MARINE LIVING RESOURCES FUND (MLRF) ANNUAL REPORT 2007/2008

INTRODUCTION The Marine Living Resources Fund (MLRF) finances the operations of the Marine and Coastal Management Program This Program is responsible for: Managing the development and sustainable use of SA’s marine and coastal resources Protecting the integrity of SA’s marine and coastal ecosystems Striving to achieve a healthy balance between sustainable utilisation of resources while also protecting and conserving these same resources

ANNUAL REPORT SUMMARY This Annual Report reflects a turnaround in the management and administration of the MLRF. The turnaround strategy for the MLRF was developed in August 2006 in response to: Cash Flow Problems experienced by the MLRF Auditor General’s Report (2002-2005) and SCOPA Hearing Lack of skills, capacity and appropriate financial systems Corrective strategies focused on corporate governance, risk management and compliance with International Accounting Standards. Improved results achieved 2 years ahead of schedule

ANNUAL REPORT SUMMARY In the 2002-2005 Annual Reports (submitted for auditing three years late), the Auditor-General identified a number of concerns including: Lack of Internal Controls Lack of compliance with the PFMA No proper accounting and fixed asset system Lack of Historical Data and supporting documentation Insufficient control on Debtors and Income Failure to adhere to the principles of Accrual Accounting Staffing Issues (capacity and skills)

ANNUAL REPORT SUMMARY In the 2005/2006 audit report there were twenty-two qualifications resulting in the Auditor-General deciding not to express an opinion on those financial statements In the 2006/2007 audit report the Auditor-General expressed an opinion with six qualifications In the current audit report the Auditor-General expressed an unqualified audit opinion with no qualifications and no emphasis of matter affecting the audit report

COMPARISONS BETWEEN 2005/2006, 2006/2007 & 2007/2008 FINANCIAL YEARS A comparison of the last three years audit findings by the Auditor-General:

FINANCIAL PERFORMANCE 2007/2008 also reflects a healthier financial position (positive accumulated surplus) Better finances means more sea days for research and compliance vessels Better able to fulfill mandate This growth allows the MLRF to build and leverage on a strengthened balance sheet

FINANCIAL PERFORMANCE

PERFORMANCE INFORMATION The Auditor-General reviewed the performance information, including performing procedures of an audit nature to obtain evidence about the performance information and related systems, processes and procedures The Auditor-General concluded that no significant findings have been identified as a result of their review of the performance information THANK YOU