The Presidency: Department of Performance Monitoring and Evaluation (DPME) briefed Members on the management performance assessment results for the Department of Rural Development and Land Reform (DRDLR) for the 2011/12. Cabinet had given the DPME the mandate and approval to conduct annual assessments of management performance of national and provincial departments using the Management Performance Assessment Tool (MPAT). The assessments were done against 31 management standards in 17 management areas and the standards were based on existing legislation and regulations. The DPME assessed performance on four levels. In respect of the DRDLR self-assessment results, the DRDLR, in comparison with other national departments, experienced significant compliance challenges in strategic planning; programme management; monitoring and evaluation (M&E); management structures; risk management; delegations; and human resources. The DRDLR had also taken up an improvement plan and progress in respect of annual performance plans; programme management alignment; functionality of management structures; assessment of policies and systems to ensure professional ethics; fraud prevention; risk management; and delegations.
A Member asked what was the yardstick used by the DPME to move a department from one level to another; the exact number of management disciplinary cases which were ongoing; if the DRDLR would be able to back up its self-assessment plans with evidence so that it could evaluated by external assessors; the difference between the service improvement plan; and about and the annual performance plan.
The Auditor General of South Africa’s (AGSA) made a presentation for the purpose of presenting the audit outcome of the DRDLR and its entities. AGSA had made some findings and recommendations in respect of certain focus areas which included asset management; predetermined objectives; human resources; information technology controls; material errors/omissions in annual financial statements (AFS) submitted for audit; supply chain management.
The DPME made a further presentation on the overview of progress of the DRDLR with respect to commitments to outcomes and emphasised that the presentation was not requested by the Committee but that it related to the work of the DRDLR and it was felt that it would be useful in providing an overview of the current engagements of the DRDLR. The outcomes were the Government's main initiative to achieve effective spending on the right priorities. The outcomes to which the DRDLR contributed were basic education; health; safety; employment; skills; economic infrastructure; rural development; integrated human settlements; local government; environment; internal and external relations; and public service. The DRDLR had in consultation with the stakeholders worked out some outputs in relation to the outcome.
A Member asked how people could be held accountable for failing to achieve the delivery agreements; if the plan to meet all the targets by 2014 were possible or if there would be an extension; who had the responsibility to set targets for such departments.
The Chairperson informed the Committee that the Public Service Commission would not be able to attend. He wondered why, for the Commission had been informed about the meeting a few weeks earlier.
The Chairperson called on the Presidency: Department of Performance Monitoring and Evaluation (DPME) to make its presentation.
Dr Sean Phillips, DPME Director-General, stated that the presentation was on the management performance assessment result for the Department of Rural Development and Land Reform (DRDLR) and would cover the 2011/12 financial year. The management performance assessment focused on the direct practices of the DRDLR. The DPME had also prepared a presentation on the performance of the DRDLR in relation to the rural development outcome which would be discussed as a separate presentation.
Dr Phillips informed the Committee that the DPME would also be appearing before the Portfolio Committee on Energy and that Mr Ismail Akhalwaya would be making the presentation. He further requested that he would like to be excused at a later stage in order to address the Portfolio Committee on Energy.
The Chairperson granted Dr Phillips’ request and directed Mr Akhalwaya to make the presentation.
Department of Performance Monitoring and Evaluation (DPME) on Department of Rural Development and Land Reform (DRDLR) Management Performance Assessment Results
Mr Ismail Akhalwaya, DPME Acting Deputy Director-General: Public sector Administration and Oversight, reported that, in June 2011, Cabinet gave the DPME the mandate and approval to conduct annual assessments of management performance of national and provincial departments using the Management Performance Assessment Tool (MPAT) tool. The tool was concerned with the effective and efficient translation of inputs into outputs through good management practices important for improving service delivery. Reviews carried out between 10 and 15 years had identified implementation capacity as a key challenge and the purpose of implementing the tool was to develop a culture of continuous improvement and sharing of good practice.
The assessments were done against 31 management standards in 17 management areas and the standards were based on existing legislation and regulations. The standards were developed collaboratively with the National Treasury, Department of Public Service and Administration, Office of the Public Service Commission, Office of the Auditor General, and Offices of the Premiers. There were also joint initiatives with Offices of the Premiers. The DPME facilitated the national departments while the Offices of the Premiers facilitated the provincial departments.
The process involved in doing the assessment involved three phases which were the self-assessment and validation phase; external moderation and feedback phase; improve and monitor phase. Concerning self-assessment, it was a requirement that the senior management of the Department in conjunction with the Director General should allocate a score to the Department. This was in most cases a honest reflection of the strengths and weaknesses of the Department. It was also a requirement to get the internal audit to certify that the Department went through the proper process and that there was available evidence to back up the self-assessment score. The final process was for the Head of Department to sign off and submit the process for external moderation. Concerning the external moderation and feedback phase, it was required that the DPME give feedback to the Department. Concerning the improve and monitor phase, the intention was that the Department had to develop improvement plans, monitor the plans and then prepare for the next round.
Mr Akhalwaya stated that the DPME assessed performance on four levels. Level one was for a Department that was non-compliant with legal and regulatory requirements; level two was for a Department that had partially complied with legal and regulatory requirements; level three was for a Department that had fully complied with legal and regulatory requirements; level four was for a Department that had full compliance and was doing things smartly.
An example of one of the 31 standards assessed by the DPME was the ‘service delivery improvement’ which was concerned with whether the department had an approved service delivery charter, standards and service delivery improvement plan and had adhered to these to improve services. How the assessment worked in relation to this was that the Department would have four statements and it would decipher which statement or set or statements applied to it. Therefore, a Department at level one would not have not have a service charter and service standards. A Department at level two would have a service charter and service standards which indicated some compliance. A Department at level three would have a service charter, service standards and Service Delivery Improvement Plan (SDIP) which indicated full compliance. A Department at level four meant full compliance with what could be obtained at level three and also meant that the Department regularly monitored compliance to service delivery standards and reports on this were considered by top management and used to inform the SDIP. It also meant that progress reports against the SDIP were regularly considered by top management.
In respect of the DRDLR self-assessment results, the DRDLR in comparison to other national departments experienced significant compliance challenges in strategic planning; programme management; M&E; management structures; risk management; delegations and human resources. The Department experienced similar challenges to that of other national departments in respect of service delivery improvement plans; ethics; human resources practices and administration; performance management and employee relations. The DRDLR, along with most national departments, generally complied to internal audit and supply chain management standards. However, the DRDLR’s management of Information systems exceeded that of other national departments.
Concerning the date of the next Management Performance Assessment Tool (MPAT) assessment, the DPME was in the process of implementing the second round of MPAT and as part of this process, the DRDLR planned to conduct its next self-assessment during October 2012. In the 2012 round of assessments there would be more emphasis on the moderated results.
In relation to the Auditor-General of South Africa’s (AGSA) finding as per the annual reports, the Department received a qualified audit opinion in both years due to its incomplete and inaccurate immovable capital asset register (not covered by 2011/12 MPAT assessments). One of the identified issues was the lack of adequate systems to maintain records on state land as an on-going challenge. In 2011/12 AGSA acknowledged the Department’s significant effort to rectify the deficiencies identified in the previous year.
Mr Akhalwaya informed the Committee that the DRDLR would take up the other aspect of the presentation which dealt with the DRDLR improvement plan and progress.
Ms Ntsiki Tshayingca-Mashiya, DRDLR Deputy Director-General: Corporate Support Services, dealt with the DRDLR improvement plan and progress. She identified a number of issues which were confronting the DRDLR and the measures taken so far by the DRDLR to address the issues. In respect of the Strategic Planning Alignment, one of the issues was the finalisation of the performance information policy, procedures and business processes which the DRDLR had addressed and the performance information policy and procedures had been developed. Another issue was to implement risk mitigation strategies which were in continuous progress. A further issue concerned documenting the review and alignment of the strategic plan; annual performance plan; budgets and operational plans. The strategic plan had been reviewed and refined/adjusted in the 2012/13 Annual Performance Plan (APP). Alignment with Medium Term Strategic Framework (MTSF), Delivery Agreements and Millennium Development Goals had been done and the document showing the alignment was annexed in the 2012/13 APP.
Concerning the annual performance plans, the DRDLR’s plan was to ensure that programme plans were costed and informed by service delivery targets and in order to do this the Planning Unit had introduced and facilitated the development of operational plans. These were costed and were informed by service delivery issues. Another plan was to have Quarterly Review and Assessment Meetings (QRAM) to indicate performance discussions and resolutions, especially where actions for addressing bottlenecks had been indicated and in order to do this performance quarterly reports were submitted on time and performance discussed at management meetings. Areas of non-achievement or lack of progress were highlighted and an action plan was developed to address these. A further plan was to document the review and alignment of the strategic plan; annual performance plan; budgets and operational plans and in order to achieve this the review of the APP and Strategic plan had been documented. The DRDLR further planned to file evidence of submission of APP and Strategic Plan to National Treasury (NT), DPME and Parliament and in order to do this the 2012/13 APP had been submitted to NT, DPME and tabled in Parliament on time.
In relation to programme management alignment, the DRDLR’s plan was to ensure that programme heads (DDGs) developed clear programme (operational/implementation) plans (e.g. for Rural Development, Land Reform, Restitution, Geospatial and Cadastral Services) with correct baselines and performance targets and aligned to Strategic and Annual Performance plans of department and in order to ensure this operational plans had been developed for all branches and presented to Portfolio Committee on Rural Development and Land Reform in June/July. The DRDLR also planned to demonstrate clear linkage between departmental goals, desired programme outcomes, outputs, inputs and activities and in order to execute this plan project lists had been developed. These indicated the projects that would be implemented in line with the strategic goals and objectives of the department. The DRDLR further planned to ensure that deputy directors-general (DDGs) clearly demonstrated how programme performance information would be used to inform management decisions so as to improve performance and in order to do this project lists had been developed. These indicated the projects that would be implemented in line with the strategic goals and objectives of the Department.
In respect of functionality of management structures, a number of plans had been made. It was planned that agendas would be prepared for all SMC and Executive Management Committee (EMC) meetings and this had been implemented. It was also planned that action lists would be prepared and there would be follow up on decisions for all SMC and EMC meetings with additional column on status and this had also been implemented. It was further planned that reasons would be provided for certain meetings not taking place on planned dates and this had further been implemented. The DRDLR had made plans to ensure the Director General (DG) would approve year planner for SMC meetings which had now been implemented. The DRDLR’s plan that the Chief of Staff would consult with the Minister on EMC meetings on year planner for approval had also been implemented. It was planned that Draft Terms of Reference would be presented to SMC and EMC meetings. The Terms of Reference had been presented, but had not been adopted yet. The plan to undertake a review to ensure agenda focus on strategic objectives and priorities had been Immediately Implemented and ongoing.
Concerning the assessment of policies and systems to ensure professional ethics, the DRDLR had planned the signing of fiduciary declarations (FDs) which were to be submitted to the Public Service Commission (PSC). This would be done annually and the target date had been achieved. A plan had been made for the approval and adoption of the Departmental Code of Conduct and in consideration of this the Code of Conduct had been drafted but it still needed to be consulted with the labour unions, as part of the policy consultation process. It was scheduled for consultation in Nov/Dec 2012. It was anticipated that it would be approved by Jan/February 2013. Plans had also been made for display of the Code of Conduct and upon approval of the code of conduct steps would be taken to print posters. However, this would be dependent on budget. Budget permitting, it was anticipated that these would be printed by 31 March 2013. If there was a lack of funds then it would be prioritised for the first quarter of the 2013/2014 financial year. In relation to the plan for management of departmental gift registers, the registers had been established at all Branches and Chief Directorates.
In relation to fraud prevention, the risk management unit was in the process of following up action plans. The result of the implementation of action plans was provided in the evidence of improved controls. The plan was In progress and revised target date was December 2012. The DRDLR also had also sought for the approval of revised Fraud Prevention Plan which had been approved by the DG. There was also a plan for the implementation and monitoring of a revised Fraud Prevention Plan which was in progress. The Department had also planned to make a report to Audit Committee and Risk Committee on implementation and monitoring of the revised Fraud Prevention Plan.
In respect of risk management, the strategic risks of the Department would be reassessed in the risk assessment project planned to start at the beginning of March 2012. This was in progress and the revised target date was December 2012. There were also plans by the Department to reassess its other levels such as operational risks and process risk on the same project that was scheduled to start in March. This plan was in progress and the revised target date was March 2013. There had been a plan to seek approval of the Risk Committee revised charter and Risk management revised plan and methodology which had been approved by the DG.
In respect of delegations, there was a plan to seek approval and implementation of a new set of delegations aligned to organisational structure. Therefore, draft delegations had been compiled which were aligned to the new organisational structure. This was still to be approved by Management and the revised target date was December 2012. There had been a plan to secure the development and implementation of a Delegation register which had now been complied and would be updated when necessary.
In respect of human resource and systems management, the DRDLR’s plan was to ensure a signed annual human resources plan to be submitted to the Department of Public Service and Administration (DPSA) which was presently being updated and amended. It was further planned to develop an Implementation plan and evidence of Implementation of human resource plan which was 60% complete.
In respect of management of disciplinary cases, there were plans for improved monitoring and management of cases. An updated monthly report showing progress of cases was being compiled and to be submitted to the DG. It was planned to conduct analysis on nature of misconduct and implement preventive measures. The analysis of cases were ongoing and a number of shortcomings, which affected the prompt finalisation of cases had been identified. The disciplinary policy sought to address a number of these issues. The policy had been drafted and would be consulted with the labour unions in November 2012. It was also planned to continue with the labour relations capacity development programme and to equip line management with skills to manage discipline. In respect of this, a number of line managers had been trained in the previous financial year. Provision of training was provided on request and was ongoing. The Department planned to role out labour relations training for members by the end of the financial year.
Mr Akhalwaya stated that the DPME was impressed by the approach taken by the DRDLR and the assessment had been honest and frank. The DRDLR had recognised its weaknesses and had implemented an improvement plan. The DPME would be doing the second round assessment at the end of October and would be able to ascertain then whether the improvement had resulted into better management practices. Thereafter the DPME would come back to the Committee to present the findings of that process.
Nkosi Z Mandela (ANC) referred to four levels which the DPME used to assess the performance of Departments. He asked what was the yardstick used by the DPME to move a Department from one level to another level.
He further referred to the fact there were a number of management disciplinary cases which were ongoing. He asked for the exact number of these cases and sought to know when they would be resolved.
Mr A Trollip (DA) asked if the DRDLR would be able to back up its self-assessment plans with evidence so that it could evaluated by external assessors.
He further asked when in October would the follow up assessment be done by the DPME.
Ms P Nwgenya-Mabila (ANC) asked for the difference between the service improvement plan and the annual performance plan.
Mr Akhalwaya replied to the question concerning when precisely in October would the assessment to be done. He stated that the end of October was the deadline for all national and provincial departments to submit their self assessment scores as wll as their evidence. The DPME would then do moderations of the evidence in November and the results would then be subsequently be released. The DPME would thereafter engage with the Committee sometime in January 2013 to deliberate on the results.
He responded to the question on the yardstick used by the DPME to move a Department from one level to another. The DPME did not continuously monitor the improvement plans; however, what it did was to create various case studies of departments which performed well in particular areas and these case studies would be shared with other departments at forums in order to show how certain departments had succeeded. This would create an avenue for departments to learn from each other.
He further responded on the difference between the service delivery improvement plan and the annual performance plan. The annual performance pan was essentially the department’s plan for the year and how it was going to use the budget allocated to it. The service delivery improvement plan expected departments to ideally find who their clients were and to agree with their clients concerning what standard they could expect in terms of service delivery.
DRDLR and its entities audit outcome: Auditor General of South Africa (AGSA) briefing
Ms Meisie Nkau, AGSA Business Executive, presented the audit outcome of the DRDLR and its entities. For a number of years,AGSA had been analysing what behaviours the Departments and their entities could change to achieve good practices for clean audit outcomes which was the Government’s intention. The AGSA had also focused its efforts in identifying key focus areas which were impediments to clean audits and which had been communicated to the departments for them to improve on. These five focus areas were the supply chain management; human resource management; information systems; service delivery; and quality and credibility of information. In addition to these focus areas, the AGSA also focused on oversight in respect of government structures and their effectiveness.
Mr Eugene Haan, AGSA Senior Manager, stated that AGSA had a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, it existed to strengthen the country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence. Concerning the key focus areas, AGSA had made some findings and recommendations.
In respect of DRDLR, the finding of AGSA was that the Department still did not have adequate systems in place to maintain records for all state register in the immovable tangible capital asset register of the department which rustled in an incomplete and inaccurate register being maintained. Furthermore a number limitations and differences were noted during a comparison between the Department’s immovable capital asset register and the extraction from the Deeds Registration System. The Department was still investigating the differences identified. The accounting officer had not taken reasonable steps to monitor changes in the immovable tangible capital asset register when immovable assets which were registered in historical names associated with the Department were confirmed to vest in various provincial governments in term of item 28 (1) of schedule 6 of the Constitution of the Republic of South Africa. The root cause of this was that action plans were inadequate or were not implemented correctly to address matters reported. Senior management had not exercise oversight to ensure that a complete and an accurate immovable asset register existed. There was also lack of adequate controls and monitoring in place to ensure compliance with the requirements of item 28 (1) of schedule 6 of the Constitution of the Republic of South Africa. The recommendation of AGSA was that the DRDLR should analyse and verify the total exception reports. If valid reasons for the omissions existed, evidence in this regard for audit purposes ought to be provided and if valid reasons for the omissions did not exist corrections ought to be made to the immovable asset register and the financials of the department. There was a need to analyse properties belonging to public companies, private companies, public entities, close corporations and Trusts as per Deeds incorrectly included in the immovable asset register of the Department to correct the overstatement of properties not belonging to the department.
In respect of Agricultural Land Holding Account (ALHA), the finding was that the accounting officer did not exercise the utmost care to ensure the reasonable protection and safeguarding of the assets and records of the trading entity, as required by Section 38 (1) (d) of the Public Finance Management Act (No. 1 of 1999) (PFMA). The accounting officer did not ensure that the trading entity had effective, efficient and transparent systems of financial and risk management and internal control in that there were no policies and procedures that were updated and approved as required by section 38 (1) (a) (l) of the PFMA. The root cause was that senior management had not exercised adequate oversight to ensure compliance with the requirements of laws and regulations, and there was a lack of adequate controls and monitoring in place to ensure compliance with the requirements of laws and regulations. The recommendation was that there should be regular monitoring and maintenance of the asset register of the provinces. A register of leases should be maintained and it ought to be ensured that contracts were renewed before they expired. It was also recommended that all farms owned should be reconciled, per region to the asset register, to ensure that the asset register had the correct names and description of the farms as well as that the asset register included all the assets of the ALHA. It was essential to implement processes so as to ensure that all assets purchased, per the sale agreement were received.
In respect of Ingonyama Trust, the finding was that land belonging to Ingoyama Trust had not been valued contrary to the requirements of Generally Recognised Accounting Practice (GRAP) 17 because it was considered to not to be cost-effective and as per the mandate of Ingonyama Trust Board. As a result, land disclosed in the financial statements were materially understated. The root causes were that action plans were inadequate or not implemented correctly to address matters reported. Senior managers had not exercised adequate oversight to ensure that a complete and an accurate immovable asset register existed. The recommendation was that the Department should ensure that it followed up on its action plans to ensure that appropriate action was taken to address issues noted. Workshops should be conducted to ensure clear guidance on expectations when the strategic plan was being drafted.
In respect of DRDLR, the finding was that performance indicators were not well defined. The National Treasury Framework for managing programme performance information (FMPPI) required that indicators should have clear unambiguous data definitions so that data could be collected consistently and would be easy to understand and use. A total of 46% of the indicators relevant to the Rural Development and Land Reform programmes were not well defined in that clear unambiguous data definitions were not available to allow for data to be collected consistently. This was due to the lack of oversight responsibility and understanding regarding the development of performance indicators. The root cause was that action plans were inadequate or not implemented correctly to address matters reported. Management also did not understand the FMPPI regarding the link of the strategic plan to other entities plans. Lack of understanding of the FMPPI resulted in incorrect application or interpretation. There was also a lack of key controls in the relevant systems of collection, collation, verification, and storage of actual performance information. The recommendations were that the Department should ensure that it followed up on its action plans to ensure that appropriate action was taken to address issues noted. Workshops should be conducted with the National Treasury to ensure clear guidance on expectations when the strategic plan was being drafted.
In respect of Deeds, no supporting document was provided in order to test accuracy, completeness and validity on performance target reported. The root cause was due to a lack of standard operating procedures and oversight responsibility from management for the recording of actual achievements. The recommendation was that reporting of predetermined objectives should be done in accordance with the FMPPI and all variances should be explained adequately.
In respect of Ingoyama Trust Fund, no material things were identified.
In respect of DRDLR, although findings were identified, they were not considered significant to report in the Audit report.
Information technology Controls
In respect of the DRDLR, the findings were that that there was weakness identified in effective security management. There were no Formal Information Technology (IT) Governance controls and no committee formally appointed (IT Governance Committee). The root causes were lack of clear policy regarding new user and maintenance of user IDs. The Department developed a plan to address internal and external audit findings but adherence to the plan was not always monitored on a timely basis by the appropriate level of management. The recommendation was that management should ensure that prior year matters were implemented as contained in its action plan. IT policy should be revised to ensure that the User account management matters, user access control and facilities and environmental and controls were addressed.
Material Errors/Omissions In annual financial statements (AFS) submitted for Audit
In respect of DRDLR, the finding was that the financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework and were not supported by full and proper records, as required by the PFMA. Material misstatements of disclosure items identified by the auditors in the submitted financial statements were subsequently corrected, resulting in the financial statements receiving an unqualified audit opinion. The root cause was that adequate monthly reconciliation of all accounts and balances were not performed throughout the financial year. The recommendation was that management should ensure that AFS were prepared regularly (monthly and quarterly). These AFS should be reviewed by the governance structure, i.e management, internal audit and audit committee. The AFS prepared should be adequately supported by substantiating evidence to corroborate validity, accuracy, and completeness thereof.
Supply Chain Management
In respect of DRDLR, although findings were identified, they were not considered significant enough to report in the Audit report.
In respect of Deeds, the finding was that no approval had been obtained by state officials to perform additional remunerative work. The root cause was that there was lack of understanding of laws and regulations resulting in incorrect interpretation. The recommendation was that management should ensure compliance with the requirements of the Public Service Act (No. 103 of 1994).
In respect of Ingoyanma Trust Board, the accounting authority did not advertise the invitation to tender for construction contracts on the construction industry website, as required by Construction Industry Development Board (CIDB) regulation 24. The root cause was that there was lack of oversight responsibility to ensure compliance with the relevant laws and regulations. The recommendation was that management should implement processes to ensure compliance with the requirements of CIDB regulation 24.
The AGSA recommended commitments for a clean administration. The first recommendation was that consultants skills transfer were to be monitored and evaluated monthly with progress reports from consultants on such skill transfer. In order to effect this commitment, it was advised that there should be effective implementation of approved organisational structure, taking into account the skills gap identified and develop, IT systems producing credible financial and non-financial information and bodies with skills relevant to finance, performance , compliance and information system.
The second recommendation was sustainability of in house Internal Audit and in respect it was advised that there should be monitoring and compliance unit strengthened responsibility (compliance).
The third recommendation was management self-assessment using key control document and in respect of this it was advised that the department would need to develop a process and reconciliation of state land that would ensure that a complete and accurate register was maintained.
The fourth recommendation was interaction between the DRD&LR, the Department of Public Works (DPW), National Treasury and other custodians of state land which needed to take place in order to ensure that all state land was complete and accurate.
The fifth recommendation was to monitor compliance with policies and procedures and take decisive action on non-compliance and in respect of this.
The sixth recommendation was the need to identify and monitor strengths and weaknesses of the portfolio (Sustainability) and in respect of this there was a need to develop checks and balances to ensure credibility of all information.
The seventh recommendation was the need for monthly financial and performance reports that would include disclosure items. In line with best practice, update Supply Chain Management (SCM) policies to ensure that approval of requests to deviate from normal SCM process by the accounting officer/authority is based on recommendations by the bid adjudication committee based on their evaluation of the submission for such a request.
The eight recommendation was the effective utilisation of Internal Audit which would involve the review of internal audit scope to include adequate coverage of Audit of Predetermined Objectives (AoPo) and Compliance in their plans. There would be training programs to incorporate; understanding of why AFS were prepared (for operational management purposes, eg analysis of financial performance ); understanding of why key controls were essential; understanding of why service delivery reporting was critical and continuous professional and skills development for all staff and monitoring thereof.
DRDLR commitment to outcomes: progress overview by DPME
Dr Tsakani Ngomane, DPME Deputy Director-General, emphasised that the presentation was not requested by the Committee but that it related to the work of the DRDLR and it was felt that it would be useful in providing an overview of the current engagements of the DRDLR. The outcomes were the Government's main initiative to achieve effective spending on the right priorities. The aim was to improve service delivery by Introducing whole-of-government planning linked to key outcomes,clearly linking inputs and activities to outputs and the outcomes; implementing the constitutional imperative for cooperative governance by negotiating inter-departmental and intergovernmental delivery agreements for the outcomes; increasing strategic focus of government; making more efficient and effective use of limited resources through introduction of more systematic monitoring and evaluation.
The outcomes work was entered within a framework of delivery agreements. A delivery agreement was a charter between all the key stakeholders who needed to work together to achieve the outcome. Performance Agreements had been signed between the President and outcome-coordinating Ministers which requested them to work with other key stakeholders to develop detailed delivery agreements for each outcome. Delivery agreements described key activities, sub-outputs, outputs, indicators, and targets, identified required inputs and clarified roles and responsibilities of each key body which contributed to the achievement of the outcome. Performance Agreements between President and other Ministers also requested them to work with the coordinating Ministers on relevant delivery agreements. New National Treasury guidelines for strategic plans indicated that departments' strategic plans and APPs should reflect their commitments to delivery agreements which would be monitored by the Auditor General and should also be monitored by Parliament.
The outcomes to which the DRDLR contributed were basic education; health; safety; employment; skills; economic infrastructure; rural development; integrated human settlements; local government; environment; internal and external relations; and public service. The DRDLR was the overall custodian for the outcome in respect of rural development. The rural development outcome sought to ensure that there were vibrant, equitable and sustainable rural communities and food security for all. The DRDLR had in consultation with the stakeholders worked out some outputs in relation to the outcome. Output one was the sustainable agrarian reform with a thriving farming sector; output two was improving rural services to support livelihoods; output three was improving rural services to support livelihoods; output four was improving employment and skills development opportunities; output five was enabling institutional environment for sustainable and inclusive growth. The Department of Agriculture, Forestry and Fisheries was a key department which supported the DRDLR in relation to the outcome of rural development and they contributed to the DRDLR’s efforts in respect of the outputs identified above.
In respect of output one which related to sustainable agrarian reform with a thriving farming sector, the target for 2014 was to ensure that 24.5 million ha [30% of total of 82m ha of productive land] were transferred to blacks. The second target was to create 50 000 new smallholders. The assessment by DPME for the first quarter of 2012/2013 was that 7.950 million hectares (or 10%) of the 2014 target have been achieved to date (2012 Policy Speech, DRDLR).Of these, a cumulative 1 284 308 hectares were acquired and allocated by July under the distribution programme. By end of June 2012, 7 600 ha of land were settled under the Restitution program and 21 backlog claims were finalised. Only 265 hectares of land had been revitalised in two Irrigation Schemes, which was much below the set target of eight Irrigation Schemes. 21 192 new smallholder producers were supported. By June 2012, R31.6 million worth of Mafisa loans were distributed to 2897 sector clients. About 13 014 farmers were linked to markets and 11 899 beneficiaries were supported through the Comprehensive Agricultural Support Programme (CASP), and 28 co-operatives were established. The comments of the DPME were that targets on land reform and establishment of new smallholders were unlikely to be achieved. There had been some challenges with implementation of land reform, resulting in slow progress. Remaining claims for settlement were on high value commercial farmlands, and most difficult to resolve. Land prices were high, particularly for restitution. Newly acquired land were under-utilised, post settlement. The institutional change suggested in Green Paper on Land Reform would address some of these issues. There was insufficient involvement of the commercial sector in developing smallholders. Smallholders were crowded out from markets by commercial producers and others in the value chain. There was a problem of poor coordination on this issue. Generally, there was insufficient involvement in agricultural activities in the country (Stats SA General Household Survey (GHS) 2011), with most households sourcing food from supermarkets, not producing it (National Income Dynamic Study (NIDS), 2011).
In respect of output two, which related to improving rural services to support livelihoods, the key indicator that would help Government respond to this output through the DRDLR suggested that 30% of poor households producing part of their own food through household gardens and institutional gardens could be achieved by 2014.The target was 68 000 food gardens. The assessment by the DPME based on the first quarter of 2012/13 was that, between January and June 2012, 8 981 household and 264 institutional food gardens had been established. 36 950households accessed food through other community initiatives. Seven food banks were established benefiting 25 252 people, whilst 4155 Social Grant beneficiaries were linked to income generating initiatives and economic livelihood opportunities. Overall, 67 000 food gardens had been established. Inadequate and severely inadequate access to food was higher in rural than urban households. The comments of the DPME were that while the target would be achieved, it was low compared to the total number of poor households which were in need. This was a problem of under-targeting. There was a need to verify the 67 000 reported, beyond departmental reports. The Zero Hunger strategy had identified other forms of subsistence for poor households, and should be strengthened as part of a broader policy on food security. Currently the country had an integrated food security strategy, but no policy on food security.
In respect of output three which related to improving rural services to support livelihoods. The target was the increase in the proportion of rural households with clean water from 74% to 90%. The second target was the increase in the proportion of rural households with access to improved sanitation from 45% to 65%. The assessment by DPME for the first quarter of 2012/13 was that the average percentage of rural households with access to water supply was now estimated at 89.38% (Stats SA: April 2012; DWA, July 2012). This represented an average increase of 4.38% of rural households with access to water supply from December 2011. 1 084 water tanks were distributed and 78% of rural households had gained access to improved sanitation (DWA, July 2012). However, one household without access to safe water and sanitation was one too many. The targets had therefore been revised in the Delivery Agreement to be in line with universal access targets. Action plans for 14 of the 23 District Municipalities had been developed focusing, amongst others, on the water resource and institutional challenges. 48 projects were currently being implemented in the 23 District Municipalities under the Regional Bulk Infrastructure Programme. DWA had completed a situational analysis assessment report for each of the 23 distressed district municipalities detailing the water situation and required interventions. An interim water supply strategy for expansion of the community water supply projects had been developed. The comments of the DPME was that universal access was unlikely to be achieved as some of the municipalities were still at 50% access. Emerging challenges with bulk water in particular, included dysfunction of the infrastructure and the poor quality of water.
In respect of output four which related to improving employment and skills development opportunities, the target was to reduce rural unemployment from 73.4% to 60% (Department of Social Development’s survey on Integrated Sustainable Rural Development Programme (ISRDP), 2008). The second target was the need to ensure that formal jobs created by the commercial agricultural sector rise by 20 000 from 780 000 to 800 000. The assessment by DPME was that though jobs had been created through CRDP tourism, Expanded Public Works Programme (EPWP),and Community Works Programme (CWP), the efforts had minimal impact on rural unemployment. Broad unemployment in 'tribal areas' was rising rapidly, from 44% in 2009 (Stats SA Quarterly Labour Force Survey (QLFS) 2009) to 52% in 2012, partly due to slow rate of overall national economic growth, inadequate progress with smallholders, lack of growth in employment in commercial agricultural sector. National Rural Youth Service Corps (NARYSEC} and other public employment programmes had contributed to skills development but had only made a marginal contribution to reducing youth unemployment in rural areas. The comments of the DPME was that different data sources had been used for the baseline, the target and the performance 52% in 2012, partly due to measurement on rural unemployment, and were not comparable. The latest measurement was from the QLFS using a category called 'tribal areas (similar to former homeland areas). The Delivery Agreement target also had to be revised.
In respect of output five which related to enabling institutional environment for sustainable and inclusive growth, the target was 80% of rural local governments which had established coordination structures. The assessment of the DPME for the first quarter of 2012/13 was that activities under this output sought to ensure that communities participated in their own development, ad for coherent planning. For the period under reporting, 45 councils of stakeholders, 13 development forums and 13 youth forums were established. A total of 3113 youth participated in youth centres and were supported through training and funding. 51 495 households and 764 communities had been profiled. 596 316 clients from profiled households and communities were referred for appropriate interventions and 25 rural spatial development frameworks were formulated. The comments of the DPME was that although coordination structures were in place, their functionality and effectiveness varied from municipality to municipality. In some instances, there were too many intergovernmental coordinating structures in one area. There was a need to conduct an audit of available structures, their status and their functionality by the end of 2012. The DRDLR should develop integrated sustainable development strategies according to the potential of each district, and then coordinate the contributions of communities, individual departments, entities, municipalities and the private sector to implement such strategies, focusing initially on the 23 poorest rural districts.
Nkosi Mandela referred to the performance agreements and asked what measures would be resorted to in cases where there was a failure to achieve the agreements. He sought to know how people could be held accountable for failing to achieve the agreements.
He referred to the position that the DRDLR was the custodian of outcome seven; he asked if the plan to meet all the targets by 2014 were possible or if there would be an extension.
The Chairperson observed that some departments were not following the example of the NARYSEC in their own programmes even though they were acting in the rural space. He asked who had the responsibility to set those targets for such departments.
Dr Ngomane replied that in situations where there was under performance on the delivery agreements, the opportunity was provided for the Department and stakeholders to work out mechanisms for improvement. Therefore there measure in place to deal with the situation.
She further replied that though the targets were set towards 2014 there was, however, the realisation that the challenges surrounding rural development were quite complex and, as such, there was a possibility that there could be an extension in order to ensure that the targets were met.
The Chairperson asked Members if there were any more questions. Members had no more questions to ask.
The Chairperson thanked everyone for coming to the meeting.
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