SCOPA Presentation on the Irregular and Fruitless and Wasteful Expenditure of SAA and its Subsidiaries for 2015/16 FY 23 August 2017 2/18/2019

Table of Contents Objectives of the Presentation Summary of the Irregular, Fruitless and Wasteful Expenditure of SAA and its Subsidiaries for 2015/16 FY Categories of Irregular Expenditure Categories of Fruitless and Wasteful Expenditure Internal controls in place to monitor and report on the Irregular, Fruitless and Wasteful expenditure Challenges to reduce the Irregular, Fruitless and Wasteful Expenditure 2/18/2019

Objectives of the Presentation Today’s presentation is to: present the 2015/16 FY Irregular, Fruitless and Wasteful expenditure for SAA and its Subsidiaries. To provide the categories of classification and reporting of Irregular, Fruitless and wasteful expenditure. Provide the internal controls in place Articulate the challenges in reducing the occurrence of irregular, fruitless and wasteful expenditure 2/18/2019

Summary of 2015/16 FY – Irregular, Fruitless and Wasteful expenditure 2/18/2019

Comparison of 2015/16 and 2014/15 FY – Irregular, Fruitless and Wasteful expenditure (Group Level) 2/18/2019

Comparison of 2015/16 and 2014/15 FY – Irregular Spend (Group Level) Note: These are irregular spend without loss to the business. 2/18/2019

Comparison of 2015/16 and 2014/15 FY – Fruitless and Wasteful Expenditure (Group Level) Definitions: Avoidable costs – is costs that the business could have avoided. Unavoidable costs – costs inherent in the business due to aviation regulations. 2/18/2019

Internal controls in place PFMA policy in place Articulating the roles and responsibilities for key stakeholders in the process of identification collating and reporting of PFMA SAA Disciplinary Code – managed by Employee Relation department. PFMA Forum and Terms of Reference in place Meetings takes place on quarterly basis. Unpack the PFMA non-compliance occurred and obtain reasons/challenges that created the non-compliance Establish what actions in place to mitigate the occurrence of such going forward. Developed templates (standard) to collate and report PFMA non-compliance. PFMA Training being done to create awareness to the business. PFMA KPIs introduced in all the Balance Scorecards of General Managers/Head of Departments. Quarterly departments complete the PFMA, which are signed off by General Managers/Head of Departments. Signed declarations provides the following acknowledgement and accountability: Amounts declared are valid Evidence supporting the declarations exists and properly signed off. Actions have been taken to mitigate the occurrence of PFMA non-compliance in future. 2/18/2019

Challenges to reduce Irregular, Fruitless and wasteful Expenditure Timely communication between business and procurement to assist in sourcing goods or services. Lack of contract management by business. Delays in renewal of contracts required by business Inconsistent application of SAA disciplinary code. Lack of enforcement of consequence management. Delays in approval/governance process. 2/18/2019

THANK YOU 2/18/2019