COVID-19 Disaster Agricultural Support Fund: DALRRD response to Audit Reports

Agriculture, Land Reform and Rural Development

22 March 2022
Chairperson: Nkosi Z Mandela (ANC)
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Meeting Summary

COVID-19 Report 1

COVID-19 Report 2

COVID-19 Report 3

The Committee was briefed by the Department of Agriculture, Land Reform and Rural Development (DALRRD) on the findings and recommendations by Auditor-General South Africa (AGSA) in the 1st and 2nd Special Audit Reports of September and December 2020 and how DALRRD responded to these. Only R87 000 had been recovered from the R4.2 million awarded incorrectly to 117 state employees who applied.

Questions by Committee Members included the farmers’ registry; how many applicants received vouchers; what were the consequences for state employees if the relief funding was not paid back. Members wanted clarity on some of the missing reports and documents, as well as missing information they requested. They asked what would happen if the letters of demand do not yield any money from the 117 state employees; if beneficiaries of the Relief Fund were all small scale and subsistence farmers and not commercial farmers.

Meeting report

Chairperson’s opening remarks
The Chairperson welcomed the Ministry in their absence and replied that their plea to have them present in their meetings has fallen on deaf ears. He replied that they will address their absence. He extended a warm welcome to the Director-General and his DALRRD team, members of the media, comrades and friends present in the meeting.

He took the opportunity to highlight what an important day South Africans celebrated on 21 March – Human Rights Day. On this day, 21 March 1960, police opened fire and killed unarmed protesters and seriously injured other civilians in Sharpeville. That incident sparked protests all over the country and news of the Sharpeville Massacre reached the whole country, including Langa and Cape Town. People started to protest there and during the protests, the police opened fire again and in the midst of it all, a baby was killed by the police as they fired on the protesters. Ingrid Jonker was outraged by this incident and she went to the Phillipi police station to see the body of the baby and she wrote a poem about the incident and an extract of the poem was quoted in Nelson Mandela’s inauguration speech on 24 May 1994.

Before the Committee today were AGSA audit reports on COVID-19 relief efforts by DALRRD for small and subsistence farmers. He brought up the Sharpeville Massacre to remind people that many have lost loved ones during the COVID-19 pandemic and that we must be reminded that government interventions are designed to prevent the suffering of children and vulnerable people.

The Committee has taken note of the 15 findings that have been raised by AGSA and the responses by DALRRD. Not one single child must die indiscriminately in South Africa and we must always provide oversight and accountability so the most vulnerable farmers can receive the required and needed assistance to be able to survive and subsist. The government’s capacity and capabilities must be focused on serving the interests of the people of South Africa and in doing so government will be fulfilling its duty under the Constitution and the Bill of Rights.

Department response to 1st & 2nd Special Audit Reports on Covid-19 relief fund
Mr Mooketsa Ramasodi, Director-General, DALRRD, took the Committee through the 1st and 2nd Special Audit Reports on the Covid-19 relief fund for small-scale farmers. DALRRD will present what has been done by DALRRD since the 1 March 2022 Committee meeting when the Committee highlighted certain areas that DALRRD had to improve on in response to the audit reports. It has to be noted that these audit reports were compiled while DALRRD was still implementing the COVID-19 Disaster Agricultural Support Fund (CDASF), which commenced during a hard lockdown.

Mr Rirhandzu Shilote, Chief Director, DALRRD, presented DALRRD's response to 15 findings and recommendations made by AGSA. These included:

• AGSA identified 117 applicants as state employees who should not have received relief funding. Letters of demand have been issued to these applicants and debtor accounts have been created. A list of these officials was provided to the Committee.

• AGSA identified 148 applicants as having received COVID-19 support whilst six were also benefitting from the Comprehensive Agricultural Support Programme (CASP) and 132 received support from Programme 3. DALRRD is still investigating these applicants to clarify if some of the applicants were not supposed to benefit.

• AGSA recommended that Department should implement measures to recover the value of the support provided by applicants who have already redeemed their vouchers and to withdraw vouchers that have been issued, taking into account the legal implications.

• AGSA recommended that DALRRD should communicate timely clear guidelines to all provinces to ensure calculations are consistently applied for assistance to small-scale and communal farmers when similar support programmes are implemented in future.

• AGSA recommended that Department management should perform oversight to ensure that the necessary farm visits are conducted to verify the information indicated on the application form, such as the type of farming activities and size of the land.

The presentation listed all the AGSA recommendations and thereafter DALRRD responses to the concerns raised. The presentation gives a comprehensive look into the gaps identified and the efforts made by DALRRD to address these gaps.

DALRRD constituted a team with provincial Departments of Agriculture and deployed officials to conduct physical verifications as per AGSA recommendation. Due to the urgency of the COVID-19 pandemic, DALRRD had to respond quickly to assist people in need and the programme was launched in less than two weeks during Lockdown Level 5 with only a limited number of staff.

On ensuring consistency of calculations across provinces, COMBUD is a commodity budget or computerised enterprise budget. It is used to define cost elements of production per hectare. It does not provide a standard set of production costs but guides depending on the production zone. It highlights: cost associated with preparation of the soil, cost of labour, inputs, maintenance. It highlights expected net and gross income per hectare per defined commodity. As a guiding tool per production zone, it thus cannot provide similar figures hence the differences in determining the cap of assistance for a similar commodity in provinces.

DALRRD followed a two-pronged approach in addressing AGSA findings. Firstly, DALRRD performed a retrospective analysis of the discrepancies raised and effected corrective measures. This retrospective analysis has yielded positive results as evidenced by AGSA's annual audit outcomes. Secondly, DALRRD adopted automated processes to implement similar initiatives going forward. These automated processes resulted in a significant improvement in the adequacy of controls and, by implication, the integrity of information and data. It is still attending to some of the issues raised by AGSA as well as the Portfolio Committee.

Ms A Steyn (DA) raised again that the Minister and Deputy Ministers were not present, after they were asked by the Committee to attend the meeting. She had also alerted the Chairperson and the secretariat on 19 March that the Committee had still not received the documents for today's meeting. It was difficult to prepare when documents are sent one or two days before the meeting. She questioned why the documents were sent to the Committee late. She asked why DALRRD does not have a final report on monitoring and evaluation as the 1st & 2nd Special Audit Reports were already produced in 2020. She does not know how DALRRD works on monitoring and evaluation as the full report is still missing. Many documents are still unfinished or missing and a lot of matters are still under investigation. She acknowledged that there have been delays because of COVID-19, but the concern is that DALRRD still does not have a monitoring and evaluation system in place. Therefore, corruption is possible because everyone is aware that such systems are not in place.

She asked how much money was paid back by state employees who received relief funds and what DALRRD will do about state employees who have not paid back the money.

One of the criteria for relief funding was that people who were not already registered on the farmers registry must register and she asked if DALRRD does have a farmers registry. DALRRD was given money to put such a registry in place. If not, why does DALRRD not have one to keep track of the registered farmers and their information. No person can receive money without it having been recorded on some sort of registry or system.

Mr N Matiase (EFF) did not respond to the Chairperson when his name was called out.

Ms T Mbabama (DA) acknowledged what DALRRD presented to the Committee and all the work done by its officials. She commended DALRRD for their work, although the findings were due to various errors, carelessness and negligence by DALRRD officials themselves. She commended their efforts in rectifying the errors identified by the Auditor-General.

She asked what would happen if the letters of demand do not yield the return of this money. R87 000 recovered out of R4.2 million is a drop in the ocean. What is DALRRD going to do if the letters of demand do not yield the required results?

She asked about the possibility of effecting garnishee orders against civil servants who have benefitted from the fund, assuming that DALRRD is able to take action against civil servants.

She asked if there were farmers who were disadvantaged by the insufficient processes used to assist farmers across the nine provinces. If so, what has DALRRD done to rectify this?

Lastly, she asked if there were consequences such as disciplinary action for officials who have been careless or negligent as pointed out in the audit findings.

Mr N Capa (ANC) appreciated the presentation report by DALRRD. It was clear to him that DALRRD does not need additional resources or skills to perform its work and fulfil its responsibilities. What is clearly evident and needed in DALRRD is a more efficient use of resources available to DALRRD and he hopes the Director-General will take care of this matter.

He noted the letters of demand to the state employees and wanted to know if there was an acknowledgement of the debt and an indication if these people are willing to pay back their debt.

He noted there were only six provinces where there were funding recipients employed by an organ of state. He asked if the other three provinces were not represented due to the efficiency of DALRRD officials or because state employees did not receive money in those three provinces.

Mr M Montwedi (EFF) welcomed the report. He wanted to check if there are internal systems within DALRRD to determine if applicants are: (1) employed by a state organ or (2) have benefitted from a DALRRD programme. He asked what lessons the DG has learned from the audit reports to ensure this does not reoccur in the future. He asked again if there is a system in place or is it looking at a possible system to put in place.

Of the 521 applicants who received a minimum score of 5, has DALRRD a system in place to fund the applicants who are being reconsidered and if there is budget for that?

He asked how DALRRD plans on funding the different planting seasons, as the cost for winter and summer crops differ. How will it deal with this matter?

On people who received vouchers, can DALRRD confirm with certainty that all these people received the issued vouchers and the inputs they were supposed to get through that voucher?

Ms N Mahlo (ANC) replied that all government department officials have to sign a Declaration of Interests. She asked if DALRRD has such a policy in place that deals with this matter.

Also now that COVID-19 has passed, how does DALRRD plan on dealing with its legacy. Are there regulations in place to help DALRRD overcome the effects of the pandemic?

DALRRD issued letters of demand to recover the money given to state employees by mistake. She asked if DALRRD has consequence management in place. If so, when and how is it going to be implemented?

The Chairperson thanked DALRRD for the work that went into compiling the comprehensive presentation. The expectations that the Committee had was that DALRRD was supposed to collect information that they received from the various provinces and that they then had to represent the findings to the Committee in a comprehensive and uniform format. Information and annexures differ between the provinces and some of the annexures were handwritten and this is unacceptable and unreadable papers from [provinces that should have been typed by now. He emphasised that some of the annexures and information from some provinces were irrelevant.

DALRRD was responsible to respond to the AGSA reports; however there was specific information requested by the Committee to give context to matters raised by AGSA. The presentation and the many annexures that were sent to the Committee by DALRRD do not represent all the correct information for on provinces on the total number of farmers who were approved and received funding. A lot of important information and clarity is missing. For example, the requested commodity, including the amount they received and what it was received for.

He acknowledged that South Africa has the POPI Act and that certain personal information is not allowed to be made public. However, aren’t we the governing body supposed to have access to the information to be able to exercise accountability on DALRRD? Therefore, the Committee has the right to see and be given access to the information that they have requested.

In the report, DALRRD replied that they will not be penalising and thus recovering funds from beneficiaries who also received forms of support from other government schemes as these might have been received after the beneficiaries already received the CDASF. Therefore, he asked, if DALRRD can confirm the farmer categories of the 668 beneficiaries who received UIF, which was meant for employers and was also approved for the COVID-19 Fund, meant for subsistence and smallholding farmers.

Can DALRRD give assurance that none of the 668 beneficiaries who received both DALRRD and UIF COVID-10 funds are commercial producers? Because if they are, they did not qualify for the CDASF and in doing so, they have taken away much-needed assistance from smallholding farmers.

Lastly, he noted that the presentation was silent on disciplinary actions against DALRRD officials who approved applications that contravened the COVID-19 Fund criteria, for example, they approved non-qualifying applicants, which included government employees.

The Special Audit reports also focused on small scale farmer support of R775 000 000 set aside for small scale farmers when the CDASF was introduced. In addition to this, the Committee has requested the PC a comprehensive report on all beneficiaries of the CDASF, with respect to the R400 000 000 for the proactive land acquisition strategy; the R100 000 000 that was transferred to Land Bank for distressed farmers; and the report on the Land Bank funds have all still not been received. He called on DALRRD to adhere and respond to these requests that were posed by the Committee.

DALRRD response
Mr Shilote replied that government officials who received relief vouchers are not necessarily DALRRD officials but officials in other government departments.

The briefing documents were sent late to the Committee as there were challenges, such as some documents had to be scanned which is a time consuming process. He apologized for the delay.

Mr Shilote noted the Director-General. had mentioned that there is a famer registry and as soon as they receive it from the Chief Information Officer (CIO), they will make the register available to the Committee.

On the letters of demand, Mr Shilote replied that if the people do not react or honour the request to pay back the money, the next step will be to take legal action through the Office of the State Attorney.

The Department's sampling of the applications showed that were certain levels of consistency across the nine provinces of the COMBUD. However, the fund is province-specific and the applications were from applicants within a particular province. Therefore, these inconsistencies could have been human errors. Reconciliations are still being implemented by DALRRD and when the final report is submitted, it will hopefully have addressed all the blind spots that occurred during the process.

On the acknowledgement of debt, some people have acknowledged debt while others are still contesting – especially the people who are traditional leaders. AGSA identified traditional leaders as employees of the state from whom DALRRD needs to recover the funds. However, the Department's understanding was that traditional leaders would not necessarily fall under that category. However, they are dealing with the matter and looking at it case by case and will determine whether or not they are going to take legal action.

The three provinces did not appear on slide 6 because there were no state employees in those provinces who had been issued vouchers. Some were detected in those provinces but they were detected earlier prior to when the vouchers were cashed out. Unfortunately, in other provinces, by the time the system picked up these government employees, the vouchers had already been redeemed. Those are the ones for which letters of demand were issued.

On applicants who have previously benefitted from DALRRD, the Department has moved forward in ensuring systems have been put in place to pick this up in future. He reminded the Committee that there were various problems when the fund was being rolled out due to the urgency of the pandemic. Some of the problems were not picked up because DALRRD was focused on providing assistance to the people.

Another limitation the COVID-19 pandemic has revealed is there is a serious lack of integrated government information systems to allow government officials access to multiple databases when they need information. They are reliant on other departments for information and that is why they do not have the required necessary information for all the provinces.

On the funds for applicants who are being reconsidered, he replied that three applicants have already been approved and the funds are available to them. However, there are still a few of them who still need to redeem their vouchers but the vouchers have expired. However, DALRRD has put a system in place to allow these applicants to still benefit from the inputs without the vouchers.

DALRRD does not have to make any adjustments as of this moment for changing seasons.

On all applicants receiving the inputs from the vouchers, he replied that there are some applicants who did not receive their inputs, but there are various reasons for this. For example, at the time an applicant wanted to redeem the voucher, some suppliers did not have all the inputs that the applicant needed. The supplier was supposed to supply the applicant with the inputs at a later stage, but in some cases they never did. DALRRD is investigating those cases so that those farmers can be assisted.

Mr Terries Ndove, Deputy Director-General: Land Redistribution and Tenure Reform, replied that there is a standard declaration of interests and it is not limited to this work.

On scoring, he clarified that it is not 5% but a score of meeting five out of eight or nine criteria. You need to score at least five to meet the criteria. DALRRD will honour the commitment made that all outstanding assistance is provided. They will not disadvantage any farmer who has met the criteria and has not benefitted due to circumstances beyond the farmer's control.

On consequences beyond the letters of demand, Mr Ndove replied that there will be consequences and each case will be treated based on its own merit.

Mr Ndove replied that the concerns will be addressed about the handwritten annexures. Some of the handwritten original documents are subject to misinterpretation once they are typed up and differ from what was originally replied. DALRRD will also make the necessary amendments and changes to the documents so that all the provinces reflect the same information. It will make all the requested information available to the Committee as the information is available such as the commodity amounts received

DALRRD can confirm that the people who benefitted were not commercial farmers. It is able to provide information that they qualified and met the criteria.

On disciplinary actions against officials, he has already addressed the issue earlier.

There is a report available on the 400 farmers who were part of the PLAAS programme. This was a Department oversight and the information will be provided to the Committee once it is presentable in an acceptable format. The amount from Land Bank was not included in the report and DALRRD will still regard it as outstanding and provide it to the Committee in due time.

Mr Ndove emphasised that the AGSA Report they are referring to is the 2020/21 audit not 2019/20. On the monitoring and evaluation (M&E) systems, the M&E report is available and it was presented at the 1 March committee meeting. The M&E report reflected a similar outlook to the AGSA report. The final M&E report is taking long as all the concerns need to be addressed to provide a comprehensive M&E report.

He acknowledged that DALRRD needs to put garnishee orders in place, as they are liaising with departments where these state employees work with the view to issuing garnishee orders. He acknowledged that DALRRD needs to create an internal process to ensure that all government employees who benefitted from the scheme are held accountable and pay back the money.

He replied that the COMBUD will be sensitive to issues around different crops, changing seasons and other materials and they will respond to the concerns around that.

Mr Ndove replied that ‘double-dipping’ or benefitting from multiple department programmes is a country-wide challenge that occurs across all departments and programmes. It is something that must be addressed by government and all departments.

DALRRD is working on addressing the areas where disciplinary action needs to be taken.

On the POPI Act and the application for information by public bodies, Parliament is part of ‘public bodies’ and information arrives at Parliament uncensored, according to Section 38 that deals with exemptions. However, internally, they have a challenge. However, it is an issue that he will clear up and get back to the Committee about when he has more clarity on this matter.

He replied that reports reflecting the number of beneficiaries do exist and these will be made available to the Committee. He thanked the Committee for the inputs and suggestions.

The Chairperson asked if there were further questions from the Committee that will be responded to in writing by DALRRD.

Ms Steyn asked DALRRD to take a look at the documents, as some of the documents have not been handwritten by farmers but by Department officials. They did not receive the information that they asked for. On the farmers’ registry, funds were provided to DALRRD to put a farmers’ registry in place and she asked if such a registry is indeed in place.

As there were no other follow-up questions from the Committee, the Chairperson thanked DALRRD for the responses and its efforts are appreciated by the Committee. The concerns identified by the Committee must be addressed and the Committee will follow up.

Committee minutes
The Committee considered the minutes of 7 December 2021 that dealt with land claim complaints reported to the Committee including the Gwatyu community of the Eastern Cape. During the adoption of the minutes, a dispute arose amongst Members about a misunderstanding about the Communal Property Association (CPA) being registered. After a long discussion, it was concluded that the Committee needs to go back to the recording of the meeting to gain clarity.

The Portfolio Committee ran out of time to complete the adoption of a Committee Report. The Chairperson asked the Committee to go through the recommendations and the full report before the next meeting.

The meeting was adjourned.

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