Department Rural Development & Land Reform; Ingonyama Trust Board 2012/2013 Annual Reports

Rural Development and Land Reform

16 October 2013
Chairperson: Mr J Thibedi (ANC)
Share this page:

Meeting Summary

The Department of Rural Development and Land Reform (DRDLR) presented its 2012/13 Annual Report The DRDLR outlined the positive strides that had been made in addressing poverty, unemployment and inequality through the Comprehensive Rural Development Programme (CRDP) and the Land Reform programme. Targets, objectives and performance were described in detail. The DRDLR had a vacancy rate of 15%, with a 19.3% vacancy rate at senior management level. Two targets had been removed from the oragnisational renewal plan. It had managed to submit three policies instead of 10. The State Land Register had still not been completed, with only 99.5% of State land being verified, and there were service backlogs in spatial plans, and little improvement on processing registrable diagrams turnaround times.  This was attributed to  lack of skilled people. Although DRDLR had enrolled 67 student on the geomatics training programme, they would still take time to complete the programme. In the Rural Development Programme, the DRDLR had given agricultural assistance, provided households with socio-economic infrastructure using the CRDP model, and skills development with special attention on rural youth. 2 131 households received food security interventions. 15 000 youths were engaged on National Rural Youths Service Corps programme initiatives. The Commission on Restitution of Land Rights finalised 602 land claims and 376 land rights were restored, out of the targeted 380. There had also been more financial compensation claims, as well as a few cases that warranted referrals to court which resulted in administrative settlements. Disputes between family members and other delays contributed to the problems experienced. Support for emerging farmers was another critical priority area, but DRDLR had made some changes on the targets for irrigation, which was not really in its portfolio and was working with the Department of Agriculture.

The DRDLR had managed to spend R8.9 billion, or 99.4% of total appropriation, and some of this was done through virements, which were all approved. R6 million from Land Reform was transferred to the Administration programme and the Land Reform programme was set to continue for another four years. No conditional grants were paid but DRDLR transferred R195.9 million to government entities assisting it. of Revenue Act, but the Department did transfer over R195.9 million to government entities assisting the Department. The Auditor-General (AG) gave an unqualified report, but with findings. In order to address weaknesses in the internal control system, a Risk and Compliance Committee was established. One of the main findings related to the lack of contingency for the substantial claims against the DRDLR. Corrective steps were implemented.

The financial performance for the Second Quarter 2013/14 showed that there was spending of 53.8% of the appropriated funds, with details for programmes, branches and economic classification. The DRDLR was requesting R6.4 million and R6.9 million for two new programmes, with reprioritization because the baseline and the CRPD processes were not aligned. Additional funding of R6.8 billion over the next MTEF period was being requested.

Members expressed their concern at the absence of the Minister and Deputy Minister, particularly given the comments on lack of proper leadership. They were worried that although there had been virtually full spending, the targets were not achieved, which indicated a mismatch of planning and target setting. Several Members expressed their concern at the vacancy rate, and said that it was no wonder that there was underperformance, and questioned why the Employee Compensation was at 97.4% despite a 16% vacancy rate. They questioned the reliability of the information – a point raised by the AG and highlighted by several apparent discrepancies in figures, in the dates on which reports were presented, and land audit figures. Management of HR seemed to be a serious concern. One Member was very worried about the introduction of new legislation that was costed at R179 billion without proper planning. Members were fairly pleased with the youth initiatives but thought that better and more co-ordinated attempts must be made across other departments also. Members thought that more attention was needed to finalising the policies, and skills creation and asked about the policy on foreign employment, preferring that local talent be sourced, whilst one Member encouraged the Department to start promoting itself at lower school levels also.  They asked if the jobs created under the CRDP were sustainable. The Chairperson emphasised that more attention had to be paid to ensuring that people given land used if efficiently and that DRDLR must formulate proper mission statements on that. Lack of dedicated teams to implement projects was a major problem.

The Ingonyama Trust Board (ITB) then presented its Annual Report. It described itself as a real estate management entity who ran short, medium and long term leases. Applications for infrastructure development were lodged via the DRDLR and then referred to the ITB, and 43 applications were considered in the past year. The Land Tenure Information System mapped all leases and held records of all available land for applicants. The ITB also approved agricultural projects for financial support and linked all applicants to the Food Security programme and 100-Hectares programmes. It was supporting some agricultural projects, had conducted studies and was assisting in smaller towns. It had signed 859 out of the targeted 1 031 leases, and it was noted that traditional leaders and councils would advise the Board of their needs. In this financial year, assets were R298 million, liabilities at R187 million and there was a surplus of R11 million, an increase from the R2 million in the previous financial year. The Auditor-General had given findings on land not properly evaluated, although the ITB held the view that this was not land that would ever be sold, so there was no point in fixing material values. Royalty revenue and income was not completely stated as the ITB had some challenges in getting statements from the mines. Another finding related to purchase of shares that had caused royalties to diminish.

Members asked how many women were being considered for the vacant posts and wanted an explanation on the organogram. They asked about valuations, and suggested that perhaps the ITB should tap into Municipal Valuation rolls. Clarity was sought on what the Ingonyama Rural Development Forum did and why the amendment to the Ingonyama Trust Act had been so long delayed. They asked when, and where, satellite offices would be opened, sought clarity on a research project and the cost of the audit, asked why the traveling expenses were so high and what the “environment” amount related to. Details on employee salaries and Board salaries were requested, along with details on other spending, the bursaries, and who made decisions on leases.  Members wanted more clarity on who was the Board, and who was the Executive Committee, and who advised whom. One Member maintained that the ITB should not have a surplus, as it was a government entity; no matter than the money was paid by, and used for Traditional Councils, it remained as taxpayers’ money and it appeared that National Treasury was not advised of the surplus. The ITB maintained that it was different from other departments, but the Committee, after debating the matter, said that although it was not disputing the honesty of the ITB, a ruling was needed on the point, and that required a closer look at the mandate.

Meeting report

Opening Remarks
Apologies were tabled from the Minister and Deputy Minister of Rural Development and Land Reform

Department of Rural Development and Land Reform 2012/2013 Annual Report briefing
Mr Mduduzi Shabane, Director- General, Department of Rural Development and Land Reform, noted the format of the report of the Department of Rural Development and Land Reform (DRDLR or the Department) and the Ingonyama Trust Board (ITB or the Trust)

Mr Vusi Mahlangu, Deputy Director General, Department of Rural Development and Land Reform, tabled a strategic overview of the Department, noting that this was the fifth year of the Medium Term Strategic Framework cycle, which commenced in 2009. The DRDLR was focused on creating sustainable communities, and there had been positive strides in tackling poverty, unemployment and inequality through the Comprehensive Rural Development Programme (CRDP). He mentioned that the land reform programme should have minimal interruptions in the future.

Programme 1: Administration had several targets which he outlined. The vacancy rate was not maintained at the target of 10%, and was currently 15%, although some crucial positions had been filled. The audit management was at 50%. The organisational renewal plan had fallen short of its target at 47%, but that was due to two deliverables being removed under the renewal strategy. The Department fell short of submitting ten policies to the Cabinet, but did manage to pass the Land Management Commission Policy in March 2013, as well as three other policies that were approved internally. The participatory consultation process had delayed the remainder of the matters.

The targets for the Geospatial and Cadastral Services were reviewed. There was a target of verifying 100%, but only 99.5% of the State land register had been verified. There had also been a significant performance in surveying state land in the former homelands, due to the technical expertise training in the area. There was been a service backlog of 25 spatial plans, resulting in only 14 being formulated out of the 37 that had been targeted. Out of the 2.7 million hectares targeted for integrated land planning, 2.4 million was attained. The number of working days for processing a registrable diagram was targeted at 14 working days but the average processing time was still 21 working days. The reason for the shortfall on targets was the lack of skilled people.

The DRDLR had planned to have 60 people on to the geomatics training programme, and managed to enroll 67, but it took two years for them to complete the programme so most had not yet graduated.  

The goals in the Rural Development Programme included agricultural assistance, providing households with socio-economic infrastructure using the CRDP model, and skills development with special attention on rural youth. Most of the rural development targets were realised, and 2 131 households received food security interventions. Young people were trained through the National Rural Youths Service Corps programme (NARYSEC) with a total of 15 000 youths being involved in the youth programmes overall. He listed other targets and outcomes of other programmes, such as the number of functional homes, service delivery forums and rural communities with functional infrastructure.

The Commission on Restitution of Land Rights finalised 602 land claims between April 2012 and March 2013. Furthermore 376 land rights were restored out of the targeted 380. There had also been more financial compensation claims, as well as a few cases that warranted referrals to court which resulted in administrative settlements. Disputes between family members and other delays contributed to the problems experienced. Land reform was a critical priority of the Department and lists were tabled of the number of hectares of land returned to beneficiaries (see attached presentation for details).

DRDLR also attached priority to improving the productivity of acquired farms and providing support for emerging farmers. The farms were listed, under the Recapitalisation and Development Programme (RDP). The number of jobs created through the land reform included the training of farmers to ensure the productivity of claimed farms. Changes had been made in the indicator in the middle of the year for the number of irrigation schemes under revitalization, and targets were moved from the Land Reform to the Rural Development Programme, and he noted that the revitalization of irrigation was actually not something falling under DRDLR, but another department.

The National Development Plan (NDP) had identified policy imperatives for the following years. These were improved land administration and spatial planning, up-scaled rural development, resource allocation and implementation by all stakeholders, land reform, improved food security, farmer development and support, increased access to infrastructure and services and the growth of sustainable rural enterprises. Integrated work in government was needed to ensure further rural job creation.

Mr Thapelo Motsoeneng, Acting Chief Financial Officer, Department of Rural Development and Land Reform, presented Part B of the Report, summarising the financial performance and audit outcome for the 2012/2013 year. The Department had focused on  developing policies and legislation to aid in the realisation of the mandate. This year marked the centenary of the 1913 Native Land Act so there was a focus on activities marking that, and reversing the legacy of that legislation. The project to identify state owned land parcels was completed, and the construction of the Nelson Mandela Legacy Bridge was also complete.

In this year, there had been expenditure of R8.9 billion, which represented 99.4% of total appropriations. This was 1.5% lower than the spending in the previous year, although it was seen against a larger budget. The budget allocations and spending per programme were listed. Virements were effected to accommodate excess expenditure in relevant programmes. He mentioned that R6 million funds from land reform had been transferred to the Administration programme, to augment the shortfall from the renewal strategy, and to assist in the restitution of struggling projects. All virements were done in accordance with the Public Finance Management Act. The Land Reform Programme had been extended for another four years.

The Deeds Registries were also part of the annual financial statement and audit report, as well as the Agricultural Land Holding Account. There were no conditional grants in terms of the Division of Revenue Act, but the Department did transfer over R195.9 million to government entities assisting the Department. The surplus funds were disclosed in the financial statements. He added that the Department would likely see more movement regarding the Public Private Partnerships (PPP). The current senior management vacancy rate was listed at 19.93%. the spending for each programme was listed.

Mr Motsoeneng summarised corporate governance findings in the Department. In order to strengthen accountability and weaknesses in the internal control system, the Risk and Compliance Committee, chaired by a member of the Audit Committee, had been established. An outside auditor from the Audit Committee had helped the Department with this. The risk management framework had been updated after a rigorous process to identify the risks and compile a fraud risks register.

The Department had received an unqualified audit opinion, but there were various findings and the Auditor-General South Africa (AGSA) was working with the Department to resolve the issues. Overall he felt that the Department was on track. He detailed that one of the main findings was that although the claims against the Department amounted to R3.602 million, the Department had not made any provision for any liabilities in the financial statement. The AGSA also raised the issue of possible liabilities in respect of claimants under the Restitution of Land Rights Act, and this included the number of claims already verified. Overall, AGSA did not eel that sufficient contingency plans were  made.

By the end of September, DRDLR had already fully implemented corrective steps against 51% of the total findings that were raised in the management letter.  

Mr Motsoeneng then summarized the financial performance as of 30 September 2013. He stated that the total spending to the end of the second quarter amounted to R5.0 billion, representing 53.8% of the appropriated funds. He listed the percentages per programme, per branch, economic classification and the compensation of employees including all transfers and subsidies. He then listed the payments for capital assets. He then went over the requested adjustment estimates for 2013/2014 and said that the Department had engaged on this with National Treasury. He also presented the Annual Estimates of National Expenditure for the 2013/14 year, and the reprioritization and additional funding requirements. Reprioritised Restitution and Land Reform funding was at, respectively, R6.4 million and R6.9 million. He noted that, given the lack of alignment of what was in the base line and the CRDP process, reprioritization was essential  for managing the programmes properly. He noted that there were still gaps after the budget was reprioritised, due to new policies being introduced after following the Green Paper. He added that there were structural deficiencies in the budget itself, that necessitated further funding requests. The Department had asked for additional funding of R6.8 billion over the next MTEF period.

The Spatial Planning and Land Use Management Act had been passed (SPLUMA) and the Department could harness the rural spaces more effectively with the right co-ordination.

Mr Shabane concluded by presenting a slide on the outlook for the next six months.

Mr K Mileham (DA) first congratulated the Department on the unqualified audit, but expressed his concern that the Minister and Deputy Minister were not present for one of the most important meetings of the year, especially when the Auditor-General had highlighted leadership as one of his major concerns with the DRDLR. He then asked how it could be that only four out of eleven policies were submitted, yet almost 90% of the budget was used. That implied that money was being spent with no return, and he called for an explanation on that point. Mr Mileham was also concerned at the failure to achieve the vacancy rate target and asked for an explanation as to why the senior level posts were only 20% filled. This meant that 1 in 5 senior management members were not in place, which obviously impacted on the Department’s ability to perform. He expressed his deepening concern with money spent on Employee Compensation, which was standing at 97.4%, even with the 16% vacancy rate, and asked how that was possible. It implied that people were being paid but no one was in place to receive these payments.

Mr Mileham asked for comment on the Auditor-General’s remark that information was not always reliable. Following on from this he said that although the presentation said that four policies were submitted, only three came to Parliament, and that was in the 2013/2014 financial year. He added that the Department could not claim to have submitted when the years did not tally. He was concerned about the delays in the administration system, including registrable diagrams and was dismayed that this was not yet brought down to manageable levels. He was deeply concerned at the state land audit as the report stated that 99.5% of the land had been audited. There was 8 million hectares of land that was undefined in that audit, so he questioned the accuracy of the 99.5% figure, and asked for clarity on whether it did not include the undefined land. The restitution and land reform programmes seemed to have been better managed, or have better targets.

Mr Mileham was relatively happy with the financial performance summary although he enquired about the unspent funds of R55 million (0.6%) which were attributed to delays in filling vacant funded posts. If the actual expenditure was subtracted from the budget, it added up to R55 million, but on another slide the figure was stated at R136 million and he questioned where this figure came from. He also had an issue with the establishment and 49% vacancy rate of personnel for the Rural Development Programme, and said this needed to be addressed urgently. AGSA’s report listed problems in service agreements, verification of qualifications and employees who did not sign their performance agreements. Management of HR was also a major concern and he requested comments on that.

Mr Mileham noted the further funding requests and the 2014/15 summary. He was very wary that legislation costing R179 billion was set to be introduced, when it appeared that there had been no planning for it, and insistence that further guidance would be needed.

Ms P Ngwenya- Mabila (ANC) had an issue with the two deliverables being removed, from the Renewal Strategy of Programme 1 and wanted to know the reasons for this. She asked when the policy referred back for more consultation would be finalised, and asked why the targets for other policy finalisation were not reached. She agreed that there had been progress as the Department had moved to an unqualified audit, but felt that more effort was required still.

Ms Ngwenya-Mabila commented on cases where the Department made plans but where implementing them proved problematic. She noted that many of the policies were only implemented in the last quarter. She also had an issue on the overspending. Spending by September of  this year was supposed to be at around 50% and she asked what plans were in place to prevent over spending. She asked if the Department had, and was implementing an HR plan. She too had concerns around the vacancy rate. She applauded the Departments’ endeavours in supporting ailing beneficiaries, but said that there were challenges with partners, and some were not including the beneficiaries of land in skills development and so the farm lands were simply being exhausted. She wanted to know what plans were in place to address this. She applauded NARYSEC, saying that it was a good programme that provided young people with skills. She asked whether there were any other  more integrated and involved programmes so that more young people can be placed elsewhere, as although it was wonderful to try to change the lives of young people and end unemployment, coordinated efforts would be needed, and DRDLR would need to communicate with other departments and get advisors and helpers.

Mr M Swathe (DA) wanted to know more about the restitution targets set. He wanted to know why only 376 land rights were restored out of the target of 380. He asked for more information on the irrigation scheme, and the challenges. He questioned money being moved away from Rural Development, as well as money being moved from Land Reform to Restitution. He wondered how the Department could shift funds around now, as a new Bill involving restitution was set to come into effect and would require funding to implement. He then asked for more specifics on some of the programmes and their priorities. He also had an issue with an aspect of the financial performance regarding land reform, because the Second Quarter Performance report was listing the spending as only 46%, and he questioned why it was so low.

Ms N November (ANC) asked why policies were being submitted so slowly and why only four were submitted, maintaining that this was an urgent need. She asked what more was being done by the Department to ensure that there would be further skills creation, particularly for scarce skills. She wondered if the Department was using time frames in its planning; she thought not. In relation to rural development, she applauded the food security interventions under Programme 3 but also wanted to know how the programme was being made to continue. She also brought up the question of the Annual Report service delivery improvement, commenting that many of the numbers were missing. She wanted an explanation why the Deeds Office did not meet targets.

Mr S Ntapane (UDM) asked why it was that every year there were many targets that were not met, and asked if this was due to the Department not paying close enough attention to setting them properly in the first place. He wanted details of the expenditure on goods and services noting that he thought that more money had been collected than spent, and why then did it show as a negative? He was concerned about the under spending on land reform.

Mr Ntapane pointed out that the two columns of figures in the Annual Report contained different figures, and those would have to be clarified. He asked about the high resignation figures, for levels three to five, and said that turnover in staff was caused there. He wondered about the  problems in filling vacancies, and questioned the reasons for employing foreign workers, given South Africa’s own high level of unemployment. He also asked how far the Department was in conducting its investigations. He then asked why there was a very low transfer to provinces and municipalities. He wanted more detail on the fruitless and wasteful expenditure. He pointed out that in the years 2011 and 2012 the same financial figures were listed for both, and questioned if this could be correct. The Auditor-General had also given different figures to the Committee.

Mr R Cebekhulu (IFP) asked for more information on CRDP. He understood the good intentions of creating one job per household, but asked whether the jobs being created were sustainable, and what the figures were. He asked if the funding for the Land Reform programe was being used for other causes, and if so, what they were. He wanted more detail on the figures of R10.4 million cited for the 2011/12 and asked what caused the ballooning of money in this year.

Ms P Xabu (ANC) echoed concerns of her colleagues that the DRDLR was giving jobs to foreigners instead of locals. She had young people visiting her office daily asking for jobs, even despite their degrees and diplomas. She wanted more details on what would happen to those who did not graduate from the NARYSEC programme. She asked for more details on the Gauteng province.

The Chairperson wanted to hear more on the issue of overspending and the fact that often the spending was out of kilter with the achievement of targets. He noted that the move from an qualified to unqualified audit was a step in the right direction. However, he expressed concern about the capacity to drive policy in the Department, and agreed with other Members that this must be an area of greater focus. The Department had to respond on the skills shortages and actively encourage young people to enter into these areas of work. South Africa had come from a system that had created depression in the minds of those oppressed, but a prime way to reverse that was to encourage the youth to study and work hard – this may even be a long-term programme. He reiterated that skills were needed in abundance to help everyone, and that the DRDLR would “make or break” how South Africa handled poverty. The right people were needed, in the right areas, to work the land in the right way. He then asked if there was a long term plan for young people, from the lowest grades right through to their exit from universities with degrees.

The Chairperson noted that during oversight the Committee had visited an area where a partnership project had been created, but those exiting had not passed on their skills, with the result that those remaining fell into debt. Fortunately, they worked hard and did manage to get out of debt, but this was a prime example of how the Department must set a long- term forecast for projects. He emphasised that people who were given land must utilise it properly and that the Department must say what its mission was. A problem with government at the moment was the lack of dedicated teams to implement projects, which would create more positive incentives. This Department should provide answers to these questions.

Mr Shabane said that the worst problems around the immovable asset register were solved already, and that although the matter was not yet over, the Department was addressing the previous situation and moving on. He noted that several matters had been raised by the Members which he would not attempt to answer now, but he would circulate a more detailed report with more specific details than the Annual Report, to Members. He assured Members that the targets for policies listed and submitted were not a “thumb-suck”, but that the Department thought that sufficient work had been done to get them through.

Mr Shabane dealt with issues around the high vacancy rate, the high expenditure and skills shortage. In relation to the policy on foreign workers, he noted that questions on employment of foreigners had been sharply raised in the Director General clusters, and that the DRDLR had to go back and do more work on the policies around foreign employment, to get them through this Cluster. The Department had spent ten years developing the policy. It raised thorny issues. He asked if this policy would in any way be likely to deter investors – something that not many considered. In respect of the Land Commission, the Department felt that progress had been made from last year. The issue of land affected all custodian departments, and impacted on the mandates of government. Ministers in clusters often went back and forth on policies, but in short he wanted to say that the policies of the DRDLR would assist the Department in consolidation post democracy. Provincial governments, under apartheid, had their own deeds registries, but hardly any of the former homelands had any database of land ownership in South Africa. This meant that the DRDLR had to undertake huge land audits. It had learnt from experience. It was certainly not for want of trying that the Department had failed to reach the targets, and the Department had actually seen the amount of work in progress, which was not apparent from the paper reports. He conceded that the DRDLR did not have all the expertise it needed, and that it had underestimated the resistance experienced. Departments and Committees needed to consult together more often, as the impression was sometimes created that there was collusion within departments when this was not so.

In hindsight, he could admit that perhaps the Department was rather over-ambitious on its targets. However, as the Department moved forward from 2009, it had to review structure in many areas across the board which contributed to delays. He admitted failures in some areas, but stated that the Department could improve and no one person could be blamed. In regard to the vacancies, he stated that vacant posts could not always be filled quickly; this was dependent also on external agencies, but he was not placing blame.

Mr Shabane said that the reasons that some farmers succeeded was because of the institutions in place. During the apartheid years, there was a 65 year policy for farmers, and perhaps the same should apply today. There were not enough funds at the moment but it must be recognised that it was very important that farmers become successful. DRDLR was also currently in discussion with the Department of Agriculture, Forestry and Fisheries.

Mr Motsoeneng wanted to respond to the finance questions. He stated that the unspent funds were mistakenly recorded, and the corrections would be done. The Director General would be presenting the progress of the branches. All progress was being tracked by the Audit Committee to make sure that there was movement and that any non-compliance would be reported. In short, it was the responsibility of the Audit Committee to take action against officials not doing their jobs. In regard to irregular expenditure, he would outline the decisions made. In relation to questions about spending in Rural Development programmes, he said that the Department did not foresee any overspending, as adjustment estimates had been made and corrected. Once a budget was adjusted, it was possible to draw proper lists. The Department tried its best to avoid over-expenditure. The most recent Executive Management Committee had implemented austerity measures, which would be filtered down.

Mr Motsoeneng answered questions on the shifting of funds by saying that the numbers listed did not actually reveal anything negative. So called “wasteful expenditure” was done in respect of something that was recognised as a current asset, but no decision had been made on whether this amount was to be condoned; that may lead to money being recovered. He noted that the figures had been agreed with the AGSA.

Mr Motsoeneng added to the comments on employment of foreigners and clarified that the foreigners were only really hired in administrative jobs, where there were scarce skills.  It must be remembered that some so-called foreign employees might not have been born South Africa, but had now acquired citizenship. The turn- over of staff was mostly of junior positions in the Department. This included resignations, promotions or transfers to other departments. He admitted that this was not normal, but it happened. There was also a HR plan for three years, with an annual update. This was an approved plan.

Mr Motsoeneng commented on the renewal strategy and renewables and said that two deliverables were indeed removed from Programme 1, but that did not mean that there was no development of policy in the institutional area. The Department did not currently have a Chief Director to handle communications, so the communication strategy was lacking.

Mr Mosoeneng addressed the question of why 99.5% of the budget was spent but four out of ten targets achieved. Certain things - such as bringing in international researchers and communicating with them, meetings with Portfolio Committees and the travel and accommodation associated with that – meant budget implications. The question might be asked then how much budget was actually allocated to the main targets.  portfolio committees and travel expenses such as staying in hotels all takes from the budget. Most of the budget money actually was allocated to the main target.

Mr Mahlangu commented on the beneficiaries. He said that if DRDLR did not build a relationship with the beneficiaries, it would be lost. On 21 September, farmers were asked to tell their stories. The farms in the areas visited by the Committee had been restituted in 2001 but acquired only in 2005. The Department had tried to appoint people to work with the farmers in those areas, but did not have anyone with the right skills, and there was also a prioritisation of some farms. 2 400 beneficiaries were connected to farms, taking up over 300 000 hectares of land. The income generated was used for the compulsory legal entities. It was a tedious process, but this was done intentionally, to ensure that when people were given land, it would end up in the right hands being worked.

Mr M Shabane said, in regard to capacity questions, that there were courses being offered at the Universities of Cape Town and KwaZulu Natal, and surveyors from the Department were working in conjunction with the faculties, to ensure that they continued to offer those courses. Apart from these, there were very few other programmes that were actually supporting land reform or offering land-related studies. He said that the Department would have to do a proper study on a potential programmes. The Department believed in developing partnerships with schools, universities and government to reverse the legacy of apartheid.

Mr Shabane responded to questions on the budget and said that the Department did have a plan, but that the needs were affected by what was happening. The DRDLR was not quite in the same position as others, being able to ask for and work within a set cash plan. Some claims needed to be processed quickly. People were waiting to claim land, then other claims superceded, and some of the land was under lease agreements. He noted that some of the land was also in the hands of the state.

The Chairperson said it was clear that the challenges the Department had to face were huge. When government announced that it was the centenary of the Native Land Act the need was highlighted for having a set process. It would be a major challenge if problems were raised that required a Department to spend more and more, without reaching the original targets, and he felt that the Department and Committee needed perhaps to work more closely on setting targets. Ideally there should be policies, but where there were not, there must at least be strategies. The Committee needed to decide how best to exercise oversight. Some matters would clearly not be able to be resolved overnight. Plans, however, were needed to avoid recurrence of mistakes in managing the targets. It must always be remembered that any delays were affecting the ordinary public. Politicians could happily play with words, but the public was getting impatient, so urgent ways to address the problems must be found. It troubled him to see people waiting for land, only to be told that the Departments were waiting on policies. However, he was impressed by the indications that some matters had improved, and urged the Department to develop skills – not an easy task but one that required constant work. He also noted the need for constructive oversight by the Committee. He concluded that the DRDLR must be working to get an improved audit.

Ingonyama Trust Board:  2012 – 2013Annual Report Presentation
Mr Nqgabutho Bhebhe, Chief Executive Officer, Ingonyama Trust Board, said that the Ingonyama Trust Board (ITB or the Board) saw itself as  real estate management entity. There were three categories of leases: short, medium and long term, and expanded on the land tenure rights and land holding issues (see attached presentation) to which ITB was bound. The Board reported quarterly on its achievements.

Applications for infrastructure development on ITB land were dealt with in the Department. Clients (such as Eskom) had to apply. ITB had had 43 applications in the previous year. The Board had a unique Geographic Information System called the Land Tenure Information System (LTIS), that mapped all leases given on ITB land and held all records of available land for applicants.

He listed the number of agricultural projects approved for financial support by the Board for the 2012/2013 year and added that the Board would in turn then make sure that they became part of the food security programme and the 100-hectares programme. The ITB supported an agricultural project in Zululand under the Mbatha Traditional Council and another under the Obizo Traditional Council in the Uthungulu District Municipality. Under Special Projects, a study was conducted in the Emafezeni area. ITB also continued to assist small towns and the communities to empower these traditional communities on land management. He mentioned that growing towns often had no records of formal documents to assist them, so the completion of audits in small towns was an on- going project.

Mr Bhehbe displayed a diagram showing land lease targets and the annual performance. The target for administration of ITB land leases had been 1 031, and out of that 859 were achieved. The reason for the ITB falling short of its target was that people applied, then dropped out of the process before finalisation. It was the Boards’ intention to tenure ITB land.  He added that there were also other departments working alongside the Board, to empower traditional leaders and councils. He stressed that a standardised approach was needed for this, depending on the wants of traditional councils. All the organisational work was done by the ITB’s secretariat. He briefly displayed a diagram that listed employment numbers and vacancies.

Mr Devendla Heeralal, Accountant, ITB, listed the financial position of the ITB for the 2012/2013 period. He listed the amount of total assets, consisting of non- current and current assets, at around R298 million. Total liabilities stood at R187 million and net assets at R110 million, a slight increase on the previous year. He then gave an overview of the financial performance of the ITB for the year, showing income, spending and a surplus of R11 million – an increase from the R2 million of the 2011/12 period. The cash flow statement was also displayed.

Mr Bhebhe then discussed with the Committee the viewpoints of the Auditor-General (AG) on the ITB audit. The AG had noted that not all land had been evaluated, and believed that this would have to be done to fix a material benefit or value. However, the ITB stressed that this was not commercial land that could be sold in the future. The task of doing land evaluations would cost money, and ITB might even have to take money from the communities to do such evaluations.

The AG had also commented on the incompleteness of royalty revenue and income. Mr Bhehbe believed that some of the suggestions for getting financial information and audit certificates from the mining houses were impractical – and pointed out that their financial years were different from that of the ITB. It would also cost money to send auditors to visit the mines. Some of the mining houses had started to comply but the Board was still unsuccessful in obtaining audit certificates from mining operators. The mines also paid royalties to the state. He stated that the Board would continue to push for audit certificates in the future. The real issue, though, was that money received needed to be accounted for, and there must be adequate controls around that.

Mr Bhehbe noted that in relation to provision and purchase of shares, there was a mention, in the 2011/12 audit report, of poor communities who had requested assistance from the Board in becoming shareholders in the Zululand Anthracite Colliery mine. They had sought to buy a 13% stake in the Maweni Consortium. In response, the oKhuku Community Trust was created, and the shareholding was transferred in the name of the four communities holding shares in the Maweni Consortium. That Trust was now able to attract dividends from the mine, but this had caused the royalties to diminish.

Ms November asked if the Board had any concerns about the royalties. She also wondered about the additional and vacant posts and asked how many women were being considered, especially young women.

Mr Swathe also sought clarity regarding the number of posts that were indicated as vacancies and wanted an explanation on the opening of new posts, as well as an explanation of why figures differed from one column to the next. He asked whether there were any disabled people working for the ITB.

Mr Swathe asked for clarity on the non-evaluation of land, and whether the ITB staff decided on the categories of leases. Most of the companies leasing land were mines and consortiums. There was no indication whether the money being generated through the mines and consortiums was being audited or not.

Ms Ngwenya-Mabila asked about the Ingonyama Rural Development Forum, its composition and function, and how many members it comprised. She asked why the amendment to the Ingonyama Trust Act had been so long delayed. She also questioned the vacancy and posts figures, noting that the ITB report listed 27 staff, with 23 posts filled and 4 vacant, but why then the Organogram showed additional staff. She noted that the Annual Report said that the Secretariat operated with 26 full time employees, but the Chief Financial Officer report referred to 11 contract employees, and asked for clarity on that.

Ms Ngwenya-Mabila asked why the Eskom employee had not attended any meetings in this year, and if this displayed a lack of seriousness in doing the job. She asked, in relation to the agricultural project under the Obizo Traditional Council, how much was spent on this and on other projects. She asked when the satellite offices would be opened, and where. She wondered what the subject was of the research project, on which the ITB spent R545 000. She wanted clarity on the R15 000 listed under the Ulundi offices.

Ms Ngwenya-Mabila asked how much the audit had cost. She wanted more clarity, and an estimate of the claim amount, in the dispute between the ITB and the eThekweni municipality regarding the payment of rates. She was concerned about the large budget for travelling, accommodation and meetings. She noted an additional R324 000 attributed to environment and stated that this was over and above the amount reserved for employee compensation, and wanted more clarity on that. The one issue not discussed had been the AG’s comments on compliance, reporting policies and procedures, leadership competency and listing oversights, and she wanted to know what plans were in place to address these.

Mr K Mileham noted that in the Annual Report the Board members were listed but the members of the executive committee were not. However, the Report stated that during the area of review the executive committee advised and made recommendations to the Board to give the effects, aims and purposes of the Trust. However, over the page, the Board’s photographs appear. He asked if the Board was actually advising itself, and said that it seemed that there were only two committees, both doing the same job. He called for clarity.

Mr Mileham also wanted to address issues raised by the Auditor-General. The biggest issue concerned the evaluation of assets, land and property. Even where land had been evaluated an a figure fixed, the report listed the land as “unknown”. Even if the land was listed as zero value, that would be a known value. Every municipality valued property so there should be a Valuation Roll figure that could be used for compliance purposes, at little expense. He added that the ITB also had a great GIS system, so valuation of land should be fairly easily implemented. It would also bring the ITB into compliance. Mr Bhehbe had touched on royalties and shares. However, he had not dealt with some of the other findings; specifically the ITB's compliance with section 53(3) of the Public Finance Management Act (PFMA), because the ITB had accumulated a surplus without authorisation from the National Treasury. He then quoted, in relation to expenditure management, that “management does not exercise oversight over funds disbursed to traditional councils.” He asked what that related to, and asked for clarity. He also noted a comment on non-compliance with section 53(1) of the PFMA, relating to asset management, and proper controls concerning immovable assets” and again requested clarity.  

Mr Cebekhulu asked whether the ITB-rated businesses that had leases with the ITB were being charged according to the size of sites occupied, or according to the size of income they generated. He noted that one person in KwaZulu Natal had complained that he was required to pay exorbitant lease charges.

Ms H Matlanyane (ANC) wanted to establish who was paid, and what for, according to the financial statements. She also asked for clarity on the skills levy and what it entailed. She wanted to know the basic salary per month of the ITB employees, and the monthly salary of the Acting Chair, the CEO and the CFO. She asked what necessitated the increase of the Secretariat, what its responsibilities were, and what it did on a daily basis, and did not understand why the ITB fell under the DRDLR. She finally asked about the working relationships and level of cooperation.  

Ms Susan Berend (COPE) noted the areas in which the ITB had done well but added that it was a cumbersome report. Despite the fact that all posts in financial administration were filled there was no movement at all in improving, which was a problem. She asked whether there was a shortage of skills in that area, and the reasons.

The Chairperson was interested in hearing more about the land tenure system. All land tenure applications were subjected to certain dividends applied by the Board for consideration. He asked the ITB to share with the Committee a couple instances where the information was provided through this system.

Mr Bhebhe responded that the Board attended to such projects listed in the Annual Report in order to provide bursaries for students. The ITB wanted to provide bursaries to the children in the communities and he added that money was reinvested. The Board was busy debating whether one traditional community might be entitled to more than others, based on their situation. In relation to the questions whether posts would be filled by women, he said that he could not comment until decisions were taken on that. ITB had one disabled Board member. All the money of the ITB was audited, and all its income came in the form of leases. He gave a general answer regarding land managed by the ITB, saying that its mandate was communal land, but increasingly the Board was being approached with queries about paperwork and boundaries. Most of the leases being discussed were residential leases since the types of leases were not really suitable  for business. The amount for leases varied from location to location, but people with a residential allocation did not have to have a lease with the ITB. In regard to the business leases the ITB had a formula, particularly for agro-businesses, as this was one area that the Board particularly wanted to promote. However people could not get funding if they did not have a have a land owners letter, which was similar to taking out a lease with the ITB. People also need to approach the land owners if they wanted like to start a business.

Mr Bhehbe gave some clarity on the Ingonyama Rural Development Forum. This was instituted by His Majesty the Chairperson of the Board. It was an informal forum that comprised different people with different skills, including academics and people from the government. It offered a place for debates and discussions around issues pertaining to rural development.

Mr Bhehbe responded to the question on the delays in passing the amendment of the Ingonyama Trust Act. He stated that many Board members felt that the Act was not keeping up with the demands that the Board was facing as a land owner. The last time the Act was amended was in 1997. It would be important to have a discussion with the key stakeholders before the amendment was passed, as the key stakeholders were the traditional leaders.

Mr Bhehbe addressed the issue of additional staff. The Organogram showed an approved establishment of twenty- seven employees, although one of those posts was a cleaner. In fact, this post had never been filled, because the ITB hired contract workers to clean. In order to fund the additional post, he noted that ITB had revenue from two sources, but ITB actually used a lot of money from its own coffers, to get things done. How much would be used on each project at any given time would depend on the amount the traditional council had at the time, but whatever was used, it would be documented. There were still some satellite offices in the pipeline but one was opened this year in Ulundi. The budget of R15 000 related to their establishment. In answer to the question why some Board members were listed as Eskom employees, he said that they may have worked for Eskom. The Board were paid according to Treasury requirements, but a new rate applied from October. The Secretariat was at government salary level 13, and the Chief Financial Officer at level 12; they were not entry-level posts.

Mr Bhehbe said that the ITB had looked at using the municipal valuations but said that each province has to depend on its own municipalities. On valuations, he said that when land was valued, it must be remembered that there were private owners, and so the Board could not take base figures at face value. Not all the figures had been thoroughly investigated.

He said that the matter between the Board and eThekwini was finalised at the Constitutional Court in June this year. The Metro had lost. The Board was still trying to work with it. On the question of proper leadership, Mr Bhehbe thought that the comment of the AG related to the policies around the transfer of shares. Turning to the question of how the leases were rating, he said that if a person presented the land coordinates to a Board official, then that person could be told what land was owned by the ITB, what was private land, and whether it was subject to a lease.

Mr Bhebhe said that the ITB had two sources of income- the one was mainly administrative an the other from the traditional councils. He said that surpluses could not be returned. The owners of those funds were the communities. This had been discussed with the AG.

Mr K Mileham thought this could not be correct. On the income, he noted that R18 million came from the Department, R41 million from leases, plus royalty revenue and various other sources of income such as R8.7 million from the bank, with the total revenue being R70 million. However, the PFMA specified that no government department could make a surplus. If it did so, it was effectively taking R11 million of the Department’s money and putting it into the ITB’s bank. The Board had consolidated this in the income statement, but the point was that the ITB was not permitted to have a surplus.

Mr Bhebhe responded that ITB was a unique entity, having traditional owners that were not part of the Board for whom it worked.

Mr K Mileham reiterated strongly that the ITB still was using taxpayers’ money. He accepted that the money came from the traditional leaders of the communities in question and that that money was being used for them, but it did not change the nature of that money. The ITB only got money from the DRDLR to balance the budget. Taxpayers’ money was to be used on taxpayers, not a surplus.

Mr Bhehbe said that this being the case, government would have to give more funding or the money must be found elsewhere.

A Member said that if the ITB was a commercial entity it could keep the surplus, but because it fell under the DRDLR it was supposed to have made application to National Treasury if it wished to do so. National Treasury was also not informed about the surplus

Mr Swathe was not satisfied with the response and said that the DRDLR was accountable and must accept this. He thought Mr Shabane might be able to comment.

The Chairperson heard these points and was sure that the ITB was not being dishonest, but the Committee would have to evaluate that point, and come up with a ruling on that for the future. He said that the first question was what the mandate said, and when that question was answered, others would fall into place. This was indeed an anomaly that would have to be addressed. He thanked the Board for the honest report. He commented that there seemed to be a good relationship between the Board and the DRDLR and that gave a better chance of cooperation to reach maximum compliance. This Committee must ensure that every cent of government money was being spent properly.
The meeting was adjourned.


  • We don't have attendance info for this committee meeting

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: