Presentation to the Portfolio Committee for Women in the Presidency

On the Annual Report for 2014/2015 Period and

The Annual Financial Statements and other PFMA related matters

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14 October 201514 October 2015

Table of contents• Introduction and Purpose• The Annual Financial Statements period ending 31 March 2015

– Statement of Financial Position– Statement of Financial Performance– Statement of changes in Net assets– Statement of Cash flow

• Disclosures and general financial management matters– Corporate Services– Governance : Risk management, internal controls and Audit outcomes

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Introduction and purpose• The purpose of this presentation is to update the Portfolio Committee on the affairs

and financial activities of the Commission as contemplated by section 181(5) of the Constitution of South Africa, Act 108 of 1996.

• Furthermore, Section 40 of the PFMA prescribes that the Annual report and Annual Financial Statements must be tabled in Parliament a month after the issuance of an audit report by the Office of the Auditor General.

• Consistent the values and principles of accountability and transparency deriving from the Constitution and espoused by all prescripts and practices, the Commission tables an account on the use of allocated funds for the financial period ending 31 March 2015. The funds allocated by Parliament through the Appropriation Act of 2014.

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Statement of Financial Position as at 31 March 2015

Notes 2015 2014

R R

ASSETS Restated

Current assets

Cash and cash equivalents 9 13 237 070 19 364 997

Receivables from non-exchange transactions 10 35 156 99 136

13 272 226 19 464 133

Non-current assets

Property, plant and equipment 11 4 904 424 1 455 951 Intangible assets 11 66 641 -

4 971 065 1 455 951

Total Assets 18 243 291 20 920 084

LIABILITIES

Current liabilities

Payables from exchange transactions 12 3 220 087 2 163 868 Payables from non-exchange transactions 13 7 942 295 12 856 248 Provisions 14 2 235 934 2 023 059

13 398 316 17 043 175

Total liabilities 13 398 316 17 043 175

Net assets 4 844 975 3 876 909

NET ASSETS

Accumulated surplus 4 844 975 3 876 909

Total Net Assets 4 844 975 3 876 909

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Financial Position - notes• The financial health of the Commission is sound measured by its solvency and

liquidity status.• Between the previous year and 2014/2015 period, solvency has increased

whilst liquidity situation is diminishing mainly because of the outlay of investment in property, plant and equipment. There is a switch between current and non-current assets – current and cash ratio at 99% and anticipated to fall in the new year.

• Most creditors are from non-exchange transactions - R10.2 m of the R13.4 m in total liabilities as at 31 march 2015.

• Net asset were at R4.8 million (2014; R3.8 m), an increase accounted for by current operating results at R968, 067 surplus.

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Notes•Out-flows in ordinary course of operations were R1, 6 m in excess of cash in-flows. The inverse was true in the previous financial year.•Further outflows for R4, 5 million were recorded as disbursement for f\investment in fleet in the main. The figure is materially higher than previous period (R373, 839)•Net cash & cash equivalents reduced by 32% from R19.4 m at the financial year ending 31 March 2014.

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Statement of Changes in Net Assets for the year ended 31 March 2015

NoteAccumulated

surplusTotal net

assets

R R

Balance at 31 March 2013 12 090 654 12 090 654

Conditional grant 15 (8 524 442) (8 524 442)

Surplus for the year ending 31 March 2014 1 822 029 1 822 029

Balance at 31 March 2014 5 388 241 5 388 241

Prior period error 15 (1 511 333) (1 511 333)

Balance at 31 March 2014; restated 3 876 908 3 876 908

Surplus for the year ending 31 March 2015 968 067 968 067

Balance at 31 March 2015 4 844 975 4 844 975

Notes

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Statement of Financial Performance for the year ended 31 March 2015

Notes 2015 2014

R R

Restated

Revenue

Revenue from non-exchange transactions 2 72 013 925 63 080 000 Other income 3 2 652 980 876 654 Total revenue 74 666 905 63 956 654

Expenses

Operating expenses 4 24 125 399 20 121 702

Personnel Costs 5 46 554 852 39 904 375 Other administrative expenses 6 1 893 332 1 273 751 Finance costs 7 134 654 195 606 Assets written off 8 53 259 -

Depreciation and amortisation 11 937 342 639 191 Total 73 698 838 62 134 625

Surplus for the year 968 067 1 822 029

•Further conditional grant recorded - R5 m in 2015 only•Other income in mainly donations and interest income

•Further conditional grant recorded - R5 m in 2015 only•Other income in mainly donations and interest income

• Total expenditure higher than budget and prior period mainly due to extra-ordinary activities such as Gender Summit + the general effects of inflation

• Total expenditure higher than budget and prior period mainly due to extra-ordinary activities such as Gender Summit + the general effects of inflation

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Income or Expenditure line

Budget Adjustment to budget

Available budget

Actual expenditure

Under / (over) expenditure

Non-exchange revenue (67 235 000) - (67 235 000) (72 013 925) 4 778 925

Other income - (2 700 000) (2 700 000) (2 652 980) (47 020)

Total (67 235 000) (2 700 000) (69 935 000) (74 666 905) 4 731 905

Operating expenditure 20 205 000 - 20 205 000 24 125 399 (3 920 399)Other administrative expenses 2 078 000 - 2 078 000 1 893 332 184 668

Personnel costs 46 371 800 - 46 371 800 46 554 852 (183 052)

Finance costs - - - 134 654 (134 654)

Assets written off - - - 53 259 (53 259)

Depreciation 1 280 200 - 1 280 200 937 342 342 858

Total 69 935 000 - 69 935 000 73 698 838 (3 763 838)

Operating surplus for the period to 31 March 2015 (968 067) 968 067

Budget 2014/2015Strategic Objective 1 – R8.1m

Strategic Objective 2 – R18m

Strategic Objective 3 – R14.2m

Strategic Objective 4 – R29.6m

Approved Budget =R67.2mFinal Budget = R69.9m

Adjustment budget – not transferred from fiscus – R2.7mAdjustment budget – not transferred from fiscus – R2.7m

Budget 2014/2015Strategic Objective 1 – R8.1m

Strategic Objective 2 – R18m

Strategic Objective 3 – R14.2m

Strategic Objective 4 – R29.6m

Approved Budget =R67.2mFinal Budget = R69.9m

Adjustment budget – not transferred from fiscus – R2.7mAdjustment budget – not transferred from fiscus – R2.7m

•Excess income recorded due to donations and conditional grants recognised during current period.•Overall spent above the allocation and adjusted budget

•Some spending activities funded for from donations •There was generally spending pressures against the baseline

Budget ComparativesBudget Comparatives

• All includes shared expenses at corporate level , mainly depreciation

• Key contributors to spending exceeding budget :-

– Summit ( Communications)– ICT professional services– Salary increase higher than anticipated at

budgeting stage

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Programme COMMISSIONERS: GOVERNANCE & SUPPORT

CORPORATE SUPPORT SERVICES

SERVICE DELIVERY PROGRAM

Total Actuals CY

Total Adjusted Annual budget

Location Department Actuals CY Actuals CY Actuals CYHead Office ALL 984 229 984 229 1 570 141

CHIEF EXECUTIVE OFFICER 4 196 469 4 196 469 3 959 567 COMMISSIONERS 13 986 849 13 986 849 14 148 432 COMMUNICATIONS 3 907 557 3 907 557 3 257 844 FINANCE & ADMINISTRATION 8 755 351 8 755 351 8 078 295 HUMAN RESOURCES 4 267 972 4 267 972 4 197 499 INFORMATION TECHNOLOGY 2 928 784 2 928 784 2 170 228 LEGAL 2 594 661 2 594 661 2 242 341 PUBLIC EDUCATION & INFORMATION 1 978 220 1 978 220 1 593 312 RESEARCH 5 729 252 5 729 252 5 359 129 Ofice of the COO 280 196 280 196 273 547

Head Office Total 13 986 849 21 132 803 14 489 886 49 609 538 46 850 335 Provincial Office

EASTERN CAPE 2 955 669 2 955 669 2 695 688

FREE STATE 2 533 454 2 533 454 2 461 096 GAUTENG 2 803 536 2 803 536 2 513 715 KWAZULU NATAL 2 553 013 2 553 013 2 437 110 LIMPOPO 2 109 069 2 109 069 2 033 665 MPUMALANGA 2 505 492 2 505 492 2 487 221 NORTH WEST 2 325 170 2 325 170 2 224 333 NORTHERN CAPE 2 650 804 2 650 804 2 600 516 WESTERN CAPE 3 653 092 3 653 092 3 631 321

Provincial Office Total 24 089 300 24 089 300 23 084 665 Grand Total 13 986 849 21 132 803 38 579 186 73 698 838 69 935 000

•Uneven numbers due to periods where there were vacancies e.g. Free State•Western Cape province includes Parliamentary Unit, explaining the deviation from average•The general gap from budget is accounted for by cost of living adjustment realising higher than the budget estimate

Spending figuresSpending figures

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Programme

COMMISSIONERS: GOVERNANCE & SUPPORT

CORPORATE SUPPORT SERVICES

SERVICE DELIVERY PROGRAM

Total Actuals Current Year

Total Actuals Prior Year

Total Adjusted Annual budget

Location Economic Classification

Actuals Current Year

Actuals Current Year

Actuals Current Year

Head Office Compensation of Employees

8 593 467 10 240 983 9 194 488 28 028 938 23 825 841 27 537 997

Depreciation & Amortisation

937 342 937 342 639 191 1 570 141

Goods & Services 5 393 381 9 954 479 5 295 398 20 643 259 15 546 851 17 742 196

Head Office Total

13 986 849 21 132 803 14 489 886 49 609 538 40 011 882 46 850 335

Provincial Office

Compensation of Employees

18 586 470 18 586 470 16 161 578 18 833 803

Goods & Services 5 502 830 5 502 830 5 961 165 4 250 862

Provincial Office Total

24 089 300 24 089 300 22 122 743 23 084 665

Grand Total 13 986 849 21 132 803 38 579 186 73 698 838 62 134 625 69 935 000

67% is budgeted and spent at HQ

compared to 64% in

2013/2014.

In aggregate, 52% was spent

on Core programme

Spending figuresSpending figures

Expenditure for the year – Budget comparativesExpenditure for the year – Budget comparativesSummary results by economic classificationSummary results by economic classification

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A. 2014/15 Actual spending as % of total 19% 29% 52% 100%

B. 2014/15 Actual spending as % of budget 20% 30% 55% 105%

C.2014/15 Actual spending as % of prior actuals 23% 34% 62% 119%

A. Spending distribution per programme was consistent with the budget allocation, where service delivery programme spending was at 52% of the total expenditure in 2014/2015 period.

B. 2014/2015 spending exceeded tthe adjusted budget by 5% ( R73, 7 m v R69,9 m). Key exception was on the core service delivery at 3 % higher than the budget set aside.

C. Expenditure for 2014/2015 was higher than recorded in 2013/2014 by 19%. Key to this increase is the effect of inflation and other extra-ordinary projects; Gender Summit, ICT infrastructure professional services.

Programme

COMMISSIONERS CORPORATE SUPPORT SERVICES

SERVICE DELIVERY PROGRAM

Total

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Salary band Number of employees

Personnel expenditure cost

Percentage of total personnel

Average personnel cost per employee

Skilled (Level 3 - 5 )10 1 780 831 4% 178 083

Highly Skilled (6 - 8)23 6 732 127 14% 292 701

Highly Skilled Supervision (9 - 12) 45 23 299 588 50% 517 769 Senior Management ( 13 - 15) 6 6 624 784 14% 1 104 131 Commissioners

11 7 355 300 16% 668 664 Total permanent

9545 792

630 98% 482 028 Temporary and interships 15 762 222 2% 50 815 Grand total

110 46 554

852 100% 423 226

•Total establishment of 110 personnel

• permanent employment levels

remained steady ( 98 previous year

v 95 in 2014/2015)

•Overall vacancy rate against

the establishment of 14% (15

Positions, page 105 of AR) at

estimate/implicit total cost of

R6,3 million)

•Total establishment of 110 personnel

• permanent employment levels

remained steady ( 98 previous year

v 95 in 2014/2015)

•Overall vacancy rate against

the establishment of 14% (15

Positions, page 105 of AR) at

estimate/implicit total cost of

R6,3 million)

Employment numbersNotes

• About 50% of the salary bill ( R23m/R46m) and head count (46/95) is for the highly skilled

• The highly skilled band is mainly for positions directly linked to Core service delivery programme

• Across all bands core service delivery actual total cost was recorded for 2014/15 at R28 m (or 60% of total COE)

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Salary band Number of employees per band as at 1 April 2014

Appointments and Transfers within the Commission

Terminations and Transfers out of the Commission

Number of employees per band as at 31 March 2015

Skilled (Level 3 - 5 ) 9

1

-

10

Highly Skilled (6 - 8) 23

-

-

23

Highly Skilled Supervision (9 - 12)

49

3

6

46

Senior Management ( 13 - 15)

6

-

1

5

Commissioners 11

2

2

11

Temporary & Internships 14

10

9

15

Total 112

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110

Annual Leave Notes• Annual leave contributed R1m into the COE

expense for 2014/15 up from R558, 000 in the previous period

• The average leave taken was 18.4 days per annum against 22 days year grant per person

• Leave days not taken and cost of living adjustment contributed to the increase in COE as shown above

• Higher level employees, management and Commissioners took less leave days during the period.

• All leave forms such as Sick Leave within reasonable norms – No issues were noted during the period

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Salary band Number of employees who have taken leave

Total days taken

Average per employee

Skilled (Level 3 - 5 ) 10 188 18.80Highly Skilled (6 - 8) 23 500 21.74Highly Skilled Supervision (9 - 12) 43 770 17.91Senior Management ( 13 - 15) 6 83 13.83Commissioners 7 118 16.86Total permanent 89 1659 18.64Temporary and interships 6 88 14.67Grand total 95 1747 18.39

Employment equity, Training, development and performance management

• The Commission is comprised of 64% female and is 100% previously disadvantaged across the establishment. CGE lacks and lagging on disability representation at under 2%.

• 22 officials trained equitably across all demographics ( by gender and age)• Training expenses were R613, 100 in 2014/2015 compared to R271 200 in the

previous period• Of a total of 18 terminations of employment during 2014/2015 period, 2 were

dismissals and 9 resignations whilst the rest were due to expiry of contracts.• Performance bonus of R1,4 million was paid out to 54 officials during the financial

year but in lieu of 2013/2014 performance period. Pending the finalisation of assessments for the 2014/2015 performance cycle, a provision of R1.69 million is included in the reported figures.

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Communications Unit – high-lights• The units activities were in the main focussing on

support to the core service delivery programme apart from and in addition to the corporate communications activities.

• The unit comprised of three officials and incurred a total expenditure of R3,9 million. Of which about R900, 000 was financed by donations (SABC – Gender Summit and 16 Days of Activism) and GCIS (Gender summit). – in-kind services recorded at fair value

• Media platforms were utilised to leverage the reach of communities also in substitute to the traditional channels – Radio, social Media, Television and print as and where relevant. Cost efficiency and service delivery effectiveness attested by coverage statistics.

• Partnerships with NEMISA ( National Electronic Media of South Africa), SABC Foundation and National Community Radio Forum were main vehicles.

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Cls

Actuals CY Actuals PY Adjusted Annual budget

Compensation of Employees 1 650 549 1 818 796 1 607 959 Computer Servicing, Internet & Website 181 716 114 228 359 784 Courier Services 94 119 115 524 38 209 Office Cleaning, Maintenance, Plants & Security 51 232 14 235 64 314 Office Consumables 2 309 - 2 236 Printing & Stationery 131 125 89 929 73

Professional Services - 57 000 -

Report writing, Printing & Publishing 1 712 823 872 293 1 098 647 Telecommunication Expenses 17 088 13 675 17 088 Training and Development 15 000 - 30 000 Travel, Accomodation and Related Expenditure 48 476 32 865 33 294 Vehicle expenses, maint, fuel and other 3 120 5 890 6 240 Venues, Catering & Event Management

- 17 638 -

Grand Total 3 907 557 3 152 074 3 257 844

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ICT Governance, Strategy and Operations• Governance framework developed and institutionalised into the oversight

processes.• A long term ICT strategy adopted, audit and gap analysis between current

and desired state developed culminating in an investment project to refresh the current infrastructure. The cost of the investment was budgeted for R4, 5 million where only R503, 000 for the initial stages of the project. The initial phase/project will be concluded during 3rd quarter of the new financial year. The continuous improvement elements of the5 year long term strategy earmarked for the outer years are not yet funded.

• Total operating expenditure recorded for the department/unit was R2, 9 m against a budget of R2,2 m.

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ICT planning and feasibility approach

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ICT strategy deployment pathway

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Website traffic during 2014/2015 financial year– external usersWebsite traffic during 2014/2015 financial year– external users

Extracted from Google analytics

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• Accounting Officer – complied with the provisions of PFMA, section 38 – Systems of internal control– Risk management– Sound Financial management and systems to administer/account for REAL ( Revenue,

Expenses, Asset and Liabilities) were in place– Section 40 reporting – in-year and annual reporting to promote accountability and

transparency

• Executive Authority – Processes and systems of corporate governance in place and applied through out the reporting period.

• Audit Committee – Committee terms of reference and functioning during the period complied to PFMA

section 38, 76&77 and section 27 of National Treasury Regulations.– Internal audit capacity and competence existed through out the period , the function of

which was regularly subject the oversight of the audit committee27

Corporate governance Corporate governance

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Exceptions – disclosures (UIF’s)

•The accumulated irregular expenditure mainly arose from the 2007/2008 & 2008/2009 period. Awaiting regularisation from National Treasury – applications for such were made.

•Exceptions for non-compliance were raised regrettably for the current period at R1 m, down from R1,8 m in the previous period. Key transactions related to the Gender Summit which was co-funded by private third parties.•Payments of penalties and interest to SARS – on issues dating back to 2003.Consequences Management•Applications made to regularise past non-complying expenditure•All reconciliations, payment and filing of tax returns completed in adherence to the Tax Laws. Systems of regular compliance internally instituted.•Training and corrective action taken for and against officials where relevant

•There were no reported fraud or any misappropriation in these transaction and thus no receivable whatsoever was noted in the financial misconduct.

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Unfavourable Unfavourable Favourable Favourable 2014/15 Matters of emphasis• A restatement of prior period figures (SARS) which the OAG refer users of the AFS to consider2014/15 Compliance with laws and Regulations issues•SCM – needs vast improvements•Irregular, fruitless and wasteful expenditure reduced materially in comparison to past periods

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Regularity Audit Outcomes 2014/2015

• Unqualified opinion on AFS

• Weaknesses currently addressed in terms of

the Audit action plans developed subsequent

to receipt of management letter of the

2014/2015 regularity audit read

• Apart from summary on the left of slide,

detailed action plans have been

developed, implemented and tracked by

oversight structures/leadership of the CGE on

a continuous basis

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Thank You

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