By 
The Free State Department of Human Settlements wishes to dismiss reports that it lost R50 million due to its failure to spend allocated funds from National Department of Human Settlements. The report came as a result of a sitting of the Parliament’s Portfolio Committee on Human Settlements to the province, where it is currently conducting an oversight visit until the 28th of March 2025.
The Spokesperson for the department, Ms Zimasa Mbewu explained that the stopping and reallocation of a portion of the Human Settlements Development Grant (HSDG) is part of a broader process that is applied across provinces and is not unique to the Free State.
She said similar reallocations have affected provinces such as Gauteng and the Western Cape and Free State being the least affected. The process is also part of national adjustments informed by expenditure performance and planning projections.
“The Department had submitted a realistic cash flow forecast, based on actual project timelines and anticipated construction milestones. It only requested 47 percent of its total HSDG allocation by the end of the second quarter of the 2024/25 financial year, consistent with this plan.
The standard expectation of 50% expenditure is based on a uniform quarterly disbursement model however this model does not reflect the reality of infrastructure and housing project implementation, where there is slower spending in the early stages and an acceleration in later phases when construction activities increase. This is often experienced in the built environment,” explained Mbewu.
According to Mbewu, the grant adjustment, though well-intended, has unfortunately resulted in some short-term challenges, such as:
· Cash flow constraints on ongoing and pipeline projects,
· Delays in fulfilling obligations to service providers,
· And unintended perceptions about the province’s performance.
“Despite these challenges, the department is pleased to confirm that it has received an additional R50 million through the Informal Settlements Upgrading Partnership Grant (ISUPG), which was reallocated from underperforming provinces. The reallocation represents a significant opportunity for the province to scale up impact where the need is greatest.
The department acknowledges the importance of oversight by national as well as setting performance-driven reallocations. We are committed to the accelerated delivery of sustainable human settlements and will continue to work collaboratively with all stakeholders in order to achieve our shared goal of ensuring decent, adequate housing for all,” concluded Zimasa Mbewu.
