ATC141024: The Budgetary Review and Recommendations Report of the Portfolio Committee on Rural Development and Land Reform, dated 22 October 2014
Rural Development and Land Reform
The Budgetary Review and Recommendations Report of the Portfolio
Committee on Rural Development and Land Reform
, dated 22 October
2014
The Portfolio
Committee on Rural Development and Land Reform, having considered the
performance and submission to National Treasury for the medium term period of
the Department of Rural Development and Land Reform, reports as follows:
1.
Introduction
In terms of the Money Bills Amendment Procedures and Related Matters
Act, 2009 (Act No.9 of 2009), the National Assemblyis required to conduct
annual assessment of the performance of each national department with a focus
on the medium term estimates of expenditure.
Section 5 of the Act sets out a procedure for
assessing the performance of each national department to be followed by the
National Assembly. This procedure provides for portfolio committees to prepare
budgetary review and recommendation reports (BRRR), which must provide an
assessment of the departments service delivery performance given available
resources; must provide an assessment of the effectiveness and efficiency of
the departments use and forward allocation of available resources; and may
include recommendations on the forward use of resources.
This report, therefore, accounts for work carried out by the Portfolio
Committee on Rural Development and Land Reform (the Committee) when it assessed
the performance of the Department of Rural Development and Land Reform (the
Department) and related public entities. It further makes specific recommendations
for budget review and improvement of service delivery.
1.1
The
mandate of the Portfolio Committee on Rural Development and Land Reform
TheCommittee, as an extension of the National Assembly, is governed by
the rules of the National Assembly to oversee the portfolio of rural
development and land reform. Explicably, it oversees the work of executive and theDepartment
of Rural Development and Land Reform whose mandateis transversal; that is, to
create and maintain an equitable and sustainable land dispensation and act as a
catalyst in rural development to ensure sustainable rural livelihoods, decent
work, and continued social and economic advancement of all South Africans.
Furthermore, the Committee oversees the work of the public entities and
commissions reporting under the Department; namely, the Commission on
Restitution of Land Rights (the Commission) established in terms of the
Restitution of Land Rights Act, 1994 (Act 22 of 1994) as amended, and the
KwaZulu-Natal the Ingonyama Trust Board established in terms of the
KwaZulu-Natal Ingonyama Trust Act, 1994 (Act 3 of 1994) amended by the National
Act 9 of 1997. The Committee, thus, considers and processes legislation from
the Department and its entities, exercises oversight on implementation of the
various programmes of the Department and related entities, facilitates public
participation, considers budget votes, enquires and makes recommendations about
any aspect of the Department, including its structure, functioning and policy.
The Committee exercises its powers within a legal framework of the
Constitution, relevant statutes and the Rules of the National Assembly.
1.2
The
Department of Rural Development and Land Reform
The Department derives its mandate from
priorities of government, as obtained from the National Development Plan and
articulated through the Medium-Term Strategic Framework and 12 Outcomes of government.
It coordinates implementation of Outcome 7: Comprehensive Rural Development
and Food Security for All.Concomitant to the outcome, the outputs for this
Department are sustainable agrarian reform with a thriving farming sector,
improved access to affordable and diverse food, improving rural services to
support livelihoods, improved employment and skills development and enabling
institutional environment for sustainable and inclusive growth.
Table
1
: Strategic Outcome Oriented
goals
Programme
|
Strategic Goal
|
Strategic Objective Statement
|
Administration
|
-
Corporate governance and
service excellence
-
Reformed policy, legislative
and institutional environment
|
-
Sound
corporate governance and service excellence through compliance with legal
framework achieved by 2014
-
Reformed
policy, legislative and institutional environment by 2014
|
Geo-spatial and cadastral services
|
-
Spatial equity
-
Job creation and skills
development
|
-
Integrated
land planning, spatial information and administration system to promote an
equitable, sustainable land use and allocation by 2014
-
Skills
development and sustainable economic opportunities created by 2014
|
Rural Development
|
-
Effective land planning and
administration that is biased toward rural areas
-
Integrated institutional
arrangements for effective cooperative
governance andstakeholder participation by 2014
-
Sustainable agrarian reform
-
Improved food production
-
Rural livelihoods
-
Job creation and skills
Development
|
-
Integrated
service delivery facilitated through the coordination of government and
development by stakeholders by 2014.
-
Recapitalisation
and development support provided to land reform beneficiaries and rural
communities by 2014.
-
Profiled
rural households enabled to improve their food security by 2014.
-
Socio-economic
infrastructure facilitated to improve access to services by 2014.
-
Skills
development and sustainable economic opportunities created by 2014.
|
Restitution
|
-
Settle land restitution claims
and provide settlement support
|
-
Land
rights restored or alternative forms of equitable redress awarded to
claimants by 2014
|
Land Reform
|
-
Sustainable
agrarian reform
-
Job
creation and skills development
|
-
Integrated
service delivery facilitated through the coordination of government and
development by stakeholders by 2014.
-
Strategically
located land acquired and allocated by 2014
-
Recapitalisation
and development support provided to land reform beneficiaries and rural
communities by 2014.
-
Skills
development and sustainable economic opportunities created by 2014.
|
Source: Adapted
from the amended 2011-2014 Strategic Plan and 2013/14 APP of the DRDLR
The Strategic Plan (2011 -2014) of the
Department, read together with its 2013/14 Annual Performance Plan (the APP)
demonstrated the extent to which the Department was aligned to Outcome 7 and
the National Development Plan. Outcome 7 was adopted as the vision of the
Department; that is vibrant, equitable, and sustainable rural communities and
the mission is to initiate, facilitate, coordinate, catalyse and implement an
integrated rural development programme. The vision and mission of the
Department is underpinned by the strategy of agrarian transformation,
interpreted to denote a rapid and fundamental change in the relations (systems
and patterns of ownership and control) of land, livestock, cropping and
community. This strategy aimed toward contributing in social cohesion and
development. In the 2013/14 APP, the Department interpreted social cohesion and
development to mean shared growth and development, full employment, equity and
cultural progress.
1.3
Approach
and methods
In line
with the mandate of the Committee discussed in section 1.1 and section 5 of Act
9 of 2009, the committee carried out its oversight activities and processes whose
end result is this Budget Review Recommendations Report. Thoseprocesses
included the following:
Consideration of
the annual reports was informed by various overarching policy documents such as
the National Development Plan, the Medium-Term Strategic Framework which
outlines the government-wide priorities, major policy pronouncements arising from
the various cabinet makgotla,the State of the National Address,the Budget
Speech, and the Minister of Rural Development and Land Reform Budget Policy
Statements, the 2011-2014
strategic
plans of the Department, the Commission and the Ingonyama Trust Board.
Review of responses to the previous BRRR; consideration
of various reports of the 4
th
Parliaments Portfolio Committee. For example,
the legacy report, oversight visits reports, reports of public hearings and meetings
with stakeholders, a report of the
ad hoc
Committee established to exercise coordinated oversight on redressing the
legacy of the Natives Land Act (1913).
On 10
September 2014, the Committee considered the 4
th
quarter reports
(2013/14) and first quarter reports (2014/15); and further took into
consideration the Management Performance Assessment Report and commitments to
the Outcomes delivery agreements from the Department of Performance Monitoring
and Evaluation;
On 15 October 2014, the Committee received briefing on
annual reports by the Commission, the Ingonyama Trust Board and the Department.
In addition, it conducted an in-depth
analysis
the financial statements and programme performance of the Department, the
Commission, and the Ingonyama Trust Board; and
On 03 September 2014 and 15 October 2014the Committee
was received briefing by the Auditor-General of South Africa on its audit findings
for the Department and the Ingonyama Trust Board. The Committee further assessed
the Departments implementation of remedial actions.
1.4
The
structure of the report
Following this introductory chapter, this
report proceeds as follows:
Section
2:
Provides
an overview of strategic and key policy focus areas. This section sets the
scene for analysis of the performance of the DRDLR, the Commission and the Ingonyama
Trust Board. It examines the extent to which the plans and programmes are aligned
to the current government policy priorities as discussed in 1.2 and 1.3.
Section
3:
Discusses an overview analysis
of financial and non-financial performance recommendations of the previous Committee
for the 2012/13 reporting period. It is thus based on the BRRR of 2013.
Section
4:
Provides an overview and
assessment of financial performance for the 2013/14 financial year. It draws on
the financial statements of the Department and its entity as well as other
reports of the Auditor-General of South Africa.
Section
5:
Assesses the service delivery
in terms of the planned interventions according to the predetermined
objectives, and priorities of the Department. It draws on the reports of the
department and the Committees findings from the oversight visits.
Section
6:
Presents observationsof the Committee
and conclusions thereof. This is the overall assessment and it identifies key
areas for recommendations, both financial and non-financial issues.
Section
7:
Presents recommendations to the
National Assembly.
2.
Key relevant policy focus areas
During the 2013 State of the Nation Address (SONA), President J
G
Zuma, identified inequality, poverty and unemployment as the foremost
challenges confronting South Africa. Directly related to the mandate of this
Committee, he
announced
that government would reopen lodgement of land claims to accommodate those who
missed to lodge land claims by the closing date of 31
st
December
1998, to provide for exceptions to the 1913 cut-off date to accommodate claims
to the historical landmarks, heritage sites and descendants of the Khoi and San
who lost their land rights prior to 1913. The President further announced that
government has put in place mechanisms to fast track land redistribution. Such
mechanisms include curbing the weaknesses of the willing-buyer willing-seller
through an application of the just and equitable principle for compensation
as set out in the Constitution of the Republic of South Africa. The SONA
further articulated particular interventions aimed at youth development,
especially the National Rural Youth Service Corps (NARYSEC) and Rural Youth
Hubs.
The Strategic
Plan of the Department (2011-2014), amended in February 2013, and the 2013/14 Annual
Performance Planthat breaks down the high level priorities,addressed the priorities
of government discussed above. The Committee found that the amendments to the
Strategic Plan were guided by the National Development Plan, the New Growth
Path (NGP) and the Outcomes Approach of government, in particular Outcome 7,
and the various makgotla (2012 and 2013).
In the last two years, some of the major policy and organisational
developments for the period under review included the following:
·
The National
Development Plan recommended alternative approaches to land reform where
District Land Committees should be established and play a critical role in
determining the land needs in particular districts, identification of land
available and collaboration of stakeholders to address those needs.
·
Support of
smallholder farmers, especially in the former homelands, was another major
policy shift in the National Development Plan. In addition, there has been an
intensified policy urge to support rural cooperatives with marketing and
markets and to promote food security.
·
Faster land
reform and hastening settlement of land claims lodged before 1998 have been
singled out as part of the top priorities. In addition, the codification of the
exceptions to the 1913 cut-off date for land claims has been elevated as a
priority.
·
A split of
land reform programme into two distinct branches, namely land redistribution
and development as well as the Land Tenure Reform. This restructuring has
significantly improved the focus on development support through the
recapitalisation and development programme and Animal and Veld Management
Programme, as well as policy development in relation to the land tenure policy,
both the communal land tenure and tenure reform for people living on commercial
farms.
Other
policy priority highlights were:
·
Continuing with the National Rural Youth
Service Corps (NARYSEC) and planning of nine Rural Youth Hubstaking cognisance
of the 23 poorest districts in South Africa;
·
Shortening of the time to finalise claims.
Instead of the willing-buyer willing-seller approach, the Department would pursue
the just and equitable principle for compensation as set out in the Constitution.
It anticipated to curb the challenge of escalating land prices and purchasing
of land at a cost exceeding the actual market value;
·
Amending the Restitution of Land Rights Act,
1994 in order to provide for the reopening of the lodgements of restitution
claims by those who missed the deadline of 31 December 1998;
·
Extending the June 1913 cut-off date to accommodate
claims by the descendants of the Khoi and San as well as heritage sites and
historical landmarks;
·
Providing adequate post-settlement support to
new landowners in order to ensure they sustain productivity of farms acquired
by the state for redistribution.
·
Providing better incentives to commercial
farmers that are willing and capable of mentoring smallholder farmers.
3.
Previous key
financial
and performance recommendations
This section presents an overview of the
Committees recommendations regarding financial and service delivery for the
2012/13 reporting period as tabled in the BRRR of October 2013. It further presents
the responses of the Minister of Finance as per provisions of
Section 7(4) of the Money Bills Amendment Procedure
and Related Matters Act (2009). This Act provides that the Minister of Finance must
submit a report to Parliament at the time of the budget explaining how the
Division of Revenue Bill and the national budget give effect to, or the reasons
for not taking into account, the BRRR recommendations. The section also
highlights the responses of the Minister of Rural Development and Land Reform.
3.1
The recommendations of the 2013 Budget
Review Recommendations Report
3.1.1
Funding
recommendations
In
2013, the Committee had noted that the Restitution of Land Rights Amendment
Bill, 2013 (B35 2013), which was before the National Assembly at the time of
the BRRR processes,would result in the reopening of thelodgement of land claims
once assented to by the President. In addition, it noted that the outstanding
and backlog land claims as well as the commitmentsof R6 billion under restitution
presented enormous financial burden on budget allocation for each financial
year. The commitments implied that the budget allocated for restitution had to
cover increased interests due to court orders that compel the Commission to process
particular payments. As a result, the time taken to finalise the settled land
claims was prolonged. The Committee, therefore, recommended that the Minister
of Rural Development and Land Reform and the Department approach the National
Treasury for additional allocation to cater for commitments. The Committee
further recommended increase in allocation of budget for finalisation of
outstanding and backlog claims by 2014 to give effect to the Presidents call for
hastening the settlement of land claims.
In
view of the National Development Plans provisions for improved land
administration and spatial plan, and further considering that the Spatial
Planning and Land Use Management was signed into law by President in August
2013, and that there was a budget shortfall of R258.3 million for the
implementation of Spatial Planning and Land Use Management Act in 2014/15, the
Committee recommended that more funding should be allocated for implementation
of this Act.
The
Committee recommended that the allocation for the Recapitalisation and
Development Programme be increased. It took into cognisance a need to ensure
that land reform farms were 100 per cent productive as well as strategic goals to
rekindle a class black commercial farmers. The Committee sought to ensure that
the National Development Plans proposals for the development and support of smallholder
farmers received a priority and that there was increased public investment in
this policy area.
3.1.2
Service
delivery recommendations
The
Committee expressed concerns regarding the capacity of the Department to
implement some of its programmes and achieve the targets. It particularly recommended
that the Human Resources Development Strategy be implemented to ensure capacity
development within the Department. It further recommended that implementation
of the strategy should be regularly monitored. Concerning the challenge of high
staff turnover, the Committee recommended that the Department should consider exploring
a staff retention policyfor skilled professionals, especially in fields of internal
audit, policy development, geomaticsprofession and rural development.
Having
regard to the fact that rural development is a transversal function, and
further considering the budget cuts for the 2014/15, the Committee recommended
that the Department should develop mechanisms to enhance its capacity tocoordinate
government interventions in all spheres of government in a manner that foster
the intergovernmental approach to rural development. It further recommended
that the Department should focus on its key mandate but coordinate relevant
sector departments to deliver other services. With regard to rural development,
the Committee recommended that mechanisms for rigorous monitoring of the
National Rural Youth Service Corps programme be put in place to ensure that
rural youth could obtain the needed skills which could be utilised in their
communities.
With
regard to the Ingonyama Trust Board, theCommittee recommended that the Board should
table a report about plans to address the non-compliance with Public Finance Management
Act and the Treasury Regulations, particularly to matters related to what is
referred to as surplus funds. Further, the Committee recommended that the
Board should table a report to parliament about mechanisms and plans to address
matters raised by the Auditor General, especially reasons given for the
qualified audit opinion.
3.1.3
Responses
by the Minister of Finance
The National Treasury shared the sentiments of the
Committee and agreed that once the Restitution of Land Rights Amendment Bill
was enacted, the budget strategy would need to be reviewed. The Minister of
Finance undertook to work with the Department of Rural Development and Land
Reform to address any shortfall arising from the enactment of the Restitution
of Land Rights Amendment Bill. Concerning an increase in the allocation for
restitutionto ensure that land claims lodged before the end of 1998 were
settled by the end of 2014, the Minister of Finance suggested that National
Treasury and the Department should work together to reprioritise funds from
underspending programmes to finance outstanding restitution claims. Therefore,
no additional funding was given for restitution.
3.1.4
Responses
by the Minister of Rural Development and Land Reform
This section provides the Ministers responsesto the
previous BRRR (2012/13). It is organised into eight thematic areas as reflected
in the previous BRRR, mainly focussing on service delivery recommendations.
(a)
Coordination:
The Minister reported that the coordinating function of the Department is
provided for in the CRDP Framework. He further pointed out that the Outcomes
Based Approach of government, through the Delivery Agreements which are in line
with the protocols defined in the Intergovernmental Relations Frameworks Act is
a basis for coordination by the DRDLR. Government has set up coordinating
structures known as Implementation Forum at both technical and executive level.
The Department leads and coordinate Outcome 7. In addition, the CRDP Management
System assists in this coordination.
(b)
Capacity of the Department:
The Minister reported that he welcomed the recommendation
and that its implementation would be done as part of implementation of the
Strategic Plan (2014/15-2017/18).
(c)
Monitoring and Evaluation:
The Minister reported that the Planning, Monitoring and
Evaluation Policy, Framework and Strategy aims to institutionalise planning,
monitoring and evaluation. A project registration dashboard reporting has been
introduced to track project implementation progress and status.
(d)
Enhancing internal control systems and implementation of
risk management strategy
:
The Minister welcomed the recommendation and reported that this recommendation
would be implemented as part of the risk strategy. The Risk Management Unit has
been elevated to a Chief Directorate: Risk and Compliance Management, and a Chief
Director has been appointed.
(e)
Project database
: In 2012/13, the Department has started with development
of an electronic database for land reform projects and beneficiaries.
(f)
Finalising land claims by 2014
: The Minister reported that the Commission would not be
able to finalise claims by 2014 due to the number of claims and the nature of
claims to be processed. The Department was still quantifying the value of the resources
required.
(g)
Faster pace of land redistribution
: The Minister reported that there are institutional
mechanisms being put in place to address this recommendation. The Department
would establish the District Land Committees as proposed in the National
Development Plan, Internal institution innovation include establishment of the
Land Commission, Office of the Valuer-General, and a wide-ranging policy
mechanisms to assist to speed up land redistribution.
(h)
Development of smallholder farming
; The Minister assured the Committee that the MTSF
(2009-2014) developed in collaboration with Department of Agriculture, Forestry
and Fisheries provides for 50 per cent for productive land acquired should be
allocated to smallholders.
3.2.
2014/15 Budget Vote Report of the Committee
During consideration of the Budget Vote for the Department, the
Committee recommended that the Minister should -
Administration
3.2.1
Finalise the extensive
consultation processes on the Green Paper on Land Reform by documenting an overarching
policy that interweaves various policies into a single coherent land policy
within six months of the adoption of this report by the National Assembly.
3.2.2
Ensure that the APPs
targets are realistic and measureable to assist Parliament in conducting its
oversight responsibility.
3.2.3
Reduce the vacancy rate
within the Department with a priority accorded to filling vacant strategic
positions in order to address the challenge of lack of capacity perform on some
of the critical programmes and excessive use of consultants. The Minister
should further report to the National Assembly, within three months of adoption
of this report, about the plans with time-frames to fill the funded vacant
posts and strategies put in place to address high staff turnover in the
Department.
National
Geospatial Management Services
3.2.4
Submit a report about
the targeted municipalities that the Department has planned to assist to
develop the Land Use Schemes within three months of adoption of this report.
This would enable the National Assembly to conduct oversight and track the
progress in relation to the targets set for this programme.
3.2.5
Submita status report
in relation to the Internal Audit Committee recommendation for a forensic
investigation on the e-cadastre project to the National Assembly within three
months after the adoption of this report.
Restitution
(Commission on Restitution of Land Rights)
3.2.6
Ensure that the
Department does not continue to shift allocation for restitution to other
programmes so that the Commission could accelerate finalisation of backlog
claims and settled but not finalised claims. Where shifting and reprioritisation
of funds is unavoidable necessary care should be taken to ensure compliance
with the Public Finance Management Act (Act No 1 of 1999).
3.2.7
Engage the National
Treasury about increase in allocation of funding to finalise land claims lodged
with the Commission by the cut-off date of 31 December 1998. Within six months
of the adoption of this report, the Minister should submit a report to the
National Assembly about the outcome of the engagements, especially requisition
for additional funding allocation to finalise prioritised claims (old claims)
and settlement of new land claims lodged since the reopening of the lodgement
process.
3.2.8
Develop the National
Land Claims register as a matter of urgency to assist the Commission to
prioritise existing land claims lodged by the end of 1998. The Minister should
report to the National Assembly about the plans and time frames for the
development of the land claims register within three months of the adoption of
the report by the National Assembly.
Land reform and
development support
3.2.9
Assess the
Recapitalisation and Development Programme farms, especially those whose five
year funding cycle would be ending at the end of this financial year, in order
to determine if the programme has contributed to creation of sustainable
emerging black commercial farmers. The Minister should submit a report to the
National Assembly within three months after the adoption of this report by the
National Assembly.
3.2.10
Submitperformance plans
on the Tenure Reform component of the land reform programme with clear and
realistic targets and performance indicators within one month after the
adoption of this report by the National Assembly.
Rural Development
3.2.11
Enhancethe monitoring of
the performance of the National Rural Youth Service Corps programme and develop
policy mechanisms for placement of this programmes graduates.
3.2.12
Improve the coordination
of planning and Comprehensive Rural Development Programme interventions to
avoid duplication of services in implementing rural development interventions,
by signing Memoranda of Agreement with various government and non-government
entities, and ensuring alignment with the National Development Plan.
The Ingonyama
Trust Board
3.2.13
Assist the ITB to
address the disjuncture between its core businesses as provided for in law and
its strategic plans to ensure that the Ingonyama Trust Board conduct its
business in line with the purpose for which it was intended. The Minister
should further ensure that the Ingonyama Trust Board submits clear plans and
details about costed activities that it would carry out to support traditional
communities during 2014/15 financial year.
3.2.14
Assist the Ingonyama Trust
Board to conduct a comprehensive socio-economic impact assessment of its performance
and demonstrate how the beneficiaries have materially and socio-economically
benefited from its programmes.
3.2.15
Assistthe Ingonyama Trust
Board to develop policies to address gaps relating to its key programmes such
as Human Resource Strategy, funding of cultural activities, educational awards
and community development. The Minister should report to the National Assembly
within six months after the adoption of this report.
4.
Overview
of financial performance
4.1
Vote allocation and expenditure
trends (2010/11 2015/16)
The
Committees analysis of the budget allocation and financial performance of the
Department over the last five years since 2009/10 financial yearshows that
there have been significant increases in the programmes Administration and National
Geomatics Management Services (formerly known as the Geo-spatial and Cadastral
Services) as illustrated in Table 2 (below). Such increases have been linked to
the implementation of the Comprehensive Rural Development Programme, focus on
the integrated spatial planning and land use management, especially after the enactment
of the Spatial Planning and Land Use Management Act. The dramatic increase in rural
development programme was also linked to the implementation of NARYSEC,
especially between 2010 and 2013. Other major projects in the rural development
programme were: construction of the Dalibhunga Mandela Legacy Bridge in the
Eastern Cape, roll out national fencing scheme, establishment and registration
of cooperatives and rural enterprises. Analysis of the overall budget shows
that 79.1 per cent of the entirebudget over the medium term went to rural
development, restitution and land reform as national priorities.
Table
2
: Expenditure estimates for the
DRDLR
Programme
|
Audited outcome
|
adjusted
appropriation
|
Revised
estimates
|
Average Growth
rate (%)
|
Expenditure/total
average (%)
|
Medium-term
expenditure estimates
|
Average Growth
rate (%)
|
Expenditure/total
Average (%)
|
||||
R million
|
2010/11
|
2011/12
|
2012/13
|
2013/2014
|
2010/11-2013/14
|
2014/15
|
2015/16
|
2016/17
|
2013/14-2016/17
|
|||
administration
|
686.6
|
934.4
|
1 103.4
|
1 189.8
|
1 189.8
|
20.1
|
11.7
|
1 169.7
|
1 241.2
|
1 317.6
|
3.5
|
12.6
|
National Geomatics
|
371.7
|
583
|
548.4
|
794.7
|
794.7
|
28.8
|
6.9
|
774.9
|
826.5
|
877.8
|
3.4
|
8.4
|
Rural Dev.
|
360.5
|
786.3
|
1 075.6
|
1 792.4
|
1 792.4
|
70.7
|
12
|
2 011.6
|
2 006.1
|
2 226.2
|
7.5
|
20.5
|
Restitution
|
3 766.8
|
2 376.3
|
2 865.7
|
2 916.8
|
2 916.8
|
-8.2
|
35.6
|
2 680.7
|
2 661.4
|
3 258.5
|
3.8
|
29.4
|
Land Reform
|
1 937.2
|
3 317.8
|
3 326.5
|
2766
|
2766
|
12.6
|
33.9
|
2 818.4
|
2 839.3
|
2 993.1
|
2.7
|
29.2
|
TOTAL
|
7 122.9
|
7 997.7
|
8 919.6
|
9 459.7
|
9 459.7
|
9.9
|
100.0
|
9 455.3
|
9 574.5
|
10 673.3
|
4.1
|
100.0
|
Change to 2013 budget estimates
|
-
|
-
|
(450)
|
(700)
|
(170)
|
Source:
National Treasury (2014) Estimates of National Expenditure, Budget Vote 2014
(Vote 33)
4.2
2013/14 financial performance of
the Department
As indicated in Table 3 (below), the Department was
allocated a budget of R9.459 billion and spent R9.454 billion or 99.94 per cent.
As a result, by the end of the financial year, the Department had an under
expenditure of R5.684 million or 0.6 percent of the total budget. According to
the Department, this under expenditure resulted fromthe accruals (commitments
on goods and services, as well as machinery and equipment) that could not be
translated to expenditure at end of the financial year. However, it should also
be noted that the National Treasury reported that the under expenditure R5.7
million was a result of under-spending in the programme of National Geomatics
Management Services mainly due to delay in the implementation of Spatial Land
Use and Management Act.
Table
3
: Appropriation and expenditure
for 2013/14
Programmes
|
Final Appropriation
R000
|
Budget Expenditure
R0000
|
Over/under Expenditure
R000
|
Budget Expenditure per cent
|
Administration
|
1 268 553
|
1 267 482
|
1 071
|
|
Geospatial/Cadastral
|
787 113
|
785 869
|
1 244
|
99.84
|
Rural
Development
|
1 704 840
|
1 701 643
|
3 197
|
99.81
|
Restitution
|
2 836 851
|
2 836 703
|
148
|
99.99
|
Land Reform
|
2 862 383
|
2 862 359
|
24
|
100.00
|
Total
|
9 459 740
|
9 454 056
|
5 684
|
99.94
|
Source: Adapted from DRDLR (2014) Annual Report 2013/14
During the 2013/14 financial year, expenditure on goods
and services increased to R2.175 billion, almost doubled when compared to that
of R1.398 billion in 2012/13. Its original budget R1.375 billion which was
increased by R782 million to R2.157 billion as a result of emerging priorities arising
from the SONA and the Ministers Budget Vote Speech for 2013/14.
Huge increases in expenditure for administrative fees, travel and
subsidies, venues, facilities, as well as training and staff development played
an important part in the increasing expenditures. Notable increase was on the
expenditure for training and staff development, which increased from R20.995
million in 2012/13 to R109.003 million in 2013/14. Similarly, the cost for
travel and subsistence doubled from R321.24 million in 2012/13 to R790.962
million in 2013/14.The total amount paid for consultants slightly increased
from the R441.419 million in 2012/13 to R500.794 million in 2013/14;
Whilst the fruitless and wasteful expenditure declined
from R35.678 million in 2012/13 to R5.417 million in 2013/14, irregular
expenditure has increased from R5.688 million in 2012/13 to R12.647 million in
2013/14. This poses a crucial question to the sufficiency ofinternal controls
within the Department.
The following paragraphs summarise financial performance
per programme of the Department, including the Commission on Restitution of
Land Rights which is programme 4 (Restitution) of the Department. A summary of
the financial performance of the Ingonyama Trust Board, as a schedule 3A Entity
under the Minister of Rural Development and Land Reform is presented in
sub-section 4.3.
4.2.1
Programme 1 (Administration):
This programme received final allocation of R1.267 billion
including a shifted amount of R78.760 million. The programme spent R1.267
billion of the final allocation, which represents 99.92 per cent. When compared
to spending patterns in 2012/13, where the total expenditure was 99.65 per cent
of the allocated funds, this is an improvement. However, such an expenditure
should be read against the service delivery targets which are discussed in
section 5 of the report.
4.2.2
Programme 2(Geospatial
and Cadastral Services):
Thisprogramme
received a final allocation of R787.113 million.Of this total allocation, R168.753
million was moved from Current Payment to Transfers and Subsidies (R167.225
million) and Payment for Capital Assets (R1.528 million). The programme spent
R785.869 million, representing 99.84 per cent of its budget.
The Department, through this programme,
oversees the Deeds Registration Trading Account which is responsible for the
registration of title deeds. Its main source of funding is fees charged on the
registration of deeds as well as sales of deeds information. During the year
under review, the Deeds Registration Trading Account received a transfer of
R241, 741 million. It was able to spend 100 per cent of the transfers. The
funds were also used to augment the entitys operational expenditure as well as
contributing to the development of the E-cadastre.
4.2.3
Programme 3 (Rural Development):
This programme received a final allocation of about R1.7
billion, including shifted fundsto the value of R87.583 million. It spent 99.81
per cent of that allocation. The under-expenditure of 8.1 percent on transfers
and subsidies to provinces accounts, to a larger extent, for the under
expenditure in this programme.
4.2.4
Programme 4 (Restitution)
:
The work of the
Commission is reported under this programme.
As illustrated in Table 3 (above), the
Commission received a final allocation of R2.8 billion and spent R2.8 billion,
which represents 99.99 per cent of the total allocation. This final allocation
resulted from the adjusted appropriation of R2.9 billion which was decreased
due to a virement of R79.9 million. This R79.9 million was shifted from goods
and services in Restitution Regional Offices sub-programme. When compared to
the expenditure of 99.3 per cent in 2012/13, this suggest that the Commission
has improved on its spending trends. As highlighted before, the financial
performance should be assessed against the service delivery targets and
performance thereof. Section 5 of this report discusses the service delivery
performance.
The
total expenditure included expenditure of R2.2 billion on backlog claims
that were approved, but could not be finalised,during
the previous financial year
.
Of
the total expenditure, R553.8 million (23.72 per cent) was used for backlogs
and R1.7 billion (76.28 per cent) for the settlement of new claims. As a
result, the Commission was able to decrease the total commitments from R6.3
billion to about R4billion.
4.2.5
Programme 5 (Land Reform):
As illustrated in table 3, the final allocation for land
reform was R2.862 billion which included a virement of R114.317 for the Land
Reform Grants sub-programme. The entire budget allocation for this programme
was spent. Within the land reform programme, the Agriculture Land Holding
Account serves as an instrument for acquisition, holding and leasing land to
beneficiaries in terms of the Proactive Land Acquisition Strategy. During the
period under review, the ALHA received the final allocation of R1.697 billion
and further spent 100 per cent of the allocation.
4.3
Schedule
3A Entity: the Ingonyama Trust Board
In
2013/14, the total revenue of the Board was R104, 497,739.00 as illustrated in
Table 4 below. It consisted of R7, 390,749,500.00 (71%) from rental revenue;
R872, 171, 00 (1%) from royalty revenue; other revenue of R20, 475,012.00
(20%); and finance income of R9, 243,061.00 (9%). The approved transfers from
the DRDLR was R7,5 million but a further R7 million funding additional to the
baseline was transferred to the Board. Therefore the total transfer from the
Department was R14, 5million which is about 14% of the total actual budget for
the Board.
Table
4
: ITB Budget allocation and
expenditure (2013/14 & 2012/13)
2013/2014
|
2012/2013
|
||
Actual
budget and
Expenditure
(R)
|
As
% of the
total
revenue
|
Actual
budget and
Expenditure
(R)
|
|
Rental
Revenue
|
73,907,495.00
|
71%
|
43,511,931.00
|
Royalty
Revenue
|
872,171.00
|
1%
|
710,884.00
|
Other
Revenue
|
20,475,012.00
|
20%
|
18,929,712.00
|
Finance
Income
|
9,243,061.00
|
9%
|
8,765,527.00
|
Total
Revenue
|
104,497,739.00
|
100%
|
71,918,054.00
|
Total
Expenditure
|
108,333,581.00
|
104%
|
58,797,196.00
|
Total
Deficit
|
(3,835,842.00)
|
(4%)
|
13,120,858.00
|
Source: Ingonyama
Trust Board Annual Report (2014)
During the
year under review, the Board over-spent is budget by approximately 4 per cent.
This over expenditure/deficit in the total budget was attributed to
depreciation/amortisation, provision of rates payable to municipalities for the
Ingonyama Trust land, increase in the provision for doubtful debt, and loss in
disposal of assets. The Committee observed that the overall budget drivers were
provision of rates payable to municipalities, provision for disbursement of
funds, secretariat administration, depreciation/amortisation, and Board
Members remuneration.
Table
5
: Budget allocation illustrating
ITB revenue and transfers from the DRDLR
Source: Ingonyama
Trust Board Annual Report (2014)
4.4
Financial performance of the fourth
Quarter 2013/14 and first quarter of 2014/15
4.4.1
Department of Rural
Development and Land Reform
Table 6(below) illustrates that by the end of the third quarter of the
2013/14 financial year, the total spending amounted to R7.5 billion,
representing 79.8 per cent of the final 2013/14 appropriation of R9.4 billion.
Spending for the fourth quarter amounted to R1.9 billion, representing 20.1 per
cent of the appropriation, which resulted in a 99.9 per cent overall spending
for the year and leaving a balance available at the end of the financial year
of R5.7 million. The financial performance of 20.1 per cent has been within a
close of the linear target of 25 per cent per quarter. During the first quarter
of the 2014/15, the expenditure was amounted to R2.1 billion, representing
22.4% of the 2014/15 appropriation of R9.4 billion. This represented 2.6 per
cent, or R248.1 million, under-spending when one considers the expenditures
linear target of 25 per cent.
Table
6
: Quarterly Financial Performance
(4th quarter 2013/14 & 1st Quarter 2014/15)
R000
|
2013/2014
|
2014/2015
|
||||||||
Final
|
Spending end Q3
|
%
|
Spending
|
%
|
Total spending
|
%
|
Current
|
Spendingend Q1
|
%
|
|
Administration
|
1 268 553
|
933 269
|
73.6
|
334 215
|
26.3
|
1 267 484
|
99.9
|
1 169 693
|
263 687
|
22.5
|
Geo-spat/ Cad
|
787 206
|
634 183
|
80.6
|
151 686
|
19.3
|
785 869
|
99.8
|
774 865
|
130 708
|
16.9
|
Rural Dev.
|
1 704 760
|
1 243 148
|
72.9
|
458 494
|
26.9
|
1 701 642
|
99.8
|
2 011 619
|
349 989
|
17.4
|
Restitution
|
2 836 838
|
2 306 998
|
81.3
|
529 705
|
18.7
|
2 836 703
|
100
|
2 680 742
|
747 439
|
27.9
|
Land Reform
|
2 862 383
|
2 431 945
|
85.0
|
430 414
|
15.0
|
2 862 359
|
100
|
2 818 386
|
623 881
|
22.1
|
Total
|
9 459 740
|
7 549 543
|
79.8
|
1 904 513
|
20.1
|
9 454 056
|
99.9
|
9 455 305
|
2 115 704
|
22.4
|
Source:
DRDLR (2014) Presentation of Quarterly Reports to the Committee
On administration, the total budget allocated was R1.69 billion, of
which 22.5 per cent was spent. On Geo-spatial and Cadastral services, the
Department spent 16.9 per cent of the allocation of 774 million. This is
below the linear target of 25 per cent of the allocation.
With regard to rural development, 17.4 per
cent of the allocated R2 billion was spent. On restitution the allocation was
R2.68 billion and 27.9 per cent was spent whereas land reform spent 22.1 per
cent of the R2.8 billion allocation. An analysis of the overall financial
performance of the Department shows that the 22.4 percent of the total
appropriation of R9.45 billion was spent. The two programmes that have
contributed to inability to achieve the expenditure linear target of 25 per
cent of the total budget were Geo-spatial and cadastral services and Rural
Development.
With regard to the ALHA, its expenditure amounted to R1.3 billion which represented
79.3 per cent of its R1.6 billion allocation by the end of the third quarter of
the 2013/14. During the fourth quarter, the Agricultural Land Holding Account spent
R348.3 million, or 20.6 per cent of the entire allocation. Therefore, the total
expenditure by the end of the financial year was R1.6 billion as discussed
above, with a balance of R198 000. For the 2014/14 financial year, the total
allocation for transfer to the ALHA amounts to R1.9 billion would be
transferred quarterly. In the first quarter of 2014/15, ALHA spent R160.2
million or 37.3 per cent of the first quarter transfer of R428.9 million.
4.4.2 The Ingonyama Trust Board
Table
7
: Quarterly Financial Performance of the ITB (4th
Quarter 2013/14 & 1st Quarter 2014/15)
2013/14
|
|
|||||||||||||||||
Final
|
Spending end Q3
|
%
|
Spending
|
%
|
Total spending
|
Under / (over) spending
|
%
|
|
||||||||||
|
Economic
classification
|
|
|
|
|
|
|
|
|
|
||||||||
|
Comp of employees
|
5,000,345
|
0,407,086
|
69.4%
|
4,198,970
|
-66.7%
|
14,606,056
|
394,289
|
2.70%
|
|
||||||||
|
Goods and services
|
7,110,850
|
67,138,282
|
117.6%
|
23,392,777
|
-154.5%
|
90,531,059
|
( 33,420,209)
|
-36.92%
|
|
||||||||
|
Interest and rent on land
|
190,000
|
135,000
|
71.1%
|
46,500
|
-66.4%
|
181,500
|
8,500
|
4.68%
|
|
||||||||
|
Building & other
fixed structures
|
750,000
|
1,945,892
|
259.5%
|
613,040
|
-330.1%
|
2,558,932
|
(1,808,932)
|
-70.69%
|
|
||||||||
|
Machinery & Equipment
|
4,050,000
|
3,499,252
|
86.4%
|
522,572
|
-85.7%
|
4,021,824
|
28,176
|
0.70%
|
|
||||||||
|
Software & intangible
assets
|
200,000
|
-
|
0.0%
|
195,760
|
2.2%
|
195,760
|
4,240
|
2.17%
|
|
||||||||
|
Total
|
77,301,195
|
83,125,512
|
|
28,969,619
|
|
112,095,131
|
(34,793,936)
|
|
|||||||||
Source:
ITB (2014) Presentation on Quarterly Report s to the Committee on 17 September
2014
As illustrated in Table 7 (above): quarterly financial performance, by
the end of the third quarter of the 2013/14 financial year, its expenditure
amounted to R83.1 million, representing 107.5 per cent of their 2013/14 budget
of R77.3 million. During the 4th quarter, the expenditure was R29 million, resulting
in total spending of R112.1 million for the 2013/14 financial year, meaning a
R34.8 million over-spending of their budget The Boards financial performance
for the first quarter of the 2014/15 fiscal year amounted to R8.7 million,
representing 13.8 per cent of their R62.7 million budget for the year. The
Board received a total transfer of R17.3 million from the Department for the
2014/15 financial year, which was to be transferred quarterly. No transfer of
funds had been transferred by the end of the first quarter. However, R 6.7
million or 39.0 per cent of the total allocation was transferred in the second
quarter, thus leaving a balance of R10.6 million for the remainder of 2014/15
and was available for transfer.
5.
Overview
of Service Delivery Performance
This
section discusses an overall performance of the Department, the Commission and
the Ingonyama Trust Board. They were assessed against the predetermined
objectives set out in the 2013/14 APP and the relevant strategic plans.
5.1
The Department of Rural Development and Land
Reform
Table
8
: Comparison of non-financial and
financial performance of the DRDLR
PROGRAMMES
|
Non-financial performance
|
Financial Performance
|
||||
Targets
2013/14
|
Targets Achieved
|
Performance Rating (%)
|
Final Appropriation
|
Budget Expenditure
|
Budget Expenditure (%)
|
|
Administration
|
8
|
3
|
37.5
|
1 268 553
|
1 267 482
|
|
Geospatial
& Cad.
|
6
|
3
|
50.0
|
787
113
|
785 869
|
99.84
|
Rural
Development
|
14
|
11
|
78.6
|
1 704
840
|
1 701 643
|
99.81
|
Restitution
|
3
|
3
|
100
|
2 836
851
|
2 836 703
|
99.99
|
Land Reform
|
9
|
5
|
55
|
2 862
383
|
2 862 359
|
100.00
|
Total
|
40
|
25
|
62.5
|
9 459 740
|
9 454 056
|
99.94
|
Source: Adapted from
DRDLR (2014) Annual Report of the DRDLR
As indicated in Table 8 (above),
the Department achieved 25 or 62.5 percent of the total 40 targets planned for
2013/14. About 15 targets or 37.5 per cent of targets were not achieved. In
sub-sections that follow, this report provides details about the contributing
factors to the variances.
When compared to the
previous reporting period, where it only achieved 8 targets or 30.8 per cent,
this performance could be considered as a major improvement. However, there is
still room for improvement, especially when one consider that the Department
has spent 99.94 per cent of its final allocation for the year under review.
With the exception of the programmes of rural development and restitution, service
delivery performance of the programmes of administration, geospatial and
cadastral services, and land reform were too low if comparing the achievement
of 37 per cent, 50 per cent and 55 per cent respectively. However, these
programmes have spent over 99 per cent of their total budget allocations.
Major policy
achievements during the year under review include:
·
Passing of the Restitution of Land Rights
Amendment Bill (B35 of 2013), assented by the President on 30 June 2014. The
Act provided for the re-opening of the lodgement period for land claims for
those who missed the 1998 deadline.
·
Passing of the Property Valuation Bill (B54
of 2013), assented by the President on 30 June 2014. The Act provides for
appointment of the Valuer General who will put prices on the land to be bought
by the State based on just and equitable principle of compensation.
Therefore, Government will be under no obligation to pay for market value.
·
Passing of the Spatial Planning and Land Use
Management Act (Act No. 16 of 2013, SPLUMA). The Act provides, amongst others,
for a uniform, effective and comprehensive system of spatial planning and land
use management for South Africa.
·
The process to codify the exceptions to the
1913 cut-off date for the descendants of Khoi and San, and identifying affected
heritage sites and historical landmarks is ongoing. Work commenced for the
construction of the first youth hub in Beaufort West during the year under
review.
5.1.1
Programme 1 (Administration):
This programme contributes to the two strategic goals of
as outlined Table 1 of this report; namely, sound corporate governance and
service delivery; and reformed policy legislative and institutional environment
by 2014. The key deliverables during 2013/14 included beefing up internal
capacity by reducing the vacancy rate, improving internal controls, finalising
policies and legislation and ensuring provincial coordination with line
departments for better service delivery. Table 8 above illustrates that the
programme achieved 3 of its 8 targets but spent 99.92 per cent of its budget
allocation. Part of the challenges in this programme relates to inability to
reduce the vacancy rate to the public sector accepted levels of 10 per cent.
This challenge is demonstrated by an increases of vacancy rates from 11.4 per
cent in 2011/12, to 16 per cent in 2012/13, and to 18 per cent in 2013/14.
The reasons for this vacancy rate related to
the expansion of the organisational structure which resulted in more vacant
posts, the resignation of 710 employees. One of the vacancies was that of the
Chief Financial Officer, a key strategic position that could assist in
strengthening the internal controls and improved financial management. The
inability to achieve the performance targets could also be linked to weak
capacity of the Department which result from this 18 per cent vacancy rate.
Part of the achievements under this programme was to
ensure that the plans and programmes of the Department were aligned to the
National Development plan. A review of the plans has shown that over 80 per
cent of its Annual Performance Plan was aligned to the National Development
Plan.
The Department achieved 91 per cent of payment of invoices within the
30 days. The reason why 9 per cent of the invoices could not be paid on time
related to changes of supplier details without informing the Department as well
as of VAT by non-VAT registered vendors. Even when the Department attempted to
make payments, they were rejected.
With regard to legislation and policy, the
Department had planned to submit 8 pieces of legislation
and 5 policies to Cabinet in 2013/14. However, it submitted 6 pieces of
legislation and 3 draft policies. Although the Department could not meet its
targets, this performance signifies huge improvement when compared to
performance in development of policies and legislation over the last four
years. The Department also submitted two bills to Parliament instead of 11
bills that were planned for 2012/13.
5.1.2
Programme 2 (Geo-spatial and Cadastral
Services)
This programme is responsible for provision of
cadastral surveys, geodetic and topographical surveys, spatial planning and
information, and technical services in support of sustainable land development.
Some of the key activities included registration of title deeds, development
and implementation of e-cadastre, development of Spatial Development Frameworks
(SDFs) and building capacity through training of geomatics and surveyors. The
programme achieved 3 of the 6 targets planned for the year under review as
illustrated in Table 8 above.
However,
the budget expenditure was 99.84 per cent. Analysis of the individual
performance programme would show that those targets could not be achieved by insignificant
margins. The programme is increasing its performance, especially the
development of spatial plans. It also improved the turnaround time for
processing of registrable diagrams, general plans and sectoral plans, that is,
from an average of 21 days in 2012/13 to 17 days during the period under
review. Provision of bursaries under this programme has begun addressing the
scarce skills challenges, especially in the fields of geomatics profession.
5.1.3
Programme 3
(Rural Development)
This programme implements the Comprehensive
Rural Development Programme (CRDP). It managed to achieve 11 of the 14
performance targets, representing 78.6 per cent achievement as illustrated in
Table # above. The highlights under this programme include:
·
2815
households produce their own food, this exceeded the target of 2200 by
615;
·
5044 jobs
were created through rural development initiatives, this exceeded the target by
1 504.
·
433 rural enterprises
were supported, this exceeded the target of 90 enterprises by 343
·
7 475
households were provided with basic service infrastructure, and the programme
exceeded the target of 7278 households by 197.
The programme could not achieve the target of irrigating
5 000 hectares, instead it only achieved 1 559 ha resulting in a
variance of 3 441. It was also unable to reach its target of training
4 600 youth through the National Rural Youth Service Corps (NARYSEC). Only
1 805 youths were recruited into the NARYSEC. It appears that the focus of the
Department was on ensuring that the existing recruits attained the requisite
levels before they left the programme.
5.1.4
Programme 4
(Restitution)
The Restitution Programme is responsible for
settling land claims in accordance with the provisions of the Restitution of
Land Rights Act (1994), and also provides settlement support to beneficiaries.
Under this programme the
Department achieved all its targets and two of the three targets were exceeded.
For example,
270 new claims were settled against the target of 230 and
292 claims were finalised against the target of 208 claims. Of the 290 claims
finalised, 227 were backlog claims and 65 were new claims.
5.1.5
Programme 5
(Land Reform)
This
programme is responsible for provision of sustainable land reform programmes in
South Africa. As noted earlier, a split of the programme into two branches,
Land Redistribution and Development, and Land Tenure Reform and Administration,
was a major shift signifying an increased focus on development support to
rekindle a class of black commercial farmers as well as up-scaling tenure
policy development and implementation.
The programme
achieved 5 of the 9 targets but spent 100 per cent of its allocated budget
during the period under review. Exceeded the targets of number of jobs created
by 1 038 and the number of farmers trained by 628 should be welcomed. But
greatest concern is around the failure to achieve the target on land
acquisition and the number of farms under recapitalisation. Explicably,
153 586 ha of strategically located land was acquired against the target
of 311 917. The reason given was that the average costs for acquisition of
ongoing concerns were higher compared to average costs for land. Therefore, the
state was using more resources to acquire less hectares, by extension it means
that few people would benefit from the redistribution programme.
With regard
to recapitalisation, the programme could not achieve the target to recapitalise
344 new farms in 2013/14. Instead, it only reached 119 farms through its
recapitalisation and development programme. In addition, it also did not
achieve the target to recapitalise 386 existing farms, but only reached 323
farms.
The Department reported that it
could not achieve the targets because it had to reprioritise the budget due to
changes of mandates within the Department. Notably, in 2012/2013 this programme
did not achieve its target for recapitalisation of new farms by almost half of
the target due to limited financial resources. This raises critical challenges
and questions about increasing the pace of land redistribution, creation of a
class of black commercial farmers, smallholder development, and ensuring 100%
farms productivity.
With regard
to land tenure, the Department achieved its target on the number of labour
tenant applications resolved and also to have 100 per cent of reported eviction
cases referred to the Land Rights Management Facility (LRMF). It actually
exceeded its target on the number of labour tenant applications as it settled
98 claims against the target of 76.
However, it failed on its target to ensure that 100 per cent of reported
eviction cases resolved. Instead 46 per cent of cases were resolved.
6.
Summary
of observations of the Committee
This
section takes into consideration the analysis presented above and summarises
major observations and conclusions, in certain respects, by the Committee.
Those are discussed in thematic areas as follows:
6.1
Technical
Issues
The Committee found
that the plans and reports of the Department were largely aligned to the
priorities of government as outlined in the National Development Plan, and the
State of the Nation Address as well as the MTSF priorities. The Ministers
responses raise important questions for oversight by this Committee. For
example how the CRDP management system, Outcomes Based Approach of Government
and delivery agreements which are in line with the protocols as defined in the
Intergovernmental Relations Framework Act would contribute to enhanced and
coordinated service delivery.
The Committee also noted
the departments improvement in terms of compliance with the
Public Finance Management Act, 1999 (PFMA, Act No.1 of 1999)
regarding
the tabling of the report and the improved quality of reporting when compared
to the previous reporting period. Similarly, it also noted that there has been
a slight improvement in the quality of the reports by the Ingonyama Trust
Board. However, the report to some extent was vague and lacked concrete
information to assess the benefits of investment made by the Ingonyama Trust
Board. The challenge with the Ingonyama Trust Board has been that the accuracy
and reliability of the information presented in the report could not be
established. The Committee further noted that the Auditor-General has made
similar observation.
6.2.
Governance
The Committee observed that there have been
significant
improvements regardingdevelopment of internal control environment. The
Department built on the work that was started in the previous reporting period
by implementing the Risk Management Framework and ensuring that the Fraud Risk
Register is updated. The internal control systems of the Department needed to
be improved by filling the vacancies in the Internal Audit Unit, as well as an
appointment of the Chief Financial Officer. Adding this capacity could have a
positive effect in enhancement of this internal control environment.
The Committee commended
and welcomed that the Department, for the second consecutive year, received an
unqualified opinion from the Auditor General. It further welcomed a decrease in
the fruitless and wasteful expenditure. However, it expressed concerns
regarding an increase in the irregular expenditure within the Department. This tainted
the achievements made to reduce the fruitless and wasteful expenditure. It thus
questioned the effectiveness of the internal control systems.
With regard to the
Ingonyama Trust Board, the Committee observed that its audit remained the same
since 2009/10 reporting period. Its reports are also standard format which do
not change yearly. The Committee was concerned about the contribution of the
internal audit committee of the Ingonyama Trust Board. It further noted that the
audit committee has made particular recommendations, as it usually does, but
the Committee took a decision to have a focussed oversight on the Ingonyama
Trust Board so that it could monitor implementation of those recommendations. A
major concern relating to the Ingonyama Trust Board was the disclosures and
declaration of interests by Board Members. In such instances where Board
Members do business with the Ingonyama Trust Board, the Committee concluded that
it could result in conflict of interest. Of utmost importance is the term of
office for the Board. The Committee observed that it expired a long time ago
but being renewed annually.
6.3.
Service
delivery against the pre-determined objectives
6.3.1
Administration
The Committee noted that of the overall 40 target set out
in the 2013/14 APP, the Department was able to attain 25, and this represented 62.5
per cent achievement. When the Committee compared the performance to the 2012/13
one where the Department had a 30.8 per cent achievement, it concluded that the
Department has improved its performance during 2013/14. Its concern, however,
was that there appears to be a disjuncture between the performance on the
predetermined objectives and the financial performance, especially a spending
of 100% of budget but less achievements on the service delivery targets.
In policy development, there has been a slight improvement
regarding development of bills and policies. However, the Department still
could not meet its target to submit policies and bills to cabinet and
subsequent tabling in Parliament. The tabling of the Restitution of Land Rights
Amendment Bill was a major step forward to give effect some of the major policy
pronouncements arising from the SONA by the State President. The Committee also
noted the responses of both the Minister of Finance and the Minister of Rural
Development and Land Reform regarding the need to increase funding for
restitution.
Based on the review of implementation of the Departments
policy and legislation programme, the Committee noted that there was lack of
capacity to finalise policies on time and this was one of the major weaknesses
in Department. This is also corroborated by the fact that the Department has
still not finalised codification of the exceptions to the 1913 cut-off dates to
address claims by the descendants of the Khoi and San, heritage sites and
historical landmarks. Lack of capacity in the Policy Unit could further hamper
other policies, especially the development of the overarching policy document
as previously recommended by this Committee and the
ad hoc
Committee established to exercise coordinated oversight on
the reversal of the legacy of the Natives Land Act (1913).
An increase in
vacancy rate from 16 per cent in 2012/13 to 17 per cent was a major concern for
the Committee. The Committee was especiallyconcerned because the Department had
still not filled the positions of Chief Financial Officer. In addition, the
fact that there were many people acting in the SMS band, the Committee noted
that this impacted on the performance of the Department, hence inability to achieve
100 per cent of its service delivery targets.
6.3.2
Geospatial
and cadastral services
Whilst the Spatial
Land Use Management Act was accented to by the President, the lack of skills in
this field could still hamper the ability of the country to move swiftly to
address the spatial challenges arising from South Africas apartheid history.
The Committee welcomed the various attempts to work with the universities to
train geomatics professionals in South Africa in order to address the shortage
of skills.
The Committee further
commended the Department for completion of the first phase of the State Land
Audit and the surveying of State land in former homelands.
6.3.3
Rural
development
Rural development is
a transversal function, and if not properly coordinated it may results in
duplication of functions of other line function departments. The Committee
noted that the Animal and Veld Management Programme is another version of the
Land Care Programme of the Department of Agriculture, Forestry, and Fisheries;
construction of roads, bridges is also another function that is closely linked
to the functions performed by the Department of Public Works, the list is not
exhaustive of examples of potential duplication and overlap of functions. It
thus raises question of enhanced coordination at a local level. The Committee commended
efforts to improve coordination of rural development. It welcomed innovation of
MINMECs to align the outcome coordinating structures with the CRDP management
systems. Integrated planning could enhance comprehensive service delivery in
rural areas. The Committee welcomed these developments but emphasised
parliamentary oversight to ascertain the functionality of these different fora.
The Committees review
of the performance of the Comprehensive Rural Development Programme has shown
significant progress in the development of rural areas, especially in relation
to infrastructure to meet the basic human needs, enterprise development and
rural industries. The Committee alsocommended the Department for exceeding some
of the targets underthe rural development programme. For example, establishment
of food gardens. This target, according to the Committee, is central to enhancement
of food security for rural poor.
6.3.4
Restitution
The
Commission exceeded all the service delivery targets for the year under review.
For
example, 270 new claims were settled against the target of 230 and 292 claims
were finalised against the target of 208 claims
. The Committee
observed that of the 292 land claims finalised, only 65 were new claims and 227
were backlog claims.
Exceeding
the targets for the 2013/14 financial year, when compared to 2012/13, where the
Commission
settled 602 new claims and finalised
376 claims, raises questions about planning and the measure for setting targets
within the Commission. The Committees observations was that it was likely that
the Commission had under-targeted its performance in this financial year under
review.
6.3.5
Land
reform
The fact that the
programme spent 100 per cent of its budget to achieve 55.6 percent of the
programmes targets was a major concern for the Committee. This programme still,
as was the case in the previous reporting period, could not meet the target for
acquisition of strategically located land, yet increasing the pace of
redistribution of land remains one of the top priorities of government and has
a potential to result in fundamental and radical transformation of the South
African society if implemented and holistically supported by government.
Another drawback
concerned the Departments inability to meet the targets for recapitalisation
and development of land reform farms so that South Africa could realise the
goals to ensure 100 per cent productivity on land reform farms. It is also
concerned about inadequate monitoring of strategic partners, mentors, in the
recapitalisation of farms. The Committee suggested that the Department must
step up its efforts because lack of productivity on land reform farms.
The ability to
address the eviction cases and settlement of labour tenants claims was
regarded as a major leap forward and a step in the right direction because this
was the first time the Annual Report contained tenure reform targets in five
years. The Committee welcomed this development.
6.3.6
Ingonyama Trust Board
The Ingonyama Trust Board
incurred deficit of 4 per cent of the total budget. This had a negative
reflection on prudent financial management of the Ingonyama Trust Board. This
could have been avoided, had the Board exercised control on the spending and
allocations.
The Committee noted
that the fact that disbursement of funds depends solely on the traditional
communities submitting application for funding and a cumbersome process of
business plans. This process affected the pace of submission of applications to
Ingonyama Trust Board. As a result, the 90 per cent allocated for community
development as expected.
A long-standing
problem of payment of royalty revenue persists. The Ingonyama Trust Board
incorrectly recognised the royalties received from mining operators as revenue.
According to the Auditor-General, this contradicts the requirements of GRAP 9
(Revenue from exchange transactions). The Committee further noted that the
Auditor-General found that the Ingonyama Trust Board did not recognise, at fair
value as at the date of acquisition, the land in accordance with the
requirements of GRAP 17 (Property, Plant and Equipment). The Committee noted
that the Ingonyama Trust Board was challenging the recommendations of the Auditor-General
and its intensions to seek exemption from the Accountant-General.
6.4.
Financial
Performance including funding proposals
The Committee
appreciated that the Department has improved its spending capacity in 2013/14
compared to its performance in 2012/13. However, it expressed concern that the
Departments spending was not in line with the service delivery performance. While
it has spent most its budget for the year under review, it meant there was less
value for money in services delivered.
The commitments of R4
billion in the current restitution process and the amendments to the
Restitution of Land Rights Act dictates that there should more budget
allocation for the programme of restitution if the Commission is to realise the
settlement of both current claims and the anticipated new claims.
7.
Recommendations
In view of the above observations and conclusions, the
Committee recommends to the National Assembly that
7.1
The Minister of Finance
The
Minister should consider
-
(a)
Creating a ring-fenced budget for funding of
the R4 billion of commitments under restitution because previous commitments affect
that ability of the Commission to settle and finalise new claims.
(b)
Reviewing, in consultation with the Minister
of Rural Development and Land Reform, funding mechanisms for restitution to
ensure that new claims that are being submitted until 2019 could be adequately budgeted
for.
(c)
Taking into considering that 25 per cent
of the allocation of land redistribution is
reserved for farm development, and further considering that it affects the
ability of the programme of land reform to acquire strategically located land at
the scale anticipated; the minister, in consultation with the Minister of Rural
Development and Land Reform, should create a special budget allocation for
recapitalisation and development of land reform farms rather than the current
allocation which reserves 25 per cent
of
that budget for development support.
The
Minister should report to Parliament, about these three recommendations, within
three months of adoption of this report by the National Assembly.
7.2
The Minister of Rural Development and
Land Reform
7.2.1
The
Department of Rural Development and Land Reform
The Minister should consider
(a)
Enhancing the capacity of the Department to
implement programmes and ensure that 100 per cent spending of budget allocated
relatively corresponds to performance on the service delivery targets.
Particular attention should be given to internal controls and performance
information management.
(b)
Ensuring that payment of service providers
within 30 days is adhered to.
(c)
Ensuring that the Department fills all the
funded senior management and strategic positions such as that of the Chief
Financial Officer. In addition, consider putting in place mechanism to address
the high rate of staff turnover that affects interventions to reduce the
vacancy rate.
(d)
Submitting the outcomes of the SIU
investigations within the Department of Rural Development and Land Reform
conducted over the last five years (2009-2014). Further ensure that the
Department of Rural Development and Land Reform puts in place systems and
mechanisms to ensure that all internal investigations are completed on time.
(e)
Ensuring that the project of to set up e-cadastre
is completed and implemented.
(f)
Fast-tracking the second phase of land audit to
ensure completion of the full land audit that explains property ownership by
race, gender and nationality.
(g)
Ensuring acceleration and full implementation
of the Spatial Planning and Land Use Management Act. In addition, the
regulations and implementation plans should be provided.
(h)
Developing mechanisms to enhance the capacity
of the Department for effective coordination of all relevant departments or
units in all spheres of government in a manner that foster the
intergovernmental approach to rural development. This is especially necessary
to avoid duplication of services as is the case in Animal and Veld Management
Programme (DRDLR) and the Land Care Programme (DAFF)
(i)
Ensuring proper funding of the
Recapitalisation and Development Programme so that it also assist in the
development of smallholder farmers as indicated in the National Development Plan
and the State of the Nation Address.
(j)
Improving management of ALHA, ensuring that
there are up-to-date leases for properties allocated under PLAS, as well
improvement in revenue collection.
The
Minister should report to Parliament, about these recommendations, within three
months of adoption of this report by the National Assembly.
7.2.2
Commission
on Restitution of Land Rights
The Minister should consider
(a)
Ensuring that restitution develop a
prioritisation plan for land claims lodged before 31 December 1998, so that
there is evidence of compliance with of the Restitution of Land Rights
Amendment Act, 2014.
(b)
Finalising the codification of exceptions to
the 1913 cut-off date without delay so that the Khoi and San are afforded
opportunity for redress of their land dispossession and removals.
(c)
Ensuring that no funds are shifted from
restitution because of the constrained budget that should address both the old
and new land claims that are being received.
(d)
Implementing without delay the programme of action
for the reopening of land claims; for example rolling out the mobile lodgement
centres, appointment of additional human resources to fast track the lodgement
process.
(e)
Developing and implementing the communication
plan for the reopening of the lodgement of land claims as well as communicating
progress to land claimants generally.
(f)
Improving the planning process to ensure that
the Commission does not under or over-target is plans.
The
Minister should report to Parliament, about these three recommendations, within
three months of adoption of this report by the National Assembly.
7.2.3
Ingonyama Trust Board
The
Minister should consider
(a)
Initiating the processes to appoint the new
Board and further ensure that the Board establish the new Audit Committee.
(b)
Facilitating a process to ensure that the
Ingonyama Trust Board refocus its mandate to comply with its founding
legislation.
(c)
Initiating discussion to review the funding
of the Ingonyama Trust Board through transfers from the Department in order to
determine the necessity of transfers against the backdrop of surplus and
savings made by the Board.
(d)
Assisting the Ingonyama Trust Board to develop
policies that will provide guidance in the operations of the Board.
(e)
Submitting a report to Parliament about the strategies
developed to address issues of non-compliance on valuation of property.
(f)
Submitting a reportto Parliament on how it is
going to address matters raised by the Auditor General, especially reasons for
the qualified audit opinion.
The
Minister, and the Ingonyama Trust Board, should report to Parliament, about
these recommendations, within three months of adoption of this report by the
National Assembly.
Report to be considered.
Documents
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