VOTE 30: ENVIRONMENTAL AFFAIRS Portfolio Committee Briefing Annual Financial Statement for 2011/12 16 – 17 October

Presentation Outline -Auditor- General report on the Financial Statements (Annexure A) -Irregular expenditure -Expenditure for 2011/12 -Detail on current expenditure -Detail other operating expenditure -Transfers on EPWP -Transfers to Public Entities -Transfers to non-profit and other institutions -Capital Expenditure -Departmental expenditure trend 2

Continued Presentation Outline -Auditor-General’s opinion on Public Entities -Public Entities source of revenue -Internal versus external revenue -Public Entities expenditure -Total revenue versus total expenditure -Surplus -Challenges experienced for period under review 3

Auditor-General Report on the Financial Statements (Refer Annexure A) Unqualified Audit Donor funding audit for 2011/12 in progress to be finalized by end of October 2012 Unauthorized and irregular expenditure: Irregular expenditure was incurred in the current year and condoned by National Treasury during the 2012/13 financial year. Disclosure items in the financial statements The department complied with all disclosure requirements, classifications and policy frameworks as prescribed by Treasury. Transfers to agencies and other organizations All transfers made are per prior management and Treasury approval as well as within disclosure requirements. 4

Irregular expenditure condoned by National Treasury Bid Number Amount Rand ReasonActions E No tax clearance certificates for sub- contractor  Terms of reference updated  Controls reviewed  Training to Bid committee members  Condoned by National Treasury E Irregular expenditure identified during the audit All bids for the financial year were audited

Expenditure for the 2011/12 Financial Year per Programme ProgrammeFinal appropriation R’000 Expendi- ture R’000 Expenditure as % of final appropriation R’000 Variance R’ Administration %- 2. Environmental quality and protection % Oceans and coasts %- 4. Climate change %- 5. Biodiversity and conservation %- 6. Sector services, coordination and information management and internal relations % Total %

Expenditure per Economical Classification Economical classificationFinal appropriation R’000 Expenditure R’000 Variance R’000 Current Payments Compensation of employees (Variance due to time lag in process of filling posts) - Goods and services (Variance mainly due to accruals)* - Interest Transfers and Subsidies Households: Expanded Public Works Programme (Variance – incentive funds surrendered)* - Departmental entities* - Non-profit institutions* -Other transfers:* Global Environmental Fund Households: Social benefits (leave gratification) North West University Vehicle licenses Sub total

Continued Expenditure per Economical Classification Economical classificationFinal appropriation R’000 Expenditure R’000 Variance R’000 Payment for capital assets* Machinery and equipment (New polar vessel R ) -Software Payments for financial assets111 - Sub total TOTAL

Detail Current Expenditure * NotesExpenditure Goods and services2011/12 R’ /11 R’000 Consultants, contractors and agency/ outsourced services (Annexure B) Travel and subsistence (Annexure C) Other operating expenditure (refer to next slide) * Operating leases (include accommodation, car rentals and Nestle machines rentals; transfer to DAFF) Inventory (Including stores for Antarctica) – Herbicides purchased for eradication of alien invasion species: NRM, computer consumables for tracking oceanographic research items. Computer services (Increase in computer service, Microsoft Enterprise upgrade and licensing) Advertising (increase in marketing: COP 17, promotional items and recruitments costs) Venues and facilities (Cop 17 events, communication projects and meeting to facilitate the transfer of NRM) Owned and leasehold property expenditure (Include building maintenance and repairs) Training and staff development (NRM Implementing Agencies & pilot youth programmes — R10,1 million; Training to employees — R5,9 million) Communication (Installation of data lines, telephone & conference facilities in regions/Cape Town) Audit cost - external Assets less than R5 000 Catering Rental and hiring (Hire and service for hosting of 4th Transition Committee meeting, World Environmental day, launch of hotel at SANParks) Bursaries employees Administrative fees (increase in personnel agency and travel agency fees) Entertainment Transport provided as part of the departmental activities Fleet services TOTAL

Detail Current Other Operating Expenditure * NotesExpenditure Other Operating Expenditure * 2011/12 R’ /11 R’000 Air charter services & landing rights (services related to the voyages to Islands; extra voyage to Marion Island for the opening of the new base as well as oil spill control on the coasts) Harbour, dock fees (Buoy, ocean surveyor & systems) Professional bodies, membership and subscription fees (annual membership contributions) Printing & publications services Resettlement costs Courier & Delivery services Freight services transport goods Other: Car valet & wash services/Laundry services/Gifts/Nonlife insurance/Drivers licenses & permits/Achievements and awards/Storage of assets & goods TOTAL

Transfer on Expanded Public Works Projects 2011/12 * InstitutionsExpenditure R’ /12 Sustainable land base livelihoods Working for waste People and parks Working for the coast Beneficiary training Working for Fire Working for Water Total

Transfer to Public Entities * InstitutionsExpenditure R’ /12 South African National Parks South African Biodiversity Institute South African Weather Services iSimangaliso Wetland Park of Authority Total

Transfer to Non-Profit Institutions * Public Entity/InstitutionExpenditure R’000 Buyisa-e-Bag Wildlife and Environmental Society of South Africa4 000 African World Heritage Fund3 000 National Association for Clean Air1 400 Maloti Drakensberg1 203 Total

14 InstitutionExpenditure R’000 Global Environmental Fund Social Benefit2 838 North West University967 Municipalities (various)5 Total Other Transfers *

Payment for Capital Assets * NotesExpenditure Machinery and equipmentR’000 Ship & marine equipment (Final payment SA Agulhas II) Computer hardware & systems Expenditure for capital assets; Good and services Audio visual equipment Office furniture Finance fee lease Office equipment Photographic equipment Motor vehicle Software and other intangible assets Medical and allied equipment Lifting & handling equipment Transport accessories & trailers Radio equipment Security equipment, systems, material: movable Workshop equipment Gardening equipment Kitchen appliances Telecommunication equipment Bags Survey equipment Domestic equipment Total

Departmental Expenditure Trend YearBudget R’000 Actual R’000 % Expenditure 2004/ % 2005/ % 2006/ % 2007/ % 2008/ % 2009/ % 2010/ % 2011/ % 16

Auditor-General’s Opinion on Public Entities Audit Opinion EntityUnqualifiedEmphasis of matter ReasonAction SANParksYesNone-- SANBIYes Under spending Grant received on shortfall Projects initially postponed as part of saving measures Surplus will be applied to continue projects in 2012/13 SAWSYesNone-- iSimangalisoYesNone-- 17

18 RevenueSANParks R’000 SANBI R’000 SAWS R’000 iSiman- galiso R’000 Government Grant Transfer: Environmental Affairs Other transfers from departments Own 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 Total Public Entities source of revenue

Internal versus external revenue The relationship between the revenue generated from external sources (i.e. grants) and internal sources (i.e. fees, donations, interest, etc.) as a percentage of total revenue as demonstrated above. 19

20 ExpenditureSANParks R’000 SANBI R’000 SAWS R’000 iSimangaliso R’000 Compensation of employees Operating expenses Administration expenditure Projects Total Public Entities expenditure

Total revenue versus total expenditure This chart demonstrates the relationship between the total revenue and expenditure, therefore the net surplus position of the entities for the year ended 31 March

22 SANParks R’000 SANBI R’000 SAWS R’000 iSimangaliso R’000 Surplus Reason Improved revenue collection. Better cost management. Park develop- ment fund. Sales of fauna and flora. Land acqui- sition grant. Allocation of additional funds for commitments to projects. Decrease in the liability for post retirement medical benefits. Increase aviation tariff charges, web sales. Rental of equipment lease of aircraft in India. Sales from portal subscription and mobile sales. Increase of grants. Levying of penalties against contractors failure to meet their contractual undertakings. Growth in gate revenue. Public Entities expenditure

Challenges experienced by the department during 2011/2012 -Timely updating of asset movements in asset register -Compliance in tender verification requirements -Consultation of policies via the departmental bargaining council -Reliance and clear reporting on performance information and availability of supporting documents -Disclosure note verification 23