Shra Annual Report 2019/20 1 Contents

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Shra Annual Report 2019/20 1 Contents Annual Report SHRA is an agency of the National Department of Human Settlements Official sign-off It is hereby certified that this Annual Report was developed by the Council and management of the Social Housing Regulatory Authority (SHRA) and indicates the audited achievements against the performance targets as per the Annual Performance Plan 2019/20 approved by the Executive Authority. __________________________ __________________________ R. Gallocher Date Chief Executive Officer SHRA ANNUAL REPORT 2019/20 1 CONTENTS Official sign-off 1 Contents 2 Section A: Strategic background 4 1. Foreword by the Chairperson 6 2. Chief Executive Officer’s overview 8 Section C: Governance 38 3. Strategic overview 10 3.1 Mandate 10 5. Introduction 40 3.2 Vision 10 6. Assessment of Corporate Governance compliance 41 3.3 Mission 10 7. The roles and responsibilities of the Council 42 3.4 Values 10 8. Composition of the Council 43 3.5 Strategic outcome-oriented goals 12 3.6 Legislative and other mandates 12 Section D: Annual Financial Statements 44 3.7 The Social Housing Act (No 16 of 2008) 13 3.8 Functions of the SHRA 14 Annexure A - Performance against the programme’s annual indicators 136 3.9 Key policy developments and legislative changes 15 Annexure B - List of abbreviations and acronyms 162 3.10 Structure of the entity 16 List of Figures Section B: Performance 18 Figure 1: SHRA’s approved structure 2019/20 16 4. Performance of the entity 20 Figure 2: Number of staff over the period (2014-2019) 20 4.1 Organisational environment 20 Figure 3: Annual performance rate over period (2014-2019) 21 4.2 Achievement against the strategic outcome-oriented goals 22 Figure 4: Number of units approved and completed over the period (2014-2019) 22 4.3 Performance information by programme 24 Figure 5: Number of Units under regulations over MTSF period (2014-2019) 22 4.3.1 Administration programme 24 Figure 6: Expenditure of the RCG/CCG over the 2014/15 – 2019/20 period 24 4.3.2 Compliance, Accreditation and Regulation (CAR) Programme 31 Figure 7: Expenditure against IIG over MTSF period (2014-2019) 23 4.3.3 Sector Development and Transformation (SDT) Programme 34 Figure 8: Office of the CEO structure 24 4.3.4 Project Development and Funding (PDF) Programme 35 Figure 9: Corporate services structure 28 4.3.4.1 Units delivered (Tenanted) 36 Figure 10: Compliance, Accreditation and Regulation structure 31 4.3.4.2 Units completion 37 Figure 11: Fully and Conditionally accredited institutions 2019/20 32 Figure 12: Fully & Conditionally accredited SHI’s per Province 33 Figure 13: Sector Development and Transformation structure 34 Figure 14: Project Development and Funding structure 36 Figure 15: Tenanting Trends 36 Figure 16: Unit completion 2019/20 37 Figure 17: Unit completion trends 2014-2019 37 Table 1: Strategic outcome-oriented goals and goal statements 2015-2020 12 Table 2: Legal matters where SHRA is involved 30 2 SHRA ANNUAL REPORT 2019/20 SHRA ANNUAL REPORT 2019/20 3 SECTION Strategic backgroundA 1 FOREWORD BY THE CHAIRPERSON It gives me great pleasure to present the In July 2019 the Minister of Human The entity’s achievement in the year under review could not have been possible Social Housing Regulatory Authority’s Settlements, Water and Sanitation without the efforts of the staff and management and Interim Council would like to Annual Report for 2019/20. dissolved the SHRA board and the Interim thank them for their zealousness and commitment to the entity. Council was appointed to restore oversight The SHRA is mandated to facilitate the and governance. The Interim Council On behalf of Interim Council, I would like to extend our appreciation to the delivery of quality, sustainable social would like to extend its appreciation to Minster of Human Settlements, Water and Sanitation, L.N. Sisulu MP and housing units at scale to advance the the previous Council members whose Portfolio Committee whose leadership has enabled the entity to turnaround. needs of low and middle-income groups contribution stabilised the entity and has in support of spatial, economic and social allowed the entity to be better positioned We look forward to working with the Honourable Minister, L. Sisulu restructuring. In order to promote an to support the social housing sector and MP and the National Department of Human Settlements, Water and enabling environment for the growth and tackle its important mandate. The SHRA Sanitation in this journey of inclusive human settlements growth development of the social housing sector, has surpassed all previous financial year’s and transformation. essential policy amendments were made capital expenditure performance with in the prior year. almost 166% or R1.2 bn of Capital Grant was spent against the approved budget of These include the increase of the R723 706 000 by the end of March 2020. Consolidated Capital Grant quantum and the increase of the income bands The work of the SHRA requires collaboration for qualifying households. The grant between all three spheres of government quantum and income bands had been and the private sector in order to facilitate static for several years, undermining the the social housing programme and we viability of social housing development have continued to build relationships and threatening the sustainability of the with our stakeholders within the period programme. under review. We wish to thank these departments and organisations for their The welcomed increases have been seen participation in a number of our activities as a very positive shift in the sector and in the period under review and their acknowledgement of the importance of continued commitment to the social the role of the social housing programme housing programme. in transformation of South African society. ___________________________ B. O Dlamini Chairperson 6 SHRA ANNUAL REPORT 2019/20 SHRA ANNUAL REPORT 2019/20 7 2 CHIEF EXECUTIVE OFFICER’S OVERVIEW Government is keen in the implementation this expenditure was very advanced at the There has been a growing trend in number of units under regulation over the MTSF period, of the National Development Plan. The time that the annual audit was concluded. 2018/19 was 36 305 and 2019/20 which is the new of term is 39 407 units under regulation. year under review, ushered in a renewal of This shows significant improvement over the last MTSF period. purpose and collective commitment to re- SHRA performance has reached 67% in the ignite growth to strengthen the economy period under review. Expenditure of both The Sector Development and Transformation programme has spent 73% of its for a more resilient and regulated Social the capital and institutional investment allocated budget. Extensive social housing training events were coordinated Housing Sector. grants has also increased steadily. SHRA nationwide during the period under review. These focused on training Social increased expenditure on the Consolidated Housing Institutions (SHIs) as well as other stakeholders such as local authorities The SHRA management team has Capital Grant (CCG) to R1 202 831 411 in the and black businesses. committed itself to the achievement of period under review, which comprises a a clean audit opinion (unqualified with 166% performance against budget. Thank you to all our stakeholders for their continued support in the no findings). This objective has thus far implementation of the Social Housing Programme. eluded the organisation and management The SHRA’s vacancy rate at the end of is presently engaged in a point for point the period under review was 15%, with analysis of the obstacles that presently recruitment of eight positions currently stand in the way of such an outcome. underway. It has been of no help that, in management’s In terms of the entity’s contribution to pursuance of higher production rates and the NDP, through outcome 8 (Human levels of performance, especially in the Settlements), the SHRA managed to area of social housing unit completions, deliver a total of 13 968 (2014-2019) new this haste has brought along with its social housing units against the MTSF certain unwelcome non-compliance with target of 27 003 units, with an additional laws and regulations thus resulting in the combined 21 750 units in the construction classification of certain expenditures as and planning phase. With the advent of the irregular. This irregular expenditure chiefly 6th Administration of a democratic South arose from the SHRA Council interpretation Africa, post the national and provincial and application of a 10-kilometre radius elections in May 2019, the SHRA managed to gazetted restructuring zones within to produce 3 010 units out of 30 000 units metropolitan areas affecting two projects. targeted for the new MTSF period (2019- Management was later advised that this 2024). approach would be found wanting as these two projects were located in zones There are currently 103 fully and that had not been gazetted. Management conditionally accredited institutions on therefore elected to report this expenditure the Register of Social Housing Institutions, ___________________________ as irregular and to focus on regularising of which twelve (12) institutions are both projects by having the two extended fully accredited and 91 are conditionally R. Gallocher zones gazetted. The process of regularising accredited. Chief Executive Officer 8 SHRA ANNUAL REPORT 2019/20 SHRA ANNUAL REPORT 2019/20 9 3TE STRA GIC OVERVIEW 3.1 Mandate 3.3 Mission The Social Housing Regulatory Authority (SHRA) was established by the National Facilitate delivery of quality, sustainable social housing Department of Human Settlements as prescribed by the Social Housing Act, No 16 of 2008. at scale to advance the needs of low and middle-income The SHRA is classified as a national public entity in terms of Schedule 3A of the Public groups in support of spatial, economic and social Finance Management Act, No 1 of 1999 as amended.
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