Annual Performance Report – 2011/12 Portfolio Committee For Human Settlements Mr. T. Zulu

Annual Performance Report – 2011/12

Portfolio Committee For Human Settlements

Mr. T. ZuluDirector-General

Vision“A Nation Housed In Sustainable Human Settlements

With Access To Socio – Economic Infrastructure”Mission

“ To Establish & Facilitate A Sustainable Process That Provides Equitable Access To Adequate Housing For All

Within The Context Of Affordability Of Housing, Services, Access To Social Amenities & Economic Opportunities” ”

Contents

1. Overview of Performance2. Departmental Programme Performance3. Communication and Outreach key4. Delivery Agreement on Outcome 85. Job Creation6. Accreditation of Municipalities7. Turnaround Strategy8. Entities Report9. Financial Matters

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Overview of Performance

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1. The Department has achieved an unqualified audit

report with emphasis of matters on:

• Restatement of corresponding figures and

• Material under spending on Rural Household and Infrastructure Grant.

2. There is agreement that the matters of emphasis

are not systemic and there is commitment to

address the issues including the 30 day payment

rule and measurable performance indicators.


3. There is clearly a need to improve our procurement and asset management regimes and this includes:

• the establishment of a bid specification

committee to vet requests for proposals

and adverts.

• Further training for the staff members involved and establishing a distinct asset management unit.

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6

4. The Departments improved monitoring and oversight is yielding results with better accountability of Provinces

but this requires an holistic interspherical response – Legislature, Executive and Accounting Officers

5. This includes better business plan management and reporting.


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6. A process to improve accountability and alignment of the entities is also yielding results with better strategic alignment of entities performance to the priorities of government.

7. We started a process to improve policy responses and this includes the review of FLiSP as well as review and evaluation of the Departmental Programmes.

8. It is expected that the implementation of the turnaround strategy will see the results of a better programme and administrative response to government developmental priorities.


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9. Our intergovernmental processes have yielded good results including that with Parliament, Provinces and Municipalities .

10. Good progress has been made with the implementation of the USDG and aligning of Provincial and Municipal Human Settlements priorities with that of the National sphere.

11. A lot of work still has to be done in terms of improving Provincial and Municipal performances in respect of Outcome 8 and the Strategic Integrated Projects.

Departmental Programme Performance

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Programme / Sub-ProgrammeApproved Targets

Achieved(%)

Not Achieved (%)

Office of DG 8 4 (50) 4(50)

Corporate Services (CS) 25 16(64) 9(36)

Housing Policy, Research and Monitoring (HPRM)

16 10(63) 6(37)

Housing Planning and Delivery Support (HPDS)

70 36(51) 34(49)

Housing Development Finance (HDF)

13 11(85) 2(15)

Strategic Relations and Governance (SRG)

39 35(90) 4(10)

Departmental Total 171 112(65) 59(35)

Communication And Outreach

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Campaigns Launched

– “Each One, Settle One” Campaign – International Habitat Day– Sixteen Days of No Violence Against Women and Children – World Aids Day in Beaufort West


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Project Launches And House Handovers:

– Northam Affordable Housing Launch with Anglo Platinum– Msukaligwa in Mpumalanga – Southernwood Square Social Housing Project in Buffalo City – The Jabulani Hostel Re-development in Soweto– NHBRC International Housing and Home Warranty Conference Legacy

Project– Youth Build in Molemole, Limpopo – Klarinet Integrated Housing Project in Mpumalanga– China Square Project, Kimberley, Northern Cape– National Women’s Build in Brandfort, Free State Province


Stakeholder Events

- Vision 2030 Summit,

- Provincial Indaba’s and

- Provincial Youth Summits

- Alternative Technology in the Housing Programmes.

- The Govan Mbeki Human Settlements Awards

- A National Breakfast Session on Women’s Economic Empowerment with sector stakeholders

- The National Youth in Human Settlements Summit

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Progress Report on Outcome 8

• Fifth Programme of Action Progress report for Outcome 8 - up to 30 September 2011 - was submitted to the Technical Implementation Forum and the Implementation Forum and was approved for submission to relevant Cabinet Cluster.

• A detailed progress report for Outcome 8 was submitted to the Presidency for the Mid-Term Review.

• All relevant reports submitted to Cabinet for National Reporting on Outcome 8 and is included in the Presidency Web-Site.

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Progress on Outcome 8 Target Outputs

Upgrading of Informal Settlements

– 91 358 serviced sites– 22,8% of total target of 400 000 households

Rental Accommodation

– 11 334 units

– 14,2% of total of 80 000 units

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National Upgrade Support Programme

– 46 (94%) out of 49 targeted Municipalities offered technical assistance;

– Six Provincial NUSP structures have been established (EC, KZN,LP, MP, NC and WC);

Accreditation of Municipalities

– 17 municipalities assessed by Capacity and Compliance Assessment Panel and are awaiting MEC’s approval to be awarded with accreditation compliance certificates;

– First tranche payments of USDG made to relevant Metropolitan Municipalities

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Access to Basic Services

– Sanitation: 2011/12 up to 30 September 2011 provided 158 337 households with access to sanitation facilities, bringing total since April 2010 to 418 709 households;

– Based on Cabinet Lekgotla decision, operational plans are developed to target areas where backlogs are the highest.

Release of Land for human settlement development

– The HDA has identified and assessed over 17 000 ha of state land for suitability for release in 2011/12 up to 30 September 2011;

– Total of 1 066 ha has been released to Municipalities while 1 329 ha is in advance stages of release.

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Progress Report on Outcome 8Increased Urban Densities

– National Department developed policy document to address the dynamics of Built Environment, will assist provinces and municipalities with increased densities

– HDA identified 309 properties – 812,83 ha owned by Transnet for development of medium to high density

– Also developing mechanism to ensure that well located land released developed in accordance with higher density.

Land-Use Management Framework

– Department of Rural Development and Land Reform released “Spatial Planning and land Use Management Bill for public consultation;

– Comments received analysed and Department of Rural Development and Land Reform will engage key stakeholders to revise the Bill.

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Mortgage Default Insurance Guarantee

– Concurrence from National Treasury is required to affirm the safety of the institutional arrangements to launch the MDI into the financial markets;

– All commercial banks have confirmed interest in supporting project implementation

– The consolidation of the Human Settlements Development Finance Institutions has been approved and relevant approvals being obtained including National Treasury and Cabinet.

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Sustainable Human Settlements and Basic Services Task Team

– Convened jointly by COGTA and NDHS and reports on:

a) Rapidly Growing Towns and Cities;

b) Informal Settlement Upgrade Programme in the 45 municipalities;

c) Progress Report on the 23 Rural Municipalities identified by the Cabinet Lekgotla of June 2011;

d) Report by the Presidential Infrastructure Commission on SIP 7

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Job Creation

• The delivery of 116,056 completed houses and 56697 serviced cites from April 2011 to 31 March 2012 has created 81,868 employment opportunities.

• The information above is based on employment definition of one person employed for a period of one year.

• The employment opportunities created during the financial year 2011/12 is estimated to be 54031 direct jobs

• A further 27,838 indirect jobs created from the suppliers of building material as well as expenditure from income of employees.

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Accreditation Of Municipalities

• To date a total of twenty Municipalities within Mpumalanga, Limpopo, Northern Cape, Kwa-Zulu Natal and North West Provinces have been assessed.

• An overall framework aligning the process to government instruments has been produced

• A road map that outlines the key processes that has to be undertaken by the parties is in place and been implemented.

• A legislative review of powers, functions and delegations was initiated • A monitoring and evaluation tool and toolkit was approved for production.• The operation funding model for accredited municipalities was approved for

investigation by MinMec• Successfully achieved consensus with FFC on a financial framework plan.

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Accreditation Of Municipalities

Challenges include:

– No Implementation Protocols signed by December deadline– Funding framework remains major issue & query over role of Districts

in accreditation based on powers & functions as contained in legislation.

– Provinces & Metropolitan Municipalities still to agree on capacity & support plans & leverage assistance e.g. COGTA, National Treasury, and Provincial Treasuries

– Provinces still to gazette municipal allocations

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Turnaround Strategy

• The Turnaround Strategy prepared for the Department was approved by the Minister.

• An organizational structure underpinning the strategy was approved by the Minister of Human Settlements and Minister of Public Service and Administration.

• A process of filling vacancies was approved.

• A process of aligning the turnaround strategy with the strategic and annual performance plan as well as budget structure has commenced.

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Rural Household Infrastructure Programme

PROGRESS PER PROVINCE – 2011/12

Province Allocation: 2011/12(R’000)

Number of Benefitting

municipalities

Estimated Target

Number of Toilets

Toilets completed at

31 March 2012

% Completion

Eastern Cape R65,000 13 7 458 7 129 99.9%

Free State R10,000 3 1 139 936 87.8%

Limpopo R48,000 12 3 612 2 015 61.6%

KwaZulu Natal R68,500 15 6 753 5 920 84.8%

Mpumalanga R8,000 2 950 372 91.5%

Northern Cape R4,000 1 374 320 73.8%

North West R28,000 7 2 788 2 533 78.5%

Grand Total R231,5 53 23 074 19 225 83.3%

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RHIP Financial Performance 2011/12 Financial Performance 2011/12

Province 2011/12 Allocation & Rollovers

R

Expenditure at 31 March 2012

RBalance

R

KwaZulu - Natal 80 487 091 63 207 997 17 279 094

Eastern Cape 65 000 000 55 868 072 9 131 928

Limpopo 54 552 091 26 688 032 27 864 059

North West 30 063 533 22 711 497 7 352 036

Free State 12 924 676 8 548 344 4 376 332

Mpumalanga 10 086 447 7 943 553 2 142 894

Northern Cape 4 394 162 2 298 425 2 095 737

Total 257 508 00 187 265 920 70 242 080

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Rural Household Infrastructure Programme intervention measures – The Department conducted a quantity survey study to identify challenges and

ways of resolving them in order to improve the performance of the RHIP programme

Revision of the Sanitation Policy– Versions 1.0; 2; 3 and 4.0 were developed

– Extensive consultation with stakeholders conducted

Job creation

– A total number of 4 726 jobs were created through RHIP

Health and Hygiene Education– 24 470 households reached with Health and Hygiene education through RHIP

RHIP Outcomes and Achievements

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Free Basic Sanitation (FBS) Strategy Roll Out

– FBS rolled out to 16 Water Services Authorities– FBS implementation guideline developed– A draft FBS best practices and international benchmarking

completed

Post 94 Bucket Eradication

– Post 94 formal bucket backlog confirmed

RHIP Outcome and Achievements

Entities Performance

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Social Housing Registration Authority

• The Social Housing Regulatory Authority fully established and operational• The appointment of the Council and the establishment of Council

Committees were completed in the 2011/12 financial year.• A total of 4 127 rental units were approved for funding.• The entity approved 4 and conditionally approved 14 applications for

institutional accreditation. • 18 Institutional grants were approved. • Agreements were signed with NHFC, NURCHA, Kwa Zulu Natal, Eastern

Cape and the North West Provincial Department of Human Settlements. • 6 Project launches including two by the Minister of Human Settlements)• The Regulations for the Social Housing as per the Social Housing Act were

finalized.

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Housing Development Agency

• In the 2011/12 financial year the HDA identified 35,219.6132 hectares of state and State Owned Enterprise (SOE) land for release for human settlements purposes.

• A total of 13,598 hectares have been formally submitted for release from custodian departments and the approval for release from the relevant departments is pending.

• The HDA provided project support services, PHDA framework development and capacity building support for 42 projects initiated by national departments, provincial departments and municipalities.

• 7 implementation protocols maintained and/or concluded; 5 signed agreements concluded and/or maintained; with 9 prepared and pending signature against an annual target of 15

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National Urban Reconstruction Housing Agency

• In 2011/2012 NURCHA reported an improvement from the previous year despite the subdued market conditions that existed in the residential market.

• The organizational focused to contribute effectively to the Outcome 8 targets and restoring sustainability to NURCHA business. This included growing the affordable housing programme to be a catalyst in the “Gap” housing market, establishing new financing partnerships and collaborating with Provincial Departments on fund and programme management services.

• The entity has also leveraged R292 million from new funding partners

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• The NURCHA has achieved growth in the gap funding. 60% of NURCHA’s affordable housing portfolio is now in the affordable housing market (2 246 units) whilst 32% is affordable housing and sectional title units make up 8% of the loan book.

• The Entity intends to intensify its financing operations within the sectional title environment in the next financial year.

• With regards to outlining the organizational focus to contribute effectively to outcome 8 targets through affordable housing, the entity has signed loans amounting to R279 million in one year, achieving the R1 billion loan mark of loans issued since inception, which has resulted in the creation of 26 980 affordable housing units.

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Rural Housing Loan Fund

• During the period under review, RHLF continued to perform within its mandate by concentrating its efforts in rural areas, with 82, 3% of its total loans being awarded in the rural areas, against a target of 80%.

• It is evident from the reported performance of RHLF that the lower end of the credit market continues to be significantly indebted.

• The entity has also managed to curb leakage, and ensured that 89, 6% of the total loans awarded are used for housing purposes, against a target of 80%.

• Out of the 47 043 loans awarded, 4% was used for building of new houses, 12% was used for extensions, 71% was used for home improvements and 3% was used for services.

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National Home Builders Registration Council

• The NHBRC hosted an International Housing and Home Warranty Conference (IHHWC) from 25 September 2011- 28 September 2011, which focused on international good practice and policy .

• The Council is currently reviewing the Housing Consumers Protection Measures Act (1998) to address any misalignment with other legislative prescripts, such as the Public Finance Management Act (1999) and the Consumer Protection Act (2008).

• The NHBRC has also embarked on a strategy that all units constructed in the Republic should be inspected and that all PHP projects and Rural projects should be inspected by the NHBRC whether enrolled or not.

• The registration of new home builders dropped down by 26 percent as compared to the previous financial year and this is due to home builders failing to meet the minimum technical and financial requirements, as well as the economic recession which has an impact in the construction industry.

• The Department commenced with the revision of the board and stabilization measures for better performance.

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• The NHBRC registered 2 686 new home builders during the 2011/12 financial year.

• A total of 37 671 homes were enrolled against 33 171, which is 14 percent above budget. However, NHBRC is still facing challenges with a number of provincial departments of Human Settlements in terms of ensuring that all projects are enrolled timeously.

• A total of 102,625 homes were inspected in the non-subsidised sector.

• A total of 86 projects were received for project enrolment of which a total of 49,070 units were approved for project enrolment.

• A total 583 projects for home enrolment of which a total of 161,411 units were approved for home enrolment.

• The entity conducted a total of 204,933 inspections and a total of 114,000 homes were inspected in the subsidy sector.

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National Housing Finance Corporation

• The 2011/12 year has been characterized by the success of the leveraging initiatives and partnerships with the private sector.

• The Corporation was able to leverage R2 billion which together with disbursements of R664 million contributed to the annual budget of the overall funding impact being exceeded by 32%.

• A total of 11 682 housing opportunities were created against a budget of 16 684.

• The Corporation achieved 80% of the value of approvals budget of R1 billion. The pipeline continues to be robust and of note are the different structures such as applicants whose assets are mostly held in trusts.

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National Housing Finance Corporation

• The Corporate Plan for the Mortgage Default Insurance Company was approved by the Board.

• The key focus is now towards the completion of the application to the Financial Services Board for the insurance license

• Engagement with lenders individually as well as at industry level through the Banking Association of South Africa continues. Teams comprising of representatives of various lenders were established to consider product profiles, pricing and business processes. Discussions are also underway towards the planned pilot of the MDIC with one of the banks.

• The required consultation with National Treasury on the R1 Billion government guarantees, and the R150 million capitalization of the MDIC, has commenced.

Financial Report

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2011/12 Final Adjusted Allocation

ProgrammesOriginal

AllocationR’000

Roll-OversR’000

Additional fundsR’000

VirementsR’000

Total Adjustments

R’000Final Allocation

R’000

1. Administration 232,435 0 676 -11,000 -10,324 222,111

2. Housing Policy, Research and Monitoring 39,215 0 227 0 227 39,442

3. Housing Planning and Delivery Support 156,163 31,135 713 12,000 43,848 200,011

4. Housing Development Finance 21,995,147 26,008 180,344 -4,000 202,352 22,197,499

5. Strategic Relations and Governance 155,535 7,496 447 3,000 10,943 166,478

Total 22,578,495 64,639 182,407 0 247,046 22,825,54140

Adjustments

• Rollovers Approved from 2010/11 to 2011/12

– R64,5 million approved– R31,1 m (ACIP); R26 m (RHIP); R3,1 m for Turnaround

Strategy Development; and R4,3 m for SITA Infrastructure Services.

• Additional funds

– R180 million for disaster relief;

– R2,4 million for higher salaries adjustments.

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Programme Expenditure - 31 March 2012

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Programmes

Adjusted Allocation

1R’000

Expenditure2

R’000

Variance= 1- 2

% Spent

1. Administration 222,111 167,552 54,559 75%

2. Housing Policy, Research and Monitoring

39,442 32,954 6,488 83%

3. Housing Planning and Delivery Support

200,011 187,350 12,661 93%

4. Housing Development Finance

22,197,499 22,105,620 91,879 100%

5. Strategic Relations and Governance

166,478 105,444 61,034 63%

Total 22,825,541 22,598,920 226,621 99%

Transfer Payments - 31 March 2012

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Transfer PaymentsAdjusted Allocation

R000

ExpenditureR000

VarianceR000

% Spent

Human Settlements Development Grant 14,941,516 14,941,516 0 100%

Rural Households Infrastructure Development 257,508 172,874 84,634 67%

Urban Settlements Development Grant 6,266,998 6,266,998 0 100%

Housing Disaster Relief Grant 180,000 180,000 0 100%

Social Housing Regulatory Authority: Operational

19,305 19,305 0 100%

Rural Housing Loan Fund 49,500 49,500 0 100%

Housing Development Agency 89,100 89,100 0 100%

National Urban Reconstruction and Housing Agency

100,000 100,000 0 100%

Social Housing Foundation 3,018

- 3,018 0%

Social Housing Regulatory Authority: Capital Restructuring Grant

226,169 226,169 0 100%

Total 22,133,114 22,045,462,242 87,652 100%

Human Settlements Development Grant

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ProvincesTotal

Available

1 April 2011 - 31 March 2012

Transferred Funds

Spent by Provinces

Spent vs. Total

Available Spent as %

of Total Available

Unspent as % of

Total Available R'000 R'000 R'000 R'000

Eastern Cape 2,177,676 2,177,676 1,897,076 280,600 87% 13%

Free State 913,907 913,907 903,431 10,476 99% 1%

Gauteng 3,804,611 3,804,611 3,786,015 18,596 100% 0%

KwaZulu-Natal 2,769,871 2,769,871 2,769,872 -1 100% 0%

Limpopo 1,398,914 1,398,914 1,259,394 139,520 90% 10%

Mpumalanga 916,677 916,677 916,673 4 100% 0%

Northern Cape 322,639 322,639 322,617 22 100% 0%North West 998,376 998,376 1,148,708 -150,332 115% -15%Western Cape 1,638,845 1,638,845 1,635,001 3,844 100% 0%

Total 14,941,516

14,941,516

14,638,787

302,729 98% 2%

Non-Financial Performance - HSDG

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ProvinceAnnual Delivery Targets

Delivery Performance as at 31 March 2012

Variance Delivery sites

Variance Delivery Top

StructureTotal Variance

DeliverySites(units)

Top Structure

(units)

Total Delivery Targets Sites

Top Structure (units)

Total Delivery Performance

Eastern Cape 15,660 15,419 31,079

5,990 14,498

20,488

(9,670)

(921)

(10,591)

Free State

7,680 7,526 15,206 7,400 9,070

16,470

(280)

1,544

1,264

Gauteng 15,606 34,294 49,900

15,803 22,521

38,324

197

(11,773)

(11,576)

KwaZulu-Natal

8,860 25,587 34,447 5,426 22,119

27,545

(3,434)

(3,468)

(6,902)

Limpopo

3,000 13,410 16,410 1,752 13,619

15,371

(1,248)

209

(1,039)

Mpumalanga

8,235 10,394 18,629 1,515 7,702

9,217

(6,720)

(2,692)

(9,412)

Northern Cape

1,530 3,480 5,010 1,456 3,683

5,139

(74)

203

129

North West

8,688 17,883 26,571

10,559 16,333 26,892

1,871

(1,550)

321

Western Cape 13,085 12,640 25,725

8,686 11,065

19,751

(4,399)

(1,575)

(5,974)

Total 82,344 140,633 222,977

58,587 120,610

179,197

(23,757)

(20,023)

(43,780)

Non-Financial Performance - HSDG

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Delivery Variables/Milestones Amount (R)

Emergency Housing 59,800,422

Rectification Programme 397,316,343

OpsCap 115,643,759

Feasibility Studies 29,950,917

Geo-tech Evaluation 1,092,024,404

Housing Planning 567,888

Land Purchases 524,145,896

Total 2,219,449,629

Urban Settlements Development Grant

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MunicipalitiesTotal Available

1 July 2011 - 31 March 2012

Transferred Funds

Spent by Municipality

Spent vs. Total

Available Spent as % of Total Available

Unspent as % of

Total Available

R'000 R'000 R'000 R'000

Buffalo City 423,446 423,446

79,699 343,747 19% 81%

Nelson Mandela 502,626 502,626

262,195 240,431 52% 48%

Mangaung 411,995 411,995

163,153 248,842 40% 60%

Ekurhuleni

1,094,276 1,094,276

504,305 589,971 46% 54%

City of JHB

1,027,970 1,027,970

470,176 557,794 46% 54%

City of Tshwane 891,081 891,081

349,874 541,207 39% 61%

eThekwini

1,091,574 1,091,574

558,323 533,251 51% 49%City of Cape Town

824,030 824,030

287,972 536,058 35% 65%

Total 6,266,998 6,266,998 2,675,697 3,591,301 43% 57%

Comment on Matters of Emphasis

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• Creation of commitments is now done differently as recommended by the audit team and contingent liabilities are now correctly disclosed

• The performance of the Rural Sanitation Programme is receiving attention and systems and measures are in

place and it is expected the improved governance and programme performance will come through in the financial years to come.

Comment on Matters of Non-Compliance

• Payments Made in respect of the 30 day prescripts– A process has been put in place to address the issue and

matters identified by the Auditor-General are receiving attention.

• Irregular Expenditure– The procurement matters identified have been addressed

and matters of interpretation corrected and aligned to Treasury Practice Notes.

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Thank You

Annual Performance Report – 2011/12 Portfolio Committee For Human Settlements Mr. T. Zulu

Documents

Transcript of Annual Performance Report – 2011/12 Portfolio Committee For Human Settlements Mr. T. Zulu