DIRCO AND ARF ANNUAL REPORT

1. DIRCO AND ARF ANNUAL REPORT

2. DIRCO

3. PERFORMANCE HIGHLIGHTS • Five years unqualified audit opinion from AGSA. • Increased in department’s priorities without additional funding • Global representation

4. EXPENDITURE OUTCOME 2012/13

5. Expenditure per programme

6. Expenditure per economic classification

7. Vote Expenditure as at 31 March 2013

8. Expenditure outcome continued… • Actual expenditure for 2012/13 was 98.4% of the final appropriation. • The under-spending was mainly in Programme 1 under payments for capital assets due to renovation projects in Washington and Tokyo that were delayed due to unforeseen structural changes (reinforcement) that had to be made before continuing with the renovations.

9. AUDIT OUTCOME

10. 2012/13 AUDIT FINDINGS • Material misstatements in the financial statements submitted for auditing. • Non compliance with Laws and Regulations: • Irregular expenditure not prevented and detected • Payments not made within 30 days • Ineffective systems of internal control over asset management • Usefulness of Performance Information: SMART criteria

11. Management Commitments • Establish appropriate review and effective oversight processes over the financial and performance reporting. - Quality Assurance team. • Perform and review reconciliations of key control and suspense accounts (monthly). • Develop and implement an effective filling system of financial records.

12. Management Commitments • Process re-engineering and implementation of document tracking system to streamline payment of invoices • Creation of central point for receipt and recording of invoices to improve coordination of payments • Creation of awareness within DIRCO for the 30 day payment requirement to improve partnership with Business Units 7. SCM Compliance office established to focus on fostering compliance with SCM legislation across the Department

13. Management Commitments • Focus placed on conducting monthly reconciliations. • Full functionality provided for Missions to effect updates on the FAR through the Web Browser • Quarterly physical asset verification conducted using scanners. This provides evidence of the verification process • Exceptions identified during the verification process to be timely cleared

14. Management Commitments • Continue with extensive capacity building on the requirements of the FMPPI, including sessions with the Missions to ensure compliance at Mission level • Strengthen monitoring mechanisms particularly at Branch level to ensure compliance with the guidelines developed and issued • Continue with benchmarking with other foreign ministries with regard to performance monitoring

15. ARF

16. ARF OVERVIEW • The Fund has been established as an entity in terms of the PFMA, however, no existing organogram, including a delegation of authority, was established that indicated the reporting lines, responsibilities and powers of the officials delegated to monitor the activities of the Fund. • The Advisory Committee of the Fund established in accordance with section 5(1) of the ARF Act (Act No. 51 of 2000) does not have documented terms of reference that stipulate, amongst others, its powers and duties. • The Secretariat of the Fund established in accordance with section 6(2) of the ARF Act (Act No. 51 of 2000) does not have documented terms of reference that stipulate, amongst others, its powers and duties.

17. Performance highlights • Unqualified audit opinion by AGSA • Electoral Assistance to Guinea Bissau and SADC observer mission • Humanitarian assistance provided to five (5) countries • Provided Socio-economic development and integration programs to Malawi and Zambia • Capacity building programs provided to five countries

18. EXPENDITURE OUTCOME 2012/13

19. REVENUE/ACC. SURPLUS • Appropriated amount is R 517 million • The interest received from the bank account is R 74 million • Accumulated Funds available in 2012/13 R1384 million

20. 2012/13 EXPENDITURE • An amount of R1 070 million was approved for projects. The distribution of funds can be summarised as follows: R’000 • Prevention and resolution of conflicts 16324 • Socio-economic development and integration 321 634 • Humanitarian assistance 576 600 • Human resource development 55 748 • Total 1 070 306

21. ANALYSIS OF EXPENDITURE

22. ANALYSIS OF EXPENDITURE

23. EXPENDITURE ANALYSIS • The expenditure has grew over the years as the need for humanitarian assistance grew in the Continent. • This necessitated the use of the implementation agencies for the execution of the projects. • The appointment and utilisation of implementing agencies other than (other department and foreign governments) was aiming at: • Stimulation of the South African economy; • Improving monitoring and management of the projects through the Service Level Agreement.

24. AUDIT OUTCOME

25. 2012/13 AUDIT FINDINGS • Non-compliance with Laws and Regulations: • Irregular expenditure not detected and prevented. • Performance Information. • Ineffective systems of internal control.

26. Irregular expenditure It resulted in the department reporting: • R529 574 000,00 of irregular expenditure for non-compliance with SCM prescripts. • R10 636 000, 00 relates to 2011/12 financial year.

27. Management Commitments • Develop and maintain a service provider’s database. • Develop and implement a system of detecting and preventing irregular expenditure. • Develop an emergency relief and humanitarian assistance policy. • Developed a project checklist to track. • Conduct comprehensive investigation.

28. Management Commitments • Strategic Plan & Annual Performance Plan 2013/14 published and tabled. • Develop policy guidelines and internal control procedures • Develop and implement appropriate risk management strategy • Developed standardised Service Level Agreements/MoUs

29. Management Commitments • Documented terms of reference for the Advisory Committee • Documented terms of reference for the Secretariat • Organogram, including delegation of authority – SADPA

30. THANK YOU