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Presentation to the Portfolio Committee on Defence and Military Veterans on the

Presentation to the Portfolio Committee on Defence and Military Veterans on the Castle Control Board Annual Report 2011/12. CCB ANNUAL REPORT FY 2011/12. AIM.

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Presentation to the Portfolio Committee on Defence and Military Veterans on the

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  1. Presentation to the Portfolio Committee on Defence and Military Veterans on the Castle Control BoardAnnual Report 2011/12

  2. CCB ANNUAL REPORT FY 2011/12 AIM The aim of the presentation is to report to the Portfolio Committee on Defence and Military Veterans on the Castle Control Board Annual Report for FY2011/12

  3. CCB ANNUAL REPORT FY 2011/12 SCOPE The Board Management Report Strategic Profile Strategic Objective Performance Organisational Structure and HR Financial Performance Report of the Auditor-General

  4. CCB ANNUAL REPORT FY 2011/12 THE BOARD

  5. INTRODUCTION TO THE CCB CCB ANNUAL REPORT FY 2011/12 The Castle Management Act, Act 207 of 1993. • Castle of Good Hope was placed under the juristic control of the CCB • CCB as public entity under the Minister of Defence and Military Veterans should achieve the following objectives: • To preserve and protect the military and cultural heritage of the Castle of Good Hope • To optimise the tourism potential of the Castle • To optimise accessibility to the Castle by the public

  6. STAKEHOLDERS CCB ANNUAL REPORT FY 2011/12 Stakeholders currently represented on the Board. • South African National Defence Force (C Log) – Lt Gen J.T. Nkonyane • Officer Commanding Army Support Base Western Cape – Col R. Mongo • Minister of Defence and Military Veterans (2 appointments) – Ms A. Aggenbach Adv D. Mitchell • Cape Town Regional Chamber of Commerce and Industry – Mr K. Jimba • Iziko Museums of South Africa – Ms R. Omar • Department of Public Works – Mr F. Johnson • South African Heritage Resources Agency – Mr G. Ontong • City of Cape Town – Mr D. Hart • South African Tourism Board (WESGRO) – Mr M. Parker • Western Cape Provincial Legislature – Mr C. Dowman • Executive Director – Mr L. Madden (interim appointment)

  7. BOARD PRIORITIES FOR FY2011/12 CCB ANNUAL REPORT FY 2011/12 Delivery of the Castle as Heritage Site. • Protection of the fabric of the Castle Governance and Oversight. • Evaluation and revision of management processes - KPMG review • Reconstitution of the Board • Strategic planning process • Supply chain management (SCM) policy Sustainability. • Income Growth

  8. CCB ANNUAL REPORT FY 2011/12 MANAGEMENT REPORT

  9. OPERATIONAL MANAGEMENT CCB ANNUAL REPORT FY 2011/12 EVENTS. • Progress was made ito Programme 3 (Maximise the tourism potential) and Programme 4 (Increase public profile and positive perception across all sectors of the community) • Highlights for the year: • State visits by Chairman Wu, President Zuma and Minister Lindiwe Sisulu • Military events included the Cape Town Highlanders’ Freedom of the City Parade, the Al Alamein Parade and the Sunset Parade

  10. OPERATIONAL MANAGEMENT (2) CCB ANNUAL REPORT FY 2011/12 EVENTS. • Highlights for the year (continued): • Exhibitions included the World Press Photo Foundation and Fired, an exhibition on South African ceramics • Fidelio Opera hosted by the Cape Town Opera • The 360th Birthday Parade of Cape Town were hosted at the Castle in conjunction with the VOC Foundation and Regiment Western Province • Venue hire and events support the income to the Board which amounted to Rm2.6 (17% increase from FY2010/11)

  11. OPERATIONAL MANAGEMENT (3) CCB ANNUAL REPORT FY 2011/12 CASTLE MILITARY MUSEUM. • Exhibitions and publications completed during the year: • Diorama of a Xhosa village for the Eastern Cape Frontier War Display • Birkenhead Display • ‘The Cape Regiment in Peace and War, 1781 – 1817’ VISITORS. • 130 482 visitors compared to 126 769 for the FY2010/11 • 22% increase in school visits

  12. OPERATIONAL MANAGEMENT (4) CCB ANNUAL REPORT FY 2011/12 MAINTENANCE AND PRESERVATION. • The Board focused on maintenance of the Castle aligned to national legislation: • In consultation with N DPW • Phase 1 focused on roof repairs, pointing of bastions, repairs to wooden beams and complete renovation of Blocks B and C

  13. CCB ANNUAL REPORT FY 2011/12 STRATEGIC PROFILE

  14. INTRODUCTION CCB ANNUAL REPORT FY 2011/12 • Castle Management Act stipulates three strategic objectives • As a heritage site protected ito the National Heritage Resources Act, Act 25 of 1999, the abovementioned objectives should include the following: • The promotion, development and interpretation of the Castle as a place of education and learning • The development of capacity of the Castle to promote understanding, reconciliation and nation-building • An agreement with the Department of Defence ito the management of the Castle as a defence endowment property

  15. CCB ANNUAL REPORT FY 2011/12 VISION The Castle Control Board strives for the Castle to be a centre of global significance MISSION The Castle Control Board is a service orientated public entity, striving to optimise its tourism potential and accessibility to the public and to preserve and to protect its cultural and military heritage

  16. LEGISLATIVE FRAMEWORK CCB ANNUAL REPORT FY 2011/12 • The Annual Report is submitted in compliance with the following applicable legislation: • Constitution of the Republic of South Africa, Act 108 of 1996 • Public Finance Management Act, Act 1 of 1999 • Castle Management Act, Act 207 of 1993 • Defence Endowment Property and Account Act, Act 33 of 1922 • South African National Heritage Resources Act, Act 25 of 1999 • Treasury Regulations

  17. CORE VALUES CCB ANNUAL REPORT FY 2011/12 • The Board has committed to manifest the following core values: • Service quality and excellence • Operating with honesty and dignity • Diversity in military and cultural history • Added value service • Partnerships and collaborative relationships • Community engagements • Fiscal responsibility, accountability, transparency and sustainability

  18. SUCCESS FACTORS CCB ANNUAL REPORT FY 2011/12 • In order to achieve the mission and vision statements of the Board, it is essential to focus management on a strategic level. The following factors were identified by the Board as fundamental in achieving success during the year under review: • The delivery of the castle as a heritage site • Effective governance and oversight

  19. STRATEGIC ORIENTATION CCB ANNUAL REPORT FY 2011/12 • As a public entity under the Minister of Defence and Military Veterans, critical strategic issues identified by the Ministry was included in the Board’s strategic direction: • Self-sustainability of the CCB and the Castle of Good Hope • Management and maintenance of the Castle as a defence endowment property • Participation in asset management reforms as initiated by National Treasury • Compliance with statutory legislation • Improved maintenance and facilities management

  20. STRATEGIC ORIENTATION (2) CCB ANNUAL REPORT FY 2011/12 • The adoption of sound acquisition and procurement principles • Human Resources development • Sound financial management • The Board strengthened established relationships and sought to develop new relationships in order to support the Minister’s initiatives • Stakeholders represented on the Board shared and assisted in management efforts as part of the strategic objectives of the CCB, as stipulated in the Act

  21. CCB ANNUAL REPORT FY 2011/12 STRATEGIC OBJECTIVE PERFORMANCE

  22. CCB ANNUAL REPORT FY 2011/12 • The Board reported on the four programmes and the respective key performance indicators as developed within the parameters stipulated in the Castle Management Act: • Programme 1: Administration through good Corporate Governance • Programme 2: Preservation, interpretation and showcasing the history of the Castle • Programme 3: Maximising the tourism potential of the Castle of Good Hope • Programme 4: Increased public profile and positive perception across all sectors of the community

  23. CCB ANNUAL REPORT FY 2011/12 ORGANISATIONAL STRUCTURE AND HUMAN RESOURCES

  24. ORGANISATIONAL STRUCTURE CCB ANNUAL REPORT FY 2011/12 • As a public entity, the CCB has the mandate to manage and protect the Castle as a military/cultural heritage asset of the Minister of Defence and Military Veterans and a defence endowment property of the Department of Defence • Functions was divided into two levels of management, namely strategic (the Board) and operational management (Castle Management consisting of SANDF members and civilians remunerated by the Board)

  25. Organisational Structure of the Castle Control Board CCB ANNUAL REPORT FY 2011/12

  26. CCB ANNUAL REPORT FY 2011/12 FINANCIAL PERFORMANCE

  27. AUDIT COMMITTEE REPORT CCB ANNUAL REPORT FY 2011/12 MEMBERS AND ATTENDANCE. • New Audit Committee was appointed with effect from March 2012 due to the termination of the previous Audit Committee Nov 2011 AUDIT COMMITTEE RESPONSIBILITY. • Complied with responsibilities as stipulated in the Public Finance Management Act and Treasury Regulations INTERNAL AUDIT. • Support was provided by Mazars Internal Audit Services

  28. AUDIT COMMITTEE REPORT (2) CCB ANNUAL REPORT FY 2011/12 INTERNAL CONTROL AND ACCOUNTING RECORDS. • The Board’s internal controls, core bookkeeping, record keeping and retention of records are sound • The Auditor-General’s recommendations regarding areas for improvement in compliance, oversight and governance have been noted PERFORMANCE AGAINST PREDETERMINED OBJECTIVES. • The Auditor-General did not assess the Board’s performance against predetermined objectives

  29. AUDIT COMMITTEE REPORT (3) CCB ANNUAL REPORT FY 2011/12 SUPPLY CHAIN MANAGEMENT PRACTICES AND PROCEDURES. • Improvements were noted in the Board’s SCM practices • All non-compliant expenditure was formally noted for application for condonation by Board • No fruitless and wasteful expenditure took place EVALUATION OF FINANCIAL STATEMENTS. • The Audit Committee has complied to all requirements ito evaluation of financial statements, Auditor-General Management Report etc

  30. CCB ANNUAL REPORT FY 2011/12 REPORT OF THE AUDITOR-GENERAL

  31. REPORT ON LEGAL AND REGULATORY REQUIREMENTS CCB ANNUAL REPORT FY 2011/12 In accordance with the PAA and the General Notice issued in terms thereof, the following findings are relevant to performance against predetermined objectives, compliance with laws and regulations and internal controls

  32. PREDETERMINED OBJECTIVES CCB ANNUAL REPORT FY 2011/12 PREDETERMINED OBJECTIVES. • Annual performance report not prepared as required by section 55(2)(a) of PFMA • Corrective Actions • Reports prepared and submitted by management, but due to lack of an approved Strategic Plan and APP, the Auditor-General could not express an opinion • Strategic Plan and APP submitted and approved for the current financial year and will be monitored and updated as determined by PFMA • Quarterly reports of predetermined objectives drawn up and submitted as required and available for audit

  33. COMPLIANCE WITH LAWS AND REGULATIONS CCB ANNUAL REPORT FY 2011/12 AUDIT COMMITTEE. • Audit Committee not appointed for period 1 Nov 2011 to 31 March 2012, as required by Treasury Regulation 27.1.4 BUDGETS. • Accumulation of surpluses without approval of National Treasury in contravention of section 53(3) of PFMA

  34. COMPLIANCE WITH LAWS AND REGULATIONS CCB ANNUAL REPORT FY 2011/12 BUDGETS (cont). • Corrective Actions • Letter addressed to the executive authority in February 2012 for submission to National Treasury through the Department for retention of the surplus. • Board required to manage Castle on an ongoing basis and to do so primarily with accumulated resources

  35. COMPLIANCE WITH LAWS AND REGULATIONS (2) CCB ANNUAL REPORT FY 2011/12 PROCUREMENT AND CONTRACT MANAGEMENT. • Goods and services with transaction value below 500 000 procured without obtaining required price quotations, as required by Treasury Regulation 16A6.1 • Contracts and quotations awarded to bidders that did not score highest points in evaluation process, as required by section 2(1)(f) of Preferential Procurement Policy Framework Act

  36. COMPLIANCE WITH LAWS AND REGULATIONS (2) CCB ANNUAL REPORT FY 2011/12 PROCUREMENT AND CONTRACT MANAGEMENT (cont). • Corrective Actions • Issues raised by the Auditor-General assimilated and addressed by management. The SCM policy being amended to address these issues

  37. COMPLIANCE WITH LAWS AND REGULATIONS (3) CCB ANNUAL REPORT FY 2011/12 EXPENDITURE MANAGEMENT. • Accounting authority did not take effective steps to prevent irregular expenditure as required by section 51(1)(b)(ii) of the PFMA • Corrective Action • Shortcomings in the SCM policy addressed and all procurement being measured in terms of ruling PFMA regulations

  38. COMPLIANCE WITH LAWS AND REGULATIONS (4) CCB ANNUAL REPORT FY 2011/12 ANNUAL FINANCIAL STATEMENTS. • The financial statements not prepared in all material respects in accordance with requirements of section 55(1)(b) of PFMA • Corrective Action • Material misstatements were corrected resulting in the financial statements receiving an unqualified opinion

  39. COMPLIANCE WITH LAWS AND REGULATIONS (5) CCB ANNUAL REPORT FY 2011/12 STRATEGIC PLANNING AND PERFORMANCE MANAGEMENT. • Accounting authority did not submit a strategic plan to executive authority as required by Treasury Regulations 30.1.1 and 30.1.2 • Accounting authority did not establish procedures for quarterly reporting to executive authority in order to facilitate effective performance monitoring, evaluations and corrective action as required by Treasury Regulations 30.2.1

  40. COMPLIANCE WITH LAWS AND REGULATIONS (6) CCB ANNUAL REPORT FY 2011/12 STRATEGIC PLANNING AND PERFORMANCE MANAGEMENT (cont). • Accounting authority did not ensure an effective, efficient and transparent system of internal control regarding performance management as required by section 51(1)(a)(i) of the PFMA • Corrective Actions • A Strategic Plan for FY2012/13 – 2016/17 and APP for FY2012/13 were tabled in Parliament • Quarterly reports are submitted to NT and the executive authority

  41. INTERNAL CONTROL CCB ANNUAL REPORT FY 2011/12 LEADERSHIP. • Accounting authority did not exercise oversight responsibility regarding performance reporting and compliance with laws and regulations • Accounting authority did not implement SCM and performance reporting framework that complies to requirements of PFMA and SCM Regulations, as issued by National Treasury Regulations

  42. INTERNAL CONTROL (2) CCB ANNUAL REPORT FY 2011/12 LEADERSHIP (cont). • Corrective Actions • Shortcomings in the SCM policy being addressed and all procurement done in terms of PFMA regulations and prescripts

  43. INTERNAL CONTROL (3) CCB ANNUAL REPORT FY 2011/12 FINANCIAL AND PERFORMANCE REPORTING. • No functioning system of internal control to prevent occurrence of irregular expenditure for period under review • Financial statements contained misstatements that were corrected. Mainly due to inadequate review by management of information included in statements and incorrect application of accounting standards

  44. INTERNAL CONTROL (4) CCB ANNUAL REPORT FY 2011/12 FINANCIAL AND PERFORMANCE REPORTING (cont). • Corrective Actions • Internal control mechanisms in place were inadequate as they were determined by a SCM policy not fully compliant with the PFMA • Misstatements in the financial statements occurred in the draft, submitted for audit and adjustments were made after deliberation between management and the Auditor-General

  45. INTERNAL CONTROL (4) CCB ANNUAL REPORT FY 2011/12 GOVERNANCE. • Audit Committee not fully functional for year under review, oversight function not performed for period Nov 2011 to March 2012 • Corrective Actions • An Audit Committee re-established and fully functional

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