The Department achieved 56% of Q4 targets and 50% of Annual Performance Report targets in its Administration programme while annual targets on vacancies filled and disciplinary cases were partially achieved. In Geospatial and Cadastral Services, the Department achieved 77% of its Q4 targets and 69% of its APR targets. The Rural Development programme achieved 71% of its Q4 targets and 86% of its APR targets. The annual target for establishment of rural information desks was not achieved and the target of jobs created was partially achieved. The Restitution programme achieved 100% of its Q4 and APR targets. The Land Reform programme achieved 55% its Q4 targets and 64% of its APR targets. While the Department’s annual target of land acquired was partially achieved, land under RECAP allocated to smallholder farmers was not achieved. The Land Tenure and Administration (LTA) programme achieved 60% for both its Q4 targets and APR targets. In summary, the DRDLR achieved 68% of its Q4 targets and 71% at APR.
Total revenue at the end of the 2015/16 FY was R54.6 million, while spending amounted to 99.1% of the final appropriation of R9.197 billion. Administration spent 99.7%, Geospatial and Cadastral services 97.2%, Rural Development 99.5%, Restitution 98.3% and Land Reform was 100% of their respective budgets. Expenditure per programme for Q4 was: Administration (14.7%), Geospatial and Cadastral Services(7.5%), Rural Development (21.1%),Restitution (28.8%), Land Reform (27.9%), Households spent 98.7% of the budget. As at 31 March 2016, the Agricultural Land Holding Account (ALHA) had spent 97.2% of its budget , the Deeds Trading Account generated R619.9 million and the eCadastral project had spent R 29.6 million from the retention surplus of R110.4 million. Annual estimated revenue was R665 943 000; revenue generated for 2015/16 FY was R619 851 000 while actual expenditure for the same period was R546 910 000 which represented 88% of the revenue.
Members were concerned that 99% of the budget was spent but only 68% of Q4 targets were achieved in Quarter 4. DRDLR need to ensure that targets were achieved. Late payment of invoices affected businesses badly. They asked about the state of research, the impact of accruals and payables, interventions made on drought, when the finance model would be finalised; progress report on eCadastral and the review of the Recapitalization and Development Programme. They were concerned that there was underspending in the face of many needs and disappointed that DRDLR did not know the Auditor-General’s definition of a ‘job’. The Committee asked for written reports on the budget shifts, the Land Right Management Facility, the list of the 50/50 pilot programmes, on the financial implications of over achievement, drought interventions, a redrafted 4th quarter report, a list of Narysec participants, and outstanding disciplinary cases.
Minister Gugile Nkwinti noted that the APP and Strategic Plan preceded the budget. The President then makes the State of the Nation Address (SONA) and addresses matters that had to do with the Departments. These were implemented and they were not in the APP. Members should rather look at the facts on the ground and not the APP. Some of the problems on Recap Programme could no longer be solved by officials but only by politicians. These were not technical but political problems. On the question of what is a job and not a job, the distinction between Narysec and the Expanded Public Works Programme (EPWP) was that the latter was not a job but a job opportunity. There were beautiful stories to tell, even as there were bad stories to tell. He enjoined Members to tell the beautiful stories as there were people who started as workers on farms but were now farm owners who exported goods.
Opening Remarks by the Chairperson
The Chairperson said after the hectic election campaign period she hoped the Committee was ready to proceed with its work, identify with the Constitution and strengthen its oversight. It was noted that Deputy Minister Skwatsha was attending a cabinet meeting and Deputy Minister Mashego-Dlamini was in China.
Department Rural Development and Land Reform on its 4 Quarter performance
Mr Eugene Southgate, DDG: Corporate Services , said in the Administration programme under Q4, of the 9 targets planned, 5 targets were achieved, 3 were partially achieved and 1 was not achieved thus 56% of Q4 targets were achieved and 50% of APR targets were achieved. On the annual targets, vacancies filled and disciplinary cases were partially achieved. In Geospatial and Cadastral services, of the 13 targets planned for implementation in Q4, 10 were achieved, 2 partially achieved and 1 was not achieved. The Department achieved 77% of its Q4 targets and 69% of its APR targets. In Rural Development, 14 targets were planned,10 were achieved, 1 was partially achieved and 3 were not achieved. It achieved 71% of its Q4 targets and 86% of its APR targets. The annual target of establishment of rural information desks was not achieved and the target for jobs created was partially achieved. The Department achieved 100% of its Q4 and APR targets in Restitution. In Land Reform, 55% its Q4 targets and 64% its APR targets were achieved. Its annual target for land acquired was partially achieved; land under RECAP allocated to smallholder farmers was not achieved. The LTA programme achieved 60% for both its Q4 targets and APR targets. DRDLR’s overall programme performance was 68% of its Q4 targets and 71% of APR.
Ms Rendani Sadiki, CFO, DRDLR, briefed the Portfolio Committee on the 2015/2016 Q4 financial performance report. Total revenue at the end of the 2015/16 FY was R54.6 million of which R17 million was surveyor’s inspection fees, interest income was R15.5 million. Spending at the end of the 2015/16 FY amounted to 99.1% of the final appropriation of R9.197 billion, leaving an available budget of R79.3 million.
Under financial performance per branch, Administration spent 99.7%, Geospatial and Cadastral services 97.2%, Rural Development 99.5%, Restitution 98.3% and Land Reform 100% of their respective budgets. Expenditure per programme was as follows: Administration (14.7%), Geospatial and Cadastral services (7.5%), Rural Development(21.1%), Restitution (28.8%), Land Reform (27.9%), Households spent 98.7% of the budget. Under Restitution, commitments were R7 655 724, accruals R122 743, payables R139 942. As at 31 March 2016, the Agricultural Land Holding Account (ALHA) had spent 97.2% of its budget. It spent 99.1% of its Land Acquisition budget, 91% of Recap and Development and 89% of its budget for planning. The Deeds Trading Account generated R619.9 million as at 31 March 2016 which included a transfer grant of R15.9 million from the Department to augment salaries. The difference between projected revenue was due to high interest rates that affected the property market and resulted in under collection of R100 million. The eCadastral project spent R 29.6 million as at 31 March 2016 from the retention surplus of R110.4 million leaving positive balance of R75.5 million. In expenditure analysis per office, annual estimated revenue was R665 943 000; revenue generated was R619 851 000. Actual expenditure for the same period was R546 910 000 which represented 88% of the revenue.
The Chairperson asked the significance of the annual performance report (APR) references when the Committee was dealing with the Quarter 4 report.
Mr Southgate replied that it was used to track performance to ensure that annual targets were achieved and to guide the Department in terms of intervention so that it could help to shift resources.
Mr T Mhlongo (DA) said the Department came with percentages and sometimes with numbers. This picture was misleading and deceptive. The Department said the financial performance was 99.1%. In his own calculations, it was 71%. He was unhappy as the Committee had raised the same issue in the past about non-consistency. The DRDLR was not helping the Committee to do their oversight work effectively.
Mr Mduduzi Shabane, Director General, replied that this had to do with the indicators that are in the APP. Some of the targets were in percentages especially in Programme 1. When the Department arrived at the core, it used numbers. These were indicators that were agreed to by the National Treasury and the Department of Planning Monitoring & Evaluation (DPME). The inconsistency was already embedded in the APP. The DRDLR could not argue about the inconsistencies in the amount of money spent vis a vis the programme performance. For instance in Programme 5 on Land Reform, the Department did not do very well with land acquisition but had done more than actually projected in providing drought support. The Department was continually striving to improve in this area.
Mr M Fitane (UDM) said Rural Development had 71% targets achieved in Q4 and Land Redistribution Development had only 55% in the same period. It was not convincing why this should be the case. The Committee in the past 18 months had been talking about the negative impact of vacancies not being filled. How could the Department improve on that?
Mr Southgate replied that 120 days was a conservative time period in terms of advertising and putting forward a short list. It could be done within 60 days but the moment people were brought in externally, a minimum of 30 days must be given as notice.
Mr Fitane said the payment of invoices within 30 days was still a problem. Many businesses had gone under because the Government had refused to pay. The Department should teach the people they contract about what to submit as a valid invoice so that there could be no excuses for delays.
Mr Southgate replied that the Department was working to improve the payment of invoices. There will be a better control of invoices by the end of August as a result of new equipment that would be purchased to assist with this.
Mr Fitane said what form of support was given to the land projects as the Committee would like to know the content of this support?
The DG replied that there were different forms of support such as providing specific infrastructure to a particular community. The Department would provide in writing the project register.
Mr Fitane said the job target was 8 000 and 1 999 was achieved. This was not good. How was DRDLR going to circumvent this challenge. There was a need for the Department to be creative and actually achieve its target. There was a deliberate understatement for targets such as in Land Reform where the training of farmers was affected by poor planning. When was the Department going to overcome all these issues?
Mr Southgate replied that the DRDLR had thought that it had achieved its targets on jobs but when the office of the Auditor General audited the performance, it had disqualified some of the items indicated as job performed such as people who did hours of work. This had to be excluded from the information. The Department had to focus on sustainable work for the people at the end of the day. The reason there were no reports on some targets was because some targets were multi-quarter or multi-year. The Department would provide all the details in terms of the work done on the multi-quarter and multi-year projects.
The DG added that the Department does not deliberately under target. The targets were honest and when achieved it was good for the Department. The DRDLR never went out of its way to under target.
Mr T Walters (DA) said the budget expansion and targets did not match up. Analysis by the Committee content advisor, Mr Tshililo Manenzhe, must be used as a backdrop for questioning from the Committee. It would be a fantastic exercise in oversight. The analysis referred to impact and outcome. Questions such as what was bought and how much was paid for it. This kind of information helps to assess impact. The Committee should restructure the questions that it sent to the Department for its reports and institutionalise these for future reports. This would be fair both to the Department and the Committee.
The DG replied that measurement of outcome could not be done within a year. A longer period was needed. It could not be measured on a quarterly basis.
Ms N Magadla (ANC) asked for the financial report on projects and the amount that was spent. She asked if the Department had a register of Narysec participants, when they graduated and the areas of deployment. What happened to Provinces that underspent on recapitalization and if there were penalties?
The DG replied that the Department would provide the list of the projects that had been implemented and also the list on Narysec participants in writing.
The Chair asked what happened to the Provinces that were under spending and if there were penalties.
The DG replied that when the DRDLR realised that it was not likely to spend the money, it reprioritised instead of returning the money to National Treasury.
Mr Mhlongo said the Committee was asking the Department to provide a simple reporting system.
The Chairperson asked if the report was based on the APP that had been presented to the Committee. Looking at the APP, it showed that some of the activities were not stated in the first quarter.
Mr L Mbinda (PAC) said the Department should provide clarity on its target achievement - those that were achieved and not achieved. Partial achievement in his understanding meant work in progress. What was the turnaround time on disciplinary hearings? The vacancy rate was high and what efforts were in place to reduce it.
Mr Mnguni said there was no doubt that some progress had been made. He liked evidence and not just beliefs. Performance on targets for Q4 was only 71% and this was horrible and undesirable. He could smell a rat. The electorate was getting very sensitive out there. It was not reconcilable to have a spent budget of 100% and a performance of only 71%.The books were balancing but nothing was happening on the ground. What was the Department doing? The people were the victims and they do not trust anyone. Who was protecting the people out there?
The DG replied that the Department had taken note of the Committee’s concern about the mismatch between programme performance and expenditure. On a quarterly basis, there was a verifying of the portfolio of evidence against such expenditures. When Mr Mnguni says that he smelt a rat, it gave the impression that money had gone elsewhere. The Department would provide information on budget shifts from one programme to another so that it could show concrete evidence and not just beliefs of those shifts.
The DG said the Department received calls from people who said they had not been assisted or had lost their cases. The DRDLR was planning to meet with the members of the panel and conduct engagements with farm workers and farm dwellers across the country to create structures that would interface with the Department.
The Chairperson asked when the Committee could get the performance report on the Land Right Management Facility (LRMF) to know if the facility was making it or breaking it. There was a lot of outcry. People were victimized each and every day. How far was it with the investigation on E Cadastral Services as well as the review of Recapitalisation programme? How many farmers have exited the Recapitalization programme? Instead of underspending the Department was expected to overspending as demands were high. The Committee requested in writing a list of the pilot projects so that such projects could be visited. Some of the proposals by farm dwellers were that the Rural Development offices were far from the people so they could not report their frustrations and challenges. How could there be under spending in Rural Development when there were people without water. What were the financial implications of over achievement? What were the drought interventions made by the Department for the rural farmers?
The DG replied that the review had been completed. The draft review would soon be submitted to the Minister. There was a drive and the DRDLR was looking at assessing each of the individual farmers on retail to see which ones could be exited from the programme. The Department was also negotiating with the Land Bank so that once these farmers were out of Recap they could be assisted to produce on an annual basis. The list was available of all the 50/50 pilot projects. The Department would provide information on financial information where the Department had over achieved. There was a comprehensive written report on what the Department had done through its drought intervention and this would be provided. The investigation on eCadastral was ongoing by the Special Investigating Unit (SIU). There was no idea how far SIU had gone.
Mr Mhlongo asked why R29.6M was not spent under eCadastral.
The DG replied that the Department had stopped the eCadastral programme and disengaged with the service provider so the money could not be spent.
Mr Fitane said he was disappointed that at this level the Department did not have a common understanding with the Auditor-General of what constituted a ‘job’. The DRDLR should get back to the AG to get that and stop the habit of saying it had created jobs when a common understanding was not there.
The Chairperson asked for a written report of the outstanding disciplinary cases within the Department. He said one of the major challenges in restitution was lack of research capacity. Was there value for money from the institutions who were engaged to provide these services? Were the institutions submitting on time?
Mr Thami Mdontswa, Deputy Land Claims Commissioner, Commission on Restitution of Land Rights (CRLR), said the DRDLR struggled with the management of external researchers that were appointed. The approach was for the external researchers to assist in complex claims. With the experience of the fourth quarter of the last financial year, the Department had changed its approach. The Department was requesting assistance on district based approach. There were 2763 claims and there were plans to have all the claims researched by the end of the current financial year. 2542 claims were researched out of an annual target of 2660 leaving a balance of 118 claims. The target for Q4 was 266 but 911 claims were researched. Research was prioritized and the Department was on track to have the entire claims lodged by 1998, researched by the end of the current financial year.
The Chairperson asked for the impact of the accruals in Restitution under the current budget
Ms Sadiki replied that accruals and payables were within the current year budget. They related to travel that had to do with consultations with communities and constructions works that were on going. There was nothing that could be done around them as these were benefits rendered for which the Department was contractually bound to pay.
Mr Mnguni asked for the total cost of the yellow (partially achieved) and red bars (unachieved) in the presentation. Go and cost it for the Committee. Cost the partially achieved and those that were unachieved. There was no tally between performance target, sub targets and the budget. The people on the ground were helpless and could not trust anyone. While the accounting books were so good, the reality on the ground was disturbing.
The Chairperson asked when the finance model was going to be finalised.
The DG replied that he would be reluctant to commit on behalf of other agencies such as National Treasury and the Department of Agriculture, Forestry and Fisheries (DAFF). It could be completed before the end of the current calendar year
Mr E Nchabeleng (ANC) said the Department should provide a tool that would be helpful to the Committee. The budget was an instrument for monitoring and oversight but it appeared as though it was not having that effect in DRDLR.
The Chairperson asked if the accruals and payables were increasing or decreasing.
Ms Sadiki replied that the standard had change. Increase was more because the Department was trying to bring completeness to the picture of the level of commitment of the Government
Mr Mhlongo asked for the legislation on the standard used.
The CFO replied that the DRDLR used the cash basis standard with the National Government. When the cash did not flow, it was not done, and the money must be given back.
Mr S Matiase (EFF) said reporting should be defined by legislation and the legislation gave the scope. The Department was to report on Quarter 4. It had gone beyond that to present an annual report. He said the Department should go back, prepare a report and confine itself to the scope. The current report did not enhance accountability on the part of the executive and undermines the role of the legislature.
Mr Mhlongo said he was in support of Mr Matiase’s proposal.
The Chairperson asked if other members were in support of the proposal by Mr Matiase, seconded by Mr Mhlongo, to go and rewrite the report. She said 80 to 90% of the report was a quarterly one showing all the activities planned for the 4th quarter. The challenge was the inclusion of the APR percentages.
Mr K Robertson (DA) and Mr Walters said they were in support.
Mr Matiase said if the report was amended, the Committee would be letting the Department go scot free and condoning what was not condonable. The Department should be made to do the right thing and there should be no compromise.
Mr Mnguni said the Department should favour the Committee with a Quarter 4 report as expected.
The Chairperson said the Committee had agreed that the Department should delete all the annual reporting and focus on a 4th quarter report.
Minister Gugile Nkwinti said the DRDLR was in support and had no problem with rewriting the 4th quarter report. Mr Walters had made a very good proposal on using the content advisor's analysis as a backdrop for questions from the Committee .He urged the Committee to respond to it and move in that direction. The incompatibility pointed out by Mr Mhlongo was correct. The APP and Strategic Plan preceded the budget. It was a systemic programme and it was going to be like that. The President makes the State of the Nation Address (SONA) and addresses matters that had to do with the Departments. These were implemented and they were not in the APP. Members should rather look at the facts on the ground and not the APP. Some of the problems on Recap Programme could no longer be solved by officials but only by politicians as for instance in Mpumalanga, where people were fighting. These were not technical but political problems. Whatever party the Members belonged to, they had a role to play towards political stability. On the question of what is a job and not a job, the distinction between Narysec and the Expanded Public Works Programme (EPWP) was that the latter was not a job but a job opportunity. There were beautiful stories to tell, even as there were bad stories to tell. He enjoined Members to tell the beautiful stories as there were people who started as workers on farms but were now farm owners who exported goods.
The Chairperson replied that it was not that the Committee was not seeing the good things that the Department was doing. There were areas that needed to be improved upon. Though there were improvements in the report over the years, more needed to be done so that the DRDLR could achieve what it was intended to. The farm dwellers and the farm workers were not there yet as a lot had still to be done. The sad stories of farm dwellers could move someone to tears. Programmes intended to be carried out by the Department should be communicated to the Committee so that Members could be a part of the programmes. She requested the Department send reports of the budget shifts, the Land Right Management Facility, the list of the 50/50 pilot programmes, a brief report on the financial implications of over achievement, a comprehensive report on drought intervention, and the redrafted 4th quarter report. In the next meeting there would be a briefing on the legal opinion on the implications of the Constitutional Court judgement on the Restitution of Land Right Amendment Act. The Department would be invited to be part of the meeting. There would also be an assessment of the public hearing to see areas for improvement.
The minutes of the meeting of 20 April 2016 was adopted without amendments
The meeting was adjourned.
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