Parliament, Wednesday, 20 March 2024 – The Portfolio Committee on Human Settlements has welcomed the strong consequence management initiatives taken to remedy the material irregularities identified in the Human Settlements portfolio in the 2022/23 financial year. Today, the Office of the Auditor-General and the Department of Human Settlements (DHS) briefed the committee in a presentation on the matter, including the consequences arising from these irregularities, which affected the provincial human settlements departments of the Eastern Cape, Free State, Gauteng, Northern Cape, North West, and Western Cape.
The committee heard that consequence management processes have prevented the loss of R23 million, while 15 officials responsible for the irregularities have been identified and disciplinary processes completed or are in the process of completion. In addition, six matters were referred to the Directorate for Priority Crime Investigation, two supplier contracts were halted, and internal controls and processes were put in place to prevent a recurrence of the problems. In the committee’s view, strong consequence management initiatives prevent corrupt practices.
The committee remains concerned that some of the irregularities identified include payment for goods not delivered and in the Northern Cape’s Lerato Park substandard work led to a loss of R2.8 and R11.6 million. Meanwhile in North West, a loss of R7 million was incurred because the amount paid for work exceeded its value. In the Eastern Cape, the awarding of a contract to a supplier that did not score the highest out of all the available bidders led to a financial loss of R167 million.
“It is our considered view that strong internal controls and effective project management would have prevented these irregularities from occurring,” said Ms Machwene Semenya, the Chairperson of the committee. “While the consequence management interventions are welcomed, those incidents have a direct impact in stalling transformational projects from happening, which impacts negatively on the trust people have on the department to deliver on its promises,” she said.
Meanwhile, the committee has underlined the need for joint planning between the Department of Human Settlements and sister departments to enhance delivery of projects and avoid non-spending on the Human Settlements Development Grant (HSDG) and the Urban Settlements Development Grant. The committee was informed that as of 30 August 2023, Free State, Gauteng and Western Cape provinces had spent less than 30% of their 2023/24 HSDG annual allocations, which risks underspending of the provinces’ entire grant allocation by the end of the 2023/24 financial year.
“The District Development Model [DDM] central pillar is to ensure that all spheres of government plan effectively and ensure delivery of a basket of services. It is unacceptable that it is difficult for the DHS to deliver houses because of lack of bulk services such as water, sanitation and roads. Implemented effectively, the DDM will resolve these impediments,” Ms Semenya said.
The committee also spoke about is concerns related to the continued disruption of projects by construction mafias demanding 30% of the value of the contract. The committee has called on the department to work with law enforcement agencies to bring a stop to this practice, as it is patently criminal and will deter contractors from bidding on projects.
Similarly, the committee called on both the national and provincial departments to begin blacklisting underperforming contractors, which would conserve the state’s financial resources and protect citizens from poorly built houses.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS. MS MACHWENE SEMENYA.
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