DEPARTMENT OF HUMAN SETTLEMENTS 1 DEPARTMENT OF HUMAN SETTLEMENTS FREE STATE PROVINCE VOTE NO. 13 ANNUAL REPORT 2013/2014 FINANCIAL YEAR

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1 DEPARTMENT OF HUMAN SETTLEMENTS 1 DEPARTMENT OF HUMAN SETTLEMENTS FREE STATE PROVINCE VOTE NO. 13 ANNUAL REPORT 2013/2014 FINANCIAL YEAR

2 Annual Report Contents PART A: GENERAL INFORMATION 1. GENERAL INFORMATION 6 2. LIST OF ABBREVIATIONS / ACRONYMS 7 3. FOREWORD BY THE EXECUTIVE AUTHORITY 8 4. REPORT OF THE ACCOUNTING OFFICER 9 5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY OF THE ANNUAL REPORT STRATEGIC OVERVIEW LEGISLATIVE AND OTHER MANDATES Constitutional Mandate Legislative and other Mandates Policy Mandates ORGANIZATIONAL STRUCTURE AS AT 31 MARCH ENTITIES REPORTING TO THE EXECUTIVE AUTHORITY 23 PART B: PERFORMANCE INFORMATION 24 1 AUDITOR GENERAL S REPORT: PREDETERMINED OBJECTIVES OVERVIEW OF DEPARTMENTAL PERFORMANCE Service Delivery Environment Service Delivery Improvement Plan Organizational Environment Key Policy Developments and Legislative Changes STRATEGIC OUTCOMEORIENTED GOALS Goal 1: Creation of a Department geared towards service excellence Goal 2: Improved housing delivery planning Goal 3: Management of housing interventions Goal 4: Management of housing assets and Extended Enhanced Discount Benefit Scheme (EEDBS) PERFORMANCE INFORMATION BY PROGRAMME Programme 1: Administration Programme 2: Housing needs, research and planning 45

3 DEPARTMENT OF HUMAN SETTLEMENTS Programme 3: Housing development Programme 4: Housing assets management and property management TRANSFER PAYMENTS Transfer Payments to Public Entities Transfer Payments to all Organizations other than Public Entities CONDITIONAL GRANTS DONOR FUNDS Donor Funds Received CAPITAL INVESTMENT Capital Investment, Maintenance and Asset Management Plan 58 PART C: GOVERNANCE INTRODUCTION RISK MANAGEMENT FRAUD AND CORRUPTION MINIMISING CONFLICT OF INTEREST CODE OF CONDUCT HEALTH, SAFETY AND ENVIRONMENTAL ISSUES PORTFOLIO COMMITTEES PROPAC RESOLUTIONS PRIOR MODIFICATIONS TO AUDIT REPORTS INTERNAL CONTROL UNIT INTERNAL AUDIT AND AUDIT COMMITTEES REPORT OF THE AUDIT COMMITTEE 69 PART D: HUMAN RESOURCES MANAGEMENT OVERVIEW OF HUMAN RESOURCES POLICY DEVELOPMENT HUMAN RESOURCES OVERSIGHT STATISTICS Personnel related expenditure 75

4 Annual Report 3.2 Employment and Vacancies Filling of SMS Posts Job Evaluation Employment Changes Employment Equity Signing of Performance Agreements by SMS Members Performance Rewards Leave Utilization HIV/AIDS and Health Promotion Programmes Labour Relations Skills Development Injury on Duty Utilization of Consultants Severance Packages Foreign Workers 99 PART E: FINANCIAL INFORMATION REPORT OF THE AUDITORGENERAL ANNUAL FINANCIAL STATEMENTS 109 APPROPRIATION STATEMENT 109 NOTES TO THE APPROPRIATION STATEMENT 119 STATEMENT OF FINANCIAL PERFORMANCE 121 STATEMENT OF FINANCIAL POSITION 122 STATEMENT OF CHANGES IN NET ASSETS 123 CASH FLOW STATEMENT 124 ACCOUNTING POLICIES 125 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 131 ANNEXURES 160

5 DEPARTMENT OF HUMAN SETTLEMENTS 5 PART A: GENERAL INFORMATION

6 Annual Report 1. GENERAL INFORMATION Name of the Department Human Settlements Physical Address Lebohang Building 7 th Floor Cnr St. Andrews and Markgraaff Streets Bloemfontein Free State 9301 Postal Address P.O. Box 211 Bloemfontein 9300 Contact Telephone Numbers Head of Department: Chief Financial Officer: Chief Director: Corporate Services: Address Head of Department: hodhs@fshs.gov.za Chief Financial Officer: cfo@fshs.gov.za Chief Director: Corporate Services: tsekiso@fshs.gov.za Website Address

7 DEPARTMENT OF HUMAN SETTLEMENTS 7 2. LIST OF ABBREVIATIONS/ACRONYMS AG AO BBBEE CFO MEC HOD PFMA TR MTEF SMME SCM EU SITA SDIP FMPPI MTEF MTSF SITA SMME M&E MPAT GSRB SCM FPP SMAC EEDBS AuditorGeneral Accounting Officer Broad Based Black Economic Empowerment Chief Financial Officer Member of Executive Council Head of Department Public Finance Management Act Treasury Regulations Medium Term Expenditure Framework Small Medium and Micro Enterprises Supply Chain Management European Union State Information Technology Agency Service Delivery Improvement Plan Framework for Managing Programme Performance Information Medium Term Expenditure Framework Medium Terms Strategic Framework State Information Technology Agency Small Medium and Micro Enterprises Monitoring and Evaluation Management Performance Assessment Tool Gender Sensitive Rights Based Supply Chain Management Fraud Prevention Plan Security Management and AntiCorruption Enhanced Extended Discount Benefit Scheme

8 Annual Report 3. FOREWORD BY THE EXECUTIVE AUTHORITY One of the basic elements of a stable and progressive society is steady homes and communities, which in return nurture welladjusted and productive people who contribute to the well being and progression of their society. These ideal homes, in a democratic society, are established in human settlements that conform to basic human rights. The standard that was set by the Freedom Charter that All people shall have the right to live where they choose, be decently housed, and bring up their families in comfort and security, is relevant in this context. The corner stone of our responsibility is to provide integrated and sustainable human settlements in the province, towards ensuring a better life for all as stipulated in Outcome 8: Sustainable human settlements and improved quality of household life. We have in the past 20 years evolved in our provision of human settlements; from providing housing as a unit to building human settlements that include infrastructure and basic services. Working in an integrated manner together with other government sectors, we included other amenities that make up complete human settlements clinics, schools, roads, multi purpose community halls etc. Our houses have also changed from smaller units to the current 50m² as a MEC S.M. MLAMLELI standard basic size with various designs that express individuality. In our quest to provide our people with homes, we have also acquired land for human settlement in which our people have been decently housed and many settlements today bear a testimony that we have not diverged from our vision and have indeed restored the dignity of many of our people who today live in their own homes with pride. The Free State government remains committed to the provision of decent shelter and settlements wherein people have access to clean water and proper sanitation. As a collective, we remain committed to accelerating the delivery of housing as a key strategy for poverty alleviation and utilizing the provision of housing as one of the major job creation strategies and economic development. We have also successfully used human settlements development to address other socio economic and sustainability issues such as skills development, economic development, women and youth empowerment as well as overall redressing of the imbalances of the past. Despite numerous challenges, the department continued to work steadily on its quest to provide decent housing to deserving Free State citizens. To mention some of our successes: Lowincome affordable housing units were constructed. Deeds of transfer were registered in favour of the qualifying beneficiaries. Erven were planned and surveyed for human settlements development purposes. Municipalities were supported for level 1 accreditation, while the Mangaung Metro was supported for level 3 accreditation. Households in newly formalized areas were provided with access to basic water and sanitation. Former mining hostels that that served the migrant labour system and deprived our people of dignity, resulting in segregated familes, were reconstructed into family units of up to three bedrooms. We have also successfully built Social Housing and Rental Units, as well as Community Residential Units that offer affordable alternative accommodation for lowincome earners who would rather rent than buy houses or cannot afford to buy. These are well located within reach of places of employment, schools and hospitals and other services. Our journey has been long and challenging, but with each year our vision, shaped by the needs of our people and the country s National Development Plan Vision 2030 for providing decent human settlements has grown sharper and more focused resulting in improved homes each time. Our people are happy and proud owners of decent homes, and we have indeed ensured that these live in comfort and security. Our commitment: we will continue to work hard to improve our performance for the benefit of our people for together we can do more, and, together we move South Africa forward! MEC SM MLAMLELI MEMBER OF THE EXECUTIVE COUNCIL

9 DEPARTMENT OF HUMAN SETTLEMENTS 9 4. REPORT OF THE ACCOUNTING OFFICER 1. OVERVIEW BY THE ACCOUNTING OFFICER In the 20 years of democracy in South Africa, we have moved significantly from previous limited and stereotyped approaches to the provision of housing to the holistic development of integrated human settlements in alignment with the Millennium Development Goals and the overall developmental objectives of the country. This approach has been holistic, ensuring that we undo the apartheid legacy of distorted spatial planning which disadvantaged our people economically, and implement strategic underdevelopment of human settlements that is meant to address overall needs of our people. With the integrated approach to human settlements development, much has been achieved in providing infrastructure for basic services to address the provision of water, roads, sanitation and electricity supply. In an effort to stimulate the entire residential property market, the Human Settlements MINMEC as well as the Cabinet approved the Comprehensive Plan for the development of Sustainable Humans Settlements popularly known as the Breaking New Ground (BNG) plan on 2 September This plan was underpinned by the following objectives: HOD: MR NTHIMOTSE TIM MOKHESI Stimulation of residential property market Spatial restructuring and integration Social (medium density) housing Informal Settlements Upgrading Institutional Reform and Capacity Building Housing Subsidy Funding System Reforms Job creation and poverty alleviation Exploration of alternative building technologies (ABT) Several pilot projects were implemented under each of these objectives following the four main interventions as enshrined in the 2009 National Housing Code. Within this broader vision, the department is committed to meeting the following specific objectives. Accelerating the provision of housing as a key strategy for poverty alleviation Utilizing provision of housing as a major job creation strategy Ensuring that property can be accessed by all as an asset for wealth creation and empowerment Leveraging growth in the economy Combating crime, promoting social cohesion and improving quality of life for the poor Supporting the functionality of the entire single residential property market to reduce duality within the sector by breaking the barriers between the first economy residential property boom and the second economy slump. Utilizing housing as an instrument for the development of sustainable human settlements, in support of spatial restructuring. In 2009, the Presidency introduced the Outcome Based approach to the implementation of the Medium Term Strategic Framework that embodied the five priorities of the ruling party for the elective cycle. The Human Settlements sector was assigned the role and responsibility of implementing and championing Outcome 8: Sustainable Human Settlements and Improved Quality of Household Life. Consequently, the National Minister and the MECs signed a delivery agreement in 2009 in which the province through the MEC committed itself for the to:

10 Annual Report Upgrade households in welllocated informal settlements with access to basic services and security tenure. Develop welllocated and affordably priced rental accommodation Accredit 1 Metropolitan Municipality Expand the National Upgrading Support Programme to six municipalities. The above commitments are an integral part of the four Outputs that characterise Outcome 8 namely: Output 1: Accelerated Delivery of Housing Opportunities Output 2:Improve access to sanitation in newlyformalized areas Output 3: Mobilization of welllocated public land for lowincome and affordable housing Output 4: Improved Property Market The extent to which Outcome 8 has been achieved to date is reflected in the attached reporting template (per target per output). Overall progress against each of the Outputs is hence provided below: Output 1: Accelerated Delivery of Housing Opportunities Metric Actual Performance 2013/2014 Planned Target Construction of 26,400 (target set for FS) affordable housing units in prioritized areas : Military Veterans 0 10 Teachers in farm areas 6 19 Dilapidated houses BNG (106 projects) days of activism, women s build, youth build Emergency housing PHP houses 0 0 Incomplete houses Land restitution houses Rural and Farm Worker houses (Teachers in farm) 6 0 Enhanced Extended Discount Benefit Scheme(EEDBS) Act 81 of Act 107 of No. of erven planned and surveyed No. of municipalities targeted for the expansion of the National Upgrading Support Programme 6 6

11 DEPARTMENT OF HUMAN SETTLEMENTS 11 No. of municipalities accredited: Metric Actual Performance 2013/2014 Planned Target 1 Level 1 1(Metro) Level 2 Level 3 No. of CRU units approved and upgraded Matjhabeng Metsimaholo Mangaung No. of new affordable rental units delivered through Social Housing : (Brandwag) Phase Phase 2 Phase Output 2: Improve access to sanitation in newlyformalized areas Metric Actual Performance 2013/2014 Planned Target No. of Households provided with access to a basic level of sanitation Km of streets constructed in newlyformalized areas 5km 1 Km No. and type of social amenities constructed 1 2 Output 3: Mobilization of welllocated public land for lowincome and affordable housing Metric Actual Performance 2013/2014 Planned Target No. of parcels of land identified and transferred to municipalities for development purposes 5 11 Output 4: Improved Property Market Metric Actual Performance 2013/2014 Planned Target Finance Linked Individual Subsidy Programme (FLISP) Information on Predetermined Objectives The department s Monitoring and Evaluation continues to interrogate the performance information. Information submitted has to be supported by credible evidence. The targets can either be achieved or not achieved. Directorates are required to put in place remedial action to ensure that the targets are met. During the year under review, the directorates worked closely with the Monitoring and Evaluation unit assisted by the appointed consultants to interrogate evidence on performance for validity, accuracy and completeness in order to be satisfied that the evidence is a true reflection of the performance recorded. This process has yielded a notable improvement in the monitoring of the departments performance.

12 Annual Report Financial Management The department saw an increase of 36% on the Annual Appropriation for the financial year 2013/2014 compared to 2012/2013. The allocation of the appropriated funds was informed by the priorities of the strategic objectives in each of the four programmes. Overall financial performance achieved by the department stand at 99.8% of the annual budget. This reflects an improvement 1.7% as compared to the previous year. The individual performance per programme is highlighted below. The department met its financial statutory reporting requirements, including the submission of Procurement Plan, In Year Monitoring Schedules, Key Control Matrix and other reporting requirements by the Provincial Treasury. The implementation of the cost containment measures contributed in the department realising a saving and achieving 0.2% variance on its appropriated budget. The department has prepared the Annual Financial Statements in accordance with Modified Cash Standard. There were no exceptions noted. The department has summarised the critical aspects on the financial performance of the department for the year ended 31 March The aim is to bring to attention those matters that the department believes are critical in the assessment and the reading of the department s Annual Financial Statements. Overview of 2013/2014 Appropriation Prgramme Final Appropriation Actual Expendiutre Expenditure as Variance % of final Appropriation R'000 R'000 R'000 % 1. Administration % 2. Housing Needs, Research and Planning % 3. Housing Development % 4. Housing Assets Management % Total %

13 DEPARTMENT OF HUMAN SETTLEMENTS 13 Prgramme Final Appropriation Expenditure Actual Expendiutre Variance as % of final Appropriati R'000 R'000 R'000 % Current Payments % Compensation of employees % Goods and Services % Interest & Rent on Land % 0% Transfer and Subsidies % Higher Education Institutions Household % Gifts & Equipment % 0% Payments for Capital Assets % Machinery and Equipment % 0% Payments for Financial Assets % 0% TOTAL % Departmental Receipts 2013/ /2013 Departmental receipts Estimate Actual Amount Collected (Over)/Under Collection Estimate Actual Amount Collected (Over)/Under Collection R 000 R 000 R 000 R 000 R 000 R 000 Sale of goods and services other than capital assets (224) (5) Interest, dividends and rent on land Financial transactions in assets and liabilities (4) (207) (107) Total (435)

14 Annual Report Programme Expenditure 2013/ /2013 Programme Name Final Appropriation Actual Expenditure (Over)/ Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Administration Housing needs, research and plan Housing development Housing assets, prop management Total Virements/rollovers Programme Adjusted Appropriation 2013/2014 Virement Shift Rollover Final Appropriation 2013/2014 R'000 R'000 R'000 R'000 R'000 ADMINISTRATION 65,789 2,883 68,672 HOD 5, ,253 FINANCIAL MANAGEMENT 26,042 2,883 1,164 30,089 INTERNAL AUDIT 4,189 1,454 2,735 ANTICORRUPTION & SECURITY ,281 PROGRAMME MANAGEMENT(DDG) 2,614 2, HUMAN RESOURCE MANAGEMENT 4,631 3, PROGRAMME MANAGEMENT(CS) 7,562 6,214 13,776 PROGRAMME MANAGEMENT(FM) 1, ,195 INFORMATION MANAGEMENT & AUS 2, ,878 LEGAL & CONTRACT SERVICES 4,025 1,698 5,723 SUPPLY CHAIN MANAGEMENT 5,887 1,483 4,404 HOUSING ASSETS MANG,PROP MNG 13, ,194 PROGRAMME MANAGEMENT (HDPM) 2, ,225 HOUSING DEV PLAN & PERF MONI 2, ,686 INFORMAL SETTLEMENTS & LAND T 2, ,080 STAKEHOLDERS & PARTNERSHIP 5, ,203 HOUSING DEVELOPMENT 1,403,845 2,551 1,401,294 PROGRAMME MANAGEMENT(HPERFM) 1, TECHNICAL SERVICES 7, ,228 1,802 HOUSING PROJECT PLAN & MANAGEMENT 3,656 1, PROGRAMME MANAGEMENT (HPROGM) 1, ,530 PROGRAM DESIGN & ALLOCATION 11, ,206 18,685 PRIORITY & INTERVENTION 5, ,067 AFFORDABLE HOUSING PROGRA 1, ,016 INFORMATION MANAGEMENT & AUS DISTRICTS OFFICES 19, ,171 HUMEN SETTLEMENTS DEV GRANT(HSDG) 1,350,936 1,350,936 HOUSING ASSETS MANG,PROP MNG 1, ,007 ADMINISTRATION 1, ,007 Grand Total 1,484,167 1,484,167

15 DEPARTMENT OF HUMAN SETTLEMENTS 15 The department underwent a process of reprioritisation of its budget. The department therefore performed the budget virements, which were all within the prescribed 8%, as per the PFMA and Treasury Regulations. The details of the virements are as follows: Programme 1 (Administration) received an amount of R2.883 million to relieve pressure on compensation of employees and goods and services. Programme 2 (Housing Needs, Research & Planning) identified a saving on the compensation of employees and goods & services amounting to R million to avoid excess over expenditure in programme 1 (Administration). Programme 3 (Housing Development ) effected an amount of R million as a virement to defray excess expenditure on compensation of employees and goods and service on programme 1 (Administration). The amount of R0.87 million was affected as a virement from programme 4 (Housing Asset Management) to defray excess expenditure on programme 1 (Administration). Fruitless and wasteful expenditure R was incurred by the department during the year under review as Fruitless and Wasteful expenditure bringing the total to R This expenditure resulted from interest that was charged on overdue accounts by suppliers and a payment of value added tax to a nonvalue added tax vendor. These cases identified were reported to Provincial Treasury during the year and are currently under further investigation There has been irregular expenditure identified in the financial year to the amount of R The majority of this was due to the correct process not being followed for the procurement and allocation of the housing grant. According to the Housing code, the various programmes give guidance on formulating the housing chapters of the Integrated Development Plan and this relates to the local housing policy formulation and development goals as set out by the Housing act. As the procurement is carried out by the department, each element of the department s applicable legislation needs to be adhered to ensure the procurement is regular and this has not been the case. Public Private Partnerships The department did not pursue any public/private partnership during the financial year ended 31 March Supply Chain Management (SCM) A system has been put in place to prevent fruitless and wasteful expenditure and encompasses the following: A contractors database to ensure that housing contracts fully complies with due SCM processes. A register of transactions is kept where SCM processes are not followed. A register to ensure that all irregular expenditures are duly recorded and disclosed accordingly in the Annual Financial Statements (AFS) A checklist has been developed to ensure that irregular expenditures are identified and detected. Challenges experienced by SCM and remedial strategy Upon separation of the two departments, Cooperative Governance and Traditional Affairs (COGTA) and Human Settlements, some posts remained vacant and unfunded. As a result, proper segregation of duties was compromised and the major SCM competencies were not performed optimally such as contract management, acquisition and logistics. However, the latter is waiting funding for filling of identified critical posts to ensure that the unit is fully functional. Gifts and Donations received in kind from nonrelated parties E tsho Civils: Donated R for the Govan Mbeki Awards

16 Annual Report NHBRC: sponsored vouchers at Lillies Sales & Service to the tune of R Housing Development Agency (HDA): sponsored three Mini Ipads worth R NURCHA: sponsored 2 Laptops and 300 Laptop bags for R Exemptions and deviations received from the National Treasury The department did not apply for or receive any exemptions from the PFMA, or TR, or deviation from the reporting requirements for the current and previous financial years. Events after the reporting date No significant events occurred after the reporting date and before the date of approval of these Annual Financial Statements that require adjustment of, or disclosure in the Financial Statements. Policy and Procedure on Incapacity Leave and Illhealth Retirement (PILIR) The implementation of the Policy and Procedure on Incapacity Leave and ill health Retirement (PILIR) was suspended for part PILIR provides for the appointment of a Panel of Accredited Health Risk Managers, by the Department of Public Service and service providers available to a department to investigate and assess the applications made by employees. The appointment of providers was delayed due to a legal Challenge brought to the High Court against the appointment process. Therefore, for the financial year no timely decision could be made on the validity of the incapacity and/or ill health retirement applications received from employees. Although the Panel was formally established on 1 November 2013, there is a possibility that amounts paid to employees on incapacity and/or illhealth retirement may be recoverable if the applications, made in the first part of the financial year, are not subsequently recommended by the service providers. New or proposed activities No new or proposed activities were acquired by the department during the year under review. Acknowledgement I would like to express my sincere appreciation to all employees and other stakeholders of the department for their cooperation and hard work during the period under review. The successes achieved by the department during the period under review would not have been possible without their dedication and commitment. Conclusion Moving towards 2015, all outstanding and/or incomplete human settlement projects will be consolidated and completed, thereby ensuring that we provide adequate shelter to beneficiaries who have been waiting for their houses for a considerable time now. The department will also pilot alternative building Technologies and improve its Project Monitoring capacity. Approval and signoff I hereby submit the 2013/2014 Annual Report of the Department of Human Settlements in terms of the Public Finance Management Act, Nthimotse Tim Mokhesi Head of Department 30 AUGUST 2014

17 DEPARTMENT OF HUMAN SETTLEMENTS STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY OF THE ANNUAL REPORT To the best of my knowledge and belief, I confirm the following: a) All information and amounts disclosed throughout the annual report are consistent. b) The annual report is complete, accurate and is free from any omissions. c) The annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury. d) The Annual Financial Statements (Part E) have been prepared in accordance with the modified cash standard and the relevant frameworks and guidelines issued by the National Treasury. In my opinion, the annual report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the department for the financial year ended 31 March Yours faithfully Nthimotse Tim Mokhesi ACCOUNTING OFFICER 30 AUGUST 2014

18 Annual Report 6. STRATEGIC OVERVIEW Vision Integrated and sustainable human settlements plan. Mission The department will develop cohesive, sustainable and integrated human settlements in the Free State values Values: The department s inherent values as informed by, amongst others, Batho Pele Principles are: Professionalism, Integrity and Leadership Value for money and Accountability Partnership Compassion and Empathy Restoration of Dignity and Resilience Environment Friendly 7. LEGISLATIVE AND OTHER MANDATES 7.1 Constitutional Mandate Section 26(1) of the Constitution of the Republic of South Africa (Act No 108 of 1996) provides that everyone has the right to have access to adequate housing and subsection (2) obligates and enjoins the state through the Department of Human Settlements to use legislative and other measures to ensure the progressive realisation of this right. The department has taken a strategic direction through this strategic plan to ensure that every Free State citizen does enjoy this constitutionally entrenched right. 7.2 Legislative and other mandates i. Public Finance Management Act No. 1 of 1999 (as amended by the Public Finance Management Amendment Act No. 29 of 1999) To regulate financial management in the national and provincial governments; to ensure that all revenue, expenditure, assets and liabilities of those governments are managed efficiently and effectively; to provide for the responsibility of persons entrusted with financial management in those governments; and provide for matters connected therewith. ii. Public Service Act, 1994 To provide for the organisation and administration of the public service of the Republic, the regulation of the conditions of employment, terms of office, discipline, retirement and discharge of members of the public service, and matters connected therewith. To amend the Public Service Act, 1994, so as to further define, to substitute or to delete certain expressions; to further regulate the application of the said Act; to provide for the readjustment of the functions of the Public Service Commission and the circumscription of the functions of the Minister for the Public Service and Administration and an executing authority; to make other provision in connection with the management, administration and functions of the South African Management and Development Institute and the administration of the Training Fund; to make further provision in connection with the implementation or limitation of actions affecting the public service or its members; to enable the said Minister to have access to certain documents and information; to make further provision in connection with the power of the President to

19 DEPARTMENT OF HUMAN SETTLEMENTS 19 amend Schedules 1 and 2 to the said Act; to make other provision in connection with the inclusion of posts in, or the exclusion of posts from, the A or B division; to make further provision in connection with appointments, promotions and transfers; to make further provision in connection with the discharge of officers; to further regulate inefficiency and misconduct; to further regulate the receipt of unauthorised remuneration; to make other provision in connection with the reduction of salaries of officers; to make further provision in connection with grievances of officers and employees; to empower the said Minister to make regulations; and to empower the said Minister to assign certain functions to officers or employees of his or her Department; and to repeal or to amend other laws relating to the public service so as to remove obsolete provisions or to effect certain consequential amendments arising from the readjustment of the functions of the said Commission; and to provide for incidental matters. iii. Skills Development Act, No. 97, 1998 To provide an institutional framework to devise and implement national, sector and workplace strategies to develop and improve the skills of the South African work force; to integrate those strategies within the National Qualifications Framework contemplated in the South African Qualifications Authority Act, 1995; to provide for Iearnerships that lead torecognised occupational qualifications; to provide for the financing of skills development by means of a levygrant scheme and a National Skills Fund; to provide for and regulate employment services; and to provide for matters connected therewith. iv. Labour Relations Act and Collective Agreement The Labour Relations Act and collective agreements shall regulate matters of mutual interest between employees and State as employer. v. Preferential Procurement Policy Framework Act No Act 5 of 2000 To regulate procurement of goods and services for the Department in compliance with section 217 of the Constitution by ensuring that all procurement processes are fair, transparent, equitable, competitive and cost effective vi. Division of Revenue Act To provide for the equitable division of revenue raised nationally among the national, provincial and local spheres of government for the 2010/2014 financial year; to provide for reporting requirements for allocations pursuant to such divisions; to provide for the withholding and the delaying of payments; to provide for liability for cost incurred in litigation in violation of the principles of cooperative governance and intergovernmental relations; and to provide for matters connected therewith. vii. Conversion of Certain Rights into Leaseholds or Ownership Act No. 81 of 1988 This Act provides for the conversion of certain rights of occupation issued to a holder of a site situated in a township whether such township has been formalized or not established under the now revoked Black Communities Act 4 of 1984, into leasehold or ownership. The Act therefore makes provision for the determination of affected sites or persons; an inquiry into affected sites; grievance (appeal) procedures; and the issuing of leaseholds or transfer of ownership. viii. Black Communities Development Act No. 4 of 1984 The Act was repealed save for Chapter 6 and the Regulations thereto. As will appear from the above paragraph, this Act is the principal Act 81 of 1988 and makes provision for the designation of certain areas as development areas and makes provision for township establishment. ix. Upgrading of Land Tenure Rights Act No. 112 of 1991 This Act makes provision for the upgrading of informal rights, viz., and the deeds of grant, leaseholds and quitrent title permission to occupy.

20 Annual Report x. Interim Protection of Informal Land Rights Act: This Act recognizes certain informal rights to land. One of the functions of the section is to resettle people who are unlawfully occupying land. In the process, it is incumbent on the section to ensure that the informal rights to land are recognized in the process of such resettlement. xi. The Housing Act No. 107 of 1997 Through this legislation, existing and future, and the Housing Code, the Department of Housing is carrying out its legislative imperative as set out in the Housing Act, Section 2 of the Housing Act, 1997 (Act No. 107 of 1997) compels all three spheres of government to give priority to the needs of the poor in respect of housing development (section 2(1)(a)). In addition all 3 spheres of government must ensure that housing development provides as wide a choice of housing and tenure options as is reasonably possible (ii) (iii) (iv) is economically, fiscally, socially and financially affordable and sustainable is based on integrated development planning is administered in a transparent, accountable and equitable manner, and upholds the practice of good governance (Section 2(1)(c)). xii. Prevention of Illegal Eviction from and Unlawful Occupation of Land Act of 1998 The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act was promulgated in The Act repeals the Prevention of Illegal Squatting Act No. 52 of 1951 and makes provision for a fair and equitable process to be followed when evicting people who have unlawfully invaded land, from their homes. The Act also makes it an offence to evict legally without due process of law. xiii. The Housing Consumers Protection Measures Act of 1998 The Act provides for the establishment of a statutory regulating body for homebuilders. The National Home Builders Registration Council will register every builder and regulate the home building industry by formulating and enforcing a code of conduct. The implementation of the Act is monitored continuously. xiv. The Rental Housing Act 50 of 1999 This Act repeals the Rent Control Act of 1976 and defines Government s responsibility for rental housing property. It creates mechanisms to promote the provision of rental housing and the proper functioning of the rental housing market. To facilitate sound relations between tenants and landlords, it lays down general requirements for leases and principles for conflict resolution in the rentalhousing sector. It also makes provision for the establishment of Rental Housing Tribunals and defines the functions, powers and duties of such Tribunals. Provincial housing departments are establishing Rental Housing Tribunals. xv. Home Loan and Mortgage Disclosure Act of 2000 The Act provides for the establishment of the Office of Disclosure and the monitoring of financial institutions serving the housing credit needs of communities. It requires financial institutions to disclose information and identities discriminatory lending patterns. The act will come into operation during xvi. Subdivision of Agricultural Land Act No. 70 of 1970 This Act is used for Town Planning advice to the Department of Land Affairs on the subdivision of agricultural land. xvii. The Development Facilitation Act No. 67 of 1995 This Act provides directive principles to guide the drafting, adoption and implementation of all policies and legislation for all spheres of government regulating spatial planning, land use management and land development.

21 DEPARTMENT OF HUMAN SETTLEMENTS 21 xviii. The Townships Ordinance No. 9 of 1969 This Ordinance is used for the establishment of towns, subdivision and consolidation, amendment of the general plan and the amendment of townplanning schemes. The townships board is also instituted in terms of this ordinance. xix. Disestablishment of South African Trust Limited Act No. 26 of 2002 The winding down of the South African Housing Trust and the transfer of functions relating to financial obligations were completed during the end of 2002 and the beginning of 2003 in terms of Act 2002: Disestablishment of SA trust Limited Act, xx. The Removal of Restrictions Act No. 84 of 1967 To empower the Administrator of a province to alter, suspend or remove certain restrictions and obligations in respect of land in the province; to repeal the Removal of Restrictions in Townships Act, 1946; to validate certain proclamations of Administrators; and to provide for incidental matters. xxi. The Less Formal Township Establishment Act No. 113 of 1991 To provide for shortened procedures for the designation, provision and development of land, and the establishment of townships, for less formal forms of residential settlement; to regulate the use of land by tribal communities for communal forms of residential settlement; and to provide for matters connected therewith. xxii. The Physical Planning Act No. 125 of 1991 This Act governs secondarily deals with land uses on farmland that is not agriculture related by way of permits and it also enables the amendment of guide plans and the evaluation of consistency regarding land development. xxiii. Public Audit Act 25 of 2004 Regulates the audit of Government Departments and State Owned Enterprises. xxiv. Social Housing Act 13 of 2008 Regulates the social housing market. xxv. National Spatial Development Perspective (NSDP) The NSDP also included a mechanism aimed at aligning spatial choices around government investment and development spending across all sphere of government. This approach seeks to focus the bulk of fixed investments of government on those areas with the potential for sustainable economic development. In these areas Government s objectives of both promoting economic growth and alleviating poverty will best be achieved. In areas of limited potential it is recommended that beyond a level of basic services which all citizens are entitled government should concentrate primarily on social investment such as human resource development, labour market intelligence and social transfers so as to give people in these areas better information and opportunities to gravitate toward areas with economic potential. xxvi. Spatial Planning and Land Use Management Act 16 of 2013 This Act provides a framework for the monitoring, coordination and review of the spatial planning and land use management system. It also provides for the establishment, functions and operation of Municipal Planning Tribunals. xxvii. The Draft Public Administration Management Bill by the (National) Department of Public Service and Administration It proposes to regulate, amongst others, the organization, management, functioning and staffing matters concerning departments in the national and provincial spheres of government, municipalities and governments components within the three spheres will, once promulgated, also have a significant impact on

22 Annual Report the manner in which national and provincial departments as well as municipalities govern themselves. xxviii. The Housing Consumers Protection Measures Act of 1998 The Act provides for the establishment of a statutory regulating body for home builders. The National Home Builders Registration Council will register every builder and regulate the home building industry by formulating and enforcing a code of conduct. The implementation of the Act is monitored continuously 7.3 Policy Mandates a) National Development Plan b) Medium Term Strategic Framework c) Free State Growth and Development Strategy d) Provincial Spatial Development Framework e) State of the Nation Address f) Budget Vote Speech of the (National) Minister of Human Settlements g) Premier s State of the Province Address h) Budget Speech of the MEC i) The Comprehensive Housing Plan j) President s Coordinating Council k) Premier s Coordinating Forum l) Government s Delivery Agreement on Outcome 8 m) Operation Hlasela n) National Spatial Development Perspective (NSDP)

23 DEPARTMENT OF HUMAN SETTLEMENTS ORGANISATIONAL STRUCTURE AS AT 31 MARCH 2014 MEMBER OF THE EXECUTIVE COUNCIL: COOPERATIVE GOVERNANCE, TRADITIONAL AFFAIRS AND HUMAN SETTLEMENTS DEPARTMENT OF HUMAN SETTLEMENTS Head of Department N Mokhesi Director SEC MAN & ANTICORRUPTION OFFICE OF THE HoD Office Manager Chief Internal Auditor INTERNAL AUDIT HUMAN SETTLEMENT PLANNING AND DELIVERY Deputy DirectorGeneral L15 FINANCIAL AND SUPPLY CHAIN MANAGEMENT Chief Financial Officer CORPORATE SERVICES Chief Director HS DEVELOPMENT PLANNING Chief Director LEGAL AND CONTRACT SERVICES 3. Housing and Departmental Contracts 1 Director L13 JE done (Adv. J. Phaladi) HS PROGRAMME IMPLEMENTATION Chief Director HS PROJECT MANAGEMENT Chief Director 9. ENTITIES REPORTING TO THE MEC Name of Entity Legislative Mandate Financial Relationship Nature of Operations

24 Annual Report PART B: PERFORMANCE INFORMATION PART B: PERFORMANCE INFORMATION

25 DEPARTMENT OF HUMAN SETTLEMENTS AUDITOR GENERAL S REPORT: PREDETERMINED OBJECTIVES Reliability of reported performance information The Framework for Managing Programme Performance Information (FMPPI) requires auditees to have appropriate systems to collect, collate, verify and store performance information to ensure valid, accurate and complete reporting of actual achievements against planned objectives, indicators and targets. Adequate and reliable corroborating evidence could not be provided for 40% of the targets to assess the reliability of the reported performance information. The auditee s records did not permit the application of alternative audit procedures. This was due to limitations placed on the scope of my work by the auditee as a result of failure to maintain appropriate records of reported performance information. Achievement of planned targets Refer to the annual performance report on page(s) 29 to 54 for information on the achievement of the planned targets for the year. This information should be consistent in the context of the material finding on the reliability of the reported performance information for the selected programme reported in paragraph 21 this report. Adjustment of material misstatements I identified material misstatements in the annual performance report submitted for auditing on the reported performance information of Programme 3: Housing development, implementation, planning and targets. As management subsequently corrected only some of the misstatements, I raised material findings on the reliability of the reported performance information. 2. OVERVIEW OF DEPARTMENTAL PERFORMANCE 2.1 Service Delivery Environment 6758 new housing units were completed in the province across all housing programmes being utilised by the province 1273 new sites were connected to basic water and sanitation services as part of the Integrated Residential Development Programme 4315 households were connected to basic services as part of the Informal Settlements Upgrading Programme. The following lowincome / affordable housing units were constructed in prioritized areas: 9 FLISP 6 Teachers cottages (Rural Rarm Worker Housing Units:Teachers 722 Rectification Programme (dilapilated) 338 Incomplete houses 4648 Breaking New Grounds 534 Emergency/Disaster. 0 PHP

26 Annual Report 201Land Restitution With regard to Military Veterans, the target was not achieved due to ongoing verification process for qualifying beneficiaries with the Department of Defence Force and Military Veterans 1383 new applications were captured correctly on HSS; priority was given to the capturing of housing projects related to the houses improved from two roomed to 4 roomed and the rebuilding of 1 door houses. Deeds of registered in favour of qualifying beneficiaries. o 8: Enhanced Extended Discount Benefit Scheme (EEDBS). o 486: Deeds were registered: Act 107 of o 673: Deeds were registered: Act 81 of Municipalities were supported towards accreditation for Level 1 and were Metsimaholo, Dihlabeng, Matjhabeng, Moqhaka and level 3 for Mangaung Metro. 3638: houses were handed over to beneficiaries together with title deeds 2840: job opportunities were created through resettlement and housing construction projects. 5 Km of streets were constructed in the newlyformalized areas of Schoonplaatz in Harrismith. The Mangaung Metro Municipality, Thabo Mofutsanyana District Municipality and 18 local municipalities were mentored on consumer education, training for building inspectors and Public Housing for Planning and Engineering. Two partnerships: A partnership was established with SHISAKA and the University of Johannesburg, which focuses on conducting training for municipal officials on Housing Policy and E tsho Engineering for Project Management. 516 new affordable rental units were delivered through Social Housing. Despite these achievements, there were challenges that resulted in having some targets not been fully achieved and the Department also took some measures in addressing such challenges. 2.2 Service Delivery Improvement Plan Implementation of Service Delivery Improvement Plan of the department has been a challenge in that it was still in a draft form not yet approved. In addition, the plan has to be reviewed to meet the requirements of credible SDIP as per the guidelines. This review process has to be completed by end of June Once the draft plan has been approved, it is then that it can be implemented. The process of ensuring that the department develops a credible SDIP was stalled by lack of human resource. The department has appointed Service Delivery Specialist on the 1 st of June 2014.

27 DEPARTMENT OF HUMAN SETTLEMENTS 27 Main services and standards Main services Beneficiaries Current/actual standard of service Desired standard of service Actual achievement N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Batho Pele arrangements with beneficiaries (Consultation access etc.) Current/actual arrangements Desired arrangements Actual achievements N/A N/A N/A N/A N/A N/A Service delivery information tool Current/actual information tools Desired information tools Actual achievements N/A N/A N/A N/A N/A N/A Complaints mechanism Current/actual complaints mechanism Desired complaints mechanism Actual achievements N/A N/A N/A N/A N/A N/A 2.3 Organisational environment In the financial year, 2013/2014 there was no strikes experienced by the department. In relation to corruption, the term corruption refers to conduct by any person who, directly or indirectly accepts or agrees or offers to accept any gratification from any other person whether for the benefit of himself or herself or for the benefit of another person, it also refers to conduct where a person agrees or offer to give any person gratification as mentioned earlier. The conduct as previously mentioned is deemed as corruption if it amounts to action that is illegal, dishonest, unauthorized, incomplete or biased as well as misuse or selling of information. The Department of Human Settlements has been inundated for the past twentyfour months and as such has redoubled its efforts in dealing with the scourge of corruption wherefore at least 15 officials were put on suspension as a precautionary measure such that orderly administration is maintained. To date about seven of the mentioned cases were successfully concluded (which constitute about 46.66%) in favour of the Department and the remaining ones are still ongoing. Any corruption related cases have a negative impact on the functioning of the department because it deprives the intended beneficiaries an opportunity to benefit from government programmes and the time it takes to finalize the said cases is costly to the department e.g. the payment of suspend officials whilst the case is going on. Corruption by both public and private entities remains one of the top tier priorities at the behest of the department and all such related conduct will be dealt within the confines of the legislation. 2.4 Key policy developments and legislative changes NONE

28 Annual Report 3. STRATEGIC OUTCOME ORIENTED GOALS Strategic orientated goals of the Department of Human Settlements 3.1. Goal 1: Creation of the department geared towards service excellence 3.2. Goal 2: Improved housing delivery planning 3.3. Goal 3: Management of housing interventions 3.4. Goal 4: Management of housing assets and Extended Enhanced Discount Benefit Scheme (EEDBS) The department directly contributes to outcomes 8 and 12, table below shows how the goals were realized. OUTCOME 8 a) Output 1: Accelerated Delivery of Housing Opportunities Metric 01/04/ Target 2013/2014 Achievement Construction of 26,400 (target set for FS) affordable housing units in prioritized areas : Enhanced Extended Discount Benefit Scheme(EEDBS) Act 81 of Act 107 of No. of erven planned and surveyed No. of municipalities targeted for the expansion of the National Upgrading Support Programme 6 6 No. of municipalities accredited: Level 1 Level 2 Level 3 1(Metro) 4 LM 5 No of parcels of land transferred to municipalities 11 4 No. of CRU units approved and upgraded Matjhabeng Metsimaholo Mangaung No. of new affordable rental units delivered through Social Housing: (Brandwag) Phase 1 Phase 2 Phase

29 DEPARTMENT OF HUMAN SETTLEMENTS 29 b) Output 2: Improve access to sanitation in newlyformalized areas Metric 01/04/ Target 2013/2014 Achievement No. of Households provided with access to a basic level of sanitation 4630 (IRDP) 5761 (Informal Settlements) 1273 (IRDP) 4315 (Informal Settlements) Km of streets constructed in newlyformalized areas 1km 5 Km No. and type of social amenities constructed 2 1 c) Output 3: Mobilization of welllocated public land for lowincome and affordable housing Metric 01/04/ Target 2013/2014 Achievement No. of parcels of land identified and transferred to municipalities for development purposes d) Output 4: Improved Property Market Metric Actual Performance /2014 Planned Target Finance Linked Individual Subsidy Programme (FLISP) PERFORMANCE INFORMATION BY PROGRAMME 4.1. Programme 1: Administration Purpose: This programmes aims to provide strategic direction, leadership and support to the department Subprogrammes Corporate Services Strategic objective Improved capability of the department to meet its obligation

30 Annual Report Subprogramme: Corporate Services Strategic objectives: Improved capability of the Department to meet it s objectives Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 1. Strategic Plans Level 4 (Strategic Plan linked with Outcome 9, MTSF / PSGD and Treasury Regulations) (Strategic Plan revised and updated) Moderated score Level 4 (Strategic Plan linked with Outcome 9, MTSF / PSGD and Treasury Regulations) (Strategic Plan revised and updated) 4 2 Annual Performance Plans Level 4 (APP revised, updated and submitted within due timeframes, linked with strategic plan, Outcome 9, MTSF / PSGD and Treasury Regulations) (Quarterly Performance Reports submitted to EA and Treasury on time) Moderated score (Level 2) 2 Although the department achieved some standards, the following evidence could not be accessed: 2012/13 Annual Performance Plans APP did not comply with the criteria set in the Treasury Regulations. (Management engages with quarterly progress reports towards informing improvements) (Information in performance management reports corresponds with targets expressed in APP and Annual Report)

31 DEPARTMENT OF HUMAN SETTLEMENTS 31 Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 3 Integration of monitoring and evaluation in performance and strategic management Level 3 (M&E Policy Framework approved and implemented) Moderated score (Level 1) 2 Insufficient was evidence submitted. The mechanisms set by the department to collect, manage and store data was not sufficient. (Standardized mechanisms in place to collect, manage and store data) 4 Service Delivery Improvement Mechanisms Level 2 Moderated score (Level 1) 1 The service charter developed did not meet the required criteria. (Service Charter and service standards approved, submitted in time and displayed) 5 Functionality of Management Structures Level 3 (Management structures with formal terms of reference, meetings take place in accordance with predetermined meeting schedules) Moderated score (Level 1) 1 The committee could not access the information. The department beefed up its MPAT structures to address this challenge. (Management decisions are documented, clear, responsibility allocated and followedup)

32 Annual Report Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 6 Assessment of accountability mechanisms (Audit Committee) Level 3 (Audit Committee established and meets quarterly as scheduled) (Audit Charter with clearly defined objectives and key performance indicators adopted by Audit Committee) Moderated score (Level 1) 3 Although the Department met with the majority of criteria for level 4, the Audit Committee did not review management responses to audit issues, and subsequently did not report thereon during the year under review. This has been brought to the attention of the Audit Committee towards ensuring that it will be dealt with adequately in the 2014/2015 financial year. (3Yer Internal Audit Plan approved by Audit Committee) (Quarterly reports produced by the Chairperson of the Audit Committee) (Decisions of the Audit Committee are documented) (Audit Committee conducted a performance selfassessment) (Stakeholder performance assessment conducted iro Audit Committee)

33 DEPARTMENT OF HUMAN SETTLEMENTS 33 Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 7 Assessment of policies and systems to ensure professional ethics Level 3 (Code of Conduct is communicated to employees) Moderated score (Level 1) 2 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. (All new employees are trained on Code of Conduct) (All senior managers disclosed financial interests) (Disciplinary action taken against noncompliant senior managers) 8 Fraud Prevention Level 3 (Fraud Prevention Plan with policy statement and implementation plan approved) Moderated score (Level 2) 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. (Whistleblowing policy and implementation plan approved) (Feedback provided on anticorruption hotline cases within 40 days to PSC)

34 Annual Report Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 9 Assessment of internal audit arrangements Level 3 (Internal Audit Charter, 3Year and Annual Internal Audit Plan signed by HoD, Chief Audit Executive and the Audit Committee Chairperson) Moderated score (Level 2 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. (Quarterly performance reports iro progress on Internal Audit Charter submitted to Audit Committee) (Functionality of the Internal Audit reviewed by AG SA) (Institute of Internal Auditors conducted quality review on functionality of Internal Audit) 10 Assessment of risk management arrangements Level 3 (Risk Management Committee established) Moderated score (Level 2) 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. (Risk Assessment Profile conducted) (Annual Risk Management Plan developed and approved, signed by HoD and Chairperson of RMC) (Decisions of the RMC recorded) (Quarterly reports on implementation of Risk Management Plan submitted to RMC and Audit Committee)

35 DEPARTMENT OF HUMAN SETTLEMENTS 35 Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 11 Approved EA and HoD Delegations for public administration in terms of the PSA and PSR Level 3 (Delegations in place in compliance with PSA and PSR as per MPSA directive) Moderated score (Level 3) None, the department achieved the set target (Conditions of delegations specified and monitored) 12 Approved HoD Delegations for financial administration in terms of the PFMA Level 3 (Two sets of delegations in place, e.g. for PFMA and Treasury Regulations, in accordance with Treasury guidelines and the structure of the Department) Moderated score (Level 3 None, the department achieved the set target (Conditions of delegations specified for risk management) 13 Corporate Governance of ICT Level 2 (ICT related policies and strategies drafted: Moderated score (Level 1) 2 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. Corporate Governance of ICT Policy Corporate Governance of ICT Charter ICT Plan ICT Implementation Plan ICT Operatonal Plan)

36 Annual Report Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 14 Human Resource Planning Level 3 Moderated score (Level 1) 2 The plan was still in the process of being drafted. (Annual HR Plan signedoff in line with DPSA format and standards and submitted to DPSA by due date) (Plan in place to ensure the continuous supply of critical skills) 15 Organizational Design and Implementation Level 3 (Organogramme updated and approved by MEC) Moderated score (Level 2) 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. (Only filled and funded vacancies reflected on PERSAL) (MPSA consulted on proposed changes to macro structure) 16 Human Resources Development Planning Level 2+ (HRD Plan with equity targets incorporated approved and submitted to DPSA within due date) Moderated score (Level 1) 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. 17 Pay sheet certification Level 3 (Pay sheet certification processes in place and partially implemented) Moderated score (Level 2) 1 The pay sheet certification process was partially implemented, and the department was urged to return the payroll with 10 days. (Discrepancies are corrected on the system)

37 DEPARTMENT OF HUMAN SETTLEMENTS 37 Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 18 Applications of recruitment and retention strategies Level 3 (Recruitment policy approved and implemented) Moderated score (Level 2) 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. (90% of positions filled in the previous 12 months were filled within 4 months) Exit interviews conducted with all employees leaving the Department) 19 Management of Diversity Level 2 (Job Access Strategy approved and submitted to DPSA) Moderated score (Level 1) 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. (Job access report produced to DPSA) (Gender Equality Strategic Framework approved and submitted to DPSA)

38 Annual Report Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 20 Implementation of Level 1 12 Performance Management System Level 4 (Approved PDM System in place) Moderated score (Level 1) 3 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. The department utilizes the provincial PDMS policy. (Annual performance assessments conducted, moderated and approved for implementation) (Status of signed PDPs monitored and reported) (Disciplinary actions taken to address poor performance) (Performance duly recognized within the Department)

39 DEPARTMENT OF HUMAN SETTLEMENTS 39 Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 21 Implementation of SMS Performance Management System Level 2+ (All senior managers signed and submitted their Performance Agreements within the due date) Level 2 None, the department achieved the set target (Status of signed PAs monitored and reported to HoD) (Status of signed PAs submitted to DPSA electronically within due date) (Disciplinary actions taken against noncompliant senior managers) (Annual Performance assessments of senior managers finalized through moderation processes, but not within due date) (Performance duly recognized within the Department)

40 Annual Report Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 22 Implementation of HoD Performance Management System Level 4 (HoD s signed Performance Agreement submitted to MEC within due date and filed) Moderated score (Level 2) 2 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. The verification statement is in the process of being finalized. (Changes made by PSC incorporated in PA) (HoD s Verification Statement submitted to EA within due date) (HoD s assessment shows a high level of correlation with AG outcomes and MPAT scores) 23 Management of disciplinary cases Level 2+ Moderated score (Level 2) 2 None, the department achieved the set target. (Disciplinary cases are not finalized 90 days) (Not all suspensions are shorter than 60 days) (The outcome of disciplinary cases are capture on PERSAL) 24 Demand Management Level 3 (Procurement Plan in place that meets Treasury requirements, submitted on time) Moderated score (Level 1) 2 Some evidence submitted did not comply with the format requirements; however, the quality checking mechanisms have been put in place.

41 DEPARTMENT OF HUMAN SETTLEMENTS 41 Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 25 Acquisition Management Level 3 (Supplier database in place in line with NT requirements) Moderated score (Level 2) 1 Some evidence submitted did not comply with the format requirements; however, the quality checking mechanisms have been put in place. (Bid Committees in place and functional) (Code of Conduct signed by Bid Committee Members and SCM Practitioners) 26 Logistics Management Level 3+ Moderated score (Level 2) None, the department achieved the set target. (Processes for setting inventory levels, placing orders, receiving, inspection and issues goods documented, implemented and reported) (Internal customer satisfaction survey conducted and actions taken on findings) 27 Disposal Management Level 3 (Disposal strategy in place) Moderated score (Level 2) 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. The verification statement is in the process of being finalized. (Disposal Committee established and functional) (Database of redundant assets maintained) 28 Management of cash flow and expenditure versus budget Level 3 (Cash flow projections are done and submitted to Treasury in time with reasons for deviations iro expenditure) Moderated score (Level 1) 1 The evidence provided was insufficient and that will be addressed in the 2014/2015 reporting period. The verification statement is in the process of being finalized.

42 Annual Report Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 28 Payment of Suppliers Level 3+ (Monthly exception reports on payment of suppliers submitted to Treasury) Moderated score (Level 2) 2 The department did have invoice tracking in place and not all suppliers were paid within 30 days. (Invoice tracking system in place) (Investigation report dealing with reasons for nonpayments within 30 days produced and controls implemented to prevent recurrence of late payments) 29 Management of unauthorized, irregular, fruitless and wasteful expenditure Level 2 (Process in place to prevent and detect unauthorized, irregular, fruitless and wasteful expenditure) Moderated score (Level 1) None, the department achieved the set target.

43 DEPARTMENT OF HUMAN SETTLEMENTS 43 Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 30 Improved communication planning, strategy development and implementation Departmental communication planning, strategy development and implementation: Communication Strategy and implementation plan developed and approved Strategy Developed None, the department achieved the set target. Effective involvement in the development and implementation of the LGCS, Provincial communication strategy All key milestones in the approved Departmental Communication Strategy implemented Implementation and management of campaigns Effective management and use of appropriate communication channels Building and sustaining a positive reputation of the Department Effective management of unplanned and urgent communication 31 Suitable office accommodation secured for the Department, accommodating filled and critical funded posts 1 (Agreement reached with Public Works, Roads and Transport on desired accommodation) 0 1 A proposal has been submitted to the custodian department, the Department of Public Works. (All officials in the employment of the Department are accommodated, though not in line with OHS requirements)

44 Annual Report Indicator No. Indicator Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from the planned target Comment on deviations (MPAT Moderating Committee determination) 32 No. of Monthly Key Control Matrix Reports submitted to Provincial Treasury 33 No. of Quarterly Key Control Matrix Reports submitted to Provincial Treasury The Key Control Matrix submission dates from Provincial Treasury are not financial year based, thus some reports are reported after the end of the financial year and that has impact on the numbers reported The Key Control Matrix submission dates from Provincial Treasury are not financial year based, thus some reports are reported after the end of the financial year and the y have impact on the numbers reported. Strategy to overcome areas of under performance This programme also experienced capacity constraints. Although the Executive Authority approved the split of Programme 1 personnel between the two Departments towards the end of the 2012/2013 financial year, effective from the 1 st of April 2013, budget and capacity constraints resulted in some services still being rendered to both Departments on a shared services basis during the year under review. In addition, the funds allocated to both Departments to fill critical vacancies (by Provincial Treasury) were insufficient to address all areas where capacity constraints are experienced. In addressing the areas where the Department did not achieve its planned targets, a (MPAT) Performance Improvement Plan will be developed early in 2014/2015 towards ensuring that all planned performance targets for 2014/2015 are successfully achieved. Changes to planned targets NONE Linking performance with budgets 2013/ /2013 Programme Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/ Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Administration Total

45 DEPARTMENT OF HUMAN SETTLEMENTS Programme 2: Housing needs, research and planning Purpose: To facilitate and undertake housing delivery planning, Implementation, monitoring and evaluation Subprogrammes Administration Policy Planning Research Strategic objective To provide regulatory framework for Human Settlements Subprogramme: Policy Strategic objective: Housing regulatory framework Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/14 Actual Achievement 2013/14 Deviation from planned target to Actual Achievement for 2013/14 Comment on deviations 1. No. of Acts passed and/or policy guidelines approved Subprogramme: Planning Strategic objectives: Improved human settlements planning, implementation, monitoring and evaluation 1 Provincial Housing Demand Database developed and updated 2 No. of houses enrolled with NHBRC 3 Integrated MultiYear Housing Delivery Plan 4 Provincial Human Settlements Infrastructure Plan , The underachievement is as a result of the inadequate Geo Techs and nonavailability of service plans from some municipalities The BID to appoint service providers to assist municipalities to draft municipal housing sector plans/ housing chapters was not approved by the HOD but the HOD directed that HDA be requested to assist the department in this regard. 0 0 Subprogramme: Research

46 Annual Report Strategic objectives: Housing delivery research 1 No. of projects approved 2 No. of research papers completed There is a National Research Task Team comprising of 9 Provincial Departments and the National Departments research components, this team set the research agenda and will ensure the appointment of the service provider who will conduct cross cutting and transversal to the sector. Changes to planned targets None Linking performance with budgets 2013/ /2013 Programme Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Housing Needs, Research & Planning Total Programme 3: Housing Development, implementation, planning and targets Purpose: To provide individual subsidies and housing opportunities to beneficiaries in accordance with housing policies. Subprogrammes Administration Financial interventions Incremental interventions Social and Rental interventions Rural interventions

47 DEPARTMENT OF HUMAN SETTLEMENTS 47 Strategic objective: To provide regulatory framework for Human Settlements Performance indicators Subprogramme: Financial interventions Strategic objective: Enabling environment for improved housing delivery Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/14 Actual Achievement 2013/14 Deviation from planned target to Comment on deviations 1 Number of new housing units completed in the province across all housing programmes being utilised by the province 2 Number of new sites connected to basic water and sanitation services as part of the Integrated Residential Development Programme The contractors were appointed after the assessment of all housing projects. Huge prices increases on materials caused a financial strain on contracts and as a results they vacate site due to financial problems This is a multiyear project. 3 Number of households connected to basic services as part of the Informal Settlements Upgrading Programme These types of project are multiyear projects.

48 Annual Report Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/14 Actual Achievement 2013/14 Deviation from planned target to Comment on deviations 4 No. of lowincome / affordable housing units constructed in prioritized areas: (i) FLISP Most applicants disqualified, as they do not meet the criteria set by the banks. (ii) Military Veterans Nonachievement during the 1 st, 2 nd and 3 rd Quarters there was verification process for qualifying beneficiaries with the Department of Defence Force and Military Veterans as per the correct definition. (iii) Teachers cottages (iv) Rectification Programme (dilapilated) (v) Incomplete houses It is covered under the Sub Programme Rural Intervention Overachievement is due to less number of houses demolished but the construction of those houses that were demolished in the previous quarters Underachievement the assessments were done in 2 nd Quarter and contractors were all appointed in 2 nd Quarter (vi) BNG Huge price increases on materials caused a financial strain on contractors. Small contractors vacate site due to financial problems. (vii) Emergency/Disaster Overachievement is as a result of unplanned circumstances that had to be responded to. (viii) PHP Huge price increases on materials caused a financial strain on contractors. Small contractors vacate site due to financial problems. (ix) Land Restitution There was overachievement because most of the houses were at the completion stage in the last quarter of the financial year.

49 DEPARTMENT OF HUMAN SETTLEMENTS 49 Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/14 Actual Achievement 2013/14 Deviation from planned target to Comment on deviations 5 No. of (new) applications captured correctly on HSS Not achieved because the department is focusing on eradicating the backlogs of the previous financial years and priority was given to the capturing of housing projects related to the houses improved from 2 roomed to 4 roomed and the rebuilding of 1door houses. In relation to other programmes, most of the beneficiaries are on the system. 6 No. of deeds of transfer registered in favour of qualifying beneficiaries: EEDBS Formalisation of the Service Level Agreement with the conveyances and the completion of the necessary EEDBS application forms by different municipalities Act 81 of Followup with the directorates Legal Services and Supply Chain Management to speed up the appointment of the conveyances Act 107 of Followup with the directorates Legal Services and Supply Chain Management to speed up the appointment of the conveyances. 7 No. of township registers opened 8 No. of parcels of land identified and transferred to municipalities for development purposes 9 No. of erven planned and surveyed Reasons for under achievement The department under achieved because the negotiations process takes long and the achievement depends on the settlement between the department/ HDA and the landowners Progress is at different phases of township application processes, which are outside the department s competency.

50 Annual Report Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/14 Actual Achievement 2013/14 Deviation from planned target to Comment on deviations 10 No. of municipalities supported towards accreditation 4 4 at level 1 Metsimaholo Dihlabeng Matjhabeng Moqhaka Level 3 readiness Mangaung Metro 5 0 Achieved Noncumulative target 11 No. of programmes approved and funded under the accreditation of municipalities No. of houses handed over to beneficiaries together with title deeds The underachievement was as result of the department engaging in consulting and finalizing the strategy of handing title deeds over to municipalities, towards assisting with the distribution process and the distribution process started in the 3 rd Quarter.. 13 No. of municipalities targeted for the expansion of the National Upgrading Support Programme 3 Metsimaholo Dihlabeng Matjhabeng Moqhaka Mangaung Maluti a phofung 6 0 Achieved Non cumulative target 14 No. of job opportunities created through resettlement and housing construction projects The contractors do not specify the number of job created through housing projects, thereby making it difficult for the Department to monitor and report the actual number. Subprogramme: Incremental interventions Strategic objectives: Creation of housing opportunities 1 Km of streets constructed in newlyformalized areas 3 1 Km 5KM 4KM The overachievement is because these are multiyear projects.

51 DEPARTMENT OF HUMAN SETTLEMENTS 51 Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/14 Actual Achievement 2013/14 Deviation from planned target to Comment on deviations 2 No. and type of social amenities constructed: MultiPurpose Community Halls The remaining project has been included in the Business Plan and plans are underway for the construction during the 2014/15 financial year. 3 No. of municipalities mentored on consumer education: Metro Local Municipaliaties No. municipalities capacitated on the following housing programmes: 24 1 Metro 4 DM 1 4 Training for Public Housing for Planning and Engineering Training for Building Inspectors Public Housing for Planning and Engineering 19 LM 5 14 was not conducted. Instead, the Department conducted the following short skills programmes. Induction Training for Councillors Introduction to Housing Policy for Housing Administrators Managing Low Cost Housing projects (Training for Builders inspectors) 5 No. of partnerships established and maintained towards improving human settlement delivery: Capacity Building Research The department is currently engaging accredited service providers for placements of technical bursary students. To complete their experiential training. Funding Internships experiential training Housing institutions

52 Annual Report Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/14 Actual Achievement 2013/14 Deviation from planned target to Comment on deviations 6 No. of emerging youth and women contractors mentored and supported The proposal was revisited to improve its technical outcomes, a structured implementation plan is in the process of being developed 7 No. of municipalities supported and capacitated on the Housing Subsidy System (review done and technical support provided) 0 20 Not achievement due to the work commitment, priority was given to the quality of Data with regard to both financial and non financial information in the HSS 8 No. of municipalities capacitated on the successful rollout and maintenance of the Housing Demand Database (metro and local municipalities) 0 4: Metsimaholo Dihlabeng Matjhabeng 0 4: Metsimaholo Dihlabeng Matjhabeng Underachievement due to capacity constraint Moqhaka Moqhaka Subprogramme: Social and rental intervention Strategic objectives: Creation of social and rental housing opportunities 1 No of CRU units approved and upgraded Mangaung CRU There has been a delay in the evaluative and adjudication of the Dark & Silver City Hostels Bids thus Contractors could not be appointed in time. Matjhabeng CRU Merriespruit Hostel was delayed by labour unrests from the moment it commenced and this delayed the completion of units. In relation to G Hostel, there has been a delay in the evaluation and adjudication of the G Hostel Bids thus a Contractor could not be appointed in time. Metsimaholo CRU Zamdela Hostel was delayed by community unrests from the moment it commenced and this delayed the completion of units.

53 DEPARTMENT OF HUMAN SETTLEMENTS 53 Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/14 Actual Achievement 2013/14 Deviation from planned target to Comment on deviations 2 No of new affordable rental units delivered through Social Housing Mangaung Social Housing Hillside View Social Housing Project commenced with Site establishment and earthworks which have now been completed and the appointment of a contractor is awaited. Brandwag Social Housing: Phase 1 yielding 402 units has been completed and allocated to tenants. Subprogramme: Rural intervention Strategic objectives: Access to housing opportunities in rural and farm areas 1 No. of rural and farm worker housing units approved and completed towards contributing to the construction of lowincome / affordable housing units: Due to budgetary constraints, the department was able to build and complete only 6 housing units. Rural Farm Worker Teachers Cottages on Farms Changes to planned targets (changed in line AG s recommendations) NONE Programme Expenditure 2013/ /2013 Programme Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Housing Development Total

54 Annual Report 4.4 Programme 4: Housing Assets Management and Property Management Purpose: To provide individual subsidies and housing opportunities to beneficiaries in accordance with housing policies Subprogrammes Administration Housing Properties Strategic objective: Management and maintenance of housing assets/properties Subprogramme: Housing Assets Management and Property Management Strategic objectives: Management and maintenance of housing assets/properties Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/ /14 Actual Achievement Deviation from planned target to Comment on deviations 1 No. of units sold to beneficiaries No target was set. Rental units Sites 2 No. of (existing) rental units transferred (to beneficiaries): Rental units Sites The underachievement is as a result of applications is with the State Attorneys for further handling. 3 No. of units devolved to municipalities in terms of section 15 of the Housing Act, No target was set. Rental units Sites 4 No. of debtors reduced per financial year The underachievement as a result of the delay in the transfer of rental units to beneficiaries. Housing assets are being transferred to their legitimate occupants.

55 DEPARTMENT OF HUMAN SETTLEMENTS 55 Subprogramme: Housing Assets Management and Property Management Strategic objectives: Management and maintenance of housing assets/properties Indicator No. Indicator Actual Achievement 2012/013 Planned Target 2013/ /14 Actual Achievement Deviation from planned target to Comment on deviations 5 No. of Housing assts maintained The underachievement: no request for maintenance received in this quarter. Housing assets are being transferred to their legitimate occupants NB! The total number of housing units completed does not make include the Community Residential and Social Housing units constructed. Strategy to overcome areas of under performance The following strategies will be employed to address the challenges experienced in programmes 24: o Capacitate the department by appointing technically qualified personnel to ensure effective project management at the district level. o Creation of a departmental database for consulting engineers. o Performance of contractors monitored on a weekly basis o Poor performing contractors contracts will be terminated. All projects to be given to good performing contractors. o Capacitation of the infrastructure project unit to expedite project progress. Changes to planned targets None Programme Expenditure 2013/ /2013 Programme Final Appropriation Actual Expenditure (Over)/Under Expenditure Final Appropriation Actual Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Housing Assets, Management & Property Management Total

56 Annual Report 5. TRANSFER PAYMENTS 5.1. Transfer payments to public entities NONE 5.2. Transfer payments to all organisations other than public entities NONE The table below reflects the transfer payments, which were budgeted for in the period 1 April 2013 to 31 March 2014, but no transfer payments were made. Name of transferee Purpose for which the funds were to be used Amount budgeted for (R 000) Amount transferred (R 000) Reasons why funds were not transferred

57 DEPARTMENT OF HUMAN SETTLEMENTS CONDITIONAL GRANTS Spending Trends of the Human Settlements Development Grant HUMAN SETTLEMENT DEVELOPMENT GRANT Current Appropriation Expenditure YTD Balance Percentage of Budget Spent ytd FINANCIAL INTERVENTIONS 1.1a Individual housing subsidies (R0 R3 500) credit linked b Individual housing subsidies (R0 R3 500) Non Credit Linked R R R % % % 1.2 Housing finance linked Individual subsidies (FLISP)(R3 501 R7 000) 1.3 Enhanced Extended Discount Benefit Scheme (EEDBS) 1.5a Rectified RDP stck % 1.5b Rectification of Housing Stock(pre 1994) % 1.6 Social and Economic Facilities % 1.7 Accredited Municipalities (level 1 & 2): % 1.8 Operational Capital Budget % 1.9 Blocked projects % 1.10 NHBRC enrolment (related to grant) % 1.11a Land parcels procured(ihahsd) % 1.12 Housing chapters of IDP's TOTAL % INCREMENTAL HOUSING PROGRAMMES 2.2a Integrated Residential Development Programme :Phase 1:Planning and Services % 2.2b Integrated Residential Development Programme :Phase 1:Planning and Services INFORMAL SETTLEMENTS % 2.2e Integrated Residential development Programme :Phase 4:Top Structure Construction (INFORMAL SETTLEMENTS) % 2.3a People's Housing process % 2.6 Emergency Housing Assistance % TOTAL % SOCIAL AND RENTAL HOUSING 3.1 Institutional Subsidies % 3.2b Social Housing:Capital Grants for rental housing (Funded by NDoH) 3.3a Community residential units (CRU) Converted/Upgraded % 3.3b Community residential units (CRU) Constructed TOTAL % RURAL HOUSING 4.1 Farm Worker Housing Assistance 4.2 Rural Housing: Communal land rights TOTAL PROVINCIAL SPECIFIC PROGRAMMES Land Resitution % TOTAL % GRAND TOTAL %

58 Annual Report department who transferred the grant PURPOSE OF THE GRANT National department of human settlements To provide funding for the creation of sustainable human settlements EXPECTED OUTPUTS OF THE GRANT Number of residential units delivered in each housing programme Number of serviced sites delivered in each housing programme Number of finance linked subsidies approved and disbursed Number of households in informal settlements provided with household access to services/upgraded services Number of hectares of well located land acquired and/or released for residential development Number of work opportunities created through related programmes AMOUNT RECEIVED (R 000) R AMOUNT SPENT BY THE DE PARTMENT (R 000) MONITORING MECHANISMS BY THE RECEIVING DEPARTMENT R Expenditure is monitored monthly and quarterly, reports are submitted to provincial treasury and national department of Human Settlement monthly and quarterly. 7. DONOR FUNDS 7.1. Donor Funds Received The department does not receive any Donor Fund. 8. CAPITAL INVESTMENT 8.1 Capital investment, maintenance and asset management plan The department had not spent any funds with regard to capital investment

59 DEPARTMENT OF HUMAN SETTLEMENTS 59 PART C: GOVERNANCE PART C: GOVERNANCE

60 Annual Report 1. INTRODUCTION The following governance structures were operational within the department during the year under review towards ensuring that the department maintains the highest standards of governance, thereby effectively, efficiently and economically utilizing the department s resources: NAME OF COMMITTEE PURPOSE / OBJECTIVE OF COMMITTEE Executive Management Committee a) To coordinate and integrate transverse matters impacting on the functioning of the department b) To agree on ways of working towards improving the effective and efficient functioning of the department c) To review and discuss the financial and/or nonfinancial performance of the department d) To monitor the extent to which the department succeed to identify and/or mitigate risks impacting negatively on the effective and efficient functioning of the department e) To review, consider and take decisions towards improving the effective and efficient functioning of the department, especially matters of a transverse nature f) To discuss IGR / Interdepartmental Reports and Resolutions emanating from MINMEC, Technical MINMEC and FoHoD Senior Management Committee g) To consider and/or propose transverse policies and/or strategies affecting the functioning of the department h) To share information and/or decisions related to the work of the department i) To coordinate and integrate matters impacting on the functioning of the department j) To agree on ways of working towards improving the effective and efficient functioning of the department k) To report on and/or monitor the financial and/or nonfinancial performance of the department l) To identify and mitigate risks impacting negatively on the effective and efficient functioning of the department m) To make proposals to and/or render advice on matters related to the effective and efficient functioning of the department PDMS Moderating Committee: Levels 1 12 a) To assess the collective outcome of performance assessment results of departmental employees. b) To make recommendations to the relevant approval authority (Executive Authority / Head of Department) on the granting of performance awards and pay progression, taking into account the availability of funds c) To make recommendations on disciplinary actions to be taken against supervisors who do not take responsibility for the correct implementation of the PDM system in their units (to the Head of Department). PDMS Dispute Body: Levels 1 12 a) To address disagreements between jobholders and their supervisors on ratings (towards reaching agreement). b) To make recommendations to the departmental Moderating Committee on the rating of employees where there is disagreement c) To make recommendations regarding actions to be taken where supervisors did not execute their responsibilities with regard to the PDM System (to the Head of Department)

61 DEPARTMENT OF HUMAN SETTLEMENTS 61 NAME OF COMMITTEE PDMS Moderating Committees: Senior Managers PURPOSE / OBJECTIVE OF COMMITTEE a) To assess the outcome of performance assessment results of senior managers. b) To make recommendations to the relevant approval authority (Executive Authority / Head of Department) on the granting of performance awards and pay progression, taking into account the availability of funds PDMS Quality Assurance Committees a) To evaluate the overall outcome of performance reviews of components in line with the normal distribution curve. b) To evaluate the standards and norms for similar jobs, thereby ensuring consistency across similar occupational jobs within the department. c) To refer assessments back to supervisors where motivations do not substantiate points allocated. d) To make recommendations to the departmental Moderating Committee on the granting of performance awards and pay progression, taking into account the availability of funds d) To make recommendations on financial implications and any other matters toward improving the successful implementation of the PDMS. Job Evaluation Quality Assurance Committee a) To quality assure job evaluations conducted within the department b) To ensure that all dynamics related to a specific job within the Department was taken into consideration during the job evaluation process. c) To oversee and enhance job evaluation processes within the department d) To enhance the application and understanding of the job evaluation system within the department Departmental Task Team (previously called the Departmental Coordinating Council) a) To promote labour peace. b) To promote and maintain sound relationships between the employer and its employees. c) To consult, share information and bargain collectively to reach conclusion on matters of mutual interest between parties to the task team. d) To consider and deal with such matters as may affect the interest of parties to the task team. e) To promote effective communication between the employer, its employees and trade unions in the task team. f) To identify areas of possible dispute prevention and decide on possible interventions. IT Steering Committee a) To review, monitor, prioritize and make recommendations to the HODs on major IT projects, investments. b) To ensure alignment with governance compliance, risk management and support to the strategic and operational objectives of both departments. Departmental Information Technology Committee (DITC) a) To provide guidelines to all DITC members and their alternative representatives in the application and management of committee procedures, when requests for procurement of IT equipment are received and presented to the committee. b) To promote departmental efficiency and effectiveness through the application of information technology towards improved service delivery.

62 Annual Report NAME OF COMMITTEE Employee Health and Wellness Committee PURPOSE / OBJECTIVE OF COMMITTEE a) To review the effectiveness of health and safety measures b) To identify potential hazards c) To examine and investigate complaints by employees relating to health and safety d) To report on general matters affecting the health and safety of employees e) To discuss proposed action and policies f) To advise the department on matters related to employee health and wellness g) To identify demarcated smoking areas Skills Development Committee a) To provide guidelines with regard to the training, education and development of all departmental employees b) To provide a clear vision and framework to guide skills development within the department. c) To link human resource development initiatives to broader processes of organizational development in the department. d) To promote access by all employees to meaningful training and education opportunities. e) To promote the empowerment of previously disadvantaged groups. f) To facilitate the development of effective career paths for all employees in the department. g) To promote lifelong learning in the department. h) To ensure that training and development in the department is need and competencybased. i) To transform the department into a learning organization. j) To advise the HOD on the implementation of training, education and development programmes and the implementation of the Human Resources Development Policy. k) To oversee the development and implementation of the WSP l) To monitor and evaluate skills development in the Department m) To handle all matters related to bursaries within the Department n) To make recommendations on the implementation of internships and learnerships in the department.

63 DEPARTMENT OF HUMAN SETTLEMENTS 63 NAME OF COMMITTEE PURPOSE / OBJECTIVE OF COMMITTEE Audit committee a) To approve the Internal Audit risk based strategic and operational plans, charter and review the performance relative to the plan. b) To review the impact of the organizations Risk Management Framework on the control environment. c) To review the external auditors proposed audit scope and approach including coordination of audit effort with the Internal Audit Activity. d) To consider the effectiveness of the organisation s system of internal control, including information technology security and control. e) Review the Annual Financial Statements and consider whether they are fairly presented, complete and reflect appropriate accounting principles. f) Review the Annual Report (including nonfinancial performance information) to verify accuracy and completeness of information. g) Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management s investigation and followup (including disciplinary action) of any instances of noncompliance; h) Regularly report to the Accounting Officer and Executing Authority about committee activities, issues and related recommendations. Risk Management Committee a) Review the risk management implementation plan, policy, strategy and recommend for approval by the Accounting Officer. b) Review the risk appetite and tolerance developed by management and recommend for approval by the Accounting Officer. c) Develop the Charter for the Committee for approval by the Accounting Officer and oversee the performance of the risk management function. d) Review the Department s risk identification and assessment methodologies to obtain reasonable assurance of the completeness and accuracy of the risk register. e) Evaluate the effectiveness of mitigating strategies to address the material risks of the department. f) Report to the Accounting Officer any material changes to the risk profile of the department. g) Review the fraud prevention policy and recommend for approval by the Accounting Officer. h) Evaluate the effectiveness of the implementation of the fraud prevention policy. i) Review any material findings and recommendations by assurance providers on the system of risk management and monitor that audit action plans is implemented to address the identified weaknesses. j) Develop key performance indicators to measure the effectiveness of the risk management performance. k) Interact with the Audit Committee to share information relating to material risks of the institution. l) Provide timely and useful reports to the Accounting Officer on the state of Risk management. m) Dictate the need for the Risk Management Committee to work through subcommittees.

64 Annual Report 2. RISK MANAGEMENT The approved risk management policy has been communicated to all officials together with the strategy and the implementation plan, which support the department in achieving its objectives. The department has conducted a risk assessment workshop, wherein the risk register was updated based on new and emerging risks and subsequently approved by the Accounting Officer and the Chairperson of the Risk Management (RM) Committee. The RM Committee has been established in line with accordance of chapter 13 of the risk management framework and meets quarterly. It reports regularly to the Audit Committee on the implementation of the Risk Management Plan and its decisions are recorded. The department is progressing in the management of risk, based on the Provincial Treasury s evaluation of the Key Performance Indicators (KPI S), the overall performance of the Risk Management in the department has increased to 65 % as compared to the previous financial year which was 32%. 3. FRAUD AND CORRUPTION The Fraud Prevention Plan (FPP) of the department has been approved by the Accounting Officer after a consultation process with the Risk Management and Shared Audit Committees. An awareness programme will be conducted by the Security Management and AntiCorruption Directorate (SMAC) throughout the whole department during the financial year 2014/2015. The department is well on course in implementing the Public Service AntiCorruption Strategy and the development of a fraud prevention capacity that complies with the Minimum AntiCorruption Capacity (MACC) guidelines. The guidelines focus on the following: Analysing corruption risk as per FMA s risk assessment. This is done in partnership with Risk Management, Internal Audit and all Senior Managers. Implement fraud plans that address corruption risk, as required by the PFMA, FPP approved, now in implementation stage. Verify the previous employment, qualifications, citizenship and criminal record of all persons before they are employed, SMAC is already assisting HR with this function. Consultation with SSA is ongoing to speed up the process. Establish systems that encourage everyone to report corruption; Implementation of FPP will assist. Establish the capacity to investigate allegations and institute disciplinary action for cases of corruption and detect corruption and refer allegations of corruption to law enforcement agency. Vacant posts in order to improve capacity had been identified to SMS. Information system that records all allegations and provides minimum information to designated national departments is in place but needs to be reviewed for the financial year 2014/2015. Establish a programme that informs employees on an ongoing basis of what constitutes corruption, and promotes policies that must be adhered to; awareness sessions had been ongoing in the financial year 2014/2015 with 80 % of all officials being reached. The SMAC do have a case management system in place and the handling of cases is monitored by the Internal Audit unit. It reports about the statistics on case management to the Shared Audit Committee. This case management system will be reviewed during the financial year 2014/2015.

65 DEPARTMENT OF HUMAN SETTLEMENTS MINIMISING CONFLICT OF INTEREST As prescribed by chapter three of the Public Service Act, 1994 (Act No. 103 of 1994), read with related regulations regarding financial disclosures, all Senior Management Members (SMS) except six (6) SMS who are on suspension have completed the disclosure forms and these were signed off by the Executive Authority. However, the Department have consulted the State Law Advisors in order to ensure that these officials comply with the prescripts. These disclosures formed the basis to minimize conflict of interest. These reports were presented to the office of Public Service Commission as required by the Act. 5. CODE OF CONDUCT In order to give practical effect to the relevant constitutional provisions relating to the public service, all employees are expected to comply with the Code of Conduct provided for in Chapter two (2) of the Public Service Regulations. The Code act as a guideline to employees as to what is expected of them from an ethical point of view, both in their individual conduct and in their relationship with others. Compliance with the Code can be expected to enhance professionalism and help to ensure confidence in the public service. The need exists to provide direction to employees with regard to their relationship with the legislature, political and executive officebearers, other employees and the public and to indicate the spirit in which employees should perform their duties, what should be done to avoid conflicts of interests and what is expected of them in terms of their personal conduct in public and private life. Although the Code of Conduct was drafted to be as comprehensive as possible, it is not an exhaustive set of rules regulating standards of conduct in the department. However, our Head of Department Mr. N Mokhesi, by virtue of his responsibility in terms of section 7(3) (b) of the Public Service Act which deals with efficient management and administration and the maintenance of discipline, is, inter alia, under a duty to ensure that the conduct of all employees conform to the basic values and principles governing public administration and the norms and standards prescribed by the Act. The HOD also has a duty to ensure that all employees are acquainted with these measures, and that they accept and abide by them. In order to achieve this, our Human Resources Management and Development Directorate is tasks trough the APP of the Department to arrange Information Sessions where the Code of Conduct is unpacked or presented to officials. The primary purpose of the Code is a positive one, viz. to promote exemplary conduct. Notwithstanding this, an employee shall be guilty of misconduct, and may be dealt with in accordance with the relevant collective agreement if she or he contravenes any provision of the Code of Conduct or fails to comply with any provision thereof. 6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES The department is at the moment at head office situated in two buildings, i.e. Lebohang building (Provincial Building in Corner St Andrews and Markrgraaff streets) and the old Sanlam Building in Charlotte Maxeke Street. Office space, which is not enough for current employees, remains a serious challenge for the department resulting in four to six officials occupying space initially meant for one or two individuals) and this has had a negative impact in the filling of critical vacancies as well as the safety of the officials occupying the offices. There has already been a request of relocation of an official from the old Sanlam Building due to deteriorating health. The Department of Public Works has been engaged by the department in an effort to secure adequate accommodation for current staff and to make provision for future needs. The old Sanlam Building presents challenges with water and this affects the sanitation services and impacts on the cleanliness of the building as a whole. In the districts office accommodation is also a challenge and this has serious implication as the districts are

66 Annual Report supposed to serve the communities, access and the general condition of the buildings being the biggest challenge. The morale of the staff is at its lowest level as reflected in the Risk Management report and this will be addressed before 30 September 2014 through a proposed Team Building Session, departmental awareness programmes on Health Related Topics, Morale and Employee Satisfaction Survey. The EHWP Management Policy is a draft and will assist employees in realization of the vision of the programme. 7. PORTFOLIO COMMITTEES The meeting was held on the 23 October 2012 and the 2014 and the following issues were raised: A list and a break down all in complete houses, be availed to the portfolio committee for purposes of proper oversight and That the department speed up significantly the process of title deeds to rightful beneficiaries in the whole province and the report to be provided with 30 days after the adoption of the Report in the House. The department responded to the letter dated on the 16the of May 2013 to the letter dated also the 16 th of May 2014 and gave the break down of the incomplete houses and the plan on how the title deeds will be distributed to the beneficiaries. The Portfolio Committee had a sitting on the 5 th of March 2014 and expected briefing on the following issues: Petition of Mr. Ngake David Motloung from Clarens. Mr. MacDonald Malema in Kroonstad. Housing delivery backlog in the Free State Province: (i) How many units were planned and budgeted for in (ii) (iii) (iv) How many units were planned and budgeted for from 2009 to date. How many units have been delivered to date, 2009 till 2012 and Challenges and reasons for the delay in delivery, therefore, a presentation was made in this regard. The department made a presentation to the portfolio committee responding to all the issues raised, furthermore, Mr Motloung s house was reconstructed to be accessible taking into account his disability.

67 DEPARTMENT OF HUMAN SETTLEMENTS PROPAC RESOLUTIONS Resolution No. Subject Details Response by the department Resolved (Yes/No) 2/2010 Capacity In terms of the support function related to the department, no additional funds were received from Provincial Treasury until the end of the 2012/13 financial year. Funds were only made available from 1 April 2013 to start the process although the additional allocation is in the case of both departments not enough for the most critical functions in the Support Service Directorates. Provincial Treasury also only made Compensation of Employee funds available, but no funds for operation matters, resulting the possible filling of some of the critical posts, but not having tools of the trade for those officials to function effectively. Levels 13 and up were already split and the department is in the process to split levels 1 to 12 after which the most critical posts will be advertised for filling as from April CFO Vacancies filled to date. (46%) No four posts Still vacant and advertised; Director: Finance Deputy Director: Finance Personal Assistant to the Director: Finance Chief Financial Officer Short listing for the above post and the interview were held before 30/05/2014. (Yes) Declaration of interest: Implement control measures to ensure that all employees declare their own spouses and other close relatives interests in companies or closed corporations tendering, providing quotation or doing business with departments. Director: Internal Audit Systems were implemented. All Senior Managers submitted, (100%) (Yes) 2/2012 Advance Payments to contractors. Reconcile amounts and claims unspent funds back Director: Legal Services and CFO Summonses have been issued against all suppliers, they have filed notices of intention to defend and the department is responding accordingly, (70%) (No) 9. PRIOR MODIFICATIONS TO AUDIT REPORTS The department had appointed the consultants Ernest and Young in order to enhance the capacity challenges within Budget and Financial Management Directorate and part of their extended mandate included the following: the development of the Action Plans based on the AGSA Audit Reports and Management Letter, population thereof and periodically reporting on the progress to Internal Audit directorate for evaluation purposes, Monthly reporting progress to Provincial Treasury on behalf of the department. These reports were signed off by the Accounting Officer. The department further continued with the Audit Steering Committee meetings, which were held weekly in order to assess progress on the implementation of AGSA s recommendation. The minutes of these meetings are maintained and the feedback reports presented to the Accounting Officer.

68 Annual Report 10. INTERNAL CONTROL UNIT The department appointed consultants to assist with the functions of the Internal Control Unit during the year under reporting due to human and skills capacity constraints. The functions the department were assisted with were: Checking and verifying documents Safeguarding of all system documents Evaluating payments to update and maintain registers for irregular, fruitless and wasteful expenditure. Currently officials within the unit and officials of the consulting firm work together to ensure that skills are transferred. 11. INTERNAL AUDIT AND AUDIT COMMITTEES The objective of Human Settlement s Internal Audit Activity (Activity) is encapsulated in the definition of Internal Auditing, which is to provide an independent, objective assurance and consulting service designed to add value and improve the departments operations. It helps the department to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, internal control and governance. In terms of the scope of work of this Activity, a duly appointed Shared Audit Committee approved the Annual and Three Year Risk Based Internal Audit Coverage Plan. The plan focused primarily on statutory audits, audits related to EXCO Resolutions, Audit Reports and Management Letter received from AuditorGeneral South Africa for 2012/13 financial year, Adhoc Assignments, followup audits as well as financial audits, in particular interim financial statements. The Activity reported progress against the approved Plan on quarterly basis to the Shared Audit Committee. The Shared Audit Committee was established and functions in terms of Treasury Regulations, 2005(TR) to which came into effect as a result of section 76 as well as section 77 of the Public Finance Management Act, 1999 (Act No. 1 of 1999). The Shared Audit Committee was appointed by the Member of Executive Council: Free State Provincial Treasury in consultation with Member of Executive Council: Cooperative Governance, Traditional Affairs and Human Settlements, for a period of three years, with effect from 01 January The term of office was subsequently extended until end of July Thus, the members are currently serving the fourth year of their term. Two new additional members were appointed with effect from 01 August 2013 until 31 July 2014, in order to strengthen the available capacity. During the period under review, the Shared Audit Committee fulfilled its mandate, roles and responsibility as elaborated under paragraph 12 below. Name Qualifications Internal or external If internal, position in the department Date appointed Date Resigned No. of Meetings attended Ms. Maleho Nkomo B. Com B. Com Honours External N/A 01 January 2011 N/A Ref to paragraph 12 below Senior Executive Program

69 DEPARTMENT OF HUMAN SETTLEMENTS 69 Name Qualifications Internal or external If internal, position in the department Date appointed Date Resigned No. of Meetings attended Mr. Sibusiso Majola Dr C Olivier Mr. I Mokoena Dr. K Laubscher Adv. J Block B.com Certificate in Accountancy B.Com (Hons) Accounting Certified Internal Auditor N. Dip in Public Administration B. Luris Public Service Masters in Public Administration Ph. D in Public Management Diploma Industrial Engineering Project Management Management Advancement Programme MBA B. Com B. Com (Hons) Masters of Science Ph. D Agricultural Economics Baccalaureus Legum Baccalaureus Lurisprudentiae Diploma in Tax Law Certificate Public Finance Management Certificate Procurement Management External N/A 01 January 2011 N/A External N/A 01 January 2011 N/A External N/A 01 January 2011 N/A External N/A 01 August 2013 N/A External N/A 01 August 2013 N/A 12. REPORT OF THE AUDIT COMMITTEE The Shared Audit Committee of the Department of Human Settlements is pleased to present its report for the financial year ended 31 March Background Information The Shared Audit Committee has nonexecutive status in an advisory capacity to the Accounting Officer, to assist the

70 Annual Report Accounting Officer in fulfilling its oversight responsibility relating to: (i) The integrity of the department s financial statements and financial reporting process (ii) System of internal control (iii) The audit process, and (iv) The department s process for monitoring compliance with laws, regulations and the code of conduct. In discharging its responsibilities, the Shared Audit Committee is not itself responsible for the planning or conducting of audits or for any determination that the financial statements of the department are complete and accurate or in accordance with generally recognised accounting procedures. This is the responsibility of management and the independent auditors. The committee s role is that of an independent monitoring and evaluation of activities within the department. The Shared Audit Committee was appointed by the Free State Provincial Treasury in consultation with the Member of the Executive Council: for Cooperative Governance, Traditional Affairs and Human Settlements, for a period of three years, with effect from 01 January The term of office was subsequently extended until end of July Thus, the members are currently serving the fourth year of their term. Two new additional members, Advocate D. Block and Dr K. Laubscher, were appointed with effect from 01 August 2013 until 31 July 2014, in order to strengthen the available capacity. Audit Committee Members and Attendance The Shared Audit Committee consists of the members listed hereunder and should meet annum as per its approved Audit Committee Charter. at least four (4) times per During the year under review, four (4) meetings were held as reflected in the table below. Name Capacity Special Meeting Special Meeting Normal Meeting Normal Meeting 24 May July October March 2014 Ms M M Nkomo Chairperson * * * * Mr G S Majola Member * * * * Mr R I Mokoena Member * * * * Dr C D Olivier Member * * * * Adv D Block Member The members were appointed with effect from 1 * # Dr K Laubscher Member August July # * Legend: * Attended the meeting # Apology tendered Audit Committee Responsibility The Shared Audit Committee reports that it has complied with its roles and responsibilities arising from Section 38(1) (a) of the Public Finance Management Act and Treasury Regulation to about its establishment and Terms of Reference. S38(1)(a) (PFMA) S38(1)(a)(ii) of the PFMA state the following: (1) The accounting officer for a department, (a) Must ensure that department,. has and maintains (ii) a system of internal audit under the control and direction of an audit committee complying with and operating in accordance with regulations and instructions prescribed in terms of sections 76 and 77

71 DEPARTMENT OF HUMAN SETTLEMENTS 71 The Shared Audit Committee also reports that during the financial year under review it has reviewed and adopted appropriately: The Revised Audit Committee Charter, Revised Internal Audit Charter, Revised Internal Audit Coverage Plan for the period, Revised Internal Audit Manual, A report on the Performance against the approved Internal Audit Coverage Plan, A report on the progress on the implementation of recommendation by the AuditorGeneral South Africa, Key Control Matrix and Dash Board Reports and Risk Management and Risk Management Committee Reports. The effectiveness of internal control The system of internal control applied by the department over financial risk and risk management was not consistently effective, efficient and transparent. In line with the requirements of the PFMA, internal audit provides the Shared Audit Committee and management with assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested improvements to the controls and process. From the various Internal Audit reports issued on the interim and annual financial statements during the year under review, it was noted that matters were reported indicating material deficiencies in the system of internal control. Accordingly, we can report that the system of internal control was not entirely effective for the year under review. The Internal Audit Directorate presented the Activity Reports during the abovementioned sittings of the Shared Audit Committee, the reports of which included performance against the approved internal Audit coverage plan with all supporting documents, which highlighted the shortcomings as outlined in the abovementioned paragraph. The Shared Audit Committee is pleased to report that, whilst the objectives of the Internal Audit Directorate and the AuditorGeneral South Africa (AGSA) are different, the AGSA, determined that, based on their assessment of the scope of specific work performed, the objectivity and technical competence of the Internal Audit Directorate, and whether the work is carried out with due care, the procedures performed on Housing Allocations and the Comparative Figures on the Draft 2013/14 Annual Financial Statement prior to submission to AGSA will be taken into consideration in the performance of the external audit work. Further, other work performed by the Internal Audit Directorate will be used to assess risk and internal control deficiencies that may affect the audit of the annual financial statements for the yearend 31 March All the reports issued had thus been distributed to AuditorGeneral South Africa for that purpose. The quality of in year management and monthly/quarterly reports submitted in terms of the PFMA and the Division of Revenue Act. The Shared Audit Committee noted the in year management and monthly/quarterly reports submitted in terms of the PFMA and the Division of Revenue Act to Provincial Treasury. However, the Committee noted with concern that not in all instances were reports submitted timeously. In addition, the Committee noted with concern the discrepancies between the Accounting Officer s reports and the Key Control Matrix reports compiled by the Provincial Treasury. Management, at the request of the Committee, addressed such discrepancies.

72 Annual Report Predetermined Objectives The Shared Audit Committee noted the presentations done on Predetermined Objectives and the progress on the achievement thereof by the Departmental Planning and Performance Monitoring Directorate during the course of the financial year. The Shared Audit Committee noted with concern that adequate and reliable corroborating evidence could not be provided for forty percent (40%) of the targets, for Program Three (3) Housing Development, Implementation, Planning and Targets, to assess the reliability of the reported performance information. The Committee thus request management to develop realistic and achievable targets and monitor on regular basis the performance against these targets. Review and Evaluation of Interim Financial Statements The Shared Audit Committee noted the quarterly reviews performed by the Internal Audit Directorate on the Interim Financial Statements. These reports were included in the Internal Audit Activity Reports, which were presented at each sitting of the Shared Audit Committee. Review and Evaluation of Annual Financial Statements The Shared Audit Committee has: Reviewed and discussed the unaudited as well as audited annual financial statements to be included in the annual report with the Accounting Officer s Report, Reviewed progress on AuditorGeneral South Africa s management report and management responses thereto for the 2012/2013 financial year and the effect of which to the current audit, Reviewed changes in accounting policies and practices, Reviewed the department s compliance with legal and regulatory provisions, Reviewed the information on predetermined objectives to be included in the annual report, Reviewed the AuditorGeneral s management letter and responses thereof for the 2013/2014 financial year Reviewed significant adjustments resulting from the audit, Reviewed quarterly interim financial statements submitted for oversight purposes. The Shared Audit Committee concurs and accepts the conclusions of the AuditorGeneral South Africa on the annual financial statements, which resulted in a qualified audit opinion, and is of the view that the audited annual financial statements be accepted and read together with the report of the AuditorGeneral South Africa. The acceptance also applies to the audit of the Housing Fund. However, the Committee is concerned with the reoccurrence of the same issues reported in the 2012/2013 Auditor General South Africa report, which again contributed to the Department receiving a qualified audit opinion. Notwithstanding the abovementioned, despite an assurance that the appointed consultants will assist in addressing prior years issues, the Shared Audit Committee is concerned that the Department has regressed in light of the number of qualification paragraphs as well as a number of internal control weaknesses raised in the management letter. The committee had requested management to develop action plans to address all those identified deficiencies and in particular recurring findings. The Internal Audit Directorate will have to monitor the implementation status quo and report periodically to the Shared Audit Committee.

73 DEPARTMENT OF HUMAN SETTLEMENTS 73 Internal Audit Directorate The Shared Audit Committee is satisfied that the Internal Audit Directorate is operating effectively and that in all the reports perused and approved it has addressed the risks pertinent to the department in its audits. The Shared Audit Committee expressed its appreciation on the compilation of the three year and annual internal audit coverage plans because it is based on the outcome of the risk assessment thus making it a risk based Internal Audit Coverage Plan, which is in compliance with the Standards of Professional Practice of Internal Auditing. The Shared Audit Committee is also pleased that AuditorGeneral South Africa will use some of the work performed by the Internal Audit in expressing an audit opinion thereby alleviating duplication of efforts. The Shared Audit Committee concerns were reported and escalated to the accounting officer in their quarterly reports during the financial year. The Shared Audit Committee is also concerned with the capacity in the Directorate, in particular filling of those vacant positions, which were identified as critical positions on the staff establishment. Risk Management The Department s risk maturity is at a basic level. However, there is a Risk Management Committee that meets on a regular basis and periodically reports to the Audit committee. The Shared Audit Committee had on numerous occasions raised concerns regarding the non completion/finalization of the risk assessment process within the department and how it negatively affects the Internal Audit activities, in particular the compilation of the risk based Internal Audit Coverage Plan. Further, the Committee is concerned regarding challenges experienced by the Risk Management SubDirectorate, which amongst others includes capacity constraints experienced within the SubDirectorate and nonavailability of key officials during the risk assessment process. The Committee requested management to develop mechanism to address these challenges and ensure that the risk management subdirectorate performs efficiently. Notwithstanding the abovementioned, the Shared Audit Committee is pleased with the progress made to this end in the Directorate. AuditorGeneral South Africa The Shared Audit Committee is satisfied that there is a cordial relationship between the Auditor General South Africa and the Department due to the following: The Shared Audit Committee met with the AuditorGeneral South Africa to ensure that there is no unresolved issues, The AuditorGeneral South Africa met periodically with management to discuss the progress on the implementation of the recommendations in the management reports, The AuditorGeneral South Africa attendance of the Shared Audit Committee meetings as well as their participation in the shared audit committee meetings during the audit of the annual financial statements, The Internal Audit Directorate s Three Year and Annual Internal Audit Coverage Plan, Performance against the approved Plan as well as all audit reports, which are issued and distributed to AuditorGeneral South Africa.

74 Annual Report PART D: HUMAN RESOURCE MANAGEMENT PART D: HUMAN RESOURCES MANAGEMENT

75 DEPARTMENT OF HUMAN SETTLEMENTS OVERVIEW OF HUMAN RESOURCES The department s Human Resources Management unit delivers services in the field of human resources provisioning, human resources utilization as well as policy development. The main focus from a human resources perspective is the filling of critical vacancies with skilled individuals that will be in a position to enhance the capacity of the department towards improved service delivery. Workforce planning is a systematic process for identifying the human resources required to meet departmental goals and developing the strategies to meet these requirements. The department has a Scarce Skills policy to try to attract scarce skills in the department and retain it. In promoting the wellbeing of all employees in the department, the department has Employee Health and Wellness practices that adheres to regulatory requirements in Part VI of the Public Service Regulations as amended, and are in line with the Employee Health and Wellness Strategic Framework for the Public Service. The fundamental objective of the Strategic Framework is to facilitate the development of strategies, mechanisms and interventions by government departments and provincial administrations for the implementation of the following four functional pillars: HIV& AIDS, TB AND STI management; Health and Productivity management; Safety, health, environment, risk and quality (SHERQ) management; and Wellness (EAP) management. 2. POLICY DEVELOPMENT The department s HR Plan was developed based on the strategic objectives of the department, thereby giving effect to the people aspect of the strategy. The White Paper on Human Resources Management in the Public Service (Section 4.2) notes, Human Resources planning is essential in order to ensure that an organisation s human resources are capable of meeting its operational objectives. The development of human capital also stands in direct relationship with economic growth and development in the country. A clear acknowledgement within the Free State Growth and Development Strategy is the importance of the management and development of human capital. In this regard, a provincial Human Resource Management and Development Strategy were approved by the Executive Council that will enable the province to ensure that its human capital is aligned so as to realise its economic growth and development expectations. 3. HUMAN RESOURCES OVERSIGHT STATISTICS 3.1. Personnel related expenditure The following tables summarises the final audited personnel related expenditure by programme and by salary bands. In particular, it provides an indication of the following: amount spent on personnel amount spent on salaries, overtime, homeowner s allowances and medical aid.

76 Annual Report Table Personnel expenditure by programme for the period 1 April 2013 and 31 March 2014 Programme Total expenditure (R 000) Personnel expenditure (R 000) Training expenditure (R 000) Professional and special services expenditure (R 000) Personnel expenditure as a % of total expenditure Average personnel cost per employee (R 000) Administration Housing assets, prop management Housing development Housing needs, research and planning Total Table Personnel costs by salary band for the period 1 April 2013 and 31 March 2014 Salary band Personnel expenditure (R 000) % of total personnel cost No. of employees Average personnel cost per employee (R 000) Lower skilled (Levels 12) Skilled (level 35) Highly skilled production (levels 68) Highly skilled supervision (levels 912) Senior and Top management (levels 1316) Contract (Level 35) Contract (Level 68) Contract (Level 912) Contract (Level Total

77 DEPARTMENT OF HUMAN SETTLEMENTS 77 Table Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for the period 1 April 2013 and 31 March 2014 Salaries Overtime Home Owners Allowance Medical Aid Programme Amount (R 000 Salaries as a % of personnel costs Amount (R 000) Overtime as a % of personnel costs Amount (R 000) HOA as a % of personnel costs Amount (R 000) Medical aid as a % of personnel costs Administration Housing assets, prop management Housing development Housing needs research and plan Total Table Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for the period 1 April 2013 and 31 March 2014 Salary band Salaries Overtime Home Owners Allowance Amount (R 000 Salaries as a % of personnel costs Amount (R 000) Overtime as a % of personnel costs Amount (R 000) HOA as a % of personnel costs Medical Aid Amount (R 000) Medical aid as a % of personnel costs Skilled (level 12) Skilled (level 35) Highly skilled production (levels 68) Highly skilled supervision (levels 912 Senior management (level 1316) Total Employment and Vacancies The below tables indicate the number of posts on the establishment, the number of employees, the vacancy rate, additional staff to the establishment. This information is presented in terms of three key variables: programme salary band critical occupations (see definition in notes below).

78 Annual Report Table Employment and vacancies by programme as at 31 March 2014 Programme Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Administration Housing assets management and property management Housing Development Housing needs Research and Plan Total Table Employment and vacancies by salary band as on 31 March 2014 Salary band Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Lower skilled ( 12) Skilled(35) Highly skilled production (68) Highly skilled supervision (912) Senior management (1316) Contract (Level35) Permanent Contract (Level 68) Permanent Contract (Level 912) Permanent Total Table Employment and vacancies by critical occupations as on 31 March 2014 Critical occupation Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Administrative related, Permanent Bus and heavy vehicle drives, Permanent Engineers and related professionals, Permanent Financial and related professionals, Permanent Financial clerk and credit controllers, Permanent General legal administration and rel, professionals P Human resources and organisational develop and relate p Human resources clerk, Permanent Human resources related, Permanent

79 DEPARTMENT OF HUMAN SETTLEMENTS 79 Critical occupation Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Library mail and related clerk, Permanent Light vehicle drivers, Permanent Material recording and transport clerk, Permanent Messengers porters and deliverers, Permanent Other administration and related clerks and organisers Other administrative policy and related officers, Permanent Other information technology personnel, Permanent Other occupations, Permanent Secretaries and other keyboard operating clerk, Permanent Security officers, Permanent Senior managers, Permanent total Filling of senior management (SMS) posts Table SMS post information as on 31 March 2014 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant DirectorGeneral/ Head of Department Salary Level % Salary Level % Salary Level % 1 20% Salary Level ,5% 2 12,5% Total ,96% 3 8,7% Table SMS post information as on 30 September 2013 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant DirectorGeneral/ Head of Department Salary Level 16 (HoD) % Salary Level % Salary Level % Salary Level ,5% 2 12,5% Total , ,04%

80 Annual Report Table Advertising and filling of SMS posts for the period 1 April 2013 and 31 March 2014 SMS Level Advertising Filling of posts Number of vacancies per level advertised in 6 months of becoming vacant Number of vacancies per level filled in 6 months of becoming vacant Number of vacancies per level not filled in 6 months but filled in 12 months DirectorGeneral/ Head of Department Salary Level Salary Level Salary Level Salary Level Total Table Reasons for not having complied with the filling of funded vacant SMS Advertised within 6 months and filled within 12 months after becoming vacant for the period 1 April 2013 and 31 March 2014 Reasons for vacancies not advertised within six months The split of the two departments was not finalised on the system, and officials were finally placed in Human Settlements in November 2013, but without the budget. Lack of office accommodation contributed to the delay as new appointees cannot be accommodated in the current space. Scarcity of funds to establish a fully functional Programme 1 hampered the progress, as posts had to be reprioritised. Reasons for vacancies not filled within twelve months Chronic shortage of funds to fill the critical vacancies as well as to provide working tools. Shortage of accommodation to house the new appointees Table Disciplinary steps taken for not complying with the prescribed timeframes for filling SMS posts within 12 months for the period 1 April 2013 and 31 March 2014 NONE 3.4 Job Evaluation Table Job Evaluation by Salary band for the period 1 April 2013 and 31 March 2014 Salary band Number of posts on approved establishment Number of Jobs Evaluated % of posts evaluated by salary bands Number Posts Upgraded % of posts evaluated Posts downgraded Number % of posts evaluated Lower Skilled (Levels12) Contract (Level 35) Contract (Level 68) Contract (Level 912) Skilled (Levels 35) Highly skilled production (Levels 68)

81 DEPARTMENT OF HUMAN SETTLEMENTS 81 Salary band Number of posts on approved establishment Number of Jobs Evaluated % of posts evaluated by salary bands Number Posts Upgraded % of posts evaluated Posts downgraded Number % of posts evaluated Highly skilled supervision (Levels 912) Senior Management Service Band A Senior Management Service Band B Senior Management Service Band C Senior Management Service Band D Total Table Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1 April 2013 and 31 March NONE Table Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2013 and 31 March NONE Table Profile of employees who have salary levels higher than those determined by job evaluation for the period 1 April 2013 and 31 March NONE 3.5 Employment Changes Changes in employment over the financial year. Trends in the employment profile of the department. Table Annual turnover rates by salary band for the period 1 April 2013 and 31 March 2014 Salary band Number of employees at beginning of period1 April 2013 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate Lower skilled ( Levels 12) Skilled (Levels35) Highly skilled production (Levels 68) Highly skilled supervision (Levels 912) Senior Management Service Bands A Senior Management Service Bands B Senior Management Service Bands C Senior Management Service Bands D Contract (Level 35), Permanent

82 Annual Report Salary band Number of employees at beginning of period1 April 2013 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate Contract (Level 68), Permanent Contract (Level 912) Permanent Contract (Band B), Permanent Total Table Annual turnover rates by critical occupation for the period 1 April 2013 and 31 March 2014 Critical occupation Number of employees at beginning of periodapril 2013 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate Administrative related, Permanent Bus and heavy vehicle drivers, Permanent Engineers and related professionals, Permanent Financial and related professionals, Permanent Financial clerk and credit controllers, Permanent Human resources and organisational development and related Permanent Library mail and related clerks, Permanent Light vehicle drivers, Permanent Messengers porters and deliverers, Permanent Other administration and related clerks and organisers Other administrative policy and related officers, Permanent Other occupations, Permanent Secretaries and other keyboard operating clerks, Permanent Senior managers, Permanent TOTAL Table Reasons why staff left the department for the period 1 April 2013 and 31 March 2014 Termination Type Number % of Total Resignations Death Resignation Expiry of contract Dismissal operational changes Dismissal misconduct Dismissal inefficiency Discharged due to illhealth

83 DEPARTMENT OF HUMAN SETTLEMENTS 83 Termination Type Number % of Total Resignations Retirement Transfer to other Public Service Departments 3 Other Total Total number of employees who left as a % of total employment 4,20% Table Promotions by critical occupation for the period 1 April 2013 and 31 March 2014 Occupation Employees 1 April 2013 Promotions to another salary level Salary level promotions as a % of employees by occupation Progressions to another notch within a salary level Notch progression as a % of employees by occupation Administrative related Engineers and related professionals Financial and related professionals Financial clerks and credit controllers Human resources and organisation development and related Library mail and related clerks Messengers porters and deliverers Other administration and related clerks and organisers Other administrative policy and related officers Other occupations Secretaries and other keyboard operating clerks Security officers Senior managers TOTAL Table Promotions by salary band for the period 1 April 2013 and 31 March 2014 Salary Band Employees 1 April 2013 Promotions to another salary level Salary bands promotions as a % of employees by salary level Progressions to another notch within a salary level Notch progression as a % of employees by salary bands Lower skilled ( Levels 12) Skilled (Levels35) Highly skilled production (Levels 68)

84 Annual Report Salary Band Employees 1 April 2013 Promotions to another salary level Salary bands promotions as a % of employees by salary level Progressions to another notch within a salary level Notch progression as a % of employees by salary bands Highly skilled supervision (Levels 912) Senior Management (Level 1316) Contract (Level 912), Permanent Contract (Level 1316), Permanent Total Employment Equity Table Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2014 Occupational category Legislators, senior officials and managers Male Female Total African Coloured Indian White African Coloured Indian White Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations Total Employees with disabilities Table Total number of employees (including employees with disabilities) in each of the following occupational bands as on 31 March 2014 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and midmanagement

85 DEPARTMENT OF HUMAN SETTLEMENTS 85 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semiskilled and discretionary decision making Unskilled and defined decision making Contract (Professionally qualified) Permanent Contract (skilled technical) Permanent Contract (semiskilled) Permanent Total Table Recruitment for the period 1 April 2013 to 31 March 2014 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semiskilled and discretionary decision making Unskilled and defined decision making Contract ( Professionally qualified), Permanent Contract (Skilled technical), Permanent Contract (Semiskilled), Permanent Total Employees with disabilities

86 Annual Report Table Promotions for the period 1 April 2013 to 31 March 2014 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semiskilled and discretionary decision making Unskilled and defined decision making Total Employees with disabilities Table Terminations for the period 1 April 2013 to 31 March 2014 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semiskilled and discretionary decision making Unskilled and defined decision making Contract (Senior Management), Permanent Total Employees with Disabilities Table Disciplinary action for the period 1 April 2013 to 31 March 2014 Disciplinary action Male Female Total African Coloured Indian White African Coloured Indian White Dismissals months suspension without pay, final warning and counselling

87 DEPARTMENT OF HUMAN SETTLEMENTS 87 Table Skills development for the period 1 April 2013 to 31 March 2014 Occupational category Male Female Total African Coloured Indian White African Coloured Indian White Legislators, senior officials and managers Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations Total 278 Employees with disabilities Signing of Performance Agreements by SMS Members No disciplinary action has been taken against SMS members Table Signing of Performance Agreements by SMS members as on 31 May 2013 SMS Level Total number of funded SMS posts Total number of SMS members Total number of signed performance agreements Signed performance agreements as % of total number of SMS members DirectorGeneral/ Head of Department Salary Level % Salary Level % Salary Level % Salary Level % Total % Table Reasons for not having concluded Performance agreements for all SMS members as on 31 March 2014 Reasons Two SMS members were appointed late in 2013/2014 Four SMS (Directors) and two Chief Directors were suspended during the year 2013/2014

88 Annual Report Table Disciplinary steps taken against SMS members for not having concluded Performance agreements as on 31 May 2013 Reasons Two SMS members were appointed late in 2013/2014 Four SMS (Directors) and two Chief Directors were suspended during the year 2013/ Performance Rewards Table Performance Rewards by race, gender and disability for the period 1 April 2013 to 31 March 2014 Beneficiary Profile Cost Race and Gender Number of beneficiaries Number of employees % of total within group Cost (R 000) Average cost per employee African Male % Female % Asian Male % Female 1 1 0,5 5% Coloured Male Female 1 2 0,5 5% White Male 5 8 4,3 5% Female % Total % R % Table Performance Rewards by salary band for personnel below Senior Management Service for the period 1 April 2013 to 31 March 2014 Salary band Number of beneficiaries Beneficiary Profile Cost Total cost as a % of the total personnel Total Cost (R 000) expenditure Number of employees % of total within salary bands Average cost per employee Lower Skilled (Levels 12) Skilled (level 35) Highly skilled production (level 68) Highly skilled supervision (level 912) % R % 5% % R % 58% % R % 37% Total % R % 100%

89 DEPARTMENT OF HUMAN SETTLEMENTS 89 Table Performance Rewards by critical occupation for the period 1 April 2013 to 31 March 2014 NONE Table Performance related rewards (cash bonus), by salary band for Senior Management Service for the period 1 April 2013 to 31 March 2014 Note should be taken that the performance rewards made were for the assessment period of 2012/2013 and were only implemented in the 2013/2014 financial year. Salary band Beneficiary Profile Cost Total cost as a % of the Number of Number % of total Total Cost Average cost per employee total personnel expendi beneficiaries of employeeary bands within sal (R 000) ture Band A HOD Band B DDG Band C (Chief Directors) Band D (Directors) % R % and 10% of the salaries of the employees % R employees are at 5% of their salaries and other 3 employees received 10% of their salaries and one employee received only notch. Total % R % Leave Utilisation Table Sick leave for the period 1 January 2013 to 31 December 2013 Salary band Total days % Days with Medical certification Number of Employees using sick leave % of total employees using sick leave Average days per employee Estimated Cost (R 000) Lower Skills (Level 12) Skilled (levels 35) Highly skilled production (levels 68) Highly skilled supervision (levels 9 12) Top and Senior management (levels 1316) Total Table Disability leave (temporary and permanent) for the period 1 January 2013 to 31 December 2013 Salary band Total days % Days with Medical certification Number of Employees using disability leave % of total employees using disability leave Average days per employee Estimated Cost (R 000) Lower skilled (Levels 12) Skilled (Levels 35) Highly skilled production (Levels 68) Highly skilled supervision (Levels 912)

90 Annual Report Salary band Total days % Days with Medical certification Number of Employees using disability leave % of total employees using disability leave Average days per employee Estimated Cost (R 000) Senior management (Levels 1316) Total Table Annual Leave for the period 1 January 2013 to 31 December 2013 Salary band Total days taken Number of Employees using annual leave Average per employee Lower skilled (Levels 12) Skilled Levels 35) Highly skilled production (Levels 68) Highly skilled supervision(levels 912) Senior management (Levels 1316) Total Table Capped leave for the period 1 January 2013 to 31 December 2013 Salary band Total days of capped leave taken Number of Employees using capped leave Average number of days taken per employee Average capped leave per employee as on 31 March 20ZZ Lower skilled (Levels 12) Skilled Levels 35) Highly skilled production (Levels 68) Highly skilled supervision(levels 912) Senior management (Levels 1316) Total Table Leave payouts for the period 1 April 2013 and 31 March 2014 Reason Total amount (R 000) Number of employees Average per employee (R 000) Leave payout for 2013/14 due to nonutilisation of leave for the previous cycle Capped leave payouts on termination of service for 2013/ Current leave payout on termination of service for 2013/ Total HIV/AIDS & Health Promotion Programmes Table Steps taken to reduce the risk of occupational exposure Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any) Key steps taken to reduce the risk The department will continue with awareness campaigns targeting all employees.

91 DEPARTMENT OF HUMAN SETTLEMENTS 91 Table Details of Health Promotion and HIV/AIDS Programmes Question Yes No Details, if yes 1. Has the department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position. 2. Does the department have a dedicated unit or has it designated specific staff members to promote the health and wellbeing of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose. 3. Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme. 4. Has the department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent. 5. Has the department reviewed its employment policies and practices to ensure that these do not unfairly discriminate against employees based on their HIV status? If so, list the employment policies/practices so reviewed. 6. Has the department introduced measures to protect HIVpositive employees or those perceived to be HIVpositive from discrimination? If so, list the key elements of these measures. 7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved. 8. Has the department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators. x x x x x x x x Mr Gift Silingile: Deputy Director Employee Health and Wellness The department has the employee health and wellness unit in which there are only two employees. the unit does not have a dedicated budget to implement the four EHW pillars Programs were introduced while the department was one (COGTA and HS), but with the split and budget shortage none of the programmes have been implemented in the Human Settlements department. Joint committees were in existence, but recommendations have been made for the establishment and appointment of the committees. submission The department incorporates in its recruitment and employment policies the nondiscrimination clause based on the HIV status of an individual. A draft HIV and AIDS policy is drafted and sent to the Director HRM for scrutinising and to the deputy director of wellness Human Settlement, for new amendments. The unit made proposals for voluntary counselling and testing, but Programmes could not take place due to budget. The department has participated in the HCT sessions coordinated by the office of the premier. Not yet, but DPSA has provide some national guidelines in terms of monitoring Labour Relations Table Collective agreements for the period 1 April 2013 and 31 March 2014 Subject matter Date PSCBC Resolution 2 of 2013: Agreement of increase of levies 02 September 2013 PSCBC Resolution 1 of 2013: Service Charter 08 June 2013 Total number of Collective agreements None

92 Annual Report Table Misconduct and disciplinary hearings finalised for the period 1 April 2013 and 31 March 2014 Outcomes of disciplinary hearings Number % of total Correctional counselling % Verbal warning 0 0% Written warning 0 0% Final written warning % Suspended without pay % Fine 0 0% Demotion 0 0% Dismissal % Not guilty 0 0% Case withdrawn % Total % Total number of Disciplinary Hearings finalised 6 Table Types of misconduct addressed at disciplinary hearings for the period 1 April 2013 and 31 March 2014 Type of misconduct Number % of total Fraud and gross dishonesty % Financial irregularities % Total 7 100% Table Grievances logged for the period 1 April 2013 and 31 March 2014 Grievances Number % of Total Number of grievances resolved % Number of grievances not resolved % Total number of grievances lodged 8 100% Table Disputes logged with Councils for the period 1 April 2013 and 31 March 2014 Disputes Number % of Total Number of disputes upheld % Number of disputes dismissed 0 0 Total number of disputes lodged % Table Strike actions for the period 1 April 2013 and 31 March 2014 NONE

93 DEPARTMENT OF HUMAN SETTLEMENTS 93 Table Precautionary suspensions for the period 1 April 2013 and 31 March 2014 Number of people suspended 14 Number of people who s suspension exceeded 30 days 14 Average number of days suspended 368,28 Cost of suspension(r 000) R Skills development This section highlights the efforts of the department with regard to skills development. Table Training needs identified for the period 1 April 2013 and 31 March 2014

94 Annual Report Occupational category Gender Number of employees as at 1 April 20YY Legislators, senior officials and managers Learnerships Training needs identified at start of the reporting period Skills Programmes & other short courses Female 31 0 Executive and Leadership Other forms of training Corporate Governance Monitoring and Evaluation Strategic Planning Risk Management Service Delivery Improvement Fraud Prevention and AntiCorruption Financial Management Budgeting Project Khaedu 31 Total Male 42 0 Management and Leadership Labour Relations Corporate Governance Monitoring and Evaluation Strategic Planning Performance Management Risk Management Service Delivery Improvement Fraud Prevention and AntiCorruption Financial Management Budgeting Mentoring and coaching Project Khaedu Dialogic Facilitation Labour Relations Conflict resolution Knowledge management Report writing 42

95 DEPARTMENT OF HUMAN SETTLEMENTS 95 Professionals Female 3 0 None None 3 Technicians and associate professionals Male 10 0 None None 10 Female 0 0 None None Male 0 0 Report Writing Project Management Clerks Female Junior Management Male 90 0 Junior Management Presentation Skills Report Writing Communication Supervisory skills Computer skills Facilitation skills Batho Pele Principles Customer Care Secretarial Development Project Management Presentation Skills Report Writing Communication Supervisory skills Computer skills Facilitation skills Batho Pele Principles Customer Care Secretarial Development Project Management Presentation Skills Service and sales workers Female Male Skilled agriculture and fishery Female workers Male Craft and related trades workers Female Male Plant and machine operators and Female assemblers Male Elementary occupations Female Male Sub Total Female Male Total

96 Annual Report Table Training provided for the period 1 April 2013 and 31 March 2014 Occupational category Gender Number of employees as at 1 April 20YY Legislators, senior officials and managers Training provided within the reporting period Learnerships Skills Programmes & other short courses Other forms of training Female Female 31 0 Corporate Governance Monitoring and Evaluation Total Strategic Planning Performance Management Risk Management Service Delivery Improvement Fraud Prevention and AntiCorruption Financial Management Budgeting Mentoring and coaching Project Khaedu Dialogic Facilitation Labour Relations Conflict resolution Knowledge management Report writing Male Male 42 0 Corporate Governance Monitoring and Evaluation Strategic Planning Performance Management Risk Management Service Delivery Improvement Fraud Prevention and Anti Corruption Financial Management Budgeting Mentoring and coaching Project Khaedu Dialogic Facilitation Labour Relations Conflict resolution Knowledge management Report writing

97 DEPARTMENT OF HUMAN SETTLEMENTS 97 Occupational category Gender Number of employees as at 1 April 20YY Training provided within the reporting period Learnerships Skills Programmes & other short courses Other forms of training Professionals Female Female 3 0 None Total Male Male 10 0 None Technicians and associate professionals Female Female 0 0 None Male Male Report Writing Project Management Presentation Skills Clerks Female Female Report Writing Bursaries Communication Supervisory skills Computer skills Facilitation skills Batho Pele Principles Customer Care Secretarial Development Project Management Presentation Skills Male Male 86 0 Report Writing Bursaries Communication Supervisory skills Computer skills Facilitation skills Batho Pele Principles Customer Care Secretarial Development Project Management Presentation Skills Service and sales workers Female Female Male Male Skilled agriculture and fishery workers Craft and related trades workers Female Female Male Male Female Female Male Male

98 Annual Report Occupational category Gender Number of employees as at 1 April 20YY Plant and machine operators and assemblers Training provided within the reporting period Learnerships Skills Programmes & other short courses Other forms of training Female Female Male Male Total Elementary occupations Female Female Sub Total Female Female Male Male Male Male Total Injury on duty Table Injury on duty for the period 1 April 2013 and 31 March 2014 NONE 3.14 Utilisation of Consultants Table Report on consultant appointments using appropriated funds for the period 1 April 2013 and 31 March 2014 Total number of projects Total individual consultants Total Duration (work days) Total Contract value in Rand Months R6, NB the appointment of consultants was a deviation from SCM procedures Table Analysis of consultant appointments using appropriated funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2013 and 31 March 2014 NONE Table Report on consultant appointments using donor funds for the period 1 April 2013 and 31 March 2014 NONE Table Analysis of consultant appointments using donor funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2013 and 31 March 2014 NONE 3.15 Severance Packages Table Granting of employee initiated severance packages for the period 1 April 2013 and 31 March 2014 NONE

99 DEPARTMENT OF HUMAN SETTLEMENTS Foreign Workers Table Foreign workers by salary band for the period 1 April 2013 and 31 March 2014 Salary band 01 April March 2014 Change Number % of total Number % of total Number % Change Lower skilled Highly skilled production (Lev. 68) Highly skilled supervision (Lev. 912) Contract (level 912) Contract (level 1316) Total Table Foreign workers by major occupation for the period 1 April 2013 and 31 March 2014 Major occupation 01 April March 2014 Change Number % of total Number % of total Number % Change Professionals and managers Total

100 Annual Report PART E: FINANCIAL INFORMATION PART E: FINANCIAL INFORMATION

101 DEPARTMENT OF HUMAN SETTLEMENTS 101 Report of the Auditor General 102 Annual Financial Statements 109 Appropriation Statement 109 Notes to the Appropriation Statement 119 Statement of Financial Performance 121 Statement of Financial Position 122 Statement of Changes in Net Assets 123 Cash Flow Statement 124 Accounting Policies 125 Notes to the Annual Financial Statements 131 Annexures 160

102 Annual Report 109 to 159

103 DEPARTMENT OF HUMAN SETTLEMENTS 103

104 Annual Report 160 to to 54).

105 DEPARTMENT OF HUMAN SETTLEMENTS to 56

106 Annual Report