DA: Statement by Lourie Bosman, Democratic Alliance shadow minister of agriculture, forestry and fisheries, on the Land Bank (21/08/2009)

21st August 2009

The Land Bank's 2008/09 Annual Report has revealed that it lost R16.5-million in fruitless and wasteful expenditure in the last financial year. The majority of the wasteful expenditure is as a result of "payroll-related payments" and the late payment of utility accounts. Furthermore and even more disturbing, the Land Bank has been unable to pinpoint who is responsible for the money lost.

The DA applauds the financial recovery that the Land Bank has been able to achieve so far, but this is overshadowed by this kind of maladministration.

In explaining the expenditure the Board of Directors argues that this misspent money was identified with the purpose of learning "...the root causes for its occurrence to prevent it in the future." However, and importantly, it also notes that while most of the fruitless and wasteful expenditure occurred before the start of the reporting period, "the Bank continues to waste money where capacity and process challenges remain."

As an example of this, the Board cites the fact that the Bank still incurs penalties and interest for late payment of payroll-related regulatory payments and late payment of utility accounts. One of the reasons for this is "a historical breakdown in governance structures and control..."

The Auditor-General did not qualify his audit opinion of the Land Bank but did highlight the R16.5-million as significant and problematic as well as a number of key problems.

Perhaps the most significant problem with this particular finding is that neither the Board of Directors nor the Auditor-General were able to determine who was responsible for the loss or to identify how the money might be recovered. This kind of lack of accountability is becoming a defining characteristic of public management in South Africa, where taxpayers' money is routinely misspent by public institutions without proper explanation or the necessary consequences.

The report cannot determine what the money was wasted on but there can be little doubt it wasn't farming.

Minister in the Presidency Trevor Manuel has been outspoken about the Land Bank recently asking opposition to stop pressurising the institution to release the names of those accused of corruption as these matters are "...complex and take a long time to be unravelled." That is all well and fine with regards to forensic investigations but what has been identified in the annual report is nothing more than a waste of public money and nor is it something particular to the Land Bank.

The DA's fruitless and wasteful expenditure monitor currently stands at R80-million; this latest example of poor governance will push it closer to R100-million.