DEPARTMENTAL PERFORMANCE REPORT APRIL- JUNE 2013 PORTFOLIO COMMITTEE

DEPARTMENTAL PERFORMANCE REPORT: APRIL- JUNE 2013 PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS DIRECTOR-GENERAL: T ZULU

CONTENT 1. Departmental First Quarter Non-Financial Performance (April to June 2013) 2. Departmental Expenditure vs. Performance (Targets / Outcomes) 3. Communication and Outreach key 4. Delivery Agreement (Outcome 8) 5. Job Creation 6. Accreditation of Municipalities 7. Financial Matters 8. Challenges Experienced 9. Performance Improvement Plans / Remedial measures 2

OVERVIEW OF DEPARTMENTAL PERFORMANCE (APRIL TO JUNE 2013) • The overall achievement by the National Department of Human Settlements during the first quarter of 2013/2014 financial year is sixty five percent (65%). • Out of one hundred and eighteen (118) targets which were planned for the period under review, seventy seven (77) targets were achieved whilst forty one (41) targets were not achieved.

OVERALL DEPARTMENTAL NON-FINANCIAL PERFORMANCE (APRIL- JUNE 2013) Departmental 2013/14 First Quarter Non-Financial Performance Not Achieved 35% Achieved 65%

This is mainly due to the following challenges experienced by the Department: • Failure to deliver the required services as stated in the Service Level Agreement by SITA • Non-availability of suitable land for human settlements developments in Provinces • Insufficient active monitoring presence in Provinces and Metros to monitor and verify performance of HSDG and USDG expenditure and delivery 5

The department has taken the following steps in the filling of vacant posts: • The appointment at SMS level has been prioritized. This is done in order to ensure that non SMS appointments are done by their respective managers. • The status report on the vacancy rate is being presented at EMT level every week. This is where progress and challenges are being deliberated on. • All submissions on recruitment are being prioritized. This is done in order to ensure that the department does not loose potential candidates. • The department has signed an agreement with South African Qualifications Authority (SAQA) where the turnaround time on the verification of qualifications has been reduced to 2 days. • The officials in Human Resources unit are working extra hours in order to ensure that the recruitment process is successful. As a result 74% (155 out of 210) of vacant posts are already in the process of being filled.

The following are the Departmental Remedial measures to be put in place to improve performance: • Compulsory training on Bid specifications, evaluations and adjudication from the level of Assistant Director and upwards • Address challenges relating to inter -governmental collaborations as they impact on policy development processes and service delivery • Improve compliance by Provincial Departments and usefulness of HSS data • Sufficient monitoring presence in Provinces and Metros to reduce turnaround time in collection of information on performance • Approved guidelines to standardise and guide the implementation of PHP across the sector • Full scale implementation of the Departmental Auditor General Action Plan 7

Departmental Expenditure vs. Performance (Targets / Outcomes) Branch 1: Administration Final Allocation Commitments Expenditure Variance % Spent Planned Targets Achieved Targets Variance/ Targets % Achieved Not Targets achieved 359 221 000 54 034 402 63 123 582 296 097 418 18% 27 20 7 74% 2: Human Settlements Delivery Frameworks 40 117 395 455 649 6 453 104 33 664 292 16% 20 5 15 25% 3: Human Settlements Strategy And Planning 53 508 605 2 259 739 9 078 191 44 430 414 17% 22 14 8 64% 232 047 056 6 789 822 20 780 464 211 266 592 9% 13 8 5 62% 84 310 475 3 004 157 449 24 362 673 895 11% 23 18 5 78% 8 305 414 50 432 186 14% 13 12 1 92% 148 597 355 3 111 898 203 24 998 564 797 11% 118 77 41 65% 4: Programme Management Unit 5: Office Of The Chief Financial Officer 6: Office Of The Chief Operations Officer Total 27 366 831 344 58 737 600 28 110 463 000 747 268 8

COMMUNICATION AND OUTREACH • Sanitation Week held in Ward 5 at Makhaza in Khayelitsha – 25 April 2013 • Launched Walmer Link FLISP project – 09 May 2013 • Community engagement on the Budget Vote in Du. Noon – 22 May 2013 9

OUTCOME 8 UPGRADING OF INFORMAL SETTLEMENTS • Number of households provided with upgraded services as on 30 June 2013: 188 056 households • Represents 47. 0% of 2014 target • Including USDG: Increased to 255 628 households • Represents 63. 9% of 2014 target • Over same period Provinces delivered 192 253 formal housing units to households in informal settlements 10

OUTCOME 8 UPGRADING OF INFORMAL SETTLEMENTS PROVINCE 2014 TARGET DELIVERY APRIL TO JUNE 2013 TOTAL DELIVERY (30 JUNE 2013) % OF TARGET 2014 EC 59 440 647 23 247 39. 1 FS 26 400 920 19 116 72. 4 GT 96 760 829 45 191 46. 7 KZN 78 200 386 20 652 27. 1 LP 31 200 0 20 624 66. 1 MP 26 480 616 12 956 48. 9 NC 9 320 90 11 829 126. 8 NW 28 840 62 13 891 48. 2 WC 45 360 694 20 560 45. 3 TOTAL 400 000 4 244 188 056 47. 0 11

OUTCOME 8 UPGRADING OF INFORMAL SETTLEMENTS: USDG (30 JUNE 2013) PROVINCE HOUSING UNITS SERVICES PROVIDED (SITES/WATER/ SANITATION) RENTAL EC 5 144 14 975 470 FS 0 3 647 1 237 GT 0 18 383 179 KZN 8 654 18 372 735 WC 0 12 195 1 727 16 091 67 572 4 169 TOTAL 12

OUTCOME 8 UPGRADING OF INFORMAL SETTLEMENTS (INCLUDING USDG) PROVINCE 2014 TARGET TOTAL DELIVERY (30 JUNE 2013) INCLUDING USDG % OF TARGET 2014 EC 59 440 38 222 64. 3 FS 26 400 22 763 86. 2 GT 96 760 63 574 65. 7 KZN 78 200 39 024 51. 2 LP 31 200 20 624 66. 1 MP 26 480 12 956 48. 9 NC 9 320 11 819 126. 8 NW 28 840 13 891 48. 2 WC 45 360 32 755 72. 2 TOTAL 400 000 255 628 63. 9

OUTCOME 8 INFORMAL SETTLEMENTS: PROVISION OF TOP STRUCTURES PROVINCE DELIVERY APRIL TO JUNE 2013 TOTAL DELIVERY (30 JUNE 2013) EC 764 22 665 informal settlements with access to FS 590 19 678 services, a total number of 192 253 GT 3 487 58 385 formal top structures were also KZN 1 463 30 942 delivered to residents in and from LP 85 2 705 MP 950 11 788 informal settlements that improved the NC 366 6 400 NW 1 250 19 027 WC 1 233 20 663 TOTAL 10 188 192 253 Although the main objective of Outcome is to provide residents in and from quality of their lives. All of them previously lived in a shack with access to a low level of some basic services on sit or through shared facilities. 14

OUTCOME 8 NATIONAL UPGRADING SUPPORT PROGRAMME • NUSP is providing technical assistance or is in the process of appointing service providers to assist with upgrading strategies and plans or is in the process to determine assistance needs in the following cities/ municipalities: Ø EC: Buffalo City, Kouga, Elundini, Mhlonto and Mquma Ø FS: Categorisation and mapping under way in six NUSP Municipalities; Ø GT: Mogale City, City of Johannesburg, Ekurhuleni, City of Tshwane and Emfuleni; Ø KZN: Ladysmith, Newcastle, Mzundusi, Umhlathuze, Ethekweni and Kwa. Dukuza; Ø LP: Developing of specific upgrading plans underway and additional 10 Municipalities identified for the same exercise; 15

OUTCOME 8 NATIONAL UPGRADING SUPPORT PROGRAMME • NUSP: Ø MP: Govan Mbeki, Thembisile, Emalahleni, Steve Tshwete: Lekoa. Ø NC: //Kara Hais, Gamagara, Ga-Segonyana, Phokwane, Sol Plaatje and Tsantsabane; Ø NW: Rustenburg, Madibeng, Tlokwe, Maquassi Hills and Kgetlengrivier. A further 8 settlements have been identified for assistance; and Ø WC: Drakenstein, COCT, Mossel Bay and George. 16

OUTCOME 8 INCREASED PROVISION OF WELL-LOCATED RENTAL ACCOMMODATION PROVINCE SOCIAL CRU INSTITUTI ONAL TOTAL DELIVERY JUNE 2013 % OF 2014 TARGET TOTAL DELIVERY AS AT 30 JUNE 2013 (including USDG) % OF 2014 TARGET (including USDG) EC 2 521 0 74 2 595 21. 8 3 065 25. 8 FS 673 1 094 394 2 161 40. 9 3 398 64. 4 GT 5 335 5 033 0 10 368 53. 6 10 547 54. 5 KZN 6 576 518 732 7 826 51. 4 8 561 56. 2 LP 0 136 2. 2 MP 104 687 47 838 15. 8 NC 0 81 209 290 15. 6 NW 2 400 470 0 2 870 49. 8 WC 1 838 4 354 331 6 523 71. 9 8 250 90. 9 Total 19 447 12 373 1 787 33 607 42. 0 37 776 47. 2 17

OUTCOME 8 WELL-LOCATED AFFORDABLE RENTAL ACCOMMODATION • Restructuring Zones: 75 approved and 55 still under discussion • SHRA: Ø Completed Projects: 2143 units Ø Running Projects: 11 005 units Ø Approved pipeline projects in various stages of planning: 21 445 units • • EC: 4734 FS: 3250 GT: 1464 KZN: 1733 LP: 3887 MP: 710 NC: 1573 NW: 1764 WC: 2330 18

OUTCOME 8 ACCREDITATION OF MUNICIPALITIES Performance to date: Level 1: 8 District Municipality/Municipalities; Level 2: 8 Metros, 11 District Municipalities/Local Municipalities Implementation Protocols concluded: 24 Municipalities Assignment (Level 3 accreditation) of Metros: FFC response identified a number of operational issues that needed serious attention. • The target of signing the Executive Assignment Agreement was therefore changed to 15 August 2013. The target date for the Premier’s proclamation is now 15 September 2013. • • 19

OUTCOME 8 OUTPUT 3: EFFICIENT UTILISATION OF LAND FOR HUMAN SETTLEMENTS DEVELOPMENT • Actual delivery: Ø 72 210 ha of state land identified for assessment and 47 604 ha thereof assessed for suitability for release; Ø 7 477, 5 ha has been released (FS, GP, KZN, LP+NW) • Land released is well located for extension of existing settlements, land tenure upgrading, integrated development or GAP market Ø PHSD’s (private land acquired): 10 218, 9 ha Ø An additional 419, 3 ha has been released by the Department of Rural Development and Land Reform Ø Two properties in Elias Motsoaledi Municipality measuring 523, 3 ha submitted for approval to be released for upgrading of informal settlements 20

OUTCOME 8 OUTPUT 4: IMPROVED PROPERTY MARKET • Mortgage Default Insurance Scheme: Ø Concurrence from the National Treasury for MDI is still outstanding • Finance Linked Individual Subsidy: Ø Revised FLISP Policy implemented on 1 April 2012; Ø ABSA and Standard Bank signed a MOU with the NHFC. Three banks are now on board and actively supporting the implementation of the programme. Ø An amendment to the revised policy has been proposed to increase the value cap imposed on the policy in April 2012 in accordance to the escalation of the BER Index. Ø It is also proposed that the Section 1 A and B of the Housing Act, Act 107 of 1997, be amended to replace the pre-emptive right with a more workable solution 21

OUTCOME 8 OUTPUT 4: IMPROVED PROPERTY MARKET Cont…. . Ø Banks are using the pre-emptive right condition to not approve loan applications linked to FLISP subsidies; Ø NHFC has requested that the administration of FLISP be extended to the open market. An individual will therefore be allowed to approach a bank, obtain conditional loan approval and then approach the NHFC to apply for subsidy; Ø The above proposals are still under consideration Ø Total number of units delivered: 330 (Provincial) – NHFC: 110 households assisted • Long term fixed interest rate instrument Ø Planned for launching in 2014 22

OUTCOME 8 PERFORMANCE : DEVELOPMENT FINANCE INSTITUTIONS: LOANS GRANTED INSTITUTION TOTAL DELIVERY % OF 2014 TARGET NHFC (Mortgage Loans) 1 810 93. 8 NHFC (Incremental Loans) 12 968 31. 9 NHFC (Wholesale funding) 23 786 60. 5 NHFC (Leverage) 35 068 274. 2 RHLF 135 664 74. 6 8 357 75. 7 NURCHA 23

OUTCOME 8 • Number of households provided with upgraded services: 230 111 households (including USDG performance) - represents 57, 5% of 2014 target; • Number of affordable rental accommodation delivered: 43 774 units (including USDG funded units) – represents 54, 7% of 2014 target; • Well located state land released to Municipalities for human settlements development: 7 477, 5 ha; • Total number of loans granted to the affordable property market: 226 495 24

JOB CREATION • During the quarter, 6, 664 serviced sited and 19, 648 top structures were delivered. • This delivery translate to 9, 437 job opportunities if the definition of a person employed for a period of one year is considered. • If a temporary employment is considered for only that three months the delivery for that quarter is estimated to have created 20, 010 jobs during the construction phase. 25

ACCREDITATION OF MUNICIPALITIES Cont…. • FFC review has been received and is favourable & paves way for the formal assignment process can proceed and has been work shopped with Provinces and Metros. • Consultation with all Provinces and Metros, bar the Eastern Cape and Nelson Mandela Bay Metro, have been undertaken to establish the required actions and time-frames towards the conclusion of the Signing of the executive agreement. 26

ACCREDITATION OF MUNICIPALITIES Cont…… • Framework for the transfer of assets, liabilities, staff, and projects has been established to assist the Provinces and Metros post the signing of the assignment agreement • Assignment Task Teams constituted of provincial local government departments, Provincial Treasuries, Provincial SALGAs, Human Settlements departments and Metros are being established to oversee the assignment process in Provinces. 27

FINANCIAL MATTERS DEPARTMENTAL EXPENDITURE AND CONDITIONAL GRANTS: FIRST QUARTER 2013

Introductory Remarks cont, • The Department has been allocated a budget of R 28, 1 in 2013 financial year of which 16, 9 billion is directed to the Human Settlement Development Grant and 9, 1 billion representing an Urban Settlement Department Grant. The different catering for other programmes including the Rural Household Infrastructure Grant and the operational budget. • Within the allocation of 16, 9 billion is an earmarked allocation of 299 million for Disaster Relief Grant for disaster stricken areas 29

Introductory Remarks cont, • The HSDG together with the USDG seek to fund the establishment habitable, stable and sustainable human settlements for citizens to have access to social and economical amenities. • The HSDG is allocated to the approved business plans which categorises different programmes including the outcome 8 and National Priorities 30

Introductory Remarks cont, • This conditional grant and performance of the programmes are monitored in terms of the approved monitoring framework that is in line with the Government Wide Monitoring Framework. 31

2013 MTEF ALLOCATION Rand thousand Administration Human Settlements Policy, Strategy and Planning Programme Delivery Support Medium term estimates Budget allocation 2013/14 1. 5% 2013/14 2014/15 2015/16 422, 399 426, 948 89, 301 0. 8% 445, 106 84, 055 0. 3% 92, 967 Administration 97. 4% Human Settlements Policy, Strategy and Planning 226, 922 239, 335 251, 305 Housing Development Finance 27, 377, 087 29, 450, 583 31, 957, 214 Programme Delivery Support Total 28, 110, 463 30, 206, 167 32, 746, 592 Housing Development Finance Grants and transfers to entities constitute 97% of the total allocation. 32

2013 MTEF ALLOCATION: TRANSFER PAYMENTS Rand thousand Medium term estimates 2013/14 2014/15 2015/16 Human Settlements Development Grant 16, 983, 872 17, 918, 321 19, 667, 204 Urban Settlements Development Grant 9, 076, 906 10, 334, 684 10, 699, 773 Rural Households Infrastructure Grant 106, 721 113, 124 118, 328 1 97, 497 101, 047 5 Housing Development Agency National Urban Reconstruction and Housing Agency 100, 000 Social Housing Regulatory Authority: Operational 32, 151 33, 480 35, 020 Social Housing Regulatory Authority: Capital restructuring grant Total 904, 103 867, 543 1, 248, 400 27, 301, 250 29, 368, 199 31, 873, 341

EXPENDITURE PER PROGRAMME: 30 JUNE 2013 Programmes 1. Administration % Final Allocation Commitments Expenditure Variance = 1 - Spent 1 2 3 3 422, 399, 000 56, 395, 570 75, 942, 535 346, 456, 465 18% 2. Human Settlements Policy, Strategy and Planning 84, 055, 000 2, 643, 434 14, 608, 842 69, 446, 158 17% 3. Programme Delivery Support 226, 632, 000 6, 466, 264 21, 285, 916 205, 346, 084 9% 4. Housing Development Finance 27, 377, 000 83, 092, 087 3, 000, 060, 910 24, 377, 316, 090 11% Total 28, 110, 463, 000 148, 597, 355 3, 111, 898, 203 24, 998, 564, 797 11% 34

OPERATIONAL EXPENDITURE: 30 JUNE 2013 Programmes 1. Administration Final Allocation Commitments Expenditure Variance % Spent 422, 399, 000 56, 395, 570 75, 942, 535 346, 456, 465 18% 2. Housing Policy, Research and Monitoring 83, 005, 000 2, 643, 434 14, 608, 842 68, 396, 158 18% 3. Housing Planning and Delivery Support 219, 168, 000 6, 466, 264 20, 458, 984 198, 709, 016 9% 4. Housing Development Finance 76, 127, 000 858, 319 10, 730, 910 65, 396, 090 14% 800, 699, 000 66, 363, 587 121, 741, 271 678, 957, 729 15% Total Note: Expenditure excludes all Transfer payments. 35

TRANSFER PAYMENTS 30 JUNE 2013 Transfer Payments Human Settlements Development Grant Total Allocation Transferred Variance 16, 983, 872, 000 2, 940, 582, 000 14, 043, 290, 000 % Spent 17% 9, 076, 906, 000 - 9, 076, 906, 000 0% 106, 721, 000 - 106, 721, 000 0% 32, 151, 000 - 32, 151, 000 0% 904, 103, 000 - 904, 103, 000 0% 97, 497, 000 48, 748, 000 48, 749, 000 50% 100, 000 - 100, 000 0% Nelson Mandela University 3, 244, 000 - 3, 244, 000 0% Bursaries Scheme 4, 220, 000 826, 932 3, 393, 068 20% UNHABITAT Total 1, 050, 000 - 1, 050, 000 0% 27, 308, 714, 000 2, 990, 156, 932 24, 319, 607, 068 11% Urban Settlements Development Grant Rural Households Infrastructure Development Social Housing Regulatory Authority: Operational Social Housing Regulatory Authority: Capital Restructuring Grant Housing Development Agency National Urban Reconstruction and Housing Agency

STATUS OF NON TRANSFERS Tranche/transfer payments for the Human Settlements Development Grant in respect of April to June were not made to Limpopo ( R 225) and Mpumalanga (Total value is R 305 million ). Ø Limpopo transfer was withheld as per National Treasury instruction. Ø Mpumalanga’s human settlements development business plan was considered but did not address Outcome 8 targets. It was referred back to the province for correction and resubmission. The revised business plan was received back and approved and the transfers have taken place in the beginning of July.

REASONS FOR UNDERSPENDING Cont…. • In general what was and still of concern is the slow filling of vacancies due to delays experienced in qualification verification by the South African Qualifications Authority (SAQA) for posts already interviewed and the continued lack of office-space. • Special Investigation Unit (SIU) challenges of the SIU not providing the Department with invoices. • The leasing of additional office accommodation was not effective as issues were still not resolved with the Department of Public Works at that time • Slow implementation of the National Upgrading Support Programme. 38

REASONS FOR UNDERSPENDING Cont…. . • The inability of SITA to provide resources at an adequate level to maintain the Housing Subsidy System (HSS) as stipulated in the SLA. 39

Dept Expenditure per Programme: 30 September 2013 Programmes 1. Administration 2. Human Settlements Policy, Strategy and Planning 3. Programme Delivery Support Final Allocation 1 422, 399, 000 Commitments 2 51 641 272 Expenditure 3 Variance = 1 - 3 % Spent 146 088 865 276 310 135 35% 84, 055, 000 3 057 760 29 268 538 54 786 462 35% 226, 632, 000 16 051 125 44 199 444 181 502 556 20% 4. Housing Development Finance 27, 377, 000 1 289 367 928 9 070 650 363 18 307 656 637 33% Total 28, 110, 463, 000 1 360 118 084 9 290 207 210 18 820 255 790 33% 40

Transfer payments 30 September 2013 Transfer Payments Total Allocation Transferred Variance % Spent Human Settlements Development Grant 16, 983, 872, 000 7 633 586 000 9 350 286 000 45% Urban Settlements Development Grant 9, 076, 906, 000 1 026 538 500 8 050 367 500 11% Rural Households Infrastructure Development Social Housing Regulatory Authority: Operational Social Housing Regulatory Authority: Capital Restructuring Grant Housing Development Agency National Urban Reconstruction and Housing Agency 106, 721, 000 - 106 721 000 0% 32, 151, 000 - 32 151 000 0% 904, 103, 000 250 000 654 103 000 28% 97, 497, 000 48 748 000 48 749 000 50% 100, 000 100 000 - 100% Nelson Mandela University 3, 244, 000 - 3 244 000 0% Bursaries Scheme 4, 220, 000 2 623 149 1 596 851 62% UNHABITAT 1, 050, 000 - 1 050 000 0% Total 27, 308, 714, 000 9 061 495 649 18 248 268 351 33%

HUMAN SETTLEMENTS DEVELOPMENT GRANT 2013/14 ALLOCATION Provinces 2013/14 Allocation other outcomes R`000 Total Allocation EASTERN CAPE 2, 429, 631 94, 172 2, 523, 803 FREE STATE 1, 047, 691 73, 245 1, 120, 936 GAUTENG 4, 108, 339 60 4, 108, 399 KWAZULU-NATAL 3, 183, 708 51, 720 3, 235, 428 LIMPOPO 1, 289, 076 35, 666 1, 324, 742 MPUMALANGA 1, 123, 734 598 1, 124, 332 NORTHERN CAPE 378, 534 17, 190 395, 724 NORTH WEST 1, 198, 229 26, 308 1, 224, 537 WESTERN CAPE 1, 925, 971 Total Disaster Relief 16, 684, 913 - 298, 959 1, 925, 971 16, 983, 872

HUMAN SETTLEMENTS DEVELOPMENT GRANT HSDG allocation by Province 11. 3% 14. 9% 7. 2% 6. 6% 2. 3% Eastern Cape Free State Gauteng Kwa. Zulu-Natal 6. 6% Limpopo Mpumalanga Northern Cape North West 7. 8% 24. 2% 19. 1% Western Cape

HSDG Allocation cont: 80/20 Split Provinces R`000 2013/14 Total Allocation by Normal Project province allocation Outcome 8 allocation Disaster Relief EASTERN CAPE 2, 523, 803 1, 979, 716 449, 915 94, 172 FREE STATE 1, 120, 936 901, 014 146, 677 73, 245 GAUTENG 4, 108, 399 3, 116, 973 991, 366 60 KWAZULU-NATAL 3, 235, 428 2, 617, 245 566, 462 51, 720 LIMPOPO 1, 324, 742 816, 955 472, 121 35, 666 MPUMALANGA 1, 124, 332 966, 412 157, 323 598 NORTHERN CAPE 395, 724 325, 539 52, 995 17, 190 NORTH WEST 1, 224, 537 1, 030, 477 167, 752 26, 308 WESTERN CAPE 1, 925, 971 1, 593, 599 332, 372 16, 983, 872 13, 347, 930 3, 336, 983 Total - 298, 959 44

HSDG ALLOCATION cont : Outcome 8 Provinces R`000 2013/14 Upgrading of Informal Settlements Rental and Social Housing Land National Priority Program EASTERN CAPE 145, 778 170, 074 24, 296 109, 767 FREE STATE 62, 861 73, 338 10, 477 - GAUTENG 246, 500 287, 584 41, 083 416, 198 KWAZULU-NATAL 191, 022 222, 860 31, 837 120, 743 LIMPOPO 77, 345 90, 235 12, 891 291, 651 MPUMALANGA 67, 424 78, 661 11, 237 - NORTHERN CAPE 22, 712 26, 497 3, 785 - NORTH WEST 71, 894 83, 876 11, 982 - WESTERN CAPE 115, 558 134, 818 19, 260 62, 736 Total 1, 001, 095 1, 167, 944 166, 849 1, 001, 095

PRIORITY PROJECTS ALLOCATIONS 2013/14 Province Town EASTERN CAPE GAUTENG Sub Total KWAZULU-NATAL LIMPOPO WESTERN CAPE Duncan Village 109, 767 Lufhereng Diepsloot Sweetwaters Khutsong 182, 944 91, 472 45, 736 96, 046 416, 198 Cornubia 120, 743 Lephalale 291, 651 Drommedaris 62, 736 Total 1, 001, 095

HUMAN SETTLEMENTS DEVELOPMENT GRANT EXP: JUNE 2013 R'000 Provinces DORA Allocation 2013/14 Funds withheld/ stopped R'000 Year to date (1 April 2013 - 30 June 2013) Variance Spent Unspent as Transferred Funds Spent by Provinces vs Total % of Total Available % R'000 Eastern Cape 2, 523, 803 - 400, 135 16% 322, 069 13% 78, 066 2, 201, 734 Free State 1, 120, 936 - 229, 362 20% 90, 547 8% 138, 815 1, 030, 389 Gauteng 4, 108, 399 - 912, 171 22% 614, 238 15% 297, 933 3, 494, 161 Kwa. Zulu-Natal 3, 235, 428 - 677, 183 21% 595, 123 18% 82, 060 2, 640, 305 Limpopo 1, 324, 742 224, 971 - 0% 97, 903 7% (97, 903) 1, 226, 839 Mpumalanga 1, 124, 332 320, 621 - 0% 77, 893 7% (77, 893) 1, 046, 439 Northern Cape 395, 724 - 74, 517 19% 61, 840 16% 12, 677 333, 884 North West 1, 224, 537 - 304, 246 25% 275, 602 23% 28, 644 948, 935 Western Cape 1, 925, 971 - 342, 968 18% 248, 466 13% 94, 502 1, 677, 505 Total 16, 983, 872 545, 592 2, 940, 582 17% 2, 383, 681 14% 556, 901 14, 600, 191

DELIVERY AS AT 30 JUNE 2013 Province Annual Delivery Targets Sites (units) Eastern Cape Delivery Performance as at 30 June 2013 Top Structure Total Delivery (units) Targets Sites (units) Top Structure (units) Total Delivery Performance 17, 265 20, 412 37, 677 1, 780 1, 969 3, 749 8, 794 10, 157 18, 951 701 723 1, 424 Gauteng 15, 460 28, 023 43, 483 829 3, 974 4, 803 Kwa. Zulu-Natal 10, 018 26, 682 36, 700 692 5, 614 6, 306 Limpopo 4, 901 17, 552 22, 453 85 1, 367 1, 452 Mpumalanga 1, 000 14, 287 15, 287 - 1, 583 Northern Cape 7, 987 3, 673 11, 660 90 455 545 North West 5, 053 15, 230 20, 283 9 2, 451 2, 460 Western Cape 6, 642 11, 802 18, 444 694 1, 233 1, 927 77, 120 147, 818 224, 938 4, 880 19, 369 24, 249 Free State Total

Human Settlements Development Grant • The total allocation in respect of the Human Settlements Development Grant for the 2013/14 financial year amounted to R 16. 9 billion and includes R 299 million for the Disaster Relief allocation; • The total amount transferred to Provinces as at 30 June 2013 amounted to R 2. 941 billion, which represents 17% as projection of the total allocation; • Provinces spent R 2. 384 billion and this represents 14% of the total allocation and 86% of the projected figure; • The variance of R 556 million is carried over to the following month however it still lies in the Primary bank account of the province and is only accessible upon requests that align to the goods and services payable; 49

HSDG Cont. • The North West Province spent the highest at 90. 6%. • Of the R 275. 6 million spent, the Province delivered a total of 2 666 units consisting of 71 serviced sites and 2 595 top structures against an annual target of 20 283; • Kwa. Zulu-Natal spent 88% and delivered 6 306 units consisting of 692 serviced sites and 5 614 top structures against an annual target of 36 700. • Northern Cape spent 83% and delivered 481 units consisting of 90 serviced sites and 391 top structures against an annual target of 11 660. 50

HSDG Cont. • The lowest spending Province is Free State at 39%. • Mpumalanga Province’s business plan was approved on 26 June 2013 and funds were only transferred in the beginning of July 2013, however the actual expenditure is R 77. 8 million. The Province delivered a total of 1 583 top structures from an annual target set at 15 287 units and nothing was reported on sites. 51

HSDG Cont. • Although the Limpopo Province’s business plan was approved. No funds were transferred to the Limpopo Province as per National Treasury instruction issued on 19 th April 2013, however the Province reported spending of R 97. 9 million and managed to deliver a total of 1 452 units consisting of 85 serviced sites and 1 367 top structures from an annual target of 22 453 units. 52

Delivery Performance 2013/14 (Apr – July) vs. Estimated Targets Target based on data used in Dept Presentation Note: 2013/14 delivery figures are up to end July 2013 and are preliminary.

Performance 1 st quarter other milestones (Financial Interventions) Expenditure 2013/14 R'000 Delivery variables/milestones Funds allocated R'000 FLISP 20, 461 3, 004 Rectification Programme 158, 377 131, 961 Opscap 179, 611 99, 219 Blocked Projects 22, 861 2, 239 Land Parcels 77, 501 4, 085 Other 318, 635 112, 708 Total 777, 446 353, 216 54

Challenges • Challenges as per provinces: – Slow procurement processes – Poor Cash flow management – Non-availability of suitable land for human settlements developments • Department’s observations: – Lack of credible pipeline of projects – Poor planning and/or execution of the plans have always been a problem – Performance reporting is not always in line with the Business plans and this may suggest that plans are being developed for compliance purposes 55

Interventions • Provinces and Municipalities to align all grants to ensure bulk infrastructure is in place before implementation of programmes and projects; • Provinces and Municipalities must develop and align programme and procurement plans • Feasibilties to ensure programme and project readiness. • Programme Management Units to be established and prioritised. • Provinces to utilise the HSS to administer and report on all human settlements delivery programme and processes. 56

Human Settlements Development Grant Expenditure: 30 September 2013 (PRELIM) Year to Date 1 April 2013 to 30 September 2013 Variance Spent vs Transferred Total Available Transferred Funds Spent by Provinces Eastern Cape R'000 2, 523, 803 R'000 996, 012 39% R'000 928, 758 Free State 1, 120, 936 580, 980 52% Gauteng 4, 108, 399 2, 072, 499 Kwa. Zulu-Natal 3, 235, 428 Limpopo Provinces 37% R'000 67, 254 R'000 1, 595, 045 63% 233, 669 21% 347, 311 887, 267 79% 50% 1, 247, 836 30% 824, 663 2, 860, 563 70% 1, 515, 478 47% 1, 325, 555 41% 189, 923 1, 909, 873 59% 1, 324, 742 - 0% 157, 102 12% (157, 102) 1, 167, 640 88% Mpumalanga 1, 124, 332 555, 185 49% 245, 938 22% 309, 247 878, 394 78% Northern Cape 395, 724 164, 341 37% 18, 887 250, 270 63% North West 1, 224, 537 655, 168 54% 597, 314 49% 57, 854 627, 223 51% Western Cape 1, 925, 971 1, 093, 923 57% 939, 582 49% 154, 341 986, 389 51% 16, 983, 872 7, 633, 586 45% 5, 821, 208 34% 1, 812, 378 11, 162, 664 66% Total % Unspent as % of Total Available 42% 145, 454 % 57

Delivery Performance as at 31 August 2013 Annual Delivery Targets Delivery Performance 31 August 2013 Variance Delivery sites Province Sites(units) Top Structure(unit Total Delivery s) Targets Sites Top Structure(units) Variance Delivery Top Structure Total Variance Delivery Total Delivery Performance Eastern Cape 17, 265 20, 412 37, 677 3, 214 3, 589 6, 803 14, 051 16, 823 30, 874 Free State 8, 794 10, 157 18, 951 2, 190 1, 222 3, 412 6, 604 8, 935 15, 539 Gauteng 15, 460 28, 023 43, 483 829 8, 553 9, 382 14, 631 19, 470 34, 101 Kwa. Zulu-Natal 10, 018 26, 682 36, 700 908 9, 895 10, 803 9, 110 16, 787 25, 897 Limpopo 4, 901 17, 552 22, 453 85 1, 692 1, 777 4, 816 15, 860 20, 676 Mpumalanga 1, 000 14, 287 15, 287 3, 487 3, 120 6, 607 2, 487 11, 167 13, 654 Northern Cape North West 7, 987 5, 053 3, 673 15, 230 11, 660 20, 283 139 860 4, 012 999 4, 098 7, 848 4, 967 2, 813 11, 218 10, 661 16, 185 Western Cape 6, 642 11, 802 18, 444 1, 152 2, 397 3, 549 5, 490 9, 405 14, 895 77, 120 147, 818 224, 938 12, 090 35, 340 47, 430 65, 030 112, 478 177, 508 Total

Performance of other milestones

Urban Settlements Development Grant Expenditure: 30 June 2013 60

USDG Exp cont. . 61

Non-Financial Performance - BCM The 73% expenditure of the Metro was on the following: • 9. 32 kms of roads have been tarred; • 6. 6 kms of roads have been upgraded from gravel to surfaced; • 68 km of roads have been built; • 347. 53 km of roads have been resurfaced; • 501 stands have been serviced; • 17 new water service points (taps) installed for informal settlements dwellers; • 591 new households (RDP) have been provided with water connections; • 160 new sanitation service points installed for informal settlements dwellers; • 306 new households (RDP) have been provided with electricity connections; • 254 street lights have been installed in new settlements.

USDG Exp cont. . 63

Non-Financial Performance - NMBM • 3 080 new subsidised houses were provided with water and sewer connections. • 132 870 households with solid waste removal. • 2 870 new erven connected to electricity. • 351 area lights. • 41 high mast. • 4 km of roads surfaced. • 12 km roads tarred. • 3 512 households with permanent water and sanitation services.

Mangaung Municipality Services 2012/13 Budget R’ 000 Land parcels serviced Kilometers of roads developed Servicing of land for affordable housing Kilometers of roads developed Community & Sport Facilities Servicing of land for social / rental housing Land parcels released for development Land parcels acquired from private sector Upgrading of Informal Settlements Disaster Management Municipal land secured for development Priorities addressed by City Plans Compact City Strategy Reduction of time for approvals % of capital budget financed through cash Electricity Total % spent on available funds variance R’ 000 % of variance spent 250, 809 59, 141 84, 094 99, 224 44, 233 8, 500 720 16, 747 100 86% 77% 75% 82% 59% 43% 50% 87% 0% 35, 420 13, 840 20, 848 18, 159 18, 191 4, 867 358 2, 135 100 14% 23% 25% 18% 41% 57% 50% 13% 100% 500 100% 10, 288 15, 000 1, 052 2, 000 20, 000 2, 137 614, 545 53% 74% 100% 83% 80% 309% 80% 4, 816 3, 867 0 342 4, 009 -4, 467 122, 985 47% 26% 0% 17% 20% -209% 20% 65

Non-Financial Performance - Mangaung • • 158 771 households were provided with bulk water and sanitation. 292 households assisted with VIP toilets. 20 km of roads surfaced. 2. 8 km roads graveled. 170 130 households were connected to electricity. 2 Landfills sites were services. 3 new townships established.

CITY OF JOBURG MUNICIPALITY Services Formalisation of Informal Settlements 2012/13 Adjusted Total Expenditure Budget % Spent on Available funds R’ 000 19, 502 1, 009, 523 988, 111 Street Lighting 88, 000 Mixed Rental / Hostel Upgrade Variance % of Variance R’ 000 100% 98% 21, 412 98% 88, 000 100% 51, 742 47, 542 92% 4, 200 92% Land Acquisition 54, 720 100% Upgradeof Community Hall, Libraries, & Sport fields 41, 700 40, 500 97% 1, 200 97% Upgrade of Clinics 27, 000 25, 681 95% 1, 319 95% Upgrade of Landfills 35, 000 18, 734 54% 16, 266 54% upgrade of Parks 40, 000 39, 842 100% 158 100% 97% 44, 555 97% Bulk Infrastructure: Water, Electriciyt, Roads & Stormwater Total 1, 367, 187 1, 322, 632 67

Non-financial Performance – City of Johannesburg • • • 4 055 units in informal settlements upgraded. 3 110 households provided with water services. 3 043 households provided with sanitation services. 570 VIPs provided. 1 532 households connected with electricity. 3 205 street lights provided. 2 km roads surfaced. 8 km road gravelled. 1 clinic built.

USDG Exp cont. . 69

Non-Financial Performance - Ekurhuleni • 6 748 housing units in informal settlements have been upgraded. • 3 360 housing sites serviced. • 61 hectares of land parcels acquired. • 612 households connected with electricity. • 49 high mast lighting provided. • 7 850 street lights replaced.

USDG Exp cont. . 71

Non-financial Performance – e. Thekwini • • • 2 762 units provided with fully subsidised houses. 4 019 households provided with bulk sanitation. 2 ablution facilities provided in informal settlements. 2 129 households provided with water connections. 4 019 households provided with electricity connections.

City of Cape Town Municipality Departments 2012/13 Adjusted Budget Total Expenditure % of spending Variance Electricity 175, 807 170, 873 97% 4, 934 Solid Waste Services Water Services Parks Sport, Recreation and Amenities Library and Information Services Roads and Stormwater Transport City Health Existing Settlements New Settlements Land Forward Planning 50, 000 195, 836 33, 530 70, 401 1, 840 213, 343 2, 376 10, 700 26, 508 158, 478 24, 855 50, 000 171, 295 32, 625 70, 330 0 203, 182 1, 532 10, 545 16, 404 144, 924 18, 359 100% 87% 97% 100% 0% 95% 64% 99% 62% 91% 74% 0 24, 541 905 71 1, 840 10, 161 844 155 10, 104 13, 554 6, 496 21, 029 19, 255 92% 1, 774 1, 650 922 987, 275 1149 890 911, 363 70% 97% 92% 501 32 75, 912 Pre-planning & Project Management Fees 32, 074 29, 097 91% 2, 977 Province Allocation 23, 500 36111 154% -12, 611 1, 042, 849 976, 571 94% 66, 278 Urbanisation (incl in-situ upgrades) Urban Renewal Programme Social and ECD Total Capital Total 73

Non-financial Performance – City of Cape Town • 6 394 sites serviced. • 204 households provided with solid waste removal. • 446 households connected with electricity. • 626 taps provided. • 8 035 VIP toilets provided.

USDG Exp at 30 September 2013 (Prelim). . 75

Interventions • Letters were written to National Treasury, BCM and Mangaung informing them of the intention to withhold the first tranche payment of BCM and Mangaung. • PMU has conducted project readiness in order to identify projects pipelines ready for implementation in order to re-allocate unspent funds where there is a need. • The Department visited EC province and BCM to discuss the under spending by BCM. Projects were assessed for readiness in order to ensure that there is no under spending. 76

Interventions • Meeting with Mangaung on 09 September 2013 discussing the performance and the future of the withheld transfer. • The quarterly performance reviews are conducted with the Metros. • The Department has entered into a Memorandum of Understanding with the City Support Programme to assist with capacity constraints where needed. 77

Interventions • The Performance Matrix were sent to the Metros. • Definition of indicators were finalized and sent to the Metros. • Engagements on the finalization of the USDG policy. 78

PERFORMANCE IMPROVEMENT / REMEDIAL MEASURES • Integration of planning, risk management, budgeting and reporting processes. • Development of prolonged multi-media campaign. • Compulsory training on Bid specifications, evaluations and adjudication from the level of Assistant Director and upwards • Address challenges relating to inter -governmental collaborations as they impact on policy development processes and service delivery • Development and implementation of appropriate systems and controls to monitor contracts performance 79

PERFORMANCE IMPROVEMENT / REMEDIAL MEASURES • Improve compliance by Provincial Departments and usefulness of HSS data • Provision of capacity where required (e. g. a fully functional International Relations Directorate and IGR and Stakeholder Forums co-ordination unit). • Sufficient monitoring presence in Provinces and Metros to reduce turnaround time in collection of information on performance • Approved guidelines to standardise and guide the implementation of PHP across the sector 80

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