VOTE 30: ENVIRONMENTAL AFFAIRS Portfolio Committee Briefing Annual Financial Statements for the year ended 31 March Ms Nosipho Ngcaba Director General Department of Environmental Affairs October tbc

Presentation Outline -Expenditure per programme -Expenditure per economical classification -Transfers to Public Entities and other Agencies -Expanded Public Works Programmes & Projects -Donor Funding -30 Days Payment Report -Auditor- General report 2

Expenditure for the 2013/14 Financial Year per Programme ProgrammeFinal appropriation R’000 Actual Expenditure R’000 Expenditure as % of final appropriation Variance R’ Administration % Legal, Authorisations and Compliance % Oceans and Coasts % Climate Change and Air Quality %- 5. Biodiversity and Conservation %- 6. Environmental Programmes %- 7. Chemicals and Waste Management %1 332 Total %

Expenditure per Economical Classification Economical classificationFinal appropriation R’000 Actual Expenditure R’000 Balance Surrendered R’000 Note Current Payments Compensation of employees - Goods and services Transfers and Subsidies Provinces and Municipalities Departmental agencies and accounts Foreign Governments Non-Profit Organisations Public Corporations: DBSA: Green Fund Expanded Public Works Projects Other transfers Payment for capital assets* PPP payment for the new building PPP IT infrastructure new building Machinery, computers, office, laboratories equipment,& financial assets o/w payments for financial assets156 - Total Funds surrendered to National Treasury -Note 1: vacant posts not filled during the review of the establishment -Note 3: Saving on National Regulator for -Note 2: Savings from goods & services Compulsory Standards transfer -Note4: Saving on Expanded Public Works Projects

Detail Current Expenditure * Goods and services2013/14 R’ /13 R’000 Consultants, contractors and agency/ outsourced services - Project Management cost, Smit Amandla operating and maintenance cost and professional fees. (Annexure A) Travel and subsistence. (Annexure B) Venues and facilities Other operating expenditure (refer to next slide)* Operating leases – Accommodation charges and operating lease payments. Inventory – herbicides, research supplies, oil & gas, food supplies Computer services - External computer services, software license and operational systems. Advertising – Media coverage services, recruitment, tenders Owned and leasehold property - Renovations for the previous financial year (Fedsure forum- Pretoria and Waterfront building) Communications – (Radio, TV transmission, National People's and Parks conference) Training and staff development (courses & workshops) Audit cost – External and Forensic investigations Catering Assets less than R5 000 Bursaries employees Rental and hiring Administrative fees (Registration, bank charges, management and handling fees) Entertainment - Meetings with external and internal stakeholders. Transport provided as part of the departmental activities. Fleet services Total

Notes on goods & services ItemDescriptionVariance R’000 Consultants, contractors and agency/ outsourced services Increase Increased operation and manning cost for the SA Agulhas and Algoa Vessels Operating leasesDecrease Additional rental/ accommodation charges in respect of the NRM regional offices and operating lease payments Computer services -Increase The support and maintenance for Working for Water and Fire Information Management System, Premium support and 2nd year Enterprise Agreement with Microsoft via SITA New departmental building expenditure

Detail Other Operating Expenditure * NotesExpenditure Other operating expenditure * 2013/14 R’ /13 R’000 Air charter services & landing rights Professional bodies, membership and subscription fees* Printing & publications services Resettlement costs Harbour, dock fees Courier & Delivery services Other operating expenditure Freight services transport goods Total * Refer following slides

Payment for Professional bodies, membership and subscription fees* (R18 448) Benguela Current Commission (BCC) Intergovernmental Science –Policy Platform on Biodiversity & Ecosystem Services (IPBES) Commission for the Conservation of Antarctic Marine Living Resources(CCAMLR) African Institute for Environmentally Sound Management of Hazardous & other waste (AIESMH &W) United Nations Environment Programme (UNEP) Environmental Assessment Practitioners (EAP’s) Interim Certification Board (ICB) Environmental Systems Research Institute South Africa (ESRI) Enterprise Licence Agreement 8

Allocation to Public Entities and Own Revenue for the year ended 31 st March 2014 RevenueSANParks R’000 SANBI R’000 SAWS R’000 ISWP R’000 TOTAL Total Allocation DEA Operational Infrastructure Grant Transfers from other departments/institutions, EPWP) Total Transferred Revenue Revenue from operating activities/Admission fees/Aviation income/Park revenue Other income Sales Investment income Donations Fair value gain Non-regulated commercial income Penalties Sub-total Deferred grant /transfers-(45 454)38 654(64 229)(71 028) Total revenue

Public Entities Revenue and Expenditure for the year ended 31 st March 2014 ExpenditureSANParks R’000 SANBI R’000 SAWS R’000 iSimangaliso R’000 Total revenue per annual financial statements ( )( )( )(86 202) Total expenditure per annual financial statements Surplus/(Deficit) per annual financial statements (20 813) NB: SANParks has recorded a surplus of R40,7 million as opposed to a deficit of R million due to the application of GRAP 23 whereby all revenue received for infrastructure projects were recognised for the year under review.

Public Entities Revenue and Expenditure for the year ended 31 st March 2014

SANParks R’000 SANBI R’000 SAWS R’000 iSimangaliso R’000 Surplus/(Deficit) (20 813)* Reason R million infrastructure grant revenue recognised as satisfied obligations during the year under review as well as the security services. The subsidising of employees' post- retirement health care benefit resulted in an actuarial loss of R million. Outstanding forestry grant claim from DAFF (R19,4m) A decrease in the Defined benefit liability (R22,6m) Capitalisation of Non- current assets (R24,2m) Gains from fair value adjustment- investment property (R38,7) This property relates to the portion of the Waterkloof land earmarked for sub- leasing. The value of the land has increased from R44,5m to R83,2m. This is a non-cash loss and is largely a function of reduced recoveries from projects and an increase in operating costs such as security related to boundary integrity (R21,3m) Write-off balance of the amount due to the entity by Sanyati (R6,1m) Public Entities Surplus/ (Deficit) for the year ended 31 st March 2014

EntityUnqualifiedEmphasis of matter Reason/CommentsAction SANParksUnqualified None SANBIUnqualified Material under spending of the budget Material underspent on capital expenditure by R15,400 million The variance resulted from the timing differences between the transfer of funds from National Treasury and the actual spending. The Capital expenditure project are closely monitored to ensure that they are concluded on time. SAWSUnqualifiedNone iSimangalisoUnqualifiedNone Auditor-General’s Opinion on Public Entities

14 Allocations & Transfers to Other Agencies DBSA Green Fund R’000 Nat. Assoc. for Clean Air (NACA) R’000 National Regulator of Compulsor y Specificati ons. R’000 Global Environm ental Fund (GEF) R’000 Buyisa- e- Bag R’000 Compen- sation Fund R’000 Donatio ns and Liences R’000 Social Benefits/ Leave gratitude R’000 TOTAL R’000 Allocated Budget Transferred( )(1 400)(10 220)(12 890)(117)(6 169)(71)(2 994)( ) Balance

15 Allocations & Transfers Expanded Public Works Projects Working for Water R’000 Working for Fire R’000 Environmental Projects R’000 TOTAL R’000 Allocated Budget Projects Incentives Transferred( )( )( )( ) Projects Incentives ( ) ( ) ( ) (52 843) ( ) ( ) ( ) ( ) Balance1 454(279)(14)1 161* *Unearned Incentives to paid back to National Treasury

Expanded Public Works per Projects* Expenditure 2013/14 R’ /13 R’000 Working for water Sustainable land base livelihoods Working for Fire People and parks Working for waste Working for coast Working for forest operations Working for land operations Beneficiary training Greening & open space management Wildlife economy Youth environmental service Total *

Foreign Aid Assistance Donor CountryPurposeBudget Allocated R’000 Expenditure R’000 Balance R’000 United Nations on Environmental Programmes (UNEP) Convention on Climate Change & Reducing Mercury emission (705) United States Agency for International Development (USAID) Compilation of ARID Transfrontier Projects DenmarkWaste Management Strategy01 000(1 000) GermanyClimate Change Programme & Supporting the development and implementation of access and benefit sharing policies in Africa – South Africa AustraliaFunding agreement in relation to South Africa land sector measurement (766) TOTAL (2 196) 17

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Departmental Expenditure Trend YearBudget R’000 Actual R’000 % Expenditure 2004/ % 2005/ % 2006/ % 2007/ % 2008/ % 2009/ % 2010/ % 2011/ % 2012/ % 2013/ % 19

Auditor-General Report on the Financial Statements Unqualified Audit (Clean audit) Unauthorized and irregular expenditure: – No irregular expenditure occurred or brought forward to the reporting year. Fruitless and wasteful expenditure – Possible fruitless expenditure from previous years project spending to the amount of R25,865 million has been disclosed. Disclosure items in the financial statements The department complied with all disclosure requirements, classifications and policy frameworks as prescribed by Treasury. However, National Treasury has exempted the department from applying Modified Cash Standards in respect of Infrastructure development projects. Transfers to agencies and other organisations All transfers made are per prior management and Treasury approval as well as within disclosure requirements. 20

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