DALRRD Portfolio Audit Outcomes: DALRRD, CRLR, OVG & SAVC 2020/21 Annual Reports; with Minister & Deputy Minister

Meeting report

The Chairperson welcomed all officials from the department and its entities.

He congratulated Mr Ramasodi Mooketsa on his appointment as the Director-General (DG) of the Department.

He applauded all the political parties that participated in the Local Government Elections.

 Ms Kgabo Komape, Business Executive, Auditor-General of South Africa (AGSA), indicated that they would present the audit reports of the Department of Agriculture, Rural Development and Land Reform (DRDLR) and each of its entities, except the Ingonyama Trust Board (ITB) as it was still under audit. Officials from the ITB had only managed to submit the entity’s Annual Financial Statements (AFS) on 31 August.

She said the presentation would provide the Committee with a comparison of the audit outcomes over the past three years. Additionally, the Auditor-General (AG) would present the audit outcome of the merged DALRRD.

AGSA on the 2020/21 audit outcomes of the Department of Agriculture, Land Reform and Rural Development and entities

Mr Thabo Ditodi,Senior Manager: Rural Portfolio, AGSA, briefed the Committee on the audit of the DALRRD and its entities:

Key findings

• Both the Deeds Registration Account (DEEDS) and the Office of the Valuer- General (OVG) regressed from a clean audit outcome in the prior year to an unqualified opinion with compliance findings;
• The audit outcome for the Commission on Restitution of Land Rights (CRLR) improved from adverse to unqualified with findings;
• Six of the entities managed to submit their financial statements by the legislated date, compared to nine in the prior year;
• The DALRRD, DEEDS, the National Agricultural Marketing Council (NAMC) and the Perishable Products Export Control Board (PPECB) submitted financial statements that did not contain material misstatements;
• Irregular expenditure incurred by the department and its entities decreased from R333 million in the 2019-20 financial year to R92 million during the year under review;
• Fruitless and wasteful expenditure incurred by the department and its entities decreased from R47 million in the 2019-20 financial year to R16 million during the year under review.

 

Financial Performance

The AG reported that the overall audit outcome in the portfolio had remained stagnant when compared to the prior year, with most (six out nine) of the audits obtaining unqualified opinions with findings. However, both DEEDS and OVG had regressed from a clean audit opinion in the prior year to unqualified with findings. Only the PPECB achieved a clean audit.

The AG found that over the past two years the department and its entities had incurred R425 million of irregular expenditure. However, the irregular expenditure had decreased significantly from R333 million during the 2019-2020 financial year, to R92 million in the current financial year. The three biggest contributors to this figure were the department, with R30.9 million in irregular expenditure; the National Agricultural Marketing Council (NAMC), with R25 million, and the Agricultural Land Holding Account (ALHA) whose irregular expenditure amounted to R13.9 million.

Fruitless and wasteful expenditure by the department and its entities also declined during the year under review to R16 million from R47 million in the prior financial year. The highest contributors to this expenditure were the DALRRD, with R10.91 million, and Onderstepoort Biological Products (OBP), with R4.9 million.

The AG reported that there was an overall stagnation in supply chain management (SCM) compliance amongst the department and its entities. There were material findings on SCM in the department, the ALHA, the Agricultural Research Council (ARC), the NAMC, and OBP, which was a continuation from the prior year. Some of the reasons for these findings were that competitive bids were not advertised for 21 days (DALRRD) and that there was no competitive and fair procurement practice (OBP). There were no findings on SCM compliance at three entities - the PPECB, DEEDS and the CRLR. The OVG regressed from no findings to findings on SCM compliance.

The AG raised concerns about a lack of consequence management at both the DALRRD and NAMC, as disciplinary steps were not taken against officials who were responsible for irregular, fruitless and wasteful expenditure. 

There were still issues in the internal control environment of the department and its entities:

• There was a lack of regular reporting and monitoring during the year;
• Audit Action Plans (AAP) did not always reflect on the comprehensive value chain of the entities, thus not addressing root causes;
• There was non-adherence to processes and prescripts.

 

Ms Komape said the highlight of the audit was that there were no material findings in the AFS of the merged department. She stressed the importance of ensuring that processes were streamlined so that all the policies and procedures that might have been in place in the previous departments were embedded into the new department.

She told the Committee that, in due time, the AG would begin implementing the Public Audit Act (PAA). She added that Section 38 of the Public Finance Management Act (PFMA) stressed the importance of the Accounting Officer preventing irregular, fruitless and wasteful expenditure from occurring.

She mentioned that the performance of the ALHA required attention. Both DEEDS and the OVG remained on the track, but they should attend to issues of non-compliance with key legislation.

The Chairperson opened the floor for discussion.

Discussion

Ms M Tlhaphe (ANC) noted that progress had been made within the merged department and its entities However, issues, such as non-compliance with legislation, still remained.

She referred to the significant impact that the late submission of the AFS had on an entity’s performance. She asked what the implication would be for the ITB, having submitted its AFS on 31 August 2021. What impact did its late submission have on the overall audit outcomes for the department and its entities? What action did the AG take when an entity submitted its AFS late and did not implement its AAP to address root causes? There must be no tolerance for non-compliance with legislation.

She asked for clarity on the reasons for selecting the department and the ALHA for a material irregularity (MI) process.

Ms A Steyn (DA) congratulated Mr Ramasodi on his appointment and said it would have a positive impact on the department’s performance.

She asked whether the CRLR had tabled its annual report late and if so, had the AG picked this up?

She asked whether it would be possible for the Committee to institute a forensic investigation into the Land Holding Account and into ALHA grant funding of R500 million which the AG found was not supported by evidence that the money was used for qualifying expenditure. If it could, at what stage could the Committee do so? Furthermore, had the department attempted to reconcile the amounts paid with the affected farmers.

Mr N Capa (ANC) asked whether the AG had found areas where there were repeat findings and areas where there had been improvement. 

Ms T Breedt (FF+) congratulated Mr Ramasodi on his appointment and wished him well in his position.

Whilst she was pleased that the CRLR had improved its audit outcome, she was disappointed that two entities had regressed in their audit outcomes and that the others had stagnated at unqualified with findings. She indicated that greater initiative should be taken to ensure that there is improvement in all the entities’ audit outcomes.

Inkosi R Cebekhulu (IFP) expressed his hope that the appointment of the new Chief Executive Officer (CEO) at the ITB will bring about improvement in the entity, particularly as he had previously acted as the Minister’s appointee to the ITB. 

Responses

Mr Ditodi said the audit outcomes were a mixed bag.  

On the late submission by the ITB, he said this would have an impact on the Committee’s ability to exercise its oversight duties. He suggested that action should be taken to ensure that this did not re-occur.

Referring to AAPs, he clarified that the implementation of the plan was left to the Accounting Officer and management within the department or the entity. The role of the AG was to conduct a high level review of the status of records and an interim audit, which was then issued to management. In the review the AG provided management with an independent assessment to ensure that the underlying root causes were being addressed and that the AAPs were being implemented. It was critical that, when findings were looked at by the department or entity, the intention was not only to address the audit finding or to remove a potential qualification, but also to ensure that the overall internal processes were attended to.

On non-compliance with legislation, he saids that the CRLR was required by the Restitution of Land Rights Act (RLRA), 1994, to table its annual report on 1 June. The PFMA stated that entities must prepare their AFS within two months after the end of the financial year on 31 March, yet, the AG was expected to audit AFS from 1 June. There was a misalignment between the PFMA and the RLRA.

On the question about investigating the ALHA grant funding, he said that the AG would not necessarily investigate the matter.

In response to the question on the material investigations, he said that the MI process was embedded in the audit process.

On the repeat findings, he indicated that one of the positives in this audit was the CRLR moving from an adverse finding in the prior year to an unqualified with findings audit outcome in the current financial year. Through the office of the Chief Financial Officer (CFO), the AG was able to provide support to the CRLR in achieving this. Another improvement noted by the AG was the synchronisation of the compilation of financial performance of the merged department.

He indicated that issues affecting ALHA need to be attended to and brought to finality. Another concern was the qualification of the ARC audit opinion for repeat findings regarding property, plant and equipment. However, the AG acknowledged that the entity was addressing the qualification.

Ms Michelle Magerman, Business Executive, AGSA, told the Committee that the late submission of the AFS was deemed to be non-compliance with the legislated deadline. Furthermore, the AFS needed to be accurate and complete throughout the year. Preventive controls should be implemented to ensure that recording was done accurately on a weekly and monthly basis, hence the importance of the AAPs. She added that the poor findings in this report were due to internal controls not being in place throughout the year. Controls must address the root causes. For instance, where individuals were not performing their roles, the root cause must be addressed so that there was role discipline. She urged that the department embed its APP to improve its audit outcome. 

Still referring to controls, she said that the PAA was currently being phased in. It would ensure that Accounting Officers were able to implement the responsibilities bestowed upon them by the PFMA, such as consequence management or controls to prevent unauthorised, irregular, fruitless and wasteful expenditure.

Ms Komape confirmed that the ITB was non-compliant in submitting its AFS two months late. She requested that the Committee assist it with ensuring that the matter was dealt with, so that this did not affect other entities. 

Regarding the CRLR, she said there needed to be an engagement with National Treasury on the matter because, if the CRLR was expected to submit its AFS on 1 June, then the Committee would not have access to the audit report immediately after receiving the annual report. This would prevent it from verifying whether the AFS were reliable.

Referring to the role of AG, she said that the AG did not want to promote overreliance on the audit process. As it stood, Section 38 of the PFMA required that the Accounting Officer put in place controls and mechanisms that would guard the fiscus of a department or entity, and stop risks once identified. In their recommendations on the AAPs, the AG indicated that successful implementation of the plans depended on transparent reflection. She recommended that the Committee should engage with the department on a quarterly basis and place pressure on them regarding the implementation of the AG’s recommendations on strengthening internal audit and the audit committee, both of which were important to ensure that quarterly reports are transparent. 

She requested that Members assist the AG in ensuring that when the department appeared before them it must demonstrate how it was dealing with the root causes.

The Committee was at liberty to request that the Minister institute an investigation into the ALHA funding matter, as the PFMA placed the responsibility to institute investigations in the hands of the Accounting Officer. She added that the AG would support the Committee in ensuring that consequence management was instituted to ensure that there was accountability.

The Chairperson asked Members how long the Committee would allow for the ITB to not be held accountable. There was a set deadline for the audit process, yet the ITB was unable to meet it. He was concerned that this behaviour could spill over into other entities and eventually other departments. Currently there was no Zulu monarch, which meant that there was no beneficiary. If it was the case that the ITB was a failed entity, he suggested that Members should consider recommending that it be scrapped and that another solution be found which would serve the monarchs in the country and the lands they looked after. This could be an ongoing discussion for the department and the entity.

Remarks by the Minister

Ms Thoko Didiza, Minister of Agriculture, Land Reform and Rural Development, told the Committee that the merged department had made some progress in implementing its programme and in respect of its audit outcome. The department appreciated the CRLR’s work, particularly in improving its audit opinion. She mentioned that there had been challenges in the work of the CRLR, mainly because the Covid-19 pandemic meant that the Commission had been unable to engage with claimants. 

The appointment of councils and boards had assisted in ensuring oversight in the running of the entities and the department had provided support to ensure they fulfilled their task. She added that the appointment of the DG would bring much needed stability in the department. She assured Members that the department would continue to fill vacant posts that had been funded.

With the assistance of the Department of Public Service and Administration (DPSA), the department was also attending to the issue of certain staff members whose qualifications did not match their responsibilities.

Responding to the possible need for a forensic investigation into the ALHA grant funding matter, she requested that the Committee reflect on the issue and then guide the department once it had taken a decision.

In the prior year, the department had indicated that it would provide assistance to the ITB, as it was clear that there was a lack of trust in it. However it believed that the appointment of the CEO would assist in improving matters. The department would continue to seek advice on how best to tackle the ITB’s issues and it would be guided by the Committee.

The DG of the DALRRD, Mr Mooketsa, said the department had noted all the issues emanating from the discussions with the AG.

DALRRD’s 2020/21 Annual Report

Mr Rebaone Phuthi, Acting Chief Director: Monitoring and Evaluation, DALRRD, and Ms Rendani Sadiki, CFO, DALRRD, briefed the Committee on the department’s 2020-2021 annual performance report.

In his introduction, Mr Phuthi reminded the Committee that the President, in his 2020 State of the Nation Address, announced that 700 000 hectares of state land would be released for agricultural production. So far the department had managed to release 135 117 hectares of land to 275 farmers. Of these, 160 (58.2 percent) were women, 114 (41.5 percent) were men and one was an individual living with a disability.

Key findings

• R14.1 billion out of a total available budget of R15.2 billion was spent during the 2020-21 financial year;
• R1.15 billion (7.6 percent of the budget) was unspent;
• Invoices were not settled within 30 days or an agreed period after receipt of an invoice, as required by Treasury regulations;
• Irregular expenditure of R203.84 million was incurred;
• There was fruitless and wasteful expenditure of R44.54 million;
• There was a lack of consequence management against officials responsible for irregular, fruitless and wasteful expenditure;
• The vacancy rate currently stood at 15.7 percent;
• The department achieved 59 percent of its targets.

 

Financial Performance

Ms Sadiki informed the Committee that the department spent R14.1 billion or 92.4 percent of a total budget allocation of R15.2 billion during the financial year. The department was disappointed to report that it had underspent by 7.6 percent, or R1.15 billion. Expenditure was geared towards six programmes, which were:

• Administration;
• Land administration;
• Rural development;
• Economic development, trade and marketing;
• Food security, land reform and restitution;
• Agricultural production, health, food safety, natural resources and disaster management.

 

Programme 2: Agricultural production

Expenditure in this programme amounted to R2.82 billion out of a budget of R2.95 billion. The lower spending was attributed to Covid-19 restrictions which caused delays in the mobilisation of farmers and data collection for the Kaonafatso Ya Dikgomo and Poultry Schemes.

Programme 3: Food Security, land reform and restitution

Of the R6.77 billion allocated to this programme, R5.91 billion was spent, leaving R851.8 million unspent. One of the reasons for the underspending was the department’s delay in issuing vouchers to farmers who had applied for the Presidential Employment Stimulus Initiative (PESI).

Programme 4: Rural Development

The department was able to spend most of the money budgeted for this programme, with R715.1 million out of R725.1 million having been spent.

Programme 5: Economic development, trade and marketing

Under this programme, spending amounted to R538.1 million out of total budget of R654.4 million, with underspending amounting to R117.3 million. This was due to lower spending on the compensation of employees due to vacancies; a delay in finalising the procurement of capital assets; and pending membership subscriptions to the United Nations’ Food and Agriculture Organisation.

Programme 6: Land administration

Under this programme, the department received an allocation of R1.02 billion and spent R976.94 million, leaving unspent funds of R47.97 million. The underspending was attributed to the delays in the filling of vacancies; and delays in implementation of national geomatic services, spatial planning and land use projects.

Ms Sadiki said the department had received an unqualified audit opinion from the AG. In its report, the AG found that consequence management was not taken against officials who were responsible for the irregular, fruitless and wasteful expenditure incurred, which, if combined, amounted to R248 380 million.

She admitted that this had been a difficult financial year for the department, mainly as a result of the Covid-19 pandemic, which restricted its operations.

Discussion

Ms Tlhape noted that the department had not reached the target of disbursing 700 000 hectares of land to prospective farmers. In a previous meeting, the Committee had mentioned that the state did not have this amount of land to disburse. She asked if the department’s inability to adequately analyse the matter had impacted on its ability to reach the target. She was disappointed that the allocation of land had not benefited the youth, people with disabilities and women, as was expected.

Regarding the settlement of invoices, she said it could not be seen as an achievement that the department was able to settle invoices within 100 days, as this had an effect on the suppliers.

She raised concern about issues involved in the transferral of biological equipment by the department to the Department of Environmental Affairs.  

She was disappointed about the department’s decision to return unspent funds to the National Treasury, particularly as there were several challenges on the ground. She said this action made it difficult for the Committee to advocate for increased funding for the department.

Ms Steyn said the report showed that there had been an improvement in the department. However, she too was concerned about the department's decision to return unspent funds to the National Treasury. She had several questions:

What plans were in place in preparation for a fourth Covid-19 wave, as the department had blamed its inability to meet targets on the impact of the pandemic? More time and effort needed to be put in place to ensure that farmers were given support, as people went hungry during the pandemic.

What contribution had the department made to support the District Development Model (DDM)?

Had the department established biosecurity coordinating structures?

How far was the department in providing support to farmers who were struggling with locust outbreaks?

She asked whether the Covid-19 funds paid via the ALHA were investigated and reported on and whether the funds were spent accordingly. She said the Committee needed more detailed reports on which farmers were supported and what type of support they received.

Lastly, she asked how the department was addressing the matter of court orders. Regulation by the courts was a sign that the department was not doing what it was supposed to do.

Ms N Mahlo (ANC) said she was concerned by the non-use of funds by the department. 

She said that the department should move speedily to ensure that state-owned land was allocated to the people. Referring to issues faced by labour tenants, she suggested that the department should do better in attending to their issues, as it had technocrats with high qualifications.

The presentation had mentioned that some of the policies of the Communal Property Associations (CPAs) were being looked at. Were people trained to understand the policies to ensure that they were functional?

She asked for the department to explain what multilateral engagements it had had, what the discussions entailed and with whom they were held.

She said that the government, through the department, should ensure that there was land reform.

Mr S Matiase (EFF) said the DG’s first task should be to clean up the department, particularly in light of the AG’s findings that there was a lack of consequence management, with only 39 out of 131 disciplinary cases having been dealt with so far.

He said there was no sense that the department had provided support to subsistence and smallholder farmers, as envisioned by Programme 3. However, if there had been, he asked that the department provide a detailed list of the farmers who had received support and the province in which they resided so that the Committee was able to verify the department’s claims. 

Referring to the Poultry Master Plan (PMP), he stated that the department had made a commitment to undertake transformation in the poultry industry by supporting 50 emerging producers. He asked how many producers had been provided with support and what form of support they had received, including the detailed amounts spent on small poultry farmers by the department.

Ms T Mbabama (DA) asked what face to face activities the department had conducted during the financial year, specifically for smallholder producers who had borne the brunt of the pandemic.

She said there was nothing commendable about the department achieving 59 percent of its targets. She questioned why the department had removed the 100 percent compliance target for its performance management framework. This was the foundation for issues such as consequence management. The removal of this target might explain the current performance in the department.

She encouraged the DG to get senior management officials to sign their performance targets. The Minister of Public Service and Administration had extended the deadline for the signing of performance contracts, yet only 89 percent of officials had done so. If senior managers did not take this seriously what would it mean for those below them?

She encouraged the department to create innovative methods that would ensure better functioning of the department during Covid-19 and in the future.

Mr Capa asked how the department planned to correct the issue of late payments.

He asked what the significance of the merged department was and whether it would enhance performance.

The target to disburse 700 000 hectares of land had not been achieved. He asked what the timeframe was for this commitment.

He noted that not much had been said on the performance of agricultural production in the country. How much of the land not used had been allocated to agricultural production?

Ms Breedt agreed that the department could not continue to use Covid-19 as an excuse for it not functioning properly. One of the issues had been the lack of availability of staff at department offices.

She commended the department where it had achieved or overachieved targets but she asked how it intended to make up for the targets it had not achieved, particularly the Electronic Deeds Registration System (EDRS). She asked if land was not released efficiently because the EDRS system was not working. 

She reminded Members that they had always emphasised the need to streamline projects in the Department of Agriculture, Forestry and Fisheries, the previous department. She did not believe this was occurring in the merged DALRRD. She asked if there had been progress in streamlining programmes or had the department been waiting for the Cabinet to approve the National Policy on Comprehensive Producer Development Support?

In April the previous year the department had reported that it was earning revenue of R5 million per month. For the current year it had reported revenue of R30 million per month. She asked what the reasons were for the improvement in revenue. She suggested that these new methods could be implemented in other areas of the department.

Referring to the foot-and-mouth disease (FMD) outbreak, she asked whether the department had an update on the status of FMD within the country, as it had appropriated R25 million to deal with it. Had the funds been spent?

Inkosi Cebekhulu said he was concerned that, with urban migration, farmland was not being utilised for subsistence farming. This was an issue the department should look into.

Ms Mbabama commended the department for resolving a case where a new owner had harassed a family who were labour tenants on the land. 

The Chairperson said consequence management had always been lacking in the department and its entities. Irregular, fruitless and wasteful expenditure had been increasing in the department. He asked how it planned to deal with the culprits, as their actions had an impact on service delivery. He asked that the Committee be provided, within the next two weeks, with a list of the cases still being investigated and the individuals who had been implicated.

He was concerned that the department’s report did not include the status of legislation that was meant to be tabled, such as the Communal Land Tenure Bill which it undertook to table before the end of the 2020-21 financial year. He asked how far they were in drafting the Bill. He asked the department to provide a status report on policies and legislation it intended to table.

He asked what plans the department had to ensure that it improved the scale of delivery of land in the coming years, as the report mentioned that only 22 364 hectares had been redistributed to 97 farmers during the financial year. This number had fallen short of the President’s target.

He asked how many communities and households had benefited from the release of lands to 39 farmers. How many farms were new acquisitions by the beneficiaries and how many involved confirmation of rights on farms they already occupied?

He applauded the progress of the department, together with the Special Master for Labour Tenants, in finalising applications of labour tenants. He asked for more details on the 196 finalised applications and the number of labour tenants, households and beneficiaries that were involved. Additionally, what type of settlement agreements had been reached and what form of development support had been provided to labour tenants who had acquired land?

On the 2 790 hectares that had been redistributed, he asked how many farmworker households had benefited from this initiative and how many farms had been disbursed. 

He asked for more details on all the programmes that had impacted women, youth and people with disabilities.

Referring to bursaries provided to 194 students, he asked what level of education they were receiving. What plans did the department have to ensure that learners realised their full potential? The Committee wanted to see educated young people rise within the field.

Regarding the budget, he asked what programmes had been put in place to support farmers in the Karoo who had not had rain in the past nine years and what mechanisms had been put in place to assist them in adapting to their new climatic conditions.

Responses

Mr Kgobokoe Mokutule, Deputy Director-General: Planning, Monitoring and Evaluation,  said that the department had taken note of the request to provide a report on consequence management within the next two weeks. The department had taken the matter seriously and both the Minister and the DG had emphasised the need for new measures for cases of misconduct and grievances. Officials at the department had recognised that the backlog of cases had increased since the merger. As a result, they had developed a turnaround strategy that had been tabled in the Executive Committee. Elements included outsourcing to state attorneys as the unit within the department tasked with disciplinary matters was not fully capacitated. Currently the department was at an advanced stage in finalising agreements with state attorneys on the allocation of cases. Much of this information would be tabled in the report compiled for the Committee.

He informed Members that the department would commence with the development of a fit for purpose structure that would handle the many cases that had emerged from the merger of the two departments.

On the question of vacancies, he said that the department had advertised several senior management positions. It had prioritised the filling of senior management positions and would then focus on salary level 1 to 12 positions. Some interviews had already been conducted.

Ms Sadiki said the department appreciated the recommendations made by the Committee, particularly on the irregular, fruitless and wasteful expenditure and the 30-day payments. It would consider them when it implemented its AAP.

Responding to the question on the monthly revenue, she said 50 percent of the revenue came from fees for statutory inspection of imports and exports. Revenue from import and export permits and surveyor-general fees contributed 25 percent. She added that the improved performance in the department enhanced the gross domestic product (GDP) contribution of agriculture to the economy. She admitted that the support of farmers needed to be accelerated.

Ms Carlize Knoesen, Chief Registrar of Deeds, DALRRD, agreed that the department needed to adjust to a new normal. This would be a focus of the deeds branch.

On the EDRS, she said that as the Deeds Office was a trading entity, they were affected by the hard lockdown and were thus unable to generate revenue, which put back some of its projects. She informed Members that the automation of the deeds registration processes did not affect the manual registration process. The office had decided to continue the registration manually, and most of the Deeds Offices had been able to catch up with their backlogs. Many of the offices were working without any overtime payments and were managing their resources better.

(The meeting was interrupted for 14 minutes due to loadshedding.)

Mr Mooketsa said the employment of the CEO at the ITB would lead to greater change at the entity. The department had seconded staff to assist at the entity and it would continue to assist in dealing with issues facing the ITB.

On the question of the merger, he said the department was currently discussing how best to implement a change management process to ensure that there was a successful transition.

He agreed that without clean governance the department would stagnate. The department must be ethical in its decision making.

He indicated that the department could improve its revenue, particularly from agricultural production.

On Covid-19, he stated that the department was still making adjustments which would result in improved functioning during the pandemic. He was pleased that this had made the department more adaptive in carrying out its work. 

Regarding District Development Models, he said that there were district champions and individuals in the department who represented them in order to ensure that the one-district, one-plan, one-budget model was a reality.

On the question of unspent funds, he said the department was not proud that it had not spent its budget allocation, but it had provided reasons for its decisions. The department believed that if there was no need to spend money, it should rather give it back to the Treasury in order to prevent irregular expenditure. He admitted that the department should formulate plans that could be properly budgeted for.

He said that the department would provide a list of all the items requested by the Committee, such as the disciplinary cases, the beneficiaries of the land reform programmes, agricultural programmes, the bursary allocations and emerging producers that it had supported. In addition, the department would provide a breakdown on the allocation for the foot and mouth disease plan.The Minister had appointed a biosecurity task team that was working on this matter and the department would share the findings with the Committee.

The Chairperson asked that the department provide written responses to several questions:

How far was the department in its review process of the Agriculture Black Economic Empowerment Fund (AgriBEE) and what was the current status of the fund? In its response, the department should also explain what it meant when it said that there was 100 percent approval of AgriBEE fund applications and what activities this entailed.

Could the department provide details on the R1 million worth of claims that had been instituted against the department, as reported by the AG?

Could the department provide specific details on the R203.8 million irregular expenditure reported by the AG, of which R99.5 million had been attributed to non-compliance in supply chain management procedures? What action had been taken against the officials responsible for this irregular expenditure?

Lastly, he asked whether the department had signed a contract with Onderstepoort Biological Products to supply it with vaccines. This contract was supposed to have been in June 2020, yet both parties were still in discussions in November 2020.

2020/21 Annual Report of the CRLR

Ms Nomfundo Ntloko-Gobodo, Chairperson of the Commission on Restitution of Land Rights (CRLR), and Ms Francis McMenamin, Director: Programme Management and Admin Support, briefed the Committee on the annual report of the CRLR for 2020/21. 

Key Findings

• 120 land parcels were transferred, measuring to 24 703.6 hectares;
• 324 land claims were settled against a target of 244;
• 385 land claims were finalised against a target of 295;
• There was 100 percent budget expenditure;
• There were 15 terminations of service during the year under review.

 

Financial performance

Ms Ntloko-Gobodo said that the department managed to transfer 120 land parcels, amounting to 24 703.6 hectares, during the financial year. The majority of the beneficiaries of these transferrals were based in the North West Province, with 96 parcels being disbursed, amounting to 5 913.9 hectares)

She was pleased to report that the Commission had overachieved on the land claims settled, with 324 claims being settled against a target of 244, as well as on the land claims finalised, with 385 land claims being finalised against a target of 295. There were 39 372 beneficiaries from the land claims settled during the financial year.

The Commission received a total budget of R2.7 billion for the year under review. Most of the budget expenditure went towards three areas: households (R1.3 billion); land and subsoil (R815.5 million) and the compensation of employees (R382.8 million). She said the officials were pleased that the Commission was able to spend 100 percent of the budget.

On the issue of vacancies, she said CRLR national office currently had a vacancy rate of 24 percent. There were 15 terminations of service in the year under review, of which 40 percent were resignations.

Discussion

Ms Steyn said that the 40 percent staff resignation in the Commission was very high. She asked why the staff resignations were this high. Also, had the department conducted exit interviews?

She asked if development grants were being paid out by the department, as it had been mentioned that they would be transferred from the Commission. If not, what was the flow of information between the Commission and the department to ensure that there were no farmers who received land but could not continue farming because they had not received grants.

She asked if the 50-50 farming project fell under the Commission or the department.

Referring to Project Kuyasa, she asked how far the department was in finalising all the outstanding issues. She also asked how many outstanding land claims there were and suggested that the department should create a live map which would show the number of outstanding claims it had. 

Ms Mahlo asked how far the process in merging the two departments in the various provinces was. 

She also asked for information regarding the state-owned land in the different provinces, including the sizes. She asked how many black people held leases of land across the provinces.

Mr Capa said he was concerned by the high resignations in the Commission, particularly as there was high unemployment in the country. He asked why the resignation rate was so high.

He asked for clarity on how the Commission could have spent 100 percent of its budget, yet it had not filled the 15 vacant posts. In addition, were the Communal Property Associations (CPAs) functioning properly?

Ms Mbabama mentioned that financial compensation seemed to be a preference among beneficiaries. She asked if the department provided the option of financial compensation if it was ready to disburse land to a beneficiary and if so, why? What factors informed beneficiaries’ preference for financial compensation other than the fact that the land was unavailable? 

Inkosi Cebekhulu asked why there had been instances where farms were leased to individuals, even though the department had sent notices that the same farms were subject to claims. The department seemed to have no clear plan to provide security of land claimed by farmers. He asked why the department had not ensured that the land was provided and intact.

The Chairperson said that in the past the Commission had identified research, evaluation and settlement negotiations as a bottleneck in fast tracking the settlement of land claims. He asked for an update on what had been done to loosen the constraints. What progress had the Commission made regarding the verification of land claims and an external audit to ensure that there were reliable statistics on land claims?  Had the electronic system to track claims been finalised, so that citizens were able to check the status of their land claims? To what extent was the system helping the Commision to communicate the status of claims to claimants? He explained that the Committee was overwhelmed with queries from the public who were frustrated because they were unaware of the status of their land claims, including those in the District Six area.

He reminded the Committee that in the past the Commission had reported that it would refer all cases it could not resolve to court. He asked what the progress was to date and what percentage of claims had been referred to court. 

Referring to the Commission’s autonomy, he asked whether it was on track to achieve this in the 2022/23 financial year, as it had projected.

He asked how many land claims related to state-owned land.

Responses

Ms Ntloko-Gobodo clarified that the 40 percent figure related to the 15 staff members who had left the Commission and it did not mean that all were resignations. She agreed that it was a high number and explained that the Commission did have a high turnover of staff due to the stress caused by the work. Several of the officials had moved to other departments, but she assured Members that the Commission was trying its best to retain staff. However, as it was still working under the authority of the department, it did not have the capacity to retain staff. She added that the Commission would consider conducting more exit interviews, so that it could provide more detailed responses to the Committee on the reasons.

She clarified that the 50-50 project in fact belonged to the department and not the Commission.

Responding to the question on the Kuyasa Project, she said that it was set up as a way to find out how many outstanding claims there were. To do this, the Commission sought the assistance of external auditors. Presently the Commission was at the second round of the audit process and had so far received the initial draft report. She explained that the Covid-19 pandemic had delayed the final draft, which it was supposed to have received in September. However, she was confident that the next time the Commission appeared before the Committee it would be able to share the document.

On the merger, she mentioned that the Commission was working towards becoming a Schedule 3A entity and as such, it could not comment on this matter.

On the question on the budget expenditure, she indicated that the budget allocation for the compensation of employees was not enough. The Commission managed to spend 100 percent of its budget because it was not operating at full capacity.

She said the question on the CPAs should be addressed to the department. The Commision was only responsible for setting up the entity, whereas the department was responsible for its administration, compliance and governance.

On financial compensation, she said this appeared to still be the preferred choice even when land was available. However, it was difficult to say conclusively because the Commission had to deal with claims for recent and prior years. She informed Members that due to the historical dispossession of people from one village to another, communities requested financial compensation to improve their villages instead of choosing to relocate to their previous village. There were cases where communities would choose land but at the last minute opt for financial compensation. Reasons included family needs, the organisational challenges associated with the CPAs, and also the challenges of maintaining farm land.

Responding to the question on notices, she stated that in terms of the Restitution of Land Rights Act (RLRA), if land was under claim and as soon as the land had been gazetted, the Commission would provide notice to the landowner that there was a claim over the land. However, this did not mean that the owner could not sell the land. If the owner planned to sell the land, they must give notice to the Commission so that it understood the impact of the sale. If it was a direct transfer which would allow for the Commission to acquire the land from the next owner, the Commission would allow it. If the land was to be sold for development which would have an impact on it, the Commission would object to the sale. However, if the community did not object to the development and instead wanted to partner with the developer, the Commission would allow them to. She added that the gazetting was merely a notification of claim under law.

Referring to the question on security, she said that in recent years the Commission had tried to secure properties to ensure they did not get plundered, but in some instances equipment was taken before land was transferred. To combat this, the Commission conducted a land audit prior to handing over the land so that the new owner was aware of what equipment was there.

On District Six, she said that the Commission had to attend to issues relating to compliance, so that the houses were transferred to the beneficiaries. To ensure that the homes were not invaded, external service providers had been placed to provide security. 

On the Kuyasa Project, she said that the Commission was currently sitting on 70 percent performance in the key priorities. The Commission was implementing a research strategy which had been approved by the Minister. It also had a backlog reduction strategy which was able to tabulate exactly where the claims were located. The verification of the outstanding claims by the external auditors was almost finalised and once it was signed off it would be provided to the Committee.

The Commission had not yet used the tracking system. It anticipated commencing with it in the next financial year and had set up its standard operating procedures. Once it had finalised the audit of the outstanding claims it would be able to capture the outstanding claims in the end-to-end system that it would pilot.

She explained that as part of the Kuyasa Project, the Commission had initiated settlement models that would assist the finalisation of outstanding claims and provide it with a database. So far it had identified six areas - mining, forestry, urban settlement, financial compensation, co-management agreements on the environment and tourism, and agriculture. This was done so that once it finalised old claims, it was able to settle them in consolidation with other stakeholders and in collaboration with the department.

She acknowledged that the Commission had a long way to go in communicating the status of its claims in a systematic way. Nonetheless, a communication strategy was in place, and active district based communication was occuring.

She assured the Committee that the Commission would provide a list of the claims that had been referred to the Land Claims Court.

The referral of claims could not not be settled administratively. It required the drafting of legal papers in collaboration with the provinces and legal staff in the Commission. Junior advocates had been contracted to assist with this matter. The drafting of legal papers was done if the communities in question were indigent and required assistance with the appointment of legal representation to contest their matters, and also to serve papers on the current landowners, if need be. However, some matters could be resolved outside of the courts.

Ms Cindy Benyane, Acting Deputy Lands Claim Commissioner, indicated that a business case had been signed off by the Minister for further consultation. The department had received a formal response from the Department of Public Service and Administration (DPSA). It outlined two issues that needed to be addressed. The first was that an interim structure be created by the department, which it was currently working on with the assistance of the DPSA. The second was a legislative amendment and, with the assistance of the DPSA, the department had compiled the draft Bill. She added that the department was currently awaiting feedback from the National Treasury on the business case.

Mr Mooketsa indicated that forensic investigations into the 50-50 and Delta projects had been concluded and the department had received the recommendations.

Referring to the Recapitalisation and Development Programme (RECAP), he mentioned that while the programme had been discontinued, an alternate programme that provided land development support was

operational.The Commission had assisted the department with matters faced in the provision of land development support and it would assist the department in formulating the fit for purpose structure. 

On the merger, he mentioned that the engagements with the Commission had been good. At one stage the department could not assist it with the additional finances it required. However, this year they were able to.

The department would provide the Committee with a list of the lease agreements it had with tenants.

OVG’s 2020/21 annual report

Mr Thapelo Motsoenneng, Chief Operations Officer in the Office of the Valuer-General (OVG), briefed the Committee on the OVG’s 2020-2021 annual report. In his opening remarks, he indicated that the OVG was disappointed that it had regressed from a clean audit in the 2019-20 financial year to an unqualified opinion with findings. 

Key findings

• The audit outcome regressed from a clean audit to an unqualified audit opinion with findings;
• The OVG achieved 56 percent of its performance targets;
• The turnaround time to issue a valuation certificate had reduced from 167 days in 2019-2020, to 53 days in 2020-2021;
• Total revenue decreased substantially from R142.1 million in 2019-2020 to R100 million in 2020-2021;
• The OVG did not incur irregular, fruitless or wasteful expenditure during the financial year.

 

Financial performance

The Committee heard that of the R100 million allocation that it received, the entity spent R45 million, representing only 45 percent expenditure. However, the R45 million spent in 2020-21 represented a nine percent increase in expenditure from the 2019-20 financial year.

While the OVG was disappointed to have seen its audit outcome regress, it was nonetheless pleased that it did not incur any irregular expenditure.

Annual performance

Mr Motsoenneng indicated that the OVG planned to achieve nine targets during the year under review. However, it managed to achieve only five targets, which represented a 56 percent completion of its targets. The OVG had two sub-programmes, which were valuations and operations:

Sub-programme 1:Valuations

In this sub-programme, the OVG had three key performance indicators (KPIs). The first was the 100 percent completion of valuations submitted by clients within specified times. The OVG managed to achieve 93 percent of this KPI.

The second KPI was 100 percent completion of backlog valuations. The entity managed to achieve 68 percent.

The third was to reduce the number of working days taken to issue a valuation certificate from 167 to 50.  The OVG managed to achieve 94 percent of the target, reducing the days to 53.

Sub-programme 2: Operations

In two of its KPIs - to implement fraud and corruption prevention mechanisms and to implement the Property Valuation Act - the OVG reached 100 percent of target. However, it was unable to implement its data management system. This was due to the Covid-19 regulations, as the entity was unable to ‘go live’ with the system.

Discussion

Ms Steyn asked what impact the tedious process of buying land had had on the CRLR and the department.

She also asked whether the OVG believed that it was moving in the right direction. Were there matters that the Committee needed to be aware of, as it did not seem that the entity was moving in the right direction?

Ms Mahlo said that the Committee should commend the work done by the OVG up to date and suggested that if it continued this way it would advance to a better place.

Ms Mbabama congratulated the OVG for not incurring irregular expenditure during the financial year.

Referring to the department’s stated achievement of being able to issue an evaluation certificate after 53 days, she asked if this referred to the target of having 50 days to complete instructions.

She asked whether the entity had service-level agreements with private sector valuers and if so, did the contracts include penalties if they did not adhere to the agreements?

She also asked what aspect of the Covid-19 regulations affected the implementation of the data management system.

Ms Breedt commended the OVG for improving its targets but she was concerned that the targets did not speak to service delivery.

She asked how the OVG was dealing with the departmental backlog in evaluations and when it anticipated clearing it. In addition, was 53 days the final target, as it amounted to two months, or was the OVG looking to bring that number down?

She also asked for the staff turnover in percentage terms, as well as the projected appointments and where in the structure they would be made.

Ms Mbabama asked if 30 days was provided for sellers of properties to make a comment on the value determined by the OVG. If so, she asked whether this timeframe was excessive, as it probably had an impact on the turnaround time. She suggested that with technology the turnaround time could be reduced.

Responses

Referring to the impact of the OVG on the CRLR and land rights tenure reform, Mr Motsoenneng, said that the OVG had been able to facilitate the achievement of the targets for land acquisition.

Regarding the settlement of claims, the OVG had exceeded its targets, indicating its positive influence. It could improve its impact by increasing its targets. 

On whether the OVG was moving in the right direction, he thought it was, particularly with regard to evaluation, where there had been an upward trajectory. He believed that it was important for the entity to stabilise its data management centre, its governance structures and mechanisms.

On the timeframe for evaluation certificates, he said that instead of reaching its target of 50 days, the OVG missed its target by 3 days.

On the effect of Covid-19 on the data management system, he said that when the hard lockdown was announced it took a while for staff to recalibrate to working online. The OVG had recently adopted the project management methodology of conducting sprints, which had to be done face-to-face. Now however, they had found a way to perform the sprints virtually. He added that once the country moved down in alert levels, the OVG had to synchronise when the staff could be at the offices. He listed the lack of access to hardware as also having an impact. Due to the closing of the borders, the OVG’s service provider could not deliver the hardware until the borders reopened. 

On the question about turnaround time, he said the OVG would have to consider the suggestion of improving the turnaround time for landowners and claimants to comment on the OVG’s evaluations. It would do so during its review of all its work. He explained that there were two processes: Landowners had 30 days to comment on the OVG’s evaluations, and then the OVG finalised the evaluation. The claimants or landowners then had to negotiate with both the Commission and the department about the sale of the property. The OVG had found that during those discussions the owners then raised issues that had been dealt with during representations on evaluations, so there was  a duplication of processes. The OVG would look to streamline this to ensure a reduction in the turnaround time.

On the question of service delivery, he said that the OVG consistently sought to contribute to land reform and its clients could speak to the impact they had on this initiative.

He told the Committee that the OVG was left with 67 backlog evaluations, which was an improvement from the 1 000 backlog evaluations it had previously. Presently the entity was driving new evaluations and was looking at removing the backlogs as a target in the next cycle.

He stated that the OVG had 49 staff members. So far it had lost two individuals. However, he did not have the exact figure for staff turnover.

The Chairperson commended the OVG for its outstanding work and asked it to continue to be a leading entity.

SA Veterinary Council 2020/21 Annual Report 

Dr Alfred Kgasi, President, SA Veterinary Council (SAVC), briefed the Committee on the SAVC’s Annual Report for the 2020-2021 financial year. He  said the SAVC’s income decreased slightly from R17 949 million in this previous financial year, to R17 703. However, the value of its assets increased from R32 665 million to R35 190 million in 2020-21.

He also informed the Committee that as of 31 March 2021, a total 6 455 veterinary and para-veterinary professions were registered with the SAVC.

Discussion

Ms Steyn asked what the role of the SAVC was in ensuring that animal diseases in the country were brought under control and whether the board would take a role in dealing with the disease outbreaks.

She suggested that the SAVC create an open channel to communicate its challenges, such as the alleged shortage of vaccines at OBP.

She asked whether any of the board members had resigned since the new board had been in place. If so, how many?

She also asked if there have been any complaints regarding financial issues within the SAVC.

Ms Mahlo suggested that the SAVC should train farmers and people in rural areas, so that they were equipped with veterinary skills.

Ms Breedt asked what role the SAVC played in assisting the department to achieve its export status, particularly after the outbreak of foot and mouth disease. 

The Chairperson indicated that he had several questions:

Were qualified veterinarians required by the council to perform community service in rural areas for two years after their studies? This policy would allow rural communities to have access to veterinary services.

Could the council elaborate on the reasons for the loss of 267 compulsory community service vets between 2020 and 2021 and the implications thereof for veterinary services in the country?.

How many veterinarians were registered under the SAVC and what were the numbers in each province? 

Lastly, he asked the council to provide a list of where its offices were based provincially, in both the district and local municipalities. He mentioned that the public did not have access to information on where its offices were located. He asked how the council communicated its information to the public.

Responses

Dr Kgasi said the availability of vaccines was a matter that concerned the council simply because vaccines were tools that veterinarians used when they sought to prevent disease. He assured the Committee that the council was doing everything it could to raise veterinarians' concerns, and it had on a regular basis engaged forums on these issues. The council had discussed expanding its suppliers of vaccines instead of depending solely on OBP, as OBP had special vaccines which came at a high cost and could not be produced in mass. He added that through this the Council could possibly have access to better vaccines.

He clarified that the Registrar had not resigned from her position.

Regarding the question on financial misconduct, he mentioned that the Council has been audited by an independent audit firm, which found no financial misconduct. 

Referring to the suggestion of equipping individuals in rural areas with veterinary skills, he said that the council was concerned about access to veterinary services in rural areas. It was considering changes to the legislation that would capacitate para-veterinarians to provide veterinary services in the rural areas. He indicated that unemployment among paravets was high, even though there was a need for them in the rural areas. Legislation had not enabled them to open their own practices, and the council believed that the proposed amendment would unlock several opportunities and allow veterinarians to provide services. He added that this formed part of the primary animal health care services the council would like to put on offer. Many of the vets were centred in the towns.

He stated that 3500 veterinarians were currently registered with the SAVC.

Legislation required that veterinarians do community service, which iwas critical in ensuring that veterinary services were provided in the rural areas.

Ms Steyn indicated that her question on the resignation of board members was not answered. Dr Kgasi said that one member resigned during the  financial year.

The Chairperson indicated that the remaining entities of the department would present their reports at a further Committee meeting.

He said the Committee would have to reflect on the suggestion to institute a forensic investigation into the ALHA funding.

He thanked all officials who were present at the meeting for their input.

The meeting was adjourned.