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VOTE 7

VIEWS: 4 PAGES: 12

									                                                                          Vote 7 - Housing • Adjustment Budget - 2008/09




                                                                                                    VOTE 7

DEPARTMENT OF HOUSING

                                                                               2008/09
                                    Main appropriation             Adjusted              Decrease          Increase
R thousand                                                       appropriation
Amount to be appropriated                      3,101,521                 3,187,289                                    85,768
of which:
  Current payments                                307,547                  333,617                                    26,070
  Transfers and subsidies                       2,789,974                2,849,672                                    59,698
  Payments for capital assets                       4,000                    4,000
Executive authority                MEC for Housing
Accounting officer                 Head of Department


Vision
To be a province where all households inhabit quality homes in vibrant and sustainable communities.

Mission
To provide appropriate quality services, tenure housing in targeted precincts and communities working in
partnership with stakeholders.

Changes to programme purposes and measurable objectives
None




                                                            83
Vote 7 - Housing • Adjustment Budget - 2008/09


Adjusted 2008/09 Estimates of Departmental Expenditure

TABLE 1: HOUSING
 Programme                        Main                                 Additional appropriation                                   Adjusted
                              appropriation    Roll-overs   Unforeseeable   Virement/            Other            Total        appropriation
                                2008/09                     / unavoidable Reprioritisation    adjustments      additional        2008/09
 R thousand                                                                                                   appropriation
1. Administration                    214,296                                                         11,070           11,070          225,366
2. Housing Needs,
Research and Planning                 15,504                                                                                           15,504
3. Housing Development,
Implementation, Planning
and Targets                        2,803,873                                           281           74,698           74,979        2,878,852
4. Housing Asset
Management                            67,848                                         (281)                             (281)           67,567
 Total Payments &
Estimates                          3,101,521                                                        85,768           85,768        3,187,289




Economic                          Main                                  Additional appropriation                                  Adjusted
classification                appropriation    Roll-overs   Unforeseeable      Virement/         Other            Total        appropriation
                                2008/09                     / unavoidable Reprioritisation adjustments         additional        2008/09
 R thousand                                                                                                   appropriation
 Current payments                   307,547                                        15,000           11,070           26,070          333,617
 Compensation of
employees                            207,734                                                        11,070            11,070          218,804
 Goods and services                   99,813                                        15,000                            15,000          114,813
 Interest and rent on land
 Financial transactions in
assets and liabilities
 Transfers and
subsidies to:                     2,789,974                                      (15,000)           74,698           59,698        2,849,672
 Provinces and
municipalities
 Departmental agencies
and accounts
 Universities and
technikons
 Foreign governments &
international organisations
 Public corporations &
private enterprises
 Non-profit institutions
 Households                        2,789,974                                      (15,000)          74,698            59,698        2,849,672
 Payments for
capital assets                        4,000                                                                                            4,000
 Buildings and other fixed
structures
 Machinery and
equipment                              4,000                                                                                            4,000
 Cultivated assets
 Land and subsoil assets
 Total Economic
Classification                    3,101,521                                                         85,768           85,768        3,187,289



                                                                       84
                                                                                        Vote 7 - Housing • Adjustment Budget - 2008/09

TABLE 2: PROGRAMME 1: ADMINISTRATION
 Sub-programme             Main                                            Additional appropriation                                       Adjusted
                       appropriation   Roll-overs             Unforeseeable      Virement/           Other                Total        appropriation
                         2008/09                              / unavoidable Reprioritisation      adjustments          additional        2008/09
 R thousand                                                                                                           appropriation
 1. Office of the MEC           21,155                                                                                                        21,155
 2. Corporate Services        193,141                                                                      11,070             11,070         204,211
 Total Payments &
Estimates                    214,296                                                                       11,070            11,070         225,366




Economic                            Main                                   Additional appropriation                                       Adjusted
classification                  appropriation    Roll-overs   Unforeseeable       Virement/              Other            Total        appropriation
                                  2008/09                     / unavoidable     Reprioritisation      adjustments      additional        2008/09
R thousand                                                                                                            appropriation
Current payments                     198,322                                                                11,070           11,070         209,392
Compensation of employees             120,993                                                                11,070           11,070         132,063
Goods and services                      77,329                                                                                                 77,329
Interest and rent on land
 Financial transactions in
assets and liabilities
 Transfers and
subsidies to:                          11,974                                                                                                 11,974
 Provinces and municipalities
 Departmental agencies and
accounts
 Universities and technikons
 Foreign governments &
international organisations
 Public corporations &
private enterprises
Non-profit institutions
Households                              11,974                                                                                                 11,974
 Payments for capital
assets                                  4,000                                                                                                  4,000
 Buildings and other fixed
structures
 Machinery and equipment                 4,000                                                                                                  4,000
Cultivated assets
 Software and other
intangible assets
 Land and subsoil assets
 Total Economic
Classification                       214,296                                                                11,070           11,070         225,366




                                                                        85
Vote 7 - Housing • Adjustment Budget - 2008/09


TABLE 3: PROGRAMME 2: HOUSING NEEDS, RESEARCH AND PLANNING
 Sub-programme         Main                                 Additional appropriation                                        Adjusted
                   appropriation   Roll-overs   Unforeseeable      Virement/         Other                  Total        appropriation
                     2008/09                    / unavoidable Reprioritisation adjustments               additional        2008/09
 R thousand                                                                                             appropriation
 1. Administration          5,669                                                                                                 5,669
 2. Needs                   2,000                                                                                                 2,000
 3. Policy                  2,110                                          2,050                                 2,050            4,160
 4. Planning                3,675                                                                                                 3,675
 5. Research                2,050                                        (2,050)                               (2,050)
 Total Payments &
Estimates                 15,504                                                                                                15,504




Economic                         Main                                  Additional appropriation                             Adjusted
classification               appropriation    Roll-overs   Unforeseeable      Virement/         Other       Total        appropriation
                               2008/09                     / unavoidable Reprioritisation adjustments    additional        2008/09
 R thousand                                                                                             appropriation
 Current payments                   13,504                                                                                      13,504
 Compensation of
employees                             9,163                                                                                       9,163
 Goods and services                   4,341                                                                                       4,341
 Interest and rent on land
 Financial transactions in
assets and liabilities
 Transfers and
subsidies to:                        2,000                                                                                       2,000
 Provinces and
municipalities
 Departmental agencies
and accounts
 Universities and
technikons
 Non-profit institutions
 Households                           2,000                                                                                       2,000
 Payments for capital
assets
 Buildings and other fixed
structures
 Machinery and equipment
 Cultivated assets
 Software and other
intangible assets
 Land and subsoil assets
 Total Economic
Classification                      15,504                                                                                      15,504




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                                                                                   Vote 7 - Housing • Adjustment Budget - 2008/09


TABLE 4: PROGRAMME 3: HOUSING DEVELOPMENT, IMPLEMENTATION, PLANNING AND TARGETS
 Sub-programme          Main                                Additional appropriation                                           Adjusted
                   appropriation   Roll-overs   Unforeseeable      Virement/         Other                     Total        appropriation
                      2008/09                   / unavoidable Reprioritisation adjustments                  additional        2008/09
 R thousand                                                                                                appropriation
1.A dministration          64,873                                        15,281                                    15,281           80,154
2. Individual Housing
Subsidies and Support to
Municipalities                       327,000                                                                                       327,000
3. Informal Settlement
Upgrading                          1,798,000                                     (15,000)         74,698           59,698        1,857,698
4. Social and Rental
Intervention                         566,000                                                                                       566,000
5. Rural Intervention                 48,000                                                                                        48,000
 Total Payments &
Estimates                         2,803,873                                          281         74,698           74,979       2,878,852




Economic                          Main                                  Additional appropriation                               Adjusted
classification                appropriation    Roll-overs   Unforeseeable      Virement/         Other         Total        appropriation
                                2008/09                     / unavoidable Reprioritisation adjustments      additional        2008/09
R thousand                                                                                                 appropriation
Current payments                     79,873                                       15,281                          15,281           95,154
 Compensation of
employees                             64,699                                                                                        64,699
 Goods and services                   15,174                                      15,281                           15,281           30,455
Interest and rent on land
 Financial transactions in
assets and liabilities
 Transfers and
subsidies to:                    2,724,000                                      (15,000)         74,698           59,698       2,783,698
 Provinces and
municipalities
 Departmental agencies
and accounts
 Universities and
technikons
 Foreign governments &
international organisations
 Public corporations &
private enterprises
Non-profit institutions
Households                         2,724,000                                     (15,000)         74,698           59,698        2,783,698
 Payments for capital
assets
 Buildings and other fixed
structures
 Machinery and equipment
Cultivated assets
 Software and other
intangible assets
 Land and subsoil assets
 Total Economic
Classification                   2,803,873                                           281         74,698           74,979       2,878,852


                                                                      87
Vote 7 - Housing • Adjustment Budget - 2008/09

TABLE 5:PROGRAMME 4: HOUSING ASSET MANAGEMENT
 Sub-programme               Main                              Additional appropriation                                       Adjusted
                         appropriation  Roll-overs Unforeseeable      Virement/         Other                Total         appropriation
                           2008/09                 / unavoidable Reprioritisation adjustments             additional         2008/09
 R thousand                                                                                              appropriation
1. Administration                15,848                                       (281)                                (281)           15,567
2. Sale and Transfer of
Housing Properties               14,000                                                                                            14,000
3. Devolution of Housing
Properties                       10,000                                                                                            10,000
4. Enhanced Extended
Discount Benefit Scheme           1,000                                                                                             1,000
5. Housing Properties
Maintenance                      27,000                                                                                            27,000
 Total Payments &
Estimates                       67,848                                       (281)                                (281)           67,567




Economic                          Main                                  Additional appropriation                              Adjusted
classification                appropriation    Roll-overs   Unforeseeable      Virement/         Other       Total         appropriation
                                2008/09                     / unavoidable Reprioritisation adjustments    additional         2008/09
 R thousand                                                                                              appropriation
 Current payments                    15,848                                        (281)                          (281)           15,567
 Compensation of
employees                             12,879                                                                                       12,879
 Goods and services                    2,969                                        (281)                         (281)             2,688
 Interest and rent on land
 Financial transactions in
assets and liabilities
 Transfers and
subsidies to:                        52,000                                                                                       52,000
 Provinces and
municipalities
 Departmental agencies
and accounts
 Universities and
technikons
 Foreign governments &
international organisations
 Public corporations &
private enterprises
 Non-profit institutions
 Households                           52,000                                                                                       52,000
 Payments for
capital assets
 Buildings and other fixed
structures
 Machinery and
equipment
 Cultivated assets
 Software and other
intangible assets
 Land and subsoil assets
 Total Economic
Classification                       67,848                                        (281)                          (281)           67,567


                                                                      88
                                                                                  Vote 7 - Housing • Adjustment Budget - 2008/09


Details of adjustments to 2008/09 Estimates of Departmental Expenditure

Virements

TABLE 6: DETAILS ON VIREMENTS PER PROGRAMME AND ECONOMIC CLASSIFICATION
Programme/ Economic classification                R thousand         Motivation
                                              From           To
Programme 2: Housing Needs, Research and        (2,050)        2,050
Planning
Current Payments
Goods and services (Research)                   (2,050)                Funds have been shifted to follow the shifting of Research function to the Policy
                                                                       sub-unit according to the department’s revised structure.
Goods and services (Policy)                                    2,050
Programme 3: Housing Development,             (15,000)       15,281
Implementation, Planning and Targets
Current Payments
Goods and services (Administration (DIP&T))                   15,281 Reallocation of the erroneously allocated funds in households within the programme
                                                                     and unspent funds in Programme 4 goods and services to offset the personnel-related
                                                                     costs.
Transfers and Subsidies
Households (Informal Settlement Upgrading)     (15,000)                Funds were erroneously allocated to the sub-programme: Informal Settlement
                                                                       Upgrading, which should have been in the Administration (DIP&T) sub-programme for
                                                                       the Twenty Prioritised Townships Programme personnel-related costs.
Programme 4: Housing Asset Management            (281)
Current Payments
Goods and Services                                (281)                Unspent funds in this programme have been transferred to Programme 3 to fund the
                                                                       Twenty Prioritised Township Programme personnel-related costs.
Total for vote                                 (17,331)      17,331




Other Adjustments – R85.768 million

Additional funding

Personnel Salary Adjustments
An amount of R11.070 million has been allocated to the department to fund the increase in personnel expenditure
as a result of the improvement of conditions of service adjustment that was made for all public servants during
the financial year. The entire amount has been allocated to the Administration programme to cover the Xhasa
personnel expenditure for the employees that have been absorbed within this programme’s structure since the
closure of the entity with effect from 1st April 2008. The entity was closed down based on department’s decision
to rationalise the number of People Housing Process projects, which were the main responsibility of this entity.

Integrated Housing and Human Settlement Development grant
The allocation of R74.698 million is a result of inflationary adjustments associated with increasing cost of building
materials and subsidy quantum for the 2008/09 financial year. The additional funding will be utilized for the
construction of new infrastructure to assist the department in delivering sustainable housing developments.

The amendment of the subsidy quantum was influenced by increases in input cost factors that have impact on
housing delivery such as material, labour, inflation and interest rates.




                                                               89
Vote 7 - Housing • Adjustment Budget - 2008/09


Expenditure 2007/08 and preliminary expenditure 2008/09

TABLE 7: EXPENDITURE TRENDS
Programme                                                 2007/08                                                   2008/09
                                                    Expenditure Outcome                                      Preliminary expenditure
                                2007/08        April 2007-Sept   April 2007-      Apr 07-Mar 08     2008/09        April 2008-       % change
                                Adjusted             2007        Mar 2008         % of adjusted     Adjusted       Sept 2008       07/08 - 08/09
R thousand                    appropriation                                       appropriation   appropriation                      April-Sept
1. Administration                    157,452            85,777         159,200             101%          225,366         148,960             74%
2. Housing Needs,
Research and Planning                 14,232             5,671          13,485              95%           15,504           8,114             43%
3. Housing Development,
Implementation, Planning
and Targets                        2,746,423           988,508       2,805,260             102%        2,878,852       1,547,808             57%
4. Housing Asset
Management                            90,990            17,542          78,601              86%           67,567          11,261           (36%)
Total Payments and
Estimates                         3,009,097         1,097,498       3,056,546            102%         3,187,289       1,716,143            56%




Economic                        2007/08        April 2007-Sept   April 2007-      Apr 07-Mar 08     2008/09        April 2008-       % change
classification                  Adjusted             2007        Mar 2008         % of adjusted     Adjusted       Sept 2008       07/08 - 08/09
                              appropriation                                       appropriation   appropriation                      April-Sept
R thousand
Current payments                    267,088           113,694        253,986               95%          333,617         191,164            56%
Compensation of
employees                            173,133            74,206         162,589              94%          218,804         115,661             56%
Goods and Services                    93,955            39,441          91,397              97%          114,813          75,503             91%
Interest and rent on land
Financial transactions in
assets and liabilities                                     47                                                                             (100%)
Transfers and
subsidies                         2,733,713          980,070        2,794,380            102%         2,849,672       1,520,601             55%
Provinces and
municipalities
Departmental agencies and
accounts
Universities and technikons
Public corporations &
private enterprises
Non-Profit institutions
Households                         2,733,713           980,070       2,794,380             102%        2,849,672       1,520,601             55%
Payments for capital
assets                                8,296             3,734             8,180           99%             4,000           4,378             17%
Buildings and other fixed
structures
Machinery and equipment                8,296             3,734            8,180             99%            4,000           4,378             17%
Cultivated assets
Software and other
intangible assets
Land and subsoil assets
Total Economic
Classification:
Housing                           3,009,097         1,097,498       3,056,546            102%         3,187,289       1,716,143            56%


                                                                            90
                                                                    Vote 7 - Housing • Adjustment Budget - 2008/09


Selected expenditure trends for the first half of 2008/09

The department has, during the first half of the financial year, spent 56 percent more than the corresponding
period in 2007/08. The expenditure trend is further analysed as follows:

Compensation of employees
Expenditure for the first six months of the financial year amounted to R115.661 million or 53 percent of the total
appropriation of R218.804 million for compensation of employees due to the absorption of Xhasa personnel into
the structure after the closure of this entity.

Goods and services
Expenditure for the first six months of the financial year, which amounted to R75.503 million or 66 percent of the
total appropriation of R114.813 million, includes payment of previous financial year’s invoices.

Transfers and subsidies
Expenditure on households for the first six months of the financial year amounted to R1.521 billion or 53 percent
of the total appropriation of R2.850 billion. The increase in expenditure is due to fast tracking of housing
delivery, as well as the revised payment process that considerably shortens the period for processing payments
to service providers.

Payment for capital assets
The department is already overspending on machinery and equipment at the end of the second quarter due to the
Ziveze program, which was launched in the current financial year. This ground breaking program was launched
in order to encourage customers who have already registered on the waiting list to update their information on
the new demand database to assist in the planning for housing developments in the province and ensure that
houses are allocated to the correct beneficiaries.


Departmental receipts

TABLE 8: RECEIPTS
                                                                                         2008/09
                                                                         Main            Adjusted         Actual receipts
                                                                     Appropriation     Appropriation     April 2008 - Sept
R thousand                                                                                                     2008
Tax receipts
  Casino taxes
  Horse racing taxes
  Liquor licences
  Motor vehicle licences
Sales of goods and services other than capital assets                           330                404                 154
Transfers received
Fines, penalties and forfeits
Interest, dividends and rent on land                                            240                170                  21
Sales of capital assets
Financial transactions in assets and liabilities                               2,640             1,611                262
Total departmental receipts                                                   3,210              2,185                437



The department is embarking on a plan to improve debt collection, and is thus expected to reduce the projected
debt-related revenue such as interest on debt and financial transactions in liabilities. As a result the department
is decreasing its revenue budget from R3.210 million to R2.185 million.




                                                        91
Vote 7 - Housing • Adjustment Budget - 2008/09


Changes to transfers and subsidies, and conditional grants

TABLE 9: SUMMARY OF CHANGES TO TRANSFERS AND SUBSIDIES PER PROGRAMME
Programme                                                        2008/09
                             Main                                 Additional appropriation                                  Adjusted
                         Appropriation    Roll-overs   Unforeseeable/    Virement           Other      Total additional   Appropriation
R thousand                                              unavoidable                      Adjustments    Appropriation
1. Administration               11,974                                                                                           11,974
Corporate Services               11,974                                                                                           11,974
2. Housing Needs,
Research and
Planning                         2,000                                                                                            2,000
Needs                             2,000                                                                                            2,000
3. Housing
Development,
Implementation,
Planning and Targets         2,739,000                                       (15,000)                                        2,724,000
Individual Housing
Subsidies & Support to
Municipalities                  327,000                                                                                          327,000
Informal Settlement
Upgrading                     1,798,000                                       (15,000)                                         1,783,000
Social & Rental
Intervention                    566,000                                                                                          566,000
Rural Intervention               48,000                                                                                           48,000
4. Housing Asset
Management                      52,000                                                                                           52,000
Sale and Transfer of
Housing Properties               14,000                                                                                           14,000
Devolution of Housing
Properties                        1,000                                                                                            1,000
Enhanced Extended
Discount Benefit                 10,000                                                                                           10,000
Housing Properties
Maintenance                      27,000                                                                                          27,000
Total Transfers              2,804,974                                       (15,000)                                         2,789,974


Changes to the transfers and subsidies relate to the reallocation of R15 million from households in the Informal
Settlement Upgrading sub-programme to the Administration sub-programme within the same capital project
(Twenty Prioritised Township Programme).




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                                                                               Vote 7 - Housing • Adjustment Budget - 2008/09

TABLE 10: SUMMARY OF CHANGES TO CONDITIONAL GRANTS
Programme                    Main                                  Additional appropriation                               Adjusted
                         appropriation    Roll-overs   Unforeseeable      Virement/         Other         Total        appropriation
                           2008/09                     / unavoidable Reprioritisation adjustments      additional        2008/09
 R thousand                                                                                           appropriation
1. Administration                11,974                                                                                        11,974
2. Housing Needs,
Research and Planning             2,000                                                                                         2,000
3. Housing Development
Implementation                2,724,000                                                      74,698           74,698        2,798,698
4. Housing Property
Management                       52,000                                                                                        52,000
Total Conditional
grants                       2,789,974                                                      74,698           74,698       2,864,672


Integrated Housing and Human Settlement Development grant
The conditional grant is received from the National Department of Housing to finance the implementation of
national and provincial housing programmes. Specifically, the grant will be utilised to establish and maintain
habitable, stable, and sustainable human settlements in which all citizens will have access to social and economic
amenities, such as community halls, sports and welfare centres.

The grant also funds the progressive eradication of informal settlements on a phased approached to reduce slum
dwellers by formalizing informal settlements by 2009 and eradication of such by 2014.

The additional allocation of R74.698 million has been made available to fund increasing cost of building materials
and subsidy quantum for the current financial year and also for the construction of new infrastructure.




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Vote 7 - Housing • Adjustment Budget - 2008/09


Changes in infrastructure

TABLE 11: SUMMARY OF CHANGES IN INFRASTRUCTURE
                       Main                               Additional appropriation                                 Adjusted
                   appropriation    Roll-overs Unforeseeable     Virement/         Other      Total additional   appropriation
 R thousand          2008/09                   / unavoidable Reprioritisation adjustments      appropriation       2008/09
New Construction             1,652,273                                               47,000            47,000         1,699,273
Rehabilitation/ Upgrading      514,634                                                6,000             6,000           520,634
Maintenance                    413,066                                               21,698            21,698           434,764
Earmarked Programmes           175,000                                                                                  175,000
 Total Infrastructure       2,754,973                                               74,698            74,698         2,829,671

The infrastructure budget has been adjusted by R74.698 million to R2.830 billion. This adjustment has been
made to the Integrated Housing and Human Settlement Development grant to counter the effect of inflation on
the key cost drivers for the department (namely: the building materials cost and the subsidy quantum).

The largest share (R47 million or 63 percent) of this adjustment amount is allocated for the new construction.
The lowest share (R6 million or 7 percent) is allocated for the rehabilitation and upgrading, whilst the balance
(R21.698 million or 30 percent) is allocated for the maintenance.

The West Rand municipality is allocated R25 million or 33 percent of the total adjustment for three projects
under construction in respect of mixed housing development and eradication of informal settlements. Ekurhuleni
Metropolitan Municipality is allocated R19 million or 25 percent of the total adjustment for 17 projects under
construction in respect of mixed housing development and eradication of informal settlements. A share of 5
percent or R3 million is allocated to Sedibeng Municipality for the project-linked housing development.

Alexandra Renewal Project within the City of Johannesburg receives R6 million additional funding for the
rehabilitation and upgrading purposes.

The additional funding for maintenance is allocated for asset management, Thubelisha relocation subsidies,
credit linked individual subsidies and non-credit linked individual subsidies.




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