National Audit Statement
Pretoria, 2 November 2009
Context
Today’s announcement comes in the broader context of the following:
· A shrunken economy.
· An increased deficit: Even though the recession may be beginning to lift, we are still far from an economic recovery.
· Reduced budget allocations: Government departments are having to do more with less, which puts particular pressure on delivery departments such as Human Settlements.
· Service delivery protests: Although these have focused primarily on dissatisfaction with local government representatives, attention is also being drawn to problems with housing delivery.
· Public comment to the Presidential Hotline: The President has already highlighted the fact that a large number of complaints relate to housing delivery issues. Our own research shows we receive more than 500 referrals a week from the Hotline, and our own Hotline (0800 146 873) is experiencing increasingly heavy traffic.
· Evidence from our own visits to provinces: We have visited six provinces in our first five months, and found persistent and chronic problems relating to service delivery.
There are many success stories in the broad field of human settlements development.
· We have already provided more than 2.8-million housing opportunities since 1994.
· We are currently on target in terms of delivery of new housing stock in the various provinces.
· We have very successful initiatives in place in the field of social housing projects and informal settlement upgrading.
· Projects such as the N2 Gateway and other pilot projects have provided valuable lessons in the rollout of new housing options, although highlighting some underlying problems.
· Our initiatives to ensure a holistic and integrated approach to human settlements development are starting to take form.
But there are massive challenges which we have to acknowledge and address.
This financial year, we will allocate more than R12-billion – more than 90% of our total budget -- to provincial governments for expenditure on housing delivery. And it would be irresponsible of us, as the national Ministry, to sit behind our desks and hope that this money is magically spent on quality homes for the poor. In the same way, it would be wrong to sit back and hope that this funding is spent in the most effective way, and that all of it reaches its intended beneficiaries.
The reality is that there are serious underlying problems with housing service delivery. And we have found deeply concerning evidence of what is happening.
Among the complaints that we repeatedly hear are:
o Shoddy construction work, inferior workmanship and broken houses.
o Continuous contracting of the same bad contractors.
o Projects which have been delayed for inordinate periods.
o People who have been in housing queues for years.
o People selling government houses.
o Illegal occupation of government houses.
o Nepotism.
o Abuse of the housing waiting list system – in many cases, by government employees themselves. For example: according to the Special Investigations Unit, there are currently 800 government employees who are unlawful beneficiaries of housing subsidies, 120 of them at municipal level.
We cannot allow this sort of thing to continue. We have a choice: to ignore these problems and continue with business as usual, or to act.
The audit
In response to the situation we face, we have decided that we need to take a rigorous look at housing delivery -- from top to bottom.
We have therefore instituted a National Housing Audit to examine, review and analyse the chronic problems in the delivery of houses.
The principal aim of the audit is to identify and uncover blockages and impediments to delivery, with a view to improving systems, controls and measures.
The net effect of this will be to accelerate the creation of sustainable human settlements, and to bring about a quantifiable improvement in the quality of life of the poor.
The audit team
· The investigation will be led by the Special Investigations Unit, which is already investigating certain elements of housing delivery.
· Their work will by fully supported by:
o The Office of the Auditor-General
o The internal audit team of the Department of Human Settlements
o Provincial government representatives.
· This initiative also has the full support of the Standing Committee on Public Accounts (SCOPA) and the Portfolio Committee on Human Settlements.
What the audit must achieve
The outcomes will be:
· Facilitation of criminal action
· Institution of civil action
· Forcing contractors to finish their work
· Claims against contractors who have not done their work properly
· Blacklisting of repeat offenders in all provinces
· Naming and shaming of people, both inside and outside government
Among the deliverables we envisage are:
· Proposals and recommendation on appropriate systems, controls and measures to address problems relating to the efficient management and control of the housing demand database.
· Clear guidelines on steps to be taken and measures to be taken – including blacklisting and prosecution – to prevent and curb malpractices and fraudulent actions in the procurement and awarding of tenders.
· Appropriate action to be taken – including disciplinary action and/or civil or criminal action to prevent and curb irregularities.
We can assure those who are involved in dodgy deals that there is no place to hide. Heads are going to roll.
Conclusion
We want to hear what people are saying about cracked houses, fraud, and contractors not doing their work. We urge members of the public to come forward with information which will help us get to the bottom of these problems.
We are doing these things, ultimately, so that we can make a difference to the lives of people.
We need to rectify the many things which undermine our efforts.
We need to focus on issues which we know are specific impediments – fraud, delays, corruption, absentee contractors, ghost houses, shoddy workmanship, and corruption around waiting lists.
As a frontline delivery department, we have to give the country comfort that these problems are being dealt with. We are responding to what people are saying. We can’t turn our backs on the poor. This situation is not of their making.
But at the same time, we cannot close our eyes to the people who have put us in this position.
Chris Vick
Special Advisor
Human Settlements Ministry