Media Statement - 22 August 2012

Following the Portfolio Committee’s visit to the Free State in September 2011 as part of its Parliamentary oversight mandate, it expressed disquiet about the state of housing delivery by the provincial human settlements department in that province.

Upon invitation for a briefing to Parliament by the Portfolio Committee led by Honourable Nomhle Dambuza, Human Settlements Minister Tokyo Sexwale reported to the committee, inter alia, as follows:

  • The National Department of Human Settlements has established as far back as 2010 that there is serious cause for concern around housing grant expenditure totals which do not tally with the amount of units delivered on the ground.
  • At the time, this led to the Human Settlements MINMEC - a committee of all provincial human settlements MECs and the Minister – taking a decision to reallocate certain funds to other provinces to avoid non-performance and failure of delivery.
  • National Treasury also become involved and indicated their concerns around the Free State issue.
  • On 16 May this year, the Office of the Auditor-General independently dispatched a team led by Paul Serote to the Free State and having interacted with human settlements officials, presented a disconcerting analysis and findings on the housing delivery situation in the Free State. These included wrongful housing allocation by senior managers; irregular expenditure of more than R500 million; houses built without being registered with the NHBRC; houses recorded on the Housing Subsidy System which could not be physically verified; advanced payments to suppliers on behalf of contractors; and so on.
  • The full and detailed report beyond the briefing to the Portfolio Committee will be tabled before the Cabinet for remedial action.
  • Minister Sexwale expressed appreciation for action taken a few weeks ago by the new Human Settlements MEC Olly Mlamleli who suspended two chief directors and three directors last month.
  • The SIU has been approached in respect of investigations under the Special Presidential Proclamation No.35 which empowers it to conduct forensic investigation.

Minister Sexwale said: "No stone will be left unturned in our drive to arrive at the centre of any housing related questionable financial misconduct.”

"This is disheartening because as this is poor people’s money… I will be taking this issue to the Cabinet. Depending on its wisdom Section 100 is not excluded,” he said.

Issued by the Ministry of Human Settlements

For more information please call Xolani Xundu at 083 788 5747

Press Release Date: 
Wednesday, August 22, 2012