PRESENTATION TO THE PORTFOLIO COMMITTEE ON DEFENCE AND MILITARY VETERANS 13 October 2009

2 Overview Introduction Expenditure analysis Programme performance Report of the Auditor-General on the financial statements of 2008/09 Issue of concern Discussion

3 Expenditure Analysis Expenditure trend: 2006/07 till 2012/13

4 Expenditure Analysis Expenditure per programme for 2008/09

5 Expenditure Analysis Expenditure per economic classification for 2008/09

6 Performance Information Progress with APEX Priority 24: Military Skills Development System: By the end of the financial year, there were MSDS members in the system of which were recruited during the period under review.

7 Performance Information Intakes since January 2003 MSDS performance as at 01 Sept 2009

8 Performance Information Most of the department’s actual achievements were in line with the projected targets as was planned for 2008/09. There were only 36 Defence diplomatic missions against the target of 37. The opening of offices in Canada has been postponed indefinitely. The average number of personnel deployed daily in external operations was 2 931, which is mainly due to termination of operations, scaling down of activities and reduction of forces by the UN. The average number of personnel deployed daily in internal operations was also less than the projected target mainly due to the SANDF Exit/SAPS entry strategy - gradual withdrawal from borderline control. Five additional new operations were executed in support of other government departments on demand.

9 Performance Information (Cont) The number of flying hours in support of operations was exceeded due to additional requirements for Force Employment. The number of sea hours spent on patrol in Republic of South Africa maritime zone was less than the projected target, this was due to the fact that requirements were largely demand driven.

10 Performance Information (Cont) More active recruitment of members led to the increase more Reserves than projected. Students qualified exceeded the projected target. 6 Student at the SANDF War College did not complete the course and 2 students at the Warrant Officers’ Academy failed the course.

11 Report of the Auditor-General on the financial statements for 2008/09 The DoD received a qualified audit opinion in 2008/09 due to the following: Tangible and intangible assets Lease commitments Irregular expenditure Goods and services: Consultant expenditure Departmental revenue Accruals * Will elaborate more when discussing recurrence of audit findings

12 Report of the Auditor-General on the financial statements for 2008/09 (Continue) Emphasis of matter due the following: Irregular, fruitless and wasteful expenditure as procurement processes were not followed Other matters Lack of effective, efficient and transparent systems and internal controls regarding performance management * Will elaborate more when discussing recurrence of audit findings

13 Assessment of the recurrence of Audit Findings from 2006/07 to 2008/09.

14 Assessment of the recurrence of Audit Findings from 2006/07 to 2008/09.

15 Assessment of the recurrence of Audit Findings from 2006/07 to 2008/09.

16 Assessment of the recurrence of Audit Findings from 2006/07 to 2008/09.

17 Assessment of the recurrence of Audit Findings from 2006/07 to 2008/09.

18 Assessment of the recurrence of Audit Findings from 2006/07 to 2008/09.

19 Assessment of the recurrence of Audit Findings from 2006/07 to 2008/09.

20 Issue of concern Media reports on tender fraud Asset Management – Qualified audit opinion for the past three years. Internal Controls – Internal Audit Committee must be more vigorous in analysing financial management and systems in the department. The IAC must submit a report to the Portfolio Committee in this regard Performance information not reliable.

21 Discussion