The Parliament of the Republic of South Africa Financial Management 20162017 Financial Year 1 2 Contents Annual Financial Statements for the period Financial performance Overview Financial Position as at 31 March 2017 ID: 645133
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Slide1
A presentation to the Portfolio Committee for Women in the Presidency
The Parliament of the Republic of South Africa
Financial Management
2016/2017 Financial Year
1Slide2
2
Contents
Annual Financial Statements for the period
Financial performance Overview
Financial Position as at 31 March 2017
Cashflow statement for the year ending 31 March 2017
Corporate Services – General Overview
Human Resources
Information and Communication Technology
Corporate Communications
Risk Management
PFMA and Audit Outcomes for the period to 31 March 2017
Regularity Audit outcomes – 2016/2017Slide3
3
Legislative Framework
Chapter 13 of the Constitution of South Africa, Act 108 of 1996 and the Public Finance Management Act of 1999 (as amended) advances for values which espouses openness and accountability in the allocation and use of state resources.
Under Chapter 1 of the PFMA (The Act) the values are bolstered further by provisions stating that the object of the Act is to secure transparency, accountability and sound management of the resources
Section 38 of the PFMA and related Treasury regulations promotes the integration of Risk Management practices into strategic planning and financial controls
Section 40 of the PFMA provides for the reporting responsibilities of an Accounting Officer of a Constitutional institution inter alia as to keep full and proper records of the financial affairs of the entity, prepare and submit to Parliament the financial statements for each annual period in accordance with Generally Accepted Accounting PrinciplesSlide4
Statement of Financial Performance
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A deficit (R2,2 million; 2017) attributable to depreciation
Additional resources for extra spending was covered by extra- allocation funding (Donations in the main).Slide5
Financial Performance & Budget management
5
Total expenditure exceeded the allocation from NT by R5,2 million.
Other income of R3 million counter-effected the overall over-spending, leaving a net R2, 2 million deficit at reporting date.
There were savings on COE for R3 million due reduction in P-bonus provision (R1 m for each year) and vacancies that existed during the period , most of which have been subsequently filled.
Unfavourable variances:
Depreciation – R1,8 m
Operating
exp
– R6 m due to Travel, report writing(20year review), etc.Slide6
6
72%
of spending is in support of core legislation and main programmes in the APP.
COE is linked to core work and accounts for 63% of the overall expenditure of which
79%
(
R37, 6 m
) thereof is directly linked to legislation (CGE Act, PEPUDA).
Expenditure by economic classification and programmeSlide7
Expenditure by location – comparatives to the budget
7
Cost containment and budget management effective institution-wide.
Depreciation is the key driver of the overall budget varianceSlide8
Financial Position
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Although the position is solvent and going concern assumption still valid; financial viability going forward is challenged:
Current assets are less than current liabilities by close to R1m – Liquidity weaknesses, the gradual effect of spending pressures on operating budget.
The NA position is diminishing year after year and without CAPEX budget, the whole balance sheet strength will be negatively impacted in the medium termSlide9
9
Year on year cash resources are reduced by payment to creditors, current spending on goods, services and employees.
Cash resources reduced from R8 m in the previous year to R4,5 m by March 2017 – The cash remains less than Liabilities/debts owed by the CGE as at 31 March 2017.Slide10
Corporate Services _ Human Resources Management..1
10
Performance related rewardsSlide11
Corporate Services _ Human Resources Management..2
11
Senior management and Commissioners constituted 15 of the 99 positions in the filled establishment. The combined % cost to total COE is 29% or R14m.
Of the 44 officials in the highly skilled category to level 12 , forty(39) are focussed on direct (i.e. Less administrative/managerial)/ but Core Service delivery roles
91 positions filled were permanent and additional 8 interns were employed in the period. The total cost of employees(COE) was
R47, 6 million
against a budget of
R50, 6 million
– Under-expenditure reported (refer to note 18 of the AFS).
Annual performance bonus was paid to 72 officials in lieu of 2015/2016 (previous financial year’s performance) –
R1 million
was paid out. A provision (
R1 m
– not paid out) was made for the 2016/2017 – refer to note 14 of the Annual Financial Statement for the same period
Over the annual period, staff turn-over was within acceptable bounds with 14 terminations (4 resignations and 10 lapse of contract – voluntary separations)Slide12
Corporate Services _ Human Resources Management..3
12
For every 22 leave days granted in terms of BEA and internal policies, about 21 annual leave days per employee were taken ( good compliance with s22 of BEA). However, fewer leave days were taken but Commissioners and Senior Management in comparison.
Sick leave days taken at a total average of 11 days per annum – within reasonable measures in a three year cycle of 36 days. There seem to be a higher sick leave days take by the “highly-skilled” staff category at an average of 15 days for 2016/2017.Slide13
Corporate Services _ Human Resources Management..4
13
In line with the requirements of PFMA section 40(3) below are the material disclosures;
Irregular & Fruitless spending – accumulated to R34,6 m & 245k respectively and the former awaits condonation by NT.
Four(4) Disciplinary measures undertaken, with one (1) involving financial misconduct without any embezzlement but for non-compliance with PFMA.
Recoveries of R27,650 received for a claim/loss from/by the former Chairperson (
Gasa
). Litigation abandoned on mutual agreement.
There were reports made alleging irregularity and impropriety by some members of management. Investigations were undertaken by the Audit Committee which proved the inaccuracy or lack of credibility on the merits as alleged.Slide14
Corporate Services – Information Technology…1
14
Infrastructure investment and status
Primary infrastructure project was successfully concluded/handed over on December 2016. All equipment and software products fully functional and adequate training/handover given to staff with satisfactorily uptake or immediate use (effective change management results).
Website improvement underway where due to the improvements, internet visits have shown a wide coverage both locally and internationally.
Use and day-to-day ICT operations
Internal support of day to day operations and business continuity is stable with incident management, backup and BCP fully in place – in line with the DPSA guidelines.
The transition to the new platform had very minimal intermittent effect to operations.Slide15
Corporate Services – Communications….1
15
Structure and strategic approach
The unit comprised of 2 Communications functionaries and 1 media relations resource.
The work is cantered on the Core APP in the main, where campaigns are undertaken using various channels of communication for the delivery, ranging from Radio, TV, social media.
To built efficiencies and leverage the extent of reach to the stakeholders, partnerships are formalised – e.g. SABC where an economic benefit of up to R2,5 million were estimated for the 2016/2017 period.
Branding is maintained in order to ensure that there is sufficient visibility and institutional positive identity before the public and other key stakeholders.
Achievements for 2016/2017
4 main campaigns through various radio stations reaching millions of listeners over the year. Human Rights month, Youth Month, Women’s Month and 16 Days Campaigns were undertaken.
On topical issues, media statements and interviews were done – 48 press releases, 66 TV interviews, 47 newspaper articles & 138 community radio stations interview (Wide coverage on a diverse gender equality related & social topicsSlide16
Audit & Risk Management - Action Plans
16
Risk Management – Section 38(1)(g) and 76(2)(e) of the PFMA
Systems and process in place through out the financial year under the supervision of the audit committee.
NTR – 27.
an internal audit, overseen by the Audit Committee fully functional (
PFMA – s77
).
Audit – PAA & PFMA
Regularity audit by AGSA was concluded with an Unqualified opinion on the Annual Financial Statements for the period ending 31 March 2017. The are matters drawn to the attention of the user, pertaining to :- Pre-determined objectives & the investigations on irregularities against members of the senior management.Slide17
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Thank You
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