1. Annual Performance Report – 2011/12
Portfolio Committee For Human Settlements
Mr. T. Zulu
Director-General

2. Vision “A Nation Housed In Sustainable Human Settlements With Access To Socio – Economic Infrastructure” Mission “ To Establish & Facilitate A Sustainable Process That Provides Equitable Access To Adequate Housing For All Within The Context Of Affordability Of Housing, Services, Access To Social Amenities & Economic Opportunities”

3. Contents Overview of Performance Departmental Programme Performance
Communication and Outreach key
Delivery Agreement on Outcome 8
Job Creation
Accreditation of Municipalities
Turnaround Strategy
Entities Report
Financial Matters

4. Overview of Performance
1. The Department has achieved an unqualified audit
report with emphasis of matters on:
Restatement of corresponding figures and
Material under spending on Rural Household and Infrastructure Grant.
2. There is agreement that the matters of emphasis
are not systemic and there is commitment to
address the issues including the 30 day payment
rule and measurable performance indicators.

5. Overview of Performance
3. There is clearly a need to improve our procurement and asset management regimes and this includes:
the establishment of a bid specification
committee to vet requests for proposals
and adverts.
Further training for the staff members involved and establishing a distinct asset management unit.

6. Overview of Performance
4. The Departments improved monitoring and oversight is yielding results with better accountability of Provinces but this requires an holistic interspherical response – Legislature, Executive and Accounting Officers 5. This includes better business plan management and reporting.

7. Overview of Performance
6. A process to improve accountability and alignment of the entities is also yielding results with better strategic alignment of entities performance to the priorities of government.
7. We started a process to improve policy responses and this includes the review of FLiSP as well as review and evaluation of the Departmental Programmes.
8. It is expected that the implementation of the turnaround strategy will see the results of a better programme and administrative response to government developmental priorities.

8. Overview of Performance
9. Our intergovernmental processes have yielded good results including that with Parliament, Provinces and Municipalities .
10. Good progress has been made with the implementation of the USDG and aligning of Provincial and Municipal Human Settlements priorities with that of the National sphere.
11. A lot of work still has to be done in terms of improving Provincial and Municipal performances in respect of Outcome 8 and the Strategic Integrated Projects.

9. Departmental Programme Performance
Programme / Sub-Programme
Approved Targets
Achieved
(%)
Not Achieved
Office of DG 8
4 (50)
4(50)
Corporate Services (CS) 25
16(64)
9(36)
Housing Policy, Research and Monitoring (HPRM) 16
10(63)
6(37)
Housing Planning and Delivery Support (HPDS) 70
36(51)
34(49)
Housing Development Finance (HDF) 13
11(85)
2(15)
Strategic Relations and Governance (SRG) 39
35(90)
4(10)
Departmental Total
171
112(65)
59(35)

11. Communication And Outreach
Campaigns Launched
“Each One, Settle One” Campaign
International Habitat Day
Sixteen Days of No Violence Against Women and Children
World Aids Day in Beaufort West

12. Communication And Outreach
Project Launches And House Handovers:
Northam Affordable Housing Launch with Anglo Platinum
Msukaligwa in Mpumalanga
Southernwood Square Social Housing Project in Buffalo City
The Jabulani Hostel Re-development in Soweto
NHBRC International Housing and Home Warranty Conference Legacy Project
Youth Build in Molemole, Limpopo
Klarinet Integrated Housing Project in Mpumalanga
China Square Project, Kimberley, Northern Cape
National Women’s Build in Brandfort, Free State Province

13. Communication And Outreach
Stakeholder Events
- Vision 2030 Summit,
- Provincial Indaba’s and
- Provincial Youth Summits
- Alternative Technology in the Housing Programmes.
- The Govan Mbeki Human Settlements Awards
- A National Breakfast Session on Women’s Economic Empowerment with sector stakeholders
- The National Youth in Human Settlements Summit

14. Progress Report on Outcome 8
Fifth Programme of Action Progress report for Outcome 8 - up to 30 September was submitted to the Technical Implementation Forum and the Implementation Forum and was approved for submission to relevant Cabinet Cluster.
A detailed progress report for Outcome 8 was submitted to the Presidency for the Mid-Term Review.
All relevant reports submitted to Cabinet for National Reporting on Outcome 8 and is included in the Presidency Web-Site.

15. Progress Report on Outcome 8
Progress on Outcome 8 Target Outputs
Upgrading of Informal Settlements
serviced sites
22,8% of total target of households
Rental Accommodation
units
14,2% of total of units

16. Progress Report on Outcome 8
National Upgrade Support Programme
46 (94%) out of 49 targeted Municipalities offered technical assistance;
Six Provincial NUSP structures have been established (EC, KZN,LP, MP, NC and WC);
Accreditation of Municipalities
17 municipalities assessed by Capacity and Compliance Assessment Panel and are awaiting MEC’s approval to be awarded with accreditation compliance certificates;
First tranche payments of USDG made to relevant Metropolitan Municipalities

17. Progress Report on Outcome 8
Access to Basic Services
Sanitation: 2011/12 up to 30 September 2011 provided households with access to sanitation facilities, bringing total since April 2010 to households;
Based on Cabinet Lekgotla decision, operational plans are developed to target areas where backlogs are the highest.
Release of Land for human settlement development
The HDA has identified and assessed over ha of state land for suitability for release in 2011/12 up to 30 September 2011;
Total of ha has been released to Municipalities while ha is in advance stages of release.

18. Progress Report on Outcome 8
Increased Urban Densities
National Department developed policy document to address the dynamics of Built Environment, will assist provinces and municipalities with increased densities
HDA identified 309 properties – 812,83 ha owned by Transnet for development of medium to high density
Also developing mechanism to ensure that well located land released developed in accordance with higher density.
Land-Use Management Framework
Department of Rural Development and Land Reform released “Spatial Planning and land Use Management Bill for public consultation;
Comments received analysed and Department of Rural Development and Land Reform will engage key stakeholders to revise the Bill.

19. Progress Report on Outcome 8
Mortgage Default Insurance Guarantee
Concurrence from National Treasury is required to affirm the safety of the institutional arrangements to launch the MDI into the financial markets;
All commercial banks have confirmed interest in supporting project implementation
The consolidation of the Human Settlements Development Finance Institutions has been approved and relevant approvals being obtained including National Treasury and Cabinet.

20. Progress Report on Outcome 8
Sustainable Human Settlements and Basic Services Task Team
Convened jointly by COGTA and NDHS and reports on:
a) Rapidly Growing Towns and Cities;
b) Informal Settlement Upgrade Programme in the 45 municipalities;
c) Progress Report on the 23 Rural Municipalities identified by the Cabinet Lekgotla of June 2011;
d) Report by the Presidential Infrastructure Commission on SIP 7

21. Job Creation
The delivery of 116,056 completed houses and serviced cites from April 2011 to 31 March 2012 has created 81,868 employment opportunities.
The information above is based on employment definition of one person employed for a period of one year.
The employment opportunities created during the financial year 2011/12 is estimated to be direct jobs
A further 27,838 indirect jobs created from the suppliers of building material as well as expenditure from income of employees.

22. Accreditation Of Municipalities
To date a total of twenty Municipalities within Mpumalanga, Limpopo, Northern Cape, Kwa-Zulu Natal and North West Provinces have been assessed.
An overall framework aligning the process to government instruments has been produced
A road map that outlines the key processes that has to be undertaken by the parties is in place and been implemented.
A legislative review of powers, functions and delegations was initiated
A monitoring and evaluation tool and toolkit was approved for production.
The operation funding model for accredited municipalities was approved for investigation by MinMec
Successfully achieved consensus with FFC on a financial framework plan.

23. Accreditation Of Municipalities
Challenges include:
No Implementation Protocols signed by December deadline
Funding framework remains major issue & query over role of Districts in accreditation based on powers & functions as contained in legislation.
Provinces & Metropolitan Municipalities still to agree on capacity & support plans & leverage assistance e.g. COGTA, National Treasury, and Provincial Treasuries
Provinces still to gazette municipal allocations

24. Turnaround Strategy
The Turnaround Strategy prepared for the Department was approved by the Minister.
An organizational structure underpinning the strategy was approved by the Minister of Human Settlements and Minister of Public Service and Administration.
A process of filling vacancies was approved.
A process of aligning the turnaround strategy with the strategic and annual performance plan as well as budget structure has commenced.

25. Rural Household Infrastructure Programme
PROGRESS PER PROVINCE – 2011/12
Province
Allocation: 2011/12
(R’000)
Number of Benefitting municipalities
Estimated Target Number of Toilets
Toilets completed at 31 March 2012
% Completion
Eastern Cape
R65,000 13
7 458
7 129
99.9%
Free State
R10,000 3
1 139
936
87.8%
Limpopo
R48,000 12
3 612
2 015
61.6%
KwaZulu Natal
R68,500 15
6 753
5 920
84.8%
Mpumalanga
R8,000 2
950
372
91.5%
Northern Cape
R4,000 1
374
320
73.8%
North West
R28,000 7
2 788
2 533
78.5%
Grand Total
R231,5 53
23 074
19 225
83.3%

26. RHIP Financial Performance 2011/12
Province
2011/12 Allocation & Rollovers R
Expenditure at 31 March 2012
Balance
KwaZulu - Natal
Eastern Cape
Limpopo
North West
Free State
Mpumalanga
Northern Cape
Total

27. RHIP Outcomes and Achievements
Rural Household Infrastructure Programme intervention measures
The Department conducted a quantity survey study to identify challenges and ways of resolving them in order to improve the performance of the RHIP programme
Revision of the Sanitation Policy
Versions 1.0; 2; 3 and 4.0 were developed
Extensive consultation with stakeholders conducted
Job creation
A total number of jobs were created through RHIP
Health and Hygiene Education
households reached with Health and Hygiene education through RHIP

28. RHIP Outcome and Achievements
Free Basic Sanitation (FBS) Strategy Roll Out
FBS rolled out to 16 Water Services Authorities
FBS implementation guideline developed
A draft FBS best practices and international benchmarking completed
Post 94 Bucket Eradication
Post 94 formal bucket backlog confirmed

29. Entities Performance

30. Social Housing Registration Authority
The Social Housing Regulatory Authority fully established and operational
The appointment of the Council and the establishment of Council Committees were completed in the 2011/12 financial year.
A total of rental units were approved for funding.
The entity approved 4 and conditionally approved 14 applications for institutional accreditation.
18 Institutional grants were approved.
Agreements were signed with NHFC, NURCHA, Kwa Zulu Natal, Eastern Cape and the North West Provincial Department of Human Settlements.
6 Project launches including two by the Minister of Human Settlements)
The Regulations for the Social Housing as per the Social Housing Act were finalized.

31. Housing Development Agency
In the 2011/12 financial year the HDA identified 35, hectares of state and State Owned Enterprise (SOE) land for release for human settlements purposes.
A total of 13,598 hectares have been formally submitted for release from custodian departments and the approval for release from the relevant departments is pending.
The HDA provided project support services, PHDA framework development and capacity building support for 42 projects initiated by national departments, provincial departments and municipalities.
7 implementation protocols maintained and/or concluded; 5 signed agreements concluded and/or maintained; with 9 prepared and pending signature against an annual target of 15

32. National Urban Reconstruction Housing Agency
In 2011/2012 NURCHA reported an improvement from the previous year despite the subdued market conditions that existed in the residential market.
The organizational focused to contribute effectively to the Outcome 8 targets and restoring sustainability to NURCHA business. This included growing the affordable housing programme to be a catalyst in the “Gap” housing market, establishing new financing partnerships and collaborating with Provincial Departments on fund and programme management services.
The entity has also leveraged R292 million from new funding partners

33. The NURCHA has achieved growth in the gap funding
The NURCHA has achieved growth in the gap funding. 60% of NURCHA’s affordable housing portfolio is now in the affordable housing market (2 246 units) whilst 32% is affordable housing and sectional title units make up 8% of the loan book.
The Entity intends to intensify its financing operations within the sectional title environment in the next financial year.
With regards to outlining the organizational focus to contribute effectively to outcome 8 targets through affordable housing, the entity has signed loans amounting to R279 million in one year, achieving the R1 billion loan mark of loans issued since inception, which has resulted in the creation of affordable housing units.

34. Rural Housing Loan Fund
During the period under review, RHLF continued to perform within its mandate by concentrating its efforts in rural areas, with 82, 3% of its total loans being awarded in the rural areas, against a target of 80%.
It is evident from the reported performance of RHLF that the lower end of the credit market continues to be significantly indebted.
The entity has also managed to curb leakage, and ensured that 89, 6% of the total loans awarded are used for housing purposes, against a target of 80%.
Out of the loans awarded, 4% was used for building of new houses, 12% was used for extensions, 71% was used for home improvements and 3% was used for services.

35. National Home Builders Registration Council
The NHBRC hosted an International Housing and Home Warranty Conference (IHHWC) from 25 September September 2011, which focused on international good practice and policy .
The Council is currently reviewing the Housing Consumers Protection Measures Act (1998) to address any misalignment with other legislative prescripts, such as the Public Finance Management Act (1999) and the Consumer Protection Act (2008).
The NHBRC has also embarked on a strategy that all units constructed in the Republic should be inspected and that all PHP projects and Rural projects should be inspected by the NHBRC whether enrolled or not.
The registration of new home builders dropped down by 26 percent as compared to the previous financial year and this is due to home builders failing to meet the minimum technical and financial requirements, as well as the economic recession which has an impact in the construction industry.
The Department commenced with the revision of the board and stabilization measures for better performance.

36. The NHBRC registered 2 686 new home builders during the 2011/12 financial year.
A total of homes were enrolled against , which is 14 percent above budget. However, NHBRC is still facing challenges with a number of provincial departments of Human Settlements in terms of ensuring that all projects are enrolled timeously.
A total of 102,625 homes were inspected in the non-subsidised sector.
A total of 86 projects were received for project enrolment of which a total of 49,070 units were approved for project enrolment.
A total 583 projects for home enrolment of which a total of 161,411 units were approved for home enrolment.
The entity conducted a total of 204,933 inspections and a total of 114,000 homes were inspected in the subsidy sector.

37. National Housing Finance Corporation
The 2011/12 year has been characterized by the success of the leveraging initiatives and partnerships with the private sector.
The Corporation was able to leverage R2 billion which together with disbursements of R664 million contributed to the annual budget of the overall funding impact being exceeded by 32%.
A total of 11 682 housing opportunities were created against a budget of
The Corporation achieved 80% of the value of approvals budget of R1 billion. The pipeline continues to be robust and of note are the different structures such as applicants whose assets are mostly held in trusts.

38. National Housing Finance Corporation
The Corporate Plan for the Mortgage Default Insurance Company was approved by the Board.
The key focus is now towards the completion of the application to the Financial Services Board for the insurance license
Engagement with lenders individually as well as at industry level through the Banking Association of South Africa continues. Teams comprising of representatives of various lenders were established to consider product profiles, pricing and business processes. Discussions are also underway towards the planned pilot of the MDIC with one of the banks.
The required consultation with National Treasury on the R1 Billion government guarantees, and the R150 million capitalization of the MDIC, has commenced.

39. Financial Report

40. 2011/12 Final Adjusted Allocation
Programmes
Original Allocation
R’000
Roll-Overs
Additional funds R’000
Virements
Total Adjustments
Final Allocation
1. Administration
232,435
676
-11,000
-10,324
222,111
2. Housing Policy, Research and Monitoring
39,215
227
39,442
3. Housing Planning and Delivery Support
156,163
31,135
713
12,000
43,848
200,011
4. Housing Development Finance
21,995,147
26,008
180,344
-4,000
202,352
22,197,499
5. Strategic Relations and Governance
155,535
7,496
447
3,000
10,943
166,478
Total
22,578,495
64,639
182,407
247,046
22,825,541

41. Adjustments Rollovers Approved from 2010/11 to 2011/12
R64,5 million approved
R31,1 m (ACIP); R26 m (RHIP); R3,1 m for Turnaround Strategy Development; and R4,3 m for SITA Infrastructure Services.
Additional funds
R180 million for disaster relief;
R2,4 million for higher salaries adjustments.

42. Programme Expenditure - 31 March 2012
Programmes
Adjusted Allocation 1
R’000
Expenditure 2
Variance
= 1- 2
% Spent
1. Administration
222,111
167,552
54,559
75%
2. Housing Policy, Research and Monitoring
39,442
32,954
6,488
83%
3. Housing Planning and Delivery Support
200,011
187,350
12,661
93%
4. Housing Development Finance
22,197,499
22,105,620
91,879
100%
5. Strategic Relations and Governance
166,478
105,444
61,034
63%
Total
22,825,541
22,598,920
226,621
99%

43. Transfer Payments - 31 March 2012
Adjusted
Allocation
R000
Expenditure
Variance
% Spent
Human Settlements Development Grant
14,941,516
100%
Rural Households Infrastructure Development
257,508
172,874
84,634
67%
Urban Settlements Development Grant
6,266,998
Housing Disaster Relief Grant
180,000
Social Housing Regulatory Authority: Operational
19,305
Rural Housing Loan Fund
49,500
Housing Development Agency
89,100
National Urban Reconstruction and Housing Agency
100,000
Social Housing Foundation
3,018 - 0%
Social Housing Regulatory Authority: Capital Restructuring Grant
226,169
Total
22,133,114
22,045,462,242
87,652

44. Human Settlements Development Grant
Provinces
Total Available
1 April March 2012
Transferred Funds
Spent by Provinces
Spent vs.
Spent as %
of Total Available
Unspent as % of Total Available
R'000
Eastern Cape
2,177,676
1,897,076
280,600
87%
13%
Free State
913,907
903,431
10,476
99% 1%
Gauteng
3,804,611
3,786,015
18,596
100% 0%
KwaZulu-Natal
2,769,871
2,769,872 -1
Limpopo
1,398,914
1,259,394
139,520
90%
10%
Mpumalanga
916,677
916,673 4
Northern Cape
322,639
322,617 22
North West
998,376
1,148,708
-150,332
115%
-15%
Western Cape
1,638,845
1,635,001
3,844
Total
14,941,516
14,638,787
302,729
98% 2%

45. Non-Financial Performance - HSDG
Province
Annual Delivery Targets
Delivery Performance as at 31 March 2012
Variance Delivery sites
Variance Delivery Top Structure
Total Variance Delivery
Sites(units)
Top Structure (units)
Total Delivery Targets
Sites
Total Delivery Performance
Eastern Cape
15,660
15,419
31,079
5,990
14,498
20,488
(9,670)
(921)
(10,591)
Free State
7,680
7,526
15,206
7,400
9,070
16,470
(280)
1,544
1,264
Gauteng
15,606
34,294
49,900
15,803
22,521
38,324
197
(11,773)
(11,576)
KwaZulu-Natal
8,860
25,587
34,447
5,426
22,119
27,545
(3,434)
(3,468)
(6,902)
Limpopo
3,000
13,410
16,410
1,752
13,619
15,371
(1,248)
209
(1,039)
Mpumalanga
8,235
10,394
18,629
1,515
7,702
9,217
(6,720)
(2,692)
(9,412)
Northern Cape
1,530
3,480
5,010
1,456
3,683
5,139
(74)
203
129
North West
8,688
17,883
26,571
10,559
16,333
26,892
1,871
(1,550)
321
Western Cape
13,085
12,640
25,725
8,686
11,065
19,751
(4,399)
(1,575)
(5,974)
Total
82,344
140,633
222,977
58,587
120,610
179,197
(23,757)
(20,023)
(43,780)

46. Non-Financial Performance - HSDG
Delivery Variables/Milestones
 Amount (R)
Emergency Housing
59,800,422
Rectification Programme
397,316,343
OpsCap
115,643,759
Feasibility Studies
29,950,917
Geo-tech Evaluation
1,092,024,404
Housing Planning
567,888
Land Purchases
524,145,896
Total
2,219,449,629

47. Urban Settlements Development Grant

48. Spent vs. Total Available Spent as % of Total Available
Municipalities
Total Available
1 July March 2012
Transferred Funds
Spent by Municipality
Spent vs. Total Available
Spent as % of Total Available
Unspent as % of Total Available
R'000
Buffalo City
423,446
79,699
343,747
19%
81%
Nelson Mandela
502,626
262,195
240,431
52%
48%
Mangaung
411,995
163,153
248,842
40%
60%
Ekurhuleni
1,094,276
504,305
589,971
46%
54%
City of JHB
1,027,970
470,176
557,794
City of Tshwane
891,081
349,874
541,207
39%
61%
eThekwini
1,091,574
558,323
533,251
51%
49%
City of Cape Town
824,030
287,972
536,058
35%
65%
Total
6,266,998
2,675,697
3,591,301
43%
57%

49. Comment on Matters of Emphasis
Creation of commitments is now done differently as recommended by the audit team and contingent liabilities are now correctly disclosed
The performance of the Rural Sanitation Programme is receiving attention and systems and measures are in place and it is expected the improved governance and programme performance will come through in the financial years to come.

50. Comment on Matters of Non-Compliance
Payments Made in respect of the 30 day prescripts
A process has been put in place to address the issue and matters identified by the Auditor-General are receiving attention.
Irregular Expenditure
The procurement matters identified have been addressed and matters of interpretation corrected and aligned to Treasury Practice Notes.

51. Thank You