VOTE 30 2012/2013

Annual Financial Statements for the year ended31 March 2013

Annual Report Presentation to the Portfolio Committee on Water and Environmental Affairs

15 October 2013

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Presentation Outline

- Expenditure per programme- Expenditure per economic classification- Transfers to Public & Entities and other Agencies- Expanded Public Works Programmes & Projects - Donor Funding- 30 Days Payment Report- Auditor- General report

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Expenditure for the 2012/13 Financial Year per Programme

Programme Final appropriation

R’000

Expenditure

R’000

Expenditure as % of final

appropriationR’000

Variance

R’000

1. Administration 715 751 703 041 98.2% 12 710

2. Environmental quality and protection 324 990 324 990 100.0% -

3. Oceans and coasts 524 584 524 584 100.0% -

4. Climate change 28 905 28 061 97.1% 844

5. Biodiversity and conservation

568 413 568 412 100.0% 1

6. Environmental sector programmes and projects

3 012 678 2 793 573 92.7% 219 105

Total 5 175 321 4 942 661 95.5% 232 660

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Expenditure per Economical Classification

Economical classification Final appropriation

R’000

Expenditure

R’000

BalanceSurrendered

R’000

Note

Current Payments 1 407 165 1 385 750 21 415- Compensation of employees -Goods and services

574 882832 283

560 834824 916

14 0487 367

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Transfers and Subsidies 3 293 354 3 082 109 211 245

Departmental agencies and accountsForeign GovernmentsNon Profit OrganisationsOther transfers – Green FundExpanded Public Works Projects

750 58512 89029 978

300 0002 199 901

750 58512 89029 95988 774

2 199 901

--

19211 226

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Payment for capital assets* 474 802 474 802 -

PPP payment for the new buildingSA Agulhas: VAT and Customes Clearing costMachinery, computers, office, laboratories equipment,& financial assets

220 000187 684

67 118

220 000187 684

67 118

o/w payments for financial assets 161 161 -

Total 5 175 321 4 942 661 232 660

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Funds surrendered to National Treasury-Note 1: vacant posts not filled during the review of the establishment-Note 2: Savings from goods & services-Note 3: Late allocation of Green Fund budget by NT therefore late approvals of projects

Detail Current Expenditure *Notes Expenditure

Goods and services 2012/13R’000

2011/12R’000

Consultants , contractors and agency/ outsourced services - Project Management cost, Smit Amandla operating and maintenance cost and professional fees. (Annexure A)Travel and subsistence. (Annexure B)Venues and facilities. Annexure COther operating expenditure (refer to next slide)*Operating leases – Accommodation charges and operating lease payments.Inventory – herbicides, research supplies, oil & gas, food suppliesComputer services - External computer services, software license and operational systems. Advertising – Media coverage services. Owned and leasehold property - Renovations (Fedsure forum- Pretoria and Waterfront building).Communications – (Radio, TV transmission, National People's and Parks conference)Training and staff development (courses & workshops)Audit cost - ExternalCateringAssets less than R5 000Bursaries employeesRental and hiring - Minister's Sod-Turning ceremony for the new building.Administrative fees - Launch of SA Algulhas II and the Sod-Turning ceremonyEntertainment - Meetings with external and internal stakeholders. Transport provided as part of the departmental activities.Fleet services

340 382

142 28330 21957 48467 48859 89336 06826 82021 745

16 5907 3685 7184 0713 9891 6801 6751 139

2326210

556 692

96 91021 50763 74858 06850 24828 90524 13416 781

10 97816 043

4 4343 0654 1561 2102 428

765136

691

Total 824 916 960 278

Notes on goods & services

Item Description VarianceR’000

Consultants , contractors and agency/ outsourced services

Decrease in contractorsCOP 17 late invoices paid in 2012– R112m,Re-classification of NRM contractors from goods & services to transfers- R104m

216 310

Operating leases Increase Additional rental/ accommodation charges in respect of the NRM regional offices and operating lease payments.

9 420

Computer services - IncreaseThe support and maintenance for Working for Water and Fire Information Management System, Premium support and 2nd year Enterprise Agreement with Microsoft via SITA.

7 163

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Detail Other Operating Expenditure *

Notes Expenditure

Other operating expenditure *2012/13

R’0002011/12

R’000

Air charter services & landing rights.Professional bodies, membership and subscription fees*Printing & publications services. Resettlement costs.Harbour, dock fees.Courier & Delivery services.Other operating expenditure.Freight services transport goods.

30 86614 598

5 5131 6901 4341 2061 200

977

25 29314 385

4 6843 293

14 989805

95204

Total 57 484 63 748

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* Refer following slides

Payment for Professional bodies, membership and subscription fees* (R14 598)

• Benguela Current Commission (BCC)• Intergovernmental Science –Policy Platform on Biodivsersity & Ecosystem Services

(IPBES)• Commission for the Conservation of Antartictic Marine Living Resources(CCAMLR)• African Institute for Environmentally Sound Management of Hazardous & other

waste (AIESMH &W)• United Nations Environment Programme (UNEP)• Environmental Assessment Practitioners (EAP’s)• Interim Certification Board (ICB)• Environmental Systems Research Institute South Africa (ESRI)• Enterprise Licence Agreement

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Allocation to Public Entities and Own Revenue

Revenue SANParksR’000

SANBIR’000

SAWSR’000

ISWPR’000

TOTAL

DEA Operational and Infrastructure Grant 319 216 209 698 150 581 71 090 750 585

Transfers from other departments/institutions, EPWP)

259 936 179 665 8 453 34 846 482 900

Total Transferred 579 152 389 363 159 034 105 936 1 233 485

Revenue 1 097 375 53 557 94 316 15 716 1 260 964

Revenue from operating activities/Admission fees/Aviation income/Park revenueOther incomeSalesInvestment incomeDonationsFair value gainNon-regulated commercial incomePenalties

1 058 11720 196

3 75212 573

2 737---

32 05413 870

1 5955 586

239213

--

73 7711 853

-4 781

--

13 911-

10 9954 231

-465

---

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Sub-total 1 676 527 442 920 253 350 121 652 2 494 449

Deferred grant /transfers - (43 346) 22 (42 341)

Total revenue 1 676 527 399 574 253 372 79 311 2 408 784

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Expenditure SANParksR’000

SANBIR’000

SAWSR’000

iSimangalisoR’000

Total revenue per annual financial statements

(1 676 527) (399 574) (253 372) (79 311)

Total expenditure per annual financial statements

1 717 837 405 211 269 120 89 036

Deficit per annual financial statements

(41 310) (5 637) (15 748) (9 725)

Public Entities Revenue and Expenditure

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Public Entities Revenue and Expenditure

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SANParksR’000

SANBIR’000

SAWSR’000

iSimangalisoR’000

Deficit 41 309 5 637 15 748 9 725

Reason • Damages caused by floods (R7m)

• Outstanding forestry grant (R24,4m) - Request submitted to National Treasury during the 2013/2014 financial year to include in the adjustments estimate allocation.

• Operating cost as a result from control take over of the restaurants in the KNP, Kgalagadi and Augrabies National Parks (R10,m)

• Increased liability valuation on retirement benefits fund for employees (Post-retirement Medical Benefit R2m and interest on Fair value of Defined Benefit Obligation R3m)

• Shortfall in: Aviation income

(R5.7m) Non-regulated

commercial revenue (R5.3m)

• Bad debt written-off in respect of administrative expenses (R4.2m)

• Bad debt written-off in respect of penalties levied on a contractor that subsequently went into liquidation (R5.7m)

• Increase in sub-contractors in respect of project cost (R4m).

Public Entities Deficit

Auditor-General’s Opinion on Public Entities

Audit Opinion

Entity Unqualified Emphasis of matter

Reason/Comments Action

SANParks Unqualified None - -

SANBI Unqualified Yes Leave and bonus accrual disclosed as provisions

(Previous year restated)

Reporting error corrected

SAWS Unqualified None Material non- compliance reported due to the

misstatement of commitments (leases) and 31 March 2012

need to be restated

Misstatement was corrected and previous

year figure restated

iSimangaliso Unqualified Yes Identified classification errors that required corrections and restatement of the previous years financial statements

Reclassification was done and previous

year figures restated

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Allocations & Transfers to Other Agencies

DBSAGreen Fund

R’000

Nat. Assoc.

for Clean Air

(NACA)

R’000

Nat. Regulator

of Compulsory Spec. &

Comp. Fund

(NRCS)R’000

Global Environmental Fund

(GEF)R’000

KZN Conserv. Board:Maloti

North West

University

World Wild Life Soc. Of

SAWESSA

Social Benefits/

Leave gratitude

TOTAL

R’000

Allocated Budget

Donations & Licenses

Buyisa eBag

300 000 1 400 10 0007 689

12 890 1 288 1 000 4 000 3 893 342 160

508

200

Transferred (88 774) (1 400) (17 689) (12 890) (1 287) (1 000) (4 000) (3 893) (130 933)

Donations & licenses

Buyisa e bag

(490)

(200)

Balance 211 226 - - - 1 - - 211 245

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Allocations & Transfers Expanded Public Works Projects

Working for Water

R’000

Working for Fire

R’000

Environmental Projects

R’000

TOTAL R’000

Allocated Budget 705 836 446 288 1 048 019 2 200 143

Projects Incentives

550 800155 036

397 37748 911

900 674147 345

1 848 851 351 292

Transferred (705 605) (446 276) (1 048 020) (2 199 901)

ProjectsIncentives

(550 557)(155 048)

(397 377)(48 899)

(900 675)(147 345)

(1 848 609) (351 292)

Balance 231 12 - 243*

*Unearned Incentives to paid back to National Treasury

Expanded Public Works per Projects*Expenditure

2012/13R’000

2011/12R’000

Working for water 662 519 297 572

Sustainable land base livelihoods 493 290 245 454

Working for Fire 362 620 351 996

People and parks 215 748 128 770

Working for waste 188 069 177 021

Working for coast 114 448 76 384

Working for forest operations 85 359 -

Working for land operations 41 384 -

Beneficiary training 36 464 23 869

Total 2 199 901* 1 301 066*

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*The increase in 2012 is due to Additional funding received from NT for Environmental Programmes (- +R375 million) including the shift from small contractors to transfers (-+R480 million)

Foreign Aid Assistance

Donor Country Purpose Budget Allocated

Expenditure Balance

United Nations on Environmetal Programmes (UNEP)

Convention on Climate Change & Reducing Mercury emission

518 444 74

United Nations Development Programmed (UNDP)

Rotterdam Convention & Marine Coastal Programme

(48) (48) -

Denmark Waste Management Strategy 1000 1 000

Botswana Transfrontier Conservation Strategy

812 - 812

World Bank African Stofile Programme (8) 44 (52)

Norway Environmental Co-operation Programme

- - -

Germany Climate Change Programme 540 1 539

TOTAL 2 814 1 441 1 37317

30 Days Report Financial 2012-13

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FY 2012-13 Apr'12 May'12 Jun'12 Jul'12 Aug'12 Sep'12 Oct'12 Nov'12 Dec'12 Jan'13 Febr'13 March'13 TotalTotal Number of Invoices < 30 days 620 1,753 1,772 2,115 1,568 1,751 2,401 2,546 2,339 2,374 2,588 3,875 25,702 Total Expenditure < 30 days R 320,742 R 432,325 R 455,843 R 527,986 R 290,239 R 276,323 R 369,561 R 456,461 R 436,883 R 378,767 R 400,391 R 597,140 R 4,942,661Average days of payments 24 26 22 31 25 23 27 22 23 25 20 24 24 Number of Invoices > 30 days 4 24 15 83 25 19 21 19 1 12 - 2 225 Total Value > 30 days R 30 R 387 R 289 R 692 R 985 R 154 R 3,344 R 249 R 87 R 28 R 0 R 36 R 6,281Percentage of payments > 30 days 1% 1% 1% 4% 2% 1% 1% 1% 0% 1% 0% 1% 1%

Exception Report: Instruction Note 34 (Effecting Payments Within 30 Days)Financial Year 2012-2013

Apr '12 May '12 Jun '12 Jul '12 Aug '12 Sep '12 Oct '12 Nov '12 Dec '12 Jan '13 Feb '13 Mar '13

legislated Base line 30 30 30 30 30 30 30 30 30 30 30 30

Average payment days 24 26 22 31 25 23 27 22 23 25 20 24

Percentage of payments > 30 days 1% 1% 1% 4% 2% 1% 1% 1% 0% 1% 0% 0%

0

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10

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Exception Report: Effecting Payment Within Thirty (30) Days

Departmental Expenditure Trend

Year BudgetR’000

ActualR’000

% Expenditure

2004/2005 1 652 268 1 633 882 98.9%

2005/2006 1 753 307 1 746 154 99.6%

2006/2007 2 061 804 2 059 664 99.9%

2007/2008 2 790 521 2 788 757 99.9%

2008/2009 3 206 557 3 198 878 99.8%

2009/2010 3 510 641 3 503 338 99.8%

2010/2011 2 488 514 2 390 023 96.0%

2011/2012 4 201 616 4 108 549 97.8%

2012/2013 5 175 321 4 942 661 95.5%

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Auditor-General Report on the Financial Statements (Refer Annexure A)

• Unqualified Audit

• One matter on material misstatement of commitments:– Commitments overstated by R61,575 million as a result of including LOGIS orders that should

have been deleted prior to 31 March 2013.– Corrected in Annual Financial Statements after 31 May 2013.– Resulted in non-compliance to specific matters in key applicable laws and regulations.

• Unauthorized and irregular expenditure: - No new irregular expenditure occurred.

- Irregular expenditure was incurred in the previous financial year- 2012/1 was condoned by National Treasury

• Disclosure items in the financial statementsThe department complied with all disclosure requirements, classifications and policy frameworks as prescribed by Treasury.

• Transfers to agencies and other organisationsAll transfers made are per prior management and Treasury approval as well as within disclosure requirements.

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