The Department of Agriculture, Forestry and Fisheries, together with the Office of the Auditor-General of South Africa, briefed the Portfolio Committee on the second and third quarter expenditure and performance of the Department for the 2014/15 period.
The findings of the Auditor General (AG) revealed inconsistencies between the planned and reported objectives and targets. The root cause pointed to internal control deficiencies, which indicated that the Department’s strategic plan was not consistent with its annual performance plan (APP), as required by the National Treasury.
On Programme 2 (Agriculture Production, Health and Food Safety), the AG discovered there had been no consultation with stakeholders during Quarter 2 regarding the Gap Analysis Report on the animal disease management plan. There had been no supporting documentation for the reasons for the variances listed. For Quarter 3, 12.5% of reasons for variances had been unreliable, and 12.5% of reported targets had not been valid and accurate. The Department had commissioned the construction of trucks to be converted into mobile veterinary clinics, but the clinics had been delayed. There had been no documentation to support the reason for this.
Concerning Programme 3 (Food Security and Agrarian Reform), the AG reported that 40% of reasons for variances had not been provided, and that 20% of reported targets were not reliable. Out of the 16 000 smallholder producers that were to have been supported during the 2014/15 period, only 3 000 had received support during Quarter 2. As per the 2014/15 APP targets, the Department had had to develop norms and standards for comprehensive producer development support. The consultation process was expected to take place during Quarter 4. The AG said the comment on the deviation noted in the report did not provide a reason why the target had not been met.
On Programme 5 (Forestry and Natural Resource Management), the AG reported that 50% of the reasons for variances were not provided, while 50% of reported targets were not reliable. 500 ha of woodlands and indigenous forests should have been rehabilitated during this financial period. Quarter 2 had seen 125 ha of woodlands and indigenous forests rehabilitated. The AG could not verify the reliability of the reported targets, because daily and monthly reports had not been received.
The Department of Agriculture, Forestry and Fisheries (DAFF) indicated it had achieved 79% of all its annual set targets. It had focused on accelerated production to enhance food security. The Cabinet had approved the national policy on food and nutrition during September 2013. The Fetsa Tlala (End Hunger) food production initiative had been launched in order focus on under-utilised agricultural land and the production of staple food, to realise enhanced food production at national and household level, and to place one million hectares under production.
The DAFF had commissioned the construction of pre-fabricated mobile veterinary clinics. A draft report had been received from the World Organisation for Animal Health and shared with the Committee. Genetic material had been collected for both indigenous Namaqua Afrikaner sheep and speckled goats. Pest management interventions for invader fruit flies had taken place in Limpopo, KwaZulu-Natal and Mpumalanga.
Concerning fisheries management, 2 516 sea-based and land-based inspections and investigations of rights holders had been conducted in the four prioritised fisheries sectors. The Small-Scale Fishers Policy had been implemented. Permit conditions for West Coast rock lobster and abalone for 2014/15 had been formulated and approved. Research on the conditioning of brood stock and spawning induction methods had been conducted on spotted grunter.
The risk management implementation plan had been approved and implemented. Five sectoral policies had been reviewed for alignment to key strategic priorities and protocols. The strategic plan and APP and had been aligned to the Medium Term Strategic Framework.
On the issue of deregistering the Ncera Farms, it was reported that this was the responsibility of the Department and Minister, and the process had been initiated. The intention was to align deregistration with the transfer. Documents had been sent to the Ministry to effect the deregistration process. The delisting had not happened yet. The letter was still to be signed by the Department of Finance because it involved the transfer of a public entity from one department to another.
Members voiced concern about deficiencies reported, such as invalid ID numbers and tractors that were never delivered to provinces, yet the Department had not reported to the Committee to confirm these matters. They felt it was unfair to have to debate the reports of the Department for Quarters 2 and 3, because they had received them only when the meeting started, and it was suggested this matter should be reported to the Speaker of the Parliament. They remarked that there was inconsistency in what the Department said it does, and what was seen on the ground. Was the Department still on course to meet the 2019 target of one million ha of land for Fetsa Tlala? Were regulations in place for importing maize because of the drought? They criticised the Department for not doing its work on Ncera Farms since their oversight visit.
Briefing by Office of the Auditor-General of South Africa (AGSA)
Mr Fanie Kock, Senior Manager: AGSA, briefed the Committee on the review of the second and third quarter monitoring reports for Programmes 2, 3 and 5 of the Department.
Programme 2: Agriculture Production, Health and Food Safety
As per the 2014/15 APP targets for Quarter 2, the animal disease management plan had been developed, and the Gap Analysis Report was to be discussed with the stakeholders. Though the report had been developed and accepted during Quarter 1, no consultations with stakeholders had taken place in Quarter 2. The AG indicated there was no documentation to support the reasons listed for variances.
In Quarter 3, the AG discovered that 12.5% of the reasons for variances were unreliable, and 12.5% of reported targets were not valid and accurate. As per the 2014/15 APP targets, two animal improvement schemes had been monitored and their performance data collected. Data collection was said to be continuing well. The AG noted that the report drawn for the collection of the data was dated 23 January 2015. Therefore the target was achieved only in Quarter 4. No reason was given for the variance listed in Quarter 3.
The Department had commissioned the construction of mobile clinics. However, the construction of the 28 to 32-ton trucks, to be converted into mobile clinics, had been delayed. The AG found no supporting documentation to support the reasons listed for variances.
Programme 3: Food Security and Agrarian Reform
With regard to Quarter 2, the AG had uncovered that 40% of the reasons for variances had not been provided, and that 20% of reported targets were not reliable. As per the 2014/15 APP targets, the Department had had to develop norms and standards for comprehensive producer development support. These norms and standards were still being developed in partnership with the National Agricultural Marketing Council (NAMC). The consultation process was expected to take place during Quarter 4. The AG indicated that the comment on the deviation, noted in the report, did not provide a reason why the target had not been met. It stated only what had been done in the quarter and what still needed to be done for the target to be achieved.
Out of the 16 000 smallholder producers that were to be supported during the 2014/15 period, only 3 000 smallholder producers had been supported during Quarter 2. The audit had been performed for verification and completeness, and findings had been identified. The AG stated that the detailed listing did not agree with the figure reported in the Quarter 2 report. The AG further noted invalid ID numbers, and some ID numbers noted on the listing did not agree with the supporting documentation. Attendance registers had not been signed by participants, and the attendance registers had not been prepared on official DAFF stationery. Not all supporting documents were available.
Programme 5: Forestry and Natural Resource Management
Concerning Quarter 2, the AG said that 50% of reasons for variances had not been provided, while 50% of reported targets were not reliable. 500 ha of woodlands and indigenous forests were to have been rehabilitated during this financial period. Quarter 2 had seen 125 ha of woodlands and indigenous forests rehabilitated. The Department had not supplied monthly reports, but only consolidated reports from the regions. The AG noted that consolidated reports were currently available and indicated the number of hectares rehabilitated. The daily and monthly reports had not been received, and the AG could not verify the reliability of the reported target.
Regarding Quarter 3, 20% of reason for variances had not been provided, while 20% of reported targets were not reliable. According to the 2014/15 APP targets, 500 ha of woodlands and indigenous forests were to have been rehabilitated during the 2014/15 period. The target set for Quarter 3 was 125 ha. A total of 125.65 ha of state indigenous forests had been rehabilitated. However, no reason had been provided for exceeding the target.
Another target of 125 out of 500 ha of woodlands and indigenous forests had been set for Quarter 3, but the regions had not provided monthly reports. The AG had found that it was only consolidated reports that indicated the number of hectares rehabilitated. The monthly reports that filtered into these consolidated reports had not been received. Therefore, the AG could not verify the reliability of the reported target.
Ms Meisie Nkau, Business Executive, AGSA, informed the Members that the information presented on a quarterly basis had to be complete and credible, because it was presented for audit, and was finally included in the annual report. She suggested the Committee should call upon the DAFF audit committee to make sure that what was presented was credible. All the deficiencies should be picked up during its interactions with the audit committee. Information provided to the Committee should first be presented to the internal audit committee before the Department presented it to the Committee, so that the facts were verified and the information presented was credible and reliable.
If systems were not working, it was clear the information presented to the Committee would not be reliable. The credibility check was done only at the end of the year, not quarterly, and the Department needed to address this. If this was not done, then consequence management should be administered.
Briefing by Department of Agriculture, Forestry and Fisheries (DAFF)
Ms Edith Vries, Director General, DAFF, said that the Department had achieved 79% against all annual set targets. Total expenditure for Quarter 2 per economic classification and per programme was standing at 26.6%. Total expenditure for Quarter 3 per economic classification and per programme was at 28.8%.
(Tables and graphs to illustrate budget expenditure were shown)
The Department had focused on accelerated production to enhance food security. The Cabinet had approved the national policy on food and nutrition during September 2013. The Fetsa Tlala (End Hunger) food production initiative had been launched in order to focus on under-utilised agricultural land and the production of staple food, to realise enhanced food production at national and household level, and to place one million hectares under production. The Minister and Deputy Minister of DAFF, with provincial and local leadership, had unveiled a “food mountain” on 16 October 2014 in commemoration of World Food Day.
The Department had mobilised and supported smallholder producers to increase production and access export market opportunities through the World Food Programme (WFP). 11 026 smallholder farmers had been supported with technical advice and training. Six fish farms had been supported through the Aquaculture Development and Enhancement Programme.
The National Extension and Advisory Services Policy and its implementation plan had been approved by MINMEC at its 26 September 2014 meeting. 72 cooperatives had been supported with training. The fruit industry value chain network had been institutionalised and working groups established.
The Department had commissioned the construction of pre-fabricated mobile veterinary clinics. A draft report had been received from the World Organisation for Animal Health and shared with the Committee. Genetic material had been collected for both indigenous Namaqua Afrikaner sheep and speckled goats. Pest management interventions for the invader fruit flies had taken place in Limpopo, KwaZulu-Natal and Mpumalanga.
The draft Cabinet memo on the signing of the Comprehensive African Agricultural Action Plan (CAADP) compact had been presented during the African Renaissance Committee that was held on 18 November 2014, and the Minister had approved it for submission to the Cabinet for final approval.
Concerning fisheries management, 2 516 sea-based and land-based inspections and investigations of rights holders were conducted in the four prioritised fisheries sectors. The Small-Scale Fishers Policy had been implemented. The permit conditions for West Coast rock lobster and abalone for 2014/15 were formulated and approved. Research on conditioning of brood stock and spawning induction methods had been conducted on spotted grunter.
Regarding governance and administration, the risk management implementation plan had been approved and implemented by the Risk Management Committee. Five sectoral policies were reviewed for alignment to key strategic priorities and protocols. The Strategic Plan and Annual Performance Plan had been aligned to the Medium Term Strategic Framework (MTEF). The communication strategy has been aligned to the MTEF and media plans had been implemented for key events such as the Female Entrepreneur Awards. Funds had been disbursed to the Agricultural Research Council and universities for targeted research and development programmes.
On human resources, it was highlighted there were more men than women in the Department, particularly at senior management level. As a result, in its advertisements for senior managers, the Department had encouraged females and the disabled to apply. In the short term, this gap was not going to be reduced because of the reduced rate of filling positions. The Executive Management Development Programme had been devised to favour young women. The Department had noted that the bulk of its workforce was aging. The management practices had greatly improved and the reduction in the number of grievances lodged and disciplinary cases addressed proved this.
The vacancy rate was said to be fluctuating. At the end of the 2013/14 financial-year, it was at 9.6%, below 10%. However, during Quarter 1 of 2014/15, it rose to 10, 3% and was at 11% on 1 January 2015. The increased vacancy rate was due to the freezing of filling of positions, owing to the budget cuts which the National Treasury had imposed on the compensation of employees.
(Tables and graphs were shown to illustrate the staff profile and HR dashboard)
Ms Vries said the Department had not achieved its targets in a number of areas. Among other things, not all of the 18 500 ha of agricultural land had been rehabilitated. Internal consultation on the draft Aquaculture Bill had not taken place. About 20 000 ha had not been cultivated for food production in communal areas and land reform projects. The comprehensive Agricultural Information Management System (AIMS) had not been completed.
To remedy the situation, the Department had developed a Corrective Action Plan. Its main objectives were to strengthen consequence management in order to encourage behavioural change, improve risk management and reporting, reduce repeat audit findings by 60%, strengthen interdepartmental cooperation and collaboration, and accelerate collaboration with stakeholders through existing forums and commodity group deployments.
Transfer of Ncera Farms (Pty) Ltd
Mr Joe Kgobokoe, Deputy Director-General, DAFF, informed the Committee that the established task team had reported that the deregistration of Ncera Farms was the responsibility of the Department and the Minister, and the process had been initiated. The intention was to align deregistration with the transfer. Documents had been sent to the Ministry to effect the deregistration process. According to the arrangements, the farms were to be transferred to the Agricultural Research Council (ARC).
It was noted that the delisting had not happened yet. The letter was still to be signed by the Department of Finance because it involved the transfer of a public entity from one department to another. The matter of transfer of staff still awaited further discussions and recommendations from the task team.
Mr Kgobokoe also indicated there was a proposal to hand over movable and non-movable assets to the ARC. This is still work in progress, and the ARC had been engaged on the possibility of handing over the operational area of the centre. Furthermore, the Department of Rural Development and Land Reform (DRDLR) had been approached to deal with the farms, and was working on an approach to take over the farms.
The role of the Department of Public Works (DPW) had been to research and to present the ownership status of the Ncera Farms in totality to the task team. The ownership status had been presented to the task team. The farms had been registered under the Minister of Public Works, the South African Development Trust, and the Minister of Rural Development and Land Reform. The support of the farmers would be taken care of by the provincial DRDLR.
Ms A Steyn (DA) commented that last year the Minister and the Department had made commitments that documents to be presented to the Committee would be submitted in time, but the presented report was not showing any signs of improvement. She was concerned about the deficiencies noted regarding invalid ID numbers and tractors that were never delivered to provinces, yet the Department had not reported to the Committee to confirm these matters.
Mr Kock said the monitoring of commitments was an internal audit role to make sure information coming from the management of the Department was verified and credible. When the audit committee went through a report, it focused on high-risk areas. Then when the audit was done, the Department was taken through the findings so that it could assist the audit committee with fact verification. All the issues had been followed up and discussed with the Department.
Mr T Ramokhoase (ANC) wanted to know what the AG did when the report gave no reason for variance, before coming to the Committee.
Mr Kock explained that the Department was given the opportunity to present to the AG, but if it gave the AG unreliable information, the issue would remain in the report.
Ms Z Jongbloed (DA) asked why a sample of Fisheries was not included in the sample the AG had presented to the Committee.
Mr Kock replied that information would be requested from the Fisheries Department of the Western Cape, and would be forwarded to the Committee.
Ms Steyn remarked the internal audit committee appeared not to be functioning well. She suggested the Committee should get the Management Report so that it could ask questions and make an input.
Ms Nkau maintained that if the internal audit was failing, then the audit committee was not going to have sufficient information. It was important the Department made sure the internal audit committee had the capacity to do its work so that it produced reliable information. Concerning the Management Report, she said the Committee could get it directly from the Department, as required by legislation.
Mr Z Mandela (ANC) enquired why the Committee could not be furnished with sufficient information on a quarterly basis, because the information provided to the AG was insufficient.
Ms Nkau said there should be agreement about the root cause of the deficiency so that it could be fixed. If there was disagreement, the problem would remain the same. She indicated that the Department spent most of its time implementing, and less on reporting. However, it was still its responsibility to do quarterly reports, because it was going to be audited at the end of the year.
Ms Steyn felt it was unfair for Members to debate the reports of the Department for Quarters 2 and 3, because they had received them only when the meeting started.
Mr Mandela supported Ms Steyn, saying the matter should be reported to the Speaker of the Parliament, letting him know the Committee had postponed a meeting because it was not getting help from the Department.
Mr Ramokhoase suggested the Committee should engage with the Department because if it did not, the Committee was going to be behind schedule.
Ms Vries apologised for the situation, and took responsibility for the actions of the Department. She said the mismanagement of the documents had been the responsibility of her unit, but indicated the documents had been prepared for the 17 February 2015 Committee meeting, which had been cancelled.
Ms Steyn disagreed with Ms Vries. She told her the 17 February 2015 Committee meeting had never been cancelled, and asked for clarity on how a meeting should go forward when the documents were late.
Ms Vries said her office had had an interaction with the office of the Committee about the meeting, but the Committee had replied it would not interact with an acting director-general.
The Chairperson stated there had been a meeting on 17 February, and asked why the documents were not circulated if they were sent to the Committee.
Ms Steyn, however, proposed that the meeting continue, as there were important things to consider.
Mr Ramokhoase supported Ms Steyn.
Mr Ramokhoase remarked that the Committee wanted to see an active Department that would directly deal with its mandate. When the Committee did its own research, it always disagreed with what the Department presented. If the Department was there to convince the Committee about what it does, then it should explain how it was implementing its policies and provide evidence on projects it was busy with.
Ms Steyn stated there was inconsistency in what the Department said it does and what was seen on the ground. On the issue of the construction of mobile veterinary clinics, the AG had indicated that this had not happened – it was delayed. However, the report of the Department said this was commissioned.
Further, on the Fetsa Tlala project, she said she had visited the scheme and farmers had informed her there was no drought and planting had started very late. Lastly, she wanted clarity on why the first draft of the Fishing Rights Allocation Framework had not been completed.
Mr Senzeni Zokwana, Minister: DAFF, said that the mobile clinics were there, but if the AG said they were not there, then the Department needed to forward to the Committee a proper answer without giving a generalised response. With regard to Fetsa Tlala, he said a thorough report on projections by the Department would be sent to the Committee, because the Department knew what had been planted and on how many hectares of land.
On why the first draft of the Fishing Rights Allocation Framework had not been completed, he said a report would be given to the Committee with an explanation on why the rights had been postponed. The industry needed to be given a guarantee that fishing would continue. Already, there was uncertainty within the industry about fishing. The report would also cover research issues and chart a way forward.
Ms Jongbloed remarked that the presentation on Fisheries could be masqueraded as a Master’s degree paper. The report was mum on a number of areas, like roll-overs of fishing rights; lobster, abalone and line fish poaching; a gazetted fee structure for fishing rights; and research on pelagic fisheries.
The Chairperson enquired if the Department was still on course to meet the 2019 target of one million ha of land for Fetsa Tlala. He also asked about the status of the Performing Animals Protection Amendment Bill.
Mr Kgobokoe said the Department was on its way to meeting the set target, but the challenge was the budget of the Department, which was not increasing. Resources were a challenge. If the Department was to meet its target of one million hectares, the budget had to be increased. Concerning the Performing Animals Protection Amendment Bill, he indicated that an Inter-Ministerial Task Team had been established to look into the matter.
Ms Steyn wanted to establish if regulations were in place for importing maize because of the drought.
Mr Kgobokoe said that the domestic consumption of maize was 11 million tons a year. The decrease was attributed to drought, which was why it was felt that millions of tons should be imported. The matter was still on the table -- how pricing was going to be done, and the country from which the maize would come.
General Bheki Cele, Deputy Minister, DAFF, admitted that the Department had failed the project, and that had to be known. It was important to interrogate the workings of the entity, including its transfer, so as to avoid failing for a second time.
Ms Steyn agreed with General Cele, saying the Department was not looking at what it was supposed to look at. The next thing that would follow was the closure of agricultural colleges.
Mr B Joseph (EFF) stated that people and farmers in the Eastern Cape had been failed. The Minister should apply his mind thoroughly on what he wanted to do and think carefully about what he was doing about Ncera, and not rush into signing documents and contracts.
The Chairperson said it was clear the Department had not done its work on Ncera since the oversight visit. It was now giving the Committee a reason to open up a discussion on the matter. The Committee recommended that Ncera be delisted, and the Department must make sure those communities around the ten farms did not lose the services the entity offered.
The meeting was adjourned.