1 / 38

NRCS Third Quarter Performance Report for 2016-17 Financial Year

Presentation to the Portfolio Committee on Trade and Industry highlighting NRCS' achievements, challenges, and commitments. The report covers strategic goals, legislative mandate, regulated industries, key highlights such as non-compliant products found, progress on commitments, and system improvements.

ulzurrun
Download Presentation

NRCS Third Quarter Performance Report for 2016-17 Financial Year

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Presentation to the Portfolio Committee on Trade and Industry on the NRCS’ Third Quarter Performance Report for the 2016-17 Financial Year Mr Edward Mamadise Acting Chief Executive Officer 14 February 2017 1

  2. NRCS representation  Mr. Edward Mamadise  Acting Chief Executive Officer  Ms. Elmarie Cornelius  Acting Chief Financial Officer  Ms. Meisie Katz  General Manager Foods and Associated Industries  Mr. Bongani Khanyile  General Manager Electro-technical  Mr. Edward Matemba  Manager: Strategy and Risk 2

  3. Scope of Presentation  Status on Portfolio Committee Commitments  Electro-technical LOAs  Progress on IT commitments  Strategic Overview of the NRCS  Strategic Goals, Mission, Vision  Legislative mandate  Regulated industries  Highlights  Performance against Targets  Non-Financial Performance  Financial Performance  Challenges 3

  4. NRCS Strategy, Mission and Vision NRCS Strategic Goals Mission & Vision To develop, maintain and administer compulsory specifications and technical regulations To ensure an optimally capacitated institution Mission Vision • To develop compulsory specifications and technical regulations, and maximise compliance of regulated products and services • A credible and respected regulator for the protection of the public, the economy and the environment To maximise compliance with all specifications and technical regulations To inform and educate our stakeholders about the NRCS 4

  5. Legislative Mandate Mandate of the NRCS is derived from the following Acts. National Regulator for Compulsory Specifications Act (Act No. 5 of 2008) Legal Metrology Act (Act No. 9 of 2014) National Building Regulations and Building Standards Act (Act No. 103 of 1977) The Foodstuffs, Cosmetics and Disinfectants Act (Act 54 of 1972) 5

  6. Industries regulated by NRCS Industry Sector Product regulated / Service rendered Vehicles, Replacements components, Manufacturers Importers and Builders Automotive Chemicals, Materials and Mechanicals Building materials (Cement. Treated timber, Safety glass and other safety glazing material). PPE (Safety Footwear, Swimming aids, personal flotation devices, respirators Electro-technical Electrical appliances and products, Electronic appliances and products Foods and Associated Industries (FAI) Fishery products, canned meat and processed meat Legal Metrology Calibration of measuring instruments, weights, measures and gaming equipment Building Regulations Ensure uniform interpretation of National Building Regulations and Standards Act, administer review Board 6

  7. Key highlights  NRCS conducted 10 694 inspections  5 988 fishery and associated products consignment/productions  4 706 inspections for automotive, electro-technical, chemicals, materials and legal metrology related products. Non- Compliant Products  NRCS found non-compliant products estimated at R69 million.  Automotive – Value of Non-compliance R2m. Brake friction material containing asbestos  CMM – R0,832m. Disinfectants, paraffin stoves plastic bas & swimming aids  Electro-technical – Value of Non-compliance R0,987m. CFL’s, lamp holders, luminaires, cord extension sets, incandescent lamps and adaptors, dishwashers, geysers, cell phone chargers  Foods and Associated Products – Prawns and canned fish - non compliance – mostly pathogenic Vibrio spp and these products were imported. The estimated monetary value of these products is R 47,918,730.00  Legal Metrology - The total monetary value of products tested R 138.6 million. The estimated value of the non-compliant products found is R17.4 million. 7

  8. Progress on Commitments made to the Portfolio Committee 8

  9. BACKLOG SHORT-TERM INTERVENTIONS - UPDATE COMMITMENT Progress to date • Separation of administrative from technical processes Separation of Administrative and Technical processes completed - Implementation ongoing • Develop and piloted risk-based approach Low Risk & Medium Risk: Manual implementation on going using checklists. • Human Resources Recruitment and Selection process underway, incumbents to start beginning April 2017. Interviews conducted 9 and 10 February 2017 • • • • Applications process during intervention period (Dec to Jan 2017) Applications Processed – 6 636 Applications above 120 days - 2 716 LOA issued - 2 075 Since Feb 2017, number of capturers has been increase 3 to 7 to deal with the backlog on LOA issuing stage. Applications cancelled - 145 Applications awaiting capturing – 1 404 Applications unassigned – 73 Applications in progress - 635 Applications pending awaiting industry response – 2 377 • • • • • 9

  10. NRCS Systems Improvements Progress – SHORT TERM INTERVENTIONS • The NRCS appointed a service provider to improve current CRM system for a period of six months. • Business requirements received from business and built into the system • The building was completed and ICT is currently doing quality assurance before testing. • Delays experienced in User Testing which was planned for December 2016 due to user availability. • Testing started on the 23rdJan 2016 after the holiday recess and expected to be finalised by the end of February 2017 10

  11. NRCS Systems Improvements Progress – LONG TERM INTERVENTIONS • Both Modernization and ERP specification were finalized in November 2016 but could not be advertised during December 2016 due to holidays recess period. • The ICT steering committee met on the 17thof January and advised the CEO that the two specifications be combined. The CEO approved. • Both specification were referred back to the BSC in line with SCM requirements. A new committee was appointed to combine and finalize the RFI Bid (BSC sat on the 2ndof February 2017 and document finalized & circulated for inputs to the ARC and ICT Steering committee.) • The RFI will be finalized and advertised before the end of February 2017 11

  12. Project Current Status • The e-EXCO resolved that the committee will now be headed by the CIO assisted by Mr Riyano after the resignation of the CFO. • The e-EXCO also resolved that the project teams be dissolved and the functional areas as identified be dealt with by the main committee. • The CEO emphasized that business must sign off on their business requirements for the project as part of the business reengineering process. • The NRCS will also appoint an external Project Manager to manage the project due to its size and impact. 12

  13. NRCS Systems Improvements Progress – SHORT AND LONG TERM INTERVENTIONS Document NRCS processes and identify areas of Improvement Re-Engineering of NRCS processes in line with NRCS Strategic Objectives & Implement an ICT Solution that meets NRCS requirements Benchmark with similar entities for best practices 01/18 12/17 01/17 08/16 09/16 10/16 11/16 06/17 12/16 10% 6 Months – 18 Months 88% Complete Complete Completed Tasks -Project Approval -Engagement with Local vendors Completed Tasks -Appointment of Service provider (6 Months period) System Optimisation -Fix Errors on system -Allocate user roles System Enhancement -Gather Requirements -Document and Sign off 13

  14. Actual Performance Against set targets (Non-Financial performance) 14

  15. Strategic Goal 1: To develop, maintain and administer compulsory specifications and technical regulations Performance Indicator / Measure Number of new VC’s/Tech Regulations submitted to the dti for approval. Technical Regulations Regulations Quarter 3 Target Quarter 3 Actual Annual Target Variance Reason for Variance Performance 1 VC/TRs submitted to the dti for approval/1st gazetting Inadequate capacity within the Regulatory Research and Development area -75% 10 Compulsory Specifications/ 4 Compulsory Specifications/ Technical 100% None Administer Review Board: % of Review Board decisions finalised within 30 calendar days 100% 100% 15

  16. Compulsory Specifications submitted to the dti  VC 8076, Safety of Lighters ( First gazette)  VC 8054, Chemical Disinfectants ( Final gazette)  VC 8056, Pneumatic Tyres for passenger vehicles and their trailers ( Final gazette)  VC 8059 , Pneumatic Tyres for commercial vehicles and their trailers ( Final gazette)  VC 8013, Hydraulic brake and clutch fluids (Final gazette) 16

  17. SG 2: To maximise compliance with all specifications and technical regulations: Automotive Performance Indicator / Measure Number of Inspections conducted by the NRCS – Automotive, Electro-technical, CMM and Legal Metrology Percentage of Inspections conducted on locally produced, imported and exported canned fishery and meat product consignments fishery and meat products and meat products 5988 Annual Target Quarter 3 Target Quarter 3 Actual Reason for Variance Corrective Variance Action More retail inspections were conducted due to the need to respond to non-compliant products in the marketplace. No Action Required 18 900 4 345 4 706 +8,3% 100% of inspections conducted on all declared produced canned 100% of inspectio ns conducte d on all declared produced canned fishery Inspected 100% of all declared consignme nts and production s Total Inspections conducted No Variance N/A No Action Required 17

  18. SG 2: To maximise compliance with all specifications and technical regulations: Chemicals, materials and mechanicals Performance Indicator / Measure Number of inspections conducted on locally produced Frozen products and fishery and canned meat processing factories and vessels in accordance with the compulsory specification and procedures Percentage of approval applications processed within the set timeframes processed within 120 calendar days 120 calendar days within 120 calendar days Annual Target Quarter 3 Target Quarter 3 Actual Variance Reason for Variance Corrective Action 2 135 inspections 511 inspection s 529 3,5% Land based facilities are inspected by the NRCS on request by the Industry. The number of requests received in this quarter were higher than expected. No action necessary at this stage. 90% of all approval applications 90% of all approval applicatio ns processe d within 47% (1 742 out of 3 739) of all approval application s processed -43% 1) Backlog within the Electro- technical domain Implemented overtime Appointed new employees 2) Inadequate Capacity 3) Applications submitted without all required documents or unacceptable Test Reports Utilizing field inspectors to eradicate the backlog Implemented the 30 days cancellation policy for applicants who fail to respond to NRCS findings 4) Delays in implementing dormant VCs within CMM 18

  19. Breakdown of Approvals per Industry (Business Unit) Opening Balance received during the quarter within 120 days Applications Processed and Finalised Processed and Finalised over days Total Approvals Finalised Applications carried over to Quarter 4 % 120 Days Within 120 Legal Gaming Applications Metrology 102 356 250 0 250 208 100% Legal Type Approvals Metrology 73 49 58 1 59 63 98% 423 54 38 70 108 369 35% CMM Approvals Automotive Approvals* 1802 1037 888 31 919 1882 97% Electro-technical Approvals** 5170 2919 508 1895 2403 5583 21% 7570 4415 1742 1997 3739 8105 47% Total 19

  20. SG 3: To inform and educate our stakeholders about the NRCS Performance Indicator / Measure Number of stakeholder consumer education events or campaigns Annual Target Quarter 3 Target Quarter 3 Actual Performance Reason for Variance Variance +33% 12 NRCS consumer education events or campaigns 3 NRCS consumer education events or campaigns 4 Consumer Awareness Campaigns were conducted The variance was due to the Poultry workshop that was organised by the Department of Agriculture, Forestry and Fisheries 20

  21. Strategic Goal 4: To ensure an optimally capacitated institution Performance Indicator / Measure Percentage (%) of vacancy rate Quarter 3 Target Quarter 3 Actual Performance Variance Reason for Variance Corrective Action Annual Target 6% 9.62% vacancy rate as of 31December 2016 . Resignations and retirements coupled with a moratorium on filling of vacancies as a measure to manage Human Resources costs MSP was referred back to take into consideration the need to modernize the NRCS Filling at least 5 vacant posts during Quarter 4 - Developed, approved and implemented ICT Master System Plan (MSP) Develop and approve ICT Master System Plan Draft concept for MSP finalised Draft Master Systems Plan (MSP) developed and circulated for IT Steering Committee in January 2017 21

  22. Human Resources  Staff Complement – Total 300 comprising of 293 permanent staff and interns.  One appointment was made during the quarter  Five terminations Three resignations One dismissal One by mutual separation  Vacancies  29 budgeted vacant positions  Vacancy Rate 9,62%  NRCS prioritising the appointment of the Deputy CEO and CFO  Staff training  NRCS awarded bursaries worth about R370 000 to employees commencing studies at various higher institutions of learning in 2017 calendar year 22

  23. Financial Performance 23

  24. Financial Overview: Income Statement Q1 Q2 Q3 YTD Income statement Budget 42,959 25,926 3,125 14,024 11,915 1,250 - 73,274 Actual Budget 137,716 Actual 159,523 Budget Actual Budget 247,546 Actual 241,007 Full year Budget Transfers from the dti Interest Income Levies from Compulsory Specs Services Levy Audits Other Income Total Income 43,459 900 77,028 12,854 1,250 2,225 60,492 5,321 72,798 12,218 8,184 510 - - 86,418 9,011 110,166 37,652 3,750 86,418 12,558 94,613 36,880 10,151 387 86,418 13,600 181,178 50,205 5,000 38,201 374,603 2,368 6,791 13,711 4,985 19,114 12,882 1,250 (1,676) 36,555 4,870 15,024 10,950 1,967 - (96) (27) 549 48,699 32,785 Compensation of Employees Goods and Services Total Expenditure 64,708 27,862 92,571 57,233 13,877 71,110 69,130 22,136 91,266 64,271 14,866 79,137 69,246 22,719 91,965 59,167 16,210 75,376 203,084 72,717 275,802 180,670 44,953 225,623 270,778 103,669 374,447 Surplus / (Deficit) (19,297) (22,411) 46,450 80,387 (55,409) (42,592) (28,256) 15,384 156 24

  25. Financial Overview: Revenue 25

  26. Financial Overview: Revenue 26

  27. Financial Overview: Expenditure 27

  28. Financial Overview: Expenditure 28

  29. Financial Overview: Expenditure 29

  30. Progress on Revenue qualification 30

  31. Recap: Revenue Qualification Grap 23 – Non-exchange Revenue NRCS Act, NRCS Regulations Revenue recognition based on a taxable event Systems and controls Taxable event is the import / manufacture of regulated products Integrated information Taxable event different from the timing of revenue Systems and processes that allow for timely recognition of revenue Integration of information internally (Surveillance, Approvals and Revenue) Unclear timing of revenue Weak on punitive measures Third party integration 31

  32. Recap: Revenue Qualification Plan Internal control improvements Legislative options NRCS Modernisation Legal opinion re: NRCS Act • ERP system implementation • Business process re-design • Amendment to the Act, or • Engage the dti on the NRCS Act SARS Collaboration LOA Conditionality • Information sharing and system integration • Quarterly volumes forecast • Introduce LOA validity period 32

  33. Revenue Qualification Plan: Progress Plan Progress to date • NRCS Modernisation • ERP system implementation • Business process re-design Request for information has been revised to ensure full integration across systems within the NRCS Implementation strategy was discussed and agreed with ICT Steering Committee and Audit and Risk Committee • • • SARS Collaboration • Information sharing and system integration HSS codes project with SARS was finalised Way forward: Roll out to all NRCS regulated commodities (Planning phase) to be combined with the modernisation project • Legal opinion re: NRCS Act • To determine if the NRCS Act needs to be amended the dti has indicated that changing the NRCS Act and Regulations will be a lengthy process, therefore the NRCS will proceed with implementing business process re-design based on current legislation • • LOA Conditionality • Quarterly volumes forecast • Introduce LOA validity period In the process of investigating mechanisms to operationalise Pending resolution of the LOA backlog 33

  34. Challenges 34

  35. Audit findings 35

  36. Key challenges  Operational challenges  Inadequate capacity and relatively unstable human resource environment  The application and regulation of products covered under Compulsory Specifications that are outdated.  High transportation and storage costs for confiscated goods.  Long turnaround times and capacity constraints at the test houses compromises the effectiveness of the Regulator  Border enforcement challenges:  Inadequate information supplied on the bill of entry and shipping manifests  High number of abandoned goods at Ports of Entry which results in high transportation and storage costs after confiscation.  Revenue challenges  Funding and Expenditure: NRCS performing mandates that are not fully funded, reduction in funding in the current and prior year and relatively high employee costs.  Collection dependent on the industry co-operation  Declining economic activity impacting revenue collection 36

  37. Abbreviations and Acronyms  AG – Auditor General  CMM – Chemicals, Materials and Mechanical  DAFF – Department of Agriculture, Forestry and fisheries  FY – Financial year  LOA – Letter of Authority  NBR – National Building Regulations  NCC – National Consumer Commission  SABS – South African Bureau of Standards  SAPS – South African Police Services  SARS – South African Revenue Services  TR – Technical Regulation  VC – Compulsory Specification  YTD – Year to Date 37

  38. Thank You 38

More Related