4 th Quarter Expenditure Report for the year ended 31 March 2010 Presentation to the

1. 4thQuarter Expenditure Report for the year ended 31 March 2010 Presentation to the Standing Committee on Appropriations Date: 11 August 2010 Time: 10h00 Venue: S26 NCOP Building Parliament, Cape Town

2. Spending per Economic Classification The Department’s original budget was R6.099 billion and was adjusted by R292 million through the Adjustment Estimate in November 2009 to R6.391 billion.

3. Spending per Programme • Under-spending for the year is 8.4% (R534m) of the allocated budget • Programmes highlighted in red jointly account for 7.6% of the 8.4% under-spending

4. Reasons for under-spending • The main reason for the under-spending related to the change of the mandate of the Department (formerly Department of Land Affairs) to include Rural Development – hence the Department of Rural Development and Land Reform • Rural Development programmes and activities had to be conceptualised by the Department and a new structure that is responsive to the new mandate had to be developed and approved by the DPSA • New funds had to be requested from National Treasury for the new programmes and activities in line with the new mandate • The Department also had to reprioritise its budget to accommodate the changed mandate. This resulted in a change in the strategic plan of the Department

5. Reasons for under-spending (cont.) • R292m mainly for Rural Development was only allocated later in the financial year in November 2009. • All these developments and changes resulted in little time left for the Department to roll out its new activities and to spend the allocated funds by end of its first financial year, 31 March 2010 • Major under-spending Programmes which jointly accounted for 7.6% of the 8.4% under-spending are: • Administration; Land Reform; and Rural Development • For the above reasons, the Department has applied for the unspent funds to be rolled over to the new financial year .

6. Breakdown of Under-spending The following is the breakdown of the 8.4% (R534m) under-spending, mainly made up of Administration; Land Reform; and Rural Development Programmes

7. 1:Administration • REASONS FOR UNDER-SPENDING • Transfers & Subsidies: The under-spending on transfers and subsidies is attributable to less than anticipated payout of leave gratuity to employees. • Current Payments: To reduce recruitment costs, the Department stopped using recruitment agencies and decided to build internal capacity for recruitment purposes • Vacant posts not filled and this also had an impact on personnel related expenditure, such as travelling, stationery, communication, etc.

8. 5:Land Reform • REASONS FOR UNDER-SPENDING • Transfers & Subsidies: an amount of R500m was availed to the Restitution Programme in November 2009 to help it reduce its backlog. However, only R100m could be shifted to Restitution and the R400m remained with Land Reform. Thus there was little time left to spend the entire R400m by Land Reform. • Current Payments: Vacant posts not filled and this had an impact on personnel related costs such as travelling, communication, stationery, etc

9. 8:Rural Development REASONS FOR UNDER-SPENDING Rural Development is a new Programme that was created with the change of the mandate of the Department of Land Affairs. Allocation for this new Programme was only received in November 2009. There was little time to set up the structure of the programme and to fill up the newly created posts within the programme and to conceptualise the Comprehensive Rural Development Programme.

10. REASON FOR UNDER-SPENDING: Other Programmes • Surveys and Mapping: Vacant posts not filled and failure to attract and retain appropriate incumbents due to the unattractiveness of salary packages and delays in implementing the OSD and the job evaluation recommendations. • Cadastral Surveys:Vacant posts not filled and the delays in implementing the OSD and the job evaluation recommendations. This also had an effect on personnel related items such as travelling, stationery, communication, etc. • Delays in securing appropriate accommodation for Eastern Cape & North West Offices. This had an effect on both goods & services; machinery & equipment as some of the required office furniture & equipment could not be procured as planned. • Spatial Planning & Information: R24.3m was reprioritised during the Adjustment Estimates process in November 2009 to cater for the newly created sub-programmes - Disaster Management; and Technology Research & Development. Due to structures only finalised in the later part of the financial year, this allocation could not be expended as planned. • Auxiliary Services: This programme was used to pay Public Works accommodation and Capital Works Projects. The Department received its approval for the Capital Works Project from the Department of Public Works very late during the financial year.

11. Conclusion and Way-forward • The Structures of the new Department of Rural Development and Land Reform is now finalised. • Critical posts are being filled in line with the new mandate of the Department • The Department will strive to return to its spending patterns of spending more than 99% of its allocated budget in line with the two previous financial years • The Department has applied for the unspent funds to be rolled-over to the new financial year, and approval from NT is still pending the sitting of the NT Roll-over Committee • Performance monitoring mechanisms are in place to track and monitor programme’s spending patterns

12. THANK YOU