ATC120523: Report Annual Report & Financial Statements of the Department Rural Development & Land Reform & on the Report of the Auditor General for the 2010/11 Financial Year, dated 23 May 2012

Public Accounts (SCOPA)

DRAFT RESOLUTION

SEVENTH REPORT OF THE COMMITTEE ON PUBLIC ACCOUNTS ON THE ANNUAL REPORT AND FINANCIAL STATEMENTS OF THE DEPARTMENT RURAL DEVELOPMENT AND LAND REFORM AND ON THE REPORT OF THE AUDITOR GENERAL FOR THE 2010/11 FINANCIAL YEAR , DATED 23 MAY 2012

 

 

 

1. Introduction

 

The Committee on Public Accounts (the Committee) heard evidence on and considered the contents of the Annual Report and Report of the Auditor-General on the 2010/11 financial statements of the Department Rural Development and Land Reform (the Department) and the Committee noted the qualified audit opinion, highlighted areas which required the urgent attention of the Accounting Officer, and reports as follows:

 

2. Tangible capital assets

 

The Auditor-General was unable to obtain sufficient and appropriate audit evidence to determine the completeness of the properties recorded in the immovable asset register as disclosed in disclosure note 34 to the financial statements.

 

The Committee recommends that the Accounting Officer ensures that:

 

a) There is coordination between the Department and the Department of Public Works to address the challenges identified in the National Vesting Master Plan in order to ensure the completeness of the immovable asset register, in particular; and

b) Proper record keeping is implemented in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial reporting.

 

3. Emphasis of matters

 

The Auditor-General drew attention to the following matters:

 

3.1 Commitments

 

As disclosed in note 21 to the financial statements, included in commitments of R6.573 billion is an amount of R642 million relating to projects that are older than three years on which there has been no movement (no payments were made) due to changes in restitution settlement options, community disputes, tribal disputes, family disputes and/or untraceable claimants.

 

The Committee recommends that the Accounting Officer ensures that outstanding payments are processed timeously, and in accordance with the latest frameworks on restitution settlement options.

 

3.2 Irregular, fruitless and wasteful expenditure

 

The Auditor-General identified the following:

 

a) Fruitless and wasteful expenditure of R73.406 million was incurred, as a result of interest paid as compelled by the court on late settlement of land purchases; and

b) Irregular expenditure of R45 536 million was incurred as a result of non-compliance with departmental policies and procedures and overspending on certain restitution projects without the necessary approval as per the delegations of authority.

 

The Committee recommends that the Accounting Officer ensures that:

 

a) Policies, procedures and monitoring controls are strengthened to make certain that payments on land claims are made timeously; and

b) Appropriate disciplinary action is taken against officials found to have been responsible for the irregular expenditure.

 

4. Investigations

 

The Auditor-General reported the following :

 

a) The department has engaged the Special Investigation Unit to conduct investigations into 11 cases of allegations of irregularities relating to land reform and restitution projects; and

b) There are 20 other cases under investigation by internal audit. These investigations relate to allegations of irregularities related to the:

· verification of and payments to beneficiaries in land claim projects,

· land reform projects,

· procurement fraud, and

· asset management issues.

 

The Committee notes the reported investigations, urges the Accounting Officer to ensure their finalisation without unnecessary delay, and to apply whatever corrective measures necessary to recover all and any monies found to have been irregularly expended.

 

5. Conclusion

 

The Committee recommends that the Executive Authority submits a progress report on the implementation of all the above recommendations to the National Assembly within 60 days of the adoption of this Report by the House.

 

The Committee further recommends that the Accounting Officer submits quarterly reports on all the above-mentioned recommendations.

 

 

Report to be considered