Review of Expenditure Trends & MTEF Allocations 2010/11 – 2011/ /13 Presentation by N Ngcaba 20 April

Issues for Discussion Y/Y Comparative Expenditure Patterns Review Challenges and Risks identified Baseline and MTEF Allocations Review Ratio of Goods and Services Review of Foreign Assistance and Projects Transfers to Public Entities Efficiency Models and Resourcing the Department 2

Comparative Expenditure Patterns per Items 2007/08 Budget 2007/08 Audited 2006/07 Budget 2006/07 Audited Compensation of Employees R’ R’ R’ R’ Goods and Services Other Financial Equivalents Transfers: DEAT Agencies Transfers: Non Profit Institutions Transfers: Foreign Governments---- Capital Asset Departmental Totals Y/Y spend99,94%99,90% 3

Comparative Expenditure Patterns per Items 2008/09 Budget 2008/09 Audited 2009/10 Budget 2009/10 Audited Compensation of Employees R’ R’ R’ R’ Goods and Services Other Financial Equivalents Transfers: DEAT Agencies Transfers: Non Profit Institutions Transfers: Foreign Governments9 000 Capital Asset Departmental Totals Y/Y spend99,76%99,95% 4

Challenges Identified in Expenditure Trends of +/- 99% Inflation and global economic decline has significantly affected financial resources across all Entities Baseline short funding has drastically reduced the budget margin of safety on annual bases Further short funding is anticipated in outer years Donor funds also expected to decrease therefore placing more pressure on the department to fund environmental projects and mandates More constraints anticipated in linking the MTEF to strategic plan, service delivery and structure development Possible delays in in the implementation of new or continuation of existing environmental projects DEA financial after split e.g. building, structure and systems still to be factored Less flexibility and possible delays in internal & external co-ordination of environmental mandates Audit exposures for performance Audit where funds are not available Unprecedented increase in occupancy and municipality costs 5

Strategic Risks Identified Risk DescriptionContributory Factor/sInherent Risk Shrinking PurseReduction of MTEF allocations (NT) leading to budget constraints 16 Insufficient Baseline allocation for operational expenditure Insufficient funds for the implementation of environmental mandates ands priorities 12 Insufficient funds for Intergovernmental Co-ordination and Integration Insufficient funds for the co- implementation of environmental sector plans and systems 9 Possible loss of opportunities and leveraging of economic development Limited developmental focus in the implementation of environmental mandate 9 Inadequate funds for internal integration Insufficient funs for organizational growth, structure funding, systems development and knowledge expansion 12 6

Review of Baseline Request and Allocations 2009/102010/112011/12 R’000 Departmental Baseline Requested Adjustment to Baseline Actual Adjustment to Baseline Initial Total allocated (Dec 08) Further cuts January 2009(34 417)(42 990)(48 641) Final Total Allocation January % Increase to Baseline0.01%3.2%14.8% Note: 14% to the replacement of Polar Vessel – SA Agulhas 7

Review of MTEF 2010/11 – 2012/ /112011/122012/13 R’000 Departmental Baseline Additional funds allocated to baseline New Building SAWS Early Warning System and Risk Reduction Compensation of Employees adjustment Earmarked EPWP Incentives Earmarked Climate Change Dialogue % Baseline Increase.004%.005% 8

Cont… Review of MTEF 2010/11 – 2012/ /112011/122012/13 Adjustment, Efficiency Savings and Transfers( )( )( ) DEA cut(3 635)(9 341)(531) SANPARKS & MLRF Retained Revenue cuts(83 914)(88 613)(94 306) Tourism Functions Transfer( )( )( ) Fisheries Function Transfer( )( )( ) DEA MTEF Allocation

Ratio of Compensation to Goods and Services 2009/102010/112011/122012/13 Compensation of Employees R’ R’ R’ R’ Goods and Services Current Ratio1 : 1,491 : 1,341 : 1,191 : 1,22 Desired Ratio including inflation adjustment1 : 1,81 : 1,91 : 2,01 : 2,2 10

Foreign Assistance received and Projects Finalised Donor Country2006/072007/082008/09 European Union R’ R’000 0 R’000 0 UNEP UNESCO Netherlands Denmark Norway Flanders Total

Foreign Aid Assistance CountryProject2010/112011/122012/13 R’000 Denmark Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes Tanzania Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes 146 Kenya Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes 568 Denmark Urban Environmental Development Programme World Bank African Stockpile Programme (Hazardous Waste) Total

Transfers to Public Entities MTEF Public Entity2010/112011/122012/13 R’000 South African Weather Services iSimangaliso Wetland Park Authority South African National Parks South African National Biodiversity Institute Total

Infrastructure Investment MTEF Sub Programme2010/112011/122012/13 R’000 South African Weather Service Infrastructure Investment Modernisation Programme iSimangaliso Wetland Park Authority Infrastructure Investment Duku South African National Biodiversity Institute Infrastructure Investment Expansion Botanical Gardens South African National Parks Infrastructure Development Total

Efficiency Models and Resourcing the Department Alternative funding & other ventures like co-funding are being explored by the department and its public entities for continued delivery of services Establishment and occupancy costs are being tightly monitored for their high cost nature, or exponential increase above MTEF and inflation. Timing of infrastructure and capital projects are annually monitored for inflations increases Non-priority programmes have been removed from the MTEF Strict budget and expenditure monitoring is being maintained for clean audits. 15

Process for MTEF linkage to Strategic Plan, Deliverables and Performance Strategic plan Medium term budget Individual performance plans Monthly/ quarterly reports 3 years Updated annually Includes budget information Year 1 Detailed focus on first year of strategic plans Includes output and service delivery information Expenditure trends 3 Year forward estimetes Strategic direction explained Previous year's outcome incorporated when deciding resource allocation Staff have performance agreements and individual development plans Linked to departmental key objectives and outputs Indicate individual contribution towards achieving departmental objectives Progress against budget and implementing strategic plans Highlights departmental performance ( financial and non-financial) against targets Environmental changes Expenditure outcomes and new budget allocations Strategic direction changes Annual review Annual reports Audit Performance against budget and strategic plan Meeting reporting requirements - Treasury and Public Service Regulations

Thank You 17