BUDGETARY
REVIEW AND RECOMMENDATION REPORT OF THE PORTFOLIO COMMITTEE ON RURAL
DEVELOPMENT AND LAND REFORM ON THE PERFORMANCE OF THE DEPARTMENT OF RURAL
DEVELOPMENT AND LAND REFORM, DATED 24 OCTOBER 2012
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, conducts
annual assessment of the performance of each national Department with regard to
the medium term estimates of expenditure. This report accounts for the
processes carried out by the Portfolio Committee on Rural Development and Land
Reform (the Committee) during assessment of the performance of the Department
of Rural Development and Land Reform (the Department). It further proposes the
recommendations for a review of the budget for the Department.
1.1
The
role 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 portfolio of rural development and land
reform. Therefore, it oversees the Department which is mandated to coordinate
and implement rural development and land reform portfolio. The mandate is a
transversal function that aims to create and maintain an equitable and
sustainable land dispensation. Furthermore, the Committee oversees the work of the
public entities and commissions that are linked to the department; namely, the
Commission on Restitution of Land Rights (the Commission) established in terms
of the Restitution of Land Rights Act, 1994 (Act 22 of 1994), and the
KwaZulu-Natal Ingonyama Trust/ the Ingonyama Trust Board established in terms of the
KwaZulu-Natal Ingonyama Trust Act, 1994 (Act 3 of
1994) amended by the National Act 9 of 1997. The Committee considers legislation from the Department
and its entities. It exercises oversight over implementation of the various
programmes of the Department and related entities, facilitates public
participation, considers departmental budget votes, enquires and makes
recommendations about any aspect of the department, including its structure,
functioning and policy. The Committee exercises its powers guided by the
Constitution, statutes and the Rules of the National Assembly.
In view of
the mandate of the Committee and section 5 of Act 9 of 2009, the Committee has
embarked on processes leading to this Budget Review Recommendations Report. The
processes included the following:
analysis of the
strategic plan of the Department(including the commission) and the Ingonyama Trust Board;
consideration
of the financial statements and programme performance of both the Department
and the Ingonyama Trust Board;
analysis of
the relevant reports from the Auditor-General of
consideration
of other performance reports such as the Management Performance Assessment
Report from the Department of Performance Monitoring and Evaluation (DPME);
and Public Service Commission’s Monitoring and Evaluation Report of the Department
of Rural Development and Land Reform,
1.2 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). It coordinates implementation of outcome 7 of the 12 outcomes that the
government has set for the years between 2009 and 2014. Outcome 7 is mainly about
rural development - creation of vibrant, equitable and sustainable rural
communities and food security for all. The key outputs linked to this outcome
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 opportunities and
enabling institutional environment for sustainable and inclusive growth.
The Department, through its strategic
plan (2011 -2014) and the 2011/12 annual performance plan (the APP), adopted outcome
7 as its vision. These documents state that the vision of the Department is “vibrant,
equitable, and sustainable rural communities” and its mission being to
“initiate, facilitate, coordinate, catalyse and implement an integrated rural
development programme”. The vision and mission of the Department is underpinned
by the strategy of “agrarian transformation, interpreted to denote a rapid and
fundamental change in the relations (systems and patterns of ownership and
control) of land, livestock, cropping and community”. The strategy aims at contributing
toward social cohesion and development. The department, in the APP, interpreted
social cohesion and development to mean shared growth and development, full
employment, equity and cultural progress.
The
Department developed the strategic outcome-oriented goals for the Medium Term
Expenditure Framework (MTEF) period. Those goals are as follows:
·
Sound corporate governance and service excellence through
compliance with legal framework achieved by 2014.
·
Reformed policy, legislative and institutional environment
by 2014.
·
Effective land planning and administration that is biased
towards rural areas.
·
Integrated cooperative governance: Integrated institutional
arrangements for effective cooperative governance and stakeholder participation
by 2014.
·
Increased access to and productive use of land by 2014.
·
Improved access to affordable and diverse food by 2014.
·
Improved rural services that support sustainable livelihoods
by 2014.
·
Improved access to sustainable employment and skills
development opportunities by 2014.
2. The 2011/12 strategic priorities and measurable
objectives
Both
the strategic plan for the period between 2011 and 2014 and the APP have set
out key priorities to ensure attainment of the strategic goals outlined above.
Table 1 of this report (in the next page) outlines the overall strategic focus
of the Department in five programmatic areas. The pre-determined objectives
address the key priorities which can be categorised into three key areas; that
is, land reform, farmer support, rural development and
governance issues.
Table 1: 2011/12
predetermined objectives – Annual Performance Plan
Programme |
Strategic
objectives |
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 organisation and ensure
delivery on expected outcomes provided by 2014
Effectiveness and efficiency of
corporate services improved by 2014
Effectiveness and efficient
financial services provided by 2014
Develop rural development and land
reform legislation by 2014 |
Geo-spatial
and cadastral services |
An integrated land planning and
administration system that promotes equitable, sustainable land use and
allocation
Surveyed and registered State and
Trust land
Develop a comprehensive land
register
Provide scarce skills training
programme by 2014
Improve disaster management
services
Compliance with land use
management policies and legislation
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 |
Rural
Development |
To reach all the poorest rural
wards in all rural municipalities by 2014
Establish food gardens and agri-parks in CRDP wards by 2014
Rural communities and land reform
beneficiaries skilled and capacitated in technical enterprise development
trades
To develop innovative service
delivery models to enhance food production and ensure food security
To increase the number of jobs
created in CRDP initiatives by 2014
To provide economic infrastructure
in rural areas effectively reducing special inequalities by 5%
To provide social infrastructure
in rural areas effectively reducing spatial inequalities by 5%
To provide ICT infrastructure in
rural areas effectively reducing inequalities by 5%
To establish village agricultural
industries and enterprises by 2014
Establish and support Council of
Stakeholders, cooperatives and community-based institutions in 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 finalized
within MTEF baseline allocation |
Land Reform |
1140860 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: DRDLR
(2012) Annual Performance Plan 2011/12
During
the period under review, the key priorities of the Department were to -
roll out the Comprehensive Rural
Development Programme (CRDP) to all rural municipalities;
improve productivity in land reform
projects through effective implementation of the Recapitalisation and
Development Programme;
expedite the finalisation of land
claims;
improve corporate governance and
ensure enhanced service delivery;
implement proper change management
and innovation strategies; and
enhance
the efficiency of information management systems.
For
the 2010/11 financial, the Monitoring and Evaluation Report for the Department
of Rural Development and Land Reform conducted by the Public Service
Commission’s (PSC) found that Department complied with the norms and standards
for development of the strategic plan. However, the PSC raised some matters
that the Department should consider; for example, to ensure the measurability
of some of the indicators. In similar veins, the Committee raised similar concerns
when it considered the APP. During the 2011/12 financial year, the Committee
still raised concerns regarding alignment of performance indicators with
strategic objectives and further questioned the basis on which certain targets
where arrived at. These concerns were also validated by the DPME which expressed
concerns that the Department experienced significant compliance challenges in
the areas of strategic planning, programme management, monitoring and
evaluation. The DPME’s conclusions emanated from its
analysis of the department’s Self-Assessment Results using the Management
Performance Assessment Tool (MPAT) designed by the DPME.
The
Committee, however, commended the Department for comprehensively embracing outcome
7 in its plans. In terms of the plans, the three areas of strategic importance
are land reform, restitution and the CRDP. The DPME, when it presented progress
report on the contribution of the Department to the outcomes of government,
stated that the Department was unlikely to meet the government’s target for
land redistribution (redistribution of 30% of white-owned agricultural land by
2014). The Committee noted that the APP stated that the commission would
finalize all land claims within the MTEF baseline allocation. As reported under
the 2011 Budget Review Recommendations Report (BRRR), failure to include tenure
reform in the department’s plans was a disservice to the vulnerable farm
workers and farm dwellers.
3. Analysis of the
prevailing strategic plan and the annual performance plan
The prevailing strategic plan outlines the strategic
focus of the Department for the period between 2011 and 2014. The strategic
focus was revised through the 2012/13 APP which spelt out the planned
performance for the 2012/13 financial year. In terms of the 2012/13 APP, the
strategic goals of the Department embraced the five outputs of outcome 7 as
discussed above. The 2012/13 APP further stated that the Department would
upscale rural development programme as per the directives of the July 2011
Cabinet Lekgotla. The Cabinet Lekgotla further identified the 22 poorest
districts in the country which rural development programmes should reach. In
2012/13, the Department planned to contribute towards initiatives to address
the triple challenge expressed by the President of South Africa in the State of
the Nation Address (SONA); namely, inequality, unemployment and poverty. The
SONA further criticized the Willing Buyer-Willing Seller approach to land
reform, stating that it is inefficient and has withheld the pace at which the
state wished to redistribute land. It further observed that the restitution
processes were very slow. According to the Committee, the state should find
mechanisms that would address the constraints to the current land reform
programme.
The key priorities of the Department remained
unchanged, except for certain key strategic objectives, as an attempt to ensure
clearly defined objectives and measurable outputs. For the year 2012/13,
greater emphasis of the Department has been on policy and legislation
development. The Department reported that it would finalise the following key
policy documents in 2012/13: the Green Paper on Land Reform, with intentions to
develop legislation to guide in the establishment of institutions proposed in
the Green Paper; and the Green Paper on Rural Development. The Department has further
planned to produce 11 pieces of legislation and all of them were to be
submitted to Parliament by October 2012. However, by the 24th October
2012 during consideration of this report, the Committee noted that only the
Spatial Planning and Land Use Management Bill was
tabled in the National Assembly and being processed by the Committee.
The strategic plan and the APP of the Department have factored
in policy developments that could impact positively on its mandate and
functions. Such developments included the diagnostic report and the national
development plan of the National Planning Commission. Discussions between the Committee
and the Department have also shown some attempt to align the proposals of the Green
Paper on Land Reform and the National Development Plan. This particularly
relates to the proposal in the national development plan to “enable a more
rapid transfer of agricultural land to black beneficiaries without distorting
land markets or business confidence, establishment of institutional
arrangements to monitor land markets against undue opportunism, corruption and
speculation”. For example, the green paper proposes establishment of the Office
of the Valuer-General (OVG). The national development
plan also recognises that land reform is a necessary mechanism through which
the potential for a dynamic, growing and employment-creating agricultural
sector could be unlocked. The Committee observed that the greatest challenge confronting
the Department is lack of adequate capacity to coordinate activities of the
various spheres of government to achieve rural development and land reform
programmes that could result in inclusive economic growth and development. It
further noted that the current Green Paper on Land Reform lacks clear proposals
on tenure security, yet the national development plan recommends creation of
tenure security for communal farmers, acknowledging that “tenure security is
also vital to secure incomes for all existing farmers and for new entrants”.
However, the Committee argued that the Department should ensure greater
alignment between the green paper and the proposals of the national development
plan.
3.1. Performance and service delivery
information (the 2012/13 Annual Performance Plan)
This section presents the key deliverables of the
department, documented under the APP as follows: finalisation of policies and
legislation which are aimed at reducing poverty and inequality; completion of
the state land register and developing Spatial Development Plans for rural
municipalities; deepening participation, improving skills, building enterprises
and institutions and improving access to socio-economic infrastructure and roll
out CRDP in the identified 22 poorest districts; settling and finalising claims
on state land and financial compensation; and providing access to strategically
located agricultural land and support emerging farmers.
·
Finalisation of policies and legislation which are
aimed at reducing poverty and inequalities: The Department planned to table 11 pieces of legislation in Parliament by
October 2012.
·
Completion of the state land register and developing
Spatial Development Plans for rural municipalities: 2.7 million hectares of state land in the former homelands would be
surveyed. It would also complete the state land register by the end of the
2012.
·
Roll out CRDP in identified 22 poorest districts: In 2011/12, the Department planned to reach 180
rural wards. In line with the directives of the Cabinet Lekgotla, 22 poorest
districts have been identified for CRDP interventions. The Department would
focus on provision of water, sanitation, energy, and roads to rural households
and enable those households to have access to food.
·
Settling and finalising claims on state land and
financial compensation: The Department
reported that it would finalize the land reform and restitution documentation
control project in order to provide objectively verified statistics about restitution
to date. However, it planned that 380 restoration of land rights or awards of
alternative equitable redress would be finalized, whereas 133 land claims would
be settled. Restitution continued to be confronted by complexities of
restoration of rights on large and capital intensive farms, the cost of land
acquisition and budgetary constraints, and identification of appropriate
settlement models.
·
Providing access to strategically located
agricultural land and support emerging farmers: The APP states that the Department would acquire 321 122 hectares of
strategically located land, 416 farms would be recapitalized, and 8 irrigation
schemes would be revitalized. In terms of training, it would support 595
farmers and ensures creation of 324 jobs in land reform projects.
The success of the Department
in implementing an effective programme of integrated rural development that is
linked with land reform depends, to a greater extent, on its ability to
coordinate activities of other departments across the different spheres of
government. Such departments include the Department of Agriculture, Forestry
and Fisheries; Department of Water Affairs and Environment; Department of
Cooperate Governance and Traditional Affairs; Department of Social Development
and many others as well as various public entities, civil society organisations
and private sector role players. The function of coordination and facilitation
has been captured adequately in the mission of the department. However, the
weaknesses in operations could be found in the fact that linkages between rural
development and land reform have not been clearly conceptualised and spelt out.
The evidence from the 2011/12 comprehensive oversight report of the Committee shows
that both the Social Technical and Rural Livelihood Infrastructure Facilitation
(STRIF) and Rural Infrastructure Development (RID) branches of the Department
have not developed clear strategies to support restitution and redistribution
beneficiaries. For example, the 2012/13 APP’s
strategic objective (SO 5.3) states that recapitalisation and development
support provided to land reform beneficiaries and rural communities by 2014,
and 60 rural communities would be assisted with agricultural infrastructure and
services. When comparing that performance indicator and the total amount of land
to be acquired under both restitution and land redistribution, the Committee
noted a mismatch between rural development and land redistribution/restitution.
4. Analysis of expenditure
trends
This section assesses the
expenditure trends of the Department between 2009/10 and 2011/12. For the years
under review, the Department had a slight increase in budget allocation and an
improvement in the expenditure rate. Land reform and rural development
programmes have been the main drivers of increases in the budget allocation.
However, a notable change in 2012/13 allocation is an increase in the budget
allocation for restitution whereas the allocation for land reform decreased.
The expenditure rate of
the Department improved from 92 per cent in 2009/10 up to 98.3 per cent in
2011/12, representing a decrease of under expenditure rate from 8 per cent
to 1.7 per cent. The under-expenditure rate of 8 per cent in 2009/10 related to
the inclusion of rural development mandate to the Department which received its
budget allocation later in the year (November 2009) and the changes in the
strategic plan and structure to accommodate the new mandate. Therefore, there
was little time available to roll out its new activities and to spend its
allocated funds by the end of 2009/10 financial year. A particular concern is
that during the three year period under review, the Department incurred an
increase in irregular, fruitless and wasteful expenditure particularly in
2010/11 as indicated in Table 2 below.
Table 2: Irregular, fruitless, wasteful and unauthorised expenditure
Year Incurred |
Irregular Expenditure |
Fruitless and wasteful expenditure |
2008/09 |
R 10 384 000 |
R 4 864 000 |
2009/10 |
R 4 177 000 |
R 2 728 000 |
2010/11 |
R 45 536 000 |
R 73 406 000 |
Source: Auditor-General (2008/09-2010/11)
5. Analysis of 2011/12
annual report and financial report of the Department
5.1
Programme
performance of the department
The overall performance of the department, as found by the
Auditor-General, shows that about 50 per cent of the targets were not achieved.
This contradicts the 4th quarter report presented to the Committee.
It showed that the Department had achieved 58% of its targets by the 4th
quarter. It further showed that 36 per cent of the 62 indicators were achieved
by the 4th quarter. The following sections discuss the programme
performance against the predetermined objectives in the Annual Performance Plan
2011/12.
5.1.1
Administration
This
programme prioritised the two main strategic goals, namely, sound corporate
governance and service delivery; and reformed policy legislative and
institutional environment by 2014. Of the 12 targets, the Department managed to
achieve 3; that is, 25 per cent of the targets were achieved during the
period under review. It was able to achieve the targeted 75 per cent implementation
of the strategy for Performance, Monitoring and Evaluation, 75 per cent implementation
of the communications strategy and ability to approve and implement Risk
Management Strategy.
5.1.2
Geospatial and cadastral
services
The
strategic objectives of this programme are illustrated in Table 1 of this
report. Of the 11 targets planned by the department, only 5 were achieved. This
represents 45 per cent achievement on targets for the year 2011/12. The
highlights of this programme include introduction of e-cadastre system,
reduction of turnaround times for registration of titles in the Deeds Office to
7 days, digital scanning of the microfilm record which would facilitate
alignment of the deeds registries and enhance accuracy of information in the
registration, successful audit of 54 per cent of state land, that is,
623 078 of 1 155 508 of land parcels were verified and updated in the
comprehensive land register and approval of the Spatial Planning and Land Use
Management Bill by the Cabinet. Some of the shortcomings under this programme include
failure to reduce the average number of days to examine cadastral documents
from 18 days to 14. However, the Committee noted that the number of days increased
to 21 days. Although the programme for skills accreditation was initiated, the
programme failed to achieve accreditation during the year under review. The
programme also achieved only 66 per cent survey of the unsurveyed
state land. None of the 25 rural Spatial
Development Frameworks planned for were completed.
5.1.3
Rural development and
rural livelihoods
The key priority for the programme was to
roll out the CRDP strategy linked to land and agrarian reform. The main aim of
the CRDP was to eliminate poverty and food insecurity in rural areas by
maximising the use of natural resources to create vibrant, equitable and
sustainable communities. It addresses the specific needs of rural communities
such as running water, sanitation, electricity, housing and development
support. During 2011/12, the programme established 947 food gardens in
different CRDP sites, created 10 049 job opportunities in all CRDP
initiatives (including the 5 460 jobs created through the NARYSEC
programme) and provided skills training to 3 819 CRDP beneficiaries in
technical enterprise development trade. A total of 464 enterprises, including
27 Council of Stakeholders and 437 co-operatives, were established. It also
assisted in provision of clean drinking water to 3 058 households and
provision of sanitation units to 564 households. In summary, of the 27 targets
set by the programme, only 16 were achieved. Some of the targets that could not
be achieved include profiling 57 instead of 60 rural wards, establishment of
1800 food gardens instead of 1918, no establishment of agri-parks,
and establishment of 1 village agricultural industry instead of 4. The greatest
challenge identified by the Department is lack of capacity to coordinate
government programmes across different spheres to support rural development.
5.1.4
Restitution
During 2011/12, the
commission had targeted to finalise 800 backlog claims but the target was
adjusted to 380 claims in an attempt to align it with the allocated budget. Similarly,
the target for new claims was reduced from 150 to 90 claims. By the end of the
financial year, a total of 416 new claims were settled, that is, 223 rural and
193 urban claims, exceeding the target to settle 90 new claims. The commission
further dismissed 61 claims because they did not comply with the requirement in
terms of the Restitution of Land Rights Act. With regard to backlog claims, the
commission finalised 209 backlog claims instead of the planned 360, thus
failing to deal with 151 backlog claims.
Table 3: Number of claims settled and dismissed
Province |
Rural |
Urban |
Dismissed |
|
26 |
100 |
2 |
|
3 |
1 |
0 |
|
0 |
38 |
7 |
|
20 |
5 |
0 |
|
158 |
1 |
22 |
|
10 |
4 |
29 |
|
0 |
0 |
1 |
|
6 |
0 |
0 |
|
0 |
44 |
0 |
Total |
223 |
193 |
61 |
Source: CRLR (2012) Annual Report 2011/12
5.1.5
Land Reform
The
strategic objectives of this programme indicate clearly that the focus of the
programme has been on redistribution and provision of support through the
Recapitalisation and Development Programme. It appears that the objective to
strengthen security of tenure for farm dwellers and labour tenants through
provision of legal support to defend their rights was not a priority for the
period under review. The highlights of the programme during the period under
review were: it redistributed 392 852 hectares of strategically located
land which benefitted 1 211 beneficiaries and it
capacitated 277 farmers through agricultural training programmes, exceeding the
target of 40 farmers planned for the year under review. However, the programme
recapitalised 257 farms instead of the planned 387 distressed farms. It was
reported that the main challenge was that the programme could not attract
experienced strategic partners and mentors. The cost of land, availability of
strategically located agricultural land and insufficient budget for the
Recapitalisation and Development Programme hampered progress in this programme.
In addition, the model of strategic partnerships under Recapitalisation and
Development Programme was not clearly understood by the potential strategic
partners. The Department also reported that it encountered some challenges with
development of sustainable business plans and investment in production by
strategic partners.
5.2
Financial
performance of the Department
The original budget
allocated to the Department in 2011/12 was R8.124 billion. The allocation was
adjusted by R 43 361; the final appropriated fund of R8.136 billion was
allocated to the department. As illustrated in Table2 below, the Department has
spent 98.3 per cent of its final appropriation in 2011/12 and under-spent by
1.7 per cent. Although the Department failed to achieve its target to spend 100
per cent of its allocation, the Department has improved from the 2.4 per cent
under expenditure reported in the 2010/11 financial year. The under-expenditure
during the year under review has been mainly attributed to under-spending on
compensation of employees due to failure to attract and retain employees with
adequate specialised skills. It was also due to under-spending in goods and
services due to the delays in projects, particularly in the CRDP.
The Committee expressed
concerns with regard to the general performance of the department. It compared
the expenditure trends and performance against the predetermined objectives and
found that although the Department spent 98.3 per cent of its final
appropriation, about 50% of the targets were not achieved. It further raised
concerns about lack of evidence of value for money in relation to the funds
spent by the department. This is particularly related to programmes like the
Recapitalisation and Development Programme and the land redistribution project
because of poor quality of farms.
Table 4: Budget
allocation and spending per programme 2011/12
Programme |
Final
appropriation |
Actual
Expenditure |
Variance |
Expenditure
as % of final appropriation |
R’000 |
R’000 |
R’000 |
|
|
Administration |
940,483 |
934,248 |
6,235 |
99.3% |
Geospatial
and Cadastral Services |
587,010 |
582,988 |
4,022 |
99.3% |
Rural
Development |
866,868 |
786,392 |
80,476 |
90.7% |
Restitution |
2,393,051 |
2,376,300 |
16,751 |
99.3% |
Land
Reform |
3,349,285 |
3,317,797 |
31,488 |
99.1% |
TOTAL |
8,136,697 |
7,997,725 |
138,972 |
98.3% |
Source: 2011/12
Annual Report of the Department of Rural Development and Land Reform
5.2.1
Administration:
As illustrated in Table 2 above, the programme of administration received a
final allocation of R940.483 million in 2011/12. It spent 99.3 per cent of the
allocation, thus improving from a 97.1 per cent reported for the 2010/11
financial year. The 0.7 per cent under-expenditure reported for 2011/12 was due
to the under expenditure of 24 per cent of the budget allocation for payment of
capital assets. The Committee noted that the final allocation of R15 .74
million for capital assets under-spent by 24 per cent is actually less than the
original R16.13 million allocated in the APP. The Committee raised concerns
that this reflected poor planning by the department.
5.2.2
Geospatial
and cadastral services: This programme received a final allocation of R587.010 million and spent 99.3
percent of the allocation as illustrated in Table 2 above. This represented
another 0.7 per cent under-expenditure of the allocation. Analysis of
expenditure trends have shown a great improvement in this programme because in
2010/11, the programme had under-spent its allocation by 17.1 per cent The
under-expenditure of 0.7 per cent during the period under review was mainly due
to the poor spending of 26.2 per cent for payment of capital assets and delays
in payment of machinery and equipment. It is also linked to the delays in
filling of vacancies. The Department reported that the programme could not
attract the required relevant, qualified and skilled candidates. The Committee
established that this influenced decisions to shift R7.140 million and
virements of R35.020 million from current payments in this programme.
5.2.3
Rural
Development: This programme received a final allocation of
R866.868 million, a significant increase from the original appropriation of
R441.276 million shown in the APP for 2011/12. This increase was mainly due to
virements and shifts of R460 592 to the programme during the adjustment
allocation. This was done in order to augment insufficient allocation for rural
development projects and the rural youth programme in the 2011 Estimates of
Expenditure (ENE). The annual report also stated that the adjustments were also
meant to cover for the budget for compensation of employees in the new
organisational structure. As illustrated
in Table 2 above, R786.396 million or 90.7 per cent of the amount appropriated
to the programme was spent. The under expenditure of 9.3 per cent was
influenced by the 15.7 per cent under expenditure rate for capital assets due
to delays in projects, and under-expenditure of 10.3 per cent in current
payments due to the failure to fill vacancies.
5.2.4
Restitution:
The final appropriation for this programme decreased
from R3.774 billion in 2010/11 to R2.393 billion in 2011/12. In 2011/12, the
commission spent 99.3 per cent of the final allocated budget. The highest under
expenditure rate in this programme is 4.1 per cent in current payment. The Committee
noted the shifting of funds and virements from transfers and subsidies to the
amount of R186.817 million. In addition, R79.134 million was transferred to
land reform for recapitalisation of restitution projects. It
was further noted that the total
financial value of claims approved in 2011/12 was R1.544 billion. However, the
total expenditure as shown in Table 2 included expenditure on backlog claims.
Of the total expenditure, R1.172 billion was used for purchasing land, R760.726
million was for financial compensation and R87.400 million was used for grants.
5.2.5
Land
Reform: The final allocation for this programme was R3.349
billion of which 99.1% was spent. When compared to the expenditure rate of
96.9% in 2010/11, land reform has improved on its spending. The
under-expenditure of 0.9 per cent in the period under review is influenced by
poor spending in payment of capital assets in which only 29.5% of the budget
was spent. Although there is an improvement in spending, the questions raised
by the Committee related to attainability of value for money through the land
reform, that is, the state of farms acquired as well as productivity of those
farms.
6. Public
entity: the Ingonyama
Trust Board
The Ingonyama
Trust was established in terms of the Kwazulu-Natal Ingonyama Trust Act No 3 of 1994, amended by the National
Act 9 of 1997 which provided for the establishment of the Ingonyama
Trust Board (the Trust Board). It functions as a landowner-in-law of the
Although the Ingonyama
Trust Board is a largest land owner in
6.1 Performance of the Ingonyama
Trust Board against the 2011/12 strategic interventions
6.1.1
Land
management: The focus of the Ingonyama Trust Board
under this key area of intervention was to conduct land audits,
developing land management plan for exclusive land, and reconciling the asset
register. During the period under review, none of the targeted 300 title deeds
were consolidated, and this was no reported that this is no longer necessary due
to the falling away of the Communal Land Rights Act. The Committee noted
concerns over lack of report on implementation of the plans to manage exclusive
land to address challenges of relentless squatting and illegal businesses.
6.1.2
Projects:
The Ingonyama Trust Board reported that it assisted
four traditional communities of Ximba, Zungu, Matheni and Mandlakazi to acquire shares in Zululand Anthracite. The
Committee noted concerns that report lacked details about the deal and the
number of members of traditional communities (households) benefiting from the
deal. With regard to bursary fund, the Ingonyama Trust Board reported that R400, 000.00 was paid
to deserving students. However, the Committee noted that there was no criteria
set to differentiate the deserving students. The Ingonyama
Trust Board informed the Committee that the fund was evenly distributed to
students. The report lacked the detail about the number of beneficiaries for
the bursary scheme.
6.1.3
The
Committee expressed concern that the report did not go further than noting 88
per cent of the applications received from communities was approved and paid.
The Committee could not establish how many communities received funds from the Ingonyama Trust Board.
6.1.4
Enhancement
of capacity of the Board to effectively communicate to stakeholders: The Ingonyama Trust Board planned to develop a communication
strategy and increase its awareness programmes to all its stakeholders. The
Committee commended the Ingonyama Trust Board
increasing the staff complement by filling 24 of the 27 approved posts, it
conducted 18 road shows. The Committee noted that the planned decentralisation
of office of the Ingonyama Trust Board was not yet
completed.
7. Consideration of other sources of
information
7.1 Committee
oversight reports
During
2011/12, the Committee jointly conducted oversight visits with the Portfolio Committee
on Agriculture, Forestry and Fisheries (DAFF) to four provinces; namely,
Northern Cape, Limpopo, Free State and Mpumalanga. The focus of these visits
was to look at implementation of CRDP and farmer support programmes by the Department
and DAFF. As reported during the 2010/11 period, the observations are still
relevant because very little has changed. The Committee, therefore, draws some
observations in this section from the oversight report for 2011/12, tabled in
the National Assembly. Findings from these visits show the challenges
experienced by rural communities, farm dwellers and workers. Farmers continue
to face challenges with regard to sustaining productivity on farms acquired as
a result of poorly coordinated support mechanisms. With regard to farm workers,
there were still cases where the Legal Services Project/Land Rights Management
Facility could not assist in preventing evictions of people with long-term
occupier status, especially in the
·
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 257 farms 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. Recapitalisation of group-based projects such
as in restitution faces a threat from weaker institutional organisation of CPAs and Trusts. Dysfunctional common property institutes
pose threat to the success of group-based agricultural projects
·
Livestock farmers complained about
stock theft as well as the predators. They argued that failure to ensure rural
security poses a threat to the sustainability of their farms, 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 required urgent attention.
·
The role of municipalities in land
reform projects as well as support given to farm workers during evictions need
to be strengthened.
·
Private sector organizations such as
the Stud Book South Africa have potential to contribute to the development of
livestock farmers in
·
Apart from creation of job
opportunities for few, strategic partnerships in group-based restitution
projects have not yet resulted in material benefits to households who form part
of various CPAs and Trusts, especially in
7.2 Report
of the Auditor – General
During the period under
review, both the Department and the Deeds Registry Account received a qualified
opinion from the Auditor-General. The department, as it has been for the last three
years, received a qualified report based on the incompleteness of the asset
register. The Committee observed that the matters of emphasis related to same
issues that were raised in the past although the value of liability varies.
When compared to 2010/11, the number of issues under matters of emphasis has
decreased during the period under review.
7.2.1 Department of
Rural Development and Land Reform
The following paragraphs
discuss findings with regard to immovable tangible capital assets, significant
uncertainties and matters:
(a)
Immovable tangible
capital assets: The Department has failed to have a complete asset register for all
government’s immovable properties under its custodianship because state land in
former TBVC states and Self-Governing Territories was not registered in the
Deeds Registry. It was therefore not been vested and thus not recognised in the
financial statements. It was therefore impossible for some audit procedures to
be performed in order to confirm completeness and evaluation of rights and
obligations regarding tangible assets. The Accounting Officer has reported that
the Department has started to address this matter through the verification of
all state-owned land parcels. By 31 March 2012, the project was not yet
complete and was extended until end of December 2012.
(b)
Significant
uncertainties: The Auditor-General drew attention to the fact that no provision has
been made for any liability that may result from claims of R2.402 million
instituted against the Department because the final decision was still pending,
which might be in favour or against the
department; the department’s potential liability of approximately R790 million
towards the claimants has been verified and due for approval in terms of
Section 42D of the Restitution of Land Rights Act, 1994 (Act No 22 of 1994);
and since the amount owed for municipal levies cannot be determined, no
provision had been made in the financial statements for any liability that may
result in respect of municipal rates.
(c)
Other reports: The Auditor-General noted
that the Internal Audit has been investigating 32 cases of alleged
irregularities related to payments to beneficiaries in land claims; land reform
projects; procurement fund; and asset management issues. It also noted that the
Special Investigating Unit was investigating 36 cases of alleged irregularities
in certain land reform projects totalling approximately R495 million. Of all
the investigations, four have been completed by the Internal Audit. Those four
dealt with irregularities related to payments to beneficiaries in land claim
projects and to procurement fraud.
The Committee noted that,
through Internal Audit and the Special Investigation Unit, the Department has
been able to recover over R60m. Therefore, the Committee commended the
Department for these efforts.
7.2.2 The Deeds
Registration Trading Account
This entity received a
qualified opinion based on its failure to account for all the expenditures for
goods and services received during the year under review. As a result, the
operating expenses disclosed in the financial statements are not complete and
understated by R13 318 524. The Auditor-General drew attention to the
significant uncertainties because the entity was investigating incorrect
registration of deeds which might lead to possibly litigation against it.
However, since the outcome of the matter could not be predetermined, no
provision for any liability that may result has been made in the financial
statements.
7.2.3 The
Agricultural Land Holdings Account
Although the entity did
not receive any qualified opinion, the Auditor-General raised matters of
emphasis. Such matters related to the following:
·
The entity incurred losses to the value of R163. 941 million
due to unverified assets (R5. 875 million), inventory written down
(R130 826 million) and lease debtor’s balance outstanding for more
than 90 days (R27. 240 million); and
·
In its exchange transactions the entity has incurred
impairment for an allowance of R74.995 million in which the extent of the
recovery is uncertain.
7.2.4 Ingonyama Trust Board
The entity received a
qualified opinion from the Auditor-General during the period under review based
on the following matters:
·
Non-valuation of land: As a consequence, the Auditor-General
was not able confirm the value of the land disclosed and held by the trust.
·
Incompleteness of royalty revenue: the trust has not
implemented effective controls to ensure that royalty revenue is completely
recorded.
·
Unable to provide adequate supporting documents with regard
to purchase of shares for four traditional councils.
8. The
observations of the Committee
The
Portfolio Committee on Rural Development and Land Reform, having analysed the
strategic plan and discussed the 2011/12 annual reports of the Department of
Rural Development and Land Reform, the Commission on Restitution of Land
Rights, the Ingonyama Trust Board, made particular
observations which are discussed in this section.
It noted an improvement
in the manner in which the Department reports on its annual performance.
However it was concerned about level of detail of the 2011/12 Annual Report. It
further noted the failure of the Department to table quarterly reports, hence
its request for further details. The Committee also observed inadequate capacity
of the Department to effectively implement programmes and projects;
implementation of land redistribution, restitution and farmer support
programmes; supporting rural development and rural livelihoods; and land tenure
and administration.
8.1 Capacity to implement programmes and
achieve targets set out under strategic plan
8.1.1 The Committee
noted that the risk management strategy has been developed and implemented.
However, it is concerned that the project was put on hold and there were no
convincing reasons for putting the project on hold.
8.1.2 The fact that
only one piece of legislation, the Spatial Planning and Land Use Management
Bill was tabled in Parliament late made it difficult to meet the
8.1.3 Although the Committee
welcomed an extensive process of consultation on the Green Paper on Land
Reform, it remained concerned about the department’s strategy for meaningful
public participation and engagement. The Committee reflected on its own
engagement with the Department on the Green Paper, that it has not been
adequate. It further raised concerns about the failure of the Department to
attract people with skills and capacity to develop policies. This is of particular
concern to the Committee because of the amount of policy and legislation
development that would ensure from the processes of Green Paper on Land Reform.
8.2 Implementation of land redistribution,
restitution and farmer support programmes
8.2.1 The Committee
was informed that the policy proposals in the Green Paper on Land Reform would
assist the State to improve the pace of land redistribution in order to address
the land ownership inequalities in
8.2.2 The Communal
Property Associations Annual Report (2009/10) provides an overview of the
turnaround strategy for the Communal Property Associations. “The aim of the
strategy is to provide state institutional backing to ensure compliance”. The Committee
was previously informed STRIF in collaboration with the programme for land
reform under the Recapitalisation and Development Programme would ensure that
this work is carried out. The Committee expressed concerns that both programmes
of land reform and rural development did not report on implementation of the
turnaround strategy for the CPAs.
8.2.3 The Committee
noted that land acquisitions exceeded the set targets. However, it also noted
that those were the reduced targets and that more money was being spent to
acquire fewer hectares, thus benefiting fewer people or households. The only
mechanism for farmer support is the Recapitalisation and Development Programme.
However, the Committee is concerned that the perennial recapitalisation funding
affects the allocation for land acquisition. In view of this perennial
recapitalisation funding, the Committee concluded that there was no
comprehensive strategy for support to land reform beneficiaries and the emergence
of smallholder farmers. This remained a critical policy gap.
8.3 Supporting
rural development and rural livelihoods
8.3.1 Indeed,
various interventions have been made throughout the nine provinces of
8.3.2 The key
challenge identified by the Committee is with regard to funding for rural
development and coordination of such funds and interventions. The Committee is
of the opinion that there was no adequate capacity to implement such a
programme which requires intergovernmental approach to development.
8.4 The Committee
made the following observations with regard to the Ingonyama
Trust Board:
8.4.1
The
Committee noted that the Zulu history book project which has been on the plans
of the Ingonyama Trust Board was incomplete, yet the
cost of this project was paid in full. The Committee noted that the Ingonyama Trust Board has not recouped the amount paid to
the service provider.
8.4.2
During
the year under review, the Ingonyama Trust Board
continued with the construction of its new Headquarters in Pietermaritzburg.
This project was to be concluded in 2012/13. The Committee has noted that the
transfers from the Department were not enough for the construction, and found
that the Ingonyama Trust Board was using its own
funds for the project.
8.4.3
The
Committee was concerned about lack of clarity about matters relating to
municipal rates being levied on to the Ingonyama
Trust Board and the continued disputes between the Ingonyama
Trust Board and municipalities on this issue. The Committee argued that the
Department and the Ingonyama Trust Board should
resolve this matter.
9. 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
on Restitution of Land Rights), the Portfolio Committee on Rural Development
and Land Reform recommends the Minister of Rural Development and Land Reform
should ensure that -
9.1 The Department of Rural Development and
Land Reform introduces mechanisms to enhance effective coordination among the
various spheres of government and integration of rural development at local
and/or district levels in a manner that fosters intergovernmental approach to
rural development. The Department should submit a report to Parliament within
two months of adoption of this report.
9.2 The Department of Rural Development and
Land Reform develops and implement strategies and plans to ensure the
following:
9.2.1 Recruitment of highly skilled professionals
and development of an intensive programme for staff development to address
capacity challenges in the area of policy development and monitoring and
evaluation, as well as coordination of rural development programmes;
9.2.2 Effective performance monitoring and
evaluation systems to track progress and identify problems and deficiencies in
project implementation across the programmes, especially CRDP and land reform;
and
9.2.3 Building of internal systems and capacity
for the implementation of the Risk Management Strategy and fraud prevention.
9.3. The Department of Rural Development and
Land Reform reports to Parliament, within three months of adoption of this
Report by the House, on the following issues:
9.3.1 The development and maintenance of 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;
9.3.2 The financial implications for finalisation
of the restitution claims within Medium Term
Expenditure Framework baseline allocation and submit a report to Parliament;
9.3.3 Capacity of the Department to implement a
faster pace of redistribution of land to beneficiaries as proposed in the land
reform model of the National Development Plan. The Committee recommends that
the Department submits a report on how the programme of land reform integrates with
agricultural/farmer support in the form of access to input costs, access to
markets, and agricultural research and extension support;
9.4.4 Submission of plans about how the programme
of land redistribution can be a strategy to support smallholder farming and
farmers in South Africa and smallholder farming as a strategy to address the
challenge of food insecurity; and
9.4.5 Submission of the plans regarding
performance of the National Rural Youth Service Corps programme and how the
Department plans to ensure that the graduates from this programme are deployed
or integrated in work place.
9.4 The Department of Rural Development and
Land Reform facilitates the review and harmonisation of all legislation that
impacts on development of the rural areas, For example, the Communal Property
Associations Act, 1996 (Act 28 of 1996), The Traditional Leadership and
Governance Frameworks Act, 2003 (Act 41 of 2003) and the Traditional Courts
Bill [B15 – 2008].
The
Portfolio Committee on Rural Development and Land Reform further recommends the
Minister of Rural Development and Land Reform ensures that the Ingonyama Trust Board -
9.5 Submits
to Parliament, its fund disbursement policy and strategies for disbursement of
funds to relevant traditional communities within two months of adoption of this
Report by the House;
9.6 Conducts
an assessment of the proposed decentralised district offices of the Ingonyama Trust Board and report to Parliament about the
financial implications of the decentralisation process within three months
after adoption of this Report by the House;
9.7 Reviews
its bursary policy and improve the criteria through which deserving students in
its area of jurisdiction qualify for bursary funds. The Ingonyama
Trust Board should report to Parliament within three months after adoption of
this Report by the House; and
9.8 Reports
to Parliament, within three months after adoption of this Report by the House,
on how it intends to address all the matters raised by the Auditor-General,
especially the reasons for qualified audit opinion. Management meetings with
the Auditor-General should be used to clear up any differences between the
Auditor-General and the Ingonyama Trust Board.
Budget recommendations
Rural
development and land reform is one of the top five priorities of government.
The Portfolio Committee on Rural Development and Land Reform recommends that
budget allocation for this mandate should reflect the high priority accorded to
the portfolio. The Portfolio Committee on Rural Development and Land Reform
recommends, in particular, an increase in budget allocation of the Department
of Rural Development and Land Reform for the following programme areas:
9.9 Restitution is a constitutional mandate
in terms of Section 25 (7) and it entitles victims of apartheid land
dispossession to restitution. The Portfolio Committee on Rural Development and
Land Reform recommends that the National Treasury and Department of Rural
Development and Land Reform should devise appropriate mechanisms to finance finalisation
of all outstanding and backlogs claims by 2014;
9.10 Within three months of adoption of this
Report by the House, both the Department
of Rural Development and Land Reform and National Treasury should submit to
Parliament a programme that illustrates how government would fund restitution
in order to settle and finalise all land claims by 2014; and
9.11 The success of land reform and successful
smallholder farmers require increase in allocation infrastructure development
on farms and start-up capital. The Portfolio Committee on Rural Development and
Land Reform recommends that allocation for farmer support be increased in order
to ensure the recapitalisation and development programme that can result in
increase in farm productivity.
Report
to be considered.