1. Finance & Human Resources Presentation to the Select Committee on Economic and Business Development 27 October 2015

2. HR Overview 2  Key to success in delivering on the Department’s objectives has been ensuring appropriate human resources.  The Department implemented a new staffing model that permitted mobilisation of resources as required using permanent appointments, contracts and part-time appointments, secondments of staff and using staff employed by other agencies.  These measures have enabled the Department to deliver on its Strategic Objectives through responsive and appropriately resourced project teams.  Key to success in delivering on the Department’s objectives has been ensuring appropriate human resources.  The Department implemented a new staffing model that permitted mobilisation of resources as required using permanent appointments, contracts and part-time appointments, secondments of staff and using staff employed by other agencies.  These measures have enabled the Department to deliver on its Strategic Objectives through responsive and appropriately resourced project teams.

3. Performance Overview 3 The Department met all its targets and exceeded its targets for 50% of the indicators included in its Annual Performance Plan.

4. Financial Performance Overview 4 For the year under review the department spent 99.72% (ie. under spending of 0.28%) and obtained an unqualified audit opinion

5. Financial Performance Overview 5 In their report The Financial and Fiscal Commission stated the following:- “ Spending performance across major programmes has improved -In 2014/15, all programmes achieved almost 100% expenditure against budget -Review to organizational structure has seen significant drop in underspending – in 2014/15, this amounted to 0.3% of the total budget -No roll-overs requested in 2014/15, signaling improved efficiency in planning, budgeting and implementing budget programs.”

6. Financial Performance per Programme 6 Programmes 2014/152013/14 Annual BudgetExpenditureVariance Annual BudgetExpenditureVariance R'000 % % Administration88 07687 4196570.75%91 34291 301410.04% Economic Policy Development12 83412 775590.46%23 89123 88650.02% Economic Planning and Coordination586 500585 4521 0480.18%644 515644 51140% Economic Development and Dialogue9 4509 2671831.94%11 71811 697210.18% Total696 860 694 9121 9480.28%771 466 771 395710.01%

7. Year on Year Performance per Programme 7 Programmes2014/152013/14Variance Administration99.25%99.96% -0.71% Economic Policy Development99.54%99.98% -0.44% Economic Planning and Coordination99.82%100.0% -0.18% Economic Development and Dialogue98.06%99.82% -1.76% Total99.72%99.99% -0.27% Total (R’000) 694 912 771 395-76 483

8. Financial Performance per Economic Classification 8 Programmes 2014/152013/14 Annual BudgetExpenditureVariance Annual BudgetExpenditureVariance R'000 % % Compensation of employees76 56175 6888720.04%70 94870 922260.04% Goods & services41 59040 5671 0240.06%66 27665 8724040.61% Departmental agencies306 820 00%273 603 00% Public corporations268 845 00%353 979 00% Non-profit institutions60 00%000 Households22021900.8%49949540.8% Payments for capital assets2 7642 712520.05%6 1346 497-363-5.60% Payments for financial assets0000%27 00% Totals 696 860 694 912 1 9480.28% 771 466 771 395 710.01%

9. Financial Performance per Economic Classification 9 Programmes2014/152013/14Variance Compensation of Employees98.86%99.96%-1.1% Goods & services97.54%99.94%-2.4% Departmental Agencies100.0% 0% Public Corporations100.0% 0% Non-profit institutions100.0%0%-100% Households100.0%99.20%0.8% Payment for capital assets98.12%99.95%-1.83% Totals99.72%99.99%-0.27%

10. Year on year decrease in expenditure was mainly due to:  Decrease in the annual appropriation of the vote by R75m which was made up of reductions: Goods and Services of R25m Transfers to agencies of R52m  Reduction in the advertisement, legal costs and travel and mainly implementing the cost containment measures  Fewer assets purchased and there were no software purchases. Comparison of spending Year on Year 10

11. KPIs Total Number of KPIs22 KPI’s with targets exceeded11 KPI’s with targets met11 Overall Performance for 2014/15 11 R’000 Budget696 860 Expenditure694 912 Under spending1 948

12. Performance for the 2014/15 - Programme 1 12 R’000 Budget88 076 Expenditure87 419 Under spending657

13. KPIs Total Number of KPIs 4 KPIs with targets Exceeded 2 KPI’s with targets met 2 Performance for the 2014/15 - Programme 2 13 R’000 Budget12 834 Expenditure12 775 Under spending59

14. KPIs Total Number of KPIs 13 KPIs with targets Exceeded 8 KPI’s with targets met 5 Performance for the 2014/15 – Programme 3 14 R’000 Budget586 500 Expenditure585 452 Under spending1 048

15. KPIs Total Number of KPIs 5 KPIs with targets Exceeded 1 KPI’s with targets met 4 Performance for the 2014/15 – Programme 4 15 R’000 Budget9 450 Expenditure9 267 Under spending183

16. Transfers to Entities 16 Description 2014/152013/14 R'000 Industrial Development Corporation0108 000 Industrial Development Corporation: Sefa268 845245 979 Competition Commission 198 212 176 888 Competition Tribunal 19 911 16 945 International Trade Administration Commission 88 374 79 770 Total 575 342 627 582 For the financial year under review 83% of the budget was transferred to the department’s entities.

17. Revenue Performance 17 Description 2014/152013/14 R'000 Sales of goods and services other than capital assets 85 23 Fines, penalties and forfeits 0 0 Interest, dividends and rent on land 50 237 50 229 Transactions in financial assets and liabilities 45 9 836 Total 50 367 60 088 EDD no longer reports on penalties collected by the Competition Commission in line with reporting requirements reflected in the Accounting Manual issued by OAG. 1.In 2014/15 R880 million was received from Competition Commission for fines and penalties imposed by the Competition Tribunal which is no longer recognised as Departmental Revenue. This was paid to the National Revenue Fund. 2.In 2013/14 R1,098 billion was received and paid over to National Revenue Fund. 3.Dividends are received from Industrial Development Corporation

18. Number of posts on approved establishment164 Number of funded posts149 Number of posts filled (incl. additional to the establishment)124 HR Information 18  As a result of the October 2014 Medium Term Budget Policy Statement (MTBPS), which gave effect to the Cabinet decision to reduce allocations for compensation of employees across government, the EDD’s funded posts were reduced to 149.  The EDD had the ratio of employing women in senior management positions at 54% for the 2014/15 financial year.  19 interns were in the employ of the EDD during the 2014/15 financial year  The Department employs staff on a permanent basis, as well as through fixed term contracts for specific projects and secondments to access specific scarce skills and knowledge in relation to, for example, the PICC technical unit,. wherein an additional 79 staff from various government entities were utilised at no cost to the Department. Staff utilised not on EDD establishment79

19. Auditor–General Report 19 Audit Outcome  The department obtained an unqualified audit opinion.  One non-compliance matter regarding verification of employees was reported as this was not finalised prior to employees taking office. These were however completed prior to the audit.  Improved management report - less findings compared to the last financial years.  No material misstatements  Positive conclusion on performance information  The management report issued by the Auditor-General for the 2014/15 financial year reflected 25 findings compared to 41 findings in the 2013/14 financial year.

20. Outcomes of Auditor–General Report 20 Area of responsibility No. of Findings % Matters Affecting the Audit % Human Resources Management1144% 1 100% Financial Accounting832% 0% Supply Chain Management312% 0% Information Technology312% Totals 25 100%1

21.  A consolidated ‘heatmap’ to rectify the audit findings has been compiled, which reflects responsible persons and timeframes to rectify each finding  In the Heatmap process, specific attention is given to the priority areas of the AG findings but most importantly repeat findings around human resource management matters  ‘Heatmap’ mitigation plans are being monitored every second Friday at the progress meetings, attended by the process owners & chaired by the CFO. Internal Audit attends these meetings and will audit the corrective measures that have been implemented as part of the audit coverage plan  Progress reports on the implementation of corrective measures are presented to the Audit Committee, DG and Manco. Commitments on addressing Audit Issues 21

22.  During the past administration, the EDD developed the administrative structures and reviewed policies required to live up to its responsibilities in terms of government policy while complying with governance requirements.  The Department has consistently achieved unqualified audit opinions, achieved most of its annual targets and spent almost all of its annual allocated budget.  The EDD will also commission work to be done through public institutions and universities, where appropriate, based on Memoranda of Understanding ( MOUs).  These projects will source additional intellectual expertise to supplement the role of the EDD staff. Conclusion 22

23. 23 THANK YOU SIYABONGA