The former Department of Agriculture, Forestry and Fisheries reflected on its performance during the first quarter of 2019/20.
The Department reported there were 42 targets planned for Quarter 1, and 36 targets were achieved. This, therefore, translated into 86% achievement during submission of the validated report to DPME by end of October 2019. However, six targets were not achieved.
The non-achievement of certain targets was attributed to the lengthy demanding process of collating and validating evidence for reported performance. Agriculture is a concurrent function and relies on provincial department of agriculture for implementation. Evidence of the reported information is sometimes available only 30 days after the end of the quarter from provincial departments. That was affecting the finalisation of certain targets within a specific timeframe.
The Department pointed out there had been no achievements regarding business requirement documentation for the invoice tracking system. It resolved to discontinue with it and make use of the DRDLR invoice tracking system. No activities have taken place on the KyD programme due to financial constraints. The planting of 276 hectares in temporary unplanted areas has not taken place due to cancellation of the procurement of the seedlings from the nurseries registered with the seedling association of South Africa. Of the 13 joint operations to be conducted with partners, including Operation Phakisa initiative, three operations were not done due to budget constraints.
With regard to human resource matters, it further reported that post establishment has increased from 6 120 posts in the last quarter of 2018/2019 to 6 121 posts in the first quarter of 2019/2020. Vacancy rate has increased from 19,5% to 20,9%. The department indicated it was making a submission to abolish all non-funded vacant posts.
The Department also mentioned that the development of the macro organisational structure for the Department has been finalised. HR Governance environment has been improved as the HR delegations between the Minister and DG have been improved. The implementation of the early retirement without penalisation of pension benefits in terms of Section 16(6) of the Public Service Act, 1994 has been ongoing. Approximately 100 employees have applied for early retirement, but many employees have not embraced this directive.
The Department has been allocated R7.6 billion for the current financial year. 25.5% has been spent during the first quarter.
The Agricultural Research Council (ARC) briefed the Committee on its audit improvement plan and progress. The Council reported that even though the number of findings has been reduced, the organisation had findings which had a negative impact on the opinion. The audit opinion identified the following areas that need to be addressed to avoid getting another qualified opinion: property, plant and equipment; inventories; payables and receivables from exchange transactions; and revenue from rendering of services. The entity took the Committee through the initiatives that have been completed up to now, those that were currently underway, and those that had missed the deadline.
Members remarked the Department was not proactive in addressing the challenges of FMD in the provinces of North West and Limpopo; wanted to understand why the Department was not meeting the target of 2% for employing people with disability; asked why the Department was not doing well on grievances lodged; wanted find out what was happening with blended finance because farmers were seeing no progress; wanted to establish what the vacancy rate of the veterinarians was in the country; asked how the problem of the ageing workforce was going to be permanently resolved; wanted to know if there was additional personnel for monitoring and evaluation; and asked for an update on the SIU investigations.
Briefing by Department of Agriculture, Forestry and Fisheries (DAFF)
Mr Mike Mlengana, Director-General, DAFF, reported there were 42 targets planned for Quarter 1, and 36 targets were achieved. This, therefore, translated into 86% achievement during submission of the validated report to DPME by end of October 2019. However, six targets were not achieved.
The non-achievement of certain targets was attributed to the lengthy demanding process of collating and validating evidence for reported performance. Agriculture is a concurrent function and relies on provincial departments for implementation. Evidence of the reported information is sometimes available only 30 days after the end of the quarter from provincial departments. That was affecting the finalisation of certain targets within a specific timeframe.
Mr Joe Kgobokoe, Deputy Director-General: Policy, Planning and Monitoring & Evaluation, DAFF, focused his presentation on the non-achieved targets. Regarding business requirement documentation for the invoice tracking system, a discussion was held and it was agreed that the Department would use the invoice tracking of Department of Rural Development and Land Reform (DRDLR).
On mobilisation of farmers and data collection for Kaonafatso Ya Dikgomo (KyD) and poultry schemes, no activities were done. Money for this programme was supposed to come from provinces, but no commitment has been received yet from them. The Director for animal production and the ARC’s representatives were currently busy sensitising provinces with the hope of getting KyD activities funding. Validation was still in progress with regard to the 9 export protocols for phytosanitary requirements. The planting of 276 hectares in temporary unplanted areas has not taken place due to cancellation of the procurement of the seedlings from the nurseries registered with the seedling association of South Africa. This was because all bids received were above the delegation of the appointed chairperson of the Bid Evaluation Committee. All bids were above R10 million and they had to be chaired by the Deputy Director-General, appointed by the Director-General in terms of the Delegation 10(c).
With regard to the register for outstanding small-scale fisheries cooperatives in Eastern Cape, the assessment team has not been appointed by the delegated authority. The delegated authority changes as the delegation reverted back to the Minister. The limited staff in Cape Town would assist with assessment though no one has been appointed by the delegated authority to assess the application forms.
Ms Kgomotso Kgang, Acting Deputy Director-General, DAFF, presented on human resources matters. She reported that the post establishment increased from 6 120 posts in the last quarter of 2018/2019 to 6 121 posts in the first quarter of 2019/2020. The vacancy rate increased from 19,5% to 20,9%. The Department was making a submission to abolish all non-funded vacant posts. The following key performance indicators within the human resources and development arena were developed for each HR priority as identified for the current MTEF HR Plan:
- repositioning of HR as a strategic partner to enable DAFF to achieve its strategic objectives
- employment of the youth in the AFF sectors
- transformation of the workforce
- management of the challenges of an aging and ailing workforce and employment
Pertaining to HR issues on the radar, she reported the development of the macro organisational structure for the Department has been finalised. HR Governance environment has been improved as the HR delegations between the Minister and DG have been improved. The implementation of the early retirement without penalisation of pension benefits in terms of Section 16(6) of the Public Service Act, 1994 has been ongoing. Approximately 100 employees have applied for early retirement, but many employees have not embraced this directive.
Ms Silindokuhle Sambo, Director: Financial Accounting, DAFF presented the finances. She reported the department has been allocated R7 664 889 billion for the current financial year. 25.5% was spent during the first quarter.
The reasons for over/under expenditure against the 25% target were presented:
•Payments in respect of arrear accommodation charges for state- owned buildings, leases for private- owned buildings and municipal fees were made.
•Double payment to Agricultural Research Council and quarter 1 payments for conditional grants to provinces for Ilima/Letsema were made.
•Quarter 1 payments to provinces in respect of CASP conditional grants were made. Transfer payments to the Land Bank in respect of support to small emerging farmers (R150,0million) and the blended finance programme (R271,469million) will be made in quarter 2.
(Tables and graphs were shown to illustrate budget expenditure)
Briefing by the Agriculture Research Council (ARC)
Dr Hilton Vergotine, Chief Risk Officer, ARC, informed the Committee that the entity had received a qualified audit opinion for 3 consecutive years. The number of findings has been reduced, but the organisation had findings which had a negative impact on the opinion. The audit opinion identified the following areas that need to be addressed to avoid getting another qualified opinion: property, plant and equipment; inventories; payables and receivables from exchange transactions; and revenue from rendering of services.
The audit improvement plan was looking at improving the overall corporate governance, performance management and employee relations, interim financial statements and prior year misstatements, property plant and equipment, accounts receivables and other payables, and other areas like procurement and contract management and residential rental income. The audit improvement plan to address ICT findings would be followed up during the ITGC and application control review which are scheduled to be performed during quarter 3.
The following are some of the initiatives that have been completed to date:
- revision of the internal audit plan to demonstrate value-add on projects relating to AIP
- using the CSD as a primary point of reference in effecting changes in banking details
- all bid evaluation committee reports to be reviewed by SCM senior manager before are tabled at respective bid adjudication committees
- decentralisation of the Fixed Assets Register and monthly monitoring of FAR vs AFS
- S & T reconciliations per institute to be sent weekly for follow-ups
The following initiatives are currently in progress:
- scanning of documents to address limitation of scope
- electronic scanning and filling of all documents
- SCM to be compliant with legislation
- staff deductions on employees with outstanding S & T advances
- roll out VIP module on S & T
- consequence management
- improving overall corporate governance
The following initiatives have missed the deadlines, but deadlines have been revised:
- management representation letters
- benchmarking of the rental income charges to market value and align accordingly
- scanning of all lease agreements and relevant documentation and be filed in Share Point
- scanning of S & T documentation and be filed on a secured shared drive
(Table was shown to illustrate ICT AIP audit findings per area and progress)
DiscussionMr R Cebekhulu (IFP) said it appeared the Department was not proactive in addressing the challenges of Foot and Mouth Disease (FMD) in North West and Limpopo. He suggested that the areas that were affected by FMD should be made buffer zones and that animals from these areas should not be transported.
Mr Cebekhulu further asked what was making employees reluctant to take the early retirement exit packages.
Mr Mlengana explained he has declared the area between Kruger National Park and Limpopo a red zone. He said buffaloes were the carriers of the FMD. The animals were getting the disease because they drink from the same rivers as the buffalos. A technical committee, comprising veterinarians, red meat industry, and trading partners, have been established because there was a need to be transparent about the disease. Most African countries were not trading because they have been found wanting in terms of the FMD, but South Africa was still fortunate it could trade. The disease is in KZN, Mpumalanga and Limpopo, especially in the Vhembe district. The World Organisation for Animal Health (OIE) standards required that the animals be culled and the Department has to compensate affected farmers. The auctions have also been identified as the source of the FMD because a weaner bought from one auction was found to have been the carrier of FMD and was kept in a feedlot. Unfortunately, the weaner could not be tracked where it was from. The Department has taken a decision to ban the areas where auctions happen in the affected provinces. The FMD was affecting farmers that were facing drought.
Ms Kgang explained that the employees were not applying for the exit packages because it was a voluntary exercise for those who want to retire at 55. They could not be forced to take up this opportunity even though they would not be penalised. It had to be accepted that employees had a low appetite for this exit package. Approximately 100 employees have applied for the early retirement exit package. Those who have to apply have to be 55 and over.
Mr L Ntshayisa (AIC) asked why the Department was not meeting the target of employing 2% people with disability. He also asked why the Department was not doing well on grievances lodged. Lastly, he asked for an explanation about why the ARC had a qualified opinion for three years.
Ms Kgang said the percentage on disability was currently at 1% because the Department was not filling the vacancies due to budget constraints. She also pointed out there were only eight employees in the directorate that deal with grievances and cases. The Department was partnering with other sister departments in order to address the challenges even though the eight people were managing the work well. A project plan has been developed to assist in finalising all labour related cases.
Dr Vergotine said the qualified opinion was a result of instability within the entity. Now the entity has appointed a CFO, revised the structure in finance division, and stabilised ICT areas.
Mr M Montwedi (EFF) observed the Department has not managed to plant all the targeted hectares on programme 2. 276 hectares have not been planted. The Department did not seem to have mitigation plans in place for service providers who could not do the work. He further wanted to understand if the small-scale cooperative model was working because it was not working in Taung. He asked the Department to be specific when talking about the revitalisation of irrigation schemes because there was no revitalisation of an irrigation scheme in Taung, but only on the side of the Northern Cape. Taung farmers were drawing water from Vaalharts.
An official from the Department admitted that most cooperatives were collapsing after two years of being established. They were not forming organically. The cooperatives were started by people who knew how the government system worked. When the money comes in, the cooperatives start to crumble. These cooperatives were started by people who were not even producing anything. In the next coming years, there would be no funding going to the cooperatives, but the Department would provide support to ensure the cooperatives continue to produce.
Mr Mooketsa Ramasodi, Deputy Director-General: Animal Production, DAFF, informed the Committee when it comes to irrigation the Department was following its irrigation strategy. The target on the irrigation of land to be utilised has been achieved. Engagement with Taung farmers would be taken up regarding the irrigation scheme.
Ms A Steyn (DA) remarked that two weeks have passed and the Committee has not received information on AgriParks. She was not satisfied with the explanation on FMD. Auctions cannot be the only source of the FMD. The Department needed to solve the problem before things get chaotic. The Department cannot be on the reactive mode all the time. She also noted nothing has been achieved on the commercialisation of black farmers. She wanted to find out what was happening with blended finance because farmers were seeing no progress. She asked if the outstanding funding has been paid to the ARC.
Mr Mlengana indicated that what was lacking in blended finance was the policy guide. Now the policy has to be taken through the cabinet processes so that it could get funding to assist smallholder farmers. The ARC matter was being handled internally. The ARC request for additional funding was handed to National Treasury. ARC received funding to the tune of R20m.
Ms T Breedt (FF Plus) wondered if FMD affected areas in North West, Gauteng, and Mpumalanga could not be compartmentalised in terms of fighting the disease. She wanted to establish what the vacancy rate of the veterinarians was in the country. In her view, it appeared that critical posts would fall by the wayside because of the plans to abolish unfunded posts. Finally, she asked how the Department was planning to address absenteeism.
Mr Mlengana said the process of concurrent functions was destroying the efficacy of accountability. The provinces were not updating the Department on the activities of the veterinarians.
Mr Ramasodi added that animal health has 266 posts and 33 vacancies, while veterinary public health has 22 vacancies.
Ms Kgang stated there is a directive in place that deals with the management of absenteeism. The Department was able to detect it and deal with it.
Mr N Capa (ANC) commented that under-expenditure was placing the Department in a bad light because it indicated the Department did not know how to spend its budget. He wanted to know how the problem of the ageing workforce was going to be permanently resolved.
Ms Kgang explained that the Department has established a committee that would deal with the talent management strategy. It would also deal with employment equity and recruitment of the young and disabled.
Ms M Tlhape (ANC) remarked that the Department was appearing to be too relaxed because it was the first quarter. The work that it was carrying over would make things difficult for it in the next coming quarters. She asked for clarity on the total expenditure. She then enquired how the double payment to ARC has impacted on the Department.
Ms Sambo replied that the total budget allocation was R7.6 billion. The Department has spent 25% for quarter 1 and that amounted to R360m. The Department had an agreement with the ARC on how it wanted to receive its funding. ARC had requested a double payment to address its cash-flow challenges.
Ms K Mahlatsi (ANC) wanted to understand what informed the delays in validations. She also asked for clarity on the human resources structure that has been approved by DPSA and the one sent to the Minister
Mr Kgobokoe explained the concurrent function with provinces was problematic. Provinces were not submitting reports in time to the Department. When the Department receives the reports from provinces, it had to validate those reports. If there are delays during validation, the Department would ask for an extension of time from the DPME.
Ms Kgang stated the macro structure for the new department (DALRRD) has been approved and submitted to the DPSA. The other one submitted to the Minister has got to do with the findings from the AG.
Ms B Tshwete (ANC) commented that the R47m spent against a budget of R337m for 120690 hectares of underutilised land in communal land to be cultivated for production was a sign of under-expenditure. It was going to affect food security and should be resolved speedily. She also stated it was not acceptable to have zero implementation on agro-processing yet the set target is 750. She wanted to know if the Department has got an employment equity committee.
Ms Kgang reported the employment equity committee has been in existence. The only thing that needed to happen was to bring both the human resources plans of former DAFF and DRDLR together, so that the plans could be tailored to suit the new department (DALRRD). She added that DPSA issued a circular to relax entry level requirements.
Ms T Mbabama (DA) remarked that the reasons presented for non-achievements were not acceptable. Budget constraints should not be the excuse. It was not acceptable to report about planting of hectares that has not taken place.
Mr Kgobokoe said the reasons were provided by the forestry division. The chairperson was not delegated to chair the bid evaluation committee because all the bids were above R10m.
Ms Breedt wanted to find out how the Department was incorporating organised agriculture with regards to FMD.
Mr Mlengana explained the Department met the Auctioneers Association of SA, AgriSA, AFASA, and other stakeholders on how to fight the FMD and closure of auctions. The opening of auctions would have devastating consequences. It was better to close the auctions to avoid a catastrophe. Swine fever has been fought because the sale and transportation of pigs was stopped.
The Chairperson commented that the Department was not complying with legislation in terms of submitting quarterly reports. Corrective measures had to be implemented. He could not understand why it was taking four months to validate quarterly performances. He wanted to know if there were additional personnel for monitoring and evaluation. He further asked for an update on the SIU investigations and audit matrix.
Mr Kgobokoe stated that in terms of DPME procedures and processes, the Department had to submit reports to the DPME after 30 days at the end of the quarter. Validation reports had to be submitted after 90 days.
Mr Ramasodi added that delays in the validation of export protocols were because of the lack of electronic certificates because when you have a protocol you have to issue a phytosanitary certificate. Even though the electronic certificates were proving to be a challenge, work has been done.
Mr Kgobokoe reported that a detailed plan on monitoring and evaluation personnel has been presented to the Minister. 1000 people with specific skills would be taken from the provinces. 16 people have been employed temporarily up until March 2020. The budget would be taken from CASP. The contracts of the 16 people would be renewed. A report in terms of gender, age, and qualifications would be sent to the Committee.
Mr Mlengana said a progress report on the audit matrix would be sent to the Committee. Regarding SIU investigations on CASP, the Department put an audit on North West and Free State, particularly on the Vrede Dairy. Fresh investigations have been instituted on how the department spent money in the North West. National Treasury and the Internal Audit Committee of the Department were driving the investigation. A preliminary report would be sent to the Committee when it is available.
Adoption of minutes
12 November 2019 minutes
The Chairperson took the Committee through the document, page by page.
Ms Tshwete moved for the adoption of the minutes.
Ms Breedt seconded the motion.
The minutes were adopted with no amendments.
The meeting was adjourned.