RESTRICTED

Department of Defence Department of Defence Annual Report Annual Report

FY2010/11FY2010/11

Presentation Presentation to theto the

PCD&MVPCD&MV

18 October 2011

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AimAim

To present an Achievements of the Department of Defence (DOD) Annual Report FY2010/11

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SScopecope

Achievements

Defence Outcome and Outputs

DOD Annual Report Structure

DOD Appropriation Statement

Programmes and Subprogrammes

Achievements and Challenges

Selected performance indicators

Enterprise Risk and Mitigation Strategies

Questions and Discussion

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AchievementsAchievements The Department of Defence (DOD) Annual Report FY2010/11

accounts for the performance against the approved DOD Strategic Plan for the period 01 April 2010 to 31 March 2011.

The DOD derives its mandate primarily from Section 200(2) of the Constitution of the Republic of South Africa, 1996 (Act 108 of 1996). This mandate is given substance by the Defence Act, 2002 (Act 42 of 2002), the White Paper on Defence (1996), the Defence Review (1998) and delegated legislation.

The outcome of Defence has been fully aligned with government policy on defence and enhances national, regional and global security goals through the existence of combat-ready deployable defence capabilities.

The DOD comprises of the SANDF and Def Sec which are established in terms of Section 202 and 204 respectively of the Constitution and the Defence Act 2002 (Act 42 of 2002).

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Defence Outcomes and OutputsDefence Outcomes and Outputs Defence Outcome

Effective defence for a democratic South Africa

Defence Outputs The provision of defence capabilities that can respond to the needs

of South Africa within the evolving policy and national priority trajectory that characterise a developmental state

Landward defence capabilities Air defence capabilities Maritime defence capabilities Military health support capabilities Defence commitments, which include:

operations that are ongoing in nature, and for which plans and financial provision can be made in advance;

operations that must be executed during the year and, if unforeseeable, for which no provision has been made; and

Joint interdepartmental and multinational exercises required to prepare forces for operations.

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Defence Outcomes and Outputs (cont)Defence Outcomes and Outputs (cont) Defence Outputs (Cont)

Defence diplomacy, which includes: the deployment of Defence Attachés; the servicing of defence-related Memoranda of

Understanding (MOUs); andparticipation in the defence structures of the UN, AU and

SADC. The provision of Defence-related policy and Ministerial advice Cryptographic security services for Government departments The National Codification Bureau The provision of appropriate framework for sound policy,

direction and advice and the systemic monitoring and evaluation thereof

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Annual Report StructureAnnual Report Structure Foreword by the Minister

Part 1: Information on the Ministry

Chapter 1: The Ministry

Strategic Achievements by the Sec Def

Part 2: Strategic Direction and Defence Objectives

Chapter 2: Strategic Direction

Part 3: Programme Performance

Chapter 3: The Defence Vote

Chapter 4: Administration

Chapter 5: Force Employment

Chapter 6: Landward Defence

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Annual Report Structure (Cont)Annual Report Structure (Cont)

Chapter 7: Air Defence

Chapter 8: Maritime Defence

Chapter 9: Military Health Support

Chapter 10: Defence Intelligence

Chapter 11: General Support

Part 4: Organisational Structure and Human Resources

Chapter 12: Organisational Structure & Human Resources

Appendices

Part 5: Financial Performance

Part 6: The Department of Military Veterans – separate document

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DOD Appropriation StatementDOD Appropriation StatementFY2010/11FY2010/11

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Appropriation Statement for the year ended 31 March 2011

Note:

99% of the Defence budget was spent.

Provision made in the Actual Expenditure is an amount of Rm128,4 for the partial write-off of unauthorised expenditure of previous FY's.

Rm0,220 under expenditure is a transfer payment not utilised.

Programme

AdjustedAppropriation

Total Virements Final Approp Actual

Expenditure Variance

R'000 R'000 R'000 R'000 R'000 1 Administration 3,417,210 35,705 3,452,916 3,452,916 - 2 Landward Defence 9,009,567 286,001 9,295,568 9,295,568 - 3 Air Defence 5,536,418 -47,482 5,488,936 5,488,936 - 4 Maritime Defence 2,358,300 -8,384 2,349,916 2,349,916 - 5 Military Health Support 3,049,570 100,764 3,150,334 3,150,114 220 6 Defence Intelligence 656,612 -22,759 633,853 633,853 - 7 General Support 4,132,717 -327,106 3,805,612 3,805,612 - 8 Force Employment 2,282,197 -16,741 2,265,457 2,265,457 -

30,442,591 0 30,442,591 30,442,371 220 TOTAL

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Appropriation Statement for the year ended 31 March 2011

Economic classification Final Appropriation

ActualExpenditure

Variance

R'000 R'000 R'000 30,442,591 30,442,371 220

Current payments 25,654,799 25,654,799 - Compensation of employees 16,597,098 16,597,098 - Goods and services 8,890,703 8,890,703 - Transfers & subsidies 3,888,238 3,888,018 220 Departmental agencies & accounts 3,024,728 3,024,728 - Public corporations & private enterprises 737,510 737,510 - Non-profit institutions 5,407 5,187 220 Households 120,592 120,592 - Payment for capital assets 899,554 899,554 - Buildings & other fixed structures 251,203 251,203 - Machinery & equipment 581,388 581,388 - Biological or cultivated assets 71 71 - Software & other intangible assets 132 132 - Specialised Military Assets 66,760 66,760 -

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Programme 1: Administration: SubprogrammesProgramme 1: Administration: Subprogrammes

Ministry

Departmental Direction

Secretary for Defence

Government Information Technology Officer (GITO)

Policy and Planning

Defence Policy, Strategy and Planning (DPSP)

Military Policy, Strategy and Planning (MPSP)

Corporate Staff Office

Financial Services

Human Resource Support Services

Legal Services

Inspection Services

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Administration: Subprogrammes (cont)Administration: Subprogrammes (cont)

Acquisition Services

Defence Matériel

Defence Supply Chain Integration

Communication Services

SANDF Command and Control

Religious Services

Defence Reserve Direction

Defence Foreign Relations

Chief of Defence International Affairs

Chief of Defence Foreign Relations

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Achievements

MOD&MV focussed on the DOD contribution to; peace and security in the region, continent and internationally through

bilateral and multilateral engagement and SANDF deployments. internal deployment of the SANDF in support of other Government

Departments, 2010 FIFA Soccer World Cup, xenophobia, strikes etc. preparedness of the SANDF to effectively undertake the function of

Border Safeguarding. the establishment of the Department of Military Veterans.

Focussed on a clean audit.

Enhanced good working relations with Parliamentary committees such as the PCD and SCOPA.

Subprogramme: MinistrySubprogramme: Ministry

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Achievements (cont)

Ensured promulgation of the Defence Amendment Act 22 of 2010 and Military Veterans Bill. These brought resolution to inter alia; the obligation to serve for the Reserve Force, the establishment of a permanent DFSC, and the costing of the Military Veterans’ benefits.

Directed the following, inter alia; the Review of Defence Policy, the repositioning of the Defence Secretariat, the National Youth Service (NYS) programme, and the repositioning of the Defence Industry.

Subprogramme: Ministry (cont)Subprogramme: Ministry (cont)

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Achievements

Participated in defence diplomacy bilateral and multilateral engagements .

Ensured effective participation in the Cluster engagements, in particular the ICTS and JCPS as well as other Clusters.

Ensured adherence to financial prescripts and national planning prescripts enhanced governance and compliance.

Ensured the functioning of the Department of Military Veterans by providing expert support.

Obtained Cabinet approval for the NSF Pensions as contemplated in the Bill.

Subprogramme: Departmental Direction (Sec Def)Subprogramme: Departmental Direction (Sec Def)

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Subprogramme: Departmental Direction (Sec Def) Subprogramme: Departmental Direction (Sec Def) (cont)(cont)

Achievements (cont)

Worked towards ensuring a reduction of audit qualifications with a special focus on the remaining asset management qualification (Op Clean Audit).

Ensured the successful separation and the tabling of the DOD Strategic Plan and APPs for 2012 for the Secretariat and SANDF.

Contributed to Government initiatives on job creation with 5700 job opportunities created within the MSDS programme.

Developed options in consultation with stakeholders for the repositioning of the Defence Secretariat and the Defence Industry.

Ensured approval of the Military Ombudsman Bill during November 2010.

The MOUs for the two peace support missions (DRC and Sudan) and three General Military Assistance missions (DRC - Op TEUTONIC, CAR - Op VIMBEZELA, Mozambique - Op COPPER) were concluded.

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Subprogramme: Subprogramme: Departmental Direction (Departmental Direction (GITO)GITO) Achievements

Promulgated the Defence Information Strategy and the ICS Policy.

The Information Strategy control plan was developed to improve the effectiveness and interoperability of the Information Systems of the DOD.

The following standards, principles and guidelines were developed to enhance interoperability external to the DOD: Defence Information and Communication System Standards on Public

Key Infrastructure and De-Militarised Zone (DMZ). Defence Data and Information Standard for Data warehouse. Strategic Study on the use of Virtualisation Technologies.

Discussions are underway for the lifting of the moratorium on the development of the DOD’s unique logistics systems .

Continued oversight of the integration of DOD ICT Systems.

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Subprogramme: Subprogramme: Departmental Direction (Departmental Direction (GITO)GITO) Challenges

Current DOD ICT inventory is not integrated and has a high level of obsolescence.

Lack of Financial Resources for a big bang approach in IT Systems Renewal.

Lack of critical ICT Skills in the department and within the Service Providers (e.g. SITA).

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Subprogramme: Policy and Planning (DPSP)Subprogramme: Policy and Planning (DPSP)Achievements

Ensured that Policy, Strategic Planning, and Reporting were done according to governing prescripts.

Developed the Strategic Planning Framework (SPF) for the development of the Strategic and Annual Performance Plans.

Successfully separated the DOD plans into separate plans for the SANDF and the Def Sec and tabled in March 2011 respectively.

Coordinated DOD inputs and participation in the Cluster engagements, in particular, ICTS and JCPS Clusters.

Developed the Enterprise Risk Management (ERM) Framework for the DOD.

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Subprogramme: Policy and Planning (DPSP)Subprogramme: Policy and Planning (DPSP)Achievements (cont)

Provided secretarial services to the National Conventional Arms Control Committee (NCACC) and its subcommittees. 6 587 permits were issued.

Consulted with the Presidency on the drafting and provision of deployment authorisation papers.

Developed the Defence Strategy Conceptual Framework which has been handed to DRC for further work.

Played a critical role in the development of inter alia; the NYS programme, the Maritime Strategy, the policy on the Military Ombud, and the Dept Mil Vet strategic plans.

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Subprogramme: Policy and Planning (DPSP) (cont)Subprogramme: Policy and Planning (DPSP) (cont)Achievements (cont)

Promulgated the Business Process Management DODI that enhances integrated management systems in the DOD.

Challenges

Human resources capacity constraints.

Filling of vacant posts and the utilization of the Reserves.

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Subprogramme: Subprogramme: Policy and Planning (Policy and Planning (MPSP)MPSP)

Achievements

Developed the Commanders Appreciation and Guidelines, the SANDF Strategic Plan and Annual Performance Plan (new format).

Defined the SANDF Readiness Index Model User Requirement and produced the preliminary Readiness Index Strategy.

Developed the DOD environmental analysis.

Coordinated the development of DOD rectification plans in response to the findings of the Interim National Defence Force Service Commission.

Coordinated and drafted the Budgetary Task Team investigation and report on efficiency and effectiveness in the DOD.

Coordinated the SANDF planning in response to the MOD&MV priorities.

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Subprogramme: Corporate Staff OfficeSubprogramme: Corporate Staff Office

Achievements

Management of Specialist Advisory Team (Team BULISA) in the DRC.

Performance management of the Reserve Force Council.

Command and control of DOD HQ unit supporting services.

Chief Corporate Staff attended three bilateral and multilateral Defence Committee Meetings.

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Subprogramme: Financial ServicesSubprogramme: Financial Services

Achievements

Worked towards ensuring that the DOD complies with the set financial deliverables Focused on the continuous improvement of financial management services in order

to reduce audit qualifications. Focused on refining departmental processes, systems and policies with a view to

aligning them with the Public Finance Management Act (PFMA) regulatory framework.

Ensured that 99% of the Defence budget was spent and focussed on improving revenue management by enhancing existing policies and procedures.

Challenges

Migration from outdated FMS to IFMS.

High staff turnover.

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Subprogramme Human Resource Support ServicesSubprogramme Human Resource Support ServicesAchievements

Hosted the annual DOD Gender Conference and reported on the progress made in implementing the Gender Mainstreaming Action Plan. Research findings on the status of women in the DOD sixteen years into Democracy was reflected upon.

The revised Non-Statutory Forces (NSF) Pension Dispensation was approved by Cabinet. It makes provision for the 100% recognition of the service period of former NSF members without a requirement to contribute 5%.

Joint task team is implementing the roll-out of the Pension Restructuring Project.

Supported the Interim National Defence Force Service Commission (INDFSC) and crafted a programme of action on the following activities: Support to the process of finalising permanent organisational structure for the DFSC Final report presented to the MOD & MV and to the JSCD. Visited the external deployments to further evaluate and gather information from deployed

members regarding remuneration and conditions of service on deployment. Currently supporting the finalisation of the draft Defence Force Service Commission

Regulations.

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Subprogramme: Human Resource Support Services Subprogramme: Human Resource Support Services (cont)(cont)

Challenges

Performance Agreement and Financial Disclosures – Non Compliance with the policy. The challenge with non-adherence to policy with signing of performance agreements and submitting financial disclosures will be addressed as follows: An instruction to SMS members informing them of the due date for the submission of

Performance Agreements and Financial Disclosures will be sent each year on 31 January.

Presentation will be made to top management in early March each year.

Introduction of SMS communication system to remind top management will be implemented with effect from 30 November 2011.

Enforcement of Financial Disclosures for people outside the SMS system. In order to address this challenge, the DOD is developing a policy which will force all members of the DOD to declare their financial conflict of interest. The policy will be finalised by 31 December 2011.

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Subprogramme: Human Resource Support Services Subprogramme: Human Resource Support Services (cont)(cont)

Challenges (Cont)

Employees who perform remunerative work outside the DOD without authorisation. The challenge with employees performing remunerative work outside the DOD will be addressed as follows:

A database of all employees performing remunerative work outside the DOD has been established and will be maintained on the PERSOL system.

A policy on remunerative work outside the DOD is currently under review to address delegation of authority for authorising work outside the DOD.

Infrastructure shortcomings. Owing to serious infrastructure shortcomings at Personnel Services School accreditation as a training facility could not be obtained and the accredited curricula for the training of Human Resource Practitioners could not be implemented.

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Subprogramme: Legal ServicesSubprogramme: Legal ServicesAchievements

Provided law support and legal advice for external and internal operations, exercises, ad hoc deployments/investigations, operational law training lectures and refresher law training sessions.

Military law support and legal advice rendered with the drafting of 17 bilateral and multilateral Memoranda of Understanding.

Attended to 1 305 of 1 312 requests for legal advice. Court of Military Appeals finalised 42 cases that were set down for hearing. Military Prosecution received 29 dockets and five internal Boards of Inquiry. Defence Amendment Bill assented to by the President on 09 Dec 10. School for Military Justice received full accreditation from the SA Qualification

Authority as a service provider for three subjects.

Challenges

Serious decline in the allocated operating budget due to the expansion of the human resources budget.

Lack of posts in operations environment. Shortage of trained Military Law Practitioners.

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Subprogramme: Inspection ServicesSubprogramme: Inspection Services

Achievements

Established a nodal point for the Fraud and Corruption Forum.

Finalised the Fraud Prevention Plan.

Retained certification of ISO 9001: 2008 (Quality Management certification).

SADC Seminar was hosted in Cape Town where the Division presented a draft Inspection Manual.

All Commando Units and Group Headquarters were successfully closed and de-activated (except for four in process) from the system.

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Subprogramme: Acquisition Services (Defence Matériel)Subprogramme: Acquisition Services (Defence Matériel) Achievements

Focus for the year was firstly to finalise the SDPs and secondly to acquire new equipment and upgrade old equipment in accordance with the priorities.

Some of the equipment and systems acquired played an integral part in the support to the successful 2010 FIFA World Cup tournament. Technology development support to Chemical Defence ensured that adequate decontamination support measures were in place for the 2010 FIFA World Cup event. Similarly, some of the acquired / upgraded systems will play an integral role in border safeguarding (Op CORONA).

Continued to support the Sec Def and the MOD with effective governance of capital acquisitions.

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Subprogramme: Acquisition Services (Defence Subprogramme: Acquisition Services (Defence Matériel) (cont)Matériel) (cont)

Project-related Achievements

Landward Defence Acquisition. The acquisition of the 60 mm long range mortar for the SA Army has been completed and this weapon system will be commissioned in FY2011/12.

Air Defence Acquisition. A further 4 single seat Saab Gripen Advanced Light Fighters were delivered.

Naval Acquisition. Both the SA Navy’s Strategic Defence Package programmes (4 Meko 200 Frigates and 3 Class 209 Type 1400 Submarines) have entered the closing phase.

Defence technology. Development into high energy lasers and their application has produced world first outcomes. In addition the progress with the integrated maritime picture will enhance anti-piracy and anti-poaching patrols.

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Subprogramme: Acquisition Services (Defence Subprogramme: Acquisition Services (Defence Matériel) (cont)Matériel) (cont)

Challenges

Acquisition approval process is cumbersome and needs refinement. This is in process.

Underperformance within the defence industry remains complex and a challenge with respect to timeous delivery.

Lack of an asset register for intangible capital assets (Intellectual Property). An intangible capital asset register has been established and under configuration.

Lack of policies, procedures and project plans on intangible capital assets. The policy on intangible capital assets is currently in a draft format and is due for completion by end of 2011 financial year.

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Subprogramme: Subprogramme: Acquisition Services Acquisition Services ((Defence Supply Chain integration)Defence Supply Chain integration)

Achievements

Successfully hosted the 2011 Defence Industry Day to further enhance and promote DOD relationships in support of local Industry. Defence Industry Day is fast transforming into a national event enjoying widespread attendance by government departments.

Supported DOD joint operations by concluding contracts in support of forces deployed on missions. Contracts included:

Termination of accommodation contract for Ops SADAIT team. Contract for medical air evacuation of DOD members who may need

medical attention. Contract for accommodation of Ops VIMBEZELA members.

Customised the National Treasury Instruction (issued Sept 2010) in line with DOD supply chain procedures that dealt with amended guidelines regarding the use of functionality as a criterion for evaluation of bids.

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Subprogramme: Subprogramme: Acquisition Services Acquisition Services ((Defence Supply Chain integration) (cont)Defence Supply Chain integration) (cont)

Challenges

The alignment of Supply Chain Integration Business processes and governance prescripts have highlighted certain structural defects and capacity constraints. This is being addressed through a scientific analysis and evaluation.

Lack of capacity to review, revise and incorporate the latest Supply Chain Management (SCM) legislation into DOD policies to ensure materiel compliance. A DOD work group is currently revising the DOD procurement policy. This task is scheduled for completion by Dec 2011. The workgroup is being capacitated by utilising Reserve Force members and appointing interns.

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Subprogramme: Subprogramme: Acquisition Services Acquisition Services ((Defence Supply Chain integration) (cont)Defence Supply Chain integration) (cont)

Challenges

The AG findings on SCM (procurement and contract management) matters dealt with:

Goods and services >R500 000 not procured by means of a competitive bidding process in accordance with TR16A6.4.

The current DOD procurement policy is being amended to ensure that all requirements >R500 000 are advertised in the Government Tender Bulletin. Only in exceptional cases will TR16A6.4 be utilised and approval will be granted by the Accounting Officer.

Awards were made to suppliers who did not declare their employment by the state or their connection with a person employed by the state.

All DOD procurement entities now utilise the new revised National Treasury SBD 4 “Declaration of Interest” form as a mandatory document when soliciting proposals from bidders. This will compel bidders to disclose all interests and relationships.

Instances were identified where senior managers did not disclose their business interests in a supplier to the department and to the executive authority.

HR acknowledges this finding. All disclosures have been obtained and is with the Executive Authority for signature. HR will also make the list of those members with interests available to the procurement entities so that the database can be updated.

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Subprogramme: Subprogramme: Acquisition Services Acquisition Services ((Defence Supply Chain integration) (cont)Defence Supply Chain integration) (cont)

Challenges

The AG findings on SCM (procurement and contract management) matters dealt with (cont):

In some instances SCM officials and/or other SCM role players and those whose close family members had business interests in contracts awarded by the department failed to disclose their interests and in some instances participated in the process relating to the award.

In order to address this challenge, the DOD is developing a policy which will force all members of the DOD to declare their financial conflict of interest. The policy will be finalised by 31 December 2011. All SCM officials involved in procurement will also be forced to sign the Code of Conduct for SCM officials which requires them to remove themselves from processes in which they have a conflict of interest.

Some employees performed remunerative work outside their employment in the department without written permission from the relevant authority as per the Public Service Act and DOD Instruction PERS No 4/99 dated 22 December 1999.

HR acknowledges this finding. HR is correcting this by firstly reviewing the policy to ensure that authority for remunerative work is only approved by the Chief of Service. Chiefs will also compile a database of all employees granted authority and this will be elevated to the C SANDF for his members, Sec Def for other employees and this will eventually be given to the Minister. This will also be captured on PERSOL and a control code will be allocated.

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Subprogramme: Communication ServicesSubprogramme: Communication Services

Achievements

Defence TV won the first prize and received the coveted Chief of Staff of the Italian Defence Force Award, an international film award, for “Cheetah farewell”.

Continued to enhance the good working relationships with the media houses.

Communication strategy developed.

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Subprogramme: SANDF Command and ControlSubprogramme: SANDF Command and Control

Achievements

Two Peace Support Operations (PSOs) were conducted under the signed Memoranda of Understanding (MOUs) in the DRC and Sudan.

Three General Military Assistance Operations were conducted under the signed MOU with the DRC - Op TEUTONIC, CAR - Op VIMBEZELA, Mozambique - Op COPPER.

Three internal operations were conducted. (CORONA, KGWELE and BATAII)

Advanced relations with foreign countries and Multilateral organisations (AU/SADC).

Monthly participation in the Clusters and FOSAD.

Relevant and timeous military advice to the MOD&MV.

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Subprogramme: Religious ServicesSubprogramme: Religious Services

Achievements

Ten Chaplains deployed externally in all DOD deployment missions and both Regular and Reserve chaplains deployed on the border.

Assistance provided to Mozambique, Lesotho and Namibia Defence Forces to establish own Chaplain Services.

Support to Marion Island, Gough Island and SANAE base research missions by three chaplains.

29 Reserve chaplains trained.

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Subprogramme: Defence Subprogramme: Defence ReserveReservess Direction Direction

Achievements

Six Defence Provincial Liaison Councils have been established.

Several tertiary institutions engaged to give effect to the roll-out of the University Reserve Training Programme (URTP).

Strength of the Reserves increased to 26 147 from 22 062 in FY2009/10.

Reserves deployed in peace support operations, border safeguarding and other internal operations.

Challenges

MSDS still does not provide a sufficient feeder system for Reserves.

Limited continuation training budget.

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Subprogramme: Subprogramme: Defence Foreign RelationsDefence Foreign Relations (Chief of Defence International Affairs)(Chief of Defence International Affairs)

Achievements

Drafted, negotiated and facilitated four Defence agreements with other States and International Organizations.

Supported the development of the South African International Relations Policy with DIRCO.

Facilitated the processing and signing of the Defence Co-operation agreements/MOUs with various countries

Provided strategic and policy guidance to Defence Foreign Relations towards achieving all diplomatic obligations in terms of existing defence cooperation agreements.

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Subprogramme: Defence Foreign Relations Subprogramme: Defence Foreign Relations (Chief of Defence Foreign Relations)(Chief of Defence Foreign Relations)

Achievements

New office opened in Cuba and Non-residential accreditation to Ghana approved . Facilitated Defence Committee Meetings with Germany, PRC, USA and UK Facilitated Bilateral Joint Permanent Commissions with Namibia, Botswana and

Zimbabwe Facilitated attendance of the MOD & MV and a representative of C SANDF at the 6th

Meeting of the African Chiefs of Defence Staff and Heads of Security in Addis Ababa. Coordinated the Foreign Visitors' Programme during AAD for inter alia 17 Ministers of

Defence, Chiefs of 7 Armies, 28 Air Forces, 7 Navies and 2 Surgeons General. The DA offices in Ethiopia, Vietnam, Kenya and the DRC evaluated. 1 346 members of the DOD and Foreign Delegations made use of the VIP Lounge at

OR Tambo International Airport.

Challenge

The DFR structure and budget are still not aligned to its mandate since the purpose of the organisation changed to a departmental service organisation in 2001.

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PROGRAMME 2: FORCE EMPLOYMENTPROGRAMME 2: FORCE EMPLOYMENT

Achievements

The J Ops Division complied with all Regional Security requirements by successfully executing two Peace Support Operations and three General Military Assistance Operations.

In the Support to the People, all requests for border safeguarding and operations in cooperation with the SAPS were complied with.

Deployed on the borders in Limpopo, Mpumalanga and Kwa-Zulu Natal.

2010 FIFA World Cup

Public service strike

Xenophobia incidents

Voter registration

Op DUTY CALLS during festive season.

Opening of Parliament

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PROGRAMME 2: FORCE EMPLOYMENT (cont)PROGRAMME 2: FORCE EMPLOYMENT (cont)

Achievements (cont)

Aid and disaster relief provided through the building of two bridges by the SA Army.

Fire fighting, search and rescue operations at sea and on land.

Support during the floods in the Northern Cape.

Six Joint, Interdepartmental and Multinational (JIM) Exercises were planned, co-ordinated and directed.

Challenges

Lack of a Strategic Lift Capability.

Land claims on the Madimbo training area remain unresolved.

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PROGRAMME 3: LANDWARD DEFENCEPROGRAMME 3: LANDWARD DEFENCE

Achievements

All requirements for external and internal deployments complied with:

UN and AU Missions in Africa.

Internal operations eg Border Protection, provided forces for 2010 FIFA World Cup and support to public service strikes.

Post conflict training (DRC/Ivory Coast).

Reserve and MSDS members utilized for both internal and external deployments.

Training opportunities were provided for 93 members from 11 foreign countries.

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PROGRAMME 3: LANDWARD DEFENCE (cont)PROGRAMME 3: LANDWARD DEFENCE (cont) Challenges

Critical shortage and continued loss of scarce skills. (limited number of MSDS members could be accommodated because of financial challenges)

Age and health status of personnel.

State of facilities. Limited intervention underway by C Log capital works.

Insufficient funding to sustain PME requirement, operational vehicle fleet and ammunition requirement.

Roll-out of Op CORONA will over-stretch the SA Army’s deployable capabilities.

Financial Misconduct, Irregular, Fruitless & Wasteful Expenditure challenges, due to Lack of knowledge of commanders and staff to effect effective financial oversight. Inadequate capacity in terms of financial and logistic support personnel at unit level. Solution. A Governance Risk Management and Compliance office has been

established, matters are addressed at various forums and challenges monitored on a monthly basis.

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PROGRAMME 4: AIR DEFENCEPROGRAMME 4: AIR DEFENCEAchievements

Successfully provided required air defence capabilities and generated a total of 33 930 flying hours. (Reserve Squadrons flew 2 860 hours)

President and Deputy President and various VIPs flown by VIP fleet.

All required sustainment flights provided to SANDF external operations.

During 2010 FIFA World Cup, national airspace security was delegated to the SAAF.

Screened 12 921 aircrew of which 6 were rejected as undesirable.

Provided 64 739 flight authorisations.

Conducted 347 combat air patrols, took appropriate action against 65 non-compliant aircraft, carried out 51 interceptions and diverted 9 aircraft away from the prohibited flying zones.

Flights conducted for 15 fire-fighting operations, 34 medical and casualty evacuations and 9 search and rescue operations.

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PROGRAMME 4: AIR DEFENCE (cont)PROGRAMME 4: AIR DEFENCE (cont)Achievements (cont)

Hosted 28 Air Forces during the Africa Aerospace and Defence Exhibition.

Integration and phasing in of the Hawk system essentially completed.

Challenges

HR Development and Utilisation. Challenges such as slow progress inmeeting the desired demographic and gender representation targets at various levels in aircrew, technical and airspace control environments areexperienced. The progress is equally slow in the senior supervisory level (Warrant Officers) and middle management levels (Maj to Lt Col).

Affordability.  To effectively execute it's constitutional mandate, SAAFrequires to maintain all its air power competencies within the acceptableForce Design goal level.  Today this is not affordable  due to thedifference in high level of aviation inflation and the departmentalallocation of funds.

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PROGRAMME 4: AIR DEFENCE (cont)PROGRAMME 4: AIR DEFENCE (cont)

Challenges (cont)

Operational Readiness.  SAAF operational readiness status is not steady,it fluctuates because of the exceptional high levels of force employment which results in the low performance of force preparation tasks within theavailable resource paradigm.

Air Force Base Durban relocation to King Shaka International Airport (KSIA).A decision to relocate was made but lack of funding from NDPW prohibitsimplementation.  Current scenario of operating from two locations isdetrimental to SAAF effective operations.

AMG Agreement. Notice of termination has been given so as to enable revision of the agreement to comply with the PMFA. Although contractual termination notice period may cause delays, the DOD intends to resolve the historic problems associated with this agreement by the 1 April 2012.

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PROGRAMME 5: MARITIME DEFENCEPROGRAMME 5: MARITIME DEFENCE

Achievements

The SA Navy excelled by achieving 16 897 sea hours as opposed to the 10 000 hours that were estimated.

Successfully participated in Exercise ATLASUR - a biannual, joint and combined maritime exercise between Argentina, Brazil, South Africa and Uruguay off the coast of Argentina.

Successfully participated in Exercise IBSAMAR II – a multi-national exercise involving the navies of Brazil, India and South Africa. (Complimented by Indian Commander).

Defence diplomacy was enhanced through visits by C Navy and senior members of his staff to Argentina, China, France, India, Italy, Sri Lanka, UK, Vietnam and USA with reciprocal visits being paid by India, Vietnam, UK and USA.

The Maritime Reaction Squadron and support personnel were deployed in various peacekeeping missions as required.

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PROGRAMME 5: MARITIME DEFENCE (cont)PROGRAMME 5: MARITIME DEFENCE (cont)

Achievements (cont)

SAS DRAKENSBERG conducted Op IKHALA, an emergency evacuation off the West Coast of Africa.

SAS MENDI conducted Op COPPER, an anti-piracy patrol in the Mozambique Channel.

SA Navy was at its highest level of operational readiness during Op KGWELE. The combat support vessel, two submarines, one frigate, the hydrographic survey vessel and two mine countermeasure vessels were deployed.

The Shallow Water Route Survey System proved its worth during Op KGWELE, and during the location and recovery of the wreckage of the light aircraft that crashed off Plettenberg Bay.

Challenges

Critical shortages of personnel within the technical, combat, diver, submariner and logistics domains.

Poor status of buildings in the Simon’s Town area. (C Log limited Capital Works).

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PROGRAMME 6: MILITARY HEALTH SUPPORTPROGRAMME 6: MILITARY HEALTH SUPPORTAchievements

Health services were rendered according to the dual mission to support deployed forces and to deliver a base-orientated health service.

902 SAMHS members were deployed at National Health Operation Centres, stadiums and fan parks in support of Dept of Health during Op KGWELE.

SAMHS members also deployed with the SA Army and SA Navy during Op KGWELE.

During Op PROSPER (national strike) the SAMHS supported 74 hospitals with 2 822 members consisting of 1 266 health care practitioners.

Health care to military veterans is underway after approval by Minister.

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PROGRAMME 6: MILITARY HEALTH SUPPORT (cont)PROGRAMME 6: MILITARY HEALTH SUPPORT (cont)

Achievements (cont)

Defence diplomacy enhanced through the following activities:

Donation of equipment to the Uganda Defence Force.

Presented the 6th Annual Protection Course for African States party to the Chemical Weapons Convention. Attended by representatives from 13 African states.

The SG had bilateral meetings with the SGs of the Netherlands and Zambia during the AAD and visited France. 128 emergency care technician learners graduated.

Basic Ambulance Assistant courses were presented to 266 recruits of the Department of Health.

103 candidates successfully completed the Four Year Nursing Diploma and primary health care courses.

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PROGRAMME 6: MILITARY HEALTH SUPPORT (cont)PROGRAMME 6: MILITARY HEALTH SUPPORT (cont)

Challenges

Insufficient budget to fulfil ordered commitments, retain scarce skills and to renew obsolete equipment and capabilities.

Financial Misconduct, Irregular, Fruitless & Wasteful Expenditure challenges, due to Inadequate capability wrt financial and logistic support personnel at unit

level. Inadequate knowledge on processes and procedures.

Asset and Expenditure Management remains a challenge. To address this IG SAMHS performed 88 Audits as part of Internal Control; and SAMHS contributed to the initiatives/outputs of Project Clean Audit.

Procurement and Contract Management especially regarding the in-sourcing of Cleaning and Hospitality services at military hospitals were challenging. Structures need to be established and personnel to be appointed to address this issue.

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PROGRAMME 7: DEFENCE INTELLIGENCEPROGRAMME 7: DEFENCE INTELLIGENCE

Achievements

The DI Div fulfilled all obligations required by clients and delivered its products on time excepting security clearances.

Challenges

Poor state of the DI HQ building.

Not achieved its targets wrt security clearances due to a backlog caused by the delay (turnaround time) of finger print vetting from the SAPS criminal record centre (CRC). Funds have been made available for DI to obtain its own fingerprint reader.

Take Note:

Other DI info is classified and will be presented to the Joint Standing Committee on Intelligence (JSCI).

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PROGRAMME 8: GENERAL SUPPORTPROGRAMME 8: GENERAL SUPPORT

Subprogramme: Joint Logistic ServicesSubprogramme: Joint Logistic Services

Achievements

The Logistic Intervention and Repositioning Programme (LIRP) started to finalise the development of a service delivery system that is aligned with National Treasury requirements and international best practice.

An asset register and procurement implementation charter between National Treasury (IFMS) and the DOD was finalised.

A user assets management plan was produced to enhance the management of defence immovable assets.

The DOD Works Capability has been operationalised and is intended to deal with the back log in facility maintenance.

28 capital works building projects were funded. The bulk were spent on upgrading of military health facilities, installing fire detection and protection systems, making changes to buildings to accommodate disabled members, upgrading kitchens, and improving security at buildings.

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PROGRAMME 8: GENERAL SUPPORTPROGRAMME 8: GENERAL SUPPORT

Subprogramme: Joint Logistic Services (cont)Subprogramme: Joint Logistic Services (cont)

Achievements (cont)

Range clearance of the former Hell’s Gate training area was concluded.

Operation VUSELELA projects (removing of all alien trees and plants) were optimised in the Free State for increased mutual benefit to both the environment and beneficiaries (MV).

SAQA awarded full accreditation to the DOD Ammunition Depot and School of Ammunition while giving provisional accreditation to the DOD School of Logistical Training.

Challenges

Lack of capacity to provide appropriate, ready and sustained materiel, facilities, movement and logistic services.

Non-compliance at the operational level of logistic asset management policies.

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PROGRAMME 8: GENERAL SUPPORTPROGRAMME 8: GENERAL SUPPORT

Subprogramme: Joint Logistic Services (cont)Subprogramme: Joint Logistic Services (cont)

Challenges (cont)

Tangible Capital Assets:

No dedicated asset management component. The structure has been approved and appointments have been made on the newly established asset management unit.

Multiple logistic subsystems which are not integrated are used for the management of assets. Currently the DOD is one of the lead sites on the implementation of IFMS which will consolidate the systems into one. This is a long term solution.

Complete and accurate asset registers that meet the requirements of National Treasury are not in place. The upgrading of current systems is being done to address the compliance with the disclosure requirements by National Treasury.

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PROGRAMME 8: GENERAL SUPPORTPROGRAMME 8: GENERAL SUPPORT

Subprogramme: CMIS Division

Achievements

The CMIS Division provided viable Information Communication Technology services and a Joint Information Warfare Strategic Direction Capability to the DOD.

The Free Open Source Software Desktop and Server recommendation has been completed and approved.

The preliminary design of the Electronic Content Management System for Defence Intelligence has been completed and is ready for implementation.

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PROGRAMME 8: GENERAL SUPPORTPROGRAMME 8: GENERAL SUPPORT

Subprogramme: CMIS Division (cont)

Challenges

Lack of adequate storage space for the DOD Archives, combined with the moratorium placed on the destruction of records.

Need for infrastructure upgrade where the DOD’s mainframe is located.

Serious personnel shortage in some sections of the Division.

Shortfall in funding of the DEIS Master Plan.

Obsolete telecommunication equipment, local area network data and voice cable infrastructure and power outages.

Distribution of current capabilities is slow due to the lack of support from service providers (eg SITA).

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PROGRAMME 8: GENERAL SUPPORTPROGRAMME 8: GENERAL SUPPORT

Subprogramme: Military PoliceSubprogramme: Military Police

Achievements

Involved Services and Divisions in crime-combating exercises and established an anti-criminality capability to orchestrate the management of crime in the DOD.

260 members provided for deployment in operations: 146 in the DRC 10 in Sudan 104 internally

PMG enhanced defence diplomacy through visit to USA where exchange of training opportunities was established.

654 deliberate crime prevention operations were conducted with the SAPS and traffic departments throughout the country.

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PROGRAMME 8: GENERAL SUPPORTPROGRAMME 8: GENERAL SUPPORT

Subprogramme: Military Police (cont)Subprogramme: Military Police (cont)

Achievements (cont)

5 056 cases (criminal and disciplinary) were carried over and 2 166 new cases were reported. Of these, 2 339 were finalised.

Assets to the value of Rm1.4 were reported stolen or lost and assets to the value of R349 798 were recovered.

261 DOD members were arrested - 200 uniform and 61 civilian.

31 crime prevention forums were held with military communities to encourage the understanding of the crime picture and to address the levels of crime.

Challenges

Structural challenges and budget constraints.

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Organisational Structure and Human ResourcesOrganisational Structure and Human Resources

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Employees of the DOD excluding 26147 ReservesEmployees of the DOD excluding 26147 ReservesBudget Holder Planned Actual

SA Army 40,280 40,286

SA Air Force 11,261 11,192

SA Navy 6,641 7,508

SA Military Health Support 8,871 9,001

Defence Legal Service Division 366 340

Defence Corporate Communication 69 55

Defence Reserves 30 25

Defence Foreign Relations Division* 859 870

Corporate Staff Division 376 412

Military Policy, Strategy and Planning 25 23

Human Resource Division 1,683 1,700

Ministry of Defence 31 40

Chief of the SANDF Office 16 13

Defence Inspectorate Division 137 142

* includes Defence Intelligence Division

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Chaplain General 24 22

Defence Policy, Strategy and Planning Division 98 87

Financial Management Division 867 871

Defence Secretariat 40 35

Defence International Affairs 18 17

Logistic Division 2,341 2,646

Command and Management Information System Division 173 146

Military Police Division 1,958 1,753

Joint Operations Division 1,858 1,775

Defence Material Division 75 73

Department of Military Veterans   13

Total 78,097 79,045

Permanent Employees of the DOD (cont)Permanent Employees of the DOD (cont)

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SELECTED PERFORMANCE INDICATORSSELECTED PERFORMANCE INDICATORS

Programme Indicator Performance

Past Current

2009/10 Projection 2010/11

Actual 2010/11

Landward Defence Total number of active Reserves 13 352 13 500 12 362

Force Employment Number of external operations each year 12 12 5

Force Employment Average number of personnel deployed daily in external operations[

3 024 2 102 2 238

Force Employment Number of internal operations in support of other Government departments per year

5 5 5

Force Employment Number of person days used during internal operations 156 381 515 516 556 099

Force Employment Number of joint, inter-departmental and multinational military exercises conducted per year

9 8 6

Landward Defence Number of Military Skills Development members in the system per year

8 833 11 140 7 186

Air Defence Number of flying hours in support of operations each year 9500 9 500 15 265

Maritime Defence Number of sea hours on patrol in South African maritime zones per year

12 945 10 000 16 897

Military Health Support

Number of health care activities per year 2 086 002 2 400 000 2 208 533

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Appendix D: Appendix D: Enterprise Risk and Mitigation StrategiesEnterprise Risk and Mitigation Strategies

The continued loss of scarce skills due to the exit of large numbers of highly skilled personnel:

The DOD has developed a remuneration dispensation that recognises military uniqueness for the SANDF, salary levels 1 to 12 and will be implemented in phases starting 1 July 2010.

The Occupation Specific Dispensations (OSD) have been implemented for nurses, social workers, medical practitioners and legal practitioners.

On 15 March 2011 the DOD implemented a special allowance for technicians in all applicable environments.

The 22% increase in the payment scales of Reserve Force personnel has resulted in an increasingly positive response from call-ups.

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Appendix DAppendix D: : Enterprise Risk and Mitigation Strategies (cont)Enterprise Risk and Mitigation Strategies (cont)

Continued loss of scarce skills (cont)

Implementation of the DOD retention strategy led to 18% decline in scarce skills exit compared to the previous financial year.

Other Enterprise Risk and Mitigation Strategies: Identified and discussed in the Annual Report document (Appendix D, Page 137. These include:

Inadequate funding for human resource expenditure could result in a further burden on DOD’s budget vote/allocation.

In real terms, the buying power of the defence allocation is declining and will negatively impact on the Department’s performance and capital acquisitions.

Mitigation. The outcomes of the deputy minister’s task team on efficiency and effectiveness of the use of the budget will guide a way ahead to improve the situation.

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Appendix D:Appendix D: Enterprise Risk and Mitigation Strategies (cont) Enterprise Risk and Mitigation Strategies (cont)

Other Enterprise Risk and Mitigation Strategies (cont)

Inadequate facility infrastructure maintenance and renovation capacity resulting in unacceptable facility repair and renovation backlog that detrimentally impacts on force preparation and employment.

Mitigation. The operationalisation of the DOD Works Formation is intended to mitigate this risk.

Incompatible ICT systems could result in ineffective and inefficient performance.

Mitigation. The improved funding of the DEIS and the role out of the DEIS master plan is intended to mitigate this risk.

Lack of single logistics management information system due to historic fragmentation system enhancements. This has led to inability to comply with NT asset management requirements including financial reporting leading to audit qualification.

Mitigation. The outcome of the LIRP and the role out of the IFMS are inspected to mitigate this risk however there is a short term implementation plan such as the restructuring of the asset management directorate. improved funding of the DEIS and the role out of the DEIS master plan is intended to mitigate this risk.

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Appendix D:Appendix D: Enterprise Risk and Mitigation Strategies (cont) Enterprise Risk and Mitigation Strategies (cont)

Other Enterprise Risk and Mitigation Strategies (cont)

Non-compliance with legislation, e.g. certain aspects of the PFMA. Mitigation. The DOD is in the process of establishing a

compliance unit. Governance processes are being enhanced and disincentives and penalty measures are being considered for offenders.

Inadequate communication could lead to poor perceptions about the Department of Defence in the public domain.Mitigation. The communication strategy has been approved and

is being implemented.

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Questions Questions and and

DiscussionDiscussion