department of economic development and tourism · the industrial economic hubs (ieh) initiative was...

CONTENTS

PART A: GENERAL INFORMATION ...................................................................................... 5

1. DEPARTMENT GENERAL INFORMATION .................................................................................... 6

2. LIST OF ABBREVIATIONS/ACRONYMS ........................................................................................ 7

3. FOREWORD BY THE MINISTER/MEC .......................................................................................... 8

5. REPORT OF THE ACCOUNTING OFFICER ................................................................................... 12

6. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT .................................................................................................................................. 20

7. STRATEGIC OVERVIEW.............................................................................................................. 21

7.1. Vision ................................................................................................................................ 21

7.2. Mission ............................................................................................................................. 21

7.3. Values ............................................................................................................................... 21

8. LEGISLATIVE AND OTHER MANDATES ...................................................................................... 21

9. ORGANISATIONAL STRUCTURE ................................................................................................ 24

10. ENTITIES REPORTING TO THE MINISTER/MEC ......................................................................... 24

PART B: PERFORMANCE INFORMATION ....................................................................... 27

1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES ................................................ 28

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE ..................................................................... 28

2.1 Service Delivery Environment .............................................. Error! Bookmark not defined.

2.2 Service Delivery Improvement Plan ................................................................................. 28

2.3 Organisational environment ............................................................................................. 33

2.4 Key policy developments and legislative changes ................ Error! Bookmark not defined.

3. STRATEGIC OUTCOME ORIENTED GOALS ................................................................................. 34

4. PERFORMANCE INFORMATION BY PROGRAMME ..................................................................... 2

4.1 Programme 1: Administration .............................................. Error! Bookmark not defined.

4.2 Programme 2: IEDS ............................................................... Error! Bookmark not defined.

5. TRANSFER PAYMENTS ................................................................................................................ 2

5.1. Transfer payments to public entities .................................................................................. 2

5.2. Transfer payments to all organisations other than public entities .................................... 4

6. CONDITIONAL GRANTS .................................................................................................................

6.1. Conditional grants and earmarked funds paid ..................... Error! Bookmark not defined.

6.2. Conditional grants and earmarked funds received .............. Error! Bookmark not defined.

7. DONOR FUNDS ............................................................................. Error! Bookmark not defined.

7.1. Donor Funds Received .......................................................... Error! Bookmark not defined.

8. CAPITAL INVESTMENT .................................................................. Error! Bookmark not defined.

8.1. Capital investment, maintenance and asset management plan ..........................................

PART C: GOVERNANCE ..................................................................................................... 6

1. INTRODUCTION .......................................................................................................................... 7

2. RISK MANAGEMENT ................................................................................................................... 7

3. FRAUD AND CORRUPTION ............................................................ Error! Bookmark not defined.

4. MINIMISING CONFLICT OF INTEREST ......................................................................................... 8

5. CODE OF CONDUCT .................................................................................................................... 9

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES ........................................................................ 9

7. PORTFOLIO COMMITTEES ........................................................................................................ 10

8. SCOPA RESOLUTIONS ...................................................................................................................

9. PRIOR MODIFICATIONS TO AUDIT REPORTS ................................ Error! Bookmark not defined.

10. INTERNAL CONTROL UNIT ............................................................ Error! Bookmark not defined.

11. INTERNAL AUDIT AND AUDIT COMMITTEES ............................................................................ 10

12. AUDIT COMMITTEE REPORT ..................................................................................................... 11

PART D: HUMAN RESOURCE MANAGEMENT ................................................................ 15

1. INTRODUCTION ........................................................................................................................ 16

2. OVERVIEW OF HUMAN RESOURCES ........................................................................................ 16

3. HUMAN RESOURCES OVERSIGHT STATISTICS .......................................................................... 16

PART E: FINANCIAL INFORMATION ................................................................................ 47

1. REPORT OF THE AUDITOR GENERAL ........................................................................................ 48

2. ANNUAL FINANCIAL STATEMENTS ........................................................................................... 52

PART A: GENERAL INFORMATION

1. DEPARTMENT GENERAL INFORMATION

PHYSICAL ADDRESS: 270 Jabu Ndlovu Street

Pietermaritzburg

3200

POSTAL ADDRESS: Private Bag X9152

Pietermaritzburg

3201

TELEPHONE NUMBER/S: 033 264 2500

EMAIL ADDRESS: [email protected]

WEBSITE ADDRESS : www.kznded.gov.za

mailto:[email protected]

2. LIST OF ABBREVIATIONS/ACRONYMS

AGSA Auditor General of South Africa

AO Accounting Officer

BBBEE Broad Based Black Economic Empowerment

CFO Chief Financial Officer

MEC Member of Executive Council

HOD Head of Department

PFMA Public Finance Management Act

TR Treasury Regulations

MTEF Medium Term Expenditure Framework

SMME Small Medium and Micro Enterprises

SCM Supply Chain Management

EU European Union

SITA State Information Technology Agency

SDIP Service Delivery Improvement Plan

3. FOREWORD BY THE MEC

The 2013/2014 financial year coincided with the end of the administration term for the

current government. It is, therefore, appropriate that we reflect on the achievements and

challenges of the Department during the past five years in this annual report. We assumed

this portfolio at the height of the global economic recession that affected not only our

country, but the entire globe. It is indeed a result of hard work that today we can stand tall

and share the good story of recovery and successful delivery of our plans.

We acknowledged from the onset that only a structured collaboration among government, civil society, labour movement and the private sector will serve as a pillar of the provincial economic development. In this regard, we organized an “Economic Recovery and Job Summit” with all the social partners to deliberate how we could navigate the rough storms and place the province into a sustainable growth trajectory. This summit spawned the KZN Economic Council which is very active in the planning and implementation of our strategies.

Key Achievements

At a macro level, our interventions contributed to the reversal of the 1,5 per cent

contraction registered during 2009, as the KwaZulu-Natal economy grew by 3,1 per cent in

2011 followed by 2,8 per cent in 2012. Most of the growth came from the manufacturing

sector, which constitute a substantial share of the economic activity in KwaZulu-Natal. In

2014, the provincial economy is projected to grow by 2,.9 per cent, and a further 3,2 per

cent in 2015. In the labour market we were also able to arrest the perpetual decline in

employment levels, which had accumulated to an estimated 285 000 jobs during the period

of the global financial crisis. Employment has since rebounded to reach 2,5 million jobs in

the fourth quarter of 2013, whilst narrow unemployment rate is 19,9 per cent.

Realising that entrepreneurship and small business development have the potential to grow

the economy and create new jobs, the Department established the KwaZulu-Natal Small

Business Development Agency (SBDA), which is charged with the responsibility of providing

a one-stop shop facility for a combination of small business support services. IThala outlets

across all districts have been positioned to serve as practical incubation centres for small

enterprises to ensure their sustainable growth essential in the creation of more business and

employment opportunities. This initiative will augment other attendant initiatives of

supporting SMMEs (including Cooperatives) in the province.

We prioritised sectors based on their ability to absorb labour, improve contribution to GDP,

stimulate exports, and attract foreign exchange earnings. Clothing and textiles, agro-

processing, green economy, creative industry and tourism remained under our radar

because of their capacity to absorb more people into the labour market. We embarked on a

critical analysis of these sectors in order to better understand their unique characteristics,

challenges, opportunities and value chain linkages. For each sector we then developed a

specific strategy with clear objectives and interventions.

Tangible results are already evident through our interventions. For example, under the

green economy, a pipeline investment of approximately R4 billion composed of investors

that intend to invest in the Renewable Energy Hub to be established in ILembe/eThekwini

region has been identified. In the electronics sector, Samsung has formally registered their

interest to locate at the Dube Trade Port (DTP). The Dube Trade Port has officially been

designated an Industrial Development Zone. We have also progressed significantly in

coordinating stakeholders to establish an aerotropolis strategy for the province. The iconic

King Shaka International Airport and DTP will be utilised as an anchor for such integrated

modern greenfield development in the province.

In agro-processing, we established the Agri-Development Agency (ADA) whose prime

objective is to support farmers thereby increasing their manufacturing capabilities.

Furthermore, a number of agro-processing projects have been supported in the province

which includes honey production, goat commercialization, cut-flower project, food

processing hubs, as well as hides and skin processing.

We have identified the maritime sector as a sleeping economic giant in terms of its potential

impact to the provincial economy. The draft Maritime Strategy for the province has been

developed jointly with our key stakeholders to shape the future of the maritime sector in

KZN. In order to seize the opportunities presented by the blue economy we need to have a

dedicated maritime development agency in the province. We have therefore resolved to

scale up the role of the Sharks Board to cover the rest of the coastal line and position it as

the maritime agency for the province.

In tourism, the Department developed and launched the Tourism Master Plan to drive the

implementation of tourism in KZN. Some of the catalytic tourism interventions pursued

include, inter alia, East3 tourism route, South African Express launching direct routes

between Durban and various SADC countries and hosting a number of high profile events

such as the KwaZulu-Natal Top Gear Festival, the uGu Jazz Festival, and the Tourism Indaba.

Strategic priorities have been identified for fast tracking – these include the King Shaka’s

statue, Drakensberg Cable Car, Bluff Bridge, Isandlwana development and Nonoti Resort.

The Industrial Economic Hubs (IEH) initiative was launched to address spatial economic

development challenges through decentralization of industrialization. It aims to promote

manufacturing and beneficiation of products, facilitate exports and job creation. The hubs

will serve to position district economies as key spatial development areas that will elevate

the KwaZulu-Natal economy to a leadership position in the country. The completion of the

feasibility analysis of the IEH shows that seven out of eleven hubs are feasible. Going

forward we will prioritize investment attraction and infrastructure development for the

feasible hubs which will inter-alia include land acquisition, water and electricity supply,

tenant acquisition, securing raw materials and markets.

We have been mindful that the attainment of economic development is strongly dependent

on the extent to which growth and development activities will advance principles of

environmental sustainability. The depletion of natural resources in the province and the

impact associated with the decline in resource quality is of major concern as it threatens the

well-being of people and the economy. During the period under review, we have intensified

campaigns around protection of endangered species such as rhinos. We are working hard to

streamline our processes to address delays in the processing of environmental impact

assessments in the province.

Challenges

In implementing our plans we have encountered some challenges such as the lack of

serviced industrial land; low level of transformation in various sectors of the economy thus

limiting opportunities for new entrants into those industries; attraction of and retention of

individuals with relevant skills and internal risk management within the Department is

currently very weak. Furthermore, reliability of statistical data continues to be a major

challenge bedevils the department’s role in the analysis of provincial micro and macro-

economic environment to promote policy formulation.

The Department currently has thirteen public entities under supervision with an allocation of

roughly seventy per cent of the Departmental budget. It remains a challenge to effectively

provide an oversight function to many entities, especially because resources are limited. This

has resulted in some misalignments of Departmental plans with those of public entities and

a lack of effective strategic direction.

Long term to medium plans

Going forward the department has resolved that it will focus on five strategic pillars namely

the SEZ/Industrial Economic Hubs, Maritime, Aerotropolis, Tourism and Environmental

management.

_________________ Mr Michael Mabuyakhulu, MPP MEC of the Department of Economic Development, Tourism and Environmental Affairs

4. REPORT OF THE ACCOUNTING OFFICER

Overview of the operations of the department

During the 2013/14 period, the Department, through the Economic Planning programme,

successfully implemented key flagship initiatives being the Industrial Economic Hubs, Special

Economic Zones and the Aerotropolis. In this regard, the feasibility studies for the ten

Industrial Economic Hubs were undertaken. The Aerotropolis Strategy for KZN was finalized

and is awaiting Cabinet approval.

Working with the Department of Trade and Industry and Dube Trade Port, the Department

finalized the blueprint for the Dube Trade Port (DTP) Special Economic Zone (SEZ) and

facilitated its designation as an Industrial Development Zone, which has been achieved.

The Department has successfully contracted with the three leading Universities namely

Stellenbosch, Cape Town and Wits through the Research Chair initiative. The key focus areas

of the Research Chairs are Agro-processing, Mineral Beneficiation and Green Economy. This

will ensure that the Department continues to be on the cutting edge of developments in

these sectors which are critical to the KZN economy.

The Department has continued to provide leadership in the issuing of a quarterly economic

publication titled Ezomnotho, which is jointly published with Trade and Investment KZN,

IThala, and KZN Provincial Treasury. District stakeholders were trained on economic policy

analysis and review.

The Department effectively convened two PGDP workgroups namely: KZN Provincial Renewable Energy and Knowledge Economy Workgroups. This includes chairing of meetings, constantly reporting to cabinet clusters and other provincial high profile committees. These two workgroups are further reporting to both Provincial Climate Change Council chaired by the Premier and Provincial Economic Council chaired by the MEC for Economic Development and Tourism respectively. A Green Economy Technical Assistance Fund to assist project developers with funding to develop bankable business plans was developed working with the Department’s entity, Trade and Investment KZN. The fund was developed to intensify the support of green economy projects within the Province.

Some 436 new SMMEs were developed by the Department. Ithala provided business funding

to the SMMEs which assisted in creating and sustaining the jobs within these small

businesses.

The following training initiatives were undertaken during the period under review:

766 people were trained through the ICT and BPO skills development initiative in

partnership with Moses Kotane Institute and FET's.

50 Crafters were trained through the One Village One Product Programme.

100 primary co-operatives trained and mentored in business & co-operative

management and technical skills

154 students awarded bursaries to study business management at UKZN

The funding support from the EDTEA given to both the Durban International Film Festival

and KwaZulu-Natal African film Festival has enabled these platforms to give opportunities to

371 emerging film-makers to pitch their productions for international funding thereby

integrating them into the economic mainstream.

The Business Regulations programme within the Department conducted a total of 657

inspections of businesses across the province, exceeding the annual target of 480

inspections. It was discovered that there has been an improvement in compliance as about

96 per cent of all businesses inspected are complying with the labelling requirements in

terms of the parallel goods prohibition as well as the Merchandise Marks Act. This was

largely as a result of compliance drives aimed at all businesses across the province and

workshops with all the Business Chambers as well as businesses at major shopping malls

across the Province.

A total of 12 801 consumer complaints made consisted of 7 669 telephonic enquiries, 2 815

walk-ins as well as 2 317 written complaints. Most enquiries and complains were resolved as

the resolution of complaints amounted to 94,4 per cent with an average turn-around time of

54 days saving consumers an amount of R 9 030 434.34

The Provincial Consumer Protection Bill was passed into law by the Legislature and signed by

the Premier on the 31st of October 2013. The Department is currently finalising the

legislative processes relating to the Regulations which will be fully implemented before the

end of 2014.

The KZN Liquor Authority (KZNLA) was fully established and is now totally operational. All

systems and processes relating to good governance and compliance with the prescripts of

the PFMA have been installed in the entity and it now functions as fully fledged public entity

in terms of Schedule 3C of the PFMA.

Towards the end of 2013 the Premier had assented to the KZN Liquor Licencing Amendment

Act which then brought into full operation the KZN Liquor Licencing Act of 2010 together

with the Amendment Act. Hence, with effect from February 2014 KZN province regulates the

Liquor Industry through the implementation of the KZN Liquor licencing Act of 2010 as

amended. Through this new legislation and its regulations, the fiscal collection of revenue

through fees will be improved, compliance and enforcement of licence traders will be closely

monitored and controlled. The totally revised fee structure pertaining to liquor licences, will

be reviewed on an annual basis as compared to the past dispensation.

The Province was also extensively involved in the drafting, with the DTI, of the National

Norms and Standards pertaining to the Liquor Industry, which document will become the

cornerstone for the development of the Provincial norms and standards. During 2013, the

Province made an overhaul of the current Business Act of 1991.

During the year under review a Regulatory Impact assessment feasibility study was

undertaken. The outcomes of this study will be further deliberated and acted on in the next

financial year.

The District Informal Economy Chambers across the province continued to be sustained and

became an operational vehicle for the province to interact and respond to the requirement

of the informal traders through these structures. This also involves the alignment of

provincial policies and those of municipalities. The province for the first time saw the

collaborative working relationships and synergising of efforts across the province and

Municipalities on collective service delivery through the landmark initiation and signing of

the Memorandum of Agreement (MOU) between DEDT, COGTA and KZN SLAGA. The MOU

provides a formalised platform for the parties to engage, plan accordingly and devise

collaborated interventions/initiatives for the improvement and support of both the formal

and informal businesses in the province.

Overview of the financial results of the department

Departmental receipts

Departmental receipts

2013/2014 2012/2013

Estimate Actual Amount Collected

(Over)/Under Collection

Estimate

Actual Amount Collected

(Over)/Under Collection

R’000 R’000 R’000 R’000 R’000 R’000

Tax Receipts

Casino taxes

Horse racing

taxes

Liquor licences 5 650 5 510 1 050 5 600 4 927 (673)

Motor vehicle

licences

Sale of goods and services other than capital assets

299 197 (102) 228 233 5

Transfers received

Fines, penalties and forfeits

Interest, dividends and rent on land

4 3 (1) 14 16 2

Sale of capital assets

68 147 79 411 411 0

Financial transactions in assets and liabilities

460

893

433

4 644

4 870

226

Total 6 481 6 350 1 459 10 897 10 457 (440)

The department collected revenue totalling R6.481 million in 2013/14, exceeding the

revenue budget by R440 000 or 6.9 per cent. Revenue in respect of the following categories

was higher than budgeted:

Sale of goods and services other than capital assets was over-collected due to

commission on PERSAL deductions, and trading licences related to business

registration funds by KwaZulu-Natal Tourism Authority (TKZN), with the remainder

derived from rent paid by officials occupying state houses and parking fees.

An amount of R3 000 was collected in respect of Interest, dividends and rent on land

against no budget, relating to interest on staff debts not anticipated.

An amount of R147 000 was collected in respect of Sale of capital assets against no

budget. This category relates to the sale of redundant motor vehicles that was not

anticipated, as well as the sale of redundant canteen catering equipment.

Transactions in financial assets and liabilities was significantly over-collected by

R893 000. This high collection was due to:

A refund of R144 000 from the Inkosi Albert Luthuli ICC in respect of the

KZN Women Empowerment event. The department made payment for

the event which was held on 16-17 August 2012. According to the

contract, the department overpaid for incidental costs, and the balance

was for beverage estimates. This amount was paid over in August 2013.

An amount of R89 528 was received in respect of breached bursary

contracts.

An amount of R400 000 was reimbursed by the Office of the Premier

(OTP) to the department for bursary funds for disabled people. The OTP

returned these funds to the department as the purpose of this

programme fell outside the scope of the centralised bursary scheme

that the OTP is overseeing.

The balance relates to stale cheques and staff debts.

This over-collection was off-set to some extent by the under-collection of R617 000 in

respect of Liquor licences which was due to the failure of some outlets to renew their

licences.

Programme Expenditure

Programme Name 2013/2014 2012/2013

Final Appropriation

Actual Expenditure

(Over)/ Under Expenditure

Final Appropriation

Actual Expenditure

(Over)/Under Expenditure

R’000 R’000 R’000 R’000 R’000 R’000

Administration 228 562 241 993 (13 431) 217 871 212 465 5 406

Integrated

Economic

Development

Services 1 089 048 1 073 732 15 316

443 996

407 358

36 638

Trade and Sector

Development 772 753 772 747 6

703 522

674 467

29 055

Regulation Services 68 222 68 114 108 86 326 86 092 234

Economic Planning 20 602 20 566 36 18 546 18 546 0

Tourism 335 784 390164 (54 380) 319 424 286 920 32 504

Total 2 514 971 2 567 316 (52 345) 1 789 685 1 685 484 103 837

Virements post Adjustments Estimate

The department processed a number of virements post Adjustments Estimate, as well as

journals mainly to reduce the bulk of the unauthorised expenditure affecting Programmes 1

and 6. The department could not defray all unauthorised expenditure due to PFMA

limitations in respect of Transfers and subsidies, as well as limited savings. All virements

were approved by Provincial Treasury where necessary and were in adherence with the

prescripts of Section 43 of the PFMA and Section 6.3 of the Treasury Regulations.

The following post Adjustments Estimate virements and shifts were undertaken at

programme and economic classification level. Provincial Treasury approval was given for

these virements and they are therefore included in the tables above:

Virements:

Compensation of employees was reduced by R9.079 million across all programmes

due to vacancies that existed in the department for a portion of the year resulting

from resignations. Although the department advertised these posts several times, no

suitable candidates were found. Also contributing to this under-spending is the

moratorium on the filling of non-critical vacant posts. The funding was moved mainly

to Goods and services to primarily address pressures caused by under-funded

tourism related events, such as the Royalty Soapie Awards, KZN Air Winter

Tournament, etc. (Programme 6), as well as pressures resulting from the Mandela

Exhibition Career Expos events that were undertaken by the department without

ensuring that sufficient funding was available.

Goods and services was reduced by R8.814 million (after the above-mentioned

virements from Compensation of employees) but it is noted that no savings were

available as the category was already over-spent. Part of this this funding was moved

to Transfers and subsidies to: Provinces and municipalities to provide for the South

Coast Business Fair and for implementing the Cable Car project in the Drakensburg

(both Programme 6). These projects are aimed at assisting businesses in the Hibiscus

Coast area to showcase and market their products, in order to stimulate the local

economy and ensure that consumers are aware of the products available within

their district, as well as for the Cable Car Community Consultation, with objectives of

increasing employment and encouraging growth of foreign tourists visiting the

province. Funding was also moved to Transfers and subsidies to: Other (Public

corporations and private enterprises). The savings were identified from the KZN

Music House budget which was over-funded by R8.400 million, and the balance is a

portion of funding for the KZN Fashion Festival which did not take place due to

delays in SCM processes. These savings were utilised to fund events including:

The Upward Thinking Women’s Conference which targeted black business women to

introduce them to a new concept known as Thought Leadership to equip them with

skills and knowledge as these women play a crucial role in economic growth.

The iBeach Xperience which was aimed at promoting Dokodweni Lagoon in the

Ilembe District Municipality, as it is a tourist destination within KZN.

The Amantshontsho Ka Maskandi Awards in respect of promoting traditional music,

following a decision taken by Cabinet’s Technical Sub-committee on Major Events

that the department must fund this event from its baseline.

Transfers and subsidies to: Households was increased by R12 000 moved from

Compensation of employees to address pressures brought about by higher than

anticipated staff exit costs within Programme 4.

Machinery and equipment was reduced by a net amount of R5.091 million, mainly in

Programme 1 to fund pressures against Payments for capital assets: Other (Software

and other intangible assets) within the same programme which arose from higher

than anticipated server software and workstation software procured by the

department. The savings were largely due to delays in SCM processes and over-

budgeting and also account for the increase against Payments for capital assets:

Other (Software and other intangible assets).

Shifts:

An amount of R66.865 million was shifted from Goods and services from

Programmes 2, 3, 4 and 6 to various Transfers and subsidies categories. These are

shifts because the department was advised by the Auditor-General that payments of

this nature must be paid as transfer payments. The purpose of the funds remains

unchanged. The various shifts are as follows:

R4.669 million allocated for the Estcourt Livestock Co-operative (a co-operative

intended to establish a Cattle Feedlot Enterprise that will supply meat to

government departments such as the Department of Correctional Services) was

shifted to Transfers and subsidies to: Other (Public corporations and private

enterprises) within Programme 2.

R500 000 allocated for KwaXimba Women Sewing project, which deals with sewing,

training and mentoring, to Transfers and subsidies to: Other (Public corporations and

private enterprises) within Programme 2.

R8.179 million to Transfers and subsidies to: Other (Public corporations and private

enterprises) within Programme 2 for Operation Vuselela and Tongaat Hullett Cane

Trans of R4.862 million and R3.317 million, respectively.

R5 million was shifted to Transfers and subsidies to: Other (Public corporations and

private enterprises). An amount of R2 million was for the Maritime Strategy, and

R3 million for the Fashion Cluster.

R6.030 million allocated for the KZN Film Commission was shifted, according to the

department, to Transfers and subsidies to: Non-profit institutions as an introduction

payment. The department needs to explain exactly what this entails.

R2.343 million allocated for investment seminars associated with the East 3 Route

project to promote the tourism industry was shifted to Transfers and subsidies to:

Other (Departmental agencies and accounts) within Programme 3. The seminars

were hosted by Trade and Investment KwaZulu-Natal (TIK) and TKZN (as discussed

below), hence the movement within Programme 3.

R430 000 allocated for Forward Keys, which is a system to access tourism

information that is required by TKZN, was shifted from Programme 5 against Goods

and services, to increase the transfer to TKZN under Transfers and subsidies to:

Departmental agencies and accounts in Programme 6 because the entity was

assigned to procure the system.

A shift of R34.682 million was undertaken to Transfers and subsidies to: Other (Public

corporations and private enterprises) within Programme 6. The purpose of the funds

relating to various projects remains unchanged, as explained below:

R14.082 million allocated for MTV Awards aimed at positioning KZN on the

global map as the gateway to Africa and a premium tourist and business

destination in order to maximise the exposure and leverage investment to the

fullest.

R5 million allocated for Take Me Out SA reality show aimed at positioning the

Zulu Kingdom as an attractive base for television shows, and will be filmed and

based in Durban. It will showcase KZN’s tourism destinations, including EKZNW

resorts, and it will be held in June 2014. This was paid upfront as per the

contractual agreement signed by parties.

R1.500 million allocated for Richards Bay Imbizo intended to boost tourism in

the Richards Bay area in line with the KZN Tourism Master Plan.

R9.100 million allocated for Edu-sport East Coast Festival aimed at bringing a

unique music and cultural event to KZN. This event runs over a two day period

and combines music and culture into a prestigious oasis reflecting Africa’s true

spiritual diversity.

R5 million allocated for X Factor Production which is a music talent search reality

TV show that will be driven by the SABC. The event relates to a reality show that

features groups and soloists in one competition. The competition is aimed at

showcasing KZN internationally. The production will be broadcast on SABC

internationally in September 2014.

R3.349 million for the East 3 Route project and R1 million for the Mzansi Festival

were shifted to Transfers and subsidies to: Other (Departmental agencies and

accounts) within Programme 6, as these were implemented and hosted by TKZN on

behalf of the department.

As a result of changes in the Standard Chart of Accounts, funds for the Dube

Tradeport Corporation (DTPC) amounting to R575.402 million and the Richards Bay

Industrial Development Zone (RBIDZ) amounting to R25.164 million were moved

from Transfers and subsidies to: Non-profit institutions to Transfers and subsidies to:

Departmental agencies and accounts and Transfers and subsidies to: Public

corporations and private enterprises, respectively. The original purpose of the funds

remains unchanged.

The department shifted R3 million from Transfers and subsidies to: Departmental

agencies and accounts to Transfers and subsidies to: Public corporations and private

enterprises within Programme 2 but provided no explanation for this shift.

Amounts of R171 000 and R11 000 were shifted within Programme 3 from Goods

and services to Transfers and subsidies to: Non-profit institutions and Transfers and

subsidies to: Households, respectively. The R171 000 relates to the Durban Film

Festival while there was no explanation provided for the R11 000.

Unauthorised expenditure, fruitless and wasteful expenditure

Unauthorised expenditure of R15, 5million was incurred relating to overspending in

Programmed 6: Tourism being the main division within the department vote.

Fruitless and wasteful expenditure of R527 000 was incurred as a result of non-compliance

with Treasury Regulations.

Supply chain management

The Department introduced compliance checks for all payments. A circular together with a

checklist of documents has been issued to the entire Department creating awareness of all

requirements and processes to be followed in the cases of deviations, funding approvals

etc.

There has been a notable lack of response to bids and requests for quotations from service

providers. Tender re-invitations result in delays in the procurement process. The

Department is exploring the possibility of compiling a database for specialised professional

services.

Capacity continues to be a constraint while the restructuring process is being finalised.

Events after the reporting date

Post the reporting date of 31 March 2014, the Department’s mandate was expanded by the

amalgamation of the Environmental Affairs function into the Vote of the Department by the

Honourable Premier of the Province.

_________________ Mr Desmond K Golding Accounting Officer Department of Economic Development and Tourism

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR

THE ANNUAL REPORT

To the best of my knowledge and belief, I confirm 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

modified cash standard and the relevant frameworks and guidelines issued by the

National Treasury.

The Accounting Officer is responsible for the preparation of the annual financial

statements and for the judgements made in this information.

The Accounting Officer 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 financial statements.

The external auditors are engaged to express an independent opinion on the annual

financial statements.

In my opinion, the annual report fairly reflects the operations, the performance

information, the human resources information and the financial affairs of the

department for the financial year ended 31 March 2014.

Yours faithfully

___________________

Accounting Officer

Desmond K Golding

6. STRATEGIC OVERVIEW

7.1. Vision

Leading the attainment of inclusive growth for job creation and economic

sustenance.

7.2. Mission

The mission of the Department is to:

Develop and implement strategies that drive economic growth,

Be a catalyst for economic transformation and development,

Provide leadership and facilitate integrated economic planning and

development and

Create a conducive environment for investment.

7.3. Values

The Department commits to providing a favourable environment for its employees.

We believe and promote the culture of Ubuntu and subscribe to the following

values:

Caring and supportive

Ethics and integrity

Accountability

Transparency

Innovation

Commitment

7. LEGISLATIVE AND OTHER MANDATES

The department does not operate in a vacuum. National and provincial legislative, policy and

strategic frameworks guide the operations of the department. Some of the national acts that

are critical to the operations of the department are the Constitution of the Republic of South

Africa, particularly Schedule 4 and 5 which stipulate the competences of the provincial

government on matters of economic development and the Public Finance Management Act

(PFMA) among other sector specific acts. DEDT’s operations are also guided a myriad of

national policies and strategies, which include among others:

Integrated National B-BBEE Strategy and KZN B-BBEE Strategy;

B-BBEE Act;

B-BBEE Codes of Good Practice;

SMMEs Act;

Cooperatives Act;

New Growth Path (NGP);

Industrial Policy Action Plan (IPAP2);

National Development Plan (NDP);

Local Economic Development (LED) policy guideline;

South Africa Trade policy framework;

Green Economy Framework;

Mining Beneficiation Strategy;

National Spatial Economic Development Perspective (NSDP);

Special economic Zones (SEZs) Bill and policy, and

A number of sector specific strategies.

The provincial government has aligned to these acts and policies and the department’s

mandate is further guided by the following provincial acts and strategies, among others:

Ithala Act;

Tourism Act;

Liquor Act;

Business Act;

Dube Trade Port Act;

BEE Act;

Film Commission Act;

Trade and Investment Act;

Consumer Protection Legislation;

Provincial Growth and Development Strategy (PGDS);

Provincial Spatial Economic Development Strategy (PSEDS);

Draft Export Strategy;

Industrial Development Strategy (IDS);

Investment Promotion Strategy;

Draft Green Economy Strategy;

Airport Strategy;

SMME strategy;

Cooperative Developments Strategy;

Youth Economic Empowerment Strategy;

Informal Economic Policy.

The emphasis in most of the current policies and provincial strategies is the issue of

addressing the triple challenges of poverty, unemployment and inequality. The main policy

discussions currently are centred on the following:

Job creation;

Special economic zones (SEZ) and Industrial Economic Hubs;

Beneficiation/Value Addition;

Infrastructure Development;

Rural Economic Development;

Skills Development;

Economic Transformation;

Trade Policy;

Spatial Economic Development.

The above acts, policies and strategies are critical to direct the vision and mandate of

the department. It is only through efficiency in the implementation of these legislations,

policies and strategies that the department can meaningfully contribute to the fight

against the triple challenges of development.

8. ORGANISATIONAL STRUCTURE

9. ENTITIES REPORTING TO THE MEC

The information furnished in this section should correlate with information provided in the

related party transactions disclosure note to the financial statements and the information on

the entities.

The table below indicates the entities that report to the MEC.

Name of Entity

Legislative Mandate Financial Relationship

Nature of Operations

KwaZulu- Natal Trade and Investment

Enabling Legislation is the KwaZulu-Natal Trade and Investment Act No. 5 of 2010.

Fully funded by the Department.

To attract foreign and domestic investment and to generate exports and exports capacity in KwaZulu-Natal.

Tourism KwaZulu- Natal

Enabling Legislation is the KwaZulu-Natal Tourism Act, No. 11 of 1996


Directly or indirectly develop, promote and market tourism into and within the province of KwaZulu-Natal

KwaZulu- Natal Sharks Board

Enabling Legislation is the KwaZulu-Natal Sharks Board Act, No. 05 of 2008

Funded by the Department and from services provided to Municipalities.

To undertake, initiate and approve measures for safeguarding bathers against shark attack in the Province.

Dube Trade Port Corporation

Enabling Legislation is the KwaZulu-Natal Dube TradePort Corporation Act, No. 2


Ensure the strategic planning, establishment, design, construction, operation, management and control of the Dube TradePort;

MEC

Mr Michael

Mabuyakhulu, MPP

Accounting Officer

Mr Desmond K Golding

Chief Financial Officer

Ms Noluthando Mngadi

DDG: Integrated

Economic Development

Services

Mr Sibusiso Myeza

DDG: Administration

Mr Bongani Shezi

DDG: Trade and

Industry Development

Mr Zeph Nhleko

Name of Entity



of 2010 Identify, develop, market and promote investment opportunities in the Dube TradePort;

Moses Kotane Institute

There is no enabling Legislation, this was formed through a Memorandum of Incorporation


To empower individuals through specialist education and training in mathematics, science, engineering, technology and business process outsourcing that will assist them to become employable, enhance service delivery and create employment opportunities for others.

Richards Bay Industrial Development Zone

Enabling Legislation is the Manufacturing Development Act, 1993 (Act No. 187 of 1993) in Government Notice No R1224 of 1 December 2000 as amended by Government Notice No R1065 of 27 October 2006

Funded by the Department and Department of Trade and Industry.

To accelerate and improve infrastructure for industrial development through the government’s Industrial Development Zone (IDZ) Programme

Ithala Development Finance Corporation

Enabling Legislation is the Ithala Development Finance Corporation Act No. 2 of 1999

Funded from internal operations as a banking institution.

Mobilising financial resources and providing financial and supportive services to persons domiciled, ordinarily resident, or carrying on business within the Province;

Planning, executing, financing and monitoring the implementation of development projects and programmes in the Province;

Promoting, assisting and encouraging the development of the Province's human resources and its social, economic, financial and physical infrastructure;

Promoting, encouraging and facilitating private sector investment in the Province and the participation of the private sector and community organisations in development projects and in contributing to economic growth and development generally;

Acting as the government's agent for performing any development-related tasks and responsibilities that the government considers may be more efficiently or effectively performed by a corporate entity;

KwaZulu-Natal Growth Fund Trust

There is no enabling Legislation, this is governed and operates as per various

Operations are funded from interest and income from the

The Trust is the custodian of the KZN Growth Fund a structured debt fund. The “Fund” is a closed, pooled infrastructure project debt fund and is

Name of Entity



agreements between the Beneficiary and the Lenders and through a trust deed. The Trust received capital contribution from the KZN Provincial Government (33.3% of the fund). The Trust has leveraged this capital against borrowings from the private lenders (66.7% of the fund).

Trust’s cash balance.

to fund capital projects above R30m;

KwaZulu-Natal Liquor Authority

Enabling Legislation is the KwaZulu Natal Liquor Licensing ACT, No. 06 of 2010

Fully funded by the Department

To control and regulate the retail sale and micro manufacturing of liquor in the province;

KwaZulu-Natal Film Commission

Enabling Legislation is the KwaZulu-Natal Film Commission Act, No. 3 of 2010

Fully funded by the Department

To promote and market the Province as a global destination for film production;

To develop, promote and market, locally, nationally and internationally, the film industry in the Province;

To facilitate investment in the film industry in the Province;

PART B: PERFORMANCE INFORMATION

1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES

The AGSA currently performs certain audit procedures on the performance

information to provide reasonable assurance in the form of an audit conclusion. The

audit conclusion on the performance against predetermined objectives is included in

the report to management, with material findings being reported under the

Predetermined Objectives heading in the Report on other legal and regulatory

requirements section of the auditor’s report.

Refer to page 109 of the Report of the Auditor General, published as Part E: Financial

Information.

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE

2.1 Service Delivery Improvement Plan

The department has completed a service delivery improvement plan. The Steering

Committee responsible for managing service delivery improvement in the department has

developed specific plans for functions wherein it interfaces with the public/communities.

These functions are within Consumer Affairs, Co-operatives and Local Economic

Development. Below is a narrative for Local Economic Development.

Main services and standards

Advisory services and development of LED Strategies project development, LED capacity building and institutional development and LED project monitoring to municipalities and other LED stakeholders on a demand basis. The turnaround is targeted as 7-10 days for a response depending on the matters to be addressed.

Enhance and strengthen new and existing relationships between district, provincial national governments and other local stakeholders, with a strategic focus to achieve balanced development and growth across the local economy, whilst ensuring that district and municipal LED plans and IDPs are in line with national and provincial priorities; To identify and package new sustainable economic development projects in District Municipalities;

To provide support for economic development projects in District Municipalities;

Effective participation in the Gijima KZN LCF 11 Program by supporting the development and implementation of sustainable local economic development projects;

We offer project finance related advisory and facilitation services on a demand basis with a targeted turnaround time of 7 days;

We offer limited funding on a demand driven competitive basis to partnership groups based on advertised calls for proposals for LED initiatives. The turnaround targeted time is three months from the date of application closure;

To provide internal and external institutional development and capacity building support services to a broad range of LED stakeholders to more effectively coordinate, plan and implement LED;

To provide support to ensure effective and efficient finance, procurement and risk management services on RLED projects.

Providing Management Information Systems to support LED through relevant accurate and timely data that provides information to assist in management of the implementation;

Batho Pele arrangements with beneficiaries (Consultation access etc.)

Main services Beneficiaries Current/actual standard of service

Desired standard of service

Actual achievement

Project Development and Management

Cooperatives Local Municipalities Financial

Institutions Government

Institutions Private sector

organizations (Consultants & big business)

Public Entities Academic

Institutions

RLED Forums (provincial , district and local )

Project Steering Committees

RLED summits

RLED workshops

Follow-up consultation via telephone, email and cellphone communication Adhoc Survey questionnaires-templates

RLED Forums(provincial , district and local )


RLED summits

RLED workshops Follow-up

consultation via telephone, email and cellphone communication

Annual survey-questionnaires templates

RLED Forums(provincial , district and local


RLED summits

RLED workshops

Follow-up consultation via telephone, email and cellphone communication

Annual survey-questionnaires templates

Develop RLED portal

Review three year SDI plan (process and results)

Access Brochures & Emails

Signage at government

Offices at local Municipal level

Display of business hours, physical

RLED help desk in 4 regions .



Actual achievement

institutions

Reception services

Gijima website

RLED offices are user friendly for people with disabilities (ground floor)

address, contact details;

Clients addressed in the language they understand;

Have proper office labels in place.

Departmental officials have not been trained on Batho Pele Customer Care/Code of Conduct

Professionalism displayed by RLED staff

All RLED officials at all levels will be trained on Batho Pele customer care, Public Services Code of conduct

RLED Staff to wear name tags when dealing with the public

RLED Staff to properly handover queries to relevant members of the department

All RLED officials at all levels will be trained on Batho Pele customer care, Public Services Code of conduct

RLED Staff to wear name tags when dealing with the public

RLED Staff to properly handover queries to relevant members of the

Department

Courtesy Project budget are discussed with RLED external stakeholders

Project development call for proposals are advertised in print media and on the GIJIMA website

External stakeholders are invited to participate in RLED workshops

Applicants are

Regular updates on RLED developments and interventions of the department to be communicate to RLED stakeholders

RLED quarterly publications

Service delivery Improvement Plan and Service Commitment charter to be displayed

RLED organogram to be displayed in RLED offices

Regular capacity building workshops for external stakeholders

Conducting surveys/ Monitoring and evaluations assessments



Actual achievement

invited for briefing sessions

Names, contact details and portfolios of all PDM and PSS teams is placed on the Gijima website

Openness and Transparency

Project budget are discussed with RLED external stakeholders

Project development call for proposals are advertised in print media and on the GIJIMA website

External stakeholders are invited to participate in RLED workshops

Applicants are invited for briefing sessions

Names, contact details and portfolios of all PDM and PSS teams is placed on the Gijima website

Regular updates on RLED developments and interventions of the department to be communicate to RLED stakeholders

RLED quarterly publications

Service delivery Improvement Plan and Service Commitment charter to be displayed

RLED organogram to be displayed in RLED offices

Regular capacity building workshops for external stakeholders

Conducting surveys/ Monitoring and evaluations assessments

Information Monthly project management committee meetings are held with RELD stakeholders

RLED publications distributed to

RLED website to be updated at all times

All project files to be updated and easily accessible

Electronic project filing system .

RLED website to be updated at all times

All project files to be updated and easily accessible

Electronic project filing system .



Actual achievement

RLED stakeholders

Redress None Develop and publicize a complaints handling procedure.

Online web based complaints handling system where complaints are lodged and recorded and responded to within 3 days.

Value for money Project Management and support teams to facilitate project generation, implementation and management at Local and District level .

Authorised delegation

Monthly Monitoring reports

Quarterly Service delivery reporting(jobs and training indicators on projects implemented)

SDIP committee Procurement

plan is only at head office level

Risk management on projects

Sufficient personnel/independent resources to provide technical assistance at Regional level , district and local municipalities

Assess the impact and capacity requirements

Encouraging Innovative and Rewarding Excellence

Service excellence Committee for RLED commenced in October

Departmental Rewards and provincial performance awards for best practice initiatives/ research

Service excellence publications



Actual achievement

Leadership & Strategic Direction

Management meetings are held regularly (Strategic Planning and Programme meetings)

Management meetings are held regularly

(Strategic Planning and Programme meetings)

Management meetings are held regularly

(Strategic Planning and Programme meetings)

Service Delivery Impact

The implementation of a service delivery system is in place



Service delivery information tool

Current/actual information tools

Desired information tools

Actual achievements

Website, newsletters, Annual reports,

Sign language and braille

Website, newsletters, Annual reports, Izimbizo and Forums

Complaints mechanism

Current/actual complaints mechanism

Desired complaints mechanism

Actual achievements

National Framework on complaints and compliments

Customise and Implement To implement the draft system

2.2 Organisational environment

The Public Service faces enormous challenges, both in terms of its own transformation, and in terms of the transformation of the services which it provides to the people of South Africa. These challenges are being tackled through a comprehensive change in Human Resource policy and repositioning of Human Resources as a strategic business partner in the organisation and initiatives underpinned by progressive legislative changes. The initiatives will achieve a fundamental managerial shift from a centrally controlled, process-driven Public Service to a service which is representative of all the people of South Africa and treats all public servants as a valuable resource.

This shift can be summarised as a shift from personnel administration to human resource management. The White Paper strongly promotes the development of departmental/provincial policies within the parameters defined by national policies. This strongly affects the notion of managerial autonomy. People are the Public Service's most valuable asset, recruiting and managing human resources effectively and strategically must be the cornerstone of the wider transformation of the Public Service.

To ensure the successful transformation of the Public Service an integrated and strategically directed human resource management approach is critical. This implies the management of

human resources through a coherent overarching framework, by drawing links to all pivotal aspects of human resources management.

Human Capital Management in the Department is a dynamic practice, emerging from a transactional to a strategic partnership model focus on balancing the emotional quotients of an employee with the goals and objectives of the organisation. This strategic model requires a diverse, competent and well-managed team of this Province capable and committed to the delivery of quality services to the communities of the Province.

The Department has also undergone some strategic structural changes with the Liquor Unit together with personnel now being transferred to the Liquor Entity and Tourism which was part of the Programme 3 : Trade and Industry Development now forming Programme 6 on its own. Furthermore Environmental Management has been added as a new mandate post the 2014 General Elections.

This prompted an in-depth research within the department to identify challenges and gaps that needed to be addressed to bolster efficient and effective human resources to successfully achieve the department’s mandate. Amongst those issues identified were the large number of (employee exits) resignations of permanent staff either to other public departments or private sector and this has impacted on the efforts by the department to reduce the vacancy rate. Furthermore, the lack of a provincial retention policy framework to address retention also played a negative role in the retention of staff, however there is a new Provincial Framework on Retention in effect and we are positive that this will help to remedy the situation. Also the department needs to determine and investigate the reasons for the large number of resignations and to ensure that the department’s corporate culture and values as alluded to in its corporate strategies is indeed prevalent in the department.

The department also has challenges in meeting its target in recruiting females in senior

management and people with disabilities (PWD’s). The department has implemented alternative

strategies to address these matters by: filling all vacant SMS posts with females and by awarding

two year internships to qualified PWD’s and thereafter upon successful completion of internship

they will be absorbed into the department’s structure. We are hopeful that this will address our

shortfalls in the near future.

3. STRATEGIC OUTCOME ORIENTED GOALS

The strategic focus for the Department during the 2013/14 period was to build a resilient KZN provincial economy that can respond to global factors, stimulating provincial economic development, alignment of functions and purpose of all economic development entities as well as building a vibrant organisation. The table below outlines a summary of strategic goals for 2013/14 as well as the strategic objectives that would be key in driving each. These strategic goals inform the programmes of the KZN DEDT for the afore-mentioned reporting period.

Strategic Goals Strategic Objectives

LEAD AND COORDINATE INTEGRATED ECONOMIC

PLANNING AND DEVELOPMENT

■ To facilitate the implementation of B-BBEE strategy

and policies;

■ To provide macro-economic analysis and develop

provincial economic policies/strategies;

■ To provide research on priority economic sectors;

■ To champion spatial economic development

initiatives (SEZs);

■ To facilitate implementation of local economic

development strategies;

■ To forge strategic partnerships for development of

provincial economy (leverage resources); and

■ To develop and maintain an efficient regulatory and

governance framework for sustained economic

development.

FACILITATE SUSTAINABLE AND INCLUSIVE ECONOMIC

GROWTH TO ENSURE JOB CREATION

■ To promote SMME and Entrepreneurial

development (informal and social enterprises);

■ To identify and facilitate access to new markets;

■ To enhance sector and industrial development

through Trade, Investment and Exports Logistics,

ICT, Manufacturing, Green economy, agri-business,

Tourism, Creative Industries, Maritime,

Aerotropolis, Aviation);

■ To develop the knowledge base to enhance the

knowledge economy;

■ Development of ICT infrastructure; and

■ To investigate and develop viable alternative energy

generation options.

DEVELOP AND TRANSFORM THE TOURISM SECTOR TO

ACHIEVE DESTINATION COMPETITIVENESS

■ To develop and fund the implementation of tourism

sector specific products;

■ To implement interventions that drive

transformation, diversification and service

excellence in the tourism sector;

■ Foster strategic linkages (tourism corridors,

leverage infrastructure development strategy); and

■ To promote responsible tourism practices and

champion tourism response to climate change.

BUILD A VIBRANT INSTITUTION FOR SUPERIOR

PERFORMANCE

■ To establish organisational capacity to enable

delivery of mandate:

– Strengthen monitoring and evaluation

– Oversight capabilities of public entities

– Improve awareness of the department

– To promote a high performance and value-based

culture

■ To embed effective corporate governance, risk

.

management, and internal control frameworks;

■ To deploy robust business processes and systems

for efficient and effective delivery of strategy.

4. PERFORMANCE INFORMATION BY PROGRAMME

Programme / Subprogramme / Performance Measures Audited Outcome for 2012/13

as per Annual Report

Target for 2013/14 as per

Annual Performance

Plan (APP)

Actual output verified

for 2013/14

Actual performance

as a percentage of annual target

for 13/14

Variance between

target and actual

performance

Comments/Reasons for variances

Programme 1: Administration

1.1 Office of The MEC Effective administrative systems, and processes to the Office of the MEC 90% 100% 100% 100% 0%

Target achieved.

Weekly and bi-weekly meetings held ensuring constant flow of information and effective communication

100% 100% 100% 100% 0%

Target achieved.

Provide support in relation parliamentary questions, parliamentary administration and tabling of documentation and provide protocol support.

100% 100% 90% 90% -10% At times the Department is unable to immediately respond to all Parliamentary questions within the prescribed deadline as some questions require thorough research before the formulation & submission of accurate responses. Some of the questions could relate to the operations of public entities which also needs time to secure appropriate information required by Parliament.

Programme / Subprogramme / Performance Measures

Audited Outcome for 2012/13



Annual Performance

Plan (APP)


for 2013/14

Actual performance as a

percentage of annual target for

13/14

Variance between target and actual

performance


1.2 Office of The Head of Department

Develop and implement a strategic planning process 1.00 1.00 1.00 100% 0% Target achieved.

Timeous submission to Provincial treasury of an Annual Performance Plan that is compliant to the Department's strategy

1.00 1.00 1.00 100% 0%

Target achieved.

Number of complete service delivery reports submitted to Provincial Treasury

4.00 4.00 4.00 100% 0%

Target achieved.

% reduction in high risks (Top Ten Risks) 70% 75% 84% 112% 12% A risk mitigation action plan was implemented and continuously monitored during the year under review.

% Entity strategies revised for alignment with DEDT strategy

100% 100% 100% 100% 0%

Target achieved.

Number of entity performance reports received and analyzed

44.00 44.00 42.00 95% -5%

Variance immaterial.

Number of strategic platforms facilitated for strategic partnerships

4.00 10.00 16.00 160% 60% The biggest contributor to the formulation of strategic partnerships was the participation of the Department in the World Routes Conference 2013. The conference is a critical platform that is used by the Department to promote the





Annual Performance

Plan (APP)


for 2013/14



13/14


performance


province and the airport in a drive to promote route development.

Number of international platforms participated in 4.00 6.00 6.00 100% 0% Target achieved.




Target for 2013/14 as per Annual

Performance Plan (APP)


for 2013/14



13/14


performance


1.3 Supply Chain Management

Monthly turnaround time reports for bids & quotations

12.00 12.00 12.00 100% 0% Target achieved.

Monthly awards reports against the procurement, annually approved and adjusted procurement plan aligned to the Departmental budget

14.00 14.00 14.00 100% 0% Target achieved.

Bi-annual fully reconciled departmental asset register reports

2.00 2.00 2.00 100% 0% Target achieved.

1.4 Finance Support Services

Monthly turnaround time reports on invoice payments

12.00 12.00 12.00 100% 0% Target achieved.

Accurate & punctual IYM & Annual/Interim Financial Statements

16.00 16.00 16.00 100% 0% Target achieved.

Annually approved updated risk management register and monthly risk management reports.

13.00 13.00 13.00 100% 0% Target achieved.




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance


1.5 Human Resource Management and Development

100% of staff assessed by 30 June each year 1.00 100% - 0% -100% The reason for the variance is that Programmes Heads (Chair of respective IRC) did not complete assessments. The delay in finalizing the assessment of staff for the year 2011/2012 was only finalized in December 2013. With regard to the financial year 2012/ 2013, the process is in the process




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance


of being finalized. The 2013/2014 financial year assessment reports are just being attended to.

Accurate & punctual submission of all HR Legislative Reports 12.00 16.00 16.00 100% 0% Target achieved.

Vacancy rate of 10 % 0.10 10% 16.50% -7% -65.00% The provincial cost cutting circular stipulates that only critical posts must be filled. Furthermore, the department is undergoing a restructuring exercise. This has resulted in unfilled posts in compliance with the circular and also pending the finalisation and approval of the new structure.

To facilitate 100% of approved training each year 100% 100% 80% 80% -20% Training could not be executed as planned as there were serious delays with the scm process of appointing service providers.

1.6 Legal Services

Monthly turnaround time report on all Legal Services. 12.00 12.00 12.00 100% 0% Target achieved.




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance


Monthly updated contracts register. 12.00 12.00 12.00 100% 0% Target achieved.

Zero default judgments - - - 100% 0% Target achieved.

1.7 Auxiliary Services

Quarterly assessment report on physical facilities 4.00 4.00 4.00 100% 0% Target achieved.

All Departmental records stored & accessible from Auxiliary as per all relevant acts.

1.00 1.00 1.00 100% 0% Target achieved.

1.8 Security Services

Monthly Reports on the effectiveness of the electronic security system and security guards

12.00 12.00 12.00 100% 0% Target achieved.

Monthly Reports on the effective security classification of documents and a fully effective registry

12.00 12.00 12.00 100% 0% Target achieved.

Monthly Reports on the vetting of staff and service providers 12.00 12.00 12.00 100% 0% Target achieved.

1.9 Information and Communication Technology

Monthly report on IT fault resolutions & IT acquisitions. 12.00 12.00 7.00 58% -42% Monthly reports for quarters 1 and 2 were not obtainable from SITA because the Service Level Agreement was not signed. SITA did however continue rendering services to the Department on the basis on an extension letter whilst SLA drafting and costing was ongoing. During this period there




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance


were no reports and invoices that were received from SITA. These were then received after the extension letter was signed and sent to SITA.

Quarterly reports on implementation of MSP. 4.00 4.00 - 0% -100% The IT Strategy has not been approved by Top management. The approval of the MSP will enable the implementation of the resultant initiatives as outlined in the strategy.




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance


Programme 2 : Integrated Economic Development Services

2.1 Enterprise Development




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



Number of existing SMMEs supported** (Number of SMME's assisted to access funding)

445.00 400.00 45.00 11% -89% The current negative economic climate coupled with poor quality of loan application and tightned credit extension environment by banks contributed to less achievement of this target. To overcome this we have engaged with other stakeholders and launched Pre-Financing and Business Support Programme which we believe will improve the current situation and lead to achievement of the target.

Number of new SMME's developed** (Number SMMEs develop trained in pre-finance and business support programme)

2,101.00 436.00 648.00 149% 49% Target was overachieved due to an increased number of SMMEs attending workshops than was anticipated. This was as a result of us enriching our training with productivity awarenes and pre-finance.




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



Number of SMME's registered in KZN that have been in operation for more than 2 years

N/A 15,622.00 - 0% -100% Registration of business entities is a national competency under CIPC. CIPC could not provide us with required stats claiming that they do not have them. This is a provincial indicator that the department was instructed to put on the APP. Going forward the of indicator not being measurable will be discussed with Provincial Treasury and agreed that if can’t be measured indicator will be removed on APP.

Number of new jobs created through the establishment of SMMEs N/A 436.00 2,817.00 646% 546%

Number of existing co-operatives supported** 138.00 29.00 29.00 100% 0% Target achieved.

Number of new co-operatives developed** 50.00 71.00 210.00 296% 196% The target was over-achieved due to an increased demand and additional DEDT internal capacity (District Coops Trainers).

Number of primary co-operatives trained and mentored in business & co-oprative management and technical skills

123.00 100.00 374.00 374% 274% The target was over-achieved due to an increased demand and additional DEDT internal




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



capacity (District Coops Trainers).

Number of students awarded bursaries 105.00 154.00 134.00 87% -13% The target was not achived due to drop out through various reasons (failure or deaths).

Number of co-operatives business proposals and loan applications submitted to various funds

50.00 50.00 53.00 106% 6% The target was over-achieved due to an increased demand and availability of funding both internally and external.

2.2 Regional and Local Economic Development

Number of economic development projects supported at local and regional levels

12.00 11.00 12.00 109% 9% An additional approved project (RSDI SPF) was not anticipated to be contracted in 2013/14 fy




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



Number of sustainable local employment opportunities supported 120.00 164.00 131.00 80% -20% It is usually a difficult task to forecast employment opportunities that will be created via funding for the various projects. The negative variance relates specifically to delays in certain beneficiary projects not meeting contracting conditions. These included Ecocycle Waste Management, Sizabantu Forestry, Sihleza Community Forestry. The Behr project was also suspended due to external market factors that were not anticipated. Clemcor was voluntarily terminated by the beneficiaries due to external market factors as a result commodity price changes that rendered the business unviable. As a result, the forecast target was not met.




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



Number of capacity building interventions to municipalities 1.00 1.00 1.00 100% 0% Target achieved.

Number of people trained (all projects) 175.00 190.00 705.00 371% 271% Higher than expected results were due to ad hoc (non-accredited) training initiatives specifically related to Operation Vuselela, the UKZN capacity building programme, Richmond Municipality Special Initiative project and other project specific training. As these are spin-offs from funded projects, an accurate forecast is very difficult.

Number of LED Plans developed or reviewed 2.00 10.00 11.00 110% 10% The positive variance is immaterial. Included review of LED Strategy for Ethekwini Metro.

Number of RLED Forums Supported 4.00 11.00 13.00 118% 18% Target was over-achieved due to an additional one RLED Forum supported in 13/14fy than planned.




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



2.3 Economic Empowerment

Number of target groups specific opportunities identified*** 2.00 2,000.00 5,715.00 286% 186% Target was over-achieved due to additional funding resources being made available in the middle of the financial term to support Mandela Career Expos.

Number of target groups specific interventions*** 1,500.00 500.00 - 0% -100% Target was cancelled due to funding constraints experienced by the dept after finalisation of the APP.

Number of B-BBEE Verification Certificates Issued. 1.00 5.00 4.00 80% -20% The remaining B-BBEE Verification Certificate for KZN DOT was undertaken by National - DOT and was thus outside our control. Certificate to be handed over once all national processes are complete.

Number of stakeholders/structures or strategic partnership coordinated 8.00 11.00 19.00 173% 73% More economic empowerment structures were co-ordinated beyond our set target because of the amendments of youth, women, and BEE




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



Strategies which required thorough consultations.




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance


Programme 3 : Trade and Industry Development

3.1 Trade and Investment Promotion

Number of businesses assisted with export*** 30.00 100.00 75.00 75% -25% This figure is demand-driven based on the number of businesses with export potential that solicited assistance.

The number of investments projects realized*** 1.00 - - 0% 0% Target achieved.

The number of people trained - 210.00 212.00 101% 1% People registered for training were over subscribed by 2




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



3.3 Sector Development Number of jobs created 13.00 35.00 - 0% -100% Planned jobs to be

created through the cutflower project were not realised due to delays by the implementing agent (Agribusiness Development Agency).

Number of feasibility studies/business plans completed 5.00 3.00 - 0% -100% The Charcoal Production and the Leather Processing Feasibility studies were cancelled as they were to be undertaken under the Industrial Economic Hubs Programme. The Dairy Development Strategy was also cancelled as Milk SA was developing a similar strategy.

Number of businesses assisted with proactive interventions*** (Number of parks/hubs initiated/established)

2.00 36.00 375.00 1042% 942% 371 businesses were assisted through the partnership created with the Durban International Film




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



Festival. A further 4 goat commercialisation projects were assisted with infrastructure.

Number of people trained 2,030.00 410.00 816.00 199% 99% 766 people were trained through the ICT and BPO skills development initiative in partnership with Moses Kotane Institute and FET's. A further 50 Crafters were trained through the One Village One Product Programme.

Number of cluster supported 5.00 5.00 4.00 80% -20% The KZN Clothing and Textile Cluster, KZN Fashion Council, Maritime Cluster and Music Cluster were supported during the 2013/14 financial year. The funding agreement for the furniture cluster was not renewed post its three year term.




Annual Performance

Plan (APP)


for 2013/14

Actual performance


for 13/14

Variance between

target and actual

performance



Number of institutions supported to promote economic growth (i.e. KZN Economic Council)

1.00 2.00 2.00 100% 0% Target achieved.





Annual Performance

Plan (APP)

Actual output verified for 2013/14



13/14


performance


Programme 4 : Business Regulations and Governance

4.1 Regulation Services

Number of barriers identified***

2.00 1.00 1.00 100% 0% Target achieved.

Number of barries addressed***

2.00 1.00 1.00 100% 0% Target achieved.

Number of Municipalities monitored and evaluated with implementation of regulations

31.00 31.00 51.00 165% 65%

Target exceeded due to success with the collective MOU with SALGA and COGTA and improved compliance

Number of Municipal Informal Economy Policy Alignment Programmes facilitated

11.00 11.00 27.00 245% 145% Target exceeded due to success with the collective MOU with SALGA and COGTA and improved compliance

4.2 Consumer Protection

Number of education programmes conducted***

1,100.00 1,333.00 1,260.00 95% -5% Target not achieved due to resignation of 1 staff member in the 3rd quarter which affected programmes conducted

Number of partnerships established and maintained with Regulators and other stakeholders

64.00 193.00 539.00 279% 179% Additional partnerships acquired

Number of complaints received***

9,000.00 9,000.00 5,106.00 57% -43% The complaining process depends on the need for the public to lodge complaints and cannot be driven by the Department.

Number of complaints resolved***

3,000.00 3,000.00 1,751.00 58% -42% Qualitative evidence for the 1st quarter could not be verified, leading to non achievement of the target in that quarter. This matter had been corrected in the subsequent quarters.

Number of inspections conducted

192.00 288.00 619.00 215% 115% Target exceeded as a result of the heightened awareness and trend reports from consumer complaints on which areas need to be investigated

4.3 Liquor Regulation

Number of liquor authority monitoring reports (Tracking the

N/A 4.00 4.00 100% 0% Target achieved.

effectiveness of the Liquor Authority in regulating the liquor industry)

No. of reviews of the legislative framework relating to Liquor , consumer and Regulation services

N/A 3.00 5.00 167% 67% Target exceeded due to legislative oversight demands which had increased in the last year due to the exploration of the new regulatory prescripts

Programme / Sub-programme / Performance Measures




Annual Performance

Plan (APP)


for 2013/14

Actual performance as a percentage of annual target

for 13/14

Variance between target

and actual performance


Programme 5 : Economic Planning

5.1 Policy and Planning

Number of economic strategies developed*** 1.00 1.00 1.00 100% 0% Target achieved.

Number of strategies reviewed*** 1.00 - - 0% 0% National indicator not planned for by the Department.

Number of Publications distributed to stakeholders 6.00 6.00 6.00 100% 0% Target achieved.

Number of operational economic statistical portal 1.00 1.00 1.00 100% 0% Target achieved.

5.3 Knowledge Management

Number of Provincial Intellegence Reports produced*** 1.00 1.00 1.00 100% 0% Target achieved.

Number of projected analysis reports produced 6.00 6.00 6.00 100% 0% Target achieved.

No. of PMIS reports submitted to senior management 6.00 6.00 6.00 100% 0% Target achieved.

5.4 Research and Development

Number of Research develeopment supported 5.00 4.00 4.00 100% 0% Target achieved.

Number of research reports 5.00 8.00 8.00 100% 0% Target achieved.

Number of economic sector specific studies 5.00 4.00 4.00 100% 0% Target achieved.

Report on the state of the compliance of the province with PGDP

1.00 2.00 2.00 100% 0% Target achieved.

5.4 Monitoring and Evaluation

Number of monitoring reports produced*** 12.00 14.00 15.00 107% 7% Additional monitoring was as a result of a need to monitor a particular

Programme / Sub-programme / Performance Measures




Annual Performance

Plan (APP)


for 2013/14

Actual performance as a percentage of annual target

for 13/14




Programme 5 : Economic Planning

project closely to track progress.

Number of evaluation report produced*** 5.00 5.00 5.00 100% 0% Target achieved.

Number of stakeholders trained on M&E 55.00 30.00 59.00 197% 97% The variance is a result of demand for training, which led to more training sessions being conducted than originally planned.







for 2013/14

Actual performance as a percentage of

annual target for 13/14




Programme 6 : Tourism Development

6.1 Tourism Planning

Number of tourism collaborative structures established and sustained

4.00 6.00 9.00 150% 50% The variance was due to additional efforts made by the department to establish more structures in compliance with the Tourism Master Plan which emphasises the need for such key stakeholder coordinating structures aimed at driving tourism growth.

Number of Tourism research, Policies, Strategies and Frameworks identied and developed

4.00 3.00 6.00 200% 100% The additional reports developed was the business plan for the Drakensberg Cable Car and inception reports for the Tourism Sector Strategies for Ulundi and Nongoma Local municipalities. This was over and above the strategies themselves.

6.2 Tourism Growth and Development







for 2013/14







Number of Niche Tourism Product Developed 5.00 3.00 5.00 167% 67% The variance was due to revision of available budget for project following the temporary withdrawal of Bhambatha Lodge project and its budget had to be allocated to other three additional projects and that was after the APP had been approved.

Number of individuals/businesses complying with legislation

350.00 400.00 575.00 144% 44% The Department was able to send out notices to remind business owners and tourist guides to renew hence a positive response. Also the hosting of the international tourists guides day by KZN contributed to the increased numbers.

6.3 Tourism Sector Transformation







for 2013/14







Number of tourism businesses complying with sector codes

50.00 50.00 50.00 100% 0% Target achieved.

Number services excellence initiatives designed and implemented

1.00 2.00 2.00 100% 0% Target achieved.

Number of peole trained and develeoped in tourism 6,966.00 5,550.00 5,009.00 90% -10% The variance is due to the suspension of the provincial tourism careers expo which could have attracted 5000 learners, students and unemployed graduates. This was due to the repriotisation of provincial careers events which had to involve all sectors not just tourism led by the youth empowerment unit hence tourism expo was put on ice. The numbers achieved was due to collaborative efforts with other stakeholders who shared similar objectives.

5. TRANSFER PAYMENTS

5.1. Transfer payments to public entities

The Department has a public entity oversight framework where one of the monthly monitoring

reports for public entities is the monthly cash flows by each public entity. On a quarterly basis the

monitoring system in addition to the monthly cash flow report, each public entity must also

submit a quarterly performance report with quarterly actuals against all its targets that were

tabled in the Annual Performance Plan. These quarterly reports are then discussed with each

public entity during what is called a Quarterly performance meeting.

Name of Entity

Nature of Operations Amount Transferred

(R’000)

Amount Spent (R’000)

KwaZulu- Natal Trade and Investment

To attract foreign and domestic investment and to generate exports and exports capacity in KwaZulu Natal.

75 084 73 738

Tourism KwaZulu- Natal

Directly or indirectly develop, promote and market tourism into and within the province of KwaZulu-Natal

99 983 83 777

KwaZulu- Natal Sharks Board

To undertake, initiate and approve measures for safeguarding bathers against shark attack in the Province.

59 985 21 304

Dube Trade Port Corporation

Ensure the strategic planning, establishment, design, construction, operation, management and control of the Dube TradePort;

Identify, develop, market and promote investment opportunities in the Dube TradePort;

575 402 566 697

Moses Kotane Institute

To empower individuals through specialist education and training in mathematics, science, engineering, technology and business process outsourcing that will assist them to become employable, enhance service delivery and create employment opportunities for others.

36 300 34 992

Richards Bay Industrial Development Zone

To accelerate and improve infrastructure for industrial development through the government’s Industrial Development Zone (IDZ) Programme

25 164 24 860

Ithala Development Finance Corporation

Mobilising financial resources and providing financial and supportive services to persons domiciled, ordinarily resident, or carrying on business within the Province;

Planning, executing, financing and monitoring the implementation of development projects

115 000 (This was for the recapitalisation of Ithala Limited)

Name of Entity

Nature of Operations Amount Transferred

(R’000)

Amount Spent (R’000)

and programmes in the Province;

Promoting, assisting and encouraging the development of the Province's human resources and its social, economic, financial and physical infrastructure;

Promoting, encouraging and facilitating private sector investment in the Province and the participation of the private sector and community organisations in development projects and in contributing to economic growth and development generally;

Acting as the government's agent for performing any development-related tasks and responsibilities that the government considers may be more efficiently or effectively performed by a corporate entity;

148 000

(This was for the Enterprise Development Fund for on lending to SMMEs and Coops)

37 000

(This was for the establishment of the KZN Small Business Development Agency)

KwaZulu-Natal Growth Fund Trust

The Trust is the custodian of the KZN Growth Fund a structured debt fund. The “Fund” is a closed, pooled infrastructure project debt fund and is to fund capital projects above R30m;

620 102 (This re-appropriated from Ithala as the Growth Fund Trust is no longer an Ithala subsidiary)

KwaZulu-Natal Liquor Authority

To control and regulate the retail sale and micro manufacturing of liquor in the province;

43 920 43 512

KwaZulu-Natal Film Commission

To promote and market the Province as a global destination for film production;

To develop, promote and market, locally, nationally and internationally, the film industry in the Province;

To facilitate investment in the film industry in the Province;

6 030 4 216

5.2. Transfer payments to all organisations other than public entities

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

CYCLING SOUTH AFRICA

Non Profit Cycling SA Yes 8 700 8 700 N/A

UNIVERSITY OF KWAZULU NATAL

Non Profit Durban International Film Festival

Yes 1 500 1 500 N/A

SOLESSA PRODUCTION CC

Private Enterprise

Durban Beach Festival

Yes 1 000 1 000 N/A

FACT DURBAN ROCKS PTY LTD

Private Enterprise

Fact Durban Rocks

Yes 1 000 1 000 N/A

TZZ PRODUCTION AND

ENTERTAINEMTN

Private Enterprise

Umgababa New Year's Picnic

Yes 1 000 1 000 N/A

VARIOUS COOPERATIVES

Private Enterprise

Co-operative Funding

Yes 10 248 10 248 N/A

SEDA ETHEKWINI Private Enterprise

SEDA eThekwini Yes 3 000 3 000 N/A

YELLODOT MEDIA AND RISK

Private Enterprise

KZN Youth and Women Co-op

Bus. Indaba

Yes 1 500 1 500 N/A

BLACK PEPER EVENTS & MEDIA

CORP

Private Enterprise

Township to township marathon

Yes 1 000 1 000 N/A

ENTERPRISE ILEMBE Private Enterprise

Kinga Shaka memorial site

Yes 400 400 N/A

GOLDEN FALLS TRADING

499(PTY)LTD

Private Enterprise

Urban Music Tour

Yes 2 700 2 700 N/A

ANZOMODE(PTY)LTD Private Enterprise

Umlazi Festival and Expo

Yes 2 100 2 100 N/A

EYONA ENTERTAINMENT

Private Enterprise

uMphithi Spring Music Festival

Yes 1 963 1 963 N/A

NOMNOTHO COMMUNICATION &

EVENTS

Private Enterprise

SMME Conference

Yes 2 000 2 000 N/A

FINASTINC(PTY)LTD Private Enterprise

Durban underground

Yes 700 700 N/A

DA BASS Private Enterprise

Rchars Bay Imbizo

Yes 2 000 2 000 N/A

ABENDABUKO TRADING & PROJECTS

Private Enterprise

Kasi Tours Yes 700 700 N/A

CONTENTO PTY LTD Private Enterprise

Ibeache Experience

Yes 1 500 1 500 N/A

KWANDEAFRICA (PTY) LTD

Private Enterprise

Amantshontsho Kamaskandi

awards

Yes 2 000 2 000 N/A

MTV NETWORKS AFRICA PTY LTD

Private Enterprise

MTV Awards Yes 14 082 14 082 N/A

SABC Private Enterprise

X Factor Yes 5 000 5 000 N/A

TIGERE PRODUCTIONS

(PTY)LTD

Private Enterprise

Take Me Out Yes 5 000 5 000 N/A

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

VANGIVINSTA (PTY)LTD

Private Enterprise

Edu-Sport(WORLD JAM MUSIC FESTIVAL)

Yes 9 100 9 100 N/A

ETHEKWINI MARITIME CLUSTER

Private Enterprise

Maritime Strategy

Yes 2 000 2 000 N/A

KZN FASHION COUNCIL

Private Enterprise

KZN Fashion Council

Yes 3 000 3 000 N/A

KWAXIMBA WOMEN COOPERATIVE

Private Enterprise

Women In Tourism

Yes 500 500 N/A

TONGAAT HULLET Private Enterprise

Operation vuselela

Yes 3 317 3 317 N/A

TONGAAT HULLET Private Enterprise

Tongaat Hullet Cane trans

Yes 4 862 4 862 N/A

Yes N/A

PART C: GOVERNANCE

1. INTRODUCTION

Good governance is a critical factor in the successful execution of the Department’s

mandate and vision. With the assistance of the Provincial Treasury, the Department

has established and institutionalized risk management structures and activities

within the Department.

2. RISK MANAGEMENT

Matters of risk management are discussed at Top management meetings. The

Provincial Cluster Audit committee is furnished with progress updates on the

implementation of mitigating strategies on risks the department is faced with to

strengthen the control environment. The department is gradually developing into

more robust risk management culture. A new organisational structure has been

proposed in order to strengthen the Risk management component.

There is regular interaction with Provincial Cluster Audit committee. The Audit

committee advises the department on risk management matters and independently

monitors the effectiveness of the system of risk management.

The department has adopted the approved Provincial risk management framework.

Regular risk assessments are conducted to determine the effectiveness of risk

management strategy and to identify new and emerging risks .Risks are identified

through risk workshops as well as through the department's strategies and

subsequently the risk register is updated.

The department has a Risk Management Committee that advises management on

the overall system of risk management, especially the mitigation of unacceptable

levels of risk. The committee mainly facilitates the management of risk facing the

department and ensures appropriate action is taken to address those risks.

3. FRAUD AND CORRUPTION

The department has an approved fraud prevention plan. The plan incorporates a

fraud response policy which features mechanisms in place to report fraud and

corruption. It also includes a whistle blowing policy to limit the risk of employees

victimisation.

The department recognises that in order to effectively prevent fraud all fraudulent

activities detected by employees and other stakeholders are reported and

investigated. All cases are reported to Provincial Treasury though the National Anti –

corruption. The forensic unit within Provincial Treasury conducts independent

investigations and provides reports to department for implementation of

recommendations.

The department has identified a need to improve the mechanisms in place to

mitigate the fraud and corruption risks. The main focus area for 2014/15 financial

year is creating awareness of the fraud prevention plan through education and

communication.

4. INTERNAL CONTROL UNIT

Internal control unit focused on the following crucial arrears for 2013/14.

1. Compliance with prescripts ( BAS and Hardcat payments )

2. Conducted follow up review on the implementation of recommendations made by

the Auditor – General in 2012/13

3. Conducted follow up review on the implementation of recommendations made by

the Treasury – Internal Audit in 2012/13

4. Irregular expenditure

5. Fleet management

6. SCM compliance

7. Internal investigations

8. Fruitless and wasteful expenditure

5. MINIMISING CONFLICT OF INTEREST

The Department of Performance Monitoring (DPME) in the Office of the Presidency found

best practice initiatives in Discipline Management in DEDT and the Department was used as

a case study. The Management Performance assessment Tool (MPAT) introduced three

years ago confirmed good practices in the analysis and implementation of strategies to

reduce levels of misconduct in DEDT. Some of the best practices relate to analysis of the

nature of code of conduct breaches and embarking on the necessary preventative steps like

disciplinary hearings and knowledge management processes to create awareness.

The Department has realized that conflicts of interest – actual or perceived – can cause great

harm to the organization. The one real key to avoiding the serious damage that a conflict of

interest at work could cause is developing and maintaining a healthy “sensitivity” to the

potential problem. In this context, a healthy “sensitivity” means (a) understanding the

concept of conflict of interest, (b) being able to spot a conflict of interest in your midst, and

(c) knowing how to remove or diminish the dangers a conflict of interest represent.

In this regard employees have been made to understand what a “Conflict of Interest” is.

Prevention is the best cure for most problems and workshops and newsletters have been

initialized on a project basis. The department conducts its own analysis of all labour related

issues and during the last financial year information from the Office of the Auditor General

was used to sensitize and also implement corrective counselling where employees had not

sought permission to conduct remunerative work for example. From 2013 to date the

Department saw a decline in Code of Conduct violations; Remunerative Work without

permission in particular, and an increase in compliance with the Remunerative Work Policy

due to the training interventions that LR embarked on.

6. CODE OF CONDUCT

DEDT has the Code of Conduct displayed throughout the building and regular workshops are

conducted on the subject. The frequencies of workshops are aligned to performance

agreements of officials tasked with the function.

All breaches of the Code of Conduct are dealt in terms of the Disciplinary Code; PSCBC

Resolution 1 of 2003.

7. HEALTH SAFETY AND ENVIRONMENTAL ISSUES

At DEDT we aim to foster a safe and healthy work environment for our employees. Our

building is well maintained and cleaned regularly. It is however a gross concern that the

building doesn’t have windows.

We have a prevention program which ensures that our employees are protected from risks

that are adverse to their health whilst ensuring an environment that is conducive. Few IOD’s

have been reported. We evaluate our working environment regularly. We have endorsed a

number of preventative measures that have helped eliminate reasons for illness and risks in

our environment.

Education and Awareness is done regularly regarding occupational hygiene with additional

focus on keeping healthy and fit. Health screenings are done at least once a quarter and all

employees are included.

8. PORTFOLIO COMMITTEES

DEDT Portfolio Committee

The Department met with the DEDT Portfolio Committee quarterly during 2013/14 FY.

Deliberations in these meetings related to the Department’s performance both financial and

non-financial as well as global and domestic economic issues and its impact on the Province

of KwaZulu-Natal’s economy. These discussions would often focus on rising inflation rates,

job losses and growth of sectors etc. The Department tabled the Consumer Protection Bill,

Liquor Licensing Amendment Bill as well as the Broad-Based Black Economic Empowerment

Bill to the Committee.

Finance Portfolio Committee

During the 2013/14 financial year, the Department met with the Finance Portfolio

Committee to present its quarterly financial performance against the annual budget of the

Department. Service delivery of the Department as well as that of the entities of the

Department was discussed.

SCOPA

All SCOPA resolutions that were taken by SCOPA during the 2013/14 were accordingly

responded to by the Department and its entities.

9. INTERNAL AUDIT

The internal audit function of the Department is provided by the internal audit unit of the

Provincial Treasury through a shared service arrangement. The activities undertaken by the

unit were informed by an annual plan which was approved by the Audit Committee of the

Department.

10. AUDIT COMMITTEE REPORT

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

1. Objective and responsibility of the Audit and Risk Committee The Provincial Audit and Risk Committee (PARC) has been established to assist the KZN Provincial Government in fulfilling its oversight responsibilities for the integrity of financial reporting processes, system of internal control over financial reporting, audit process for monitoring compliance with laws and regulations and KZN Provincial Government Code of conduct, fraud prevention, the risk management process and any other good governance processes. The Provincial Audit and Risk Committee reports that it has complied with its responsibilities arising from the Public Finance Management Act, No.1 of 1999 (PFMA), Treasury Regulations 3.1, including all other related prescripts. The Provincial Audit and Risk Committee also reports that it adopted appropriate formal terms of reference as its Provincial Audit and Risk Committee Charter, regulated its affairs in compliance with this charter and discharged all its responsibilities as contained therein. The Committee is therefore, pleased to present its report for the financial year ended 31 March 2014. 2. Audit Committee Members and Attendance

The KwaZulu-Natal Provincial Government has established the PARC as the shared audit committee for its provincial departments. The PARC is further sub-divided into three Cluster Audit and Risk Committees (CARCs) to provide oversight to provincial departments – i.e. with the Department of Economic Development and Tourism being served by the Economic CARC. The PARC and the Economic CARC consists of the members listed below. As per its approved terms of reference, the Economic CARC and PARC should meet at least 4 times per annum respectively. During the financial year under review, four (4) PARC and four (4) Economic CARC meetings were held as outlined below.

# Name of Member PARC

Meetings

Attended

Economic CARC

Meetings Attended

1. Ms T Tsautse

(Chairperson)

4 4

2. Ms M Mothipe 4 N/A

3. Mr V Naicker 2 N/A

# Name of Member PARC

Meetings

Attended

Economic CARC

Meetings Attended

4. Ms N Jaxa 4 4

5. Mr L Mangquku 4 4

6. Mr F Docrat 4 N/A

7. Mr T Boltman 4 N/A

- N/A = Not a member of the Economic CARC - PARC meetings, include 2 special meetings.

3. The Effectiveness of Internal Control The Committee has reviewed the reports of the Internal Auditors, the Audit report on the Annual Financial Statements and Management Report of the Auditor General of South Africa (AGSA) and has noted with concern, the weaknesses in controls around the following areas:

Human Resource Management

Supply Chain Management

Enterprise Development Fund

Contract Management

Expenditure Management (i.e Irregular, Unauthorised, Fruitless and wasteful) Risk Management

With regard to risk management, the Committee has noted that the department has not taken full responsibility and ownership for compliance with section 38(1)(a)(i) of the PFMA, which requires the Accounting Officer to ensure the maintenance of an effective system of internal control and risk management. During the period under review, the department was assisted by the Provincial Internal Audit Services in updating its risk register, and tracking progress in the implementation of risk mitigation plans. We, are however, pleased that the department has now employed a capable Risk Manager who will assist the department to comply fully with section 38(1)(a)(i) of the PFMA. In order to improve the general control environment in relation to risk management, the department had been advised to:

- Ensure that completed risk mitigation plans are validated, measured and the risk register regularly updated;

- Report on emerging risks, if any, on a quarterly basis; - The Provincial Internal Audit Service capacitates the department and its Risk

Management Officer to enable them to execute the risk management activities on their own.

- Establish additional capacity in the department to ensure that each Programme has the risk champion that will be responsible for undertaking the daily risk management responsibilities and report to the Risk Management Officer.

Forensics Investigations

During the period under review, the Committee noted that there were seven (7) forensic

investigations relating to the supply chain management irregular practices, that the

department has referred to the Provincial Internal Audit Services for investigation. Three (3)

of these investigations were completed, and the other four (4) were still in progress. The

department and the Provincial Internal Audit Service are urged to promptly finalize the

outstanding investigations, and work together to implement recommendations on the

finalized investigation.

The Committee is unable to comment on the completeness of the investigations conducted during the year under review as the department has failed to respond to the request to furnish the Provincial Internal Audit Services (PIAS) with a list of any other in-house or outsourced investigations to other service providers by the Department. As a result, the committee is unable to further comment on the completeness of the department’s fraud risk profile. Quality of in year management and monthly/quarterly reports

The Committee was satisfied with the content and quality of quarterly reports in respect of in year management and quarterly performance reports submitted in terms of the PFMA and the Division of Revenue Act prepared and issued by the Accounting Officer of the Department during the year under view. The Committee has also noted the improvement around Performance Information wherein no material findings were identified. 4. Evaluation of Financial Statements The Committee has:

Reviewed and discussed the audited Annual Financial Statements to be included in the Annual Report, with the Auditor General and the Accounting Officer;

Reviewed the Auditor General’s Management Report and Management’s response thereto;

Reviewed the Department’s processes for compliance with legal and regulatory provisions and a concern has been noted in regards to non-compliance with the relevant laws, regulations and the related prescripts in place to prevent irregular expenditure and, fruitless and wasteful expenditure as a result by the department.

Reviewed material adjustments resulting from the audit of the Department and has noted that the material misstatements were adequately corrected. The Committee is however concerned that financial information with material errors had been presented for audit. This area that requires immediate attention and the Department has been urged to devise improvement strategies to address the weakness.

The Committee concurs and accepts the Auditor General’s opinion regarding the Annual Financial Statements, and proposes that the Audited Annual Financial Statements be accepted and read together with the report of the Auditor General. 5. Internal Audit In line with the PFMA and the King III Report on Corporate Governance requirements, Internal Audit Function provides the Audit Committee and Management with reasonable assurance that the internal controls are adequate and effective. This is achieved through the implementation of a risk based Internal Audit plan. The Committee has, through the CARC monitoring processes, considered internal audit reports issued after assessing the adequacy and effectiveness of controls designed to mitigate the risks associated with operational and strategic activities of the department, as well as the appropriateness of the of corrective actions provided by management to improve the control environment. The Internal Audit function was effective during the period under review and there were no unjustified restrictions or limitations. The Committee will in the forthcoming year, monitor progress to ensure that the Internal Audit Function continues to add value to the department and achieves its optimal performance. The Committee also monitored the implementation of Internal Audit recommendations to the Department. 6. Auditor-General’s Report The Committee has throughout the financial year, constantly monitored the implementation of corrective action plans to address the audit issues raised in the prior year by the Auditor General. The Committee has met with the Auditor General of South Africa to ensure that there were no unresolved issues that emanated from the current regulatory audit. The Committee will ensure that corrective actions on the detailed findings emanating from the current regulatory audit are monitored on a quarterly basis through the CARC processes. 7. Appreciation The Committee wishes to express its appreciation to the Management of the Department, the Auditor General of South Africa, and the Provincial Internal Audit Services for the co-operation and information they have provided to enable us to compile this report.

_________________________ Ms T Tsautse Chairman: KZN Provincial Audit and Risk Committee 11 August 2014

PART D: HUMAN RESOURCE MANAGEMENT

1. INTRODUCTION

The information contained in this part of the annual report has been prescribed by the

Minister for the Public Service and Administration for all departments in the public service.

2. OVERVIEW OF HUMAN RESOURCES

Overall the status of Human Resources in the Department may be regarded as being good.

This statement is underpinned by independent and objective assessments conducted by

outside institutions. In terms of the MPAT assessments conducted by the Presidency, HR in

general has been assessed as the second best in the Province and Labour Relations in

particular has been assessed as the best in the country. This is indeed an accolade worth

mentioning.

Furthermore, an independent assessment of PERSAL conducted by the Office of the Premier

has returned an assessment of 100% compliance. The outcome of the audit conducted by

the Office of the Auditor General has also returned a clean audit of HR activities.

The HR priorities for the year is largely focussed on the successful integration of

Environmental Management, the compilation of an appropriate structure for the

department and the compilation of a new HR Plan for the department.

Although in previous years there has been a lag in the timeous processing of performance

assessments the department has caught up and completed the assessments on the

performance of its employees. It can be mentioned that assessments are now up to date.

Over the year in question, the uptake by employees of services offered in the Employee

Assistance Programme has been exponential. Employees now have full confidence in the

EAP services being offered and the value that may be derived therefrom. With additional

resource allocation (both human and financial), the EAP Programme may prove to be more

beneficial in sustaining a healthier work force and reducing the number of days that

employees may be utilising for sick leave.

It is envisaged that in the current year the department will finalise the full transformation of

Human Resources from a transactional environment to HR being repositioned as a strategic

business partner to the department.

3. HUMAN RESOURCES OVERSIGHT STATISTICS

3.1. Personnel related expenditure

The following tables summarises the final audited personnel related expenditure by

programme and by salary bands. In particular, it provides an indication of the following:

amount spent on personnel

amount spent on salaries, overtime, homeowner’s allowances and medical aid.

Table 3.1.1 Personnel expenditure by programme for the period 1 April 2013 and 31 March

2014 Programme Total

expenditure

(R’000)

Personnel

expenditure

(R’000)

Training

expenditure

(R’000)

Professional

and special

services

expenditure

(R’000)

Personnel

expenditure

as a % of total

expenditure

Average personnel

cost per employee

(R’000)

Administration 102 350 61 299 7 620 33 431 59.9 414

Integrated Economic Development

86 286 45 649 3 732 36 905 52.9 359

Trade & Sector Development

26 274 7 644 0 18 630 29.1 449

Business Regulations & Governance

15 814 14 845 0 969 93.9 401

Economic Planning

16 878 10 490 0 6 388 62.2 388

Tourism 125 681 9 277 0 116 404 7.4 40

Total 373 283 149 204 11 352 212 727 40 351

Table 3.1.2 Personnel costs by salary band for the period 1 April 2013 and 31 March 2014 Salary band Personnel expenditure

(R’000)

% of total

personnel cost

No. of employees Average personnel cost

per employee (R’000)

Lower skilled (Levels 1-2) 0 0 0 0

Skilled (level 3-5) 2 480 1.7 11 225

Highly skilled production (levels

6-8) 23 368 15.7 95 246

Highly skilled supervision (levels

9-12) 75 183 50.4 149 505

Senior and Top management

(levels 13-16) 31 791 21.3 33 963

Others 16 382 11 137 120

Total 149 204 100 425 351

Table 3.1.3 Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for

the period 1 April 2013 and 31 March 2014

Programme

Salaries Overtime Home Owners

Allowance

Medical Aid

Amount

(R’000

Salaries as

a % of

personnel

costs

Amount

(R’000)

Overtime

as a % of

personnel

costs

Amount

(R’000)

HOA as a %

of

personnel

costs

Amount

(R’000)

Medical aid as a

% of personnel

costs

Administration 38 772 63.3 763 1.2 1 274 2.1 1965 3.2

Integrated Economic Development

31 060 68 17 0.04 719 1.6 870 2

Trade & Sector Development

4 777 62.5 0 0 137 1.8 268 3.5

Programme

Salaries Overtime Home Owners

Allowance

Medical Aid

Amount

(R’000

Salaries as

a % of

personnel

costs

Amount

(R’000)

Overtime

as a % of

personnel

costs

Amount

(R’000)

HOA as a %

of

personnel

costs

Amount

(R’000)

Medical aid as a

% of personnel

costs

Business Regulations & Governance

9 856 66.4 66 0.4 245 1.7 539 3.6

Economic Planning

7 114 67.7 0 0 199 3.1 160 1.5

Tourism 6 833 73.7 0 0 30 0.03 55 0.6

Total 98 412 66 846 0.6 2 604 1.8 3 857 2.6

Table 3.1.4 Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for

the period 1 April 2013and 31 March 2014

Salary band

Salaries Overtime

Home Owners

Allowance

Medical Aid

Amount

(R’000

Salaries as

a % of

personnel

costs

Amount

(R’000)

Overtime

as a % of

personnel

costs

Amount

(R’000)

HOA as a %

of

personnel

costs

Amount

(R’000)

Medical aid

as a % of

personnel

costs

Skilled (level 1-

2)

0 0 0 0 0 0 0

Skilled (level 3-

5)

1 704 68.7 0 0 176 7.1 263 10.6

Highly skilled

production

(levels 6-8)

13 369 57.2 123 0.5 923 4 1 494 6.4

Highly skilled

supervision

(levels 9-12

51 760

68.8

709 0.9 1 055 1.4 1 808 2.4

Senior

management

(level 13-16)

23 413 73.7 0 0 450 1.4 292 0.9

Others 8 166 49.9 14 0.1 0 0 0 0

Total 98 412 66 846 0.6 2 604 1.8 3857 2.6

3.2. Employment and Vacancies

The tables in this section summarise the position with regard to 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

salary band

critical occupations (see definition in notes below).

Table 3.2.1 Employment and vacancies by programme as on 31 March 2014

Programme Number of

posts on

approved

establishment

Number

of posts

filled

Vacancy

Rate

Number of employees

additional to the

establishment

Administration 111 116 21.4 32

Business Regulations 34 32 10.3 5

Integrated Economic Development 105 89 15.4 38

Trade and Industry 50 11 25.9 6

Economic Planning 11 20 17.9 7

Tourism 25 20 41.2 49

TOTAL 355 288 20.7 137

Table 3.2.2 Employment and vacancies by salary band as on 31 March 2014

Salary band Number of posts

on approved

establishment

Number of posts

filled

Vacancy Rate Number of

employees

additional to the

establishment

Lower skilled ( 1-2) 0 0 0 0

Skilled(3-5) 12 11 8.3 0

Highly skilled

production (6-8) 118 95 19.5 0

Highly skilled

supervision (9-12) 185 149 19.5 0

Senior management

(13-16) 41 33 19.5 0

Others 0 0 0 137

Total 355 288 18.9 137

Table 3.2.3 Employment and vacancies by critical occupations as on 31 March 2014

Critical occupation Number of posts

on approved

establishment

Number of posts

filled

Vacancy Rate Number of employees

additional to the

establishment

Administrative related 118 98 16.9 0

Communication and

information related

7 7 0 0

Finance and economic

related

18 17 5.6 0

General legal

administration and

professionals

7 3 57.1 0

Human resource related 30 26 13.3 0

Light vehicle drivers 2 2 0 0

Messengers, porters 1 1 0 0

Secretaries and other

keyboard operating

41 33 19.5 0

Critical occupation Number of posts

on approved

establishment

Number of posts

filled

Vacancy Rate Number of employees

additional to the

establishment

Trade and industry

advisor and related

87 63 27.5 0

Senior managers 41 35 14.6 0

VIP protection 3 3 0 0

Others 0 0 0 137

Total 355 288 18.9 137

Notes

Critical occupations are defined as occupations or sub-categories within an occupation –

(a) in which there is a scarcity of qualified and experienced persons currently or

anticipated in the future, either because such skilled persons are not available or

they are available but do not meet the applicable employment criteria;

(b) for which persons require advanced knowledge in a specified subject area or science

or learning field and such knowledge is acquired by a prolonged course or study

and/or specialised instruction;

(c) where the inherent nature of the occupation requires consistent exercise of

discretion and is predominantly intellectual in nature; and

(d) in respect of which a department experiences a high degree of difficulty to recruit or

retain the services of employees.

3.3. Filling of SMS Posts

The tables in this section provide information on employment and vacancies as it relates to

members of the Senior Management Service by salary level. It also provides information on

advertising and filling of SMS posts, reasons for not complying with prescribed timeframes

and disciplinary steps taken.

Table 3.3.1 SMS post information as on 31 March 2014 SMS Level Total

number of

funded SMS

posts

Total number

of SMS posts

filled

% of SMS

posts filled

Total number of SMS

posts vacant

% of SMS posts vacant

Director-General/

Head of

Department

1 1 100 0 0

Salary Level 16 0 0 0 0 0


Salary Level 14 12 9 75 3 25

Salary Level 13 25 22 88 3 12

Total 41 35 85.3 6 14.6

Table 3.3.2 SMS post information as on 30 September 2013 SMS Level Total

number of

funded SMS

posts

Total number

of SMS posts

filled

% of SMS

posts filled

Total number of SMS

posts vacant


Director-General/

Head of

Department

1 1 100 0 0


Salary Level 15 3 2 66.7 1 33.3

Salary Level 14 12 9 75 3 25

Salary Level 13 25 21 54 4 16

Total 41 33 80.5 8 19.5

Table 3.3.3 Advertising and filling of SMS posts for the period 1 April 2013 and 31 March

2014 SMS Level Total

number of

funded SMS

posts

Total number

of SMS posts

filled

% of SMS

posts filled

Total number of SMS

posts vacant


Director-General/

Head of

Department

0 0 0 0 0



Salary Level 14 3 1 3 100


Total 9 3 7 77.8

Table 3.3.4 Reasons for not having complied with the filling of funded vacant SMS -

Advertised within 6 months and filled within 12 months after becoming vacant for the period

1 April 2013and 31 March 20ZZ

Reasons for vacancies not advertised within six months

Posts were withheld pending restructuring within the Department

Reasons for vacancies not filled within six months


Table 3.3.5 Disciplinary steps taken for not complying with the prescribed timeframes for

filling SMS posts within 12 months for the period 1 April 2013 and 31 March 2014

Reasons for vacancies not advertised within six months


Reasons for vacancies not filled within six months


3.4. Job Evaluation

The following table 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 3.4.1 Job Evaluation by Salary band for the period 1 April 2013 and 31 March 2014 Salary band Number of

posts on

approved

establishment

Number of

Jobs

Evaluated

% of posts

evaluated

by salary

bands

Posts Upgraded Posts downgraded

Number % of posts

evaluated

Number % of posts

evaluated

Lower Skilled

(Levels1-2)

0 0 0 0 0 0 0

Skilled (Levels 3-5) 12 0 0 0 0 0 0

Highly skilled

production (Levels 6-

8)

118 0 0 0 0 0 0

Highly skilled

supervision

(Levels 9-12)

184 0 0 0 0 0 0

Senior Management

Service Band A

25 1 0 0 0 0 0

Senior Management

Service Band B

12 0 0 0 0 0 0

Senior Management

Service Band C

3 0 0 0 0 0 0

Senior Management

Service Band D

1 0 0 0 0 0 0

Total 355 1 0 0 0 0 0

The following table provides a summary of the number of employees whose positions were

upgraded due to their post 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 3.4.2 Profile of employees whose positions were upgraded due to their posts being

upgraded for the period 1 April 2013 and 31 March 2014 Gender African Asian Coloured White Total

Female 14 1 0 0 15

Male 10 0 0 0 10

Total 24 1 0 0 25

Employees with a disability 0

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

Table 3.4.3 Employees with salary levels higher than those determined by job evaluation by

occupation for the period 1 April 20YY and 31 March 2014

Occupation Number of

employees

Job evaluation level Remuneration

level

Reason for deviation

Total number of employees whose salaries exceeded the level determined by job evaluation None

Percentage of total employed

The following table summarises the beneficiaries of the above in terms of race, gender, and

disability.

Table 3.4.4 Profile of employees who have salary levels higher than those determined by job

evaluation for the period 1 April 2013 and 31 March 2014 Gender African Asian Coloured White Total

Female 0 0 0 0 0

Male 0 0 0 0 0

Total 0 0 0 0 0

Employees with a disability 0 0 0 0 0

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 and critical

occupations (see definition in notes below).

Table 3.5.1 Annual turnover rates by salary band for the period 1 April 2013 and 31 March

2014 Salary band Number of employees at

beginning of period-1

April 2013

Appointments

and transfers

into the

department

Terminations

and transfers

out of the

department

Turnover rate

Lower skilled ( Levels 1-2) 0 0 0 0

Skilled (Levels3-5) 11 1 0 0

Highly skilled production (Levels 6-8) 95 7 5 5.3

Highly skilled supervision (Levels 9-

12)

149 8 8 5.4

Senior Management Service Bands A 21 0 1 4.8

Senior Management Service Bands B 9 1 0 0

Senior Management Service Bands C 2 1 0 0

Senior Management Service Bands D 1 1 0 0

Contracts 0 0 0 0

Total 288 19 14 4.9

Table 3.5.2 Annual turnover rates by critical occupation for the period 1 April 2013 and 31

March 2014 Critical occupation Number of employees

at beginning of period-

April 20YY

Appointments

and transfers

into the

department

Terminations

and transfers

out of the

department

Turnover rate

Administrative related 98 8 2 2.0

Communication and Information

Technology related

7 0 0

Finance & Economics related 17 0 0 0

General Legal administration &

professionals

3 0 0 0

Human Resources related 26 1 1 3.9

Light vehicle drivers 2 1 0 0

Messengers, porters 1

Secretaries and other keyboard

operators

33 2 3 9.1

Trade & Industry Advisors & related 65 4 7 11.1

VIP Protection 3 0 0 0

Senior Managers 33 3 1 2.9

TOTAL 288 19 14 4.9

Critical occupations are defined as occupations or sub-categories within an occupation –

(a) in which there is a scarcity of qualified and experienced persons currently or

anticipated in the future, either because such skilled persons are not available or

they are available but do not meet the applicable employment criteria;

(b) for which persons require advanced knowledge in a specified subject area or

science or learning field and such knowledge is acquired by a prolonged course or

study and/or specialised instruction;

(c) where the inherent nature of the occupation requires consistent exercise of

discretion and is predominantly intellectual in nature; and

(d) in respect of which a department experiences a high degree of difficulty to recruit

or retain the services of employees.

The table below identifies the major reasons why staff left the department.

Table 3.5.3 Reasons why staff left the department for the period 1 April 2013 and 31 March

2014 Termination Type Number % of Total Resignations

Death 0 0

Resignation 8 53.3

Expiry of contract 0 0

Dismissal – operational changes 0 0

Dismissal – misconduct 1 6.7

Dismissal – inefficiency 0 0

Discharged due to ill-health 0 0

Retirement 0 0

Transfer to other Public Service Departments 5 35.7

Other 0 0

Total 14 100

Total number of employees who left as a % of total

employment

4.7

Table 3.5.4 Promotions by critical occupation for the period 1 April 2013 and 31 March 2014 Occupation Employees

1 April 20YY

Promotions

to another

salary level

Salary level

promotions as a %

of employees by

occupation

Progressions to

another notch

within a salary

level

Notch progression as

a % of employees by

occupation

Administrative Related 98 3 3 70 71.4

Communications &

Information

Technology related

7 0 0 4 57.1

Finance & Economics

related

17 0 0 14 82.4

General Legal

Administration &

professionals

3 2 66.7 1 33.3

Human Resources

Related

26 1 3.6 16 61.5

Light vehicle drivers 2 0 0 0 0

Messengers , porters 1 0 0 0 0

Secretaries & other

keyboard operators

33 1 3 17 51.5

Trade & Industry

Advisors & related

63 1 1.6 54 85.7

VIP protection 3 0 0 0 0

Senior Managers 35 0 0 31 88.6

TOTAL 288 8 2.8 208 72.2

Table 3.5.5 Promotions by salary band for the period 1 April 2013 and 31 March 2014 Salary Band Employees

1 April

2013

Promotions

to another

salary level

Salary bands

promotions as a

% of employees

by salary level

Progressions

to another

notch within a

salary level

Notch progression as a % of

employees by salary bands

Lower skilled (

Levels 1-2)

0 0 0 0 0

Skilled (Levels3-5) 11 0 0 11 100

Highly skilled

production (Levels

6-8)

95 1 1.1 60 63.2

Highly skilled

supervision (Levels

9-12)

147 7 4.8 106 72.1

Senior Management

(Level 13-16)

35 0 0 31 88.6

Total 288 8 2.8 208 72.2

3.6. Employment Equity

Table 3.6.1 Total number of employees (including employees with disabilities) in each of the

following occupational categories as on 31 March 2014 Occupational

category

Male Female Total

African Coloured Indian White African Coloured Indian White

Legislators, senior

officials and

managers

21 0 2 1 8 0 2 0 35

Professionals /

Specialists

59 0 7 2 71 1 7 2 149

VIP Protection/

Drivers

5 0 0 0 0 0 0 0 5

Clerks 0 0 0 0 0 0 0 0 0

Administrative

Related

47 0 0 0 51 0 4 1 99

Messengers 0 0 0 0 0 0 0 0 0

PA’s 0 0 0 0 0 0 0 0 0

Practitioners 0 0 0 0 0 0 0 0 0

Elementary

occupations

0 0 0 0 0 0 0 0 0

Total 117 0 10 3 142 1 16 3 288

Employees with

disabilities

2 0 0 0 1 0 0 1 4

Table 3.6.2 Total number of employees (including employees with disabilities) in each of the

following occupational bands as on 31 March 2014 Occupational band Male Female Total


Top Management 3 1 0 0 0 0 0 0 4

Senior

Management

18 0 2 1 8 0 2 0 31

Professionally

qualified and

experienced

specialists and mid-

management

40 0 5 2 42 0 5 1 95

Skilled technical

and academically

qualified workers,

junior

management,

supervisors,

foreman and

superintendents

47 0 3 0 84 1 9 2 146

Semi-skilled and

discretionary

decision making

9 0 0 0 2 0 0 0 11

Unskilled and

defined decision

making

0 0 0 0 1 0 0 0 1

Total 117 1 10 3 137 1 16 3 288

Table 3.6.3 Recruitment for the period 1 April 2013 to 31 March 2014 Occupational band Male Female Total



Senior Management

1 0 1

Professionally qualified and experienced specialists and mid-management

2 0 1 0 3 0 0 0 6

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

1 0 0 0 7 0 1 0 9

Semi-skilled and discretionary decision making

1 0 0 0 0 0 0 0 1

Unskilled and defined decision making

0 0 0 0 0 0 0 0 0

Total 6 1 11 1 19

Employees with disabilities

0 0 0 0 0 0 0 0 0

Table 3.6.4 Promotions for the period 1 April 2013 to 31 March 2014 Occupational band Male Female Total


Top Management

0 0 0 0 0 0 0 0 0

Senior Management 0 0 0 0 0 0 0

Professionally qualified

and experienced


management

3 1 3 7

Skilled technical and

academically qualified

workers, junior

management,

supervisors, foreman

and superintendents

0 0 0 0 0 0 0 0 0

Semi-skilled and

discretionary decision

making

0 0 0 1 1

Unskilled and defined

decision making

0 0 0 0 0 0 0 0 0

Total


3 1 4 0 0 0 8

Table 3.6.5 Terminations for the period 1 April 2013 to 31 March 2014 Occupational band Male Female Total



Senior Management 1 0 0 0 0 0 0 0 1

Professionally qualified

and experienced


management

6 0 0 0 2 0 0 0 8

Skilled technical and

academically qualified

workers, junior

management,

supervisors, foreman

and superintendents

0 0 0 0 4 1 5

Semi-skilled and

discretionary decision

making

0 0 0 0 0 0 0 0 0

Unskilled and defined

decision making

0 0 0 0 0 0 0 0 0

Total 7 0 0 0 6 0 1 14

Employees with

Disabilities

Table 3.6.6 Disciplinary action for the period 1 April 2013 to 31 March 2014 Disciplinary action Male Female Total


23 0 0 0 9 0 0 1 33

Table 3.6.7 Skills development for the period 1 April 2013 to 31 March 2014 Occupational category Male Female Total


Legislators, senior officials and managers

21 0 2 1 7 0 2 0 33

Professionals 64 0 6 1 66 1 7 2 147

Administrative related 34 0 1 0 65 0 7 1 108

Clerks 0 0 0 0 0 0 0 0 0

Service and sales workers

0 0 0 0 0 0 0 0 0

Skilled agriculture and fishery workers

0 0 0 0 0 0 0 0 0

Craft and related trades workers

0 0 0 0 0 0 0 0 0

Plant and machine operators and assemblers

0 0 0 0 0 0 0 0 0

Elementary occupations 0 0 0 0 0 0 0 0 0

Total 119 0 9 2 138 1 16 3 288


1 2 1

3.7. Signing of Performance Agreements by SMS Members

All members of the SMS must conclude and sign performance agreements within specific

timeframes. Information regarding the signing of performance agreements by SMS

members, the reasons for not complying within the prescribed timeframes and disciplinary

steps taken is presented here.

Table 3.7.1 Signing of Performance Agreements by SMS members as on 31 May 2013 SMS Level Total number of

funded SMS posts

Total number of SMS

members

Total number of

signed performance

agreements

Signed performance

agreements as % of

total number of SMS

members

Head of

Department

1 1 1 100

Salary Level 16 0 0 0 0

Salary Level 15 3 3 2 66.7

Salary Level 14 12 9 7 77.8

Salary Level 13 25 22 16 72.7

Total 41 35 25 71.4

Table 3.7.2 Reasons for not having concluded Performance agreements for all SMS members

as on 31 March 2014

Reasons

The department had embarked on a re-alignment process and some SMS members were affected by this

process. It was intended that those members would complete their PA’s once this process has been

finalised by the Head of Department.

Table 3.7.3 Disciplinary steps taken against SMS members for not having concluded

Performance agreements as on 31 March 2014

Reasons

No steps taken

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, disability, salary bands and critical occupations (see definition in notes below).

Table 3.8.1 Performance Rewards by race, gender and disability for the period 1 April 2013 to

31 March 2014

Race and Gender

Beneficiary Profile Cost

Number of

beneficiaries

Number of

employees

% of total within

group

Cost

(R’000)

Average cost

per

employee

African

Male 54 94 62.8 249 5

Female 81 131 74.8

311

4

Asian

Male 4 8 62.5 88 22

Female 11 14 78.6 56 5

Coloured

Male 0 0 0 0 0

Female 1 1 100 3 3

White

Male 1 2 50 8 8

Female 2 3 33.3 17 9

Total 154 253 69.6 732 5

Table 3.8.2 Performance Rewards by salary band for personnel below Senior Management

Service for the period 1 April 2013 to 31 March 2014

Salary band

Beneficiary Profile Cost Total cost as a %

of the total

personnel

expenditure

Number of

beneficiaries

Number of

employees

% of total

within salary

bands

Total Cost

(R’000)

Average cost per

employee

Lower Skilled

(Levels 1-2)

0 0 0 0 0 0

Skilled (level

3-5)

9 11 81.8 34 4 1.4

Highly skilled

production

(level 6-8)

51 95 53.7 109 2 0.5

Highly skilled

supervision

(level 9-12)

85 147 57.8 515 6 0.7

Total 145 253 57.3 658 5 0.003

Table 3.8.3 Performance Rewards by critical occupation for the period 1 April 2013 to 31

March 2014

Critical occupation

Beneficiary Profile Cost

Number of

beneficiaries

Number of

employees

% of total

within

occupation

Total Cost

(R’000)

Average cost

per employee

Administrative related 55 98 56.1 35 0.6

Communication &

information related

4 7 57.1 18 4

Finance & Economic

related

13 17 76.5 52 4

General Legal

Administration &

professionals

1 3 33.3 7 7

Human Resources related 16 26 61.5 83 5

Light vehicle drivers 0 2 0 0 0

Messengers, porters 0 1 0 0 0

Secretaries & other

keyboard operators

15 33 45.5 37 2

Trade and Industry

Advisors & related

professions

41 63 65.1 350 9

VIP Protectors 0 3 0 0 0

SMS 9 35 25.7 150 17

Total 154 288 53.5 732 5

Table 3.8.4 Performance related rewards (cash bonus), by salary band for Senior

Management Service for the period 1 April 2013 to 31 March 2014

Salary band

Beneficiary Profile Cost Total cost as a %

of the total

personnel

expenditure

Number of

beneficiaries

Number of

employees

% of total

within salary

bands

Total Cost

(R’000)

Average cost per

employee

Band A 0 20 0 0 0 0

Band B 0 8 0 0 0 0

Band C 0 2 0 0 0 0

Band D 0 1 0 0 0 0

Total 0 31 0 0 0 0

3.9. Foreign Workers

The tables below summarise the employment of foreign nationals in the department in terms of salary band and major occupation.

Table 3.9.1 Foreign workers by salary band for the period 1 April 2013 and 31 March 2014 Salary band 01 April 2013 31 March 2014 Change

Number % of total Number % of total Number % Change

Lower skilled 0 0 0 0 0 0

Highly skilled

production (Lev.

6-8)

0 0 0 0 0 0

Highly skilled

supervision (Lev.

9-12)

0 0 0 0 0 0

Contract (level

9-12)

4 80 4 80 0 0

Contract (level

13-16)

1 20 1 20 0 0

Total 5 100 5 100 0 0

Table 3.9.2 Foreign workers by major occupation for the period 1 April 2013 and 31 March

2014

Major

occupation

01 April 2013 31 March 2014 Change

Number % of total Number % of total Number % Change

Professional &

Managers

5 100 5 100 0 0

3.10. Leave utilisation

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 and

disability leave. In both cases, the estimated cost of the leave is also provided.

Table 3.10.1 Sick leave for the period 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)

Lower Skills (Level 1-2)

Skilled (levels 3-5) 99 84.8 9 4.1 11 40

Highly skilled production

(levels 6-8)

460 75.7 72 32.7 6 299

Highly skilled supervision

(levels 9 -12)

881 86.8 102 46.4 9 1 502

Top and Senior management

(levels 13-16)

76 75 16 7.3 5 238

Others 68 60 21 9.5 3 35

Total 1 584 84 220 100 7 2 114

Table 3.10.2 Disability leave (temporary and permanent) for the period 1 January 2013 to 31

December 2013 Salary band Total days % Days with

Medical

certification

Number of

Employees

using

disability

leave

% of total

employees

using

disability

leave

Average

days per

employee

Estimated

Cost

(R’000)

Lower skilled (Levels 1-2) 0 0 0 0 0 0

Skilled (Levels 3-5) 0 0 0 0 0 0

Highly skilled production

(Levels 6-8)

0 0 0 0 0 0

Highly skilled supervision

(Levels 9-12)

229 100 5 100 46 479

Senior management (Levels

13-16)

0 0 0 0 0 0

Total 229 100 5 100 46 479

The table below 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 3.10.3 Annual Leave for the period 1 January 2013 to 31 December 2014

Salary band Total days taken Number of Employees using

annual leave

Average per employee

Lower skilled (Levels 1-2) 0 0 0

Skilled Levels 3-5) 209 12 17

Highly skilled production (Levels 6-

8)

2 055 100 21

Highly skilled supervision(Levels 9-

12)

3 219 149 22

Senior management (Levels 13-16) 686 32 21

Others 728 96 7

Total 6 897 389 18

Table 3.10.4 Capped leave for the period 1 January 2013 to 31 December 2014 Salary band Total days of capped

leave taken

Number of

Employees using

capped leave

Average number of

days taken per

employee

Average capped

leave per employee

as on 31 Dec 2013

Lower skilled (Levels 1-2) 0 0 0 0

Skilled Levels 3-5) 0 0 0 0

Highly skilled production (Levels 6-8)

0 0 0 0

Highly skilled supervision(Levels 9-12)

24 3 8 84

Senior management (Levels 13-16)

0 0 0 0

Total 24 3 8 84

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

Table 3.10.5 Leave payouts for the period 1 April 2013 and 31 March 2014 Reason Total amount

(R’000)

Number of

employees

Average per

employee (R’000)

Leave payout for 2013/14 due to non-utilisation of leave

for the previous cycle

0 0 0

Capped leave payouts on termination of service for

2013/14

0 0 0

Current leave payout on termination of service for

2013/14

104 7 84

Total 104 7 14

3.11. HIV/AIDS & Health Promotion Programmes

Table 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

None

Table 3.11.2 Details of Health Promotion and HIV/AIDS Programmes (tick the applicable

boxes and provide the required information)

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.

√

Mr. G Naidu

2. Does the department have a dedicated unit or has it designated specific staff members to promote the health and well-being 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.

√

The EAP Practitioner Budget has been provided within the HR Directorate

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.

√

Counselling services on personal and work-related issues Personal Finance Management programme HIV/AIDS Programme Gender and Disability programme Occupational Health and Safety Health & Productivity Management

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.

√

Mr G Naidu HRM (Chairperson) Nokuthula Dlamini – EAP Practitioner Dr. S Buthelezi – Safety & Security Ms. M Mkhize - OHS

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.

√

The Recruitment, Selection and Benefits Policies and practices Skills development and training policy practices HIV and Wellness policy

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.

√

An HIV/AIDS policy has been approved. The policy clearly outlines that discrimination on the basis on of HIV status is and prohibited. Education and awareness around the issue of HIV/AIDS also assist in dealing with some of the misconceptions and myths around HIV/AIDS. We also have an open door policy where at any time an HIV positive employee can come and discuss his/her concerns. We also have the behaviour change program, stigma fighting program & human rights program.

Question Yes No Details, if yes

7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved.

√

We are vigorously encouraging HCT in the Department and the response has been very positive. We can pin the success of this program to the stigma and behaviour change programs that we have in the Department, more people have participated in the program, however, this year we are targeting at least 75% of our staff. We are also planning to do a prevalence study as this will help us allocate our resources appropriately.

8. Has the department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators.

√

Monitoring the use of sick and vacation leave Baseline employee health and wellness report awaited upon which programme design will be based and will then be reviewed periodically

3.12. Labour Relations

Table 3.12.1 Collective agreements for the period 1 April 2013 and 31 March 2014 Subject matter Date

None

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

Table 3.12.2 Misconduct and disciplinary hearings finalised for the period 1 April 2013 and 31

March 2014 Outcomes of disciplinary hearings Number % of total

Correctional counselling 4 12.1

Verbal warning 0 0

Written warning 27 81.8

Final written warning 1 3

Suspended without pay 0 0

Fine 0 0

Demotion 0 0

Dismissal 1 3

Not guilty 0 0

Case withdrawn 0 0

Total 33 100

Table 3.12.3 Types of misconduct addressed at disciplinary hearings for the period 1 April

2013 and 31 March 2014 Type of misconduct Number % of total

Insubordination 2 5.8

Misuse of state property 1 2.9

Absenteeism 1 2.9

Failure to comply with the HOD’s instruction 25 73.5

Display of disrespect 2 5.8

Using of improper language to the supervisor 1 2.9

Improper conduct 1 2.9

Unauthorised out province and abroad trips 1 2.9

Total 34 100

Table 3.12.4 Grievances logged for the period 1 April 2013 and 31 March 2014 Grievances Number % of Total

Number of grievances resolved 3 100

Number of grievances not resolved 0 0

Total number of grievances lodged 3 100

Table 3.12.5 Disputes logged with Councils for the period 1 April 2013 and 31 March 2014 Disputes Number % of Total

Number of disputes upheld 0 0

Number of disputes dismissed 0 0

Total number of disputes lodged 0 0

Table 3.12.6 Strike actions for the period 1 April 2013 and 31 March 2014 Total number of persons working days lost 0

Total costs working days lost 0

Amount recovered as a result of no work no pay (R’000) 0

Table 3.12.7 Precautionary suspensions for the period 1 April 2013 and 31 March 2014 Number of people suspended 1

Number of people who’s suspension exceeded 30 days 1

Average number of days suspended 137

Cost of suspension(R’000) 251

3.13. Skills development

This section highlights the efforts of the department with regard to skills development.

Table 3.13.1 Training needs identified for the period 1 April 2013 and 31 March 2014

Occupational category Gender Number of

employees as

at 1 April

20YY

Training needs identified at start of the reporting period

Learnerships Skills

Programmes &

other short

courses

Other

forms of

training

Total


Female 9 0 3 0 3

Male 24 0 2 0 2

Professionals Female 76 0 6 0 6

Male 71 0 5 1 6

Technicians and associate professionals

Female 0 0 0 0 0

Male

0 0 0 0 0

Administrative related Female 56 0 9 9

Male 46 0 5 5

Service and sales workers Female 0 0 0 0 0

Male 0 0 0 0 0


Female 0 0 0 0 0

Male 0 0 0 0 0


Female 0 0 0 0 0

Male 0 0 0 0 0

VIP protectors/Drivers Female 0 0 0 0 0

Male 5 0 0 0 0

Elementary occupations Female 0 0 0 0 0

Male 0 0 0 0 0

Sub Total Female 158 0 17 17

Male 130 0 12 1 13

Total 288 0 29 1 30

Table 3.13.2 Training provided for the period 1 April 2013 and 31 March 2014 Occupational category Gender Number of

employees as

at 1 April

20YY

Training provided within the reporting period

Learnerships Skills

Programmes &

other short

courses

Other

forms of

training

Total


Female 9 0 5 0 5

Male

24 0 6 0 6

Professionals Female 76 0 37 0 37

Male 71 0 39 1 40

Technicians and associate professionals

Female 0 0 0 0 0

Male

0 0 0 0 0

Administrative related Female 56 0 41 0 41

Male

47 0 27 0 27

Service and sales workers Female 0 0 0 0 0

Male 0 0 0 0 0


Female 0 0 0 0 0

Male 0 0 0 0 0


Female 0 0 0 0 0

Male 0 0 0 0 0

VIP protectors/Drivers Female 0 0 0 0 0

Male 5 0 0 0 0

Elementary occupations Female 0 0 0 0 0

Male 0 0

Sub Total Female 158 0 83 0 83

Male 130 0 72 0 73

Total 288 0 155 1 156

3.14. Injury on duty

The following tables provide basic information on injury on duty.

Table 3.14.1 Injury on duty for the period 1 April 2013 and 31 March 2014

Nature of injury on duty Number % of total

Required basic medical attention only 0 0

Temporary Total Disablement 0 0

Permanent Disablement 0 0

Fatal 0 0

Total 0 0

3.15. Utilisation of Consultants

The following tables relate information on the utilisation of consultants in the department. In terms of the Public Service Regulations “consultant’ means a natural or juristic person or a partnership who or which provides in terms of a specific contract on an ad hoc basis any of the following professional services to a department against remuneration received from any source:

(a) The rendering of expert advice; (b) The drafting of proposals for the execution of specific tasks; and (c) The execution of a specific task which is of a technical or intellectual nature, but

excludes an employee of a department.

Table 3.15.1 Report on consultant appointments using appropriated funds for the period 1

April 2013 and 31 March 2014

Project title Total number of

consultants that

worked on project

Duration

(work days)

Contract value in

Rand

Zululand Agro-processing hub 1 36 months x 10 day a month

R2304000.00

UMkhanyakude Agricultural Mechanization hub 1 36 months x 10 day a month

R3628800.00

Umzinyathi Coal Beneficiation hub 1 36 months x 10 day a month

R2963520.00

Umgungundlovu Leather processing Hub and Energy Renewable Hub

1 36 months x 10 day a month

R5745600.00

Uthukela Electronics Hub 1 36 months x 10 day a month

R2358720.00

Amajuba Clothing and Textile Hub 1 36 months x 10 day a month

R1512000.00

Umgungundlovu Leather processing Hub 1 30 months x 10 day a month

R1890000.00

Amajuba Clothing and textile hub and Ugu Perishables processing hub

1 30 months x 10 day a month

R1732500.00

Uthukela Electronics Hub 1 23 months x 10 day a month

R2392000.00

Industrial Economic Hub 1 30 months x 10 day a month

R1624000.00

Development of Turnaround plan from Mpaphala Trust farm

4 120 days R 960 313

East 3 Route

3 10 days R 4 893 125

Development of Tourism Strategy and Implementation Plan for Nongoma Local Municipality

3 70 days R 359 891

Development of Tourism Strategy and Implementation Plan for Ulundi Local Municipality

3 69 days R 359 891

Short term Experts (STE’s) to conduct financial, economic and technical viability assessment of applications to the RSDI Strategic Project Fund.

2 47 days R 346 560

Soft Skills Training and Industry Exposure for KZN Unemployment Graduates

3 60 days R 415 000

Verification of DEDT Performance Information for 2012 /2013 Period and Review of Verification Tool.

2 40 days R 497 952

Project title Total number of

consultants that

worked on project

Duration

(work days)

Contract value in

Rand

Co-ordinator for Simon Mabhunu Film Award

3 40 days R 475 500

Facilitator for the Strategic Planning Session

2 40 days R 435 494

Appointment of a service for the Development of a KZN Maritime Institute

4 80 days R 474 032

Appointment of a service provider to Provide Financial Management Services for the KwaZulu- Natal Film Commission

3 80 days R 431 019

Provincial informal Economy Development Strategy

3 120 days R 396 270

Appointment of a service provider to draft the Regulations for the KZN Consumer Protection Act

3 58 days R480 000

Assist the development in drafting the KZN Provincial Licencing Business Bill

3 150 days R480 000

To provide Technical Assistance and other Administrative Duties Financial Management

3 110 days R486 552

Appointment of an independent consultant for project management support Richmond Special Development Initiative

1 252 days R933 838

KZN economic Council 1 252 days R1 643 703

Funding of KZN Executive Liaison Campaign

1 180 days R1 500 000

Management of the KZN Music House for the Department

13 168 days R3 526 500

Management and Mentorship of Makari Agricultural and Multi-purpose Cooperative

1 168 days R 750 000

Total number of projects Total individual

consultants

Total duration

Work days

Total contract value in Rand

30 70 5 404 days R 46 655 707

Table 3.15.2 Analysis of consultant appointments using appropriated funds, in terms of

Historically Disadvantaged Individuals (HDIs) for the period 1 April 2013Y and 31 March 2014 Project title Percentage ownership by HDI

groups

Percentage management by

HDI groups

Number of consultants from

HDI groups that work on the

project

Nil

Table 3.15.3 Report on consultant appointments using Donor funds for the period 1 April

2013 and 31 March 2014 Project title Total Number of consultants that

worked on project

Duration

(Work days)

Donor and contract value in

Rand

Nil

Total number of projects Total individual consultants Total duration

Work days

Total contract value in Rand

Nil

Table 3.15.4 Analysis of consultant appointments using Donor funds, in terms of Historically

Disadvantaged Individuals (HDIs) for the period 1 April 2013 and 31 March 2014 Project title Percentage ownership by HDI

groups

Percentage management by

HDI groups

Number of consultants from

HDI groups that work on the

project

Nil

Nil

3.16. Severance Packages

Table 3.16.1 Granting of employee initiated severance packages for the period 1 April 20YY

and 31 March 20ZZ

Salary band Number of

applications received

Number of

applications referred

to the MPSA

Number of

applications

supported by MPSA

Number of packages

approved by

department

Lower skilled (Levels

1-2)

0 0 0 0

Skilled Levels 3-5) 0 0 0 0

Highly skilled

production (Levels 6-

8)

0 0 0 0

Highly skilled

supervision(Levels 9-

12)

0 0 0 0

Senior management

(Levels 13-16)

0 0 0 0

Total 0 0 0 0

PART E: FINANCIAL INFORMATION

1. REPORT OF THE AUDITOR GENERAL

REPORT OF THE AUDITOR-GENERAL TO KWAZULU-NATAL PROVINCIAL

LEGISLATURE ON VOTE NO. 4: DEPARTMENT OF ECONOMIC DEVELOPMENT AND

TOURISM

REPORT ON THE FINANCIAL STATEMENTS

Introduction

1. I have audited the financial statements of the Department of Economic Development and Tourism set out on pages 113 to 131, 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

2. The accounting officer is responsible for the preparation and fair presentation of the financial statements in accordance with the Modified Cash Standard (MCS) as prescribed by National Treasury and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and Division of Revenue Act of South Africa, 2013 (Act No. 2 of 2013) (DoRA), 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

3. 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.

4. 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 department’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 department’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.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

6. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Department of Economic Development and Tourism as at 31 March 2014 and its financial performance and cash flows for the year then ended, in accordance with the MCS as prescribed by the National Treasury and the requirements of the PFMA and DoRA.

Emphasis of matters

7. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Irregular expenditure

8. As disclosed in note 24 to the financial statements, irregular expenditure of R30, 691 (2013: R33, 142) million was incurred as a result of non-compliance with supply chain management regulations, Treasury Regulations and the PFMA.

Fruitless and wasteful expenditure

9. As disclosed in note 25 to the financial statements, fruitless and wasteful expenditure of R0, 527 million was incurred as a result of non-compliance with supply chain management regulations, Treasury Regulations and the PFMA.

Unauthorised expenditure

10. As disclosed in note 8 to the financial statements, unauthorised expenditure of R15, 571 million was incurred relating to overspending in Programme 6: Tourism being the main division within the department vote.

Significant uncertainty

11. With reference to note 15.5 to the financial statements, the department paid R26, 886 million for an event which did not take place. The department initiated a legal process to recover the funds. An attorney was appointed and the matter is currently pending before the High Court. A debtor was raised in the financial statements and the recovery date of the amount will be determined by the conclusion of the case or a settlement.

Restatement of corresponding figures

12. As disclosed in note 10 and note 44 to the financial statements, the corresponding figures for prepayments for 31 March 2013 have been restated by R52, 108 million as a result of an error discovered during 31 March 2014 in the financial statements of the

Department of economic development and tourism at, and for the year ended, 31 March 2013.

Additional matter

13. I draw attention to the matter below. My opinion is not modified in respect of this matter.

Unaudited supplementary schedules

14. The supplementary information set out on pages 1 to 109 does not form part of the financial statements and is presented as additional information. I have not audited this / these schedule(s) and, accordingly, I do not express an opinion thereon.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

15. 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

16. 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:

Programme 2 : Integrated economic development services on pages XX to XX

Programme 3 Trade and sector development on pages XX to XX

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

18. 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 (FMPPI).

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

Compliance with legislation

20. I performed procedures to obtain evidence that the department had complied with

applicable legislation regarding financial matters, financial management and other related matters. My findings on material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, are as follows:

Expenditure management

21. Effective steps were not taken to prevent unauthorised, irregular and fruitless and wasteful expenditure, as required by section 38(1)(c)(ii) of the PFMA and Treasury Regulation 9.1.1.

Internal control

22. I considered internal control relevant to my audit of the financial statements, annual performance report and compliance with legislation. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on non-compliance with legislation.

Leadership

23. The action plan on supply chain management from the prior year audit findings were not fully implemented as repeat findings were noted.

OTHER REPORTS

Investigations 24. Two investigations relating to mismanagement of funds and irregularities of securing

office accommodation were completed during the year.

25. Five investigations relating to allegations of irregularities in supply chain management processes and abuse of leave by officials are in progress at 31 March 2014.

Pietermaritzburg

31 July 2014

2. ANNUAL FINANCIAL STATEMENTS FOR THE DEPARTMENT OF ECONOMIC DEVELOPMENT AND TOURISM FOR THE YEAR ENDED 31 MARCH 2014

Table of Contents

Appropriation Statement 114

Notes to the Appropriation Statement 120

Statement of Financial Performance 137

Statement of Financial Position 138

Statement of Changes in Net Assets 139

Cash Flow Statement 140

Notes to the Annual Financial Statements (including Accounting policies) 141

Annexures 181

DEPARTMENT OF ECONOMIC DEVELOPMENT AND TOURISM VOTE 4

APPROPRIATION STATEMENT

for the year ended 31 March 2014

2013/14 Department of Economic Development & Tourism

Appropriation per programme

2013/14 2012/13

APPROPRIATION STATEMENT Adjusted

Appropria

tion

Shifting of

Funds

Virement Final

Appropria

tion

Actual

Expendit

ure

Variance Expenditure

as % of final

appropriatio

n

Final

Appropriat

ion

Actual

Expenditu

re

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

1. ADMINISTRATION

Current payment 213,773 - 2,195 215,968 215,968 - 100.0% 214,918 225,414

Transfers and subsidies 65 - - 65 44 21 67.7% 801 795

Payment for capital assets 9,109 - 976 10,085 10,085 - 100.0% 2,152 2,152

Payment for financial assets

- - - - - - -

- -

3. INTEGRATED ECONOMIC

DEVELOPMENT SERVICES

Current payment 126,123 (13,348) 3,405 116,180 116, 180 - 100.0% 174,480 142,674

Transfers and subsidies 959,300 13,348 - 972,648 957,359 15,289 98.4% 263,780 259,294

Payment for capital assets 220 - (28) 192 192 - 100.0.% 751 405

Payment for financial assets - - - - -

- - 4,985 4,985

2 TRADE & SECTOR

DEVELOPMENT

Current payment 69,797 (13,556) (26,778) 29,463 29,463 - 100.0% 64,529 46,373

Transfers and subsidies 729,715

13,556

- 743,271 743,271 - 100.0% 638,946 628,047

Payment for capital assets 20 - (6) 14 14 - 100.0% 47 47

Payment for financial assets - - - - - - - -





4. BUSINESS REGULATION

AND GOVERNANCE

Current payment 25,851 - (1,678) 24,173 24,173 - 100.0% 30,244 30,252

Transfers and subsidies 43,920 - 12 43,932 43,932 - 100.0% 55,966 55,724

Appropriation per programme

2013/14 2012/13


( continued)

Adjusted

Appropria

tion

Shifting of

Funds

Virement Final

Appropria

tion

Actual

Expendit

ure


as % of final

appropriatio

n

Final

Appropriat

ion

Actual

Expenditu

re

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000


Payment for financial assets - - - - - - - - -

5. ECONOMIC PLANNING

Current payment 22,326 (430) (1,442) 20,454 20,454 - 100.0% 18,314 18,314

Transfers and subsidies - - - - -

-

- 3 3

Payment for capital assets


179

-

-

-

(67)

-

112

-

112

-

-

-

100.0%

-

229

-

229

-

6. TOURISM

Current payment

Transfers and subsidies



134,880

179,576

-

-

(39,531)

39,961

-

-

6,404

17,083

32

-

101,753

236,620

32

-

121,840

232,079

32

-

(20,087)

4,541

-

-

119.7%

98.1%

100.0%

-

115,110

204,267

47

-

124,519

198,566

47

-

TOTAL 2,514,971 - - 2,514,971 2,515,20

7

(236) 100,0% 1,789,685 1,737,956





2013/14 2012/13

Final

Appropria

tion

Actual

Expenditure

Final

Appropriation

Actual

Expenditure

TOTAL (brought forward) 2,514,971 2,515,207 1,789,685 1,737,956

Reconciliation with Statement of Financial Performance

ADD

Departmental receipts 6,350 10,457

Actual amounts per statement of financial performance (total revenue) 2,521,321 1,800,142

Actual amounts per statement of financial performance (total expenditure) 2,515,207 1,737,956





Appropriation per economic classification

2013/14 2012/13

Adjusted

Appropria

tion

Shifting of

Funds

Virement Final

Appropria

tion

Actual

Expenditu

re

Variance Expenditu

re

as % of

final

appropria

tion

Final

Appropria

tion

Actual

expenditu

re

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Current payments

Compensation of employees 157,359 - (9,079) 148,280 148,280 - 100.0% 131,322 130,820

Goods and services 435,391 (66,865) (8,814) 359,712 379,799 (20,087) 105.6% 486,246 456,726

Interest and rent on land - - - - - - - - -


Provinces and municipalities 3,643 - 7,183 10,826 10,483 343 96.8% 6,984 4,265

Departmental agencies and accounts 853,271 4,123 - 857,394 856,374 1,020 99.9% 691,466 686,723

Higher Education Institutions 2,780 - - 2,780 - 2,780 - - -

Public corporations and private enterprises

343,913 56,530 9,900 410,343 406,836 3,507 99.1% 332,109 332,109

Non-profit institutions 695,205 6,201 - 701,406 691,388 10,018 98.6% 125,978 112,078

Households 13,638 11 12 13,661 11,478 2,183 84.0% 7,226 7,227

Gifts and donations 126 - - 126 126 - 100.0% 27 27

Payments for capital assets

Buildings and other fixed structures - - - - - - - - -

Machinery and equipment 9,148 - (5,091) 4,057 4,057 - 100.0% 3,215 2,869

Heritage assets - - - - - - - - -

Land and subsoil assets - - - - - - - - -





Software and other intangible assets 497 - 5,889 6,386 6,386 - 100.0% 127 127

Payments for financial assets - - - - - - - 4,985 4,985

Total 2,514,971 - - 2,514,971 2,515,207 (236) 100.0% 1,789,685 1,737,956

2013/14 2012/13


Per Economic Classification

Adjusted

Appropriat

ion

Shifting

of Funds

Virement Final

Appropria

tion

Actual

Expenditu

re

Variance Expenditu

re

as % of

final

appropriat

ion

Final

Appropria

tion

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Current payments


Goods and services 150,610 - 4,015 154,625 154,625 - 100.0% 160,827 171,324


Provinces and municipalities 28 - - 28 7 21 25.0% 27 21

Departmental agencies and accounts

- - - - - - - - -

Higher Education Institutions - - - - - - - - -

Non-profit institutions - - - - - - - - -

Households 11 - - 11 11 - 100.0% 774 774

Gifts and donations 26 - - 26 26 - - - -







Machinery and equipment 8,712 - (5,043) 3,669 3,669 - 100.0% 2,143 2,143

Land and subsoil assets- - - - - - - - - -

Software and other intangible assets

397 - 6,019 6,416 6,416 - 100.0% 9 9

Payments for financial assets - - - - - - 100.0% - -

Total 222,947 - 3,171 226,118 226,097 21 100.0% 217,871 228,361


NOTES TO THE APPROPRIATION STATEMENT for the year ended 31 March 2014


013/14 2012/13


Per Sub - Programme

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

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 30,900 - (376) 30,524 30,524 - 100.0% 23,204 23,204

Transfers and subsidies 10 - - 10 10 - 100.0% 113 113

Payment for capital assets 1,372 - (1,236) 136 136 - 100.0% 148 148


1.2. OFFICE OF THE HOD

Current payment 64,404 - 1,028 65,432 65,432 - 100.0% 55,537 66,033

Transfers and subsidies 26 - - 26 26 - 100.0% 621 621



1.3. FINANCIAL MANAGEMENT

Current payment 23,070 - (596) 22,474 22,474 - 100.0% 20,403 20, 403

Transfers and subsidies 29 - - 29 8 21 27.6% 67 61

Payment for capital assets 2,140 - (24) 2,116 2,116 - 100.0% 1,440 1,440


1.4. CORPORATE SERVICES




Current payment 95,399 - 2,139 97,538 97,538 - 100.0% 115,774 115,774

Transfers and subsidies - - - - - - - - -

Payment for capital assets 5,347 - 2,304 7,651 7,651 - 100.0% 422 422


Total 222,947 - 3,171 226,118 226,097 21 100.0% 217,871 228,361

2013/2014 2012/2013

Programme 2: Integrated

Economic Development Service


Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Current payments


Goods and services 78,744 (13,348) 5,178 70,574 70,574 - 100.0% 134,516 103,237


Provinces and municipalities 2,415 - - 2,415 2,414 1 100.0% 4,466 2,953

Departmental agencies and

accounts

3,000 (3,000) - - - - - - -

Higher Education Institutions 2,780 - - 2,780 - 2,780 - - -




Public corporations and private

enterprises

307,386 16,348 - 323,734 323,427 307 99.9% 249,500 249,500

Non-profit institutions 630,120 - - 630,120 620,102 10,018 98.4% 3,504 504

Households 13,599 - - 13,599 11,416 2,183 83.9% 6,310 6,310

Gifts and Donations - - - - - - - 27 27


Machinery and equipment 220 - (28) 192 192 - 100.0% 751 405


Software and other intangible

assets

- - - - - - - - -

Payments for financial assets - - - - - - - 4,985 4,985

Total 1,085,643 - 3,377 1,089,020 1,073,731 15,289 98.6% 443,996 407,358




2013/14 2012/13

Programme 2: Integrated

Economic Development Service

Per Sub - Programme

Adjusted

Appropriati

on

Shifting

of Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

2.1. ENTERPRISE

DEVELOPMENT

Current payment 53,651 (4,669) 1,101 50,083 50,083 - 100.0% 97,518 65,803

Transfers and subsidies 941,786 4669 - 946,455 931,166 15,289 98.4% 255,773 255,773

Payment for capital assets 150 - (21) 129 129 - 100,0% 588 242

Payment for financial

assets

- - - - - - - 4,985 4,985

2.2. REGIONAL & LOCAL

ECONOMIC

DEVELOPMENT

Current payment 42,690 (8,179) (8,021) 26,490 26,490 - 100.0% 46,373 46,373

Transfers and subsidies 17,514 8,179 - 25,693 25,693 - 100.0% 7,484 2,998



assets

- - - - - - - - -

2.3. ECONOMIC

EMPOWERMENT

Current payment 29,782 (500) 10,325 39,607 39,607 - 100.0% 30,589 30,498

Transfers and subsidies - 500 - 500 500 - 100.0% 523 523

Payment for capital assets - - - - - - - 72 72





assets

- - - - - - - - -

Total 1,085,643 - 3,377 1,089,020 1,073,731 15,289 98.6% 443,996 407,358

2013/2014 2012/2013

Programme 3: Trade & Sector

Development


Adjusted

Appropriation

Shifting

of Funds

Virement Final

Appropria

tion

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Current payments


Goods and services 61,297 (13,556) (24,917) 22,824 22,824 - 100.0% 56,997 38,841


Provinces and municipalities - - - - - - - - -

Departmental agencies and

accounts

648,142 2,344 - 650,486 650,486 - 100.0% 457,361 457,361


Public corporations and

private enterprises

25,164 5,000 - 30,164 30,164 - 100.0% 62,618 62,618

Non-profit institutions 56,385 6,201 - 62,586 62,586 - 100.0% 118,874 107,974

Households 24 11 - 35 35 - 100.0% 93 94

Gifts and donations - - - - - - - - -


Buildings and other fixed

structures

- - - - - - - - -

Machinery and equipment 20 - (6) 14 14 - 100.0% 47 47





Software and other intangible

assets

- - - - - - - - -

Payments for financial assets - - - - - - - - -

Total 799,532 - (26,784) 772,748 772,748 - 100.0% 703,522 674,467

2013/2014

2012/2013

Programme 3:Trade & Sector

Development

Per Sub - Programme

Adjusted

Appropriation

Shifting

of Funds

Virement Final

Appropriation

Actual

Expenditure

Variance Expenditure as

% of final

appropriation

Final

Appropriation

Actual

Expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

3.1. TRADE & INVESTMENT

PROMOTIONS

Current payment

12,527

(4,344)

(2,322)

5,861

5,861

-

100.0%

10,024

6,790


Payment for capital assets - - - - - - - - -

3.2. SECTOR L DEVELOPMENT

Current payment 57,270 (9,212) (24,456) 23,602 23,602 - 100.0% 54,505 39,583




assets

- - - - - - - - -




3.3. STRATEGIC INITIATIVE

Current payment - - - - - - - - -

Transfers and subsidies 25,164 - - 25,164 25,164 - 100.0% 62,618 62,618


Total 799,532 - (26,784) 772,748 772,748 - 100.0% 703,522 674,467

2013/14 2012/13

Programme 4:Business

Regulation & Governance


Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure

Variance Expenditur

e

as % of

final

appropriati

on

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Current payments

Compensation of employees

15,699 - (828) 14,871 14,871 - 100.0%

15,153 15,152

Goods and services 10,152 - (850) 9,302 9,302 - 100.0%

15,091 15,100


Provinces and municipalities

- - - - - - - - -

Departmental agencies and accounts

43,920 - - 43,920 43,920 - 100.0%

55,941 55,699

Higher Education Institutions

- - - - - - - - -


- - - - - - - - -


Households

Gifts and donations

-

-

-

-

12

-

12

-

12

-

-

-

100.0%

-

25

-

25

-


Buildings and other fixed structures

- - - - - - - - -




Machinery and equipment 117 - (108) 9 9 - 100.0%

116 116

Heritage assets - - - - - - - - -


- - - - - - - - -

Payments for financial assets

- - - - - - - - -

Total 69,888 - (1,774) 68,114 68,114 - 100.0%

86,326 86,092

2013/2014 2012/2013

Programme 4: Business Regulation

& Governance

Per Sub - Programme

Adjusted

Appropriation

Shifting

of Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

4.1. REGULATION SERVICES

Current payment 5,078 - (1,483) 3,595 3,595 - 100.0%

3,073 3,073


Payment for capital assets 81 - (81) - - - - 6 6


4.2. CONSUMER PROTECTION

Current payment 20,770 - (527) 20,243

20,243 - 100.0%

17,586 17,586

Transfers and subsidies - - 12 12 12 - 100.0%

25 25

Payment for capital assets 36 - (27) 9 9 - 100.0%

96 96


- - - - - - - - -

4.3. LIQUOR REGULATION

Current payment 3 - 332 335 335 - 100.0%

9,585 9,593

Transfers and subsidies 43,920 - - 43,920

43,920 - 100.0%

55,941 55,699

Payment for capital assets - - - - - - 100.0%

14 14


- - - - - - - - -

Total 69,888 - (1,774) 68,114 68,114 - 100.0%

86,326 86,092




2013/14 2012/13

Programme 5: Economic Planning


Adjusted

Appropriation

Shifting of Funds Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Current payments


Goods and services 9,712 (430) 635 9,917 9,917 - 100.0% 10,771 10,771


Provinces and municipalities - - - - - - - - -

Departmental agencies and accounts - - - - - - - - -



- - - - - - - - -


Households

Gifts and donations

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3

-

3

-



Machinery and equipment 79 - 68 147 147 - 100.0% 111 111


Software and other intangible assets 100 - (136) (36) (36) - 100.0% 118 118


Total 22,505 (430) (1,509) 20,566 20,566 - 100.0% 18,546 18,546




2013/14 2012/13

Programme 5: Economic Planning

Per Sub - Programme

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

5.1. POLICY & PLANNING

Current payment 4,469 (430) 841 4,880 4,880 - 100.0% 4,209 4,209



5.2. RESEARCH &

DEVELOPMENT

Current payment 9,159 - (706) 8,453 8,453 - 100.0% 6,177 6,177

Transfers and subsidies - - - - - - - 3 3

Payment for capital assets - - 85 85 85 - 100.0% 47 47

5.3. KNOWLEDGE

MANAGEMENT




Current payment 2,377 - (399) 1,978 1,978 - 100.0% 1,659 1,659



100 - (100) - - - - 51 51

5.4. MONITORING &

EVALUATION

Current payment 6,321 - (1,178) 5,143 5,143 - 100.0% 6,269 6,269


Payment for capital. assets 36 - (26) 10 10 - 100.0% 13 13

Total 22,505 (430) (1,509) 20,566 20,566 - 100.0% 18,546 18,546

2013/14 2012/13

Programme 6: Tourism


Adjusted

Appropriati

on

Shifting of

Funds

Virement Final

Appropriati

on

Actual

Expenditure


as % of final

appropriatio

n

Final

Appropriati

on

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Current payments

Compensation of employees 10,004 - (721) 9,283 9,283 - 100.0% 7,066 7,066

Goods and services 124,876 (39,531) 7,125 92,470 112,557 (20,087) 121.7% 108,044 117,453





Provinces and municipalities 1,200 - 7,183 8,383 8,062 321 96.2% 2,491 1,291

Departmental agencies and accounts 158,209 4,779 - 162,988 161,968 1,020 99.4% 178,164 173,663



11,363 35,182 9,900 56,445 53,245 3,200 94.3% 19,991 19,991

Non-profit institutions 8,700 - - 8,700 8,700 - 100.0% 3,600 3,600

Households

Gifts and donations

4

100

-

-

-

-

4

100

4

100

-

-

100.0%

100.0%

21

-

21

-



Machinery and equipment - - 26 26 26 - 100.0% 47 47


Software and other intangible assets - - 6 6 6 - 100.0% - -


Total 314,456 430 23,519 338,405 353,951 (15,546) 104.6% 319,424 323,132




2013/14

2012/13

Programme 6: Tourism

Per Sub - Programme

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

6.1. TOURISM PLANNING

Current payment 3,314 - (890) 2,424 2,424 - 100.0% - -

Transfers and subsidies 1,100 - - 1,100 800 300 72.7% - -



- - - - - - - - -

6.2. TOURISM GROWTH & DEVELOPMENT

Current payment 130,475 (39,351) 7,209 98,153 118,240 (20,087) 120.5% 115,110 124,519

Transfers and subsidies 177,976 39,961 17,083 235,020 230,800 4,220 98.2% 204,267 198,566

Payment for capital assets - - - - - - - 47 47





6.3. TOURISM SECTOR TRANSFORMATION

Current payment 1,091 - 85 1,176 1,176 - 100.0% - -

Transfers and subsidies 500 - - 500 479 21 95.8% - -

Payment for capital assets - - 32 32 32 - 100.0% - -


Total 314,456 430 23,519 338,405 353,951 (15,546) 104.6% 319,424 323,132




1. 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 1 (A-F) 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 Programme Final Appropriation

Actual Expenditure Variance R’000 Variance as a % of Final

Appropriation P1 Administration

226,118 226,097 21 0%

P2 Integrated Economic Dev 1,089,020 1,073,731 15,289 1%

P3 Trade and Sector Dev 772,748 772,748 0 0%

P4 Business Regulation 68,114 68,114 0 0%

P5 Economic Planning P6 Tourism

20,566

338,405

20,566

353,951

0

(15,546)

0%

(5%)




The overspending of R15.5m within the programme is due to the following:

Metro awards R4.1m, European Volvo Golf R7.5m, David Tlale Fashion Show R3.6m

The department received insufficient funding for some of the Cabinet events and had to reprioritise within its baseline budget.

4.2 Per Economic classification Final Appropriation

Actual Expenditure

Variance Variance as a % of Final

Appropriation R’000 R’000 R’000 R’000

Current payments Compensation of employees 148,280 148,280 0 0.00%

Goods and services 359,712 379,799 -20,087 -5.58%

Transfers and subsidies Provinces and municipalities 10,826 10,483 343 3.17%

Departmental agencies and accounts 857,394 856,374 1,020 0.12%

Higher Education Institutions 2,780 0 2,780 100.0%

Public corporation and Private Enterprise 410,343 406,836 3,507 0.85% Non-profit institutions 701,406 691,388 10,018 1.43%

Households 13,661 11,478 2,183 15.98% Gifts and donations 126 126 - 0.00% Payments for capital assets Buildings and other fixed structures - - - - Machinery and equipment 4,057 4,057 - 0.00%

Heritage assets - - - - Specialised military assets - - - - Biological assets - - - - Land and subsoil assets - - - - Software and other intangible assets 6,386 6,386 - 0.00% Payments for financial assets - - - -

The over spending within Goods and Services is due to Metro FM Awards R4.1m, European

Volvo Golf R7.5m, David Tlale Fashion Show R3.6m, as detailed above.




Provinces and Municipalities - R300 000 was returned unpaid due to incorrect banking details.

Non Profit Institution - Growth Fund was short paid by R10m due to slow spending in the entity.

Private Enterprises - Under expenditure is due to close out reports that were not received in

time.

Households - underspending is due to students studying towards Co-operative Management at

the University of Zululand, as some of them dropped out without completing the course for the

year.


STATEMENT OF FINANCIAL PERFORMANCE for the year ended 31 March 2014


PERFORMANCE Note 2013/14 2012/13 R'000 R'000 REVENUE

Annual appropriation

1

2,514,971 1,789,685

Departmental revenue 3 6,350 10,457

TOTAL REVENUE 2,521,321 1,800,142

EXPENDITURE Current expenditure

Compensation of employees 5 148,280 130,819 Goods and Services

6 379,799 456,727

Total current expenditure 528,079 587,546 Transfers and subsidies


9

1,976,685

1,142,429 -

Total transfers and subsidies 1,976,685 1,142,429 Expenditure for capital assets

Tangible capital assets 10 4,057 2,869 Software and other intangible assets 10 6,386 127

Total expenditure for capital assets 10,443 2,996 Payments for financial assets 8 - 4,985

TOTAL EXPENDITURE 2,515,207 1,737,956

SURPLUS FOR THE YEAR 6,114 62,186

Reconciliation of Net Surplus for the year Voted funds (236) 51,729

Annual appropriation (236) 51,729 Conditional grants - - Unconditional grants - -

Departmental revenue and NRF Receipts 19 6,350 10,457

SURPLUS FOR THE YEAR 6,114 62,186


STATEMENT OF FINANCIAL POSITION

as at 31 March 2014


POSITION Note 2013/14 2012/13

R'000 R'000 ASSETS

Current assets 48,873 31,311

Unauthorised expenditure 11 15,571 24 Cash and cash equivalents 12

- 20

Prepayments and advances 14 1,956 2,066 Receivables 15 31,346 29,201

Non-current assets 1,008,607 1,008,607

Investments 16 1,008,607 1,008,607

TOTAL ASSETS

1,057,480

1,039,918

LIABILITIES Current liabilities 48,389 30,823

Voted funds to be surrendered to the Revenue Fund

18 (496,080) 23,729

Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund

19 460 6

Bank overdraft 20 543,290 7,063 Payables 21 719 25

TOTAL LIABILITIES 48,389 30,823

NET ASSETS 1,009,091 1,009,095

2013/14 2012/13 R'000 R'000 Represented by:

Capitalisation reserve 1,008,607 1,008,607 Recoverable revenue 484 488

TOTAL 1,009,091 1,009,095


STATEMENT OF CHANGES IN NET ASSETS



NET ASSETS

2013/14 2012/13

R'000 R'000 Capitalisation Reserves

Opening balance 1,008,607 1,008,607 Transfers:

Movement in Equity - - Movement in Operational Funds - - Other movements - -

Closing balance 1,008,607 1,008,607

Recoverable revenue

Opening balance 488 255 Transfers: (4) 233

Debts revised - - Debts recovered (included in departmental receipts) (35) (42) Debts raised 31 275

Closing balance 484 488

TOTAL 1,009,091 1,009,095


CASH FLOW STATEMENT



CASH FLOW

Note 2013/14 2012/13

R'000 R’000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts 1,986,054 1,771,731

Annual appropriated funds received 1.1

1,979,851 1,761,685

Departmental revenue received 3 6,200 10,030 Interest received 3.

3 3 16

Net (increase)/decrease in working capital (16,888) 4,076 Surrendered to Revenue Fund (5,896) (11,586) Surrendered to RDP Fund/Donor - - Current payments (512,532) (587,546) Payments for financial assets - (4,985) Transfers and subsidies paid (1,976,685

) (1,142,429)

Net cash flow available from operating activities 23

(525,947) 29,261

CASH FLOWS FROM INVESTING ACTIVITIES Payments for capital assets 1

0 (10,443) (2,996)

Proceeds from sale of capital assets 3.4

147 411

(Increase)/decrease in loans - - (Increase)/decrease in investments - - (Increase)/decrease in other financial assets - -

Net cash flows from investing activities (10,296) (2,585)

CASH FLOWS FROM FINANCING ACTIVITIES Distribution/dividend received - - Increase/(decrease) in net assets (4) 233 Increase/(decrease) in non-current payables - -

Net cash flows from financing activities (4) 233

Net increase/(decrease) in cash and cash equivalents (536,247) 26,909

Cash and cash equivalents at beginning of period (7,043) (33,952)

Cash and cash equivalents at end of period 24

(543,290) (7,043)


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. However, 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, Act 1 of 1999 (as amended by Act 29 of 1999), and the Treasury Regulations issued in terms of the Act and the Division of Revenue Act, Act 1 of 2012.

1. Presentation of the Financial Statements

1.1 Basis of preparation

The financial statements have been prepared on a modified cash basis of accounting.

Under this basis, the effects of transactions and other events are recognised in the financial

records when the resulting cash is received or paid. The “modification” results from the

recognition of certain near-cash balances in the financial statements as well as the revaluation

of foreign investments and loans and the recognition of resulting revaluation gains and losses.

In addition supplementary information is provided in the disclosure notes to the financial

statements where it is deemed to be useful to the users of the financial statements.

1.2 Presentation currency

All amounts have been presented in the currency of the South African Rand (R) which is also the

functional currency of the department.

1.3 Rounding

Unless otherwise stated all financial figures have been rounded to the nearest one thousand Rand (R’000).

1.4 Comparative figures

Prior period comparative information has been presented in the current year’s financial

statements. Where necessary figures included in the prior period financial statements have

been reclassified to ensure that the format in which the information is presented is consistent

with the format of the current year’s financial statements.


ACCOUNTING POLICIES



1.5 Comparative figures - Appropriation Statement

A comparison between actual amounts and final appropriation per major classification of

expenditure is included in the Appropriation Statement.

2. Revenue

2.1 Appropriated funds

Appropriated funds comprises of departmental allocations as well as direct charges against

revenue fund (i.e. statutory appropriation).

Appropriated funds are recognised in the financial records on the date the appropriation

becomes effective. Adjustments made in terms of the adjustments budget process are

recognised in the financial records on the date the adjustments become effective.

Unexpended appropriated funds are surrendered to the National/Provincial Revenue Fund. Any

amounts owing to the National/Provincial Revenue Fund at the end of the financial year are

recognised as payable in the statement of financial position.

Any amount due from the National/Provincial Revenue Fund at the end of the financial year is

recognised as a receivable in the statement of financial position.

2.2 Departmental revenue

All departmental revenue is recognised in the statement of financial performance when

received and is subsequently paid into the National/Provincial Revenue Fund, unless stated

otherwise.

Any amount owing to the National/Provincial Revenue Fund at the end if the financial year is

recognised as a payable in the statement of financial position.

No accrual is made for amounts receivable from the last receipt date to the end of the reporting

period. These amounts are however disclosed in the disclosure notes to the annual financial

statements.


ACCOUNTING POLICIES



2.3 Direct Exchequer receipts

All direct exchequer receipts are recognised in the statement of financial performance when the

cash is received and is subsequently paid into the National/Provincial Revenue Fund, unless

stated otherwise.

Any amount owing to the National/Provincial Revenue Funds at the end of the financial year is

recognised as a payable in the statement of financial position.

2.4 Direct Exchequer payments

All direct exchequer payments are recognised in the statement of financial performance when

final authorisation for payment is effected on the system (by no later than 31 March of each

year).

2.5 Aid assistance

Aids assistance is recognised as revenue when received.

All in-kind aid assistance is disclosed at fair value on the date of receipt in the annexures to the

Annual Financial Statements

The cash payments made during the year relating to aid assistance projects are recognised as

expenditure in the statement of financial performance when final authorisation for payments is

effected on the system (by no later than 31 March of each year)

The value of the assistance expensed prior to the receipt of funds is recognised as a receivable in

the statement of financial position.

Inappropriately expensed amounts using aid assistance and any unutilised amounts are

recognised as payables in the statement of financial position.

All CARA funds received must be recorded as revenue when funds are received. The cash

payments made during the year relating to CARA earmarked projects are recognised as

expenditure in the statement of financial performance when final authorisation for payments

effected on the system (by no later than 31 March of each year)

Inappropriately expensed amounts using CARA funds are recognised as payables in the

statement of financial position. Any unutilised amounts are transferred to retained funds as they

are not surrendered to the revenue fund.


ACCOUNTING POLICIES



3. Expenditure

3.1 Compensation of employees

3.1.1 Salaries and wages

Salaries and wages are expensed in the statement of financial performance when the final authorisation for payment is effected on the system (by no later than 31 March of each year).

Other employee benefits that give rise to a present legal or constructive obligation are disclosed

in the disclosure notes to the financial statements at its face value and are not recognised in the statement of financial performance or position.

Employee costs are capitalised to the cost of a capital project when an employee spends more than 50% of his/her time on the project. These payments form part of expenditure for capital assets in the statement of financial performance.

3.1.2 Social contributions

Employer contributions to post employment benefit plans in respect of current employees are

expensed in the statement of financial performance when the final authorisation for payment is

effected on the system (by no later than 31 March of each year).

No provision is made for retirement benefits in the financial statements of the department. Any

potential liabilities are disclosed in the financial statements of the National Revenue Fund and

not in the financial statements of the employer department.

Employer contributions made by the department for certain of its ex-employees (such as

medical benefits) are classified as transfers to households in the statement of financial

performance.

3.2 Goods and services

Payments made during the year for goods and/or services are recognised as an expense in the statement of financial performance when the final authorisation for payment is effected on the system (by no later than 31 March of each year).

The expense is classified as capital if the goods and/or services were acquired for a capital project or if the total purchase price exceeds the capitalisation threshold (currently R5, 000). All other expenditures are classified as current.

Rental paid for the use of buildings or other fixed structures is classified as goods and services and not as rent on land.


ACCOUNTING POLICIES



3.3 Interest and rent on land

Interest and rental payments are recognised as an expense in the statement of financial performance when the final authorisation for payment is effected on the system (by no later than 31 March of each year). This item excludes rental for the use of buildings or other fixed structures. If it is not possible to distinguish between payment for the use of land and the fixed structures on it, the whole amount should be recorded under goods and services.

3.4 Payments for financial assets

Debts are written off when identified as irrecoverable. Debts written-off are limited to the

amount of savings and/or underspending of appropriated funds. The write off occurs at year-

end or when funds are available. No provision is made for irrecoverable amounts but an

estimate is included in the disclosure notes to the financial statements.

All other losses are recognised when authorisation has been granted for the recognition thereof.

3.5 Transfers and subsidies

Transfers and subsidies are recognised as an expense when the final authorisation for payment is effected on the system (by no later than 31 March of each year).

3.6 Unauthorised expenditure

When confirmed unauthorised expenditure is recognised as an asset in the statement of

financial position until such time as the expenditure is either approved by the relevant authority,

recovered from the responsible person or written off as irrecoverable in the statement of

financial performance.

Unauthorised expenditure approved with funding is derecognised from the statement of

financial position when the unauthorised expenditure is approved and the related funds are

received.

Where the amount is approved without funding it is recognised as expenditure in the statement

of financial performance on the date stipulated in the Act.

3.7 Fruitless and wasteful expenditure

Fruitless and wasteful expenditure is recognised as expenditure in the statement of financial

performance according to the nature of the payment and not as a separate line item on the face

of the statement. If the expenditure is recoverable it is treated as an asset until it is recovered


ACCOUNTING POLICIES



from the responsible person or written off as irrecoverable in the statement of financial

performance.

3.8 Irregular expenditure

Irregular expenditure is recognised as expenditure in the statement of financial performance. If

the expenditure is not condoned by the relevant authority it is treated as an asset until it is

recovered or written off as irrecoverable.

4. Assets

4.1 Cash and cash equivalents

Cash and cash equivalents are carried in the statement of financial position at cost.

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.

4.2 Other financial assets

Other financial assets are carried in the statement of financial position at cost.

4.3 Prepayments and advances

Amounts prepaid or advanced are recognised in the statement of financial position when the

payments are made and are derecognised as and when the goods/services are received or the

funds are utilised.

Prepayments and advances outstanding at the end of the year are carried in the statement of

financial position at cost.

4.4 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.


ACCOUNTING POLICIES



4.5 Investments

Capitalised investments are shown at cost in the statement of financial position.

Investments are tested for an impairment loss whenever events or changes in circumstances indicate that the investment may be impaired. Any impairment loss is included in the disclosure notes.

4.6 Loans

Loans are recognised in the statement of financial position when the cash is paid to the

beneficiary. Loans that are outstanding at year-end are carried in the statement of financial

position at cost plus accrued interest.

Amounts that are potentially irrecoverable are included in the disclosure notes.

4.7 Inventory

Inventories that qualify for recognition must be initially reflected at cost. Where inventories are

acquired at no cost, or for nominal consideration, their cost shall be their fair value at the date

of acquisition.

All inventory items at year-end are reflected using the weighted average cost or FIFO cost

formula.

4.8 Capital assets

4.8.1 Movable assets

Initial recognition

A capital asset is recorded in the asset register on receipt of the item at cost. Cost of an asset is

defined as the total cost of acquisition. Where the cost cannot be determined accurately, the

movable capital asset is stated at fair value. Where fair value cannot be determined, the capital

asset is included in the asset register at R1.

All assets acquired prior to 1 April 2002 are included in the register R1.

Subsequent recognition

Subsequent expenditure of a capital nature is recorded in the statement of financial

performance as “expenditure for capital assets” and is capitalised in the asset register of the

department on completion of the project.


ACCOUNTING POLICIES



Repairs and maintenance is expensed as current “goods and services” in the statement of


4.8.1 Immovable assets

Initial recognition

A capital asset is recorded on receipt of the item at cost. Cost of an asset is defined as the total

cost of acquisition. Where the cost cannot be determined accurately, the immovable capital

asset is stated at R1 unless the fair value for the asset has been reliably estimated.

Subsequent recognition

Work-in-progress of a capital nature is recorded in the statement of financial performance as

“expenditure for capital assets”. On completion, the total cost of the project is included in the

asset register of the department that is accountable for the asset.

Repairs and maintenance is expensed as current “goods and services” in the statement of


4.8.1 Intangible assets

Initial recognition

An intangible asset is recorded in the asset register on receipt of the item at cost. Cost of an

intangible asset is defined as the total cost of acquisition. Where the cost cannot be determined

accurately, the intangible asset is stated at fair value. Where fair value cannot be determined,

the intangible asset is included in the asset register at R1.

All intangible assets acquired prior to 1 April 2002 can be included in the asset register at R1.*

Subsequent expenditure

Subsequent expenditure of a capital nature is recorded in the statement of financial

performance as “expenditure for capital asset” and is capitalised in the asset register of the

department.

Maintenance is expensed as current “goods and services” in the statement of financial

performance.


ACCOUNTING POLICIES



5. Liabilities

5.1 Payables

Recognised payables mainly comprise of amounts owing to other governmental entities. These payables are carried at cost in the statement of financial position.

5.2 Contingent liabilities

Contingent liabilities are included in the disclosure notes to the financial statements when it is

possible that economic benefits will flow from the department, or when an outflow of economic

benefits or service potential is probable but cannot be measured reliably.

5.3 Contingent assets

Contingent assets are included in the disclosure notes to the financial statements when it is

probable that an inflow of economic benefits will flow to the entity.


ACCOUNTING POLICIES



5.4 Commitments

Commitments are not recognised in the statement of financial position as a liability or as

expenditure in the statement of financial performance but are included in the disclosure notes.

5.5 Accruals

Accruals are not recognised in the statement of financial position as a liability or as expenditure

in the statement of financial performance but are included in the disclosure notes.

5.6 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.

5.7 Lease commitments

Finance lease

Finance leases are not recognised as assets and liabilities in the statement of financial position. Finance lease payments are recognised as a capital expense in the statement of financial performance and are not apportioned between the capital and the interest portions. The total finance lease payment is disclosed in the disclosure notes to the financial statements.

Operating lease

Operating lease payments are recognised as an expense in the statement of financial performance. The operating lease commitments are disclosed in the discloser notes to the financial statement.

5.8 Impairment

The department tests for impairment where there is an indication that a receivable, loan or investment may be impaired. An assessment of whether there is an indication of possible impairment is done at each reporting date. An estimate is made for doubtful loans and receivables based on a review of all outstanding amounts at year-end. Impairments on investments are calculated as being the difference between the carrying amount and the present value of the expected future cash flows / service potential flowing from the instrument.


ACCOUNTING POLICIES



5.9 Provisions

Provisions are disclosed when there is a present legal or constructive obligation to forfeit economic benefits as a result of events in the past and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the obligation can be made.

6. Receivables for departmental revenue

Receivables for departmental revenue are disclosed in the disclosure notes to the annual

financial statements. These receivables are written off when identified as irrecoverable and are

disclosed separately.

7. Net Assets

7.1 Capitalisation reserve

The capitalisation reserve comprises of financial assets and/or liabilities originating in a prior reporting period but which are recognised in the statement of financial position for the first time in the current reporting period. Amounts are recognised in the capitalisation reserves when identified in the current period and are transferred to the National/Provincial Revenue Fund when the underlying asset is disposed and the related funds are received.

7.2 Recoverable revenue

Amounts are recognised as recoverable revenue when a payment made in a previous financial year becomes recoverable from a debtor in the current financial year. Amounts are either transferred to the National/Provincial Revenue Fund when recovered or are transferred to the statement of financial performance when written-off.

8. Related party transactions

Specific information with regards to related party transactions is included in the disclosure

notes.


ACCOUNTING POLICIES



9. Key management personnel

Compensation paid to key management personnel including their family members where

relevant, is included in the disclosure notes.

10. Public private partnerships

A description of the PPP arrangement, the contract fees and current and capital expenditure relating to the PPP arrangement is included in the disclosure notes.


NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2014


1. Annual Appropriation

1.1 Annual Appropriation

2013/14

2012/13

Final

Appropriation

Actual Funds

Received

Funds not requested/

not received

Appropriation

received

R’000 R’000 R’000 R’000 Administration 226,118 226,118 - 217,871

Integrated Econ. 1,089,020 553,900 535,120 443,996 Trade & Sector Dev. 772,748 772,748 - 994,946 Business Reg. 68,114 68,114 - 86,326 Economic Plann. Tourism

20,566 338,405

20,566 338,405

- 18,546

Total 2,514,971 1,979,851 535,120 1,761,685

The appropriation bill has been approved at the legislature for the allocation of funds of R535 million to the department however the bill has not been signed as yet by the Premier. The actual cash was received by the the department from Ithala and was transferred to Growth Fund during the current financial year.

1.2 Conditional grants

Note 2013/14 2012/13 R’000 R’000

Total grants received 46 - 1,000

2. Departmental Revenue Note 2013/14 2012/13

R’000 R’000 Tax revenue 5,110 4,927 Sales of goods and services other than capital assets 2.1 197 233 Interest, dividends and rent on land 2.3 3 16 Sales of capital assets 2.4 147 411 Transactions in financial assets and liabilities 2.5 893 4,870

Departmental revenue collected 6,350 10,457




2.1Sales of goods and services other than capital assets Note 2013/14 2012/13 2 R’000 R’000

Sales of goods and services produced by the department 161 233

Sales by market establishment 68 64

Administrative fees 30 111

Other sales 63 58

Sales of scrap, waste and other used current goods 36 -

Total 197 233

2.2 Interest, dividends and rent on land Note 2013/14 2012/13 2 R’000 R’000

Interest 3 16

Total 3 16

2.3 Sale of capital assets Note 2013/14 2012/13 2 R’000 R’000

Tangible assets

Machinery and equipment 39 147

411

Total

147

411

2.4 Transactions in financial assets and liabilities

Note 2013/14 2012/13 2 R’000 R’000

Receivables 22 83




Other Receipts including Recoverable Revenue 871 4,787

Total 893 4,870

3.Compensation of employees

3.1 Salaries and Wages

2013/14 2012/13 R’000 R’000 Basic salary 100,779 89,118 Performance award 461 - Service Based 63 97 Compensative/circumstantial 2,253 2,784 Periodic payments 3,869 1,769 Other non-pensionable allowances 24,512 22,325

Total 131,937 116,093

3.2 Social contributions 2013/14 2012/13 R’000 R’000 Employer contributions Pension

12,464 10,928

Medical 3,861 3,779 Bargaining council 18 19

Total 16,343 14,726

Total compensation of employees 148,280 130,819

Average number of employees 377 398

4 .Goods and services

Note 2013/14 2012/13

R’000 R’000

Administrative fees 546 581

Advertising 22,140 10,427




Minor Assets 4.1 1,061 625

Bursaries (employees) 113 156

Catering 5,255 3,332

Communication 7,527 8,178

Computer services 4.2 12,371 13,725

Consultants, contractors and agency/outsourced services 4.3 228,075 317,102

Entertainment - -

Audit cost – external 4.4 2,586 2,279

Fleet services 1,923 1,579

Inventory - -

Consumables 4.6 2,216 2,798

Operating leases 27,552 24,803

Property payments 4.7 13,119 11,005

Rental & hiring 8,454 2,270

Transport provided as part of the departmental activities 2,253 891

Travel and subsistence 4.8 32,160 22,925

Venues and facilities 9,258 14,899

Training and staff development 1,588 14,246

Other operating expenditure 4.9 1,602 4,906

Total 379,799 456,727

4.1. Assets less than R5,000 Note 2013/14 2012/13 4 R’000 R’000 Tangible assets 1,057 622

Machinery and equipment 1,057 622




Intangible assets 4 3

Total 1,061 625

4.2.Computer services Note 2013/14 2012/13 4 R’000 R’000 SITA computer services 11,378 11,164 External computer service providers 993 2,561

Total 12,371 13,725

4.3 Consultants, contractors and agency/outsourced services Note 2013/14 2012/13 4 R’000 R’000 Business and advisory services 174,470 247,027 Infrastructure and planning - 225 Legal costs 2,133 1,070 Contractors 51,450 68,424 Agency and support/outsourced services 22 356

Total 228,075 317,102

4.4 Audit cost – External Note 2013/14 2012/13 4 R’000 R’000 Regularity audits 2,586 2,279

Total 2,586 2,279

4.5 Inventory

4.6 Consumables

Note 2013/14 2012/13

4 R’000 R’000

Consumables supplies 840 649

Uniform and clothing 14 59

Household Supplies 158 338

Building material and supplies 46 178




Communication sccessories - -

IT consumables 50 74

Other consumables 572 -

Stationery, printing and office supplies 1,376 2,149

Total 2,216 2,798

4.7 Property payments

Note 2013/14 2012/13 4 R’000 R’000 Municipal services 1,430 2,679 Other 11,689 8,326

Total 13,119 11,005

4.8 Travel and subsistence Note 2013/14 2012/13

Local 4 25,907 18,459 Foreign 6,235 4,466

Total 32,160 22,925

4.9 Other operating expenditure Note 2013/14 2012/13 4 R’000 R’000 Professional bodies, membership and subscription fees

286 1,349

Resettlement costs 252 1,247 Other 1,064 1,484

Total 1,602 4,906

5. Payments for financial assets 2013/14 2012/13 R’000 R’000 Material losses through criminal conduct -

Other material losses -

Extension of loans for policy purposes - 4,985

Total - 4,985




6 Transfers and subsidies

2013/14 2012/13 R’000 R’000

Note Provinces and municipalities Annex 1B 10,483 4,265

Departmental agencies and accounts Annex 1C 856,374 294,415 Public corporations and private enterprises Non-profit institutions

Households

Annex 1E Annex 1G

Annex 1H

406,836 691,388

11,478

269,491 567,004

7,227

Gifts, donations and sponsorships made Annex 1K 126 27

Total 1,976,685 1,142,429

Unspent funds transferred to the above beneficiaries

68,770

7 Expenditure for capital assets

2013/14 2012/13 Note R’000 R’000 Tangible assets 4,057 2,869

Machinery and equipment 39 4,057 2,869


6,386

127

Computer software 40 6,386 127

Total 10,443 2,996




7.1 Analysis of funds utilised to acquire capital assets – 2013/14

Voted funds Aid assistance

Total

R’000 R’000 R’000 Tangible assets 4,057 - 4,057

Machinery and equipment 4,057 - 4,057

Software and other intangible assets 6,386 - 6,386

Computer software 6,386 - 6,386

Total 10,443 - 10,443

7.2 Analysis of funds utilised to acquire capital assets – 2012/13

Voted funds Aid assistance Total

R’000 R’000 R’000

Tangible assets 2,869 - 2,869

Machinery and equipment 2,869 - 2,869

Software and other intangible assets 127 - 127

Computer software 127 - 127

Total 2,996 - 2,996




8.Unauthorised expenditure 8.1 Reconciliation of unauthorized expenditure

2013/14

R’000

2012/13

R’000

Opening balance 24 24

Unauthorised expenditure - discovered

in the current year

15,547 -

Less: Amounts approved by

Parliament/Legislature with funding

- -

Less: Amounts approved by

Parliament/Legislature without funding

and written off in the Statement of

Financial Performance

- -

Current - -

Capital - -

Transfers and subsidies - -

Less: Amounts transferred to

receivables for recovery

- -

Unauthorised expenditure awaiting

authorisation / written off

15,571 24




8.2 Analysis of unauthorised expenditure awaiting

authorisation per economic classification

Current 15,547 -

Capital - -

Transfers and subsidies 24 24

Total

15,571

24

8.3 Analysis of unauthorised expenditure awaiting

authorisation per type

Unauthorised expenditure relating to overspending of

the vote or a main division within the vote

15,547

-

Unauthorised expenditure incurred not in accordance

with the purpose of the vote or main division

24

24

Total

15,571

24

8.4 Details of Unauthorised Expenditure – Current year 2013/14 Incident Disciplinary steps taken/ criminal

procedings R’000

Overspending on Programme 6: Tourism

Investigation currently in progress 15,547

Total 15,547

9. Cash and cash equivalents 2013/14 2012/13 R’000 R’000

Cash on hand - 20




Total - 20

10. Prepayments and advances

Note 2013/14 2012/13 R’000 R’000

Travel and subsistence 229 28 Advances paid 1,727 2,038

Total 1,956 2,066

10.1 Advances Paid

Note 2013/14 2012/13

R’000 R’000

Public Entities - 311 Other institutions 1,727 1,727

Total 1,727 2,038

Correspondance figure for the prior year balance of prepayment was corrected. Refer to note 44 Prior period errors. An amount of R26 824m was paid in advance, however expensed in the current financial year as budgeted. 2013/14 2012/13

11. Receivables R’000 R’000 R’000 R’000 R’000

Note

Less than one year

One to

three years

Older than

three years

Total

Total

Recoverable expenditure

11.1

7 - 220 227 232

Staff debt 11.2 108 703 709 1,520 1,501 Other debtors 11.3 2,463 27,030 106 29,599 27,468

Total 2,578 27,733 1,035 31,346 29,201




11.1 Recoverable expenditure (disallowance accounts) Note 2013/14 2012/13

15 R’000 R’000 Sal: Tax Debt

7

1

Disallowance payment fraud Disall: Damages & losses: Recover: CA Disall: Damages & losses: CA

220 (3)

3

220 155

(155) Sal: Income Tax - 11

Total 227 232

11.2 Staff debt Note 2013/14 2012/13

15 R’000 R’000 Miscellaneous Bursary Private telephone & Cellphone Subsistence & travel Salary & Allowance Overpayments Ex Employee Tax Debt

1

3 638

-

70

789

19

1 -

806

2

69

613

10

Total 1,520 1,501

11.3 Other debtors Note 2013/14 2012/13

15 R’000 R’000 Suppliers Medical Aid

29,596 3

27,465 3

Total 29,599 27,468




12 Investments 2013/14 2012/13 R’000 R’000 Non-Current Shares and other equity Ithala Development Finance Co-operation African Bank

1,008,582 25

1,008,582 25

Total 1,008,607 1,008,607

2013/14

2012/13 R’000 R’000 Analysis of non current investments Opening balance 1,008,607 1,008,607 Additions in cash - - Disposals for cash - - Non-cash movements - -

Closing balance 1,008,607 1,008,607

13 Voted funds to be surrendered to the Revenue Fund Note 2013/14 2012/13 R’000 R’000 Opening balance 23,729 1,019 Transfer from statement of financial performance

(236) 51,729

Add: Unauthorised expenditure for current year

8 15,547 -

Voted funds not requested/not received 1.1 (535,120) (28,000) Paid during the year - (1,019)

Closing balance 496,080 23,729

14 Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund 2013/14 2012/13 R’000 R’000




Opening balance 6 116 Transfer from Statement of Financial Performance 6,350 10,457 Paid during the year (5,896) (10,567)

Closing balance 460 6

15 Bank Overdraft 2013/14 2011/12 R’000 R’000

Consolidated Paymaster General Account 543,290 7,063

Total 543,290 7,063

The appropriation bill has been approved at the legislature for the allocation of funds of R535 million to the Department, however as at 31 March 2014 the bill was not signed by the Premier. The actual cash was received by the Department from Ithala and transferred to the Growth Fund during the current financial year. The Department received R535 million on the 11th of June 2014 to offset the overdraft.

16 Payables – current Not

e 2013/14

Total 2012/13

Total

Clearing accounts 16.1 719 10

Other payables 16.2 - 15

Total 719 25

16.1 Clearing accounts Note 2013/14 2012/13

16 R’000 R’000

Sal:Income tax 549 -

Sal:Pension fund 157 5

Sal: ABC Recall - 2 Sal: Reversal control 13 3

Total 719 10




16.2 Other Payables Not

e 16

2013/14 Total

2012/13 Total

Prov Dept : Treasury

- 15

Total - 15

17 Net cash flow available from operating activities

2013/14 2012/13 R’000 R’000 Net surplus/(deficit) as per Statement of Financial Performance

6,114 62,186

Add back non cash/cash movements not deemed operating activities

(532,061) (32,925)

(Increase)/decrease in receivables – current (2,145) (27,445) (Increase)/decrease in prepayments and advances 110 31,533 (Increase)/decrease in other current assets - - Increase/(decrease) in payables – current 694 (12) Proceeds from sale of capital assets (147) (411) Proceeds from sale of investments - - (Increase)/decrease in other financial assets - - Expenditure on capital assets 10,443 2,996 Surrenders to Revenue Fund (5,896) (11,586) Surrenders to RDP Fund/Donor - - Voted funds not requested/not received (535,120) (28,000) Own revenue included in appropriation - - Other non-cash items - -

Net cash flow generated by operating activities (525,947) 29,291

18 Reconciliation of cash and cash equivalents for cash flow purposes 2013/14 2012/13 R’000 R’000 Consolidated Paymaster General account (543,290) (7,063) Fund requisition account - - Cash receipts - - Disbursements - - Cash on hand - 20 Cash with commercial banks (Local) - - Cash with commercial banks (Foreign) - -

Total (543,290) (7,043)


DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS



19. Contingent liabilities and contingent assets

19.1 Contingent liabilities

Note 2013/14 2012/13 R’000 R’000 Liable to Nature Housing loan guarantees Employees - - Claims against the department Annex

3B 50 8,827

Intergovernmental payables(unconfirmed balances) Annex 5

3,791 1,020

Total 3,841 9,847

19.2. Contingent Assets Nature of contingent assets 2013/14 2012/13 R’000 R’000 Duplicate payment to Supplier 290 290 Damage to vehicle 171 17 Misappropriation of funds 800 800 Breach of contract 31 - Erronous payment5 91 -

Total 1,383 1,107

20 Commitments 2013/14 2012/13 R’000 R’000 Current expenditure Approved and contracted 222,442 147,676 Approved but not yet contracted 23,469 19,985

245,911 167,661 Capital expenditure Approved and contracted 295 606 Approved but not yet contracted - 249

295 855

Total Commitments 246,206 168,516

21 Accruals 2013/14 2012/

13





R’000 R’000 Listed by economic classification

30 Days 30+ Days

Total Total

Goods and services 142 37,117 37,259 47,309

Transfers and subsidies 520 308 828 - Capital asset 36 36 47

Total 662 37,461 38,123 47,356

2013/14 2012/13

R’000 R’000 Listed by programme level Administration Integrated Econ Trade & Industry Business Reg Economic Plan Tourism

32,135 3,780

683 415 239 871

22,622

2,500 21,23

5 763 236

-

Total 38,123 47,356

Note 2013/14 2012/13

R’000 R’000

Confirmed balances with other departments Annex 5 315 2,148 Confirmed balances with other government entities - -

Total 315 2,148

22 Employee benefits 2013/14 2012/13

R’000 R’000

Leave entitlement 6,675 5,514 Service bonus (Thirteenth cheque) 3,641 3,252 Performance awards 733 16 Capped leave commitments Other

6,346 421

5,989 -

Total 17,816 14,771

23. Lease commitments





23.1 Operating leases expenditure

2013/14

Specialised military equipme

nt

Land

Buildings and other

fixed structures

Machine

ry and equipme

nt

Total

Not later than 1 year - - 20,162 723 20,885 Later than 1 year and not later than 5 years

- - 24,696 188 24,884

Later than five years - - - - -

Total lease commitments - - 44,858 911 45,769

2012/13

Specialised military equipme

nt

Land

Buildings and other

fixed structures

Machine

ry and equipme

nt

Total

Not later than 1 year - - 20,135 810 20,944 Later than 1 year and not later than 5 years

- - 8,807 732 9,539


Total lease commitments - - 28,942 1,542 30,484

270 Jabu Ndlovu Street, Pitermaritzburg: Operating lease for DEDT head office, lease will expire in November 2014, the total lease balance is R10,354,464.96 22 Gardiner Street Durban 9th floor: Operation lease for DEDT District offices, lease will expire in March 2019, the total lease balance is R11,479,370.69

23.2 Finance leases expenditure

2013/14

Specialised

military equipment

Land

Buildings and other

fixed structures

Machinery

and equipment

Total

Not later than 1 year - - - 914 914 Later than 1 year and not later than 5 years

- - - 682 682


Total lease commitments 1,596 1,596

Buildings





2012/13

Specialised military

equipment

Land

and other fixed

structures

Machinery and

equipment

Total

Not later than 1 year - - - 731 731 Later than 1 year and not later than 5 years

- - - 109 109


Total lease committments - - - 840 840

24 Irregular expenditure 24.1 Reconciliation of irregular expenditure 2013/14 2012/13 R’000 R’000 Opening balance 100,427 85,999 Add: Irregular expenditure – relating to prior year 1,350 - Add: Irregular expenditure – relating to current year 32,671 20,884 Less: Prior year amounts condoned Less: Current year amounts condoned

(68,635) -

- (6,456)

Less: Amounts recoverable (not condoned) - - Less: Amounts not recoverable (not condoned) - -

Irregular expenditure awaiting condonation 63,813 100,427

Analysis of awaiting condonation per age classification

Current year 32,671 15,895 Prior years 33,142 84,532

Total 65,813 100,427

24.2 Details of irregular expenditure – current year Incident Disciplinary steps taken/criminal

proceedings

2013/14

R’000

-No tax clearance at the time of award

25,362

-Deviation approved after event

1,697





-Normal procurement process not followed 5,612

35,671

24.3 Details of irregular expenditure condoned 2013/14 Incident Condoned

by (condoning authority)

R’000

-Competitive bidding process not followed 7,763 -Deviations not reported to Treasury 19,083 -No tax clearance certificate and no SBD 4 form 5,295 -Month to month contracts -Unsolicited bidding process not followed

5,409

4,676

-Payment made before SLA signed 24,106 -Other 2,303

68,635

24.4 Details or irregular expenditure under investigation 2013/14 Incident R’000 Other 2,249 3 quotes not obtained 519 Month to month No tax clearance certificate and no SBD 4 form completed

34 40,096

Unsolocited bidding process not followed 16,288 Extension of contract> 15% 1,510 Normal procurement processnot followed 3,420 Deviation approved after event 1,697

65,813





25 Fruitless and wasteful expenditure

25.1 Reconciliation of fruitless and wasteful expenditure

2013/14 2012/13 R’000 R’000 Opening balance 1,099 488 Fruitless and wasteful expenditure – relating to prior year

- -

Fruitless and wasteful expenditure – relating to current year

527 695

Less: Amounts resolved - (11) Less: Amounts transferred to receivables for recovery - (73)

Fruitless and wasteful expenditure awaiting condonement

1,626 1,099

25.2 Analysis of awaiting resolution per economic classification Current 527 1,099 Capital - -

Total 527 1,099

25.3 Analysis of Current Year's Fruitless and wasteful expenditure 2013/14 Incident Disciplinary steps taken/criminal

proceedings R’000

Incurred as a result of late payment of PAYE, UIF & SDL

Investigation currently in progress

527

Total 527

26 . Related Party Transactions DEDT has a significant number of Public Entities under its mandate.These Public Entities budget is included as part of DEDT budget and the department transfers funds to these entities during the course of the financial year as tranch payments . These Public Entities are:

1. KZN Tourism authority 2. Dube Trade Port Corporation.

3. Trade and Investment KZN 4. Richards Bay IDZ

5. KZN Liquor Authority 6. Moses Kotane Institute

7. KZN Sharks Board 8. KZN Film Commission

9. KZN Growth fund 10. Ithala Development Finance Corporation.





27. Key management personnel No. of

Individuals 2013/14 2012/13

R’000 R’000 Political office bearers (provide detail below) 1 1,855 1,772 Officials: Level 15 to 16 4 4,380 4,485 Level 14 9 9,125 7,824

Total 15,360 14,081

28 Movable Tangible Capital Assets

MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014 Opening

balance Curr Year

Adjust-ments to

prior year

balances

Additions

Disposals

Closing Balance

R’000 R’000 R’000 R’000 R’000 MACHINERY AND EQUIPMENT

33,835 (1) 4,048 1,933 35,949

Transport assets 5,514 (1)

1,759 687 6,585

Computer equipment 16,664 - 1,765 690 17,739 Furniture and office equipment

7,507 - 434 217 7,724

Other machinery and equipment

4,150 - 90 339 3,901

TOTAL MOVABLE TANGIBLE CAPITAL ASSETS

33,835 (1) 4,048 1,933 35,949

28.1 ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014 Cash Non-

cash (Capital Work in Progress

Received current, not paid

Total





current costs and finance lease

payments)

(Paid current

year, received

prior year)

R’000 R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT

4,012 - - 36 4,048

Transport assets 1,759 - - - 1,759 Computer equipment 1,765 - - - 1,765 Furniture and office equipment

398 - - 36 434


90 - - - 90

TOTAL ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS

4,012

-

-

36

4,048

28.2 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

1,007

926 1,933 -

Transport assets 687 - 687 - Computer equipment - 690 690 - -Furniture and office equipment

11 206 217 -


309 30 339 -

TOTAL DISPOSAL OF MOVABLE TANGIBLE CAPITAL ASSETS

1,007

926

1,933

-





28.3 Movement for 2012/13

MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2013 Opening

balance Additions Disposals Closing

balance R’000 R’000 R’000 R’000 MACHINERY AND EQUIPMENT 32,361 2,792 1,265 33,835

Transport assets 5,102 1,149 736 5,514 Computer equipment 15,827 1,285 423 16,664 Furniture and office equipment 7,344 342 95 7,507 Other machinery and equipment 4,088 16 11 4,150

TOTAL MOVABLE TANGIBLE ASSETS 32,361 2,792 1,265 33,835

28.4 Minor assets MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014

Specialised military assets

Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

R’000 R’000 R’000 R’000 R’000 R’000 Opening balance CY Adjustments to prior yr Balances

-

-

904

-

-

-

6,949

-

-

-

7,853

-

Additions Disposals

- -

4 -

- -

1,057 268

- -

1,061 268

TOTAL - 908 - 7,738 - 8,646


Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

Number of R1 minor assets

- - - 1,896 - 1,896

Number of minor assets at cost

- 259 - 4,233 - 4,492

TOTAL NUMBER OF MINOR ASSETS

-

259

-

6,129

-

6,388





MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2013


Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

R’000 R’000 R’000 R’000 R’000 R’000 Opening balance CY Adjustment Additions Disposals

-

-

-

-

901

-

3

-

-

-

-

-

6,575

95

642

363

-

-

-

7,47695

95

64511

363

TOTAL - 904 - 6,949 - 7,85376


Intangible assets

Heritage assets

Machinery and

equipment

Biological assets

Total

Number of R1 minor assets

- - - 2,134 - 2,134

Number of minor assets at cost

- - - 4,631 - 4,631

TOTAL NUMBER OF MINOR ASSETS

-

-

-

6,765

-

6,765

29.5 Movable Assets Written off MOVABLE ASSETS WRITTEN OFF FOR THE YEAR ENDED 31 MARCH 2014


Intangible assets

Heritage assets

Machinery and Equipment

Total

R’000 R’000 R’000 R’000 R’000

Assets written off

-

- - 68 68

TOTAL MOVABLE ASSETS WRITTEN OFF

- - - 68 68





30 Intangible Capital Assets

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014 Opening

balance Current

Year Adjust-

ments to prior year balances

Additions Disposals Closing Balance

R’000 R’000 R’000 R’000 R’000 COMPUTER SOFTWARE 8,284 2,280 6,386 - 16,950

TOTAL INTANGIBLE CAPITAL ASSETS

8,284

2,280

6,386

-

16,950

30.1 Additions

ADDITIONS TO INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014 Cash Non-Cash (Develop-

ment work in progress – current

costs)

Received current

year, not paid (Paid

current year,

received prior year)

Total

R’000 R’000 R’000 R’000 R’000 COMPUTER SOFTWARE 6,386 - - - 6,386

TOTAL ADDITIONS TO INTANGIBLE CAPITAL ASSETS

6,386

-

-

-

6,386


MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2013 Opening


balance R’000 R’000 R’000 R’000 COMPUTER SOFTWARE 8,157 127 - 8,284

TOTAL INTANGIBLE CAPITAL ASSETS 8,157 127 - 8,284





31 Immovable Tangible Capital Assets

MOVEMENT IN IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2014 Opening

balance Curr Year Adjust-

ments to prior year balances

Additions Disposals Closing Balance

R’000 R’000 R’000 R’000 R’000 BUILDINGS AND OTHER FIXED STRUCTURES

6,339

-

-

-

6,339

Other fixed structures 6,339 - - - 6,339

TOTAL IMMOVABLE TANGIBLE CAPITAL ASSETS

6,339

-

-

-

6,339


MOVEMENT IN IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2013 Opening


balance R’000 R’000 R’000 R’000 BUILDINGS AND OTHER FIXED STRUCTURES

6,339

-

-

6,339

Other fixed structures 6,339 - - 6,339

TOTAL IMMOVABLE TANGIBLE ASSETS 6,339 - - 6,339

32. Prior Period errors 32.1 Correction of prior period error for secondary information 2012/2013 R’000 The comparative amounts in Note 14 were restated by:

Prepayments and Advances (52,108) Line item 4 affected by the change

Net effect on the note (52.108) The comparative amounts in Note 18 were restated as follows: Voted funds





to be surrended Net effect on the note

52,108

52,108

In the prior year a prepayment of R52,108 was incorrectly recognised. This amount should

have been expensed as the payment was in accordance with the signed contract with the

supplier and the amount was budgeted for and approved by the Accounting Office.

33. STATEMENT OF CONDITIONAL GRANT RECOVERED

NAME OF Department

GRANT ALLOCATION SPENT 2012/13

Division of

Revenue Act/Provincial Grants

Roll Overs

DORA Adjust-ments

Total Available

Amount received by

department

Amount spent by

department

Under/ (overspending)

% of available

funds spent by

dept

Division of Revenue

Act

Amount spent by

department

R’000 R’000 R'000 R'000 R'000 R'000 R'000 % R’000 R’000

Expanded Public Works Programme

- - - - - - - - 1,000 1,000

- - - - - - - - 1,000 1,000

Annual Report for 2013/14 Financial Year Vote 4: Department of Economic Development and Tourism

Province of KwaZulu-Natal

121

ANNEXURE 1B: STATEMENT OF UNCONDITIONAL GRANTS AND TRANSFERS TO MUNICIPALITIES

NAME OF MUNICIPALITY

GRANT ALLOCATION TRANSFER SPENT 2012/13

Amount

Roll Overs

Adjust-ments

Total Available

Actual Transfer

% of

Available funds

Transferred

Amount received

by municipali

ty

Amount spent by

municipality

% of available

funds spent by

municipality

Total Available

R’000 R’000 R'000 R'000 R'000 % R'000 R'000 % R’000

Msunduzi 28 - - 28 7 25% 7 - - 27 Mthonjaneni - - - - - - - - - 2,445 Mandeni 2,415 - - 2,415 2,414 100% 2,414 - - 2,021 Hibiscus Coast 300 - 3,000 3,300 3,000 91% 3,000 - - 300 Ntambanana - - - - - - - - - 400 KwaDukuza - - - - - - - - - 500 Umkhanyakude - - - - - - - - - 981 Umhlathuze 400 - - 400 400 100% 400 - - 310 Ukhahlamba - - 4,183 4,183 4,183 100% 4,183 - - - Umzinyathi 500 - - 500 479 96% 479 - - -

3,643 - 7,183 10,826 10,483 97% 10,483 - - 6,984

ANNEXURE 1C STATEMENT OF TRANSFERS TO DEPARTMENTAL AGENCIES AND ACCOUNTS

DEPARTMENT/ AGENCY/ ACCOUNT

TRANSFER ALLOCATION TRANSFER 2012/13

Adjusted Appropriation

Roll Overs

Adjustments Total Available

Actual Transfer

% of Available

funds Transferre

d

Appropriation Act

R'000 R'000 R'000 R'000 R'000 % R'000

Ezemvelo Wildlife 2,500 - - 2,500 2,000 80% 4,500 Natal Sharks Board Tourism Authority

59,985 95,724

- -

- 4,779

59,985 100,503

59,985 99,983

100% 99%

55,371 118,292

Trade and Investment KZN 72,740 - 2,344 75,084 75,084 100% 65,053 KZN Dube Trade Port 575,402 - - 575,402 575,402 100% - SEDA EThekwini 3,000 - (3,000) - - - - KZN Liquor Entity 43,920 - - 43,920 43,920 100% 55,941

853,271 - 4,123 857,394 856,374 100% 299,157

SCOA classification for DTP was changed from Non-Profit institutions to Departmental Agencies and Accounts. SEDA Ethekwini was classified as Department Agency during the adjustment budget, now reclassified as Private Enterprise.

ANNEXURE 1D STATEMENT OF TRANSFERS TO UNIVERSITIES AND TECHNIKONS

DEPARTMENT/ AGENCY/ ACCOUNT

TRANSFER ALLOCATION TRANSFER 2012/13

Adjusted

Appropriation

Roll

Overs

Adjust-ments

Total

Available

Actual

Transfer

Amount not

transferred

% of

Available funds

Transferred

Appro-priation

Act

R'000 R'000 R'000 R'000 R'000 R’000 % R'000

Mangosuthu University of Technology 2,780 - - 2,780 - 2,780 - -

2,780 - - 2,780 - 2,780 - -



124

ANNEXURE 1E STATEMENT OF TRANSFERS/SUBSIDIES TO PUBLIC CORPORATIONS AND PRIVATE ENTERPRISES AME OF PUBLIC CORPORATION/PRIVATE ENTERPRISE

TRANSFER ALLOCATION EXPENDITURE 2012/13

Adjusted

Appropriation Act

Roll Overs

Adjustments

Total Available

Actual Transfer

% of Available

funds Transferre

d

Capital

Current

Appro-priation Act

R'000 R'000 R'000 R'000 R'000 % R'000 R'000 R'000

Public Corporations Enterprise Development 185,000 - - 185,000 185,000 100% - 185,000 189,500 KZN: Richard’s bay IDZ 25,164 25,164 25,164 100% 25,164 - - KZN:Ithala limited 115,000 - - 115,000 115,000 100% - 115,000 60,000

Total 325,164 - - 325,164 325,164 100% 25,164 300,000 249,500

Private Enterprises

Township To Township 1,000 - - 1,000 1,000 100% - - - King Shaka Memorial Site 400 - - 400 400 100% - - - Umphithi Spring Music Festiv 1,963 - - 1,963 1,963 100% - - - Umlazi Festival And Expo 3,000 - - 3,000 2,100 70% - - - Urban Music Tour 3,000 - - 3,000 2,700 90% - - - SMME Conference 2,000 - - 2,000 2,000 100% - - - Fact Durban Rocks - - 1,000 1,000 1,000 100% - - - Durban Underground - - 700 700 700 100% - - - Durban Beach Festival - - 1,000 1,000 1,000 100% - - - Richards Bay Imbizo - - 2,000 2,000 2,000 100% - - - Umgababa New Year's Eve - - 1,000 1,000 1,000 100% - - - Kasi Tours - - 700 700 700 100% - - - Ibeach Experience - - 1,500 1,500 1,500 100% - - -

NAME OF PUBLIC CORPORATION/PRIVATE ENTERPRISE


Adjusted

Appropriation Act

Roll Overs

Adjustments

Total Available

Actual Transfer

% of Available

funds Transferre

d

Capital

Current

Appro-priation Act

R'000 R'000 R'000 R'000 R'000 % R'000 R'000 R'000



125

Amantshontsho Kamaskandi Awards

-

-

2,000

2,000

2,000

100%

-

-

-

Upward Thinking Women Conf - - 2,000 2,000 - - - - - MTV Awards - - 14,082 14,082 14,082 100% - - - X Factor - - 5,000 5,000 5,000 100% - - - Take Me Out - - 5,000 5,000 5,000 100% - - - Edu-Sport - - 9,100 9,100 9,100 100% - - - Maritime Strategy - - 2,000 2,000 2,000 100% - - - Kzn Fashion Council - - 3,000 3,000 3,000 100% - - - Co-Operative Funding 5,886 - 4,669 10,555 10,248 97% - - - KZN Youth And Women Co-Ops Business Indaba

1,500 - - 1,500 1,500 100% - - -

Women In Tourism - - 500 500 500 100% - - - Tongaat Hullet Cane Trans - - 3,317 3,317 3,317 100% - - - Operation Vuselelela - - 4,862 4,862 4,862 100% - - - Seda Ethekwini - - 3,000 3,000 3,000 100% - - - Solesa Production - - - - - - - - 1,500 Caspeforce Pty Ltd - - - - - - - - 500

Blackcurrent,Marketing and Communications

- - - - - - - - 1,500

David Tlale - - - - - - - - 5,400

Tehila Promotions - - - - - - - - 1,500

NAME OF PUBLIC CORPORATION/PRIVATE ENTERPRISE


Adjusted

Appropriation Act

Roll Overs

Adjustments

Total Available

Actual Transfer

% of Available

funds Transferre

d

Capital

Current

Appro-priation Act

R'000 R'000 R'000 R'000 R'000 % R'000 R'000 R'000

Fact Durban Rocks - - - - - - - - 1,600

TZZ Production and Ent - - - - - - - - 1,500

Kwenze Manje Trading 86 - - - - - - - - 900

Awakhe Solutions - - - - - - - - 91



126

Soundrite Sound - - - - - - - - 5,500

Total 18,749 - 66,430 85,179 81,672 96% - - 19,991

TOTAL 343,913 - 66,430 410,343 406,836 99% 25,164 300,000 269,491

SCOA classification for Richards bay IDZ was changed from non profit institutions to Public Corporations and Private Enterprises. Growth Fund is no longer paid through Ithala but direct, hence change in economic classification. SEDA Ethekwini was classified as Departmental Agencies during the adjustment budget.

ANNEXURE 1G STATEMENT OF TRANSFERS TO NON-PROFIT INSTITUTIONS

NON-PROFIT INSTITUTIONS


Adjusted

Appropriation Act

Roll overs

Adjustments

Total Available

Actual Transfer

% of Available

funds transferre

d

Appro-

priation Act

R'000 R'000 R'000 R'000 R'000 % R'000

Moses Kotane Agri-Business Development Agency Durban Film Festival Cycling South Africa Growth Fund KZN Film Commission Durban International Airport UKZN,Ikhaya,ICH and CSA Dube Trade Port RBIDZ Okhahlamba Development Agency Ilembe Chamber of Commerce

36,300 18,756

1,329 8,700

95,000 - - - - - - -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

171

-

535,120

6,030

-

-

-

-

-

-

36,300 18,756

1,500 8,700

630,120 6,030

- - - - - -

36,300

18,756

1,500 8,700

620,102 6,030

-

- - -

-

100% 100% 100% 100%

98% 100%

- - - - - -

33,000 74,974

1,500 - - -

1,000

12,000

392,308

62,618

3,000

504

Total 160,085 - 541,321 701,406 691,388 99% 580,904

SCOA classification for DTP was changed from Non-Profit institutions to Departmental Agencies and Accounts. SCOA classification for Richards bay IDZ was changed from Non-Profit institutions to Public Corporations and Private Enterprises. Growth Fund is no longer paid through Ithala but direct, hence change in classification.



128

ANNEXURE 1H STATEMENT OF TRANSFERS TO HOUSEHOLDS

HOUSEHOLDS


Adjusted

Appropriation Act

Roll Overs

Adjust-

ments

Total Available

Actual Transfer

% of Available

funds Transferre

d

Appro-

priation Act

R'000 R'000 R'000 R'000 R'000 % R'000

Leave Gratuity

39

-

57

96

96

100%

337

Bursaries (Non employee)

13,599 - (34) 13,565 11,382 84% 6,890

Total 13,638 - 23 13,661 11,478 84% 7,227

ANNEXURE 1K STATEMENT OF GIFTS, DONATIONS AND SPONSERSHIPS MADE AND REMISSIONS, REFUNDS AND PAYMENTS MADE AS AN ACT OF GRACE

2013/14 2012/13

Nature of gift, donation or sponsership R’000 R’000

Paid in cash

Divine Touch FM 26 - Sakhisizwe Management Agency 100 - Project Gateway, Internship programme cost - 27

TOTAL 126 27

ANNEXURE 3B STATEMENT OF CONTINGENT LIABILITIES AS AT 31 MARCH 2013

Nature of Liability

Liabilities incurred

during the year

Liabilities paid/cancelled/reduced during

the year

Liabilities recoverable (Provide

details hereunder)

Opening Closing

Balance Balance

1 April 2012

31 March 2013

R’000 R’000 R’000 R’000 R’000

Masifunisane Training & Development vs MEC

Boxer Stores (Pty) Ltd vs KZN Prov. Liquor Board

8,536

23

50

-

-

-

8,536

23

50

-

Ultramix Thirty Four CC vs MEC for DEDT 50 - - 50 -

Evangeline GN Mabokela/Moonsamy Naidoo vs MEC for DEDT 30 - - 30 -

Brian C.S Mbhele T/A Ebony Liquor Stores vs MEC for DEDT 30 - - 30 -

Du Toit Visser InvestAnd Six Other vs KZN Liquor Board 50 - - 50 -

Vinaiduth Ramsay vs KZN Prov. Liquor Board 8 - - 8 -

Thoko Teressa Khuzwayo vs KZN Liquor Board 30 - - 30 -

Makakatana Properties (Pty) Ltd vs KZN Liquor Board 20 - - 20 -

Paul Roux vs KZN Prov.Liquor Board 50 - - 50 -

TOTAL 8,827 50 - 8,827 50



130

ANNEXURE 4

CLAIMS RECOVERABLE

Confirmed balance outstanding

Unconfirmed balance outstanding

Total Cash in transit at year

end 2013/14*

Government entity 31/03/2014 31/03/2013 31/03/2014 31/03/2013 31/03/2014 31/03/2013 Amount

R'000 R'000 R'000 R'000 R'000 R'000 R'000

Department

KN: Arts and Culture 1 - - - 1 -

KN: Public Works 14 - - - 14 -

KN: Health 4 - - - 4 -

KN: Agriculture 5 - - 432 5 432

Social Development 2 - - - 2 - 2

Arts and Culture - - 25 - 25 -

Trade and Industry 39 - - - 39 -

Labour 2 - - - 2 -

Communication 65 - - - 65 -

Provincial Treasury - - - 4 - 4

COGTA - 1 - 40 - 41

Total 132 1 25 476 157 477 2

ANNEXURE 5

INTER-GOVERNMENT PAYABLES

Government Entity


Unconfirmed balance outstanding Total

Cash in transit at year end 2013/14*

31/03/2014 31/03/2013 31/03/2014 31/03/2013 31/03/2014 31/03/2013 Amount

R’000 R’000 R’000 R’000 R’000 R’000 R'000

Departments

Current

Treasury 300 - - - 300 -

KZN Public Works

- 2,105 3,273 1,019 3,273 3,124

Dept of Arts and Culture

15 - - 1 15 1

Justice - - 434 - 434 -

Justice - - 84 - 84 -

Office of the Premier

- 43 - - - 43



131

Government Entity


Unconfirmed balance outstanding Total

Cash in transit at year end 2013/14*

31/03/2014 31/03/2013 31/03/2014 31/03/2013 31/03/2014 31/03/2013 Amount

R’000 R’000 R’000 R’000 R’000 R’000 R'000

TOTAL 315 2,148 3,791 1,020 4,106 3,168

Annexure 8A INTER-ENTITY ADVANCES PAID (NOTE 14)

Confirmed

balance

Unconfirmed balance

Total

31/03/2014 31/03/2013 31/03/2014 31/03/2013 31/03/2014 31/03/2012

R’000 R’000 R’000 R’000 R’000 R’000

PUBLIC ENTITIES KZN Liquor Entity - - - - - -

Subtotal - - - - - -

OTHER INSTITUTIONS

Isimangaliso Wetland

1,500 1,500 - - 1,500 1,500

SMME Risk Sharing

227 227 - - 227 227

Subtotals 1,727 1,727 - - 1,727 1,727

Totals 1,727 1,727 - - 1,727 1,727

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