2017 APPROPRIATION BILL

BRIEFING TO THE STANDING COMMITTEE ON APPROPRIATIONS

2 June 2017

VISION:
Vibrant, equitable and sustainable rural communities.

MISSION:
To initiate, facilitate, coordinate, catalyse and implement rural
development and land reform programmes to achieve agrarian
transformation

1
 PRESENTATION OUTLINE
1. MTSF PROGRESS REPORT
2. CORPORATE GOVERNANCE PERFORMANCE (MPAT)
3. SUMMARY DEPARTMENTAL PERFORMANCE
4. MONITORING AND EVALUATION

2
 RURAL ECONOMY TRANSFORMATION:
AGRARIAN TRANSFORMATION SYSTEM
Tenure System Reform
1. State and Public Land
Ø lease hold
Roads, bridges,
energy, water • Social infrastructure, • Tenure system reform, 2. Private Land
services, • ICT infrastructure, • Strategic land reform Ø Free hold with limited
sanitation, extent
• Amenities, interventions/redistribution,
library, crèches,
• Facilities. • Restitution,
early childhood 3.Foreign land ownership
• Land based resources.
centres, Police Ø A combination of
stations, freehold with limited
clinics, houses, AGRARIAN TRANSFORMATION
extent and leasehold;
small rural and,
towns ‘A rapid and fundamental change in
revitalisation. the relations (systems and patterns
of ownership and control) of land, 4. Communal land
livestock, cropping and community.’ Ø Communal tenure:
communal tenure with
institutionalized use
Food Security:
• One Economic infrastructure: rights.
•Economic infrastructure:
Household • Processing plants
agri-parks, fencing,
One Hectare •Small industries 5. Institutions
• Inputs: seeds, fertilizer,
• One •Abattoirs, animal handling 5.1 Land Commission
pesticides, etc 5.2 Valuer General
Household facilities, feed-lots,
• Extension support , 5.3 Land Rights
Two Dairy mechanising stock water
• Fresh produce markets, Management Board
Cows dams, dip tanks, silos,
• Credit facilities. with District and Local
windmills, fencing,
harvesters, etc Committees
5.4 National Rural Youth
Phase III Service Corps
5.5 Rural Development
Agro-village industries; Agency with rural
Phase II credit facilities; markets
cooperatives
Enterprise financing facility
Strengthening of Rela ve Rights of People Rural
Phase I development 5.6 Agri-Parks
Working the Land (50/50 Policy Framework) development Management Board
measurables with District Chapters
Meeting Basic One Household One Hectare/ Two Dairy Cows – Programme/
Human Needs Agri-Parks

VIBRANT, EQUITABLE AND SUSTAINABLE RURAL COMMUNITIES

3
 Strategic goals
• Corporate governance and service excellence
Administration

• Facilitate integrated spatial planning and land use

management.
Geospatial and Cadastral Serv • Ensure integrated and comprehensive land
administration system.
• Provide a cadastre modernisation programme

• Provide support to rural communities in prioritised

Rural Development rural districts to enable them to improve their
livelihoods;
• Facilitation of infrastructure development;
• Facilitate the development of rural enterprises and
industries; Increase job opportunities and ensure
skills development

Restitution • Restoration of Land rights

• Promote equitable land redistribution and

agricultural development;
• Provide comprehensive farm development
Land Reform support;
• Functional systems and institutional
arrangements for tenure and land administration
4
 APPROPRIATION PER PROGRAMME 2017/18
Appropriation per Programme
R'000

2017/18 1. Administration
Administration 16.9%
1,721,620 2. NGMS
25.8% 6.6%
NGMS
672,117 3. Rural
Rural Development 31.9% Development
1,914,896 4. Restitution
Restitution 18.8%
3,247,384 5. Land Reform
Land Reform
2,628,223

TOTAL 10,184,240

5
 APPROPRIATION PER ECONOMIC CLASSIFICATION 2017/18
Appropriation per economic classification R'000
2017/18 % of total Allocation
Compensation of Employees 2,194,584 21.5%
Goods and Services 1,715,466 16.8%
Provincial And Local Governments 67,542 0.7%
Departmental Agencies & Accounts 1,493,134 14.7%
Foreign Gov&International Organ 1,653 0.0%
Public Corporations & Priv Ent 1 0.0%
Non Profit Institutions (NPI) 3,492 0.0%
Households (HH) 4,683,435 46.0%
Machinery and Equipment 24,004 0.2%
Software & Other Intangible assets 929 0.0%
TOTAL 10,184,240 100.0%

6
 KEY FACTS
Transfers to Other
R5.230 billion or 51.4 % of Entities R229
overall budget R1.496 million
Contractual commitments (salaries, billion 2.9%
transfers to entities and organisational 14.7%
needs)

R2.215 billion
Household projects commitments Total Budget
(carried over from 2016/17, Mou/SLA signed,
orders issued to service providers) R10.184 billion

Org. needs
R1.305 billion
R1.537 billion Household projects
Household projects to go through 15.1% R4.665 billion
normal SCM processes e.g. tender 45.7%

CoE
R2.195 billion
65.2% of household 21.5%
projects
to go through normal SCM process
are projected to be awarded by
October 2017

7
BUDGET VS DEPARTMENT POLICY PRIORITIES
R1.106 billion
RID & SOYD: Agri-hub; AVMP,
FPSU, RVCP, Socio-Economic Land
Infrastructure; Skills development; Acquisition
Revitalisation of Rural Towns; (ALHA) Land
One Integrated Community Dev. Centre; R1.420 billion Reform
NARYSEC R415.4
million
R432.9 million
REID: Agri-industries; Job opportunities;
Agric & Non-Agric Enterprises;
Livelihoods; Skills Total Budget
Development
R5.638 billion

R2.609 billion
Land Claims

R415.4 million Rural Development

One Household-One Hectare; R1.5 billion
One Household 2 Dairy Cows Land Claims
Recapitalisation commitment R2.609 billion

R1.420 billion
ALHA (Land Acquisition); One
Household One Hectare and
Recapitalisation

8
 STATE OF READINESS

• Demand/procurement plans were linked to project registers and budget to

ensure that procurement is at the right time, and at the right cost;

• Demand/procurement plans were reliably determined and appropriate sourcing

strategies were developed;

• A breakdown of monthly anticipated expenditure was developed;

• Delivery of services to be regularly monitored to ensure that scarce resources

are efficiently and effectively used by regularly tracking, controlling and
reporting on expenditure against performance;

• Continuation with enforcement of cost cutting measures

9
 % COMPLIANCE WITH 30 DAYS PERIOD

Financial Year % Paid

98 97

2013/14 91% 96
94
94
92
2014/15 92% 92 91

2015/16 97% 90

88
2016/17 94% 2013/14 2014/15 2015/16 2016/2017

10
 REASONS FOR NON-COMPLIANCE
 2013/14: Department paid 91% of total invoices submitted that reflects 9% non-compliance
with 30 days. Reasons for non compliance were invoice discrepancies, invalid tax clearance
certificates and changes in banking details by suppliers without informing the department on
time

 2014/15: Department paid 92% of total invoices submitted that reflects 8% non compliance
with 30 days. Reasons for non compliance were invoice discrepancies, tax clearance
certificates that expired and ex-post facto invoices (e.g. photo copy machine used after
contract expired and invoices must be presented and approved by National Bid Adjudication
Committee).

 2015/16: Department paid 97% of total invoices submitted that reflects 3% non compliance
with 30 days. Reasons for non compliance were invoice discrepancies, tax clearance
certificates that expired and ex-post facto invoices

 2016/17: Department paid 94% of total invoices submitted that reflects 6% non compliance
with 30 days. Reasons for non compliance were invoice discrepancies, tax clearance
certificates that expired and ex-post facto invoices

11
 ACTION TAKEN BY THE DEPARTMENT TO COMPLY WITH 30
DAYS REGULATION
 Discrepancies of invoices – The department included the invalid invoices within 30 days report; going forward
will exclude such invoices until the dispute is resolved. The department communicate the discrepancies with
service provider eg. Quotation submitted without VAT or Interest while invoice submitted with VAT and Interest for
payments. Department will request revised and valid invoice to be submitted.
 Invalid tax clearance certificates – When the department contracted the service provider tax clearance
certificate was still valid. With the implementation of the CSD, the department is able to access Tax Clearance
information, if Tax Clearance is not valid department communicates with service provider to address issues with
SARS. Until queries/ issues with SARS are resolved the department will not include those invoices within 30
days report.
 Changes in banking details by suppliers - When the department contracted the service provider banking
details were still valid. With the implementation of CSD, the suppliers update the banking details and must
submit copy to the department. Until banking details issues are addressed the department will not included those
invoices within 30 days report.
 Ex-post facto invoices – Contract management sends reminders to service provider and departmental officials
three months before expiry date. If service providers don’t collect machine and officials continue to use the
machine; regarded as irregular expenditure - referred to Finance Control Committee (FCC) .
 The department established Finance Control Committee to ensure effective and efficient execution of the
Irregular, Wasteful and Fruitless Expenditure and Financial misconduct policies.
 Consequences management is applied after investigation by FCC.

12
 AGRICULTURAL LAND HOLDING ACCOUNT (ALHA)
2016/17 ESTIMATES OF NATIONAL EXPENDITURE (ENE)
PRESENTATION

13
13
 ALLOCATION PER STANDARD ITEM
Strategic Land Acquisition
2017/18
R 000
Land Acquisition 422 871
Strengthening of Relative Rights (50/50) 525 000
Planning 19 344
Total 967 215

Recapitalisation and Development

Recap: (Commitments) 221 682
One Household One Hectare (1H1H) 106 200
Total Recap 327 882

Total ALHA Projects 1 295 097

Other Expenses
Curator fees 5 861
Project Management Unit fees 71 149
Rates and Taxes 47 494
Total other expenses 124 504

Total Transfer Received 1 419 601

14
 MTSF PROGRESS REPORT
(2014/15 to 2016/17 PERFORMANCE TRENDS)

15
OVERALL YEAR-ON-YEAR DEPARTMENTAL PERFORMANCE
97%
94%

71% 71%

59%
55%

23% 22% 21%

9% 6% 0%

2014-15 2015-16 2016-17

Achieved Partially-achieved Not-achieved APR

The Department had the highest-ever Fourth Quarter and Annual performances of 94% and 97% respectively,
over the past three Financial Years.

16
 PRODUCTIVE LAND OWNED BY PREVIOUSLY DISADVANTAGED INDIVIDUALS
 MTSF aims to increase percentage of ownership of productive land by previously
disadvantaged individuals by acquiring 2 million hectares of land by 2019:
 For the period 2014/15 to 2016/17, DRDLR targeted 843,074ha, and acquired 798,788ha.
 This translates to 40% progress towards the 2 million hectare target.
 For the next MTEF, a total of 281,165ha of land is planned for.

Audited / Actual Performance Estimated Performance Medium-term Targets

Performance Indicator
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Number of hectares acquired 354 802 242 556 201 430 96 165 90 000 95 000

843,074
798,788

390,000 354,802 370,000

242,556
201,430
83,074

2014-15 2015-16 2016-17 TOTALS

Target Actual

17
 PRODUCTIVE LAND OWNED BY PREVIOUSLY DISADVANTAGED INDIVIDUALS
 MTSF aims to allocate 1 million ha of land acquired to smallholder
producers by 2019:
 For the period, 2014/15 to 2016/17, DRDLR targeted 226,492ha, and 384,132ha was allocated.
 This translates to 38% towards the 1 million ha MTSF target.
 Over the next MTEF, a total of 140,500ha is planned for.

Audited / Actual Performance Estimated Performance Medium-term Targets

Performance Indicator
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Number of hectares allocated to farm dwellers and
New indicator 247 385 136 938 48 000 45 000 47 500
labour tenants

384,323

247385 226,492
185000
136938
0 0 41492

2014-15 2015-16 2016-17 TOTALS

Target Actual

18
 PRODUCTIVE LAND OWNED BY PREVIOUSLY DISADVANTAGED INDIVIDUALS
 MTSF aims to allocate 200,000 ha of land acquired to farm-dwellers and
labour tenants by 2019:
 For the period, 2014/15 to 2016/17, DRDLR targeted 45,326ha, and 22,185ha were allocated.
 This translates to 11% towards the 200,000 ha MTSF target.
 Over the next MTEF, a total of 28,100ha is planned for.

Audited / Actual Performance Estimated Performance Medium-term Targets

Performance Indicator
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Number of hectares allocated to farm dwellers
New indicator 3 910 18 275 9 600 9 000 9 500
and/or labor tenants

45,326
37000

22,185
18275
0 0 3910 8326

2014-15 2015-16 2016-17 TOTALS

Target Actual

19
 REDUCTION OF LAND TRANSFERRED TO PREVIOUSLY DISADVANTAGED
INDIVIDUALS WHICH IS UNDERUTILISED
 MTSF aims to provide support to1 741 farms under RECAP by 2019:
 For the period 2014/15 to 2016/17 DRDLR targeted 985 farms, and 994 farms were
supported.
 This translates to 57% towards the 1 741 farms MTSF target.
 This performance indicator was moved to DAFF as of 2017/18.

985 994

414 363
303 331 351
217

2014-15 2015-16 2016-17 TOTALS

Target Actual

20
 DEVELOPMENT OF SUSTAINABLE RURAL ENTERPRISES
 NDP states that, “small- and medium-sized enterprises will play an
important role in employment creation’’.
 For the period, 2014/15 to 2016/17, DRDLR targeted 592 enterprises, and the target was
achieved with 886 supported.
 Over the next MTEF, DRDLR is targeting 531 enterprises.
Audited / Actual Performance Estimated Performance Medium-term Targets
Performance Indicator
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Number of new agricultural enterprises supported in
422 220 193 141 150 159
the 44 districts aligned to Agri-Parks
Number of new non-agricultural enterprises
New indicator New indicator 51 55 60 66
supported in the 44 districts

886

592
422

210 217 220 165 244

2014-15 2015-16 2016-17 TOTALS

Target Actual

21
PRODUCTIVE LAND OWNED BY PREVIOUSLY DISADVANTAGED INDIVIDUALS
 Claims Settled: Commission targeted 1 457 total settlements for the period
2014/15 to 2016/17, and they achieved 1 857.
 There are 3 331 projected claims to be settled over the next MTEF.
Audited / Actual Performance Estimated Performance Medium-term Targets
Performance Indicator
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Number of land claims settled 428 617 812 1 001 1 151 1 179

1,857

1,457

812
617 615
379 428 463

2014-15 2015-16 2016-17 TOTALS

Target Actual

22
 PRODUCTIVE LAND OWNED BY PREVIOUSLY DISADVANTAGED INDIVIDUALS
 Claims Finalised: Commission planned for 1 066 claims over the period 2014/15
to 2016/17, and a total of 1 604 claims were finalised.
 There are 2 421 projected claims to be finalised over the next MTEF.
Audited / Actual Performance Estimated Performance Medium-term Targets
Performance Indicator
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Number of land claims finalised 372 560 672 724 832 865

1,604

1,066

672
560
454
239 372 373

2014-15 2015-16 2016-17 TOTALS

Target Actual

23
 SKILLED & CAPABLE WORKFORCE TO SUPPORT AN INCLUSIVE GROWTH PATH
 The MTSF aims to have 90 000 skilled people by 2019:
 DRDLR targeted 28 900 (including 10 120 NARYSEC) skills opportunities, and 32 909 was
achieved.
 NARYSEC target amounts to 8 605.
 Overall, this translates to a contribution of 37% towards the 90 000 MTSF target.
 Over the next MTEF, a total of 17 212 is planned for.
Audited / Actual Performance Estimated Performance Medium-term Targets
Performance Indicator
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Number of skills development opportunities
12 331 12 576 8 002 6 612 5 200 5 400
provided in rural development initiatives

32,909
28,900

12,331 12,576 12,700

9,200 8,002
7,000

2014-15 2015-16 2016-17 TOTALS

Target Actual

24
 REDUCE UNEMPLOYMENT RATE IN THE RURAL AREAS
 The MTSF aims to have 924,140 people employed through the rural
development initiatives, including enterprises and industries by 2019:
 DRDLR targeted 21,678 jobs over the period under review, and achieved 23,739.
 This amounts to a contribution of 2.6% towards the MTSF target.
 Over the next MTEF, a total of 35, 687 is planned for.
Audited / Actual Performance Estimated Performance Medium-term Targets
Performance Indicator
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
Number of job opportunities created in rural
4 916 6 005 5 880 5 448 6 700 6 700
development initiatives
Number of jobs created in in the Land reform
1 925 2 271 2 742 5 000 5 775 6 064
programme

23,739
21,678

8,994 8,276 7,775 8,622

6,841
4,909

2014-15 2015-16 2016-17 TOTALS

Target Actual

25
CORPORATE GOVERNANCE
PERFORMANCE (MPAT)

26
 MPAT SUMMARY PERFORMANCE
MPAT 1.2 MPAT 1.3 MPAT 1.4 MPAT 1.5 MPAT 1.6
LEGEND 2012 2013 2014 2015 2016
Level 4-Fully Compliant & Smart 1 8 14 16 19
Level 3-Fully Compliant 10 10 8 8 5
Level 2+ - Compliant with basics - - - 5 4
Level 2-Partially Compliant 10 11 8 4 6
Level 1- Non-Compliant 7 3 4 4 1
TOTAL SCORES 28 32 34 37 35
PERFORMANCE RATING (%) 39% 56% 65% 78% 80%
 Compared to the past 4 MPAT cycles, the Department scored the highest-score
ever of 80% during the 2016 MPAT cycle!
 Now that the Department has achieved this target, the key question is, to what
extent can this be translated into the overall Departmental Performance?

27
 KEY PERFORMANCE AREA 1:
STRATEGIC MANAGEMENT
MPAT 1.4 MPAT 1.5 Moderated
LEGEND 2014 2015 Score 2016
Level 4-Fully Compliant & Smart 5 3 5
Level 3-Fully Compliant 0 2 0
Level 2+ - Compliant with basics - 0 0
Level 2-Partially Compliant 0 0 0
Level 1- Non-Compliant 0 0 0

28
28
 KEY PERFORMANCE AREA 2:
GOVERNANCE AND ACCOUNTABILITY
MPAT 1.4 MPAT 1.5 2015 Moderated
LEGEND 2014
score 2016
Level 4-Fully Compliant & Smart 5 5 7
Level 3-Fully Compliant 2 1 1
Level 2+ - Compliant with basics - 0 1
Level 2-Partially Compliant 2 1 1
Level 1- Non-Compliant 1 3 0

29
29
 KEY PERFORMANCE AREA 3:
HUMAN RESOURCE MANAGEMENT
MPAT 1.4 MPAT 1.5 Moderated
LEGEND 2014 2015 score 2016
Level 4-Fully Compliant & Smart 0 0 1
Level 3-Fully Compliant 4 3 3
Level 2+ - Compliant with basics - 4 4
Level 2-Partially Compliant 5 3 3
Level 1- Non-Compliant 2 1 0

30
30
 KEY PERFORMANCE AREA 4:
FINANCIAL MANAGEMENT
MPAT 1.4 MPAT 1.5 Moderated
LEGEND 2014 2015 score 2016
Level 4-Fully Compliant & Smart 6 6 6
Level 3-Fully Compliant 1 2 1
Level 2+ - Compliant with basics - 1 0
Level 2-Partially Compliant 1 0 2
Level 1- Non-Compliant 1 0 0

31
31
GENERAL INFORMATION

32
 PRE-AUDITED 2016-2017 PROGRAMME PERFORMANCE
The Department achieved 79% of its Annual targets (APR) for the 2016-2017
Financial Year.
NATIONAL
APR Targets APR Partially- APR Not- APR
Programmes APR Targets Achieved
Planned Achieved Achieved Performance

Administration 2 1 1 0 50%

Geospatial and Cadastral Services 5 4 1 0 80%

Rural Development 7 6 1 0 86%

Restitution 3 3 0 0 100%

Land Redistribution and Development 8 6 2 0 75%

Land Tenure and Administration 4 3 1 0 75%

Overall Total 29 23 6 0 79%

33
 DRDLR PERSONNEL COMPOSITION : FY2016/2017

National Geomatics

Rural Development
Administration
Programme 1:

Programme 2:

Programme 3:

Programme 4:

Programme 5:
Land Reform
Management

Programme :
Restitution
Services

Deeds
DRDLR Total

Head count (31/03/2017) 5 529 1 467 1 057 482 735 617 1 171
Number of funded posts 5 370 1 450 782 477 737 624 1 300
Number of posts additional
372 45 286 18 6 8 9
to the establishment
Number of posts filled 5 157 1 422 771 464 729 609 1 162
Number of posts vacant 213 28 11 13 8 15 138
% Vacancy rate 3.97% 1.93% 1.41% 2.73% 1.09% 2.40% 10.62%

34
34
 INTERNAL AUDIT AND AUDIT COMMITTEE
Internal Audit
The Internal Audit function is a fully-fledged Chief Directorate, which reports operationally to the Audit
Committee and administratively to the Director-General. It is constituted of three Directorates
(Performance Audit and Financial Audit; Operational Audit and Compliance Audit; and Information
Technology Audit) and one Sub-Directorate (Project Management and Quality Assurance). During the
past year, Internal Audit issued 20 Audit Committee Reports and 51 Detailed Internal Audit Reports.
Audit Committee
The Audit Committee of the DRDLR, the Deeds Registration Trading Account and the Agricultural Land
Holding Account consists of three members and had 7 meetings during the past year.
Independent Assessments of Internal Audit’s and the Audit Committee’s effectiveness:
 Institute of Internal Auditors Quality Assessment Review:
Internal Audit’s conformance to the International Standards for the Professional Practice of Internal
Auditing was assessed by the Institute of Internal Auditors as ‘Generally Conforms’, which is the optimal
conformance level.
 MPAT:
Both Internal Audit and the Audit Committee received MPAT scores of 4.0 for the last four years. This is
the highest MPAT score and indicates that Internal Audit and the Audit Committee are fully compliant
with legal/regulatory requirements and are doing things smartly.

35
 INTERNAL AUDIT AND AUDIT COMMITTEE cont
• AGSA:
The following table outlines the AGSA assessments on the Chief Directorate: Internal Audit and Audit
Committee over the last three years. The symbols reflected below indicate that the required preventative or
detective controls are in place.

Financial statements Performance reporting Compliance with legislation

2015-16 2014-15 2013-14 2015-16 2014-15 2013-14 2015-16 2014-15 2013-14

• Ensure that there is an

adequately resourced and
functioning internal audit unit that
identifies internal control
deficiencies and recommends
corrective action effectively

• Ensure that the audit committee

promotes accountability and
service delivery through
evaluating and monitoring
responses to risks and
overseeing the effectiveness of
the internal control environment,
including financial and
performance reporting and
compliance with legislation

36
 SUMMARY EVALUATION STUDIES CONDUCTED
1. Socio economic impact on CRDP – 2012 (Internal),
2. Implementation evaluation of the CRDP – 12/13 (DPME/DRDLR),
3. Implementation evaluation of the Recapitalization and
Development programme -12/13 (DPME/DRDLR)
4. Implementation evaluation of the Restitution Programme -13/14
(DPME/DRDLR),
5. Implementation and design evaluation of NARYSEC- 13/14 (Internal),
6. Implementation evaluation of PLAS – 14/15 (Internal)
7. Design and implementation evaluation of AVMP-15/16( internal),
8. Diagnostic evaluation of strengthening relative rights of people
working the land (50/50) policy framework- 16/17(internal).

37
THANK YOU

38