The Department of Rural Development and Land Reform (DRDLR) presented on its second quarter performance, and revealed that it had not achieved most of its targets. It reported that the strategic objectives of its Programme 5 (Land Reform) were to promote equitable land redistribution and agricultural development, and provide comprehensive farm development support to smallholder farmers and land reform beneficiaries. However, only 11 579 ha was achieved during the quarter against the target of 32 917 ha, and the number of hectares allocated to smallholder farmers was 2 100, compared to the target of 14 963. The target for the number of farms supported through the Land Development Support Programme was 56, but only 19 was achieved. The target for the “One Household, One Hectare” programme was 805, but nothing was achieved. The target for the settlement of labour tenants’ applications was 683, but only 23 was achieved. The Department’s expenditure had amounted to R4.384 billion in the quarter, which was 40% of the total allocated budget.
Member expressed great concern at the sharp decrease in the Department’s performance in all its programmes, considering the large expenditure figures, and drew specific attention to its failure to collect debts and invoices within the specified time frame.
The Commission on Restitution of Land Rights, an entity of the DRDLR, focused on the settlement of land claims and the finalisation of claims. In the second quarter, the target was to settle 132 land claims, and only 71 were settled. For the finalisation of the land claims, the target was 169, and only 110 had been finalised. Provincially, only the Eastern Cape and Gauteng had managed to settle the land claims. It responded to Members’ concerns by stating that plans had been put in place to deal with the situation.
The Office of the Valuer General reported that it had achieved only 20% of its targeted completion of valuations submitted by restitution within specified times. The average number of days taken to issue a valuation certificate had been 66 days, against the target of 50 days. It said the challenge facing the OVG was lack of capacity, and the fact that critical positions had not been filled.
Members raised questions over the stagnant progress of the OVG in dealing with the issues that were hindering its overall performance. They expressed reservations over its relevance and capability of fulfilling its mandate.
Department of Rural Development and Land Reform: Performance Report
Ms Phumeza Ghubuza, Office of the Director-General, Department of Rural Development and Land Reform (DRDLR), said the Department’s overall performance in the second quarter was 29% for all the targets, and that Programme 1 (Administration) and Programme 2 (Geospatial and Cadastral Services) were the main contributors to this achievement. However, Programme 4 (Restitution) had recorded a 0% performance for both the first and second quarters.
The purpose of Programme 1 (Administration) was providing strategic leadership, management and support services to the Department. The strategic objectives involved of ensuring 100% compliance with government regulations and legal prescripts, and obtaining an unqualified regularity audit opinion of financial and non-financial performance by 2020. The performance indicator used was the percentage of valid invoices paid within 30 days. The Department had achieved 95%, and an unqualified audit opinion had been achieved in the 2018/19 financial year.
The purpose of Programme 2 (Geospatial and Cadastral Services) was to provide geospatial information, cadastral surveys, deeds registration and spatial planning, as well as technical services in support of sustainable land development. The sub-programmes include the registration of the Deeds Trading Account, National Geomatics Management Services, Spatial Planning and Land Use Management, and the South African Council for Planners. The strategic objectives of the programme were comprised of facilitating integrated spatial planning and land use management in all provinces, and ensuring an integrated and comprehensive land administration system. The performance indicator used was the land use master plan for land reform. The target was to draft a land use master plan and in the second quarter a diagnostic report was achieved. The second performance indicator used was the development of the National Spatial Development Framework (NSDF). The target was to develop an NSDF implementation strategy, which was submitted for approval and finally approved. The third performance indicator used was the percentage of deeds made available within seven days from lodgment. Only 93% was achieved against the annual target of 95%. The fourth performance indicator used was the deeds transformation policy approval, which was not achieved by the Department although a policy research report was the target for the second quarter, and some work was done.
The fifth performance indicator used was the number of maps produced by the National Maps Series. The target was set at 53, but the Department managed to achieve 56. The sixth performance indicator used was the average number of working days taken to process registerable diagrams, sectional plans and general plans. The target was set at 14 days, and the Department achieved 13 days. The last performance indicator used was the number of state land parcels surveyed. The Department did not achieve anything, although the second quarter target was set a 300. Ms Ghubuza explained that the reason for this was because the Department of Public Works (DPW) had received funding from the National Treasury to proceed with the same project as the asset owner. The project was therefore forwarded to the DPW to avoid wastage.
The purpose of Programme 3 (Rural Development) was to initiate, facilitate, coordinate and act as a catalyst for the implementation of a Comprehensive Rural Development Programme (CRDP). The sub-programmes of the programme include Rural Infrastructure Development (RID), Rural Enterprises and Industrial Development (REID) and the National Rural Youth Services Corps. The strategic objectives were comprised of providing support to rural communities to assist with maintaining livelihoods, facilitating infrastructure development and increasing job opportunities to ensure skills development through the CRDP. The performance indicator used was the number of completed infrastructure projects. The second quarter target was set at 38, and the Department achieved 45, which was an over-achievement. The second performance indicator used was the number of supported rural enterprises. The target was 88, and 81 was achieved. The third performance indicator used was the number of functional Farmer Production Support Units (FPSU). The target was five, and only only FPSU was functional. The fourth performance indicator used was the number of skills development opportunities provided in rural development initiatives. The target was 2 103, and 2 226 was achieved. The last performance indicator was the number of job opportunities created in rural development initiatives. 1 559 was achieved against the 1 661 target.
Ms Ghubuza said that programme 4 (Restitution) would be presented as part of the Commission on Restitution of Land Rights’ presentation.
The purpose of programme 5 (Land Reform) is to initiate sustainable land reform programmes in South Africa. The sub-programmes of the programme include the Land Reform National Office, Land Reform Grants, and Communal Land Rights Programmes. The strategic objectives were to promote equitable land redistribution and agricultural development, and providing comprehensive farm development support to smallholder farmers and land reform beneficiaries. The performance indicator used was the number of hectares acquired. 11 579 ha was achieved against the target of 32 917. The second performance indicator used was the number of hectares allocated to smallholder farmers. The target was set at 14 963 ha, and the Department achieved 2 100 ha. The third performance indicator was the number of smallholder farmer beneficiaries who were allocated land. The Department achieved five out of 32 of the second quarter target. The fourth performance indicator was the number of farms supported through the Land Development Support Programme. The target was 56, and only 19 was achieved. The fifth performance indicator was the number of households supported under the “One Household, One Hectare” (1HH1HA) programme. The target was 805, but nothing was achieved. The sixth performance indicator was the number of communal property associations (CPAs) supported to be compliant. The target was 120 and 117, was achieved.
The seventh performance indicator was the number of labour tenants whose applications were settled. The target was 683, and only 23 were achieved. The last performance indicator was the number of hectares allocated to farm dwellers or labour tenants. Nothing was achieved, compared to the set target of 1 875.
Ms Ghubuza explained that the performance barometer identified and compared performance from the first quarter up until the second quarter.
The Chairperson asked the Director-General, Mr Mdu Shabane, if the presentation by the Commission would address the land claims issues which had been skipped in the presentation by Ms Ghubuza.
Mr Shabane responded that the Commission’s presentation was separate from the Department’s, and that the Department’s Chief Financial Officer would cover the issue on land claims in the financial performance presentation.
Ms Nomfundo Gobodo, Chief Land Claims Commissioner (CLCC), said that the Commission was under the Department as Programme 4 (Restitution) and that there was an expectation by the law that restitution was defined as a commission. She clarified that the same information in the Department’s presentation would be identified in the Commission’s presentation.
Commission on Restitution of Land Rights
Mr Sanjay Singh, Chief Director: Service Delivery Coordination, CLCC, said the presentation would focus on the settlement of land claims, indicating that there were two annual performance plan (APP) targets – the settlement of claims and the finalisation of claims.
In the second quarter, the target was to settle 132 land claims, and only 71 were settled. For the finalisation of the land claims, the target was 169, and only 110 had been finalised. Provincially, only the Eastern Cape and Gauteng had managed to settle the land claims. He explained that the process starts off slowly in the first quarter because there are negotiations with land-owners. He highlighted that the performance of the Commission process had improved in terms of negotiations. Recovery plans had been put in place, which had improved the settlement of land claims to 71% of the annual target.
Mr Singh mentioned that some issues between the Department and the land-owners had been addressed. The Kuyasa housing project had assisted the Department in addressing issues. The backlog issues had been resolved to speed up the process of finalising land claims.
DRDLR: Financial Performance
Ms Rendani Sadiki, Chief Financial Officer (CFO): DRDLR, said expenditure had amounted to R4.384 billion in the quarter, which was 40% of the total allocated budget. Employee compensation had amounted to R1.189 billion, goods and services to R896.7 million, transfer payments to R2.078 billion, and payment for capital assets to R219.7 million. Drawings were under-spent by the Department by R1.129 billion, administration was also under-spent by R183.7 million, the National Geomatics and Management Services by R45.9 million, Rural Development by R258.8 million, Restitution by R429.4 million and Land Reform by R210.9 million.
The Programme 1 (Administration) recruitment process had been put on hold because of the merging of the Department of Rural Development and Land Reform and the Department of Agriculture, Forestry and Fisheries.
Regarding the transfers and subsidies, the expenditure amounted to R2.078 billion, with under-spending of R795.5 million. The under-spending was due to the pending transfer of R71.1 million to the Office of the Valuer-General, and the ongoing product plan finalisation of consultations with beneficiaries for the 1HH1HA programme. The under-spending in relation to goods and services was as a result of delays in the implementation of rural development projects and delays in receiving outstanding documents from beneficiaries who could not be traced, and rejected offers.
Ms Sadiki said that the ministerial services under Programme 1 had over-spent by 13% due to the lack of funding of other offices as a result of the merging of the two Departments.
The expenditure was mostly on Programme 4 (Restitution), followed by Programme 5 (Land Reform).
Appointments had been put on hold with regard to the compensation of employees (CoE), which falls under current payments.
The RID and REID programmes had affected the delivery of goods and services as there were funding issues regarding interest and rent on land. She emphasised that there was a lot of debt from municipalities. She also mentioned that expenditure was mostly spent on transfers and subsidies, followed by the CoE.
RID projects were behind with implementation, and projections had been taken till mid-year. Regarding REID projects, Kwa-Zulu Natal had exceeded the projections of the budget. The National Rural Youth Service Corps (NARYSEC) usually performed in the fourth quarter due to registration at the beginning of the year.
There had not been much performance with the Labour Tenant Act (LTA), as most provinces were at 0% performance.
The Department had variances in strategic land acquisition, as seven properties had not been acquired due to:
- Rates and taxes of an insolvent estate;
- A water rights dispute on the property;
- Withdrawn, as not recommended by the Provincial Technical Committee;
- Re-submitted due to a divorce decree.
Ms Sadiki referred to the revenue collected from farmers, and said the outstanding debt was still high, which was why the Department had outsourced a debt collection company to assist it with collection, because only 0.8% of the total debt had been collected. However, there was not much difference in the collected amount. The reason behind the delayed debt collections was because farms were not productive, meaning that there was no revenue generated, so farmers were unable to settle the debts.
A deficit of R35 million was projected in the economic classification, but the deficit had been R20 million. The reason for the deficit was that Deeds had not been funded by the Department, so Deeds were self-sustainable and according to regulations, Deeds should not operate at a deficit.
With regards to the audit implementation plan in various branches, findings amounted to 56% full implementation, 35% partial implantation and 10% no implementation.
Office of the Valuer-General (OVG)
Ms Motlatšo Mahloka, Acting Valuer-General, OVG, said she would be presenting on the performance of the OVG, and that an analysis of the third quarter would be included in the presentation.
The entity had had a total of six audit findings in 2018, and all of them had been resolved. In 2019, it had had 13 audit findings, but only two were unresolved, and they would be resolved at the end of the financial year.
Regarding the financial performance:
- The OVG’s cash and cash equivalents totaled R127 million;
- R123.1 million for the OVG was surrendered to the National Revenue Fund (NRF);
- R142.1 million was transferred by the DRDLR to the OVG for funding of third quarter activities;
- Spending by the OVG amounted to R25.7 million;
- Compensation of employees amounted to R10.3 million;
- Goods and services expenditure amounted to R15.4 million.
Ms Mahloka presented the OVG’s goals and the set targets.
The first goal was support and reform. The indicator used was the completion of valuations submitted by restitution within specified times, where the OVG had not achieved its target of 100%, but only 20%. Another indicator was the number of completed backlog valuations, in which the target of 332 was not achieved. The last indicator was the average number of days taken to issue a valuation certificate, where the OVG achieved 66 days against the target of 50 days.
The second goal was to develop criteria, procedures and guidelines. The indicator used was the implementation of the approved valuation criteria, procedures and guidelines, which the OVG had achieved by obtaining an approved implementation plan.
The last goal was organizational sustainability. The indicator was the number of potential target clients surveyed, and a total of three was achieved, which was the target. The second indicator was the revenue from other non-land reform valuations, for which the OVG did not set any targets. The third indicator was the number of independent valuation review and quality assurance committee meetings held, and three out of four meetings took place. The final meeting did not happen because the committee had been appointed late. The last indicator was the percentage of valuations reviewed by the Committee, which was achieved at 6.7%. The report had been sent back because the committee had to rectify some errors, but the report would be recorded in the next quarter as achieved, once it was received.
Ms Mahloka gave details of the third quarter performance. The indicators used were:
- The completion of valuations submitted by restitution within specified times, and 37% was achieved against the 100% target.
- The number of completed backlog valuations, where 465 were completed against the 995 target.
- The average number of days taken to issue a valuation certificate, where 125 days were achieved against the 50 days target.
She said the OVG had 742 parked valuations which would be reported on only at the year-end.
Regarding backlog progress, the original backlog count was 995, but the current count was 530, which is inclusive of land redistribution and development (LRD), LTA and restitution.
The independently verified performance of the third quarter used the following indicators to measure performance:
- The number of potential target clients surveyed, where the target was 11 clients, but only three were surveyed. The reason was that surveys were sent out, but the responses were not anticipated.
- The number of independent valuation review and quality assurance committee meetings, where the target was 12, but only eight meetings occurred.
- The percentage of valuations reviewed by the quality review committee. The target was 5%, but there was no achievement.
- The development of a property data management tool. The OVG had drafted a project plan which had been approved by the Valuer-General.
Ms Mahloka said that the challenge facing the OVG was capacity, and the fact that critical positions had not been filled. However, the Minister was in agreement with the OVG’s organogram, a recruitment drive which had 21 approved positions, a project management office had been established to improve efficiency, a Ministerial advisory panel had been appointed by the Minister, and a project plan had been drafted for the panel. Stakeholder mappings had been done and workstreams had been finalised to carry out the work.
Ms N Mahlo (ANC) referred to the 29% performance rate, which was a decrease from the first quarter of 56%, and requested the Department to explain the decrease or challenges that had resulted in the decrease. She applauded the Department for taking the necessary measures to ensure that invoices were paid on time. She also asked for clarification on the 500 state parcels within the Department.
Ms B Tshwete (ANC) asked for clarification on Programme 5 (Land Reform), which indicated a high level of rejection by sellers. What was the Department’s plan to address the issue, and what was the reason behind the rejections. Regarding Programme 3 (Rural Development), she asked what the delays were in appointing service providers by the Department, and asserted that the reason it had provided was not good enough. She commended the Department for achieving 95% in paying invoices within 30 days. She asked how over-spending occurred during the Departmental municipal and provincial transfers, and how it would impact on other quarters. Regarding rural infrastructure developments, she asked what measures had been put in place to monitor intake.
Ms T Breedt (FF+) asked how the Department planned to deal with transversal projects and municipal issues. She expressed concern over the under-spending in provinces, and asked how funds were allocated by the Department. She also emphasised that not enough land was bought to sustain farmers. She asked for the location of the one functional Farmer Production Support Unit (FPSU) mentioned in the presentation. What measures had been put in place to ensure performance for provinces that did not perform? What was the name of the debt collection company that was used by the Department, and the terms and conditions of the debt collector? She also expressed concern over the regression in the second quarter.
Mr N Masipa (DA) said that the failure to settle bills in Programme 1 was a problem, and that the Department should work harder to improve its performance. He also asked why none of the parcels had been surveyed. Why were the other provinces, except for Limpopo, not allocated targets for the due spatial training? He expressed concern over the one functional FPSU, and asked the Director-General to help Members to understand the challenges faced by the Department in producing functional FPSUs. He asked why there were high expenses for projects, although targets were not met.
Ms K Mahlatsi (ANC) expressed concern with the 29% APP performance. She said the Department should not rely on ‘catching-up’ in the following quarters, because not much could be done in the last quarters. She commended the Department for the audit action plan and asked if the outstanding findings would be resolved by the end of the financial year. How would the Department ensure that provinces performed efficiently? Were finances included in the programmes, and how did the Department balance performance against results?
Mr M Montwedi (EFF) stood in agreement with Ms Mahlatsi on the issue of the Department ‘catching up,’ and asked why it was not realistic with the expected targets. He expressed concern over the revenue collected per province, and asked why only 5% of debts had been recovered from farmers, saying the reason provided that farms were not being productive was invalid. Money should be supplied by the Department to support farmers for increased production. He asked if the policy on NARYSEC had been reviewed, and what consequences should be taken against farmers who did not meet their lease requirements.
Ms T Mbabama (DA) commended the Department for presenting issues accurately and transparently, and for being aware of its failures and successes. This awareness should assist the Department in addressing the prevalent issues, but she asked that future presentations should include more improvements instead of failures.
Mr N Capa (ANC) expressed concern over the performance of Programme 3 (Rural Development) and Programme 5 (Land Reform), and emphasised that the two programmes were essential to the existence of the Department. He also asked for clarification on the high financial injection for REID projects in Gauteng, which was less rural than other provinces. He added that there was room for improvement from the Department.
Ms M Tlhape (ANC) agreed with Ms Mbabama on the transparency of the Department. She said Mr Singh had clarified most of the concerns she had regarding Programme 4 (Restitution) and Programme 5 (Land Reform), and there had been progress in the performance of the programmes. Provinces needed to be brought up to speed with performance. She also agreed with Ms Mahlatsi that outstanding audit plan issues should not be an ongoing occurrence, and asked what happened when there was over-performance and under-performance in the provinces.
Mr Masipa asked that the debt collection policy for the lease farms be shared with the Committee.
The Chairperson expressed dissatisfaction with the second quarter performance. He stressed that the work done by the Department and its mandate was essential for rural development and the transformation of South African society. The Department was failing to fulfil its mandate of land redistribution and meeting targets, which was worrying. The third quarter performance report had to reveal improvements in the performance and achievements. How did the Department plan on addressing the issues identified in the presentation, and the number on offers rejected? In August, the Constitutional Court, together with the Land Claims Court, had agreed that a Master should be assigned to oversee settlements of the Land Claims Court. The Master had been appointed and was ready to work.
He asked if the Department could briefly explain the extent of the challenge to settle labour tenant claims. Regarding restitution, he asked if Ms Gobodo could explain the Commission’s place in the new structure to be implemented from 1 April. He also wanted to know why the figures of the President’s announcement on the 44 000 hectares of land being released for further restitution at the State of the Nation Address (SONA) were not included in the presentations, and asked how many claims had been received by the Department.
Office of the Valuer General
The Chairperson made the Department aware of the target for the redistribution of land and the progress since the “dawn of democracy.” He said that 79% of the total land in the country was still in the hands of the minority, and asked the Director-General to assist the Committee to understand the achievements so far on land redistribution. He also questioned the role of the OVG in the acceleration of the distribution of land. The Director-General had mentioned that legislation would be reviewed -- which areas of the legislation would be addressed? He also asked if the OVG was independent from the Department. The OVG should indicate and clarify the two unresolved audit findings and why they had not been resolved in the third quarter.
Ms Tshwete was pleased that solutions had been provided to the Committee. The capacity issues should be resolved, as they would impact on the Department’s performance, and this would also address the vacant critical positions challenge. She argued that capacity issues should not be an ongoing problem, especially when funds were being surrendered at the end of the financial year and when a lack of capacity was delaying the process of transferring land.
Mr Montwedi emphasised that the legislation affecting the OVG should be reviewed holistically by the Committee, and assistance could be provided.
Ms Mahlatsi agreed with Mr Montwedi that the OVG’s performance could not be judged on, due to the lack of capacity, especially since the Minister had pleaded with the Committee to consider the issues of the entity. She asked how many posts had been advertised and filled. Without capacity, issues of the audit action plan could not be addressed. She requested that the Director-General forward a message to the Minister and the rest of the Ministry to expedite the process.
Mr Masipa requested the OVG to share the organogram with the Committee.
Ms Mahlo asked if the Commission had finalised its issue on information technology (IT) as promised. She enquired about the progress of Project Kuyasa and its time frames. She questioned whether the Department had appointed a task team to develop a strategy for the Department, and if the task team would assist in addressing the identified issues and meeting targets. The Commission had mentioned shifting targets, and she asked if the process was ongoing. She was pleased that the Director General had covered most of the issues of concern, especially the legislation and land claims.
Ms Tshwete expressed dissatisfaction with the presentation of the OVG, She questioned the relevance of the OVG, especially as state organs were tasked with addressing legacy issues in the country. This was fuelled by 12 personnel attending land evaluation claims courses. She argued that the OVG was not prioritising its mandate and was sabotaging the land reform strategy of the government. She questioned how 18% of the total budget had been spent by OVG to date. She said there were no targets outlined in the OVG presentation for employing personnel, considering the R71.5 million budget allocation. She also agreed with Mr Masipa that the organogram should be provided.
Ms Breedt also stressed the organogram needed to be provided, and expressed concern that there had been no change in the number of personnel at OVG, with 21 positions still to be filled. How would the posts be filled? During previous interactions with the OVG, a service level agreement (SLA) was going to be signed -- what was the progress on this? She referred to the court case on land claims being put on hold in order to work on the backlog on restitution claims which had not been evaluated, and asked how many of the existing claims had been evaluated. She enquired about the R123 million surrendered by OVG, and how to prevent the surrender of funds to ensure better management of finances. Lastly, she asked about the progress in responding to audit findings, and if there was a need for assistance by the Committee.
Mr Capa was impressed that the OVG report was ahead until Quarter 3, but expressed concern that the first two quarters were in the red. Should there be intervention by the Committee?
Ms Tlhaphe expressed disappointment that the OVG remained incompetent, and there was no significant growth. She also requested that future presentations should be aligned. Would the OVG surrender funds, because it looks like a trend? Did the entity require the allocated budget amount? She was also skeptical of the performance of the OVG, and proposed that a specific plan should be drafted by the entity so that the Committee could discuss and monitor the plans for improvement.
Mr Shabane responded DRDLR’s performance was not pleasing, and that plans had been put in place to improve performance. The lack of performance in the most essential programmes was an issue, especially with Programmes 3 and 5, which were supposed to provide support to smallholder farmers as well as deal with the Department’s inability to settle labour tenant claims.
Lifecycle goals for rural infrastructure projects set by the Department during planning were unrealistic, which resulted in targets not being achieved. He admitted that this was a problem because funds had had to be moved from the rural infrastructure branch to other programmes because the lifecycles would not allow certain amounts to be spent. Other projects would also have major fund shifts because of the projects’ lifecycles.
Mr Shabane said that money would be spent on the District 6 project, as requested by a court order for the Department to recommit to the project. It had allocated a three-year budget of R1.4 billion to redevelop the project. Plans had been aligned within the three years of the redevelopment. He added that the Department had a planning problem which needed to be addressed.
REID projects had made progress during the period when the Department was partnering with other institutions. Programmes were being implemented in four provinces. The programmes would be reintroduced because they had had to be reviewed and put on hold.
The major challenge within the Department was proactive land acquisition. Since 2006, 2.2 million hectares of land had been acquired under proactive land acquisition, which was a huge portfolio that consumed most of the Department’s expenditure budget.
Mr Shabane said there was a relationship with the Special Master appointed by the Land Claims Court, and that work had started from 2 January 2020. The court had requested the Special Master to present a plan to it 90 days after his appointment. The Department had met with him and had assisted with setting up the Special Master’s office infrastructure. The Department had drawn up a plan to settle labour tenants’ claims, but the court had requested the Special Master to draw up the plan instead of the Department, and present it to the court. A meeting had been set up by the Department with the Special Master, and it was cooperating fully.
Mr Shabane announced that the Special Master is Professor Richard Lavigne, who was the former Director-General of the Department of Public Service and Administration.
The issue of expenditure exceeding performance was a problem for the Department. He explained that the nature of the work done by the Department came with court orders that needed to be settled. There would be an increase in expenditure in the third quarter because of court orders. Expenditure would always be higher than performance, because claims were unexpected amounts and had to be settled within a certain period.
Regarding surveys, the Department was required by the Government Immovable Asset Management Act 19 of 2007 (GIAMA) to have a complete asset register. Money had been invested in the surveying of assets of the Department, but some assets registered under the DRDLR had other custodian departments. The Department of Public Works received funding to conduct surveys, so the DRDLR no longer performed them.
He mentioned that there was a problem with municipalities switching off electricity at the Department’s provincial offices, but it was currently dealing with the issue, and there was progress.
Transversal projects were not an existing problem for the Department. The issue of land reform was not provincial, but rather focused on its extended branches. It could manage the extensions. Provincial departmental chief directors had agreed to improve their expenditure -- if not, the Department had established disciplinary measures. The chief directors had acknowledged that their respective departments were behind schedule.
Mr Shabane said the Department acknowledges that there had been a lack of support to farmers. The challenge facing farmers was that they had no access to credit or loan finance, but depended on grants from the Department. The Department was trying to create a new credit finance model that allowed farmers to source other means of financing. A beneficiary selection policy had been drafted because of the limited selection of beneficiaries by the Department. Some farmers had disappointed during production, while some had been working hard, so a rigorous process of selecting beneficiaries for the land reform programme had been set up. Public comments for the policy would close the following week, and it would be forwarded to the Cabinet for approval.
Ms Sadiki explained the issue of unbalanced figures between expenditure and performance, saying that the budget was made up of an administration budget and a service delivery budget. However, reporting on the two budgets was done against 100%, so a comparison was impossible.
Regarding the municipal debts, the Department could not do much because a letter had been sent to National Treasury on many occasions for the rates and taxes budget to be increased, as the Department had a larger portfolio. There had been no progress with feedback from National Treasury. At year end, the Department used left over funds to cover for virements.
Ms Sadiki identified the debt collection company that was used as Hans Collections, and said that 10% of all collections went to the company, so if there was no collection made then there was no payment. Regarding over-performance, the Department shifted funds from over-performing provinces to under-performing ones.
Regarding the 30-day invoice payments, the Department was one of the better performing departments in settling invoices. An invoice tracking system had been implemented to ensure compliance.
Commission on Restitution of Land Rights
Ms Gobodo said that the Commission was supposed to be separate from the Department, as established by the Auditor-General of South Africa (AGSA). There had been engagement processes over ensuring compliance, and interactions with the DPSA, AGSA and National Treasury for the unfolding of the process. There was still assistance required from the Department, especially concerning human resources (HR) and back office support. She explained that formal SLA engagements were currently under way, and that the Commission could not completely be autonomous due to the lack of resources. She added that there would also be a presentation to the Minister on the improvement process.
Regarding the statement made by the President on the 44 000 hectares of land, she explained that the land was related to prioritised state land, as opposed to other claims from private land owners. There had been transfers to beneficiaries.
The Director-General said that the one functional FPSU was the Makholokoeng FPSU in Harrismith, Free State.
He added that the details of the rejected offers would be provided to the Portfolio Committee, as well as the work under-taken by the Department after realising that there had been no proper implementation done when setting up the Office of the Valuer-General, through instructions by the Minister. The Department had failed to properly capacitate the Office of the Valuer-General to deal with the volume of work, but the Department was planning on reviewing the legislation for the certifications issued by the Valuer-General which could be defended in court. He highlighted that some land owners had a tendency of challenging the valuations of the OVG. The courts had also started setting aside the valuations of the Valuer-General, and taking the land owners’ side. As a result, the Department was trying to strengthen the legislation.
Ms Sadiki said that audit findings on provincial invoices were not being settled within 30-days. This was an ongoing audit finding, and the Department was trying to ensure compliance. Regarding irregular expenditure, a report needed to be compiled through the Office of the Director-General and submitted for condonement by National Treasury. At year end, the report would be sent to National Treasury.
Office of the Valuer General
Mr Thapelo Motsoeneng, Acting Chief Operations Officer: OVG, said that the terms of reference of the Property Valuation Act (PVA) had been reviewed and approved by the Minister regarding the Ministerial Advisory Panel (MAP). The issues that were discussed included the reviewing instances where the PVA had been pronounced or referred to court matters. Once an analysis had been done, amendments could be made by the OVG. Another issue was the methods used by the OVG, as well its role and functioning, and whether the institution was regulatory or implementary.
He said the MAP was comprised of lawyers, accountants and various professionals from both the private and public sector. Regarding the filling of posts, the OVG had finalised the organogram during the fifth administration, but it had been approved only in the sixth administration. The Minister had allowed for the 21 posts to be filled as critical posts, which would be additional to the existing 18 posts. He highlighted that out of the 21 posts, 12 were technical support posts.
The organogram would be provided to the Portfolio Committee, together with the plan for filling the positions.
He said that the MAP did not play any part in the APP targets of the OVG, but were involved in advising on policy, not operational activities. There was a sound relationship between the Commission and the OVG.
Regarding the training of the 12 personnel, he explained that the OVG had designed a course to address the skills gap in the traditional valuation field. The programme was carefully monitored, and courses had begun in 2016, and resulted in 100 valuers attending the courses.
Annual targets were not recorded quarterly, which would explain the 0% performance in some areas. The backlog issue involving outsourcing was unresolved after engagements with the Minister and Director-General, indicating they were not to do so. He made the Committee aware that the process was slow paced, but there was credibility.
Regarding the concerns over the constant returning of funds by the OVG, Mr Motsoeneng said that the budget was based on the business operating model designed by the OVG, which was meant to fund the proposed 109 positions. Funds would have to be reconsidered because there were not as many positions in the OVG, and the review outcomes of the MAP.
The two unresolved audit findings would be resolved. They had involved the turnaround time on the capturing of leave, were the OVG was still receiving support to improve timing, and the lack of standard operating procedures (SOPs), where a SOP was still being drafted. He also expressed disappointment at the declining trend in the presentation, stating that it was due to the structural capacity problem within the OVG, but assured the Committee that there would be improvements.
Ms Mahlatsi said she accepted the Director General’s response on the issue of finances, but did not accept the CFO’s response, especially with regard to the differences between expenditure and performance.
Ms Mahlo agreed with Ms Mahlatsi.
Ms Tshwete pointed out that there had been no response on the issue of over-spending on transfers to municipalities. She accepted the DG’s response on the expenditure issues.
Mr Capa referred to the issue of Gauteng spending more money on REID programmes.
Ms Thlaphe asked about institutional arrangements and the progress of integration.
The Chairperson welcomed the National Spatial Development Framework (NSDF) and the implementation of its strategy. He asked the Director-General to indicate to the Portfolio Committee when the framework would be submitted so that it could prioritise the framework in the following term’s programme, and the framework could be discussed. He also asked the DG to indicate the status of the Spatial Planning and Land Use Management Act 16 of 2013 (SPLUMA).
Ms Mahlatsi asked about the process of appointments, as Mr Motsoeneng had indicated that the MAP review would have an impact on which posts would be advertised. She was concerned over how long the process would take. She also pointed out that the OVG financial report revealed that R64 million had been spent, and asked what the money had been spent on if the OVG had no staff.
Ms Tshwete said that Mr Motsoeneng had mentioned that the OVG had no quarterly targets, but annual targets for the filling of vacancies, so what did the 80% represent numerically in the presentation?
Ms Mahlo said there had been no response to her questions on the IT solutions and the issue of claims that were present for 20 years. She asked if the claims had been settled or finalised. She also asked if the SLA had eventually been signed.
Ms Sadiki responded that the transfers to municipalities were in the rates and taxes line.
The Director General said that the NSDF was out for public comment after approval by the Cabinet. Public comments had to be considered, and then the framework would be resubmitted to the Cabinet. The Department was willing to return to the Committee and provide feedback.
SPLUMA was effective because municipalities were being supported, and a five-year commitment had been planned to support municipalities. However, there was a challenge with traditional leaders raising concerns of not being properly consulted when SPLUMA became law. The Minister had announced that she would take up the issue with the House and Traditional Affairs Minister.
The DG highlighted the importance of resolving the issue, because the lack of spatial planning and land use schemes resulted in agricultural land being lost to development.
He also mentioned that the provincial offices of the Department of Rural Development would remain offices for the Department of Agriculture, Land Reform and Rural Development.
Mr Motsoeneng said that the outcome of the MAP’s work did have an impact on the positions, which was why the OVG had been allowed to fill only 21 positions, and not the desired 109 positions. Regarding the expenditure, he said the OVG had spent only R10.4 million on the compensation of employees. The 80% represented the 21 posts, and that 80% made provision for any employees who left the OVG.
Ms Gobodo said that she would address the IT support issue, as well as Project Kuyasa, and asked if the Commission could present the backlog reduction strategy which addressed this matter, as well as the outstanding claims from 1998.
The Chairperson said that there would be an appeal for a third quarter report from the Department. A written request would be sent to the Director General to present on 3 March.
The meeting was adjourned.
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