PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE

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PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL
EXPENDITURE 2nd QUARTER 2006/2007

• Presented By Ms MB MONAMA
• 24 NOVEMBER 2006

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CONTENT

1. Departmental priorities till 2008/9
2. Data trends, allocations and expenditure
3. Budget Allocations
4. Second Quarter Expenditure Profile
5. MTEF Budget Allocation
6. Overview of the organisational environment
7. Constraints hampering delivery
8. Interventions to deal with challenges
9. Monitoring and Evaluation
10. Conclusion

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DEPARTMENTAL PRIORITIES TILL 2008/9

• The Department of Housing has refocused its plan
  and the following has been prioritised
• Formalisation and Eradication of Informal
  Settlement
• Development of Social and Mixed Income
  Settlements
• Regeneration of Twenty Old established Townships
• Affordable Rental Accommodation
• Urban Regeneration

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DEPARTMENTAL PRIORITIES TILL 2008/9 (Cont)

• This will be achieved through
• Fast tracking of top structure delivery
• Provision of Housing in targeted areas in line
  with Growth and Development Strategy and Global
  City Region approach.
• Renewal of 20 prioritised townships
• Social Housing program to be refocused to include
  affordable rental low and middle income earners
• Job Creation through housing development
• SMME/ BBBEE - Empowerment and Participation

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Trend in Allocations, Transfers and Actual
Expenditure i.r.o. Conditional Grant
Name of Conditional Grant Amount Transferred 2005/06 R000 Planned Transfers 2006/07 R000 Planned Transfers 2nd Quarter R000 Actual Transfers 2nd Quarter R000 Actual Expenditure 2nd Quarter R'000 Deviation from target
Name of Conditional Grant Amount Transferred 2005/06 R000 Planned Transfers 2006/07 R000 Planned Transfers 2nd Quarter R000 Actual Transfers 2nd Quarter R000 Actual Expenditure 2nd Quarter R'000 Deviation from target
Housing Fund 1,117,463 1,757,666 510,822 510,822 468,644 -8
Human Settlement 30,353 0 0 0 0 0
Land Distribution Alexandra 6,335 8,000 0 0 0 0
TOTAL 1,154,151 1,765,666 510,822 510,822 468,644 -8
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Trend in Allocations, Transfers and Actual
Expenditure i.r.o. Conditional Grant
Name of Conditional Grant Planned Transfers 2006/07 R000 Planned Transfers 2nd Quarter R000 Actual Transfers 2nd Quarter R000 Actual Expenditure 2nd Quarter R'000 Deviation from target
Name of Conditional Grant Planned Transfers 2006/07 R000 Planned Transfers 2nd Quarter R000 Actual Transfers 2nd Quarter R000 Actual Expenditure 2nd Quarter R'000 Deviation from target
Housing Fund 1,757,666 510,822 510,822 468,644 -8
Land Distribution Alexandra 8,000 0 0 0 0
TOTAL 1,765,666 510,822 510,822 468,644 -8
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YEAR TO DATE EXPENDITURE
Programmes Payments Audited 2005/06 R000 Projected Payments 2006/07 (R000) Projected Payments 2nd quarter (R000) Actual Payments 2nd quarter (R000) Deviation from target
Administration 78.017 74,918 20 727 28 727 138
Housing Planning and Research 7,513 10,284 2 486 2 004 81
Housing Performance/ Subsidy Programme 1,195,267 1,550,152 399 816 399 417 99,9
Urban Renewal and Housing Settlement Redevelopment 326,992 380,630 92 625 44 543 48
Housing Asset management 65,513 65,478 16 206 61 029 499,9
Total 1,673,302 2.081,462 531 860 535 720 100,7
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Conditional Grant/s and Capital Expenditure

• Data on trends in allocations, transfers and
  actual expenditure of conditional grants and
  capital expenditure of the Department as well as
  a brief assessment on this departments monitoring
  capacity for the financial year 2006/07 is
  captured in the next few slides i.t.o. a tabular
  format.

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BUDGET ALLOCATION (2006/2007)

• Particulars of the financial resources available
  funding of the activities of the Department are
  summarized in the Table hereunder

Particulars Amount R000 Total R000
Integrated Housing and Human Settlement Conditional Grant Note 1 Provincial Allocation for Urban Renewal Note 2 Administration Note 3 Goods, Services Machinery Note 4 1 765 666 191 500 87 150 37 146 1 765 666 191 500 124 296
Total IHHSCG, Dedicated Operational Budget Total IHHSCG, Dedicated Operational Budget 2 081 462

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BUDGET ALLOCATION (2006/2007) cont.

• Note 1 This represents the capital allocation to
  the Gauteng Housing Department in terms of the
  Division of Revenue Act DORA for the funding
  of the implementation of National Housing
  Programmes and Provincial Housing consistent
  therewith
• Note 2 This is an allocation from the Provincial
  Revenue Funds towards the funding of the Urban
  Renewal Programme in Gauteng Province.
• Note 3 An allocation with the Operational
  Budget of the Department for the funding of
  compensation of employees during the 2006/07
  financial year.
• Note 4 The available funding for expenditure in
  terms of Goods Services with the Operational
  Budget of the Department.

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Second Quarter Expenditure Profile 2006/2007
Conditional Grant
GRANT BUDGET Projected Expenditure Actual Expenditure Variance
Integrated Housing and Human Settlement Development 1,757,666 510,822 468,644 42,178
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Second Quarter Expenditure Profile 2006/2007
cont.
Current and Capital Expenditure
Economic Classification Budget Projected Expenditure Actual Expenditure Variance
Compensation of employees 93,378 24,215 24,055 160
Goods and Services 32,700 7,907 11,749 -3,842
Buildings and other fixed structures 53,925 13,580 8,977 4,603
Machinery and equipment 4,446 2,077 302 1,775
184,449 47,779 45,083 2,696
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Second Quarter Expenditure Profile 2006/2007
cont.
Urban Renewal
GRANT BUDGET Projected Expenditure Actual Expenditure Variance
Urban Renewal 369,433 89,787 42,930 46,857
Payments made for projects that concerned
previous financial year
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Service Delivery Statistics for the 2nd Quarter
of the2006/07 Financial Year
Programme Unit of Measure Projected Actual delivery
Essential Services Houses - 693
Essential Services Stands 3,287 10, 433
PHP / CBP Houses 1,935 450
Project Linked Stands 1, 340 2.573
Project Linked Houses 4,627 4,155
Individual Stands 877 112
Individual Houses 877 112
Relocation assistance Stands 17 7
Relocation assistance Houses 17 7
Upgrading of Hostels Beds 1.100 264
TOTAL STANDS 5,521 13,125
TOTAL HOUSES 7,403 5,417
TOTAL BEDS 18,697 2 790
Institutional Subsidies units 605 -

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Reasons for Variance

• A deliberation of the reasons for the variance
  in expenditure in comparison the allocation In
  terms of DORA is as follows
• Certified Claims to the value of R 32 million for
  work completed during and prior to 30 September
  2006 could not be paid in time and had to be
  effected in October 2006 of which should have
  been accounted for in terms of actual expenditure
  incurred during the 2nd Quarter.
• Similarly, an amount of R30 Million of which was
  accounted for during the seconded quarter of
  which relate to the 1st quarter.

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Payment Summary MTEF Baseline 07/10
Medium-Term Estimates Medium-Term Estimates Medium-Term Estimates
PROGRAMME  2007/08  2008/09  2009/10
1. Administration 84,595 91,770 91,770
2. Housing Planning and Research 12,432 12,154 12,154
3. Housing Development Implementation 2,361,356 2,562,652 2,562,652
4. Housing Property Management 62,149 61,869 61,869
Total Programmers 2,520,532 2,728,445 2,728,445
Economic Classification      
Compensation of Employees 127,513 134,366 134,366
Goods Services 39,573 44,369 44,369
Households 2,387,223 2,589,079 2,589,079
Machinery Equipment 5,796 5,000 5,000
Total 2,520,532 2,728,445 2,728,445
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Overview of the organisational environment

• During the second quarter the Department
  implemented its revised organisational
  structure.
• The implementation of its Regional Offices took
  effect in terms of negotiations around the office
  accommodation and other related infrastructure
  requirements, had taken place.
• The Department has rearranged its expenditure
  management processes and delegations have been
  finalised.
• Newly appointed Professional Resource Teams
  (PRTs) to replace the Regional Professional
  Teams whose contract ended on the 30th of June
  2006 had been finalised.
• Regrouping of established developers and improve
  on the procurement system.
• The Department also appointed contractors on the
  procurement rooster who will assist in
  implementing projects. The contractors have been
  appointed in two categories which are the
  established and emerging contractors

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Constraints hampering delivery

• Submission of insufficient information and
  supporting documents for payments
• Fast track the enrolment of projects with NHBRC
• Improvement of contract management processes
• Submission of trench payments by Municipalities
  on quarterly basis.
• Improvement of house inspections by the
  Department and Municipal inspectors
• Improvement of quality as well as meeting
  specified targets by contractors and developers.
• Slow pace of delivery by emerging developers
• Inability to provide guarantees by appointed
  developers and contractors within specified time
  frames
• Dealing with illegal land and buildings invasions
• Inability of municipalities to implement by Laws
  to deal with erection of illegal structures in
  newly built subsidized houses.

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Interventions to deal with challenges

• Established a task team with NHBRC to deal with
  approvals change information on weekly basis on
  all projects submitted and feedback on those
  approves and not approved.
• Established an Inspectorate within department to
  deal with quality issues as well as inspecting of
  houses regularly
• Established working protocols between department,
  municipalities and NHBRC inspectors to coordinate
  and manage inspections process
• Regular site visits by Project Managers and
  Senior Managers to deal with identified
  challenges per project
• Provided professional support to emerging
  developers to be mentored
• Simplified payment process drafted and
  improvement now realised
• Interaction with Executive Directors of Housing
  to agree on payment processes and service
  delivery improvement mechanisms for each
  Municipality.
• Executive Management monitoring projects and able
  to shift budget on slow project in favor of those
  best performing.

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Monitoring and Evaluation

• A Monitoring and Evaluation Unit has been
  established to evaluating progress in the
  implementation of the strategy against the
  targets set.
• It will further recommend intervention mechanisms
  in areas where there is little or no progress.
• A draft monitoring and evaluation framework has
  been developed and will be finalised by end of
  financial year 2006/07.
• Departments submits various reports as prescribed
  by the PMFA to various institutions such as
  Provincial Treasury and Legislature.

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Conclusion

• Our delivery processes are starting to yield
  results and there's hope amongst communities that
  government is addressing housing their needs.
• We are putting proper plans and re-prioritizing
  our approach that must always adhere to the
  principles of the Breaking New Ground policy.
• Better coordination with municipalities and
  developers
• Improved management and monitoring systems within
  the Department
• Department providing leadership and guidance in
  all aspects of housing development
• Political support from all spheres of govrnment

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THANK YOU