2017 APPROPRIATION BILL BRIEFING TO THE STANDING COMMITTEE ON APPROPRIATIONS
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1 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
2 PRESENTATION OUTLINE 1. MTSF PROGRESS REPORT 2. CORPORATE GOVERNANCE PERFORMANCE (MPAT) 3. SUMMARY DEPARTMENTAL PERFORMANCE 4. MONITORING AND EVALUATION 2
3 RURAL ECONOMY TRANSFORMATION: AGRARIAN TRANSFORMATION SYSTEM Tenure System Reform Roads, bridges, energy, water services, sanitation, library, crèches, early childhood centres, Police stations, clinics, houses, small rural towns revitalisation. Food Security: One Household One Hectare One Household Two Dairy Cows Phase I Meeting Basic Human Needs Phase II Enterprise development Social infrastructure, ICT infrastructure, Amenities, Facilities. Tenure system reform, Strategic land reform interventions/redistribution, Restitution, Land based resources. AGRARIAN TRANSFORMATION A rapid and fundamental change in the relations (systems and patterns of ownership and control) of land, livestock, cropping and community. Economic infrastructure: Economic infrastructure: Processing plants agri-parks, fencing, Small industries Inputs: seeds, fertilizer, Abattoirs, animal handling pesticides, etc facilities, feed-lots, Extension support, mechanising stock water Fresh produce markets, dams, dip tanks, silos, Credit facilities. windmills, fencing, harvesters, etc Phase III Agro-village industries; credit facilities; markets Strengthening of Rela ve Rights of People Working the Land (50/50 Policy Framework) One Household One Hectare/ Two Dairy Cows Programme/ Agri-Parks Rural development measurables VIBRANT, EQUITABLE AND SUSTAINABLE RURAL COMMUNITIES 1. State and Public Land lease hold 2. Private Land Free hold with limited extent 3.Foreign land ownership A combination of freehold with limited extent and leasehold; and, 4. Communal land Communal tenure: communal tenure with institutionalized use rights. 5. Institutions 5.1 Land Commission 5.2 Valuer General 5.3 Land Rights Management Board with District and Local Committees 5.4 National Rural Youth Service Corps 5.5 Rural Development Agency with rural cooperatives financing facility 5.6 Agri-Parks Management Board with District Chapters 3
4 Strategic goals Administration Corporate governance and service excellence Geospatial and Cadastral Serv Rural Development Restitution Land Reform Facilitate integrated spatial planning and land use management. Ensure integrated and comprehensive land administration system. Provide a cadastre modernisation programme Provide support to rural communities in prioritised 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 Restoration of Land rights Promote equitable land redistribution and agricultural development; Provide comprehensive farm development support; Functional systems and institutional arrangements for tenure and land administration 4
5 APPROPRIATION PER PROGRAMME 2017/18 Appropriation per Programme R'000 Administration NGMS Rural Development 2017/18 1,721, ,117 1,914,896 25,8% 31,9% 16,9% 6,6% 1. Administration 2. NGMS 3. Rural Development 4. Restitution Restitution Land Reform 3,247,384 2,628,223 18,8% 5. Land Reform TOTAL 10,184,240 5
6 APPROPRIATION PER ECONOMIC CLASSIFICATION 2017/18 Appropriation per economic classification R' /18 % of total Allocation Compensation of Employees 2,194, % Goods and Services 1,715, % Provincial And Local Governments 67, % Departmental Agencies & Accounts 1,493, % Foreign Gov&International Organ 1, % Public Corporations & Priv Ent 1 0.0% Non Profit Institutions (NPI) 3, % Households (HH) 4,683, % Machinery and Equipment 24, % Software & Other Intangible assets % TOTAL 10,184, % 6
7 KEY FACTS R5.230 billion or 51.4 % of overall budget Contractual commitments (salaries, transfers to entities and organisational needs) Transfers to Entities R1.496 billion 14.7% Other R229 million 2.9% R2.215 billion Household projects commitments (carried over from 2016/17, Mou/SLA signed, orders issued to service providers) Total Budget R billion R1.305 billion Household projects to go through normal SCM processes e.g. tender Org. needs R1.537 billion 15.1% Household projects R4.665 billion 45.7% 65.2% of household projects to go through normal SCM process are projected to be awarded by October 2017 CoE R2.195 billion 21.5% 7
8 BUDGET VS DEPARTMENT POLICY PRIORITIES R1.106 billion RID & SOYD: Agri-hub; AVMP, FPSU, RVCP, Socio-Economic Infrastructure; Skills development; Revitalisation of Rural Towns; One Integrated Community Dev. Centre; NARYSEC R432.9 million Land Acquisition (ALHA) R1.420 billion Land Reform R415.4 million REID: Agri-industries; Job opportunities; Agric & Non-Agric Enterprises; Livelihoods; Skills Development R2.609 billion Land Claims Total Budget R5.638 billion R415.4 million One Household-One Hectare; One Household 2 Dairy Cows Recapitalisation commitment R1.420 billion ALHA (Land Acquisition); One Household One Hectare and Recapitalisation Rural Development R1.5 billion Land Claims R2.609 billion 8
9 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
10 % COMPLIANCE WITH 30 DAYS PERIOD Financial Year % Paid 2013/14 91% 2014/15 92% 2015/16 97% 2016/17 94% / / / /
11 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
12 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
13 AGRICULTURAL LAND HOLDING ACCOUNT (ALHA) 2016/17 ESTIMATES OF NATIONAL EXPENDITURE (ENE) PRESENTATION 13
14 ALLOCATION PER STANDARD ITEM Strategic Land Acquisition 2017/18 R 000 Land Acquisition Strengthening of Relative Rights (50/50) Planning Total Recapitalisation and Development Recap: (Commitments) One Household One Hectare (1H1H) Total Recap Total ALHA Projects Other Expenses Curator fees Project Management Unit fees Rates and Taxes Total other expenses Total Transfer Received
15 MTSF PROGRESS REPORT (2014/15 to 2016/17 PERFORMANCE TRENDS) 15
16 OVERALL YEAR-ON-YEAR DEPARTMENTAL PERFORMANCE 94% 97% 71% 71% 55% 59% 23% 22% 21% 9% 6% 0% 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
17 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/ / / / / /20 Number of hectares acquired TOTALS Target Actual 17
18 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. Performance Indicator Number of hectares allocated to farm dwellers and labour tenants Audited / Actual Performance Estimated Performance Medium-term Targets 2014/ / / / / /20 New indicator TOTALS Target Actual 18
19 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. Performance Indicator Number of hectares allocated to farm dwellers and/or labor tenants Audited / Actual Performance Estimated Performance Medium-term Targets 2014/ / / / / /20 New indicator TOTALS Target Actual 19
20 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 farms MTSF target. This performance indicator was moved to DAFF as of 2017/ TOTALS Target Actual 20
21 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. Performance Indicator Number of new agricultural enterprises supported in the 44 districts aligned to Agri-Parks Number of new non-agricultural enterprises supported in the 44 districts Audited / Actual Performance Estimated Performance Medium-term Targets 2014/ / / / / / New indicator New indicator TOTALS Target Actual 21
22 PRODUCTIVE LAND OWNED BY PREVIOUSLY DISADVANTAGED INDIVIDUALS Claims Settled: Commission targeted total settlements for the period 2014/15 to 2016/17, and they achieved There are projected claims to be settled over the next MTEF. Performance Indicator Audited / Actual Performance Estimated Performance Medium-term Targets 2014/ / / / / /20 Number of land claims settled TOTALS Target Actual 22
23 PRODUCTIVE LAND OWNED BY PREVIOUSLY DISADVANTAGED INDIVIDUALS Claims Finalised: Commission planned for claims over the period 2014/15 to 2016/17, and a total of claims were finalised. There are projected claims to be finalised over the next MTEF. Performance Indicator Audited / Actual Performance Estimated Performance Medium-term Targets 2014/ / / / / /20 Number of land claims finalised TOTALS Target Actual 23
24 SKILLED & CAPABLE WORKFORCE TO SUPPORT AN INCLUSIVE GROWTH PATH The MTSF aims to have skilled people by 2019: DRDLR targeted (including NARYSEC) skills opportunities, and was achieved. NARYSEC target amounts to Overall, this translates to a contribution of 37% towards the MTSF target. Over the next MTEF, a total of is planned for. Performance Indicator Number of skills development opportunities provided in rural development initiatives Audited / Actual Performance Estimated Performance Medium-term Targets 2014/ / / / / / TOTALS Target Actual 24
25 REDUCE UNEMPLOYMENT RATE IN THE RURAL AREAS The MTSF aims to have 924,140 people employed through the development initiatives, including enterprises and industries by 2019: rural 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. Performance Indicator Number of job opportunities created in rural development initiatives Number of jobs created in in the Land reform programme Audited / Actual Performance Estimated Performance Medium-term Targets 2014/ / / / / / TOTALS Target Actual 25
26 CORPORATE GOVERNANCE PERFORMANCE (MPAT) 26
27 LEGEND MPAT SUMMARY PERFORMANCE MPAT MPAT MPAT MPAT MPAT Level 4-Fully Compliant & Smart Level 3-Fully Compliant Level 2+ - Compliant with basics Level 2-Partially Compliant Level 1- Non-Compliant TOTAL SCORES 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
28 KEY PERFORMANCE AREA 1: STRATEGIC MANAGEMENT LEGEND MPAT MPAT Moderated Score 2016 Level 4-Fully Compliant & Smart Level 3-Fully Compliant Level 2+ - Compliant with basics Level 2-Partially Compliant Level 1- Non-Compliant
29 KEY PERFORMANCE AREA 2: GOVERNANCE AND ACCOUNTABILITY LEGEND MPAT MPAT Moderated score 2016 Level 4-Fully Compliant & Smart Level 3-Fully Compliant Level 2+ - Compliant with basics Level 2-Partially Compliant Level 1- Non-Compliant
30 KEY PERFORMANCE AREA 3: HUMAN RESOURCE MANAGEMENT LEGEND MPAT MPAT Moderated score 2016 Level 4-Fully Compliant & Smart Level 3-Fully Compliant Level 2+ - Compliant with basics Level 2-Partially Compliant Level 1- Non-Compliant
31 KEY PERFORMANCE AREA 4: FINANCIAL MANAGEMENT LEGEND MPAT MPAT Moderated score 2016 Level 4-Fully Compliant & Smart Level 3-Fully Compliant Level 2+ - Compliant with basics Level 2-Partially Compliant Level 1- Non-Compliant
32 GENERAL INFORMATION 32
33 PRE-AUDITED PROGRAMME PERFORMANCE The Department achieved 79% of its Annual targets (APR) for the Financial Year. NATIONAL Programmes APR Targets Planned APR Targets Achieved APR Partially- Achieved APR Not- Achieved APR Performance Administration % Geospatial and Cadastral Services % Rural Development % Restitution % Land Redistribution and Development % Land Tenure and Administration % Overall Total % 33
34 Programme 1: Administration Programme 2: National Geomatics Management Services Programme 3: Rural Development Programme 4: Restitution Programme 5: Land Reform Programme : Deeds DRDLR PERSONNEL COMPOSITION : FY2016/2017 DRDLR Total Head count (31/03/2017) Number of funded posts Number of posts additional to the establishment Number of posts filled Number of posts vacant % Vacancy rate 3.97% 1.93% 1.41% 2.73% 1.09% 2.40% 10.62% 34
35 Internal Audit INTERNAL AUDIT AND AUDIT COMMITTEE 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
36 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 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
37 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
38 THANK YOU 38
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