The Budgetary Review and Recommendation Report of the Portfolio Committee on Human Settlements for 2011, dated 20 October 2011

1. Introduction


In 2009, the President assented to the Money Bills Amendment Procedure and Related Matters Bill.. The Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009) came into effect on 16 April 2009. The Act aims to provide for a procedure to amend money Bills before Parliament. In broad terms, the Act provides the procedure for Parliament to amend the budget, which includes the annual Division of Revenue Bill (although the bill is not classified as a money bill in terms of the Constitution), the Annual Appropriation Bill and the Adjustments Appropriation Bill. Provision is also made for the procedure to amend other money Bills.


In light of the need to speed up progress on South Africa’s developmental challenges, government is shifting to targeted outcomes. To improve service delivery and increase accountability, the Presidency announced the adoption of 12 measurable outcomes, which will become the focus of policy and implementation. These objectives, with associated and defined targets, should be reached by 2014, of which Outcome 8 speaks directly to the Human Settlement targets.


The Department of Human Settlements was formerly known as the Department of Housing and this change came about during the reconfiguration of certain departments by the new Cabinet in 2009. In addition, the sanitation function which used to be under the former Department of Water Affairs and Forestry was transferred to the Department of Human Settlements.


The Portfolio Committee on Human Settlement’s Budgetary Review and Recommendation Report (BRRR) is based on its engagement with the following documentation:


  • 2010 State-of-the-Nation Address.
  • Department of Human Settlements Annual Report 2010/11.
  • Department of Human Settlements Departmental 5-year Strategic and Performance Plans – 2010/13.
  • Portfolio Committee on Human Settlements oversight reports for KwaZulu-Natal, Free State and Mpumalanga provinces, including regular interactions with the Department through briefing sessions.
  • Report of the Auditor-General to Parliament on the Financial Statements of Vote No. 31: National Department of Human Settlements for the year ended 31 March 2011.
  • Financial and Fiscal Commission Recommendations of 2012/13 Division of Revenue Bill in the Housing Sector.
  • National Treasury: Statements 1 April 2009 – 31 March 2010.
  • Briefing by the Ministry in the Presidency: Performance Monitoring and Evaluation on views and observations towards the achievements of Outcome 8.


Entities reporting to the National Department of Human Settlements:


  • National Urban Reconstruction and Housing Agency. Annual Report 2010/11.
  • National Home Builders Registration Council. Annual Report 2010/11.
  • National Housing Finance Corporation. Annual Report 2010/11.
  • Housing Development Agency. Annual Report 2010/11.
  • Rural Housing Loan Fund. Annual Report 2010/11.
  • Social Housing Regulatory Authority. Annual Report 2010/11.


1.1   The role of the Committee


The mandate of the Portfolio Committee on Human Settlements is to:


·         Consider legislation referred to it;

·         Initiate amendments to legislation;

·         Exercise oversight over the Department of Human Settlements, its entities and implementing agents;

·         Consider international agreements referred to it;

·         Consider the budget vote and annual reports of the Department of Human Settlements, its entities and implementing agents;

·         Facilitate public participation in its processes;

·         Facilitate appointments to statutory bodies, where applicable;

·         Consider all matters referred to it in terms of legislation, the Rules of Parliament or resolutions of the House;

·         Learn from international best practices through study tours, etc;

·         Participate in international programmes, activities and capacity building programmes.


1.2   The Department


The mandate of the Department of Human Settlements is to determine, finance, promote, co-ordinate, communicate and monitor the implementation of housing policy and human settlements.[1] Since the formulation of the Comprehensive Housing Plan in 2004, the Department has conducted various initiatives to enhance the creation of comprehensive, integrated, co-ordinated and sustainable human settlements and quality housing. These initiatives include the review of the National Housing Code which determines national norms and standards in respect of housing development, as well as the provision of the Farm Worker/Occupier Housing Assistance Programme, and the establishment of the Housing Development Agency. Subsequently during the course of January 2010, Cabinet approved an outcome-based approach to the mandate of the Department with the adoption of Outcome 8 – Sustainable Human Settlements and Improved Quality of Household Life. Section 26 of the Constitution of the Republic of South Africa, 1996, and the Housing Act (No. 107 of 1997) are still considered the foundation for the operational models and the spending focus of the Department.


2. Department’s Strategic Priorities and Measurable Objectives


2.1 Strategic Priorities of the Department


The Department has five strategic objectives that are aligned with each programme, as follows:

·         Strategic objective 1: Provide strategic leadership, administrative and management support services to the Department.

·         Strategic objective 2:  Develop and promote human settlements and housing policies supported by a responsive research agenda and monitor and assess the implementation, performance and impact of national housing policies and programmes.

·         Strategic objective 3:  Support implementation and delivery, build capacity, liaise and communicate with stakeholders for effective housing and human settlements programmes, and co-ordinate and monitor the implementation of priority projects and the sanitation programme.

·         Strategic objective 4:  Fund housing and human settlement development programmes, provide financial and grant management services, promote investment in housing finance, mobilise and promote financial probity within housing institutions, and manage all matters provided for by the Home Loan Mortgage Disclosure Act (2000).

·         Strategic objective 5: Co-ordinate the Department’s mandate within the inter-governmental relations framework, manage international relations and promote good governance practices within the Department and its public entities. Provide timely and integrated business information to the Department.

Each programme has a number of sub-programmes, strategic objective statements and measures.

2.2 Measurable Objectives of the Department


Strategic goal 1:


Administration: Provides strategic leadership, administrative and management support services to the Department.


Strategic objectives and measures:


·         Executive Support Services provides executive support.

·         Internal Audit, Risk Management and Special Investigations co-ordinate the provision of Internal Control, Risk Management and Special Investigations services.

·         Corporate Support provides corporate support to the Department that will enhance a quality work life in terms of acquisition of office accommodation, security services and records management services.

·         Human Resource Management manages and provides human resource administration, organisational design and performance management, labour relations and human resource development.

·         Information Technology and Systems provides information technology systems, services, infrastructure and business application support in the Department.

·         Legal Services provides legal services in the Department which includes the development of human settlements legislation.


Strategic goal 2:


Housing Policy, Research and Monitoring: Manages the development, promotion, monitoring and evaluation of sustainable human settlements policies and programmes supported by responsive research.


Strategic objectives and measures:


  • Policy develops national human settlements and housing policies and provides policy formulation and interpretation assistance. The subprogramme also maintains the National Housing Code. 


  • Research initiates, undertakes and manages responsive research on integrated human settlements. 
  • Monitoring and Evaluation monitors, evaluates and assesses the implementation, performance and impact of national housing policy and programmes.




  • Promote sustainable human settlements by developing and implementing housing policies and programmes that meet best practice benchmarks on an ongoing basis.
  • Ensure that housing policies are effectively implemented by monitoring the number of houses and the number of subsidy instruments implemented by provinces and the impact of these instruments on housing beneficiaries.  This is reported on annually by entities.
  • Ensure that policies are responsive through continuous research, programme review, and evaluations, measured by the number of research reports and best practice determinations on an ongoing basis.


Strategic goal 3:


Housing Planning and Delivery Support: Supports implementation and delivery, build capacity, and liaises and communicates with stakeholders for effective housing and human settlement programmes.


Strategic objectives and measures:


  • Programme Implementation Support provides support to provinces and municipalities to implement housing and human settlement projects and upgrade informal settlements.
  • Rental Housing and People’s Housing Process manages the implementation of the social and rental housing programme and the People’s Housing Process.
  • Stakeholder Mobilisation manages relations, mobilises, and collaborates with stakeholders in the non-government sector.
  • Capacity Development builds capacity for housing administration and delivery in municipalities and provinces and promotes sustainable housing delivery and community empowerment.
  • Priority Projects Facilitation is responsible for managing priority housing and human settlement projects nationally. These projects are funded from provincial budgets.
  • Human Settlement Planning is responsible for managing human settlement planning processes and supporting the implementation of human settlement and housing development frameworks. This subprogramme was moved from Housing Policy, Research and Monitoring.
  • Sanitation Services promote universal access to sanitation services by managing and administering the sanitation programme.



  • Improve multi-year human settlements development planning by assisting provinces and municipalities to develop comprehensive business plan, by aligning municipal development plans and provincial annual performance plans and by reporting on an annual basis.
  • Improve the delivery rate of housing projects, including blocked projects, by providing technical support to provinces and municipalities on a continuous basis.
  • Facilitate rental and social housing uptake and accelerate People’s Housing Process programme by providing regulatory and implementation support to increase the delivery of rental and social housing and People’s Housing Process units on an ongoing basis.
  • Improve private stakeholder participation and collaboration by increasing the number of joint partnerships with private stakeholders on an ongoing basis.
  • Provide on-site rural sanitation and water harvesting and monitor programme delivery at local government level by developing an on-site rural household infrastructure programme.
  • Develop professional and institutional capacity at provincial and municipal levels by managing training and skill development, measured by availability of capacity to undertake roles and responsibilities within applicable standards on an ongoing basis.
  • Facilitate the development of integrated human settlements by providing implementation and oversight support for priority projects, measured by their timely completion and speedy resolution of bottlenecks on an ongoing basis.


Strategic goal 4:


Housing Development Finance: Funds housing and human settlement development programmes, provides financial and grant management services, promotes investment in housing finance, mobilises and promotes financial probity within housing institutions and manages all matters provided for by the Home Loan and Mortgage Disclosure Act (2000).


Strategic objectives and measures:


  • Financial and Funds Management provides overall financial and grant management services, including financial support, internal control, supply chain management and budget management, as well as grant management services and systems support. Funding is mainly used for salaries and other personnel-related costs.
  • Housing Equity manages activities related to the office of disclosure, housing aspects of the Financial Services Charter, and mobilising and promoting investment for housing development. Funding is mainly used for salaries and other personnel-related costs.
  • Integrated Housing and Human Settlement Development Grant reflects the conditional grant allocation that is transferred to the provinces. Funding is provided on the basis of housing needs, the number of households earning less than R3 500 per month, and the population in the province.
  • Rural Household Infrastructure Grant supports the development of infrastructure for sanitation services at provincial level.
  • Contribution makes contributions to the housing institutions. Funds are transferred on the basis of a public entity meeting the governance and financial management requirements stipulated in the Public Finance Management Act (1999).




  • Improve access to end user finance by collaborating with the financial sector to develop mechanisms to increase market penetration, measured by the number, value and terms of loans to low and medium-income households.
  • Improve the expenditure efficiency of provinces on housing delivery and sanitation services by providing ongoing financial and grant management support for the human settlements development grant and the rural households infrastructure grant as well as ongoing business planning and reporting support, in line with the Division of Revenue Act, so that provinces are able to use all transferred funds.
  • Ensure financial management by maintaining adequate controls and systems, measured by compliance with regulations and established practices, on an ongoing basis.


Strategic goal 5:


Strategic Relations and Governance:  Co-ordinates the Department’s mandate within the intergovernmental relations framework, manages international relations, and promotes good governance practices within the Department and its public entities, and provides timely and integrated business information to the Department.


Strategic objectives and measures:


  • Management Information Services manages the development and implementation of integrated business solutions and data and information, and provides knowledge services.
  • Intergovernmental Relations and International Relations facilitates the Department’s participation in and management of international and intergovernmental relations.
  • Communication manages communication and public relations.
  • Housing Institutions provides oversight management of housing institutions, including monitoring, analysing and reporting on financial and non-financial performance and corporate governance.
  • Strategic Management manages overall organisational planning and supports the strategic management and operations of the Department.
  • Transformation develops and manages transformation programmes in compliance with the national policy framework and international human rights’ instruments and directives.
  • Contributions make contributions to the housing institutions and the Habitat Foundation to support the work of the United Nations human settlement programme.




  • Oversee the management of housing institutions through performance and corporate planning monitoring as well as through policy advocacy and governance oversight, measured by compliance with regulations and delivery on mandates.
  • Provide integrated business solutions and support as well as business information and related products by maintaining the housing and human settlements databases, measured by availability of accurate information, data and solutions.
  • Ensure an integrated communication services through public information and marketing, corporate communications, and media relations, measured by sustainable awareness and knowledge and information dissemination that empower stakeholders within and outside the Department.
  • Provide strategic and governance management support by co-ordinating transversal programmes, measured by adequate comprehensive risk management, internal auditing, programme alignment, and monitoring.


3. Analysis of the Department’s Prevailing Strategic and Operational Plan


Programme 1 – Administration


The purpose of the programme is to provide strategic leadership and administrative and management support services to the Department and promote and facilitate the flow of information between the Department and its stakeholders.



It has been reported that bulk verification of qualifications was conducted, including matric for all employees who are permanently employed. Two bills were processed and passed by Parliament i.e. the Sectional Titles Schemes Management Bill and the Community Schemes Ombud Service Bill.


The appointment of officials on contract and interns were made to ensure that service delivery is not hampered by the turnaround process.


Outcomes in monitoring external cases being investigated by Special Investigating Unit (SIU):


1.         Subsidies: municipal employees

·         401 municipal employees were arrested and 334 court cases were finalised.

·         860 acknowledgements of debt to the value of R8.2 million were signed by municipal employees who defrauded the Housing Subsidy System.

·         No disciplinary cases prepared by the SIU were dealt with.


2.         Subsidies: Government employees

·         936 Government officials were arrested and 871 were convicted. Different penalties were handed down from suspended sentence and some with condition to repay subsidy amounts.

·         1615 acknowledgement of debt to the value of R21.7 million were signed by civil servants who defrauded the housing subsidy.

·         1588 disciplinary files involving Government officials were prepared during the period under review. A joint process with the Department of Public Service and Administration for co-ordinating disciplinary action against civil servants who have unlawfully benefited from low income housing subsidies has commenced.

·         The department has to date a total amount of R17.8 million. This figure is a consolidation of both Government and municipal employees.


3.         Housing Contracts: two housing contracts have been finalised and reports have been submitted to the Department


·         The project values for each contract amounted to R968 130.31 and R8 110 500.00 respectively.

·         Both cases have been referred to SAPS for the issuing of warrants of arrest to appear in court.

·         Other cases investigated include Tsakane Extention 11 & 15 (Gauteng Province), Stinkwater Ward 14 , Hammanskraal  and Freedom Park (North West Province). 


A number of targets could not be achieved because they were subject to the finalisation of the departmental turnaround strategy, such as filling of vacancies, approved alignment of departmental structure, and the revision of the Information Communication Technology (ICT) System, etc. Capacity constraints in this programme resulted in the following not being achieved:

·         an impact analysis and evaluation of policies, fourteen planned internal audit projects and two special projects.

  • Promulgation of the Rental Housing Amendment Act and tabling of the Housing Amendment Bill were deferred to the 2011/12 financial year.
  • IT services were deferred to 2011.
  • Non-expenditure of R5.2 million was due to delays in the purchasing of the server since it had to be imported.
  • Delays in securing office accommodation and savings.


Programme 2 – Housing Policy, Research and Monitoring


To develop and promote policies on human settlement and housing supported by a responsive research agenda and to monitor and assess the implementation, performance and impact of national housing policies and programmes.


The Department’s 2010/11 Annual Report claims that no major variances were reported for Programme 2 during the period under review. However, Programme 2 experienced mixed levels of success in terms of meeting set targets. For example, the Department exceeded its target to undertake applied research and produce two research reports on identified themes. In addition to meeting the target, it also published a paper and initiated two additional studies, which will be completed during 2011/12. Furthermore, it also developed the following three policy proposals: new national policy for the Ministerial Technical Standards regarding the subsidy-financed housing sector, a comprehensive new Human Settlements Policy and a Human Settlements Bill, as well as a policy on the housing-subsidy scheme quantum for 2011/12.


Economic research on housing resulted in the following three reports: Assessment of the Economic Impact of Government Housing Programmes, preliminary report on Assessment of the Performance of Government-subsidised Housing as an Asset, and a booklet and compact disk on a Directory of Exhibitors: Alternative Building Technologies Indaba.


A study on the extent to which urban dwellers in polygamous marriages might be discriminated against by the current housing policies and programmes was also undertaken. The first result of the study has been completed. Research was conducted on the cost of building an informal dwelling in informal settlements and data and fieldwork reports have been collected.


The following were not achieved:


·         Only one report instead of two was completed on assessing the impact of national housing policies, programmes and projects. The Department reported that the second study only commenced during the 3rd quarter and data collection was still in progress by the end of the financial year.

·         The Department was supposed to complete two occupancy audit reports but not a single report was drafted. The Department reported that the occupancy audit could not continue due to insufficient funding and was therefore discontinued.

·         Four quarterly technical construction reports were due for completion, but instead not a single report was drafted. The Department reported that approval was not granted for the establishment of the National Verification Unit due to insufficient funding and therefore this output was discontinued.

·         Understanding beneficiaries’ perception on alternative technologies.

·         There was no response from the office on the Accounting Officer regarding research to develop a national framework to assess the sustainability of human settlements. This project was therefore not completed within the planned time.

·         A study to assess the performance of Government–subsidised housing as an asset was delayed due to challenges in releasing data by the Department of Human Settlements’ Information Management Unit.

·         Non-approval of the National Verification Unit due to insufficient funding resulted in the discontinuation of the key performance area (KPA) i.e. Technical Construction Reports.

·         Two beneficiary occupancy audits were targeted for this financial year and the audit discontinued due to insufficient funding. This also resulted in the discontinuation of the KPA.

·         Two audits were expected to be conducted on the impact on national housing policies, programmes and projects.


Programme 3: Housing Planning and Delivery Support


It aims to support the implementation and delivery, building capacity, and liaising and communicating with stakeholders for effective housing and human settlement programmes, and to co-ordinate and monitor the implementation of priority projects and the sanitation programme.


Programme 3 reported to have achieved a number of key strategic objectives during the year under review, including:


·         Signing of delivery agreements between the Department of Cooperative Governance and Traditional Affairs (COGTA), Department of Rural Development and Land Reform (DRDLR), Department of Public Works (DPW), Department of Water Affairs (DWA) and Department of Public Enterprises (DPE).

·         Conducted training programmes that reached 998 councillors, officials and community members.

·         281 previously disadvantaged learners were awarded scholarships to study towards a human settlements qualification.

·         Instead of 2 150 net hectares of State land released to the Housing Development Agency (HDA) as planned, a total of 33 000 hectares of land has been released.

·         100% (all nine provinces) developed Health & Hygiene Plans, instead of 80% as planned.

·         A total of 275 sustainable jobs were created, instead of 200 as planned. It would assist the Committee to receive further information on these jobs, e.g. the nature of the jobs, in which communities they were created, and the demographic profile of beneficiaries.

·         The Free Basic Sanitation Strategy was rolled out to 63% of municipalities, instead of 30% as planned. However, while the Department exceeded the target for the number of households provided with basic sanitation services through the Accelerated Community Infrastructure Programme (ACIP) (8 426 households instead of 7 418 as planned), it failed with respect to targets set for the Rural Household Infrastructure Programme (RHIP) (only 5 580 households instead of 11 000 as planned).

·         Eight municipalities received accreditation to level 1 & 2: six Metropolitan Municipalities and two District Municipalities in the Northern Cape.

·         Provided support to priority projects.

·         30 unproclaimed settlements were provided with adequate basic sanitation.


To a significant extent, the following targets were not achieved due to the inadequate responses from the provincial departments:

·         A multi-year national Human Settlement Development Plan was not completed – the Department indicated that nine (possibly) provincial plans were required. However, it is not stated which provincial plans were outstanding and what resulted in the delays.

·         Information sessions were not held with all nine provinces on the strategy to unblock stalled projects – instead sessions were held with six provinces during June 2010 and eight provinces during December 2010.

·         Reports on the reasons for projects being blocked were compiled based on information received from four provinces – five provinces failed to submit their input. The inadequate input also resulted in a priority list of blocked projects to be undertaken in provinces which could not be completed.

·         The delivery of at least 5 000 People’s Housing Process (PHP) housing units across nine provinces could not be supported – instead only four provinces implemented PHP during 2010/11 and only 3 500 units could be supported. The rest of the provinces did not plan or budget for PHP. It should be noted that in 2009/10, the Department raised similar concerns in respect of PHP.

·         A review of the National Programme for Human Settlement Chapters of Integrated Development Plans did not materialise – the Terms of Reference for appointment of service providers has been submitted to the Director-General and a response was still outstanding by the end of the financial year.

·         A Framework for Human Settlements Planning not finalised – it was submitted to the Director-General for approval.

·         Free State and Eastern Cape provinces did not respond to a call by the national Department to determine support required for their priority list projects.

·         Revision of the informal settlement strategy document was not approved and was removed from the business plan of the NSPU due to limited funding.

·         A final draft of the revised basic household sanitation policy was not approved due to delays in the procurement of the professional service provider to support the Department with the review processes.

·         Under the strategic objectives, the review and development of sanitation qualifications did not take place.


Programme 4: Housing Development Finance


The Programme is responsible for funding housing programmes and human settlement development programmes. It also provides financial and grant management services. Furthermore, it promotes investment in housing finance. It mobilises and promotes financial probity within housing institutions. In addition, it manages all matters provided for the Home Loan Mortgage Disclosure Act (No. 63 of 2000).[2]


Programme 4 reported to have achieved the following key strategic objectives during the period under review:


·         Relevant monthly reports and financial statements were submitted to the National Treasury as required.

·         Three reports were produced on the analysis of information by financial institutions to detect lending patterns and practices on home loans.

·         In order to facilitate increased support of affordable housing finance, a report on the progress of the guarantee fund was finalised.

·         Two reports on Employee Assisted Housing (EAH) were facilitated.


Outputs not achieved:


Housing Equity: Reports on Secretariat function to the Office of Disclosure  in terms of the Act


·         There was no achievement in performance measures/indicators due to no meetings held related to the indicator during the 2010/11 financial year, the non-appointment of members of the Office of Disclosure and the lack of co-ordination and dissemination of information to provinces and municipalities in terms of the Home Loan and Mortgage Disclosure Act (HLAMDA).

·         No co-ordination and dissemination of information to provincial human settlements departments and municipalities in terms of HLAMDA.

·         Finalisation of the Official Development Assistance strategy could not be achieved since the final draft was submitted for approval and has yet to be approved.

·         With respect to investments for human settlements and infrastructure development, instead of two reports on the implementation of the Official Development Assistance (ODA), only one report on the draft strategy was developed. This was due to the fact that the ODA strategy has not been finalised and is awaiting approval.


Programme 5: Strategic Relations and Governance


Programme 5 is responsible for overseeing the management of housing institutions through performance and corporate planning monitoring as well as policy advocacy and governance oversight. It provides integrated business solutions and support as well as business information and related products by maintaining the housing and human settlements database[3]. 


Achievements during 2010/11 include the following:


The Department met all its targets in respect of the strategic and performance plans to provide systems that support sector-business processes. These include, amongst others:


·         The Department of Human Settlements participated in preparations of South Africa’s report on the status of the Millennium Development Goals (MDGs) with regard to the target on sanitation.

·         The programme facilitated continued implementation of the Danida-funded project (Danida DevForum, Denmark) on energy efficiency in low-income housing in Joe Slovo 3A and 3B on the N2 Gateway project. The Memorandum of Agreement between the NDHS and the Western Cape Provincial Department of Human Settlements on the implementation of an Energy Efficiency Pilot on the N2 Gateway project was concluded.


Outputs not achieved:


·         The Department planned to develop, implement, manage and review the media services strategy and plans. It stated that there were delays in approval processes and some of the submissions and activities were partially implemented.

·         Organisational Transformation Programmes are partially co-ordinated and managed because some of the organisational transformation strategies and policies are pending approval.

·         The Department had targeted to produce two reports on verification visits to housing institutions and submit them to the Director-General for noting and/or action where necessary. It was reported that the target could not be reached due to capacity constraints. The Social Housing Foundation was due to be completely dissolved and this did not fully materialise.


Further challenges reported by the Department:


·         Under and non-reporting by provinces on the total value chain.

·         The lack of planned and implementable programmes and project pipelines.

·         Failure by provinces to prioritise 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 projects performance data.

·         Availability of reliable data as indicator to measure human settlements index.

·         Intergovernmental co-ordination of Capacity Development Programme.

·         Non-alignment and accuracy in delivery performance between local, provincial and the national Address.

·         Lack of availability of capacity and expertise at provinces for project management to ensure effective utilisation of available resources within current priority programmes projects.

·         Non-alignment of provincial and municipal budget allocation to achieve required national outputs and outcomes.


Interventions comprised the following:


·         A departmental turnaround strategy has been approved for implementation.

·         The establishment of the 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 Service Task Team has been established to improve national, provincial and municipal co-ordination.

·         Required evaluations are to be conducted on key performance programmes, including informal settlements upgrading and social and rental housing to improve performance in funding, planning and implementation.

·         Improved governance, compliance and performance oversight of province, human settlements entities and municipalities is consistent work-in-progress.

·         Improved human resources recruitment, capacity, training and development is planned when the revised organisational structure is implemented.


3.1 Summary of the Department’s five-year strategic plan


The Medium Term Strategic Framework (MTSF) positions human settlements as a key to achieving two strategic objectives, i.e. expansion of social and economic infrastructure, and building cohesive, caring and sustainable communities.


The shift in focus from housing to human settlements was due to the realisation that housing is not just about building a shelter over people’s heads. Instead, it is about economic growth and social development that are in balance with the capacity of the natural system on which people depend for their existence, and which subsequently results in sustainable development. The Breaking New Ground (BNG) programme is regarded as a response to this challenge.


3.1.1 Guidance and support for implementing policy


Over the MTEF period, the Department of Human Settlements will emphasise providing guidance and support on policy implementation. This will include direct support to provinces and municipalities on the implementation of projects, supporting projects where there are blockages, and facilitating co-operation with the private sector.


Further, the Department will continue to refine the role of municipalities in the housing delivery chain, as well as to establish the necessary mechanisms for the rollout of accreditation, as provided for in the Housing Act (No. 107 of 1997).


3.1.2 Housing and quality audit


A preliminary housing quality audit is being conducted by the Department and will focus on the persistent and chronic problems in the delivery of quality houses and in the allocation subsidies to non-qualifying beneficiaries.


3.1.3 Addressing spatial planning challenges     


Having adopted a comprehensive approach to human settlements, the Department will look at key challenges around spatial planning, such as urbanisation and migration patterns, and the further mushrooming of informal settlements.


3.1.4 Co-ordinated sanitation programme


The Department anticipates that the acquisition of the sanitation function will ensure that the provision of sanitation services countrywide is consolidated and co-ordinated.


3.1.5 Key policy developments


The National Housing Code was updated in 2008 in line with the Comprehensive Plan for Sustainable Human Settlements. Focusing on particular areas, such as informal settlements upgrading, integrated residential development, rural and social housing, the code provides for considerable flexibility in contracting strategies and aims at improving urban efficiency by focusing on the developmental needs of an entire community or area.


The Department identified the following challenges: inadequate planning, lack of co-ordination and integration of different government functions, lack of social cohesion, and spatial capital. Nonetheless, to a large extent housing delivery still negates the role of civil society and the citizens themselves, thereby undermining social capita and building dependency on the State while burdening the State and compromising its delivery capacity.


3.2 Outcome 8


The January 2010 Cabinet Lekgotla accepted an outcomes-based approach to service delivery. For each outcome, a limited number of measurable outputs with targets were identified.  Each output is linked to a set of activities as prepared by the Presidency.  While a total of 12 outcomes were identified, Outcome 8 speaks directly to Human Settlement’s targets.  Outcome 8 seeks to “create sustainable human settlements and improve the quality of household life”. The delivery agreement for Outcome 8 sets 2014 targets for:[4]


  • Upgrading 400 000 informal settlement households at an estimated cost of R19.2 billion, including the provision of bulk infrastructure;
  • Delivering 80 000 rental units;
  • Increasing the provision of basic services, including increasing access to sanitation from 69% to 100%;
  • Financing 600 000 housing opportunities for people in the R3 500 – R12 800 income bracket;

·         Releasing 6 250 hectares of well located state-owned land for delivery of sustainable human settlements.


3.2.1 Targets



Specific departmental performance targets will be finalised once service delivery agreements are concluded in support of the identified outcomes. This process will be overseen by new functions.


  • Output 1:  Accelerated Delivery of Housing Opportunities


The Department informed the Committee that the housing function is a concurrent function and, therefore, the agreement for this output has been signed between the Minister of Human Settlements and the provincial MECs. This agreement is still applicable should accreditation to level 2 be granted to a municipality as per the accreditation framework.


4. Analysis of Section 32 Expenditure Reports


4.1. Preliminary report at the end of year


Overview of the fourth Quarter Expenditure: 2010/11



Expenditure per appropriation Act, 2010

Appropriated budget

Total additional appropriation

Shifts & virements after ENE

Available budget

Year to date actual expenditure

Percept of budget expended

Expenditure per appropriation Act, 2010

Appropriated budget

Total additional appropriation

Shifts & virements

after ENE

Available budget

Year to date actual expenditure

Percept of budget expended


1 Administration







2 Housing Policy, Research and Monitoring







3 Housing Planning and Delivery Support







4 Housing Development Finance







of which







-Rural Households Infrastructure: Indirect grant

100 000






Conditional Grants to provinces







-Human Settlements Development Grant







-Housing Disaster Relief Grant







Departmental agencies and accounts







-Social Housing Foundation: Contribution to operations







-Social Housing Regulatory Authority: Contribution for creation, capacity building and operational grants







-Housing Development Agency: Contribution to operations







-Rural Housing Loan Fund: Contribution to operations







5 Strategic Relations and Governance







Total for vote







Source: National Treasury 2010/11


The Department received a budget of R16.2 billion, of which R16 billion or 98.8% expenditure was recorded by the end of the fourth quarter. As a result, R199 665 million (or 1.2% of the available budget) under expenditure was recorded.


·         Current payments were allocated R585 378 million, of which R441 819 million or 75.5% expenditure was recorded.

o        Compensation of Employees was allocated R250 840 million, of which R216 452 million or 86.3% expenditure was recorded.

o        Goods and Services received R334 053 million, of which R225 195 million or 67.4% expenditure was recorded.


·         Transfers and Subsidies received R15.5 billion, all of which was spent.

·         Payments for Capital Assets received R171.3 million, of which R116.7 million or 68.1% expenditure was recorded.


Though the Department’s performance reflects 100% expenditure on transfers and subsidies, under expenditure of R1.7 million was still recorded. In addition, the Department also recorded notable under expenditure on various programmes (including Housing, Policy Research and Monitoring; Housing Planning and Delivery; Strategic Relations and Governance). Under expenditure in the Department is hugely attributed to vacant positions not being filled; under-spending on the Accelerated Community Infrastructure Programme and the Rural Household Infrastructure Grant, which recorded under expenditure of R33.3 million (or 33.3% of its R100 000 million available budget).


The Human Settlements Development Grant makes up 93% of the Department’s adjusted appropriated allocation. Whilst 100% of the grant was transferred to provinces, provincial spending equates to 97%, with largest under-spending by North West province, who spent 87% of its Human Settlements Development Grant allocation.


4.2 First Quarter (2011/12) Expenditure:


4.2.1. Overall Expenditure Performance


The Department of Human Settlements received an allocation of R22.5 billion, but only managed to spend R3.9 billion (17.7%) at the end of the first quarter. This signals slow spending when benchmarked against the 25% threshold.


4.2.2 Expenditure Performance per Economic Classification


·         Current Payments


o        Current Payments were allocated R642.2 million but only R83.5 million (13%) spent on Compensation of Employees had R319 million but only R57.3 million (17.9%) had been spent.

o        Goods and Services was allocated R322.7 million, but only R26.1 million (8.1%) had been spent.


·         Transfers and Subsidies


Transfers and subsidies were allocated R21.7 billion but only R3.8 billion (17.8%) was spent. Transfers and subsidies account for 96% of the total departmental budget. This implies that much focus should be on: 


o        How the Department is transferring funds to receiving entities.

o        How the Department is providing support and monitoring the spending of transferred funds.


·          Payment for Capital Assets


The capital payments budget amounted to R235.7 million but only R4.1 million (1.7%) was spent).


4.2.3 Expenditure Performance per Programme


Overall Programme Performance


The Department implements it budget through five (programmes) namely: (1) Administration; (2) Housing Policy, Research and Monitoring; (3) Housing Planning and Delivery Support; (4) Housing Development Finance; and (5) Strategic Relations and Governance. All the programmes performed below the 25% threshold. Programme 2 (Housing Policy, Research and Monitoring) performed slightly better as it came close to 20% of its allocated budget. Programme 5 (Strategic Relations and Governance) had the slowest spending of 9.9% of its R155.5 million allocated budget. The slow expenditure was due to:


·         Delays in the payment of computer services in support of the Rural Household Infrastructure Programme (RHIP);

·         Non-filling of vacant posts.


Programme 1: Administration


Programme 1 reflected the second slowest spending of 10.9 % of its allocated budget. Slow expenditure in Administration resulted from non-payments of the Special Investigating Unit and the leasing of office accommodation. The Department of Public Works had not issued the invoice for the leased office accommodation.


Other programmes spent in the margin of 17.5% to 17.6%. Slow expenditure in Programme 3 (Housing Planning and Delivery Support) is said have resulted from unfilled vacant posts.


Key Area of Focus


Programme 4: Housing Development Finance


This programme accounts for 97% of the total departmental budget and manages transfers and subsidies to provinces, municipalities and other spending institutions. For this reason programme 4 is the main area of focus as it largely determines the Department’s success or lack of it in pursuit of achieving its mandate.


Of the R21.9 billion allocated, the programme had spent R3.9 billion (17%) at the end of the first quarter; of which:

·         Rural Households Infrastructure (Indirect grant) was allocated R231 million but only R40.5 million (17.5%) was spent.

·         Urban Settlement Development Grant was allocated R6.3 billion but only R2.5 million was spent.

·         Human Settlement Development Grant received R14.9 billion, and none of these funds had been transferred at the end of the first quarter.

·         Social Housing Regulatory Authority (Contribution to operations) received R19.3 million but no transfers had been done at the end of the first quarter.

·         Rural Housing Loan Fund (Recapitalisation) received R50.5 million and had spent R142 million (286.8%) at the end of the first quarter.

·         Housing Development Agency (Contribution to operations) was allocated R89.1 million and had spent R267 million (300%) at the end of the first quarter.

·         National Urban Reconstruction and Housing Agency (Recapitalisation) was allocated R1 million and had spent nearly half of its allocation which is R49.5 million (49.5%) at the end of the first quarter.

·         Social Housing Foundation (Contribution to operations) was allocated R3 million but none of these funds were transferred at the end of the first quarter.

·         Social Housing Regulatory Authority (Capital restructuring Grant) was allocated R226.2 million but no transfers had taken place at the end of the first quarter.


 4.3 Expenditure as at 30 August 2011/12 (part of the second quarter)


In July 2011, the Department spent R3.5 million, which is 15.7% of its budget, bringing total expenditure to 33.2% at the end of July. This high expenditure was the result of transfers amounting to R3.5 million for the month of July. The Department should explain this transfer to the Committee, indicating the receiving entity or body, what the funds are for, as well as outlining the manner in which the use of these funds will be monitored.


Expenditure for August 2011 amounted to 1.4 million, which is 6.5% of the allocated budget. Transfer expenditure decreased significantly from R3.5 million in the previous month to R1.4 million in August. This resulted in a decrease in expenditure, despite the fact that capital payments expenditure increased marginally in August. Overall expenditure as at 30 August 2011 was R8.9 million or 39.7%.


4.4 Conclusion and overall observation


The analysis of the Department of Human Settlements’ first quarter expenditure performance indicates an overall low expenditure of 17.4%. This low expenditure performance is mainly attributable to the following reasons:


·         Slow transferral and, in various instances, non-transferal to receiving institutions. The issue of non-transferral should be resolved as a matter of urgency since it impacts significantly on the receiving entities whose expenditure performance is dependent on these transfers. This is reflected in Programme 4 (Housing Development Finance), which houses transfers and accounts for 97% of the Departments’ budget.


·         The on-going restructuring process has to be expedited and completed to resolve the challenge of unfilled vacant posts prevalent across programmes. This is reflected in the slow spending (17.9%) on Compensation of Employees.


·         The Department faces challenges of late payments due to late issuing of invoices by the relevant parties. This is reflected on the very slow spending (1.7%) of the Capital Payments budget.  In this regard, effective measures have to be taken to ensure that invoices are issued on time as this impedes on the Department’s expenditure performance.


5. Analysis of the Department’s Annual Report and Financial Statements

5.1     Performance overview

1.     Notable higher or lower than expected programme spending

·       Programme 1: Administration: Expenditure amounted to R188.6 million which is 85 per cent of the adjusted appropriation of R221.4 million. Under-spending is as a result of funds provided for legal advisory services not utilised and the non-filling of vacant posts.


·       Programme 2: Housing Policy, Research and Monitoring: At the end of 4th quarter, expenditure amounted to R32.6 million, or 74 per cent of the adjusted appropriation of R43.9 million. Under-spending is due to delay in the roll out of a new research framework that intends to establish housing research institutes at various universities in South Africa and also due to agency support services and unfilled vacant posts.


·       Programme 3: Housing Planning and Delivery Support: Expenditure in this programme amounted to R156.8 million, or 76 per cent of adjusted appropriation of R207.2 million. Under-spending in the Programme is as a result of delays in the implementation of the Accelerated Community Infrastructure Programme (ACIP) and the non-filling of vacancies.


·       Programme 4: Housing Development Finance: Expenditure at the end of the 4th quarter amounted to R15.6 billion, or 99 per cent of the adjusted appropriation of R15.7 billion. Under-spending of R33.3 million can be attributed to delays in the implementation of projects on the Rural Household Infrastructure Grant. The under-spending relates to the delay in the procurement process and the finalisation of appointing service providers.


·       Programme 5: Strategic Relations and Governance: Expenditure at the end of 2010/11 financial year amounted to R87.5 million, or 60.4% of the adjusted appropriation of R144.9 million. Under-spending can mainly be attributed to unfilled vacant posts and delays in appointing service providers to maintain and render the necessary support to provinces on the Housing Subsidy System. Another contributing factor is the reduction in foreign visits and the curtailment of media campaigns.


2.    Significant departmental under-expenditure per economic classification

·       Current payments: Expenditure amounted to R442 million, or 75% against the adjusted allocation of R585 million. Under-expenditure relates to non-filling of vacant posts and the non-utilisation of available funds for consultants and advertising.

·       Payments for capital assets: Total expenditure amounted to R117 million, or 68% of total adjusted allocation of R171 million. Under-expenditure was predominantly due to under-performance on the Rural Household Infrastructure Grant.


5.2     Department Entities


Following is an overview of entities reporting to the Department:


5.2.1 National Urban Reconstruction and Housing Agency (NURCHA)


The Department authorized a loan of R75 million approved from Cadiz as well as recapitalization of NURCHA in the amount of R300 million.  Contractor Training and Development Programme is completed and has been approved by the National Treasury.  The value of loans disbursed under the affordable housing for houses and sites serviced is R84.9 million.  The number of houses built and sites serviced under the affordable housing programme are 2092. A number of 33 projects under the infrastructure and community programme were completed during the period review. NURCHA confirmed that Free State province is among the provinces where successful projects are being run.


5.2.2 Rural Housing Loan Fund (RHLF)


The Department approved the recapitalization of the Fund in the value of R49 million to assist with the implementation of the Rural Voucher Scheme. It was reported that a 40 289 loans have been disbursed against target of 44 933. Loans at the value R113.6m have been disbursed against target of R112m.  A total disbursements of loans at the value of R224.4 million against target of the value of R202 million was recorded.


However, RHLF is experiencing challenges such as competitive nature of the market and from other big financial institutions. Also, the collection rate of debts is also a challenge but it was stated that the situation is improving. Among the lowest income band, more than 40% (these are people earning less than R1500 per month) of loans disbursed were mainly used for improvement of houses. RHLF had targeted about 80% of loans outside metros on housing related matters; however their target was exceeded and reached 85%.


RHLF stated that more loans were granted to people employed in the public sector than those employed in the private sector. The majority of these were reported to have been women.   RHLF further advised the committee that, the 49million allocation does not form part of the Rural Voucher Scheme but to assist in recapitalizing the agency.


5.2.3 National Housing Finance Corporation (NHFC)


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 25 000 affordable units.  In regard to the Trust for Urban Housing Finance (TUHF), the loan portfolio reached more than the R 1 billion mark (R1.2 billion). The distressed clients’ turnaround and collection recovery strategy was successfully implemented.


NHFC’s enterprise development includes social housing institutions, private clients, and inner city regeneration programmes. It was stated that an amount of R100 million was recovered from the previously distressed clients. Repossessed properties at a value of R40 million were also reported.


The challenges experienced by the NHFC are, among others, the rectification of flats and the culture of non-payment. THUBLISHA still owes NHFC an amount of R14 million in interests. 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 


5.2.4 Housing Development Agency (HDA)


The Department reported that 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 33 000 hectares of state land was identified for evaluation for release for human settlements development focused on Outcome 8 which requires the release of 6 250 hectares of public land. A Joint Co-ordinating Committee on State Land Release has been established by the Department with the HDA as secretariat to manage the requirements of Output 3 of the Delivery Agreement. 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.


Key features of these implementation protocols is the joint planning and programme with other organs of state. In terms of land acquisition, an MOU has been signed between COGTA, the Department of Public Enterprises and the Department of Public Works. The Free State funded eight properties, which are held in the trust of the Agency. The HDA is involved in the programming and planning of the Cornubia project in KwaZulu-Natal. For the land that was purchased from SERVCON to be released, an approval must come from the National Treasury. Of all the properties that are held by the entity, there has to be a proposal in place in order for those properties to be released.


5.2.5 Social Housing Regulatory Authority (SHRA)


The Department reported that Social Housing Regulatory Programme (“SHORP”) has managed to accredit 18 Social Housing Institutions.


In terms of the Social Housing Investment Programme (“SHIP”), it was reported that a call for proposals 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.  Social housing projects, namely  the Emerald Sky, TAU Village and Drommedaris projects, were launched, in various provinces.  The entities will facilitate the delivery of 1 050 social housing units.  It was further reported that the regulatory programme which assisted the SHRA in identifying some policy and legislative challenges with respect to the current program will be implemented.


The CEO has been appointed in January 2011 and SHRA has been operational for three months. However, the Board agreed to report on financial statements early rather than to wait for 15 months. Organisational work had been started immediately after the appointment of the Board in 2010 April. The Chairperson was been acting as the CEO until the appointment had been filled. The organisation has 21 vacant posts and by end of March 2011, 12 vacant posts were already been filled. The remaining vacant posts are specialised and in respect of scarce skills such as engineers, etc.


5.2.6 National Home Builders Registration Council (NHBRC)


NHBRC’s mandate is to protect housing consumers from unscrupulous homebuilders. It provides an exclusive regulatory function in the home building environment; promote innovative technology and compliance as well as to capacitate homebuilders.


During the year under review, the NHBRC registered a total of 11 115 homebuilders and renewed 3 650.   The non subsidy home enrolments 32 424 against a target of 39,000 it set for itself.  Further, a total of 49 929 subsidy homes are enrolled against a target of 94 000.   The number of houses that were completely inspected in subsidy home enrolments was 57 420, whilst in the non subsidy were 15 631.  There were 966 late enrolments reported. 


During the year under review the entity received 937 complaints of which 536 were conciliated. 


It was reported that remedial works that was undertaken cost the entity R22 million.  There were 1 505 homebuilders trained whilst 512 homebuilders had been suspended.  Projects that were enrolled with the entity totalled 25 090.


NHBRC has reported to have achieved the following:

  • Ensuring compliance to norms, standards and quality within the sector;
  • Assisting the public and private sector in improving programme and project management through training and skills transfer;
  • Assisting the state in the implementation of the rectification programme;
  • Improving the capacity of government to monitor and oversee human settlements development programmes and projects;
  • Assisting the Department in the improvement of governance and performance in the sector;
  • Building and developing appropriate capacity at the provincial and municipal spheres to undertake human settlements development capacity for compliance and monitoring;
  • Protection of the interests of the public within the human settlements sector.
  • The NHBRC has conducted assessments for rectification in KZN and Eastern Cape;
  • Assisting government in the development of appropriate norms and standards in the provision of services, infrastructure and housing;
  • The development of appropriate policy and legislative frameworks in ensuring compliance to norms and standards in human settlements development and protection of all stakeholders from poor workmanship;
  • Improving co-ordination and co-operation with the Department, Provinces and Municipalities in monitoring, compliance and adherence to the norms and standards set for development; and
  • Setting up Quality Assurance Systems in the Provinces and Municipalities.


On governance issues, the current board of management undertook an initiative to build and strengthen the relationship of the institution and that of the Auditor General. Declarations that were made in different forms than what was required by the Auditor- General was said to have been rectified and the relationship is improving. Peer review was conducted to deal with Internal Audit issues and the board agreed to outsource that function and an executive officer has been appointed to monitor the audit function. The board further undertook an initiative to strengthen the leadership of the institution and requested the chairperson to be visible in the office at least for three days in a week. The IT-System, the NHBRC commissioned an audit by Deloitte and Touche to look in to integrating the IT-System that was polarised and was not speaking to other systems. This system was open to abuse that is why there was a need for it to be improved.


The ongoing investigations within the institution are carried out by the Special Investigating Unit and the report is in the process of being completed.    


5.3     Human Settlements Development Grant


5.3.1          Allocations and 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






 Human Settlements Development Grant

 Eastern Cape









Free State



































 Northern Cape








North West







  Western Cape





















Housing Disaster Relief Grant

KwaZulu Natal







Grant Total










5.3.2 Total Delivery – 01 April 2010 to 31 March 2011



Serviced Sites


Serviced Sites Completed

Houses Targets

Houses Completed


Annual Target

Total Delivery









































































6. Consideration of Reports of Committee on Public Accounts


The SCOPA report had not been received by the Portfolio Committee during the period of the drafting of this report. However, in the annual report tabled by the Department, it was indicated that the issues pertaining to the SCOPA report had already been dealt with.


7. Consideration of Other Sources of Information


7.1    The State-of-the-Nation address


The 2010 State of the Nation Address highlighted the following key strategic objectives that are pertinent to human settlements:[5]


·         Spending R846 billion on public infrastructure.

·         Upgrading well-located informal settlements and providing proper service and land tenure to at least 400 000 households by 2014.

·         Setting up a guarantee fund of R1 billion to incentivise the private banking and housing sector to develop new products to meet the housing demand.

·         Implementing the Comprehensive Rural Development Programme.






7.2    The Presidency: Department of Performance Monitoring and Evaluation (DPME)


The Community had an opportunity to interact with the DPME. The purpose was to share the views and observations by the DPME on the performance of the Department of Human Settlements, in particular, the progress made towards achieving Outcome 8 targets. The Committee felt strongly that the session would advance and enhance its oversight mandate.


The delegation from the DPME was lead by the Director General Dr S Phillip (DG). The DG outlined the back ground of DPME and the informed the committee that, it was established in April, 2010 by the President (Jacob Zuma) and was mandated to perform the following:


·         Facilitate the development of plans for the cross cutting priorities or outcomes of government and monitor and evaluate the implementation of these plans

·         Monitor the management performance of individual national and provincial government departments and municipalities, in partnership with the Offices of the Premier, which will be starting in November 2011

·         Monitor frontline service delivery in partnership with the Offices of the Premier

·         Carry out evaluations

·         Promote good Monitoring and Evaluation (M&E) practices in government.

·         Implement interventions to address blockages in delivery, in partnership with delivery institutions.


Over a period of time DPME has developed a methodology to assess performance of government departments, including provinces and municipalities.


Dr Phillip informed the Committee that the aim of outcomes approach is to improve service delivery and comprises of the following outputs by:


·         Introducing whole-of-government planning linked to key outcomes, clearly linking inputs and activities to outputs and the outcomes.

·         Implementing the constitutional imperative for co-operative governance by negotiating inter-departmental and inter-governmental delivery agreements for the outcomes.

·         Increasing strategic focus of government.

·         Making more efficient and effective use of limited resources through introducing more systematic monitoring and evaluation.

·          The outcomes based approach is not a unique   to South Africa, and DPME has undertook international studies  to a number of countries,  including  the USA, Colombia, Chilli,etc.   What these countries have in common is similar or shared goals and, therefore, South Africa agreed to a limited set of outcomes.


The DPME has developed a project management tool with traffic lights code that gives an indication where there is .progress, as indicated below:



Sub outputs which are on track and require  no major interventions


Sub outputs which are either proceeding slower than targeted or which face impediments requiring intervention


Sub outputs which are either substantially behind timelines or which face impediments which will require urgent intervention at the Ministerial or Cabinet level




Government identified 12 key priority areas that require particular attention and improvement. However, this does not mean that other areas are not of significant importance. He emphasized that Outcome 8 focuses on integrated human settlements and improved quality of household life.


Delivery agreements


A Delivery Agreement is a charter between all the key stakeholders who need to work together to achieve the outcome.


  1. Performance Agreements between President and outcome co-ordinating Ministers requested them to work with other key stakeholders to develop detailed Delivery Agreements for each outcome:


·            Delivery Agreements describe key activities, sub-outputs, outputs, indicators, and targets, identify required inputs and clarify roles and responsibilities of each key body which contributes to the achievement of the outcome.

·            Performance Agreements between President and other Ministers also requested them to work with the co-ordinating Ministers on relevant delivery agreements.


  1. New National Treasury guidelines for strategic plans indicate that departments’ strategic plans and APPs must reflect their commitments to delivery agreements – will be monitored by the Auditor General and should also be monitored by Parliament.


The terms of reference should adequately reflect commitments made to such delivery agreements. Quarterly progress reports are provided in order to identify bottlenecks and subsequently come up with solutions. The process of signing delivery agreements has been concluded in November 2010.


 Overall progress of human settlements against the outcomes is identified as follow:


Output 1:  Accelerated delivery of housing opportunities


·         Progress has been made with exceeding the initially low target of 20 000 households to have access to basic services and secure tenure. The targets are progressively higher over the outer years. 

However, these targets could be at risk if provincial budgetary commitments are not made to match the higher targets in the outer years.


·         Meeting the targets in 2014 would also require direct management and dedicated technical support for provinces and municipalities by the NDHS.


·         Furthermore, reaching planning/agreements on the funding alignment (between Urban Settlement Development Grant and Human Settlement Development Grant), and targets for informal settlement upgrading between provinces and municipalities is critical.  There is also a need to align support for the upgrading of informal settlements with municipal development plans.


·         The Department has met the targets for the 2010/11 financial year. However, budgets have not yet been secured to meet the 2014 targets for social housing, putting the 2014 targets at risk. There needs to be policy and programme adjustments to bring the communal residential units and institutional subsidy programmes under the Social Housing Regulatory Authority’s ambit of responsibility.  This is necessary to ensure regulatory oversight.


·         The Department also needs to complete a policy framework for private rental, including backyard rental housing.


·         Furthermore, the Department has to develop a clearer monitoring model to understand the contribution of the private sector to the target rental market.


·         DPME is encouraged by the Department’s process to establish a programme management unit and a rental housing task team.  This will draw all the role players into a joint effort to achieve the overall target.


·         Given the accreditation of 8 municipalities in 2010/11 to level 2 as well as the recent assessment processes carried out it is likely that the 2014 targets will be met.


·         However, the Department needs to resolve issues related to human resources, systems (Housing Subsidy System) and related budgets from provinces to municipalities in order to confidently allow for the accreditation targets to be met.  


 Output 2:  Improved access to basic services


·         It needs to be noted that the Department of Co-operative Governance is co-ordinating these sub-outputs. Other line departments are, however, responsible for implementing the programmes to realise the targets. 


·         It appears that good progress has been made against the targets set for 2014.   However, the reported progress is against particular departmental norms. Different departments are using different definitions (norms and standards) to measure access to basic services. This means that there may be different calculations of the extent of the backlogs and the progress made to date.


·         A policy framework setting out the density pre-conditions for land released especially in metros and secondary cities still needs to be finalised by the Department.  A monitoring mechanism to measure the density performances has to be developed and put in place.


·         There is a need for this to be addressed by the relevant departments. The Sustainable Human Settlements and Basic Services Task Team that has met on more than one occasion, but has had limited success in addressing these matters.


·         Accelerated infrastructure delivery in priority areas will hopefully reshape the programme and activities of the Sustainable Human Settlements and Basic Services Task Team.  However, in order for this to occur, the Joint Work Programme of the Task Team will have to be reviewed.  The report requested by the South African Human Rights Commission on the national state of sanitation will also assist in determining a common baseline for the rolling out of sanitation programmes.


Output 3:  Land assembly and effective utilisation


·         While there has been progress in identifying and acquiring properties, there is concern that the Department of Public Works and other associated public land holding agencies are not prioritising the processing of land identified with HDA speedily enough. The Department should disaggregate the land acquired by provincial departments into that acquired from public land holdings and that acquired from private land holdings.


·         The current density performances of well located BNG type mixed income projects will have to be evaluated


·         There is furthermore a need for the HDA to conclude technical support arrangements with provinces and municipalities for the obtaining of land and the finalisation of the land financing agreements amongst government departments.


·         Whilst the DRLDR is responsible for preparing the legislation and regulations, a policy position by the national Department of Human Settlements responding to the new policy framework and regulations should be developed.


 Output 4:  Improved affordable property market


·         Notwithstanding progress in the development of the Mortgage Default Insurance (MDI) the DPMI is concerned that the level of progress may not allow the 2014 target to be achieved.


·         Banks still have to agree that they will use the programme to address the affordable housing finance challenges and the administrative arrangements and schedules for the use of the instrument have to be agreed upon.


·         Despite the progress in revising the programme of Finance Linked Individual Subsidy (FLISP) programme, however the programme still has to be launched.


·         Take up with the banks still has to be negotiated and programme scheduling and administrative arrangements agreed upon.  In terms of policy formulation regarding the introduction of a long term fixed interest rate: no progress has been made.

·         Given the fact that, the policy will not be concluded by 2014 this will impact negatively towards achieving the target.  DPME believes that, an early policy review should be undertaken in anticipation of developing a fully fledged instrument. 


·         DPME informed the committee that, initially they were concerned about performance based on the 2010/11 progress reports.  However significant progress in the first quarter of 2011/12 indicates that the Development Finance Institutions (DFIs) could be on target to realise the 2014 targets. 


·         DPME believes that the DFI’s recapitalisation into a single entity and identifying the stronger programmes should afford further sector impetus and will support a concerted engagement with the banks. The role of the DFI’s in providing support to provinces and municipalities to frame and package integrated projects should be strengthened.


·         With regards to construction finance loans issued for the construction of 6686 of affordable housing by 2014, the recent recapitalisation process has resulted in a significant progress particularly in the 1st quarter of 2011. 


·         However, care should be taken with the DFI rationalisation to ensure that it does not disrupt this programme.


With regards to housing finance opportunities contributed by sector stakeholder, very little progress has been reported and requires increased effort for banks to make funds available to the affordable market. Moreover, the DPME further raised the following concerns:


o        The Department is not adequately monitoring and reporting the progress of banks making loan finance available in the affordable housing market.

o        The process of rationalising the Development Finance Institutions’ (DFIs) needs to include a focus on putting in place arrangements to enable private sector participation.

o        The national Department of Human Settlements should  use the Home Loan and Mortgage Disclosure Act as well as existing reports of financial institutions to come to grips with the current trading performances in the gap market.

o        Engagement with public, private, social, community and labour stakeholders should be arranged to occur in parallel to the ongoing process to rationalise the DFIs.

o        A more direct engagement with the Private Finance Sector regarding the affordable housing targets may need to be asserted.

o        This sub-output is important as  all the other initiatives of output 4 still leaves up to  41% of the target to deliver 600 000 housing finance opportunities unresolved.


Drawing on the NPC’s Material Conditions Diagnostic for a Sustainable Human Settlement Vision



·         A network of matured well established cities is positive for a redirected human settlements programmatic approach.

·         However our cities and towns are spatially inefficient and unequal and there is  inertia in spatial form:

o        Costs of inefficiency on economy and households (>20% of household expenditure).

·       Migration patterns are complex making planning for human settlement development challenging. 

·       Urban informal settlements are the primary locations for where the urban and rural meet. Because they will continue play this role we need to focus on the    management and upgrading of these settlements.

·       New entrants into cities in the pursuit of work opportunities often require other housing support options i.e. rental programmes.

·       At the lower end there is still a total reliance on the subsidy programme.

·       The policy shift towards a sustainable human settlement approach needs to be complemented by more detailed work on costs, institutional capacities, and funding arrangements.  This then has to be developed into appropriate support programmes.


7.3     The Financial and Fiscal Commission (FFC)


Mr B Khumalo, Acting Chairperson of the Commission, led the delegation and outlined the presentation.  He informed the Committee that the FFC specific focus on Department of Human Settlements strategic plan, look at the achievements and expenditure outcomes.  The FFC also drew the attention of the Committee to the progress and recommendation made.


The FFC reported on selected strategic objectives for 2010/11 of the Department.  It was indicated that a target of 220 000 housing units per annum will be delivered.  It was reported that the actual delivery was not specified by the Department in its annual report, but a total of 121 879 completed houses are reported on the Department’s website.


Selected strategic objectives in the 3rd quarter for 2010/11



Actual delivery

220 000 Housing units per annum

Not specified in the annual report

121 879 housing completed (DHS website)

Facilitate 80 000 affordable social and rental units (over 2010/11 MTEF(target not specified per annum)

It is difficult to ascertain the progress under this objective as the Department does not differentiate between units under construction, completed and handed over to beneficiaries

Access to basic service

·         Roll out Free Basic Sanitation Strategy (FBSS) to 30% municipalities

  • To serve 7 418 household through Accelerated Community Infrastructure Programme (ACIP) and 11 000 households through Rural Household Infrastructure Programme (RHIP)
  • FBSS rolled out to 63% of municipalities
  • 8 426 household were served through ACIP and 5 580 through RHIP



·         With regard to Human Settlements Development Grant – an overall high level of aggregate expenditure (98, 6%) of total adjusted budget.  But in the in-year reallocation of funds away from Free State (less 263 000 or 20%), KwaZulu Natal (less R80 000 or 2.9%) and North West (less R100 000 OR 7.8%) of voted allocation.


·         Material under-spending of the Rural Household Infrastructure Grant – the grant underspent by R38 million or 38.4% of total allocation.


·         The Department violated DORA – the accounting Officer did not complete and submit to the National Treasury the compliance certificate as required by S10(1)(a) of DORA 2010 by 15 April 2011, in respect of the Rural Household Infrastructure Grant.


7.3.1 Progress on past FFC recommendations 


·         The FFC’s previous work has revealed that the current institutional arrangements, funding and some of the policy issues relating to the delivery of housing have to be reviewed.  FFC has made a number of recommendations pertaining to policy (especially the accreditation of municipalities based on their capacities to administer housing programme), funding and institutional issues over the past years).


·         The FFC felt that the process of accreditation is very slow and to date not a single municipality has been accredited with level 3.  Only six metros have been given level 2 accreditation.  The number of municipalities accredited in 2010/11 remains at 18, same number as in 2009/10 financial year. 


·         On Social and Rental housing the FFC recommended relaxation and flexibility on eligibility criteria for accessing Social Housing Restructuring Conditional Grant to allow projects falling outside the zone to access funding; number of Designated Restructuring Zone (DRZ) to excess demand for rental housing and minimum unit size for redevelopment of existing building.  A progress has only been made with respect to increasing number of DRZs as according to the annual report there is 75 DRZs in total.  Consideration should be given to link new housing subsidies with MIG and LES formula to ensure that LES allocation keep pace with the installation of new housing infrastructure among other things.


7.3.2 FFC’s recommendations for 2012/13 and the impact of inefficient land use


·         In its Annual Submission for the 2012/13 DORA, the FFC highlighted a number of issues on inefficient land-use and the current funding for built environment which is unco-ordinated and not supporting the delivery of integrated and sustainable human settlements. The FFC stated that land use is key to addressing some of the challenges indicated by the NDoHS (that the housing subsidy programme has continued to entrench segregated spatial patterns, marginalising the poor from economic opportunities).


·         On the issue of comparison between the Compact City and the Sprawling City, the FFC highlighted that City Efficiency Costing Model has shown that a sprawling city is more costly than a compact city and that:


o           Costs savings in a compact relative to sprawling city amount to 7% after 10 years.

o           If this is extrapolated to 6 metros, saving amounts to approximately 1.4% of GDP by year 10.

o           There are significant energy savings in a compact city compared to a sprawling urban form.

o           Carbon emissions are 22% less carbon resulting from more efficient public transport and less travelling.


The FFC stated that government should actively and specifically pursue development of a more spatially compact urban form for cities, by developing and adopting appropriate policies and financing instruments and specific fiscal instruments include:


·         Wider use of development charges in financing infrastructure associated with the land development process.

·         Public transport subsidies that specifically target high density low-income areas.

·         Fiscal incentives for urban land development projects located within the existing urban form.

·         Fiscal incentives to promote densification and in-fill development.


It was further stated that government should also conduct a broad-based review of the efficacy of current housing finance arrangements in meeting housing needs within the context of creating sustainable and more compact human settlements.


7.3.3 FFC’s issues for future consideration:


·         Built Environment related grants have an urban focus and ignore  rural challenges and setting:


o           Little infrastructure delivery taking place in rural areas

o           Limited capacity to deliver in rural areas and interventions are not appropriately targeted.


·         There is a lack of information on the performance (non-financial data) of Rural Household Infrastructure Grant.

·         Reporting format makes it difficult to understand the actual delivery in some instances as for example units completed and under construction are combined (CRU and SH)

·         The overall spending of the department is 98.8%, however, there is a concern that some programmes (housing policy, research & monitoring, and strategic relations & governance) underspent by 25% and 40% respectively.


7.4 Auditor-General’s Report


The Department of Human Settlements received an unqualified audit opinion for the 2010/11 financial year.  However, the following emphasis of matter has been raised:


·         Claims against the Department


The AG flagged the issue of lawsuits that were brought against the department and the budget that is stated as a contingency liability for the value of R4.9 million.[6]


·         Irregular expenditure


The Department incurred irregular expenditure of R12.1 million, which was in contravention of the PFMA, Treasury regulations relating to supply chain management and Public Service Regulations.[7]


·         Material under-spending of the Rural Household Infrastructure grant


The Department has materially underspent the budget on programme 4, sub-programme – Rural Infrastructure Development to the amount of R38 million of a total allocation of R100 million. As a consequence, the Department failed to achieve some of its objectives of providing sanitation services to rural communities.[8]


Compliance with laws and regulations


·         Annual financial statements, performance and annual reports


The accounting officer submitted financial statements for auditing that were not prepared in all material aspects in accordance with generally recognised accounting framework prescribed by the National Treasury, as required by sections 40(1)(a) and (b) of the PFMA.[9]


·         Expenditure management


(i)                   The Accounting Officer did not take effective steps to prevent irregular expenditure, as per the requirements of section 38(1)(c)(ii) of the PFMA AND TR9.1.1.

(ii)                 The evaluation criteria and system to be used in awarding preference points for the procurement were not specified in the bidding documents, nor did it specify the maximum points to be awarded for Historically Disadvantaged Individuals |(HDI) as required by section 7 of the Preferential Procurement Policy Framework (No.5 of 2000).

(iii)                The payments due to creditors were not always settled within 30 days from receipt of an invoice as per the requirements of section 38(1)(f) of the PFMA and Treasury Regulations (TR) 8.2.3.[10]


·         Procurement and contract management


Invitations for competitive bidding were not advertised for a minimum period of 21 days as per the requirements of TR 16A6.3(c).[11]


·         Transfer of funds and/or conditional grants


The accounting officer did not complete and submit to the National Treasury, the compliance certificate as required by Section 10(1)(a) of Division of Revenue Act, (No 1 of 2010) (DoRA) by 15 April 2011, in respect of the Rural Household Infrastructure grant.[12] 


Predetermined objectives


·         Usefulness of information


The AG indicated that the reported information was deficient in respect of the following criteria:


(i)       Measurability – The targets are not measurable.

For the selected indicators, 29% of the planned and reported targets were not measurable in identifying the required performance.


(ii)     Reliability of information - The reported performance information did not occur and does not pertain to the entity.

Sufficient appropriate evidence to support the reasons for mayor variances between the planned and the actual reported targets could not be obtained; therefore 40% of the reasons for mayor variances could not be verified. For 48% of the selected material reported targets the source information or evidence provided was not valid.


Internal control


·         Leadership

The Accounting Officer did not exercise oversight responsibility regarding financial and performance reporting and compliance with laws and regulations related to internal controls.


·         Financial and performance management


o           Management did not prepare regular, accurate and complete financial and performance reports that are supported and evidenced by reliable information.

o           Management did not review and monitor compliance laws and regulations.


8.  Fact-finding visit (or oversight) reports


The objective of the oversight activities was to oversee compliance/adherence to human settlements legislation, policies and implementation of service delivery programmes and projects. Furthermore, objective was to ascertain any challenges in the implementation of such policy, legislative aspects, as well assessing the impact on changing the people’s lives. The oversight activities were also aimed at providing advice where necessary.  


In order to give effect to above-mentioned objective, the delegation held briefing sessions with the national Department, respective provincial Departments and municipalities, including other stakeholders.  The focus was on the roll out and implementation of the Human Settlements strategic plans, projects, programmes and on conducting site visits.


8.1 Oversight visit to KwaZulu-Natal Province


The Portfolio Committee on Human Settlements undertook an oversight visit to the KwaZulu-Natal province during the second term of the Parliamentary Programme from 27 February to 4 March 2011.


8.1.1 Observations made by the delegation


1.       There is no adherence to IGR (lack of synergy) and co-operative governance. The delegation was able to bring in people from various levels in the province, that is, provincial and municipalities. This made the oversight visit very easy and manageable because all parties had an opportunity to have a common understanding and observe what is actually happening on the ground.

2.       No new projects that were reported. In almost all the areas the delegation had visited, most of the projects were due for rectification.

3.       Proper co-ordination between the districts and local municipality remained a challenge.

4.       The report on the current response to post-disasters in the province has not been able to convince the delegation that the municipalities were capable of responding to disasters. The province did not provide a detailed report reflecting the areas, number of people affected and those that have been supported.

5.       The Cornubia development is still not clear; the inclusion of other stakeholders’ role is not defined.

6.       The relocation of families occurred from one site to the other and people were left for many years before their housing needs could be attended to.

7.       The Department did not work closely with the deeds registry.

8.       Transit camps are made of corrugated iron sheets, and the time frame of 18 months was adhered to.

9.       Lack of skilled and adequate personnel, particularly technical employees

10.   Some municipalities are not accredited but continue to appoint contractors to build houses.

11.   Engineers were signing geotechnical reports, despite not being registered with the national engineering boards.

12.   Municipalities do not clearly distinguish in their reports as to how much was allocated to a particular project and how much money was left before the project could be completed.

13.   The use of consultants delayed progress, for instance the municipality would report that there is a scarcity of water but during the delegation’s site visits, it would find that water is indeed available. Instead, what was required is a creative effort in developing concrete plans and programmes to source the water.

14.   Sub-standard material is used to construct houses.

15.   There is a tendency by some of the farmers to destroy the graves of farm workers’ relatives, especially in Kokstad.

16.   The delegation observed a dispute amongst community members on the occupancy of the units in Imbali 1 – ward 19.  There was an allegation of selling of such units by councillors – which units were in a dilapidated state. 


8.1.2 Recommendations


The Committee recommended the following:


Recommendations to the Minister of Humans Settlements


  1. The Minister should commission an urgent investigation into the Imbali phase 1 (hostels) and phase 13 (double-storey houses and illegal unit occupancy) and a report to that effect should be submitted to the Committee within three months on receipt of the oversight report. The report should include the reasons for contractors not being paid and ending up leaving the site unattended.
  2. The Minster should intervene urgently on the sanitation issue in the Impumelelo settlements and report to the Committee within three months of receipt of the oversight report.


Recommendations to the Minister of Rural Development and Land Reform


·         The Minister should urgently intervene in the conflict between farm workers/dwellers and farmers in relation to the destruction of their ancestral graves in Kokstad. 



Recommendations to the Department of Human Settlements


  1. Engineers who sign fraudulent geotechnical reports should be investigated and held accountable.
  2. In all state-subsidised housing, the materials used should comply with SABS standards to prevent contractors from using material of low quality.
  3. The Department should release the state-owned land in Tin-town for housing development.
  4. The Department should table a full report on disaster management and related expenditure to Parliament within one month of receiving the Committee’s oversight report.
  5. The people housing process should be promoted and housing co-operatives should be given priority.
  6. The maximum period of 18 months for housing people in transit camps should be adhered to.
  7. The UThukela water board should address water shortages in the area.
  8. Municipalities should take the initiative to make provision for adequate Temporary Relocation Units.


8.2 Oversight visit to Mpumalanga


The Portfolio Committee undertook an oversight visit to the Mpumalanga Province from 24 to 30 July 2011 and the following observations as well as the recommendations were highlighted:


8.2.1 Observations of the Committee in Mpumalanga


1.       The province still faces a huge housing backlog. However, the delegation observed that it is difficult for the province to quantify its backlog.

2.       Lack of bulk infrastructure: as a consequence houses were constructed with no basic infrastructure in a number of projects.

3.       Inadequate planning: projects were being approved on land without having conducted any proper geotechnical studies. For example, in Thaba Chweu, it was discovered that land on which a project had been approved was dolomitic.

4.       Invisibility of the National Home Builders’ Registration Council, as well as the Housing Development Agency.

5.       Lack of dedicated policy to regulate the roll-out of the sanitation programme, including a lack of commitment from both the national and provincial Departments to fast track and upscale sanitation programmes.

6.       No evidence-based report to quantify the provision of sanitation services in the province.

7.       Lack of monitoring of contractors, resulting in incomplete housing structures, non-compliance with regulations and project management capacity thus compromising quality.

8.       Disaster-affected areas were not prioritised – in Bushbuckridge Municipality bridges that were washed away following heavy rains were not rebuilt. As a consequence school children were struggling to get to schools in the affected areas.

9.       Inadequate capacity within some of the municipalities: provincial inspectors were accused of not doing enough to assist municipalities.

10.   Shoddy workmanship on houses and toilets which remain unused due to poor quality.

11.   Non-availability of a quantifiable report on state-owned land or private land in the province.

12.   There are still people residing in houses that contain asbestos roofing. No arrangements had been made to re-house people with asbestos–free houses.

13.   The role of the private sector was not clarified.

14.   The delegation visited the Graskop project in Thaba Chewu municipality which is the result of a partnership between South Africa and the People’s Republic of China.

15.   The delegation observed that at Simile flats in Thaba Chewu municipality the wall separating the toilet from the rest of the dwellings had collapsed, which served as a health hazard since occupants had to climb over the debris.

16.   The delegation further observed that in Thaba Chewu municipality a very old and uninhabitable hostel is occupied by people despite the safety risks it poses. Furthermore, the delegation determined that this building has not been transferred to the Department of Public Works post 1994 (it legally still remains under the previous regime). 

17.   The delegation was informed by the municipality that in Pilgrims Rest, a primary school still utilises the bucket system.

18.   Two bridges were swept away during a disaster in ward 29, Bushbuckridge municipality and in eSandleni, Albert Luthuli municipality. This resulted in local children being unable to attend school.

19.   During the same disasters, the roof of a school in eSandleni, Albert Luthuli municipality was blown away.

20.   In Thaba Chewu, about 200 beneficiaries were approved and later discovered that the land where the project was to be developed is dolomitic.


8.2.2 Recommendations


To Parliament


1.       The Mpumalanga based-members of the Committee together with municipalities and members of provincial committee in the legislature should conduct an evidence-based approach site visit to verify 513 completed sanitation project units in Nkomazi and report to Parliament by January 2012. 


To the Minister of Human Settlements


It is recommended that the Minister of Human Settlements:


  1. Briefs the Committee with regard to the Memorandum of Understanding signed between the People’s Republic of China and South Africa relating to the project in Graskop area, Thaba Chewu municipality.
  2. Urgently intervenes with regard to Simile flats where the toilets structure is collapsing and was separating from the main unit structure in Graskop at Thaba Chewu Municipality as this posed a risk and hazard to the lives of the dwellers.
  3. Urgently intervenes to assist 200 beneficiaries affected by the dolomitic site in Thaba Chewu.


To the Minister of Public Works


The Minister is requested to intervene urgently on the following:


1.       Disaster-affected bridges in Thulamashe at Bushbuckridge Municipality (Ward 29, Kumane and Wisane villages) which were washed away by heavy rains.

2.       Disaster-affected bridge in eSandleni at Albert Luthuli Municipality

3.       Assist in transferring the dilapidating Graskop hostel from the previous government (pre 1994) to the Department of Human Settlements as it posed a huge risk and hazard to the hostel dwellers in an endeavor to intervene and facilitate the redevelopment/upgrading as per the Department of Human Settlements’ Community Residential Units policy.


To the Minister of Basic Education


  1. The Minister is requested to intervene urgently in regard to the roofing of the school in eSandleni, Albert Luthuli Municipality, which was blown away during the disaster.


To the national Department of Human Settlements


1. The national Department should assist the province and the municipality in providing temporary relocation units for residents of Simile as a matter of urgency.

  1. The national Department, as an anchor department mandated with the sanitation function, should urgently intervene and assist the primary school in Pilgrims Rest with access to adequate and sustainable sanitation.
  2. The national Department should encourage other provinces to learn the best practices on Community Residential Units (CRUs) development programme from Mpumalanga.


To the Mpumalanga province


1.       Asbestos roofing should be eradicated and replaced with a proper roofing system as this is a health hazard to communities (Nkangala District Municipality).

2.       A full, detailed report on land purchased (R95 million spent in 2008) by the province, how much land has been utilised by each benefiting structure i.e. the municipalities and Social Housing Association, the extent of the land purchased for Mbombela, when and in which specific areas should be provided to the Committee 

3.       The province should ensure the provision of adequate qualitative and sustainable sanitation infrastructure to communities and expand the capacity to roll out and accelerate sanitation programmes. It is also recommended that greater priority should be given to Amsterdam, Dipaleseng, and Mkhondo municipalities. The province should urgently communicate with the municipality and ensure that the residents of Rooikopan are connected to a sewer system.

4.       A list of all villages that benefited from the provision of sanitation managed through the Department of Human Settlements during the 2010/11 financial year in Nkomazi Municipality should be provided to the Committee.  The report should be forwarded to the Committee within a month after the receipt of this report.

5.       The province should provide the names of places where farm worker assistance projects would be constructed.

6.       Detailed information on how Burn Stone Mine has assisted in building of houses should be provided, including the number of houses and contributions in respect of each house.

7.       The provinces should provide a detailed list of job opportunities created through housing delivery in the province, its impact on communities and the types of skills transferred.

8.       Public participation with the communities and in particular with the traditional leaders should be strengthened.

9.       More housing inspectors should be appointed as the shortage of such capacity comprises the quality of houses delivered.

10.   A list of the projects to be unblocked with plans to unblocked them should be provided.

11.   A list of informal settlements which would include clear plans and programme on how these would be upgraded or eradicated should be provided.

12.   The province should provide the report on how the deregistration of beneficiaries was done when the beneficiaries could not be found or had died before the allocation of a house.

13.   A detailed report and role of the Mpumalanga Housing Finance Corporation should be provided to the Committee.

14.   A written response on how much was spent in addressing disaster-affected areas should be provided.


8.3 Oversight visit to the Free State province


The Portfolio Committees on Human Settlements and on Cooperative Governance and Traditional Affairs undertook a joint oversight visit to Free State Province on 15 and 16 September 2011 in preparation for the People’s Assembly.


8.3.1 Delegations’ observations


  1. The purchasing of building material by the provincial Department of Human Settlements in the 3rd quarter in the amount of R343 million is in contravention of DORA and the Housing Code. Subsequently, there was no funding available to finance projects in the 4th quarter of the financial year due to over-spending.
  2. Discrepancies existed between the presentation made to the committees by the national Department of Human Settlements and the provincial Department of human settlements in terms of the information presented to the committees.
  3. No plans were in place for rural sanitation development.
  4. 42% of the current budget was spent to pay invoices for previous financial year (2010/11).
  5. The provincial Department is in the process of developing an implementation manual for the R1 billion guarantee scheme which is the competency of the national Department.
  6. The reduction of numbers in rural housing development, especially in Mokgoloekweng.
  7. The rolling out of community halls by the provincial Department of Human Settlements (not their competency).
  8. Funding allocated to social and rental housing was not utilised for its intended purpose.
  9. There was no indication of blocked projects.
  10. Approximately 17 000 approved subsidies in the 2008/09 financial year were withdrawn in the 2010/11 financial year.  The delegation was not provided with an explanation of what happened to the beneficiaries of these subsidies and the contractors who were allocated the projects.
  11. In 2010/11, 500 units were allocated and later reduced to 100 units.
  12. The delegation was informed during a community meeting that a clinic in Brandfort was in a state of physical disrepair and the ceiling of the community was falling apart.
  13. The delegation visited a site in Brandfort where new sanitation technology is piloted, which saves water in the community.
  14. No information was provided on backlogs for housing and sanitation in the province.
  15. The clinic and the hall in Brandfort were not maintained and the ceilings were falling apart.
  16. There is a need for a satellite police station in Brandfort as the community struggles to reach the one in town due to distance and not having enough cash to get there.
  17. New sanitation technology is piloted in a project in Brandfort that saves water.
  18. There was no street lighting to eliminate crime and no recreation facilities.
  19. Lack of food security.
  20. The community was not pleased with the fencing of the graveyard as they thought it would become a crime zone.
  21. Zero delivery of planned sites by the province, yet the budget has been overspent.
  22. In White City, food gardening needs to be promoted to increase food security.
  23. No scholar transport was available in Botsabelo Extention 1 informal settlement. Children were walking long distances to schools, which was not safe.
  24. Most of the townships were not yet proclaimed and townships’ establishment was delayed due to a lack of reservoirs.
  25. The provincial Department is not building according to norms as standards as required by the Housing Code, and some units are 50m² and others do not have a bathroom and shower.
  26. Most of beneficiaries do not have title deeds.


Observations by Committee


The Committee observed that the Free State significantly underspent on the 2010/2011 allocation and tried to recover from this towards the end of the financial year by purchasing an excessive amount of building materials. The Committee further noted that not only was this purchase not provided for in the 2010/2011 business plan (and thus not approved), but during a Special Technical Minmec sitting, Free State was warned that such a purchase would contravene the conditions of the grant.


Accordingly, funds that were not yet transferred for the 2010/2011 financial year were stopped by the national Department of Human Settlements in consultation with the National Treasury and reallocated in accordance with the provisions of the 2010 Division of Revenue Act.


It was furthermore noted that funds transferred based on the 2011/2012 allocation were again not used in terms of the approved business plan, but were used to pay outstanding invoices of 2010/2011.


The Committee therefore makes the following findings:


1.       Section 10 of the 2010 DORA requires that a business plan of the province setting out how the allocation will be utilised, must be approved prior to the start of the financial year.

2.       Section 12 of the Act requires monthly reports on expenditure and challenges experienced, as well as quarterly and annual performance evaluations.

3.       Section 15 of the Act stipulates that an allocation may only be used for the purpose stipulated in the payment schedule approved by National Treasury.

4.       Section 33(2) of the Act provides that any spending in contravention of the  Act, or a framework published under the said Act, constitutes irregular expenditure in terms of the Public Finance Management Act, 1999 (Act No. 1 of 1999) (“PFMA”).

5.       Section 17(4)(a) of the 2010 DORA provides that the Minister may approve that the stopped allocation or a part thereof may be used to meet the Province’s outstanding contractual financial commitments. The Act defines ‘the Minister’ as the Minister of Finance.


8.3.2 Recommendations 


To Parliament


1.       The Committee requests that Parliament (Honourable Speaker) communicates the above state of affairs with respect to the Free State province to the Provincial Legislature, in an endeavour to draw the attention to and address issues of compliance.


2.       The Portfolio Committee on Human Settlements in compliance with the Money Bills Amendment Procedure and Related Matters Act, 2009, should confer with the Standing Committees on Finance and Appropriations as to the remedies available to Parliament directly, such as the Act itself. This process can be used to address moneys allocated to the provincial Department through the Human Settlements Development Grant as well as to ensure that the national Department exercises more effective controls over moneys transferred to the provincial Departments.


To the Minister of Finance


The Minister should brief the Committee on:


1.       Whether the Free State province obtained authorisation from the National Treasury to utilise the Human Settlements Development Grant as approved according to section 10 of the 2010 DORA to purchase building materials in 2010/11.


2.       Whether the Free State province obtained authorisation from the National Treasury to utilise 2011/12 transfers to settle 2010/11 outstanding invoices in terms of section 17(4)(a) of the 2010 DORA.


To the Minister of Human Settlements


1.       The Minister of Human Settlements should commission the Auditor-General to investigate whether any irregular expenditure and misappropriation was incurred in respect to the Human Settlements Development Grant by the Free State province to purchase R343 million of building material in 2010/11.


To the national Department of Human Settlements


1.       The Department should urgently investigate the roll-out of the water-based, chemical-free toilets that can be used where there was no sewer infrastructure, particularly in rural areas.


To the Free State province


1.   The provincial Department of Human Settlements should assist in the challenges pertaining to the North West Housing Corporation.  The houses belonging to the Corporation should either be transferred to its occupants or to the municipality.


2.       The provincial Department should take steps to mitigate an expectation by future beneficiaries to receive 56m² houses when this laudable delivery is no longer possible when the available serviced stands have all been used.  The provincial Department should stick to norms and standards as stipulated in the Housing Code as it perpetuates differences between the communities in the province and other provinces as well.


3.       Facilitate provision of high mast lights in informal settlements such as Khotsong, Bloemside phase 9 and 10 and Botshabelo Ext 1 that need to have such lights.


4.       Facilitate the building of recreation centres for the youth to be kept busy and develop youth programmes.


5.       Facilitate the provision of a satellite police station in Brandfort.


6.       Facilitate the upgrading of a clinic in Brandfort with the Department of Health.


8.4     The Millennium Development Goals[13]


In September 2000, the world’s leaders met in New York to set out a new global vision to strengthen efforts for peace, human rights, democracy, strong governance, environmental sustainability and poverty eradication. South Africa, together with 188 other UN member countries, adopted the resulting Millennium Declaration, which committed signatories to ambitious targets with clearly defined deadlines. The roadmap for achieving the Declaration’s commitments resulted in the Millennium Development Goals (MDGs), consisting of eight goals, 21 indicators and 60 official targets to be achieved by 2015.


Goal 7 of the MDGs “Ensuring environmental sustainability” has specific relevance for human settlements and is given effect through the following targets:


·         Target 7C: Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation.


·         Target 7D improving the lives of at least 100 million slum dwellers.


Government has adopted 12 Outcomes as its key focus of work by 2014. Each Outcome has a set number of measurable outputs with targets. Outcome 8 aims to provide Sustainable Human Settlements and improved quality of household life.  Under Outcome 8, the target is to increase the provision of basic services by the year 2014, including increasing access to sanitation from 69% to 100%.[14]  In terms of the Department’s Strategic Plan, the aim is to achieve the eradication of sanitation backlogs by 2014, one year prior to the target specified by MDG 7.


Sustainable human settlements and improved quality of household life are defined by:


·         Access to adequate accommodation that is suitable, relevant, appropriately located, affordable and fiscally sustainable.

·         Access to basic services (water, sanitation, refuse removal and electricity).

·         Security of tenure irrespective of ownership or rental, formal or informal structures.

·         Access to social services and economic opportunity within reasonable distance.


Outcome 8 is of critical importance for various reasons. Firstly, it is a requirement of the Constitution and the Bill of Rights. Secondly, it is core to human dignity and social stability and is a key enabler of health, education and social cohesion outcomes. Lastly, with good planning, it can also serve as a catalyst for economic development and job creation.  Ultimately, the outcomes of the national effort around human settlements must be seen in the context of social development and transformation as well as meeting the objectives of rolling back under-development.


8.4.1 Issues for consideration


1.       The delay by the Department to develop a framework for procurement processes and management of the sanitation programme adversely affected the delivery of sanitation and may lead to potential fraud and corruption in the administration of procurement systems.

2.       Delays in the development or integration of policies and systems to manage the RHIP resulted in the programme not being implemented more than a year after the announcement by the President in 2009.

3.       The capacity of the Department to deliver on the service level agreement signed with the municipalities is questionable.

4.       Service providers citing the inaccessibility of some areas/communities as the cause of their failure to deliver services raised a serious concern with the Committee, as it undermines citizens’ constitutional right to basic services.

5.       The appointment of a service provider that does not have sufficient experience in implementing sanitation projects has also been a serious concern.

6.       Unavailability of a risk management plan to address the issue of unexpected rainfall challenges.

7.       The lack of a clear quality assurance strategy to monitor project implementation.

8.       Under-expenditure is a possible indication of capacity constraints resulting in poor service delivery.

9.       Alarming high projections revealed at the performance and expenditure at the end of the financial year was questionable.

10.   Provision of advance payment to service providers without proper precautions (risk management plan) posed a serious challenge in acceleration of MDGs.

11.   The Committee is of the view that unless the pace of service delivery is accelerated, the MDG target of eradicating poverty and providing proper sanitation may not be realised.


8.5 Recommendations


8.5.1 Overall recommendations to the Department of Human Settlements


1.       Collaborative planning between the Department of Human Settlements and other sectors dealing with water, waste management, energy and education, for more effective and efficient utilisation of resources should be enhanced.

2.       Provision of advance payments to service providers without proper precautionary measures and proper consultations with the National Treasury posed serious challenges on the acceleration of sanitation.  Therefore, this issue requires serious consideration.

3.       Monitoring and evaluation mechanisms should be strengthened; furthermore, an advanced and enforcement framework should be developed.

4.       Capacity building – employees should be well trained to function properly and external capacity should be exploited such as the Development Bank of Southern Africa and the Public Administration Leadership and Management Academy.

5.       A review of the White Paper on Basic Household Sanitation and promotion of health and hygiene should be fast-tracked.

6.       The National Sanitation Task Team should be revived.

7.       A 5-year sanitation strategy and Rural Policy on Hand-Wash should be drafted.

8.       A comprehensive and effective communication strategy should be developed as it would foster effective participation and promote space for engagement of citizens and all role players.

9.       Sanitation planners should be encouraged to use innovative and creative methodologies for delivery of sanitation services to communities. Further, such methodologies should be monitored and their impact evaluated on a regular basis.

10.   Equity, equality and sustainability should be critical elements in the implementation of a sanitation programme.

11.   National and international sanitation “days”, such as Global Hand Wash and Hygiene days should be marketed and observed on an annual basis.

12.   The national Department of Human Settlements should co-ordinate the drafting of a progress report on the eThekwini commitments and submit it to the African Ministers Council on Water (AMCOW) before 19 August 2011.

13.   The Department should upscale the sanitation delivery process. Therefore, expansion of the delivery capacity by appointing more service providers to roll out the programme for the benefit of ensuring accelerated provision of sanitation services is required. 

14.   The Department should urgently attend to communities where sanitation services remain a challenge.

15.   Provinces raised concerns on certain policy issues which required urgent attention.

16.   The Department should disaggregate per province the target of ensuring proper services and security of tenure for 400 000 households by 2014. This would assist the Committee in enhancing its oversight function in respect of meeting the targets of Outcome 8, as well as progress towards achieving the MDGs.

17.   A common definition of the bucket system should be developed to ensure that all stakeholders have a shared understanding of the issue. The Department should ensure that affordable rental products are incorporated into the policy.

18.   The Department should prioritise the drafting of a policy on hostel re-development.

19.   The Department should develop a strategy to encourage provinces to utilise the services of the HDA to address the availability of land issue, which has been identified as a universal challenge.

20.   The Department to provide appropriate TRs rather than corrugated iron facilities as they are a health hazard to the lives of the people.

21.   While it is acknowledged that the Department cannot necessarily be strictly subjected to the normal 25% threshold, it should take all available measures to avoid the late transfer of funds, which often has an overarching effect on the whole of Government.

22.   The Department should ensure that all transfers take place as required and that receiving institutions are supported and monitored and progress reports are submitted to the Committee on a quarterly basis.


9. Committee’s Overall Observations relating to BRRR process 2011


1.       The Committee faced a challenge in finalising its BRRR report within the time frame allocated to this process due to insufficient time.

2.       The Department’s overall expenditure of 98% in some instances masks significant under-expenditure in some of its main programmes (such as Housing Policy, Research & Monitoring, and Strategic Relations & Governance under-spending by 25% and 40% respectively).

3.       The Committee acknowledges that relevant stakeholders have shared similar experiences and observations on a number of issues raised, e.g. DPME, FFC and AG, etc.

4.       The information reported in the annual report makes it difficult to assess the actual delivery of completed units and those that are still in foundation phases.

5.       Lack of performance information provided on RHIP. Material under expenditure on the Rural Household Infrastructure Grant (RHIG) resulted in inadequate service delivery to poor rural communities.

6.       There are discrepancies between planned (as recorded in strategic and performance plans) and actual performance, as well as funding appropriated by Parliament for specific purposes.

7.       No dedicated policy and legislation on housing co-operatives, as well as the policy provision housing to backyard dwellers.

8.       Issues raised in the Auditor-General’s report are a matter of critical concern to the Committee as some may be detrimental to service delivery. 

9.       The discontinuation of key performance areas in a number of instances is a result of non-approval by the accounting officer and targets could not be met.

10.   Quite often a number of roll-overs, virements and adjustments have been made, however expected targets were not achieved, subsequently resulting in under expenditure in some programmes.

11.   While appreciating the DPME’s work, the Committee is concerned that the DPME only relies on the information provided by the Department and does not conduct on-site monitoring and evaluation.

12.   The appointment of a service provider for RHIP, which is currently also serving approximately 18 government departments, poses a serious risk to the achievement of targets. Moreover, only two service providers were appointed to implement a programme to the value of R1.2 million over a three-year period.

13.   The quality of some housing units, as well as sanitation facilities delivered to date, is a serious concern to the Committee.

14.   While it is acknowledged that significant progress has been made with the rollout of sanitation services, the Committee is very concerned about quality, equity and sustainability aspects related to sanitation.  Respective departments are using different definitions (norms and standards) to measure access to basic services. This means that there may be different calculations of the extent of the backlogs and progress made to date. The Committee therefore fully supports the call for the SAHRC to conduct a national audit of sanitation facilities rolled out to date.

15.   Community participation in the development of human settlements remains a serious concern.

16.   Delays in the appointment of service providers to maintain and render necessary support to provinces in management of Housing Subsidy System (HSS) is also a concern.

17.   The costs associated with the non-filling of vacancies are a serious concern as it hampers service delivery.

18.   The Department administers transfers to receiving institutions (such as provincial departments, municipalities and other agencies involved in the provision of integrated human settlements), which are subject to performance and compliance by receiving institutions and often have time implications. However, the Department has an obligation to ensure that all transfers take place as required and that receiving institutions are supported and monitored.

19.   In some instances the lack of alignment of provincial outputs with national policy priorities has a detrimental impact on achieving national outputs and outcomes, for example the rectification programme, the farm worker programme, People’s Housing Process (PHP), budgeting for blocked projects, etc.

20.   There is a lack of capacity and expertise at provincial level for project management to ensure effective utilisation of available resource within current priority programmes projects.

21.   Meeting the 2014 target of ensuring proper services and security of tenure for 400 000 households requires that agreement be reached on the funding alignment (between Urban Settlement Development Grant and Human Settlement Development Grant), as well as targets for informal settlement upgrading between provinces and municipalities.

22.   The non-finalisation of the national Department of Human Settlements Turnaround Strategy resulted in a number of vacancies not being filled, and alignment of departmental structure and revision of the Information Communication Technology System (ICTs) not being approved –  ultimately it resulted in under expenditure in some programmes.

23.   A number of outputs under Programme 2: Housing Policy Research & Monitoring, could reportedly not be completed due to a lack of funding and was  subsequently discontinued by the Department. However, this programme still managed to underspend 25% of its budget.

24.   By the end of the first quarter of the 2011/12 financial year, funds have yet to be transferred to some of the entities.

25.   As was the case the previous year, the Auditor-General again highlighted the fact that the Department’s indicators are not measurable and in some instances performance variances could not be verified.

26.   While to date 33 000 hectares of land has been identified compared to a target of 6 500 hectares by 2014, the holding agencies are not prioritising the processing of land identified with the HDA as speedily as required.

27.   Progress has been made with respect to meeting the 2014 target of ensuring an improved affordable housing market such as the development of a Mortgage Default Insurance and a review of the Finance Linked Individual Subsidy Programme (FLISP). However, further engagement is required with the banking sector and there is a risk that the target may not be met by 2014, and the need to fast-track appointment of a board for HLAMDA.

28.   The accreditation of municipalities has been slow to date, with not a single municipality awarded level 3 accreditation – currently six metros have level 2 accreditation.

29.   Inefficient land use patterns evident through urban sprawl and the segregated spatial patterns (the poor accommodated on the fringes far from economic opportunities and adequate public transport infrastructure) impact negatively on achieving social cohesion, as well as on reducing carbon emissions and energy usage. 

30.   Enrolment of projects with the NHBRC is still inadequate and the entity reported that a total of 49 929 subsidy homes were enrolled in 2010/11 against a target of 94 000.  

31.   The NHBRC took a decision to outsource its internal audit function – this decision will be pursued by the Committee in future engagements with the entity.

32.   The Auditor-General emphasised areas related to expenditure management, as well as procurement and contract management for the Department, which constituted deviations from relevant frameworks. These matters will require close monitoring by Parliament in future engagements with the Department.



10. Recommendations


1.       Overall recommendations pertaining to the Annual Report 2010/11


 To Parliament


1.   To ensure effective and efficient engagement with the BRRR process, Parliament should consider expanding the current time frame for processing of BRR reports through reviewing relevant legislation in this regard.


2.       The Committee requests that Parliament (Honourable Speaker) communicates the above state of affairs with respect to the Free State province to the Provincial Legislature in an endeavour to draw the attention and address issues of compliance.


 To the Minister of Human Settlements


1.       The Minister should brief the Committee on curative measures and plans to remedy issues raised by the Auditor-General in his 2010/11 report by 2 November 2011.

2.       The Minister should provide the Committee with a report from the Auditor-General in respect of the Free State Department’s grant expenditure as well as the validity of the expenditure incurred in the last months of the 2010/2011 financial year.

3.       If the Auditor-General has already provided this report to the Minister in the normal course of duties, the Portfolio Committee requests a briefing on the above.

4.       The Minister should brief the Committee on progress on the above-mentioned matter by January 2012.

5.       The Minister should brief the Committee on the national Department’s monitoring of the Free State in respect of 2011/12 grant funds by 2 November 2011.

6.       The Minister should brief the Committee on the Auditor-General’s report for 2010/11 and curative measures planned to address matters of emphasis by 2 November 2011.


To the Minister of Finance


1.   In terms of sections of 33 and 34 of DORA, the actions of the Free State department could constitute irregular expenditure and financial misconduct, and therefore the Committee requests the National Treasury to provide a report on the Free State department’s expenditure in relation to the grant, as well as whether DORA was contravened, and if, so what steps National Treasury has taken.


To the national Department of Human Settlements


1.    The Department should consider the issue of vacant posts as a matter of urgency, given the requirements of the Public Service Act (No. 103 of 2004) coupled with the President’s call for departments to fill all vacant posts.

2.    The Department should brief the Committee on its proposed turnaround strategy by 2 November 2011.

3.    The Department should fast track the review of relevant policies and legislation, and thus include dedicated policy, legislative framework on housing co-operatives management and administration.

4.    The Department should fast track the review of the current institutional funding arrangements.

5.    The Department should strengthen monitoring and evaluation mechanisms.

6.    Accreditation of municipalities should not just be a compliance matter, but proper procedures should be followed – relevant processes should be procedurally sound, systematic and sustained over the long term.

7.    The Department should brief the Committee on the progress made on recommendations made by the Committee on RHIP, including current progress.

8.    The Department should upscale the sanitation delivery process, thus the expansion of the delivery capacity by appointing more service providers to accelerate service delivery.


To the DPME


1.    The DPME should intensify its monitoring oversight on compliance by the respective departments on the delivery agreements signed, as well as fostering intergovernmental relations and co-operative governance principles.

2.    The DPME should consider conducting on-site visits and enhancing its monitoring mechanism to ensure less reliance on the Department.


It is worth noting that, a number of critical observations and recommendations have been made throughout the document and will also require an urgent intervention.


11. Conclusion


A review of the work of the Department of Human Settlements suggests that the ability (or commitment) of provinces to give effect to national priorities and outcomes impact significantly on the national Department’s ability to achieve its strategic objectives. While considerable progress has been made to date, there are still a number of challenges facing the achievement of sustainable human settlements, which are exacerbated by the challenges within the Department. Most noteworthy is the extent to which the inadequate human resources impact on the Department’s ability to meet its objectives and it should be noted that the Auditor-General raised issues of leadership in his report.


Further, while on average the Department did not perform too poorly in terms of under expenditure, the high rate of under expenditure in some of the main programmes is of serious concern. Despite the shifting of funds between programmes, as well roll overs, the Department still failed to meet all set targets for the 2010/11 financial year.  Again, this raises questions of capacity in the Department, which is supported by the fact that the Department took a decision to discontinue some of its outputs due to financial constraints, as well as non-approval by the accounting officer.


The Department’s progress towards achieving sustainable sanitation services in rural communities is also far from desirable and this will remain an oversight priority in future engagements with the Department.


The issue about the measurability of the Department’s performance indicators was again highlighted by the Auditor-General – an issue which the Committee raised with the Department during the previous financial year.


Non-performance in meeting the set targets on service stands, as well as unauthorised expenditure on building materials raises questions on the efficiency, effectiveness and economical use of money appropriated by Parliament for a specific purpose.  In this respect, the Committee will intensify its oversight responsibility during the remainder of this financial year.



Report to be considered.






 National Treasury, 2001. 1st Quarter Expenditure Report 2011/12 Financial Year

PSC, Public Service Act (No. 103 of 1994) available at:


Money Bills Amendment Procedures and Related Matters Act (No. 9 of 2009). Available at:


National Treasury. 2011. Estimates of National Expenditure.


Department of Human Settlements. 2011. Annual Report 2010/11.


Department of Human Settlements. 2010. Department Updated Strategic and Performance Plans 2010 – 2013.

[1] National Treasury (2011)

[2] Department of Human Settlements (2011), p. 18.

[3] ENE 2010, p631

[4] Ibid.

[5] Zuma (2010).

[6] Ibid

[7] Ibid

[8] Ibid

[9] Ibid

[10] Ibid

[11] Ibid

[12] Ibid

[13] Parliament’s report on the MDGs, September 2011

[14] Budget vote 31, 2011