Agriculture Portfolio Audit Outcomes; DALRRD & CRLR Annual Report 2021/22, with Minister & Deputy Minister

Meeting report

Opening remarks by the Chairperson

The Chairperson mentioned that the Committee would first receive a presentation from the Office of the Auditor-General (AGSA) on the Department of Agriculture, Land Reform and Rural Development (DALRRD) and its entities) audit findings for the 2021/22 FY. Following this, it would be briefed by the Commission on Restitution for Land Rights (CRLR) and DALRRD on their annual reports.

The Chairperson noted that despite the progress made in the restitution of land rights, all stakeholders could not rest until they were fully restored, thus returning the dignity of those who were dispossessed by the colonial system. As such, the work of the Commission lay at the centre of the democratic project, as it had to strive to fulfil these constitutional objectives. The Committee celebrated the country’s collective heritage and history and for some, the restoration of dignity also lay in receiving financial compensation, rather than land.

Both the imperatives of nation-building and national reconciliation centred on this process of land restitution, and while there have been challenges in achieving this objective in the past three decades, the country dare not falter; with the choices made in the present having an impact on the future.

Briefing by the AG on DALRRD and its entities’ BRRR for 2021/22

Ms Michelle Magerman, Deputy Business Executive, AGSA, introduced the delegation from the AGSA.

Mr Thabo Ditodi, Senior Manager, AGSA, delivered the presentation.  

To begin with, he indicated that there were notable improvements in the audit opinions, with three entities, namely: the Perishable Production Export Control Board (PPECB), Office of the Valuer-General (OVG) and the CRLR, all achieving a clean audit, which was up from 1 in the 2020/21 FY. However, this was somewhat overshadowed by the increase in the number of auditees receiving a qualified audit opinion, with findings [(these were: DALRRD, the Agricultural Land Holding Account (ALHA), Agricultural Research Council (ARC) and the Ingonyama Trust (IT)] which was up from three in the 2020/21 FY to four for the year under review.

Overview of the audit outcomes

Mr Ditodi was concerned by DALRRD’s poor audit outcome, primarily due to its qualified audit opinion for the Presidential Employment Stimulus Initiative (PESI). The initiative obtained this audit opinion because DALRRD failed to confirm that farmers received the goods for vouchers redeemed and paid for.

For the second year running, the ARC obtained a qualified audit opinion on property, plant and equipment. Three additional qualification areas were noted on irregular expenditure, contingencies, depreciation and amortisation. ALHA, which also obtained a qualified audit opinion in the prior FY, due to the fact that it had not instituted an assessment to determine whether the R2.2 billion related to the recapitalisation grant had been utilised for their intended purposes. The AG noted that the Ingonyama Trust had submitted its financial statements late for audit. Furthermore, it obtained a qualified audit opinion on expenditure, contingencies and investments in controlled entities.

Four entities, namely, Deeds, OBP, NAMC and the ITB, obtained material non-compliance findings reported in the areas of: expenditure management, procurement and contract management; consequence management; and material misstatements identified in the financial statements submitted for auditing.

Commenting on the quality of financial reporting, the AG found that six out of 11 auditees had proper record-keeping controls, while three required intervention and two were of concern. Negative findings were made on review and monitor compliance controls with the majority (6) of the auditees requiring intervention, while only one had good controls. The overall impact was that the AFS’ for four auditees were of poor quality, while the other seven were of good quality. Some of the impacts of the poor financial controls were: an inability of the auditees to follow the money; a lack of transparency and accountability.

The total amount budgeted for PESI was R1 billion, of which R843 million was transferred to the service provider; R335 million of this transferred amount was spent on redeemed and settled vouchers; while R508 million remained unspent. The AG raised its concern regarding the fact that the department could not validate the invoices submitted by the service provider, and neither was able it able to provide proof of delivery of the goods purchased through the redeemed vouchers.

PESI was plagued with certain risks and challenges, some of which were: farmers receiving few inputs due to the commission percentage charged by intermediaries; payment for redeemed vouchers without proof of delivery of inputs to farmers; intermediaries accepting vouchers and redeeming them before providing the inputs to the farmers.

Irregular expenditure amounted to R256.4 million for the year under review, representing a significant increase from the prior year (R105.3 million). Overall, across the last four FY’s, irregular expenditure amounted to R1.48 billion, which was of concern to the AG. The biggest contributor for the 2021-22 FY was ARC, which incurred irregular expenditure amounting to R210.5 million. Members were informed that irregular expenditure continued to occur because investigations into the causes were not instituted and as a result, no consequence management was implemented.

The Committee also heard that total irrecoverable debt for auditees stood at R856 million, with ALHA contributing 68% of that, at R582 million. While total unspent grants at year-end on programme, which includes PESI and Restitution, stood at R1 billion. The AG further observed that the department reported a significant under-performance in the support to farmers in the Land Development Support (LDS) programme. Only 35 farmers received support from DLARRD, against a target of 146.

In addition, the AG noted that the approvals for LDS projects had decreased significantly in the past three years from R131.6 million in 2021-22 compared to R549.8 in 2019-20. To improve the number of farmers supported, the AG recommended that the department pay attention to the revenue collection from the recipients of the grants, as some of them cannot pay the rental on leased farms.

Another concern was that 67% of approved land claimants opted for financial compensation instead of having land transferred to them, he said.

Recommendations

To correct the negative findings, the AG made certain recommendations to the auditees, some of which were: confirmation that the production units obtained through the redeemed PESI vouchers were received by intended beneficiaries; an enhancement of the ARC’s asset register, to ensure that its accurate, complete and supported by the appropriate supporting documentation; that adequate record systems be put in place to ensure financial information is supported by credible and reliable evidence; and zero tolerance posture to non-compliance towards legislation should be fostered through the timely investigation of transgressions, followed by effective consequence management.

The Chairperson indicated that the Minister would have to temporarily leave the meeting, as she had to attend the unveiling of the New Biosecurity Centre at the University of Pretoria. As such, he invited the Minister to make opening remarks on the department’s annual report.

(See presentation)

Opening remarks by the Minister

Ms Thoko Didiza, Minister of Agriculture, Land Reform and Rural Development, mentioned that the Department and Commission’s reports outlined the activities embarked on during the year under review and the financial performance. While she was pleased that there had been improvement in the non-financial performance across the department and its entities (as mentioned by the AG and shown in DALRRD’s report), challenges still remained. Furthermore, while some entities had illustrated an improvement in their financial performance, others experienced a decline.

She reminded Members that the AG made negative findings on irregularities related to the expenditure of the Covid-19 intervention funds to assist farmers, which, mainly, were because of the Department’s use of a manual system. Thus, the AG advised that the department migrates to a digital system.

During his tabling of the Employment Economic Programme in October 2020, the President announced the Presidential Employment Stimulus Initiative, which had not been part of DALRRD’s programme. As such, it was not budgeted for. However, specific amounts were allocated to DALRRD, the Departments of Water and Sanitation, Basic Education, and Environment, Forestry and Fisheries to establish programmes that would assist in retaining employment in each sector – one of which was PESI.

To prevent irregularities in the administration of the programme, the Department implemented an automated system. As such, farmers were expected to apply through an Unstructured Supplementary Service Data (USSD), which the department would then have to assess and approve or disapprove: if approved, the voucher would be sent to the farmer, who could redeem it; after which an invoice would be sent to DALRRD.

She urged both the Committee and the Department to look into finding ways to improve the administration of the programme, to eliminate the irregularities currently faced. To gauge farmers’ experiences in redeeming and collecting vouchers – as the AG had raised concerns around this – the Department commissioned a study where 8000 beneficiaries were sampled. The department, she added, has been engaging the AG on this matter for some time, particularly on the progress regarding investigations into the irregularities experienced.

While she appreciated the AG’s allowance for the Department to conduct an investigation that would validate the information obtained from farmers, she highlighted the importance of the former providing recommendations for the latter to improve, once it had completed its investigations on expenditure. 

As noted by the AG, one of the challenges with the restitution of land rights was claimants opting for financial compensation, rather than land. This was a sensitive matter which required better management by the Commission. To assist the CRLR, she requested that the Committee work with the Department in looking for ways to convince communities to opt for land, whilst bearing in mind that they could not be forced against their legal right to rather receive financial compensation. 

She informed the Committee that the ARC CEO and Board were currently working with the Department of Public Works and Infrastructure (DPWI) on clarifying which assets (property and land) belonged to it. If an entity or department did not utilise the land allocated to it by the DPWI, it must hand it over back to the department, unless ownership was transferred to it.

The Department recognised that some of the issues identified by the AG had to be dealt with on a policy level, especially those faced by the OBP, so that it is able to overcome its legal challenges, thus enabling it to finalise the infrastructure it requires. Another problem faced by the OBP was its inability to, at all times, provide vaccines for animals on time to farmers – and indicate where they can be obtained. Both the Board and Management of the OBP were working on solving this challenge.

The Chairperson interrupted the Minister and requested that she not speak to the AG’s report. He explained that she had only been invited to make her opening remarks immediately after the presentation of the AG’s report – which was not the usual protocol followed – because she had to attend the unveiling of the new National Biosecurity Centre in Pretoria.

Minister Didiza apologised and clarified that her remarks only provided an overview of the Department and its entities’ annual reports. 

The Chairperson said the Committee would take up some of the information she mentioned with the Department during the discussions.

Thereafter, he opened the floor for discussion.

Discussion

Ms M Tlhape (ANC) said that the report presented had mixed outcomes, as the audit opinions for the majority of the entities and the department remained stagnant, whereas improvements were recorded by the PPCV, DEEDS, OVG and OBP: which she commended.

During the previous engagement on 6 September 2022, DALRRD mentioned that the Minister had to intervene and halt the PESI programme so that the challenges could be addressed. R335 million had already been spent on the project already, with R580 million still to be implemented. She asked whether the AGSA believed that the survey conducted was sufficient evidence to confirm that farmers had received their allocated voucher amounts – especially as the AG insisted that every farmer be verified physically.

She then asked if Circular 21, issued by ALHA, would, in time, bring about improvements, as the AG indicated that there had been progress in the accounting of funds. Furthermore, she asked whether the circular would assist the entity in taking steps to recover the R582 million irrecoverable debt (which formed the majority of the R856 million irrecoverable debt amongst the Department and its entities). If not, was there another mechanism that could do so? 

In addition, she asked whether the total R856 million would be recovered or written-off; and if the Department planned to implement consequence management for officials responsible.

She did not believe that the issues faced by the ARC were fundamental.  Instead, they were caused by negligence on the part of the officials: with them being unable to grasp the definitions of omission and inclusion (related to irregular expenditure). She requested that the entity furnish the Committee with its remedial plan to address irregular expenditure; and for it to explain how it would monitor the developments in its engagements on the transfer of property with the DPWI. The Committee would also monitor the progress of this process.  

Referring to the Ingonyama Trust, she indicated that she was not concerned with its challenges with municipal rates and contingency liabilities, as the Committee would be able to ensure that they comply. Her main concern was that the Ingonyama Trust subsidiary was not consolidated in the annual financial statements (AFS). She asked if there had been acknowledgement from the Ingonyama Trust that it needed to consolidate the subsidiary funds within its AFS, or if it had contested this. 

She deemed it unacceptable that the Department and its entities were found to have extended contracts without mandates, thus being negligible in terms of contract mutual management, and advised that the Committee monitor this issue.

Together, with the Department and other stakeholders, such as the traditional leaders, the Committee had to advise communities on the advantages of opting for their land rights, rather than financial compensation, as access to land determined one’s political, social and economic power. Therefore, she agreed with the AG’s sentiments that financial compensation would not close the equity gap.

In her final remarks, she recommended that the Committee assess the remedial action plans of all of the auditees that the AG will have agreed to.

Ms T Mbabama (DA) stated that she would reserve most of her comments and questions for the Department. Nonetheless, she expressed her appreciation for the AG’s report, describing it as clear, concise, comprehensive and easily understandable.

In her only question, she asked whether it was part of the Department’s brief to look at which officials were fit for purpose to conduct their jobs when it conducted its audit of the qualifications of the people working in the Department and its entities, as she could not believe that someone fit for purpose would continue to make the same errors in the face of negative findings. 

Mr S Matiase (EFF) said it was unfortunate that the Department, through the Minister, had been allowed to make remarks immediately after the AG had made its presentation.

With the extent of non-compliance in the Department and its entities, it was clear that they were underperforming. While he was disappointed that some of the entities and the Department had received unqualified audit opinions, it was to be expected, especially as the Committee had failed to hold the Executive accountable for its decisions.

He then asked why the Ingonyama Trust and ITB had been audited separately, and why their reports were presented in the same manner.

Due to his disappointment with the Department’s performance, he suggested that the Committee host a physical meeting with the Minister, to understand why it found itself in a crisis. Thereafter, he called for disciplinary proceedings to be instituted against those found to be responsible for the poor performance.

Ms B Tshwete (ANC) commended the OVG and the Commission for obtaining an unqualified audit opinion without findings, which represented an improvement for the former.

Similar to Ms Tlhape, she asked if there had been acknowledgement from the Ingonyama Trust that it needed to consolidate the subsidiary funds within its AFS, or if it had contested this.

Thereafter, she asked if the irrecoverable debt could be retrieved; if so, how. If it could not, she asked whether it would be written-off. 

Mr N Masipa (DA) shared Mr Matiase’s disappointment that the Minister had been able to comment on the AG’s report, which is usually only to be discussed with the Committee. He recommended that in future meetings, the Chairperson should take the Committee into his confidence and clarify the meeting’s proceedings. After that, he posed several questions to the AGSA.

One, he asked if it could provide the Committee with a breakdown of the R856 million irrecoverable funds so that it could follow the money.

Two, he asked if the ARC’s repeat finding on property, plant and equipment was due to a shortage of accountants, or a lack of will of its officials to remedy it.

Three, he asked if the AGSA had sight of the farms owned by the ARC and if so, what their conditions were and when they were last evaluated.

Four, he asked if ALHA had professional accountants, who would be able to ensure that all monies were spent correctly. This was important in addressing the issues of land reform in the country, which, if not resolved, would be an indictment on the Committee. 

In his final question, he asked how DALRRD compared with other departments in the economic cluster regarding the value of its irregular expenditure, internal controls in place and levels of poor performance.

The Chairperson clarified that the Minister was invited to only make opening remarks on the Department’s report; hence he intervened when she began to comment on the AG’s reports. Members would have the opportunity to debate the issues she raised in her opening remarks, during the engagement with the Department, on its report.

Ms N Mahlo (ANC) described the AG’s report as being of a high standard. It assisted the Committee in understanding some of the deficiencies in the Department’s annual performance. In the same light, she commended both the OVG and the CRLR for obtaining a clean audit.

She then asked what the AGSA thought would be an amicable solution between it and the Department to resolve the challenges encountered in PESI.

Mr M Montwedi (EFF) indicated that the Department’s poor performance was an indication that it would not obtain a clean audit – which he thought should be a target for all government departments.

He was concerned that the Department had not implemented the AG’s recommendations on some of the deficiencies it found in the department’s administration of the Covid-19 Relief Programme, during its rollout of PESI. Not doing so was an illustration that the Department did not learn from its mistakes because had it implemented the recommendations, it would not have had negative findings.

Following that, he asked the AG what the best approach to implementing programmes such as PESI was. In addition, he asked whether PESI had been implemented by the department or a service provider; if it was the latter, what had been the cost, as high commission amounts had been charged by the intermediaries.

Considering the recent amendment to the Public Audit Act – which provides that accounting officers can be liable for, amongst other things, omissions related to irregular expenditure – he asked what advice the institution provided the Department with issues encountered in the rollout of the PESI programme.

Noting that each department was expected to contain its own internal risk committee, he asked the AG whether it believed that DALRRD’s strategy to deal with risk was working. He doubted that it was, as it had not proactively guided the department and advised it on implementing the AG’s recommendations on the irregularities faced during the rollout of the Covid-19 Relief Fund.

Mr N Capa (ANC) appreciated the AG’s recommendations to the Committee and said they would assist Members in executing their duties. Thereafter, he posed two questions to the AG.

One, he asked if there was a consensus between the AG and the Ingonyama Trust on when it should be audited each year.

Two, he asked if the AG thought it possible to reach a mutual understanding with DALRRD on how best to resolve the issues in the PESI Programme.

Ms T Breedt (FF+) was concerned that some entities had stagnated or regressed in their audit findings. She agreed with other Members that the Committee meet with the department separately on the PESI matter. 

One of the repeat findings in the AG’s report was the Department and its entities’ inadequate implementation of action plans. The Committee, she stressed, had to perform its oversight functions, and handle the BRRR and AG reports adequately.

Ms K Mahlatsi (ANC) welcomed the presentation by the AG and indicated that it provided context and content to the issues at hand. Additionally, she commended the OVG for its improvements, particularly as the Committee had difficulty ensuring that it functioned efficiently.

However, she expressed concern regarding the ARC’s poor performance due to non-compliance with legislation and misstatements in the financial statements. Much as these matters may have related to poor internal controls, particularly the misstatements, she suspected a capacity deficiency in the institution. Following this, she asked if the entities which received poor audit outcomes had functional risk committees.

She pointed out that the PESI had been a long-standing problem, so much so that the Minister had to intervene in the matter. As such, she asked if the AG believed that the irregularities in administering the PESI voucher, were due to a lack of capacity to handle the automated system. To her, the number of negative findings made by the AG on this programme was a clear indication that the department had been negligent in performing its work.

She agreed with the suggestion that Committee should have a physical meeting with the Minister.

The Chairperson asked the AG what the underlying factors obstructing the Department from finalising the reconciliations on the Recapitalisation and Development Programme (RECAP) monies that were dispersed. Furthermore, he asked how this process would be remedied. 

He asked for the AG to comment on why, despite the introduction of Circular 21, ALHA failed; and whether it thought it had had any positive impact.

The ITB had repeatedly refused the Committee’s request to submit IT Holdings PTY’s audited financial statements. On this, he posed three questions. One, he requested that the AG explain, legally, why the IT and ITB remained as separate entities, given that the latter is responsible for the trustees and is an accounting authority of the Trust. The Committee was of the view that the separation hindered public accountability and transparency.

Two, he asked if the AG had audited the Ingonyama Trust’s AFS for the 2020/21 FY. Three, he asked if the Department’s claims – made during the meeting on 20 September 2022 – were true that the Ingonyama Trust and ITB’s financial reports for the 2020/21 FY had not been tabled because they were still with the AG. Furthermore, he asked if the AG had concluded both entities’ audit reports.

Ms Mahlatsi asked whether the concurrent function had a bearing on the Department’s performance and the AG’s view on the matter.

Mr Ditodi, referring to the question on whether the AG was in consensus with DALRRD on how to verify beneficiaries of the PESI voucher, indicated that both had not yet fully agreed on the action plan, however, the AG did inform the Department that it needed to confirm that it had traced beneficiaries and not that it verify each one.

He explained that usually, the AG conducts a status of records review, and in most instances, embarks on it before the end of the FY (between November and January) but it planned on doing it earlier, in future. This process entailed the assessment of action plans and subsequent discussions with management on them. Usually, the Department or entity in question is given two to three months to draft its Audit Action Plan (AAPs), after which, the AG conducts an interim audit to test the authenticity of the documents provided by the Department.

On whether the Department’s risk committee had advised it on the implementation of PESI, he confirmed that both the AG and the risk committee had looked into the standard operating procedures of PESI, which they believed were crafted well; although, the AG felt that the Department ought to have taken photographs of farmers who had redeemed their vouchers and uploaded them to the online system. The risk management process needed to assist the Department in implementing the programme. Through its experience with PESI, the Department learned not to discount the controls it utilised in the physical system when it made the migration to the digital system.

Touching on the comment that the Department failed to learn lessons from the rollout of the Covid-19 Relief Fund programme, he indicated that while the Department struggled to retain the proof of deliverables on its automated system for the programme, it faced more challenges when using the manual one, with many people who qualified being rejected, whilst those who were supposed to be rejected were approved. Nevertheless, the AG noted some improvement in the administration of the programme. 

On who had impeded the PESI programme, he stated that a commission was agreed upon with a service provider, and is paid on a monthly basis. Further, the contract was transversal, previously entered between National Treasury and the service provider.

Regarding the question of whether the AG and Department could come to an amicable solution, he stated that the Department had to submit its action plans to the AG so that it could assess them and see if there are areas that require correction; thus allowing for their speedy implementation. He informed Members that during its meeting with the AG the previous week, the department’s audit committee committed to conducting an interim audit.

On whether the AG thought that Circular 21 would assist with the accounting issues, he indicated that it would work partially because certain actions, in line with the contractual obligations, ought to have been taken earlier. For certain reasons, there would be limitations in implementing them now – though there would be legal implications for their non-implementation. The biggest challenge with Circular 21 was that most actions depended on finalising the reconciliations and assessing the invoices. Unless these processes were concluded, Circular 21 would not be as effective.

Referring to the irrecoverable debts amounting to R856 million, he explained that these debts had been disclosed in the Department’s AFS and it had not yet written them off. Before deciding, the Department’s accounting authorities will first have to assess the likelihood that the money will be received. Using ALHA as an example, he said that if it wanted to retrieve its debt from a farmer who was not paying his/her rental fees, it would first have to look at whether the farmer had received Land Development Support (LDS) – for instance – or awaiting it. If this was the reason for the non-payment of rental fees, the entity should look to assist the farmer in becoming more commercially viable, so that it is able to service its contract. However, if the farmer had received the required support, then the entity would be advised to remove the individual from the farm, to stop the debt from increasing.

Debt recovery is a legal process that should be utilised when required – a cost/benefit analysis assessment should be done before retrieving the money – also so as to not create a culture of non-payment of occupiers.

Touching on the issues faced by the ARC, he indicated that these matters would have to be monitored by the entity and the Department, particularly as land claimants often opt for financial compensation instead of land. He recommended that DALRRD and ARC look to work with traditional leaders on this.

Responding to the question on whether the Department assessed officials are fit for purpose, he stated that DALRRD had written extensive SOPs around the approval process for provincial and local departments, and monitored their implementation, which illustrated that it had applied its mind correctly on improving implementation. Although he admitted that the monitoring had to be enhanced.

Referring to the question on what measures were in place to assist ALHA, he said that two issues prevented the finalisation of its challenges. The first was the backlog of 500 contracts, many of which were entered into five years ago. The second was if the entity had the will to institute legal proceedings to obtain the funds, otherwise it would continue to remain in the reconciliation process. 

On whether the AG had sight of the ARC’s farms, he confirmed that the institution had visited a sample of the farms and did not find them in a vandalised state, nor had they been illegally occupied: the land was vacant.

Referring to the question on the omission related to irregular expenditure, he mentioned that as part of the audit, the AG considered irregular expenditure, in terms of the extended definition of a material irregularity. In the main, the ARC, he advised, should work towards not including expenditure that would not fit the definition of a material irregularity in its AFS; and provide evidence for the expenditure that is valid and has been omitted; which would then be evaluated by the AG.

The AGSA did not believe that the ARC had an issue with capacity or competency, which was illustrated by the fact that the vacancy rate was not yet at the point of the entity being under-resourced.

Mr Khabiso Madlala, Deputy Business Unit Leader, AGSA, referring to the question on whether the Ingonyama Trust had contested submitting its AFS, indicated that the AG, at the time, had received Ingonyama Holdings’ bank statements, as it had not yet prepared its AFS. Since then, it had conducted audits on both entities and noted a slight improvement from an adverse (in the 2020/21 FY) to a qualified audit opinion, which it retained in the 2021/22 FY. 

Ms Adéle Howard, Senior Manager, AGSA, added that there was a consensus between the AG and Ingonyama Holdings to the Ingonyama Trust on consolidation, of the accounting framework, and for them to disclose such in their AFS. Ingonyama Trust disclosed in its AFS that the consolidation was not done because it had not received the company’s bank statements at the time.

She clarified that the Ingonyama Trust and ITB are two separate legal entities, with the latter being listed in the PFMA. As a result, they had to prepare two separate financial statements, which the AG must then audit.

Ms Magerman stated that while the AG was comfortable with the PESI application process, it was concerned that not all beneficiaries had received their vouchers, which it deemed critical.

In previous correspondence, DALRRD indicated that it had begun meeting with farmers to verify if they had indeed received their vouchers. To this point, DALRRD had not informed the AG of controls that will be implemented in the automated system going forward, but it hoped that it would implement the SOP. The AG has held a meeting with the department’s audit committee and was willing to conduct an interim audit. She believed that they would reach a consensus on what process will be used to confirm that farmers did obtain their vouchers. Furthermore, it would also be informed on the controls being implemented.

Regarding the difficulties faced by ALHA, she explained that obtaining all invoices and conducting reconciliation thereof, had been a challenge because most of the expenditure was historical.  However, she stressed the importance of DALRRD and the entity finalising the reconciliations. Where they could not retrieve the information, the AG should be informed; where they did identify the farmers, they should retrieve the money but before doing so, it needed to finalise the process and determine who belonged in each category.

She confirmed that ARC farms were still intact but the question of ownership of the land remained critical, as it was critical for accounting purposes. The AG noted that there had been discussions between the entity and the DPWI on whether the land would sit in the ARC’s books or not.

Touching on whether the ARC had an issue with skills capacity, she indicated that the AG did not view this as a concern, rather that the entity should adopt a no-tolerance approach to the non-adherence of controls, and for the managers to implement consequence management against officials not to be abiding by the controls.

Referring to the question on material irregularity, she stated that limitations on what caused the irregular expenditure make it difficult to finalise if there was a material irregularity, however, the AG is working on the expanded mandate. 

The Chairperson thanked the AG for its responses and said it had empowered the Committee in conducting oversight on the reports tabled by the Department and its entities.

Following this, he requested that the Department brief the Committee on its annual report for the 2021-22 FY.

Briefing on DALRRD’s 2021-22 Annual Report

Mr Ramasodi Mooketsa, Director-General, DALRRD, highlighted that the report would only be marginally different from the 4th quarter report presented in September. DALRRD obtained a 1% increase in its performance from the 4th quarter report to the annual one. Further, DALRRD has begun implementing its plans to improve its financial and non-financial performances and has seen some progress this FY. However, it would continue to reflect on the measures needed to improve on the PESI programme (which contributed highly to qualified audit opinion), so that it could improve on its audit opinion. 

Thereafter he introduced each member of the delegation present in the meeting.

Mr Rebaone Phuti, Acting Chief Director: Monitoring and Evaluation, DALRRD, and Ms Rendani Sadiki, Chief Financial Officer, DALRRD, briefed the Committee.

Mr Phuti first indicated that the Department had obtained an unqualified audit opinion for non-financial performance.

Mr Matiase raised a point of order. He highlighted the inconsistency with the DALRRD’s statement that it had received an unqualified audit opinion. He pointed out that the AGSA said that the Department and a majority of its entities obtained a qualified audit opinion.  He accused the Department of lying and questioned why the Committee had to continue with the presentation. As such, he asked for the Chairperson to make a ruling on how the Committee would proceed with the meeting.

The Chairperson ruled that the Committee would allow the Department to complete its presentation; thereafter, Members would be given the opportunity to dispute its information.

Mr Masipa also rose on a point of order and said that the opening statement had clouded the entire presentation. He asked the Department to provide clarity on the statement.

The Chairperson asked that the Department clarify the opening statement, as it seemed to conflict with the information from the AGSA’s report.

Mr Mooketsa said the Department had claimed it had achieved an unqualified audit opinion for non-financial performance – which was factual. He clarified that there was a difference in financial and non-financial performance.

Ms Mahlatsi requested that the Members respect the Chairperson’s ruling so that officials from the Department were not consistently interrupted during their presentation.

The Chairperson underlined that was the manner in which the Committee had usually proceeded with presentations.

Mr Phuti continued with the briefing and mentioned that DALRRD had recorded a 60% (38 out of 50 targets met) performance for the FY, and across six programmes. The lowest performance percentage met was for Programme 6: Land Administration, where it only obtained a 25% performance; while the highest target reached was 93% for Programme 2: Agricultural Production, Biosecurity, and Natural Resource Management. Some of these achievements included: the evaluation of 4608 agricultural input products, against a target of 4500; the establishment of four provincial agricultural biosecurity coordinating structures; and the accreditation of the lab in Pretoria.  Although of concern was the failure to implement the Kaonafatso ya Dikgomo (KyD) training scheme.

Under Programme 1: Administration, he outlined that the Department failed to achieve 100% performance for the payment of invoices within 30 days. The reason given for the deviation was that supplier details placed on the invoices did not match the ones on the system.

For Programme 3: Food Security, the Department achieved 6 out of 13 targets, the most notable being the support of 636 Community Property Associations (CPA), against a target of 577 and the acquisition of 55 235 ha against a target of 33 720 ha. However, only 37% of this land was allocated to women (against a target of 50% total land), 0% to people with disabilities (PWD) and 16% to youth (against a target of 40%). While 3 504 ha (against a target of 6 150 ha) were acquired for farm dwellers and labour tenants.

Still under Programme 3, he admitted that DALRRD was disappointed that it only managed to support 35 farms under its Land Development Support (LDS) programme.

Under Programme 4, the Department achieved 3 out of 5 targets. One was the training of 1 679 youth (against a target of 1 409) in its National Youth Service Corps Programme (NARYSEC). However, 23 out of 25 infrastructure projects were delivered, and the remaining two had been abandoned by contractors.

Ms Sadiki indicated that in Programme 5: Economic Development, Trade and Marketing, a 50% performance was achieved, most notably, the finalisation of all AgriBEE Fund applications. On the other hand, the department only managed to provide support to five Farmer Production Support Units (FPSU), out of a target of 35. Furthermore, DLARRD failed to undertake public consultations on the Marketing of Agricultural Products Amendment Bill.

Total revenue for the year under review amounted to R18.4 billion, with total expenditure being R16.9 billion, representing underspending of R1.3 billion. The two largest expenditure items were goods and services, as well as the compensation of employees.

The Department’s total assets amounted to R1.328 billion for the year ended 31 March 2022, with the bulk of the account balance being made up of cash and cash equivalents of R1.284 billion, followed by receivables of R27.744 million and prepayments and advances amounting to R 5.664 million. Total Liabilities amounted to R 1.316 billion for the period ended 31 March 2022, with the bulk of the account balance being made up of Voted funds to be surrendered of R 1.062 billion, followed by payables of R169.722 million, aid assistance unutilised of R71.942 million and Departmental Revenue to be surrendered of R 11.676 million.

(See presentation)

Briefing by the CRLR on its 2021-22 Annual Report

Ms Nomfundo Ntloko-Gobodo, Chief Land Claims Commissioner, CRLR, briefed the Committee on the Commission’s 2021/22 annual report.

To begin with, she mentioned that the CRLR was pleased that in the 2021-22 FY, it managed to transfer a total of 66 789 ha to 36 084 beneficiaries, the majority of whom resided in Mpumalanga, and none in the Free State, Gauteng and Eastern Cape.  However, the Commission was disappointed that it failed to reach its target of finalising 442 land claims, as it managed to only conclude 316.

Total expenditure amounted to R3.25 billion, against a final budget of R3.29 billion, indicating that 98.5% of all funds were spent. The majority of funds, R1.97 were allocated to transfers and subsidies. Some risks to the Commission include ineffectual human resources (as it reported a 11% vacancy rate); under-expenditure, limited budget; and a lack of a clear mandate.

(See presentation)

Discussion

Ms Tlhape asked three questions about the PESI programme. One, she asked how the Department planned to correct the PESI’s current challenges, as the AG, in its report, stated that poor internal controls related to the programme were a significant contributor to the qualification. Two, she asked how far DALRRD was verifying the number of farmers who benefitted from the programme. Three, she asked what assurances DALRRD could provide the Committee that its internal controls were sufficient enough to ensure that R805 million, still to be dispensed by the service provider, would not be spent irregularly.

Thereafter, she asked how the Department planned to respond to its poor performance for the year under review, as it only achieved 58% of its targets, down from 59% the prior FY; and expenditure only increased by 1.5% from 92.4% to 93.9% (of the R18.36 billion allocated). In addition, she felt it was unacceptable for the Department, as it plays a critical role in food security and economically uplifting many in society, including enterprises owned by the black majority. 

While she was pleased that there was an improvement in the number of invoices paid within 30 days, she was concerned that it could not achieve 100% performance, as delayed payment often killed small businesses. She asked what progress the Department had made in paying the 138 invoices, amounting to R1.9 million, which were not paid in the previous quarter. Further, she asked what measures were in place to ensure that DALRRD achieved a 100% performance in the target.

Referring to programme 3, she pointed out that the Department was unable to spend R1.1 billion of the budget allocated to the programme, which was despite the challenges it faced with the damage caused by the July Riots, the detention of citrus farmer’s produce by the European Union (EU), climate change and other issues. More money needed to be spent on struggling subsistence and small-scale farmers, otherwise, food security would be at risk. She asked what the reasons for this were and how it assured the Committee that underspending would not occur again going forward. Subsistence and small-scale farmers are negatively impacted, harming food security.

Referring to note 20.1 of the report (where the Department indicated that it had claims against it amounting to R2.25 million), she asked what litigations had been brought against the Department.

In its report, the AG expressed concern that, in some instances, consequence management against officials accused of irregular expenditure was not instituted. In light of this, she asked if the Department had selectively applied consequence management.

She then posed a series of questions. One, she asked how DALRRD planned to deal with the repeat finding on procurement and contract management – which indicated that the bid document invitation to tender for procurement of commodities designated for local content and production did not stipulate the minimum threshold for local production as required by 2017 Procurement Regulation 8 section 2 – and how would it ensure that the intervention assisted the entities as well. 

Two, she asked for an update on the SIU investigation, which the President instituted on 12 July 2019, into the affairs of DALRRD’s procurement, particularly on goods and services.

Three, she asked if the Department could provide the Committee with a list of the number of compliant Community Property Associations (CPA), as she felt that DALRRD’s obsession with their compliance did not have a material benefit for land claimants. In addition, she asked for an update on the progress regarding the CPA Amendment Bill that was tabled in Parliament on 28 April 2017.

Four, she requested reports with details on the number of extension officers employed by the Department across provinces; their proximity to emerging farmers; and coverage of the commodity groupings.

Five, she asked both the CRLR and DALRRD how they planned to finalise the remaining 892 labour tenant applications (set against a target of 1000).

While she commended the CRLR for its audit outcome, she deemed it unacceptable that it has an 11% vacancy rate, which was above the preferable rate of 10%. This was even more concerning given the Commission’s capacity constraints. As such, she asked when the Commission intended to fill the Deputy Land Claims Commissioner post, which has been vacant since the 2017-18 FY.

Six, she asked how the delay in the Commission’s road to autonomy, due to the delayed approval by National Treasury (it has been approved by the Department of Public Service and Administration), had impacted its performance; and whether it anticipated that the process would be concluded by the end of 2022, which is the deadline. 

Ms Mbabama mentioned that she was pleased to see that the Director-General (DG) was in good health, as he had been ill in the previous meeting.

She felt that the Department did not understand that efficient M&E controls were required for implementation to occur. She then asked that consequence management be implemented in the year under review, as officials failed to correct the repeat audit findings on the rollout of the Covid-19 Relief Fund, and PESI.

After that, she posed multiple questions. One, she asked what commission percentage the department agreed with the service provider to distribute the PESI voucher. Additionally, she asked what happened to the interest accrued from the money sent to the service provider and whether it had been paid to the department or if it was set against the commission paid.

Two, following from the Department’s assertion in its report that it was unable to reach its target on land distribution due to the AG’s rejection of the offers made, she asked if DALRRD had met with the AG on how to resolve the matter; if it had, what was the resolution.

She was surprised that the AG made a finding on the quality of the Department’s financial statements because she held the Chief Financial Officer (CFO) in high regard.

Three, she asked which company was used to trace the remaining 892 labour tenants whose applications had not yet been finalised; and what the service level agreements (SLA) were between it and DALRRD.

Four, referring to the Department’s achievement of 23 out of 25 SPSU in programme 4, she asked how each service provider was contracted, as it was alleged that they were not fulfilling their duties.

Five, she asked who was responsible for recoveries in DALRRD – was it a unit or designated officials – as they had remained stagnant.

In her final question, she asked if it was time for the department to refer the Kramer Family Trust land claim, first laid in 1996, to be referred to the Land Claims Court.

Mr Matiase indicated that he did not have much to say about the Department’s report, as it contained incorrect information. He felt that by listening to the entire presentation, the Committee had condoned the Department’s mistruths. The Department had no intention to correct its repeat findings and to discipline officials responsible for the misconduct.

A high-level panel was appointed by the former Speaker, Ms Baleka Mbete, to look into the effectiveness of DALRRD’s legislation in the past two decades in resolving land claims. One of its findings indicated a need to amend the Labour Tenants Act (LTA) to prevent overlapping claims lodged by labour tenants on the land they resided on, he said. The Panel further recommended that Section 16 (1) (d) be amended (this section related to the cut-off date of applications).

Consequently, he asked whether the CRLR had familiarised itself with the High-Level Panel’s report and, if it had, what measures were taken to respond to its recommendations, as the amendment of the Bill, he believed, would assist the Department in addressing the many claims lodged by the various labour tenants, some of whom the Committee encountered during the public hearings on the living conditions of farm workers.

Ms Tshwete recalled that during the meeting held on 6 September 2022, the Department indicated in its 4th Quarter report for the 2020/21 FY and 1st Quarter report for the 2021-22 FY that only 9% of the land allocated went to women and youth. Yet, during the course of this meeting, it tabled that the allocation of land to the two groups was affected because it only concluded in February, thus it had to submit the information late to the AG. She agreed that the Committee had been misled by the Department and described it as concerning. As such, she asked for clarity on whether the land had been allocated to youth and women; if so, how much and why it had been submitted late to the AG.

While she commended the Department for exceeding its target on youth trained through the NARYSEC programme, she expressed concern that trainees were not being provided with skills suited for the sector. Moreover, in a previous meeting, the Committee proposed that DALRRD use the programme to train youth on issues related to agriculture. For clarity, she asked if the training offered improved job opportunities for the trainees; what type of training was being provided; and which provinces and districts they were trained in.

Afterwards, she asked what plans the Department had in place to provide basic services to farm dwellers, which was important, particularly due to the court order which compelled municipalities to do so. Furthermore, she asked if the Department could provide a report to confirm whether it had met with officials from the district and local municipalities to consolidate a clear plan for implementation.

Similar to Ms Tlhape, she also asked whether the Department had been selectively applying consequence management and if it could provide a detailed report on how the irregular expenditure was allowed to occur; when it occurred; and when those responsible would be held accountable.

She was left concerned by the Department’s failure to spend R2 billion on its two core programmes (which include food security, trade, land and economic development), especially as several farmers were affected by poor infrastructure, drought and barriers to the market. Consequently, she asked what remedies the Department had in place to rectify underspending. 

Referring to the farmer production support unit, she asked if the Department had implemented penalties for the service providers, to prevent them from leaving the construction sites they were paid to establish. Furthermore, she asked if the late payment of invoices by the Department or the general incompetence of the contractors led to them leaving their sites. 

In her final question, she asked the Department to provide the Committee with an update on the processing of the Land Administration Bill, as it had been in the pipeline for some time. The slow processing and passing of Bills were highlighted as an issue in the AG’s report.

Mr Masipa mentioned that a professional public sector should be accountable, transparent and illustrate a level of integrity.

Returning to the earlier issue on the Department’s contentious statement, he contended that there was no such thing as an unqualified opinion for non-financial performance. Afterwards, he reminded the Department of the late former AG, Mr Kimi Makwetu, who emphasised that AGSA had been empowered to take any appropriate remedial action where an accounting authority has failed to comply with its recommendations. With the level of deterioration within the Department, he felt that the Committee may be compelled to appeal to the AG to take such action.

In many cases, the Committee agitated for the speedy amalgamation of the former Departments of Rural Development and Land Reform, and Agriculture, so that agricultural land reform projects, which would benefit struggling farmers, could receive immediate attention. Furthermore, the Committee urged DALRRD to stop throwing money into its projects before resolving the challenges they faced. The PESI programme was going that route until the Committee intervened, having realised that the money spent was enriching the middlemen – many of whom had no knowledge of the agricultural sector – and was not benefitting farmers.

Middlemen were used to dispense the vouchers even though the Department had able and well-equipped extension officials who would be able to fulfil those duties. Following this, he asked how DALRRD allowed such irregularities to occur in the programme; who the line manager that rolled it out was; what actions had been taken against all officials responsible; what measures the Department implemented to correct the issues and ensure that the money reached farmers.

There was a discrepancy in the Department and AG’s presentations, with the former indicating that it achieved 60% overall performance, while the latter said 58%. Many of the Department’s challenges, with women, youth and PWDs not being serviced; targets in programmes, such as the non-agriculture enterprise, small-holder producer and bilateral agreements, not being achieved; farmers not receiving their monies (a PWD who won the disabled farmer of the year award had still not received their prize money); a continued lack of access to markets for farmers, remained, which, he stressed, required that the Committee toughen its stance on DALRRD. Not doing so would be an indictment on Members.

He then asked the Department to provide an update on what was being done to conclude the bilateral agreements with the EU to give farmers access to increased market share; and to resolve the challenges with the EU regarding the country’s citrus exports. In addition, he urged the Department to assist farmers struggling with the locust outbreak.

Thereafter, he questioned why Members had not been invited to the Minister’s launch of the Biosecurity research hub in Pretoria. Further, he asked why the meeting had not been coordinated efficiently, to ensure that she would be present for the whole duration of the meeting to account.

Mr Capa asked four questions. One, he asked how the Department would verify which farmers benefitted from the PESI programme so that the Committee could perform its oversight. 

Two, he asked if the Department managed to identify the individuals responsible for the irregularities incurred.

Three, after mentioning that individuals in his village saw securing harvest until the next season as food security, he asked how DALRRD planned to ensure that indigent communities were food secure.

Four, he asked if the Department had mechanisms to obtain feedback from its clients on the provision of its services.

Mr Montwedi, referring to the Minister’s previous comments that the Covid-19 Relief and PESI programmes would assist in updating the farmer register, asked if the Department could provide a profile of all farmers (and where they were based) it assisted in its two main programmes. Furthermore, he asked what issues it had picked up during the compilation of the register.

He asked what plans were in place to ensure that Department reduced its ratio of one extension officer for every farmer, to 1:250 within the next five years. The current ratio illustrated a shortage of 10 000 extension officers, which was a concern, as they played an important role in providing expert advice to farmers.

Afterwards, he asked for an update on whether the Department planned to return its former CFO, who was suspended and subsequently won his case for reinstatement, to his position; or had it planned to continue wasting taxpayers’ money by taking the court decision on review.

Referring to the KyD (Kaonafatso ya Dikgomo), he explained that this programme was meant to teach farmers how to improve the genetics of their animals, thus increasing their value on the market. Due to poor genetics, the value of emerging farmers was significantly less than commercial stud counterparts: for instance, an 18-month heifer often sold for R24 000, whereas the emerging farmers would sell for R18 000. He advised the Department against blaming ARC for the programme’s lack of implementation and asked what measures it had in place to improve it so that emerging farmers are able to improve their returns.

He described the Department’s explanation that it was only able to finalise 108 of 1000 labour tenant applications because it could not trace the remainder, as a lazy excuse. He suggested that it share the list with the Committee so that Members could return to their constituency areas and identify the other 892 individuals.

He then indicated that the Department’s achievement on the NARYSEC target was not commendable, as no mention was made as to what jobs the trainees have been placed in. In previous sittings, the Committee had advised the Minister to place the young trainees in the department’s operations and maintenance units, thus strengthening state capacity and reducing its reliance on external service providers. Poor operations and maintenance management threatened the sector (and food security), with two 200-ha farmers under pivot irrigation systems in Taung and Pudimoe not functioning due to this issue.

To administer PESI, the Department appointed African Explosives and Chemical Industries (AECI), which did not have branches in all areas around the province, leaving farmers to often travel 100-200km distances to obtain their vouchers. As such, he asked if the Department thought the branches were accessible to all farmers, and whether it planned to allow beneficiaries to redeem vouchers that had expired. 

He also described the Department’s reasons for why it had only provided LDS to 35 out of 146 farmers as excuses. Subsequently, he asked two questions on this. One, he asked how many approvals under the LDS programme had not yet been implemented. Two, he asked how long it took to carry out the support once approved. To ensure that a farmer received immediate assistance, Members had suggested that the support be provided alongside the approval of the lease.

Veld fires, he highlighted, had become a serious problem for farmers, particularly those based in the North West and Northern Cape. He asked what plans the Department had to assist such farmers, and if it had firefighting trucks to extinguish the fires.

Since the Free State had claimed to have completed its old order claims, he asked if the Land Access Movement of South Africa (LAMOSA) judgement allowed for the province to begin to process its new claims or if it would have to wait for the other provinces to finalise their historical claims first.

In his final question, he asked the CRLR and Department to place in writing, when the Barolong boo Ratshidi CPA would have their land restored to them, as the claim was approved in 2009, having been submitted in 1998.

Ms Mahlo asked what steps the Department was taking to resolve the AG’s findings that internal control deficiencies, non-compliance with the legislation and Supply Chain Management (SCM) prescripts – with total litigation before the courts amounting to R317.7 million (mainly relating to disputes on the registration of property) and no action taken to prevent irregular expenditure amounting to R484.3 million, as required by Section 38 (1) of the Public Finance Management Act (PFMA) and Treasury regulation 9.1.1 – all of which led to obtaining an unqualified audit opinion.

Two, she asked what measures DALRRD had in place to address the AG’s findings that no disciplinary steps were taken against officials responsible for irregular, fruitless and wasteful expenditure. Furthermore, she asked why those officials had not been punished.

Ms Breedt indicated that it did not seem that the Department had learned from its mistakes in administrating the PESI system. She did not feel that the report the Department submitted to the Committee in September on PESI was not comprehensive enough and requested that it provide another one, which contained details of the 53 000 farmers claimed to have been assisted by the programme. 

Based on the AG’s repeat findings and DALRRD’s audit committee concerns regarding the adequacy and effectiveness of internal controls – which was central to it obtaining a qualified audit opinion – she was not confident that the Department sought to improve its performance. Other concerns raised by the audit committee were significant control deficiencies in: Information and Communications Technology (ICT); record keeping, project and financial management in DALRRD and ALHA accounts; and the management of fraud, corruption, and misconduct irregularities.

As such, she asked for a breakdown of the misconduct cases reported for this FY and an explanation as to why there was a lack of human resources (HR) within the directorate responsible for finalising 60 of these cases, as funds had been shifted to the administration programme with the purpose of filling vacancies. In addition, she asked for a breakdown of the reported disputes, 48 of which were resolved and 59 still pending.

In her final question, she asked why the Department had not yet shown the Committee its organogram, as it committed previously.

Ms Mahlatsi mentioned that the audit outcomes for both DALRRD and CRLR illustrated that expenditure did not translate to improved performance within either. Following this, she asked how many Senior Management Service (SMS) members had signed performance agreements with DALRRD, considering its poor performance, and if so, whether bonuses were paid through the Performance Development Management System (PDMS). If it was the case, she asked how much had been paid.

Thereafter, she posed three questions. One, she asked for an action plan on irregular, fruitless and wasteful expenditure; and that it include a list of the offenders in the Department and those who have repaid monies lost. 

Two, referring to the Department only finalising 108 labour tenant applications out of 1000, she asked why it had set such a high target if it could only accomplish a 10.8% success rate.

Three, she how many trainees was currently enrolled in the NARYSEC and other programmes. She was concerned by the low number of individuals enrolled in the programme, particularly as the majority of the population comprised the youth.

Afterwards, she expressed her disappointment with the Department’s failure to: spend the total R853 million allocated to the PESI programme; achieve a 100% performance in servicing invoices within 30 days to contractors; provide support through its various programmes; spend its total budget allocation for the year under review, as several farmers and owners of Small, Medium and Micro-Enterprises (SMME) faced serious challenges in remaining sustainable for the future.

The Chairperson said that it was disheartening for the Committee to hear that DALRRD had returned unspent funds back to the National Treasury, especially with the plight of farmers in the country. This gave the impression that the Department was uncaring and did not consider the difficult position farmers, particularly small-scale ones, faced. As a result of this observation, the Committee had to consider ways to ensure that the Department was held accountable. Nonetheless, he was pleased that Members across all parties had come together to express concerns regarding these issues.

After this, he posed a series of questions. One, he asked if the Department had a plan to address AIHA's failure to conduct reconciliation, as per the agreement with the AG.

Two, after expressing the Committee’s concern with the decline in the Department’s performance on the finalisation of labour tenant claims (in 2020/21, it managed to finalise 400 applications but this dropped to 108 in 2021-22), despite the appointment of a special master for labour tenants, he asked why this was the case.

Three, he asked how far the Department was in withdrawing the Agricultural Produce Agent (APA) Amendment Bill, as per the Minister’s communication, in September of its decision to do so.

Four, he asked what the status of the Special Investigating Unit’s investigation, commissioned by the President in July 2019, into the mismanagement of the comprehensive agricultural support programme, was.

Five, he asked that the Department provide a progress report on the integration of: the Comprehensive Agricultural Support Programme (CASP), one household one hectare, river valley catalytic, land care, animal and veld management, blended finance, black commercialisation, land development support programmes – which was recommended by the Committee after the merger of the two former separate departments. Further, he pointed out that the Committee had not received detailed reports on these programmes as promised by the Department during the meeting held on 6 September 2022.

While he noted that the CRLR had sought to ensure alignment between the Restitution of Land Rights Act (RLRA) and the PFMA on the submission of annual reports, he suggested that the Commission continue to comply with the law in submitting reports to Parliament until the Act was amended. 

Ms Sadiki explained that most of the balances of irregular fruitless, and wasteful expenditure related to historical transactions conducted in the two former separate departments. For the past two FYs, the department, she indicated, has requested National Treasury to condone and write-off the R140 million transaction that was deemed to be irregular expenditure, as DALRRD had received the deliverables from the service provider: it was classified as irregular expenditure because the contractor falsified his/her Black Economic Empower (BEE) status and Value Added Tax (VAT). DALRRD conducted a forensic audit to establish how the tender was allocated in the face of such irregularities.

Irregular expenditure increased by R2.4 million for the year under review, due to DALRRD’s signing into an extended contract in the prior FY that did not meet the local content requirements. It was deemed irregular because the department had not reported on this fact.

Fruitless and wasteful expenditure increased by R32 000, which was mainly due to an accumulation of interest. Once identified, the official responsible would be expected to repay the monies owed. However, she pointed out that one transaction, amounting to R26 million, made up the bulk of the Department’s fruitless and wasteful expenditure.

Responding to the question on support provided to farmers affected by the locust outbreak, she indicated that DALRRD’s records showed that all service providers were paid during the previous outbreak, but some were paid late, mainly due to the submission of incorrect invoices and not uploading their bank accounts on the Central Supplier Database (CSD).

She clarified that no performance bonuses had been paid to SMS officials, as this system had been done away with across the public service. If any bonuses were paid, they would have been from prior periods.

Regarding the Department’s action plan on irregular, fruitless and wasteful expenditure, she indicated that it had provided the Committee with the audit action plan and a register of the expenditure.

On how FPSU contractors were appointed, she explained that the Department followed the usual supply chain process and its own policies on how to contract services, both of which are in line with the PFMA, Treasury regulations and Section 217 of the Constitution.

Responding to the question of who within the Department executed the recoveries, she mentioned that the Department had a small section of debtors who are responsible for monthly collections. She clarified that most of the debts were old ones that DALRRD handed over to a debt collection company, which it will only pay if it successfully retrieves the debt.

Referring to the question on the Department’s contingent liabilities and claims, she said that the R2 billion was related to the non-finalisation of restitution claims. The Department had a register of all claims and contingent liabilities, which it could provide to the Committee.

Touching on the Department’s failure to achieve its target for the payment of invoices within 30 days, she stated that the DALRRD usually achieved between 97% to 100% for this target. In August this year, it managed to reach 100% performance. Some of the delays include disputes between service providers, or the unavailability of officials in DALRRD’s offices, as they may be visiting construction sites. However, she added that the department was committed to consistently achieving 100% performance for the target going forward. 

Regarding the difference between the APR and financial performance, she agreed that the variation of 59% and 93% was too significant. As a result, the Department had to return some of the money back to the Revenue Fund. To give the Committee a clearer picture, the Department would look to separate the service delivery budget from the items aligned with non-financial performance. 

As part of its signed protocol with the AG, the Department met with the AG prior to the audit and discussed matters related to the areas where it received qualifications. Implementing an M&E system would be difficult due to its high costs, which, as the National Treasury advised, may require that money be redirected from programmes. Nonetheless, the Department planned to conduct a cost/benefit analysis on developing an M&E system. 

On the verification of PESI beneficiaries, she indicated that verifying all farmers who received vouchers would be difficult for DALRRD, as some verifications were done before the approval of applications. 

While she admitted that the decline in the quality of the Department’s AFS was disappointing, she highlighted that there had been an improvement during this FY, in document management; and the prevention and detection of IFW expenditure. There was, she conceded, still room to improve, and this will be done through a rigorous review of the AFS by internal audit. At the same time, a process is underway to appoint a technical review which will also look into the quality of DALRRD’s AFS.

Mr Mokotule Kgabokoe, Acting DDG: Corporate Support Services, DALRRD, referring to the question on how DALRRD viewed its poor performance, mentioned that results from the 2022-23 1st Quarter Report showed an upward trajectory for DALRRD in the future. This, he stressed, had illustrated that DALRRD had in fact learned several lessons from its challenges and corrected its targets and technical performance indicators, as it recognised that they were unrealistic. Since then, planning tools, which are to be used in each programme, have been introduced. He assured Members that the standard set for the 2022-23 1st quarter would be maintained and eventually exceeded.

He agreed that the performance in Programme 3 was poor, even though it received the majority of the  budget – this was due to poorly constructed targets.

On whether the Department had been selective in implementing consequence management, he assured Members that DALRRD disciplined all officials charged for wrongdoing, and a detailed report could be submitted to support the claim: which would include the name of each official, the type of misconduct they were involved in and the progress in handling each disciplinary case. He informed Committee that DALRRD did have a unit, named Employee Relations, that was entrusted with the execution of disciplinary matters but it realised that it was not properly capacitated with the correct skills. To remedy this, the Executive decided to outsource the functions. A report on who has been outsourced could be provided to the Committee.

Misconduct cases had substantially increased after the merger of the two former departments. From time to time, the Department has referred such cases to its Forensic Investigation Directorate (FID) unit, which functions alongside internal audit. Once an investigation is finalised, recommendations are made and approved by the DG for implementation, while the ensuing evidence is retained. He indicated that a report on this Directorate could be shared with the Committee.

Each disciplinary case was linked to non-performance but the Department exercised caution on the extent to which it shared cases: this depended on the stage of each case. All disciplinary cases should be done according to procedures, to not jeopardise the cases. 

Thereafter, he confirmed that the Department had established its farmer register and plans were underway to ensure that it is updated regularly. It is a fully-fledged key indicator and resources will be required to maintain it, with R200 million having already been spent. However, where the register would be situated was still to be determined – though a process is underway to identify which entity will administer it. 

He requested that the question on the former CFO be answered by the DG, as the matter was still Sub judice. 

Responding to the question on when the Department planned to fill its vacancies, he explained that after DALRRD was merged on 1 April 2020, which required the placement of officials on the new macro start-up organisational structure, in line with Resolution 1 (which was implemented in 2019). This, he stressed, was a tedious process that included consultations and comparing the skillsets of officials with the job requirements and functions.

Once these officials were placed in June/July 2021, the Department was able to advertise the vacant positions and fill them, starting with senior managers, he said. To ensure transparency and fairness, the Department had to form a structure which included union representatives and the Department. Since then, the filling of vacancies was underway, but there have been delays due to the personnel suitability checks that a recommended candidate has to undergo; although a company has been appointed to assist with this function. A report containing details on the vacancies filled could be provided to the Committee, he mentioned. 

Regarding the question on the number of SMS members that have signed performance agreements, he highlighted that 92% had done so thus far. Those that failed to do so are guilty of misconduct and disciplinary processes have been initiated against them. The same approach was applied to those who did not declare their financial interests – which is a gross violation.

Referring to the question on EPMDS payments, he pointed out that these were stopped after the DPSA announcement to do so.

Regarding the payment of invoices within 30 days, he said that the Department had made tremendous progress on this target during the 2022/2023 FY.

He confirmed that the Department had achieved an unqualified audit opinion for non-financial performance.

Mr Nasele Mehlomakulu, DDG: Food Security and Agrarian Reform, DALRRD, referring to the intake of the NARYSEC programme, reminded Members that the announcement to roll out the programme was not accompanied by a budget. Therefore DALRRD had to find money internally to fund it (a letter was also written to National Treasury to obtain funding). An advert for appointment on short-term contracts – as it had not yet secured the funds for three years – would be issued in the coming days. However, the Department would continue to look for funds to appoint 4500 trainees.

The Department did have a database of the farmers that received a voucher and their details have been stored: the details of farmers who received from the Covid-19 Relief Fund. A decision to migrate to a digital system to administer the vouchers was taken because of the issues faced with the roll-out of the Covid-19 Relief Fund. Applications for the voucher were made through a USSD code with the assistance of Vodacom, while the department conducted the verification process, which included assessing whether the applicant was a deserving farmer, through an inspection by Department officials. A service provider was then appointed to provide their input on the application. This was described as the first call (or phase) of the roll-out.

However, several challenges were encountered during the first call, such as the delay in payments. Thus, a decision was taken to initiate the second call, which utilised middlemen to distribute the voucher and a 20% mark-up provision was made. Though this brought on new challenges, until the department halted the distribution of vouchers indefinitely.

To remedy these issues, a review of the system was established and meetings with industry players in the production input supply ensued. Agro-dealers were informed that they needed to form part of the system. This was agreed upon, and the agreements with the middlemen were subsequently terminated. Presently, DALRRD has 450 service points across the country and farmers are now able to obtain goods for the shelf price.

Through the transversal National Treasury contract, the Department managed to utilise Vodacom to administer the USSD code. Vodacom was responsible for issuing vouchers and effecting payment to agro-dealers once invoices were received. Vodacom, on a monthly basis, provides the Department with reports on the interest generated, all of which is deposited into its dedicated account for DALRRD. 

All records of invoices with the items sold have been submitted to the AG. Farmers' details are included on those invoices, which are uploaded to the database. Service providers, through the middlemen, tried to take shortcuts in uploading this information and this was picked up by the AG, who felt that the system was unreliable. Following this, the Department actioned its own M&E system, and then conducted a 123 survey, where some beneficiaries were visited randomly, he said. 10 000 samples were generated and then submitted to the AG but rejected them, indicating that it could not prove that all farmers had received their product. 

Due to this, the Department would have to redo the verification process, which it believed would outweigh the amount paid per voucher to each farmer. It had since developed an action plan to deal with this issue, but it wanted to meet with the AG before it executed it. Moving forward, the Department has enhanced internal controls and instructed Vodacom that payments should only be effected once the farmer signed the invoice. Whereas previously, payment was effected irrespective of whether an invoice was signed or not. Officials have been assigned to each agro-dealer in the country, and they receive an update twice a week from Vodacom on progress made.

Touching on the capacity of the LDS, he said that one of the issues was the built environment, as the Department used commodity organisations that performed poorly in providing infrastructure support. As a result, the Department sought to contract a new institution, and this process is at an advanced stage. In addition, DALRRD was also reviewing its agreement with the commodity organisations, and it has obtained advice from legal services on how to deal with that issue. 

Mr Terries Ndove, DDG: Land Distribution and Tenure Reform, DALRRD, referring to the question on the CPAs, explained that it was commonly agreed that the associations posed a threat to land reform. As per the CPA Act of 1996, CPAs are supposed to be the vehicle to hold land on behalf of communities, for land reform purposes. However, due to the challenges faced, the Department decided to initiate a review of the Act. 

While CPAs are statutory entities, the Department has a role to play in their functioning, which is: assisting in the drafting of their constitutions; their registration; the issuing of the registration certificate; and dispute resolutions, usually done through reconciliation; initiating members in the inner workings of governance. However, the managing of the CPAs rests with the members, as per the Act. The DG had the power to place a CPA under judicial administration if the members reported that it was dysfunctional. 

Regarding the progress made on the CPA Amendment Bill, he confirmed that it had been finalised and sent to the President for his approval. Following an engagement with the Inter-Ministerial Committee, it was agreed that the Department continue to manage CPAs as it has been over the years. Furthermore, based on the outcome of the Department’s discussions with stakeholders on the role of CPAs, the current Bill may have to be withdrawn so that the new input could be incorporated.

Referring to the question of why the Department had set a high target for the finalisation of labour tenants, he mentioned that DALRRD recognised that some of its indicators were the source of the problem.

Touching on the decline in the finalisation of labour tenant applications, despite the presence of the special master, he indicated that the special master’s contract stipulated that all labour tenant claims were to be finalised within five years – and the targets were based on this. DALRRD, he admitted, did not take into consideration that there would be initial difficulties in completing the programme, which included a lack of cooperation from landowners, with some rejecting the claim, leading to the matter being referred to court. Even if a claim is accepted, a claimant may still reject a monetary offer from the OVG, leading to the claim being referred to court. Referrals thus also contribute to delays in the finalisation of the claims.

He added that efforts were underway to enhance the quality of the claims so that the chances of success in the courts were higher.

On whether the Department engaged with the OVG to look at the reasons for the rejections by landowners, he confirmed that it had and did so regularly. One challenge though was the Department’s inability to contest the OVG’s evaluation of the land, which may sometimes be lower than what the owners would accept.

Referring to the question on whether the inclusion of Special Master had added value to the OVG, he said that it had but there are still issues which fall outside what the Master and the Department can do. Neither the OVG nor the Department did not believe that appointing a private company was necessary to trace claimants that cannot currently be found if both were unsuccessful in tracing. 

Touching on the question related to the amendment of the Labour Tenants Act, he said that the Special Master and Department had discussed the matter and were looking to involve organisations representing labour tenants. However, there were two challenges to possibly opening up the lodgement of labour tenant claims. One, DALRRD remained cautious because of prior experiences with land restitution. Two, the government’s responsibility is to ensure the security of tenure rights.

Regarding the allocation of land to women, youth and PWDs, he indicated that in the meeting held in September, he said that because the Department acquired increased land in the 4th Quarter of the year under review, past the deadline, it was unable to distribute much of it to women, youth and PWDs. 

On the suggestion that the Department consider providing basic services to labour tenants, he mentioned that DALRRD had been asked to explain what plans it had in place to resolve the service delivery challenges faced by labour tenants, particularly as a court ruled that basic services are the sole responsibility of municipalities. As a result, DALRRD opted to develop a programme that addresses the lack of tenure security and basic services faced by labour tenants, which it sought to implement alongside municipalities. Apart from that, DALRRD was working with the South African Police Services (SAPS) on issues related to the safety of rural communities. 

Ms Thandi Moyo, DDG: Rural Development, DALRRD, highlighted two reasons for the slow pace in the delivery of infrastructure projects. One is the slow pace of contracting service providers, which ranges from 6-18 months. Two is the limited number of staff with experience in infrastructure across the provincial offices: for instance, the office in KwaZulu-Natal had three officials, who are expected to oversee 50 projects; while the North West only had one official. The Department was working on solving both issues, he said.

Responding to the question of who was to blame for contractors leaving their sites before completing the project, she stated that the capacity of the contracted service providers was weak. In some instances, service providers who have been contracted will complete 50% of the project and then run out of funds or plead that there was a shortage of construction material available; whilst others are found to be conducting multiple projects, and do not have the capacity to complete the one commissioned by DALRRD.

To prevent the continuation of these issues, the Department has enforced penalties in the service-level agreements (SLA), such as the withholding of payments, the 10% retainer and, as a last resort, taking legal action. However, the problem was this often led to the discontinuation of construction work, requiring the re-advertisement of the tender.

Other reasons affecting the roll-out of infrastructure projects included National Treasury’s moratorium to procure any services worth more R30 000 and the delays in signing SLAs with implementing agents. To address some of these things, the Department appointed a panel of service providers for three years, who have assisted with, amongst other things, the provision of boreholes and fences. Presently, DALRRD was involved in discussions with the Construction Industry Development Board (CIDB) on whether they could jointly provide supplier development programmes, particularly for SMMEs contracted to work for it.

Rural development was a concurrent function between the Department and its provincial counterparts. DALRRD was currently in discussions with its provincial departments to form partnerships on the planning and implementation of infrastructure projects.

On NARYSEC, she indicated that in March of this year, the Department approved a revised policy, which would look into the Committee’s recommendation that the programme focus on providing trainees with skills relevant to the Agriculture and Agro-processing Master Plan. The policy also advocated for: a reduction in the entry qualification from grade 12 to 9, taking into consideration that many youth in rural areas did not make it past the latter; increased cooperation between DALRRD, traditional authorities, provincial departments as well as district and local municipalities.

The central aim of the policy was to recruit and link the youth to job opportunities or to enable them to open their own agricultural enterprises. This represented a shift from how the programme has been run thus far. Traditional councils have been consulted in an effort to better allocate land to beneficiaries of NARYSEC. Thus far, traditional councils, particularly in the North West, KZN and Limpopo, have responded positively to this initiative.

While she admitted that there was a reduced intake of trainees in the year under review, she was pleased that the recent class of trainees had been trained in maintenance, electrical studies, water and waste management, and other areas related to agriculture. Presently, the Department was focused on including training on business management, infrastructure development, operations and finance, as it recognised the importance for those who choose to run their own enterprises. To accommodate these changes, teaching skills such as road traffic and law enforcement management was reduced.

677 NARYSEC trainees were expected to pass from their leadership development programme from the army, in Gauteng and the Western Cape, on the 24th and 27th of October. Certain municipalities, that the Department has partnered with to train the intakes, planned to assist them in securing jobs.

Emphasis on the current intake, which started in July, is focused on animal and plant production. Those recruited for the 4th Quarter of the 2022/23 FY would undergo training in agriculture and agro-processing commodities and artisan training on maintenance. The Department was willing to submit details on where the intakes have been trained and how many obtained job opportunities after their training.

Ms Kwena Komape, DDG: Economic Development, Trade and Marketing, DALRRD, referring to the department’s performance indicators, explained that the Department failed to meet its target on bilateral engagements and others because of the varied number of variables: for instance, the marketing of the Agricultural Products Bill could not be achieved, as the Department was dependent on other parties to achieve the target. The Department would consider some of these issues when it crafts its performance indicators for the next FY.

Touching on the question related to the APA Amendment Bill, she stated that many of the issues raised during the tabling of the Bill were raised by the APA Council. Presently, the Department was exchanging notes with the Council, in an effort to agree on what text should be placed in the revised Bill. At some point, the directorate responsible was invited to join Council members at the harbour, to gain an understanding of how they go about conducting their work. Once the text had been agreed to, the Bill would move to the next phase.

Mr Mooketsa assured Members that the Department understood that their criticism was aimed to hold it to account, so that it improved its performance. Notwithstanding its faults, DALRRD was committed to improving in all areas, to make South Africans proud. Many of the issues faced by the Department also bothered him, he admitted, particularly the dishonesty and lack of integrity displayed by certain officials; even so, DALRRD was committed to promoting transparency, and committed to looking into correcting the irregularities.

Regarding UIFW, he indicated that most of this expenditure was historical and was due mainly to poor accounting standards and would continue to reflect in future FYs. A number of cases have been referred to the Department’s forensic unit and the SIU for further investigation. In addition, he was certain that the number of disciplinary cases would rise after the conclusion of these investigations.

Touching on the Department’s performance, he reminded the Committee that during the presentation on its 4th Quarter report, the Department indicated that it had filled most vacancies in executive management, with the position on Agricultural Production, Biosecurity and Disaster Management the only one outstanding. Now that the officials were employed on a full-time basis, he was empowered to take action against those found not to be performing, whereas he could not previously, as many were employed on an acting basis.

Responding to the question on the former CFO, he stated that, based on the information it had, the Department reserved its right not to comment until the requisite processes reached finality – also to not taint the case.

On what would happen to expired PESI vouchers, he requested assistance from the Committee on what solution the Department should take to resolve the matter.

Regarding land allocation, he admitted that he found it easier to provide a financial package for those leasing land that would be reallocated to claimants, which was in line with the beneficiary selection and land allocation policy approved by Cabinet in 2020. Therefore, he felt that this was the right approach.

Referring to the question on the question related to the Barolong boo Ratshidi CPA, he explained that the Department was still working on providing the association their allocated land.

Touching on the question related to the location of AECI branches, he mentioned that he would take this issue up with his colleagues.

Discussions were held between him and the Minister on farm fires. They both agreed to engage the Department of Forestry, Fisheries and the Environment (DFFE) because the National Veld and Forest Fire Act rested with them, whilst its implementation lay with DALRRD. An amendment Bill to the Act was tabled in 2021. Besides that, both he and the Minister will continue their engagements and stand ready to respond to the current disaster unfolding.

On how the Department planned to provide market access to farmers, he highlighted that the Department had opened new markers in China and the Philippines for farmers, while a memorandum of understanding (MOU) is to be finalised soon.

Regarding the engagements with the EU, he stated that the Department could not elaborate on the consultations it was engaged in with the Union regarding the citrus dispute, due to a non-disclosure condition. However, he was able to inform Members that there was a possibility that senior officials from both DALRRD and the Department of Trade, Industry and Competition would meet with their EU counterparts in the following week, to resolve the citrus dispute. After the meeting, both Ministers were expected to engage one another.

On the litigation in the Department, he told the Committee that DALRRD had no less than 37 Acts of Parliament, which increased its chances of being sued by dissatisfied clients. Other pieces of legislation had an impact on the Department’s ability to deliver services. As such, it had to ensure that it had an ethical workforce that was capacitated to fulfil its duties and where necessary, be prepared to defend the department’s decisions, considering the culture of litigation in the country.

Unlike Members, he did not believe that the Department faced challenges with the KyD. DALRRD submitted a report that was requested, to Parliament, which outlined the margins a stud breeder made versus a farmer who sold cattle for other purposes. He confirmed that the Department continued to finance KyD, and had no issues with the ARC; however, it noted that it could not continue to draft the ARC’s annual report and believed that rather it added value to one completely compiled by the entity.

During engagements with the AG, DALRRD agreed that both parties could reach a consensus on how to verify the beneficiaries of the programme, which AGSA would look into once completed. An investigation into the programme was delayed but once it was concluded, disciplinary procedures would be taken against those found to be responsible for the irregularities related to PESI.

He thanked Mr Capa for sharing his village’s definition of what food security meant for them and assured him that it would form part of the discussions with Management on how to assist subsistence farmers. 

Referring to the question on the Communal Land Administration Bill, he mentioned that DALRDD responded to this question previously and indicated that engagements with Cabinet on the Bill and its policy, were currently underway. Once Cabinet gave its approval, the process would move to the next stage, where the timelines and policies of the Bill would be outlined. 

He told Members that the Department had, on 23 September, submitted the reports requested by the Chairperson, bar the report on Micro Agricultural Financial Institutions of South Africa (MAFISA), which was due to his dissatisfaction with its quality, as he indicated then; however, it had since been submitted.

The Chairperson indicated that he did not understand the explanation provided on the APA Amendment Bill. He requested that the Department follow the correct processes to withdraw the Bill, which it was aware of, as this was not the first time it had done so. Otherwise, the Bill would continue to appear in Parliament’s programme as an item to complete, and the Committee would be expected to report on it. 

Ms Ntloko-Gobodo, responding to the question on the Commission’s vacancy rate.  The process of filling vacancies was delayed due to the moratorium placed after the merger of the two former departments. Certain posts, where approval has been given, are being filled. Most SMS posts were filled and interviews have been done on the DLCC vacancy.

Regarding the road to autonomy, she said this plan and a business case had been drafted and submitted to the Department. Furthermore, the Commission believed that the interim proposal, which includes the intended structure, would assist it in moving towards autonomy. Nonetheless, the Department still had concerns and as such, has not made the necessary approvals; thus, the Commission remained engaged with the DG and the Minister on how to move forward.

Amending the Land Restitution Act was included in the business case, as the Commission believed it would assist in dealing with some of the current technicalities. Only once the Bill was submitted to Cabinet could the process move to the next stage.

Touching on the Kramer Family Trust land claim, she assured Members that the CRLR continued to communicate with the claimants and it has since agreed to begin allocating the portions of land that it previously approved, as it is challenging the extent of hectares that the Trust claims are valid. A service provider has been appointed to obtain further research into the allegations on the extent of the claim.

Both the Trust and the Commission agreed that once the research was concluded, and there was still no consensus between both parties, the matter would be referred to the Land Claims Court for adjudication.

Responding to the question on whether the Free State could begin processing its new order claims, she acknowledged that the Commission was attending to the outstanding old order claims, to avoid being interdicted by the Constitutional Court (CC). It has since received a legal opinion from Adv Mbuso Majozi on the best approach to deal with the new order claims.

In its order, the CC stated that at the right time, any of the interested and affected parties could approach the Land Claims Court either for guidance on the processing of the new order claims – which was contingent on whether it had concluded with the old order claims, or referred them back to court. Adv Majozi’s opinion suggested that the Commission could identify specific provinces that have finalised all of their old order claims and then look to approach the LCC for direction on whether they could proceed to deal with their new order claims.

A strategic planning session was planned for later in the week, and this matter would be on the agenda. Also discussed in the session was the question raised by the LAMOSA 1 case on concerns raised that old order claimants would be prejudiced if provinces dealt with new order claims before theirs (the budget is currently allocated to resolving old order claims).

In the meantime, the Commission was looking to ensure that it made use of the staff in its Free State offices to assist other provincial offices, which have a high number of claims, such as the Eastern Cape, which currently has many community financial claims.

Regarding the question on Barolong boo Ratshidi, she explained that land was transferred to the community through the CPA but due to conflicts, the remaining land could not be transferred. To find a resolution, the Minister travelled, in March, to meet with the community, and suggested a way forward. The Department would provide the Committee with a report on this engagement.

Ms Francis McMenamin, Director: Programme Management and Admin Support (Finance and SCM)), CRLR, clarified that the Commission submitted its financial statements by 31 May of this year, which were audited in June. If it submitted the annual report in June, then the final version would not contain the AFS. As such, it could only begin drafting its annual report after auditing the financial statements on 1 July.

Ms Ntloko-Gobodo added that the Commission would be guided by the Committee on the best approach to take on the submission of its financial statements, as there remained a misalignment between the Land Restitution Act and the PFMA on this; as the former indicated that because the CRLR was an institution recognised in the law, it had to prepare them independently, whereas the PFMA required that the department draft and submit them on behalf of the entity on 1 June. If this required the Commission to submit its financial statements twice after the AG had completed its work, it would do so.

A process was underway to look at the amendment of the legislation to deal with some of the challenging technicalities caused by the misalignment, she informed Members.

The Chairperson understood the Commissioner’s concern and assured her that the Committee would look into how best to attend to this matter: communication would thereafter be sent through the secretariat once a decision had been taken. 

He confirmed, through the secretariat, that the Department did not, in fact, submit all the reports it pledged during the meeting in September. The Committee had only received reports on the PESI and blended finance programmes. In its communication to the Committee, sent on 23 September, the Department provided written responses on issues related to the BRRR and labour tenants. The outstanding reports were: CASP; One Household One Hectare; River Valley Catalytic; Land care, animal and veld management; Blended finance; Black commercialisation, Land Development Support; Llima-Letsema; and MAFISA programmes.

Furthermore, in response to the Department’s communication, the Committee indicated that the report submitted on PESI was not comprehensive enough, and would not assist it with conducting its oversight. He asked that a new report be submitted alongside the other outstanding ones by 28 October 2022.

Following this, he asked if either the Deputy Minister (DM) or Minister wanted to make any closing remarks.

Ms Zoleka Capa, Deputy Minister of Agriculture, Land Reform and Rural Development, indicated that she would prefer the Minister to make the closing remarks.

Closing remarks by the Minister

Minister Didiza mentioned that the Department would consider all of the issues raised by Members and the AG. She assured the Committee that DALRRD would return and report on its progress. 

The Chairperson said that Members had engaged with the CRLR and the Department’s presentations. He repeated the Committee’s dissatisfaction with the Department’s underspending, believing that this contributed to the plight of young people, particularly blacks, in the agricultural sector. Members would look to advise the Department on how unspent money could be spent on initiatives to uplift struggling farmers.

He thanked all officials present for the engagement and indicated that they would deliberate on the entities’ reports the following day.

The meeting was adjourned.