1. 1 QUARTERLY EXPENDITURE ANALYSIS FOR THE DEPARTMENT OF LABOUR 2013/14- 2014/15 PRESENTED BY: Musa Zamisa Phelelani Dlomo 15 OCTOBER 2014

2. Introduction Overall Expenditure 2013/14 Trends for 2013/14 quarterly expenditure  Q1: Expenditure Analysis  Q2: Expenditure Analysis  Q3: Expenditure Analysis  Q4: Expenditure Analysis Trends of the 2014/15 first quarter expenditure  Q1: Expenditure analysis 2014/15 Performance achieved vs budget spent in 2013/14 Implications of non payment of invoices within 30 days 1 PRESENTATION LAYOUT

3. OVERALL ALLOCATIONS FOR 2013/14 The Department was allocated R2.4 billion for 2013/14 financial year, This represents a nominal increase of R275.7 million, or 12.9 per cent, from R2.1 billion in 2012/13, The Allocations to specific categories in Q1 of 2013/14: R818 million on transfers and subsidies, R1.6 billion for operations, 2

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5. 3 An amount of R780.6 million was projected to be spent An amount of R630 million was spent The reported under expenditure amounted to R150.7 million FIRST QUARTER EXP. FOR 2013/14

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8. Delays in obtaining invoices from external service providers such as Travel with Flair, Delays in the filling of budgeted vacant positions, The National Treasury raised an issue around this since May 2013 6 Q1: REASONS FOR UNDER EXPENDITURE 2013/14 WHAT ARE THE IMPLICATIONS OF NON PAYMENT OF INVOICES WITHIN 30 DAYS?

9. Q2: QUARTER EXPENDITURE 2013/14 R1.2 billion was projected to be spent Only spent R1.1 billion, R100 million remained unspent, 7

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12. Q2: REASONS FOR UNDER EXPENDITURE 10 Delays in filling vacant posts, Delays in obtaining invoices for Travel with Flair, and office leases, National Treasury raised an issue with the Department since May 2013 WHAT ARE THE IMPLICATIONS FOR THE NON PAYMENT OF INVOICES WITHIN 30 DAYS?

13. 13 UNDEREXPENDITURE FINAL EXPENDITURE FINAL APPROPRIATION OVERALL PICTURE FOR 2013/14

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15. Third Quarter Expenditure Highlights  Total spending 75.8 %  Compensation of Employees 73.5%  Goods & Services 53.8% 15 Main issues  Unfilled Vacancies  Late receipt of invoices from Travel & Fair

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20.  Programme 1 (Administration)  unfilled vacancies  Late receipt of invoices from DPW for leases for office buildings  Programme 2 (Inspection and Enforcement Services)  Unfilled vacancies  Less than anticipated orders processed for the procurement of IT and office equipment Programme 4 (Labour Policy and industrial Relations)  Unfilled vacancies  Less than anticipated orders processed for the procurement of IT and office equipment 20 REASONS FOR UNDERSPENDING

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24. The unfilled funded vacant posts Delays in the payment for lease Delays in the payment of invoices Including past financial year outstanding The National Treasury raised a concern. 24 Q1: Reasons for under Expenditure 2014/15 WHAT ARE THE IMPLICATIONS FOR THE NON PAYMENT OF INVOICES WITHIN 30 DAYS?

25. Figure: 1 Personnel Budgets Vs Payment for Capital Assets 25 The Implications for non payment of invoices within 30 days The payment of suppliers within 30 days is a requirement of the PFMA in terms of section 38 (1) (f) and Treasury Regulation section 8.2.3 which respectively. It stipulate the following: An accounting officer of the department must settle all contractual obligations and pay all money owing including intergovernmental claims, within the prescribed or agreed period. An accounting officer must ensure that all payments due to creditors are settled within 30 days from receipt of an invoice or, in the case of civil claims, from the date of settlement or court judgement.

26. 26 The late or non-payment of suppliers is seriously impacting in the sustainability of the SMME’s. Ultimately affect the local economic development. Does not assist in the fight against poverty, inequality and unemployment. Financial misconduct: Section 81 of the PFMA which stipulates, the failure to comply with 38,39,40,41 or 42 constitutes a financial misconduct and can lead to criminal offence, Disciplinary action being taken against the accounting officer who fails to implement section 38 Implications Cont……………..

27. 27 TABLE 1: PERFORMANCE TARGETS ACHIEVED VS BUDGET SPENT PROGRAMMETARGETS PLANNED TARGETS ACHIEVED BUDGET ALLOCATION BUDGET SPENT PERCENTAGE- SPENT (%) ADMINISTRATION 2518 (72%)R840.4R795.894.7% INSPECTION AND ENFORCEMENT 1712 (70.5%)R426.8R412.296.6% PUBLIC EMPLOYMENT 1413 (92%)R413.4 100% LABOUR POLICY AND INDUSTRIAL RELATIONS 2416 (67%)R594.4R594.0100% TOTAL 80 (100%)59 (75%)2 445.2R2 371.497%

28. Thank you !!!!!!! Siyabonga !!!!!!!! 28 THE END!!!!!