drdlr 3 rd quarter financial performance report: 2014-2015 presentation to the portfolio committee...

DRDLR 3RD QUARTER FINANCIAL PERFORMANCE REPORT: 2014-2015

PRESENTATION TO THE PORTFOLIO COMMITTEE ON RURAL DEVELOPMENT

AND LAND REFORM

4 MARCH 2015

Presentation Outline1.Executive Summary2.DRDLR’s Performance per Program and per

Economic Classification3.Agricultural Land Holding Account4.Deeds Registration Trading Account5.Kwa Zulu Natal Ingonyama Trust Board

2

Executive summary

Q1 - Exp Q2 - Exp Q3 - Exp Current budget

-

1000,000

2000,000

3000,000

4000,000

5000,000

6000,000

7000,000

8000,000

9000,000

10000,000

Purchase Capital Assets

Transfers

Payments for fin assets

Interest and rent on land

Goods and services

Compensation of Employees

R2, 115 billion

R4, 459 billion

R6, 719 billion

R9, 5billion

22.4%

47.2%

71.1%

3

Executive summary (ALHA)

Q 1 Transfer Q1 - Exp Q 2 Transfer Q1 - Exp Q 3 Transfer Q1 - Exp -

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Western CapeNorth WestNorthern CapeMpumalangaLimpopoKwaZulu-NatalGautengFree StateEastern Cape

R428, 937

R160, 181

R963, 884

R312, 122

R1,613,529

R655, 172

32.4%

37.3%

40.6%

4

Executive summary (cont.) The Deeds Trading Account generates its own revenue. During the

financial year under review Department transferred R115.7 million to augment the budget for E – Cadastre Project.

As far as the KwaZulu-Natal Ingonyama Trust Board is concerned, spending on the 3rd Quarter of 2014-2015 fiscal year amounted to R10.9 million, representing 17.54% of their 2014-2015 budget of R62.7 million.

5

6

Per BranchR’000

Current budget Quarter 1 Spending % spent Q1 Quarter 2

Spending % spent Q2 Quarter 3 Spending % spent Q3 Under / (over)

Spending

1. Administration 1,348,752 263,687 19.6% 604,033 44.8% 926,340 68.7% 422,412

Ministerial Services 36,257 7,895 21.8% 18,028 49.7% 29,853 82.3% 6,404

Management 143,460 28,525 19.9% 65,229 45.5% 95,227 66.4% 48,233

Internal Audit 48,246 7,208 14.9% 16,111 33.4% 26,763 55.5% 21,483

Financial Services 381,508 59,988 15.7% 149,237 39.1% 268,899 70.5% 112,609

Corporate Services 446,815 87,912 19.7% 206,956 46.3% 283,214 63.4% 163,601

Provincial Co-ordination 292,466 72,158 24.7% 148,472 50.8% 222,385 76.0% 70,081

2. Geo-spatial & Cad Serv 745,806 130,708 17.5% 396,775 53.2% 549,302 73.7% 196,504

Nat Geomat Man Serv 573,703 101,026 17.6% 324,284 56.5% 429,205 74.8% 144,498

Spat Plan & Land Use Man 172,103 29,682 17.2% 72,491 42.1% 120,097 69.8% 52,006

3. Rural Development 2,011,619 349,989 17.4% 787,253 39.1% 1,209,743 60.1% 801,876

NARYSEC/SOYD 678,205 197,690 29.1% 347,538 51.2% 500,259 73.8% 177,946

RID 783,103 79,580 10.2% 241,683 30.9% 386,861 49.4% 396,242

REID 550,311 72,719 13.2% 198,032 36.0% 322,624 58.6% 227,687

4. Restitution 2,680,742 747,439 27.9% 1,324,680 49.4% 1,869,396 69.7% 811,346

5. Land Reform 2,668,386 623,881 23.4% 1,346,419 50.5% 2,164,495 81.1% 503,891

Land Redis and Dev 2,317,950 601,452 25.9% 1,274,081 55.0% 1,997,083 86.2% 320,867

Land Tenure and Admin 350,436 22,429 6.4% 72,338 20.6% 167,412 47.8% 183,024

Total 9,455,305 2,115,704 22.4% 4,459,159 47.2% 6,719,276 71.1% 2,736,029

7

Per Economic ClassificationR’000

Current budget Quarter 1 Spending % spent Q1 Quarter 2


Spending

Compensation of Employees

1,999,753 483,672 24.2% 981,504 49.1%

1,485,179 74.3% 514,574

Goods and services

1,626,309 407,559 25.1% 834,869 51.3%

1,229,988 75.6% 396,321

Interest and rent on land - 2,400 - 4,930 - 4,930 - (4,930)

Payments for fin assets 4 411 10264.3% 791 19771.6% 818 20451.4% (814)

Provincial and local gov. 71,839 52,278 72.8% 55,807 77.7% 56,967 79.3% 14,872

Dept. agencies and acc.

1,852,767 436,436 23.6%

1,097,878 59.3%

1,748,564 94.4% 104,203Foreign governments & int. org. 1,890 - 0.0% - 0.0% - 0.0% 1,890

Public corp. and priv. entities 1 5,604 560386.8% - 0.0% - 0.0% 1

Non-profit institutions 3,020 - 0.0% 755 25.0% 1,510 50.0% 1,510

Households

3,801,071 701,644 18.5%

1,423,062 37.4%

2,006,593 52.8% 1,794,478Buildings & other fixed structures 21,920 10,401 47.4% 4,898 22.3% 5,718 26.1% 16,202

Machinery and equipment 72,173 10,659 14.8% 21,638 30.0% 34,867 48.3% 37,306

Land and subsoil assets - 4,642 -! 32,748 - 139,765 - (139,765)

Software 4,558 - 0.0% 279 6.1% 4,376 96.0% 182

Total

9,455,305.00

2,115,703.80 22.4%

4,459,159.38 47.2%

6,719,276.06 71.1% 2,736,029

Unfunded Expenditure1. Interest and rent on land - R4, 9 million relates to court rulings in

Restitution Claims i.e. shortfall in respect of interest for the late payment of the first and second 50% of the purchase price and legal cost taxed in the matter of Broadview properties PTY LTD (R2, 5 million). Other interests paid by other branches mostly relates to overdue accounts i.e. SOYD (R87 549), SPLUM (R62 031), Land Redistribution and Development (R48 550).

2. Payments for financial assets is losses that have been written off in terms of financial procedure. Due to the unforeseen nature of this expenditure it cannot be budgeted for.

3. Land and Subsoil assets – relates to land purchased by Lands Claim Commission but not yet transferred to claimants – once transferred to claimants the expenditure will be recognised as a Household transfer where the budget is also allocated.

8

9

1. Administration

R’000

Current budget

Quarter 1 Spending % spent Q1 Quarter 2

Spending % spent Q2 Quarter 3 Spending

% spent Q3

Under / (over)

Spending

Compensation

682,413

150,559 22.1%

315,326 46.2%

477,516 70.0%

204,897

Goods and services

585,374 96,089 16.4%

261,097 44.6%

408,435 69.8%

176,939

Payments for fin assets

-

389 -

449 - 449 - (449)

Provincial and local gov.

124

2 1.5%

9 7.0%

12 9.8%

112

Dept. agencies and acc.

3,522

- 0.0%

- 0.0%

2,643 75.1%

879

Households 34,453

10,144 29.4%

17,735 51.5%

21,630 62.8%

12,823

Buildings & other fixed structures

21,900

1,281 5.8%

2,489 11.4%

5,718 26.1%

16,182

Machinery and equipment 20,966

5,223 24.9%

6,928 33.0%

9,937 47.4%

11,029

Total

1,348,752

263,687 19.6%

604,033 44.8%

926,340 68.7%

422,412

10

2. Geo-spatial and Cadastral ServicesR’000 Current budget

Quarter 1 Spending

% spent Q1 Quarter 2 Spending % spent Q2 Quarter 3

Spending % spent Q3Under / (over)

Spending

Compensation Of Employees 436,746

98,150 22.5%

201,497 46.1%

306,977 70.3%

129,769

Goods And Services 178,753

29,778 16.7%

77,335 43.3%

117,895 66.0%

60,858

Interest And Rent On Land -

62 -

77 -

77 -

(77)

Payments For Financial Assets -

5 -

31 -

32 -

(32)

Departmental Agencies & Accounts 113,194

1,903 1.7%

115,097 101.7%

115,097 101.7% (1,903)

Foreign Gov&International Organ

1,890 - 0.0% - 0.0% -

0.0%

1,890

Households (HH)

802

190 23.7%

465 58.0%

881 109.9%

(79)

Non Profit Institutions (NPI)

3,020 - 0.0%

755 25.0%

1,510 50.0%

1,510

Provincial And Local Governments

16 - 2.9%

1 7.3% 1 7.3%

15

Machinery And Equipment

6,827

619 9.1%

1,237 18.1%

2,455 36.0%

4,372

Software & Intangible Assets

4,558 - 0.0%

279 6.1%

4,376 96.0%

182

Total 745,806

130,708 17.5%

396,775 53.2%

549,302 73.7%

196,504

11

3. Rural Development

• Overspending for Compensation of Employees and Goods & Services is caused by reclassification of expenditure that relate to NARYSEC participants i.e. Monthly Stipends, Non Employee Travel and Training & Development expenditure.

• The following slide give a picture if the above-mentioned is factored into spending trends

R’000Current budget Quarter 1

Spending % spent Q1 Quarter 2 Spending % spent Q2 Quarter 3


Spending

Compensation Of Employees

267,349

114,089 42.7%

222,994 83.4%

333,648 124.8% (66,299)

Goods And Services

407,018

182,545 44.8%

300,267 73.8%

421,787 103.6%

(14,769)

Interest And Rent On Land

-

88 -

88 -

88

(88)

Payments For Financial Asset

-

- -

5 -

5

(5)

Households (HH) 1,328,863

30,759 2.3%

253,692 19.1%

450,969 33.9%

877,894


8,389

2,188 26.1%

2,382 28.4%

3,247 38.7%

5,142

Total 2,011,619

349,989 17.4%

787,253 39.1%

1,209,743 60.1%

801,876

12

3. Rural Development (After Reclassification)

• Unfunded Interest on land expenditure was caused by overdue accounts paid at NARYSEC National Office and Kwa Zulu Natal Province.

• Losses amounting to R4 889 have been written off.• Due to nature of interest and losses it is not budgeted for and will be offset by

savings under other line items at year end.

R’000 Current budgetQuarter 1 Spending


Spending% spent

Q3Under / (over)

Spending


267,349

61,935.73 23.2%

125,011 46.8%

194,417 72.7%

72,932

Goods And Services

211,859

78,785 37.2%

117,811 55.6%

155,018 73.2% 56,841


-

88 -

88

88 -

(88) Payments For Financial Asset

-

- -

5

5 -

(5)

Households (HH)

1,524,022

186,672 12.2%

534,130 35.0%

856,969 56.2%

667,053


8,389

2,188 26.1%

2,382 28.4%

3,247 38.7%

5,142

Total

2,011,619

349,989 17.4%

787,253 39.1%

1,209,743 60.1%

801,876

13

4. Restitution

R’000Current budget

Quarter 1 Spending


Spending% spent

Q3Under / (over)

Spending


313,259

61,113 19.5%

123,041 39.3%

187,772 59.9%

125,487

Goods And Services 266,259

67,490 25.3%

116,336 43.7%

144,130 54.1%

122,129


-

2,201 -

4,717 -

4,717 -

(4,717) Payments For Financial Asset

-

10 -

200 -

226 -

(226)

Households (HH)

2,051,439 609,801 29.7%

1,035,640 50.5%

1,372,707 66.9%

678,732

Provincial And Local Governments

20,979

1,143 5.4%

3,934 18.8%

4,966 23.7%

16,013

Land&Subsoil Assets

-

4,642 -

32,748 -

139,765 - (139,765)


28,806

1,039 3.6%

8,064 28.0% 15,113 52.5%

13,693

Total

2,680,742 747,439 27.9%

1,324,680 49.4%

1,869,396 69.7%

811,346

14

5. Land ReformR’000

Current budget

Quarter 1 Spending



Spending


299,986

59,761 19.9%

118,647 39.6%

179,266 59.8%

120,720

Goods And Services

188,905

31,656 16.8%

79,834 42.3%

137,741 72.9% 51,164


-

49 -

49 -

49 -

(49)

Payments For Financial Asset

4

6 159.7%

106 2644.1%

106 2644.1%

(102) Departmental Agencies & Accounts

1,736,051

428,937 24.7%

977,364 56.3%

1,630,824 93.9%

105,227

Households (HH)

385,514

50,750 13.2%

115,530 30.0%

160,406 41.6%

225,108 Provincial And Local Governments

50,720

51,132 100.8%

51,864 102.3%

51,988 102.5%

(1,268)

Public Corporations&Priv Ent

1

- 0.0%

- 0.0%

- 0.0%

1

Buildings & Other Fix Struct

20

- 0.0%

- 0.0%

- 0.0%

20


7,185

1,590 5,595

3,026 42.1%

4,115 57.3%

3,070

Total

2,668,386

623,881 2,044,505

1,346,419 50.5%

2,164,495 81.1%

503,891

AGRICULTURAL LAND HOLDING ACCOUNT (ALHA)

Financial Performance as at 31 December 2014

Executive summary1. ALHA expenditure performance as at 31 December 2014 amounted to

R655, 1 million or 38% of budget allocation amounting to R1, 718 billion. 2. This performance further reflected a R634 million or 36.9% under

spending of the linear target of 75%.3. Free State, Mpumalanga, Eastern Cape and Gauteng provinces are the

biggest contributors to this level of under – spending. Northern Cape is the only province that exceeded the set quarter spending target at it registered 82% spending performance

4. The rest of the other provinces’ spending performance was between 41 and 61% which is still unacceptably low

5. The level of under – spending is a direct reflection of how slow the programme is progressing towards the achievement of its land reform targets.

16

Per Province – Consolidation

17

R’000Quarter 1 Transfer


TransferQuarter 2 Spending

% spent Q2

Quarter 3 Transfer

Quarter 3 Spending

% spent Q3

Eastern Cape

67,506

8,944 13.2%

135,012

14,003 10.4%

202,518 59,505 29.4%

Free State

113,471

5,610 4.9%

216,992

11,256 5.2%

288,559 34,979 12.1%

Gauteng

39,882

6,741 16.9%

79,764

26,359 33.0%

119,646 55,735 46.6%

KwaZulu-Natal

36,000

38,769 107.7%

117,000

77,134 65.9%

198,000

122,754 62.0%

Limpopo

11,764

2,015 17.1%

37,627

7,483 19.9%

127,876 51,683 40.4%

Mpumalanga

46,820

20,984 44.8%

115,284

35,612 30.9%

282,654 38,733 13.7%

Northern Cape

28,112

2,772 9.9%

56,224

39,646 70.5% 84,336

108,840 129.1%

North West

66,695

73,320 109.9%

118,680

95,098 80.1%

206,157

143,671 69.7%

Western Cape

18,687

1,026 5.5%

87,301

5,531 6.3%

103,783 39,272 37.8%

Total

428,937

160,181 37.3%

963,884

312,122 32.4%

1,613,529

655,172 40.6%

DEEDS REGISTRATION TRANDING ACCOUNT


Deeds Offices1. Deeds Trading Account has generated R425 million, representing 68% of the

revised projected revenue of R629 million. The revenue generated includes a transfer amount received from the Department amounting to R14,9 million for salaries inflation as per ENE.

2. Expenditure as at 31 December 2014 amounts to R369 million, representing 61% of the revised projected budget of R605 million excluding E-cadastre.

3. Compensation of Employees expenditure amount to R299 million representing 67% of revised projected budget of R 449 million and under spending is due to 151 vacant posts according to 2014/15 recruitment plan where only 119 posts were reprioritised to be filled in the current financial year.

6. The Bank balances as at 31 December 2014 is R293 million.

Executive summary

19

E-Cadastre Project1. The grant amount of R 98,3 million received from the department was as per the

ENE. The amount of R122,8 million reflecting on the report is part of R164 million grant received in 2013/14 financial year that was transferred to deffered income account.

2. Expenditure under E-cadastre as at 31 December 2014 amounts to R37 million, representing 31% of the revised projected budget of R121,9 million.

3. Compensation of Employees E-cadastre expenditure amount to R6 million representing 40% of the projected budget of R15 million, the under spending is due to 120 contract workers who were expected to start working in April 2014 but only started in July 2014 and the structure is still under development.

4. The E-cadastre project was put on hold for few months and resulted in the under-spending of the budget.

Executive summary (cont.)

20

E-Cadastre Project6. Consultants, Financial and Management Advisory- Due to a delay in the re-

scoping and realignment of the outsourcing of services will only be done in January/February 2015. These will be to acquire contracts for the seven(7) streams and the transformation manager at Chief Director level and back scanning due diligence service, all costs are based on DPSA rates.

7. Maintenance and Repairs- The amount of R2 million will be paid to Stortech contingencies and maintenance as per SLA for one year, however some of the budget allocated for both EA and Data for E-cadastre project will not be utilised in this financial year as services are still being defined and requirements being gathered by Project Management team and business.

8. The amount of R 110,8 million was paid to Vulindlela infrastructure and has not been cleared to GL account because assets has not been commissioned.

Executive summary (cont.)

21

22


Current budget



Spending

Total Revenue (726,994)

(127,222) 17.00%

(382,600) 52.63%

(651,589) 89.63% (75,405)

Compensation 463,970

97,757 21.0%

201,971 43.5%

305,315 65.8%

158,655

Goods and services 262,700

15,048 6.0%

71,244 27.1%

100,816 38.4%

161,884

Total current spending

726,670

112,805 16.0%

273,215 37.6%

406,131 55.9%

320,539

Buildings & fixed structure

9,276

- 0.0%

- 0.0%

103 1.1%

9,173

Machinery & equipment

126,718

380 0.3%

5,194 4.1%

6,350 5.0%

120,368

Total assets

135,994

380 0.3%

5,194 3.8%

6,453 4.7%

129,541

Total

862,664

113,185 13.0%

278,409 32.3%

412,584 47.8%

450,080

(Surplus) / Deficit

135,670

(14,037) -10.3%

(104,191) -76.8%

(239,005) -176.2%

374,675

KWAZULU-NATAL INGONYAMA TRUST BOARD (ITB)


24


Current budget


Spending % spent Q2 Quarter 3 Spending

% spent Q3

Under / (over)

Spending

Compensation 17,889

3 903 21.82% 4187 23.41% 4 501 25.16%

13 388

Goods and services 39,613

2 660 6.71% 5010 12.65% 5 478 13.83%

34 135

Interest & rent on land 200

49 24.50% 16 8.00% 83 41.50%

117

Buildings & fixed structure 3,000

629 20.97% 111 3.70% 50 1.67%

2 950

Machinery & equip 1,500

170 11.33% 156 10.40% 418 27.87%

1 082

Software 500 - - - 0.00% 468 93.60%

32

Total 62,702

7 411 11.82%

9 480%

15.12%

10 998

17.54%

51 704

Thank You

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drdlr 3 rd quarter financial performance report: 2014-2015 presentation to the portfolio committee...

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