1. Financial Quarter ending 31 December 2017 2017/2018 Financial Year
Financial Management Report to Portfolio Committee for Women in the Presidency 13 March 2018
Financial Quarter ending 31 December 2017
2017/2018 Financial Year

2. Financial Performance and Budget Management Financial Position
Table of contents
Financial Performance and Budget Management
Financial Position
Supply Chain management & Corporate Services
Risk Management
Budget Recommendation and Review Report
Miscellaneous issues and PFMA related matters

3. Financial Performance YTD
Savings generated from Commissioner programme – mainly salaries arising from vacancies – R1,7mYTD.
R60 m (+/-77% of the annual budget), including cross-subsidisation by donor funds (R3,7m from SABC)
This surplus is ear-marked to finance the balance sheet recapitalisation which could originally not be covered by baseline . Adding back non-cash (depreciation) outflows; R4,2 m is available from 9 months operating activities
These funding needs were acknowledged by at the point of planning/budgeting at the beginning of the year.
Other notably high spending activities projected for the remainder of the year are : The printing of Research reports (R1,2 m), Training (R600,000), SCW (R1,2 million)

4. Itemised spending cumulative to 31 December 2017
Material aggregate cost savings on Computer serv., Report writing, Travel due to cost containment measures undertaken and time lags linked to APP performance
Although on aggregate COE matches annual budget – There savings experienced by individual cost centres (e.g. IT, Commissioners, Research) but set off by provisions made for perf. Bonus which was not budgeted. ₳
₳ - the over-expenditure covered by donations of R3,7 m

5. Actual/Budget Comparatives by economic classification and programme
Spending trends tracks the budget positively in the overall/programme
Service delivery consumes a “lion’s share” at 60% of total.
COE saturated on programmes directly linked to legal mandate – Commissioners & Line functions (up to 80 of 100 personnel in the establishment.

6. Recapitalisation schedule – CAPEX needs
Motor Vehicles – Replacement of 5 Vehicles : KZN, LMP and NW (VW Polo’s) + 2 old VW Jetta at Head Office at a cost of R1,3 million (estimate). The purchase will be done via the NT approved Transversal contract.
Automation of Management systems – Internal audit Software and “Caseware” for the production of AFS; estimated to R600,000 – To be procured competitively via internal SCM. These systems are off the shelve and only requires customisation at minimal cost and effort.
Automation of Business systems – Complaints/case management system – By RFQ at an estimate of R500,000 from the market scan conducted.
Furniture & Office content – Mainly for provinces; R300, 000 is set aside.
Total of R2,7 million budget set aside. where proceeds of R300, 000 from reselling of old vehicles is foreseen.
These items of expenditure were identified at the time of planning at the beginning of the current cycle but for confined scope to accommodate in the budget for 2017/ Reference to be made from the CAPEX listing tabled at the time of budget/APP approval.
IA software was identified as critical by the external reviewers (QAR) done by National Treasury against IAS and endorsed by the Audit Committee. Management agree and have identified efficiency gains over and above compliance with IAS provisions
There are sufficient cash resources to cover this outlay.

7. Financial Position
From favourable financial performance so far into the financial year, the financial position as at 31 December 2017 meets the solvency and liquidity test as shown from the selected measurement ratios
From this financial status, the CGE is able to recapitalize its balance sheet during the current financial period to the tune of R2,7m in CY.

9. Other Matters Cost Containment Accommodation (Work in Progress)
Transversal contracts (RT15) – Following the transversal scheme arranged by NT, there is a new policy framework which bears implications to the CGE policies and practices. A Cost/Benefit analysis was conducted by Management and positively proves the value proposition implicit in the Transversal contract as advanced by NT.
Accommodation (Work in Progress)
Still in the pipeline for procurement by Department of Public Works
Braamfontein – Challenges by NDPW – No budget confirmed from the holder, following the Devolution Framework. CGE still engaging.
Cape Town – in progress of procurement – RBAC sitting consider the transaction on 13 February2017.
Fleet Management
Satisfactorily without any material deviation from consumption use and consumption norms.
Fleet of smaller vehicles aged and is costly to maintain as a result.
Disposal of assets – On course through the Disposal Committee. Project to be finalised by the end of the financial year. These includes old IT infrastructure, excess/unused Furniture in Mpumalanga office & old vehicle fleet (5 vehicles).

11. BRR – Responses to Committee recommendations..1
Action Plans to address audit issues
Issues identified by the external auditors (AGSA) from the previous financial year are been adequately addressed by management (bar 2 & 6 from 21 which are respectively incomplete & in progress).
Specific Plans of Actions were compiled with due dates for implementation.
Implementation is tracked at regular intervals and assurance provided by internal audit.
Furthermore, during Q3, the AGSA conducted interim audit work as well as planning for the 2017/2018 regularity audit project – An Audit strategy was compiled, tabled and approved by the Audit Committee.

12. BRR – Responses to Committee recommendations..2

13. BRRR - Personnel vacancies
Mitigation steps undertook to ensure effective Service delivery, in spite of the moratorium
4 positions put on moratorium due to lack of funding were -
COO
HR Director
Manager in the Office of the Chair
Legal researcher
Active vacancies from funded positions were -
2 Researchers, PA- Deputy Chair, Finance Manager, Legal officer, IT Specialist.
Recruitment processes commenced with to fill the latter 3 positions

14. BRR – noted Challenges & Opportunities
Regularisation of previous expenditure by National Treasury – Pending but further efforts involving the Account-General Office and the CGE Audit Committee are being undertaken.
2. Funding – Amid funding inadequacies, budgets reductions were proclaimed by NT on the 2018/2019 allocations – Final ENE session of December 2017.
3. Case Management system – Funds secured from savings generated during the current period. Procurement to be finalised during Q4/2018 with anticipation to go live from the beginning of the new financial year.

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16. Annexures Annual budget for 2017/2018 for reference
Capital Expenditure Budget – reference to items which were identified but could not be covered by the available allocation from National Treasury at the time of APP costing & approval – Now to be funded from surpluses generated during the current period – Refer to the statement of financial performance in the main slides.

17. Total allocation granted by NT for the year under plan is R78, 3 million from a baseline of R69,9 million in the previous FY.
The budget is a product of prioritisations against a constrained funding position.
The increase of allocation by R8, 2 million is against a depressed baseline previously subjected to budgetary cuts. The increase/injection will therefore be absorbed by price inflation on G&S expenditure and anticipated cost of living adjustment for COE.
Efficiency gains and cost savings are factored into the budget to ensure effective realisation of service delivery.

18. Funding constraints remains – refer to CAPEX requirements

19. Capital expenditure needs – 2017/2018 period
R3 million of CAPITAL EXPENDITURE requirements not fully funded from the baseline allocation
The items are critical for maintenance and continuous improvement goals aspired for in the medium term plans