CRLR & OVG 2019/20 Annual Reports, with Minister and Deputy Minister

Agriculture, Land Reform and Rural Development

02 February 2021
Chairperson: Nkosi ZM Mandela (ANC)
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Meeting Summary

Vieo: Portfolio Committee on Agriculture, Land Reform and Rural Development, Pt.2. 02 Feb 2021

Annual Reports 2019/20

The Committee convened on a virtual platform along with the Department of Agriculture, Land and Rural Development (DALRRD) to discuss the Annual Performance Reports of the Commission on Restitution of Land Rights (CRLR) and the Office of the Valuer-General (OVG). From the outset, it was clear that these matters were being dealt with in a period of strain not only because of the clear impact of COVID-19, but because of the national need for sustainable agriculture and land ownership. The Chairperson articulated with emphasis that they were dealing with land restitution because of unjust land dispossession.

Much of the meeting was about efficiency (particularly with the Commission) and capacity of the two institutions to meet their mandate from the Department of Agriculture, Land Reform and Rural Development, in line with Section 25 of the Constitution in particular: ‘land expropriation without compensation’.

The Commission indicated that it was audited as a commission and not a branch institution as it was in a process of re-structuring. The Commission had a clean audit outcome and would be funded by the departmental restitution branch.

Members asked about the transfer of state land to beneficiaries. When will the Commission would be ready to give the presentation? The Committee’s involvement was crucial in this. They also asked for regular reports on title-deed finalisation, because beneficiaries were often not given title-deeds to their land. As such, handovers were sometimes failing.
With the Commission becoming autonomous from the Department, many questions were raised by Members about capacity of human resources (vacancies), finances and the structure of the organisation. The staff component showed an eight percent vacancy rate, though taking into account the structure and organogram that was supposed to be over 1 000; this was worrisome . Other Members mentioned that the presentation was almost an exact replica of what was presented the previous year. Other key issues raised were about untraceable claimants being dealt with using a policy and lack of capacity to deal with financials in the previous financial year.

The Office of the Valuer-General said that it received a clean audit for the 2019/2020 year, with four audit findings. They achieved seven out of 12 targets. Backlog valuations remained a problem (470 less than target were achieved).
Though the Valuer-General Office obtained a clean audit, Members commented on the slow pace of work from the Office and how this negatively impacted the relationship with clients and outputs from the Commission. The Property Valuation Act (PVA) needed to be reviewed.

Members noted the entity had only 12 targets to achieve for the year but managed only seven. How would it truly be able to achieve the 50-day turnaround process while it was not able to achieve 12 valuation targets in a year?

Members noted that the entity’s operating activities had seen a saving of R106.8 million (Slide 32). They asserted that what the Office had asserted as surplus was in fact non-performance. As government, they were demanded to deliver services to the people.  Money must be spent accordingly, not saved.

Other concerns raised were regarding recruitment – particularly of a Valuer-General and Chief Operating Officer (COO). Lack of capacity was a recurring matter raised with the Office. The Office had high levels of private valuers. If they relied on outsourcing to non-and reform clients because they could not sustain their own services, would truly able to serve land reform? Parliament was about to finalise the expropriation of land without compensation – the lack of capacity was a threat to the report process and their work as an entity.

Overall, Members understood the challenges faced by the Commission and the Office of the Valuer-General, though this did not mean they accepted the non-performance and failure to deliver on their mandate. It was important for the Committee to ensure the issues of efficiency and capacity were addressed with urgency. Members pointed out that it had become a ‘trend’ to use the COVID-19 pandemic as a justification when targets were not reached. Though they were aware of the pandemic, this did not mean the administratively things should not be done properly.

Meeting report

The Committee Secretary noted an apology from Ms S Mbatha (ANC), who had another commitment and was excused.

Introductory remarks by the Chairperson
The Chairperson opened the virtual meeting, welcoming the Committee Members, the Minister Thoko Didiza and Deputy Minister S’du Dlamini, delegations, Committee support staff and guests. It was a privilege to be able to meet, given how many South Africans had passed on since their last meeting. He offered sincerest condolences to those who had lost their loved ones. The Committee took a moment of silence to remember those who had fallen.

The COVID-19 pandemic tested the resolve and resilience of the nation. Parliamentarians realised the wonderful privilege afforded to them to walk through Parliament halls – since having to exercise social distancing and engage virtually. If and when they returned, their perceptions would be changed with greater appreciation and gratitude as they prepared for their tasks for the sixth Parliament. Members should be reminded of the words of the late Former President Nelson Mandela: “When a man has done what he considers to be his duty for his people and country, he can rest in peace.” This was a reminder of their unity in commitment to serve the nation across political spectrum. They were also aware that their portfolio of cut across challenging and sometimes contentious issues confronting South Africa. The colonial project, which began in Cape Town as a quest for water and agriculture, conquest and spices, left a legacy. There was a critical need to feed the nation in the face of inequality, poverty, under-development and hunger. Three and a half centuries of colonialism, dislocation and social dysfunction was evidenced by the townships of South Africa. This was the great South African story – to be victims of history or agents of change in crafting a new narrative. In pandemic conditions, Members were urged to create a new narrative so that they could confidently attest that they had done all they could for their country.

The Chairperson handed over to the Minister for her opening remarks.

Minister’s Remarks
Minister Didiza gave her opening remarks. She said that in the midst of the pandemic, there had been some ‘green shoots’ in the sector’s performance. Maize crops, for example, had done unexpectedly well. The sector showed growth in the last three quarters. By comparison, other sectors had declined in this time. Officials were thanked too for their work in strengthening the sector for international markets: In East Asia, agreements made allowed produce to go there; the citrus industry had accessed the American market; the European market was looking favourable with the fruit industry.

There was still much work to be done. Tropical Cyclone Eloise had done damage to certain parts of the country. In this meeting, the entities would be providing details in their annual reports, along with challenges faced. For the first time, the Commission of Restitution of Land Rights had been audited, following an observation made in 2019. Since the commission was an entity, it needed to account for its expenditure on its own. The Ingonyama Trust Board (ITB) was a particular issue of the Auditor-General. There was also inconclusive accounting for land and equipment of the trust. The Minister had raised these issues with the board; the board would present in this meeting.

Briefing on the 2019/20 annual report by the Commission on Restitution of Land Rights
Ms Nomfundo Gobodo, Chief Land Claims Commissioner, was joined by Ms Cindy Benyane, Deputy Land Claims Commissioner, Mr Lebjane Mphutha, Regional Land Claims Commissioner, and Mr Sunjay Singh, Corporate Support. The delegation presented the Commission on Restitution of Land Rights (CRLR’s) Annual Report 2019/2020.

The CRLR had been audited as a commission and not a branch institution. Regarding targets, performance percentages were significantly lower in the Western Cape and Free State and significantly higher in Gauteng and KwaZulu-Natal. Regarding finances, the CRLR had a clean audit outcome and would be funded by the departmental restitution branch.

Key points were about the impact and efficiency of the CRLR as well as the commission becoming autonomous from DALRRD. There were also vacancies in CRLR. The staff component showed an eight percent vacancy rate (81 vacancies out of 776 jobs), though taking into account the structure and organogram that was supposed to be over 1 000.

Another issue was one of untraceable claimants. This was being dealt with using a policy. Ultimately, the biggest weakness from the AG’s findings was that CRLR did not have the capacity to deal with financials in the previous financial year.

The Chairperson welcomed the presentation and opened the floor for questions.

Ms M Tlhape (ANC) spoke about adequate support, as emphasised by the Auditor-General. The commission would need to be supported, starting from the quarterly compilation of statements. Adverse findings were due financial misrepresentation. Since the commission received support from the Department and the branch of restitution was not audited, what would it take to help them receive adequate support? It could be human resource or financial assistance, for example. This was because as and when the branch was monitored, the Department would most likely come up with a programme.

Secondly, in as much as collective planned targets were achieved, there were many that were not achieved. What did this imply and how would it impact the budget. Why were Mpumalanga and North-West the only provinces that spent their full development funding for the year under review? What were the challenges in other provinces?

On untraceable claimants as part of finalisation challenges for claims: did the commission find this as a challenge? If so, were they able to report progress?

There was also a problem of autonomy. The AG believed the commission should stand alone, depending on the current situation of them letting Cabinet go ahead; was the commission ready to stand alone?

Ms A Steyn (DA) asked about the transfer of state land to beneficiaries. When will the commission would be ready to give the presentation? The Committee’s involvement was crucial in this. She also asked for regular reports on title-deed finalisation, because beneficiaries were often not given title-deeds to their land. As such, handovers were sometimes failing.

Targets were dropped in 2019/2020 – what was the main reason for this? Could it have been directly linked to the OVG, or was it specifically financial implications?

The development fund was also of concern. Over the past few years there had been many complaints from beneficiaries who, after they had received the land, never received development funding. This was one of the many reasons beneficiaries were failing.

Untraceable claimants were also a concern – where individuals say they have put in a claim, though there are no records for this. It was previously mentioned that this was a matter warranting further discussion.

Was it possible to receive the third report that the Land Claims court handed to Parliament?
The adverse findings by the CFO meant that the Committee needed to clarify the fact that the AG deemed the information as unreliable and not transparent. Ms Steyn felt this was unrelated to the fact that the CRLR was on its own. She was not convinced.

The Chairperson responded to an element of the question by Ms Steyn. He recounted that Minister Didiza had written to the Committee (through the secretary), requesting to brief the Committee on the progress of the release of land for agricultural purposes. The secretariat had written back to the Minister’s office and 09 February had been set as a date for this briefing.

Mr S Matiase (EFF) addressed the impact of the OVG – the ability of the commission to reach its set targets. It was concerning that over the period under review, the commission had not been able to meet its target and that this was blamed on the OVG. The Committee had not been provided with reasons why this was the case. Mr Matiase suggested the commissioner provide reasons and circumstances for this in her response.

Though the commission met certain targets and performed 100% of their targets and allocation, further information needed to be provided. The number of claims settled, for example, as well as beneficiaries, households and women with disabilities and benefitted – these were important indicators.

Finally, it was concerning that through the process of land restitution, people who made claims were financially or agriculturally compensated – the burden of compensation was placed on government. There were those who came to pillage and dispossess people of their land while profiting from this. Mining and special commercial farming sectors, for example, had no obligation to help government. The situation with land restitution was precisely because of land dispossession. As transformation progressed, there needed to be legislation that concurred; both the mining conglomerate and big commercial farmers to pay some form of reparations to address past injustices. Mr Matiase appealed to the Committee to move to a direction where legislation compared individuals and reparations. As the issue of land expropriation without compensation came into effect, the work of the commission would need to come to an end. This being the case, he did not agree with the complete autonomy/stand-alone arrangement because at some point, the work of the commission would have to wrap up as the land belonged to the people and the state would have the power to distribute the land without the burden of land restitution.

Ms N Mahlo (ANC) took issue with the capacity of the commission. What would be the most evident benefit of the commission becoming autonomous from DALRRD?  How would this improve the performance of the commission?

Regarding the 49 beneficiaries being assisted (slide 15) – was it possible to received further numbers of beneficiaries and land issued by the commission, so they could perform their oversight? The revised budget showed that a certain amount was taken from the commission budget. Why was this so? Why was the money not used in time? She asked why the general expenses were incorrectly reported. Were there not experts in the Department who could deal with this?

Mr N Capa (ANC) said that the performance of Gauteng Province (according to slide 14) went to 225%. He was interested to understand what made certain provinces over-perform, while others drastically underperformed. He did not want to be tempted to think with urban bias. About CRLR autonomy, was there a timeline for this? Was there sufficient capacity being developed to meet this requirement?

Ms T Mbabama (DA) raised the Minister’s comment that she had met with the Ingonyama Trust Board (ITB) and that a decision had been taken to second staff from DALRRD to the ITB. Since there were chronic vacancies in DALRRD, she was not sure where the aforementioned ‘staff’ would come from, though she welcomed the decision. She appreciated the clarification of differentiating the commission itself with the branch called restitution. In terms of the road to autonomy, understanding the purpose of the commission itself was helpful. She worried about the AG’s report, which seemed to put ‘the cart before the horse’. The AG seemed to be auditing the commission as if it was already autonomous. Why is that?

How many hectares would the presented ‘financial compensation’ refer to? Would these translated hectares be reported with the total number of Hectares transferred to people?

There were a number of vacancies in the commission itself. Ms Mbabama asked how it was possible to have 100% usage of their budget for staff, yet there were still vacancies.

Ms T Breedt (FF+) asked about the OVG. There had been previous issues with the OVG staff component, and the relationship with the commission. How would the relationship be going forward, given that some targets had been met and others not? At the end of 2020, the Committee had plans to improve the turnaround time. The staff component showed an eight percent vacancy rate (695 filled post out of 776), though this was worrisome taking into account the structure and organogram that was supposed to be over 1 000. As they moved towards autonomy for the commission, it was significant that CRLR had relied heavily on DALRRD for staff. What kind of posts were the vacancies? Were they managerial or level field workers, and where were they distributed? This was to get a sense of how the halved structure would impact autonomy in future. Would they be able to manage autonomy with less staff, especially since they had seen in the past how the OVG battled with similar issued of staff?

Ms Breedt asked who had compiled the financial statements of the commission, whether this was done in-house or using consultants. In future communications with the commission, she looked forward to seeing their audit plan and how they are looking at addressing their findings. The misstatements and issues flagged by the AG, with the adverse audit-findings, meant that the road to autonomy was not looking good. The new budget for 2020/2021 was almost the same as the previous year audited. How would the R300 million no-longer received impact the functioning, operations and goal towards old audit claims?

Inkosi R Cebekhulu (IFP) said it had taken the CRLR too long to release state land under claim to beneficiaries. What made a recommendation take so long? Were there any financial implications in releasing the state land to claimants? If not, what accounted for the delay? From State of the Nation Address 2020, it was understood that more land needed to be released and private property negotiations to compensate those owners.

Mr M Montwedi (EFF) referenced page four of the presentation (mission of the commission). CRLR’s stated mission was, amongst other things, equitable redress of victims of racially motivated land dispossession. Did DALRRD not consider itself to be undermining the work of CRLR, which went out and dealt with redress (giving land back to people)? The programmes of the post-settlement support of DALRRD undermined the work of the commission in the sense that most, if not all, land given back to people was actually leased back to those using the land before. Steynsdrift Farm, for example, had an ‘open area’ and ‘living area’ where land was given to black farmers, though white farmers continued to use the land by force even without consent. Was this not undermining the work of the CRLR?

Regarding old and new order claims (presentation slide eight). There were two options: these were interdicted until either finalisation or a new amended legislation. This was worrisome. Did DALRRD not think a new legislation needed to usher in a way that they could deal already with new-order claims (which went back as far as 2014)? Did something not need to be done?

Mr Montwedi continued that the presentation made was a clear ‘cut and paste’ of one presentation done in Parliament a year prior. The same information had been presented then, and he was worried about this. He was happy that the Minister had written to present to the Committee, though he requested that the Minister come prepared to respond to which land audit they had used. There were two land audits used – one audit where most farms were occupied by black people (those were the ones advertised) and the other where most farms occupied by white farmers were not advertised.
On the comparison of the claims settled since 2014, with the OVG indirectly effecting delays on the work of CRLR: what should be done to advise the OVG indirectly to no longer negatively impact on the work of CRLR?

Mr N Masipa (DA) had a problem with the expenditure. Slide 18 indicated that prior to 1999, they had managed to settle R1.3 billion, and in the past financial year (2019/2020) they had settled R1.6 billion. The indication was a rand-value amount, but what were the numbers in terms of the settlements, both Hectares and land settled in the period? He requested a breakdown. With the matter raised by the AG, that DALRRD was not complying with legislature, Mr Masipa asked for clarity on which legislation was not being adhered to and if this was covered in their presentation. If not, he requested DALRRD assist in this regard. 

Ms B Tshwete (ANC) said the CRLR had presented, though they were presenting their target claims, their settlements and annual performance plans (APPs). Page 12 of the presentation, for example, had a provincial breakdown. The Eastern Cape, for example, had a target of 61, with 61 as actual performance. What were the actual outstanding claims and their budget? She requested details on all these claims as a province.
Ms Tshwete was also concerned that the same information was presented the previous year, and there were still vacant posts. What was the reason for this? She concurred with Ms Breedt, requesting details around the vacancies and what kind of post it was.

She also said that it had become a ‘trend’ to use the COVID-19 pandemic as a justification when targets were not reached. Though they were aware of the pandemic, this did not mean the administratively things should not be done properly.

Finally, if it was available and possible, Ms Tshwete requested the Land Audit Report to be forwarded to the Committee Members. This was so that they could be clear when they were speaking about ‘the land’ exactly which land they were talking about.

The Chairperson added questions of his own. What claims did CRLR have in place to ensure repeated findings and recommendations made in the previous Budgetary Review and Recommendations Report (BRRR) were avoided?

The legal opinion on the institutional arrangement had been received for organisational arrangements for sister organisations such as the RAF. What did this mean in the intended transition towards autonomy of the commission from DALRRD? How would the relations be forged moving forward, in particular to other entities such as the OVG? What was the total number of outstanding land claims faced? What would it cost the fiscus to roll-out all those land claims? How long would it take the commission to expand all of these outstanding land claims? Was this something that would be realised in the sixth Parliament? While they were still dealing with the amendment of Section 25 of the Constitution, would they be able to track issues centred on the outstanding land claims?

Ms Gobodo responded to the questions raised with her team. She began with the support needed to comply with AG’s findings. She explained that when CRLR was audited as a commission and not a branch institution, in effect, they did not have the tools or the capacity – though they were assisted largely with financials in the last hour by the Deeds Office. This was why they encountered the problems they had. At the end of the day, the commission, as it stood, did not have any capacity (including programme or software) to do the financials as required by the AG. This was work underway. The Minister had expressed her support of the work, so that CRLR did not continue to find itself in the same situation. As they stood, the branch did not have the capacity for independent financials in the previous financial year; this was the key challenge. CRLR was also looking at getting external support to be ready for audits. It was CRLR itself recommending it be audited. As it stood, CRLR was not autonomous, nor did they have the human resource or financial capacity to stand alone at the time. Legislation as interpreted by the AG was that CRLR was a de jure commission and should operate as such.

Development grants were a difficult matter. The Restitution Act allowed for CRLR to settle claims, though it did not talk necessarily to providing grants. The Minister, under Section 42C, who had the discretion to provide grants again, was a separation issue between DALRRD and CRLR that was blurred. When presented in the past, CRLR had communicated that there was a tension in the separation of roles between DALRRD and CRLR. CRLR was supposed to acquire the land in the context of the branch institution and not necessarily provide development grants. With dry interpretation, therefore, it was not the responsibility of CRLR to provide grants. In the past, grants had been provided, however. The provinces which received grants depended on the natures of the claim restored and the province’s assessment of what needed to happen. In instances where the claim was financial compensation, there would not be a need for a grant. This made answering the question directly difficult, because they would need to look at the specific claim. Many grants being paid by CRLR were grants related to projects approved in the past. They did not approve grants at the time, because that delegation remained with the Minister and DALRRD. This was another discussion requiring further interface.

The issue of untraceable claimants was being dealt with using a policy. Once they had tracing agents, they went out to trace the claimant and once found, they were incorporated in the process and counted in the normal cause of what CRLR did.
Transfer of state land was a presentation that would be provided to the Committee. Transfer of Title Deeds meant that once the claim was approved according to according to Section 42D, the beneficiary was given the title deed. CRLR’s annual report submitted meant that matters reported as finalised meant title deeds were given to the claimant. To address the issue of missing files, circumstantial evidence (including the report ad documents from the Department) was used to recreate a lost file.

The biggest weakness from the AG’s findings was that CRLR did not have the capacity to deal with financials in the previous financial year.

The information that needed to be broken down with the claims settled would be made available, with the name of the claim settled, the associated amount and number of beneficiaries – including female-headed households and hectares would be included in the annual report and provided by CRLR.

The autonomy issue was primary about complying with legislation. The AG had said that the commission was a commission in Law. Whether they were operating as such or not was not what the AG was auditing. Rather, they were looking at what the legislation said. The road to autonomy was therefore about ensuring compliance with legislation and operating and a commission. This then dealt with receiving, investigating and recommending for settlement. This would also allow CRLR to be efficient and be fit for purpose, such that DALRRD’s mandate of branch restitution was separate from that CRLR was supposed to be doing. This would assist CRLR to answer questions about how long it would take to finalise claims. In 2020, the Project Kuyasa was the tool being used to assist in answering question about outstanding claims. CRLR had written a letter to the Portfolio Committee where they submitted claims outstanding and requested, with two other issues, asking for this to be dealt with.
The revised budget was not an issue within CRLR’s control as they were a branch in DALRRD.
Gauteng’s 220% performance partly depended on where each province was when they were, in the context of the claims they were dealing with. Just because one province was not necessarily performing, they would not slow down other provinces performing better than expected. Gauteng was able to settle more claims because they received more claims back from the valuer-general (VG). In the Western Cape, by contrast, they needed to wait for certain valuations by the VG, which meant that they were not able to perform when it came to settlements and finalisation. In 2019/2020, they were still dealing with the issues of turnaround time with the VG. This accounted for the results. There had been an improvement in turn-around times and a service-level agreement (SLA) had been signed with them. Matters that ended up in court were being dealt with by the Minister.
The vacancies, because of a previous moratorium on posts, saw DALRRD joining. The structure had changed – so the vacant posts were not due to lack of trying. The structure, however, was not fit for purposed and the Department of Public Service and Administration (DPSA) had proposed an interim structure with DALRRD.

The progress report of Project Kuyasa would be submitted to the Committee in writing. Through the project, they were complying with issues raised, and they had sent a report to the land claims. All three reports had been sent through. Outstanding claims and budget were also being dealt with under Kuyasa, though for CRLR to be able to deal with this they needed the financial and human resources capacity to deal with the fast-tracking of restitution claims. Each year, the spent the budget for settling claims. This meant that if they were to settle more claims, they would need more budget allocation.

Mr Singh continued with responses. He indicated that there was a discrepancy picked up because of the financial system applied. DALRRD was applying the medical cash system which recorded payments as per the payment date. The AG’s office was based on this – recording the payment at service state. This accounted for the misalignment. With the OVG, there was a SLA in place. The relationship between the OVG and the commission had improved considerably since the previous meeting.

He clarified that the targets that appeared to be dropping were actually aligned between the OVG’s office and the commission. It was therefore an alignment, not dropping of targets as of April/May 2020.

There was a dichotomy in the qualified and adverse findings on recognising the commission as a three-way entity. There was a problem in this area, though there was a plan in place and the CFO of DALRRD was helping with this. This plan could also be shared.

The Minister said, on matter of the AG vis-à-vis the autonomy or non-autonomy, that it might be best to look at this Act. While the Act saw the commission as having to deal with the claims, referral to the court etc., it also required financials to be presented to the Director-General, as the Accounting Officer. It would therefore be important to sit down and look at what the drafters of the Act were envisaging. Indeed, DALRRD would not absolve itself of responsibility and would continue to share progress on filling vacancies and the ITB, which also accounted to DALRRD.

The Chairperson requested Ms Gobodo to re-send the documents, particularly on standing land claims, with the password required to open it.

Briefing by the Office of the Valuer-General (OVG)
Mr Thapelo Motsoeneng, Officer of Valuator-General, and Mr Tumelo Mokale, Director: Finance & Supply Chain, OVG, both gave the presentation on the annual report of the OVG. The OVG had received a clean audit for the 2019/2020 year, with four audit findings. They achieved seven out of 12 targets. Backlog valuations remained a problem (470 less than target were achieved). The OVG’s target with backlog valuations was not met; they had only met half of the targeted amount. The OVG also only reached half of its target with new valuations. Non-land reform valuations as a percentage of annual fixed cost, as well as human resource management were other areas of concern.

Mr Mokale confirmed on behalf of the OVG that they were implementing an ERP (Enterprise Resource Planning) system which would assist them with capacity as far as systems were concerned. Regarding finances, the OVG did not incur the following, in the 2019/2020 financial year: irregular expenditure, unauthorised expenditure, fruitless and wasteful expenditure, nor did they request for the budget realignment for 2019/2020.

Ms Tlhape noted the Deeds Registry support through a Memorandum of Understanding (MOU) which could have ended in June 2017, but was continuously extended. What was the current stance, given that the last report was that it would end in 1920? Would the OVG standalone without support, or would they continue to extend the MOU with the deeds registry?

Lack of capacity was a recurring matter with the OVG. She noted vacancies being filled, but wanted to know what it would take the office of the OVG to be adequately capacitated, along with the target of sustainability. With land claim interest, as it pertained to sustainability, she wanted to know if the entity relied on outsourcing to non-and reform clients because it could not sustain its own services. Was the OVG truly able to serve land reform?

On the vacant position of the valuer-general since February 2019 and the Chief Operating Officer (COO) vacant position since 2015/2016: how far was the recruitment process on these two main positions? Parliament was about to finalise the expropriation of land without compensation; how would this lack of capacity impact this process and their work as the office of the valuer-general?

Ms Steyn asked about the subjective impact of the OVG’s slow evaluations on the CRLR’s work. She had previously asked CRLR if it was the slow pace or a funding issue if one assessed the work and targets set out; the previous year (2020), in particular, had a lower target. She was interested to see the SLA between the OVG and CRLR, so the Committee could also understand agreements and targets.

Ms Steyn was pleased that more employees had been employed, and looked forward to more of this.
She asked what the OVG’s target was for how many land claims would be dealt with on a yearly basis and, percentage wise, other work they needed to do. Also, which percentage of the OVG’s work was being done by private individuals? What was the impact of this on their budget?

Had there been any revise of legislation regarding the current use value? This issue impacted court cases the most. When OVG processes were slow, this was often because of court cases. She thus asked about any plans in the pipeline for legislation to be changed. She also asked for a general response on the impact of court cases and if this had impacted the work of the OVG or not.

Mr Matiase understood the challenges faces by the OVG, though this did not mean they accepted the non-performance and failure to deliver on its mandate. This might have been a new terrain that needed to be understood – determining the value of property that needed to be evaluated and would later help in the land reform process. This included helping the state to arrive at appropriate and accurate prices of land that ought to be paid for, as was the policy of the state. The OVG indicated (slide 32) that with goods and services they had spent R26.1 million of the R66.4 million allocated to them. They have spent this ‘much’, as lack of internal capacity meant they needed to outsource evaluators to the cost of R26 million – this was unacceptable. The OVG needed to establish internal capacity; it was better to spend R26 million on its internal capacity than R26 million on private individuals (external capacity). It was also concerning that the OVG used private information from external individuals without themselves being able to determine a truthfulness of the data compiled by these private individuals. He speculated price-fixing, collusion and distortion in the process. If there was any better way of undermining the government efforts and efficiency (perform work and save money at its best), it would be to follow the route the OVG was taking.
Secondly, the OVG also mentioned that total operating activities had seen a saving of R106.8 million (Slide 32). Mr Matiase asserted that what the OVG had asserted as surplus was in fact non-performance. In government, they were not pleased by departments reporting ‘savings’ which they presented as surplus. As government, they were demanded to deliver services to the people.  Money must be spent accordingly, not saved.

The OVG reported that they did not incur irregular, unauthorised, fruitless or wasteful expenditure (slide 37). It was audacious to say that they had ‘saved’ R106.8 million. This represented irregular, fruitless and wasteful expenditure. It was also a waste of Parliament’s time allocating funds to them to do their work and claiming to have their hands clean. The OVG ought to ‘pull up their socks’ and ‘hit the ground running’ as the Committee would not tolerate this ‘nonsense’ in future.

The Chairperson asked Members to mind their language. He added that the word ‘nonsense’ was not parliamentary.

Ms Mahlo said that as much as the Committee appreciated the good work of the OVG in 2019/2020 by obtaining a clean audit, it was important for the Committee to ensure the issue of capacity was addressed with urgency (Page 14). The quality management systems of the OVG needed to be reviewed with regards to human resource and administrating policies they had, such that they could have the right staff in office. The lack of capacity reported caused the OVG to look for capacity externally, which created a bottlenecking of hiring and non-performance on targets. Ms Mahlo said that since she had arrived to Parliament, she was part of discussions around capacity and she wanted to know what was wrong. What was the cause of not being able to recruit appropriate individuals, such that the portfolio as law-makers could assist? The OVG should provide their policies so that it could become clear where they lack. It was a highly undesirable situation that money was being reversed to Parliament, while services were required.

Ms Mbabama welcomed the review of the Property Valuation Act (PVA) and the extensive consultation envisaged. She asked how the Portfolio Committee would be involved with the PVA itself. She asked what informed the 30 days for land owners to interrogate the valuations of the OVG. To her, this seemed rather extensive (four weeks). Considering the slow turnaround times of the OVG, the 30-day policy did not make sense, though she hoped it would be reviewed.
What were the findings of the Quality Review Committee on the few valuations that were done during this period? The existence of the Quality Review Committee was commendable, but it was important to know their findings and/or recommendations.

Ms Mbabama reiterated the importance of the recruitment of the Valuer-General and the COO. How far has recruitment come? What was the envisaged impact of expropriation of land without compensation on the OVG? What role did they see themselves playing if it panned out the way government wanted it to go?

Ms Breedt asked how the OVG would increase their outputs in terms of valuation. The OVG’s target with backlog valuations was not met – they had only met half of the targeted amount. The OVG also only reached half of their target with new valuations. This meant that there was an additional backlog: the existing backlog, with the target backlog. How would this be addressed? Though they had made new appointment, there was a final re-structure of staff with consultation of the Department. Were these new appointments (along with the four intended new appointments) on the new structure, and if so, what was the new structure and it’s staff component? How many of those total positions were still vacant? This breakdown was critical so as not to go into a new structure blindly.

Only 20% of their Compensation of Employees (CoE) was being spent. Ms Breedt understood that DALRRD had allowed them to make 22 positions available, with 15 filled and four incoming. She asked why they were still standing on 20% COE. Did this by implication mean that there were funds in the OVG to appoint people (e.g. more valuers)? She asked for specificity on this.

The OVG had spent R26 million on contractors to do their job. She asked whether they could provide a breakdown of this, possibly in a later document. Were there SLA’s with the private valuers? If so, what SLA’s did they have? If not, why not? Which firms were they using? What were the details and contract amounts of these? Taking into account the financial year, would they be re-instated and re-employed in the next financial year?

Mr Montwedi noticed that the OVG failed to reach their 12 targets, only managing to reach seven of those, leaving five unreached as an entity. What were the causes of this? Could the OVG attribute this to the lack of internal capacity?

The reliance of the OVG on the private sector was a matter for discussion. How has this impacted the Department financially? If they were to do a cost-benefit analysis of having to rely on private valuers and using private capacity of valuation, which one would they opt for?

The use of the supply chain management in appointing valuers was mentioned. How has this negatively impacted OVG and appointing valuers? What had been done to resolve this? This had previously been dealt with through the National Treasury.

In terms of its targets, the OVG had planned to issue valuation certificates in 50 days, though it was actually doing it in 167 days. This was a serious concern. Clearly, the OVG was negatively impacting the work of the CRLR. Since 2014 to date, the CRLR had not been able to do good since the introduction of the valuer-general.

Goal number three was that without the CRLR, the OVG was irrelevant because it was unable to tap into work with private business where people could use their services.

Ms Tshwete said that she was doing her best to contain herself. She reminded everyone (including DALRRD, CRLR and the OCG) that as Parliament was concluding with Section 25 (Land Expropriation without compensation), which directly spoke to these entities. With all the challenges discussion (lack of capacity, vacancies, etc.), she was unconvinced that they were aware of the alignment with interdepartmental programmes. She was really worried and angry to an extent. “It is almost as if these officials do not know that we want land”. She said she would reserve her comment for the day and that in the following meeting she would not be as reserved. She was seriously displeased with the information presented.

Mr Masipa pointed out that the OVG had said the private-sector valuers were too slow and that the entity decided not to use them. How would the OVG increase its outputs while waiting to fill the position? This was the challenge they were sitting with; they did not have capacity to do this work and they were getting rid of the private valuers. How would they ensure their desired outputs would be achieved?
Another concern was that the OVG had only 12 targets to achieve for the year. The entity had managed only seven. How would it truly be able to achieve the 50-day turnaround process while it was not able to achieve 12 valuation targets in a year? The valuer-general was too ambitious with its planned model. Mr Masipa suggested that they re-look at their plans going forward and present it to the Committee. Land reform hinged on their work. If the OVG did not do its work, it would sit without progress for the following 25 years without any movements on the matter of land reform.

Mr Motsoeneng responded to questions raised. With the MOU, there was a deeds transition project being run, which was assisting the OVG to manage the transition from deeds to OVG’s internal capacity.

With vacancies, the entity was implementing an ERP solution which would assist it with capacity as far as systems were concerned. This work was underway. He was confident that they would be going live from 01 April 2021. The answer was that they intended to not extend the MOU with deeds – to the extent that the Deeds Office would be doing what they were doing for the OVG at the time of the meeting. The 2020/2021 financial year would be closed with the Deeds Office until the annual report and financial statements were concluded. With effect from April of the 2021/2022 financial year, the OVG would be running its own affairs.

The OVG’s APP indicated a target of raising revenue out of non-land reform clients. In the Property Valuation Act (Section 12.1 B), the OVG was allowed to do valuation work for non-valuation clients. The entity did have one particular client, which was a government department, though what the entity had done to allow them to focus on the primary mandate of the OVG (land reform), was to not proceed with emphasis of this targeted. This is why the entity did not achieve the target of 0.5% revenue targeted for that year. In the new APP, OVG no longer had this target because of emphasis and focus on land-reform matters.

Slow work of the OVG would impact the work of the CRLR, because it was upstreaming their work. In past years, they had refined their relationship to the point where CRLR had been able to meet their targets, with the OVG contributing to this. The details of the SLA could be provided. They would need to work with the parametising officer who would assist.

The OVG’s own targets included that if it received an instruction from the CRLR or a client from a particular period of time, OVG would finish this work. However, it was critical that in the SLA itself, the entity would agree with the clients that the clients needed to give a full inventory of what they required from the OVG at the beginning of the quarter. This was so that they could agree on the numbers they would work with in the turnaround time. They were thus targeting the turnaround time more than the numbers, which came with the client when they sat down and agreed with the client. They did not insist it be an annual inventory, but a quarterly one to allow flexibility of the client.

Mr Motsoeneng was not sure about the specific number of work done by private valuers, but estimated it at 99% - 100%. Work done by OVG staff in terms of starting from scratch was very small. The majority of the work was done by private valuers.

The current use value was a matter part of the work given to the Ministerial Advisory Panel by the Minister. It was captured in the milestone where the Minister said they needed to deal with milestone and approach. The current use value was in the formula the OVG was using, and it was the main issue they were receiving from stakeholders.

The OVG had not had an avalanche of court cases. As part of the work by the Ministerial Advisory Panel, they were doing a scan of matters in court that had implications on the work done by the OVG. There had been a recent court ruling in KZN, dealing with the OVG. This served to confirm that the OVG produced valuations that the Minister considered in finalising compensation. There was one case the OVG was awaiting judgement on, where they had presented their approach and in the main this captured the approach the OVG was using. They were hoping to hear a lot more from the court in this regard, especially as it related to methodology. There was not really an impact of court cases if one looked at the fact that there were two cases where the methods of the OVG had been raised.

Mr Motsoeneng went on to accept, on behalf of the OVG, that the word ‘surplus’ would be misleading because the available funds represented underspending more than a surplus.

Concerning irregular and wasteful expenditure, he said that the template for the presentations of the Committee required them to make commentary on those matters.

Insofar as independent work of the OVG was concerned, he explained that the OVG had a panel of valuers which were accredited after passing a set of criteria. Amongst these criteria was the requirement of complete training course on valuations for expropriations and land reform done by the University of Cape Town. Once they were onto this panel, supply chain management processes were followed to give them assignments. They received assignments and conducted valuations in line with the training course received, their usual valuation standard and in line with the OVG’s technical manual on valuations. Their work then gets received in the OVG and a quality assurance process ensues. The valuers would have access to market information, access to databases – including the property sector and deeds. This gave them a sense of work that had happened and the exchange of sales. This was where engagement happened between the OVG and private valuer. By the time the OVG issues a value certificate, they had applied their mind and were confident that what they were issuing a valuation certificate in line with the Property Valuation Act.

He concurred with comments about addressing hierarchies, capacity and recruitment in line with vacancies.

The 30-day matter was informed by legal advice received during the development of the regulations. Indeed, it was a matter that would be considered in the review which was underway by the Ministerial Advisory Panel. They had one annual report and three or four quarterly reports that they could share with the Committee.

By the time it got to Christmas, the entity was doing quite well towards the turnaround of 50 days. But this was as a result of the fact that they had not received a lot of request from clients of valuations falling under that specific category. They were thus focusing on the backlog they had. They focused their teams grown and on the 50 working-day target.

The envisaged structure had 109 positions in it. The review of the PVA process meant that 21 critical positions needing to be filled. The 21 positions came out of the 109, adding onto the positions they had at the time.

Private valuers were sent terms of reference as part of the procurement process. In the terms of reference were the main desirables from each of the turnaround timelines. They would be using private valuers in the new financial year because of the capacity they needed, which existed in the private sector. The OVG’s intention was to improve the relationship with them to improve the turnaround times that members had complained about.
The seven targets reached out of 12 were because of capacity problems – both of home bodies and systems. Both aspects were addressed in the presentation.
The supply chain management (SCM) process had not been a problem on its own. The reality was that the team at the Deeds Office had to do the OVG’s work on an ad-hoc basis, acquiring those services. As a system, the SCM process had not been problematic.

If the OVG continued to be slow in finalising work, it would have a slow impact on the commission, though they had begun work together. This saw the commission achieve its targets in the year under review.

The CRLR and the DALRRD’s Land Distribution Programme would take over the function of commissioning valuers. The panel previously described was thus as the disposal of the commission and DALRRD. They received and submitted reports to the OVG, which alleviated pressure of the technical work and quality work at the OVG itself.

Minister’s closing remarks
Minister Didiza thanked Members for their questions and comments. She said that some matters were about policy, while others were out of the legislation. She indicated that one of the issues which needed to be revisited was the Property Valuations Act, particularly chapter three (on the valuation of property). This part said that the valuer-general may authorise one or more persons to conduct or assist in the performance of valuations. Such persons may be a member of staff of the OVG or a private practitioner. This meant that even from a legislative perspective, the matter of private valuers was acknowledged, given that the enormity of the work given to the OVG might not be possible to carry out by the OVG on its own. The Minister felt this needed to be reflected on.
The Property Professions Act that was with DPW (Department of Public Works) determined how valuations worked and how the profession should be undertaken, developed and regulate fees. The PVA of 2014 set up the OVG to specifically deal with land reform. This was where some of the tensions lay, which ended up in court at time. This was about the values of the OVG. There were matters which were not of the audit but impacted on the work that needed to be done.

The Chairperson thanked everyone for attending the meeting.

The meeting was adjourned.


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