1 Financial Management Report to the Portfolio of Parliament of RSA Portfolio for Women in the Presidency 12 October 2016

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 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 The funds allocated by Parliament through the Appropriation Act of

Annual Financial Statements at 31 March – Statement of Financial Performance – Statement of Financial Position – Statement of Cash flow – Statement of Changes in Net Assets Risk Management Corporate Services Audit and PFMA related matters 3 Table of contents

4 For the year the expenditure of R71, 5 million exceeded the annual allocation. The CGE spent all its budget for the period There has been extra-ordinary income arising from special grants and donor income – altogether at R6 million The actual spending against the annual allocation of R67, 7 million over-ran by R3, 8 m on close analysis The resulting surplus (R2,1 m) is therefore attributed to book entries made in line with GRAP23 to account for a conditional grant made by National Treasury for the purchase of assets.

Revenue & Income figuresNotes Transfers from National Treasury stable at R67,7 million due to budgetary reductions announced in the 2014 Budget statement by the Minister of Finance. Conditional grant is non-cash (not a transfer) but book entries made to account for the permission granted by NT for the utilisation of funds accumulated in previous periods. Donations in Kind arose from free service rendered by the SABC for Public Service Announcements (PSA’s) on Radio and TV on various awareness & education campaigns of the Commission.

Budget Comparatives 6 Extra-budget allocation (6% more)from grants, interest & donations. Operating expenditure reflects savings from efficiency gains on travel & accommodation, arising from cost containment measures instituted in the year. R1,4 m over-spending on Administrative expenditure due to legal fees, mainly for core/legal mandate defence of its investigation reports. Personnel costs higher than budget due to cost of living adjustment that realised at 2% more than anticipated.

Good news is that most spending is directed at core service delivery at 55% for line functions and 16% for Commissioners. Thus the Admin support functions only consumed 29% of the spending for the year. Additional spending was compensated for by donations and interest income More resources spending was focused on core service delivery in line with the approved APP and appropriation Act.

Commentary Although head office accounts for most spending, there is size-able presence of the CGE services at grass- root level provided by provincial offices, supplemented by regular support by Commissioners, Management and functionaries from head office. – Most of the personnel executes work for the core service delivery programme – More than 50% of COE on core programme was spent at provincial level. – There were efficiency gains on goods & services signified by the relative comparisons to HQ

9 Liquidity is sound with current ratio at parity Although solvency/NAV is positive at R7m by 31 March 2016, the accumulated surplus basically represents the non- current assets which will be written off as depreciation over the years. Hence with operating budget pressures and without additional funding, the solvency situation will deteriorate inevitably over the medium term

Accumulated SurplusCommentary The accumulated surplus/equity is backed by non-current/long term assets, effectively meaning that the balance represents future depreciation of PPE & amortisation of the intangible assets. It is estimated that the balance will be totally diminished within the next 36 months. Balance is non-cash and is nota available for use. All cash surpluses component has been used previously in line with the application for use/retention that was granted by NT – for investment in ICT & Fleet in the main.

-Inflows and outflows from operating activities remain constant between comparative periods -R4 million invested into PPE over the past 12 months period -Cash held reducing over time and anticipated to be under pressure over the next 12 months period. 11

Risk Management Compliance to section 66 of the Public Finance Management Act ( on Financial Assets & Liabilities): – No exposure to Credit, credit, liquidity, interest rate risk except as disclosed in the AFS. There are no material Risk exposures – actual/potential known to management not subjected to RM responsibilities as outlined in the PFMA Contingencies There are no possible claims and/or liabilities from which or against which there will respectively be possible in- flows or out-flows. No material fraud were recorded or suspected during the period, whatsoever.

13 HR - Personnel cost per band 52% of the COE bill is for the remuneration of officers, mainly professionals delivering on the direct/core business as legislated. 4 of the 6 ( 67%) senior managers (i.e. except for CEO & CFO) discharges responsibilities directly for the operations in direct line functions: Research, Legal, PEI & PLU). Over 70% of COE bill was for MMS and lower graded employees. The cost include performance bonus provision of R1,7 m, payable in the new financial year.

14 Human Resources Management & Compliance with Labour Laws The average leave days taken per employee during the period was 20 days. This signifies proper leave management and compliance to the provisions of the Basic Conditions of Employment Act (section 22). Sick leave taken averaged 8 per person per year – There has not been undue loss of productivity during the financial year. Although during the period there has been 21 terminations of service contracts, the vacancy rate has drastically reduced when compared to previous periods – 12% for 2015/2016 period. Employment equity in the overall favours women at 68% (69 from 102 total employed). Africans constitutes 91% of the establishment. Skills Development rolled out In line with a WSP (Workplace Skills Plan which was filed with SETA (services). For the year R375, 000 was pent compared to R613, 000 in the previous financial year. This was due to the fact that a M&E training which was planned as per WSP (2015) was rescheduled to take place during the 2016/2017 period.

ICT - Improvement projects In line with a 5 year ICT strategy, R4,5 million was invested for the ICT infrastructure over the past two financial years: – As planned, servers & desktops were procured and accordingly installed/distributed to users. – Local Area Network(LAN) connectivity successfully finalised. – Wide Area Network concluded, supported by 3 rd Party Service Provider (Vox Telecoms). All offices are connected to the CGE network. – Office 365 provides a platform for Collaborative services. Software installed and functional. The core project was finalised in Jan/Feb of ICT - Service maintenance activities Systems change-over to new platform occurred with minimal interruptions/Business continuity. Change management and Risk Management were incorporated to ensure seamless transition. Data migration from the legacy environment was successful – No loss of data/information. Business process improvements already noted in the new platforms – revised financial management process, payroll & leave management, website, etc. Desktop equipment & support. All risks of technological obsolesce and its impact of BC and information security were fully mitigated. 15 Information and Communications Technology

16 Communications Capacity Communications activities/Tactics In pursuance and support of the PEI strategies Campaigns Partnered with SABC, NCRF and NEMISA to distribute messages through electronic media channels. The interventions for Women Month and 16 days of Activism were undertaken Outdoor Branding Campaigns through social responsibility project with 3 rd parties were undertaken as pilot in Gauteng. Continued contact with the Nation Media Relations Media statements & Press Releases on current affairs and topical gender issues and developments were recorded. The increase signifies the CGE ability to be responsive but as well the public interest in the CGE and its relevance to the general social developments in the broader society. Improving and sustaining the image of the CGE Branding All offices (old and new) were rebranded CGE vehicle fleet were branded, also leveraging the communication of important messages to the public, including Fraud line, complaints toll free lines Wider Reach and effectiveness Partnering, Collaborations& use of alternative media Core internal team of 3 personnel

17 Unfavourable Favourable Audit Action Plans and Commitments to remedy. Although no significant findings were noted, there is a number of recommendations from the AGSA to strengthen the internal control systems. Management has since drawn plans to implement the recommendations under the direct oversight by the Audit Committee & CGE governance structures. CGE still awaits National Treasury to condone the previously incurred Irregular expenditure. There were no irregular expenditure recorded during the current year. Audit Action Plans and Commitments to remedy. Although no significant findings were noted, there is a number of recommendations from the AGSA to strengthen the internal control systems. Management has since drawn plans to implement the recommendations under the direct oversight by the Audit Committee & CGE governance structures. CGE still awaits National Treasury to condone the previously incurred Irregular expenditure. There were no irregular expenditure recorded during the current year.

Summary Conclusions For the period under review, the financial activities were undertaken according to budget and in compliance with laws and regulations. There internal controls systems and governance structures are in place and maintained, with noted improvements from previous periods. This was a direct benefit from the implementation of Audit action plans in line with commitments made by the CGE to AGSA. The audit outcomes for 2015/2016 represents and demonstrates the consolidation phase effort put in over the previous few years. Amongst other intended future plans, the CGE will implement further plans of action in order to address or improve on some of the weaknesses noted by AGSA. The CGE will also work to sustain the financial viability of the institutions, working together with National Treasury and other stakeholders. 18

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