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

1. PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE – 2nd QUARTER 2006/2007 Presented By Ms MB MONAMA 24 NOVEMBER 2006

2. CONTENT • Departmental priorities till 2008/9 • Data trends, allocations and expenditure • Budget Allocations • Second Quarter Expenditure Profile • MTEF Budget Allocation • Overview of the organisational environment • Constraints hampering delivery • Interventions to deal with challenges • Monitoring and Evaluation • Conclusion

3. 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

4. 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

5. Trend in Allocations, Transfers and Actual Expenditure i.r.o. Conditional Grant

6. Trend in Allocations, Transfers and Actual Expenditure i.r.o. Conditional Grant

7. YEAR TO DATE EXPENDITURE

8. 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.

9. BUDGET ALLOCATION (2006/2007) Particulars of the financial resources available funding of the activities of the Department are summarized in the Table hereunder:

10. 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.

11. Second Quarter Expenditure Profile: 2006/2007 Conditional Grant

12. Second Quarter Expenditure Profile: 2006/2007 cont. Current and Capital Expenditure

13. Second Quarter Expenditure Profile: 2006/2007 cont. Urban Renewal Payments made for projects that concerned previous financial year

14. Service Delivery Statistics for the 2nd Quarter of the2006/07 Financial Year

15. 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.

16. Payment Summary – MTEF Baseline 07/10

17. Overview of the organisational environment • During the second quarter the Department implemented it’s revised organisational structure. • The implementation of it’s 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 (PRT’s) to replace the Regional Professional Team’s 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

18. 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.

19. 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.

20. 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.

21. 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

22. THANK YOU