1. PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS
PRESENTATION ON THE 2010/2011 DEPARTMENTAL ANNUAL REPORT

2. Contents 1. Introduction and overview 2. Human Resources Management 3
Contents 1. Introduction and overview 2. Human Resources Management 3. Legal and Governance 3. Research, Monitoring, Evaluation and Capacity Building Support 4. Priority Project Support 5. Sanitation Programme 6. Intergovernmental Relations and Stakeholder Management 7. Human Settlements Entities Summary 8. Financial Report 9. Challenges 10.Proposed Interventions

3. Introduction and Overview

4. 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.

5. 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.

6. Human Resources Management

7. Personnel Employed and Vacancies
Programme
Number of Posts
Number 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

8. Annual Staff Turnover Rate
EMPLOYMENT AT BEGINNING OF PERIOD
(APRIL 2010)
Appointments
Terminations
Turnover rate
559
199 86
15.4

9. PERCENTAGE OF TOTAL RESIGNATIONS PERCENTAGE OF TOTAL EMPLOYMENT
Staff Turnover Rate
TERMINATION TYPE
NUMBER
PERCENTAGE OF TOTAL RESIGNATIONS
PERCENTAGE OF TOTAL EMPLOYMENT
TOTAL
Resignation 23
26.7
4.1 86
Expiry of contract 55 64
9.8
Transfers 1
1.2
0.2
Dismissal-misconduct
Retirement 6 7
1.1
100
15.4

10. NUMBER OF BENEFICIARIES
Performance Rewards
SALARY BAND
NUMBER OF BENEFICIARIES
COST (R’000)
Levels – 1-12
204
2855
SMS 14
603

11. Labour Relations Management
TYPE OF MISCONDUCT
NUMBER
Dismissal 1
Progressive discipline 6
Suspension without pay as a sanction
Pre-cautionary suspension 2
Strike Action 95

12. Training & Development
TYPE OF TRAINING
NUMBER
Generic & Short Courses
629
Internships 42
Learnerships – Public Management 24
Learnerships – Public Administration 16
Bursaries awarded 20

13. Legal and Governance

14. 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.

15. 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.

16. Special Investigations
The 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.

17. 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.

18. Research, Monitoring, Evaluation and Capacity Building Support

19. 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:

20. 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.

21. 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
beneficiaries were reached through the human settlements consumer education programmes sessions and print material

22. Priority Projects Support

23. Priority Projects Support
UNITS PLANNED
STATUS
COMPLETED
ESTIMATED PROJECT BUDGET
ESTIMATED 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
Chief Albert Luthuli X6 (Gauteng)
300
Province is undertaking the project
151
R17mill
R5 mill
Mokopane Ex 20 (Limpopo)
Ph 1 – 962 Ph
Province is undertaking project
962
R315mill
R83 mill
Grasslands (Free State) Ph Ph
Housing delivered but roads, and services yet to be finalised
5 699
Still to be provided

24. Priority Projects Support
UNITS PLANNED
STATUS
COMPLETED
ESTIMATED PROJECT BUDGET
ESTIMATED 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
3 137 units
R1.2 bill
R305 mill
Khutsong (Gauteng)
25 085
235 units
R3 bill
R259mill
Cornubia (KwaZulu-Natal)
24 800
Planning for Phase 1 complete. Tender for road construction to be advertised
R24 bill
R374 mill

25. Priority Project Support
UNITS PLANNED
STATUS
COMPLETED
ESTIMATED PROJECT BUDGET
ESTIMATED 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,
R670 mill
R140 mill
Sweetwaters (Gauteng)
2 698
Planning complete but progress will be stalled due to lack of bulk capability
Being calculated
R6,3 mill
Lufhereng (Gauteng)
25 000
In progress
907
R4,6 bill
R276 m
Drommedaris
1 588
Planning in progress
R160mill
R18mill
Cornubia (KwaZulu-Natal)
24 800
Planning for Phase 1 complete. Tender for road construction to be advertised
R24 bill
R374 mill

26. Sanitation Programme

27. Sanitation Unit Measure / Indicator Target Actual
No. Of households provided with basic sanitation services including buckets removal
7,418 households served through ACIP
11 000 households served through RHIP
8,426 served through ACIP
5,497 served through RHIP
No. Of jobs created through sanitation related projects
200 sustainable job created
275 sustainable jobs created

28. Intergovernmental Relations and Stakeholder Management

29. 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.

30. 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.

31. Human Settlements Entities Summary

32. 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.

33. 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

34. 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 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.

35. 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 hectares of state land was identified for evaluation for release for human settlements development focused on the Outcome 8 which requires the release of 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.

36. 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

37. Social Housing Registry Authority (SHRA)
Social Housing Regulatory Programme (“SHORP”)
A total of eighteen Social Housing Institutions were accreditated
Social 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.

38. 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

39. 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
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

40. Financial Report

41. Adjusted appropriation 2009/10
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

43. 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

44. 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

45. 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.

46. Expenditure per Programme - 31 March 2011Rm
Adjusted Allocation
Variance
% 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%

47. Total Departmental Expenditure as at 31 Mar 2011

48. Expenditure per Economic Classification - 31 March 2011
Total Allocation
Variance
% Spent 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%

49. Human Settlements Development Grant Allocation
Province
2010/11
Voted
Adjustment during year
 Total Adjusted Allocation
Total Available to Provinces
Provincial adjustments
National Adjustments
R'000
Human Settlements Development Grant
Eastern Cape
1,598,646 -
39,000
1,637,646
Free State
1,300,691
(263,000)
1,037,691
Gauteng
3,771,831
115,000
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
1,011,033
Northern Cape
273,260
174,000
447,260
North West
1,288,770
203
(100,000)
1,188,770
1,188,973
Western Cape
1,868,843
83,878
1,952,721
Total
15,026,763
207,675
15,000
15,041,763
15,249,438
Housing Disaster Relief Grant
Kwa Zulu Natal
133,800
Grant Total
15,160,563
15,175,563
15,383,238

50. 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
Human Settlements Development Grant
Eastern Cape
1,637,646
1,503,816
92%
133,830
Free State
1,037,691
1,037,685
100% 6
Gauteng
3,886,831
3,855,064
99%
31,767
KwaZulu-Natal
2,711,133
2,634,109
2,711,234
103%
-101
Limpopo
1,376,150
1,364,750
1,264,584
93%
111,566
Mpumalanga
1,011,033
975,863
104%
Northern Cape
447,260
472,944
106%
-25,684
North West
1,188,973
1,188,770
1,040,163
87%
148,810
Western Cape
1,952,721
1,868,843
1,940,037
12,684
Total
15,249,438
15,041,763
14,836,560
97%
412,878
Housing Disaster Relief Grant
Kwa Zulu Natal
133,800
Grant Total
15,383,238
15,175,563
14,970,360

52. Delivery – 01 April 2010 to 31 March 2011
Province
Serviced Sites
Targets
Serviced Sites Completed
Houses Targets
Houses Completed
Total
Annual Target
Total Delivery EC
8,000
12,979
22,000
10,784
30,000
23,763 FS
13,351
5,328
5,136
18,679 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
69,510
63,546
144,124
121,879
213,634
185,425

53. Challenges

54. 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.

55. 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.

56. Proposed Interventions

57. 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.

58. 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.

59. Thank You