2 nd AND 3 rd QUARTER FINANCIAL PERFORMANCE REPORT: FINANCIAL YEAR PRESENTATION TO PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM 17 FEBRIARY 2016

Presentation Outline 1.Executive Summary 2.DRDLR’s Performance per Program and per Economic Classification 3.Agricultural Land Holding Account 4.Deeds Registration Trading Account

3 Executive summary  The Department’s total spending for the 3 rd Quarter amounted to R6.2 billion, representing 67.68% of the adjusted appropriation of R9.2 billion, leaving an available budget of R3 billion.  Performance reflected a 7.5% or R686.4 million under spending of the linear target of 75.0%.  If compared to the spending of the 2 nd Quarter amounting to R3,611 billion or 38.5% of the original appropriation of R9, 4 billion and improvement of R2. 6 billion or nominal increase of 72% quarter on quarter  The main contributor to the aforementioned under spending was Household Transfers spending 17.2% below linear target and specifically under Program Rural Development 47.5% Program: Land Reform 37.1%.; and Program Restitution with 5.6% under spending.  The vacancy rate of 10.68% or 497 funded vacancies also contributed to under spending of Compensation of employees.

4 Per Branch Per Program & Branch R’000 Original BudgetOriginal Budget Quarter 2 Spending Q2 % Spent Adjusted Budget Quarter 3 Spending Available Budget Q3 % Spent % Growth Q2 to Q3 1. Administration 1,264,265 1,264, , , %1,324, , , , , %55.5% Ministerial Services 41,018 21, % 40,866 34,302 6, %62.8% Management 140,050 62, % 150, ,142 49, %62.1% Internal Audit 58,107 20, % 51,181 32,073 19, %54.9% Financial Services 352, , % 373, , , %45.7% Corporate Services 364, , % 390, , , %64.0% Provincial Co-ordination 308, , % 317, ,764 84, %54.1% 2. Geo-spatial & Cad Serv 799, , , , % 748, , , , , , %52.7% Nat Geomat Man Serv 609, , % 533, , , %53.3% Spat Plan & Land Use Man 190,049 80, % 214, ,405 93, %51.0% 3. Rural Development 1,975,739 1,975, , , %1,984,5771,066, , , %91.1% NARYSEC/SOYD 331, , % 361, , , %60.9% RID 917, , % 926, , , %66.9% REID 725, , % 695, , , %171.5% 4. Restitution 2,602,669 2,602, , , %2,602,6691,899, , , %100.8% 5. Land Reform 2,737,108 2,737,108 1,182,214 1,182, %2,537,1081,815, , , %53.5% Land Redis and Dev 2,323,529 1,002, %1,969,8751,539, , %53.6% Land Tenure and Admin 413, , % 567, , , %53.0% Total 9,379,684 9,379,684 3,611,260 3,611, %9,197,3616,211,640 2,985,721 2,985, %72.0%

DRDLR Per Program Q2 vs Q3

6 Per Economic Classification R ' 000R ' 000 Original Budget Quarter 2 Spending Q2 % Spent Adjusted Budget Quarter 3 Spending Available Budget Q3 % Spent % Growth Q2 to Q3 Compensation Of Employees 2,115, , % 2,114,885 1,477, , %53.8% Goods and services 1,501, , % 1,361, , , %64.5% Interest And Rent On Land (427)242.4%0.3% Provinces and Municipalities 3,735 66, % 58,204 74,049 (15,845)127.2%11.3% Departmental Agencies and Accounts 1,679, , % 1,379,491 1,197, , %48.9% Foreign Governments and International organisations 1, % 2,325 1, %- Public Corporations and Private enterprises % Non-Profit Institutions 3,159 1, % 3,159 1, %0.0% Households 4,048,816 1,116, % 4,177,787 2,413,993 1,763, %116.3% Buildings & Other Fix Struct - 1, ,818 3,610 8, %83.3% Land&Subsoil Assets - 78, ,552 (82,552)-5.5% Machinery And Equipment 23,320 26, % 87,955 46,267 41, %73.9% Software & Intangible Assets 1, % %0.0% Payment for Financial Assets (522)-1.2% Total 9,379,684 9,379,684 3,611,255 3,611, % 9,197,361 9,197,361 6,211,644 6,211,644 2,985,717 2,985, %72.0%

7 Per Economic Classification

8 1. Administration R ' 000R ' 000 Original Budget Quarter 2 Spending Q2 % Spent Adjusted Budget Quarter 3 Spending Available Budget Q3 % Spent % Growth Q2 to Q3 Compensation Of Employees 709, , % 697, , , %52.1% Goods and services 543, , % 571, , , %60.3% Interest And Rent On Land (3)-51.1% Provinces and Municipalities % 4 12 (8)288.2%52.6% Departmental Agencies and Accounts %0.0% Households %86.4% Buildings & Other Fix Struct - 1,970#DIV/0! 11,725 3,517 8, %78.6% Machinery And Equipment 10,324 19, % 43,774 28,747 15, %46.3% Software & Intangible Assets %- Payment for Financial Assets (36)-(4.4%) Total 1,264,265 1,264, , , % 1,324,944 1,324, , , , , %55.5%

9 2. Geospatial and Cadastral Services R ' 000R ' 000 Original Budget Quarter 2 Spending Q2 % Spent Adjusted Budget Quarter 3 Spending Available Budget Q3 % Spent % Growth Q2 to Q3 Compensation Of Employees 478, , % 479, , , %52.9% Goods and services 166,157 70, % 204, ,056 91, %60.5% Provinces and Municipalities % %66.4% Foreign Gov&International Organ 1, % 2,325 1, %- Departmental Agencies and Accounts 119,537 15, % 19,391 15,929 3, %0.0% Non Profit Institutions (NPI) 3,159 1, % 3,159 1, %0.0% Households 22,973 10, % 27,695 15,315 12, %42.1% Machinery And Equipment 6,553 1, % 10,757 5,184 5, %302.8% Software & Intangible Assets 1, % %0.0% Payment for Financial Assets (373)-0.2% Total 799, , , , % 748, , , , , , %52.7%

10 3. Rural Development R ' 000R ' 000 Original Budget Quarter 2 Spending Q2 % Spent Adjusted Budget Quarter 3 Spending Available Budget Q3 % Spent % Growth Q2 to Q3 Compensation Of Employees 253, , % 269, ,774 49, %53.4% Goods and services 373,368 39, % 149,002 79,700 69, %104.1% Interest And Rent On Land (364)-0.0% Households 1,345, , % 1,556, , , %104.4% Machinery And Equipment 3,268 1, % 10,142 2,176 7, %84.1% Payment for Financial Assets (22)-0.0% Total 1,975,739 1,975, , , % 1,984,577 1,984,577 1,066,971 1,066, , , %91.1%

11 4. Restitution R ' 000R ' 000 Original Budget Quarter 2 Spending Q2 % Spent Adjusted Budget Quarter 3 Spending Available Budget Q3 % Spent % Growth Q2 to Q3 Compensation Of Employees 312, , % 312, ,699 84, %57.7% Goods and services 168,419 79, % 205, ,179 74, %64.8% Interest And Rent On Land (60)120.0%0.4% Provinces and Municipalities 3,567 18, % 8,888 19,053 (10,165)214.4%2.7% Households 2,116, , % 2,066,464 1,433, , %130.7% Land & Subsoil Assets - 78, ,552 (82,552)-5.5% Machinery And Equipment 2,067 3, % 9,255 4,953 4, %64.3% Payment for Financial Assets (75)-10.3% Total 2,602,669 2,602, , , % 2,602,669 2,602,669 1,899,345 1,899, , , %100.8%

12 5. Land Reform R ' 000R ' 000 Original Budget Quarter 2 Spending Q2 % Spent Adjusted Budget Quarter 3 Spending Available Budget Q3 % Spent % Growth Q2 to Q3 Compensation Of Employees 362, , % 356, , , %55.7% Goods and services 249, , % 230, ,056 62, %62.8% Provinces and Municipalities 11 48, % 49,304 54,983 (5,679)111.5%14.5% Departmental Agencies and Acc1,560, , %1,360,096 1,181, , %49.9% Households 563, , % 526, , , %82.9% Public Corporations & Priv Ent % Buildings & Other Fix Struct %- Machinery And Equipment 1,108 1, % 14,027 5,206 8, %254.0% Payment for Financial Assets (17)-0.0% Total2,737,108 1,182,214 1,182, %2,537,108 1,815,243 1,815, , , %53.5%

Agricultural Land Holding Account Financial Performance as at 31 December 2015

1.As at 31 December 2015 expenditure amounts to R1 076 billion against the annual budget of R1 542 billion, representing 69.8% of the budget. 2.Spending consists of Land acquisition amounting to R739.3 million, representing 86.9% of the Land Acquisition budget, Recapitalisation and Development amounting to R325.5 million, representing 48.2% of the Recap budget and Planning amounting to R11.2 million, representing 69.5% of the Planning budget. 3.In terms of the recovery plans implemented by LRD Branch, expenditure on Land Acquisition managed to improve from 34.4% in the second quarter to 86.9% in the third quarter exceeding the linear target of 75%. 4.Recap expenditure increased from 14% in the second quarter to 48.2%, which still constitutes under performance in terms of the linear target. Expenditure Analysis 14

5. Reason for under-performance on Recap is due to: Delays in processing of payments due to the non compliance by SP/Beneficiaries in submitting the invoices. Delays in packaging of payments after NLARCC /MCM approval /Concurrence. c) Delays in signing of the new Recap contracts, which delay the implementation of projects. 6. Remedial Action to address identified challenges: The team, lead by Chief Directors within the Branch will assist Provinces on unblocking the blockages (Ensure compliance of submissions including signing of contracts and Reconciliation of invoices). Projects with SP and beneficiaries that are non compliance with the reconciliation will be removed from the projections. Expenditure Analysis 15

Consolidation 16 R'000 Current budget Actual Spending April – December 2015 Available Budget % Spent First Quarter % Spent Second Quarter % Spent Third Quarter Eastern Cape % 14% 85.9% Free State % 42% 89.7% Gauteng % 39.7% 90.3% KwaZulu-Natal % 8.4% 38.8% Limpopo % 29.2% 50.4% Mpumalanga % 8.2% 62.7% Northern Cape % 32.2% 91.5% North West (8 646) 0.2% 72% 105.1% Western Cape % 2.4% 39.1% TOTAL % 25.8% 69.8%

Land Acquisition 17 R'000 Current budget Actual April – December 2015 Available Budget % spent First Quarter % spent Second Quarter % spent Third Quarter Eastern Cape % 7.4% 91.7% Free State % 49.4% 99.7% Gauteng % 27.3% 96.0% KwaZulu-Natal % 10% 63.8% Limpopo % 38.3% 52.1% Mpumalanga % 2.2% 58.7% Northern Cape (3 472) 11.1% 58.5% 104.6% North West (44 774) 0.0% 108.8% 143.3% Western Cape % 0% 81.5% TOTAL % 34.4% 86.9%

Recapitalisation and Development 18 R'000 Current budget Actual April – December 2015 Available Budget % spent First Quarter % spent Second Quarter % spent Third Quarter Eastern Cape % 25% 75.6% Free State % 30% 73.6% Gauteng % 299.9% 70.2% KwaZulu-Natal % 4.4% 20.2% Limpopo % 13.2% 47.2% Mpumalanga % 32.2% 82.5% Northern Cape % 10.9% 81.1% North West % 13.8% 50.0% Western Cape % 3.6% 16.8% TOTAL % 14.0% 48.2%

Planning 19 R'000 Current budget Actual April – December 2015 Available Budget % spent First Quarter % spent Second Quarter % spent Third Quarter Eastern Cape % 64.5% 64.6% Free State (634) 0.0% 0% 0.0% Gauteng (397) 0.0% 0% 0.0% KwaZulu-Natal (5 316) 187.3% 396.5% 412.7% Limpopo % 54.6% 90.9% Mpumalanga % 6% 13.3% Northern Cape (173) 59.2% 326.7% 155.6% North West % 8% 11.0% Western Cape %15.1% 20.6% TOTAL % 64.1% 69.5%

Registration of Deeds Trading Account Financial performance as at 12 February 2016 and Third Quarter Financial Performance Report (April- December 2015)

Executive summary 21 1.Deeds Trading Account generated R480,2 million, representing 67% of the revised projected revenue of R719,9 million. The revenue generated included a transfer/ grant amount of R 15,9 million which was received from the Department to augment salaries. The main source of revenue is Office of Chief Registrar of Deeds for provision of bulk information search of property from Deeds web. 2.Spending as at 31 December 2015 amounted to R396 million, representing 59% against the revised projected budget of R665,9 million. 3.Deeds utilise revenue generated to pay for its operational costs and therefore R52,4 million under spending is favourable as linear target is not applicable and also to ensure that the branch does not run in a deficit, measures have been put in place to monitor spending. 4.Compensation of Employees spending amounted to R321,3 million representing 65% of the projected allocated budget of R496,9 million. The under spending is attributed to the 139 vacant posts that are in the process of being filled. 5.Currently the branch has a total establishment of 1345 posts, filled posts are 1190, and 139 vacant posts 6.The cash flow balance as at 31 December 2015 is R323,9 million.

Executive summary – cont. 22 E-Cadastre Project 1.The amount of R81.5 million is the balance brought forward from previous years unspent grants. The Deeds Trading Account augmented E-cadastre project with R24 million from the approved retention surplus of R110,4 million. 2.Spending as at 31 December 2015 for E-cadastre amounted to R23,7 million, representing 44% of the total projected spending of R53.6 million. The total expenditure of R23,7 million includes R2 million for recovery of prepaid expenditure of work-back plan for Gijima and R4,1 million for depreciation. 3.The budget was revised in order to be in line with available funds for the operation of the project.

23 Expenditure Analysis per office R’000 Name of Office Revised Budget Revenue generated April – December 2015 Actual Exp April – December 2015 Variance: Revenue generated & Actual Exp %spent First Quarter %spent Second Quarter % spent Third Quarter Projection s April - December 2015 Over/ under projected Office of the Chief Registrar of Deeds184,188122,98387,23635,74759%62%71%109,29822,062 Pretoria96,019115,24371,51143,73262%62%62%70, Johannesburg71,80661,95649,34512,61181%77%80%52,1362,791 Cape Town77,02196,00453,28242,72255%56%55%52, Bloemfontein58,80514,46129,75015,289206%205%206%37,8508,100 Pietermaritzburg69,18743,82943, %98%98%49,5926,459 Kimberly20,6852,36610,9688, %464%14,3263,358 Vryburg21,3593,02110,5517,530297%313%349%14,6954,144 King Williams Town18,6874,95910,3835,424201%204%209%13,5073,124 Umtata14, ,1418, %1107%1229%10, Nelspruit33,42414,63020,7476,117139%144%142%23,4212,674 Total665,943480,196396,04784,14977%79%82%448,46752,420

24 Consolidation R’000 Revenue Budget Actual Revenue April- December 2015 April- December 2015Variance:% First Quarter % Second Quarter % Third Quarter Revenue703,957464,267239,69021%42%66% Departmental Grants15,92915, %100% Total Revenue 719, , , ,196239,69021%44%67% Compensation of Employees496, , ,63722%42%65% Goods and services 149,531 65,05584,4767%25%41% Depreciation 19,5009,717 9,78312% 71% Total Operating Expenditure 665, , , ,047269,89617%37%59% Surplus/ (Deficit) from Operating Activities 53,943 53,94384,149(30,206)--- Assets 39,5183,41936,0995% 9%

E-cadastre Project 25 R’000 Revised Budget Revised BudgetSpendingBalanceavailable% Spent First Quarter % spent Second Quarter % spent Third Quarter Retained surplus81, Transfer from Approved Retention Surplus 24, Total 105, ,527 23,702 23,702 81,825 81,8256%9%22% Goods and services 53,60029,815 23,7855%17%56% Less: Recovery of prepaid expenditure work-back plan (2,024) Depreciation(4,089) Total 53,600 53,60023,702 29,898 29,8987%17%44% Surplus/ (Deficit) 51,927 51, Assets %

Thank You 26