1. Presentation by Ms N Fundakubi Chief Financial Officer April 2013
SCOA PRESENTATION
Budget vs. actual expenditure for the period ended 31 December 2012
Presentation by Ms N Fundakubi
Chief Financial Officer April 2013 1

2. Presentation outline Overview
Budget and actual expenditure per programme
Budget and actual expenditure per economic classification
Administration
Water Sector Management
Water Infrastructure Management
Regional Implementation and Support
Water Sector Regulation
International Water Cooperation
Reasons for major variances 2

3. Expenditure outcome as at 31 December 2012
Expenditure as at 31 December 2012
Programme (R'000)
Budget
Expenditure
Variance
% Spent
Administration
72%
Water Sector Management
98 758
78%
Water Infrastructure Management
53%
Regional Implementation and Support
42%
Water Sector Regulation
70 329
39 914
64%
International Water Cooperation
28 478
17 390
11 088
61%
Total
50%

4. CONSOLIDATED DEPARTMENTAL EXPENDITURE
VOTED FUNDS
EARMARKED FUNDS
TOTAL
UNIT
Adjusted Budget
YTD Exp 31 December 2012
Variance
% Spent
YTD Exp 31 December 2012
PROGRAMME
Administration
98 829
82%
57%
72%
Water Sector Management
51 268
87%
65 490
18 000
47 490
27%
98 758
78%
Water Infrastructure Management - 0%
53%
Regional Implementation and Support
84%
32%
42%
Water Sector Regulation
70 885
57 145
13 740
81%
39 358
13 184
26 174
33%
70 329
39 914
64%
International Water Cooperation
27 853
17 390
10 463
62%
625
28 478
11 088
61%
Total
83%
40%
50%
EXPENDITURE PER ECONOMIC CLASSIFICATION
Current payment
83%
30%
66%
Compensation of employees
74%
23 529
5 965
17 564
25%
73%
Goods and services
16 762
97%
61%
Interest and Rent on land
2 441
2 355 86
96% - 0%
Financial transaction in assets & liabilities
281
(281)
Unauhorised expenditure
Transfer and Subsidies
64 876
53 881
10 995
54%
55%
Province and Municipalities
122
259
(137)
212%
58%
Departmental agencies and accounts
50 946
41 331
9 615
81%
52%
53%
Universities and Technikons
Foreign Govt & International Organisations
501
(501)
61 115
60 614
Public Co operations & Private Enterprises 9
(9)
18 000
100%
18 009
Non-Profit Institutions
490
(490)
Households
13 808
11 291
2 517
82%
12 000 20
11 980
25 808
11 311
14 497
44%
Payment of Capital Assets
34 767
86%
34%
Building & Other fixed structures
(21 750)
115%
Machinery &Equipment
84 009
41 585
42 424
50%
660
4 931
(4 271)
747%
84 669
46 516
38 153
Cultivated assets
Software & and other intangible assets
15 195
1 102
14 093 7%
Land and subsoil assets
Total
40% 4

5. 5 ADMINISTRATION VOTED FUNDS EARMARKED FUNDS TOTAL UNIT
VOTED FUNDS
EARMARKED FUNDS
TOTAL
UNIT
Adjusted Budget
YTD Exp 31 December 2012
Variance
% Spent
PROGRAMME
Ministry
24 382
33 630
(9 248)
138% - 0%
Departmental Management
81 313
63 099
18 214
78%
Internal Audit
26 747
12 618
14 129
47%
Corporate Services
53 670
82%
12 000
65 670
79%
Financial Management
78 641
22 064
Office Accommodation
59%
Total
98 829
57%
72%
EXPENDITURE PER ECONOMIC CLASSIFICATION
Current payment
82 119
84%
59%
74%
Compensation of employees
51 623
81% - 0%
Goods and services
31 231
86%
70%
Interest and Rent on land
454
(454)
Financial transaction in assets & liabilities
281
(281)
Unauhorised expenditure
Transfer and Subsidies
2 575
6 074
(3 499)
236%
12 000
14 575
8 501
42%
Province and Municipalities
Departmental agencies and accounts
1 575
Universities and Technikons
Foreign Govt & International Organisations
Public Co operations & Private Enterprises
Non-Profit Institutions
490
(490)
Households
1 000
5 584
(4 584)
558%
13 000
7 416
43%
Payment of Capital Assets
35 229
15 020
20 209
Building & Other fixed structures
2 929
3 942
(1 013)
135%
Machinery &Equipment
19 388
10 207
9 181
53%
Cultivated assets
Software & and other intangible assets
12 912
871
12 041 7%
Land and subsoil assets
Total
98 829
82%
57%
72% 5

6. WATER SECTOR MANAGEMENT
VOTED FUNDS
EARMARKED FUNDS
TOTAL
UNIT
Adjusted Budget
YTD Exp 31 December 2012
Variance
% Spent
PROGRAMME
Policy Planning and Management Support
4 143
2 633
1 510
64% - 0%
Intergrated Planning
87 852
(26 124)
130%
40 000
13 876
89%
Policy and Strategy
27 971
19 754
8 217
71%
Water Ecosystem
31 461
22 514
8 947
72%
Water Information Management
41 347
73%
Institutional Oversight
82 001
64 630
17 371
79%
25 490
18 000
7 490
82 630
24 861
77%
Total
51 268
87%
65 490
47 490
27%
98 758
78%
EXPENDITURE PER ECONOMIC CLASSIFICATION
Current payment
33 731
89%
47 490 - 0%
81 221
77%
Compensation of employees
39 061
29%
76%
Goods and services
(5 136)
20%
42 354
78%
Interest and Rent on land
240
434
(194)
80%
181%
Financial transaction in assets & liabilities
Unauhorised expenditure
Transfer and Subsidies
49 371
41 414
7 957
84%
18 000
100%
67 371
59 414
88%
Province and Municipalities
Departmental agencies and accounts
41 327
8 044
19%
Universities and Technikons
Foreign Govt & International Organisations
Public Co operations & Private Enterprises
Non-Profit Institutions
Households 87
(87)
Payment of Capital Assets
34 625
25 045
9 580
72%
Building & Other fixed structures
27 219
17 502
9 717
64%
Machinery &Equipment
5 931
7 347
(1 416)
124%
Cultivated assets
Software & and other intangible assets
1 475
196
1 279
13%
Land and subsoil assets
Total
51 268
87%
65 490
27%
98 758 6

7. WATER INFRASTRUCTURE MANAGEMENT
VOTED FUNDS
EARMARKED FUNDS
TOTAL
UNIT
Adjusted Budget
YTD Exp 31 December 2012
Variance
% Spent
YTD Exp 31 December 2012
PROGRAMME
Infrastucture Development and Rehabilitation - 0%
52%
Operation of Water Resources
53 164
67%
Total
53%
EXPENDITURE PER ECONOMIC CLASSIFICATION
Current payment - 0%
Compensation of employees
Goods and services
Interest and Rent on land
Financial transaction in assets & liabilities
Unauhorised expenditure
Transfer and Subsidies
53%
Province and Municipalities
Departmental agencies and accounts
52%
Universities and Technikons
Foreign Govt & International Organisations
60 490
66%
Public Co operations & Private Enterprises
Non-Profit Institutions
Households
Payment of Capital Assets
Building & Other fixed structures
Machinery &Equipment
Cultivated assets
Software & and other intangible assets
Land and subsoil assets
Total 7

8. REGIONAL IMPLEMANTATION AND SUPPORT
VOTED FUNDS
EARMARKED FUNDS
TOTAL
UNIT
Adjusted Budget
YTD Exp 31 December 2012
Variance
% Spent
PROGRAMME
Regional Management and Support
7 094
3 780
3 314
53% - 0%
Sector Support and Intergovernmental Relations
53 968
89%
6 506 2%
47%
Institutional Establishment
19 679
15 296
4 383
78%
Regional Programme Coordination 6
Regional Bulk
722
(722)
41%
Transfer of Water Schemes
78 954
69 538
58%
57%
Support Services
73 917
75% 2
(2)
73 915
Water Services Projects
60 753
(60 753)
10%
Intergrated Catchment Management
29 547
17 108
12 439
Mine Water Management
Total
84%
32%
42%
EXPENDITURE PER ECONOMIC CLASSIFICATION
Current payment
82%
34 113 9%
58%
Compensation of employees
71%
12 959
5 965
6 994
46%
70%
Goods and services
(10 402)
104%
28 148 8%
48%
Interest and Rent on land
2 051
1 460
591 - 0%
Financial transaction in assets & liabilities
Unauhorised expenditure
Transfer and Subsidies
12 930
5 871
7 059
45%
57%
Province and Municipalities
122
259
(137)
212%
Departmental agencies and accounts 4
(4)
Universities and Technikons
Foreign Govt & International Organisations
Public Co operations & Private Enterprises 9
(9)
Non-Profit Institutions
Households
12 808
5 599
7 209
44% 20
(20)
5 619
7 189
Payment of Capital Assets
3 880
98%
30%
34%
Building & Other fixed structures
(30 454)
126%
33%
Machinery &Equipment
56 792
23 227
33 565
41%
4 931
(4 931)
28 158
28 634
50%
Cultivated assets
Software & and other intangible assets
804 35
769 4%
Land and subsoil assets
Total
84%
32%
42% 8

9. WATER SECTOR REGULATION
VOTED FUNDS
EARMARKED FUNDS
TOTAL
UNIT
Adjusted Budget
YTD Exp 31 December 2012
Variance
% Spent
PROGRAMME
Regulation Management and Support
2 935
222
2 713 8% - 0%
Economic and Social Regulation
3 700
821
2 879
22%
Water Use Authorisation
14 977
15 903
(926)
106%
Drinking Water Quality and Waste Water Services
26 313
9 153
17 160
35%
20 974
12 213
8 761
58%
47 287
21 366
25 921
45%
Resource Regulation
7 109
24 671
(17 562)
347%
18 384
25 493
822
97%
Compliance and Monitoring
788 22
766 3%
Enforcement
15 063
6 353
8 710
42%
971
(971)
7 324
7 739
49%
Total
70 885
57 145
13 740
81%
39 358
13 184
26 174
33%
70 329
39 914
64%
EXPENDITURE PER ECONOMIC CLASSIFICATION
Current payment
70 268
56 883
13 385
81%
38 698
13 184
25 514
34%
70 067
38 899
64%
Compensation of employees
52 308
35 172
17 136
67%
10 570 - 0%
62 878
27 706
56%
Goods and services
17 875
21 711
(3 836)
121%
28 128
14 944
47%
46 003
34 895
11 108
76%
Interest and Rent on land 85
Financial transaction in assets & liabilities
Unauhorised expenditure
Transfer and Subsidies 22
(22)
Province and Municipalities
Departmental agencies and accounts
Universities and Technikons
Foreign Govt & International Organisations 1
(1)
Public Co operations & Private Enterprises
Non-Profit Institutions
Households 21
(21)
Payment of Capital Assets
617
240
377
39%
660
1 277
1 037
19%
Building & Other fixed structures
Machinery &Equipment
613
373
1 273
1 033
Cultivated assets
Software & and other intangible assets 4
Land and subsoil assets
Total
70 885
57 145
13 740
39 358
26 174
33%
70 329
39 914 9

10. INTERNATIONAL WATER COOPERATION
VOTED FUNDS
EARMARKED FUNDS
TOTAL
UNIT
Adjusted Budget
YTD Exp 31 December 2012
Variance
% Spent
PROGRAMME
International Relation Management and Support
5 740
3 063
2 677
53% - 0%
Africa Cooperation
11 366
5 791
5 575
51%
625
11 991
6 200
48%
GlobalCooperation
10 747
8 536
2 211
79%
Total
27 853
17 390
10 463
62%
28 478
11 088
61%
EXPENDITURE PER ECONOMIC CLASSIFICATION
Current payment
26 568
16 326
10 242
61% - 0%
Compensation of employees
16 509
11 230
5 279
68%
Goods and services
9 994
5 089
4 905
51%
Interest and Rent on land 65 7 58
11%
Financial transaction in assets & liabilities
Unauhorised expenditure
Transfer and Subsidies
500
(500)
625
125
80%
Province and Municipalities
Departmental agencies and accounts
Universities and Technikons
Foreign Govt & International Organisations
Public Co operations & Private Enterprises
Non-Profit Institutions
Households
Payment of Capital Assets
1 285
564
721
44%
Building & Other fixed structures
Machinery &Equipment `
Cultivated assets
Software & and other intangible assets
Land and subsoil assets 10

11. Reasons for under/or over expenditure
Programme 1: Administration
The spending in this programme is within the acceptable level, however the following should be noted:
Skills Development Levy payment amounting to R1.5 million will be made in the fourth quarter of the financial year.
Inconsistencies and delays of receiving invoices from the Department of Public Works (DPW) have resulted in under spending in respect of Office Accommodation. Follow ups are being made with the Department of Public Works. It is anticipated that expenditure will increase in the fourth quarter of the financial year.
It is anticipated that Branch: Corporate Services will over spend its allocated budget by approximately R22 million and this is mainly due to budget cuts declared by National Treasury. The main cost drivers within Corporate Services are advertising costs for recruitment, information technology Services, Property contract payments (Security, Cleaning and Maintenance). Most of these costs drivers are shared services between Main Account and Water Trading Entity. An Analyses for shared services between these two accounts are being finalized in order to recover expenditure incurred on behalf of the WTE to defray over expenditure in Main Account (Corporate Services).The claim was submitted in March 2013 and the Department received payment in the same month of March. 11

12. Reasons for under/or over expenditure
Programme 2: Water Sector Management
The spending in this programme is higher due to:
The expenditure on goods and services is slightly over by 2% due to budget cuts implemented by National Treasury.
The expenditure on payments for capital assets is higher as result of a payment that was paid by the Department on behalf of the Namibian Government for a projects which are co-funded. The funds have been refunded by the Namibian Government, a Journal will be processed to rectify/reduce the over expenditure under payment for capital assets. 12

13. Reasons for under/or over expenditure
Programme 3: Water Infrastructure Management
Water Infrastructure Management programme spent 53% of its allocated budget which is the largest contributor of under expenditure in the department. The expenditure mostly driven by infrastructure projects such as Construction of De Hoop Dam, Dam Safety Rehabilitation Programme, Olifants River Water Resources Development Project – Phase 2 Bulk Distribution System, and Mdloti River Development (Hazelmere Dam Raising), Water Services Projects (Nandoni Pipeline, Inyaka and Hluhluwe Water Treatment works) .
The under expenditure on this programme is mainly due to the following:
Industrial action at the De Hoop dam constructions.
Slow delivery of pipes as result of quality problems.
Delays in submission of invoices for the work done in respect of bulk distribution.
Decision pending the configuration of the dam on Raising of Hazelmere Dam wall.
The design of Hezel Mere was also delayed due to the ground conditions experienced at the beginning of the projects .
Delays in appointment of Profession Service Providers in respect of Dam Safety Rehabilitation Programme.
Decision pending of the configuration of the dam wall in respect of Development Raising of Hazelmere Dam. 13

14. Reasons for under/or Over Expenditure
Programme 4: Regional implementation and Support
The under expenditure on this programme is mainly due to the following:
Operational Expenditure Analysis
The expenditure on compensation of employees is under spending because of vacant posts. The Occupational Specific Dispensation (OSD) technician posts have not been filled because suitable candidates were not found.
As result of delays on filling of OSD posts, funds allocated for the procurement of office furniture and equipment could not be spent
Infrastructure Expenditure Analysis
 Various delays in municipalities contributed towards under expenditure such prolonged procurement processes and appointment of professional service provider, legal disputes between municipalities and contractors, service delivery protests, constructions of projects progressing slowly due to floods and municipal institutional challenges.
Hydro Equipments have been ordered abroad which affected the expenditure in respect of machinery and equipment, these machines is anticipated to be delivered and processed in the fourth quarter.
An amount of R20.8 million in respect of Harties Water Quality has been committed and it is anticipated that invoices will be processed in the third and fourth quarter of the financial year.
Delays in land expropriation and approval of Water License after verification in Mpumalanga.
Water Services Projects received invoices which amount to over R186 million, it is anticipated that they will be paid in January These projects are implemented by Water Trading Entity on behalf of Main Account and based on the projected expenditure for the entire year and projects plans, it is anticipated that R620 million will be fully utilised. Delays for processing of invoices are due to change in payment process as result of appointment of the Programme Manager. The expenditure is expected to increase in the coming months.
OPERATIONAL BUDGET

15. Reasons for under/or Over Expenditure
Programme 5: Water Sector Regulations
The under expenditure on this programme is mainly due to the following:
Expenditure on compensation of employees is under spending due to unfilled vacant posts.
As result of delays on filling of OSD posts, funds allocated for the procurement of office furniture and equipment could not be spent
OPERATIONAL BUDGET

16. Reasons for under/or Over Expenditure
Programme 6: International Water Co-operation
The under expenditure on this programme is mainly due to the following:
The expenditure incurred for delegates who attended International Water Week, Stockholm still to be submitted by Department of International Relations and Co-operations (DIRCO).
it is anticipated that invoices for training will be processed in the fourth quarter.
Computer Software (MS Projects) had been procured and payments will be processed in the fourth quarter.
Payment of Registration fees for WWC & OECD Membership submitted to be processed.
A strategic session had been conducted and payments will be processed in the fourth quarter.
Two bilateral to China and Malaysia was planned for but have not been approved.
Transfer payment for membership for AMCOW is only payable upon receipts of the invoice from the AMCOW Secretariat and is expected to be paid in the fourth quarter of the financial year.
OPERATIONAL BUDGET

17. THANK YOU 17