1. ANALYSIS OF THE DEPARTMENT OF DEFENCE ANNUAL REPORT FOR 2013/14
15 October 2014
Wilhelm Janse van Rensburg
Researcher: JSC on Defence 1

2. Strategic Outcomes and Outputs
DOD 2013/14 Annual Report
Strategic Outcomes and Outputs 2

3. Strategic Outcomes and Outputs
DOD 2013/14 Annual Report
p.2
The DODMV’s strategic outputs is aligned to the MTSF priorities of the Government. The majority of these were achieved:
MTSF Outcomes
Number of Targets
Actual Achievement
Outcome 2 3
3 Achieved
Outcome 3 6
1 Achieved; 2 under achieved and 3 information classified
Outcome 5
3 Over achieved
Outcome 11 11
2 Over achieved; 3 achieved; 3 under achieved; and 3 information classified.
Key concerns:
Only 17 of the planned 25 number of incidents of corruption and fraud reported for detection were achieved.
Serviceability of equipment for external operations was only at 77%.

4. Strategic Priorities of the Minister
DOD 2013/14 Annual Report
The MoD identified eight strategic priorities for 2013/14. Most were achieved, but a number of concerns remain.
p.3
Key concerns:
Enhancement of Landward Defence. A Prime-mission Equipment and Technology Support Plan was drafted.
Revitalising the Reserves. There has been slow-down in the recruitment of reserves.
The Defence Works Capability. Although functional, capacity building is still under way, only of funded posts filled.

5. Performance Indicator
SANDF Selected Performance Indicators
DOD 2013/14 Annual Report
A number of additional Main Performance Indicators for the SANDF is listed. Several of these were under achieved:
Performance Indicator
Target 2013/14
Achievement 2013/14
Achievement 2012/13
Compliance with SADC Standby Force
100%
79%
Target Under Achieved
Underachieved
(Lack of Capacity)
Total number of Defence Attaché Offices 40 43
Target Over Achieved
Achieved
Number of joint, interdepartmental and multinational exercises 9 5
Under Achieved
Number of Reserves utilised per year
24 243
call-ups
( members utilised)
14 285
Over Achieved
Number of force employment hours flown per year
6 300
4 471
11 696
Number of sea hours per year
22 000
11 080
7 338.55
Number of landward sub-units deployed for border safeguarding 13 11
Percentage of approved Capital Works Plans completed
(9)
22.22% (2)
Percentage compliance with DOD refurbishment
100% (36)
67.8% (24)
52%
Percentage compliance with self-sustainment of personnel
83%
Not measured
Percentage litigation settled in favour of the DOD
60%
44%
14.9%
p.5

6. Programme and sub-programme performance evaluation
DOD 2013/14 Annual Report
Programme and sub-programme performance evaluation 6

7. Performance evaluation: An overview
DOD 2013/14 Annual Report
An overview of all eight programmes
p.7
Key concerns:
Percentage of budget spent versus percentage of targets achieved.
Dramatic reduction in the number of targets compared to 2012/13.
The number of classified targets

8. Performance evaluation: Programme 1
DOD 2013/14 Annual Report
p.8
Notes:
Quarterly spending was in line with general targets.
The number of targets decreased from 106 in 2012/13 to 88 in 2013/14.

9. Performance Indicator
Performance evaluation: Programme 1
DOD 2013/14 Annual Report
Performance Indicator
Target 2013/14
Actual 2013/14
Percentage Budget allocation for DOD Main Equipment renewal
30%
Target Under Achieved
10%
p.10
Selected under-achieved targets in Programme 1.
p.12
Percentage of PSAP disciplinary cases finalised in 90 days.
80%
Target Under Achieved
29% (58 out of 203)
Percentage compliance with planned staffing of funded posts
90%
(69 585)
Target Over Achieved
113% (78 864)
p.12
p.13
Percentage litigation settled in favour of the DOD
60%
Target Under Achieved
45%
p.15
Percentage of Reserves budget spent
100%
Target Under Achieved
94%
The number of Defence Provincial Liaison councils’ structures to be established 9
Target Under Achieved 7
Number of planned staff visits to Defence Attache offices to provide direction and monitoring compliance 10
Target Under Achieved
p.16

10. Performance evaluation: Programme 2
DOD 2013/14 Annual Report
p.16
Notes:
Low spending on the Defence capability management (41.7 per cent) and Support to the people (53.0 per cent) sub-programmes by the end of Q3.
One of only two programmes to show an increase in targets set.
Key concerns:
The cancellation of four International Military Exercises (Three of which were also cancelled in 2012/13).
The deployment of SA Navy personnel for Naval Control and Guidance of Shipping training to other SADC countries.
The alternative utilisation of re-allocation funding.

11. Performance evaluation: Programme 3
DOD 2013/14 Annual Report
p.17
Notes:
Quarterly spending on track with planned targets and only a limited virement
Key concerns:
Reduction in targets from 23 in 2012/13 to 4 in 2013/14.

12. Performance evaluation: Programme 4
DOD 2013/14 Annual Report
p.18
Notes:
Slow spending throughout the year (67.8 % by Q3). Large virement of R317m made to Programme 4 during Q4. Thus, R2.125 billion (or per cent) of the final allocation was spent in the last quarter alone.
Key concerns:
High spending in the last quarter.
High spending, but low achievement on flying hours.
Reduction in targets from 14 in 2012/13 to 4 in 2013/14.

13. Performance evaluation: Programme 5
DOD 2013/14 Annual Report
p.20
Notes:
Slow spending throughout the year (67.7 % by Q3). Large virement of R145m made to Programme 5 during Q4. Thus, R1.089 billion (or per cent) of the final allocation was spent in the last quarter alone.
Key concerns:
High spending in the last quarter.
High spending, but low achievement on hours at sea
Reduction in targets from 14 in 2012/13 to 4 in 2013/14.

14. Performance evaluation: Programme 6
DOD 2013/14 Annual Report
p.21
Notes:
Spending slightly lower than planned throughout the year. Virement in Q4 may have contributed to overspending by the end of the financial year.
Key concerns:
Slight overspending on budget.
Reduction in targets from 15 in 2012/13 to 6 in 2013/14.
Outsourcing to private medical facilities.
Patient footprint misaligned with the health care facilities

15. Performance evaluation: Programme 7
DOD 2013/14 Annual Report
p.22
Notes:
Slow spending throughout the year (66.6 % by Q3). Large virement of R6.7m made to Programme 7 during Q4. Thus, R270m (or per cent) of the final allocation was spent in the last quarter alone.
Increase in the number of performance targets.
Key concerns:
High spending in the last quarter.
Decrease in the target for vetting decisions from 7000 in 2012/13 to 4000 in 2013/14.

16. Performance evaluation: Programme 8
DOD 2013/14 Annual Report
p.23
Notes:
Spending throughout the year in line with planning.
Large virement away from the programme in Q4.
Key concerns:
Reasons for the large virement away from the programme in Q4?
The number of learners on courses.
Low number of crime prevention operations by the Military Police.
Reduction in targets from 38 in 2012/13 to 17 in 2013/14.

17. Organisational Structure and
DOD 2013/14 Annual Report
Organisational Structure and
Human Resources 17

18. Human resources Employment and vacancies by critical occupation
DOD 2013/14 Annual Report
p.26
Employment and vacancies by critical occupation
Critical occupation
Number of posts
Number of employees
Vacancy rate
Air Space Control
537
527
1.86%
Aircrew
612
491
19.77%
Anti-Aircraft
970
972
-0.21%
Artillery
1 289
1 416
-9.85%
Combat Navy
658
572
13.07%
Engineer
179
123
31.82%
Medical Professional
1 660
1 432
13.73%
Nursing
1 655
1 747
-5.56%
Technical
8 568
7 125
16.84%
Total
16 128
14 405
10.68%
Key concerns:
Low retention of core skills.
Low rate of appointment of engineers and aircrew.

19. Human resources
DOD 2013/14 Annual Report
Macro-Personnel Strength for 2011/12, 2012/13 and 2013/14
p.25
Financial year
Planned
Actual
2011/12
79 384
78 744
2012/13
80 379
78 725
2013/14
77 317
78 707
Notes:
Personnel costs represents 53% of the DOD’s total expenditure.
Sick leave came at a cost of R263m to the DOD. Highest level of sick-leave utilisation is at the Lower Skilled salary band.
In terms of labour relations, no strikes by PSAP members were recorded. 137 cases of misconduct were finalised. 139 grievances were finalised while 644 remain unresolved.

20. DOD 2013/14 Annual Report
Financial statements 20

21. Financial Statements Budget allocation for 2013/14
DOD 2013/14 Annual Report
Budget allocation for 2013/14
p.27
Programme
Main Appropriation
(R million)
Adjusted Appropriation
(R thousand)
Final Appropriation
Actual Expenditure
Programme 1: Administration
Programme 2: Force Employment
Programme 3: Landward Defence
Programme 4: Air Defence
Programme 5: Maritime Defence
Programme 6: Military health support
Programme 7: Defence Intelligence
762.4
Programme 8: General Support
Total
Additional funding:
R million: To Programme 4 (Air Defence) for higher than budgeted personnel cost.
R million: Paid to Programme 3 (Landward Defence) from sales of equipment and spares through the Special Defence Account.
R6.830 million: Paid to Programme 4 (Air Defence) from sales of equipment and spares through the Special Defence Account.
R1.654: Paid to Programme 8 (General Support) from sales of equipment and spares through the Special Defence Account.

22. Irregular expenditure
Financial Statements
DOD 2013/14 Annual Report
Irregular expenditure
p.29
Opening balance
R million
(+) Irregular expenditure from previous year
R190 million
(+) Irregular expenditure from current financial year
R million
(-) Amounts condoned
(R million)
(-) Amounts recoverable
None
(-) Amounts not recoverable
Irregular expenditure awaiting condonement R
Fruitless and wasteful expenditure:
Increased from R9.531 million in 2012/13 to R million in 2013/14. This is, however, mostly due to a penalty of R million incurred for the cancellation of an unspecified contract. Other cases of fruitless expenditure include R Interest Charged, R of state funds utilised for private use, R forfeited funds, R storage charges for recover vehicle and R for other cases.
Key concerns:
Additional funds for Air Defence personnel remuneration.
‘Sale of goods and services other than capital assets’ remain unclear.
Fruitless expenditure due to cancellation of a contract.
Funds spent without PPPFA compliance.

23. Auditor-General Report
DOD 2013/14 Annual Report
Auditor-General Report 23

24. Auditor-General Report
DOD 2013/14 Annual Report
The DOD received a Qualified Audit
p.30
Reasons:
Intangible capital assets: The AGSA was unable to obtain sufficient audit evidence for intangible assets.
Correction of errors from 2012/13: The 2013/14 financial statements provided corrections for errors made in the previous financial year with regards to the disclosure of intangible capital assets. The AGSA could not substantiate these corrections with supporting evidence.
Additional matters of emphasis:
Internal Audit: A fully functional internal audit committee was not in place. Financial statements: Financial statements were not prepared according to the PFMA.
Expenditure management: No effective steps taken to prevent irregular expenditure.
Leadership: The DOD did not exercise sufficient oversight responsibility regarding financial reporting over capital assets.
Financial and performance management: Existing manual and automated controls were not designed to ensure adequate record keeping.
Governance: The DOD is still in the process of capacitating the internal audit component.

25. Wilhelm Janse van Rensburg
Thank you ~
Questions
Wilhelm Janse van Rensburg
Researcher: JSC on Defence 25