1. Standing Committee on Appropriations 10 May 2016 Inputs To 2016 Appropriations Bill Mr. M. Tshangana

2. Presentation Overview Introduction Vision and Mission Departmental Goals and Strategic Objectives MTSF Sub-outcomes to achieve the vision Process followed in developing the plans Revised Strategic Plan targets (2015-2020) Summary of APP Priorities per programme APP Targets and performance indicators per Programme Budget Allocation Delivery Targets and Outputs 2

3. Presentation Overview Areas of Focus – Invitation Letter Improving Value For Money and SCM PFMA Compliance Ensuring Sector Legislative Compliance Departmental Housing and Services Minimum Norms and Standards Subsidised Housing Typologies and Costs IGR Challenges Departmental Mitigation Measures 3

4. Introduction In line with the NDP, the Human Settlements aims at achieving visible results from effectively coordinated spatial planning systems by 2030 and this is done through : The development of the Spatial Master Plan for Human Settlements that will direct investments to the priority precincts Implementation of Catalytic Projects Prioritizing, targeting and focusing resources (financial and other) towards scale delivery Supporting and encouraging government and private sector collaboration and integration Promoting the participation of Youth and Women in human settlements development programmes Scaling up delivery on the informal Settlements Upgrading Programme 4

5. Vision and Mission Vision A nation housed in sustainable Human Settlements Mission To facilitate the creation of Sustainable Human Settlements and Improved Quality of Household Life. 5

6. Departmental Strategic Goals Enhanced efficiency and effectiveness of the department Integrated and responsive human settlements sector planning and policy environment Increased delivery of adequate housing in quality living environments 6

7. Departmental Strategic Objectives Promote efficient and effective administrative processes A capacitated and diverse workforce in a conducive working environment Effective and efficient legal support Promote internal and external communication on human settlements The ICT infrastructure is reliable, secure and available Development of human settlements policies and programmes for improved alignment Establishment and strengthening of partnerships for human settlements development Provide implementation support on the delivery of adequate housing Improved support and capacity for the human settlements sector Efficient and effective utilization of human settlements grants and monitoring lending patterns by financial institution 7

8. MTSF Sub-Outcomes to Achieve The Vision In order to achieve the vision of sustainable human settlements and improved quality of household life the DHS will drive effective programmes to achieve the following: Adequate housing and improved quality living environments A functionally equitable residential property market Enhanced institutional capabilities for effective coordination of spatial investment decisions 8

9. Strategic Planning Process The First Draft of APP was submitted to DPME for assessment as per the Framework requirements (31 August 2015) and to Auditor General A second draft of the APP submitted on the 30 November 2015 took into consideration the comments by the oversight bodies Engagement meetings to address the comments by DPME and AG were arranged The revised strategic plan and the final APP was submitted to AG and DPME for further assessment The Strategic Plan was revised to comply with the DPME requirements on planning The plan is MTSF based but also compliant to the 2015-2020 instruction DPME AG’s final findings were taken into consideration in the final APP adopted the executive management of the department 9

10. Strategic Plan Priorities in line with the MTSF Policy for Coherent and Inclusive Approach to Land for Human Settlements Human Settlements White Paper Housing Code revised Housing Act amended 2200 Informal settlements upgraded 750 000 Households provided with basic services 563 000 subsidy housing opportunities provided 110 000 loans (70 000 FLISP and 40 000 DFI supported) issued 27 000 social housing units 35 000 affordable rental housing opportunities provided 10

11. Strategic Plan Targets - (2015-2020 ) Framework on coherent and inclusive approach to land developed Seven evaluations of key human settlements strategic thrust completed Human Settlements White Paper approved Housing Act amended and Human Settlements Legislation approved Housing Code revised and Human Settlements Code approved Approved Human Settlements Master Spatial Plan Guidelines for Human Settlements Planning and Design revised Increase in partnerships and stakeholders participating in human settlements development 11

12. 2016 / 2017 APP Priorities The Department through the 2016 /17 APP has prioritised the : Achievement of Good Corporate Governance by putting management systems to support institutional performance in critical areas for efficiency Development and Finalization of the White Paper for Human Settlements Revision of the Housing Code Delivery of housing opportunities through: Informal Settlements Upgrading Programme including PHP Provision of technical support to municipalities for informal settlement upgrading Upscaling the delivery of affordable rental housing opportunities Implementation of Catalytic Projects 12

13. 2016 /2017 APP Priorities ….. Housing of Military Veterans Implementation of human settlements interventions in mining towns Eradication of the title deeds backlog and the transfer of title deeds for new properties in the subsidy market Acquiring, rezoning and release of well located land targeting poor households Implementation of capacity building support programme across the sector Strengthening of partnerships for better delivery 13

14. Summary of Programme 1 Targets 2016/17 Compliance with statutory tabling and prescripts and implementation of the approved internal audit plan for good governance Compliance to Human Resource Statutory Requirements and Implementation of the Human Resource Plan Development and roll out of the Legislative Programme Ensuring that the ICT infrastructure is reliable, secure and available Implementation of the approved communication strategy Knowledge and information management systems developed and implemented Ensuring a secure working environment 14

15. Summary of Programme 2 Targets 2016/2017 Development of Multi Year plan for Human Settlements An approved Human Settlements Master Spatial Plan Revised Guidelines for Human Settlements Planning and Design (Red Book) A Draft White Paper for Human Settlements A framework for the revision of the housing code A Revised Accreditation Framework Provinces and Metros supported in the implementation of PHP Policy Mobilisation and strengthening of stakeholder participation in Human Settlements Development 15

16. Summary of Programme 3 Targets 100 000 title deeds backlog eradicated 2 455 hectares of well-located land acquired, rezoned, and released for new developments targeting poor households 15 catalytic projects implemented 9 human settlements interventions implemented in mining towns 500 Feasibilities conducted on informal settlements 444 Informal settlement upgrading plans developed 175 000 households provided with basic services 115 000 housing opportunities provided including Military Veterans Title deeds for new home owners in the subsidy market issued 16

17. Summary of Programme 3 Targets 6 301 Social Housing units delivered 3 700 affordable rental opportunities delivered Projects under implementation monitored and verified (HSDG and USDG) Evaluation studies (Affordable Housing, Access Evaluation) conducted DFI operational integration completed 22 860 youth, women, military veterans participating on human settlements skills development programmes 17

18. Summary of Targets Programme 4 Approved Human Settlements Grants Frameworks HSDG & USDG quarterly performance reports Annual report on the performance of financial institutions and their lending patterns State Finance Products for the affordable market revised 18

19. APP - Programme 1 Strategic Objective2016/2017 TargetPerformance Indicators To Promote efficient and effective administrative processes 100 % compliance with statutory tabling and prescripts Percentage compliance with statutory tabling and prescripts Unqualified audit report 2015/16Unqualified audit report 100% adherence to Cabinet and Cluster schedule as per approved protocol Percentage adherence to Cabinet and Cluster schedule as per approved protocol 100% implementation of the approved internal audit plan Percentage implementation of the approved audit plans 100% implementation of the approved risk management plan Percentage Implementation of the approved risk management plan 100% implementation of approved Departmental anti-fraud and corruption Percentage implementation of approved Departmental anti-fraud and corruption 100% PAIA information requests processed % of PAIA information requests processed 19

20. APP - Programme 1 Strategic Objective2016/2017 TargetPerformance Indicators A capacitated and diverse workforce in a conducive working environment 100% compliance to HR Statutory Requirements Percentage compliance to HR Statutory Requirements 100% Implementation of the HR Plan Percentage implementation of HR Plan Effective and efficient legal support 100 % of` litigation matters received and attended to Percentage of litigation matters received and attended to 100% of contracts processed within reasonable time frame Percentage of contracts processed within reasonable time frame The ICT infrastructure is reliable, secure and available 90 percent availability of HSS Database Systems to provinces Percentage availability of the HSS Database Systems to provinces 90% availability of IT ServicesPercentage availability of IT Services 20

21. APP - Programme 1 Strategic Objective2016/2017 TargetPerformance Indicators Promote internal and external communication on human settlements 100 %implementation of the approved communication strategy Percentage implementation of the approved communication strategy 500 000 consumers reached through various communication platforms Number of consumers reached through various communication platforms 21

22. APP - Programme 2 Strategic Objective2016/2017 TargetPerformance Indicators Development of Human Settlements Policies and Programmes for improved alignment An approved National Human Settlements Development Plan for Provinces 1 st draft of the revised Guidelines for Human Settlements Planning and Design (Red Book) approved for consultation Revised Guidelines for Human Settlements Planning and Design Approved Human Settlements Master Spatial Plan 100 000 title deeds backlog eradicated Number of title deeds Backlog eradicated 2455 hectares of well-located land acquired, rezoned, and released for new developments Number of Hectares of well-located land acquired, rezoned, and released for new developments 22

23. APP - Programme 2 Strategic Objective2016/2017 TargetPerformance Indicators Development of human settlements policies for improved alignment and compliance A draft White Paper for Human Settlements Approved Human Settlements White Paper A framework for the code developed Human Settlements Code approved Revised Accreditation Framework Establishment and strengthening of partnerships for human settlements development Five Provinces and four Metros supported on the implementation of PHP Policy Number of Provinces and Metros supported on the implementation of PHP Policy Mobilisation and strengthening of stakeholder participation on Human Settlements Development Reports on stakeholder participation in Human Settlements Development 23

24. APP - Programme 3 Strategic Objective2016/2017 TargetPerformance Indicators Provide implementation support on the delivery of adequate housing provided 500 Feasibilities conducted on Informal Settlements Number of Informal settlements assessed 444 Informal settlement upgrading plans developed Number of Informal settlement upgrading plans developed 9 human settlement interventions implemented in mining towns Number of human settlement interventions implemented in mining towns 175 000 households upgraded to phase 2 Number of households upgraded to phase 2 115 000 subsidy housing opportunities provided Number of housing opportunities provided 6 301 Social Housing units delivered Number of Social Housing units delivered 2 000 Community Residential Units (CRU) Number of Community Residential Units (CRU) delivered 24

25. APP - Programme 3 Strategic ObjectiveTargetPerformance Indicators Provide implementation support on the delivery of adequate housing provided 15 catalytic projects implemented Number of catalytic projects implemented Enhanced sector monitoring and evaluation 75% of projects monitored and verified (HSDG and USDG) Percentage of projects monitored and verified 2 evaluation studies (Affordable Housing, Access Evaluation ) completed Number of evaluation studies completed 25

26. APP - Programme 3 Strategic ObjectiveTargetPerformance Indicators Provide implementation support on the delivery of adequate housing provided Single DFI operational integration completed Single Development Finance Institution established 4 Shareholder Compacts of the human settlements entities aligned to the MTSF targets Number of Shareholder Compacts of the human settlements entities aligned to the MTSF Improved support and capacity for the human settlements sector Nine (9) Provincial departments and eight (8) municipalities supported in the implementation of capacity development programmes 2760 youth, women, military veterans trained on human settlements skills development programmes Number of youth, women, military veterans trained on human settlements skills development programmes 26

27. APP - Programme 4 Strategic ObjectiveTargetPerformance Indicators Efficient and effective utilization of human settlements grants, and monitoring lending patterns by financial institution Approved Human Settlements Grants Frameworks Quarterly reports on HSDG & USDG performance submitted Reports on HSDG & USDG quarterly performance Annual report on the performance of financial institutions and their lending patterns developed Approved annual report on the performance of financial institutions and their lending patterns 27

28. 2016 Medium-term Expenditure Framework Allocation The budget of the Department was negatively affected by the economic downturn and wherein an amount of R3.7 billion was cut over the MTEF period. The above cut affected both the Operational and Capital budget of the department

29. Budget Reductions - 2016 MTEF R1.6 billion has been cut on the Human Settlements Development Grant in the 2016/17 financial year; R807 million reduction on the Urban Settlements Development Grant and split over MTEF as follows: – R236.4 million in 2016/17 financial year; – R235.8 million in 2017/18 financial year; and – R335 million in 2018/19 financial year. Restructuring Capital Grant was cut by R1.1 billion. 29

30. Budget Reductions - 2016 MTEF cont. The goods and services budget was reduced by: – R6.6 million in 2016/17; – R10.8 million in 2017/18; and – R41 million in 2018/19. Compensation of employees was also affected in the outer years and with the reduction of: – R28.9 million in 2017/18; and – R43.1 million in 2018/19. 30

31. Net Budget Based on Allocation Letter Economic Classification2016/172017/182018/19Total Compensation of employees38 70121 857-5 65354 905 Goods and services-6 652-10 807-41 022-58 481 Grants and transfer payments-2 548 430-692 674-625 586-3 866 690 Payment for Capital assets1 2731 3401 3743 987 Total-2 515 108-680 284-670 887-3 866 279

32. Impact of Revised Allocation vs. Original Allocation 32 Programme R`000 2016/17 Original indicative allocation Revised allocation Change to allocation Administration462 784442 274-20 510 Human Settlements Policy, Strategy and Planning79 25383 0633 810 Programme Delivery Support176 253224 58248 329 Housing Development Finance32 487 67429 940 937-2 546 737 Total33 205 96430 690 856-2 515 108

33. Compensation of Employees Allocation 2016/172017/182018/19 Costs to company establishment383 491 000416 449 000424 352 000 Allocation after budget cut383 491 000387 519 000381 217 000 Shortage0-31 930 000-43 135 000 The current staff establishment consists of 893 positions. 642 positions are funded and 251 remain unfunded, 624 posts of the 642 have been filled and 18 posts are vacant. The Department will have to guard against filling positions that will not be sustained financially and to ensure that there are no funding shortages, otherwise the impact will lead to job losses or cuts.

34. Allocation by Programme for the 2016 MTEF Programme 2016/17 R`000 2017/18 R`000 2018/19 R`000 1. Administration 442 274469 920 467 322 2. Human Settlements Policy, Strategy and Planning 83 06388 298 86 951 3. Programme Delivery Support 224 582208 339 199 921 4. Housing Development Finance 29 940 93733 799 769 35 865 833 Total 30 690 85634 566 326 36 620 027

35. Operational Allocation by Programme for the 2016 MTEF Programme 2016/17 R`000 2017/18 R`000 2018/19 R`000 1. Administration 402 328427 979423 282 2. Human Settlements Policy, Strategy and Planning 81 85287 02685 605 3. Programme Delivery Support 215 227198 517189 530 4. Housing Development Finance 25 08326 69426 657 Total 724 490740 216725 074

36. Allocation over MTEF by Economic Classification Total allocation R`000 2016/172017/182018/19 Indicative allocation Departmental Operational 764 390 782 111769 063 Compensation of employees 383 491 387 519381 216 Goods and services 375 433 388 852381 817 Payment for Capital assets 5 466 5 7406 030 Payments for financial assets --- Grants and transfer payments 29 926 466 33 784 21535 850 964 Grants 29 123 459 32 532 59034 333 980 Human Settlements Development Grant 18 283 991 21 060 34322 281 843 Urban Settlements Development Grant 10 839 468 11 472 24712 052 137 Municipal Human Settlements Capacity Grant--- Entities 792 395 1 240 4851 505 196 Social Housing Regulatory Authority: Operational36 392 38 21240 428 Social Housing Regulatory Authority: Restructuring Capital Grant424 388 768 7151 006 064 Social Housing Regulatory Authority: Institutional Investment Grant40 183 38 49040 722 Housing Development Agency167 512 215 668228 177 Community Schemes Ombuds Services23 920 29 40031 105 National Housing Finance Corporation100 000 105 800 Rural Housing Loan Fund - 50 00052 900 Departmental Transfers10 61211 14011 788 Bursaries Scheme 9 3559 822 10 392 UN Habitat 1 2111 2721 346 Transfer to Households46 50 Total 30 690 856 34 566 32636 620 027

37. Impact of the Reduction on the Human Settlements Development Grant Provinces 2016/17 2017/18 2018/19 R`000 DORA 2015 Published Allocation Revised Allocation Reduction% cut Total Allocation by province EASTERN CAPE 2 167 1561 991 457-175 699 8% 2 332 862 2 334 906 FREE STATE 1 210 6301 098 411-112 219 9% 1 285 972 1 364 176 GAUTENG 5 473 3365 022 669-450 667 8% 5 769 301 6 161 483 KWAZULU-NATAL 3 414 9573 124 702-290 255 8% 3 632 106 3 857 283 LIMPOPO 1 311 7091 208 370-103 339 8% 1 362 651 1 482 446 MPUMALANGA 1 419 9731 314 645-105 328 7% 1 488 961 1 579 219 NORTHERN CAPE 402 276371 109-31 167 8% 427 374 453 421 NORTH WEST 2 297 2862 151 817-145 469 6% 2 435 403 2 579 011 WESTERN CAPE 2 186 6682 000 811-185 857 8% 2 325 713 2 469 898 Total 19 883 991 18 283 991-1 600 000 8% 21 060 343 22 281 843 37

38. Impact of the Reduction on the Urban Settlements Development Grant 2016/17 Original Allocation Revised Allocation Reduction % Cut ProvincesMetros EASTERN CAPEBuffalo City 748 370 731 499 -16 871 2% Nelson Mandela 888 308 868 282 -20 0262% Sub Total 1 636 678 1 599 781 -36 897 2% FREE STATEMangaung 728 133 725 003 -3 130 2% GAUTENGEkurhuleni 1 933 951 1 890 351 -43 600 2% Jo'burg 1 816 766 1 775 809 -40 957 2% Tshwane 1 574 837 1 539 334 -35 503 2% Sub Total 5 325 554 5 205 494 -120 060 2% KWAZULU-NATALeThekwini 1 929 176 1 885 686 -43 490 2% WESTERN CAPECape Town 1 456 336 1 423 504 -32 832 2% Grant Total 11 075 877 10 839 468 -236 409 2% 38

39. Impact of the Reduction on the Urban Settlements Development Grant 2017/18 2018/19 Original Allocation Revised Allocation Reduction % Cut Original Allocation Revised Allocation Reduction % Cut ProvincesMetros EASTERN CAPE Buffalo City791 090774 202 -16 8882% 836 973813 335 -23 6383% Nelson Mandela 939 015918 970 -20 0452% 993 478965 421 -28 0573% Sub Total 1 730 105 1 693 172 -36 9332% 1 830 451 1 778 756 -51 6953% FREE STATEMangaung769 697767 326 -2 3712% 814 339806 113 -8 2263% GAUTENG Ekurhuleni2 044 3472 000 706 -43 6412% 2 162 9192 101 836 -61 0833% Jo'burg1 920 4731 879 476 -40 9972% 2 031 8611 974 478 -57 3833% Tshwane1 664 7341 629 196 -35 5382% 1 761 2891 711 548 -49 7413% Sub Total 5 629 554 5 509 378 -120 1762% 5 956 069 5 787 862 -168 2073% KWAZULU- NATAL eThekwini2 039 2991 995 766 -43 5332% 2 157 5782 096 646 -60 9323% WESTERN CAPECape Town1 539 4681 506 605 -32 8632% 1 628 7571 582 760 -45 9973% Grant Total 11 708 123 11 472 247 -235 8762% 12 387 19412 052 137 -335 0573% 39

41. 2016/17 Targeted Outputs For HSDG Province 2016/17 Planned Sites 2016/17 Planned Units Total Sites and Units 2016/17 Planned Total Allocation per Programme EC10 16512 66922 8341 637 428 FS7 4494 99812 447991 587 GP11 82831 37743 2054 572 376 KZN8 23120 28828 5192 536 746 LIM4 5068 57813 0841 041 478 MP5 9898 45714 4461 149 080 NC2 4801 4353 915347 553 NW7 68012 58120 2612 016 728 WC8 53010 68419 2141 797 062 Total66 858111 067177 92516 090 038

42. Provincial Programme Allocations 42

43. 2016/17 HSDG Targets Per Programme 43 Programmes MTSF (New Opportunities) Total Sites Budget Total Units Budget Total Allocation Per Programme Uisp Total36 3751 793 41848 4975 483 8777 277 295 New Individual Units28 5631 350 83250 5735 692 9097 043 741 Social And Rental Housing Total0119 2885 700608 453782 717 CRU Constructed (New) TOTAL041 9102 502558 229600 139 FLiSP2 00084 6153 037162 188246 803 Total National MTSF Target 66 9383 390 063113 34112 839 17616 284 215 180 279 Other Priorities001 877227 500 Military Veterans 4909561 020 Title Deeds Backlog eradication 175 964176

44. Mining Towns 44 Mining Towns Target for Sites Target for Units Overall Budget Ring-fenced amount Free State9672 208245 243101 000 Gauteng3 0504 141684 062123 700 Limpopo1 2942 910348 33766 100 Mpumalanga2 7452 739411 278162 800 Northern Cape 1 3606452 76535 600 North West3 1044 128687 781585 792 Total12 52016 1902 429 4661 074 992

45. Title Deeds Backlog Eradication 45 Title DeedsTargetBudget Ringfenced amount Dificit Eastern Cape 1 9392 01739 00036 983 Free State 78029 47430 000526 Gauteng 78 79512 41862 00049 582 Kwa Zulu Natal2 5592 45260 00057 548 Limpopo 7 6357 50013 0005 500 Mpumalanga 015 00030 00015 000 Northern Cape 7 57311 36012 000640 North West 67 20381 55530 000-51 555 Western Cape 9 48014 40030 00015 600 Total 175 964176 306 000129 824

46. MTSF TARGET 2019 National MTSF Target for Metro Annual MTSF Target 2015/162016/172017/182018/192019/20MTSF 750 000 households in informal settlements upgraded to Phase 2 of the Informal Settlements Upgrading Programme: 15869 households upgraded in informal Settlements 1500 5669150020004300 240015869 Individual households: o Water o Sanitation o Electricity 6320818287106411828717252120934 93563208 18287106411828717252120934 93563208 69437 125501289112550816218654 17 14069437 Shared services (number of households benefiting) o Water o Sanitation 7982 households 2400200024001200138210007982 46 City of Joburg USDG Targets 2016/17

47. MTSF TARGET 2019 National MTSF Target for Metro Annual MTSF Target 2014/15 Achieved 2015/162016/172017/182018/19 MTSF 750 000 households in informal settlements upgraded to Phase 2 of the Informal Settlements Upgrading Programme 15869 households upgraded in informal Settlements 67507625566930002900430015869 Individual households: o Water o Sanitation o Electricity 632081264149351064118287172521209363208 1264149351064118287172521209363208 69437 1388717180128911255081621865469437 Shared services (number of households benefiting) o Water o Sanitation 7982 households20000 2400120023827982 Title Deeds: o 563 000 for new developments o Pre-1994 housing stock o Post-1994 housing stock 17230 (Free holding) 24692500270030003500400017230 8298 (sectional tittle) 97249212001500180025008298 10 000 of hectares of well-located land 470 hectares12010150100110200470 47 City of Tshwane USDG Targets 2016/17

48. MTSF TARGET 2019 National MTSF Target Annual MTSF Target 2015/162016/172017/182018/1 9 2019/20MTSF 750 000 households in informal settlements upgraded to Phase 2 83 19516 63971864551 9 59812 00010 383 -39 587 Individual households: o Water o Sanitation o Electricity 486899739 1826 2500 -36863 486899739 1826 2500 -36863 486899739 5656 6000 -19033 Shared services (number of households benefiting) o Water o Sanitation 869 1200600 869 1200600 48 City of Ekurhuleni USDG Targets 2016/17

49. MTSF TARGET 2019 National MTSF Target for Metro Annual MTSF Target 2015/162016/172017/182018/192019/20MTSF Individual households: o Water o Sanitation o Electricity 148102962400030004000 +4190 148102962400030004000 +4190 25323238364837793007 Shared services (number of households benefiting) o Water o Sanitation 4000 500 MTSF Priority per programmeStand costsAnnual Target Annual Costs5-Year Target Total Cost UISP phase 2 (with interim services) R480003000 - 4000 R175m19000R950m NMBMM USDG Targets 2016/17

50. MTSF TARGET 2019 National MTSF Target for Metro Annual MTSF Target 2015/162016/172017/182018/192019/20MTSF 750 000 households in informal settlements upgraded to Phase 2 of the Informal Settlements Upgrading Programme 83 39016 678 83 390 Individual households: o Water o Sanitation o Electricity 2882314031875414432418 947 Shared services (number of households benefiting) o Water o Sanitation 83390 16678 83390 50 City of Cape Town USDG Targets 2016/17

51. 51 City of Cape Town USDG Targets 2016/17 MTSF TARGET 2019 National MTSF Target for Metro Annual MTSF Target 2014/152015/162016/172017/182018/19MTSF Title Deeds: o 563 000 for new developments o Pre-1994 housing stock o Post-1994 housing stock 44 565 8 913 44 565 10 1663 2521 000 1 2001 3007 752

52. 52 MTSF TARGET 2019 National MTSF Target for Metro Annual MTSF Target 2015/162016/172017/182018/192019/20 MTSF 750 000 households in informal settlements upgraded to Phase 2 of the Informal Settlements Upgrading Programme 18,200180012541700190021002300 Individual households: o Water o Sanitation o Electricity 148102962400030004000 +4190 148102962400030004000 +4190 25323238364837793007 Shared services (number of households benefiting) o Water o Sanitation 4000 500 Buffalo City USDG Targets 2016/17

53. Programme2014/152015/162016/172017/182018/19TOTAL SDBIP5,5164,6305,5007,6008,25031,496 Level 3 Informal Settlement Upgrading - serviced top structures 4,9644,1674,9506,8407,42528,346 Level 2 Informal Settlement Upgrading - services to individual stands 000000 Incremental Services to Informal Settlements - Footpaths, Roads, Storm water) 017,04210,47813,88111,83753,238 Water & Sanitation - Shared5,48715,000 65,487 Electricity13,43213,000 65,432 MTSF - National target for eThekwini11,381 56,905 Ethekwini USDG Targets 2016/17

54. Committee Focus Points

55. Improving Value For Money and SCM The Minister and Accounting Officer based on evaluations including the expenditure review identified the current bid system within the sector is susceptible to abuse, corruption and manipulation. A tender in respect of housing and the acquisition of related services is fixed and given this there is no room for competition in both the price of the house and land. Given these realities there is very little value for a tendering system.

56. Improving Value For Money and SCM The Minister and Accounting Officer based on evaluations including the expenditure review identified the current bid system within the sector is susceptible to abuse, corruption and manipulation. The subsidy quantum for services and construction within the subsidised housing and human settlements sector is predetermined and given this there is no room for competition for price of construction The state must be a price giver not taker based on functionality

57. Improving Value For Money and SCM  The funding of Provincial and Municipal Human Settlements Programmes is mainly through the Human Settlements Development Grant and USDG  Provincial Departments and Municipalities are responsible for managing Supply Chain Management processes as regulated by National Treasury and applicable legislative regulations including the Constitution, SCM Act and PFMA ;  The National Department is reviewing the current procurement and tender process for Provinces and Municipalities with an aim of improving the efficiency and effectiveness in the procurement delivery of goods and services in the human settlements delivery value chain.  It is expected that the undertaking of this exercise will yield the following positive results to the Human Settlements sector:  Reduction or elimination of repetitive non-compliance practices and adverse/qualified audit findings within the sector;  Improved efficiency in SCM processes in the sector;  Shortened procurement period to enable expedited delivery in the Human Settlements sector; 57

58. Improving Value For Money and SCM  It is also expected that the undertaking of this exercise will yield the following advantages to the Human Settlements sector  Utilize the services of panel of approved companies who are approved, accredited and verified as to their expertise, skill and track record,  Ensure that the rampant practice of companies buying contracts and performing sub-standard jobs will be remedied;  Service delivery improvements in the sector and  Sector set MTSF goals and related services to be realized with certainty.  Ensure the Departmental set-asides for sector developers, contractors and professionals who are youth and women in the amounts of 10% and 30% respectively is achieved  Improve the and achieve transformation in the industry by ensuring the minimums set in the revised BBBEE codes are achieved

59. Improving Value For Money and SCM Value for Money and good quality services To ensure that the Department gets value for money and receive quality services and goods, the following are in place: – Demand Management Plans. – Bid Specification Committees: To develop good specifications/ Terms of Reference which provides for the evaluation of “ Functionality”. – Cross Functional Bid Evaluation Committee: To evaluate bids in terms of the approved Evaluation Criteria and ensuring that only qualifying bidders are appointed – Cross Functional Bid Adjudication Committee - To adjudicate bids and awarding to bidders that have the capacity, expertise, experience and other relevant resources. – Procurement Policy and procedures, Financial Delegations and Contract Management. – Internal Control Unit. – Internal Audit and Risk Management Units.

60. Improving Value For Money and SCM Black Economic Empowerment and Sector Transformation The evaluation of bids process provides for the evaluation of bids using the 80/20 or 90/10 Preference points systems. In the 80/20 preference point system, A maximum of 20 points is awarded for attaining the B-BBEE status level of contribution and a maximum of 10 points in the 90/10 preference point system. Contract Management A manual/electronic Contracts Register in place to keep a record of every contract, its contract number, commencement and end date, contract amount, amount paid to date and remaining commitment, name of company. This Register is updated with every payment made. A Service Level Agreement is signed with the appointed consultant. The service Level Agreement includes amongst others; the Payment Schedule linked to Performance Milestones, settlement of disputes, eradication of poor performance, Ensuring targets, outputs and outcomes are achieved

61. PFMA Compliance Payment of Suppliers with 30 days The Department has a manual/electronic invoice register where invoices received are recorded. The register provides the recording of the tracking of every movement of the invoice within the payment system until it is finally paid.; Introduction of the electronic Invoice register by provinces for tracking purposes and to ensure that the invoice is within the payment system until it is finally paid. MinMec receives quarterly reports on all outstanding payments in respect of the monies and funds utilizing the HSDG and USDG

62. Ensuring Sector Legislative Compliance In terms of the provisions of Section 3(2)(a) of the Housing Act of 1997, the Minister must determine national policy, including national norms and standards in respect of housing developments. This has been done and directive issued to Provinces and Municipalities in this regards Section 3(3) furthermore provides that the national norms and standards referred to, include norms and standards in respect of permanent residential structures but are not limited thereto. The objective of the National Norms and Standards is the creation of sustainable human settlement developments through quality and durable products that comply with National Building Regulations The Department has a fully functional Monitoring and Evaluation Unit which undertakes both financial and non-financial oversight. The HSDG and USDG DORA Frameworks contain a comprehensive set of legislative developments targets, outputs and outcomes which Provinces and Municipalities must acheive

63. Ensuring Sector Legislative Compliance The Department introduced new National Building Regulations - Requirements for Energy Usage in Buildings with effect from 10 November 2011 ( National Building Regulations- SANS 10400 XA), which brings our country in line with our COP obligations. The National Building regulations were then approved by the Minister of Human Settlements in consultation with MECs and SALGA for application to the dwellings to be constructed through housing programmes, with effect from 1 April 2014. The Department also undertakes oversight to ensure that unfair lending practices are eliminated within the financial sector through the Home Loan and Mortgage Disclosure Act Through the Housing Consumer Protection Measures Act and the NHBRC, the Department ensure that standards of building and construction in the residential sector is adhered to and maintained

64. Departmental Housing and Services Minimum Norms and Standards SANS10400XA: Provision of a ceiling for the entire house with a prescribed air gap; Installation of above ceiling thick mineral fibre glass insulation blanket for the entire dwelling to achieve a prescribed R value as per regional indicators of the SANS 10400 XA; Reduction in window sizes and specific specifications for the window frames to ensure proper sealing and special glazing specifications; and The plastering of all internal walls and rendering (bagging) of external walls. Ministerial Norms is a minimum size of 40sqm gross floor area with Two bedrooms A separate bathroom with toilet and a shower with elevated floor walls and standard trap stop to facilitate washing of clothes and a hand basin A combined living area and kitchen with a sink A ready board prepaid metered electrical installation

65. Subsidised Housing Typologies The current typology provides for the following: 40 m² (square metre) dwelling; 45 m² (gross floor area) dwelling specifically designed for housing subsidy beneficiaries who are disabled and wheelchair dependent or where a member of the family of the beneficiary is dependent on wheelchair use; 50 m² (gross floor area) dwelling designed for allocation to qualifying military veterans. These two new house designs are supported by detailed floor plans and separate Bills of Quantities.

66. Specifications for Engineering Services Type of ServiceMinimum Level for Grade B Minimum Level for Grade A WaterSingle standpipe per stand (metered) A metered water connection to each stand Sanitation VIP or alternative system agreed to between the community, the municipality and the MEC Water Borne Sanitation System Roads Graded or gravel paved road access to each stand. This does not necessarily require a vehicle access to each property Tarred road and curbing Storm waterLined open channels Underground storm water management Systems Street lighting Highmast security lighting for residential purposes where this is feasible and practicable, on condition that such street lighting is not funded from the MIG initiative or from other resources. Street Light on poles

67. Articulation of Total Cost of Unit Cost element BNG Amount (40M2) Disabled Amount (45M2) MV Amount(50M2) Total rounded R 110 947.00 R164 136.00 R188 884.00 Grade A Services R43 626.00 Grade B Services R34 401.00

68. Cost elementsCost of House Cost for Energy EfficiencyFull Energy CostTotal Cost Primary elementsR 62,719.00R 12,538.00R 6,086.00R 81,343.00 External works and servicesR 2,670.00 PreliminariesR 5,944.00R 1,140.00R 553.00R 7,637.00 Total AR 71,333.00R 13,678.00R 6,639.00R 91,650.00 EscalationR 8,798.00R 1,687.00R 819.00R 11,304.00 Total BR 80,131.00R 15,365.00R 7,458.00R 102,954.00 Project managementR 2,805.00R 538.00R 261.00R 3,604.00 Clerk of worksR 2,404.00R 461.00R 224.00R 3,089.00 Total CR 85,340.00R 16,364.00R 7,943.00R 109,647.00 Transfer costR 1,000.00 Beneficiary administrationR 300.00 Total costR 86,640.00R 16,364.00R 7,943.00R 110,947.00

69. IGR Challenges Provincial Compliance with Minimum Norms and Standards Improving prioritisation to achieve the MTSF targets and outputs Achieving buy-in to improve integrated planning, funding and development Ensuring Municipal adherence to reserve and not dispose off well located land Improving and ensuring provincial and municipal planning, funding and implementation alignment

70. Departmental Mitigation Measures The Minister is in the final stages of approving a revised Departmental Organisational Structure focused on improving Provincial and Municipal Human Settlements targets and outputs A suite of catalytic projects will be activated aimed at increased delivery with the Private Sector The poor delivery trajectory has turned the corner – for 2015/16 the delivery graph has been stabilized and the downward trend arrested. The Department has commenced with the consolidation of the Human Settlements DFI’s to leverage and multiplier current funding. The HSDG and USDG DORA Frameworks have been revised to improve agility to identify and reallocate funding from poor performing Provinces and Municipalities and programmes to those that do and are perfroming

71. Departmental Mitigation Measures There is a need for improved coordination and collaboration between Treasury and the Department on the reallocation of grant funding between Provinces, Municipalities and Programmes The Department has committed to the fiscal consolidation agenda of Government and “doing more with less” The Ministry and Department have undertaken measures to improve compliance and regulation of entities to ensure fiscal and programme sustainability

72. Departmental Mitigation Measures The Department is in consultation with Treasury and Sector Department to ensure programme and funding integration with reference to the catalytic project programme The Department will regionalise operations to: – Ensure programme and project planning is aligned to funding as well as project readiness for implementation – Improve monitoring and evaluation of funding as well as quality of delivery outcomes – The Department is finalizing four evaluations and related policy and funding revisions to rationalize and bring consistency and certainty of funding and programme sustainability

73. THANK YOU “We have come a long way – Celebrating 20 Years of Freedom!”