A presentation to the Portfolio Committee on women – Parliament of RSA

Quarterly Reporting – 09 September 2014 SessionQuarterly Reporting – 09 September 2014 Session

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Introduction• In line with the Constitutional principles and values of

openness and accountability,• The PFMA bolstered further by provisions which under

chapter 1 states that the object of the Act is to secure transparency, accountability and sound management of the resources

• Against the funds appropriated by Parliament in terms of the Appropriation Act of 2013/2014 and the Current financial year, the Commission presents spending and financial management activities for the fourth quarter (previous year) and 1st quarter (2014/2015)

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Contents• Financial performance and position for the

quarter ending 31 March 2014

• Financial performance and position for the quarter ending 30 June 2014

• Other general financial management matters

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Financial performance and position for the quarter ending 30 June 2014

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The Net Results – Overview of financial performance Q4/2014

• In this quarter, all income receivable from National Treasury for R15, 8 million was transferred.

• Other income from sundry sources was recorded to a total amount of R244, 723 , of which R220, 0553 is interest income from positive cash balances held in the current bank account of the CGE

• Total expenses were R17, 4 million outpacing an average quarterly spending level of R15m as recorded during the financial year. The increase in spending is explained by and large by heightened activities undertaken in the 4th quarter to fulfil APP target carried over from previous quarters. In the main, the completion of research and Legal department’s reports contributed to the increase.

• It is therefore that for the three months period to 31 March 2014, a deficit of R1,4m was recorded

• In addition, during this quarter accounting adjusting entries were effected against the income contributing to a skewed (inconsistent with an average level from previous reporting quarters)

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Consolidated operational budget – 2013-2014

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Core program: from the Core program: from the salaries bill of R45 m, salaries bill of R45 m, 55% is earmarked for 55% is earmarked for main program (R25m)main program (R25m)Overall COE Overall COE (71% of (71% of total budget), of which total budget), of which 39 % is spent on main 39 % is spent on main programprogram G&S G&S (29% ) where (29% ) where main program constitutes main program constitutes 41%41% Main program makes Main program makes up 51% of total budgetup 51% of total budget

   

Goods & Services

Compensation of employees

Grand totals

CEO          3 152 500           3 510 200           6 662 700 HR          1 659 000           1 907 500           3 566 500 Finance          2 769 700           3 947 500           6 717 200 Communications               840 200              840 200 IT          1 411 200              963 800           2 375 000 

Corporate Servies 8 992 400 11 169 200 20 161 600

Commissioners 1 858 800 8 891 200 10 750 000

Total non-core program 10 851 200 20 060 400 30 911 600

Core programme 7 548 800 24 619 600 32 168 400

Required funding 18 400 000 44 680 000 63 080 000

Available funding 18 600 000 44 480 000 63 080 000

The Net Results – Overview of financial performance Q4/2014

• The results for the full financial year reflect a net surplus of R2m (or 3 % of the allocation/budget). Other income mainly from interest received contributed to the surplus by R876, 654 whilst the remaining under-expenditure is attributable to savings from vacant positions

• During the financial year, under-expenditure on salaries(Compensation of Employees) of R4,6 m was utilised to defray spending pressures on goods and Services. This reallocation or adjustment to the budget were duly approved by the Accounting Officer and Executive Authority together with mid-term results

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Expenditure line Budget Adjustment to budget

Available budget

Actual expenditure

Under / (over) expenditure

Income (63 080 000)   (63 080 000) (63 080 000) -

Other income - (876 654) 876 654

Operating expenditure 14 926 400   14 926 400 20 121 701 (5 195 301)

Other administrative expenses 3 673 600   3 673 600 1 273 751 2 399 849

Personnel costs 44 480 000   44 480 000 39 904 375 4 575 625

Finance costs     - 13 542 (13 542)

Depreciation     - 639 191 (639 191)           

Operating surplus for the period to 31 March 2014   -2 004 093 2 004 093

Key Areas Income – Exceptions to Budgets Q4/2014• During the financial period ending 31 March 2014, allocations

approved by National Treasury were transferred to a total amount of R63, 1 million.

• There was additional income of R876 654 resulting from interest received and other sundry sources (SETA, Tender Docs selling). This is by and large the major contributor to the reported surplus of R2m for the 2013/2014 period.

• Revenue for the full twelve months’ period therefore stood at R63, 96 million , 1% above the allocation by NT

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Actual v Budget - Expenditure Q4/2014

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Since virements Since virements were made and were made and approved during approved during the course of the the course of the year, no material year, no material variances exist variances exist between actual between actual expenditure and expenditure and adjusted budgetadjusted budget

Department (All) 53% Location (All) Programme SERVICE DELIVERY PROGRAM

Data

Economic Classification

Year Actuals Adjusted Budget 2013/14

Annual Budget 2013/2014

Compensation of Employees 23 361 014 23 238 980 25 259 761 Goods & Services 9 257 942 10 263 090 7 708 800 Grand Total 32 618 956 33 502 070 32 968 561

Department COMMISSIONERS 15% Location (All)

Programme COMMISSIONERS: GOVERNANCE & SUPPORT

Data

Economic Classification

Year Actuals Adjusted Budget 2013/14

Annual Budget 2013/2014

Compensation of Employees 6 691 376 8 179 890 8 891 184 Goods & Services 2 700 059 1 941 556 1 858 800 Grand Total 9 391 434 10 121 446 10 749 984

Department (All) 32% Location (All) Programme CORPORATE SUPPORT SERVICES

Data

Economic Classification

Year Actuals Adjusted Budget 2013/14

Annual Budget 2013/2014

Compensation of Employees 9 934 864 9 643 843 10 329 034 Depreciation & Amortisation 639 191 - Goods & Services 9 368 116 10 215 520 9 032 421 Grand Total 19 942 170 19 859 363 19 361 454

Spending details – 2013/2014

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Cls Year Actuals Adjusted Budget 2013/14

Annual Budget 2013/2014

Actuals - as % of total

Bad debts 90 244 -  Bank Charges 42 652 48 278 51 600 0%CAPEX - 0%Compensation of Employees 39 904 540 40 921 581 44 479 979 64%Computer Servicing, Internet & Website 873 432 980 825 639 900 1%Courier Services 224 879 198 656 127 800 0%Depreciation & Amortisation 639 191 - 1%Employee Assistance Program 75 000 300 000 0%Interest Paid on Bank overdraft 13 542 427 0%Media Outreach - - 0%Office Cleaning, Maintenance, Plants & Security 1 251 631 1 345 521 1 615 821 2%Office Consumables 163 224 133 514 35 700 0%Others - - 0%Printing & Stationery 753 038 612 584 352 300 1%Professional Services 5 115 258 5 862 583 4 032 200 8%Report writing,Printing & Publishing 1 204 447 1 580 366 1 862 500 2%Subscriptions 2 434 4 868 0%Telecommunication Expenses 2 085 303 2 083 383 2 142 000 3%Training and Development 271 174 650 000 650 000 0%Travel, Accomodation and Related Expenditure 7 822 093 6 665 906 4 134 100 13%Vehicle expenses, maint, fuel and other 293 973 313 400 661 900 0%Venues, Catering & Event Management 1 201 507 2 005 988 1 994 200 2%Grand Total 61 952 561 63 482 880 63 080 000

85% of expenditure arose from COE (64%), Travel & accommodation(13%) and Professional Services (Auditing, consulting by third parties) at a combined 8% contribution to total spending

Financial Position – Status as at 31 March 2014• There are no solvency or liquidity challenges, the financial

position remain strong . Planned recapitalization projects will however diminish the liquidity strength in the near term

• Non-current asset base at net carrying amounts estimated at R1, 5m compared to R1,7 m as at 31 March 2013. Net of Depreciation at R640, 000 and new assets purchased for R374,000

• Current assets mainly cash (R19,4 m) more than 3 folds above the net asset situation and covers liabilities by more than 27% (R19, 4m v R15,3m)

• Included in cash balance, is the surplus to be utilised for the recapitalization of CGE assets (R8,5 m conditionally approved Treasury)

• Current liabilities R15,3 m (minus R8,5 m) = R7 m (Exchange R2 m, remainder is due to staff and payroll creditors(SARS, AF)

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Financial performance and position for the quarter ending 31 March 2014

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• A surplus was reported for the period at R838k against a budget deficit for Q1 of R1,4 m. The deficit was anticipated because budget estimate (APP scheduling + admin – audit fees) exceeded the fixed NT transfer of R16, 8 m

• The surplus can be explained by COE under-spent due to vacancies

• Quartely statements - Q1 2015x.doc• Plenary q1 2015.11.pdf• Plenary q1 2015.12.pdf

Financial information...Q1/2015

Other general financial management matters

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Risk Management• During the quarter under review, management conducted

workshops to identify and assess both strategic and operational risks affecting the CGE’s operations. The Risk register has accordingly been updated where corresponding Risk Treatment action plans were devised

• A risk Committee Meeting was held subsequently to review and approve plans. There were adjustments recommended by the Committee subject to ratification by the Committee set to sit during the 1st Quarter of 2014/15

• There has not been any significant or material change to the risks inherent within the CGE operation. It is therefore that the previous action plans are still relevant and their implementation are practically mitigating the residual risks as updated. The internal audit planning were also based on this updated risk assessments

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Risk management - Dashboard

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Fraud, Contingencies and litigation• No instances of fraud were detected or reported to

management during the period under review• No new litigation matters. CGE v Gasa and Axolute v CGE

are the only litigation matters still to go on trial or to which the CGE is exposed

• A contingent asset in the form of a receivable is specifically disclosed in the AFS and been followed up with the insurer

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Investment activities underway• Fleet acquisition – Fleet replenishment by 11 vehicles to the

total cost of R4,3 m. These were procured through a National treasury supported transversal contract. Delivery expected during the third quarter of the current financial year

• IT infrastructure – Feasibility evaluation completed, ICT strategy and implementation being finalised internally. The conceived project plan is estimated to cost R4, 2 m

• Assets Disposal – Majority (>75%) of the CGE assets are both economically and technologically obsolete and will therefore be retired where minimal proceeds are anticipated. The disposal shall be i.t.o CGE’s policy underpinned by the principles of competiveness and transparency

• The capital expenditure is funded by a special /conditional grant from National treasury – R8,5 m .

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Audit status19

Unfavourable Unfavourable Favourable Favourable

Thank youQ&A

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