Presentation to the Joint Budget Committee on Departmental Expenditure for the Financial Year 2007/08 06 June 2008 Director-General Mr T Gwanya Department of Land Affairs
Contents • 2007/08 Un-audited Financial Performance • Under spending • Six year Trends Analysis • Expenditure Per Economic Classification & Virements • Expenditure Analysis Per Programme • March Spike • Procurement • Vacancies • Medium Term Budget • Medium Term Challenges • Risk Management
Un-audited Financial Performance for the year ended 31 March 2008
Under spending/Overspending: • Under spending of R22 million under the Programme: Land Reform is due to the reclassification of expenditure from Transfers and Subsidies: Households to Land and Subsoil. • Under spending of R5 million under the Programme Auxiliary and Associated Services is due to delays in PPP.
Six Years Expenditure Trends 99.5% 99,9% 73% 98% 97% 99%
Economic Classification & VirementsR94 million shifted was due to vacant posts
Procurement • The Department applies the PFMA, Treasury Regulations, PPPFA and the Supply Chain Management guidelines for its procurement activities. • Out of a total of R304 million contracts awarded, 34% representing R103 million was spent on BEE companies.
VACANCIESThe current vacancy rate is 25,75%(2006/07: 27,41%). If we exclude the newly created posts then it has dropped to 10%.
Medium Term Budgeting Challenges • Major challenges facing the Department with regard to accelerated land delivery • Insufficient financial resources • Restitution: R17 billion over the MTEF required to finalised outstanding claims • Redistribution: R70 billion to reach the 30% target • High land prices/ Valuation reports • 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
Initiatives to address the challenges • Establishment of an integrated Land & Agrarian Reform (LARP) • Increased LRAD and SLAG grants • Strategic Partnerships • Increased capacity through the new structure • Improved performance management • Continuous engagements with the National Treasury
Risk Management • Risk management forms an integral part of the total management process of the Department, it is enshrined in the strategic planning processes and the quarterly review management meetings. • The “BARNOWL” risk assessment tool was procured for data management, monitoring and continuous review of the risk register. • Periodical operational performance audits are also conducted by Internal Audit • Risk assessment registers are reviewed annually and aligned to the business processes and operational plans. • Quality assurors have been appointed to conduct due diligence on the section 42 files before approval by the Commissioners.
Risk Management cont. • Land Reform uses committees such as the Grants Approval Committees to make informed decisions on land acquisition. • The authenticity of companies is usually checked before a contract is awarded. Other initiatives include the use of Departmental committees such as the Bid Adjudication and Evaluation Committees, the Information Technology Committee and the Transport Committees for decision making. • Departmental policies are approved by the Accounting Officer. Delegations are appropriately cascaded to relevant managers. • Non compliance issues are duly reported and addressed by the Chief Financial Officer and the Accounting Officer.
Deeds Registration Trading Account • The Deeds Registration Trading Account is accounted for by the Department as a sub-programme under Programme 7: Auxiliary and associated services. • The main purpose of the Deeds Registration Trading Account is to finance the operating costs of the various Deeds Registries responsible for the registration of conventional bonds, sectional titles and leaseholds. • The main source of funding is fees charged on the registration of deeds and on the sale of deeds information. Shortfalls in the Account, if any, are appropriated from the budget of the Department under Programme 7. Surpluses of the Trading Account are surrendered to the National Revenue Fund, however, for this year the funds are going to be retained for the Cadastre reform project.