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PRESENTATION TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM. 2012/2013 ANNUAL REPORT Date: 16 October 2013. Contents. Strategic Overview (Part A) Pre-Determined Objectives Performance Overview (PART B) Financial Performance Overview (Part C). PART A. Strategic Overview.
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PRESENTATION TO THE PORTFOLIO COMMITTEE ONRURAL DEVELOPMENT AND LAND REFORM 2012/2013 ANNUAL REPORT Date: 16 October 2013
Contents • Strategic Overview (Part A) • Pre-Determined Objectives Performance Overview (PART B) • Financial Performance Overview (Part C)
PART A Strategic Overview
Strategic Overview • DRDLR has entered in the 5th year under the current Administration. • It has set the vision of creating vibrant, equitable and sustainable rural communities. • Positive strides have been made in addressing the triple challenges facing our country namely: poverty, unemployment and inequality through Comprehensive Rural Development Programme (CRDP) & Land Reform programmes.
Strategic Overview • The strategic thrust underlying land reform is that it should be carried out with minimal or no disruption to food security. • Government views the National Development Plan as its developmental framework and the New Growth Path as its strategy. • The programmes of the department are aligned to the NDP through the 2014-2019 Medium-Term Strategic Framework (MTSF).
PART B Pre-determined Objectives Performance Overview
Program 1: Administration • Reduced funded vacancy rate to 10% Despite not achieving the target, critical positions in the following strategic positions were filled: • 42 Senior Management posts • Chief Land Claims commissioner • Deputy Director General for Rural Infrastructure Development • Deputy Director General for land Reform and Administration
Program 1: Administration Cont.. • 68% of audit management action plans were implemented. • Of the 50% organisational renewal plan targeted, 47% were implemented and the slight variance is attributed to removal of two deliverable under the renewal strategy, viz: communication Strategy & Supply chain policies
Program 1: Administration Cont.. • Despite not achieving the target of 10 policies submitted to cabinet, the department has recorded the following milestones: • Land Management Commission Policy was approved in Land March 2013. Policy on land Owned by Foreign Nationals (PLOF) was referred back for further consultation. • Three policies were approved internally, these are: the Rural Development Policy Framework (RDPF), Land Tenure Security Policy for Commercial Farming Areas and the Restitution Policy.
Program 1: Administration Cont.. • The variance on the submission of targeted policies to Cabinet is attributed to the prioritisation of participatory consultation processes and the necessary intensive research undertaken.
Program 2 : Geospatial & Cadastral Services Under this program, one of the major achievements has been the verification of 99.5% of the State land register It has also recorded significant performance in the following areas: surveying of State land in the former homelands and skills development in the form of championing training in geomatics to mitigate against the scarcity of technical expertise in this area of service.
Program 2 : Geospatial & Cadastral Services Cont.. The department continued to service the backlog of 25 spatial plans which could not be delivered in the 2012/13 financial year and this led to 14 Spatial Plans formulated out of 37 targeted for. Furthermore, the limited human resources focused on supporting Parliament in the processing of the SPLUM Bill.
Program 3 : Rural Development In pursuit of promoting vibrant, sustainable and equitable rural communities, the department performed significantly well in the following service areas: Assisting rural communities with agricultural infrastructure and services, Providing households with access to socio-economic infrastructure using the CRDP model, Skills development (especially targeting rural youth) in order to improve rural livelihoods and creating Jobs through rural development initiatives.
Program 3 : Rural Development Cont.. In these performance areas, the department did not just meet its commitments for the year under review; it exceeded its set targets. This is viewed as a positive indication towards the realisation of the CRDP objectives. 2131 households access food security interventions. More than 4500 people assisted to access skills to improve rural livelihoods A total of 5881 youth were trained through the NARYSEC programme during the year under review.
Program 4 : Restitution • The Commission on Restitution of Land Rights finalised a total of 602 land claims between 1 April 2012 and 31 March 2013. • The variance is attributed to the fact that most of the senior and executive management positions were filled which contributed to the improvement on the capacity of the Commission to deliver. • The Commission settled more financial compensation claims where research work had already been completed and fewer cases which warranted referral to court resulting in an administrative settlement.
Programme 4 : Restitution A total of 376 land rights restored or awards of alternative equitable redress were finalised out of 380 targeted for. Disputes between the family members and the delays in the conveyancing processes were among the other challenges that contributed to the slight variance.
Programme 5 : Land Reform Land reform remains a critical priority of the department and one of the central pillars of the CRDP. The program acquired and allocated a total of 157 556 hectares of land to beneficiaries. Improving the productivity of the acquired farms, forms part of the department’s support provided to emerging farmers, in this regard then a total of 200 farms were placed under the Recapitalisation and Development program over the financial year under review.
Programme 5 : Land Reform Cont.. Department performed significantly well in creating 1059 jobs through the land reform program. Job creation and training of farmers aimed at improving productivity of the land reform farms play a significant role in promoting sustained rural livelihoods in line with the objectives of the CRDP.
Programme 5 : Land Reform Cont…. Changes were made on the indicator “number of irrigation schemes under revitalisation” and its targets were moved from the Land Reform Program to the Rural Development Program. This was informed by the fact that revitalization of irrigation schemes has a lot to do with infrastructure development which is the competence of the Rural Infrastructure Development Branch. As a result of this, both the indicator and its targets were moved to the Rural Infrastructure Development Branch.
Key priorities for the forthcoming financial year The National Development Plan (NDP) identifies the following policy imperatives, which will be the focus of the coming MTSF period: • Improved land administration and spatial planning for integrated development with a bias towards rural areas • Up-scaled rural development as a result of coordinated and integrated planning , resource allocation and implementation by all stakeholders • Sustainable land reform (agrarian transformation) • Improved food security • Smallholder farmer development and support (technical, financial, infrastructure) for agrarian transformation • Increased access to quality basic infrastructure and services, particularly in education, healthcare and public transport in rural areas • Growth of sustainable rural enterprises and industries characterised by strong rural-urban linkages, increased investment in agro-processing, trade development and access to markets and financial services– resulting in rural job creation
PART B2012/1213 Financial Performance
2012/13 Financial Performance Summary • In the year under review, the department focused on developing policies and legislation with a view to strengthen the realisation of its mandate. As a result, extensive public consultations on key policies were held. This proved to be a significant cost driver in the year under review • Details on the various policies and legislation implemented by the department are outlined in the Predetermined Objectives part of the Annual Report. The implications of the new policies and legislation will require the department to increase internal capacity to adequately support implementation. • The year 2013 marks the centenary of the 1913 Natives Land Act. In this regard, the last quarter of the financial year focused on activities geared towards marking the centenary and reversing the legacy of the past. • The project to identify state-owned land parcels from the ownership register managed by the Deeds Registries was completed. The construction of the Nkosi Dalibhunga Mandela Legacy Bridge, and access road between Mvezo Village and the N2 turn-off in the King Sabata Dalindyebo Local Municipality in the Eastern Cape was also completed. Funding of this project was in collaboration with the Eastern Cape Provincial Government. • Expenditure for the year amounted to R8.9 billion representing 99.4% of the final appropriation (2011/12: R7.9 billion and 98.3%). This reflects an increased spending of 1.1% or R922 million. Unspent funds of R55 million (0.6%) remained attributable to delays in filling vacant funded posts. The variances per programme are detailed in the notes to the appropriation statements. • As disclosed in the Appropriation Statement, virements were effected to accommodate excess expenditure in the relevant programmes. The shifting of funds within a programme was also effected in accordance with the Public Finance Management Act.
2012/13 Financial Performance Summary cont…. • The Deeds Registries are established in terms of the Deeds Registries Act, 1937 (Act 47 of 1937). The main source of funding is fees charged on the registration of deeds and on the sale of deeds information. The entity keeps full records of the financial affairs separately from that of the department. Shortfalls in the account, if any, are appropriated from savings in the budget of the department under Programme 2. The entity’s audited annual financial statements are included in this Annual Report. • The Agricultural Land Holding Account was established in terms of the Land Reform: Provision of Land and Assistance Act, 1993 (Act No. 126 of 1993). The entity receives its funding from the department’s appropriated funds. It keeps full records of its financial affairs separately from that of the department. The entity’s audited annual financial statements are included in this Annual Report. • The Ingonyama Trust Board is established in terms of the provisions of the Kwazulu-Natal IngonyamaTrust Act, 1994 (Act No 3 of 1994). Its core business is to manage land for the material benefit and social wellbeing of the individual members of the tribes. The entity’s audited annual financial statements are disclosed in its own Annual Report. • The department did not have conditional grants transferred to other spheres of government; it had partnership agreements with entities of government as implementing agents to implement various projects on its behalf. It had transferred over R195, 9 million to these entities during the period under review. Funds that were not utilised at year-end are disclosed as receivables. • On Public Private Partnership the relocation of the department’s Tshwane staff into one office campus has not progressed as anticipated. This is mainly due to the negotiations that are still taking place with the preferred bidder and National Treasury taking into account the risks associated with the review that was instituted by the reserve bidder. • The department has established governance committees to assist the Accounting Officer in discharging his duties and responsibilities for the effective administration of the department.
2012/2013 Financial Performance • Reasons for unspent funds: • Current senior management vacancy rate is 19.93 %
Virements • These virements were effected for the following reason: • From Land Reform to Administrationto augment the shortfall under goods and services • for the renewal strategy • From Geospatial and Cadastral Services to augment the shortfall on the NARYSEC • programme for stipend ,the programme is extended to four years. • Restitution to Land Reform(ALHA) to implement Restitution development projects in • terms of Recapitalisation and Development policy.
Personnel establishment and vacancy rate
Corporate Governance • In order to strengthen accountability and weaknesses in the internal control systems: • The Risk and Compliance Committee, chaired by a member of the Audit Committee has since been established and its recommendations are implemented timeously • The Risk Management framework has been updated and the operating and fraud risk registers of the Department have also been updated • Standard Operating Procedures are in the process of being developed • The Department of Rural Development and Land Reform remains committed and will continue to implement financial management control measures to ensure that service delivery targets are met effectively and efficiently. • Internal and External Audit recommendations are implemented
Audit outcome for 2012/13 Financial • The departmental Audit was completed by the Auditor-General of South Africa (AGSA) within the legislated deadline of 31 July 2013. • The audit report was issued by AGSA on 31 of July 2013 and the department has obtained an unqualified audit opinion for the first time after receiving qualified opinions in prior years. • The audit report contains emphasis of matter regarding significant uncertainties. These matters were not as a result of audit findings but as disclosed upfront by the department in the notes to the AFS. The AG deemed it necessary to bring these matters to the attention of the users of the AFS. The emphasis was on: • 3.1 Claims instituted against the department amounting to R3 602 million. These claims are subject to the • outcome of legal proceeding. As a result, no provision for any liability (interest and legal costs) has • been made in the financial statement of the department. • 3.2 The department has a possible liability towards the claimants in terms of the Restitution of Lands • Rights Act, 1994 (Act No. 22 of 1994). The total amount of claims verified and on route for approval in • terms of section 42D of this Act amounts to approximately R205 million, for which once approved by • the Minister it will increase the commitment amount disclosed in Note 21 to the AFS. • 3.3 The department has a possible obligation to pay municipal rates on properties of the department. The • municipalities may levy rates on properties within their areas in accordance with their rates policies for • current and prior years. The ultimate outcome cannot be presently determined and no provision for • any liability in respect of municipal rates that may result has been made in the AFS.
Audit outcome for 2012/13 Financial cont… • Other important matters were reported by the AG and the department has already developed Management Action Plans in order to address these matters. The action plans are monitored monthly by management and progress is reported to the Audit Committee for oversight. • As at 30 September 2013, the department has fully implemented 51% of the totals findings raised, 35% were partially implemented, 7% not yet implemented due future implementation dates and 6% are no longer applicable. This was discussed with AGSA. • The department remains committed to maintaining the unqualified audit opinion that it received and will continue to implement measures to attain this ideal.
Financial Performance as at 30 September 2013
2013/2014 Financial Performance summary as at 30 September 2013 • Total spending to the end of the 2nd quarter amounted to R5.0 billion, representing 53.8% of the appropriated funds. • Administration spent 64.1% • Geo-spatial and Cadastral Services spent 64.6% • Rural Development spent 71.8% • Restitution spent 50.3% • Land Reform spent 46.3%
