The Budgetary Review and Recommendation Report of the Portfolio
Committee on Rural Development and Land Reform, dated 20 October 2011
1. Introduction
The Money Bills Amendment Procedures and Related Matters Act, 2009 (Act
No.9 of 2009) requires that the National Assembly, through its committees,
conduct annual assessment of the performance of each national department with
regard to the medium term estimates of expenditure. This report accounts for
the processes that the Portfolio Committee on Rural Development and Land Reform
(the committee) undertook during assessment of the performance of the
Department of Rural Development and Land Reform (the department). It further
proposes the Budgetary Review Recommendations.
1.
The role of
the Portfolio Committee on Rural Development and Land Reform
The committee oversees the
Department of Rural Development and Land Reform that has a transversal function
that aims to create and maintain an equitable and sustainable land
dispensation. In addition, the committee oversees the work of the Commission on
Restitution of Land Rights (the Commission) established in terms of the
Restitution of Land Rights Act, 1994 (Act 22 of 1994), and the KwaZulu-Natal Ingonyama Trust (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.
In accordance with the Rules
of the National Assembly, the committee is mandated to, amongst others,
consider departmental budget votes; oversee the work of any organ of state
falling within its portfolio, enquire and make recommendations about any aspect
of the department, including its structure, functioning and policy. In view of
this mandate and section 5 of Act 9 of 2009, the committee has embarked on a
process to develop budgetary review recommendations as follows:
·
It analysed the strategic plan of the department
(including the commission) and the Ingonyama Trust
Board;
·
It considered the financial statements of the
department, the commission and the Ingonyama Trust
Board and their reports on the pre-determined objectives espoused by their
strategic plans;
·
It analysed the report of the Auditor-General of
·
It considered other sources such as the State of the
Nation Address and oversight reports of the committee.
2.
The Department
of Rural Development and Land Reform
The mandate of the department
is derived from the priorities of government’s Medium-Term Strategic Framework
(MTSF), Outcome 7 of the 12 Outcomes being implemented by over the MTSF period.
Outcome 7 seeks to ensure creation of vibrant, equitable and sustainable rural
communities and food security for all.
According to the 2010 – 2013
Strategic Plan, the vision of the department was “Vibrant, Equitable, and
Sustainable Rural Communities”. Its mission was to “facilitate integrated
development and social cohesion through participatory approaches in partnership
with all sectors of society”. The committee noted that the mission of the
department, articulated by the 2011 – 2014 Strategic Plan, puts emphasis on its
key functions - “to initiate, facilitate, coordinate, catalyze
and implement an integrated rural development programme”. It was against this
understanding that assessment of the performance of the department by the
committee was made.
2. The 2010/11 Strategic Priorities and Measurable Objectives of the
Department
The 2010 – 2013 Strategic Plan has set out four major outputs on which
the success of the department was assessed; that is, sustainable land reform,
food security for all, rural development and sustainable livelihoods and job
creation linked to land reform. Agrarian transformation has been identified as
a strategy for rural development and the department defines agrarian
transformation as “the rapid fundamental change in the relations of land,
livestock, cropping and community”. That strategy entails the following: social
mobilization of rural communities to take initiatives; strategic investments in
economic and social infrastructure; increased economic activity and rural
livelihoods; and sustainable land reform. These are fundamental elements of the
comprehensive rural development programme which was
set out in order to deliver on Outcome 7.
The proposals in the strategic plan could be categorized into four
themes; namely, rural development and sustainable livelihoods sustainable land
reform, food security and job creation; and some key targets were summarised as follows:
·
Rural
development and sustainable livelihoods:
the Comprehensive Rural Development Plan (CRDP) was the main vehicle through
which integrated development of rural areas could be achieved. Social
mobilization of communities in the 160 wards in manners that would lead to
creation of community organizations and cooperatives by 2014 was accorded high
priority.
·
Sustainable
land reform: Review of the land
tenure systems was introduced but the plan deferred the concrete policy
proposals to green paper which was to be gazetted in
2010. It further stated that land reform would adopt the CRDP principles which
are considered pivotal to achievement of vibrant rural communities and food
security.
·
Food Security: A crucial element was to establish community gardens
and agri-parks.
·
Job creation
linked to skills development: Through
household profiling by National Integrated Social Information System (NISIS),
the department had planned to determine skills and employability of
beneficiaries of land reform. This household profiling is reported to be of
assistance with regard to targeting training and development in accordance with
job creation opportunities. The department would facilitate infrastructure
development, in both land reform projects and CRDP sites, in a manner that
created job opportunities for the rural communities.
Table 1 (below) outlines the overall strategic focus of the department
in five programmatic areas. It differed with the 2009/10 organization of programmes where the department had seven programmes. During the year under review, four programmes, namely Surveys and Mapping, Cadastral Survey
Management, Spatial Planning and Information and the Deeds Registries were
collapsed into a single programme known as the
Geo-spatial and Cadastral Services. In addition, a fully-fledged and funded programme of rural development was introduced for the first
time. It should, therefore, be noted that the 2010/11 Annual Report is the
first to provide reporting on a full component of a fully funded programme of rural development because during the 2009/10
when rural development was introduced it did not have a dedicated voted funds
except that the department had to do some internal shifting of funds to perform
on this key priority of government.
Table 1: Predetermined
objectives of the Department of Rural Development and Land Reform
|
Programme |
Strategic objective |
Measurable output |
|
Administration |
·
To ensure
efficient and effective functionality of the department to support core
vision |
·
Skilled and
capacitated department to deliver on the departmental mandate ·
Periodic
performance reports on departmental performance ·
Provisioning of
an enabling environment for improved financial compliance and service
delivery |
|
Geo-spatial and cadastral surveys |
·
Provision of
efficient and effective cadastral surveys ·
Provision of
efficient deeds registration that underpins security of land tenure |
·
Surveyed state
land, registrable diagrams, general plans,
sectional plans and communal general plans ·
Approved
diagrams, general plans and sectional plans and sectional titles ·
Complete and
current cadastral information for all land parcels in both paper and digital
format, including the creation of national spatial data set ·
Registration of
deeds ·
Natural
resources conservation ·
Disaster
Mitigation Management |
|
Rural Development |
·
To contribute
to the availability of, and increased access, to food security ·
Contribute to
sustainable rural development and livelihoods ·
Increased
income and access to job opportunities |
·
Community and
institutional school gardens developed; ·
Establishment
of agri-parks through CRDP ·
Community
structures established to support social cohesion and development ·
Job creation
linked to skills training ·
Roll out of
CRDP to contribute to sustainable development ·
Economic,
social ICT and public amenities infrastructure developed ·
Research
conducted to enhance rural development initiatives |
|
Restitution |
·
Settlement of
outstanding restitution claims |
·
Number of
claims settled |
|
Land Reform |
·
To ensure
sustainable land reform aligned to CRDP ·
To contribute
to the availability of and increased access to food security for all |
·
Strategically
located land acquired and redistributed ·
Improved access
by beneficiaries ·
Recapitalization and
development of farms in distress acquired since 1994. |
Source: Adapted from the 2010
– 2013 Strategic Plan of the DRDLR
The Public Service Commission’s (PSC) Monitoring and Evaluation Report
for the Department of Rural Development and Land Reform for the 2010/11 period
found that there has been compliance with the norms and standards for
development of the strategic plan. However, the PSC raised some matters that
the department should critically look at; for example, the measurability of
some of the indicators. In similar veins, the committee has raised concerns,
when considering the Annual Performance Plan (APP) of the department, how
certain targets were arrived at. During consideration of the PSC’s report, the committee noted that it focussed on compliance (ticking the boxes) but it did not
expound on the impact of interventions. That was considered to be the weakness
of the assessment done.
The committee commended the department for a strategic plan that
appropriately captured the mandate of the department, especially linking rural
development and food security. However, it noted the following: firstly, whilst
there has always been commitment to resolve the restitution claims, it did not
appear convincingly that the commission would be able to resolve all the claims
by 2014; secondly, the land reform programme include
the constitutional imperatives of tenure reform and redistribution. However,
the strategic plan had down played the significance of tenure reform, hence no
strategic objectives, measurable outcomes and targets were set for tenure
security in communal areas or tribal areas and on commercial farms.
3. Analysis of the Prevailing Strategic Plan (2011 – 2014)
During the current MTEF period, the performance of the department is
measured on the progress made towards delivery on Outcome 7 of the 12 Outcomes
of government. In response to President Jacob Zuma’s
call, during the State of the Nation Address, to improve the lives of rural
people and to focus on job creation during 2011, the department identified the
following key priorities:
·
To roll out the
CRDP to all rural communities.
·
To improves the
lives of rural youth through the National Rural Youth Service Corps (NARYSEC).
·
To improve
productivity in land reform projects through effective implementation of the Recapitalisation and Development Programme.
·
To expedite the finalisation of land claims.
·
To improve
corporate governance and ensure enhanced service delivery: to ensure internal
control, an issue of concern raised by the Internal Audit Committee and Auditor
General.
·
To implement
proper change management and innovation strategies.
·
To enhance the efficiency
of information management.
3.1. Performance and Service Delivery Information
This section presents the plans of the department in terms of the key
focus areas; namely CRDP, land reform (encompassing tenure reform,
redistribution and restitution), integration of agricultural support, and job
creation and these focus areas integrated in the strategic objectives as
illustrated in Table 2 of this report.
·
The CRDP:
The department prioritised the roll out of the CRDP
strategy, aiming to eliminate poverty and food insecurity in rural areas.
Whilst the CRDP was rolled out in 29 wards during 2009/10, 39 sites in 2010/11,
the department has planned to roll it out to all rural municipalities in the
MTEF with a target of 180 rural wards by January 2012.
·
Redistribution:
The target for redistribution is to
redistribute 30 per cent of agricultural land by 2014 (24. 6 million ha). For
the period under review, the department had planned to focus on finding
alternatively less costly methods for acquisition of land, and proposed to
review the willing buyer - willing seller approach to land redistribution. A
policy decision was taken to implement redistribution through the Proactive
Land Acquisition Strategy (PLAS).
·
Restitution: By the end of March 2010, the commission had settled 96
per cent of the total 79 696 land claims. The majority of outstanding
claims are of a complex nature, involving national strategic assets such as
national parks, large commercial farms linked to export markets. The department
has been confronted by the challenge of increasing land prices and budgetary
constraints resulting from the ever decreasing allocation for restitution.
·
Recapitalisation
and development of land reform projects:
This initiative was initiated as a response of the department to support
increased production on land reform farms. It further was also an attempt to
integrate land reform and agricultural support by providing agricultural
technical and financial support to farmers.
Table 2: Predetermined
objectives of the Department (2011/12)
|
Programme |
Strategic objective |
|
|
Administration |
·
Effective,
efficient and fair human resource management practices provided and ensured ·
Legal services
rendered to the entire department ·
Improved service
delivery within the department and rural communities through provision of
ICT, knowledge and information management ·
A comprehensive
result based planning, monitoring and evaluation that drives the organization
and ensure delivery on expected outcomes by 2014 ·
Effective and
efficient corporate communication services improved by 2014 ·
Effective and
efficient financial services provided by 2014 ·
Develop rural
development and land reform policies and legislation by 2014 ·
Institutional reforms
(Valuer-General, Rural Development Agency and Land
Management Commission) giving effect to the department’s new mandate in place
by 2014 |
|
|
Geo-spatial and cadastral surveys |
·
Promote an
equitable, sustainable land use and allocation by facilitating an integrated
land planning and administrative system by 2014 ·
Surveyed and
registered state and Trust land ·
Develop a ·
Scarce skills
training programme by 2014 ·
Improved
disaster management services in rural areas and land reform projects by 2014 ·
National geospatial information and services in support of the
national infrastructure and sustainable development provided by 2014 ·
40% increase in
technological innovations and indigenous knowledge systems harnessed in rural
communities to improve food production in 2014 |
|
|
Rural Development |
·
Profile rural
wards and mobilize rural households in all municipalities ·
Establish food
gardens and agri-parks in CRDP wards by 2014 ·
Skilled and
capacitated rural development and land reform beneficiaries ·
To develop and
utilize innovative service delivery models ·
To increase the
number of jobs created in CRDP initiatives by 2014 ·
To provide
economic infrastructure in rural areas effectively reducing spatial
inequalities by 5 per cent ·
To provide
social infrastructure in rural areas effectively reducing spatial
inequalities by 5 per cent ·
To provide ICT
infrastructure in rural areas effectively reducing spatial inequalities by 5
per cent ·
To establish
village industries and enterprises by 2014 ·
Establish
Council of Stakeholders for each CRDP site by 2012 ·
Establish
partnerships for economic productivity on CRDP sites |
|
|
Restitution |
·
Restitution of
land rights or awards of alternative forms of equitable redress to claimants finalised within MTEF baseline allocation |
|
|
Land Reform |
·
1 140 860
hectares of strategically located land acquired and allocated within MTEF
baseline allocation by 2014 ·
Recapitalisation and
development support provided to black farmers, rural communities and land
reform beneficiaries by 2014 |
|
Source: Adapted from the 2011
- 2014 Strategic Plan of the DRDLR
Comparative analysis of the strategic objectives of the previous and
the prevailing strategic plans shows that the department has, in 2011/12
developed more objectives in order to achieve Outcome 7. The increase in
the number of objectives has implications for staffing and capacity building.
The committee welcomed that most of the objectives were measurable and had been
clearly developed in the 2011/12 Annual Performance Plan (APP). Whilst there
was an increase in the number of objectives in different programmes,
the committee was concerned about land reform as core programme
of the department; it effectively omitted communal tenure reform and tenure
reform on commercial farms.
4. Analysis of Expenditure Reports
This section presents analysis of the outcomes for the first quarter expenditure
for the year under review. It further analyses the first and second quarter
expenditure for the department. .
Table 3: 2011/12 Budget
Allocation and spending trends for the 1st quarter
|
Programme |
Final Appropriation R’000 |
Year-to-date Actual Expenditure R’000 |
Expenditure as % of final appropriation |
|
|
|
|
|
|
Administration |
606 104 |
144 104 |
23.88% |
|
Geospatial & Cadastral Services |
388 104 |
98 120 |
25.28% |
|
Rural Development |
441 276 |
77 968 |
17.67% |
|
Restitution |
2 497 293 |
297 306 |
11.91% |
|
Land reform |
4 191 469 |
917 665 |
21.89% |
|
|
|
|
|
|
Total |
8 124 246 |
1 535 811 |
18.90% |
Source: Adapted from National
Treasury (2011) Section 32 Report for Vote 33
At the end of June 2011 (the 1st Quarter) the department had
spent R1.5 billion or 18.9 per cent of the total budget of R8.1 billion
allocated for 2011/12. The overall actual spending indicated above was below
its projected target of 25 per cent or R2 billion.
Spending trends of the previous year showed that the commission usually
spent the entire allocation of their budget, and had done so mostly by the end
of the first quarter. However, during the current financial year, as
illustrated by Table 3, restitution had spent 12 per cent of its total
allocation, which is less than the projected 25 per cent. At the time of
compilation of this report, second quarter report had not yet been published,
but it was estimated, the commission would have spent most of its budget due to
the backlogs in restitution and it is likely to spend 100 per cent of its total
budget allocation as per previous trends.
The 2011 first quarter spending on core functions of the department was
less than the projected 25 per cent due to a number of reasons. One of the
reasons was vacancies that were not yet filled and in addition, the department,
as a coordinator, also mobilized resources from other sector departments.
5. Analysis of 2010/11 Annual Report and Financial Statements
5.1 Analysis of the performance
The Strategic Plan provided a framework for implementation of the
strategic priorities. The committee assessed the performance of the department
based on the five programmes in accordance with the
annual report and the priorities and the performance plan. Therefore,
discussion on performance in this section is closely linked to the strategic
objectives and measurable outputs outlined in Table 1.
·
Programme 1 (Administration): The department had committed
itself to achieving reduction of the vacancy rate by 12 percent and improvement
of internal auditing systems in order to achieve unqualified audit opinion. It
reported that it achieved 80 per cent target for implementing training programme and was at 11 per cent vacancy rate, 1 per cent
below the targeted 12 per cent. A greatly significant observation was that the
department again failed to achieve the unqualified audit opinion because the
Auditor-General found the immovable asset register incomplete.
·
Programme 2 (Geo-spatial and Cadastral Services): The
program includes what was referred to as supportive outputs 1 and 2 as
reflected in Table 1 under Geo-spatial and cadastral services. The programme prioritised supporting
the roll out of CRDP, monitoring programme
implementation at CRDP sites; provision of access to geo-spatial information to
visually impaired persons through a Braille atlas for each province over the
next three years; and assisting in creation of an orderly and sustainable rural
settlements by ensuring alignment and harmonization of rural development plans
to existing planning frameworks such as the Provincial Growth and Development
Strategies. The committee assessed performance of this programme
under the three sub-programmes discussed below:
·
Cadastral
services: It achieved by far its
targets of 15 days per request of production of research reports, cadastral
survey information and plans; 9 working days for examination and approval of
diagrams, generating plans and sectional title plans. However, it failed to achieve
the target to complete and current cadastral information for all land parcels
because of shortage of staff that resulted from moratorium on filling of
vacancies. Another highlight was that the National Spatial Data Set is 88 per
cent complete against 65 per cent target.
·
Deeds
Registration: It prioritized to
reduce turnaround times for registration through an e-cadastre system. However,
it failed to achieve its targets because of the rationalization process of the
organizational structure and the moratorium on filling of vacancies. The
process was reported to have affected the ability of the department to fill
vacancies.
·
Rural disaster
mitigation services: All the targets
under this sub-programme were not met. The committee
noted concerns that the department failed even to develop a strategy to address
rural disaster management. Non-performance was said to be related to
rationalization process as discussed above.
·
Programme 3 (Rural Development and Rural Livelihoods): The programme consists of Social, Technical, Rural Livelihoods
and Institutional Facilitation (STRIF) and Rural Infrastructure Development
(RID) branches with a sub-programme known as
Technology research and development.
·
STRIF focussed on food security, building of sustainable
livelihoods and skills training which were to be achieved through social
organization and mobilisation; technical support;
skills development; rural livelihoods and food security; as well as institution
building and mentoring. During the period under review, the branch had
mobilized 28 communities, profiled 13 694 households, and established 25
council of stakeholders, and established the NARYSEC. However, the following
shortcomings were reported: firstly, no rural schools gardens were established;
of the four proposed agreements with sector departments (health, agriculture,
water and education), only one was achieved; and of the 15 000 planned
household gardens, only 1 500 were achieved; secondly only 2 of the
planned 10 agri-parks were established; 1 of the
planned 10 trade agreements entered into with markets; thirdly, in addition to
25 Councils of Stakeholders, 45 of the planned 125 enterprises were established
whilst 221 of the planned 375 cooperatives were also established. The figures
illustrated shows failure to achieve the targets. The department attributed
this failure to the difficulty of coordination.
·
RID focussed on provision of strategic investment in social and
economic infrastructure to enable rural communities to address their basic
human needs and engage in different economic activities. It prioritised
establishment of e-centres in all CRDP wards;
infrastructure delivery for water, sanitation, health care, roads and housing;
establishment of the Rural Development Agency (RDA) during the MTEF period; and
provide infrastructure for the recapitalization and
development programme. Of all the 8 targets, the
department achieved or exceeded the targets in only 3; namely, number of wards
with CRDP intervention, reduction in rural infrastructure backlog, and 2010 soccer
world cup viewing parks. Some of the failures to achieve the targets relate to
lack of coordination with other government departments illustrated by delays in
formalizing agreements with other government departments and entities; for
example, the department failed to establish one clinic per CRDP site due to
change of strategies by the Department of Health and insufficient funding.
·
Programme 4 (Restitution): Ninety-six per cent of the total
79696 land claims had already been settled at the beginning of 2010 and the
commission was still faced with outstanding rural and very complex land claims
estimated to require higher budget allocations. Although the commission had
committed to settle the entire 3909 outstanding claims in line with the CRDP
principles, it specifically prioritised to complete
research on all outstanding claims by December 2011. Whilst the Commission had
planned to settle 60 claims, it exceeded the target by settling 457 land claims
excluding the 257 claims that were dismissed. The report lacks details with
regard to recapitalization of restitution projects,
especially in view of the R275 million allocated for that purpose.
·
Programme 5 (Land Reform): The department had planned to
implement stringent criteria to meet different land needs of beneficiaries;
namely, the landless poor, small-scale farmers and commercial farmers. It is
evident that the focus of the department had been to resuscitate farms under
the Recapitalization and Development Programme (RADP) in order to bring all distressed land
reform projects into full production through co-management, share equity
schemes, mentorships and strategic partnerships. It
further planned to run a campaign that will mobilize social partners, and forge
partnerships to ensure that all available capacity in the sector is galvanized
to contribute to the success of RADP; and to strengthen security of tenure for
farm dwellers and labour tenants through provision of
legal support to defend their rights, and introduce legislation that will
strengthen the rights of farm dwellers. The department exceeded its target for
acquisition of strategically located land. It is also reported that the
improved land acquisition instruments were in place by the end of the financial
year under review; and that 411 of the planned 504 farms were also under the
RADP. However, the report lacks information with regard to strengthening of
tenure security for farm dwellers, labour tenants and
farm workers although these issues appeared in the strategic plan.
5.2 Analysis of financial statements
The original budget allocated to the department during 2010/11 was
R6.769 billion which was adjusted by R524 million in November 2010; the total
appropriated fund was R7.293 billion. See Table 4 for illustration on overall
financial performance of the department.
Table 4: Budget allocation
and spending per Programme for 2010/11
|
Programme |
Final Appropriation R’000 |
Actual Expenditure R’000 |
Variance |
Expenditure as % of final appropriation |
|
|
|
|
|
|
|
Administration |
709 768 |
689 270 |
20 498 |
97.1% |
|
Geospatial & Cadastral Services |
448 738 |
372 080 |
76 658 |
82.9% |
|
Rural Development |
361 431 |
357 467 |
3 964 |
98.9% |
|
Restitution |
3 774 221 |
3 765 603 |
8 618 |
99.8% |
|
Land reform |
1 999 224 |
1 937 205 |
62 019 |
96.9% |
|
|
|
|
|
|
|
Total |
7 293 382 |
7 121 625 |
171 757 |
97.6% |
Source: Adapted from the
2010/11 Annual Report of the DRDLR
As illustrated in table 4 above, the Department has spent 97.6 per cent
of its final appropriation, implying that it under spent 2.4 per cent of its
budget for the year. The committee regarded this as an improvement when
compared to the 2009/10 financial year’s under-expenditure of 8.4 per cent. The
2010/11 under-expenditure of 2.4 per cent is mainly attributed to under
spending on compensation of employees due to the moratorium on filling new
vacancies in order to allow for a rationalisation of
the department’s structure in line with the new mandate of rural development.
The moratorium that was only lifted in January 2011 delayed spending on
compensation of employees and expenditure on related goods and services, and
machinery and equipment.
The department spent R2.1 billion (88 per cent) of the current payment
allocation, which is an under-expenditure of 12 percent. The budget for
machinery and equipment was under-spent by 28 per cent. It is reported that the
department spent R5 billion or 102 per cent of its transfers allocation in
2010/11 due the need to speed up the land reform process. It is of concern,
though, that R10.8 million of foreign aid assistance given to the
department in 2010/11 was not utilised and no
explanation has been provided in this report. It should be noted that there
were no roll-overs during the period under review.
The following points provide analysis of financial performance
according to the various programmes and it discusses
Table 4 to build on analysis of programme performance.
·
Administration:
As illustrated in Table 2,
administration programme received an allocation of
R709.768 million in 2010/11 and R689.270 million was spent, representing 97.1
percent of the its total allocation. An under-expenditure of 2.9 per cent in this
programme was influenced by under-spending for
payment of capital assets where 68 percent of the allocated budget was spent.
Under spending was attributed to delays in ICT infrastructure expenditure that
occurred in February 2011 rather than September 2010 as projected. The delays
were attributed to delays in finalising the lease
agreements with Department of Public Works for newly leased office buildings.
·
Geospatial and
Cadastral Services: The Geospatial and Cadastral Services Programme
received a final allocation of R448.738 million during the year under review
and R372.080, representing 82.9 per cent, of the entire allocation for the programme was spent. This is the programme
with the highest rate of under-expenditure of 17 per cent. Under-expenditure
of this programme was influenced by poor spending of
23 per cent for payment of capital assets and delays in payment of machinery
and equipment linked to the delays in filling vacancies. It is reported the programme could not find candidates with required and
relevant skills. .
·
Rural
Development: The programme
was allocated a budget of R448.738 million in 2010/11 and 98.9% of that
allocation was spent. This means that only 1% of the allocated budget was not
spent. This under spending was attributed to the failure to fill posts for
senior managers. Although the spending rate of the programme
during the period under review was good it should be noted that 20.7 per cent
of the funds for this programme were shifted within
the programme or to other programmes.
Money was shifted due the department’s restructuring or reprioritisation.
·
Restitution
(the Commission on Restitution of Land Rights): Restitution received final appropriation of R3.774
billion in 2010/11 and managed to spend 99.8% (R3.765 billion) of the entire
allocation. It should be noted that the budget allocated to restitution programme was exhausted by July 2010/11 as it had to pay
its commitments as was compelled by court. Through the adjusted appropriation,
restitution received an additional allocation of R487.5 million from the
National Treasury and R1.5 billion shifted from the land reform grants. This
meant that the commission received a total additional allocation of R2 billion
in 2010/11.
During the year under review, approved total
commitments for the department amounted to R6.573 billion. Included in the
commitments were projects that were older than 3 years amounting to R642
million, which meant that interest might be charged during payment of these
claims in terms of section 80 of the PFMA. This figure excluded land gazetted, authorised offers not
yet accepted by landowners, which might result in increase in commitments. It
is reported that the department would continue to engage with National Treasury
in order to get financial solution with respect to the financial exposure of
the commission.
The project on verification of outstanding claims had
already been started and would be completed by the 31st March 2012.
Based on the progress made in this project, the department could provide
estimates. The committee advised that a short term solution should be to focus
on reducing the commitments by paying court orders and prioritising
settlement of state land claims. The committee was greatly concerned that, 12
years after the closing date for lodgement of land
claims, there were still un-traceable claimants and settled claims that were
not yet finalized. For example, about R681.834 million worth of properties
acquired for restitution claimants were not yet transferred to claimants by 31
March 2011.
·
Land Reform: The final allocation for the land reform during
the year under review was R1.999 billion of which 96.9 per cent (R1.937
billion) was spent. The under expenditure of 3.1 per cent was caused by poor
spending in payment of capital assets in which only 56.5 per cent of the budget
was spent. The committee was concerned that more than half of total budget of
the land reform programme, that is 52.2 per cent or
R2.2 billion, was shifted from land reform grants. About R1.5 billion was
shifted to restitution to cover court cases. According to the PFMA only
8 per cent of the total budget is allowed for virement
except if it is approved by the legislature. Shifting funds from land reform
grants implied that there was less money available to acquire land for
beneficiaries. Only R562.2 million was available land reform grants during the
year under review due to a shift from redistribution through grants to a
Pro-active Land Acquisition Strategy (PLAS).
6. Consideration of other sources of information
1.
Committee
oversight reports
The committee jointly conducted oversight visits with the Portfolio
Committee on Agriculture, Forestry and Fisheries. The committee, therefore,
draws some of the observations in this section from the oversight visits at the
seven provinces; namely, Eastern Cape, KwaZulu-Natal,
Northern Cape, Limpopo, Free State and Mpumalanga. Findings from these visits
show the challenges experienced by rural communities, farm dwellers and workers
with regard to sustaining productivity on farms acquired as a result of poor
support mechanisms. With regard to farm workers, there were still cases where
the Land Rights Management Facility could not assist to prevent evictions of
people with long-term occupier status.
In a broad sense, the following section summarises
some of the crucial observations.
·
Weakness in
coordination of land reform and rural development projects across the different
spheres of government. Visit to the
·
There was gap in
monitoring of NARYSEC and Council of Stakeholders. Clear systems were required
to ensure effectiveness of training and deployment of trainees so that they do
not just wait for the stipends without doing any work.
·
Although Recapitalization and Development Programme
has been established and has been reported to have reached 411 projects in the
year under review, on many occasions there was a clear lack of integration of
land reform and agricultural support mechanisms. For example, some projects did
not have any extension officer allocated to them, where there were extension
officers allocated; beneficiaries report lack of visits by the extension
officers.
·
Livestock farmers
complained about stock theft as well as predators. They argued that failure to
ensure rural security poses a threat to the sustainability of farming, their
ability to contribute to food security as well as their own sources of
livelihoods.
·
Development of
rural infrastructure (roads, electricity, communication, water) in areas where
land reform beneficiaries have been relocated to required urgent attention.
·
The role of
municipalities in land reform projects as well as support given to farm workers
during evictions requires strengthening. It was unclear during the oversight
visit whether local and district municipalities were involved in any
developmental initiatives in land reform.
·
Private sector
organizations such as the Stud Book South Africa have potential to contribute
to the development of livestock farmers in
·
Strategic
partnerships in restitution have not yet resulted in material benefits to
households who form part of various CPAs and Trusts, especially in
6.2 Report of the Auditor – General
The department has received a qualified opinion from the
Auditor-General (AG) based on tangible capital assets. The committee was
concerned that the AG has been raising concerns in relation to the performance
of the department with regard to the asset register for a number of years and
it remains the same issue resulting in qualification for the department.
The following sections discuss findings of the Auditor General with
regard to tangible assets, emphasis of matters and other matters.
Tangible capital assets
The department failed to develop a complete asset register for all
national government’s immovable properties under its custodianship because
state land in former TBVC states and Self-Governing Territories was unsurveyed or was surveyed but not registered in the Deeds
Registry. As a result, it was not vested and thus not recognised
in the financial statements. It was impossible for some audit procedures to be
performed to confirm completeness and evaluation of, and rights and obligations
regarding tangible assets.
Emphasis of Matters
By end of March 2011 there were about R681.834 million worth of
properties acquired for restitution claimants but not yet transferred to
claimants. It created significant uncertainties on whether provision has been
made for any liability (Interest and legal costs) that may result from claims
of R1.172 billion instituted against the department; and on the value of
potential liability of the Department towards the claimants beyond the R883.470
million that has been verified and due for approval by 31 March 2011. The
uncertainty is due to the complicated process that needs to be followed in
validating claims. The Auditor-General further emphasized the following:
·
Total commitments
amounting to R6.573 billion which includes commitments of R642 million relating
to projects that are older than three years that amount to R642 million, which
an interest might be charged in terms of PFMA.
·
Fruitless and
wasteful expenditure of R73. 406 million as a result of interest paid as
compelled by the court on late payments of land purchase, and R3.324 million
was incurred, as interest had to be paid to suppliers due non-compliance with
normal procurement processes.
·
Irregular
expenditure of R4.177 million was incurred due to non-compliance with supply
chain management procedures and overpayments of restitution commitments.
Other Matters
Validity, accuracy and completeness of information on land reform could
not be established due to insufficient appropriate audit evidence and lack of
support documents; and noted the following:
·
Accounting
officer did not take effective appropriate steps to prevent and detect
irregular, fruitless and wasteful expenditure as required by PFMA.
·
Planned and
reported performance targets for restitution and land reform programmes were not specific and measurable.
·
Adequate
monitoring controls did not exist to detect fictitious beneficiaries receiving
grant funding – second time. There are no adequate controls to ensure that in
terms of LRAD beneficiaries contribute their labour
on the farm.
·
The Department
did not have approved fraud prevention plan in place although the accounting
officer conducted a risk assessment.
Other matters
Special Investigating unit was still investigating 11 cases of
allegations of irregularities relating to land reform and restitution projects.
7. The observations of the Committee
The Portfolio Committee on Rural Development and Land Reform, having analysed the strategic plan and discussed the 2010/11
annual reports of the Department of Rural Development and Land Reform, the
Commission on Restitution of Land Rights, The Ingonyama
Trust Board, recorded the following observations:
1.
The
department (including the commission) lacks adequate capacity to effectively
implement programmes and achieve targets set under
the strategic plan. The committee found that capacity inadequacies were in the
following specific strategic areas:
·
There
were no clear systems to ensure risk management and fraud prevention. The
department, due to its land reform programme, has a
high risk potential for fraud. This is evidenced by the investigations related
to material losses through criminal conduct where an amount R53.301.000 million
was incurred through fraudulent activities in 2009/10 financial year. The
committee noted that the Special Investigation Unit has been tasked to carry
out investigations in the department.
·
Research
and conflict resolution capacity to deal with the challenges of land
restitution, especially proving validity of land claims and facilitating social
cohesion within the Communal Property Institutes (CPIs) such as the Communal
Property Associations and Trusts.
·
Monitoring
and evaluation systems to ensure that the department remains informed of
indicators of success or failures of the land reform projects and the
livelihoods impact of land reform; training and deployment of the NARYSEC
trainees.
·
Weaknesses
of the internal audit within both the Department and the Ingonyama
Trust.
·
Lack
of adequate skilled human resources for the implementation of strategic programmes. For example, skills in surveys, research,
monitoring and evaluation, conflict resolution, data base maintenance and
management.
2.
The
land reform programme, encompassing redistribution,
restitution and tenure reform, forms part of the core functions of the
department and this was also illustrated by the budget allocation for these programmes. The committee noted the following:
·
There
are critical challenges confronting
·
With
repeal of the Black Authorities Act, pieces of legislation such as the
Traditional Leadership Frameworks Act, 2003 (Act 41 of 2003) continue to have
an impact on customary tenure and general development of people in tribal or
communal areas.
·
During
deliberations on the Annual Report of the commission, it was observable that it
would not finalize all the outstanding land claims by 2014. It also became
evident that the goal to redistribute the 30 per cent of agricultural land by
2014 was not achievable under the current mechanisms of land acquisition based
on willing buyer – willing seller, and the under resourced programme
for restitution because of the continual reduction of budget allocation for
restitution.
·
The
committee welcomed the RADP; however, there were concerns around criteria for
eligibility for funding, especially where there were deserving farmers who were
not included in the identified projects. In addition, its focus has been on
PLAS farms with an unintended bias against subsistence and petty commodity
producers because of its focus on development of black commercial farmers.
3.
Evidence
from oversight reports on the CRDP as well as deliberations with the department
shows that the challenge for rural development is mainly coordination and
integrated planning for interventions in rural development. As a result, the
following challenges are resultant:
·
Inadequate
budget for rolling out ITC infrastructure such as the e-rap centres;
planned outputs such as clinics and school gardens not achieved due to
coordination failures
·
Excessive
usage of consultants in CRDP sites. For example, in Diyatalawa,
the Department procured services of a consultant to plough backyard vegetable
gardens. The committee was extremely concerned that such initiatives tended to
not empower local communities or beneficiaries but to deepen dependency
tendencies.
·
The
committee noted that some of the sites, particularly Muyexe,
has witnessed greater cooperation and integration but such extents of
coordination had not been witnessed in other CRDP sites.
·
NARYSEC
candidates are trained but the Committee found that some of them have not been
deployed to particular duty stations and with clear performance areas. As a result
some of them are not working but collect stipends. For example in Riemvasmaak.
4.
The
Ingonyama Trust Board has not only functioned as a
landowner-in-law of the Ingonyama Trust land. In
terms of the Act 3 of 1994 as amended, its core business is real estate and
land management for the material benefit and social wellbeing
of the individual members of the tribes and communities. The Ingonyama Trust Board had not been spending 90 per cent of
its revenue on communities but has created its own reserves. It further reports
of slow intake of funds by communities.
8.
Recommendations of the Committee
In view of the analysis of the various documents, assessment of the
performance of the Department of Rural Development and Land Reform (including
the commission) and the Ingonyama Trust Board, the
committee recommends the following:
To the Executive
1.
To
introduce mechanisms (include review of legislation where necessary) to enhance
effective coordination among the various spheres of government and integration of
rural development at local and/or district levels in manners that foster
intergovernmental relations. The success of CRDP will, to a large extent, be
determined by the effectiveness of coordination and integration of service
delivery by different spheres of government.
To the Department of Rural
Development and Land Reform
2.
To
develop specific strategies and plans to address the points (administration
program) outlined below. The department should submit to the National Assembly
those plans before the end of current financial year.
·
Recruit
highly skilled professionals and develop an intensive programme
of staff development to address capacity challenges in the field of surveys and
cadastre, research for validation of restitution, and systems and programme implementation. Enhancement of capacity would
help the department to finalize surveying of state land, completion of the
National Asset Register, and finalization of restitution.
·
Put
in place effective monitoring and evaluation systems to track progress and
identify problems and deficiencies in project implementation across the programmes, especially CRDP, Land Reform with particular
emphasis on fraud prevention as well as impacts of interventions made by
government.
·
Enhance
internal audit function to highlight weaknesses in the systems especially on
risk management and fraud prevention.
·
Put
in place mechanisms to ensure monthly reconciliations
in order to avoid material adjustments at the end of the year and submit the
report on a quarterly basis to the committee.
·
Build
internal capacity on a range of key functions of the department whilst
minimizing utilization of consultants.
·
Develop
an effective communication strategy for all the stakeholders to know what
services are available and the potential beneficiaries should expect,
especially for restitution, PLAS and rural development.
·
Put
in place mechanisms that create certain restrictions on open market resale of
land acquired under land reform programme.
3.
To
take necessary steps to ensure implementation of the following strategic core
areas of work of the department and report to the National Assembly within six
months after adoption of this report.
·
Maintain
an up-to-date database of all previous and current land reform projects and
their beneficiaries to ensure compliance with criteria for qualification as a
beneficiary to land reform grants and subsidies.
·
Report
on implementation of the turn-around strategy of the commission with particular
focus on elimination of the backlogs and unpaid commitments under restitution
and projections for finalization of all lodged land claims.
·
Establish
two teams to deal with restitution challenges; one team comprising of the
commission personnel should be capacitated to conduct credible research to
validate land claims; and the second team should comprise of National Treasury
and the Department in order to find alternative solutions to finance settlement
of backlog land claims and commitments.
·
Assess
comprehensively all the CRDP pilot sites and draw lessons for an effective and
efficient programme of rural development.
·
Minimize
usage of consultants but ensure empowerment of rural communities to take charge
of their own development, especially in cultivation of household gardens,
fencing of fields and other small-scale infrastructure development projects.
·
Develop
capacity for speedy delivery of land and integration with agricultural support
in the form of input costs, access to markets, and agricultural research and
extension support. It is anticipated that an effective implementation on this
area of work could impact positively on the development smallholders and
address food security challenges.
4.
To
review and harmonize all legislation that impacts on development of the rural
areas, For example, the Communal Property Associations Act, 1996 (Act 28 of
1996), Interim Protection of Informal Land Rights Act, 1996 (Act No 31 of 1996)
and the Traditional Leadership and Governance Frameworks Act, 2003 (Act 41 of
2003).
To the Ingoyama Trust Board
5.
To focus on its
core mandate as prescribed by the relevant legislation so that the wealth
accruing is for the material benefit of the communities and beneficiaries.
6.
To report to
Parliament within five months after the adoption of this report on progress
made with regard to compliance with employment equity legislation and the KwaZulu-Natal Ingonyama Trust Act
(1993), as amended by the National Act 9 of 1997, especially with regard to
disbursement of funds to the beneficiaries and communities.
To National Treasury
7.
Rural development
and land reform is one of the top five priorities of government. The committee
recommends that budget allocation for this mandate should reflect the high
priority accorded to the portfolio. The Committee recommends, in particular, an
increase in budget allocation of the department for the following programme areas:
Restitution
·
Restitution is a
constitutional mandate in terms of Section 25 (7) and it entitles victims of
apartheid land dispossession to restitution. Extensive financial resources are
required for the Commission to finalize land claims in manners that restores
property or any other form of equitable redress;
·
Therefore, National
Treasury and Department of Rural Development and Land Reform should devise
appropriate mechanisms to finance settlement of outstanding claims, backlogs
and commitments by 2014. It is further recommended that the two department
jointly report to the National Assembly about these mechanisms and
implementation progress within five months after adoption of this report.
Recapitalization and Development of Land Reform Farms (RADP)
·
Rolling out of
the RADP require investment in development of capacity in agricultural
economics, facilitation skills, business planning and enterprise development
and monitoring and evaluation. Therefore, National Treasury should consider
increasing allocation that would ensure that the department builds adequate
capacity to roll out RADP and facilitate increased productivity on land reform
farms of which the majority have been reported to be
in distress or have collapsed.
Comprehensive Rural Development Programme
·
Adequately
resourced CRDP projects as well as capacity to coordinate should assist the
department’s failure to meet the targets because of shortage of capital funds
as well as lack of human resource to facilitate and coordinate interventions
and support required.
·
Increase funding
for capacity to implement the Vesting Master Plan by recruiting scarce skills
professionals such as the surveyors, cartographers, and others. This could
assist the department to finalize development of a complete asset register for
national government’s immovable properties under its custodianship.
Report to be considered.