use and mixed-income developments. The cities also have the capacity to be able to manage the increased responsibility that comes with a schedule 4 allocation.

13. Review by National Treasury on Local Government Infrastructure Grants
2. Consolidation – means reducing the number of grants that each municipality receives. The USDG funds infrastructure across multiple sectors (water, sanitation, roads, public facilities etc) through a single grant, thus it is aligned to this objective.

14. Other Evaluation Findings
Finalise the Policy on USDG
Revision of the DORA Grant Framework
The review of the formulae for funds allocation
Built Environment Performance Plan (BEPP) be used as a planning instrument
Amending the BEPP guidelines and commission an Expenditure Review
Provinces must have a role as affected sphere
The monitoring of individual project selection should not be the main focus of outcome
Match funding for every USDG rand by Municipalities

15. Key USDG Outputs
Land & Landed Property Acquisition: Suitable and well-located land acquired for informal settlement upgrading and/or other human settlements development programmes.
Bulk & link Infrastructure: The provision of bulk and connector services for informal settlements upgrading projects and backyard rental upgrading schemes.
Basic Infrastructure Services: including water, sanitation, solid waste, roads, storm water management systems, electricity, and, refuse removal .
Serviced sites: The creation of serviced stands in, “green fields” or “infill developments” for a variety of land uses.
Public and Socio Economic Amenities -infrastructure for public spaces
6. A portion of the USDG may be used to procure external capacity to support implementation .
7. A minimum of 50 percent of the USDG allocation must be spent on upgrading of informal settlements.

16. IMPROVING MONITORING CAPACITY
Steps taken by the department to improve monitoring capacity internally, to enable independent verification of Municipal performance reports:
The department is currently reviewing the departmental structure to increase the monitoring capacity to enable independent verification of metros’ performance reports.
Practice Notes/Guidelines specifying mechanics of how the capital funds for operations will be used and the conditions under which it can be applied have been developed and upon approval with be circulated
Regionalisation has been proposed to ensure focussed monitoring.
A USDG panel involving key sector Departments is also being activated

17. Steps Taken To Revise the Monitoring Framework
The steps taken or progress made with regard to revising the monitoring framework of the USDG in order to standardise outputs, outcomes and performance indicators to enable comparative quality analysis of the USDG expenditure include:
The department has revised the monitoring framework from focusing solely on the USDG alone to monitoring the USDG as part of the entire capital budget of the Metros. There is a comparison of the USDG % expenditure with the overall capital % expenditure in the annual USDG performance report.
Outputs, outcomes and performance indicators have been standardised in the Departmental Monitoring and Evaluation Framework, the USDG DORA Framework and the USDG Performance Matrix to enable comparative quality analysis of the USDG expenditure.

18. THANK YOU