Presentation by Ms N Fundakubi Chief Financial Officer April 2013 SCOA PRESENTATION Budget vs. actual expenditure for the period ended 31 December 2012 Presentation by Ms N Fundakubi Chief Financial Officer April 2013 1

Presentation outline Overview Budget and actual expenditure per programme Budget and actual expenditure per economic classification Administration Water Sector Management Water Infrastructure Management Regional Implementation and Support Water Sector Regulation International Water Cooperation Reasons for major variances 2

Expenditure outcome as at 31 December 2012 Expenditure as at 31 December 2012   Programme (R'000) Budget Expenditure Variance % Spent Administration 865 002 625 198 239 804 72% Water Sector Management 454 287 355 529 98 758 78% Water Infrastructure Management 2 251 496 1 197 795 1 053 701 53% Regional Implementation and Support 5 283 656 2 202 309 3 081 347 42% Water Sector Regulation 110 243 70 329 39 914 64% International Water Cooperation 28 478 17 390 11 088 61% Total 8 993 162 4 468 550 4 524 612 50%

CONSOLIDATED DEPARTMENTAL EXPENDITURE   VOTED FUNDS EARMARKED FUNDS TOTAL UNIT Adjusted Budget YTD Exp 31 December 2012 Variance % Spent YTD Exp 31 December 2012 PROGRAMME Administration 536 583 437 754 98 829 82% 328 419 187 442 140 977 57% 865 002 625 196 239 806 72% Water Sector Management 388 797 337 529 51 268 87% 65 490 18 000 47 490 27% 454 287 355 529 98 758 78% Water Infrastructure Management - 0% 2 251 496 1 197 795 1 053 701 53% Regional Implementation and Support 977 548 821 458 156 090 84% 4 306 108 1 380 851 2 925 257 32% 5 283 656 2 202 309 3 081 347 42% Water Sector Regulation 70 885 57 145 13 740 81% 39 358 13 184 26 174 33% 110 243 70 329 39 914 64% International Water Cooperation 27 853 17 390 10 463 62% 625 28 478 11 088 61% Total 2 001 666 1 671 276 330 390 83% 6 991 496 2 797 272 4 194 224 40% 8 993 162 4 468 548 4 524 614 50% EXPENDITURE PER ECONOMIC CLASSIFICATION   Current payment 1 692 383 1 407 755 284 628 83% 778 826 234 739 544 087 30% 2 471 209 1 642 494 828 715 66% Compensation of employees 1 034 735 766 674 268 061 74% 23 529 5 965 17 564 25% 1 058 264 772 639 285 625 73% Goods and services 655 207 638 445 16 762 97% 755 297 228 774 526 523 1 410 504 867 219 543 285 61% Interest and Rent on land 2 441 2 355 86 96% - 0% Financial transaction in assets & liabilities 281 (281) Unauhorised expenditure Transfer and Subsidies 64 876 53 881 10 995 2 844 555 1 540 150 1 304 405 54% 2 909 431 1 594 031 1 315 400 55% Province and Municipalities 122 259 (137) 212% 562 434 324 335 238 099 58% 562 556 324 594 237 962 Departmental agencies and accounts 50 946 41 331 9 615 81% 2 071 496 1 078 285 993 211 52% 2 122 442 1 119 616 1 002 826 53% Universities and Technikons Foreign Govt & International Organisations 501 (501) 180 625 119 510 61 115 120 011 60 614 Public Co operations & Private Enterprises 9 (9) 18 000 100% 18 009 Non-Profit Institutions 490 (490) Households 13 808 11 291 2 517 82% 12 000 20 11 980 25 808 11 311 14 497 44% Payment of Capital Assets 244 407 209 640 34 767 86% 3 368 115 1 022 383 2 345 732 3 612 522 1 232 023 2 380 499 34% Building & Other fixed structures 145 203 166 953 (21 750) 115% 3 367 455 1 017 452 2 350 003 3 512 658 1 184 405 2 328 253 Machinery &Equipment 84 009 41 585 42 424 50% 660 4 931 (4 271) 747% 84 669 46 516 38 153 Cultivated assets Software & and other intangible assets 15 195 1 102 14 093 7% Land and subsoil assets Total 2 001 666 1 671 276 330 390 6 991 496 2 797 272 4 194 224 40% 8 993 162 4 468 548 4 524 614 4

5 ADMINISTRATION VOTED FUNDS EARMARKED FUNDS TOTAL UNIT   VOTED FUNDS EARMARKED FUNDS TOTAL UNIT Adjusted Budget YTD Exp 31 December 2012 Variance % Spent PROGRAMME Ministry 24 382 33 630 (9 248) 138% - 0% Departmental Management 81 313 63 099 18 214 78% Internal Audit 26 747 12 618 14 129 47% Corporate Services 303 436 249 766 53 670 82% 12 000 315 436 65 670 79% Financial Management 100 705 78 641 22 064 Office Accommodation 316 419 187 442 128 977 59% Total 536 583 437 754 98 829 328 419 140 977 57% 865 002 625 196 239 806 72% EXPENDITURE PER ECONOMIC CLASSIFICATION   Current payment 498 779 416 660 82 119 84% 316 419 187 442 128 977 59% 815 198 604 102 211 096 74% Compensation of employees 274 236 222 613 51 623 81% - 0% Goods and services 224 543 193 312 31 231 86% 540 962 380 754 160 208 70% Interest and Rent on land 454 (454) Financial transaction in assets & liabilities 281 (281) Unauhorised expenditure Transfer and Subsidies 2 575 6 074 (3 499) 236% 12 000 14 575 8 501 42% Province and Municipalities Departmental agencies and accounts 1 575 Universities and Technikons Foreign Govt & International Organisations Public Co operations & Private Enterprises Non-Profit Institutions 490 (490) Households 1 000 5 584 (4 584) 558% 13 000 7 416 43% Payment of Capital Assets 35 229 15 020 20 209 Building & Other fixed structures 2 929 3 942 (1 013) 135% Machinery &Equipment 19 388 10 207 9 181 53% Cultivated assets Software & and other intangible assets 12 912 871 12 041 7% Land and subsoil assets Total 536 583 437 754 98 829 82% 328 419 140 977 57% 865 002 625 196 239 806 72% 5

WATER SECTOR MANAGEMENT   VOTED FUNDS EARMARKED FUNDS TOTAL UNIT Adjusted Budget YTD Exp 31 December 2012 Variance % Spent PROGRAMME Policy Planning and Management Support 4 143 2 633 1 510 64% - 0% Intergrated Planning 87 852 113 976 (26 124) 130% 40 000 127 852 13 876 89% Policy and Strategy 27 971 19 754 8 217 71% Water Ecosystem 31 461 22 514 8 947 72% Water Information Management 155 369 114 022 41 347 73% Institutional Oversight 82 001 64 630 17 371 79% 25 490 18 000 7 490 107 491 82 630 24 861 77% Total 388 797 337 529 51 268 87% 65 490 47 490 27% 454 287 355 529 98 758 78% EXPENDITURE PER ECONOMIC CLASSIFICATION   Current payment 304 801 271 070 33 731 89% 47 490 - 0% 352 291 81 221 77% Compensation of employees 161 967 122 906 39 061 29% 76% Goods and services 142 594 147 730 (5 136) 20% 190 084 42 354 78% Interest and Rent on land 240 434 (194) 80% 181% Financial transaction in assets & liabilities Unauhorised expenditure Transfer and Subsidies 49 371 41 414 7 957 84% 18 000 100% 67 371 59 414 88% Province and Municipalities Departmental agencies and accounts 41 327 8 044 19% Universities and Technikons Foreign Govt & International Organisations Public Co operations & Private Enterprises Non-Profit Institutions Households 87 (87) Payment of Capital Assets 34 625 25 045 9 580 72% Building & Other fixed structures 27 219 17 502 9 717 64% Machinery &Equipment 5 931 7 347 (1 416) 124% Cultivated assets Software & and other intangible assets 1 475 196 1 279 13% Land and subsoil assets Total 388 797 337 529 51 268 87% 65 490 27% 454 287 355 529 98 758 6

WATER INFRASTRUCTURE MANAGEMENT   VOTED FUNDS EARMARKED FUNDS TOTAL UNIT Adjusted Budget YTD Exp 31 December 2012 Variance % Spent YTD Exp 31 December 2012 PROGRAMME Infrastucture Development and Rehabilitation - 0% 2 092 003 1 091 466 1 000 537 52% Operation of Water Resources 159 493 106 329 53 164 67% Total 2 251 496 1 197 795 1 053 701 53% EXPENDITURE PER ECONOMIC CLASSIFICATION   Current payment - 0% Compensation of employees Goods and services Interest and Rent on land Financial transaction in assets & liabilities Unauhorised expenditure Transfer and Subsidies 2 251 496 1 197 795 1 053 701 53% Province and Municipalities Departmental agencies and accounts 2 071 496 1 078 285 993 211 52% Universities and Technikons Foreign Govt & International Organisations 180 000 119 510 60 490 66% Public Co operations & Private Enterprises Non-Profit Institutions Households Payment of Capital Assets Building & Other fixed structures Machinery &Equipment Cultivated assets Software & and other intangible assets Land and subsoil assets Total 7

REGIONAL IMPLEMANTATION AND SUPPORT   VOTED FUNDS EARMARKED FUNDS TOTAL UNIT Adjusted Budget YTD Exp 31 December 2012 Variance % Spent PROGRAMME Regional Management and Support 7 094 3 780 3 314 53% - 0% Sector Support and Intergovernmental Relations 474 002 420 034 53 968 89% 425 300 6 506 418 794 2% 899 302 426 540 472 762 47% Institutional Establishment 19 679 15 296 4 383 78% Regional Programme Coordination 6 Regional Bulk 722 (722) 2 589 320 1 050 008 1 539 312 41% 1 050 730 1 538 590 Transfer of Water Schemes 148 492 78 954 69 538 562 434 324 335 238 099 58% 710 926 403 289 307 637 57% Support Services 298 728 224 811 73 917 75% 2 (2) 224 813 73 915 Water Services Projects 60 753 (60 753) 619 054 558 301 10% Intergrated Catchment Management 29 547 17 108 12 439 Mine Water Management 110 000 Total 977 548 821 458 156 090 84% 4 306 108 1 380 851 2 925 257 32% 5 283 656 2 202 309 3 081 347 42% EXPENDITURE PER ECONOMIC CLASSIFICATION   Current payment 791 967 646 816 145 151 82% 376 219 34 113 342 106 9% 1 168 186 680 929 487 257 58% Compensation of employees 529 715 374 753 154 962 71% 12 959 5 965 6 994 46% 542 674 380 718 161 956 70% Goods and services 260 201 270 603 (10 402) 104% 363 260 28 148 335 112 8% 623 461 298 751 324 710 48% Interest and Rent on land 2 051 1 460 591 - 0% Financial transaction in assets & liabilities Unauhorised expenditure Transfer and Subsidies 12 930 5 871 7 059 45% 562 434 324 355 238 079 575 364 330 226 245 138 57% Province and Municipalities 122 259 (137) 212% 324 335 238 099 562 556 324 594 237 962 Departmental agencies and accounts 4 (4) Universities and Technikons Foreign Govt & International Organisations Public Co operations & Private Enterprises 9 (9) Non-Profit Institutions Households 12 808 5 599 7 209 44% 20 (20) 5 619 7 189 Payment of Capital Assets 172 651 168 771 3 880 98% 3 367 455 1 022 383 2 345 072 30% 3 540 106 1 191 154 2 348 952 34% Building & Other fixed structures 115 055 145 509 (30 454) 126% 1 017 452 2 350 003 3 482 510 1 162 961 2 319 549 33% Machinery &Equipment 56 792 23 227 33 565 41% 4 931 (4 931) 28 158 28 634 50% Cultivated assets Software & and other intangible assets 804 35 769 4% Land and subsoil assets Total 977 548 821 458 156 090 84% 4 306 108 1 380 851 2 925 257 32% 5 283 656 2 202 309 3 081 347 42% 8

WATER SECTOR REGULATION   VOTED FUNDS EARMARKED FUNDS TOTAL UNIT Adjusted Budget YTD Exp 31 December 2012 Variance % Spent PROGRAMME Regulation Management and Support 2 935 222 2 713 8% - 0% Economic and Social Regulation 3 700 821 2 879 22% Water Use Authorisation 14 977 15 903 (926) 106% Drinking Water Quality and Waste Water Services 26 313 9 153 17 160 35% 20 974 12 213 8 761 58% 47 287 21 366 25 921 45% Resource Regulation 7 109 24 671 (17 562) 347% 18 384 25 493 822 97% Compliance and Monitoring 788 22 766 3% Enforcement 15 063 6 353 8 710 42% 971 (971) 7 324 7 739 49% Total 70 885 57 145 13 740 81% 39 358 13 184 26 174 33% 110 243 70 329 39 914 64% EXPENDITURE PER ECONOMIC CLASSIFICATION   Current payment 70 268 56 883 13 385 81% 38 698 13 184 25 514 34% 108 966 70 067 38 899 64% Compensation of employees 52 308 35 172 17 136 67% 10 570 - 0% 62 878 27 706 56% Goods and services 17 875 21 711 (3 836) 121% 28 128 14 944 47% 46 003 34 895 11 108 76% Interest and Rent on land 85 Financial transaction in assets & liabilities Unauhorised expenditure Transfer and Subsidies 22 (22) Province and Municipalities Departmental agencies and accounts Universities and Technikons Foreign Govt & International Organisations 1 (1) Public Co operations & Private Enterprises Non-Profit Institutions Households 21 (21) Payment of Capital Assets 617 240 377 39% 660 1 277 1 037 19% Building & Other fixed structures Machinery &Equipment 613 373 1 273 1 033 Cultivated assets Software & and other intangible assets 4 Land and subsoil assets Total 70 885 57 145 13 740 39 358 26 174 33% 110 243 70 329 39 914 9

INTERNATIONAL WATER COOPERATION   VOTED FUNDS EARMARKED FUNDS TOTAL UNIT Adjusted Budget YTD Exp 31 December 2012 Variance % Spent PROGRAMME International Relation Management and Support 5 740 3 063 2 677 53% - 0% Africa Cooperation 11 366 5 791 5 575 51% 625 11 991 6 200 48% GlobalCooperation 10 747 8 536 2 211 79% Total 27 853 17 390 10 463 62% 28 478 11 088 61% EXPENDITURE PER ECONOMIC CLASSIFICATION   Current payment 26 568 16 326 10 242 61% - 0% Compensation of employees 16 509 11 230 5 279 68% Goods and services 9 994 5 089 4 905 51% Interest and Rent on land 65 7 58 11% Financial transaction in assets & liabilities Unauhorised expenditure Transfer and Subsidies 500 (500) 625 125 80% Province and Municipalities Departmental agencies and accounts Universities and Technikons Foreign Govt & International Organisations Public Co operations & Private Enterprises Non-Profit Institutions Households Payment of Capital Assets 1 285 564 721 44% Building & Other fixed structures Machinery &Equipment ` Cultivated assets Software & and other intangible assets Land and subsoil assets 10

Reasons for under/or over expenditure Programme 1: Administration The spending in this programme is within the acceptable level, however the following should be noted: Skills Development Levy payment amounting to R1.5 million will be made in the fourth quarter of the financial year. Inconsistencies and delays of receiving invoices from the Department of Public Works (DPW) have resulted in under spending in respect of Office Accommodation. Follow ups are being made with the Department of Public Works. It is anticipated that expenditure will increase in the fourth quarter of the financial year. It is anticipated that Branch: Corporate Services will over spend its allocated budget by approximately R22 million and this is mainly due to budget cuts declared by National Treasury. The main cost drivers within Corporate Services are advertising costs for recruitment, information technology Services, Property contract payments (Security, Cleaning and Maintenance). Most of these costs drivers are shared services between Main Account and Water Trading Entity. An Analyses for shared services between these two accounts are being finalized in order to recover expenditure incurred on behalf of the WTE to defray over expenditure in Main Account (Corporate Services).The claim was submitted in March 2013 and the Department received payment in the same month of March. 11

Reasons for under/or over expenditure Programme 2: Water Sector Management The spending in this programme is higher due to:   The expenditure on goods and services is slightly over by 2% due to budget cuts implemented by National Treasury. The expenditure on payments for capital assets is higher as result of a payment that was paid by the Department on behalf of the Namibian Government for a projects which are co-funded. The funds have been refunded by the Namibian Government, a Journal will be processed to rectify/reduce the over expenditure under payment for capital assets. 12

Reasons for under/or over expenditure Programme 3: Water Infrastructure Management Water Infrastructure Management programme spent 53% of its allocated budget which is the largest contributor of under expenditure in the department. The expenditure mostly driven by infrastructure projects such as Construction of De Hoop Dam, Dam Safety Rehabilitation Programme, Olifants River Water Resources Development Project – Phase 2 Bulk Distribution System, and Mdloti River Development (Hazelmere Dam Raising), Water Services Projects (Nandoni Pipeline, Inyaka and Hluhluwe Water Treatment works) . The under expenditure on this programme is mainly due to the following: Industrial action at the De Hoop dam constructions. Slow delivery of pipes as result of quality problems. Delays in submission of invoices for the work done in respect of bulk distribution. Decision pending the configuration of the dam on Raising of Hazelmere Dam wall. The design of Hezel Mere was also delayed due to the ground conditions experienced at the beginning of the projects . Delays in appointment of Profession Service Providers in respect of Dam Safety Rehabilitation Programme. Decision pending of the configuration of the dam wall in respect of Development Raising of Hazelmere Dam. 13

Reasons for under/or Over Expenditure Programme 4: Regional implementation and Support The under expenditure on this programme is mainly due to the following: Operational Expenditure Analysis The expenditure on compensation of employees is under spending because of vacant posts. The Occupational Specific Dispensation (OSD) technician posts have not been filled because suitable candidates were not found. As result of delays on filling of OSD posts, funds allocated for the procurement of office furniture and equipment could not be spent Infrastructure Expenditure Analysis  Various delays in municipalities contributed towards under expenditure such prolonged procurement processes and appointment of professional service provider, legal disputes between municipalities and contractors, service delivery protests, constructions of projects progressing slowly due to floods and municipal institutional challenges. Hydro Equipments have been ordered abroad which affected the expenditure in respect of machinery and equipment, these machines is anticipated to be delivered and processed in the fourth quarter. An amount of R20.8 million in respect of Harties Water Quality has been committed and it is anticipated that invoices will be processed in the third and fourth quarter of the financial year. Delays in land expropriation and approval of Water License after verification in Mpumalanga. Water Services Projects received invoices which amount to over R186 million, it is anticipated that they will be paid in January 2012. These projects are implemented by Water Trading Entity on behalf of Main Account and based on the projected expenditure for the entire year and projects plans, it is anticipated that R620 million will be fully utilised. Delays for processing of invoices are due to change in payment process as result of appointment of the Programme Manager. The expenditure is expected to increase in the coming months. OPERATIONAL BUDGET

Reasons for under/or Over Expenditure Programme 5: Water Sector Regulations The under expenditure on this programme is mainly due to the following: Expenditure on compensation of employees is under spending due to unfilled vacant posts. As result of delays on filling of OSD posts, funds allocated for the procurement of office furniture and equipment could not be spent OPERATIONAL BUDGET

Reasons for under/or Over Expenditure Programme 6: International Water Co-operation The under expenditure on this programme is mainly due to the following: The expenditure incurred for delegates who attended International Water Week, Stockholm still to be submitted by Department of International Relations and Co-operations (DIRCO). it is anticipated that invoices for training will be processed in the fourth quarter. Computer Software (MS Projects) had been procured and payments will be processed in the fourth quarter. Payment of Registration fees for WWC & OECD Membership submitted to be processed. A strategic session had been conducted and payments will be processed in the fourth quarter. Two bilateral to China and Malaysia was planned for but have not been approved. Transfer payment for membership for AMCOW is only payable upon receipts of the invoice from the AMCOW Secretariat and is expected to be paid in the fourth quarter of the financial year. OPERATIONAL BUDGET

THANK YOU 17