quarterly report 2021 22 - shra.org.za

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QUARTERLY REPORT 2021_22

QUARTER 1 FY 2021/22

APRIL – JUNE

Prepared by:

Strategy, Research and Policy (SRP)

QUARTERLY REPORT 2021_22 – QUARTER 1 FY 2021/22

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Table of Contents

Table of Contents ...................................................................................................................................... i

List of Figures ........................................................................................................................................... ii

List of Tables ............................................................................................................................................ ii

List of Abbreviations .................................................................................................................................iii

1. Executive Summary .......................................................................................................................... 1

1.1 Performance overview ...................................................................................................................... 3

1.1.1 Overview of Financial and Non-Financial Performance of the SHRA ............................................ 4

1.1.2 Achievement to date 2019-2024 ...................................................................................................... 5

2. QUARTER PERFORMANCE PER PROGRAMME ................................................................................... 6

2.1 Programme 1: Administration ........................................................................................................... 6

2.1.1. Office of the CEO highlights for the quarter ............................................................................. 12

a) Strategy, Research and Policy ......................................................................................... 12

b) Marketing and Communications ...................................................................................... 13

c) Governance report .......................................................................................................... 14

2.1.2. Corporate Services highlights for the quarter .............................................................................. 16

a) Human Resources ........................................................................................................... 16

b) Legal services ................................................................................................................. 17

c) Finance ........................................................................................................................... 20

d) Supply Chain Management .............................................................................................. 28

e) Information Technology .................................................................................................. 28

f) Risk management ........................................................................................................... 30

2.2 Programme 2: Compliance Accreditation & Regulation ................................................................ 31

a) Overview of Accredited SHI’s .......................................................................................... 37

b) Compliance Monitoring ................................................................................................... 38

c) Regulations .................................................................................................................... 43

d) Financial Performance ..................................................................................................... 46

2.3 Programme 3: Sector Development and Transformation .............................................................. 47

a) Social Housing Incubation Project ............................................................................................... 52

b) Progress on SHI interventions and support given to Institutions .................................................. 52

c) Progress on project interventions ............................................................................................... 53

d) Provincial support ....................................................................................................................... 54

e) Municipal support ....................................................................................................................... 54

f) SD&T financial performance ........................................................................................................ 55

g) Property Sector Charter Council .................................................................................................. 55

2.4 Programme 4: Project Development and Funding ........................................................................ 56


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2.4.1 Programme performance per APP deliverables ........................................................................ 56

2.4.2 Programme 4 Highlights of the quarter ....................................................................................... 60

a) Projects with challenges.................................................................................................. 62

b) Contract management .................................................................................................... 68

c) Provincial engagements .................................................................................................. 68

d) PDF Project Status .......................................................................................................... 71

Annexure A_ Performance Tables ........................................................................................................... 72

Annexure B_ Management Accounts ...................................................................................................... 72

Annexure C_ Compliance Matrix ............................................................................................................. 72

Annexure D_ Statement of Compliance ................................................................................................... 72

Annexure E_ Strategic Risk Register ........................................................................................................ 72

Annexure F_ Payment of Suppliers .......................................................................................................... 72

Annexure G_ Detailed project report ....................................................................................................... 72

Annexure H_PDF Dashboard ................................................................................................................... 72

List of Figures

Figure 1: Performance overview Q1, 2021/22 ............................................................................................... 3

Figure 2: Achievement to date 2019-2024 ................................................................................................... 5

Figure 3: Number of units completed 2019-2024 ......................................................................................... 5

Figure 4: Procurement spend 2021/22 ...................................................................................................... 28

Figure 5: Accredited SHIs per Province .................................................................................................... 37

List of Tables

Table 1: Summary of budget vs actual FY 2021/22 ........................................................................................ 4

Table 2: Financial and nonfinancial Performance ........................................................................................ 4

Table 3: Contracts managed by SRP during Quarter 1 2021/22 ....................................................................... 13

Table 4: social media following ................................................................................................................ 13

Table 5: contracts managed during the quarter ....................................................................................... 14

Table 6: Council Committee and Composition .......................................................................................... 15

Table 7: Overview of meetings held during the quarter under review ....................................................... 15

Table 8: Staff appointments resignations and progressions for the period under review ............................... 16

Table 9: Vacancy rate .............................................................................................................................. 16

Table 10: Legal fees as at 30 June 2021 ..................................................................................................... 20

Table 11: Movement in interest capitalisation account .............................................................................. 21

Table 12: Disbursement made during the quarter ..................................................................................... 21

Table 13: Summary of budget vs actual expenditure ................................................................................... 22

Table 14: Interest received....................................................................................................................... 22

Table 15: Major cost drivers in ADMINISTRATION operating expenses .......................................................... 23

Table 16: Payroll split per programme ...................................................................................................... 24

Table 17: SD&T operating expenses ........................................................................................................... 25

Table 18: institutional investment grant disbursement ............................................................................... 26


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Table 19: CAR operating expenses ............................................................................................................. 26

Table 20: Capex commitment .................................................................................................................. 27

Table 21: Social Housing Projects that served at TEC for Accreditation ......................................................... 38

Table 22: Performance Against Benchmarks .............................................................................................. 39

Table 23: CAR interventions on vacancy rate .............................................................................................. 40

Table 24: Section 12 interventions ............................................................................................................. 42

Table 25: List of participants in the incubation project .............................................................................. 52

Table 26: Progress on social housing institution interventions .................................................................. 52

Table 27: Progress on project interventions ............................................................................................. 53

Table 28: Municipal Support Project Selected Municipalities .................................................................... 54

Table 29: Support to other Municipalities ................................................................................................ 55

Table 30: Support given to other municipalities ....................................................................................... 55

Table 31: Projects with challenges ............................................................................................................ 62

Table 32: Provincial engagements ............................................................................................................ 68

List of Abbreviations

APP Annual Performance Plan

AFS Annual Financial Statements

CAR Compliance Accreditation and Regulations

CCG Consolidated Capital Grant

CEO Chief Executive Officer

CoJ City of Johannesburg

CP Conditions Precedent

CoGTA Cooperative Governance and Traditional Affairs

CPI Consumer Price Index

CRU Community Residential Units Programme

DSCR Debt Service Coverage Ratio

EC Eastern Cape

ENE Estimate of National Expenditure

EXCO Executive Committee

FC Financial Closure

FS Free State

GP Gauteng Province

HA Housing Association

HDA Housing Development Agency

HSDG Human Settlement Development Grant

ICT Information Communication Technology

IS Institutional Subsidy

IIG Institutional Investment Grant

JHC Johannesburg Housing Company

JIBAR Johannesburg Interbank Agreed Rate

JOSHCO Johannesburg Social Housing Company

KZN KwaZulu-Natal

LP Limpopo Province

MINMEC Minister and Members of Executive Council

MOE Municipal Owned Entities

MP Mpumalanga Province


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MOU’s Memorandum of Understanding

MTSF Medium Term Strategic Framework

NASHO National Association of Social Housing Organisation

NC Northern Cape

NDoHS National Department of Human Settlement

NHBRC National Home Builders’ Registration Council

NHFC National Housing Finance Corporation

NPC Non-Profit Company

NPO Non-Profit Organisation

NRHTT National Rental Housing Task Team

NW North West

ODA Other Delivery Agent

PDF Project Development and Funding

PPE Personal Protective Equipment

PDHS Provincial Department of Human Settlement

PFMA Public Finance Management Act (Act No. 29 of 1999)

PID Project Initiation Document

PIS Provincial Institutional Subsidy

PSC Provincial Steering Committee

pupm per unit per month

RCG Restructuring Capital Grant

RoNA Return on net assets

RZ Restructuring Zone

ToR Terms of Reference

SALGA South African Local Government Association

SDF Spatial Development Framework

SDT Sector Development and Transformation

SHI Social Housing Institution

SHIP Social Housing Investment Programme

SHORP Social Housing Regulatory Plan

SHP Social Housing Programme

SHSDP Social Housing Sector Development Plan

SHRA Social Housing Regulatory Authority

SRP Strategy Research and Policy

VAT Value Added Tax

WC Western Cape

QUARTERLY REPORT 2021_22 – QUARTER 1: APRIL-JUNE (FY 2021/22)

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1. Executive Summary

The SHRA is entrusted with an important responsibility of creating an enabling social housing

environment and dignity of South Africans as encapsulated in the theme “creation of liveable

neighbourhoods”. The constitutional mandate for the Entity is to redress spatial inequities entrenched

by apartheid, by providing low and middle-income households with good quality and affordable rental

housing opportunities in well-located areas of cities. SHRA needs to substantially increase the baseline of

13 968 social housing units delivered in the previous term (2014-2019). The target set by the 2019-2024

Medium Term Strategic Framework (MTSF) is for 30 000 social housing units delivered in strategically

located areas. The target set for 2021/22 financial year is 3 500 units completed and the target for quarter

one is 500 units completed.

The implementation of the Residential Rent Relief Fund has been a highlight for the quarter. Stakeholder

engagements were held with the National Association of Social Housing Organisations (NASHO), SHIs,

ODAs, staff as well civil society organisation such as Ndifunukwazi. Awareness Posters were distributed

to all SHIs and ODAs with stock under regulations and we foresee that application will start coming in

from the 7th of July 2021. A major focus in the Marketing and Communications unit was sharing content

on developments in the SHRA including the BNG episode that aired on SABC two, sharing the new CAR

Operational Framework and planning the Social Housing Indaba which will take place in August in

partnership with the Development Bank of Southern Africa (DBSA).

The Social Housing Programme has been impacted by COVID 19 since 2020/21 financial year and the 1st

quarter of the current financial year. During the first quarter of 2021/22 FY, the country moved to level 4

towards the end of June which brought stress to the people of South Africa as the country experienced

unrest in parts of KZN and Gauteng, and it has resulted in many losing their jobs as malls and factories

were burn down due to unrest in KZN and Gauteng. For each of the players in the sector, the economic

impact is different. Some tenants will not be able to pay rent and what will happen with reduced working

hours and salaries for some, and the loss of income and/or employment for others. Grant recipients who

rely heavily on regular income from the rental of their projects allowing them to determine their annual

liquidity plan, financing or debt refinancing, are now exposed to uncertainty and are having to question

how best to manage a large-scale loss of rental income in the event of economic difficulties experienced

by their tenants or the inability to attract tenants for the reasons highlighted.

During this quarter, the Sector Development and Transformation (SD&T) unit focused on providing

support to 23 grant recipients in the form of project feasibility grants, general capacity grants and staff

gear-up. Support has also been extended to municipalities outside the municipal support programme

where Sol Plaatjie, Madibeng, Msunduzi, Buffalo City Municipalities received project feasibility and

general capacitation grants respectively where work will be implemented in Q2. The APP target requires

that more than 85% of IIG recipients must be majority black owned or controlled. The eligible IIG recipient

list at the end of the third quarter provided for 30 institutions with 19 out of 23 (91%) of these majority

black owned or controlled, although valid certificates for only 19 (82.6%) was obtained, 28.5% were from

the designated group and 33% is from incubation programme that are women or youth owned or

controlled.

The CAR programme has eight (8) APP targets that are set for the financial year, with four (4) of the APP

targets allocated to the first quarter. Three (3) of the four (4) targets were achieved, implying a 75%

performance against predetermined objectives. The compliance of reporting institutions is measured


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against the SHRA benchmarks and it is evident that lower rental collection rates, as a result of the

pandemic still affect the performance of the institutions. Improvement on operating costs ensured that

the target of 54% of the institutions meeting 3 or more of the primary benchmarks could be achieved

(54,5%). Implementation of the Residential Rent Relief Programme was also initiated during this quarter

and it is expected that once funding is disbursed to institutions, this will to some extent assist, while

stronger regulation and support in cases with merit will also improve performance.

During the first quarter three (3) projects in two (2) Provinces were accredited, potentially delivering 800

social housing units. These projects were submitted by two (2) Other Delivery Agents (ODAs). 1,845

subsidised housing units' tenancy audits in seven (7) projects were conducted in the first quarter which

represents a positive variance of 1,020 units against the APP target of 825 units. Tenant satisfaction

surveys and safety and security audits will be conducted to reach the APP annual targets.

There are ninety-nine (99) accredited institutions of which eight (8) are fully accredited with ninety-one

(91) conditionally accredited. The eight (8) fully accredited institutions and twenty (20) of the

conditionally accredited institutions have projects under management and are reporting on a quarterly

basis on the performance of their projects. The renewal of the conditional accredited status of forty-

eight (48) institutions must be considered in 2nd quarter of the 2021/22 financial year.

There has been 81% procurement spend to majority black-owned service providers (>50% black), and 39%

procurement spend on designated groups. As at the end of the quarter the vacancy rate, excluding the

temporary staff members, stands at 24,53% translating into 13 vacant positions.

Key: Target Met Target Partially Met Target Not Met


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1.1 Performance overview

SHRA had 22 planned for the period under review, thirteen (13) were achieved and nine (9) were not achieved. Programme 1 achieved five (5) out of eight

(8) planned targets, Programme 2 achieved three (3) out of four (4) planned targets, Programme 3 achieved two (2) out of three (3) planned targets and

Programme 4 achieved three (3) out of seven (7) planned targets, this translates to a performance achievement of 59% for the quarter.

Figure 1: Performance overview Q1, 2021/22

8

4

3

7

5

3

2

33

1 1

4

Programme 1 Programme 2 Programme 3 Programme 4

2021/22 Quarter 1 Performance by Programmes

Planned Achieved Not achieved

59%27%

14%

2021/22 Projected Annual Performance

Achieved

Partially achieved

Not achieved


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1.1.1 Overview of Financial and Non-Financial Performance of the SHRA

Table 1: Summary of budget vs actual FY 2021/22

Programme

Bu

dg

et

for

the

year

Actual

Act

ual

reve

nu

e

Var

ian

ce

Act

ual

Ex

pe

nd

itu

re

for

the

ye

ar t

o

dat

e

Act

ual

ex

pe

nd

itu

re

(Ove

rsp

en

d)/

Un

spe

nt

Bu

dg

et

for

the

year

An

nu

al

ex

pe

nd

itu

re

vari

ance

Revenue

for the period

Administration – Operations 60 848 000 30 424 000 50% 13 649 238 22.43% 47 198 762 77.57%

CAR– Operations 9 400 000 4 700 000 50% 3 256 474 34.64% 6 143 526 65.36%

SD & T – IIG 22 725 000 0 100% 1 756 994 7.73% 20 968 006 92.27%

PD&F – CCG 764 646 000 0 100% 110 567 638 14.46% 654 078 362 85.54%

Total 857 619 000 35 124 000 129 230 344 728 388 656

Table 2: Financial and nonfinancial Performance

Programme

Financial Performance Year to Date Non-Financial Performance Quarter under

Review

Actual Expenditure

Budget Variance % Spent Planned Targets

Achieved Targets

Variance / Targets

not achieved

% Achieved

Programme 1

Administration 13 649 238 60 848 000 -47 198 762 22.43% 8 5 3 63%

Programme 2

Compliance, Accreditation & Regulation

3 256 474 9 400 000 -6 143 526 35% 4 3 1 75%

Programme 3

Sector Development & Transformation 1 756 994 22 725 000 -20 968 006 7.73% 3 2 1 67%

Programme 4

Project Development & Funding 110 567 638 764 646 000 -654 078 362 14.46% 7 3 4 43%

Total 129 230 344 857 619 000 -728 388 656 15.70% 22 13 9 59%


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1.1.2 Achievement to date 2019-2024

Figure 2: Achievement to date 2019-2024

Figure 3: Number of units completed 2019-2024

In quarter one, SHRA completed 643 units. Thus, a total 5 509 units out of 30 000 units (18%) of the

MTSF target for 2019-2024 has been achieved to date.

Year 2 of the MTSF 2019-2021 to Q1 2021/22, 5509

Yet to be completed, -24491

MTSF Target , 30000

No. of units completed

Year 2 of the MTSF 2019-2021 to Q12021/22

Yet to be completed

MTSF Target

30000

3010 1856 643

24491

0

5000

10000

15000

20000

25000

30000

35000

MTSF Target 2019/20 2020/21 2021/22 (Q1) Yet to be completed

MTSF Target 2019/20 2020/21 2021/22 (Q1) Yet to be completed


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2. QUARTER PERFORMANCE PER PROGRAMME

2.1 Programme 1: Administration

The purpose of the programme is to provide coordinated strategic and administrative support

services to enable the SHRA to deliver on its mandates.

This programme consists of two sub-programmes: Office of the CEO and Corporate Services

The programme’s functions are organised into the following subprogrammes:

Office of the CEO: provides strategic leadership and management of the entity and sector. This

sub-programme consists of the following functions:

• Strategic Planning

• Performance Information, Monitoring and Evaluation

• Policy

• Research

• Public Relations

• Stakeholder Management

• Marketing and Communication

Corporate Services: supports the activities and enhance the performance of the entity. This sub-

programme consists of the following functions:

• Finance

• Supply Chain

• Legal

• Corporate Governance

• Risk Management

• Human Resource Management

• Information Technology and Information Management


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2.1.1 Programme performance per APP deliverables

No. Output Indicator Annual Target

(2021/22)

Q1

Quarterly Variance and Comments Target Actual

Outcome 1: Functional, efficient and integrated government

1.1. External audit

outcome

Unqualified audit

opinion with no

material findings

No target

Not applicable

1.1.1 Percentage

implementation of the

approved Internal

Audit Plan

100%

implementation

of the approved

Internal Audit

Plan

25% implementation of

the approved Internal

Audit Plan

100% implementation of the

approved Internal Audit Plan

Positive variance of 75%, this is due

consequence management effort and

commitment to the indicator performance

and SHRA will continue with same efforts

in the next three quarters

1.2.1 Percentage

compliance with

statutory tabling and

prescripts

100% compliance

with statutory

tabling and

prescripts

100% compliance with

Statutory tabling and

prescripts

100% compliance with Statutory

tabling and prescripts

No variance

1.3.1 Percentage adherence

to the Anti-Fraud and

Corruption Policy

100% adherence

to the Anti-Fraud

and Corruption

Policy

100% adherence to the

Anti-Fraud and

Corruption Policy

100% adherence to the Anti-Fraud

and Corruption Policy

No variance

1.4.1 Percentage


approved Risk

Management Plan

100%

implementation

of the approved

Risk Management

Plan


the approved Risk

Management Plan

0% implementation of the approved

Risk Management Plan

Negative variance of 10%, this is due to

management not having calculated the risk

management plan, this however will be

rectified in the next three quarters.

1.5.1 Percentage


annual stakeholder

management plan

80%

implementation

of the annual

stakeholder

management plan


the annual stakeholder

management plan

71% implementation of the annual

stakeholder management plan

There is a negative variance of 9% as the

Webinar (Social Housing Funding Indaba)

was moved to August in line with Woman’s

month. Further, media did not accept

invitation for the project visits that took


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(2021/22)

Q1



place in June. The two items will be

conducted in the 2nd quarter.

1.6.1 Affordable rental

housing policy position

developed

Affordable rental

housing policy

position

developed

Draft Affordable Rental

Policy position

developed

Draft Affordable Rental policy

position developed and provided to

the Project Steering Committee

(PSC) in April 2021 and provided for

Management’s consideration within

the quarter.

No variance

Outcome 6: A transformed Social Housing Sector value chain

6.1.1 Percentage

procurement spend to

majority black-owned

or controlled service

providers

75% procurement

spend to majority

black-owned or

controlled service

providers

75% procurement spend

to majority black-

owned service

providers (>50% black)

81% procurement spend to majority

black-owned service providers (>50%

black)

Positive variance of 6%, this is due to the

appointed service providers were mostly

level 1 and 2 as required and going forward

SHRA will continue with efforts to appoint

service providers that are black-owned.

6.1.2 Percentage

procurement spend on

designated groups

40% procurement

spend on

designated

groups

40% procurement

spend on designated

groups

39% procurement spend on

designated groups

Negative variance of 1%, this due to

appointed service providers were mostly

level 1 and 2 as required, not all of them

had the ownership of the designated

groups and going forward, SHRA would

target service providers of designated

groups.


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Operational Plan Targets


(2021/22)

Q1



1.7.1. Percentage


approved

100% No target

Not applicable

1.8.1. Timeline for publishing

the Annual State of the

Social Housing Sector

Report (SOSHSR) of the

previous financial year

2020/21 State of the

Social Housing

Sector Report

published in Quarter

4

No target

Not applicable

1.9.1. Comprehensive database

on social housing

projects and SHIs

developed and

maintained

Database developed

and maintained

EXCO approved

implement action

framework

Implementation framework yet

to be approved by EXCO.

Further work is required with NDoHS and

HDA in terms of an overall Human

Settlements reporting dashboard.

1.10.1. Percentage achievement

of the milestones of the

annually approved HR

Plan

80% 80%

1.11.1. Average turnaround time

for recruitment

3 months average

turnaround time for

recruitment

3 Months


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(2021/22)

Q1



1.12.1. Percentage


ICT Strategy

Implementation

Roadmap

100% achievement of

the annual

milestones

25%

10% Achieved. The MSP service provider was only

appointed June 2021. The variance will be

covered in next quarter.

1.13.1. Average turnaround time

for the provision of legal

and contract support

services

80% achievement of

set turnaround times

as per SOP/SLA

Approved SOP/SLA

by June 2021

SOP/SLA not approved. The SOP/SLA has not been submitted to

EXCO for approval.

1.13.2. Percentage legal

opinions provided

(Include relevant and

applicable case law and

applicable legislation

100% of legal

opinions provided

(Refer to applicable

legislation and case

law)

Resourcing and

capacitation plan

submitted to EXCO

Resource capacitation plan

submitted but not approved

Resource and capacitation plan submitted

but not yet approved as further

enhancements are required.

1.13.3 Percentage of success in

case/litigation

management

100% of litigious

cases are managed

successfully with

timeous

appointment and

briefing of attorneys

Managing the

litigious matters

from the initiating

process to the end

33.33% successful cases as at the

end of the first quarter.

The SHRA HAS been successful in 3 out of 9

legal matters as at the first quarter 2020/21

1.14.1 Percentage operational

budget variance

10% operational

budget variance

No target

Not applicable


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(2021/22)

Q1



1.15.1 Achievement of

turnaround times for

procurement:

- RFQs/RFPs

RFBs (procurement plan)

RFQs – 100%

achievement of

RFQs/RFPs as per

AOP

RFBs – 100%

achievement of

procurement plan

RFQ/RFPs – 100%

RFBs – 30%

100% RFQ/RFPs There was no RFB initiated in the first

quarter and therefore, nothing to measure.

All the RFQs/ RFPs were concluded within

the required timeframes with no extension

of validity required.

1.15.2 Percentage of service

providers paid within 30

days of valid invoice

100% of service

providers paid within

30 days of valid

invoice

100% of service

providers paid

within 30 days of

valid invoice

1.16.1 Average turnaround time

for communicating Exco

and Board resolutions

7 Days after the

meeting

7 Days after the

meeting

Q1: 7 days turn around after the

meeting

No variance

1.16.2 Percentage


annual workplan of

Council and Council

Committees

100% implementation

of the annual

workplan of Council

and Council

Committees

No target

No applicable

Outcome6: A transformed social housing sector value chain

6.2.1 Percentage

implementation of a

supplier development

programme

100% implementation

of a supplier

development

programme

No target

Not applicable


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2.1.1. Office of the CEO highlights for the quarter

a) Strategy, Research and Policy

Rent Relief Fund

The SHRA in conjunction with the of the National Department of Human Settlements, and NHFC

has prepared itself for successful implementation. Further consultation with civil society, training

the sector and refinement of policy parameters and dealing with exceptions given the nature of

fund was actioned.

Following the Minister’s budget speech 2021/22, information pertaining the application processes

and criteria have been communicated and training on the application process and requirements

undertaken with the sector. A dedicated mailbox ([email protected]) has been functional and

active.

Affordable Rental Strategy and Policy

As per the 2021/22 APP target for the first quarter, the SHRA has made significant strides towards

crafting a strategy and comprehensive rental strategy looking at various sub-sectors of the rental

housing market.

A draft Affordable Rental Strategy and policy position a has been developed, canvassed with key

stakeholders and provided to management for its consideration and input. It is envisaged that

further engagements and consultations are to occur before

Research Plan

The research plan has been tabled in Exco during the second quarter of 2021/22 financial year. The large proportion of the plan included items that had not been concluded in the previous year and resulting from the findings of the 2019/20 State of the Sector report.

Annual Report 2020/21

SRP has drafted the 2020/21 annual report and has since been audited by the SHRA internal

auditors. The External audit has resumed in mid-June 2021 and it is anticipated to be completed on

31 July 2021. The appointment of service provider to do design, proofread, layout and printing of

the 2020/21 is underway.

Evaluation Preparation for the 2022/23 financial year

Monitoring and Evaluation function within the SRP have drafted the concept document for Social

Housing impact to be considered in the National Evaluation Plan (NEP) with the Department of

Planning Monitoring and Evaluation (DPME) for the year 2022/23. The SHRA is awaiting feedback

for consultative sessions with DPME and the NDoHS for evaluations proposed for 2022/23.

SRP contracts Managed during the quarter

Included in the following table are all active contracts and associated expenditure (excluding

disbursements) incurred within the quarter under review.

mailto:[email protected]


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• SRP contracts Managed during the quarter

Included in the following table are all active contracts and associated expenditure (excluding

disbursements) incurred within the quarter under review.

Table 3: Contracts managed by SRP during Quarter 1 2021/22

No

Details of goods / services

Name of

service

provider

awarded

contract

Contract

Value*

Payment in Q1

2021/22

Outstanding

Amount-

commitment

at quarter end

1

Development of an

Affordable Rental Strategy

and Policy

Insite

Settlements

Network CC

R 3 260 152 R352 947 R623 101

2

Five-year strategic plan

(2020-2025) and an annual

performance plan (3-year

contract)

Vortex Training

Systems cc R 2 289 305 - R614 855

3 State of the Sector Report

2019/20

Black Icon

Designs R 226 720 R 226 720 R 0

Total R 5 776 177 R579 667 R1 237 956

b) Marketing and Communications

Online communication platform Social media following increased as per below table as end of May 2021.

Table 4: social media following

Platform Q4 2020/21 Q1 2021/22

Facebook 4455 5876

Twitter 1476 1840

Linked In 714 773

You Tube 62 70

Instagram 54 130

Website

The website has been consistently stable through the quarter. Content updates are in relation to RRRP information. In quarter two, the process of revamping the SHRA website will be initiated. Online news flash (In the News)

Communication was forwarded to stakeholders through the SHRA stakeholder database on various matters related to the SHRA State of the Sector Report and promoting the BNG episode which flighted on SABC 2.


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Media coverage Press releases were issued to the media parallel to the news flashes as mentioned above.As per the media analyses below they have assisted in increasing media coverage about the SHRA, which is proactively led by the SHRA. Contract management Table 5: contracts managed during the quarter

Details of goods/

services

Name of service provider

Value of contract Payment in Q1

2021/2022 Outstanding payment

500 SHRA Branded Posters

Kevin Supply and Projects

R22 500.00 R22 500 R0.00

NDoHS Youth Build Sponsorship 2021

Tswello Construction and Projects

R49 00.00 R49 00.00 R0.00

Total

R71 500.00 R71 500.00 R0.00

c) Governance report

• Legal Compliance

The Exclaim Legislative Compliance Universe is a software used to assess the level of legislative

compliance within the SHRA. The tool contains 16 pieces of legislation that the SHRA is required to

comply to. Of the 16 pieces of legislation, 5 was assessed during the next quarter. In terms of the

assessment the SHRA complies 100% with the following pieces of legislation: -

- Basic Conditions of Employment Act 75 of 1997

- Employment Equity Act 55 of 1998

- Housing Act 107 of 1997

- Preferential Procurement Policy Framework Act 5 of 2000

- Promotion of Access to Information Act 2 of 2000

- Promotion of Administrative Justice Act 3 of 2000

- Rental Housing Act 50 of 1999

- Social Housing Act 16 of 2008

- Broad Based Black Economic Empowerment Act, No. 53 of 2003 and Code

- Public Audit Act, No. 25 of 2004

- Public Finance Management Act, No. 1 of 1999 - Public Entities Schedule

- Occupational Health and Safety Act, No. 85 of 1993

- Labour Relations Act, No. 66 of 1995

• Quarterly Compliance Matrix from NDoHS

As part of the quarterly reporting, the SHRA Council reports on its compliance with governance

prescripts contained in King IV as well as on the PFMA. This part of compliance reporting is

reviewed by internal audit to provide some assurance on the level of compliance reported. The

compliance matrix, as well as the statement of compliance are attached to the report as annexures

C and D.


Page | 15

Council and Committee Composition

KEY: C CHAIRPERSON M MEMBER DC DEPUTY CHAIRPERSON

Table 6: Council Committee and Composition

NAME COUNCIL NEM/EM CAR PDF HRRC ARC SEC

Ms BO Dlamini C NEM - - M - M

Ms B Nzo DC NEM - M M M -

Mr P Ximiya M NEM M C - M

Mr O Mabena M NEM M - M - M

Ms Z Hill M NEM C M M

Mr T Sukazi M NEM C - - M M

Mr D Duma M NEM - M M M -

Ms R Matenche M NEM M - - M C

Mr R Gallocher M EM - - - - -

Ms A Puoane M EM M - - - -

*Interim Council was appointed by the Minister with effect from Monday, 28th October 2019.

Table 7: Overview of meetings held during the quarter under review

DESCRIPTION NUMBER OF MEETINGS

Council

Ordinary 1 - (30th April 2021)

Special -

Workshop 1 (24th June 2021)

Compliance Accreditation and Regulations

Ordinary 1 (20th April 2021)

Special 1 (25th May 2021)

Project Development and Funding

Ordinary 1 (19 April 2021)

Special 1 (24th June 2021)

Human Resources and Remuneration Committee

Ordinary 1 (20th April 2021)

Special -

Audit and Risk Committee

Ordinary 1 (21st April 2021)

Special 1 (25th June 2021)

Social and Ethics Committee

Ordinary 1 (21st April 2021)

Special -


Page | 16

2.1.2. Corporate Services highlights for the quarter

a) Human Resources

The table below indicates the staff movement during the 1st quarter:

Table 8: Staff appointments resignations and progressions for the period under review

Month New appointments Terminations Progression

June 2021 4 0 0

There was 4 (four) new appointment during June 2021, which were the Company Secretary, Supply

Chain Officer, SRP Manager and the Pipeline Manager.

There was 1 (one) resignation during this period, which was the Project Accreditation Specialist.

Vacancy rate

As at the end of the quarter the vacancy rate, excluding the temporary staff members, stands at

24,53% translating into 13 vacant positions.

Table 9: Vacancy rate

Vacancy rate as at 30 June 2021

Approved complement Actual staff Number of vacancies Vacancy rate

53 40 13 24.53%

Employment Equity

From 1 April 2021 the SHRA has moved into a new employment equity (EE) target for the 2021/22

FY. The new overall EE target is 92,45%. Although the SHRA is below target for Coloured and Indian

race and below target for males, the overall target is met at an achievement of 92,68%.

Performance management

The following was the focus during quarter 1 in terms of performance management processes:

a) Performance reviews of the 2020/21 FY should be conducted.

b) Contracting of the balance scorecards for the 2021/22 FY to be concluded.

c) Personal development plans (PDPs) for 2021/22 FY are to be concluded.

Vortex has started on the draft scorecards for Executives and Management and has had individual

meetings with incumbents.

The contracting of scorecards will happen in conjunction with the rollout of the automised

performance management system. The system is ready and await the finalisation of the

scorecards. Training will be schedule to allow staff to create their scorecards during the training

session.

HR Policy Review There are 16 HR policies that need to reviewed during quarter 1, i.e.


Page | 17

- Access to Personnel Files Policy & Procedure - Acting Policy & Procedure - Coaching Policy and Procedure - Diversity Policy & Procedure - Employee Induction Policy & Procedure - Environmental Policy & Procedure - General Conditions of Service Policy & Procedure - Gift and Offering Policy & Procedure - Grievance Policy & Procedure - Harassment & Bullying Policy & Procedure - Occupational Health and Safety Policy & Procedure - Policy & Procedure Incapacity: Ill health, Illness and Disability - Policy & Procedure Incapacity: Poor Performance - Smoking Policy & Procedure - Termination Policy & Procedure - Working Hours Policy & Procedure

These policies served at Exco on 28 June 2021 for approval are distributed to staff for comments and will be submitted in the next Exco meeting for approval.

Job Profiling and Skills Audit A service provider was appointed to assist the SHRA with reviewing current job profiles and creating new profiles for the new roles identified on the organisational structure. The profiling for the Business Analyst and Regulations Manager has started and the rest will continue shortly. A service provider was appointed in April 2021 to assist the SHRA with a skills audit. The outcome of the skills audit will also be used as input to the personal development plans for 2021/22 FY. The time lines of the skills audit were moved out a bit to allow for the profiled to be reviewed first and the skills audit to be conducted on the new profiles.

b) Legal services

Legal services continued to provide legal advice on regulatory matters, in particular, on project accreditation and compliance issues. In the quarter under review the legal unit seeks to highlight the following matters where there were significant changes in the status of the matters

Freshco

During the quarter under review, an application for a declaratory order was made for the court to

declare all the appeals of FRESHCO moot. The application was granted in favour of the SHRA.

FRESHCO also made an application in court for the court to grant them access to ABSA account

which is currently accessible to the administrator. ABSA and the SHRA have opposed this

application and filed their answering affidavits. The legal unit is also providing legal support to the

administrator in the administration of FRESHCO. In this regard, the SHRA is proceeding with legal

action to have the CEO removed and to take criminal action against persons implicated in the

forensic investigation.

GOLDENWEST

During the quarter under review, an order was granted for Goldenwest to be placed under

business rescue. The SHRA team met with the business rescue practitioner to discuss the business


Page | 18

rescue plan and the requirements of the SHRA for the project to proceed. The business rescue

practitioner is preparing a business rescue plan which will be provided to the SHRA for input.

SALAMAX

The court order was granted in favour of the SHRA on 7 June 2021 for Nedbank to refund the money

held in the bank account of Salamax and for Salamax to refund the SHRA the monies owed with

interest.

Hlalanathi

The application made by Hlalanathi is set down by the SHRA for 29 July 2021 for the matter to be

struck off the roll. The SHRA is also finalising its application to have the monies disbursed to be

refunded to the SHRA as there has been breach of contract for failure to meet FC.

Risks and Lessons learnt

In the quarter under review, the PD&F unit with the support of the legal unit have actively taken

steps to mitigate the risks identified. This is highlighted in red for ease of reference.

Project Failure after CP, and in some cases FC, disbursements by SHRA:

In an effort to address project failure after CP the PDF unit with the support of the legal unit are

enforcing the step in right provided in the CCGA. In the notice of breaches which are sent to grant

recipients they are reminded that the SHRA has this right to step in and require the project to be

transferred to another SHI/ODA.

The PD&F unit with support of the legal unit is also entering into MoU’s with debt funders wherein

there will be more information sharing between the debt funders and the SHRA. This will assist the

SHRA to know at an earlier stage where debt funding agreements will not be concluded with grant

recipients.

Challenges with Projects developed by SHI established by Property Developers: Legal Unit has

observed wherein Developers (often, who already having land availability agreement with other

spheres of government to develop mega projects) establishes SHIs so that this SHI can get

Consolidated Capital Grants (CCG) to develop the social housing component of the said mega

project without the need to meet the equity requirement. Whilst this is not such a problem per se,

the issues and risks that arises here is that these Developers get their employees or Board

members to sit in the Board of Directors of the concerned SHIs and get the SHI to sign either Share

Capital Agreements and other forms of agreements that makes these Developers to have control

over the SHIs. These arrangements should be closely monitored and managed as they collapse

projects and entities. Examples of these are matters such as Salamax, Emalahleni, and Goldenwest.

The PD&F unit with the support of the legal unit has begun to mitigate this risk by meeting with

the grant recipients to discuss the ways in which the grant recipient is dealing with the risk.

Not performing independent verifications on the validity of the land rights on lease agreements

every time before making payments: This should be mitigated by verify continued validity of lease

agreements with the landowner before making payments. The SHRA legal unit is actively involved

in the review of CP and FC files prior to payments being made.


Page | 19

Putting projects funded through institutional subsidies under administration without a proper

turnaround plan with strict timelines and possible scenarios & outcomes. – lesson from the

Everest Court and Troyville Co-Ops Administration is that the SHRA should decide to put SHI under

administration with a solid turnaround plan with strict time lines to avoid having endless

administration and to avoid draining the SHRA’s financial and human resources. A further

consideration when placing SHI on administration, should also include making a separate

application to remove / suspend directors and/or executive/senior management in the SHI to avoid

what is happening with FRESCHO wherein they appealing for the sake of appealing and dragging

the whole process.

Lack of Policy clarity, co-ordination, and co-operation by various government organs on

institutional subsidy funded projects. There are persisting problems around tenants demanding

ownership, attempted hijacking of projects by individuals or Grant Recipients, and miss-treatment

of tenants in these sorts of projects etc. The issue is exacerbated by lack of Policy clarity form

National Department and failure of Provinces to intervene or assist the SHRA to resolve such issues

as they hardly file to join the proceedings even when we request them. Cases such as Vukuzakhe,

Harrison Reef, Highpoint, Emalahleni, Everest Court Co-Op and Troyville Co-op are examples of

these. The FRESCHO matter is also another case in point. We mitigating and attending to these by

engaging Provinces, Municipalities and National Department much more on this issue.

Corporative Model complicates social housing in that it deviates from “real” Institutional

Management of the Projects. This is because members of the co-ops are often not suitably

capacitated to run the co-ops on their own and as seen with Everest Court and Troyville co-

operatives. Further, Co-Ops Boards / Trustees find themselves unable to evict the non-paying

members due to the legal nature which makes members “collective owners of the property” as

well as the fact that Co-Operatives are outside of the Rental Housing Act and therefore, outside of

the Rental Housing Tribunal jurisdiction. The other problem is that, these Co-Ops don’t undertake

other projects to improve their revenue stream. These problems results with both Co-Ops having

Management, Revenue and Maintenance challenges.

DRAFTING AND VETTING AGREEMENTS

Consolidated Capital Grant Agreements

In the quarter under review, there were 4 CCG agreements drafted, 3 of which have been routed

to the province and grant recipients for signature. The PD&F unit has made a recommendation to

the legal unit that one agreement be pended and not signed. In light of this, the agreement has

not been signed.

Addenda

During the quarter under review, legal unit have drafted 9 addenda, 4 of the 9 addenda are

awaiting the corrected Council resolution before they can be routed for signature and 5 of the

addenda have been forwarded to the PD&F unit for signing by the province.

Notarial Deeds of Restriction


Page | 20

There are currently 90 RCG and CCG agreements concluded.

• there are 17 projects wherein notarial deeds are registered in favour of the SHRA.

• There are 4 notarial deeds signed by the SHRA and sent back to the GR for

registration, Legal is following-up with the GR.

• There are 7 projects in court and Notarial Deeds of Restraint put on hold.

• Debt funders have requested amendments to the SHRA standard notarial deed

template and the submissions were made and confirmed by EXCO and feedback

was given to GR to attend to the signing of the notarial deed.

• The SHRA is facilitating the registration of the notarial deed on 3 of the newly

approved projects.

• 44 Notarial Deeds have been sent out to the GR and follow ups are made every

second week.

• We are waiting for the contact person’s details on 3 projects i.e., Norvena, Indiza

and Annadale.

• Challenges are being experienced with municipalities not signing on time due to

reshuffles of staff and all the JOSHCO projects stalling because of issues with

getting attorneys from the City.

EXPENDITURE

Table 10: Legal fees as at 30 June 2021

Matter Service Provider Amount Date of payment

HR matters Tokiso R24 150.00 25 May 2021

Consultancy services to

the SHRA legal unit

Galananzhele Sebela Inc

attorneys

R395 255.00 25 May 2021

FRESHCO FISHA attorneys R77 043.80 25 May 2021

HR matters Cheadle Thompson and

Haysom Inc

R180 836.93 27 May 2021

HR matters Sizwe Ntsaluba Gobodo

Grant Thorton

R346 467.31 15 June 2021

Total R1 023 753.04

c) Finance

• Statement of Financial Position

Non-Current Assets

The balance for Property, Plant and Equipment is attributable to the office furniture, leasehold

improvements, computer equipment, and Intangible assets.

Current Assets

Receivables are represented by deposits for the leased premises and Telkom.

Cash and cash equivalents

Cash and cash equivalents reflected in the statement of financial position at the end of the period

were. R 1 052 553 000. The cash position remains positive due to the committed funds for the


Page | 21

programs that require capital investment subsidies in the ensuing financial year. Based on cash on

hand, the Entity does not foresee any challenges in honoring its short-term commitments.

Recalled Grant Funds (SHIP Projects)

Recalled Grant Funds (SHIP Projects) relate to amounts that were disbursed in prior years to

qualifying grant recipients using a SHI Imprest account in the control and name of the SHI. In an

effort to mitigate the risks associated with lack of control the use of SHI Imprest account was

abandoned in FY2015. An improved system where payments to grant recipients are aligned to

actual project expenditure has been implemented. The balance as at the end of the quarter ended

30 June 2021 is R 41 912 791.

Provision – interest earned capitalization

Following the conclusion of the FY2019/2020 audit, an exercise was performed to enable us to eliminate interest earned on Recalled Grant Funds. The interest is now held in a separate account, Provision – Interest earned capitalization, all interest disbursements are disbursed from this provision. A separate account is being used to hold all Consolidated Capital Grant funds that are received. This will enable us to track the interest earned, and available for disbursement. Movement in Interest Capitalisation Account

Table 11: Movement in interest capitalisation account

Opening balance Interest earned Interest expensed Closing balance

79 864 751 260 000 1099 354 79 025 397

Table 12: Disbursement made during the quarter

Institution Amount

First Metro Avoca 1099 354

Total 1099 354

Payables No accruals have been raised as at 30 June 2021.


Page | 22

• Statement of Financial Performance

The summary of Budget vs Actual Expenditure for the quarter ended 3o June 2021 under review is summarized below:

Table 13: Summary of budget vs actual expenditure

Programme

Bu

dg

et

for

the

ye

ar Actual

Act

ual

reve

nu

e

Var

ian

ce

Act

ual

Ex

pe

nd

itu

re

for

the

ye

ar t

o

dat

e

Act

ual

ex

pe

nd

itu

re

(Ove

rsp

en

d)/

Un

spe

nt

Bu

dg

et

for

the

ye

ar

An

nu

al

ex

pe

nd

itu

re

vari

ance

Revenue

for the period

Administration – Operations 60 848 000 30 424 000 50% 13 649 238 22.43% 47 198 762 77.57%

CAR– Operations 9 400 000 4 700 000 50% 3 256 474 34.64% 6 143 526 65.36%

SD & T – IIG 22 725 000 0 100% 1 756 994 7.73% 20 968 006 92.27%

PD&F – CCG 764 646 000 0 100% 110 567 638 14.46% 654 078 362 85.54%

Total 857 619 000 35 124 000 129 230 344 728 388 656

• Interest Received - The Entity earned R 8 267 257.92 interest for the year to date, from the following revenue sources: Table 14: Interest received

Operational Grant 187 618.03

Call Account – CCG 5 461 669.76

Recalled SHIP Imprest Accounts 2 617 970.13

8 267 257.92

Transferred to interest capitalisation 259 999.52

8 007 258.44

An amount of R 259 999.52 has been transferred to the interest capitalization account to be utilized for interest claims from qualifying SHI’s and ODA.


Page | 23

Operational Expenditure major cost drivers in ADMINISTRATION operating expenses

Table 15: Major cost drivers in ADMINISTRATION operating expenses

Economic classification

For quarter ended 30 June 2021 For the year ending 31 March 2022

Actual Budget Variance

Sta

tus


Sta

tus

Compensation of employees 8 937 744 11 001 000 -2 063 256 8 937 744 44 004 000 -35 066 256

Council Member's remuneration 263 294 455 000 -191 706 263 294 1 820 000 1 556 706

Advertising 83 945 150 000 -66 055 83 945 600 000 -1 556 706

Agency and support/outsourcing 254 328 - 254 328 254 328 0 254 328

Audit costs 169 720 306 931 137 211 169 720 1 227 725 -1 058 005

Bank charges 10 834 12 500 -1 666 10 834 50 000 -39 166

Catering internal activities 880 5 000 -4 120 880 50 000 -49 120

Communication 88 886 150 000 -61 114 88 886 1 200 000 -1 111 114

Computer services 144 769 201 000 -56 231 144 769 804 000 659 231

Consultants 452 057 206 632 245 425 452 057 826 526 -374 469

Contractors 82 135 300 000 -217 865 82 135 1 200 000 -1 117 865

Lease payments 1 123 498 994 000 129 498 1 123 753 3 976 000 -2 852 502

Legal fees 1 023 753 1 313 549 -289 796 1 023 753 4 082 549 -3 058 796

Non-life insurance 81 757 92 823 -11 066 81 757 371 292 -289 535

Printing, publications 40 636 92 062 -51 426 40 636 368 250 -327 614

Preservation fund 139 762 475 000 -335 238 139 762 1 900 000 -1 760 238

Repairs and maintenance 25 841 25 000 841 25 841 100 000 -741 159

Staff Training & Development 13 665 60 000 -46 335 13 665 240 000 -226 335

Travel and subsistence 234 994 150 000 84 994 234 994 600 000 -365 006

Water and electricity 225 297 216 000 9 297 225 297 864 000 -638 703

Venues and facilities/workshop 0 30 000 -30 000 0 120 000 -120 000

Cleaning costs 93 146 45 000 48 146 93 146 180 000 -86 854


Page | 24




Sta

tus


Sta

tus

Donations/sponsorship - 50 000 -50 000 0 500 000 -500 000

Motor vehicle expenses 25 664 11 700 13 964 25 664 46 800 -21 136

Stationery 9 548 10 000 -452 9 548 40 000 -30 452

Staff welfare 71 977 30 000 41 977 71 977 120 000 -48 023

Marketing 51 960 0 51 960 51 960 0 51 960

Courier services 1 055 900 155 1 055 3 600 -2 545

Other -1 908 0 -1 908 -1 908 0 -1 908

TOTAL 13 649 237 16 384 097 -2 734 860 13 649 237 65 294 742 -14 760 816

Total expenditure year to date is R 13 649 237 which is 22.43% of the annual allocation. Despite a concerted effort to reduce the operational budget to align with the budget allocation, this has proven to be impossible. At a minimum a deficit of R10 million is expected. Exco is therefore requested to consider approving the use of interest to subsidise the expected shortfall. Referring to the section reporting on interest received, it is noticeable that interest earned on OPEX for the quarter under review is R187,618.03, which is significantly lower to fund the deficit, management has to consider utilizing the balance carried forward from the previous year. Already the legal fees spend to date amounts to R1m against ab budget of R4m pa and there are litigious matters that may attract high costs in the future. Furthermore, taking into account that the SHRA might have the Manaphendlo land held by the HDA, this will attract a significant increase in preservation costs. The Compensation for employees’ cost is distributed as follows: Table 16: Payroll split per programme

April May June Total

CAR 712 153.02 894 050.32 736 883.90 2 343 087.24

SD&T 278 196.45 300 959.64 324 678.68 903 834.77

ADMIN 1 143 696.78 1 232 048.31 1 241 069.73 3 616 814.82

PD&F 424 223.83 464 882.30 497 796.67 1 386 902.80


Page | 25

April May June Total

2 558 270.08 2 891 940.57 2 800 428.98 8 250 639.63

Social contributions 218 735.00 231 721.00 272 635.00 723 091.00

Total 2 777 005.08 3 123 661.57 3 073 063.98 8 973 730.63

Major cost driver in SECTOR DEVELOPMENT AND TRANSFORMATION operating expenses Table 17: SD&T operating expenses




Sta

tus


Sta

tus

Consultants 261 413 0 -261 413 261 413 0 -261 413

Printing, publication and subscription 0 12 500 12 500 0 50 000 50 000

Research and development 0 500 000 500 000 0 2 000 000 463 496

Training and staff development 36 504 125 000 88 496 36 504 500 000 250 000

Travel and subsistence 0 62 500 62 500 0 250 000 250 000

Venues and facilities/workshop 0 25 000 25 000 0 100 000 100 000

Other 0 25 000 25 000 0 100 000 100 000

TOTAL 297 917 750 000 452 083 297 917 3 000 000 2 702 083


Page | 26

• Institutional Investment Grant Disbursements A total of R 1 459 077 has been disbursed as Institutional Investment Grants which is 7.40 % of the annual allocation. A further R 297 917 was expended

on operations, this results in overall expenditure of 7.73%

Table 18: institutional investment grant disbursement

Year to date –June 2021 Budget Variance Status

General capacitation Grant 1 298 321 10 425 000 9 126 679

Project Feasibility Grant 0 8 000 000 8 000 000

Pre-accreditation Grant 0 500 000 500 000

Remedial Grant 0 0 0

Staff Gear up Grant 160 755 800 000 639 245

TOTAL 1 459 077 19 725 000 18 265 923

Major cost drivers in COMPLIANCE, ACCREDITATION AND REGULATIONS A total of R 3 256 474 has been expensed for the CAR programme during the quarter ended 30 June 2021, which is 34.64% of the annual allocation. Table 19: CAR operating expenses




Sta

tus


Sta

tus

Agency and support 382 814 0 -382 814 382 814 0 -382 814

Consultants 2 873 660 2 350 000 -523 660 2 873 660 9 400 000 6 526 340

Other 0 0 0 0 0 0

TOTAL 3 256 474 2 350 000 -906 474 3 256 474 9 400 000 6 143 526


Page | 27

Major cost driver in PROJECT, DEVELOPMENT AND FUNDING operating expenses

• Consolidated Capital Grant The expenditure incurred during the quarter ended 30 June 2021 was R 110 567 638 which represents 14.46 of the annual allocation.

Reconciliation of cashflow statement

Balance as at 30 June 2021: 110 567 638 Prior year accruals in the current year: 81 689 420 Balance per cashflow statement: 192 257 058 CAPEX commitments as at 30 June 2021 is as follows:

Table 20: Capex commitment

Opening balance as at 31 March 2021 Q1 disbursements Q1 contract conducted Closing balance as at 30 June 2021

Provincial Institutional Subsidy 84 944 539 0 0 84 944 539

RCG/CCG 502 283 091 110 567 638 0 391 715 453

SHIP 11 contracts approved, but not yet contracted for: R 418 131 846.00 and a further R 98 687 721.00 was approved in favor of BCHC, Eagle Heights, which has been recommended for termination.


Page | 28

d) Supply Chain Management

• Performance against the Procurement plan for the quarter under review

During the quarter under review, the SHRA spent a total amounting to R 7 356 066. 81% of this amount

was spent on black owned companies and 39% was spent on the collective of women, youth, people

with disabilities, and Military Veterans service providers that are majority owned/controlled.

Figure 4: Procurement spend 2021/22

• Summary of payment of Suppliers

For full details on the payment of suppliers please refer to Annexure F

e) Information Technology

• Resignation of ICT Manager

JEC Technologies Group is assisting SHRA while we search for a new ICT manager.

Disaster Recovery Procedure - Current

Sage Computing is the current appointed service provider responsible to oversee the Veeam server

backups. JEC Technologies Group has assisted with Troubleshooting. The Veeam server onsite and

offsite backups have been inconsistent due to many factors. The main reasons are the speed of the

primary internet connection at head office, the age of the server hardware, and operating systems

that are no longer supported by Microsoft. JEC Technologies Group has implemented an on-premises

server backup solution that currently backups an on-premises loan server. SHRA has approved the

installation of a secondary internet connection that will provide additional capacity and redundancy.

This connection is expected to be operational during the second quarter.

SCM AND FINANCE SYSTEM UPGRADE AND REPLACEMENT

The existing finance system whilst licensed and functioning, is an on-premises solution and will require

an upgrade or re-implementation to migrate it to a cloud. This will include the digitised of storage of

all supporting accounting documents and a workflow approvals process. SHRA has appointed JEC

Technologies to assist SHRA to migrate the existing finance application to a hosted virtual server in

Microsoft Azure to provide improved reliability, offsite backup, and secure remote access.

81% 39%

% spent to companies with 50% and above black ownership % spent on collective of women, youth, people withdisabilities and military veterans service providers that are

majority owned/controlled

Quarter 1 2021/22


Page | 29

REPORTING, MONITORING AND EVALUATION SOLUTION

Mr Beaton held a workshop with CAR and the Research Analyst (Ahmed) to understand the need at a

high level. The next steps to move this project forward are to confirm and document the need,

compare to the existing BRD from nVisionIT and then develop ToR to go to market to procure the

appropriate solution/implementation that fits into the architecture decided.

A document has been prepared in the past, and a response to this document received from nVisionIT.

The cost of this is expected to be in the region of R600k as per the nVisionIT quotation and the annual

license cost of approximately R25 000.00 per annum. Exco approve the creation of the project,

document the requirement, and prepare a ToR for issue to market for the procurement of the services

to deliver the project.

BUSINESS PROCESS MODELLING TOOL, TRAINING, AND METHODOLOGY

The SHRA has a complete set of business processes and Standard Operating Procedures. These, as a

result of the introduction of the Case Management (MySHRA) system are required to be updated.

Should this not happen prior to the audit it is highly likely that adverse audit findings regarding the

compliance with documented and approved procedures will result.

In the strategy, it is highlighted that the ownership and management of the business processes should

become a SHRA responsibility to develop and enhance the strategic asset and obtain value from the

MySHRA and other systems. JECTECH believe that the appointment of a business analyst and the

allocation of responsibility for Analysis, SOP’s and development of enhanced reporting capability will

add significant value to the SHRA both in terms of its ability to extract, analyse and report as well as

optimising business processes to shorten execution timeframes and provide transparency for

management into the internal workings of the operating units.

MYSHRA Case Management System

SYSTEM USAGE

Significant progress has been made during the period under review with the completion of testing

and go-live for SD&T as well as the PD&F units. This essentially means the technical part of the project

is coming to an end, there are issues with user adoption and a programme is required to get this

moving forward.

EXTERNAL MYSHRA PORTAL

A security risk when dealing with external logins to the portal, including information compliance to

the POPI Act was previously identified. Solutions have been developed and the portal will be

completed. This removes the last obstacle in permitting the take up of the system by the operating

units.

Current Risks

• Server hardware failure due to outdated equipment no maintenance agreements.

• Inconsistent offsite server backups.

• No secondary internet connection.

• Current edge firewall is not coping with the load.

As a result of this risk, proper adherence to change control process has become critical.


Page | 30

The request highlighted above to rent an application server for 6 months is relevant and helps to

mitigate this risk.

MSP Long term Procedure

JEC Technologies Group has been appointed as the SHRA’s Managed Service Provider (MSP) with final

purchase order approved and sent to JEC Technologies Group in June 2021. JEC Technologies Group

has started the agreed projects to migrate servers and application to Microsoft Azure for improved

reliability, performance, backup, recover and secure remote access. The current state of the servers

remains critical and requires urgent attention to address capacity issues.

ICT Operations

DISK UTILIZATION

As a result of a lack of administration in the past, the servers are storing numerous files and mailboxes

of people who no longer work at the SHRA. In order to relieve pressure and help alleviate issues

caused by the delay in the procurement process of the long-term MSP and Office 365 migration, the

ICT team will be moving these folders and mailboxes to the approve SHRA on-site NAS storage.

AUTOMATED PATCH MANAGEMENT

JEC Technologies have made significant inroads into stabilising the environment, getting all laptops

up to specification in terms of patch levels and antivirus age. The stability of devices has significantly

risen whilst over the past three months the antivirus age has been significantly reduced and they have

installed over 1500 Windows operating system updates and security patches. The remaining issues

revolve around appropriate access to certain machines and the ability to update these. This process

has been marginally affected by the remote working.

f) Risk management

For more detailed risk management please Refer to Annexure E.


Page | 31

2.2 Programme 2: Compliance Accreditation & Regulation

The purpose of this programme is to accredit SHIs and projects and ensure compliance of the sector for the purpose of attracting private investment and

to ensure sustainability of the social housing programme. It is responsible for the regulation of social housing, accreditation of SHIs and project and

compliance monitoring. The programme’s functions are organised into the following sub programmes:

• Regulation of social housing, Accreditation of SHIs and Project and Compliance monitoring.

2.2.1 Programme 2 performance per APP deliverables


(2021/22)

Q1


Outcome 5: An effectively regulated and sustainable social housing sector

5.1.1 Percentage of

reporting SHIs and

ODAs achieving 3

or more

performance

benchmarks

61% of reporting

SHIs and ODAs

achieving 3 or

more performance

benchmarks

54% of reporting SHIs

and ODAs achieving 3

or more performance

benchmarks

54.8% (17/31) of reporting SHIs and

ODAs achieving 3 or more

performance benchmarks

Positive variance of 0.8%, which was mainly

due to a slight improvement in the number

of SHIs reporting operating costs of

<R1 550, going forward CAR will continue

encouraging SHI’s and ODA’s to meet

performance benchmarks.

5.2.1 Number of

additional fully

accredited SHIs

2 additional fully

accredited SHIs

No target

Not applicable

5.2.2 Number of

additional

conditionally

accredited SHIs

with accredited

projects

5 additional

conditionally

accredited SHIs

with accredited

projects

No target

Not applicable

5.3.1 Number of

subsidised housing

units' tenancy

audits conducted

3 300 subsidised

housing units'

tenancy audits

conducted

825 subsidised housing

units' tenancy audits

conducted

1,845 subsidised housing units'

tenancy audits conducted

Positive variance of 1,020 units. Seven (7)

projects were audited between April to

June 2021 and positive variance due to

timeous procurement in previous FY


Page | 32


(2021/22)

Q1


5.3.2 Number of

subsidised housing

projects’ tenant

satisfaction

surveys conducted

10 subsidised

housing projects’

tenant satisfaction

surveys conducted

No target

Not applicable

5.4.1 Number of

subsidised housing

projects’ safety

and security audits

conducted

15 subsidised

housing projects’

safety and security

audits conducted

No target

Not applicable


6.2.1 Percentage of new

project

accreditation

applicants that are

black majority

owned or

controlled

85% of new project

accreditation

applicants that are

black majority

owned or

controlled

85% of new project

accreditation applicants

that are black majority

owned or controlled

71% of new project accreditation

applicants that are black majority

owned or controlled

Negative variance of 14% where one SHI

and three Other Delivery Agents with five

(5) project applications are not majority

black owned or controlled. Applicants are

required to provide transformation plans

to the SHRA as part of the requirements

for these projects to be implemented. The

SHRA is partnering with organisations

representing potential transformed

applicants to support their membership

and is also developing an inclusive growth

policy to attract more transformed

applicants


project

accreditation

applicants that are

majority owned or

40% of new project

accreditation

applicants that are

majority owned or

40% of new project


that are majority owned

or controlled by the

designated groups

43% of new project accreditation

applicants that are majority owned or

controlled by the designated groups

Positive variance of 3% due to increased

participation of the designated groups

through SHRA awareness sessions and

partnerships with representative

organisations and SHRA will continue to


Page | 33


(2021/22)

Q1


controlled by the

designated groups

controlled by the

designated groups

have more awareness sessions and

partnerships with representatives.

Performance per OPS Plan Deliverables


(2021/22)

Q1


Outcome 5: An effectively regulated and sustainable social housing sector

5.2.3 Percentage match

between the demand

for SHI capacity in

localities where an EOI

process has been

undertaken and the

number of SHIs

meeting the criteria for

Pre-accreditation

80% No target

Not applicable

5.3.3 Percentage

development and

implementation of a

Remedial Action Plan

for completed tenancy

audits

75% No target

Not applicable

5.3.4 Percentage

development and

implementation of a


75% No target

Not applicable


Page | 34


(2021/22)

Q1


for completed tenant

satisfaction surveys

5.5.1 Percentage

development and

implementation of a


for completed BCAs

and the Safety and

Security Audits

100% No target

Not applicable

5.5.2 Percentage of funded

institutions where

maladministration has

been identified, which

are taken through

enforcement processes

100% 100%

Possible maladministration raised

with institutions listed below.

This is largely based on poor

quality quarterly reports

(specifically relating to their

financials on their operations),

not submitting requested

documents on time and

incompleteness of the requested

information.

FRESHCO: The institution has

been placed under administration

and the SHRA appointed an

administrator and is seeking

support from the Mangaung

Municipality to either reach a

level of sustainability or transfer

the social housing stock to a

different entity (see below)

Toproot: A forensic investigation was

concluded and the findings indicated

that there is evidence of possible

maladministration. As a first step

before pursuing a lengthy, expensive

legal process in terms of section 12 of

the Social Housing Act the SHRA

provided the SHI with a final

opportunity to address the findings by

means of a remedial action plan with a

deadline of June 2021. Based on the

assessment of progress against the

remedial action plan, further action

will be taken

Urbanscape: This is a new SHI that has

been reporting to the SHRA from

October 2021. The SHRA engaged with

the SHI on more than one occasion to

address the poor quality of the

quarterly reporting tool submissions


Page | 35


(2021/22)

Q1


Troyeville Housing Co-Operative:

The institution is under

administration and the


turnaround plan is underway (see

below)

and lack of financial supporting

documentation, lack of information on

the board structure/members and staff

in the SHI. Since no improvement has

been achieved a site visit to the project

will be conducted and a SHRA

representative will be assigned to

attend the SHI’s board meetings.

HAEL: The SHI remains non-co-

operative and all efforts to address

this, including at board level, has

failed. There is non-compliance in a

number of areas including the non-

submission of Board and sub-

committee agendas and adopted

minutes, tenant audit anomalies

(tenants outside the social housing

subsidy market), refusal to allow the

SHRA to conduct building condition

audits and non-submission of the

quarterly reporting tool. HAEL has

therefore been handed over to SHRA's

legal unit to follow a legal process for

submission of documents and then

advise on the way forward.

5.5.3 Percentage

achievement of the

milestones of the

80% 80%

Two (2) institutions currently

under administration:

Progress on FRESHCO administration

was slow since the SHRA was only able

to take control in October 2020 and


Page | 36


(2021/22)

Q1


project

implementation

document of funded

institutions placed

under administration

FRESHCO: Based on the 6-month

implementation plan, only one (1)

milestone was achieved.

Troyeville Housing Co-Operative:

New implementation plan as per

grant approved to implement the

turnaround and accreditation of

the co-operative and milestones

not yet set or achieved

only access the bank account in March

2021 with tenant engagement and a

short-term plan to assess the options

now underway

Troyeville was placed under

administration in July 2017 and for the

administration order to be lifted, the

project has to be managed by an

accredited SHI which in this case will

be the tenants/members as it is a co-

operative. The project is stable and

the final approved 12-month final

implementation plan will now start

5.6.1 Number of social

housing units

accredited (ODA’s)

2 000 No target

Not applicable


projects tenanted that

received tenant

education during the

tenanting phase by the

SHRA

80% 80%

0% - new indicator and work to be

implemented going forward in

accordance with the new policy

that applies from 1 July 2021

New CAR operational framework with

related policies implemented from 1

July 2021 where this target will now

become applicable from the second

quarter onwards

5.8.1 Reports on dispute

cases referred to rental

tribunals

4 1

No dispute cases received by the

SHRA in the first quarter that

needed to be referred to the

tribunals

New CAR operational framework with

related policies implemented from 1

July 2021 where this target will now

become applicable from the second

quarter onwards


Page | 37

2.2.2 Programme 2 Highlights for the quarter

a) Overview of Accredited SHI’s

There are ninety-nine (99) accredited institutions in the SHRA’s accreditation register, with eight

(8) of the institutions fully accredited, while ninety-one (91) are conditionally accredited. The eight

(8) fully accredited institutions all have projects under management, and are reporting on a

quarterly basis on the performance of their projects.

Twenty (20) conditionally accredited institutions also have projects under management and these

institutions are reporting on the performance of their projects where compliance issues are raised

and support is provided or remedial action required for the institutions to increase their

performance and potentially achieve full accreditation.

The conditional accreditation of forty-eight (48) institutions expires in the first quarter of 2021/22

and the project and compliance status of these institutions will inform the renewal process.

Figure 5: Accredited SHIs per Province

• Project pipeline

There are currently 79 projects from various institutions on the pipeline. The total number of units

projected on the pipeline is 39,995 social housing units. The majority of projects are still from the

Gauteng Province (more than 50% of the pipeline) with more work required in Limpopo and the

Free State such that projects may ultimately be supported by these Provinces and recorded on the

SHRA pipeline for support.

• Project accreditation

During the period under review, three (3) projects two (2) Provinces have been accredited. These projects were submitted by two (2) Other Delivery Agents (ODAs) and the particulars of the projects are as follows:

0

5

10

15

20

25

30

35

40

30 1 1 2 0 0 1 0

37

3

10

27

43 1

42

FULLY ACCREDITED CONDITIONALLY ACCREDITED


Page | 38

Table 21: Social Housing Projects that served at TEC for Accreditation

NO PROJECT ORGANISATION PROVINCE CITY NO OF

UNITS

DELIVERY

AGENT

1 North Park Mall SA Corporate Real

Estate

Gauteng Tshwane 133 ODA

2 Midrand Heights Instratin Properties Gauteng Johannesburg 305 ODA

3 Mountain Ridge

Gardens

Instratin Properties Western

Cape

Drakenstein 362 ODA

TOTAL NUMBER OF SOCIAL HOUSING UNITS APPROVED IN QUARTER 1 2021/22 800

It is therefore confirmed that three (3) social housing projects with the potential delivery of 800 social housing units was approved. That implies that the total number of social housing units approved within this MTSF period increases to 8,536 social housing units (7,736 during the previous financial years and 800 in the first quarter of this financial year). b) Compliance Monitoring

• Analysis of Social Housing Institutions/Other Delivery Agents performance

Two new institutions started reporting this quarter, bringing the number of reporting institutions with units under management to thirty-five (35). Twenty-eight (28) of the institutions reporting are accredited SHIs, while six (6) ODAs are reporting with one housing co-operative (Troyeville Housing Co-operative) also reporting. The number of units under regulation increased from 40 628 to 41 120 units during the period under review. Performance of the institutions are primarily measured against the five (5) primary benchmarks: The average rental collection rate was 78% with seven entities reporting collections above the benchmark of 95%. This rate has increased and it is believed that the implementation of the Residential Rent Relief Programme (RRRP) will also assist to improve rental collections. Vacancy rate impacts on the long-term financial sustainability of a project. There are numerous factors that can contribute to vacancies and these include lack of demand; location; price/quality ratio; competition; affordability; inefficiencies in the recruitment of new tenants; inefficiencies in the turn-around time; no/no up-to-date waiting list; maintenance condition of the building or the units; image of the area (unsafe); and social problems in the project. The average vacancy rate during the quarter was 10.1%. However, this includes new projects with tenanting underway. If this is excluded the vacancy rate is 6.1%. Although still high this is being monitored to ensure that institution tenant units and decrease the vacancy rate to below 2% (the benchmark). Tenant turnover is regarded as positive if households are moving up the housing ladder and negative if households terminate a lease agreement due to the quality of the services provided by the SHI, location of a project, the price relative to the quality, the maintenance condition of a building, etc. Either way, tenant-turnover will always result in an increase of the administration cost of an institution (looking for a new tenant, inspection of the unit and repairs in the unit). The SHRA set a benchmark of <2% as a measure of performance for tenant turnover. A turnover rate above 2% need not necessarily be an indication that there is a problem but can act as an early detection system that the situation needs to be monitored. Total operating costs per unit per month (excluding utilities) is an important indicator for efficiency of an institution. The SHRA approved benchmark is R1,550 per unit per month (pupm). Sixteen (16) entities reported operating costs of less than R1,550 pupm while seven (7) entities reported


Page | 39

operating costs of more than R2,000 pupm. The main contributors to the high operating costs were salaries and bad debt write off/adjustments. Direct cost to income ratio (DCIR) measures the direct operating costs/operating income as a percentage where the target range of less than 40% but not greater 60% applies. The rationale for this range was that was for SHIs with new projects the DCIR should be less than 40% but for those managing older projects a more realistic ratio would range from >40 to 60%. When considering the performance of the SHI in meeting this benchmark the age of the housing portfolio under management and other factors must therefore be considered. Where the ratio is below 40% it indicates that the entity has realised efficiencies and is operating its stock on a profitable basis. Should the ratio lie between 40% and 60% work needs to be done to improve on operations and ratios exceeding 60% indicate a high sustainability risk for the delivery agent. 24 SHIs achieved a DCIR of <60%; with 13 operating within <40% DCIR. Overall, 54.5% (17/34) of the reporting institutions met three or more of the five benchmarks, resulting in an increase of 4.6% from the previous quarter’s 49.9%. The intervention and remedial action plans proposed and described later in this report addresses some of these aspects to ultimately ensure increased performance, although the impact of the pandemic on the sustainability of the sector and institutions should also be considered. The performance is illustrated in the table below. Table 22: Performance Against Benchmarks

% Benchmarks

Achieved

Jan - Mar 21 (Q4

2020)

Oct - Dec 20 (Q3

2020)

July - Sep 20 (Q2

2020)

Apr - Jun 20 (Q1

2020)

5 3% 3,3% 0% 0%

4 22,5% 13,3% 18,0% 23,1%

3 29% 33,3% 36,0% 30,8%

2 25,8% 30% 32% 46%

1 19,3% 20% 14% 0%

0 0% 0% 0% 0%

Please note that this table excludes CTCHC as the SHI does not own rental stock so only two of the benchmarks can be applied

to the SHI i.e., DCIR and Operating Costs

• Analysis of the Capital Grant funded projects

The following projects are excluded from the quarterly analysis as they are a combination of RCG

and Institutional Subsidy (provincially) funded units, with the ratio of RCG to Institutional Subsidy

units less than 50%:

• Ekurhuleni Housing Company is currently unable to provide separate reports for 112 RCG units

added to their portfolio in Q4 2017 as the units have been combined with the Pharoe Park

project;

• Strathdon (FMHC SA) is a mixture of IS (42) and RCG (24) funded units; and

• Thusanang/Leyds Street (Yeast) is a mix of IS (11) and RCG (10) units.

Since FRESHCO has been placed under Administration the Brandwag project managed by this

institution is also excluded since the appointed service provider was not able to gain access to the

data required within the reporting period. There are currently 21,727 RCG/CCG units under

regulation, an increase of 520 units from the 21,207 reported in the last quarter. Twenty (20)

projects reported vacancies of more than 2%. This figure excludes new projects with tenanting


Page | 40

underway. The resultant loss of income as a result of vacancies was R 10,847,883 and as stated in

the previous section the SHRA is working with entities to address the high vacancies.

There were 565 reported lease terminations, a slight increase from the previous quarter’s reported

553 terminations. Some of the lease terminations can be attributed to job losses due to Covid 19

and lockdown. There were 11 evictions reported in the quarter. Other critical performance issues

that remain of concern and that must be addressed include:

• Maintenance and related costs: Some of the delivery agents are underspending on

maintenance, which poses a risk to the assets (buildings). There is concern that most SHIs

do not have maintenance reserves. The building condition audits have been concluded

with the report results analysed. Proposals on remedial plans will be prepared and tabled

for consideration in the next quarter.

• Rental Arrears: The total debtors from 90 days to more than 120 days increased by 12.9%

from R81,393,746 to R91,950,959 between December 2020 and March 2021 with a

substantial bad debt write off/adjustment that can hopefully to some extent be addressed

by way of the Residential Rent Relief Programme (RRRP) to be implemented in the next

financial year.

Interventions and remedial action

Table 23: CAR interventions on vacancy rate

INSTITUTION COMPLIANCE ISSUES INTERVENTIONS

Communicare Ongoing tenant related issues in the unsubsidised stock has impacted on the performance of their SH stock. Rental collection rate (75%); DCIR (66%) and vacancy rate (4%).

SHRA has been requested to undertake a forensic investigation into the alleged maladministration and corrupt activities by Communicare. This request stems from the uncertainty on whether the stock the SHI has privatised is in fact government funded.

EKHC Rent Collection (51%) Total Operating Costs (R3 928) Vacancy rate (3%) DCIR (84%)

Poor rent Collection and high operating costs continues to be a challenge, with high staff costs and bad debt write off contributing to the high operating costs. Cost Driver comparison exercise done and shared with the SHI and a plan aimed at mitigating these was submitted to SHRA. The SHI has been awarded a remedial action grant to assist the SHI to find ways to lower its high operating costs and improve its efficiency.

EHC Vacancy rate (10 %) Rental collection (42%) Total operating costs (R 2 139)

Uthingo Park generates 95% of the rental income for EHC and the ongoing tenant rental boycott has negatively impacted the financial health of the entity to the point where the SHI is now in financial distress. The SHRA has appointed a social facilitator to assist in building a bridge between the tenants and EHC. Once the tenant and landlord tensions are resolved, most if not all compliance challenges affecting performance can begin to show improvement.

FMHC SHI is financially distressed and unable to meet it loan obligations

SHI is currently undergoing business turnaround; SHRA appointed a project manager


Page | 41


to rollout the recommendations from the work of the Turnaround Specialist

HAEL Submission of Board and sub-committee agendas and adopted minutes; Tenant Audit Anomalies (Tenant outside the social housing subsidy market); Refusal to allow the SHRA to conduct building condition audits and Non submission of the Jan – March quarterly reporting tool

The SHI remains non-co-operative towards SHRA, and every effort to address this, including at board level, has failed. The SHI was requested to avail Belgravia project twice for a Building Condition Audit process but the SHI has continued to refuse to allow the appointed service provider access. As a result of this and other non-compliant issues, HAEL has been handed over to SHRA's legal unit for advice on whether to institute a Section 12 Intervention and to legally enforce the SHI to submit the outstanding documents

Instratin The only two benchmarks that were not met were the rental collection and vacancy rate. However, the rental collection rate is not concerning at 92% given the current economic climate. The underlying reason for the high vacancy rate has been established, which is the Matlosana Gardens project

Compliance Unit to monitor the Matlosana Gardens remedial action plan to ensure its implementation

JOSHCO Rent Collection (56%) Vacancy rate (3%) Operating Costs (R3 178) DCIR (157%) Low collection rates; high operating cost this quarter, with salaries and bad debt write off being the main contributors. High rental arrears across RCG funded projects and bad debt write off across 6 projects

Due to a number of ongoing compliance issues and poor performance, JOSHCO’s accreditation status was downgraded from fully accredited to conditionally accredited. The SHI has since made a concerted effort to respond to their outstanding compliance conditions. An assessment of the SHI’s response to the non-compliance issues is still to be undertaken

PHA Maintenance of Ga-Rena Project Rent Collection (31%) Vacancy rate (9%)

Following the SHRA's enforcement measures, the PHA board had submitted a strategy towards addressing the challenges within this SHI, with action items spreading throughout the last quarter of the 2020/21 financial year. A targeted intervention to ensure that the SHI addresses the maintenance issues in the Ga-Rena project will be implemented in the next quarter

Qhama Rental collection at 70% with DCIR at 86%. High vacancy rate due to tenanting however tenant take on seems to be slow and this can impact on the financial sustainability of the SHI

(1) There will a be site visit to the project as well as an inspection of the operations of the SHI.

(2) Governance (board meetings to be attended by a SHRA representative)

SOHCO Rental collection at 87% and vacancy rate of 5% with the SHI reporting vacancies of more than 2% across all its projects. At a portfolio level, the challenges being experienced by Steenberg project in Cape Town continue to negatively affect the performance of this SHI.

SD&T appointed a service provider to assist in diagnosing and turning around this entity. The CAR Unit is working closely with SD&T on the implementation of this business turnaround plan.


Page | 42


STHA Rental Collection (69%) Non-compliant tenanting at Hope city phase 1 project Vacancy Rate (12%) Operating Costs (R 1979)

Development of remedial action plan and monitoring of the implementation of the plan to ensure the SHI is addressing the tenanting non-compliance

Toproot Breakdown of relations between SHI and tenants which led to a rental boycott. Poor rental collection of 6% and high rental arrears currently at R2.9million.

The recently completed forensic investigation concluded that there was evidence of possible maladministration. Before pursuing further legal action the SHI was provided with a final opportunity to address the findings in the report. A remedial action plan with a deadline of 30 June for submission and implementation was agreed to.

Urbanscape Vacancy rate (14%) Operating costs (R1 702) SHI submits incomplete and inaccurate quarterly reports and the governance arrangements in the SHI are unclear.

(1) There will be a site visit to the project as well as an inspection of the operations of the SHI

(2) Governance (board meetings to be attended by a SHRA representative)

• Legal section 12 interventions

The section 12 interventions are managed in close consultation with the SHRA Legal Manager since most of the aspects related to this requires a legal process and in the case of FRESHCO the administration was delayed as a result of legal proceedings. The summary of these interventions is provided in the table below. Table 24: Section 12 interventions

NAME OF INSTITUTION

WORK DONE CURRENT STATUS THE WAY FORWARD

Free State Social Housing Company (FRESHCO)

A diagnostic was conducted and a turnaround plan developed in 2020. A Forensic audit was conducted on FRESHCO and the SHRA resolved to place the SHI under administration.

SHRA appointed an administrator, Alcari Consulting, to manage FRESHCO on its behalf. Monthly progress reports are sent out to the relevant stakeholders. The Administrator now has access to the FRESHCO bank accounts and appointed a number of the FRESHCO staff on a contract basis to assist with the rental collections.

The SHRA must prioritize the following: The management of the stock and its related tenancies in order to test whether the tenants will comply with the lease agreements, if there is a basic level of service offering and to then have an improved result to inform a final decision around FRESHCO. The process of replacement of the governance structure will commence when there is clarity on the viability of FRESHCO. A meeting was held with the Acting Mayor of Mangaung to also seek additional support and assistance from the municipality to manage the project, also to deal with services and waste management.


Page | 43

NAME OF INSTITUTION

WORK DONE CURRENT STATUS THE WAY FORWARD

Troyeville Housing Co-Operative

Placed under administration and support work proposed in addition to only administration

Since taking over the administration the SHRA has stabilized the project by ensuring a healthy rental collection rate which has allowed Troyeville to service its loan with the NHFC as well as secure an arrangement with the local municipality to service its outstanding debt. Currently the project is functioning through an interim body corporate (task team) made up of the residents.

The new service provider to undertake administration is now being appointed for a final period of twelve (12) months to enable the administration order to then be lifted. A new task team consisting of representative members of the Co-operative has been appointed and the SHRA initiated the process to assist the entity to obtain accreditation.

c) Regulations

• Tenancy audits and Building condition audits

• Tenancy audits

The SHRA was able to complete tenant audits in seven (7) projects which has resulted in a total of

1 845 tenant audits completed for the quarter. The results thereof will be assessed in the second

quarter to then be able to inform the compliance discussions to be arranged with the institutions

managing these projects. Further audits will be done as per the annual plan.

• Tenant Satisfaction Surveys

The SHRA will be conducting these surveys online where service providers were previously used,

to be initiated in the second quarter. The online survey has been developed and planning has been

undertaken with projects selected for implementation from the second quarter.

• Safety and Security Audits

The first quarter was used to plan the audits. This included development of the checklist for the

safety and security elements to be audited and selection of the projects to be audited. Audits will

commence in the second quarter and findings from these audits will be used to develop the

required remedial action plans.

Residential Rent Relief Programme (RRRP)

The programme planning stage commenced when the two (2) grant officers were appointed on 6

April 2021. Their responsibilities include assisting the SHRA with conducting technical assessments

of the rent relief applications, undertaking day to day administration duties of the rent relief

programme and making recommendations to the internal decision-making body of the programme

– this decision-making body is the Rent Relief Approvals Committee (RRAC). The policy, standard

operating procedures as well as the Terms of Reference of the Committee was approved in the

second quarter of this financial year.

The grant officers reviewed all the rent relief programme documentation to establish the expected

programme deliverables and desired outcomes. Further to that the officers developed timeline-

based work plans which are currently being implemented.


Page | 44

The achievements registered to date can be summarised in form of the key activities undertaken

during that period which include:

SCOPE OF WORK ACTIVITIES UNDERTAKEN

Implementation and refinement of

systems and monitoring procedures

Refinement of the existing application forms and various

reporting and communication templates to be used during

project implementation stage;

The templates were approved by the RRAC at its 1st

Committee meeting on 27 May 2021;

Readiness assessment of the systems to receiving bulk

attachments was completed;

The Grant officers received training on the HSS system of the

National Department that will be used to verify tenants’

personal information during application assessments;

Social housing landlords were prepared for the 1st phase of

the call for proposals that commenced on the 1st of June 2021

by sharing with them application forms and guiding principles

for them to assist tenants to complete their application

forms;

Social housing landlords were also provided with training on

the application process; and

The Grant officers communicated the details of the policy

framework and standard operating procedures to the

stakeholders and SHRA staff to ensure that they are ready for

the programme activities that require their involvement

Ensuring proper administration of the

programme

Training provided to all stakeholders on the programme

guiding principles. This included providing means testing

verification guidelines to the social housing landlords’

capacitation of both landlords and tenants on how to

complete the application forms;

Alignment of the developed risk management plan to the

SHRA Risk management framework is underway and this

includes the development of a detailed risk register

containing a log of issues and lessons learnt as well as

mitigation to appropriately deal with the risks; and

All upcoming rent relief approval committee monthly

meetings for the duration of the programme have been

scheduled

Stakeholder Management Responding to questions asked by both tenants and social

housing landlords received via the rent relief email address

[email protected] and through the telephone extension

allocated to the grant officers ext.6329;

Developing and contributing to responses to the frequently

asked questions about the programme; and

The first Staff engagement session was held on 23 June 2021

and was attended by 22 staff members. the second one was

planned for the 7th of July 2021

Some social housing landlords seem reluctant to engage tenants due to the perceived potential

risks of having applications declined for not meeting the current qualifying criteria and the

speculation of conflicts that may arise if applications are declined. The SHRA will continue to

engage to ensure that this matter is addressed and applications are made.


Page | 45

The grant officers recommend that a survey be conducted at a later stage to ascertain the views

of the social housing landlords and tenants on the programme and establish how best to assist in

improving the application process. There may also be a need to investigate the technical and

human capital capacity of social housing landlords to cope with the tenants’ applications and

means testing verification exercises.

Some application forms were submitted by tenants directly to the SHRA and these were not

completed correctly and did not have adequate supporting documents. These tenants are then

engaged to follow the correct procedures. In the period under review the grant officers were also

reaching out to the landlords offering support and alerting them of the applications received

directly.

There were no rent relief applications received from social housing landlords by the 30th of June

2021. The first batch of application is expected by close by first week of the second quarter. The

Grant Officers continued to provide support to the SHRA team where communication and policy

review input was required. They were also able to respond to enquiries from both tenants and

social housing landlords during the various information and engagement sessions held.

A total of 30 enquiries were directly received from tenants via the dedicated email address of which

85 % of these were requests for application forms. The balance were submissions of incomplete

application forms. All were referred to their respective social housing landlords for further

assistance.

Post the training offered to the social housing landlords on the 23rd of May 2021 the grant officers

received and responded to email enquiries submitted by 11 of the 30 social housing landlords. These

enquires were related to:

• treatment of applications for tenants that left or were evicted and left debt behind

• submission of applications on behalf of tenants that have been affected by the Covid 19

pandemic but only failing to pay their rentals post the period under review

• the ability to claim for arrears that are related to repairs and maintenance for tenants who

left

During the next quarter the implementation will begin with the first set of applications expected

by the 7th of July 2021. The grant officers will then initiate the applications handling process to

ensure that the applicants submitted sufficient documents and accurate information. All

applications received will be recorded on the grant register/ tracking dashboard. This application

handling process includes screening the submissions for completeness and adherence to the

eligibility criteria.

Applications with incomplete information and missing supporting documents will be returned to

the applicants for repackaging before they can re submit in 5 days. Failure to submit in the

stipulated time will result in the application being considered in the following month. The

applications that meet the qualifying criteria will be subjected to social impact assessments. The

application appraisal process will also commence, where the grant officers will prepare


Page | 46

recommendations for qualifying applications which will be presented at the 2nd RRAC meeting

which is scheduled for the 28th of July 2021.

d) Financial Performance

Expenditure for the financial year is at R 3 256 474 which translates to 35% of the annual allocation.


Page | 47

2.3 Programme 3: Sector Development and Transformation

The purpose of this programme is to support the growth and development of the social housing sector as well as administration of the Institutional

Investment Grant. It is responsible for the growth and development of Social Housing Institutions (SHIs) and Other Delivery Agents (ODAs), transformation

and empowerment of the social housing sector, assessment of applications for Institutional Investment Grants and coordination and management of

Institutional Investment Grants.


No. Output Indicator Annual Target (2021/22)

Q1


Outcome 3: Enhanced performance of delivery agents and projects

3.1.1 Number of incubation

programme participants

receiving project

accreditation

2 incubation

programme

participants receiving

project accreditation

No target

Not applicable

3.2.1 Percentage achievement

of the SHI intervention

plan

75% achievement of the

SHI intervention plan

No target

Not applicable

3.2.2 Percentage achievement

of the social housing

projects’ intervention

plan

75% achievement of the

social housing projects’

intervention plan

Not applicable

Outcome 4: Increased capacity of municipalities and provinces to deliver social housing

4.1.1 Number of provinces

that achieve at least 80%

of the criteria for

supporting a functional

Social Housing

Programme

7 provinces that

achieve at least 80% of

the criteria for

supporting a functional

Social Housing

Programme

No target

Not applicable


Page | 48


Q1



4.2.1 Number of projects from

municipalities in the

municipal support

programme accredited

2 projects from

municipalities in the

municipal support

programme accredited

No target

Not applicable


6.3.1 Percentage of

Institutional Investment

Grant (IIG) recipients

that are majority black-

owned or controlled

85% of Institutional

Investment Grant (IIG)

recipients that are

majority black-owned

or controlled


Investment Grant

(IIG) recipients that

are majority black-

owned or controlled

91.6% (22/24) of Institutional

Investment Grant (IIG) recipients

that are majority black-owned or

controlled.

A positive variance of 6.6%, is due to

institutions with invalid BBBEE

certificates where management is not

responding. One SHI SOHCO has 33% of

black women ownership. Going

forward SD&T would source MOIs

from CAR, and ensure that there is a

constant reminder sent to institutions.

Work with Property Sector to create

standardised SHRA BBBEE affidavits

6.3.2 Percentage of

Institutional Investment

Grant (IIG) recipients

that are from the

designated groups



recipients that are from

the designated groups


Investment Grant

(IIG) recipients that

are from the

designated groups

8/25 (32%) recipients that are

from designated groups

receiving IIG.

Negative variance of 8%. More work on

targeted awareness sessions for

designated groups have been planned.

Follow ups with SAWIC/BE, YIPA and

BBCBE membership will be intensified

for the support to be provided with

accreditation applications.

6.3.3 Percentage of

participants in the

incubation programme

that are women or youth

owned or controlled

33% (2/6) of participants

in the incubation

programme that are

women or youth owned

or controlled

33% (2/6) of

participants in the

incubation

programme that are

women or youth

owned or controlled

33% of participants in the

incubation programme that are

women or youth owned or

controlled

No variance


Page | 49

2.3.2 Programme performance per OPS deliverables


Q1



3.1.2 Number of incubation

programme participants

with projects in the

pipeline by the end of the

financial year

2 incubation

programme

participants with

projects in the pipeline

by the end of the

financial year

No target

Not applicable

3.3.1 Percentage expenditure

of the Institutional


More than 95% No target

Not applicable

3.4.1 Number of staff gear-up

grants awarded

2 No target

Not applicable

3.5.1 Number of new


supported

5 No target

Not applicable

Outcome 4: Increased capacity of municipalities and provinces to deliver social housing

4.2.2 Number of

memorandums of

understanding (MoUs)

concluded with provinces

to also include support

on restructuring zones

3 MoUs concluded No target

Not applicable

4.2.3 Number of social housing

projects with land

availability agreements

approved

2 No target

Not applicable


Page | 50


Q1


Outcome 6: A transformed social housing sector value chain

6.4.1 Achievement of the

milestones for

development and

inclusion of Social

Housing Codes in the

Property Sector Code

Social Housing Codes

finalised and reporting

structure established

Action Plan Endorsed

Action plan endorsed. No variance

6.5.1 Percentage


2021/22 Action Plan for

Gender Mainstreaming in

Social Housing

75% of the 2021/22

Action Plan

implemented

No target

Not applicable

6.6.1 Number of interns and

young black professionals

placed in the social

housing sector

10 No target

Not applicable


1.5.1 Number of social housing

awareness (and follow-

up) sessions arising from

the key stakeholder

group awareness

sessions facilitated

(including military

veterans)

4 awareness sessions

and (6 follow-up

sessions)

1 awareness session

1 awareness session concluded

for Youth in this quarter.

No variance

1.5.2 Implementation of

SAWIC&BE Annual Co-

Operation Plan

75% of Annual Co-

Operation Plan

implemented

No target

Not applicable


Page | 51


Q1


1.6.1 Number of institutional

support interventions

facilitated to achieve

strengthened capacity in

the SHRA

(Through 90 days of

institutional support

services)

Two (2) institutional

support interventions

concluded

No target

Not applicable

1.7.1 Demand-driven,

professionalised training

programme

incorporating provincial

and municipal officials’

training on restructuring

zones

Percentage of the

annual social housing

training programme

completed for the year

No target

Not applicable

1.7.2 Number of days of

technical support

interventions facilitated

to achieve strengthened

capacity in the social

housing sector using

procured panels of

service providers

120 days No target

Not applicable

1.8.1 SD&T Policy Reviewed

and Approved

Approved SD&T Policy No target

Not applicable


Page | 52

2.3.3 Detailed performance per APP deliverables

a) Social Housing Incubation Project

The work on the incubation is continuing with six (6) institutions. Two projects in the pipeline with

Durban Height approved for CCG in the previous financial quarter and Floor’s project approved at

TEC. Work is being done to form partnership with NHFC to participate in the incubation and an

MoU will be signed between SHRA, NASHO and NHFC.

Table 25: List of participants in the incubation project

NO NAME OF INSTITUTION PROVINCE

1 Zuberi Housing Company NPC Gauteng

2 Afrikhaya Housing Development Agency NPC Northern Cape

3 Uluvo Social Housing Corporation NPC Eastern/Western Cape

4 Africa Lemuel Properties NPC Gauteng

5 Social Housing Solutions Management Co-Operative Limited

Free State

6 Buhlebezwe Property NPC Gauteng (project in KZN)

b) Progress on SHI interventions and support given to Institutions

SD&T has liaised with CAR to provide for an Institutional Plan that will ensure SHIs are provided with grant support and to deal with compliance issues that needs attention from SDT. The list below where each institution is at with providing support. Six (6) Institutions were approved for grants during the period under review. Table 26: Progress on social housing institution interventions

NO NAME OF

INSTITUTION

CONFIRMED AND VALID

BBB-EE STATUS

BLACK OWNERSHIP

OR MANAGEMENT

CONTROL

SUPPORT WORK

AGREED ON WITH CAR

PROGRESS MADE TO DATE

1 FRESHCO Level 1 (no valid certificate)

100% Turnaround Strategy

Administration work in progress

2 FMHC SA Level 1 100% Business Support

Work initiated and in progress

3 SOHCO Level 1 33% Black women

Business Support

Work initiated and in progress

4 Troyville Housing Cooperative

Level 1 (no valid certificate)

100% Remedial Action

Procurement in process

5 Hope Social Housing Project

Level 1 100% Women Business Support


6 Emalahleni housing Company

Level 2 78% 33% black women 11% youth

Social Facilitation support

Work in progress

7 Vascowiz Level 1 100% Youth Pre-Accreditation support


8 Golden West SH Level 1 (expired) 100% Staff-Gear Up Put on hold pending legal outcome

9 Povicom Level 1 100% 16% Women

Staff-Gear up In progress


Page | 53

NO NAME OF

INSTITUTION

CONFIRMED AND VALID

BBB-EE STATUS

BLACK OWNERSHIP

OR MANAGEMENT

CONTROL

SUPPORT WORK

AGREED ON WITH CAR

PROGRESS MADE TO DATE

10 Property Sector Charter Council

Level 1 100% General Capacity

Work in progress

11 NASHO - Incubation Programme

Level 1 67% 33% women

General Capacity

Work in progress

12 NASHO – Municipal Support Programme

Level 1 67% 33%

General Capacity

Work in progress

13 Ekurhuleni Housing Company

Level 1 100% Remedial work Procurement in process

14

Let’s Care Level 11 100% youth Staff gear up In progress

15 ST Nubian Level 1 100% New Pre-Accreditation support

Grant agreement being concluded

16 Metsweding Level 1 100% New Pre-Accreditation support

In procurement

c) Progress on project interventions

During the period under review, project interventions are currently underway include SCM Social

Housing on the proposed Montrose social housing project (part of a mega-project) where work on

social housing demand is required, Vascowiz on business plan support to then apply for new

accreditation, Afrikhaya (an incubation participant) on the Floors project in Sol Plaatje Local

Municipality. Hull Street Phase 2 project reached project completion and project served at TEC with

approval as well as Goodwood project has also reached it completion for grant support.

Table 27: Progress on project interventions

NO NAME OF PROJECT

GRANTEE MUNICIPALITY PROVINCE CONFIRMED VALID BBBEE

STATUS

BLACK OWNERSHIP OR MANAGEMENT

CONTROL

1 Goodwood DCI Community Housing Services

City of Cape Town

Western Cape Level 1 100%

2 Allenby Street & Eric Liberty

Emalahleni Housing Company

Emalahleni Mpumalanga Level 2 78% 11% Black Youth 33% Black women

3 Ermelo Ermelo Social Housing

Ermelo Mpumalanga Level 1 100%

4 Sonheuwel Mbombela Housing Association

Mbombela Mpumalanga Level 1 100%


Page | 54

NO NAME OF PROJECT

GRANTEE MUNICIPALITY PROVINCE CONFIRMED VALID BBBEE

STATUS

BLACK OWNERSHIP OR MANAGEMENT

CONTROL

5 Hull Street Phase 2

SASIHC Sol Plaatje Northern Cape

Level 1 100% 10% women

6 44 Lancers Road

KZN Human Settlements

eThekwini KwaZulu Natal

N/A N/A

7 2 Epsom Road

KZN Human Settlements

eThekwini KwaZulu Natal

N/A N/A

8 Montrose SCM Social Housing

Randfontein Gauteng Level 1 100% youth

9 Floors Project

Afrikhaya Sol Plaatje Northern Cape

Level 1 100%

10 Phola Hights

Isibani Anami

Johannesburg Gauteng Level 2 80% 20% black women

11 White River Brianwell Properties (PTY)

Nelspruit Mpumalanga level 1 100%

d) Provincial support

During the period under review, a work plan for the year will then be developed and approved by the SHRA Executive Committee that would be supported by the provinces. Demand study for Northern Cape Province is currently in progress and KwaZulu-Natal demand Province’s market study was completed during the period under review. The findings of the study will be shared with wider stakeholders.

e) Municipal support

Seven (7) selected municipalities continue to receive support with City of Tshwane, George and Newcastle municipalities approved for grants support for Project Feasibility studies and demand market rental studies. Currently, the incubation has the following municipalities selected in the previous financial year: Table 28: Municipal Support Project Selected Municipalities

NO NAME OF MUNICIPALITY STATUS PROVINCE

1 City of Tshwane Metropolitan Municipality Gauteng

2 Mangaung Metropolitan Municipality Free State

3 Kouga (Jeffreys Bay) Local Municipality Eastern Cape

4 Stellenbosch Local Municipality Western Cape

5 George Local Municipality Western Cape

6 Newcastle Local Municipality KwaZulu Natal

7 Umhlathuze (Richards Bay) Local Municipality KwaZulu Natal

A best practice workshop was concluded during the period under review, municipalities in the support programme embarked on a field learning excursion in Western Cape where a workshop and site visits to two projects was undertaken. Selection process was concluded with the three (3) additional municipalities selected and approved by the SHRA Executive Committee. These include the following:


Page | 55

Table 29: Support to other Municipalities


1 Drakenstein Metropolitan Municipality Western Cape

2 Sol Plaatje (Kimberley) Local Municipality Northern Cape

3 Madibeng (Brits) Local Municipality North West province

The support provided to other municipalities outside the incubation programme will still continue, although such support would not necessarily be part of the formal support project. A Social Housing Programme workshop will also be conducted to include all municipalities with Restructuring Zones in the 2nd quarter. Two Municipalities approved for Project Feasibility and General Capacity grants support outside the formal municipal support programme is provided below. Table 30: Support given to other municipalities


1 Buffalo City Metropolitan Municipality Eastern Cape

2 Msunduzi Local Municipality KwaZulu-Natal

f) SD&T financial performance

The SD&T Expenditure up to the end of June 2021 is R 1 756 993.29 which translates to 7.73%. This

however, is paid from the previous year’s budget where monies were committed for grant

recipients by way of resolutions taken by the Executive Committee for appointments of service

providers.

g) Property Sector Charter Council

The annual target requires that Social Housing Codes are finalised and that the reporting structure

is established and was done in consultation with the Property Sector Charter Council. SHIs, ODAs

as well as SHRA management were trained on the proposed scorecard for social housing codes for

codes to be approved. A baseline analysis on the SHRA BBBEE information has been concluded. A

draft report has been drafted to be submitted to Department of Trade and Industry (DTI) for the

social housing scorecard codes to be then gazette.


Page | 56

2.4 Programme 4: Project Development and Funding

This programme looks at the methods of ensuring the SHRA delivers on the MTSF target of 30 000 units. Partnerships and coordination of the sector stakeholders

in the development of social housing is imperative. It is responsible for pipeline planning, capital grant contract management, partnership with Provinces and

Municipalities, partnerships with other Government departments, partnerships with other Funders to secure loan funding for social housing development and

partnerships with the private sector.



(2021/22)

Q1


Outcome 2: Quality, affordable social housing delivered in strategically located areas


housing units

completed

3 500 social

housing units

completed

500 social housing units

completed

643 social housing units completed

as follows

Devland Gardens 90

Fire Station Ext 2 148

The Block 96

Bothasig Gardens 50

Sondela Village P2 42

Townlands P1 127

Ga Rena (Annandale) 90

Positive variance of 143 social housing tenanted as a

result of PMs strengthen approach with GRs whose

projects are at construction to deliver as per the

construction schedule and disbursements to align

value on the ground.


housing units

tenanted

4 000 social

housing units

tenanted

500 social housing units

tenanted

479 social housing units tenanted as

follows:

Plein Street 193

the Block 209

Regent Villas 16

Kempton Village 11

Sondela 18

Steve Biko Munford 21

Madison Loft 11

Negative variance of 21 social housing tenanted.

Despite the negative variance, notable progress has

been made on this indicator compared to the previous

FY. Once again, the PMs perseverance in ensuring

tenanting of completed units must be noted.

Notwithstanding the financial impact of COVID 19 on

household income, it is pleasing to note that take up

of units is gaining momentum and demonstrates the

strong demand for Social Housing.


Page | 57


(2021/22)

Q1


2.2.1 Percentage

expenditure of the

approved annual

Consolidated

Capital Grant cash

flow projection

95% expenditure of

the approved

annual

Consolidated

Capital Grant cash

flow projection

25% expenditure of the approved annual Consolidated Capital Grant cash flow projection

16% expenditure of the approved

annual Consolidated Capital Grant

cash flow projection

Negative variance of 9% expenditure of the approved

annual Consolidated Capital Grant cash flow

projection. This is attributable to the impact of COVID

19 (OHS requirements, shortage of material, positive

cases and staff shortage) on construction sites hence

slow progress which would not justify payments for no

corresponding value on the ground.


6.4.1 Percentage of CCG

awarded to black

majority owned or

controlled

enterprises

75% of CCG

awarded to black

majority owned or

controlled

enterprises

75% of CCG awarded to

black majority owned or

controlled enterprises

83% of CCG awarded to black

majority owned or controlled

enterprises

Positive variance of 8% of CCG awarded to black

majority owned or controlled enterprises. This is as a

result of PMs in assessing and pursing projects on the

Pipeline that meet this requirement over and above the

minimum investment criteria.

6.4.2 Percentage spends

by grant recipients

on black majority

owned main

contractors and

professional teams

50% of project

value spent by

grant recipients on

black majority

owned main

contractors and

professional teams

50% of project value

spent by grant recipients

on black majority owned

main contractors and

professional teams

0% of project value spent by grant

recipients on black majority owned

main contractors and professional

teams

Negative variance of 50%, this is due to the calculation

that was not concluded in time for reporting and this

would be consolidated, concluded and reported on in

the 2nd quarter.

6.4.3 Percentage of CCG

awarded to

enterprises that are

majority owned or

controlled by the

designated groups

30% of CCG

awarded to

enterprises that

are majority owned

or controlled by

the designated

groups

30% of CCG awarded to

enterprises that are

majority owned or

controlled by the

designated groups

48% of CCG awarded to enterprises

that are majority owned or

controlled by the designated groups

Positive variance of 18% of CCG awarded to enterprises

that are majority owned or controlled by the

designated groups. There have been notable

improvements on this indicator as a result of PMs in

assessing and pursing projects on the Pipeline that

meet this requirement over and above the minimum

investment criteria

6.4.4 Percentage spend

by main

contractors on

black owned sub-

20% of project

value spent by

grant recipients on

main contractors

20% spent by grant

recipients on main

contractors and

professional teams that

0% spent by grant recipients on main

contractors and professional teams

that are from the designated groups

Negative variance of 20%, this is due to the calculation

that was not concluded in time for reporting and this

would be consolidated, concluded and reported on in

the 2nd quarter.


Page | 58


(2021/22)

Q1


contractors and

material suppliers

and professional

teams that are

from the

designated groups

are from the designated

groups

Targets against Operational Plan


(2021/22)

Q1



2.1.3 Number of units pre-

assessed and

recommended for

project accreditation

9 000 social housing

units pre-assessed

and recommended

for project

accreditation

2 250

397 social housing units pre-

assessed and recommended

for project accreditation

Negative variance of 1853 social housing units pre-

assessed and recommended for project accreditation.

The focus of Q1 was the review, reassessment and

repackaging of previously assessed projects which had

minimal outstanding criteria to be met for project

accreditation which has been put forward to the

relevant governance forums for approval. Given the

number of projects on the pipeline and the continuous

new applicants, the assessment and recommendation of

new projects should gain momentum over the next 3

quarters including those referred to SDT for

intervention,

2.2.2 Percentage of annual

Consolidated Capital

Grant (CCG) awarded

to Other Delivery

Agents

30% annual CCG

allocation awarded

to ODAs

30%

100% of the annual CCG

allocation awarded to ODAs

Positive variance of 70% of the annual CCG allocation

awarded to ODAs. There has been an increase in the

number of ODA applicants and the 3 projects accredited

in the 1st Quarter are all ODAs

2.3.1 Timeline for the

review and

submission of a five-

Five-year

Development Plan

(Growth Plan

No target

Not applicable


Page | 59


(2021/22)

Q1



year Development

Plan for delivery of

30 000 social housing

units

Framework) for

delivery of 30 000

social housing units

reviewed and

submitted by end Q2

2021/22

2.4.1 Rand value of

additional grant

funding sourced/

secured

R811,202 additional

grant funding per

year

No target

Not applicable

2.5.1 Rand value of debt

and equity funding

facilities established

with external

funding agencies

R9 billion loan

funding over the

term, at minimum to

match the available

grant funding per

annum

No target

Not applicable

2.6.1 Process grant

funding applications

in line with the

requirements and

timeframes of the

Revised System

Establish an efficient

and effective Grant

Funding Applications

system and

processes within

PDF

(Once approved by

Council for

implementation)

Fully functional Grant

Funding Applications

system and processes

established


Page | 60

2.4.2 Programme 4 Highlights of the quarter

• Number of social housing units completed

The unit completion target for the 2021/22 FY is 3 500 units. Despite the constraints faced by active projects under construction 643 units have been completed during the period under review against the target of 500 units with a positive variance of 143 units. The PD&F programme is hopeful that the delivery will improve over the next 3 quarters with the expectant decline of the COVID 19 3rd wave which has impacted Gauteng the most and which province has the largest number of projects and units. The current Disaster Management Act (“DMA”) allows for construction activities which places this indicator in the safer light.

• Number of social housing units delivered (tenanted)

The current financial year annual tenanting target is 4000 units. For the period under review, 479 units were tenanted. This is a shortfall of 21 social housing units tenanted against a quarterly target of 500 units. Despite the slow take up of units, this is a significant improvement compared to the last FY and it is anticipated that the unit completion above will be tenanted in the 2nd quarter and the pace of tenanting will gain momentum in the next 3 quarters as the economy slowly recovers from the impact of COVID 19.

• Percentage expenditure of the approved annual Consolidated Capital Grant cash flow projection

The target for 2021/22 financial year remains unchanged from previous years i.e., 95% expenditure of the cash flow projection which translates to R687 520 700.00 against the programme cash flow annual cash flow projection of R709 227 409.00 The target for the 1st quarter is 25% expenditure which equates to R177 306 853.00. Quarter 1 expenditure totalled R110 567 638.00 (16%) resulting with a negative 9% variance. Given the current economic state, the programme has been conservative in its projections with the hope that there will be a steady and more positive peak in the 3rd and 4th quarters on the back of unit completions, contracts meeting contractual milestones and Municipalities meeting their obligations to administer statutory approvals.

• Percentage of Consolidated Capital Grant (CCG) awarded to black majority owned/controlled

enterprises (>50% black)

The annual target of this indicator is 75% of the CCG awarded to BBBEE enterprises. 4 projects were recommended for accreditation of which 3 were approved. 2 of the 3 grant recipients are Level 1 BBBEE owned. This translated to a grant value of R181 335 289.00 of R217 493 600.00 (83%) was awarded to BBBEE owned delivery agents resulting in a positive variance of 11%.

• 50% spent by grant recipients on black owned main contractors and professional teams

Of the R110 567 638.00, 1st quarter expenditure that was expended grant recipients on black owned main contractors and professional teams was not concluded at the time of reporting.

• Percentage of Consolidated Capital Grant (CCG) awarded to the collective of enterprises designated

as majority owned or controlled by women, youth, persons with disabilities and military veterans

The 3 accredited projects during the period under review equalled R217 493 600 which translates to 48%

that was awarded to the designated group translating into a positive variance of 18% against the annual

target of 30%.

• 25% spent by grant recipients on main contractors and professional teams that are from the

designated groups

Of the R110 567 638.00, 1st quarter expenditure that was expended by grant recipients on main contractors

and professional teams that are from the designated groups was not concluded at the time of reporting.


Page | 61

Status of Operational targets

• Percentage of annual Consolidated Capital Grant awarded to Other Delivery Agents (“ODAs”)

Year to date ODAs funded by SHRA is 13 included the recent 3 CCG approvals. 3 of the accredited projects in the 1st quarter were to ODAs with a CCG value of R217 493 600. Against the annual target of 30%, this target has been achieved with 100% of the CCG awarded to ODAs in quarter 1.

• Number of units pre-assessed for project accreditation and recommendation report on the state of

project readiness submitted to the Compliance, Accreditation and Regulations Programme 9 000

The target for the current financial year is 9 000 units pre-assessed and recommended for project accreditation. As at the end of the quarter, the Pipeline of registered projects was 38 697 units. Although PD&F anticipated the pre-assessment of approximately 12 789 units by the end of the last financial year, the focus in the 1st quarter of this FY has been on facilitating and project packaging of previously assessed and declined projects to project readiness and retabling for approval which has been the 3 accredited projects in the quarter under review. Over and above that, 397 units have been assessed and recommended in the quarter under review resulting with a shortfall of 8603 units pre-assessed and recommended to CAR for the FY.

The PD&F unit plan for the next 3 quarters to achieve this annual target is as but not limited to the following:

- Advertise Expressions of Interest (“EoI”) for projects in regions/provinces with low delivery

viz Northern Cape, Limpopo, Mpumalanga and Free State; - Conclude SCM processes for EoIs in 2nd Quarter and when required on an adhoc basis; - Investigate options (and gain approval) for capitalising the planning phase of projects through

the feasibility grants from the IIG and/or the utilisation of interest income (with SD&T); - Develop a plan of action and confirm targets by province and region through the PSCs; and - Identify projects requiring SD&T intervention on a quarterly basis – submit to SD&T at the

beginning of each quarter.


Page | 62

a) Projects with challenges

Table 31: Projects with challenges

Project SHI/ODA SHIP Units Comments & Dependencies

EASTERN CAPE

1. Ocean View Hlalanathi 5A 603

• The project has been on hold since December 2019 due to Hlalanathi’s failure to maintain the project Financial Closure status.

• A meeting as convened between the SHRA and Hlalanathi and their legal representatives on the 03 February 2021 to discuss project financial closure specifically the debt funding and project financial viability. Hlalanathi assured the SHRA that they will provide an update regarding debt funding by the 30 April 2021. To date, the SHRA has not received any confirmation of debt funding from Hlalanathi and it is in breach of the RCG agreement.

• The SHRA Legal unit and PDF has initiated termination of this project and has also inform the province thereof.

• Hlalanathi has confirmed that the site is secured and that a security personnel on site.

2. Steve Biko Qhama 5A

• The Steve Biko Munford project is not progressing well and the project completion date has been delayed due to cashflow issues. Qhama has secured debt funding from ECDC and the project is drawing down on the debt funding. Qhama has committed its own equity of R 3.5 million to assist the project cashflow. PDF has advised Qhama to review and change the current project implementation plan in order to fast track the completion of the project.

• The project faces possible budget shortfall to complete both the Munford building and Old Mill building due to inflation and Qhama’s poor contract management

FREESTATE PROVINCE

1. Brandwag Freshco 5A 495 The compliance unit is currently implementing the administration order that seeks to implement the turn-around strategy. This matter is currently managed by SHRA compliance unit with the assistance of Legal Manager.


Page | 63


2. Hillside View Kenso 8B 853

• Regularising the project by gazetting the restructuring zone is still pending, however the province has indicated that the process is nearly complete and the final report will be packaged and presented to the Minister.

• Phase 1 of the project is complete and is being tenanted, however the SHRA is unable to report on performance due to the pending gazetting of the restructuring zone.

• Kenso has refunded the SHRA R44 million and the outstanding R10 million shall be paid within the current financial year.

• PDF unit together with SHRA legal are proposing terminating phase 2 of the project, in order to minimise the SHRA risk. The SHRA has not disbursed any funds on phase 2.

• The land transfer from Kenso to Kentha is still pending, the PDF PM followed up on this matter with the HOD of Human Settlements in the Province and we were informed that the Directorate prepared a Council Item to resolve the matter but it was withdrawn at Council.

NORTHWEST


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3. Gabonewe Gabonewe Estate P/L

6A 801

Repayment of the disbursement In mitigation of the Proclamation Risk, FC extension was granted on condition that the Grant Disbursement of R8.5m is repatriated to the SHRA. Gabonewe Housing has honoured the condition and refunded the SHRA with this amount. Notarial Deed of restriction The SHRA legal unit is assisting with amending the clauses in the Notarial deed documentation because Gabonewe is not the land owner but a leaseholder, the land is in the custody of the Department of Agriculture, Rural Development and Land Reform. The SHI is a subsidiary of Bakubung Minerals - Wesizwe, an entity that has leased the land for a period of 35 years.

Proclamation Proclamation was expected in Sept 2020, but it is still not in place due the following outstanding items it cannot be concluded

• consent from the China Development Bank (CDB), the majority shareholder. The CDB has to date not provided consent; and

• consent from the Department of Rural development and Land Reform as custodians of the land on behalf of Bakubung Ba Ratheo. The Department of Rural development and Land Reform (the Department) in their response, recommended that an outright sale of the development be affected instead of proceeding with the lease agreement. The department has encouraged Gabonewe Housing to complete the public participation process, however Gabonewe Housing could not comply with the requirements due to the COVID -19 lockdown.

Building plans

• Gabonewe has received a conditional building plans approval which allows them to proceed with works.

• The Contractor has been appointed and commenced with the works on the back of conditional approval.

• NHBRC enrolment certificate has been submitted to the SHRA.

• Construction of the first batch of the 144 unit has commenced. The project is currently at 60% completion.

GAUTENG


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4. Germiston Ext 4 NOMDA 7D 201

• Nomda land transfer is registered with the Deeds office, the title deed in favour of Nomda has been issued to the SHRA.

• The Notarial deed is in place.

• Building plans are approved by Ekurhuleni Municipality.

• CP conditions has been complied with however the FC conditions have not yet been achieved.

• The site development plan and building plans are approved

• The debt funding agreement is still outstanding. Nomda is awaiting feedback from SASFIN and NHFC. NHFC has requested additional information with regards to transformation and revised costing prior to presenting the transaction to their sanctioning committee.

• Extension of time to comply with FC was granted to the end July 2021.

• Over and above the FC that conditions that must still be complied with Nomda must still evict the illegal tenants on site.

• Construction will commence once the illegal occupants have been evicted and Nomda has complied with the outstanding FC items which are the conclusion of the debt funding agreement, enrolment of the units with the NHBRC and appointment of the Contractor.

5. Westonaria Borwa Goldenwest 7A 582

• The project has met both CP and FC.

• The notarial deed of restriction over the property is underway, the grant recipient has been requested to prioritise the registration.

• 126 units have been completed thus far and reported on as practically completed during the 2nd quarter of 2020/21 financial year.

• Contract administration and institutional arrangements on this project remains a major issue, law suits which ensued between the developer and the SHI have resulted in a shutdown of the site.

• Exco approved that a forensic investigation into the affairs of Golden West SHI be carried out in accordance with Section 12(3) of the Act and an application be made to suspend the chairperson and board of Golden West in accordance with Section 12(4)(a) of the Act.

• The revised project plan was submitted incorporating the delay caused by the lockdown. However, this schedule is outdated due to the developer stopping construction activities on site as a result of a disagreements with Golden West SHI.


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6. City Deep JOSHCO 3B 328

• The project has met CP; however, FC is still outstanding.

• The notarial deed of restriction over the property is still outstanding, JOSHCO is waiting for JPC to sign the template.

• 328 units have been completed and tenanted. It is important to note that these units have not yet been counted and reported on towards meeting the SHRA tenanting mandate, pending the site development plan approval, building plan approval and occupation certificates.

• A professional team consisting of a Project Manager, Architect and Town Planner has been appointed to finalise the consent use application, obtain site development plan, building plan approvals and occupation certificates.

• These town planning applications were submitted to the City of Johannesburg for approval, however the Johannesburg Property Company (JPC) delayed issuing the Power of Attorney (PoA) in favour of JOSHCO’s Town Planner and Architect.

• The PoA is required by the City of Johannesburg Development Planning Department and the Building Control Department prior to approving the abovementioned applications. To date PoA for the Town Planner has been issued and the consent use application has been approved.

• The site development plan and building plan approvals will be obtained as soon as the PoA for the architect has been received from JPC, which is anticipated first week of July 2021.

• The SHRA’s Portfolio Manager and Executive Manager have also engaged JPC in an attempt to expedite issuing of the PoA for the Architectural services.

7. Mohlakeng THH 9A 1080

• The project has met both CP and FC. However, it must be noted that THH have lost the debt funding facility with African Rainbow Capital/ Rand Merchant Bank and FC has therefore regressed.

• The notarial deed of restriction over the property is in place.

• 448 units have been completed thus far, however construction activities are on hold due to FC regression which has subsequently resulted in the contractor’s claims not being paid.

• THH made submissions to multiple funders in an attempt to secure debt funding for the project, the

SHRA has also been invited to engagements between THH and some of the funders (DBSA, STANLIB and

SASFIN).

• THH was issued with project performance notices on 07th October 2020, 27th October 2020 and 14th January 2021 respectively. In addition, notices of breach of the Consolidated Capital Grant (CCG) Agreement were issued on 05th March and 21st June 2021 requesting THH to remedy the breach within 14 days.

• THH has since responded with a letter dated 22nd June 2021, requesting for suspension of the notice of breach and also attached a facility agreement with STANLIB which is currently being reviewed by PD&F and the Legal Unit.

WESTERN CAPE


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8. Heideveld DCI 8D 180

• The Project has achieved CP but not FC.

• Extension of FC was grated until the end July 2021 on condition that the Developer is appointed and debt funding is in place. Sasfin has issued a letter of interest and is performing their due diligence on the project.

• DCI was advised to appoint a Turnkey developer to undertake the project in accordance with the extension of time conditions.

• A proposal for the appointed Developer will be tabled in the July EXCO.

9. Goodwood DCI 8B 1055

The project has experienced extraordinary delays including lack of capacity by the grant recipient, project planning challenges, relocation of powerlines and re-design of the development to fit in within the budget.

• FC conditions has not been met

• DCI was granted extension of time until end of July2021 to finalise the outstanding conditions as stated below:

• NHBRC enrolment o The NHBRC condition is partially met because DCI has paid for the enrolment of the Northern side

units which consists of 360 units and are awaiting the NHBRC certificate. o The balance of the units will be enrolled once building plans for the southern side are approved.

• Site Development Plan and Building Plans o The northern section the Site Development Plan and the building plans have been approved. o The southern side’s building plans have been submitted and have not yet been approved.

• Debt Funding o DCI has received a term sheet from SASFIN for R116M. o DCI was requested to provide the SHRA a signed debt agreement in compliance to the FC. o The signed debt agreement is expected end June 2021.

• Updated Project Development Cost budget inclusive of Construction Budget to reflect tender results, as well as cash-flow draw down from funders (updated QSC) and construction contract between DCI and the Main contractor. o The updated QSC was provided to the SHRA, however DCI is finalising all the sources of funding,

which is the debt funding, the USDG grant, the CCG and the Geotech allowance as well as the additional USDG funding from the COCT.

o SASFIN has provided a term sheet and the debt agreement is expected to be concluded at the June 2021.

o The COCT has sent a letter citing the USDG grant for the project in the amount of R17M. the Geotech recommendation has been concluded by Western Cape Province.


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b) Contract management

8 projects have not met CP and 14 projects outstanding FC. It must be noted that the 4 projects accredited at the end of March 2021 and the further 3 projects on 29 June 2021 are only expected to achieve CP and FC later in the year. The CCG contracts for 5 of the 8 awards are still be finalised and signed by all parties which delays the meeting of the CCG milestones. This is a performance risk that the SHRA must continuously improve on by following the SOPs as approved. While no projects were recommended for termination during the period under review, 1 CCG award was withdrawn from Nthoese for the 56 on Main project given the rescinding of the grant applicants accreditation status. PD&F still remain challenged with non-compliant and\or non-performing CCGs contracts which contribute immensely to the poor performance of the programme.

c) Provincial engagements

The resources in the PD&F unit are now as per the approved structure (4 Portfolio Managers) with the appointment of a new Portfolio Manager on 1 June 2021. This will now ease the work load of project allocations with a more focused approach and redistribution of provincial project allocations and sharing of the Gauteng projects among the 4 Portfolio Managers.

Gauteng, Western Cape, KwaZulu Natal, Northwest and Eastern Cape are 5 provinces that still make up >80% of the target (30 000) for the MTSF period. The provincial breakdown and delivery against the MTSF targets are detailed in the table below. Of all these delivery agents, 10 are ODAs totalling 14 projects and a unit yield of 7 123 social housing units which equates to 24% of the MTSF target.

Table 32: Provincial engagements

Pro

vin

ce

MT

SF

Tar

ge

t

# D

el

Ag

en

ts

# P

roje

cts

Un

its

2019

/20

De

live

red

2020

/21

De

live

red

2021

/22

Q1

De

live

red

Clo

sin

g

Bal

ance

Q1

Ex

pe

nd

itu

re

Eastern Cape 2160 4 4 1838 452 385 0 1323 R0.00

Free State 2160 3 3 1488 0 0 0 2160 R0.00

Gauteng 11010 21 30 13987 2140 1049 407 7414 R81 724 251.00

KwaZulu Natal

3420 4 4 3354 0 0 0 3420 R0.00

Limpopo 1200 1 1 494 0 164 90 946 R0.00

Mpumalanga 1710 4 4 1329 114 0 0 1596 R0.00

Northern Cape

600 1 1 372 0 0 0 600 R0.00

North West 3180 2 2 1501 0 0 0 3180 R0.00

Western Cape

4560 8 10 3104 304 258 146 3852 R28 843 386.00

Total 30000 48 59 27467 3010 1856 643 24491 R110 567 637.00

The Provincial and Municipal engagements is summarised as follows: Eastern Cape

The MTSF target is 2 160 (7%). The Eastern Cape currently has 4 accredited projects which are John Street, Ocean View, Steve Biko and Walmer Cosmo. The province has produced 385 units from the John Street


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project in the previous financial year. The province is expected to produce 70 Practically completed units from the Steve Biko Munford project in the current financial year. Tenanting of at least 200 units is projected for the current financial year. The total number of projects in the SHRA pipeline is 8which will yield 4702 units, however some of these projects are not technically and financially ready. The province has improved in scheduling Provincial Steering Committee meetings, however issuing Provincial letters of support to endorsed projects remains a challenge. Free State

160 (7%) MTSF target. The provincial performance in terms of the social housing programme is not at the level expected. Neither unit delivery nor tenanting is expected from the Free State in this current financial year. Furthermore, the registration of new projects on the SHRA pipeline is minimal with only 1 new project received in this quarter under review which is still to be assessed. The SHRA has been engaging with the Provincial officials to schedule the Provincial Steering Committee meetings without any success up to this stage. The Provincial restructuring zone submission process has been delayed for over a year. This is worrisome because MTSF might not be achieved. However, it must be noted that Mangaung Metro is part of the SD&T’s Municipal Support programme wherein the bespoke outcome will be assistance to the Metro to prepare and conclude the RZ submission and to identify land and buildings for social housing.

Gauteng

Gauteng Province contributes to and is responsible for the majority of the MTSF target of 11 010 (37%). There have been improvements in the convening of PSC meetings due to constant and regular engagements with the province. The SHRA has not yet engaged with the new HOD formally meet, to present the delivery expectations from the province, the current challenges experienced both at project level due to delays in processing of quality assurance reports, community unrests and construction mafia impact, and at Intergovernmental Relations view point between the SHRA and province. A meeting that was scheduled for 24 June 2021 had to be cancelled due to SHRA commitments. This meeting is due to convene early in the 2nd quarter.

The SHRA pipeline has 48 projects totalling 22 869 units, majority of which are far from readiness. While the PSC meetings are regularly convened, the meetings do not conform to the approved Terms of Reference. Improved communication between the SHRA and the Province, and increased support on endorsed projects for TEC consideration is critical. Project specific PSCs will enhance the project packaging approvals and provincial support required because Gauteng has the bulk of the projects. Turnaround times are still very long in particular expediting contract signature and quality assurance certification. Approval of the geotechnical variation is critical for implementation of Gauteng projects.

KwaZulu Natal

1 300 (11%) MTSF target. The province has been consistent in holding provincial steering committee meetings where project challenges are resolved promptly. There are currently 8 KZN projects on the SHRA pipeline with a unit yield of 2529, 1 project received support from the March 2021 TEC meeting bringing the total number of active projects in KZN to 4 and 3354 units.


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1 project is receiving SD&T support while the other 7 are still undergoing pre-screening. Therefore, the province has a total number of 2529 units on the pipeline.

Project steering committees have been established between the grant recipients, applicable municipalities, the SHRA and Province to manage any challenges that projects may face. There are meetings held biweekly to resolve challenges on active projects (Bridge City and Hospital Street Projects) and pipeline projects. We said this in the Q4 report. What’s the status\progress\timelines on this and what is required to fast track. I’m guessing this is Hospital Street and Bridge City projects.

Limpopo

1 200 (4%) MTSF target. Limpopo is one of the non- performing Provinces as they have not displayed a keen or any interest in the social housing programme neither are regular Provincial Steering Committee meetings scheduled to discuss potential future projects. There is a serious need for SHRA to engage the Provincial HOD to discuss the future of Social Housing. The province currently has only 1 active project under construction which is expected to yield 494 units after completion, however for this financial year the province will produce 190 practically completed units.

The SHRA together with the NDoHS held a meeting with the province to discuss the lack of PSC meetings in the province, the terms of reference of the PSC were shared with the province and it was agreed that the meetings will be established, this has not taken place. Subsequently the SHRA was approached by the Social Housing Advisory panel of the province in an attempt to gain a further understanding of social housing as well as the policies and guidelines. The meeting was held at the SHRA offices and necessary information was shared. This has also not borne any positive fruits.

Mpumalanga

The current MTSF has a target of 1710 (6%) units for Mpumalanga Province. The province only gained momentum in the implementation of the Social Housing Programme towards the end of the previous MTSF. The pipeline currently has 2 projects totalling 1 074 units. The SHRA Council in March 2021 approved 1 project totalling 363 units for which the CCG is still to be concluded pending the SHRA confirmation of project financial viability. Thus far there are 4 accredited projects in the province which total 1329 units (including the recently approved project under SHIP 11D). The province also has 4 projects that are receiving a Feasibility Grant intervention and are currently receiving project packaging support. It is anticipated that applications for the Consolidated Capital Grant will be submitted within the third quarter of the 2021/22 financial year. Northern Cape

The current MTSF has a target of 600 (2%) units. The Northern Cape Province also gained momentum in the implementation of the Social Housing Programme towards the end of the previous MTSF. Some 372 units have been recently accredited and the pipeline has an additional 272 units. The province is also experiencing challenges in the implementation of the Social Housing Programme due to lack of performance and responsiveness issues at municipal level, which subsequently delays statutory approvals for projects. Northwest

3 300 (11%) MTSF target. The North West Province currently have 3 active contracts with a total unit yield of 2 669 units. The Ellaton project was terminated in the 2nd quarter of the 2020.21 financial year. The province has demonstrated initiatives to rescue the Ellaton project, however due to the legal process that must still ensue, project implementation will only be possible once the Ellaton property will be transferred to the Housing Development Agency. The province has maintained PSC meetings and a greater effort appears to be made with additional Restructuring Zones approved in other municipalities. Two projects being MiederPark and Dassierand have received endorsement from the PSC. These two projects will yield 1 800 units. The SD&T unit has provided assistance in capacitating the province with grants for market


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study and project packaging for the Thabane West Bokone project which has since been approved for a CCG. Western Cape

5 600 (15%) MTSF target. The Western Cape Province currently have 9 active contracts, which is expected to yield 3104 units. An additional project with 362 units has been approved. Furthermore, an additional Consolidated Capital Grant Contract within the City of Cape town has recently been concluded. There have been several engagements with the Province and Municipality for the period under review and both Stakeholders are very keen in making great effort in identifying and driving potential social housing projects and the delivery of the social housing programme. The City of Cape Town have been actively pursuing the Woodstock and Salt River and Parow developments and making land parcels available for the social housing developments. The province together with the SHRA has convened engagement with prospective Other Delivery Agents to facilitate project delivery during this MTSF period. The initiative will be perused in the 21/22 financial year to assist in fast-tracking delivery. Although initially most of the thrust of these projects were in the City of Cape Town, considerable effort is now also being made in other secondary municipalities, such Bitou Municipality, George Municipality, Mossel bay Municipality, Knysna Municipality, Breede River Municipality, Drakenstein Municipality and Stellenbosch Municipality. The province has been working closely with these municipalities to identify suitable projects (mostly on municipal land) and initiatives to drive social housing projects. The WC has a healthy pipeline project of about 15 000 units at different readiness level. Monthly pipeline meetings are held with the Provincial and Municipality project managers to assess and evaluate project readiness. SD&T unit has provided assistance in capacitating the Stellenbosch municipality in project feasibility studies. Stellenbosch is now finalising the bid documentation for projects that will yield over 700 units. Some of the Municipal and Provincial officials are working from home, making it challenging for projects to receive requisite approvals, however the Western Cape team has been actively engaging on project implementation and troubleshooting on challenges encountered. Provincial Steering Committee meeting have been consistent throughout this period under review. It must however be noted that some projects Geotech recommendations have taken far too long to receive recommendations, which has a negative impact on SHRA delivery. Two projects have been launched by the Minister during this period under review, which has seen just over 300 tenants and about 1500 families been accommodated. d) PDF Project Status

For PD&F Detailed project report please see annexure G


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Annexure A_ Performance Tables

Annexure B_ Management Accounts

Annexure C_ Compliance Matrix

Annexure D_ Statement of Compliance

Annexure E_ Strategic Risk Register

Annexure F_ Payment of Suppliers

Annexure G_ Detailed project report

Annexure H_PDF Dashboard

quarterly report 2021 22 - shra.org.za

Documents