annual report - provincial government · 2016-04-26 · annual report for 2014/15 financial year...

Coastal Region:Redefine Towers320 Dr Pixley KaSeme StreetDurban4000

031–319 3600

Northern Region:Legislative Administration BuildingKing Dinuzulu HighwayUlundi3838

035–874 2697A

NN

UA

L REPO

RT FIN

AN

CIA

L YEAR

2014/15

ANNUAL REPORT

FINANCIAL YEAR 2014/15

Vote 8

ANNUAL REPORT


ANNUAL REPORT


Department of Human Settlements

Province of KwaZulu-Natal

Vote 08

Annual Report

2014/2015 Financial Year

Annual Report for 2014/15 Financial Year

Vote 8: Department of Human Settlements Province of KwaZulu-Natal2

Table of Contents

PART A: GENERAL INFORMATION .....................................................................................................................................................5

1. DEPARTMENT GENERAL INFORMATION ...........................................................................................................................6

2. LIST OF ABBREVIATIONS/ACRONYMS ................................................................................................................................7

3. FOREWORD BY THE MEC ...................................................................................................................................................... 10

4. REPORT OF THE ACCOUNTING OFFICER ............................................................................................................ 12

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT ......................................................................................................................... 21

6. STRATEGIC OVERVIEW ........................................................................................................................................................... 22

6.1. Vision ........................................................................................................................................................................................ 22

6.2. Mission ..................................................................................................................................................................................... 22

6.3. Values ...................................................................................................................................................................................... 22

7. LEGISLATIVE AND OTHER MANDATES ............................................................................................................................ 23

8. ORGANISATIONAL STRUCTURE ......................................................................................................................................... 32

9. ENTITIES REPORTING TO THE MEC ................................................................................................................................. 32

PART B: PERFORMANCE INFORMATION ..................................................................................................................................... 33

1. AUDITOR-GENERAL’S REPORT: PREDETERMINED OBJECTIVES ..................................................................... 34

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE ..................................................................................................... 34

2.1 Service Delivery Environment ......................................................................................................................................... 34

2.2 Service Delivery Improvement Plan.............................................................................................................................. 34

2.3 Organisational environment ............................................................................................................................................. 36

2.4 Key policy developments and legislative changes .................................................................................................. 36


Vote 8: Department of Human SettlementsProvince of KwaZulu-Natal 33

3. STRATEGIC OUTCOME ORIENTED GOALS ................................................................................................................... 36

4. PERFORMANCE INFORMATION BY PROGRAMME .................................................................................................... 37

4.1 Programme 1: Administration .......................................................................................................................................... 37

4.2 Programme 2: Housing Needs, Research and Planning ...................................................................................... 40

4.3 Programme 3: Housing Development .......................................................................................................................... 43

4.4 Programme 4: Housing Assets Management, Property Management............................................................. 49

5 TRANSFER PAYMENTS ............................................................................................................................................................ 51

5.1. Transfer payments to public entities ............................................................................................................................. 51

5.2. Transfer payments to all organisations other than public entities ...................................................................... 51

6 CONDITIONAL GRANTS ........................................................................................................................................................... 53

6.1. Conditional grants and earmarked funds received.................................................................................................. 53

7 DONOR FUNDS ............................................................................................................................................................................ 54

7.1. Donor Funds Received ...................................................................................................................................................... 54

8 CAPITAL INVESTMENT ............................................................................................................................................................. 54

8.1. Capital investment, maintenance and asset management plan......................................................................... 54

PART C: GOVERNANCE ......................................................................................................................................................................... 55

1. INTRODUCTION ........................................................................................................................................................................... 56

2. RISK MANAGEMENT .................................................................................................................................................................. 56

3. FRAUD AND CORRUPTION .................................................................................................................................................... 57

4. MINIMISING CONFLICT OF INTEREST.............................................................................................................................. 57

5. CODE OF CONDUCT ................................................................................................................................................................. 58

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES ...................................................................................................... 58



7. PORTFOLIO COMMITTEES..................................................................................................................................................... 59

8. SCOPA RESOLUTIONS ............................................................................................................................................................. 67

9. PRIOR MODIFICATIONS TO AUDIT REPORTS .............................................................................................................. 81

10. INTERNAL CONTROL UNIT ..................................................................................................................................................... 85

11. INTERNAL AUDIT AND AUDIT COMMITTEES ................................................................................................................. 85

12. AUDIT COMMITTEE REPORT ................................................................................................................................................ 87

PART D: HUMAN RESOURCE MANAGEMENT ............................................................................................................................ 91

1. INTRODUCTION ........................................................................................................................................................................... 92

2. OVERVIEW OF HUMAN RESOURCES............................................................................................................................... 92

3. HUMAN RESOURCES OVERSIGHT STATISTICS ......................................................................................................... 95

PART E: FINANCIAL INFORMATION ...............................................................................................................................................135

1. REPORT OF THE AUDITOR-GENERAL ...........................................................................................................................136

2. ANNUAL FINANCIAL STATEMENTS ..................................................................................................................................139

FINANCIAL INFORMATION – KWAZULU-NATAL HOUSING FUND .................................................................................235

1. REPORT OF THE AUDITOR-GENERAL ...........................................................................................................................236

2. ANNUAL FINANCIAL STATEMENTS ..................................................................................................................................244

General InformationPart A:



1. DEPARTMENT GENERAL INFORMATION

NAME: KwaZulu–Natal Department of Human Settlements

PHYSICAL ADDRESS: Old Mutual Building

203 Church Street

Pietermaritzburg

3201

POSTAL ADDRESS: Private Bag X9157

Pietermaritzburg

3200

TELEPHONE NUMBER: +27 33 392 6400

FAX NUMBER: +27 33 392 6454

EMAIL ADDRESS: [email protected]

WEBSITE ADDRESS: www.kzndhs.gov.za



2. LIST OF ABBREVIATIONS/ACRONYMS

ACTT Anti-Corruption Task Team

AFS Annual Financial Statement

AGSA Auditor-General of South Africa

AO Accounting Officer

APP Annual Performance Plan

AR Annual Report

ASGISA Accelerated and Shared Growth Initiatives for South Africa

BBBEE Broad Based Black Economic Empowerment

BASA Banking Association of South Africa

BEE Black Economic Empowerment

BNG Breaking New Ground

CARC Cluster Audit and Risk Committee

CDW Community Development Worker

CETA Construction Education and Training Authority

CFO Chief Financial Officer

CG Conditional Grant

CIDB Construction Industry Development Board

CIP Comprehensive Infrastructure Plans

COGTA Cooperative Governance and Traditional Affairs

CoP Community of Practice

CRU Community Residential Unit

DDG Deputy Director-General

DBSA Development Bank of Southern Africa

DFI Development Finance Institutions

DLA Department of Land Affairs

DHS Department of Human Settlements

DORA Division of Revenue Act

EEDBS Enhanced Extended Discount Benefit Scheme

EPRE Estimates of Provincial Revenue and Expenditure

EPWP Expanded Public Works Programme

FET Further Education and Training

FLISP Finance Linked Individual Subsidy Programme

FTE Full Time Equivalent

GIAMA Government Immovable Assets Management Act

GRAP Generally Recognised Accounting Practice

GWEA Government Wide Enterprise Architecture



HSP Housing Sector Plans

HDA Housing Development Agency

HDP Housing Development Plans

HOD Head of Department

HSDG Human Settlements Development Grant

HH Households

IA Implementing Agent

IDP Integrated Development Plan

IGRFA Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005)

ISDS Integrated Sustainable Development Strategy

ISUP Informal Settlement Upgrade Programme

IT Information Technology

ITB Ingonyama Trust Board

IRDP Integrated Residential Development Programme

IRDS Integrated Rural Development Strategy

IYM In Year Monitoring

KZNDHS KwaZulu-Natal Department of Human Settlements

KZNPA KwaZulu-Natal Provincial Administration

MBASA Master Builders Association of South Africa

MEC Member of Executive Council

MDG Millennium Development Goals

MI Mortgage Insurance

MINMEC Ministers and Members of Executive Council

MIG Municipal Infrastructure Grant

MHDP Municipal Housing Development Plans

MTEF Medium Term Expenditure Framework

MTSF Medium Term Strategic Framework

MYHD Multi Year Housing Development Plan

NCA National Credit Act

NDHS National Department of Human Settlements

NDP National Development Plan

NHBRC National Home Builders Registration Council

NHFC National Housing Finance Corporation

NSDA Negotiated Service Delivery Agreement

NSDP National Spatial Development Plan

NURCHA National Urban Reconstruction & Housing Agency

NUSP National Upgrading Support Programme

OPSCAP Operational Capital



OSS Operation Sukuma Sakhe

OTP Office of the Premier

PAIA Promotion of Access to Information Act, No. 2 of, 2000

PARC Provincial Audit and Risk Committee

PPC Provincial Planning Commission

PFMA Public Finance Management Act

PGDS Provincial Growth and Development Strategy

PGDP Provincial Growth and Development Plan

PHDP Provincial Housing Development Plan

PIAS Provincial Internal Audit Service

PLS Project Linked Subsidy

PSEDS Provincial Spatial Economic Development Strategy

PHP Peoples Housing Process

RDP Reconstruction and Development Programme

RHAF Rental Housing Association Fund

RHLF Rural Housing Loan Fund

SABS South African Bureau of Standards

SANS South African National Standard

SAQA South African Qualification Authority

SCM Supply Chain Management

SDIP Service Delivery Improvement Plan

SHA Social Housing Association

SHE Safety Health and Environmental

SHF Social Housing Foundation

SHI Social Housing Institution

SHRA Social Housing Regulatory Authority

SHSS Sustainable Human Settlement Strategy

SIP Strategic Infrastructure Program

SITA State Information Technology Agency

SMME Small Medium and Micro Enterprises

SOE State Owned Enterprises

SLA Service Level Agreement

TR Treasury Regulations

UAMP User Asset Management Plan

VPN Virtual Private Network



The Honourable R. R. Pillay, MPLMember of the Executive Council for

Human Settlements and Public WorksKwaZulu-Natal

3. FOREWORD BY THE MEC

The South African Constitution enshrines the fundamental right of access to adequate housing. This together with other key mandates makes it mandatory for the Department to progressively achieve, within available resources,

the realization of this right. It is further incumbent upon the Department to ensure that the provision of human settle-ments is integrated and socially, environmentally and economically sustainable.

This Department is clearly committed to the above mandate and has, as part of its service delivery initiatives, endeavored to ensure the construction of 29,312 houses, the servicing of 4,013 sites and effecting 3,832 transfer of houses during the 2014/15 financial year. The Department continues to address rural housing development in the Province with the provision of 15,944 housing units.

Thirty-four percent of the total human settlement development grant expenditure has been expended towards achieving the national outcomes as well as the Millennium Development Goals, with specific reference to the eradication of slums, although this is still a major challenge facing this Province. A contributing factor to this is insufficient funding for bulk infrastructure. In order to address this issue, the Department has established an Inter-Sectoral Forum comprising relevant sector role-players to find solutions in addressing the issues relating to bulk infrastructure. Likewise, land invasions on both state-owned and private land have also impacted negatively on planned human settlement developments. The Department has developed an Anti-Land Invasion Strategy to ultimately ensure that this issue is addressed in a strategic and holistic manner.



I am also pleased to announce that the Department approved the Military Veterans Housing Programme in February 2015, intended to address the plight of the military veterans. A total of 170 housing units are to be built during the 2015/16 financial year towards this initiative.

The Department has further focused its attention on catalytic human settlement development initiatives. Eight projects have been identified to make an impact on human settlement transformation in the Province as well as restructuring the apartheid spatial planning of the past which created huge disparities in levels of services delivered. During the forthcoming years, the roll-out and implementation of these projects will be prioritized.

These achievements are clearly attributed to strong leadership, commitment and the dedication of Team Human Settlements, who continue to strive to meet the needs of the poorest in the Province despite the challenges experienced. This is clearly evidenced by the fact that this Province has for the last two years received the much coveted National Govan Mbeki Award for the Best Performing Province in the delivery of human settlements. Other accolades achieved were: Best Metropolitan Municipality in Housing Delivery: eThekwini Municipality; Best Level 1 Accredited Municipality: Hibiscus Coast Municipality; Best Level 2 Accredited Municipality: uMhlathuze Municipality; Merit Award: Most successful student from the scholarship programme; Merit Award: Rental Housing Tribunal and Merit Award: Farm Worker Assistance Project. This Department has undoubtedly established itself as a respected role player in the housing sector.

In conclusion, I wish to reiterate my gratitude to the Head of Department, and the team of officials who are central to the execution and progressive achievement of our Constitutional obligations.

Honourable Mr R.R. Pillay, MPLMEC for Human Settlements and Public Works



4. REPORT OF THE ACCOUNTING OFFICER

• Overview of the operations of the department

The vision of this Department, i.e. creating sustainable settlements, aligns to the two main objectives of the Habitat Declaration on Sustainable Human Settlements, namely the right to basic shelter as a human right and the need for settlements to be socially, environmentally and economically sustainable. This vision further emphasizes the policy objective of the Comprehensive Plan on Human Settlements of 2004 that delivery should be more demand-driven and that housing and other instruments should respond to the needs of people in their specific situations. In order to achieve this vision the Department is committed to integrated and sustainable human settlements through the provision of comprehensive housing opportunities.

In pursuit of meeting its key objectives, a synopsis together with a graphic illustration of the achievement of the service delivery information relating to housing delivery in the Province since 2010/11 is reflected hereunder:

Service Delivery Indicator Annual Actual Delivery

2010/11 2011/12 2012/13 2013/14 2014/15 Increase %

Houses Completed 21,189 22,112 25,940 29,151 29,312 0,6

Sites Serviced 4,028 5,426 6,063 2,790 4,013 43,8

Transfers Completed 2,634 5,251 2,690 2,336 3,832 64,0

Beneficiary Approvals 21,447 38,554 57,188 41,791 52,089 24,6

Ms G. M. Apelgren-NarkedienAccounting Officer

KwaZulu-Natal Department of Human Settlements



The Department has continoursly increased housing delivery outlook since the 2013/14 financial year. The same trend has beebn maintained in the current financial year where the increase in the delivery is noted in all the four main sector indicators. The bar-chart below reflects the 2014/15 increase in service delivery:

The total amount allocated for the KZN Human Settlements Conditional Grant for the 2014/15 financial year was R3,509,045,000 mainly for the key delivery of a targeted 32,043 units and the installation of services on 8,311 sites, transfer of 3,777 properties and approval of 13,546 beneficiaries. The bulk of the grant was apportioned to the 11 district municipalities that make up the province in accordance to population size, housing need and planned housing projects for the financial year as per the outcome of 2011 Population Census conducted by Statistics South Africa. Therefore eThekwini and uMgungundlovu received a larger portion of the grant, while Amajuba and Harry Gwala Districts received the least. Reflected hereunder is the percentage of budget allocation per district:



As at the end of the 2014/15 financial year, the department had managed to spend an impressive R3, 512,902,000, 34% of this is linked to the national and provincial priority of eradicating informal settlements. The total of 29,312 units was delivered leaving 2,731 units as the variance. This shortfall can be accounted for by the work that is currently on the ground in the form of 1,547 foundations, 2,262 wall-plates and 182 undergoing internal finishes. The majority of houses reported in the 2014/15 financial year were delivered under the rural housing subsidy, where a total of 15,944 housing units has been built.

In light of KZN being predominantly a rural province this service delivery effort clearly supports the rural development initiative as per the National Development Plan as well as the 5 key priorities of the ruling party. Also 4,013 sites were serviced leaving a variance of 4,298. Bulk infrastructure challenges which are widespread throughout the province remain a hurdle leading to the under-delivery of sites. In order to address the issue, the Department (in tandem with other partners) is working towards finding a permanent or long term solution. This is done through the Intersectoral Forum led by the Provincial Human Settlements Deputy Director General. The target for the transfer of proper houses was exceeded by 55 and the target for beneficiary approvals was exceeded by an impressive 38,543 approvals. The over-performance in beneficiary approvals is greatly attributed to improved communication with municipalities on submission timelines and proper vetting of documents submitted by applicants. Reflected hereunder is the delivery and expenditure per district.

Harry Gwala



District

2014/15

Target

Sites

2014/15

Actual

Sites

2014/15

Target

Units

2014/15

Actual

Units

2014/15

Target

Other

2014/15

Actual

Other

2014/15

Target

Transfers

2014/15

Actual

Transfers

2014/15

Target

Beneficiaries

2014/15

Actual

Beneficiaries

2014/15

Budget

R’000

2014/15

Expenditure

R’000

Amajuba 380 395 1, 510 934 548 - 482 - 335 1,288 86,737 110,080

eThekwini 4, 427 1, 646 7,737 5,545 3,033 4,794 2,257 1,558 2,754 10,591 720,798 698,845

Harry Gwala - - 695 1,000 165 40 5 - 1,037 3,989 108,344 97,366

Ilembe 480 432 1,840 3,741 151 - 70 17 406 1,560 265,128 346,460

Ugu 1, 070 460 2,545 3,001 142 40 84 - 1,459 5,612 376,935 303,656

uMgungundlovu 250 592 4,063 3,758 629 247 414 941 2,111 8,116 546,734 480,896

uMkhanyakude 240 - 2,318 2,421 400 - - - 872 3,353 225,861 227,499

Umzinyathi 1,164 488 2,975 1,539 320 - 120 - 817 3,142 211,819 209,622

Uthukela - - 1,940 1,188 265 212 100 622 677 2,603 175,380 131,681

uThungulu - - 5,090 4,537 533 - 175 - 1 781 6,847 456,447 567,229

Various - - - - 3,000 3,529 - 639 608 2,336 157,397 176,309

Zululand 300 - 1,330 1,648 800 399 70 55 690 2,653 177,465 163,259

Total 8,311 4,013 32,043 29,312 9,986 9,261 3,777 3,832 13,546 52,089 3,509,045 3,512,902

• Overview of the financial results of the department:

– Departmental receipts The table below shows the revenue budget for the Department of Human Settlements for 2014/15, and the

actual revenue collected for the year.

Departmental receipts

2014/2015 2013/2014

EstimateActual

Amount Collected

(Over)/Under Collection

Estimate ActualAmount

Collected

(Over)/Under Collection

R’000 R’000 R’000 R’000 R’000 R’000

Tax Receipts - - - - - -

Casino taxes - - - - - -

Horse racing taxes - - - - - -

Liquor licences - - - - - -

Motor vehicle licences - - - - - -

Sale of goods and services other than capital assets 477 813 (336) 434 434 -

Transfers received - - - - - -

Fines, penalties and forfeits - - - - - -

Interest, dividends and rent on land 20 573 (553) 30 4,142 (4,112)

Sale of capital assets 480 49 431 300 19 281

Financial transactions in assets and liabilities 853 27,485 (26 632) 775 4,836 (4,061)

Total 1,830 28,920 (27,090) 1,539 9,431 (7,892)



The department collected revenue totalling R28,920 million in 2014/15, substantially exceeding the revenue target by R27,090 million. Revenue in respect of the following categories was higher than budgeted:

• Sale of goods and services other than capital assets was collected at R813,000, exceeding a budget of R477,000. This category relates to revenue received for rental of government buildings, parking, commission on PERSAL deductions and sale of tender documents. This over-collection is mainly due to sale of tender documents being higher than projected.

• Revenue collected against Interest, dividends and rent on land was largely due to interest received in respect of funds transferred to the Social Housing Regulatory Authority (SHRA) for the implementation of social housing projects. The over-collection was also as a result of interest charged on outstanding staff debts which were previously written off.

• The substantial over-collection against Transactions in financial assets and liabilities of R27,485 million is mainly due to the following:– An amount of R2,5 million was from money recovered by the Special Investigation Unit (SIU) from finalised

fraud cases. – An amount of R364,000 was recovered from the Department of COGTA for the services rendered in respect of

cleaning, security, water and lights for the office accommodation occupied in the Durban offices. – The department also recovered R707,000 from Brocon/Miands Joint Venture for the overpayment of foundations

for Vryheid Ward disaster project under the original agreement of 140 units.– An amount of R22,6 million was recovered in respect of unused funds pertaining to the Meadowlands Social

Housing Project.

The remaining revenue balance was recovered from staff debts.

• Programme Expenditure

Programme Name2014/2015 2013/2014

Final Appropriation

Actual Expenditure

(Over)/ Under

Expenditure

Final Appropriation

Actual Expenditure

(Over)/Under

Expenditure

R’000 R’000 R’000 R’000 R’000 R’000

Administration 184,394 182,847 1,547 165,093 163,986 1,107

Housing Needs, Research and Planning 14,955 14,223 732 14,590 14,115 475

Housing Development 3,510,564 3,532,420 (21,856) 3,300,532 3,270,961 29,571

Housing Asset Management, Property Management 148,530 143,688 4,842 168,155 167,940 215

Total 3,858,443 3,873,178 (14,735) 3,648,370 3,617,002 31,368

Under expenditure of R1,547 million in Administration is mainly due to the delays in the filling of budgeted vacant posts caused by challenges in constituting short listing and interview panels as available members are often over committed in their activities.

Under expenditure of R732,000 in Housing Needs, Research and Planning is mainly attributed to Goods and Services against transport and subsistence primarily due to a delay in the implementation of capacity building training relating to training for co-operatives at Vulindlela Rural project and emerging contractors where training is done by internal staff.

Over expenditure of R21,856 million in Housing Development is mainly due to some projects progressing faster than anticipated and being ahead of the development programme. Also, more sub-contractors were appointed to fast-track the work. In addition, some implementing agents (IA) had increased their capacity on the ground in order to address the urgent need of housing in various projects. e.g. KwaNyuswa, Vulamehlo, Mbambangalo housing projects, Machunwini Rural, KwaMashabane Rural, Dube housing projects, Matimatolo Rural, etc.



Under expenditure of R4,842 million in Housing Assets Management, Property Management is mainly attributed to the fact that the department could not transfer funds to the eThekwini Metro in respect of rectification of pre-1994 housing stock (properties owned by the municipality) in Lamontville, R293 towns, etc. due to the department not receiving the reconciliation report from the eThekwini Metro on funds previously transferred relating to this project.

From Amount R’000 To Amount

R’000

Programme 2: Housing Needs, Research and Planning Programme 3: Housing Development

Sub-programme: Administration Sub-programme: Administration

Compensation of Employees 692 Compensation of Employees 554

Sub-programme: Planning Goods and Services 542

Compensation of Employees 8 Households 83

Sub-programme: Research Payment for financial assets 21

Compensation of Employees 140

Sub-programme: Policy

Compensation of Employees 160

Goods and Services 200

Total 1,200 Total 1,200

Reason for the virement

(a) Virement from Programme 2: Housing Needs, Planning and Research under the following sub-programmes:

– Administration – Compensation of Employees amounting to R692,000; due to non- filing of Deputy Manager post in this component which was budgeted.

– Policy – Compensation of Employees amounting to R160,000; due to the delays in filing of Architect post.

– Planning – Compensation of Employees amounting to R8,000; due to overestimations in certain items under this sub-programme.

– Research – Compensation of Employees amounting to R140,000, due to delays in filing of Personal Assistant post.

– Planning – Goods and Services amounting to R200,000, as a result of the provision that was made for the filling of the Deputy Manager where budget was provided in various items under this classification to cater for operational costs. The decision was taken for this post to be filled on contract basis utilizing OPSCAP.

This saving was moved to Programme 3: Housing Development, Administration in the following economic classification:

– Compensation of Employees amounting to R554,000 due to implementation to job evaluations result relating to the Inspectors which was under estimated.

– Goods and Services amounting to R542,000 due to payment of the resettlement costs for newly appointed officials in Northern and Inland region e.g. PA to the Regional Manager in Northern region, Project Information Officers in Inland region, etc.

– Transfers and subsidies to: Households amounting to R83,000 due for the payment of leave gratuity for staff exit costs which cannot be budgeted accurately due to its nature.

– Payment for financial assets amounting to R21,000 for the debts written off as per the approval by Accounting Officer.



• A description of the reasons for unauthorised, fruitless and wasteful expenditure and the amounts involved as well as steps taken to address and prevent a recurrence.

During the year under review, the department incurred unauthorised expenditure in Programme 3: Housing Development. This relates to the expenditure pressures due to some projects progressing faster than anticipated being ahead of the development programme. Also, additional sub-contractors were appointed to fast-track work. Furthermore, some implementing agents (IA) had increased their capacity on the ground in order to address the urgent need of housing in various projects.

Future plans of the department

The strategic thrust of this Programme is to ensure that housing development is undertaken in an integrated and sustainable manner. The promotion and implementation of sound planning principles is therefore pivotal for the creation of sustainable human settlements with strengthened capacity and the effective development of policies that support and facilitate housing delivery. Strategic mandates that govern this programme include amongst others; the PSEDS, PGDP), the comprehensive plan “Breaking New Ground” for housing delivery and Outcome 8.

The programme provides for the facilitation and integration of housing sector planning in all sectors, education of stakeholders in housing sector planning, alignment of the housing budget with the current and future housing needs, and the capacitation of housing stakeholders for housing delivery through mentorship and training.

One of the focal areas of this Programme is to ensure there is a fully functional project pipeline that is aligned to the national and provincial priorities as well as the abovementioned mandates. This ensures that the project implementation process can be accelerated to expedite housing delivery. Increased attention does however need to be placed on the reviewing of Integrated Development Plans (IDP) and Housing Sector Plans (HSP) as these plans are seen as vital to the successful forward planning of sustainable human settlements. Improving the functionality of the housing forums and improved interactions with Implementing Agents (IAs) will also strengthen relations with stakeholders thereby enhancing the effective planning of sustainable human settlements.

Of significant importance to the PGDP is the Small Town Regeneration Programme which seeks to make identified nodal areas more competitive to stimulate economic development and opportunities. This would invariably lessen the burden of migration to the more urban areas. In conjunction with the project team led by the Department of Cooperative Governance and Traditional Affairs (COGTA), projects have been approved for the respective small towns that would also greatly contribute this initiative, i.e. The Pomeroy Integrated Residential Development project within the Msinga Municipality; and the Indumo Projects relating to rental units for professional employees as well as a rural housing project within the Jozini Municipality.

As part of innovative planning, this Programme has conceptualised the “mega catalytic” human settlement development initiatives. It is also investigating other investment options such as the private-public partnerships as well as investments from other departments for projects within communities so as to increase the financial sustainability of human settlement development projects.

It is intended that these projects will make a huge impact on human settlement transformation as well as restructuring the apartheid spatial planning of the past which created huge discrepancies in levels of service delivered and locational inefficiencies.

The NDP advocates the transformation of such settlements into equitable efficient spaces where citizens live in close proximity to work opportunities, but at the same time have access to social and infrastructural amenities.

Projects that fall within the catalytic category are projects that will have integration and impact criteria that target the following:

– Critical Regional Mass– Site and Project Selection Innovation– Built Environment Capacity– Supply and Demand



– Integration Criteria– Regional– Demographic/Deprivation Profile– Economic Activity

Based on the above criteria, the following “mega catalytic” human settlement development initiatives have been conceptualised:

• Ethembeni Integrated Residential Development Project• Hyde Park Integrated Residential Development Project• Signal Hill Integrated Residential Development Project• Greater Driefontein Integrated Residential Development Project

• Public Private Partnerships– The department has no public private partnerships.

• Discontinued activities / activities to be discontinued – Activities discontinued/to be discontinued: The Individual Non-Credit Linked Subsidy Programme for R0-

R3500 has been discontinued. – Reasons for discontinuance: The programme was not effectively servicing the secondary market or

“growing” the housing delivery market. – Effect on the operations of, and service delivery by the department – None – as the operations and service

delivery is geared at the FLISP middle income target group – Financial implications of each discontinued activity – None – as no budget was assigned to the programme

for 2015/16 Financial Year.

• New or proposed activities

• The assistance to Military Veterans is a transversal programme of government. In 2006 the Housing MINMEC approved the adjustment of the housing subsidy scheme qualification criteria to facilitate access to housing for military veterans. An extra-parliamentary war veteran, in the context of the programme is an individual who had been trained and engaged in any instrument of war, aimed at destructive activities against the former apartheid regime.

520 units will be built over the MTEF period with 170 units to be developed within the 2015/16 financial year.

The programme is aimed at providing the Military Veterans with descent housing to live in. The department of Military Veterans is providing an addition portion to the subsidy to ensure that their members receive better and bigger quality houses as a compensation for their struggle.

• Electronic Leave Management System

– Reasons for new activities The current manual process of leave application and management has been identified to be both inefficient

and prone to abuse and possible fraud. A relatively routine process, like leave application was found to have lag times that could be considerably improved by automating the processes. Further risks related to the possibility of leave forms not being sent to HR either intentionally resulting in leave fraud or unintentionally due to forms going astray due to the series of steps and number of people involved in the process.

– Effect on the operations of the department Increase in productivity and reduced errors through the elimination of manual data entry Reduction in fraud related activities More efficient tracking and performance measurement Reduction in the amount of paper usage and associated printing costs. Full and detailed logs available in the system for audit purposes



– Financial implications of each new activity Cost is R1,1 million

• Supply chain management– There were no unsolicited bids.

All our bids are advertised publicly to ensure that the system is fair and transparent. Bid committees have been appointed and training has been provided by Provincial Treasury to ensure that they perform their functions efficiently and effectively. At the beginning of the financial year a departmental procurement plan is developed indicating goods and services that will be procured in that financial year. The procurement plan is linked to the budget and it is approved by the Head of Department. Bids are only invited for goods and services that are in the Departmental Procurement Plan.

The following challenges have been experienced: – Cancellation of meetings because of unavailability of quorums due to over commitment of members.

To address this challenge we have appointed second members who will be invited in the absence of members.

– Service providers not meeting the compliance issues e.g. registration with provincial treasury, submission of tax clearance certificates etc. This is covered in the briefing sessions that are held with service providers before the closing of bids.

• Gifts and Donations received in kind from non-related parties

– No gifts or donations were received in kind from non-related parties (refer annexure 1E of the annual financial statements).

• Exemptions and deviations received from the National Treasury

– No exemptions or deviations were received from National Treasury by the Department.

• Events after the reporting date– There are no material facts or circumstances, which may have an effect on the understanding of the financial

state of affairs, not addressed elsewhere in this report Include the nature of any events (adjusting and non-adjusting), favourable and unfavourable that occurred after the reporting date and the date of approval of the Annual Financial Statements.

• Approval and sign off

The Annual Financial Statements set out on pages 139 to 234 have been approved by the Accounting Officer.

__________________________________________Ms G. M. Apelgren-NarkedeinAccounting Officer KwaZulu-Natal Department of Human SettlementsDate:



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

To the best of my knowledge and belief, I confirm the following:

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 2015.

Yours faithfully

__________________________________________Ms G. M. Apelgren-NarkedeinAccounting Officer KwaZulu-Natal Department of Human SettlementsDate:



6. STRATEGIC OVERVIEW

CORE VALUES/PRINCIPLES FOR THE DEPARTMENT OF HUMAN SETTLEMENTS

Commitment to performance We will continue to motivate our staff to work hard and efficiently through recognition while providing service excellence at all times

Trust and honesty We provide service impartially, fairly, equitably and without bias

Transparency and consultation We will be open about our day to day activities, how much our department receives, how that money is spent. This information will be available to the public. Annual reports, strategic plans, service commitment charters, etc. will be made available to the public.

Integrity Integrity means doing the right thing at all times and in all circumstances, whether or not anyone is watching. It takes having the courage to do the right thing, no matter what the consequences will be. Building a reputation of integrity takes years.

Accountability Public sector administration of land delivery processes should be open and accountable

Together Breaking New Ground to achieve decent, integrated and sustainable human settlement patterns.

To deliver suitably located housing opportunities and security of tenure over the next five years through collaborative partnership, legislative planning processes and empowerment of women in construction.

The department subscribes to the Principles of Batho Pele and embraces the following key values:• Commitments to performance;• Trust and honesty;• Transparency and consultation;• Integrity; and • Accountability.

Vision

Mission

Values



7. LEGISLATIVE AND OTHER MANDATES

Constitutional mandates

The following sections of the Constitution are relevant to the Department:Chapter 2 This Chapter deals with the Bill of Rights and the department will have to ensure that the necessary steps are undertaken to ensure that these rights are not compromised.

Chapter 3 This Chapter deals with co-operative government and intergovernmental relations. The department will have to ensure that we observe and adhere to the principles in the Chapter and that we conduct our activities within the parameters of the Chapter.

Chapter 6 As a public institution, the department will have to report to the Provincial Legislature as and when required.

Chapter 10 As a public institution, the department will have to ensure that it is administered in according with the provisions of this Chapter which deals with public administration.

Chapter 13 As a public institution, the department will have to ensure that it is administered in according with provisions of this Chapter which deals with financial matters.

Schedule 4 This section sets out the areas of provincial legislative competence.

Legislative mandates

LEGISLATION MANDATE

1. Constitution of the Republic of South Africa 108 of 1996

Chapter 2: Bill of Rights:

Section 26:

Everyone has the right to have access to adequate housing. The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realization of this right. No one may be evicted from their home, or have their home demolished, without an order of court made after considering all the relevant circumstances. No legislation may permit arbitrary evictions.

2. Housing Act 107 of 1997 Part 1: Section 2:

The National, provincial and local spheres of government must give priority to the needs of the poor in respect of housing development, consult meaningfully with individuals and communities affected by housing development. Ensure that housing development provides a wide choice of housing and tenure options as is reasonably possible which is economically, fiscally, socially and financially affordable and sustainable, is based on integrated development planning and is administered in a transparent, accountable and equitable manner, and upholds the practice of good governance.



LEGISLATION MANDATE

3. Housing Consumer Protection Measures Act 95 of 1998

Chapter 1: Section 3:

The objects of the Council is to (a) to represent the interests of housing consumers by providing warranty

protection against defects in new homes;(b) to regulate the home building industry;(c) to provide protection to housing consumers in respect of the failure of home

builders to comply with their obligations in terms of this Act;(d) to establish and to promote ethical and technical standards in the home

building industry;(e) to improve structural quality in the interests of housing consumers and the

home building industry(f) to promote housing consumer rights and to provide housing consumer

information;(g) to communicate with and to assist home builders to register in terms of this

Act;(h) to assist home builders, through training and inspection, to achieve and to

maintain satisfactory technical standards of home building; (i) to regulate insurers; and (j) in particular, to achieve the stated objects of this section in the subsidy

housing sector.

4. Rental Housing Act 50 of 1999 Chapter 2:

Section 1:

Provides that Government must promote a stable and growing market that progressively meets the latent demand for affordable rental housing among persons historically disadvantaged by unfair discrimination and poor persons, by the introduction of incentives, mechanisms and other measures that

(i) improve conditions in the rental housing market;

(ii) encourage investment in urban and rural areas that are in need of revitalization and resuscitation; and

(iii) correct distorted patterns of residential settlement by initiating, promoting and facilitating new development in or the redevelopment of affected areas

5. Sectorial Titles Act, 1986(95 of 1986, as amended by Act 24 & 29 of 2003)

The Act provides for the division of buildings into sections and common property and for the acquisition of separate ownership in sections coupled with joint ownership in common property.

The Act further provides for:

a) The control of certain incidents attaching to separate ownership in sections and joint ownership in common property;

b) The transfer of ownership of sections and the registration of sectional mortgage bonds over, and real rights in sections;

c) The conferring and registration of rights in, and the disposal of, common property;

d) The establishment of bodies corporate to control common property and for that purpose to apply the rules; and

e) The establishment of a sectional titles regulation board.



LEGISLATION MANDATE

6. Prevention of Illegal Eviction and Unlawful Occupation of Land Act 19 of 1998

Provides that: In circumstances of an eviction, an organ of state may institute proceedings for the eviction of an unlawful occupier from land which falls within its area of jurisdiction, except where the unlawful occupier is a mortgagor and the land in question is sold in a sale of execution pursuant to a mortgage, and the court may grant such an order if it is just and equitable to do so, after considering all the relevant circumstances, and if

(a) the consent of that organ of state is required for the erection of a building or structure on that land or for the occupation of the land, and the unlawful occupier is occupying a building or structure on that land without such consent having been obtained or

(b) it is in the public interest to grant such an order

It further provides that: An organ of state contemplated in subsection may before instituting such proceedings, give not less than 14 days’ written notice to the owner or person in charge of the land to institute proceedings for the eviction of the unlawful occupier.

7. Home Loan and Mortgage Disclosure Act of 2000

Provides that an office of disclosure must be established in order to deal with financial institutions financial statements. The work incidental to the performance of the functions of the Office must be performed by a secretariat consisting of officials of the Department designated for that purpose by the Minister. The Director-General of Housing is the accounting officer for the Office and must cause the installation of the necessary financial controls and management measures by the Office to ensure full accountability for expenses incurred by the Office.

8. Disestablishment of South African Trust Limited Act of 2002

Provides that: All rights and assets of the Company, including the administrative, financial and other records of the Company, vest in the National Housing Finance Corporation (as per the Housing Act), all obligations and liabilities of the Company now vest in the Government as part of the national debt. Thus the Government must meet these obligations and liabilities.

9. Constitutional Court judgment of 2000, on the enforceability of social and economic rights (Government of the Republic of South Africa and Others v Grootboom and Others)

The court held that the state was obliged to take positive action to meet the needs of those living in extreme conditions of poverty, homelessness or intolerable housing. The interconnectedness of the rights and the Constitution as a whole had to be taken into account in interpreting the socio-economic rights and in particular, in determining whether the state had met its obligations in terms of them. The court held that the national government bore the overall responsibility for ensuring that the state complied with the obligations imposed on it by section 26. The land program adopted by the metropolitan council, on the face of it, met the obligation of the state towards persons in the position of the respondents to the extent that the national housing program did not. The existence of the program was, however, only the starting point. Effective implementation of it required at least adequate budgetary support by national government. As at the date of the launch of the application, the state had not been meeting the obligation imposed on it by section 26 within the relevant area. In particular, the programs adopted by the state fell short of the section’s requirements, in that no provision was made for relief to categories of people in desperate need. The Constitution obliged the state to act positively to ameliorate these conditions. This obligation was to devise and implement a coherent and coordinated program, designed to provide access to housing, healthcare, sufficient food and water and social security to those unable to support themselves and their dependents. The State also had to foster conditions to enable citizens to gain access to land on an equitable basis. Those in need had a corresponding right to demand that this be done. However, section 26 (and also section 28) did not entitle the respondents to claim shelter or housing immediately on demand.



LEGISLATION MANDATE

10. KwaZulu-Natal Housing Act, 1998 (12 of 1998 as Amended)

Chapter 4 provides that:

The Department shall be responsible for the administration of the bank account of the Fund and manage and co-ordinate housing development in the Province. The department shall, subject to national and provincial housing policy and after consultation with the Minister, on behalf of the Provincial Government (a) undertake projects;(b) maintain, sell, or lease dwellings and other immovable property;(c) notwithstanding anything to the contrary in any law and either with the prior

consent of the owner or following the expropriation of such land, perform such work and undertake such projects on privately owned land as the Minister may, subject to such terms and conditions as he or she may determine, approve;

(d) determine provincial policy in respect of housing development;(e) promote the adoption of provincial legislation to ensure effective housing

delivery; and (f) prepare and maintain a multi-year plan in respect of the execution in the

province of every national and provincial housing programme, which is consistent with a national and provincial housing policy.

11. Housing Development Schemes for Retired Persons Act, 1998( 65 of 1988) as amended by 20 of 1998

The Act amends the Housing Development Schemes for Retired Persons Act, 1988, so as to amend the definition of “housing development scheme”, to provide that land subject to a housing interest may be occupied only by a retired person or the spouse of a retired person, and to repeal section 10 of the Act.

12. National Building Regulations and Building Standards Act 103 of 1977

Part A, A1 provides that: The plans and particulars in respect of any building to be erected by or on behalf of the State shall be accompanied by a certificate, signed by the head of the State Department concerned or an officer designated by him, setting out in full details as to the respect in which such erection will not comply with the requirements of these regulations.

13. Construction Industry Development Board Act 38 of 2000

Section 5 (1) States that the Board must within the framework of the procurement policy of Government promote the standardization of the procurement process with regard to the construction industry.

14. Preferential Procurement Policy Framework Act 5 of 2000

Provides that an organ of state must determine its preferential procurement policy and the specific goals therein may include contracting with persons, or categories of persons, historically disadvantaged by unfair discrimination on the basis of race, gender or disability.

15. Social Housing Act 16 of 2008 Section 32 makes provision that an agreement entered and concluded between the Regulatory Authority and Provincial Governments which sets out the respective roles and responsibilities of the Regulatory Authority and the Provinces in respect of social housing, specifies the proposed restructuring zones, specifies the process to approve, allocate and administer capital grants as contemplated in the social housing investment plan, and also sets out the process for determination of annual social housing programme and institutional subsidy allocation, the approvals process and timelines and the payments process and timelines.

16. Housing Development Agency Act 23 of 2008

In terms of Section 5 the following provision is made: The Minister may in consultation with the relevant MEC, where there is lack of capacity in any organ of state to identify, acquire, hold, develop and release land for residential and community purposes for the creation of sustainable human settlements.



LEGISLATION MANDATE

17. National Environmental Management Act, 1998 (107 of 1998) as amended by Act 8 of 2004

Provides for the cooperative environmental governance by establishing principles for decision making on matters affecting the environment. Section 16 provides that each provincial government must ensure that the relevant provincial environmental implementation plan is complied with by each municipality within its province and that municipalities adhere to the relevant environmental implementation and

management plans, and the principles of this Act in the preparation of any policy, programme or plan, including the establishment of integrated development plans and land development objectives.

18. Communal Land Rights Act 11 of 2004

Makes provision for: a) The legal security of tenure by transferring communal land, including

KwaZulu-Natal Ingonyama land, to communities, or by awarding comparable redress;

b) Conducting of a land rights enquiry to determine the transition from old order rights to new order rights;

c) The democratic administration of communal land by communities; to provide for Land Rights Boards; and

d) The co-operatives performance of municipal functions on communal land.

19. Communal Property Associations Act 28 of 1996

This Act enables communities to form juristic persons, to be known as communal property associations in order to acquire, hold and manage property on a basis agreed to by members of a community in terms of a written constitution. This Act prescribes the type of communities, who qualify, the registration process which needs to be followed as well as the rights, obligations and duties of parties once the juristic person has been established.

20. Deeds Registries Act 47 of 1937 The Act deals with the administration, registration of land and state land and details the procedures which need to be followed during same.

21. Extension of Security of Tenure Act 62 of 1997

The Act promotes:

a) long term security of tenure for occupiers of land, where possible through the joint efforts of occupiers, landowners. and government bodies;

b) extending the rights of occupiers whilst giving due recognition to the rights, duties and legitimate interests of owner; and

c) regulating the eviction of vulnerable occupiers from land in a fair manner.

22. Land Administration Act 2 of 1995 Makes provision for the delegation of powers and the assignment of the administration of laws regarding land matter to the provinces as well as the creation of uniform land legislation.

23. Expropriation Act, 1951 as repealed by Act 63 of 1975

The Act provides for the expropriation of land and other property for public and certain other purposes.

24. State Land Disposal Act 48 of 1961 This Act provides for the disposal of certain state land and to prohibit the acquisition of state land by prescription.



Policy and programme mandates

NAME OF POLICY MANDATE

1. Informal Settlement Upgrading Strategy for KwaZulu-Natal

A key objective of the Strategy is to give effect to the KwaZulu-Natal Elimination and Prevention of Re-Emergence of Slums Act (Act No. 6 of 2007). The purpose of this Act is to provide for: ‘the progressive elimination of slums in the Province of KwaZulu-Natal; measures for the prevention of the re-emergence of slums and the upgrading and control of existing slums.’ The Act obliges all

Municipalities to assess the status of informal settlement and to plan accordingly. An additional and overriding objective for the KZN Department is however also to address and comply with the National Departments Outcome 8 National Development Agreement which places a high priority on the upgrading of Informal Settlements with access to basic services and secure tenure.

In addition to this the more specific objectives of the Strategy include:

• enhancing the Housing Sector Planning process by including a Slum Clearance Programme. • promoting sector alignment in terms of IDP, Integrated Sustainable Human Settlements, Area

Based Planning, Spatial Restructuring.• developing an informal settlement plan of action and to implement it together with the affected

municipalities. • promoting community participation in formulation and implementation of Slum Clearance

Programme.

2. The Integrated Sustainable Rural Development Strategy, November 2000

The strategy is designed to realize a vision that will attain socially cohesive and stable rural communities with viable institutions, sustainable economies and universal access to social amenities, able to attract and retain skilled and knowledgeable people, who equipped to contribute to growth and development.

Section 1: Outlines evaluation of international approaches to rural development, which have hinged around inadequate local capacity and tendencies to excessive centralization of decision making.

Section 2 presents a characterization of rural South Africa. It identifies those that are widely associated with rural conditions around the world.

Section 3 outlines the legal and policy framework for rural development in South Africa and outlines some achievements in the period 1994 to 2000.

Section 4 presents the elements behind the vision of the ISRDS namely; rural development, sustainability, integration and the rural safety net.

Section 5 presents the operational approach of the ISRDS i.e. build immediately on existing programmes of government through a well coordinated, bottom-up approach to rural local economic development.

Section 6 highlights some complementary measures to support the ISRDS namely; human resource development and capacity building, land reform, community based income generation projects, social assistance and safety nets and rural finance.

Section 7 presents the proposed institutional arrangements, which will operate in the political and operational areas.

Section 8 identifies five implementation elements of the strategy which comprises of; institutional arrangements, establishment of an information and knowledge base, development of planning and monitoring systems, establishing mechanisms of coordination and stakeholder mobilization.

3. The National Housing Code, 2009

The Code sets the underlying policy principles, guidelines and norms and standards which apply to Government’s various housing assistance programmes introduced since 1994 and updated. It also identifies various housing subsidy instruments available to assist low income households to access adequate housing. It further provides for the qualification criteria per subsidy instrument and the process that needs to be followed in order to access the specific instrument.




4. The National Spatial Development Perspective, 2006

The document comprises of:

• A set of principles and mechanisms for guiding infrastructure investment and development decisions

• A description of the spatial manifestations of the main social, economic and environmental trends that should form the basis for a shared understanding of the national space economy

• An interpretation of the spatial realities and the implications for government intervention.

In order to contribute to the broader growth and development policy objectives of Government the document advocates the following five principles :

Principle 1: Rapid economic growth that is sustained and inclusive is a pre-requisite for the achievement of other policy objectives, among which poverty alleviation is key.

Principle 2: Government has a constitutional obligation to provide basic services to all citizens (e.g. water, energy, health and educational facilities) wherever they reside.

Principle 3: Beyond the constitutional obligation identified above, government spending on fixed investment should be focused on localities of economic growth and/or economic potential in order to gear up private-sector investment, to stimulate sustainable economic activities and to create long-term employment opportunities.

Principle 4: Efforts to address past and current social inequalities should focus on people, not places.

Principle 5: In order to overcome the spatial distortions of apartheid, future settlement and economic development opportunities should be channelled into activity corridors and nodes that are adjacent to or that link the main growth centres.

5. Building capacity of housing stakeholders (especially municipalities)

The Housing Act 107 of 1997 provides that all reasonable and necessary steps to support municipalities in the exercise of their power and the performance of their duties in respect of housing development.

Section (2) (e) state that National and Province must support and strengthen the capacity of municipalities to manage their own affairs to exercise their powers and performs their duties in respect of housing development.

The Housing Accreditation programme is meant to support the municipalities.

6. Outcome 8: Medium Term Strategic Framework 2014-2019

The framework focuses on policy and funding reforms to achieve the following:

• 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 coordinationIn order to achieve the vision of sustainable human settlements and improved quality of household life the DHS drives effective programmes to achieve the following:

• Adequate housing1 and improved quality living environments • A functionally equitable residential property market • Enhanced (institutional) capabilities for effective coordination of spatial investment decisions.




7. Provincial Growth and Development Plan

Strategic Objective 3.4: Sustainable human settlements

The provision of a house remains an important part of human settlements it is now common cause that livable human settlements require decent planning that involves: designing a safe environment, infrastructure that allows and enables economic activity, delivery of services and social facilities as well as good maintenance capacity. This desired human settlement has been slow to materialize. The causes are many and varied, yet not insurmountable. This intervention is about finding an appropriate institutional mechanism to achieve a coordinated and aligned service delivery programme, with DOHS being the driver of this institutional mechanism as they are most acutely affected by the unco-ordinated service delivery response.

Proposed interventions are as follows:

Intervention 3.4.a: Establishment of a joint provincial forum addressing integrated development planning

A human settlement in particular requires co-ordination such that houses, water, electricity and sanitation are an immediate part of the same product, whilst community life is also enabled by provision of schools, and other social facilities. It is not clear why this co-ordination is not possible despite it having been long recognized to be a requirement. This intervention is about providing a model for this alignment and co-ordination of government efforts for improved delivery of sustainable Human Settlement. This forum will use as it departure point the Provincial Spatial Development Framework, which has identified KZN’s areas of opportunity and intervention.

Intervention 3.4.b: Densification of settlement patterns

This intervention recognizes that the current settlement patterns are not conducive to cost effective service delivery or environmentally sustainable settlements. This is as a result of dispersed and fragmented settlement patterns that require people to travel long distance to access economic opportunities or lesser density per hectares that are more expensive to service. This intervention is about proposes an alternative densification model that uses current housing instruments to achieve greater urban densities and more coherent integrated settlements around identified emerging nodes.

Intervention 3.4.c: Transformation of Informal Settlements

This intervention is about providing housing opportunities to people at the low end of the housing market. It proposes to transform these informal settlements via the business instruments of: Informal Settlements Upgrade; Integrated Residential Development Programme; and Enhanced Peoples Housing Programme. In this way, people living in informal settlements have greater opportunity to access tenure of housing, economic and social opportunities.

Intervention 3.4.d: Develop provincial strategy and plan to address housing Gap Market

This intervention seeks to provide housing subsidy for people, who earn between (R3,501 - R15,000) in the gap market to allow for purchase of property. These properties ranges from R450,000 to R700,000 which is entry level housing and usually difficult to obtain bonds. The intervention will include a targeted inclusion of gap housing in all new housing projects aligned to the target contained in national outcome 8. The current housing instrument of Financially Linked Intervention Subsidies (FLISP) is being used to address this housing challenge.

Intervention 3.4.e: Expand the Social Housing Programme and Rental Programme

This intervention is to address the current lack of housing opportunities for low end housing market entrants. The intervention seeks to provide well located accommodation on a rental basis for income brackets between (R3,501 - R7,500). The current housing instruments being used to achieve this are the Social Housing Programme, the Institutional Subsidy Programme and the Community Residential Units Programme. These instruments purchase or build units for rental purposes as well as refurbish previous hostels.




8. National Development Plan

Chapter 8: Transforming Human Settlements

The objectives include the following:

• Strong and efficient spatial planning system, well integrated across the spheres of government. • Upgrade all informal settlements on suitable, well located land by 2030.• More people living closer to their places of work.• More jobs in or close to dense, urban townships.

Actions:

• Reforms to the current planning system for improved coordination.• Develop a strategy for densification of cities and resource allocation to promote better located

housing and settlements.• Introduce spatial development framework and norms, including improving the balance between

location of jobs and people.• Conduct a comprehensive review of the grant and subsidy regime for housing with a view to

ensure diversity in product and finance options that would allow for more household choice and greater spatial mix and flexibility.

• Introduce mechanisms that would make land markets work more effectively for the poor and support rural and urban livelihoods.

9. Breaking New Ground - A Comprehensive Plan for the Development of Sustainable Human Settlements

The specific objectives include:

• Accelerating the delivery of housing as a key strategy for poverty alleviation• Utilizing provision of housing as a major job creation strategy• Ensuring property can be accessed by all as an asset for wealth creation and empowerment• Leveraging growth in the economy• Combating crime, promoting social cohesion and improving quality of life for the poor• Supporting the functioning of the entire single residential property market to reduce duality

within the sector by breaking the barriers between the first economy residential property boom and the second economy slump.

The Department will enhance its contribution to spatial restructuring by:

• Progressive Informal Settlement Eradication• Promoting Densification and Integration• Enhancing Spatial Planning• Enhancing the location of new housing projects• Supporting Urban Renewal and Inner City Regeneration• Developing social and economic infrastructure• Enhancing the Housing Product



8. ORGANISATIONAL STRUCTURE

9. ENTITIES REPORTING TO THE MEC

The KwaZulu-Natal Housing Fund reports to the KwaZulu-Natal Department of Human Settlements. The department does not have any other public entities reporting to it directly, however it works closely with the public entities reporting to the National Department of Human Settlements and has a number of service level agreements to guide the services they provide to the department. Such entities include the National Home Builders Registration Council (NHBRC), National Housing Financial Corporation (NHFC), Social Housing Regulatory Authority (SHRA), National Urban Reconstruction and Housing Agency (NURCHA) and Rental Association Fund (RHAF).

Honourable MEC for Human Settlements

Mr R. R. PillayMPL

Accounting OfficerMs G. M. Apelgren-

Narkedien

Chief DirectorateExecutive Support

Mrs R. Soodeyal

DDG: Chief Financial Officer

Mrs S. Pillay

DDG: Chief Operations Officer

Mr M. Zungu

DDG: Chief Business Officer

(Vacant)

CHIEF DIRECTORATE: Human Capital Management

Ms O. Anderson(Acting)

CHIEF DIRECTORATE: Planning and Development

Mr L. Khoza

CHIEF DIRECTORATE: Sustainable Human

Settlements

Mr L. Pato

CHIEF DIRECTORATE: Property Management

Mrs N. Chiluvane(Acting)

CHIEF DIRECTORATE: Corporate Services

(Vacant)

CHIEF DIRECTORATE: Budgetary Services

Mr P. Appanah (Acting)

DIRECTORATE: Rental Housing Tribunal

Mr W. Ziqubu


Vote 8: Department of Human SettlementsProvince of KwaZulu-Natal

Performance InformationPart B:



1. AUDITOR-GENERAL’S REPORT: PREDETERMINED OBJECTIVES

The AGSA currently performs certain 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 137 of the Report of the Auditor-General, published as Part E: Financial Information.

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE

2.1 Service Delivery EnvironmentTo assist users of the annual report to gain an understanding of the challenges, successes and other factors that might impact on a department’s performance, it is necessary to provide the user with an overview of the context and environment within which the department operated to implement its strategic plan and annual performance plan.

The overview should include:• A balanced overview of the service delivery environment in which it operated during the reporting period

under review and not merely focus on factors that might be offered as ‘mitigating circumstances’ to support the department’s delivery record.

• Comment on services delivered directly to the public, problems encountered by the department when providing the relevant services, and what corrective steps were/are to be taken in dealing with such problems.

• A description of any significant developments, external to the department, that may have impacted either on the demand for the department’s services or on the department’s ability to deliver those services.

2.2 Service Delivery Improvement PlanThe department has completed a service delivery improvement plan. The tables below highlight the service delivery plan and the achievements to date.

Main services and standards

Main services Beneficiaries Current/actual standard of service

Desired standard of service

Actual achievement

Resolved rental housing complaints and disputes

Tenants and Land Lords

Within 90 days Within 90 days Target: 1,380Achievements: 2,322 cases

Provide subsidy beneficiary approval

Service Beneficiaries The regular processing of beneficiaries application within 15 days of receipt in subsidy component for approval

The regular processing of beneficiaries application within 15 days of receipt in subsidy component for approval

Target: 13,546Achievements: 50,058



Main services Beneficiaries Current/actual standard of service

Desired standard of service

Actual achievement

Provide maintenance of properties or rental accommodation

Tenant, employees and owners of the properties

Emergency maintenance repairs within 3 hours. Priority repairs for maintenance within 48 hours and routine maintenance repairs within 10 days

Emergency maintenance repairs within 3 hours. Priority repairs for maintenance within 48 hours and routine maintenance repairs within 10 days

Target: 3,000 unitsAchievements: 3,529

Create rental housing offices within local municipalities

Municipalities Within 6 Months Within 6 Months Target: 4Achievements: 6

Provide housing consumer educations

Service beneficiaries Within 6 Months Within 6 Months Target: 6,000Achievements: 14,201

Provide municipal support and accreditation levels

Municipalities Provide and approve level within 24 months

Provide and approve level within 24 months

Target: 7Achievements: 7

Batho Pele arrangements with beneficiaries (Consultation, access etc.)

Current/actual arrangements Desired arrangements Actual achievements

Road Shows Radio talk show and newsletters Increase awareness on know your services right campaign

Izimbizo, Exhibitions Summits, Project launches and Handover, Implementing Agency meeting, Municipalities Forum meeting, OSS

Izimbizo, Summits, Project launches and Handover, Implementing Agency meeting Municipalities Forum meeting, Help desk

Improve determination of need and expectation of the ender user of services

Consumer Management Forum Access on TV service in departmental offices, information branches. Stakeholders forum Meeting.

Improve service delivery and improve awareness

Service delivery information tool

Current/actual arrangements Desired arrangements Actual achievements

Road Shows Radio talk show and newsletters Increase awareness on know your services right campaign

Izimbizo, Exhibitions Summits, Project launches and Handover, Implementing Agency meeting Municipalities Forum meeting, OSS

Izimbizo, Summits, Project launches and Handover, Implementing Agency meeting Municipalities Forum meeting, Help desk

Improve determination of need and expectation of the end user of services

Consumer Management Forum Access on TV service in departmental offices, information branches. Stakeholders forum Meeting.

Improve service delivery and improve awareness



Complaints mechanism

Current/actual complaints mechanism

Desired complaints mechanism Actual achievements

Suggestion Boxes, and customer satisfaction surveys

Call centre report Improve quality responses and customer care services

Complaints Handling system and Procedures

Complaints Response Register Improve quality time line in the handling of complaints

Utilization of toll-free numbers to report fraud and corruption

Utilization of toll-free numbers to report fraud and corruption

Reduce fraud and corruption practices

Training of employees in handling of complaints fast and efficiently

Computerised complaints system and complains forms

Improve quality responses and customer care services

2.3 Organisational environment Integrated planning and service delivery is a central policy of government. The organisational environment in which such integration should occur is highly constrained by a lack of skills and capacity in all spheres of government, a lack of alignment of the planning programmes of the provincial and municipal spheres and a lack of clarity with regard to the allocation of functions and related funding between the spheres of government.

Within the department’s organisational environment the major challenge that exists is in respect of human resource constraints. The availability of sufficiently skilled technical, engineering, professional and managerial staff in the marketplace willing to work for government has meant that the department has had to be innovative in ensuring that the professional and managerial skills required for delivery are available.

The outsourcing of certain professional functions where skills are lacking in the department has greatly assisted in ensuring delivery. The department has a programme for developing skills within the organisation but retention of high calibre staff is extremely difficult.

2.4 Key policy developments and legislative changesThe enhanced Norms and Standards in respect of the dwellings are based on the requirements of the 2011 revised National Building Regulations; South African National Standard (SANS) 10400 XA- Energy Usage in Buildings. During November 2013, the previous MINMEC approved revised Ministerial National Norms and Standards for energy efficient houses to be delivered through the National Housing Programmes in compliance with the NBR SANS 10400 XA. In addition to the energy measures, MINMEC also approved the conversion of the Ready Board electrical installation to a fully-fledged basic electrical installation. The aforementioned adjustments to the Norms and Standards lead to a total increase in the subsidy quantum of 58,2%.

3. STRATEGIC OUTCOME ORIENTED GOALSThe department impacts on strategic outcome oriented goal 8. Information in this regard is provided in Part B: Programme: 3.



4. PERFORMANCE INFORMATION BY PROGRAMME

4.1 PROGRAMME 1: ADMINISTRATION

Strategic Objectives

The strategic objective of the Administration Programme is to provide overall management in the Department in accordance with all applicable Acts and policies.

This Programme therefore undertakes:

• To provide overall strategic leadership, coordination and management of strategies towards the achievement of sustainable human settlements for all people in the Province of KwaZulu-Natal,

• Administration of the Department in line with good governance practices, and

• To formulate and/or review policies and strategies in line with legal prescripts and national and provincial priorities.

The Sub-Programme within this Programme includes Corporate Services which is to provide corporate support. Operational support in terms of financial management, transport, procurement, human resources, information systems, communication and auxiliary services is therefore undertaken by this sub-programme.

In order to reinforce and facilitate the efficient functioning of the department, in line with the effective allocation and management of the resources and in compliance with all prescripts and taking cognizance of the Cabinet Legkotla Resolutions, as well as Outcome 12, the following key initiatives have been identified:

1. To reduce the vacancy rate;

2. To verify Persal data;

3. To ensure that the approved organizational structure, is re-aligned and implemented in accordance with the new mandates;

4. To review/update the Government Wide Enterprise Architecture;

5. To finalise the amendment of the Eradication and Prevention of the Re-Emergence of Slums Act; and

6. To ensure that the Fraud Prevention Plan is implemented.



Strategic objectives

Programme 1: Administration

Strategic objectivesActual

Achievement 2013/14

Planned Target

2014/2015

Actual Achievement

2014/2015

Deviation from planned

target to Actual Achievement for

2014/2015

Comment on deviations

To provide strategic leadership to the housing delivery programmes (%of houses delivered in respect of targets set annually)

29,151100%

32,043

91.48%

29,312

(8.52%)(2,731)

In addition to the reported service delivery in terms of houses, the department also has considerable work in progress which consists of both foundations and wall-plates.

Reconciliation between service delivery indicators and Conditional Grant (% of conditional grant spent versus allocation)

99%R3,304,575

100%

R3,509,045

107.31%

R3,512,902

7,31%

(R3,857)

Target has been achieved

Performance indicators


Performance Indicator

Actual Achievement

2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015


target to Actual Achievement for 2014/2015


Maximum vacancy rate of 5%

5% 2% [11/577] 6% (4%)Funds were moved from vacant funded posts to critical unfunded posts.

Persal data verified 100% 100% 59% (41%) Department is awaiting

verification from SAQA.

Approved organizational structure

1 1 1 - Target has been achieved.

Reviewed/ updated GWEA in Place

1 1 1 - Target has been achieved.

Fraud Prevention Plan Implemented

New Indicator 1 1 - Target has been achieved.



Strategy to overcome areas of under performance

The department has not met the planned target of a vacancy rate of <5% in the financial year 2014/15. This under-performance can be attributed to the moving of funds to critical unfunded posts. One of the prominent provisions of the cost containment agenda is the emphasis on shifting funds from non-critical vacant funded posts to critical but non funded posts. As a result the department could not meet its target of a vacancy rate of below 5%. The department recorded a deviation of -4% which we are confident we will be able to correct in the near future. Already the department has embarked on a drive to fill critical posts.

The department has also not achieved its set target of 100% verification of persal data. Instead only 59% of the data was verified leaving a deficit of 41%. The South African Qualification Authority (SAQA) is tasked with the mandate to provide verification services on the qualifications of employees as reflected on persal, the authority has to date only verified 59% and has indicated that they are yet to complete the verification of 41% of the data.

Linking performance with budgets

Sub-programme expenditure

Administration

2014/2015 2013/2014

Final Appropriation

Actual Expenditure

(Over)/ Under Expenditure

Final Appropriation

Actual Expenditure

(Over)/Under Expenditure

R’000 R’000 R’000 R’000 R’000 R’000

Corporate Services 184,394 182,847 1,547 165,093 163,986 1,107

Total 184,394 182,847 1,547 165,093 163,986 1,107



4.2 PROGRAMME 2: HOUSING NEEDS, RESEARCH AND PLANNINGThe main purpose of this programme is to facilitate and undertake housing delivery planning. The key activities undertaken by this Programme include:

• Research and quantify the housing needs in the province with the aim of developing appropriate interventions;

• Research and identify appropriate technologies in the housing delivery process;• Develop policies and guidelines to facilitate implementation of the sustainable human settlement

programme;• Ensure that all stakeholders are capacitated and involved in the continuous appraisal of housing delivery,

systems and their improvement;• Facilitate and integrate sustainable human settlement planning with other sectors;• Educate stakeholders in sustainable human settlement planning and implementation; • Capacitate stakeholders for housing delivery through mentorship and training; and• Conduct feasibility studies to determine appropriateness of human settlement projects.

Of significant importance to this Programme are key strategies including but not limited to:

• The Provincial Spatial Economic Development Strategy;• The Provincial Growth and Development Strategy;• The Provincial Growth and Development Plan;• The Sustainable Human Settlement Strategy (SHSS);• The Informal Settlement Eradication Strategy and• The Social Rental Strategy

These strategies are to address housing matters in an integrated, holistic and co-ordinated manner.


Programme 2: Housing Needs, Research and Planning

Strategic objectives Actual Achievement

2013/14

Planned Target2014/2015

Actual Achievement

2014/2015



2014/2015


Accelerate the provision of planned housing opportunities (number of units in the housing pipeline).

86,000 84,408 76,900 (7,508)

The reduction was due to the slowing down of Stage 1 invoices. This was because of the financial constraints faced by the department.






Actual Achievement

2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015




Number of policy guidelines approved

7 6 2 (4)

The unit currently has four policy guidelines which have been submitted to the MEC’s Office and these are awaiting signature for approval.

A Multi-year Housing Development Plan /APP developed by October

1 1 1 - Target has been Achieved.

Number of planned human settlement (housing) developments based on IDP’s and National and Provincial Priorities approved

6 9 29 20

Target has been exceeded. The Department has taken the decision to ensure that all project are contained in the municipal IDP’s are aligned to National and provincial priorities such as the NDP and PGDP.

Number of Municipalities capacitated and supported with regard to human settlement (housing) development planning

15 8 47 39

Target has been exceeded due to the fact that the department now has Planners based at the district level. The one on one engagement with the respective municipalities is more frequent, thus enhancing co-operation. Housing forums are attended on a monthly basis to discuss and agree upon new pipe line projects as well as those currently being implemented.

Number of research projects approved

4 5 4 (1)

The unit currently has two research approvals which have been submitted to the MEC’s Office and these are awaiting signature for approval.

Number of research papers completed

6 5 8 3

Target has been exceeded. This was due to the additional ad-hoc research projects sanctioned during the financial year.





Actual Achievement

2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015




Confirmed project pipeline based on IDPs and/or Housing Sector Plans (HSP)

1 1 2 1Target has been exceeded. Amendments were made to the original project pipeline.

Number of projects aligned to with Small Towns Regeneration Programme


Number of municipalities capacitated on accreditation


The policy and research unit has commenced the work on a number of policy guidelines. However a number of these documents have not yet obtained the necessary approval from the MEC. This is largely due to the fact that the MEC has to carefully review, analyse and recommend amendments to these document so that they speak to the direction the department has adopted. Once the review process has been completed the documents will then be made public and all stakeholders shall have access to them accordingly.

The Planning unit has exceeded most of the performance targets that were set for the financial year 2014/15. The unit has been advised to fine tune its performance reporting process, particularly in relation to ensuring that supporting documents are consistently signed and are up to date.


The Programme continues to work timeously and diligently to ensure that proposed policy documents and research projects are conducted within a properly planned framework. The Department has recruited a number of research professionals including the Senior Manager: Policy and Research. These measures are expected to improve the operational efficiency of the Programme going forward.



Housing Needs, Research and Planning

2014/2015 2013/2014

Final Appropriation

Actual Expenditure

(Over)/ Under

Expenditure

Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000

Administration 401 338 63 1,605 1,374 231

Policy 3,561 3,539 22 3,769 3,695 74

Planning 3,714 3,400 314 3,184 3,124 60

Research 7,279 6,946 333 6,032 5,922 110

Total 14,955 14,223 732 14,590 14,115 475



4.3 PROGRAMME 3: HOUSING DEVELOPMENT

The purpose of the Programme is to provide individual subsidies and housing opportunities to beneficiaries in accordance with the housing policy.

The bulk of the programme funding is allocated from the HSDG which comprises financial, incremental, social and rental as well as rural interventions. The housing programmes as classified for housing delivery are as follows: Individual, Institutional, Rural, Rectification, Emergency Housing, Integrated Residential Development Programme (IRDP), and Informal Settlements Upgrade Programme (ISUP).

In consolidating the Business Plan for 2014/15 and MTEF delivery targets the guiding principles include: the achievement of Outcome 8 targets; National Priority Projects such as the Cornubia Integrated Residential Development Project in Ethekwini; Strategic Infrastructure Programme (SIP) which is a National Programme; Integration of Operation Sukuma Sakhe into the normal departmental budgeting process which promotes an integrated approach to human settlements delivery thereby demonstrating the creation of sustainable human settlements in the province, Implementation of the National Development Plan (NDP) and KZN Provincial Growth and Development Plan, Responding to emergencies resulting from the disasters that are being experienced in the province and Rectification of projects where assessments have been undertaken by NHBRC.

Strategic objectives:

Programme 3: Housing Development


Actual Achievement

2013/14

Planned Target

2014/2015

Actual Achievement

2014/2015




To reduce the provincial Housing Backlog (census 2011 figure [742,019] less houses built)

686,928 654,749 657,607 (2,858)

The target for houses was not achieved. This was mostly due to budgetary constraints, which manifests in a delay in the supply chain management processes for the appointment of top structure contractors, resulting in a shortfall in the total number of units completed.

The department through concerted efforts along with various stakeholders continues to “chip away” at the inherited housing and service delivery backlog. The department has done considerably well in various aspect of the housing service delivery mandate. However the department has found other human settlements delivery aspect to be a challenge. These include the performance of the department in providing housing opportunities for the gap market, the acquisition of suitable land for the development of human settlements projects and the installation of services in urban projects.

The major hindrance in this regard relates to the severe shortage of bulk infrastructure in various municipalities around the province. As a result the performance of various Implementing agents that are contracted to deliver serviced units on behalf of the department is compromised.






Actual Achievement

2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015

Deviation from planned target

to Actual Achievement for 2014/2015


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

29,151 32,043 29,312 (2,731)

The target was not achieved. This was mostly due to budgetary constraints, which manifests in a delay in the supply chain management processes for the appointment of top structure contractors, resulting in a shortfall in the total number of units completed.

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

539 2,570 1,997 (573)

Delivery on sites continues to be plagued by challenges in the provision of bulk infrastructure by municipalities.

Number of Finance -Linked Subsidy subsidies approved and disbursed

74 300 197 (103)

There has been a noticeable increase in delivery relative to the previous financial year. Awareness of this programme with the largest stakeholders, i.e. The financial institutions under BASA is being driven aggressively in KZN and it is anticipated that this drive together with the policy revision in 2014/15 will see delivery on targets in 2015/16. This subsidy instrument is going to be prioritised in the KZN market. The Department has engaged all the Banks as key stakeholders to ensure that every affordable housing market bond granted is equated to a FLISP subsidy where all qualifying criteria are met.

Number of households connected to basic services as part the Informal Settlement Upgrade Programme

(Incl PLS)

2,195 5,741 2,016 (3,725)


Number of Hectares of well-located land acquired and/or released for residential development

1,373 3,469 779 (2,690)

Due to the financial constraints the budget for the acquisition of land was reduced which led to under-performance in the instrument.

Number of work opportunities created through related programmes New Indicator 5,531 6,656 1,125

Target has been exceeded. The Department has no control on the number of job opportunities created since this is determined by the workload on site.





Actual Achievement

2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015




Integrated Residential Development Programme -number of Units 242 2,055 442 (1,613)

Under -performance this instrument is mostly due to budgetary constraints, which manifests in a delay in the Supply chain management processes for the appointment of top structure contractors, resulting in a shortfall in the total number of units completed.

Individual Non Credit Linked Subsidies

Number of houses completed

1,502 1,020 1,075 55

Target has been exceeded. Individual beneficiary approvals were high due to the accessing of this subsidy instrument being utilised optimally. As the applications don’t have to be subjected to the requirements of the NCA. Also, this high approval rate was made possible by the regular interaction between the relevant stakeholders viz beneficiaries, conveyances and staff. Full time manning of the help desk in the department assisted greatly in ensuring that beneficiaries and conveyances were familiarized with department’s requirements resulting in fewer rejections.

Number of targeted persons days of work New Indicator 923,016 991,530 68,514

Target has been exceeded. The Department has no control on the number of days worked since this is determined by the workload on site.

Number of target FTEs (Full Time Equivalent) New Indicator 5,399 4,311 (1,088)

Target has not been achieved. The Department has no control on the number of days worked since this is determined by the workload on site.

Disaster Management Rehabilitation (inclusive of Sukuma Sakhe):

Number of houses completed 1,693 1,744 632 (1,112)

Under delivery in this instrument is attributed to the use of emerging contractors in the implementation of projects within this instrument. The geographical spread of the projects within this instrument and the number of units within each location also have the negative impact on the delivery. For instance, allocation of units versus the subsidy allocated to deliver on these units is in most cases proving to be financially non-viable.

Rectification(1994- 2002 stock):

Number of Units rectified 738 1,270 455 (815)

Under-performance in this instrument is mostly due to budgetary constraints, which manifests in a delay in the Supply chain management processes for the appointment of top structure contractors, resulting in a shortfall in the total number of units completed. .





Actual Achievement

2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015




Rural Housing (Inclusive of Farm Worker Programme):

Number of houses completed

14,418 14,076 15,944 1,868

Target has been exceeded. The high number of beneficiaries approved under this instrument led to more delivery.

All subsidy instruments:

Number of properties transferred

2,336 2,212 3,193 981

Target has been exceeded. A new team of conveyancers has been appointed by the Department to fast-track the delays in transfers. This led to over-performance in this instrument.

Number of beneficiaries approved 41,791 13,546 52,089 38,543

Target has been exceeded. The processing of Beneficiary Approvals at Subsidy Administration has been streamlined to the extent that batches for approval are affected weekly. Hence, any applications received are processed timeously resulting in over-achievement of the annual target.

Number of serviced sites delivered per human settlements (housing) programme

2,790 8,311 4,013 (4,298)


Number of houses completed (Excluding Rectification)

29,151 32,043 29,312 (2,731)


Outcome 8

Project Linked Programme: Number of Houses completed

2,357 - 8 8Target has been exceeded. Units completed were from prior financial years from stalled projects.

Informal Settlements Upgrade: Number of Houses completed

5,727 9,788 7,407 (2,381)


Integrated Development Programme: Number of Houses completed

242 2,055 442 (1,613)

Under-performance in this instrument is mostly due to budgetary constraints, which manifests in a delay in the Supply chain management processes for the appointment of top structure contractors, resulting in a shortfall in the total number of units completed.





Actual Achievement

2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015




Peoples Housing Process: Number of houses completed

2,619 2,800 3,058 258

Target has been exceeded. The Vulindlela Project exceeded the projections for the financial year due to the acceleration of the development programme.

Social Housing Programme (Utilizing the institutional subsidy instrument): Number of Units completed

47 260 440 180Target has been exceeded. Appointment of new contractors increased delivery in this instrument.

Implementation of FLISP: Number subsidies approved and disbursed

74 300 197 (103)

There has been a noticeable increase in delivery relative to the previous financial year. Awareness of this programme with the largest stakeholders, i.e. The financial institutions under BASA is being driven aggressively in KZN and it is anticipated that this drive together with the policy revision in 2014/15 will see delivery on targets in 2015/16. This subsidy instrument is going to be prioritised in the KZN market. The Department has engaged all the Banks as key stakeholders to ensure that every affordable housing market bond granted is equated to a FLISP subsidy where all qualifying criteria are met.

Community Residential Units: Number of units upgraded

472 247 109 (138)

The eThekwini Metro exhausted funding that was tranched by the Province. As a result, they could not pay the contractors to complete all the units that were anticipated to be completed in the current financial year.

Access to land and densification: Number of Hectares of well-located land acquired and/or released for residential development (hectares’)

1,373 3,469 779 (2,690)

Due to the financial constraints the budget for the acquisition of land was reduced which led to under-performance in the instrument.

The overall performance outlook for the department is encouraging. The service delivery target for new units completed was exceeded. A number of key instruments came to the fore and contributed significantly to this feat. These include the rural housing programme, the informal settlement upgrade programme and the Enhanced People Housing Programme. Key catalytic projects such as Vulindlela Housing Project and Umlazi Infill also can be singled out as the chief drivers of the impressive performance outlook that has been recorded by the province.




The department is part of the various committees that have been tasked by the Premier to conceptualise and implement sustainable solution to the bulk infrastructure challenges that continue to be a developmental obstacle in the province. The department has partnered with the District Municipalities, Governmental Entities and Implementing Agents to design a solution to the challenge of lack of bulk infrastructure.

Changes to planned targets

No changes were made to planned targets.



Housing Development

2014/2015 2013/2014

Final Appropriation

Actual Expenditure

(Over)/ Under

Expenditure

Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000

Administration 80,071 90,690 (10,619) 72,953 71,354 1,599

Financial Interventions 489,652 469,233 20,419 701,137 444,529 256,608

Incremental Interventions 1,287,587 1,089,267 198,320 1,281,337 1,104,695 176,642

Social and Rental Intervention 83,606 78,768 4,838 273,689 60,205 213,484

Rural Interventions 1,569,648 1,804,462 (234,814) 971,416 1,590,178 (618,762)

Total 3,510,564 3,532,420 (21,856) 3,300,532 3,270,961 29,571



4.4 PROGRAMME 4: HOUSING ASSETS MANAGEMENT, PROPERTY MANAGEMENTThis programme co-ordinates the maintenance of the departmental rental housing stock, the refurbishment of the old hostels and the conversion thereof to community residential units, the rectification of units built prior to 1994 and the transfer of rental housing stock to qualifying beneficiaries in terms of the Extended Enhanced Discount Benefit Scheme (EEDBS).

The maintenance of the rental housing stock and the vacant land of the department is one of the key focus areas of Property Management. Whilst the rental stock is being suitably maintained, it is the intention to deplete the rental stock by implementing the rectification programme and intensifying the transfers of properties to qualifying beneficiaries in terms of the EEDBS.


Programme 4: Housing Asset Management, Property Management


Actual Achievement

2013/14

Planned Target2014/2015

Actual Achievement

2014/2015



2014/2015


Promote security of tenure (number of EEDBS houses remaining to be transferred)

787 1,135 639 (496)The variance can be attributed to -Municipalities inability to issue rates certificates due to outstanding debt.






Actual Achievement

2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015



2014/2015


Number of rental units transferred

787 1,565 639 (926)

The variance can be attributed to -Municipalities inability to issue rates certificates due to outstanding debt.

Number of units maintained 3,289 3,000 3,529 529

Target has been exceeded. Delays in the rectification (post-1994) programme resulted in a need for urgent a maintenance to be undertaken on the Departmental properties.

Number of units Rectified and or Upgraded for Pre -1994

60 2,000 2,082 82

Target has been exceeded. The Supply Chain Management that had proven to be a challenge in the previous financial year has since been resolved. Contracts have been awarded and work in various areas has accelerated. Hence the increase in delivery.



Housing Asset Management, Property Management

2014/2015 2013/2014

Final Appropriation

Actual Expenditure

(Over)/ Under

Expenditure

Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000

Administration 47,542 46,561 981 60,150 58,304 1,846

Sale and Transfer of Housing Properties 662 919 (257) 241 241 -

Housing Properties Maintenance 100,326 96,208 4,118 107,764 109,395 (1,631)

Total 148,530 143,688 4,842 168,155 167,940 215



5. TRANSFER PAYMENTS

5.1. Transfer payments to public entities Public entities receive sizeable transfer payments from government and are often the front-line providers of services on behalf of government. It is therefore important to understand the impact of these services on the communities. Departments are requested to provide information on the services provided by these public entities, transfer payments to the public entities, the actual amount spent from the transfer received by the public entities, strategic achievements of the public entity. Departments must also comment on monthly monitoring systems or the lack thereof to monitor spending on such transfer payments. If such monitoring did take place, departments must provide details of difficulties experienced and what steps (if any) were taken to rectify such difficulties.

Name of Public Entity

Services rendered by the public entity Amount transferred to the public entity (R’000)

Amount spent by the public entity (R’000)

PSETA Affiliation costs 705 705

SABC TV licences 1 1

SHRA Implementation of Social Housing projects 932 932

5.2. Transfer payments to all organisations other than public entities

The table below reflects the transfer payments made for the period 1 April 2014 to 31 March 2015

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

(R’000)

Reasons for the funds

unspent by the entity

Department of Transport

Provincial Department

Motor Licences Y 140 140 -

eThekwini Municipality

Municipality Operational Costs for Accredited Municipalities

Y 42,910 42,910 -

Msunduzi Municipality


Y 11,181 11,181 Funds are committed by the Municipality against its operational costs

eMnambithi Municipality


Y 734 734 Funds are committed by the Municipality against its operational costs

Newcastle Municipality


Y 3,028 3,028 -



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

(R’000)

Reasons for the funds

unspent by the entity

uMhlatuze Municipality


Y 2,293 2,293 -

KwaDukuza Municipality


Y 6,010 6,010 -

eThekwini Municipality

Municipality Rectification of pre-1994 housing stock

Y 20,000 20,000 -

Various Municipalities

Municipality Rates and taxes

Y 15,542 15,542 -

Various Municipality

Municipality Transfer costs – EEDBS programme

Y 715 715 -

Transfer to households

Various HSDG and social benefits

Y 3,216,149 3,216,149 -

The table below reflects the transfer payments which were budgeted for in the period 1 April 2014 to 31 March 2015, but no transfer payments were made.

Name of transferee

Purpose for which the funds were to be used

Amount budgeted for

(R’000)

Amount transferred

(R’000)

Reasons why funds were not transferred

Nil - - - -



6. CONDITIONAL GRANTS

6.1. Conditional grants and earmarked funds received

The table below describes each of the conditional grants and earmarked funds received by the department

Conditional Grant 1: Human Settlements Development Grant

Department from whom the grant has been transferred

National Department of Human Settlements

Purpose of the grant To provide for the creation of sustainable human settlements

Expected outputs of the grantSustainable Human Settlements

Actual outputs achieved See performance report

Amount per amended DORA (R’000)

3,509,045

Amount transferred (R’000) 3,509,045

Reasons if amount as per DORA not transferred

N/A

Amount spent by the department (R’000)

3,512,902

Reasons for the funds unspent by the entity

N/A

Monitoring mechanism by the receiving department

Weekly performance/expenditure review meetings. Quarterly performance review meetings



7. DONOR FUNDS

7.1. Donor Funds Received

No donor funds were received during the year under review.

8. CAPITAL INVESTMENT

8.1. Capital investment, maintenance and asset management plan• 3 General Assistants were employed during 2014/15 financial year; this has assisted in speeding up the

asset disposal process and the updating of the asset register.• SCM officially took over the function of movement of office furniture from General Administration from

2014/15 this will enable SCM to track movement of assets and to process transfers in the asset register.• Asset Management have developed a plan to investigate all unaudited assets in the department. This

process started in quarter 4 of 2014/15 and will form part of Asset Management’s annual Business Plan in 2015/2016.

• SCM Asset Management and IT has agreed on the workflow process to deal with unallocated IT assets in order to ensure that the asset register is updated. Monthly reports of all IT assets will be made available to IT to update the register of computers.

Infrastructure projects 2014/2015 2013/2014

Final Appropriation

R’000

Actual Expenditure

R’000


R’000

Final Appropriation

R’000

Actual Expenditure

R’000


R’000

New and replacement assets 64,459 67,455 (2,996) 14,892 6,799 8,093

Existing infrastructure assets - 39,466 (39,466) 55,865 - 55,865

- Upgrades and additions - - - - - -- Rehabilitation, renovations

and refurbishments- - - 34,253 - 34,253

- Maintenance and repairs - 39,466 (39,466) 21,612 - 21,612

Infrastructure transfer 44,261 77,468 (33,207) 114,500 40,384 74,116

- Current - 20,000 (20,000) 14,500 - 14,500

- Capital 44,261 57,568 (13,307) 100,000 40,384 59,616

Total 108,720 184,389 (75,669) 185,257 47,183 138,074

New infrastructure assets: Capital was over-spent by R2,996 million at year-end due to the Social and Economic Amenities programme which was under-budgeted. In the previous financial years this programme was sort of stalled as it was affected by forensic investigations and that was completed. The programme is catching up on delivery hence it was difficult to stay within the budget.

• Maintenance and repairs: Current spent R39,466 million against no budget due to the previously mentioned re-classification of the budget to Transfers and subsidies to department agencies and accounts

• Infrastructure transfers: Current spent R20 million against no budget due to the previously mentioned re-classification of the budget to Transfers and subsidies to department agencies and accounts.

• Infrastructure transfers: Capital over spent by R13,307 million as a result of operational costs for accredited municipalities, mainly for eThekwini Metro, due to the increase in the performance by this municipality as evidenced by high spending.



GovernancePart C:



1. INTRODUCTIONTo maintain the highest standards of governance the leadership team has committed themselves in striving to conform to the governance principles as enshrined in the King Code of Governance for South Africa. To meet these standards and principles, the department has constituted the following Governance Structures:

• A Top Management Team as Executive Structure which determines the strategic and leadership goals towards the Department;

• An Enterprise Risk Management Committee;

• An Audit Committee providing independent oversight over governance, risk management and control processes of the Department;

• A shared Internal Audit function providing independent assurance that controls are in place to manage and mitigate risks, and that they are adequate and functioning effectively; and

• A number of committees that assist the Accounting Officer and Top Management Team in governing the business of the Department in a fair, responsible and transparent manner.

Commitment by the department to maintain the highest standards of governance is fundamental to the management of public finances and resources. Users want assurance that the department has good governance structures in place to effectively, efficiently and economically utilize the state resources, which is funded by the tax payer.

2. RISK MANAGEMENTRisk Management remains a dynamic and challenging focus for the Department to stay on top of emerging risks that arise from changes to the external environment and strategic changes within the Department. One of the main tasks of the Department is to assess whether the Department is adopting the right strategy, acting in accordance with the expectations of stakeholders and assessing whether it is able to identify and manage all risks, impeding service delivery. To assist the Department achieve this, a risk management policy is in place. The Provincial Risk Management Framework has been adopted by the Department to assist in ensuring the risk strategies are coherently managed.

The Department of Human Settlements has established an Enterprise Risk Management Committee to assist the Accounting Officer in executing her respective responsibilities concerned with risk management. The committee comprises of top management of the Department.

This enables the Department to deliver on its Departmental goals, objectives and key performance indicators, enhance risk informed decision making and optimise compliance with applicable legislation. It further outlines the roles and responsibilities of managers and staff in embedding risk management in the Department and defines the enabling legislation, standards, mechanisms, tools and resources to be used to realise the Enterprise Risk Management plan.

The Risk and Advisory Services Directorate has facilitated workshops on identifying key risks that impede the Department of ensuring good governance, including risks affecting the Department in achieving efficient and effective service delivery. These workshops have identified risks that are reflective in the risk profile of the Department. The risk management tool used by the Department is Cura Risk Database, which is used to records all risks contained in the risk profile. Based on the risks identified the Department has achieved success in finalising action plans in mitigation of risks, which has become current controls. These risks were also reviewed for further mitigation action plans to further reduce the residual risk. The risk profile has 101 mitigation action plans to address the risks identified. These risk mitigation action plans are being managed and monitored and reported at monthly Management meetings and quarterly to the Provincial Treasury and Cluster Audit and Risk Committee.



This risk profile of the Department was adopted by the Cluster Audit and Risk Committee, whom monitors the department’s quarterly reports on risk mitigation and achievements.

The Department has made significant progress on the mitigation action plans as reflective in the risk profile. Revised completion dates were set for actions plans that were not achieved during the financial year, which included matters that required legislative amendments and information technology interventions.

3. FRAUD AND CORRUPTION The Department has an approved Fraud Prevention Plan, which includes the following appendices, namely the Code of Conduct and Business Ethics, Disciplinary Code and Procedures, Fraud Policy and Response Plan, Whistle Blowing Policy, Gift Policy and Matrix of responsibilities. This plan has been published on the Departmental website as an awareness strategy and also contributing to the enhancement of our commitment to zero tolerance of fraud, corruption and maladministration of public funds.

The Department has published the Implementation Guidelines received from the DPSA as per resolution taken on the 3rd Annual Provincial Forum on Anti-Corruption held on the 7th of November 2014 on the Departmental Website as Phase 1 of implementation and creating awareness to all staff. These implementation guides relates to the implementation of the Public Service Integrity Management Framework.

The Department has held workshops with all staff related to the Code of Conduct and the Disciplinary Code and Procedure, which is an appendix of the Fraud Prevention Plan. Workshop presentations related to Ethics, Risk and Fraud has also been held with all first level and higher management of the Departments programme 2, 3 and 4 staff.

Structured workshops are planned in the 2015/2016 financial year to further implement the plan to all stakeholders.

Part of the initiatives related to IT Fraud is the review of User access to the various transversal systems related to their assigned activities. A five minute lock enable has been scripted into the active directory access to prevent users leaving their computer equipment unattended and prone to access by other officials. Password penetrations tests are conducted by IT and user awareness training around security of passwords are conducted.

Passwords are scripted to change every 40 days and the parameters are set for a complexity of characters to strengthen controls.

Users of financial systems log on through the Fingerprint identification using the Biometric Access Control System and Smartcards with full audit trails.

The department is in its own VPN that has enhanced security that reduces the risks of unauthorised access. The VPN isolates the network of the department from those of other departments hosted on the SITA WAN.

A managed antivirus solution is in place. In addition, unsolicited emails are identified and quarantined by Mimecast, an emailing archiving system that has been implemented.

The department will be implementing an Intrusion detection and prevention system in the 2015/16 financial year.

4. MINIMISING CONFLICT OF INTERESTThe Department has appointed an “Ethic Champion” to assist in the management of ethical conduct in the workplace. The Department has embarked on completing all financial disclosure forms for all Senior Management Services employees, via the “eDisclosure” system managed through the Department of Public Service Administration. All financial disclosure forms are signed off by the appointed Ethics Officer and thereafter submitted for sign-off by the Executive Authority prior to being sent off to the Department of Public Service Administration. In order to ensure and maintain transparency in the delivery of services,



the department has ensured that employee’s complete declaration registers as a policy directive during all Supply Chain bid committees and Housing Evaluation and Advisory Committee meetings. Based on the assessment of financial disclosure forms, all deviations are followed up to conclusion.

Gift registers are completed on a quarterly basis by all business units related to declaration of gifts received. The Departmental gift register is disclosed in the interim and annual financial statements.

The Department in its recruitment process is vetting all successful appointees related to their qualifications and conducting competencies assessment where required. Each new employee is also required to complete a Candidate Declaration Form as prescribed.

5. CODE OF CONDUCT The business code and ethics policy remain an integral part of the fraud prevention plan as an appendix. This policy is ensures the maintenance of high values and ethical conduct in the business environment. This policy has been published on the departmental website as part of the implementation plan. In enhancing the code of conduct, a gift policy has been approved and business units report on a quarterly basis on a standardised template on all gifts received and approved for acceptance. Any form of unethical behaviour reported is investigated and appropriate action is taken on reported findings.

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUESThe Head of Department during the 2014/2015 financial year approved the Occupational Health and Safety Policy and Procedure Manual as well as Evacuation and Emergency Procedure Manual this will assist in eliminating poor and uncoordinated implementation of health and safety measures in the Department. During this period the department further successfully established an Occupational Health and Safety Committee comprising of sixteen (16) departmental officials including organised labour this will assist the department in addressing incidents relating to health and safety which may result in potential loss of life or productivity and litigation.

Health and Safety Committee members and floor representatives were sent on the following accredited training courses:

• Applying SHE Principles and Procedures – 19 January 2015• First Aid Level 1 – 28 January 2015• Fire fighting Level 1 – 23 February 2015

The department was able to purchase safety equipment e.g. First Aid Kits. These were distributed to OHS representatives with the exception of Port Shepstone and Harry Gwala District Offices due to departmental officials occupying shared premises and as such do not have a secure place to store the First Aid Kits.

Whilst the above strides have been made a challenge faced by the department is the use of hired buildings thus resulting in non-compliance by certain landlords which affect the Department in adequately complying with certain provisions of the Occupational Health and Safety Act. These areas of non-compliance relate to delay in servicing of fire extinguishers and hose pipes could be disastrous in the event of emergency, dysfunctional air-conditioning systems in offices which could result in illness of officials. Inadequacy of fire suppression system at records room could result in damage of records in the event of fire. Another major challenge particularly with high rise buildings is non-compliance to requirements of people living with disabilities which can result in indirect discrimination of disabled people.



7. PORTFOLIO COMMITTEES Finance Portfolio Committee

• 2 meetings were held during the 2014/15 financial years i.e. 29 July 2014 and 24 March 2015.• The table below reflects the Resolutions tabled by the Finance Portfolio Committee during the

2014/15 financial year and subsequent responses by the Department.

Resolution No. Subject Details Response by the department

Resolution 138/2013

Management of leave and leave records

That the Department report by 31 January 2014 on controls that are in place to properly manage all categories of leave and expenditure incurred in the department in employing substitute staff to perform functions of staff who are on prolonged leave for illness or other reasons.

1. Types of Leave

• Annual Leave• Sick Leave • Family responsibility• Special Leave

2. High Risk Areas

Trends indicate that the following leave categories are high risk:

• Annual Leave • Sick Leave

3. Responses

3.1 Controls

Quarterly reconciliation between Persal records and line managers’ records to ensure leave taken reflects on Persal.

3.2 Policy

The Policy has been updated to capture amendments brought about by Resolution 1 of 2012 introducing new leave days allowable per category.

3.3 Training

Training sessions are currently being conducted with line managers focusing on how to manage leave economically and efficiently.

3.4 Future Plans

To review the submission of leave forms in order to ensure better management of leave.

Resolution 139/2013

Expenditure on conditional grants

That the department be advised that the practice detailed above must be discontinued with immediate effect.

The Department does not engage in the practice as mentioned.

Resolution 140/2013

Cost-cutting measures

That Departments and Public Entities report by 31 January 2014 on measures that have been put in place to affect the cost-cutting measures listed above and the amount of money that has been saved on their budgets through these cost-cutting measures.

Refer to Table 1 below.




Resolution 141/2013

Overseas travel That Departments and Public Entities report by 31 January 2014 on overseas trips taken during the 2012/13 and 2013/14 financial years from the level of MEC to all officials, the number of trips taken, the names and positions of those people in the groups undertaking these trips, the class of travel used in each case, the reason of each trip and any tangible outcome which resulted from the trip in each case.


• No overseas trips were undertaken by any official of the department during this financial year.


• No overseas trips were undertaken by any official of the department during this financial year.

Resolution 142/2013

Use of outside venues

That Departments and Public Entities report by 31 January 2014 on all instances where outside venues have been hired for meetings, conferences, workshops, etc. during the 2012/13 and 2013/14 financial years, the reason for the hire of the venue and the costs in each case.


Resolution 143/2013

Provincial public sector wage bill

That all Departments and Public Entities report to the Committee by 30 April 2014 on what concrete measures they have implemented to affect the above recommendations of the FFC.

Currently this Department has an updated Persal System which corresponds to the establishment. On a monthly basis the Human Resource unit updates the HR provisioning plan after consultation with the Finance division on the available funding with respect to vacant funded posts and critical service delivery posts are identified to be filled.

Funded vacant posts confirmed by the budget controller must be identified and job evaluated to determine the correct level which will indicate the correct salary level before advertising of the said post.

A delegated Persal and Establishment Controller ensures up to date and credible personnel information by requesting monthly reports thus ensuring staff are correctly placed and receiving the correct salary.

The Auditor-General queries are addressed by requesting relevant monthly reports and scrutinizing these reports to ensure compliance with the Persal cleanup in terms of Outcome 8 for pure and clean data.

Monthly reports are obtained to ensure and monitor employee compensation is correctly paid to employees.




Resolution 40/2014

Community Development Workers

That the Accounting Officers of the various departments who employ Community Development Workers and other categories of volunteers report by 30 September 2014 on the number of CDWs and volunteers, the cost to the departments (stipends, tools of trade and any other costs) and the functions performed by the CDWs and volunteers in each case.

The KZN Department of Human Settlements does not have person(s) appointed for community development work either on the fixed/additional establishment or on voluntary basis.

The Office of the Premier(OTP) and Cooperative Governance & Traditional Affairs(Cogta) would communicate with the Department of Human Settlements on all cases related to Human Settlements which might have been reported/identified through Sukuma Sakhe Programme, Disaster Management Operations and/or emergencies.

Resolution 41/2014

Up-front payments That the Accounting Officers of all departments and Accounting Authorities of all public entities be advised that up-front payments to service providers for services to be rendered at a future date must be avoided unless exceptional circumstances exist and the payment is approved by Provincial Treasury following full motivation in order to avoid any risk of fruitless and wasteful expenditure should services not be rendered following the payment.

The department does not engage in upfront payments to service providers.

Resolution 42/2014

Cost-cutting measures

That Departments and Public Entities report by 30 November 2014 on measures that have been put in place to affect the cost-cutting measures listed above and the amount of money that has been saved on their budgets through these cost-cutting measures.


Resolution 78/2014

Revised organograms

1. That the Accounting Officers of the departments which have already had revised organograms approved by the DPSA be urged to fill posts only in cases where funding is available and where posts are critical for the functioning of the department.

2. That the MECs and Accounting Officers of departments which are in the process of reviewing their organograms be urged to do so within the limits of the budgets that they can expect to receive in the MTEF and in such a manner that salary costs do not undermine service delivery programmes.

The Department is currently restructuring and the proposed Organisational Structure has been aligned to National Mandates and Government Priorities as well the Generic Functional Sector Structures for the Core, Corporate and Finance.

The Department has consulted with the Departmental Task on Restructuring (DTT) which includes Organised Labour and the Management of the Department. The Office of the Premier and the Department of Public Service and Administration (DPSA) were also pre-consulted.

The Organisational Structure was presented to the Bargaining Chamber on the 14 November 2014 and adopted. However, due to budgetary constraints the number of posts on the proposed structure will have to be reduced before submission to DPSA. A workshop has been scheduled for 10-11 March 2015 to finalise the Organisational Structure.




Resolution 79/2014

Maintenance of state owned buildings

That the Accounting Officers, in line with the Government Immovable Assets Management Act (GIAMA), produce an immovable asset management plan that will form part of the strategic planning and budgeting processes of government and to provide for routine maintenance of state owned buildings in their budgets in future and that this matter be revisited during the 2015/2016 budget hearings.

The department did not undertake any maintenance on state owned properties during the 2014/2015 financial year. All planned maintenance for the 2015/2016 has been captured in the User Asset Management Plan (UAMP) as prescribed by the Government Immovable Assets Management Act (GIAMA). In ensuring that infrastructure spending is manageable in line with cost cutting measures only imperative projects shall be undertaken.

Human Settlements Portfolio Committee

Resolution No.

Subject Details Response by the department

25 July 2014 Human resources report

At the following meeting a human resources report on technical skills should be made available

25 July 2014 Adoption of AOP The members would read the document and convene on the 29th July to adopt the report

02 September 2014

Accreditation of municipalities

The committee noted that some municipalities were in the process of accreditation

Department to provide the committee with a list of municipalities that have potential to be capacitated or accredited

06 November 2014

Action against contractors

The committee noted that reports indicated that some contractors had failed to deliver as agreed

Department to provide committee with the remedial action process that is followed when building contractors fail to deliver on housing projects



Table 1

The table below provides the budget, expenditure and savings realised as a result of the implementation of the cost-cutting measures:

Items2012/13 2013/14

Budget Expenditure Saving Budget Expenditure Saving

Consultant Services R2,585,000,00 R826,301,97 R1,758,698,03 R1,850,000,00 R1,978,400,77 -R128,400,77

Travel and related costs R13,284,000,00 R13,300,458,88 R-R16,458,88 R15,830,000,00 R15,420,664,79 R409,335,21

Advertising R6,623,000,00 R6,383,458,77 R139,451,23 R2,211,000,00 R1,886,791,56 R324,208,44

Catering and event costs R3,116,000,00 R2,855,526,09 R260,473,91 R4,075,000,00 R3,754,988,30 R320,011,70

Consultant ServicesThe budget for this item was reduced by R735 000 or 28% in 2013/14 compared to the previous financial year as a result of utilising contract employees to provide the capacity required at reduced costs. The budget was however slightly overspent as a result of the appointment of Structural Engineers to conduct an assessment report on the habitable and structural condition of 655 housing units at the Nondweni town in Nqutu Municipality. This had not been planned for during the year. Savings were however identified within Goods and Services to cover this over expenditure.

Travel and related costs

The department has implemented the cost cutting measures on this item in line with the Provincial Treasury Circular on cost cutting measures. Any deviations are approved by the Head of Department. The budget and expenditure under this item has increased in the 2013/14 compared to the 2012/13 as a result of the appointment of technical officials to provide project management activities and project inspections on the housing projects in order to enhance service delivery. The increase in the number of officials to ensure achievement of targets resulted in increased costs under this item.

Advertising

The budget for this item in 2013/14 has been decreased by R4 312 000 or by 66% compared to the previous financial year. Bulk advertisement of posts was implemented and the content of the adverts limited to what is necessary. The advertisements on radio were also reduced. The department was also able to attain savings even on the reduced budget as detailed in the table above.

Catering and event costs

The budget and expenditure for this item was slightly increased in the 2013/14 compared to the previous year as a result of the need by the department to continue engaging with the various stakeholders on human settlements issues. Such engagements have actually yielded positive results as evidenced by the performance of the department during the previous two financial years whereby performance in terms of the number of houses built has increased compared to years before.



Table 2

The details pertaining to the use of outside venues during 2012/13 and 2013/14 financial year is attached.

2012/13

DATE OF EVENT DESCRIPTION OF EVENTS AMOUNT

08-11-2012Venue hire for 130 delegates at Suncoast Conference Centre for Human Settlements MINMEC and Implementation Forum meeting R 76 425.79

08-11-2012Procurement of additional technical items for Human Settlements Minmec at Suncoast conference Centre R 6 897.00

27-02-2012Conference venue for 100 people, meeting for the Province Performance Review Session R 32 450.00

07-02-2012Meeting with Implementing Agents and Human Settlements at Docklands Hotel R 49 269.00

03-05-2012 Venue hire at Sibaya Casino for Govan Mbeki Awards R193 088.28

24-01-2013Venue hire at Docklands Hotel for 150 delagates for implementing Agents meeting R 57 090.00

31-05-2012Handover of 250 houses at Nhlalakahle sports ground under Umvoti municipality R 148 850.00

02-06-2012Provision of venue for 100 people for Youth Month Launch Esikhawini FET College Sports Grounds R 20 150.00

02-06-2012Handover ceremony of 2 Disaster houses and 500 houses to the Sangcwaba Community at Ubuhlebezwe Municipality R 65 160.00

31-07-2012Hire of venue for 200 peoples for Women’s Build at Garden Court Black Rock R 10 441.67

29-06-2012Venue of hire for 60 delegates at Garden Court full day conference for External Information Session on Innovative Technology R 23 210.00

02-05-2012

Venue for conference for 60 delegates Southern Sun North Beach for Workshop on communication of Informal Settlement Strategy to Municipalities R 22 022.00

03-03-2012Provision of venue for Housing Consumer Education Roadshow at Bhekuzulu old stadium (Vryheid) R 35 000.00

05/06-07-2012 Venue hire for Youth Summit at Royal Agri Society of Natal R 209 670.95

03-07-2012Venue hire for 70 delegates for MEC meeting with IA’s at Garden Court Marine Parade R 14 960.00

21-04-2012Handover of 3 houses for the Physically Challenged People and handover of 89 Title Deeds to Lindelani Community at KwaDukuza Municipality R 123 496.00

03-04-2012Handover of houses for Mkhwanazi housing project at Umhlathuze Municipality R 56 226.00

13-12-2012 Project handover for Wellbeduct West at eThekwini Municipality R 36 400.00

26-10-2012Official opening of new building at Elonwabeni Home for the Frail Aged at Greater Kokstad Municipality R 120 000.00

05-10-2012Provision of venue for people attending literacy day celebration at Nqutu Municipality R 11 280.00

23-10-2012 Provision of venue for Batho Pele Public Service Day R 30 250.00



2012/13


28/29-06-2012 Venue hire for Legal Forum for 45 delegates at Protea Hotel Edward R 29 763.52

31-08-2012Provision of venue for 1500 people for Womens Build at Newcastle Municipality R 194 050.80

03-08-2012Provision of venue for 2000 people for official visit of the MEC with the KwaMavundla Community at Thembisa Sport Field, Hibiscus Coast R 207 000.00

TOTAL R 1 773 151.01

2013/14


08/11/2012Hire of venue at Sun Coast Conference centre for Human Settlements MINMEC and Implementation forum R 6 270.00

31/01/2013Hire of venue for Housing project SOD turning held at Mhlabuyalingana municipality R 269 040.00

03/04/2013Hire of venue for handover ceremony of 800 title deeds at Umhlathuze Municipality R 47 100.00

25/06/2013 Hire of venue for Mpembeni Housing Project Handover at Hlabisa Municiplaity R 220 000.00

08/02/2013Hire of venue for a meeting between Human settlements, Jozini and Muhlabuyalingana Municipalities to discuss project planning and related issues R 10 812.08

25/04/2013 Hire of venue for Govan Mbeki Awards held at the Royal Agri Society of Natal R 89 221.82

24/05/2013Hiring of venue at Docklands Hotel for the Launch of Social and rental Housing Plan R 70 960.00

20/08/2013Hire of venue for hosting the Graduation Ceremony For Emerging Contractors of Sponya Harvesting System Project at Ubuhlebezwe Municipality R 35 000.00

06/09/2013Hire of venue for Masinenge Housing Project launch at Hibiscus Coast Municipality R 194 619.00

17/09/2013Hire of venue for Hosting Literacy week celebration at Ilembe District Municipality R 6 366.90

08/10/2013Hire of venue for the launch of Maye Dabhasi Housing Project at Nongoma Municipality R 257 000.00

17/09/2013Hire of venue for the handover of vouchers to communities at Okhahlamba Municipality R 147 000.00

29/10/2013 Hire of venue for the Handover of Zidweni Housing Project at Ingwe Municipality R 180 000.00

31/10/2013 Hire of venue for Arbitration sittings at Durban Manor conference centre R 9 040.65

01/11/2013Hire of venue at Chatsworth and Phoenix Mall for the Promotion of the Financed Linked Individual subsidy Programme (FLISP) R 2 280.00

21/11/2013Hire of venue for KwaJali Housing Project handover at Umuziwabantu Municipality R 189 856.00

30/11/2013Hire of venue for Official House Handover built by MFN-SA at Hibiscus Municipality R 40 050.00

5-6/12/2013 Hire of venue for Hosting of the 2013 Human settlements Urban Dialogue R 234 560.70



2013/14


18/12/2013Hire of 22 mobile chemical toilets to be used utilised by public during the Presidential visit event held at Impendle-Nxamalala Traditional Council R 44 000.00

TOTAL R 2 053 177.15

Table 3

The table below provides the budget, expenditure and savings realized as a result of the implementation of the cost-cutting measures:

Consultant ServicesThe over expenditure of R128,000 in 2013/14 is as a result of the appointment of Structural Engineers to conduct an assessment report on the habitable and structural condition of 655 housing units at the Nondweni town in Nqutu Municipality. This had not been planned for during the year. Savings were however identified within Goods and Services to cover this over expenditure. The budget for this item was increased by R3 970,000 in 2014/15 compared to the previous financial year as a result of appointment of consultants to conduct a flood risk assessment study in the Province.

Travel and related costsThe department has implemented the cost cutting measures on this item in line with the Provincial Treasury Circular on cost cutting measures. Any deviations are approved by the Head of Department. The budget and expenditure under this item has decreased slightly in the 2014/15 compared to the 2013/14 as a result of the ongoing implementation of the cost cutting measures.

AdvertisingThe budget for this item in 2014/15 has been increased by R400, 000 compared to the previous financial year mainly due to advertisement for tenders in respect of housing projects which is enhancing service delivery. Bulk advertisement of posts was implemented and the content of the adverts limited to what is necessary. The advertisements on radio were also reduced.

Catering and event costsThe budget and expenditure for this item was increased in the 2014/15 compared to the previous year as a result of the need by the department to continue engaging with the various stakeholders on human settlements issues. Such engagements have actually yielded positive results as evidenced by the performance of the department during the previous two financial years whereby performance in terms of the number of houses built has increased compared to years before. The department was also pronounced best Human Settlements department in the Govan Mbeki awards.



8. SCOPA RESOLUTIONSResolution

No.Subject Details Response by the department Resolved

(Yes/No)

21/2014 Findings on Supply Chain Management

(1) That the Accounting Officer reports by 31 January 2015 on action taken to ensure that the above findings are addressed and that no further findings on Supply Chain Management occur in the next audit.

(2) That the above report also specifies the consequences which will be implemented by the Accounting Officer for those Senior Managers who do not meet their responsibilities in ensuring that these findings are addressed.

• Every endeavour is being made to pay suppliers within 30 days. The department is limited by the 2 payment runs owing to Provincial Treasury’s cash flow management. The invoices are loaded onto the system for payment within the stipulated 30 day period. When Treasury releases the funds for payment, it may exceed the 30 day period.

• A circular was issued to all staff indicating that invoices must be fast tracked and invoices prioritised and processes followed to ensure all payments are made within the 30 days period.

• A form was designed and attached to every invoice requesting explanations why these invoices were not certified and authorised by the relevant responsibility manager which may probably exceed the 30 days payment period.

• On receipt of these invoices the delegated official in the finance unit, reviews and interrogates the validity for non-compliance within 30 days.

• The Department collates a record of all invoices not paid within 30 days and reasons for non-payment. This record is reviewed by the CFO and Accounting Officer and reported to Provincial Treasury on a monthly basis.

• The letter of appointment of a Responsibility Manager includes compliance to relevant legislation and specific reference is made to adherence to payment of service providers within 30 days. On non-compliance disciplinary measures will be instituted against the relevant responsibility manager.

Yes

Resolution 22/2014

KZN Housing Fund: Qualification paragraphs

That the Accounting Officer reports by 31 January 2015 on how the matter of the non-compliance with the GRAP standards set out in the qualification items above will be addressed and when it is anticipated that the Housing Act, 1997 (Act No. 107 of 1997) will be amended to give effect to the disestablishment of the Housing Fund.

With regard to the 2012/13 audit of the KZN Housing Fund, the said Fund received a “disclaimer of opinion” audit opinion. The reason for the said opinion was that, the Fund was in an advanced stage of cleaning up the Fund. The significant matters that were raised by the Auditor-General, namely:

• Properties that were in private ownership where on the Fund’s property register;

• Properties that were owned by the Fund where not on the property register;

• Property register had incomplete records;

• Properties with “0” values or nominal values; and

• Revaluation and impairments of the properties.

During the clean-up exercise, we attended to the issues raised in the 2012/13 audit:

• At the 31 March 2014 the Fund had 5,163 properties on its property register, decreased from 13,100 (01 April 2011);

Yes



Resolution No.

Subject Details Response by the department Resolved (Yes/No)

• The Fund changed the basis of valuing its properties from the cost basis to the market value basis;

• The above exercise resulted in the properties being stated at market value, which resulted in the increase in the value of the Fund’s properties by an additional R1,098,914 million;

• The Fund’s debtors balances decreased from R 466,859 million (2012/13) – 9,174 debtors, to R206,411 million (2013/14) – 4,820 debtors;

• Debtors with credit balances decreased from R 4,473 million (2012/13) to R 1,885 million (2013/14);

• There were in induplum runs done on a monthly basis, which resulted in induplum interest being written back of R 110 million (see qualification below); and

• The maintenance of the Funds transactions are on an ongoing basis:

Ø Standard operating procedures and policies are being formulated and the implementation there off which is being done immediately;

Ø Two of the consultants personal responsible for the clean-up have been offered contract employment, which they took up;

Ø One of the above official’s responsibility is to provide training on an ongoing basis;

Ø Discussions have taken place with Provincial Treasury to assist in the sourcing of a full time accountant for the Fund (contract post), opening of a separate bank account and the Fund having its own accounting system;

Ø Ongoing discussions are currently being taking place with the respective municipalities in respect of devolving the properties to them, as per section 12 of the Housing Act; and

Ø In the Coastal region (Durban regional office), a “hub” has been created. With respect to EEDBS transfers, debtor take on, property add on, property deletions and revaluation, ALL the regions MUST submit their documents for processing to the Coastal region for verifying and processing. This process is to ensure that the Fund is maintained accurately at all times.



Resolution No.


Ø We are pleased to announce that the audit opinion for the 2013/14 audit had an except for qualification (which were GRAP related issues) namely:

•Property, plant and equipment

Qualification

Ø The entity did not comply with the requirements of GRAP 21 Non cash generating assets when calculating and accounting for the impairment of property, plant and equipment. Consequently, property, plant and equipment was understated and expenditure overstated by an unknown amount, as it was impracticable to quantify the misstatement;

Ø The entity did not comply with GRAP 17 property, plant and equipment when accounting for the revaluation of properties. Consequently, property, plant and equipment and the revaluation surplus were overstated by an unknown amount, as it was impracticable to quantify the misstatement.

Ø The Fund impaired its properties to the value of R 87,570 million. The Fund inspected all the properties and used a percentage to impair its properties. Different percentages in different areas. This method was not accepted by the Auditor-General, the reason being is that a percentage is too subjective, despite the GRAP statement despite mentions reasonableness and justification. The said impairment test was done in house by a candidate valuer, (the statement is silent about who can perform the impairment test).

•Response

Ø Going forward, the maintenance section of the Fund, maintain a maintenance register, and the said register will be as descriptive as possible as to what type of work was done on each house (rectification/maintenance/repair), the said register will be used to determine if there is an indication for impairment.



Resolution No.


Ø Notwithstanding the above, our team will also be going out to the Funds properties and inspecting these properties to determine if there is an indication for impairment. The team has a tool to have photographic evidence, if the need arises to impair any of these properties.

Ø In respect of costing, if there is an indication to impair, the Department has a number of quantity surveyors at its disposal to provide a costing report.

•Expenditure

ØThe entity did not account for expenditure relating to employee compensation in accordance with GRAP 25 employee benefits in respect of employees performing shared services. Consequently, employee costs were misstated by an unknown amount, as it was impracticable to quantify the misstatement.

ØEvery employee and management alike, engaged in shared services will be maintaining a register of their time spent on the Funds activities. This time spent on the Funds activities will form the percentage of the employees total time for a calendar year.

•Revenue

ØThe entity did not account for the correction of an error in respect of induplum interest amounting to R 110 million in accordance with GRAP 3 accounting policies, estimates and errors. I was not able to determine the full extent of the impact of the error during the current and prior years. Consequently, revenue was understated and the accumulated fund overstated by an unknown amount, as it was impracticable to quantify the impact of the misstatement.

• The reason for this qualification was that the Funds system is old and antiquated, and it is NOT GRAP compliant. The Fund’s system was not in a position to split the induplum interest between current year, previous year and prior years. An application was made to produce a report to split the induplum interest into current year, previous year and prior years. The National Department of Human Settlements is the custodian of this system, which is in the process of being phased out, we made them aware of this qualification and they will advise us of progress at the next user group meeting, scheduled to take place on 19 February 2015.



Resolution No.


Resolution 45/2014

Irregular expenditure, non-compliance with Supply Chain Management processes and Non-Payment of Performance Bonuses to Senior Managers

(1) That the Public Accounts Standing Committee supports the initiative of Provincial Treasury to withhold payment of performance bonuses to Accounting Officers and Senior Managers in departments where irregular expenditure continues to be incurred from year to year without improvement, provided proper legal processes

have been followed prior to taking this action to avoid legal action being taken against the Provincial Government by individuals.

(2) That with regard to month-to-month contracts, the Accounting Officers and Accounting Authorities report by 31 January 2015 on irregular expenditure incurred due to extension of month to month contracts.

No irregular expenditure has been incurred in respect of month-to-month contracts.

Yes

Resolution 48/2014

Material misstatements and omissions in submitted Annual Financial Statements

(1) That in order to comply with Section 40(1)(b) of the Public Finance Management Act, Accounting Officers be requested to ensure that financial statements are prepared regularly during the financial year and that due diligence is exercised to ensure that the financial statements are correct in all respects and that the financial statements are submitted to Internal Audit and the Provincial Audit and Risk Committee timeously.

• Financial statements are prepared quarterly and submitted to Provincial Treasury.

• All directorates provide their inputs in the prescribed format for input in the financial statements. On completion of the annual financial statements, the official responsible for compilation of the financial statements test checks the information for completeness and accuracy.

• The financial statements and working paper files are reviewed by the Office of the CFO prior to submission and approved accordingly.

• On submission of the financial statements, a letter of accuracy is signed jointly by the Accounting Officer and CFO.

Yes



Resolution No.


(2) That all Accounting Officers report by 31 January 2015 on action taken in terms of resolution (1) above to resolve this audit issue and that a further hearing of the Public Accounts Standing Committee be convened to consider the responses and any further action to be taken.

• A set of the interim financial statements and the annual financial statements is reviewed by an independent firm of accountants appointed by Provincial Internal Audit as part of the annual audit plan.

• The Provincial Audit and Risk Committee (PARC) reviews the annual financial statements prior to submission to Provincial Treasury and Auditor-General.

Resolution 49/2014

Filling of key vacancies

(1) That the Accounting Officers of the relevant departments report by 31 January 2015 on the following matters:

(i) A list of vacant senior management posts in their respective departments.

(ii) What action is being taken in the departments and public entities to address the findings of the Auditor-General with regard to the filling of vacancies in senior management positions?

(iii) Implementation of the directive from the National Minister of Finance that vacant funded posts in departments which have been vacant for more than 12 months must be frozen, which key vacancies will be affected by this directive and the impact of this on service delivery in the departments.

(i) There are 8 vacant SMS posts as per the current approved structure which are unfunded:• Chief Business Officer (DDG)• General Manager: Corporate Services• General Manager: Human Capital• Senior Manager: Strategic Planning• Senior Manager: Performance Management• Senior Manager: Capacitation and Black

Economic Empowerment• Senior Manager: Service Delivery

Empowerment• Senior Manager: Appointment of Consultants

(ii) No audit findings in respect of vacant SMS posts were raised during the 2013/14 audit.

(iii) All funded SMS posts have been filled during the 2013/14 and 2014/15 financial years. The Department is currently reviewing the organisational structure. The structure was tabled at the chamber in November 2014, and currently a Business case is being prepared which will be presented to DPSA between February and March, this will be followed by the migration process, matching and placing and evaluation of posts. It is anticipated that the restructuring process will be completed by end of July 2015.

Yes



Resolution No.


Resolution 50/2014

Reports on forensic and other investigations

(1) That copies of the reports on the investigations completed during the 2013/2014 financial year be provided to the committee by 31 January 2015.

(2) That the Accounting Officers of the departments and public entities where investigations were completed during the 2013/2014 financial year report by 31 January 2015 on -

- action taken against officials and service providers to implement the recommendations contained in the reports on their completed investigations

- disciplinary cases that may have been initiated

- criminal cases that may have been opened

- action taken as a result of findings of disciplinary cases and

- recovery of money by way of civil proceedings

(3) Where copies of the reports are not released to provide reasons duly substantiating the grounds for refusal in law, taking into account the protection offered by in camera proceedings and providing time

(1) and (2) No investigations were completed during 2013/2014 financial year. The Department is currently following up on a criminal docket that was registered with the SAP (CAS 129/12/10). The matter is currently with the Anti-Corruption Task Team whom are working jointly with a service provider appointed by Provincial Treasury and the Prosecution Team.

The Department has received a completed forensic investigation report during January 2015 related to alleged irregularities relating to beneficiary administration and social facilitation in a Housing Project. The findings contained in this report are currently being actioned.

A copy of the executive summary of the report was forwarded to the committee.

(3) The investigations related to CAS 129/12/10 is still in phase 2 of the forensic investigation process and copies of the reports will be released after completion of the investigation as documented in Cabinet Resolution No. 143 dated 16 May 2012.

(4) The Department engages with Provincial Treasury and the Cluster Audit and Risk Committee (CARC) on a quarterly basis. Updates on all investigations are reported to Provincial Treasury, which is discussed during quarterly engagements with CARC.

Yes



Resolution No.


frames for the release of the reports.

(4) That the Accounting Officers provide the Internal Audit Unit with a detailed list of all other investigations being conducted internally or by other relevant authorities within their departments or public entities under the control of the departments.

Resolution 51/2014

Repeat audit findings That the Accounting Officers report by 31 January 2015 on:

(i) All audit findings that have been repeatedly raised by the Auditor-General and in each case;

(ii) When was the finding first reported by the Auditor-General?

(iii) Over how many financial years has the matter appeared in the audit report?

(iv) What action has been taken in each year to prevent the audit finding being repeated?

(v) Why has the finding not been eliminated?

(i) Repeat findings (additional matters in the audit report)• Material misstatements• Monies owed by the department not settled

within 30 days

(ii) Finding first reported• Material misstatements – 2011/12• Monies owed by the department not settled

within 30 days – 2011/12

(iii) Number of years being reported• Material misstatements – 3 years• Monies owed by the department not settled

within 30 days – 3 years

(iv) Action taken to prevent finding being repeatedMaterial misstatements

• Financial statements are prepared quarterly and submitted to Provincial Treasury.

• All directorates provide their inputs in the prescribed format for input in the financial statements. On completion of the annual financial statements, the official responsible for compilation of the financial statements test checks the information for completeness and accuracy.

• The financial statements and working paper files are reviewed by the Office of the CFO prior to submission and approved accordingly.

• On submission of the financial statements, a letter of accuracy is signed jointly by the Accounting Officer and CFO.

Yes



Resolution No.


• A set of the interim financial statements and the annual financial statements is reviewed by an independent firm of accountants appointed by Provincial Internal Audit as part of the annual audit plan.

• The Provincial Audit and Risk Committee (PARC) reviews the annual financial statements prior to submission to Provincial Treasury and Auditor-General.

Monies owed by the department not settled within 30 days

• Every endeavour is being made to pay suppliers within 30 days. The department is limited by the 2 payment runs owing to Provincial Treasury’s cash flow management. The invoices are loaded onto the system for payment within the stipulated 30 day period. When Treasury releases the funds for payment, it may exceed the 30 day period.

• A circular was issued to all staff indicating that invoices must be fast tracked and invoices prioritised and processes followed to ensure all payments are made within the 30 days period.

• A form was designed and attached to every invoice requesting explanations why these invoices were not certified and authorised by the relevant responsibility manager which may probably exceed the 30 days payment period.

• On receipt of these invoices the delegated official in the finance unit, reviews and interrogates the validity for non-compliance within 30 days.

• The Department collates a record of all invoices not paid within 30 days and reasons for non-payment. This record is reviewed by the CFO and Accounting Officer and reported to Provincial Treasury on a monthly basis.

• The letter of appointment of a Responsibility Manager includes compliance to relevant legislation and specific reference is made to adherence to payment of invoices within 30 days. On non-compliance disciplinary measures will be instituted against the relevant responsibility manager.



Resolution No.


(v) Finding not being eliminated

Material misstatements

• Owing to the KwaZulu-Natal Housing Funds annual financial statements being prepared on GRAP (accrual basis of accounting), certain housing fund transactions had to be removed from the Department’s Annual Financial Statements (Vote 8 – prepared on the cash basis) and be incorporated into the housing fund’s annual financial statements.

• This resulted in misstatement of the annual financial statements which was subsequently rectified.

Monies owed by the department not settled within 30 days

• The department is limited by the 2 payment runs owing to Provincial Treasury’s cash flow management.

• The invoices are loaded onto the system for payment within the stipulated 30 day period. When Treasury releases the funds for payment, it may exceed the 30 day period.

Resolution 52/2014

Audit finding regressions

That the Accounting Officers and Accounting Authorities of departments and entities which experienced any regression in audit findings i.e., qualification items or any other matters, predetermined objectives or compliance with laws and regulations, report by 31 January 2015 on:

(i) The reasons for the regressions.

(ii) What action is being taken to resolve those matters going forward?

(iii) What action has been taken against the Senior Managers responsible for those findings?

No new audit findings were reported during the 2013/14 financial year.

Yes



Resolution No.


Resolution 53/2014

Performance agreements for Accounting Officer and Senior Management

That the MECs of the departments be requested to report by 31 January 2015 on:

(i) Whether the Accounting Officers and Senior Managers in their departments have all signed performance agreements and if not, the reasons for non-compliance in this regard.

(ii) Do performance agreements clearly set out the consequences for non-performance and under-performance on responsibilities set out in the agreements and financial mismanagement and the sanctions which will be imposed in the event of non-performance, under-performance or financial mismanagement?

(iii) Do performance agreement include as a key performance indicator the general responsibilities of the Accounting Officers and Senior Managers to prevent unauthorised expenditure, irregular expenditure or fruitless and wasteful expenditure, and if not, the reasons for this exclusion.

(i) 4 SMS members of the Department have not submitted signed performance agreements.

There are no clear reasons for the non-submission of the Performance Agreements from the managers that have not submitted.

The Accounting Officer has issued verbal warnings at the Management Committee (MANCO) meetings indicating that no incentives will be paid to those not complying. The Human Resources Directorate are finalising a schedule of information sessions which will outline action to be meted out for non-compliance.

A plan is being crafted to address the problem of non-compliance whereby one-on-one sessions will be conducted with managers in order to ensure that there is full understanding about the importance of the system. It is anticipated that these sessions with managers and staff will be concluded by 15 April 2015.

(ii) The Performance Agreements do not clearly set out the consequences for non-performance and under performance on the responsibilities set out in the agreements and financial mismanagement and the sanctions which will be imposed in the event of non-performance, under-performance or financial mismanagement. This information will be mandatory for inclusion in the Performance Agreements for the 2015/16 financial year.

(iii) The Performance agreements do not include as a key performance indicator to prevent unauthorised expenditure, irregular expenditure or fruitless and wasteful expenditure.This information will be mandatory for inclusion in the Performance Agreements for the 2015/16 financial year.

Every endeavour is made to pay creditors within 30 days. Officials finalise audit responses / communique within a 2 day turnaround time.

Yes



Resolution No.


Resolution 54/2014

Expenditure on consultants

That the Accounting Officers report by 31 January 2015 on the following:

(i) A breakdown of amounts spent in the 2013/2014 financial year on consultants.

(ii) The reasons for the engagement of the consultants.

(iii) The period of time worked.

(iv) The owner name and company name of each consultant and cost of each.

(v) Whether the department has any measures in place to ensure that skills transfer takes place between consultants and existing staff.

• The amount of R5, 284 million reflected under “Consultants, contractors and agency/outsourced services” constitutes professional services e.g. engineers, surveyors, payments made to State Attorney on legal and conveyancing matters and payment made to contractors for property maintenance.

• No consultants were procured during the 2013/14 financial year relating to capacity constraints within the Department.

Yes

Resolution 55/2014

Government Employees performing private remunerative work

That the Accounting Officers of all departments report by 31 January 2015 on the following:

(i) All instances of unauthorised private remunerative work identified by the Auditor-General in the 2013/2014 audit, whether these cases have all been properly investigated, disciplinary action taken and recovery of remuneration earned without required permission.

(ii) What steps are taken to -

(i) There were no cases of unauthorised private remunerative work identified by the Auditor-General during the 2013/14 audit.

(ii) The following steps are performed by the Department:• A circular has been issued to staff requesting

them to disclose all business interests and to obtain authority to conduct any business outside of the employ of the state. The Financial Disclosure forms are completed by all officials on an annual basis.

• For all quotations and bid documents, service providers are requested to declare their interest by completion of SBD4 forms. The Provincial Treasury Database currently being utilised by the Department is linked to the Persal system thereby excluding service providers who are government employees.

• The Department has 2 officials who have obtained approval to perform remunerative work outside the Public Service from the delegated Authority.

(iii) Not applicable.

Yes



Resolution No.


- Ensure public servants are completing SBD4 declaration forms.

- Check these forms when awarding tenders/contracts.

- Ensure that public servants have authority to perform private remunerative work.

(iii) The reasons why public servants conducting business without authority were not detected.

Resolution 59/2014

Implementation of audit recommendations accepted by Management

That the Accounting Officers of the departments and Accounting Authorities of Public Entities report by 31 January 2015 on –

(i) Details of the Auditor-General’s recommendations that they agreed to implement in the 2013/2014 financial year.

(ii) Which of these were implemented and which were not implemented.

(iii) Details of the recommendations that had been agreed to for implementation in the 2014/2015 financial year.

(iv) What action was being taken to ensure that all recommendations were implemented in the 2014/2015 financial year?

(i) and (iii) There were no qualifications in respect of the 2012/13 and 2013/14 financial years.

The Department received “Emphasis of matter” paragraphs in the 2012/13 and 2013/14 financial years as follows:

• Material misstatements – relating to Housing Fund (refer to 51/2014)

• Monies owed by the department not settled within 30 days (refer to 51/2014)

(ii) and (iv) Not applicable.

All recommendations in respect of the audit queries raised have been implemented and control measures strengthened to ensure that the Department does not regress in audit findings.

Yes



Resolution No.


Resolution 60/2014

Provision for accruals in department budgets

That the Accounting Officer of the relevant departments where the matter of accruals is raised in the 2013/2014 report of the Auditor-General be requested to report on:

• The amount that is recorded in the annual financial statements for accruals.

• Whether provision is made in the 2014/2015 budget to pay accruals

• If no provision is made in the budget to pay accruals, how will the impact on the budget be managed.

• The amount paid by the department in interest on overdue invoices.

• R285 million was reflected as accruals in the 2013/14 annual financial statements.

• Yes, accruals have been budgeted for due to housing projects spanning over multi-year periods.

• No interest was paid in the 2014/15 financial year relating to accruals in the 2013/14 financial year.

Yes



9. PRIOR MODIFICATIONS TO AUDIT REPORTSNature of qualification, disclaimer, adverse opinion and matters of non-compliance

Financial year in

which it first arose

Progress made in clearing / resolving the matter

Emphasis of Matter

1. Significant uncertaintiesWith reference to note 22 to the financial statements, the department is the defendant in 10 lawsuits for alleged breaches in contracts and services that have been rendered to the estimated value of R218,91 million. The ultimate outcome of these matters cannot presently be determined, and thus a contingent liability that may result, has been disclosed in the financial statements.

2013/14 Response / Current ProcessThe Contingent liabilities disclosed relate to matters in which monies are claimed against the Department in a court and/or arbitration process. These amounts are estimated since they do not take into account the award that may be made by the Arbitrator or the Judge. A claim can be amended at any time before leading evidence and a successful judgement includes payment of the claim, interest and legal costs. The interest will be determined only on the award of the judgement and the costs on taxation by the taxing master in the High Court. In order to deal with the factual difficulty in relation to the claims and interest changing, the contingent liability schedule is monitored on a monthly basis and therefore any amendments can be done monthly to prevent any under or over estimation of the amounts. It must be noted from previous years that in construction (human settlements) disputes the award is usually far less than what is claimed. Thus there is no danger in under estimation.

Report on other legal and regulatory requirements

1. Annual Financial StatementsThe financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by section 40(1) of the PFMA. Material misstatements of disclosure items identified by the auditors in the submitted financial statements were subsequently corrected resulting in the financial statements receiving an unqualified audit opinion.

2009/10 ResponseThe reason for the restatement of the prior year figures and the current figures subsequent to submission of the annual financial statements for audit, was that in the prior years the KwaZulu-Natal Housing Fund was accounted for using a mixture of modified cash basis and GRAP accounting standards. As agreed with the Auditor-General in the prior year, based on the fact that the accounting system does not allow the Department to fully implement GRAP accounting standards, the Department utilised related party transactions to account for the Housing Fund expenditure. In the current financial year, GRAP standards were enforced resulting in the Department restating the financial statements (note 7). In respect of note 19 (Finance leases), prior years and current year figures were restated to account for Finance lease costs.

Current Process• Processes have been implemented to ensure that

these misstatements do not recur: Ø Prior to preparation of the AFS, letters are issued

to Management requesting information in this regard;

Ø These pertinent issues are also discussed at Manco meetings; and

Ø The Accounting Officer approves the information disclosed.



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

Financial year in



2. Expenditure managementMoney owed by the department were not settled within 30 days as required by section 38(1)(f) of the PFMA and Treasury Regulation 8.2.3.

2009/10 Response• Non-compliance in this regard relate to disputed

invoices by the department in relation to services rendered. The department does not make payment if the end user is not satisfied with the service provided. Communication in relation to such disputes was not readily available in file for audit. This has now been corrected and communication in relation to disputed invoices is now kept in the payment file for audit purposes.

Current Process• Every endeavour is being made to pay suppliers within

the stipulated period;• A manual tracking has been implemented by the

finance unit, IT is in the process of automating same;• A form has been designed and it must be attached to

every payment, wherein reasons must be noted as to why the payments was not made within the stipulated period;

• A circular had been issued to all staff advising them of the non-compliance issue and that they must return invoices to finance within 5 days of receipt; and

• A non-compliance report is formulated on a monthly basis and forwarded to the CFO, HOD and Provincial Treasury on a monthly basis, together with reasons as to why the payment was delayed.

Internal Control

1. LeadershipManagement did not adequately review the financial statements prior to submission for audit. Additionally, compliance with laws and regulations was not adequately monitored.

2011/12 Response• Internal controls, processes and procedures have been

implemented to ensure compliance to laws, regulations and all reporting frameworks.

• Monthly Management Committee meetings and Executive Committee meetings are held to ensure accountability of Management, sound financial management, human resource management, policy and governance and risk management strategies are incorporated to achieve the outcomes of the Department.

Current Process• Monthly Management Committee meetings and

Executive Committee meetings are held to ensure accountability of Management, sound financial management, human resource management, policy and governance and risk management strategies are incorporated to achieve the outcomes of the Department.

• The Interim Financial Statements are currently presented to these committees for review and approval.

• The 2014/15 Annual Financial Statements will be subjected to these committee reviews and subsequent approval prior to submission to the Auditor-General.




Financial year in



2. Financial and performance managementSystems and control were not adequately designed in a manner to prevent, detect and address risks that impact on financial and compliance reporting. In this regard, the accounting officer did not ensure that regular, accurate and complete financial reports were prepared, which were supported and evidenced by reliable information. This resulted in material corrections in financial systems.

2010/11 Response• No new procurement related matters arose in the

2013/14 audit. • Irregular expenditure accrued in the 2013/14 financial

year which relates to contracts emanating from the prior years.

• An overpayment of approximately R29 million was detected in the 2013/14 financial year and was detected during the audit process. Subsequently, this was resolved in terms of re-imbursement by the eThekwini Municipality in the 2014/15 financial year.

Current Process• IYM and DORA reports are reviewed monthly by the

Chief Financial Officer and approved by the Accounting Officer prior to submission;

• Quarterly service delivery reports submitted to Treasury are verified by the Monitoring and Evaluation unit to ensure accurate information is disclosed in the Annual Report against the targets contained in the Annual Performance Plan;

• Treasury – consultants are tasked to review the Interim and Annual Financial Statements for accuracy, completeness and compliance to all legislation and regulations; and

• A committee (CARC) to analyse and interrogate the annual financial statements and annual report prior to submission is in the process of being established. This will minimise irregularities in terms of completeness and accuracy.

Other Reports

1. InvestigationsProvincial Treasury performed an investigation at the request of the department, which covered the period 2010 to 2011. The investigation was initiated based on allegations of fraud relating to procurement. These investigations were completed in the previous year and the department is monitoring the criminal case that is currently with the anti-corruption task team.

2011/12 Response• The Fraud Prevention Plan and all its appendices

namely the Code of Conduct and Business Ethics, Fraud Policy and Fraud Response Plan, Disciplinary Code and Procedure, Whistle Blowing Policy and Matrix of Responsibilities has been published on the departmental website, and communicated to all staff in the Department. Workshops are planned to be conducted on this plan in the last two quarters of the Financial Year;

• Stringent internal control measures have been instituted within the department to ensure administration of the Department is executed smoothly thereby providing service delivery to the public; and

• All departmental officials are required to fill declarations of interest for each financial year, disclosing vested interests in service providers embarking on business with the department.




Financial year in



• Arising from finalised investigations, the department has finalised disciplinary cases against 4 Senior Officials with different sanctions on successful cases. Disciplinary action against 5 other senior officials were not finalised due these officials either resigning or no more being in the employ of the state prior to the finalisation of the disciplinary processes. Disciplinary action, against 2 other senior officials is being managed by their new departments.

Current Processes• Investigation reports have been received from

Provincial Treasury and the recommendations have commenced action. Disciplinary processes have commenced and were finalised against 4 Senior Managers. Recommended disciplinary action against two former employees of the Department is being pursued by a team of professionals with their respective departments. No disciplinary action can be pursued against officials who have subsequently left the services of government;

• A criminal docket has been registered with the South African Police Services on allegations of fraud and corruption against former Senior Officials and service providers. This case has been referred to the Anti-corruption Task Team (ACTT), whom are pursuing the case further.

• Investigations related to subsidy fraud has resulted in successful conviction of numerous government employees and 385 Disciplinary cases have been finalised by various Provincial Departments against officials whom have transgressed.

• On-going recoveries are being made on Acknowledgements of Debts related to subsidy fraud.



10. INTERNAL CONTROL UNIT

The departmental internal control unit strive towards providing objective assurance and consulting service designed to add value and improve departments operations through evaluations of the systems of internal control, risk management and corporate governance processes.

The unit is responsible for conducting internal assignments in terms of the identified risk areas independently from the Provincial Internal Audit Unit whom service the Department’s internal audit requirements as a function that was set up under sections 38 (1)(a)(i) and 76 (4)(e) of the PFMA., and mandated in terms of paragraph 3.2.3 of the Treasury Regulations.

In managing all activities related to the internal control environment audit improvement strategies were developed related to all findings in the audit reports of the Auditor-General for the two sets of financials tabled during the last financial year, which include the Departmental Vote and the Human Settlement Housing Fund. The audit improvement strategies included all findings tabled in management letters issued by the Auditor-General and all finding tabled in the assurance reports issued by Provincial Treasury.

These strategies were managed and monitored on a monthly basis on actions plans agreed by management, which was reported to the Cluster Audit and Risk Committee on a quarterly basis during the financial year. The audit improvement strategies also contributed towards reporting on the quarterly dashboard report of the Auditor-General with the Executive Authority. The dashboard report has shown significant improvement in the drivers of internal control to achieve a clean administration.

11. INTERNAL AUDIT AND AUDIT COMMITTEES

The Department’s internal audit requirements are and have been serviced by Provincial Treasury’s “Provincial Internal Audit Service” (PIAS), a function that was set up under sections 38 (1)(a)(i) and 76 (4)(e) of the PFMA, and mandated in terms of paragraph 3.2.3 of the Treasury Regulations.

The strategic objective of Provincial Treasury is to provide an independent and objective assurance and consulting service designed to add value and improve the KwaZulu-Natal Provincial Administration operations through evaluations of the systems of internal control, risk management and corporate governance processes.

The PIAS consists of two sub-programmes, namely Assurance Services that is responsible for conducting internal audit assignments in terms of the identified risk areas as per the attached plan; and the Risk & Advisory Services that provides risk management support, consulting services as well as conducting forensic investigations.

Although investigating fraud and other irregularities are not the primary focus of internal audit’s approach, a close liaison with management of Human Settlements is maintained should such issues be identified. These cases are then referred accordingly for forensic auditing.

The PFMA requires provincial government departments and public entities to establish a system of risk management and internal control and to ensure that risk assessments are conducted regularly to identify emerging risks within the departments therefore Provincial Treasury provides support in managing this process.

Based on the annual internal audit plan for the financial year as approved by the Cluster Risk and Audit Committee, all major assignments were completed. Three reports were not issued, due to challenges and delays in provision of documentation and unavailability of key staff at the Municipality, budgetary constraints and one assignment being a transversal audit and has been carried over into the new financial year.

All findings emanating from these audit reports were translated into an audit log to follow-up on agreed actions plans related to these findings. Quarterly reporting on the audit improvement strategy was tabled to the Cluster Audit and Risk Committee.



The table below discloses relevant information on the audit committee members:

Name Qualifications Internal or external

If internal, position in the

department

Date appointed Date Resigned

No. of Meetings attended

P Christianson CA (SA) External Not Applicable February 2015 Not Applicable 2

T. MozelaB.com: B Compt Hons, MBA, CIA, CCSA, CRMA

External Not Applicable February 2015 Not Applicable 2

D. O’Connor CA (SA) External Not Applicable February 2015 Not Applicable 2



12. REPORT OF THE AUDIT & RISK COMMITTEE ON VOTE 8 – DEPARTMENT OF HUMAN SETTLEMENTS

1. Objective and responsibility of the Audit and Risk Committee

The Provincial Audit and Risk Committee (PARC) has been established to assist the KZN Provincial Government in fulfilling its oversight responsibilities by, amongst others, reviewing the following:

(a) the effectiveness of the internal control systems;(b) the effectiveness of the internal audit function;(c) the risk areas of the institution’s operations covered in the scope of internal and external audits;(d) the adequacy, reliability and accuracy of the financial information provided to management and other users of

such information;(e) any accounting and auditing concerns identified as a result of internal and external audits;(f) the institution’s compliance with legal and regulatory provisions; and(g) the activities of the internal audit function, including its annual work programme, coordination with the external

auditors, the reports of significant investigations and the responses of management to specific recommendations.

The PARC is the shared audit and risk committee for the provincial departments, and is further sub-divided into three Cluster Audit and Risk Committees that provide oversight to provincial departments. The Department of Human Settlements is served by the Social Cluster Audit & Risk Committee.

The Committee reports that it has complied with its responsibilities arising from the Public Finance Management Act, No.1 of 1999 (PFMA), Treasury Regulations 3.1, including all other related prescripts; and also reports that it has adopted appropriate formal terms of reference as its Audit and Risk Committee Charter, has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.

The Committee is therefore, pleased to present its report for the financial year ended 31 March 2015.

2. Audit Committee Members and Attendance

During the financial year under review, a new committee was appointed on 23 February 2015 and consisted of the PARC and the Social CARC members listed in the table below. The table also outlines the meetings held and attendance thereof by members; to enable the Committee to discharge their responsibilities relating to matters under review during the reporting period.

# Name of Member PARC Meetings Attended

Social CARC Meetings Attended

Special Meetings

1. Mr P Christianson (Acting Chairman of CARC) 2 2 22. Mr D O’Connor 2 2 23. Ms T Njozela 2 2 24. Mr S Simelane (Acting Chairman of PARC) 2 N/A 25. Mr R Dehal 2 N/A 26. Mr V Ramphal 2 N/A 2



3. The Effectiveness of Internal Control The Committee has reviewed the reports of the Internal Auditors, the Audit Report on the Annual Financial Statements and Management Report of the Auditor-General of South Africa (AGSA) and has noted with concern, the weaknesses in controls around the following areas:

• Payment of suppliers within 30 days• Functioning of the Bid Committee• Records Management• Review of the Deviation Register• Policy review• Contract Management• Subsistence and Travel Expenditure• Setting performance targets • Amendments to Completion Certificates• Design and completeness of Inspection Certificates• Finance Linked Individual Subsidy Programme • Housing Subsidy System• Implementation of Internal Audit recommendations/Management Action Plans

4. Risk Management

The Committee noted that the department is progressing towards building a credible risk register both at the business unit level and at the corporate level. Further the department was advised to review its risk register, considering that most of the identified risk mitigation plans were implemented. The Committee appreciates the effort and progress being made on risk management in the department, and believes that by implementing the following on a continuous and consistent basis, the culture of risk management within the department will mature:

- Validating and measuring the impact that completed risk mitigation plans make on the risk exposure, together with regular (quarterly) updates of the risk register; and

- Identifying critical risks in the light of the department’s exposure to meeting its objectives effectively, efficiently and economically.

5. Forensics Investigations

During the period under review, the Committee noted that there were six (6) forensic investigations, mostly relating to irregular procurement practices, that the department has referred to the Provincial Internal Audit Services for investigation. Two (2) of these investigations were completed, and the other four (4) were still in progress. The department and the Provincial Internal Audit Service are urged to promptly finalize the outstanding investigations, and work together to implement recommendations on the finalized investigation.

The Committee is unable to comment on the completeness of the investigations conducted during the year under review as the department failed to respond to the request to furnish the Provincial Internal Audit Services (PIAS) with a list of any other in-house or outsourced investigations to other service providers by the Department. As a result, the committee is unable to further comment on the completeness of the department’s fraud risk profile.



6. Quality of in year management and monthly/quarterly reports

The Committee was satisfied with the content and quality of quarterly reports in respect of in year management and quarterly performance reports submitted in terms of the PFMA and the Division of Revenue Act prepared and issued by the Accounting Officer of the Department during the year under view.Based on the reports of Internal Auditors and the Auditor-General, the Committee has not noted any weaknesses identified around the usefulness, completeness and reliability of performance information for the vote and Fund.

7. Evaluation of Financial Statements

The Committee has:• Reviewed and discussed the audited Annual Financial Statements to be included in the Annual Report, with

the Auditor-General and the Accounting Officer;• Reviewed the Auditor-General’s Management Report;• Reviewed the Department’s processes for compliance with legal and regulatory provisions and a concern

was noted that the financial statements submitted for auditing for the vote and Fund were not prepared in accordance with the prescribed financial reporting framework as required by the PFMA.

• Material misstatements for the vote of finance linked individual subsidy programme commitments, property payments, contingent liabilities and irregular expenditure identified by the auditors in the submitted financial statements were subsequently corrected resulting in the financial statements receiving an unqualified audit opinion.

• Material misstatements for the Housing Fund of non-current assets, net assets, revenue, expenditure and disclosure items identified by auditors in the submitted financial statements were subsequently corrected resulting in the financial statements receiving an unqualified opinion.

8. Internal Audit

In line with the PFMA and the King III Report on Corporate Governance requirements, Internal Audit Function provides the Audit Committee and Management with reasonable assurance that the internal controls are adequate and effective. This is achieved through the implementation of a risk based Internal Audit plan. The Committee has, through the CARC monitoring processes, considered internal audit reports issued after assessing the adequacy and effectiveness of controls designed to mitigate the risks associated with operational and strategic activities of the department, as well as the appropriateness of the of corrective actions provided by management to improve the control environment.

The Internal Audit function was effective during the period under review and there were no unjustified restrictions or limitations. The Committee will in the forthcoming year, monitor progress to ensure that the Internal Audit Function continues to add value to the department and achieves its optimal performance. The Committee also monitored the implementation of Internal Audit recommendations to the Department.

9. Auditor-General’s Report

The Committee has monitored the implementation of corrective action plans to address the audit issues raised in the prior year by the Auditor-General. The Committee has met with the Auditor-General of South Africa to ensure that there were no unresolved issues that emanated from the current regulatory audit.



The Committee will ensure that corrective actions on the detailed findings emanating from the current regulatory audit are monitored on a quarterly basis through the CARC processes.

The Committee concurs and accepts the Auditor-General’s opinion regarding the Annual Financial Statements, and proposes that the Audited Annual Financial Statements be accepted and read together with the report of the Auditor- General.

10. Appreciation

The Committee wishes to express its appreciation to the Management of the Department, the Auditor-General of South Africa, and the Provincial Internal Audit Services for the co-operation and information they have provided to enable us to compile this report.

_________________________Mr S SimelaneActing Chairman: Provincial Audit and Risk Committee11 August 2015



Human Resource Managment

Part E:



1. INTRODUCTION The information contained in this part of the annual report has been prescribed by the Minister for the Public Service and Administration for all departments in the public service.

2. OVERVIEW OF HUMAN RESOURCES As at June 2013, National Cabinet endorsed the following revised minimum national affirmative action targets:

Black employees at senior management level – 75%, Women at senior management level – 30% and people with disabilities at all levels -2%. On 24 March 2006, National Cabinet approved approved a 50% equity target for women at senior management level. The graphs below reflect the totals in respect of Human Settlements.



In terms of Cabinet resolutions no.7 dated 22 September 2009; all departments were tasked with ensuring that all unfunded vacant posts and all vacant posts older than 2 years were abolished on the Persal System. In addition to this, departments were requested by CoHoD to effectively monitor the filling of funded posts in terms of Output 2 of Outcome 12 to ensure a vacancy rate of 5%.



Department’s has not met the planned target of a vacancy rate of >5% in the financial year 2014/15. This under-performance can be attributed to department moving funds to critical unfunded posts. One of the prominent provisions of the cost containment agenda is the emphasis on shifting funds from non-critical vacant funded posts to critical but non funded posts. As a result the department could not meet its target of a vacancy rate of below 5%. The department recorded a deviation of -4% which we are confident we will be able to correct in the near future. Already the department has embarked on drive to fill critical posts.



3. HUMAN RESOURCES OVERSIGHT STATISTICS

3.1. Personnel related expenditure

The following tables summarises the final audited personnel related expenditure by programme and by salary bands. In particular, it provides an indication of the following:

• amount spent on personnel

• amount spent on salaries, overtime, homeowner’s allowances and medical aid.

Table 3.1.1 Personnel expenditure by programme for the period 1 April 2014 and 31 March 2015

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)


182,847 101,270 - - 55.4 413


14,223 11,165 - - 78.5 319


3,532,420 127,331 - - 3.6 745


143,688 42,501 - - 29.6 136

Total 3,873,178 282,267 - - 7.3 370

Table 3.1.2 Personnel costs by salary band for the period 1 April 2014 and 31 March 2015

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) 572 0.2 3 190

Skilled (level 3-5) 18,972 6.4 123 154

Highly skilled production (levels 6-8) 89,241 30.3 278 321

Highly skilled supervision (levels 9-12) 81,706 27.7 159 514



Salary band Personnel expenditure (R’000)

% of total personnel cost

No. of employees Average personnel cost per employee

(R’000)

Senior and Top management (levels 13-16) 22,329 7.6 24 930

Lower skilled (Levels 1-2) Contract 1,093 0.4 - -

Skilled (level 3-5) Contract 3,062 1 18 170

Highly skilled production (levels 6-8) Contract 13,168 4.5 59 223

Highly skilled supervision (levels 9-12) Contract 38,631 13.7 89 454

Senior and Top management (levels 13-16) Contract 7,972 2.7 10 797

Periodical Remuneration 5,521 1.9 7 789

Total 282,267 96.4 770 370

Table 3.1.3 Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for the period 1 April 2014 and 31 March 2015

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

personnel costs

Amount (R’000)

Medical aid as a % of

personnel costs


69,819 74.2 404 0.4 2,301 2.4 3,735 4


10,844 74.5 1 - 301 2.1 482 3.3


52,836 70.9 52 0.1 1,561 2.1 2,667 3.6


85,932 77.1 302 0.3 2,254 2 2,600 2.3

Total 219,431 74.5 759 0.3 6,417 2.2 9,484 3.2



Table 3.1.4 Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for the period 1 April 2014 and 31 March 2015

Salary band

Salaries Overtime Home Owners Allow-ance

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 (level 1-2) 389 68 - - 30 5.2 53 9.3

Skilled (level 3-5) 12,959 68.1 19 0.1 1,189 6.2 1,385 7.3

Highly skilled produc-tion (levels 6-8)

63,716 70.6 456 0.5 2,704 3 4,868 5.4

Highly skilled supervi-sion (levels 9-12

60,765 71 227 0.3 1,479 1.7 2,567 3

Senior management (level 13-16)

18,351 76 - - 591 2.4 418 1.7

Skilled (level 1-2) Contract

1,093 97.3 - - - - - -

Skilled (level 3-5) Contract

3,042 98.9 18 0.6 - - - -

Highly skilled pro-duction (levels 6-8) Contract

13,123 99.6 15 0.1 - - - -

Highly skilled super-vision (levels 9-12) Contract

38,812 89 24 0.1 145 0.3 163 0.4

Senior management (level 13-16) Contract

7,181 83.4 - - 281 3.3 30 0.3

Total 219,431 74.5 759 0.3 6,419 2.2 9,484 3.2



3.2. Employment and Vacancies

Table 3.2.1 Employment and vacancies by programme as on 31 March 2015

Programme Number of posts on approved

establishment

Number of posts filled

Vacancy Rate Number of employees

additional to the establishment

Programme 1. Administration 290 245 15.5 26


36 35 2.8 1


171 171 - -


319 312 2.2 116

Total 816 763 6.5 143

Table 3.2.2 Employment and vacancies by salary band as on 31 March 2015

Salary band Number of posts on approved

establishment




Lower skilled ( 1-2) 3 3 - -

Skilled(3-5) 131 123 6.1 -

Highly skilled production (6-8) 295 278 5.8 -

Highly skilled supervision (9-12) 185 159 14.1 -

Senior management (13-16) 26 24 7.7 -

Skilled(3-5) Contract 18 18 - 11

Highly skilled production (6-8) Contract 59 59 - 56

Highly skilled supervision (9-12) Contract 89 89 - 70

Senior management (13-16) Contract 10 10 - 6

Total 816 763 6.5 143



Table 3.2.3 Employment and vacancies by critical occupations as on 31 March 2015

Critical occupation Number of posts on approved

establishment




Administrative related, Permanent 154 143 7.1 27

Agriculture related, Permanent 2 2 - 2

All artisans in the building metal machinery etc., Permanent

20 20 - -

Architects town and traffic planners, Permanent

15 15 - 15

Artisan project and related superintendents, Permanent

2 2 - -

Authors journalists and other writers, Permanent

1 1 - -

Auxiliary and related workers, Permanent

3 3 - -

Bus and heavy vehicle drivers, Permanent

1 1 - -

Cartographic surveying and related technicians, Permanent

1 1 - -

Civil engineering technicians, Permanent

6 6 - -

Cleaners in offices workshops hospitals etc., Permanent

32 29 9.4 3

Client inform clerks(switchb recept inform clerks), Permanent

5 5 - -

Communication and information related, Permanent

3 3 - -

Community development workers, Permanent

14 14 - 14

Computer system designers and analysts., Permanent

1 1 - -

Engineering sciences related, Permanent

3 3 - 2

Engineers and related professionals, Permanent

27 26 3.7 19

Finance and economics related, Permanent

12 6 50 -

Financial and related professionals, Permanent

1 1 - -

Financial clerks and credit controllers, Permanent

61 56 8.2 10

Food services aids and waiters, Permanent

1 1 - -

General legal administration & rel. professionals, Permanent

1 1 - -



Critical occupation Number of posts on approved

establishment




Head of department/chief executive officer, Permanent

1 1 - -

Human resources & organisat developm & relate prof, Permanent

19 17 10.5 -

Human resources clerks, Permanent

31 29 6.5 11

Human resources related, Permanent

20 14 30 -

Information technology related, Permanent

4 4 - -

Inspectors of apprentices works and vehicles,

60 60 - -

Permanent Language practitioners interpreters & other commun, Permanent

1 1 - -

Legal related, Permanent 6 5 - 2

Library mail and related clerks, Permanent

17 14 17.6 -

Light vehicle drivers, Permanent 13 13 - -

Logistical support personnel, Permanent

4 3 25 -

Material-recording and transport clerks, Permanent

11 7 36.4 -

Messengers porters and deliverers, Permanent

4 3 25 -

Other administrat & related clerks and organisers, Permanent

64 63 16 -

Other administrative policy and related officers, Permanent

100 98 2 2

Other information technology personnel., Permanent

2 1 50 -

Quantity surveyors & rela prof not class elsewhere, Permanent

5 5 - 3

Risk management and security services, Permanent

3 2 33.3 -

Secretaries & other keyboard operating clerks, Permanent

27 25 7.4 -

Senior managers, Permanent 24 23 4.2 4

Trade labourers, Permanent 34 34 - -

TOTAL 816 763 6.5 143



3.3. Filling of SMS Posts

Table 3.3.1 SMS post information as at 31 March 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

Director-General/ Head of Department Contract

1 1 100 - -

Salary Level 16 - - - - -

Salary Level 15 2 2 50 1 50


Salary Level 13 20 20 45 9 45

Salary Level 14 Contract 3 3 - - -

Salary Level 13 Contract 4 4 - - -

Table 3.3.2 SMS post information as at 31 March 2015


posts





Director-General/ Head of Department Contract

1 1 100 - -

Salary Level 16



Salary Level 13 19 19 65.5 10 34.5

Salary Level 14 Contract

3 3 - - -

Salary Level 13 Contract

4 4 - - -

Total 31 31 63.2 15 62.5



Table 3.3.3 Advertising and filling of SMS posts for the period 1 April 2014 and 31 March 2015


posts





Director-General/ Head of Department

- - - - -




Salary Level 13 1 1 100 - -

Total 1 1 100 - -

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 2014 and 31 March 2015

Reasons for vacancies not advertised within six months

Not Applicable

Reasons for vacancies not filled within six months

Not Applicable

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 and 31 March 2015

Reasons for vacancies not advertised within six months

Not Applicable

Reasons for vacancies not filled within six months

Not Applicable

3.4. Job Evaluation

Within a nationally determined framework, executing authorities may evaluate or re-evaluate any job in his or her organisation. In terms of the Regulations all vacancies on salary levels 9 and higher must be evaluated before they are filled. The following table summarises the number of jobs that were evaluated during the year under review. The table also provides statistics on the number of posts that were upgraded or downgraded.



Table 3.4.1 Job Evaluation by Salary band for the period 1 April 2014 and 31 March 2015

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) - - - - - - -

Skilled (Levels 3-5) - - - - - - -

Highly skilled production (Levels 6-8)

- - - - - - -

Highly skilled supervision

(Levels 9-12)

- - - - - - -

Senior Management Service Band A

- - - - - - -

Senior Management Service Band B

- - - - - - -

Senior Management Service Band C

- - - - - - -

Senior Management Service Band D

- - - - - - -

Total - - - - - - -

The following table provides a summary of the number of employees whose positions were upgraded due to their post being upgraded. The number of employees might differ from the number of posts upgraded since not all employees are automatically absorbed into the new posts and some of the posts upgraded could also be vacant.

Table 3.4.2 Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1 April 2014 and 31 March 2015

Gender African Asian Coloured White Total

Female - - - - -

Male - - - - -

Total - - - - -

Employees with a disability -

The following table summarises the number of cases where remuneration bands exceeded the grade determined by job evaluation. Reasons for the deviation are provided in each case.



Table 3.4.3 Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2014 and 31 March 2015

Occupation Number of employees Job evaluation level Remuneration level Reason for deviation

- - - - -

Total number of employees whose salaries exceeded the level determined by job evaluation -

Percentage of total employed -

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 2014 and 31 March 2015

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

3.5. Employment Changes

This section provides information on changes in employment over the financial year. Turnover rates provide an indication of trends in the employment profile of the department. The following tables provide a summary of turnover rates by salary band and critical occupations.

Table 3.5.1 Annual turnover rates by salary band for the period 1 April 2014 and 31 March 2015

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

2014

Appointments and transfers

into the department

Terminations and transfers

out of the department

Turnover rate

Lower skilled (Levels 1-2) 5 - - -

Skilled (Levels 3-5) 118 9 5 4.2

Highly skilled production (Levels 6-8) 283 12 16 5.7

Highly skilled supervision (Levels 9-12) 137 5 7 5.1

Senior Management Service Bands A 18 - - -

Senior Management Service Bands B 2 - - -

Senior Management Service Bands C 2 - - -

Senior Management Service Bands D 1 - - -

Lower skilled (Levels 1-2) Contract 54 - 42 77.8

Skilled (Levels 3-5) Contract 9 3 15 166.7

Highly skilled production (Levels 6-8) Contract 44 20 4 9.1

Highly skilled supervision (Levels 9-12) Contract 72 14 - -

Senior Management Service Bands A Contract 4 1 - -

Senior Management Service Bands B Contract 3 1 1 33.3

TOTAL 752 65 90 12



Table 3.5.2 Annual turnover rates by critical occupation for the period 1 April 2014 and 31 March 2015

Critical occupation Number of employees at beginning of period-April

2014


into the department



Turnover rate

Administrative related, Permanent 139 22 22 15.8

Agriculture related, Permanent 2 - - -


19 - - -

Architects town and traffic planners, Permanent 6 7 - -


- 1 - -

Attorneys Permanent 1 - - -

Authors journalists and other writers, Permanent - 1 - -

Auxiliary and related workers, Permanent 3 - 1 33.3

Bus and heavy vehicle drivers, Permanent 2 - - -


2 - - -

Civil engineering technicians, Permanent 6 - - -


40 2 1 2.5


4 1 - -


3 - - -

Community development workers, Permanent 6 5 - -


1 - - -

Engineering sciences related, Permanent 1 2 - -

Engineers and related professionals, Permanent 18 7 1 5.6

Finance and economics related, Permanent 7 - 2 28.6

Financial and related professionals, Permanent 2 - - -

Financial clerks and credit controllers, Permanent 51 1 6 11.8

Food services aids and waiters, Permanent 1 - - -


3 - 1 33.3


1 - - -

Human resources & organisational development & relate prof, Permanent

17 - - -

Human resources clerks, Permanent 32 - 7 21.9

Human resources related, Permanent 7 - - -



Critical occupation Number of employees at beginning of period-April

2014


into the department



Turnover rate

Information technology related, Permanent 2 1 - -

Inspectors of apprentices works and vehicles, 59 2 1 1.7

Legal related, Permanent 4 - - -

Library mail and related clerks, Permanent 9 2 - -

Light vehicle drivers, Permanent 8 1 - -

Logistical support personnel, Permanent 2 1 - -


5 3 2 40

Messengers porters and deliverers, Permanent 3 - 1 33.3

Other administration & related clerks and organisers, Permanent

105 1 37 35.2


106 1 4 3.8


1 - - -


4 - - -


1 - - -


21 3 3 14.3

Security Guards Permanent 3 - - -

Security officers Permanent 1 - - -

Senior managers, Permanent 18 1 1 5.6

Trade labourers, Permanent 24 - - -

Trade related, Permanent 1 - - -

Trade/industry advisers & other related profession 1 - - -

TOTAL 752 65 90 12



The table below identifies the major reasons why staff left the department.

Table 3.5.3 Reasons why staff left the department for the period 1 April 2014 and 31 March 2015

Termination Type Number % of Total Resignations

Death 2 2.2

Resignation 16 17.8

Expiry of contract 60 66.7

Dismissal – operational changes - -

Dismissal – misconduct 1 1.1

Dismissal – inefficiency - -

Discharged due to ill-health - -

Retirement 11 12.2

Transfer to other Public Service Departments

- -

Other - -

Total 90 100

Total number of employees who left as a % of total employment

12

Table 3.5.4 Promotions by critical occupation for the period 1 April 2014 and 31 March 2015

Occupation Employees 1 April 2014

Promotions to another salary level

Salary level promotions

as a % of employees

by occupation

Progressions to another

notch within a salary level

Notch progression

as a % of employees by

occupation

Administrative related, Permanent 139 - 6.5 53 38.1

Agriculture related, Permanent 2 - - - -


19 - - 20 105.3


6 - - 1 16.7

Attorneys Permanent 1 - - - -


- 1 - - -

Auxiliary and related workers, Permanent 3 - - 2 66.7

Bus and heavy vehicle drivers, Permanent 2 - - 1 50


2 - - 1 50

Civil engineering technicians, Permanent 6 - - 1 16.7


40 1 2.5 21 52.5






as a % of employees

by occupation



Notch progression


occupation

Client inform clerks(switch board reception inform clerks), Permanent

4 - - 3 75


3 - - - -

Community development workers, Permanent

6 1 16.7 1 16.7


1 - - 1 100

Engineering sciences related, Permanent 1 - - - -


18 - - 3 16.7

Finance and economics related, Permanent 7 - - 6 85.7


2 - - 1 50


51 3 5.9 6 11.8

Food services aids and waiters, Permanent 1 - - 1 100


3 - - 1 33.3


1 - - - -

Human resources & organisational development & relate prof, Permanent

17 1 5.9 11 64.7

Human resources clerks, Permanent 32 1 3.1 10 31.3

Human resources related, Permanent 7 2 28.6 6 85.7

Information technology related, Permanent 2 - - 1 50

Inspectors of apprentices works and vehicles,

59 - - 21 35.6

Legal related, Permanent 4 - - 3 75

Library mail and related clerks, Permanent 9 - - 10 111.1

Light vehicle drivers, Permanent 8 4 50 6 75

Logistical support personnel, Permanent 2 1 50 1 50


5 2 40 3 60


3 - - 2 66.7

Other administrators & related clerks and organisers, Permanent

105 2 1.9 55 52.4






as a % of employees

by occupation



Notch progression


occupation


106 1 0.9 84 79.2


1 - - 1 100


4 - - - -

Road Workers 1 - - - -


21 3 14.3 12 57.1

Security Guards Permanent 3 - - 1 33.3

Security officers Permanent 1 - - - -

Senior managers, Permanent 18 1 5.6 2 11.1

Trade labourers, Permanent 24 - - 23 95.8

Trade related, Permanent 1 - - - -

Trade/industry advisers & other related profession

1 - - - -

TOTAL 752 33 4.4 376 50

Table 3.5.5 Promotions by salary band for the period 1 April 2014 and 31 March 2015

Salary Band Employees 1 April 2014


Salary bands promotions

as a % of employees by salary

level



Notch progression as

a % of

employees by salary bands

Lower skilled (Levels 1-2) 5 - - 1 20

Skilled (Levels 3-5) 118 5 4.2 82 69.5

Highly skilled production (Levels 6-8) 283 13 4.6 177 62.5

Highly skilled supervision (Levels 9-12) 137 10 7.3 95 69.3

Senior Management (Level 13-16) 23 2 8.7 2 8.7

Lower skilled (Levels 1-2) Contract 54 - - - -

Skilled (Levels 3-5) Contract 9 - - - -

Highly skilled production (Levels 6-8) Contract

44 2 4.5 1 2.3

Highly skilled supervision (Levels 9-12) Contract

72 1 1.4 17 23.6

Senior Management (Level 13-16) Contract

7 - - 1 14.3

TOTAL 752 33 4.4 376 50



3.6. Employment Equity

Table 3.6.1 Total number of employees (including employees with disabilities) in each of the following occupational categories as at 31 March 2015

Occupational category Male Female Total

African Coloured Indian White African Coloured Indian White

Legislators, senior officials and managers

10 1 1 1 7 2 2 - 24

Professionals 46 2 6 1 54 1 10 1 121

Technicians and associate professionals

89 7 24 6 102 6 12 8 254

Clerks 54 3 20 2 107 5 10 7 199

Service and sales workers 1 - 1 - - - - - 2

Craft and related trades workers

56 2 11 4 9 - - - 82

Plant and machine operators and assemblers

10 1 - - 3 - - - 14

Elementary occupations 56 7 3 - 11 - - - 67

Total 303 23 66 14 293 14 34 16 763

Employees with disabilities

10 2 1 - 1 - - 1 15

Table 3.6.2 Total number of employees (including employees with disabilities) in each of the following occupational bands as at 31 March 2015

Occupational band Male Female Total


Top Management 1 - - - - - 1 - 2

Senior Management 8 1 2 1 6 1 3 - 22

Professionally qualified and experienced specialists and mid-management

61 5 22 6 49 2 11 3 159

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

82 5 30 7 118 9 15 12 278

Semi-skilled and discretionary decision making

67 9 5 - 42 - - - 123

Unskilled and defined decision making

2 1 - - - - - - 3

Top Management Contract - - - - - 1 - - 1

Senior Management Contract

2 - 2 - 4 - - 1 9





Professionally qualified and experienced specialists and mid-management Contract

54 2 5 - 24 - 4 - 89

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

17 - - - 41 1 - - 59

Semi-skilled and discretionary decision making Contract

9 - - - 9 - - - 18

TOTAL 303 23 66 14 293 14 34 16 763

Table 3.6.3 Recruitment for the period 1 April 2014 to 31 March 2015




1 - 2 - 2 - - - 5


5 - - - 6 1 - - 12


4 - - - 5 - - - 9


2 - - - - - - - 2


6 - 3 - 4 - 1 - 14

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

8 - - - 12 - - - 20


3 - - - - - - - 3

Total 29 - 5 - 29 1 1 - 65


1 - 1 - - - - - 2



Table 3.6.4 Promotions for the period 1 April 2014 to 31 March 2015



Top Management - - - - - - 1 - 1

Senior Management 1 - - - 1 - 1 - 3


36 1 14 4 36 1 10 3 105


69 3 17 4 70 7 10 10 190


53 8 3 - 23 - - - 87

Unskilled and defined decision making

- - - - 1 - - - 1


1 - - - - - - - 1


12 1 - - - 5 - - 18

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

1 - - - 2 - - - 3

Total 173 13 34 8 138 8 22 13 409


5 1 - - 1 - - - 7



Table 3.6.5 Terminations for the period 1 April 2014 to 31 March 2015




1 - 2 - 3 - - 1 7


5 1 3 - 6 - 1 - 16


4 1 - - - - - - 5


1 - - - - - - - 1


1 - - - 3 - - - 4


3 - - - 12 - - - 15

Unskilled and defined decision making Contract

16 - 2 - 22 - 2 - 42

Total 31 2 7 - 46 - 3 1 90

Employees with Disabilities

- - - - - - - - -

Table 3.6.6 Disciplinary action for the period 1 April 2014 to 31 March 2015

Disciplinary action/sanctions

Male Female Total

African Coloured Indian White African Co-loured

Indian White

Final Written Warnings 1 - 1 - - - - - 2

Written Warnings 1 - - - 1 - - - 2

Suspensions Without Pay 1 - - - - - - - 1

Precautionary Suspen-sions

1 - - - - - - - 1

Dismissals 1 1 - - 1 1 - - 4

Case Withdrawn 1 - - - - - - - 1

Case Dismissed 1 - - - - - - - 1

Total 7 1 1 - 2 1 - - 2



Table 3.6.7 Skills development for the period 1 April 2014 to 31 March 2015

Occupational category Male Female Total



37 1 4 - 38 - 3 - 83

Professionals 24 4 9 - 74 3 3 - 117


61 2 7 2 85 5 8 4 174

Clerks 37 3 8 2 52 - 3 7 112

Service and sales workers - - - - - - - - -

Skilled agriculture and fishery workers

6 - - - - - - 6


- - - - - - - - -


- 7 - - 2 - - - 9

Elementary occupations 4 - - - - - - - 4

Total 169 17 28 4 251 8 17 11 505

Employees with disabilities - - - - - - - - -

3.7. Signing of Performance Agreements by SMS Members

All members of the SMS must conclude and sign performance agreements within specific timeframes. Information regarding the signing of performance agreements by SMS members, the reasons for not complying within the prescribed timeframes and disciplinary steps taken is presented here.

Table 3.7.1 Signing of Performance Agreements by SMS members as at 31 May 2014

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 3.2

Salary Level 16 - - - -

Salary Level 15 2 2 2 6.5

Salary Level 14Equitable Share

3 3 2 6.6

Salary Level 14OPSCAP funding

1 1 1 3.2

Salary Level 13Equitable Share

22 22 17 54.8

Salary Level 13OPSCAP funding

2 2 2 6.5

Total 31 31 25 80.7



Table 3.7.2 Reasons for not having concluded Performance agreements for all SMS members as at 31 May 2014

Reasons

• New appointments

• Change of Job functions

Table 3.7.3 Disciplinary steps taken against SMS members for not having concluded Performance agreements as at 31 May 2014

Reasons

Not applicable

3.8 Performance Rewards

To encourage good performance, the department has granted the following performance rewards during the year under review. The information is presented in terms of race, gender, disability, salary bands and critical occupations.

Table 3.8.1 Performance Rewards by race, gender and disability for the period 1 April 2014 to 31 March 2015

Race and Gender

Beneficiary Profile Cost

Number of beneficiaries

Number of employees

% of total within group

Cost (R’000) Average cost per employee (R’000)

African

Male 109 293 37.2 1,165 11

Female 123 292 42.1 1,475 12

Asian

Male 43 65 66.2 573 13

Female 22 34 64.7 325 15

Coloured

Male 12 21 57.1 123 10

Female 9 14 64.3 148 16

White

Male 4 14 28.6 45 11

Female 10 15 66.7 118 12

Total 338 763 44.3 4,024 12



Table 3.8.2 Performance Rewards by salary band for personnel below 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 employees

% of total within salary

bands

Total Cost (R’000)

Average cost per

employee (R’000)

Lower Skilled (Levels 1-2) 1 3 33.3 4 4 -

Skilled (level 3-5) 63 123 51.2 305 5 0.12

Highly skilled production (level 6-8)

169 278 60.8 1,734 10 0.67

Highly skilled supervision (level 9-12)

88 159 55.3 1,570 18 0.61

Skilled (level 3-5) Contract - 18 - - - -

Highly skilled production (level 6-8) Contract

1 59 1.7 9 9 -

Highly skilled supervision (level 9-12) Contract

12 89 13.5 267 2 0.1

Total 334 736 45.4 3,889 12 1.50

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

Critical occupation



Number of employees

% of total within

occupation


Average cost per

employee

(R’000)

Administrative related, Permanent 54 143 37.8 1,020 19

Agriculture related, Permanent - 2 - - -


10 20 50 92 9


- 15 - - -


1 2 50 4 4


- 1 - - -

Auxiliary and related workers, Permanent 2 3 66.7 10 5

Bus and heavy vehicle drivers, Permanent - 1 - - -


- 1 - - -

Civil engineering technicians, Permanent - 6 - - -


12 29 41.4 51 4



Critical occupation



Number of employees

% of total within

occupation


Average cost per

employee

(R’000)


3 5 60 15 5


1 3 33.3 13 13

Community development workers, Permanent - 14 - - -


- 1 - - -

Engineering sciences related, Permanent 1 3 33.3 16 16


2 26 7.7 70 35

Finance and economics related, Permanent 7 6 116.7 131 19


- 1 - - -


43 56 76.8 442 10

Food services aids and waiters, Permanent - 1 - - -


- 1 - - -


- 1 - - -

Human resources & organisat developm & relate prof, Permanent

10 17 58.8 144 14

Human resources clerks, Permanent 8 29 27.6 53 6

Human resources related, Permanent 4 14 28.6 56 14

Information technology related, Permanent - 4 - - -

Inspectors of apprentices works and vehicles, 12 60 20 155 13

Permanent Language practitioners interpreters & other commun, Permanent

1 1 100 13 13

Legal related, Permanent 2 6 33.3 57 29

Library mail and related clerks, Permanent 7 14 50 59 8

Light vehicle drivers, Permanent 7 13 53.8 32 5

Logistical support personnel, Permanent 1 3 33.3 11 11


3 7 42.9 27 9


1 3 33.3 4 4

Other administrat & related clerks and organisers, Permanent

46 63 73 452 10



Critical occupation



Number of employees

% of total within

occupation


Average cost per

employee

(R’000)


69 98 70.4 863 13


- 1 - - -


1 5 20 9 9


- 2 - - -


8 25 32 71 9

Senior managers, Permanent 2 23 8.7 69 35

Trade labourers, Permanent 20 34 58.8 84 4

TOTAL 338 763 44.3 4,023 12

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 employees

% of total within salary

bands


Average cost per employee

(R’000)

Band A 4 26 15.4 135 34 0.6

Band B - 5 - - - -

Band C - 2 - - - -

Band D - 1 - - - -

Total 4 34 11.8 135 34 0.6



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 2014 and 31 March 2015

Salary band 01 April 2014 31 March 2015 Change

Number % of total Number % of total Number % Change

Lower skilled - - - - - -

Highly skilled production (Lev. 6-8) - - - - - -

Highly skilled supervision (Lev. 9-12) 1 100 1 100 - -

Contract (level 9-12) - - - - - -

Contract (level 13-16) - - - - - -

Total 1 100 1 100 - -

Table 3.9.2 Foreign workers by major occupation for the period 1 April 2014 and 31 March 2015

Major occupation 01 April 2014 31 March 2015 Change

Number % of total Number % of total Number % Change

Legal 1 100 1 100 - -

Total 1 100 1 100 - -



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.

Table 3.10.1 Sick leave for the period 1 January 2014 to 31 December 2014

Salary band Total days % Days with Medi-cal certifi-

cation

Number of Employees using sick

leave

% of total employees using sick

leave

Average days per employee

Estimat-ed Cost (R’000)

Lower Skills (Level 1-2) 7 42.9 1 0.2 7 3

Skilled (levels 3-5) 855 87.5 86 14.9 10 459

Highly skilled production (levels 6-8) 2 199 77 245 42.5 9 2,463

Highly skilled supervision (levels 9 -12) 904 83.4 108 18.8 8 1,686

Top and Senior management (levels 13-16)

119 84 20 3.5 6 382

Lower Skills (Level 1-2) Contract 75 69.3 21 3.6 4 17

Skilled (levels 3-5) Contract 62 37.1 24 4.2 3 36

Highly skilled production (levels 6-8) Contract

109 69.7 25 4.3 4 84

Highly skilled supervision (levels 9 -12) Contract

218 83.5 39 6.8 6 405

Top and Senior management (levels 13-16) Contract

35 97.1 7 1.2 5 129

Total 4,583 80 576 100 8 5,664

Table 3.10.2 Disability leave (temporary and permanent) for the period 1 January 2014 to 31 December 2014

Salary band Total days % Days with Medical

certification

Number of Employees

using disability

leave

% of total employees

using disability

leave

Average days per employee

Estimated Cost

(R’000)

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

Skilled (Levels 3-5) 173 100 8 29.6 22 108

Highly skilled production (Levels 6-8) 233 100 13 48.1 18 285

Highly skilled supervision (Levels 9-12) 131 100 4 14.8 33 198

Senior management (Levels 13-16) 10 100 1 3.7 10 31

Contract (level 9-12) 27 100 1 3.7 27 45

Total 574 100 27 100 21 667

The table below summarises the utilisation of annual leave. The wage agreement concluded with trade unions in the PSCBC in 2000 requires management of annual leave to prevent high levels of accrued leave being paid at the time of termination of service.



Table 3.10.3 Annual Leave for the period 1 January 2014 to 31 December 2014

Salary band Total days taken Number of Employees using annual leave

Average per employee

Lower skilled (Levels 1-2) 81 27 3

Skilled (Levels 3-5) 3,048 24 127


6,840 23 296

Highly skilled supervision(Levels 9-12)

3,752 22 168

Senior management (Levels 13-16)

558 22 25

Lower skilled (Levels 1-2) Contract

443 10 46

Skilled (Levels 3-5) Contract 323 10 32

Highly skilled production (Levels 6-8) Contract

734 13 58

Highly skilled supervision(Levels 9-12) Contract

1,224 15 82

Senior management (Levels 13-16) Contract

215 20 11

Total 17,218 20 848

Table 3.10.4 Capped leave for the period 1 January 2014 to 31 December 2014

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 2015

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

Skilled (Levels 3-5) 21 4 6 5,939


84 11 8 15,114

Highly skilled supervision (Levels 9-12)

2 2 1 7,328


- - - -

Total 107 7 15 28,381



The following table summarise payments made to employees as a result of leave that was not taken.

Table 3.10.5 Leave payouts for the period 1 April 2014 and 31 March 2015

Reason Total amount (R’000)

Number of em-ployees

Average per em-ployee (R’000)

Leave payout for 2014/2015 due to non-utilisation of leave for the previous cycle

- - -

Capped leave payouts on termination of service for 2014/2015

1,903 35 54,371

Current leave payout on termination of service for 2014/2015

274 16 17,125

Total 2,177 51 42,686

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 (tick the applicable boxes and provide the required information)

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.

X The Senior Manager: Human Resources Management is responsible for the management of HIV/AIDS Programme. HIV/AIDS Management is included in the Performance Agreement.

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.

X Mr. VB. Mdletshe, the Assistant Manager: EWP is responsible for co-ordination of HIV/AIDS initiatives.

3. Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme.

X The EWP was officially launched on the 4 July 2003, EWP sub programme are: Alcohol & drug abuse, visits to ill employees, HIV/AIDS programme & counselling, Rehabilitation, Supervisor & Management training in the identification and referral of uncoping employee, Health Promotion (TB, STI’s, Cancer), Family & marital counselling, Financial Life Skills, Domestic Violence, Work Retrenchment counselling, Dealing with strife, Parenting Skills, Women, Disability and AIDS Day Programs.



Question Yes No Details, if yes

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.

X The Department does not have an established HIV/AIDS Committee.

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.

X

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.

X

7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved.

X

8. Has the department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators.

X

3.12 Labour Relations

Table 3.12.1 Collective agreements for the period 1 April 2014 and 31 March 2015

Subject matter Date

Resolution 1 of 2014 (Transfer and placement of staff in the reconfiguration of Departments)

01 July 2014

Resolution 5 of 2014 (Recognition of improved qualification in the Public Service) 19 August 2014

Resolution 3 of 2014 (Organizational rights agreement between the State and Organised labour)

07 July 2014

Resolution 4 of 2014 (Agreement in increase of levies: GPSSBC) 31 July 20114

Total number of Collective agreements 4



The following table summarises the outcome of disciplinary hearings conducted within the department for the year under review.

Table 3.12.2 Misconduct and disciplinary hearings finalised for the period 1 April 2014 and 31 March 2015

Outcomes of disciplinary hearings Number % of total

Correctional counselling - -

Verbal warning - -

Written warning 2 15

Final written warning 3 23

Suspended without pay 2 15

Fine 1 8

Demotion - -

Dismissal 3 23

Not guilty 1 8

Case withdrawn 1 8

Total 13 100

Total number of Disciplinary hearings finalised 10

Table 3.12.3 Types of misconduct addressed at disciplinary hearings for the period 1 April 2014 and 31 March 2015

Type of misconduct Number % of total

Abscondment 1 7

Absenteeism 3 21

Irregular expenditure 1 7

Wasteful expenditure 1 7

Drinking during office hours 2 15

Misuse of state vehicle 2 15

Theft 1 7

Disappearing during working hours 1 7

Threads 1 7

Submitting fraudulent documents 1 7

Total 14 100



Table 3.12.4 Grievances logged for the period 1 April 2014 and 31 March 2015

Grievances Number % of Total

Number of grievances resolved 11 79

Number of grievances not resolved 3 21

Total number of grievances lodged 14 100

Table 3.12.5 Disputes logged with Councils for the period 1 April 2014 and 31 March 2015

Disputes Number % of Total

Number of disputes upheld - -

Number of disputes dismissed 2 100

Total number of disputes lodged 2 100

Table 3.12.6 Strike actions for the period 1 April 2014 and 31 March 2015

Total number of persons working days lost -

Total costs working days lost -

Amount recovered as a result of no work no pay (R’000) -

Table 3.12.7 Precautionary suspensions for the period 1 April 2014 and 31 March 2015

Number of people suspended 1

Number of people whose suspension exceeded 30 days 1

Average number of days suspended 97 days

Cost of suspension (R’000) 49,248



3.13 Skills development

This section highlights the efforts of the department with regard to skills development.

Table 3.13.1 Training needs identified for the period 1 April 2014 and 31 March 2015

Occupational category

Gender Number of employees

as at 1 April 2014

Training needs identified at start of the reporting period

Learnerships Skills Programmes & other short courses

Other forms of training

Total


Female 13 - * Project Management * Conflict Management* Financial Management * Supervisory course * Para-Legal course * Executive Development

Programme* Ms Project

- 13

Male 10 - - 10

Professionals Female 12 - * Supervisory course * Moderator course * Conflict management * Financial Management * Project Management * Para-Legal course * Ms Project * Time Management * Communication * Property Management

- 12

Male 23 - - 23


Female 29 - * Project Management * Financial Management * Para-Legal course * Facilitation &

Presentation skills

- 29

Male 77 - - 77

Clerks Female 304 - * Project Management * Supervisory course * Property Management * Conflict Management * Financial Management * Supervisory course * Facilitation &

Presentation course * Property Management * Communication* Time management * Para-Legal course * Records Management * Registry Management

course * Moderator course

- 304

Male 234 - - 234





as at 1 April 2014




Total

Service and sales workers

Female - - * Recognition of Prior Learning Assessment : Plumbing

* Recognition of Prior Learning Assessment : Carpentry

* * Recognition of Prior Learning Assessment : Painting

* Recognition of Prior Learning Assessment : Bricklaying

* Recognition of Prior Learning Assessment : Electrical

* Artisan Development Training : Plumbing

- -

Male 8 - - 8


Female 3 - * Artisan Development training : Bricklaying

* Artisan Development training : Carpentry

* Artisan Development training : Plumbing, Welding and Electrical

* Recognition of Prior Learning Assessment : Electrical

- 3

Male 21 - - 21


Female - - - - -

Male - - - - -


Female 1 - * Communication * Artisan Development

Training : Plumbing and Electrical

* Recognition of Prior Learning Assessment : Painting

- 1

Male 13 - - 13





as at 1 April 2014




Total

Elementary occupations

Female 13 - * Recognition of Prior Learning Assessment : Plumbing

* Recognition of Prior Learning Assessment : Carpentry

* Recognition of Prior Learning Assessment : Painting

* Artisan Development Training : Bricklaying

* Recognition of Prior Learning Assessment : Bricklaying and Welding

* Artisan Development Training : Electrical

- 13

Male 24 - - 24

Sub Total Female 375 - - 375

Male 410 - - 410

Total 785 - - 785



Table 3.13.2 Training provided for the period 1 April 2014 and 31 March 2015


Gender Number of employees as at 1 April

2014

Training provided within the reporting period



Total


Female 41 - * Applying Safety, Health and Environmental Principles & Procedures

* Introduction to Safety Management Training Course

* Occupational Health and Safety Training

* Labour Law Conference * Induction for Senior Managers

(SMS) * Annual Business Process

Management * Organisational Design and

Development Conference * Workforce Planning Masterclass * Financial Literacy * Woman in Management * Legislative Drafting Programme * Ms Word 2010 Level 1 * Compulsory Induction Programme

(CIP) Orientation and Module 1 * Travelling Allowance Workshop * Ms Project Level 1 * First Aid Level 1 * Fire Fighting Level 1

- 41

Male 42 - - 42

Professionals Female 80 - * Applying Safety, Health and Environmental Principles & Procedures


* Compulsory Induction Programme (CIP) Module 2

* Organisational Design and Development Conference

* Annual Business Process Management

* Property Management Training * Financial Literacy * Mentoring for Growth* IsiZulu Classes* Women in Management * Supervisory Skills * Mentoring for Growth * Compulsory Induction Programme

(CIP) Orientation & Module 1* Project Management course * Introduction to computer course * Ms Word 2010 Level 1

- 80

Male 37 - - 37





2014




Total

* Travelling Allowance Workshop * Ms Word 2010 Level 2 * Breaking the Barriers into the

Public Service * Ms Excel Level 1* First Aid Level 1 * Fire Fighting Level 1


Female 102 - * Applying Safety, Health and Environmental Principles & Procedures

* Introduction to Safety Management Training Course


* Compulsory Induction Programme (CIP) Module 2

* Workforce Planning Masterclass * Property Management Training * Breaking the Barriers into Public

service* Financial Literacy* Mentoring for Growth * UNGIS Photogrammetry

Workshop * 5th Annual GIS Summit 2014* IsiZulu Classes* Supervisory course * Compulsory Induction Programme

(CIP) Orientation & Module 1 * Legislative Drafting Programme * Ms Word 2010 Level 1 * Supervisory course (Block 2) * Travelling Allowance Workshop * Ms Word 2010 Level 2* Breaking the Barriers into the

Public Service * Ms Excel Level 1* First Aid Level 1 * Fire Fighting Level 1

- 102

Male 68 - - 68

Clerks Female 62 - * Assessor course * Occupational Health and Safety

Training * Compulsory Induction Programme

(CIP) Module 2 * Property Management Training * Breaking the Barriers into Public

service* Mentoring for Growth * IsiZulu Classes

- 62

Male 54 - - 54





2014




Total

* Woman in Management * Compulsory Induction Programme

(CIP) Orientation & Module 1* Legislative Drafting Programme * Ms Word 2010 Level 1* Supervisory course (Block 2)* Travelling Allowance Workshop * Ms Word 2010 Level 2 * Applying Safety, Health &

Environmental Principles & Procedures (ASHEPP)

* Ms Excel Level 1 * First Aid Level 1 * Fire Fighting Level 1

Service and sales workers

Female - - - - -

Male - - - - -


Female - - * Occupational Health and Safety Training

* Financial Literacy * Applying Safety, Health &


- -

Male 6 - - 6


Female - - - - -

Male - - - - -


Female 2 - * Occupational Health and Safety Training

* Compulsory Induction Programme (CIP) Orientation & Module 1

* Ms Word 2010 Level 1 * Ms Word 2010 Level 2 * Applying Safety, Health &


* Ms Excel Level 1 * First Aid Level 1

- 2

Male 7 7

Elementary occupations

Female - - *Financial Literacy - -

Male 4 - - 4

Sub Total Female 287 - - - 287

Male 218 - - - 218

Total 505 - - - 505



3.14. 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 2014 and 31 March 2015

Nature of injury on duty Number % of totalRequired basic medical attention only 2 100Temporary Total Disablement - -Permanent Disablement - -Fatal - -Total 2 100

3.15. Utilisation of Consultants

Table 3.15.1 Report on consultant appointments using appropriated funds for the period 1 April 2014 and 31 March 2015

Project title Total number of consultants that worked on

project

Duration

(work days)

Contract value in

Rand

Appointment of a multi-disciplinary project team to undertake assessment and social survey at the Khwezi Hostel Umtshezi Municipality

Anticipated period of 12 months

500,000

Appointment of a multi-disciplinary project team to undertake assessment and social survey at the East Street Hostel PMB

Anticipated period of 12 months

1,500,000

Appointment of an independent professional Land Surveyor to undertake a comprehensive land survey of the Townview Rectification project as requested by the state attorney’s office in order to support the compiling of a damages report.

4 weeks 283,889

Appointment of consultants to provide an expert opinion for the Cato Crest court eviction process

8 hours 29,640

Appointment of an Auctioneer to Auction disposed State vehicles for a period of 12 months

12 months 1%

Appointment of an independent Expert in the M.F.P. Consulting CC. Court matter

For the duration of the court case

1,538 per hour

Shayamoya Social Facilitator: Appointment of the service provider to undertake assessment of the building for the purpose of rectifying and regularising the development

Service provider appointed on hourly basis of 100 hours anticipation

116,380

Appointment of a professional team to design and costing of typologies for use as standard design and costing for rural and urban projects KZN

Service providers will be appointed on hourly basis.

Appointment of a professional team to design and costing of typologies for use as standard design and costing all community residential projects in KZN

Service providers will be appointed on hourly basis.

1,088,483

Table 3.15.2 Analysis of consultant appointments using appropriated funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2014 and 31 March 2015

Total number of projects Total individual consultants

Total duration

Work days

Total contract value in Rand

In respect of the information provided on the table above, there are 8 projects in total

12 individual consultants



Table 3.15.3 Report on consultant appointments using Donor funds for the period 1 April 2014 and 31 March 2015

Project title Total Number of consultants that worked

on project

Duration

(Work days)

Donor and contract value in Rand

- - - -

Total number of projects Total individual consultants Total duration

Work days

Total contract value in Rand

- - - -

Table 3.15.4 Analysis of consultant appointments using Donor funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2014 and 31 March 2015

Project title Percentage ownership by HDI groups

Percentage management by

HDI groups

Number of consultants

from HDI groups that work on the

projectAppointment of a multi-disciplinary project team to undertake assessment and social survey at the Khwezi Hostel Umtshezi Municipality

1. Ihlathi Trading 21CC -Architecture – 100%

2. Henwood and Nxumalo Consulting – civil/structural engineering – 55%

3. Ibuya consulting engineers – electrical engineer – 80%

4. Six Bar Trading quantity surveying – 100%

P/O100% M/C. 25

P/O 55% M/C. 20

P/O 80% M/C. 25

P/O 100% M/C. 25

Appointment of a multi-disciplinary project team to undertake assessment and social survey at the East Street Hostel U PMB

1. Lungi Africa Quantity Surveyors – civil/structural engineering – 100%

2. Phumelela Farms and Projects – social facilitator – 100%

3. GIBB (PTY) LTD – Electrical Engineering – 67%

P/O 100% M/C 27

P/O 100% M/C 25

P/O 67% M/C 10Appointment of an independent professional Land Surveyor to undertake a comprehensive land survey of the Townview Rectification project as requested by the state attorney’s office in order to support the compiling of a damages report.

1. MHP Geomatics Incorporated – Land Surveyor – 0%

P/O 0% M/C zero

Appointment of consultants to provide an expert opinion for the Cato Crest court eviction process

1. Worley Parsons – consultant 30% P/O 30% M/C 8.55

Appointment of an Auctioneer to Auction disposed State vehicles for a period of 12

1. Spokes Auctioneers – 100% P/O 100% M/C 25

Appointment of an independent Expert in the M.F.P. Consulting CC. Court matter

1. Jeffares & Green (pty) LTD -35.74%

P/O 35.74 M/C 7.26



Project title Percentage ownership by HDI groups

Percentage management by

HDI groups

Number of consultants

from HDI groups that work on the

projectShayamoya Social Facilitator: Appointment of the service provider to undertake assessment of the building for the purpose of rectifying and regularising the development

1. Six Bar Trading 649 CC – 100% P/O 100% M/C 25

Appointment of a professional team to design and costing of typologies for use as standard design and costing for rural and urban projects KZN


2. MAP Africa - structural engineer – 100%

3. NCM Quantity Surveyor – Quantity Surveyor 100%

P/O 80% M/C. 25

P/O 100% M/C. 10

P/O 100% M/C. 25

Appointment of a professional team to design and costing of typologies for use as standard design and costing all community residential projects in KZN


2. Lungi Africa Quantity Surveyors – civil/structural engineering – 100%

3. Jeffares & Green (pty) LTD -35.74%

P/O 80% M/C. 25

P/O 100% M/C 27

P/O 35.74 M/C 7.26

3.16 Severance Packages

Table 3.16.1 Granting of employee initiated severance packages for the period 1 April 2014 and 31 March 2015

Salary band Number of applications received

Number of applications referred

to the MPSA

Number of applications

supported by MPSA

Number of packages approved by department

Lower skilled (Levels 1-2)

- - - -

Skilled Levels 3-5) - - - -


- - - -

Highly skilled supervision(Levels 9-12)

- - - -


- - - -

Total - - - -



Financial InformationPart E:



Report of the Auditor-General to the KwaZulu-Natal Provincial Legislature on Vote no. 8: 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 139 to

221 which comprise the appropriation statement, the statement of financial position as at 31 March 2015, 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 statements2. The accounting officer is responsible for the preparation and fair presentation of these financial statements in

accordance with the Modified Cash Standard (MCS) prescribed by the National Treasury and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Division of Revenue Act of South Africa, 2014 (Act No. 10 of 2014) (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-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 those risk assessments, the auditor considers internal control relevant to the department’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 department’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.

Opinion6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the

Department of Human Settlements as at 31 March 2015 and its financial performance and cash flows for the year then ended, in accordance with the MCS and the requirements of the PFMA and DoRA.

Emphasis of matters 7. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Significant uncertainty 8. With reference to note 20 to the financial statements, the department is the defendant in lawsuits relating to

breaches in contracts, services rendered and arbitration. The ultimate outcome of these matters cannot presently be determined and no provision for any liability that may result has been made in the financial statements.



Payables9. Payables which exceed the payment term of 30 days as required in Treasury Regulation 8.2.3 amount to R233,91

million. This amount, in turn, exceeds the voted funds to be surrendered of R14,19 million as per the statement of financial performance by R219,72 million. The amount of R219,72 million would therefore have constituted unauthorised expenditure had the amounts due been paid in a timely manner.

Report on other legal and regulatory requirements 10. 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 for 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.

Predetermined objectives11. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance

information for programme 2: housing needs research and planning on pages 40 to 42, programme 3: housing development on pages 43 to 48 as well as programme 4: housing assets management and property management on pages 49 to 50, presented in the department’s annual performance report for the year ended 31 March 2015.

12. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

13. 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.

14. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

15. I did not identify any material findings on the usefulness and reliability of the reported performance information for the housing needs research and planning, housing development, and housing assets management and property management programmes.

Additional matters16. Although I identified no material findings on the usefulness and reliability of the reported performance information

for the selected programmes, I draw attention to the following matters.

Achievement of planned targets17. Refer to the annual performance report on pages 37 to 50 for information on the achievement of the planned

targets for the year.

Compliance with legislation 18. I performed procedures to obtain evidence that the department had complied with applicable legislation regarding

financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows:



Annual financial statements19. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial

reporting framework, as required by section 40(1)(a) and (b) of the PFMA. Material misstatements of finance-linked individual subsidy programme commitments, property payments, contingent liabilities and irregular expenditure identified by the auditors in the submitted financial statements were subsequently corrected, resulting in the financial statements receiving an unqualified audit opinion.

Expenditure management20. Money owed by the department was not settled within 30 days, as required by section 38(1)(f) of the PFMA and

treasury regulation 8.2.3.

Internal control21. 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 findings on compliance with legislation included in this report.

Leadership22. Notwithstanding management oversight and monitoring, there were still inadequacies that resulted in the financial

statements not being thoroughly reviewed as well as instances of non-compliance with laws and regulations throughout the financial year.

Financial and performance management23. Management did not adequately reconcile and review the financial statements for completeness and accuracy,

resulting in material errors, misallocations and material misstatements.

Other reports

Investigations24. At the request of the department, Provincial Treasury performed six investigations between the period 1 April

2010 to 31 March 2015. These investigations were initiated based on allegations of bribery, corruption and procurement irregularities. Four investigations were concluded on 31 March 2015 resulting in two matters being reported to the South African Police Services and transferred to the Anti-Corruption Task Team. The date of completion of the other two reports and the remaining two matters in progress is not known.

25. At the request of the department, independent consulting firms performed two investigations between the period 1 April 2014 to 31 March 2015. These investigations were initiated based on allegations of supply chain management irregularities and one investigation was concluded on 31 March 2015 and the recommendations were referred to the municipality concerned, whilst the other investigation is still in progress and the date of completion is not known.

Pietermaritzburg29 July 2015



App

ropr

iatio

n pe

r pro

gram

me

2014

/15

2013

/14

Vote

d fu

nds

Adj

uste

d A

ppro

pria

tion

Shift

ing

of

Fund

sVi

rem

ent

Fina

l A

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Act

ual

Expe

nditu

reVa

rianc

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Expe

nditu

re

as %

of

final

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nditu

re

Prog

ram

me

R’0

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1.

Adm

inis

trat

ion

184,

394

--

184,

394

182,

847

1,54

799

.216

5,09

316

3,98

6

2. H

ousi

ng N

eeds

, R

esea

rch

and

Plan

ning

16,1

55-

(1,2

00)

14,9

5514

,223

732

95.1

14,5

9014

,115

3. H

ousi

ng D

evel

opm

ent

3,27

3,36

423

6,00

01,

200

3,51

0,56

43,

532,

420

(21,

856)

100.

63,

300,

532

3,27

0,96

1

4. H

ousi

ng A

sset

M

anag

emen

t, Pr

oper

ty

Man

agem

ent

148,

530

--

148,

530

143,

688

4,84

296

.716

8,15

516

7,94

0

Tota

l3,

622,

443

236,

000

-3,

858,

443

3,87

3,17

8(1

4,73

5)10

0.4

3,64

8,37

03,

617,

002

APPROPRIATION STATEMENTfor the year ended 31 March 2015



2014

/15

2013

/14

Fina

l A

ppro

pria

tion

Act

ual

Expe

nditu

reFi

nal

App

ropr

iatio

nA

ctua

l Ex

pend

iture

TOTA

L (b

roug

ht fo

rwar

d)3,

858,

443

3,87

3,17

83,

648,

370

3,61

7,00

2

Rec

onci

liatio

n w

ith s

tate

men

t of fi

nanc

ial p

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rman

ce

AD

D

Dep

artm

enta

l rec

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s28

,920

9,43

1

Act

ual a

mou

nts

per s

tate

men

t of fi

nanc

ial p

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rman

ce (t

otal

reve

nue)

3,88

7,36

33,

657,

801

AD

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Aid

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stan

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287

Act

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mou

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per s

tate

men

t of fi

nanc

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ce (t

otal

exp

endi

ture

)3,

873,

178

3,61

7,28

9




App

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nom

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2014

/15

2013

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Adj

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cla

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R’0

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4,94

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2.2

294,

645

287,

661

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pens

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ploy

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239,

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7,30

623

9,76

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,460

)10

1.0

204,

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ries

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4,29

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(1,7

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212,

561

215,

346

(2,7

85)

101.

318

3,49

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1,90

1

Soci

al c

ontri

butio

ns24

,782

-(3

7)24

,745

24,4

2032

598

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,536

20,1

47

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nd s

ervi

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116,

232

-1,

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117,

640

123,

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104.

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8-

186

664

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2,34

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292

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stru

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1,83

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Labo

rato

ry s

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--

--

--

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logi

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serv

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--

--

--

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-




App

ropr

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n pe

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nom

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ifica

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- con

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d

2014

/15

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Adj

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pria

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Shift

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of

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1,72

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290

-(1

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--

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arm

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--

--

--

--

-

Inve

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ood

and

food

sup

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s92

-(3

)89

4247

47.2

107

31

Inve

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y: F

uel,

oil

and

gas

--

--

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earn

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121

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120

343

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5.8

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184

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40)

4416

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--

--

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--

--

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--

--

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App

ropr

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n pe

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nom

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lass

ifica

tion

- con

tinue

d

2014

/15

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Adj

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Shift

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: St

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s

1,48

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1,56

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1,48

81,

290

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23,3

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21,8

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221

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17

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pay

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17,1

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4,20

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15,7

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de

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433

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4,99

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2,86

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44,4

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App

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2014

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215

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--

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Dep

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3,93

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--

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App

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77,2

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Build

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--

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ors

--

--

--

--

-

Agen

cy a

nd s

uppo

rt /

outs

ourc

ed s

ervi

ces

--

--

--

--

-

Ente

rtain

men

t-

--

--

--

--

Flee

t ser

vice

s-

--

--

--

--

Hou

sing

--

--

--

--

-

Inve

ntor

y: C

loth

ing

mat

eria

l an

d su

pplie

s-

--

--

--

--

Inv

ento

ry: F

arm

ing

supp

lies

--

--

--

--

-

Inve

ntor

y: F

ood

and

food

su

pplie

s-

--

--

--

--

Inv

ento

ry: F

uel,

oil a

nd

gas

--

--

--

--

-

Inve

ntor

y: L

earn

er a

nd

teac

her s

uppo

rt m

ater

ial

--

--

--

--

-

Inve

ntor

y: M

ater

ials

and

su

pplie

s-

--

--

--

--

Inv

ento

ry: M

edic

al

supp

lies

--

--

--

--

-

Inv

ento

ry: M

edic

ine

--

--

--

--

-

Med

sas

Inve

ntor

y In

terfa

ce-

--

--

--

--

Inv

ento

ry: O

ther

sup

plie

s-

--

--

--

--

Con

sum

able

sup

plie

s-

--

--

--

--

Con

sum

able

: Sta

tione

ry,

prin

ting

and

offic

e su

pplie

s-

--

--

--

--




Prog

ram

me

4: H

ousi

ng A

sset

Man

agem

ent,

Prop

erty

Man

agem

ent–

con

tinue

d

2014

/15

2013

/14

Adj

uste

d A

ppro

pria

tion

Shift

ing

of

Fund

sVi

rem

ent

Fina

l A

ppro

pria

tion

Act

ual

Expe

nditu

reVa

rianc

eEx

pend

iture

as

% o

f fina

l ap

prop

riatio

n

Fina

l A

ppro

pria

tion

Act

ual

expe

nditu

re

R’0

00R

’000

R’0

00R

’000

R’0

00R

’000

%R

’000

R’0

00

Ope

ratin

g le

ases

--

--

--

--

-

Prop

erty

pay

men

ts-

--

--

--

--

Tran

spor

t pro

vide

d:

Dep

artm

enta

l act

ivity

--

--

--

--

-

Trav

el a

nd s

ubsi

sten

ce-

--

--

--

--

Trai

ning

and

dev

elop

men

t-

--

--

--

--

Ope

ratin

g pa

ymen

ts-

--

--

--

--

Venu

es a

nd fa

cilit

ies

--

--

--

--

-

Ren

tal a

nd h

iring

--

--

--

--

-

Inte

rest

and

rent

on

land

--

--

--

--

-

Inte

rest

--

--

--

--

-

Ren

t on

land

--

--

--

--

-

Tran

sfer

s an

d su

bsid

ies

148,

530

--

148,

530

143,

665

4,86

596

.716

8,15

516

7,94

0

Prov

ince

s an

d m

unic

ipal

ities

--

--

--

--

-

Prov

ince

s-

--

--

--

--

Prov

inci

al R

even

ue

Fund

s-

--

--

--

--

Prov

inci

al a

genc

ies

and

fund

s-

--

--

--

--

Mun

icip

aliti

es-

--

--

--

--

Mun

icip

al b

ank

acco

unts

--

--

--

--

-

Mun

icip

al a

genc

ies

and

fund

s-

--

--

--

--




Prog

ram

me

4: H

ousi

ng A

sset

Man

agem

ent,

Prop

erty

Man

agem

ent–

con

tinue

d

2014

/15

2013

/14

Adj

uste

d A

ppro

pria

tion

Shift

ing

of

Fund

sVi

rem

ent

Fina

l A

ppro

pria

tion

Act

ual

Expe

nditu

reVa

rianc

eEx

pend

iture

as

% o

f fina

l ap

prop

riatio

n

Fina

l A

ppro

pria

tion

Act

ual

expe

nditu

re

R’0

00R

’000

R’0

00R

’000

R’0

00R

’000

%R

’000

R’0

00

Dep

artm

enta

l age

ncie

s an

d ac

coun

ts14

8,53

0-

-14

8,53

014

3,66

54,

865

96.7

168,

155

167,

940

Soci

al s

ecur

ity fu

nds

--

--

--

--

-

Dep

artm

enta

l age

ncie

s14

8,53

0-

-14

8,53

014

3,66

54,

865

96.7

168,

155

167,

940

Hig

her e

duca

tion

inst

itutio

ns-

--

--

--

--

Fore

ign

gove

rnm

ents

and

in

tern

atio

nal o

rgan

isat

ions

-

--

--

--

--

Publ

ic c

orpo

ratio

ns a

nd

priv

ate

ente

rpris

es-

--

--

--

--

Publ

ic c

orpo

ratio

ns-

--

--

--

--

Subs

idie

s on

pro

duct

s an

d pr

oduc

tion

--

--

--

--

-

Oth

er tr

ansf

ers

to p

ublic

co

rpor

atio

ns-

--

--

--

--

Priv

ate

ente

rpris

es-

--

--

--

--

Subs

idie

s on

pro

duct

s an

d pr

oduc

tion

--

--

--

--

-

Oth

er tr

ansf

ers

to p

rivat

e en

terp

rises

--

--

--

--

-

Non

-pro

fit in

stitu

tions

-

--

--

--

--

Hou

seho

lds

--

--

--

--

-

Soci

al b

enefi

ts-

--

--

--

--

Oth

er tr

ansf

ers

to

hous

ehol

ds-

--

--

--

--




Prog

ram

me

4: H

ousi

ng A

sset

Man

agem

ent,

Prop

erty

Man

agem

ent–

con

tinue

d

2014

/15

2013

/14

Adj

uste

d A

ppro

pria

tion

Shift

ing

of

Fund

sVi

rem

ent

Fina

l A

ppro

pria

tion

Act

ual

Expe

nditu

reVa

rianc

eEx

pend

iture

as

% o

f fina

l ap

prop

riatio

n

Fina

l A

ppro

pria

tion

Act

ual

expe

nditu

re

R’0

00R

’000

R’0

00R

’000

R’0

00R

’000

%R

’000

R’0

00

Paym

ents

for c

apita

l as

sets

--

--

23(2

3)-

--

Build

ings

and

oth

er fi

xed

stru

ctur

es-

--

--

--

--

Build

ings

--

--

--

--

-

Oth

er fi

xed

stru

ctur

es-

--

--

--

--

Mac

hine

ry a

nd e

quip

men

t-

--

-23

(23)

--

-

Tran

spor

t equ

ipm

ent

--

--

--

--

-

Oth

er m

achi

nery

and

eq

uipm

ent

--

--

23(2

3)-

--

Her

itage

ass

ets

--

--

--

--

-

Spec

ialis

ed m

ilitar

y as

sets

--

--

--

--

-

Biol

ogic

al a

sset

s-

--

--

--

--

Land

and

sub

soil

asse

ts-

--

--

--

--

Inta

ngib

le a

sset

s-

--

--

--

--

Paym

ents

for fi

nanc

ial

asse

ts-

--

--

--

--

Tota

l14

8,53

0-

-14

8,53

014

3,68

84,

842

96.7

168,

155

167,

940




4.1

Adm

inis

trat

ion

2014

/15

2013

/14

Adj

uste

d A

ppro

pria

tion

Shift

ing

of

Fund

sVi

rem

ent

Fina

l A

ppro

pria

tion

Act

ual

Expe

nditu

reVa

rianc

eEx

pend

iture

as

% o

f fina

l ap

prop

riatio

n

Fina

l A

ppro

pria

tion

Act

ual

expe

nditu

re

Econ

omic

cla

ssifi

catio

nR

’000

R’0

00R

’000

R’0

00R

’000

R’0

00%

R’0

00R

’000

Cur

rent

pay

men

ts-

--

--

--

--

Com

pens

atio

n of

em

ploy

ees

--

--

--

--

-

Goo

ds a

nd s

ervi

ces

--

--

--

--

-

Inte

rest

and

rent

on

land

--

--

--

--

-

Tran

sfer

s an

d su

bsid

ies

47,5

42-

-47

,542

46,5

381,

004

97.9

60,1

5058

,304

Prov

ince

s an

d m

unic

ipal

ities

--

--

--

--

-

Dep

artm

enta

l age

ncie

s an

d ac

coun

ts47

,542

--

47,5

4246

,538

1,00

497

.960

,150

58,3

04

Hig

her e

duca

tion

inst

itutio

ns-

--

--

--

--

Fore

ign

gove

rnm

ents

and

in

tern

atio

nal o

rgan

isat

ions

-

--

--

--

--

Publ

ic c

orpo

ratio

ns a

nd

priv

ate

ente

rpris

es-

--

--

--

--

Non

-pro

fit in

stitu

tions

-

--

--

--

--

Hou

seho

lds

--

--

--

--

-

Paym

ents

for c

apita

l ass

ets

--

--

23(2

3)-

--

Build

ings

and

oth

er fi

xed

stru

ctur

es-

--

--

--

--

Mac

hine

ry a

nd e

quip

men

t-

--

-23

(23)

--

-

Her

itage

ass

ets

--

--

--

--

-

Spec

ialis

ed m

ilitar

y as

sets

--

--

--

--

-

Biol

ogic

al a

sset

s-

--

--

--

--

Land

and

sub

soil

asse

ts-

--

--

--

--

Inta

ngib

le a

sset

s-

--

--

--

--

Paym

ents

for fi

nanc

ial a

sset

s-

--

--

--

--

Tota

l47

,542

--

47,5

4246

,561

981

97.9

60,1

5058

,304




4.2

Sale

and

Tra

nsfe

r of H

ousi

ng P

rope

rtie

s

2014

/15

2013

/14

Adj

uste

d A

ppro

pria

tion

Shift

ing

of

Fund

sVi

rem

ent

Fina

l A

ppro

pria

tion

Act

ual

Expe

nditu

reVa

rianc

eEx

pend

iture

as

% o

f fina

l ap

prop

riatio

n

Fina

l A

ppro

pria

tion

Act

ual

expe

nditu

re

Econ

omic

cla

ssifi

catio

nR

’000

R’0

00R

’000

R’0

00R

’000

R’0

00%

R’0

00R

’000

Cur

rent

pay

men

ts-

--

--

--

--

Com

pens

atio

n of

em

ploy

ees

--

--

--

--

-

Goo

ds a

nd s

ervi

ces

--

--

--

--

-

Inte

rest

and

rent

on

land

--

--

--

--

-

Tran

sfer

s an

d su

bsid

ies

662

--

662

919

(257

)13

8.8

241

241

Prov

ince

s an

d m

unic

ipal

ities

--

--

--

--

-

Dep

artm

enta

l age

ncie

s an

d ac

coun

ts66

2-

-66

291

9(2

57)

138.

824

124

1

Hig

her e

duca

tion

inst

itutio

ns-

--

--

--

--

Fore

ign

gove

rnm

ents

and

in

tern

atio

nal o

rgan

isat

ions

-

--

--

--

--

Publ

ic c

orpo

ratio

ns a

nd

priv

ate

ente

rpris

es-

--

--

--

--

Non

-pro

fit in

stitu

tions

-

--

--

--

--

Hou

seho

lds

--

--

--

--

-

Paym

ents

for c

apita

l ass

ets

--

--

--

--

-

Build

ings

and

oth

er fi

xed

stru

ctur

es-

--

--

--

--

Mac

hine

ry a

nd e

quip

men

t-

--

--

--

--

Her

itage

ass

ets

--

--

--

--

-

Spec

ialis

ed m

ilitar

y as

sets

--

--

--

--

-

Biol

ogic

al a

sset

s-

--

--

--

--

Land

and

sub

soil

asse

ts-

--

--

--

--

Inta

ngib

le a

sset

s-

--

--

--

--

Paym

ents

for fi

nanc

ial a

sset

s-

--

--

--

--

Tota

l66

2-

-66

291

9(2

57)

138.

824

124

1




4.3

Hou

sing

Pro

pert

y M

aint

enan

ce

2014

/15

2013

/14

Adj

uste

d A

ppro

pria

tion

Shift

ing

of

Fund

sVi

rem

ent

Fina

l A

ppro

pria

tion

Act

ual

Expe

nditu

reVa

rianc

eEx

pend

iture

as

% o

f fina

l ap

prop

riatio

n

Fina

l A

ppro

pria

tion

Act

ual

expe

nditu

re

Econ

omic

cla

ssifi

catio

nR

’000

R’0

00R

’000

R’0

00R

’000

R’0

00%

R’0

00R

’000

Cur

rent

pay

men

ts-

--

--

--

--

Com

pens

atio

n of

em

ploy

ees

--

--

--

--

-

Goo

ds a

nd s

ervi

ces

--

--

--

--

-

Inte

rest

and

rent

on

land

--

--

--

--

-

Tran

sfer

s an

d su

bsid

ies

100,

326

--

100,

326

96,2

084,

118

95.9

107,

764

109,

395

Prov

ince

s an

d m

unic

ipal

ities

--

--

--

--

-

Dep

artm

enta

l age

ncie

s an

d ac

coun

ts10

0,32

6-

-10

0,32

696

,208

4,11

895

.910

7,76

410

9,39

5

Hig

her e

duca

tion

inst

itutio

ns-

--

--

--

--

Fore

ign

gove

rnm

ents

and

in

tern

atio

nal o

rgan

isat

ions

-

--

--

--

--

Publ

ic c

orpo

ratio

ns a

nd

priv

ate

ente

rpris

es-

--

--

--

--

Non

-pro

fit in

stitu

tions

-

--

--

--

--

Hou

seho

lds

--

--

--

--

-

Paym

ents

for c

apita

l ass

ets

--

--

--

--

-

Build

ings

and

oth

er fi

xed

stru

ctur

es-

--

--

--

--

Mac

hine

ry a

nd e

quip

men

t-

--

--

--

--

Her

itage

ass

ets

--

--

--

--

-

Spec

ialis

ed m

ilitar

y as

sets

--

--

--

--

-

Biol

ogic

al a

sset

s-

--

--

--

--

Land

and

sub

soil

asse

ts-

--

--

--

--

Inta

ngib

le a

sset

s-

--

--

--

--

Paym

ents

for fi

nanc

ial a

sset

s-

--

--

--

--

Tota

l10

0,32

6-

-10

0,32

696

,208

4,11

895

.910

7,76

410

9,39

5




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-C) 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

R’000

Actual Expenditure

R’000

Variance

R’000

Variance as a % of Final

Appropriation%

Administration 184,394 182,847 1,547 1

Explanation of variance: Under expenditure is mainly against compensation of employees due to the delays in the filling of budgeted vacant posts caused by challenges in constituting short listing and interview panels as available members are over committed in their activities.

Housing Needs, Planning and Research

14,955 14,223 732 5

Explanation of variance: Under expenditure is mainly attributed to goods and services against transport and subsistence primarily due to a delay in the implementation of capacity building training relating to training of co-operatives at Vulindlela Rural project and emerging contractors where training is done by internal staff.

Housing Development 3,510,564 3,532,420 (21,856) (1)

Explanation of variance: Over expenditure is mainly due to some projects which progressed faster than anticipated and was ahead of the development programme. Also, more sub-contractors was appointed to fast-track the work. In addition, some implementing agents (IA’s) had increased their capacity on the ground in order to address the urgent need for housing in various projects i.e. KwaNyuswa, Vulamehlo, Mbambangalo Housing project, Machunwini Rural, KwaMashabane Rural, Dube Housing project, Matimatolo project, etc.

Housing Asset Management, Property management

148,530 143,688 4,842 3

Explanation of variance: Under expenditure in mainly attributed to the fact that the Department could not transfer funds to eThekwini Metro in respect of rectification of pre-1994 stock (properties owned by the Municipality) in Lamontville, R293 towns, etc. due to the Department not receiving the reconciliation report from eThekwini Metro on funds previously transferred relating to this project.

NOTES TO THE APPROPRIATION STATEMENTfor the year ended 31 March 2015



4.2 Per economic classification Final Appropriation

Actual Expenditure

Variance Variance as a % of Final

AppropriationR’000 R’000 R’000 %

Current payments 354,947 362,918 (7,971) (2)Compensation of employees 237,306 239,766 (2,460) (1)Goods and services 117,640 123,151 (5,511) (5)Interest and rent on land 1 1 - -

Transfers and subsidies 3,425,430 3,429,909 (4,479) -Provinces and municipalities 44,476 68,458 (23,982) (54)Departmental agencies and accounts 149,236 145,302 3,934 3Higher education institutions - - - -Public corporations and private enterprises

- - - -

Foreign governments and international organisations

- - - -

Non-profit institutions - - - -Households 3,231,718 3,216,149 15,569 -

Payments for capital assets 77,293 79,588 (2,295) (3)Buildings and other fixed structures 64,459 67,455 (2,996) (5)Machinery and equipment 12,409 11,754 655 5Heritage assets - - - -Specialised military assets - - - -Biological assets - - - -Land and subsoil assets - - - -Software and other intangible assets 425 379 46 11

Payments for financial assets 773 763 10 1

Total 3,858,443 3,873,178 (14,735) -

Explanation of variance: Current Expenditure: The over-expenditure in this classification is due to an increase in contract personnel which are paid through the Operational Capital budget of the HSDG related to the enhancement of service delivery and pressures in business and advisory services relating to aerial photography for the Lamontville and Cato Crest areas in respect of land invasion information.

Explanation of variance: Transfers and Subsidies: The under-expenditure in this classification is a result of provision made for the Cornubia project. However transfer could not be made due to funding paid in the previous financial year which was not fully utilised.

Explanation of variance: Payment of Capital Assets: The over expenditure in this classification was because of the Social and Economic Amenities programme which was under-budgeted. In the previous financial years this programme was stalled due to forensic investigations which were subsequently completed. The programme delivery was enhanced therefore the budget was exhausted.

Explanation of variance: Payment for Financial Assets: The under-expenditure is as a result of the debts written off as per the approval of the Accounting Officer which is difficult to project due to its nature of uncertainty.




4.3 Per conditional grant Final Appropriation

Actual Expenditure

Variance Variance as a % of Final

AppropriationR’000 R’000 R’000 %

Human Settlements Development Grant

3,509,045 3,512,902 (3,857) -

Explanation of variance: Over expenditure is mainly due to some projects which progressed faster than anticipated and were ahead of the development programme. Also, more sub-contractors was appointed to fast-track the work. In addition, some implementing agents (IA’s) has increased their capacity on the ground in order to address the urgent need for housing in various projects i.e. KwaNyuswa, Vulamehlo, Mbambangalo Housing project, Machunwini Rural, KwaMashabane Rural, Dube Housing project, Matimatolo project, etc.




Note 2014/15 2013/14R’000 R’000

REVENUE

Annual appropriation 1 3,858,443 3,648,370Departmental revenue 2 28,920 9,431

TOTAL REVENUE 3,887,363 3,657,801

EXPENDITURE

Current expenditureCompensation of employees 4 239,766 202,048Goods and services 5 123,151 85,501

Interest and rent on land 6 1 112Aid assistance 3 - 287Total current expenditure 362,918 287,948

Transfers and subsidiesTransfers and subsidies 8 3,429,908 3,314,149Total transfers and subsidies 3,429,908 3,314,149

Expenditure for capital assetsTangible assets 9 79,210 14,857Intangible assets 9 379 222Total expenditure for capital assets 79,589 15,079

Payments for financial assets 7 763 113

TOTAL EXPENDITURE 3,873,178 3,617,289

SURPLUS FOR THE YEAR 14,185 40,512

Reconciliation of Net Surplus for the year

Voted funds (14,735) 31,368

Annual appropriation (10,878) 359

Conditional grants (3,857) 31,009

Departmental revenue 15 28,920 9,431

Aid assistance 3 - (287)

SURPLUS FOR THE YEAR 14,185 40,512

STATEMENT OF FINANCIAL PERFORMANCEfor the year ended 31 March 2015



Note 2014/15 2013/14R’000 R’000

ASSETS

Current assets 22,409 94,303Unauthorised expenditure 10 14,730 46,651Cash and cash equivalents 11 4 -Receivables 12 7,675 47,652

Non-current assets 330 298

Loans 13 330 298 TOTAL ASSETS 22,739 94,601

LIABILITIES

Current liabilities 22,331 93,828Voted funds to be surrendered to the Revenue Fund

14 (236,000) 31,368

Departmental revenue to be surren-dered to the Revenue Fund

15 162 4,252

Bank overdraft 16 246,823 54,233Payables 17 11,346 3,975

TOTAL LIABILITIES 22,331 93,828

NET ASSETS 408 773

Represented by:Recoverable revenue 408 773

TOTAL 408 773

STATEMENT OF FINANCIAL POSITIONas at 31 March 2015



Note 2014/15 2013/14R’000 R’000

Recoverable revenueOpening balance 773 653Transfers: (365) 120

Irrecoverable amounts written off 7.1 (117) -Debts recovered (605) (458)Debts raised 357 578

CLOSING BALANCE 408 773

STATEMENT OF CHANGES IN NET ASSETSfor the year ended 31 March 2015



Note 2014/15 2013/14R’000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts 3,651,314 3,657,782Annual appropriated funds received 1.1 3,622,443 3,648,370Departmental revenue received 2 28,298 5,270Interest received 2.2 573 4,142

Net decrease/(increase) in working capital 79,269 (34,366)Surrendered to Revenue Fund (64,378) (28,478)Current payments (348,182) (285,002)Interest paid 6 (1) (112)Payments for financial assets (763) (113)Transfers and subsidies paid (3,429,908) (3,314,149)Net cash flow available from operating activities

18 (112,649) (4,438)

CASH FLOWS FROM INVESTING ACTIVITIESPayments for capital assets 9 (79,589) (15,079)Proceeds from sale of capital assets 2.3 49 19Increase in loans (32) -Net cash flows from investing activities (79,572) (15,060)

CASH FLOWS FROM FINANCING ACTIVITIES(Decrease)/increase in net assets (365) 120Net cash flows from financing activities (365) 120

Net decrease in cash and cash equivalents (192,586) (19,378)

Cash and cash equivalents at beginning of period

(54,233) (34,855)

Cash and cash equivalents at end of period

19 (246,819) (54,233)

CASH FLOW STATEMENTfor the year ended 31 March 2015



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.

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 Foreign currency translation

Cash flows arising from foreign currency transactions are translated into South African Rands using the exchange rates prevailing at the date of payment / receipt.

6 Comparative information6.1 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.

6.2 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.

7 Revenue7.1 Appropriated funds

Appropriated funds comprises of departmental allocations as well as direct charges against the 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.

ACCOUNTING POLICIESfor the year ended 31 March 2015



7.2 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.

7.3 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.

8 Expenditure8.1 Compensation of employees8.1.1 Salaries and wages

Salaries and wages are recognised in the statement of financial performance on the date of payment. 8.1.2 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.

8.2 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.

8.3 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.8.4 Leases8.4.1 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.




8.4.2 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.

9 Aid Assistance9.1 Aid assistance received

Aid assistance received in cash is recognised in the statement of financial performance when received. In-kind aid assistance is recorded in the notes to the financial statements on the date of receipt and is measured at fair value.

Aid assistance not spent for the intended purpose and any unutilised funds from aid assistance that are required to be refunded to the donor are recognised as a payable in the statement of financial position.

9.2 Aid assistance paid

Aid assistance paid is recognised in the statement of financial performance on the date of payment. Aid assistance payments made prior to the receipt of funds are recognised as a receivable in the statement of financial position.

10 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.

11 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.12 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.

13 Investments

Investments are recognised in the statement of financial position at cost.14 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.

15 Payables

Loans and payables are recognised in the statement of financial position at cost.




16 Capital Assets16.1 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.

16.2 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 are measured at R1.


Movable capital assets are subsequently carried at cost and are not subject to depreciation or impairment.

Biological assets are subsequently carried at fair value.

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 movable asset is recorded by another department/entity in which case the completed project costs are transferred to that department.

16.3 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.


Intangible 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 intangible asset is recorded by another department/entity in which case the completed project costs are transferred to that department.

17 Provisions and Contingents




17.1 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.

17.2 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

17.3 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

17.4 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

18 Unauthorised expenditure

Unauthorised expenditure is recognised in the statement of financial position until such time as the expenditure is either:

• approved by the Provincial Legislature with funding and the related funds are received; or

• approved by 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.19 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.

20 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.




21 Changes in accounting policies, accounting estimates and errorsChanges in accounting policies that are effected 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 retrospective restatement is practicable.

22 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.

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.

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.

26 Inventories At the date of acquisition, inventories are recorded at cost price in the annexure notes to the financial statementsWhere inventories are acquired as part of a non-exchange transaction, the cost of inventory is its fair value at the date of acquisition.Inventories are subsequently measured at the lower of cost and net realisable value or the lower of cost and replacement value.




1. Annual Appropriation

1.1 Annual Appropriation

Included are funds appropriated in terms of the Appropriation Act (and the Adjustments Appropriation Act) for Provincial Departments:

2014/15 2013/14

Final Appropriation

Actual Funds

Received

Funds not requested/

not received

Appropriation

received

Programmes R’000 R’000 R’000 R’000Administration 184,394 184,394 - 165,093Housing Needs, Research and Planning

14,955 14,955 - 14,590

Housing Development 3,510,564 3,274,564 236,000 3,300,532Housing Asset Management, Property Management

148,530 148,530 - 168,155

Total 3,858,443 3,622,443 236,000 3,648,370

Funds appropriated by the National Department of Human Settlements (after the 2nd budget estimate), was not received by 31 March 2015.

Note 2014/15 2013/14R’000 R’000

1.2 Conditional grants

Total grants received 33 3,509,045 3,332,584

2. Departmental revenue Sales of goods and services other than capital assets

2.1 813 434

Interest, dividends and rent on land 2.2 573 4,142Sales of capital assets 2.3 49 19Transactions in financial assets and liabilities

2.4 27,485 4,836

Departmental revenue collected 28,920 9,431

NOTES TO THE ANNUAL FINANCIAL STATEMENTSfor the year ended 31 March 2015



Note 2014/15 2013/14R’000 R’000

2.1 Sales of goods and services other than capital Assets

2

Sales of goods and services produced by the department

813 434

Sales by market establishment

192 214

Other sales 621 220

Sales of scrap, waste and other used current goodsTotal 813 434

2.2 Interest, dividends and rent on land

2

Interest 573 4,142

Total 573 4,142

2.3 Sale of capital assets 2

Tangible assets 49 19

Machinery and equipment 30.2 49 19

Total 49 19

2.4 Transactions in financial assets and liabilities

2

Other Receipts including Recoverable Revenue

27,485 4,836

Total 27,485 4,836




Note 2014/15 2013/14R’000 R’000

3. Aid assistanceOpening Balance - 287

Paid during the year - (287)

Closing Balance - -

4. Compensation of employees

4.1 Salaries and Wages

Basic salary 166,463 138,141

Performance award 3,289 3,907

Service Based 274 180

Compensative/circumstantial 1,513 1,532

Periodic payments 5,522 6,013

Other non-pensionable allowances 38,284 31,409

Total 215,345 181,182

4.2 Social contributions

Employer contributionsPension 16,931 13,835

Medical 7,451 6,998

UIF - 1

Bargaining council 39 32

Total 24,421 20,866

Total compensation of employees 239,766 202,048

Average number of employees 621 555




Note 2014/15 2013/14R’000 R’000

5. Goods and services

Administrative fees 652 438

Advertising 2,349 1,738

Minor assets 5.1 737 928

Bursaries (employees) 230 326

Catering 5,217 1,701

Communication 7,694 6,861

Computer services 5.2 9,681 9,158

Consultants: Business and advisory services

5,136 1,291

Infrastructure and planning services 1,561 446

Legal services 3,650 2,830

Contractors 2,325 -

Agency and support / outsourced services

798 717

Entertainment - 4

Audit cost – external 5.3 5,938 4,620

Fleet services 4,972 4,757

Inventory 5.4 386 463

Consumables 5.5 2,073 1,932

Housing - -

Operating leases 21,911 21,317

Property payments 5.6 17,143 7,279

Rental and hiring 2,836 116

Transport provided as part of the departmental activities

3,402 500

Travel and subsistence 5.7 15,324 13,441

Venues and facilities 4,544 1,982

Training and development 1,602 861

Other operating expenditure 5.8 2,990 1,795

Total 123,151 85,501




Note 2014/15 2013/14R’000 R’000

5.1 Minor assets 5Tangible assets 737 867

Machinery and equipment 737 867

Intangible assets - 61Software - 61

Total 737 928

5.2 Computer services 5SITA computer services 7,470 8,356

External computer service providers

2,211 802

Total 9,681 9,158

5.3 Audit cost – External 5Regularity audits 5,938 4,620

Total 5,938 4,620

5.4 Inventory 5Food and food supplies 43 31

Materials and supplies 343 432

Total 386 463

5.5 Consumables 5Consumable supplies 529 682

Uniform and clothing 214 61

Household supplies 159 6

IT consumables 102 35

Building materials and supplies

- 8

Other consumables 54 572

Stationery, printing and office supplies

1,544 1,250

Total 2,073 1,932




Note 2014/15 2013/14R’000 R’000

5.6 Property payments 5Municipal services 6,084 2,952

Property maintenance and repairs

- 26

Other 11,059 4,301

Total 17,143 7,279

5.7 Travel and subsistence 5Local 15,324 13,441

Total 15,324 13,441

5.8 Other operating expenditure

5

Professional bodies, membership and subscription fees

5 -

Resettlement costs 1,543 304

Other 1,442 1,491

Total 2,990 1,795

6. Interest and rent on landInterest paid 1 112

Total 1 112

7. Payments for financial assetsDebts written off 7.1 763 113

Total 763 113




Note 2014/15 2013/14R’000 R’000

7.1 Debts written off 7Other debt written off

Out of service 93 49

Debts incorrectly stated during conversion from FMS to BAS

- 64

Overpayment to service provider

670 -

Total 763 113

8. Transfers and subsidiesProvinces and municipalities Annex 1A&C 68,457 40,437

Departmental agencies and accounts

Annex 1B 145,302 168,661

Households Annex 1D 3,216,149 3,105,051

Total 3,429,908 3,314,149

Unspent funds transferred to the above beneficiaries

554,155 792,137

9. Expenditure for capital assetsTangible assets 79,210 14,857

Buildings and other fixed structures

32.1 67,455 6,799

Machinery and equipment 30.1 11,755 8,058

Intangible assets 379 222Software 31.1 379 222

Total 79,589 15,079




9.1 Analysis of funds utilised to acquire capital assets – 2014/15

Voted funds TotalR’000 R’000

Tangible assets 79,210 79,210Buildings and other fixed structures 67,455 67,455

Machinery and equipment 11,755 11,755

Intangible assets 379 379Software 379 379

Total 79,589 79,589

9.2 Analysis of funds utilised to acquire capital assets – 2013/14

Voted funds TotalR’000 R’000

Tangible assets 14,857 14,857Buildings and other fixed structures 6,799 6,799

Machinery and equipment 8,058 8,058

Intangible assets 222 222Software 222 222

Total 15,079 15,079




Note 2014/15 2013/14R’000 R’000

10. Unauthorised expenditure

10.1 Reconciliation of unauthorised expenditureOpening balance 46,651 46,651

Unauthorised expenditure – discovered in current year

10.4 14,735 -

Less: Amounts approved by Legislature with funding

(46,656) -

Unauthorised expenditure awaiting authorisation

10.2 14,730 46,651

10.2 Analysis of unauthorised expenditure awaiting authorisation per economic classificationTransfers and subsidies 14,730 46,651

Total 10.3 14,730 46,651

10.3 Analysis of unauthorised expenditure awaiting authorisation per typeUnauthorised expenditure relating to overspending of the vote or a main division within a vote

14,730 46,651

Total 14,730 46,651

10.4 Details of unauthorised expenditure – current yearIncidentAcceleration of service delivery – housing projects 14,735

Total 14,735




Note 2014/15 2013/14R’000 R’000

11. Cash and cash equivalentsCash on hand 4 -

Total 4 -

12. Receivables

Note 2014/15 2013/14R’000 R’000 R’000 R’000 R’000

Less than one year

One to three years

Older than three

yearsTotal Total

Claims recoverable 12.1 and

Annex 3

264 - - 264 1,752

Staff debt 12.2 263 - - 263 503Other debtors 12.3 7,148 - - 7,148 45,397Total 7,675 - - 7,675 47,652

12.1 Claims recoverable 12National departments 4 -

Provincial departments 260 1,752

Total 264 1,752

12.2 Staff debt 12Salary Debts 187 305

Bursary Debts 23 86

Other 53 112

Total 263 503




Note 2014/15 2013/14R’000 R’000

12.3 Other debtors 12Salary: Tax Debt 43 1

KwaZulu-Natal Housing Fund

2,574 14,889

Supplier Overpayments 261 888

Salary: Reversal 3 10

Disallowance Miscellaneous 4,156 29,595

Pension Recoverable Account

- 6

Other 111 8

Total 7,148 45,397

12.4 Impairment of receivables 12

Estimate of impairment of receivables

260 76

Total 260 76

13. LoansStaff loans 330 298

Total 330 298

Analysis of BalanceOpening balance 298 366

New Issues 357 578

Repayments (208) (646)

Write-offs (117) -

Closing balance 330 298

13.1 Impairment of loansEstimate of impairment of loans

35 76

Total 35 76




Note 2014/15 2013/14R’000 R’000

14. Voted funds to be surrendered to the Revenue FundOpening balance 31,368 22,134

Transfer from statement of financial performance

(14,735) 31,368

Add: Unauthorised expenditure for current year

10.4 14,735 -

Voted funds not requested/not received

1.1 (236,000) -

Paid during the year (31,368) (22,134)

Closing balance (236,000) 31,368

15. Departmental revenue to be surrendered to the Revenue FundOpening balance 4,252 1,165

Transfer from Statement of Financial Performance

28,920 9,431

Paid during the year (33,010) (6,344)

Closing balance 162 4,252

16. Bank OverdraftConsolidated Paymaster General Account

246,823 54,233

Total 246,823 54,233

17. Payables – currentAdvances received 17.1 11,286 3,600

Clearing accounts 17.2 60 375

Total 11,346 3,975 17.1 Advances received 17

National departments 11,286 3,600

Total 11,286 3,600




Note 2014/15 2013/14R’000 R’000

17.2 Clearing accounts 17Salary related 60 353

Pension related - 21

Medical Aid - 1

Total 60 375

18. Net cash flow available from operating activitiesNet surplus as per Statement of Financial Performance

14,185 40,512

Add back non cash/cash movements not deemed operating activities

(126,834) (44,950)

Decrease/(increase) in receivables – current

39,977 (34,401)

Decrease in other current assets

46,656 -

Increase in payables – current

7,371 2,869

Proceeds from sale of capital assets

(49) (19)

Expenditure on capital assets

79,589 15,079

Surrenders to Revenue Fund

(64,378) (28,478)

Voted funds not received (236,000) -

Net cash flow generated by operating activities

(112,649) (4,438)

19. Reconciliation of cash and cash equivalents for cash flow purposesConsolidated Paymaster General account

(246,823) (54,233)

Cash on hand 4 -

Total (246,819) (54,233)




Note 2014/15 2013/14R’000 R’000

20. Contingent liabilities and contingent assets

20.1 Contingent liabilitiesLiable to NatureHousing loan guarantees Employees Annex 2A 14 14

Claims against the department Annex 2B 346,465 218,914

Intergovernmental payables (unconfirmed balances)

Annex 4 256 254

Total 346,735 219,182

21. CommitmentsCurrent expenditureApproved and contracted 26,884 14,323

Approved but not yet contracted

165,129 2,780

192,013 17,103Capital expenditureApproved and contracted 14,673,388 10,259,096

Approved but not yet contracted

2,838,968 2,705,888

17,512,356 12,964,984

Total Commitments 17,704,369 12,982,087

Most commitments are of a long term nature.




Note 2014/15 2013/14R’000 R’000

22. Accruals and payables not recognised

Listed by economic classification30 Days 30+ Days Total Total

Goods and services 58,713 107,794 166,507 12,277

Transfers and subsidies 232,899 126,120 359,019 272,774

Capital assets 457 - 457 480

Total 292,069 233,914 525,983 285,531

Listed by programme levelProgramme 1 3,895 4,935

Programme 2 12,901 399

Programme 3 494,632 274,068

Programme 4 14,555 6,129

Total 525,983 285,531

Confirmed balances with other departments

Annex 4 16,279 1,732

Total 16,279 1,732

23. Employee benefitsLeave entitlement 14,999 11,927

Service bonus (Thirteenth cheque) 6,612 10,877

Performance awards - 52

Capped leave commitments 28,653 27,335

Other - 42

Total 50,264 50,233




24. Lease commitments

24.1 Operating leases expenditure

2014/15 Specialised military

equipment

Land Buildings and other

fixed structures

Machinery and

equipment

Total

Not later than 1 year - - 6,930 650 7,580Later than 1 year and not later than 5 years

- - 4,824 405 5,229

Total lease commitments - - 11,754 1,055 12,809


equipment


fixed structures

Machinery and

equipment

Total

Not later than 1 year - - 18,946 716 19,662Later than 1 year and not later than 5 years

- - 4,649 1,302 5,951

Total lease commitments - - 23,595 2,018 25,613

Operating leases comprise of leasing of buildings in respect of head office, regional and district offices and photo copy machines for the respective offices.

24.2 Finance leases expenditure


equipment


fixed structures

Machinery and

equipment

Total

Not later than 1 year - - - 1,019 1,019

Later than 1 year and not later than 5 years

- - - 182 182

Total lease commitments - - - 1,201 1,201


equipment


fixed structures

Machinery and

equipment

Total

Not later than 1 year - - - 3,762 3,762Later than 1 year and not later than 5 years

- - - 610 610

Total lease commitments - - - 4,372 4,372




Note 2014/15 2013/14R’000 R’000

25. Accrued departmental revenue

Transactions in financial assets and liabilities 25.1 13,707 13,698

Total 13,707 13,698

25.1 Analysis of accrued departmental revenue

Opening balance 13,698 15,123

Less: amounts received (1,692) (2,153)

Add: amounts recognised 1,701 1,727

Less: amounts written-off/reversed as irrecoverable 25.2 - (999)

Closing balance 13,707 13,698

25.2 Accrued department revenue written off

Nature of lossesOpening balance adjustment - 999

Total - 999




Note 2014/15 2013/14R’000 R’000

26. Irregular expenditure

26.1 Reconciliation of irregular expenditure


Add: Irregular expenditure – relating to current year

190 5,246

Less: Prior year amounts condoned

(633) (4,210)

Less: Amounts not con-doned and not recoverable

(275) -


Analysis of awaiting con-donation per age classifi-cationCurrent year 190 5,246Prior years 411,703 407,365Total 411,893 412,611

Provincial Treasury embarked on an exercise to reconcile the disclosure with the departmental registers and to investigate each case with the responsible department.

Provincial Treasury consulted and assisted departments in verifying the amounts involved and the circumstances prevailing at condonement by a committee at the time of transgression. The payments were individually evaluated and recommended for condonement by a committee consisting of the Acting Accountant-General and representatives of the Supply Chain Management and the Internal Audits at Provincial Treasury. Where the information was insufficient to make recommendations the case was referred back to the department for further investigations. Cases that are under forensic or other investigations were not considered at this stage, pending the outcome of the investigations.

In the evaluation, each case the Provincial Treasury considered the following:-a) The circumstances of the transgression;b) The extent of the expenditure involved;c) The nature and the seriousness of the transgression;d) Outstanding investigations and court proceedings;e) The effect of the compliance on service delivery;f) Whether the service was provided and a check on value for money;g) The potential cost involved in further investigations into old cases;h) Steps taken by Departments to rectify matters;i) The extent of possible misinterpretation of the prescript; and j) The practical challenges to adhere to all the prescripts.




2014/15R’000

26.2 Details of irregular expenditure – current year

Incident Disciplinary steps taken/criminal pro-ceedings

Competitive bidding not followed This case relates to a contract that was declared irregular in prior years

190

Total 190

26.3 Details of irregular expenditure condoned

Incident Condoned by (condoning author-ity)

3 quotes not requested Provincial Treasury 443Acting allowance longer than prescribed period

Provincial Treasury 190

Total 633

26.4 Details of irregular expenditure not recoverable (not condoned)

Incident Not condoned by (condoning authority)

Competitive bidding process not followed

Provincial Treasury 275

Total 275

26.5 Details of irregular expenditures under investigation

Incident3 quotes not requested 207Acting allowance longer than prescribed period 92Competitive bidding process not followed 411,594Total 411,893




2014/15 2013/14R’000 R’000

27. Fruitless and wasteful expenditure

27.1 Reconciliation of fruitless and wasteful expenditure


Fruitless and wasteful expenditure – relating to current year

1 1,393

Less: Amounts resolved - (1,281)

Fruitless and wasteful expenditure awaiting resolution

1,310 1,309

27.2 Analysis of awaiting resolution per economic classification

Current 1,310 1,309

Total 1,310 1,309

27.3 Analysis of Current year’s fruitless and wasteful expenditure

IncidentInterest paid on overdue accounts 1Total 1

28. Related party transactions

Payments madeGoods and services 20,266 49,264

Transfers 143,664 167,909

Total 163,930 217,173

Year end balances arising from revenue/paymentsReceivables from related parties

2,574 14,889

Total 2,574 14,889




Note 2014/15 2013/14R’000 R’000

OtherKwaZulu-Natal Housing Fund – controlled by the Accounting Officer of the Department of Human Settlements

143,664

KwaZulu-Natal Department of Public Works – same MEC

20,266

Total 163,930

In kind goods and services providedThe Department of Human Settlements provides administrative and management services to the KwaZulu-Natal Housing Fund (Shared services – Programme 1, 2 and 3)

5,702

Total 5,702

29. Key management personnel No. of Individuals

Officials:

Level 15 to 16 3 3,849 3,696

Level 14 5 4,492 3,653

Total 8,341 7,349




30. Movable tangible capital assets

Movement in movable tangible capital assets per asset register for the year ended 31 March 2015Opening balance

Additions Disposals Closing Balance

R’000 R’000 R’000 R’000

Machinery and equipment 44,442 12,136 1,831 54,747Transport assets 24,130 7,713 356 31,487Computer equipment 14,057 3,242 - 17,299Furniture and office equipment 6,012 1,175 1,475 5,712Other machinery and equipment 243 6 - 249

Total movable tangible capital assets 44,442 12,136 1,831 54,747

30.1 Additions

Additions to movable tangible capital assets per asset register for the year ended 31 March 2015Cash Non-cash (Capital

Work in Progress current

costs and finance lease

payments)

Received current, not paid(Paid current

year, received

prior year)

Total

R’000 R’000 R’000 R’000 R’000

Machinery and equipment 11,755 616 - (235) 12,136Transport assets 7,713 - - - 7,713Computer equipment 3,516 - - (274) 3,242Furniture and office equipment 520 616 - 39 1,175Other machinery and equipment 6 - - - 6

Total additions to movable tangible capital assets

11,755 616 - (235) 12,136




30.2 Disposals

Disposals of movable tangible capital assets per asset register for the year ended 31 March 2015Sold for

cashTransfer

out or destroyed

or scrapped

Total disposals

Cash Received

Actual

R’000 R’000 R’000 R’000

Machinery and equipment 356 1,475 1,831 49Transport assets 356 - 356 49Computer equipment - - - -Furniture and office equipment - 1,475 1,475 -Other machinery and equipment - - - -

Total disposal of movable tangible capital assets

356 1,475 1,831 49

30.3 Movement for 2013/14

Movement in tangible capital assets per asset register for the year ended 31 March 2014Opening balance

Prior period error

Additions Disposals Closing Balance

R’000 R’000 R’000 R’000 R’000

Machinery and equipment 36,237 - 9,520 1,315 44,442Transport assets 20,161 - 4,039 70 24,130Computer equipment 11,556 - 3,367 866 14,057Furniture and office equipment 4,283 - 2,108 379 6,012Other machinery and equipment

237 - 6 - 243

Total movable tangible capital assets

36,237 - 9,520 1,315 44,442




30.4 Minor assets

Movement in minor assets per the asset register for the year ended 31 March 2015Specialised

military assets

Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

R’000 R’000 R’000 R’000 R’000 R’000

Opening balance - 471 - 5,533 - 6,004Additions - - - 757 - 757Disposals - - - 458 - 458Total minor assets - 471 - 5,832 - 6,303

Specialised military assets

Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

Number of R1 minor assets

- - - 6,178 - 6,178

Number of minor assets at cost

- 234 - 4,173 - 4,407

Total number of minor assets

- 234 - 10,351 - 10,585

Movement in minor assets per the asset register for the year ended 31 March 2014Specialised

military assets

Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

R’000 R’000 R’000 R’000 R’000 R’000

Opening balance - 410 - 4,902 - 5,312Additions - 61 - 1,406 - 1,467Disposals - - - 775 - 775Total minor assets - 471 - 5,533 - 6,004

Specialised military assets

Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

Number of R1 minor assets

- - - 6,520 - 6,520

Number of minor assets at cost

- 234 - 3,837 - 4,071

Total number of minor assets

- 234 - 10,357 - 10,591




30.5 Movable assets written off

Movable assets written off for the year ended 31 March 2015Specialised

military assets

Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

R’000 R’000 R’000 R’000 R’000 R’000

Assets written off - - - 500 - 500Total movable assets written off

- - - 500 - 500

Movable assets written off for the year ended 31 March 2014Specialised

military assets

Intangible assets

Heritage assets

Machinery and equip-

ment

Biological assets

Total

R’000 R’000 R’000 R’000 R’000 R’000

Assets written off - - - 1,245 - 1,245Total movable assets written off

- - - 1,245 - 1,245

31. Intangible capital assets

Movement in intangible capital assets per asset register for the year ended 31 March 2015Opening balance

Additions Disposals Closing balance

R’000 R’000 R’000 R’000

Software 1,986 379 11 2,354Total intangible capital assets

1,986 379 11 2,354




31.1 Additions

Additions to intangible capital assets per asset register for the year ended 31 March 2015Cash Non-Cash (Develop-

ment work in progress

– current costs)

Received current year,

not paid(Paid

current year, received

prior year)

Total

R’000 R’000 R’000 R’000 R’000

Software 379 - - - 379

Total additions to intangible capital assets

379 - - - 379

31.2 Disposals

Disposals of intangible capital assets per asset register for the year ended 31 March 2015Sold for

cashTransfer out or destroyed or scrapped

Total disposals

Cash received

actualR’000 R’000 R’000 R’000

Software - 11 11 -

Total disposals of intangible capital assets

- 11 11 -


Movement in intangible capital assets per asset register for the year ended 31 March 2014Opening balance

Prior period error


R’000 R’000 R’000 R’000 R’000

Software 1,764 - 222 - 1,986

Total intangible capital assets 1,764 - 222 - 1,986




32. Immovable tangible capital assets

Movement in immovable tangible capital assets per asset register for the year ended 31 March 2015

Opening balance


R’000 R’000 R’000 R’000

Buildings and other fixed structures 76 - - 76Other fixed structures 76 - - 76Total immovable tangible capital assets

76 - - 76

32.1 Additions

Additions to immovable tangible capital assets per asset register for the year ended 31 March 2015Cash Non-cash (Capital

Work in Progress current

costs and finance lease

payments)

Received current, not

paid(Paid

current year,

received prior year)

Total

R’000 R’000 R’000 R’000 R’000

Building and other fixed structures 67,455 - (67,455) - -Other fixed structures 67,455 - (67,455) - -Total additions to immovable tangible capital assets

67,455 - (67,455) - -


Movement in immovable tangible capital assets per asset register for the year ended 31 March 2014Opening balance

Prior period error


R’000 R’000 R’000 R’000 R’000

Buildings and other fixed structures 76 - - - 76Other fixed structures 76 - - - 76Total immovable tangible capital assets

76 - - - 76




33.

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ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTSfor the year ended 31 March 2015

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Annexure 5

Inventories

Inventory 2014/15 2013/14

R’000 R’000

Opening balance 115,808 2,542,246

Less: Adjustments to prior year balance - (2,368,362)

Add: Purchases - Cash 2,989,955 2,786,841

Less: Issues (2,894,561) (2,844,917)





Inventory 2014/15 2013/14

R’000 R’000

Opening balance 115,808 2,542,246

Less: Adjustments to prior year balance - (2,368,362)

Add: Purchases - Cash 2,989,955 2,786,841

Less: Issues (2,894,561) (2,844,917)


Annexure 6Movement in capital work in progress

Movement in capital work in progress for the year ended 31 March 2015Opening balance

Current Year Capital WIP

Completed Assets

Closing balance

R’000 R’000 R’000 R’000Buildings and other fixed structures 172,298 67,455 239,753Dwellings 8,651 - - 8,651Other fixed structures 163,647 67,455 - 231,102

Total 172,298 67,455 - 239,753

Movement in capital work in progress for the year ended 31 March 2014Opening balance

Prior period error

Current Year Capital WIP

Completed Assets

Closing balance

R’000 R’000 R’000 R’000 R’000

Buildings and other fixed structures 135,448 - 36,850 - 172,298Dwellings 1,852 - 6,799 - 8,651Other fixed structures 133,596 - 30,051 - 163,647

Total 135,448 - 36,850 - 172,298



Annexure 7

Inter-entity advances received (Note 17)

Entity

Confirmed balance outstanding

Unconfirmed balance outstanding Total

31/03/2015 31/03/2014 31/03/2015 31/03/2014 31/03/2015 31/03/2014R’000 R’000 R’000 R’000 R’000 R’000

National Departments Current Military Veterans 11,286 3,600 - - 11,286 3,600

Total 11,286 3,600 - - 11,286 3,600




KwaZulu-Natal Housing Fund

Financial Information


KwaZulu-Natal Housing Fund 236

Report of the Auditor-General to the KwaZulu-Natal Provincial Legislature on the Housing Fund

Report on the Financial Statements

Introduction 1. I have audited the financial statements of the Housing Fund set out on pages 244 to 272, which comprise the

statement of financial position as at 31 March 2015, the statement of financial performance, statement of changes in net assets, cash flow statement and statement of comparison of budget information with actual information for the year then ended, as well as the notes, comprising a summary of significant accounting policies and other explanatory information.

Accounting authority’s responsibility for the financial statements2. The accounting authority is responsible for the preparation and fair presentation of these financial statements

in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA), and for such internal control as the accounting authority 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 responsibility3. 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 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.

Opinion6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Housing

Fund as at 31 March 2015 and its financial performance and cash flows for the year then ended, in accordance with the SA Standards of GRAP and the requirements of the PFMA.

Emphasis of matters 7. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Restatement of corresponding figures8. As disclosed in note 16 to the financial statements, the corresponding figures for 31 March 2014 have been

restated as a result of an error discovered during 2014-15 in the financial statements of the Housing Fund at, and for the year ended, 31 March 2014.


KwaZulu-Natal Housing Fund237

Material impairments9. As disclosed in note 4.1 to the financial statements, material losses of R20,54 million were incurred as a result of

the write-off of irrecoverable receivables in terms of the enhance extended discount benefit scheme policy.

Report on other legal and regulatory requirements 10. 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 for selected objectives 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.

Predetermined objectives11. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance

information for programme 4: housing assets and property management on pages 240 to 241 presented in the annual performance report of the fund for the year ended 31 March 2015:

12. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

13. 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 objectives. 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).

14. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

15. I did not identify any material findings on the usefulness and reliability of the reported performance information for programme 4: housing assets and property management.

Additional matter16. Although I identified no material findings on the usefulness and reliability of the reported performance information

for the selected objective, I draw attention to the following matter:

Achievement of planned targets17. Refer to the annual performance report on pages 49 to 50 for information on the achievement of the planned

targets for the year.

Compliance with legislation 18. I performed procedures to obtain evidence that the fund had complied with applicable legislation regarding

financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows:



Financial statements19. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial

reporting framework as required by section 55(1) (b) of the PFMA. Material misstatements of non-current assets, net assets, revenue, expenditure and disclosure items identified by the auditors in the submitted financial statements were subsequently corrected, resulting in the financial statements receiving an unqualified audit opinion.

Internal control20. 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 findings on compliance with legislation included in this report.

Leadership21. Notwithstanding the management oversight and monitoring, there were still inadequacies that resulted in the

financial statement not being thoroughly reviewed and non-compliance with laws and regulations throughout the financial year.

Financial and performance management22. Management did not implement adequate controls to ensure that the financial statements were prepared in

accordance with SA Standards of GRAP and were supported by accurate and reliable evidence, as material misstatements were identified.

Pietermaritzburg

29 July 2015



Domicile: • Physical address : Old Mutual Building

203 Church StreetPietermaritzburg 3201

• Postal address : Private Bag X9157Pietermaritzburg3200

Legal form: • The KwaZulu-Natal Housing Fund is an unlisted public entity in terms of Section 47 (2) of the Public

Finance management Act, 1999, (Act No. 1 of 1999).

Jurisdiction: • Province of KwaZulu-Natal.

Entities operations and principal activities: • Is to maintain the properties that are owned by the KwaZulu-Natal Housing Fund; • Is to dispose of its properties, by: -

Øpromoting home ownership in term of the Enhanced Extended Discount Benefit scheme; andØ devolving properties in terms of the Housing Act, 1997 (Act, 107 of 1997).

Legislation governing the entity’s operations:• Constitution of the Republic of South Africa, 1996, (Act, No 108 of 1996);• Housing Act, 1997 (Act, 107 of 1997);• KwaZulu-Natal Housing Act, 1998 (Act No. 12 of 1998 as Amended); and• Public Finance Management Act, 1999 (Act No. 1 of 1999).

Controlling Entity: • The KwaZulu-Natal Housing Fund is administered by the KwaZulu-Natal Department of Human

Settlements (Vote 8).

General Informationfor the year end 31 March 2015



1.1 PROGRAMME 4: HOUSING ASSETS MANAGEMENT, PROPERTY MANAGEMENT

This programme co-ordinates the maintenance of the departmental rental housing stock, the refurbishment of the old hostels and the conversion thereof to community residential units, the rectification of units built prior to 1994 and the transfer of rental housing stock to qualifying beneficiaries in terms of the extended enhanced discount benefit scheme (EEDBS).

The maintenance of the rental housing stock and the vacant land of the department is one of the key focus areas of Property Management. Whilst the rental stock is being suitably maintained, it is the intention to deplete the rental stock by implementing the rectification programme and intensifying the transfers of properties to qualifying beneficiaries in terms of the EEDBS.

Strategic objectives:

Programme 4: Housing Assets Management, Property Management

Strategic objectives Actual Achievement 2013/14

Planned Target

2014/2015

Actual Achievement

2014/2015

Deviation from planned target to

Actual Achievement for 2014/2015


Promote security of tenure (number of EEBDS houses remaining to be transferred)

787 1,135 633 502

The variance can be attributed to the following reasons:

-Delays in municipalities appointing the conveyancers due to LCM cumbersome processes.

-Municipalities not willing to issue rates certificates due to outstanding debt.

-challenges related to mother title at deeds office, citation on Power of attorney and delegations

Performance Informationfor the year end 31 March 2015




Programme 4: Housing Assets Management, Property Management


Actual Achievement 2013/2014

Planned Target

2014/2015

Actual Achievement

2014/2015

Deviation from planned target to

Actual Achievement for 2014/2015


Number of rental units transferred 787 1,565 639 (926)

Number of units maintained 3,289 3,000 3,529 529

Number of units Rectified and or Upgraded for Pre -1994

60 2,000 2,082 82

Performance Informationfor the year end 31 March 2015



1. General review of the state of financial affairs

The KwaZulu-Natal Housing Fund receives no funding from the National Department of Human Settlements.

2. General

The Housing Act, Act no.107 of 1997 that governs the Housing Fund is currently in the process of being amended at a national level in order to dis-establish the National Housing Fund. Once the said act has been amended the KwaZulu-Natal Department of Housing will be in a position to amend the KwaZulu-Natal Housing Act 12 of 1998, to allow for the de-establishment (target date 31 March 2017) of the KwaZulu-Natal Housing Fund and to transfer all its assets and liabilities to the KwaZulu-Natal Department of Human Settlements.

The two consultants responsible for cleaning up the fund, took up contract posts in the fund. Their responsibilities are to ensure that the fund’s activities are accurately maintained at all times.

The fund is on a drive to promote home ownership by marketing the enhanced extended discount benefit scheme (EEDBS), which will facilitate the transfer of houses to the qualifying beneficiaries. The fund is currently negotiating a process of devolving the funds properties with respective municipalities in terms of Section 15 of the Housing Act, 1997 (Act No. 107 of 1997).

During the financial year there were no investigations relating to the KwaZulu-Natal Housing Fund, however the Fund is monitoring a criminal case against a former employee who was dismissed from service.

Scopa resolutions

Resolution No.


22/2014 Basis of qualification: except for opinion

Ø Property, plant and equipment - The entity did not comply with the requirements of GRAP 21 (Non cash-generating assets) when calculating and accounting for the impairment of property, plant and equipment. Consequently, property, plant and equipment was understated and expenditure overstated by an unknown amount, as it was impracticable to quantify the misstatement.

ØThe maintenance section maintains a complaints / maintenance register. The maintenance register indicated that there are properties that must be impaired. The Department’s quantity surveyor’s visited these properties and gave an assessment and a costing to that effect. The annual financial statements for the year ending was amended to account for the said impairments.

Yes

ØThe entity did not comply with GRAP 17 (Property, plant and equipment) when accounting for the revaluation of properties. Consequently, property, plant and equipment and the revaluation surplus were overstated by an unknown amount, as it was impracticable to quantify the misstatement.

Report by the Accounting Officer to the Executive Authority and KwaZulu-Natal Provincial Legislature for the year end 31 March 2015



Resolution No.


Ø The entity did not account for expenditure relating to employee compensation in accordance with GRAP 25 employee benefits in respect of employees performing shared services. Consequently, employee costs were misstated by an unknown amount, as it was impracticable to quantify the misstatement.

ØEvery employee and management alike, engaged in shared services maintains a register of their time spent on the Funds activities.

Yes

ØThe entity did not account for the correction of an error in respect of induplum interest amounting to R 110 million in accordance with GRAP 3 accounting policies, estimates and errors. I was not able to determine the full extent of the impact of the error during the current and prior years. Consequently, revenue was understated and the accumulated fund overstated by an unknown amount, as it was impracticable to quantify the impact of the misstatement.

ØThe reason for this qualification is that the Funds system is old and antiquated, and it is NOT GRAP compliant. The Fund’s system was not in a position to split the induplum interest between current year, previous year and prior years. A report was designed by National Department of Human Settlements to extract the said information.

3. Events after the reporting date

No significant events have occurred after the reporting date that will materially affect the information presented in the annual financial statements.

4. Approval

The attached annual financial statements set out in pages 244 to 272 have been approved by the Accounting Officer.

___________________________________ _________________

Ms G. M. Apelgren-Narkedein DATEAccounting Officer KwaZulu-Natal Housing Fund

Report by the Accounting Officer to the Executive Authority and KwaZulu-Natal Provincial Legislature for the year end 31 March 2015



2014/15 2013/14 Note R’000 R’000

Restated

REVENUE 2 4,356 2,900

OTHER REVENUE 3 180,391 295,674

TOTAL REVENUE 184,747 298,574

EXPENDITURE 4 201,030 288,078

NET (DEFICIT) / SURPLUS FOR THE YEAR (16,283) 10,496

REVALUATION RESERVE REALISED ON SALE OF PROPERTIES

10,112 20,205

(6,171) 30,701

TRANSFERRED TO ACCUMULATED FUNDS 6,171 (30,701)

- -

Statement of financial performance for the year end 31 March 2015



2014/15 2013/14 Note R’000 R’000

RestatedASSETS

Current assets 23,174 35,425 Inventory 4.6 / 18 3,229 2,724 Receivables from Exchange Transactions 6 9,606 10,855 Provincial Revenue Fund 7 10,339 21,846

Non-current assets 996,160 1,019,081 Land and Buildings 5 996,160 1,019,081

Total assets 1,019,334 1,054,506

LIABILITIES

Current liability 17,325 22,454 Accounts Payable 8 14,751 7,565 Department of Human Settlements 9 / 17.2 2,574 14,889

TOTAL LIABILITY 17,325 22,454

NET ASSETS 1,002,009 1,032,052

Represented by: 1,002,009 1,032,052 Accumulated Funds 54,330 60,171 Non - Distributable Reserve 947,679 971,881

Total 1,002,009 1,032,052

Statement of financial position for the year end 31 March 2015



Note Revaluation Reserve

Accumulated Surplus Total Net Assets

R’000 R’000 R’000

Accumulated Funds

Opening balance as previously reported 923,975 65,193 989,168 Prior year error 47,906 (37,009) 10,897 Fundamental error 14/16 47,906 (37,009) 10,897

Balance at 01 April 2014 as restated 971,881 28,184 1,000,065 As previously reported 923,975 65,193 989,168 Prior year error 47,906 (37,009) 10,897

Transfer from LI Suspense 12.1 - (5) (5)Transfer of receipts from closed accounts 1,291 1,291

Net surplus for the year transferred from statement of financial performance - 30,701 30,701

Revaluation adjustment 13 - - As previously reported - - - Accumulated depreciation on revalued portion of buildings - - -

Balance at 01 April 2014 971,881 60,171 1,032,052

Transfer from LI Suspense 12.1 - 81 81 Transfer of receipts from closed accounts 249 249

Net deficit for the year transferred from statement of financial performance

- (6,171) (6,171)

Revaluation adjustment 13 (24,202) - (24,202)Accumulated depreciation on revalued portion of buildings (14,090) - (14,090)Transfer of revaluation reserve realised on sale of properties (10,112) - (10,112)

Balance at 31 March 2015 947,679 54,330 1,002,009

Statement of changes in net assetsfor the year end 31 March 2015



2014/15 2013/14 Note R’000 R’000

CASH FLOW UTILISED FOR OPERATING ACTIVITIES

ReceiptsDebtors: -- Sold 1,813 1,175 - Rental 837 751 - Individual Loan 18 119 -Transfers received from Department of Human Settlements 143,664 167,909

Expenditure

Payments- Clean-up of Housing Fund - 3,992 - Commission on post office receipts 57 54 - Funded by Department of Human Settlements 143,664 167,909 - Non-recoverable rates - - - Recoverable rates 1,520 3,586 - Recoverable maintenance 97 53 - Refunds 13 -

Net cash flows from operating activities 981 (5,640)

NET CASH FLOW FROM INVESTING ACTIVITIES 81 (5)

Decrease / (increase) in Accumulated Funds 81 (5)Increase in Debtors contra - -

NET CASH FLOW FROM FINANCING ACTIVITIES (1,062) 5,645

Increase in clearing accounts 6.1 (253) (8)Decrease in Provincial Treasury 11,507 - Decrease in Department of Human Settlements 9 (12,316) 5,653

Net increase in cash and cash equivalents - -

Cash and cash equivalents at the beginning of the year - -

Cash and cash equivalents at the end of the year - -

Cash flow statementfor the year end 31 March 2015



The financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting Practices (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board in accordance with Section 55(1) (b) of the Public Finance Management Act, (Act No.1 of 1999 as amended by Act No. 29 of 1999). Assets, liabilities, revenues and expenses have not been offset except where offsetting is required or permitted by a Standard of GRAP. The accounting policies are applied consistent with those used to present the previous year’s financial statements, unless explicitly stated. The details of any changes in accounting policies are explained in the relevant policy. However, where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the Financial Statements.

1. Presentation of the Financial Statements1.1 Basis of preparation

The annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention, except for financial instruments that have been measured at fair value.

1.2 Presentation currency All amounts have been presented in the currency of the South African Rand (R) which is also the

functional currency of the fund.

1.3 Rounding Unless otherwise stated all financial figures have been rounded to the nearest one thousand Rand

(R’000).

1.4 Comparative figures 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.

1.5 Revenue

1.5.1 Net Revenue The net cash revenue received is surrendered to the Provincial Revenue Fund. 1.5.2 Revenue recognition Represents interest charged on suspensive sale debtors at various rates, admin fees

charged at a fixed and rental charged at a pre-determined formula.

Rentals are recognised on a straight-line basis over the term on the lease agreement. Interest earned on investments is recognised in the Statement of Financial Performance on the effective interest rate basis that takes into account the effective yield on the investment.

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

• the Fund has transferred to the buyer the significant risks and rewards of ownership of the goods;

Statement of accounting policies and related mattersfor the year ended 31 March 2015



• the Fund retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• the amount of revenue can be measured reliably; • it is probable that the economic benefits or service potential associated with the

transaction will flow to the Fund • the costs incurred or to be incurred in respect of the transaction can be measured

reliably.

1.6 Going concern assumption These annual financial statements are prepared on the basis that the Fund will remain a going

concern for the foreseeable future, although a national decision was made to disestablish the Provincial Housing Funds, however legislative changes to the National Housing Act, 1997 (Act no. 107 of 1997) have not been enacted to allow for the disestablishment of the Fund.

1.7 Impairment of financial assets Annually an assessment is made as to whether there are any impairments of Financial Assets. If so,

the recoverable amount is estimated and an impairment loss is recognised.

Debtors are stated at cost less any provision for impairment. The provision of 95 % is made of all debtors at year end. The reason for using 95 % is that history and trends have shown us that we only collect about 5 % of our debtors inclusive of the subsidy amount. The other factor of making a provision of 95 % is that a significant portion of our debtors are indigent and there are debtors who on approval of their EEDBS application cease to pay. We assess the recoverability of debtors collectively after grouping the indigent and/or approved EEDBS debtors in financial asset groups with similar credit risk characteristics.

Loans and Receivables are non-derivative Financial Assets with fixed or determinable payments. They are included in current assets.

Loans and receivables are recognised initially at cost which represents fair value.

After initial recognition Financial Assets are measured at amortised cost, using the effective interest rate method less provision for impairment. All classes of loans and receivables are separately assessed for impairment annually.

1.8 Financial transactions in assets and liabilities Debts are written off when identified as irrecoverable. Debts written-off are limited to the amount of

the net revenue. The write off occurs at year-end or when funds are available. Provision is made for irrecoverable amounts.

All other losses are recognised when authorisation has been granted for the recognition thereof. 1.9 Fruitless and wasteful expenditure Fruitless and wasteful expenditure is recognised as an asset in the statement of financial position until

such time as the expenditure is recovered from the responsible person or written off as irrecoverable in the statement of financial performance.




1.10 Irregular expenditure Irregular expenditure is recognised as expenditure in the statement of financial performance. If the

expenditure is not condoned by the relevant authority it is treated as an asset until it is recovered or written off as irrecoverable.

Assets1.11 Property, plant and equipment

The Fund’s primary property portfolio is held to provide a social service and which also generates cash flows. The Fund holds a large housing stock used to provide housing to low income families at below market rental. In this situation, the property is held to provide housing services rather than for rentals or capital appreciation and rental revenue generated is incidental to the purposes for which the property is held.

As per the guidance provided in GRAP 16: Investment property; such property is not considered as investment property nor inventories and would be accounted for in accordance with the Standard of GRAP on property, plant and equipment.

Initial recognitionProperty, plant and equipment are tangible non-current assets that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.

Items of property, plant and equipment are initially recognised as assets on acquisition date and are initially recorded at cost. The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Fund. Trade discounts and rebates are deducted in arriving at the cost. The cost also includes the necessary costs of dismantling and removing the asset and restoring the site on which it is located.

Where an item of property, plant and equipment is acquired at no cost, or for nominal cost, its cost is its fair value as at the date of the acquisition. Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired non-monetary asset’s fair value is undeterminable, it’s deemed cost is the carrying amount of the asset given up.

When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Major spare parts and stand by equipment which are expected to be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment.

Subsequent measurement – Revaluation modelProperty, plant and equipment is carried at revalued amount, being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

Revaluations are done every 5 years, if market conditions have significantly changed, that the carrying amount does not materially differ from that which would be determined using fair value at the end of the reporting period. Management considers the latest municipal values as a reliable basis as compared to fair value.




When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount of the asset.

Any increase in an asset’s carrying amount, as a result of a revaluation, is credited directly to the revaluation surplus. The increase is recognised in surplus or deficit to the extent that it reverses a revaluation decrease of the same asset previously recognised in surplus or deficit.An impairment test is will be conducted on an annual basis, if an indication of an impairment is present, the asset will be written down to its recoverable amount.

Any decrease in an asset’s carrying amount, as a result of devaluation, is recognised directly in surplus or deficit for the current period. The decrease is debited directly to a revaluation surplus to the extent of any credit balance existing in the revaluation surplus in respect of that asset first.

Depreciation Subsequent to initial measurement property, plant and equipment are depreciated on a straight line basis over their expected useful lives to their estimated residual values. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The useful lives of property plant and equipment have been assessed as follows:

Years Land 0Buildings 30 Office equipment 3 – 7Furniture and fittings 7 – 10

The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset.

The residual value, the useful life and depreciation method of each asset is reviewed at the end of each reporting date. If the expectation differs from previous estimates, the change is accounted for as a change in accounting estimate.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

De-recognitionItems of property, plant and equipment are derecognised on disposal, or when no future economic benefits or service potential are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment, is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. Such a difference is recognised in surplus or deficit when the item is derecognised.




1.12 Prepayments and advances

Amounts prepaid or advanced are recognised in the statement of financial position when the payments are made.

1.13 Receivables and prepayments

Receivables and prepayments, included in the statement of financial position comprises rental debtors, suspensive sale debtors and individual loan debtors.

Receivables are recognised initially at originating cost and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

A provision for impairment of trade receivables is established when there is objective evidence that the Fund will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. When a trade receivable is uncollectible, it is written off in terms of the Fund’s Credit Control and Debt Collection Policy. Subsequent recoveries of amounts previously written off are credited against to the Statement of Financial Performance.

Liabilities1.14 Payables Recognised payables mainly comprise of amounts owing to other entities. These payables are

recognised at historical cost in the statement of financial position.

1.15 Contingent liabilities A contingent liability 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 wholly within the control of the fund; or

• A contingent liability is a present obligation that arises from past events but is not recognised because:

• It is not probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; or

• The amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are included in the notes.

1.16 Commitments Commitments represent goods/services that have been approved and/or contracted, but where no

delivery has taken place at the reporting date.

Commitments are not recognised in the statement of financial position as a liability or as expenditure in the statement of financial performance but are included in the disclosure notes.




1.17 Employee benefits

Short term employee benefits

Short term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of period in which the employees render the related service.

When an employee has rendered services to the Fund during a reporting period, the Fund recognises the undiscounted amount of the short term employee benefits expected to be paid in exchange for that service:

• As a liability (accrued expense), after deducting any amount already paid. If the amount

already paid exceeds the undiscounted amount of the benefits, the Fund recognise that in excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, reduction in future payments or a cash refund; and

• As an expense, unless another standard requires or permits the inclusion of benefits in the cost of an asset.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, the case of non- accumulating absences, when the absence occurs. The Fund measures the expected cost of accumulating absences as the additional amount that the Fund expects to pay as a result of the unused entitlement that has accumulated at reporting date.

The Fund recognises the expected cost of bonus; incentive and performance related payments when the Fund has a legal or constructive obligation to make such payment as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the Fund has no realistic alternative but to make payments.

1.18 Inventory Inventories are stated at cost or net realisable value. Where inventories are acquired at no cost, or

for nominal consideration, their cost shall be their fair value at the time of acquisition.

All inventory items at year-end are reflected using the FIFO cost formula.

1.19 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Operating leases – lessor Operating lease revenue is recognised as revenue on a straight line basis over the lease term. The

difference between amounts recognised as income and the contractual payments are recognised as an operating lease liability or asset.

The aggregate cost of incentives is recognised as a reduction of rental revenue over the lease term on a straight line basis.




Any contingent rent is recognised separately as revenue in the period in which they are received.

Income for leases is disclosed under revenue in the statement of financial performance.

Finance leases – lessor The Fund recognises finance lease receivables as assets on the statement of financial position.

Such assets are presented as a receivable at an amount equal to the investment in the lease.

Finance revenue is recognised based on a pattern reflecting a constant periodic rate of return on the Fund’s net investment in the finance lease.

Net Assets1.20 Accumulated Funds Accumulated Funds comprise amounts recognised as receivables and other assets raised.

1.21 Non-Distributable Reserve Non-distributable reserves comprise revaluations to immovable property.

1.22 Related party transactions Related parties are entities that control or significantly influence the fund in making financial and

operating decisions. Specific information with regards to related party transactions is included in the notes.




2014/15 2013/14 Note R’000 R’000

Restated

2 Revenue

Admin fees received

- individual loan

4 3- finance leases (suspensive sale) 36 3Rent received 4,316 2,894

Total 4,356 2,900

3 Other Revenue

Interest received

- individual loan 1,585 580 - finance leases (suspensive sale) 28,974 35,975 Transfers received from Department of Human settlements 143,664 167,909 Decrease in provision for doubtful debts 6,168 91,210

Total 180,391 295,674

4 Expenditure

4.1Funded by the KwaZulu-Natal Housing Fund: 48,995 116,760

Clean up of Housing Fund - 2,353Commissions paid on post office receipts 57 54Depreciation - buildings 5 1,085 1,120EEDBS - capital adjustments / rebates / write-offs 20,549 12,024Induplum interest write back 20,738 79,367Loss on sale of land and Buildings 6,415 19,441Subsidies given to debtors on receipt of instalments 151 2,401

Notes to the annual financial statementsfor the year ended 31 March 2015



2014/15 2013/14 Note R’000 R’000

4.2Funded by the Department of Human settlements and accruals:

152,035 171,318

Compensation of employees

Salaries and wagesBasic salary 29,457 28,583 Performance awards 681 462 Service Based 265 125 Compensative / circumstantial 363 1,370 Other non-pensionable allowances 5,721 4,746

Total 36,487 35,286

Social ContributionsEmployer contributionsPension 3,941 4,178Medical 2,062 2,295bargaining council 11 11

Total 6,014 6,484

Total compensation of employees 42,501 41,770




2014/15 2013/14 Note R’000 R’000

Goods and servicesAdvertising 49 146 Audit fees 3,612 - Assets less than R5,000 4.3 2 156 Catering 4 1 Communication 335 327 Computer services 4.4 217 197 Consultants, contractors and agency/out-sourced services 4.5 14,702 4,400 Inventory 4.6 1,048 1,508 Operating leases 232 96 Property payments 4.7 31,763 29,350 Transport provided as part of the departmen-tal activities - 32 Travel and subsistence 410 2,032 Venues and facilities - 71 Other operating expenditure 482 360

Total 52,856 38,676

Payment for financial assets 21 35

Transfers and subsidiesProvinces and municipalities 4.8 36,872 75,396 Households 4.9 19,785 15,441

Total 56,657 90,837

Total expenditure 201,030 288,078




2014/15 2013/14 Note R’000 R’000

4.3 Assets less than R5,000 Tangible assets

Machinery and equipment 2 34Office furniture and other - 122

Total 2 156

4.4 Computer servicesExternal computer service providers 217 197

4.5Consultants, contractors and agency/out-sourced servicesLegal costs 208 243Contractors 14,494 4,157

Total 14,702 4,400

4.6 InventoryOpening balance 2,724 3,266 Fuel, oil and gas - 70 Other consumables 8 286 Materials and supplies 1,545 572 Stationery and printing and other - 38 Closing balance (3,229) (2,724)

Total 1,048 1,508

4.7 Property paymentsMunicipal services and levies 29,407 27,115Property maintenance and repairs 2,356 2,235

Total 31,763 29,350

4.8 Provinces and municipalitiesProperty maintenance and rectification 20,715 60,377Rates and taxes 16,157 15,019

Total 36,872 75,396




2014/15 2013/14 Note R’000 R’000

4.9 HouseholdsEmployee benefits 486 9,610Rectification 19,299 5,831

Total 19,785 15,441

5 Property, plant and equipment

Valuation Accumulated depreciation and

accumulated impairment

Carrying Value

2015 R’000 R’000 R’000Land 619,145 - 619,145 Buildings 481,383 (104,368) 377,015

1,100,528 (104,368) 996,160

2014Land 621,713 - 621,713 Buildings 486,658 (89,290) 397,368

1,108,371 (89,290) 1,019,081

Reconciliation of property, plant and equipment

2015 Opening Balance Additions Disposal Land 621,713 - (2,568)Buildings 397,368 - (5,178)

1,019,081 - (7,746)

2015 Revaluations Depreciation Total Land - - 619,145 Buildings - (15,175) 377,015

- (15,175) 996,160

2014 Opening Balance Additions Disposal Land 635,752 - (14,039)Buildings 445,616 - (6,997)

1,081,368 - (21,036)




Valuation Accumulated depreciation and

accumulated impairment

Carrying Value

R’000 R’000 R’000

2014 Revaluations Depreciation Total Land - - 621,713 Buildings (25,238) (16,013) 397,368

(25,238) (16,013) 1,019,081

Properties comprise vacant land, residential (serviced and un-serviced) and commercial land and buildings.

Properties are stated at market value.

Revaluations

The effective date of the revaluations was 01 April 2010. Land and buildings are revalued at municipal values and where applicable an independent valuer was used.

The method used by the independent valuer in estimating the market value of the properties was a comparative market analysis, also knows as direct comparison method. Adjustments were made to the sale price of the comparable properties for inevitable differences between the comparable properties and the subject properties.




2014/15 2013/14 Note R’000 R’000

Restated

6 Receivables and prepaymentsClearing accounts 6.1 57 (191)Rental debtors 6.2 45,037 42,966 Suspensive sale debtors 6.3 145,950 155,686 Less: provision for doubtful debts 3 (181,438) (187,606)

9,606 10,855

6.1 Clearing AccountsLI Suspense (123) (372)Rental deposit 21 21 Post Office 159 160

57 (191)

6.2 Rental debtors 20.2 45,037 42,966

These debtors are in respect of rentals owing by individuals on properties rented.

6.3 Suspensive sale debtors 20.2 145,950 155,686 Individual loans 4,585 4,464 Sold properties 141,365 151,222

6.3.1 These debtors are in respect of sales of individual properties where the monthly repayment is over a 30 year period. Ownership is transferred immediately with respect to individual loans and with respect to sold properties ownership is transferred on repayment of the loan in full.

6.3.2 Induplum interest was written back during the current financial year - R 20,738 m




2014/15 2013/14 Note R’000 R’000

Restated

6.3.3 Enhanced Extended Discount Benefit Scheme (EEDBS)The KwaZulu-Natal Housing Fund has emarked on a drive to promote the EEDBS policy. This policy encourages the debtors to take advantage of the said policy. This policy is directed at indigent people and it also promotes home ownership.

6.3.4 Reconciliation between the total gross investment in the lease and present value of the minimum lease payments:

Gross investment in finance lease

Not later than 1 year 8,322 11,736 Later than 1 year and not later than 5 years 33,289 46,945 Later than 5 years 26,163 49,862

67,774 108,543 Unearned future finance income 47,684 74,802 Net investment in finance leases 20,090 33,741

6.4 Financial assets by categoryFinancial instrument at amortised cost

Rental debtors 2,252 2,148 Suspensive sale debtors 7,297 8,898

9,549 11,046

7 Provincial Revenue Fund Balance at beginning of the year 10,339 21,846

8 Accounts Payable 10Trade Creditors 14,555 5,680 Debtors’ Credit Balances 196 1,885

14,751 7,565




2014/15 2013/14 Note R’000 R’000

Restated

9 Department of Human Settlements 10 2,574 14,889

The KwaZulu-Natal Housing Fund does not have its own bank account.All its cash transactions are done via the Department of Human Settlements bank account.

10 Financial Liability by categoryFinancial instrument at amoritised costTrade creditors 8 14,555 5,680 Debtors’ with credit balances 8 196 1,885 Department of Human Settlements 9 2,574 14,889

20.4 17,325 22,454

11 Reconciliation of net cash flows from operating activities: (deficit) / surplus (16,283) 10,496

Non - cash movementsRevenueadmin fees received (40) (6 )rent received from rental debtors (4,316 ) (2,894) Interest received on suspensive sale and individual loan debtors

(30,559) (36,555)

Decrease in provision for doubtful debts (6,168) (91,210) (57,366) (120,169)




2014/15 2013/14 Note R’000 R’000

Restated

11 Reconciliation of net cash flows from operating activities to deficit (continued) (57,366) (120,169)

ExpenditureIncrease in trade accruals 8,875 1,229 Depreciation 1,085 1,120 EEDBS - capital adjustments / rebates / writeoffs

20,550 12,024

Induplum interest write back 20,739 79,367 Loss on sale of land and buildings 6,415 19,441 (Increase) / decrease in inventory (505) 542 Subsidies given to debtors on receipt of instalments

151 2,400

(56) (4 046)Cash receipts and expenditureReceipts from debtors 2,655 2,045 Recoverable expenditure relating to debtors (1,618 ) (3,639)

Net cash flows from operating activities 981 (5,640)

12 Accumulated Funds 81 (5)

12.1 Correction of transactions that did not interface from the LI suspense account.

13 Non-Distributable ReserveRevaluation of land and buildings 971,881 1 048,478 Prior year adjustment - adjustment of excess revaluation - (19,411)- reversal of over provision of depreciation - 5,729 - reversal of excess revaluation - (744)Balance re-stated - 01 April 2014 971,881 1,034,052 Less accumulated depreciation on revalued portion of buildings 5 (14,090) (16,728)transfer of revaluation reserve realised on sale of properties (10,112) (20,205)less accumulated impairments on revalued portion of buildings - (87,570)add reversal of excess impairments - 62,332

947,679 971,881




2014/15 2013/14 Note R’000 R’000

Restated

13.1 The non-distributable reserve arose as a result of revaluing of the land and buildings to market value.

14 Prior Year Adjustment- revaluation 13 (14,426)

The prior year adjustment arose as a result of the adjustment to the revaluation of buildings in prior years and subsequently the adjustment of depreciation on buildings.

15 CommitmentCurrent expenditureApproved and contracted for 6,527 1,502 Approved and not contracted for 3,036 532

9,563 2,034

Capital expenditureApproved and contracted for 1,454,109 1,493,145 Approved and not contracted for 2,523,652 2,308,749

3,977,761 3,801,894

Total commitments 3,987,324 3,803,928

16 Correction of Prior Period Error

Accumulated FundsBalance as previously reported 65,193 Fundamental error:-- induplum interest write back- previous year (28,209)- prior year (11,620)- alignment adjustments 2,820 Balance as currently reported 28,184




2014/15 2013/14 Note R’000 R’000

Restated

land and BuildingsBalance as previously reported 968,318 Fundamental error – write-off in terms of the housing fund clean up (744)

Fundamental error - reversal of excess impairments 62,334Reversal of revaluation of land and Buildings (19,413)Reversal of accumulated depreciation on revaluation adjustment 5,729 Alignment of opening balance 2,857 Balance as currently reported 1,019,081

Receivables from Exchange TransactionsBalance as previously reported 10,017 Fundamental error - induplum interest addback (9,013) - debtors contra - transfer of receipts 1,291 - alignment of opening balance (37)Adjustment to provision for doubtful debts 8,597 Balance as currently reported 10,855

Fundamental ErrorLand and Buildings and Revaluation reserveThe fundamental errors arose as a result of reversal of excess provision for impairments, correction of incorrect revaluation on certain properties and take on a new property. The adjustment of the revaluation resulted in the reversal of depreciation on the revalued portion of the said properties.

Suspensive Sale The fundamental error arose as a result of the split of the induplum interest addback between previous and prior years.




2014/15 2013/14 Note R’000 R’000

Restated17 Related party transactions

The following related parties were identified

17.1 Value of the Transactions 3 143,664 167,909

The KwaZulu-Natal Housing Fund does not receive any funding from the National Department of Human Settlements. The Provincial Department of Human Settlements pays for its expenses in terms of DoRA.

17.2 Department of Human Settlements 9 2,574 14,889

The Department of Human Settlements controls the KwaZulu-Natal Housing Fund. The said fund does not have its own bank account.

All monies received by the said fund is deposited in the Departments

bank account. This obligation is expected to be settled in the entities normal operating cycle, i.e. on receipts from its debtors.

17.3 Commitments 15 3,987,324 3,803,928

These commitments are of a long term nature, in relation to the operations of the KwaZulu-Natal Housing Fund and in respect of maintenance and rectification of its properties.

17.4 Guarantees

The KwaZulu-Natal Housing Fund will meet its obligations in the normal course of business through its funding from The Provincial Department of Human Settlements via DoRA.




2014/15 2013/14 Note R’000 R’000

Restated

17.5 Shared Services

Class of management No. of individuals- Programmes 1,2 & 3 - level 15 to 16 3 563 1,109 - level 14 5 228 1,095 - other 98 4,911 4,021

5,702 6,225 The Department of Human settlements provides administrative and management services to the KwaZulu-Natal Housing Fund. The cost of R 5,702 (2014 - R 6,225), is not included in the compensation to employees figure in note - 4.2. This figure comprises of actual time spent of basic salary and performance bonuses were applicable.

17.6 LeasesNot later than 1 year 616 2,981 Later than 1 year and not later than 5 years - 616 Later than 5 years - - Total lease commitments 616 3,597

18 Inventory Opening balance 2,724 3,266 Add: purchases 1,553 966 less: issues 1,048 1,508 Closing balance 3,229 2,724

Inventory comprises of building and mainte-nance materials.

19 Irregular ExpenditureReconciliation of irregular expenditureOpening balance 15,943 13,590 Add: irregular expenditure - relating to the cur-rent year - 2,353 Less: condoned - - Irregular expenditure awaiting condonation 15,943 15,943




2014/15 2013/14 Note R’000 R’000

Restated

Details of irregular expenditure - current yearIncidentDeviation from calling of bids 15,943 15,943

20 Risk Management

20.1 Financial Risk Management

The Fund’s activities exposed it to a variety of financial risks: - market risks (including interest rate risk);- credit risk; and- liquidity risks.This note presents information about the Fund’s exposure to each of the above risks, the fund’s objectives, policies and processes for the measuring and managing risks, and the Fund’s management of capital. Further quantitative disclosures are included throughout these financial statements.The Accounting Authority has the overall responsibility for the establishment and oversight of the Fund’s risk management framework.The Fund’s risk management policies are established to identify and analyse the risk faced by the Fund, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the fund’s activities. The Fund, through its training and management standards and procedures, aims to develop a discipline and constructive control environment in which all employees understand their roles and obligations.

20.2 Credit Risk

Credit risk is the risk of the financial loss to the Fund if a customer to a financial instrument fails to meet its contractual obligations, and arises primarily from the Fund’s receivables from customers.

Trade and Loans ReceivablesThe Fund’s exposure to credit risk is influenced mainly by the individual characteristics of each tenant. The demographics of the Fund’s customer base have less of an influence on credit risk. Geographically, there is no concentration of risk.

The Fund establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade receivables and loans receivable. The collective loss allowance is determined, based on historical data payment statistics for similar financial assets.

The carrying amount of the financial assets represent the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:




2014/15 2013/14 Note R’000 R’000

Restated

Credit RatingTrade receivables from exchange transactions - rentals Low 45,037 42,966 Suspensive sale debtors Low 145,950 155,686 Receivables from exchange transactions 6 190,987 198,652

The collectively of these receivables at considered to be low:-- most of the debtors are indigent;- downturn in the economy;

- difficulty in estimating the monthly payments of the indigent debtors and those debtors that applied for EEDBS;

Aging of receivables from exchange transactions- Due not later than 1 year 31,047 47,505 - Due later than 1year and not later than 3 years 76,999 91,268 - Due later than 3 years 82,941 59,879

190,987 198,652

20.3 Interest Rate Risk

The Fund’s interest rate risk arises from suspensive sale debtors. credit issued at variable rates exposes the Fund to cash flow interest rate risk.

Credit issued at fixed rates expose the Fund to fair value interest rate risk.

Less than 1 year Between 1 and 2 years Total

R’000 R’000 R’0002015Trade and other payables 17,325 - 17,325

2014Trade and other payables 22,455 - 22,455




20.4 Liquidity Risk

Liquidity risk is the risk that the Fund will not be able to meet its financial obligations as they fall due. The Fund’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Fund’s reputation.

The table below analyses the fund’s financial liabilities into relevant maturity groupings based on the remaining period at the financial year and to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within twelve months equal their carrying balances as the impact of discounting is not significant.

Less than 1 year Between 1 and 2 years Total

R’000 R’000 R’0002015Trade and other payables 17,325 - 17,325

2014Trade and other payables 22,455 - 22,455

21 Going Concern

The annual financial statements are prepared on the basis that the Fund will remain a going concern for the foreseeable future, although a national decision was made to de-establish the Provincial Housing Funds, however the legislative changes to the National Housing Act, 1997 (Act no.107 of 1997) have not yet been enacted to allow for the de-establishment of the Fund.

The Fund aims to finalise the sensitization of the properties meaning to transfer, delete and devolve the properties and phasing out of the debtor book by promoting ownership by March 2017, at which stage, sub-jected to the expected amendments to the housing legislation, the Fund will be closed and the remaining assets of the Fund will be transferred to the books of the Department or devolved to municipalities/local authorities.

Furthermore there are no factors that are contrary to our evaluation. There is no intention for the Fund to be liquidated or cease operations.

There is no significant doubt that the Fund will continue to exist at this stage. The Statement of Financial Position and the property portfolio of the fund continues to reflect a positive net asset current ratio.




22 Budget vs Actual

22.1 Comparison of Budget to Actuals

Economic classification

2014/15 2013/14 Final

Appropria-tion

Actual Expendi-

ture Variance

Expenditure as % of final

appropriation

Final Appropriation

Actual Expendi-

ture

R’000 R’000 R’000 % R’000 R’000 Current 57,814 95,357 -37,543 4 72,760 80,446 Compensation of employees

45,183 42,501 2,682 0.0% 43,543 41,770

Goods and services 12,631 52,856 (40,225) 418.5% 29,217 38,676

Interest and rent on land - -

Transfers & subsidies 86,377 56,657 29,720 150.6% 95,166 90,837 Provinces & municipalities

65,381 36,872 28,509 56.4% 79,730 75,396

Households 20,996 19,785 1,211 94.2% 15,436 15,441

Gifts and donations - - -

Payment for financial assets

- 21 (21) 0.0% 35 35

Financial transactions in assets and liabilities

- 21 (21) 35 35

Total 144,191 152,035 (7,844) -5.4% 167,961 171,318

22.2 Explanation of Variance

Current expenditure

Explanation of variance: Goods and services - Over expenditure is to due to increase in maintenance costs of housing properties and payment for services. The budget for maintenance was decreased and rectification increased, but the rectification was slow to take-off.

Transfers and subsidies

Explanation of variance: Provinces and municipalities - under expenditure is due to the fact that funds were not transferred to eThekwini Municipality for rectification projects. The reason being is that the rectification was slow to take-off and eThekwini delayed in providing the reconciliation of the account and percentage of completion certificates.


ANNUAL REPORT


ANNUAL REPORT


Head Office Old Mutual Building203 Church StreetPietermaritzburg3201

Private Bag X9157Pietermaritzburg3201

TELEPHONE NUMBER/S: 033 392 6400FAX NUMBER: 033 392 6454EMAIL ADDRESS: [email protected] ADDRESS: www.kzndhs.gov.za

Samora House 2 Samora Machel StreetDurban 4000

031– 336 5300

Inland Region:199 Pietermaritz StreetPietermaritzburg3201

033 – 845 2000

Coastal Region:Redefine Towers320 Dr Pixley KaSeme StreetDurban4000

031–319 3600

Northern Region:Legislative Administration BuildingKing Dinuzulu HighwayUlundi3838

035–874 2697

PR321/2015 ISBN: 978-0-621-44042-3

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annual report - provincial government · 2016-04-26 · annual report for 2014/15 financial year...

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