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2014

EXCELLENCEDEDICATION INTEGRITYACCOUNTABILITY

EASTERN CAPEANNUAL REPORT

2013/14

Contact InformationPrivate Bag X0029, Bhisho, 5605

Tel 040 101 0157 | Fax 040 609 5961

[email protected]

www.ectreasury.gov.za

gemprint 043 722 0755 (52469)

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2013/14

Eastern Cape Provincial Treasury Annual Report for the year ending 31 March 2014 1

ANNUAL REPORTFOR THE FINANCIAL YEAR 2013/2014

VOTE 12

PR133/2014

ISBN: 978-0-621-42734-9

Title of Publications: Eastern Cape Provincial Planning and Treasury Annual Report ending 31 March 2014.

Eastern Cape Provincial Treasury Annual Report for the year ending 31 March 20142

TABLE OF CONTENTS

PART A: GENERAL INFORMATION ........................................................................................................ 41.1. Department’s General Information ...................................................................................................................4

1.2. List of Abbreviations .........................................................................................................................................5

1.3. Foreword by the MEC .......................................................................................................................................6

1.4. Report of the Accounting Officer ......................................................................................................................7

1.5. Statement of responsibility and confirmation of accuracy for the annual report .............................................11

1.6. Strategic Overview .........................................................................................................................................12

1.7. Legislative and other Mandate .......................................................................................................................12

1.8. ORGANISATIONAL STRUCTURE .................................................................................................................14

1.9. Entities reporting to the MEC for Planning and Finance ................................................................................15

2. PART B: PERFORMANCE INFORMATION .................................................................................. 162.1. Auditor General’s Report: Predetermined Objectives .....................................................................................16

2.2. Overview of Departmental Performance ........................................................................................................18

2.2.1. Service delivery environment ............................................................................................................18

2.2.2. Service Delivery Improvement Plan ..................................................................................................18

2.2.3. Organisational environment ..............................................................................................................20

2.2.4. Key policy developments and legislative changes ............................................................................21

2.3. Strategic Outcome Oriented Goals ................................................................................................................21

2.4. Performance Information by Programme........................................................................................................22

2.4.1. Programme 1: Administration ............................................................................................................23

2.4.2. Programme 2: Sustainable Resource Management .........................................................................32

2.4.3. Programme 3: Asset and Liability Management ................................................................................37

2.4.4. Programme 4: Financial Governance ................................................................................................47

2.5. Transfer payments ..........................................................................................................................................52

2.5.1. Transfer payments to Public Entities .................................................................................................52

2.5.2. Transfer payments to all organisations other than public entities ......................................................52

2.6. CONDITIONAL GRANTS ...............................................................................................................................52

2.7. DONOR FUNDS .............................................................................................................................................52

2.8. CAPITAL INVESTMENT .................................................................................................................................52

3. PART C: GOVERNANCE ............................................................................................................... 533.1. INTRODUCTION ............................................................................................................................................53

3.2. RISK MANAGEMENT ....................................................................................................................................53

3.3. FRAUD AND CORRUPTION..........................................................................................................................53

3.4. MINIMISING CONFLICT OF INTEREST .......................................................................................................53

3.5. CODE OF CONDUCT ....................................................................................................................................54

3.6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES ....................................................................................54

3.7. PORTFOLIO COMMITTEES ..........................................................................................................................54

3.8. SCOPA RESOLUTIONS ................................................................................................................................56

3.9. PRIOR MODIFICATIONS TO AUDIT REPORTS ...........................................................................................56

3.10. INTERNAL CONTROL UNIT ..........................................................................................................................56

3.11. INTERNAL AUDIT AND AUDIT COMMITTEES .............................................................................................57

3.12. AUDIT COMMITTEE REPORT ......................................................................................................................59

4. PART D: HUMAN RESOURCE MANAGEMENT .......................................................................... 614.1. Legislature that govern HR Management .......................................................................................................61

4.2. INTRODUCTION ............................................................................................................................................62


4.3. Human Resource Oversight Statistics ............................................................................................................67

4.3.1. Expenditure .......................................................................................................................................67

4.3.2. Employment and vacancies ..............................................................................................................68

4.3.3. Filling of SMS Posts ..........................................................................................................................70

4.3.4. Job evaluation ...................................................................................................................................71

4.3.5. Employment changes ........................................................................................................................73

4.3.6. Employment equity ............................................................................................................................76

4.3.7. Signing of Performance Agreements by SMS Members ...................................................................80

4.3.8. Performance rewards ........................................................................................................................81

4.3.9. Foreign workers ................................................................................................................................83

4.3.10 Leave utilisation for the period 1 January 2013 to 31 December 2013 .............................................83

4.3.11. HIV and AIDS & health promotion programmes ...............................................................................85

4.3.12. Labour relations ................................................................................................................................86

4.3.13. Skills development ............................................................................................................................88

4.3.14. Injury on duty ....................................................................................................................................90

4.3.15. Utilisation of consultants refer to the comment by the Audit Committee ...........................................90

5. OTHER INFORMATION ................................................................................................................. 915.1. List of Contact Details ....................................................................................................................................91

6. PART E: FINANCIAL INFORMATION ........................................................................................... 926.1. Report of the Auditor-General ........................................................................................................................92

6.2. Annual Financial Statements ..........................................................................................................................95

6.3. NOTES TO THE APPROPRIATION STATEMENT .......................................................................................101

6.4. STATEMENT OF FINANCIAL PERFORMANCE ..........................................................................................104

6.5. STATEMENT OF FINANCIAL POSITION ....................................................................................................105

6.6. STATEMENT OF CHANGES IN NET ASSETS ............................................................................................105

6.7. CASH FLOW STATEMENT ..........................................................................................................................106

6.8. ACCOUNTING POLICIES ............................................................................................................................107

6.9. NOTES TO THE ANNUAL FINANCIAL STATEMENTS ................................................................................111

6.10. UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS ................................................127


PART A: GENERAL INFORMATION1.1. Department’s General InformationEASTERN CAPE PROVINCIAL PLANNNING AND TREASURY

DEPARTMENTAL DETAILS PHYSICAL ADDRESS:

Tyamzashe BuildingPhalo AvenueBhisho5605

POSTAL ADDRESS:

Eastern Cape Provincial Planning and TreasuryPrivate Bag X0029Bhisho5605

Ms Nomawethu Skoti-MawongaTel: (040) 101 0157Fax: (040) 635 0024Email: [email protected]


1.2. List of Abbreviations

AFS Annual Financial Statements ICT Information and Communications Technology

AG Auditor General IDMS Infrastructure Delivery Management System

AD Assistant Director IFMS Integrated Financial Management Systems

AIDS acquired immunodeficiency syndrome IT Information Technology

AO Accounting Officer IYM In-Year-Monitoring

APEA Audit Process of External Audit LOGIS Logistical Information System

APP Annual Performance Plan MEC Member of the Executive Council

BAS Basic Accounting System MFMA Municipal Finance Management Act

CAE Chief Audit Executive MTBPS Medium Term Budget Policy Statement

CD Chief Director MTSF Medium Term Strategic Framework

CDC Coega Development Cooperation MuniMEC Municipality Member of the Executive Council

CESD Centralised Electronic Supplier Database NCOP National Council of Provinces

CFO Chief Financial Officer NQF National Qualifications Framework

CoE Compensation of Employees NSG National School of Government

DDG Deputy Director General NTR National Treasury Regulations

DLGTADepartment of Local Government and Traditional Affairs

OTP Office of The Premier

DoH Department of Health PACs Picture Archiving Systems

DoRB Division of Revenue Bill PALAMAPublic Administration Leadership and Management Academy

DPSA Department of Public Service and Administration PERSAL Personnel and Salary System

DRPW Department of Roads and Public Works PFMA Public Finance Management Act

DSRAC Department of Sport Recreation, Arts and Culture PGDP Provincial Growth and Development Plan

EC Eastern Cape PMDS Performance Management Development System

ECDC Eastern Cape Development Corporations PPP Public-Private Partnership

ECPA Eastern Cape Provincial Administration PRF Provincial Revenue Fund

ECPC Eastern Cape Planning Commission QAR Quality Assurance Reviews

ECSECCEastern Cape Socio Economic Consultative Council

QMS Quality Management System

EWP Employee Wellness Policy SA South Africa

EXCO Executive Council SABC South African Broadcasting Corporation

FASSETFinance and Accounting Services Sector Education and Training Authority

SAN Storage Area Network

FIS Financial Information System SAQA South African Qualifications Authority

FM Financial Management SASSA South African Social Security Agency

FMCMM Financial Management Capability Maturity Model SCM Supply Chain Management

GAAP Generally Accepted Accounting Practices SCMO Supply Chain Management Office

GEMS Government Employees Medical Scheme SCOA Standard Chart of Accounts

GFMS Government Fleet Management Services SDIP Service Delivery Improvement Plan

GIAMAGovernment-wide Immovable Asset Management Act

SLA Service Level Agreement

GRAP Generally Recognised Accounting Practices SM Senior Manager

GSDE Guide to Service Delivery Excellence SMS Senior Management Service

HDI Historically Disadvantaged Individuals SPU Special Programmes Unit

HIV Human Immunodeficiency Virus TB Tuberculosis

HoD Head of Department TDRF Transkei Development Reserve Fund

HR Human Resource TIAS Transversal Internal Audit Services

HRD Human Resource Development ToR Terms of Reference

HRM Human Resource Management VoIP Voice over IP


1.3. Foreword by the MEC

During the 2013/14 fi nancial year the Provincial Planning and Treasury (PPT), worked effortlessly to fulfi l its legislative mandate of ensuring the fi nancial health of the province through the implementation of stringent fi nancial management control measures. In addition, the department also implemented decisive policies with the aim of aligning provincial policies and strategic programmes with the National Development Plan and the draft Provincial Development Plan.

The above processes led to the consolidation of various departmental infrastructure projects into an integrated provincial infrastructure plan. The department committed itself to jointly oversee and coordinate technical capacity building, the integrated infrastructure project list and the proposed funding model. Certain public entities were also identifi ed as potential infrastructure implementing arms of the provincial government. The integrated provincial infrastructure plan is a mammoth task that the department will undertake to fi nalise in the new fi nancial year with the assistance of the Offi ce of the Premier, identifi ed public entities and affected municipalities.

The department implemented an accountability framework with the aim of improving fi nancial governance and enforcing accountability which has led to signifi cant improvement in the consolidated provincial audit outcomes. The implementation of this framework will be intensifi ed in the new fi nancial year with the aim of replicating a similar framework designed specifi cally to suite municipal challenges. In 2013/14 the department continued with the rollout of the municipal CFO support programme which led to the deployment of fi nancial experts in struggling municipalities as well as support interventions in both Makana (water crisis) and KSD (fi nancial bail-out) municipalities.

In an effort to contribute towards service delivery, the department embarked on an intervention project in rural Zithulele Hospital in Mqanduli to provide basic ICT infrastructure, medical and hospital equipment, and general maintenance. The department also continued with the roll-out of LOGIS in order to improve supply chain management as well as upgrading from manual to electronic payment methods.

I, Sakhumzi Somyo, MEC for Provincial Planning and Finance, in terms of the requirements of Section 65(1)(a) of the Public Finance Management Act and Chapter 1, Part III of the Public service Regulations, do hereby table the Annual Report for the 2013/14 fi nancial year.

HONOURABLE SAKHUMZI SOMYOMEC FOR PROVINCIAL PLANNING AND FINANCEDATE: 30 SEPTEMBER 2014


1.4. Report of the Accounting Offi cer

During the period under review, PPT prioritised not just the prudent management of fi nancial resources in the province but also sought to address historical backlogs in infrastructure as well as providing meaningful hands on support to municipalities. It was envisaged that it was the achievement of these priorities that would ensure accelerated service delivery in the province.

Taking into account the national economic outlook, it was seen as imperative that PPT develops an instruction note on cost containment measures that will ensure that departments shift or at least fi nd a balance between consumption expenditure and investment. This is in line with ensuring that funds are shifted from non-core items to key service delivery areas. The instruction note will be implemented by departments in the 2014/15 fi nancial year and the implementation of this will have a rippling effect over the 2014 MTEF.

In 2011/12, PPT developed a hands-on support programme to municipalities that had looked into bringing fi nancial management expertise in municipalities which should have in turn improved the audit outcomes of municipalities. It was during the implementation of this programme that it was then seen that perhaps a support programme that looked at both the individual and holistic needs of a municipality would be more effective in ensuring that the desired results were obtained. As such, Makana Local Municipality was identifi ed as the fi rst recipient of the revised municipal hands-on support.

A new infrastructure implementing arm was created in order to address Social Infrastructure Backlogs in the province. Also, this was done in order to capacitate the province when it comes to infrastructure delivery. In line with the above, the Eastern Cape Development Corporation (ECDC) was identifi ed as the new infrastructure implementing arm. Subsequent to that, during the adjustment estimates in 2013/14, R30 million was allocated to capacitate ECDC and a further R300 million was allocated fund to implement the identifi ed projects.

PPT also continued with the centralisation of authorisation of appointments in the departments of Health and Education which is a decision that was taken in 2012/13 in order to curb expenditure on Compensation of Employees (CoE). Due to the fact that DoH showed improvements in fi nancial controls, the authorisation function was returned to their department, however, they are still being monitored comprehensively so on a quarterly basis in order to ensure that they do not regress.

A Unifi ed Communication System was developed and implemented in PPT towards the end of the 2013/14 fi nancial year. This system will further assist PPT in its quest to reduce excessive expenditure on non-core items and will also ensure improved operations internally as it allows for teleconferencing etc. and improves the management and containment of the departments’ telephone bill.

In line with the policy speech pronouncements by the MEC for Finance for 2013/14 to ensure improved procurement effi ciencies in the province, PPT continued with the roll out of LOGIS with more focus in district offi ces. LOGIS, which is a fi nancial management system which allows for an electronic procurement of goods and services is essential in minimising duplications and the occurrence of other errors when procuring goods and services.

Though not fi nalized yet, a plan/ framework that will look at enhancing revenue collection in the province was developed. Revenue enhancement is essential given the economic outlook and the need to have government function optimally and effi ciently. The plan entails strategies on capacitating departments in revenue collection, the review of tariff registers and improved revenue management and reporting.

Out of an adjusted budget of R352, 498 million, the department under spent by R13.379 million which is 3.8 per cent of the adjusted budget. CoE and goods and services which are the key cost drivers contributed signifi cantly to the under expenditure. The major reason for the under spending in CoE relates to the non-fi lling of vacant posts as well as attrition. The department is currently reviewing its organogram and only critical posts were fi lled. Under goods and


services, the under spending was mainly due to the non-completion of the Vision 2030 Plan which is being led by the Eastern Cape Planning Commission. The department adopted Zithulele Hospital in Mqanduli as part of its rural service delivery initiative. The hospital was chosen because it is in a deep rural area and it is the only district hospital in the area servicing several local clinics. The intervention focused on the provision of basic ICT infrastructure which improved the hospital functionality at an operational level. Treasury staff was deployed to the hospital to install ICT infrastructure, deliver hospital and medical equipment and also arrange a transversal general maintenance contract through the department of Health to take care of general maintenance in the hospital.

The government of South Africa realised that former State President Mandela was an international icon who had chosen to be buried in his home province and therefore all the necessary arrangements were made in line with his wishes. A KSD Presidential Project was set up with the aim of improving infrastructure around Mthatha area as well as upgrading of the local airport. A ten-day Plan was set up and approved by the Inter-ministerial Committee at national level where the focus was on urgent and necessary priorities. Eastern Cape was the host province for the funeral.

Due to the nature of the event, there was no funding allocated for the ten-day period to address facilities and logistical emergencies. On the 6th December 2013, the provincial Executive Council approved the variation of funds in order to support the state funeral arrangements since the province did not have an auxiliary services budget to cater for such a special occasion. Funding was therefore arranged in terms of Section 25 of the PFMA (Emergency Funding) and there was already funding that had been appropriated to ECDC and earmarked for social infrastructure delivery. In line with Treasury Regulations 6.3.1(c), ECDC was instructed to utilize a portion of these funds appropriated for social infrastructure and divert them for payments towards all the logistical and emergency infrastructure arrangements.

The expenditure would be reimbursed after the funeral and once reconciliation was completed. Controls were also identified and set up in order to ensure that all three spheres of government worked in a coordinated manner. The Auditor-General was made aware of the approved deviation and the processes that were set up. Treasury is reasonably satisfied that the expenses incurred were for the intended purposes as far as the systems could detect. A final report on the state funeral expenditure has been submitted to all relevant institutions (i.e. OTP, Portfolio Committee on Finance, the Audit Committee, etc).

Departmental Receipts

Departmental receipts

2013/ 2014 2012/ 2013

EstimateActual

Amount Collected

(Over)/Under Collection

EstimateActual

Amount Collected

(Over)/Under Collection

R’000 R’000 R’000 R’000 R’000 R’000

Sale of goods and services other than capital assets

164 185 (21) 156 183 (27)

Interest, dividends and rent on land

75,600 277,135 (201,535) 72,000 210,266 (138,266)

Financial transactions in assets and liabilities

548 499 49 520 72 448

Total 76,312 277,819 (201,507) 72,676 210,521 137,845

Provincial Planning & Treasury is not much of a revenue collecting department. The revenue sources are tender bulletins, commission on insurance and garnishee and interest on investments.

The department charges commissions to the parties where it collects moneys on their behalf from the employees of the department. Tender Bulletins are sold at R31.20 per document. Interest is earned on investments made on Provincial Revenue Fund. Recoveries of previous years’ expenditure vary from year to year according to what has been recovered and there is no tariff. Sale of goods and services other than capital assets :( Commission on Insurance and Garnishees & Tender Bulletins)


The amount collected was more than projected. The actual on both years is more or less the same.

Interest, dividends and rent on land

The department has received more interest than it was projected. The contributing factor to this is the interest that is earned through Provincial Revenue Fund Account that is under the control of Eastern Cape Provincial Treasury.

Financial transactions in assets and liabilities

The department collected less revenue than projected on financial transactions in assets and liabilities. It is very challenging to project revenue for the financial transactions in assets and liabilities because these transactions are as a result of recoverable from previous financial year.

Bad debts written off

The amount of bad debts written off for 2013/14 financial year is R 50,000 and is in relation to old loans from ex-employees. In 2012/13 financial year there were no bad debts written off.

Tariffs

The department does not have tariff policy

Programme Expenditure

Programme Name

2013/2014 2012/2013

Final Appropriation

ActualExpenditure

(Over)/ Under Expenditure

Final Appropriation

ActualExpenditure

(Over)/Under Expenditure

R’000 R’000 R’000 R’000 R’000 R’000

Administration 161 385 155 292 6 093 165 503 153 091 12 412

Sustainable Resource Management

74 311 72 879 1 432 61 436 57 039 4 397

Asset and Liability Management

60 104 58 329 1 775 61 938 59 260 2 678

Financial Governance 56 698 52 619 4 079 53 392 52 716 676

Total 352 498 339 119 13 379 342 269 322 106 20 163

The department under spent its budget by R13, 379 million from an adjusted budget of R352, 498 million. The department has slightly improved its spending patterns compared to 2012/13 financial year where under spending amounted to R20, 163 million.

The overall reasons for under spending in compensation of employees are the non-filling of vacant posts as well as staff exiting the department. It must be noted that the department is currently in the process of reviewing its organogram and only critical posts were filled.

The non-filling of vacant posts had a concomitant effect on goods and services and capital expenditure. National Treasury introduced a cost containment circular, National Treasury Instruction 1 of 2013/14, in December 2013. The implementation of the circular had an impact in the 2013/14 financial year goods and services expenditure. Under spending in goods and services is mainly due to challenges experienced with the implementation of the second phase of the Vision 2030 project.

Under spending in payments for capital assets is as a result of finance lease (cellular phone) expenditure which was affected by non-filling of vacant posts. The department has written off irrecoverable bad debts to the value of R50, 000 from identified savings.

Virements

Identified savings in goods and services from Programme 4 were utilised to fund cost pressures for the Unified


Communication System (UCS) project under capital payments in Programme 3.

Roll overs

The department did not apply for roll-overs in the 2013/14 fi nancial year.

Unauthorised, fruitless and wasteful expenditure

No fruitless expenditure was incurred for the fi nancial year.

Public Private Partnership (PPP)

The department does not have any public private partnerships under its control, but has oversight responsibility over departments with PPP operations.

Discontinued activities / activities to be discontinued

No activities to be discontinued for the fi nancial year.

New or proposed activities

No new/ proposed activities for the fi nancial year.

Supply chain management

There were no unsolicited bid proposals concluded for the year under review. Documented SCM policies and procedures are in place to prevent irregular expenditure. Furthermore, delegations are also issued to offi cials to curtail irregular expenditure.

Late submission of requisitions to the SCM Unit by various end users persisted as a result offi cials in the Unit worked extra hours. The department is allocated with only fourteen vehicles by the Department of Transport for its service delivery needs. This caused the Unit not to able to issue a vehicle to end users at all times. Trips are synchronised to make certain that offi cials travelling to the same destination are using one vehicle.

Gifts and Donations received in kind from non-related parties

There were no gifts and donations received.

Inventories

With the changes in the implementation of Standard Chart of Accounts (SCOA) to be in line with the accounting reforms, in the fi nancial year under review, Inventory has been reclassifi ed as Consumables under Goods and Services. Inventory: Printing Departmental has been reclassifi ed as Other Operating Expenditure and prior year fi gures have been restated.

Conclusion

In the new fi nancial year, the Provincial Treasury will be working even harder to ensure that it creates a sustainable high performance organisation and also retain highly skilled staff as part of its restructuring process.

Acknowledgement and Appreciation

I wish to thank the MEC, and all my staff members for their hard work and dedication during the 2013/14 fi nancial year. I would like to also encourage all staff to continue doing the same in 2014/15 in an endeavour to serve our province with pride.

NTM MBINA-MTHEMBUACCOUNTING OFFICERDATE: 29 AUGUST 2014


1.5. Statement of responsibility and confi rmation of accuracy for the annual report To the best of my knowledge and belief, I confi rm 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 modifi ed cash standard and the relevant frameworks and guidelines issued by the National Treasury.

The Accounting Offi cer is responsible for the preparation of the annual fi nancial statements and for the judgements made in this information.

The Accounting Offi cer 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 fi nancial statements.

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

In my opinion, the annual report fairly refl ects the operations, the performance information, the human resources information and the fi nancial affairs of the department for the fi nancial year ended 31 March 2014.

Yours faithfully

ACCOUNTING OFFICER: NAME: NTM MBINA-MTHEMBUDATE: 29 AUGUST 2014


1.6. Strategic OverviewVision

A prosperous province supported by sound financial and resource management.

Mission

Our mission is to provide strategic and technical leadership in the allocation, management and utilisation of financial resources in order to improve the quality of life in the province.

Values

We strive for EXCELLENCE through:

• Dedication-Weare100%committedtoourwork;

• Integrity-Westeadfastlyadheretohighprofessionalstandards;and

• Accountability-Wetakefullresponsibilityforouractionsandourwork.

Strategic outcome oriented goals

• Efficientandeffectivemanagementoffinancialresourcesintheprovince

• Soundfinancialaccountingintheprovince

• Allocativeefficacy

• Soundstakeholderrelations

• Well-functioningdepartment

1.7. Legislative and other MandateThe department derives its existence from Sections 213, 215, 216, 217, 218 and 219 of the Constitution of the Republic of South Africa (Act 108 of 1996), Sections 17 and 18 of the Public Finance Management Act (PFMA), 1999 as amended, which provide for the establishment of Provincial Treasuries that are mandated to fulfil the following functions:

• Preparetheprovincialbudget;

• Exercisecontrolovertheimplementationoftheprovincialbudget;

• Promoteandenforcetransparencyandeffectivemanagementinrespectofrevenue,expenditure,assetsandliabilitiesofprovincialdepartmentsandprovincialpublicentities;

• Ensurethatitsfiscalpoliciesdonotmateriallyandunreasonablyprejudicenationaleconomicpolicies.

• IssueProvincialPlanningandTreasuryinstructionsnotinconsistentwiththePFMA;

• EnforcethePFMAandanyprescribednationalandprovincialnormsandstandards,includinganyprescribedstandards of generally recognised accounting practice and uniform classification systems, in provincial departments;

• Comply with theannual DivisionofRevenue Act andmonitor andassess the implementation of thatAct inprovincialpublicentities;

• Monitor and assess the implementation in provincial public entities of national and provincial norms andstandards;

• Mayassistprovincialdepartmentsandprovincialpublicentitiesinbuildingtheircapacityforefficient,effectiveandtransparentfinancialmanagement;

• Mayinvestigateanysystemoffinancialmanagementandinternalcontrolappliedbyaprovincialdepartmentoraprovincialpublicentity;

• Intervene by taking appropriate steps, which may include the withholding of funds, to address a serious orpersistentmaterialbreachofthisActbyaprovincialdepartmentoraprovincialpublicentity;

• PromptlyprovideanyinformationrequiredbytheNationalTreasuryintermsofthisAct;and


• Maydoanythingfurtherthatisnecessarytofulfilitsresponsibilitieseffectively.

Additional functions and activities of the department are derived from the following (the list is not exhaustive):

• TreasuryRegulations;

• MunicipalFinanceManagementAct;

• PreferentialProcurementPolicyFrameworkAct;

• AppropriationAct;

• DivisionofRevenueAct;

• IntergovernmentalFiscalRelationsAct;

• PublicServiceActandRegulations;

• MediumTermBudgetPolicyStatement;

• IntergovernmentalFiscal;

• ReportoftheAuditor-GeneralontheAccountsoftheGovernment;

• BudgetReview;

• RecommendationsoftheFFC;and

• SupplyChainManagementFramework.

During the 2013/14 financial year, the MEC for Planning and Finance tabled the following Bills in the Eastern Cape Provincial Legislature:

• EasternCapeAppropriationBillon07March2013;

• AdjustmentAppropriationBillon21November2013.


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1.9. Entities reporting to the MEC for Planning and Finance There are no public entities reporting to the MEC for Planning and Finance.

Function Reporting to the MEC for Planning and Finance.

Name of Entity Legislative Mandate Financial Relationship Nature of Operations

Eastern Cape Planning Commission (ECPC)

The Eastern Cape Planning Commission (ECPC) was established by the declaration of the Premier of the Eastern Cape in terms of Section 127(2)(e) of the Constitution of South Africa (Act 108 of 1996), and was launched on the 26 April 2012

Budget is allocated within the departmental budget. See the breakdown in table below

The ECPC comprises of 8 imminent persons as Commissioners with the sole mandate of the developing an integrated long term development plan for the Eastern Cape Province known as Vision 2030.

The MEC for Planning and Finance was appointed to lead the commissioners as Chairperson and the commission was subsequently housed in his department resulting in the mandate of the provincial treasury being amended to include the planning function and the changing of its name to Provincial Planning and Treasury.

Linking performance with budgets:

2013/2014 2012/13

Planning Commission

Final Appro-priation

Actual Expenditure


Final Appro-priation

Actual Expenditure


(R’000) (R’000) (R’000) (R’000) (R’000) (R’000)

Compensation of Employees

5 635 5 418 216 3 070 2 724 346

Goods and Services 7 399 5 857 1 542 8 831 6 912 1 919

Transfers and Subsidies

18 18 0 0 0 0

Sub-Programme Total

13 052 11 294 1 758 11 901 9 636 2 265


2. PART B: PERFORMANCE INFORMATION 2.1. Auditor General’s Report: Predetermined Objectives

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. In accordance with the PAA and the general notice issued in terms thereof, I report the following findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report, non-compliance with legislation as well as 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

2. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information for the following selected programmes presented in the annual performance report of the department for the year ended 31 March 2014:

• Programme2:Sustainableresourcesmanagementonpages32to36

• Programme3:Assetandliabilitymanagementonpages37to46

• Programme4:Financialgovernanceonpages47to51

3. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

4. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and 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, as required by the National Treasury’s Framework for managing programme performance information.

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

6. I did not raise any material findings on the usefulness and reliability of the reported performance information for the selected programmes.

Additional matter

7. Although I raised no material findings on the usefulness and reliability of the reported performance information for the selected programmes, I draw attention to the following matter:

Achievement of planned targets

8. Refer to the annual performance report on pages 23 to 31, 32 to 36, 37 to 46 and 47 to 51 for information on the achievement of the planned targets for the year.

Compliance with legislation

9. I performed procedures to obtain evidence that the department had complied with applicable legislation regarding financial matters, financial management and other related matters. I did not identify any instances of material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA.

Internal control

10. I considered internal control relevant to my audit of the financial statements, annual performance report and compliance with legislation. I did not identify any significant deficiencies in internal control.


OTHER REPORTSPerformance audits

11. The performance audit report on the readiness of government to report on its performance will be tabled during 2014. The department was one of the 61 institutions and departments audited. The performance audit focused on the following:

• Thesystemsandprocessesthatgovernmentdepartmentshaveputinplacetoreportontheirperformance.

• Theperformancereportingguidanceandoversightofgovernmentdepartments.

East London

30 July 2014


2.2. Overview of Departmental Performance2.2.1. Service delivery environment

A lot of effort has been put by the public sector in developing the province and ensuring service delivery and access to basic services in the rural communities of the province though the speed to which this is done is still not to the satisfaction of the public which is shown by the many service delivery protests around the province.

Though Treasury is not a service delivery department, its role of ensuring a sound and sustainable management of public financial resources in the province is key in accelerating service delivery and ensuring economic equity. Skills shortage and lack of capacity in financial management (provincially) remains a critical problem in enforcing and ensuring the achievement of this.

In the 2013/14 financial year, the province focussed on increasing its expenditure on infrastructure in order to address social infrastructure backlogs. However, the provinces’ low capacity and inadequate expertise in the engineering and built environment continues to play a significant role in slowing down service delivery in this regard therefore leading to persistent under-expenditure on infrastructure.

Improvements have been noted in the audit outcomes of bigger departments like Health and Education, and this is largely attributed to technical support that has been given to these departments in the past and the enforcement of the PFMA. Efforts are being made in trying to improve the performance of municipalities by providing financial technical support in key municipalities around the province. It is hoped that these efforts will improve audit outcomes in these municipalities as the proper management and functioning of this sphere of government is crucial when it comes to local service delivery.

Public Entities have a pivotal role to play in ensuring economic growth and development which indirectly impact on job creation and improved standard of living in the province. Treasury has for this reason been strengthening its oversight role on public entities and enforcing the PFMA in order to ensure their improved and more efficient operation.

2.2.2. Service Delivery Improvement Plan

In accordance with the Public Service Regulations, Chapter 1, Part III C, all departments are required to develop a Service Delivery Improvement Plan (SDIP) and to publish an annual statement of public service commitment which will set out the department’s service standards that citizens and customers can expect and which will serve to explain how the department will meet each of the standards. The following tables reflect the components of the SDIP well as progress made in the implementation of the plans.

Table 2.1 – Main services provided and standards

Main services Beneficiaries Current/ Actual Standard of service

Desired Standard of service

Actual achievement against standards

Manage the provincial budget process and monitor budget implementation in terms of efficiency and fiscal discipline

Provincial Departments

Provincial Planning and Treasury shall provide expert advice and encourage prudent financial management to departments to limit the extent of under/over expenditure.

Expenditure analysis of all 14 departments, 45 municipalities and 11 public entities

All departments have been allocated a sector specialist official to deal with their respective departments’ complaints closest to the source.

Assistance provided, budget submissions evaluated, and feedback given to all departments.


Main services Beneficiaries Current/ Actual Standard of service

Desired Standard of service

Actual achievement against standards

Oversee and support the implementation and application of sound SCM procedures in the Province

All Provincial Departments

Provincial Planning and Treasury shall analyse the Supply Chain Management reports of all departments monthly to ensure compliance with SCM regulations and instructions, and feedback given to departments within 10 working days.

14 Provincial Departments

Monthly expenditure of all departments monitored through In Year Monitoring meetings and advice given accordingly.

Monthly infrastructure reports analysed and feedback provided to all departments.

To provide technical support and training towards improved financial management

All Provincial Departments and

Municipalities

60 Training sessions to be provided for all 14 departments and public entities.

60 Training sessions to be provided for all 14 departments and public entities.

77 Training sessions were provided for all 14 departments.

Assist municipalities on budget processes

Municipalities Provincial Planning and Treasury shall deploy financial management officers at all municipalities throughout the province to assist with budget processes

Expenditure analysis of all 14 departments, 45 municipalities and 11 public entities

Financial Management officers were deployed for all municipalities and assistance provided.

Table 2.2 – Batho Pele Arrangement with Beneficiaries (Consultation, etc.)

Current arrangement Actual Customers Desired Customers Actual achievements

CFO Forum CFO’s from all departments Relevant Senior Managers Regular CFO forums have been coordinated

Budget Hearings & Reviews Accounting Officers CFO’s and relevant Senior Managers

Budget in compliance with National Guidelines

Municipal Budget Reviews Municipal Managers CFO’s and relevant Senior Managers

Budgets analysed and feedback provided for improved budget management

Audit Steering Committee Accounting Officers, CFOs, and Auditor-General

Accounting Officers, CFOs, and Auditor-General

The Audit Steering Committee successfully held meetings during the year under review

Audit Committee Chair Forum Provincial Departments’ Audit Committee Chairpersons

Provincial Departments’ Audit Committee Members and Internal Audit Managers

Information sharing

Management Committee Departmental Managers All Employees Periodic meetings held with various levels of employees

Correspondence:

E-mails, Memoranda, Circulars

All staff members - Improved communication of decisions and clear objective setting


Table 2.3 – Batho Pele Arrangement Service delivery access strategy

Current Arrangement Desired Arrangement Actual achievements

Taking budget to the people (District Municipalities, local communities and other stakeholders)

Taking budget to the people (District Municipalities, local communities and other stakeholders)

In the planning phase of the budget cycle inputs were collected from the public through adverts and the public responded by sending emails, and faxes to the communication service office. On the budget tabling day, the public viewed live the budget speech on satellite screens set up in all districts. In the live screening sessions, district officials presented to the public the budget processes.

Table 2.4 – Service Delivery Information Tool

Current/ Actual information tool Desired information tool Actual achievements

Newspapers ( add 3 more) Communicated widely to stakeholders

Radio Add the social media participation. Communicated widely to stakeholders

Newsletters/Pamphlets Distributed as an insert to 5 newspapers. Distributed widely to stakeholders

Plasma Screens N/A Live broadcasting of the budget speech

iPhones N/A Live broadcasting of the budget speech

Website N/ASignificant number of visits to the website. Website policy developed and implemented

Annual Report N/A Distributed widely to stakeholders

Annual Performance PlanUpdate it every day and market the site in every document.

Distributed widely to stakeholders

Service Delivery Improvement Plan N/A Distributed widely to stakeholders

Strategic Plan N/A Distributed widely to stakeholders

Table 2.5 – Complaints mechanism

Current/ Actual Complaints Mechanism

Desired Complaints Mechanism Actual achievements

There is a formal complaints and grievance handling framework in place. In line with the framework, a complaints register is in place.

Approved complaints and grievance handling framework.

The complaints register was updated on a monthly basis.

Those complaints that were received from other clients, e.g. (service providers or the general public) were channelled through the customer care centre and resolved by relevant officials.

The complaints received are channelled through the customer centre using the unified communication system platform

The integration of a customer care line in the unified communication system platform

2.2.3. Organisational environment

National Treasury is in the process of rolling-out the Integrated Financial Management System (IFMS). Provincial Planning and Treasury has been chosen as one of the two departments in the province that will be in the start-up line of this implementation/ roll-out which will take place in the 2014/15 financial year. The implementation and roll-out of the IFMS will ensure efficiencies and a sound management of financial resources in the department. The department is currently in the process of setting-up a project management team comprising of people with expertise in the fields required for the smooth and well supported roll-out and implementation of the system.

After a careful analysis of the environment and planning within the department, it was noted that there are gaps and there is a need to transform organisational culture in middle-management in order to address and improve staff morale and ensure efficiencies in the day-to-day operations and co-ordinated and integrated planning between units.


In order to address these, it was decided that group mentorship and leadership coaching sessions be provided in the 2014/15 financial year for middle managers. This will in turn equip middle managers with the capabilities and skills needed to move to senior-management whilst ensuring improvements and efficiencies in operations and outputs.

2.2.4. Key policy developments and legislative changes

There has not been any revision to the legislative mandate of the department. The Municipal Finance Management Actextendsthescopeofourresponsibilitiestoincludethethirdsphereofgovernment;i.e.localgovernment.

The inclusion of the Provincial Planning function in Treasury extends its mandate in so far as provincial planning coordination and oversight is concerned. However the OTP resolved to move the planning coordination to the OTP during the mid-term adjustment period. This development is expected to bring about greater coherence in planning as well as improve monitoring and evaluation of large and complex provincial projects and programmes. This move will not have any negative consequences to Provincial Treasury.

2.3. Strategic Outcome Oriented Goals

Strategic Goal 1 Efficient and effective management of financial resources in the Province

Goal Statement To facilitate that the Province manages its financial resources effectively and efficiently in a manner that supports good governance of public funds

Justification Efficient management of financial resources has a direct impact on service delivery on the ground. Given, the limited resources at the disposal of government against the unending needs of the people it is imperative that public finances are managed efficiently and that maximum value for money is derived.

In a province like the Eastern Cape, with major service delivery backlogs, it becomes particularly critical for those managing public funds to exercise prudent financial management to contribute to the betterment of the people of the Province.

Links Provincial Growth and Development Plan (PGDP)

Government’s Programme of Action

National Development Plan (2011)

Strategic Goal 2 Sound Financial Accounting in the Province

Goal Statement To facilitate a process where provincial departments and public entities fully and timely account for the utilisation of public finances.

Justification Apart from the fact that accountability promotes good governance, it also brings confidence to the populace that there is transparency in terms of how public funds are utilised. People can therefore hold government accountable where funds are not used according to set plans.

The role of Provincial Planning and Treasury is therefore to ensure that institutions of accountability, e.g. provincial legislature, auditor-general, etc. have adequate information to hold Departments and public entities accountable.

Links o Standard Chart of Accounts (SCOA)o King 3 Reporto A-G Act 12 of 1995o National Development Plan (2011)

Strategic Goal 3 Allocative Efficacy

Goal Statement To promote efficient allocation of financial resources in line with government priorities.

Justification Service Delivery challenges, particularly in the Eastern Cape, require that government allocates resources efficiently, where they are needed the most. It is therefore necessary for government to clearly identify the critical service delivery needs and allocate resources accordingly.

These allocations should be such that they maximise service delivery while also deriving value for money.

Links Provincial Growth and Development Plan (PGDP)

Government’s Programme of Action


Strategic Goal 4 Sound Stakeholder Relations

Goal Statement To clearly define and build positive relationships through which to deliver quality services.

Justification Provincial Planning and Treasury is tasked with ensuring that public spending is both efficient and effective. This is achieved through monitoring the management of financial and other resources, as well as by building the capacity of state institutions to spend and account for resource use. In both instances, relationships with entities external to the department are critical. The quality of these relationships greatly impacts on the value derived from the services delivered by Provincial Planning and Treasury.

Links o Strategic Government Priorities 2009o The IGR framework Act No. 13 of 2005

The three coordinating Departments of Office of the Premier, Provincial planning and Treasury and Local Government and Traditional Affairs to:

• Firm-up inter-sphere co-operation on planning and service delivery • Strengthening intergovernmental relations across all spheres of government

Strategic Goal 5 Well-functioning Department

Goal Statement To ensure that the department optimally uses its human capital and allocated funds in a manner that enables it to deliver on its mandate.

Justification An enabling environment becomes critical if the organisation is to achieve its objectives. The goal is to ensure that the workforce is highly motivated and capacitated to deliver on expected deliverables. Efficiency and accountability on the budget allocated to the department is also core to ensuring that the department is well-functioning.

A system of monitoring progress on the achievement of goals and objective should be in place to provide a dashboard on performance information which allows management to take rational and fact-based decisions.

Links • Human Resource Plan – Public Service regulation 2001 as amended 14th May 2010• Framework for Managing Performance Information• Public Finance Management Act

2.4. Performance Information by Programme

The powers and functions of the Provincial Planning and Treasury are mainly determined by the Public Finance Management Act, 1999 (PFMA) and the Municipal Finance Management Act, 2003 (MFMA). All powers of the Eastern Cape Provincial Planning and Treasury are vested in the MEC for Provincial Planning and Finance in terms of chapter 3 of the PFMA, 1999. In terms of section 20 of this Act, powers are delegated to the Head Official of the Provincial Planning and Treasury and some of her duly appointed senior managers. Similar provisions apply in the case of the MFMA, 2003.

In order for the department to fulfil its mandate and achieve the goals and strategic objectives as outlined in the strategic and annual performance plans, the following programmes were adopted in line with the uniform budget structures recommended by the National Treasury as follows. The purpose and objectives of these programmes are discussed in detail in section 2 of this Annual Report.

• Programme1: Administration

• Programme2: SustainableResourceManagement

• Programme3: AssetandLiabilityManagement

• Programme4: FinancialGovernance

All services rendered by Provincial Planning and Treasury are rendered to other departments mainly in terms of the PFMA or to municipalities as per the MFMA, as referred to above.


2.4.1. Programme 1: Administration

Purpose: The purpose of this program is to provide the leadership, strategic management in accordance with the relevant legislation, regulations, and policies and appropriate support service to all other programs. This programme is headed by the Chief Financial Officer.

The programme consists of five sub-programmes, namely:

Office of the MEC Setsprioritiesandpoliticaldirectivesinordertomeetthemandateofthedepartment;

Management ServicesTranslates policies and priorities into strategies for effective service delivery, provides strategicdirection,andmanagesandmonitorsorganizationalperformance;

Corporate ServicesProvides an internal enabling environment and support service to other programmes with regard to human resource management and development, information technology and records management, security and facilities management.

Financial Management(Office of the CFO)

Provides financial management, supply chain management, risk management and internal controlsservicestothedepartment;and

Internal Audit Renders an effective risk based internal audit service to the department.

Strategic Objectives:

• To provide policy direction and strategic management towards improved service delivery and fulfilment ofstakeholder needs

• Efficienthumanresourcemanagement,securityandinformationservices.

• Effectivefinancialmanagement inclusiveofeffective internal controlmeasuresand riskmitigationstrategieswithin the department.

2.4.1.1. Service Delivery Objectives and Indicators

Recent Outputs

The Member of Executive Council sub program is managed by senior manager that provides administrative support and reports directly to the MEC. The sub program together with parliamentary liaison office assisted the Member of the Executive Council with legislature responsibilities, such as the passage of Legislation. The office also coordinated interaction between the office of the Member of the Executive Council and relevant committees and sub-committees in the legislature and the cluster programmes, community engagements and other stakeholder engagements.

The Management Services sub programme is made up of the office of the Head of Department and Office of Strategic Management. The subprogram provided strategic direction and leadership to the department. The Communications, Legal Services and Internal Audit reported directly to this office during the period under review. Additionally the services provided to the Eastern Cape Planning Commission were coordinated in this subprogram.

The Communication Service office provided media liaison services for the department and supported the Member of Executive office in relation to media liaison as well. The office further managed the layout, design and printing of strategic documents. Events managed during the year include the Medium term Budget Policy Statement in November and the Annual Budget tabled in March 2013. The unit also responded to a range of media queries, volume of which increases substantially after the tabling of the main budget.

The Office of Strategic Management coordinated the development of the departmental Strategic Plan for 2015-19. The unit also coordinated quarterly performance reporting and submission of reports, the revision of the Annual Performance Plan for 2014-15 and supported program specific operational planning. The office provided performance related inputs in the preparation of the 2012-13 Annual Report and Annual Financial Statements. The office was responsible for coordination of the departmental calendar of activities, preparation and submission of Portfolio Committee of Finance queries and reports. The office further facilitated the development of the Service Delivery Model with the purpose to:


• Provideabasisand framework that clearlydetermines thenature, scope,extentand levelofwork thatconstitutestheServiceDeliveryModelfordepartmentofProvincialPlanningandTreasury;

• Provideabasis fordeterminingappropriatenormsandstandards forservicedelivery,which in turnwillprovide a basis for greater efficiency and effectiveness in service delivery

• UltimatelyimproveservicebehavioursalignedtothevaluesandapproachfromtheProvincialPlanningandTreasury.

The Office of Strategic Management was instrumental in ensuring that employees at head office and district level were informed about the departmental Annual Performance Plan, Service Delivery Charter and Improvement Plan, Service Delivery Model as well as quarterly performance information.

In terms of its corporate governance functions, the department has a number of functional committees covering a wide range of functions, including, fraud and risk, budget, performance management, bids, information management, and security. These committees have their standing meetings which are outlined in the departmental consolidated management meeting calendar.

The department also has programme specific meetings that are meant to address the concerns of operations at a programme level. There are also three levels of senior management meetings. These senior management meetings are:

1. The Executive Management structure consisting of the Head of Department and Deputy Director Generals /Programme Managers which seeks to address strategic programme integration and alignment of Provincial Planning and Treasury activities with stakeholder requirements. Some of the primary key discussions and decisions taken in this structure include:

• DeliveryontheStrategicPlanandAPPbyProgrammes(incl.progress,enablingfactorsandchallenges).

• Approvalofnewprojectsoramendmentstocurrentprojects.

• StakeholderRelations(internalandexternal)

2. The Extended Executive Management structure consisting of the executive management (HOD and Deputy Director Generals) and Chief Directors which seeks to encourage sub-programme integration and achievement performance measures as outlined in the Strategic and Annual Performance Plans. This structure is aimed at:

• Ensuring that executive decisions are clearly understood at sub-programme level and that risks arecomprehensively assessed.

• Discussinginter-functionalmattersanddeterminetheircrossimpact.

• SharingideasandservesasaknowledgemanagementplatformfortheChiefDirectors.

3. Senior Management structure which seeks to address issues of organisational integration and ensuring that employees are continually motivated and encouraged/capacitated to deliver on individual performance deliverables. This in essence unlocks the blockages that are in existence at an operational level. This level is the first layer of operations and critical in the implementation of the strategy.

During the year under review these structures were able to sit, as outlined in the departmental schedule of meetings to address various issues in line with their terms of reference.

The Special Programmes Unit’s mandate is to mainstream issues of gender and disability in the department, as well as supporting and reporting on Provincial and National strategies and programmes aimed at promoting and protecting the rights of vulnerable groups (Children, Youth, Older Persons, Women and People with Disabilities) to relevant offices. Its key function involves promotion of non-discrimination both in the workplace and society and enhance transformation, mainstreaming of issues of designated groups and Historically Disadvantaged Individuals (HDIs) into the programmes, policies and plans of the department, and supporting Provincial and National strategies and programmes aimed at promoting and protecting the rights of vulnerable groups (Women, Persons with Disabilities,


Youth, Children and Older Persons).

Internally, the PPT Youth Development Desk organized and held Youth Dialogue in the department during the Youth Month. The SPU also assisted the HoD in convening a meeting on the 8-Principle Action Plan for Women Empowerment and Gender Equality as required by Department of Public Service and Administration, and the report crafted, signed and submitted to same. The SPU, in collaboration with Human Resources Development organized Gender Mainstreaming Course held during January and December 2013. A Leadership Development Camp targeting matric leaners was held for learners of OR Tambo District Municipality.

Transversally, the SPU has, in fulfilment of its obligation to support provincial transversal programmes, been instrumental in preparing for, and actually holding the Youth Day Commemorations in Mthatha on 22 June 2013. Through its Youth Development, Children and Older Persons’ Desk, the PPT SPU was also amongst the leading departments in preparing for the holding of the Youth Parliament which took place on 21 June 2013 at the EC Legislature, Bhisho.

The PPT SPU was, through its Gender and Disability Desk also involved in preparations for, and the actual holding of the Provincial Women’s Day event that was held at Sterkspruit. The PPT Gender and Disability Desk which participates in the Provincial Logistics Committee also actively participated in the Launch of the 16 Days of No Violence against Women and Children on 25 November 2013 at Ingquza Municipality, and the Closure thereof, also known as the Day of Accountability, on 10 December 2013 in Port Elizabeth. The International Day of Persons with Disabilities was also duly supported.

The Eastern Cape Planning Commission (ECPC) has completed the first phase of the four-stage process it has mapped out for its work – the diagnosis.

• Thediagnostic report titled‘ADiagnosticOverviewof theEasternCape’andTheStrategicPerspectiveandPropositions Towards Vision 2030 For Eastern Cape documents were adopted by the Commissioners on 1st November 2013 and was presented to EXCO on 27th November 2013,

• ThefinalDiagnosticReporthasbeencompletedandapprovedby thecommissionersafterbeingcirculatedfor comments both documents have been printed and are awaiting distribution to new Government Political Principals.

Dialogues on outcomes of Phase 1 as indicated in the founding documents towards development of phase 2 were held with the following stakeholders to solicit inputs for the drafting of Vision 2030 development plan

• AlldepartmentalHOD’swereworkshoppedontheDiagnostic

• DistrictMunicipalities–MUNIMEC

• TwohealthdialoguesoneinEastLondonandoneinUmtata

• SouthAfricanSocialSecurityAgency(sassa)

• NationalPlanningCommissiondialogueheldinPretoriainJanuarytosolicitinputsforPhase2

• HouseofTraditionalLeaders

• EasternCapeRuralDevelopmentAgency

• YouthCamp–ORTamboDistrict

Strategic engagements to influence and input on the current 5 years Medium Term Strategic Framework (MTSF) strategic cycle were held with the following institutions: Department of Local Government and Traditional Affairs, Department of Health, Buffalo City Metro Municipality, Amathole District Municipality, Department of Rural Development, Department of Safety and Security, Department of Human Settlements, Matatiele Local Municipality

The ECPC has entered into a Strategic Partnership (a service level agreement) with the Eastern Cape Socio Economic Consultative Council (ECSECC) to provide a technical support to the ECPC working groups.


The Legal Services unit was established during the last quarter of the 2012/13 financial year under the office of the Head of Department. Currently there is one employee in the Unit under the supervision of the Senior Legal Specialist from the Technical Support Unit. The key functions of the Unit includes, amongst others: provision of effective and efficientlegaladvicesandopinionsinordertoensurecompliancewithrelevantlegalprescripts;ongoingfacilitationandmonitoringofcompliancewithcourtordersacrossallprovincialdepartments;draftingandvettingofcontractsand agreements and co-ordinate litigation in favour of or against the department. The Unit also assist the department in the drafting of the Appropriation as well as the Adjustment Appropriation Bills.

In the Internal Audit Unit, a Chief Audit Executive (CAE) was appointed during the financial period. The unit managed to complete all the deliverables in terms of the annual performance plans including the review and approval of the charter documents, the strategic and operational plans, and the completion of the audits planned for the financial year. The operational plan was amended during the mid-year period to cater for the dynamic nature of the internal risk-based processes faced by the department. Additionally, there have also been other personnel appointments within the unit.

The Corporates Services sub-programme is made up of the Human Resource Management, the Human Resource Development, Organisation Development and Change Management, Facilities and Security Management Services, and Information Technology units.

The Human Resource Management unitmanaged to reduce thevacancy ratewhichwas8%at thebeginningofthefinancialyearto5%bytheendofthefinancialyear.Thedepartmentcommitteditselftodrasticallyimprovetheinternalrateofhireinordertoretaintalentwithintheorganisation.Thedepartmentmanagedtoachievea12%internal rate of hire which is a major achievement. The majority of appointments within the department were contract workers which were mainly youth that was employed after having served the department as graduate assistants and interns. Some of the contract workers were appointed permanently into the approved structure of the department and this benefited the department as they ploughed back the skills that they had attained.

The Human Resource Development unit ensured that by 31 March 2013 the department had 45 departmental former bursary holders serving their bursary obligations in the department. Out of this number, 12 have been permanently appointed by the PPT whilst the rest were appointed by the following institutions: National Treasury, a Public Entity, Northern Cape Provincial Planning and Treasury, Eastern Cape Department of Health and Inkwanca Municipality.

Regarding training and development interventions for staff, prior to the 2012/13 financial year, employees benefitted from two main types of training, namely, departmental and transversal training. Transversal training is organised by the Office of the Premier, departmental Accounting Reforms & Training and the departmental Financial Information Systems Chief Directorate, and it is aimed at improving general skills of the public sector. The departmental training is organised in-house to address particular skills gaps.

In the 2012/13 and 2013/14 financial years, the focus changed to development of job specific skills and competencies rather than generic skills. This is the trend that will be followed into the future. The concentration of the training and development programmes in areas that relate to the core business bodes well for the department in terms of creating a skills pool that will readily respond to the skills needs of the department and to ensure service delivery.

In the 2013/14 financial year, the department has provided internship opportunities to 25 interns which translate to 4.6%ofthe456departmentalemployees.TheDPSAInternshipProgrammeperformancetargetis5%ofthetotalestablishment.

Ongoing training on PMDS is provided to all employees, including senior management.

In response to the national call of “GETTING TO ZERO” on HIV and AIDS, the department through the Employee Wellness Unit contributed to the fight against the pandemic. During the 2013/14 financial year, the Employee Wellness unit conducted HIV counselling and testing campaigns where 179 departmental employees participated. These campaigns were aimed at assisting the unit in raising awareness levels and encouraging employees to know their status.


With the assistance and partnership of valuable stakeholders like GEMS and ICAS educational support programmes have been made available to all those infected and affected. Employees have also been encouraged to register with the AFA (Aid for Aids), programme through GEMS.

In the last quarter of the financial year, 12 PPT employees voluntarily participated in TB screenings. The Employee Wellness unit provided support, not only to the employees but to their immediate families as well.

In its quest to reduce absenteeism levels, the Employee wellness unit has embarked on a number of projects including the Influenza vaccine campaign during the winter season.

Work stress, personal stress, health issues, relationships and families are some of the major issues that are tackled through the confidential counselling support services that are offered to the departmental staff.

The Employee Relations unit was instrumental in dealing with and ensuring resolution of all employee grievances and complaints against the departmental officials. Directing focus on resolving of grievances at their point of origin has led to a decrease in the number of complaints or grievances that had to be resolved or determined at the highest level of authority. This, in turn, has led to the decrease in the number of grievances that were forwarded to the Public Service Commission as a result of their non-resolution, internally. This approach, further, has resulted in the successful maintenance of cordial workplace relations and mutual respect between the organised labour formations that are active in the department and management. Internal workshops were conducted for managers and supervisorsinthe‘managementofgrievances’disciplineandalsotofamiliarisethemwiththeCodeofConduct.Asa result of these workshops, confidence has been instilled among line managers to deal with complaints, grievances and disciplinary matters that arise within their scopes of responsibility.

Arrangements are in place to facilitate regular communication between the organised labour formations that are active in the department and management. Bi-monthly meetings are held wherein these stakeholders share information and engage in discussions on issues that are relevant to maintenance of good workplace relations.

The Information Technology (IT) unit had the following major successes in the year under review:

• CompliancewithallofPhase1requirementsfromDPSAfortheCorporateGovernanceofICT

• SupportfortheimplementationoftheUnifiedCommunicationsSystemresultinginafullnetworkupgradeofallactive network infrastructure across all offices in Bhisho

• Developmentofanin-housesystemandprocesstoproducedetailedbillingontheuseoftheCentralisedBhishoTelephone System. This in-house system and process resulted in Treasury being able to produce accurate telephone accounts for all client departments using the Centralised Bhisho Telephone System. It is estimated that it would have cost PPT upward of R 200,000 to procure a third party service to produce these telephone accounts

• ThemigrationoftheCentralisedElectronicSupplierDatabasetothePPTvirtualisedenvironmentonthemainStorage Area Network (SAN). Further to this, the CESD is now backed up together with the virtual environment and all the server processes are now monitored proactively. This has resulted in enhanced stability of the system

• TheinsourcingofthesupportfortheCESDfromFebruary2014onwards.Thisfunctionhasbeentakenoverfrom external consultants

• DepartmentofHealthhasutilisedtheservicesofPPTSystemsDevelopmentteamtosupporttheenhancementof a critical in-house system, namely, the Cost Centre Reporting System

The Security and Facilities unit, in the year under review, carried out a project on the Installation of Biometric Access Control System at Norvia House, where Amathole District and Planning Commission are situated. The purpose of installing the system is to achieve the monitoring of access to the premises mentioned above. It will further assist in the prevention of unauthorized access to the premises. This project started to be fully operational on 15 February 2014.


The Financial Management unit continued to provide financial support to the department by ensuring that all statutory requirements are complied with in terms of the Public Financial Management Act (PFMA) and related prescripts. The unit improved the relations with South African Revenue Service (SARS) to ensure that the monthly and annual tax reconciliations were accurate and cleared all outstanding returns from previous years.

The Supply Chain Management unit has continued to provide the department with the required goods and services to ensure that the departmental operational targets are met. To enhance agility, effectiveness and efficiency of the department, a Unified Communication Solutions and 24-Hour wellness services were procured. Technical experts for the planning and programming phases to draft the Provincial Vision 2030 Plan were also appointed.

As a contribution to Outcome 1 of the Government 12 Key Outcomes, the department also disposed and donated old office furniture, office chairs and computer equipment to Skhobeni Primary School, Nolitha Special School and After Care in Mount Ayliff, Smuts Ndamase High School in Libode and Jojo High School in Mount Ayliff.


Programme Name: Administration

Performance indicatorActual

Achievement (2012/13)

Planned Target

(2013/14)

Actual Achievement

(2013/14)

Deviation from planned

target to Actual

Achievement for 2013/14

Comments on Deviation

1

To provide policy direction and strategic management towards improved service delivery and fulfilment of stakeholder needs.

0 24 20 4

The department had planned to complete the Vision 2030 Plan within 2013/14 financial year. However the department could only finalise the diagnostic report as the first step towards development of Vision 2030 master plan. The Vision 2030 Master plan will be finalised in June 2014.

2Efficient human resource management, security and information services.

0 14 14 0

3

Effective financial management inclusive of effective internal control measures and risk mitigation strategies within the department.

0 87 75 12

This positive variance is due to the departmental Internal systems improvement which led to lesser time taken to process invoices and payment.


Performance indicators:

Performance indicator

Actual Achievement

(2012/13)

Planned Target

(2013/14)

Actual achievement

(2013/14)


target to Actual


Reasons for Variance

SUB-PROGRAMME 1.1: OFFICE OF THE MEC

1

Report on the administrative support provided to the MEC towards the implementation of departmental policy directives.

4 4 4 0

2Pre/Post budget engagements held with stakeholders.

2 2 1 1

The post budget engagements were postponed to avoid holding two provincial events in the same week with the Office of the Premier.

SUB-PROGRAMME 1.2: MANAGEMENT SERVICES

STRATEGY MANAGEMENT

1Annual Report consolidated and submitted.

1 1 1 0

2Quarterly Performance Report validated and submitted.

4 4 4 0

3Annual Performance Plan Tabled.

1 1 1 0

COMMUNICATIONS

4Quarterly report on implementation of the Communication strategy.

-1 4 4 0

SUB-PROGRAMME 1.2.2: - LEGAL SERVICES

1

Reports on the number of contracts and agreements drafted, legal advices and opinions given.

- 4 4 0

Sub-programme 1.2.3: - PLANNING COMMISION

1Quarterly reports on the development of Vision 2030 Provincial Development Plan.

- 4 1 3

The Vision 2030 Plan had not been completed as yet with the new targeted finish date being 30 June 2014. The technical work to be done has not been completed nor do the public engagements that are meant to inform the Plan. The Framework for the Plan was only approved by Commissioners on the 20th March 2014.

Sub-programme 1.3. : CORPORATE SERVICE

HUMAN RESOURCE MANAGEMENT SERVICE

1Approved annual HR plan implemented.

1 1 1 0

2Human Resource Compliance Dashboard Reports submitted.

4 4 4 0

HUMAN RESOURCE DEVELOPMENT & EMPLOYEE WELLNESS

3Approved annual PMDS Plan implemented.

1 1 1 0

4Approved annual skills development plan implemented.

1 1 1 0

1 The dash means that the performance indicator is new.



Actual Achievement

(2012/13)

Planned Target

(2013/14)

Actual achievement

(2013/14)


target to Actual



FACILITIES AND SECURITY MANAGEMENT SERVICES

5Security assessments conducted and security risks and threats identified.

1 1 1 0

6Facilitation of the vetting of officials in prioritised positions.

4 4 4 0

7Conduct Occupational Health & Safety assessments and audits.

1 1 1 0

INFORMATION TECHNOLOGY

8ICT Governance Framework implemented.

- 1 1 0

Sub-programme 1.4. : FINANCIAL MANAGEMENT – OFFICE OF THE CFO

Sub-programme: 1. 4.1: Financial Management

1Approval of departmental budget documents.

2 2 2 0

2Approved Annual Financial Statements.

1 1 1 0

3 Approved IYM report. 12 12 12 0

4Number of days for payment of invoices.

20 30 10 20Internal systems improvement led to lesser time taken to process invoices and payment.

5

Approved certificate of compliance with regards to management of the suspense accounts.

12 12 12 0

Sub-programme 1.4.2 :– Supply Chain Management

1Departmental Procurement Plan consolidated.

- 1 1 0

2 Complete Asset Register. 12 12 12 0

SUB-PROGRAMME - 1.4.3 : - Risk Management and Internal Control

1Report on compliance with internal controls and risk management

4 4 4 0

SUB-PROGRAMME 1.5 :DEPARTMENTAL INTERNAL AUDIT

1Approved Internal audit and audit committee charters.

- 2 2 0

2Approved three-year strategic and operational plans.

- 1 1 0

3

Quarterly reports on the implementation of risk-based audits in terms of approved internal audit plan.

10 10 18 8

The operational plan of the unit was not properly aligned to the Annual Performance Plan. More audits were executed as the operational plan is influenced by the departmental risk profile.

Strategy to overcome areas of underperformance

There are no major areas of underperformance however, the following have been identified to overcome below mentioned areas of underperformance:


• Post budget engagements held with stakeholders: The post budget engagements were postponed to avoid holding two provincial events in the same week with the Office of the Premier (OTP), however planning for post budget engagement are underway together with the Office of Strategy Management (OSM).

• Development of Vision 2030 Provincial Development Plan: The Vision 2030 Plan had not been completed as yet with the new targeted finish date being 30 June 2014. The technical work to be done has not been completed nor do the public engagements that are meant to be inform the Plan. Thus, due to the revised timeframes, the Plan can only be approved by the new EXCO after the 7 May 2014 general elections. The revised project plan envisages the draft Plan to be completed by the end of May 2014.

Changes to planned targets

There were no changes to planned targets.

Linking performance with budgets

The programme under spent its budget by R6, 093 million from an adjusted budget of R161, 385 million, a slight improvement compared to the 2012/13 financial year. The under spending in compensation of employees is mainly due to delays in the filling of vacant posts as well as staff exiting the Department for better prospects or retirement. The Programme experienced challenges in obtaining suitable candidates to fill some of the vacancies whilst some were filled later than anticipated due to recommended candidates declining appointments. Termination of contracts in respect of graduate assistants also contributed to the underspending. The department is currently in the process of reviewing its organogram and only critical posts were filled.

Under spending in goods and services is mainly due to challenges experienced with the implementation of the second phase of the Vision 2030 project. The non-filling of vacant posts also had a concomitant effect on goods and services.

Under spending in payments for capital assets is as a result of finance lease (cellular phone) expenditure which was affected by non-filling of vacant posts.

The programme has written off irrecoverable bad debts to the value of R14, 000 from identified savings.

Sub-programme expenditure

2013/2014 2012/2013

PROGRAMME 1

Final Appropriation

Actual Expenditure


Final Appropriation

Actual Expenditure


(R’000) (R’000) (R’000) (R’000) (R’000) (R’000)

Office of the MEC 5 916 5 871 45 5 783 5 425 358

Management Services

36 921 33 765 3 156 33 280 27 547 5 733

Corporate Services

53 676 51 682 1 994 60 501 57 847 2 654

Financial Management

60 749 60 096 653 61 133 58 491 2 642

Internal Audit Unit 4 123 3 878 245 4 806 3 781 1 025

Programme Total 161 385 155 292 6 093 165 503 153 091 12 412


2.4.2. Programme 2: Sustainable Resource Management

Purpose: Allocative efficacy through budget preparations, infrastructure budgeting, expenditure monitoring economic analysis and fiscal policy to all provincial departments, municipalities and public entities.

The programme consists of five sub-programmes, namely:

Programme Support Provides strategic leadership in implementing strategies to ensure the programme’s contribution in realising Departmental objectives. This sub-programme also provides administrative support to ensure effective operations of the programme.

Economic Analysis Provides provincial economic and social research and analysis that informs fiscal policy development and the annual budget process, thereby contributing to the provincial growth and development plan.

Fiscal Policy Provides fiscal policy advice, determines the Medium Term Fiscal Framework and develops and optimises the provincial revenue base.

Budget Management Oversees the budget allocation process and ensures the alignment with provincial policies and the growth and development plan. Ensures sound financial management and technical support to public entities and general compliance with the Public Finance Management Act (PFMA) and other prescripts.

Public Finance Drives and coordinates the Provincial Planning and Treasury responsibilities in terms of the Municipal Finance Management Act, 2003 (MFMA). Ensures sound financial management through providing technical support towards budget execution by provincial Departments and general compliance with the Public Finance Management Act (PFMA) and other prescripts.


• RevenueenhancementtomaximisethefiscalenvelopeintheProvince,includingmunicipalities.

• Monitoringandevaluationoffinancialperformancetowardseffectiveandefficientuseofpublicresources.

• Providesocio-economicresearchthatinfluencesfiscalpolicyandbudgetprocessestowardstheachievementofthe Province’s strategic priorities

• CoordinationandpreparationofMainandadjustedprovincialbudgetsthatefficientlyallocatepublicresources.


The Economic Analysis Unit produced the annual Medium-term Budget Policy Statement in 2013/14 outlining the key provincial priorities for enhancing inclusive economic growth. The unit also produced research reports focusing on key development areas such as school nutrition, regional economic development and reindustrialization around the agro-processing industry.

The Fiscal Policy unit intensified its rollout of the Provincial Revenue Enhancement Framework with emphasis on enhancing departmental revenue collection capacities, up-to-date periodic reviews of tariff registers, better revenue management and reporting, resulting in several departments continuing to over collect on own revenue estimates in 2013/14.

The FFC recommendations on the 2014/15 Division of Revenue Act were once again assessed form the Eastern Cape province’s perspective and comments were submitted through the provincial legislature to the National Council of Provinces (NCOP) and these were to form part of the consolidated provincial governments’ response on the FFC recommendations to National Treasury.

Through various interactions with National Treasury on the review of the 2014 Division of Revenue Bill (DoRB) various proposals were made in terms of new or increased funding for key provincial policy areas.

Furthermore, the unit has been continuously interacting and monitoring decisions / resolutions undertaken at Cabinet Cluster and Cabinet Committee meetings with the aim of communicating PPT’s views and recommendations on government policy and fiscal matters.


The Budget Management unit started the year on high note with merging Monitoring and Reporting and Budget Planning Units as the means of ensuring integrated approach to budget compilation and monitoring expenditure in the province.

The Unit undertook budget reprioritization and top-slicing of CoE budget of provincial departments to provide the cushion for fiscal cliff in the 2016/17 financial year and buffer for social and economic infrastructure investment in the province. Furthermore expenditure reviews were conducted in seven departments (Health, Education, DRDAR, DEDEAT, Road and Public Works, Transport and Social Development) that were identified by National Treasury with the view to improve procurement processes or to enhance value for money spending.

The adjusted and main budgets were tabled within legislated timeframes. In addition, the gazette for the transfer to municipalities was tabled together with the main budget to enable municipalities to include them in their budgets.

Quarterly feedback reports on financial and non-financial performance was provided to departments and public entities highlighting inherent challenges and recommendations on how to unblock bottlenecks in service delivery.

The Public entities unit has also brought a degree of corporate governance back into the entities and has reviewed the performance of the entities as well as updating briefing notes. Furthermore, the unit developed and issued an Instruction Note 3 which relates to the rollover application process and surrender of surplus funds which resulted in the surrender of unspent funds by public entities. In addition, the unit issued an Instruction Note 5 regarding deregistration of dormant subsidiary and associate companies. The instruction note also advised that the insolvent subsidiaries be liquidated and the rest of the subsidiary and associate companies be integrated into the operations of the controlling public entity. Both of these Instruction Notes were done in collaboration with Norms and Standards Unit.

In relation to Infrastructure Unit, the Infrastructure Delivery Management System (IDMS) has been implemented in the province and as such it has made strides particularly in planning and monitoring compliance with presentation of Infrastructure plans. The unit provided hands-on support to the department that resulted in Education and Health securing their 2014/15 and 2015/16 infrastructure budget allocations. To strengthen the capacity of the infrastructure delivery in the province, the unit facilitated the appointment of engineers in Education and Health. Over and above the unit has established an integrated social infrastructure delivery arm where ECDC and CDC were approved to implement social infrastructure for Education and water and sanitation for Municipalities respectively.

TheprovincehasspentR7,829billion(98,71%)ofitstotaladjustedInfrastructurebudgetofR7,932billionthusunderspendingbyR102,645millioninthe2013/14financialyearascomparedto94%spendingof2012/13.

The unit has also strengthening the monitoring by focusing on the value for money and site visits during year under review and this focus area will be continued in coming financial year.

TheMunicipalFinanceUnithasconsistentlymanagedtoaccomplishitsgoalsasenshrinedintheOperationalPlan;for instance submission and analysis of Section 71 reports as well as feed-back to respective Municipalities. Mid-Year visitationswereconductedaspartofthebenchmarkexercise;recipientmunicipalitiesapplaudedtheinterventionbythe Unit.

The Municipal Finance unit in the year under review engaged provincial departments that owed municipalities large amounts (Health, Roads & Public Works and Education) leading to significant improvement in payment of outstanding debt and revenue collection by municipalities. The Provincial Planning and Treasury together with Cacadu District Municipality further contributed to the development of a Practical Guideline for the Implementation of SCM Policy by National Treasury that was piloted in Cacadu district local municipalities. A report on municipalities in financial distress was compiled which resulted in the development and implementation of plans to resolve crises.

Financial management specialists were seconded to assist Budget and Treasury Office (BTO) staff as part of the CFO Support Programme which resulted in marked improvement in MFMA compliance and financial management. In addition to support already provided to OR Tambo District Municipality, the Provincial Planning and Treasury


seconded two officials, one of which acted as a CFO for a period of four months.

As part of the strategy to assist municipalities address and accelerate social infrastructure delivery, the Provincial Planning and Treasury provided financial support to Makana and Engcobo municipalities on water and sanitation projects.


Programme Name: Sustainable Resource Management.

Strategic objectivesActual


Planned Target (2013/14)

Actual Achievement

(2013/14)


target to Actual Achievement for

2013/14

Comments on

Deviation

1Revenue enhancement to maximise the fiscal envelope in the EC province.

0 8 8 0

2

Monitoring and evaluation of financial performance towards effective and efficient use of public resources.

0 69 69 0

3

Provide socio-economic research that influences fiscal policy and budget processes towards the achievement of the Province’s strategic priorities

0 5 5 0

4Main and adjusted provincial budgets that efficiently allocate public resources

0 30 30 0

5To provide technical support towards infrastructure delivery

0 14 14 0



achievement (2012/13)


Actual achievement

(2013/14)



2013/14


Sub-programme 2.1 ECONOMIC ANALYSIS

1Medium Term Budget Policy Statement (MTBPS).

1 1 1 0

2 Policy briefs on key sector/policy focus areas.

4 4 4 0

Sub-programme 2.2: FISCAL POLICY

1Report on the implementation of the Provincial Revenue Enhancement Framework.

4 4 4 0

2

Report on Health and Education support to improve their Compensation of Employee (CoE) data.

-2 4 4 0

Sub-programme 2.3 : BUDGET MANAGEMENT

Budget Planning

1Tabling of credible provincial budgets within legislated timeframes.

2 2 2 0






Actual achievement

(2013/14)



2013/14


2

Report on compliance of departmental Annual Performance Plans and alignment to National and Provincial policy priorities.

- 1 1 0

Budget Systems Support

3Development and piloting of a budget electronic filing system.

- 1 1 0

Public Entities

4

Quarterly consolidated monitoring reports on achievement of targets for all public entities.

3 4 4 0

5

Consolidated report on the reviews performed on Corporate, Strategic, Annual Performance plans and budget submissions for all provincial Public Entities and tabling of credible budget.

- 3 3 0

6Report on analysis of financial statements.

10 12 12 0

7Evaluation reports on operations of public entities.

- 3 3 0

INFRASTRUCTURE MANAGEMENT

8

Quarterly reports on the support provided to Infrastructure Departments to implement the Provincial Infrastructure Delivery Plan, Infrastructure procurement framework and infrastructure operations & maintenance strategy.

- 4 4 0

9

Quarterly reports on the support given to infrastructure Departments (DOH, DOE and DRPW-Roads component) to implement the Human Resource Capacitation Framework.

- 4 4 0

10

Consolidated quarterly infrastructure expenditure analysis (with recommendations) for all Infrastructure Departments.

4 4 4 0

11

Two half-yearly reports on the implementation of the Infrastructure progression model (capability and infrastructure performance).

- 2 2 0

Sub-programme 2.4 : PUBLIC FINANCE

Monitoring and Reporting (Provincial Finance)

1Monthly IYM analysis and quarterly feedback to all departments.

16 15 15 0





Actual achievement

(2013/14)



2013/14


2Quarterly Performance Reports (QPR) analysis and feedback to departments.

4 4 4 0

Municipal Finance (mf)

3Assessments and feedback on municipal draft budgets.

- 42 42 0

4

Analysis of consolidated In-Year-Monitoring (Section 71) reports and feedback to municipalities.

- 4 4 0

5

Report on the support provided towards the development and timely submission of AFS by Municipalities.

- 4 4 0


There are no areas of underperformance and therefore no strategies have been identified because all the set targets were met.


There were no changes to planned targets.


The programme under spent its budget by R1, 432 million from an adjusted budget of R74, 311 million. The programme has significantly improved its spending compared to 2012/13 financial year due to filling a large number of vacancies.

Although the programme has improved in the filling of vacancies, there were some vacancies that contributed to the under spending in compensation of employees. The under spending was further exacerbated by staff exiting the system for better prospects.

The non-filling of vacant posts had a concomitant effect on goods and services expenditure.


2013/2014 2012/2013

PROGRAMME 2

Final Appropriation

Actual Expenditure


Final Appropriation

Actual Expenditure


(R’000) (R’000) (R’000) (R’000) (R’000) (R’000)

Programme Support

2 995 2 778 217 3 131 3 103 28

Economic Analysis 2 490 2 481 9 2 976 2 655 321

Fiscal Policy 4 856 4 689 167 4 439 4 314 125

Budget Management

13 812 13 632 180 8 620 7 724 896

Public Finance 50 158 49 299 859 42 270 39 243 3 027

Programme Total 74 311 72 879 1 432 61 436 57 039 4 397


2.4.3. Programme 3: Asset and Liability ManagementProgramme Purpose

Purpose: This programme provides policy direction, facilitating the effective and efficient management of assets, liabilities and financial systems. It is headed by a Deputy Director-General.

The programme consists of four sub-programmes, namely:

Programme Support Provides strategic leadership in implementing strategies to ensure the programme’s contributioninrealisingdepartmentalobjectives;

Asset Management Facilitates the effective and efficient management of physical assets and promotes economic development through targeted government procurement, manages fiscal assets, optimises liquidity requirements and returns on financial investments and maximises the latter within acceptablelevelsofrisk;

Liabilities Management Facilitates the effective and efficient management of liabilities and

Supporting and Interlinked

Financial Systems

Provides for oversight and management of existing financial systems and the transition to the Integrated Financial Management Systems, enhancement of systems to support the business processes of government and provides capacity building in the usage of financial systems aimed at better provincial financial management.


• Facilitate,promoteandmonitortheimplementationofpracticesthatensuresoundmanagementofassetsfortheProvince.

• Providetechnicalsupport,monitoringandguidancetowardsefficientSCMpracticesintheProvince.

• PromotesoundcashandliabilitymanagementbestpracticestoimprovetheProvince’sliquidity

• SupportprovincialDepartmentstowardsimprovementandefficiencyoffinancialmanagementsystems.


The Cash and Liability Management Unit is mandated to ensure that the Provincial Revenue Fund always has sufficient funds for all appropriated expenditure including the provision of banking services and cash flow management support and guidance to all provincial departments.

During the year under review, Provincial Revenue Fund (PRF) achieved the following:

• PRFLiquidityhasbeenmaintainedandfundedthedepartmentaladjustmentestimate fromitssavingstoanamount of R1, 7 billion.

• FundingoftheFinanceActafterthepassingoftheActbyProvincialLegislaturetoanamountofR1,6billion,mainly for the departments of Health and Education.

• Investingtemporarilyunusedfundsinvariousbanksandtherebyenhancingtheinterestincomeearnedfortheyear ended 31 March 2014 to R276 million as against the budget of R76 million.

• MaintenanceofPositivebankaccountsofalldepartmentsandtheProvincialRevenueFundduringthefinancialyear.

• ProvincialRevenueFundAnnualFinancialStatementsreceivedanunqualifiedauditfortheyearendedMarch2013 with clear projection of same for the year under review.

In addition, the following was achieved in Compensation of Employees management in respect to the departments ofEducationandHealth;

The Unit was also tasked to continue with the centralisation of authorisation of appointments of employees for the departments of Health and Education in order to avoid the over expenditure on Compensation of Employees (CoE). With respect to the department of Health, the function was fully returned to the department due to improved financial


controls with only quarterly monitoring now taking place.

• ThedepartmentofHealthwasalsoassistedwithclearingtheHRaccrualsaswellasthere-alignmentofCoEbaseline.

Further achievements include the following;• TranskeiDevelopmentReserveAct

Provincial Planning and Treasury (PPT) inherited the Transkei Development Reserve Fund (TDRF) from the old Transkei Government. The fund consisted of properties, mainly comprising of block of flats in Mthatha. During the year 2012, a process was entered into to ensure the repealing of the TDRF Act through the Provincial Legislature. Subsequently, the TDRF Act was signed into Law in July 2013, funds transferred to the Provincial Revenue Fund (PRF) with properties and personnel being transferred to the Department of Roads and Public Works effectively during the financial year

• PaymentofCreditorswithin30daysandmanagingofDebtors

Provincial Planning and Treasury (PPT) interacted and communicated with provincial departments to comply with the Instruction Note 34 issued by National Treasury and this resulted in the reduction of accruals/outstanding invoices (creditors) to comply with the 30 day period. In complying with the 30 days payment cycle as required by National Treasury Regulations (NTR) 8.2.3, provincial governments stood at 23 days on average to settle/pay the creditors based on the Basic Accounting System used. The full utilisation of LOGIS will give further impetus to accurately record and account on the days taken to settle creditors.

Top Management of the province were engaged periodically to ensure payment of creditors within 30 days and settling of all outstanding accruals.

In managing provincial debtors, the Unit successfully conducted a Tax Forum together with SARS (National) to address the issues of non-compliance by Eastern Cape provincial departments. Further, the Unit resolved inter-departmental claim query from Free State Province – Education through intervention and interaction with the provincial departments.

• SocialInvestmentandManagingofProvincialBankers

The Unit had also been involved in managing the Corporate Social Investment coordinated by Standard Bank as part of their Service Level Agreement. Through this involvement, the Bank successfully funded four schools adopted by the department through Standard Bank CSI funding i.e. Smuts Ndamase S.S.S, Jojo S.S.S, Mthawelanga S.S.S and Bethania S.S.S.

The department of Sport Recreation, Arts and Culture (DSRAC) was also assisted through engagement by Provincial Planning and Treasury to get funding from the Bank for Provincial Sport Award function held in February 2014.

The Bank also committed and set aside funds to train provincial departments through Fort Hare University in respect of the following:

• Cashmanagement,

• Assetmanagementand

• IYM

The roll out of the training is expected to fully commence during 2014/15 financial year.

The Asset Management unit developed the controls assessment tool and administered it on a quarterly basis starting from April 2013. This was designed to identify areas which require support for the implementation of controls in asset management and also to assist all provincial departments in achieving the targeted level 3 in terms of the Financial Management Capability Maturity Model (FMCMM). This included training of Provincial Officials on the basic controls on asset management and inventory management through the National School of Governance (formerly known as


PALAMA)

Departments were supported in the development and implementation of asset management strategies with the view to enhance coordination and planning for sound management of assets.

Quarterly analyses were performed on the interim financial statements and departments were assisted in ensuring that financial reporting is reflective of assets expenditure and movements in the asset register.

The Government Fleet Management Services (GFMS) was assisted with the maintenance of fleet asset register including participation in its verification exercises as well as the verification of Department of Health fleet assets. Departments were also assisted to maintain logbooks for recording the use of fleet assets and exercising control over them. This sort to ensure that proper care is afforded to provincial fleet as well as enhancing the ability of the GFMS to report on its assets and related revenue.

Provincial departments, especially department of Roads and Public Works Department (DRPW) were assisted with the annual revision of immovable asset management plans aimed at ensuring proper coordination, use and planning for state property in line with the Government Immovable Assets Management Act. This included supporting DRPW and Human Settlements Department on the maintenance of provincial immovable asset registers.

The Supply Chain Management Office implemented a Contract Management Strategy which will improve economies of scale and reduce irregular expenditure. The complaints help desk was fully operationalized in the financial year which improved payment timeframes of suppliers

Support was provided on the overall implementation of the SCM reform programme in the Department of Health (DOH). Targeted support has been provided, including specifications development, tender evaluation and centralization of LOGIS supplier registration.

The Integrated Financial Information Systems unit undertook the following projects in the year under review:

a) Improving Procurement Efficiencies in the Health Sector

In line with the policy speech pronouncements for the MEC for Finance for 2013/14 to improve efficiencies in the procurement in the Health sector, the PPT collaborated with the departments of Health and Sports, Recreation and Culture on the rollout of LOGIS to ensure electronic procurement in the department. These activities included:

• Ring-fencingofbudgetforICTinfrastructureupgradetoenableimplementationofLOGISinthedepartmentofHealth districts.

• PPTappointed5LOGISimplementers,4weredeployedinthedepartmentofHealthwhileonewasdeployedatthe department of Safety and Liaison.

• AfurthersixunemployedgraduatetraineeswereappointedforLOGISsupportandhandholdinginSeptember2013.

• CentralizationofregistrationofsuppliersonLOGISatPPTforthewholeprovincetosimplifysupplierregistrationsfrom 1 April 2013 and to facilitate procurement activity monitoring.

• Deployment of a Supply Chain Chief Director to Department of Health to accelerate supply chain reformsincluding the roll out and utilization of LOGIS in the department.

• Outofthe147sites/storesrequiredtobeimplementedindepartmentofHealth,72newsiteswerecompletedby31March2014,bringingthetotalofsitescompletedto90.Thisrepresents63%LOGISimplementationinthe department by the end of the 2013/14 financial year. The outstanding sites include sites in Joe Gqabi, and Amatole districts. These will be finalized in 2014/15 financial year.

In the new financial year, PPT will concentrate on finalization of the implementation of LOGIS in the remaining 57 sites in Department of Health. The next phase of the project will further include implementation of the inventory and asset modules in the already implemented sites. This will enable the migration of existing worksheet based asset register to LOGIS to help improve asset and inventory management for the department.


Training and handholding of users to impart the requisite skills for users in the newly implemented sites has been a major task. Out of the total of 1004 LOGIS users trained in the 2013/14 financial year, 562 users were from department of Health, while the other 442 users trained were from other departments in the province.

b) Zithulele Hospital ICT Revitalization Project

The Member of the Executive Council (MEC) for Finance adopted Zithulele Hospital in October 2013. Zithulele is a rural hospital in Mqanduli with 147 beds providing primary health care services for a catchment area of 130 000 people from surrounding villages. The hospital had major ICT infrastructure challenges including lack of transversal systems because of connectivity and poor ICT infrastructure i.e. there was no BAS, LOGIS and PERSAL. This had an adverse impact on the delivery of health services at the hospital. As a consequence of the adoption of the hospital, funds were provided during the adjustment budget for the deployment of state of the art ICT systems. The funds were used for the following:

• Installationoffibrelinkstoallbuildingsi.e.wards,outpatientdepartments,supportservicesandadministration

• Installationofdatacentreandrequisitecomputerequipmentthroughoutthehospital,inclusiveoftouchscreenunits at ward level for patient care, Wireless iPad devices and notebooks for clinical staff for bed side patient treatment.

• Upgrade of the server room with a modern cluster solution with built in redundancy for high availability ofservices.

• ModernisingofPictureArchivingSystem(PACs)toamodernwebbasedsolutionthatallowsforthearchivingof patient x-ray images and electronic viewing of images throughout the hospital. This allows for fast access and viewing of patients digital x rays, whilst at the same time reducing the need for printed x ray.

• Installationofaclinicalkioskwhichbringstogetherallserviceintoasinglelandingpagefromwherethecliniciancan access the PACS system, Lab Results, Clinical Books and Articles, Diagnoses Codes etc. This makes it easy to access information by the clinician and helping to get fast service to patients

• Deploymentofanelectronicdispensingsystematthepharmacytohelpelectronicallymanageandmonitorthedispensing and availability of medicines

The installation of the ICT infrastructure was completed in March 2014. However the installation of the data line is still pending because of delays by SITA although the application was made in October 2013. The matter has been escalated to the SITA head office in Pretoria for intervention. Once the data line is installed, BAS, PERSAL and LOGIS will be installed to allow officials to procure online, manage personnel records on PERSAL and payments on BAS. This will greatly reduce operational costs for the hospital since officials will not have to drive to Mthatha to access transversal systems as the situation currently is.

Listed below are the key benefits of the project to the hospital:

• Improvedturnaroundtimeintheofdiagnosisofpatientsanddeliverytreatment

• ImprovedhospitaladministrationthroughtheintroductionofBAS,PersalandLogis.

• ImprovedcommunicationthroughtheintroductionofEmailandInternetAccess.

• ImprovedClinicalCarethroughtheintroductionofdigitalRadiologyServices,accesstoNHLSlabresults,clinicaldiagnostic information at the point of patient care.

• Accesstotherestof theworldviatheinternetwillalsoprovidethehospitalwithaccesstoservicessuchastelemedicine, digital libraries etc.

• AccesstotheDoHintranetwillalsoensurethatthehospitaliskeptuptodatewiththelatestnewsandevents,circulars etc.

c) Deployment of Unified Communications System at Treasury Head Office

The project involved the implementation of a converged unified communications system onto a single internet protocol (IP) corporate gigabyte network. The aim of the project is to take advantage of convergence benefits which are as follows:


• ReducedcostofcommunicationthroughIPinfrastructure;

• Simplifiedbillingandsystemsadministration,andpotentiallylowertheoverallcostsofconferencingbycombiningdisparateservicesthroughonevendor;

• Contactmanagementintegration-asingle,easily-accessiblephonebookforallbusinesscontacts,whichcanbeaccessedfrommultipledevicesandlocations;

• Advancedcallforwardingtodifferenttypesofdevices,andhuntgroups,whereincomingcallscansearchforanidle extension in a department. Multiple devices i.e. desk phone, desktop, and mobile can ring simultaneously, regardlessoftheirlocation;

• Single number reach i.e. phone users can also benefit from having a single number for all of their phonedevices;

• AsinglevoicemailwithaunifiedvoicemailboxisanotherfeatureofUCandthisworksformultiplecommunicationdevices,suchasadeskphone,homephone,mobilephone,orVoIP(VoiceoverIP)phone;

• Advancedtelephonemanagementi.e.controlandmonitoringoftelephonebillsandusage.



Programme Name: Asset and Liability Management




Actual Achievement

(2013/14)



2013/14

Comments on

Deviation

1

Facilitate, promote and monitor the implementation of practices that ensure sound management of assets for the province.

0 19 19 0

2

Provide technical support, monitoring and guidance towards efficient SCM practices in the province.

0 14 8 6

Most of the available resources were redeployed to the LOGIS Centralisation project to ensure that all the required documentation is complete and auditable. However now that the LOGIS project is nearing completion, the institutionalisation of contract management will commence in May 2014. A comprehensive needs analysis and research will be undertaken to identify commodities and services for Strategic Sourcing

3

Promote sound cash and liability management best practices to improve the province’s liquidity.

0 74 73 1

The Department of Rural Development and Agrarian Reform incurred unauthorised expenditure that has been condoned by SCOPA without funding.

4

Support provincial departments towards improvement and efficiency of financial management systems.

0 1514 2404 890

Special requests from departments were received for all three systems and also increased rollout of LOGIS in some departments required more new users to be trained and also. Aggressive marketing of training also resulted in bigger uptake of trainees than expected.




Actual Achievement

(2012/13)


Actual achievement

(2013/14)



2013/14


Sub-programme 3.1: ASSET MANAGEMENT

ASSET MANAGEMENT OFFICE

1

Assessments on the implementation of controls relating to movable & immovable assets and inventories in all departments.

-3 4 4 0

2

Departments supported to maintain User Asset Management Plans (UAMPS) and Custodian Asset Management Plan (CAMP) which are compliant with GIAMA.

14 14 14 0

3

Consolidated provincial immovable asset register which is compliant with GIAMA.

- 1 1 0

CASH MANAGEMENT

4

Provincial Revenue Fund monthly forecasting of cash requirements for PMGs in order to maintain cash liquidity.

- 12 12 0

5Number of departments that comply with the Cash Management Framework.

12 13 12 1

The Department of Rural Development and Agrarian Reform incurred unauthorised expenditure that has been condoned by SCOPA without funding.

6Annual Financial statements for the PRF produced in line with NT prescripts.

1 1 1 0

7Monthly reporting of the Provincial Revenue Fund.

- 12 12 0

Sub-programme 3.2 : SUPPLY CHAIN MANAGEMENT

1

Reports on the SCM policies, guidelines, practice notes, circulars and opinions developed as well as complaints dealt with

4 4 4 0

2Reports on the monitoring of compliance to SCM requirements

- 4 4 0




Actual Achievement

(2012/13)


Actual achievement

(2013/14)



2013/14


3

Support to departments towards the implementation of a strategy to institutionalise contract management

- 4 0 4

All available resources were redeployed to the LOGIS Centralisation project to ensure that all the required documentation is complete and auditable. However now that the LOGIS project is nearing completion, the institutionalisation of contract management will commence in May 2014.

4Number of transversal contracts finalised

- 2 0 2

Transversal media advertising business case was presented to EXMA for endorsement. A comprehensive needs analysis and research will be undertaken to identify commodities and services for Strategic Sourcing.

Sub-programme 3.1.3 : LIABILITY MANAGEMENT

1

Consolidated monthly report on compliance with NTR 8.2.3 for effecting payments within 30 days and communicated with all stakeholders.

- 12 12 0

2

Age analysis of outstanding (creditor) accounts per department and interactions with departments.

- 12 12 0

3

Age analysis of staff debtors per department and interaction with departments to reduce such.

- 12 12 0

Sub-programme 3.4: SUPPORTING AND INTERLINKED FINANCIAL SYSTEMS

1Number of Days to resolve queries.

- 2 2 0

2

Number of reports on the status of user account management compliance and action taken to enforce violated controls.

- 4 4 0

3Report on implementation of LOGIS in the province.

- 4 4 0

4

Number of reports on retirements, sick leaves, vacation leaves, violations and leave without pay.

- 4 4 0



Actual Achievement

(2012/13)


Actual achievement

(2013/14)



2013/14


5

Number of authorised (Bas, Persal, Logis) core system users trained in accordance with their system profiles.

1465 1500 2390 890

Special requests from departments were received for all three systems and also increased rollout of LOGIS in some departments required more new users to be trained and also. Aggressive marketing of training also resulted in bigger uptake of trainees than expected.


On the few areas identified, the following remedial strategies are going to be employed to overcome underperformance:

• DepartmentofRuralDevelopmentandAgrarianReform(DRDAR)wasthedepartments that could not comply with the Cash Management Framework, because it incurred unauthorised expenditure that has been condoned by SCOPA without funding. However, DRDAR plans to realise savings in its future budgets for a period of three years, wherein they will clear this unauthorised expenditure in their books and also surrender to the Provincial Revenue Fund

• Support to departments towards the implementation of a strategy to institutionalise contract management: All available resources were redeployed to the LOGIS Centralisation project to ensure that all the required documentation is complete and auditable. However now that the LOGIS project is nearing completion, the institutionalisation of contract management will commence in May 2014.

• Noneoftheplannedoftransversal contracts has been finalised, however a comprehensive needs analysis and research will be undertaken to identify commodities and services for Strategic Sourcing.


There were no changes to planned targets

Linking performance with budgets:

The programme under spent its budget by R1, 775 million from an adjusted budget of R58, 525 million. Actual expenditure in 2013/14 is less than that of 2012/13 due to the transfer of the Transkei Development Reserve Fund (TDRF) employees to the Department of Roads and Public Works.

The under spending in compensation of employees is due to non-filling of vacant posts as well as staff exiting the Department for better prospects and retirement. Most of the vacancies were withheld pending the approval of the new organogram.

The non-filling of vacant posts had a concomitant effect on goods and services expenditure



2013/2014 2012/2013

PROGRAMME 3

Final Appropriation

Actual Expenditure


Final Appropriation

Actual Expenditure


(R’000) (R’000) (R’000) (R’000) (R’000) (R’000)

Programme Support

2 383 2 186 197 2 235 2 154 81

Asset Management

29 496 28 684 812 39 199 36 942 2 257

Liability Management

4 801 4 410 391 4 789 4 769 20

Support & Interlinked Financial System

23 424 23 049 375 15 715 15 395 320

Programme Total 60 104 58 329 1 775 61 938 59 260 2 678


2.4.4. Programme 4: Financial Governance

Purpose: It ensures compliance and accountability with all forms of financial management norms and standards and provides transversal internal audit services to various departments.

Programme Support Provides strategic leadership in implementing strategies to ensure the programme’s contribution in realising Departmental objectives. This sub-programme also provides administrative support to ensure effective operations of the programme.

Accounting Services Ensures the effective implementation of accounting practices in line with Generally Recognised Accounting Practice (GRAP), Generally Accepted Accounting Practice (GAAP) and applicable laws, prepares consolidated financial statements that reflect the financial position of the Province, provide training and communication on accounting reforms.

Norms and Standards Develops and implements financial and associated governance norms and standards to enhance performance orientated financial results and accountability within provincial Departments as prescribed by laws and regulations.

Risk Management Provides a risk profile of the Province and develops and monitors implementation of the provincial Risk Management Framework.

Provincial Internal Audit Services Provide technical support and oversight of provincial internal audit and audit committee activities which will enable the achievement of an integrated approach that adds value to the establishment of sound governance, risk management and internal control principles in the Province.


• TechnicalguidanceandtrainingtowardstheimplementationoffinancialmanagementreformsintheProvince.

• CredibleFinancialReportingandAccounting.

• EffectivemanagementofriskstowardsimprovedservicedeliveryintheEasternCapeProvince.

• EffectiveInternalAuditandgovernancepracticesintheEasternCapeProvince.


The following major activities were undertaken during the year:

The Accounting Services unit ensured that the Provincial Audit Steering Committee (PASC) was resuscitated to oversee the audit improvement throughout the year. The PASC meets once a quarter (monthly during the audit process time) and is made up of Chairpersons of Provincial Clusters, AG, Treasury and Office of the Director General.

Quarterly interim financial statements aimed at improving integrity and quality of information reported in the annual financial statements were prepared by departments and reviewed by Accounting Services to detect early problems that could arise at year end.

Circulars on monthly financial management indicators (Circulars 1 and 3) have also been monitored to promote good financial management discipline, indicated by a culture of executing accounting routines daily or monthly.

To narrow the gap of varying interpretations and the accounting treatment of some technical aspects of the accounting reforms, engagements with the AG were started. These engagements were complemented by the post audit workshop between provincial departments and the AG to share lessons from the audit, which should help guide the focus of the next audit cycle.

During the reporting period consolidated financial statements for 2012/2013 were tabled in the Legislature which reflects the financial position of the Province.

Improvement in capacity and skills development in Supply Chain Management (planning and contract management) and Asset Management were achieved through training offered by the National School of Government (NSG) as well


as workshops organized by PPT’s transversal units.

As part of the department’s efforts, through the Norms and Standards unit, to enforce accountability on financial management performance, formal communication was issued through the office of the MEC for Provincial Planning and Finance to the Executive Authorities of Departments raising issues relating to poor financial management in departments and reported.

To enhance capacity in the Office of the Chief Financial Officer, an analysis of the organisational structures was undertaken and recommendations were issued to all departments for optimal realignment. A competency framework is in place to inform minimum requirements for recruitment of finance personnel and it is implemented in the Department of Economic Development, Environment Affairs and Tourism, Department of Sport, Recreation, Arts and Culture and Local Government and Traditional Affairs.

Instruction notes and circulars were developed to ensure regulatory compliance and best practices including the provision of technical guidance in the application of the PFMA.

During the reporting period a report was prepared for the deliberation by SCOPA on unauthorised expenditure for the financial year 2012/13. The process for the approval of the Finance Bill is underway. However, accountability for such unauthorised expenditure will be enforced.

Risk Management is steadily maturing within the province. During the year Risk management has made strides in the areas of developing and rolling out criteria relating to the examination of risk registers. Quality risk registers are a key step in ensuring that the mandates of departments are achieved.

There has also been a heightened focus on training of risk management personnel within the departments. The preferred international qualification, Certified Risk Management Assurer (Certified by the Institute of Internal Auditors) is being rolled out within the province. Currently only the Head of the unit possesses this qualification.

Provincial Internal Audit Services has made contributions to the directing and co-ordinating in the following areas for the year:

• Chief Audit Executive Forums has been facilitated so that knowledge sharing and best practices can beenhanced

• AuditCommitteeChairpersonsForumshavebeenfacilitatedtoensurethatthereisaplatformforChairpersonsof Audit Committees to share best practices and also for Provincial Internal Audit Services to share new developments within the public sector with the chairpersons.

• ThereexistsanationalshortageofCertifiedInternalAuditors(CIA).Provincial InternalAuditresponsetotheshortage was to start the Internal Audit Technician course so as to ensure the increase in CIA’s.

• QualityAssuranceReviews(QAR)isakeymechanismtodeterminethelevelofmaturityandfunctioningoftheinternal audit units. The institute of Internal Auditors was commissioned to perform QAR’s. The next step would then be for Provincial Internal Audit to assist departments in the areas that have been identified as weaknesses. This will be an ongoing process.

• Towardsthefightagainstcorruption,manyworkshopswereconductedatdepartmentstoincreasetheawarenessof anti-corruption.



Programme Name: Financial Governance




Actual Achievement

(2013/14)



2013/14

Comments on

Deviation

1

Provide technical guidance and training towards the implementation financial management reforms in the Province.

0 1430 1536 106

There was more demand on in-house trainings during the secondquarter;wehad more requests from Departments for these sessions.

2Ensure the achievement of credible financial reporting and accounting.

0 67 67 0

3 Ensure effective assessment and management of risks 0 104 170 66

There was a high unplanned demand from departments & municipalities for training & workshops particularly in the second quarter hence the variance.

4Ensure adequate and effective Internal Audit and Governance practices in the Province.

0 286 329 43

The variance was due to more demand for the training/ workshops than anticipated.





Actual achievement

(2013/14)



2013/14


SUB-PROGRAMME 4.1 : ACCOUNTING SERVICES

1

Number of officials trained in Financial Management in line with the approved Training Plan.

1585 1400 1506 106

There was more demand on in-house trainings in the second quarter, we had more requests from Departments for these sessions.

2Provincial AFS consolidated and submitted to A-G.

1 1 1 0

3Number of Interim Financial Statements reviewed and feedback prepared.

- 26 26 0

4

Provincial Audit Improvement Plan developed and Quarterly report on its implementation prepared.

- 3 3 0

SUB-PROGRAMME 4.2 : NORMS AND STANDARDS

1Report on implementation of capacity study in 3 departments.

- 1 1 0

2

Facilitation of the FMCMM survey in all departments and analysis reports issued to guide support towards level 3 status.

- 13 13 0





Actual achievement

(2013/14)



2013/14


3

Quarterly brief reports to MEC’s on Financial Management performance of each department.

- 52 52 0

4Report on facilitation of SCOPA resolutions.

- 1 1 0

SUB-PROGRAMME 4.3 : RISK MANAGEMENT

1Number of officials work shopped on Risk Management.

- 52 118 66

There was a high unplanned demand from departments & municipalities for training & workshops particularly in the second quarter hence the variance.

2Number of risk registers assessed.

13 52 52 0

SUB-PROGRAMME 4.4 : PROVINCIAL INTERNAL AUDIT SERVICES

1.Consolidated report on the Internal Audit recommendations.

- 4 4 0

2.Number of Audit committee assessment reports finalized.

13 13 13 0

3.Number of Quality Assurance Reviews conducted.

4 5 5 0

4.Number of officials trained in internal audit/internal control training courses

200 250 291 41

The variance was due to more demand for the training in the first and fourth quarter.

5.1.

Number of workshops conducted in the following areas: •IT

- 2 2 0

5.2. •Fraud. 9 2 4 2

There were departmental requests, hence the variance.

5.3. •PredeterminedObjectives. - 2 2 0

6.1.

Number of specialized internal audits facilitated: •IT

- 2 2 0

6.2. •Fraud - 6 6 0


There are no areas of underperformance and therefore the additional strategies will be made to translate performance to realise outcomes. TIAS has achieved all of its targets only in the last quarter and future plans will be to ensure that targets are met within the timeframes prescribed in the plans.


There were no changes to planned targets



The programme under spent its budget by R4, 079 million from an adjusted budget of R56, 698 million. The under spending in compensation of employees is attributable to staff exiting the system. This mainly pertains to contract terminations in respect of the Technical Support Unit (TSU) personnel, some of which were permanently employed by other provincial department.

Under spending in goods and services is mainly due to the cancellation of Bid Committee courses and Audit Process of External Audit (APEA) training. This has affected consultancy fees, travel and subsistence and catering expenditure.

A portion of savings in Programme 4 was utilised to write off long outstanding debts that were irrecoverable


2013/2014 2012/2013

PROGRAMME 4

Final Appropriation

Actual Expenditure


Final Appropriation

Actual Expenditure


(R’000) (R’000) (R’000) (R’000) (R’000) (R’000)

Programme Support

28 491 25 641 2 850 25 195 25 172 23

Accounting Services

13 030 12 742 288 13 219 12 678 541

Norms and Standards

6 457 6 338 119 6 378 6 358 20

Risk Management 2 552 2 306 246 2 735 2 729 6

Provincial Internal Audit Services

6 168 5 592 576 5 865 5 779 86

Programme Total 56 698 52 619 4 079 53 392 52 716 676


2.5. Transfer payments2.5.1. Transfer payments to Public Entities

There were no transfer payments to public entities in the year under review.

2.5.2. Transfer payments to all organisations other than public entities

Transfer payments consist of television licence payments to South African Broadcasting Corporation (SABC), skills development levy to Finance and Accounting Services Sector Education and Training Authority (FASSET) and Public Service Sector Education and Training (PSETA), payments in respect of leave gratuities to employees exiting the government service and bursaries paid to tertiary institutions for external bursary recipients.

The table below reflects the transfer payments made for the period 1 April 2013 to 31 March 2014.

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

SABC Departmental Agency Television Licencing n/a 2 n/a n/a

FASSET Departmental AgencySkills Development Levy

n/a 637 n/a n/a

PSETA Departmental AgencySkills Development Levy

n/a 113 n/a n/a

Ex-employees Households Leave Gratuity n/a 2,867 n/a n/a

Tertiary Institutions HouseholdsBursaries – Non-employees

n/a 260 n/a n/a

2.6. CONDITIONAL GRANTSThere were no conditional grants for the department in the 2013/14 financial year.

2.7. DONOR FUNDSThere were no donor funds for the department in the 2013/14 financial year.

2.8. CAPITAL INVESTMENT2.8.1. Capital investment, maintenance and asset management plan

For the year under review the department procured movable assets to the tune of R10, 8 million. The R10, 8 million includes the Unified Communication System to the value R8 million.


3. PART C: GOVERNANCE 3.1. INTRODUCTION

The department committed to maintain the highest standards of governance and it is from this backdrop that compliance to the Public Finance Management Act, Act 1 of 1999 and its treasury instructions were complied with.

It is imperative to note that during the 2013/2014 financial year the department strengthened the governance structures such as the Audit Committee, Risk Management Committee, Bid Committees and strategic management committees so as to enhance accountability and internal control systems which ensure that public finances and resources are effectively, efficiently, economically and transparently utilized for the benefit of the public.

3.2. RISK MANAGEMENT

• Aspartofembeddinggoodgovernancethedepartmenthashadriskmanagementpolicyandstrategyapprovedand endorsed by the Risk Management Committee for implementation.

• Inensuringthatsystemsofriskmanagementareeffectiveandthatinternalcontrolsareinplace,thedepartmentconducted during the financial year 2013/2014 strategic, operational, project and emerging risk identification and assessments in order to give reasonable assurance that objective will be met.

• Aspartofstrengtheninggoodgovernanceandaccountabilitythedepartmentduringthefinancialyear2013/2014established a Risk Management Committee to oversee and advise management on the effectiveness of risk management systems.

• OverandabovetheestablishmentoftheRiskManagementCommitteewhichhashadanindependentchairpersonthat reported to the Audit Committee, the Audit Committee on a quarterly basis reviewed and advised the department on the risk management effectiveness and monitored the mitigation of high level risks.

• Thedepartmentinitscommitmenttoeffectivelyandefficientlymanageriskshasobservedimprovementonthedepartmental performance from quarter to quarter and this is attributed to the fact that risk is part of planning, monitoring and evaluation in the department.

3.3. FRAUD AND CORRUPTION

• Inensuringthatthedepartmentmanagedfraudandcorruptionafraudpreventionpolicyandplanwasapprovedand progress on the implementation was monitored effectively.

• Reportingmechanismswereput inplace to report fraudandcorruption through thenational anti-corruptionhotline, office of the Head of Department, Office of the Public Protector and the Office of the Auditor General. Members of the public and the employees of the department were encouraged to anonymously report fraud and corruption as the department has zero tolerance stance.

• All fraudandcorruptionrelatedmatterswerereported through thenationalanti-fraudandcorruptionhotline,Head of Department, Office of the Public Protector and the Auditor General of South Africa. If there were cases, the department conducted a preliminary assessment and investigation.

3.4. MINIMISING CONFLICT OF INTEREST

• Thedepartmenthasestablishedeffectivereportingmechanismontheconflictofinterest,suchmechanismisthemaster list of all senior management of the department, supply chain management practitioners and all strategic departmental committee members.

• Ontheotherhand,biddersarealsorequiredtocompleteadeclarationofinterestform,ECBD4toindicateastowhether the bidder or any person connected with the bidder is employed by the state.

• Duringthefinancialyearaprogressivemovebythedepartmentofpublicserviceandadministrationintroducedan electronic system which enables senior management to submit all their financial interest in order to tract and monitor any conflict of interest. Where conflict of interest is identified a preliminary assessment is conducted and the outcome reported to the Head of Department.


3.5. CODE OF CONDUCT

The department has adopted the Code of Conduct for the Public Service that has been issued by the Public Service Commission as its own code of conduct. Employees have been made aware of this fact. Employees have access to an electronic version of the Code of Conduct. Workshops have been held in order to ensure common understanding of the contents of the code.

3.6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES

The department has an active Safety Health and Environment Committee that considers and makes recommendations to Management on all matters relating to employee safety, occupational health and environment. Representatives of management and employees are represented in the committee. The department’s Safety Health and Environment Policy was revised during the year and was approved for implementation.

3.7. PORTFOLIO COMMITTEES

Date Matters Raised Resolution

23 April 2013

The department must come up with better strategies of attracting candidates with requisite financial management experience in municipalities.

The PPT constantly encouraged municipalities to ensure that they promote sound financial management principles and provide a conducive working environment and reasonable remuneration to attract and retain critical members of staff who meet the required levels of skills and competencies.

The PPT must take further steps in ensuring that the departments of Roads and Public Works, Local Government and Traditional Affairs, Education, Health, Social Development, Human Settlements and Rural Development and Agrarian Reform respond to the management letters sent to them regarding the implementation of the recommendations following site visits conducted and that all the recommendations are actually implemented.

Follow up was done with the respective departments on the responses to the site visit findings. Furthermore the PPT escalated the matter through the third quarter feedback letters to the Accounting Officers as well as the accountability letters to the respective Executive Authorities.

Departments must ensure that mandates of public entities are aligned with the mandates of the departments.

The PPT reviewed the mandates of the entities to ensure alignment with those of mother departments.

The PPT must take the necessary measures to ensure that all departments comply with the rolling out and use of the LOGIS system, and special attention must be given to the Department of Health.

A Director: Financial Information Systems was appointed. LOGIS Implementers were appointed and deployed to assist the DoH, the DoE, and the PPT with the LOGIS Assets Module implementation. Additional resources have been deployed at the OR Tambo region of the DoH in the short term to assist with addressing backlogs in the region. A Provincial LOGIS Policy has been developed and approved. 21 LOGIS specialists from throughout the Province were provided with accredited LOGIS implementation training. LOGIS is operating in 11 of the 14 Departments in the Eastern Cape.

The Department should ensure that the financial management capability levels of the departments are improved.

Financial Management maturity is affected by a number of variables, including the issue of human resource capacity, management attitude or culture in designing and implementing internal controls and stability in leadership. The success of Provincial Treasury efforts, in particular the Financial Management Capacity Study and the Accountability Model are therefore to be seen within the medium term view.

The Department should ensure that it spends up to the maximum.

The Budget Advisor Committee was used to monitor expenditure and translate lessons to the next planning cycle to ensure that allocations are sensitive to the capacity of the department, including clarity of assumptions informing the funding of specific projects.



23 July 2013 The Planning Commission must ensure that it deploys employees across all departments, in order to put emphasis on the implementation of the plans of the Planning Commission.

The Planning Commission acquired the services of the Technical Assistance Unit (TAU) from National Treasury to assist with determining what the institutional arrangements of the Planning Commission should be in the implementation and monitoring & evaluation stages. Capacity issues were also resolved through an SLA with ECSECC.

The PPT must focus on ensuring the credibility of the procurement plans as well as ensuring that infrastructure expenditure is accelerated early enough in the financial year.

In order to improve the provincial infrastructure delivery cycle, PPT has initiated measures to improve the infrastructure value chain process. This includes the development of the frameworks / plans which have been issued as an Infrastructure circular in the 2013/14 financial year in line with the Infrastructure Delivery Management System (IDMS) which has also been legislated in the 2013/14 financial year. In order to ensure that the infrastructure funds are ready to be implemented at the beginning of the financial year, processes that indicate that infrastructure funds will only be allocated to departments based on the successful bidding for funds (two years in advance) by the Infrastructure departments as required by the IDMS standards, were put in place for the Infrastructure bidding processes. In this regard, active and approved projects will be exempt from the bidding processes as these are continuing and committed projects, whilst the proposed and potential projects will be required to go through the bidding process.

PPT has also initiated the intergovernmental relations whereby the department of local government has included in infrastructure reporting requirements including the integration of IDPs with sector department plans.

Furthermore the implementation of the procurement strategy in line with Treasury Regulation 16B is promoting the packaging of infrastructure project to obtain economies of scale whilst ensuring that basic services and other features (such as access roads/ bridges etc.) are available to take the project to full functionality.



The Department must enforce controls regarding asset management, and these controls must be adopted and implemented by other departments.

The PPT developed an assessment tool based on key functional areas of asset management (i.e. asset register, reconciliations, loss control) and the Financial Management Capability Maturity Model of the National Treasury to conduct quarterly assessments on maturity of the department in the implementation of controls. All the recommendations made by the Auditor General in the previous financial year (2011/12 audit reports) were taken into account in the preparation of the work plan of the Asset Management Unit with view to clear audit issues relating to controls. Quarterly letters were issued to Accounting Officers highlighting departmental progress on asset management and drawing attention to matters of importance along with recommended corrective actions (including the support provided or available from Treasury). There were also be quarterly engagements with the Chief Financial Officers to discuss progress made on the monitoring and support activities of the PPT to departments. There were also quarterly engagements with the Chief Financial Officers to discuss progress made on the Financial Management Capability Maturity Model implementation which incorporates asset management matters.

Provincial Planning and Treasury must enforce tighter controls in all departments regarding supply chain processes

A contract management strategy was developed and the departments were sensitised on it. The SCMO has started by sensitising Departments in the first Quarter. A questionnaire was developed on current contract management status and the responses were analysed to develop a report on current status. The CFO and SCM forums were capacitated through a workshop. An intervention plan was developed and its implementation was monitored. A Transversal Contract Strategy which entails the centralisation of supplier creation, the authorisation of bank details and centralising system control functions at the treasury was implemented. The SCMO continues to host training workshops across the province. A detailed report on centralisation of LOGIS Supplier Registrations and System Control has been submitted to the CBC.

3.8. SCOPA RESOLUTIONS

Provincial Planning and Treasury did not appear to SCOPA as it obtained a clean audit report from the Auditor General of South Africa (AGSA)

3.9. PRIOR MODIFICATIONS TO AUDIT REPORTS

The department in its commitment to good governance and accountability responded to all matters reported by the Auditor General of South Africa (AGSA) by putting in place mechanisms such as audit intervention plan.

All matters which were reported to the department were responded too and were partially cleared from the list of matters raised by the AGSA. Three lines of defence were involved in responding positively to the AGSA matters and that was management of the department, risk management and internal control unit and the internal audit unit which verified the completeness of the work performed.

3.10. INTERNAL CONTROL UNIT

• Thedepartmentinitsendeavourtoensureeffectiveinternalcontrolsystemshasdedicatedpre-auditresourcesto validate all departmental transactional activities in order to have valid, accurate, complete and timely financial reporting data.

• The pre-audit function looked at the auditability of journals, S&Ts, personnel pay-outs and compliance with


SCM policies, PFMA, Provincial Planning and Treasury Instructions and Human Resource regulations and prescripts.

3.11. INTERNAL AUDIT AND AUDIT COMMITTEESINTERNAL AUDIT

The overall strategy is to ensure an Internal Audit function that can meet stakeholder requirements. The following apply:

• An InternalAuditUnitoperatingon theprinciplesofanobjectiveand independentassuranceandconsultingactivity focussing on high risk business practices.

• Adequateresource(staff,hardware,software,funding).

• EnsurerelevantmethodologiesandworkpracticestosupporttheachievementofUnitandStakeholderobjectives.Aspects include the following:

o Human Resources (skills, professionalism, empowerment and team building).

o Internal Audit tools (hardware, software, and other tools).

o Administrative practices and methodologies.

o Marketing of the Internal Audit function both internally and externally.

o Conformance with the International Professional Practices Framework (IPPF) of the Institute of Internal Auditors and any other professional practices e.g. CFE.

o Adherence to statutory and all other profession related requirements e.g. PFMA, Treasury regulations, King 3, Companies Act,

The scope of work of the Internal Audit (IAA) is to determine whether the departmental network of risk management, control, and governance processes, as designed and represented by management is adequate and functioning in a manner to ensure that:

• Risksareappropriatelyidentifiedandmanaged;

• Interactionwiththevariousgovernancesectionsoccursasrequired;

• Significantfinancial,managerial,andoperatinginformationisaccurate,reliableandtimely;

• Compliancetoapplicablepolicies,procedures,lawsandregulationsisenforced;

• Resourcesareacquiredeconomically,utilisedefficiently,andadequatelysafeguarded;

• QualityandcontinuousimprovementisfosteredinDepartmentalcontrolprocesses;and

• Pro-activemeasuresaretakentorecogniseandproperlyaddressregulatoryandlegislativeissueswhichmayimpact the Department.

The type of audit work performed is based on assurance and consulting reviews whose nature is briefly presented below.

• AssuranceservicesrecognizestheIAAstaffmembers’objectiveevaluationofevidencetoprovideanindependentopinion/conclusion about the department, its operations, functions, processes, systems or other relevant disciplines. The nature and scope of the assurance engagement are determined by the IAA function.

• Consultingservicesareadvisoryinnatureandaremostlyinresponsetospecificrequestsbytheengagementclients. The nature and scope of these are subject to agreement with the clients. Consulting services focuses on problem-solving activity to add value to operating management.

AUDIT COMMITTEE

• TheAuditCommitteeisanindependentgovernancestructurewhosefunctionistoprovideanoversightroleonthe financial reporting process, audit process, process for monitoring compliance with laws and regulations and code of conduct, system of internal control, risk management, and governance.

• Governanceentailshowanorganizationismanaged,whichincludesculture,policiesandstrategiesandthewayit deals with stakeholders.


• The AC was established in terms of the Public Finance Management Act (PFMA Section 76) andTreasuryRegulations. The duties of the committee are broadly defined in Section 77 of the PFMA.

• TheAuditCommitteeisresponsibleforoversightofthedepartmentalsystemsofcontrol,governanceandriskmanagement.

• Furthermore, the Audit Committee provides the Accounting Officer / Executive Authority with independentcounsel, advice and direction in respect of risk management. The stakeholders rely on the Audit Committee for an independent and objective view of the departmental risk management effectiveness.

• InformationonthemembersoftheAuditCommitteeandnumberofmeetingsheldduringthereportingperiodispresented below:

Name QualificationsIf internal, position in the department

Date appointedDate Resigned

No. of meetings attended.

1. Mr. AP Wakaba: Chairperson

B. Compt Hons, MBA External member 13 June 2011 N/A 5

2. Ms. ND Siwahla-Madiba: Deputy Chairperson

B. Compt Hons. External member 13 June 2011 N/A 5

3. Ms. T NjozelaB. Compt Hons, CIA, CCSA, CRMA

External member 13 June 2011 N/A 5

4. Prof. G MayendeDoctor of Philosophy (PhD)

External member 13 June 2011 N/A 5


3.12. AUDIT COMMITTEE REPORT

We are pleased to present our report for the financial year ended 31 March 2014.

Audit Committee Responsibility

The Audit Committee reports that it has complied with its responsibilities arising from Section 38 (1) (a) (ii) of the Public Finance Management Act and Treasury Regulation 3.1.13. The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with this charter and has discharged its responsibilities as contained therein.

The effectiveness of internal control

Our review of the findings of the Internal Audit work which was based on the risk assessments conducted in the department revealed certain weaknesses, which were then raised with the Department.

The following internal audit work was completed during the year under review:

• 2012/13Draftannualfinancialstatements;

• 2013/14Draftannualreport;

• Assetregistercertification;

• Financialmanagementcapabilitymaturitymodel(FMCMM);

• Quarterlykeyinternalcontrolsdashboard;

• Pre-determinedobjectivesandin-yearmonitoring;

• Managementperformanceassessmenttool(MPAT1.3);

• Contractmanagement;

• Transversalassetmanagement;

• HumanResourcemanagement

• ITinfrastructureandsystems;

• Interimfinancialstatements;

• Logiscentralisation;

• Financialinformationsystems;

• AGSAfollow-up;

• Internalauditfollow-up;and

• ICTgovernance.

The following were areas of concern:

Adequate controls are in place but generally the concerns can be summarised as follows:

• Gapsinperformanceinformationreportingmanagementoversight

• WeaknessesintheDepartmentalICTenvironment

• Compliancewithinternalpoliciesandproceduremanuals

• Capacityforeffectivetransversalfinancialgovernancemonitoring.

In-Year Management and Monthly/Quarterly reporting

The department reports on a monthly and quarterly basis to the Treasury as is required by the PFMA.

Evaluation of Financial Statements

We have reviewed the draft 2013/14 annual financial statements prepared by the department and have not identified any material shortcoming in the financial information reported.


Auditor General of South Africa report

We have reviewed the departmental implementation plan for audit issues raised in the previous fi nancial year and we are satisfi ed that the matters have been adequately resolved except for the following as at 31 March 2014:

• Latepaymentofinvoices;

• Inadequatemaintenanceofvehicles;

• LeavenotcapturedonPERSAL;and

• Leaveentitlementoverstated.

The Audit Committee concurs and accepts the conclusions of the Auditor-General on the Annual Financial Statements and is of the opinion that the Audited Annual Financial Statements be accepted and read together with the report of the Auditor-General.

Appreciation

The Committee expresses its sincere appreciation to the MEC, AGSA, HoD, Management and Internal Audit for their support and co-operation.

Ayanda WakabaChairperson of the Audit CommitteeEastern Cape Provincial Planning and Treasury Department 31 July 2014


4. PART D: HUMAN RESOURCE MANAGEMENTThe information contained in this part of the annual report has been prescribed by the Minister for the Public Service and Administration for all departments within the public sector service.

4.1. LEGISLATURE THAT GOVERN HR MANAGEMENT

The information provided in this part is prescribed by the Public Service Regulations (Chapter 1, Part III J.3 and J.4). In addition to the Public Service Regulations, 2001 (as amended on 30 July 2012), the following legislation governs Human Resource Management within the Public Service:

• OccupationalHealthandSafetyAct85of1993

To provide for the health and safety of persons at work and for the health and safety of persons in connection with the useofplantandmachinery;theprotectionofpersonsotherthanpersonsatworkagainsthazardstohealthandsafetyarisingoutoforinconnectionwiththeactivitiesofpersonsatwork;toestablishanadvisorycouncilforoccupationalhealthandsafety;andtoprovideformattersconnectedtherewith.

• PublicServiceAct1994,asamendedbyAct30of2007

To provide for the organisation and administration of the public service of the Republic, the regulation of the conditions of employment, terms of office, discipline, retirement and discharge of members of the public service, and matters connected therewith.

• LabourRelationsAct66of1995

To regulate the relationship between the employer and employees and to guide the employer in recognising and fulfilling its role in effecting labour peace and the democratisation of the workplace.

• BasicConditionsofEmploymentAct75of1997

To give effect to the right to fair labour practices referred to in section 23(1) of the Constitution by establishing and makingprovisionfortheregulationofbasicconditionsofemployment;andtherebytocomplywiththeobligationsoftheRepublicasamemberstateoftheInternationalLabourOrganisation;andtoprovideformattersconnectedtherewith.

• SkillsDevelopmentAct97of1998

To provide an institutional framework to devise and implement national, sector and workplace strategies to develop andimprovetheskillsoftheSouthAfricanworkforce;tointegratethosestrategieswithintheNationalQualificationsFrameworkcontemplatedintheSouthAfricanQualificationsAuthorityAct,1995;toprovideforIearnershipsthatleadtorecognisedoccupationalqualifications;toprovideforthefinancingofskillsdevelopmentbymeansofalevy-grantschemeandaNationalSkillsFund; toprovide forand regulateemploymentservices;and toprovide formattersconnected therewith.

• EmploymentEquityAct55of1998

To promote equality, eliminate unfair discrimination in employment and to ensure the implementation of employment equity measures to redress the effects of discrimination; to achieve a diverse and efficient workforce broadlyrepresentative of the demographics of the province.

• PublicFinanceManagementAct1of1999

Toregulatefinancialmanagementinthenationalgovernmentandprovincialgovernments;toensurethatallrevenue,expenditure,assetsandliabilitiesofthosegovernmentsaremanagedefficientlyandeffectively;toprovidefortheresponsibilitiesofpersonsentrustedwithfinancialmanagement inthosegovernments;andtoprovideformattersconnected therewith.

• SkillsDevelopmentLevyAct9of1999

To provide any public service employer in the national or provincial sphere of Government with exemption from paying


askillsdevelopmentlevy;andforexemptionfrommattersconnectedtherewith.

• PromotionofAccesstoInformationAct2of2000

To give effect to the constitutional right of access to any information held by the State and any information that is heldbyanotherpersonandthatisrequiredfortheexerciseorprotectionofanyrights;andtoprovideformattersconnected therewith.

• PromotionofAdministrativeJusticeAct(PAJA)of2000

To give effect to the right to administrative action that is lawful, reasonable and procedurally fair and to the right to written reasons for administrative action as contemplated in section 33 of the Constitution of the Republic of South Africa,1996;andtoprovideformattersincidentalthereto.

4.2. INTRODUCTION

4.2.1. The Value of Human Capital in the Department

Our people are the foremost contributors to the achievements of the Department and of the successes of the Eastern Cape Provincial Government. Service excellence depends on the wellbeing of our organisation and its people. Hence, we:

• Valuepeoplewhoactwithintegrity,andareengaged,caring,competent,accountableandresponsive;

• Seepeoplemanagementtobetheresponsibilityofeveryone;

• Groundthemanagementofourpeopleintheprinciplesofdignity,respect,transparencyandequity;

• Grow,develop,empowerandenableourpeopletoreachandusetheirfullpotential;and

• Embrace diversity and have a deep respect for one another's culture, individuality, language, values andbeliefs.

4.2.2. Overview of Human Resource Matters

With rapid changes in the business environment it is no surprise that organisations are looking at human resource as a unique asset that is capable of providing sustained advantages in terms of service delivery. HR service deliverables have become central in Provincial Planning and Treasury in promoting service delivery performance improvement.

Improving service delivery, especially services that have an impact on the lives of poor and marginalised people, remains a priority for the department. Like all public sector departments we are required to implement government’s strategic priorities, this therefore implies that the way in which we are structured as a department has an impact on how effectively we can deliver services to citizens. A well-organised machinery to respond to various government initiatives and drive the implementation of its priorities is essential.

It is for this reason that in the previous financial year Provincial Planning and Treasury looked critically at its organisational structure, assessing its effectiveness in delivering on its mandate and on the priorities set by government.

Towards the beginning of 2013 the Provincial Planning and Treasury department embarked on a restructuring initiative. The aim was to ensure that the department has:

• Aneffectiveorganisationalstructurethatwouldhelpitimplementitsstrategicplan.Ifthestructureisnotalignedwith the strategic plan of the department, it would not be possible for the department to achieve its objectives.

• Aneffectiveorganisationalstructurethatfacilitateseffectiveservicedelivery.

• Aneffectiveorganisationalstructurethatpromotesefficiencyandtheoptimalutilisationofresources.Howtheorganisation is structured influences how financial and human resources are allocated and used.

• Aneffectiveorganisationalstructure thatwouldhelpbooststaffmorale.Theway inwhich thedepartment isstructured will influence the morale, energy, and enthusiasm of the employees.

• An effective organisational structure that would assist in fostering the appropriate organisational culture fordelivering on the mandate of the department and its strategic priorities.


The better part of 2014 will be devoted to implementing the structure once it is approved by the Minister for Public Service and Administration. The key focus will be on ensuring that people are placed in positions that better match their qualifications and experience.

In cases where employees do not wish to be retained and reskilled or up-skilled, management may consider releasing them from service, taking into consideration skills which are both critical and scarce in the department.

Through the implementation of the above mentioned organisation alignment process the functional structure of the department has now been aligned with its strategic objectives, job descriptions have been updated to accurately reflect the actual content of jobs.

Competition for scarce talent, coupled with the difficulties experienced by the department in retaining critical skills, has led to an acknowledgement that as Provincial Planning and Treasury (PPT) we need to focus on training and re-training in order to build a calibre of staff that will match departmental expectations. This will be achieved by identifying individuals internally who have the potential to provide future organisational leadership,

During the course of the year the department has reviewed its Recruitment and Selection policy, placing more emphasis on the development, appointment and promotion of women within the organisation into senior management positions and in promoting from within, particularly at the lower levels, thus drastically improving the internal rate of hire. Not only has this boosted staff morale, but has also enabled the department to retain some of the critical skills it so desperately needs. Through the above process the department has also managed to reduce the vacancy rate from8%inthepreviousfinancialyearto5%.

Provincial Planning and Treasury has since realised that investing money today in developing leadership talent is less expensive in the long run than having to buy expensive talent from the outside. The department exposed a group of senior managers to an Executive Coaching Programme where they were assigned Coaches and were exposed to various kinds of development. Some executive managers received Executive Leadership Development at a Business School in Johannesburg and have also had the opportunity to go overseas on a study tour.

A skilled workforce, with diverse experience and backgrounds is critical in ensuring that the Provincial Planning and Treasury department delivers world class public services, now and in the future. The department wants to ensure that itattracts the richestmixof talentedpeople; that itencourages them tohavehighaspirationsandsupportsthem to reach positions of influence. Human Resource Planning aims to ensure that the Department has the right people, with the right skills, at the right place at the right time, all the time. Through its workforce planning, the Department identified the current and future human resource needs and flagged the potential challenges that could impact negatively on the achievement of the Department’s strategic objectives. As a result, the efforts of the Human Resource Development Unit have in the past year been focused on ensuring that departmental employees receive training and development on targeted job specific skills and competencies that will actually enable them to improve on the job performance.

The department has also through its Bursary and Internship Programme managed to create temporary jobs for 45 Interns, 17 of these have since been employed permanently in the public service. A Learnership programme on Public Sector Accounting at NQF level 5, where 10 employees (7 females & 3 males) are receiving training so that they have a formal qualification, is in progress and will be completed in the next financial year. A need to formalise, strengthen and structure a mentorship programme that will support Bursars and Interns has been identified and such a programme is being developed for implementation in the latter part of the current financial year. In addition to the above, during 2013 – 2014 financial year, the Head of Department nominated 4 Senior Managers (1 Acting DDG, 2 Chief Directors and 1 Director) to mentor 10 promising and talented female officials. This Mentorship programme is coordinated by the Office of the Premier.

Future Areas of Priority

Our key focus in PPT from the current financial year onwards is to accelerate staff development so that there is a match between supply and demand for human resources within the department. In other words, all training initiatives will be


demand led and will be based on identified training needs that will enhance the performance of the department. Most importantly the impact of training initiatives back in the workplace will also be assessed. Measuring the effectiveness of training and development is often an informal and unsophisticated practice, despite the large amounts of budget allocated to it. Without such information, budgetary decisions do not ensure an adequate return on the investment of training and development funds.

Providing purposeful and effective training programmes requires strong human resource capability with specialists who understand their role and how critical it is in ensuring service delivery to all. It is for this reason that funds have also been set aside to ensure that the competencies of HR staff are upgraded.

A diverse workforce, that fully reflects our increasingly diverse society, is essential to our capability at Provincial PlanningandTreasurytomeetthechallengesofthefuture;notleastbecauseweneedtheinnovationinthinkinganddelivery that diversity brings. Failure to make such investment could mean we lose people – the wrong people - and lose along with them much of the richness and diversity of our future talent.

Effective, systematic and inclusive talent management policies and processes are vital if the department is to attract, motivate and develop the right workforce – with a diversity of skills, experience and backgrounds - to enable us to deliver world class public services, now and in the future. Competition for the most skilled and educated individuals is continuing to increase, hence the need for a systematic and coordinated approach to developing and nurturing the next generation of talent in organisations.

Human Resource Strategic Objectives

The human resource strategic objectives that were prioritised in the Annual HR Plan for 2013/14 are summarised in the table below.

Table 4.2 Summary of Departmental Human Resource Objectives

Human Resource Objectives

1. Develop and implement recruitment and retention strategy

2. Develop, review and implement Human Resource Development strategy

3. Development and implementation of Employee Wellness, Health and Safety programs

4. Implement an effective and efficient individual PMDS

5. Develop and implement OD strategy and an effective organizational structure

6. Review and implement Employment Equity Plan

7. Ensure improved efficiency in employment relations management, operations and processes

8. Improve HR information management

The departmental human resource objectives for 2013/14 were implemented during the year under review as indicated below:

(1) Develop and implement Recruitment and Retentions strategy

ThedepartmenthasRecruitmentandRetentionpoliciesinplace;howevertheyneededtobereviewedtoensurethat they are aligned to the strategic direction of the department. During 2013/14 the Human Capital Recruitment Policy was reviewed to ensure there is focus on facilitating the employment of females at SMS level, the increase in the number of employees with disabilities, to improve the internal rate of hire and to retain critical skills within the department

(2) Develop and Implement a Human Resource Development strategy

The department identified training needs for departmental employees. Employees are trained in line with these needs in order to deliver as per the departmental mandate. Bursaries and learnership programs are also offered to ensure


that skills gaps are addressed.

During April 2013 to date the department provided skills development opportunities or training and development programmes to two hundred and thirty two (232) staff members. These skills interventions included both the NQF aligned training programme and Non-NQF aligned training interventions.

(3) Develop and implement Employee Wellness, Health and safety programmes

Health awareness information sessions and workshops were conducted at Head Office and in the District Offices. A service provider to render employee counselling service has been also contracted by the department. The intention is to provide employees and their immediate family members’ access to a 24 hour counselling service. This program was launched on 19 September 2013.

Policy development, which is intended to enable alignment of the responsiveness of the department to the national Employee Health and Wellness strategy, has been finalized. Policies which will guide the work of the Employee Health and Wellness in relation to its four strategic pillars, namely, (i) HIV and AIDS and TB Management, (ii) Health and Productivity Management, (iii) Safety Health, Environmental Risk and Quality Management and (iv) Employee Wellness Management will be in place for the implementation in the first quarter of 2014/2015.

(4) Implement an effective and efficient individual Performance Management Development System.

The department has developed a user friendly performance assessment template for utilization by departmental employees. The PMDS unit has been strengthened to ensure that support is offered to departmental employees. PMDS workshops are held in the districts and at head office to assist employees on PMDS implementation and ensure compliance. A year plan has been developed to ensure adherence to the deadlines.

The departmental PMDS Policy was approved and its implementation has commenced. The policy is aligned to the provincial policy that was approved by the Executive Council. Programme and Departmental Moderation Committee were appointed and are functional. Efforts are currently in progress to review human resource capacity in the function responsible for administration and monitoring PMDS related priorities. This function is currently located in the Human Resource Development directorate

(5) Develop and implement an OD strategy and an effective organizational structure and design and implement effective and efficient business processes to improve departmental performance

National Treasury and DPSA developed a generic organisational structure for Provincial Treasuries to ensure uniformity in all provinces. The department has developed a new organizational structure that is aligned to DPSA and National Treasury’s generic models. This proposed structure has been submitted to DPSA for validation. The department appointed a service provider to assist in the review and development of job descriptions that are going to be in line with the proposed structure. Furthermore an Executive Coaching Programme has been introduced to capacitate all SMS members

(6) Review and implement employment equity plan

The Employment Equity Plan was developed and approved during the year under review to ensure alignment with to the departmental structure and census results. An Employment Equity Policy was also reviewed and approved lastyear.Themajorityofdepartmentalemployeesarefemalesandthegenderscaleisat60%withthepublicsectortargetbeing51%,oftheestablishment.Althoughthisreflectsanoverachievementofthepredefinednationaltargets,femalerepresentationatSMSlevel isstill laggingbehind.ThecurrentfemalerepresentationatSMSlevel is40%attheendofMarch2014,whichisbelowthe50%nationaltarget,whereasthemaleSMSisat60%.CurrentlytheSMS gender huge misrepresentation is at level 13, with 32 males and 19 females. The department has embarked on enrolling females at middle management level on Management Development programs. Females at SMS level have also been exposed to Executive Development Program. Departmental employees with potential shall be considered for promotional opportunities before external females can be considered. The department has also recently reviewed and adopted its Human Capital Recruitment Policy which also targets the recruitment of females to SMS posts. In terms of this policy any deviations to the targeted gender has to be explained and motivated to the executive authority of the department.


(7) Ensure improved efficiency in employment relations management, operations and processes

The department is in the process of organizing workshops to capacitate management with regard to labor relations processes. A Labor Relations Protocol was developed and signed by the HOD and Representatives of Organized Labor to regulate meetings and working relationships between Management and Organized Labor.

Regular meetings between members of Executive Management of the department and representatives of trade unions that are active in the department and admitted to the GPSSBC and/or PSCBC are taking place. The intention is to facilitate consultation and regularize communication between management and the organized sections of the workforce.

Capacity building in relation to employment relations processes is continuing. Workshops on employment relations processes were conducted and these specifically targeted middle management. A total of 72 middle managers participated in five (5) of these workshops. These will continue in the New Year and the target market will include members of the senior management service. Also, two (2) employment relations personnel attended the Annual Labour Law Update Seminar and three (3) attended training on Misconduct Investigations and Report Writing.

A total of internal disputes, including grievances that arose were all finalized. Two (2) of these were later referred to the Public Service Commission. One (1) has been decided in favour of the department while the recommendations in respect of the other one are still pending.

A total of twelve (12) employees at all levels were subjected to disciplinary action. The majority of acts of misconduct related to either absenteeism, that is, six incidences involving four employees, or refusal to obey a lawful instruction, that is six incidences involving six employees. All the incidences relating to absenteeism have resulted in final written warnings. One case relating to failure or refusal to obey a lawful instruction has resulted in a dismissal, four (4) have resulted in final written warnings and one (1) in a written warning

(8) Improve HR Information Management

As part of ensuring that the department has reliable information on its personnel and salary system quarterly reports were drawn from PERSAL and analyzed for management. Errors that were identified were rectified. Ongoing PERSAL monitoring and oversight is being done to ensure data integrity and PERSAL analysis reports are submitted to Management and the Office of the Premier on a quarterly basis.


4.3. HUMAN RESOURCE OVERSIGHT STATISTICS4.3.1. Expenditure

Departments budget in terms of clearly defined programmes. The following tables summarise final audited expenditure by programme (Table 4.3.1.1) and by salary bands (Table 4.3.1.2). In particular, they provide an indication of the amount spent on personnel costs in terms of each of the programmes or salary bands within the department.

Table 4.3.1.1 – Personnel costs by programme, 2013/14

Programme

Total Expenditure

Personnel Expenditure

Training Expenditure

Professional and Special

Services

Personnel cost as a % of total expenditure

Average personnel cost per employee

(R’000) (R’000) (R’000) (R’000) (%) (R’000)

Administration 155 292 90 226 2,192 12 939 58.1 167

Sustainable Resource Management

72 879 68 604 - - 94.1 127

Asset and Liability Management 58 329 44 434 - 705 76.2 83

Financial Governance 52 619 46 779 - 3,020 88.9 87

Total 339 119 250 043 2 192 16 664 73.7 464

Table 4.3.1.2 – Personnel costs by salary bands, 2013/14

Salary bands Personnel Expenditure (R’000) % of total personnel cost Average personnel cost

per employee

Skilled (Levels 3-5) 4 608 1.8 184 320

Highly skilled production (Levels 6-8) 37 871 14.8 284 744

Highly skilled supervision (Levels 9-12) 109 519 42.7 504 696

Senior management (Levels 13-16) 46 145 18.0 870 660

Contract (Levels 3-5) 173 0.1 173 000

Contract (Levels 6-8) 17 630 6.9 263 134

Contract (Levels 9-12) 8 037 3.1 472 765

Contract (Levels 13-16) 25 160 9.8 967 692

Periodical Remuneration 900 0.4 33 333

Total 250 043 97.5 441 772

The averages in the table above are based on the employee in table 4.3.4.1

The following tables provide a summary per programme (Table 4.3.1.3) and salary bands (Table 4.3.1.4), of expenditure incurred as a result of salaries, overtime, home owners allowance and medical assistance. In each case, the table provides an indication of the percentage of the personnel budget that was used for these items.


Table 4.3.1.3 – Salaries, Overtime, Home Owners Allowance and Medical Assistance by programme, 2013/14

Programme

Salaries Overtime Home Owners Allowance Medical Assistance

Amount

Salaries as a % of personnel

cost

Amount

Overtime as a

% of personnel

cost

Amount

HOA as a % of

personnel cost

Amount

Medical Assistance as a % of personnel

cost

(R’000) % (R’000) % (R’000) % (R’000) %

P1: Administration 80 189 87.7 51 0.1 1 794 2 2 756 3.0

P2: Sustainable Resource Management

61 445 87.0 - - 1 460 2.1 1 545 2.2

P3: Asset and Liability Management

39 496 85.4 - - 727 1.6 1 311 2.8

P4: Financial Governance 42 963 89.1 - - 1 145 2.4 860 1.8

TOTAL 224 093 87.4 51 - 5 126 2.1 6 472 2.5

Table 4.3.1.4 – Salaries, Overtime, Home Owners Allowance and Medical Assistance by salary bands, 2013/14

Salary Bands

Salaries Overtime Home Owners Allowance Medical Assistance

Amount

Salaries as a % of personnel

cost

Amount

Overtime as a % of personnel

cost

Amount HOA as a % of

personnel cost

AmountMedical

Assistance as a % of personnel

cost

(R’000) % (R’000) % (R’000) % (R’000) %

Skilled (Levels 3-5) 3 081 66.8 - - 263 5.7 315 6.8

Highly skilled production (Levels 6-8)

27 575 72.7 17 - 1 369 3.6 2 072 5.5

Highly skilled supervision (Levels 9-12)

105 040 94.9 34 - 1 844 1.7 3 061 2.8

Senior management (Levels 13-16)

37 770 80.2 - - 969 2.1 771 1.6

Contract (Levels 3-5)

160 92.5 - - - - - -


17 438 98.2 - - - - - -


7 043 84.4 - - 63 0.8 109 1.3


25 986 89.6 - - 618 2.1 144 0.5

Total 224 093 87.4 51 - 5 126 2.0 6 472 2.5

4.3.2. 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 (Table 4.3.2.1), salary band (Table 4.3.2.2) and critical occupations (Table 4.3.2.3). The departments have identified critical occupations that need to be monitored.

Table 4.3.2.1 provides establishment and vacancy information for the key critical occupations of the department. The vacancy rate reflects the percentage of posts that are not filled.


Table 4.3.2.1 – Employment and vacancies by programme, 31 March 2014

Programme Number of posts Number of posts filled Vacancy Rate (%)

Number of posts filled additional to the establishment

P1: Administration 182 172 5 45

P2: Sustainable Resource Management 125 120 4 15

P3: Asset and Liability Management 89 83 7 25

P4: Financial Governance 59 59 - 20

Total 455 434 5 105

Table 4.3.2.2 – Employment and vacancies by salary bands, 31 March 2014

Salary band Number of posts Number of posts filled Vacancy Rate


Skilled (Levels 3-5) 25 25 - -

Highly skilled production (Levels 6-8) 149 140 6 -

Highly skilled supervision (Levels 9-12) 223 216 3.1 1

Senior management (Levels 13-16) 58 53 8.6 -

Total 455 434 5 105

The above table reflects the number of posts that were funded in the approved organogram of the department. The posts filled additional to the establishment are posts that are on contract and do not form part of the vacancy rate in the department.

Table 4.3.2.3 – Employment and vacancies by critical occupation, 31 March 2014

Critical occupations Number of posts Number of posts filled Vacancy Rate


Administrative related 74 72 1.2 8

Cleaners in offices workshops hospitals etc. 1 1 - -

Client inform clerks(switchboard receipt inform clerks)

1 1 - -

Communication and information related 2 1 - -

Executive Authority 1 1 - -

Finance and economics related 88 85 1 35

Financial and related professionals 112 109 1 15

Financial clerks and credit controllers 1 1 - -

Food services aids and waiters 2 2 - -

General legal administration & rel. professionals

1 1 - -

Head of department/chief executive officer 1 1 - -

Human resources related 33 31 0.1 20

Information technology related 19 17 0.1 6


Critical occupations Number of posts Number of posts filled Vacancy Rate


Light vehicle drivers 4 4 - -

Logistical support personnel, 11 10 - -

Secretaries & other keyboard operating clerks

46 44 1 -

Senior managers 58 53 1 21

TOTAL 455 434 5 105

The above table reflects the filled and vacant posts in line with the approved organisational structure. The additional positions do not form part of the approved structure as they have limited time-frames of employment.

4.3.3. Filling of SMS PostsTable 4.3.3.1 - SMS posts information as on 31 March 2014

SMS LevelTotal Number of Funded SMS Posts Per Level

Total Number of SMS Filled Members Per Level

% of SMS Posts Filled Per Level

Total Number of SMS posts Vacant per Level

% of SMS Posts Vacant Per Level

Director-General/ Head of Department

1 1 100 - -

Salary Level 15 4 3 75 1 25

Salary Level 14 14 13 93 1 7

Salary Level 13 42 37 88 5 12

Total 61 54 89 7 12

Table 4.3.3.2 – Advertising and Filling of SMS posts information as on 31 March 2014

SMS Level

Advertising Filling of Posts

Number of Vacancies Per Level Advertised in 6 Months of Becoming Vacant

Number of Vacancies Per Level Filled in 6 Months of Becoming Vacant

Number of Vacancies Per Level not Filled in 6 Months of Becoming Vacant

Director-General/ Head of Department - - -

Salary Level 15 - - -



Total - - -

There were no SMS posts filled or advertised in 6 months of becoming vacant.


Table 4.3.3.3 – Reasons for not having complied with the filling of funded vacant SMS – Advertised within 6 months and filled within 12 months after becoming vacant

Reasons for vacancies not advertised within six (6) months:

1. The department did not advertise posts within six months of becoming vacant due to the moratorium that was placed on filling of vacancies. The reason for the placement of the moratorium on filling of vacancies was because of the restructuring process that the department embarked upon

Reasons for vacancies not filled within twelve (12) months

1. The department did not fill posts within six months of becoming vacant due to the moratorium placed on filling of posts as a result of the restructuring process that was embarked upon.

Table 4.9.4 – Disciplinary steps taken for not complying with the prescribed time frames for filling SMS posts within 12 months

1. None

4.3.4. Job evaluation

The Public Service Regulations, 1999 introduced job evaluation as a way of ensuring that work of equal value is remunerated equally. Within a nationally determined framework, executing authorities may evaluate or re-evaluate any job in his or her organisation. In terms of the Regulations all vacancies on salary levels 9 and higher must be evaluated before they are filled. This was complemented by a decision by the Minister for the Public Service and Administration that all SMS jobs must be evaluated before 31 December 2002.

The following table (Table 4.3.4.1) summarises the number of jobs that were evaluated during the year under review. The table also provides statistics on the number of posts that were upgraded or downgraded.

Table 4.3.4.1 – Job Evaluation, 1 April 2013 to 31 March 2014

Salary bandNumber of

posts

Number of Jobs

Evaluated

% of posts evaluated by salary

bands

Posts Upgraded Posts downgraded

Number% of posts evaluated

Number% of posts evaluated

Skilled (Levels 3-5), Permanent 25 26 104 26 104 - -

Highly skilled production (Levels 6-8), Permanent

149 - - - - - -

Highly skilled supervision (Levels 9-12), Permanent

223 - - - - - -

Senior Management Service Band A 39 - - - - - -

Senior Management Service Band B 14 - - - - - -

Senior Management Service Band C 4 - - - - - -

Senior Management Service Band D 1 - - - - - -

TOTAL 455 26 5.7 26 5.7 - -

There were no job evaluations conducted during the year under review due to restructuring process that was embarked upon by the department.

The following table provides a summary of the number of employees whose salary positions were upgraded due to their posts being upgraded. The number of employees might differ from the number of posts upgraded since not all employees are automatically absorbed into the new posts and some of the posts upgraded could also be vacant.


Table 4.3.4.2 – Profile of employees whose salary positions were upgraded due to their posts being upgraded, 1 April 2013 to 31 March 2014

Beneficiaries African Asian Coloured White Total

Female 13 - - - 13

Male 13 - - - 13

Total 26 - - - 26

Employees with a disability -

The following table summarises the number of cases where remuneration levels exceeded the grade determined by job evaluation. Reasons for the deviation are provided in each case.

Table 4.3.4.3 – Employees whose salary level exceed the grade determined by job evaluation, 1 April 2013 to 31 March 2014 (in terms of PSR 1.V.C.3)

Occupation Number of employees

Job evaluation level

Remuneration level Reason for deviation

Female - - - -

Male - - - -

Male - - - -

Total - - - -

Employees with a Disability - - - -

Total Number of Employees whose salaries exceeded the level determined by job evaluation in 2013/14

-

Percentage of total employment -

The department does not have employees whose salaries exceeded the level determined by job evaluation in 2013/14.

The following table (4.3.4.4) summarises the beneficiaries of the above in terms of race, gender, and disability.

Table 4.3.4.4 – Profile of employees whose salary level exceed the grade determined by job evaluation, 1 April 2013 to 31 March 2014 (in terms of PSR 1.V.C.3)

Beneficiaries African Asian Coloured White Total

Female - - - - -

Male - - - - -

Total - - - - -

Employees with a disability - - - - -

No employees whose salary level exceed the grade determined by job evaluation in 2013/14


4.3.5. Employment changes

This section provides information on changes in employment over the financial year. Turnover rates provide an indication of trends in the employment profile of the department. The following tables provide a summary of turnover rates by salary band (Table 4.3.5.1) and by critical occupations (Table 4.3.5.2) and by reason why staff leave the department. Table 4.3.5.3, Table 4.3.5.4 and 4.3.5.5 show promotion of staff by critical occupations and by critical occupations and by salary bands respectively.

Table 4.3.5.1 – Annual turnover rates by salary band for the period 1 April 2013 to 31 March 2014

Salary BandNumber of employees per band as on 1 April 2013

Appointments and transfers into the department

Terminations and transfers out of the department

Turnover rate

Skilled (Levels 3-5) 28 - 3 10.7

Highly skilled production (Levels 6-8) 139 4 10 7.2

Highly skilled supervision (Levels 9-12) 211 27 18 8.5

Senior Management Service Band A 33 6 5 15.2

Senior Management Service Band B 13 - - -

Senior Management Service Band C 3 1 1 33.3

Senior Management Service Band D 1 - - -

Contract (Levels 3-5) 1 - - -

Contract (Levels 6-8) 73 - 9 12.3

Contract (Levels 9-12) 14 6 4 28.6

Contract (Band A) 15 3 4 26.7

Contract (Band B) 9 2 7 77.8

Contract (Band C) 5 1 2 40

Contract (Band D) 1 - - -

TOTAL 546 50 63 11.5

The above table also incorporates employees who were transferred on promotion through the recruitment process from other departments. During the year under review the Transkei Development and Reserve Fund (TDRF) unit was transferred to the Department of Public Works due to the function shift. Also, the above appointments include employees who are employed on contractual basis.


Table 4.3.5.2 – Annual turnover rates by critical occupation for the period 1 April 2013 to 31 March 2014

Occupation

Number of employees per occupation as on 1 April 2013

Appointments and transfers into the department

Terminations and transfers out of the department

Turnover rate

Administrative related 68 2 5 7.4

All artisans in the building metal machinery etc. 1 - - -

Cleaners in offices workshops hospitals etc. 1 - 1 100

Client inform clerks(switchb receipt inform clerks) 1 - - -

Communication and information related 1 - - -

Executive Authority 1 - - -

Engineers and related professionals 1 - 1 100

Finance and economics related 84 11 6 7.1

Financial and related professionals 154 22 17 11

Financial clerks and credit controllers 7 - - -

Food services aids and waiters 2 - - -

General legal administration & rel. professionals 1 - - -

Head of department/chief executive officer 1 - - -

Human resources & organisat developm & relate prof

1 - - -

Human resources related, Permanent 68 5 13 19.1

Information technology related 14 1 - -

Light vehicle drivers, Permanent 4 - - -

Logistical support personnel 12 - - -

Secretaries & other keyboard operating clerks 44 - 1 2.3

Senior managers 80 9 19 23.8

TOTAL 546 50 63 11.5

The above table consists of total number of employees and those whose services were terminated due to various reasons and it includes transfers.


Table 4.3.5.3 – Reasons why staff is leaving the department

Termination Type Number % of Total

Death - -

Dismissal 1 1.6

Resignation 29 46.0

Contract expiry 6 9.5

Transfers 22 35.0

Retirement 5 7.9

Ill Health Retirement - -

Total 63 100

Total number of employees who left as a % of the total employment 11.5%

Many employees left the department through being attracted by better offers in other institutions. Some of the employees who left by means of resignations were contract employees who opted for permanent employment offered elsewhere.

Table 4.3.5.4 – Promotions by critical occupation

Occupation

Employment at Beginning of Period (April 2013)

Promotions to another salary level

Salary level promotions as a % of employees by occupation

Progressions to another notch within a salary level

Notch progressions as a % of employees by occupation

Administrative related 68 3 4.4 45 66.2

All artisans in the building metal machinery etc. 1 - - - -

Cleaners in offices workshops hospitals etc. 1 - - - -

Client inform clerks(switchb receipt inform clerks) 1 - - 1 100

Communication and information related 1 - - 1 100

Executive Authority 1 - - - -

Engineers and related professionals 1 - - - -

Finance and economics related 84 3 3.6 65 77.4

Financial and related professionals 154 13 8.4 114 74

Financial clerks and credit controllers 7 - - 1 14.3

Food services aids and waiters 2 - - - -

General legal administration & rel. professionals 1 - - 1 100

Head of department/chief executive officer 1 - - - -

Human resources & organisat developm & relate prof 1 - - - -

Human resources related 68 3 4.4 45 66.2

Information technology related 14 1 7.1 7 50

Light vehicle drivers 4 - - 2 50


Occupation

Employment at Beginning of Period (April 2013)


Salary level promotions as a % of employees by occupation


Notch progressions as a % of employees by occupation

Logistical support personnel 12 - - 8 66.7

Secretaries & other keyboard operating clerks, Permanent 44 - - 39 88.6

Senior managers 80 2 2.5 80 100

TOTAL 546 25 4.6 409 74.9

Table 4.3.5.5 – Promotions by salary band

Salary BandEmployees 1 April 2013


Salary bands promotions as a % of employees by salary level


Notch progressions as a % of employees by salary band

Skilled (Levels 3-5) 28 - - 4 14.3

Highly skilled production (Levels 6-8) 139 3 2.2 108 77.7

Highly skilled supervision (Levels 9-12) 211 18 8.5 169 80.1

Senior management (Levels 13-16) 50 2 4 55 110

Contract (Levels 3-5) 1 - - 1 100

Contract (Levels 6-8) 73 - - 44 60.3

Contract (Levels 9-12) 14 2 14.3 3 21.4

Contract (Levels 13-16) 30 - - 25 83.3

TOTAL 546 25 4.6 409 74.9

4.3.6. Employment equity

The tables in this section are based on the formats prescribed by the Employment Equity Act, 55 of 1998.

Table 4.3.6.1 – Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2014)

Occupation

Categories

(SASCO)

Male Female Grand

TotalAfrican Coloured Indian White Total African Coloured Indian White Total

Legislators, senior officials and managers

35 4 5 3 47 26 1 3 1 31 78

Professionals 107 6 2 2 117 201 4 2 4 211 328

Technicians and associate professionals

32 - - - 32 45 - - 3 48 80

Clerks 4 - - - 4 38 2 1 1 42 46

Plant and machine operators and assemblers

3 - - - 3 1 - - - 1 4

Elementary occupations - - - - - 3 - - - 3 3

TOTAL 181 10 7 5 203 314 7 6 9 336 539


Table 4.3.6.2 – Total number of employees (including employees with disabilities) in each of the following occupational bands as on 31 March 2014)

Occupational Bands

Male FemaleGrand

TotalAfrican Coloured Indian White

Total Males

African Coloured Indian WhiteTotal

Females

Top Management, Permanent

3 - - - 3 1 - - - 1 4

Senior Management, Permanent

24 4 3 2 33 11 1 3 1 16 49

Professionally qualified and experienced specialists and mid-management, Permanent

86 5 2 2 95 118 - 2 2 122 217

Skilled technical and academically qualified workers, junior management, supervisors, foremen, Permanent

26 - - - 26 98 2 1 6 107 133

Semi-skilled and discretionary decision making, Permanent

10 - - - 10 15 - - - 15 25

Contract (Top Management), Permanent

2 - - 1 3 2 - - - 2 5

Contract (Senior Management), Permanent

6 - 2 - 8 13 - - - 13 21

Contract (Professionally qualified), Permanent

5 1 - - 6 9 2 - - 11 17

Contract (Skilled technical), Permanent

19 - - - 19 46 2 - - 48 67

Contract (Semi-skilled), Permanent

- - - - - 1 - - - 1 1

TOTAL 181 10 7 5 203 314 7 6 9 336 539

Table 4.3.6.3 – Recruitment for the period 1 April 2013 to 31 March 2014

Occupational Bands

Male Female

TotalAfrican Coloured Indian White African Coloured Indian White

Senior Management 2 1 - 1 3 - 1 - 8

Professionally qualified and experienced specialists and mid-management

7 - 1 - 16 - 2 - 26

Skilled technical and academically qualified workers, junior management, supervisors, foremen, Permanent

2 - - - 2 - - - 4


Occupational Bands

Male Female


Contract (Top Management)

- - 1 - 2 - - - 3

Contract (Senior Management)

- - - - 3 - - - 3

Contract (Professionally qualified)

2 - - - 2 2 - - 6

Contract (Skilled technical) - - - - - - - - 0

TOTAL 13 1 2 1 28 2 3 - 50

The table above includes employees who were transferred on promotion to the department after the normal recruitment process.

Table 4.3.6.4 – Promotions for the period 1 April 2013 to 31 March 2014

Occupational BandsMale Female


Top Management, Permanent 1 - - - - - - - 1

Senior Management 1 - - 1 1 - - - 3


6 - 1 - 11 - 1 - 19

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

2 - - - - - - - 2

Semi-skilled and discretionary decision making

- - - - - - - - -

Contract (Top management - - - - - - - - -

Contract (Senior management), Permanent

- - - - - - - - -

Contract (Professionally qualified) permanent

- - - - - - - - -

Contract (Skilled technical) Permanent

- - - - - - - - -

Total 10 - 1 1 12 - 1 - 25

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


Table 4.3.6.5 – Terminations for the period 1 April 2013 to 31 March 2014

Occupational BandsMale Female


Top management - - - - 1 - - - 1

Senior Management 4 - - 1 2 - - - 7


7 - - - 15 - - - 22

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

8 - - - - 9 - - 17

Semi-skilled and discretionary decision making

4 - - - 1 - - - 5

Contract (Top management) 2 2 - 3 - - - 1 8

Contract (Senior Management) 2 1 - - - - - - 3

Contract (Professionally qualified), - - - - - - - - -

Contract (skilled, technical). Permanent

- - - - - - - - -

Contract (Semi skilled). - - - - - - - - -

Total 27 3 - 4 19 9 - 1 63

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

Table 4.3.6.6 – Disciplinary action for the period 1 April 2012 to 31 March 2013

Male Female

African Coloured Indian White African Coloured Indian White Total

Disciplinary action 6 1 - - 4 - - - 11

Table 4.3.6.7 – Skills development for the period 1 April 2013 to 31 March 2014

Occupation

Categories(SASCO)

Male Female Grand

TotalAfrican Coloured Indian White Total African Coloured Indian White Total

Legislators, senior officials and managers 21 2 4 1 28 16 - 1 2 19 47

Professionals 37 1 - 5 43 37 - - 1 38 81

Technicians and associate professionals, 32 1 - - 33 50 - - - 50 83

Clerks 24 - 1 - 25 111 1 1 - 113 138

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

Other - - - - - - - - - - -

Elementary occupations - - - - - - - - - - -

TOTAL 114 4 5 6 129 214 1 2 3 220 349

Employees with disabilities 2 - - - 2 1 - - - 1 3


4.3.7. Signing of Performance Agreements by SMS MembersTable 4.3.7.1– Signing of Performance Agreements by SMS Members as on 30 September 2013

SMS Level

Total Number of

Funded SMS Posts

Per Level

Total Number of SMS

Members Per Level

Total Number of

Signed Performance

Agreements Per Level

Signed Performance

Agreements as % of

Total Number of SMS

Members Per LevelDirector-General/ Head of Department 1 1 1 100.0

Salary Level 15 10 10 7 70.0

Salary Level 14 26 26 21 80.8

Salary Level 13 52 52 44 84.6

Total 89 89 73 82.0

Table 4.3.7.2 – Reasons for not having concluded Performance Agreements for all SMS Members as on 30 September 2013

SMS Level

Reasons for not having concluded Performance Agreements and number of SMS members

TotalNewly appointed for less than 3

months

Immediate supervisor not yet been appointed

Seconded and signed agreement in another provincial department

On extended leave of absence including

suspensions

Salary Level 15 1 - 1 1 3

Salary Level 14 - - 5 - 5

Salary Level 13 1 2 5 - 8

Total 2 2 11 1 16

The two members whose immediate supervisor had not yet been appointed were employed in the Planning Commission. The immediate supervisor is the head of the secretariat.

Table 4.3.7.3 –Disciplinary steps taken against SMS members for not having concluded Performance Agreements as on 30 September 2013

None, as members were not found blameworthy.


4.3.8. Performance rewards

To encourage good performance, the department has granted the following performance rewards during the year under review. The information is presented in terms of race, gender, and disability (Table 4.9.1), salary bands (table 4.9.2) and critical occupations (Table 4.9.3).

Table 4.3.8.1 – Performance Rewards by race, gender, and disability, 1 April 2013 to 31 March 2014

Race / gender

Beneficiary Profile Cost

Number of beneficiaries

Total number of employees in group

% of total within group

Cost (R’000)Average cost per employee

African, Female 139 312 44.6 1 766 12 706

African, Male 74 177 41.8 1 299 17 554

Asian, Female 2 6 33.3 33 16 539

Asian, Male 3 7 42.9 94 31 500

Coloured, Female 1 7 14.3 23 23 387

Coloured, Male 6 10 60 110 18 277

Total Blacks, Female 142 325 43.7 1 823 12 835

Total Blacks, Male 83 194 42.8 1 503 18 108

White, Female 6 9 66.7 113 18 834

White, Male 1 4 25 20 20 165

TOTAL 235 539 43.6 3 499 14 889

Employees with a disability 3 7 42.9 40 13 397

Table 4.3.8.2– Performance Rewards by salary bands for personnel below Senior Management Service, 1 April 2013 to 31 March 2014

Salary Bands

Beneficiary Profile Cost


Number of employees

% of total within salary bands

Total Cost (R’000)

Average cost per employee

Skilled (Levels 3-5) 11 25 44 47 4 273

Highly skilled production (Levels 6-8) 60 133 45.1 505 8 417

Highly skilled supervision (Levels 9-12) 108 217 49.8 1 713 15 861

Contract (Levels 3-5) - 1 - - -

Contract (Levels 6-8) 18 67 26.9 131 7 278

Contract (Levels 9-12) 4 17 23.5 66 16 500

Periodical Remuneration - 27 - - -

TOTAL 201 487 41.3 2 462 12 249


Table 4.3.8.3 – Performance Rewards by critical occupations, 1 April 2013 to 31 March 2014

Critical OccupationsBeneficiary Profile Cost


Number of employees

% of total within occupation

Total Cost (R’000)

Average cost per employee

Administrative related 30 70 42.9 378 12 600

Cleaners in offices workshops hospitals etc.

2 1 200 8 4 000

Client inform clerks(switchboard, receptionist, information clerks

- 1 - - -

Communication and information related 1 1 100 20 20 000

Diplomats - 1 - - -

Finance and economics related 29 99 29.3 382 13 172

Financial and related professionals 66 144 45.8 907 13 742

Financial clerks and credit controllers 1 1 100 6 6 000

Food services aids and waiters 1 2 50 4 4 000

General legal administration & rel. professionals

1 1 100 14 14 000

Head of department/chief executive officer

- 1 - - -

Human resources related 30 65 46.2 340 11 333

Information technology related 8 18 44.4 122 15 250

Light vehicle drivers 1 4 25 4 4 000

Logistical support personnel 6 10 60 86 14 333

Secretaries & other keyboard operating clerks

25 44 56.8 192 7 680

Senior managers 34 76 44.7 1 037 30 500

TOTAL 235 539 43.6 3 499 14 889

The other officials reflected above are SMS posts.

Table 4.3.8.4 – Performance related rewards (cash bonus), by salary band, for Senior Management Service

Salary Band

Beneficiary ProfileTotal Cost

(R’000)

Average cost

per employee

Total cost as a % of the total personnel

expenditureNumber of

beneficiaries

Number of

employees

% of total

within band

Band A 23 51 45.1 635 27 609 39 994

Band B 8 19 42.1 280 35 000 23 335

Band C 3 7 42.9 122 40 667 9 314

Band D - 2 - - - -

TOTAL 34 79 43.0 1037 30 500 72 643


4.3.9. Foreign workers

The tables below summarise the employment of foreign nationals in the department in terms of salary bands and by major occupation. The tables also summarise changes in the total number of foreign workers in each salary band and by each major occupation.

Table 4.3.9.1 – Foreign Workers, 1 April 2013 to 31 March 2014 by salary band

Salary Band1 April 2013 31 March 2014 Change

Number % of total Number % of total Number % change

Highly skilled supervision, contract (Levels 9-12) 1 20 1 16.7 - -

Senior management, contract (Levels 13-16) 1 20 1 16.7 - -

Total 2 40 2 33.3 1 100

Table 4.3.9.2– Foreign Worker, 1 April 2013 to 31 March 2014, by major occupation

Major Occupation1 April 2013 31 March 2014 Change

Number % of total Number % of total Number % change

Professionals and managers 1 100 1 100 1 100

Senior management (Levels 13-16), contract 1 100 1 100 1 100

Total 2 100 2 100 2 100

4.3.10. Leave utilisation for the period 1 January 2013 to 31 December 2013

The Public Service Commission identified the need for careful monitoring of sick leave within the public service. The following tables provide an indication of the use of sick leave (Table 4.3.10.1) and disability leave (Table 4.3.10.2). In both cases, the estimated cost of the leave is also provided.

Table 4.3.10.1– Sick leave, 1 January 2013 to 31 December 2013

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)

Skilled (Levels 3-5) 269.5 85.3 23 4.5 12 108

Highly skilled production (Levels 6-8) 1 239 77.4 130 25.5 10 957

Highly skilled supervision (Levels 9-12) 2 013 78 218 42.8 9 3 122

Senior management (Levels 13-16) 211 78.7 37 7.3 6 663

Contract (Levels 3-5) 4 50 1 0.2 4 2

Contract (Levels 6-8) 349 63.6 62 12.2 6 226

Contract (Levels 9-12) 51 68.6 14 2.8 4 89

Contract (Levels 13-16) 133 82.7 24 4.7 6 507

TOTAL 4 269.5 77.2 509 100 8 5 674


Table 4.3.10.2 – Disability leave (temporary and permanent), 1 January 2013 to 31 December 2013

Salary Band Total days taken

% days with medical certification

Number of Employees using disability leave

% of total employees using disability leave

Average days per employee

Estimated Cost

(R’000)

Skilled (levels 3-5) 2 100 1 20 2 1

Highly skilled supervision (Levels 6-8) 26 100 1 20 26 22



Contract (Levels 13-16) 11 100 1 20 11 59

TOTAL 184 100 5 100 37 477

Table (4.3.10.3) summarises the utilisation of annual leave. The wage agreement concluded with trade unions in the PSCBC in 2000 requires management of annual leave to prevent high levels of accrued leave being paid at the time of termination of service.

Table 4.3.10.3 – Annual Leave, 1 January 2013 to 31 December 2013

Salary Bands Total days taken Average per employee

Skilled (Levels 3-5) 745 27

Highly skilled production (Levels 6-8) 3 711 26

Highly skilled supervision (Levels 9-12) 5 336 22

Senior management (Levels 13-16) 1 201 23

Contract (Levels 3-5) 21 21

Contract (Levels 6-8) 1 121 15



TOTAL 12 877 22

Table (4.3.10.4) summarises the utilisation of capped leave. The management of capped leave is intended to prevent high levels of accrued leave being paid at the time of termination of service.

Table 4.3.10.4 – Capped leave, 1 January 2013 to 31 December 2013

Salary Bands Total days of capped leave taken

Average number of days taken per employee

Average capped leave per employee as at 31 December 2013



Highly skilled supervision (Levels 9-12) 8 3 136

Total 68 5 134

The following table summarises payments made to employees as a result of leave that was not taken.


Table 4.3.10.5 – Leave payouts for the period 1 April 2013 to 31 March 2014

Reason Total Amount (R’000)

Number of Employees

Average payment per employee

Leave pay-out for 2013/14 due to non-utilization of leave for the previous cycle

11,016.10 1 11,016

Capped leave pay-outs on termination of service for 2013/14 2,421,304 9 269,033

Current leave pay-out on termination of service for 2013/14 345,267 14 24,662

Total 2,777,587 24 115,733

The above figures also include employees who exited the department in the previous financial year but were paid during the year under review.

4.3.11. HIV and AIDS & health promotion programmesTable 4.3.11.1 – 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

Employees who indicate signs of intoxicating substance abuse. Referral for professional and medical assistance.

Table 4.3.11.2 – Details of Health Promotion and HIV and AIDS Programmes

Question Yes No Details, if yes

1. Has the department 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 MR S Ngqangweni

2. Does the department have a dedicated unit or has it designated

specific staff members to promote the health and wellbeing 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.

x Number of employees : 4

COE Budget: R1, 341, 477

3. Has the department introduced an Employee Assistance or

Health Promotion Programme for your employees? If so, indicate

the key elements/services of this Programme.

x 24 Hr Support Services Programme

4. Has the department 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 Advocate Bomvu

Mr S Ngqangweni

Mr Koranteng- Programme 2

Ms L Tshatsha- Labour Representative

Ms N Majokweni

Ms V Lupoko

Mr I Guma - Labour Representative

Mr S Caga – Labour Representative

Secretariat – EWP unit

5. Has the department 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.

x SHERQ Policy in place

HIV and AIDS and TB Management Policy

Final Draft

Health and Promotion Management Policy in

place

Wellness Management


Question Yes No Details, if yes

6. Has the department 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.

x Designed the HI and AIDS questionnaire

that addresses stigma and discrimination for

those living with HIV and distributed it among

departmental staff, awaiting analysis of response

and design the intervention strategy

7. Does the department encourage its employees to undergo

Voluntary Counseling and Testing? If so, list the results that you

have you achieved.

x Employees undergone testing in the last

financial year

56 employees have registered in the AID for

AIDS programme under GEMS (these are

employees who have tested positive)

8. Has the department developed measures/indicators to monitor

& evaluate the impact of its health promotion programme? If so,

list these measures/indicators.

x Health awareness campaigns that comprises of

health screening and health education

4.3.12. Labour relations

No collective agreements were entered into with trade unions within the department. This is due to the fact that negotiations and collective agreements are entered into at provincial level.

Table 4.3.12.1 – Collective agreements, 1 April 2013 to 31 March 2014

Total collective agreements None

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

Table 4.3.12.2 – Misconduct and disciplinary hearings finalized, 1 April 2013 to 31 March 2014

Outcomes of disciplinary hearings Number % of total

Not guilty - -

Corrective Counselling 2 12.50

Written Warning 3 18.75

Final Written Warning 9 56.25

Suspension without pay 1 6.25

Dismissal 1 6.25

Total 16 100.00

At the close of the financial year, the case involving dismissal was taken on appeal. The sanction of dismissal may either be confirmed on appeal or may change.

Table 4.3.12.3 – Types of misconduct addressed at disciplinary hearings

Type of misconduct Number % of total

Absent from work without permission 5 38.46

Obstructing the function and efficiency of the department 1 7.69

Failure to carry instruction 4 30.76

Gross negligence 1 7.69

Wilfully and intentionally caused loss of state property 1 7.69


Type of misconduct Number % of total

Improper Conduct 1 7.69

Falsifies records or any documents - -

Under influence of alcohol - -

Total 13 100%

The majority of offences, in the light of the table information, are behavioral in nature. This situation may therefore be reversed by applying corrective measures.

Below is the number of grievances lodged in terms of the Grievance Rules.

Table 4.3.12.4 – Grievances lodged for the period 1 April 2013 to 31 March 2014

Number % of Total

Number of grievances resolved 4 100

Number of grievances not resolved - -

Total number of grievances lodged 4 100

Most grievances were resolved through appropriation of internal processes. One grievance was however referred to the GPSSBC, consequent to the employee’s dissatisfaction with the outcome.

The table below indicates disputes that were lodged with or were decided by the GPSSBC or the Labour Court during the year under review

Table 4.3.12.5 – Disputes lodged with Councils for the period 1 April 2013 to 31 March 2014

Number % of Total

Number of disputes upheld - -

Number of disputes dismissed - -

Total number of disputes lodged - -

The above disputes related to promotional appointments. Both were dismissed at the level of the GPSSBC.

Table 4.3.12.6 – Strike actions for the period 1 April 2013 to 31 March 2014

Total number of person working days lost -

Total cost (R’000) of working days lost -

Amount (R’000) recovered as a result of no work no pay -

Most recoveries have been made. The remainder will be recovered in the first quarter of the next financial year.

Table 4.3.12.7 – Precautionary suspensions for the period 1 April 2013 to 31 March 2014

Number of people suspended 2

Number of people whose suspension exceeded 30 days 1

Average number of days suspended 484

Cost (R’000) of suspensions R 1,530,185.20

No persons were placed on suspension during the year under review.


4.3.13. Skills development

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

Table 4.3.13.1 – Training needs identified 1 April 2013 to 31 March 2014

Occupational Categories

GenderNumber of employees as at 1 April 2013

Training needs identified at start of reporting period

Learner- shipsSkills Programmes & other short courses

Other forms of training

Total


Female 27 - 8 10 18

Male 56 - 8 20 28

ProfessionalsFemale 191 3 87 47 137

Male 112 3 42 29 74


Female 48 2 12 4 18

Male 36 - 15 9 24

Clerks Female 67 2 41 6 49

Male 9 - 3 2 5

Service and sales workersFemale - - - - -

Male - - - - -

Skilled agriculture and fishery workers

Female - - - - -

Male - - - - -

Craft and related trades workers

Female - - - - -

Male - - - - -


Female - - - - -

Male - - - - -

Elementary occupationsFemale - - - - -

Male - - - - -

Sub TotalFemale 333 7 148 67 222

Male 213 3 68 60 131

Total 546 10 216 127 353

The above table indicates the number of training opportunities identified in line with the training priorities that were highlighted in respect of the year under review. These were also included in the annual skills development plan of the department.

This table below indicates all training provided by the department during this period including bursaries awarded to full time employees.


Table 4.3.13.2 – Training provided 1 April 2013 to 31 March 2014

Occupational Categories

Gender

Number of employees as at 1 April 2013 (including 18.2 learners)

Training provided within the reporting period

Training provided for Unemployed Graduates

Skills Programmes and other short courses

Other forms of training Total

Workshops Bursaries


Female 27 - 8 10 - 18

Male 56 - 8 20 1 29

ProfessionalsFemale 191 21 87 47 - 134

Male 112 7 42 29 - 71


Female 48 - 12 4 2 18

Male 36 - 15 9 - 24

Clerks Female 67 - 41 6 2 49

Male 9 - 3 2 1 6

Service and sales workers

Female - - - - - -

Male - - - - - -

Skilled agriculture and fishery workers

Female - - - - - -

Male - - - - - -

Craft and related trades workers

Female - - - - - -

Male - - - - - -


Female - - - - - -

Male - - - - - -

Elementary occupations

Female - - - - - -

Male - - - - - -

Sub TotalFemale 333 21 148 67 4 219

Male 213 7 68 60 2 130

Total 557 546 29 216 127 349

The above table indicates training opportunities that were made available and utilised by employees of the department. The above figures exclude the 18.1 learners that are reflected in the preceding table. Also, there were no 18.2 learnership programmes that were offered by the department. The emphasis has been on job-specific programmes and leadership and management development programmes.


4.3.14. Injury on duty

The following tables provide basic information on injury on duty.

Table 4.3.14.1 – Injury on duty, 1 April 2013 to 31 March 2014

Nature of injury on duty Number % of total

Required basic medical attention only - -

Temporary Total Disablement - -

Permanent Disablement - -

Fatal - -

Total - -

There were no injuries on duty that were reported in the financial year under review.

4.3.15. Utilisation of consultants refer to the comment by the Audit CommitteeTable 4.3.15.1 – Report on consultant appointments using appropriated funds

Project Title Total number of consultants that worked on the project

Duration:Hours

Contract value inRand

None

Total number of projects Total individual consultants Total duration:Hours Total contract value in Rand

Nil

Table 4.3.15.2 – 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

None

Table 4.3.15.3– Report on consultant appointments using Donor funds

Project Title Total Number of consultants that worked on the project

Duration:Work days

Donor and Contract value in Rand

None

Total number of projects Total individual consultants Total duration:Work days Total contract value in Rand

None

Table 4.3.15.4– Analysis of consultant appointments using Donor 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

None


5. OTHER INFORMATION5.3. List of Contact Details

Designation Name Cell Tel Fax Email

MEC Mr S Somyo 040 1010 179 040 639 1030 [email protected]

Chief of Staff Ms A Tinta 040 1010 177 040 639 1030 [email protected]

Head of DepartmentMs NTM Mbina-Mthembu

082 827 8223 040 1010 161 040 635 0021 [email protected]

Senior Executive Support to HoD

Ms L Shipalana 083 781 4674 040 1010 163 040 635 0021 [email protected]

Chief Director: Office of Strategy Management

Mr N Sithole 073 267 7165 040 1010 184 040 635 0024 [email protected]

Chief Financial Officer Ms DB Nqadolo 083 271 1673 040 1010 181 040 635 1156 [email protected]

Chief Director: Financial Management

Mr J Gqibani 082 781 7409 040 1010 095 040 635 0022 [email protected]

Chief Director: Departmental Supply Chain Management Unit

Mr A Louw 083 791 3055 040 1010 133 040 609 5617 [email protected]

Chief Director: Corporate Services

Adv. J Bomvu 079 348 9813 040 1010 077 040 639 2200 [email protected]

DDG: Sustainable Resources Management

Mr J Mhlomi 079 873 5874 040 1010 291 040 609 5780 [email protected]

Chief Director: Provincial Finances

Mr J Seaworyeh 079 492 1952 040 1010 292 0406095780 [email protected]

Chief Director: Municipal Finance

Mr T Sesele 079 527 5810 040 1010 288 040 609 5780 [email protected]

Chief Director: Policy and Research

Mr M. Hassan 073 452 9688 040 1010 276 040 639 1877 [email protected]

Chief Director: Office of the CIO

Mr N Madikiza 0732676985 040 1010 398 040 635 0012 [email protected]

Chief Director: Financial Governance

Ms D Cloete-Page 079 525 7499 040 1010 394 040 609 5292 [email protected]

Chief Director: Cash and Liability Management

Mr DL Qhali 082 494 5262 040 1010 426 040 609 5077 [email protected]

Chief Director: Physical Asset Management

Mrs M Madumane 082 571 0218 040 1010 254 0406095428 [email protected]

DDG: Financial Governance

Mr GLQ Kalimashe 082 450 5299 040 1010 533 040 635 1156 [email protected]

Chief Director: Shared Internal Audit Services

Ms J Naicker 0810331312 040 1010 525 040 651 0155 [email protected]

Chief Director : Supply Chain Management Office

Mr P. Booi 082 419 0922 040 1010 373 040 609 5267 [email protected]

Director: Communication Services

Ms N Sogayise 083 357 7953 040 1010 186 040 635 0024 [email protected]

Financial Information Systems Helpdesk

Ms. N Xotyeni N/A 040 1010 410 086 600 5270 [email protected]


6. PART E: FINANCIAL INFORMATION6.1. Report of the Auditor-GeneralREPORT OF THE AUDITOR-GENERAL TO THE EASTERN CAPE PROVINCIAL LEGISLATURE ON VOTE NO. 12: PROVINCIAL PLANNING AND TREASURY REPORT ON THE FINANCIAL STATEMENTS

Introduction

12. I have audited the financial statements of the Eastern Cape Provincial Planning and Treasury set out on pages 7 to 10 and 95 to 126, which comprise the appropriation statement, the statement of financial position as at 31 March 2014, the statement of financial performance, statement of changes in net assets and cash flow statement 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

13. The accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with the Modified Cash Standard (MCS) prescribed by the National Treasury and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No.1 of 1999) (PFMA), 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

14. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the general notice issued in terms thereof and 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.

15. 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, whether 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.

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

Opinion

17. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Eastern Cape Provincial Planning and Treasury as at 31 March 2014 and its financial performance and cash flows for the year then ended, in accordance with the MCS prescribed by the National Treasury and the requirements of the PFMA.

Emphasis of matter

18. I draw attention to the matter below. My opinion is not modified in respect of this matter.

Other oversight responsibilities

19. As disclosed in note 27 to the financial statements, the Eastern Cape Provincial Planning and Treasury was responsible for endorsing the expenditure related to the funeral and memorial arrangements for the former president (Nelson Mandela). There are allegations of misuse of funds in this regard, that are currently being investigated by the Hawks (the Directorate for Priority Crime Investigation).


REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

20. In accordance with the PAA and the general notice issued in terms thereof, I report the following findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report, non-compliance with legislation as well as 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

21. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information for the following selected programmes presented in the annual performance report of the department for the year ended 31 March 2014:

• Programme2:Sustainableresourcesmanagementonpages32to36

• Programme3:Assetandliabilitymanagementonpages37to44

• Programme4:Financialgovernanceonpages47to51

22. I evaluated the reported performance information against the overall criteria of usefulness and reliability.

23. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and 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, as required by the National Treasury’s Framework for managing programme performance information.

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

25. I did not raise any material findings on the usefulness and reliability of the reported performance information for the selected programmes.

Additional matter

26. Although I raised no material findings on the usefulness and reliability of the reported performance information for the selected programmes, I draw attention to the following matter:

Achievement of planned targets

27. Refer to the annual performance report on pages 23 to 31, 32 to 36, 37 to 46 and 47 to 51 for information on the achievement of the planned targets for the year.

Compliance with legislation

28. I performed procedures to obtain evidence that the department had complied with applicable legislation regarding financial matters, financial management and other related matters. I did not identify any instances of material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA.

Internal control

29. I considered internal control relevant to my audit of the financial statements, annual performance report and compliance with legislation. I did not identify any significant deficiencies in internal control.

OTHER REPORTSPerformance audits

30. The performance audit report on the readiness of government to report on its performance will be tabled during 2014. The department was one of the 61 institutions and departments audited. The performance audit focused


on the following:

• The systems and processes that government departments have put in place to report on theirperformance.

• Theperformancereportingguidanceandoversightofgovernmentdepartments.

East London30 July 2014


6.2. Annual Financial Statements6.2.1. Appropriation Statements (for the year ended 31 March 2014)

Appropriation per Programme

2013/14 2012/13

APPROPRIATION STATEMENT

Adjusted Appropria-

tion

Shifting of Funds

VirementFinal

Appropria-tion

Actual Expenditure

Variance

Expenditure as % of

final appro-priation

Final Appropria-

tion

Actual Expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

1. Administration

Current payment 152,000 (875) - 151,125 145,249 5,876 96.1% 149,563 138,032

Transfers and subsidies

760 785 - 1, 545 1,512 33 97.9% 188 147

Payment for capital assets

6,890 90 - 6, 980 6,782 198 97.2% 14,100 13,260

Payment for financial assets

- - - - 14 (14) - -

159,650 - - 159,650 153,557 6,093 163,851 151,439

2. Sustainable Resource Management

Current payment 73,911 (65) - 73,846 72,417 1,429 98.1% 61,230 56,834


400 65 - 465 462 3 99.4% 206 205

74,311 - - 74,311 72,879 1,432 61,436 57,039

3. Asset and Liability Management

Current payment 57,399 (6,527) - 50,872 49,131 1,741 96.6% 61,095 58,805


1,126 106 - 1,232 1,198 34 97.2% 843 455


- 6, 421 1, 579 8,000 8,000 - 100.0% - -

58,525 - 1,579 60,104 58,329 1,775 61,938 59,260

4. Finance Governance

Current payment 57,617 (47) (1,579) 55,991 51,876 4,115 92.7% 52,257 51,595


660 47 - 707 707 - 100.0% 1,135 1,121


- - - - 36 (36) - -

58,277 - (1,579) 56,698 52,619 4,079 53,392 52,716

Subtotal 350,763 - - 350,763 337,384 13,379 96.2% 340,617 320,454

Statutory Appropriation

Current payment 1,735 - - 1,735 1,735 - 100.0% 1,652 1,652

TOTAL 352,498 - - 352,498 339,119 13,379 96.2% 342,269 322,106

2013/14 2012/13

Final Appropriation

Actual Expenditure

Final Appropriation

Actual Expenditure

Reconciliation with Statement of Financial Performance

Add:

Departmental receipts 201,507 137,845

Actual amounts per Statement of Financial Performance

(Total Revenue)554,005 480,114

Actual amounts per Statement of Financial Performance

(Total Expenditure)339,119 322,106


Appropriation per Economic Classification

2013/14 2012/13

Adjusted Appropria-

tion

Shifting of Funds

VirementFinal

Appropria-tion

Actual Expenditure

Variance

Expenditure as % of final

appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

Current payments

Compensation of

employees255,938 (254) - 255,684 248,308 7,376 97.1% 242,140 235,148

Goods and services 84,989 (7,260) (1,579) 76,150 70,365 5,785 92.4% 82,005 70,118

Transfers and

subsidies

Provinces and

municipalities4 (4) - - - - 1 1

Departmental

agencies and

accounts

2 750 - 752 752 - 100.0% 2 2

Households 2,940 257 - 3,197 3,127 70 97.8% 2,369 1,925

Payment for capital

assets

Machinery and

equipment6,890 6,511 1,579 14,980 14,782 198 98.7% 14,073 13,250

Intangible assets - - - - - - 27 10

Payment for financial

assets- - - - 50 (50) - -

Total 350,763 - - 350,763 337,384 13,379 96.2% 340,617 320,454

Statutory Appropriation

2013/14 2012/13

Direct changes against the Provin-cial Revenue Fund

Adjusted Appropria-

tion

Shifting of Funds

Virement Final Appropria-

tion

Actual Expenditure

Variance Expenditure as % of final

appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

Member of Executive

Committee1,735 - - 1,735 1,735 - 100.0% 1,652 1,652

Total 1,735 - - 1,735 1,735 - 100.0% 1,652 1,652

Statutory Appropriation per economic classification

2013/14 2012/13

Per Economic clas-sification

Adjusted Appropria-

tion

Shifting of Funds


tion

Actual Expenditure


appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

Current payments - -

Compensation of

employees1,735 - - 1,735 1,735 - 100.0% 1,652 1,652

Total 1,735 - - 1,735 1,735 - 100.0% 1,652 1,652


6.2.2. Detail per Programme 1 – Administration (For the year ended 31 March 2014)

2013/14 2012/13

Detail per sub-programmeAdjusted

Appropria-tion

Shifting of Funds

VirementFinal

Appropria-tion

Actual Expendi-

tureVariance

Expendi-ture

as % of final appro-

priation

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

1.1 Office of the MEC

Current payment 4,086 95 - 4,181 4,136 45 98.9% 4,131 3,773

1.2.Management Services

Current payment 38,555 (1,922) - 36,633 33,464 3,169 91.3% 33,248 27,516

Transfers and subsidies 277 11 - 288 287 1 99.7% 32 31


- - - - 14 (14) - -

1.3 Corporate Services

Current payment 50,192 1,118 - 51,310 49,401 1,909 96.3% 51,513 49,329

Transfers and subsidies 477 750 - 1,227 1,196 31 97.5% 147 107

Payment for capital assets 1,049 90 - 1,139 1,085 54 95.3% 8,841 8,411

1.4 Financial Management

Current payment 55,093 (197) - 54,896 54,388 508 99.1% 55,865 53,633

Transfers and subsidies 6 6 - 12 11 1 91.7% 9 9

Payment for capital assets 5,841 - - 5,841 5,697 144 97.5% 5,259 4,849

1.5 Internal Audit Unit

Current payment 4,074 31 - 4,105 3,860 245 94.0% 4,806 3,781

Transfers and subsidies - 18 - 18 18 - 100.0%

Total 159,650 - - 159,650 153,557 6,093 96.2% 163,851 151,439

2013/14 2012/13


Adjusted Appropria-

tion

Shifting of Funds


tion

Actual Expenditure


appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

Current payments

Compensation of employees

90,467 (36) - 90,431 88,491 1,940 97.9% 87,332 85,112

Goods and services 61,533 (839) - 60,694 56,758 3,936 93.5% 62,231 52,920


Provinces and municipalities

4 (4) - - - - 1 1

Departmental agencies and accounts

2 750 - 752 752 - 100.0% 2 2

Households 754 39 - 793 760 33 95.8% 185 144


Machinery and equipment

6,890 90 - 6,980 6,782 198 97.2% 14,073 13,250

Intangible assets - - - - - - 27 10


- - - - 14 (14) - -

Total 159,650 - - 159,650 153,557 6,093 96.2% 163,851 151,439


6.2.3. Detail Per Programme 2 – Sustainable Resource Management (For the year ended 31 March 2014)

2013/14 2012/13

Detail per sub-pro-gramme

Adjusted Appropria-

tion

Shifting of Funds


tion

Actual Expenditure


appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

2.1. Programme Support

Current payment 3,438 (443) - 2,995 2,778 217 92.8% 3,131 3,103

2.2. Economic Analysis

Current payment 2,509 (19) - 2,490 2,481 9 99.6% 2,976 2,655

2.3. Fiscal Policy

Current payment 4,866 (10) - 4,856 4,689 167 96.6% 4,439 4,314

2.4. Budget Management

Current payment 13,710 66 - 13,776 13,598 178 98.7% 8,620 7,724


24 12 - 36 34 2 94.4% - -

2.5. Public Finance

Current payment 49,388 341 - 49,729 48,871 858 98.3% 42,064 39,038


376 53 - 429 428 1 99.8% 206 205

Total 74,311 - - 74,311 72,879 1,432 98.1% 61,436 57,039

2013/14 2012/13

Per Economic classification

Adjusted Appropria-

tion

Shifting of Funds


tion

Actual Expenditure


appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

Current payments

Compensation of employees 69,826 (65) - 69,761 68,604 1,157 98.3% 56,922 53,902

Goods and services 4,085 - - 4,085 3,813 272 93.3% 4,308 2,932


Households 400 65 - 465 462 3 99.4% 206 205

Payment for capital assets - - - - - - - -

Payment for financial assets - - - - - - - -

Total 74,311 - - 74,311 72,879 1,432 98.1% 61,436 57,039


6.2.4. Detail Per Programme 3 – Asset And Liability Management (For the year ended 31 March 2014)

2013/14 2012/13

Detail per sub-programme

Adjusted Appropria-

tion

Shifting of Funds


tion

Actual Expenditure


appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000


Current payment 2,383 - - 2,383 2,186 197 91.7% 2,235 2,154

3.2. Asset Management

Current payment 28,994 (106) - 28,888 28,110 778 97.3% 38,717 36,848


502 106 - 608 574 34 94.4% 482 94

3.3.Liability Management

Current payment 4,801 - - 4,801 4,410 391 91.9% 4,789 4,769

3.4.Supported and Interlinked Financial Systems

Current payment 21,221 (6,421) - 14,800 14,425 375 97.5% 15,354 15,034


624 - - 624 624 - 100.0% 361 361


- 6,421 1,579 8,000 8,000 - 100.0%

Total 58,525 - 1,579 60,104 58,329 1,775 97.0% 61,938 59,260

2013/14 2012/13


Adjusted Appropria-

tion

Shifting of Funds


tion

Actual Expenditure


appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

Current payments

Compensation of employees 45,833 (106) - 45,727 44,434 1,293 97.2% 51,707 50,079

Goods and services 11,566 (6,421) - 5,145 4,697 448 91.3% 9,388 8,726


Households 1,126 106 - 1,232 1,198 34 97.2% 843 455


Machinery & equipment - 6,421 1,579 8,000 8,000 - 100.0% - -

Payment for financial assets - - - - - - - -

Total 58,525 - 1,579 60,104 58,329 1,775 97.0% 61,938 59,260


6.2.5. Detailed per Programme 4 – Financial Governance (For the year ended 31 March 2014)

2013/14 2012/13

Detail per sub-programme

Adjusted Appropria-

tion

Shifting of Funds


tion

Actual Expenditure


appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000


Current payment 28,386 (47) - 28,339 25,489 2,850 89.9% 25,191 25,168


105 47 - 152 152 - 100.0% 4 4

4.2. Accounting Services

Current payment 13,030 - - 13,030 12,706 324 97.5% 13,219 12,678


- - - - 36 (36) - -

4.3. Norms And Standards

Current payment 5,902 - - 5,902 5,783 119 98.0% 5,941 5,922


555 - - 555 555 - 100.0% 437 436

4.4. Risk Management

Current payment 2,552 - - 2,552 2,306 246 90.4% 2,735 2,729

4.5. Provincial Internal Audit Services

Current payment 7,747 - (1,579) 6,168 5,592 576 90.7% 5,171 5,098


- - - - - - 694 681

Total 58,277 - (1,579) 56,698 52,619 4,079 92.8% 53,392 52,716

2013/14 2012/13

Per Economic classification

Adjusted Appropria-

tion

Shifting of Funds


tion

Actual Expenditure


appropria-tion

Final Appropria-

tion

Actual expenditure

R’000 R’000 R’000 R’000 R’000 R’000 % R’000 R’000

Current payments

Compensation of employees

49,812 (47) - 49,765 46,779 2,986 94.0% 46,179 46,055

Goods and services 7,805 - (1,579) 6,226 5,097 1,129 81.9% 6,078 5,540


Households 660 47 - 707 707 - 100.0% 1,135 1,121


- - - - - - - -


- - - - 36 (36) - -

Total 58,277 - (1,579) 56,698 52,619 4,079 92.8% 53,392 52,716


6.3. NOTES TO THE APPROPRIATION STATEMENT1. Detail of transfers and subsidies as per Appropriation Act (after Virement):

Detail of these transactions can be viewed in the note on Transfers and subsidies, disclosure notes and Annexure 1A - C to the Annual Financial Statements.

2. Detail of specifically and exclusively appropriated amounts voted (after Virement):

Detail of these transactions can be viewed in note 1 (Annual Appropriation) to the Annual Financial Statements.

3. Detail on payments for financial assets

Detail of these transactions per programme can be viewed in the note on Payments for financial assets to the Annual Financial Statements.

4. Explanations of material variances from Amounts Voted (after Virement):

4.1 Per programmeFinal Appropriation Actual Expenditure Variance

Variance as a % of Final Appropriation

R’000 R’000 R’000 %

Administration 161,385 155,292 6,093 3.8%

Sustainable Resource Management 74,311 72,879 1,432 1.9%

Asset and Liability Management 60,104 58,329 1,775 3.0%

Financial Governance 56,698 52,619 4,079 7.2%

Total 352,498 339,119 13,379 3.8%

4.2 Per economic classificationFinal Appropriation Actual Expenditure Variance

Variance as a % of

Final Appropriation

R’000 R’000 R’000 %

Current Payments 333,569 320,408 13,161 3.9%

Compensation of employees 257,419 250,043 7,376 2.9%

Goods and services 76,150 70,365 5,785 7.6%

Transfers & Subsidies 3,949 3,879 70 1.8%

Departmental agencies & accounts 752 752 0 0.0%

Households 3,197 3,127 70 2.2%

Payment For Capital Assets 14,980 14,782 198 1.3%

Machinery & equipment 14,980 14,782 198 1.3%

Payment for financial assets - 50 (50) -

Thefts and Losses - 50 (50) -

Total 352,498 339,119 13,379 3.8%


Programme 1: AdministrationCompensation of Employees

Variance: R1, 940 million

The variance is mainly due to delays in the filling of vacant posts as well as staff exiting the department for better prospects or retirement. The Programme experienced challenges in obtaining suitable candidates to fill some of the vacancies whilst some were filled later than anticipated due to recommended candidates declining appointments. Termination of contracts in respect of graduate assistants also contributed to the underspending.

Goods and Services


The variance is mainly due to challenges experienced with regard to the second phase implementation of the Vision 2030 project. This has affected spending in consultancy and advisory services, advertising, communication and travelling expenditure. The postponed tabling of strategic documents to 2014/15 also contributed to under spending in operating payments. The late and non-filling of vacant posts had a concomitant effect on goods and services expenditure.



Savings realised on bursaries to non-employees.

Payments for Capital Assets


Payments for finance leases (cellular phones) as well as the Member of the Executive Council’s vehicle were less than anticipated resulting in under spending.

Payments for Financial Assets

Variance: (R0, 014) million

A portion of savings in Programme 1 was utilised to write off long outstanding debts that were irrecoverable.

Programme 2: Sustainable Resource ManagementCompensation of Employees


The variance is mainly due to late and non-filling of vacant posts as well as staff exiting the department for better prospects or retirement. The Programme experienced challenges in obtaining suitable candidates, later opting for head-hunting. Some of the vacancies were not approved pending the outcome of the new organogram.

Goods and Services


The late and non-filling of vacant posts had a concomitant effect on goods and services expenditure. In some instances district municipalities combined their activities resulting in savings in goods and services items.



Minor savings realised on leave gratuity costs.


Programme 3: Asset and Liability ManagementCompensation of Employees


The under spending in compensation of employees is due to the non-filling of vacant posts as well as staff exiting the department for better prospects or retirement. Most of the vacancies were withheld pending the finalisation of the new organogram.

Goods and Services


Under spending mainly affects travel and subsistence for BAS and LOGIS training as costs were borne by client departments. The late and non-filling of vacant posts had a concomitant effect on goods and services expenditure.



Savings realised on leave gratuity costs.

Programme 4: Financial GovernanceCompensation of Employees


The under spending in compensation of employees is attributable to staff exiting the department. This mainly pertains to contract terminations in respect of the Technical Support Unit (TSU) personnel, some of which were permanently employed by other provincial departments.

Goods and Services


Under spending in goods and services is mainly due to the cancellation of Bid Committee courses and Audit Process of External Audit (APEA) training. This has affected consultancy fees, travel and subsistence and catering expenditure.

Payments for Financial Asset

Variance: (R0, 036) million

A portion of savings in Programme 4 was utilised to write off long outstanding debts that were irrecoverable.


6.4. STATEMENT OF FINANCIAL PERFORMANCE2013/14 2012/13

Note R’000 R’000

REVENUE

Annual appropriation 1 350,763 340,617

Statutory appropriation 2 1,735 1,652

Departmental revenue 3 201,507 137,845

TOTAL REVENUE 554,005 480,114

EXPENDITURE

Current expenditure

Compensation of employees 4 250,043 236,800

Goods and services 5 70,365 70,118

Total current expenditure 320,408 306,918


Transfers and subsidies 7 3,879 1,928

Total transfers and subsidies 3,879 1,928

Expenditure for capital assets

Tangible assets 8 14,782 13,250

Intangible assets 8 - 10

Total expenditure for capital assets 14,782 13,260

Payments for financial assets 6 50 -

TOTAL EXPENDITURE 339,119 322,106

SURPLUS FOR THE YEAR 214,886 158,008

Reconciliation of Net Surplus for the year

Voted funds 13,379 20,163

Annual appropriation 13,379 20,163

Departmental revenue 12 201,507 137,845

SURPLUS FOR THE YEAR 214,886 158,008


6.5. STATEMENT OF FINANCIAL POSITION2013/14 2012/13

Note R’000 R’000

ASSETS

Current assets 43,666 39,789

Cash and cash equivalents 9 2,025 18,098

Receivables 10 41,641 21,691

TOTAL ASSETS 43,666 39,789

LIABILITIES

Current liabilities 43,483 39,648

Voted funds to be surrendered to the Revenue Fund 11 9,409 20,163

Departmental revenue to be surrendered to the Revenue Fund

1233,944 19,304

Payables 13 130 181

TOTAL LIABILITIES 43,483 39,648

NET ASSETS 183 141

Represented by:

Recoverable revenue 183 141

TOTAL 183 141

6.6. STATEMENT OF CHANGES IN NET ASSETS

NET ASSETS 2013/14 2012/13

R’000 R’000

Recoverable revenue

Opening balance 141 35

Transfers: 42 106

Debts recovered (included in departmental receipts) (181) (35)

Debts raised 223 141

Closing balance 183 141

TOTAL 183 141


6.7 CASH FLOW STATEMENTNote 2013/14 2012/13

R’000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts 626,347 552,790

Annual appropriated funds received 1.1 346,793 340,617

Statutory appropriated funds received 2 1,735 1,652

Departmental revenue received 3 684 255

Interest received 3.2 277,135 210,266

Net increase in working capital (20,001) (1,047)

Surrendered to Revenue Fund (283,342) (215,275)

Current payments (320,408) (306,918)

Payments for financial assets (50) -

Transfers and subsidies paid (3,879) (1,928)

Net cash flow available from operating activities 14 (1,333) 27,622

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for capital assets 8 (14,782) (13,260)

Net cash flows from investing activities (14,782) (13,260)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase in net assets 42 106

Net cash flows from financing activities 42 106

Net decrease in cash and cash equivalents (16,073) 14,468

Cash and cash equivalents at beginning of period 18,098 3,630

Cash and cash equivalents at end of period 15 2,025 18,098


6.8. ACCOUNTING POLICIES

Summary of significant accounting policies

The financial statements have been prepared in accordance with the following policies, which have been applied consistently in all material aspects, unless otherwise indicated.

The historical cost convention has been used, except where otherwise indicated. Management has used assessments and estimates in preparing the annual financial statements. These are based on the best information available at the time of preparation.

Where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the financial

statements and to comply with the statutory requirements of the Public Finance Management Act (PFMA), Act 1 of 1999 (as

amended by Act 29 of 1999), and the Treasury Regulations issued in terms of the PFMA and the annual Division of Revenue

Act.

1 Basis of preparation

The financial statements have been prepared in accordance with the Modified Cash Standard.

2 Going concern

The financial statements have been prepared on a going concern basis.

3 Presentation currency

Amounts have been presented in the currency of the South African Rand (R) which is also the functional currency of

the department.

4 Rounding

Unless otherwise stated financial figures have been rounded to the nearest one thousand Rand (R’000).

5 Foreign currency translation

Cash flows arising from foreign currency transactions are translated into South African Rands using the exchange

rates prevailing at the date of payment / receipt.

6 Current year comparison with budget

A comparison between the approved, final budget and actual amounts for each programme and economic classification

is included in the appropriation statement.

7 Revenue

7.1 Appropriated funds

Appropriated funds comprises of departmental allocations as well as direct charges against the revenue fund (i.e.

statutory appropriation).

Appropriated funds are recognised in the statement of financial performance on the date the appropriation becomes

effective. Adjustments made in terms of the adjustments budget process are recognised in the statement of financial

performance on the date the adjustments become effective.

The net amount of any appropriated funds due to / from the relevant revenue fund at the reporting date is recognised

as a payable / receivable in the statement of financial position.

7.2 Departmental revenue

Departmental revenue is recognised in the statement of financial performance when received and is subsequently paid

into the relevant revenue fund, unless stated otherwise.

Any amount owing to the relevant revenue fund at the reporting date is recognised as a payable in the statement of

financial position.

8 Expenditure

8.1 Compensation of employees


8.1.1 Salaries and wages

Salaries and wages are recognised in the statement of financial performance on the date of payment.

8.1.2 Social contributions

Social contributions made by the department in respect of current employees are recognised in the statement of

financial performance on the date of payment.

Social contributions made by the department in respect of ex-employees are classified as transfers to households in

the statement of financial performance on the date of payment.

8.2 Other expenditure

Other expenditure (such as goods and services, transfers and subsidies and payments for capital assets) is recognised

in the statement of financial performance on the date of payment. The expense is classified as a capital expense if the

total consideration paid is more than the capitalisation threshold.

8.3 Accrued expenditure payable

Accrued expenditure payable is recorded in the notes to the financial statements when the goods are received or, in

the case of services, when they are rendered to the department.

Accrued expenditure payable is measured at cost.

8.4 Leases

8.4.1 Operating leases

Operating lease payments made during the reporting period are recognised as current expenditure in the statement of


The operating lease commitments are recorded in the notes to the financial statements.

8.4.2 Finance leases

Finance lease payments made during the reporting period are recognised as capital expenditure in the statement of


The finance lease commitments are recorded in the notes to the financial statements and are not apportioned between

the capital and interest portions.

Finance lease assets acquired at the end of the lease term are recorded and measured at the lower of:

• cost,beingthefairvalueoftheasset;or

• the sum of the minimum lease payments made, including any payments made to acquire ownership at the end of the lease term, excluding interest.

9 Cash and cash equivalents

Cash and cash equivalents are stated at cost in the statement of financial position.

Bank overdrafts are shown separately on the face of the statement of financial position.

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held, other

short-term highly liquid investments and bank overdrafts.

10 Receivables

Receivables included in the statement of financial position arise from cash payments made that are recoverable from

another party (including departmental employees) and are derecognised upon recovery or write-off.

Receivables outstanding at year-end are carried in the statement of financial position at cost plus any accrued interest.

Amounts that are potentially irrecoverable are included in the disclosure notes.

11 Payables

Loans and payables are recognised in the statement of financial position at cost.


12 Capital Assets

12.1 Movable capital assets

Movable capital assets are initially recorded in the notes to the financial statements at cost. Movable capital assets

acquired through a non-exchange transaction is measured at fair value as at the date of acquisition.

Where the cost of movable capital assets cannot be determined accurately, the movable capital assets are measured

atfairvalueandwherefairvaluecannotbedetermined;themovableassetsaremeasuredatR1.

All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) are recorded at R1.

Movable capital assets are subsequently carried at cost and are not subject to depreciation or impairment.

Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project

unless the movable asset is recorded by another department/entity in which case the completed project costs are

transferred to that department.

12.2 Intangible assets

Intangible assets are initially recorded in the notes to the financial statements at cost. Intangible assets acquired

through a non-exchange transaction are measured at fair value as at the date of acquisition.

Internally generated intangible assets are recorded in the notes to the financial statements when the department

commences the development phase of the project.

Where the cost of intangible assets cannot be determined accurately, the intangible capital assets are measured at fair

valueandwherefairvaluecannotbedetermined;theintangibleassetsaremeasuredatR1.

All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) are recorded at R1.

Intangible assets are subsequently carried at cost and are not subject to depreciation or impairment.

Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project

unless the intangible asset is recorded by another department/entity in which case the completed project costs are

transferred to that department.

13 Provisions and Contingents

13.1 Contingent liabilities

Contingent liabilities are recorded in the notes to the financial statements when there is a possible obligation that

arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one or

more uncertain future events not within the control of the department or when there is a present obligation that is not

recognised because it is not probable that an outflow of resources will be required to settle the obligation or the amount

of the obligation cannot be measured reliably

13.2 Commitments

Commitments are recorded at cost in the notes to the financial statements when there is a contractual arrangement

or an approval by management in a manner that raises a valid expectation that the department will discharge its

responsibilities thereby incurring future expenditure that will result in the outflow of cash

14 Fruitless and wasteful expenditure

Fruitless and wasteful expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the total value of the fruitless and or wasteful expenditure incurred.

Fruitless and wasteful expenditure is removed from the notes to the financial statements when it is resolved or transferred to receivables for recovery.

Fruitless and wasteful expenditure receivables are measured at the amount that is expected to be recoverable and are

de-recognised when settled or subsequently written-off as irrecoverable.

15 Non-adjusting events after the reporting date

Non-adjusting events after the reporting date are those events that are indicative of conditions that arose after the reporting date.


16 Employee benefits

Short-term employee benefits that give rise to a present legal or constructive obligation are disclosed in the disclosure notes to the financial statements. These amounts are not recognised in the statement of financial performance or the statement of financial position.

17 Key management personnel

Compensation paid to key management personnel including their family members where relevant, is included in the

disclosure notes.

18 Related party transactions

Specific information with regards to related party transactions is included in the disclosure notes.


6.9. NOTES TO THE ANNUAL FINANCIAL STATEMENTS1. Annual Appropriation 1.1. Annual Appropriation

Included are funds appropriated in terms of the Appropriation Act (and the Adjustments Appropriation Act) for National Departments (Voted funds) and Provincial Departments:

2013/14 2012/13

Final

Appropriation

Actual Funds

Received

Funds not requested/

not received

AppropriationReceived

R’000 R’000 R’000 R’000

Administration 159,650 157,843 1,807 163,851

Sustainable Resource Management 74,311 73,470 841 61,436

Asset and Liability Management 60,104 59,424 680 61,938

Financial Governance 56,698 56,056 642 53,392

Total 350,763 346,793 3,970 340,617

2. Statutory Appropriation

2013/14 2012/13

R’000 R’000

Member of executive committee 1,735 1,652

Total 1,735 1,652

Actual Statutory Appropriation received 1,735 1,652

3. Departmental revenue

Note 2013/14 2012/13

R’000 R’000

Sales of goods and services other than capital assets 3.1 185 183

Interest, dividends and rent on land 3.2 277,135 210,266

Transactions in financial assets and liabilities 3.3 499 72

Total revenue collected 277,819 210,521

Less: Own revenue included in appropriation 12 76,312 72,676

Departmental revenue collected 201,507 137,845

3.1. Sales of goods and services other than capital assets

Note 2013/14 2012/13

3 R’000 R’000

Sales of goods and services produced by the department 185 183

Other sales 185 183

Total 185 183


3.2. Interest, dividends and rent on land

3

Interest 277,135 210,266

Total 277,135 210,266

3.3. Transactions in financial assets and liabilities

3

Receivables 318 37

Other Receipts including Recoverable Revenue 181 35

Total 499 72

4. Compensation of employees4.1. Salaries and Wages

Note 2013/14 2012/13

R’000 R’000

Basic salary 173,830 163,491

Performance award 3,499 3,153

Service Based 169 274

Compensative/circumstantial 743 454

Periodic payments 1,017 1,052

Other non-pensionable allowances 44,835 43,290

Total 224,093 211,714

4.2. Social contributions

Employer contributions

Pension 19,446 18,497

Medical 6,472 6,559

Bargaining council 32 30

Total 25,950 25,086

Total compensation of employees 250,043 236,800

Average number of employees 548 556


5. Goods and services

Note 2013/14 2012/13

R’000 R’000

Administrative fees 638 657

Advertising 1,404 1,448

Minor assets 5.1 998 813

Bursaries (employees) 42 167

Catering 1,351 1,683

Communication 7,118 7,406

Computer services 5.2 7,376 11,116

Consultants, contractors and agency/outsourced services 5.3 16,664 14,873

Entertainment 182 185

Audit cost – external 5.4 5,803 4,817

Fleet services 929 792

Inventory 5.5 - -

Consumables 5.6 2,568 2,764

Operating leases 3,868 4,023

Property payments 5.7 3,452 3,337

Transport provided as part of the departmental activities - 8

Travel and subsistence 5.8 10,965 9,110

Venues and facilities 868 838

2,150 1,939

Other operating expenditure 5.9 3,989 4,142

Total 70,365 70,118

Inventory, in terms of SCOA, has been reclassified as Consumables under Goods and Services for the 2013/14 financial year. Inventory: Printing Departmental has been classified as Other Operating Expenditure. Prior year figures have been restated.

5.1. Minor assets

5

Tangible assets

Machinery and equipment 998 813

Total 998 813

5.2. Computer services

5

SITA computer services 5,797 3,869

External computer service providers 1,579 7,247

Total 7,376 11,116


5.3. Consultants, contractors and agency/outsourced services

Note 2013/14 2012/13

R’000 R’000

5

Business and advisory services 11,715 10,382

Legal costs 2,731 1,741

Contractors 2,195 2,748

Agency and support/outsourced services 23 2

Total 16,664 14,873

5.4. Audit cost – External

5

Regularity audits 5,803 4,817

Total 5,803 4,817

5.5. Inventory


5.6. Consumables

5

Consumable supplies 525 733

Household supplies 388 554

Building material and supplies 39 97

IT consumables 64 82

Other consumables 34 -

Stationery, printing and office supplies 2,043 2,031

Total 2,568 2,764


5.7. Property payments

Note 2013/14 2012/13

R’000 R’000

5

Property maintenance and repairs 2,173 2,242

Other 1,279 1,095

Total 3,452 3,337


5.8. Travel and subsistence

Note 2013/14 2012/13

R’000 R’000

5

Local 10,950 9,110

Foreign 15 -

Total 10,965 9,110

5.9. Other operating expenditure

5

Professional bodies, membership and subscription fees 103 120

Resettlement costs 1,470 2,005

Other 2,416 2,017

Total 3,989 4,142

In terms of SCOA, Inventory: Printing Departmental has been reclassified as Other Operating Expenditure. Prior year figures have been restated.

6. Payments for financial assets

Note 2013/14 2012/13

R’000 R’000

Debts written off 6.1 50 -

Total 50 -

6.1. Debts written off

Debts written off 50 -

Total 50 -

Total debt written off 50 -

7. Transfers and subsidies

Note 2013/14 2012/13

R’000 R’000

Provinces and municipalities Annex 1A - 1

Departmental agencies and accounts Annex 1B 752 2

Households Annex 1C 3,127 1,925

Total 3,879 1,928


8. Expenditure for capital assets

Note 2013/14 2012/13

R’000 R’000

Tangible assets 14,782 13,250

Machinery and equipment 24 14,782 13,250

Intangible assets - 10

Software 25 - 10

Total 14,782 13,260

8.1. Analysis of funds utilised to acquire capital assets – 2013/14

Voted funds Aid assistance Total

R’000 R’000 R’000

Tangible assets 14,782 - 14,782

Machinery and equipment 14,782 - 14,782

Total 14,782 - 14,782

8.2. Analysis of funds utilised to acquire capital assets – 2012/13

Voted funds Aid assistance Total

R’000 R’000 R’000

Tangible assets 13,250 - 13,250

Machinery and equipment 13,250 - 13,250

Intangible assets 10 - 10

Software 10 - 10

Total 13,260 - 13,260

8.3. Finance lease expenditure included in expenditure for capital assets

2013/14

R’000

Tangible assets 3,962

Machinery and equipment 3,962

Total 3,962


9. Cash and cash equivalents

2013/14 2012/13

R’000 R’000

Consolidated Paymaster General Account 2,022 18,096

Cash on hand 3 2

Total 2,025 18,098

10. Receivables

2013/14 2012/13

R’000 R’000 R’000 R’000 R’000

Note

Less than

one year

One to three

years

Older than

three yearsTotal Total

Claims recoverable 10.1

Annex 4 39,286 2,054 - 41,340 21,413

Other debtors 10.2 49 231 21 301 278

Total 39,335 2,285 21 41,641 21,691

10.1. Claims recoverable

Note 2013/14 2012/13

10 R’000 R’000

National departments 9 -

Provincial departments 41,331 21,413

Total 41,340 21,413

10.2. Other debtors

10 R’000 R’000

Debt Account 300 252

Sal:Tax Debt 1 26

Total 301 278

11. Voted funds to be surrendered to the Revenue Fund

Note 2013/14 2012/13

R’000 R’000

Opening balance 20,163 9,253

Transfer from statement of financial performance 13,379 20,163

Voted funds not requested/not received 1.1 (3,970) -

Paid during the year (20,163) (9,253)

Closing balance 9,409 20,163


12. Departmental revenue to be surrendered to the Revenue Fund


Transfer from Statement of Financial Performance 201,507 137,845

Own revenue included in appropriation 76,312 72,676

Paid during the year (263,179) (206,022)

Closing balance 33,944 19,304

13. Payables – current

Note 2013/14 2012/13

R’000 R’000

Amounts owing to other entities 34 120

Clearing accounts 13.1 96 61

Total 130 181

13.1. Clearing accounts

13

Sal:Reversal Control - 32

Sal:Income Tax 80 29

Sal:Pension Fund 16 -

Total 96 61

14. Net cash flow available from operating activities

Note 2013/14 2012/13

R’000 R’000

Net surplus as per Statement of Financial Performance 214,886 158,008

Add back non cash/cash movements not deemed operating activities (216,219) (130,386)

Increase in receivables – current (19,950) (1,134)

Decrease in payables – current (51) 87

Expenditure on capital assets 14,782 13,260

Surrenders to Revenue Fund (283,342) (215,275)

Voted funds not requested/not received (3,970) -

Own revenue included in appropriation 76,312 72,676

Net cash flow generated by operating activities (1,333) 27,622


15. Reconciliation of cash and cash equivalents for cash flow purposes

Note 2013/14 2012/13

R’000 R’000

Consolidated Paymaster General account 2,022 18,096

Cash on hand 3 2

Total 2,025 18,098

16. Contingent liabilities and contingent assets16.1. Contingent liabilities

Note 2013/14 2012/13

R’000 R’000

Liable to Nature

Housing loan guarantees Employees Annex 2 54 -

Claims against the department Annex 3 10,917 9,172

Intergovernmental payables (unconfirmed balances) Annex 5 - 57

Total 10,971 9,229

The contingent liability disclosed relate to litigation against the department, wherein former employees have instituted claims in the Labour Court, either for reinstatement to employment or compensation. There is no certainty in relation to the timing of the payment of the claims, given that the matters are in the hands of the court and progress at the instigation of the claimants. Further, there is no certainty of reimbursement, should the matters be decided in favour of the department, as this also is subject to consideration and decision by the court.

17. Commitments

Note 2013/14 2012/13

R’000 R’000

Current expenditure

Approved and contracted 9,564 7,467

9,564 7,467

Capital expenditure

Approved and contracted 1,487 292

1,487 292

Total Commitments 11,051 7,759


18. Accruals and payables not recognised

Listed by economic classification

30 Days 30+ Days Total Total

Compensation of employees 14 - 14 41

Goods and services 3,558 69 3,627 5,693

Transfers and subsidies - - - 359

Total 3,572 69 3,641 6,093

Note 2013/14 2012/13

R’000 R’000

Listed by programme level

Administration 2,101 2,457

Sustainable Resource Management 93 321

Asset and Liability Management 1,425 1,607

Financial Governance 22 1,708

Total 3,641 6,093

Confirmed balances with other departments Annex 5 34 63

Total 34 63

19. Employee benefits

2013/14 2012/13

R’000 R’000

Leave entitlement 8,224 5,673

Service bonus (Thirteenth cheque) 5,944 5,661

Performance awards 9,005 7,126

Capped leave commitments 25,276 26,379

Total 48,449 44,839

Leave entitlement includes negative balance due to the utilisation of leave days in excess of the allocated pro-rata for a specific period. This affects 64 employees and amounts to R374,955.89.


20. Lease commitments20.1. Operating leases expenditure

2013/14 Machinery and equipment Total

Not later than 1 year 1,619 1,619

Later than 1 year and not later than 5 years 881 881

Total lease commitments 2,500 2,500

2012/13 Machinery and equipment Total


Later than 1 year and not later than 5 years 1,089 1,089


The Department occupies buildings that are owned by / under the custodianship of / leased by the Department of Roads and Public Works. These buildings are occupied for no consideration and no amounts are paid to the Department of Roads and Public Works for the occupation of these premises.

20.2. Finance leases expenditure

2013/14 Machinery and

equipment Total




2012/13 Machinery and

equipment Total




The Department entered into a lease agreement with the Department of Transport for the provision of fourteen vehicles. The lease is being treated as a finance lease. The figures above also include cellular phone lease commitments.

21. Fruitless and wasteful expenditure21.1. Reconciliation of fruitless and wasteful expenditure

2013/14 2012/13

R’000 R’000

Opening balance 3 -

Fruitless and wasteful expenditure – relating to current year - 3

Less: Amounts resolved (3) -

Fruitless and wasteful expenditure awaiting resolution - 3


21.2. Analysis of awaiting resolution per economic classification

2013/14 2012/13

R’000 R’000

Current - 3

Total - 3

22. Related party transactions

1. The Department occupies buildings that are owned by / under the custodianship of / leased by the Department of Roads and Public Works. These buildings are occupied for no considerations and no amounts are paid to the Department of Roads and Public Works for the occupation of these premises.

2. The Member of the Executive Council for Finance is also the political head of Department of Economic Development, Environmental Affairs and Tourism as from 23 May 2014.

23. Key management personnel

No. of

Individuals

2013/14 2012/13

R’000 R’000

Political office bearers 1 1,735 1,652

Officials:

Level 15 to 16 11 10,871 11,662

Level 14 (incl. CFO if at a lower level) 26 23,495 19,541

Total 36,101 32,855

24. Movable Tangible Capital Assets

MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014

Opening

balance

Current Year

Adjustments to prior

year balances

Additions Disposals Closing

Balance

R’000 R’000 R’000 R’000 R’000

Machinery And Equipment 39,444 - 10,820 3,997 46,267

Transport assets 870 - 1,081 - 1,951

Computer equipment 27,684 - 700 3,914 24,470

Furniture and office equipment 7,864 - 580 - 8,444

Other machinery and equipment 3,026 - 8,459 83 11,402

Total Movable Tangible Capital Assets 39,444 - 10,820 3,997 46,267

The Department entered into a lease agreement with the Department of Transport for the provision of fourteen vehicles. The lease is being treated as a finance lease. The lease was entered into on the 24th of February 2012.


24.1. Additions

ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014

Cash Non-cash

(Capital Work in Progress current

costs and finance lease payments)

Received current, not paid

(Paid current year, received prior year)

Total

R’000 R’000 R’000 R’000 R’000

Machinery And Equipment 14,782 - (3,962) - 10,820

Transport assets 2,302 (1,221) - 1,081

Computer equipment 700 - - - 700

Furniture and office equipment 580 - - - 580

Other machinery and equipment 11,200 - (2,741) - 8,459

Total Additions To Movable Tangible Capital

Assets14,782 - (3,962) - 10,820

24.2. Disposals

DISPOSALS OF MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014

Sold for cash Transfer out or

destroyed or

scrapped

Total disposals Cash Received

Actual

R’000 R’000 R’000 R’000

Machinery And Equipment 3,997 3,997 -

Computer equipment - 3,914 3,914 -

Other machinery and equipment - 83 83 -

Total Disposal Of Movable Tangible Capital Assets - 3,997 3,997 -

24.3. Movement for 2012/13

MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2013

Opening

balance

Current Year


year balances


Balance

R’000 R’000 R’000 R’000 R’000

Machinery And Equipment 29,549 - 10,025 130 39,444

Transport assets 870 - - - 870

Computer equipment 19,478 - 8,329 123 27,684

Furniture and office equipment 6,341 - 1,523 - 7,864

Other machinery and equipment 2,860 - 173 7 3,026

Total Movable Tangible Capital Assets 29,549 - 10,025 130 39,444


24.4. Minor assets

MOVEMENT IN MINOR ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014

Machinery and

equipment

Total

R’000 R’000


Additions 991 991

Disposals (1,025) (1,025)

Total Minor Assets 8,814 8,814

Machinery and

equipment

Total

Number of R1 minor assets 35 35

Number of minor assets at cost 6,463 6,463

Total Number Of Minor Assets 6,498 6,498

MOVEMENT IN MINOR ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2013

Machinery and

equipment

Total

R’000 R’000


Additions 802 802

Disposals 107 107

Total Minor Assets 8,848 8,848

Machinery and

equipment

Total

Number of R1 minor assets 73 73

Number of minor assets at cost 5,305 5,305

Total Number Of Minor Assets 5,378 5,378

24.5. Movable assets written off

MOVABLE ASSETS WRITTEN OFF FOR THE YEAR ENDED 31 MARCH 2014

Machinery and

equipment

Total

R’000 R’000

Assets written off 57 57

Total Movable Assets Written Off 57 57


MOVABLE ASSETS WRITTEN OFF FOR THE YEAR ENDED 31 MARCH 2013

Machinery and

equipment

Total

R’000 R’000

Assets written off 82 82

Total Movable Assets Written Off 82 82

25. Intangible Capital Assets

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014

Opening

balance

Current Year


year balances


Balance

R’000 R’000 R’000 R’000 R’000

Computer Software 3,364 - - - 3,364

Total Intangible Capital Assets 3,364 - - - 3,364

25.1. Movement for 2012/13

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2013

Opening

balance

Current Year


year balances Additions Disposals

Closing

Balance

R’000 R’000 R’000 R’000 R’000

Computer Software 3,354 - 10 - 3,364

Total Intangible Capital Assets 3,354 - 10 - 3,364

26. Non-adjusting events after reporting date

2013/14

R’000

Function shift: Eastern Cape Planning Commission (ECPC) to Office of the Premier

This will be done during the 2014/15 adjustment estimates. 11,294

Total 11,294

27. Oversight Responsibilities

In November 2013, the Provincial Executive Council resolved that Eastern Cape Development Corporation (ECDC) be appointed as an additional integrated social infrastructure delivery arm in the province focussing on maintenance and renewal of existing infrastructure. A budget of R330 million was made available to the Department of Economic Development and Environmental Affairs and Tourism (DEDEAT) to be transferred to ECDC in the Adjustment Estimates in November 2013.


With the untimely passing on of the former President, Dr Nelson Mandela, a need for a rapid roll-out of integrated social infrastructure arose. On the 6th December 2013, a Special Executive Council Meeting approved amongst other things that:

• Funeralarrangementscostsbedefrayedfromsomeofthefundsearmarkedfortheintegratedsocialinfrastructurein ECDC and

• ECDCbeappointedastheprojecthost/paymasterforthefuneral.

It was also resolved that all expenditure must be endorsed by Provincial Treasury after consultation with the Project Co-ordinators and that any expenditure incurred by both the Provincial and National Government must first be communicated to Provincial Treasury to avoid duplication of costs. Due to the above there is an investigation in progress for allegations of misuse of funds.


6.10 UNAUDITED ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS

ANNEXURE 1A

STATEMENT OF TRANSFERS TO MUNICIPALITIES

NAME OF MUNICIPALITY

TRANSFER 2012/13

Actual Transfer% of Available Funds

TransferredTotal Available

R’000 % R’000

Buffalo City Municipality - - 1

- 1

The amount in 2012/13 is in respect of licencing costs incurred for the Member of Executive Council’s motor vehicle.

ANNEXURE 1B

STATEMENT OF TRANSFERS TO DEPARTMENTAL AGENCIES AND ACCOUNTS

DEPARTMENT/ AGENCY/ ACCOUNT

TRANSFER ALLOCATION TRANSFER 2012/13

Adjusted

Appropria-

tion

Adjustments Total

Available

Actual

Transfer

% of

Available

Funds

Transferred

Appropria-

tion Act

R’000 R’000 R’000 % R’000

South African Broadcasting Corporation

(SABC)2 - 2 2 100% 2

Finance and Accounting Services

Sector Education and Training Authority

(FASSET)

- 637 637 637 100% -

Public Service Sector Education and

Training Authority (PSETA)- 113 113 113 100% -

2 750 752 752 2

Payment to SABC is for TV licence costs and payments to FASSET and PSETA are in respect of skills development fund levies.

ANNEXURE 1C

STATEMENT OF TRANSFERS TO HOUSEHOLDS

HOUSEHOLDS

TRANSFER ALLOCATION EXPENDITURE 2012/13

Adjusted

Appropria-

tion

Act

Roll Overs Adjustments Total

Available

Actual

Transfer

% of

Available

funds

Transferred

Appropria-

tion

Act

R’000 R’000 R’000 R’000 R’000 % R’000

Transfers

Leave Gratuity 2,647 - 264 2,911 2,867 98% 2,267

Bursaries to Non-

Employees 293 - (7) 286 260 91% 72

Prayer Team

Foundation and Ilima

Revision Camps - - - - - - 30

Total 2,940 - 257 3,197 3,127 2,369


ANNEXURE 1D

STATEMENT OF GIFTS, DONATIONS AND SPONSORSHIPS MADE AND REMMISSIONS, REFUNDS AND PAYMENTS MADE AS AN ACT OF GRACE

NATURE OF GIFT, DONATION OR SPONSORSHIP2013/14 2012/13

R’000 R’000

Paid in cash

Prayer Team Foundation and Ilima Revision Camp - 29

TOTAL - 29

ANNEXURE 2

STATEMENT OF FINANCIAL GUARANTEES ISSUED AS AT 31 MARCH 2014 – LOCAL

Guarantor

institution

Guarantee

in

respect of

Original

guaran-

teed

capital

amount

Opening

balance

1 April

2013

Guaran-

tees

draw

downs

during the

year

Guaran-

tees

repay-

ments/

cancelled/

reduced/

released

during the

year

Revalua-

tions

Closing

balance

31 March

2014

Guar-

anteed

interest

for year

ended

31 March

2014

Realised

losses not

recover-

able i.e.

claims

paid out

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Standard BankHousing

Housing 54 - 54 - - 54 - -

TOTAL 54 - 54 - - 54 - -

ANNEXURE 3

STATEMENT OF CONTINGENT LIABILITIES AS AT 31 MARCH 2014

Nature of Liability

OpeningBalance1 April 2013

Liabilities incurred during the year

Liabilities paid/ cancelled/ reduced during the year

Liabilities recoverable

ClosingBalance31 March

2014

R’000 R’000 R’000 R’000 R’000

Claims against the department

Litigation 9,172 6,977 5,232 - 10,917

TOTAL 9,172 6,977 5,232 - 10,917


ANNEXURE 4

CLAIMS RECOVERABLE

Government Entity

Confirmed balance outstandingUnconfirmed balance

outstanding Total

31/03/2014 31/03/2013 31/03/2014 31/03/2013 31/03/2014 31/03/2013

R’000 R’000 R’000 R’000 R’000 R’000

Department

EC Local Government and Traditional Affairs

5,324 32 - 428 5,324 460

EC Roads & Public Works - - 155 155 155 155

EC Safety and Security 82 - 441 539 523 539

Provincial Revenue Fund 33,888 19,284 - - 33,888 19,284

EC Social Development - 12 17 - 17 12

KZN Provincial Government Finance - 36 - - - 36

EC Office of the Premier - - 778 775 778 775

EC Sport, Recreation, Arts and Culture

- 19 - - - 19

WC Office of the Premier - - 4 4 4 4

EC Agriculture 187 - 130 125 317 125

EC Department of Health 163 - - - 163 -

ND Public Works - - 9 - 9 -

39,644 19,383 1,534 2,026 41,178 21,409

Other Government Entities

SITA - - 4 4 4 4

Eastern Cape Development Corporation (ECDC)

158 - - - 158 -

158 - 4 4 162 4

Total 39,802 19,383 1,538 2,030 41,340 21,413

ANNEXURE 5

INTER-GOVERNMENT PAYABLES

Government Entity

Confirmed balance outstanding

Unconfirmed balance outstanding Total

31/03/2014 31/03/2013 31/03/2014 31/03/2013 31/03/2014 31/03/2013

R’000 R’000 R’000 R’000 R’000 R’000

Department

Current

Corporate Governance and Traditional Affairs

- 29 - - - 29

KZN Economic Development - 11 - - - 11

Free State Economic Development - - - 22 - 22

South African Police Services - 23 - - - 23

State Security Agency - - - 35 - 35

EC Social Development 34 - - - 34 -

Total 34 63 - 57 34 120


NOTES

2014

EXCELLENCEDEDICATION INTEGRITYACCOUNTABILITY

EASTERN CAPEANNUAL REPORT

2013/14

Contact InformationPrivate Bag X0029, Bhisho, 5605

Tel 040 101 0157 | Fax 040 609 5961

[email protected]

www.ectreasury.gov.za

gemprint 043 722 0755 (52469)

AN

NU

AL

RE

PO

RT

2013/14

52469 pro03 pri 06 rv 06 inner - provincial government · 2014. 11. 18. · eastern cape provincial...

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