1. (a) The DALRRD’s requested the National Treasury to retain the surplus from the 2019/20 financial year due to underspending on a number of projects for the following reasons.
2.
(b) The DALRRD, did not provide any proposed spending changes. The retained surplus is supposed to be spend during the 2020/21, during which the approval would be valid.
Table 1: List of commitments at the end of 2019/20
Commitment description |
Project term (years) |
Cash flow disbursement term |
Reason for slow spending |
Project budget (R’000) |
Project Surplus (R’000) |
Recapitalisation and Development projects |
5 |
1 year |
Non Accountability of previous disbursements |
122 436 |
122 436 |
Guarantees on Land Acquisition |
0.5 |
2 days after land registration by Deeds |
Lengthy negotiations on some projects between seller and department which concluded end of quarter 3 and beginning of quarter 4, after agreement projects have to go for conveyancing and registration process by Deeds Office. |
146 436 |
146 436 |
Contracted one Hectare one Household projects |
unlimited |
1 year |
Slow mobilization of the projects due to lengthy stakeholder consultation process. Disputes amongst beneficiaries These commitments are mainly second or third tranches, which are earmarked to be finalised this financial year. |
28 257 |
28257 |
Contracted Land Development Support |
5 |
1 year |
The Department had to request Section 66 and Section 72 approvals from Treasury to enter into contracts with ABSA and FNB for the purpose of mitigation the risk of farmers misusing the funds as experienced in the past with the RADP program. The approval was granted during December 2019. A team of Agricultural Engineers from DAFF were assembled and deployed to the farms to reassess the infrastructure. Transfers were made after receipt of the assessment report of relevant infrastructure required on farms. Some of these project assessments were only concluded in the current financial year. |
716 990 |
716 990 |
Contracted forensic audit |
1 |
I year |
Retention amount will be paid after close up report is received on forensic audit performed. |
1 710 |
1 710 |
Contracted project management |
1 |
30 days after receipt of invoice |
Balance for project will be paid after final review and sign off the close up report. |
477 |
477 |
Open Orders |
0.5 |
30 days after receipt of invoice |
Valuations for land acquisition projects not yet concluded. |
2 828 |
2 828 |
Total |
1 019 135 |
1 019 135 |
COVID Disaster Fund |
0.5 |
30 days after receipt of invoice |
Current financial year, funds received from department during 2019/20. |
513 844 |
513 844 |
Grand Total |
1 532 979 |
1 532 979 |