1. Report back on the review of budgetary allocation for Land Reform
Standing Committee on Appropriations
Friday, 2 September 2011
09h00-13h00
Committee Room V454, Old Assembly Wing

2. CONTEXT
The Committee requested the Department along with the National Treasury to meet with the intention to resolve challenges emanating from the spending trend of the Department .
The departments were also requested to review the budgetary allocation for the Land Restitution Programme.
The Committee also requested the department to provide a plan to improve Restitution and Land Reform expenditure performance.

3. Progress The meeting was held with National Treasury
The meeting discussed areas of concern regarding the department expenditure trends, and
agreed that funding needs will be provided through the MTEF process.
The project on verification of outstanding claims in the Regional Land Claims Commission(RLCC) has started, it will be completed by 31 March 2012.
Although this project is not yet completed, the department is in a better position to provide estimates based on the progress made to date for the MTEF.
Pre-MTEC discussions are scheduled for Tuesday 30 August 2011.

4. Approach followed
The allocation for 2011/2012, allows for finalization of 360 backlog claims and only 90 new claims. It is expected that in the outer years, the baseline allocation will not be sufficient to settle all targeted claims.
The department requested additional funding for year 1 of the 2012 MTEF period which amounts to R2.3 billion for the Restitution programme, with carry though costs for the period.
This will allow the department to settle approved claims and those claims were offers are already made.
And be able to do further research on the new claims on the outer years.

5. Impact on Land Reform
2011 ENE
R’000
Reprioritisation
MTEF
Additional
2013
2014
2015
4. Restitution
2,619,922
124,614
2,354,688
5,099,224
4,673,299
4,348,773
5. Land Reform
4,392,209
(1,072,978) - 
3,319,231
3,602,349
3,853,531
A review of strategic and costing exercises and the 2011 MTEF submission was performed by all programme managers which resulted in a R1 billion reprioritisation from the Land Reform programme. The allocation was made to different programmes
The approval of additional funding for restitution will ensure that no further shifting of funds is done within the Land Reform Programme. It is the last shifting which will normalize the budget of the department for improved service delivery.

6. Presentation of Financial Performance as at 25 August 2011 to Standing Committee on Appropriations

7. Performance per programme
2011
ENE
R’000
Shifting of funds
Current budget
Spending
Balance %
spent
1. Administration
606,104 -
252,374
353,730
41.6%
2. Geospatial and Cadastral Services
388,104
139,811
248,293
36.0%
3. Rural Development
441,276
139,281
301,995
31.6%
4. Restitution
2,497,293
527,789
1,969,504
21.1%
5. Land Reform
4,191,469
1,001,617
3,189,852
23.9%
TOTAL
8,124,246
2,060,872
6,063,374
25.4%

8. Performance per economic classification
2011
ENE
R’000
Shifting of funds
Current
Budget
Spending
Balance %
spent
Compensation of employees
1,395,670 -
402,803
992,867
28.9%
Goods and services
1,128,461
(7,268)
1,121,193
397,643
723,550
35.5%
Interest and rent on land
6,987
(6,987)
Payments for financial assets 10
(10)
Provincial and local municipalities 46 73
119 86 33
72.3%
Departmental agencies and accounts
2,767,805
758,087
2,009,718
27.4%
Public corporations and private entities 1
Foreign governments and international institutions
1,320
(40)
1,280
1,194
93.3%
Non-profit institutions
2,571
643
1,928
25.0%
Households
2,793,001 39
2,793,040
475,690
2,317,350
17.0%
Machinery and equipment
34,624
6,774
41,398
5,073
36,325
12.3%
Software and other intangible assets
747
422
1,169
Land and subsoil assets
12,656
(12,656)
TOTAL
8,124,246
2,060,872
6,063,374
25.4%

9. Conclusion
The Department has taken a strategic decision to prioritise financial compensation and state land.
A focus in the last quarter was to quantify claims on state land, there is no financial implication on such claims
The financial compensation are low in amount however there is a risk of paying fictitious beneficiaries, it is for this reason that control processes has been put in place which sometime may delay implementation.
We are continuously engaging National Treasury on challenges facing the department, and hope that the matters that resulted in continuous shifting of funds will be resolved.
Land restitution is complex, however the department remain committed to settle claims within a reasonable period with the limited resources available.

10. Thank you