ATC181017: Budgetary Review and Recommendations Report of the Portfolio Committee on Rural Development and Land Reform, dated 17 October 2018

Rural Development and Land Reform

Budgetary Review and Recommendations Report of the Portfolio Committee on Rural Development and Land Reform, dated 17 October 2018
 

The Portfolio Committee on Rural Development and Land Reform (the Committee), having considered the 2017/18 annual performance reports of the Department of Rural Development and Land Reform (DRDLR), the Office of the Valuer-General (OVG), the Commission on Restitution of Land Rights (CRLR) and the Ingonyama Trust Board (ITB); further having conducted analysis of budgets and estimates of expenditure over the medium term, reports as follows:

 

1.Introduction

 

The Money Bills Amendment Procedures and Related Matters Act, 2009 (Act No.9 of 2009) requires the National Assembly to conduct annual assessment of the performance of each national department, giving particular focus to the medium-term estimates of expenditure. Section 5 of Act 9 of 2009 sets out a procedure for assessing the performance of each department by the National Assembly. It further requires committees of the National Assembly to prepare budgetary review and recommendation reports (BRRR). Through this report, the Committee conducts assessment of the DRDLR’s service delivery performance given available resources; the effectiveness and efficiency of the DRDLRs’ 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 Committee during assessment of the 2017/18 performance of the DRDLR and related entities; namely, the OVG, the CRLR and the ITB. It also makes recommendations for budget review to the Minister of Finance and improvement of service delivery to the Minister of Rural Development and Land Reform.   

 

1.1The mandate of the Portfolio Committee on Rural Development and Land Reform

 

The Committee, as an extension of the National Assembly, is governed by the rules of the National Assembly to oversee the rural development and land reform portfolio. It oversees the work of Executive and the DRDLR whose mandate is 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. Further, the Committee oversees the public entities and CRLRs reporting under the DRDLR; namely, the CRLR established in terms of the Restitution of Land Rights Act, 1994 (Act 22 of 1994) as amended; the ITB established in terms of the KwaZulu-Natal Ingonyama Trust Act, 1994 (Act 3 of 1994) amended by the National Act 9 of 1997, and the OVG established in terms of the Property Valuation Act. The Committee exercises its powers within a legal framework of the Constitution, relevant statutes as cited above and the Rules of the National Assembly. Amongst others, it considers and processes legislation, exercises oversight on implementation of the various relevant programmes of the DRDLR and related entities; facilitates public participation; considers budget votes and expenditure outcomes; and enquires and makes recommendations about any aspect of the DRDLR, including its structure, functioning and policy.  

 

 

1.2        The Department of Rural Development and Land Reform

 

The mandate of the DRDLR derives from the priorities of government articulated through the Medium-Term Strategic Framework (MTSF) and 12 outcomes of government. Its mandate and priorities are aligned to the National Development Plan (NDP) as illustrated in Table 3 of this report. The DRDLR coordinates implementation of ‘Outcome 7: Comprehensive Rural Development and Food Security for All’. The relevant chapter of the NDP is discussed in detail in Section 2 of this report. Concomitant to Outcome 7, the outputs for the DRDLR 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 outlines the strategic goals for the DRDLR.

 

Table 1: Strategic outcome oriented goals 

Strategic Goal

Strategic Goal Statement

Corporate governance and service excellence Improved land administration for integrated and sustainable growth and development Promote equitable access to and sustainable use of land for development Promote sustainable rural livelihoods Improved access to services Sustainable rural enterprise and industries Restoration of Land Rights

Foster corporate governance and service excellence through compliance with the legal framework Improve land administration and spatial planning for integrated sustainable growth and development with a bias towards rural areas An inclusive and equitable land dispensation with transformed patterns of land tenure and use Improve rural livelihoods as a result of capabilities, income and job opportunities provided Improve access to services in rural areas through the coordinated of quality infrastructure Promote economically, socially, and environmentally viable rural enterprises and industries Restoration of Land Rights in terms of the Restitution of Land Rights Act, as amended.

Source:   DRDLR (2015) Strategic Plan of the DRDLR, 2015-2020

 

The Strategic Plan (2015 - 2020) and the 2017/18 Annual Performance Plan (the APP) demonstrate the extent of alignment of the functions of the DRDLR to Outcome 7 and the NDP. Such alignment is demonstrated by the vision which is: “vibrant, equitable, and sustainable rural communities” and the mission is to “initiate, facilitate, coordinate, catalyse and implement an integrated rural development programme”. Both the vision and mission are 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 aims at facilitating integrated development and social cohesion through partnerships with all sectors of the society.

 

Analysis of the APPs shows that social cohesion and integrated development can be attained through shared growth and development, full employment, equity and cultural progress. Therefore, the agrarian transformation system is seen as an orbit around which the strategies for delivery of these objectives revolves.

 Table 2: Programmes and strategic objectives of the DRDLR  

Programme	Strategic Objective
Administration	Compliance with all public sector legal prescripts Unqualified regularity audit opinion Skills development for improved service delivery
Geospatial and Cadastral Services	Improved spatial planning Integrated and comprehensive land administration system
Rural development	Job creation and skills development in rural areas Quality infrastructure provided Functional and institutional arrangements Facilitate the establishment of rural enterprises and industries
Restitution	Land Rights restored Redress land rights lost after 1913
Land Reform	Strategically located land acquired Support to rural communities to produce their own food in all rural districts Farm development support provided to smallholder farmers

Source: DRDLR (2015) Strategic Plan of the DRDLR of Rural Development and Land Reform (2015-2020)

 

1.3        Approach for compilation of this report  

 

In line with the mandate of the Committee discussed in section 1.1 and section 5 of the Money Bills Amendment Procedures and Related Matters Act (2009), this report is a culmination of an array of oversight and legislative activities of the Committee.

 

The following paragraphs highlights some of the key activities carried out by the Committee:

 

• Analysis of the annual performance reports: On 10 October 2018, the Committee considered annual reports of the DRDLR, the CRLR, the OVG and the ITB. The discussion included scrutiny of both service delivery performance reports and the annual financial statements (AFS). Assessment of the reports was based on overarching policy priorities articulated in the NDP, the MTSF and relevant strategic plans. Those priorities find pronouncement in various Cabinet decisions, the State of the National Address (SONA), the Budget Speech by the Minister of Finance, and the Minister of Rural Development and Land Reform’s budget policy statement.
• Briefing sessions with other entities that support Parliamentary oversight: On 10 October 2018, the Committee received a briefing by the Auditor-General of South Africa (AGSA) on the performance audit conducted for the 2017/18 financial year. The AGSA focussed on audit of predetermined objectives and audit of AFS.
• Analysis of quarterly performance reports:  During 2017/18, the Committee continued to receive quarterly reports in order to monitor performance and track implementation of particular recommendations of the Committee, the Auditor-General and others. This report mainly draws on the 4th quarter 2017/18 and 1st Quarter 2017/18).
• Review of responses to the previous BRRR: The Committee considered the Minister of Finance and Minister of Rural Development’s responses to the previous BRRR. Some of the major budgetary question had already been addressed by the Minister of Finance; especially the Medium-Term Budget Policy Statement. The Minister of Rural Development and Land Reform tabled responses to the 2015 BRRR to the Speaker of the National Assembly on 31 March 2016. The Committee noted comments on recommendations to the Minister of Finance as well as the responses to service delivery/ programme performance.
• Other oversight activities: Analysis of the programme performance draws on various engagements between the DRDLR and the Committee, especially briefing sessions on programmes. It further draws from experiences of the beneficiaries of land reform and rural development programmes which were gathered through the oversight visits to some of the recapitalisation and development farms and public hearings reports; some of the public hearings conducted by the Committee are: Assessment implementation of the Recapitalisation and Development Policy through collection of views from beneficiaries of the programme, research and academic institutions, and government departments such as the Department of Planning, Monitoring and Evaluation.

 

1.4        The structure of the report

 

Following this introduction, this report organised into two six main sections; namely –

 

Section 2:    It sketches through key policy areas to set the scene for analysis of the performance of the DRDLR, the OVG, the CRLR and the ITB;

Section 3:    It summarises the financial and non-financial performance recommendations in terms of the Committee’s 2017 BRRR and the 2018 Budget Vote Report.

Section 4:    It presents an overview of expenditure trends over the last three years, discusses financial performance of the DRDLR and entities during 2015/16.

Section 5:    It reviews service delivery against the priorities and predetermined objectives.    

Section 6:    It summarises key observations, findings and conclusions.  

Section 7:    It presents the Committee’s recommendations to the Minister of Finance, and the Minister of Rural Development and Land Reform.

 

2.         Key relevant policy priority areas

 

The strategic plan of the DRDLR sets the performance context and plans within the wider context of MTSF priorities linked to the National Development Plan (NDP) as demonstrated in Table 3 below.  Chapter 6 of the NDP (Integrated and Inclusive Rural Economy) envisions rural areas that are spatially, socially and economically integrated, where residents have economic growth, food security, access to basic services, health-care and quality education. It suggests that agriculture, with a potential to create 1 million jobs by 2030, should be the driving force to achieve this vision.

 

 

 

Table3: Alignment of the DRDLR objective with NDP, MTSF, and SONA

NDP Priorities	MTSF Activities	Strategic Objectives
Improved land administration and spatial planning for integrated development with a bias towards rural areas; up-scaled rural development as a result of coordinated and integrated planning, resource allocation and implementation by all stakeholders.		Improved spatial planning   Improve land administration for integrated and sustainable use of land for development
Sustainable land reform;	Increase the percentage of productive land owned by previously disadvantaged individuals from 11.5 per cent in 2013 to 20 per cent by 2019 (or 16.2 million hectares).	Promote equitable access to and sustainable use of land for development.   Promote sustainable rural livelihoods   Restoration of land rights.
Improved food security	Reduce the percentage of households who are vulnerable to hunger from 11.4 per cent in 2013 to less than 9.5 per cent in 2020	Provide comprehensive farm development support   Promote sustainable rural livelihoods
Smallholder farmer development and support for agrarian transformation	Increase the percentage of productive land owned by previously disadvantaged individuals from 11.5 per cent in 2013 to 20 per cent by 2019 (or 16.2 million hectares).	Provide comprehensive farm development support
Increased access to quality basic infrastructure and services, particularly in education, healthcare and public transport in rural areas		Improved access to services
Growth of sustainable rural enterprises and industries characterised by strong rural-urban linkages, increased investment in agro-processing, trade development and access to markets and financial services resulting in rural job creation	Reduce the percentage of the population living below the lower bound poverty line (R443 in 2011 prices) from 32.3 per cent to below 22 per cent.   Reduce rural unemployment from the current 49 per cent to less than 40 per cent.	Sustainable rural enterprises and industries

 

Access to land is central to broadening participation of the previously disadvantaged in agriculture. The NDP suggests that increasing access to agricultural land has a potential to create 300 000 jobs at different farming levels. Further, the NDP sets a target to transfer 20 per cent of agricultural land to black people by 2030. It proposes district-based land reform driven by district land committees which would determine the land needs in particular districts, identification of land available and collaboration of stakeholders to address those needs. As highlighted in Section 1.3, and demonstrated in Table 3 above, alignment of the policies and programmes of the DRDLR is vitally important and the NDP outlined six policy imperatives which are aligned to strategic objectives of the DRDLR as demonstrated in Table 3.

 

2.1        Priority policy and legislation to be developed in the medium-term

 

The Committee noted that the publication of the 2011 Green Paper on Land Reform and the subsequent protracted process have resulted in policy initiatives which attempted to provide policy clarity but most of them were yet to be concluded. However, the Committee expressed concerns with regard to a number of policy initiatives have been implemented without clear policy guidelines. It particularly referred to the following policies: Strengthening Relative Rights for people working the land, the ‘One Household-One Hectare’ and the ‘One Household Two Dairy Cows’ programmes. These initiatives added to the River Valley Catalytic Programme and Animal Veld Management Programme.

 

With regard to legislative programme, the Committee noted that the Department only tabled the Communal Property Associations Amendment Bill. The rest of the legislative programme, especially tabling of the Bills in Parliament, was not achieved.  For the year under review, the Department had planned to process the following pieces of legislation:

 

• Regulation of Agricultural Land Holding Bill, 2017. The Bill provides disclosure by landowners of their nationality, race and gender; the circumstances under which foreign persons may own and/or have access to land; the establishment and maintenance of a register of land ownership; the submission of information on public land; the establishment and composition of the Land Commission; and the resolution of disputes over situations in which two or more title deeds have been issued in respect of the same parcel of land.
• Deeds Registries Amendment Bill, 2017. The Bill seeks to effect technical amendments to the Deeds Registries Act to improve on some of the technical implementation challenges.
• Electronic Deeds Registration Systems Bill, 2017: It seeks to amend the Deeds Registries Act to provide for the electronic registration of Deeds. This Bill was tabled in Parliament during the 2018/19 financial year.
• Communal Land Bill, 2017: The Bill provide for the regulation of communal land; legal security of tenure by transferring communal land, including KZN Ingonyama land, to communities and members of communities; the administration of communal land by communities; communal land administration committees and households’ forums; land rights enquiries; establishment of the Communal Land Board; and amendment and repeal of certain laws.
• Sectional Titles Amendment Bill, 2017 (Deeds): The Bill seeks to effect technical amendments to the Deeds Registries Act to address technical problems experienced in administering the Act.
• Planning Profession Amendment Bill, 2017. The Bill was still at a drafting stage, and there were no target dates for completion of the drafting.
• Land Survey Amendment Bill, 2017. The Bill seeks to effect amendments to the Land Surveys Act to address technical challenges that are experienced in the administration of the Act for the purpose of stimulating the economy and promoting security of tenure.
• Planning Profession Amendment Bill, 2017: The Bill seeks to provide for the transformation of the planning profession; review of categories for registration; transforming and realignment of planning education; development of accreditation criteria for the accreditation of planning programs/schools; identification of areas of work for planners; maintenance of a high standard of professional conduct and integrity; and the development of competencies and standards for curriculum development.

 

Despite stringent oversight on the development of the legislation and policies, the DRDLR has failed to meet the deadlines it set for itself regarding the proposed legislation. The Committee expressed concern about the weakness in legislation and policy.

 

3.         Previous budget review and service delivery recommendations

 

This section presents an overview of the Committee’s recommendations regarding the 2016/17 expenditure outcomes and service delivery performance as per the October 2017 BRRR. 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 Committee noted that, at the time of adoption of this report by the Committee, the Minister of Rural Development and Land Reform had not submitted responses to the BRRR. Therefore, the recommendations presented in this report has taken cognisance of the responses of the Minister of Finance.

 

3.1        The 2017 budget review recommendations

 

In this report, the Committee considered the BRRR for the 2016/17 financial year; both the budget recommendations and service delivery recommendations as discussed below. It sought to assess whether the DRDLR, and the entities, have made progress in the implementation of government priorities.

 

3.1.1     Budget recommendations

 

Having observed that there was no specific allocated funding for the Recapitalisation and Development Programme, and further noting that the funds were diverted from the allocation for land acquisition, the Committee recommended that the Minister of Finance should consider making budget allocation for the Recapitalisation and Development Programme. Further, the Committee recommended that the Minister of Finance should work with the Ministers of Agriculture, Forestry and Fisheries and Rural Development and Land reform or any other relevant government entities to facilitate development of an integrated funding model for supporting land reform beneficiaries, smallholder farmers, and emerging black commercial farmers. Given the overlap of responsibilities, the Committee further, recommended that National Treasury must assist to minimise duplication of services between the DRDLR and DAFF.

 

The Committee expressed concerns over the increasing value of the commitment register. Therefore, it recommended that the Minister of Finance must work with the Minister of Rural Development and Land Reform and the Chief Land Claims Commissioner to develop a funding model for the existing commitments of R8.46 billion within the MTEF period. The model must be based on a strategy that prioritises land claims that were settled prior to 2009 prior to the Recapitalisation Programme, especially development grants and other settlement support funding.

 

Whilst the Committee welcomed new initiatives set out under the Operation Phakisa for Agriculture, Rural Development and Land Reform, it was concerned that the programme was not matched with budgetary resources. Therefore, the Committee recommended that the Minister must consider provisioning budget allocation for the implementation of the targets under the mentioned Phakisa initiative.  

 

3.1.2     Service delivery recommendations

 

The recommendations pertaining to service delivery are presented in three sections; namely, the DRDLR, the CRLR and the ITB.

 

1. Department of Rural Development and Land reform

 

The Committee observed that there were inconsistencies in relation definitions within key programmes within the DRDLR; for example, definition of smallholder and rural development. In turn, policy and programme and outcomes were affected. The Committee, therefore, recommended that the Minister of Rural Development and Land Reform in consultation with other relevant government departments and stakeholders should develop a clear definition of rural areas, rural development and smallholders which could be applied across all spheres of government in order to improve programme outcomes.

 

Having noted that there was no credible data to determine the socio-economic impact of land reform at a national scale, the Committee recommended that the Minister, together with the DPME, should conduct a national survey of farms acquired through all land reform programmes since 1994 to date. The survey must assess sustainability of land reform farms and the socio-economic impact of land reform on beneficiaries. The DRDLR could also draw lessons from the earlier Quality of Life surveys by the then Department of Land Affairs.

 

Given the reported intention to increase the number of sites where the Strengthening of Relative Rights for People Working the Land was being implemented, the Committee recommended that the Minister must table a report on the SRR pilot review and the key lessons prior to the rollout of the programme.

 

The Committee also recommended that the DRDLR must build adequate internal capacity to develop evidence-based policy and legislation in order to address non-compliance with own legislative programme. The Committee was of the view that some of the policies were not informed by the lived reality of land reform beneficiaries, and therefore do not meet the expectations of the intended beneficiaries. Further, the Committee recommended adherence to the revised legislative programme which outlined what policies and legislation would be tabled and referred to the Committee.  

 

Amongst other concerns of the Committee was the poor coordination of interventions within the land reform and rural development interventions. Therefore, the Committee recommended that the Minister of Rural Development and Land Reform must strengthen coordination of Agri-Parks interventions with relevant government departments to maximise the usage of limited resources, avoid duplication of government services, and enhance the capacity to coordinate expertise from elsewhere in government and non-government entities.

 

Whilst the matter of SPLUMA has not progressed well due to uncertainty about the relevant authority to administer certain programmes and legislation, the Committee recommended that the Minister must submit cabinet resolutions and proclamations in respect of the SPLUMA function to the Presidency (DPME) and the transfer of Recapitalisation and Development Programme to DAFF. The Minister was further requested to submit a report about funding mechanisms, coordination between both departments, capacity within the receiving departments to provide required services, and plans for smooth transition.

 

The Committee observed a need to build internal capacity to carry out the mandate for tenure reform and land administration. This is especially urgent for the support of CPAs, and processing of labour tenant’s applications. The Committee further urged the Department to ensure strict monitoring of the Legal Services Project under the Land Rights Management Facility and the Panel of Attorneys set up to provide legal services to farm dwellers.

 

1. Commission on Restitution of Land Rights

 

The Committee recommended that the CRLR must prioritise settlement and finalisation of all land claims on state land.  To assist the Committee to monitor the settlement of land claims, the Committee recommended that the CRLR conduct analysis, and submit a report, of all outstanding claims on state land, detailing the claims by province and district, the extent of the land in question, ownership of the land, the current use, implications (financial and otherwise) of settlement of such claims.

 

Given the discussion about transforming the CRLR to an independent body, and suggestions regarding its inclusion in the list of Chapter 9 institution, the Committee recommended that the CRLR must table roadmap and quarterly reports on the processes toward transforming the CRCLR into an autonomous entity. Further, table a report on the implications of proposals to ultimately transform the Commission into a Chapter 9 institution.

 

The Committee has been concerned about the increasing value of the commitment register. Therefore, it recommended that a comprehensive report on commitments in the form of grants approved before 2009 in terms of Section 42C of the Restitution of Land Rights Act be tabled. It further recommended that the CRLR must outline a realistic plan, in line with budget allocation, regarding the payment of all such commitments.

All pre-1998 land claims were to be researched by the end of 2017/18 financial year. The Committee noted that this target required an improvement in the research capacity of the Commission and capacity to monitor consultants conducting research on behalf of the Commission. Therefore, it recommended that the CRCLR must closely monitor the service level agreements with service providers for effective delivery and submit quarterly progress report to the Committee.

 

1. Ingonyama Trust Board  

 

The Committee observed that the ITB has been diverting from its legislated mandate. Therefore, the Committee recommended a review of the ITB Act to ensure that the functions of the ITB are in line with this legislation and further take into consideration the Constitutional imperatives of provision of secure tenure and the DRDLR’s Communal Land Tenure Bill and policy.

 

Given the outstanding matters between the ITB and the Auditor-General as well as the National Treasury, the Committee recommended that the Minister and the Board must speedup facilitation of engagement between the ITB and the Auditor-General together with the Accountant General by the end of 2017/18 in order to address the perennial non-compliance of the ITB with the GRAP standards in relation to valuation of land and other outstanding matters as reported by the Auditor-General. Similarly, the matters of royalty revenue must be addressed with the National Treasury.

 

The minister was urged to conduct, together with the ITB, the impact on livelihoods of the programmes of the ITB and the Act with a focus on land tenure and administration, leasehold tenure system and protection of customary land rights of traditional communities. Further, to ensure that the ITB worked with municipalities by monitoring the extent to which municipal Integrated Development Plans and Local Economic Development Plans feature some of the developments initiated on the Ingonyama Trust Land. Similarly, ensure coordination between the rural development functions of the Department and those implemented by the ITB.

 

3.2.       The 2018/19 Budget Vote 39 Report  

 

This section focusses on the Committee’s recommendations regarding Budget Vote 39. These recommendations were considered after the Committee had engaged with the forward plans of the DRDLR and the Entities. Having considered the 2018/19 APP against the five-year strategic plan of the DRDLR, the CRLR and the ITB, the Committee recommended that, within three months after adoption this report by the National Assembly, the Minister of Rural Development and Land Reform should - 

 

Policy

 

• Ensure that the Department starts a wide consultation process on national land and agrarian reform policy whose outcome be a revised White Paper on Land Policy (a framework policy document). The policy document must ensure policy coherence and clarity coherence and guide the State in the implementation of land reform (including governance and administration).
• Conduct socio-economic impact assessment, including enterprise analyses, of various land reform farms in the post-settlement support by government departments to assess the viability of production, livelihood impacts and how the enterprises have benefitted the beneficiaries. Special focus should be on all the projects under the Recapitalisation and Development Programme, the farms under the SRRR or so-called ‘50/50’ programme, and the Agri-Parks. 

 

 

Administration

 

• Ensure that the Director-General and all Deputy Director-General vacant positions are filled by the end of the first quarter of 2018/19.
• Finalise all disciplinary matters in the Department within 30 days. Further submit a report, within 30 days after the finalisation of the disciplinary matters, that outlines the outcome of each matter. In the event that some matters could not be concluded as recommended here, a time-bound plan on concluding all investigations and disciplinary matters must be submitted to the Committee.
• Submit a revised legislative programme outlining realistic targets for tabling of planned pieces of legislation in the National Assembly.
• Enhance capacity of the policy and legislative drafting section of the Department in order to ensure adherence to the legislative programme of the Department.

 

National Geomatics Management Services

 

• Submit to the National Assembly a progress report on the transfer of administration of the SPLUMA to the Presidency, indicating implications for funding, personnel and parliamentary oversight. The report must also indicate how the transfer would empower municipalities in terms of development planning and improved service delivery.
• Ensure that, when CPA-owned land is sold and transferred to another entity, the electronic deeds system must trigger verification mechanisms of processes set out in the CPA Amendment Bill (which is to be signed into law after all the Parliamentary processes are concluded).
• Submit a report about the engagement between government and traditional leaders as well as other government and non-government entities which aimed at resolving impasse around implementation of SPLUMA.
• Draw coordination and implementation plan in conjunction with COGTA and the DPME. Further submit the plan for consideration by the relevant Portfolio Committees, jointly.
• Conduct the next phase of land audit which must unpack the ownership of all land under the ownership of Trusts and Companies. This should be completed by the end of the financial year and thereafter tabled for consideration by the Committee.

 

Rural Development

 

• Conduct a review of the NARYSEC programme to assess if the programme has achieved, the intended outcomes over the last five years, highlight the challenges encountered, and the implications for future programme implementation.
• Compile and submit a report on the training programme of the NARYSEC programme and its impact in the empowerment of youth and job creation. In addition to the other critical matters, the report should outline the assessment standards and qualification that each category of graduate receives and the post-training monitoring of graduates in order to assist with job placements.
• Submit approved policies relating to sub-programmes introduced under the programme of rural development; namely, One Household-Two Dairy Cows and the One Household-One Hectare. Further, submit progress report on the two sub-programmes in the 44 rural districts. The report should detail each project, when it was initiated, beneficiaries, funds allocated to each (annually, if repeated funding was allocated), impact of the project on livelihoods of beneficiaries.   
• Together with the National Treasury, Department of Agriculture Forestry and Fisheries, and other relevant government departments, review all programmes under rural development, especially those linked to revitalisation of agriculture and agro-processing as well as small business development, in order to minimise duplication of work.  

 

Restitution

 

• Fast-track reconfiguration of an autonomous Commission as per the Restitution of Land Rights Act.
• Continuously engage National Treasury about increasing allocation of funding of restitution to clear the commitment register of settled land claims.
• Review and assess the statistics of all the land claims lodged prior to 31st December 1998 in order to produce the final number of outstanding land claim that require research, researched awaiting settlement, settled but not finalised, and finalised. The Commission should also analyse claims according to ownership and land use, for example state land, private ownership, and communal land;
• Engage National Treasury about the funds required to accelerate the finalisation of the land claims as outlined in Operation Phakisa initiative; and submit an implementation plan for settlement of all outstanding and finalisation of land claims over the MTEF period.
• Develop mechanisms to track the use of Section 4C development grants by beneficiaries of land restitution. Further submit a comprehensive report on funding released by the Commission to the ‘recap’, detailing the amounts and communities targeted and what the amounts were used for. Further report about communities who qualified for Section 42C support but their fund had not been released by 31 March 2018.
• Conduct an analysis of the Commitment register to ascertain number of communities or individuals that the Commission owes, age analysis of each commitment, and develop a time bound plan with which these commitments can be cleared.

 

Land Reform

 

• Ensure that the Department, working with the OVG, must development a policy position regarding expropriation of land in the public interests, taking into consideration the SONA pronouncement around expropriation of land without compensation in a manner that does not harm the economy and food security. Further explore the modalities with which such policy pronouncement could be implemented.
• Conduct enterprise analysis and socio-economic impact assessment of a representative sample of farming enterprises under the Recapitalisation and Development Programme, Strengthening of Relative Rights Programme (or so-called 50/50 projects) and other post-settlement support initiatives under the Agri-Parks programme. The impact assessment should be geared toward assessing if government funds invested under these programmes were yielding viable and sustainable farming businesses and ultimately having livelihood impacts on members of projects or beneficiaries.
• Ensure capacity of the Department to monitor land reform projects, especially an interface of strategic partnership and mentorship programmes and distribution of rewards or dividends to beneficiaries.
• Conclude, without delay, the finalisation of the Integrated Funding Model for post-settlement support which involves the National Treasury and the Department of Agriculture, Forestry and Fisheries.
• Working with the Minister of Justice and Constitutional Development, facilitate discussion between the Department and the Legal Aid Board aiming at strengthening the provision of legal services to the vulnerable landless people, especially the farm dwellers and labour tenants who confront the brutality of illegal evictions from their homes on farms as well as violation of tenure rights for people living on communal land in the former homelands.

 

The Office of the Valuer-General

 

• Develop and submit a weighted system or formula for implementation of ‘just and equitable compensation’ in Section 25 of the Constitution.
• Submit progress report on the key achievements of the OVG, with key policy implications to the existing legislative framework under which the OVG operates.
• Submit a detailed estimates of expenditure for the OVG, with a clarification of the details of goods and services as well as compensation of employees.
• Submit an organogram of the OVG indicating funded posts, both filled and vacant, and positions that are additional to the establishment.

 

The Ingonyama Trust Board

 

• On the basis of the legal opinion obtained by the Minister of Rural Development and Land Reform, facilitate discussions between the Auditor-General, the Ingonyama Trust and the ITB, and the Department to develop a common understanding on the nature of the Ingonyama Trust and the ITB (whether they ITB should been seen as an independent entity from the Ingonyama Trust and the auditing complexities).
• Ensure that the ITB removes all forms of advertisements calling for residents on the Ingonyama Trust land approach the offices in order to convert their PTOs to leases. This includes all advertisements on the website of the ITB as well as any other form of media.
• Ensure that the ITB consult the residents, and not only the traditional councils, about the conversion of their established land rights into tenants of the Ingonyama Trust, i.e. entering into lease agreements with all the conditionality in the lease agreements. All conversions should be in line with all the land laws of the Country.
• Facilitate resolution of key questions and concerns raised by the Auditor-General in relation to the value of the ITB’s land/property so that the ITB could move toward achievement of an unqualified audit. Further, submit quarterly progress report on implementation of the remedial measures set out by the Auditor-General in order to ensure that the ITB is compliant with all the relevant prescripts.
• Conduct a comprehensive socio-economic impact assessment of the performance of the ITB and how the beneficiaries have materially and socio-economically benefited from the ITB programmes.
• Review programmes to ensure implementation of ITB policy provision for allocation and use of 90 per cent of the revenue of the Trust for the material benefit of traditional communities living on the ITB.

 

4.         Overview of 2017/18 financial performance

 

This section focuses on the financial performance of the DRDLR, the OVG, the CRLR and the Ingonyama Trust Board.

 

4.1        The Department of Rural Development and Land Reform

 

The DRDLR received an adjusted allocation of R10.184 billion in the 2017/18 financial year. The amount include revenue from aid assistance and departmental revenue. The overall expenditure for the Department is R9.730 billion, representing 95.5 per cent of the allocation. About 4.5 per cent of the allocated funds (R454.1 million) had not been spent by the end of the financial year. Most of the funds not expended related to ‘savings’ related to the cost of employment due to vacant positions and unspent public private partnerships (PPP) funds for central office accommodation for all components of the DRDLR in Pretoria.  The Committee noted regression in the expenditure rate, from 99.4 per cent in 2016/17 to of 95.5 per cent in 2017/18.  

 

Table 4: Appropriation and Expenditure

PROGRAM	2016/17				2017/18
	Final Appropriation   R'000	Actual Expenditure   R'000	(Over)/ under-expend   R’000	Expenditure as % of Appropriation.	Final Appropriation    R'000	Actual Expend.      R'000	(Over)/ under- expend   R’000	Expenditure as % of Appropriation.
Administration	1 621 877	1 607 482	14 395	99.1	1 762 212	1 373 037	389 175	77.9
Geospatial & Cadastral	676 947	668 582	8 365	98.8	652 389	618 203	34 186	94.8
Rural Dev.	1 832 279	1 814 769	17 510	99.0	2 009 507	1 995 657	13 850	99.3
Restitution	3 335 794	3 331 114	4 680	99.9	3 093 519	3 093 990	3 529	99.9
Land Reform	2 657 448	2 645 052	12 396	99.5	2 662 613	2 649 294	13 319	99.5
Total	10 124 345	10 066 999	57 346		10 180 240	9 730 181	454 059

Source:  DRDLR (2018) Annual Report of the Department of Rural Development and Land   Reform

 

Table 5 above shows that the programme that spent the least of its budget allocation in 2017/18 is Administration, with an expenditure rate of 77.9 per cent of its adjusted allocation. The Committee noted that the programme has regressed from a 99.1 per cent expenditure rate in 2016/17. According to the Annual Report, under-expenditure rate of 22.1 per cent can be attributed to 60.1 per cent under-spending in the Office Accommodation due to delays in the construction of the new Head Office Accommodation. The Committee welcomed that the programmes of Restitution and Land Reform were able to spend their budgets with an expenditure rate of 99.9 per cent and 99.5 per cent respectively. However, the Committee expressed concerns that the trend observed was that such expenditure rate was not concomitant to the delivery on the set targets. Only a fraction of the set targets was achieved.

 

Table 5 below accounts for the trends of the DRDLR’s irregular, fruitless and wasteful expenditure. The Committee noted the progress made in addressing some of the internal weaknesses to curb the irregular expenditure which is mostly linked to contravention of supply chain prescripts, especially late payment of invoices. It commended the DRDLR for ensuring a decline in the irregular expenditure from R45.7 million in 2016/17 to R2.9 million in 2017/18.  However, the Committee was concerned about a significant increase in Fruitless and Wasteful expenditure, from R852000 in 2016/17 to R11.5 million in 2017/18. Given that the Auditor-General reported that there were no steps taken to ensure that wasteful expenditure was prevented, the Committee recommended that the DRDLR should consider taking serious actions against those responsible for wasteful expenditure and that there should be consequences for those responsible.

 

Table 5: Irregular, fruitless and Wasteful Expenditure from 2014/15 to 2017/18

Year Incurred	Irregular Expenditure R’000	Fruitless &  Wasteful expenditure R’000
2014/15	25, 286	6,703
2015/16	4, 456	11,856
2016/17	45,700	852
2017/18	2, 946	11,545

Source: Adapted from DRDLR (2015, 2016, 2017, 2018b).

 

4.1.1     Trading Entities

 

This section focuses on the two trading entities, namely the Agriculture Land Holding Account (ALHA) and the Deeds Registration Trading Account (DRTA).

 

 

 

1. Agriculture Land Holding Account

 

The Agriculture Land Holding Account (ALHA), established in terms of the Provision of Land and Assistance Act of 1993, is responsible for the acquisition of strategically located land for agricultural development. The funds for this account are appropriated under programme 5 (land reform), for land redistribution in terms of the Proactive Land Acquisition Strategy (PLAS). ALHA, as a trading entity, leases farms to farmers for a period of 30 years and the lease payment is based on 5 per cent of the projected nett income, calculated by using the approved farmers’ business plan. The Committee noted that, State Land and Lease Disposal Policy, there was no lease payable for the old contracts. It further noted that the administration of the leases under this trading entity presented challenges that the DRDLR should consider giving attention.

Table 6: ALHA Budget vs Spending (2015/16 – 2017/18)

Item	2017/18	2016/17	2015/16
Transfers from DRDLR	R1.35 billion	R1.50 billion	R1.34 billion
Expenditure rate: Transfers	100%	100%	100%
Revenue: Exchange transactions	R102.7 million	R75.49 million	R64.32 million
Total Revenue	R1.46 billion	R1.60 billion	R1.42 billion
Total Expenditure	R529 million	R673.2 million	R515.7 million
Surplus	R935.5 million	R915.7 million	R897.15 million

Source: Adapted from DRDLR (2018) Annual Report of the DRDLR 2017/18.

 

The Committee noted that ALHA has spending 100 per cent of its transfer of R1.3 billion from the DRDLR and it has been maintaining such expenditure rate for the last three years as illustrated in Table 6 above. However, the Committee noted that the budget allocation or the transfers had decreased in 2017, and similarly, the amount of hectares have decreased. The Committee expressed concerns that ALHA has not been redistributing land at scale anticipated, as a result there is growing perception that restitution is the only measure for land access. It recommended ALHA should be prominent, especially given the current land debates about expropriation of land without compensation.

 

The Committee noted that the entity has not been able to generate revenue (through leases) that exceeds the transfers from the DRDLR. It thus remains tied to the government transfers. As demonstrated above, ALHA recorded a surplus of R936.5 million in 2017/18, which is a slight increase when compared to the surplus of R915.7 million in 2016/17. The Committee expressed concerns about the efficiency and effectiveness of management of ALHA.  It further expressed concerns with regard to possible irregular, fruitless and wasteful expenditure of R144.997 million linked to the SRR programme in 2017/18. It however encouraged the DRDLR to ensure that the forensic investigation into the fund was completed without delay and that there should be consequences for those that wound have contributed to fruitless and wasteful expenditure.

 

1. The Deeds Registration Trading Account

 

The Deeds Registration Trading Account established in terms of the PFMA is responsible for the registration of deeds and maintains public registers of land. Its main source of funding is fees charged on the registration of deeds and the sale of deeds information. Shortfalls in the account, if any, are appropriated from savings in Programme 2 budget of the DRDLR.

 

Table 7: DRTA Revenue vs. Expenditure (2014/15 – 2017/18)

	2017/18	2016/17	2015/16
Transfers from DRDLR	R22.818 million	R22.648 million	R50.31 million
Expenditure rate: Transfers	100%	174%	100%
Revenue: exchange transactions	R657.38 million	R632.28 million	R684.81 million
Total Revenue	R680.23 million	R654.9 million	R655.4 million
Total Expenditure	R686.67 million	R702.2 million	R597.53 million
Surplus/Deficit	-R6.471 million	-R47.14 million	R57.58 million

 Source: DRDLR (2018) Annual Report of the DRDLR - 2017/18

Table 7 above shows that the trading account transfers slightly increased from R22.648 million in 2016/17 to R22.818 million in 2017/18.  The Committee also commended the DRDLR for reducing the deficit for this trading account from R47.14 million in 2016/17 to R6.467 million in 2017/18. 

 

4.2        The Commission on Restitution of Land Rights

 

The budget of the CRLR was appropriated as programme 4 (restitution) of the DRDLR. A policy decision was taken to de-link the CRLR from the DRDLR as envisaged in the Restitution of Land Rights Act (1994) had not been implemented due to budgetary constraints. Given that the Auditor-General of South Africa found that the CRLR meets the criteria of public entity as set out in Section 3A of the PFMA, the Committee reiterated its position that the CRLR should convert to an autonomous public entity without delay. The question of the autonomy of the CRLR is discussed further under the section dealing with service delivery performance.

 

Table 8 below shows that Restitution Programme received the final appropriation of R3.098 billion in 2017/18 of which R3.094 billion was spent, representing 99.9 per cent of the total allocation. The Commission has maintained its expenditure trend of using 99.9 per cent of its budget allocation. Of the total allocation for the Commission, R2.411 billion was for restitution grants and the rest was split between the national and regional office as illustrated in the table below. All the sub-programmes spent almost 100 per cent of their final allocation for 2017/18. 

 

Table 8: Overall budget for the Commission

Sub-programme	2017/18				2016/17
	Final Appropr. R'000	Actual Expend. R'000	Variance R'000	Expenditure %	Final Appropr. R'000	Actual Expend. R’000	Variance R'000	Expenditure % a
Restitution National Office	116 607	116 454	153	99,9	94 108	90 730	3 378	96,4
Restitution Regional Office	570 406	568 867	1 539	99,7	564 072	562 992	1 080	99,8
Restitution Grants	2 410 506	2 408 669	1 837	99,9	2 677 614	2 677 392	222	100,0
TOTAL	3 097 519	3 093 990	3 529	99,9	3 335 794	3 331 114	4 680	99,9

Source: DRDLR (2018) Annual Report

 

The 2017/18 household expenditure, covering all aspects related to land acquisition and grant funding as illustrated in Table 9 below, was R2.519 billion. About 63.1 per cent was spent on financial compensation and 30.3% on land restoration. However, the expenditure decreased from R2.781 billion in 2016/17 to R2.519 billion in 2017/18. This decrease is mostly attributed to lower expenditure for land purchase and Recap/grants. The Committee noted a trend of increased spending on redressing by financial compensation as opposed to restoration of land rights. Further, the Committee observed that, over the last three years, there has been gradual decline in the number of hectares acquired related expenditure. In contrast, the expenditure on financial compensation has been increasing. Although land restoration is desirable, the Committee also recognises that the legislation gives claimants choices of land or financial compensation as a means for restitution.

 

Table 9: Household Expenditure

Office	Convey- ancers	Land Purchase & Land and Subsoil	Legal Fees	Financial Compensation	Re-Cap/ Grants	TOTAL
EC	207,456.94	70,855,000.00		461,979,854.59	40,618,813.60	573,661,125.13
FS		2,480,000.00		4,729,925.00	1,186,065.00	8,395,990.00
GP	165,285.11	489,272.10	121,963.68	68,125,530.29	39,000.00	68,941,051.18
KZN	21,614.92	272,611,213.49		481,713,648.55	15,586,222.00	769,932,698.96
LP	413,910.52	62,013,060.00		305,707,730.02	8,578,453.58	376,713,154.12
MP	291,621.60	78,252,225.56		60,520,762.37	59,333,444.70	198,398,054.23
NC	195,058.88	85,999,968.40		54,494,137.70	0.00	140,689,164.98
NW	562,584.91	188,864,805.16		98,261,232.44	22,543,925.48	310,232,547.99
WC		1,222,905.67		53,816,280.72	17,789,768.06	72,828,954.45
Total	1,857,532.88	762,788,450.38	121,963.68	1,589,349,101.68	165,675,692.42	2,519,792,741.04

 

Given the decision to transfer the Recapitalisation Programme to the Department of Agriculture, Forestry and Fisheries, the expenditure on recap/grants decreased by about 50 per cent in 2017/18 when compared to 2016/17. The expenditure indicated in Table 9 above relates to the Commission finalising payments for commitments already made.

 

From the total amount R2.5 billion, about 33.3 per cent (R889.2 million) was spent on backlog claims, and 67 per cent (R1.768 billion) was spent on claims approved in 2014/15. AS discussed above the financials for the last two years shows that less money was spent on land acquisition.

 

4.3.       The Ingonyama Trust Board

 

As shown in Table 10 below, the ITB’s main sources of income include revenue received from trading and investment activities, contractual and royalty revenue, and transfer of payments it receives from the DRDLR.

 

Table 10: Budget allocation and expenditure 2016/17 compared to 2017/18

	2015/16			2014/15
Income	Actual budget & expenditure R	As  per cent of the total  revenue	Actual budget & expenditure R		As per cent of the total  revenue
Rental Revenue	92 780 201	63,9%	109 088 487		72,9%
Finance Income	15 998 119	11,0%	1 527 822		1,0%
Contractual Revenue	794 157	0,5%	922 424		0,6%
Transfer Payment	19 727 000	13,6%	10 788 000		7,2%
Other revenue	15 797 913	10,9%	5 014 186		3,4%
Total Revenue	145 097 390	100,0%	149 540 919		100,0%
Total Expenditure (Exc. Capital)	81 878 853	56,4%	50 753 190		33,9%
Transfers of accumulated fund	63 218 537	43,6%	98 787 729		66,1%
Deficit	-	-	-		-

Source: ITB (2018) Annual Report of the Ingonyama Trust Board

The operating costs of the Board, mainly compensation of employees and goods and services, are covered by the transfers from the DRDLR. During the year under review, as illustrated in Table 10 above, the total revenue of the ITB was R145 097 390 million. Rental revenue accounted for 63.9 per cent of the total sum (i.e. R92.7 million), transfer payment and other revenue accounted for 13.6 per cent (i.e. R19.7 million), finance income accounted for 11 per cent (i.e. R15.9 million), contractual royalty revenue accounted for 0.55 per cent (i.e. R794 157.00) and other revenue accounted for 10.8 per cent (i.e. R15.7 million). The total expenditure of the ITB was R86,8 million encompassing R81.8 million on COE and goods and services as well as R4.9 million on capital expenditure.

 

In relation to the programmes, administration has spent 80.63% of the budget for the year under review. The 19.37% under expenditure was related to non-payment of municipal rates on the Ingonyama Trust land. With regard to Real Estate, 30.19 of the budgeted amount was used. The Committee noted that the Land and Tenure Management Services’ failure to deliver services was linked to unsatisfactory climatic conditions and lack of new agricultural projects. The Committee expressed concerns at this rate of performance which impacts on the intensions or purpose of the Ingonyama Trust whose land should be used form the material benefit of the communities living on the Trust land. For example, limited bursaries have been issued, yet the under expenditure.

 

The report of the Auditor-General of South Africa paints a very grim picture of the ITB. The Auditor-General expressed an adverse opinion on the consolidated AFS of the ITB, which includes the transactions of the Ingonyama Trust. However, as a separate entity, the ITB obtained a qualified audit opinion and the Ingonyama Trust obtained an adverse opinion. The adverse opinion was based on the following: land valuation, royalty income entitlement, receivables from exchange transactions (provision for doubtful debts not adequately provided for), and incorrect recognition of expenditure, i.e. expenditure allocation between the Ingonyama Trust and the Ingonyama Trust Board. The Committee noted the responses of the ITB in relation to the audit process, especially arguing that the Auditors did not give fair opportunity for the ITB to respond or give evidence to some of the statements it made regarding land valuation. The matter on the royalty entitlement remain unresolved as was the case in the previous years. The Committee noted that the ITB has requested that the matter be referred for mediation or arbitration between the ITB and the Auditor-General.

 

4.4        Office of the Valuer-General

 

The Office of the Valuer-General (OVG) was set up in terms of the Property Valuation Act, 2014 (Act No.17 of 2014). The Property Valuation Act (PVA) became effective on the 1st of August 2015 and therefore, OVG officially started on the 17th August 2015. The OVG was listed as schedule 3A public entity in terms of the Public Finance Management Act, 1999 (Act No. 1 of 1999) on the 28 March 2018. It only started to operate as a stand-alone public entity reporting directly to the Minister of Rural Development and Land Reform in the 2017/18 financial year.  Its first Annual Performance Plan was tabled for 2018/19. The OVG tabled its first Annual Report for 2017/18 in September 2018. In the absence of separate APP for the year under review, it was difficult to assess the performance of the OVG.

 

The financial report of the OVG is reported under the main vote. However, the following shows the Highlights of achievements in 2017/18:

 

• It established a programme on land reform valuations in collaboration with the South African Council for the Property Valuers Profession and the University of Cape Town (UCT) to equip property valuers with advanced skills regarding the valuation of properties to be acquired by the State under the provisions of PVA and in line with Section 25(3) of the Constitution. Ten professional valuers in the OVG, including the Valuer-General, have been trained to in conducting such valuations.
• Property valuation support was provided to the DRDLR based on the work that is provided to the OVG. The OVG was also provided approached by Department of Public Works and the Department of Water and Sanitation to prepare valuation reports on their behalf. However, the list of properties that valuated by the OVG is not provided.
• Progress has been made in the establishment of OVG. One of those was the appointment of Ernst &Young to assist with the determination and designing of its business model and the establishment of adequate systems of internal control. Further, the OVG has published the Valuation Regulations in line with the PVA.
• The OVG received clean audit from the Auditor General in the year under review.

 

With regard to the financial performance, the OVG received a budget of R64.8 million in the 2017/18 financial year and also got an approval from the National Treasury to retain R9.199 million, which means it received a total of R74 million. At the end of the 2017/18 financial year, it spent R16.136 million, leaving a balance of R57.869 million. It is reported in the Annual Report that an application to the National Treasury to retain and use unspent funds will be made.

 

5.       Overview of Service Delivery Performance

 

This section discusses an overall performance of the DRDLR, the CRLR and the ITB. They were assessed against the predetermined objectives set out in the 2015/16 APP and the relevant strategic plans.

 

5.1The Department of Rural Development and Land Reform    

 

Table 11 below shows that in 2017/18, the DRDLR achieved 16 of 27 annual targets which is a performance success rate of 59.3 per cent. The Committee noted that the DRDLR has used a phrase of “partially achieved” which does not appear in the APP. However, with regard to financial performance, 95.5 per cent of the allocated budget was spent. According to the Committee, when one compares this performance rate to the 76.7 per cent achievement of targets in 2016/17, this is a regression. The Committee expressed concerns that the DRDLR was not responding to the land demands as has been evident in the public hearings of the Portfolio Committee as well as those of the Joint Constitutional Review Committee.

 

Table 11: Non-financial versus Financial Performance per Programme in 2017/18

PROGRAMMES	Annual Target	Targets Achieved	Performance Rating	Final Appropriation R'000	Budget Expenditure R'000	Budget Expenditure %
Administration	2	1	50.0%	1,762,212	1,373,037	77.92
Geospatial & Cadastral Services	5	3	60.0%	652,389	618,203	94.76
Rural Development	7	7	100.0%	2,009,507	1,995,657	99.31
Restitution	3	1	33.3%	3,097,519	3,093,990	99.89
Land Reform	10	4	40.0%	2,662,613	2,649,294	99.50
Total	27	16	59.3%	10,184,240	9,730,181	95.54

Source: Adapted from DRDLR (2018).

 

As reported in the 2017 BRRR, the DRDLR has continued to struggle to adhere to its legislative programme. Most of the pieces of legislation that it was meant to table in Parliament was not ready by the end of the financial year, except the Communal Property Associations Amendment Bill. Similarly, the weakness in policy development and piloting of new policy initiatives prior to a roll out continued to be a problem, hence the reported irregularity in the SRR projects, the One Household One Hectare and related initiatives. The Committee emphasised a need to focus in policy development so as to clear all the misunderstandings about policy outcomes and intended beneficiaries.

 

The following sections presents analysis of service delivery according to main programme areas:

 

Administration:  This programme achieved one of the two annual targets, which represents a performance success rate of 50%. This performance rate has been maintained over the last two years. With regard to the budget, the programme spent 77.9 per cent of its allocated budget in 2017/18, a regression from 99.1 per cent in 2016/17. Among the reasons for this performance rating is failure to pay all valid invoices within 30 days upon receipt. The Committee noted that in the year under review, the programme managed to pay 87 per cent of valid invoices against a target of 100 per cent. The DRDLR ascribed the non-payment of all valid invoices to a depleted budget.

 

Geo-spatial and Cadastral Services: This programme achieved three of the five annual targets, success rate of 60%. It continues to struggle to meet the target on the percentage of deeds made available within seven days from lodgement to execution, and the average number of working days taken to process registerable diagrams, sectional plans and general plans. In addition, the DRDLR reported that it did not have adequate capacity in its new Deeds Offices; other factors were the changing of registration boundaries which meant that the increase in volumes in some offices could not be predicted, and occasional power outages in some offices. The OVG has managed to set its offices and the office is fully functional as reported above.

 

Rural Development:  This programme achieved all seven annual targets of which six were exceeded. The Committee commended the DRDLR for maintaining 100 per cent success rate under this programme. However, the Committee was concerned that the socio-economic impact of the rural development interventions has not been quantified yet. However, the DRDLR reported of its continuous monitoring and evaluation programme as well as socio-economic impact assessment of all land reform projects. It also was concerned about the quality of jobs reported as well as the sustainability of the jobs that are reported by the DRDLR.

 

Land Reform: This programme achieved 4 out of 10 annual targets, a performance success rate of 40% in the year under review. This represents a significant decline compared to the performance success rate of 75% in 2016/17. The Committee was greatly concerned about land reform as it is the main programme for the DRDLR, especially at this juncture in the history of South Africa where there are increasing for faster pace of land reform, especially calls for expropriation of land without compensation and redistribution which targets the poor. The report indicates that a number of hectares were allocated to smallholders, yet it was not clear how the DRDLR defines smallholder, at times it has been used with emerging commercial farmers. The Committee reiterated that there is a need for policy clarity as well as clear criteria for selection of smallholders to benefit from land redistribution programme.  The Committee further commended the programme for exceeding the target on the number of hectares allocated to farm dwellers and/or labour tenants was exceeded.

 

5.2        Commission on Restitution of Land Rights

 

The Commission settled more than 99 per cent of the claims lodged by December 1998, with restoration of 3.4 million hectares. In total, restitution has already benefited 2.1 million beneficiaries at the cost of R40 billion inclusive of financial compensation. The Committee noted and welcome the progress made by the Commission. It however expressed concerns with the decrease in the amount of land acquired for restoration. It further noted that most of the outstanding land claims are the most complex and involving large tracts rural agricultural land. Therefore, the Commission has to ensure that it is capacitated well enough to deal with the challenges that these types of land create.

 

Table 12: Annual Performance and Expenditure from 2014/15 -2017/18

	2017/18	2016/17	2015/16	2014/15
Total Annual targets	4	4	5	5
Targets achieved	2	3	4/5	5/5
Targets not met	2	1	1/5	0
Performance success rate	50%	75%	80%	100%
Programme Expenditure	R3.094 billion	R3.333 billion	R2.630 billion	R2.997 billion
Expenditure Rate	99.9%	99.9%	98.3%	99.9%

Source: CRLR (2015, 2016,2017, 2018): Annual reports of the CRLR (2014/15, 15/16, 16/17, 17/18) 

 

In the year under review, the Commission achieved two of the four targets set for the year, which is a performance rate of 50%. This is the lowest performance rate compared to the three previous years. The Commission spent R3.094 billion of the allocated budget of R3.098 billion in 2017/18.

 

 

Table 13: Performance against set targets in 2017/18

Strategic Objective	Performance Indicator	Target	Actual	Variance
Facilitate the restoration of land rights or alternative forms of equitable redress by 2020	No of claims finalised No of claims settled No of phased projects approved No of pre-1998 claims to be researched	724 1 001 105 916	865 850 71 1  197	+141 -151 -34 +281

Source: CRLR (2018a).

 

The Committee welcomed progress made with regard to the finalisation of claims settled prior to 2016/17 financial year. It was commended for exceeding the targets. As discussed above, there has been an increase in the finalisation of claims through financial compensation rather than land restoration. The Committee was concerned that for the first time in four years, the Commission did not meet its target to settle claims in 2017/18. The concern was compounded by the fact that the CRLR reported that the variance of 151 was linked to the delays in in the OVG in terms of valuations and recommendations. As a result of valuations done by the OVG, there has been an increase in the number of rejection of offers by landowners. The OVG reported that its basis for valuation is not market value. It is however guided by the Constitution which provides that compensation must be just and equitable.

 

5.3        The Ingonyama Trust Board

 

The ITB achieved 11 of the total 30 targets for the Key Performance Indicators (KPIs). This represents a 36.7 per cent performance rate, a regression from 42.9 per cent reported in the previous reporting period.  Administration achieved 5 of the 18 targets (across 9 strategic objectives) and Real Estate achieved 6 of the 22 targets (across 8 Strategic Objectives).

 

Administration

 

For the past two consecutive years, the ITB has struggled to meet the number of targets on the policies to be approved.  During the period under review, the ITB yet again failed to review 6 policies as planned. One of the greatest concerns relate to the fact that most of the challenges related to non-performance on key performance indicators is linked to a review of an organogram and failure to fill vacant positions which result in capacity constraints for the ITB. The Committee expressed concerns that it was the ITB that sets target for itself and therefore suggested that the poor performance reflected poor planning on the part of ITB. It appears that the failure to finalise the organogram has affected the ITB performance significantly.

 

Real Estate

 

Considering the inability of the ITB to recruit the Real Estate Manager, it was again not surprising that this programme failed to meet its targets as was the case in the previous year. As a result, a land tenure policy was not developed, number of land tenure rights planned for approval by the board could not be achieved, no traditional council was supported to development their own development plans.

 

6.         Summary of observations of the Committee

 

This section summarises the Committee’s observations and conclusions. It draws on analysis presented in preceding sections, especially financial and service delivery performance for the 2014/15 financial years. The report of the Auditor-General of South Africa (AGSA) was also a useful resource against which some of the observations of the Committee were tested. The section is divided into three sections, namely technical issues, governance, service delivery and financial observations.

 

6.1        Technical and governance issues

 

In line with the observation that the priorities of the Department and the entities are aligned to the priorities of government as outlined in the National Development Plan and the State of the Nation Address, the performance report has also shown that the Department and entities have followed suit, especially in relation to fighting poverty and unemployment. However, there is a greater need to finalise reconfiguration of government in order to address the current duplication of mandates between DAFF and DRDLR.

 

Analysis of reports on the predetermined objectives (AOPO) shows that, in some instances the key performance indicators and the reasons for variance did not align. This was especially prevalent in the report of the ITB.  The Committee further found that there were certain targets that were not helpful for accountability purposes. For example, “number of infrastructure projects facilitated” which is not specific and thus making it difficult to hold the DRDLR to account. One of the major findings of oversight work showed that there were high levels of dissatisfaction among beneficiaries on the levels of support. For example, communities still waiting for the grant funding as provided in Restitution of Land Rights Act. The Committee further pointed out that there is a need for the DRDLR to finalise assessment of all land reform project in order to assess the socio-economic impact of its interventions.

 

The Committee commended the DRDLR, the CRLR and the ITB for continuous improvement in the quality of the annual reports presented, especially achievement of the unqualified audit opinion. However, it was concerned about the adverse opinion given to the Ingonyama Trust and the Ingonyama Trust Board combined. There was need for the Minister of Rural Development and Land Reform to provide oversight over the ITB. Concern was that the records show that the representative of the Minister in the Board did not participate in most of the Board meetings.

 

The Committee noted the Auditor-General finding that both the DRDLR and the ITB needed to improve the quality of financial statements submitted. The regression of the ITB due to failure to disclose land as required by GRAP was a great concern. ALHA and DRTA received unqualified audit opinion with no findings whereas the DRDLR obtained unqualified audit opinion with emphasis of matters. For the first time, the OVG was audited as an independent entity. The Committee noted that it obtained unqualified audit opinion with no findings. It is seen as a good start, however there are serious issues that the OVG must deal with as per the recommendations of this report.

 

6.2.       Service delivery against the pre-determined objectives

 

With regards to service delivery, the Committee made the following findings:

 

• There is an urgent need for increasing the finances of the CRLR to deal with the pressing needs for finalisation of the land claims, and establishing the CRLR as a national public entity that is autonomous.
• Introduction of the new initiatives such as the blended financial model and land redistribution as part of stimulus package means that additional funding will be required.
• Land claims processes and a need to conclude on all the pre-1998 land claims has been a key priority, and the lodgement process in terms of the new amendment Act. However, the backlog claims and related commitments pose a threat to restitution. The CRLR is exposed to risks due to these commitments. Urgent intervention by ring-fencing funding to clear the commitment register is vitally important. The pending court matter in relation to the Restitution of Land Rights Amendment Bill also places the CRLR at an uncertain position regarding the land claims lodged after 2014 and were put in abeyance in terms of the LAMOSA judgement.
• Although the DRDLR had planned to achieve unqualified audit opinion without findings, it still achieved unqualified audit opinion with emphasis of matters. Whilst the continued unqualified audit opinion is commended, the Committee still emphasized a need to achieve unqualified without findings. Further, clean audit committee should correspond with client satisfaction on services rendered.
• Of the planned five pieces of legislation to be tabled, the DRDLR tabled only one – CPA Amendment Bill. None of the policies were referred to the Committee during the year under review.
• The matter of SPLUMA’s administration being transferred to the Presidency remain unresolved. The implications of this cabinet could still not be explored in detail due to lack of information in relation to policy direction.
• The Committee found that majority of senior positions in the department were vacant and people were occupying the position on an acting basis. As the performance indicates, delivery of services has been affected. With regard to the ITB, the Committee expressed concern regarding lack of progress in appointment of key positions such as real estate management personnel.

 

6.3.       Financial Performance including funding proposals

 

For the year under review, the Committee observed that lack of capacity in the Land Tenure and Administration affected CPAs’ compliance to the relevant legislation, and failure of the Department to regularise them. Similarly, failure to process the Labour Tenants applications, especially in KZN, was because of lack of budget for this sub-programme.

 

The CRLR continued to be exposed to commitments arising from settlements that occurred prior to 2017/18 financial year. Many of the claims settled and finalised before 2009 were still waiting for their grant funding which the Commission has not released. Lack of funding has affected ability of land restitution beneficiaries to use their land productively.

 

The idea that the DRDLR, together with National Treasury and the DRDLR of Agriculture, Forestry and Fisheries were developing an integrated funding model for settlement support to land reform beneficiaries, smallholder farmers and emerging commercial was welcome and would be monitored. The recent pronouncement of a stimulus package by the President, and further engagement between the DRDLR, National Treasury, Land Bank and the DAFF was welcome initiative that could result in positive land reform outcomes, especially in productivity and job creation.   

 

1. Recommendations

 

In view of the above observations and conclusions, the Committee recommends to the National Assembly that –

 

 

 

1. The Minister of Finance should, 

 

1. Assist the Commission on Restitution of Land Rights to develop and implement strategies for settling the commitment register of R5 billion within the MTEF period. The strategy should also address deal with the suspense account of the Commission.

 

1. Support the Commission, which meets the criteria for a national public entity in terms of Section 1 of the PFMA, to become a fully autonomous entity as envisaged in the Restitution of Land Rights Act, Act No. 22 of 1994. Autonomy will help the CRLR to comply with the requirements of an entity as well as improve service delivery efficiency. Therefore, the Minister in consultation with the Minister of Rural Development and Land reform and the Chief Land Claims Commissioner, should consider making budgetary allocation that would allow the CRLR to be an autonomous national public entity accountable to the Minister of Rural Development and Land Reform as well as Parliament.

 

1. Assist DRDLR and DAFF to develop a comprehensive policy on integrated development support for agricultural land reform in line with the blended finance model involving the National Treasury and the Land Bank.

 

1.  Ensure that the budget is allocated for the OVG to enable smooth running of the office

 

The Minister should submit a report on these recommendations within three months of adoption of this report by the National Assembly.

 

1. With regards to the Commission on Restitution of Land Rights, the Minister of Rural Development and Land Reform should –

 

1. Assist the CRLR to develop and submit a business case for an autonomous CRLR together with all short-term and long-term funding requirements. The document should include details of its business process mapping, institutional structure, and business re-engineering approach and the cost implications for the project. These documents must be submitted to Parliament before the Committee deals with the Budget Vote for 2019/20. 

 

1. Conduct analysis of all untraceable land claimants (both researched and settled claims not yet finalised) and submit a report to the Portfolio Committee on Rural Development and Land Reform. .

 

1. Table a comprehensive report on commitments in the form of grants approved in terms of Section 42C of the Restitution of Land Rights Act before 2009, and further outline a realistic plan, in line with budget allocation, regarding the settlement of the commitment register. This plan must be submitted to the Portfolio Committee on Rural Development and Land Reform for oversight of implementation.

 

1. With regards to the Department of Rural Development and Land Reform, the Minister must –

 

1. Conduct a national survey of all farms acquired through land reform programme since 1994 to date. The survey, which focuses on assessment sustainability of farms and the socio-economic and livelihoods impact of land reform on beneficiaries, must be tabled in parliament for further debate and informing policy direction and legislation development.

 

1. Complete policy consultation process to develop a White Paper on Land Reform which would give guidance and direction to South African land policy. The white Paper will become a useful policy tool that Parliament can use to oversee the DRDLR and all the relevant entities.

 

1. Finalise all investigations, internal and external ones, including forensic investigations in order to deal with all the allegations of corruption and maladministration. Critical areas of concern relate to ALHA, SRR, Agri-parks initiatives and Restitution.

 

1. Noting the slow pace to table Bills in line with the legislative programme, ensure that the DRDLR must adhere to the revised legislative programme as agreed with the Office of the Leader of Government Business.

 

1. Continue to coordinate Agri-Park interventions with the Department of Agriculture Forestry and Fisheries. Further engage the Department of Small Business and the Department of Trade and Industry to maximise use of limited resources and avoid duplication of government services and enhance the capacity to coordinate expertise from elsewhere in government and non-government entities.   Such coordination should be strengthened at both policy and implementation levels.

 

1. Submit progress report on the implementation of a Cabinet decision to transfer the administration of SPLUMA to the Presidency (DPME).

 

1. Ensure that the DRDLR should build internal capacity to carry out the mandate for tenure reform and land administration; this is particularly urgent for provision of support to CPAs, and processing of labour tenants’ applications. Further, submit a status report on processing of labour tenants’ applications by the end of the 2018/19 financial year including, but not limited to the total applications received by provinces, the extent of land by district, the cost estimates for processing such applications, and possible time frames. 

 

1. Prioritise the filling of vacant critical and strategic positions in the DRDLR and entities in order to reduce the number of persons acting in such positions. It is envisaged that filling the vacancy will create stability and reduce the existing sense of uncertainty among current senior management and the DRDLR at large.

 

 

1. Ensure that the DRDLR complies with the payment of invoices within 30 days in with the National Treasury guidelines.

 

1. Ensure that, prior to implementation of new programmes, there are clear and well understood policies that are widely canvased among stakeholders and wider South African to guide policy implementation. Such approach would ameliorate some of the fruitless and wasteful expenditures such as those incurred under SRR.

 

1. Closely monitor the construction of the central office park under the PPP arrangement in order to avoid wasteful expenditure and possible corruption.

 

1. Improve the capacity within the DRDLR to collect revenue, especially leases collection under ALHA.

 

1. With regards to the Office of the Valuer-General, the Minister should –

 

1. Ensure that management implement proper processes, policies and procedures, and appoint skilled relevant staff to enable the OVG to function and comply with the relevant laws and regulations

 

1. Facilitate discussion between the OVG and other relevant branches within the DRDLR and to conclude service level agreements on valuations in order to avoid delays with regards to valuations. Further, clarifying all the policy requirements as well as the timeframes would alleviate the perceived tensions arising from the reasons cited for the delays in land restitution.

 

1. Fast track the establishment of the Independent Quality Review Committee.

 

1.       With regards to the Ingonyama Trust Board the Minister should –

 

1. Ensure that management implement proper processes, policies and procedures, and appoint skilled relevant staff to enable the ITB to function and comply with the relevant laws and regulations
2. Speedup facilitation of engagement between the ITB, National Treasury, and the Auditor-General together with the Accountant General by the end of 2018/19 in order to address the perennial non-compliance of the ITB with the GRAP standards in relation to valuation of land and royalty revenue entitlement.
3. Consider the request for mediation between the Auditor-General and the ITB to resolve the current impasse as suggested by the Ingonyama Trust Board.
4. Conduct, together with the ITB, the livelihoods impact of the programmes of the ITB and the Act with a focus on land tenure and administration, leasehold tenure system and protection of customary land rights of traditional communities.
5. Having concurred with the recommendations of the Auditor-General, the Committee recommends that the Minister should develop action plan that outlines how the DRDLR and entities plan to resolve the queries from the Auditor-General. Further, the Minister should submit the report to the Committee for future oversight and accountability.
6. Ensure that there is improvement on financial management and controls.

 

The Minister should report to Parliament, about these recommendations, within three months of adoption of this report by the National Assembly.

 

Report to be considered.