Departmental Quarterly Performance Report April – June 2017 Mr. M Departmental Quarterly Performance Report April – June 2017 Mr. M. Tshangana

Overview Departmental performance on operational targets Progress on Policy, Planning and IGR targets and outputs Processing of Human Settlements Legislation Progress on Transformation Targets Progress on Human Settlements Development Bank establishment Progress on Military Veterans Programme Progress APP targets in line with the MTSF Financial information

Administration – Operational Targets Statutory requirements relating to the preparation of annual financial statements and performance information for the annual report completed. Deadlines relating to disclosure by SMS members were monitored and complied with Progress has been made to address IT governance audit queries and impact -being realised Progress has been made in reducing the vacancy rate and middle management postions have been filled ,SMS vacancies prioritised for filling Performance management system -put in place to ensure that all SMS members submit agreements on time Internal controls improved to ensure that payable and valid invoices are paid within 30 days

Progress on Policy, Planning and IGR Targets The department facilitated alignment of Provincial -Municipal Development Plans for the HSDG and USDG with MTSF priorities and outcomes Coordination with sector departments contributing to Human Settlements development has been strengthened with IGR contracting for better outcomes A research agenda to support policy development was developed A framework for reviewing programmes in the Code is in place Municipalities' state of readiness to deliver was assessed in 4 municipalities in Limpopo Province

Processing of Human Settlements Legislation The Property Practitioners Bill and the HLAMDA Amendment Bill was gazetted for public comment in the Government Gazette on 31 March 2017 under Notice No. 247 of 2017 for a period of 30 calendar days. During this process the department received written submissions from the public and interested parties. Thereafter, information Sessions were held from 20 June 2017 to 06 July 2017 in all nine (9) provinces with the aim of enriching and allowing for clarity in the public comment process. The department has incorporated the relevant and applicable comments into the Bills, and the process to have Cabinet approval and endorsement for the revised Bills to be introduced into Parliament has commenced.

Transformation Targets 21 729 youth, women, government officials and consumers in the subsidy and gap market, trained on human settlements skills development programmes. 9 Provinces and 9 Municipalities supported in the implementation of Capacity Development Programmes 335 University and TVET College students supported on various programmes including the artisan programme

Human Settlements Development Bank Establishment A business case was prepared in accordance with the Draft Interim Guide for establishing Public Entities at the National Sphere of Government

Military Veterans EC FS GP KZN LIM MP NC NW WC TOTAL 88 230 219 34 199 Province Approved 2017/18 Delivery Projections Provincial Distribution 1421 No. of approved beneficiaries to date Quarterly Performance for 2017/2018 Q1 Q2 Q3 Q4 EC 88 230 219 34 FS 199 78 56 GP 490 364 118 09 KZN 68 393 244 LIM 100 171 411 MP 73 12 102 NC 50 24 38 NW 119 70 75 WC 250 79 113 TOTAL 1437 1 421 1376 111

Challenges Regarding The Military Veterans Programme During this quarter, there was no activity in 5 Provinces: Free State Kwa-Zulu Natal Limpopo Northern Cape, and North West Province There is slow or lack of uptake on the BNG option by SAMVA Delays in contractor appointment Lack of uniformity in the implementation of the project - Free State 100m² and Limpopo 75m² Provinces not applying authorized over-rides to fast -track allocation Beneficiaries not opting for BNG units in current running projects Some provinces have not established Provincial Steering Committees.

Proposed Corrective Measures – Military Veterans Post the Ministerial Dialog with Military Veterans on the 03 May 2017, the Department held a meeting with leadership of MKMVA with a view to present the strategy of delivery for support. Settlement of MV’s bonds within and below R188 000.00, and other cases to be dealt with separately are being fast-tracked - Seventy (70) has been settled by DMV. The beneficiation of Military Veterans owned companies registered with Provincial SCM’s be allocated at least the minimum of 30% in line with the Treasury Regulations on Military Veterans. Establishment of Service Centres in the Provinces, especially in those Provinces where there are no Call Centres to deal with MV issues. All approved human settlements projects implemented in Provinces will have 10% Military Veterans houses. Encourage all Provinces to adhere to the approved 50m2 regulated building structure for consistency and uniformity of delivery.

Proposed Corrective Measures – Military Veterans Minister has established a National Task Team (6 members) to assist with implementation of the programme Military Veterans to build own houses through the People’s Housing Process (PHP) where so organised. Department in the process of aappointing an IT company to assist the Department with the enrolment and verification of Military Veterans. Implementation of the circular on overrides has bebeen signed off and approved by the Director General and forwarded to Provinces.

MTSF Based Delivery Targets 47 catalytic projects approved for implementation Mining towns provided with human settlements intervention support that include, formalization and full services, interim basic services. Approximately R899,800 million has been ring-fenced for informal settlements upgrading and human settlements delivery in mining towns. For the period ending June 2017 a total number of 1594 sites and 579 units have been delivered

APP Targets Relating to MTSF and Progress Annual Target 2017/18 Quarterly Target Actual Performance Q1 300 Informal settlement upgrading plans developed 75 Informal settlement upgrading plans developed 87 Informal Settlement Upgrading Plans developed 150 000 households in informal settlements upgraded 37 500 households 5 747 households (HSDG) 19 383 (USDG) =25 130 112 600 individual units for subsidy housing submarket provided 20 150 individual units 13 850 Units 7 920 private affordable rental opportunities 1 230 private affordable rental opportunities 895 Private Rental Opportunities 6 000 of Social Housing units delivered 1 000 of Social Housing units 451 Social Housing Units 1 915 Community Residential Units (CRU) delivered 315 Community Residential Units 156 CRU Units

APP Targets Relating To MTSF And Progress Annual Target 2017/18 Quarterly target Actual Performance Q1 327 300 pre-and post-1994 title deeds issued 49 095 10 451 93 200 title deeds for new subsidy houses issued 23 300 4 896

Progress on Delivery - MTSF (4 months delivery = 20 337 Houses) 2017/18 4 month Target: 35 934 (4 months delivery = 20 337 Houses) Note: 2017/18 delivery figures are up to end July 2017 and are preliminary.

Delivery Q1 - 3 Months (April – June 2017) Note: 2017/18 delivery figures are up to end June 2017 and are preliminary.

Delivery Q1: 3 Months (April – June 2017) Note: 2017/18 delivery figures are up to end June 2017 and are preliminary.

Delivery Q1 – 3 Month Progress On Estimated Targets and Balance To Year End Note: 2017/18 delivery figures are up to end June 2017 and are preliminary.

Audit Plan – HSS Data as at 19 July 2017 The figures up to June 2017 (3 months) are 99.58% aligned with what is captured on the HSS by the Provincial Depts Net Capture: Sites: 98.19% Houses: 100.15% Overall: 99.58% (19 514 sites + houses captured)

AUDITOR-GENERAL CONCERNS REGARDING HSS DATA: (HSS data as at 19 July 2017) …continues The figures up to June 2017 (3 months) are 99.58% aligned with what is captured on the HSS by the Provincial Depts Net Capture: Sites: 98.19% Houses: 100.15% Overall: 99.58% (19 514 sites + houses captured)

Departmental Expenditure 1st Quarter Of 2017/18

Expenditure by Programme: 30 June 2017 Total Allocation R' 000 Commitments Expenditure Variance % Spent 1. Administration 458 105 29 791 95 629 362 476 21% 2. Human Settlements Policy, Strategy and Planning 93 573 916 16 715 76 858 18% 3. Programme Delivery Support 216 862 15 225 30 388 186 474 14% 4. Housing Development Finance 32 695 760 158 4 568 889 28 126 871 Total 33 464 300 46 090 4 711 621 28 752 679

Operational Expenditure by Programme: 30 June 2017 Total Allocation R' 000 Commitments Expenditure Variance % Spent 1. Administration 458 059 29 791 95 535 362 524 21% 2. Human Settlements Policy, Strategy and Planning 90 773 916 16 644 74 129 18% 3. Programme Delivery Support 207 040 15 225 29 913 177 127 14% 4. Housing Development Finance 27 139 158 5 145 21 994 19% Total 783 011 46 090 147 237 635 774

Transfer Payments: 30 June 2017 Total Allocation Expenditure Variance % Spent Grants 31 351 590 4 238 295 27 113 295 14% Human Settlements Development Grant 19 969 343 15 731 048 21% Urban Settlements Development Grant 11 382 247 - 0% Entities 1 167 031 175 449 991 582 22% Social Housing Regulatory Authority: Operational 46 815 100% Social Housing Regulatory Authority: Institutional Investment 20 490 Social Housing Regulatory Authority: Restructuring Capital Grant 851 658 Social Housing Regulatory Authority: Regulations 8 000 Community Schemes Ombud Services 29 400 23 300 6 100 79% Housing Development Agency 210 668 105 334 50% Departmental Transfers 12 668 639 12 029 1% Bursaries Scheme 9 822 475 9 347 5% UN Habitat 1 300 Households 46 164 (118) 358% CSIR 1 500 Payments for financial assets 150 000 National Housing Finance Corporation 100 000 Rural Housing Loan Fund 50 000 50 000 Total 32 681 289 4 564 383 28 116 906

Human Settlements Development Grant Expenditure (HSDG) Performance as at 30 June 2017 Provinces Voted Funds to Provinces Year to date (1 April 2017 - 30 June 2017) Transferred from Voted Funds Spent by Provinces Unspent against Transferred Funds Unspent against Total available % Transferred against Total Available % Spent against Total Available % Spent against Transferred Funds % Unspent against Transferred Funds R'000 Eastern Cape 2 239 316 683 234 - 1 556 082 31 100 Free State 1 193 038 362 683 262 092 100 591 930 946 30 22 72 28 Gauteng 5 528 050 913 383 494 100 419 283 5 033 950 17 9 54 46 KwaZulu-Natal 3 477 567 659 257 771 667 -112 410 2 705 900 19 117 -17 Limpopo 1 319 493 312 764 181 429 131 335 1 138 064 24 14 58 42 Mpumalanga 1 395 774 266 402 262 130 4 272 1 133 644 98 2 Northern Cape 402 668 44 612 63 333 -18 721 339 335 11 16 142 -42 North West 2 186 679 549 960 334 641 215 319 1 852 038 25 15 61 39 Western Cape 2 226 758 446 000 221 072 224 928 2 005 686 20 10 50 Total 19 969 343 4 238 295 3 273 698 964 597 16 695 645 21 77 23

USDG PERFORMANCE – EXPENDITURE AS AT 30 JUNE 2017 USDG EXPENDITURE FIGURES (01 JULY 2016 – 30 JUNE 2017) Municipality Voted Funds 1 Rollover from 2015/16 2 Total Available Funds 3=(1+2) Transfer from Voted funds 4 Spent by Municipality 5 % Spent 6=(5÷3)   Unspent Funds 7=(3-5) % Unspent 8=(6÷3) R'000 Buffalo City 731 499 - 100 Nelson Mandela Bay 868 282 Mangaung 725 003 58 644 783 647 705 076 90.0 78 571 10.0 Ekurhuleni 1 890 352 1 699 939 89.9 190 413 10.1 City of Johannesburg 1 775 809 94 984 1 870 793 1 482 708 79.3 388 085 20.7 City of Tshwane 1 539 334 1 461 832 95.0 77 502 5.0 eThekwini 1 885 685 City of Cape Town 1 423 504 145 319 1 568 823 1 408 705 89.8 160 118 10.2 Total 10 839 468 298 947 11 138 415 10 243 726 92 894 689 8.0 * Preliminary expenditure – Expenditure report submitted on 30 July 2017. Metro are reporting on an accrual basis of accounting thus final expenditure to be submitted 31 August 2017 once all invoices are processed.

Concluding Remarks The Provinces and Municipalities continue to underperform in all programmes under the MTSF upgrading of informal settlements The department has proposed an amended grant framework to ensure that 50 percent of the USDG is spent on informal settlements, and Municipalities continue to obsfucate the concrete amounts allocated to poor households. In order to address the underperformance of the Provinces and Municipalities in relation to the Title Deeds, the Department has proposed a revision of the grant structure to allow for National leverage to influence performance. Furthermore the Department has also proposed the ring-fencing of allocations for the Catalytic Projects, FLiSP and re-financing of the Human Settlements Development Bank.

Concluding Remarks The Department has prepared and presented to MinMec a set of recommendations to allow for reallocations to improve the performance targets and outputs of both the HSDG and USDG. The Department has proposed that recovery plans for Limpopo, Gauteng, North-West and the Free State be prepared for consideration by the Director-General and this includes possible reallocations.

Thank You