Democratic Alliance (Cape Town)

4 July 2014

South Africa: Wasteful Expenditure Slows Down Land Reform

press release

A recent reply to a DA Parliamentary question has revealed that the Department of Rural Development and Land Reform has lost R 205 415 000.00 in irregular, fruitless and wasteful expenditure between April 2009 and 31 March 2014.

As the Department central to the implementation of South Africa's land restitution programme and with a new round of land restitution claims on the horizon, wasteful expenditure at the Department only serves to delay relief to victims of dispossession under apartheid.

We recognise that people who were deprived of the right to lodge a verifiable land claim before the 1998 deadline should not be penalised because of the State's inefficiency.

The DA also supports an orderly land reform programme that compensates people for verified past dispossession. We believe that if well managed, land restitution will boost the rural economy and promote justice.

The prevalence of irregular, fruitless and wasteful expenditure within the Department only serves to undermine these goals.

In the 2010/2011 financial year, the Department incurred R 34 252 443,67 worth of irregular expenditure from restitution projects within the Rural Infrastructure Development Branch.

During the same period, the Department succeeded in racking up a total of R73 406 000.00 in fruitless and wasteful expenditure resulting from needlessly incurred land restitution interest payments.

Land restitution projects in KwaZulu-Natal and Mpumalanga each incurred an excessive R17 078 014.02 and R24 481 056.24 in fruitless and wasteful expenditure associated with land restitution interest payments respectively.

These recent revelations indicate that the department is besieged by financial mismanagement.

It has shown little impetus to introduce the reform needed to correct this mismanagement.

In fact, government's response reveals that hardly any officials within the Department have been held accountable for the massive losses.

Indeed, In July 2013, letters were issued by the Director-General (DG) to Deputy Director-General's (DDG) requesting they account for the non-compliance cases. These cases related to financial years ending 2009/10 to 2011/12 which were fully condoned by the DG - that amounts to 367 instances of condoned irregular, fruitless and wasteful expenditure.

It seems likely that the tax payer will be expected to foot the bill for the Department's poor management and inefficiency. This comes as cases of financial mismanagement relating to the 2012/13 and 2013/14 financial years are still under investigation.

Faced with a weak economy and increasing budgetary constraints, now is not the time to allow rampant wasteful expenditure within any state institution.

The DA will be submitting further questions to seek clarity on:

The Department's reason for condoning case of irregular, fruitless and wasteful expenditure;

What measures were instituted, in each year under review, to prevent irregular, fruitless and wasteful expenditure within the Department and its projects; and

Progress that has been made in finalising ongoing investigations into irregular, fruitless and wasteful expenditure for the years 2012/13 and 2013/14 respectively.

Furthermore the DA will raise this matter in the upcoming EPC debates and provide our policy alternatives for reform.

The waste of public money takes valuable resources away from needed projects, such as land restitution, and deprives countless South Africans of services which they rightly deserve.

The DA will continue to hold the executive to account and ensure that the public purse is used to its benefit for all South Africans.

Thomas Walters, Shadow Minister of Rural Development and Land Reform

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