Over R500m in grants to farmers unaccounted for at Agriculture Land Holdings Account

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Thoko Didiza
Thoko Didiza
  • The Agriculture Land Holdings Account (ALHA) cannot account for the more than R500 million it paid to farmers in grants.
  • This is why ALHA's audit opinion regressed to a qualified audit with findings.
  • The former Department of Rural Development and Land Reform obtained an unqualified audit with findings.

The Agriculture Land Holdings Account (ALHA) cannot account for more than R500 million - about a quarter - of the conditional grants it paid to farmers in the 2019/2020 financial year, the Auditor-General of South Africa (AGSA) found.

The AGSA presented its findings on the former Department of Rural Development and Land Reform and ALHA to the Portfolio Committee on Agriculture, Land Reform and Rural Development.

In January, the committee heard department could not submit the former Department of Rural Development and Land Reform's annual report by the extended deadline, because the ALHA was still working with the AGSA and National Treasury to finalise its financial statements.

The department obtained an unqualified audit with findings for the fifth year in a row, while the ALHA regressed from an unqualified audit with findings to a qualified audit with findings.

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The AGSA provided the following reason for the qualification: "Management did not adequately assess the grants that had indicators that monies needed to be repaid back by beneficiaries who did not comply with the grant agreement terms and conditions. This was mainly as a result of inadequate monitoring of the grant expenditure."

On 31 March 2019, R1.726 billion out of R2,292 billion was reconciled and confirmed by the ALHA that monies were used as per the business plans.

The reasons for this were the following:

  • Inadequate project management and monitoring by the entity.
  • Poor record keeping by the entity where some farmers provided information to provincial offices.
  • Farmers who are not co-operative or not responsive.
  • Funds not used for the intended purpose as per the approved business plans.
  • The AGSA noted the ALHA in previous years explored various avenues to determine the extent of the grants that must be repaid or what legal steps could be pursued to recover the monies.

"From our audit, we identified several indicators that support that some of the funds are owed to the entity in line with the conditions set in the grant contracts. Therefore, a detailed assessment should have been performed and these funds be accounted for accordingly," read the AGSA report to the committee.

The AGSA found both the department and ALHA "did not take effective and appropriate steps to prevent irregular expenditure".

Agriculture, Land Reform and Rural Development Minister Thoko Didiza said before the presentation, internal controls were a "huge challenge" and she asked the Special Investigating Unit (SIU) to investigate.

She added repeated findings should not become the norm.

After the presentation, committee chairperson Mandla Mandela said if any officials were involved in any wrongdoing, they should meet the full might of the law, and the money should be recovered.

The committee will engage with the department on the annual report at a later date.

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