1. Presentation to Portfolio Committee: Annual Report 2016/17

2. Key Events that influenced Annual Report
Apologies
Board Chairman
Delegation
CFO
Audit and Risk Committee Chair
Oversees audit by Auditor General
Key Events that influenced Annual Report
2016 Rio Olympics
Largest Olympic team that represented SA
Suspension of Bloemfontein laboratory’s accreditation
Suspension of “back up” Doha Laboratory’s accreditation

3. Annual Report 2017: Performance
Number of tests conducted, inclusive of urine and bloods, reduced from target of 3650 tests to 2343 tests
Increase costs after Bloemfontein and Doha laboratories were suspended
Volatility of ZAR against foreign currencies
Managed deficit
High return of positive dope tests
38 cases opened
Anti-Doping Education
Overwhelmingly funded by Lottery grants
Internationally Quality Certified:
ISO 9001

4. Audit Opinion Financial Statements
- Unqualified audit opinion with findings on Compliance and Supply Chain Management (SCM)
- Findings related to the following aspects:
Revenue management (outstanding debtors e.g. Kenya ( R 138 K: > 120 days, provision raised)
Material uncertainty relating to going concern (Net deficit = R and TL > TA by 5 million)
Budget overspend (due to pressures experienced in doping control in the lead up to the 2016 Rio Olympics. The largest Team SA team to participate in Olympic Games.
SCM – deviation (x1) not deemed valid and no declaration of interest received (x2) 4

5. Performance information
Audit Opinion
Irregular expenditure
Resulting from budget overspend: R 1,046 m (2016: R 4,651 m)
Procurement processed not followed accordingly: R 181 K (2016: R 2m)
IT services (deviation not seen as valid): R 155 K
No declaration of Interest (iStore and Sage Pastel): R 23 K
Lowest price not selected: R 4 K
Performance information
- Unqualified with adjustments but NO material findings
- Targets
Doping control
Test numbers reduced due financial challenges experienced
Targets were exceeded in the first quarter due to 2016 Rio Olympics

6. Audit Opinion Education Finance
Targets exceeded as a result of increased networking and outreach efforts by the Education unit and increased demand by national sports federations
Education is largely funded by the Lottery grants
Finance
Targets achieved, ENE process completed and database submitted within deadlines
Quarterly reports submitted to Lottery, SRSA and National treasury within the prescribed deadlines

7. Current Status: 2017 Treasury/SRSA grant Lottery funding
Budget allocation of R m
Amount received to date: R m (50%)
Two tranche payments continue to be a challenge because doping control equipment is purchased is purchase beginning of year.
Overseas laboratory costs are paid quarterly
Actual expenditure incurred to date: R 9.794m (43%)
Manage cash-flow, tranche payments are often not on time
Lottery funding
Budgeted spending for the year: R m
Amount above includes new funding of R 5 m (R 4m: Education, R 1m: Doping Control)
Actual spending to date : R million
“Old” Lottery grant: R 1.2 million
New Lottery grant: R 643 K

8. Current Status Audit Action Plan
Austerity measures and budgetary controls in place to prevent deficit
Irregular expenditure presented to board for condonation and board resolved to condone irregular expenditure
Provision raised for long outstanding debtors (especially those considered doubtful). Monthly statements issued and followed up via and telephonically.
Procurement practices have been improved with stricter compliance i.e. tax clearance certificates, declaration of interest have been made mandatory regardless of value of transactions and all quotations are written (no verbal quotes) 8

9. Budget and Sustainability
Analysis of Sustainability
To comply with World Anti-Doping Code and the testing targets for priority sports codes
International and national compliance
Actively follow up and prosecute on steroid manufacturing and trafficking
Implement comprehensive schools testing program
Implement comprehensive anti-doping curriculum (life orientation) in high schools
Funding
SAIDS underfunded by 25%, year on year over the medium term
R5,7 million per year

10. Input from Audit and Risk Committee
Adv. Dave Mitchell (CA)

11. THANK YOU FOR YOUR INTEREST AND OVERSIGHT