Parliamentary Portfolio Committee 02/09/2011

Parliamentary Portfolio Committee 02/09/2011

Social Housing Act and SHRAAccreditation ReportDraft RegulationsProcess

Structure of Presentation

2Parliamentary Portfolio Committee

Social Housing Act & SHRA


Context


New Legislation Existing Legislation Approvals

Social Housing Act

Housing Act

Rental Act

Social Housing Policy

Housing Code

Parliament

Minister of Human Settlements

SHRA Council

Regulations

Rules



Social Housing Act & SHRA


Social Housing Act 16 of 2008, promulgated in December 2008 came into operation on 1st September 2009. Introduced 3 new instruments:-

Legislative & regulatory Instruments

Social Housing Act = framework legislation

Social Housing Regulatory Authority (SHRA)

Defined sector roles & players

Financial instruments

Restructuring capital grants for social housing

Capacity building grants

Tax incentives

Risk mitigation measures

Capacity building instrumentsFocus on capacity to run viable projects1. Capacity to develop and implement projects 2. Effective interventions3. Support to gear up SHI’s

The mandate of the Social Housing Regulatory Authority (SHRA) is derived from the Social Housing Act 16 of 2008

CHAPTER 3SOCIAL HOUSING REGULATORY AUTHORITY

Establishment of Social Housing Regulatory Authority7. (1) There is hereby established a juristic person to be known as the Social

Housing Regulatory Authority.• (2) The Public Finance Management Act applies to the Social Housing

Regulatory Authority.• (3) The Social Housing Regulatory Authority is accountable to the Minister

and Parliament.The Act further sets out the composition of SHRA in Section 8 and the functions of SHRA in Section 11

SHRA


SHRA


Parliamentary Portfolio Committee 10

SHRA

SHRA “reason for being”…. Restructuring

Social, Economic and Spatial Re-structuring


SHRA

SHRA Business Model

Accredited Service Providers

SHRA Functional Structure

12

Council

Sub-Committee

Sub-Committee

Parliamentary Portfolio Committee


SHRA

SHRA High-level Process

Application for Accreditation

Yes

No

Application to RCGProgramme

CapacitationProgramme

Yes

No

Successful

RCG Programme

Regulation (whether accredited or not)


SHRA Progress

Investment : 2342 units approved (target of 1705) and 2nd call for proposals still to come estimate further 1500 units. Huge interest from private sector.Capacitation grants recommended. Engaging service providers for proposals/quotations.Accreditation : 2011/12 cycle complete. Preparing for 2012/13 cycle. See report later.Draft Regulations ready for presentation to Parliament and for gazetting (noting Parliament’s comments)Monitoring and Evaluation on accredited SHI’s started


3 Audit dimensions Fundamentals of internal control

Financial Performance objectives

Compliance with laws

and regulations

Assessment

Leadership

• Provide effective leadership based on a culture of honesty, ethical business practices and good governance, protecting and enhancing the best interests of the entity

• Exercise oversight responsibility regarding financial and performance reporting and compliance and related internal controls

• Implement effective HR management to ensure that adequate and sufficiently skilled resources are in place and that performance is monitored

• Establish and communicate policies and procedures to enable and support understanding and execution of internal control objectives, processes, and responsibilities

• Develop and monitor the implementation of action plans to address internal control deficiencies

• Establish an IT governance framework that supports and enables the business, delivers value and improves performance

N/A N/A N/A

Financial and performance management

• Implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting

• Implement controls over daily and monthly processing and reconciling of transactions

• Prepare regular, accurate and complete financial and performance reports that are supported and evidenced by reliable information

• Review and monitor compliance with applicable laws and regulations

• Design and implement formal controls over IT systems to ensure the reliability of the systems and the availability, accuracy and protection of information

N/A N/A N/A

Governance

• Implement appropriate risk management activities to ensure that regular risk assessments, including consideration of IT risks and fraud prevention, are conducted and that a risk strategy to address the risks is developed and monitored

• Ensure that there is an adequately resourced and functioning internal audit unit that identifies internal control deficiencies and recommends corrective action effectively

• Ensure that the audit committee promotes accountability and service delivery through evaluating and monitoring responses to risks and providing oversight over the effectiveness of the internal control environment including financial and performance reporting and compliance with laws and regulations

AG Dashboard

Accreditation


1. All institutions having undertaken housing developments with the benefit of an institutional subsidy and

2. who carries on the business of providing rental or co-operative housing options for low to medium income household on an affordable basis.

SOCIAL HOUSING ACT


1. Social Housing Institutions2. Municipal Owned Social Housing Institutions3. Co- Operatives

CATEGORIES OF INSTITUTIONS


ACCREDITATION PROCESS

19

APPLICATION

ASSESSMENT

ACCREDITATION

COMPLIANCE MONITORING


1. Accredited SHI’s2. Declined SHI’s3. Non Applicants4. List from the Department

20

ACCREDITATION PROGRESS REPORT


SOCIAL HOUSING INSTITUTION STATUS

1. COMMUNICARE F/A

2. MADULAMOHO F/A

3. JHC F/A

4. CTCHC C/A

5. FIRST METRO C/A

6. GOVEN MBEKI C/A

7. MSUNDUZI C/A

8. SOHCO A.H C/A

9. HAEL C/A

10. YEAST C/A

1. ACCREDITED SHI’s


11. IMIZI C/A

12. FRESHCO C/A

13. OWN HAVEN C/A

14. SOHCO SPI C/A

15. EHI C/A

16. MOKO C/A

17. STHA C/A

18. JOSCHO C/A

1. ACCREDITED SHI’s Cont…

10 Applications were declined, list may have to be revisited

2. DECLINED

23


1. Bendile Housing Declined

2. Ekurhuleni Development Company (Internal Review)

Declined

3. Grakol Declined

4. Indiza Terra Housing Declined

5. King William’s Town Housing Association

Declined

6. Magret Property Declined

7. Maverick Declined

8. NN Architects Declined

9. SA Solid Estates Declined

10. Sol Plaatjie Housing DeclinedParliamentary Portfolio Committee

Application for Internal Review received

Council has 90 days within which to re-affirm or substitute decision

Decision Affirmed

SHI has 180 days to institute judicial review of

the decision

SHI makes successful application

Accreditation RestoredManagement reinstated

Decision Substituted

Application Dismissed

Commence with Court Process to

recover Stock

INTERNAL REVIEW (PAJA)Section 11(a)

Compliance Monitoring 24Parliamentary Portfolio Committee

12 Institutions identified as non accredited were:

3. NON ACCREDITED INSTITUTIONS

25


1. Abahlali Non Accredited

2. Affordable Housing Company Non Accredited

3. Badiri Housing Association Non Accredited

4. Housing Company Tshwane Non Accredited

5. Housing Association Blaauwberg Non Accredited

6. Mbombela Housing Association Non Accredited

7. Ethekwini Housing Association Non Accredited

8. Polokwane Housing Association Non Accredited

9. Reahola Housing Association Non Accredited

10. Shayamoya Housing Association Non Accredited

11. Reatlehile Housing Association Non Accredited

12. Vusani Amadolobha Housing Association Non AccreditedParliamentary Portfolio Committee

A list of 378 projects received from DoHS. SHRA is in the process of obtaining and collating information received from the Provinces to identify institutions administering those projects.

4. LIST FROM THE DEPARTMENT


No Application ReceivedIntervention:•Forensic Audit•Suspension of Member•Transfer of Housing StockApplication for

Accreditation received

Provisional Accreditation

Assessments & Conditions (90 days)

Conditions metFull Accreditation Certificate Issued

Compliance Monitoring

Conditions not met:1.Withdrawal of Prov. Accr2.Institutional Intervention Fund3.Intervention•Forensic Audit•Suspension of Chair & Management•Transfer of Housing Stock

Notice of Non Compliance i.t.o Section

13(9)(20 Days)

WORK PLAN TO ACCREDIT THE NON ACCREDITED SHI’s


Trigger Maladministration /Non - Compliance

Institutional InterventionProgramme

SHRA prepares a report

Notice to Intervene and propose Remedial Action SHI takes proposed

Remedial Action

No improvement following remedial action

Remedial Action Yield Results

SHI Regularised

SHI resist proposed Remedial Action

Forensic Investigation

Public Accountant / Auditor Appointed

Internal Review 60 Days before we proceed

Apply to Court for suspension of SHI’s

Management & Appointment of Administrator

Forensic Report Positive ReportSHI Regularised

Buy out Process

Consultation with Debt Funders

INTERVENTION BY SHRA & FORECLOSURE PROCESSES


Draft Regulations


INTRODUCTION

Section 19 of the Social Housing Act (“the Act”) determines that the Minister, by notice in the Gazette and after consultation with Parliament:

Must make regulations prescribing:- Any matter required to be prescribed by regulation under the Act;- A code of conduct, the investment criteria and the qualifying

criteria for social housing institutions;May make regulation:

- in respect of the required provisions of the agreements the SHRA, other delivery agents, provincial authorities and the National Housing Finance Corporation.

- Any other ancillary or administrative matter that is necessary to prescribe for the proper implementation or administration of the Act

The regulations may provide for offences in cases of contravention thereof.


Hierarchy of Legislation


Hierarchy of Legislation


The SH legislative framework

Founding documents

Sub ordinate legislation

Primary legislation

Policy

Guidelines

Act

Regulations

Rules and notices

Instructions, directives, circulars, compliance declaration, guidelines

THE DRAFT REGULATIONS

• The draft regulations development began in 2010 and were published for public comment on 10 September 2010 under Government Gazette No 33518

• Interested parties were invited to comment no later than 30 September 2010 and comments were received and checked for relevance.

• The ultimate goal of the draft regulations is to complement the Social Housing Act in ensuring an effective and proactive regulatory authority for social housing institutions and other delivery agents and to promote growth, stability, good governance and confidence in the Social housing Sector.

33

BACKGROUND


APPLICATION OF THE REGULATIONS

• In terms of the draft regulations, a social housing institution should be not for profit. It should also be able to demonstrate good governance, financial sustainability and effective service delivery.

• The main objective of the social housing institution should be the provision of rental or co-operative housing for low to medium income households.


35

Structure of Regulations


THE DRAFT REGULATIONS PROVIDES FOR

1. Applications for accreditation of social housing institutions ( Regulation 2);2. Qualifying criteria for accreditation

(Regulation 3);3. Provisional accreditation of social housing

institutions ( Regulation 4);4. A register of social housing institutions (Regulation 5);5. Reporting requirement ( Regulation 6)


THE DRAFT REGULATIONS PROVIDES FOR CONT…

6. Withdrawal of accreditation ( Regulation 7);7. Compliance monitoring ( Regulation 9);8. Intervention on cases of non compliance and

maladministration (Regulation 10);9. Internal review ( Regulations 11);10. Transfer of social housing stock

( Regulation 12);11. Disposal of publicly funded social housing

stock ( Regulation 13);


THE DRAFT REGULATIONS PROVIDES FOR CONT…

12. Approvals ( Regulation 15 & 16)13. Code of Conduct ( Regulation 17);14. Investment Criteria ( Regulation 21);15. The powers of the SHRA in respect of

entry, enquiry document seizure and inspection ( Regulation 32);

16. Agreements with other delivery agents, national and provincial government and the NHFC ( Regulation 33 & 34);

17.Offences and penalties (Regulation 36)


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Parliamentary Portfolio Committee 02/09/2011

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