department of human settlements 2015-2016 financial …

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DEPARTMENT OF HUMAN SETTLEMENTS

2015-2016 FINANCIAL YEAR

ANNUAL REPORT

VOTE. 13

ISBN: 978-0-621-44796-5

PR256/2016

2

CONTENTS PAGE

PART A: GENERAL INFORMATION 4

1. DEPARTMENTAL GENERAL INFORMATION 5

2. LIST OF ABBREVIATIONS/ACRONYMS 6

3. FOREWORD BY THE MEC 7

3.1. REPORT OF THE ACCOUNTING OFFICER 10

3.2 OVERVIEW OF THE FINANCIAL RESULTS 13

4. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY OF THE

ANNUAL REPORT 17

5. STRATEGIC OVERVIEW 18

5.1. Vision 18

5.2. Mission 18

5.3. Values 18

6. LEGISLATIVE AND OTHER MANDATES 18

6.1. Constititution 18

6.2. Legislative Mandates 18

6.3. Policy Mandates 24

7. ORGANISATIONAL STRUCTURE 28

PART B: PERFORMANCE INFORMATION 29

1. AUDITOR GENERAL‟S REPORT: PREDETERMINED OBJECTIVES 30

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE 30

2.1. Service Delivery Environment 30

2.2. Service Delivery Improvement Plan 30

2.3. Organisational environment 30

2.4. Key policy developments and legislative changes 40

3. STRATEGIC OUTCOME ORIENTED GOALS 40

4. PERFORMANCE INFORMATION BY PROGRAMME 40

4.1. Programme 1: Administration 40

4.2. Programme 2: Housing need, research and planning 42

4.3. Programme 3: Housing development, implementation and planning 46

4.4. Programme 4: Housing assets management and property management 53

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5. TRANSFER PAYMENTS 56

5.1. Transfer payments to public entities 56

5.2. Transfer payments to all organisations other than public entities 56

6. CONDITIONAL GRANTS 57

6.1. Conditional grants and earmarked funds paid 58

6.2. Conditional grants and earmarked funds received 58

7. DONOR FUNDS 59

7.1. Donor Funds Received 59

8.. CAPITAL INVESTMENT 59

8.1. Capital investment, maintenance and asset management plan 59

PART C: GOVERNANCE 60

1.INTRODUCTION 61

2. RISK MANAGEMENT 61

3. FRAUD AND CORRUPTION 61

4. MINIMISING CONFLICT OF INTEREST 63

5. CODE OF CONDUCT 63

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES 63

7. PORTFOLIO COMMITTEES 64

8. PROPAC RESOLUTIONS 64

9. PRIOR MODIFICATIONS TO AUDIT REPORTS 65

10. INTERNAL CONTROL UNIT 65

11. INTERNAL AUDIT AND AUDIT COMMITTEES 66

12. REPORT OF THE SHARED AUDIT COMMITTEE 67

PART D: HUMAN RESOURCE MANAGEMENT 76

1. INTRODUCTION 77

2. OVERVIEW OF HUMAN RESOURCES 77

3. HUMAN RESOURCES OVERSIGHT STATISTICS 77

PART E: FINANCIAL INFORMATION 104

1. REPORT OF THE AUDITOR GENERAL 105

2. ANNUAL FINANCIAL STATEMENTS 116

3. ANNUAL FINANCIAL STATEMENTS HOUSING FUND 186

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PART A: GENERAL INFORMATION

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1. DEPARTMENT GENERAL INFORMATION

PHYSICAL ADDRESS: 7th Floor, OR Tambo House

Cnr. Markgraaff and St Andrews streets

Bloemfontein

9301

POSTAL ADDRESS: P O Box 211

Bloemfontein

9300

TELEPHONE NUMBER/S: 051 403 3883

FAX NUMBER: 051 403 3699

E-mail Address

Head of Department: [email protected]

Chief Financial Officer: [email protected]

Website Address

www.freestateonline.fs.gov.za

http://www.humansettlements.fs.gov.za

mailto:[email protected]

http://www.freestateonline.fs.gov.za/

http://www.humansettlements.fs.gov.za/

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2. LIST OF ABBREVIATIONS/ACRONYMS

AFS Annual Financial Statement

AGSA Auditor-General of South Africa

AO Accounting Officer

APP Annual Performance Plan

BAS

BNG

Basic Accounting System

Breaking New Ground

CFO Chief Financial Officer

DPSA Department of Public Service and Administration

EE Employment Equity

EHW Employee Health and Wellness

EPRE Estimate of Provincial Revenue

EXCO Executive Council

FSGDS Free State Growth and Development Strategy

FSHS Free State Human Settlements

HOD Head of Department

HRM Human Resource Management

ICT Information and Communication Technology

LOGIS Logistic Information System

MACC Minimum Anti-Corruption Capacity

MEC Member of Executive Council

MFM Municipal Finance Management

MFMA Municipal Finance Management Act

MTEF Medium Term Expenditure Framework

OHS Occupational Health and Safety

PAIA Promotion of Access to Information Act

PAJA Promotion to Administrative Justice Act

PAM Physical Asset Management

PDMS Performance and Development Management System

PERSAL Personnel and Salary Information System

PFMA Public Finance Management Act

PSDF Free State Provincial Spatial Development Framework

PSRMF Public Sector Risk Management Framework

QPR Quarterly Performance Report

SDIP Service Delivery Improvement Plan

SMS Senior Management Service

TR Treasury Regulations

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3. FOREWORD BY THE MEC

One of the key focus areas of the Habitat

for Humanity conferences meant for the

world‟s united attention to common goals for

human settlements development, is

premised on the fact that, „a large segment

of the world's population lacks shelter and

sanitation, particularly in developing

countries. We recognize that access to safe

and healthy shelter and basic services is

essential to a person's physical,

psychological, social and economic well-

being, and should be a fundamental part of

our urgent actions for the more than one

billion people without decent living

conditions. Our objective is to achieve

adequate shelter for all, especially the

deprived urban and rural poor, through an

enabling approach to the development and

improvement of shelter that is

environmentally sound.‟ (The Habitat Agenda

Goals and Principles, Commitments and the Global Plan of Action, United Nations Habitat 11

Conference)

The Millennium Development Goals targets for human settlements have gone unfulfilled,

globally. This is due to a number of various factors such as increasing world population, global

economic collapse resulting in high unemployment and urbanisation leading to increased need

for urban accommodation and related services. This is particularly accurate in our country.

Our own National Development Plan, through its Chapter 8, Transforming human settlement

and the national space economy, acknowledges that we have made strides since 1994 but still

much more needs to be done. Within this context, the year under review saw us contributing

to these goals of creating a better life through integrated and sustainable human settlements.

MEC SH NTOMBELA

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We also focused on aligning ourselves with achieving the country‟s key priorities through human

settlements development.

The 2015-2016 financial year saw an escalation in demands placed on government for

increased and improved provision of services including human settlements. The latter being

significant at each public meeting and where there were, unfortunately, protests. This increased

need for government intervention in provision of decent shelter is however a worldwide trend as

indicated in the United Nations statistics above.

Our well intended effort to provide residents with quality houses that restore dignity and serve

as a basic need that would contribute towards building a self sustaining nation, has meant that

these resources become limited, thus restricting us to reaching more of our people. Another

factor that became significant in the last financial year is the sales of government subsidised

houses, the rise in child-headed households and more of our incomplete projects which led to

most of our people, especially the elderly, not housed decently.

Our programme for addressing title deeds backlog, a national priority, also took off at a slow

pace due to credible obstacles such as incomplete or incorrect beneficiary and site information,

and our own systems in the process of issuing title deeds. Most of these were addressed in the

financial year, making way for easier and faster processes in the current and subsequent years.

In this context, we reached out to many of our Free State citizens who were in dire need of

decent shelter. In some instances we went out of our planned scope and built houses for those

in worst case scenarios. In other instances, we worked with the private sector such as where a

total of 10 houses were built in various towns by Standard bank as a donation to the province.

These were built for elderly citizens in Heidedal. Of significance was the completion of

rebuilding some 2 room houses in various towns in the province. Mme Maine in Freedom

Square, Bloemfontein, is one of our beneficiaries who, after almost 30 years of living in a two

room house , in which all of her family of 6 including herself lived, got to move into a new home.

Here we proudly witnessed provision of decent homes and true security of tenure. On the same

street lives 2 child headed households that also benefitted from this programme.

Land ownership is one of the country‟s key focus areas. Our programme for informal

settlements upgrading, took off through mainly land acquisition, land planning and infrastructure

development, as we worked towards initiating among others, catalytic projects for programmes

such as Informal Settlements Upgrading, Community Residential Units and Social Housing

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rental options, Finance Linked Individual Subsidy Programmes, and mixed developments in

various areas of the province.

We continued to strive for improvement of the lives of our people through developing human

settlements that seek to redress the imbalances of the past, create and make use of a better

spatial economy.

Focusing on Agenda 2030, efforts by the department will ensure compliance with our obligations

as per the Freedom Charter, the Constitution, the Breaking New Ground Plan and in turn

address the apartheid spatial divide that continues to dominate the landscape of our land,

retarding the growth desired by our Vision 2030.

Through our sustainable and integrated human settlements, we are committed to changing the

lives of our people for the better.

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SH NTOMBELA (MPL) MEC FOR COOPERATIVE GOVERNANCE, TRADITIONAL AFFAIRS AND HUMAN SETTLEMENTS

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2. REPORT OF THE ACCOUNTING OFFICER

Overview of the operations of the department

It must be stated forthright that the 2015/2016

Annual Report was delayed for tabling due to

a formal dispute that was lodged by the

Department of Human Settlements against

the Auditor General of South Africa (AGSA).

The following issues formed part of the

dispute:

Irregular expenditure write-off

Accruals

Several meetings were held between the

department and AGSA in order to resolve the

outstanding matters; and all matters have

been resolved.

The department‟s performance in the year

under review met most of its planned targets

as detailed in the rest of the annual report.

This despite a smaller budget with increased

targets and responsibilities.

Challenges associated with the built environment such as price increases of materials beyond

our control, which affect entry level contractors, has added to the slower rate of delivery. The

general uneasiness of the labour market has not left the built environment, including our own

contractors, unscathed by protests as workers demand more for their labour.

Equally, labour issues such as disagreements between contractors and subcontractors

including their workers has at times retarded progress in some of our projects. These were

however holistically attended to and finally resolved through normal labour processes of intense,

and often prolonged negotiations.

HOD: NTHIMOTSE MOKHESI

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Our human settlements programmes also targeted achieving other key priority areas of

government such as creation of employment, economic development and skills development.

We have employed over 30 contractors who also further employed subcontractors in various

fields of construction, adding to increased employment figures in various towns of the province

and adding to improved employment figures nationally. Our employment criteria targets

members of communities where these houses are built, with a view to providing skills

development and job opportunities for possible life time experience. To this effect, we have

managed to structure our agreements with contractors such that this is taken into account

where possible and managed to a great extent to have members of local communities employed

in some of our construction work.

Overall internal environment was affected by limited staff numbers however, most strategic and

critical posts were filled.

Our various programmes in total, yielded satisfactory results with 4831 units completed. The

Community Residential Units (CRU) programme for example, had projects completed in

Zamdela and Virginia, and construction of new rental stock in Hillside View, Dark and Silver

City, progressed to advanced stages in Bloemfontein. Hillside View is part of integrated

residential units as we seek to address spatial and social disparities and bring our people closer

to work. Our Breaking New Ground (BNG) houses have also made significant change in the

lives of many of our people throughout the province.

The Nic Ferreira Breaking New Ground houses in Sasolburg CBD, which form part of the

Zamdela CRU project to cater for those beneficiaries who opted to have their own homes

versus rental as offered by CRU, directly address spatial disparities and foster social cohesion.

These are some of the first fully subsidised government houses to be built in or close to a

Central Business District, and in an area previously set aside for white communities.

Despite challenges mentioned above, the department continued to provide homes of good

quality in all of our programmes such as Military Veterans, Land Restitution, rental options,

finance linked programme and more. We contributed to the country‟s 4.5 million housing

opportunities thus far, ensuring that we live to the Freedom Charter‟s clause, „There shall be

houses, security and comfort‟.

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For this significant progress in providing human settlements, I would like to thank the MEC for

her guidance and all staff for their role in ensuring that the people of the Free State are housed

in decent homes.

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N MOKHESI HOD: DEPARTMENT OF HUMAN SETTLEMENTS

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4.1 Overview of the financial results of the department

Departmental receipts

Departmental receipts

2015/2016 2014/2015

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

Tax Receipts - - - - - -

Sale of goods and services other than capital assets

85 130 (45) 96 425 (329)

Interest, dividends and rent on land

13 8 5 8 7 (2)

Financial transactions in assets and liabilities

200 317 (117) 768 724 40

Total 298 455 (157) 872 1156 (288)

The department collected R317 000 revenue from various sources including sale of tender

documents mainly, and garnishee orders.

Details of the determination of tariffs

Applicable Category

Proposed Tender

Documents Fees for

2015/16

A: R300 000 - R499 999 R 100.00

B: R500 000 - R2 000 000 R 250.00

C: R2 000 001 - R5 000 000 R 320.00

D: R5 000 001 - R10 000 000 R 400.00

E: R10 000 001 - R15 000 000 R 550.00

F: R15 000 001 and Higher R 1 200.00

A: A4 - Single Sided R 0.70

B: A4 - Double Sided R 1.20

C: A3 - Single Sided R 2.20

D: A3 - Double Sided R 3.40

All Departments

All Departments

Charges Per Value of Tender

Charges Per Value Copy - Value Less Than R300 000

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Programme Expenditure

The table below provides a summary of the actual expenditure in comparison with the adjusted

appropriation for both the current year and previous year at programme level.

Programme

Name

2015/2016 2014/2015

Final Appropriati

on

Actual Expenditur

e

(Over)/ Under

Expenditure

Final Appropriatio

n

Actual Expenditur

e

(Over)/Under

Expenditure

R’000 R’000 R’000 R’000 R’000 R’000

Administration

86 564 80 316 6 248 80 485 77 314 3 171

Housing Needs,

Research & Planning

18 232 17 145 1 087 18 553 17 607 946

Housing Development

1 135 650 1 121 766 12 884 1 128 216 1 111 861 16 355

Housing Assets

Management

865 805 60 964 770 194

Total 1 241 311 1 221 032 20 279 1 228 218 1 207 552 20 666

Virements

There were savings identified in Programme 1: Administration, from compensation of

employees. These were diverted to the same item in Programme 3: Housing Development.

Rollover

The department received the first allocation amounting to R14.886 million from the national

Department of Military Veterans for construction of housing units for qualifying Military Veterans

in March 2015. A request for a roll-over amounting to R 14.886 million was submitted by the

department and approved by Provincial Treasury for the 2015/16 financial year.

Unauthorised, fruitless and wasteful expenditure

No unauthorised, fruitless and wasteful expenditure was incurred by the department in the

2015/16 financial year.

Future plans of the department

The department does not have intentions for any new activities for the next financial year.

Public Private Partnerships

The department did not pursue any Public Private Partnerships for the financial year under

review.

Discontinued activities / activities to be discontinued

There has been no discontinued activities during the period under review.

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Supply Chain Management

o The department did not conclude any unsolicited bids during the financial year under

review.

o The department has the following systems to prevent irregular and wasteful expenditure:

a) Contractor database has been established to ensure that the department complies

with legislative prescripts.

b) A register of deviations from Supply Chain Management process has been

developed and is maintained.

c) The register has been developed to ensure that all irregular expenditure are duly

recorded and disclosed in the Annual Financial Statements. This register is

monitored on regular basis and investigations are performed to determine the

underlying reasons and accountability.

d) A checklist has been developed and maintained for each payment to identify and

detect irregular expenditure.

Challenges

The database of contractors has been compiled to ensure that all housing projects are

concluded in line with PFMA and not according to Housing Codes.

Gifts and donations received in kind from non-related parties

A donation of R50 000.00 was received from Ernst and Young Consultants for the Govan

Mbeki Awards.

Exemptions and deviations received from National Treasury

The department did not apply or receive any exemptions from Provincial or National Treasury

for the reporting requirements for the current financial year.

Events after the reporting date

No significant events occurred after the reporting date.

Related Party Transactions

The Housing Fund falls under the administration of the Department of Human Settlements and

shares the same Accounting Officer. Once the fund ceases to operate, the bank balance is

surrendered to the department.

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The Department of Cooperative Governance and Traditional Affairs rendered a shared service on the

following directorates within Programme 1 to the Department of Human Settlement: Anti-corruption

and Security, Information Technology and Communication services. The Department of Cooperative

Governance and Traditional Affairs also paid certain invoices on behalf of the Department of Human

Settlements with regard to SITA services and the MEC‟s Outreach Programme that is recorded in the

inter-governmental payables. Due to the complexity of the shared services between the departments,

it is impractical to include an exact amount of the shared service and therefore no value for this

service can be attributed to these transactions. The department has agreed that no value for these

services be exchanged.

Department of Public Works entered into an agreement with the department as account administrator

of the Caledon Park 71 Project as well as the Cornelia project for the construction of 42 houses.

The Provincial Treasury is also a related party due to the management of the transversal financial

systems like LOGIS, BAS and PERSAL. The Department of the Premier is a related party due to the

management of the telephone system, placement of adverts and provincial events such as the ICT

Summit.

Acknowledgement and Appreciation

I appreciate the hard work by the officials of the department in ensuring that services are

rendered to our communities. I also appreciate the guidance provided my MEC and the

Executive Council in ensuring that our people our housed in decent homes and their security of

tenure is assured.

Approval and sign off

The Annual Financial Statements set out on pages 117 to 188 have been approved.

_________________ N. MOKHESI HOD: HUMAN SETTLEMENTS

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5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY OF THE ANNUAL REPORT

To the best of my knowledge, I confirm that:

All information and amounts disclosed throughout the annual report are consistent.

The annual report is complete, accurate and is free from any omissions.

The annual report has been prepared in accordance with the guidelines on the annual report as

issued by National Treasury.

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.

The Accounting Officer is responsible for the preparation of the annual financial statements and

for the judgements made in this information.

The Accounting Officer is responsible for establishing, and implementing a system of internal

control that has been designed to provide reasonable assurance as to the integrity and reliability

of the performance information, the human resources information and the annual financial

statements.

The external auditors are engaged to express an independent opinion on the annual financial

statements.

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 2016.

Yours faithfully

___________________

N. MOKHESI HOD: HUMAN SETTLEMENTS

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6. STRATEGIC OVERVIEW

6.1 Vision

Integrated and sustainable human settlements

6.2 Mission

The department will develop cohesive, sustainable and integrated human settlements in the Free State

6.3 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.

7.2 Legislative Mandates

7.2.1 Public Finance Management Amended Act, 1999 (Act 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.

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7.2.2 Public Service Act, 1994 (Act 103 of 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.

7.2.3 Public Service Laws Amendment Act, 1997 (Act 47 of 1997 and 86 of 1998)

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

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.

7.2.4 Skills Development Act, 1998 (Act 97 of 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 Learnerships that lead to recognised

occupational qualifications; to provide for the „financing of skills development by means of a

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levy-grant scheme and a National Skills Fund; to provide for and regulate employment services;

and to provide for matters connected therewith.

7.2.5 Labour Relations Act, 1995 (Act 66 of 1995)

The Labour Relations Act and collective agreements shall regulate matters of mutual interest

between employees and the State as employer.

7.2.6 Preferential Procurement Policy Framework Act, 2000 (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.

7.2.7 Division of Revenue Act 2015/16 (Act 1 of 2015)

To provide for the equitable division of revenue raised nationally among the national, provincial

and local spheres of government for the 2015/16 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 co-operative governance and intergovernmental relations; and to provide for

matters connected therewith.

7.2.8 Conversion of Certain Rights into Leaseholds or Ownership Act, 1998 (Act 81 of 1988

This Act provides or 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.

7.2.9 Black Communities Development Act, 1994 (Act 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.

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7.2.10 Upgrading of Land Tenure Rights Act, 1991 (Act 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.

7.2.11 Interim Protection of Informal Land Rights Act, 1996 (Act 31 of 1996)

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.

7.2.12 The Housing Act, 1997 (Act 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, 1997. 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:

(i) is economically, fiscally, socially and financially affordable and sustainable

(ii) is based on integrated development planning

(iII) is administered in a transparent, accountable and equitable manner, and upholds

the practice of good governance (Section 2(1)(c)).

7.2.13 Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, 1998 (Act 19 of

1998)

The Prevention of Illegal Eviction from and Unlawful Occupation of Land Act was promulgated in

1998. 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.

7.2.14 The Housing Consumers Protection Measures Act, 1998 (Act 95 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

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building industry by formulating and enforcing a code of conduct. The implementation of the Act

is monitored continuously.

7.2.15 The Rental Housing Act, 1999 (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 rental-housing 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.

7.2.16 Home Loan and Mortgage Disclosure Act, 2000 (Act 63 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 2003.

7.2.17 Subdivision of Agricultural Land Act, 1970 (Act 70 of 1970)

This Act is used for Town Planning advice to the Department of Land Affairs on the subdivision

of agricultural land.

7.2.18 The Development Facilitation Act, 1995 (Act 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.

7.2.19 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 town-planning schemes. The townships

board is also instituted in terms of this ordinance.

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7.2.20 Disestablishment of South African Trust Limited Act, 2002 (Act 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, 2002.

7.2.21 The Removal of Restrictions Act, 1967 (Act 84 of 1967)

In terms of this act land use is changed either by means of title conditions or rezoning.

7.2.22 The Less Formal Township Establishment Act, 1991 (Act 113 of 1991)

This Act is specifically for guiding rapid township establishment where housing is in dire need.

7.2.23 The Physical Planning Act, 1991 (Act 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.

7.2.24 Public Audit Act, 2004 (Act 25 of 2004)

Regulates the audit of Government Departments and State Owned Enterprises.

7.2.25 Social Housing Act, 2008 (Act 16 of 2008)

Regulates the Social Housing Market

7.2.26 Spatial Planning and Land Use Management Act, 2013 (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.

7.2.27 Housing Development Agency Act, 2008 (Act 23 of 2008)

The Act establishes the Housing Development Agency; provides for its functions and powers;

and provides for matters connected therewith.

The objects of the Housing Development Agency are to:

o Identify, acquire, hold, develop and release state, communal and privately owned land

for residential and community purposes and for the creation of sustainable human

settlements

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o Project manage housing development services for the purposes of the creation of

sustainable human settlements

o Ensure and monitor that there is centrally coordinated planning and budgeting of all

infrastructure required for housing development, and

o Monitor the provision of all infrastructures required for housing development.

Implications

The Free State Department of Human Settlements has concluded a Development Agreement

with the HDA, and any future agreements should be aligned to the objects of the Agency.

7.2.28 National Environmental Management Act, 1998 (Act 107 of 1998)

The National Environmental Management Act (NEMA) (Act No. 107 of 1998) provides for co-

operative environmental governance by establishing principles for decision-making on matters

affecting the environment, institutions that will promote cooperative governance and procedures

for co-ordinating environmental functions exercised by organs of state; for certain aspects of the

administration and enforcement of other environmental management laws; and for matters

connected therewith.

Section 24 of NEMA prohibits the undertaking of activities (including housing development)

without the assessment of the impact of these activities on the environment, and subsequent

authorisation from the designated competent authorities.

Implications

All housing developments require an environmental authorisation before the development or

any construction activities may proceed, which may include an environmental impact

assessment process.

7.3 Policy Mandates

7.3.1 National Development Plan

Chapter nine of the National Development Plan (NDP), Transforming Human Settlements,

addresses various housing/settlement issues South Africa is currently facing. In terms of

transforming human settlements, the NDP states the following objectives:

o Strong and efficient spatial planning system, well integrated across the spheres of

government.

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o Upgrade all informal settlements on suitable, well-located land by 2030.

o More people living closer to their places of work.

o Better quality public transport.

o More jobs in or close to dense, urban townships.

7.3.2 National Spatial Development Perspective

The National Spatial Development Perspective (NSDP) became national policy in 2002 and was

revised 2006. The key objectives of the NSDP are to:

o Provide a framework for discussing the space economy taking deprivation, resources,

infrastructure and potential economic activity into account;

o Establish a common reference point for national, provincial and local government to analyse

and debate the development potential of different places in the country;

o Identify key areas of tension and/or priority in achieving positive spatial outcomes with

government infrastructure investment and development spending; and

o Provide national government‟s strategic response to the above for a given timeframe.

7.3.3 The Housing Code, 2009

Government has introduced a variety of programmes which provide the poor households access

to adequate housing in terms of the Housing Act, 1997 (Act No 107 of 1997). The policy

principles set out in the White Paper on Housing aim to provide poor households with houses as

well as basic services such as potable water and sanitation on an equitable basis.

The National Housing Code; 2000 was substantially revised and consequently the new National

Housing Code, 2009 was introduced. The 2009 Code is aimed at simplifying the implementation

of housing projects by being less prescriptive while providing clear guidelines.

The National Housing Code, 2009 further sets the underlying policy principles, guidelines,

norms and standards that apply to Government‟s various housing assistance programmes

introduced since 1994 and subsequently updated.

7.3.4 Comprehensive Plan for Sustainable Human Settlements (Breaking New Ground)

Ten years after the introduction of the housing programme in 1994, a comprehensive review

was undertaken of the outcomes of the programme and the changes in the socio-economic

context in the country. This lead to the approval of the Comprehensive Plan for Sustainable

Human Settlements commonly referred to as “Breaking New Ground” or “BNG”, by Cabinet in

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September 2004. While retaining the basic principles of the Housing White Paper, the

Comprehensive Plan shifts the focus to improving the quality of housing and housing

environments by integrating communities and Settlements.

The plan also sets new minimum standards for housing products, improving privacy and

sustainability by providing for the development of a range of social and economic facilities as

part of housing projects.

The Comprehensive Plan also focuses on Informal Settlements Upgrading to meet the

Millennium Goals of the United Nations to improve the lives of slum dwellers.

7.3.5 2014-2019 Medium Term Strategic Framework

The national Department of Human Settlements has developed a Draft Framework to achieve

Outcome 8, and the National Development Plan (NDP) Vision 2030. The Strategic Framework

covers the medium term from 2014-2019. The draft 2014-2019 Medium Term Strategic

Framework focuses on policy and funding reforms to achieve:

Better spatial planning to better target resource allocation

Ensuring that poor households have adequate housing in better living environments

Supporting the development of a functionally and equitable residential property market

Improving institutional capacity and coordination.

7.3.6 Free State Growth and Development Strategy

The revised Free State Growth and Development Strategy (FSGDS) recognises the value of

creating the environment, institutions, processes and mechanisms crucial for inclusive growth

and development and produced Free State Vision 2030, aligned with the National Development

Plan.

Driver 9: Facilitate sustainable human settlements of the FSGDS states that the status of

human settlements is in mostly extremely low densities, low levels of efficiency and long

distances between places of employment and places of work. In order to improve economic

efficiency, the FSGDS proposes that efficient resource use should be prioritised.

27

7.3.7 Provincial Spatial Development Framework

The Free State Provincial Spatial Development Framework (PSDF) is a provincial spatial and

strategic planning policy that responds to, and complies with the relevant legislation and policy.

Spatial Planning and Land Use Management Act (SPLUMA) provides for all spheres of

government to compile and publish a spatial development framework. The NDP encourages all

spheres of government to prepare SDFs that promote a developmental state in accordance with

the principles of global sustainability.

7.3.8 State of the Nation Address (SONA)

Through the SONA, the State President announces the National commitments of government

in service delivery for that particular performance/ financial year.

7.3.9 State of the Province Address (SOPA)

During the State of the Province Address, the honourable Premier of the Free State Province

announces the Provincial government priorities on service delivery which are aligned to the

State of The Nation Address.

7.3.10 Human Settlements Strategy for the Free State Province

The purpose of the Free State Human Settlements Strategy is to guide a longer term spatial and

investments perspective that will inform the programming of human settlements projects in the

Province.

7.3.10 Intergovernmetal structures

(a) President‟s Coordinating Council

The forum provides for the engagement of relevant stakeholders at national level to

ensure that the national government objectives are realised.

(b) Premier‟s Coordinating Forum

The forum provides for the engagement of relevant stakeholders at provincial level to

ensure that the provincial government objectives are realised.

7.3.12 Provincial Specific Programme

Operation Hlasela

This is a specific provincial programme focusing on intergrated service delivery. All departments‟ activities are coordinated to ensure intergrated human settlements.

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7. ORGANISATIONAL STRUCTURE

MACRO STRUCTURE: DEPARTMENT OF HUMAN SETTLEMENTS UPDATED june 2016 MACRO STRUCTURE: DEPARTMENT OF HUMAN SETTLEMENTS UPDATED june 2016 MACRO STRUCTURE: DEPARTMENT OF HUMAN SETTLEMENTS UPDATED june 2016 MACRO STRUCTURE: DEPARTMENT OF HUMAN SETTLEMENTS UPDATED june 2016 MACRO STRUCTURE: DEPARTMENT OF HUMAN SETTLEMENTS UPDATED june 2016

OFFICE OF THE MEC

All personnel appointed on a contract basis ito the Ministerial Handbook

SEC MAN & ANTI-CORRUPTION

1. Security Management (security clearances, vetting, physical security, information security, security risk identification and -mitigation)2. Anti-Corruption (fraud prevention awareness, investigations and and reporting, qualifications verfications)

1 Director L13 (JE done) (vacant)

OFFICE OF THE HoD

1. HoD Office Support (Reception, Registry, Appointment Management)2. Coordination of information / reports for HoD3. Secretariat to Executvie - / Senior Management Committee4. Special Programmes related to Youth, disability, Gender Mainstreaming, etc.

1 Office Manager L13 (JE done) (advertised)(appointment to be done on contract basis linked to term of Office of HoD)

INTERNAL AUDIT

1. Internal Audit planning, mitigation and reporting2. Accounting, financial and operating control reviews3. Management of financial interests declarations

1 Chief Internal Auditor L13 Themba O

LEGAL AND CONTRACT SERVICES

1. Legal opinions, legislation2. Litigation / liaison with State Law Advisors3. Housing and Departmental Contracts1 Director L13 Tsuaeli T

HUMAN SETTLEMENT DELIVERY PLANNINGAND PERFORMANCE MONITORING

1. Policy Development and Research2. HS Delivery Planning and Development (including the Multi-Year HS Delivery Plan and the alignment of the Housing Chapters of IDPs)3. Planning iro the Provincial HS Demand Database3. Infrastructure Planning4. Sector Participation Facilitation (on planning)5. HS Impact Assessment

1 Director L13 Mosikili J

STAKEHOLDER ENGAGEMENTAND MOBILIZATION

1. Programmes Planning and Public Fund Synchronisation2. Stakeholder Man. and Partnerships3. Capacity building4. Community Empowerment5. Human Settlement IGR1 Director L13 Somiah C

INFORMAL SETTLEMENTS AND LAND TENURE

1. Land Acquisition and Disposals2. Informal Settlement Planning3. Land Tenure Services (includes Agri-villages)4. Urban and Rural Development5. Land Assembly Programme

1 Director L13 Reachable T

HS DEVELOPMENT PLANNING

1 Chief Director L14 Tlali C

PROGRAMME DESIGNINGAND ALLOCATION MANAGEMENT

1. Maintenance of the Housing Demand Database2. Subsidy Allocation Management and Oversight (as per the HS Demand Database)3. Beneficiary Approval and Oversight4. Secretariat to Housing Adv Panel,Rental Tribunal and Mini EXCO

1 Director L13 Rigard M

PRIORITY AND INTERVENTIONPROGRAMMES

Development of implementation strategies andperforming oversight functions iro the following: - People Housing Processes - Farm Worker Development Programme - Other HS Priority Programmes e.g. veterans, etc.

1 Director L13 Seeku S

AFFORDABLE HOUSING PROGRAMMES

Development of implementation strategies andperforming oversight functions iro the following: - Social Housing - Rental Housing - Asset / Property Management - Community Residential Units - Financial Interventions1 Director L13 Madibane P

XHARIEP 16

1. Assist and support the implementation of various human settlement programmes within the District2. Liaise with municipalities and other stakeholders on matters related to human settlements3. Monitor and report on the status of housing projects in the District

1 Director L13 Vacant

MANGAUNG OFFICE

1. Assist and support the implementation of various human settlement programmes within the Mangaung area2. Liaise with municipalities and other stakeholders on matters related to human settlements3. Monitor and report on the status of housing projects in the Mangaung area


LEJWELEPUTSWA OFFICE



FEZILE DABI OFFICE



QWAQWA OFFICE


1 Director L13 Hleli M

HS PROGRAMME IMPLEMENTATION

1 Chief Director L14 Mohale M

HUMAN SETTLEMENT INFRASTRUCTUREDEVELOPMENT AND -MANAGEMENT

1. Infrastructure Roll-Out2. Socio-Economic Amenities3. Greening and Land Scaping4. Waste Management5. Water and Sanitation (rural and urban)


HOUSING PROJECTPLANNING AND - MANAGEMENT

1. Project Planning and - Integration2. Project Interventions / Advice3. Project Management and Capacity Building (engineering / technical)4. Project Monitoring and Reporting (Project Management Office) - also including "War Room"5. Housing Contract Administration


TECHNICAL SERVICES

1. On-site Inspections2. Geotech Reports3. Norms and Standards4. Quality Control5. Enrollment with NHBRC


HS PROJECT MANAGEMENT

1 Chief Director L14 Mokoena L

HUMAN SETTLEMENT PLANNINGAND - DELIVERY

1 Deputy Director-General L15 Monyela C

FINANCIAL & BUDGET MANAGEMENT

1. Budget Management

2. Financial Management


SUPPLY CHAIN- AND ASSET MANAGEMENT

1. Demand, Planning and Performance Management2. Asset and Transport Management3. Acquisition and Contract Management1 Director L13 Matlakala M

FINANCIAL AND -SUPPLY CHAIN MANAGEMENT

1 Chief Financial Officer L14 Molikoe N

DEPARATMENTAL PLANNING ANDPERFORMANCE MANAGEMENT

1. Strategic - and Operational Planning2. Service Delivery Planning and -Improvement3. Organizational Development4. Employee Performance Management1 Director L13 Ramakatsa M

HUMAN RESOURCES MANAGEMENTAND - DEVELOPMENT

1. Employee Health and Wellness2. Skills Development3. HR Planning and Administration4. Labour / Employee Relations

1 Director L13 Matiwane A

INFORMATION, COMMUNICATION ANDAUXILIARY SERVICES

1. Corporate Communication2. Information Technology3. Auxiliary and Support Services * Physical Planning * Record Management * Driver / Messenger Services * Reproduction Services1 Director L13 Vacant

RISK MANAGEMENT

1. Risk Planning and Advice2. Risk Mitigation, Monitoring and Reporting1 Deputy Director L11 Ntshangase T

CORPORATE SERVCIES

1 Chief Director L14 Mokoena T

DEPARTMENT OF HUMAN SETTLEMENTS

Head of Department L16 Mokhesi N

MEMBER OF THE EXECUTIVE COUNCIL:COOPERATIVE GOVERNANCE, TRADITIONAL

AFFAIRS AND HUMAN SETTLEMENTS

29

PART B PERFORMANCE INFORMATION

30

1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES

The Auditor General of South Africa (AGSA) performed audit procedures on the performance

information to provide reasonable assurance in the form of an audit conclusion. The audit

conclusion on the performance against predetermined objectives is included in the report to

management, with material findings being reported under the Predetermined Objectives

heading in the Report on other legal and regulatory requirements section of the auditor‟s report.

Refer to page 107 of the Report of the Auditor General, published as Part E: Financial

Information.

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE

2.1. Service Delivery Environment

Main services Beneficiaries Current/actual standard of service

Desired standard of service

Actual achievement

Building of houses Citizens Deals with all houses under construction towards improving the quality of houses

Maintain 4831

Connection of basic services as part of Integrated Residential Development

Citizens Connecting basic services to beneficiaries

Maintain 2388

Consumer Education

Citizens Housing capacity building targeting beneficiaries

Maintain 4633

Affordable housing Citizens Deals with the management of social and rental housing

Maintain CRU 108 Social housing 33

2.2. Service Delivery Improvement Plan

Type of arrangement

Actual customers Potential customers Actual achievements

3 year service delivery improvement plan document

Citizens

Beneficiaries of housing SDIP for 2015/2018 is approved.

Service Charter approved.

Service standards approved.

Service delivery access strategy Access strategy Actual achievement

Telephonically Central switchboard receiving call and refer customers to the relevant office or official where they can be assisted

Electronic media Website available: www.fs.gov.za

Departmental Imbizos and MEC site visits

Quarterly imbizos and MEC site visits are conducted quarterly

Questionnaires Questionnaires are used by communication office to determine the

http://www.fs.gov.za/

31

satisfaction level of our citizens

Media Monthly provincial Hlasela newspaper showcases success or achievements of the department and also on Hlasela TV media platform

Seminars Seminars are regularly conducted by the consumer education office to educate the citizens about housing related matters

Radio Regular media briefing by the MEC on different radio stations across the province

Summits Anti-corruption strategy, Free State Growth and Development Strategy Summit

Pamphlets Communication office regularly distributes relevant pamphlets such as FLIPS, BNG, CRU pamphlets, etc.

Housing Subsidy System Mobile Truck The HSS Truck regularly visits different town and rural communities in order to cater for citizens who cannot access districts or provincial office particularly first time housing applicants

Information brochures Departmental information captured in the Annual Report and Annual Performance Plan is printed and made available at libraries to ensure accountability and transparency

Exhibitions Exhibitions are continuously held at all Operation Hlasela campaigns where different departments show case their services

Service information tools TYPES OF INFORMATION TOOLS ACTUAL ACHIEVEMENT

Telephonic and per facsimile as available per telephone directory

Switchboard and Help Desk receive calls from Monday to Friday 07:30 -16:00

Info desk at ground floor of OR Tambo Building 7

th Floor

Two frontline officials are permanently positioned at the information desk Monday to Friday 07:30 to 16:00

Correspondence to physical and postal address

OR Tambo Building, Cnr Markgraaff & St Andrews Street P.O Box 6644, Bloemfontein, 9600

Internet as per Web Site www.fspg.gov.za www.gitoc.fs.gov.za

E-mail and intranet All officials have e-mail addresses and information also can be accessed globally on the intranet

Complaints mechanism

Complaints mechanism Actual achievement

Complaints, compliments or suggestion boxes

None displayed since provincial human settlements department is sharing the building (OR Tambo) with 3 other departments. The departmental complaints and compliment policy is at a draft stage

Telephonic, facsimile as per telephonic directory

Provincial directory of government services is updated annually by the office of the Premier and contains contacts, offices of all directorates of different departments including Human Settlements directorates

Provincial Toll-free number and Presidential hotline

Toll-free line: 0800 600 224 and 17737

Walk inns complaints Are handled by help desk frontline staff positioned at OR Tambo Building, 7

th Floor

MEC intervention staff Intervention officers are deployed in every district offices to handle housing related complains and regularly visits sites and citizens to interface with housing beneficiaries

http://www.fspg.gov.za/

http://www.gitoc.fs.gov.za/

32

2.3. Organisational environment

The developments of 2015/2016 are as follows:

Programme 1

The MPAT 1.5 (2014/15 assessment period) results have improved to 52%. This proves that the

department is aiming towards the realization of Outcome 12, An efficient, effective and

development oriented public service. An improvement plan has been drafted in to facilitate

improvement in Key Performance Indicators where targets were not achieved.

As per the Auditor General, there must be activities in budgeted Sub Programmes (Administration)

that are in accordance with Chapter 1.1 of the Framework for Managing Programme Performance

Information (FMPPI); the matter will be taken into consideration during in drawing up the APP for

2017/2020.

Programme 2

Approval from Treasury for condoning capturing KPI (No. of projects approved).

At the end of the fourth quarter 178 projects were approved.

In the 2014/2017 and 2015/2018, Strategic Plan, under Sub-programme: Research, the target

for Performance Indicator which is, No. of projects approved, was erroneously captured.

Instead of the target for researched projects, the target that was captured was for approved

housing projects. The performance target achieved which was reported was based on housing

projects approved instead of researched projects. This led to misstatement of information as

indicated by the Auditor General. The error was picked up by the Auditor General during the

audit of 2014/2015.

At the time, it was not possible for the department to amend the Annual Performance Plan

(APP) as it was already tabled at the Legislature. Also taking into consideration the conditions

put forth by Treasury in amending the APP, it was also realised that it would not be acceptable

for the department to state the erroneous capturing of the target as the reason to amend the

APP. The department therefore states, as its action plan for correcting the error, that it will be

corrected in the APP for 2016/2019. It was also indicated that the department will request in

writing that the Treasury condones the action of erroneous capturing of the target under the

incorrect Performance Indicator of (No. of approved projects) instead of researched projects.

Also that since the APP for 2015/2018 was already approved, it was requested that the

department continues reporting performance progress as per the captured targets reflecting on

the APP for 2015/2018.

The request was lodged with Treasury on 16/11/2015 for approval to condone the reporting of

the target set on sub-programme Research which was erroneously captured in the approved

Strategic Plan of 2015/2018 and to continue reporting progress on captured targets as per the

33

approved and tabled APP OF 2015/2018. Approval was granted by Treasury as consulted with

Department of Planning Monitoring and Evaluation as per the correspondence dated

23/11/2015 with the condition that it must explain the rationale of the error upfront when

reporting on the annual report, hence this narrative report.

Baselines pertaining to performance indicators on Programme 2

The department provided baselines in the APP as per the description contained in paragraph

5.4 of the Framework for Strategic Plans and Annual Performance Plans published by the

National Treasury in August 2010.

It provides that institutions are expected to state the present baseline in respect of each

strategic objective and programme performance indicator. In most instances, the baseline is the

level of performance recorded in the year prior to the planning period. In the case where targets

were set in the previous year and nothing is achieved, 0 has been stated as the baseline and

the comment that nothing was achieved in the previous year reflects as a note in the specific

performance indicator.

Where the indicator was new, and nothing happened in the previous year, 0 is reflected as the

baseline However after the engagement with the AG in establishing the common understanding

of the baseline, the Department developed background determining the basis for the target of

the affected indicators. Performance Indicators affected are the following:

o Performance Indicator: No. of Acts passed and/ or policy approved

The drafting of national framework is the competence of the National Department of Human

Settlements within which the Provincial Departments craft their province specific policy or

legislation. The National Department established a Human Settlement Policy and

Development Task Team that focused on the process of identifying the gaps, research needs,

projects and conducting research to inform future planning and drafting of relevant pieces of

legislation.

In the process of achieving the said indicator as instructed by 2014-2019 MTSF, the

Department hosted and actively participated in the Workshop on the White Paper on Human

Settlements on 28 and 29 October 2015.

o Performance Indicator: A Multi Year Housing Development Plan/ APP developed by

October approved

The Guidelines for Multi Year Housing Development Plans (MYHDP) has been revised and

prepared by the National Department of Human Settlements to guide Provincial Human

34

Settlement Development Plan. It provides a format that will establish consistency across all

Provinces.

The guidelines were revised to set out a framework for the alignment of the provincial multi-

year plans with the National Medium Term Strategic Framework (MTSF). The 2014-2019

MTSF aim is to lay a foundation for the transforming of the functioning of human settlement

making and to strengthen the space economy. In striving to achieve the vision of sustainable

human settlements and improved quality of household life the, DHS will drive effective

programmes to achieve the objectives of government to provide sustainable human

settlements.

In order to enable the national department to achieve the National Development Plan‟s 2030

vision, the provincial Department of Human Settlements must align its strategies and Multi-

Year Housing Development Plan (MYHDP) to the MTSF.

The provincial executive authority should use this opportunity to endorse the MYHDP and

indicate their commitment to ensuring the effective and timeous implementation of the

Provincial MYHDP 2014-2019. It was on this basis that the department set targets for

2015/2018 Annual Performance Plan. The approved provincial MYHDP has been posted on

the departmental website.

o Performance Indicator: Number of research papers completed

The national Department of Human Settlements established a Human Settlement Policy and

Development Task Team that focused on the process of identifying the gaps, research needs,

projects and conducting research to inform future planning and drafting of relevant pieces of

legislation. As a result, the FSPG has embarked on the process of creating a centralized

research unit comprised of multi-disciplinary sciences that will oversee all the research work

for departments and state entities. The process in this regard is at the consideration stage by

forum for Heads of Department (FOHOD) with few modalities being canvassed before this

matter can serve before the Executive Council (EXCO) for final consideration.

The constitution of this unit and its relation with the current research units of the departments

are also matters currently under consideration. The department is in the process of refining its

35

research priorities and needs e.g. informal settlement audit, Land audit, review or compilation

of housing chapters of municipalities.

o Performance Indicator: Number of planned human settlements (housing)

developments based on IDPs and National and Provincial Priorities

The annual target was erroneously omitted in the APP on page 20, however the quarterly target

of 3, also meant as the annual target, was achieved.

o Key Performance Indicators included without annual and quarterly targets

At the time of the development of the 2015-2018 APP, the department had not received an

indication of the Performance Indicators for 2015/2018 from National Department of Human

Settlements. The department used the 2014/2015 indicators published for standardised

performance as the basis for developing performance indicators for 2015/2018. As per the

principle of standardised performance indicators, it is obligatory for the department to include in

the APP quarterly and annual reporting. In the case for 2015/2018, there were Performance

Indicators for which the department did not have plans to achieve. Those Indicators were

reflected in the APP and quarterly targets with zero targets. This became a concern from AG for

developing some Indicators without setting targets (Annually and quarterly).

In response the department referred to correspondence received on 16/07/2015 from National

Department: Human Settlements which confirmed the standardised/customised performance

indicators to reflect on the APP and quarterly and annual reports. Though the correspondence

was received late after the APP was tabled, the department had already utilised 2014/2015

Performance Indicators which were still the same with those communicated with the

Department. The department took note of the guidelines for amending the APP.

The Sector Department of Human Settlements has to create engagement platform for provinces

to deliberate on provincial performance indicators which will be relevant for the province before

publishing the Performance Indicators. The affected performance indicators where no annual

and quarterly targets were set are the following:

Number of municipalities capacitated and supported for human settlements (housing)

development planning.

36

Programme 3

Zero baseline set pertaining to performance indicators on Programme 3.

Performance Indicator: Number of parcels of land identified and transferred to municipalities for

development purposes.

The reason for the zero base is that the land identification usually involves the acquisition and/or

release of state- private and communal-owned land for human settlement development. The

department developed a credible land pipeline for both private and public land parcels. The reason

for deviation on this KPI is due to the fact that the land release negotiation took longer than

anticipated.

This is an MTSF target and the department is required to fast track release of well-located land

for housing and human settlements targeting poor and lower middle income households

Performance Indicator: No. of municipalities capacitated on the successful roll-out and/or

maintenance of the Housing Demand Database (metro and local municipalities) National

Department of Human Settlements embarked on rolling – out and maintenance of Housing

Demand Database. So far only one province has been piloted on the programme. The

department is awaiting training from the national Department of Human Settlements on housing

demand database, to ensure that there is sufficient capacity and skills for the roll-out of the

programme. Hence a zero baseline was set.

The following major achievements for the department were recorded at the end of the year under

review. All figures below were validated based on the source document provided.

o 4 831 new housing units completed in the province across all housing programmes being utilised by

the province

o 2 388 new sites connected to basic water and sanitation services as part of the Integrated

Residential Development Programme

o 1 643 households connected to basic services as part of the Informal Settlements Upgrading

Programme

o 52 FLISP approvals

o 1 575 Special Programmes which includes: Military Veterans, programme, Land Restitution,

Emergency and Provincial specific

37

o 387 Rectification Programme/ Dilapidated

o 433 Incomplete houses

o 2 350 Breaking New Ground

o There was no achievement in recorded in Enhanced Extended Discount Benefit Scheme (EEDBS),

as the process of finalizing the database of conveyancers and their appointment took longer than it

was anticipated.

o 595 title deeds registered as a result of the implementation of Act 81 of 1988 deeds of transfer were

registered in favour of qualifying beneficiaries.

o 962 registered title deeds as a result of the implementation of Act 107 of 1997 deeds of transfer

were registered in favour of qualifying beneficiaries

o Number of hectares of well-located land acquired and or released for human settlement

development, no achievement due to cashflow problems

o 15 380 erven planned and surveyed

o 6 local municipalities, namely, Metsimaholo, Dihlabeng, Matjhabeng, Moqhaka, Maluti a Phofung

were supported towards accreditation, with Mangaung Metro Municipality was supported towards .

level 3 accreditation.

o 16 municipalities were targeted for the expansion of the National Upgrading Support Programme

o 1 227 work opportunities created through human settlements programmes

o 6.6 km of roads constructed in prioritized areas

o 4 633 consumers educated through the consumer education programme:

o 5 human settlements training/skills programmes conducted.

o 5 partnerships established and maintained towards improving human settlements delivery: Capacity

Building, Research, Funding, Internship- experiential training, Housing Institutions

o Emerging youth – and women contractors mentored and supported, nothing was achieved, due to

formalisation of programme in its final stages of completion.

o No. of municipalities capacitated on the successful roll out and or maintenance of the Housing

Demand Database (Metro and Local Municipalities), nothing was achieved the Department is

awaiting training from the National Department of Human Settlements on housing demand

database. The project was piloted in only one province.

o 108 Community Residential Units (CRU) approved, upgraded and converted

o 33 new affordable rental units delivered through Social Housing,

38

Programme 4

Zero baseline set for performance indicators on Programme 4

Key Performance Indicator (KPI) : Number of housing assets maintained

The properties still belong to the Provincial Government and have to be maintained on

request of the tenant.

KPIs included without annual and quarterly targets for indicators on programme 4.

No annual target was set by the department as the indicator was set by national Department

of Human Settlements which provinces were required to include in their APPs and report on.

The province did not have plans for the affected Performance Indicator hence no annual or

quarterly targets were set. The affected indicators on Programme 4 are the following:

o Number of rental units sold to beneficiaries (Rental top structure, and Sites.

o Number of housing assets devolved to municipalities in terms of section 15 of the

Housing Act, 1997: Rental top structure and Sites.

o No. of debtors reduced per financial year.

Challenges

o Cash flow problems

o Human resource capacity constraints

o Low cooperation from our contractors in terms of furnishing the department with certified ID

copies of their workers.

o Non availability of serviced sites from municipalities for military veterans

o Failed mortgage approvals at the banks because of over indebtedness of prospective

applicants.

o Low beneficiary turnover to complete declaration proving status

o Properties are trapped in estates that have not been resolved or registered at the office of

the Master of the High Court.

Remedial action

o Submission of contractors claims for payments will be accompanied by certified copies of

their workers‟ South African identity documents as a precondition for processing.

39

o Intensive workshops on the requirements of the act with the municipalities and consumers in

partnership with stakeholder mobilisation unit will be held.

o Properties to be registered in the Estate name

Baselines

The department has provided baselines in the APP as per the description contained in

paragraph 5.4 of the Framework for Strategic Plans and Annual Performance Plans published

by the National Treasury in August 2010.

It provides that institutions are expected to state the present baseline in respect of each

strategic objective and programme performance indicator. In most instances, the baseline is the

level of performance recorded in the year prior to the planning period. In the case where targets

were set in the previous year and nothing is achieved, 0 has been put as the baseline and the

comment that nothing was achieved in the previous year reflects as a note in the specific

technical indicator.

Where the Indicator was new, and nothing happened in the previous year, 0 is reflected as the

baseline However after the engagement with the AG in establishing the common understanding

of the baseline, the department made commitment to ensure that the AG‟s advice is taken into

consideration in the 2016/2017 technical Indicators.

Key Performance Indicator (KPI) included without annual and quarterly targets

In the process of the development of the APP 2015-2018, the department had not received an

indication from National Department of Human Settlements for the Performance Indicators for

2015/2018. The department used the 2014/2015 published for standardised performance

indicators as the basis for developing performance indicators for 2015/2018. As per the

principle of standardised performance indicators are obligatory for the department to include

in the APP and quarterly and annual reporting. In this case for 2015/2018, there were

Performance Indicators which the department did not have plans on them to can be achieved.

Those Indicators were reflected in the APP and quarterly targets with the targets of 0.

40

This became a concern from AG for developing some indicators without setting targets

(Annually and quarterly). In response the department referred to correspondence received on

16/07/2015 from the national Department of Human Settlements which confirmed the

standardised/customised performance indicators to reflect on the APP and quarterly and

annual reports. Though the correspondence was received late after the APP was tabled, the

department had already used the 2014/2015 performance indicators which were still the same

with those communicated with the department. The department took note of the guidelines for

amending the APP. The sector Department of Human Settlements has to create engagement

platform for provinces to deliberate on provincial performance indicators which will be relevant

for the province before publishing performance indicators.

2.4 Key policy developments and legislative changes

No new policies were developed and no changes made to existing policies.

3. STRATEGIC OUTCOME ORIENTED GOALS

Strategic Goal 1: Creation of a department geared towards service excellence

Strategic Goal 2: Improved housing delivery planning

Strategic Goal 3: Management of Housing Interventions

Strategic Goal 4: Management of housing assets and the Extended Enhanced Discount

Benefits Scheme (EEDBS)

4. PERFORMANCE INFORMATION BY PROGRAMME

4.1 Programme 1: Administration

Purpose: To provide overall management in the department in accordance with all applicable

acts and policies. The programme comprises:

Office of the MEC

Corporate Services

Strategic Objective

To provide administrative support to the department on a continuous basis.

Strategic objectives, performance indicators, planned targets and actual achievements

41

Programme / Sub-programme: Corporate Services

Strategic Objective: To provide administrative support to the department on a continuous basis

Performance Indicator Actual

Achievement

2014/2015

Planned

Target

2015/201

6

Actual

Achievement

2015/2016

Deviation

from

planned

target

Comment

on

deviations

No of Management Performance Assessment Tool (MPAT) implementation/compliance plan based on MPAT 1.4 outcome developed

1 1 1 0 Annual target achieved

Number of MPAT monitoring reports, monitoring compliance and continuous improvement against the set plan


No of suitable accommodation analysis conducted by the department


No. of reports submitted towards monitoring the extent to which records are managed in the department in line with archive requirements.


No of Monthly Key Control Matrix (KCM) reports submitted to Provincial Treasury


No of quarterly Key Control Matrix(KCM) reports submitted to Provincial Treasury


No of reports submitted on the implementation of the departmental communication strategy to improve departmental performance


*No baseline was set in the previous year. The indicator was put in 2015/2016 as the Department planned to comply with archive

requirements in terms of management of records.

Reasons for deviations None recorded as all targets set were achieved.

Strategy to overcome areas of underperformance No strategy to overcome areas of underperformance was developed as all targets set were achieved.

Changes to planned targets No changes were effected on planned targets.

Sub-programme expenditure: Programme 1 Sub-

Programme Name

2015/2016 2014/2015

Final Appropriation

Actual Expenditure

(Over)/Under Expenditure

Final Appropriation

Actual Expendi

ture


R’000 R’000 R’000 R’000 R’000 R’000

Corporate Services

86 564 80 316 6 248 80 485 77 314 3 171

Total 86 564 80 316 6 248 80 485 77 314 3 171

42

4.2 Programme 2: Housing Needs, Research and Planning

Purpose: To facilitate and undertake housing delivery

The programme consists of four sub-programmes:

Administration

Policy

Planning

Research


PROGRAMME 2: HOUSING NEEDS, RESEARCH AND PLANNING

Programme / Sub-programme: Policy

Strategic Objective: To provide a regulatory framework for the Department of Human Settlements


Achievement

2014/2015

Planned

Target

2015/2016

Actual

Achievement

2015/2016

Deviation

from planned

target to

Actual

Achievement

for 2015/2016

Comment on

deviations

No. of Acts passed and/or policy guidelines approved

0 1 0 -1 In the process of

achieving the said

indicator as

instructed by the

2014-2019 MTSF,

the department

hosted and

actively

participated in the

Workshop on the

White Paper on

Human

Settlements on 28

and 29 October

2015.

43

Programme / Sub-programme: Planning



Achievemen

t 2014/2015

Planned

Target

2015/2016

Actual

Achieveme

nt

2015/2016

Deviation

from

planned

target to

Actual

Achieve

ment for

2015/201

6

Comment on

deviations

A Multi Year Housing Development Plan/ APP developed by October approved

0 1 1 0 -

Number of planned human settlements(housing)developments based on IDPs and National and Provincial Priorities

0 3 3 0 The annual target

was erroneously

omitted in the APP

on page 20,

however the

quarterly target of 3

which was meant

also to be the

annual target was

achieved

Number of municipalities capacitated and supported with regard to human settlements(housing) development planning

0 0 0 0 No annual target

was set by the

Department as

Indicator was set by

National to

compulsory reflect

on the provincial

reports. A

correspondence is

available in this

regard

No. of houses enrolled with

NHBRC

14212 4812 9414 +4602 Number is high due

to the backlog

being enrolled

Reasons for deviations and strategies

o The guidelines for Multi Year Housing Development Plans has been revised and prepared by

the national Department of Human Settlements to guide Provincial Human Settlement

44

Departments to fulfil their legal requirement of preparing a Multi-Year Housing Development

Plan (MYHDP). It provides a format that will establish consistency across all provinces.

o The guidelines were revised to set out a framework for the alignment of the provincial multi-

year plans with the National Medium Term Strategic Framework. The 2014-2019 MTSF aim

is to lay a foundation for the transforming of the functioning of human settlement making and

to strengthen the space economy.

o To enable the national department to achieve the National Development Plan‟s Vision 2030, the provincial Department of Human Settlements must align its strategies and MYHDP to the MTSF.

o The provincial Executive Authority should use this opportunity to endorse the MYHDP and

indicate his or her commitment to ensuring the effective and timeous implementation of the Provincial MHDP 2014-2019. It was on this basis that the department set the target for 2015/2018 APP. The approved provincial MYHDP has been put in the departmental website.

Strategy to overcome areas of underperformance Strategies to overcome under-performance are provided in the columns of the tables above.

Changes to planned targets: None

Programme / Sub-programme: Research



Achievement

2014/2015

Planned

Target

2015/2016

Actual

Achievement

2015/2016

Deviation

from

planned

target to

Actual

Achievement

for

2015/2016

Comment on

deviations

Number of projects

approved

73 108 178 +70 This refers to the

number of projects

registered as active

in Housing Subsidy

for the 2015/16 year

Number of research

paper completed

2 2 0 -2 The FSPG has

embarked on the

process of creating a

centralized research

unit comprised of multi

- disciplinary sciences

that will oversee all the

research work for

departments and state

entities.

45

The departments will

still determine the

Research Priorities

and Needs e.g.

informal settlement

audit , land audit ,

review and/or

compilation of housing

chapters of

municipalities etc.

*Reason for not having baseline on research paper is provided above

Reasons for deviations and strategies

o The FSPG has embarked on the process of creating a centralized research unit comprised of

multi - disciplinary sciences that will oversee all the research work for departments and state

entities . The departments will still determine the Research Priorities and Needs e.g. informal

settlement audit , land audit , review and/or compilation of housing chapters of municipalities

etc.

o The process in this regard is at the consideration stage by FOHOD with few modalities being

canvassed before this matter can serve before EXCO for final consideration .

o The make- up /constitution of this unit and its relation with the current research units of the

departments are also matters currently under consideration.

Strategy to overcome areas of underperformance

Strategies to overcome under-performance are provided in the columns of the tables above.

Changes to planned targets: None

Sub-programme expenditure: Programme 2 Sub-

Programme Name

2015/2016 2014/2015 Final

Appropriation Actual

Expenditure (Over)/Under Expenditure

Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000

Administration 2 264 1 904 360 1941 1 874 67

Policy 3 002 2 766 236 2175 2 129 46

Planning 12 966 12 474 492 14437 13 604 833

Total 18 232 17 145 1 087 18 553 17 607 946

46

4.3 Programme 3: Housing Development, Implementation and Planning

Purpose

To provide individual subsidies and housing opportunities to beneficiaries in accordance with

Administration

Financial Interventions

Incremental Interventions

Social and Rental interventions


PROGRAMME 3: HOUSING DEVELOPMENT, IMPLEMENTATION, PLANNING AND

TARGETS

Programme / Sub-programme: Financial Intervention

Strategic Objective: Increase housing opportunities on well- located land

Performance

Indicator

Actual

Achievement

2014/2015

Planned

Target

2015/2016

Actual

Achievement

2015/2016

Deviation

from planned

target to

Actual

Achievement

for 2015/2016

Comment on

deviations

Number of new housing units completed in the province across all housing programmes being utilised by the province

-2 025 4 495

4 831 +336 These are multi-year

projects. 4849 target

was erroneously

captured in the APP on

page 25. The correct

target is 4495 as

captured in the APP on

pages 25 item 4 and 28

item 1

Number of new sites connected to basic water and sanitation services as part of the Integrated Residential Development Programme

-2 564 2 086 2 388 +302 These are multi-year

projects

47

Number of households connected to basic services as part of the Informal Settlements Upgrading Programme

+509 1 600 1 643 +43 These are multi-year

projects

In Jan 2016 it was

reported that 229 sites

were connected with

both water and sewer in

Refengkgotso. Due to

a rainstorm the sewer

line to 7 ervens were

damaged. The problem

was rectified, without

any additional cost.

*According to the verification document provided for the indicator, No. of households connected to basic services as part of the

Informal Settlements Upgrading Programme, it reflected that 811 stands were provided with both water and sewer in Refengkgotso.

However, the contractor used the IGS Consulting design plan numbering instead of the one from the Surveyor General. The two

layout plans numbering were matched with one another and collaborated with the 811 stands in Refengkgotso which were reported.

The Surveyor General‟s document is submitted as a proof or supporting document. Number of new sites connected to basic water

and sanitation services as part of the Integrated Residential Development Programme, the numbering in NEP Consultant Design

Plan matches the Surveyor General layout Plan.

Programme / Sub-programme: FINANCIAL INTERVENTION

Strategic Objective:: Increase housing opportunities on well- located land


Achievement

2014/2015

Planned

Target

2015/2016

Actual

Achievement

2015/2016

Deviation

from

planned

target to

Actual

Achievement

for

2015/2016

Comment on

deviations

Number of low-income / affordable housing units constructed in prioritized areas

(i) FLISP

-237 37 52 +15 More people who applied met the set criteria.

(ii) Special Programmes

Military Veterans(224)

Farm Workers Assistance Programme (Teachers Cottages) (8)

Land Restitution (230)

Emergency(18)

Provincial Specific (391)

-1 404 871 1 575 +704 Overachievement due to good production from contractors

(iii) *Rectification Programme - Dilapidated

238 508 387 -121 Rectification programme is no longer funded under HSDG and the department is

48

in the process of phasing out currently committed projects.

(iv) Incomplete houses 2 895 300 433 +133 Overachievement due to good production from contractors

(v) Breaking New Ground 422 2 779 2 350 -429 Underachievement Funding limitation in the last quarter affecting the production of new units. A higher number of units were produced though the y could not be recorded as a result for non-payment

Number of Deeds of transfer registered in favour of qualifying beneficiaries

Enhanced Extended Discount Benefit Scheme (EEDBS)

-400 900 0 -900 The process of appointing conveyancers took longer than anticipated and they signed contracts in February 2016

Act 81 of 1988

+93 1 500 595 -905 Low beneficiary turnover to complete declaration proving status; Properties are trapped in estates that have not been resolved or registered at the office of the Master of the High Court. For the months of January and February 2016 the deeds account was suspended due to non-payment hence no activity could happen on the registration of these deeds

Act 107 of 1997 -2 704 4 495 962 -3 533 The process of appointing conveyancers took longer than

49

anticipated and they signed contracts in February 2016

No. of parcels of land identified and transferred to municipalities for development purposes

0 250ha 0 -250ha Land identification usually involves the acquisition and/or release of state- private and communal-owned land for human settlement development. The Department has developed a credible land pipeline for both private and public land parcels. The reason for deviation on this KPI is due to the fact that the land release negotiation took longer than anticipated.

No. of erven planned and surveyed

-2 111 13 000 15 380 +2 380 These are multiyear projects and completion often overlaps on the new financial year. There were damages to the sewer line for seven erven in Denneysville and no additional costs were incurred when they were fixed.

No. of municipalities supported towards accreditation

0 5 local municipalities supported on Level 1 accreditation and 1 Metro supported on level 2 accreditation

6 0 -

No. of municipalities supported for the expansion of the National Upgrading Support Programme : - Metsimaholo - Dihlabeng

+14 6 16 +10

All municipalities were invited to Free State Informal Settlement Upgrading Forum wherein the terms of reference were adopted. Additional

50

- Matjhabeng - Moqhaka - Mangaung - Maluti-A-Phofung

municipalities are: Nketoana Tokologo Masilonyane Mantsopa Setsoto Phumelela Ngwathe Nala Letsemeng

No. of job opportunities created through resettlement and housing construction projects

-3 354 8 000 1 227 -6 773 Under achievement was as a result of low cooperation from our contractors in terms of furnishing the department with certified ID copies of their workers The submission of contractors claims for payments will be accompanied by certified copies of their worker‟s IDs as a precondition for processing

Programme / Sub-programme: Incremental interventions


Performance

Indicator

Actual

Achievement

2014/2015

Planned

Target

2015/201

6

Actual

Achievement

2015/2016

Deviation from

planned target

to Actual

Achievement

for 2015/2016

Comment on

deviations

Km of roads constructed in newly-formalized areas

1.9 km 5km 6.6km +1.6km Over-achievement is as a result of these projects being multi-year projects. Hillside view (3900m) of road completed Nic Ferreira (300m) of road completed The scope of the Viljoenskroon road project can be summarized as follows:

1 brick/ pave

51

paved road (360m)

The other one was stabilized or layer works was done(2.04 km)

No. of consumers

educated through

the consumer

education

programme

96 4 358 4 633 +275 The department

received more

requests from

municipalities hence

the over

achievement

No. human settlements training/skills programmes conducted based on needs analysis.

4 4 5 +1 The department has received more requests from municipalities hence the over achievement

No. of partnerships established and maintained towards improving human settlement delivery:

Capacity Building

Research

Funding

Internships – experiential training

Housing institutions

5 5 5 0 -

No. of emerging youth – and women contractors mentored and supported

24 5 0 -5 Formalisation of programme in its final stages of completion

No. of municipalities capacitated on the successful roll-out and/or maintenance of the Housing Demand Database (metro and local municipalities)

0 6 0 -6 The department is awaiting training from the national Department of Human Settlements on housing demand database. The project was piloted in only one province

Reasons for deviations and confirmation inputs:

The number of project (3900m) has been corrected

52

Programme / Sub-programme: Social and Rental Interventions


Performance

Indicator

Actual

Achievement

2014/2015

Planned

Target

2015/2016

Actual

Achievement

2015/2016

Deviation

from

planned

target to

Actual

Achievement

for

2015/2016

Comment on deviations

No. of CRU units approved, upgraded and converted

424 254 108 -146 Under-achievement Zamdela Phase 2 Phase 2 has as yet not been commenced with. Merriespruit construction of the

remaining 52 units have

has been completed.

Landscaping and the

laying of internal roads

are underway – 448 of

the planned 448 units

have been completed

No. of new affordable rental units delivered through Social Housing

284 100 33 -67 Under- achievement Hillside View 273 units in total have attained construction completion but are as yet not connected to the electricity supply. Brandwag Phase 3 No units completed for Quarter 4 – Phase 3 commenced in Quarter 3 and is currently 61% complete.

Reasons for deviations

Reasons for deviations are provided in the comment on deviations column above.

Strategy to overcome areas of underperformance

Hillside view

The department will write a letter to the electricity provider, CENTLEC, requesting for connection of all construction completed units to the electricity supply

53


Changes to planned targets None Sub-programme expenditure: Programme 3

Sub- Programme

Name

2015/2016 2014/2015

Final Appropria

tion

Actual Expenditure

(Over)/Under

Expenditure

Final Appropria

tion

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000

Administration 61 132 61 093 39 49 574 48106 1 468

Financial Interventions

208 254 208 221 33 216 227 211 558 4669

Incremental Interventions

748 714 735 904 12 810 748 913 739 662 9251

Social & Rental Interventions

115 202 115 200 2 111 502 110 535 967

EPWP incentives

2 348 2 348 0 2 000 2 000 0

Total 1 135 650 1 122 766 12 884 1 128216 1 111 861 16 355

4.4 PROGRAMME 4: HOUSING ASSETS AND PROPERTY MANAGEMENT

Purpose

To provide effective management of housing


Strategic Objective: To reduce backlog of 56 housing assets/properties by the

department by 2020

PROGRAMME 4: HOUSING ASSETS AND PROPERTY MANAGEMENT

Programme / Sub-programme: To reduce backlog of 56 housing assets/properties by the department by 2020


Achievement

2014/2015

Planned

Target

2015/2016

Actual

Achievement

2015/2016

Deviation from

planned target

to Actual

Achievement

for 2015/2016

Comment on

deviations

No. of rental units sold to beneficiaries • Rental top structure • Sites

0 0 0 0 No annual target was set by the department.

No. of (existing) rental units transferred (to beneficiaries) • Top structures

0 56 18 -38 Some units are not legitimately occupied and others are occupied

54

Sites by persons who have already benefitted in other government housing subsidy programmes. The cases will be submitted to a legal process to determine the relevant course of action.

*Reason for not having a target on rental units sold to beneficiaries is that (No annual target was set by the Department as the Indicator was set by the National Department of Human Settlements and it is compulsory to reflect it in the provincial reports. A correspondence is available in this regard.

STRATEGIC OBJECTIVE: NUMBER OF HOUSING ASSETS ENDORSED BY THE

EXECUTING AUTHORITY FOR DEVOLVEMENT TO THE MUNICIPALITIES FOR

DEVELOPMENT PURPOSES

Programme / Sub-programme: : Devolution of Housing Properties Strategic Objective: Housing Properties Maintenance


Achieveme

nt

2014/2015

Planned

Target

2015/2016

Actual

Achievemen

t

2015/2016

Deviation

from planned

target to

Actual

Achievement

for 2015/2016

Comment on

deviations

No. of housing assets devolved to municipalities in terms of section 15 of the Housing Act, 1997:

Rental top structure

Sites

0 0 0 0 No annual target was set by the Department as the Indicator was set by the National Department of Human Settlements and it is compulsory to reflect it in the provincial reports. A correspondence is available in this regard.

*Reason for not having a target on housing assets devolved to municipalities:

55

Programme / Sub-programme: : Devolution of Housing Properties Strategic Objective: Housing Properties Maintenance


Achievement

2014/2015

Planned

Target

2015/2016

Actual

Achievement

2015/2016

Deviation

from planned

target to

Actual

Achievement

for 2015/2016

Comment on

deviations

No. of rental units sold to beneficiaries • Rental top structure Sites


Programme / Sub-programme: Housing properties maintenance Strategic Objective: To provide for the Sale and transfer of Rental Stock


Achievement

2014/2015

Planned

Target

2015/2016

Actual

Achievement

2015/2016

Deviation from

planned target

to Actual

Achievement

for 2015/2016

Comment on

deviations

No. of housing assets maintained

0 8 0 0 No requests for maintenance were received by the Department.

No. of debtors reduced per financial year (under which sub-programme does this indicator fall)


Reason for not having quarterly and annual target on debtors reduced is provided above.

Reasons for deviations

These are housing units owned by the Department of Human Settlements and are scheduled, by virtue of Section 10A of the Housing Act, 1997 for transfer to legitimate occupants or

56

devolution to Local Municipalities in whose area of jurisdiction same is located. While still in the name of the department said housing assets must be maintained and maintenance is done on the basis of request by the occupants. Strategy to overcome areas of underperformance


Changes to planned targets

Sub- Programme

Name

2015/2016 2014/2015

Final Appropriatio

n

Actual Expenditure


Final Appropria

tion

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000

Administration 865 805 60 964 770 194

Total 865 805 60 964 770 194

5. TRANSFER PAYMENTS

5.1 Transfer payments to public entities

Name of Public Entity

Services rendered by the public

entity

Amount transferred to the public entity

Amount spent by the public entity

Achievements of the public entity

None - - - -

5.2 Transfer payments to all organisations other than public entities

The table below reflects the transfer payments made for the period 1 April 2015 to 31 March 2016 Name of

transferee Type of

organisation Purpose for which the

funds were used Did the dept. comply with s 38 (1) (j) of

the PFMA

Amount transferred

(R’000)

Amount spent by the entity

Reasons for the funds

unspent by the entity

Department of Human Settlements

National Housing Finance Corporation (NHFC)

To enable the NHFC, within its legislative mandate, to administer FLISP, in accordance with the agreement (Implementation Protocol) concluded with the province, so that the Department can make a significant contribution towards the achievement of Outcome 8 targets for the GAP market.

Yes R 461 250 R 461 250

-

Department of Human

Housing Development

To enable the HDA within its legislative

Yes R 15 000 000

R 15 000 000

-

57

Settlements Agency mandate to acquire land for human settlements development on behalf of the Province as part of the Provincial land acquisition pipeline to enable the Department to do appropriate forward planning. To enable the HDA in line with the signed Medium Term Operational Plan 2014 – 2019 to assist the Department with support in the implementation of the Informal Settlement Upgrading Programme

The table below reflects the transfer payments which were budgeted for in the period 1 April 2015 to 31 March 2016, but no transfer payments were made.

Name of transferring department

Purpose for which the funds were to be used

Amount budgeted for

(R’000)

Amount transferred

(R’000)

Reasons why funds were

not transferred

Department of

Human

Settlements

To enable the NHFC, within its

legislative mandate, to administer

FLISP, in accordance with the

agreement (Implementation

Protocol) concluded with the

province, so that the Department can

make a significant contribution

towards the achievement of

Outcome 8 targets for the GAP

market.

R 614 250 R 461 250 -

Department of Human Settlements

To enable the HDA within its legislative mandate to acquire land for human settlements development on behalf of the Province as part of the Provincial land acquisition pipeline to enable the Department to do appropriate forward planning. To enable the HDA in line with the signed Medium Term Operational Plan 2014 – 2019 to assist the Department with support in the implementation of the Informal Settlement Upgrading Programme

R 53 525 000

R 15 000 000

-

58

6. CONDITIONAL GRANTS

6.1 Conditional grants and earmarked funds paid

The conditional grants and ear marked funds paid during for the period 1 April 2015 to 31 March

2016.

Department who transferred the grant -

Purpose of the grant -

Expected outputs of the grant -

Actual outputs achieved -

Amount per amended DORA -

Amount received (R‟000) -

Reasons if amount as per DORA was not received -

Amount spent by the department (R‟000) -

Reasons for the funds unspent by the entity -

Reasons for deviations on performance -

Measures taken to improve performance -

Monitoring mechanism by the receiving department -

(NB. The next paragraph makes provision for the paid funds.)

6.2 Conditional grants and earmarked funds received

The table below details the conditional grants and ear marked funds received during for the

period 1 April 2015 to 31 March 2016.

Department who transferred the grant National Department of Human Settlements

Purpose of the grant To provide funding for the creation of sustainable and

integrated human settlements

59

Expected outputs of the grant

Number of housing opportunities

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 properties transferred and/or title deeds issued

(pre 1994, post 1994 and new developments)

Hectares of well-located land rezoned and released for

residential development

Number of work opportunities created through related

programmes

Number of informal settlements assessed

Number of units built for military veterans

Number of women and youth contractors appointed

Actual outputs achieved 0

Amount per amended DORA R 1 057 284 000.00

Amount received (R‟000) R 1 057 284 000.00

Reasons if amount as per DORA was not received

0

Amount spent by the department (R‟000) R 1 057 284 000.00

Reasons for the funds unspent by the entity

Reasons for deviations on performance

Measures taken to improve performance

Monitoring mechanism by the receiving department

HSS, BAS, IYM, Conditional Grant performance report

7. DONOR FUNDS

7.1 Donor Funds Received

The department received no donor funds.

8. CAPITAL INVESTMENT

8.1 Capital investment, maintenance and asset management plan

The department does not have capital investments maintenance and asset management plan. The table below indicates expenditure on new and replacement assets. (None)

New and replacement

Assets

2015/2016 2014/2015

Final Appropriation

R’000

Actual Expenditure

R’000


R’000

Final Appropriation

R’000

Actual Expenditure

R’000

(Over)/Under

Expenditure

R’000

TOTAL

0 0 0 0 0 0

60

PART C: GOVERNANCE

61

1. INTRODUCTION

The Department of Human settlements is committed to maintaining the highest standards of

governance in the management of public finances and resources. The department has good

governance structures that include Risk Management and the Audit Committees that ensure

effective and efficient utilisation of state resources for intended value.

2. RISK MANAGEMENT UNIT

Risk is an unwanted outcome, actual or potential, to the departments service delivery and other performance objectives, caused by the presence of risk factor(s). The Public Sector Risk Management Framework (PSRMF) makes the Head of Department (HoD) the ultimate Chief Risk Management Officer of the department and is accountable for the Departments overall governance of risk.

Risk Committee

The PSRMF provides for the HoD responsible for the governance of risk, and further states that the Risk Management Committee must assist the HoD in carrying out the risk management duties. The HoD has established the Risk Management Committee which reports on progress quarterly.

Risk Management

The risk management unit has implemented a risk management system to respond to significant risks that affects the department. The risk assessment and identification is done at the beginning of a financial year. New and emerging risks are identified per quarter. Upon risk assessment and identification risks are consolidated into an integrated departmental risk register focusing on the top risks that are affecting the Department. Risk and control plans are established to manage the risks. The risk register/profile gives Management/ Risk Committee/Audit Committee a robust holistic bottom-up view of key risks facing the Department.

3. FRAUD AND CORRUPTION

Fraud and Corruption

The department’s fraud prevention plan and how it has been implemented. o The provincial Fraud Prevention and Detection plan, which was approved on 3 June 2014,

by the Director General: Free State Provincial Government, superseded and replaced the

previous departmental policy. It is the responsibility of the Acting Director: Security

Management and Anti-Corruption, to implement this plan of behalf of the Accounting

Officer. Due to operational constraints the projected Annual Security Management and

Anti-Corruption Measures Effectiveness Survey was not conducted in the 2015/2016

financial year. All established Security Management and Anti-Corruption (SMAC)

o policies are scheduled for annual review in February 2017.

62

o The monthly Security Manager‟s report to the Accounting Officer is aligned with the

requirements of the Minimum Anti-Corruption Capacity (MACC). This report is presented

on a quarterly basis to all combined assurance role players and submitted to the Shared

Audit Committee.

o This monthly SMAC report is effectively the Minimum Anti-Corruption Capacity

Requirements Implementation Plan, as its format was endorsed by the Shared Audit

Committee and the completion thereof is managed by the SMAC Annual Operational

Plan.

Mechanisms in place to report fraud and corruption and how these operate, e.g. Whistle blowing - The need for officials to make confidential disclosure about suspect fraud and corruption o The department‟s whistle blowing policy is in an advanced draft stage and will be

submitted to the Accounting Officer: Department of Human Settlements, for consideration

of approval by end of June 2016. Workshops for officials of the Security Management and

Anti-Corruption directorate are conducted on various whistle blowing methods and means

at their disposal.

The department’s process for reporting fraud and corruption

Direct reporting

o Report in writing, verbally or telephonically to the line manager

o Report in writing, verbally or telephonically to the Acting Director: Security Management

and Anti Corruption: Department of Human Settlements

o Report in writing to the Accounting Officer.

Anonymous reporting

o Reporting anonymously on the Public Service Commission National Hotline 0800

701 701, which was launched by the Public Service Commission in September 2004.

o The hotline is strictly for reporting on cases of corruption and fraud, and does not cater for

service delivery complaints – unless these involve corruption as well.

How these cases are reported and what action is taken o SMAC reports on a monthly basis to the Accounting Officer and on a quarterly basis to the

Audit Committee on progress made on all cases under investigation. This report is

compliant with the requirements of the Minimum Anti-Corruption Capacity (MACC),

prescripts.

o In the 2016/2017 financial year, monthly reports on the status of cases, including nil

reports, will be submitted to the Public Service Commission, in relation to cases, referred

to the department for resolution, by the National Anti-Corruption Hotline.

63

4. MINIMISING CONFLICT OF INTEREST

o 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 have completed the disclosure forms and these were signed off by the Executive Authority.

o 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

o 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.

o 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.

o The need exists to provide direction to employees with regard to their relationship with the

legislature, political and executive office-bearers, 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.

o 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.

o 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 are tasks through the APP of the Department to arrange Information Sessions where the Code of Conduct is unpacked or presented to officials. Officials are also furnished with copies of same where upon they complete a questionnaire confirming that such training took place.

o 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 has dedicated unit and Wellness committee that has been approved by

the HOD in activating the OHS in the department. The department has partnered with the

64

department of Public Works and Infrastructure in ensuring that the environments in the

building are of conducive for the employee wellbeing. There is a monthly visit to offices

and district to ensure that the health and safety measures are adhere to in relation to the

following:

o Department bought 25 first aid requirements but there is a need to train first aiders

to execute the mandate

o Office inspections are done on monthly bases and reported to Risk Management

Committee as part of future intervention and alerting the HOD about the challenges.

o Lights and all other electrical measures are adhered to

o The challenge the department is facing is in relation to adherence to the services of

fire extinguishers and fire hoses that are not maintained and need urgent

intervention by the landlord of the buildings occupied by our department.

o Training of fire extinguishing is needed for all employees to assist in case of fire in

the building.

7. PORTFOLIO COMMITTEES

The department attended the following Portfolio Committee meetings: Date Matters discussed

3 June 2015 Third and Fourth Quarterly Reports for 2014/2015 Financial Year on Financial Matters

17 June 2015 Annual Performance Plan for 2015/2016 Financial Year

9 September 2015 First Quarter non- Financial reports for 2015/2016

3 November 2015 Annual Report for 2014/2015 Financial and Non- Financial Matters

19 November 2015 Second quarter non - Financial reports for 2015 /2016

24 February 2016 Third Quarter non- financial reports for 2015/2016

25 May 2016 Fourth Quarter non-financial reports for 2015/2016 and Annual Performance Plan for 2016-2019

8. PROPAC RESOLUTIONS

Resolution No. Subject Details Response by the department

Resolved (Yes/No)

13/2014

Capacity building

The Accounting Officer

must ensure that the

financial section of the

department is sufficiently

capacitated by skilled

officials to ensure that

financial functions are

properly executed.

11 Finance positions were

advertised during the

financial year. Recruitment

process is in progress.

The position of Director

Financial Administration and

Budget Management

became vacant in March

2016 and is currently not

No

65

Resolution No. Subject Details Response by the department

Resolved (Yes/No)

filled

13/2014

Accrued departmental revenue

The Accounting Officer

must ensure that effective

monitoring controls are

implemented over record

keeping and the filing

system.

Summonses were issued to

all affected service providers

and recoveries are being

made.

On-going

13/2014

Commitments The Accounting Officer

must ensure that a

thorough review process is

done to establish effective

control measures that will

ensure that secondary

information in the financial

statements are complete

and accurate.

A commitment register has

been maintained by the

department and reviewed

on a continuous basis to

ensure completeness and

accuracy thereon

Yes

13/2014

Accruals and payables not recognised

Designate responsibility to

ensure that all unpaid

invoices for goods and

services received are

captured on daily basis and

monthly reconciliations are

executed to ensure that

financial reporting is

complete and accurate.

The department has

processes in place to

ensure that invoices for

goods and services are

captured upon receipt and

a register is maintained

The prior year accruals

have also been restated in

the 2015/16 AFS

submission.

Yes

9. PRIOR MODIFICATIONS TO AUDIT REPORTS

Nature of qualification, disclaimer, adverse opinion and matters of non-compliance

Financial year in which it first arose

Progress made in clearing / resolving the matter

Qualification

2014-2015

Discussions with the Auditor General on the matter led to a resolution on the dispute.

10 INTERNAL CONTROL UNIT

The Department appointed Consultants to assist with the functions of the Internal Control Unit

during the year under review due to human skills and capacity constraints. The functions the

department was assisted with were as follows:

66

Checking and verification of all transactions related to payments to Suppliers and

Contractors and payments to officials;

Checking and verification of all transactions that was made via journal entries on the

system;

Safeguarding of all relevant supporting documentation;

Evaluating payments to update and maintain the registers related to:

o Irregular expenditure

o Fruitless and wasteful expenditure

o Unauthorised expenditure.

Officials from the Consultancy Firm and officials from the Internal Control unit work together to

ensure that the necessary skills are transferred.

11 INTERNAL AUDIT AND AUDIT COMMITTEES

Name Qualifications Internal or

External

If internal,

position in

the

department

Date

appointed

Date

Resigned

No of

meetings

attended

Mr David

Lekoto

B.Com B.Com (Hons-Part 1) Diploma in Certified Fraud Examiners Certified Public Account (SA), GIA

External N/A 01 October

2014

N/A Refer to

Paragraph

11 below

Dr C Olivier N. Dip in Public Administration B. Luris Public Service Masters in Public Administration Ph. D in Public Management


2014

N/A Refer to

Paragraph

11 below

Mr. I Mokoena

Diploma Industrial Engineering Project Management Advancement Programme MBA


2014

N/A -

Dr. K Laubscher

B. Com B. Com (Hons) Masters of Science Ph. D Agricultural Economics


2014

N/A -

Adv. J Block

Baccalaureus Legum Baccalaureus Lurisprudentiae Diploma in Tax Law


2014

N/A -

67

Certificate in Public Finance Management Certificate in Procurement Management

12 REPORT OF THE SHARED AUDIT COMMITTEE

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 2016.

Background Information The Shared Audit Committee has non-executive status in an advisory capacity to the

Accounting Officer, to assist the 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 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 2011. The term of office was subsequently extended until end of July 2014. Thus the

members are currently serving the fourth year of their term.

68

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 Settlement, for a period of three years, with effect from 01

September 2014.

Shared Audit Committee Members and Attendance The Shared Audit Committee consists of the members listed hereunder and should meet at

least four (4) times per annum as per its approved Shared Audit Committee Charter, with a

provision of two (2) special meetings where necessary.

The tables below indicate attendance of members for the financial year 2015/2016.

Name Capacity Normal Meeting

30 April 2015

Special Meeting

27 May 2015

Normal Meeting 25 June

2015

Special Meeting

27 July 2015

Mr D Lekoto Chairperson

* * * *

Mr R I Mokoena

Member * * # *

Dr C D Olivier

Member * * * *

Adv D Block Member * * * *

Dr K Laubscher

Member * * * *

Name Capacity Normal Meeting 23 September

2015

Special Meeting 16 October 2015

Normal Meeting 04 February 2016

Mr D Lekoto Chairperson * * *

Mr R I Mokoena

Member * * *

Dr C D Olivier Member * * *

Adv D Block Member * * *

Dr K Laubscher

Member * * *

-Legend: * - Attended the meeting # - Apology tendered Shared 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 3.1.1 to 3.1.16 with regards to its establishment and Terms of Reference.

69

S38(1)(a) S38(1)(a)(ii) of the PFMA state the following: (PFMA) (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”.

The purpose of the Shared Audit Committee is to:

assist management in discharging its duties relating to the safeguarding of assets, operation of adequate systems, control and reporting processes, and the preparation of accurate reporting and financial statements in compliance with the applicable legal requirements and accounting standards;

oversee the activities of, and to ensure coordination between, the activities of internal and external audit;

provide a forum for discussing financial, enterprise-wide, market, regulatory, safety and other risks and control issues; and to monitor controls designed to minimize these risks;

review the department „s annual integrated report, including the consolidated and separate annual financial statements, as well as its interim report and any other public reports or announcements containing financial information;

receive and deal with any complaints concerning the accounting practices, internal and external audit or the content and audit of financial statements or related matters; and

annually review the committee‟s work and charter to make recommendations to the board to ensure its effectiveness.

Duties carried out The Shared Audit Committee has performed its duties and responsibilities during the financial year according to its charter. 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 Auditor-

General South Africa,

Key Control Matrix and Dash Board Reports and

Risk Management and Risk Management Committee Reports.

70

The effectiveness of internal control During the year under review, several instances of non-compliance were reported by the

Internal Audit Directorate that resulted in a breakdown in the functioning of internal controls.

Further, the systems of internal controls were not entirely effective for the year under review, as

compliance with prescribed policies and procedures were lacking in certain instances.

The department has put much emphasis on improving internal controls and adherence to

policies and policies. The Shared Audit Committee is thus content to report that management‟s

efforts in this regard have led to an increased level of compliance to internal controls, policies

and procedures. However, there are still areas of concern where the state and status of internal

control can be enhanced.

The Internal Audit Directorate presented the Activity Reports during the above-mentioned

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 above-mentioned paragraph.

The Shared Audit Committee is pleased to report that, whilst the objectives of the Internal Audit

Directorate and the Auditor-General 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 2015/16 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 impact on the audit process. All the reports issued had

been distributed to the Auditor- General 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 all in year management monitoring and quarterly reports

submitted in terms of the PFMA and the Division of Revenue Act to Provincial Treasury, in line

with paragraph 3.1.11 of the Treasury Regulations.

71

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 the following regarding the departmental Programmes:

Programme 1 on administration planned 6 targets and achieved all while Programme 2 on

Housing research and planning planned 6 targets and achieved 4. Programme 3 on Housing

Development planned 24 targets and achieved 15 while Programme 4 on Housing Asset

Management and Property planned 2 and achieved nothing.

The Shared Audit Committee noted with concern that out of all the targets, 38.25 (66%) were

achieved and 13 (34%) were not achieved. Thus, the Committee 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 Auditor-General South Africa‟s management report and management

responses thereto for the 2015/2016 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,

72

Reviewed the information on predetermined objectives to be included in the annual report,

Reviewed significant adjustments resulting from the audit,

Reviewed quarterly interim financial statements submitted for oversight purposes,

Reviewed the Auditor-General‟s management letter and responses thereof for the 2015/2016

financial year.

The Shared Audit Committee concurs and accepts the conclusions of the Auditor-General 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 Auditor-General 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

2014/2015 Auditor General South Africa report, which again contributed to the Department

receiving a qualified audit opinion.

Notwithstanding the above-mentioned, 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, and this plan will be co-signed

between the Shared Audit-Committee and Management

The Internal Audit Directorate will have to monitor the implementation status quo and report

periodically to the Shared Audit Committee.

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.

73

The Shared Audit Committee reviewed and approved the Annual Internal audit plans and

evaluated the independence, effectiveness and performance of the internal audit function.

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 Auditor-General 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 considered the reports of internal auditors regarding systems of

internal control including financial controls, business risk management and maintenance of

effective internal control systems.

The Shared Audit Committee expressed its appreciation to the Internal Audit Directorate for

established the Internal Audit Manual as the delivery mechanism for the purpose of guidelines in

conducting audits. The manual documented the Internal Audit methodology in terms of the

Professional Standards of Internal Auditing and Treasury regulations.

The Shared Audit Committee recommended that punitive measures should be taken on

managers for who does not provide required information and on those who does not avail

themselves when audited.

The Shared Audit Committee concerns were reported and escalated to the accounting officer in

their quarterly reports during the financial year.

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

74

negatively impacts on 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 Sub-Directorate which amongst others includes capacity constraints experienced

within the Sub-Directorate and non-availability 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 sub-Directorate performs efficiently.

Notwithstanding the above-mentioned, the Shared Audit Committee is pleased with the

progress made to this end in the directorate.

Other matters of emphasis

Notwithstanding that above-mentioned, the Shared Audit Committee is pleased to have noticed

the following:

The Shared Audit Committee has made inputs which were significantly invaluable to the

Head of Department and Management and laid solid foundation for risk management,

governance processes and internal control.

The Shared Audit Committee has managed to assist both the Head of Department and

Management to get financial policies and procedures finalized and approved as well as

noted that the Department had addressed capacity challenges in Senior Management

positions.

The Shared Audit Committee has managed to assist management to be accountable

and engage the Auditor-General South Africa in the way they supposed to which is in

line with the PFMA; and

The Shared Audit Committee‟s presence has instilled management‟s resilience and

surpasses their mandate.

75

Auditor-General 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 department approved the external audit engagement letter, the audit strategy and

implementation plan and the budgeted audit fees payable to Auditor- General South

Africa,

The Shared Audit Committee met with the Auditor-General South Africa to ensure that

there is no unresolved issues,

The Auditor-General South Africa met periodically with management to discuss the

progress on the implementation of the recommendations in the management reports,

although there might be room for improvement,

The department obtained assurances from the Auditor-General South Africa that

adequate accounting records were being maintained,

The Auditor-General 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 Shared Audit Committee is aware of the dispute between Auditor-General South

Africa and the department regarding the audit outcome for the 2015/16 financial year.

The dispute affected the tabling of the Departmental Annual Report.

The Shared Audit Committee is pleased to report that in terms of its oversight

responsibility, it had adequately mediated in the dispute and it had been resolved.

____________________

Adv. D Block Acting Chairperson of the Shared Audit Committee Date: 30 May 2017

76

PART D: HUMAN RESOURCE MANAGEMENT

77

1. INTRODUCTION

The human resource management and Development directorate of the department of Human

Settlements is made up of the following: personnel provisioning and utilization, Employee Health

and Wellness, Labour relations and human resource development.

2. OVERVIEW OF HUMAN RESOURCES

Employee Performance Management

Employee Wellness Programmes

3. HUMAN RESOURCES OVERSIGHT STATISTICS

3.1. Personnel related expenditure

Table 3.1.1 Personnel expenditure by programme for the period 1 April 2015 to 31 March 2016

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)

1. Administration:

Programme 1

80,316 52,570 619 411 65,5% 159

2 Housing needs,

research and

planning:

Programme 2

17,145 14,311 0 0 83,5% 43

3. Housing

development:

Programme 3

1 122 766 67,453 0 8, 823 6% 204

4. Housing assets

management:

Programme 4

805 740 0 0 91,9% 2

Total 1 221032 135 074 619 9,234 11% 408

Table 3.1.2 Personnel costs by salary band for the period 1 April 2015 to 31 March 2016

Salary band Personnel

expenditure

(R’000)

% of total

personnel

cost

No. of

employees

Average personnel cost per

employee (R’000)

Lower skilled (Levels 1-2) 0 0 0 0

Skilled (Levels 3-5) 10,218 7,6 52 196 500

Highly skilled production (Levels 6-8)

38,211 28,3 127

300 874

Highly skilled supervision 36,329 27 67

545 209

78

(Levels 9-12)

Senior management (Levels 13-16)

20768 13,7 22

978474

Periodic remuneration 320 0,2 4

80000

Contract 3-5 0 0 6

0

6-8 1964 15 8

135,223

9-12 23,778 17,6 47

135,223

13-16 3,012 2,2 3

135,223

Total 135074 111,6 333 1081.784

Table 3.1.3 Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for the

period 1 April 2015 to 31 March 2016

Programme

Salaries Overtime Home Owners

Allowance

Medical Aid

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

personne

l costs

Amou

nt

(R’000)

Medical

aid as a %

of

personnel

costs

1. Administration:

Programme 1 36 070 90.97

142 31.10 1588 82.12 2343 78.06

2 Housing needs,

research &

planning:

Programme 2 10 094 98.00 0 0 339 107.32 356 87.57

3. Housing

development:

Programme 3 46 908 103.22 194 48.28 1268 66.82 2064 83.02

4. Housing assets

management:

Programme 4 549 136.16 0 0 24 115.71 36 128.20

TOTAL 93.621 98.04 336 39.21 3219 77.19 4799 81.05

Table 3.1.4 Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for

the period 1 April 2014 to 31 March 2016

Salary band

Salaries Overtime

Home Owners Allowance

Medical Aid

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

Skilled (Levels 1-2)

0 0 0 0 0 0 0 0

Skilled (Levels 3-5) 7 015 67.9 114 1.1 652 6.3 673 6.5

Highly skilled production (Levels 6-8) 27 455 71.4 183 0.5 1 579 4.1 2 030 5.3

79

Highly skilled supervision (Levels 9-12) 28 555 76.2 39 0.1 661 1.8 805 2.1

Senior Management (Levels 13-16) 15 154 79 0 0 327 1.8 139 0.7

Contract (Levels 3-5) 0 0 0 0 0 0 0 0

Contract(Levels 6-8) 1 955 99.5 0 0 0 0 0 0

Contract (Levels 9-12) 23 757 99.2 0 0 0 0 0 0

Contract (Levels 13-16) 2 789 91 0 0 0 0 0 0

TOTAL 10 6.680 584.2 336 1.7 3219 14.0 3 647 14.6

3.2. Employment and Vacancies

Table 3.2.1 Employment and vacancies by programme as on 31 March 2016 Programme Number of

posts on

approved

establishment

Number of

posts filled

Vacancy Rate Number of

employees

additional to

the

establishment

1. Administration: Programme 1 231 193 16.5 49

2 Housing Needs Research and Planning:

Programme 2

34 31 8.8 0

3. Housing Development

Programme 3

122 107 12.3 3

4. Housing Assets Management

Programme 4

2 2 0 6

Total 389 333 14.4 58

Table 3.2.2 Employment and vacancies by salary band as on 31 March 2016

Salary band Number of posts on

approved

establishment

Number of posts

filled


employees

additional to the

establishment

Lower skilled (Levels1-2) 1 1 0 0

Skilled(Levels 3-5) 77 68 11.7 0

Highly skilled production

(Levels 6-8)

181 145 19.9 10

Highly skilled supervision

(Levels 9-12)

103 97 5.8 45

Senior management

(Levels 13-16)

27 22 18.5 3

Total 389 333 14.4 58

80

Table 3.2.3 Employment and vacancies by critical occupations as on 31 March 2016

Critical occupation Number of posts

on approved

establishment

Number of posts

filled


employees

additional to

the

establishment

Technical/Engineering Related Advisory Services

54 48 11.1 41

TOTAL 54 48 11.1 41

3.3. Filling Senior Management Service (SMS) posts

The tables in this section provide information on employment and vacancies as it relates to members of the Senior Management Service by salary level. It also provides information on advertising and filling of SMS posts, reasons for not complying with prescribed timeframes and disciplinary steps taken.

Table 3.3.1 SMS post information as on 31 March 2016

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

Director-General/

Head of Department 1 1 100 0 0

Salary Level 15 1 1 100 0 0

Salary Level 14 5 5 100 0 0

Salary Level 13 20 15 75 5 25

Total 27 22 86 5 14

Table 3.3.2 SMS post information as on 30 September 2015

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

16 1 1 100 0 100

15 1 1 100 0 100

14 5 5 100 0 100

13 20 15 75 5 25

Total 27 22 86 5 14

81

Table 3.3.3 Advertising and filling of SMS posts for the period 1 April 2015 to 31 March 2016

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 within 12 months

16 0 0 0

15 0 0 0

14 3 3 0

13 3 3 3

Total 6 6 3

Table 3.3.4 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 2015 to

31 March 2016

Reasons for vacancies not advertised within six months

The department filled SMS posts within 6 months.

Reasons for vacancies not filled within twelve months

None

Table 3.3.5 Disciplinary steps taken for not complying with the prescribed timeframes for filling

SMS posts within 12 months for the period 1 April 2014 to 31 March 2015

There was no need for disciplinary steps to be taken

Reasons for vacancies not advertised within six months

None

3.4 Job Evaluation

Table 3.4.1 Job Evaluation by Salary band for the period 1 April 2015 to 31 March 2016

Salary band Number of posts on approved

establishment

Number of Jobs

Evaluated

% of posts

evaluated by salary

bands

Posts Upgraded Posts downgraded

Number % of posts

evaluated

Number % of posts

evaluated

Lower Skilled (Levels1-2)

1 0 0 0 0 0 0


77 0 0 0 0 0 0

Highly skilled 181 0 0 0 0 0 0

82

Table 3.4.2 Profile of employees whose positions were upgraded due to their posts being

upgraded for the period 1 April 2015 to 31 March 2016

Gender African Asian Coloured White Total

Female 0 0 0 0 0

Male 0 0 0 0 0

Total 0 0 0 0 0

Employees with a disability 0

Table 3.4.3 Employees with salary levels higher than those determined by job evaluation by

occupation for the period 1 April 2015 to 31 March 2016

Occupation Number of

employees

Job evaluation

level

Remuneration

level

Reason for

deviation

0 0 0 0 0

Total number of employees whose salaries exceeded the level determined

by job evaluation

0

Percentage of total employed 0

The following table summarises the beneficiaries of the above in terms of race, gender, and disability.

Table 3.4.4 Profile of employees who have salary levels higher than those determined by job evaluation

for the period 1 April 2015 and 31 March 2016

Total number of Employees whose salaries exceeded the grades determine by job

evaluation

0

production (Levels 6-8)

Highly skilled supervision (Levels 9-12)

103 0 0 0 0 0 0

Senior Management Service Band A

20 0 0 0 0 0 0

Senior Management Service Band B

5 0 0 0 0 0 0

Senior Management Service Band C

1 0 0 0 0 0 0

Senior Management Service Band D

1 0 0 0 0 0 0

Total 389 0 0 0 0 0 0

83

3.5 Employment Changes

Table 3.5.1 Annual turnover rates by salary band for the period 1 April 2015to 31 March 2016

Salary band Number of employees at beginning of period-1 April

2015

Appointments and transfers

into the department

Terminations and

transfers out of the

department

Turnover rate %

Skilled (Levels 3-5) 55 0 2 3.6


135 1 9 6.7


73 0 2 2.7

Senior Management Service Bands A 11 3 3 27.3

Senior Management Service Bands B 5 0 2 40

Senior Management Service Bands C 1 0 0 0

Senior Management Service Bands D 1 0 0 0

Contract (Levels 1-2), Permanent 7 6 7 100

Contract (Levels 6-8), Permanent 3 7 2 66.7

Contract (Levels 9-12), Permanent 13 41 5 38.5

Contract (Band A), Permanent 1 0 0 0

Contract (Band B), Permanent 0 1 0 0

Contract (Levels 1-2), Permanent 0 0 0 0

Total 305 59 32 10.5

Table 3.5.2 Annual turnover rates by critical occupation for the period 1 April 2014 to 31 March

2015

Critical occupation Number of

employees at

beginning of

period-April

2015

Appointments

and transfers

into the

department

Terminations

and

transfers out

of the

department

Turnover rate

%

Engineers and related professionals, Permanent 16 38 4 25 Total 16 38 4 25

Table 3.5.3 Reasons why staff left the department for the period 1 April 2015 to 31 March 2016

Termination Type Number % of Total Resignations

Death 02 6%

Resignation 06 19%

Expiry of contract 03 9%

Dismissal – operational changes 01 7%

Dismissal – misconduct 05 15%

Dismissal – inefficiency 00 00

84

Discharged due to ill-health 00 00

Retirement 04 14%

Transfer to other Public Service Departments 11 30%

Other N/A N/A

Total 32 100%

Total number of employees who left as a

% of total employment

Table 3.5.4 Promotions by critical occupation for the period 1 April 2015 to 31 March 2016

Occupation Employees

1 April

2015

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

Level 8 & 9 2 2 100 0 0

Total 2 2 100 0 0

Table 3.5.5 Promotions by salary band for the period 1 April 2015 to 31 March 2016 Salary Band Employees

1 April

2015

Promotions

to another

salary level

Salary

bands

promotion

s 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 1-2) 0 0 0 0 0


1 1 100 0 0


1 1 100 0 0


0 0 0 0 0

Senior Management (Level 13-16)

0 0 0 0 0

Total 2 2 100 0 0

3.6 Employment Equity

Table 3.6.1 Total number of employees (including employees with disabilities) in each of the

following occupational categories as on 31 March 2016

Occupational category

Male Female Total

African Coloured Indian White African Coloured Indian White

Legislators, senior officials and managers

7 0 0 0 6 2 0 0 15

Professionals 9 30 0 0 12 15 1 1 68

Technicians 53 0 0 4 70 2 0 8 137

85

and associate professionals

Clerks 39 0 0 2 47 2 0 11 101

Service and sales workers

2 0 0 0 1 0 0 0 3

Skilled agriculture and fishery workers

0 0 0 0 0 0 0 0 0

Craft and related trades workers

0 0 0 0 0 0 0 0 0

Plant and machine operators and assemblers

3 0 0 0 0 0 0 0 3

Elementary occupations

5 0 0 0 1 0 0 0 6

Total 118 30 0 6 137 21 1 20 333

Table 3.6.2 Total number of employees (including employees with disabilities) in each of the

following occupational bands as on 31 March 2016

Occupational band Male Female Total

African

Coloured

Indian

White African Coloured Indian

White

Top Management 14-16

5 0 0 0 2 0 0 0 7

Senior Management 13

9 0 0 0 8 2 0 0 19

Professionally qualified and experienced specialists and mid-management 9-12

35 30 0 5 29 15 1 2 117

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents 6-8

37 0 0 1 72 3 0 18 131

Semi-skilled and discretionary decision making 3-5

31 0 0 0 26 1 0 0 58

Unskilled and defined decision making 1-2

1 0 0 0 0 0 0 0 1

Total 118 30 0 6 137 21 1 20 333

86

Table 3.6.3 Recruitment for the period 1 April 2015 to 31 March 2016

Occupational

band

Male Female Total

African Coloured Indian White African Coloured Indian White

Top Management 2 0 0 0 1 0 0 0 3

Senior Management

3 0 0 0 3 2 0 0 7

Professionally qualified and experienced specialists and mid-management

0 0 0 0 0 14 0 0 0

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents

0 0 0 0 0 0 0 0 0

Semi-skilled and discretionary decision making 0 0 0 0 0 0 0 0 0

Unskilled and defined decision making 0 0 0 0 0 0 0 0

0

Total (Employees

with disabilities taken care of)

5 0 0 0 4 1 0 10

NB: Table 3.6.3 will differ from table 3.5.1 because the Cubans are not included under the categories of

Table 3.6.3 and recruitment does not include transfers.

Table 3.6.4 Promotions for the period 1 April 2015 to 31 March 2016

Occupational band Male Female Total

Afric

an

Coloure

d

Indian White African Coloure

d

Indian White


Senior Management 2 0 0 0 0 1 0 0 3

Professionally qualified

and experienced

specialists and mid-

management

0 0

Skilled technical and

academically qualified

workers, junior

management,

supervisors, foreman

and superintendents

0 0 0 0 0 0 0 0 0

Semi-skilled and

discretionary decision

making

0 0 0 0 0 0 0 0 0

Unskilled and defined

decision making

0 0 0 0 0 0 0 0 0

Total (Employees with disabilities)

3 0 0 0 0 1 0 0 4

87

Table 3.6.5 Terminations for the period 1 April 2015 to 31 March 2016 Occupational

band

Male Female Total

African Coloured Indian/Cubans White African Coloured Indian White


Senior Management

3 0 0 0 2 0 0 0 5

Professionally qualified and experienced specialists and mid-management

0 0 0 0 0 0 0 0

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents

2 0 0 1 0 0 0 3 6

Semi-skilled and discretionary decision making

1 0 0 0 6 0 0 0 7

Unskilled and

defined decision

making

0 0 0 1 0 0 0 0 1

Employees with

Disabilities

0 0 0 0 0 0 0 0 0

Total 7 0 0 2 9 0 0 3 21

Table 3.6.6 Disciplinary action for the period 1 April 2015 to 31 March 2016

Disciplinary action Male Female Total

African Colou

red

Indian White African Colou

red

Indian White

Disciplinary action 9 0 0 1 3 0 0 1 14

Demotion 0 0 0 0 0 0 0 0 0

Final written warning 4 1 0 0 0 0 0 0 5

Written warning 0 0 0 0 0 0 0 0 0

Dismissal 4 0 0 0 2 0 0 0 6

Suspension without pay

1 0 0 0 0 0 0 0 1

TOTAL 18 1 0 1 5 0 0 1 26

Table 3.6.7 Skills development for the period 1 April 2015 to 31 March 2016

Occupational

category

Male Female Total

African Colour

ed

Indian White African Colour

ed

Indian White


3 0 0 0 3 1 0 0 7

Professionals 8 30 0 0 7 10 0 0 55

88

Technicians and associate professionals

10 0 0 0 20 0 0 0 30

Clerks 18 0 0 0 11 0 0 0 29


0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0

Total 39 30 0 0 41 11 0 0 121

*Employees with disabilities are included in the above occupations

3.7 Signing of Performance Agreements by SMS Members

Table 3.7.1 Signing of Performance Agreements by SMS members as on 31 May 2015

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

Director-General/

Head of

Department

1 1 1 100%

Salary Level 15 1 1 1 100%

Salary Level 14 5 5 2 40%

Salary Level 13 20 15 12 80%

Total 27 22 22 100%

Table 3.7.2 Reasons for not having concluded Performance agreements for all SMS members

as on 31 May 2015

Reasons

Six senior managers were on suspension at the end of May 2015, hence they did not sign the performance

agreements. The post of Chief Financial Officer was still vacant during that time.

.

Table 3.7.3 Disciplinary steps taken against SMS members for not having concluded

Performance agreements as on 31 May 2015

Reasons Not applicable

89

3.8 Performance Rewards

Table 3.8.1 Performance Rewards by race, gender and disability for the period 1 April 2015 to

31 March 2016

Race and Gender

Beneficiary Profile Cost

Number of

beneficiaries

Number of

employees

% of total

within group

Cost (R’000) Average cost

per

employee

AFRICAN 100 239 41% n/a n/a

Male 36 114 32% n/a n/a

Female 64 125 51% n/a n/a

ASIAN 0 9 0 n/a n/a

Male 0 6 0 n/a n/a

Female 0 3 0 n/a n/a

COLOURED 6 7 85% n/a n/a

Male 0 0 0 n/a n/a


WHITE 21 32 65% n/a n/a

Male 5 9 55% n/a n/a


Employees with disability 0 0 0 n/a n/a

TOTAL 127 287 44% n/a n/a NB. Employees with disabilities are included in the above occupations. The total cash bonus excluded notches and SMS members‟ bonuses; it is only from levels 1-12 officials. Also, the system does not provide information on costs and average per race.

Table 3.8.2 Performance Rewards by salary band for personnel below Senior Management Service for the period 1 April 2014 to 2015 Salary band Beneficiary Profile Cost Total cost

as a % of

the total

personnel

expenditu

re

Number of

beneficiaries

Number of

employees

% of total

within

salary

bands

Total Cost Average

cost per

employee

Lower skilled levels 1-2

0 0 0 0 0 0

Skilled levels 3-5 18 63 28.57% R 117 246 R6 513.00 5%

Highly skilled production level 6-8

82 171 47.95% R 250768 R3 351.00 1.34%

Highly skilled supervision 9-12

24 49 48.98% R 697 448 R29 060.00 4%

Contract (levels 9-12)

3 4 75% R39 000.00 R13 000.00 33%

Total 127 287 44.25% R1 104 462.00 R9 521.00 0.86%

Table 3.8.3 Performance Rewards by critical occupation for the period 1 April 2014 to 31 March 2015

Critical occupation

Beneficiary Profile Cost

Number of

beneficiaries

Number of

employees

% of total

within

occupation

Total Cost

(R’000)

Average cost

per employee

Technical/Engineering Related Advisory Services

0 0 0 0 0

Total 0 0 0 0 0

90

Table 3.8.4 Performance related rewards (cash bonus), by salary band for Senior Management

Service for the period 1 April 2014 to 31 March 2015

Salary

band

Beneficiary Profile Cost Total cost as a

% of the total

personnel

expenditure

Number of

beneficiaries

Number of

employees

% of total

within salary

bands

Total Cost

(R’000)

Average cost

per employee

Band A 2 5 40% n/a n/a n/a

Band B 4 20 20% n/a n/a n/a

Band C 0 1 0 n/a n/a n/a

Band D 0 1 0 n/a n/a n/a

Total 6 27 22% n/a n/a n/a

*Only six suspended were paid bonuses which was outstanding of 2010/2011 performance year. Other SMS members who

were assessed in 2014/2015, no performance bonuses were paid, still awaiting approval from the Executing Authority.

3.9 Foreign Workers

The tables below summarise the employment of foreign nationals in the department in terms of salary band and major occupation.

Table 3.9.1 Foreign workers by salary band for the period 1 April 2015 to 31 March 2016

Salary band 01 April 2015

Number % of total Number % Change

Lower skilled n/a n/a n/a n/a


n/a n/a n/a n/a


43 97.7% n/a n/a

Contract (Levels 9-12) n/a n/a n/a n/a

Contract (Levels 13-16)

1 2.3% n/a n/a

Total 44 100% n/a n/a

Table 3.9.2 Foreign workers by major occupation for the period 1 April 2015to 31 March 2016

Major occupation 01 April 2015 to March 2016 Change

Number % of total Number % Change

Engineering Related 44 100% n/a n/a

Total 44 100% n/a n/a

3.10 Leave utilisation

The Public Service Commission identified the need for careful monitoring of sick leave within the

public service. The following tables provide an indication of the use of sick leave and disability

leave. In both cases, the estimated cost of the leave is also provided.

91

Table 3.10.1 Sick leave for the period 1 January 2015 to 31 December 2015

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 (Levels 1-2) 0 0 0 0 0 0

Skilled (Levels 3-5) 292 74.7 39 18.7 7 201


1005

84.2

109

52.2 9 1063

Highly skilled supervision (Levels 9 -12)

310

84.5

45

21.2 7 601

Top and Senior management (Levels 13-16)

78

91

10

4.8 8 295

Total 1685 203 31 2160

Table 3.10.2 Disability leave (temporary and permanent) for the period 1 January 2015 to 31 December 2015

Salary band Total

days

% Days

with

Medical

certificati

on

Number of

Employee

s using

disability

leave

% of total

employees

using

disability

leave

Average

days per

employee

Estimated Cost

(R’000)

Lower skilled (Levels 1-2) 0 0 0 0 0 0

Skilled (Levels 3-5) 52 98.1 5 17.2 10 35

Highly skilled production (Levels

6-8)

661 100 22 75.9 30 770

Highly skilled supervision (Levels

9-12)

39 100 2 6.9 20 64

Senior management (Levels 13-

16)

n/a 0 0 0 0 0

Total 752 99.9 29 100 26 869

Table 3.10.3 Annual Leave for the period 1 January 2015 to 31 December 2015

Salary band Total days taken Number of Employees

using annual leave

Average per employee

Lower skilled (Levels 1-2) 0 0 0

Skilled (Levels 3-5) 1131 54 21

Highly skilled production

(Levels 6-8)

3195 139 23

Highly skilled supervision (Levels

9-12)

1573 73 22

Senior management

(Levels 13-16)

319 15 21

Contract 6-8 12 2 6

Contract 9-12 21 4 5

Contract 13-16 37 3 12

Total 6288 290 110

92

Table 3.10.4 Capped leave for the period 1 January 2015 to 31 December 2015 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 2014

Lower skilled (Levels 1-2)

0 0 0 0

Skilled (Levels 3-5) 0 0 0 0


0 0 0 0

Highly skilled supervision( Levels 9-12)

0 0 0 0

Senior management (Levels 13-16)

0 0 0 0

Total 0 0 0 0

The following table summarise payments made to employees as a result of leave that was not taken.

Table 3.10.5 Leave pay-outs for the period 1 April 2015 to 31 March 2016

Reason Total amount

(R’000)

Number of

employees

Average per

employee

Leave pay-out for 2014/15 due to non-utilisation of leave

for the previous cycle

101 5 20200

Capped leave pay-outs on termination of service for

2014/15

278 13 21385

Current leave pay-out on termination of service for 2014/15 31 6 5167

Total 410 24 46752

3.11 HIV/AIDS & Health Promotion Programmes

Table 3.11.1 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

None

-

Table 3.11.2 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.

Yes Ms Amanda Matiwane

2 Does the department have a dedicated unit or has it designated specific staff members to promote the health and well-being 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.

YEs Mr Gift Silingile Deputy Director: Employee health and wellness Ms Sinesipho Jojo - Intern

3 Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services

Yes o Promotion of safe sex o Distribution of condoms to

our offices and districts

93

Question Yes No Details, if yes

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.

Yes The committee deals with all the pillars of wellness programme. It has been approved by the HOD

5. Has the department reviewed its employment policies and practices to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed.

Yes HIV and TB management policy and action plan- approved by the HOD

6. Has the department introduced measures to protect HIV-positive employees or those perceived to be HIV-positive from discrimination? If so, list the key elements of these measures.

Yes The policy and the workshop given by the Department of Health has been done

7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved.

Yes ± 112 of 365 employees participated in the Departmental wellness day held on September 2015 and underwent Voluntary Counselling and Testing

8. Has the department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators.

Yes The indicator is part of the Departmental action plan approved by the HOD

3.12 Labour Relations

Table 3.12.1 Collective agreements for the period 1 April 2015 and 31 March 2016

Total number of Collective agreements/ Subject matter Date

1. Resolution 2 of 2015 Agreement on salary adjustments & improvements on conditions of service in the Public Service for the period of 2015/16-2017/18

2. Resolution 3 of 2015 Agreement on the review of the Government Employees

Medical Scheme ( GEMS)

3. Resolution 4 of 2015 Agreement on the review of Annexure A of PSCBC Resolution 1 of 2007: Danger Allowance

4. Resolution 5 of 2015 Agreement on the new danger dispensation

5. Resolution 6 of 2015 Agreement on the review of the post retirement

6. Resolution 7 of 2015 Framework agreement for the establishment of a Government Employees Housing Scheme ( GEHS)

7. Resolution 8 of 2015 Amendment to PSCBC resolution 2 of 2015 for salary adjustments and improvements on conditions of service in the public sector for the period 2015/16-2017/18

20 May 2015 20 May 2015 20 May 2015 20 may 2015 20 May 2015 27 May 2015 26 June 2015

94

Table 3.12.2 Misconduct and disciplinary hearings finalised for the period 1 April 2015 to 31

March 2016

Outcomes of disciplinary hearings Number % of total

Correctional counselling 1 7.14%

Verbal warnings 0 0

Written warning 0 0

Final written warning 4 28.57%

Suspended without pay 1 7.14%

Fine 0 0

Demotion 0 0

Dismissal 6 42.85%

Not guilty 0 0%

Case withdrawn 2 14.28%

Total 14 100.00%

Table 3.12.3 Types of misconduct addressed at disciplinary hearings for the period 1 April 2015 to 31

March 2016

Type of misconduct Number % of total

Misrepresentation & corruption 1 7.14%

Assault and Sexual Harassment 1 7.14%

Financial irregularities (case pending finalisation) 6 42.85%

Unlawfully operating a money lending scheme 0 0%

Abuse of government property 1 7.14%

Absenteeism, insubordination, derogatory language & carrying a firearm at work

4 28.57%

Dishonesty 1 7.14%

TOTAL 14 100.00%

Table 3.12.4 Grievances logged for the period 1 April 2015 to 31 March 2016

Grievances Number % of Total

Number of grievances resolved 15 88.23%

Number of grievances not resolved 2 11.76%

Total number of grievances lodged 17 100%

Table 3.12.5 Disputes logged with Councils for the period 1 April 2015 to 31 March 2016

Disputes Number % of Total

Number of disputes upheld 0 0%

Number of disputes dismissed 2 100%

Total number of disputes lodged 2 100% NB (The department has handled to date (April 2016) a total of 9 disputes where 7 disputes are still pending. The

reporting legend does not make provision to report on outstanding cases handled and postponed during the reporting

period)

Table 3.12.6 Strike actions for the period 1 April 2015 to 31 March 2016

Total number of person working days lost

0% 0 0

Total cost of working days lost

0% 0 0l

Amount (r‟000) recovered as a result of no work no pay

0% 0 0

95

Table 3.12.7 Precautionary suspensions for the period 1 April 2015 to 31 March 2016

Number of people suspended 08

Number of people whose suspension exceeded 30 days

08

Average number of days suspended 94 days

Cost of suspension(R‟000) R 1 243 776. 00

3.13 Skills development

Table 3.13.1 Training needs identified for the period 1 April 2015 to 31 March 2016

Occupational

category

Gender Number of

employees

as at 1

April 2015

Training needs identified at start of the reporting period

Learnerships Skills

Programmes &

other short

courses

Other forms

of training

Total


M 48 None Budget Management Monitoring and Evaluation SCOA and ERF SCM Financial Management Project Khaedu Job Evaluation Initial Training Job Evaluation Panel Training Detection and Combatting of Rigging Demand Management Contract Management Financial Management for Non-Financial Managers

HRDC Summit; PSTF Conference; Internal Auditor‟s Forum; IIASA Breakfast Forum Compulsory Induction Programme Performance Dev & Management System

48

F 56 None Budget Management Monitoring and Evaluation SCOA and ERF SCM Financial Management Project Khaedu Job Evaluation Initial Training Job Evaluation Panel Training Detection and Combatting of

PSTF Conference SITA CovTech Conference ; Annual Labour Law Conference; Compulsory Induction Programme Performance Dev & Management System

56

96

Rigging Demand Management Contract Management Financial Management for Non-Financial Managers

IIASA Breakfast Forum; HRDC Summit; TLN Conference

Professionals M 44 None Project Management Compulsory Induction Programme Performance Dev & Management System

44

F 4 Project Management Compulsory Induction Programme Performance Dev & Management System

4


M 20 None Budget Management

PSTF Conference; Internal Auditor‟s Forum; IIASA Breakfast Forum

20

F 21 Budget Management

SITA CovTech Conference ; Annual Labour Law Conference; IIASA Breakfast Forum; HRDC Summit; PSTF Conference; TLN Conference

21

Clerks M 57 None Diversity Management Project Management Compulsory Induction Programme

Internship programme for: -Internal Audit -IT -Labour

57

97

Performance Dev & Management System Minutes Taking course Office Management Presentation Skills

Relations -Financial Management WIL HRM and Finance

F 80 Diversity Management Project Management Compulsory Induction Programme Performance Dev & Management System Minutes Taking course Office Management Presentation Skills

Internship programme for: -Internal Audit -IT -Labour Relations -Financial Management WIL HRM and Finance

80


0 0 0 0 0 0

0 0 0 0 0 0


0 0 0 0 0 0

0 0 0 0 0 0


0 0 0 0 0 0

0 0 0 0 0 0


0 0 0 0 0 0

0 0 0 0 0 0


0 0 0 0 0 0

0 0 0 0 0 0

Total 330

98

Table 3.13.2 Training provided for the period 1 April 2015 to 31 March 2016

Occupational

category

Gender Number of

employees

as at 1

April 2015

Training

provided

within the

reporting

period

Skills Programmes &

other short courses

Other forms

of training

Total


- 48 - Budget Management Monitoring and Evaluation SCOA and ERF SCM Financial Management Job Evaluation Initial Training Demand Management Contract Management Financial

PSTF Conference; Internal Auditor‟s Forum; IIASA Breakfast Forum Compulsory Induction Programme Performance Dev & Management System

48

- 56 - Budget Management Monitoring and Evaluation SCOA and ERF SCM Financial Management Job Evaluation Initial Training Job Evaluation Panel Training Demand Management Contract Management Financial Management for Non-Financial Managers

PSTF Conference; Internal Auditor‟s Forum; IIASA Breakfast Forum Compulsory Induction Programme Performance Dev & Management System

56

Professionals - 44 - Project Management Compulsory Induction Programme Performance Dev & Management System

- 44

- 4 - Project Management Compulsory Induction Programme Performance Dev & Management System

- 4



- 20


- 21

Elementary Occupations

- - - - - -

99

13.14 Injury on duty

The following tables provide basic information on injury on duty.

Table 3.14.1 Injury on duty for the period 1 April 2015 to 31 March 2016

Nature of injury on duty Number % of total

Required basic medical attention only 0 0

Temporary Total Disablement 0 0

Permanent Disablement 0 0

Fatal 0 0

Total 0 0

13.15 Utilisation of Consultants

Table 3.15.1 Report on consultant appointments using appropriated funds for the period 1 April 2014 to 31 March 2015

Project title

Consultants Total number of consultants that

worked on project

Duration Contract value in

(work days) Rand

Financial

management and

reporting

Ernst and

Young 15 employees

261 days including

holidays R6 130 577

Proj No. Project title Description Total individual

consultants

Total

duration

Work days

Total contract value in Rand

F13080001/2 Matjhabeng Mun - Planning & Surveying : 2011-2014 Mmamahabane 500 - Bopa Lesedi

BOPA LESEDI Management Consultants (Pty) Ltd

1 241 R171 797

F13080001/3 Matjhabeng Mun - Planning & Surveying : 2011-2014 Nyakallong 300 Erven - Bopa Lesedi


1 241 R57 476

F13080001/4 Matjhabeng Mun - Planning & Surveying : 2011-2014 Phomolong 500 - Bopa Lesedi


1 241 R141 163

F13080001/5 Matjhabeng Mun - Planning & Surveying : 2011-2014 Kutlwanong 2900 - Bopa Lesedi


1 241 R525 215

F09080008/1 Botshabelo - 300 Matsapa Trading 613 Incompl.2013/14 ( Makoya Trading (2010/11)

Dibetsi Civil Engineers

1 241 R124 043

F11010001/1 Thaba Nchu - 100 Rehauhetswe Dev Incomplete 2013/15 (Makhulong Dev Trust (2010/2011)


1 241 R50 031

F11010013/1 Botshabelo-900 Pamper & Suprim Imcompl. 2013/14( Koena Prop (2010/2011)


1 241 R1 258 085

100



1 241 R1 700 076

F13100002/1 Soutpan 101 Two Rooms Ruwacon


1 241 R1 684 947

F14030006/1 Hertzogville 50 Ruwacon Topstructure 2014


1 241 R840 153

F14040002/1 Boshof - 35 Two Rooms Ruwacon Dibetsi Civil Engineers

1 241 R704 667

F14060003/1 Rammulotsi Storm Water Channels Upgrading 2014 Viljoenskroon _ Down Touch Investments

Down Touch Investments

1 241 R7 718 682

F15010011/1 Financial Management and Reporting

Ernst & Young 15 261 R8 822 736

F10080001/1 Bloemfontein - 500 Matsapa Incompl 2014/15 ( M2M Developers 2013/14 (500 Polokoe Dev (2010/2011))

E'TSHO 1 241 R430 044

F10080004/1 Thaba Nchu - 252 Your Trade Civil Constr (2010/2014)

E'TSHO 1 241 R12 614

F10080007/1 Bloemfontein - 300 Moyakhe Trading (2010/2011)

E'TSHO 1 241 R506 894

F10080012/1 Thaba Nchu - 400 Your Trade Civils Incompl 2013/14 (Jore Construction 2010/2011)

E'TSHO 1 241 R297 756

F10080013/1 Thaba Nchu- 54 Your Trade Incompl. 2013/14( 200 People First (2010/2011)

E'TSHO 1 241 R14 395

F10080074/1 Springfontein - 250 Mampotla & Suprim Incompl 2013/14 (FLASHCOR 137 2010/11

E'TSHO 1 241 R342 291

F10090019/1 Wepener - 159 Bokang Q Trading Incompl 2013/14 (2010/2011)

E'TSHO 1 241 R4 652

F10090022/1 Bloemfontein - Superb Homes 2013/2014 (500 Ziqoqe Constr (2010/2011))

E'TSHO 1 241 R70 357


E'TSHO 1 241 R55 310


E'TSHO 1 241 R331 861

F11040001/1 Bloemfontein 100 Superb Homes Incompl 2013/14 ( YBK HOMES 2011/2011

E'TSHO 1 241 R23 452

F13120001/1 Bloemfontein - 100 Heidedal 2 Rooms - C Max

E'TSHO 1 241 R227 459

F14020001/1 Bethulie 100 Mminathoko 2014/15 E'TSHO 1 241 R223 757

F14060002/1 Jagerfontein - 44 (PLS) Sediti Construction 2014/15

E'TSHO 1 241 R157 525

F14060003/1 Rammulotsi Storm Water Channels Upgrading 2014 Viljoenskroon _ Down Touch Investments

E'TSHO 1 241 R354 005

F14080007/1 Bethulie 300 Korean Solar 2014 E'TSHO 1 241 R1 182 714

F14080008/1 Botshabelo 35 Incomplete Furnserve 2014/15

E'TSHO 1 241 R169 758

F14080009/1 Bloemfontein - 6 Incomplete Furnserve 2014/15

E'TSHO 1 241 R18 361

101

F14050002/1 Welkom Bronville 50 Two - Rooms E'tsho (rectification) 2014/15

Fresh Harvest 1 241 R117 905

F14080010/1 Makgolokoeng - 100 Gt Molefe 2014/15

Fresh Harvest 1 241 R1 308 145

F14100001/1 Harrismith 132 Gt Molefe Topstructure 2014


F14100005/1 Heilbron - 100 Two Roomed Units Maono 2014/15


F15010004/1 Welkom Thabong 135 Two Rooms E'tsho 2015

Fresh Harvest 1 241 R739 030

F15020008/1 Viljoenskroon 70 Future Solar Fresh Harvest 1 241 R628 895

F14110004/1 HDA MTOP 2014 - 2018 Housing Development Agency

1 241 R6 481 210

F09080029/1 Winburg - 100 MKRK Contractors Incompl. 2013/14 (Zigana Mbele Construction cc (2010/2011)

IGS Consulting Engineers

1 241 R185 596

F10080026/1 Wesseslsbron 100 Zama-Zama Suprim JV( Incompl 2013/15 (Double Step Trading 2010/2011)


1 241 R1 288 274

F10090021/1 Kroonstad 170 (Distinctive Choice Land Rest (Moleboheng Developers (Tuthela B Enter 2010/2011)


1 241 R96 855

F10100010/1 Brandfort - 201 Lihle Marketing Incomplete 2013/14 (Clear Creek Trading 115 2010/11)


1 241 R109 160

F11030003/1 Winburg - 50 MKRK Incompl. 2013/14 ( Zimvo Trading (2010/2011)


1 241 R65 457

F11090002/1 Brandfort - 156 Naturena Rock Incompl. 2013/14( Kalane Cleaning Womens Built (2011/2012)


1 241 R62 644

F12020001/1 Viljoenskroon 378 Future Solar Investment


1 241 R43 600

F14010007/1 Harrismith-300 Tshiame/khalanyoni (e'tsho)


1 241 R2 730 486

F14100009/1 Viljoenskroon 14 Mohlahleli Incomplete 2014


1 241 R6 955

F15010003/1 Kroonstad Brentpark 32 Two Rooms E'tsho 2015


1 241 R606 830

F10100018/1 Matjhabeng Mun - Infrastructure (2010/2014) Welkom/Thabong

Izigi zeAfrica 1 241 R661 806

F11010010/2 Welkom-100 Incomplete Project Double Step (2010/2011) Hennenman

Lilibara Projects 1 241 R48 853

F12060001/1 Welkom - 1700 Subs Quick Leap Investments (2012/2015)

Lilibara Projects 1 241 R8 808 274

F14040004/1 Welkom - 1424 IRDP Thandanani Thabong Ext 22 2014/15 Future Solar Investments


F14040004/2 Welkom - 1424 IRDP Thandanani Thabong Ext 22 2014/15 Maono Construction


F14040004/3 Welkom - 1424 IRDP Thandanani Thabong Ext 22 2014/15 Tebcon Developers


F14040006/1 Harrismith Schoonplaatz - 226 Robs Land Restitution 2014


102

F12100006/1 Ngwathe Municipality - Planning And Surveying (5300 Erven) Ngwathe, Tumahole, Mokwallo, Phiritona, Kwakwatsi

Lmv (pty) Ltd 1 241 R1 366 821

F00030006/1 Hostel: Welkom Hostel G LTE Consulting 1 241 R6 573 357

F99040002/2 Bloemfontein - 360 Dark and City Hostel CRU Ruwacon & Sedtrade - Bottom site / Top site(LTE)

LTE Consulting 1 241 R5 182 880

F15010011/1 Support on the Housing Subsidy System

Mafunyane Technologies cc

9 241 R6 367 475

F00120001/1 Bluegum-bosch - 2000 TTC & Group Ywo Rectification 2013/14 ( Subs. Phase 3 (China Everbright)

Mafuri Infrastructure Africa

1 241 R797 744

F10080015/1 Ladybrand - 100 Bokang Q Incompl. 2013/15 ( Makana Women Constr (2010/11)


1 241 R322 542

F13100001/1 Bethlehem - 500 Vogelfontein Unital Holdings 2013/14


1 241 R2 703 907

F14030001/1 Vrede 1000 Tekeweni Civils - PHP 2013/14


1 241 R2 953 774

F14050001/1 Welkom - 100 Two-rooms E'tsho Mafuri Infrastructure Africa

1 241 R525 641

F14050002/1 Welkom Bronville 50 Two - Rooms E'tsho (rectification) 2014/15


1 241 R274 197

F14050003/1 Tweespruit 100 Two-rooms E'tsho(rectification)


1 241 R729 150

F10060009/1 Senekal - 150 Superb Home 2015/16(Motshwane 13/14(Tokollo Construction(10/11)))

Morula Consulting Engi

1 241 R91 000

F10080039/1 Heilbron 250 Incompl. 2013/14 - MB Malatji Entr. (250 Mgiftana Trading Enterprise(2010/11)


1 241 R94 423

F10080044/1 Parys - 200 MB Malatji Incomp 2013/14 (Hlengiwe Business Solutions (2010/11)


1 241 R110 179

F10090005/1 Wesselsbron 112 C Max Land Rest 2013/14 (Stamill Const 2010/2011)


1 241 R192 866

F10090027/1 Koppies-350 Tuthela Bogolo (2010/2011)


1 241 R841 335

F10110004/1 Kroonstad 350 Hlasela units Thutela Bogolo Enterprise (2011) Kroonstad/Seisiville


1 241 R784 746

F14100004/1 Thaba Nchu - 187 Superb Homes 2014/15


1 241 R949 593

F14100007/2 Tweespruit 100 Superb Homes Topstructure 2014 Phahameng Rural 38


1 241 R110 000

F15010009/2 Military Veterans 2015/16 Bloemfontein-Lourier Park 30


1 241 R702 165

F12040001/3 Professional Services - Nurcha (proj Man) Extended contract(until 31 March 2015)

Nurcha Finance Company

1 241 R3 533 019

F15010011/1 Forensic Investigations Open Waters Advanced Risk Solution

1 241 R127 224

F14070001/1 Lejweleputswa Planning & Surveying 2012-2014 Bultfontein

Phe Thogo Consulting cc

1 241 R290 533

F09080010/1 Tweeling - 300 Sedtrade Incomplete 2013/15 ( ENM

PHETOGO Project Management &

1 241 R518 426

103

TRADING(2010/11) Engineers ( Pty ) LTD

F10010004/1 Sasolburg - 500 Tauris Garden Trading Incompl. 2013/1 ( Koena Prop. Dev. 2010/2011

PHETOGO Project Management & Engineers ( Pty ) LTD

1 241 R628 644

F10080035/1 Frankfort - 500 Sedtrade Incomplete 2013/15 (Ubuhlebethu cc (2010/11)


1 241 R979 311

F10080069/1 Sasolburg- 400 Tauris Garden incompl. 2013/15 ( Ndabambi Roots Constr (2010/2011)


1 241 R785 503

F14030005/1 Parys 400 Tumahole Maono Topstructure 2014


1 241 R4 091 550

F15010006/1 Zastron 200 Two Rooms E'tsho 2015


1 241 R2 058 561

F14040005/1 Ficksburg - 376 Tsharwa Thebe Topstructure 2014

Selatile Moloi Consulting Engineers

1 241 R2 157 204

F14080003/1 Kroonstad - 2014/15 Bokahosane Ba Bana Special Needs Housing (ROBS Inv.)

Theunissen Jankowitz Architects

1 241 R328 604

F14090003/1 Professional Resource Team Of Asbestos Eradication - Blackhead 2014

Blackhead Consulting (Pty) Ltd JV

1 241 R61 500 000

NB: Information for Ernst and Young, the total amount differs as a result of calculation made from contractual amount vs total amount paid in 2015/2016 financial year

Total number of projects Total individual

consultants

Total duration

Work days

Total contract value in Rand

87 21 20987 R173 270 216

Table 3.15.2 Report on consultant appointments using Donor funds for the period 1 April 2015 to 31 March 2016

Project title Consultants

Total Number of consultants that worked on project

Duration Donor and contract value in Rand (Work days)

None None None None None

3.16 Severance Packages

Table 3.16.1 Granting of employee initiated severance packages for the period 1 April 2015 to

31 March 2016

None

104

PART E: FINANCIAL INFORMATION

FREE STATE: HUMAN SETTLEMENTS VOTE 13

REPORT OF THE AUDITOR GENERAL

for the year ended 31 March 2016

105

Report of the Auditor-General to the Free State

Legislature on Vote no. 13: Department of Human

Settlements

Report on the financial statements

Introduction

1. I have audited the financial statements of the Department of Human Settlements set out on pages 114 to 173, which comprise the appropriation statement, the statement of financial position as at 31 March 2016, the statement of financial performance, statement of changes in net assets and cash flow statement for the year then ended, as well as the notes, comprising a summary of significant accounting policies and

other explanatory information.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with the Modified Cash Standard prescribed by the National Treasury, the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA), the Division of Revenue Act of South Africa, 2015 (Act No. 1 of 2015) (DoRA), and for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the International Standards on Auditing. Those standards require that I comply with ethical requirements, and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor‟s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity‟s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity‟s internal control. An audit




106

also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit opinion.

Basis for qualified opinion

Irregular expenditure

6. The department did not comply with Treasury Regulation (TR) 12.5.2 when writing off irregular expenditure of R2 781 534 000 (2015: R1 635 467 000) as disclosed in note 24 to the financial statements, as adequate and proper investigations were not performed prior to the write-off to determine whether the losses can be recovered from any liable parties. Consequently, irregular expenditure not condoned and not recoverable was overstated and irregular expenditure not condoned and recoverable understated. I was not able to determine the impact as it was impracticable to do so. Additionally, there was a resultant impact on receivables disclosed in note 12 to the financial statements. Furthermore, the department did not include particulars of all the irregular expenditure incurred in the notes to the financial statements, as required by section 40(3)(i) of the PFMA. The department made payments of R62 978 995, in the current and prior years, which were in contravention of the supply chain management requirements, and were not included in irregular expenditure. I was not able to determine the full extent of the misstatement as it was impracticable to do so.

Transfers and subsidies

7. I was unable to obtain sufficient appropriate audit evidence that transfers and subsidies were properly accounted for the status of the accounting records relating to professional fees paid to consultants on housing projects included therein. I was unable to confirm transfers and subsidies by alternative means. Consequently, I was unable to determine whether any adjustments to transfers and subsidies stated at R1 029 111 000 in note 7 to the financial statements were necessary.

Payables not recognized

8. I was unable to obtain sufficient appropriate audit evidence that payables not recognised were properly accounted for due to the status of the accounting records relating to retention creditors to be paid to contractors on housing projects included therein. I was unable to confirm payables not recognised by alternative means. Consequently, I was unable to determine whether any adjustments to payables not recognized stated at R1 299 851 000 in note 20.2 to the financial statements were necessary.




107

Accruals

9. I was unable to obtain sufficient appropriate audit evidence for accruals as the department did not maintain accurate and complete records of goods and services received but not yet paid for used to determine accruals. I could not confirm the amounts by alternative means. Consequently, I was unable to determine whether any adjustment to accruals stated at R180 807 000 (2015: R943 792 000), as disclosed in note 20.1 in the financial statements was necessary.

Qualified opinion

10. In my opinion, except for the possible effects of the matters described in the basis for qualified opinion paragraphs, the financial statements present fairly, in all material respects, the financial position of the Department of Human Settlements as at 31 March 2016, its financial performance and cash flows for the year then ended, in accordance with the Modified Cash Standard prescribed by the National Treasury and the requirements of the PFMA and DoRA.

Emphasis of matters

11. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Restatement of corresponding figures

12. As disclosed in note 31 to the financial statements, the corresponding figures for 31 March 2015 have been restated as a result of an error discovered during 2016 in the financial statements of the Department of Human Settlements at, and for the year ended, 31 March 2015.

Significant uncertainties

13. With reference to note 18 to the financial statements, the department received claims amounting to R38 511 000 (2015: 98 495 000).The department is opposing these claims. The ultimate outcome of the matter could not be determined and no provision for any liability that may result was made in the financial statements.

Impairment of receivables

14. As disclosed in note 12.4 to the financial statements, material impairment of R7 238 000 was incurred as a result of irrecoverable debtors. The receivables were older than three years and the impairment was due to unsuccessful attempts to recover the amount.




108

Payables

15. Payables which exceed the payment term of 30 days, as required in treasury regulation 8.2.3, amounted to R1 311 364 000. This amount, in turn, exceeded the voted funds to be surrendered of R20 279 000, as per the statement of financial performance, by R1 291 085 000. The amount of R 1 291 085 000 would therefore have constituted unauthorised expenditure had the amounts due been paid in time.

Unspent conditional grants

16. As disclosed in note 7 to the financial statements, the department transfers funds to state agencies and other suppliers to assist the department to fulfil its mandate. The disclosed unspent funds at year-end amounted to R21 836 000.

Financial sustainability

17. Note 32 to the financial statements indicates that the department‟s cumulative financial implications of note 15 (payables) and note 20 (accruals and payables not recognised) would result in a decrease in the 2016-17 budget available for programme expenditure equal to the aggregate amount of these items. These matters indicate material uncertainties relating to events and conditions that may cast significant doubt on the department‟s ability to meet its financial obligations as they fall due and achievement of service delivery as outlined in the annual performance plan.

Additional matter

18. I draw attention to the matter below. My opinion is not modified in respect of this matter:

Unaudited supplementary schedules

19. The supplementary information set out on pages 174 to 185 does not form part of the financial statements and is presented as additional information. I have not audited these schedules and, accordingly, I do not express an opinion them.

Report on other legal and regulatory requirements

20. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof, I have a responsibility to report findings on the reported performance information against predetermined objectives of selected programmes presented in the annual performance report, compliance with legislation and internal control. The objective of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these matters.




109

Predetermined objectives

21. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information of the following selected programmes presented in the annual performance report of the department for the year ended 31 March 2016:

Programme 2: Housing needs, research and planning, on pages 42 to 45

Programme 3: Housing development, on pages 46 to 53.

22. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

23. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury‟s annual reporting principles and whether the reported performance was consistent with the planned programmes. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury‟s Framework for managing programme performance information (FMPPI).

24. I assessed the reliability of the reported performance information to determine

whether it was valid, accurate and complete. 25. The material findings in respect of the selected programmes are as follows:

Programme 2: Housing needs, research and planning

Usefulness of reported performance information

26. The FMPPI requires that performance indicators should have clear definitions so that data can be collected consistently and is easy to understand and use. A total of 43% of indicators were not well defined.

Programme 3: Housing development

Usefulness of reported performance information

27. The FMPPI requires that performance targets should be measurable. A total of 23% of the targets were not measurable. This is due to the fact that some of the significant technical indicators‟ descriptions were not clear and specific with regard to the source documentation in order to evaluate the required outcome.




110

Reliability of reported performance information

28. The 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 supporting evidence could not be provided for 21% of the targets to assess the reliability of the reported performance information.

Additional matter matters

29. I draw attention to the following matters:

Achievement of planned targets

30. Refer to the annual performance report on page(s) 42 to 45; 46 to 53 for information on the achievement of planned targets for the year. This information should be considered in the context of the qualified opinion and conclusions expressed on the usefulness and reliability of the reported performance information in paragraphs 26, 27 and 28 of this report.

Adjustment of material misstatements

31. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of programme 2 – housing needs, research and planning. As management subsequently corrected only some of the misstatements, I raised material findings on the usefulness and reliability of the reported performance information. Those that were not corrected are included in the basis for qualified opinion paragraphs

Unaudited supplementary information

32. The supplementary information set out on pages 174 to 185 does not form part of the annual performance report and is presented as additional information. I have not audited these schedules and, accordingly, I do not report on them.

Compliance with legislation

33. I performed procedures to obtain evidence that the department had complied with applicable legislation regarding financial matters, financial management and other related matters. My material findings on compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows:

Strategic planning and performance management

34. Effective, efficient and transparent systems of internal control over performance




111

information and management were not maintained, as required by section 38(1)(a)(i) of the PFMA.

Annual financial statements and annual report

35. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework, as required by section 40(1)(b) of the PFMA. Material misstatements on disclosure items identified by the auditors in the submitted financial statements were subsequently corrected, but the uncorrected material misstatements resulted in the financial statements receiving a qualified audit opinion.

Procurement and contract management

36. I could not obtain sufficient appropriate audit evidence that all contracts were awarded in accordance with the legislative requirements as the requested tender documentation could not be submitted.

Expenditure management

37. Effective steps were not taken to prevent irregular and fruitless and wasteful expenditure, as required by section 38(1)(c)(ii) of the PFMA and TR 9.1.1

38. Contractual obligations and money owed by the department were not settled within 30 days or an agreed period, as required by section 38(1)(f) of the PFMA and TR 8.2.3.

Internal control

39. I considered internal control relevant to my audit of the financial statements, annual performance report and compliance with legislation. The matters reported below are limited to the significant internal control deficiencies that resulted in the basis for qualified opinion, the findings on the annual performance report and the findings on compliance with legislation included in this report.

Leadership

40. Management did not adequately exercise oversight responsibility of the implementation of the action plan to address material weaknesses identified in the previous year in performance reporting and compliance with legislation, resulting in material findings being reported in the year under review.

Financial and performance management

41. The department did not maintain a proper record management system in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance report, resulting in material findings being reported in the year under review.




112

42. The processes followed during the preparation of the financial statements and the performance report were inadequate, resulting in material adjustments being made to the annual financial statements and the annual performance report submitted for auditing.

Other reports 43. I draw attention to the following engagements that could potentially have an impact

on the department‟s financial, performance and compliance related matters. My opinion is not modified in respect of these engagements that are either in progress or have been completed.

Investigations

44. An investigation was conducted on suspected fraud in the payment of advances to material suppliers during 2010-11 financial year. The investigation commenced in June 2012 and was still ongoing at the time of reporting.

45. An investigation was conducted on housing subsidies paid to beneficiaries. The investigation commenced in June 2008-09 financial year. This investigation was extended to include suspected fraud in the payment of advances to material suppliers during the 2010-11 financial year. The investigation was still in progress at the reporting date.

Bloemfontein

4 May 2017




113

Report of the Auditor-General to the Free State

Legislature on the Free State Housing Fund

Report on the financial statements

Introduction

1. I have audited the financial statements of the Free State Housing Fund set out on

pages 188 to 205, which comprise the statement of financial position as at

31 March 2016, the statement of financial performance, statement of changes in net

assets, and cash flow statement for the year then ended, as well as the notes,

comprising a summary of significant accounting policies and other explanatory

information.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation and fair presentation of

these financial statements in accordance with the South African Standards of

Generally Recognised Accounting Practice and the requirements of the Public

Finance Management Act of South Africa, 1999 (Act no.1 of 1999), and for such

internal control as the accounting officer determines is necessary to enable the

preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

Auditor-general’s responsibility

3. My responsibility is to express an opinion on these financial statements based on

my audit. I conducted my audit in accordance with International Standards on

Auditing. Those standards require that I comply with ethical requirements, and plan

and perform the audit to obtain reasonable assurance about whether the financial

statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the

amounts and disclosures in the financial statements. The procedures selected

depend on the auditor‟s judgement, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud or error. In making




114

those risk assessments, the auditor considers internal control relevant to the entity‟s

preparation and fair presentation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity‟s internal control. An audit

also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by management, as well as

evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to

provide a basis for my audit opinion.

Opinion

6. In my opinion, the financial statements present fairly, in all material respects, the

financial position of the Free State Housing Fund as at 31 March 2016 and their

financial performance and cash flows for the year then ended, in accordance with

the Generally Recognised Accounting Practice and the requirements of the Public

Finance Management Act.

Emphasis of matters

I draw attention to the matters below. My opinion is not modified in respect of these

matters.

Significant matters

7. The Free State Housing Fund will discontinue once the housing act No.107 of 1997

is cancelled. Specific timeline pertaining to this matter has not been outlined. As a

result the entity is a process of clearing all the assets, accounts, and transactions,

but will only be able to close the fund once the housing act has been repealed.

Related parties

8. As disclosed in the annual financial statements, the Free State Housing Fund‟s

management decisions are controlled by the Free State Department of Human

Settlements. Amount disclosed in payables regarding the related party transactions

is R 12 996 000.




115

Report on other legal and regulatory requirements

9. We did not audit performance against predetermined objectives, as the fund is not

required to prepare a report on its performance against predetermined objectives.

The fund does not fall within the ambit of the Public Finance Management Act and

the entity-specific legislation does not require reporting on performance against

predetermined objectives.

Compliance with legislation

10. We did not audit compliance with legislation, as the fund is not required to comply

with the PFMA. The fund does not fall within the ambit of the Public Finance

Management Act.

Internal control

11. I considered internal control relevant to my audit of the financial statements. I did

not identify any significant deficiencies in internal control.

Bloemfontein

31 July 2016




116

Table of Contents

Appropriation Statement 117

Notes to the Appropriation Statement 137

Statement of Financial Performance 140

Statement of Financial Position 139

Statement of Changes in Net Assets 140

Cash Flow Statement 141

Accounting Policies

142

Notes to the Annual Financial Statements 150

Statement of Conditional Grants Received 174

Annexure 1A Statement of Transfers to Higher Education Institutions

175

Annexure 1B Statements of Transfers to Households 176

Annexure 1C Statement of Gifts, Donations and Sponsorships Received 178

Annexure 1D Statement of Actual Monthly Expenditure per Grant 179

Annexure 2 Statement of Contingent Liabilities 180

Annexure 3 Claims Recoverable 182

Annexure 4 Claims Payable 183

Annexure 5 Inventory 184

Annexure 6 Work in Progress 186


APPROPRIATION STATEMENT for the year ended 31 March 2016

117

Appropriation per programme

2015/16 2014/15

Voted funds and direct charges Adjusted

Appropriation

Shifting

of Funds

Virement Final

Appropriation

Actual

Expenditure

Variance Expenditure

as % of

final

appropriation

Final

Appropriation

Actual

Expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Programmes

1. ADMINISTRATION 93 964 - (7 400) 86 564 80 316 6 248 92.8% 80 485 77 314

2. HOUSING NEEDS, RESEARCH

PLANNING

18 232 - - 18 232 17 145 1 087 94.0% 18 553 17 607

3. HOUSING DEVELOPMENT 1 128 250 - 7 400 1 135 650 1 122 766 12 884 98.9% 1 128 216 1 111 861

4. HOUSING ASSETS MANAGEMENT

PROPERTY MANAGEMENT

865 - - 865 805 60 93.1% 964 770

TOTAL 1 241 311 - - 1 241 311 1 221 032 20 279 98.4% 1 228 218 1 207 552

2015/16 2014/15

Final

Appropriation

Actual

Expenditure

Final

Appropriation

Actual

Expenditure

Actual amounts per statement of financial performance (total revenue) 1 241 311 1 228 218

ADD - -

Aid assistance

Prior year unauthorised expenditure approved without funding

- -

Actual amounts per statement of financial performance (total expenditure) 1 221 032 1 207 552



118

Appropriation per economic classification

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Economic classification

Current payments 187 647 9 882 - 197 529 189 937 7 592 96.2% 149 158 154 264

Compensation of employees 149 594 (7 148) - 142 446 135 074 7 372 94.8% 108 355 107 772

Salaries and wages 130 726 (4 982) 77 125 821 120 711 5 110 95.9% 95 597 95 114

Social contributions 18 868 (2 166) (77) 16 625 14 363 2 262 86.4% 12 758 12 658

Goods and services 38 053 17 015 - 55 068 54 849 219 99.6% 40 752 46 463

Administrative fees 804 (18) - 786 610 176 77.6% 564 423

Advertising 181 (7) - 174 131 43 75.6% 478 245

Minor assets 59 2 - 61 42 19 68.4% 435 250

Audit costs: External 5 160 - - 5 160 5 996 (836) 116.2% 7 701 7 009

Bursaries: Employees 359 - - 359 238 121 66.4% 127 43

Catering: Departmental activities

858 (70) - 788 772 16 98.0% 991 734

Communication 1 231 (10) - 1 221 975 246 79.8% 1 131 1 084

Computer services 3 456 - - 3 456 3 444 12 99.6% 1 961 1 933

Consultants: Business and advisory services

474 8 823 - 9 297 9 233 64 99.3% 55 10 002

Legal services

Contractors

Agency and support/outsourced services

Entertainment

1 230

3 021

53

57

2 875

(1)

-

-

-

-

-

-

4 105

3 020

53

57

4 093

2 841

44

8

12

179

9

49

99.7%

94.1%

83.2%

13.7%

2 774

1 831

85

36

2 767

1 724

-

10

Fleet services 1 273 - - 1 273 2 513 (1 240) 197.4% 2 688 2 688



119

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Inventory: Clothing material and supplies

- - - - - - - 12 1

Inventory: Materials and supplies

100 (100) - - - - - - -

Consumable supplies 177 100 - 277 134 143 48.2% 187 104

Consumable: Stationery, printing and office supplies

1 733 (39) - 1 694 774 920 45.7% 1 378 963

Operating leases 966 - - 966 3 282 (2 316) 339.8% 4 093 3 869

Property payments 666 59 - 725 554 171 76.5% 540 399

Travel and subsistence 13 924 5 377 - 19 301 17 329 1 972 89.8% 10 864 9 773

Training and development 962 - - 962 619 343 64.4% 506 428

Operating payments 930 24 - 954 943 11 98.8% 1 580 1 335

Venues and facilities 379 - - 379 274 105 72.2% 735 679

Interest and rent on land - 15 - 15 14 1 96.2% 51 29

Interest - 15 - 15 14 1 96.2% 51 29

Transfers and subsidies 1 050 498 (8 590) - 1 041 908 1 029 111 12 797 98.8% 1 075 723 1 050 458

Higher education institutions 273 3 - 276 275 1 99.5% 761 352

Households 1 050 225 (8 593) - 1 041 632 1 028 837 12 795 98.8% 1 074 962 1 050 106

Social benefits 174 1 312 - 1 486 1 636 (150) 110.1% 355 350

Other transfers to households 1 050 051 (9 905) - 1 040 146 1 027 200 12 946 98.8% 1 074 607 1 049 756

Payments for capital assets 3 166 (1 292) - 1 874 1 868 6 99.7% 3 337 2 752

Machinery and equipment 3 166 (1 292) 1 874 1 868 6 99.7% 3 337 2 752

Other machinery and equipment

3 166 (1 292) 1 874 1 868 6 99.7% 3 337 2 752

Payments for financial assets 114 (114) 78

1 241 311 1 241 311 1 221 032 20 279 98.4% 1 228 218 1 207 552



120

PROGRAMME 1: ADMINISTRATION

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. CORPORATE SERVICES 93 964 - (7 400) 86 564 80 316 6 248 92.8% 80 485 77 314

Total for sub programme 93 964 - (7 400) 86 564 80 316 6 248 92.8% 80 485 77 314


Current payments 93 144 - (7 400) 85 744 78 663 7 081 91.7% 78 598 75 740

Compensation of employees 68 806 - (7 400) 61 406 52 570 8 836 85.6% 48 981 48 677

Salaries and wages 60 970 (535) (7 323) 53 112 45 619 7 493 85.9% 42 839 42 590

Social contributions 7 836 535 (77) 8 294 6 951 1 343 83.8% 6 142 6 087

Goods and services 24 338 (15) - 24 323 26 079 (1 756) 107.2% 29 567 27 035


Advertising 86 - - 86 85 1 98.4% 173 84

Minor assets 20 2 - 22 13 9 59.1% 148 73

Audit costs: External 5 160 - - 5 160 5 996 (836) 116.2% 7 701 7 009

Bursaries: Employees 359 - - 359 238 121 66.4% 127 43


302 (15) - 287 245 42 85.5% 590 433

Communication 1 231 (10) - 1 221 975 246 79.8% 1 131 1 084

Computer services 3 456 - - 3 456 3 444 12 99.6% 1 961 1 933


474 - - 474 411 63 86.7% 55 54

Legal services 1 230 39 - 1 269 1 257 12 99.1% 2 774 2 767

Contractors 2 669 - - 2 669 2 504 165 93.8% 1 353 1 289

Agency and support / outsourced services

53 - - 53 44 9 83.2% 85 -



121

PROGRAMME 1: ADMINISTRATION

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

Economic classification R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Entertainment 32 1 - 33 8 25 22.8% 24 9

Fleet services 1 273 - - 1 273 2 513 (1 240) 197.4% 2 688 2 688

Inventory: Materials and supplies

100 (100) - - - - - - -

Consumable supplies 94 100 - 194 112 82 57.9% 132 72


815 (39) - 776 375 401 48.3% 670 520

Operating leases 966 - - 966 3 282 (2 316) 339.8% 4 093 3 869

Property payments 331 - - 331 329 2 99.5% 1

Travel and subsistence 4 019 15 - 4 034 3 135 899 77.7% 4 674 4 205

Training and development 962 - - 962 619 343 64.4% 506 428

Operating payments 254 - - 254 249 5 98.0% 190 95


Interest and rent on land - 15 - 15 14 1 96.2% 50 28

Interest - 15 - 15 14 1 96.2% 50 28


Households

Social benefits

55

55

55

-

-

-

-

-

-

-

-

55

55

55

52

52

52

3

3

3

94.8%

94.8%

94.8%

4

4

4

3

3

3

Payments for capital assets 765 - - 765 1 486 (721) 194.2% 1 883 1 571

Machinery and equipment


765

765

-

-

-

-

765

765

1 486

1 486

(721)

(721)

194.2%

194.2%

1 883

1 883

1 571

1 571

Payments for financial assets 114 (114)

93 964 (7 400) 86 564 80 316 6 248 92.8% 80 485 77 314



122

PROGRAMME 2: HOUSING NEEDS, RESEARCH & PLANNING

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. ADMINISTRATION 1 810 454 - 2 264 1 904 360 84.1% 1 941 1 874

2. POLICY 3 902 (900) - 3 002 2 766 236 92.2% 2 175 2 129

3. PLANNING 12 520 446 - 12 966 12 474 492 96.2% 14 437 13 604

Total for sub programmes 18 232 - - 18 232 17 145 1 087 94.0% 18 553 17 607


Current payments 17 164 - - 17 164 16 593 571 96.7% 17 100 16 617

Compensation of employees 14 657 - - 14 657 14 311 346 97.6% 12 563 12 545

Salaries and wages 13 003 (1) - 13 002 12 642 360 97.2% 11 208 11 196

Social contributions 1 654 1 - 1 655 1 669 (14) 100.8% 1 355 1 349

Goods and services 2 507 - - 2 507 2 282 226 91.0% 4 537 4 072


Advertising 42 (7) - 35 35 - 99.2% 85 47

Minor assets 13 - - 13 3 10 20.7% 113 93


Contractors

Entertainment

Consumable supplies

88

107

2

18

(13)

(2)

(1)

1

-

-

-

-

75

105

1

19

70

99

-

4

5

6

1

15

93.6%

94.3%

19.9%

338

256

3

31

269

222

-

21


105

- - 105 85 20 81.3% 187 151



123

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Property payments 144 (25) - 119 113 6 95.4% 367 279

Travel and subsistence 1 340 24 - 1 364 1 226 138 89.9% 1 444 1 354



Transfers and subsidies 536 - - 536 407 129 75.9% 971 551


Households 263 (3) - 260 132 128 50.9% 210 199

Social benefits 119 (3) - 116 93 23 80.5% 96 96

Other transfers to households 144 - - 144 39 105 27.1% 114 103

Payments for capital assets 532 - - 532 145 387 27.3% 482 439

Machinery and equipment 532 - - 532 145 387 27.3% 482 439


532 - - 532 145 387 27.3% 482 439

Payments for financial assets - - - - - - - - -

Total

18 232 - - 18 232 17 145 1 087 94.0% 18 553 17 607



124

2.1 SUB PROGRAMME: ADMINISTRATION

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Current payments 1 810 454 - 2 264 1 904 360 84.1% 1 941 1 874

Compensation of employees 1 501 400 - 1 901 1 634 267 86.0% 1 616 1 611

Salaries and wages 1 359 345 - 1 704 1 469 235 86.2% 1 469 1 466

Social contributions 142 55 - 197 165 32 83.8% 147 145

Goods and services 309 54 - 363 269 94 74.2% 325 263

Administrative fees 11 2 - 13 7 6 55.7% 10 8


Entertainment

Consumable supplies

5

2

8

(3)

(1)

-

-

-

-

2

1

8

2

-

1

-

1

7

100.0%

-

12.5%

5

3

5

4

-

2


6 - - 6 5 1 83.3% 66 54

Travel and subsistence 277 56 - 333 255 78 76.5% 236 195


- - - - - - - - -

Payments for capital assets

- - - - - - - - -


Total 1 810 454 - 2 264 1 904 360 84.1% 1 941 1 874



125

2.2 SUB PROGRAMME: POLICY

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Current payments 3 902 (900) - 3 002 2 766 236 92.2% 2 175 2 129

Compensation of employees 3 768 (900) - 2 868 2 673 195 93.2% 2 049 2 045

Salaries and wages 3 521 (896) - 2 625 2 389 236 91.0% 1 853 1 851

Social contributions 247 (4) - 243 284 (41) 116.8% 196 194

Goods and services 134 - - 134 94 40 70.1% 126 84

Administrative fees 3 - - 3 2 1 64.4% 3 1


Consumable supplies

5

7

-

-

-

-

5

7

2

2

3

5

31.9%

28.4%

21

7

-

4


37 - - 37 23 14 63.4% 65 62

Travel and subsistence

82 - - 82 65 17 79.3% 30 17

Transfers and subsidies - - - - - - - -- -


- - - - - - - - -


Total 3 902 (900) - 3 002 2 766 236 92.2% 2 175 2 129



126

2.3 SUB PROGRAMME: PLANNING

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriati

on

Actual

expenditure


Current payments 11 452 446 - 11 898 11 922 (24) 100.2% 12 984 12 614

Compensation of employees 9 388 500 - 9 888 10 004 (116) 101.2% 8 898 8 889

Salaries and wages 8 123 550 - 8 673 8 784 (111) 101.3% 7 886 7 879

Social contributions 1 265 (50) - 1 215 1 220 (5) 100.4% 1 012 1 010

Goods and services 2 064 (54) - 2 010 1 918 92 95.4% 4 086 3 725


Advertising 42 (7) - 35 35 - 99.2% 85 47

Minor assets 13 - - 13 3 10 20.7% 113 93


Contractors

Entertainment

Consumable supplies

78

107

3

(10)

(2)

1

-

-

-

68

105

4

67

99

1

1

6

3

98.5%

94.3%

20.0%

312

256

19

265

222

15


62 - - 62 57 5 91.7% 56 35

Property payments 144 (25) - 119 113 6 95.4% 367 279

Travel and subsistence 981 (32) - 949 906 43 95.5% 1 178 1 142



Transfers and subsidies 536 - - 536 407 129 75.9% 971 551


Households 263 (3) - 260 132 128 50.9% 210 199

Social benefits

119 (3) - 116 93 23 80.5% 96 96



127

2.3 SUB PROGRAMME: PLANNING

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriati

on

Actual

expenditure


Other transfers to households 144 - - 144 39 105 27.1% 114 103


Machinery and equipment 532 - - 532 145 387 27.3% 482 439


532 - - 532 145 387 27.3% 482 439


Total 12 520 446 - 12 966 12 474 492 96.2% 14 437 13 604



128

PROGRAMME3: HOUSING DEVELOPMENT

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. ADMINISTRATION 48 583 5 149 7 400 61 132 61 093 39 99.9% 49 574 48 106

2. FINANCIAL INTERVENTIONS 213 544 (5 290) - 208 254 208 221 33 100.00% 216 227 211 558

3. INCREMENTAL ITERVENTIONS 703 685 45 029 - 748 714 735 904 12 810 98.3% 748 913 739 662

4. SOCIAL AND RENTAL

INTERVENTION

160 090 (44 888) - 115 202 115 200 2 100.0% 111 502 110 535

5. RURAL INTERVENTIONS - - - - - - - - -

6. EXPANDED PUBLIC WORKS

PROGRAMME INCETNIVES

2 348 - - 2 348 2 348 - 100.0% 2 000 2 000

Total for sub programmes 1 128 250 7 400 1 135 650 1 122 766 12 884 98.9% 1 128 216 1 111 861


Current payments 76 474 9 882 7 400 93 756 93 877 (121) 100.1% 52 496 51 189

Compensation of employees 65 544 (7 148) 7 400 65 796 67 453 (1 657) 102.5% 46 291 46 039

Salaries and wages 56 241 (4 437) 7 400 59 204 61 817 (2 613) 104.4% 41 101 40 886

Social contributions 9 303 (2 711) - 6 592 5 636 956 85.5% 5 190 5 153

Goods and services 10 930 17 030 - 27 960 26 423 1 537 94.5% 6 205 15 098


Advertising - - - - 12 (12) - 114 114

Minor assets 26

- -- 26 26 - 100.00% 174 84



129

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Catering: Departmental activities 468 (42) - 426 457 (31) 107.2% 63 32


- 8 823 - 8 823 8 823 - 100.0% - 9 948

Legal services - 2 836 - 2 836 2 835 1 100.0% - -

Contractors 245 1 - 246 237 9 96.4% 222 213

Entertainment 23 - - 23 - 23 0.00% 9 1

Inventory: Clothing material and supplies

- - - - - - - 12 1

Consumable supplies 65 (1) - 64 18 46 27.4% 24 11


747 - - 747 285 462 38.2% 325 134


Travel and subsistence 8 565 5 338 - 13 903 12 968 935 93.3% 4 746 4 214

Operating payments 131 (1) - 130 128 2 98.7% 339 238

Venues and facilities 178 - - 178 177 1 99.5% 13 -

Transfers and subsidies 1 049 907 (8 590) - 1 041 317 1 028 652 12 665 98.8% 1 074 748 1 049 904

Households 1 049 907 (8 590) - 1 041 317 1 028 652 12 665 98.8% 1 074 748 1 049 904

Social benefits - 1 315 - 1 315 1 491 (176) 113.4% 255 251

Other transfers to households 1 049 907 (9 905) - 1 040 002 1 027 161 12 841 98.8% 1 074 493 1 049 653

Payments for capital assets 1 869 (1 292) - 577 237 340 41.1% 972 742

Machinery and equipment 1 869 (1 292) - 577 237 340 41.1% 972 742

Other machinery and equipment 1 869 (1 292) - 577 237 340 41.1% 972 742

Payments for financial assets - - - - - - - - 78

Total 1 128 250 - 7 400 1 135 650 1 122 766 12 884 98.9% 1 128 216 1 111 861



130


2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Current payments 47 553 3 800 7 400 58 753 58 885 (132) 100.2% 47 496 46 189

Compensation of employees 43 111 - 7 400 50 511 52 172 (1 661) 103.3% 41 291 41 039

Salaries and wages 36 724 346 7 400 44 470 47 086 (2 616) 105.9% 36 439 36 221

Social contributions 6 387 (346) - 6 041 5 086 955 84.2% 4 852 4 818

Goods and services 4 442 3 800 - 8 242 6 713 1 529 81.4% 6 205 5 150


Advertising - - - - 12 (12) - 114 114

Minor assets 26 - - 26 26 - 100.0% 174 84

Catering: Departmental activities 405 - - 405 436 (31) 107.6% 63 32

Contractors 9 1 - 10 1 9 12.5% 222 213

Entertainment 23 - - 23 - 23 0.00% 9 1

Consumable supplies 65 (1) - 64 18 46 27.4% 24 11


662 - - 662 201 461 30.4% 325 134


Travel and subsistence 2 761 3 836 - 6 597 5 666 931 85.9% 4 746 4 214

Operating payments 130 - - 130 128 2 98.7% 339 238

Venues and facilities

- - - - - - - 13 -

Transfers and subsidies 453 1 349 - 1802 1 971 (169) 109.4% 1 106 1 097

Households 453 1 349 - 1 802 1 971 (169) 109.4% 1 106 1 097

Social benefits - 1 315 - 1 315 1 491 (176) 113.4% 255 251

Other transfers to households 453 34 - 487 480 7 98.6% 851 846



131


2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure



Machinery and equipment 577 - 577 237 340 41.1% 972 742


577 - - 577 237 340 41.1% 972 742

Payments for financial assets 78

Total 48 583 5 149 7 400 61 132 61 093 39 99.9% 49 574 48 106



132

3.2 SUB PROGRAMME: FINANCIAL INTERVENTIONS

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Current payments 28 921 6 082 - 35 003 34 992 11 100.0% 5 000 14 948

Compensation of employees 22 433 (7 148) - 15 285 15 281 4 100.0% 5 000 5 000

Salaries and wages 19 517 (4 783) - 14 734 14 732 2 100.0% 4 662 4 665

Social contributions 2 916 (2 365) - 551 549 2 99.7% 338 335

Goods and services 6 488 13 230 - 19 718 19 711 7 100.0% - 9 948

Administrative fees 121 112 - 233 233 - 99.9% - -

Catering: Departmental activities 63 (42) - 21 21 - 98.6% - -


- 8 823 - 8 823 8 823 - 100.0% - 9 948

Legal services - 2 836 - 2 836 2 835 1 100.0% - -

Contractors 236 - - 236 236 - 100.0% - -


85 - - 85 84 1 98.9% - -

Property payments

Travel and subsistence 5 804 1 502 - 7 306 7 302 4 99.9% - -

Operating payments 1 (1) - - - - - - -

Venues and facilities

178 - - 178 177 1 99.5% - -

Transfers and subsidies 183 331 (10 080) - 173 251 173 229 22 100.0% 211 227 196 610

Households

Other transfers to households

183 331

183 331

(10 080)

(10 080)

-

-

173 251

173 251

173 229

173 229

22

22

100.0%

100.0%

211 227

211 227

196 610

196 610



133

3.2 SUB PROGRAMME: FINANCIAL INTERVENTIONS

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Payments for capital assets 1 292 (1 292) - - - - - - -

Machinery and equipment 1 292 (1 292) - - - - - - -


1 292 (1 292) - - - - - - -


Total 213 544 (5 290) - 208 254 208 221 33 100.0% 216 227 211 558

3.3 SUB PROGRAMME: INCREMENTAL INTERVENTIONS

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Current Payments


-

703 685

-

45 029

-

-

-

748 714

-

735 904

-

12 810

-

98.3%

-

748 913

-

739 662

Households 703 685 45 029 - 748 714 735 904 12 810 98.3% 748 913 736 662

Other transfers to households 703 685 45 029 - 748 714 735 904 12 810 98.3% 748 913 739 662


- - - - - - - - -


Total 703 685 45 029 - 748 714 735 904 12 810 98.3% 748 913 739 662



134

3.4 SUB PROGRAMME: SOCIAL AND RENTAL INTERVENTIONS

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Current Payments


-

160 090

-

(44 888)

-

-

-

115 202

-

115 200

-

2

-

100.0%

-

111 502

-

110 535

Households 160 090 (44 888) - 115 202 115 200 2 100.0% 111 502 110 535

Other transfers to households 160 090 (44 888) - 115 202 115 200 2 100.0% 111 502 110 535


- - - - - - - - -


Total 160 090 (44 888) - 115 202 115 200 2 100.0% 111 502 110 535

3.5 SUB PROGRAMME: RURAL INTERVENTIONS

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Current Payments


-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-


- - - - - - - - -


Total - - - - - - - - -



135

3.6 SUB PROGRAMME: EXPANDED PUBLIC WORKS PROGRAMME INCENTIVES

2015/16 2014/15

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure


Current Payments


-

2 348

-

-

-

-

-

2 348

-

2 348

-

-

-

100.0%

-

2 000

-

2 000

Households 2 348 - - 2 348 2 348 - 100.0% 2 000 2 000

Other transfers to households 2 348 - - 2 348 2 348 - 100.0% 2 000 2 000


- - - - - - - - -


Total 2 348 - - 2 348 2 348 - 100.0% 2 000 2 000



136

Programme 4: HOUSING ASSETS MANAGEMENT AND PROPERTY MANAGEMENT

2015/16 2014/15

Adjusted

Appropriati

on

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. ADMINISTRATION 865 - - 865 805 60 93.1% 964 770

Total for sub programme 865 - - 865 805 60 93.1% 964 770


Current payments 865 - - 865 805 60 93.1% 964 770

Compensation of employees 587 - - 587 740 (153) 126.0% 520 511

Salaries and wages 512 (9) - 503 632 (129) 125.7% 449 442

Social contributions 75 9 - 84 107 (23) 127.8% 71 69

Goods and services 278 - - 278 66 212 23.6% 443 258

Advertising 53 - - 53 53 - 106 -

Consumable supplies 66 - - 66 29 37 43.9% 196 158

Operating leases 159 - - 159 37 122 23.0% 141 100

Interest and rent on land - - - - - - - 1 1

Interest



-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1

-

-

1

-

-


Total 865 - - 865 805 60 93.1% 964 770

FREE STATE: HUMAN SETTLEMENST VOTE 13

NOTES TO THE APPROPRIATION STATEMENT for the year ended 31 March 2016

137

1. Detail of transfers and subsidies as per Appropriation Act (after Virement):

Detail of these transactions can be viewed in the note on Transfers and subsidies, disclosure

notes and Annexure 1 (A-H) to the Annual Financial Statements.

2. Detail of specifically and exclusively appropriated amounts voted (after Virement):

Detail of these transactions can be viewed in Note 1 (Annual Appropriation) to the Annual

Financial Statements.

3. Detail on payments for financial assets

Detail of these transactions per programme can be viewed in the Note on Payments for

financial assets to the Annual Financial Statements.

4. Explanations of material variances from Amounts Voted (after Virement):

4.1 Per programme Final

Appropriation

Actual

Expenditure

Variance

R’000

Variance as a

% of Final

Appropriation

Programme name

Corporate Services 86 564 80 316 6 248 7.2%

Under-spending is due to vacancies not filled during 2015/16 financial year.

Programme name

Housing Needs, Research &

Planning

14 657 14 311 346 2.4%

Under-spending is due to vacancies not filled during 2015/16 financial year.

Programme name

Housing Development 65 796 67 453 (1 657) -2.5%

Under-spending is due to Salaries, Traveling and Subsistence of Cubans Technicians which were not

budgeted for at the beginning of the 2015/16 financial year.

FREE STATE: HUMAN SETTLEMENST VOTE 13

NOTES TO THE APPROPRIATION STATEMENT for the year ended 31 March 2016

138

4.2 Per economic classification Final

Appropriation

Actual

Expenditure

Variance Variance as a

% of Final

Appropriation

R’000 R’000 R’000 R’000

Current payments

Compensation of employees 142 446 135 074 7 372 5.2%

Goods and services 55 068 54 847 219 0.4%

Interest and rent on land 15 14 1 6.7%


Higher education institutions 276 275 1 0.4%

Non-profit institutions 926 430 913 636 12 794 1.4%

Households


Machinery and equipment 1 874 1 868 6 -0.3%

Payments for financial assets 114 (114)

Writing off of assets less than market value.

4.3 Per conditional grant Final

Appropriation

Actual

Expenditure

Variance Variance as a

% of Final

Appropriation

R’000 R’000 R’000 R’000

Human Settlements Development

Grant

1 072 170 1 059 326 12 844 1.2%

EPWP Incentive Grant 2 348 2 348 0 0%

The Department received R14 886 000 as a Roll-over during the financial year, only R2 088 516 was spent

as a top-up for the subsidy quantum for Military Veteran houses. Request for Roll-over has been submitted

to Provincial Treasury for consideration.


STATEMENT OF FINANCIAL PERFORMANCE for the year ended 31 March 2016

139

Note 2015/16 2014/15

R'000 R'000

REVENUE

Annual appropriation 1 1 241 311 1 228 218

TOTAL REVENUE 1 241 311 1 228 218

EXPENDITURE

Current expenditure

Compensation of employees 3 135 074 107 772

Goods and services 4 54 849 46 463

Interest and rent on land 5 14 29

Total current expenditure 189 937 154 264


Transfers and subsidies 7 1 029 111 1 050 458

Total transfers and subsidies 1 029 111 1 050 458

Expenditure for capital assets

Tangible assets 8 1 870 2 752

Total expenditure for capital assets 1 870 2 752

Payments for financial assets 6 114 78

TOTAL EXPENDITURE 1 221 032 1 207 552

SURPLUS/(DEFICIT) FOR THE YEAR 20 279 20 666

Reconciliation of Net Surplus/(Deficit) for the year

Voted funds 20 279 20 666

Annual appropriation 7 435 5 779

Conditional grants 12 844 14 886

SURPLUS/(DEFICIT) FOR THE YEAR 20 279 20 666


STATEMENT OF FINANCIAL POSITION as at 31 March 2016

140

Note 2015/16 2014/15

R'000 R'000

ASSETS

Current assets 24 624 25 215

Cash and cash equivalents 10 16 656 17 386

Prepayments and advances - 27

Receivables 12 7 968 7 802

Non-current assets 26 86

Receivables 12 26 86

TOTAL ASSETS 24 650 25 301

LIABILITIES

Current liabilities 22 017 22 687

Voted funds to be surrendered to the Revenue Fund 13 20 279 20 666

Departmental revenue and NRF Receipts to be

surrendered to the Revenue Fund

14 140 10

Payables 15 1 598 2 011

Non-current liabilities

Payables - -

TOTAL LIABILITIES 22 017 22 687

NET ASSETS 2 633 2 614

Represented by:

Capitalisation reserve - -

Recoverable revenue 2 633 2 614

Retained funds - -

Revaluation reserves - -

TOTAL 2 633 2 614


CASH FLOW STATEMENT for the year ended 31 March 2016

141

Note 2015/16 2014/15

R'000 R'000

Recoverable revenue

Opening balance 2 614 2 707

Transfers: 19 (93)

Debts recovered (included in departmental receipts) (75) (267)

Debts raised 94 174

Closing balance 2 633 2 614

TOTAL 2 633 2 614

Note 2015/16 2014/15

R'000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts 1 241 766 1 229 374

Annual appropriated funds received 1.1 1 241 311 1 228 218

Departmental revenue received 2 447 1 149

Interest received 2.2 8 7

Net (increase)/decrease in working capital (492) 329

Surrendered to Revenue Fund (20 991) (3 552)

Current payments (189 923) (154 235)

Interest paid

5 (14) (29)

Payments for financial assets (114) (78)

Transfers and subsidies paid (1 029 111) (1 050 458)

Net cash flow available from operating activities 16 1 121 21 351

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for capital assets 8 (1 870) (2 752)

Net cash flows from investing activities (1 870) (2 752)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase/(decrease) in net assets 19 (93)

Net cash flows from financing activities 19 (93)

Net increase/(decrease) in cash and cash equivalents (730) 18 506

Cash and cash equivalents at beginning of period 17 386 (1 120)

Cash and cash equivalents at end of period 17 16 656 17 386


ACCOUNTING POLICIES for the year ended 31 March 2016

142

ACCOUNTING POLICIES

Summary of significant accounting policies

The financial statements have been prepared in accordance with the following policies, which have been applied consistently in all material aspects, unless otherwise indicated. Management has concluded that the financial statements present fairly the department‟s primary and secondary information.

The historical cost convention has been used, except where otherwise indicated. Management has used assessments and estimates in preparing the annual financial statements. These are based on the best information available at the time of preparation.

Where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of

the financial statements and to comply with the statutory requirements of the Public Finance Management

Act (PFMA), Act 1 of 1999 (as amended by Act 29 of 1999), and the Treasury Regulations issued in terms of

the PFMA and the annual Division of Revenue Act.

1. Basis of preparation

The financial statements have been prepared in accordance with the Modified Cash Standard.

2. Going concern

The financial statements have been prepared on a going concern basis.

3. Presentation currency

Amounts have been presented in the currency of the South African Rand (R) which is also the

functional currency of the Department.

4. Rounding

Unless otherwise stated financial figures have been rounded to the nearest one thousand Rand

(R‟000).

5. Comparative information

5.1 Prior period comparative information

Prior period comparative information has been presented in the current year‟s financial statements.

Where necessary figures included in the prior period financial statements have been reclassified to

ensure that the format in which the information is presented is consistent with the format of the

current year‟s financial statements.

5.2 Current year comparison with budget

A comparison between the approved, final budget and actual amounts for each programme and

economic classification is included in the appropriation statement.

6. Revenue

6.1 Appropriated funds

Appropriated funds comprise of Departmental allocations as well as direct charges against the



143

revenue fund (i.e. statutory appropriation).

Appropriated funds are recognised in the statement of financial performance on the date the

appropriation becomes effective. Adjustments made in terms of the adjustments budget process are

recognised in the statement of financial performance on the date the adjustments become effective.

The net amount of any appropriated funds due to / from the relevant revenue fund at the reporting

date is recognised as a payable / receivable in the statement of financial position.

6.2 Departmental revenue

Departmental revenue is recognised in the statement of financial performance when received and is

subsequently paid into the relevant revenue fund, unless stated otherwise.

Any amount owing to the relevant revenue fund at the reporting date is recognised as a payable in

the statement of financial position.

6.3 Accrued Departmental Revenue

Accruals in respect of departmental revenue (excluding tax revenue) are recorded in the notes to the

financial statements when:

it is probable that the economic benefits or service potential associated with the transaction will flow to the department; and

the amount of revenue can be measured reliably.

The accrued revenue is measured at the fair value of the consideration receivable.

Accrued tax revenue (and related interest and / penalties) is measured at amounts receivable from

collecting agents.

7. Expenditure

7.1 Compensation of employees

7.1.1 Salaries and wages

Salaries and wages are recognised in the statement of financial performance on the date of payment.

7.1.2 Social contributions

Social contributions made by the department in respect of current employees are recognised in the

statement of financial performance on the date of payment.

Social contributions made by the department in respect of ex-employees are classified as transfers to

households in the statement of financial performance on the date of payment.

7.2 Other expenditure

Other expenditure (such as goods and services, transfers and subsidies and payments for capital

assets) is recognised in the statement of financial performance on the date of payment. The

expense is classified as a capital expense if the total consideration paid is more than the

capitalisation threshold and the expense meets the requirements of capital assets as per the

reporting standards.

The Department also transfers funds to implementing agencies to assist the Department to fulfil its

mandate. Due to this there is an element of unspent funds relating to transfers and subsidies that is

disclosed as such.



144

7.3 Accrued expenditure payable

Accrued expenditure payable is recorded in the notes to the financial statements when the goods are

received or, in the case of services, when they are rendered to the department.

Accrued expenditure payable is measured at cost.

7.4 Leases

7.4.1 Operating leases

Operating lease payments made during the reporting period are recognised as current expenditure in

the statement of financial performance on the date of payment.

The operating lease commitments are recorded in the notes to the financial statements and are been

reviewed on a quarterly basis when the Department have to submit their Interim Financial

Statements.

7.4.2 Finance leases

Finance lease payments made during the reporting period are recognised as capital expenditure in

the statement of financial performance on the date of payment.

The finance lease commitments are recorded in the notes to the financial statements and are not

apportioned between the capital and interest portions.

Finance lease assets acquired at the end of the lease term are recorded and measured at the lower

of:

cost, being the fair value of the asset; or

the sum of the minimum lease payments made, including any payments made to acquire

ownership at the end of the lease term, excluding interest.

8. Cash and cash equivalents

Cash and cash equivalents are stated at cost in the statement of financial position.

Bank overdrafts are shown separately on the face of the statement of financial position.

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand,

deposits held, other short-term highly liquid investments and bank overdrafts.

9. Prepayments and advances

Prepayments and advances are recognised in the statement of financial position when the

department receives or disburses the cash.

Prepayments and advances are initially and subsequently measured at cost.

10. Loans and receivables

Loans and receivables are recognised in the statement of financial position at cost plus accrued

interest, where interest is charged, less amounts already settled or written-off. Write-offs are made

according to the department‟s write-off policy.



145

11. Investments

Investments are recognised in the statement of financial position at cost.

12. Financial assets

12.1 Financial assets (not covered elsewhere)

A financial asset is recognised initially at its cost plus transaction costs that are directly attributable to

the acquisition or issue of the financial.

At the reporting date, a department shall measure its financial assets at cost, less amounts already

settled or written-off, except for recognised loans and receivables, which are measured at cost plus

accrued interest, where interest is charged, less amounts already settled or written-off.

12.2 Impairment of financial assets

Where there is an indication of impairment of a financial asset, an estimation of the reduction in the

recorded carrying value, to reflect the best estimate of the amount of the future economic benefits

expected to be received from that asset, is recorded in the notes to the financial statements.

13. Payables

Loans and payables are recognised in the statement of financial position at cost.

14. Capital Assets

14.1 Immovable capital assets

Immovable capital assets are initially recorded in the notes to the financial statements at cost.

Immovable capital assets acquired through a non-exchange transaction is measured at fair value as

at the date of acquisition.

Where the cost of immovable capital assets cannot be determined accurately, the immovable capital

assets are measured at R1 unless the fair value of the asset has been reliably estimated, in which

case the fair value is used.

All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at

R1.

Immovable capital assets are subsequently carried at cost and are not subject to depreciation or

impairment.

Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the

capital project unless the immovable asset is recorded by another department in which case the

completed project costs are transferred to that department.

14.2 Movable capital assets

Movable capital assets are initially recorded in the notes to the financial statements at cost. Movable

capital assets acquired through a non-exchange transaction is measured at fair value as at the date

of acquisition.

Where the cost of movable capital assets cannot be determined accurately, the movable capital

assets are measured at fair value and where fair value cannot be determined; the movable assets



146

are measured at R1.


R1.

Movable capital assets are subsequently carried at cost and are not subject to depreciation or

impairment.


capital project unless the movable asset is recorded by another department/entity in which case the


14.3 Intangible assets

Intangible assets are initially recorded in the notes to the financial statements at cost. Intangible

assets acquired through a non-exchange transaction are measured at fair value as at the date of

acquisition.

Internally generated intangible assets are recorded in the notes to the financial statements when the

department commences the development phase of the project.

Where the cost of intangible assets cannot be determined accurately, the intangible capital assets

are measured at fair value and where fair value cannot be determined; the intangible assets are

measured at R1.


R1. Intangible assets are subsequently carried at cost and are not subject to depreciation or

impairment.


capital project unless the intangible asset is recorded by another department/entity in which case the


15. Provisions and Contingents

15.1 Provisions

Provisions are recorded in the notes to the financial statements when there is a present legal or

constructive obligation to forfeit economic benefits as a result of events in the past and it is probable

that an outflow of resources embodying economic benefits or service potential will be required to

settle the obligation and a reliable estimate of the obligation can be made. The provision is measured

as the best estimate of the funds required to settle the present obligation at the reporting date.

15.2 Contingent liabilities

Contingent liabilities are recorded in the notes to the financial statements when there is a possible

obligation that arises from past events, and whose existence will be confirmed only by the occurrence

or non-occurrence of one or more uncertain future events not within the control of the department or

when there is a present obligation that is not recognised because it is not probable that an outflow of

resources will be required to settle the obligation or the amount of the obligation cannot be measured

reliably.

15.3 Contingent assets

Contingent assets are recorded in the notes to the financial statements when a possible asset arises

from past events, and whose existence will be confirmed by the occurrence or non-occurrence of one

or more uncertain future events not within the control of the department.



147

15.4 Commitments

Commitments are recorded at cost in the notes to the financial statements when there is a

contractual arrangement or an approval by management in a manner that raises a valid expectation

that the department will discharge its responsibilities thereby incurring future expenditure that will

result in the outflow of cash.

16. Unauthorised expenditure

Unauthorised expenditure is recognised in the statement of financial position until such time as the

expenditure is either:

approved by Parliament or the Provincial Legislature with funding and the related funds are

received; or

approved by Parliament or the Provincial Legislature without funding and is written off against the

appropriation in the statement of financial performance; or

transferred to receivables for recovery.

Unauthorised expenditure is measured at the amount of the confirmed unauthorised expenditure.

17. Fruitless and wasteful expenditure

Fruitless and wasteful expenditure is recorded in the notes to the financial statements when

confirmed. The amount recorded is equal to the total value of the fruitless and or wasteful

expenditure incurred.

Fruitless and wasteful expenditure is removed from the notes to the financial statements when it is

resolved or transferred to receivables for recovery.

Fruitless and wasteful expenditure receivables are measured at the amount that is expected to be

recoverable and are de-recognised when settled or subsequently written-off as irrecoverable.

18. Irregular expenditure

Irregular expenditure is recorded in the notes to the financial statements when confirmed. The

amount recorded is equal to the value of the irregular expenditure incurred unless it is impracticable

to determine, in which case reasons therefor are provided in the note.

Irregular expenditure is removed from the note when it is either condoned by the relevant authority,

transferred to receivables for recovery or not condoned and is not recoverable.

Irregular expenditure receivables are measured at the amount that is expected to be recoverable and

are de-recognised when settled or subsequently written-off as irrecoverable.

19. Changes in accounting policies, accounting estimates and errors

Changes in accounting policies that are affected by management have been applied retrospectively

in accordance with MCS requirements, except to the extent that it is impracticable to determine the

period-specific effects or the cumulative effect of the change in policy. In such instances the

department shall restate the opening balances of assets, liabilities and net assets for the earliest

period for which retrospective restatement is practicable.

Changes in accounting estimates are applied prospectively in accordance with MCS requirements.

Correction of errors is applied retrospectively in the period in which the error has occurred in

accordance with MCS requirements, except to the extent that it is impracticable to determine the

period-specific effects or the cumulative effect of the error. In such cases the department shall

restate the opening balances of assets, liabilities and net assets for the earliest period for which



148

retrospective restatement is practicable.

20. Events after the reporting date

Events after the reporting date that are classified as adjusting events have been accounted for in the

financial statements. The events after the reporting date that are classified as non-adjusting events

after the reporting date have been disclosed in the notes to the financial statements.

21. Principal-Agent arrangements

The department is party to a principal-agent arrangement for the following:

Agent Responsibility

National Housing Fund Corporation (NHFC) Agent administering and implementing the FLISP

Programme.

Housing Development Agency (HDA) Procurement of Land

Free State Development Corporation (FDC) Account administrators for Thembalihle extension 4

project.

Department of Public Works Account administrators for the Caledon Park 71

project.

In terms of the arrangement the department is the principle and is responsible for the significant

Terms & Conditions of the transactions and the Department is also exposed to the variability of the

transaction. All related revenues, expenditures, assets and liabilities have been recognised or

recorded in terms of the relevant policies listed herein. Additional disclosures have been provided in

the notes to the financial statements where appropriate.

22. Departures from the MCS requirements

Insert information on the following: that management has concluded that the financial statements

present fairly the department‟s primary and secondary information; that the department complied with

the Standard except that it has departed from a particular requirement to achieve fair presentation;

and the requirement from which the department has departed, the nature of the departure and the

reason for departure.

23. Capitalisation reserve

The capitalisation reserve comprises of financial assets and/or liabilities originating in a prior

reporting period but which are recognised in the statement of financial position for the first time in the

current reporting period. Amounts are recognised in the capitalisation reserves when identified in the

current period and are transferred to the National/Provincial Revenue Fund when the underlying

asset is disposed and the related funds are received.

24. Recoverable revenue

Amounts are recognised as recoverable revenue when a payment made in a previous financial year

becomes recoverable from a debtor in the current financial year. Amounts are either transferred to

the National/Provincial Revenue Fund when recovered or are transferred to the statement of financial

performance when written-off.



149

25. Related party transactions

A related party transaction is a transfer of resources, services or obligations between the reporting

entity and a related party. Related party transactions are recorded in the notes to the financial

statements when the transaction is not at arm‟s length. The Housing Fund is a related party to the

Department of Human Settlements and this related party transaction will no longer be applicable if

and when the Housing Fund finally dissolves once all transfers took place into the beneficiaries‟

name.

26 Key management personnel

Key management personnel are those persons having the authority and responsibility for planning,

directing and controlling the activities of the Department. All officials from level 14 and above are

deemed to be key management personnel. Employees on level 13 or below acting for key

management of level 14 and above during the financial year are also included in the note.

Remuneration paid to key management personnel includes short-term employee benefits, post-

employee benefits, other long term employee benefits and termination benefits. Remuneration paid

to close family members of key management personnel is also disclosed in the note.


NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2016

150

1 Annual Appropriation

1.1 Annual Appropriation

All funds appropriated to the department for the 2015-2016 financial year were transferred and received by

the department as at 31 March 2016.

1.2 Conditional grants

Note

2015/16 2014/15

R’000 R’000

Total grants received 32 1 074 518 1 078 642

Provincial grants included in Total Grants received - -

2 Departmental revenue

Note 2015/16 2014/15

R’000 R’000

Sales of goods and services other than capital assets 2.1 130 425

Interest, dividends and rent on land 2.2 8 7

Transactions in financial assets and liabilities 2.3 317 724

Total revenue collected 455 1 156

Less: Own revenue included in appropriation 14 455 1 156

Departmental revenue collected - -

2.1 Sales of goods and services other than capital assets

Note 2015/16 2014/15

R’000 R’000

Sales of goods and services produced by the department 2 130 425

Administrative fees 130 425

Total 130 425

2015/16 2014/15

Final

Approp

riation

Actual

Funds

Received

Funds not

requested

/not

received

Final

Appropriation

Appropriat

ion

received

Programmes: R’000 R’000 R’000 R’000 R’000

Administration 86 564 86 564 - 80 485 80 485

Housing, Needs Research and

Planning

18 232 18 232 - 18 553 18 553

Housing Development 1 135 650 1 135 650 - 1 128 216 1 128 216

Housing Asset Management,

Property Management

865 865 - 964 964

Total 1 241 311 1 241 311 - 1 228 218 1 228 218



151

2.2 Interest, dividends and rent on land

Note 2015/16 2014/15

2 R’000 R’000

Interest 8 7

Total 8 7

2.3 Transactions in financial assets and liabilities

Note 2015/16 2014/15

2 R’000 R’000

Other Receipts including Recoverable Revenue 317 724

Total 317 724

2.4 Cash received not recognised (not included in the main note)

2015/16

Name of entity Amount

received

Amount

paid to the

revenue

fund

Balance

R’000 R’000 R’000

Ernst & Young 50 50 -

Total 50 50 -

2014/15

Name of entity Amount

received

Amount

paid to the

revenue

fund

Balance

R’000 R’000 R’000

E‟tsho 150 150 -

Ernst & Young 50 50 -

Mafuri Infrastructure Africa 115 115 -

Mafuri Turnkey Africa 150 150 -

Total 465 465 -

Donation was received for Govan Mbeki Awards.

3 Compensation of employees

3.1 Salaries and Wages

2015/16 2014/15

R’000 R’000

Basic salary 93 621 74 001

Performance award 1 934 2 994

Service Based 97 198

Compensative/circumstantial 1 265 1 205

Other non-pensionable allowances 23 794 16 716

Total 120 711 95 114



152

3.2 Social contributions

2015/16 2014/15

R’000 R’000

Employer contributions

Pension 9 543 8 695

Medical 4 798 3 944

Bargaining council 22 19

Total 14 363 12 658

Total compensation of employees 135 074 107 772

Average number of employees 322 292

4 Goods and services

Note 2015/16 2014/15

R’000 R’000

Administrative fees 610 423

Advertising 131 244

Minor assets 4.1 42 250

Bursaries (employees) 238 43

Catering 773 733

Communication 974 1 084

Computer services 4.2 3 444 1 933

Consultants: Business and advisory services 9 234 10 002

Legal services 4 092 2 767

Contractors 2 841 1 725

Agency and support / outsourced services 44 -

Entertainment 8 11

Audit cost – external 4.3 5 996 7 009

Fleet services 2 512 2 688

Consumables 4.4 909 1 069

Operating leases 3 282 3 869

Property payments 4.5 553 399

Travel and subsistence 4.6 17 330 9 771

Venues and facilities 274 679

Training and development 619 428

Other operating expenditure 4.7 943 1 336

Total 54 849 46 463

The increase in the amount for Consultants during the 2015/16 financial year is as a result of a Position

Paper issued by National Treasury on Goods and Services versus Transfers and Subsidies. Guidance was

provided on Goods and Services definition. The definition stipulates that “Goods and Services, reflects

payments for goods and services that are used as inputs in the production process. Expenses on items of

goods and services includes, purchasing, marketing, accounting and data processing. The expenditure was

previously classified under Transfers & Subsidies. The comparative has also been restated in this regard.



153

4.1 Minor assets

Note 2015/16 2014/15

4 R’000 R’000

Tangible assets

Machinery and equipment 42 250

Total 42 250

4.2 Computer services

Note 2015/16 2014/15

4 R’000 R’000

SITA computer services 3 444 1 933

Total 3 444 1 933

4.3 Audit cost – External

Note 2015/16 2014/15

4 R’000 R’000

Regularity audits 5 746 5 847

Investigations 250 1 162

Total 5 996 7 009

The amount of R250‟ was made to Open Waters with regard to Forensic investigations.

4.4 Consumables

Note 2015/16 2014/15

4 R’000 R’000

Consumable supplies 134 106

Uniform and clothing 7 2

Household supplies 47 45

Building material and supplies 79 48

Communication accessories - 3

Other consumables 1 8

Stationery, printing and office supplies 775 963

Total 909 1 069

4.5 Property payments

Note 2015/16 2014/15

4 R’000 R’000

Municipal services 41 120

Other 512 279

Total 553 399



154

4.6 Travel and subsistence

Note 2015/16 2014/15

4 R’000 R’000

Local 14 549 8 832

Foreign 2 781 939

Total 17 330 9 771

4.7 Other operating expenditure

Note 2015/16 2014/15

4 R’000 R’000

Resettlement costs 87 75

Other 856 1 261

Total 943 1 336

5 Interest and rent on land

2015/16 2014/15

R’000 R’000

Interest paid 14 29

Total 14 29

6 Payments for financial assets

Note 2015/16 2014/15

R’000 R’000

Other material losses written off 6.1 114 -

Debts written off 6.2 - 78

Total 114 78

6.1 Other material losses written off

Note 2015/16 2014/15

6 R’000 R’000

Nature of losses

Written-off cases as indicated by the Disposal Committee 114 -

Total 114 -

6.2 Debts written off

Note 2015/16 2014/15

6 R’000 R’000

Nature of debts written off

Ex-Employee Debt - 72

Supplier Debt - 6

Total debt written off - 78

7 Transfers and subsidies

2015/16 2014/15

R’000 R’000

Note

Higher education institutions Annex 1A 275 352

Households Annex 1B 1 028 836 1 050 106

Total 1 029 111 1 050 458



155

Unspent funds transferred to the above beneficiaries 21 836 130 246

Prepayments were made by the department and expenses under transfers and subsidies as they were

budgeted for in the financial year.

This expenditure relates to longer term projects where the department has entered into agreement to

secure the funds for certain projects. This would include longer term negotiations with land owners and

construction of commercial residential units

The comparative amount for unspent funds transferred has been restated in the current financial year.

2015/16

Unspent amount included in transfers to households is R14 153 996 which was transferred to the

Housing Development Agency for procurement of land.

Unspent amount included in transfers to households is R171 720 which was transferred to the Utshani

Fund for the implementation of a social housing project.

Unspent amount included in transfers to households is R178 552 which was transferred to Maluti

Batlokoa Project Trust Fund for the implementation of a social housing project.

Unspent amount included in transfers to households is R4 042 861 which was transferred to Coreland

Property Development for the implementation of a social housing project.

Unspent amount included in transfers to households is R3 221 600 which was transferred to Mafuri

Turnkey Accelerated Construction for the implementation of a social housing project.

Unspent amount included in transfers to households is R67 610 which was transferred to Maphodi

Springfontein for the implementation of a social housing project.

2014/2015

Unspent amount included in transfers to households is R21 634 104 which were transferred to the

Housing Development Agency for the procurement of land.

Unspent amount included in transfers to households is R12 471 512 which was transferred to the Free

State Development Corporation for the procurement of land.

Unspent amount included in transfers to households is R 4 581 540 which was transferred to the

Mangaung Support of Housing Fund for the procurement of land.

Unspent amount included in transfers to households is R34 151 308 which was transferred to Stefanutti

Stocks for the implementation of a social housing project.

Unspent amount included in transfers to households is R143 957 which was transferred to Utshani Fund

for the implementation of a social housing project.

Unspent amount included in transfers to households is R27 635 763 which was transferred to Rossouw

and Conradie/ Kentha Developers for the implementation of a social housing project.

Unspent amount included in transfers to households is R14 346 895 which was transferred to Coreland

Property Development Company for the implementation of a social housing project.

Unspent amount included in transfers to households is R181 507 which was transferred to Maluti

Batlokoa Project Trust Fund for the implementation of a social housing project.



156

Unspent amount included in transfers to households is R10 031 865 which was transferred to Mafuri

Turnkey Accelerated Construction for the implementation of a social housing project.

Unspent amount included in transfers to households is R5 000 000 which was transferred to Eskom for

the implementation for an infrastructure project.

Unspent amount included in transfers to households is R67 609.75 which was transferred for Maphodi -

Springfontein for the implementation of a social housing project.

8 Expenditure for capital assets

Note 2015/16 2014/15

R’000 R’000

Tangible assets 1 870 2 752

Machinery and equipment 28.1 1 870 2 752

Total 1 870 2 752

8.1 Analysis of funds utilised to acquire capital assets – 2015/16

Voted funds Aid

assistance

Total

R’000 R’000 R’000

Tangible assets 1 870 - 1 870

Machinery and equipment 1 870 - 1 870

Total 1 870 - 1 870

8.2 Analysis of funds utilised to acquire capital assets – 2014/15

Voted funds Aid

assistance

Total

R’000 R’000 R’000

Tangible assets 2 752 - 2 752

Machinery and equipment 2 752 - 2 752

Total 2 752 - 2 752

8.3 Finance lease expenditure included in Expenditure for capital assets

2015/16 2014/15

R’000 R’000

Tangible assets

Machinery and equipment 1 231 804

Total 1 231 804



157

9 Unauthorised expenditure

9.1 Reconciliation of unauthorised expenditure

2015/16 2014/15

R’000 R’000

Opening balance - 29

Less Amounts approved by Legislature with funding - (29)

Closing balance - -

10 Cash and cash equivalents

2015/16 2014/15

R’000 R’000

Consolidated Paymaster General Account 16 636 17 366

Cash on hand 20 20

Total 16 656 17 386

There are no significant cash and cash equivalent balances held by the Department that are not

available for use.

There are no undrawn borrowing facilities available for future operating activities or to settle capital

commitments.

11 Prepayments and advances

2015/16 2014/15

R’000 R’000

Travel and subsistence - 27

Total - 27

12 Receivables

2015/16 2014/15

Current Non-

current

Total Current Non-

current

Total

Note

R’000 R’000 R’000 R’000 R’000 R’000

Claims recoverable 12.1

Annex 3

583 - 583 614 - 614

Staff debt 12.2 366 26 392 168 86 254

Other debtors 12.3 7 019 - 7 019 7 020 - 7 020

Total 7 968 26 7 994 7 802 86 7 888



158

12.1 Claims recoverable

Note 2015/16 2014/15

12 and Annex 3 R’000 R’000

National departments - 14

Provincial departments - 26

Public entities 28 19

Local governments 555 555

Total 583 614

Prior year figures were correctly reclassified due to the fact that all amounts appeared under the Item

Claims Recoverable Free State. Thus the amount of R19 000 for South Africa Revenue Services

(SARS) was reclassified as Claims Recoverable Public Entities and the R59 000 for Moqhaka and

Matjhabeng was reclassified as Claims Local Government. The R28 000 for the 2015/16 financial is for

SARS due to the fact that 2 Cuban Technicians were absorbed by the Dihlabeng Municipality during

February 2016.

12.2 Staff debt

Note 2015/16 2014/15

12 R’000 R’000

Salary Over-payment 31 20

Communication Debt 324 185

Tax Debt - 1

Breach of Contract 13 17

Leave Without Pay 24 31

Total 392 254

12.3 Other debtors

Note 2015/16 2014/15

12 R’000 R’000

Supplier Debt 7 019 7 020

Total 7 019 7 020

12.4 Impairment of receivables

2015/16 2014/15

R’000 R’000

Estimate of impairment of receivables 7 238 3 227

Total 7 238 3 227

13 Voted funds to be surrendered to the Revenue Fund

2015/16 2014/15

R’000 R’000


Prior period error - -

As restated 20 666 2 406

Transfer from statement of financial performance (as restated) 20 279 20 666

Paid during the year (20 666) (2 406)




159

14 Departmental revenue and NRF Receipts to be surrendered to the

Revenue Fund

2015/16 2014/15

R’000 R’000

Opening balance 10 -

As restated - -

Own revenue included in appropriation 455 1 156

Paid during the year (325) (1 146)

Closing balance 140 10

15 Payables – current

Note 2015/16 2014/15

R’000 R’000

Clearing accounts 15.1 - 415

Other payables 15.2 1 598 1 596

Total 1 598 2 011

15.1 Clearing accounts

Note 2015/16 2014/15

15 R’000 R’000

Description

Salary Income Tax - 411

Salary Pension Fund - 4

Total - 415

15.2 Other payables

Note 2015/16 2014/15

15 R’000 R’000

Description

Housing Fund 1 598 1 596

Total 1 598 1 596

16 Net cash flow available from operating activities

2015/16 2014/15

R’000 R’000

Net surplus/(deficit) as per Statement of Financial Performance 20 279 20 666

Add back non cash/cash movements not deemed operating

activities

(19 158) 685

(Increase)/decrease in receivables – current (106) (94)

(Increase)/decrease in prepayments and advances 27 211

(Increase)/decrease in other current assets - 29

Increase/(decrease) in payables – current (413) 183

Expenditure on capital assets 1 870 2 752

Surrenders to Revenue Fund (20 991) (3 552)

Own revenue included in appropriation 455 1 156

Net cash flow generated by operating activities 1 121 21 351



160

17 Reconciliation of cash and cash equivalents for cash flow purposes

2015/16 2014/15

R’000 R’000

Consolidated Paymaster General account 16 636 17 366

Cash on hand 20 20

Total 16 656 17 386

18 Contingent liabilities and contingent assets

18.1 Contingent liabilities

Note 2015/16 2014/15

R’000 R’000

Liable to Nature

Claims against the department Annex 2 38 511 98 495

Total 38 511 98 495

The amount for contingent liabilities is dependent on the outcome of the court cases occurring in the future,

which will only be finalised in the future.

The possibility of reimbursement will only be certain upon completion of the court cases.



161

19 Commitments

2015/16 2014/15

R’000 R’000

Current expenditure

Approved and contracted 7 417 1 935

7 417 1 935

Capital expenditure

Approved and contracted - 46

Approved but not yet contracted - -

- 46

Total Commitments 7 417 1 981

Commitments to the value of R810‟ are in respect of a period longer than a year.

20 Accruals and payables not recognised

20.1 Accruals

2015/16 2014/15

R’000 R’000

Listed by economic classification

30 Days 30+ Days Total Total

Goods and services 2 702 4 969 7 671 6 648


Capital Assets

Other

-

-

-

173 136

-

-

173 136

-

-

936 923

33

188

Total 2 702 178 105 180 807 943 792

2015/16

2014/15

Listed by programme level R’000 R’000

Administration 7 671 6 377

Housing Needs, Research & Planning - 251

Housing Development

Housing asset management & property management

173 136

-

937 144

20

Total 180 807 943 792

Prior year accruals were restated is due to the qualification paragraph in the Audit Report for the

2014/15 financial year.

Furthermore, note should be taken that there was a change in the accounting standard in terms of the

definition for accruals.



162

20.2 Payables not recognised

2015/16 2014/15

R’000 R’000

Listed by economic classification

30 Days 30+ Days Total Total

Goods and services 5 405 6 108 11 513 -

Transfers and subsidies 90 534 1 209 317 1 299 851 -

Capital assets - - - -

Other - - - -

Total 96 939 1 215 425 1 311 364 -

2015/16 2014/15

R’000 R’000

Listed by programme level

Programme 1: Administration 10 923 -

Programme 2: Housing Needs, Research & Planning 78 -

Programme 3: Housing Development 1 300 363 -

Programme 4: Housing Asset Management & Property

Management

- -

Total 1 311 364 -

2015/16 2014/15

Included in the above totals are the following: R’000 R’000

Confirmed balances with other departments Annex 4 2 489 1 321

Confirmed balances with other government entities Annex 4 1 527 562

Total 4 016 1 883

21 Employee benefits

2015/16 2014/15

R’000 R’000

Leave entitlement 5 223 4 830

Service bonus (Thirteenth cheque) 2 785 2 675

Performance awards 3 814 3 909

Capped leave commitments 2 110 2 223

Other 183 53

Total 14 115 13 690

At this stage the department is not able to reliably measure the long term portion of the long service

awards. It must be noted that the balance for leave entitlement includes a negative amount of R163‟

(R140‟ for 2014/15).



163

22 Lease commitments

22.1 Operating leases expenditure

2015/16

Land

Buildings

and other

fixed

structures

Machinery

and

equipment

Total

Not later than 1 year - - 3 238 3 238

Later than 1 year and not later than 5 years - - 5 471 5 471

Total lease commitments - - 8 709 8 709

2014/15

Land

Buildings

and other

fixed

structures

Machinery

and

equipment

Total

Not later than 1 year - - 2 099 2 099

Later than 1 year and not later than 5 years - - 4 126 4 126

Total lease commitments - - 6 225 6 225

The Department has entered into a Service Level Agreement with Fleet Management for

the provision of vehicles. This is an operating lease.

The Department has 8 active photocopiers on a month-to-month basis.

The assets are sub-leased by the Department.

There were no sale and lease back arrangements entered into by the Department during

the 2015/16 financial year.

22.2 Finance leases expenditure

2015/16

Land

Buildings

and other

fixed

structures

Machinery

and

equipment

Total

Not later than 1 year - - 600 600

Later than 1 year and not later than 5 years - - 285 285

- - 885 885

2014/15

Land

Buildings

and other

fixed

structures

Machinery

and

equipment

Total

Not later than 1 year - - 718 718

Later than 1 year and not later than 5 years - - 232 232

Total lease commitments - - 950 950



164

23 Accrued Departmental revenue

2015/16 2014/15

R’000 R’000

Transfers received (incl. conditional grants to be repaid by

provincial Departments)

558 708 558 866

Total 558 708 558 866

The amount above relates to ongoing investigations of advances to material suppliers. However, due to the

nature of the ongoing investigations the department is in the process of determining the full extent thereof.

The comparative information was restated. Refer to note 32 for more information.

23.1 Analysis of accrued departmental revenue

2015/16 2014/15

R’000 R’000

Opening balance

Less: Amounts received

558 866

158

558 866

-

Add: Amounts recognised - -


23.2 Impairment of accrued departmental revenue

2015/16 2014/15

R’000 R’000

88 175 88 175

88 175 88 175

24 Irregular expenditure 24.1 Reconciliation of irregular expenditure

Note 2015/16 2014/15

R’000 R’000

Opening balance 2 930 866 3 596 445

Prior period error - (11 077)

As restated 2 930 866 3 585 368

Add: Irregular expenditure – relating to current year 964 561 980 965

Less: Amounts not condoned and not recoverable (2 781 534) (1 635 467)

Closing balance 1 113 893 2 930 866

Analysis of awaiting condonation per age

classification

Current year 3 581 980 965

Prior years 1 110 312 1 949 901

Total 1 113 893 2 930 866

Included in the irregular expenditure amount is the costs incurred for demolition of certain

milestones for certain sites. The department will further investigate this amount and

determine if this can be removed based on the give guidelines



165

24.2 Details of irregular expenditure – current year

Incident Disciplinary steps taken/criminal proceedings 2015/16

R’000

Conditional Grant

Supply Chain Management

None, financial misconduct is not suspected. Value for

money was obtained

None, financial misconduct is not suspected. Value for

money was obtained

961 105

3 123

Human Resources None, financial misconduct is not suspected. Value for

money was obtained

333

Total 964 561

24.3 Details of irregular expenditure not recoverable (not condoned)

Incident 2015/16

R’000

Write-off by Accounting Officer of Conditional Grant 2013/14 850 015



Total 2 781 534

24.4 Prior period error

Note 33 2014/15

R’000

Incorrect classification of SCM and conditional grant

Relating to years (affecting the opening balance) (11 077)

Incorrect classification relating to 2011/12 (11 077)

Relating to 2014/15 2 473

Decrease in amount written-off 2 473

Total prior period errors (8 604)

25 Fruitless and wasteful expenditure

25.1 Reconciliation of fruitless and wasteful expenditure

2015/16 2014/15

R’000 R’000


Prior period error - (49)

As restated 2 367 2 177

Fruitless and wasteful expenditure – relating to current year 1 045 190

Less: Amounts resolved (2 367) -




166

25.2 Analysis of awaiting resolution per economic classification

2015/16 2014/15

R’000 R’000

Current 1 045 631

Transfers and subsidies Capital - 1 736

Total 1 045 2 367

25.3 Analysis of Current year’s fruitless and wasteful expenditure

Incident Disciplinary steps taken/criminal

proceedings

2015/16

R’000

Interest on overdue accounts None, value for money was received 14

Payment made in defaulting where

accommodation was booked and

nobody stayed

None, uneconomical to recover 3

Overpayment on VAT and

Management Fees

None, management in the process of

investigating

1 028

Total 1 045

The comparative figure for analysis of awaiting resolution per economic classification was restated with

an amount of R49‟

This relates to a receivable that was created for a supplier that claimed VAT.


Note 33 2014/15

R’000

Nature of prior period error

Relating to 2013/14 [affecting the opening balance] (49)

Reflected as receivable in prior years (49)

Total prior period errors (49)

26 Related party transactions

Loans to/from related parties 2015/16 2014/15

R’000 R’000

Non-interest bearing loans to/(from) 12 996 12 168

Total 12 996 12 168

The Housing Fund falls under the administration of the Department of Human Settlements and shares

the same Accounting Officer. Once the fund ceases to operate, the bank balance will be surrendered to

the Department.

The Department of Cooperative Governance and Traditional Affairs rendered a shared service on the

following directorates within Programme 1 to the Department of Human Settlement: Anti-corruption and

Security, Information Technology and Communication services. Due to the complexity of the shared

services between the departments, it is impracticable to include an exact amount of the shared service



167

and therefore no value for this service can be attributed to these transactions. The department have

also come to an understanding that no value for these services will be exchanged. These are

transactions that are at non-arm‟s length between the departments.

The Department of Cooperative Governance & Traditional Affairs also paid certain invoices on behalf of

the Department of Human Settlements with regard to SITA services and the MEC‟s outreach programme

that is recorded in the Inter-governmental payables. These are transactions that are no more or not less

favourable than those which it is reasonable to expect.

27 Key management personnel

No. of

Individuals

2015/16 2014/15

R’000 R’000

Level 15 to 16 2 3 368 3 250

Level 14 (incl. CFO if at a lower level) 10 5 908 5 321

Family members of key management personnel 1 264 253

Total 9 540 8 824

28 Movable Tangible Capital Assets

MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR

ENDED 31 MARCH 2016

Opening

balance

Value

adjustments

Additions Disposals Closing

Balance

R’000 R’000 R’000 R’000 R’000

MACHINERY AND

EQUIPMENT

9 567 3 540 474 9 636

Computer equipment 4 573 - 296 339 4 530

Furniture and office equipment 4 233 3 244 124 4 356

Other machinery and equipment 761 - - 11 750

TOTAL MOVABLE TANGIBLE

CAPITAL ASSETS 9 567 3 540 474 9 636

Number Value

R’000

Included in the above total of the movable tangible capital assets

per the asset register are assets that are under investigation:


Included in the asset register are 13 major assets which are under investigation by the Department.

The assets identified as under investigation relate to assets not verified in the financial year. As this

process was completed at year-end, the Department deemed it necessary to perform additional

verifications in the next financial year to identify the location of these assets. Should the assets still not

be located, the Department would determine the last users of the assets and enquire as to the location

of these assets. Based on this the Department will determine if the assets can be located of if the

assets should be written-off of if loss control procedures will be initiated and reconvenes performed.



168

28.1 Additions

ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR

ENDED 31 MARCH 2016

Cash Non-cash (Finance

lease

payments)

(Paid

current

year,

received

prior year)

Total

R’000 R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT 1 870 - (1 231) (99) 540

Computer equipment 335 - (39) 296

Furniture and office equipment 304 - (60) 244

Other machinery and equipment 1 231 - (1 231) - -

TOTAL ADDITIONS TO

MOVABLE TANGIBLE CAPITAL

ASSETS 1 870 - (1 231) (99) 540

28.2 Disposals

DISPOSALS OF MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE

YEAR ENDED 31 MARCH 2016

Sold for

cash

Non-cash

disposal

Total disposals Cash

Received

Actual

R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT - 474 474 -

Computer equipment - 339 339 -

Furniture and office equipment - 124 124 -

Other machinery and equipment - 11 11 -

TOTAL DISPOSAL OF MOVABLE

TANGIBLE CAPITAL ASSETS - 474 474 -



169

28.3 Movement for 2014/15

MOVEMENT IN TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED

31 MARCH 2015

Opening

balance

Prior

period

error


Balance

R’000 R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT 7 523 - 2 044 - 9 567

Computer equipment 3 702 10 861 - 4 573

Furniture and office equipment 3 561 (10) 682 - 4 233

Other machinery and

equipment

260 - 501 - 761

TOTAL MOVABLE TANGIBLE

CAPITAL ASSETS 7 523 - 2 044 - 9 567

28.3.1 Prior period error

Note

33

2014/15

R’000

Relating to the 2013/2014 (affecting the opening balance)

Increase in Computer Equipment - reclassification

Decrease in furniture and office equipment - reclassification

10

(10)

Total prior period errors -

28.4 Minor assets

Intangible

assets

Heritage

assets

Machinery

and

equipment

Total

R’000 R’000 R’000 R’000

Opening balance 56 - 3 954 4 010

Additions - - 42 42

Disposals - - 161 160

TOTAL MINOR ASSETS 56 - 3 835 3 891

Intangible

assets

Heritage

assets

Machinery

and

equipment

Total

Number of R1 minor assets - - 174 174

Number of minor assets at cost 20 - 2 394 2 414

TOTAL NUMBER OF MINOR ASSETS 20 - 2 568 2 588



170

Number Value

R’000

Included in the above total of the movable tangible capital assets per

the asset register are assets that are under investigation:


Included in the asset register are 43 minor assets which are under investigation by the Department. The

assets identified as under investigation relate to assets not verified in the financial year. As this process

was completed at year-end, the Department deemed it necessary to perform additional verifications in

the next financial year to identify the location of these assets. Should the assets still not be located, the

Department would determine the last users of the assets and enquire as to the location of these assets.

Based on this the Department will determine if the assets can be located of if the assets should be

written-off of if loss control procedures will be initiated and reconvenes performed.

MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED AS AT

31 MARCH 2015

Intangible

assets

Heritage

assets

Machinery

and

equipment

Total

R’000 R’000 R’000 R’000

Opening balance 56 - 3 706 3 762

Prior period error - - (2) (2)

Additions - - 250 250

Disposals - - -

TOTAL MINOR ASSETS 56 - 3 954 4 010

Intangible

assets

Heritage

assets

Machinery

and

equipment

Total

Number of R1 minor assets - - 183 182

Number of minor assets at cost 20 - 2 496 2 515

TOTAL NUMBER OF MINOR ASSETS 20 - 2 677 2 698


Note 30 2014/15

R’000

Nature of prior period error

Relating to 2014/15 – incorrect classification between consumables and minor

assets

(2)

Total prior period errors (2)



171

28.6 Movable assets written off

Intangible

assets

Heritage

assets

Machinery

and

equipment

Total

R’000 R’000 R’000 R’000

Assets written off - - 84 84

TOTAL MOVABLE ASSETS WRITTEN OFF - - 84 84

29 Intangible Capital Assets

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED

31 MARCH 2016

Opening

balance

Value

adjustments


Balance

R’000 R’000 R’000 R’000 R’000

SOFTWARE 629 - - - 629

TOTAL INTANGIBLE CAPITAL

ASSETS 629 - - - 629

Movement for 2014/15

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED

31 MARCH 2015

Opening

balance

Prior

period

error


Balance

R’000 R’000 R’000 R’000 R’000

SOFTWARE 629 - - - 629

TOTAL INTANGIBLE CAPITAL

ASSETS 629 - - - 629

29 Principal-agent arrangements

29.1 Department acting as the principal

Fee paid

2015/16 2014/15

R’000 R’000

Housing Development Agency (HDA) 7 480 80 018

Free State Development Corporation (FDC) 12 472 39 002

Total 19 952 119 020



172

30 Prior period errors

Correction of prior period errors

Note 2014/15

R’000

Expenditure: (E.g. Compensation of employees, Goods and services,

Tangible capital assets, etc.)

Increase in Goods and Services for Consultants: Business and advisory

services

4 9 948

Decrease in Transfer and subsidies for Households 7 (9 948)

Net effect -

There is an increase in the comparative good and service and a decrease in the transfer and subsidies

expenditure due to the re-classification of consultant fees.

Note 2014/15

R’000

Assets: (E.g. Receivables, Investments, Accrued departmental

revenue, Movable tangible capital assets, etc.)

(Decrease) in Minor assets 28.5 (2)

(Decreased) in Accrued Departmental Revenue 23 (614)

(Decrease) in Opening balance Furniture & Equipment 28 (10)

Increase in Opening balance Computer Equipment 28 10

Net effect (616)

Minor assets were restated with consumables that were incorrectly classified as minor assets.

Material advances were restated due to the repayment not impacting the department as it is due to

Provincial Treasury. Accrued Departmental Revenue was decreased refer to Note 23.

The comparative has been restated to correctly reflect the classification of assets between computer

equipment and furniture and equipment.

National Housing Finance Corporation (NHFC) was appointed by the Department to act as its agent in

administering and implementing the Finance Linked Individual Subsidy Programme (FLISP) on its behalf

in the Free State.

Housing Development Agency (HDA) was appointed by the department as agent for the procurement of

land on behalf of the Department.

Free State Development Corporation (FDC) was appointed by the Department to act as account

administrators from Thembalihle extension 4 project.

This disclosure was added as a result of a change in accounting policy, as required by the modified Cash

Standards also refer to note 44.



173

Note 2014/15

R’000

Liabilities: (E.g. Payables current, Voted funds to be surrendered,

Commitments, Provisions, etc.)

(Decrease) in Contingent Liability prior year 18 (5 704)

(Decrease) in Accruals prior period error 20 (13 068)

(Decrease) in Professional fees commitment prior year 19 (174 966)

(Decrease) in Housing commitment prior year 19 (1 232 580)

(Decrease) in Social Housing commitment prior year 19 (481 770)

(Decrease) in Planning and surveying commitment prior year 19 (17 566)

(Decrease) in Infrastructure commitment prior year 19 (123 962)

Net effect (2 049 616)

Adjustment to the prior year contingent liabilities for individual subsidies that have not been approved as

yet.

Accruals have been restated in the prior year to more accurately reflect the Department’s liability

Adjustment to the prior year of all commitments due to the change in accounting policy for the recognition

of commitments related to transfer and subsidy expenditure.

Note 2014/15

R’000

Disclosure:

(Decrease) in Irregular expenditure for the prior years 24.4 (8 604)

(Decrease) in Fruitless and Wasteful prior year opening balance 25.4 (49)

Increase in Principal-Agent arrangements 2014/15 31 119 020

Net effect 110 367

Irregular expenditure was restated with incorrect classification refer to note 24.4.

Fruitless and wasteful expenditure was reclassified with incorrect classification refer to note 25.4

Agent Principle adjustments due to new accounting policy to be applied retrospectively.

31 Sustainability

The cumulative financial implications of, note 15 (payables), note 20 (accruals and payables not

recognised) will result in a decrease in the 2016/17 budget available for program expenditure equal to the

aggregate amount of these items, which may impact on the delivery of services and the achievement of

annual performance plan targets set for the coming year.


ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2016

174

32 STATEMENT OF CONDITIONAL GRANTS RECEIVED

NAME OF DEPARTMENT

GRANT ALLOCATION SPENT 2014/15

Division of

Revenue

Act/

Provincial

Grants

Roll

Overs

DORA

Adjust-

ments

Other

Adjust-

ments

Total

Available

Amount

received

by

depart-

ment

Amount

spent by

depart-

ment

Under /

(Overspen

ding)

% of

available

funds

spent by

depart-

ment

Division

of

Revenue

Act

Amount

spent by

department

R’000 R’000 R'000 R'000 R’000 R'000 R'000 R'000 % R’000 R’000

HSDG 1 057 284 14 886 - - 1 072 170 1 072 170 1 059 326 12 844 99% 1 061 756 1 061 756

EPWP 2 348 - - - 2 348 2 348 2 348 - 100% 2 000 2 000

MILITARY VETERANS - - - - - - - - - 14 886 -

1 059 632 14 886 - - 1 074 518 1 074 518 1 061 674 12 844 1 078 642 1 063 756



175

ANNEXURE 1A

STATEMENT OF TRANSFERS TO HIGHER EDUCATION INSTITUTIONS

NAME OF HIGHER EDUCATION

INSTITUTION

TRANSFER ALLOCATION TRANSFER 2014/15

Adjusted

Appropriation

Roll

Overs

Adjust-

ments

Total

Available

Actual

Transfer

Amount not

transferred

% of

Available

funds

Transferred

Appro-

priation Act

R'000 R'000 R'000 R'000 R'000 R'000 % R'000

Central University of Technology &

University of the Witwatersrand

273 - 3 276 275 1 99.5% 352

TOTAL 273 - 3 276 275 1 99.5% 352

Capacity building for municipalities conducted technicons and universities on behalf of the department



176

ANNEXURE 1B

STATEMENT OF TRANSFERS TO HOUSEHOLDS

HOUSEHOLDS

TRANSFER ALLOCATION EXPENDITURE 2014/15

Adjusted

Appropriation

Act Roll Overs

Adjust-

ments

Total

Available

Actual

Transfer

% of

Available

funds

Transferred

Appro-

priation Act

R'000 R'000 R'000 R'000 R'000 % R'000

Transfers

Individual housing subsidies (R0-R3 500) Non-Credit Linked - - 3 453 3 453 3 450 100% 8 118

Housing finance linked Individual subsidies (FLSIP) – (R3 501 –

R7 000)

5 100 - (5 100) - - - -

Enhanced Extended Discount Benefit Scheme (EEDBS) 900 - (900) - - - -

Rectification of Housing Stock (pre 1994) 91 155 - 357 91 512 91 500 100% 87 414

Operational Capital Budget 24 751 - (6 933) 17 818 17 817 100% 33 570

Blocked projects 41 539 - (1 372) 40 167 40 163 100% 97 431

NHBRC enrolment (related to grant) - - 4 839 4 839 4 839 100% 36 792

Land parcels procured (IHAHSD) - - - - - - 20 000

Integrated Residential Development Programme: Phase 1

Planning and Service

36 161 - 91 244 127 405 127 395 100% 40 621

Integrated Residential Development Programme: Phase 1

Planning and Service Informal Settlement

128 407 - (109 091) 19 316 19 316 100% 55 735

Integrated Residential Development Programme: Phase 4 Top

Structure construction Informal Settlements

386 342 - (56 797) 329 545 329 543 100% 565 083

People‟s Housing Process - - 2 954 2 954 2 954 100% 12 489

Emergency Housing Assistance 25 102 - (18 176) 6 926 6 924 100% 8 910

Institutional Subsidies 51 500 - (38 394) 13 106 13 105 100% 28 133

Community Residential Units (CRU) Converted/Upgraded 108 590 - (6 494) 102 096 102 094 100% 82 346

Accreditation of Municipalities 5 000 (5 000) - - - -



177

TRANSFER ALLOCATION EXPENDITURE 2014/15

Adjusted

Appropriation

Act

Roll

Overs

Adjust-

ments

Total

Available

Actual

Transfer

% of

Available

funds

Transferred

Appro-

priation

Act

HOUSEHOLDS R'000 R'000 R'000 R'000 R'000 % R'000

H/H Empl S/Ben Injury on Duty 21 - - - 21 0% -

H/H Donations & Gifts 704 - -73 631 519 82% 965

H/H Empl S/Ben Leave Gratuity 46 - 1 419 1 465 1 636 112% 3535

Provincial Specific Programme 127 673 14 886 135 471 278 030 265 233 95% -

EPWP Incentive Grant 2 348 - - 2 348 2 348 100% 2000

TOTAL 1 035 339 14 886 (8 593) 1 041 632 1 028 836 1 079 962



178

ANNEXURE 1C

STATEMENT OF GIFTS, DONATIONS AND SPONSORSHIPS RECEIVED

NAME OF ORGANISATION NATURE OF GIFT, DONATION OR SPONSORSHIP

2015/16 2014/15

R’000 R’000

Received in cash

E‟tsho Govan Mbeki Awards - 150

Ernst & Young Govan Mbeki Awards 50 50

Mafuri Infrastructure Africa Govan Mbeki Awards - 115

Mafuri Turnkey Africa Govan Mbeki Awards - 150

Subtotal 50 465

Received in kind

E‟tsho Civils Accommodation Freedom Day Celebrations - 45

Mafuri Infrastructure Africa Transport and Catering Freedom Day Celebrations - 35

Subtotal - 80

TOTAL 50 545



179

ANNEXURE 1D

STATEMENT OF ACTUAL MONTHLY EXPENDITURE PER GRANT

Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar

2015 2015 2015 2015 2015 2015 2015 2015 2015 2016 2016 2016 Total

Grant Type R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000

Human Settlements

Development Grant 71 585 86 019 256 417 95 100 121 295 44 947 35 910 154 735 125 794 37 213 30 311 1 059 326

EPWP - - - - - - - - - 1 538 810 2 348

TOTAL 71 585 86 019 256 417 95 100 121 295 44 947 35 910 154 735 125 794 38 751 31 121 1 061 674



180

ANNEXURE 2

STATEMENT OF CONTINGENT LIABILITIES AS AT 31 MARCH 2016

Nature of Liability

Opening Balance

Liabilities incurred

during the year

Liabilities paid/cancelled/reduced during the

year

Liabilities recoverable (Provide

details hereunder)

Closing Balance

1 April 2015 31 March

2016

R’000 R’000 R’000 R’000 R’000

Claims against the department

INZUZO TRADING 509 CC/DEPT HS. An application wherein the applicant is requesting the court to order the Department to pay for losses in income due to termination of construction contracts as at 31 March 2016.

33 575 - 832 -

32 743

CEM BRICK MANUFACTURERS CC/HOD HS & ZIMVO TRADING 1 756 - - - 1 756 The plaintiff is suing the Department and the Contractor jointly and severally the one to pay the other to be absolved. The claim is based on a material cession agreement that was entered into between the Contractor and the Plaintiff. The Plaintiff is alleging that the Department failed to pay the cession agreement in full.

TEBFIN PTY LTD/ZINGANA MBELE CONSTRUCTION & MEC HUMAN SETTLEMENTS

455 - - - 455

Claim for the non-payment of a cession agreement DEPT HS SELLOANE & 200 OTHERS REAHOLA HOUSING ASSOCIATIO & 10 OTHER STANDARD BANK

55

- 55

- -

On 23/10/2014 the CFO was served with a notice of execution of the Departments property. This resulted from a High Court matter wherein the Department appointed MB Mogotsi Attorneys to act on behalf of Mr Selloane and 200 residents of Reahola. The application was to dissolve the Reahola Housing Board under Reahola Housing Association. The respondent in this matter, reasons for dissolving the Board were mismanagement of funds, failure to issue title deeds, failure to maintain the place etc. the Department was involved in the matter as a way of protecting the Housing Institutional Subsidies that were issued to these residents. In the notice received it



181

is indicated that the respondent received a Court order against the department on 25/08/2014 however the Department was not aware of such matter we were never serve d and we also checked with the registers file there is no return served TEBFIN PTY LTD/KENTHA CONSTRUCTION (PTY) LTD & MEC COGTA & HS 72 - - - 72 Claim of R72 000 for the non-payment of a cession agreement VISIBLE SPPED T/A APOLO CONSTRUCTIN & MEC COGTA/HS 2 399 - -- 2 399 Breach of contract by the defendant, by not allowing the Plaintiff to complete the projects they were appointed for 106 units in Hennenman and 100 units in Ventersburg.

THABULA TRADE 7 INVEST 3 (PTY) LTD - 1 086 - - 1 086 The applicant was subcontracting under Ruwacon for the Hobhouse 60 housing units and Ladybrand 60 housing unit‟s projects. The cause of action is payment of money owed for contractual work done on site. The State Attorney has been instructed to file a notice of intention to abide as the matter essentially relates to the applicant and the 1

st Respondent. The Department was only joined for notification

purposes

TOTAL 38 312 1 086 887 - 38 511

The comparative has been restated to remove claims with queries and individual subsidy claims as these are included in accruals.



182

ANNEXURE 3

CLAIMS RECOVERABLE

Government Entity

Confirmed balance outstanding

Unconfirmed balance outstanding Total

Cash in transit at year end 2015/16 *

31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015

Receipt date up to

six (6) working

days after year end Amount

R’000 R’000 R’000 R’000 R’000 R’000 R’000

Department

National Department of Home Affairs - - - 14 - 14 - -

Cooperative Governance - - - 26 - 26 - -

- - - 40 - 40 - -

Other Government Entities

Mangaung Furnserv - - 265 265 265 265 - -

Mangaung Bomme Building Construction - - 230 230 230 230 - -

SARS - - 28 19 28 19 - -

Matjhabeng Municipality - - 34 34 34 34 - -

Moqhaka Municipailtiy - - 26 26 26 26 - -

- - 583 574 583 574 - -

TOTAL - - 583 614 583 614 - -

.



183

ANNEXURE 4

INTER-GOVERNMENT PAYABLES

GOVERNMENT ENTITY

Confirmed balance outstanding

Unconfirmed balance outstanding TOTAL

Cash in transit at year end 2015/16

31/03/2016 31/03/2015 31/03/2016 31/03/2015 31/03/2016 31/03/2015

Payment date up to

six (6) working

days before year end Amount

R’000 R’000 R’000 R’000 R’000 R’000 R’000

DEPARTMENTS

Current

Department of the Premier 1 953 112 - - 1 953 112 - -

Department of Cooperative Governance 111 1 118 - - 111 1 118 - -

Department of Justice - 91 - - - 91 - -

Department of Sports Arts & Culture 227 - - - 227 - - -

Department of Education 23 - - - 23 - - -

Department of Social Development 175 - - - 175 - - -

Subtotal 2 489 1 321 - - 2 489 1 321 - -

OTHER GOVERNMENT ENTITY

Current

Fleet Management 1 527 562 - - 1 527 562 - -

Subtotal 1 527 562 - - 1 527 562 - -

TOTAL 4 016 1 883 - - 4 016 1 883 - -



184

ANNEXURE 5

INVENTORIES

Inventory [Per major category] Note Quantity 2015/16 Quantity 2014/15

R’000 R’000

Opening balance 8 340 91 534 6 747 7

Add/(Less): Adjustments to prior year balance - - - -

Add: Additions/Purchases - Cash - - - -

Add: Additions - Non-cash 10 433 638 405 1 593 91 527

(Less): Disposals - - - -

(Less): Issues - - - -

Add/(Less): Adjustments - - - -

- - - -

Closing balance 18 773 729 939 8 340 91 534


HOUSING FUND ANNUAL FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2016

185

ANNEXURE 6

MOVEMENT IN CAPITAL WORK IN PROGRESS

MOVEMENT IN CAPITAL WORK IN PROGRESS FOR THE YEAR ENDED 31 MARCH 2016

Opening

balance

Current

Year

Capital

WIP

Completed

Assets

Closing

balance

R’000 R’000 R’000 R’000

BUILDINGS AND OTHER FIXED STRUCTURES 1 165 623 725 694 (638 405) 1 252 912

Dwellings 1 165 623 725 694 (638 405) 1 252 912

TOTAL 1 165 623 725 694 (638 405) 1 252 912

MOVEMENT IN CAPITAL WORK IN PROGRESS FOR THE YEAR ENDED 31 MARCH 2015

Opening

balance

Current

Year

Capital

WIP

Completed

Assets

Closing

balance

R’000 R’000 R’000 R’000

BUILDINGS AND OTHER FIXED STRUCTURES 453 182 803 968 (91 527) 1 165 623

Dwellings 453 182 803 968 (91 527) 1 165 623

TOTAL 453 182 803 968 (91 527) 1 165 623



186

DEPARTMENT OF HUMAN SETTLEMENTS HOUSING FUND ANNUAL FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2016



187

CONTENTS PAGE

GENERAL INFORMATION

REPORT OF THE ACCOUNTING OFFICER

ACCOUNTING OFFICERS RESPONSIBLITIES AND APPROVAL STATEMENT

STATEMENT OF FINANCIAL POSITION

STATEMENT OF FINANCIAL PERFORMANCE

STATEMENT OF CHANGES IN NET ASSETS

CASH FLOW STATEMENT

ACCOUNTING POLICIES

NOTES TO THE FINANCIAL STATEMENTS

188

190

191

192

193

194

195

196

205



188

FREE STATE HOUSING FUND

FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2016

GENERAL INFORMATION

Accounting Officer: Mr. N. Mokhesi

Registered office: OR Thambo House

Cnr. St Andrews and Markgraaff Streets

Bloemfontein

9301

Business address: OR Thambo House

Cnr St Andrews and Markgraaf Street

Bloemfontein

9301

Postal address: P.O. Box 211

Bloemfontein

9300

Domicile and legal form: The Fund is domiciled in Bloemfontein within the Free State Province,

South Africa. The Fund is an entity falling under the administration of

the Free State Department of Human Settlements.

Jurisdiction: The Fund falls within the jurisdiction of the Republic of South Africa.

Banker: Standard Bank of South Africa

Auditor: Auditor-General of South Africa



189

Nature of business: The provision of low cost housing in the Free State in terms of the

Free State Housing Act of 1999.

Level of assurance: These interim financial statements have been prepared in accordance

with Generally Recognised Accounting Practices in order to provide

users thereof with relevant and accurate economic information

regarding the Fund for the period ended 31 March 2016.

Preparer: The annual financial statements were independently compiled

by Ernst & Young Advisory Services (Proprietary) Limited.

Supervised by: The annual financial statements are under the direction and

supervision of Mr. N. Mokhesi, the Head of the Department of Human

Settlements.



190


REPORT OF THE ACCOUNTING OFFICER FOR THE PERIOD ENDED 31 MARCH 2016

The accounting officer submits his report for the period ended 31 March 2016:

1. Review of activities

Main business and operations

The Fund is established for the provision of low cost housing in the Free State in terms of the Free State Housing Act of 1999.

The operating results and state of affairs of the Fund are fully set out in the attached annual financial statements and do not in my opinion require any further comment.

2. Going concern

It is the intention of the Accounting officer to close the Fund during the next financial year and therefore it is no longer a going concern as management intends to liquidate the Fund or to cease operations. GRAP 1 – Presentation of Financial Statements requires that the financial statements should not be prepared on a going concern basis if management intends to liquidate the Fund or to cease trading. In view of this the carrying value of the assets, which were determined in accordance with the going concern basis, have been reviewed for possible impairment and changes which have occurred since the year end and consideration has been given as to whether any additional provisions are necessary as a result of the decision to cease operations. It is expected that all assets will realise the amounts at which they are included in the statement of financial position and there will be no material additional liabilities.

Accordingly management does not expect an alternative basis of preparation to be materially different from the going concern basis, and therefore the financial statements have been prepared on a going concern basis.

3. Events after the reporting period

The accounting officer is not aware of any matters or circumstances arising since the end of the financial year.

4. Auditor

The Auditor-General South Africa will audit the Fund as prescribed.

5. Compilation of annual financial statements

The compiler was responsible for the preparation of the annual financial statements based on information provided by management and worked under the supervision of management. Management is responsible for these annual financial statements.

The state of the fund‟s affairs, its performance and cash flow for the year under review is properly disclosed in the enclosed financial statements. The financial statements state the affairs, performance, and cash flow for the individual fund.

Accounting Officer

N Mokhesi Date: 31 July 2016



191


ACCOUNTING OFFICER’S RESPONSIBILITIES AND APPROVAL STATEMENT FOR THE PERIOD

ENDED 31 MARCH 2016

The accounting officer of the Fund is required in terms of the Public Finance Management Act No, 1 of

1999 (PFMA) to maintain adequate accounting records and is responsible for the content and integrity

of the annual financial statements and related financial information included in this report. It is their

responsibility to ensure that the annual financial statements fairly present the state of affairs of the Fund

as at the end of the financial year and the results of its operations and cash flows for the period then

ended, in conformity with Generally Recognised Accounting Practices. The external auditors are

engaged to express an independent opinion on the annual financial statements.

The annual financial statements are prepared in accordance with Generally Recognised Accounting

Practices and are based upon appropriate accounting policies consistently applied and supported by

reasonable and prudent judgments and estimates.

The accounting officer acknowledges that he is ultimately responsible for the system of internal financial

control established by the Fund and places considerable importance on maintaining a strong control

environment. To enable the accounting officer to meet these responsibilities, standards for internal

control have been set aimed at reducing the risk of error or loss in a cost effective manner. The

standards include the proper delegation of responsibilities within a clearly defined framework, effective

accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These

controls are monitored throughout the fund and all employees are required to maintain the highest

ethical standards in ensuring the fund‟s operations are conducted in a manner that in all reasonable

circumstances is above reproach. While operating risk cannot be fully eliminated, the fund endeavours

to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are

applied and managed within predetermined procedures and constraints.

The accounting officer is of the opinion, based on the information and explanations given by

management that the system of internal control provides reasonable assurance that the financial

records may be relied on for the preparation of the annual financial statements. However, any system of

internal financial control can provide only reasonable, and not absolute, assurance against material

misstatement or loss.

The external auditors are responsible for independently reviewing and reporting on the fund's annual

financial statements.

The annual financial statements set out on pages 8 to 30, which have been prepared on the going

concern basis, were approved by the accounting officer on and were signed by:

___________________________

Accounting Officer

N. Mokhesi

Date: 31 July 2016



192


STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2016

Notes

2015/16

R’000

2014/15

R’000

ASSETS

Current assets

14 610 13 780

Trade and other receivables from exchange transactions

3 98 81

Cash and cash equivalents 4 14 512 13 699

Non-Current assets held for sale 2 436 571

Total assets 15 046 14 351

EQUITY AND LIABILITIES

Capital and reserves

Accumulated surplus 2 041 2 184

Current liabilities

Trade and other payables 5 13 005 12 167

Total equity and liabilities 15 046 14 351



193

FREE STATE HOUSING FUND STATEMENT OF FINANCIAL PERFORMANCE FOR THE PERIOD ENDED 31 MARCH 2016

Notes

2015/16

R’000

2014/15

R’000

Revenue from exchange transactions

Revenue from non-exchange transactions

9

9

802

-

549

-

Expenditure:

Provision for doubtful debts 17

547

Other operating expenses

Finance expense

Bad debt written off

-

(831)

(130)

-

(725)

(591)

Operating Surplus / (Deficit) (143)

(220)

Other income- Administration fees raised on property debtors

- -

- Capital adjustments on loans

Surplus / (Deficit) for the period

-

(143)

-

(220)



194


STATEMENT OF CHANGES IN NET ASSETS FOR THE PERIOD ENDED 31 MARCH 2016

Note

Accumulated Surplus

Total

R’000

Balance at 01 April 2012 2 374

Restated Surplus / (Deficit) for the period 6

Restated balance at 31 March 2013 2 380

Surplus / (Deficit) for the period 25

Balance at 31 March 2014 2 405

Surplus / (Deficit) for the period (221)


Surplus / (Deficit) for the period (143)




195


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2016

Note

2015/16

R’000

Restated

2014/15

R’000

CASH FLOWS FROM OPERATING ACTIVITIES:

Cash receipts from customers 106 57

Cash paid to suppliers and employees (106) (57)

Cash generated from operations 6 - -

Interest received

Interest paid

813

-

719

-

Net cash flow from operating activities 6 813 719

CASH FLOWS FROM INVESTING ACTIVITIES

Net (decrease) / increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

4

-

813

13 699

-

719

12 980

Cash and cash equivalents at end of period 4 14 512 13 699



196


ACCOUNTING POLICIES TO THE FINANCIAL STATEMENTS AT 31 MARCH 2016

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTS

The principal accounting policies, applied in the preparation of these annual financial statements, are set out below. These accounting policies are consistent with those applied in the preparation of the prior year annual financial statements, unless specified otherwise.

1.1 BASIS OF PREPARATION

These annual financial statements were prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP), as issued by the Accounting Standards Board in accordance with Section 91(1) of the Public Finance Management Act (Act No 1 of 1999).

The annual financial statements were prepared on the accrual basis of accounting and incorporate the historical cost conventions as the basis of measurement, except where specified otherwise.

In the absence of an issued and effective Standard of GRAP, accounting policies for material transactions, events or conditions were developed in accordance with paragraphs 8, 10 and 11 of GRAP 3 as read with Directive 5.

Assets, liabilities, revenues and expenses were not offset, except where offsetting is either required or permitted by a Standard of GRAP.

1.2 PRESENTATION CURRENCY

These annual financial statements are presented in South African Rand, which is the functional currency of the Fund, and amounts have been rounded to the nearest thousand Rand.

1.3 GOING CONCERN ASSUMPTION

It is the intention of the Accounting Officer to close the Fund during the next financial year and therefore it is no longer a going concern, as management intends to liquidate the Fund or to cease operations. GRAP 1 – Presentation of Financial Statements requires that the financial statements should not be prepared on a going concern basis if management intends to liquidate the Fund or to cease trading. In view of this the carrying value of the assets, which were determined in accordance with the going concern basis, have been reviewed for possible impairment and changes which have occurred since the year end and consideration has been given as to whether any additional provisions are necessary as a result of the decision to cease operations. It is expected that all assets will realise the amounts at which they are included in the statement of financial position and there will be no material additional liabilities.

Accordingly management does not expect an alternative basis of preparation to be materially different from the going concern basis, and therefore the financial statements have been prepared on a going concern basis.

1.4 COMPARATIVE INFORMATION

Prior year comparatives

When the presentation or classification of items in the annual financial statements is amended, prior period comparative amounts are also reclassified and restated, unless such comparative reclassification and / or restatement is not required by a Standard of GRAP. The nature and reason for such reclassifications and restatements are also disclosed.



197

Where material accounting errors, which relate to prior periods, have been identified in the current year, the correction is made retrospectively as far as is practicable and the prior year comparatives are restated accordingly. Where there has been a change in accounting policy in the current year, the

adjustment is made retrospectively as far as is practicable and the prior year comparatives are restated accordingly.

The presentation and classification of items in the current year is consistent with prior periods.

1.5 STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE

The following standards have been issued, but are not effective for the 2014/15 financial year:

GRAP 18 - Segment Reporting

The standard does not yet have an effective date. The standard requires the identification and aggregation of the operating segments of the Fund into reportable segments. For each of the reportable segments identified details of the financial performance and financial position should be disclosed.

This standard will not have an effect on the financial statements of the Fund as the Fund does not have different segments for which it is appropriate to separately report financial information.

GRAP 20 – Related Parties (revised)

The standard does not yet have an effective date. This standard provides the requirements for the disclosure of related parties and transactions and balances with related parties. It is based on IPSAS 20, however several principles from IAS 24 has been included. Furthermore definitions and terms have been amended to be relevant in a South African context.

The Fund complied with the requirements of this standard during the period under review.

GRAP 32 - Service Concession Arrangements: Grantor

The standard does not yet have an effective date. The standard provides guidance on how the grantor should account for service concession arrangements. The standard addresses how service concession revenue and the related assets and liabilities should be accounted for. Taking into consideration that the Fund is not involved in service concession arrangements it is considered that this standard will not have a significant impact on its financial statements once it becomes effective.

GRAP 105 – Transfer of Function between Entities under Common Control

The standard does not yet have an effective date. This standard provides the accounting treatment for transfers of functions between entities under common control. The standard determines that assets and liabilities transferred to entities under common control will be recognised at their carrying values (determined by the transferring Entity using an accrual accounting basis) in the records of the receiving Entity. The difference between the consideration transferred and the carrying value of the assets / liabilities transferred is recognised in accumulated surplus / deficit.

This standard will only have an effect on the financial statements of the Fund when functions are transferred between entities under common control. The transfer of functions would be accounted for as mentioned above.

GRAP 106 – Transfer of Function between Entities Not Under Common Control

This standard deals with other transfers of functions not under common control and requires the Entity to measure transferred assets and liabilities at fair value. The difference between the consideration transferred and the carrying value of the assets / liabilities transferred is recognised in accumulated surplus / deficit. This standard does not yet have an effective date.



198

This standard will only have an effect on the financial statements of the Fund when functions are transferred between entities not under common control. The transfer of functions would be accounted for as mentioned above.

GRAP 107 – Mergers

This standard deals with requirements of accounting for a merger between two or more entities. The standard determines that the assets and liabilities acquired through the merger should be measured at their carrying values. Any difference between these carrying values and the consideration transferred for the merger is recognised in accumulated surplus / deficit. This standard does not yet have an effective date.

This standard will only have an effect on the financial statements of the Fund when it enters into a merger. The merger would be accounted for as mentioned above.

GRAP 108 - Statutory Receivables

The standard does not yet have an effective date. This standard prescribes the accounting treatment for receivables arising from legislation rather than from contracts entered into between parties. This standard provides that statutory receivables are initially measured at transaction price and subsequently measured using the cost model. Application of the cost model allows for adjustment to the carrying amount to reflect any interest or other charges that may have accrued on the receivable, impairment losses or amounts de-recognised.

This standard is not anticipated to have a significant impact on the financial statements of the Fund.

GRAP 12 – Jointly Controlled Entities – Non-monetary Contributions by Ventures’

This interpretation provides guidance on the recognition of gains and losses resulting from contributions of non-monetary assets to jointly controlled entities. This interpretation does not yet have an effective date.

This interpretation will not have an effect on the financial statements of the Fund.

1.6 SIGNIFICANT JUDGMENTS AND ESTIMATES

The use of judgment, estimates and assumptions is inherent to the process of preparing annual financial statements. These judgements, estimates and assumptions affect the amounts presented in the annual financial statements. Uncertainties about these estimates and assumptions could result in outcomes that require a material adjustment to the carrying amount of the relevant asset or liability in future periods.

Judgements

In the process of applying these accounting policies, management has not been required in the current year to make judgements that may have a significant effect on the amounts recognised in the financial statements.

Estimates

Estimates are informed by historical experience, information currently available to management, assumptions, and other factors that are believed to be reasonable under the circumstances. These estimates are reviewed on a regular basis. Changes in estimates that are not due to errors are processed in the period of the review and applied prospectively.



199

In the process of applying the Fund‟s accounting policies the following estimates, were made:

Provision for bad debts

The measurement of receivables is derived after consideration of the provision for bad debts. Management makes certain assumptions regarding the categorisation of debtors into groups with similar risk profiles so that the effect of any impairment on a group of receivables would not differ materially from the impairment that would have been determined had each debtor been assessed for impairment on an individual basis. The determination of this allowance is predisposed to the utilisation of estimates, assumptions and management judgements. In determining this allowance the estimates are made about the probability of recovery of the debtors based on their past payment history and risk profile.

An allowance for this was created on the following basis:

Amount of debt outstanding for 120 days or more as a percentage of the total debt outstanding Recommended allowance

80-100% 100%

60-80% 80%

40-60% 60%

20-40% 40%

0-20% 20%

The basis used has not changed from the prior year, and reflects the most accurate provision calculation.

Effective interest rate

The Fund uses an appropriate interest rate, taking into account guidance provided in the standards, and applying professional judgement to the specific circumstances, to discount future cash flows. The Fund used the following in arriving at the effective interest rate used:

No Consideration Inputs related to the consideration

1 Market related rate used as starting point National Treasury guidelines

1.7 FINANCIAL INSTRUMENTS

Initial Recognition

The Fund recognises a financial asset or a financial liability in its Statement of Financial Position when, and only when, the Fund becomes a party to the contractual provisions of the instrument. This is achieved through the application of trade date accounting.

Upon initial recognition the Fund classifies financial instruments or their component parts as financial liabilities, financial assets or residual interests in conformity with the substance of the contractual arrangement and to the extent that the instrument satisfies the definitions of a financial liability, a financial asset or a residual interest.

Financial instruments are evaluated, based on their terms, to determine if those instruments contain both liability and residual interest components (i.e. to assess if the instruments are compound financial



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instruments). To the extent that an instrument is in fact a compound instrument, the components are classified separately as financial liabilities and residual interests as the case may be.

Initial Measurement

When a financial instrument is recognised, the Fund measures it initially at its fair value plus, in the case of a financial asset or a financial liability not subsequently measured at fair value, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

Subsequent Measurement

Subsequent to initial recognition, financial assets and financial liabilities are measured at fair value, amortised cost or cost.

All financial assets and financial liabilities are measured after initial recognition using the following categories:

(a) Financial instruments at fair value

(b) Financial instruments at amortised cost, or

(c) Financial instruments at cost.

The Fund assesses which instruments should be subsequently measured at fair value, amortised cost or cost, based on the definitions of financial instruments at fair value, financial instruments at amortised cost or financial instruments at cost as set out above.

Concessionary loans

The part of the concessionary loan that is a social benefit or non-exchange revenue is determined as the difference between the fair value of the loan and the loan proceeds, either paid or received.

After initial recognition, the Fund measures concessionary loans in accordance with the subsequent measurement criteria set out for all financial instruments.

De-recognition

A financial asset is derecognised at trade date, when: a) The cash flows from the asset expire, are settled or waived; b) Significant risks and rewards are transferred to another party; or c) Despite having retained significant risks and rewards, the Fund has transferred control of the asset to another entity.

A financial liability is derecognised when the obligation is extinguished. Exchanges of debt instruments between a borrower and a lender are treated as the extinguishment of an existing liability and the recognition of a new financial liability. Where the terms of an existing financial liability are modified, it is also treated as the extinguishment of an existing liability and the recognition of a new liability.

Gains and losses

A gain or loss arising from a change in the fair value of a financial asset or financial liability measured at fair value is recognised in surplus or deficit.

For financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit when the financial asset or financial liability is derecognised or impaired or through the amortisation process.

Offsetting

The Fund does not offset financial assets and financial liabilities in the Statement of Financial Position unless a legal right of set-off exists and the parties intend to settle on a net basis.



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Impairments

All financial assets measured at amortised cost, or cost, are subject to an impairment review. The Fund assesses at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired.

For financial assets held at amortised cost:

The Fund first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant and individually or collectively for financial assets that are not individually significant. If the Fund determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in the collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets measured at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset‟s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset‟s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in surplus or deficit.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor‟s credit rating), the previously recognised impairment loss shall be reversed either directly or by adjusting an allowance account. The reversal shall not result in a carrying amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in surplus or deficit.

For financial assets held at cost:

If there is objective evidence that an impairment loss has been incurred on an investment in a residual interest that is not measured at fair value because its fair value cannot be measured reliably, the amount of the impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed.

Policies relating to specific financial instruments

Cash and cash equivalents

Cash and cash equivalents are measured at fair value.

Cash includes cash on hand and cash with banks. Cash equivalents are short-term highly liquid investments that are held with registered banking institutions with maturities of three months or less and are subject to an insignificant risk of change in value.

For the purposes of the Cash Flow Statement, cash and cash equivalents comprise cash on hand and deposits held on call with banks.

Trade and other receivables

Trade and other receivables are initially recognised at fair value plus transaction costs that are directly attributable to the acquisition and subsequently stated at amortised cost, less provision for impairment. All trade and other receivables are assessed at least annually for possible impairment. Impairments of trade and other receivables are determined in accordance with the accounting policy for impairments. Impairment adjustments are made through the use of an allowance account.



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In the current year, and consistent with the prior year, the method of determination of fair value has been determined by actual outstanding debt.

Bad debts are written off in the year in which they are identified as irrecoverable. Amounts receivable within 12 months from the reporting date are classified as current. Interest is charged on overdue accounts.

Trade and other payables

Trade payables are initially measured at fair value plus transaction costs that are directly attributable to the acquisition and are subsequently measured at amortised cost using the effective interest rate method.

1.8 NON-CURRENT ASSETS HELD FOR SALE

Recognition

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. If the sale is delayed by events or circumstances beyond the Fund‟s control and the Fund remains committed to its plan to sell, this does not preclude the assets as from being classified as held for sale.

Measurement

Non-current assets held for sale (or disposal group) are measured at the lower of carrying amount and fair value less costs to sell.

A non-current asset is not depreciated (or amortised) while it is classified as held for sale or while it is part of a disposal group classified as held for sale.

Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale are recognised in surplus or deficit.

De-recognition

Non-current assets and disposal groups held for sale are derecognised upon disposal of the item or where no further economic benefits or service potential is expected to flow from the asset or disposal group. Gains / losses that result from the de-recognition of non-current assets or disposal groups held for sale are recognised in surplus / deficit in the period of the de-recognition.

1.9 REVENUE RECOGNITION

Revenue from Exchange Transactions

Revenue from exchange transactions refers to revenue that accrues to the Fund directly in return for services rendered or goods sold, the value of which approximates the consideration received or receivable, excluding indirect taxes, rebates and discounts.

Recognition

Revenue from exchange transactions is only recognised once all of the following criteria have been satisfied:

a) The Fund retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

b) The amount of revenue can be measured reliably; and



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c) It is probable that the economic benefits or service potential associated with the transaction will flow to the Fund and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue arising out of situations where the Fund acts as an agent on behalf of another entity (the principal) is limited to the amount of any fee or commission payable to the Fund as compensation for executing the agreed services.

Specific exchange-revenue sources

Rental income arising from Non-Current Assets held for sale is recognised as it legally accrues in terms of the original contract until the date of disposal of the particular property.

Interest on loans is recognised at fair value on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity.

Interest received on the bank account represents an amount that is due to the Provincial Department of Human Settlements on winding-up of the Fund and as such is credited directly to this liability included in Trade Payables.

Measurement

Revenue from exchange transactions is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the Fund.

Expenditure from Exchange Transactions

The accounting policy for expenditure arising from exchange transactions is similar to the policy for exchange revenue.

Revenue from Non-Exchange Transactions

Non-exchange transactions are transactions that are not exchange transactions.

Revenue from non-exchange transaction arises when the Fund either receives value from another entity without directly giving approximately equal value in exchange or gives value to another entity without directly receiving approximately equal value in exchange.

Revenue from non-exchange transactions is generally recognised to the extent that the related receipt or receivable qualifies for recognition as an asset and there is no liability to repay the amount.

Grants, transfers and donations received or receivable are recognised when the resources that have been transferred meet the criteria for recognition as an asset and there is not a corresponding liability in respect of related conditions.

Measurement

An asset that is recognised as a result of a non-exchange transaction is recognised at its fair value at the date of the transfer. Consequently, revenue arising from a non-exchange transaction is measured at the fair value of the asset received, less the amount of any liabilities that are also recognised due to conditions that must still be satisfied.

Where there are conditions attached to a grant, transfer or donation that gave rise to a liability at initial recognition, that liability is transferred to revenue as and when the conditions attached to the grant are met.

Grants without any conditions attached are recognised as revenue in full when the asset is recognised, at an amount equalling the fair value of the asset received.



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Interest earned on the investment is treated in accordance with grant conditions. If it is payable to the funder it is recorded as part of the creditor.

Expenditure relating to Non-Exchange Transactions

The accounting policy for expenditure arising from non-exchange transactions is similar to policy for non-exchange revenue.

1.10 SURPLUS OR DEFICIT

Income, expenditure, gains and losses are recognised in surplus or deficit except for the exceptional cases where recognition directly in net assets is specifically allowed or required by a Standard of GRAP.

1.11 EVENTS AFTER THE REPORTING DATE

Events after the reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Two types of events can be identified:

Those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); and

Those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting date).

The Fund will adjust the amounts recognised in the financial statements to reflect adjusting events after the reporting date once the event occurred.

The Fund will disclose the nature of the event and an estimate of its financial effect or a statement that such estimate cannot be made in respect of all material non-adjusting events, where non-disclosure could influence the economic decisions of users taken on the basis of the financial statements.

1.12 RELATED PARTIES

The Fund has processes and controls in place to aid in the identification of related parties. A related party is a person or an entity with the ability to control or jointly control the other party or exercise significant influence over the other party, or vice versa, or an entity that is subject to common control, or joint control. Related party relationships where control exists are disclosed regardless of whether any transactions took place between the parties during the reporting period.

Where transactions occurred between the Fund and any one or more related parties, and those transactions were not within:

normal supplier and/or client/recipient relationships on terms and conditions no more or less favourable than those which it is reasonable to expect the Fund to have adopted if dealing with that individual entity or person in the same circumstances; and

terms and conditions within the normal operating parameters established by the reporting Fund‟s legal mandate; further details about those transactions are disclosed in the notes to the financial statements.

1.13 CONSIDERATION OF CONSOLIDATION

The Department of Human Settlements has the ultimate control over the Housing Fund. According to IAS 27 consolidated annual financial statements should be prepared for the Department and Housing Fund, but consolidation is not required due to the fact that the Housing Fund is presented on the GRAP basis of accounting whilst the Department is presented on the modified cash basis of accounting, therefore no consolidated financial statements have to be prepared.



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NOTES TO THE FINANCIAL STATEMENTS AT 31 MARCH 2016

2015/16

R’000

2014/15

R’000

2. NON-CURRENT ASSETS HELD FOR SALE

Opening balance 571 804

Assets sold (135) (233)

Adjustment for impairment loss - -

Closing balance at end of year 436 571

The Assets held for sale consists of land and residential houses. The Free State Housing Fund retains ownership of 59 housing units. In the current year the Debtors system has been updated and 18 properties have been transferred.

These units are occupied by tenants who are required to reimburse the Fund for the usage thereof. It is, however, the intention of the Housing Fund to dispose of the units to the occupants thereof. Whilst this has not occurred up to the period ended 31 March 2016, the circumstances which dictated this were outside of management‟s control, and it remains the intention of management to dispose of the units to the occupants thereof within the next 12 months. Therefore, the units have been disclosed as "Non-current assets held for sale".

3. TRADE AND OTHER RECEIVABLES FROM EXCHANGE TRANSACTIONS

Rental debtors at gross value 1 368 1 385 Provision for bad debts for rental debtors (1 351) (1 368)

Rental debtors at fair value 17 17

Loans to individuals at gross value 35 35

Provision for bad debts for loans to individuals at fair value

(35)

(35)

Loans to individuals at fair value - -

Properties sold at gross value 29 29 Provision for bad debts for properties Sold

(29)

(29)

- -

Loan account: Department of Human

Settlements

- Finance income receivable – Standard Bank 81 64

98 81

Debtors are charged interest on overdue payments at a rate of 9% per annum.



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FREE STATE HOUSING FUND NOTES TO THE FINANCIAL STATEMENTS AT 31 MARCH 2016

Trade and other receivables past due but not impaired:

Debtor classification

Neither past due nor impaired

30-60 days

61-90 days

91-120 days

>120 days

Total

Rental debtors 2 2 - - - 2

Individual loan debtors

- - - - - -

Properties sold debtors

- - - - - -

Totals 2 2 - - - 2

Trade and other receivables impaired:

Debtor classification 1-3 months >3 months

Rental debtors 1 1 351

Individual loan debtors 35

Properties sold debtors 29

Total 1 1 415

Summary of Debtors by Customer Classification

Consumers Industrial / Commercial

R '000 R '000

As at 31 March 2016 Current (0 – 30 days) 25 81 31 - 60 Days 11 - 61 - 90 Days 11 - 91 - 120 Days 11 - 121+ Days 1 375 -

Sub-total 1 433 81 Less: Provision for doubtful debts (1 416) -

Total debtors by customer classification

17 81

As at 31 March 2015 Current (0 – 30 days) 12 64 31 - 60 Days 12 - 61 - 90 Days 12 - 91 - 120 Days 11 - 121+ Days 1 403 -

Sub-total 1 450 64 Less: Provision for doubtful debts (1 433) -

Total debtors by customer classification 17 64



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2015/16 R’000

2014/15 R’000

Reconciliation of the doubtful debt provision

Balance at beginning of the year Contributions to provisions

1 435 (17)

1 982 (547)

Balance at end of year 1 418 1 435

2015/16 R’000

2014/15 R’000

4. CASH AND CASH EQUIVALENTS Cash on hand and bank balances

14 512

13 699

14 512 13699

Cash at Standard Bank earned 5% interest per annum.

5. TRADE AND OTHER PAYABLES

Sundry payables Funds to be transferred to Department of Human Settlements, made up as follows: Funds owed to the Department of Human Settlements represented by the cash and cash equivalents of the Fund, less Funds owed to the Housing Fund by the Department of Human Settlements

Other Creditors

2015/16 R’000

-

13 005

14 594

(1 598) 9

2014/15

R’000 -

12 167

13 764

(1 596) -

13 005 12 167

Upon closure of the Fund, the amount owed by the Department of Human Settlements will be settled against the payable owed to the department and the net amount will be paid over to the aforementioned Department.



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FREE STATE HOUSING FUND NOTES TO THE FINANCIAL STATEMENTS AT 31 MARCH 2016 6. RECONCILIATION OF NET PROFIT TO CASH GENERATED FROM OPERATIONS

2015/16 R’000

2014/15 R’000

Surplus/(Deficit) for the year (143) (221)

Adjustments for: - Interest received - Provision for bad debts movement - Bad debt write off - Rebate on sale of assets

(813) (17) 131 135

(719) (547) 591 232

Operating profit before working capital changes

(707)

(664)

Changes in working capital:

-(Increase) / Decrease in Trade and other receivables

(122)

(47)

- Increase / (Decrease) in Trade and other payables

829

711

Cash generated from Operations

-

-

7. FINANCIAL INSTRUMENTS

Set out below is a comparison by category of carrying amounts and fair values of all of the Fund‟s financial instruments that are carried in the financial statements at other than fair values:

Carrying amount Fair Value Note 2015/16

R’000 Restated

2014/15 R’000

2015/16 R’000

Restated 2014/15 R’000

Financial Assets

Trade Receivables 3 98 81 98 81 Cash and cash equivalents

4

14 512 13 699 14 512 13 699

Financial Liabilities

Trade Payables 5 13 005 12 168 13 005 12 168

The financial assets and liabilities by category: The accounting policies for financial instruments have been applied to the line items below:



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2016 Financial assets at

fair value Financial assets and liabilities at amortised cost

Total

Trade receivables - 98 98 Cash and cash equivalents

14 512 - 14 512

Trade payables - (13 005) (13 005)

14 512 12 907 1 605

2015 Financial assets at

fair value Financial assets and liabilities at amortised cost

Total

Trade receivables - 81 81 Cash and cash equivalents

13 699 - 13 699

Trade payables - (12 167) (12 167)

13 699 (12 086) 1 613

Risk Management

7.1 Maximum credit risk exposure

The credit risk of trade receivables is not manageable due to the fact that houses are being allocated to low-income tenants in terms of Government policy to promote social housing. In the light of the above significant provision for bad debts has been raised against trade receivables to achieve a recoverable carrying amount.

Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The Fund only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Trade and other receivables are presented in the financial statements at amortised cost.

7.1.1 Collateral held and other credit enhancements

The credit risk exposure, as posed by the financial assets detailed above, is mitigated by collateral held in the form of the housing units owned by the Free State Housing Fund in relation to these instruments. Such units remain the property of the Fund until such time as debts are settled and ownership is officially transferred.

7.1.2 Concentration of credit risk

The concentration of credit risk is mainly within the trade and other receivables, relating to debtors at year end, rather than in the cash and cash equivalents of the Fund.



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7.2 Liquidity risk

The Fund‟s risk to liquidity is a result of the funds available to cover future commitments. The Fund manages liquidity risk through an ongoing review of future commitments and credit facilities. Adequate utilised borrowing facilities are monitored.

The table below analyses the Fund‟s financial liabilities into relevant maturity groupings based on the remaining period at the Statement of Financial Position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

2016 Not later than one month Later than one month and not later than three months

Trade and other payables - -

2016 Later than three months and not later than one year

Later than one year and not later than five years

Trade and other payables 13 005 -

2015 Not later than one month Later than one month and not later than three months

Trade and other payables - -

2015 Later than three months and not later than one year

Later than one year and not later than five years

Trade and other payables 12 167 -

7.2.1 Concentration of liquidity risk The concentration of liquidity risk is mainly within the trade and other payables, which relates to the liability payable to the Department of Human Settlements.

7.2.2 Collateral held and other credit enhancements The Fund holds no collateral and / or credit enhancements that aid in the mitigation of the liquidity risk it is exposed to. 7.3 Interest rate risk As the Fund has significant interest-bearing assets, the Fund‟s income and operating cash flows are not substantially independent of changes in market interest rates. At year end, financial instruments exposed to interest rate risk were as follows: - Cash and cash equivalents 7.3.1 Concentration of interest rate risk The concentration of interest rate risk is mainly within the cash and cash equivalents, as this is where the Fund is most exposed to changes in the interest rate.



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7.3.2 Interest rate risk sensitivity analysis The susceptibility of the Fund‟s financial performance to changes in interest rates can be illustrated as follows:

2015 2016 impact 2015 impact

Interest income

Interest rate increase of 100 basis points 141 137

Interest rate decrease 100 basis points (141) (137)

Interest expense

Interest rate increase of 100 basis points - -

Interest rate decrease 100 basis points - -

The following methods and assumptions were applied in the determination of the interest rate sensitivity analysis: The main assumption utilised was that the interest rate would not change by more than a percent either way, due to stability in overall rates in the country in the preceding financial year. The method applied to determine the interest rate sensitivity analysis has the following limitations that may result in the information not being fully representative of the actual future results: Market rate volatility may impact the interest rates more than expected. No changes were made to the methods and assumptions applied, in the prior year, to the determination of the sensitivity analysis. 7.3.3 Collateral held and other credit enhancements The Fund holds collateral in the form of housing units which may be disposed of in order to mitigate the interest rate risk it is exposed to. No credit enhancements are held which mitigate such risk.

7.4 Financial assets pledged as security No financial assets have been pledged as security for liabilities in the current or prior year. 7.5 Defaults and breaches No defaults or breaches occurred in the current or prior year.



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7.6 Credit quality of financial assets carried at amortised cost/fair value 7.6.1 Method of determining credit quality of other current financial assets: The credit quality of trade and other receivables from exchange transactions are determined and monitored with reference to historical payment trends. Accordingly the credit quality of the customers included in the balance of trade and other receivables from exchange transactions is determined internally through application of the Fund's own credit policy. Based on the evaluation of the historical payment trends, customers included in the balance are categorised into groups as per note 1.6 in the financial statements.

7.6.1.1 Impairment disclosures for other current financial assets carried at amortised cost / fair value

Reconciliation between gross and net balances

Gross Balances Provision for Doubtful

Debts

Net Balance

R’000 R’000 R’000

Rental debtors 1368 (1351) 17

Individual loan debtors 35 (35) -

Property debtors 30 (30) -

Total 1 433 (1 416) 17

8. RELATED PARTIES

The only related party of the Fund is the Free State Department of Human Settlements, since the Fund falls under the administration of the Department, and since the Fund shares the same accounting officer. The following represents the total closing balance of amounts due by / (to) the Department. These amounts are not guaranteed. Once the Fund ceases to operate, the bank balance will be surrendered to the Department to cover the payable amount. All related party transactions are at arm‟s length.

Statement of Financial Position Note 2015/16 2014/15 R’000 R’000

Loan Account included in Accounts Payable 5 (12 996) (12 167) The above loan is included to represent the amount owed to the Department of Human Settlements upon closure of the Fund. There are no terms or conditions attached to this loan. In addition, the value of services provided to the Housing Fund by the Department of Human Settlements includes the usage of the BAS system as well as the use of services of the employees of the Department to administer the Fund. The value of these services cannot be reliably estimated.



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FREE STATE HOUSING FUND NOTES TO THE FINANCIAL STATEMENTS AT 31 MARCH 2016 9. REVENUE 2015/16

R’000 2014/15 R’000

From exchange transaction: Rent income 106 57 Property sold Rebates Finance income-Bank Finance income- Debtors

(135) 831

-

(232) 725 -

Total 802 550

From non-exchange transactions: None in the current or previous year.