Parliament of South Africa

11/27/2020 | Press release | Distributed by Public on 11/27/2020 06:49

Media Statement: Human Settlements Committee Calls for Balance Between Achieving Targets and Good Governance

Parliament, Friday, 27 November 2020 - The Portfolio Committee on Human Settlements, Water and Sanitation has called on the Department of Human Settlements to find a balance between achieving targets and an unqualified audit opinion. The committee considered the department's annual report as part of the Budget Review and Recommendation process.

'The committee was unanimous in welcoming the unqualified audit opinion for the department but were similarly critical that the department only achieved 63% of its set targets. While we welcomed the achievement in relations to good governance, we are concerned that tangible service delivery is not happening with the associated required level. The department must urgently work to find a balance in this regard,' said Ms Machwene Semenya, the Chairperson of the committee.

The committee is also concerned that the department underachieved in Programme 3: Programme Monitoring and Delivery Support (PMDS), which is the heartbeat of the department's mandate. For example, the development of only 117 informal settlement upgrade plans from the targeted 300 has a direct impact in improving living conditions, especially of the poor.

While the committee appreciates that there is a correlation between underperformance and the high vacancy rate within this programme, it calls on the department to implement mitigation strategies to ensure that improvements are recorded going forward.

In addition, the committee has concerns with the development of plans to implement Urban Settlements Development Grant (USDG) projects by metropolitan municipalities. The department continues to transfer these grants without the metros having concrete plans, which leads to underperformance. As a result, the committee has directed the department to improve it intergovernmental relations with municipalities to ensure the spending of USDGs and ensure service delivery to the people. The committee has called for the urgent implementation of the prescripts of the District Development Model to ensure an integrated approach in spending the USDG.

Despite this, the committee welcomed reduction in irregular expenditure from R48 million in 2018/19 financial year to R14 million in 2019/20. While the reduction is welcomed, the committee urged the department to ensure proper planning, which will ensure adherence to supply chain management legislation and policies as deviations will be eradicated.

The committee has also called on the department to strengthen governance and put more focus on the matter of emphasis raised by the Office of the Auditor-General to ensure a clean audit in the upcoming financial year.

Regarding the National Housing Finance Corporation (NHFC), the committee welcomed the unqualified audit opinion, but has urged the NHFC to put more focus on resolving matters of emphasis raised by the Auditor-General. These include ensuring that the financial statements submitted for auditing should be prepared in accordance with the prescribed financial reporting framework, as required by section 55(1)(b) of the Public Finance Management Act.

Most concerning is the inability of the entity to prevent irregular expenditure, which amounted to R5.4 million. The irregular expenditure was predominantly incurred due to the continued use of contracts after their expiry dates. This must be rectified, as it is a central pillar of good governance and could be abused for corrupt practices.

The committee is also concerned by the performance of set targets, with the entity achieving only 19 of the 39 key performance indicators, which is an overall achievement rate of 48.7%. Programme 1 performed the worst out of the four programmes, only achieving 23.5% of targets. The committee has urged the entity to ensure targets are achieved, especially because of the strategic role the entity is supposed to play in ensuring access to sustainable human settlements in the low to middle-income segment of the South African housing market.

Regarding the Social Housing Regulatory Authority, the committee acknowledges the effort in achieving an unqualified audit opinion, but has also emphasised that the entity must focus on resolving matters of emphasis raised by the Auditor-General.

Meanwhile, the committee has called for the entity to have a clear plan to curb irregular expenditure. The committee is concerned that the entity had irregular expenditure amounting to R225 663 337.

Furthermore, the committee decried the achievement of set targets in the financial year with a total of 67% achieved targets. The committee's concerns centre around the need for delivery of sustainable human settlements, which is negatively affected by the non-achievement of targets. The committee has called for a comprehensive plan to increase performance in the coming financial year.

ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS, WATER AND SANITATION, MS MACHWENE SEMENYA.

For media enquiries or interviews with the Chairperson, please contact the committee's Media Officer:

Name: Malatswa Molepo (Mr)
Parliamentary Communication Services
Tel: 021 403 8438
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