1. Presentation to Portfolio Committee on Economic Development QUARTER /15 FINANCIAL REPORT 2 September 2014
2018/05/15

2. Introduction
The Department spent R including transfers - That is 91% of its quarterly budget allocation of R
The Department has four budget programmes:
Administration
Economic Policy Development
Economic Planning and Coordination
Socio Economic Development and Social Dialogue
Each Budget Programme is broken down into economic classification.

3. Expenditure review
The Department spent R including transfers - That is 91% of its quarterly budget allocation of R
Additional information will be provided on expenditure in accordance with the requirements of the PC
Variance was mostly due to:
Decision not to fill high-level posts while initiating restructuring of the EDD
The use of personnel drawn from public entities for the PICC, paid for by state entities
Funding obtained from the EU for EDD Conference on manufacturing, equality and growth, which represented a saving of R1,5 million on the budget
The need to resolve contingent liability provisions for some expenditure (communications)
Procurement delays around office space invoices and software for data analysis and modelling
The Minister requested that EDD effect savings in order to increase support for key projects for small business

4. Q1 Financial Performance Total per Programme
Programmes
Q1 Projected Budget
Actual Expenditure
Variance
% Spent
R’000 %
Administration
21 514
15 788
5 726
73%
Economic Policy Development
5 461
3 088
2 373
57%
Economic Planning and Coordination
6 666
95%
Socio Economic Development and Social Dialogue
3 832
2 425
1 407
63%
Total including Transfers
16 172
91%
Total excluding Transfers
42 363
26 191
62%

5. Expenditure per Classification
Q1 Financial Performance Total per Econ Classification
Expenditure per Classification
Q1 Projected Budget
Actual Expenditure
Variance
% Spent
R’000 %
Compensation of Employees
26 968
17 937
9 031
67%
Goods and Services
14 693
7 721
6 972
53%
Transfers and Subsidies -
100%
Non Profit Institutions 60
Households 13
Payment of Capital Goods
629
460
169
73%
Total including Transfers
16 172
91%
Total excluding Transfers
42 363
26 191
62%

6. Q1 Financial Performance: GFS Variance
Compensation of employees: EDD staffing model of permanent employment, secondments, utilisation of staff in other departments and entities, contract employment for projects, will continue. In addition, review of the structure of the department and staff re-alignment to meet the needs and demands that arise out of the new priorities of MTSF has resulted in caution in filling core high level vacant posts - they will be filled in line with the re-aligned Strategic Objectives and APP.
Goods and services: Accruals (services rendered but not yet invoiced as at 30 June 2014), office accommodation; legal services; pre-payments made in line with the MoU to be accounted for in the second quarter.
Capital: Finance leases (photocopiers (centralised under Administration) & cell phone contracts) planned for under goods and services – funds to be shifted

7. Programme expenditure Expenditure per Classification
Administration – Q1 Financial Performance per Prog & Econ Classification
Programme expenditure
Q1 Projected Budget
Actual Expenditure
Variance
% Spent
R’000 %
Administration
21 514
15 788
5 726
73%
Expenditure per Classification
Compensation of Employees
10 693
9 369
1 324
88%
Goods and Services
10 298
6 067
4 231
59%
Households 4
100%
Payment of Capital Goods
519
348
171
67%
Total

8. Q1 Financial Performance: Variance Administration
Compensation of employees: As indicated, review of the structure of the department and staff re-alignment to meet the needs and demands that arise out of the new priorities of MTSF has resulted in caution in filling vacant high-level posts while process is being completed.
Goods and services: Office accommodation costs for May & June still to be invoiced as at 30 June 2014; co-sourced internal audit services not yet invoiced; advance to be cleared once invoices are received.
Capital: Finance lease costs that were planned for in goods and services but charged to capital in line with the Modified Cash Standard issued by OAG – Funds will be shifted during the AENE to augment the overspending

9. Programme expenditure Expenditure per Classification
Economic Policy – Q1 Financial Performance per Prog & Econ Classification
Programme expenditure
Q1 Projected Budget
Actual Expenditure
Variance
% Spent
R’000 %
Economic Policy Development
5 461
3 088
2 373
57%
Expenditure per Classification
Compensation of Employees
4 235
2 549
1 686
60%
Goods and Services
1 189
502
687
42%
Payment of Capital Goods 37
100%
Total

10. Q1 Financial Performance: Variance Economic Policy Development
Compensation of employees: As indicated, review of the structure of the department and staff re-alignment to meet the needs and demands that arise out of the new priorities of MTSF has resulted in caution in filling high-level vacant posts while process is being completed. Core posts will be filled in line with identified critical skills that will enable the attainment of the revised strategic objectives and related implementation plans (APPs).
Goods and services: spending slow and is expected to improve in line with the revised APP that was approved in June 2014 that would enable the implementation of the MTSF and the re-aligned strategic objectives.

11. Programme expenditure Expenditure per Classification
Econ Planning – Q1 Financial Performance per Prog & Econ Classification
Programme expenditure
Q1 Projected Budget
Actual Expenditure
Variance
% Spent
R’000 %
Economic Planning & Coordination
6 666
95%
Expenditure per Classification
Compensation of Employees
9 343
4 005
5 338
43%
Goods and Services
2 092
764
1 328
36%
Transfers and Subsidies
100%
Households 9
Non Profit Institutions 60
Payment of Capital Goods 52
Total

12. Q1 Financial Performance: Variance Economic Planning and Coordination
Compensation of employees: As indicated, review of the structure of the department and staff re-alignment to meet the needs and demands that arise out of the new priorities of MTSF has resulted in caution in filling vacant posts while process is being completed. Core posts will be filled in line with identified critical skills that will enable the attainment of the revised strategic objectives and related implementation plans (APPs). The arrangement with public entities to retain PICC coordination personnel on their books, whilst benefitting EDD through savings in all three core programmes, has specifically helped effect savings in this programme. This facility is currently under review and it is likely that EDD will have to carry some additional staffing and other costs during this financial year
Goods and services: spending slow and is expected to improve in line with the revised APP that was approved in June 2014 that would enable the implementation of the MTSF and the re-aligned strategic objectives.

13. Programme expenditure Expenditure per Classification
Econo Dev & Dialogue – Q1 Fin Performance per Prog & Econ Classification
Programme expenditure
Q1 Projected Budget
Actual Expenditure
Variance
% Spent
R’000 %
Economic Development & Social Dialogue
3 832
2 425
1 407
63%
Expenditure per Classification
Compensation of Employees
2 697
2 014
683
75%
Goods and Services
1 114
390
724
35%
Payment of Capital Goods 21
100%
Total

14. Q1 Financial Performance: Variance Economic Development & Dialog
Compensation of employees: As indicated, review of the structure of the department and staff re-alignment to meet the needs and demands that arise out of the new priorities of MTSF has resulted in caution in filling high-level vacant posts while process is being completed. Core posts will be filled in line with identified critical skills that will enable the attainment of the revised strategic objectives and related implementation plans (APPs).
Goods and services: spending slow and is expected to improve in line with the revised APP that was approved in June 2014 that would enable the implementation of the MTSF and the re-aligned strategic objectives.

15. Overall remedies to improve spending
Compensation of employees: Finalisation of restructuring of department will enable Core posts will be filled in line with identified critical skills that will enable the attainment of the revised strategic objectives and related implementation plans (APPs). However staffing model of permanent employment, secondments, utilisation of staff in other departments and entities, contract employment for projects, will continue
Goods and services: Improved demand plans will be compiled in line with the recently developed project plans in order to improve spending in goods and services – this will not be an overnight achievement and progress should be seen over the rest of this financial year.
Capital: Funds will be shifted from Goods and services in line with the Modified Cash Standard to ease the overspending in capital in order to accommodate the finance lease costs that are currently budgeted for in Goods and Services.

16. SIYABONGA!