VOTE 30: ENVIRONMENTAL AFFAIRS Portfolio Committee Briefing

Annual Financial Statement for 2011/12 16 – 17 October 2012

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Presentation Outline

- Auditor- General report on the Financial Statements (Annexure A)- Irregular expenditure- Expenditure for 2011/12- Detail on current expenditure- Detail other operating expenditure- Transfers on EPWP - Transfers to Public Entities- Transfers to non-profit and other institutions- Capital Expenditure- Departmental expenditure trend

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Continued Presentation Outline

- Auditor-General’s opinion on Public Entities- Public Entities source of revenue- Internal versus external revenue- Public Entities expenditure- Total revenue versus total expenditure- Surplus- Challenges experienced for period under review

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

• Unqualified Audit

• Donor funding audit for 2011/12 in progress to be finalized by end of October 2012

• Unauthorized and irregular expenditure: Irregular expenditure was incurred in the current year and condoned by National Treasury during the 2012/13 financial year.

• 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 organizationsAll transfers made are per prior management and Treasury approval as well as within disclosure requirements.

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Irregular expenditure condoned by National Treasury

Bid Number AmountRand

Reason Actions

E 1168 549 457 No tax clearance certificates for sub-contractor

Terms of reference updated Controls reviewed Training to Bid committee

members Condoned by National Treasury

E 1181 1 848 028

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Irregular expenditure identified during the audit• All bids for the financial year were audited

Expenditure for the 2011/12 Financial Year per Programme

Programme Final appropriation

R’000

Expendi-ture

R’000

Expenditure as % of final

appropriationR’000

Variance

R’000

1. Administration 293 995 293 995 100.0% -

2. Environmental quality and protection 308 614 298 016 96.6% 10 598

3. Oceans and coasts 876 337 876 337 100.0% -

4. Climate change 137 163 137 163 100.0% -

5. Biodiversity and conservation 456 577 456 577 100.0% -

6. Sector services, coordination and information management and internal relations

2 128 930 2 046 461 96.1% 82 469

Total 4 201 616 4 108 549 97.8% 93 067

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Expenditure per Economical ClassificationEconomical classification Final

appropriationR’000

Expenditure

R’000

Variance

R’000

Current Payments 1 443 063 1 432 170 10 893- Compensation of employees (Variance due to time lag in process of filling posts)- Goods and services (Variance mainly due to accruals)*- Interest

479 891962 929

243

471 649960 278

243

8 2422 651

-

Transfers and Subsidies 2 078 890 2 002 082 76 808

- Households: Expanded Public Works Programme (Variance – incentive funds surrendered)*- Departmental entities*- Non-profit institutions*-Other transfers:* Global Environmental Fund Households: Social benefits (leave gratification) North West University Vehicle licenses

1 377 874658 655

25 653

12 8902 838

9685

1 301 074658 655

25 653

12 8902 838

9675

76 807--

--1-

Sub total 3 521 953 3 434 252 87 701

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Continued Expenditure per Economical ClassificationEconomical classification Final

appropriation

R’000

Expenditure

R’000

Variance

R’000

Payment for capital assets* 679 552 674 186 5 366

-Machinery and equipment (New polar vessel R640 795 000)-Software

679 037515

673 671515

5 366-

Payments for financial assets 111 111 -

Sub total 679 663 674 297 5 366

TOTAL 4 201 616 4 108 549 93 067

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Detail Current Expenditure *Notes Expenditure

Goods and services 2011/12R’000

2010/11R’000

Consultants , contractors and agency/ outsourced services (Annexure B)Travel and subsistence (Annexure C)Other operating expenditure (refer to next slide)*Operating leases (include accommodation, car rentals and Nestle machines rentals; transfer to DAFF)Inventory (Including stores for Antarctica) – Herbicides purchased for eradication of alien invasion species: NRM, computer consumables for tracking oceanographic research items. Computer services (Increase in computer service, Microsoft Enterprise upgrade and licensing) Advertising (increase in marketing: COP 17, promotional items and recruitments costs) Venues and facilities (Cop 17 events, communication projects and meeting to facilitate the transfer of NRM)Owned and leasehold property expenditure (Include building maintenance and repairs)Training and staff development (NRM Implementing Agencies & pilot youth programmes — R10,1 million; Training to employees — R5,9 million) Communication (Installation of data lines, telephone & conference facilities in regions/Cape Town) Audit cost - externalAssets less than R5 000CateringRental and hiring (Hire and service for hosting of 4th Transition Committee meeting, World Environmental day, launch of hotel at SANParks) Bursaries employeesAdministrative fees (increase in personnel agency and travel agency fees) EntertainmentTransport provided as part of the departmental activitiesFleet services

556 69296 91063 74858 06850 248

28 90524 13421 507

16 78116 043

10 9784 4344 1563 0652 428

1 210765136

691

185 54370 22734 88578 96833 617

16 47816 34715 052

14 4986 402

6 2534 5427 7022 537

-

1 258338108

--

TOTAL 960 278 494 755

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Detail Current Other Operating Expenditure *

Notes Expenditure Expenditure

Other Operating Expenditure *2011/12

R’0002010/11

R’000

Air charter services & landing rights (services related to the voyages to Islands; extra voyage to Marion Island for the opening of the new base as well as oil spill control on the coasts)Harbour, dock fees (Buoy, ocean surveyor & systems)Professional bodies, membership and subscription fees (annual membership contributions)Printing & publications services Resettlement costsCourier & Delivery servicesFreight services transport goodsOther:Car valet & wash services/Laundry services/Gifts/Nonlife insurance/Drivers licenses & permits/Achievements and awards/Storage of assets & goods

25 293

14 98914 385

4 6843 293

805204

95

20 855

1906 550

3 0443 311

643279

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TOTAL 63 748 34 885

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Transfer onExpanded Public Works Projects 2011/12 *

Institutions ExpenditureR’000

2011/12

Sustainable land base livelihoods 245 454

Working for waste 177 021

People and parks 128 770

Working for the coast 76 384

Beneficiary training 23 869

Working for Fire 351 996

Working for Water 297 572

Total 1 301 066

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Transfer to Public Entities *

Institutions ExpenditureR’000

2011/12

South African National Parks 222 014

South African Biodiversity Institute 220 387

South African Weather Services 148 407

iSimangaliso Wetland Park of Authority 67 847

Total 658 655

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Transfer to Non-Profit Institutions *

Public Entity/Institution Expenditure

R’000

Buyisa-e-Bag 16 050

Wildlife and Environmental Society of South Africa 4 000

African World Heritage Fund 3 000

National Association for Clean Air 1 400

Maloti Drakensberg 1 203

Total 25 653

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Institution Expenditure

R’000

Global Environmental Fund 12 890

Social Benefit 2 838

North West University 967

Municipalities (various) 5

Total 16 700

Other Transfers *

Payment for Capital Assets *Notes Expenditure

Machinery and equipment R’000

Ship & marine equipment (Final payment SA Agulhas II)Computer hardware & systemsExpenditure for capital assets; Good and servicesAudio visual equipmentOffice furnitureFinance fee leaseOffice equipmentPhotographic equipmentMotor vehicleSoftware and other intangible assetsMedical and allied equipmentLifting & handling equipmentTransport accessories & trailersRadio equipmentSecurity equipment, systems, material: movableWorkshop equipmentGardening equipmentKitchen appliancesTelecommunication equipmentBagsSurvey equipmentDomestic equipment

645 7019 1376 0734 4242 3572 1001 365

627698515369213147118

79706944382411

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Total 673 726

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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%

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Auditor-General’s Opinion on Public Entities

Audit Opinion

Entity Unqualified Emphasis of matter

Reason Action

SANParks Yes None - -

SANBI Yes Yes Under spending

• Grant received on shortfall • Projects initially postponed as

part of saving measures• Surplus will be applied to

continue projects in 2012/13

SAWS Yes None - -

iSimangaliso Yes None - -

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Revenue SANParks

R’000

SANBI

R’000

SAWS

R’000

iSiman-galiso

R’000

Government Grant 716 881 220 387 162 476 113 636

Transfer: Environmental Affairs Other transfers from departments

222 014494 867

220 387-

148 40714 069

67 84745 789

Own revenue 984 756 177 449 104 454 26 425

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

897 40821 53645 09820 212

502---

30 14912 214

1 3592 455

129 7931 479

--

80 4173 331

-5 217

--

15 489-

9 0665 046

-331

---

11 982

Total 1 701 637 397 836 266 930 140 061

Public Entities source of revenue

Internal versus external revenue

• The relationship between the revenue generated from external sources (i.e. grants) and internal sources (i.e. fees, donations, interest, etc.) as a percentage of total revenue as demonstrated above.

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Expenditure SANParks

R’000

SANBI

R’000

SAWS

R’000

iSimangaliso

R’000

Compensation of employees 584 373 137 876 138 066 8 675

Operating expenses 497 184 55 402 89 915 28 700

Administration expenditure 67 297 14 644 6 565 24 988

Projects 551 958 124 617 - 26 312

Total 1 700 812 332 539 234 546 88 675

Public Entities expenditure

Total revenue versus total expenditure

This chart demonstrates the relationship between the total revenue and expenditure, therefore the net surplus position of the entities for the year ended 31 March 2012.

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SANParksR’000

SANBIR’000

SAWSR’000

iSimangalisoR’000

Surplus 825 65 000 32 000 51 000

Reason • Improved revenue collection.

• Better cost management.

• Park develop-ment fund.

• Sales of fauna and flora.

• Land acqui-sition grant.

• Allocation of additional funds for commitments to projects.

• Decrease in the liability for post retirement medical benefits.

• Increase aviation tariff charges, web sales.

• Rental of equipment lease of aircraft in India.

• Sales from portal subscription and mobile sales.

• Increase of grants.• Levying of

penalties against contractors failure to meet their contractual undertakings.

• Growth in gate revenue.

Public Entities expenditure

Challenges experienced by the department during 2011/2012

- Timely updating of asset movements in asset register- Compliance in tender verification requirements - Consultation of policies via the departmental bargaining council- Reliance and clear reporting on performance information and availability of

supporting documents- Disclosure note verification

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