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1NORTH WEST PROVINCIAL LEGISLATURE - ANNUAL REPORT 2015/16 1NORTH WEST PROVINCIAL LEGISLATURE - ANNUAL REPORT 2015/16

Annual Report

PILEDIWA E A LWELWA

north west provincial legislature

2 NORTH WEST PROVINCIAL LEGISLATURE - ANNUAL REPORT 2015/16

CONTENTS

PART A GENERAL INFORMATION

1. DEPARTMENT GENERAL INFORMATION ............................................ 4

2. LIST OF ABBREVIATIONS/ACRONYMS ............................................... 5

3. FOREWORD BY THE SPEAKER ............................................................ 6

4. OVERVIEW OF THE ACCOUNTING OFFICER ......................................... 7

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF

ACCURACY FOR THE ANNUAL REPORT .............................................. 9

6. STRATEGIC OVERVIEW ..................................................................... 10

6.1. VISION .............................................................................................. 10

6.2. MISSION............................................................................................ 10

6.3. VALUES ............................................................................................. 10

6.4. STRATEGIC OUTCOME ORIENTATED GOALS ..................................... 10

7. LEGISLATIVE AND OTHER MANDATES .............................................. 11

8. ORGANISATIONAL STRUCTURE ........................................................ 18

9. ENTITIES REPORTING TO THE SPEAKER .......................................... 19

PART B PERFORMANCE INFORMATION

1. AUDITOR GENERAL’S REPORT:

PREDETERMINED OBJECTIVES ........................................................ 21

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE .............................. 21

2.1. SERVICE DELIVERY ENVIRONMENT ................................................. 21

2.2. SERVICE DELIVERY IMPROVEMENT PLAN ....................................... 21

2.3. ORGANISATIONAL ENVIRONMENT .................................................... 21

2.4. KEY POLICY DEVELOPMENTS AND LEGISLATIVE CHANGES ............ 24

3. STRATEGIC OUTCOME ORIENTED GOALS ......................................... 24

4. PERFORMANCE INFORMATION BY PROGRAMME ............................ 25

4.1. PROGRAMME 1: ADMINISTRATION .................................................. 25

4.2. PROGRAMME 2: MEMBER’S EXPENDITURE ..................................... 31

4.3. PROGRAMME 3: PARLIAMENTARY SUPPORT ................................... 32

5. TRANSFER PAYMENTS...................................................................... 38

5.1. TRANSFER PAYMENTS TO PUBLIC ENTITIES.................................... 38

5.2. TRANSFER PAYMENTS TO ALL ORGANISATIONS OTHER

THAN PUBLIC ENTITIES .................................................................... 38

6. CONDITIONAL GRANTS ..................................................................... 39

6.1. CONDITIONAL GRANTS AND EARMARKED FUNDS PAID .................. 39

6.2. CONDITIONAL GRANTS AND EARMARKED FUNDS RECEIVED ......... 39

7. DONOR FUNDS .................................................................................. 39

7.1. DONOR FUNDS RECEIVED ................................................................. 39

8. CAPITAL INVESTMENT ...................................................................... 39

8.1. CAPITAL INVESTMENT, MAINTENANCE AND

ASSET MANAGEMENT PLAN ............................................................ 39

PART C GOVERNANCE

1. INTRODUCTION .......................................................................... 41

2. RISK MANAGEMENT .................................................................. 41

2.1. INTRODUCTION .......................................................................... 41

2.2. RISK MANAGEMENT ACTIVITIES .............................................. 41

3. FRAUD AND CORRUPTION ....................................................... 42

4. MINIMISING CONFLICT OF INTEREST ........................................ 42

5. CODE OF CONDUCT ................................................................... 43

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES ....................... 43

7. PORTFOLIO COMMITTEES ......................................................... 43

8. SCOPA RESOLUTIONS ................................................................ 44

9. PRIOR MODIFICATIONS TO AUDIT REPORTS ............................. 44

10. INTERNAL CONTROL UNIT ......................................................... 44

11. INTERNAL AUDIT AND AUDIT COMMITTEE ............................... 44

12. AUDIT COMMITTEE REPORT ...................................................... 45

PART D HUMAN RESOURCE MANAGEMENT

1. INTRODUCTION .......................................................................... 49

2. OVERVIEW OF HUMAN RESOURCES .......................................... 49

3. HUMAN RESOURCE OVERSIGHT STATISTICS ........................... 49

3.1. PERSONNEL RELATED EXPENDITURE ....................................... 49

3.2. EMPLOYMENT AND VACANCIES ................................................ 50

3.3. FILLING OF SMS POSTS ............................................................. 51

3.4. JOB EVALUATION ....................................................................... 52

3.5. EMPLOYMENT CHANGES ........................................................... 53

3.6. EMPLOYMENT EQUITY .............................................................. 54

3.7. SIGNING OF PERFORMANCE AGREEMENTS BY SMS ............... 56

3.8. PERFORMANCE REWARDS ........................................................ 57

3.9. FOREIGN WORKERS ................................................................... 58

3.10. LEAVE UTILISATION .................................................................. 58

3.11. HIV/AIDS & HEALTH PROMOTION PROGRAMMES ..................... 59

3.12. LABOUR RELATIONS .................................................................. 59

3.13. SKILLS DEVELOPMENT .............................................................. 61

3.14. INJURY ON DUTY ....................................................................... 62

3.15. UTILISATION OF CONSULTANTS ................................................. 62

3.16. SEVERANCE PACKAGES ............................................................. 63

PART E FINANCIAL INFORMATION

1. REPORT OF THE AUDITOR GENERAL ........................................65

2. ANNUAL FINANCIAL STATEMENTS ............................................ 70

NOTES ...................................................................................... 116

3NORTH WEST PROVINCIAL LEGISLATURE - ANNUAL REPORT 2015/16

PART AGENERAL INFORMATION


1. DEPARTMENT GENERAL INFORMATION

PHYSICAL ADDRESS:

Dr. James Moroka Drive

Legislature Building

MMABATHO

2735

POSTAL ADDRESS:

Private Bag X2018

MMABATHO

2735

TELEPHONE NUMBER/S : (018) 392 7070

FAX NUMBER : (018) 392 7108

EMAIL ADDRESS : [email protected]

WEBSITE ADDRESS : www.nwpl.gov.za


2. LIST OF ABBREVIATIONS/ACRONYMS

AFS Annual Financial Statements

AG Auditor General

AGSA Auditor General of South Africa

ANC African National Congress

APAC Association of Public Accounts Committee

APP Annual Performance Plan

AR Annual Report

B.Com Bachelor of Commerce

BBBEE Broad Based Black Economic Empowerment

CASA Charted Accountant South Africa

CFO Chief Financial Officer

CPA Commonwealth Parliamentary Association

CYP Commonwealth Youth Parliament

DA Democratic Alliance

EFF Economic Freedom Fighters

EU European Union

FIS Focused Intervention Study

FMPA Financial Management of Parliament Amendment Act

FMPPLA Financial Management of Parliament and Provincial Legislatures Act

GL General Ledger

GRAP General Recognised Accounting Practices

Hon. Honourable

HOD Head of Department

HR Human Resource

ICT Information Communication Technology

I.T. Information Technology

JPC Joint Planning Commission

KPI Key Performance Indicator

LAMOSA Land Access Movement of South Africa

MEC Member of Executive Council

MOU Memorandum of Understanding

MPL Member of Provincial Legislature

MTEF Medium Term Expenditure Framework

N/A Not Applicable

NCOP National Council of Provinces

NKP National Key Point

NKPI New Key Performance Indicator

No. Number

NWPL North West Provincial Legislature

NWPLMA North West Provincial Legislature’s Management Act

NWPPFA North West Political Party Fund Act

OHS Occupational Health and Safety

PFC Policy Formulation Committee

PFMA Public Finance Management Act

PWRT Public Works, Roads and Transport

R Rand

RC Risk Champions

RHR Reconciliation, Healing and Renewal

RMC Risk Management Committee

SCM Supply Chain Management

SDIP Service Delivery Improvement Plan

SITA State Information Technology Agency

SMME Small Medium and Micro Enterprises

SMS Senior Management Service

SOM Sector Oversight Model

TR Treasury Regulations

VF+ Vryheids Front Plus


I am pleased to present the 2015/16 financial year Annual Report for the North West Provincial Legislature. It reflects our achievements for the period under review in fulfilling our constitutional mandate of public participation, law-making and oversight.

The North West Provincial Legislature has made significant strides in enhancing democracy across the Province.

The 5th Legislature had committed itself to enhancing oversight, accountability and to ensure active participation of the people in the Province in its processes.

In the 2015/16 financial year we have noted a remarkable improvement in law-making process and I am satisfied with the quality of legislation passed by the Legislature that takes the lives of our people forward.

In the period under-review the Legislature hosted very successful and robust public hearings across the four districts and all the Bills passed by the House were in line with the Standing Rules of the NWPL and consistent with the Constitution of the Republic.

I am pleased with the level of participation and the response by the people of the Province in all public hearings hosted by the

Hon S.R. Dantjie:Speaker of the NWPL

leadership of the Premier, Hon. S.O.R. Mahumapelo, for ensuring timeous response and feedback on issues raised by our communities.

The 2015/16 ushered a new era for financial management of the Legislature. The Financial Management of Parliament and Provincial Legislature Act of 2009, as amended, came into effect from the 1 April 2015 and had significant implications on the financial management of all legislatures in the country.

As the North West Provincial Legislature, we have started aligning our systems and operations towards full implementation of the Act and compliance with GRAP.

Given this background, I am pleased to announce that the Legislature obtained an unqualified audit opinion with a few matters of emphasis.

In conclusion, 2015 was the year of celebrating the Freedom Charter, as the Legislature, we shall remain committed to the value of the Charter even beyond this period and that people shall govern.

We further reaffirm our commitment to the National Development Plan vision 2030; North West Provincial Government Development Plan and other relevant planning documents.

The North West Provincial Legislature remains the voice of the people of this Province and together we move the North West Province forward.

Hon. S.R. DantjieSpeaker of the North West Provinical Legislature

3. FOREWORD BY THE SPEAKER

NWPL. These robust engagements gave effect to the centrality of the Legislature as a law-making body as required by the Constitution.

As part of strengthening public participation, we have initiated and achieved all our planned provincial public functions for the financial year. These functions include the rollout of public education; Basadi Re Aga Setshaba, Engage with the Legislature, and Reconciliation, Healing and Renewal, to mention a few.

These programmes created plat-forms for citizens’ engagement to make their contribution to national discourse.

The 5th Legislature continued to centre its work on oversight, aligned with the National Development Plan, the five concrete (Agriculture, culture and tourism (ACT), Villages, Townships and Small Dorpies (VTSD), Setsokotsane, RHR, Saamtreck Saamwerk,) and enhanced public participation. We have committed ourselves in enhancing the implementation of the Sector Oversight Model.

We have improved the level of scrutinising Departmental budgets, annual performance plans including robust debates and effective use of questions and Members Statements. Committees have engaged all Departments from their draft planning stages and recommendations by Committees were incorporated into their plans.

Through Sectoral Parliaments, and O re Bone Re Go Bone Programme, we have improved our responsiveness in attending to the needs of our people and we have conducted a well-coordinated oversight to ensure improved service delivery.

To this effect, I am pleased and appreciate co-operation from the Executive Council under the


4. OVERVIEW OF THE ACCOUNTING OFFICER

As we close this financial year 2015/16, the North West Provincial Legislature (NWPL) continued to make good strides in addressing its strategy to deliver on its mandate of exercising oversight over the Execu-tive, law making and public partici-pation.

The NWPL has achieved most of its performance targets as set out in the 2015/16 Annual Performance Plan in line with the five year strategic objectives of the Legislature as en-shrined in the Strategic document.

We embarked on the process of re-viewing the organisational structure in order to accommodate, amongst others, the newly established Infra-structure and Maintenance Branch. This as a result of a new responsi-bility of Infrastructure and Mainte-nance which will start in the next financial year, 2016/17.

The Oracle server hardware was pur-chased for purposes of upgrading the server and at the same time en-suring that we reconfigure the Oracle system to ensure user needs analy-sis is incorporated into the system to ensure effective and efficient func-tioning of the system.

Mr A. I. KekesiActing Secretary to the NWPL

On Financial Management matters, the Legislatures migrated from a Cash Modified Basis to the implementation of Generally Recognized Accounting Practices (GRAP). In order to adhere to the Financial Management of Parliament and Provincial Legislatures Act, 2009 (Act No. 10 of 2009) as amended.

In an attempt to comply with the requirements of National Key Point Act (NKPA), the NWPL embarked on security upgrades and managed to install an integrated Electronic Security System. The Joint Planning Committee held regular meetings aimed at addressing matters relating to compliance to other key require-ments for the National Key point Area.

Once again, I am pleased to an-nounce that the Legislature received an unqualified Audit opinion for the 2015/16 financial year. We continue to work hard on improving our inter-nal controls in order to deal with all other matters of emphasis as raised by the Auditor General.

I am grateful for the guidance pro-vided by the Honourable Speaker, Hon. S.R. Dantjie, as we continue to give support to the Members of the Provincial Legislature in their quest to deliver on their constitutional mandate. We will continue to in-volve our communities to participate in the legislative processes through public participation events, public hearings and sectoral parliaments.

A total of twenty-two (22) Sec-toral parliaments were conducted throughout the Province for the year under review.

To this end, the successful imple-mentation of the Renewal , Healing And Reconciliation (RHR), Engage with The Legislature and Basadi Re Aga Sechaba programmes driven by the office of the Honourable Speaker in order to implement the National Development Plan aspect of Social Cohesion and Nation Building have proven to be remarkable achieve-ments during the year under review.

My gratitude is expressed to the Honourable Speaker, Hon. S.R. Dantjie, Members of the Provincial Legislature and all the employees of the NWPL for their continued sup-port and co-oporation. Let the Sky be the Limit.

A.I. KekesiActing Secretary to the Legislature


OVERALL PERFORMANCE OF THE INSTITUTION IN RELATION TO ITS ANNUAL PERFORMANCE PLAN 2015/16

OVERVIEW OF THE FINANCIAL RESULTS

Departmental receipts

2015/16 2014/15

EstimateActual Amount

Collected(Over)/Under

CollectionEstimate

Actual Amount Collected

(Over)/Under Collection

R’000 R’000 R’000 R’000 R’000 R’000

Transfers received 305 500 273 019 32 481 313 324 276 890 36 434

Interest, dividends and rent on land - 3 813 (3 813) - 3 011 (3 011)

Total 305 500 276 832 28 668 313 324 279 901 33 423

PROGRAMME EXPENDITURE

Programme Name

2015/16 2014/15Final

AppropriationActual

Expenditure(Over)/ Under Expenditure

Final Appropriation

Actual Expenditure

(Over)/ Under Expenditure

R’000 R’000 R’000 R’000 R’000 R’0001: Administration 144 040 144 711 (671) 122 867 113 685 9 182

2. Member’s Salaries 28 941 26 995 1 946 27 668 27 117 551

3: Legislature Operations 132 519 130 557 1 962 162 789 139 491 23 298

Total 305 500 302 263 3 237 313 324 280 293 33 031

The above appropriation amounts relate to actual cash payments and have not included GRAP accruals and non-cash transactions.

VIREMENTS / ROLL OVERS

An appliccation for a roll over for an amount of R3.2 million was done with the Provincial Treasury. No virements were done.

UNAUTHORISED, FRUITLESS AND WASTEFUL EXPENDITURE

Unauthorized expenditure amounts to R 9,023 million. This relates mainly to over expenditure on the Salaries. Refer to note 31 on the Notes to the Financial Statements.

PUBLIC PRIVATE PARTNERSHIPS

None

DISCONTINUED ACTIVITIES / ACTIVITIES TO BE DISCONTINUED

None

NEW OR PROPOSED ACTIVITIES

None

GIFTS AND DONATIONS RECEIVED IN KIND FROM NON-RELATED PARTIES

None

EXCEPTIONS AND DEVIATIONS RECEIVED FROM NATIONAL TREASURY

None


EVENTS AFTER THE REPORTING DATE

The accounting officer is not aware of any events or circumstances arising since the end of the financial year which have not been disclosed in the annual financial statements.

Date: 31 May 2016

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT

To the best of my knowledge and belief, I confirm the following:

All information and amounts disclosed throughout the annual report are consistent.

The annual report is complete, accurate and is free from any omissions.

The annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury.

The Annual Financial Statements (Part E) have been prepared in accordance with the “Generally Recognised Accounting Practices (GRAP)” and the relevant frameworks and guidelines issued by the National Treasury.

The Secretary is responsible for the preparation of the annual financial statements and for the judgements made in this information.

The Secretary is responsible for establishing, and implementing a system of internal control that has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the annual financial statements.

The external auditors are engaged to express an independent opinion on the annual financial statements.

In my opinion, the annual report fairly reflects the operations, the performance information, the hu-man resources information and the financial affairs of the Legislature for the financial year ended 31 March 2016.

Yours faithfully


Date: 31 May 2016



6. STRATEGIC OVERVIEW

6.1. VISION

To Foster Law Making, Oversight and Public Participation Processes through robust debates to instil Public Pride and Confidence in Democracy.

6.2. MISSION

The North West Provincial Legislature has, in its quest to attain its vision, adopted the following dy-namic principles and activities as its mission:

- To reflect the values and aspirations of the people of the North West.

- To promote Public Participation, Accountability, Transparency and Accountability.

- To be a caring, robust, responsive and activist Legislature.

- To develop capacity and skills of both Members and staff.

- To hold the Executive accountable.

- To maintain a skilled administration.

6.3. VALUES

In striving for service excellence and best practice, the Legislature subscribes to the following values:-

Value Delineation

DisciplineTo exercise an appropriate and strict demeanour in the execution of our duties and all matters relating to the Legislature.

Credibility To promote and prompt a credible image of the Legislature and our mandate in the public.

Honesty To strive for transparency and honesty. To be above board and accessible to the general public.

Integrity To be principled, unbiased and unrelenting in the pursuit of our mandate.

RespectTo instil in ourselves an ethos of respect. To value and respect our diversity as reflected in the populace of the North West. To respect differing views, positions and/or persuasions.

6.4. STRATEGIC OUTCOME ORIENTATED GOALS- To effectively and efficiently conduct oversight over the Executive, so that it is held accountable

and delivers on its mandate.

- To enhance the policy and legislative capacity of the Legislature in order to pass transformative legislation.

- To promote good corporate governance.

- To enhance public awareness and effective participation of the public and stakeholders in the Legislature’s activities and business.


7. LEGISLATIVE AND OTHER MANDATES

Members of the Provincial Legislature are elected to represent the people and their constitutional mandate is to ensure Government by the people. The core functions of the Provincial Legislature are;

- To pass laws;

- To oversee organs of state; and

- To promote public participation.

The below stated are the main Acts, Regulations and Frameworks that the Legislature is bound to adhere to:

- The Constitution of the Republic of South Africa;

- The Financial Management of Parliament and Provincial Legislatures Act 2009, (Act No. 10 of 2009);

- The Independent Commission for the Remuneration of Public Office Bearers Act, 1997 (Act 92 of 1977);

- The Members Enabling Facilities Handbook;

- The Standing Rules of the Legislature;

- North West Petitions Act, 2010 (Act No. 02 of 2010);

- Mandating Procedures Act, 2008 (Act No. 52 of 2008);

- Mandating Procedures Act No. 52 of 2008;

- The Division of Revenue Act, (Act No. 02 of 2013);

- The Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997);

- Employment Equity Act, 1998 (Act No. 55 of 1998);

- Labour Relations Act, 1995 (Act No. 66 of 1995);

- Promotion of Access to Information Act, 2000 (Act No. 3 of 2000);

- Promotion of Administrative Justice Act, 2000 (Act No. 2 of 2000);

- Treasury Regulations, Frameworks, Guides and Best Practices.

BEST PRACTICES

- King III Report on Governance for South Africa 2009;

- International Standards for the Professional Practice of Internal Auditing; and

- COBIT 5

The institution adhered to Legislature policies that were adopted and approved.


MEMBERS OF THE LEGISLATURE


HON. S.R. DANTJIESpeaker of the North West Provincial Legislature

HON. J. MANGANYEDeputy Speaker of the North West Provincial Legislature - ANC MPL

HON. N. MALOYIActing Chairperson of

Chairpersons - ANC MPL

HON. L. MAHLAKENGChairperson: Standing

Committee on Public Accounts - ANC MPL

HON. J. SCHUTTEChairperson: Standing

Committee Legislature Affairs - VF+ MPL

HON. H. GALENGChief Whip - ANC MPL

HON. G. KEGAKILWEChairperson of Chairpersons

(Political Redeployment) - ANC MPL

members of the north west provincial legislature

standing commitees

HON. I. MOSALA,Chairperson: Standing

Committee on Legislature Review and Implementation of House Resolutions - ANC MPL


portfolio commitees

HON. M. ROSHO,Chairperson: Local

Government and Human Settlements - ANC MPL

HON. O. MOCHWARI, Chairperson: Tourism

- ANC MPL

HON. B. MOILOA, Chairperson: Sports, Arts,

Culture and Traditional Affairs - ANC MPL

HON. N. DUMA,Chairperson: Agriculture, Rural Development and Environment

- ANC MPL

HON. M. MOTLHABANE,Chairperson: Public Works,

Roads, Transport and Community Safety - ANC MPL

HON. B. ELISHA,Chairperson: Premier, Finance,

Economy and Enterprise Development - ANC MPL

HON. N. MALOYI,Chairperson: Health and Social

Development - ANC MPL


HON. S. MOTSWENYANE, DA Whip

HON. J. THEOLOGO, DA MPL

HON. B. DIALE, EFF MPL

HON. J. MC GLUWA, DA Leader

HON. A. MOTSI, EFF Leader

HON. N. KLAAS - HARMAN, EFF MPL

HON. T. SEHLOHO, EFF MPL

DR. T. FALENI, DA MPL

HON. J. SCHUTTE, VF+ Plus Leader



HON. K. NKEWU, (Late) ANC MPL


MEMBERS OF THE executive council


MEC M. SAMBATHADepartment of Public Works and Roads

MEC C. MAINEDepartment of Local Government

and Human Affairs (Political Redeployment)

MEC G. MOLAPISIDepartment of Community Safety

and Transport Management

MEC M. MASIKEDepartment of Health

MEC W. MATSEMELADepartment of Education and Sport

Development

MEC D. MOHONODepartment of Tourism

HON. S.O.R. MAHUMAPELOPremier to the North West Province

MEC F. GAOLAOLWEDepartment of Social Development.

Acting MEC Department of Local Government and Human Affair

MEC M. TLHAPEDepartment of Rural,

Environmental and Agriculture Development.

Acting MEC Department of Culture, Arts and Traditional Affairs

MEC W. NELSONDepartment of Finance, Economic

and Enterprise Development

MEC T. MODISEDepartment of Culture, Arts and

Traditional Affairs. (Political Redeployment)


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9. ENTITIES REPORTING TO THE SPEAKER

No entities report to the Executive Authority.


PART BPERFORMANCE INFORMATION


1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES

The AGSA currently performs the necessary audit procedures on the performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported un-der the Predetermined Objectives heading in the Report on other legal and regulatory requirements section of the auditor’s report.

Refer to page 69 of the Report of the Auditor General, published as Part E: Financial Information.

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE

2.1. SERVICE DELIVERY ENVIRONMENT

The North West Provincial Legislature is a legislative arm of government charged with the responsibilities of:

- Law making

- Oversight, and

- Public Participation.

2.2. SERVICE DELIVERY IMPROVEMENT PLAN

The NWPL does not have a Service Delivery Improvement Plan as it does not provide tangible service deliv-ery. The Legislature is responsible for law making, public participation and oversight.

2.3. ORGANISATIONAL ENVIRONMENT

The Legislature houses the political representatives of the people and its mandate is to provide oversight over the Provincial Government and Other Organs of State. The Legislature has 33 elected public representatives from the following political parties:

Name of Political Party Number of Public Representatives

ANC 23

EFF 05

DA 04

VF + 01

2.3.1. THE IMPLEMENTATION OF THE NATIONAL KEY POINT ACT REQUIREMENTS

NATIONAL KEY POINT

The Legislature was declared a National Key Point Installation in terms of the National Key Point (NKP) Act 102 of 1980. A National Key Point Installation is the strategic installation/place/institution that is important to the South African economy or security that if anything happens to the building or area, the result will be disastrous to the country as whole. This can lead to an embarrassment to the country.

RESPONSIBILITY OF THE OWNER

The Speaker of the Legislature is the owner of the National Key Point in terms of Section 3 of the NKP Act, 102 of 1980 and is responsible for establishing and maintaining the required security standards at the National Key Point. She is responsible for the safeguarding (security) of the NKP in accordance with


instructions and has to establish a Joint Planning Committee (JPC) in consultation with the protecting authority. She must further appoint and maintain the necessary security compliment in terms of the NKP regulations and appoint a Chief Security Officer in terms of Regulation 9.

Strikes, picketing and protest should not be allowed within an agreed radius of the installation.

OFFENCES

The Speaker shall be guilty of the offence if she failed to take steps to the satisfaction of the Minister in respect of the security of the Legislature.

In conclusion the Minister of Police may at any time, on behalf and with the consent of the Speaker take any steps deemed necessary in terms of security of the National Key Point and the owner (Speaker) shall be liable for the cost of therefore.

STATUS REPORT ON THE IMPLEMENTATION OF THE NKP

The National Key Point continued to be monitored through the JPC. The Hon. Speaker appointed the Deputy Speaker Ms. Jane Manganyi as the Chairperson and the Deputy Secretary of the NWPL as the Deputy Chair-person to the JPC. The JPC held all its quarterly meetings as per schedule.

The upgrade of security measures to the standard required by the government security regulator has been outstanding due to delays from the Department of Public Works. The Speaker, as owner of the NKP, applied to Provincial Treasury for funds to be allocated directly to the NWPL to implement the required measures. Funds for the security upgrades shall be allocated during the 2016/2017 financial year.

2.3.2. ORGANISATIONAL STRUCTURE

During the financial year, strategic posts such as the Deputy Secretary Administration and Research Manager in the Office of the Speaker were advertised and filled.

The structure of the NWPL (the organogram) was placed under review. The aim of the exercise was to deter-mine the validity of certain posts and to create additional posts in areas where additional staff members were desperately required. The outcome of the exercise shall be implemented during the 2016/17 financial year.

Executive management of the institution identified the need to enhance the leadership skills of manage-ment. A Leadership and Management seminar was held towards the end of the financial year. The purpose of the seminar was to identify areas of improvement and build stronger relations between managers. The outcome and recommendations of the seminar shall be implemented during the new financial year 2016/17.

JOB EVALUATION PROCESS

A service provider was appointed to conduct the job evaluation exercise. The entire staff establishment of the Legislature was evaluated. The intention of the evaluation was to pay realistic salaries emanating from scientific evaluations for every position as well as to establish beginning and ending notches for all positions. It was also envisaged that the NWPL will be brought on par with other provincial legislatures on an incre-mental approach.

The evaluation was concluded during the financial year but due to the financial implications, the recommen-dations of the report will be rolled out during the 2016/17 financial year.


2.3.3. NWPL LITIGATIONS

LAND ACCESS MOVEMENT OF SOUTH AFRICA (LAMOSA) / NCOP & OTHERS

This is a constitutional court case wherein the NWPL was cited as a party based on the fact that it had par-ticipated in the passing of the law which is alleged to have been processed without following the prescribed constitutional procedure.

The case was heard in February 2016 in the Constitutional Court and judgment reserved. The NWPL did not pay legal costs on this matter as it did not oppose it in court.

IMBIZO OFFICE FURNITURE / NWPL

This is a case which started in 2015 Imbizo Office Furniture instituted a civil claim against the NWPL for alleging that it had unlawfully terminated its appointment letter which was issued by the NWPL pursuant to participating in a tender process.

The parties filed the prescribed legal documents in the High Court in Mmabatho in March 2015, and such a process is still pending there. The NWPL is awaiting Imbizo to process this matter further. The NWPL has not been billed for legal costs yet, by its attorneys. This is the case that will be carried over to 2016/17 financial year.

2.3.4. GRAP IMPLEMENTATION

The commencement of the 2015/16 financial year brought with it the implementation of the Financial Management of Parliament and Provincial Legislatures Act, 2009 (Act no. 10 of 2009). As per the Act, the financial statements of provincial legislatures had to be presented in accordance with the Standards of Generally Recognised Accounting Practices (GRAP).

The Legislature appointed consultants to assist with the conversion of the financial accounts from the Mod-ified Cash Basis Accounting Practices to that of GRAP.

ANNUAL FINANCIAL STATEMENTS (AFS)

The prior year Annual Financial Statements (AFS) (March 2015) were successfully converted from Modified Cash Basis to Accrual basis. This is in conformance with GRAP. In addition, the interim AFS as at 30 Sep-tember 2015 was prepared and forwarded to the AG for review.

ACCOUNTING POLICIES

The NWPL accounting policies have been changed from Cash Basis Accounting to Accrual Accounting in terms of GRAP.

AFS DISCLOSURE

All Receivables, Payables and Provisions are being accounted for in terms of GRAP standards and will be disclosed as such in the AFS.

Additional disclosures such as Key Management Personnel, Contingent Assets/liabilities, Property Plant & Equipment, Commitments and other applicable information will be disclosed in the AFS in compliance with GRAP.


2.3.5. IMPLEMENTED RECOMMENDATIONS OF THE STANDING COMMITTEE ON LEGISLATURE AFFAIRS AND THE AG

The Legislature met with the Standing Committee on Legislature Affairs on numerous occasions. The meet-ings were held to discuss amongst others the institution’s monthly financial reports, the quarterly perfor-mance information reports (the assessment of the Legislature’s performance against the 2015/16 APP) and the Legislature’s Annual Performance Plan for the 2016/17 financial year. Recommendations issued by the Standing Committee were noted and implemented accordingly.

At the end of July 2015, the AG presented the Legislature with an audit report of the audit conducted on the 2014/15 financial year. To ensure the audit findings would not be repeated in the next audit, management developed an action plan. The plan addressed weaknesses and deficiencies within the control environment. Recommendations from the AG were utilised in the crafting of the plan.

The AG Action Plan was presented to the Standing Committee on Legislature Affairs and their recommenda-tions were incorporated accordingly.

The plan was monitored and updated during the year under review.

2.4. KEY POLICY DEVELOPMENTS AND LEGISLATIVE CHANGES

FINANCIAL MANAGEMENT OF PARLIAMENT AND PROVINCIAL LEGISLATURES ACT 2009 (ACT NO. 10 OF 2009)

In previous financial years, the Legislature utilised the North West Provincial Management Act to govern and administer its financial management. Due to a decision taken by the Constitutional Court that the North West Provincial Management Act was unconstitutional, the said Act was converted into a policy during the 2014/15 financial year.

In line with the recent passing of the Financial Management of Parliament Amendment Act (No 34 of 2014) (FMPA), the Parliament Executive Authority of Parliament prescribed a new set of Regulations to regulate the Supply Chain Management of Parliament and Provincial Legislatures. The Financial Management of Parliament and Provincial Legislatures Act, 2009 (Act No. 10 of 2009) (FMPPLA) and the approved Supply Chain Management (SCM) Regulations came into effect from 01 April 2015.

3. STRATEGIC OUTCOME ORIENTED GOALS

The strategic goals of the Legislature are as follows:

- To provide a sound provincial law making framework;

- To promote public participation in legislative processes;

- To exercise an oversight function; and

- To ensure business excellence within the Legislature.


4. PERFORMANCE INFORMATION BY PROGRAMME

4.1. PROGRAMME 1: ADMINISTRATION

PURPOSE OF THE PROGRAMME

To enable the administration to render support services that will enable Members of the Legislature to fulfil their constitutional obligations. This programme has an internal focus.

Programme 1 Administration consists of five (5) sub-programmes, namely:

- Sub-programme 1: Office of the Speaker;

- Sub-programme 2: Office of the Secretary;

- Sub-programme 3: Financial Management;

- Sub-programme 4: Corporate Services; and

- Sub-programme 5: Internal Audit.

4.1.1. STRATEGIC OBJECTIVES, PERFORMANCE INDICATORS PLANNED TARGETS AND ACTUAL ACHIEVEMENTS

The 2015/16 financial year saw the introduction of the Financial Management of Parliament and Provincial Legislatures Act, 2009 (No. 10 of 2009). To ensure the Legislature complied with the regulations as noted in the Act, it was of utmost importance that the processes and systems within the institution operated ef-fectively.

The Annual Performance Plan 2015/16 was tabled and implemented from April 2015. The objects and key performance indicators (KPIs) were set out and the achievement thereof monitored throughout the year.

In August 2015, the Legislature launched a new outreach programme, namely the “Basadi Re Aga Setshaba” programme. This programme was aimed at educating and encouraging dialogue amongst young women in politics and in business. Another programme, “Engage with the Legislature” was also launched. The aim of this programme was to educate Communities and strengthen their confidence in the work of the Legislature.

KEY ACHIEVEMENTS FOR PROGRAMME 1: ADMINISTRATION

- Reconciliation, Healing and Renewal (RHR) programmes were successfully held.

- The Basadi Re Aga Setshaba and the Engage with the Legislature programmes were launched and the events were successful.

- Provincial Speaker’s Forums were held.

- The new Oracle server, the migration and configuration of the Application and Database were suc-cessfully installed.

- No security breaches were experienced during the financial year.

- Development and implementation of the GRAP Implementation Plan.

- An Employment Equity Committee was established, members elected and adequately trained.

- SCM Bid Committee Members were appointed.

- Successfully hosted a National Public Participation and Communication forum.

- Appointment of a number of Researchers and Legal Advisors in line with SOM requirements.


4.1.1. STRATEGIC OBJECTIVES

Strategic objectives Audited outcome2014/15

Annual Planned Target

2015/16

Actual Achievement

2015/16

Deviation from planned

to actual

Comment on deviation

SUB-PROGRAMME: OFFICE OF THE SPEAKER

1 To provide political leadership for the achievement of the constitutional mandate.

5 3 3 - None

2 Number of reports produced in the tracking of the implementation of House Resolutions

2 2 2 - None

3 Enhancing public confidence in the work of the Legislature by organising a number of public functions and radio interviews.

30 16 20 -4 There was an increase in the demand to host RHR programmes

4 To facilitate social cohesion activities through the Ore Bone Re Go Bone campaign

NKPI 4 4 - None

SUB-PROGRAMME: OFFICE OF THE SECRETARY

1 To provide strategic leadership and ef-fective and efficient management of the administration by producing a number of legislative compliant reports.

55 49 32 17 Policies could not be implemented during the year under review as they had not been approved by the Rules Committee

SUB-PROGRAMME: INTERNAL AUDIT

1 To provide independent, objective, assur-ance and consulting services designed to improve the organisation’s operations by conducting a number of Audit Committee Meetings

12 13 17 -4 The target was exceeded due to four (4) additional audits that were added to the IA Audit Plan. These were as follows:Two (2) audits were rolled over from the 2014/15 financial year.One (1) audit was on the review of the 2014/15 AFS. One (1) audit was on the review of the interim 2015/16 AFS.


Strategic objectives Audited outcome2014/15


2015/16

Actual Achievement

2015/16


to actual


SUB-PROGRAMME: RISK MANAGEMENT

1 To provide a proactive, systematic and formalised process instituted to identify, assess, manage and monitor risks.

1 7 5 2 There was a delay in finalizing the Strategic Risk Assessment Report impacted timing of the monitoring of the strategic risk register. The delay in finalizing the report was mainly due to human capacity constraints-position of Manager is only position filled within the division.

SUB-PROGRAMME LEGAL AND LABOUR

1 To provide professional legal service, employee relations and wellness management support.

8 8 8 - None

SUB-PROGRAMME: FINANCIAL MANAGEMENT

1 To provide effective and sound financial planning, financial reporting, management accounting and Supply Chain Management support to the NWPL throughout the financial year by producing a number of legislative compliant reports.

20 29 29 - None

SUB-PROGRAMME: CORPORATE SERVICES

1 To provide effective and sound Corporate Support Services to the North West Provincial Legislature by producing a number of reports on Human Capital, ICT facilities, Office Support, Security, Protocol & Housekeeping.

26 36 30 6 Lack of staff within the Communication division. This hindered the production of the Kgotla magazine.

4.1.2. PERFORMANCE INDICATORS PROGRAMME 1 ADMINISTRATION

Performance Indicator Audited outcome 2014/15


2015/16

Actual Achievement

2015/16


to actual


BRANCH OFFICE OF THE SPEAKERSUB-PROGRAMME: OFFICE OF THE SPEAKER

1.1 Number of reports produced on the coordination and facilitation of the Strategic Planning for the Presiding Officers.

1 1 1 - None

1.2 Number of reports produced on the performance of Portfolio and Standing Committees.

4 2 2 - None




2015/16

Actual Achievement

2015/16


to actual


2.1 Number of reports produced on the implementation of the legislative review and House resolutions.

2 2 2 - None

3.1 Number of public functions held. 14 12 14 -2 There was a great demand from the Municipalities to host the RHR Programmes, hence the increase in public functions held.

3.2 Number of interviews organised. 16 4 6 -2 Due to the increase in the number of public functions held, the number of interviews with the Hon. Speaker increased as a result.

4.1 Number of reports produced on the Ore Bone Re Go Bone campaign.

NKPI 4 4 - None

BRANCH: OFFICE OF THE SECRETARY

SUB-PROGRAMME: OFFICE OF THE SECRETARY

1.1 Number of Annual Reports developed. 1 1 1 - None

1.2 Number of Annual Performance Plans developed.

2 1 1 - None

1.3 Number of reports produced on the monitoring and evaluation of performance information.

4 4 4 - None

1.4 Report on number of policies reviewed. 21 12 12 - None

1.5 Report on number of policies developed.

19 6 6 - None

1.6 Report on number of policies implemented.

- 17 - 17 Policies could not be implemented during the year under review as they had not been approved by the Rules Committee

1.7 Number of reports produced on the implementation of the National Key Point Act.

4 4 4 - None

1.8 Number of reports produced regarding secretarial services provided.

4 4 4 - None




2015/16

Actual Achievement

2015/16


to actual


SUB-PROGRAMME: INTERNAL AUDIT

1.1 Number of Audits conducted. 7 8 12 -4 The target was exceeded due to four (4) additional audits that were added to the IA Audit Plan. These were as follows:

Two (2) audits were rolled over from the 2014/15 financial year.

One (1) audit was on the review of the 2014/15 AFS.

One (1) audit was on the review of the interim 2015/16 AFS.

1.2 Number of Internal Audit Plans developed.

1 1 1 - None

1.3 Number of audit committee meetings held

4 4 4 - None

SUB-PROGRAMME RISK MANAGEMENT

1.1 Number of Risk Assessment reports prepared

1 1 1 - None

1.2 Number of Risk Management Committee meetings held

NKPI 4 3 1 The RMC meeting that was scheduled for the 1st quarter was held during the reporting hence the deviation on the number of meetings

1.3 Number of monitoring reports on implementation of risk mitigation strategies

NKPI 2 1 1 Delay in finalizing the Strategic Risk Assessment Report impacted timing of the monitoring of the strategic risk register. The delay in finalizing the report was mainly due to human capacity constraints-position of Manager is only position filled within the division.

BRANCH LEGAL & LABOUR SUB-PROGRAMME LEGAL & LABOUR

1.1 Number of reports produced on the status of employment relationship

4 4 4 - None

1.2 Number of status reports produced on legal matters attended to

4 4 4 - None




2015/16

Actual Achievement

2015/16


to actual


BRANCH FINANCIAL MANAGEMENT

SUB-PROGRAMME FINANCIAL MANAGEMENT

1.1 Number of consolidated Budget Reports submitted to Provincial Treasury

2 2 2 - None

1.2 Number of Annual Financial Statements submitted to Provincial Treasury

1 1 1 - None

1.3 Number of Interim Financial Statements submitted to Provincial Treasury

4 4 4 - None

1.4 Number of In Year Monitoring Reports submitted to Provincial Treasury

12 12 12 - None

1.5 Number of consolidated Procurement Plans submitted (Demand Management Plan) to the Secretary

1 1 1 - None

1.6 Number of irregular fruitless & wasteful expenditure reports produced

NKPI 4 4 - None

1.7 Number of Mid-term reports submitted to the Secretary

NKPI 1 1 - None

1.8 Consolidated Performance information report

NKPI 4 4 - None

BRANCH CORPORATE SERVICES

SUB-PROGRAMME CORPORATE SERVICES

1.1 Number of reports produced on the status of HR systems and processes

4 4 4 - None

1.2 Number of reports produced on the status of ICT system development and support

4 4 4 - None

1.4 Number of reports produced on Security, Protocol and Housekeeping.

4 4 4 - None

1.5 Number of status reports produced on Office Support Services

4 4 4 - None

1.6 Number of reports produced on gender and disability services

3 4 4 - None

1.7 Number of Kgotla magazines prepared 3 12 6 6 Lack of staff within the Communication division. This hindered the production of the Kgotla magazine.

1.8 Number of status reports produced on communication services

4 4 4 - None

Legend:

NKPI: New Key Performance Indicators (NKPI) were implemented during the 2015/16 financial year. As a result, audited figures for the 2014/15 financial year are not available.


4.1.3. STRATEGY TO OVERCOME AREAS OF UNDER PERFORMANCE

To adhere to the cost containment measures implemented by Provincial Treasury, the Legislature reduced the number of preparatory meetings and participants during the RHR programmes. Target areas with government halls and churches were utilised as venues to host Legislature programmes and events.

Maintenance and the upgrading of areas within the Legislature were not undertaken during the year. The establishment of the institution’s own maintenance division within the 2016/17 financial year will ensure that the upgrading of the Chamber occurs and maintenance is conducted regularly.

4.1.4. CHANGES TO PLANNED TARGETS

For the year under review, no changes occurred to the performance indicators and targets.

4.1.5. LINKING PERFORMANCE WITH BUDGETS

PROGRAMME 1 ADMINISTRATION

2015/16 2014/15

Details per Sub-Programme R’000

Final Appropriation

Actual Expenditure

Variance Final Appropriation

Actual Expenditure

R’000 R’000 R’000 R’000

1.1 Office of The Speaker 12 584 11 974 610 6 989 6 703

1.2 Office of The Secretary 7 018 5 282 1 736 5 694 5 440

1.3 Financial Management 30 020 34 068 (4 048) 22 982 21 096

1.4 Corporate Services 93 320 92 366 954 86 153 79 613

1.5 Internal Audit 1 098 1 021 77 1 050 833

TOTAL 144 040 144 711 (671) 122 867 113 685

4.2. PROGRAMME 2: MEMBER’S EXPENDITURE

This is a programme for the payment of salaries of Members of the North West Provincial Legislature. It is a statutory programme because money is disbursed in terms of Remuneration of the Public Office Bearers Act. No. 20 of 1996.

The specified policies, priorities and strategic objectives for programme 2 are:- Payment of support staff to MPL’s and Political Parties; and- Payment of Members of the Provincial Legislature.

PROGRAMME 2 MEMBER’S EXPENDITURE

2015/16 2014/15

Direct Charge R’000

Final Appropriation

Actual Expenditure Variance Final

Appropriation Actual

Expenditure

R’000 R’000 R’000 R’000

Member’s Expenditure 28 941 26 995 1 946 27 668 27 117

TOTAL 28 941 26 995 1 946 27 668 27 117


4.3. PROGRAMME 3: PARLIAMENTARY SUPPORT

PURPOSE OF THE PROGRAMME

The purpose of this programme is to ensure that the Legislature operates effectively and efficiently by ex-posing MPLs to parliamentary systems of other countries and legislatures, catering for committee activities including public hearings and oversight visits, enabling them to engage in NCOP activities, reviewing the effectiveness of laws passed by the Legislature, enabling public to participate in the legislative and oversight processes and increasing public awareness in the Legislature and oversight activities in the Legislature.

Programme 3 Parliamentary Support consists of seven (7) sub-programmes, namely:

- Sub-programme 1: Logistics (Members);- Sub-programme 2: Exposure to Parliamentary Activities (Member’s Exposure);- Sub-programme 3: House Proceedings;- Sub-programme 4: Committees;- Sub-programme 5: NCOP Liaison Services; - Sub-programme 6: Public Participation and Petitions; and- Sub-programme 7: Research, Library and Information Services.

4.3.1. STRATEGIC OBJECTIVES, PERFORMANCE INDICATORS PLANNED TARGETS AND ACTUAL ACHIEVEMENTS

Programme 3 signifies areas of law making, oversight and public participation. It is through this programme that service delivery is rendered and objectives of the NWPL achieved. One of the major pursuits is the im-plementation of the Sector Oversight Model (SOM).

The Committee division has a mandate to provide administrative and secretarial support to the Portfolio and Standing Committees to enhance law making, oversight and public participation processes by ensuring that a number of committee reports are prepared for tabling and debate in the House. In January 2016, the members of the Portfolio and Standing Committees held a planning session. The outcome thereof will be Annual Plans for each Committee for the 2016/17 financial year.

KEY ACHIEVEMENTS OF PROGRAMME 3: PARLIAMENTARY SUPPORT

- Policy documents (Strategic Plans (2015/20), the Annual Performance Plans (2015/16) and the Annual Reports (2014/15)) for the Provincial Departments, the NWPL, entities and municipalities were tabled.

- The Portfolio and Standing Committees processed the Strategic Plans (2015/20), the Annual Performance Plans (2015/16) and the Annual Reports (2014/15) for the government departments and the NWPL as part of the oversight over the executive to ensure that the departments are held accountable and deliver on their mandate. Committee reports were compiled and adopted for tabling and debates in the House.

- Bills were tabled in the House.

- Oversight visits were conducted as part of the focused intervention study (FIS). Oversight visits which were conducted just after the committee had dealt with the departmental budget votes in or-der to confront the concerns or challenges that were not satisfactorily addressed and ensured that priority was given to those programmes that were fundamental and helped to ensure the depart-ment’s success.

- Researchers and Deputy Managers were appointed in order to ensure full implementation of SOM.

- Eleven (11) Public Meetings were held during the 2015/16 financial year across the province whereby the communities were engaged through “Ore bone re go Bone programme” (Taking Leg-islature to the People) in order to enhance public participation and promote stakeholder interac-tion to ensure that there is sufficient involvement of the general public through public committee meetings.

- Five (5) public hearings were held during the 2015/16 financial year whereby the committees were able to facilitate; Financial and Fiscal Commission Amendment Bill, Disaster Management Amend-


ment Bill, Medicines and Relates Substance Amendment Bill; North West Appropriation Amend-ment Bill; 2015; Division of Revenue Amendment Bill.

- Development of the Celebrating of 20 years of Democracy Booklet.

4.3.2. STRATEGIC OBJECTIVES

Strategic objectives Audited outcome 2014/15


2015/16

Actual Achievement

2015/16

Deviation from planned to

actual


SUB-PROGRAMME: LOGISTICS (MEMBERS)

1 To provide enabling facilities for the Members of the Provincial Legislature by producing a number of reports on the internal arrangements on MPL’s.

4 4 4 - None

SUB-PROGRAMME: PARLIAMENTARY ACTIVITIES (MEMBERS’ EXPOSURE)

1 To provide effective and efficient Members’ exposure programmes by producing reports on MPL’s training and participation in events.

7 8 7 1 The Legislature officially opened on the 6th March 2016, i.e. the last month of the quarter; therefore, no facilitation of MPL’s participation in International, regional and provincial events was done.

SUB-PROGRAMME: HOUSE PROCEEDINGS

1 To Provide administrative, Procedural, Secretarial, Hansard and Language Services support to the House, Committees and NCOP by ensuring that a number of reports are tabled in the house and Hansard booklets are produced.

22 26 24 2 Some Municipalities submitted their Annual Reports late in the succeeding quarters not on the prescribed period of reporting

This affected other KPIs whereby less debates occured tha anticipated.

SUB-PROGRAMME: NCOP LIAISON

1 To facilitate effective liaison between NCOP and the Legislature and improve support on law making processes by producing a number of reports thereon.

8 12 10 2 The scheduled outreach programmes were postponed and not held within the financial year 2015/16

SUB-PROGRAMME COMMITTEES AND POLICY

1 To provide administrative and secretarial and research support to the Legislature and its Committees to enhance law making, oversight and public participation process.

9 12 12 - None

2 To facilitate policy development and review for the Legislature

NKPI 8 8 - None


Strategic objectives Audited outcome 2014/15


2015/16

Actual Achievement

2015/16


actual


SUB-PROGRAMME: LIBRARY, RESEARCH AND INFORMATION SERVICES

1 To provide reactive research services to Portfolio and Standing Committees in support of Law making, Oversight and Public participation processes by producing a number of reports on research activities conducted.

11 12 11 1 Changes within in the Legislature Programme, reprioritisation of Committees focus areas and budget constraints within the Library, Research and Information Services division led to less proactive research projects conducted.

SUB-PROGRAMME PUBLIC PARTICIPATION

1 To facilitate public participation in the law making and oversight processes by producing reports on public participation and sectoral events.

8 8 8 - None

2 To educate the Public and administer the Petitions process.

4 8 5 3 Petitions were not submitted to the Legislature for processng as initially anticipated

3 To facilitate Nation Building activities through the Reconciliation, healing and renewal programme.

NKPI 4 4 - None

4.3.3. PERFORMANCE INDICATORS PROGRAMME 3

Performance IndicatorAudited outcome 2014/15


2015/16

Actual Achievement

2015/16


actualComment on deviation

BRANCH PARLIAMENTARY OPERATIONS

SUB-PROGRAMME: LOGISTICS (MEMBERS)

1.1 Number of reports produced on Members Logistics coordinated and facilitated.

4 4 4 - None

SUB-PROGRAMME: PARLIAMENTARY ACTIVITIES (MEMBERS’ EXPENDITURE)

1.1 Number of reports produced on the facilitation of capacity building programmes /training for MPL’s.

4 4 4 - None




2015/16

Actual Achievement

2015/16



1.2 Number of reports produced on the facilitation of MPL’s participation in International, regional and provincial events.

3 4 3 1 The Legislature officially opened on the 6th March 2016, i.e. the last month of the quarter; therefore, no facilitation of MPL’s participation in International, regional and provincial events was done.

SUB-PROGRAMME HOUSE PROCEEDINGS

1.1 Number of reports produced on policy documents tabled in the House from provincial departments, entities and municipalities.

3 2 4 -2 Some Municipalities submitted their Annual Reports late in the succeeding quarters not on the prescribed period of reporting

This affected the second KPI where 3 debates where scheduled by the Programming ommittee instead of 2 times.

1.2. Number of reports produced on policy documents debated in the House from provincial departments, entities and municipalities.

3 2 3 -1 Some Municipalities submitted their Annual Reports late in the succeeding quarters not on the prescribed period of reporting

This affected the second KPI where 3 debates where scheduled by the Programming ommittee instead of 2 times.

1.3 Number of reports produced for tabling the Quarterly Reports submitted by the provincial departments.

3 4 4 - None

1.4. Number of reports produced for debates on the Quarterly Reports submitted by the provincial departments.

2 4 1 3 Debates on Quarterly Reports did not occur as anticipated.

1.5 Number of reports on the oversight activities submitted for tabling by Standing and Portfolio Committees.

2 4 4 - None

1.6. Number of reports on the oversight activities submitted for debates by Standing and Portfolio Committees.

1 4 4 - None




2015/16

Actual Achievement

2015/16



1.7 Number of reports produced on Bills tabled in the House.

3 4 4 - None

1.8 Number of Hansard booklets produced.

5 2 - 2 The Language Services Unit is understaffed and the Editor is still dealing with the backlog.

SUB-PROGRAMME: NCOP LIAISON SERVICES

1.1 Number of reports prepared regarding secretarial support provided to Provincial Delegates

4 4 4 - None

1.2 Number of reports submitted to the Secretary regarding the NCOP outreach programmes

2 4 2 2 The scheduled outreach programmes were postponed and not held within the financial year 2015/16

1.3 Number of reports produced on Bills referred in the Legislature

2 4 4 - None

BRANCH COMMITTEES, POLICY AND RESEARCH SERVICES

SUB-PROGRAMME: COMMITTEES AND POLICY

1.1 Number of reports produced on the Portfolio and Standing Committee Oversight activities.

3 4 4 - None

1.2 Number of reports prepared on the stakeholder interaction regarding the law making process.

3 4 4 - None

1.3 Number of reports prepared on research services provided to Legislature and its Committees.

3 4 4 - None

Policy Division

2.1 Number of reports prepared on the facilitation of the development and reviewing of the institutional policies.

NKPI 4 4 - None

2.2 Number of reports prepared on the provision of policy analysis to the Legislature.

NKPI 4 4 - None

SUB-PROGRAMME: LIBRARY, RESEARCH AND INFORMATION SERVICES

1.1 Number of reports produced on Pre-oversight research provided to Portfolio and Standing Committees.

4 4 4 - None




2015/16

Actual Achievement

2015/16



1.2 Number of reports produced on proactive research projects conducted.

3 4 3 1 Changes within in the Legislature Programme, reprioritisation of Committees focus areas and budget constraints within the Library, Research and Information Services division led to less proactive research projects conducted.

1.3 Number of reports produced on the Library activities.

4 4 4 - None

BRANCH PUBLIC PARTICIPATION, EDUCATION AND PETITIONS

SUB-PROGRAMME PUBLIC PARTICIPATION

1.1 Number of reports produced on public participation events organised.

4 4 4 - None

1.2 Number of reports prepared on sectoral parliaments hosted.

4 4 4 - None

Education & Petition Division

2.1 Number of reports prepared on petitions received.

4 4 1 3 Petitions were not submitted to the Legislature for processing as initially anticipated.

2.2 Number of reports produced on educational workshops and awareness campaigns.

NKPI 4 4 - None

3.1 Number of reports produced on the Reconciliation, healing and renewal activities.

NKPI 4 4 - None

Legend:

NKPI: New Key Performance Indicators (NKPI) were utilised for the 2015/16 financial year. As a result, audited figures for 2014/15 are not available for.

4.3.4. STRATEGIES TO OVERCOME AREAS OF UNDER PERFORMANCE

- The North West Provincial Legislature will consider restructuring and clustering Committees of the Legislature to address the shortage of support staff and fill all the vacant priority positions.

- Workshops to be conducted with Parliamentary Liaison Officers on the PFMA, The Constitution of South Africa, The Standing Rules of the Legislature and the Tabling Guide to PLO’s and Municipalities.

- Outreach programmes shall be intensified with the aim to raise awareness on the public’s right to submit petitions to the Legislature.

- To optimise research activities, procedures shall be developed regarding the research archiving system.


4.3.5. CHANGES TO PLANNED TARGETS

For the year under review, no changes occurred to the performance indicators and targets.

4.3.6. LINKING PERFORMANCE WITH BUDGETS

2015/16 2014/15

Details per Sub-Programme R’000

Final Appropriation

Actual Expenditure Variance Final

Appropriation Actual

Expenditure

R’000 R’000 R’000 R’000

1 Logistics (Members) 46 197 45 696 501 45 216 43 992

2 Exposure To Parliament Activities 2 475 664 1 811 2 366 556

3 House Proceedings 3 192 3 533 (341) 3 052 1 322

4 Committees Services 56 002 61 457 (5 455) 68 408 55 540

5 NCOP Liaison Support 1 546 1 558 (12) 1 478 93

6 Public Participation 20 243 13 394 6 849 40 009 37 838

7 Library, Research And Information Services 2 864 4 255 (1 391) 2 260 150

TOTAL 132 519 130 557 1 962 162 789 139 491

5. TRANSFER PAYMENTS

5.1. TRANSFER PAYMENTS TO PUBLIC ENTITIES

No transfer payments to public entities occurred during the year under review.

5.2. TRANSFER PAYMENTS TO ALL ORGANISATIONS OTHER THAN PUBLIC ENTITIES

Name of transferee

Type of organisation

Purpose for which the funds were used

Did the dept. comply with s 38 (1) (j) of

the PFMA

Amount transferred

(R’000)

Amount spent by the entity

Reasons for the funds unspent by the entity

ANC Political Party Political Party Funding,

Constituency Allowance,

Research Allowance, and Secretarial Allowance

Yes 22 064 Amount cannot be determined as entity is still busy with the preparation of their financial statements

Amount cannot be determined as entity is still busy with the preparation of their financial statements

EFF Political Party Political Party Funding,

Constituency Allowance, Research Allowance, and

Secretarial Allowance.

Yes 5 117 Amount cannot be determined as entity is still busy with the preparation of their financial statements.

Amount cannot be determined as entity is still busy with the preparation of their financial statements.

DA Political Party Political Party Funding,

Constituency Allowance, Research Allowance, and Secretarial Allowance.



VF+ Political Party Political Party Funding,

Constituency Allowance, Research Allowance, and Secretarial Allowance.




6. CONDITIONAL GRANTS

6.1. CONDITIONAL GRANTS AND EARMARKED FUNDS PAID

None

6.2. CONDITIONAL GRANTS AND EARMARKED FUNDS RECEIVED

None

7. DONOR FUNDS

7.1. DONOR FUNDS RECEIVED

None

8. CAPITAL INVESTMENT

8.1. CAPITAL INVESTMENT, MAINTENANCE AND ASSET MANAGEMENT PLAN

None


PART cgovernance


1. INTRODUCTION

The Legislature has two (2) governing structures, namely the Rules Committee and the Audit Committee. The Rules Committee is the supreme governing body that develops policy direction and the strategic plan of the Legislature.

The Audit Committee is fully functional and comprises five (5) members.

2. RISK MANAGEMENT

2.1. INTRODUCTION

Section 7(c) of the Financial Management of Parliament and Provincial Legislatures Act, 2009, (Act No. 10 of 2009) requires of an Accounting Officer to: “Ensure that the Parliament maintains an effective, efficient and transparent system of financial management, risk management, internal control and internal audit.’’

The extension of the general responsibilities, in terms of Section 11 of the FMPPL, to all managers is the cor-nerstone of institutionalizing risk management within the legislative sector. It establishes the responsibility for risk management at all levels of management, extending it beyond the roles of the Accounting Officers’ in this regard.

The implementation of risk management is further supported by Treasury Regulations 3.2.1 whereby:

“The Accounting Officer must ensure that a risk assessment is conducted regularly to identify emerging risks of the institution.’’

2.2. RISK MANAGEMENT ACTIVITIES

For the financial year under review, the Risk Management Division managed to have the following policy documents approved by the Secretary (Accounting Officer):

- Risk Management Strategy;

- Risk Management Policy; and

- Risk Management Committee Charter.

An annual strategic risk assessment was conducted and finalized in the 1st quarter of the financial year. This resulted in the strategic risk assessment report approved and signed by the Accounting Officer. The Risk Management Division reviewed and monitored the implementation of the strategic risk register. Emerging risks identified were adequately addressed and treatment plans prioritized to address such risks.

The institution has appointed a Risk Management Committee which comprises of five (5) members and is chaired by an Executive Manager. The committee is fully functional and has held three (3) meetings during the year under review and managed to execute it responsibilities, amongst others, recommending the ap-proval of the Risk Management Policy documents and strategic risk register. The Internal Audit has however, identified weaknesses within the institutional risk appetite and tolerance level, this will be addressed in the next financial year.

Risk management is a standing agenda item within the Audit Committee meetings. The Risk Management Committee reports on a quarterly basis to the Audit Committee. The Audit Committee reviewed the Risk Management Policy documents and monitored the implementation of the strategic risk register.


Monitoring the implementation of the strategic risk register resulted in the implementation of 39% of the treatment plans, 46% of the treatment plans were not implemented, whilst 15% were in progress. The rea-sons for non-implementation of the treatment plans were:

- Non-alignment of strategic objective to the treatment plans (i.e. strategic risk assessment done outside of the planning process);

- Treatment plans not costed/ budgeted for; and

- Treatment not related/relevant to our strategic objectives.

As means to address the above anomalies and improve the institutional risk management culture, the Risk Management Committee recommended that:

- Integration of planning and risk management processes (i.e. review of the APP) should be done concurrently with the Strategic Risk Assessment;

- Managers to report monthly and quarterly on the progress made regarding the implementation of the treatments plans;

- Risk management should form part of management’s performance agreements.

The risk management function and institutional management have confidence in the progress made on developing and improving the institutional risk management culture. The institution will gradually strive to improve its system and processes to enhance sound corporate governance.

3. FRAUD AND CORRUPTION

The institution has developed an anti-fraud & corruption strategy which is in a draft phase. The strategy was referred back by the Policy Formulation Committee due to inconsistencies and has such been amended and referred back to the Policy Formulation Committee for approval. The finalisation and implementation of the strategy shall be achieved in the new financial year 2016/17.

The Risk Management Committee has requested the Accounting Officer to prioritize the approval of the strategy and that it be treated as a matter of urgency as this has been long outstanding.

The institution was unable to conduct a fraud risk assessment, as a result of limited capacity (human) within the division.

4. MINIMISING CONFLICT OF INTEREST

The North West Provincial Legislature has for the past years embarked on a process to minimise conflict of interests amongst its staff members, as well as the Members of the Provincial Legislature.

Within the Administration, a form was developed permitting staff members to disclose their business inter-ests. Where staff members have business interest, formal permission to do so is sought from the Executive Authority, The Speaker of the NW Provincial Legislature.

In addition to the above, all members of the Supply Chain Management unit and members of the various bid committees complete additional conflict of interest forms.

Should there be a conflict of interest during the sitting of a bid committee; the individual concerned would be excused from such a sitting.


5. CODE OF CONDUCT

The North West Provincial Legislature expects the highest standards of ethical conduct and professional behavior of its employees. As representatives of the NWPL, employees have a responsibility to uphold the good name and values of the NWPL.

The Legislature has a code of conduct that highlights the values and principles that underpins employees of the Legislature’s behavior in the work environment and also regulates the manner in which gifts and/or benefits may be received and given and the disclosure requirements thereof.

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES

The Legislature has a unit that devotes its time to the wellbeing of the staff members, namely the Employee Wellness Unit. For the year under review a number of employee events to raise awareness on the health fac-tors affecting the Legislature employees were successfully held.

Furthermore, no injuries on duty were reported.

7. PORTFOLIO COMMITTEES

DATE OF MEETING PURPOSE OF THE MEETING OUTCOME OF THE MEETING

29 April 2015 Briefing by the North West Provincial Legislature on their 2015/16 Annual Performance Plan.

Meeting was successful, committee issued recommendations.

06 May 2015 Briefing by NWPL on their Strategic Plan 2015/16 Meeting was successful and the committee issued recommendations.

02 September 2015 Briefing by NWPL of the draft NWPL 2016/17 and first quarterly performance information report.

Meeting was successful and the committee issued recommendations for the NWPL to incorporate the concerns raised by the AG.

27 October 2015 Briefing the NWPL on the Annual Report 2014/15. Meeting was successful and the committee issued recommendations.

11 November 2015 Progress on the implementation of Sector Oversight Model and 2nd Quarter Report 2015/16.

Meeting was successful and the committee issued recommendations.

04 March 2016 Presentation of the final draft APP of the NWPL for 2016/17.

Meeting was successful, however, the NWPL were instructed to correct the budget to include funds to be received from Provincial Treasury regarding the transfer of the NWPL Building from the Department of Public Works to the institution for the new financial year (2016/17).

16 March 2016 Presentation of the final draft 2016/17 APP of the NWPL.

Meeting was successful, with recommendations from the committee.


8. scopa resolutions

For the 2014/15 financial year, no SCOPA Resolutions were tabled.

9. PRIOR MODIFICATIONS TO AUDIT REPORTS

Upon receipt of the AG’s audit report, management devised an action plan to address the audit findings related to matters of emphasis from the audit report. This information is tabled below:

Nature of qualification, disclaimer, adverse opinion and matters of non-

compliance

Financial year in which it first

arose

Progress made in clearing / resolving the matter

Irregular Expenses 2009 Condonation process has started. Various stakeholders need to be engaged for successful completion. Meetings and workshops are being set up to resolve this matter.

Payments within 30 days Ongoing Number of payments after 30 days have reduced during this year. Ongoing effort is being made to settle invoices within 30 days of receipt.

ORACLE Inception The Oracle Service provider’s contract was terminated. Oracle SA was appointed to assist NWPL to reconfigure the system and implement the necessary controls and modules for efficient and effective processing and reporting system.

10. INTERNAL CONTROL UNIT

The Legislature does not have an Internal Control Unit. Instead there is Internal Audit Division within the Office of the Secretary, which is a resource available to management for assurance on the effectiveness and efficiency of governance, risk management and internal control processes.

11. INTERNAL AUDIT AND AUDIT COMMITTEE

Internal auditing is a resource available to management and the Audit Committee to provide objective assur-ance on the adequacy and effectiveness of governance, risk management and control processes.

The Internal Audit division reports administratively to the Accounting Officer and functionally to the Audit Committee.

During the period under review, Internal Audit reviewed the internal control processes, risk management and performance information. Recommendations were issued where gaps were identified. Eight (8) audits were planned for the financial year 2015/16 and twelve (12) audits were conducted. The target was exceeded due to audits rolled over from the 2014/15 financial year and the review of the Annual Financial Statement. These audits were included in the audit plan and the inclusions were approved by the Audit Committee.


AUDIT COMMITTEE

The Audit Committee was appointed for the period under review, as an independent body that provides an oversight role on the system of internal control, risk management and governance. The Audit Committee reports to the Speaker. The table below discloses relevant information on the Audit Committee members and attendance of meetings.

Name Qualifications Internal or external member

Date appointed

No. of Meetings attended with management

No. of Meetings attended with the

Speaker

Ms J Brown B.com External Member Reappointed 01 Nov. 2014

4 3

Mr T Mokgatle National Diploma Public Admin

External Member Reappointed 01 Nov. 2014

4 3

Mr F Van Der Westhuizen DIP IURIS

B.IUIRIS

LL.B

External Member 01 Nov. 2014 4 -

Ms L Motlhamme B.Com

B Compt. Hon.

CTA

CASA

External Member 01 Nov. 2014 4 -

Ms M Nkomo B.Com

B.Com(Hon.)

M.Com

External Member 01 Nov. 2014 2 1

12. AUDIT COMMITTEE REPORT

We are pleased to present our report for the period ended 31 March 2016.

12.1. AUDIT COMMITTEE MEMBERS

- Ms. J. Brown – Chairperson

- Mr. T.G. Mokgatle

- Ms. L. Motlhamme

- Mr. F. Van der Westhuizen

- Ms. M. Nkomo

12.2. AUDIT COMMITTEE RESPONSIBILITY

The Audit Committee reports that it has complied with its responsibilities arising from section 48 of the Fi-nancial Management of Parliament and Provincial Legislatures Act 2009 (Act No.10 of 2009) as amended (FMPPLA) and Treasury Regulation 3.1.13 and 18.3.1.

The Audit Committee also reports that it has adopted appropriate formal terms of reference as its audit com-mittee charter, has regulated its affairs in compliance with this charter and has discharged all its responsi-bilities as contained therein (unless otherwise mentioned).


12.3. THE EFFECTIVENESS OF INTERNAL CONTROL

The system of internal control was not entirely effective for the period under review. During the year under review, several deficiencies in the system of internal control and/or deviations including IT controls, were reported by the internal auditors and the Auditor-General of South Africa. In certain instances, the matters reported previously have not been fully and satisfactorily addressed.

12.4. IN-YEAR MANAGEMENT AND MONTHLY/QUARTERLY REPORT

The Audit Committee is partially satisfied with the content and quality of monthly and quarterly reports issued during the year under review. Some of the quarterly reports were returned due to lack of reliability.

12.5. INTERNAL AUDIT

The Audit Committee is partially satisfied that the internal audit function operated effectively and addressed the risks pertinent to the Legislature in its audits. The internal audit has reviewed the internal controls, performance information and risk management during the period under review. However, some of the rec-ommendations emanating from internal audits were not adhered to by management. The Audit Committee’s concerns were reported to the Hon. Speaker of the Legislature in the bi-annual reports.

12.6. RISK MANAGEMENT

Risk management policies and strategies were developed; and the risk assessment was conducted by the Legislature during the year under review. The Audit Committee is partially satisfied with the effectiveness of the risk management process. The risk management process in the Legislature has not yet progressed to an effective system that manages risk in terms of legislation operation, financial and performance reporting and compliance with laws and regulations. Areas that should be prioritized in the coming financial year are:

- Proper and resourced risk management functions;

- Timely performance of annual strategic risk assessment;

- Approval and immplementation of the Anti-fraud and Corruption Strategy;

- That risk management be included in the performance agreements of all managers and be reported on a monthly and quarterly basis;

- Review and regular discussion of risk registers by management; and

- Review of the APP to be done concurrently with the Strategic Risk Assessment.

12.7. PERFORMANCE INFORMATION

The Audit Committee is partially satisfied that the performance information reports are a fair reflection of the operational status of the Legislature as set out in the Strategic Plan and in a manner as prescribed by Na-tional Treasury. The performance information was neither timely submitted nor timely validated and was not linked to the financial report. The management did not adhere to some of Internal Audit’s recommendations.

12.8. EVALUATION OF THE FINANCIAL STATEMENTS DATED 31 MARCH 2016

The Audit Committee has:

- Reviewed and discussed the annual financial statements with the AG and NWPL Management;

- Reviewed and discuss the information of the Pre-determined ojectives to be included in the annual report; and

- Reviewed the Legislature’s compliance with Legal and regulatory provisions.


12.9. AUDITOR-GENERAL SOUTH AFRICA

The Audit Committee liaised with the Auditor-General of South Africa during the period under review.

We have reviewed the Legislature’s implementation plan for audit issues raised in the previous year and we are partially satisfied that the matters have been, to a significant extent, adequately resolved.

The Audit Committee concurs with and accepts the conclusions of the AGSA report on the Annual Financial Statements and is of the opinion that the audited Annual Financial Statements be accepted and read to-gether with the report of the AGSA.

…………………………………………Signature

Ms. Jeanne-Marie Brown

Chairperson of the Audit Committee


PART dHUMAN RESOURCE MANAGEMENT


1. INTRODUCTION

2. OVERVIEW OF HUMAN RESOURCES

The Legislature houses 211 staff members and 33 Members of the Legislature.

This section of the report relates to all areas within Human Resource. This includes, but is not limited to sick leave, annual performance bonuses and employment equity but to name a few.

3. HUMAN RESOURCE OVERSIGHT STATISTICS

3.1. PERSONNEL RELATED EXPENDITURE

The following tables summarises the final audited personnel related expenditure by programme and by salary bands. In particular, it provides an indication of the following:

- Amount spent on personnel; and

- Amount spent on salaries, overtime, homeowner’s allowances and medical aid.

TABLE 3.1.1 PERSONNEL EXPENDITURE BY PROGRAMME FOR THE PERIOD 01 APRIL 2014 – 31 MARCH 2016

Total Expenditure

(R’000)

Personnel Expenditure

(R’000)

Training Expenditure

(R’000)

Professional and Special Services

Expenditure (R’000)

Personnel Expenditure as a % of total expenditure (%)

Average personnel cost per employee

(R’000)

Staff 118 590 114 401 4 189 - 96% 562

Members (MPLs)

26 995 26 995 - - 100% 1 174

TOTAL 145 585 141 396 4 189 - 97% 670

TABLE 3.1.2 PERSONNEL COSTS BY SALARY BAND FOR THE PERIOD 1 APRIL 2015 AND 31 MARCH 2016

Salary band Personnel expenditure (R’000)

% of total personnel cost

No. of employees

Average personnel cost per employee (R’000)

Lower skilled (Levels 1-2)

Skilled (level 3-5)

Highly skilled production (levels 6-8)

Highly skilled supervision (levels 9-12)

Senior and Top management (levels 13-16)

TOTAL

The above table does not include the 22 MPLs.


TABLE 3.1.3 SALARIES, OVERTIME, HOME OWNERS ALLOWANCE AND MEDICAL AID BY PROGRAMME FOR THE PERIOD 1 APRIL 2015 AND 31 MARCH 2016

Programme

Salaries Overtime Home Owners

Allowance Medical Aid

Amount (R’000)

Salaries as a % of personnel

costs (%)

Amount (R’000)

Overtime as a % of personnel

costs (%)

Amount (R’000)

HOA as a % of personnel

costs (%)

Amount (R’000)

Medical aid as a % of personnel

costs (%)

Staff

Members (MPLs)

TOTAL

TABLE 3.1.4 SALARIES, OVERTIME, HOME OWNERS ALLOWANCE AND MEDICAL AID BY SALARY BAND FOR THE PERIOD 1 APRIL 2015 AND 31 MARCH 2016

Salary band

Salaries Overtime Home Owners Allowance Medical Aid

Amount (R’000)

Salaries as a % of personnel costs (%)

Amount (R’000)

Overtime as a % of personnel costs (%)

Amount (R’000)

HOA as a % of personnel

costs (%)Amount (R’000)

Medical aid as a % of personnel costs (%)

Skilled (level 1-2) - - - - - - - -

Skilled (level 3-5)

Highly skilled production (levels 6-8)Highly skilled supervision (levels 9-12Senior management (level 13-16)

TOTAL

The above table does not include the 22 MPLs

3.2. EMPLOYMENT AND VACANCIES

The tables in this section summarise the position with regard to employment and vacancies.

The following tables summarise the number of posts on the establishment, the number of employees, the vacancy rate, and whether there are any staff that are additional to the establishment.

This information is presented in terms of three key variables:

- Programme;

- Salary band; and

- Critical occupations.

The vacancy rate reflects the percentage of posts that are not filled.

TABLE 3.2.1 EMPLOYMENT AND VACANCIES BY PROGRAMME AS AT 31 MARCH 2016

Programme Number of posts on approved establishment

Number of posts filled

Vacancy Rate(%)

Number of employees additional to the establishment

1: Administration 226 157 31% -

2. Legislature Operations 82 54 34% -

TOTAL 308 211 31% -



TABLE 3.2.2 EMPLOYMENT AND VACANCIES BY SALARY BAND AS AT 31 MARCH 2016

Salary band Number of posts on approved establishment

Number of posts filled Vacancy Rate Number of employees

additional to the establishment

Lower skilled ( 1-2) - - - -

Skilled (3-5) 30 24 20% -

Highly skilled production (6-8) 148 104 30% -

Highly skilled supervision (9-12) 82 61 26% -

Senior management (13-16) 48 22 54% -

TOTAL 308 211 31% -


TABLE 3.2.3 EMPLOYMENT AND VACANCIES BY CRITICAL OCCUPATIONS AS ON 31 MARCH 2016

Critical occupation

Number of posts on approved establishment

Number of posts filled

Vacancy Rate (%)

Number of employees additional to the establishment

Administration 226 146 35% -

Legislature 82 65 21% -

TOTAL 308 211 31% -

3.3. FILLING OF SMS POSTS

TABLE 3.3.1 SMS POST INFORMATION AS AT 31 MARCH 2016

SMS LevelTotal number of

funded SMS posts Total number of SMS posts filled

% of SMS posts filled %)

Total number of SMS posts vacant

% of SMS posts vacant %)

Director-General/ Head of Department

- - - - -

Salary Level 16 1 - - 1 100%

Salary Level 15 2 2 100% - -

Salary Level 14 7 5 71% 2 29%

Salary Level 13 16 15 94% 1 6%

TOTAL 26 22 85% 4 15%


TABLE 3.3.2 SMS POST INFORMATION AS AT 30 SEPTEMBER 2015

SMS Level Total number of funded SMS posts

Total number of SMS posts filled

% of SMS posts filled

Total number of SMS posts vacant

% of SMS posts vacant

Director-General/ Head of Department

- - - - -

Salary Level 16 1 - - 1 100%

Salary Level 15 2 2 100% - -

Salary Level 14 7 5 71% 2 29%

Salary Level 13 16 15 94% 1 6%

TOTAL 26 22 85% 4 15%



TABLE 3.3.3 ADVERTISING AND FILLING OF SMS POSTS FOR THE PERIOD 1 APRIL 2015 AND 31 MARCH 2016

SMS Level Total number of funded SMS posts

Total number of SMS posts filled

% of SMS posts filled

Total number of SMS posts

vacant % of SMS

posts vacant

Director-General/ Head of Department - - - - -

Salary Level 16 1 - - 1 100%

Salary Level 15 2 2 100% - -

Salary Level 14 7 5 71% 2 29%

Salary Level 13 18 15 94% 1 6%

TOTAL 26 22 85% 4 15%


TABLE 3.3.4 REASONS FOR NOT HAVING COMPLIED WITH THE FILLING OF FUNDED VACANT SMS - ADVERTISED WITHIN 6 MONTHS AND FILLED WITHIN 12

MONTHS AFTER BECOMING VACANT FOR THE PERIOD 1 APRIL 2015 AND 31 MARCH 2016

Reasons for vacancies not advertised within six months

N/A

Reasons for vacancies not filled within six months

N/A

TABLE 3.3.5 DISCIPLINARY STEPS TAKEN FOR NOT COMPLYING WITH THE PRESCRIBED TIMEFRAMES FOR FILLING SMS POSTS WITHIN 12 MONTHS FOR THE PERIOD 1 APRIL 2015 AND 31 MARCH 2016

Reasons for vacancies not advertised within six months

N/A

Reasons for vacancies not filled within six months

N/A

3.4. JOB EVALUATION

Consultants were hired to conduct the job evaluation process during the year. The report was issued towards the end of the 2015/16 financial year. The implementation thereof shall only be effected within the 2016/17 financial report.


3.5. EMPLOYMENT CHANGES

Turnover rates provide an indication of trends in the employment profile of the institution. The following tables provide a summary of turnover rates by salary band and critical occupations.

TABLE 3.5.1 ANNUAL TURNOVER RATES BY SALARY BAND

Salary Band Number of employees at beginning of period-

April 2015

Appointments and transfers into the

department

Terminations and transfers out of the

department

Turnover rate

Lower skilled ( Levels 1-2) - - -

Skilled (Levels3-5) 25 - 1 4%

Highly skilled production (Levels 6-8) 96 11 3 8%

Highly skilled supervision (Levels 9-12) 65 -2 6 6%

Senior Management Service Bands A (13) 13 2 - 15%

Senior Management Service Bands B (14) 7 - 2 29%

Senior Management Service Bands C (15) 1 1 - 100%

Senior Management Service Bands D (16) 1 - 1 100%

Contracts * - - - -

TOTAL 208 16 13 1%

* The NWPL has 11 individuals employed on a contract basis. These have already been included in the above-noted salary band.


TABLE 3.5.2 ANNUAL TURNOVER RATES BY CRITICAL OCCUPATION FOR THE PERIOD 1 APRIL 2015 AND 31 MARCH 2016

Critical occupation Number of employees at beginning of period-April

2015

Appointments and transfers into the

department

Terminations and transfers out of the

department

Turnover rate

Admin 151 10 4 40%

Legislature 57 6 9 5%

TOTAL 208 16 13 1%

TABLE 3.5.3 REASONS WHY STAFF LEFT THE DEPARTMENT Termination Type Number % of Total Resignations

Death 1 8%

Resignation 4 31%

Expiry of contract 2 15%

Dismissal – operational changes - -

Dismissal – misconduct 1 8%

Dismissal – inefficiency - -

Discharged due to ill-health - -

Retirement 4 31%

Transfer to other Public Service Departments - -

Other 1 8%

TOTAL 13 100%

Total number of employees who left as a % of total employment 6%



TABLE 3.5.4 PROMOTIONS BY CRITICAL OCCUPATION

Not applicable.

TABLE 3.5.5 PROMOTIONS BY SALARY BAND

Not applicable.

3.6. EMPLOYMENT EQUITY

TABLE 3.6.1 TOTAL NUMBER OF EMPLOYEES (INCLUDING EMPLOYEES WITH DISABILITIES) IN EACH OF THE FOLLOWING OCCUPATIONAL CATEGORIES AS AT 31 MARCH 2016

Occupational categoryMale Female

TotalAfrican Coloured Indian White African Coloured Indian White

Legislators, senior officials and managers 14 - - - 8 - - - 22

Professionals (L 9 -12) 25 - 1 1 31 3 - - 61

Technicians and associate professionals ( L6 – 8)

37 - - - 64 1 - 2 104

Clerks (L3 – 5) 6 - - - 1 - - - 7

Service and sales workers - - - - - - - - -

Skilled agriculture and fishery workers - - - - - - - - -

Craft and related trades workers - - - - - - - - -

Plant and machine operators and assemblers - - - - - - - - -

Elementary occupations ( Households) 7 - - - 10 - - - -

TOTAL 89 - 1 1 114 4 - 2 211

Employees with disabilities

# Legislators are not employees but elected Members of the Legislature


TABLE 3.6.2 TOTAL NUMBER OF EMPLOYEES (INCLUDING EMPLOYEES WITH DISABILITIES) IN EACH OF THE FOLLOWING OCCUPATIONAL BANDS ON 31 MARCH

2016

Occupational BandMale Female

TotalAfrican Coloured Indian White African Coloured Indian White

Top Management(L14-L16) 5 - - - 2 - - - 7

Senior Management(L13) 9 - - - 6 - - - 15

Professionally qualified and experienced specialists and mid-management ( L9 -12)

25 1 - 1 31 3 - - 61

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents (L6 – 8)

37 - - - 64 1 - 2 104

Semi-skilled and discretionary decision making(L3 -5)

6 - - - 1 - - - 7

Unskilled and defined decision making 7 - - - 10 - - - 17

TOTAL 89 1 - 1 114 4 - 2 211



TABLE 3.6.3 RECRUITMENT

Occupational Band Male Female Total

African Coloured Indian White African Coloured Indian White

Top Management - - - - 1 - - - 1

Senior Management 1 - - - - - - - 1

Professionally qualified and experienced specialists and mid-management

1 - - - 1 - - - 2

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents

5 - - - 4 - - - 9

Semi-skilled and discretionary decision making

- - - - - - - - -

Unskilled and defined decision making - - - - - - - - -

TOTAL 7 - - - 6 - - - 13

Employees with disabilities - - - - - - - - -


TABLE 3.6.4 PROMOTIONS

Not applicable

TABLE 3.6.5 TERMINATIONS

Occupational Band Male Female Total


Top Management 1 - - - 1 - - - 2

Senior Management - - - - - - - - -

Professionally qualified and experienced specialists and mid-management

4 - - - - - - - 4

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents

3 - - - - - - - 3

Semi-skilled and discretionary decision making

4 - - - - - - - 4

Unskilled and defined decision making - - - - - - - - -

TOTAL 12 - - - 1 - - - 13

Employees with Disabilities - - - - - - - - -

The above table does not include the 22 Members of the Legislature (MPLs).

TABLE 3.6.6 DISCIPLINARY ACTION

Disciplinary action Male Female

African Coloured Indian White African Coloured Indian White Total

Disciplinary Action Taken 6 - - - 3 - - - 9


TABLE 3.6.7 SKILLS DEVELOPMENT FOR THE PERIOD 01 APRIL 2015 – 31 MARCH 2016

Occupational category Male Female Total


Legislators, senior officials and managers 14 - - - 9 - - - 23

Professionals 25 - 1 1 31 3 - - 61

Technicians and associate professionals 37 - - - 64 1 - 2 104

Clerks 6 - - - 1 - - - 7

Service and sales workers - - - - - - - - -

Skilled agriculture and fishery workers - - - - - - - - -

Craft and related trades workers - - - - - - - - -

Plant and machine operators and assemblers - - - - - - - - -

Elementary occupations 7 - - - 10 - - - 17

TOTAL 89 - 1 1 114 4 - 2 212

Employees with disabilities 1 - - - - - - - 1


3.7. SIGNING OF PERFORMANCE AGREEMENTS BY SMS

TABLE 3.7.1 SIGNING OF PERFORMANCE AGREEMENTS BY SMS MEMBERS AS ON 31 MAY 2015

SMS LevelTotal number

of funded SMS posts

Total number of SMS

members

Total number of signed performance

agreements

Signed performance agreements as % of total number of SMS members

Director-General/ Head of Department - - - -

Salary Level 16 1 1 - -

Salary Level 15 2 2 2 4%

Salary Level 14 7 5 5 22%

Salary Level 13 16 15 15 65%

TOTAL 26 23 22 96%


TABLE 3.7.2. REASONS FOR NOT HAVING CONCLUDED THE PERFORMANCE AGREEMENTS

Not applicable.

TABLE 3.7.3 DISCIPLINARY STEPS TAKEN AGAINST SMS MEMBERS FOR NOT HAVING CONCLUDED PERFORMANCE AGREEMENTS AS ON 31 MARCH 2016

Not applicable.


3.8. PERFORMANCE REWARDS

TABLE 3.8.1 PERFORMANCE REWARDS BY RACE, GENDER AND DISABILITY FOR THE PERIOD 1 APRIL 2015 TO 31 MARCH 2016

Race and GenderBeneficiary Profile Cost

Number of beneficiaries

Number of employees

% of total within group Cost (R’000) Average cost per

employee

African

Male 42 90 47%

Female 88 114 77%

Coloured

Male - - - - -

Female 3 3 100%

Indian

Male 1 1 100%

Female - - - - -

White

Male 1 1 100%

Female 2 2 100%

TOTAL 137 211 65%


TABLE 3.8.2 PERFORMANCE REWARDS BY SALARY BAND FOR PERSONNEL BELOW SENIOR MANAGEMENT SERVICE FOR THE PERIOD 1 APRIL 2015 TO 31

MARCH 2016 -

Salary band

Beneficiary Profile Cost Total cost as a % of the total

personnel expenditure

Number of beneficiaries

Number of employees

% of total within salary

bandsTotal Cost

(R’000)Average cost per employee

(R’000)

Lower Skilled (Levels 1-2) - - - - - -

Skilled (level 3-5) 15 23 65% 115 768

Highly skilled production (level 6-8) 72 101 71% 927 128

Highly skilled supervision (level 9-12) 50 62 81% 1249 28

TOTAL 137 211 2 472


TABLE 3.8.2 PERFORMANCE REWARDS BY SALARY BAND FOR PERSONNEL BELOW SENIOR MANAGEMENT SERVICE FOR THE PERIOD 1 APRIL 2015 TO 31

MARCH 2016

Salary bandBeneficiary Profile Cost Total cost as a

% of the total personnel

expenditureNumber of

beneficiariesNumber of employees

% of total within salary bands

Total Cost (R’000)

Average cost per employee (R’000)

Lower Skilled (Levels 1-2) - - - - - -

Skilled (level 3-5) 15 23 65%

Highly skilled production (level 6-8)

72 101 71%

Highly skilled supervision (level 9-12)

50 62 81%

TOTAL 137 211



TABLE 3.8.3 PERFORMANCE REWARDS BY CRITICAL OCCUPATION FOR THE PERIOD 1 APRIL 2015 TO 31 MARCH 2016

None

TABLE 3.8.4 PERFORMANCE RELATED REWARDS (CASH BONUS), BY SALARY BAND FOR SENIOR MANAGEMENT SERVICE FOR THE PERIOD 1 APRIL 2015 TO 31

MARCH 2016

During the year under review, senior management did not receive performance related rewards.

3.9. FOREIGN WORKERS

The Legislature does not have any foreign workers.

3.10. LEAVE UTILISATION

The following tables provide an indication of the use of sick leave and disability leave. In both cases, the estimated cost of the leave is also provided.

TABLE 3.10.1 SICK LEAVE

Salary Band Total days

% Days with Medical

certification

Number of Employees using sick

leave

% of total employees using sick

leave

Average days per employee

Estimated Cost

(R’000)

Lower Skills (Level 1-2) - - - - - -

Skilled (levels 3-5) 49 - 6 25% 8 22

Highly skilled production (levels 6-8) 446 - 38 37% 12 292

Highly skilled supervision (levels 9 -12) 150 - 30 49% 5 204

Top and Senior management (levels 13-16) 57 - 9 41% 6 95

TOTAL 702 - 83 39% 8 613


TABLE 3.10.2 DISABILITY LEAVE (TEMPORARY AND PERMANENT) FOR THE PERIOD 1 JANUARY 2015 TO 31 DECEMBER 2015

None

TABLE 3.10.3. ANNUAL LEAVE.

Salary Band Total days taken Number of Employees using annual leave Average per employee

Lower skilled (Levels 1-2) - -

Skilled Levels (3-5) 428 22 19

Highly skilled production (Levels 6-8) 2 086 103 20

Highly skilled supervision(Levels 9-12) 1 377 67 21

Senior management (Levels 13-16) 465 28 17

TOTAL 4 356 220 20


TABLE 3.10.4 CAPPED LEAVE

None


TABLE 3.10.5 LEAVE PAYOUTS

As per the Legislature Leave Policy, leave days not utilised are forfeited, hence no leave payouts.

3.11. HIV/AIDS & HEALTH PROMOTION PROGRAMMES

TABLE 3.11.1 STEPS TAKEN TO REDUCE THE RISK OF OCCUPATIONAL EXPOSURE

Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any)

Key steps taken to reduce the risk

All employees have the same risk Awareness programs for employees

TABLE 3.11.2 DETAILS OF HEALTH PROMOTION AND HIV/AIDS PROGRAMMES

Question Yes No Details, if yes

Has the institution designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position.

X

Does the institution have a dedicated unit or has it designate specific staff members to promote the health and well-being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose.

XThe Legislature has appointed an Employee Assistance Practitioner to deal with matters relating to health & wellness

Has the institution introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme.

XThere is an employee assistance programme and a referral system is in place as per the policy prescripts

Has the institution established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent.

x

A committee is in place and the names of the committee members are: C Monareng, W Sebopela, P Diemeng, N Marakalala, T Setuki and T Sello

Has the institution reviewed its employment policies and practices to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed.

xWellness Policy, OHS Policy, Labour Relations Policies & Sexual Harassment Policy.

Has the institution introduced measures to protect HIV-positive employees or those perceived to be HIV-positive from discrimination? If so, list the key elements of these measures.

xThrough the following policies : Wellness Policy, OHS Policy, Labour Relations Policies & Sexual Harassment Policy

Does the institution encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved.

xThe Wellness unit undertakes a quarterly awareness events with teams of health evaluators/assessors

Has the institution developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators.

x Surveys and reports from Health evaluators.

3.12. LABOUR RELATIONS

TABLE 3.12.1 COLLECTIVE AGREEMENTS

Subject Matter Date

Agreement on issues of mutual interests 01 April 2013 to 31 March 2016

The following table summarises the outcome of disciplinary hearings conducted within the institution for the year under review.


TABLE 3.12.2 MISCONDUCT AND DISCIPLINARY HEARINGS FINALISED

Outcomes of disciplinary hearings Number % of total

Correctional counselling - -

Verbal warning - -

Written warning 1 13%

Final written warning 3 38%

Suspended without pay 1 13%

Fine - -

Demotion - -

Dismissal 3 38%

Not guilty - -

Case withdrawn - -

TOTAL 8 100%

TABLE 3.12.3 TYPES OF MISCONDUCT ADDRESSED AT DISCIPLINARY HEARINGS

Type of misconduct Number % of total

Absenteeism 2 100%

TOTAL 2 100%

TABLE 3.12.4 GRIEVANCES LOGGED

Number % of Total

Number of grievances resolved 2 100%

Number of grievances not resolved - -

TOTAL NUMBER OF GRIEVANCES LODGED 2 100%

TABLE 3.12.5 DISPUTES LOGGED

Disputes Number % of Total

Number of disputes upheld 3 75%

Number of disputes dismissed 1 25%

TOTAL NUMBER OF DISPUTES LODGED 4 100%

TABLE 3.12.6 STRIKE ACTIONS

None

TABLE 3.12.7 PRECAUTIONARY SUSPENSIONS

Number of people suspended 2

Number of people who’s suspension exceeded 30 days 2

Average number of days suspended 150 days

Cost of suspension(R’000) R 620 971.90


3.13. SKILLS DEVELOPMENT

This section highlights the efforts of the department with regard to skills development.

TABLE 3.13.1 TRAINING NEEDS IDENTIFIED FOR THE PERIOD 01 APRIL 2015 – 31 MARCH 2016

Occupational Category GenderNumber of

employees as at 31 March 2016

Training needs identified at start of the reporting period

Learnerships Skills Programmes & other short courses

Other forms of training Total

Legislators, senior officials and managers

Female 9 - - - -

Male 14 - - - -

ProfessionalsFemale 34 - 23 - 23

Male 27 - 19 - 19

Technicians and associate professionals

Female 67 - 13 - 13

Male 37 - 11 - 11

Clerks Female 1 - - - -

Male 6 - 1 - 1

Service and sales workersFemale - - - - -

Male - - - - -

Skilled agriculture and fishery workers

Female - - - - -

Male - - - - -

Craft and related trades workersFemale - - - - -

Male - - - - -

Plant and machine operators and assemblers

Female - - - - -

Male - - - - -

Elementary occupationsFemale 10 - 10 - 10

Male 7 - 7 - 7

Sub TotalFemale 121 46 46

Male 91 38 38

TOTAL 212 84 84

TABLE 3.13.2 TRAINING PROVIDED FOR THE PERIOD 01 APRIL 2015 – 31 MARCH 2016

Occupational Category Gender Number employees as at 31 March 2016

Training provided within the reporting period



Legislators, senior officials and managers

Female 9 - 7 9 16

Male 14 - 10 11 21

ProfessionalsFemale 34 - 23 8 31

Male 27 - 19 6 25

Technicians and associate professionals

Female 67 - 42 14 56

Male 37 - 22 15 37

Clerks Female 1 - 1 - 1

Male 6 - - 1 1

Service and sales workersFemale - - - - -

Male - - - - -

Skilled agriculture and fishery workers

Female - - - - -

Male - - - - -

Craft and related trades workersFemale - - - - -

Male - - - - -


Occupational Category Gender Number employees as at 31 March 2016

Training provided within the reporting period



Plant and machine operators and assemblers

Female - - - - -

Male - - - - -

Elementary occupationsFemale 10 - 10 - 10

Male 7 - 5 - 5

Sub TotalFemale 121 83 31 114

Male 91 56 32 89

TOTAL 212 139 63 203


3.14. INJURY ON DUTY

During the year under review, injuries on duty did not occur.

3.15. UTILISATION OF CONSULTANTS

Waiting on financial information

TABLE 3.15.1 REPORT ON CONSULTANT APPOINTMENTS USING APPROPRIATED FUNDS Project Title Total Number of consultants

that worked on projectDuration Work days

Contract value in Rand

Gobodo - Forensic Investigation 4 Four Months

Kutame Konsult - Financial Consultants (GRAP Implementation) 12 One Year

Sizavox - Oracle Stabilisation and Training 2 Nine months

Total number of projects Total individual consultants

Total duration Work days

Total contract value in Rand

Forensic Investigation 4 Four Months -

Financial Consultants (GRAP Implementation) 12 One Year

Oracle Stabilisation and Training 2 Nine months

TABLE 3.15.2 ANALYSIS OF CONSULTANT APPOINTMENTS USING APPROPRIATED FUNDS, IN TERMS OF HISTORICALLY DISADVANTAGED INDIVIDUALS (HDIS)

Project Title Percentage ownership by HDI groups Percentage management by HDI groups Number of Consultants from HDI groups

that work on the project

Gobodo 100% HDI One Year

Kutame Konsult 100% HDI One Year

Sizavox 100% HDI One Year

TABLE 3.15.3 REPORT ON CONSULTANT APPOINTMENTS USING DONOR FUNDS

N/A

TABLE 3.15.4 ANALYSIS OF CONSULTANT APPOINTMENTS USING DONOR FUNDS, IN TERMS OF HISTORICALLY DISADVANTAGED INDIVIDUALS (HDIS)

N/A


3.16. SEVERANCE PACKAGES

TABLE 3.16.1 GRANTING OF EMPLOYEE INITIATED SEVERANCE PACKAGES FOR THE PERIOD 1 APRIL 2015 AND 31 MARCH 2016

Salary bandNumber of

applications received

Number of applications referred

to the MPSA

Number of applications supported

by MPSA

Number of packages approved by department

Lower skilled (Levels 1-2) - - - -

Skilled Levels 3-5) - - - -

Highly skilled production (Levels 6-8) - - - -

Highly skilled supervision(Levels 9-12) - - - -

Senior management (Levels 13-16) - - - -

TOTAL - - - -


PART eFINANCIAL INFORMATION


Report of the auditor-general to the North West provincial legislature on vote no. 2: the Provincial Legislature

Report on the financial statements

Introduction

1. I have audited the financial statements of the Provincial Legislature set out on pages 70 to 115, which comprise the statement of financial position as at 31 March 2016, the statement of financial performance,statement of changes in net assets, cash flow statement and the statement of comparison of budget with actual information for the year then ended, as well as the notes, comprising a summary of significant accounting policies and other explanatory information.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with the South African Standards of Generally Recognised Accounting Practice (SA standards of GRAP) and the requirements of the Financial Management of Parliament and Provincial Legislatures Act of South Africa, 2009 (Act No. 10 of 2009) (FMPPLA) and for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor-general’s responsibility

3. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards on Auditing. Those standards require that I comply with ethical requirements,and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, wnether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

65


Opinion

6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the North West Provincial Legislature as at 31 March 2016 and its financial performance and cash flows for the year then ended, in accordance with the SA standards of GRAP and the requirements of the FMPPLA.

Emphasis of matters

7. I draw attention to the matter below. My opinion is not modified in respect of these matters.

Irregular expenditure

8. As disclosed in note 27 to the financial statements, irregular expenditure of R72 775 093 was incurred in the current year and irregular expenditure from prior years of R75 662 184 had not yet been resolved.

Financial reporting framework

9. As disclosed in note 1 to the financial statements, the Provincial Legislature has adopted the GRAP reporting framework from 01 April 2015.These standards have been applied retrospectively, unless where the legislature has taken advantage of directive 8 and reported on provisional amounts.

Restatement of corresponding figures

10. As disclosed in notes 32 to the financial statements, the corresponding figures for 31 March 2015 have been restated as a result of an error discovered during 2016 in the financial statements of the Provincial Legislature at, and for the year ended, 31 March 2015.

Report on other legal and regulatory requirements

11. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof,I have a responsibility to report findings on the reported performance information against predetermined objectives for selected programme presented in the annual performance report, compliance with legislation and internal control. The objective of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these matters.

Predetermined objectives

12. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information for the following selected programme presented in the annual performance report of the Provincial Legislature for the year ended 31 March 2016:

• Programme 3: Parliamentary operations on pages 32 to 38

13. I evaluated the usefulness of the reported performance information against the performance information policy to determine whether the reported performance was consistent with the planned programmes. I further performed tests to determine whether indicators and targets were well-defined, verifiable, specific, measurable, time-bound and relevant.

14. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

66


15. I did not identify any material findings on the usefulness and reliability of the reported performance information on the selected programme of the provincial legislature.

Additional matters

16. Although I identified no material findings on the usefulness and reliability of the reported performance information for the selected programme, I draw attention to the following matters:

Achievement of planned targets

17. Refer to the annual performance report on pages 32 to 38 for information on the achievement of the planned targets for the year.

Adjustment of material misstatements

18. I identified material misstatements in the annual performance report submitted for auditing on the reported performance information for Programme 3: Parliamentary operations. As management subsequently corrected the misstatements, I did not identify any materialfindings on the usefulness and reliability of the reported performance information.

Unaudited supplementary information19. The supplementary information set out on pages 39 to 63 does not form part of the annual performance

report and is presented as additional information. I have not audited these schedules and, accordingly, I do not report thereon.

Compliance with legislation

20. I performed procedures to obtain evidence that the Provincial Legislature had complied with applicable legislation regarding financial matters, financial management and other related matters. My findings on material compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows:

Annual financial statements

21. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by sections 56(1) of the FMPPLA. Material misstatements of property, plant and equipment, provisions and disclosure items identified by the auditors in the submitted financial statements were subsequently corrected, resulting in the financial statements receiving an unqualified opinion.

Budget

22. Effective steps were not taken to prevent unauthorised expenditure,amounting to R9 023 133 as disclosed in note 31 of the AFS, as required by section 7(e) of the FMPPLA.

Expenditure management

23. Effective steps were not taken to prevent Irregular expenditure, as required by section 7(e) of the FMPPLA.

67


Transfer payments

24. The accounting officer did not ensure that political party funds were transferred to the North West Political Party Fund, as required by sections 3(2)(a) and 4.1 of the North West Political Party Fund Act, 2010 (Act No. 3 of 2010) (NWPPFA).Furthermore, the NWPPFA requires that the fund operate as a separate entity with separate accounting records and a separate bank account. These requirements were however not adhered to and no separate financial statements were submitted. There has been a resolution taken by legislature to repeal the NWPPFA, however the repeal of the NWPPFA has not yet been gazetted as at 31 March 2016.

Procurement and contract management

25. Goods and services of a transaction value above the threshold prescribed by the SCM policy were procured without inviting competitive bids, contrary to the requirements of the SCM regulations 6(3)(e) and 6(11) issued in terms of the FMPPLA.

26. Bid adjudication was not always done by committees which was composed in accordance with the policies of the Provincial Legislature, as required by Parliament SCM regulation 7(9)(a)(vi).

27. Contracts were awarded to suppliers whose tax matters had not been declared by the South African Revenue Services to be in order as required by Parliament SCM regulations 6(7)( c)(v) and 9(1)(c) and the Preferential Procurement Regulations.

28. The preference point system was not applied in all procurement of goods and services above R30 000 as required by section 2(a) of the Preferential Procurement Policy Framework Act and Parliament SCM regulations 6(7)( e) & 6(8)(i).

Internal control

29. I considered internal control relevant to my audit of the financial statements, the annual performance report and compliance with legislation. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on the annual performance report and the findings on compliance with legislation included in this report.

Leadership

30. The leadership did not adequately exercise appropriate oversight over financial and performance reporting, information technology (IT) systems and related internal controls. Material adjustments were required to financial statements and the annual performance report.

Financial and performance management

31. Management did not sufficiently review and monitor compliance with laws and regulations so as to prevent non-compliance nor did it sufficiently implement effective controls to ensure that all information in the financial statements and the annual performance report were reliable before submission for audit. Furthermore, effective IT controls were not sufficiently implemented which resulted in security settings and access control deficiencies. Policies and procedures did not always adequately guide financial, performance and IT related activities and action plans to address prior year audit findings.

68


Governance

32. The risks identified during the risk assessment process relating to financial and performance reporting and compliance with laws and regulations were not adequately monitored by management. Although the audit committee and internal audit fulfilled their functions, there was lack of adequate implementation of their recommendations by management resulting in an inadequate control environment over financial and performance management.

Other reports

33. I draw attention to the following engagements that could potentially impact on the Provincial Legislature’s financial, performance and compliance related matters. My opinion is not modified in respect of these engagements that are in progress.

Investigations

34. An independent consulting firm is performing an investigation at the request of the Provincial Legislature, which covers the period 1 April 2014 to 31 March 2016. The investigation was initiated based on an allegation of the possible misappropriation of the Provincial Legislature’s payment of private quotas to members, payment to travel agencies, travel and subsistence claims and verifying salary disparities among employees on the same level. The outcome of the investigation is expected by 31 August 2016.

Rustenburg

31 July 2016

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AFSANNUAL FINANCIAL STATEMENTS


NORTH WEST PROVINCIAL LEGISLATUREFinancial Statements for the year ended 31 March 2016

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2016

FIGURES IN RAND NOTES 2016 2015 RESTATED*

Assets

Current Assets

Receivables from exchange transactions 3 6 931 011 3 797 325

Receivables from non-exchange transactions 4 26 687 000 -

Cash and cash equivalents 5 21 009 859 92 816 622

54 627 870 96 613 947

Non-Current Assets

Property, plant and equipment 6 16 789 032 13 787 137

Intangible assets 7 10 474 57 315

16 799 506 13 844 452

Total Assets 71 427 376 110 458 399

Liabilities

Current Liabilities

Finance lease obligation 11 486 712 631 194

Provisions 8 6 517 104 5 310 886

Payables from exchange transactions * 9 11 364 139 18 428 453

Payables from non-exchange transactions 10 36 434 000 36 434 000

54 801 955 60 804 533

Non-Current Liabilities

Finance lease obligation 11 109 439 242 377

Total Liabilities 54 911 394 61 046 910

Net Assets 16 515 982 49 411 489

Accumulated surplus 16 515 982 49 411 489



STATEMENT OF FINANCIAL PERFORMANCE

FIGURES IN RAND NOTES 2016 2015 RESTATED*

Revenue

Revenue from exchange transactions

Commissions received 62 440 50 189

Interest revenue 12 3 750 554 2 960 923

Total revenue from exchange transactions 3 812 994 3 011 112

Revenue from non-exchange transactions

Transfer revenue

Appropriation 13 273 019 000 276 890 000

Condoned unauthorised expenditure 3 516 000 -

Total revenue from non-exchange transactions 276 535 000 276 890 000

Total revenue 14 280 347 994 279 901 112

Expenditure

Employee related costs 15 (142 016 528) (122 094 223)

Depreciation and amortisation (3 157 435) (4 193 655)

Impairment of receivables from exchange transactions - 358 414

Finance costs 16 (81 279) (171 779)

Transfers and Subsidies 17 (32 725 361) (31 512 623)

Goods & services 18 (135 234 965) (138 546 576)

Total expenditure (313 215 568) (296 160 442)

Operating deficit 19 (32 867 574) (16 259 330)

Loss on disposal of assets (27 935) (4 908 239)

Deficit for the year (32 895 509) (21 167 569)



STATEMENT OF CHANGES IN NET ASSETSFigures in Rands Accumulated surplus Total net assets

Opening balance as previously reported 64 820 023 64 820 023

Adjustments

Change in accounting policy (first time adoption of GRAP) 30 (4 400 713) (4 400 713)

Prior year adjustments 32 10 159 748 10 159 748

Balance at 01 April 2014 as restated* 70 579 058 70 579 058

Changes in net assets


Total changes (21 167 569) (21 167 569)

Opening balance as previously reported 71 664 287 71 664 287

Adjustments

Change in accounting policy (first time adoption of GRAP) 30 (12 818 864) (12 818 864)

Prior year error adjustments 32 (9 433 933) (9 433 933)

Restated* Balance at 01 April 2015 as restated* 49 411 490 49 411 490

Changes in net assets


Total changes (32 895 508) (32 895 508)

Balance at 31 March 2016 16 515 982 16 515 982

It is impracticable to retrospectively apply the change in accounting policy for the conversion of Modified Cash Basis (MCB) to GRAP after making every reasonable effort to do so. The retained earnings carried over from the MCB is different from the retained earnings in GRAP as many transactions should be accounted for on the accrual basis of accounting that was not required in the MCB. Therefore it is impracticable to make a retrospective restatement for retained earnings relating to 2014



CASH FLOW STATEMENTFigures in Rands NOTES 2016 2015 RESTATED*

Cash flows from operating activities

Receipts

Appropriation 273 019 000 276 890 000

Interest income 3 750 554 2 960 923

Comissions received 62 440 50 189

276 831 994 279 901 112

Payments

Employee costs (140 810 309) (120 129 557)

Suppliers (201 325 596) (118 318 157)

(342 135 905) (238 447 714)

Net cash flows from operating activities 21 (65 303 911) 41 453 398

Cash flows from investing activities

Purchase of property, plant and equipment 6 (6 144 153) (4 939 431)

Cash flows from financing activities

Finance lease payments (277 420) -

Finance lease receipts - 70 443

Finance costs (81 279) (171 779)

Net cash flows from financing activities (358 699) (101 336)

Net increase/(decrease) in cash and cash equivalents (71 806 763) 36 412 631

Cash and cash equivalents at the beginning of the year 92 816 622 56 403 991

Cash and cash equivalents at the end of the year 5 21 009 859 92 816 622


STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS

BUDGET ON MODIFIED CASH BASISFigures in Rand Approved

budgetAdjustments Final Budget Actual amounts

on comparable basis

Difference between final budget and actual

Reference

Statement of Financial Performance

Revenue

Revenue from exchange transactions

Commissions received - - - 62 440 62 440

Interest received - investment - - - 3 750 554 3 750 554 28.1

Total revenue from exchange transactions

- - - 3 812 994 3 812 994

Revenue from non-exchange transactions

Transfer revenue

Appropriation 273 019 000 32 481 000 305 500 000 273 019 000 (32 481 000) 28.2

Condoned unauthorised expenditure

- - - 3 516 000 3 516 000

Total revenue from non-exchange transactions

273 019 000 32 481 000 305 500 000 276 535 000 (28 965 000)

Total revenue 273 019 000 32 481 000 305 500 000 280 347 994 (25 152 006)

Expenditure

Employee related costs (118 043 000) - (118 043 000) (142 016 528) (23 973 528) 28.3

Depreciation and amortisation - - - (3 157 435) (3 157 435) 28.4

Finance costs - - - (81 279) (81 279)

Transfers and Subsidies (32 089 000) - (32 089 000) (32 725 361) (636 361) 28.6

Goods & services (120 261 000) (30 642 000) (150 903 000) (135 234 965) 15 668 035 28.7

Total expenditure (270 393 000) (30 642 000) (301 035 000) (313 215 568) (12 180 568)

Operating deficit 2 626 000 1 839 000 4 465 000 (32 867 574) (37 332 574)

Loss on disposal of assets and liabilities

- - - (27 935) (27 935)

Actual Amount on Compara-ble Basis as Presented in the Budget and Actual Compara-tive Statement

2 626 000 1 839 000 4 465 000 (32 895 509) (37 360 509)

Reconciliation


1. Presentation of Financial Statements

The financial statements have been prepared in accordance with the Standards of Generally Recognised Account-ing Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 56 of the Financial Management of Parliament and Provincial Legislatures Act, 2009 (Act No.10 of 2009) (FMPPLA) and the Trea-sury Regulations issued in terms of the Act and the Division of Revenue Act, Act 1 of 2010.

These financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention as the basis of measurement, unless specified otherwise. They are presented in South African Rand.

Assets, liabilities, revenues and expenses were not offset, except where offsetting is either required or permitted by a Standard of GRAP.

A summary of the significant accounting policies, which have been consistently applied in the preparation of these financial statements, are disclosed below.

These accounting policies are consistent with the previous period, except for the changes set out in note 30 First-time adoption of Standards of GRAP.

1.1 Presentation currency

These financial statements are presented in South African Rand, which is the functional currency of the Legis-lature.

1.2 Going concern assumption

These financial statements have been prepared based on the expectation that the Legislature will continue to operate as a going concern for at least the next 12 months.

1.3 Significant judgements and sources of estimation uncertainty

In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts represented in the financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the financial statements. Significant judgements include:

Receivables from exchange transactions

The Legislature assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit. Judgements are made as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

Impairment testing

The impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable service amount which is the higher of it’s fair value less costs to sell and its value in use. These calculations require the use of estimates and assumptions. It is reasonably possible that assumptions may change which may then impact our estimations and may then require a material adjustment to the carrying value of tangible assets.


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Provisions

Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 8 - Provisions.

Useful lives of intangible assets & property, plant and equipment

The NWPL’s management determines the estimated useful lives and related depreciation and amortisation charges for property, plant and equipment and intangible assets. This estimate is based on the pattern in which an asset’s future economic benefits or service potential are expected to be consumed by the entity.

The period of useful lives and residual values were revised and extended in the current financial year as fixed assets are expected to be available for use over a longer period. This was based on past practices. The revised useful lives are disclosed in note 1.4.

Allowance for doubtful debts

On debtors an impairment loss is recognised in surplus and deficit when there is objective evidence that it is im-paired. The impairment is measured as the difference between the debtors carrying amount and the present value of estimated future cash flows discounted at the effective interest rate, computed at initial recognition.

1.4 Property, plant and equipment

Property, plant and equipment are tangible non-current assets that are held for use for administrative purposes, and are expected to be used during more than one reporting period.

The cost of an item of property, plant and equipment is recognised as an asset when:

• it is probable that future economic benefits or service potential associated with the item will flow to the entity; and

• the cost or fair value of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.

The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.

Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition.

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or assets, or a combination of assets and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, it’s deemed cost is the carrying amount of the asset(s) given up.

Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management.

Property, plant and equipment is carried at cost less accumulated depreciation and any accumulated impairment losses. Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.


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The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful life

Furniture and fixtures 15 years

Motor vehicles 7 years

Office equipment 10 years

Computer equipment 6 years

Audio visual equipment 12 years

Artwork 25 years

Library books 25 years

Finance lease assets Lease term

The residual value, the useful life and depreciation method of each asset are reviewed at least at the end of each reporting date. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

Reviewing the useful life of an asset on an annual basis does not require the entity to amend the previous esti-mates unless expectations differ from the previous estimate.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset.

Repairs and maintenance relating to items of property, plant and equipment are recognised as an expense when they are incurred.

Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no fur-ther economic benefits or service potential expected from the use or disposal of the asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

Transitional provision

The Legislature has opted to utilise Directive 8 Transitional Provision for Parliament and Provincial Legislatures relating to certain asset categories, disclosed in note 6.

The Legislature changed its accounting policy for property, plant and equipment in 2016. The change in ac-counting policy is made in accordance with its transitional provision as per Directive 8 of the GRAP Reporting Framework.

According to the transitional provision, the Legislature is not required to measure property, plant and equipment for reporting periods beginning on or after a date within three years following the date of initial adoption of the Standard of GRAP on Property, plant and equipment. Property, plant and equipment has accordingly been rec-ognised at provisional amounts, as disclosed in note 6. The transitional provision expires on 31 March 2018.


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Until such time as the measurement period expires and property, plant and equipment is recognised and mea-sured in accordance with the requirements of the Standard of GRAP on Property, plant and equipment, the entity need not comply with the Standards of GRAP on:

• Presentation of Financial Statements (GRAP 1) insofar as it relates to the measurement of Property, Plant and Equipment,

• Leases (GRAP 13), where items have not been measured as a result of transitional provisions under other Standards of GRAP, and

• Discontinued Operations (GRAP 100).

The exemption from applying the measurement requirements of the Standard of GRAP on Property, plant and equipment implies that any associated presentation and disclosure requirements need not be complied with for property, plant and equipment not measured in accordance with the requirements of the Standard of GRAP on Property, plant and equipment.

1.5 Intangible assets

An asset is identifiable if it either:

• is separable, i.e. is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable assets or liability, regardless of whether the entity intends to do so; or

• arises from binding arrangements (including rights from contracts), regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

An intangible asset is recognised when:

• it is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the entity; and

• the cost or fair value of the asset can be measured reliably.

Intangible assets are initially measured at cost.

The entity assesses the probability of expected future economic benefits or service potential using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.

Where an intangible asset is acquired through a non-exchange transaction, its initial cost at the date of acquisition is measured at its fair value as at that date.

Intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

The depreciable amount of an intangible asset with a finite useful life shall be allocated on a systematic basis over its useful life. Amortisation shall begin when the asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

The amortisation charge for each period shall be recognised in surplus or deficit.

The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.


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Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful life

Computer software 8 years

Intangible assets are derecognised:

• on disposal; or

• when no future economic benefits or service potential are expected from its use or disposal.

The gain or loss is the difference between the net disposal proceeds, if any, and the carrying amount. It is rec-ognised in surplus or deficit when the asset is derecognised.


The Legislature has opted to utilise Directive 8 Transitional Provision for Parliament and Provincial Legislatures

The Legislature changed its accounting policy for intangible assets in 2016. The change in accounting policy is made in accordance with its transitional provision as per Directive 8 of the GRAP Reporting Framework.

According to the transitional provision, the Legislature is not required to measure intangible assets for reporting periods beginning on or after a date within three years following the date of initial adoption of the Standard of GRAP on Intangible assets. Intangible Assets has accordingly been recognised at provisional amounts, as dis-closed in note 7. The transitional provision expires on 31 March 2018.

Until such time as the measurement period expires and intangible assets is recognised and measured in accor-dance with the requirements of the Standard of GRAP on Intangible assets, the entity need not comply with the Standards of GRAP on:

• Presentation of Financial Statements (GRAP 1), insofar as it relates to the measurement of Property, Plant and Equipment;

• Leases (GRAP 13), where items have not been measured as a result of transitional provisions under other Standards of GRAP, and

• Discontinued Operations (GRAP 100).

The exemption from applying the measurement requirements of the Standard of GRAP on Intangible assets implies that any associated presentation and disclosure requirements need not be complied with for intangible assets not measured in accordance with the requirements of the Standard of GRAP on Intangible assets.

1.6 Financial instruments

Classification

The NWPL classifies financial assets and financial liabilities into the following categories:


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• Financial assets measured at amortised cost;

• Loans and receivables;

• Financial liabilities measured at amortised cost.

Classification depends on the purpose for which the financial instruments were obtained / incurred and takes place at initial recognition. Classification is re-assessed on an annual basis.

Initial recognition and measurement

Financial instruments are recognised initially when the NWPL becomes a party to the contractual provisions of the instruments.

The NWPL classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments are measured initially at fair value.

Transaction costs on financial instruments at fair value through surplus or deficit are recognised in surplus or deficit.

Subsequent measurement

Financial instruments at fair value through surplus or deficit are subsequently measured at fair value, with gains and losses arising from changes in fair value being included in surplus or deficit for the period.

Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method.

Impairment of financial assets

At each end of the reporting period the NWPL assesses all financial assets to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired.

Impairment losses are recognised in surplus or deficit.

Impairment losses are reversed when an increase in the financial asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carry-ing amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised.

Reversals of impairment losses are recognised in surplus or deficit except for equity investments classified as available-for- sale.

Trade receivables

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable


ACOUNTING POLICIES


amounts are recognised in surplus or deficit when there is objective evidence that the asset is impaired. Signif-icant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorgani-sation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired.

The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the deficit is recognised in surplus or deficit within operating expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in surplus or deficit.

Trade and other payables

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise of cash held with banks and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

1.7 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases - lessee

Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The cor-responding liability to the lessor is included in the statement of financial position as a finance lease obligation.

The discount rate used in calculating the present value of the minimum lease payments is the interest rate im-plicit in the lease.

The total future minimum lease payments within a year is disclosed under current liability and the future mini-mum lease payments later than one year is disclosed under non-current liability.

Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of on the remaining balance of the liability.


The Legislature has opted to utilise Directive 8 Transitional Provision for Parliament and Provincial Legislatures relating to leases.

The Legislature changed its accounting policy for leases in 2016. The change in accounting policy is made in


ACOUNTING POLICIES


accordance with its transitional provision as per Directive 8 of the GRAP Reporting Framework.

According to the transitional provision, the Legislature is not required to measure leases for reporting periods beginning on or after a date within three years following the date of initial adoption of the Standard of GRAP on Leases. Leases have accordingly been recognised at provisional amounts, as disclosed in note 11. The transitional provision expires on 31 March 2018.

Operating leases - lessee

Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.

1.8 Employee benefits

Short-term employee benefits

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

1.9 Provisions and contingencies

Provisions are recognised when:

• the entity has a present obligation as a result of a past event;

• it is probable that an outflow of resources embodying economic benefits or service potential will be re-quired to settle the obligation; and

• a reliable estimate can be made of the obligation.

The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the obligation.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 23.

1.10 Commitments

Items are classified as commitments when the Legislature has committed itself to future transactions that will normally result in the outflow of cash.


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The total minimum lease payments under non-cancellable operating leases for each of the following periods are disclosed in the financial statements:

• Not later than one year;

• Later than one year and not later than five years, and

• Later than five years.

Commitments for which disclosure is necessary to achieve a fair presentation has been disclosed in a note to the financial statements, if both the following criteria are met:

• Contracts should be non-cancellable or only cancellable at significant cost (for example, contracts for computer or building maintenance services); and

• Contracts should relate to something other than the routine, steady, state business of the entity – there-fore salary commitments relating to employment contracts or social security benefit commitments are excluded.

1.11 Revenue from exchange transactions

Revenue is the gross inflow of economic benefits or service potential during the reporting period when those in-flows result in an increase in net assets, other than increases relating to contributions from owners.

An exchange transaction is one in which the Legislature receives assets or services, or has liabilities extinguished, and directly gives approximately equal value to the other party in exchange.

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Measurement

Revenue from exchange transactions is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.

Interest income

Revenue arising from the use by others of Legislature assets yielding interest is recognised when:

• It is probable that the economic benefits or service potential associated with the transaction will flow to the entity, and

• The amount of the revenue can be measured reliably.

Interest is recognised, in surplus or deficit, using the effective interest rate method.

Commission income

Commission income is recognised as revenue when it becomes receivable.


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1.12 Revenue from non-exchange transactions

Appropriation revenue

Appropriation revenue is transfers received from the North West Provincial Treasury in terms of the Appropriation Act, 2013 (Act No. 9 of 2013) and Division of Revenue Act, 2013 (Act No.2 of 2013)

All legislature revenue is recognised in the statement of financial performance when received and is subsequently paid into the National/Provincial Revenue Fund, unless stated otherwise.

Any amount owing to the National/Provincial Revenue Fund at the end of the financial year is recognised as a payable in the statement of financial position.

No receivable is recognised for amounts receivable from the last receipt date to the end of the reporting period. These amounts are however disclosed in the notes to the annual financial statements.

1.13 Borrowing costs

Borrowing costs are interest and other expenses incurred by the Legislature in connection with the borrowing of funds.

1.14 Comparative figures

When the presentation or classification of items in the annual financial statements is amended, prior period com-parative amounts are restated. The nature and reason for the reclassification is disclosed. Where accounting errors have been identified in the current period, the correction is made retrospectively as far as is practicable, and the prior period comparatives are restated accordingly.

Where there has been a change in accounting policy in the current period, the adjustment is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly.

1.15 Unauthorised expenditure

Unauthorised expenditure means:

• overspending by the Legislature or a main division within the Legislature; and

• expenditure not in accordance with the purpose of a legislature or, in the case of a main division, not in accordance with the purpose of the main division.

All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.


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1.16 Fruitless and wasteful expenditure

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.17 Irregular expenditure

Irregular expenditure as defined in paragraph 63 of the FMPPLA Act is expenditure, other than unauthorised expenditure, incurred in contravention of, or that is not in accordance with, a requirement of this Act or any other applicable legislation.

Irregular expenditure that was incurred and identified during the current financial year and which was condoned before year end and/or before finalisation of the financial statements will be recorded appropriately in the irregular expenditure register. In such an instance, no further action is also required with the exception of updating the note to the financial statements.

Irregular expenditure that was incurred and identified during the current financial year and for which condone-ment is being awaited at year end will be recorded in the irregular expenditure register. No further action is re-quired with the exception of updating the note to the financial statements.

Where irregular expenditure was incurred in the previous financial year and is only condoned in the following financial year, the register and the disclosure note to the financial statements will be updated with the amount condoned.

Irregular expenditure that was incurred and identified during the current financial year and which was not con-doned by the National Treasury or the relevant authority will be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account will be created if such a person is liable in law. Immediate steps will thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accounting officer will write off the amount as debt impairment and disclose such in the relevant note to the financial statements.

The irregular expenditure register will also be updated accordingly. If the irregular expenditure has not been con-doned and no person is liable in law, the expenditure related thereto will remain against the relevant programme/expenditure item, be disclosed as such in the note to the financial statements and updated accordingly in the irregular expenditure register.

1.18 Budget information

Entity is typically subject to budgetary limits in the form of appropriations, which are given effect through au-thorising legislation, appropriation or similar.

The approved budget is prepared on a modified cash basis and presented by economic classification linked to performance outcome objectives.

The financial statements and the budget are not on the same basis of accounting therefore a reconciliation between the statement of financial performance and the budget have been included in the financial statements. Refer to note 28 for explanation of budget differences.


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1.19 Related parties

The entity operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of govern-ment in South Africa, only entities within the national sphere of government are considered to be related parties.

Management are those persons responsible for planning, directing and controlling the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions.

Key management is defined as being individuals within the authority that are responsible for planning, directing and controlling the activities of the NWPL, including those charged with the governance of the entity in accor-dance with legislation, in instances where they are required to perform such functions. The NWPL regards all individuals at executive management as key management per the definition of GRAP 20 - Related parties.

Close members of the family of a person are considered to be those family members who may be expected to influence, or be influenced by, that management in their dealings with the entity.

Related party transactions and balances are disclosed in note 24 - Related Parties.

1.20 Events after reporting date

Events after reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the date when the financial statements are authorised for issue. Two types of events can be identified:

• those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); and

• those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting date).

The entity will adjust the amount recognised in the financial statements to reflect adjusting events after the re-porting date once the event occurred.

The entity will disclose the nature of the event and an estimate of its financial effect or a statement that such estimate cannot be made in respect of all material non-adjusting events, where non-disclosure could influence the economic decisions of users taken on the basis of the financial statements.

1.21 Comparative figures - Budget Statement

A comparison between actual amounts and final appropriation per major classification of expenditure is included in the Budget Statement.


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2. New standards and interpretations

2.1 Standards and interpretations issued, but not yet effective

The entity has not applied the following standards and interpretations, which have been published and are mandatory for the entity’s accounting periods beginning on or after 01 April 2016 or later periods:

GRAP 109: Accounting by Principles and Agents

The objective of this Standard is to outline principles to be used by an entity to assess whether it is party to a principal- agent arrangement (which results from a binding arrangement in which one entity (an agent), undertakes transactions with third parties on behalf, and for the benefit of, another entity (the principal)) and whether it is a principal or an agent in undertaking transactions in terms of such an arrangement.

The effective date of the standard is not yet set by the Minister of Finance.

The entity expects to adopt the standard for the first time when the Minister set the effective date for the standard.

The adoption of this standard is not expected to impact on the results of the entity, but may result in more disclosure than is currently provided in the financial statements.

GRAP 32: Service Concession Arrangements: Grantor

The objective of this Standard is to prescribe the accounting for service concession arrangements by the grantor, a public sector entity. A service concession arrangement is a contractual arrangement between a grantor and an operator in which the operator uses the service concession asset to provide a mandated func-tion on behalf of the grantor for a specified period of time; and the operator is compensated for its services over the period of the service concession arrangement.

It furthermore covers definitions, recognition and measurement of a service concession asset, rec-ognition and measurement of liabilities, other liabilities, contingent liabilities, and contingent assets, other revenues, presentation and disclosure, transitional provisions, as well as the effective date.


The entity expects to adopt the standard for the first time when the Minister set the effective date for the standard.

The adoption of this standard is not expected to impact on the results of the entity, but may result in more disclosure than is currently provided in the financial statements.


NOTES TO THE FINANCIAL STATEMENTS

Figures in Rand 2016 2015


GRAP 108: Statutory Receivables

The objective of this Standard is to prescribe accounting requirements for the recognition, measurement, presentation and disclosure of statutory receivables that arise from legislation, supporting regulations, or similar means; and that require settlement by another entity in cash or another financial asset.

Statutory receivables can arise from both exchange and non-exchange transactions. Where these receivables arise from exchange and non-exchange revenue transactions, an entity shall apply the recognition and initial measurement requirements of the Standards of GRAP on Revenue from Exchange Transactions and Revenue from Non-exchange Transactions (Taxes and Transfers), as well as the requirements of this Standard.

It furthermore covers the definitions, recognition, derecognition, measurement, presentation and disclosure and transitional provisions.


The entity expects to adopt the standard for the first time when the Minister set the effective date for the standard. The impact of this standard is currently being assessed.

IGRAP 17: Service Concession Arrangements where a Grantor Controls a Significant Residual Interest in an Asset

This Interpretation of the Standards of GRAP provides guidance to the grantor where it has entered into a service concession arrangement, but only controls, through ownership, beneficial entitlement or otherwise, a significant residual interest in a service concession asset at the end of the arrangement, where the arrangement does not constitute a lease. This Interpretation of the Standards of GRAP shall not be applied by analogy to other types of transactions or arrangements.

A service concession arrangement is a contractual arrangement between a grantor and an operator in which the operator uses the service concession asset to provide a mandated function on behalf of the grantor for a specified period of time. The operator is compensated for its services over the period of the service concession arrangement, either through payments, or through receiving a right to earn revenue from third party users of the service concession asset, or the operator is given access to another revenue-generating asset of the grantor for its use.

Before the grantor can recognise a service concession asset in accordance with the Standard of GRAP on Ser-vice Concession Arrangements: Grantor, both the criteria as noted in paragraph .01 of this Interpretation of the Standards of GRAP need to be met. In some service concession arrangements, the grantor only controls the residual interest in the service concession asset at the end of the arrangement, and can therefore not recognise the service concession asset in terms of the Standard of GRAP on Service Concession Arrangements: Grantor.

A consensus is reached, in this Interpretation of the Standards of GRAP, on the recognition of the performance obligation and the right to receive a significant interest in a service concession asset.


The entity expects to adopt the standard for the first time when the Minister set the effective date for the stan-dard. It is unlikely that the standard will have a material impact on the entity's financial statements.





3. Receivables from exchange transactions

Prepayments: Advances paid 1 641 112 328 240

Salary control accounts 221 013 221 013

Operating lease receivables 281 081 8 656

Other receivables 5 847 512 4 351 432

Staff debt 69 878 17 570

Provision for bad debt (1 129 585) (1 129 586)

6 931 011 3 797 325

The creation and release of provision for impaired receivables have been included in operating expenses in surplus or deficit. Impairment testing was performed and the impairment amount relates to long outstanding debt with low certainty of recoverability.

The entity does not hold any collateral as security.

4. Receivables from non-exchange transactions

North West Provincial Treasury 26 687 000 -

Receivables from non-exchange transactions pledged as security

Amount due from North West Provincial Treasury relates to i) government grant of R23,171,000 and ii) unauthorised expediture of R3,516,000 that has been condoned in terms of North West Finance Bill, 2015 on 15 March 2016.

North West Provincial Legislature does not hold any collateral as security

5. Cash and cash equivalents

Cash and cash equivalents consist of the following bank balances:

ABSA Expense account 724 686 76 681 400

ABSA Salary account 19 817 889 15 689 921

ABSA Political party account 467 284 445 301

21 009 859 92 816 622

The bank balances consist of the following accounts:

Name of account Type of account Date opened

- ABSA Expense account 18 July 2007

- ABSA Salary account 18 July 2007

- ABSA Political party account 28 August 2012





Cash at banks earn interest at floating rates based on daily bank deposits rates. The fair value of cash equivalents approximates their carrying value as equivalents are readily convertible to cash.

6. Property, plant and equipment

31 March 2016 31 March 2015

Cost Accumulated depreciation

Carrying value

Cost Accumulated depreciation

Carrying value

Furniture and fixtures 6 272 820 (2 351 143) 3 921 677 5 923 919 (1 946 559) 3 977 360

Motor vehicles 7 048 425 (2 267 566) 4 780 859 5 426 696 (1 666 164) 3 760 532

Office equipment 923 996 (248 335) 675 661 702 762 (161 682) 541 080

Computer equipment 8 465 455 (3 079 286) 5 386 169 5 417 838 (1 986 369) 3 431 469

Audio visual equipment 2 115 468 (1 059 741) 1 055 727 1 726 909 (892 550) 834 359

Artwork 77 724 (24 348) 53 376 77 724 (21 230) 56 494

Library books 477 815 (146 098) 331 717 476 203 (127 003) 349 200

Finance lease assets (cellphones & tablets) 1 297 354 (757 544) 539 810 810 788 (235 731) 575 057

Finance lease assets (Call centre server) 396 325 (352 289) 44 036 396 325 (220 180) 176 145

Finance lease assets (PABX system) - - - 435 924 (435 924) -

Finance lease assets (Copier) 512 646 (512 646) - 512 646 (427 205) 85 441

Total 27 588 028 (10 798 996) 16 789 032 21 907 734 (8 120 597) 13 787 137

Reconciliation of property, plant and equipment - 31 March 2016Opening balance (NBV) Additions Disposals Depreciation Total

Furniture and fixtures 3 977 361 354 326 (5 425) (404 585) 3 921 677

Motor vehicles 3 760 532 1 621 729 - (601 402) 4 780 859

Office equipment 541 080 221 233 - (86 652) 675 661

Computer equipment 3 431 469 3 061 546 (13 929) (1 092 917) 5 386 169

Audio visual equipment 834 358 397 140 (8 581) (167 191) 1 055 726

Artwork 56 494 - - (3 118) 53 376

Library books 349 200 1 612 - (19 095) 331 717

Finance lease assets (Cellphones & tablets) 575 057 486 567 - (521 813) 539 811

Finance lease assets (Call centre server) 176 145 - - (132 108) 44 037

Finance lease assets (Copier) 85 441 - - (85 441) -

13 787 137 6 144 153 (27 935) (3 114 322) 16 789 033





Reconciliation of property, plant and equipment - 31 March 2015

Opening balance (NBV) Additions Disposals Depreciation Total

Furniture and fixtures 4 661 269 785 010 (976 614) (492 304) 3 977 361

Motor vehicles 3 443 139 783 490 - (466 097) 3 760 532

Office equipment 1 211 077 454 308 (900 374) (223 931) 541 080

Computer equipment 2 937 752 1 821 484 (409 478) (918 289) 3 431 469

Audio visual equipment 3 683 074 260 708 (2 401 433) (707 991) 834 358

Artwork 59 602 - - (3 108) 56 494

Library books 276 895 89 567 - (17 262) 349 200

Finance lease assets (Cellphones & tablets) 50 163 744 864 - (219 970) 575 057

Finance lease assets (Call centre server) 308 252 - - (132 107) 176 145

Finance lease assets (PABX system) 145 098 - - (145 098) -

Finance lease assets (Copier) 256 322 - - (170 881) 85 441

17 032 643 4 939 431 (4 687 899) (3 497 038) 13 787 137

Pledged as security

No property, plant and equipment have been pledged as securities for liabilities.

No property, plant and equipment is in the process of being constructed or developed.

No contractual commitment exist for the acquisition of property, plant and equipment.





6. Property, plant and equipment (continued)

Transitional provisions

Property, plant and equipment recognised at provisional amounts

In accordance with the transitional provisions as per Directive 8 of the GRAP Reporting Framework, as disclosed in note 1.4, property, plant and equipment with a carrying value of R 10 706 839 (2015: R 13 119 859) was recognised at provisional amounts.

Transitional provision was applied to the following asset categories:

- Furniture and fixtures

- Motor vehicles

- Office equipment

- Computer equipment

- Audio visual equipment

- Finance lease assets (Cellphones & tablets)

The reason and uncertainties relating to these assets were:

a) Assets not in use were written off in the 2015 financial year. Some of these assets were purchased in 2007 and capitalised in the asset register @ R1 or Rnil values. The loss on disposal of assets. depreciation and accumulated depreciation are thus understated in 2015. The cost price of these assets could not be deter-mined, thus the transitional provision is applicable.

The percentage of R1 or Rnil value assets against the population of written of assets are:

- Furniture and fixtures 69%

- Motor vehicles 22%

- Office equipment 28%

- Computer equipment 40%

- Audio visual equipment 9%

b) There is uncertainty in the value in use of a motor vehicle due to the fact that it is in use longer than the es-timated useful life. This resulted in no depreciation expense in 2016 for this vehicle as the carrying amount is equal to the residual value. The value in use could not be determined appropriately and the cost price is R591,650, accumulated depreciation is R461,487 and the residual value is R130,163.





c) There is uncertainty in the value in use of computer equipment due to the fact that it is in use longer than the estimated useful life. This resulted in no depreciation expense for the past 3 years as some of these assets were in use for 9 years. The amount could not be determined appropriately and the cost price of these assets are R606,763 and accumulated depreciation is R606.763. The total cost price in relation to the population is 7%.

d) The net book value of finance leases were calculated with certain assumptions, relating to:

- Prime interest rate was used as the incremental borrowing rate at the inception of each agreement

- The fair value of the physical devices could not determined therefore we calculated it as the difference in the fair value of the total contract payments and the fair value of the free data, talk-time and sms’s .

- The fair value of the data, talk-time and sms’s could also not be determined as at the inception of the agreements and we calculated it using the current market related value. The price of a single sms were calculated at 50c per sms and 1,500 minutes of talk-time and 100 sms’s per month were used as the market related value varies, based on different packages.

- No asset was capitalised where the present value of the data, talk-time and sms’s exceeds the present value of the total contract payment. These are mostly where no devices apart from a USB dongle was provided.

- If an agreement commenced mid-way through a month, we assumed payment took place on a pro-rata basis, similarly at the end of the agreement.

Carrying amounts of property, plant and equipment carried at provisional amounts are as follows

Due to initial adoption of GRAP 17


Furniture and fixtures - 3 977 361

6. Property, plant and equipment (continued)

2016 2015

Motor vehicles 4 780 859 3 760 532

Office equipment - 541 080

Computer equipment 5 386 169 3 431 469

Audio visual equipment - 834 358

Finance lease assets 539 811 575 057

10 706 839 13 119 857





Provisional amounts retrospectively adjusted during the year, are as follows:

2014

Furniture and fixtures 4 661 269

Motor vehicles 3 443 139

Office equipment 1 211 077

Computer equipment 2 937 752

Audio visual equipment 3 683 074

Finance lease assets 50 163

15 986 474

The date at which full compliance with GRAP 17 is expected, is 31 March 2018.

A fixed asset register contains the information required by section 30 of the FMPPL Act is available for inspection at the Legislature.

7. Intangible assets

31 March 2016 31 March 2015

Cost Accumulated amortisation

Carrying value

Cost Accumulated amortisation

Carrying value

Computer software 3 815 842 (3 805 368) 10 474 3 815 842 (3 758 527) 57 315

Reconciliation of intangible assets - 31 March 2016

Opening balance (NBV) Amortisation Total

Computer software 57 315 (46 841) 10 474

Reconciliation of intangible assets - 31 March 2015

Opening balance (NBV) Disposals Amortisation Total

Computer software 1 002 109 (220 342) (724 452) 57 315

Pledged as security

No intangible assets have been pledged as securities for liabilities.

No contractual commitment exists for the acquisition of intangible assets.





Transitional provisions

Intangible assets recognised at provisional amounts

In accordance with the transitional provisions as per Directive 8 of the GRAP Reporting Framework, as disclosed in note 1.5, certain intangible assets with a carrying value of R 10 474 (2015: R 57 315) was recognised at pro-visional amounts.

The reason and uncertainties relating to these assets were:

a) Assets not in use were written off in the 2015 financial year. Some of these assets were purchased in 2007 and capitalised in the asset register @ R1 or Rnil values and the loss on disposal of assets. Amortisation and accumulated amortisation are thus understated in 2015. The cost price of these assets could not be determined, thus the transitional provision is applicable.

The percentage of R1 or Rnil value assets against the population of intangible assets are 6%

b) There is uncertainty in the value in use of intangible assets due to the fact that it is in use longer than the estimated useful life. This resulted in no depreciation expense in the 2016 financial year as some of these assets were in use for 9 years. The amount could not be determined appropriately and the cost price of these assets are R3,724,083 and accumulated depreciation is R3,724,083. The total cost price in relation to the population is 98%.

Carrying amounts of intangible assets carried at provisional amounts are as follows:

Due to initial adoption of GRAP 31

2 016 2 015

Computer software 10 474 57 315

Steps taken to establish the values of intangible assets recognised at provisional amounts due to the initial adop-tion of GRAP 102, is as follows:

Provisional amounts retrospectively adjusted during the year, are as follows:

2 014

Intangible assets 1 002 109

The date at which full compliance with GRAP 102 is expected, is 31 March 2018.





8. Provisions

Reconciliation of provisions - 31 March 2016

Opening Balance

Additions Reduction in provision due to payments made

Unused amounts reversed

Total

Provision for long service awards 505 000 - - (360 000) 145 000

Provision for leave pay 2 206 000 2 765 042 (214 033) (1 991 967) 2 765 042

Provision for bonuses 2 599 886 3 607 062 (2 599 886) - 3 607 062

5 310 886 6 372 104 (2 813 919) (2 351 967) 6 517 104

Reconciliation of provisions - 31 March 2015

Opening Balance

Additions Reduction in provision due to payments made

Unused amounts reversed

Total

Provision for long service awards - 505 000 - - 505 000

Provision for leave pay 2 007 000 2 206 000 (35 344) (1 971 656) 2 206 000

Provision for bonuses 1 339 220 2 599 886 (1 339 220) - 2 599 886

3 346 220 5 310 886 (1 374 564) (1 971 656) 5 310 886

Provision for long service awards:

The provision relates to long service awards that employees are entitlement to after 10 & 20 years of service. The amount is calculated at a fixed amount in terms of policy and is only due on the anniversary date.

Provision for leave pay:

The provision relates to employees’ entitlement to annual leave that is due as a result of services rendered by em-ployees up to reporting date. The provision has been calculated at undiscounted amounts based on salary rates effective on the reporting date.

The provision will only be paid out when employees resign which is uncertain at year end. Unused leave is for-feited six months after the year in which it accrued.

Provision for bonus:

The provision for performance bonuses are calculated based on current salary bands and the estimated perfor-mance scores of employees (which is uncertain at year end).

The provision would be forfeited if the staff resign prior to when it becomes due, thus the timing and value of these bonuses are uncertain.

9. Payables from exchange transactions *

Trade payables 7 834 089 15 530 453

Accruals 3 530 050 2 898 000

11 364 139 18 428 453





Fair value of trade and other payables

Payables 11 364 140 18 428 452

The fair value of trade and other payables approximates the carrying amount.

Accruals relates to 13th cheque which is equal to one month’s salary and paid in the month in which the employ-ees celebrate their birthdays. The 13th cheque will be calculated pro-rata based on the actual months employed if the employee only worked for part of the year.

10. Payables from non-exchange transactions

Amounts payable to Provincial Treasury 36 434 000 36 434 000

Amount due to the North West Provincial Treasury is unsecured, interest free and agreement was signed by the Acting Secretary in April 2016 commiting to settle the outstanding balance by September 2016, by paying an average of R6,000,000 per month. The amount payable is due to a deposit incorrecly paid from the Provincial Revenue Fund in 2015.

11. Finance lease obligation

Minimum lease payments due

- within one year 518 797 682 095

- in second to fifth year inclusive 113 021 251 820

631 818 933 915

less: future finance charges (35 667) (60 344)

Present value of minimum lease payments 596 151 873 571

Present value of minimum lease payments due

- within one year 486 712 631 194


596 151 873 571

Non-current liabilities 109 439 242 377

Current liabilities 486 712 631 194

596 151 873 571

It is entity policy to lease cellphones & tablets for staff members under finance leases. The finance lease obligation also includes the rental of call centre servers and a copier.

Contracts relating to cellphones and tablets have an option for renewal after 2 years. No restrictions are imposed by the lease arrangements and no purchase options exist for these assets.

The average lease term for cellphones and tablets are 2 years and 3 years for the call centre servers and copier.





Interest rates are fixed at inception of the contract date, which was linked to prime.The average effective borrowing rate was 9.5% (2015: 9%).

All leases have fixed repayments and no arrangements have been entered into for contingent rent.

The North West Provincial Legislature opted to apply Directive 8 Transitional Provision for Parliament and Provin-cial Legislatures relating to finance leases for cellphones & tables. The total finance lease obligation relating to cellphones & tablets are R546,670 (2016) and R588,294 (2015).

While Parliament and the legislatures are not required to recognise finance lease liabilities in the financial state-ments in relation to those assets that have not been measured as a result of applying the transitional provisions in other Standards of GRAP, we are required to apply the disclosure requirements included in the Standard of GRAP on Leases insofar as the lease liabilities have been identified.

12. Investment revenue

Interest revenue

Bank 3 750 554 2 960 923

13. Appropriation

Annual appropriation 244 078 000 249 222 000

Statutory appropriation 28 941 000 27 668 000

273 019 000 276 890 000

Annual appropriation

Final appropriation: Administration Programme 144 040 000 122 867 000

Final appropriation: Legislative Operations Programme 132 519 000 162 789 000

Actual funds received (244 078 000) (249 222 000)

Funds not requested/not received 32 481 000 36 434 000

Statutory appropriation

Member’s remuneration 28 941 000 27 668 000

Actual Statutory Appropriation received (28 941 000) (27 668 000)

- -





14. Revenue


Investment revenue 3 750 554 2 960 923

Appropriation 273 019 000 276 890 000


280 347 994 279 901 112

The amount included in revenue arising from exchanges of goods or services are as follows:


Investment revenue 3 750 554 2 960 923

3 812 994 3 011 112

The amount included in revenue arising from non-exchange transactions is as follows:

Transfer revenue

Appropriation 273 019 000 276 890 000


276 535 000 276 890 000

15. Employee related costsBasic earnings 97 823 540 87 378 779

Bonus 3 247 062 2 372 220

Medical aid - company contributions 8 383 922 7 336 481

UIF 384 379 353 175

Bargaining council 1 415 873

Leave pay provision charge 559 042 199 000

Group life insurance 2 448 373 1 987 297

Uniform allowance 23 250 5 400

Pension contributions 12 265 246 10 463 447

Overtime payments 112 659 166 377

13th Cheques 7 061 136 4 531 630

Acting allowances 938 241 377 609

Car allowance 3 792 898 2 538 433

Housing benefits and allowances 4 975 365 4 383 504

142 016 528 122 094 225

16. Finance costsFinance cost 81 279 171 779





17. Transfers and subsidiesResearch allowance 3 412 500 3 250 000

Secretarial allowance 3 003 000 2 860 000

Constituency allowance 15 654 294 15 021 372

Political party funding 10 655 567 10 381 251

32 725 361 31 512 623

18. Goods & servicesAudit Committee expenses 648 083 455 520

Advertising 3 203 709 6 054 538

Assets expensed 237 390 1 200 827

Auditors remuneration 3 669 621 4 731 528

Bank charges 84 766 110 009

Catering expenses 9 404 762 19 806 546

Communication expenses 7 948 500 6 517 616

Conferences and seminars 3 097 960 3 494 474

Consulting and professional fees 11 623 627 7 276 677

Consumables 380 717 591 059

Entertainment 21 000 606 397

Learnership & bursaries 716 899 504 336

Legal cost 2 240 965 851 358

System implementation fees 4 652 696 663 509

Plants and Flowers 24 241 31 841

Gifts and promotional 2 174 632 256 694

Rental & hiring expenses 8 205 428 10 432 191

Insurance 59 228 287 871

Motor vehicle expenses 714 743 692 655

Postage and courier 13 963 55 640

Printing and stationery 6 686 448 6 409 305

Promotions and sponsorships 40 004 94 216

Repairs and maintenance 4 475 993 3 826 896

License fees 4 189 781 1 541 918

Security services 4 562 166 1 027 007

Staff welfare 1 751 929 1 202 506

Professional bodies, membership and subscription fees 106 714 631 300

Training 4 189 402 3 084 114

Travel & accomodation 48 078 150 48 046 376

Uniforms 362 622 55 037

Venues and facilities 1 668 826 8 006 613

135 234 965 138 546 574





19. Operating deficit

Operating deficit for the year is stated after accounting for the following:

Loss on sale of property, plant and equipment 27 935 2 614 207

Impairment on trade and other receivables - (358 414)

Amortisation on intangible assets 46 841 696 612

Depreciation on property, plant and equipment 3 110 594 3 497 043

Employee costs 142 016 528 122 094 223

20. Auditors' remuneration

Fees 3 669 621 4 731 528

21. Cash (used in) generated from operations

Deficit (32 895 508) (21 167 569)

Adjustments for:

Depreciation and amortisation 3 157 435 4 193 655

Loss on sale of assets 27 935 4 908 239

Finance costs 81 279 171 779

Movements in provisions 1 206 218 1 964 666

Changes in working capital:

Receivables from exchange transactions (3 133 685) (2 458 443)

Receivables from non-exchange transactions (26 687 000) -

Payables from exchange transactions * (7 060 585) 17 407 071

Payables from non-exchange transactions - 36 434 000

(65 303 911) 41 453 398

It is impracticable to retrospectively apply the change in accounting policy for the conversion of Modified Cash Basis (MCB) to GRAP after making every reasonable effort to do so in the completion of the Cashflow statement. Management is however confident that the amounts disclosed are not misleading in any material manner. After numerous attempts management found it impracticable to make a retrospective restatement.

22. Commitments

Authorised capital expenditure

Total commitments

No capital commitments existed on year-end.





Operating leases - as lessee (expense)

Minimum lease payments due

- within one year 418 295 418 295


592 584 1 010 880

Operating lease payments represent rentals payable by the entity for its office properties.

Leases are negotiated for a term of five years and rental payments escalate on an annual basis of 9% per annum. No contingent rent is payable and the contract does not stipulate terms of renewal or purchases options.

No restrictions are imposed by lease arrangements.

23. Contingencies

Contingent liabilities

Prior year contingent assets and liabilities with a net amount of R624,000 previously disclosed in the 2015 Annual Financial Statements did not materialise and as a result it was not disclosed in the note below.

The staff labour disputes relates to two cases pending the outcome of disciplinary hearings. These matters are expected to be resolved in the 2016/17 financial year.

Imbizo Office Furniture (Supplier) has filed a civil action against NWPL over an appointment letter issued by the NWPL that was not honoured as a result of a tender process. This matter is currently before the court and finali-sation of the court proceedings and outcome could not be determined on year end.

Nature of contingent liabilities

Staff labour disputes 1 490 320 -

Supplier dispute 14 560 145 500 000

16 050 465 500 000





24. Related parties

Custodian of public resources North West Provincial Treasury

Registered owner of the Legislature buildings and precinct Department of Public Works and Roads

National legal department State attorney

Close family member of key management None

Members of key management

Speaker of the Legislature Hon SR Dantjie

Deputy Speaker Hon J Manganye

Secretary of the Legislature Ms MJ Gaoretelelwe

Acting Secretary of the Legislature Mr AI Kekesi

Deputy Secretary Ms M Maleme

Chief Financial Officer Mr JF Cudjoe

Acting Legal Advisor Mr M Matli

Executive Manager: Legal Mr MBJ Tsiane

Executive Manager: Corporate Services Mr AJ Maphetle

Executive Manager: Policy & Research Mrs TC Mbedzi

Executive Manager: Public Participation, Education and Pertitions Mrs JK Mashori

Acting Executive Manager: Parliamentary Services Mr PE Motoko

Executive Manager: Speaker's Office Mr BM Tsenca

Executive Manager: Speaker's Office Mr TE Chaane

Executive Manager: Infrastructure Mr MP Malgas

Emoluments of key management has been disclosed in note 25

The members and executives of the North West Provincial Legislature are disclosed in the Accounting Officer's report, note 9.

Related party balances

Amounts included in Trade Payable regarding related parties

North West Provincial Treasury 36 434 000 36 434 000





Related party transactions

Revenue received from related parties

North West Provincial Treasury 273 019 000 276 890 000

Amounts paid to members

Hon Galeng 1 393 198 1 102 019

Hon Rosho 1 158 696 851 944

Hon Maloyi 1 223 914 885 626

Hon Elisha 1 238 625 881 939

Hon Mahlakeng 1 658 515 1 301 210

Hon Moiloa 1 243 009 1 164 125

Hon Duma 1 096 533 813 287

Hon Diale 1 115 384 738 593

Hon Schutte 1 144 600 844 844

Hon Motswenyane 1 073 354 845 229

Hon Theologo 1 042 593 785 291

Hon Klaas-Harman 940 347 710 088

Hon Faleni 1 076 995 773 088

Hon Motsi 988 858 831 062

Hon McGluwa 379 234 -

Hon Sehloho 488 402 -

Hon Mosala 251 179 -

Hon Ntsangani 39 538 -

Hon Hattingh 898 289 1 070 156

Hon Chauke 938 504 1 876 772

Hon Nyathi 1 044 606 933 928

Hon Kegakilwe 1 377 342 1 155 167

Hon Mashifane 402 609 707 629

Hon Mochware 178 939 -

Hon Lehari 350 533 -

Hon. Nkewu 225 598 -

Hon. Motlhabane 179 753 -

Related party balance: Amount due to the North West Provincial Treasury is unsecured, interest free and agreement was signed by the Acting Secretary in April 2016 commiting to settle the outstanding balance by September 2016, by paying an average of R6,000,000 per month. The amount payable is due to a deposit incorrecly paid from the Provincial Revenue Fund in 2015.

North West Provincial Legislature occupies a building owned by North West Public Work.No rental or utilities are being paid by the North West Provincial Legislature.

No bad debt expenses have been recognised or provision for bad debt accounted for regarding related parties





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31 March 2016

The Secretary of the Legislature was employed until February 2016. The Acting Secretary was appointed in August 2015.

The Executive Manager: Legal resigned in December 2015 whilst the Acting Legal Advisor was appointed in Jan-uary 2016.

The previous Executive Manager: Speaker's Office resigned in July 2015 and was replaced by the current incum-bent in August 2015. Additional employer contributions mainly consist of life assurance cover, spouse life assur-ance cover and funeral support services. The Acting Executive Manager: Proceedings resigned during the year.

31 March 2015

Included in the Hon. Speaker's emoluments is an amount of R174,916 relating to the previous Hon Speaker who was in the employment of the Legislature until 31 May 2014.

Included in the Hon. Deputy Speaker's emoluments is an amount of R137,166 relating to the previous Hon. Dep-uty Speaker who was in the employment of the Legislature until 31 May 2014

26. Fruitless and wasteful expenditure

Opening balance 3 258 000 3 258 000

Fruitless and wasteful expenditure - relating to prior year - -

Fruitless and wasteful expenditure - relating to current year - -

Less: Amounts resolved - -

Less: Amounts transferred to receivables for recovery - -

3 258 000 3 258 000

27. Irregular expenditure

Opening balance 75 662 184 75 662 184

Add: Irregular Expenditure - current year 72 775 093 -

Less: Amounts condoned - -

Less: Prior year amounts condoned - -

Less: Amounts recoverable (not condoned) - -

Less: Amounts not recoverable (not condoned) -

- -

148 437 277 75 662 184

Analysis of expenditure awaiting condonation per age classification

Current year 72 775 093 -

Prior years 75 662 184 75 662 185

148 437 277 75 662 185

Details of irregular expenditure - current year

Political Party Fund Payment Amounts investigated but not finalised 10 655 566

Payment of expenses in contravention of Supply Amounts investigated but not finalised 3 212 703

Chain Management Regulations

Irregular contracts Amounts investigated but not finalised 58 906 824

72 775 093


Details of irregular expenditure under investigation

Travel card fraud Amounts investigated but not finalised 1 363 430

Political Party Fund Payment Amounts investigated but not finalised 40 375 904

Irregular expenses Amounts investigated but not finalised 19 178 896

Irregular conttracts Amounts investigated but not finalised 87 519 047

148 437 277

Details of irregular expenditure - prior year (2015)

2016 2015

Opening balance 64 191 000 -

Current year (366 219) 64 191 000

Irregular expense payments to the value of R64,191,000 was not made in terms of the North West Provincial Legislature’s Financial Management Policy.

In 2015 the North West Provincial Legislature Management Act 3 of 2007 was repealed and was converted into a policy for the 2015 financial year. This resulted in the non-recognition of irregular expenditure incurred in 2015. FMMPLA came into effect from 1 April 2015.

Total 63 824 781 64 191 000

An amount of R366 219 was reversed from Irregular Expenditure as this amount was incorrectly included in Irregular Expenditure during the prior financial year (2015).

28. Budget differences

Material differences between budget and actual amounts

28.1 Interest income is not budgeted for hence a positive variance of R 3 750 554.

28.2 North West Provincial Treasury approved adjustment budget of R32,481,000 during budget adjustment period.

28.3 Employee related costs were grossly under budgeted for the current financial year. The allocation of employee cost was incorrectly calculated during the previous year’s budgeting process. This matter was addressed during the 2016/17 budget.

28.4 Depreciation is not a budgeting figure, therefore the variance exists.

28.5 The bad debt provision relates to prior year debtors (2010/2011) which has still not been recovered, there-fore a provision for bad debts was made.

28.6 The budget amount for transfers & subsisies did not include the annual 10% escalation in terms of the member’s enablement facilities.

28.7 This savings relates to the underprovision for salaries, therefore NWPL utilised goods & services budget to cater for salaries shortfall.


29. Risk management

Financial risk management

Due to the largely non-trading nature of the activities and the way in which it is financed, the Legislature is not exposed to the degree of financial risk faced by business entities.

The Legislature recognises the need to implement Risk Management. The Accounting Officer accordingly main-tains effective, efficient and transparent systems of risk management and internal control. Risk management is an integral part of the institutions activities to reduce risks to acceptable levels. Continued integration of risk manage-ment into key decision- making processes of the organisation was also achieved with the explicit inclusion of risk management principles into the department’s strategic and business planning processes.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities.

The entity’s risk to liquidity is a result of the funds available to cover future commitments. The entity manages liquidity risk through an ongoing review of future commitments and credit facilities.

The table below analyses the entity’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

At 31 March 2016 Less than 1 year

Between 1 and 2 years

Between 2 years and 5 years

Over 5 years

Payables from exchange transactions 11 364 140 - - -

Payables from non-exchange transactions 36 434 000 - - -

At 31 March 2015 Less than 1 year

Between 1 and 2 years

Between 2 years and 5 years

Over 5 years

Payables from exchange transactions 18 428 452 - - -

Payables from non-exchange transactions 36 434 000 - - -

Credit risk

Credit risk consists mainly of cash and cash equivalents and trade receivables. The NWPL only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Financial assets exposed to credit risk at year end were as follows:

Financial instrument

Cash and cash equivalents 21 009 859 92 816 622

Receivables from exchange transactions 6 931 010 3 797 325

Receivables from non-exchange transactions 26 687 000 -

Market risk

Interest rate risk

As the entity has no significant interest-bearing assets, the entity’s income and operating cash flows are substantially inde-pendent of changes in market interest rates.


30. First-time adoption of standards of GRAP

The entity has applied First-time adoption of GRAP, to provide a starting point for the reporting under GRAP Standards in princi-ple these standards have been applied retrospectively and the 2015 comparatives contained in these financial statements differ from those published in the financial statements published for the year ended 31 March 2016.

The date of transition was 1 April 2015 and the effect of the transition was as follows.

Reconciliation of equity at 31 March 2014

As reported under previous modified cash basis

Effects of transition to GRAP

GRAP

Property, plant and equipment: Book value (N1) - 17 032 643 17 032 643

Intangible assets: Book value (N1) - 1 002 109 1 002 109

Total non-current assets - 18 034 752 18 034 752

Receivables from exchange transaction (N6) 2 702 492 (1 364 117) 1 338 883

Receivables from non-exchange transaction 3 516 000 (3 516 000) -

Cash and cash equivalents 56 403 991 - 56 403 991

Total current assets 62 622 483 (4 880 117) 57 742 874

Provision (N4) - 3 346 220 3 346 220

Trade & other payables (N5) - 13 406 000 13 406 000

Finance lease liability (N7) - 803 128 803 128

Total liabilities - 17 555 348 17 555 348

Total assets less total liabilities 62 622 483 (4 400 713) 58 222 278

Retained earnings - (4 400 713) (4 400 713)

Reconciliation of equity at 31 March 2015



GRAP

Property, plant and equipment: Book value (N1) - 13 787 137 13 787 137

Intangible assets: Book value (N1) - 57 315 57 315

Total non-current assets - 13 844 452 13 844 452

Receivables from exchange transaction (N6) 2 331 810 1 465 515 3 797 325

Receivables from non-exchange transaction (N10) 3 516 000 (3 516 000) -

Cash and cash equivalents 92 816 622 - 92 816 622

Total current assets 98 664 432 (2 050 485) 96 613 947

Finance lease liability (N7) - 873 571 873 571

Payables from non-exchange transactions 36 434 000 - 36 434 000

Payables from exchange transactions (N5) - 18 428 452 18 428 452

Provisions (N4) - 5 310 886 5 310 886

Total liabilities 36 434 000 24 612 909 61 046 909

Total assets less total liabilities 62 230 432 (12 818 942) 49 411 490

Retained earnings 62 230 354 (12 818 864) 49 411 490


Reconciliation of surplus or deficit for 2015



GRAP

Revenue (N8) 316 335 112 (36 434 000) 279 901 112

Total revenue 316 335 112 (36 434 000) 279 901 112

Depreciation & amortisation (N2) - (4 193 655) (4 193 655)

Employee cost (N3) (118 261 337) (3 832 886) (122 094 223)

Transfers and subsidies (31 512 623) - (31 512 623)

Goods & services (N9) (126 367 000) (12 179 577) (138 546 577)

Impairment of receivables from exchange transaction (N6) - 358 414 358 414

Finance cost (N7) (48 000) (123 779) (171 779)

Capital expenses (N1) (4 105 000) 4 105 000 -

Loss on disposal of asset (N1) - (4 908 238) (4 908 238)

Net deficit before tax 36 041 152 (57 208 721) (21 167 569)

Net deficit 36 041 152 (57 208 721) (21 167 569)

Notes

Explanation of the differences between prior years audited financial statements reported under modified cash basis (MCB AFS) and the comparative figures on the GRAP financial statements (GRAP AFS) are:

30. First-time adoption of standards of GRAP (continued)

PROPERTY, PLANT & EQUIPMENt

N1: The book value of property, plant and equipment and intangible assets has been recognised in the GRAP AFS as assets are not capitalised under the modified cash basis. The recognition criteria of GRAP 17 has been followed relating to library books where individually insignificant items have been aggregated and capital-ised.

Movement in capital expenses is due to assets that were capitalised and loss on disposal of assets were recognised in the GRAP AFS.

N2: Depreciation and amortisation has not been accounted for in the MCB AFS

EMPLOYEE COST:

N3: Differences in employee cost relates to the movement in provision for leave pay, provision for bonus, provi-sion for long service awards and accrual for 13th cheque (non-cash items) that has not been included in the MCB AFS.

PROVISIONS:

N4: The provision for leave, bonus and long service awards has been accounted for in the GRAP AFS.

TRADE PAYABLES:

N5: Effect of the transition to GRAP for payables from exchange transactions relates mainly to accruals that were raised for the 2014/15 and 2013/14 year, which were disclosed in MCB AFS.

The accrual for 13th cheque of R2,898,000 (2015), R2,370,000 (2014) has also been recognised in the GRAP AFS.


TRADE RECEIVABLES:

N6: Movement in receivables from exchange transactions in 2015 & 2014 relates to the provision for impairment that has been recognised in the GRAP AFS and disclosure relating to this impairment has been disclosed in the MCB AFS.

Movement is also based on the prior period errors: i) Department of Public Works and Roads agreed to refund NWPL for repairs & maintenance undertaken in 2015 & 2014 which contribute to the movement in receiv-ables, and ii) Reversal of salary control accounts in 2014 of R358,099 which should have been recognised as employee costs.

Operating lease receivable was processed for 2015 & 2014 where the lease payments under the operating lease has been recognised as an expense on a straight-line basis over the lease term. Actual lease payments were accounted for in the MCB AFS.

FINANCE LEASE LIABILITY:

N7: The finance lease liability has been recognised in the GRAP AFS, as it was disclosed as a disclosure note in the MCB AFS. The fixed assets were capitalised and included as part of property, plant & equipment (N1). The liability, interest cost and general expenses has been accounted for in 2014 and 2015. The reduction of the finance lease liability has been offset against the communication and rental expenses (accounts to which the initial finance lease payments were allocated).

REVENUE:

N8: The MCB AFS recognised total appropriation allocated to the NWPL while GRAP requires actual cash re-ceived.

GOODS & SERVICES:

N9: Effect of the transition to GRAP for goods & services relates mainly to accruals, operating lease adjustment and adjustments relating to finance leases.

UNAUTHORISED EXPENDITURE

N10: Receivables from non-exchange transactions relating to unauthorised expenditure has been corrected as it is not required to recognise unauthorised expenditure if there is no certainty of receipt of amount. Refer to prior period error note.

31. Unauthorised expenditure

Opening balance 3 516 000 3 516 000

Current year 9 023 133 -

Condoned (3 516 000) -

9 023 133 3 516 000

NWPL has incurred unauthorised expenditure amounting to R9,023,133 due to the overspending of Parliament’s approved budget.


32. Prior period errors

The following prior period errors were corrected:

The following errors have an impact on the 2015 year:

MOVEABLE ASSETS:

The useful lives of assets were extended and it was not accurately accounted for movable assets written off in the prior year. This resulted in an understatement of loss on disposal of assets, depreciation and amortisation which has been corrected. The impact on retained earnings is R8,441,305.

ACCRUALS

Prior years accrual for 13th cheque has incorrectly been allocated to provision for performance bonus and the real-location of R2,898,000 has been made to correct the error. This did not have an impact on accumulated surplus.

RECEIVABLES

- Department of Public Works and Roads agreed to refund NWPL for repairs & maintenance undertaken on their behalf. The adjustments were made and the payments of R2,523,372.49 reflects as receivables

- Reversal of Unauthorised expenditure receivable of R3,516,000 as GRAP do not require the recognition of unauthorised expenditure if there is no certainty of receipt of amount.

The following errors have an impact on the 2014 year:

RECEIVABLES

- Department of Public Works and Roads agreed to refund NWPL for repairs & maintenance undertaken on their behalf. The adjustments were made and the payments of R421,250 reflects as receivables

- Reversal of salary control accounts of R358,099 which should have been recognised as employee costs in 2011.


MOVEABLE ASSETS:

Corrections were made to the 2014 balances for Property, plant & equipment & Intangible assets as the cost price of assets written off and the extended useful lives were not taken into account.

The correction of the error(s) results in adjustments as follows:

Statement of financial position 2015 2014

Property, plant & equipment: Net book value (7 496 511) 9 656 623

Intangible assets: Net book value (944 794) 439 974

Provision for performance bonus 2 898 000 -

Accrual: 13th cheque (2 898 000) -

Receivables from exchange transaction 2 523 372 421 250

Receivables from non-exchange transaction: Unauthorised expenditure (3 516 000) -

Receivables from exchange transaction: Salary control account - (358 099)

Retained earnings (9 433 933) 10 159 748

Statement of Financial Performance

Remuneration: Basic salary - (358 099)

Repairs & maintenance (2 523 372) 421 250

Amortisation 724 453 439 976

Depreciation 2 808 612 9 656 623

Loss on disposal of assets 4 908 240 -

Retained earnings 5 917 933 10 159 748


notes

120 NORTH WEST PROVINCIAL LEGISLATURE - ANNUAL REPORT 2015/16120 NORTH WEST PROVINCIAL LEGISLATURE - ANNUAL REPORT 2015/16

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