2022/23 PPRA ANNUAL REPORT PRESENTATION TO THE
Description: 202223 PPRA ANNUAL REPORT PRESENTATION TO THE PORTFOLIO COMMITTEE 1 1. TABLE OF CONTENTS Page Purpose 3 Executive Overview 4 Performance Outcomes 202223 5 - 16 Financial Performance 202223 17 - 25 Audit Outcome 202223 26 - 29
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slide1. 2022/23 PPRA ANNUAL REPORT PRESENTATION TO THE PORTFOLIO COMMITTEE 1<br>
slide2. 1. TABLE OF CONTENTS Page
Purpose 3
Executive Overview 4
Performance Outcomes 2022/23 5 - 16
Financial Performance 2022/23 17 - 25
Audit Outcome 2022/23 26 - 29
Recommendation 30 Page 2<br>
slide3. 2. PURPOSE OF THE PRESENTATION To present to the Portfolio Committee of Human Settlements: Annual Report of the PPRA Group and Authority for the 2022/23 financial year. Page 3<br>
slide4. 3. EXECUTIVE OVERVIEW AND HIGHLIGHTS Key achievements
The Property Sector Research Centre was established in partnership with the National Research Foundation (NRF).
The Centre is currently pursuing further strategic partnerships with leading institutions of higher education. The entity plans to utilise research results to improve its offering to property practitioners and its support to consumers, and to also influence national, regional and global policy-making.
The new organisational structure was approved by the Board, in concurrence with the Minister, during November 2022. The recruitment process for C-Suite and critical management positions has been concluded. Other critical positions are earmarked to be filled in the 2023/24 financial year.
A notable improvement in the PPRA’s performance was achieved in Q4 of the 2022/23 financial year by a resounding 68% improvement from Q1. This performance was achieved through dedicated engagements by the Acting Chief Executive Officer with executives, process owners and the Internal Audit team. Page 4<br>
slide5. Page 5 4.1 PERFORMANCE SUMMARY REPORT (1 of 2)<br>
slide6. 4.1 PERFORMANCE SUMMARY REPORT (2 of 2) Page 6<br>
slide7. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (1 of 5) Page 7<br>
slide8. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (2 of 5) Page 8<br>
slide9. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (3 of 5) Page 9<br>
slide10. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (4 of 5) Page 10<br>
slide11. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (5 of 5) Page 11<br>
slide12. 4.3 PROGRAMME 2: LICENSING AND COMPLIANCE Page 12<br>
slide13. 4.4 PROGRAMME 3: INSPECTION AND ENFORCEMENT Page 13<br>
slide14. 4.5 PROGRAMME 4 RESEARCH, PROFESSIONALIZATION, AND TRAINING (1 of 2) Page 14<br>
slide15. 4.5 PROGRAMME 4 RESEARCH, PROFESSIONALIZATION, AND TRAINING (2 of 2) Page 15<br>
slide16. 4.6 PROGRAMME 5: TRANSFORMATION Page 16<br>
slide17. 5. FINANCIAL PERFORMANCE 2022/23 5.1 PPRA STATEMENT OF FINANCIAL POSITION Page 17<br>
slide18. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.2 ANALYSIS OF GROUP’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The current assets of the Group are summarised in the table below:
The Group’s current assets increased by R233m from R562m to R795m due mainly to an increase in :
Other financial assets of the PPFF increased from R499m to R575m. These financial assets were in long-term investments in 2021/22 and matured and were invested in short-term instruments in 2022/23.
Receivables from non-exchange transactions increased from R11m to R77m due to penalties and fines raised in both the PPRA and PPFF
Cash and cash equivalents increased from R17m to R103m mainly due to an increase in cash reserves brought about by an increase in the collection of fees for issuance of 3-year FFCs from PPRA and an increase in funds received for agent interest for PPFF. Page 18<br>
slide19. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.2 ANALYSIS OF GROUP’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The non-current assets of the Group are summarised in the table below:
The Groups non-current assets decreased from R265m to R140m mainly due :
Reduction in the value of assets brought about mainly by depreciation and amortisation respectively.
Decrease is due to investments in PPFF which matured and the Board’s decision to invest the funds in short-term investment portfolios. Page 19<br>
slide20. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.2 ANALYSIS OF GROUP’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The liabilities of the Group are:
The Group’s total liabilities increased from R96m to R167m mainly due to increase in :
Deferred revenue (disclosed as current and non-current liability) increased from R73m to R141m as a result of PPRA issuing 3-year FFCs in line with new Property Practitioners Act.
Agent interest received in advance for the PPFF increased from R1,5m to R4,6m
Increase of R1.7m in post-retirement medical aid benefit obligations (current & non-current)
The Groups net assets increased by R37m from R731m to R768m due to surplus earned by PPFF of R52m in 2022/23 and a deficit of R15m in PPRA. Page 20<br>
slide21. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.3 ANALYSIS OF PPRA’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The current assets of the PPRA are as follows:
The PPRA’s current assets increased by R54m from R87m to R141m mainly due to increase in :
A decrease of R32m in inter-company loans and receivables as the PPFF settled the long outstanding management fee that was due to PPRA
Receivables from non-exchange increased from R19m to R33m due to penalties and fines raised in the PPRA
Cash and cash equivalents from R9m to R68m mainly due to an increase in cash reserves brought about by increase in collection of fees for issuance of 3-year FFCs by PPRA in line with the new PPA.
The PPRA’s non-current assets decreased from R142m to R140m mainly due :
Reduction in value of assets brought about mainly by depreciation Page 21<br>
slide22. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.3 ANALYSIS OF PPRA’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The current and non-current liabilities of the PPRA are summarised in the table below:
The PPRA’s total liabilities increased from R94m to R162m mainly due to increase in :
Deferred revenue (disclosed as current and non-current liability ) increased by R68m from R73m to R141m as a result of PPRA issuing 3-year FFCs in line with new Property Practitioners Act
An increase of R1.7m in post-retirement medical aid benefit obligations (current and non-current)
The PPRA’s net assets decreased from R134m to R119m due to increase in deficit incurred from R9m to R15m. Page 22<br>
slide23. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.4 PPRA STATEMENT OF FINANCIAL PERFORMANCE
The analysis of statement of financial performance is based on the fact that the PPRA came into effect in Feb 2022 and thus the analysis is done by comparing annual results for 2022/23 against two months result for 2021/22. Page 23<br>
slide24. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.6 PPRA STATEMENT OF COMPARISON OF BUDGET VS ACTUAL AMOUNTS PERFORMANCE 2022/23 Page 24<br>
slide25. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.8 CASHFLOW STATEMENT Page 25<br>
slide26. 6. AUDIT OUTCOMES The audit outcomes for PPRA, PPFF, and PSTF are as follows
PPRA – Qualified audit opinion
PPFF – Unqualified audit opinion
PSTF – Unqualified audit opinion
The summarised key audit outcomes for PPRA have been presented on pages 27 – 29. Page 26<br>
slide27. 6. AUDIT OUTCOMES : KEY AUDIT FINDINGS AND ACTION PLANS – PPRA Page 27<br>
slide28. 6. AUDIT OUTCOMES : KEY AUDIT FINDINGS AND ACTION PLANS – PPRA Page 28<br>
slide29. 6. AUDIT OUTCOMES : KEY AUDIT FINDINGS AND ACTION PLANS – PPRA Page 29<br>
slide30. 7. RECOMMENDATION Recommendation
For the Portfolio Committee of Human Settlements to “Note the presentation on the Annual Report of the PPRA and its Group for the 2022/23 financial year”.
Thank you Page 30<br>
slide2. 1. TABLE OF CONTENTS Page
Purpose 3
Executive Overview 4
Performance Outcomes 2022/23 5 - 16
Financial Performance 2022/23 17 - 25
Audit Outcome 2022/23 26 - 29
Recommendation 30 Page 2<br>
slide3. 2. PURPOSE OF THE PRESENTATION To present to the Portfolio Committee of Human Settlements: Annual Report of the PPRA Group and Authority for the 2022/23 financial year. Page 3<br>
slide4. 3. EXECUTIVE OVERVIEW AND HIGHLIGHTS Key achievements
The Property Sector Research Centre was established in partnership with the National Research Foundation (NRF).
The Centre is currently pursuing further strategic partnerships with leading institutions of higher education. The entity plans to utilise research results to improve its offering to property practitioners and its support to consumers, and to also influence national, regional and global policy-making.
The new organisational structure was approved by the Board, in concurrence with the Minister, during November 2022. The recruitment process for C-Suite and critical management positions has been concluded. Other critical positions are earmarked to be filled in the 2023/24 financial year.
A notable improvement in the PPRA’s performance was achieved in Q4 of the 2022/23 financial year by a resounding 68% improvement from Q1. This performance was achieved through dedicated engagements by the Acting Chief Executive Officer with executives, process owners and the Internal Audit team. Page 4<br>
slide5. Page 5 4.1 PERFORMANCE SUMMARY REPORT (1 of 2)<br>
slide6. 4.1 PERFORMANCE SUMMARY REPORT (2 of 2) Page 6<br>
slide7. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (1 of 5) Page 7<br>
slide8. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (2 of 5) Page 8<br>
slide9. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (3 of 5) Page 9<br>
slide10. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (4 of 5) Page 10<br>
slide11. 4.2 PROGRAMME 1: FINANCE AND ADMINISTRATION (5 of 5) Page 11<br>
slide12. 4.3 PROGRAMME 2: LICENSING AND COMPLIANCE Page 12<br>
slide13. 4.4 PROGRAMME 3: INSPECTION AND ENFORCEMENT Page 13<br>
slide14. 4.5 PROGRAMME 4 RESEARCH, PROFESSIONALIZATION, AND TRAINING (1 of 2) Page 14<br>
slide15. 4.5 PROGRAMME 4 RESEARCH, PROFESSIONALIZATION, AND TRAINING (2 of 2) Page 15<br>
slide16. 4.6 PROGRAMME 5: TRANSFORMATION Page 16<br>
slide17. 5. FINANCIAL PERFORMANCE 2022/23 5.1 PPRA STATEMENT OF FINANCIAL POSITION Page 17<br>
slide18. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.2 ANALYSIS OF GROUP’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The current assets of the Group are summarised in the table below:
The Group’s current assets increased by R233m from R562m to R795m due mainly to an increase in :
Other financial assets of the PPFF increased from R499m to R575m. These financial assets were in long-term investments in 2021/22 and matured and were invested in short-term instruments in 2022/23.
Receivables from non-exchange transactions increased from R11m to R77m due to penalties and fines raised in both the PPRA and PPFF
Cash and cash equivalents increased from R17m to R103m mainly due to an increase in cash reserves brought about by an increase in the collection of fees for issuance of 3-year FFCs from PPRA and an increase in funds received for agent interest for PPFF. Page 18<br>
slide19. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.2 ANALYSIS OF GROUP’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The non-current assets of the Group are summarised in the table below:
The Groups non-current assets decreased from R265m to R140m mainly due :
Reduction in the value of assets brought about mainly by depreciation and amortisation respectively.
Decrease is due to investments in PPFF which matured and the Board’s decision to invest the funds in short-term investment portfolios. Page 19<br>
slide20. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.2 ANALYSIS OF GROUP’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The liabilities of the Group are:
The Group’s total liabilities increased from R96m to R167m mainly due to increase in :
Deferred revenue (disclosed as current and non-current liability) increased from R73m to R141m as a result of PPRA issuing 3-year FFCs in line with new Property Practitioners Act.
Agent interest received in advance for the PPFF increased from R1,5m to R4,6m
Increase of R1.7m in post-retirement medical aid benefit obligations (current & non-current)
The Groups net assets increased by R37m from R731m to R768m due to surplus earned by PPFF of R52m in 2022/23 and a deficit of R15m in PPRA. Page 20<br>
slide21. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.3 ANALYSIS OF PPRA’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The current assets of the PPRA are as follows:
The PPRA’s current assets increased by R54m from R87m to R141m mainly due to increase in :
A decrease of R32m in inter-company loans and receivables as the PPFF settled the long outstanding management fee that was due to PPRA
Receivables from non-exchange increased from R19m to R33m due to penalties and fines raised in the PPRA
Cash and cash equivalents from R9m to R68m mainly due to an increase in cash reserves brought about by increase in collection of fees for issuance of 3-year FFCs by PPRA in line with the new PPA.
The PPRA’s non-current assets decreased from R142m to R140m mainly due :
Reduction in value of assets brought about mainly by depreciation Page 21<br>
slide22. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.3 ANALYSIS OF PPRA’S STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2023
The current and non-current liabilities of the PPRA are summarised in the table below:
The PPRA’s total liabilities increased from R94m to R162m mainly due to increase in :
Deferred revenue (disclosed as current and non-current liability ) increased by R68m from R73m to R141m as a result of PPRA issuing 3-year FFCs in line with new Property Practitioners Act
An increase of R1.7m in post-retirement medical aid benefit obligations (current and non-current)
The PPRA’s net assets decreased from R134m to R119m due to increase in deficit incurred from R9m to R15m. Page 22<br>
slide23. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.4 PPRA STATEMENT OF FINANCIAL PERFORMANCE
The analysis of statement of financial performance is based on the fact that the PPRA came into effect in Feb 2022 and thus the analysis is done by comparing annual results for 2022/23 against two months result for 2021/22. Page 23<br>
slide24. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.6 PPRA STATEMENT OF COMPARISON OF BUDGET VS ACTUAL AMOUNTS PERFORMANCE 2022/23 Page 24<br>
slide25. 5. FINANCIAL PERFORMANCE 2022/23 (CONT) 5.8 CASHFLOW STATEMENT Page 25<br>
slide26. 6. AUDIT OUTCOMES The audit outcomes for PPRA, PPFF, and PSTF are as follows
PPRA – Qualified audit opinion
PPFF – Unqualified audit opinion
PSTF – Unqualified audit opinion
The summarised key audit outcomes for PPRA have been presented on pages 27 – 29. Page 26<br>
slide27. 6. AUDIT OUTCOMES : KEY AUDIT FINDINGS AND ACTION PLANS – PPRA Page 27<br>
slide28. 6. AUDIT OUTCOMES : KEY AUDIT FINDINGS AND ACTION PLANS – PPRA Page 28<br>
slide29. 6. AUDIT OUTCOMES : KEY AUDIT FINDINGS AND ACTION PLANS – PPRA Page 29<br>
slide30. 7. RECOMMENDATION Recommendation
For the Portfolio Committee of Human Settlements to “Note the presentation on the Annual Report of the PPRA and its Group for the 2022/23 financial year”.
Thank you Page 30<br>