A representative of the Auditor-General South Africa (AGSA) briefed the Committee on the audit outcomes and expenditure patters in the rural development portfolio for the 2014/2015 financial year. The quality of submitted financial statements for the Agricultural Land Holding Account (ALHA) was good but needed improvement. The quality of submitted performance reports for Ingonyama Trust Board (ITB) was good but required intervention from the Department of Rural Development and Land Reform (DRDLR or the Department). The supply chain management for the Deeds Registration Trading Account (Deeds)was good, but, like ITB, it required intervention. Financial health for Deeds was good but showed stagnant or limited progress as human resource management was a concern. Information Technology for DRDLR and Deeds required intervention. Root causes of stagnant or limited progress included the slow response by management in the case of DRDLR, ALHA and ITB in 2014/15 and DRD, and ALHA and Deeds in 2013/14. The 2014-15 DRDLR and ITB reports were considered reliable and useful. There were instances of non compliance with legislation and with irregular, or fruitless or wasteful expenditure. The
DRDLR had an irregular expenditure of R25.2 million, and ITB showed irregular expenditure of R2.025 million. DRDLR had a fruitless and wasteful expenditure of R6.07 million, ALHA had R60 000 and Deeds R7 000. It was recommended that management should ensure that the root cause of the audit findings was correctly identified to address the controls weakness;that staff at the regions be assessed to ensure that their shortcomings are identified; and that vacancies for key management must be addressed timeously. Ministerial commitments were given to address root causes. Members asked if the challenges seemed to be insurmountable, as the Department went down from 61% to 56% achievement of targets, and commented on the continuing poor qualify of supply chain. They wondered what punitive measures were taken against defaulting staff, why problems in HR seemed to persist, why the issues had not been picked up in internal audit, and how the third tier of assurance by the Committee could be improved. They were concerned about the state of financial health of the DRDLR and commented that it was time to review the ITB seriously.
The Department then briefed the Committee on the Annual Report. 56% of its annual targets were achieved, but there had been 99.9% spending of the allocated budget in the Administration programme. The Department achieved an unqualified audit opinion with findings. In Geospatial and Cadastral Services the Department partially achieved its approved research report and consultation, and over-achieved in supporting municipalities on the implementation of the Spatial Planning and Land Use Management Act (SPLUMA). The Rural livelihoods strategy was approved and norms and standards for access to rural services targets were partially achieved. 428 land claims were settled and 372 land claims were finalized.119 phased projects were approved and 1 516 claims lodged were to be researched. Fourteen lodgment offices were opened and functional. 354 802 hectares of land were acquired and allocated. The Office of the Valuer General was established and 217 Land reforms farms were recapitalised. 679 projects were implemented. The minimum 2% disability employment target was reached. The Department’s total spending for the 2014-2015 financial year amounted to R9.4 billion, representing 99.4% of the appropriation. The greatest contributor to the unspent funds was the area of goods and services. Fruitless and wasteful expenditure increased by 12% from previous year, and the cases of iregular expenditure were being investigated by its Financial Compliance Committee. The Deeds Registration Trading Account (Deeds) generated revenue from the registration of deeds and sale of information amounting to R552 million for the 2014/15. The closing balance on the current bank account was R290 million.
Members were not pleased with the performance of the DRDLR, which was described as slow. They called for explanations on delivery of services and expenditure, noted that the Geo Spatial service programme was critical and asked why the Recap funding process was not in place. Members commented favourably on the standing procedure of vetting prospective of employees, and the increase in Deeds revenue. The social economic impact of the Department needed to be assessed. They questioned the big disparity in capital projects and asked why Northern Cape received so much less support, and also wanted to know the delays in finalising projects. They commented that although DRDLR had introduced positive legislation, there had in fact been little progress. They questioned the spending on E-Cadastre and urged that people must be educated on the SPLUMA. Positive developments did include the 2% disability target and keeping the vacancy rate low. However, Members were not happy with the mismatch and contradiction between amounts spent and targets achieved. They asked what caused delays in payment of service providers, called for reports on cooperatives and thought more work was needed on the Rural Youth Service Corps (NARYSEC). They asked within what time the recommendations by the AGSA would be finalised.
The Commission on the Restitution of Land Rights (CRLR) then briefed the Committee on its financial statement and performance. CRLR had exceeded its targets in many respects. It established 14 operational claims lodgment offices; and acquired 4 mobile lodgment offices. The settled claims, their financial value, expenditure, including on backlog claims, and land purchase figures were set out. Total budget was R2.9 billion and spending was at R2.99 billion. Further breakdowns were provided for expenditure by programme, province, standard items. The CRLR was in the process of becoming autonomous from DRDLR and this was hoped to be achieved by 01 April 2017. New claims totalling 104 248 had been lodged since 30 June 2014. .There had been 13 985 lodgements at mobile offices, and over 45 000 people were reached. The CRLR had a vacancy rate of 9.28% and 750 staff in total. The grievances, disciplinary and HR figures were given. There had been 302 Land Claims Court cases in the period and there was a possibility of out of court settlement in 33. Members asked whether the CRLR would be able to function away from the DRDLR, pointed out that the budget must follow function and how it could be assisted to function until then. They asked if the trends were for claimants to ask for financial or restoration compensation. They expressed concerns that progress was slow as there was a need to monitor mobile offices and stick to the programmes. The numbers of new claims and backlogs was an indication that more offices were needed, and it was noted that mobile offices were expected in Limpopo also. They urged that the outstanding claims receive focus.
The Chairperson stressed the importance of Annual Reports in holding departments accountable. She noted that the Deputy Minister would attend the meeting but had been delayed and the Minister of Rural Development and Land Reform had tendered apologies as he was in China.
Auditor-General of South Africa (AGSA): Audit outcomes 2014/15 briefing
Mr Benny Sze, Audit Manager, AGSA, briefed the Portfolio Committee on the expenditure patterns of the Department of Rural Development and Land Reform (DRDLR or the Department) in 2014/2015.The quality of submitted financial statements for Agricultural Land Holding Account (ALHA) was good but need improvement. The quality of submitted performance reports for Ingonyama Trust Board (ITB) was good; but for DRDLR intervention was required and needs improvement.
The supply chain management for the Deeds Registration Trading Account (Deeds)was good, but, like ITB, it required intervention. Financial health for Deeds was good but showed stagnant or limited progress as human resource management (HR) was a concern. Information Technology for DRDLR and Deeds required intervention. Root causes of stagnant or limited progress included the slow response by management in the case of DRDLR, ALHA and ITB in 2014/15 and DRDLR, and ALHA and Deeds in 2013/14. The 2014-15 DRDLR and ITB reports were considered reliable and useful.
He noted that in relation to audits and accountability there were three tiers – senior management within the Department or entity, with the accounting officer/authority and the executive authority at the first assurance level; then internal audit unit and audit committee at second assurance level, and finally the Parliamentary Portfolio Committee as a third assurance level.
The root causes of stagnant or limited progress by DRDLR, ALHA and ITB in 2014/15 and DRDLR, ALHA and Deeds in 2013/14 included slow response by management. The root causes of Regression in DRD, ALHA and ITB in 2014-15 was that key officials lacked appropriate competencies. The root causes of stagnant or limited progress in DRDLR, ALHA in 2014-15 and 2013-14 were instability and vacancies in key positions.
Mr Sze commented on the quality of submitted financial statements in 2014-15. ALHA was financially unqualified. After the statements had been corrected, ITB was financially qualified with findings in 2013-14 and 2014-15. Quality of annual performance reports showed that in 2013-14 DRDLR reports were useful, and in 2014-15 DRDLR and ITB reports were reliable and useful .Deeds and ALHA performance was included in DRDLR’s annual performance report.
He commented that there were several instances of non compliance with legislation, relating to:
Quality of annual financial statements submitted; prevention of unauthorized, irregular and/or fruitless and wasteful expenditure; management of procurement and/or contracts; management of strategic planning and performance; human resource and consequence management; and internal audit and Audit Committee.
DRDLR had an irregular expenditure of R25 286 000; and ITB had R2 025 000 so there was a total of R27 311 000 irregular expenditure in the portfolio.
DRDLR had a fruitless and wasteful expenditure of R6 073 000; ALHA had R60 000, Deeds had R7 000 and so there was a total of R6 140 000.
Mr Sze higlighted the top three root causes of the findings by the AGSA, and the recommendations that it had made:
- Slow response by management in addressing the root causes of poor audit outcomes: Here, AGSA recommended that management should ensure that the root cause of the audit findings was correctly identified to address the control weakness. The action plan drafted should be focusing on the root causes and the progress on the implementation of the action plan should be strictly monitored.
- Key officials lacking appropriate competencies: It was recommended that management should ensure that staff at the regions were assessed to ensure that their shortcomings were identified. Training should be given to all staff on the revised policies and procedures, updates on the new legislation or changes on existing legislation. All action plans and the root causes of audit findings should be communicated to all staff in order for them to implement the action plan agreed by senior management.
- Instability or vacancies in key positions: It was recommended that management should ensure that vacancies for key management were to be addressed timeously going forward, as it would have an impact on the overall audit outcome.
The Minister’s commitments to address root causes was to ensure that the internal audit function was fully staffed; to develop the strategic plans for the 2011-15 FY using the new planning framework; to reduce the vacancy rate by filling vacancies in key management positions; to develop action plans to address weaknesses in internal controls and to sustain existing controls; to implement effective project management in order to ensure a proper process was being followed to avoid deterioration of service delivery; and to identify proper root causes for repeat control deficiencies.
Mr E Nchabeleng (ANC) asked if the challenges, according to the AGSA, were likely to be insurmountable and if there was cause for deep concern. He noted that the Department's performance against targets had dropped from 61% in 2013/14 to 56% in 2014/15.
Mr M Filtane (UDM) said he was concerned about the supply chain management and questioned why there were no stringent measures to address the issue of root causes and what internal punitive measures were taken against incompetent staff.
Mr T Mhlongo (DA) said that top three root causes and recommendations for 2013/14 and 2014/15 were similar and asked what was the way forward.
Mr Eugene De Haan, Senior Manager, AGSA replied that that had been progress but the way information was reported to the AGSA was not credible and sufficient. He said issues raised in the last three years had not been addressed. He noted that AGSA had a responsibility to share knowledge and help move the Department forward.
Ms Meisie Nkau, Business Executive, AGSA, added that management was slow in responding to the findings of AGSA and this affected the root causes.
Ms N Magadla (ANC)said she was concerned about the role of internal audit in risk management . The AGSA report highlighted issues that should have been identified and dealt with before becoming a root cause.
Mr De Haan replied that internal audits were efficient but the action plan was not addressing the challenges.
Mr T Walters (DA) asked how the recommendations on top three root causes would be implemented as there were serious issues of internal control, accountability and systemic problems. The Committee would need to know how the Department would handle these.
Mr S Matiase (EFF) asked what could be done to establish the third level assurance of the Portfolio Committee. He added that if the Department’s own state of financial health in the risk areas was a concern, there would be even more concerns from entities like ITB. The Auditors were in place to diagnose challenges and recommend corrective measures. It was time to review the ITB, as there were often concerns in the AGSA report.
Mr A Madella(ANC) said he was a little confused as to why the AGSA report mentioned that there was progress in usefulness, and reliability in the quality of Annual performance reports.
Ms Nkau said AGSA was careful not to compromise its independence. In this case, when the financial statements were first submitted for audit there had been material misstatements and the outcomes of the Department were stagnant. The small improvement that was commented on now did not have major impact' the Department would in fact still need to move fast to improve the outcome. The AGSA audited and reported to Parliament so that Parliament could make decisions, as the AG had no mandate to implement recommendations.
Mr Filtane asked what was done with auditees that were not complying with the legislation; there was no point having laws when people do not comply.
Mr Mnguni appreciated the objective reflection on ITB, but he commented that there was a need for more details and not graphics in presentation.
Department of Rural Development and Land Reform: Annual Report 2014/15 briefing
Mr Mkebisi Skwatsha, Deputy Minister of Rural Development and Land Reform remarked that the Department did not achieve a significant number of its targets, and was appearing before the National Assembly hoping for improvement.
Mr Eugene Southgate, Deputy Director General, DRDLR briefed the Committee on the Annual Report. He started by detailing the performance statistics. Out of the targets, 56% were achieved, 23% were partially achieved and 21% not achieved. The Department achieved the lowest percentage achievement in 2009-2010 financial year compared to the five subsequent financial years, where only 18% of the targets were achieved, 50% partially achieved, 32% not achieved. The highest percentage achievement was in the 2013-2014 financial year where there had been 61% achieved, 25% partially achieved,14% not achieved
He then went on to detail the performance in the programmes.
Programme 1: Administration
9.9% of the allocated budget was spent out of an annual target of 100%, due to vacant positions not filled timeously. The Department achieved an unqualified audit opinion but with findings, and thus fell short of its target to have an unqualified audit without findings on financial statements This was due to some systems controls taking longer to finalise. 92% of external audit findings were resolved (compared to the target of 100%). The DRDLR Human Development strategy approval was partially achieved; and 61 people were trained in Geomatics against a target of 60.
Programme 2: Geospatial and Cadastral Services:
The Department partially achieved its approved research report and consultation on National Skills Development Fund (NSDF). 61% was achieved against the target for the number of municipalities supported to implement the Spatial Planning and Land Use Management Act (SPLUMA) against a target of 60%.
31% of all land use schemes were implemented. The target to support four Provinces to develop Provincial Spatial Development Frameworks (SDFs) was achieved.1 669 SDFs were surveyed against a target of 1500. A total of 961 518 deeds and documents were registered in the period under review, against a target of 953 000
Programme 3: Rural Development
A Rural livelihoods strategy was approved and norms and standards for access to rural services targets in the period under review were partially achieved although the consultation process took longer than anticipated. 123 socio-economic infrastructure projects were achieved out of a target of 114. 8 087 households were supported with basic services, against the target of 8000 9 509 skills development opportunities were provided, from a target of 4 200.The 5 000 target for youth skilled in rural development was not achieved. The target for the number of jobs created was over achieved. The target for the mega cooperative establishment was not achieved. The target for youth skilled through NARYSEC was not achieved. The target for rural enterprises supported was over achieved.
Programme 4: Restitution
428 land claims were settled, out of an annual target of 379. 372 land claims were finalised out of an annual target of 239. 119 phased projects were approved, out of an annual target of 53. 1 516 claims that were lodged by 1998 had been researched, compared to the annual target of 1 445.
In relation to the lodgment of restitution land claims, he noted that 14 lodgment offices were opened and functional in period under review, and so the target had been achieved.
Programme 5: Land Reform
354 802 hectares of land were acquired and allocated out of an annual target of 390 000 and this represented 87% . The Office of the Valuer General (OVG) was established in the period under review. 217 Land reforms farms were recapitalised and developed out of an annual target of 303. 1 925 jobs were created in land reform projects (RADP), out of a target of 909. There was 0% achievement in annual targets for Communal Property Associations (CPAs) compliance with legislation, and for labour tenants applications settled.1 646 state land parcels were confirmed as vested out of an annual target of 1 787. The minimum target of 2% of persons with disabilities as a percentage of total workforce was achieved. DRDLR had managed to achieve 679 projects at a cost of R 398 050 487 being implemented in the period under review.
Ms Rendani Sadiki, Chief Financial Officer, DRDLR presented the financial report findings. The Department’s total spending for the 2014-2015 financial year amounted to R9.4 billion, representing 99.4% of the appropriation of R9.4 billion, leaving unspent funds of R59.5 million. The greatest contributor to the unspent funds was goods and services in the DRDLR itself (R35.7million).The second greatest contributor was the unspent funds of R10 million under Household Transfers, for projects that could not be finalized within the financial year. These funds could not be utilised elsewhere in the Department due to the PFMA 8% limit on virements after the annual estimates of national expenditure (AENE). Expenditure on goods and services decreased by R833 million or 38.2% from R2.1 billion to R1.3 billion in 2014/15.This was due to a reclassification of the National Rural Youth Service Corps (NARYSEC) expenditure to Households and cost containment measures that were implemented following the cost containment circular issued by National Treasury.
The Department’s expenditure for the financial year 2014/15 amounted to R9.396 billion or 99.4% of the budget allocation of R9.455 billion. This resulted in an under-spend of R59 million.
He then reported on the Irregular, Fruitless and Wasteful expenditure. The fruitless and wasteful expenditure increased by 12% (up to R6.073 million) from the previous year. This was due to the extension on the NARYSEC training programme from two to four years due to the unavailability of accredited work place sites, unavailability of space at accredited Colleges for Further Education and Training (FETs) and interest paid as compelled by the courts on restitution matters.
The Department had also seen an increase in irregular expenditure (R12. 647 million to R25.286 million in the year 2014/15).This was due to non-compliance with Supply Chain prescripts.
These cases were still in the process of being investigated by the Financial Compliance Committee.
On relation to all the finalised cases of fruitless and irregular expenditure, warning letters were issued and disciplinary actions were under way for the officials who were found guilty. The Department remained committed to eradicating non-compliance with the laws and regulations applicable to it.
The internal control environment was being continuously monitored for its effectiveness, and any weaknesses identified would be addressed in order to improve financial management and the overall efficiency in the operations of the Department. The Department had also improved its standard operating procedures to identify fruitless and wasteful expenditure before it occurred.
He then moved on to discuss the audit report of AGSA. The audit report was issued by AGSA on 31 of July 2015 and the Department itself had obtained an unqualified audit opinion.
The audit report, however, contained emphasis of matter regarding significant uncertainties. These matters were not as a result of audit findings but were disclosed upfront by the Department in the notes to the annual financial statements (AFS). The AGSA deemed it necessary to bring these matters to the attention of the users of the statements.
He noted that the following matters were commented upon as a matter of emphasis:
- Claims instituted against the Department amounted to R2 123 million. These claims were subject to the outcome of legal proceeding. The Department had a possible liability towards the claimants in terms of the Restitution of Lands Rights Act,1994 (Act No 22 of 1994).The total claims verified and the route for approval in terms of section 42D of this Act amounted to approximately R113 million, and once approved by the Minister it would increase the commitment amount disclosed in Note 19 to the AFS.
Provision had been made for the impairment amounting to R16 million. This related to Inala Farms (Pty) Ltd which was in the process of being liquidated, and the investment might not be recovered.
Provision amounting to R99 million had also been made; R43 million related to non-recovery of lease debtors, and R28 million related to provision for doubtful debts.
Other important matters were reported by the AG and the Department had already developed Management Action Plans in order to address these matters. He added that the Department remained committed to maintaining its unqualified audit opinion and would continue to implement measures to attain this ideal.
The summary of the audit findings was then presented (see attached presentation for full details).
Overall, there were 70 findings for the DRDLR, 14 for ALHA and 13 for Deeds. Findings in progress amounts to 69, for the Department, 13 for ALHA and 6 for Deeds.
Summary of matters relating to the Deeds Office 2014/15
Deeds Office generated revenue from the registration of deeds and sale of information amounting to R552 million for the 2014/15 financial year, this was an increase of R7 million compared to prior year.
Total revenue amounted to R722 million, this grew from R603 million in 2013/14 or a 19.7% increase.
Surplus for the year amounted to R110 million showing an increase R5 million compared to prior year. This indicated an increase of 4.9%.
The closing balance on the current bank account as at 31/03/2015 was R290 million.
The Deeds Registration Trading Account received conditional grants : the DRDLR: E-cadastre project R98,3 million and Annual Salary increases R14,9 million.
The Trading Account had an opening balance of R39,8 million and showed movement during the 2014/2015 financial year.
Irregular expenditure was recovered and it had been condoned for the previous years (see attached presentation). During 2014/15 irregular expenditure to the value of R6.9 million was condoned with warning letters and disciplinary letters. The Trading Account had an opening balance of R20 000, and in the 2014/15 financial year, there was R7 000 in additional cases added. In regard to the condonation of R20 000, there had been recovery from officials and warning letters.
It was explained that the Deeds Registration Trading Account falls under the administration of the DRDLR. The executive of the Department spent some of their time on the affairs of the Trading Account, and also provided services in relation to information technology, office accommodation and staff training. The Department of Public Works (DPW) provided office accommodation for some of the Deeds Registries.
Speaking to the report of the AG, it was noted that the Deeds Registration Trading Account had received an unqualified audit. However, there was emphasis of matter regarding significant uncertainties as follows:
- There had to be a restatement of 2013/2014 figures in respect of errors from the prior period
- Useful life assets with R1 value were not re-assessed, to the value of R6.99million
- Donated assets at R1 book value were not re-assessed – to the value of R2.8m
- The provisions of R5m for Datacentrix to be removed as a provision and disclosed as a note under ‘contingent liabilities’
- There was an impairments provision for R23m relating to repayment, and provision for doubtful debts of R3.5m
- There were significant uncertainties in relation to contingent liabilities raised, relating to a dispute of whether services were rendered to the possible value of R12.9m.
Action plans had already been developed by management to address this. The Deeds Registration Trading Account remained committed to maintaining the unqualified audit opinion that it received and would continue to implement measures to do this.
The Chairperson remarked that the Committee was not pleased with the performance of the DRDLR and hoped plans to address the challenges would work. She said the AG had noted that the Department was slow and there was a need to work together with the Committee for speed and improvement.
Mr Mhlongo asked for explanations on delivery of services and expenditure and how budgets were prepared. There had been significant spending yet the targets were not achieved. He asked what the Financial Compliance Committee (FCC) was and why the recommendations of the previous year on policies were not implemented. He also asked for the status on the visit to E-Cadastre
Ms Sadiki explained that R5.9 million had to be reclassified because that was meant for delivery of services. There would be a budget disparity as expenditure would not always be equal to budget. She said FCC was a Committee set up to monitor non compliance, adding that there was a quality control section that administered remedial action and discipline. A list showing payment of invoices was submitted in the last Portfolio Committee meeting and Deeds would again do so when it was required. She said the delivery of transfer payments was submitted late. In the next report to the Committee, this would be included with the 30-days report schedule.
The Chairperson said more time was needed to debate issues like deliveries and late transfers.
Mr Walters said the Geo Spatial service programme was critical and asked why the Recap funding process was not in place, as it had been approved.
Mr Filtane said a standing procedure of vetting prospective employees was welcomed. He also welcomed increase in revenue generation by Deeds, so that it would no more rely on treasury. He said, however, that the DRDLR was not reporting on the right things: as a Department it was supposed to bring positive social changes in the lives of the people, but had made no comment on how it had impacted and changed lives of rural people. The Committee required details of the social economic impact of the co-operatives and how many were functional. He questioned why the Department would ask Parliament for a budget and fail to implement its projects.
The Deputy Minister thanked the Committee for keeping the Department on its toes. Its mandate indeed was based on objectives of democratic government. It was not an easy task, so it was shocked if anyone would think that nothing had been done to advance social changes in the country. He also said the Department welcomed the issues raised, but also recognised that there were challenges.
Mr Mduduzi Shabane, Director General, DRDLR, said the Department did not take its responsibility for granted; it accepted the need for improvement and it was equal to the task. He added that the presentation was in line with what was required for auditing and did not include the details of the co-operatives’ turnover. He added that the programmes of the Department were independently evaluated, as well as own evaluation being carried out.
Mr Filtane asked why there was a big disparity in capital projects and an apparently deliberate neglect of this in some provinces – citing the R4 million in Northern Cape, as against R85 million in KwaZulu Natal (KZN) and R72 million in Eastern Cape.
Mr Shabane replied that Cabinet had come out with a list of poorest districts, and more than 50% of these were in KZN and EC. Population density counted in allocation of resources, but the Department was improving on procedures to identify projects.
Mr Filtane asked for the cause of delays in finalising projects and commented that it was a trend that affected the economy of the country.
Mr Eugene Southgate, Deputy Director General, DRDLR, replied that there were both internal and external causes. The Department had embarked on a capacity building programme to address the issue. He added that this programme would be completed at the end of October 2015
Mr Shabane said that the Department had invested in a project management office that would track the projects electronically and help in their implementation.
Mr Matiase said Rural development; Restitution and Land Reform were critical programmes of the Department. No other department had introduced pieces of legislation where there was virtually no progress in the last twenty years. He said that the report of AGSA had exposed the DRDLR as failing to provide services as a result of poor leadership, incompetence and lack of services.
The Deputy Minister replied that those pieces of legislation were at the core of what the Department was about, and whilst there had been serious teething problems, the Department was busy working on this path. He noted that overwhelming acknowledgment by ordinary people from all corners of South Africa was proof that the Department was on the track.
Mr Matiase asked for the details of people who had had their lands restored and had been helped by the system.
Ms Magadla asked for the criteria for awarding performance bonuses at the senior management level.
Mr Nchabeleng questioned what was happening in E Cadastre and how much money was spent. He commented that there was a need to bring all people on board, as there were misconceptions about SPLUMA, which resulted from a lack of understanding .He said the Committee required reports on transfers, adding that the Department should bring staff from internal audit to these meeting as workshops by AGSA on budget would help the Committee to monitor progress.
Mr Shabane replied that SPLUMA had not taken away the powers of Traditional Leaders, as section 23 of that Act stated that traditional councils must be consulted in development.
Mr Madella said there were indeed challenges that should not be ignored, but substantive work had been done. He appreciated the inclusion of people with disability in the report and achieving the target of 2% minimum inclusion in the workforce. He asked if National Treasury’s directives to cut cost were complied with. He was pleased to see that departmental vacancies were less than 10%.
Mr Mnguni commented on the mismatch between achieving only 56% of targets, yet having 99.4% expenditure. He asked what caused delays in payment of service providers. He also asked what the biggest co-operative in South Africa was. He believed that more work was needed on NARYSEC.
Mr Shabani replied that information on co-operatives would be provided.
The Chairperson asked how the Department intended to deal with the Minister’s commitment to address root causes. She was concerned that there were no certificates after four years of NARYSEC. She questioned the problem was with the Sector Education and Training Authority (SETA).
Mr Shabane replied that a total of 2 700 certificates were outstanding as a result of the reconstruction on SETA, but added that now that a new CEO had been appointed, these certificates were trickling in.
Mr Southgate added that the Department was working on SETA, as there was need to have consultations as other Departments were involved.
The Chairperson asked if municipalities had the capacity to implement SPLUMA, and when the norms and standards would be finalised. She asked how many officials were suspended, and for what offence, as high numbers of resignations created instability. She asked when investigation on E Cadastre would be finalised.
Mr Shabane replied that investigation was conducted by the Special Investigating Unit (SIU), adding that the Department would liaise with SIU. He added that the service provider would no longer run the E Cadastre, and the termination of this contract had been taken to court.
He admitted that the Department did not meet the target on CPA, Labour Tenders and Land Use Regulators, but pointed out that the Land Use Regulators were primarily the responsibility of local government. He said a readiness assessment programme was helpful as traditional leaders were engaged on this project. The Deeds Office was still not aligned to provincial boundaries but an overhaul was under way. The old contract on Recap was over and the new contract being implemented was the reason for delays.
Mr Walters asked if the Department was getting value for money in terms of Land Use Management and asked what was the turn around target.
Mr Filtane said the Committee wanted a report on the rate of turn over in the co-operative business and the socio-economic impact ; this was a political concern.
The Deputy Minister noted those requests and said the rate of turn over will be included in the next evaluation report.
Mr Mnguni proposed a 50/50 land ownership policy.
Ms Magadla said the Department should help the people of Mahalakwena in Limpopo.
The Chairperson said the Department should deal quickly with the issue of Minister’s commitment to address root causes, as it affected the budget .She commented that some regions did not provide credible information on issues highlighted by the Committee as the issue of co-operatives cut across all Departments and questioned how resources can be harnessed to make it work. She asked for a time frame on how the Department would address the recommendations by AGSA. The Committee was not entirely convinced about the Transfers and progress of policies.
Commission on Restitution of Land Rights (CRLR)
Ms Nomfundo Gobodo, Chief Land Claims Commissioner, CRLR, briefed the Portfolio Committee on the Commission on Restitution of Land Right’s financial statement for 2014/15.The Commission exceeded its targets by settling 428 new claims against a target of 379; finalizing 372 claims against a target of 239; approving 119 projects against a target of 53; researching 1 525 claims against a target of 1 445. It had established 14 operational claims lodgment offices; and acquired 4 mobile lodgment offices.
Performances against targets were as follows:
428 land claims were settled out of an annual target of 379; 372 land claims were finalized out of an annual target of 239; 119 phased projects were approved against an annual target of 53; 1 525 claims lodged by 1998 were researched, against an annual target of 1 445.14 lodgment offices were opened and functional in the period under review.
She then presented a summary of settled restitution claims for the period 01 April 2014 to 31 March 2015:
Western Cape 194; Eastern Cape 79; Free State 1; Gauteng 9; KZN 59; Limpopo 35; Mpumalanga 35; Northern Cape 9 and North West 7.
The total financial value of the claims that were approved during the period under review was R2.7 billion. The spending of R2.487 billion included expenditure on backlog claims, which were approved in previous financial years but where payments had not yet taken place.
She presented the expenditure per item (see attached presentation) and said that expenditure claims approved prior to 2014 represented 20% of all expenditure at about R500 million. The claims approved in 2014/15 amounted to R1 986 593 230. The total budget was R2.998 billion and total expenditure was R2.997 billion. Broken down, by sub programme, the restitution process for the National Office represented 4%; restitution for Regional Office 20% and restitution grants represented 76%.. The breakdown by province was : Eastern Cape 10%; Free State 3%; Gauteng- 2%;KZN- 35%; Limpopo- 17%;Mpumalanga- 11%;Northern Cape 5%; North West 11%. She also noted the categories, with a breakdown of 9% to compensation of employees, 6% to goods and services and 85% to projects.
The Autonomy programme was a process of transforming the Commission into an efficient, cost effective organisation that improved the experience of CRLR’S constituents. She set out the scheduling and action plans behind this. The Commission was tasked to present on the Service Level Agreement with the Department, in order to delink from it and assign Accounting Officer functions to the Chief Land Claims Commissioner. If that happened the Chief Land Claims Commission would be delegated all functions assigned to the present accounting officer from DRDLR, and the necessary resources should at least covered in SLAs to ensure the functions are performed.
She presented the figures for lodgement of new claims since 30 June 2014: overall 104 248; lodgements at mobile offices -13,985, total number of people reached to date - 45,363.
In the staff establishments, there were 819 funded posts and 743 were filled. This left 76 vacant, a rate of 9.28%. There were 7 additional employees and a total head count of 750. Three employees lodged formal grievances and there was 1 case of gross absenteeism
Finally, Land Claims Court cases from 01 April 2014 to February 2015 were 302 in number and there were 33 matters that possibly could be settled out of court.
Mr Filtane asked why a Service Level Agreement SLA was chosen for such a strategy and if it would fail down the line. He also asked how comfortable the Commission would be with a fully capacitated team.
Ms Gobodo replied that provision was made for improvement as the Commission was running at the same capacity as at 1998.
Mr Matiase asked if the financial implication of recruitment of personnel, capital projects, and all other costs had been taken into consideration
Ms Gobodo replied that a business process had been analysed as there were specific requirements that must be met. This had been scientific research and there would be no real autonomy if they were not met. The Commission was working with the National Treasury.
Mr Matiase asked what would assist the Commission to function until 2019.
Ms Gobodo replied that the Commission would have to improve its structure and capacity in HR; audit; PR and communication. The Commission was working towards being autonomous by 01 April 2016.
Mr Matiase asked if people preferred financial compensation or physical resettlement on land.
Ms Gobodo replied that individuals and family claims asked for money, while community claims largely wanted resettlement. She added that she was not definite about the new claims.
Ms N Magadla (ANC) expressed concerns that Limpopo was not mentioned in the Report.
An official from the Commission replied that provinces were paired as follows- EC and KZN; Limpopo and Mpumalanga; Gauteng and NW as the mobile offices were rotated on a three monthly bases.
Mr E Nchabeleng (ANC) said the issue of land in Limpopo had taken a long time to be resolved as the lease agreement had expired and the people were in dire need. He added that no one was opposing the claim. He asked if it was possible to get some temporary agreement to use the land or alternatively extend the lease agreements as the Limpopo Province was not doing anything to help the people concerned.
The Chairperson thanked the Commission for a good job but remarked that it was slow. She said there was a need to monitor mobile offices and stick to the programmes as the high new claims and backlogs were an indication that more offices were needed. She also said there was a need to engage the National Treasury, and that there did seem to be light at the end of the tunnel. She urged the Commission to deal with the outstanding claims as there would be no focus on the new claims if the outstanding ones were not finalised. She said Limpopo would be taken into consideration as getting its own mobile offices in 2019.
The meeting was adjourned.
- Department of Rural Development and Land Reform; Ingonyama Trust; Commission on Restitution of Land Rights on their 2014/15 Annual Reports; Audit outcomes by Auditor-General 1
- Department of Rural Development and Land Reform; Ingonyama Trust; Commission on Restitution of Land Rights on their 2014/15 Annual Reports; Audit outcomes by Auditor-General 2
- PFMA audit outcomes of the 2014-15 financial year
- Commission on Restitution of Land Rights 2014/15 Annual Reports
- Commission on Restitution of Land Rights on its 2014/15 Annual Reports
- Department of Rural Development and Land Reform 2014/15 Annual Reports
- Department of Rural Development and Land Reform on its 2014/15 Annual Reports
- Financial Report: DRDLR’s Annual Report ending 31 March 2015
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