THE Eastern Cape human settlements department is expected to underspend its housing conditional grant by more than R400-million for the second year running. This was revealed in a cabinet sub-committee meeting last week.
In the last financial year, the department failed to spend R472-million of its housing grant, meant to build low-cost houses. The department confirmed it underspent on the housing conditional grant.
Provincial human settlements spokesman Lwandile Sicwetsha said MEC Helen Sauls-August had noted with concern the expenditure trends at the half year point and had directed the department to put in place a recovery plan to ensure all the money allocated to the province was spent on housing construction. “Our biggest problem has been the focus on rectification.
“Large projects have been through the planning stages over the past months. There are many commitments which have not yet been paid off and we expect the projected figure of expenditure to change at the end of the financial year,” Sicwetsha said.
The report seen by the Daily Dispatch shows the department had thus far spent 60% of its allocated R1.3-billion housing grant by end of January , two months before the end of the financial year.
The report shows only 4189 houses were completed by the department since April 2012.
A source close to the department said due to underspending the department had rejected the last financial tranche for the housing grant, citing incapacity.
“They wanted to reject funding for houses but we refused,” the source said.
Finance MEC Phumulo Masualle last year told the legislature the provincial government was again expected to underspend on capital and grant funding by more than R1-billion in the 2012-2013 financial year. Masualle blamed poor planning and poor project management.
During the 2011-12 financial year, the province failed to spend more than R902-million of its conditional grants.
Education was expected to underspend by R430-million on the school nutrition grant alone. Roads and public works are expected to underspend by R341-million and economic affairs by R173-million.
Last year the human settlement portfolio committee members lashed out at the MEC for the non- expenditure.
In a statement this week, Human Settlements Minister Tokyo Sexwale warned provinces who underperformed in the 2012-13 financial year risked having a portion of their budgets taken away.
“I am concerned that some provinces fall into this category as the financial year draws to a close in March,” Sexwale said.
“While recognising some genuine difficulties confronting provinces such as the absence of bulk infrastructure due to inadequate capital expenditure, we can’t tolerate flimsy excuses that stymie delivery to communities.”
He also attributed the poor performance to the hiring of questionable contractors.
“This year we are determined to see the last of this under-expenditure while our people remain stuck on growing housing lists.”
Democratic Alliance MPL Dacre Haddon blamed the department’s incapacity with supply chain procurement for the failure to spend its budget.
“There is not enough financial expertise within the department to manage construction stages timeously,” Haddon said. — firstname.lastname@example.org