Land Care Conditional Grants: 4th quarter 2010 & 1st quarter 2011 performance: National Treasury and provincial Department of Agriculture briefings

Meeting report

Land Care Conditional Grants: Quarterly performance updates by provinces
Chairperson’s opening remarks
The Chairperson noted that National Treasury would firstly be asked to give an executive summary of the purpose of the Land Care conditional grant, and to indicate how provinces performed on this grant in the quarters under review. The Chairperson indicated that provinces would be asked to comment on the National Treasury submission, but, since that submission was based on the reports submitted by provinces, he was not expecting there to be any differences, although in some instances in the past the Committee had heard of some divergences, and had received explanations for this.

National Treasury briefing
Ms Ogalaletseng Gaarekwe, Chief Director, National Treasury, said the Land Care Conditional Grant (the Grant) sought to conserve natural resources through community participatory programmes. She said cooperatives were formed to deal with the programme and that job opportunities were created through Extended Public Works Programmes (EPWP). The Grant also ensured an enabling environment for food security and poverty alleviation.

Ms Gaarekwe outlined the provincial spending in the first quarter of 2011, saying that in this quarter only  5.5% was spent. Gauteng had not spent a single cent in the first quarter whilst the Eastern Cape (EC) and KwaZulu Natal (KZN) reported considerable declines in expenditure. The Northern Cape spent about 8.1% in the first quarter, and had improved by 1.72% more than the previous financial year.

Ms Gaarekwe said challenges around non-expenditure in the first quarter included delays in procurement. The EC, Free State (FS) and North West (NW) province reported no jobs created against the targets, and also reported that no land users benefitted from their programmes. Five provinces, namely Western Cape (WC), FS, Gauteng, NW and Northern Cape reported that no hectares of cultivated land were rehabilitated or protected. National Treasury noted the improvement in spending by the end of July, when the figures had moved from 5.5% to 14.8%. She said only FS, WC and KZN had spent 30% of the grant to date, as they should. The national Department of Agriculture, Forestry and Fisheries had also expressed concern at the late submission of performance reports by provinces.

Mr B Mashile (ANC, North West) wanted to know from National Treasury whether any attempts were made to find out reasons for zero expenditure by Gauteng. He asked if Gauteng had problems accessing the Land Care grant.

Ms Gaarekwe said that National Treasury had only communicated with provincial Treasuries,  as the mandate to verify information around spending resided with those offices. She repeated that the Grant was administered by the National Department of Agriculture, Forestry and Fisheries, who was responsible for monitoring the implementation. National Treasury believed it was up to that Department to clarify and find out the reasons for the zero expenditure by a province.

Ms Julinda Gantana, Chief Director, National Treasury, said it would be better if the Gauteng Provincial Department clarified the matter, as numbers differed in the reports that the Department had submitted. As matter of routine National Treasury had written to the national Department when looking at the first quarter spending, because there was a discrepancy in the reports that were submitted.

The Chairperson said Gauteng would have to answer this question when it presented its report.

Western Cape Provincial Department of Agriculture presentation
Mr Gerrit van Rensburg, MEC for Agriculture, Western Cape, told the Committee that his Department had spent all its Land Care grant allocation for the past three financial years. He agreed there were no transfers made in that period, but there was no reason to believe that the Department would not spend its 2011/12 allocation. Spending was slightly behind in the 2010/11 third quarter, due to Junior Land Care projects that could not be conducted due to school programme changes. Heavy rains led to the discontinuation of projects in the clearing of alien species in the third quarter, but spending picked up again in the fourth quarter.

Mr Van Rensburg said under-spending in the first quarter of the current financial year was due to the cancellation of the Kleinrivier Environmental and Employment Project (KEEP). The cancellation followed the resignation of the project leader, and the maternity leave of the auxiliary officer. He said funds would be shifted to the Kleinswater project, as it had the necessary capacity to spend.

Ms Joyene Isaacs, Head of Department, WC Provincial Department of Agriculture, said the Department undertook 32 projects in the previous financial year, and all the targets were met. For the current financial year the Department had planned 26 project, of which 12 were started and had exceeded planned outputs. She said an amount of R761 000 had already been spent. All goals for the projects were expected to be met except for KEEP, but funds would be transferred to another project.

Ms Isaacs said the Department had taken note of the National Treasury’s concern about the number of hectares of land not being rehabilitated, but that formed part of the province’s second quarter spending. The Department had not counted the project but it had been planned, and would be reported on in the second quarter.

The Chairperson complained that the WC report was very thin on details, as it did not specify the projects undertaken. The Committee would have expected the WC to do what other provinces had done, and to provide details of the project targets and their locations. He said the Committee wanted to know where the projects were happening, so that they could be visited as part of the Committee’s oversight. The Committee was interested in the service that came out of a particular project, and in testing whether there was value for money.

Ms Isaacs provided the Committee with a detailed report called ‘WC Agriculture Hearing on Conditional Grant’, which contained the exact locations of the projects and quarterly targets, and gave details on all projects. She noted that the Department had sent this to the Committee. She invited the Committee to choose any project and the Department could give an update and details.  

Ms Isaacs explained that much of the work being done by this Department involved alien clearing in catchment areas, because this secured water for the farmers down-stream. She said the Department had also incorporated conservation into the programme. Often people felt Land Care was a luxury, in fact, it was a fundamental.

Ms Isaacs said the Department had a number of Junior Land Care projects, as well as undertaking alien species clearing at Klein Karoo and Berg River. The Department worked with the schools and the Department of Basic Education. She said one of the Junior Land Care projects looked at carbon bio-training. She said the Department would have less of a battle to get people to care for the land if they were able to be taught about the basic concepts at an early age. One of the issues with which the Department struggled was raising awareness in farm-workers about opportunities. She said Land Care was fitted into the curriculum, with a view to strengthening long-term sustainability in the province.

Ms Isaacs said the Department also contributed about R3 million of its equitable share to the programme, but that this conditional Grant formed only one of the matters the Department dealt with in the province.  In the current financial year the Department had included river works, alien clearing and the Junior Land Care. She said the Department had also started stabilising those areas that could cause problems if too much rain fell. Land Care spoke to pro-active mitigation. She said if rivers were not cleaned, and rainfall was too high, then floods could easily occur. She noted that river cleaning had started in Laingsberg. She said the Department had also started working with nature groups like Cape Nature.

Discussion
Mr M Makhubela (Cope, Limpopo) wanted to know about the cancellation of KEEP. He said he understood the problem with resignation and maternity leave of senior officials, but asked what the Department had done about that situation. He also asked what the Department would do about its Junior Land Care, especially if schools were continually unavailable owing to other programmes.

Mr R Lees (DA, KZN,) asked if the schools targeted for Junior Land Care were in rural areas, in line with the objectives of the conditional grant.

Mr B Mashile (ANC, North West) said most projects in the previous year did not fare well. He therefore asked the Department to give this Committee an indication as to whether it had problems in mobilising the youth. He also wanted to know if it would not be wiser for the Department to start projects only when it had managed to source the funding. He observed that the WC always provided little information to the Committee because it tended to stick very closely to answering the specific questions that were mentioned on the invitation, and the Committee ended up confused by the presentations. He requested that the Department should provide more information so as to assist the Committee in understanding its presentation.

Ms Isaacs said KEEP was not actually discontinued, but at the moment the stakeholders were unable to proceed with it. The Department was not saying that it would not fund the project in future, but at the current time it was diverting funds to projects that could use these funds, until KEEP managed to sort out its difficulties. There were strict time frames attached to conditional grants. The school programmes would continue as the Department had met with the Department of Basic Education to get the project going. She said 95% of the schools the Department had targeted were in rural areas. The Department did not any problems in recruiting young people but it needed to look into the Junior Land Care programme to see how it could get more youth involved. She said some projects in the WC were planned for the last quarters of a financial year, specifically because the province had wet weather in the second quarter.

Mr Mashile asked if the Department delegated any work and projects to non government organisations (NGOs) or municipalities. If that happened, then he asked how the expenditure was managed and reported.

Mr Flory Huysamer, Chief Financial Officer, WC Provincial Department of Agriculture, replied that the Department did not do transfers but used local unemployed people. He said the Department had an implementing agency that provided details of people who worked on the projects, and they would, at the end of the month, be paid directly. The Department never did transfers to any local authority or institution, but preferred to make the payments itself. He said this was why this presentation did not reflect pending work, as was mostly the case with transfer situations.

MEC Van Rensburg extended an invitation to the Committee to visit any of the projects in the province. He noted that it would be useful to get more funding, as there was much work to be done.

Gauteng Provincial Department of Agriculturepresentation
Ms Nandi Mayathula-Khoza, Gauteng MEC for Agriculture, told the Committee that the grant was administered by the Sustainable Resource Management Unit within the provincial Department. She said the Grant sought to create jobs for vulnerable groups. She outlined other objectives as eradicating alien species, developing skills, rehabilitating wetlands, attending to degradation of soil, managing fire breaks and cleaning the rivers.

Ms Mayathula-Khoza said the Department had planned to fund two projects from the conditional grant for the previous financial year. The two projects – Bambamanzi and Wongamanzi – were located in Mogale City on the West Rand and the Greater Johannesburg area. The Department had planned to spend R3.8 million on both projects and create 100 job opportunities. She said both projects focused on clearing alien plants and would each cover 500 hectares of land.

Ms Mayathula-Khoza said for the current financial year the Department planned three projects: Wongamanzi, Londindalo Alien Plant Removal (in Lesedi Municipality) and the Mogale City Local Municipality project that would rehabilitate a wetland. She said R1.5 million would be spent on the latter projects and 25 job opportunities would be created. She added that in total, 107 job opportunities would be created and R4 million would be spent on these projects.

Ms Mayathula-Khoza said she agreed with National Treasury that there had been 0% expenditure in the first quarter of 2011/12. She had raised that issue with the Department, who had explained that the Sustainable Resource Management (SRM) Unit had been slow in signing the contract with the service providers. She said the service providers were Rand Water and the Municipalities she had mentioned (Mogale, Johannesburg and Lesedi). The delay in finalising this contract between the department and the implementing agency meant that there had in fact been no implementation in the first  quarter. Work only started in July, when the funds had been transferred to the service providers.

Ms Mayathula-Khoza said she had spoken to the Unit, to impress upon it that it needed in future to plan and finalise the contracts before the start of the financial year in which the contracts must start running, so that at the start of that financial year there could be actual implementation, rather than continuation of planning. The Head of Department was focusing on this matter so that the problems were not likely to recur in the following years. However, the Department had met employment and actual work targets as set out in the plan for 2010/11.

Ms Mayathula-Khoza said work for the 1^st quarter was under way, except that no funds had been transferred. She said 47% of the grant had been spent at the end of August, as the service providers had been paid. The Department was using the SRM unit to implement the project and there was capacity to monitor and evaluate on a monthly basis. She said the Department hoped to increase that capacity to supplement the work done by the Unit. Other than the challenges during the first quarter, there was no further challenge up to the end of August 2011, and she said that this Department had met all the requirements for reporting by the end of August.

Ms Mayathula-Khoza said the grant was, annually, usually fully spent but the Unit indicated to the Department that there was a need for additional allocation. She said that currently there were no Land Care programmes supporting farmers, especially on areas of sustainable resource management. The Department used part of the equitable share to carry other agricultural programmes. She said although she did not have exact information on this, she could forward it to the Committee if requested.

Discussion
Mr Lees quipped that he would be interested to know what “land care” meant in Gauteng, which seemed only to have problems with traffic and hijackings. Given that perception, and the fact that there were very few large tracts of land in the province, he wondered if there was not any scope for this grant rather to be used to sort out the problems with abandoned and derelict mines, and asked if that should not rather be seen as the priority in Gauteng.

Mr C De Beer (ANC, Northern Cape) asked for clarity on the figure of 19% that appeared on Gauteng’s presentation in respect of expenditure in the first quarter.

Mr Makhubela asked for the breakdown of vulnerable groups (women, youth and the disabled) working in the projects. He said that the grant was not intended for equity, but he understood government’s stipulations around equity.

Mr Mashile wanted to know if Gauteng had the scope of work for the funding. He said removal of alien plants was part of the water programme, and that was well funded. He asked how exactly this conditional Grant was related to that programme, especially given that it had been moved to the Environmental Affairs department. It would also be informative if the Department could give an estimate of the number of hectares that were rehabilitated on wetlands. He suggested that the Department should have given an indication of how the money was spent, even if it had been used to pay third parties. When the Department received invoices, he thought that they should have given an indication of expenditure to National or Provincial Treasury. Their own service providers had incurred debt because transfers had not been made, and the Department had not given proof on expenditure.

The Chairperson asked for an explanation on the fluctuation of the cost on the Bambamanzi project for the West Rand. In the previous financial year, the Department appeared to have spent more, had created 50 job opportunities, and had covered 500 hectares. However, in this year it appeared that less funding was required to do the same amount of work. He wanted to know the exact reasons for non-expenditure in the first quarter, and said that if there were no serious challenges, then there was no reason why there should not have been spending. He also asked if the number of jobs that had been created had remained the same, or whether another 50 people had been employed in addition to those jobs already created. He also wanted an explanation for the arrangement with the service providers, where they would pay and claim back later from the Department. He also enquired what mechanisms were in place to verify the kind of work done. He reminded the Department that the Committee was not only interested in hearing whether the money had been spent, but in hearing of the actual work being done.

Ms Mayathula-Khoza replied that the reference to the 19% on the Department’s presentation was money spent by the service providers. She said that the figure of 47% represented money transferred by the Department to those service providers at the end of August 2011. The Department agreed that in the 1^st quarter, there had been zero expenditure from the Department, although the service providers had spent 19%. The main reasons for the non-expenditure were poor administrative and internal planning processes.

Ms Mayathula-Khoza said that the question of the abandoned and derelict mines was challenging, and the Gauteng Executive Council had agreed to give the work of overseeing abandoned mines to the Gauteng Department of Local Government and Housing. She said her Department worked closely with that latter Department, and they had visited the areas where acid mine drainage was a major issue. The challenges were indeed large, but the Province had formulated a strategy to deal with them. Her Department was particularly concerned with the impact of acid mine drainage on wetlands, agriculture and the environment. She said the funds used on acid mine drainage came from the Gauteng Provincial Government and not the Land Care Conditional Grant.

Ms Mayathula-Khoza said job creation was seen as vital for the Department and the Land Care Grant was seen also as contributing towards that. She said the overall employment benefitted 30% of women, 40% of youth and 2% of disabled people. The Department had a challenge recruiting young people into the projects. She said her Department had quite a broad scope of work, in the areas of alien plant clearing and rehabilitation of wetlands. The Department had struggled to spend at the beginning of the financial year, but had improved by the end of August. She reiterated that Gauteng had been spending 100% of the Grant in every year to date.

Ms Evenly Fisher, Chief Financial Officer, Gauteng Provincial Department of Agriculture, said the Department agreed with National Treasury that there was 0% expenditure in quarter one. She said the Department did transfers to implementing agencies, who in turn made payments to the service providers, in line with the actual work done. Implementing institutions reported on a monthly basis on their actual expenditure on the project, in line with the reporting requirements. She said there were monthly and quarterly reports on the work done, but also project leaders also monitored the projects on a regular basis.

Mr Mashile voiced unhappiness with the fact that this Department seemed to make transfers to the service providers on the level of a service agreement. He said he had serious problems with this, and that there was a serious disjuncture. He recommended that the Treasury should visit and have engagements with this Department. He said the expenditure did not talk to actual service delivery, but was merely money transferred to another person who rendered the service. That was in all likelihood why this Department could keep reporting 100% expenditure.

Mr Lees said he was confused about the job descriptions. He asked for clarity and for further particulars of the 50 jobs created. He wanted to know if these were sustainable.

The Chairperson also sought further clarity on an earlier question asked about balancing the expenditure and the work done. He took the MEC to task about a misleading page in the report about service providers. He said that it would be correct for this Department to give its own report, and not that of the service providers. The issue of transfers needed to be taken up with Treasury, and at the Budget Councils on the division of revenue. He said a “transfer” was regarded as “expenditure” by the National Treasury. However, this Committee was interested in hearing about the actual work that was done as a result of the money being paid. The 100% expenditure was the reason why this province always got an increase when the conditional grants were allocated. He said it was not fair to other provinces, because Gauteng simply transferred the money elsewhere, without actually performing the work itself, but the 100% expenditure was recorded on the books. The Committee was not interested in that, but wanted to go beyond the mere transfer to examine the projects themselves.

Ms Fisher conceded that some of the statistics regarding the number of people employed this financial year were incorrect, and in fact amounted to rotating the 50 job opportunities created by the projects.

The Chairperson said the Committee did not want to force her to accept its point of view, but merely wanted to know the true state of affairs in Gauteng.

Ms Mayathula-Khoza said the Department was unable to report on the exact state of affairs, in the absence of the project manager. However, the Department would return and get the correct information, and would then forward it to the Committee. She said she would welcome a visit by Treasury and the Committee, and the Department was willing to look at different approaches as suggested.

Limpopo Provincial Department of Agriculture presentation
Ms Letsatsi Duba, Limpopo MEC for Agriculture, introduced her presentation by claiming that her province was at risk. She said the areas most affected were agricultural lands. She identified soil erosion and land degradation as the main contributors, further exacerbated by poverty and the homeland system. She said there were further challenges as Limpopo still depended on wood for energy. She extended an invitation to the Members to experience these conditions at first hand.

Mr M Manya, Acting Head of Department, Limpopo Provincial Department of Agriculture, expanded upon the risks outlined by the MEC, saying that the risk was contributed to by factors that included climate change, poor practices in grazing land, and competition for the wood based products. He said that the emphasis of his Department was on sound resource conservation measures and awareness ethics. The Department wanted to emphasise the ownership of resources by the communities. Of course, the Department provided capacity building and training in natural resource management. He said the main focus of the Land Care Grant would be to achieve fencing of grazing land and the control of alien plants and bush encroachment.

Mr Manya said his Department spent all its funds in the last financial year, but had been let down by some suppliers. The Department had, in those cases, taken steps to try to reprioritise, because of the need. He said some of the funds had been allocated to alien plant removal. Some of these projects were continuing. He said the main thrust of Land Care was to create adequate awareness and ownership. The Department trained the community and would give a portion of what was needed, for a period of three years.

Mr Manya said the Department still fell short of its plans, despite the improvement on expenditure. He said the drop in expenditure could be attributed to the type of material used for control of invader plants. In the previous year the Department had purchased the material from a central supplier.

Mr Manya said the monitoring of the project was done by a Director, and a Land Care Coordinator. He said the Department held monthly reporting meetings with the project leaders. The Department had submitted all the required reports to the National Department of Agriculture. He said some of the projects were done together with the Department of Economic Development and the nearby mines.

Discussion
Mr Lees asked what the Department was intending to do over three months on 10 000 hectares of land, saying that the figures in the presentation sounded impossible to achieve. If indeed Limpopo succeeded in clearing and fencing this territory, then other provinces had to follow that example. He also asked for more details about the “failure” of suppliers, asking whether this referred to suppliers who should not have received the contracts, or whether it referred to suppliers who had disappeared with the money.

Mr Mashile said the numbers had to be examined carefully. He wanted to know what corrective actions the Department was contemplating on the under-spending in the first quarter. He also said the Committee should request reasons for the “failed” suppliers.

Mr B Zulu (ANC) wanted to know the number of women involved in the projects.

Mr Makhubela wanted to know the criteria used to establish a project at a particular area.

Mr De Beer sought clarity on the two documents made available by Limpopo.

Mr Manya said the two documents were annual and quarterly reports. He said women and youth were involved in the programme and that although recruiting young people was a challenge, they were nevertheless accommodated on the Junior Land Care. The challenge of suppliers in Limpopo lay with getting goods from Gauteng. The Department did not foresee an under-spending on the conditional grant in this financial year. He said 90% of projects were carried over from the previous year. He admitted the Department needed to improve on procurement services. He said the Department paid community members directly and was trying to inculcate a culture of sustainable use of natural resources.

Mr Mashile asked the representatives from the Limpopo Provincial Department to decide exactly what the Department wanted to achieve with regard to supply chain and emerging markets. He said the Department could not expect to get expert service from a non-expert service provider. If there was non-expenditure, then this amounted to denying services to people, and that did not assist the service delivery. If the Department appointed people who were not capable, then the Department should make sure that it assisted those service providers.

Mr Lees said performance indicators in the presentation were not tying up to the project.

Mr Manya apologised for errors that were pointed out in the report. He said performance indicators were tested nationally.

Mr Dethy Masehla, Chief Financial Officer, Limpopo Department of Agriculture, said the Department noted very late in the previous year that its database listed a number of suppliers who were incapable of providing the service they were registered to offer. He said that at the time these suppliers were registered, the Department did not have the capacity to actually verify their details. He agreed that the Department had to improve on this and this was the reason why it had invited the new service providers. He said the Department had a challenge in terms of capacity. While the Department tried to empower the emerging suppliers, it also allowed the service providers to register in a number of commodities in the database.

Mr Mashile said people in Limpopo should feel that they were part of the programme. He said the Committee was not dictating to the Department how it should operate, but was cautioning it that it should implement in a manner that would not lead to disobedience.

Mr Manya said the Department had taken note of the concerns of Members. He said districts were allowed to make plans, and the Department selected from those, in terms of who had the most need.

Ms Duba said that failure of suppliers was a challenge throughout the country. She agreed that these suppliers compromised service delivery. She said some way had to be found to assist these suppliers rather than simply banning them from operating in the system. In Limpopo, one of the criteria used to allocate projects was an assessment of the needs of a district and the Department would look at critical areas before intervening. The Department ideally wished to do this in all districts, but shortage of resources prevented it from doing so. She said the needs were far bigger in Limpopo than were covered by the amount the Department received.

The Chairperson agreed and said the Department needed to be circumspect when awarding tenders. He said there were those service providers whose mistakes needed to be “tolerated” so that they could acquire experience, but warned that there were others who simply wanted to get their hands on government funds. He said the Department was faced with a challenge of being able to differentiate between the greedy and the genuine service providers.

The Chairperson promised that the Committee would visit the provinces to check that some of the projects were happening.

The meeting was adjourned.