11

DEPARTMENT OF DEFENCE:FINANCIAL YEAR 2011/12:

FINANCIAL PERFORMANCE 1ST AND 2ND QUARTERS

PCD 1st 2nd QR 2011 Fin Perf

22

AIM

To inform the Portfolio Committee on Defence and Military Veterans on Defence’s 1st and 2nd quarter financial performance for the 2011/12 financial year.

PCD 1st 2nd QR 2011 Fin Perf

FY 2011/121st QUARTER

FINANCIAL PERFORMANCE

FY 2011/121st QUARTER

FINANCIAL PERFORMANCE

3

PCD 1st 2nd QR 2011 Fin Perf

44

FY 2011/12: 1ST QUARTER EXPENDITURE COMPARISON

PER PROGRAMME2010/11 2011/12

Expenditure outcome Preliminary expenditureApr 10 - Jun 10 Apr 11 - Jun 11

Adjusted Apr 10 - % of adjusted Adjusted Apr 11 - % of adjustedRM appropriation Jun 10 appropriation appropriation Jun 11 appropriationAdministration 3 256.3 699.1 21.5 3 718.1 1 015.5 27.3 Force Employment 1 908.2 374.3 19.6 2 241.6 470.3 21.0 Landward Defence 9 946.9 1 958.8 19.7 11 763.5 2 473.9 21.0 Air Defence 6 059.1 834.1 13.8 6 768.1 1 211.2 17.9 Maritime Defence 2 181.7 512.4 23.5 2 500.5 599.4 24.0 Military Health Support 2 770.2 671.1 24.2 3 044.1 680.0 22.3 Defence Intelligence 624.1 143.4 23.0 668.9 150.8 22.5 General Support 3 968.7 767.9 19.3 3 899.9 607.2 15.6 Total 30 715.3 5 961.1 19.4 34 349.1 7 208.3 20.8

PCD 1st 2nd QR 2011 Fin Perf

55

FY 2011/12: 1ST QUARTER EXPENDITURE COMPARISON PER SCOA CLASSIFICATION

2010/11 2011/12Expenditure outcome Preliminary expenditure

Apr 10 - Jun 10 Apr 11 - Jun 11Adjusted Apr 10 - % of adjusted Adjusted Apr 11 - % of adjusted

RM appropriation Jun 10 appropriation appropriation Jun 11 appropriationCurrent paymentsCompensation of employees

13 450.4 3 603.0 26.8 16 770.8 4 093.6 24.4

Goods and services 9 646.0 1 548.0 16.1 10 507.6 1 709.6 16.3 Total current payments

23 096.4 5 151.0 22.3 27 278.4 5 803.2 21.3

Departmental agencies

5 968.6 320.4 5.7 5 988.3 1 091.5 18.2

Public corporations and private enterprises

723.1 388.2 53.7 820.8 233.3 28.4

Non-profit institutions 5.4 2.0 37.0 6.3 2.0 31.7 Households 135.6 35.7 26.3 162.5 29.4 18.1

Total transfers and subsidies6 832.7 746.3 10.9 6 977.9 1 356.2 19.4 Payments for capital assets

786.1 55.2 7.0 348.6 39.5 11.3

Payments for financial assets

– 8.6 – 9.4 –

– – Total payments 30 715.3 5 961.1 19.4 34 604.9 7 208.3 20.8

Transfers and subsidies to:

PCD 1st 2nd QR 2011 Fin Perf

66

FY 2011/12: 1ST QUARTER REVENUE COLLECTION COMPARISON

PER SCOA CLASSIFICATION2010/11 2011/12

Audited outcomeAdjusted Budget

RM estimate Apr 10 – Jun 10

% of AENE estimate Apr 10 – Jun 10

% of AENE

Sales of goods and services other than capital assets

199.5 55.5 27.8 314.5 61.2 19.5

Transfers received 195.7 – – 172.4 – – Fines, penalties and forfeits 3.6 0.9 24.4 3.8 2.8 73.8 Interest, dividends and rent on land 2.5

0.5 21.5 2.6 0.5 19.3

Sales of capital assets 52.7 3.8 7.2 55.3 1.1 2.0 Financial transactions in assets and liabilities 248.5

3.2 1.3 255.0 3.3 1.3

TOTAL RECEIPTS 702.5 63.9 9.1 803.5 68.9 8.6

Actual receipts

PCD 1st 2nd QR 2011 Fin Perf

77

FY 2011/12: 1st QUARTER SPECIAL DEFENCE ACCOUNT

FINANCIAL PERFORMANCE

SN CATEGORIES FA %

2011

ORDER %

2011

PAID %

2011

PAID %

2010

a b c d e

1 SDPs 50 48 1 15

2 Largest Projects 68 66 6 5

3 Capital 63 57 10 10

4 Operating 77 62 9 13

5 Sensitive 87 87 14 13

6 Total 67 62 6 9

7 Excluding SDPS 72 66 8 8

PCD 1st 2nd QR 2011 Fin Perf

8

FY 2011/12MID YEAR ADJUSTMENTS

FY 2011/12MID YEAR ADJUSTMENTS

PCD 1st 2nd QR 2011 Fin Perf

9

ADJUSTED ESTIMATES OF NATIONAL EXPENDITURE (AENE): 2011

Sn Item Requested Received Deviation a b c d RM RM RM

1. Unforeseeable and Unavoidable 170.9,7 81,4 (89,5) i. OP COPPER 81,4 81.4 0

ii. OP CORONA 59,2 0 (59,2) iii. Defence Force Service Commission 30,3 0 (30,3)

2. Self-Financing 62,7 62,7 0 i. SDA 54,1 54,1 0 ii. GDA 8,6 8,6 03. Unforeseeable Economic Events –

Salary Increase Additional 1,3%.342,9 200,0 (142,9)

4. Total Adjustments 576,5 344,1 (232,4)5. Other – The Warburg Dillon Read Planning Module used for the management of the SDPs and

controlled by NT were reduced by RM600 in the current financial year due to delays. It is to be noted that the outer years will be adjusted ito revised cash flow requirements.

PCD 1st 2nd QR 2011 Fin Perf

SCOA Description Reason for Change 

REVENUE: FINANCIAL ASSETS

Decrease: Penalties Imposed on Contracts and Exchange Rate Profits are not as high as expected. Discussions with Armscor is currently underway to enhance the accuracy of projections and reporting. Recovery of Study Loans has been adjusted upwards from R 16,400 to Rm4,4 based on current recoveries.

FINES Increase: The admin fee charged on Garnishee orders has increased with 420% from Rm 3,5 in 2010 to a projected Rm 10,5. This amount represents 5 % of the amount paid by members according to court orders.

SALES OF GOODS & SERVICES PRODUCED BY DEPT

Decrease: Services rendered to Private Institutions has not realised as planned and were reduced from Rm 91 to a projected Rm 10,5 based on current trends. Line items adjusted upwards are increases in house rent, duty busses, etc as a direct consequence of salary increases.

SALES OF SCRAP, WASTE & OTHER GOODS

Increase: From Rm 18,7 to Rm 21,1 based on current collection trends relating to Sale of DoD waste products and redundant equipment.

SALES OF CAPITAL ASSETS

Decrease: Sale of Main Equipment has not realised as planned. Discussions with Armscor is currently underway to enhance the accuracy of projections and reporting.

TOTAL Decrease: Total revenue estimate has been reduced from RM 803 to Rm 561 for the 2011/12 FY.

MID YEAR ADJUSTMENTS: REVENUE

10PCD 1st 2nd QR 2011 Fin Perf

FY 2011/122nd QUARTER

FINANCIAL PERFORMANCE

FY 2011/122nd QUARTER

FINANCIAL PERFORMANCE

11

PCD 1st 2nd QR 2011 Fin Perf

1212

FY 2011/12: MID YEAR EXPENDITURE COMPARISON: PER PROGRAMME AS AT 30 SEPTEMBER 2011

Note: SANDF salary increases not yet implemented.

Expenditure 2010/11 and preliminary expenditure 2011/12Programme 2010/11 2011/12

Expenditure outcome Preliminary expenditureApr 10 - Sep 10 Apr 11 - Sep 11

Adjusted Apr 10 - % of adjusted Adjusted Apr 11 - % of adjustedRM appropriation Sep 10 appropriation appropriation Sep 11 appropriationAdministration 3 417.2 1 522.4 44.6 3 718.4 1 847.9 49.7 Force Employment 2 282.2 854.6 37.4 2 332.0 1 009.6 43.3 Landward Defence 9 009.6 5 078.4 56.4 11 328.6 5 085.9 44.9 Air Defence 5 536.4 2 162.5 39.1 6 355.8 2 943.1 46.3 Maritime Defence 2 358.3 1 084.1 46.0 2 564.7 1 185.3 46.2 Military Health Support 3 049.6 1 449.9 47.5 3 244.3 1 481.3 45.7 Defence Intelligence 656.6 300.7 45.8 661.6 451.3 68.2 General Support 4 132.6 1 810.2 43.8 4 143.7 1 766.2 42.6 Total 30 442.5 14 262.8 46.9 34 349.1 15 770.6 45.9

PCD 1st 2nd QR 2011 Fin Perf

1313

FY 2011/12: MID YEAR EXPENDITURE COMPARISON PER SCOA AS AT 30 SEPTEMBER 2011

Expenditure 2010/11 and preliminary expenditure 2011/122010/11 2011/12

Expenditure outcome Preliminary expenditureApr 10 - Sep 10 Apr 11 - Sep 11

Adjusted Apr 10 - % of adjusted Adjusted Apr 11 - % of adjustedRM appropriation Sep 10 appropriation appropriation Sep 11 appropriationCurrent paymentsCompensation of employees

16 219.0 7 959.0 49.1 17 555.3 8 287.3 47.2

Goods and services 9 533.8 3 819.4 40.1 10 535.4 4 071.6 38.6 Total current payments

25 752.8 11 778.4 45.7 28 090.7 12 358.9 44.0

Departmental agencies

3 073.5 1 603.3 52.2 4 878.3 2 548.8 52.2

Public corporations and private enterprises

720.5 533.8 74.1 867.3 625.0 72.1

Non-profit institutions 4.8 3.0 63.1 6.3 4.0 63.3 Households 140.3 57.4 40.9 155.4 55.1 35.5

Total transfers and subsidies3 939.1 2 197.5 55.8 5 907.3 3 232.9 54.7 Payments for capital assets

750.6 270.8 36.1 351.1 162.9 46.4

Payments for financial assets

– 16.1 – 15.9 –

– – Total payments 30 442.5 14 262.8 46.9 34 349.1 15 770.6 45.9

Transfers and subsidies to:

PCD 1st 2nd QR 2011 Fin Perf

1414

FY 2011/12: MID YEAR COMPARISON: REVENUE AS AT 30 SEPTEMBER 2011

2010/11 2011/12Audited outcome

Adjusted Budget AdjustedRM estimate Apr 10

– Sep 10 % of AENE estimate estimate Apr 10

– Sep 10 % of AENE

Sales of goods and services other than capital assets

299.5 130.4 43.5 314.5 282.4 154.3 54.6

Transfers received 195.7 161.9 82.7 172.4 172.0 86.9 50.5 Fines, penalties and forfeits 3.6 1.9 52.7 3.8 11.8 5.8 48.8 Interest, dividends and rent on 2.5 1.4 54.9 2.6 2.6 1.0 39.4 Sales of capital assets 52.7 35.0 66.5 55.3 28.5 – – Financial transactions in assets 348.5 123.5 35.4 255.0 66.0 12.0 18.1 TOTAL RECEIPTS 902.5 454.1 50.3 803.5 563.3 259.9 46.1

Actual receipts

PCD 1st 2nd QR 2011 Fin Perf

1515

FY 2011/12: SPECIAL DEFENCE ACCOUNTMID YEAR COMPARISON

SN CATEGORIES FA %

2011

ORDER %

2011

PAID %

2011

PAID %

2010

a b c d e

1 SDPs 52 50 3 17

2 Largest Projects 67 65 13 14

3 Capital 75 70 26 23

4 Operating 84 77 27 28

5 Sensitive 87 87 35 21

6 Total 70 66 17 18

7 Excluding SDPS 75 71 21 19

PCD 1st 2nd QR 2011 Fin Perf

1616

ABRIDGED REPORT ON STATE OF EXPENDITURE AS AT 30 SEPTEMBER 2011

SN EXP END OF SEP 2011

PROJ TO END MAR 2012

TOTAL AENE DEV

RM RM RM RM RM

a b c d e

1 15 770,7 18 810,7 34 581,4 34 349,0 (232,4)

45,9% OF AENE

Note: Deviation mainly due to unforeseeable and unavoidable expenditure not received through the AENE:

1.Treasury Memoranda Submitted – RM89,5.2.Improvement in Conditions of Service – RM142,9.

PCD 1st 2nd QR 2011 Fin Perf

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CUMULATIVE STATE OF EXPENDITURE

PCD 1st 2nd QR 2011 Fin Perf

1818

Discussions

Thank You

PCD 1st 2nd QR 2011 Fin Perf