GAUTENG DEPARTMENT OF AGRICULTURE & RURAL DEVELOPMENT: Q2 FY 2024/25 Performance Report

GAUTENG DEPARTMENT OF AGRICULTURE, RURAL DEVELOPMENT AND ENVIRONMENT 2ndQuarterly Financial and Performance Report for 2024/25 FY: Presentation to the Portfolio Committee 19thof November 2024

Table of Contents Quarter 2 APP 2024/2025 Performance Overview of Performance (Agriculture, Rural Development) Overview of Performance (Environment) Quarter 2 Financial Performance Report Q2 Revenue Collected Q2 Payment of invoices

Q2 PERFORMANCE INFORMATION REPORT AGRICULTURE AND RURAL DEVELOPMENT

APP Performance : Quarter 2 2024/2025 72% APP Performance 4

Overview of Agriculture and Rural Development Q2 Performance 11 indicators 5 indicators not achieved 6 indicators achieved 35 indicators 8 indicators not achieved 27 indicators achieved 55% 77% 5 Agriculture and Rural Development Administration

Areas of Performance 6

Achievements Administration 55% Achievements % Achievement against Annual Target 100% (100%) Reduction in irregular expenditure 100% 59% (40%) total procurement that targets businesses owned by Women 59% 31% (30%) total procurement that targets businesses owned by Youth 31% 100% (100%) procurement implemented through the open tender system 100% 5 046 (5000) Work opportunities created through Tshepo 1 million 98% 98% (90%) Ntirhisano commitments achieved 96% 7

Achievements Agriculture 77% Achievements % Achievement against Annual Target 53 (30) Farm management plans were developed. 80% 1 (1) Awareness campaigns on disaster risk reduction was conducted. 50% 1 (1) Surveys on uptake for early warning information was conducted. 50% 15 (15) Women producers were supported with vegetable and piggery production inputs. 25% 30 (30) Smallholder producers were supported with vegetable and piggery production inputs. 14% 28 (29) Smallholder producers were supported with vegetable and piggery production inputs. 39% 349 (220) Participants were trained in skills development programmes in the sector. 79% 664 (420) Capacity building activities were conducted for smallholder producers. 78% 37 (20) Capacity building activities were conducted for smallholder producers to be commercialized. 76% 6 457 (3 750) Cases attended to at Themba animal clinic. 65% 4 846 (4000) Veterinary certificates were issued for export facilitation. 59% 273 (250) Inspections were conducted on facilities producing meat. 53% 8

Achievements Agriculture 77% Achievements % Achievement against Annual Target 664 (420) Capacity building activities were conducted for smallholder producers. 78% 37 (20) Capacity building activities were conducted for smallholder producers to be commercialized. 76% 6 457 (3 750) Cases attended to at Themba animal clinic. 65% 4 846 (4000) Veterinary certificates were issued for export facilitation. 59% 273 (250) Inspections were conducted on facilities producing meat. 53% 230 (125) Samples were collected for targeted animal diseases surveillance. 86% 99% (75%) VPH and Exports clients satisfied with the quality of service received from the customer satisfaction survey. 99% 9

Achievements Agriculture 77% Achievements % Achievement against Annual Target 10 (10) Agribusinesses SMMEs were supported with Business Incubation. 50% 3 (2) Research presentations were made at technology transfer events. 63% 1 741 (1 000) Hectares were worked by GDARDE tractors. 61% 146 (120) Clients were supported with production economic services 68% 77 (60) Agri-businesses were supported with marketing services. 77% 102 (10) Micro home-based agro-processing enterprises were supported in TISH. 57% 85 (70) Capacity development initiatives were undertaken targeting agroprenuers. 55% 150 (125) Agricultural economic information responses were provided. 59 % 4 (3) Economic reports were compiled. 58% 27 (20)Agribusinesses supported with Black Economic Empowerment advisory services 170% 229 (150) businesses supported through enterprise supplier and development programme 46% 6 (5) Transformation agreements monitored in the five agriculture/agro-processing priority sectors 220% 10 (6) Stakeholders contributing to the implementation of the Rural Development Program 167% 10

Areas of Non-Performance 11

Administration Outputs/ key deliverables Annual Target Quarter 2 Target Actual Q2 Performance Average Variance Progress to date Against AT 100% Invoices paid within 10 100% 53% -47% 83% working days of receipt (85% of Invoices were paid within 30 days of receipt, and 57% of all invoices received were paid within 15 days) Reason for deviation Corrective Measures Cash flow issues were experienced from April 2024, because of the 6000 EPWP workers stipends being paid from Goods and Services Budget. This impacted on the cash flow availability to pay suppliers invoices The Department has escalated the cash flow issues to Provincial Treasury 12

Administration Outputs/ key deliverables Annual Target Quarter 2 Target Actual Q2 Performance Average Variance Progress to date Against AT Department spend in township 40% 40% 20% -20% 20% Total procurement that targets businesses owned by Military Veterans 0.2% 0.2% 0% -0.2% 0.2% Total procurement that targets businesses owned by Persons with Disabilities (PwDs) 7% 7% 2.2% -4.8% 2.2% Clean audit outcome obtained from the Auditor-General Clean Audit Clean Audit Unqualified Audit Unqualified Unqualified Reason for Deviation Corrective Measures Although the Department targeted township based businesses as well as businesses owned by designated groups when request for procurement for </= R1000 000 are made, the department did not achieve its set targets as was anticipated. During the reporting period under review, most of the targeted groups were found to be non-tax compliant. The Department appointed a task team incorporating BBBEE unit, transformation and SCM, to draft a plan to address challenges with regards to targets in relation to township-based businesses and preferential procurement for designated groups. There was a material adjustment to the annual performance report and non- compliance to legislation, which prevented the department from achieving a clean audit. Implement the AGSA 2023/24 audit improvement plan in order to achieve clean audit in 2024/25 FY. 13

Agriculture and Rural Development Outputs/ key deliverables Annual Target Quarter 2 Target Actual Q2 Performance Average Variance Progress to date Against AT Hectares of cultivated land under Conservation 80 20 0 -20 0 Agriculture practices Green jobs created 650 100 0 -100 0 Hectares of agricultural land rehabilitated 1 450 350 0 -350 0 Reason for deviation Corrective Measures Landcare had no adequate funds to execute conservation agriculture projects. National Grant Funds were transferred in the last month of Quarter 2 (September 2024) Accelerated procurement plan is in place and procurement for land care has been prioritized by SCM 14

Agriculture Outputs/ key deliverables Annual Target Quarter 2 Target Actual Q2 Performance Average Variance Progress to date Against AT Producers supported in the Red Meat Commodity 20 5 0 -5 0% Subsistence women producers supported 5 000 1 500 348 - 1 152 7% Subsistence producers supported 12 000 4 000 505 - 3 495 4% Reason for Deviation Corrective Measures Delays with the approval for constructing cattle handling facilities for red meat producers by DALRRD. The approved Departmental rollover flowing from the previous financial year will be used to effect payment of the appointed service provider The set targets towards support of subsistence farmers could not be achieved due to delays in the approval of the Presidential Employment Stimulus (PES 3) business plan proposal (allocation of R53 million) as submitted to DALRRD. The Department is currently engaging with DALRRD on the process and procedures of transfers towards approval of the business plan proposal on Presidential Employment Stimulus, of allocated funds to a total of R53 million. Budget will be provided in Q3 to ensure more subsistence producers are supported and the annual target is achieved. 15

Agriculture and Rural Development Outputs/ key deliverables Annual Target Quarter 2 Target Actual Q2 Performance Average Variance Progress to date Against AT Visits to epidemiological units for veterinary 5 500 2 000 1 945 -55 70% interventions Laboratory tests performed according to approved 25 000 10 000 9 658 -342 94% standards Reason for deviation Corrective Measures Due to the delay in procurement of vaccines, bleeding tubes and tuberculin, and the lack of resources to buy the usual number of vaccines and other equipment, farm visits have been decreasing slowly over the quarter. GVS Animal Health is in the process of making a CASP submission for the procurement of vaccines and consumables. (The collective target for Q1 and Q2 has already been met and overachieved) The number of laboratory tests performed according to prescribed standards is dependent on field personnel collecting samples, disease outbreaks and the laboratory processing the samples and reporting on the results. There was an over collection of samples in Q1 and thus the accumulated total target for Q1 and Q2 has been met. Additionally, performance on this target will be monitored to ensure the quarterly targets are met and a balance between the budget and the number of samples required maintained 16

Q2 PERFORMANCE INFORMATION REPORT ENVIRONMENT

Purpose To present the Environment APP Performance for Q2 2024/2025 The report will outline areas of performance and non-performance and planned mitigation thereof 18

Environment APP Performance : Quarter 2 67% APP Performance 19

Overview of Environment Quarter 2 Performance 11 indicators 5 indicators not achieved 6 achieved 13 indicators 3 indicators not achieved 10 indicators achieved 55% 77% 20 Administration Environment

Areas of Performance 21

Program me Achievements % Achievement against Annual Target 100% Administration 100% (100%) Reduction in irregular expenditure 59% 59% (40%) total procurement that targets businesses owned by Women 55% 31% 31% (30%) total procurement that targets businesses owned by Youth 100% 100% (100%) procurement implemented through the open tender system 98% 5 046 (5000) Work opportunities created through Tshepo 1 million 96% 98% (90%) Ntirhisano commitments achieved 22

Programme Achievements % Achievement against Annual Target 50% 28 (25) Administrative enforcement notices issued for non-compliance with environmental management legislation. 9 (9) Completed criminal investigations were handed to the NPA for prosecution. 50% 93 (75) Compliance inspections were conducted. 70% 100% (100%) Complete S24G applications were finalized within 60 working days of the date of receipt of proof of payment of 100% Environmental Management section 24G administrative fine. 100% (100%) Completed atmospheric emission licenses were issued within legislated timeframes. 100% 100% (100%) Complete Waste License applications were finalised within legislated time-frames. 100% 335 (163) Waste Certificates were issued. 80% 77% 17 (10) Health Care Waste Approvals were issued 60% 26 (15) Environmental capacity building activities were conducted. 76% 184 (70) Environmental awareness activities were conducted. 138% 23

Areas of Non-Performance 24

Administration Outputs/ key deliverables Annual Target Quarter 2 Target Actual Q2 Performance Average Variance Progress to date Against AT Invoices paid within 10 working days of receipt (85% of Invoices were paid within 30 days of receipt, and 57% of all invoices received were paid within 15 days) 100% 100% 53% -47% 83% Reason for Deviation Corrective Measures Cash flow issues were experienced from April 2024, because of the 6000 EPWP workers stipends being paid from Goods and Services Budget. This impacted on the cash flow availability to pay suppliers invoices. The Department has escalated the cash flow issues to Provincial Treasury . 25

Administration Outputs/ key deliverables Annual Target Quarter 2 Target Actual Q2 Performance Average Variance Progress to date Against AT Department spend in township 40% 40% 20% -20% 20% Total procurement that targets businesses owned by Military Veterans 0.2% 0.2% 0% -0.2% 0.2% Total procurement that targets businesses owned by Persons with Disabilities (PwDs) 7% 7% 2.2% -4.8% 2.2% Clean audit outcome obtained from the Auditor- General Clean Audit Clean Audit Unqualified Audit Unqualified Unqualified Reason for Deviation Although the Department targeted township based businesses as well as businesses owned by designated groups when request for procurement for </= R1000 000 are made, the department did not achieve its set targets as was anticipated. During the reporting period under review, most of the targeted groups were found to be non-tax compliant. Corrective Measures The Department appointed a task team incorporating BBBEE unit, transformation and SCM, to draft a plan to address challenges with regards to targets to targets in relation to township-based businesses and preferential procurement for designated groups Implement the AGSA 2023/24 audit improvement plan in order to achieve clean audit in 2024/25 FY. There was a material adjustment to the annual performance report and non-compliance to legislation, which prevented the department from achieving a clean audit. 26

Environment Management Outputs/ key deliverables Annual Target Q2 Target Actual Q2 Performance Average Variance Progress to date Against AT Percentage of complete EIA applications finalized within legislated timeframes 100% 100% 96% -4% 96% Complete biodiversity management permits were issued within legislated timeframes. 90% 90% 86% -4% 86% Trees (greening) planted 300 000 150 000 28 379 -121 621 9% Reason for Deviation Corrective Measures Ten applications were completed outside the stipulated time frames, due to the internal administrative errors. Introduction of centralized database/spreadsheet of all applications to enable managers to track files that are likely to be out of the timeframe. Weekly updates of applications that requires extensive consultation with other Directorates will also be introduced. Intermittent/unstable SITA network connectivity to access National systems Prompt reports of incidents by system end users There was no enough budget to procure the required number of trees for Q2. More funds are needed to procure more trees to cover the shortfall. 27

Q2 FINANCIAL PERFORMANCE REPORT 30th of September 2024

29 BUDGET VS EXPENDITURE AS AT 30th of SEPTEMBER 2024 Projected Budget for the 2nd Quarter under review Actual Expenditure for the Q2 Under review Percentage Expenditure for the Q2 Under review Variance for the Q2 Under review Actual Expenditure (Year to Date) Appropriation Variance % spent Programme Programme 1: Administration Programme 2: Agriculture and Rural development Programme 3: Environmental Affairs 65,484 69,487 - 4,003 106% 281,360 137,723 143,637 49% 120,735 126,389 - 5,654 105% 459,945 195,773 264,172 43% 75,846 75,515 331 100% 293,835 178,920 114,915 61% TOTAL 262,065 271,391 - 9,326 104% 1,035,140 512,416 522,724 50% ECONOMIC CLASSIFICATION Compensation of Employees 154,353 153,052 1,301 99% 622,500 305,588 316,912 49% Goods and Services Transfers and Subsidies Payments for Capital Assets Payments for Financial Assets 99,539 505 7,668 117,453 - 17,914 371 595 - 118% 73% 8% 381,603 8,002 23,035 204,222 1,496 1,110 177,381 6,506 21,925 54% 19% 5% 134 7,073 0 0 - TOTAL 262,065 271,471 - 9,406 104% 1,035,140 512,416 522,724 50%

BRIEF SUMMARY OF THE UNDER/OVER EXPENDITURE PER POGRAMME 2nd Quarter Target Progress: - The Department Projected Expenditure is R262 million, spent R271 Million which equates to 104% in the second quarter. Annual Expenditure to Date: - The department s total allocated budget is R1 035 billion. Overall, the department has spent R512 million that is equivalent to 50% of its total allocated budget for 2024/25 financial year. - Administration (Programme 1) has spent R138 million that is equivalent to 49% of its allocated budget. - Agriculture and Rural Development (Programme 2) has spent R196 million that is equivalent to 43% of its allocated budget . The under expenditure is due to Conditional Grant Business plans that were only approved towards the end of June 2024, due to the internal departmental processes that took longer to finalize. The Department has received 1st tranche of R37 million for CASP and R9 million for Illima/Letsema grant. Land care grant has received 1st tranche of R2 million in September and EPWP Incentive grant of R1 million invoices will be processed for payments in October for the Alien Vegetation Control project.

BRIEF SUMMARY OF THE UNDER/OVER EXPENDITURE PER POGRAMME Annual Expenditure to Date: Environmental Affairs (Programme 3) has spent R179 million that is equivalent to 61% of its allocated budget. The over expenditure can be attributed to the payment of Stipend of the EPWP Beneficiaries for April and May 2024 (Contract ended on 31 May 2024). No Budget was allocated for these 6000 EPWP Beneficiaries, this has remained an Unfunded Mandate.

BRIEF SUMMARY OF THE UNDER/OVER EXPENDITURE PER ECONOMIC CLASSIFICATION Compensation of Employees: 2nd Quarter Target Progress: The Department projected expenditure for the second quarter is R154 million, spent R153 million which is equates to 99% in the first quarter. This is in line with the straight- line projection for the first quarter of Financial Year. Annual Expenditure to Date: The department has spent R305 million of its R622 million allocated budget, which is equivalent to 49% of its allocation. This is in line with the straight-line protection over the 12 months.

BRIEF SUMMARY OF THE UNDER/OVER EXPENDITURE PER ECONOMIC CLASSIFICATION Goods and Services: 2nd Quarter Target Progress: - The Department projected expenditure for 2nd quarter is R99 million, spent R117 million which is equates to 118% in the second quarter. The 18% over expenditure can be attributed to the extension of the EPWP works contract for 3 Months. Annual Expenditure to Date: - The Department has spent R204 Million of its R381 million allocated budget that is equivalent to 54% of its allocation. - The Department is currently experiencing Cash flow issues and is unable to pay its Service Providers within the 30-Day period. - The main issues contributing to the Cash flow problems can be attributed to the payment of the monthly EPWP Beneficiaries Stipend amounting to R16 Million, with the expenditure defrayed from the Goods and Services Budget. (EPWP contract came to an end on 31st May 2024 but extended until 31st of August 2024). - Engagements between the Department and GPT are on-going to find a more workable solution.

TRANSFERS 30th of SEPTEMBER 2024 Original Budget Balance % Expenditure Transfers R'000 R'000 R'000 330 262 68 79% Provinces and Municipalities 1,688 1,688 0% Departmental agencies and accounts 4,000 4,000 0% Higher education institutions 1,984 1,234 750 62% Households 8,002 1,496 6,506 19% Total

BRIEF SUMMARY OF THE UNDER/OVER EXPENDITURE PER ECONOMIC CLASSIFICATION Transfers and Subsidies: 2nd Quarter Target Progress: - The Department projected expenditure for the second Quarter is R505 thousand and, spent R371 thousand which is equates to 73%. Annual Expenditure to Date: The department has spent R1 million of its R8 million allocated budget that is equivalent to 19% of its allocation. The expenditure relates to transfers to municipalities of R93 thousands, gratuity payments of R704 thousands and R530 thousands for external bursaries. The transfers expenditure will increase in the 3rd quarter of the 2024-2025 financial year.

CAPITAL EXPENDITURE 30th of SEPTEMBER 2024 Original Budget Balance % Expenditure R'000 R'000 R'000 23,035 1,110 21,925 5% Payment for Capital Assets 23,035 1,110 21,925 5% Total

INFRASTRUCTURE EXPENDITURE 30th of SEPTEMBER 2024 Original Budget Balance % Expenditure Infrastructure R'000 R'000 R'000 5,210 0 5,210 0% Upgrade and additions 5,210 - 5,210 0% Building & other fixed structures 187 187 0% Maintenance and Repairs 17,743 6,023 11,720 34% Internal Capacity Building Programme 23,140 6,023 17,117 26% Total

BRIEF SUMMARY OF THE UNDER/OVER EXPENDITURE PER ECONOMIC CLASSIFICATION Payments for Capital Assets: 2nd Quarter Target Progress: - The Department projected expenditure for the second quarter is R7 Million, spent R 595 thousand which is equates to 8% in the first quarter. Annual Expenditure to Date: - The department has spent R1 million of its R23 million allocated budget, which is equivalent to 5% of its allocation. Payments for Infrastructure: Upgrade and additions - The 0 expenditure Upgrade and additions can be attribute to: All capital project are impended by DBSA. There is a delay in concluding memorandum to appoint the Development Bank of Southern Africa (DBSA), to finalise the key projects and it is hindering the progress of existing projects. Payments for Internal Capacity Building Programme The department has spent R6 million on its R23 million allocated budget, which is equivalent to 26% of its budget allocation. The expenditure is for compensation of employees, goods and services and gratuity payment.

GDARD CONDITIONAL GRANTS 30th of SEPTEMBER 2024 Original Budget Balance % Expenditure Conditional Grants R'000 R'000 R'000 18,848 6,278 12,570 33% CASP: ERP 86,517 815 85,702 1% CASP: Infrastructure 105,365 27,540 7,093 7,502 98,272 20,038 7% 27% Total CASP Illima/Letsema 5,501 289 5,212 5% Land Care 3,055 3,055 0% EPWP: incentive grant 141,461 14,884 126,577 11% Total

CONDITIONAL GRANTS RECEIVED 31 OCTOBER 2024 Grants Received Expenditure to date Available Balance % Conditional Grants R'000 R'000 R'000 6,785 6,278 570 93% CASP: ERP 31,146 815 30,961 3% CASP: Infrastructure 37,931 7,093 9,771 19% Total CASP 9,914 7,502 2,412 76% Illima/Letsema 2,475 764 289 2,186 764 12% 0% Land Care EPWP: incentive grant - 51,084 14,884 36,200 29% Total 4 0

BRIEF SUMMARY OF THE UNDER/OVER EXPENDITURE CONDITIONAL GRANTS Annual Expenditure to Date: - The department has spent R15 million of its allocated budget of R141 million for conditional grants which is equivalent to 11% of its allocation. Expenditure includes CASP graduate s programmestipends and Agricultural advisors. It must be noted that the Conditional Grant Business plans has been approved in July. The Department has received 1st tranche of R37 million for CASP and R9 million for Illima/Letsema grant. Land care grant has received 1st tranche of R2 million in September and EPWP Incentive grant received 1st tranche of R764 thousand, and no expenditure is recorded, R1 million invoices will be processed for payments for the Alien Vegetation Control project. -

GDARDE REVENUE REPORT 30th of September 2024

DEPARTMENTAL REVENUE ANALYSIS 30th September 2024 Main Collection as at 30 SEPTEMBER R'000 Available balance Appropriation 2024/25 R'000 Source of Revenue % R'000 Sales of Goods and Services other than Capital Assets Fines,Penalties and Forfeits Interest, Dividends and Rent on Land Sales:Machinery & Equipment Financial Transactions in Assets and Liabilities Total 12,299 4,169 6,936 2,499 5,363 1,670 56% 60% 0% 9 0 9 5 -5 334 1,558 10,998 -1,224 5,813 466% 65% 16,811 The Department has collected R11M of its R16 M projected revenue collection, which is equivalent to 65% of its total projection. Revenue collected is on domestic services, rental dwellings, staff parking, environmental application fees, domestic fines and recovery of previous years expenditure.

GDARDE PAYMENT OF INVOICES WITHIN 10, 15 AND 30 DAYS AT 30th of September 2024

10-, 15- AND 30-DAY PAYMENT REPORT - 2024/2025 Month 10 Day 15 Day 30 Day 99% 98% 100% Apr-24 68% 73% 100% May-24 82% 80% 100% Jun-24 83% 84% 100% 1st Quarter 76% 81% 99% Jul-24 45% 46% 77% Aug-24 39% 45% 78% Sep-24 53% 57% 85% 2nd Quarter 45

REASON FOR DEVIATION - 10 DAY PAYMENTS 2nd Quarter 2024-2025 The Department during the 2nd Quarter of the 2024-2025 Financial year manage to pay 85% of Invoices within 30 days, 57% of all invoices received were paid within 15 days and 53% within the 10 working days. Reason for Deviation: The main reasons for exceeding the 10, 15 and 30 Days were due to the following: - The Cash Flow issues experience from April 2024, the 6000 EPWP workers stipend are being paid from Goods and Services Budget, this impacted on the Cash Flow Availability to pay suppliers invoices. Mitigations: - The Department escalated the Cash Flow issues to Provincial Treasury for assistance. 46

GDARDE UNAUTHORISED, IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE AS AT 30th OF September 2024 47

POSSIBLE UNAUTHORISED, IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE FOR THE CURRENT FINANCIAL YEAR 1st Quarter Item Amount Intervention Challenges Unauthorised None - - Fruitless and Wasteful Expenditure None - - Irregular Expenditure None - -

UNAUTHORISED, IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE PREVIOUS FY Item Amount Intervention Challenges Unauthorised - - - Fruitless and Wasteful Expenditure 49,693 Matters were referred to Risk Management Unit to facilitate investigation thereof No dedicated budget for investigation. GDARDE to prioritise budget for investigation and appoint a panel of service providers. GDARDE did submit request for condonation to GPT of 7 Cases amounting to R44,6 million, but were not condoned, indicating that Consequence management was not implemented. Most of these Officials implicated have left the employment of GDARDE. Former HOD did transfer these matters to the Accounting Officers where these Officials are currently employed to take disciplinary action. Irregular Expenditure 88,133 Matter were referred to Risk management Unit for Investigation and Condonement

IRREGULAR EXPENDITURE PREVIOUS FINANCIAL YEAR The Department incurred irregular expenditure for the previous Financial years: 2015-2019 FY - R85 709 348,06 2022-2023 FY - R2 423 992,87 Total Irregular expenditure for GDARDE amount to R88,133 340,93