PRESENTATION TO THEHUMAN SETTLEMENT PORTFOLIO

COMMITTEEOF PARLIAMENT – ANNUAL

REPORT 2009-10

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STRUCTURE OF THE PRESENTATION

• Aim, Vision and Mission of the Department

• Strategic Pillars

• Outcome 8

• Highlights of achievements 2009/10

• Summary of Departmental Performance for 2009/10

• Financial Performance 2009/10

• Challenges to The Department of Human Settlements 2009/10

• Remedial Action Plan

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Aim, Vision and Mission• Aim

The aim of the Department of Human Settlements is to determine, finance, promote, coordinate, communicate and monitor policy in respect of housing and human settlement.

• Vision

A nation housed in sustainable human settlements

• Mission

To facilitate an environment that provides sustainable Human Settlements.

STRATEGIC PILLARS

• Strategic Pillar 1: Mandated outcomes

• Strategic Pillar 2: Coordination and alignment in Human Settlements Development

• Strategic Pillar 3: Urbanisation and Spatial Management

• Strategic Pillar 4(a): Key service delivery (Shelter development) priorities

• Strategic Pillar 4(b): Shelter development governance

• Strategic Pillar 4(c): Shelter development reforms

• Strategic Pillar 5: Transformation and paradigm shift

• Strategic Pillar 6: Institutional realignment

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OUTCOME 8

• Improve the quality of household life in 400 000 Informal Settlement households by the provision of water, electricity, sanitation and tenure security.

• Facilitate the provision of 80 00 Rental and Social Housing units.

• Improve the property market by providing access to loan finance, to 600 000 households who earn too little to qualify for a government subsidy and too little to qualify for a mortgage loan, through the use of a R1 Billion Guarantee Fund.

• The release of 6250 hectares of public land for the development of human settlements, including provinces and municipalities.

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OUTCOME 8

• Improved access to household water from 92% to 100%

• Improved access to household sanitation from 69% to 100%

• Improved access to household refuse removal from 64% to 75%

• Improved access to household electricity from 81% to 92%

• The accreditation of a minimum of 27 municipalities, to carry out and plan, budget, support and implement housing programmes for the development of human settlements; and

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HIGHLIGHTS OF ACHIEVEMENTS 2009/10

• A conceptual document on the implication of the name change from Housing to Human Settlements was developed during the period under review.

• A Beneficiary Occupancy Audit, in seven of the nine Provinces was completed during the reporting period.

• The Department undertook three Impact Evaluation Studies to determine the impact of various housing programmes on the lives of Beneficiaries - The targeted programmes were the Rural housing Programme, the Social and Rental Housing Programme and the Upgrading of Informal Settlements.

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• The Department conducted the project-level monitoring process to verify and confirm delivery as reported by Provincial Human Settlements Departments.

• The Department initiated a process to develop a Human Settlement Index for SA in collaboration with UN Habitat.

• The Department has entered into agreements with, the Platinum Mines for possible roll out of projects in Limpopo and North West, Intersite for joint developments of land in and around railway stations, and the DBSA for technical support on priority and blocked projects.

• Department negotiated the signing of the agreement with the Department of Public Works that gives the Human Settlements department first right of refusal on any land being considered for disposal by DPW.

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• The National Upgrading Support Programme has been established and will provide support to municipalities in the in situ upgrading of informal settlements.

• A project process guide has been developed to guide implementers of projects in the housing process and would also serve as a project management and monitoring tool for project managers.

• The newly established Housing Development Agency (HDA), following the promulgation of the Housing Development Act, 2008 (Act. 23 of 2008) was made operational in the 2009/10 financial year.

• The Department in collaboration with the Rural Housing Loan Fund has finalised the development of an individual housing subsidy voucher scheme for persons who enjoy functional tenure rights to the land they occupy.

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• A process to develop standard and uniform business processes based on documented housing delivery processes has been initiated.

• The municipal accreditation programme has been activated by the assessment of the six Metropolitan Municipalities and four District Councils.

• In the international arena, South Africa was given a voice in the debate on human settlements through the African Ministerial Conference on Housing and Urban Development and the World Urban Forum.

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• A strategic risk assessment exercise was undertaken during November 2009 and January 2010 which incorporated IT, Fraud and strategic risk assessment through which the department identified, evaluated and allocated responsibility for managing and controlling the risks inherent to the Department.

• The composition of the Risk Management Committee has been reviewed in line with National Treasury Framework to include the branch heads as members of the committee. Furthermore an independent non- executive member has been appointed to Chair of the Risk Management Committee.

• The Department has managed to execute work as per the approved operational internal audit plan wherein it was found that the department has adequate systems of internal control, risk management and governance processes; however these systems were found not always to be effective.

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• Monitored external cases being investigated by Special Investigating Unit (SIU) in terms of the Presidential Proclamation R.7/2007.

• The Sectional Titles Schemes Management Bill and the Community Schemes Ombuds Service Bill were approved by Cabinet for public comment and a number of individual and organisational inputs on the two Bills were received.

• The Draft Rental Housing Regulations were finalised to support the effective and efficient administration of the Rental Housing Act.

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• The Draft Social Housing Regulations were finalised to support the application of the Social Housing Act.

• The Draft Legal Compliance Manual/Policy was finalised and the process of identifying a suitable software service provide to assist in the conducting of legal compliance was carried-out.

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• The new National Housing Code, which has aligned housing policy and programmes with the Comprehensive Plan for the Development of Sustainable Human Settlements (“Breaking New Ground”), was approved by MINMEC and the Minister in February 2009.

• The Farm Residents Housing Assistance Programme was approved by MINMEC and incorporated into the new National Housing Code, 2009.

• The policy framework for the Housing programme for persons with special housing needs was completed but still has to be deliberated with the Department of Social Development, because the placement of children with caregivers and the appointment of care-givers fall within the ambit of that department.

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• The Draft Framework for the Inclusionary Housing Policy was reviewed during the financial year, especially in view of the changes in the market and the impact that the envisaged programme might have on the already fragile middle- to higher-income segments of the housing market.

• The FLISP programme was revisited during 2009 with a view to refining it to promote its implementation. Comprehensive changes to the programme were formulated and tabled for consideration. However, the draft proposals for the revised programme were rejected owing to their substantial financial implications.

• Promoting the National Housing Code and Policy Advice to stakeholders. Regional workshops on the code were held with all provinces and their respective municipalities, and workshops were also held with other provinces and municipalities, housing institutions and the South African Local Government Association (SALGA),

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SUMMARY DEPARTMENTAL PERFORMANCE - 2009/10

Details ES CS HPRM HPDS HDF SRG Total

Total Target 51 27 22 46 29 78 253

Target Achieved 46 15 10 15 25 69 180Target not Achieved 3 0 0 4 0 4 11Partially Achieved 1 6 3 8 0 1 19Performance not determined 1 6 9 19 4 4 43Percentage Achieved 90% 56% 45% 33% 86% 88% 71%

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FINANCIAL PERFORMANCE 2009/10

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PROGRAMME PERFORMANCE

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Programme

Voted for 2009/10Roll-overs and adjustments Virements Total voted Actual expenditure Variance

Expenditure as a Percentage

(R’000)(R’000) (R’000) (R’000) (R’000) (R’000) (R’000)

1. Administration

198,540 -30,770 - 167,770 113,849 53,921 68 %

2. Housing Policy, Research and Monitoring

58,000 14,175 -5,000 67,175 44,971 22,204 67 %

3. Housing Planning and Delivery Support

138,486 31,020 - 169,506 98,589 70,917 58 %

4. Housing Development Finance

13,011,341 19,354 3,000 13,033,695 12,986,298 47,397 100 %

5. Strategic Relations and Governance

182,206 -17,547 2,000 166,659 126,654 40,005 76 %

Total

13,588,573 16,232 - 13,604,805 13,370,361 234,444 98 %

TRANSFERS TO PROVINCES

GRANT ALLOCATION TRANSFER SPENT

NAME OF PROVINCE/GRANT

Division of Revenue Act Roll -Overs Adjust-

ments Total Available Actual Transfer Amount spent by department

% of available funds spent by

dept

R'000 R'000 R'000 R'000 R'000 R'000 % Eastern Cape 1,313,378 1,313,378 1,313,378 1,313,378 100% Free State 962,759 962,759 962,759 962,756 100% Gauteng 3,187,086 3,187,086 3,187,086 3,117,107 98% KwaZulu-Natal 2,180,448 2,180,448 2,180,448 2,103,424 96% Limpopo 996,667 996,667 996,667 996,667 100%

Mpumalanga 795,447 795,447 795,447 760,277 96%

Northern Cape 325,011 325,011 325,011 325,011 100% North West 1,100,055 1,100,055 1,100,055 1,099,918 100% Western Cape 1,581,425 1,581,425 1,581,425 1,497,437 95%

KwaZulu-Natal (Disaster Relief Fund) 150,000 150,000 150,000 150,000 100%

Total 12,592,276 - - 12,592,276 12,592,276 12,325,975 98%

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PROGRAMME PERFORMANCE

• The Department spent R13.37 billion of the total R13.605 billion which is inclusive of transfers and subsidies.

• Excluding transfers and subsidies the total Departmental expenditure is 68 % of the operational budget.

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REASONS FOR UNDER SPENDING

• Implementation of cost saving measures related to travel and subsistence, advertising and related expenditure deemed not necessary.

• Late invoicing by SITA and the SIU.

• Under spending can also be attributed to the delay in printing of the National Housing Code.

• Delay in securing additional office space, which resulted in the funds provided for

leasing, refurbishment of offices, the moving of staff and the acquiring of furniture not being utilised.

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• A factor to under-spending is an amount of R34, 9 million that could not be transferred to the Social Housing Regulatory Authority as the process of establishing the institution could not be finalised by year end.

• The non availability of additional office space resulted in the non filling of vacancies and expenditure associated with posts could also not be achieved.

• Delays in the completion and implementation of the Community Outreach Programme

• Non-appointment of members of the members of the Office of Disclosure

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CHALLENGES SYSTEMS AND FUNCTIONS

• Quality of Human Settlements created – lack of services

• Land availability/market dynamics – 2.2 million backlog.

Relegating the poor to the urban periphery Subsidy constraints Building material and inflationary pressures

• Misalignment of funding streams – Bulk, & MDG targets

• Human Settlements functions and their locations

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CHALLENGESPROGRAMMATIC

Natural and macroeconomic variables:

• Mushrooming of informal settlements

• Disasters – floods/fires

• Skills and capacity constraints – Engineers/Project managers

• Building material inflationary pressures

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CHALLENGESPROGRAMMATIC

Beneficiary management challenges:

• Poor quality of houses

• Blocked projects

• Waiting lists management

• Title deeds transfers – discount benefit scheme

• Reporting on housing delivery to the HSS

• Fraud and corruption in housing delivery

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CHALLENGESSOCIO-ECONOMIC

• Rapid urbanisation and migration (Rural to Urban)

• Population growth

• household formation and diminishing size

• Informal settlement growth

• Lack of access to Basic Services

• Unbalanced property markets

• Un-sustainable development choices

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CHALLENGES BASIC SERVICES

• Household access to water

Remaining needs = 3.95mill Households

• Household access to sanitation

Current needs = 3,2mill households

• Household access to electricity (Energy)

Current needs =2,6mill households

• Refuse Removal (Once a week)

Current need= 4,56 mill households unserved

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CHALLENGES URBANIZATION AND DEMOGRAPHIC

TRENDS …

• The “dual residence” of some households (who maintain a rural base while sojourning in urban areas) is a deeply entrenched feature of many households

• Urbanisation is irreversible and GROWING

• Urban consolidation since the 1960s

• Informal settlements residents are largely address-less: this is another shackle in the residents’ exclusion

NOTE: Phenomenon of “shifting target” in the delivery of services

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CHALLENGES MACRO CONDITIONS IMPACTING

ON HUMAN SETTLEMENTS• Structural unemployment and informality

• Economic down-turn: diminishing access to housing finance (credit)

• Diminishing bulk infrastructure spare capacity

• Social and geographical disparities – inequality

• Inputs: costs / construction materials / capacity

• Built environment governance nexus…

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REMEDIAL ACTION PLAN 2010/11

• Annual Performance Plan 2010 – 11 – Review and revision of process session to ensure the Auditor-General’s matter of emphasis are redressed.

• Departmental strategic planning and monitoring workshops / information sessions to continue on quarterly basis.

• Issuing of exception letters by the Strategic Management Unit to ensure corrective measures are taken by management

• Branch Managers to conduct performance review sessions for their Branches and submit reports to the DG on a quarterly basis.

• Compulsory training on strategic planning and performance monitoring.

• Codification of strategic and performance plans for purpose of verification .

• Revise departmental planning and programme performance monitoring policy in line with the framework on strategic plans and annual performance plans by national treasury – August 2010.

• Modification of planning and reporting templates in line with the Framework for strategic and annual performance plans, October 2010

• Establishment of the compliance monitoring committee

• Departmental strategic planning and monitoring portals - Electronic performance monitoring system / EPMS to be introduced as part of the turn-around strategy.

• An action plan has been compiled based on the management letter of the Auditor-General and is being monitored by the Audit Committee of the Department.

• Exceptions related to systems and integrity of information are being addressed which will include the employment of a Chief Information Officer.

• Quarterly meetings bteween the Auditor-General , Director-General and Minister to monitor and oversee that the audit action plan is implemented.

THANK YOU

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