1st QUARTER FINANCIAL PERFORMANCE REORT: 2015-2016 FINANCIAL YEAR PRESENTATION TO PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT AND LAND REFORM 19 AUGUST 2015

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

Executive summary The Department’s total spending for the 1st Quarter amounted to R1.5 billion, representing 15.8% of the appropriation of R9.4 billion, leaving an available budget of R7.9 billion. Performance reflected a 9.2% or R861.7 million under spending of the linear target of 25.0%. The main contributor to the aforementioned under spending was the 14.9% under spending by Programme 3: Rural Development, mainly on Households item, followed by Programme 4: Restitution's under spending of 12.4%, also mainly on Households.

Executive summary (cont.) Compensation of Employees reflected an underspending of 1.6% against the linear target due to 714 funded positions, as established through priority list and natural attrition after cut off date. This imply an vacancy rate of 14.7%. Detail per program and branch is depicted in the table below:

Executive summary – cont. DRDLR per Sub program Current budget Spending up to 30/06/2015 Balance % spent Filled Positions Vacant Positions Vacancy Rate Estimated Under / (Over) Spending if all posts are filled R’000 % Number 1: Administration 709,937 158,513 551,424 22.3% 1,558 174 10.0% 7,880 Ministerial Services 27,318 5,252 22,066 19.2% 30 5 14.3% 4,045 Management 80,948 14,810 66,138 18.3% 129 33 20.4% 3,102 Internal Audit 37,337 6,443 30,894 17.3% 54 15 21.7% 5,237 Corporate Support Services 187,444 43,574 143,870 23.2% 354 41 10.4% 4,143 Provincial Coordination 266,207 62,159 204,048 23.3% 708 48 6.3% (9,805) Office Chief Financial Officer 110,683 26,275 84,408 23.7% 283 32 10.2% 1,158 2: Geo- Spatial & Cadastr 478,210 107,087 371,123 22.4% 1,142 92 7.5% 2,856 Cadastral Surveys 385,512 88,012 297,500 22.8% 993 79 7.4% (2,145) SPLUM 92,698 19,075 73,623 20.6% 149 13 8.0% 5,001 3: Rural Development 253,424 68,418 185,006 27.0% 528 27 4.9% (11,694) Social Organis & Youth Dev 58,759 13,893 44,866 23.6% 113 21 15.7% (434) REID 117,633 30,743 86,890 26.1% 137 3 2.1% (2,357) RID 77,032 23,783 53,249 30.9% 278 1.1% (8,902) 4: Restitution 312,321 70,000 242,321 735 225 23.4% (60,720) 5: Land Reform 362,029 91,559 270,470 25.3% 196 50.0% (10,970) Land Redistribution and Development 185,553 63,455 122,098 34.2% (5,277) Land Tenure and Admin Support 176,476 28,103 148,373 15.9% 114 (2,780) Office of Valuer General - (2,913) Total DRDLR 2,115,921 495,578 1,620,343 4,159 714 14.7% (72,647)

DRDLR Per Program Q1 14/15 vs 15/16 25.1 20.7% 24.9% 12.6% 18.9% 10.1% 19.8% 19% 17.8% 17.5%

Per Branch R’000 2014/15 Budget 2014/15 Quarter 1 Spending 2014/15 % spent Q1 2015/16 Budget 2015/16 Quarter 1 Spending 2015/16 % spent Q1 1. Administration 1,384,430 263,687 19.0% 1,264,265 249,761 19.8% Ministerial Services 41,283 7,895 19.1% 41,018 9,999 24.4% Management 134,457 28,525 21.2% 148,545 29,787 20.1% Internal Audit 41,046 7,208 17.6% 58,107 9,542 16.4% Financial Services 373,492 59,988 16.1% 350,763 68,019 19.4% Corporate Services 499,060 87,912 357,720 57,976 16.2% Provincial Co-ordination 295,092 72,158 24.5% 308,112 74,438 24.2% 2. Geo-spatial & Cad Serv 733,415 130,708 17.8% 799,903 140,258 17.5% Nat Geomat Man Serv 548,289 101,026 18.4% 607,854 102,029 16.8% Spat Plan & Land Use Man 185,126 29,682 16.0% 192,049 38,229 19.9% 3. Rural Development 1,852,332 349,989 18.9% 1,975,739 199,580 10.1% NARYSEC/SOYD 646,223 197,690 30.6% 331,941 59,731 18.0% RID 716,784 79,580 11.1% 917,862 95,115 10.4% REID 489,325 72,719 14.9% 725,936 44,735 6.2% 4. Restitution 2,998,742 747,439 24.9% 2,602,669 328,080 12.6% 5. Land Reform 2,486,386 623,881 25.1% 2,737,108 565,585 20.7% Land Redis and Dev 2,126,840 601,452 28.3% 2,323,729 470,848 20.3% Land Tenure and Admin 359,546 22,429 413,379 94,737 22.9% Total 9,455,305 2,115,704 22.4% 9,379,684 1,483,264 15.8%

DRDLR Per Econ Class Q1 14/15 vs 15/16 26.7% 28% 20.2% 20.3% 22.1% 73% 12.6% 6.7%

Per Economic Classification 2014/15 Budget 2014/15 Quarter 1 Spending 2014/15 % spent Q1 2015/16 Budget 2015/16 Quarter 1 Spending 2015/16 % spent Q1 Compensation 1,810,352 483,672 26.7% 2,115,921 467,474 22.1% Goods and services 1,376,764 407,559 29.6% 1,244,685 209,970 16.9% Interest and Rent on Land 5,678 2,400 42.3% - 724 Payments for fin assets 411 370 Dept. agencies and acc. 1,752,678 436,436 24.9% 1,679,634 394,350 23.5% Foreign Gov & Internat Organ 2,064 0.0% 1,495 Households 3,997,515 701,644 17.6% 4,253,471 313,488 7.4% Non Profit Institutions (NPI) 3,020 3,159 790 25.0% Provincial and local gov. 123,197 52,278 42.4% 8,965 43,267 482.6% Public Corporations&Priv Ent 1 5,604 560386.8% Build & Other Fixed Structures 7,691 10,401 135.2% 11,781 697 5.9% Land&Subsoil Assets 201,275 4,642 2.3% 48,260 #DIV/0! Machinery and equipment 170,284 10,659 6.3% 59,100 3,872 6.6% Software & Intangible Assets 4,786 1,472 Total 9,455,305 2,115,704 22.4% 9,379,684 1,483,264 15.8%

1. Administration R'000 Current budget Spending Under / (over) spending % spent Drawings to date Compensation of employees 709 937 158 513 551 424 22,3% 169 277 10 764 93,6% Goods and services 521 641 89 134 432 507 17,1% 154 438 65 304 57,7% Interest and rent on land - 1 (1) Payments for financial assets Provincial and local governments 134 34 Departmental agencies and accounts 26,5% Households 60 107 (47) 178,7% (107) Buildings and other fixed structures 697 (697) Machinery and equipment 32 396 1 307 31 089 4,0% 1 491 184 87,6% Software and intangible assets 96 Total 1 264 265 249 761 1 014 504 19,8% 325 240 75 479 76,8%

1. Administration Variance Linear Target – 5.2% The branch spending trend is below the linear target of 25% by 5.2% due to the following: CoE 9.5% vacancy rate The delay in processing travel payments. The lead time between the date of initial travel and actual payments takes over 60 days to pay .

2. Geospatial and Cadastral Services Current budget Spending Under / (over) spending % spent Drawings to date Compensation of employees 478 210 107 087 371 123 22,4% 116 926 9 839 91,6% Goods and services 164 705 28 908 135 797 17,6% 41 650 12 742 69,4% Payments for financial assets - 369 (369) Provincial and local governments 8 9 Departmental agencies and accounts 119 537 Foreign governments and int. org. 1 495 Non profit institutions 3 159 790 2 369 25,0% 100,0% Households 23 039 2 935 20 104 12,7% 2 365 (570) 124,1% Machinery and equipment 8 374 168 8 206 2,0% 2 415 2 247 6,9% Software and intangible assets 1 376 1 167 Total 799 903 140 258 659 645 17,5% 166 817 26 559 84,1%

2. Geospatial and Cadastral Services Variance Linear Target – 7.5% The branch spending trend is below the linear target of 25% by 7.5% due to the following: Payments for bursary scheme under households have not yet been paid to institutions. Transfers to Deeds to augment budget and support for ECadastre project have not yet been processed Due to commitments for consultants under branch SPLUM amounting to R52, 7 million that are not yet translated into expenditure, the bulk of consultants relate to SDF that in turn is dependent on finalizing of projects.

3. Rural Development R'000 Current budget Spending Under / (over) spending % spent Drawings to date Compensation of employees 253 424 68 418 185 006 27,0% 64 676 (3 742) 105,8% Goods and services 165 606 16 560 149 046 10,0% 90 326 73 766 18,3% Interest and rent on land - 364 (364) Payments for financial assets Households 1 551 308 113 987 1 437 321 7,3% 354 118 240 131 32,2% Machinery and equipment 5 401 251 5 150 4,6% 1 022 771 24,5% Total 1 975 739 199 580 1 776 159 10,1% 510 142 310 562 39,1%

3. Rural Development Variance Linear Target – 14.9% The branch spending trend is below the linear target of 25% by 14.9% due to the following: RID review and realignment of Performance targets for the branch to incorporate Agri parks . REID has not made any payment to existing SLA as they are currently under review due to reprioritization of Agri Parks SOYD under spending on households/training. Payments to colleges are processed when they are received from institutions, the expenditure is expected to increase once these invoices are received and paid.

4. Restitution R'000 Current budget Spending Under / (over) spending % spent Drawings to date Compensation of employees 312 321 70 000 242 321 22,4% 72 240 2 240 96,9% Goods and services 163 859 33 863 129 996 20,7% 41 496 7 633 81,6% Interest and rent on land - 359 (359) Payments for financial assets Provincial and local governments 5 978 8 726 (2 748) 146,0% 924 (7 802) 944,4% Households 2 116 295 165 183 1 951 112 7,8% 625 916 460 733 26,4% Machinery and equipment 4 216 1 689 2 527 40,1% 680 (1 009) 248,3% Land and subsoil assets 48 260 (48 260) Total 2 602 669 328 080 2 274 589 12,6% 741 256 413 176 44,3%

4. Restitution Variance Linear Target – 12.4% The branch spending trend is below the linear target of 25% by 12.6% due to the following: Delays in the approval of S42D submissions due to processes Transfers of properties to state instead of CPAs due to community disputes. The expenditures reflects against Capital assets instead of Households Delays in finalizing the transfers of properties due to Conveyancing issues, this results in payments of final trenches being delayed Most offices are negatively affected by the new system of appointing conveyances through the SCM processes. The matter is currently being discussed with SCM unit and will be resolved A slow pace of appointing a panel of researchers for the claims lodged also affected spending on goods and services The roll-out of mobile units were delayed and thereby affected the projected expenditure in terms of maintenance, travelling, fuel costs, etc.

5. Land Reform R'000 Current budget Spending Under / (over) spending % spent Drawings to date Compensation of employees 362 029 63 455 298 574 17,5% 79 311 15 856 80,0% Goods and services 243 717 41 504 202 213 17,0% 72 801 31 297 57,0% Payments for financial assets - Provincial and local governments 2 845 34 541 (31 696) 1214,1% 3 (34 538) 1151383,0% Departmental agencies and accounts 1 560 096 394 350 1 165 746 25,3% 392 751 (1 599) 100,4% Public corporations and private ent. 1 Households 562 769 31 276 531 493 5,6% 163 575 132 299 19,1% Machinery and equipment 5 651 458 5 193 8,1% 136 (322) 336,9% Total 2 737 108 565 585 2 171 523 20,7% 708 577 142 992 79,8%

5. Land Reform Variance Linear Target – 4.3% The branch spending trend is below the linear target of 25% by 4.3% due to the following: Households / Grants: Realignment of projects to Agri-Parks and consequent budget reprioritization . Goods & Services: Budget Re-alignment to DMP’s took longer than anticipated as result the procurement was delayed. The delay in submission of quotations by Service Providers. The delay in delivery of goods & service by service provider.

Agricultural Land Holding Account

Executive summary As at 30 June 2015 spending amounted to R105.9 million, representing 6,9% of the annual appropriation of R1.5 billion Spending to date consisted mainly of Land Acquisition amounting to R62.2 million, representing 7.3% of the Land Acquisition budget, followed by Recapitalization and Development spending to the amount of R35.1 million, representing 5.2% of the Recapitalisation and Development budget, expenditure on Planning amounted to R8.5 million, representing 52.4% of the relevant budget. The delay in spending had been due to the reprioritisation of the 2015/2016 budget and the reviewing of projects within the Branch Land Redistribution and Development (LRD) to align to the Agri-Parks programme. The remedial action taken to address material variances in spending versus the budget is the development of recovery plans to ensure the implementation of the projects as a matter of priority.

Consolidation R'000 Current budget Spending Under / (over) spending % spent Eastern Cape 219 210 3 700 215 510 1.7% Free State 215 688 35 406 180 282 16.4% Gauteng 135 024 14 302 120 722 10.6% KwaZulu-Natal 183 785 15 980 167 805 8.7% Limpopo 176 248 14 266 161 982 8.1% Mpumalanga 210 559 9 807 200 752 4.7% Northern Cape 122 076 11 744 110 332 9.6% North West 195 479 366 195 113 0.2% Western Cape 83 958 287 83 671 0.3% TOTAL 1 542 027 105 858 1 436 169 6.9%

Land Acquisition R'000 Current budget Spending Under / (over) spending % spent Eastern Cape 114 302 - Free State 103 790 31 026 72 764 29.9% Gauteng 76 601 6 054 70 547 7.9% KwaZulu-Natal 119 425 4 401 115 024 3.7% Limpopo 107 924 12 428 95 496 11.5% Mpumalanga 105 547 Northern Cape 75 096 8 318 66 778 11.1% North West 103 447 Western Cape 44 633 TOTAL 850 765 62 227 788 538 7.3%

Recapitalisation and Development Current budget Spending Under / (over) spending % spent Eastern Cape 103 948 1 423 102 525 1.4% Free State 111 898 2 135 109 763 1.9% Gauteng 58 423 8 221 50 202 14.1% KwaZulu-Natal 62 660 8 395 54 265 13.4% Limpopo 67 698 1 722 65 976 2.5% Mpumalanga 102 915 9 807 93 108 9.5% Northern Cape 46 669 3 242 43 427 6.9% North West 82 258 17 82 241 - Western Cape 38 650 214 38 436 0.6% TOTAL 675 119 35 176 639 943 5.2%

Planning R'000 Current budget Spending Under / (over) spending % spent Eastern Cape 960 2 277 (1 317) 237.2% Free State - 2 245 (2 245) Gauteng 27 (27) KwaZulu-Natal 1 700 3 184 (1 484) 187.3% Limpopo 626 116 510 18.5% Mpumalanga 2 097 Northern Cape 311 184 127 59.2% North West 9 774 349 9 425 3.6% Western Cape 675 73 602 10.8% TOTAL 16 143 8 455 7 688 52.4%

Registration of Deeds Trading Account

Executive summary Deeds Trading Account generated R149,7 million for the 1st quarter, representing 21% of the projected revenue of R735.6 million. The revenue projected included a transfer/grant amount of R15.9 million expected to be received from the Department for the salaries inflation costs Spending to date amounted to R114.8 million, representing 17% against the budget of R672.7 million leaving a favourable balance of R62.9 million. The underspending is due to timing difference on invoices for services that has been rendered. A matter of serious concern is the fact that as many as six (6) of the Deeds offices had already at this early stage of the year not generated sufficient revenue to cover their operational spending. The under spending at remaining offices have to date still compensated for this over spending of projected revenue/budget, but improvement plans are currently being developed by each office and will be implemented as a matter of urgency to bring the variance down to the PFMA prescribed accepted limit of 5%, as well as to ensure that the Trading Account does not run into a deficit.

Executive summary – cont. E-Cadastre Project The projected grant amount of R103.6 million for the E-cadastre project’s operational costs has not been received from the Department as per the ENE. R81.5 million is the balance brought forward from previous years’ unspent grant. Spending to date under E-cadastre amounted to R10.4 million, representing 7% of the total projected spending of R166.2 million for the current year. Compensation of Employees spending amounted to R4.2 million representing 25% of the total projected spending of R17,4 million for the current financial year. Goods and services spending for the 1st quarter amounted to R6.2 million representing 0.5 % of the total projected spending of R148.8 million for the current year. The above figures reflects that the E-cadastre projects to spend funds including the grant of R103,6 million still to be transferred from Department.

Expenditure Analysis per office Budget April - June 2015 Actual April - June 2015 Variance % spent Office of the Chief Registrar of Deeds 36,040 21,258 14,782 59% Pretoria 36,668 22,605 14,063 62% Johannesburg 18,407 14,756 3,651 81% Cape Town 31,426 17,272 14,154 55% Bloemfontein 4,544 9,363 (4,819) 206% Pietermaritzburg 14,215 10,868 3,347 77% Kimberly 733 3,122 (2,389) 426% Vryburg 1,046 3,107 (2,061) 297% King Williams Town 1,584 3,180 (1,596) 201% Umtata 231 2,603 (2,372) 1122% Nelspruit 4,872 6,759 (1,887) 139% Total 149,766 114,893 34,873

E-cadastre Project R’000 Budget Spending Balance available % spent Unspent funds from previous years / Deferred income account 81,527 - Departmental Grants ( 2015/16 Financial Year) 103,608 Total 185,135 10,422 174,713 6 %   Compensation of Employees 17,422 4,241 13,181 25% Goods and services 148,778 6,181 142,597 0.5% Depreciation 166,200 155,778 7% Surplus/ (Deficit) from Operating Activities 18,935 Assets 763

Thank You