1. DEPARTMENTAL PERFORMANCE REPORT
(APRIL MARCH 2017)
S.M. TSHANGANA
28 NOVEMBER 2017

2. Overview of the Presentation
Summary on operational –strategic management progress
Targets not achieved
Annual targets and progress for the 2016/2017 APP
Financial information
Overall performance of the department
Audit findings
Department’s response to audit findings

3. Summary on operational –strategic management progress
During the 2016/2017 financial year, the department focused on improving the following:
Streamlining the planning processes with provinces and metros to ensure aligned and responsive plans to strategic priorities,
Providing support to provinces and metros in the implementation of priorities, this assisted the department in managing risks associated with spending the budget and achieving the targets
Collaborating with the Department of Rural Development and Land Reform Deeds Registry to ensure that the backlog in issuing title deeds is resolved
Putting in place the mechanisms to address the Title backlog by institutionalising the process and assigning capacity to each province to oversee the process
Initiating the development of the Customised Sector Indicators that will be used across all Provinces to improve planning - reporting and possibly audit outcomes on HSDG related targets
Developing Service Charter and the Service Delivery Improvement Plan for the MTEF

4. Summary on operational –strategic management progress continue..
During the 2016/2017 financial year, the department focused on improving the following:
Implementing the project readiness matrix which is a risk management tool used to assess the readiness of projects
Developing a framework to assess the readiness of municipalities to deliver on mega projects
Developing the policy for Human Settlements
Mobilising stakeholders to participate on Human Settlements development, particularly in the Nelson Mandela Bay intervention
Participating in the Habitat 111 conference, Cities Alliance and implementing the proposed co-operation with Algeria and Cuba

5. Summary on operational –strategic management progress
The department in collaboration with the NHBRC focused on improving institutional capacity and coordination by focusing on the skills acquisition that enable participants to part take in the built environment industry as service providers
A significant number of students were also funded to study towards obtaining the built environment qualifications in various institutions of learning
The department ensured that risk associated matters are attended to , this includes the establishment of the risk management committee that provides oversight on the management of strategic and operational risks,
More focus was put on processing payable and valid invoices within 30 days
Matters relating to MPAT were attended to, the department engaged with DPME in areas where there were inconsistencies on the MPAT scores and developed an improvement plan

6. Achievements on communication and consumer education

7. Progress made in Mining Towns
Between 2014/ 15 financial year until 31 March 2017 :
56 informal settlements in Category A received full upgrading (rapid formalization and full services)
118 informal settlements in Category B1 received interim basic services (leading to eventual formalization)
58 informal settlements in Category B2 emergency basic services (but leading to eventual relocation)
124 informal settlements in Category C would have to be relocated rapidly (to a site which is already available or imminently available)
A total of 338 projects have been implemented in municipalities with mining towns
A total number of 187,501 sites and 265,271 units were completed from the 2014/15 financial year until the period ending 31 March 2017

8. PROJECT PARTNERSHIP WITH MINING COMPANIES
NDA
MOU
CURRENT STATUS
Lonmin
Signed
Draft
Draft Housing / Human Settlements Strategy and preliminary agreement on 5 project sites
Anglo Platinum
Submitted for signature
Agreement to be reached regarding overall co-financial commitments and funding model for the project; discussions underway regarding with Province regarding Smashblock Informal Settlement
Norplats
Royal Bafokeng
Draft MOU finalized; discussions underway with North West Province and Rustenburg Local Municipality
Wesizwe
CRU Project implementation underway. New projects being identified.

9. Summary of policy and delivery targets not fully achieved
During the year under review, the department as the overall accounting organization in the Human Settlement Sector did not fully achieve the following targets:
Title Deeds restoration programme
Households in informal settlements upgraded
Subsidy housing units delivered
Affordable rental housing opportunities
Hectares of land rezoned for new developments
Draft White Paper
Physical integration of the development finance institutions
Master Spatial Plan

10. Summary of operational-compliance targets not fully achieved
Audit plan was not fully implemented-this is due to audits that overlap beyond the financial year
Anti fraud and corruption plan not fully implemented due to capacity constraints
Human Resources implementation plan not fully achieved-this can attributed to the process of filling vacant positions that was initiated at the end of the quarter 4
Statutory requirements on Human Resources not complied with fully
Training of officials, consumers and military veterans on human settlements capacity programmes not achieved

11. Annual Performance Plan targets and actual performance Administration
Annual target
Actual Performance
Compliance with statutory tabling and prescripts
Target Achieved . This includes but not limited to :
Tabling dates observed and adhered to
Financial Statements developed and submitted as per the schedule
Unqualified Audit Report
Outcome not adverse,
Matter of emphasis on Title deeds –unavailability of source documentation at the time of audit
Adherence to Cabinet and Cluster schedule as per approved protocol
All requirements adhered to
Implementation of the approved audit plan
Audits conducted to support operational compliance and improvements , not all audits were conducted as planned – due to capacity constraints
Compliance to Human Resource Statutory Requirements
Target partially achieved
Requirements relating to submission of SMS agreements not fully complied with during the year under review

12. Annual Performance Plan targets and actual performance Administration
Annual target
Actual Performance
Development of legislative framework as per approved Legislative programme
Target achieved : This includes
Sectional Title Scheme Management Act, 2011 (Act No.8 Of 2011) (STSM)-
The Community Schemes Ombud Service (CSOS) Act (Act No.9 Of 2011)
Property Practitioners Bill, 2016
Home Loan And Mortgage Disclosure Amendment Bill,2016
Prevention Of Illegal Eviction From And Unlawful Occupation Of Land (Pie) Amendment Bill, 2016
Housing Consumer Protection Bill, 2016-
Drafting of the Human Settlements Development Bank Bill, 2016

13. Annual Performance Plan targets and actual performance Policy and Planning
Annual target
Actual Performance
1st draft of the revised Red Book approved for consultation
Target achieved
An approved Human Settlements Master Spatial Plan
Target partially achieved :
Draft Human Settlements Master Spatial Plan developed
A draft White Paper for Human Settlements
The Drafting of the White Paper commenced
A framework for the Human Settlements code developed
Revised Accreditation Framework

14. Annual Performance Plan targets and actual performance Delivery
Annual target
Actual Performance
Provinces and four Metros supported on the implementation of PHP Policy
Target achieved :
 8 689 PHP units delivered in KZN, Mpumalanga, North West
Mobilisation and strengthening of stakeholder participation on Human Settlements Development
Target achieved
Single DFI operational integration completed
Target partially achieved:
All the required legal, governance and regulatory approvals are in place for the operational integration
A draft bill for the establishment of Human Settlements Development Bank finalised for submission to Cabinet.
youth, women, military veterans, government officials and consumers in the subsidy and gap market, trained on human settlements skills development programmes
Target Partially achieved:
21 729 does not include the targeted military veterans 

15. Annual Performance Plan targets and actual performance Delivery
Annual target
Actual Performance
9 human settlement interventions implemented in mining towns
Target achieved
15 catalytic projects implemented
Target achieved (old mega projects in various phases of implementation)
48 Catalytic projects have bee approved and are in various stages
500 feasibilities on informal settlements conducted
Target partially achieved:
283 Feasibilities conducted
444 Informal settlement upgrading plans developed
413 Plans developed

16. Annual Performance Plan targets and actual performance Delivery
Annual target
Actual Performance
Total delivered during the MTSF period until 31 March 2017 (Outcome 8 report)
households upgraded to phase 2
75 941 households
HSDG (56 343)
USDG (19 598 )
households upgraded to phase 2
subsidy housing opportunities provided
 subsidy opportunities
:Subsidy units delivered
Title Deeds transferred
3 700 affordable rental opportunities delivered
5 040 affordable rental opportunities delivered
15 776
6 301 of Social Housing units delivered
3595 of Social Housing units delivered
8 165
2 000 Community Residential Units (CRU) delivered
981 Community Residential Units (CRU) delivered
5 258

17. Annual Performance Plan targets and actual performance Delivery
Annual target
Actual Performance
Total delivered during the MTSF period until 31 March 2017 (Outcome 8 report)
title deeds backlog eradicated
title deeds backlog eradicated
(Backlog pre- and post- 1994)
2 455 hectares of well-located land acquired, rezoned, and released for new developments
ha of well-located land acquired ,
There is slow progress on rezoning of the land ha
2 Evaluation studies conducted (Affordable Housing and Access)
1 Evaluation study conducted (Affordable Housing)
5 Studies conducted (Asset, USDG, Social Housing, IRDP, Affordable Housing)
100% of projects under implementation monitored and verified (HSDG and USDG)
96.6% of projects under implementation monitored and verified (HSDG and USDG)
N/A

18. DEPARTMENTAL EXPENDITURE ANNUAL REPORT
AUDITED

19. Departmental Expenditure as at 31 March 2017
Programmes
R`000
Total Allocation
Expenditure
Variance
% Spent
1. Administration
34 562
92%
2. Human Settlements Policy,
Strategy & Planning
92 275
86 600
5 675
94%
3. Programme Delivery Support
65 943
70%
4. Housing Development Finance
2 945
100%
Total

20. Financial Intervention (HSDG)
Projected Outputs (Sites)
Projected Outputs (Units)
Projected Outputs (Other)
Funds Allocated
Actual Expenditure
Variance
% of Allocation spent
R'000
1.1a Individual housing subsidies (R0 - R3 500) credit linked -
6 827
1.1b Individual housing subsidies (R0 - R3 500) Non - Credit Linked 5
478
47 983
230
1.2 Housing finance linked Individual subsidies (FLISP)-(R R7 000)
2 000
3 057
78 749 31
1.3 Enhanced Extended Discount Benefit Scheme (EEDBS)
5 278
68 113
36 954
31 159 54
1.4 State Asset Maintenance Programme
8 011
93 697
146
1.5a Rectified RDP stck
2 519
1.5b Rectification of Housing Stock(pre 1994)
1 166
110
1.6 Social and Economic Facilities 1
91 398
98 470
108
1.7 Accredited Municipalities (level 1 & 2):
65 194
67 951
104
1.8 Operational Capital Budget
26 344 97
1.9 Blocked projects
33 541
51 694
154
1.10 NHBRC enrolment (related to grant)
26 000
35 662 81
1.11a Land parcels procured(IHAHSD)
308
75 639
396
1.12 Housing chapters of IDP's
1 744
671
1 073 38
Total: Financial Intervention
2 005
3 535
43 283

21. Financial Intervention (HSDG) cont.
Of the reported R18.3 billion expenditure by Provinces for the 2016/17 financial year, a total of R2.2 billion which is 12% of the total available funds, was spent on Financial Intervention Housing programme.
A total of outputs was reported under Financial Intervention and the outputs cannot be counted as new housing opportunities.
The lead contributors to these outputs were mainly NHBRC enrolments with , followed by Sate Asset Maintenance with 8 011, EEDBS with and Rectification with units.
It is only FLISP under this programme that yielded a total of (2 000 sites and units) housing opportunities with a reported expenditure of R78.7 million.

22. Expenditure by Economic Classification as at 31 March 2017
Total Allocation
Expenditure
Variance
% Spent
Compensation of employees
46 204
88%
Goods and services
41 964
89%
Interest Paid 12
100%
Payments For Financial Assets 9
Transfers and subsidies
1 391
Payments for capital assets
26 168
6 611
19 557
25%
Total

23. Transfer Payments as at 31 March 2017
Total Allocation
Expenditure
Variance
% Spent
R`000
Grants
100%
Human Settlements Development Grant -
Urban Settlements Development Grant
Entities
Social Housing Regulatory Authority: Operational
36 392
Social Housing Regulatory Authority: Institutional Investment
28 083
Social Housing Regulatory Authority: Restructuring Capital Grant
Social Housing Regulatory Authority: Regulations
6 000
Community Schemes Ombuds Services
30 020
Housing Development Agency
Housing Development Agency: NUSP
10 000
Departmental Transfers
18 138
16 747
1 391
92%
Mangosuthu University of Technology
3 500
Scholarship Programme
5 847
4 529
1 318
77%
UN Habitat
1 924
1 923 1
Households
1 867
1 795 72
96%
CSIR
5 000
Payments for financial assets
National Housing Finance Corporation
Total

24. Human Settlements Development Grant Expenditure (HSDG) Performance as at 31 March 2017
Provinces
Voted Funds
Roll Over from 2015/16
Total Available
Year to date (1 April March 2017)
Transferred from Voted Funds
Spent by Provinces
Unspent against Total available
% Spent against Total Available
% Spent against Roll Over & Transferred Funds
% Unspent against Roll-over & Transferred Funds
R'000
Eastern Cape
4 186 -
100
Free State
2 784
2 878
Gauteng
43 705 99 1
KwaZulu-Natal
1 372
Limpopo
85 836 95 5
Mpumalanga
11 888
Northern Cape
3 821
6 803 98 2
North West 91 9
Western Cape
Total

25. Urban Settlements Development Grant (USDG) Performance as at 31 March 2017
USDG EXPENDITURE (01 JULY 2016 – 31 MARCH 2017)
Municipality
Voted Funds 1
Roll-over from /16 2
Total Available Funds
3=(1+2)
Transfer from Voted funds 4
Spent by Municipality 5
Unspent against Total Available Funds
6=(3-5)
% Spent against Total Available Funds
7=(5÷3)
% Unspent against Total Available Funds
8=(6÷3)
R'000
Buffalo City -
69.7
30.3
Nelson Mandela Bay
50.6
49.4
Mangaung
58 644
69.5
30.5
Ekurhuleni
43.1
56.9
City of Johannesburg
94 984
54.4
45.6
City of Tshwane
64.6
35.4
eThekwini
45.4
54.6
City of Cape Town
50.2
49.8
Total
53.6
46.4

28. Audit Outcomes
The Department achieved an unqualified audit opinion with findings on compliance and/or performance information,
The Office of the Auditor General placed an emphasis of matter on the fact that prior year financial statements had to be restated due to an error on the value of the investments,
An amount of R230 million was appropriated during 2014/15 for recapitalisation of the NHFC,
The amount was transferred to the NHFC as appropriated but was reported as a grant transfer to the NHFC instead of a recapitalisation amount. This is also mainly due to changes in the reporting requirements by National Treasury.

29. Audit Outcomes cont.
Audit finding regarding the insufficient information on the number of title deeds backlog eradicated,
This is a result of concurrent functions on the mandate which the department takes overall accountability for –while the function is performed by other spheres of government
Audit finding in respect of fruitless and wasteful expenditure,
This was due to the overlap between the department’s procured car (transaction, delivery and transition for use) and the rented car.

30. Audit Outcomes cont.
Audit finding in respect of fruitless and wasteful expenditure.
This was due to the R interest charged by the Public Service Pension Fund in respect of a pension contribution for a new staff member who’s pension contribution was unfortunately left out,
Additionally interest of R3 233 had to be paid for an arbitration award paid after a 21 day period had lapsed.

31. Departmental response to the audit outcomes
To address the material findings on performance information: the department is developing standard operating procedures that detail how indicators are developed and verified across the sector
Customised Sector Indicators shall be used to assess the alignment of plans to the MTSF priorities- and also to verify and test the accuracy of the reported information
An audit action plan to address all audit findings has been developed -and progress will be monitored and reported against quarterly through the Internal Audit unit of the department,

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