FREE STATE DEPARTMENT OF HUMAN SETTLEMENTS 2017/18 FINANCIAL AND NON-FINANCIAL PERFORMANCE REPORT PORTFOLIO COMMITTEE N MOKHESI

TABLE OF CONTENTS Expenditure as at 28 February 2018 Expenditure per Milestone Expenditure Patterns Projected expenditure Non-Financial Performance Revitalization of Mining Towns Military Veterans Upgrading of Informal Settlements Title Deeds Recovery plan MTSF Performance Summary Summary of 2018/19 Business Plan

2017/18 HUMAN SETTLEMENTS DEVELOPMENT GRANT EXPENDITURE PERFORMANCE

HUMAN SETTLEMENT DEVELOPMENT GRANT DESCRIPTION MAIN ALLOCATED BUDGET R '000 ADJUSTED BUDGET EXPENDITURE AS AT 28 FEB 2018 AVAILABLE BUDGET AS AT AVAILABLE BUDGET AS AT 28 FEB 2018 % BUDDGET SPEND 28 FEB 2018 Financial Interventions 95 201 93 551 64 961 28 590 69% Incremental Intervention 872 500 872 824 749 761 123 063 86% Social and Rental Intervention 118 839 113 685 99 472 14 213 87% Rural Housing 21 259 14 244 8 372 5 872 59% Provincial Specific Programmes 85 239 98 734 25 076 73 658 25% TOTAL 1 193 038 947 642 245 396 79%

EXPENDITURE PER MILESTONE (2 095) R85 882 897 (1 019) R135 726 959 (1 072) P5.3 Completions R3 754 927 P5.2 Wall plate Other R355 651 859 Professional Fees: R140 955 760 CRU: R44 633 555 NHBRC: R22 285 207 Retention: R14 554 434 P5.1 Foundations

CASH FLOW AND EXPENDITURE PATTERNS Description April May June July Aug Sept Oct Nov Dec Jan Feb Total Monthly Transfers 250 118 112 565 133 053 92 803 81 302 127 304 69 802 1 110 853 Expenditure 896 202 205 58 991 33 091 141 509 44 432 114 434 53 393 152 095 42 543 104 053 947 642 Surplus/(Deficit) -47 913 -53 574 -99 962 48 706 -36 870 33 132 -27 909 24 791 -38 759 34 251 -163 211 6

ANALYSIS OF EXPENDITURE AS AT 16 MARCH 2018

PROJECTED EXPENDITURE

PLANNED EXPENDITURE - COMMITMENTS DESCRIPTION PROGRAMME AMOUNT Available Funds R210 307 000 Planned Expenditure: Housing Development Agency (HDA) Catalytic Project: Baken Park Ext 6 & 7 Sasolburg Properties Estoire R38 000 000 Title Deeds Exceptions R58 000 000 FLISP R3 077 075 Infrastructure Serviced Sites: Caleb Motshabi – 1 500 sites R47 736 622 Breaking New Grounds (BNGs) Units: 660 Competions R63 493 303 Surplus / Deficit R0

2017/18 HUMAN SETTLEMENTS DEVELOPMENT GRANT NON-FINANCIAL PERFORMANCE

NON-FINANCIAL PERFORMANCE Programmes Planned Target 01 Apr to 31 Mar 2018 Actual Performance Variance (under achievement must reflect a negative figure) Sites Units Other UISP 6 514 1 859   3 347 788 -2 807 -1 071 New Individual units* 334 1 843  1 119 1 375 -468 Social and Rental Housing 411 495  CRU 812  0 FLISP 300 10 -290 Other programmes * (not MTSF) 170 141 -29 Military Veterans 199 -199 Title Deeds: Pre 1994 780 365 -415 Title Deeds: Post 1994 36139 3009 -33130 Title Deeds: New development 706 Total 6 848 5 594 36 919 4 466 3 020 3 374 -1 351 -3 3545

PROVINCIAL DELIVERY Foundations / Slabs completed 269 8 122 493 Levels of Construction Number of structures Amount Foundations / Slabs completed 269 8 122 493 Wall plate 336 11 444 761 Finishes 660 43 926 049 Total 1 265 63 493 303

MANGAUNG Levels of Construction Number of structures Amount Foundations / Slabs completed 6 181 171 Wall plate 204 371 Finishes 104 6 921 680 Total 116 7 307 222

FEZILE DABI Levels of Construction Number of structures Amount Foundations / Slabs completed 24 724 683 Wall plate 36 1 226 224 Finishes 81 5 390 924 Total 141 7 341 832

THABO MOFUTSANYANA Levels of Construction Number of structures Amount Foundations / Slabs completed 65 1 962 684 Wall plate 68 2 316 202 Finishes 160 10 648 739 Total 293 14 927 625

LEJWELEPUTSWA Levels of Construction Number of structures Amount Foundations / Slabs completed 135 4 076 344 Wall plate 203 6 914 543 Finishes 189 12 578 823 Total 527 23 569 710

XHARIEP Levels of Construction Number of structures Amount Foundations / Slabs completed 39 1 177 610 Wall plate 23 1 783 421 Finishes 126 8 385 882 Total 188 11 346 914

REVITILIZATION OF MINING TOWNS

EXECUTIVE SUMMARY Total Planned Sites Budget for Sites PROGRAMMES FOR REVITALISATION OF DISTRESSED MINING COMMUNITIES Total Planned Sites Budget for Sites Total Planned Units Budget for Units Total Budget Allocation per programme MATJHABENG LOCAL MUNICIPALITY Incremental 1 300 R69 395 522 324 R80 985 651 R150 381 173 Social & Rental R18 859 899 Title Deeds Backlogs (2 497) R4 494 600 TOTAL R137 679 713 R173 735 672

REVITALISATION OF DISTRESSED MINING COMMUNITIES PROJECT NAME (for example: Matjhabeng Municipality) SUBSIDY INSTRUMENT/ PROJECT TYPE (RDP/ SOCIAL/ FLISP) DELIVERABLES 2017-2018 FINANCIALS Planned Target (sites &units) Actual delivered (site & units) Budget Allocation Actual Expenditure MATJHABENG UISP 1 401 119 R98 080 938 R32 913 264 New Individual Units 178 R47 081 483 10 256 749 CRU R18 859 899 Title Deeds Current 1 579 686 (R1 736 900) (R753 500) Title Deeds Backlog Post 94 4 692 906 R9 044 800 R929 799 Total : 7 850 1 711 173 067 012 44 099 812

Mining Town Interventions Spatial Transformation Plan: strategies to redress past spatial disparities ; Infrastructure Technical Assessment: to establish infrastructure capacity and determine financial interventions: 21 Household enumeration/settlement profiling conducted in Matjhabeng Local Municipality with the aim to provide the status quo and situation for each informal settlement; 15 Resettlement Plans: proposals on strategies that can be employed to upgrade informal settlements; Strategy on Illegal Land Occupation: plans Municipalities can employ to prevent illegal land occupation; Settlement Level Plans: specific plans to an informal settlement to assist with implementation of upgrading.

MILITARY VETERANS

MILITARY VETERANS Project Name/Description Total Preliminary Target Units Actual Performance (1April 2017 – to date) Annual Budget Total Expenditure Challenges Welkom 62 Military Veterans 62 R6 874 808 10 foundation casted Only 28 approved beneficiaries Theunissen 2 Military Veterans 2 R221 768 2 units completed Dispute between contractor and subcontractor Sasolburg 8 Military Veterans 8 R887 072 Houses have been handed over to beneficiaries Military Veterans 2015/16 Military Veterans-Parys: E'Tsho 6 2016/17 6 R940 896 6 Units completed No services; water; sanitation & Electricity Service Provider has been appointed to service the site with completion expected by June 2018 Military Veterans 2015/16 Military Veterans Viljoenskroon: Etsho 1 2015/16 1 R137 100 Military Veterans 2015/16 Military Veterans- Kroonstad: E'Tsho 9 2016/17 9 R1 525 986 6 units completed without services Septic tanks installed as a temporary measure Ladybrand 9 Military Veterans R887 088 Beneficiary issues not finalized Boshoff 3 Military Veterans 3 R332 652 Lack of serviced sites Bloemfontein - 600 IRDP Hillside View /Kentha Developers(2016/17) 50 Military Veterans 50 R5 778 377 44 Foundation casted; Construction of wall plates halted due to no electricty in that area. Risk of vandalism Bethlehem - 500 Voggelfontein Unital Holdings Military Veterans R5 544 300 No approved beneficiaries Total 199 R23 130 045

REPRIOTIZED FUNDING CATALYTIC PROJECTS

MATHJABENG LOCAL MUNICIPALITY REPRIOTIZED FUNDING Municipality Proj No Name Target Sites Target Units Budget Expenditure Over/Under Expenditure Reprioritised Amount Revised Budget Comments MATHJABENG LOCAL MUNICIPALITY F17040010/1 Water and Sewer for 873 sites Welkom, Thabong Ext 27 (Phokeng) R 5 545 227 R 803 749,21 R-4 741 478 R-4 000 000,00 R 1 545 227 F17040011/1 Matjhabeng: Water And Sewer Kutlwanong EXT 13 2900 (k10) R 16 986 010 R 231 415,04 R-16 754 595 R-5 000 000,00 R 11 986 010 F16040028/1 Welkom Hani Park (thabong Ext 18 ) 600 R 21 757 940   R-21 757 940 R-5 000 000 R 16 757 940 F16040029/1 Welkom Thabong Ext 11( Dichocolateng) R 21 673 094 R 111 717,61 R-21 561 377 R-13 000 000 R 8 673 094

REPRIOTIZED FUNDING Municipality Proj No Name Target Sites Target Units Budget Expenditure Over/Under Expenditure Reprioritised Amount Revised Budget Comments NALA LOCAL MUNICIPALITY F15020017/1 Infrastructure Monyakeng Wesselsbron: Sedtrade Internal Sewer and Water R 7 597 495   R-7 597 495 R-4 672 568 R 2 924 927 MANGAUNG METRO MUNICIPALITY F18040008/1 Estoire Airport Node Catalytic Project Township Establishment R 0 R 0,00 R11 145 456 R 11 145 456 Catalytic Project. To unlock implementation as one of the Government led projects. METSIMAHOLO LOCAL MUNICIPALITY F17040013/1 Land Acquisition 2017 (HDA) R 5 500 000 R-5 500 000 Negotiation with seller deadlocked F16040014/1 Sasolburg Properties - Township Establishment R 4 000 000 R 4 500 000,00 R 500 000 R 10 426 111,79 R 14 426 112 Catalytic Project. To fast-track planning phase DIHLABENG LOCAL MUNICIPALITY F16040059/1 Bethlehem: Bakenpark Ext 6 & 7 Water And Sewer 190 R 9 512 646 R 9 500 000,00 R-12 646 R 15 601 000,00 R 25 113 646 Catalytic Project. To maximise delivery

UPGRADING OF INFORMAL SETTLEMENTS

INFORMAL SETTLEMENTS INTERVENTION All 20 Municipalities are receiving NUSP support Free State recorded a total of 143 informal settlements, 5 of which have been upgraded already. The current number of informal settlements is 138; Installation of basic engineering services is currently underway in 14 Informal Settlements;

PLANNIG WORK COMPLETED ON INFORMAL SETTLEMENTS DISTRICT TOTAL Lejweleputswa 6 480 Fezile Dabi 6 078 Thabo Mofutsanyane 2 429 Xhariep 2 142 17 129

TITLE DEEDS RECOVERY PLAN - EXCEPTIONS

TITLE DEEDS – MTEF TARGETS PROVINCE TOTAL BACKLOG Previously Registered Rural Areas 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 PRE 1994 780   693 595 521 393 800 POST 1994 62 472 7 869 3 804 461 692 3 769 3 913 15 035 15 000 4 000 TOTAL 63 252 1 154 1 287 4 290 4 386 15 835 15 800 4 800 31

TITLE DEEDS – MTEF DELIVERY TO DATE PROVINCE TOTAL BACKLOG Previously Registered Rural Areas 2014/15 2015/16 2016/17 2017/18 TOTAL DELIVERY TO DATE TOTAL DEFICIT   Target Output (up to Feb2017) PRE 1994 780 693 900 595 521 393 2 202 -1 422 POST 1994 62 472 7 869 3 804 461 5000 692 28 694 3 769 36 139 3913 20 508 41 964 TOTAL 63 252 1 154 5 900 1 287 29 474 4 290 36 919 4386 22 710 40 462

The result of this exercise revealed the following exceptions: In responding to the exceptions identified by conveyancers, the department instructed Lexus Nexus to conduct deeds searches on the 2017/2018 backlog. The result of this exercise revealed the following exceptions: 33

INSTRUCTIONS WITH EXCEPTIONS

EXCEPTIONS In eradicating these exceptions, the department undertakes to implement the following remedial actions with financial implications Category Remedial Actions Allocated Hrs Hourly Rate Total Exceptions / miscellaneous Dispute Resolution 1 511 8 800 R 9 670 400,00 Exception - Already transferred  to this beneficiary Application for lost title deed copy 7 869 1 1750 R 13 770 750,00 Exception - Rural Area 3 804 R 24 345 600,00 Exception - Site transferred in someone else's name 2 480 R 15 872 000,00 Exception - Township not registered Factored in 2018 / 2019 financial year 881 9000 R 0,00 Exception - Township Register not opened 431 Exception - Transferred in spouse's name 65 R 416 000,00   Total Exceptions  17 041 R 64 074 750,00 35

EXCEPTIONS TO ARRIVE AT THE COST IMPLICATIONS, THE FOLLOWING CONSIDERATIONS WERE TAKEN INTO ACCOUNT To determine the dispute resolution rate, the department used the following document: Guidelines for taxing committee for the assessment of non-litigious fees (Free State Law Society Rules). Contained in it the following hourly tariffs are stipulated Attorneys with 0-5 years’ experience: R400.00/hour Attorneys with 5-10 years’ experience: R800.00/hour Attorneys with more than 10 years’ experience: R1200/hour The department resolved to use the midpoint tariff. With a view to afford the conveyancing firm a reasonable and adequate remuneration for the services rendered, the department resolved to allocate 8 hours for each dispute resolution. 36

REMEDIAL ACTIONS ADDITIONAL MEASURES UNDERTAKEN TO COMPREHENSIVELY FAST TRACK DEEDS DELIVERY OUTSIDE EXCEPTIONS, INCLUDE: Workload allocation to conveyancers has already been completed. Appoint dedicated Project Manager to speed up municipal signing of deeds documents and delivery of registered title deeds at Deeds office. Removal of non-performing conveyancers from the allocation of 2018/19 and re-allocate it to best performers. Capitalise on the commitment from Deeds Office that target number of days for registration of RDP houses will be 5 days from the date of lodgement. Expansion of conveyancer panel to introduce new conveyancers Key control measures in managing the approved conveyancer payment process by HDA are captured in the provided business process. 37

BUSINESS PROCESS - HDA Redirection of Unspent TRP Funds to Housing Development Agency (HDA) Role Players National HS: National Department of Human Settlement. FS-HS: The Free State Department of Human Settlements, responsible for end-to-end management of program delivery. Conveyancer: An approved conveyancing firm on contracted by the FS-HS based on its internal risk mitigating strategy. HDA: Housing Development Agency is a partner tasked with disbursing funds / payments to FS-HS approved conveyancing firms. LSSA: The Law Society of South Africa is a statutory body in terms of Attorneys Act, 1979 which is a regulatory body for attorneys FS-HS-IA: Free State Department of Human Settlement - Internal Audit, responsible for auditing the adherence to the approved business process FS-HS-Risk Free State Department of Human Settlement – Risk, responsible for risk management inclusive of mitigation. BAS: Basic Accounting System used to make payments and transfers. 38

MTSF SUMMARY 39 MTSF TARGET 2019 Cumulative Delivery: 1 April 2014 – 30 December 2017 Deficit Planned sites Final 2018/19 Business Plan Planned units Final 2018/19 Business Plan Total Budget 2018/19 Deficit after 2018/19 planned targets Programme 2019 Prov. MTSF target UISP (HSDG) (Inc. MMM) 49 380 21 378 -28 002 12 834 - R 329 932 705 -15 168 New Indiv Units 32 078 16 509 -15 569 3 568 R502 014 277 -12 001 CRU 600 977 +377 812 R95 632 300 +1 189 FLISP 4 097 91 -4 006 225 R14 247 500 -3 781 TOTAL 86 155 38 955 -47 200 12 8345 4 605 R941 826 782 Military Veterans 670 30 640 107 R24 592 000 533 Hectares of Land Acquired 1 000 1163.95 + 163.95 39

2018/19 BUSINESS PLAN

INFRASTRUCTURE BUDGET SUMMARY National HSDG allocation = R1 072 422 000 Prov. Mil Vets Top up funding = R 10 000 000 Provincial funding (Two – Roomed & Incompletes) = R 31 000 000 Expanded Public Works Programme (EPWP) = R 2 036 000 THE OVERALL BUDGET FOR THE PROVINCE IS = R1 113 422 000 Sites (12 834) = R 329 932 705 Units(4 605) = R 654 266 577 Title Deeds: Current (2 950) = R 3 105 300 Title Deeds: Backlog (15 835) = R 50 187 000

GEOGRAPHIC SPLIT TOTAL REGIONAL ALLOCATIONS Units = 4 605 Sites = 3 668 Deeds = 764 Budget = R 232 273 853 Units = 591 Sites = 5 886 Deeds = 795 Budget = R 264 243 661 Units = 1 190 Sites = 2 420 Deeds = 741 Budget= R 219 907 520 Units = 487 Sites = 0 Deeds =50 Budget= R 84 549 923 Units = 1587 Sites = 860 Deeds = 600 Budget = R 267 295 291 TOTAL REGIONAL ALLOCATIONS Units = 4 605 Sites = 12 834 Deeds = 2 923 Budget = R 1 072 422 000 42

INFRASTRUCTURE BUDGET SUMMARY

PROVINCIAL SUMMARY OF PROJECT READINESS

% of Total budget allocation % of Total budget allocation LEGEND Project Ready for construction /Contractor & PRT on Site Projects require SCM, Process dealing with contracts and IPW’s Projects Under Planning Provincial Sites Units Budget % of Total budget allocation 118 13813 2385 712 290 66% 41 1492 1358 360 131 34%   % Total 15305 3743 1 072 421 100% Catalytic Projects Sites Units Budget % of Total budget allocation 1  860 - R51 592 000 50% 1 186 R15 601 000 15%  1 R34 144 443 35% Total R101 337 443 100% 45

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