a presentation to the portfolio committee on women parliament of rsa n.
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A presentation to the Portfolio Committee on women – Parliament of RSA

A presentation to the Portfolio Committee on women – Parliament of RSA

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A presentation to the Portfolio Committee on women – Parliament of RSA

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  1. A presentation to the Portfolio Committee on women – Parliament of RSA Quarterly Reporting – 09 September 2014 Session

  2. Introduction • In line with the Constitutional principles and values of openness and accountability, • The PFMA bolstered further by provisions which under chapter 1 states that the object of the Act is to secure transparency, accountability and sound management of the resources • Against the funds appropriated by Parliament in terms of the Appropriation Act of 2013/2014 and the Current financial year, the Commission presents spending and financial management activities for the fourth quarter (previous year) and 1st quarter (2014/2015)

  3. Contents • Financial performance and position for the quarter ending 31 March 2014 • Financial performance and position for the quarter ending 30 June 2014 • Other general financial management matters

  4. Financial performance and position for the quarter ending 30 June 2014

  5. The Net Results – Overview of financial performance Q4/2014 • In this quarter, all income receivable from National Treasury for R15, 8 million was transferred. • Other income from sundry sources was recorded to a total amount of R244, 723 , of which R220, 0553 is interest income from positive cash balances held in the current bank account of the CGE • Total expenses were R17, 4 million outpacing an average quarterly spending level of R15m as recorded during the financial year. The increase in spending is explained by and large by heightened activities undertaken in the 4th quarter to fulfil APP target carried over from previous quarters. In the main, the completion of research and Legal department’s reports contributed to the increase. • It is therefore that for the three months period to 31 March 2014, a deficit of R1,4m was recorded • In addition, during this quarter accounting adjusting entries were effected against the income contributing to a skewed (inconsistent with an average level from previous reporting quarters)

  6. Consolidated operational budget – 2013-2014 • Core program: from the salaries bill of R45 m, 55% is earmarked for main program (R25m) • Overall COE  (71% of total budget), of which 39 % is spent on main program • G&S  (29% ) where main program constitutes 41% • Main program makes up 51% of total budget

  7. The Net Results – Overview of financial performance Q4/2014 • The results for the full financial year reflect a net surplus of R2m (or 3 % of the allocation/budget). Other income mainly from interest received contributed to the surplus by R876, 654 whilst the remaining under-expenditure is attributable to savings from vacant positions • During the financial year, under-expenditure on salaries(Compensation of Employees) of R4,6 m was utilised to defray spending pressures on goods and Services. This reallocation or adjustment to the budget were duly approved by the Accounting Officer and Executive Authority together with mid-term results

  8. Key Areas Income – Exceptions to Budgets Q4/2014 • During the financial period ending 31 March 2014, allocations approved by National Treasury were transferred to a total amount of R63, 1 million. • There was additional income of R876 654 resulting from interest received and other sundry sources (SETA, Tender Docs selling). This is by and large the major contributor to the reported surplus of R2m for the 2013/2014 period. • Revenue for the full twelve months’ period therefore stood at R63, 96 million , 1% above the allocation by NT

  9. Actual v Budget - Expenditure Q4/2014 Since virements were made and approved during the course of the year, no material variances exist between actual expenditure and adjusted budget

  10. Spending details – 2013/2014 85% of expenditure arose from COE (64%), Travel & accommodation(13%) and Professional Services (Auditing, consulting by third parties) at a combined 8% contribution to total spending

  11. Financial Position – Status as at 31 March 2014 • There are no solvency or liquidity challenges, the financial position remain strong . Planned recapitalization projects will however diminish the liquidity strength in the near term • Non-current asset base at net carrying amounts estimated at R1, 5m compared to R1,7 m as at 31 March 2013. Net of Depreciation at R640, 000 and new assets purchased for R374,000 • Current assets mainly cash (R19,4 m) more than 3 folds above the net asset situation and covers liabilities by more than 27% (R19, 4m v R15,3m) • Included in cash balance, is the surplus to be utilised for the recapitalization of CGE assets (R8,5 m conditionally approved Treasury) • Current liabilities R15,3 m (minus R8,5 m) = R7 m (Exchange R2 m, remainder is due to staff and payroll creditors(SARS, AF)

  12. Financial performance and position for the quarter ending 31 March 2014

  13. Financial information...Q1/2015 • A surplus was reported for the period at R838k against a budget deficit for Q1 of R1,4 m. The deficit was anticipated because budget estimate (APP scheduling + admin – audit fees) exceeded the fixed NT transfer of R16, 8 m • The surplus can be explained by COE under-spent due to vacancies • Quartely statements - Q1 2015x.doc • Plenary q1 2015.11.pdf • Plenary q1 2015.12.pdf

  14. Other general financial management matters

  15. Risk Management • During the quarter under review, management conducted workshops to identify and assess both strategic and operational risks affecting the CGE’s operations. The Risk register has accordingly been updated where corresponding Risk Treatment action plans were devised • A risk Committee Meeting was held subsequently to review and approve plans. There were adjustments recommended by the Committee subject to ratification by the Committee set to sit during the 1st Quarter of 2014/15 • There has not been any significant or material change to the risks inherent within the CGE operation. It is therefore that the previous action plans are still relevant and their implementation are practically mitigating the residual risks as updated. The internal audit planning were also based on this updated risk assessments

  16. Risk management - Dashboard

  17. Fraud, Contingencies and litigation • No instances of fraud were detected or reported to management during the period under review • No new litigation matters. CGE v Gasa and Axolute v CGE are the only litigation matters still to go on trial or to which the CGE is exposed • A contingent asset in the form of a receivable is specifically disclosed in the AFS and been followed up with the insurer

  18. Investment activities underway • Fleet acquisition – Fleet replenishment by 11 vehicles to the total cost of R4,3 m. These were procured through a National treasury supported transversal contract. Delivery expected during the third quarter of the current financial year • IT infrastructure – Feasibility evaluation completed, ICT strategy and implementation being finalised internally. The conceived project plan is estimated to cost R4, 2 m • Assets Disposal – Majority (>75%) of the CGE assets are both economically and technologically obsolete and will therefore be retired where minimal proceeds are anticipated. The disposal shall be i.t.o CGE’s policy underpinned by the principles of competiveness and transparency • The capital expenditure is funded by a special /conditional grant from National treasury – R8,5 m .

  19. Audit status Unfavourable Favourable 2013/2014 unpublished as restricted by PFMA.

  20. Thank you Q&A