Annual Report 2014/15

Portfolio Committee on Human Settlements

14 October 2015

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Table of Contents

1. The SHRA’s Programmes2. Medium Term Expenditure Framework3. Planned Targets and Achievements4. Medium Term Strategic Framework 2014 – 20195. Additional Performance6. External Auditor’s Report7. Irregular Expenditure8. Statement of Financial Position9. Statement of Financial Performance10. Statement of Changes in Net Assets11. Cash Flow Statement12. Recalled Grant Funds (SHIP Projects)13. Programme Costs14. Challenges15. Provincial MTSF Targets

PERFORMANCESocial Housing Regulatory Authority’s Annual Report 2014/15

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1. The SHRA’s programmes

REGULATORYAccreditation

Compliance MonitoringEnforcement

INSTITUTIONAL INVESTMENT (from

the Institutional Capacity Building

budget)Approval,

administration and disbursement of the

Institutional Investment grant

Research, best practiceStakeholder Engagement

INVESTMENT MANAGEMENT

Approval, Administration and disbursement of the Restructuring Capital

Grant (“RCG”)

ADMINISTRATION

CouncilOffice of the CEO

Corporate Services

2. Medium Term Expenditure Framework

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* Reduced from R827 543 million with virement of R230 000 million to NHFC

BudgetActual Expenditure Budget Budget Budget

Financial year 2014/15 2014/15 2015/16 2016/17 2017/18Operational Budget

33 480 34 418 34 560 36 392 38 212

Capital budget 597 543* 43 971 932 307 1 036 409 1 110 514

Institutional Investment Capital Budget

n/a  n/a 41 936 40 183 38 489

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3. Planned Targets and Achievements

Programme Performance indicator

Audited/ Actual performance 2014

Planned Performance 2015

Qtr.1 Qtr.1 Qtr. 2 Qtr.2 Qtr. 3 Qtr.3 Qtr.4 Qtr.4

Annual Total

Variance

Target Actual Target Actual Target Actual Target Actual

1Number of SH units approved

2 279 5 668 2868 1432 2 800 3996 5398

The variance was -270 which equates to 5%.

There was only one performance indicator for 2014/15 due to operational budget constraints.

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Number of social housing units approved

5398 units approved (95%)

3. Planned Targets and Achievements

4. Medium Term Strategic Framework 2014 - 2019

The SHRA’s MTSF target for this five year period is the delivery of 27,000 social housing units.

The Department has split this target evenly over the five year period as follows:

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FY 2014/15 2015/16 2016/17 2017/18 2018/19 TOTAL

Target delivery of social housing units

5,400 5,400 5,400 5,400 5,400 27,000

Actual delivery of social housing units

2,053 2,053

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5. Additional Performance

Regulatory Programme• 61 social housing

institutions (SHI) were accredited– 8 fully accredited– 41 conditionally accredited– 12 pre-accredited

• 20,447 units under regulation

• 40% units are managed by fully accredited SHIs

Institutional Investment Programme

• Grants awarded:– 4 project acquisition and

feasibility grants– 4 pre-accreditation grants– 13 general capacity building

grants

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ANNUAL FINANCIAL STATEMENTSSocial Housing Regulatory Authority’s Annual Report 2014/15

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6. External Auditor’s Report

Audit opinion Unqualified

Emphasis of matter Going Concern (not qualified) - the Minister’s pronouncement about the SHRA being placed under Administration may cast doubt on the entity’s ability to operate as a going concern.

Compliance with laws and regulations

Reportable irregularities emanating from lack of a Corporate Services Manager which is a statutory position in terms of the Social Housing Act Section 8 (1) (c)

Expenditure management - the entity did not take effective steps to prevent irregular expenditure

Performance Information No material findings on usefulness and reliability of the reported performance information.

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7. Irregular expenditure

In terms of the Social Housing Act, No. 16 of 2008, the Council must consist of between seven and twelve non-executive members. During March 2014 to February 2015 and March 2015, the Council only comprised of six and five members respectively. Decisions taken by the Council during this period have been rendered invalid and the new Council will need to remedy these.

There was no fruitless and wasteful expenditure during the period under review.

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8. Statement of financial position

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9. Statement of financial performance

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10. Statement of changes in net assets

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11. Cash flow statement

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12. Recalled Grant Funds (SHIP Projects)

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13. Programme Costs

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14. Challenges

Challenges Mitigation Measures

Planned targets were based on approval vis-à-vis delivery of social housing units

As from 2015/16, planned targets are based on delivery of social housing units

Coordination with Provincial Authorities

Provinces have been given social housing delivery targets that correspond to the SHRA’s

Credible pipeline Provincial Steering Committees to assume responsibility in development of credible pipeline

Construction cashflow planning

Improved pipeline planning and enhanced coordination between Province and Municipality will improve cashflow predictions

Debt funding for SHIs NHFC’s social housing targets for loan approvals must align to the SHRA’s

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15. Provincial MTSF targets

In order to ensure the delivery of units, the Provinces have been provided with correlating targets as follows:

Province 2015/16 2016/17 2017/18

Target: delivery of social housing units

Target: delivery of social housing units

Target: delivery of social housing units

E Cape 392 392 392

Free State 387 387 387

Gauteng 1981 1981 1981

KZN 617 617 617

Limpopo 210 210 210

Mpumalanga 309 309 309

N Cape 570 570 570

NW 113 113 113

W Cape 822 822 822

TOTAL 5,401 5,401 5,401

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THANK YOU