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Presentation to the Portfolio Committee on Rural Development and Land Reform

Presentation to the Portfolio Committee on Rural Development and Land Reform. DEPARTMENT OF RURAL DEVELOPMENT & LAND REFORM ANNUAL REPORT 2010-2011 Date: 12 October 2011 Time: 10h00 Venue: M514; 5 th Floor, Marks Bldg, CAPE TOWN. Contents. Strategic Overview Programme Performance

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Presentation to the Portfolio Committee on Rural Development and Land Reform

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  1. Presentation to the Portfolio Committee on Rural Development and Land Reform DEPARTMENT OF RURAL DEVELOPMENT & LAND REFORM ANNUAL REPORT 2010-2011 Date: 12 October 2011 Time: 10h00 Venue: M514; 5th Floor, Marks Bldg, CAPE TOWN

  2. Contents Strategic Overview Programme Performance Human Resource Management Annual Financial Statements

  3. Strategic Overview First full year of functioning as the new Department of Rural Development and Land Reform Positive movement in the CRDP programme Complexity around Land reform issues requires political and administrative leadership. Lots of work done to develop parts of the organisation (Rural Development) whilst consolidating functions inherited from the former Department of Land Affairs. Process regarding development of Green Papers on Land Reform and Rural Development at an advanced stage.

  4. Financial Overview • Department’s activities were organised into five (5) Programmes • Spending during 2010-2011 translated into 97.7% of the final allocation of R7.293 billion, compared to 91.9% of R6.391 billion allocated during 2009-2010. • Department initiated a moratorium on the filling of vacancies, whilst aligning the organisational structure to the new mandate of Rural Development. • 2.3% under-spending is therefore mainly attributable to compensation of employees.

  5. Programme 1: Administration Reduced funded vacancy rate to 11% Obtained a qualified Audit Opinion – immovable asset register not complete Development of an organisational structure to better respond to delivery needs Critical posts filled : A new Director-General was appointed in November 2010 as well as the Deputy Director-General responsible for Corporate Support Services, the Chief Surveyor-General and the Chief Registrar of Deeds.

  6. Programme 1: Administration • Back Office services needed to gear itself better to respond to an increased demand for support services at a national level as well as in the provinces. • Some key functions (ICT, Legal Services) centralised to consolidate efforts and provide leadership.

  7. Programme 2 : Geospatial & Cadastral Services 53 projects consisting of Research Reports, Cadastral Survey information and plans from spatial information generated were addressed within six working days thus exceeding the set target of 15 days.. The Department examined and approved 29 projects involving rural development within six working days. These projects were performed at Surveyor-General: Bloemfontein Office. The indicator was exceeded as the set target was nine days. Approximately 88% of National Spatial Data Set was completed in the financial year 2010-2011.

  8. Programme 2 : Geospatial & Cadastral Services • Deeds Registration has progressively introduced e-Cadastre - aimed at improving cadastral surveys management and deeds registration • As at 31 March 2011, a total of 904 928 deeds and documents were registered in the 10 deeds registries country wide. • Digital scanning of the microfilm records has commenced.

  9. Programme 3 : Rural Development STRIF mobilised 28 communities and profiled 13 694 households and captured on National Integrated Social Information System (NISIS) More than 960 youth were trained in participatory rural appraisal and social survey methods. Councils of Stakeholders (CoS) were established in 25 CDRP sites for the 2010-2011 financial year. The NARYSEC programme has also been launched by the Department. It is the first time that a skills development programme of this magnitude has been embarked upon in rural areas. As at 31 March 2011 there were 7 956 NARYSEC youth and we expect this figure to grow to 20 000 over the next three years

  10. Programme 3 : Rural Development RID facilitated the construction and renovation of schools, houses, sanitation systems, water infrastructure, energy infrastructure, fencing and roads in rural areas Some of the achievements for the year included the roll-out of 47 village viewing areas which enabled rural people to have access to the 2010 Soccer World Cup. The establishment of three e-rap centres in Muyexe and Riemvasmaak has also contributed significantly to improved access to information and this work will continue in the new financial year.

  11. Programme 4 : Restitution The Commission on Restitution of Land Rights finalised a total of 714 land claims between 1 April 2010 and 31 March 2011. These included 257 claims that were dismissed because they did not comply with the Restitution of Land Rights Act, 1994 (Act No. 22 of 1994). An additional 1 318 backlog claims were finalised, owing to the additional R2 billion that was made available to the programme. Apart from the focus on settling claims, the Commission continued with the process of finalising research on outstanding claims.

  12. Programme 5 : Land Reform The programme transferred a total of 322 844.9931 ha, equaling 288 projects and provided access to land to a total of 3 089 beneficiaries through either leases or caretakership agreements. Of the 322 844.9931 ha delivered, 276 396.6893 ha were registered in the name of the State The remaining 46 448.3038 ha were transferred through Land Redistribution for Agricultural Development (LRAD) in order to finalise the commitments the Department had at the time of the shift from grants-based land reform to Pro Active Land Acquisition Strategy (PLAS).

  13. Organisational Challenges Still settling into the new mandate of Rural Development. 3 main service delivery components of the Department – Rural Development, Land Reform and Deeds and CSG are at varying levels of maturity and hence require varying management responses. Organisational Structure still requires work to ensure that it is able to give expression to the rural development mandate. Need to consolidate the Department at a provincial level especially. Current model of disparate pieces of organisation spread out over the province hampers effective management and the ability to contain expenditure Internal Systems, processes and policies require to be reviewed in view of the new mandate especially to provide clarity and focus to implementers on the ground. Outdated ICT system does not adequately support the business processes. On the people front, we need to ensure that we continue to match the requirements of the job with the competencies and skill sets of individuals. PMDS must be an area of focus to ensure focus and delivery by staff.

  14. Key priorities for the forthcoming financial year • Generate Green Papers for Land Reform and Rural Development that would provide guidance and leadership to the outcomes that we seek • Finalise macro structure for the Department and then to ensure alignment of structure to strategy • Need to clarify and update policy and procedures to improve the national / provincial interface to enhance focus and delivery • Embracing Outcome 7 and providing greater leadership and coordination of partner contributions

  15. Briefing on the Annual Report 2010-2011 Part 3: Annual Financial Statements

  16. Accounting Officer’s report • To ensure that effective controls are in place the Department has established an Internal Audit, Risk Management and Audit Committee which were operational during the year under review. • The Office of the Auditor General has conducted an annual audit of financial statements under the provisions of the Public Finance Management Act, 1999 and Auditor General Act. • Report of the Auditor General was received and accepted by management; progress on Management Action Plans are closely monitored by the Audit Committee • The Department provides financial statements which include those of its trading entities.

  17. Accounting Officer’s report • The following reports will be discussed as contained in part 3 of the Annual Report. • Report of the Auditor-General focusing on: • Report on the Financial Statements • Report on other Legal and Regulatory requirements which are: • Predetermined objectives • Expenditure Management • Risk Management • Human Resource management • Internal controls and other reports

  18. Report of the Auditor GeneralFinancial Statements • The Department made significant progress in recording the immovable asset register as outlined in the Immovable Asset sector specific guide. It requires that the Department records : • all land vested with the national government and situated in the former TBVC states, including tribal land located in such a state; • all land vested with the national government and situated in the former self-governing territories, including tribal land located in such territory, but excluding land referred to in, and governed by, the KwaZulu-Natal Ingonyama Trust Act, 1994 (Act No. 3 of 1994); • all former South African Development Trust land unless title clearly resides with another party in terms of specific legislation

  19. Report of the Auditor GeneralFinancial Statements • At year end there were 236 land parcels which were identified in the Deeds Data and not clearly identifiable on the Immovable Asset Register of the Department. The Department is currently conducting detailed research on those properties and the exercise will be completed by 30 November 2011. • The project on surveying state land is running parallel with a comprehensive state land audit which seeks to accurately link Deeds Registry records with Surveyor General Data, as well as providing reliable information on land use.

  20. Report of the Auditor GeneralFinancial Statements • The prior year adjustment relates to the properties acquired for Restitution claimants not yet transferred to them but registered in the name of the State due to disputes and state of readiness of CPAs. • A detailed register has been maintained in this regard and the Department is in a process of transferring these properties to the CPA during the current financial year.

  21. Report of the Auditor GeneralFinancial Statements Significant uncertainty relates to claims against the Department and also exposure as a result of accepting land restitution claims. The uncertainties will remain as the outcome of the court cases depends on the rules and processes of the court. However the Department has started an electronic data management project which will ensure that reliable information is kept. The outcome of the project together with the MTEF budget approval will improve on the commitment register and fruitless expenditure reported in the paragraphs on the Annual Report that follow.

  22. Report of the Auditor GeneralLegal and Regulatory Requirements • Risk Management • Department has since appointed a member of the Audit Committee as the Chairperson of the Risk and Compliance Committee and one other external member. • Fraud Prevention Plan was since presented to the above Committee and recommended for approval with amendments. • Human Resource management and compensation • Signing of performance agreement is now a key performance area on the agreements of Senior Management. • The Department has also sought the services of a Technical Assistant Unit (TAU) from National Treasury to assist with organisational renewal.

  23. Report of the Auditor GeneralLegal and Regulatory Requirements • Expenditure Management • Department acknowledges that its grant funding model is open to abuse and therefore the recapitalisation and development model is the new model that is used to ensure that farms are farmable. • The year under review was the final year in which the LRAD model was used; controls have been put in place in finalising projects that are still in the pipeline. • Internal Control • Internal control project has been initiated which will ensure that controls that affect financial reporting are communicated and known by all employees. • Investigations are initiated by the Department in an effort to discipline and charge those found in wrongdoing. The Department will continue to ensure that investigations are completed as quick as possible.

  24. Report of the Auditor GeneralTrading Accounts • Both entities obtained an unqualified audit opinion • Agricultural Land Holding Trading Account: • The entity obtained an exemption from OAG from the measurement requirements of inventory for a period of three years beginning on 1 April 2009. The entity is currently researching the most appropriate accounting framework for accounting for and reporting on assets under lease agreements. • Internal controls over expenditure has been enhanced. • Deeds Registration Trading Account. • The investigation cases were handed to the SIU and it is progressing well. • The HR plan of the entity will be aligned to that of the Department.

  25. Report of the Auditor GeneralITB • The Ingonyama Trust Board obtained a qualified audit opinion. • The Department will strengthen its oversight responsibilities by attending management meetings in order to monitor progress on the issues raised by the Auditor General.

  26. THANK YOU

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