dod presentation to the pcd&mv department of defence 2014 annual performance plans

11

DOD Presentation to the PCD&MV

DEPARTMENT OF DEFENCE 2014 ANNUAL PERFORMANCE PLANS

Presented By The Secretary For Defence: Dr S.M. Gulube

30 July 2014

22

IntroductionSources of Defence MandateDOD OrganogramPlanning Requirements

Strategic Overview MOD&MV Strategic Priorities: FY2014/15 DOD Contributions MTSF NDP New Growth Path IPAP

SCOPE

33

DOD Core Performance Information

Entities Reporting to the MOD&MV

Budget Allocation and Trends

PCD&MV Requirements wrt HR

Audit Report FY12/13 and DOD Action Plan

Budgetary Review Recommendations

SCOPE (CONT.)

44

AIM

To present the concise corporate overview of the Department of Defence (Def Sec and SANDF) 2014 APPs to the Portfolio Committee as tabled on 12 March 2014

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INTRODUCTION

The DOD Constitutional and Legislative mandate place the following imperatives on the DOD:

“To provide for the defence and protection of the Republic, its territorial integrity and its people” [Constitution of the Republic of South Africa, 1996: Section 200(2)]

“A civilian secretariat for defence must be established by national legislation to function under the direction of the Cabinet member responsible for defence” [Constitution of the Republic of South Africa, 1996: Section 204]

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DOD VISION

“Effective defence for a democratic South Africa”

DOD MISSION

“To provide, manage, prepare and employ defence capabilities commensurate with the needs of South Africa as regulated by the Constitution, national legislation and Parliamentary and Executive direction. The above will be provided through the proper management, provision, preparedness and employment of defence capabilities, which are in line with the domestic and global needs of South Africa”

CONSTITUTIONAL AND LEGISLATIVE MANDATES

Legislation

Responsibilities

Constitution of the Republic of South Africa, 1996

Section 200(2): The President as head of the national executive is the Commander-in –Chief of the Defence Force, and must appoint the Military Command of the Defence Force.Section 200(2): To provide for the defence and protection of the Republic, its territorial integrity and its people.Section 204: A civilian secretariat for defence must be established by national legislation to function under the direction of the Cabinet member responsible for defence.

Defence Act, 2002(Act No 42 of 2002)

Section 4A: Composition of the Military Command Section 5: Composition of the Department of Defence.Section 6: Establishment of the Defence Secretariat.Section 7: Appointment of the Secretary for Defence as head of the department.Section 8: Functions of the Secretary for Defence. Section 9: Delegation of Powers and Assignment of Duties by the Secretary for Defence.Section 10 Departmental Investigations by the Secretary for Defence.Section 11: Composition and Establishment of the South African National Defence Force.Section 48: Establishment of Reserve Force Council.

Defence Amendment Act, 2010(Act No 22 of 2010)

Section 4: Appointment of the Military Command Council.Section 53/104: Rendering of service by the Reserve Force.Section 53(3A): Compulsory call-up of reserve force members by the Commander (Footnote2)Section 62: Establishment and Functions of the Defence Service Commission.Section 62 (A): Establishment and Composition of the Defence Service Commission.Section62(B): Functions of the Commission.

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CONSTITUTIONAL AND LEGISLATIVE MANDATES (CONT.)

8

DEPARTMENT OF DEFENCE MACRO ORGANISATIONAL DESIGN Ministry of Defence &

Military Veterans

LEVEL 0

LEVEL 1

LEVEL 2

Department of Defence

Defence Secretariat

SA National Defence

Force

Human Resource Division

Defence Legal

Service Division

Defence Inspectorate

Division

Defence Foreign

Relations Division

Defence Policy,

Strategy and Planning Division

Financial Management

Division

Defence Material Division

Defence International

Affairs

Internal Audit

Division

Defence Enterprise Information

Systems Management

Division DOD CENTRAL STAFF

Joint Operations

DivisionSA Army

Army OfficeSA Air Force

Air Force OfficeSA Navy

Navy Office

SA Military Health Service

Defence Intelligence

Division

Corporate Staff Division

Military Policy

Strategy & Planning

Defence Reserves

Chaplain Service

Logistics Division

Military Police Division

Command & Mngmnt

Information Systems Division

SA Military OmbudDefence ForceService Commission

Public Entities•ARMSCOR Castle

•Control Board

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PLANNING REQUIREMENTS Defence as an organ of state is required ito the PFMA and related National Treasury

Regulations (Section 5 and 30) to ensure the submission of a departmental Strategic Plan (5 Year planning horizon)

The DOD as a mechanism to safeguard “confidential” departmental information, formally adopted the development of the DOD Executive Authority Overarching Strategic Statement, EA OASS, (2011/12-2015/16) as the overarching platform to inform further departmental planning, the Defence Secretariat (Def Sec) and South African National Defence Force (SANDF) Strategic Plans (2011/12-2015/16).

The reporting of performance against the above plans is dealt with through the relevant committees of Parliament.

The DOD is in the process of developing the new DOD Strategic Plan (2015-2020) in support of the Medium Term Strategic Framework (MTSF) and will be tabled during February 2015 as required by legislation.

The MOD&MV has furthermore directed that the DOD as from FY2015/16 MTEF shall ensure the development of one single departmental Strategic Plan (2015-2020) and on single departmental APP FY2015/16 MTEF onwards.

Sec DefStrategic Plan

and Annual Performance

Plan

Sec DefStrategic Plan

and Annual Performance

Plan

SANDF Strategic Plan and Annual

Performance Plan

SANDF Strategic Plan and Annual

Performance Plan

0

1

2 Services/Divisions (APP)

Executive Authority’s Overarching Strategic Statement

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PLANNING REQUIREMENTS

DOD FY2014/15 MTEF Planning Instruments are:

– Aligned to outcomes based principles of government.

– Aligned with National Treasury Framework for SP and APP.

– Aligned with the DOD Strategic Plan.

DOD FY2014/15 MTEF APPs were tabled in Parliament on 12 March 2014 (60 Copies and 1x Compact Disc).

PLANNING REQUIREMENTS

• The DOD as required by the NT Framework on Strategic and Annual Performance Plans, has adopted an implemented Outcomes Based Planning (Results Based Planning) at all levels of the DOD.

• Reflective of this Outcomes based requirement within the context of the Defence Constitutional and Legislative mandate, the DOD Strategy Map is provided as follows as the basis of departmental planning.

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Output Deliverables

(Departmental Mandate

Execution)

Internal Processes

(What we Do)

Resources Management

(What we Use)

Building for the Future

(Sustainability)

RSA is defended and protected

(SANDF)

Enhanced Civil Control of Defence

(Def Sec)

P1: Administrate the DOD

P1: Administrate the DOD

D3: Provide sound Defence directionD3: Provide sound Defence direction

D4: Ensure Defence compliance with

Regulatory Framework

D4: Ensure Defence compliance with

Regulatory Framework

P3: Employ the SANDFP3: Employ the SANDF

D1: Conduct ordered Defence commitments in accordance with government policy and

strategy

D1: Conduct ordered Defence commitments in accordance with government policy and

strategy

D2: Provide mission ready Defence capabilities

D2: Provide mission ready Defence capabilities

R1: Provide professional & supported DOD

Human Resources

R1: Provide professional & supported DOD

Human Resources

R2: Provide appropriate &

sustained Materiél

R2: Provide appropriate &

sustained Materiél

R3: Provide integrated &

reliable Defence Information

Systems

R3: Provide integrated &

reliable Defence Information

Systems

R4: Provide sound Financial Management of

the DOD

R4: Provide sound Financial Management of

the DOD

F1: Ensure Appropriate

StrategicReserves

F1: Ensure Appropriate

StrategicReserves

F2: Renew DOD Main Equipment & Doctrine

F2: Renew DOD Main Equipment & Doctrine

F5: Promote

consensus on Defence

F5: Promote

consensus on Defence

F3: Undertake Defence

Research & Development

F3: Undertake Defence

Research & Development

F4: Promote an appropriate

Defence Industry

F4: Promote an appropriate

Defence Industry

P2: Enable the DOD

P2: Enable the DOD

DODOUTCOMES

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PART 1: STRATEGIC OVERVIEW

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MOD&MV STRATEGIC PRIORITIES: FY2014/15

The following MOD&MV Strategic Priorities shall receive attention during the period under ahead for execution through DOD (Defence Secretariat [Def Sec] and SANDF) FY2014/15 Planning Instruments:

2020


Ser MOD&MV Strategic Priorities for FY2014/15

1 Enhancement of the South African National Defence Force’s (SANDF’s) Landward Defence Capabilities.

For the landward defence capability to operate jointly with the air defence and maritime defence capabilities, the enhancement of the South African National Defence Force (SANDF) landward defence capabilities remains a priority. The landward defence capability lacks the required human resources, infrastructure and technologically appropriate Peace Mission Equipment (PME) in support of the defence mandate. The SANDF will, in the near and foreseeable future, be required to perform a wider spectrum of operations, in an increasing spectrum of countries and terrain. The pending Defence Review will inform the future force design and associated landward defence capabilities of the SANDF. For the FY2014/15, the DOD will address the landward component of the Strategic Capital Acquisition Master Plan (SCAMP) that reflects the acquisition programmes/projects as prioritised by the SANDF, based on available funds to enable the landward capability. The future SA Army Strategy is supported by a detailed SA Army Prime Mission Equipment and Technology Requirement Support Plan, which has directed and prioritised the requirements in terms of equipment and technology acquisition for the short to medium-term. The integrity of these systems will, however, require adequate funding over the short, medium and long term if support to the defence mandate is to be ensured.

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2 Maritime Security Strategy.

In terms of the NDP 2030 (Transnational Crime), Chapter 7: “SA in the Region and the World”, South Africa should place particular emphasis on combating maritime piracy along the east coast of Africa. The South African Maritime Strategy in support of the NDP 20130 has been developed and is currently in the process of being integrated into the broader Southern African Development Community (SADC) Maritime Security Strategies. The SA Navy has focused and will continue to focus on the preparation of naval forces for operations in support of the Maritime Security Strategy including patrols in support of other operations such as Operation CORONA, PROSPER and COPPER. The expansion of Naval Base Durban on the East Coast in support of the Maritime Security Strategy had been initiated and should continue to be resourced in future financial years. The availability of adequate funds throughout the financial year and participation by other tripartite partners (and other SADC countries) are instrumental in the execution of the Maritime Security Strategy.

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3 Job Creation.

In support of Government’s Medium-Term Strategic Framework (MTSF) growth-path initiative aimed at job creation, the DOD will endeavour to create job opportunities within the Defence Industry in accordance with approved DOD projects. The finalisation of the Defence Review process will pronounce on the national approach and direction relating to the Defence Industry. The White Paper on the Defence Industry (A chapter of the Defence Review) will inform the development and approval of the associated Defence Industry Strategy. The latter process shall continue to inform and support job creation within the defence portfolio and related industries.

4 National Youth Service (NYS).

The NYS policy is to be developed in the FY2014/15 and approved in FY2015/16 that will set the norms and standards of the NYS programme. Through the NYS programme, the DOD will provide initial training to selected young people for the purpose of creating a pool of young and ready citizens from which the DOD and government are able to recruit personnel.

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5 Restructuring and Support of the Defence Industry.

The restructuring of the Defence Industry continues to focus on current and future defence capability requirements in support of the Defence mandate. The developed White Paper on the Defence Industry has been included as a chapter in the Defence Review that will inform the Defence Industry Strategy and the mandate and functions of the National Defence Industry Council. The drafting process of the Defence Industry Strategy has commenced, has gone through several stages of stakeholder consultation and awaits the approval of the SA Defence Review to ensure alignment between the policy and strategy.

6 Revitalisation of the Reserves.

As part of the one-force concept, the Reserves will continue to be transformed and revitalised to fulfill their primary role of providing a large component of the conventional landward capability of the SANDF whilst at the same time supplementing peace support missions conducted by the Regulars. The DOD will continue to focus on the recruitment and training of university students through the University Reserve Training Programme (URTP). The reduction of the financial resource allocation for the Military Skills Development System (MSDS), as a feeder system for the Reserves may have a negative impact on the numbers of available Reserves and the ability of the SANDF to rejuvenate forces.

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MOD&MV STRATEGIC FOCUS AREAS: FY2014/15

Ser MOD&MV Strategic Focus Areas for FY2014/15

1 Military Skills Development System (MSDS).

The MSDS is a service system that supports the rejuvenation of the Department’s Human Resources (HR) Renewal Strategy and the feeder system to ensure SANDF rejuvenation. The SANDF has reached a capacity ceiling in terms of being able to afford, train, manage and accommodate the annual MSDS intakes. Owing to reduced funding allocated to the MSDS, the ability of the SANDF to ensure a rejuvenated, prepared and employed capability is compromised as a force multiplier for both internal and external operations of the SANDF. This situation will impact negatively on any increasing force preparation and force employment requirements and will lead to an ever-increasing reliance on the training and utilisation of Reserves, which is also highly dependent on the outflows of annual MSDS intakes for enabling SANDF rejuvenation. The Services will require a three-year strategic warning period to build human resources, infrastructure, training and logistics capacity prior to operationalisation and will require adequate and sustained funding prior to being able to accommodate any significant increase in the size of the annual MSDS intakes. Until the size of the annual SANDF intakes can increase, both the Regulars and Reserves will be limited in terms of a shortage of young and fit deployable soldiers.It is envisaged that approximately 4 272 young and fit MSDS members will be in the system during the FY2014/15.

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MOD&MV STRATEGIC FOCUS AREAS:

FY2014/15Ser MOD&MV Strategic Focus Areas for FY2014/15

2 Transformation within the SANDF.

There is a need to improve on the representation of women in the DOD for the FY2014/15 and beyond. The representation of women in the DOD (SANDF) will be addressed where Departmental policy will be reviewed and which will address the following:

• Recruitment at entry level to be increased to 50%.

• Representation of women to be increased at all levels of military command.

• The number of women Defence Attachés to be increased.

• The number of women on military development courses to be increased.

• Gender and leadership seminars to be conducted across the gender divide.

• Gender perspectives and dynamics to be incorporated into all military development courses.

3 Reconfiguration of Force Number Allocation. The current configuration of force numbers does not enhance the required force integration and cohesion. To address this, the DOD is investigating an IT system that will bring about a totally reconfigured set of force numbers. A new generation Information Technology Financial Management System (IT FMS) for all Government Departments which includes the DOD, is currently in the process of being developed.

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4 DOD Audit.

The department continues to strengthen its internal mechanisms of accounting for the utilisation of resources at its disposal, which include, among other things, human resources, finance, matériel and information systems. For the past year, the DOD received two audit qualifications, namely on movable tangible capital assets and intangible capital assets. For the period under consideration, the DOD will focus on resolving challenges with asset management to ensure a clean audit. During 2013, the Internal Audit Division was established with the aim to ensure that the DOD internal audit assurance process is enhanced to enable the DOD achieve a clean audit. For FY2014/15, the DOD “Operation Clean Audit” will further be enhanced through the Audit Management Team that manages all audit issues in the DOD.

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5 Corruption and Fraud.

The DOD continues to adopt a zero-tolerance attitude to all forms of fraud and corruption within the department. The DOD Corruption and Fraud Prevention Plan was reviewed and approved by the DOD Management on 09 July 2012. The plan will be valid for a period of three years and strives to reduce corruption and fraud within Defence. Additional to the plan, the DOD will enhance the detection, investigation and prosecution of corruption and fraud in the DOD in the following ways:

Anti-corruption Hotline Cases. The DOD will improve feedback on anti-corruption hotline cases by strengthening and coordinating the responses at the departmental nodal point.

Corruption and Fraud Awareness Campaign. The DOD will provide a platform that will enhance the prevention of corruption and fraud in the broader DOD as well as specifically within the defence supply chain integration processes, through evaluation and awareness programmes and monitoring compliance to departmental government frameworks.

DOD Procurement Policy. The DOD will ensure that its procurement processes comply with requirements and policies so as to avoid procurement fraud.

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Ser MOD&MV Focus Areas for FY2014/15

6 Youth Development Programmes.

As resolved by the February 2013 Cabinet Lekgotla, the DOD will co-ordinate the Youth Maintenance Brigade on behalf of the government. Whilst doing this, the DOD will strive to use the programme as a mechanism to rejuvenate the Defence Force.

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DOD CONTRIBUTION TO THE MTSF OUTCOMES OF GOVERNMENT

The DOD, through the pursuit of its legislative mandate and inherent defence capabilities, will continue to render support to the selected MTSF outcomes.

As a general rule, the content of each MTSF outcomes forms the basis for a Delivery Agreement (DA) between a responsible Cabinet member and the President of the RSA.

Prior to the May 2014 General Elections, the MOD&MV was a co-signatory responsible for the co-ordination and chairpersonship of the International Cooperation Trade and Security (ICTS) Cluster for the MTSF Outcome 11: “Creating a better South Africa and contributing to a better and safer Africa in a better World”.

Post General Elections, the MOD is responsible for co-ordination and chairpersonship of the Justice, Crime Prevention and Security Cluster for MTSF Outcome 3: “All people in South Africa are and feel safe”

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DOD CONTRIBUTION TO THE MTSF OUTCOMES OF GOVERNMENT (CONT.)

The MTSF outcomes to which Defence contributes to, by virtue of its Legislative Mandate and inherent capabilities, are as follows:

Outcome 2: A long and healthy life for all South Africans.

Outcome 3: All people in South Africa are and feel safe.

Outcome 5: Skilled and capable workforce to support an inclusive growth path.

Outcome 11 Creating a better South Africa and contributing to a better and safer Africa in a better World

Outcome 12: An efficient, effective and development-oriented public service and empowered, fair and inclusive citizenship.

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DOD CONTRIBUTION TO THE NATIONAL DEVELOPMENT PLAN 2030

• The DOD while striving for the achievement of the departmental legislative “core-sustained” mandate, remains cognisant of the national government “change” agenda to which defence, with available resources, will endeavor to support.

• The approval on 11 November 2011 of the National Development Plan (NDP) is a plan for the country to eliminate poverty and reduce inequality by 2030 through uniting South Africans, unleashing the energies of its citizens, growing an inclusive economy, building capabilities and to enhance the capability of the state and its leaders by working together to solve complex problems.

• This vision also informs Government Policy that includes the Industrial Policy Action Plan (IPAP) and the New Growth Path (NGP).


The NDP and its related policies provide a national framework that informs the national departments’ contribution. Aspects relevant to defence and our envisaged contribution are as follows:

Envisaged reduction in youth unemployment. The DOD is in the process of developing a policy on NYS within the Department.

Provide assistance in disaster aid and disaster relief. The DOD will assist in times of disaster relief and humanitarian assistance as directed by government.

Support in the combating of maritime piracy along the East Coast of Africa. The DOD will continue to support the combatting of maritime piracy along the East Coast of Africa.

Strengthening the National Research and Development capacity. The DOD will establish a DOD Strategic Research capability.

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33


Building safer communities. The DOD’s contribution to building safer communities is realised through conducting internal operations and safeguarding the territorial integrity of the RSA.

Building a capable and developmental State. The DOD will review the governance structures of Public Entities (Armscor).

Corruption and Fraud. The DOD will intensify its campaign in fighting corruption and fraud.

DOD CONTRIBUTION TO THE NEW GROWTH PATH

Government released the Framework of the NGP aimed at enhancing growth, job creation and equity. The policy’s principal target is to create five million jobs by the year 2020. The NGP identifies strategies that will enable South Africa to grow in a more equitable and inclusive manner while attaining South Africa’s developmental agenda. The DOD will endeavour to support the NGP through:

Development of the NYS policy and preparing youth for employment.

In the long term, it is foreseen that job opportunities within the Defence Industry in accordance with approved DOD capital acquisition projects will be created.

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DOD CONTRIBUTION TO THE INDUSTRIAL POLICY ACTION PLAN

The IPAP is located in the vision of the NDP and forms one of the principal pillars of the NGP and as such, the DOD with the pending Defence Review will direct Public Procurement and enable long-term acquisition and procurement of defence PME.

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PART 2: DOD CORE PERFORMANCE INFORMATION

DOD PERFORMANCE INFORMATION MANAGEMENT

• The DOD remains committed to alignment with the national processes for strategic planning, budgeting, reporting and risk management.

• To this end, the DOD strives for the development of performance information that promotes transparency and expenditure control towards economy, efficiency, effectiveness and equity in the use of public resources, and to do so in a way that demonstrates alignment with legislation and national outcomes.

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DOD ESTIMATES OF NATIONAL EXPENDITURE (ENE) FY2014/15 MTEF

The following high level criteria informs (amongst others) the identification of the DOD ENE on an annual basis:

Level 0/1 Core Indicator.

Legislative / policy (sustained) mandate.

Output Deliverables.

Major cost drivers.

Trendable information.

Linkage to the MTSF Outcomes and NDP

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39

DOD ANNUAL SELECTED PERFORMANCE INDICATORS AND

TARGETS FOR FY2014/15 (ESTIMATES OF NATIONAL

EXPENDITURE)

The selected performance indicators, which are presented on the next slide, form a component of the DOD 2014 Defence Vote 22.

40

Performance Indicator

Annual Performance

Past Current Projected

Programme2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Total number of defence attaché offices 37 39 40 40 41 43 45 Administration

Number of military skills development members in the system per year 8 662 11 213 8 955 4 208 4 272 4 782 4 470 Administration

Number of reserve force mandays

- - -New

Indicator1 883 683

1 890 022 1 870 362 Administration

DOD ANNUAL SELECTED PERFORMANCE INDICATORS AND TARGETS FOR

FY2014/15

41


Annual Performance


Programme2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Percentage compliance with the South African Development Community standby force agreement and South African Pledge

- 100% 100% 100% 100% 100% 100%Force

Employment

Percentage compliance with number of ordered commitments (external operations)

100%

(4)

100%

(3)

125%

(5)

100%

(6)

100%

(5)

100%

(5)

100%

(5)

Force

Employment

Landward

defence

Defence

IntelligencePercentage compliance with number of ordered commitments (internal operations)

100%

(5)

100%

(4)

100%

(4)

100%

(4)

100%

(4)

100%

(4)

100%

(4)

Force

Employment

DOD ANNUAL SELECTED PERFORMANCE INDICATORS AND TARGETS FOR

FY2014/15

42


Annual Performance


Programme2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Number of joint, interdepartmental and multinational military exercises conducted per year

8 6 5 9 9 7 9Force

Employment

Number of landward sub-units deployed on border safeguarding per year

- 7 11 13 15

(13)

16

(13)

16

(13)

Force

Employment

Number of force employment hours flown per year 8 279 11 256 11 697 6 300 6 985 6 985 6 985 Air Defence

Number of hours at sea per year 8 286 14 088 7 339 22 000 12 000 12 000 12 000

Maritime

Defence

DOD ANNUAL SELECTED PERFORMANCE INDICATORS AND TARGETS FOR FY2014/15

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PUBLIC ENTITIES REPORTING TO THE EXECUTIVE AUTHORITY

Name of Public Entity

Legislative Mandate Outputs Budget AllocationR’000

Armscor

The Armscor mandate is derived from the Armscor Act No 51 of 2003. Armscor is to meet:

the defence utilises requirements of the Department of Defence effectively, efficiently and economically and

the defence technology, research development, analysis, test and evaluation requirements of the Department of Defence effectively, efficiently and economically.

Armscor is required to adhere to accepted corporate governance principles, best business practices and generally accepted accounting practices within a framework of established norms and standards that reflects fairness, equity, transparency, economy, efficiency, accountability and lawfulness.

To manage technology projects, the following themes underpin the current focus:

Funding and growth.

People/Capabilities.

Organisational effectiveness and efficiencies.

Stakeholder relationships.

R1,096,253

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PUBLIC ENTITIES REPORTING TO THE EXECUTIVE AUTHORITY

Name of Public Entity

Legislative Mandate OutputsBudget Allocation

R’000

Castle Control Board(CCB)

The Castle Control Board as a public entity, under the Public Finance Management Act (Act No 1 of 1999) section 1, has the mandate to manage and protect the Castle of Good Hope on behalf of the MOD&MV has the ultimate ownership responsibility for the Castle.

Compliance with Regulatory Framework

Maintenance, preservation, interpretation and showcasing of the history of the Castle of Good Hope.

Preserved and protected military and cultural heritage site.

Optimised tourism potential of the Castle of Good Hope.

Optimised accessibility to the Castle of Good Hope by the public.

Increased public profile and positive perception across all sectors of the community.

Self-sustaining.

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ORGANS OF STATE REPORTING TO THE EXECUTIVE AUTHORITY

Name of Organ of State

Legislative Mandate Outputs

Department of Military Veterans (DMV)

The Military Veterans Act, (Act No 18 of 2011) provides the mandate and seeks to provide national policy and standards on socio-economic support, including benefits and entitlements, to military veterans and their dependants.

The outputs are as follows:

DMV Direction.

Military Veteran Socio-economic Support Services.

Military Veteran Empowerment and Stakeholder Relations.

Provision of Sound Policy and Administration.

Defence Force Service Commission

(DFSC)

The DFSC was established in terms of Section 62A of the Defence Amendment Act, (Act No 22 of 2010).

To investigate, advise and make recommendations on a unique service dispensation outside the ambit of the Public Sector, including the regulatory framework and advice on remuneration and conditions of service of members of the SANDF.

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Reserve Force Council (RFC)

In terms of section 48(4) of the Defence Act, (Act No. 42) of 2002, the RFC is a consultative and advisory body representing the Reserve Force in order to promote and maintain that Force as an integral part of the Defence Force and must be consulted on any legislation, policy or administrative measures affecting the Reserve Force.

The RFC’s output includes:

The provision of advice for the MOD&MV.

Consultation/policy/legal advice to identified stakeholders.

Develop and maintain the Reserve Force Service System.

Promote Reserve Force support structures.

Communication, marketing, and promotion of the Reserves and the Reserve Service System.

Proposal of projects.

Establishment of an Honorary Colonels Club.

Establishment and maintenance of both multi- and bilateral links with international Reserve Officers’ Associations.

Identifying and advancing international opportunities for young Reserve Force leaders, both officers and NCOs.

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Office of the Military Ombud

The mandate of the Office of the Military Ombud, which is derived from the Military Ombud Act, (Act No 4 of 2012), is to investigate complaints lodged in writing by:A member regarding his or her conditions of service.A former member regarding his or her conditions of service.A member of the public regarding the official conduct of a member of the Defence Force.A person acting on behalf of a member.

To investigate complaints lodged in writing by:

A member regarding his or her conditions of service.

A former member regarding his or her service conditions.

A member of the public regarding the official conduct of a member of the Defence Force.

A member acting on behalf of a member of the Defence Force.

To submit an Annual Report to the Minister within one month after end of financial year.

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In accordance with the Public Service Regulation (PSR), the Executive Authority (MOD&MV) shall establish and sustain a Service and Delivery Improvement Programme for the DOD.

The DOD shall therefore publish an annual statement of Public Service commitment, which will set out the department’s service standards that citizens and customers/clients can expect and which will serve to explain how the department will meet each of these standards.

The DOD is in the process of developing its first Service Delivery Improvement Plan for the FY2015/16. The Department of Public Service and Administration has been approached to render assistance in this regard to ensure departmental compliance with relevant legislation.

SERVICE DELIVERY IMPROVEMENT PLAN (SDIP)

Detailed information per DOD Programme in support of the corporate DOD FY2014/15 MTEF Overarching Strategic Direction as presented above, is contained in the subordinate Def Sec and SANDF FY2014/15 MTEF Planning Instruments as tabled in Parliament on 12 March 2014.

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FY2014/15 EA OASS LINK WITH PLANNING INSTRUMENTS

50

PART 3: DOD FY2014/15 MTEF

BUDGET PLAN

51

MTEF BACKGROUND

• The DOD briefed the NT’s MTEC sub-functional group about the Defence budget requirements on 23 July 2013. NT indicated to Defence that the economic situation has deteriorated and that additional allocations for FY2014/15 will most probably not be possible.

• Defence again briefed the “Defence, Public Order and Safety Functional MTEC about the Defence budget requirements on 22 August 2013. The MTEC proposed some reprioritisation of the Defence budget, some of which were accepted by Defence. These proposals were subsequently submitted to the MinComBud by NT.

52

MTEF BACKGROUND

• The Defence Database and Chapter for the 2014/15 MTEF was submitted to NT on 06 December 2013 for inclusion in the Estimates of National Expenditure.

53

BASELINE REDUCTIONS

2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17RM RM RM RM RM RM RM RM

2009/10 450 544 596 - - - - -2010/11 - 447 627 624 - - - -2011/12 - - 507 568 549 - - -2012/13 - - - 516 531 663 - -2013/14 - - - - 50 85 350 -2014/15 - - - - - 500 700 900TOTAL 450 991 1,730 1,708 1,130 1,248 1,050 900

MTEF Cycle

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DOD BUDGET ALLOCATION

2014 MTEF ALLOCATIONS2014/15R'000

2015/16R'000

2016/17R'000

Previous Departmental Baseline 42 695 464 45 121 509 47 979 516

Baseline Increases 635 770 879 755 1 100 943 Conditions of Service 193 919 392 514 446 443 SA Air Force Operations 341 851 387 241 554 500 Military Health Service 100 000 100 000 100 000

Baseline Decreases -500 000 -700 000 -900 000 Special Defence Account -400 000 -600 000 -800 000 Goods and Services: Computer Services -100 000 -100 000 -100 000

New Departmental Baseline 42 831 234 45 301 264 48 180 459

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DOD PERSONNEL BUDGET

Personnel Expenditure 2014/15 2015/16 2016/17Estimates Captured 21 980 247 220R 23 354 696 311R 25 138 499 068R Projected HR Expenditure / NT Ceiling 23 094 496 000R 24 585 108 000R 26 012 512 000R Difference -1 114 248 780R -1 230 411 689R -874 012 932R

Options to Fund/Curtail HR Expenditure

•Fund shortfall from operating budget.

•Fund shortfall from armament acquisition budget / special defence account.

•Put immediate measures in place to curtail personnel expenditure.

•Combination of the above three options.

56

DOD BUDGET PER MAIN PROGRAMME

Main Programme 2014/15 % 2015/16 2016/17

Administration 4 866 527 000R 11.36% 5 187 898 000R 5 478 175 000R

Force Employment 3 436 958 000R 8.02% 3 656 347 000R 3 855 371 000R

Landward Defence 13 854 866 000R 32.35% 14 852 637 000R 15 640 174 000R

Air Defence 7 166 896 000R 16.73% 7 428 773 000R 7 209 651 000R

Maritime Defence 3 678 505 000R 8.59% 3 754 780 000R 4 927 479 000R

Military Health Support 3 849 063 000R 8.99% 4 059 363 000R 4 325 131 000R

Defence Intelligence 792 112 000R 1.85% 828 787 000R 874 789 000R

General Support 5 186 307 000R 12.11% 5 532 679 000R 5 869 688 000R

TOTAL 42 831 234 000R 100.00% 45 301 264 000R 48 180 458 000R

57

DOD EXPENDITURE TRENDS

• Increase in Landward Defence over the MTEF mainly due to the planned replacement of the Infantry Combat Vehicle system.

• Decrease in Air Defence in 2016/17 mainly due to the following acquisition projects that are nearing its end or are scaling down ito its milestones; "Upgrade of Intelligence Image Capability", "Development and Procurement of New Generation Air-to-Air Missile", "Replacement of Aircraft Rescue and Firefighting Vehicles", "Replacement of Medium Distance 3D Radar", "Development and Procurement of Maritime Surveillance Aircraft" and "Expansion of Pilatus, Hawk and Gripen ejection seats“.

58

DOD EXPENDITURE TRENDS (CONT.)

• Increase in Maritime Defence in 2016/17 mainly due to the following acquisition projects that are starting or are scaling up ito its milestones; "Procurement of Off-Shore Patrol Vessels", "Acquisition of Hydrographic Vessel", "Replacement of Heavy Weight Torpedo Capability" and "Midlife Upgrade of Frigates".

• Increase in Military Health Support mainly due to additional allocation made available for outsourced services and medicine.

• Increase in General Support mainly due to expanding the Defence Works Formation.

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DOD BUDGET PER

ECONOMIC CLASSIFICATION

Economic Classification 2014/15 % 2015/16 2016/17

Compensation of Employees 21 980 247 220R 51.32% 23 354 696 311R 25 138 499 068R

Goods and Services 12 490 887 300R 29.16% 13 155 497 706R 13 998 599 393R

Transfers and Subsidies 7 838 160 617R 18.30% 8 234 570 089R 8 555 049 572R

Payment for Capital Assets 521 938 863R 1.22% 556 499 894R 488 309 967R

TOTAL 42 831 234 000R 100.00% 45 301 264 000R 48 180 458 000R

• Increase in transfer payments in 2015/16 is mainly due to the milestones of the acquisition projects for the Infantry Combat Vehicle, Soldier Systems and Zone 1 Anti Tank Capability.

75

DOD FY2014/15 MTEF

BUDGET PLANItem Date

MTEF technical guidelines and databases issued to institutions 19 June 2014Information sessions with institutions on MTEF technical guidelines and databases 19 - 27 June 2014Departments submit proposals for budget programme structure revision to NT 4 July 2014MTEC process commences 21 July 2014Budget submission from departments and public entities: narrative and database 28 July 2014ENE technical guidelines distributed to institutions 11 August 2014Public entities submit board approved annual budget to NT 01 September 2014MTEC process concludes: recommendations tabled to MINCOMBUD 30 September 2014Tabling of Medium Term Budget Policy Statement 22 October 2014Preliminary allocation letters issued to institutions 31 October 2014Ministerial comments on preliminary allocation letters 10 November 2014Submission of first draft ENE databases and chapter 14 November 2014Cabinet approved final allocations distributed to institutions 21 November 2014Submission of approved ENE chapter (sefcond draft) 05 December 2014Budget tabled in Parliament 25 February 2015

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PART 4: PCD REQUIREMENTS

The feedback required ito vacancies by critical occupation in the DOD is as follows:

•Funded Posts: 77 606

•Current strength: 78 178

•Requirement: 81 184

Budget Constraints•Improvement of Conditions of Service (ICS) not fully funded always.

•The improvement of salaries of soldiers in 2009 was not funded; having negative impacts in future years.

•Insufficient funding received from National Treasury (Rm490) for annual cost living and home owner’s allowances.

•Additional utilization of Reserves due to unforeseen circumstances, Rm500.00.

FILLING OF CRITICAL VACANCIES

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78

PART 5: FY12/13 AUDIT REPORT AND DOD ACTION PLAN

• The FY12/13 Audit Report reflects the following findings:

– Two qualifications relating to asset management iro:

Movable Tangible Capital Assets Intangible Capital Assets

– Other Matter Items include the following:

Performance Information – Force Employment Internal Audit Audit Committee Human Resource Management and Compensation Transfer of Funds Expenditure Management Procurement and Contract Management (4)

7979

OVERVIEW

AUDITEE NAME: Department of Defence ASSESSMENT PERFORMED ON: January 2014

ASSESSMENT PERIOD COVERED:

PFMA Apr – Jun’13 Jul – Sep’13 Oct – Dec’13 Jan – Mar’14 x Apr’13 – Mar’14

No. DRIVERS

Improved

Required controls that are able to prevent or detect and correct misstatements / control deviations / instances of non-compliance i, n

a timely manner, are currently in place; care is required to maintain the situation for changes in conditions

Good

ASSESSMENT

Fin

an

cia

l

Pe

rfo

rma

nc

e

Co

mp

lia

nc

e

Unchanged Progress in the implementation of controls that are able to

prevent, or detect and correct, misstatements / control deviations / instances of non-compliance in a timely manner

is noted, but improvement is still required

In progress

Regressed

Required controls that are able to prevent, or detect and correct, misstatements / control deviations/ instances of

non-compliance in a timely manner, are not in place; intervention is required to design and implement

appropriate controls

Intervention required

LEADERSHIP

Movement from previous assessment:

1.a Provide effective leadership based on a culture of honesty, ethical business practices and good governance, protecting and enhancing the best interests of the entity

1.b Exercise oversight responsibility regarding financial and performance reporting and compliance and related internal controls

1.c Implement effective HR management to ensure that adequate and sufficiently skilled resources are in place and that performance is monitored

1.d Establish and communicate policies and procedures to enable and support understanding and execution of internal control objectives, processes, and responsibilities

1.e Develop and monitor the implementation of action plans to address internal control deficiencies

1.f Establish an IT governance framework that supports and enables the business, delivers value and improves performance

N/A N/A

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FINANCIAL AND PERFORMANCE MANAGEMENT


2.a Implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting

2.b Implement controls over daily and monthly processing and reconciling of transactions

2.c Prepare regular, accurate and complete financial and performance reports that are supported

and evidenced by reliable information

2.d Review and monitor compliance with applicable laws and regulations

2.e Design and implement formal controls over IT systems to ensure the reliability of the systems and the availability, accuracy and protection of information

N/A N/A

GOVERNANCE


3.a Implement appropriate risk management activities to ensure that regular risk assessments, including consideration of IT risks and fraud prevention, are conducted and that a risk strategy to address the risks is developed and monitored

3.b Ensure that there is an adequately resourced and functioning internal audit unit that identifies internal control deficiencies and recommends corrective action effectively

3.c Ensure that the audit committee promotes accountability and service delivery through

evaluating and monitoring responses to risks and providing oversight over the effectiveness of the internal control environment including financial and performance reporting and compliance with laws and regulations

81

82

No. DRIVERS AREAS OF CONCERN RESPONSIBLE CHIEF & DIR

COMPLETION DATE

ACTION PLAN & PROGRESS STATUS/ PROGRESS

LEADERSHIP

Ser

1.b Exercise oversight responsibility regarding financial and performance reporting and compliance and related internal controls

Oversight ResponsibilitySignificant changes were made to the financial statements submitted for the 2011-12 financial year; however, leadership indicated that the proper process will be implemented to prevent a recurrence in 2012-13. Based on the review performed on the interim financial statements for the period ended 30 September and the annual financial statements received on 31 May 2013, it was evident that the review and monitoring process requires further attention. Standard operating procedures are not always communicated to the lower levels.

C Log, C Def Mat 31 May 2014 C Def Mat - Intangible Capital Assets Disclosure. The Minister approved the structure and posts for the ICA function. The Def Mat Division is busy utilising an external service provider for the training and compilation of the ICA register. The ICA policy was approved by the DOD Policy Board and the Sec Def. Awaiting CSANDF signature.

C Log - Tangible Capital Assets Disclosure.

Starting in January 2014, the asset note is being prepared on a monthly basis and reviewed for compliance, completeness and accuracy.

In progress

FINANCIAL AND PERFORMANCE MANAGEMENT

2.b Implement controls over daily and monthly processing and reconciling of transactions

Daily and monthly processing and reconciling of transactions

Monthly reconciliation between financial and asset registers was not performed. Only interim and year-end reconciliations were performed. (FMD, Log Div)

CFO, C Log, Finalised • All ground support equipment and assets acquired by means of projects have been included in the Asset Register.

• Capital components and technical publications are still subject to the benchmarking exercise, which has been extended to 31 December 2014 by National Treasury.

• A Logistic and Finance workgroup has been established where reconciliations are prepared and reviewed on a monthly basis, going forward.

Good

DOD PROGRESS REPORT ON AGSA DASHBOARD REPORT- GENERAL DEFENCE ACCOUNT: 2012/13 FINANCIAL YEARDRIVERS OF INTERNAL CONTROL TO ACHIEVE CLEAN ADMINISTRATION

83

PART 6: IMPLEMENTATION OF BUDGETARY REVIEW RECOMMENDATIONS

PCD BRR REPORT

• In Oct 2913 the PCD having considered the DOD financial and non-financial performance as well as the NT budget submission for the medium terms period, made specific recommendations.

• The DOD seeks to reflect, from its own perspective, what has been done to implement these recommendations.

• It has to be noted, however, that the implementation of some recommendations fall outside of the DOD’s competence.

84

RECOMMENDATION 1 ‘It is crucial that the Department track its quarterly expenditure to avoid

significant virements in the 4th quarter of the financial year. For instance the overspending on Training capability and the under-spending on Transport and Maritime Capability in the SDA, should be closely monitored to avoid over expenditure by the end of the financial year. Quarterly briefings by the Department to the PCODMV should therefore focus on these and similar issues’.

DOD Response

• The Department through the Plenary Defence Staff Council (PDSC) monitors departmental expenditure on a monthly and quarterly basis during the financial year to ensure funds are effectively managed.

• The Departmental Planning, Budgeting and Evaluation Committee (DPBEC) held during August each year, evaluates actual performance against the approved Annual Performance Plans (APPs), programme and budget whilst performing an oversight role on actual spending to date. Subsequent to the evaluation, recommendations are made to the PDSC to enable corrective actions and interventions as it may deem necessary to ensure budget realignment. 85

RECOMMENDATION 1

• As part of its oversight work, the Audit Committee monitors the dept’s cash flow performance and recommends intervention where necessary.

• Due however to the nature of the departmental contractual commitments, expenditure towards the end of the financial year will be higher than the

norm.

86

RECOMMENDATION 2 ‘The challenge faced by the Department in its interaction with National

Treasury, to increase its budgetary allocation, is a concern, especially against the background that National Treasury itself questions whether the Department is actually underfunded. This is due to allocations to the SDA of R4.6 billion in 2012/13 and R5.8 billion for 2013/14, which brings the total amount in SDA to R10.4 billion. This issue needs to be clarified to the PCODMV by both National Treasury and the Department’.

DOD Response• The SDA is, ito the SDA Act, utilised exclusively for the acquisition of:

– Main capital equipment;

– Armament acquisition projects managed under the Strategic Capital Acquisition Master Plan (SCAMP) including technology development;

– Sensitive projects and activities; and

– Other requirements as approved by the Accounting Officer. The SDA Act makes provision for commitments to be rolled to the subsequent

financial year with funds.87

RECOMMENDATION 2

‘DOD Response

88

SN DESCRIPTION 2012/13 2013/14a b c

R'000 R'0001 Vote 5 260 016 5 824 219 2 Less Adjustments Budget 413 640- 1 498 918- 3 Final Appropriation 4 846 376 4 325 301 4 Reserve from Previous Years 3 613 856 4 610 325 5 Total Available 8 460 232 8 935 626 6 Less: Expenditure 3 849 907 5 459 299 7 Balance SDA 4 610 325 3 476 327

RB4,610 Reserve (SN b.7) + RB5,824 Vote 2013/14 (SN c.1) = RB10,434

Reasons for the Reserve

Ability from the industry to perform to requirements placed.. Long lead times. Complex Acquisition and Approval processes.

RECOMMENDATION 3

‘The Department should include information on its payment of invoices within 30 days in each quarterly report it presents to the PCODMV in order to avoid non-compliance.

DOD Response• Information related to the payment of invoices within 30 days will be

included in each quarterly report presented to PCD &MV.

• It is to be noted that the 30 days is only applicable where invoices received from suppliers are correct and payable.

• The Sec Def commissioned an investigation to improve the 30 days payment and a report will be available in September 2014. The outcome of the investigation will provide guidance on how to improve/solve the issue.

89

RECOMMENDATION 4

‘The utilisation of funds allocated for the CAR deployment, which has been subsequently been cancelled, should be explained to the Committee’.

DOD Response

In full consultation with National Treasury the budget allocation earmarked for Central African Republic (CAR) was moved to address the operational requirements for the Force Intervention Brigade (FIB) in the Democratic Republic of Congo .

90

RECOMMENDATION 5

‘The Department, particularly the Minister and the Secretary for Defence, should ensure that investigations are conducted into financial misconduct matters as stipulated by Treasury Regulations’.

DOD Response

All reported financial misconduct cases were investigated as required by National Treasury. An instruction to comply with the financial misconduct policy: Investigation Requirements (DODI FIN/00024/2002 (2nd Edition) was issued for the purposes of further strengthening financial controls. For the FY2013/14 financial year various disciplinary cases in respect of financial misconduct were finalised, whilst other are still being investigated.

91

RECOMMENDATION 6

‘The change in the Selected Performance Indicators and Targets from year to year as well as targets and indicators having to adhere to the SMART principles as set out by National Treasury Regulations should be addressed’.

DOD Response (see next slides).

92

SMART PRINCIPLES

93

• According to the report of the Auditor-General for the year ended 31 March 2013, there were no material findings on the annual performance report concerning the usefulness of the information.

• However, the reliability of information presented for significantly important targets with respect to the Force Employment Programme could not be satisfied due to the fact that the institution (Force Employment) could not provide sufficient and appropriate evidence in support of the information presented with respect to the programme as a result of inadequate internal controls and record keeping.

• The detailed audit findings affecting the auditors report recommends that control measures should be implemented to ensure that supporting documentation is readily available and provided to auditors within a reasonable time period.

RECOMMENDATION 7 ‘The Department should improve its internal controls and record keeping

in general and specifically as it pertains to the Force Employment Programme as indicated by the A-G. The A-G will be invited to elaborate on its methodology and specifically the accuracy and relevance of their audit findings for the 2012/13 financial year’.

DOD Response• The process and basis for determining the personnel strengths in

operations have been changed to use the personnel management system to support the performance data reported rather than the operational situational reports (SITREPS).

• The changed procedure has already been implemented for all reports related to external operations. The performance reports for the first and second quarter have been amended to ensure that the performance information for the FY2013/14 is aligned with the new procedures.

.

94

RECOMMENDATION 8 The Department is in the process of establishing and filling

the posts of the Internal Audit function and this process should be speeded up as it is central to pro-active measures to improve the performance of the Department, especially as it pertains to issues raised in the A-G’s qualified audit opinion. This will also assist in executing the action plans drafted to address the audit findings.

DOD Response• A three year budget for 2013/14 and 2014/15 respectively was

approved. The posts of the Secretary and the Office Manager were staffed.

• The posts of the internal auditors (Assistant Directors, Deputy Directors and Directors) were advertised, shortlisted and interviewed. The posts are currently being processed through the vetting process as required by relevant public service regulations. 95

RECOMMENDATION 9 The current Defence Review should be finalised as a matter of urgency

especially against the background that it will help to resolve most of the challenges faced by the Department. For instance, progress with the modernisation of the Landward defence capability remained stagnant, although it has been identified as a priority for the last five years, because the Defence Review has not been finalised.

DOD Response. Cabinet approved the South African Defence Review 2014, and

directed that it be tabled in Parliament. The Review provides a long term Defence Policy and Defence Strategic Trajectory to be pursued by the country over the next four Medium Term Strategic Framework periods

The DOD is currently developing the DR implementation Plan. Detailed planning, deliverables’ mapping, budget estimation, controls and programming are required if the intent of the DR is to be realised. 96

RECOMMENDATIONS

The lack and poor condition of Facilities are a main concern and the Committee recommends that the establishment of the Defence Work Capability should be finalised as soon as possible and that the negotiations with DPW for the repair and maintenance responsibilities to be moved to the DODMV be prioritised.

DOD Response•The MOD&MV authorised the structure and plan of the Defence Works Capability (DWC).

•The MOD&MV has commenced negotiations with the Minister of NDPW with a view of getting a commitment for the devolution of certain functions and funds from the NDPW to the DOD.

•To that end, a draft MOU has been prepared by the DOD. This is currently being considered by the NDPW.

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989898

THANK YOU

dod presentation to the pcd&mv department of defence 2014 annual performance plans

Documents

defence act

defence constitution

defence secretariat

pcdmvdepartment of defence

dod visioneffective

defence amendment act

defence service commission

military command section