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W Cape Human Settlements accounts for R287million of the province’s R328m irregular expenditure

Auditor-General Tsakani Maluleke released the 2020/21 audit outcomes for national and provincial departments earlier this week. Picture: Thobile Mathonsi/African News Agency (ANA)

Auditor-General Tsakani Maluleke released the 2020/21 audit outcomes for national and provincial departments earlier this week. Picture: Thobile Mathonsi/African News Agency (ANA)

Published Dec 12, 2021

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FOR the second year in a row the Department of Human Settlements was a blemish on the Western Cape government’s near “perfect” audit outcome after it accounted for R287 million of the province’s R328m irregular expenditure bill.

Auditor-General Tsakani Maluleke released the 2020/21 audit report for national and provincial government departments as well as their entities this week.

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While the province was praised for its continued financial health and its overall audit outcomes were declared as improved – the report raised concerns around compliance matters.

Of the province’s 21 audited entities and departments, 14 clean audits were observed – of which 12 were able to maintain their clean status for three or more consecutive years.

However, the Department of Human Settlements, led by MEC Tertius Simmers, was singled out for avoidable discrepancies which cost the department millions of rand.

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The AG’s report highlighted the flouting of procurement processes as a big contributor to the increase in irregular expenditure.

Meanwhile, the provincial Health Department accounted for R28.9m and while Transport and Public Works accounted for R8m of the R328m irregular spending bill.

The report found that despite concerns raised last year, audit outcomes for Human Settlements regressed due to various findings.

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“As a result, the department was responsible for 87% (down from last year’s 92%) of the province’s total irregular expenditure. Of the department’s current-year irregular expenditure, R89m (31%) relates to contracts entered into the previous year on which work still needed to be performed, while R189m (66%) relates to one security contract for which certain procurement regulations were not followed.

“The processes and legislative requirements relating to expanding the scope of contracts need to be carefully considered to ensure full compliance and avoid further regression in audit outcomes,” read the AG report

Acting head of department Phila Mayisela told Weekend Argus the security contract in question referred to an existing one that was expanded and extended as of October 1 last year to include other government institutions and municipalities, despite the original terms of reference set to only cover the Human Settlements’ properties and land.

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Despite not disclosing why proper processes were not followed, Mayisela instead highlighted the importance of providing private security to sites vulnerable to invasions.

“It is important to note that invasions continue to be a big risk for this department, as additional costs are incurred when damaged property and items have to be fixed.

“Furthermore, those earmarked to benefit from a project also face more delays, even though they’ve already had to wait many years for a housing opportunity,” said Mayisela.

Just last week, at least 136 houses at the Forest Village housing development in Eerste River were invaded by a group of 200 backyard dwellers who voiced their frustrations at the long wait for houses.

The report found that Human Settlements’ departments at all provinces incurred irregular expenditure and that some of the provinces were not effectively using the human settlements’ development grant to provide housing and decent service.

Nationally, the sector was found to have used 96% of the grant while only completing 93% of serviced sites and 86% of houses built.

Gauteng was the only province found to have exceeded its targets while using its entire budget, while the Western Cape, despite spending 100% of its allocation, only managed to complete 75% of the 8 506 planned houses due to project delays for the current financial year.

This comes as the province has a housing waiting list of about 600 000.

Auditor-General report flagged the Western Cape for not reaching its target of building over 8 000 houses in the current financial year. Pictures: Brendan Magaar/African News Agency(ANA)

“The challenges highlighted have remained unattended over the years and are significantly affecting the sector’s ability to effectively meet the objectives of this grant – (which is) to provide much-needed houses to citizens,” read the report.

Mayisela said the human settlements portfolio experienced numerous challenges that hampered service delivery.

“The housing grant funding is steadily decreasing year on year, while at the same time construction costs are increasing,” she said.

Mayisela also listed planning delays, construction delays that are exacerbated by protests, illegal occupation as well as contractor performance and Covid-19 as other hindrances to achieving targets.

The provincial department was also flagged for its management of infrastructure grants and its ability to deliver on projects timeously.

* The Syferfontein housing development in George was flagged for not approving water-use licenses and building plans in time which led to delays in the project at a cost of R4.69m. The project, an Integrated Residential Development Programme (IRDP), has a budget of R434m and commenced in August 2018. It is expected to deliver 2 113 housing opportunities to different income categories.

* The Vlakkeland project in the Drakenstein Municipality was listed as having incurring delays and additional costs due to a lack of coordination and collaboration. The approval of housing plans for this project led to an eight-month delay at a cost of R3.05m while another R1.14m had to be paid to the contractor due to a lack of agreement over whose responsibility it was to take over the civil portion of the project.

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