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Department of Land Affairs. Presentation to the Joint Budget Committee on the 2007 Medium Term Budget Policy Statement 02 November 2007 Ms Cathy Motsisi Acting Chief Financial Officer. Contents. Purpose Expenditure Trends and Audit outcomes for 2006/07
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Department of Land Affairs Presentation to the Joint Budget Committeeon the 2007 Medium Term Budget Policy Statement02 November 2007Ms Cathy MotsisiActing Chief Financial Officer
Contents • Purpose • Expenditure Trends and Audit outcomes for 2006/07 • Mandate & Medium Term Policy Priorities • MTEF Allocations • Infrastructure & Maintenance budget • Transfer & Grants Management • Personnel Establishment and vacancy ratios • Skills Development & Training Programmes • Monitoring & Evaluation systems
Purpose The purpose of this presentation is to present: • the Medium Term Expenditure Framework and the audit outcomes for 2006/07 to the JBC • to comment on the efficiency and effectiveness of systems and practices put in place to manage the activities of the Department • to discuss measures put in place to address challenges and shortcomings
Five Year Expenditure Trends 73% 99,9% 98% 97% 99% R1,091b R1,655b R2,031b R3,897b R3,730b
SPENDING VS BUDGET FOR THE FIRST 6 MONTHS OF THE YEAR CURRENT FINANCIAL YEAR Benchmark Spending for 6 months is 50.%
Adjustment Estimates for 2007/08 • The Department submitted a Treasury Committee memorandum requesting the following adjustments to the current budget: • R1 bil - to augment the funding needs under Programme 4, Restitution • R18 mil - for ICT needs • R67 million for the State Land Audit and the finalization of the Area based Plans • Save to say only R250 million was approved for the Richtersveld claim. The Department is presently looking at reprioritising within Programmes to fund the prioritised activities
FINANCIAL PERFORMANCE 2006/07The Department has achieved a record spending of 99.88% (2005/06: 73.08%) against the adjusted appropriation of R3,73 billion for the year under review. The Restitution and Land Reform Programmes represent 85% of the Departmental adjusted appropriation. Interventions put in place during the year yielded positive results as both programmes managed to spend 100% of their allocated budgets for capital transfers to household.
Audit Report 2006/07 The Department received a qualified audit opinion on: • Asset Management • Rental Revenue Receivable from Leased Land
Asset Management Finding • Assets could not be located for physical verification • Asset register did not comply with the minimum requirements of the Asset Management Guidelines; e.g. order numbers not recorded • Root Cause • Initial take-on of assets in 2002/03 had a number of serious flaws • Non compliance with the Departmental Policy and Procedures • Capacity • Interventions to address the problems: • Reconcile the 2002/03 information – retrieve source documents for proper classification and capturing of order numbers • Continue with the robust identification of non-verified assets • Clean the register to reflect a true record • Capacitate the unit • Enforce compliance with the policy
Rental Revenue Receivable from Leased Land Finding • Incomplete information on all land available for leasing • Revenue collected through the Power Of Attorney (POA) agreements to be transferred to the National Revenue Fund • Incomplete and inaccurate information Root Cause • Lack of approved policies to govern the relationship regarding the revenue collected through POA • Lack of a complete database/register of leased land • Lack of a debtors management system • Inadequate contract management • Significant progress has been made to institutionalize the management of leased state land and some of the key achievements are:- • Creating capacity in the PLRO - 49 posts created for the management of state land in order to capacitate provincial land reform offices. • Development of a lease contracts and debtors application system which is now going through a user acceptance testing phase. • Setting up of systems for integrating revenue collection from Provincial Departments of • Agriculture (POA)
Strategic Context Interventions and participation of the State in the land market to accelerate land redistribution Enhanced access to and/or ownership of land by people living on farms to improve their livelihoods and economic opportunities Contribution to Poverty Alleviation and Economic Development through Land Reform and Administration Development of capacity building models and programmes for Land Reform Beneficiaries, DLA employees and other Key Stakeholders Alignment of Spatial plans Economic Growth Security of Tenure Reduction of un- employment Agrarian Reform Housing
Challenges • Major challenges facing the Department, and therefore contributing to the much debated slow pace of land reform delivery, are to a large extent attributable to: • Insufficient financial resources • High land prices • Capacity constraints • Lack of appropriate funding models • Providing training, and technical support to land reform beneficiaries which is critical for sustainable land & agrarian reform • Integrated planning
Challenges cont. • Finalizing restitution process in 2007/2008 • Managing risks inherent in the restitution and redistribution ‘high drive’ • The need for organized agriculture must demonstrate more concrete commitment to land reform • Increasing the culture of respect for land rights of vulnerable groups like labour tenants, occupiers and other farm dwellers
Initiatives to address the challenges • In order to address the unacceptable slow pace of land delivery as well as promote integrated development, the Department has adopted the Pro-active Land Acquisition Strategy (PLAS) whereby prime agricultural land is acquired pro-actively based on the lands needs expressed in the Provincial Growth and Developmental Strategies. • Other initiatives include strengthening of the relations with the key stakeholders like organized agriculture and NGO’s for post settlement support. • Alignment of the implementation plans with the Department of Agriculture for improved and timely provision of agricultural support.
Initiatives to address the challenges cont. • Presidential Priority of delivering 5 million ha of agricultural land by 2008/09 which will be driven through the special project. • Review of the grants models to enable a better means of providing land to the beneficiaries. • Fast tracking the vesting of state land to create an enabling environment for restitution and redistribution. • Revised delegations and increased capacity for the restitution and redistribution programmes. • Discussions with NT with regard to the development of a strategy towards curbing the high land prices.
Risk Assessments • Risk management forms an integral part of the total management process of the Department, and to this end, the “BARNOWL” Risk assessments tool was procured for data management, monitoring and continuous review of the risk register. • Periodical performance audits are also conducted by Internal Audit. • Risk assessment registers are reviewed annually and aligned to the business processes and operational plans.
Planning Assumptions • In our planning for accelerated land delivery the following assumptions are taken into consideration: • Government will provide a reasonable budget • There will be a robust effort to source the relevant capacity • There will be strong partnering with the Department of Agriculture and organized agriculture for post settlement support and transfer of skills • Prime Agricultural land will be identified through various mechanisms like the Area Based Planning • Provision of training to land reform beneficiaries • Bringing in strategic partners for support and sustainability of projects
Activities not catered for in the current baseline • Presidential priority in respect of land reform to redistribute 5 million hectares of prime agricultural land in the next two years. • The settlement of 5 279 remaining restitution claims in the next three years. • Capacity building through the phased-implementation of the new organisation structure by creating and filling 1 221 posts. • Scaling up of Information, Communication and Technology (ICT) to respond to the increase in number of users, business requirements and technology deficiencies.
Indicative Baseline Allocationfor the new MTEF 2008/09 – 2010/11
Year on Year comparison of budget against hectares delivered
Impact of the Proposed new baseline including policy options for the period 2008/09 – 2010/11
Systems for the Transfers and Grants Management Restitution • Delegations up to R100million given to Commissioners • Quality Assurors have been appointed to provide support to commissioners with regard to risk and financial management • Information Management Unit ensures that approved claims are properly recorded • Effective control measures and segregation of duties in place • Payment is done on original documents and centrally at National Office
Systems for the Transfers and Grants Management Redistribution • Every project is loaded on BAS • Grants are approved through the Provincial Grants Approval Committees • Delegations given to Land Reform Chief Directors • Payments are centrally done at National Office – (Safety net) • Clear segregation of duties
Skills Development & Training Programme Internship Programme • Assist DLA create a pool of suitably qualified and skilled people to drawfrom by equipping students with necessary practical experience. Bursary Scheme • DLA has 168 prospective bursary holders studying degrees and diplomas in Geomatics, Surveys, Cartography, Town and Regional Planning at various Universities and Technikons. • 22 diploma and 6 degree students are to complete their qualification at the end of this year and be placed in Branch LPI in 2008.
Graduate Programme • The DLA has embarked on the above programme to build capacity and fill vacant entry level positions • Graduates undergo a structured training programme and practical work experience and sign a 4 year contract • Training is done by DLA in partnership with different tertiary institutions • 21 graduates commenced in deeds on 1 Oct 07 and other branches will follow in a staggered approach. All graduates have allocated mentors
Human Resource Development Strategy Officials • The Department is currently in the process of conducting a skills audit of all employees at different levels. This exercise is aimed at identifying the current skills gaps, job fit, and training needs in order to create a knowledgeable and productive workforce. Beneficiaries • An MOU with the University of Fort Hare. Through this partnership training programmes for land reform beneficiaries in the Eastern Cape have been developed. Training for beneficiaries will commence in November. • Consultation with stakeholders and beneficiaries in all provinces are continuing to develop a skills development framework.
Monitoring & Evaluation Systems • Risk and Compliance Directorate have developed standardised systems and procedures for components to report on operational plans. • The Monitoring and Evaluation Directorate on the other hand, has been more closely aligned and its capacity increased to capacitate it to monitor (as well as report on) both the organisational performance as well as validate effectively, source of information. • Operational and Financial performance is also monitored closely through various structures in the Department, the Strategic Committee (STRATCOM) which meets monthly to discuss strategic issues including operational and financial performance.
Monitoring & Evaluation Systems cont. • The Department is in the process of implementing an electronic system called “project tracking tool” which enhance the close monitoring of projects. • Performance agreements and work plans are actively monitored by the Human Resource section. Assessments are also conducted quarterly for junior staff and annually for senior managers.
In Conclusion…. • Yes indeed, it is not only the budget that will enable the Department to reach the 2014 target, but an integrated radical approach that will provide progressive systems, mechanism and capacity for accelerated land reform. • On the other hand, the challenges faced by the Restitution programme clearly indicates that the commission will not be able to wind up its activities by 2008.
