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KWAZULU-NATAL PROVINCIAL TREASURY: VOTE 6

KZN Provincial Treasury 2014/15 Annual Report - 1 -

TABLE OF CONTENTS

PART A: GENERALINFORMATION

A.1 Foreword by the MEC of Finance

A.2 Introduction by the Head of Department

A.3 Vision, Mission and Values

A.4 Legislative and Other Mandates A.5 Strategic Outcome Oriented Goals

PART B: PROGRAMME PERFORMANCE

B.1 Programme 1: Administration

B.2 Programme 2: Fiscal Resource Management

B.3 Programme 3: Financial Management

B.4 Programme 4: Internal Audit

B.5 Programme 5: Growth and Development

PART C: GOVERNANCE INFORMATION

C.1 Introduction

C.2 Risk Management

C.3 Fraud and Corruption

C.4 Minimising Conflict of Interest

C.5 Code of Conduct

C.6 Health and Environmental Issues

C.7 Portfolio Committee

C.8 SCOPA Resolutions

C.9 Prior Modifications to Audit Reports

C.10 Internal Control Unit

C.11 Internal Audit and Audit Committees

PART D: HUMAN RESOURCE MANAGEMENT

D.1 Expenditure D.2 Employment and Vacancies

D.3 Job Evaluation

D.4 Employment Changes

D.5 Employment Equity

D.6. Performance Rewards

D.7 Foreign Workers

D.8 Leave Utilisation

D.9 HIV and Aids and Health Promotion Programmes

D.10 Labour Relations

D.11 Skills Developments

D.12 Injury on Duty

D.13 Utilisation of Consultants



PART E: FINANCIAL INFORMATION

E.1 Report of the Accounting Officer

E.2 Report of the Auditor-General

E.3 Appropriation Statement

E.4 Notes to the Appropriation Statement

E.5 Statement of Financial Performance

E.6 Statement of Financial Position

E.7 Statement of Changes in Net Assets

E.8 Cash Flow Statement

E.9 Accounting Policies

E.10 Notes to the Annual Financial Statements

E.11 Disclosures Notes to the Annual Financial Statements

E.12 Annexures to the Annual Financial Statements



PART A: GENERAL INFORMATION

A1: FOREWORD BY THE MEC OF FINANCE, MS BFSCOTT

It is essential for the KZN Provincial Government to provide citizens with quality service delivery. In

light of the prevailing economic, political and social challenges - with the rise in poverty,

unemployment and inequality - Government understands that it has to step up its efforts in this

regard.

Since Government understands that its success will be measured by the effort invested in the

quality of service delivery, Provincial Treasury plays a fundamental role in ensuring that service

delivery expectations are implemented. The most important pre-requisites are strict budget

discipline, prudent financial management and integrity.

Government is confronted with a fragile economic environment and a declining equitable share

allocation, which limits the availability of state revenue and resources. Despite the recent census

data cuts and the subsequent implementation of fiscal consolidation measures in the country, which

are amongst the many challenges we face, our determination as Government to deliver a better life

for all remains paramount.

Provincial Treasury has tightened controls on expenditure management, to ensure that departments

and public entities remain within budget. We are totally committed to protecting public funds and

combating fraud and corruption.

Provincial Treasury has mechanisms in place to allocate and monitor expenditure on a monthly

basis so as to check that funds are spent prudently and in line with government priorities.

Treasury’s performance in the last financial year indicates that we have made significant strides

towards reaching our goal to be the centre of excellence in financial and fiscal management in the

country.

While challenges prevail, we draw inspiration from former President Nelson Mandela’s words that “it

always seems impossible until it’s done”

Signed by

Ms BF Scott

MEC for Finance



A.2: INTRODUCTION BY THE HEAD OF DEPARTMENT

The year under review has had various important milestones in the history of public administration in

this country. The most important of them all was reaching 20 years of democratic government. In

the case of KwaZulu-Natal, this was marked by celebrations in various parts of the province

highlighting the key achievements that this government has made over the past 20 years of

democratic government, helping to change the lives of the communities.

By the same token, the country will be celebrating 15 years of democratic local government and we,

in KZN Treasury, are proud of our involvement with municipalities in this province over many years

through our Municipal Support Programme (MSP).

In line with the provision of the Constitution, Section 154 (1), the KZN Treasury established The

Municipal Support Programme in order to strengthen its support to municipalities. This section of the

Constitution requires provincial and national governments to support and strengthen the capacity of

municipalities to manage their own affairs, to exercise their powers and to perform their functions.

To this end, the Provincial Treasury developed this focused programme.

The main objective of MSP is to support municipalities where their financial stability is threatened

and implement turnaround strategies that would ensure that municipalities remain financially viable.

This programme has been successfully implemented in a number of municipalities in KwaZulu-

Natal.

Moreover, in 2013, KZN Treasury entered into a partnership with the South African Institute of

Chartered Accountants (SAICA) by making a R16 million investment in the Thuthuka Bursary Fund

that is managed by SAICA.

Through this initiative, bursaries were offered to qualifying African and Coloured Grade 12 learners

in KwaZulu-Natal province who wish to pursue a career as Chartered Accountants but do not have

the financial resources to do so.

This initiative saw students recruited from all 61 municipal areas of the province to study towards

Chartered Accountancy at various tertiary institutions. Upon completion of their studies, they will be

deployed to their respective municipal areas (from where they were recruited) in order to serve in

financial management positions.

This is a strategic investment that KZN Treasury has made in a bid to ensure that we improve

financial management in the public sector, particularly in municipalities.



It is for this reason that, as KZN Treasury, we are proud of the hard work that has gone into

strategies of ensuring the financial viability of our municipalities.

It is these types of strategies and investments that KZN Treasury is driving in order to ensure that

when we celebrate 15 years of democratic local government, we can boast about the number of

clean audits that municipalities get.

At KZN Treasury, we remain focused, as we have been during 2014/15 financial year, on improving

governance at all levels of the public administration through various strategic financial management

initiatives, as a result the department has had 5 “Clean” Audit Opinion in a row including the year

under review and this indicates how serious the department takes good governance.

Signed by

Mr LS Magagula

Head: Provincial Treasury



A.3: Vision, Mission and Values

a) Vision

Be the centre of excellence in financial and fiscal management in the country.

b) Mission

We, the KZN Provincial Treasury, seek to enhance the KwaZulu-Natal Provincial Government

service delivery by responding to the expectations of all stakeholders in the value chain as a

key driver through:-

Optimum and transparent allocation of financial resources whilst enhancing revenue

generation and financial management practices in compliance with applicable legislation and

corporate governance principles;

Our competent and dedicated employees who are at centre of ensuring best value of our

stakeholders.

c) Values

The core values of the department are as follows:

Responsibility

Efficiency

Service Excellence

Financial Discipline

Professionalism

Integrity

Respect

Loyalty

A.4: Legislative and Other Mandates

The department is governed by the following pieces of legislation and policy directives:

The Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996)

Public Finance Management Act (Act No. 1 of 1999, as amended).

Municipal Finance Management Act (Act No. 56 of 2003)

Promotion of Access to Information Act (Act No. 2 of 2000)



Annual Division of Revenue Act Provincial Appropriation Act

Preferential Procurement Policy Framework Act (Act No. 5 of 2000)

Intergovernmental Relations Framework Act (Act No. 13 of 2005)

Borrowing Powers of Provincial Governments Act (Act No. 48 of 1996)

Government Immovable Asset Management Act (Act No. 19 of 2007)

Public Audit Act (Act No. 25 of 2004)

Provincial Tax Regulation Process Act (Act No. 53 of 2001)

KwaZulu-Natal Gaming and Betting Act (Act No. 08 of 2010)

KwaZulu-Natal Gaming and Betting Tax Act (Act No. 9 of 2010)

4.1 Constitutional Mandates

Sections 213, 215, 216, 217, 218, 219, 226, and 228 of the Constitution of the Republic of South

Africa (Act 208 of 1996) deal with general financial matters for the national and provincial spheres of

government. These sections require the national legislation to give effect to the following;

i. To establish a national treasury,

ii. To introduce generally recognised accounting practices,

iii. To introduce uniform treasury norms and standards,

iv. To prescribe measures to ensure transparency and expenditure control in all spheres of

government, and

v. To set the operational procedures for borrowing, guarantees, procurement and oversight over

the various national and provincial revenue funds.

4.2 Legislative Mandates

The following pieces of legislation that give mandate and outline the key responsibilities on the

department are as follows:

4.2.1 Public Finance Management Act (Act No. 1 of 1999, as amended) and its regulations

The Act promotes the objective of good financial management in order to maximise delivery through

the efficient and effective use of limited resources.

The key objectives of the Act may be summarised as being to:

a) Modernisethe system of financial management;

b) Enable public sector managers to manage, but at the same time be more accountable;



c) Ensure the timely provision of quality information; and

d) Eliminate waste and corruption in the use of public assets.

4.2.2 Municipal Finance Management Act (Act No. 56 of 2003)

Chapter 2 of MFMA outlines the general functions of National and Provincial Treasuries.

Section 5(3) and (4) of the MFMA highlight the supervisory responsibilities of Provincial Treasuries in

relation to ensuring sound and sustainable management of the fiscal and financial affairs of

municipalities and municipal entities by establishing norms and standards and other requirements.

To the extent necessary, to comply with its responsibilities in terms of the MFMA, a provincial treasury:

a) must monitor:

i. compliance with the MFMA by municipalities and municipal entities in the province;

ii. the preparation by municipalities in the province of their budgets;

iii. the monthly outcome of those budgets; and

iv. submission of reports by municipalities in the province as required in terms of the MFMA;

b) may assist municipalities in the province in the preparation of their budgets;

c) may exercise any powers and perform any duties delegated to it by the National Treasury in

terms of the MFMA; and

d) may take appropriate steps if a municipality or municipal entity in the province commits a

breach of the MFMA.

4.2.3 Promotion of Access to Information Act (Act No. 2 of 2000)

Section 14 requires the department to produce a manual with detailed information about the

department’s procedure to access it, the form to be used and which information is readily available

and which needs to be requested. Section 32 of the Act stipulates that the department must submit an

annual report to the Minister of Justice detailing requests received, those acceded or rejected and

reasons for rejection.

4.2.4 Annual Division of Revenue Act

a) This Act provides for the equitable division of revenue anticipated to be raised nationally

among the national, provincial and local spheres of government.

b) It promotes better co-ordination between policy, planning, budget preparation and execution

processes between and within the different spheres of government.



c) It promotes predictability and certainty in respect of all allocations to provinces and

municipalities in order that such governments may plan their budgets over a multi-year period.

d) It promotes transparency and equity in the resource allocation process.

e) It promotes accountability by ensuring that all allocations are reflected on the budgets of

receiving provinces and municipalities.

4.2.5 Provincial Appropriation Act

These Acts provide for the appropriation of money from the Provincial Revenue Fund for the

requirements of the Province.

4.2.6 Preferential Procurement Policy Framework Act (Act No. 5 of 2000)

This act gives effect to Section 217 (3) of the Constitution by providing a framework for the

implementation of procurement policy.

The framework for the implementation of preferential procurement policy requires all organs of state to

have their preferential procurement policy and implement them within a prescribed set of criteria that

applies preference points system with emphasis to previously disadvantaged groups.

4.2.7 Intergovernmental Relations Framework Act (Act No. 13 of 2005)

The object of this act is to provide within the principle of co-operative government set out in Chapter 3

of the Constitution a framework for the national government, provincial governments and local

governments, to facilitate co-ordination in the implementation of policy and legislation, including:

(a) Coherent government;

(b) Effective provision of services;

(c) Monitoring implementation of policy and legislation; and

(d) Realisation of national priorities.

4.2.8 Provincial Borrowing Powers Act (Act No. 48 of 1996)

This Act provides for norms and conditions in respect of the borrowing powers of Provincial

governments and for matters incidental thereto.



4.2.9 Government Immovable Asset Management Act (Act No. 19 of 2007)

The department has a responsibility to implement all applicable sections of this Act in managing its

immovable assets or when providing support and advisory services to the provincial departments.

4.2.10 Public Audit Act (Act No. 25 of 2004)

The department has a responsibility to comply with all applicable provisions of the Public Audit Act as

an auditee.

4.2.11 Provincial Tax Regulation Process Act (Act No. 53 of 2001)

This Act provides the regulation of intergovernmental process that must be followed by provinces in

the exercise of their power in terms of section 228 of the Constitution to impose taxes, levies and

duties, the flat-rate surcharges on the tax basis of any tax, levy or duty imposed by national legislation;

and to provide for connected therewith.

4.2.12 KwaZulu-Natal Gaming and Betting Act (Act No. 08 of 2010)

This act provides for the regulation of gaming, horse racing and betting in the Province of KwaZulu-

Natal.

4.2.13 KwaZulu-Natal Gaming and Betting Tax Act (Act No. 9 of 2010)

This Act provides for the payment of taxes by persons licensed in terms of the KwaZulu-Natal Gaming

and Betting Act, 2010

4.3 Policy Mandates

The following policies outline the key responsibilities for the department:

(a) PPP policy, this policy provides guidelines for administration and managing Public Private

Partnership’s transactions in the public sector environment.

(b) SCM and PPPFA policy, this policy provides guidelines for the administration of a Supply

Chain Management in line with broad government objectives. It also aims at promoting

emerging enterprises with particular emphasis on black economic empowerment.

(c) Budgeting process policies, they provide framework within which budgeting process must be

managed in the public sector in line with the relevant Acts.

(d) Treasury Regulations, provides procedural guidelines of implementation of the Public Finance

ManagementAct (Act 1 of 1999 as amended by Act 29 of 1999).



4.4 Service Delivery Improvement Plan

HR OVERSIGHT - APRIL 2014 to MARCH 2015 - KwaZulu Natal - Finance

TABLE 1.1 - Main Service for Service Delivery Improvement and Standards

Main Services Actual Customers Potential Customers Standard of Service

Actual Achievement against Standards

Recruitment & HR Admin

Staff and Prospective Graduates, Government Employees and members of the Public

100% compliance to standards contained in the Service commitment Charter

100%

Human Resource Development

Staff and learners Graduates 100% achievement of WSP strategies 108.50%

Human Resource Planning

Staff and Prospective Prospective 100% achievement of HRP strategies 98.37%

EH&W Staff 0 Referrals within 5 days and 4 information seminars

100% and 6 information seminars

Policy Development Staff Prospective 8 policies and 8 seminars 17 policies and 10 seminars

TABLE 1.2 - Consultation Arrangements for Customers

Type of Arrangement

Actual Customer Potential Customer Actual Achievements

Consultative Forum

Organised labour & representatives of every Business Unit within the Department.

n/a Conducted 4 Meetings

Customer surveys Treasury staff n/a 1 Survey

Exit Interviews Exiting Employees n/a 15 Exit Interviews



TABLE 1.3 - Service Delivery Access Strategy

Access Strategy Actual Achievements

HR Portal developed and continuously maintained

Fully updated portal

TABLE 1.4 - Service Information Tool

Type of Information Tool

Actual Achievements

Information Seminars 16 seminars.

HR Portal developed and continuously maintained

Fully updated portal

TABLE 1.5 - Complaint Mechanism

Complaint Mechanism

Actual Achievements

Complaint procedure 100% compliant

HR Customer Services

100% per charter



4.5 Organisational Environment

The 2014/15 financial year was the second year that the province was affected by the Census data

cuts, with these cuts first being implemented in 2013/14. This meant that the province still continued to

operate in an extremely fiscally constrained environment which necessitated that departments look at

reprioritisation rather than new funding to finance their spending programmes. In addition, the cost-

cutting measures first introduced in 2009/10 continued to remain in place. The other factor that

severely affected the province’s fiscal resources was the fact that National Treasury announced that

the country was entering a period of fiscal consolidation with the first step in this regard being that

provinces were not compensated for the above-budget 2014 wage agreement and had to fund the

impact of this wholly from within their existing baselines. The wage increment was budgeted at 6.4 per

cent but was implemented at 7.4 per cent. This 1 per cent differential amounted to R580 million that

the provincial departments in KwaZulu-Natal had to “find” within their baselines. Dealing with these

fiscal shocks required Provincial Treasury to:

Monitor expenditure more closely to ensure that the province does not overspend its budget,

Continue to implement the cost-cutting measures to eliminate unnecessary spending.

These measures ensured that the province delivers on its mandate despite the reduced budget.

A 5. Strategic Outcome Oriented Goals

The strategic goals of the Provincial Treasury are as follows:

To promote sound financial and fiscal management and good governance.

To place strong emphasis on fighting poverty and creating jobs in partnership with provincial

departments through procurement targeting.

To focus on the enhancement of broad-based BEE through effective Supply Chain

Management policies.

To implement a policy on zero tolerance on fraud and corruption.

To ensure good financial management with the elimination of over-expenditure and the

reduction of rollovers.

To target government investment in service delivery.

To promote sound cash management practices and improve liquidity in the province.


PROGRAMME PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2015


PART B: PROGRAMME PERFORMANCE

B.1 Programme 1: Administration

Purpose: The purpose of this programme is to provide service support to the core programmes

within the department.

The Strategic Objectives are:

1. To provide strategic administrative and political leadership, in order to ensure effective and

efficient service delivery as mandated by government.

2. To provide strategic financial leadership support, effective financial management, human

resources, corporate services, and information systems services to the department.

3. To ensure effective management of the department’s financial resources in line with the

statutory requirements.

4. To provide strategic human resources management support services to the department

and to ensure compliance with relevant National and Provincial legislative mandates.

Service Delivery Achievements:

Office of the MEC

Gaming and Betting

The transfer of Gaming and Betting and shift of functions, budget and staff to KZN Provincial

Treasury was successfully managed under leadership of the MEC and HOD. In similar vein, a

financial shift of budget was facilitated for Environmental Affairs and KZN Ezemvelo Wildlife to

Economic Development and Tourism.

Processes for replacing the Gaming and Betting Board who was on the last lap of their term of

office were started and new Board inaugurated early in 2015/16 financial year.

We initiated a legal process of amending the KwaZulu-Natal Gaming and Betting Act, 2010 and

Tax Act. The Legislature will shortly hold public hearings on the KwaZulu-Natal Gaming and

Betting Amendment Bill, 2015. This will create a better context within which to consider

applications that may have a serious negative socio-economic impact.




Financial Literacy

Financial Literacy initiative of KwaZulu-Natal Financial Literacy Association (KZNFLA) that

started a few years ago with immense success rate within the province, nationally and beyond

gradually matured and graduated into Non-profit Organisation (NPO) at the beginning of

2015/16 financial year. A board of directors was established, staff hired and operations relocated

from MEC’s Office to privately rented premises where the KZNFLA corporate identity as a brand

is being nurtured. The partnership of the KZNFLA with Treasury continues in terms of financial

support, participation in the board and events. The Association is now in a position to raise its

own funds and acquire assets to further push barriers of financial literacy within the identified

focus areas (In-school youth, Out of school youth, SMMEs, Government Employees, Traditional

Leadership, Women and Vulnerable group). The initiative that was pioneered by the MEC for

Finance in the province has increased its influence and footprint to other provinces and National

Treasury.

Cost Cutting Measures

In view of the fiscal consolidation cuts implemented on provinces by National Treasury, the MEC

successfully sought and obtained support of the Executive to implement revised cost cutting-

measures to contain expenditure and protect service delivery in the province. The initiative

culminated in Treasury Circular no PT(3) of 2015/16 that was issued to all departments and

public entities.

Outreach Events

The MEC for Finance has re-configured the Department’s Outreach Campaigns which used to

be in a form of gatherings in community halls, with catering for the masses, transport, toilets,

music system, among others, which usually result in a huge expenditure that is attached to this

nature of the outreach.

The new approach, according to the MEC, entails reaching out to NGOs and NPOs or some

legitimate (registered with the provincial Department of Social Development) social formations,

for example, that serve poor or challenged communities. In the list of needs, (since some of

these Institutions are not funded) one or two is /are identified and attended to by the Department

or a sponsor is sought to address that particular need.




Infrastructure Crack Team

The provision of infrastructure is integral in the realisation of government’s goal to provide basic

services to all South Africans. However, low capital expenditure by departments and

municipalities necessitated the establishment of an infrastructure support initiative. The so-called

crack team was established in 2011 to assist departments and municipalities to deliver cost

effective and efficient infrastructure in the province. The panel consisted of 18 built environment

professional companies which included engineers, town planners, architects, project managers,

and quantity surveyors. The initial 3 year contract ended in December 2014; however a new 3

year contract has been concluded with 25 built environment professional companies.

The objective of the team is to assist both provincial Departments as well as Municipalities in the

identification and unblocking of bottlenecks in the delivery of the essential infrastructure services

to communities. The following are some statistics with respect to the past 3 years:

o 28 different deployments

o 67 appointments

o R63m worth of appointments

o Worked in all 11 districts

o No individual company received more than 14% of the appointments

o On average each company received R850k worth of appointments

o BEE companies received on average 48% of all appointments

o Infrastructure expenditure by departments improved significantly from 2010/11

financial year (R600m under expenditure) to almost 100% expenditure in 2014/15

financial year

o Infrastructure expenditure by municipalities supported by the crack team improved

from 12% to 16% during the 1st quarter of 2014/15 compared to same period 2013/14

Provincial Regional Technology Hub Project

The Department has received a total amount of R120m over the MTEF from the General Budget

Support (GBS) Programme (2014/15, 2015/16 and 2016/17).The project is for the

establishment, financing, designing, constructing and operating of four regional innovation and

technology hubs in the province. These hubs will be established in the following strategic

economic nodes in KZN i.e. Pietermaritzburg, Newcastle, Port Shepstone and Richards Bay.

Significant progress has been achieved at all four sites. In short:

o The four regional innovations forums are established and working




o The provincial steering committee is established and working

o Potential tenants and investors have been identified per site and have been

approached

o Management options have been developed for each site

Progress on the Kokstad projects

There are two main structures each housing 8 light industrial (back side) and 8 commercial (front

side) spaces. The size of each space (industrial and commercial) is 48m². There are no fittings

except electricity points in each space. The industrial space have roll-up doors whilst the

commercial space has normal doors. The project is completed on time and on budget. On

average the project employed about 34 previously unemployed Kokstad youth for a minimum of

three months each. The professional team and contractor were Kokstad based companies. No

outside companies and/or skills were used. About 80% of all materials were sourced in Kokstad.

The Shayamoya Eco Complex is located next to the road from Underberg into Kokstad. It is

located next to the Shayamoya village. The park consists of the following facilities:

1. Tranquillity centre (water feature and grass area)

2. Amphitheatre (open theatre, 250 people capacity)

3. Open Fitness area (open gym)

4. Kiddies Play area

5. Green House

6. Offices

The project also rehabilitated the nearby wetland and a stream. The project employed on

average about 12 previously unemployed youth from the Shayamoya village, with an estimated

28 at peak construction. The project had a local project liaison officer which was from the

Shayamoya village that mobilized the community to take ownership of the park. The

professional team was from Kokstad. Although the contractor was from Johannesburg the

company moved its operation to Kokstad for the project. It’s estimated that about 65% of all

materials were sources in Kokstad.

Nhlalakahle Electrification Project

Over the years there has been growth in the number of informal settlements in and around the

Msunduzi Municipality’s municipal boundary as people migrate from rural areas to the city in

seek of employment or other business opportunities. This has led to an increase in the number




of illegal electrical connections in informal settlements as settlement dwellers steal electricity

from nearby distribution boxes. Desperation has led the settlement dwellers to illegally connect

electricity to their dwellings by illegally redirecting electricity from nearby electrical sources into

their shacks. The lives of people are in danger as they go about their daily business. This has

led to Msunduzi Council deciding to formally forward applications for funding to electrify these

areas. The objectives of the project included the following:

o Improved network reliability

o Public lighting installed

o Compliance with Statutory Legislation

o Temporary job creation

o Enhanced quality of life by providing safe access to electricity

o Increase Council revenue from electricity sales

The project was completed on time and on budget (R5.5M).

Administrative achievements

A further rationalization was implemented in the Office of the MEC regarding the following:

o cut down number of public events

o minimal support staff to accompany the MEC

o cut on overnight accommodation

o abolishing of vacant posts

o no use of marquees

Office of the Head of Department

This sub-programme provides support to the Executive Authority in providing strategic and

political direction to provincial department, municipalities and public entities.

Some achievements of the Office of the Head of Department are:

(a) The Office of the Head of Department continues to ensure that the department fulfils its

mandate in terms of the PFMA & MFMA. This includes facilitating the tabling of the

MTEF and Budget Adjustment process to Cabinet

(b) The HOD continues without fail to emphasise the need to save by continuing with the

implementation of the cost cutting measures that have bared fruit and be embraced at a

National level

(c) The Head of department also continues to be very instrumental in the implementation of

key projects that have an impact on financial management and social governance in




KZN, such as the Provincial Recovery Plan, Contract Management and E-Procurement

Tool

(d) The Head of department provides strategic leadership in policy development through his

co-chairmanship of the Economic Sector and Infrastructure Development Cluster and his

participation in various policy discussion on financial management and economic

development

(e) The office of the HOD had been very instrumental in driving certain programmes namely

which had received a good success over the 2014/15 financial year:

o Minimum Competency Regulation

o Municipal Finance Internship Programme

o Operation SukumaSakhe

Through the Minimum Competency Regulation, the Office of the HOD had been

active in ensuring that KZN Municipalities conform with the Minimum Competency

Regulation in tracking the level of compliance by municipal managers, chief financial

officers and supply chain managers and a significant positive shift in a number of

affected officials within municipalities have attained the required minimum

competencies

Municipal Finance Internship Programme, which seeks to assist municipalities to

develop the knowledge and skills of the interns employed under this programme in

areas such as strategic planning and management, municipal budgeting and finance.

The office of the HOD had been able to roll out a very successful MFMA Induction

programme aimed at finance interns and new officials with the budget and treasury

office in municipalities. This induction programme gave participants an exposure on

municipal finance management

The Head of Department’s active role in OSS Champion of Ethekwini District saw an

increase in the number of established war rooms, wherein 96 war rooms were

established in the Ethekwini District

Through the school adoption programme, the HOD managed to donate 10 used

computers in order to enhance technological skills to primary school learners and

also procured 250 school shoes and socks as a donation to the identified poor

learners from different school in Ethekwini Districts

(f) The HOD has also been active in his participation in the financial government summits

which are convened in conjunction with the Office of the Premier as part of the strategy

to reduce the over-indebtedness of government employees, these summits have been




conducted in various Districts of KwaZulu Natal and through these financial education

summit the province has seen a reduction in a number of emolument orders issued to

government employees across all KZN Provincial Departments.

(g) Lastly the HOD has set the tone for good financial management in Treasury, hence the

department has received 5 “Clean” Audit Opinions from AG.

Office of the CFO

The objectives of this unit are to render financial and supply chain management functions to

Provincial Treasury.

Some achievements of the Office of the CFO include the following:

The Treasury internal control unit has been responsible for the reviewing of all invoices

submitted for payment by external service providers. The unit has been able to prevent,

detect and correct any internal control deficiencies.

Revenue collected in the 2014/15 financial year increased due to the transfer of Gaming

and Betting function from Office of the Premier to Provincial Treasury.

An average of 98% of all invoices received were settled within prescribed 30 days period as

per treasury regulations.

The department continued to maintain an error free asset register, there were no audit

findings raised in this area of work.

The CFO office has facilitated the departmental audit and received fifth consecutive clean

audits, and it is optimistic that a sixth clean audit will be achieved for the 2015/16 audit. All

audit issues raised during the previous audit were resolved timeously.

The budget of the department was managed successfully and there was no over spending.

Corporate Services

This sub-programme contains various support services to ensure that the service delivery units

of Provincial Treasury have the required telecom system, transport fleet, etc. to support their

operations. Besides this, though, the Human Resource Management unit within Provincial

Treasury provides strategic human resources management and development support services

to the department and ensures compliance with relevant national and provincial legislative

mandates.




Human Resource Management

Achievements for 2014/2015 are as follows:

During 2014/2015, the Human Resource Management Directorate fulfilled all of its legislative

mandates and delivered an efficient and professional Human Resources function to the

department. The Unit’s success in HR legislative compliance was further recognized through

the MPAT assessment administered by the Office of the Presidency, where the Unit was

identified as a top performer in respect of KPA3 – Human Resource Management at both a

National and Provincial level.

The unit has successfully implemented all planned Human Resource Planning strategies for

the year, thereby ensuring a well capacitated and healthy workforce that is appropriately

skilled and empowered.

The unit has exceeded its requirements in terms of empowering the organisation as a whole

on all Human Resource related knowledge and information in terms of the number of policies

that were developed and work-shopped. The organisation as a whole is 100 per cent

compliant to all requirements of the performance management and development system,

which is efficiently and professionally implemented and monitored by the Human Resources

Directorate.

Succession planning within the department, aimed at increasing the pool of female

candidates, has been successfully implemented and monitored in respect of the following

scarce skilled posts; the Provincial Accountant-General; the Senior Manager and Deputy

Manager – Banking within the Financial Assets and Liabilities Unit.

The Employee Health and Wellness Section within HRM continues to make a visible impact

on the lives of employees by undertaking a door to door campaign in 2014, with noticeable

improvements in the planning of the Departments Wellness and Sports days. Monthly

articles instilling responsible life style disease management as well as encouraging physical

fitness and awareness are distributed throughout the Organization and have been extremely

well received.

There had been a significant reduction in the number of grievances and misconduct cases

within the Department which is largely attributed to the monthly articles that stem from the

Labour Desk of the Directorate as well as engagements at Line Directorate meetings to




empower both staff and management on the managing of sound employer/employee

relations.

The Unit continues with strategies to rigorously reduce its vacancy rate and at the same

time improve EE targets of women in management and people with disabilities. There has

been an improvement in all 3 areas since the last reporting period viz vacancy rate of 14%,

38% women at SMS and 1.02% People with disabilities. Integrated efforts of the sections

within HRM during 14/15 has ensured a strong drive for policy compliance, eradication of

fraud and corruption, responsible sick leave management, well aligned Departmental

structures, adequately skilled employees and a healthy and well informed workforce.

Provincial Treasury’s partnership with SAICA on the Thuthuka Bursary Fund, where

Treasury is sponsoring 100 previously disadvantaged students studying to become

Chartered Accountants is in its third year since inception. The program is yielding positive

results which at the end will ensure the necessary skills within departments, municipalities

and entities, to assist with prudent financial and fiscal management. The department has

budgeted R16 million for this project. In line with this initative the Department is in the

process of obtaining SAICA accreditation to become a training office in order to implement

the Training Accountant Program in 2016.

The Department continues with its empowerment strategy for women in the form of the

management training program for unemployed Chartered Accountants who are employed

for a three year duration and empowered with the necessary management competencies

and skills at MMS and SMS level, thereby empowering them to compete equally for

management vacancies within the Department and the open labour market at large. A

further three candidates were recruited during 2014.




PROGRAMME ONE: ADMINISTRATION

1.1 Office of the MEC: To provide strategic administrative and political leadership, in order to ensure effective and efficient service delivery as mandated by government.

Programme / Sub-programme Output

Performance Measures

1st Qtr Planned Output

1st Qtr Actual Output

2nd Qtr Planned Output

2nd Qtr Actual Output

3rd Qtr Planned Output

3rd Qtr Actual Output

4th Qtr Planned Output

4th Qtr Actual Output

Target for 2014/15 as per APP

Actual Output 2014/15

Attendance of Budget Council meetings

75% Attendance of schedule Budget Council Meetings

1 0 1 3 1 3 1 2 4 8

Attendance of Provincial Cabinet and Legislature meetings

90% attendance of Provincial Cabinet and Legislature meetings scheduled

10 10 10 10 10 10 10 10 40 40

Publications Number of publications

1 9 1 9 1 9 1 20 4 47

Articles and news bulletins published for free

Free Publicity (news bulletins and articles)

20 21 20 21 20 1 30 1 90 44

Media briefings on service delivery

Media briefings on service delivery

1 1 1 1 1 1 1 1 4 4

1.2 Office of the HOD: To ensure effective leadership, management and technical support to the Provincial Treasury through continuous refinement of organisational

strategy and structure in compliance with appropriate legislation and best practice













Cabinet memoranda on budget performance approved by the MEC and tabled at Cabinet per quarter

Cabinet memoranda on budget performance approved by the MEC and tabled at Cabinet

1 budget performance report to

Cabinet


Cabinet


Cabinet

1 Budget performance report to

Cabinet


Cabinet

1 Budget performance report to

Cabinet

1 budget performance

report to Cabinet

1 Budget performance

report to Cabinet

4 Budget performance reports

to Cabinet

4 Budget performance reports to Cabinet

Tabling of MTEF, Adjustment budget in terms of PFMA at the Legislature and Cabinet

Facilitate and Co-ordinate the tabling of MTEF, Adjustment budget in terms of PFMA at the Legislature and Cabinet

NA NA NA NA

Budget Adjustment

tabled at the

Legislature and Cabinet

Budget Adjustment

tabled at the


Table EPRE tabled at the

Cabinet

EPRE tabled at the

Legislature

EPRE and Adjustment Budget tabled to Legislature

and Cabinet

EPRE and Adjustment Budget tabled to


Representation of KZN in National Meetings

Represent KZN at the National Budget Council

Attend all national budget council

meetings

1 Technical Committee

on Finance(TCF) Meeting


meetings

1 Budget Council Meeting


meetings

1 Budget Council Lekgotla


meetings

1 Budget Council

Meeting and 1 TCF Meeting


meetings

Attended all National Budget Council meetings

as invited




1.3 Office of the CFO: To ensure effective management of the departmental financial resources in line with statutory requirements













Financial Management Support Plan

Compile budget submission and strategic planning documents (EPRE; APP*4; AR; PP; ADJ Est; CF; SP & MTEF)

2 2 4 4 2 2 3 3 11 11

Financial Management Support Plan

Provide legislative financial reports ( IYM*12; QPR*4 & AFS*1)

5 5 4 5 4 5 4 5 17 20

Number of reports produced

Supply Chain Management compliance reports

3 3 3 3 3 3 3 3 12 12

Implemented Financial Reform

Updated asset register – Asset count

N/A N/A 1 0 N/A 1 1 1 2 2

1.4 Human Resource Management and Development: To provide optimal Human resource services to the Department













HR Charter % of HR services as per HR Charter

100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

HR Service Seminars Number of HR seminars

2 sessions 2 HR

Seminars 2 sessions 3 sessions 2 sessions 3 sessions 2 sessions 2 sessions 8 sessions 10 sessions

HR Seminars (EWP) Number of EWP seminars

1information seminar

2 EWP Seminars

1 seminar 2

information seminars

1 seminar 1

information seminar

1 seminar 1 information

seminar 4 information seminars 6 information seminars

HR Policy Sessions

Number of policies developed/ Reviewed and seminars conducted

2 policies and 2

seminars

3 Policies and 2

Seminars

2 policies and 2

seminars

5 policies and 3

seminars

2 policies and 2

seminars

3 policies and 3

seminars

2 policies and 2

seminars

4 policies and 2 seminars



HR Resource, Workplace Skills and Employment Equity Plans

% achieved from the Human Resource Plan and Workplace Skills Plan

100% HRP=98%; WSP=95%

100% HRP

=98.5%; WSP=117%

100% HRP=97%; WSP=118

% 100%

HRP=100%; WSP=104%

100% HRP=98.38% & WSP=108.50%




B.2 Programme 2: Fiscal Resource Management

This programme consists of three service delivery units, namely Economic Analysis and

Infrastructure, Public Finance and Municipal Finance. The main aim of the programme is the effective

management and monitoring of the provincial and local government fiscal resources and budget

processes. It also includes the management of the Infrastructure Crack Team. The achievements of

the teams responsible for these functions are commendable, and include the successful maintenance

of the cost-cutting measures and the resultant provincial positive cash balance. These teams play a

pivotal role in the continued improvement of fiscal stability in the province.

Economic Analysis and Infrastructure

Service Delivery Achievements

This sub-programme will continue to provide an informed and well-researched fiscal framework for

the allocation of resources and the monitoring of expenditure trends. The unit will also ensure

efficient planning and management of infrastructure by the province.

Economic Analysis

The economic analysis unit continues with its mandate of providing an informed and well-researched

fiscal framework for the allocation of resources, within provincial government departments.

The unit has several publications which are placed on the departmental website and are accessible

to stakeholders who wish to do business in the province. The unit has made tremendous strides to

make available to the public current and topical economic information. This has resulted in the

province being used as a benchmark target for other economic analysis units across the country.

The unit’s economic analysis has been of a great value to the department as the speeches of the

MEC are prepared in the unit in order for the MEC to deliver speeches that are well researched.

Consequently, the unit has received various nominations to participate in projects that are initiated at

a provincial level, such as Luwamba project, Makhathini flats known as Makhathini Operation

Phakisa, representing treasury in poverty lab project, representing treasury in the Integrated

Development Plans (IDP) and Local Economic Development (LED) forums of the municipalities.

Support has also been provided at municipal level. A financial literacy study has been conducted in

uMkhanyakude district; and the unit has been active in promoting Municipal Finance Management

Act (MFMA) in the municipalities through induction workshops. The unit also participates in Operation

Sukuma Sakhe (OSS) as part of service delivery acceleration in the province.




Internally, the unit has made contributions towards the publications of other units, such as Municipal

Finance’s Close-Out Report, Public Finance’s Estimates of Provincial Revenue and Expenditure

(EPRE) and Human Resource Management and Development’s Policy Documents.

In addition the following reports were produced:

o KZN Provincial GDP

o KZN Provincial Risk Monitor

o KZN Provincial Labour Market Review

o KZN Provincial Leads and Lags Analysis

The following research articles were produced:

o Successful Partnerships for Economic Development

o Estimation Of The Spatial Autocorrelation Function For Kwazulu-Natal

o Estimating The Spatial Regression Function For Kwazulu-Natal

Infrastructure Management

The Cabinet adopted the implementation of the Infrastructure Delivery Management System (IDMS)

in the Departments of Health and Education in 2012/13. This decision provided the platform for the

roll-out and participation by these two departments in the IDMS as well as the Department of Public

Works and the Provincial Treasury. The introduction of the management system ensured the overall

improvement in the implementation of Infrastructure Development Improvement Plan in the province.

The Infrastructure Unit –

roll-out of IDMS in non-traditional IDIP departments and selected municipalities;

supported to National Treasury and eThekwini Municipality in piloting IDMS implementation

for municipalities and participated in National Treasury’s pilot IDMS training at the University

of Pretoria;

upgraded to web based IRM for implementation in the Departments of Education, Health and

Transport;

managed to access incentives for infrastructure delivery from Departments of Health and

Education to the value of more than R300m;

hosted first ever infrastructure asset management workshop;

provide support to the provincial growth and development plan technical committee;

provide support to the provincial infrastructure coordinating working group; and

actively participate and support the development of the provincial infrastructure master plan




Special Projects

The Infrastructure and Economic unit has been instrumental in various special projects approved by

the Cabinet such as –

Hosting Corporate, Infrastructure and SME Funding Fairs whereat over R500m worth of

projects received funding;

Investigating the establishment of four Regional Sport Hubs in the province;

Support various private sector developments for example Finningley Estate;

Initiated the Bulk Infrastructure Workshops;

Assisted various municipalities in submitting funding applications;

Developed alternative funding mechanisms for public infrastructure;

Assessing a number of unsolicited PPP bids; and

Establishing links and networks with funding entities, bodies and associations

Public Finance


The Public Finance unit continued to perform its mandate as prescribed by the PFMA and Treasury

Regulations. This included the preparation of the 2015/16 MTEF budget for the province, preparation

of the 2014/15 Adjustments Budget, as well as revenue and expenditure monitoring of departments

and public entities. The spending, revenue and service delivery of 15 departments were monitored

and these inputs were used to:

o Keep Cabinet updated on the budget performance of the province.

o Prepare quarterly budget performance reports (First quarter, Mid-year, Preliminary Close-out,

Unaudited Close-out and Audited Close-out reports) for all departments.

o Prepare Mid-year and Unaudited close-out reports for all public entities.

o Brief the Finance Portfolio Committee on the Mid-year and Close-out budget performance of

the province, as well as the 2015/16 MTEF budget and the 2014/15 Adjustments Budget.

o Hold bilateral meetings with departments and public entities to engage on spending trends.

Monitoring of public entities’ spending and legislative compliance continued in 2014/15 with Mid-

year and Unaudited budget performance reports being prepared in this regard.

The 2014/15 Adjustments Budget for KZN was tabled in the Legislature on 20 November 2014.

And the KZN Second Adjustments Budget was tabled in the Legislature on 10 March 2015.




The 2015/16 MTEF budget for KZN was tabled in the Legislature on 10 March 2015. The MTEF

allocations continue to provide for the priorities set in the National Development Plan, as well as

the Provincial Growth and Development Plan.

Provincial Treasury annually issues a cost-cutting circular to all departments and public entities,

and 2014/15 was no exception. These cost-cutting measures are implemented to eliminate

wastage from the system and to re-direct these savings into service delivery spending.

The focus on ensuring optimal health patient fee collections gained momentum in 2014/15 with

Provincial Treasury working closely with the Department of Health in this regard. This resulted in

Health recording an over-collection in patient fees of some R30 million which will be allocated

back to the department in 2015/16 for spending on activities related to the Revenue

Enhancement Strategy.

The impact of these achievements is as follows:

The implementation of fiscal prudence continues to reap rewards for KZN. The cost-cutting

measures, together with careful budget and cash management, have resulted in the province

showing a lower than one per cent deviation in terms of over- or under-spending when compared

to the budget for the past four years. This is a remarkable achievement. In addition, the bank

balance of the province remains with a healthy cash positive position, and has remained cash

positive since May 2010.

These successes were sustained in 2014/15, with Provincial Treasury continuing in its efforts to

monitor departments’ and public entities’ spending patterns. As such, the province was able to

react appropriately when pressures arose in-year. KZN was thus able to manage its budget very

well in 2014/15, with the province under-spending by a mere 0.4 per cent (according to

unaudited numbers), which is well within the acceptable norms.

Municipal Finance

This programme is responsible for ensuring the efficient budget management and accurate financial

reporting at local government and also provides technical support to delegated municipalities.


The Municipal Finance Unit’s primary focus was on promoting credible municipal budgets, sound

fiscal management and monitoring the implementation of the municipal budgets for all 58 the

delegated municipalities which included the following areas:

Supporting all delegated municipalities in the preparation of their Medium Term Revenue and

Expenditure Framework (MTREF) 2014/15 Budgets,




Assessing the MTREF 2014/15 budgets to establish whether, these budgets are credible,

sustainable and comply with the provisions of the Municipal Finance Management Act (MFMA),

Municipal Budget and Reporting Regulations (MBRR) and other related legislation. A critical

element of assessing municipal budgets is to establish whether the budgets are funded or

unfunded, in order to ensure the delivery of municipal services as well as the sustainability of

municipalities in the province.

Monitoring the implementation of municipal budgets and preparing the monthly and quarterly

reports as well as assessing the 2014/15 Mid-Year Budget and Performance Assessment reports

on the budget performance of all delegated municipalities.

The Municipal Finance Unit assessed the 2014/15 Tabled Budgets of all delegated municipalities and

feedback reports on the key findings of the assessed Tabled Budgets were provided to all

municipalities.

In a bid to ensure that the 2014/15 budget process of the municipalities improved in comparison to

that of prior years. Provincial Treasury held bilateral engagements with all 58 delegated

municipalities prior the tabling of their 2014/15 municipal draft budgets.

Subsequent to these engagements, technical support on the 2014/15 budget preparation was

provided on request to the following 27 municipalities indicated in Table 2 below:

Onsite technical support to municipalities on 2014/15 budget preparation

No Name of municipality No Name of municipality No Name of municipality No Name of municipality

1 uMuziwabantu 8 Okhahlamba 15 eDumbe 22 Mtubatuba

2 Hibiscus Coast 9 Imbabazane 16 Abaqulusi 23 Mfolozi

3 Mkhambathini 10 Uthukela DM 17 Ulundi 24 Nkandla

4 Richmond 11 Nquthu 18 Zululand DM 25 Ndwedwe

5 uMgungundlovu DM 12 eMadlangeni 19 Umhlabuyalingana 26 Ingwe

6 Emnambithi/Ladysmith 13 Dannhauser 20 Jozini 27 Greater Kokstad

7 Umtshezi 14 Amajuba DM 21 Hlabisa

Provincial Treasury conducted the 2014/15 budget assessment in two phases. The first phase was to

assess the Tabled Budgets of the municipalities and provide comments as per the requirement of

Section 23(1) of the MFMA. The assessment process also included compliance checks on all Tabled

Budgets received to establish the level of compliance with the requirements of the MFMA and MBRR

in general; to verify amongst others, whether Tabled Budgets submitted were in the correct version

(version 2.6) of the prescribed format and whether the information provided in the main budget

The second phase was a high level assessment on the Approved Budgets by municipal Councils.

The main purpose of the assessment of the Approved Budgets was to establish whether the

Approved Budgets have taken into consideration the comments and recommendations of Provincial




Treasury made on the Draft Budgets. This process also included the compliance checks to establish

the level of compliance with the requirements of the MFMA and MBRR on Approved Budgets.

Provincial Treasury received the 2014/15 Tabled and Approved Budgets, from all delegated

municipalities. The budgets were in the prescribed format. All the budgets were assessed and

feedback provided to all the municipalities.

Provincial Treasury conducted an assessment on the Mid-Year Budget and Performance

Assessment Reports submitted by the 58 delegated KZN municipalities with a view of providing

recommendations which would influence the 2014/15 Adjustments Budgets.

However despite Provincial Treasury’s request to municipalities in Circular TC/RM 5 of 2014/15 not

to table their 2014/15 Mid-Year Budget and Performance Assessment Reports together with their

2014/15 Adjustments Budgets, Umdoni and Umzumbe Municipalities tabled their 2014/15 Mid-Year

Budget and Performance Assessment Reports together with their Adjustments Budgets. Provincial

Treasury was therefore, unable to conduct a comprehensive assessment on their 2014/15

Adjustments Budgets. For these two municipalities, a high level assessment highlighting the main

issues was conducted.

In order to improve on the quality of bilateral engagements with the municipalities, other business

units within Provincial Treasury such as Internal Audit, Financial Reporting and Supply Chain

Management were invited to participate at the engagements. Furthermore, the following business

units from CoGTA were also invited to participate, namely, Municipal Finance, Municipal

Infrastructure and Municipal Planning.

Based on the outcomes of the meetings held by the various business units indicated above, the

thirteen (13) municipalities indicated in the table below were selected for joint engagements on their

2014/15 Mid-Year Budget and Performance Assessment Reports. The reasons for selecting the 13

municipalities for joint engagements were due to amongst others, poor governance and financial

management exhibited by these municipalities. The selected municipalities have also been identified

for support in CoGTA’s Back to Basics program.

Municipalities selected for joint engagements on their 2014/15 Mid Year Budget and

Performance Assessments

No Name of municipality No Name of municipality No Name of municipality No Name of municipality No Name of municipality

1 Ugu DM 4 Endumeni 7 Amajuba DM 10 Mtubatuba 13 Greater Kokstad

2 Mpofana 5 Umzinyathi DM 8 Abaqulusi 11 Mfolozi

3 Uthukela DM 6 Umvoti 9 Hlabisa 12 Jozini

As at 28 February 2015, 55 of the 58 delegated municipalities tabled their 2014/15 Adjustments

Budgets in Council with the exception of the Umvoti, Newcastle and Jozini Municipalities.




Jozini Municipality wrote to the MEC for Finance providing the reasons for the non-tabling of the

2014/15 Adjustments Budget timeously and applied for an extension which was duly granted by the

MEC.

The MEC for Finance issued non-compliance letters to the Umvoti and Newcastle Municipalities.

After considering the response by Newcastle Municipality, the MEC also granted an extension to this

municipality for the tabling of their 2014/15 Adjustments Budget upon receipt of their application.

Eventually, all three municipalities tabled their 2014/15 Adjustments Budget, with Umvoti Municipality

tabling on 2 March 2015, Newcastle Municipality on 12 March 2015 and Jozini municipality on

29 April 2015.

The Municipal Finance Unit prepared all 12 monthly Consolidated Budget Performance reports on all

delegated municipalities and submitted these reports to National Treasury as per Section 71(6) of

MFMA.

Four quarterly reports on the Consolidated Budget Performance for all delegated municipalities were

prepared in line with Section 71(7) of the MFMA.

As part of supporting the municipal budget preparation process for the 2014/15 financial year to

ensure an improved quality of submitted applications for tariff increases, NERSA jointly with

Provincial Treasury conducted a workshop on 02-03 October 2014 in Pietermaritzburg and

61 municipal officials from 25 municipalities licensed to provide electricity attended the workshop.

The purpose of the workshop was to highlight the correct process of completing and submitting the

relevant application forms. The workshop was attended by all the municipalities (including the non-

delegated municipalities) in the Province, which are licensed for electricity.

The Municipal Support Programme (MSP) has had a positive impact on the financial management of

municipalities. The MSP is committed to supporting its clients and identifying ways to improve service

delivery by supporting and assisting municipalities. The program also places emphasis on capacity

building to ensure improvements effected are sustainable.

The Municipal Support Program (MSP) continued to provide hands on technical support to

municipalities in 2014/15. Due to the number of municipalities that require support, the projects

identified were rolled out over the three year MTEF period. The following initiatives were undertaken

in the 2014/15 financial year:

Cash Flow Management;

Internal Control Enhancement including Information Technology General Controls;

Review of Value Added Tax;




AFS Preparation and Review;

SCM Compliance;

Internal Audit Risk and Advisory; and

Infrastructure Management

The objectives of the above initiatives were to ensure improved cash flow management processes,

enhanced internal controls in financial processes as well as in the information technology

environment, improved supply chain management, effective risk management, improved

infrastructure project management and capacitated municipal staff in the preparation of VAT returns

and financial statements, thus ensuring sustainability and averting the need to hire external

consultants.

The AFS Preparation and Review, Supply Chain Management, Infrastructure Management and

Internal Audit initiatives were undertaken by other sub programs within Provincial Treasury under the

MSP Program.

The dedication and commitment by supported municipalities in embracing the improvements

instituted and the implementation of the enhanced processes have assisted them immensely.

The Minister of Finance promulgated Government Gazette No. 37577, Municipal Regulations on

Standard Chart of Accounts (mSCOA), on 22 April 2014 and in accordance with the delegated

functions of Provincial Treasury, we are required to support National Treasury in the roll out and

compliance of these regulations by municipalities.

Four (4) municipalities, namely eThekwini Metro, uMhlathuze Municipality, uMgungundlovu District

Municipality and Richmond Municipality were selected to be part of the mSCOA pilot process.

Provincial Treasury facilitated a workshop on 03 December 2014 to demystify mSCOA, provide

clarity on the objective of the reform, it impact on municipal operations and provide guidance to

municipalities on the set of actions that needed to be implemented in order to ensure compliance.

Provincial Treasury is providing various support initiatives to municipalities to ensure compliance with

the mSCOA deadline of 01 July 2017.




PROGRAMME TWO: FISCAL RESOURCE MANAGEMENT

2.2 .1 Economic Analysis: To determine and evaluate economic parameters and socio-economic imperatives to inform provincial and local resource allocation













Provision of economic analysis for the province

Produce 4 provincial department economic reports

1 0 1 1 1 2 1 1 Produce 4 provincial department economic

reports

Produced 4 provincial department economic

reports

Produce 1 Socio-Economic Review and Outlook report (SERO)

N/A N/A N/A N/A N/A N/A 1 1 Produce 1 Socio-

Economic review and Outlook report (SERO)

Produced 1 Socio-

Economic Review and Outlook report (SERO)

Produce 9 district Socio-economic Reports

3 3 3 3 3 3 N/A N/A Produce 9 district

Socio-Economic reports

Produced 9 district

Socio-economic Reports

Input to OPRE

To provide input to the overview of Provincial Revenue and Expenditure (OPRE)

N/A N/A N/A N/A N/A N/A 1 2 Input to OPRE on time

for tabling

Input to OPRE

submitted on time for tabling

Research papers To provide quality research for regional policy analysis

1 2 1 1 1 1 1 1 Produce 4 economic

research reports

Produced 5 economic

research projects

2.2.2Infrastructure Management: To Ensure efficient infrastructure planning and management in the province













User Asset Management Plans

Assessment Report on the User Asset Management Plans (U-AMPs)

N/A N/A N/A N/A 1 1 N/A N/A

Compile a consolidated assessment report on

the User Asset Management Plans(U-

AMPs)

Compiled a consolidated

assessment report on the User Asset

Management Plans(U-AMPs)

Reports on the implementation of the IDIP in KZN

Reports on the implementation of the IDIP in KZN

1 1 1 1 1 1 1 1 Produce 4 reports on the implementation of IDIP in the Province

Produced 4 reports on the implementation of IDIP in the province

Progress reports on infrastructure budgets and delivery plans

Progress reports on infrastructure budgets and delivery plans

3 2 3 3 3 3 3 3 Submit 12 reports on

the infrastructure expenditure

Submitted 11 reports on the infrastructure

expenditure




Reports on site visits conducted

Reports on the infrastructure site visits conducted

1 1 1 1 1 1 1 1 Submit 4 reports on the infrastructure site visits

conducted

Submitted 4 reports on the infrastructure site

visits conducted

Overview of Provincial revenue and Expenditure (OPRE)

Overview of Provincial revenue and Expenditure (OPRE)

N/A N/A N/A N/A N/A N/A 1 1 Input into OPRE on

time for tabling

Input into OPRE submitted on time for

tabling

2.3 Public Finance : Provincial Budget Management: Ensure efficient budget and expenditure management and accurate financial reporting for provincial government

(including public entities)













No. of chapters in MTEC reports

No. of chapters in MTEC reports

N/A N/A 16 16 N/A N/A N/A N/A 16 16

Estimates of Provincial Revenue & Expenditure

Estimates of Provincial Revenue & Expenditure

N/A N/A N/A N/A N/A N/A 1 1 1 1

Adjusted Estimates of Provincial Revenue and Expenditure(AEPRE)

Adjusted Estimates of Provincial Revenue and Expenditure(AEPRE)

N/A N/A N/A N/A 1 1 N/A N/A 1 1

Section 32 report (Monthly provincial IYM report)

Section 32 report (Monthly provincial IYM report)

3 3 3 3 3 3 3 3 12 12

Quarterly performance reports for provincial department

Quarterly performance reports for provincial department

1 1 1 1 N/A 1 1 0 3 3

2.3 Public Finance : Provincial Own Revenue: Promote optimal and sustainable revenue generation and collection by provincial departments and public entities













Provincial Revenue Forum

Conduct and co-ordinate quarterly Provincial Revenue Forums

1 1 1 1 1 1 1 1 4 Forums per year 4 forums conducted

per year

Quarterly Reports Monitoring of departmental revenue collection

1 1 1 1 1 1 1 1 Revenue quarterly

performance reports 4 Revenue quarterly performance reports

Revenue input into EPRE and OPRE

Revenue input into Overview of Provincial Revenue(OPRE) and Estimates of Provincial Revenue and Expenditure(EPRE)

N/A N/A N/A N/A N/A N/A 1 1 Revenue input into

(OPRE) and (EPRE) on time for tabling

Revenue input into OPRE and EPRE

submitted on time for tabling




2.3 Public Finance: Special Advisory Support services: To promote effective and optimal financial resource allocation for provincial government ( including public

entities)













Input into the revision and maintenance of DORA

Input into the revision and maintenance of DORA

Input to be submitted

by due date 0


by due date

PT input into 2015

DORA was submitted to NT by due

date


by due date 0

Input to be submitted by

due date

Input to be submitted by

due date

Input to be submitted by due date as set by

NT

PT input into 2015 DORA was submitted

to NT by due date

Institutionalise framework for the monitoring of provincial public entities

Institutionalise framework for the monitoring of provincial public entities

Prepare close-out report for all listed entities

0

Prepare 1st quarter

performance report for al entities Prepare budget MTEC

report for all listed

entities

Prepared Unaudited Close-out reports for all entities

and Prepared budget MTEC

report for all listed

entities

Prepare mid-year

performance report for

all listed entities

Prepare mid-year

performance report for

all listed public entities

Prepare EPRE tabled for all listed

entities

EPRE tables prepared for

all listed entities

Implement monitoring tool and report bi-

annually for all listed public entities

Prepared Unaudited Close-out reports for all

entities, Prepared budget MTEC report, Mid-year report and EPRE tables for all

listed entities

2.4 Municipal Finance: To monitor the budgets of municipalities in order to establish whether they implement sound fiscal management and to monitor and provide

technical support to municipalities that are in financial distress













Section 71(6) report (Monthly municipal IYM report) within prescribed time frame

Section 71(6) report (Monthly municipal IYM report) within prescribed time frame

3 reports 3 reports 3 reports 3 reports 3 reports 3 reports 3 reports 3 reports

12 Section 71(6) reports 22 days

after end of each month

12 Section 71(6) reports 22 days after end of each

month

Section 71(7) quarterly budget performance reports

Section 71(7) quarterly budget performance reports

1 report 1 report 1 report 1 report 1 report 1 report 1 report 1 report

4 Section 71(7) quarterly budget

performance reports, 45 days

after end of quarter

4 Section 71(7) 7

quarterly budget

performance reports, 45

days after end of quarter

Municipalities supported through Municipal Support Programme (MSP)

No. of municipalities supported by the Municipal Support Programme (MSP)

2 municipalities

20 municipalities

2 municipalities

9 municipalities

2 municipalities

26 municipalities

2 municipalities

29 municipalities

8 Municipalities 32

Municipalities




B.3 Programme 3: Financial Management

Purpose: To enhance financial management in the Province by taking the necessary steps to assist

and support departments and municipalities in the spheres of Financial Reporting, Asset

Management, Supply Chain Management, Public Private Partnership, Financial Management Norms

& Standards and Gaming Betting in obtaining clean audit reports on an annual basis.


1. Promote sound cash management practices and improve liquidity in the province.

2. Assist departments and municipalities in the attainment of a clean audit outcome for KZN.

3. Provide substantial technical, financial and legal advice in support of all provincial PPP

projects in line with the PPP project cycle as regulated by National Treasury guidelines.

4. Support and monitor adherence of state institutions to SCM prescripts.

5. Develop cost reduction strategies for provincial departments.

6. Develop, facilitate implementation and monitor compliance with financial norms and standards

in provincial departments, municipalities and entities to enhance financial management.

Assets and Liabilities Management


During the 2014/2015 financial year the tax section continued to provide a support service to the

KZN provincial departments to ensure that legislative amendments which impacted on the payroll

functions were communicated to all departments and to ensure compliance with the tax legislation

and SARS requirements. A quarterly risk analysis of the tax functions and processes was conducted

per department, and in areas where risks were identified which would impact negatively on a

particular department, the CFO was informed and where necessary asked to intervene. Tax

information sessions were conducted to continue enhancing the knowledge and skills of tax officials

at the departments and the tax manual was updated to keep abreast of changes to the payroll tax

legislation.

The banking section provided a support to all KZN departments in all areas of the banking function.

Continued liaison with departments on a monthly basis has resulted in an improvement of zero

balances on the banking-related suspense accounts and Chief Financial Officers of departments

were made aware of any risks identified regarding outstanding transactions.




An instruction Note issued by National Treasury prevented the continued use of the Internet to

process electronic payment files online. A new system was developed to ensure that payments could

be processed by means of an electronic file, created at Treasury, and submitted to the Provincial

banker for further processing. This prevented reverting to the old manual system of processing

payments.

Municipalities continued to be informed of the reporting requirements in terms of the Municipal

Finance Management Act and there has been a noticeable improvement during the 2014/2015

financial year with regards to the submission of reports to Treasury by the municipalities.

The introduction of the Cash Blocking system ensured more effective cash management by the

departments during the 2014/2015 financial year, as departments were not able to disburse

payments to suppliers unless they had the funds available in their cashbook.

In the 2014/2015 financial year, site visits were conducted at provincial departments as an on-going

support intervention to assist departments with Asset management. Training interventions were also

embarked on to assist with the proper use of the Asset Management System (Hardcat).

Public Private Partnerships (PPPs)

The Public Private Partnership Unit housed in this programme, provides technical support on any

possible PPP project envisaged by the Departments, Public Entities and Municipalities. The Unit, in

collaboration with the National Treasury’s PPP Unit, is presently assisting:

KZN Provincial Department of Health in the contract review, asset verification, final work

survey and developing the exit strategy.

KZN Public Works in investigating the possibility of procuring Office Park (government

Precinct) for KZN Provincial Departments as a PPP.

KZN Legislature is initiating a process of reviving the Office Accommodation project for the

Provincial Parliament as PPP.

KZN Department of Education in investigating the possibility of assisting the department with

their Infrastructure backlogs through procurement of projects via the PPP route; namely: New

Schools, Upgrades and Additions, Repairs/renovations and Non School buildings in the four

pilot nodes, i.e. iLembe, uThukela, Ugu and uMgungundlovu.




In municipalities, the Unit assists in the following:

ILembe District Municipality in its Water and Sanitation concession contract management.

KwaDukuza Local Municipality in its investigation on Solid waste Management as required by

section 78 of the Municipal Systems Act (MSA) investigation.

Greater Kokstad Municipality in procuring the Private Party for the Design, Construction,

Operation, Maintenance and Finance of a Serviced Working Environment for the Greater

Kokstad Municipality and Commercial Development.

Hibiscus Coast Municipality, through the Hibiscus Coast Development Agency in

development of a prime section of beach front land situated in the town of Umtentweni.


Assisted Sharks Board with the compilation of an Expression of Interest document, with

Public Private Partnership guidelines in order to test the market for the possibility of procuring

their office accommodation project as a PPP. There was a positive response from the market

and the entity is yet to indicate commitment to the PPP process.

Framework of the exit strategy for the Inkosi Albert Luthuli Central Hospital has been

developed

KZN Provincial Department of Health in its contractual review, final works survey and the

preparation of the Exit Strategy. The PPP Unit has assisted the department in terms of

drafting its terms of reference and the guidance on procurement process which ultimately led

to the appointment of KPMG as suppliers to conduct final works survey and verification of

patient numbers versus the impact they have on the medical equipment; their maintenance

and their useful life in-line with contractual requirements/provisions.

Participate in the restructuring of the funding model for the Office Park in order to make it

more affordable and provide better value for money for the Province. The Feasibility Study for

Office Park project has been completed and in the process of presenting it to National

Treasury for Treasury Approval (“TA”) 1. However, the project was suspended sighting

affordability issues by the Provincial Government in December 2014. The Unit is now

exploring the possible resuscitation of the project plus presentation to Provincial Leadership

for approval.

Managed a process of reviving the Legislature project and negotiating with Transaction

Advisor to update the feasibility study. The deviation and contract was prepared by the PPP

Unit in order to re-appoint the Transaction Advisor to conduct the update of the feasibility




study and legal competence of the Legislature to procure New Provincial Parliament and

Admin Buildings. However, this project was also put on hold sighting reasons of lack of

affordability.

The Need analysis investigation for the Department of Education for the four pilot nodes, i.e.

iLembe, uThukela, Ugu and uMgungundlovu been finalised by the Project Steering

Committee and the way forward plus commitment to the PPP process from Education is the

next step.

Finalisation of a 3rd Review of the Concession Agreement and development of five year

implementation plan for the period 2014 - 2019 for the ILembe District Municipality. The 5

Year Plan was drafted and was discussed with the Concession councillors in order to

facilitate the process of approval. It is not yet approved pending the finalisation of planned

workshops to appraise the councillors of the project.

Commitments

Appointment of service provider to conduct the exit strategy for Inkosi Albert Luthuli Hospital

via department of Health and Treasury playing the oversight role.

Attainment of Treasury Approval 1 (“TA”) for feasibility study, initial and finalise the process of

drafting bid documents for the Office Park project post the adoption and endorsement by

provincial leadership.

Initiate the update of the feasibility study for KZN Legislature should the “hold” be lifted with

foresight for funding.

Finalisation feasibility study process for schools project (Department of Education) and

securing commitment from the department to go the PPP route.

Approval and implementation of the third review of concession agreement and five year

implementation plan for period 2014 – 2019 of ILembe concession contract.

Provincial Supply Chain Management (SCM)

The Provincial SCM Unit is responsible for enforcing compliance with all Supply Chain Management

prescripts by Provincial Departments, Municipalities and Public Entities in the province through

support and interventions.

Achievements

SCM Interventions at the Department of Sport and Recreation, Department of Agriculture and

Rural Development, Umkhanyakhude District Municipality, Umtshezi Local Municipality and Ugu




District Municipality were conducted during the 2014/15 financial year. These interventions are

in the form of direct assistance in managing procurement processes in the effected institutions.

SCM compliance assessments were done at all provincial departments and delegate

municipalities in the Province.

The Unit has introduced a contract management system in the Province. There are three

phases to this Contract Management system. Phase 1 comprises of an electronic contract

register and filing system. Phase 2 comprises of the comprehensive legal and financial reviews

of contracts concluded with service providers. Phase 3 comprises of the developing a contract

management framework and training. All the systems phases were successfully piloted and

concluded at 6 departments and 3 municipalities. As a result thereof this system has been

implemented and successfully completed in the remaining 9 departments. This contract

management system is now being rolled out to 10 Municipalities which obtained qualifications

and disclaimers in the last Audit outcomes of the Province.

Provincial SCM Unit has also started the development of an e-Procurement tool. This tool will

assist in limiting instances of fraud and corruption in departments SCM processes. The pilot of

the e-Procurement tool is being conducted at KZN Treasury and Department of Transport.

This Unit has embarked on a process of assisting suppliers on the supplier’s database who do

not have valid BBBEE certificates. This is done in order to realise the full impact and potential of

the provisions of the PPPFA of 2011. In this regard, small emerging contractors will be

empowered to compete on an equal footing with well-established companies. In relation to this

project, Provincial SCM Unit has issued a total of 6230 BBBEE verification certificates during the

2014/15 financial year.

The implementation of the Municipal Bid Appeals Tribunal system is on-going. To date 54 of the

58 delegated municipalities have adopted amendments to their SCM Policies in order to make

provision for the Municipal Bid Appeals Tribunal (MBAT) structure. These Tribunals are now fully

functional and are currently hearing appeal matters throughout the Province.

The Provincial Bid Appeals Tribunal has also been active. This Tribunal has dealt with a number

of cases relating to appeals on bids awarded by different departments in the Province.

The table below gives a summary of appeals handled by the Provincial Bid Appeals Tribunal for

different departments during the period of 2014/15 financial year.




DEPARTMENTS APPEALS

RECEIVED

STATUS

PENDING WITHDRAWN FINALISED

AGRICULTURE 4 0 0 4

ARTS & CULTURE 3 0 0 3

EDUCATION 99 (NSNP) 0 0 99

HEALTH 644 63 220 369

TRANSPORT 40 8 22 9

TREASURY 20 4 7 9

WORKS 22 8 6 8

TOTAL 832 83 255 502

Financial Reporting


Financial Management Support Program

The Provincial Treasury has adopted Financial Management Support Program to address audit

matters and improve negative audit outcomes. This approach comprises the following key

elements:

o An analysis of financial management processes and procedures.

o Identification of audit risk areas and key internal control measures to mitigate potential

risks.

o Sustainable skills transfer, training, and the monitoring of key controls and procedures to

address audit risks and key control deviations.

o Provision of support in addressing audit matters that led to qualifications and disclaimer

audit opinions.

o Support in preparation of annual financial statements and working papers

o Review of annual financial statements to ensure compliance with accounting frameworks

and improve the quality of the annual financial statements.

This Program has achieved great success for the 2013/14 financial year as majority of the

municipalities have prepared the annual financial statements internally, with the assistance from the

Financial Reporting officials. The assistance provided to these municipalities has contributed

positively to maintaining or improving the audit opinions for the 2013/14 financial year.




Municipality Name 2013/14 2012/13

Abaqulusi Municipality Unqualified with findings

Qualified

Ugu District Municipality Qualified Disclaimer

Vulamehlo Municipality Qualified Disclaimer

Umgeni Municipality Unqualified with findings

Unqualified with findings

Umhlabuyalinga Municipality Unqualified with findings


iLembe District Municipality Unqualified with no findings


Assistance to departments

Treasury assisted the Departments of Public Works, Royal Household, Health, Legislature,

Economic Development, Education and Social Development with resolving key prior year audit

issues and compilation of annual financial statements for the 2013/14 financial year.

Future Plans

The Financial Management and the Internal Audit units will continue to complement each other by

both proactively identifying and addressing key financial management risks.

The following special areas of concern will require proactive intervention in 2015/16 to ensure clean

audits in 2015/16:

Movable Assets

Treasury will continue to assist the Department of Health in the completion and updating of the

movable assets register.

Irregular Expenditure

Treasury will continue to investigate and try to eradicate irregular expenditure in the province.

Regular interim audits and training on all relevant SCM prescripts will be undertaken.

Annual Financial Statement Training

Treasury is to embark on an intensive training program to ensure that both internal audit and

financial management staff are highly competent in both preparation and review of financial

statements in both Departments and Public Entities.




Norms and Standards


Policy assistance to Departments

The unit reviewed twenty-six (26) existing instruction notes as per the annually determined review

schedule. All proposed amendments were consulted with departments and proposals incorporated,

where applicable, prior to adoption and implementation.

Policy assistance to Municipalities

The unit provided support on finance-related policies to thirteen (13) municipalities that included

Mpofana local, Emadlangeni local, Kokstad local and Amajuba district municipalities. This emanated

out of numerous ad-hoc requests that the unit received during the financial year as well as the

annual plan that is informed by the annual survey on policies that is conducted on municipalities. The

policy assistance rendered to Amajuba district was encompassing an extensive support and

involvement of the district’s operational staff within finance as well as the senior management. The

support was provided in partnership with other units within KNZ Treasury under the auspices of

Municipal Finance unit’s Municipal Support Programme (MSP). The support extended over two

quarters.

Monitoring Compliance and Evaluation

A compliance monitoring and evaluation exercise was conducted to assess financial management

compliance within provincial departments. A questionnaire was developed which assessed financial

management delegations and expenditure, revenue and debt management, and included a

compliance checklist where documentary evidence was requested to support the responses

indicated in the questionnaire. Departments were required to provide reasons for non-compliance

when completing the questionnaire and formulate action plans with stipulated deadlines to address

deviations.

The completed questionnaire was analysed in terms of financial implications and consequences and

thereafter compliance assessment reports issued per department which detailed compliance

achievements and provided recommendations to address identified weaknesses or non-compliance

that were achievable and implementable within reasonable timeframes. Additional guidelines were

provided for incorporation within the working environment, where applicable, to strengthen existing

internal control measures and enhance financial management and control.




A compliance feedback report was subsequently issued per department detailing compliance

achievements following the implementation of remedial measures, where applicable, and highlighted

outstanding compliance matters.

Development and Implementation of FMCMM

The unit continued with its support to National Treasury in the review of the upgraded diagnostic

compliance tool, Financial Management Capability Maturity Model (FMCMM) relating to Governance,

Financial Management, Reporting, Performance Management and Supply Chain Management. The

unit will assist National Treasury with the piloting process prior to the Model’s roll-out to treasuries

and departments in all the provinces.

Supporting and Interlinked Financial Systems


The IT unit in Provincial Treasury continues to provide support to departments on the transversal

systems, namely, Basic Accounting System (BAS) for payment to suppliers, Persal for processing of

the provinces payroll, Hardcat for asset management and Biometrics Application Control System

(BACS) as an additional layer of security to BAS and Persal.

The following key projects were completed:

The BACS server infrastructure at both the primary site in Pietermaritzburg and the Disaster

Recovery Site in Durban were refreshed. The refresh now allowed us to improve the speed of

the application and to add much needed enhancements such as finger randomisation during

authentication to BAS and Persal.

The Department has embraced Corporate Governance for ICT by developing a framework policy

and implementation plan that is in line with the guidelines provided by the Department of Public

Administration. The department has appointed a new Senior IT Manager and the General

Manager of Corporate Services has been appointed as the Governance Champion. A key task of

the governance champion is to inculcate corporate governance in the department.

The leave system was enhanced to improve reporting and due to changes in the underlying

leave business process.

Gaming and Betting

Service Delivery Achievement

The Chief Directorate: Gaming and Betting provides a gambling policy development, line function

support and monitoring service for the MEC responsible for gambling and top management in the




department. The Chief Directorate: Gaming and Betting provides, to national and provincial gambling

regulatory bodies, stakeholders and the general public, an information and advice service, on

gambling policy and law. The Unit operates in a highly litigious environment.

The following key projects were completed

The appointment of nine new members to the KwaZulu-Natal Gaming and Betting Board,

Adv. BS Khuzwayo was appointed as the Chairperson and Mr ED Mpanza as the Deputy

Chairperson.

The KwaZulu-Natal Gaming and Betting Bill, 2014 was presented and passed at Cabinet for

onward transmission to Legislature, it is anticipated to be passed in the next financial year.

The actual revenue collected in this financial year was R538 524 million (as per AFS).

The total amount of R 39 276 million in respect of the transfer was paid over to the KZN

Gaming and Betting Board.




PROGRAMME THREE: FINANCIAL MANAGEMENT

3.1 Assets and Liability Management:

To ensure the provision of an effective and efficient transversal advice ,guidance and support as well as monitoring compliance to Asset Management prescripts in all provincial departments.

To promote sound cash management practices and improve liquidity in the province; and

To assist departments and municipalities in the attainment of a clean audit outcome for the province. Programme / Sub-programme Output












Inform Departments on tax legislation and regulations iro payroll tax

Provide guidance and support iro payroll functions to KZN departments

15 depts 16 depts 15 depts 15 depts 15 depts 15 depts 15 depts 15 depts 15 dept 15 depts.

Conduct Tax Information Seminar annually

N/A N/A 2 sessions 2 sessions N/A N/A N/A N/A 2 Sessions 2 sessions

Quarterly Reports

Risk analysis per dept to ensure compliance to tax legislation

15 reports 16 reports 15 reports 16 reports 15 reports 16 reports 15 reports 15 reports 60 Reports 63 reports

Assessment Report on status of suspense account

Provide quarterly assessment reports to dept on the status of bank related suspense accounts

15 compliance assessment

reports


reports


reports


reports


reports


reports


reports


reports

60 assessment reports

60 Compliance Assessment

reports

Monitor early completion of Bank Reconciliation

Review monthly bank reconciliations per department

45 Reconciled

bank reconciliation

45 Reconciled

bank reconciliation

45 Reconciled

bank reconciliation

45 Reconciled

bank reconciliation

45 Reconciled

bank reconciliation

45 Reconciled

bank reconciliation

45 Reconciled

bank reconciliation

45 Reconciled

bank reconciliation

180 reconciled bank

reconciliations

180 Reconciled bank

reconciliation

Municipal bank accounts.

Produce quarterly report on withdrawals from municipal bank accounts

1 quarterly report on

withdrawals from

municipal bank

accounts

1 quarterly report


withdrawals from municipal bank accounts

1 quarterly report


withdrawals from

municipal bank

accounts

1 quarterly report


withdrawals from municipal bank accounts

1 quarterly report

4 reports on withdrawals

4 reports on withdrawals

Sound Asset Management Practices in Provincial Departments

No. of Asset workshops and training sessions conducted

1 seminars/

training workshops

0

1 seminars/

training workshops

1 training workshop

1 seminars/

training workshops

0

1 seminars/

training workshops

0 4

seminars/training workshops

1 seminars/trainin

g workshop

3.2 Public Private Partnership (PPP): To provide substantial technical, financial and legal advice in support of all provincial PPP projects in line with the PPP Project

Cycle as regulated by National Treasury guidelines.













Number of seminar/workshops conducted for Provincial

Number of seminar/workshops conducted for Provincial

N/A 1 1 4 N/A 7 1 1 2 13




departments, Public entities, Municipalities, Municipal entities and the Private sector

departments, Public entities, Municipalities, Municipal entities and the Private sector

Reports for Prov. Treasury management and NT PPP unit

No. of reports for Provincial Treasury management and NT PPP unit

3 3 3 3 3 3 3 3 12 12

Reports on closed deal.

Contract management reports on closed deals

3 3 3 3 3 3 3 3 12 12

3.3 Supply Chain Management:

Support and monitor adherence of departments, Public Entities and Municipalities to SCM prescripts.

Develop cost reduction strategies for provincial departments and municipalities.

Provide a supplier monitoring mechanism for the Province to ensure that Supplier Information is reliable. Programme / Sub-programme Output












Training SCM practitioners in Provincial departments and municipalities

No. of SCM training sessions and information sessions conducted

1 7 1 4 1 8 1 1 4 20

1 4 1 0 1 0 1 0 4 4

No. of assessments No. of compliance assessments

15 16 15 21 15 17 15 16 60 70

Reviewed supplier registration form

No. of reviews of the supplier registration form

1 0 N/A N/A 1 1 N/A N/A 2 1

No. of policies and practice notes reviewed and issued

No. of policies and practice notes reviewed and issued

1 0 1 1 1 1 1 2 4 4

3.4 Financial Reporting:

To analyse province-wide compliance, implementation and maintenance of generally recognized Accounting practice and financial systems to fairly present the consolidated financial position of KZN.

To analyse financial and audit reports in order to establish and formulate strategies to address weaknesses in the financial management process in departments, public entities and municipalities as envisaged in the Public Finance Management Act and the Municipal Finance Management Act.

To enable client departments to address fast-paced needs evolving from auditor general reports by generating solutions and support. To provide project management and consulting solutions to Departments to expedite financial reporting.

To facilitate the development of transversal developmental programmes and projects aimed at improving financial management and accounting practices in provincial departments, public entities and Municipalities.

To impact directly on value for money and service delivery enhancements through business-process re-engineering of key cost drivers Programme / Sub-programme Output















Tabling of Consolidated Financial Statements for Departments, Public Entities and Revenue Fund

Consolidated AFS for Provincial Departments and Revenue Fund

N/A N/A

Compile consolidated

AFS for Provincial

Departments and Revenue

Fund

Not achieved

Tabling of consolidated

AFS for FY13/14 in Legislature

Not achieved N/A

Tabled consolidated

AFS for FY13/14 in Legislature

Consolidated AFS for FY13/14 tabled in legislature by 30

November 2014

Compiled and tabled consolidated AFS for FY13/14 in

Legislature

Consolidated AFS for Public Entities tabled in Legislature

N/A N/A

Compile consolidated

AFS for Public Entities

Not achieved

Tabling of consolidated

AFS for FY13/14 in legislature

Not achieved N/A

Tabled consolidated

AFS for FY13/14 in legislature

Consolidated AFS for FY13/14 tabled in legislature by 30

November 2014

Compiled and tabled consolidated AFS for FY13/14 in

legislature

Annual Financial Statements for the Revenue Fund tabled in Legislature

N/A N/A

Compile Revenue

Fund Annual Financial

Statements

Compiled Revenue Fund

Annual Financial

Statements

Table Revenue fund

Annual Financial

Statements in Legislature

Not achieved N/A N/A

Revenue Fund AFS tabled in Legislature for FY13/14 by 30

November 2014

Compiled Revenue Fund Annual

Financial Statements

Positive Audit Outcomes to departments and Public Entities

Provincial Audit Outcome Analysis for Municipalities, Departments and Public Entities

N/A N/A

Summary of Audit

Outcome Analysis for Provincial

Departments and Public

Entities

Summary of Audit Outcome

Analysis for Provincial

Departments and Public

Entities

N/A N/A N/A N/A

Summary of Audit Outcome Analysis

on AG’s audit report for Provincial

departments and public entities by 31 August 2014


for Provincial Departments and

Public Entities

N/A N/A N/A N/A N/A N/A

Summary of Audit

Outcome Analysis for

Municipalities

Summary of Audit

Outcome Analysis for

Municipalities


on AG’s audit report for

municipalities by 31 January 2015

Summary of Audit Outcome Analysis for Municipalities

AFS Support and Training to Provincial Departments

N/A N/A N/A N/A N/A N/A 1 AFS training workshop

Not achieved 1 AFS training

workshop by 31 March 2014

Not achieved

Pre-audit review in 16 departments

Pre-audit review in 15 Departments

N/A N/A N/A N/A N/A N/A Pre-audit review in 16 Departments by

31 May 2014

Pre-audit review in 15 Departments

Financial management support to Public Entities

Pre-audit review in 12

public entities by 31 May

2014

Pre-audit review in 1 public entity

N/A N/A N/A N/A N/A N/A Pre-audit review in 12 public entities by 31 May 2014

Pre-audit review in 1 public entity

N/A N/A N/A N/A N/A N/A 1 AFS training workshop 12 public entities

Not achieved

1 AFS training workshop for 12 public entities by 31 March 2015

Not achieved

Sustainable municipalities on financial management

Financial management support to Municipalities

1 AFS training workshop for

58 municipalities

Not achieved N/A N/A N/A N/A N/A N/A

1 AFS training workshop for 58 municipalities by

30 June 2014

Not achieved

N/A N/A Pre-audit

assessment report in 10

Pre-audit assessment report in 10

N/A N/A N/A N/A Pre-audit

assessment report in 15 municipalities

Pre-audit assessment report in 10 municipalities




municipalities municipalities by 30 August 2014

Progress reports on

intensive on-site financial management support to 10 municipalities

Progress reports on

intensive on-site financial management support to 8

municipalities

Progress reports on


Progress reports on


municipalities

Progress reports on


Progress reports on


municipalities

Progress reports on


Progress reports on


municipalities

Progress reports on intensive on-

site financial management support to 10 municipalities

within 10 days of every quarter end

Progress reports on intensive on-site

financial management support to 7

municipalities

3.5 Norms and Standards: To develop, facilitate implementation and monitor compliance with financial norms and standards in provincial departments, municipalities

and entities to enhance financial management.













Policies and practice notes developed/reviewed and issued

Number of instruction notes/policies developed /reviewed for departments, municipalities and their respective entities

6 instruction notes and 4

policies reviewed

6 instruction notes

reviewed for department

s. Reviewed 25 policies

for municipalitie

s

6 instruction

notes and 4 policies

reviewed

8 instruction notes

reviewed for departments.

4 policies developed

and 19 policies

reviewed for municipalities.

6 instruction notes and 4

policies reviewed

6 instruction notes and 22 policies developed/r

eviewed

6 instruction

notes and 4 policies

reviewed

6 instruction notes

reviewed for departments

and 18 policies

developed/ reviewed for municipalities

40 instruction notes and policies developed

and reviewed

114 instruction notes reviewed and

policies developed/ reviewed for

departments and municipalities

Number of departments assessed and monitored

Number of departments assessed and monitored

All departments assessed and

monitored

All departments assessed

and monitored


and monitored

All departments

assessed and monitored

All departme

nts assessed

and monitore

d


and monitored


and monitored

All departments

assessed and monitored


monitored


monitored

3.6 Support and Interlinked Financial Systems: To align ICT initiatives with the strategic direction of the department through the provision of IT support, training of

users and the acquisition and development of relevant information system solutions as an enabler of business processes.













Policy Reviews Number of policy reviews completed

1 1 1 2 1 0 1 1 4 4

Compliance Reports Number of compliance reports completed

3 3 3 3 3 3 3 3 12 12

Policy Information Sessions

Number of information sessions conducted

2 1 2 2 2 1 2 4 8 8

Mean Time To Resolve ( MTTR) - Provincial

Mean time to resolve(MTTR) - Treasury

8 hours 49min 8 hours 53min 8 hours 46min 8 hours 44min 8 hours MTTR 48 min




Percentage network uptime

Percentage network uptime

99% 99% 99% 99% 99% 99% 99% 99% 99% 99%

Mean Time To Resolve ( MTTR) – Transversal Systems

Mean time to resolve (Transversal systems)

8-24 hr MTTR

2hr10min 8-24 hr MTTR



1hr50min 8-24 hr MTTR 2hrs 1 min

3.7 Gaming and Betting: Enhance the Gaming and Betting Regulatory environment in KwaZulu-Natal.













Amended KZN Gaming and Betting Legislation

Amended KZN Gaming and Betting legislation

Review of The KwaZulu-Natal Gaming and Betting Act

2010

MEC for Finance

withdrawn the Bill from the Legislature

Review of The KwaZulu-Natal Gaming and Betting

Act 2010

Draft 5b of the Bill,

completed and forwarded

to MEC

Review of The KwaZulu-

Natal Gaming and Betting

Act 2010

Reviewed the KwaZulu-Natal Gaming and

Betting Act 2010

Review of The KwaZulu-Natal Gaming and Betting

Act 2010

Reviewed The KwaZulu-Natal Gaming & Betting Act, 2010 and the

KwaZulu-Natal Gaming

& Betting Regulations

2012

Review of The KwaZulu-Natal Gaming & Betting Act, 2010 and the


& Betting Regulations,

2012

Reviewed The KwaZulu-Natal

Gaming & Betting Act,

2010 and the KwaZulu-Natal

Gaming & Betting

Regulations 2012

Consultation on draft

amendment regulations

Draft 1 of the KZN Gaming and Betting Amendment Bill produced

Final draft of amendment regulation

legally certified

Amendments to the

Regulations have been put

on hold pending

passing of the Bill

Amendment Regulations submitted to

Premier

Amendments to the Regulations have been put

on hold pending passing of the

Bill

Amendments to the


& Betting Regulations

2012 promulgated

Amendments to the

Regulations have been put

on hold pending

passing of the Bill

Amendments to the


& Betting Regulations,

2012 promulgated

Amendments to the Regulations have been put

on hold pending

passing of the Bill

Appointment of KZN Gaming and Betting Board

Appointment of the new KZN Gaming and Betting Board

N/A

Gazette Notice -invitation to

nominate candidates for appointment to the KZN

Gaming and Betting Board

N/A Nominees

published and shortlisted.

Call for nominations published by 31/10/2014

Interviews for new Board

members were conducted on 1st and 2nd of

December 2014

Publication of nominations

by 31/12/2014

Gazetted and published in 4 newspapers

names of new members to KZN Gaming

& Betting Board on 31 March 2015

Preparations for new

appointments

Gazetted and published in 4 newspapers

names of new members to

KZN Gaming & Betting Board on 31 March

2015

Regulatory reports on service deliver, governance and compliance matters

Number of Quarterly Regulatory reports on service delivery, governance and compliance matters of Gaming Board Activities

1 1 1 1 1 1 1 1 4 4

Annual Revenue collected

Collected Revenue

R137 704 000 R124 793 000 R151 000 000 R125 329 000 R144 000 000 R130 738 000 R140 000 000 R136 860 000 R572 704 000

R 517 720 000




B.4 Programme 4: Internal Audit

Purpose: The Internal Audit component provides a legislated function which covers an independent

objective assurance and consulting services on issues of internal control, risk management and

governance as provided in the PFMA and Standards for the Professional Practice of Internal Auditing

and in line with the principles in the King Report and its scope, comprehensively defined in chapter 3

of Treasury Regulations.

The Provincial Internal Audit Services (PIAS) component of Provincial Treasury supports all provincial

departments, as well as some public entities and municipalities in areas of internal audit, risk

management, governance and forensic investigations. The component has formulated a three-lines-of-

defence mechanism which entails:

Providing assurance on the effectiveness of governance.

Risk management.

Compliance systems and controls.


1. To promote a culture of accountability and transparency.

2. To provide an efficient, effective and economical assurance service.

3. To foster solid client relationships.

4. To build capacity within and outside the unit.

5. To promote good governance through effective risk management.

6. To promote a culture of zero tolerance for fraud and corruption

Service Delivery Achievements:

Assurance Services

Achievements

During the 2014/15 financial year, the Assurance Services component provided independent

internal audit reviews on a number of areas of operations at Provincial Departments and Public

Entities. The unit conducted 253 audit reviews at these institutions which provided assurance on

the effectiveness of internal controls implemented and provided management with

recommendations on any weaknesses identified.




The focus areas of these reviews covered controls over financial processes, as well as controls

governing other service delivery processes, including IT systems that provide support to the

processes. These focus areas were based on the risk exposure of the institutions and were

indentified in consultation with respective senior management, the Audit & Risk Committee and the

AG; to ensure comprehensive coverage of the risk universe. Examples of key focus areas were

Supply Chain Management, Asset Management, Transfer Payments, and Predetermined

Objectives.

The approach adopted to the review of process controls at the Departments of Health and

Education was focused at an institution and district level respectively. This provided the

departments with a more holistic analysis of the performance of individual components at a

regional level; and allowed for any improvements identified to be rolled out at other similar

components in other regions as well thereby improving on the effectiveness of our services.

In order to assist departments and entities with the preparation of Financial Statements, the Unit

reviewed Interim Financial Statements at half year, focusing on the key weaknesses that were

highlighted by the previous external auditors. Final reviews of certain aspects of the Annual

Financial Statements were also conducted at year end prior to the submission to the Auditor

General.

The component also identified a critical transversal focus area of Subsistence and Travel

Allowances across all provincial departments. A value for money review was conducted in this

area to determine efficiency and economical return on spending in this area. This review was in

line with the cost cutting measure implemented in the province and provided recommendations on

further areas of potential savings.

Assistance was also provided to departments and public entities by following up on findings

reported by the AG on IT General Controls, which is one of the most critical focus areas of the IT

external audits conducted by AG. In addition to this, Treasury's IT Internal Auditors provided

assurance on the Provincial Departments IT contract and project management processes.

Risk and Advisory Services:

Achievements

Risk and Advisory Services is a component within the Internal Audit that provides risk management

support and governance-related advice to provincial departments, public entities and municipalities




(clients). This support includes facilitation of risk assessments to all our clients, and providing support

on internal audit issues to municipalities.

For the period under review, we embarked on various initiatives that were meant to improve the

governance processes of our clients, and these initiatives and related performance targets are

reflected in the risk management section of the table below.

In a nutshell, we managed to achieve the following:

Reviewed risk management structures/functions of all provincial departments, and provided

guidance on how these structures should be functioning – i.e. Risk Managers should be appointed

at level 13, and should report directly to Accounting Officers.

Provided risk management training to internal risk committees of provincial departments;

Facilitated and updated risk registers of provincial departments, public entities and municipalities;

Reviewed internal audit functions and audit committee practices of all KZN municipalities.

With regard to unachieved targets, the following is highlighted:

The review of fraud prevention plans for departments could not be done as planned as we were

still working with various departments to address weaknesses observed (reviewed) from previous

(13/14) financial years. A full blown review of fraud prevention plans is planned for the 15/16

financial year, and this will also be extended to all delegated municipalities.

Consolidated Provincial Risk Profiles could not be produced as we were working on incorporating

Provincial Growth and Development Strategy (PGDS) risks to the Provincial Risk Register. This

project is envisaged to be finalised during the 15/16 financial year.

Forensic Investigations

Achievements

The unit continued to undertake investigations into allegations of fraud, corruption, theft, forgery and

uttering and contraventions of the PFMA, MFMA and other related legislation on behalf of the

provincial departments, public and other entities and municipalities with a view assist criminal

investigators during the implementation of the criminal investigations and procedures leading to civil

recoveries. System weaknesses identified during the investigation are reported on in the investigation

reports and provided to the clients department for consideration and implementation. The unit has

conducted follow ups on progress by various government institutions who received forensic audit




support services, particularly on completed investigations, to verify if appropriate action was taken by

management.

Since 2009, the unit has finalised 131 investigations and is currently completing 122 investigations.

During the 2014/15 financial year approximately forty five (45) matters were reported for investigation

and twenty two (22) phase 1 forensic investigation reports were issued. It is anticipated that thirty six

reports will be completed in 2015/16.

Due to capacity shortages the unit has previously relied on service providers to undertake most of the

investigations. With the appointment of additional senior staff who are able to assist in the training and

management of the internal staff these resources will be better utilised going forward; with the service

providers focusing on the more complex and specialised cases.

The unit enjoys a good working relationship with the criminal justice and law enforcement agencies

such as the SAPS, DPCI (in particular the Anti-Corruption Task Team), NPA, DPP and SIU. The unit

has in excess of five cases registered as national priority crimes, some of which are presently before

court. The unit expects to register at least another five such cases during the coming financial year.

To assist with the management of the investigation assignments the unit continued working with Risk

and the service provider on the development of the Fraud Case Management System. It is anticipated

that the testing of the system will be conducted before the end of the current financial year and

following the implementation by the unit, it will be rolled out for use by the other departments.




PROGRAMME FOUR: INTERNAL AUDIT

4.1 Assurance Services: To provide departments, municipalities and public entities with the following;

Provide an efficient, effective and economical assurance service.

Build and maintain solid client relationships through providing value added service.

Enhance capacity within and outside the Unit. Programme / Sub-programme Output












No. of IA Annual operational plans and a rolling three year strategic plan

Internal Audit operational plan and a rolling three year strategic plan

23 23 N/A N/A N/A N/A N/A N/A 23 23

Audit Committee reports to the Cabinet

Annual Audit Risk Committee report on clients’ areas of risk areas of risk management, governance and internal control submitted to MEC: Finance

N/A N/A 1 1 N/A N/A N/A N/A 1 1

Internal Audit Reports

Internal Audit risk based and follow up audit conducted including financial, IT, performance and governance audits

40 41 40 42 40 42 40 64 160 189

Internal Audit Reports on Performance Information

No. of Audit reports on predetermined objectives

N/A N/A 4 4 13 1 6 16 23 21

CARC meetings held

No. of meetings held between clients and the cluster Audit & risk Committee

16 32 16 0 16 0 16 16 64 48

Training and Development Programmes

Training and development programme

4 4 4 5 4 3 4 4 16 16

An Independent internal and external quality assurance review report

Internal and/independent external QAR report

1 0 N/A 1 1 0 N/A N/A 2 1

4.2.1 Risk Management: To promote good governance through assisting provincial departments, public entities and municipalities to practice effective risk

management.
















Number of enterprise wide risk reports

Consolidated Risk Assessments facilitated for municipalities

5 17 7 10 8 14 10 10 30 51

Quarterly assessments reports

Updated risk assessments for departments and public entities

N/A 3 10 5 10 4 2 15 22 27

Risk Maturity Improvement Plans

Follow-up implementation of risk mitigation and risk maturity improvement plans for each municipality(twice a year) and each department(quarterly)

45 15 15 16 45 21 15 69 120 121

Consolidated Risk Profiles

Consolidated Provincial Risk profile developed

N/A N/A N/A N/A 1 0 N/A N/A 1 0

Risk Management Reports

Conduct risk maturity gap analysis and analysis and develop action plans for provincial departments and public entities. This will include assisting public entities with the review of internal audit functions, audit committees, OHS practices, business continuity, IT Governance Frameworks and Fraud Prevention Strategies for provincial departments and public entities.

N/A N/A 10 0 10 0 5 16 25 16

ERM Compliance Reviews

Conduct ERM compliance and risk maturity reviews and assisting municipalities with addressing identified weaknesses. The above will include

5 0 10 0 10 18 5 12 30 30




review of internal audit functions, audit committee, OHS practices, business continuity, IT Governance Frameworks and Fraud prevention strategies for municipalities.

Audit Committee Quarterly Reports

Audit Committee quarterly reports on clients areas of risk management and risk governance

15 15 15 0 15 0 15 15 60 30

Training Sessions Conducted

Training/raising awareness on governance and risk management

5 5 3 3 2 5 N/A N/A 10 13

4.2.2 Forensic Services: To promote a culture of zero tolerance for fraud and corruption.













Internal Audit Reports and an updated fraud risk database

Number of reviews on the status of fraud management in the departments, Public entities and municipalities

N/A N/A 8 0 8 0 4 0 20 0

Forensic Audits performed and investigations as per clients requests and referrals from the Assurance team

Number of Forensic Audits performed and investigations as per clients requests and referrals from the Assurance team

3 4 8 3 8 4 6 14 25 25

Forensic audit reports, Audit Committee reports and Accounting Officer reports

Updated register of forensic investigations – MEC Report

1 1 1 1 1 1 1 1 4 4

Follow-up investigation reports

Number of follow ups on completed investigations

5 15 10 14 10 15 5 10 30 54




B.5 Programme 5: Growth and Development

Purpose: The aim of this programme is to provide for specific departmental approved events and

initiatives not catered for in any other programmes which will provide development for the province.


1. To stimulate economic growth and employment creation through funding of strategic investment

initiatives.

2. To provide funding instruments that will broaden participation of PDIs in business and the

economy.


Pre and Post Budget Road-shows were held in the Province. The objectives of the Budget Road-

shows were to communicate and educate the communities on how the budget is put together, as well

as to get inputs from the communities. During the 2014/15 financial year the following events were

held:-

Post budget Roadshow in Nqutu

Dinner with business people held in Richards bay

Launch of savings month in Clemount.

OSS Social Ills together with KZNFLA teach a child to save in Impendle.

Pre-budget Roadshow and savings campaign in Dannhauser.

OSS launch of 16 days of activism in UMgungundlovu.

OSS world Aids day in Umkhambathini

Pre-budget Roadshow in Umtshezi.

Provincial Budget day presentation.

Finger lunch networking session.

Post budget business breakfast meeting in Durban




PROGRAMME FIVE: GROWTH AND DEVELOPMENT

5.1 Other Developmental Initiatives: To provide specific departmental approved events and initiatives not catered for in any other programmes that will provide

development for the province.













100% response to determinations of Technical Committee

Number of events co-ordinated successfully

1 2 N/A 2 1 4 3 3 5 11


GOVERNANCE INFORMATION: 31 MARCH 2015


PART C: GOVERNANCE

C. 1 Introduction

The KZN Provincial Treasury is committed to maintaining the highest standards of governance

which we believe is essential to promoting public confidence and managing public finances. We

have adopted a code of business ethics which sets out principles to guide employees in carrying

out their duties and responsibilities to the highest standards of personal and corporate integrity

when dealing with stakeholders. In addition the department has oversight committees, shared

internal audit services including the audit committee responsible for providing guidance and

advice.

C. 2 Risk Management

Provincial Treasury has an approved risk management policy and a risk management framework.

The department regularly conducts risk assessments to determine the effectiveness of risk

management strategies and to identify new and emerging risks. Line management are responsible

for identifying, evaluating, managing both risks and opportunities in their responsibility areas with

technical and operational support provided by the risk management unit. The risk management

unit also maintains the consolidated risk register and reports thereon. There is a risk management

committee in place that advises management on the overall system of risk management,

especially the mitigation of unacceptable levels of risk. The committee operates under the terms of

reference approved by the Accounting Officer and comprises of select members of Provincial

Treasury’s senior management team. The committee meets every quarter. The Audit Committee

further provides an independent oversight over the system of risk management and monitors the

effectiveness of the departments’ risk management systems.

During the period under review KZN Provincial Treasury assessed its risks relative to its annual

performance plans. Both internal and external conditions that may impede the achievement of the

goals expressed in the annual performance plans were identified and evaluated. There have been

major improvements in the management of risks within the department as ninety-nine percent of

action plans for the prior year’s assessment were implemented. The department is confident that

risks are effectively managed. The Provincial Treasury’s internal audit plan included audits

designed to test the adequacy, effectiveness and economy of the internal control systems to

counteract the effects of the significant risk factors.




C. 3 Fraud and Corruption

Provincial Treasury supports and fosters a culture of zero tolerance to fraud in all its

manifestations. In addition, all fraud is investigated and followed up by the application of all

remedies available within the full extent of the law as well as application of appropriate prevention

and detection controls. It is the responsibility of all employees to report all incidents of fraud to their

immediate supervisors.

Provincial Treasury has an approved fraud prevention plan which includes the whistle blowing

policy, fraud policy and responses plan. This plan is communicated to all departmental officials

through the intranet, quarterly meetings and fraud awareness campaigns/ posters. There is an anti

– corruption hotline which further encourages anonymous reporting of fraudulent activities. In line

with the Protected Disclosures act, the whistle blowing policy encourages employees to report

matters of concern without any fear of victimisation; we will follow up on all information received

through the hotline.

C. 4 Minimising Conflict of Interest

Provincial Treasury employees are expected to avoid personal activities and financial interest

which could conflict with their responsibilities to the department. In preventing conflict of interest,

financial disclosure forms are completed by all departmental officials on an annual basis. The

financial disclosures statements includes certification that the assets and financial activities of each

staff member, their spouses and family do not pose a conflict of interest with their official duties. In

addition, all employees in the Chief Financial Office (CFO) unit are required to sign a code of

conduct.

All Bid Committee members are required to sign declaration of interests and impartiality forms. Bid

Committee members are required to excuse themselves if a conflict of interest exists in the

process. Bidders are expected to declare their personal and business interests on the standard

bidding documents. All records of disclosure are kept by the Chief Financial Office.

C. 5 Code of Conduct

Provincial Treasury commits itself in ensuring that its employees display the highest possible

standard of ethical behaviour and that they maintain the highest level of professionalism in their




interaction with the public as well as other stakeholders. No employee may receive any gift or

payment which is, or may be construed as being, a bribe.

All employees are expected to comply with the code of business ethics approved by the

department.

C. 6 Health and Environmental Issues

The Department is committed to taking every reasonable precaution to ensure a safe working

environment for all employees as well as preserving the environment in which it operates. There’s

a departmental evacuation plan and procedures in place. The plan gives directive to evacuate

employees in case of disasters in buildings.

C. 7 Portfolio Committees

The department attended all committee meetings and reported on the status of finances as

requested by the committee. There were no outstanding resolutions as at year end.

C. 8 SCOPA Resolutions

There were no resolutions specific to Provincial Treasury in the 2014/15 financial year that remain

outstanding.

C. 9 Prior Modifications to Audit Reports

There were no modifications to the previous year’s audit report.

C. 10 Internal Control Unit

Provincial Treasury has a sound system of internal controls based on policies and guidelines to

assist management to manage a wide range of risks faced by the department. There is an on-

going process of identifying, evaluating, managing significant risks and internal controls. The

identified weaknesses are promptly addressed. During the financial year under review, internal

control activities included amongst others the following:

Reviewing all invoices produced for payment by external service providers. This ensured

that all SCM related deviations are timeously detected and corrected where necessary.

Conducting workshops to create awareness on fraud and fraud prevention

Conducting risk assessments for the department. This ensured the identification and

evaluation of all risks faced by the department at an operational level.




Ensuring the monitoring and evaluation on the implementation of effective and efficient

internal control and risk management strategies within the department

C. 11 Internal Audit and Audit Committees

1. Audit Committee

1.1 Objective of the Provincial Audit and Risk Committee

The Provincial Audit and Risk Committee (PARC) has been established to assist the KZN

Provincial Departments in fulfilling its oversight responsibilities for the integrity of financial reporting

processes, system of internal control over financial reporting, audit process for monitoring

compliance with laws and regulations and KZN Provincial Government Code of conduct, fraud

prevention, the risk management process and any other good governance processes.

The PARC reports that it has complied with its responsibilities arising from the Public Finance

Management Act, No.1 of 1999 (PFMA), Treasury Regulations, including any other statutory

regulations. The PARC also reports that it has adopted appropriate formal terms of reference as its

Provincial Audit and Risk Committee Charter, regulated its affairs in compliance with this charter

and discharged all its responsibilities as contained therein.

1.2 Key Activities of the Provincial Audit and Risk Committee during the year

The PARC exercised their responsibility as embedded in the PARC Charter through the:

Review of the effectiveness of the internal control systems in the provincial departments

including the internal financial controls and accounting systems through the Internal Audit (IA)

reports, wherein managements’ attitudes and response to internal control issues were

evaluated;

Review of IT Governance systems and their related internal controls;

Review the adequacy and reliability of financial information provided and financial statements

wherein the committee commented on the preparation of the financial statements as per the

legislative frameworks;

Provide risk oversight on financial reporting risks, fraud risks, IT risks and all other strategic

and operational risks based on the scope of the internal and external audits;

Review the adequacy and effectiveness of fraud prevention strategies, policies or procedures

and systems to prevent, detect fraud and corruption;




Considered accounting and auditing concerns identified and reported by internal and external

auditors for the committees intervention;

Review of the effectiveness of the IA in relation to their annual work programme, work co-

ordinated with the external auditors, investigation reports on allegations received and

investigated by IA as well as departments’ management response to recommendations

provided; and

Review of the departments’ compliance with legal and regulatory provisions.

1.3 Information on the Audit Committee Members

The following seven external members of the PARC were appointed on the 1st June 2011 to

assume Audit and Risk responsibilities over a period of three (3) years. Their contracts came to an

end on the 31st of May 2014 but subsequently extended until the 31st of July 2014 so as to enable

them to complete the external reporting process. The Committee members’ attendance of the

meetings during 2014/15 financial year is as depicted in the following table:

Name Qualifications Internal or External member

If Internal, position in the Department

Date Appointed

Date of Contract Ending

No. of meetings attended

Mr L M Mangquku CA(SA) MBL External N/A 1 June 2011 31 July 2014 3

Mr T Boltman

CIA CCSA CFE CGPA

External N/A 1 June 2011 31 July 2014 3

Ms M S Mothipe CA(SA) BComHons


Mr F Docrat

MBA CISM CISA MAP CGEIT


Mr V Naicker BCom Post-Graduation Diploma in taxation

External N/A 1 June 2011 31 May 2014 3

Ms H N Jaxa MBA BCompt (Hons) Bcomm (Acc)


Ms T A Tsautse LLM LLB BProc


Provincial Treasury had difficulties finding the replacement of the Committee but seven (7) months

after an intensive effort to recruit the new members of the Committee, only six (6) could be

identified and were appointed in February 2015. These new members have been appointed on a




three (3) year contract and have attended the meetings during the year under reporting as

depicted below:

Name Qualifications Internal or External member

If Internal, position in

the Department

Date Appointed

Date of Contract Ending

No. of meetings attended

Mr S P Simelane CA(SA) External N/A

23 February 2015

Not applicable

6

Mr R Dehal External N/A

23 February 2015

Not applicable

6

Ms T Njozela

External N/A 23 February

2015 Not

applicable 6

Mr D O’Conor CA(SA) External N/A

23 February 2015

Not applicable

6

Mr P Christianston CA(SA) External N/A

23 February 2015

Not applicable

6

Mr V Ramphaal CA(SA) External N/A

23 February 2015

Not applicable

6

2. Provincial Internal Audit Services (PIAS)

2.1 Objectives of PIAS

The PIAS provides a legislated function which covers an independent objective assurance and

consulting services on issues of internal controls, risk management and governance as provided in

the PFMA and International Standards for the Professional Practice of Internal Auditing (ISPPIA)

and in line with the principles in the King III Report on Corporate Governance and its scope,

comprehensively defined in chapter 3 of Treasury Regulations.

The PIAS supports all provincial departments, some public entities and municipalities in areas of

internal audit, risk management, governance and forensic investigations. The component has

formulated a three-lines-of defence mechanism which entails:

Providing assurance on the effectiveness of governance.

Risk management.

Compliance with systems and controls.

Based on the above, the PIAS also participates in the Audit Committee meetings of the

aforementioned institutions

The strategic objectives of the Unit are:

To provide an efficient, effective and economical assurance services

To build and maintain solid client relationships through providing value added services




To enhance internal audit capacity within and outside the unit

To promote good governance through assisting provincial departments, public entities and

municipalities with risk assessments and risk management capacity building exercises

To promote a culture of zero tolerance for fraud and corruption in the province

2.2 Activities of PIAS conducted during the 2014/15 financial year

a) Assurance Services

Assurance Services conducted internal audit reviews on various processes within Provincial

Treasury. These audits focused on high risk areas within the department and areas where certain

control weaknesses were identified. The management team of the departments was provided with

recommendations designed to improve the identified deficiencies in the business environment and

thereby assist with improved audit outcomes. Areas that were identified as transversal risk areas

across the province were included in our audits together with other legislated reviews and key

service delivery initiatives. The audits covered various focus areas such as Supply Chain

Management, Human Resources Management, Review of interim and annual Financial

Statements, Information Technology reviews of Contract and Performance Management,

Information Technology General Controls and certain Application Controls. Reviews of the

Departments Predetermined Objectives were also conducted during the year.

The activities and outcomes of the PIAS were complimented by the PARC together with the

Cluster Audit and Risk Committee (CARC) activities that rigorously monitored the work done by the

PIAS as well as interacting with Senior Departmental management on a regular basis to ensure

that there was improved accountability for issues raised and that all identified control weaknesses

were being addressed by the Head of Department.

b) Risk and Advisory Services

This component has been assisting the KZN Provincial Treasury to build a credible risk register by

facilitating risk assessments at business unit level and at the corporate level. The component has

also assisted in ensuring that the minimal governance structures, for example an approved risk

management policy and an internal risk committee, are in place. In addition, the component has

been monitoring, on a quarterly basis, the implementation of the risk mitigation strategies and

reporting such to the CARC on a quarterly basis. The component, in its plight to enhance

governance measures, embarked on a project that seeks to determine the level of risk




management maturity within the Provincial Treasury and the outcomes of this project will then be

used to grow risk management maturity to the accepted Provincial Risk Management Maturity level

that is determined by the Provincial Risk Committee. This risk management maturity project is still

in progress.

Another project (Review of the Business Continuity Management practices) was undertaken, and

we are pleased to advise that the Provincial Treasury has an approved Business Continuity Plan

and the relevant supporting documents e.g. the business impact analysis, disaster recovery plan,

etc. are all in place.

The component hosts risk forums as a platform to share risk management practices and wherein

lessons and challenges are communicated. Four such forums were held during the year; and the

feedback received was encouraging. The Provincial Treasury’s risk officer was in attendance at

these forums.

On the whole, the component is happy with the progress being made by the Provincial Treasury on

implementing the relevant governance structures, as well as monitoring of the risks in its risk

register and the timely meetings of their risk committee.

c) Forensic Investigation Services

During the period under review, the Forensic Services team provided support to the Department by

conducting a review of possible conflicts of interests within all provincial departments. The unit was

also involved in 4 matters that were reported for investigation. Two of these were still in progress at

year end. These investigations related to SCM and S&T matters.

The Forensic Services Unit also embarked on a programme to enhance the capacity and skills in

the Unit to assist in improving the turnaround time for producing reports of a high standard and

quality. This included the appointment of senior specialist staff on contract that were brought in to

provide specialist training and skills-transfer that complimented the existing resource base.




C. 12 Report of the Audit Committee

1. Objective and responsibility of the Audit and Risk Committee

The Provincial Audit and Risk Committee (PARC) has been established to assist the KZN

Provincial Government in fulfilling its oversight responsibilities by, amongst others, reviewing the

following:

(a) the effectiveness of the internal control systems;

(b) the effectiveness of the internal audit function;

(c) the risk areas of the institution’s operations covered in the scope of internal and external

audits;

(d) the adequacy, reliability and accuracy of the financial information provided to management

and other users of such information;

(e) any accounting and auditing concerns identified as a result of internal and external audits;

(f) the institution’s compliance with legal and regulatory provisions; and

(g) the activities of the internal audit function, including its annual work programme, coordination

with the external auditors, the reports of significant investigations and the responses of

management to specific recommendations.

The PARC is the shared audit and risk committee for the provincial departments, and is further

sub-divided into three Cluster Audit and Risk Committees that provide oversight to provincial

departments. The Department of Treasury is served by the Economic Cluster Audit & Risk

Committee.

The Committee reports that it has complied with its responsibilities arising from the Public Finance

Management Act, No.1 of 1999 (PFMA), Treasury Regulations 3.1, including all other related

prescripts; and also reports that it has adopted appropriate formal terms of reference as its Audit

and Risk Committee Charter, has regulated its affairs in compliance with this charter and has

discharged all its responsibilities as contained therein.

The Committee is therefore, pleased to present its report for the financial year ended 31 March

2015.




2. Audit Committee Members and Attendance

During the financial year under review, a new committee was appointed on 23 February 2015 and

consisted of the PARC and the Economic CARC members listed in the table below. The table also

outlines the meetings held and attendance thereof by members; to enable the Committee to

discharge their responsibilities relating to matters under review during the reporting period.

3. The Effectiveness of Internal Control

The Committee has reviewed the reports of the Internal Auditors, the Audit Report on the Annual

Financial Statements and Management Report of the Auditor General of South Africa (AGSA) and

has noted the weaknesses in controls around the following areas:

Online Leave System-Back Up

Human Resource Management -Vacant posts

IT Governance processes

4. Risk Management

The Committee noted that the department is progressing towards building a credible risk register

both at the business unit level and at the corporate level. The committee further noted that the

department has an approved risk management policy, Business Continuity Plan (which includes

Disaster Recovery Plan) and an internal risk committee. The committee is, however, concerned

that the position of a risk manager is not pegged at the required senior management level (SMS

Level 13), and urge the department to correct this anomaly as a matter of urgency.

# Name of Member PARC

Meetings Attended

Economic CARC

Meetings Attended

Special Meetings

1. Mr S Simelane (Acting Chairman

of PARC and Economic CARC) 2 2 2

2. Mr R Dehal 2 2 2

3. Mr V Ramphal 2 2 2

4. Mr P Christianson 2 N/A 2

5. Mr D O’Connor 2 N/A 2

6. Ms T Njozela 2 N/A 2




The Committee appreciates the effort and progress being made on risk management in the

department, and believes that by implementing the following on a continuous and consistent basis,

the culture of risk management within the department will mature:

a) Validating and measuring the impact that completed risk mitigation plans make on the risk

exposure, together with regular updates of the risk register;

b) Reporting on emerging risks, if any, on a quarterly basis; and

c) Identifying critical risks in the light of the department’s exposure to meeting its objectives

effectively, efficiently and economically;

5. Forensics Investigations

During the period under review, the Committee noted that there were six (6) forensic

investigations, all relating to alleged procurement irregularities, which the department has referred

to the Provincial Internal Audit Services for investigation. Two (2) of these investigations were

completed, and the other four (4) reports drafted and are being reviewed. The department and the

Provincial Internal Audit Service are urged to promptly finalize the outstanding investigations, and

work together to implement recommendations on the finalised investigation.

6. Quality of in year management and monthly/quarterly reports

The Committee was satisfied with the content and quality of quarterly reports in respect of in year

management and quarterly performance reports submitted in terms of the PFMA and the Division

of Revenue Act prepared and issued by the Accounting Officer of the Department during the year

under view, except for materially underspent budget on Administration, Fiscal Resource

Management and Financial Management programmes to the amount of R34, 76 million.

Based on the reports of Internal Auditors and the Auditor General, the Committee has not noted

any material findings on the usefulness and reliability of the reported performance information.

7. Evaluation of Financial Statements

The Committee has:

Reviewed and discussed the audited Annual Financial Statements to be included in the Annual

Report, with the Auditor General and the Accounting Officer;

Reviewed the Auditor General’s Management Report;




Reviewed the Department’s processes for compliance with legal and regulatory provisions and

did not identify any instances of material non-compliance with specific matters in key legislation

The financial statements were free from material misstatements.

8. Internal Audit

In line with the PFMA and the King III Report on Corporate Governance requirements, Internal

Audit Function provides the Audit Committee and Management with reasonable assurance that the

internal controls are adequate and effective. This is achieved through the implementation of a risk

based Internal Audit plan. The Committee has, through the CARC monitoring processes,

considered internal audit reports issued after assessing the adequacy and effectiveness of controls

designed to mitigate the risks associated with operational and strategic activities of the

department, as well as the appropriateness of the of corrective actions provided by management to

improve the control environment.

The Internal Audit function was effective during the period under review and there were no

unjustified restrictions or limitations. The Committee will in the forthcoming year, monitor progress

to ensure that the Internal Audit Function continues to add value to the department and achieves

its optimal performance. The Committee also monitored the implementation of Internal Audit

recommendations to the Department.

9. Auditor-General’s Report

The Committee has monitored the implementation of corrective action plans to address the audit

issues raised in the prior year by the Auditor General. The Committee has met with the Auditor

General of South Africa to ensure that there were no unresolved issues that emanated from the

current regulatory audit.

We commend the department for submitting annual financial statements and an annual

performance report that were free from material misstatements.

The Committee concurs and accepts the Auditor General’s opinion regarding the Annual Financial

Statements, and proposes that the Audited Annual Financial Statements be accepted and read

together with the report of the Auditor General.




10. Appreciation

The Committee wishes to express its appreciation to the Management of the Department, the

Auditor General of South Africa, and the Provincial Internal Audit Services for the co-operation

and information they have provided to enable us to compile this report.

__________________________ Mr S Simelane

Acting Chairman: Provincial Audit and Risk Committee

14 August 2015

KWAZULU NATAL PROVINCIAL TREASURY VOTE 6

REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2015


Report by the Accounting Officer to the Executive Authority and the KwaZulu-Natal

Legislature.

General review of the state of financial affairs

Table below shows the revenue budget for Provincial Treasury Financial Year 2014/15, and the

preliminary revenue collected for the year.

Departmental receipts

2013/2014 2014/2015

Estimate

Actual Amount

Collected

(Over)/Under Collection

Estimate

Actual Amount

Collected

(Over)/Under Collection

R’000 R’000 R’000 R’000 R’000 R’000

Tax Receipts - - - 490 803 467 317 (23 486)

Casino taxes - - - 81 902 71 205 (10 697)

Horse racing taxes - - - - - -

Liquor licences - - - - - -

Motor vehicle licences

- - - - - -

Sale of goods and services other than capital assets

160 170 (10) 182 322 140

Transfers received - - -

Fines, penalties and forfeits

- 1 (1)

Interest, dividends and rent on land

200 004 267 882 (67 878) 266 048 309 569 43 521

Sale of capital assets - 434 (434) 160 39 (121)

Financial transactions in assets and liabilities

340 371 (31) 375 2 514 2 136

Total R 200, 504 R 268, 858 (R 68,354) R 839 470 R 850 967 R 11 497

The department collected revenue totalling R850.967 million in 2014/15, slightly exceeding the

revenue budget by 1.4 per cent. Revenue in respect of the following categories was higher than

budgeted:

Revenue collected against Sale of goods and services other than capital assets was at R322

000, exceeding the revenue budget of R182 000. The collection against this category is in

respect of parking fees, gaming licenses, commission received on PERSAL deductions and

sale of tender documents. The over-collection is mainly due to higher than anticipated sale

of tender documents. Revenue collection against this category is difficult to project with

accuracy because of the uncertain demand for tender documents.

Interest, dividends and rent on land was over-collected by R43.521 million. Revenue

collected against this category is mainly in respect of interest earned on the Inter-

Governmental Cash Co-ordination (IGCC) and the Pay Master-General (PMG) accounts.

The interest earned from these accounts is directly linked to the amount of cash on hand and

the interest rate fluctuations. The positive cash balance is due to the continued




implementation of financial controls and tight cash flow management by provincial

departments.

Transactions in financial assets and liabilities collected R2.514 million against the revenue

budget of R375 000. This substantial over-collection relates to previous years’

interdepartmental claims paid by the Department of Sport and Recreation in respect of

assistance provided by Provincial Treasury in the former department’s SCM unit. Also, a

nominal amount of the collection was in respect of recoveries from staff debts, which are

difficult to project with certainty.

This over-collection was offset to some extent by under-collections in respect of the following:

Casino taxes under-collected by R23.486 million, due to slow growth in the Amajuba region

which resulted in lower than anticipated increase in revenue at the Blackrock casino. Also,

the Type B Limited Payout Machines (LPMs), independent sites operations and Bingo roll out

progress have progressed slower than anticipated as a result of low consumer activity, and

this cannot be accurately predicted.

Horse racing taxes collected an amount of R71.205 million against a budget of

R81.902million. Globally, turnover on horse racing generated by the bookmaking industry has

declined, and South Africa is no exception to this.

Sale of capital assets was under-collected by R121 000, which was due to lower than

expected revenue earned from the auctioning of the department’s redundant office

equipment. Revenue collected mainly relates to the sale of a generator to the former MEC.

Programme Expenditure Programme Name

2013/2014 2014/2015

Final Appropriation

Actual Expenditure

(Over)/ Under Expenditure

Final Appropriation

Actual Expenditure

(Over)/Under Expenditure

R’000 R’000 R’000 R’000 R’000 R’000

Administration 113,064 96, 933 16, 131 118 093 113 215 4 878

Fiscal Resource Management

102, 395 91, 203 11, 192 87 023 75 467 11 556

Financial Management

269, 086 240, 986 28, 100 327 753 311 048 16 705

Internal Audit 109, 581 107, 363 2, 218 131 764 130 420 1 344

Growth and Development

59, 845 41, 055 18, 790 44 093 43 812 281

TOTAL R 653, 971 R 577, 541 R76, 431 R 708 726 R 673 962 R 34 764

It should be noted that the department’s budget increased by R254 000 in the Second

Adjustments Estimate. The uMgungundlovu Academy of Sport (UAS) was unable to pay its




service providers which necessitated Provincial Treasury and the Department of Sport and

Recreation to step in to do a full reconciliation of amounts owing. In this regard, R1.054 million

was sourced from savings within Vote 6: Provincial Treasury (due to lower than anticipated bank

charges) and R254 000 was moved from Vote 16: Sport and Recreation to Vote 6: Provincial

Treasury for the payment of UAS service providers. This transaction was formalised in the

2014/15 Second Adjustments Estimate and is part of the Adjusted Appropriation within

Programme 3: Financial Management and against Goods and services.

Spending in respect of economic classification can be summarised as follows:

Compensation of employees was at 96.9 per cent, reflecting an under expenditure of R6.724

million due to a lack of suitably qualified candidates and delays and/or the later than

projected filling of vacant posts resulting from lengthy recruitment processes, including

Senior Manager posts in the following units: Asset Management, Supply Chain

Management, Public Private Partnership, Contract Management, among others.

Goods and services was at 93.4 per cent, resulting in an under-expenditure of R25.947

million, due to the following:

Lower than anticipated audit costs.

Savings from travel and subsistence, catering, and transport provided for departmental

activities costs, as well as venues and facilities as a result of cost-cutting.

Unsatisfactory work done by service providers within the MSP, which led to payments

being withheld for orders already issued.

Infrastructure Crack Team projects being placed on hold due to on-going investigations.

SITA invoices that were not received by year-end.

The saving against Interest and Rent on Land of R648 000 relates to an improvement in the

funds available in the PMG and IGCC accounts, resulting in no interest having to be paid by

the province, as well as lower bank charges incurred.

With regard to Transfers and subsidies:

Provinces and municipalities was, at 99.3 per cent, under-spent by R214 000.

Payments to Non-profit institutions was at 94.6 per cent resulting in a saving of

R124 000. This was mainly for Financial Literacy Programme that was initiated by the




MEC for Finance with the aim of educating the citizens of the province about using their

money wisely and also on various aspects such as encouraging saving and financial

discipline. Moreover the payments made for uMgungundlovu Academy of Sports were

made against this item.

Households was at 97.5 per cent resulting in a saving of R179 000 at year end.

Spending against other relates to Transfers and subsidies to: Departmental agencies

and accounts for the Gaming and Betting as well as payments made to the SABC for

TV licences.

Machinery and equipment was at 94.1 per cent resulting in a saving of R929 000 at year

end.

Payments for financial assets was over-spent by R4 000 in respect of thefts and losses

which are not budgeted for due to their uncertain nature.

The following post adjustment virements were made between programmes:

A total amount of R5.855 million was moved to Programme 4: Internal Audit, the details are as

follows:

An amount of R3.255 million was moved from Programme 3: Financial Management: Goods

and Services.

An amount of R2.600 million was moved from Programme 5: Growth and Development:

Goods and Services.

Various post Adjustment Estimates were made between economic classifications within

the various programmes.

All Virements were approved by the Accounting Officer of the department in terms of

Section 43(1) of the Public Finance Management Act.

2014/15 Rollovers

The department has requested a roll-over of R 19.318 million in respect of its Goods and

services budget, and




A special roll-over of R 218 000 in respect of Transfers and subsidies to: Provinces and

municipalities budget to cater for the outstanding invoice relating to payment for uMsunduzi

Electrification Project.

Fruitless, Wasteful or Irregular Expenditure

There was no fruitless, wasteful or irregular expenditure not condoned during 2014/15

financial year.

Future plans of the department

The department has tabled the 2015-2020 strategic plan in line with the new administration

of government.

Public Private Partnerships

The department has no PPP project reported in past financial years and there is no current

project.

Discontinued activities / activities to be discontinued

The department did not have any discontinued activities for the year ended.

New or proposed activities

As of 01 April 2014 the department took over the function of Gaming and Betting control

from the Office of the Premier.

Supply chain management

TENDER NO DESCRIPTION STATUS

ZNT1191/2014-F Crack team

Ongoing panel appointed for a duration of 3 years commencing 01 April 2015 – 31 May 2018

ZNT1193/2014-F Panel of internal audit Awaiting finalisation of the appeals process

ZNT1194/2014-F Panel of financial management Awaiting finalisation of the appeals process

ZNT1195/2014-F Kzn regional technology hubs projects

National pride t/a GWI project managers appointed at a value R13 860 000

ZNT1196/2014-F Panel of municipal finance Awaiting finalisation of the appeals process

ZNT1197/2014-F Kzn winter air tour Project cancelled




Prevention of Irregular expenditure and SCM challenges

The department has policies and practice notes that should be followed in executing SCM

functions to avoid irregular expenditure. There were no serious challenges encountered in

the SCM area that threatened the smooth functioning of the unit. However the bid appeals

by aggrieved bidders has been increasing and this may delay service delivery and budget

spending.

Gifts and Donations from non-related parties

Donations Received (R’000)

ABSA Bank Sponsorship for the 2015 Budget Business Breakfast: 100

Total 100

Donations made in Kind (R’000)

Various Schools 203

IssyGeshen Old Age Home 20

Hluma Women's Support Group 18

Total 241

Donor Funding

The department was allocated a donor funding (European Union) for the science parks

technology hubs however there was no spending made for this funding during the year

end 2014/15. The service level agreement with the service provider was only concluded

on 28 March 2015 effective.

Exemptions and deviations received from the National Treasury

There were no exemptions received by the department during the year 2014/15.

Events after the reporting date

There were no subsequent events occurred after reporting date.

Acknowledgement/s or Appreciation

I would like to express my special thanks to MEC for Finance for her support, Treasury

management and staff for their hard work during the year.




Conclusion

This report presents the annual financial statements and performance information report for the

financial year 2014/15.

Mr H.A.W.Conradie

Acting Accounting Officer

29 May 2015


REPORT OF THE AUDITOR-GENERAL FOR THE YEAR ENDED 31 MARCH 2015


REPORT OF THE AUDITOR-GENERAL TO KWAZULU-NATAL PROVINCIAL LEGISLATURE

ON VOTE NO. 6: KWAZULU-NATAL PROVINCIAL TREASURY

REPORT ON THE FINANCIAL STATEMENTS

Introduction

1. I have audited the financial statements of the KwaZulu-Natal Provincial Treasury set out on

pages 131 to 177, which comprise the appropriation statement, the statement of financial

position as at 31 March 2015, the statement of financial performance, statement of changes in

net assets, and cash flow statement for the year then ended, as well as the notes, comprising a

summary of significant accounting policies and other explanatory information.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation and fair presentation of these

financial statements in accordance with the Modified Cash Standard (MCS) prescribed by the

National Treasury and the requirements of the Public Finance Management Act of South Africa,

1999 (Act No. 1 of 1999) (PFMA) and the Division of Revenue Act of South Africa, 2014 (Act No.

10 of 2014) (DoRA), and for such internal control as the accounting officer determines is

necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

Auditor-general’s responsibility

3. My responsibility is to express an opinion on these financial statements based on my audit. I

conducted my audit in accordance with International Standards on Auditing. Those standards

require that I comply with ethical requirements, and plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material

misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the provincial treasury’s preparation and fair presentation of

the financial statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the




provincial treasury’s internal control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a

basis for my audit opinion.

Opinion

6. In my opinion, the financial statements present fairly, in all material respects, the financial

position of the KwaZulu-Natal Provincial Treasury as at 31 March 2015 and its financial

performance, and cash flows for the year then ended, in accordance with the MCS and the

requirements of the PFMA and DoRA.

Additional matter

7. I draw attention to the matter below. My opinion is not modified in respect of this matter.

Unaudited supplementary schedules

8. The annexures set out on pages 178 to189 does not form part of the financial statements and

is presented as additional information. I have not audited these annexures and, accordingly, I do

not express an opinion thereon.

Report on other legal and regulatory requirements

9. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and

the general notice issued in terms thereof, I have a responsibility to report findings on the

reported performance information against predetermined objectives for selected programmes

presented in the annual performance report, compliance with legislation and internal control. The

objective of my tests was to identify reportable findings as described under each subheading but

not to gather evidence to express assurance on these matters. Accordingly, I do not express an

opinion or conclusion on these matters.

Predetermined objectives

10. I performed procedures to obtain evidence about the usefulness and reliability of the

reported performance information for programme 2: fiscal resource management on pages 25 to

35, programme 3: financial management on pages 36 to 50 as well as programme 4: internal




audit on pages 51 to 57, presented in the provincial treasury’s annual performance report for the

year ended 31 March 2015.

11. I evaluated the reported performance information against the overall criteria of usefulness

and reliability.

12. I evaluated the usefulness of the reported performance information to determine whether it

was presented in accordance with the National Treasury’s annual reporting principles and

whether the reported performance was consistent with the planned programmes. I further

performed tests to determine whether indicators and targets were well defined, verifiable,

specific, measurable, time bound and relevant, as required by the National Treasury’s

Framework for managing programme performance information (FMPPI).

13. I assessed the reliability of the reported performance information to determine whether it was

valid, accurate and complete.

14. I did not identify any material findings on the usefulness and reliability of the reported

performance information for the fiscal resource management; financial management as well as

internal audit programmes.

Compliance with legislation

15. I performed procedures to obtain evidence that the provincial treasury had complied with

applicable legislation regarding financial matters, financial management and other related

matters. I did not identify any instances of material non-compliance with specific matters in key

legislation, as set out in the general notice issued in terms of the PAA.

Internal control

16. I considered internal control relevant to my audit of the financial statements, annual

performance report and compliance with legislation. I did not identify any significant deficiencies

in internal control.

Other reports

Investigations

17. The provincial treasury internal audit unit conducted an investigation into alleged fraud and

corruption pertaining to supply chain management collusion. A disciplinary hearing commenced




in November 2012. The presiding officer recommended that an official be reinstated with a

sanction of a final written warning. The investigation has been finalised.

18. The provincial treasury internal audit unit commenced with the infrastructure crack team

investigation in January 2014. The investigation was later handed over to special investigating

unit in August 2014. In addition, the internal audit unit is also investigating alleged fraud and

corruption on subsistence and travel claims. This investigation commenced in September 2013.

These investigations are still in progress.

Pietermaritzburg

31 July 2015


PART D: HUMAN RESOURCE MANAGEMENT INFORMATION FOR THE YEAR ENDED 31 MARCH 2015



TABLE 2.1 - Personnel costs by Programme

Programme

Total Voted

Expenditure

(R'000)

Compensation

of Employees

Expenditure

(R'000)

Training

Expenditure

(R'000)

Professional

and Special

Services

(R'000)

Compensation of

Employees as

percent of Total

Expenditure

Average

Compensation

of Employees

Cost per

Employee

(R'000)

Employment

Administration 107 326 55 836 0 0 52 118 353

Financial management 310 247 55 465 0 0 17.9 117 353

Fiscal resource management 75 467 45 547 0 0 60.4 96 353

Growth & development 43 812 0 0 0 0 0 353

Internal audit 130 249 54 987 0 0 42.2 116 353

Z=Total as on Financial

Systems (BAS) 673 999 211 835 0 0 31.4 446 353

TABLE 2.2 - Personnel costs by Salary band

Salary Bands

Compensation

of Employees

Cost including

Transfers

(R'000)

Percentage of

Total

Personnel

Cost for

Department

Average

Compensation

Cost per

Employee (R)

Total

Personnel Cost

for Department

including

Goods and

Services

(R'000)

Number of

Employees

Skilled (Levels 3-5) 7 035 3.1 123 421 224 766 57

Highly skilled production

(Levels 6-8) 26 762 11.9 361 649 224 766 74

Highly skilled supervision

(Levels 9-12) 94 612 42.1 550 070 224 766 172

Senior management (Levels

13-16) 48 602 21.6 972 040 224 766 50

Contract (Levels 1-2) 3 207 1.4 458 143 224 766 7




Contract (Levels 3-5) 10 959 4.9 156 557 224 766 70

Contract (Levels 6-8) 3 495 1.6 249 643 224 766 14

Contract (Levels 9-12) 5 081 2.3 564 556 224 766 9

Contract (Levels 13-16) 13 354 5.9 953 857 224 766 14

Periodical Remuneration 4 942 2.2 117 667 224 766 42

TOTAL 218049 97 428387 224766 509

TABLE 2.3 - Salaries, Overtime, Home Owners Allowance and Medical Aid by Programme

Programme Salaries

(R'000)

Salaries as %

of Personnel

Cost

Overtime

(R'000)

Overtime

as % of

Personnel

Cost

HOA (R'000)

HOA as % of

Personnel

Cost

Medical

Ass.

(R'000)

Medical

Ass. as %

of

Personnel

Cost

Total

Personnel

Cost per

Programm

e (R'000)

Administration 42761 73.4 578 1 1221 2.1 1596 2.7 58267

Financial management 44229 74.3 102 0.2 1203 2 1104 1.9 59544

Fiscal resource management 37898 82 0 0 1120 2.4 631 1.4 46242

Internal audit 45750 79.1 1 0 1394 2.4 1039 1.8 57816

Prog 1: administration* 2142 74.6 3 0.1 76 2.6 88 3.1 2871

Prog 3: financial

management* 24 88.9 0 0 0 0 1 3.7 27

TOTAL 172804 76.9 684 0.3 5014 2.2 4459 2 224767

TABLE 2.4 - Salaries, Overtime, Home Owners Allowance and Medical Aid by Salary Band

Salary bands Salaries

(R'000)

Salaries as %

of Personnel

Cost

Overtime

(R'000)

Overtime

as % of

Personnel

Cost

HOA (R'000)

HOA as % of

Personnel

Cost

Medical

Ass.

(R'000)

Medical

Ass. as %

of

Personnel

Cost

Total

Personnel

Cost per

Salary

Band

(R'000)

Skilled (Levels 3-5) 4847 68.9 12 0.2 406 5.8 597 8.5 7039

Highly skilled production

(Levels 6-8) 18838 70.1 526 2 841 3.1 1363 5.1 26889




Highly skilled supervision

(Levels 9-12) 73265 75 80 0.1 2318 2.4 2051 2.1 97625

Senior management (Levels

13-16) 40189 78.7 0 0 1423 2.8 424 0.8 51095

Contract (Levels 1-2) 3200 99.3 8 0.2 0 0 0 0 3223

Contract (Levels 3-5) 10937 96.8 19 0.2 0 0 0 0 11295

Contract (Levels 6-8) 3416 96.6 0 0 18 0.5 0 0 3538

Contract (Levels 9-12) 4970 94.1 39 0.7 8 0.2 0 0 5280

Contract (Levels 13-16) 13142 96.8 0 0 0 0 24 0.2 13578

Periodical Remuneration 0 0 0 0 0 0 0 0 5205

TOTAL 172804 76.9 684 0.3 5014 2.2 4459 2 224767


TABLE 3.1 - Employment and Vacancies by Programme at end of period

Programme Number of Posts Number of Posts

Filled Vacancy Rate

Number of Posts Filled Additional

to the Establishment

Administration, Permanent 120 104 13.3 19

Financial management, Permanent 125 95 24 40

Fiscal resource management, Permanent 71 66 7 11

Internal audit, Permanent 94 88 6.4 44

TOTAL 410 353 13.9 114

TABLE 3.2 - Employment and Vacancies by Salary Band at end of period

Salary Band Number of Posts Number of Posts

Filled Vacancy Rate



Lower skilled (Levels 1-2), Permanent 0 0 0 0

Skilled (Levels 3-5), Permanent 65 57 12.3 0

Highly skilled production (Levels 6-8), Permanent 94 74 21.3 0




Highly skilled supervision (Levels 9-12), Permanent 195 172 11.8 0

Senior management (Levels 13-16), Permanent 56 50 10.7 0

Contract (Levels 1-2), Permanent 7 7 0 7





TOTAL 524 467 10.9 114

TABLE 3.3 - Employment and Vacancies by Critical Occupation at end of period

Critical Occupations Number of Posts Number of Posts

Filled Vacancy Rate



Administrative related, Permanent 46 39 15.2 2

Bus and heavy vehicle drivers, Permanent 6 6 0 0

Client inform clerks(switchb receipt inform clerks), Permanent 2 2 0 0

Communication and information related, Permanent 4 4 0 0

Finance and economics related, Permanent 39 33 15.4 0

Financial and related professionals, Permanent 55 44 20 9

Financial clerks and credit controllers, Permanent 19 16 15.8 14

General legal administration & rel. professionals, Permanent 0 0 0 0

Head of department/chief executive officer, Permanent 1 1 0 0

Human resources & organisat developm & relate prof, Permanent 22 18 18.2 0

Human resources clerks, Permanent 21 17 19 1

Human resources related, Permanent 7 7 0 0

Information technology related, Permanent 2 2 0 1

Library mail and related clerks, Permanent 6 6 0 0

Material-recording and transport clerks, Permanent 4 3 25 0

Messengers porters and deliverers, Permanent 2 3 -50 0

Other administrat & related clerks and organisers, Permanent 29 28 3.4 63

Other administrative policy and related officers, Permanent 49 41 16.3 6




Other information technology personnel., Permanent 9 6 33.3 0

Other occupations, Permanent 0 0 0 0

Risk management and security services, Permanent 0 0 0 0

Secretaries & other keyboard operating clerks, Permanent 31 27 12.9 4

Senior managers, Permanent 56 50 10.7 14

TOTAL 410 353 13.9 114


TABLE 4.1 - Job Evaluation

Salary Band Number of

Posts

Number of Jobs

Evaluated

% of Posts Evaluated

Number of Posts Upgraded

% of Upgraded

Posts Evaluated

Number of Posts

Downgraded

% of Downgraded

Posts Evaluated

Lower skilled (Levels 1-2) 0 0 0 0 0 0 0

Contract (Levels 1-2) 0 0 0 0 0 0 0



Contract (Levels 9-12) 0 0 0 0 0 0 0

Contract (Band A) 0 0 0 0 0 0 0

Contract (Band B) 0 0 0 0 0 0 0

Contract (Band C) 0 0 0 0 0 0 0

Contract (Band D) 0 0 0 0 0 0 0

Skilled (Levels 3-5) 65 0 0 0 0 0 0

Highly skilled production (Levels 6-8) 94 12 12.8 0 0 0 0

Highly skilled supervision (Levels 9-12) 195 14 7.2 0 0 0 0

Senior Management Service Band A 40 5 12.5 0 0 0 0

Senior Management Service Band B 12 0 0 0 0 0 0

Senior Management Service Band C 3 0 0 0 0 0 0

Senior Management Service Band D 1 0 0 0 0 0 0




TOTAL 410 31 7.6 0 0 0 0

** 44 other posts at various levels were evaluated during this financial year but they relate to the prosposed structure for the Department and are not part of the approved establishment of the Department as at close of reporting, hence they cannot be indicated on the table above

TABLE 4.2 - Profile of employees whose positions were upgraded due to their posts being upgraded

Beneficiaries African Asian Coloured White Total

Female 0 0 0 0 0

Male 0 0 0 0 0

Total 0 0 0 0 0

Employees with a Disability 0 0 0 0 0

TABLE 4.3 - Employees whose salary level exceed the grade determined by Job Evaluation [i.t.o PSR 1.V.C.3]

Occupation Number of Employees

Job Evaluation

Level

Remuneration Level

Reason for Deviation

No of Employees in

Dept

xxx 0 xxx xxx xxx

xxx 0 xxx xxx xxx

Total 0

Percentage of Total Employment 0

0

TABLE 4.4 - Profile of employees whose salary level exceeded the grade determined by job evaluation [i.t.o. PSR 1.V.C.3]

Beneficiaries African Asian Coloured White Total

Female 0 0 0 0 0

Male 0 0 0 0 0

Total 0 0 0 0 0

Employees with a Disability 0 0 0 0 0





TABLE 5.1 - Annual Turnover Rates by Salary Band

Salary Band

Employment at Beginning of Period (April

2014)

Appointments Terminations Turnover Rate

Skilled (Levels 3-5), Permanent 55 6 6 10.9

Highly skilled production (Levels 6-8), Permanent 77 10 13 16.9

Highly skilled supervision (Levels 9-12), Permanent 163 16 15 9.2

Senior Management Service Band A, Permanent 33 2 3 9.1

Senior Management Service Band B, Permanent 11 1 0 0

Senior Management Service Band C, Permanent 2 0 1 50

Senior Management Service Band D, Permanent 1 0 0 0


Contract (Levels 3-5), Permanent 86 51 50 58.1



Contract (Band A), Permanent 7 6 2 28.6

Contract (Band B), Permanent 0 1 0 0

Contract (Band C), Permanent 0 3 1 0

Contract (Band D), Permanent 0 0 1 0

TOTAL 490 176 176 35.9

TABLE 5.2 - Annual Turnover Rates by Critical Occupation

Occupation


2014)

Appointments Terminations Turnover Rate

Administrative related, Permanent 39 3 2 5.1

Bus and heavy vehicle drivers, Permanent 6 0 1 16.7

Client inform clerks(switchb recept inform clerks), Permanent 2 1 0 0

Communication and information related, Permanent 4 0 1 25




Finance and economics related, Permanent 33 2 0 0

Financial and related professionals, Permanent 44 22 20 45.5

Financial clerks and credit controllers, Permanent 16 0 0 0

General legal administration & rel. professionals, Permanent 0 0 0 0

Head of department/chief executive officer, Permanent 1 0 0 0

Human resources & organisat developm & relate prof, Permanent 16 2 3 18.8

Human resources clerks, Permanent 17 0 0 0

Human resources related, Permanent 5 0 0 0

Information technology related, Permanent 2 0 0 0

Library mail and related clerks, Permanent 6 0 0 0

Material-recording and transport clerks, Permanent 3 0 0 0

Messengers porters and deliverers, Permanent 3 0 0 0

Other administrat & related clerks and organisers, Permanent 28 0 1 3.6

Other administrative policy and related officers, Permanent 41 0 2 4.9

Other information technology personnel., Permanent 6 0 0 0

Other occupations, Permanent 0 0 0 0

Risk management and security services, Permanent 0 0 0 0

Secretaries & other keyboard operating clerks, Permanent 23 2 4 17.4

Senior managers, Permanent 46 3 4 8.7

TOTAL 341 35 38 11.1

TABLE 5.3 - Reasons why staff are leaving the department

Termination Type Number Percentage of

Total Resignations

Percentage of Total

Employment Total

Total Employment

Death, Permanent 2 5.3 0.6 38 353

Resignation, Permanent 19 50 5.4 38 353

Expiry of contract, Permanent 0 0 0 38 353

Transfers out of the Department 11 28.9 3.1 38 353

Dismissal-misconduct, Permanent 1 2.6 0.3 38 353

Retirement, Permanent 5 13.2 1.4 38 353

TOTAL 38 100 10.8 38 353




Resignations as % of Employment

5.38

TABLE 5.4 - Granting of Employee Initiated Severance Packages

Category No of

applications received

No of applications

referred to the MPSA

No of applications supported by

MPSA

No of Packages

approved by department

Lower Skilled (Salary Level 1-2) 0 0 0 0

Skilled (Salary Level 3-5) 0 0 0 0

Highly Skilled Production (Salary Level 6-8) 0 0 0 0

Highly Skilled Production (Salary Level 9-12) 0 0 0 0

Senior Management (Salary Level 13 and higher) 0 0 0 0

Total 0 0 0 0

TABLE 5.5 - Promotions by Critical Occupation

Occupation


2014)

Promotions to another Salary

Level

Salary Level Promotions as

a % of Employment

Progressions to another

Notch within Salary Level

Notch progressions

as a % of Employment

Administrative related 39 1 2.6 29 74.4

Bus and heavy vehicle drivers 6 3 50 4 66.7

Client inform clerks(switchb recept inform clerks) 2 0 0 1 50

Communication and information related 4 0 0 3 75

Finance and economics related 33 0 0 13 39.4

Financial and related professionals 44 11 25 32 72.7

Financial clerks and credit controllers 16 0 0 11 68.8

General legal administration & rel. professionals, Permanent 0 0 0 0 0

Head of department/chief executive officer 1 0 0 0 0

Human resources & organisat developm & relate prof 16 1 6.3 12 75

Human resources clerks 17 0 0 9 52.9

Human resources related 5 0 0 2 40




Information technology related 2 1 50 1 50

Library mail and related clerks 6 0 0 3 50

Material-recording and transport clerks 3 0 0 1 33.3

Messengers porters and deliverers 3 0 0 3 100

Other administrat & related clerks and organisers 28 0 0 13 46.4

Other administrative policy and related officers 41 0 0 20 48.8

Other information technology personnel. 6 0 0 4 66.7

Other occupations 0 1 0 0 0

Risk management and security services 0 0 0 2 0

Secretaries & other keyboard operating clerks 23 0 0 14 60.9

Senior managers 46 0 0 29 63

TOTAL 341 18 5.3 206 60.4

TABLE 5.6 - Promotions by Salary Band

Salary Band


2014)

Promotions to another Salary

Level

Salary Level Promotions as

a % of Employment

Progressions to another

Notch within Salary Level

Notch progressions

as a % of Employment

Skilled (Levels 3-5), Permanent 55 2 3.6 16 29.1

Highly skilled production (Levels 6-8), Permanent 77 6 7.8 49 63.6

Highly skilled supervision (Levels 9-12), Permanent 163 10 6.1 106 65

Senior management (Levels 13-16), Permanent 47 0 0 33 70.2

Contract (Levels 1-2), Permanent 40 0 0 2 5





TOTAL 490 18 3.7 206 42





TABLE 6.1 - Total number of Employees (incl. Employees with disabilities) per Occupational Category (SASCO)

Occupational Categories Male,

African Male,

Coloured Male, Indian

Male, Total

Blacks

Male, White

Female,

African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total

Legislators, senior officials and managers, Permanent

20 2 6 27 2 8 1 8 17 3 50

Professionals, Permanent 77 0 6 83 6 59 1 12 72 11 172

Technicians and associate professionals, Permanent

30 0 1 31 0 33 1 4 38 5 74

Clerks, Permanent 11 1 0 12 0 30 1 6 37 5 54

Service and sales workers, Permanent

1 0 0 1 0 0 0 0 0 0 1

Plant and machine operators and assemblers, Permanent

0 0 0 0 0 0 0 0 0 0 0

Elementary occupations, Permanent

2 0 0 2 0 0 0 0 0 0 2

TOTAL 141 3 13 157 8 130 4 30 164 24 353

Male,

African Male,


Male, Total

Blacks

Male, White

Female,

African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total

Employees with disabilities 3 0 1 4 0 1 0 0 1 0 5

TABLE 6.2 - Total number of Employees (incl. Employees with disabilities) per Occupational Bands

Occupational Bands Male,

African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total

Top Management, Permanent 0 0 0 0 0 1 0 0 0 0 1

Senior Management, Permanent

19 2 6 27 2 7 1 8 16 3 48

Professionally qualified and experienced specialists and mid-management, Permanent

49 0 3 52 4 43 0 8 51 5 112




Skilled technical and academically qualified workers, junior management, supervisors, foremen, Permanent

53 0 4 57 2 46 2 8 56 11 126

Semi-skilled and discretionary decision making, Permanent

19 1 0 20 0 33 1 6 40 5 65

Contract (Top Management), Permanent

1 0 0 1 0 0 0 0 1 0 1

Contract (Senior Management), Permanent

0 0 0 0 0 0 0 0 0 0 0

Contract (Professionally qualified), Permanent

0 0 0 0 0 0 0 0 0 0 0

Contract (Skilled technical), Permanent

0 0 0 0 0 0 0 0 0 0 0

Contract (Semi-skilled), Permanent

0 0 0 0 0 0 0 0 0 0 0

Contract (Unskilled), Permanent

0 0 0 0 0 0 0 0 0 0 0

TOTAL 141 3 13 157 8 130 4 30 164 24 353

TABLE 6.3 - Recruitment


African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total



1 0 0 1 0 1 0 1 2 0 3


5 0 0 5 1 5 0 0 5 0 11





10 0 0 10 0 3 0 2 5 0 15


1 0 0 1 0 4 1 0 5 0 6


0 0 0 0 0 0 0 0 0 0 0

Contract (Senior Management), Permanent

0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0

TOTAL 17 0 0 17 1 13 1 3 17 0 35

Male,

African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total


TABLE 6.4 - Promotions


African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total



0 0 0 0 0 0 0 0 0 0 0





3 0 0 3 0 0 0 0 0 0 3


2 0 0 2 0 8 0 1 9 0 11


3 0 0 3 0 1 0 0 1 0 4


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0

TOTAL 8 0 0 8 0 9 0 1 10 0 18

Male,

African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total


TABLE 6.5 - Terminations


African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total



1 0 0 1 0 2 0 0 2 0 3

Professionally qualified and experienced specialists and

3 0 0 3 0 2 0 0 2 2 7




mid-management, Permanent


11 0 0 11 1 8 0 1 9 0 21


3 0 0 3 0 3 0 0 3 0 6


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0

TOTAL 18 0 0 18 1 16 0 1 17 2 38

Male,

African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total


TABLE 6.6 - Disciplinary Action

Disciplinary action Male,

African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total Not

Available

TOTAL 0 0 0 0 0 1 0 0 1 0 1 0




TABLE 6.7 - Skills Development

Occupational Categories Male,

African Male,


Male, Total

Blacks

Male, White

Female, African

Female, Coloured

Female, Indian

Female, Total

Blacks

Female, White

Total

Legislators, Senior Officials and Managers

17 2 5 24 2 7 1 7 15 3 44

Professionals 46 0 5 51 5 40 1 5 46 7 109

Technicians and Associate Professionals

39 0 3 42 1 33 1 7 41 2 86

Clerks 29 1 0 30 0 47 1 8 56 11 97

Service and Sales Workers 1 0 0 1 0 0 0 0 0 0 1

Skilled Agriculture and Fishery Workers

0 0 0 0 0 0 0 0 0 0 0

Craft and related Trades Workers 2 0 0 2 0 0 0 0 0 0 2

Plant and Machine Operators and Assemblers

5 0 0 5 0 0 0 0 0 0 5

Elementary Occupations 0 0 0 0 0 0 0 0 0 0 0

TOTAL 139 3 13 155 8 127 4 27 158 23 344



TABLE 7.1 - Performance Rewards by Race, Gender and Disability

Demographics Number of

Beneficiaries Total Employment

Percentage of Total

Employment Cost (R'000)

Average Cost per

Beneficiary (R)

African, Female 17 130 13.1 280 16 471

African, Male 20 141 14.2 429 21 450

Asian, Female 14 30 46.7 298 21 286

Asian, Male 3 13 23.1 157 52 333

Coloured, Female 0 4 0 0 0

Coloured, Male 1 3 33.3 39 39 000

Total Blacks, Female 31 164 18.9 578 18 645




Total Blacks, Male 24 157 15.3 625 26 042

White, Female 10 24 41.7 262 26 200

White, Male 3 8 37.5 108 36 000

Employees with a disability 1 5 20 9 9 000

TOTAL 68 353 19.3 1 581 23 250

TABLE 7.2 - Performance Rewards by Salary Band for Personnel below Senior Management Service

Salary Band Number of


Percentage of Total


Average Cost per

Beneficiary (R)

Skilled (Levels 3-5) 6 57 10.5 37 6 167

Highly skilled production (Levels 6-8) 16 74 21.6 195 12 188

Highly skilled supervision (Levels 9-12) 39 172 22.7 960 24 615

Contract (Levels 1-2) 0 7 0 0 0




Periodical Remuneration 0 42 0 0 0

TOTAL 61 445 13.7 1192 19541

TABLE 7.3 - Performance Rewards by Critical Occupation

Critical Occupations Number of


Percentage of Total


Average Cost per

Beneficiary (R)

Administrative related 6 39 15.4 163 27 167

Bus and heavy vehicle drivers 1 6 16.7 10 10 000

Client inform clerks(switchb recept inform

clerks) 0 2 0 0 0

Communication and information related 1 4 25 44 44 000

Finance and economics related 5 33 15.2 128 25 600

Financial and related professionals 23 44 52.3 442 19 217

Financial clerks and credit controllers 1 16 6.3 16 16 000




Head of department/chief executive

officer 0 1 0 0 0

Human resources & organisat developm

& relate prof 2 18 11.1 45 22 500

Human resources clerks 3 17 17.6 69 23 000

Human resources related 0 7 0 0 0

Information technology related 1 2 50 25 25 000

Library mail and related clerks 0 6 0 0 0

Material-recording and transport clerks 0 3 0 0 0

Messengers porters and deliverers 0 3 0 0 0

Other administrat & related clerks and

organisers 3 28 10.7 93 31 000

Other administrative policy and related

officers 2 41 4.9 44 22 000

Other information technology personnel. 4 6 66.7 59 14 750

Other occupations 0 0 0 0 0

Risk management and security services 0 0 0 0 0

Secretaries & other keyboard operating

clerks 9 27 33.3 54 6 000

Senior managers 7 50 14 389 55 571

TOTAL 68 353 19.3 1581 23250

TABLE 7.4 - Performance Related Rewards (Cash Bonus) by Salary Band for Senior Management Service

SMS Band Number of


Percentage of Total


Average Cost per

Beneficiary (R)

% of SMS

Wage Bill

Personnel

Cost SMS

(R'000)

Band A 5 36 13.9 245 49 000 0.6 37 715

Band B 1 12 8.3 42 42 000 0.3 13 617

Band C 1 1 100 102 102 000 1.6 6 548

Band D 0 1 0 0 0 0 0

TOTAL 7 50 14 389 55571.4 0.7 57880





TABLE 8.1 - Foreign Workers by Salary Band

Salary Band

Employment at

Beginning Period

Percentage of Total

Employment at End of

Period

Percentage of Total

Change in Employment

Percentage of Total

Total Employment

at Beginning of Period

Total Employment

at End of Period

Total Change in

Employment

Senior management (Levels 13-16) 1 50 1 100 0 0 2 1 -1

Contract (Levels 13-16) 1 50 0 0 -1 100 2 1 -1

TOTAL 2 100 1 100 -1 100 2 1 -1

TABLE 8.2 - Foreign Workers by Major Occupation

Major Occupation

Employment at

Beginning Period

Percentage of Total

Employment at End of

Period

Percentage of Total

Change in Employment

Percentage of Total

Total Employment

at Beginning of Period

Total Employment

at End of Period

Total Change in

Employment

Professionals and managers 2 100 1 100 -1 100 2 1 -1

TOTAL 2 100 1 100 -1 100 2 1 -1


TABLE 9.1 - Sick Leave for Jan 2014 to Dec 2014

Salary Band Total Days % Days with

Medical Certification

Number of Employees using Sick

Leave

% of Total Employees using Sick

Leave

Average Days per Employee

Estimated Cost (R'000)

Total number of Employees using Sick

Leave

Total number of days with

medical certification

Skilled (Levels 3-5) 223 69.5 35 10 6 133 350 155

Highly skilled production (Levels 6-8) 516 75.2 73 20.9 7 523 350 388

Highly skilled supervision (Levels 9-12) 962 74.5 135 38.6 7 1 913 350 717

Senior management (Levels 13-16) 152 69.1 31 8.9 5 521 350 105

Contract (Levels 1-2) 68 55.9 24 6.9 3 19 350 38

Contract (Levels 3-5) 129 55 37 10.6 3 79 350 71




Contract (Levels 6-8) 18 66.7 5 1.4 4 17 350 12

Contract (Levels 9-12) 36 72.2 6 1.7 6 65 350 26

Contract (Levels 13-16) 20 50 4 1.1 5 48 350 10

TOTAL 2124 71.7 350 100 6 3318 350 1522

TABLE 9.2 - Disability Leave (Temporary and Permanent) for Jan 2014 to Dec 2014

Salary Band Total Days % Days with

Medical Certification

Number of Employees

using Disability Leave

% of Total Employees

using Disability

Leave

Average Days per Employee

Estimated Cost (R'000)

Total number of days with medical

certification

Total number of Employees

using Disability Leave

Skilled (Levels 3-5) 60 100 5 35.7 12 40 60 14

Highly skilled production (Levels 6-8) 71 100 2 14.3 36 69 71 14

Highly skilled supervision (Levels 9-12) 169 100 6 42.9 28 344 169 14

Senior management (Levels 13-16) 19 100 1 7.1 19 60 19 14

TOTAL 319 100 14 100 23 513 319 14

TABLE 9.3 - Annual Leave for Jan 2014 to Dec 2014

Salary Band Total Days Taken Average days per

Employee

Number of Employees who took

leave

Skilled (Levels 3-5) 847 18 48

Highly skilled production (Levels 6-8) 1979 21 96

Highly skilled supervision (Levels 9-12) 3678.92 20 180

Senior management (Levels 13-16) 1080 23 48

Contract (Levels 1-2) 643 7 89

Contract (Levels 3-5) 967.84 10 94




TOTAL 9698.76 16 602




TABLE 9.4 - Capped Leave for Jan 2014 to Dec 2014

Salary Band

Total days of capped leave taken

Average number of days taken

per employee

Average capped

leave per employee as

at 31 December

2014

Number of Employees who took Capped

leave

Total number of

capped leave

available at 31

December 2014

Number of Employees

as at 31 December

2014

Skilled (Levels 3-5) 3 3 32 1 127 4

Highly skilled supervision (Levels 9-12) 2 2 60 1 1909 32

TOTAL 5 3 57 2 2036 36

TABLE 9.5 - Leave Payouts

Reason Total

Amount (R'000)

Number of Employees

Average Payment per

Employee (R)

Capped leave payouts on termination of service for 2014/15

1 153 22 52409

Current leave payout on termination of service for 2014/15

354 17 20824

TOTAL 1507 39 38641


TABLE 10.1 - Steps taken to reduce the risk of occupational exposure

Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any)

Key steps taken to

reduce the risk

n/a n/a




TABLE 10.2 - Details of Health Promotion and HIV/AIDS Programmes [tick Yes/No and provide required information]

Question Yes No Details, if yes

1. Has the department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position.

X

Mrs. Kogie Chetty: Senior Manager: HRM&D

2. Does the department have a dedicated unit or have you designated specific staff members to promote health and well being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose.

X

The Department has a dedicated EHWP Sub Directorate, that reports directly to the Senior Manager: HRM&D. The Unit comprises of two employees at a Deputy Manager (SL11) and Practitioner (SL07) level. The annual EHWP budget which also incorporates special projects relating to youth, PWD's and gender programmes is R350 000.00

3. Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of the programme.

X

Professional Counselling and external referral if necessary, bi- monthly onsite Chronic disease Management, Healthy lifestyle promotions, Stress management programmes, financial literacy, monitor implementation and management of SHERQ, analysis and management of Heath and productivity Programmes.

4. Has the department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent.

X

The Department uses one Consultative Forum that serves as the committee to monitor, discuss and evaluate all HR processes including the Employee Health and Wellness Program. The Committee is chaired by the Senior Manger: HRM, has a representative from every business Unit in the Department and also comprises of our social partners viz Provincial Organised labour representatives.




5. Has the department reviewed the employment policies and practices of your department to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed.

X

The Recruitment and Retention policies of the Department have been reviewed and are reviewed annually to ensure that no unfair discrimination is practiced against any employee during the processes of recruitment and retention which includes employees who are HIV positive. All HR policies are reviewed annually to ensure that elopements of discrimination are not present in policies.

6. Has the department introduced measures to protect HIV-positive employees or those perceived to be HIV-positive from discrimination? If so, list the key elements of these measures.

X

Establishment of an Employee Health Wellness unit, Awareness campaigns on issues of stigma, HIV prevention and management as well as issues relating to adherence, inclusion of a disciplinary clause on the HIV, AIDS & TB policy in case a discriminatory act is committed, all documents regarding employee's health, produced in terms of PILIR are kept in the wellness unit to ensure confidentiality. Availability of an onsite Wellness clinic as well as quarterly HCT campaigns are some of the ways of dealing with stigma as all employees are encouraged to use the clinic, not just the HIV positive employees as a means to provide treatment, care and support for all employees including those that are infected and affected by HIV&AIDS.

7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have achieved.

X

The number of employees that participated in HCT was 171.

8. Has the department developed measures/indicators to monitor & evaluate the impact of your health promotion programme? If so, list these measures/indicators.

X

Annual client satisfaction surveys, evaluation questionnaires at the end of workshops.


TABLE 11.1 - Collective Agreements

Subject Matter Date

n/a n/a




TABLE 11.2 - Misconduct and Discipline Hearings Finalised

Outcomes of disciplinary hearings Number Percentage of

Total Total

Final Written Warning 1 100 1

TOTAL 1 100 1

TABLE 11.3 - Types of Misconduct Addressed and Disciplinary Hearings

Type of misconduct Number Percentage of

Total Total

Abuse of leave of absence and failure to report absences timeously to Management

1 100 1

TOTAL 1 100 1


TABLE 12.1 - Training Needs identified

Occupational Categories Gender Employment Learnerships

Skills Programmes &

other short courses

Other forms of training

Total

Legislators, senior officials and managers Female 20 0 92 0 92

Male 30 0 115 0 115

Professionals Female 83 0 144 0 144

Male 89 0 227 0 227

Technicians and associate professionals Female 43 0 107 0 107

Male 31 0 89 0 89

Clerks Female 42 0 139 0 139




Male 14 0 72 0 72

Service and sales workers Female 0 0 0 0 0

Male 1 0 0 0 1

Skilled agriculture and fishery workers Female 0 0 0 0 0

Male 0 0 0 0 0

Craft and related trades workers Female 0 0 0 0 0

Male 0 0 2 0 2

Plant and machine operators and assemblers Female 0 0 0 0 0

Male 0 0 0 0 0

Elementary occupations Female 0 0 0 0 0

Male 0 0 0 0 0

Gender sub totals Female 188 0 482 0 482

Male 165 0 505 0 505

Total

353 0 987 0 987

TABLE 12.2 - Training Provided

Occupational Categories Gender Employment Learnerships

Skills Programmes &

other short courses

Other forms of training

Total

Legislators, senior officials and managers Female 20 0 38 0 38

Male 30 0 29 0 29

Professionals Female 83 0 183 0 183

Male 89 0 166 0 166

Technicians and associate professionals Female 43 0 32 0 32

Male 31 0 23 0 23




Clerks Female 42 0 62 0 62

Male 14 0 20 0 20

Service and sales workers Female 0 0 0 0 0

Male 1 0 0 0 0

Skilled agriculture and fishery workers Female 0 0 0 0 0

Male 0 0 0 0 0

Craft and related trades workers Female 0 0 0 0 0

Male 0 0 1 0 1

Plant and machine operators and assemblers Female 0 0 0 0 0

Male 0 0 0 0 0

Elementary occupations Female 0 0 0 0 0

Male 0 0 0 0 0

Gender sub totals Female 188 0 315 0 315

Male 165 0 239 0 239

Total

353 0 554 0 554


TABLE 13.1 - Injury on Duty

Nature of injury on duty Number % of total

Required basic medical attention only 7 100

Temporary Total Disablement 0 0

Permanent Disablement 0 0

Fatal 0 0

Total 7 100




TABLE 14.1 - Report on consultant appointments using appropriated funds

Project Title

Total number of consultants that worked on the

project

Duration: Work days Contract value in

Rand

Deployment with the department of ARTS and Culture 1 58 days R 480 000.00

infrastructure crack team mtubatuba electrification support 1 50 days R 480 000.00

Provincial government building utilization: ZULULAND DISTRICT MUNICIPALITY 1 63 days R 500 000.00

Crack team deployment to KZN wildlife 1 138 days R 900 000.00

Crack team deployment to KZN wildlife 1 113 days R1 100 000.00

Provincial government building utilization: ULUNDI 1 25 days R 300 000.00

Contract Management PHASE 2 roll out: department of health 1 720 days R 800 692.00


Resources to be deployed at dpt of Health to provide assistance and support 1 66 Days R 448 800.00

Contract Management PHASE 2 roll out: department of Social Development 1 720 days R 800 692.00

Data Captures for KZN Provincial Treasury 1 365 Days R 193 800.00

SCM Expects @ the department of agricultrure and rural development- contract management 1 81 Days R 498 963.99

Contract Management PHASE 2 roll out Department of Economic development and tourism 1 720 days R 800 692.00


SCM Expects @ the department of agricultrure and rural development- contract management 1 81 days R 498 963.99

Contract Management PHASE 2 roll out: department of Provincial Treasury 1 720 days R1 767 635.00

Data capturer for the supplier database (SCM) 1 240 days R 96 900.00

Resources to be deployed at dept of agriculture and rural development. 1 84Days R1 034 888.28

Contract Management PHASE 2 roll out: department of Community Safety & dept of Arts & Culture 1 720 days R 831 352.00


Contract Management PHASE 2 roll out, DEPT Social development department of Sport & Recreation and Economic development & Tourism

1 720 days R 800 692.00

Provincial SCM Unit facilitate Municipal Appeal for Province of KwaZulu Natal 1 240 days R3 420 000.00


PHASE 2: Contract Management Roll out 1 720 days R 831 352.00

Contract management phase 2 roll out department of health 1 720 days R 800 692.00

Development & Implementation of a Provincial Procurement system for all Provincial department in KZN

1 720 days R29 809 661.00




The appointment of four Data captures on contract for one year 1 240 days R 96 900.00

Secondment of SCM experts @ the department of Agriculture and rural development 1 80 days R 517 444.14

Resources to be deployed at dept. of Health to provide assistance and support 1 66 Days R 897 600.00

Secondment of SCM experts @ the department of Agriculture and rural development 1 80 days R 517 444.10

Forensic Investigation into the alleged irregular supply chain management practices @ Amajuba district municipality- FR68/2013

1 150 days R 871 628.04

Lack of capacity within the unit (IAU) forensic investigations 1 150 days R 889 950.12

Forensic investigation into the alleged irregular into the usage of funds and expenditure management @ Umgungundlovu academy of sports

1 135 days R 823 080.00

Forensic investigation :Mthonjaneni local Municipality 1 149 days R1 022 950.50

Lack of Capacity for forensic Investigation internal audit( Investigation into allegations prepaid electricity revenue related irregularities @ eDumbe local Municipality

1 146 days R 626 749.00

Lack of capacity forensic investigation internal audit 1 85 days R 995 237.00

Lack of Capacity for :provision of a comprehensive risk management and internal audit support to KZN Municipality

1 199 days R2 399 370.00

Professional forensic Investigating services: alleged irregularities pertaining to North SEA Jazz Festival: KwaZulu-Natal Economic development & Tourism

1 189 days R1 488 840.00

Professional forensic Investigating services: alleged irregular appointment pertaining to South African national Tutor Services: KZN department of education

1 144 days R 833 910.00

Department of Health :Security Tender FR 44/2013.Forensic Investigation 1 49 days R 302 715.00

Information and Communication Technology Strategy for greater Kokstad 1 9 days R 300 000.00

Assist with internal audit services @ uMuziwabantu Municipality 1 42 days R 321 898.00

Forensic Investigation @ the Kwazulu Natal department of Public Works 1 9 days R 586 194.00

Providing forensic services to Kwazulu natal provincial treasury in performing an investigation @ Ugu district municipality

1 30 days R 261 026.50

Forensic services KZN Natal Provincial Treasury: engagement terms and conditions: Public works 1 92 days R 187 365.50

Information Technology General controls Audits for the uMgungundlovu Harry Gwala & Kwadukuza Municipalities

1 92 days R 342 000.00

service level agreement for a forensic investigation into the appointment and payment made by the department of social development to clout media in respect of rental for advertisement on billboards FR /2014

1 34 days R 202 441.20

Service level agreement for a forensic investigation into the misappropriation of funds made to KZN athletics for the 2010 National youth run by the department of sports and recreation Durban central

1 9 days R 84 508.20




lack of capacity for forensic Investigation internal audit( MTUBATUBA HOUSING PROJECT 1 35 days R 221 802.00

Forensic investigation: alleged irregularities relating to service providers @ Ndwedwe local Municipality

1 238 days R 434 636.40

Moteko construction cost consultants and projects manager cc by KZN department of transport (FR38/2014)

1 107 days R 787 950.00

Forensic investigation: Alleged irregular expenditure @ uMkhanyakude district Municipality 1 295 days R2 406 274.95

Forensic Investigation : alleged irregularities @ Ezemvelo KZN 1 92 days R 680 409.00

Lack of capacity within the dpt: Review of business continuity, management practise/plans for fourteen institutions.

1 107 days R1 406 501.45

Lack of capacity within the unit (IAU) forensic investigations: forensic Investigation: alleged fraud corruption and theft @ uPhongolo local Municipality

1 37 days R 326 792.40

Forensic Investigation: Allegations of corruption between a member and a service provider and abuse of international @ KZN Natal Gaming and Betting board

1 33 days R 380 931.00

Forensic Investigation: Suspected corruption irregular expenditure, abuse of State property & SCM irregularities @ the KZN Natal Sharks Board

1 132 days R1 440 709.20

Lack of capacity for forensic investigation internal audit 1 125 days R 980 343.00

Investigation planning Memorandum into alleged irregularities within the Office of the premier 1 107 days R1 293 681.50

Forensic Investigation into alleged irregularities @ the Uthukela district municipality 1 127 days R 875 605.50

Lack of capacity for forensic investigation 1 82 days R 505 920.00

Follow up on criminal investigation 1 33 days R1 587 267.92

Lack of capacity for forensic investigation :Housing project within dept of Human Settlement 1 37 days R1 587 267.92

Automate the forensic investigation process using BPM platform 1 120 days R 998 818.00

Lack of capacity for forensic investigation Internal Audit 1 33 days R 245 784.00

Forensic investigation into tender irregularities within the department of economic development relating to Mageba projects cc

1 70 days R 856 340.00

Lack of capacity for forensic investigation within dept of transport 1 108 days R 856 340.00



To perform a review of business continuity management practices/plans for al the KZN provincial departments, 10 public entities and the royal household trust

1 60 days R2 106 760.00

Lack of capacity: Comprehensive Risk management and internal Audit support Municipalities 1 60 days R2 399 999.82

Development of the PGD's risk register, conducting risk management maturity GAP assessment in 8 provincial departments. Assist Provincial treasury. Aspect of risk maturity GAP

1 60 days R2 357 805.00




Lack of capacity forensic investigation internal audit 1 100 days R1 557 468.00

Municipal support- Review of value added Tax returns and processes initiative 1 20 days R 120 000.00

Municipal support Program cash flow Management Initiative Endumeni & Jozini Municiapalities 1 89 days R1 200 000.00

Municipal support Program vat review project Harry Gwala District Municipality 1 40 days R 400 000.00

Municipal support Program vat review project Endumeni Municipality 1 44 days R 400 000.00

Cash flow Management: Nongoma Municipality 1 20 days R 105 000.00

Cash flow Management: Uphongola Municipality 1 20 days R 105 000.00

Msp -secondment of resources to kzn provincial treasury 1 64 days R 192 614.40

Municipal support Program cash flow Management Initiative ,Mpofana,Richmond, Amajuba, Zululand, Mtubatuba, Mfolozi, Umvoti Municipality

1 20 days R4 200 000.00

cash flow Management: Umtshezi Municipality 1 20 days R 105 000.00

cash flow management: Uthukela Municipality 1 20 days R 105 000.00

cash flow management: Nquthu Municipality 1 20 days R 105 000.00

Internal control enhancement Uthukela municipality 1 20 days R 210 000.00

Internal control enhancement Newcastle municipality 1 20 days R 210 000.00

Internal control enhancement Umngeni municipality 1 20 days R 210 000.00

cash flow Management: Umngeni Municipality 1 20 days R 105 000.00

Municipal support Program vat review project Richmond Municipality 1 20 days R 400 000.00

Internal Control Review and Training Ulundi Municipality 1 20 days R 210 000.00

internal Control Review and Training Ezinqoleni Municipality 1 20 days R 210 000.00

internal Control Review and Training Endumeni Municipality 1 20 days R 210 000.00

Municipal support Program vat review project Uphongolo Municipality 1 60 days R 400 000.00

Municipal support cash flow management initiative -Umshwathi Municipality 1 60 days R 600 000.00

cash flow Management: Ulundi Municipality 1 20 days R 105 000.00

Municipal support Program vat review project Mpofana Municipality 1 40 days R 400 000.00

Municipal support Program vat review project UThungulu District Municipality 1 40 days R 400 000.00

MSP- VAT Review Initiative UMgungundlovu 1 8 days R 86 500.00

Municipal support program (MSP)-Secondment of resource to KZN provincial treasury Municipal Finance (MFU)

1 40 days R 132 422.40

Msp -secondment of resources to kzn provincial treasury 1 60 days R 385 228.80

Secondment of resources to KZN Provincial Treasury Municipal Finance unit (MFU) 1 60 days R 168 537.60

Secondment of resources to KZN Provincial Treasury Municipal Finance unit (MFU) 1 60 days R 355 680.00




Recruitment of resources from the financial management panel for the assistance with the department of health year end processes

1 58 days R 220 248.00

Review of annual financial statements in identified municipalities 2013/14 FY 1 20 days R 134 400.00

resource on Do Human Settlements KZN Housing Fund Operation Clean Audit 1 100 days R 410 400.00

Assignment letter for dept of Public Works immovable assets debt recovery project 2014/15 financial year.

1 140 days R3 358 080.00

Intergovernmental debt recovery project dept of Human Settlements 1 120 days R 492 480.00

Recruitment of resources to assist department of Health Movable assets register 1 150 days R1 573 200.00

Recruitment of resources from the financial management panel for the assistance with the department of health year end processes + variations additional hours

1 58 days R 738 668.00

Assignment letter for the KZN Treasury department: Financial Reporting project : Reconciliation of accommodation and travel expenses

1 40 days R 298 000.00

Secondment of resources to assist in municipal financial management support 1 100 days R 501 600.00

Assignment letter for department of public works immovable assets and debt 1 120 days R 492 480.00

Department of human settlements: intergovernmental debt recovery project 1 120 days R 492 480.00


Recruitment of resources for assist department of Health Movable asset Register. 1 150 days R 957 600.00


1 57 days R1 498 148.00

Technical support to provincial depts and Public entities in AFS preparation 2013/14 Financial year 1 31 days R 325 000.00


Assignment letter for preparation of annual financial statements & asset register support: UGU district municipality: 2013/14 FY

1 110 days R1 655 280.00

Review of annual financial statements in identified municipalities 2013/14 FY 1 20 days R 691 200.00

Assignment letter for preparation of annual financial statements: Abaqulusi Municipality 2013/14 FY 1 100 days R 742 000.00

Assignment letter for department of public works immovable assets and debt recovery project 2014/15/fy

1 60 days R 790 590.00

Kzn irregular expenditure project for2014/15 financial year 1 104 days R2 445 300.00

Recruitment of resources to assist department of Health Movable assets register 1 83 days R1 012 320.00

Secondment of resources to assist in municipal financial management support @ Ugu didtrict municipality

1 200 days R1 704 000.00

Intergovernmental debt recovery project dept. of Human Settlements 1 120 days R 547 200.00

Recruitment of resources from the financial management panel for the assistance with the 1 58 days R 230 000.00




department of health year end processes

Assignment letter for preparation of annual financial statements Abaqulusi municipality: 2013/14 FY 1 100 days R 961 704.00


1 58 days R 367 080.00

Assignment letter for the irregular expenditure project on behalf of kzn treasury 2014/2015 FY 1 103 days R1 909 600.00

Assistance with the department of health movable asset register 2014/15/ financial year 1 80 days R1 710 000.00

Secondment of resources to assist in municipal financial management support @ Umngeni municipality and Mpofana Municipality

1 200 days R1 704 000.00


1 120 days R 492 480.00

Secondment of resources to assist in municipal financial management support 1 100 days R1 504 800.00

Municipal Finance Improvement Programme (MFIP)Support plan outputs and outstanding matters-28 February 2014

1 240 days R1 920 000.00

secondment of resources to assist in municipal management support: Financial Reporting 1 113 days R 923 400.00

Technical support to provincial depts. and Public entities in AFS preparation 2013/14 Financial year 1 25 days R 240 000.00

Technical support to provincial depts. and Public entities in AFS preparation 2013/14 Financial year 1 25 days R 240 000.00

Assignment letter for preparations of AFS and asset register support: UGU dis 2013/14 FY 1 120 days R 711 360.00


1 25 days R 93 000.00


1 25 days R 93 000.00

Department of human settlements: intergovernmental debt recovery project 1 120 days R 595 200.00

Assistance with the department of health movable asset register 2014/15/ financial year 1 150 days R1 231 200.00

Assignment letter for the preparation of the annual financial statements & asset register support: UGU district municipality 2013/14 FY

1 120 days R1 094 400.00

Secondment of resources to assist in municipal financial management support 1 143 days R 984 960.00

Assignment letter for municipal technical assistance in preparation of asset registers 1 42 days R1 210 000.00

Assignment letter for municipal technical assistance in preparation of asset registers for various municipalities in the province

1 40 days R 387 200.00

Assignment letter for municipal technical assistance in preparation of asset registers 1 41 days R1 984 400.00

review of annual financial statements in identified municipalities 2013/14 FY 1 20 days R 230 400.00

municipal Finance panel to appoint resources :vat review and advisory support :Ugu district municipality

1 19 days R 319 500.00




Appointment of external service providers secondment of data analytics resources 1 240 days R1 860 480.00

Secondment of resources to conduct audit @ Social Cluster dept. of Sport & recreation human resources mngt and facilities

1 20 days R 510 720.00

Secondment of resources to conduct audit @ Social Cluster dept. of Agriculture JUNCAO Mushroom project

1 20 days R 510 720.00

Secondment of resources to conduct audits @ social cluster dept. of Arts and culture archives services records management

1 20 days R 401 280.00

Audit of performance information at the department of Social development 1 20 days R 200 640.00

Secondment of resources for the s&tperformance audit at 10 dept. 1 23 days R 270 864.00

Kwazulu-Natal provincial treasury: letter of engagement for the information technology (IT) audit of the general controls surrounding the financial and performance management information systems @ Richards bay industrial development zone

1 60 days R 172 881.00

Audit on review of interim financial statement for KZN Dept. of economic development &tourism: VAT &Disbursement included

1 10 days R 72 960.00

Secondment of resources for the S&T performance audit (PHASE 11) 1 15 days R 135 432.00

Secondment of resources to conduct audits @ social cluster dept. of COGTA fleet management 1 23 days R 150 480.00

Audit of servicers to persons with disabilities at dept. of social development 1 20 days R 401 280.00

Audit of national school nutrition programme dept. of education 1 80 days R 620 160.00

Audit on performance information dept. of sports & recreation 1 20 days R 401 280.00

Review of interim financial statement for Royal Household. 1 10 days R 72 960.00

Audit on SCM at department of Agriculture and rural development. 1 30 days R 300 960.00

Audit on SCM at department of Community Safety and Liaison 1 23 days R 173 052.00

Audit on follow up occupational Health and Safety at department of Human Settlements 1 20 days R 160 512.00

Audit on follow up Asset Management at department of Human Settlements 1 20 days R 160 512.00

Audit on follow up Disaster Management at department of Human Settlements 1 20 days R 160 512.00

Secondment of resources to the Kwazulu-Natal provincial treasury: Revenue management audit 1 15 days R 45 144.00

Audit on Human Resources Management for KZN Treasury 1 50 days R 136 800.00

Secondment of resources to conduct performance information liquor Authority 1 30 days R 300 960.00

Secondment of resources for the audit of Supply Chain Management: Liquor Authority 1 40 days R 401 280.00

IT Audit of the general controls surrounding financial and performance management department of Economic development and tourism, and COGTA

1 67 days R 394 896.00

Perfomance Audit on Zibambele & Vukuzakhe Programmes 1 85 days R 2 564 476.00

Engagement letter and service level agreement for the secondment of resources to the KZN 1 53 days R 326 960.00




Provincial Treasury for the subsistence and travel performance audit @ provincial departments

Secondment of resources to the Kwazulu-Natal provincial treasury for the subsistence and travel performance audit at 10 provincial departments

1 45 days R 135 432.00

Secondment of resources for S & T performance audit @ 15 department 1 15 days R 782 536.50

Corporate Governance of information and communication for Dept of public works 1 60 days R 658 920.00

Secondment of resources to KZN Provincial Treasury to assist KZN Provincial Treasury Internal Audit in observing the BID Process for LTSM Procurement within KZN Department of Education

1 60 days R 552 672.00

Internal audit review of property management @ dept of Human settlements 1 40 days R 766 080.00

To assist the KZN Internal audit unit for the purposes reviewing IT Contract for the KZN DEPART of Education & the KZN office of the Premier

1 20 days R 620 160.00

Letter of engagement internal audit review of the human resources management @ kzn liquor authority

1 40 days R 300 960.00

Internal audit review of Compliance with occupation health and safety act @ KZN Liquor Authority 1 40 days R 401 280.00

Internal audit review of project management @ department of Human settlements 1 60 days R 752 400.00

Perform an assessment of IT Systems @ the department of education 1 25 days R 307 800.00

Information Technology General controls review dept of Arts&culture and Sport and Recreation. 1 11 days R 391 065.60

Review of it contracts kzn dept of health, education &premier 1 30 days R 246 240.00

Audit on the financial management 1 30 days R 560 880.00

Develop headcount capturing tool and capture headcount verification sheets 1 30 days R1 342 008.00

Appointment of service provider: Secondment of resources : Senior audit manager-Social Cluster 1 30 days R 912 000.00

Provision of internal audit services to kzn dept. of health 1 35 days R 3 812 160.00

Review of Interim Financial Statements for KZN department of Transport 1 20 days R 183 312.00

Review of Interim Financial statements for KZN department of Social development 1 15 days R 183 312.00

Review of Interim Financial statements for KZN department of Health 1 15 days R 183 312.00

Review of Interim Financial statements for KZN department of Trade and Investments 1 15 days R -

Review of Interim Financial statements for KZN department of KZN Sharks Board 1 15 days R 131 328.00

Review of Interim Financial Statements for KZN Mjindi farming 1 10 days R 88 008.00

Review of Interim Financial Statements for department of KZN Provincial Treasury 1 10 days R 89 376.00

Review of Interim Financial Statements for department of KZN Education 1 15 days R 183 312.00

Review of Interim Financial Statements for department of KZN Arts and Culture 1 10 days R 88 008.00

Review of Interim Financial Statements for department of KZN Tourism Authority 1 15 days R -

Audit on Health technology services @ the department of health 1 50 days R 638 400.00

Review of Interim Financial Statements for department of KZN Sport and Recreation 1 10 days R 88 008.00




Review of Interim Financial Statements for KZN Department of Agriculture 1 15 days R 183 312.00

Review of Interim Financial Statements for KZN Film Commission 1 15 days R 131 328.00

Review of Interim Financial Statements for KZN Liquor Authority 1 10 days R 88 008.00

Audit on performance information at dept. of human settlement 1 10 days R 383 040.00

Audit on transfer payments at dept. of human settlement 1 10 days R 465 120.00

Audit on review of interim financial statement dept. of Human Settlement 1 10 days R 72 960.00

Audit on review of interim financial statement dept. of cogta 1 10 days R 72 960.00

Audit on review of interim financial statement dept. of community safety 1 10 days R 72 960.00

Audit on review of interim financial statement dept. of Public Works 1 10 days R 72 960.00

Audit on review of interim financial statement dept. of Public Works 1 10 days R 72 960.00

Audit on Performance Information for Amafa akwaZulu Natal 1 20 days R 91 200.00

Audit on Review of interim financial statement Office of the Premier 1 10 days R 72 960.00

Audit on Review of interim financial statement KZN TOURISM AUTHORITY 1 10 days R 262 656.00

Audit on Review of Conditional Grant at Department of Health 1 30 days R 383 040.00

Audit of transfer payment at Department of Health 1 30 days R 383 040.00

Secondment of resources for the performance of an audit on project Management @ the dept of economic development and tourism

1 30 days R 352 944.00

Secondment of resources to perform Information technology (IT) project assurance and post implementation reviews:KZN Liquor Authority, KZN dept of Public works

1 30 days R 310 080.00


1 30 days R 387 600.00

secondment of resources for the performance of audits on SCM 1 15 days R 190 155.00

Secondment of resources for the performance of audits on Contract Management @ the dept of Economic development and Tourism

1 25 days R 41 040.00

Appointment of external service providers to conduct application controls review for KZN Tourism 1 30 days R 232 560.00

To assist a resource to assist with a post implementation review of the provincial Nerve centre System

1 25 days R 193 800.00

Conduct IT Project management review department of transport 1 30 days R 232 560.00

Secondment of resources to perform Information technology (IT) contract and performance management reviews

1 25 days R 310 080.00

Performance information audit @ Mjindi Farming 1 10 days R 73 043.00

Engagement letter for the IT audit of Tourism KZN 1 20 days R 134 235.00

Post -Implementation Review of Intenda system for Dept of Health (Piloted at Greys Hospital) 1 15 days R 339 720.00




Audit on performance information at dept of arts &culture 1 15 days R 383 040.00

audit on assets and infrastructure management at MJINDI 1 28 days R 346 930.00

Audit on revenue and debtors management at MJINDI Farming (pty)LTD 1 25 days R 316 834.00

Audit on Supply Labour Relations at department of Transport. 1 15 days R 109 440.00

Audit on Supply Chain Management inclusive of follow up at Department of Transport 1 15 days R 164 160.00

Audit on Transfer payments KZN Department of Economic Development, Tourism and Environmental Affairs

1 25 days R 168 720.00

Audit on Performance Information at KZN Sharks Board 1 15 days R 46 740.00

Secondment of resources for an audit on performance information @ KZN Tourism Authority 1 15 days R 41 040.00

Secondment of resources for the performance of an audit on performance information at community safety and liaison

1 23 days R 143 640.00

Audit on Supply Chain management at KZN Sharks board 1 20 days R 137 940.00

Appointment of staff on secondment- Post implementation review of nerve centre system @ the office of the Premier

1 23 days R 193 800.00

Appointment of external service providers to conduct application controls review for Mjindi farming 1 30 days R 232 560.00

Audit on supply chain management at dept of human settlement 1 15 days R 383 040.00

Audit on transfer payment department of sports &recreation 1 50 days R 501 600.00

Appointment of Ubunye consortium to conduct audit on transfer payment @ department of Agriculture

1 23 days R 287 736.00

Appointment of Ubunye consortium to conduct audit on governance and administration cluster performance information -AMAFA kwazulu-natal

1 15 days R 36 000.00

Appointment of Ubunye consortium to conduct audit on governance and administration cluster- fleet management AMA Kwazulu natal

1 20 days R 116 000.00

Audit on supply chain management at dept of arts &culture 1 20 days R 510 720.00

Audit on asset management at liquor authority 1 20 days R 401 280.00

Audit on Performance Information for KZN Department of Economic Development ,Tourism and Environmental Affairs

1 20 days R 54 720.00

I T Strategy review at department of social development 1 40 days R 310 080.00

To conduct youth programme audit at Office of the Premier, Social Development and Sports and Recreation

1 40 days R2 656 000.00

Appointment of service provider: Audits @ Social, Economic and G&A clusters 1 80 days R2 407 680.00

Audit of Transfer payment at Department of Arts and Culture. 1 40 days R 401 280.00

Audit on Follow up special schools inclusive education at department of Education 1 20 days R 109 440.00




Audit on Follow up Transfer payments at department of Education 1 20 days R 255 360.00

Audit on Follow up early childhood development at department of Education 1 20 days R 109 440.00

Secondment of resources to KZN Provincial Treasury Internal Audit unit(Audit of performance information at the department of economic development and environmental affairs)

1 25 days R 184 680.00

Secondment of resources to KZN Provincial Treasury Internal Audit unit(Audit of performance information at the department of Transport)

1 15 days R 123 120.00

Audit on Performance Information for COGTA 1 23 days R 157 320.00

To assist the PPP UNIT conduct an independent structural assessment for Inkosi Albert Luthuli Hospital

1 20 days R 160 000.00

KZN Winter Air tour 1 720 days R2 000 000.00

KZN regional technology hubs project 1 720 days R13 860 000.00

R 205 488 239.92

TABLE 14.2 - Analysis of consultants appointments using appropriated funds i.t.o HDIs

Project Title Percentage

ownership by HDI groups

Percentage management by HDI groups

No. Of consultants from HDI groups that

work on project

Deployment with the department of ARTS and Culture 15.64 15.64 1

infrastructure crack team Mtubatuba electrification support 15.64 15.64 1

Provincial government building utilization: ZULULAND DISTRICT MUNICIPALITY 15.64 15.64 1

Crack team deployment to KZN wildlife 66.5 66.5 1

Crack team deployment to KZN wildlife 33.14 33.14 1

Provincial government building utilization: ULUNDI 27.5 27.5 1

Contract Management PHASE 2 roll out: department of health 28.93 28.93 1

Contract Management PHASE 2 roll out: department of health 100 100 1

Resources to be deployed at dpt of Health to provide assistance and support 100 100 1

Contract Management PHASE 2 roll out: department of Social Development 76.5 76.5 1

Data Captures for KZN Provincial Treasury 76.5 76.5 1

SCM Expects @ the department of agriculture and rural development- contract management 76.5 76.5 1




Contract Management PHASE 2 roll out Department of Economic development and tourism 100 100 1

Contract Management PHASE 2 roll out: department of health 100 100 1

SCM Expects @ the department of agriculture and rural development- contract management 100 100 1

Contract Management PHASE 2 roll out: department of Provincial Treasury 100 100 1

Data capture for the supplier database (SCM) 100 100 1

Resources to be deployed at dept of agriculture and rural development. 100 100 1

Contract Management PHASE 2 roll out: department of Community Safety & dept of Arts & Culture 100 100 1


Contract Management PHASE 2 roll out, DEPT Social development department of Sport & Recreation and Economic development & Tourism

100 100 1

Provincial SCM Unit facilitate Municipal Appeal for Province of KwaZulu Natal 100 100 1


PHASE 2: Contract Management Roll out 100 100 1

Contract management phase 2 roll out department of health 32.6 32.6 1

Development & Implementation of a Provincial Procurement system for all Provincial department in KZN

31.67 31.67 1

The appointment of four Data captures on contract for one year 100 100 1

Secondment of SCM experts @ the department of Agriculture and rural development 100 100 1

Resources to be deployed at dept. of Health to provide assistance and support 100 100 1

Secondment of SCM experts @ the department of Agriculture and rural development 57.5 57.5 1

Forensic Investigation into the allegedirregular supply chain management practices @ amajuba district municipality- FR68/2013

100 100 1

Lack of capacity within the unit (IAU) forensic investigations 100 100 1

Forensic investigation into the alleged irregular into the usage of funds and expenditure management @ Umgungundlovu academy of sports

100 100 1

Forensic investigation :Mthonjaneni local Municipality 32.6 32.6 1

Lack of Capacity for forensic Investigation internal audit( Investigation into allegations prepaid electricity revenue related irregularities @ eDumbe local Municipality

32.6 32.6 1

Lack of capacity forensic investigation internal audit 32.6 32.6 1

Lack of Capacity for :provision of a comprehensive risk management and internal audit support to KZN Municipality

32.6 32.6 1

Professional forensic Investigating services: alleged irregularities pertaining to North SEA Jazz Festival: Kwazulu-Natal Economic development & Tourism

57.5 57.5 1




Professional forensic Investigating services: alleged irregular appointment pertaining to South African national Tutor Services: KZN department of education

57.5 57.5 1

Department of Health :Security Tender FR 44/2013.Forensic Investigation 57.5 57.5 1

Information and Communication Technology Strategy for greater kokstad 76.2 76.2 1

Assist with internal audit services @ uMuziwabantu Municipality 76.2 76.2 1

Forensic Investigation @ the Kwazulu Natal department of Public Works 76.2 76.2 1

Providing forensic services to Kwazulu natal provincial treasury in performing an investigation @ Ugu district municipality

76.2 76.2 1

Forensic services KZN Natal Provincial Treasury: engagement terms and conditions: Public works 76.2 76.2 1

Information Technology General controls Audits for the UMgungundlovu Harry Gwala & Kwadukuza Municipalities

28.93 28.93 1

service level agreement for a forensic investigation into the appointment and payment made by the department of social development to clout media in respect of rental for advertisement on billboards FR /2014

28.93 28.93 1

Service level agreement for a forensic investigation into the misappropriation of funds made to KZN athletics for the 2010 National youth run by the department of sports and recreation Durban central

28.93 28.93 1

lack of capacity for forensic Investigation internal audit( MTUBATUBA HOUSING PROJECT 28.93 28.93 1

Forensic investigation: alleged irregularities relating to service providers @ Ndwedwe local Municipality

76.5 76.5 1

Moteko construction cost consultants and projects manager cc by KZN department of transport (FR38/2014)

76.5 76.5 1

Forensic investigation: Alleged irregular expenditure @ uMkhanyakude district Municipality 76.5 76.5 1

Forensic Investigation : alleged irregularities @ Ezemvelo KZN 76.5 76.5 1

Lack of capacity within the dpt :Review of business continuity,management practise/plans for fourteen institutions.

76.5 76.5 1

Lack of capacity within the unit (IAU) forensic investigations: forensic Investigation:alleged fraud corruption and theft @ uPhongolo local Municipality

98 98 1

Forensic Investigation: Allegations of corruption between a member and a service provider and abuse of international @ KZN Natal Gaming and Betting board

98 98 1

Forensic Investigation: Suspected corruption irregular expenditure, abuse of State property & SCM irregularities @ the KZN Natal Sharks Board

98 98 1

LACK OF CAPACITY FOR FORENSIC INVESTIGATION INTERNAL AUDIT 98 98 1

Investigation planning Memorandum into alleged irregularities within the Office of the premier 100 100 1




Forensic Investigation into alleged irregularities @ the Uthukela district municipality 100 100 1

Lack of capacity for forensic investigation 100 100 1

Follow up on criminal investigation 98 98 1

Lack of capacity for forensic investigation :Housing project within dept of Human Settlement 98 98 1

Automate the forensic investigation process using BPM platform

1

Lack of capacity for forensic investigation Internal Audit 100 100 1

Forensic investigation into tender irregularities within the department of economic development relating to Mageba projects cc

100 100 1

Lack of capacity for forensic investigation within dept of transport 100 100 1



To perform a review of business continuity management practices/plans for allthe KZN provincial departments, 10 public entities and the royal household trust

100 100 1

Lack of capacity: Comprehensive Risk management and internal Audit support Municipalities 100 100 1

Development of the PGD's risk register, conducting risk management maturity GAP assessment in 8 provincial departments. Assist Provincial treasury. Aspect of risk maturity GAP

100 100 1

Lack of capacity forensic investigation internal audit 25.1 25.1 1

Municipal support- Review of value added Tax returns and processes initiative 76.2 76.2 1

Municipal support Program cash flow Management Initiative Endumeni & Jozini Municiapalities 76.2 76.2 1

Municipal support Program vat review project Harry Gwala District Municipality 76.2 76.2 1

Municipal support Program vat review project Endumeni Municipality 76.2 76.2 1

Cash flow Management: Nongoma Municipality 76.2 76.2 1

Cash flow Management: Uphongola Municipality 76.2 76.2 1

MSP -SECONDMENT OF RESOURCES TO KZN PROVINCIAL TREASURY 76.2 76.2 1

Municipal support Program cash flow Management Initiative ,Mpofana,Richmond, Amajuba, Zululand, Mtubatuba, Mfolozi, Umvoti Municipality

32.6 32.6 1

cash flow Management: Umtshezi Municipality 32.6 32.6 1

cash flow management: UThukela Municipality 32.6 32.6 1

cash flow management:Nquthu Municipality 32.6 32.6 1

Internal control enhancement Uthukela municipality 32.6 32.6 1

Internal control enhancement Newcastle municipality 32.6 32.6 1

Internal control enhancement Umngeni municipality 32.6 32.6 1

cash flow Management: Umngeni Municipality 32.6 32.6 1




Municipal support Program vat review project Richmond Municipality 28.93 28.93 1

Internal Control Review and Training Ulundi Municipality 28.93 28.93 1

internal Control Review and Training Ezinqoleni Municipality 28.93 28.93 1

internal Control Review and Training Endumeni Municipality 28.93 28.93 1

Municipal support Program vat review project Uphongolo Municipality 28.93 28.93 1

Municipal support cash flow management initiative -Umshwathi Municipality 100 100 1

cash flow Management: Ulundi Municipality 100 100 1

Municipal support Program vat review project Mpofana Municipality 76.5 76.5 1

Municipal support Program vat review project Uthungulu District Municipality 76.5 76.5 1

MSP- VAT Review Initiative Umgungundlovu 76.5 76.5 1

Municipal support program (MSP)-Secondment of resource to KZN provincial treasury Municipal Finance (MFU)

100 100 1

Msp -secondment of resources to kzn provincial treasury 100 100 1

Secondment of resources to KZN Provincial Treasury Municipal Finance unit (MFU) 100 100 1

Secondment of resources to KZN Provincial Treasury Municipal Finance unit (MFU) 100 100 1


100 100 1

Review of annual financial statements in identified municipalities 2013/14 FY 100 100 1

resource on Do Human Settlements KZN Housing Fund Operation Clean Audit 100 100 1

Assignment letter for dept of Public Works immovable assets debt recovery project 2014/15 financial year.

100 100 1

Intergovernmental debt recovery project dept of Human Settlements 100 100 1

Recruitment of resources to assist department of Health Movable assets register 100 100 1

Recruitment of resources from the financial management panel for the assistance with the department of health year end processes + variations additional hours

100 100 1


100 100 1

Secondment of resources to assist in municipal financial management support 100 100 1

Assignment letter for department of public works immovable assets and debt 100 100 1

Department of human settlements: intergovernmental debt recovery project 100 100 1


Recruitment of resources for assist department of Health Movable asset Register. 100 100 1

Recruitment of resources from the financial management panel for the assistance with the 100 100 1




department of health year end processes

Technical support to provincial depts and Public entities in AFS preparation 2013/14 Financial year 100 100 1


Assignment letter for preparation of annual financial statements & asset register support: UGU district municipality: 2013/14 FY

100 100 1

Review of annual financial statements in identified municipalities 2013/14 FY 100 100 1

Assignment letter for preparation of annual financial statements: Abaqulusi Municipality 2013/14 FY 100 100 1


100 100 1

KZN IRREGULAR EXPENDITURE PROJECT FOR2014/15 FINANCIAL YEAR 100 100 1

Recruitment of resources to assist department of Health Movable assets register 100 100 1

Secondment of resources to assist in municipal financial management support @ Ugu didtrict municipality

100 100 1

Intergovernmental debt recovery project dept of Human Settlements 100 100 1


28.93 28.93 1

Assignment letter for preparation of annual financial statements Abaqulusi municipality: 2013/14 FY 28.93 28.93 1


100 100 1

Assignment letter for the irregular expenditure project on behalf of kzn treasury 2014/2015 FY 100 100 1

Assistance with the department of health movable asset register 2014/15/ financial year 100 100 1

Secondment of resources to assist in municipal financial management support @ Umngeni municipality and Mpofana Municipality

100 100 1


100 100 1

Secondment of resources to assist in municipal financial management support 100 100 1

Municipal Finance Improvement Programme (MFIP)Support plan outputs and outstanding matters-28 February 2014

100 100 1

secondment of resources to assist in municipal management support: Financial Reporting 98 98 1



Assignment letter for preparation of AFS and asset register support: UGU dis 2013/14 FY 100 100 1

Assignment letter for the KZN Treasury department: Financial Reporting project : Reconciliation of 32.6 32.6 1




accommodation and travel expenses


76.5 76.5 1

Department of human settlements: intergovernmental debt recovery project 76.5 76.5 1

Assistance with the department of health movable asset register 2014/15/ financial year 76.5 76.5 1

Assignment letter for the preparation of the annual financial statements & asset register support: UGU district municipality 2013/14 FY

76.5 76.5 1

Secondment of resources to assist in municipal financial management support 76.5 76.5 1

Assignment letter for municipal technical assistance in preparation of asset registers 0 0 1

Assignment letter for municipal technical assistance in preparation of asset registers for various municipalities in the province

0 0 1

Assignment letter for municipal technical assistance in preparation of asset registers 32.5 32.5 1

review of annual financial statements in identified municipalities 2013/14 FY 100 100 1

municipal Finance panel to appoint resources :vat review and advisory support :ugu district municipality

76.2 76.2 1

Appointment of external service providers secondment of data analytics resources 76.5 76.5 1

Secondment of resources to conduct audit @ Social Cluster dept of Sport & recreation human resources mngt and facilities

76.5 76.5 1

Secondment of resources to conduct audit @ Social Cluster dept of Agriculture JUNCAO Mushroom project

76.5 76.5 1

Secondment of resources to conduct audits @ social cluster dept of Arts and culture archives services records management

76.5 76.5 1

Audit of performance information at the department of Social development 76.5 76.5 1

SECONMENT OF RESOURCERS FOR THE S&TPERFOMANCE AUDIT AT 10 DEPT 76.5 76.5 1

Kwazulu-Natal provincial treasury: letter of engagement for the information technology (IT) audit of the general controls surrounding the financial and performance management information systems @ Richards bay industrial development zone

76.5 76.5 1

Audit on review of interim financial statement for KZN Dept of economic development &tourism: VAT&Disbursement included

76.5 76.5 1

Secondment of resources for the S&T performance audit (PHASE 11) 76.5 76.5 1

Secondment of resources to conduct audits @ social cluster dept of COGTA fleet management 76.5 76.5 1

Audit of servicers to persons with disabilities at dept of social development 76.5 76.5 1

Audit of national school nutrition programme dept of education 76.5 76.5 1




Audit on performance information dept of sports &recreation 76.5 76.5 1

Review of interim financial statement for Royal Household. 76.5 76.5 1

Audit on SCM at department of Agriculture and rural development. 76.5 76.5 1

Audit on SCM at department of Community Safety and Liaison 76.5 76.5 1

Audit on follow up occupational Health and Safety at department of Human Settlements 76.5 76.5 1

Audit on follow up Asset Management at department of Human Settlements 76.5 76.5 1

Audit on follow up Disaster Management at department of Human Settlements 76.5 76.5 1

Secondment of resources to the Kwazulu-Natal provincial treasury: Revenue management audit 76.5 76.5 1

Audit on Human Resources Management for KZN Treasury 76.5 76.5 1

Secondment of resources to conduct performance information liquor Authority 32.6 32.6 1

Secondment of resources for the audit of Supply Chain Management: Liquor Authority 32.6 32.6 1

IT Audit of the general controls surrounding financial and performance management department of Economic development and tourism, and COGTA

32.6 32.6 1

Performance Audit on Zibambele & Vukuzakhe Programmes 68 68 1

Engagement letter and service level agreement for the secondment of resources to the KZN Provincial Treasury for the subsistence and travel performance audit @ provincial departments

68 68 1

Secondment of resources to the Kwazulu-Natal provincial treasury for the subsistence and travel performance audit at 10 provincial departments

68 68 1

Secondment of resources for S & T performance audit @ 15 department 68 68 1

Corporate Governance of information and communication for Dept of public works 28.93 28.93 1

Secondment of resources to KZN Provincial Treasury to assist KZN Provincial Treasury Internal Audit in observing the BID Process for LTSM Procurement within KZN Department of Education

28.93 28.93 1

Internal audit review of property management @ dept of Human settlements 28.93 28.93 1

To assist the KZN Internal audit unit for the purposes reviewing IT Contract for the KZN DEPART of Education & the KZN office of the Premier

28.93 28.93 1

Letter of engagement internal audit review of the human resources management @ kzn liquor authority

28.93 28.93 1

Internal audit review of Compliance with occupation health and safety act @ KZN Liquor Authority 28.93 28.93 1

Internal audit review of project management @ department of Human settlements 28.93 28.93 1

Perform an assessment of IT Systems @ the department of education 28.93 28.93 1

Information Technology General controls review dept of Arts&culture and Sport and Recreation. 28.93 28.93 1

Review of IT CONTRACTS KZN DEPT OF HEALTH, Education&Premier 28.93 28.93 1

AUDIT ON THE financial Management 28.93 28.93 1




Develop headcount capturing tool and capture headcount verification sheets 28.93 28.93 1

Appointment of service provider: Secondment of resources : Senior audit manager-Social Cluster 100 100 1

Provision of internal audit services to kzn dept of health 57.5 57.5 1

Review of Interim Financial Statements for KZN department of Transport 57.5 57.5 1

Review of Interim Financial statements for KZN department of Social development 57.5 57.5 1

Review of Interim Financial statements for KZN department of Health 57.5 57.5 1

Review of Interim Financial statements for KZN department of Trade and Investments 57.5 57.5 1

Review of Interim Financial statements for KZN department of KZN Sharks Board 57.5 57.5 1

Review of Interim Financial Statements for KZN Mjindi farming 57.5 57.5 1

Review of Interim Financial Statements for department of KZN Provincial Treasury 57.5 57.5 1

Review of Interim Financial Statements for department of KZN Education 57.5 57.5 1

Review of Interim Financial Statements for department of KZN Arts and Culture 57.5 57.5 1

Review of Interim Financial Statements for department of KZN Tourism Authority 57.5 57.5 1

Audit on Health technology services @ the department of health 57.5 57.5 1

Review of Interim Financial Statements for department of KZN Sport and Recreation 57.5 57.5 1

Review of Interim Financial Statements for KZN Department of Agriculture 57.5 57.5 1

Review of Interim Financial Statements for KZN Film Commission 57.5 57.5 1

Review of Interim Financial Statements for KZN Liquor Authority 57.5 57.5 1

Audit on performance information at dept of human settlement 57.5 57.5 1

Audit on transfer payments at dept of human settlement 57.5 57.5 1

Audit on review of interim financial statement dept of Human Settlement 57.5 57.5 1

Audit on review of interim financial statement dept of cogta 57.5 57.5 1

Audit on review of interim financial statement dept of community safety 57.5 57.5 1

Audit on review of interim financial statement dept of Public Works 57.5 57.5 1

Audit on review of interim financial statement dept of Public Works 57.5 57.5 1

Audit on Performance Information for Amafa akwaZulu Natal 57.5 57.5 1

Audit on Review of interim financial statement Office of the Premier 57.5 57.5 1

Audit on Review of interim financial statement KZN TOURISM AUTHORITY 57.5 57.5 1

Audit on Review of Conditional Grant at Department of Health 57.5 57.5 1

Audit of transfer payment at Department of Health 57.5 57.5 1

Secondment of resources for the performance of an audit on project Management @ the dept of economic development and tourism

76.2 76.2 1





76.2 76.2 1


76.2 76.2 1

secondment of resources for the performance of audits on SCM 76.2 76.2 1

Secondment of resources for the performance of audits on Contract Management @ the dept of Economic development and Tourism

76.2 76.2 1

Appointment of external service providers to conduct application controls review for KZN Tourism 76.2 76.2 1

To assist a resource to assist with a post implementation review of the provincial Nerve centre System

76.2 76.2 1

Conduct IT Project management review department of transport 76.2 76.2 1

Secondment of resources to perform Information technology (IT) contract and performance management reviews

76.2 76.2 1

Performance information audit @ Mjindi Farming 76.2 76.2 1

Engagement letter for the IT audit of Tourism KZN 76.2 76.2 1

Post -Implementation Review of Intenda system for Dept of Health (Piloted at Greys Hospital) 76.2 76.2 1

Audit on performance information at dept of arts &culture 76.2 76.2 1

audit on assets and infrastructure management at MJINDI 76.2 76.2 1

Audit on revenue and debtors management at MJINDI Farming (pty)LTD 76.2 76.2 1

Audit on Supply Labour Relations at department of Transport. 76.2 76.2 1

Audit on Supply Chain Management inclusive of follow up at Department of Transport 76.2 76.2 1

Audit on Transfer payments KZN Department of Economic Development,Tourism and Environmental Affairs

76.2 76.2 1

Audit on Performance Information at KZN Sharks Board 76.2 76.2 1

Secondment of resources for an audit on performance information @ KZN Tourism Authority 76.2 76.2 1

Secondment of resources for the performance of an audit on performance information at community safety and liaison

76.2 76.2 1

Audit on Supply Chain management at KZN Sharks board 76.2 76.2 1

Appointment of staff on secondment- Post implementation review of nerve centre system @ the office of the Premier

100 100 1

Appointment of external service providers to conduct application controls review for Mjindi farming 100 100 1

Audit on supply chain management at dept of human settlement 100 100 1

Audit on trasfer payment department of sports &recreation 100 100 1




Appointment of Ubunye consortium to conduct audit on transfer payment @ department of Agriculture

100 100 1

Appointment of Ubunye consortium to conduct audit on governance and administration cluster performance information -AMAFA kwazulu-natal

100 100 1

Appointment of Ubunye consortium to conduct audit on governance and administration cluster- fleet management AMA Kwazulu natal

100 100 1

Audit on supply chain management at dept of arts &culture 100 100 1

Audit on asset management at liquor authority 100 100 1

Audit on HRM at KZN Provincial Treasury 100 100 1

Audit on Performance Information for KZN Department of Economic Development ,Tourism and Environmental Affairs

98 98 1

I T Strategy review at department of social development 98 98 1

To conduct youth programme audit at Office of the Premier, Social Development and Sports and Recreation

100 100 1

Appointment of serviceprovider: Audits @ Social, Economic and G&A clusters 98 98 1

Audit of Transfer payment at Department of Arts and Culture. 98 98 1

Audit on Follow up special schools inclusive education at department of Education 98 98 1

Audit on Follow up Transfer payments at department of Education 98 98 1

Audit on Follow up early childhood development at department of Education 98 98 1

Secondment of resources to KZN Provincial Treasury Internal Audit unit(Audit of performance information at the department of economic development and environmental affairs)

98 98 1

Secondment of resources to KZN Provincial Treasury Internal Audit unit(Audit of performance information at the department of Transport)

98 98 1

Audit on Performance Information for COGTA 100 100 1

To assist the PPP UNIT conduct an independent structural assessment for Inkosi Albert Luthuli Hospital

33.14 33.14 1

Kzn Winter Air tour 68.5 68.5 1

KZN regional technology hubs project 0 0 1


APPROPRIATION STATEMENT FOR THE YEAR ENDED 31 MARCH 2015


Appropriation per programme

2014/15 2013/14

Adjusted

Appropria

tion

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure

Variance Expenditure

as % of

final appropriation

Final

Appropriation

Actual

Expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Programme

1. Administration 118 093 118 093 113 215 4 878 95.9% 113 064 96 932

2. Fiscal Resource Management 87 023 87 023 75 467 11 556 86.7% 102 395 91 205

3. Financial Management 331 008 (3 255) 327 753 311 048 16 705 94.9% 269 086 240 987

4. Internal Audit 125 909 5 855 131 764 130 420 1 344 99.0% 109 581 107 362

5. Growth and Development 46 693 (2 600) 44 093 43 812 281 99.4% 59 845 41 055

TOTAL 708 726 0 708 726 673 962 34 764 95.1% 653 971 577 541

2014/15 2013/14

Final

Appropriation

Actual

Expenditure

Final

Appropriation

Actual

Expenditure

TOTAL (brought forward) 708 726 673 962 653 971 577 541

Reconciliation with statement of financial performance

ADD

Departmental receipts 597 602 49 814

Actual amounts per statement of financial performance (total revenue) 1 306 328 703 785

Actual amounts per statement of financial performance (total expenditure) 673 962 577 541




Appropriation per economic classification

2014/15 2013/14

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Economic classification

Current payments 617 230 (5 099) 612 131 578 812 33 319 94.6% 600 004 545 860

Compensation of employees 221 225 (2 664) 218 561 211 837 6 724 96.9% 202 148 185 326

Salaries and wages 195 524 (1 554) 193 970 191 220 2 750 98.6% 175 001 166 099

Social contributions 25 701 (1110) 24 591 20 617 3 974 83.8% 27 147 19 227

Goods and services 395 037 (2 115) 392 922 366 975 25 947 93.4% 395 148 360 534

Administrative fees 8 132 (994) 7 138 7 560 (422) 105.9% 10 866 11 897

Advertising 3 420 (497) 2 923 3 839 (916) 131.3% 3 588 3 995

Minor assets 762 (30) 732 548 184 74.9% 1 021 615

Audit costs: External 7 365 (1 109) 6 256 4 406 1 850 70.4% 6 540 3 318

Bursaries: Employees 360 360 260 100 72.2% 350 194

Catering: Departmental activities

2 435 (782) 1 653 1 819 (166) 110.0% 2 398 2 960

Communication 3 155 3 155 2 185 970 69.3% 2 623 2 155

Computer services 128 630 (3 470) 125 160 115 482 9 678 92.3% 111 818 112 842

Consultants: Business and advisory services

174 100 5 333 179 433 168 918 10 515 94.1% 188 475 163 278

Legal services 865 2 508 3 373 3 182 191 94.3% 3 497 1 218

Contractors 4 262 (699) 3 563 3 631 (68) 101.9% 14 036 12 356

Agency and support / outsourced services

1 161 (447) 714 356 358 49.9% 567 576

Entertainment 13 13 13 44

Fleet services 1 809 1 809 1 375 434 76.0% 1 005 1 194

Consumable supplies 825 (50) 775 607 168 78.3% 1 448 563




Consumable: Stationery, printing and office supplies

2 348 2 348 2 698 (350) 114.9% 2 144 1 789

Operating leases 16 288 16 288 15 440 848 94.8% 14 377 13 498

Property payments 11 639 370 12 009 12 526 (517) 104.3% 6 000 7 073

Transport provided: Departmental activity

900 (28) 872 651 221 74.7% 904 931

Travel and subsistence 18104 (697) 17 407 15 371 2 036 88.3% 15 788 12 512

Training and development 2 545 (43) 2502 2 595 (93) 103.7% 1 835 2 020

Operating payments 2 769 (80) 2 689 1 719 970 63.9% 2 859 2 599

Venues and facilities 3 150 (1 400) 1 750 1 807 (57) 103.3% 2 965 2 951

Rental and hiring

Interest and rent on land 968 (320) 648 648 2 708

Interest 968 (320) 648 648 2 708

Transfers and subsidies 79 578 1 230 80 808 80 292 516 99.4% 46 120 25 290

Provinces and municipalities 32 120 26 32 146 31 932 214 99.3% 40 660 21 983

Provinces 237 26 263 267 (4) 101.5% 731 723

Provincial agencies and funds

237 26 263 267 (4) 101.5% 731 723

Municipalities 31 883 31 883 31 665 218 99.3% 39 929 21 260

Municipal agencies and funds

31 883 31 883 31 665 218 99.3% 39 929 21 260

Departmental agencies and accounts

39 276 39 276 39 277 (1) 100.0% 2 1


39 276 39 276 39 277 (1) 100.0% 2 1

Non-profit institutions 2 308 2 308 2 184 124 94.6% 0 0

Households 5 874 1 204 7 078 6 899 179 97.5% 5 458 3 306

Social benefits 2 676 637 3 313 3 134 179 94.6% 323 322

Other transfers to households 3 198 567 3 765 3 765 100.0% 5 135 2 984

Payments for capital assets 11 918 3 865 15 783 14 854 929 94.1% 7 430 5 974

Machinery and equipment 11 918 3 865 15 783 14 854 929 94.1% 7 430 5 974




Transport equipment 2 350 233 2 583 2 397 186 92.8% 1 656 1 695

Other machinery and equipment

9 568 3 632 13 200 12 457 743 94.4% 5 774 4 279

Payments for financial assets 4 4 4 100% 417 417

708 726 708 726 673 962 34 764 95.1% 653 971 577 541

Programme 1: ADMINSTRATION

2014/15 2013/14

Adjusted

Appropriation

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. Office of the MEC 26 098 26 098 24 507 1 591 93.9% 26 708 23 465

2. Head of Department 9 151 9 151 8 055 1 096 88.0% 8 708 6 669

3. Chief Financial Office 24 405 24 405 23 014 1 391 94.3% 24 774 17 441

4. Corporate Services 58 439 58 439 57 639 800 98.6% 52 874 49 357

Total for sub programmes 118 093 118 093 113 215 4 878 95.9% 113 064 96 932



Compensation of employees 58 219 (1 295) 56 924 55 836 1 088 98.1% 55 903 49 660

Salaries and wages 50 743 (395) 50 348 50 094 254 99.5% 47 586 44 179

Social contributions 7 476 (900) 6 576 5 742 834 87.3% 8 317 5 481

Goods and services 50 640 (376) 50 264 46 920 3 344 93.3% 49 490 41 653

Administrative fees 311 311 904 (593) 290.7% 248 1 802

Advertising 2 511 (497) 2 014 2 125 (111) 105.5% 2 673 3 025

Minor assets 313 313 159 154 50.8% 493 110

Audit costs: External 7 365 (1 109) 6 256 4 406 1 850 70.4% 6 540 3 318




Bursaries: Employees 360 360 282 78 78.3% 350 194

Catering: Departmental activities

305 (91) 214 479 (265) 223.8% 375 908

Communication 1 588 1 588 1 033 555 65.1% 1 369 1 096

Computer services 6 6 31 (25) 516.7% 0 0


2 644 2 644 2 870 (226) 108.5% 518 130

Legal services 595 1 587 2 182 2 094 88 96.0% 3 377 1 198

Contractors 721 721 804 (83) 111.5% 2 255 1 505


111 0 111 54 57 48.6% 88 0


Fleet services 1 809 1 809 1 375 434 76.0% 1 005 1 194

Consumable supplies 554 554 497 57 89.7% 1 230 465


1 098 1 098 1 100 (2) 100.2% 1 043 669

Operating leases 15 498 15 498 15 382 116 99.3% 13 961 13 295

Property payments 7 597 370 7 967 8 520 (553) 106.9% 6 000 6 993


31 (31) 60 17

Travel and subsistence 5 232 (556) 4 676 3 342 1 334 71.5% 5 436 3 558

Training and development 952 952 558 394 58.6% 583 895

Operating payments 914 (80) 834 531 303 63.7% 1 286 1 017

Venues and facilities 146 146 343 (197) 234.9% 566 264

Transfers and subsidies 5 992 1 162 7 154 7 114 40 99.4% 5 064 3 525

Provinces and municipalities 237 26 263 267 (4) 101.5% 906 898

Provinces 237 26 263 267 (4) 101.5% 731 723

Provincial agencies and funds

237 26 263 267 (4) 101.5% 731 723

Municipalities 175 175

Municipal agencies and funds

175 175





1 (1) 2 1

Departmental agencies 1 (1) 2 1

Non-profit institutions 1 000 1 000 957 43 95.7% 0 0

Households 4 755 1 136 5 891 5 889 2 100.0% 4 156 2 626

Social benefits 1 560 569 2 129 2 127 2 99.9% 89 89

Other transfers to households 3 195 567 3 762 3 762 100.0% 4 067 2 537

Payments for capital assets 3 242 509 3 751 3 345 406 89.2% 2 586 2 073

Machinery and equipment 3 242 509 3 751 3 345 406 89.2% 2 586 2 073

Transport equipment 2 350 233 2 583 2 397 186 92.8% 1 656 1 695

Other machinery and equipment

892 276 1 168 948 220 81.2% 930 378

Payments for financial assets 21 21

118 093 118 093 113 215 4 878 95.9% 113 064 96 932

Programme 2: Fiscal Resource Management

2014/15 2013/14

Adjusted

Appropriation

Shifting

of Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. Programme Support 2 059 2 059 1 150 909 55.9% 2 927 1 825

2. Economic Analysis 26 527 26 527 26 301 226 99.1% 38 122 37 545

3. Public Finance 12 564 12 564 11 611 953 92.4% 12 721 10 347

4. Municipal Finance 45 873 45 873 36 405 9 468 79.4% 48 625 41 488

Total 87 023 87 023 75 467 11 556 86.7% 102 395 91 205





Current payments 86 757 (301) 86 456 74 981 11 475 86.7% 101 504 90 510

Compensation of employees 44 755 2 025 46 780 45 548 1 232 97.4% 41 104 37 038

Salaries and wages 40 084 2 025 42 109 41 521 588 98.6% 36 389 33 347

Social contributions 4 671 4 671 4 027 644 86.2% 4 715 3 691


Administrative fees 112 112 49 63 43.8% 93 59

Advertising 95 (95) 328 365

Minor assets 71 71 216 (145) 304.2% 38 144

Catering: Departmental activities 170 170 51 119 30.0% 98 75

Communication 309 309 294 15 95.1% 300 252

Computer services 120 120 120 13


35 112 (1 727) 33 385 25 024 8 361 75.0% 55 303 49 142

Legal services 84 84 84 100.0%

Contractors 14 14 28 (14) 200.0% 12 45


400 (99) 301 301

Consumable surplus 48 48 9 39 18.8% 43 10


310 310 428 (118) 138.1% 281 273

Operating leases 195 195 195 46 52

Property payments 6 (6) 15

Travel and subsistence 2 472 (84) 2 388 1 824 564 76.4% 2 007 1 400

Training and development 283 283 221 62 78.1% 190 196

Operating payments 1 350 1 350 708 642 52.4% 1 113 972

Venues and facilities 1 036 (500) 536 396 140 73.9% 548 459

Transfers and subsidies 68 66

Households 68 66

Social benefits 54 54

Other transfers to households 14 12




Payments for capital assets 266 301 567 486 81 85.7% 620 426

Machinery and equipment 266 301 567 486 81 85.7% 620 426

Other machinery and equipment 266 301 567 486 81 85.7% 620 426


Total 87 023 87 023 75 467 11 556 86.7% 102 395 91 205

Programme 3: Financial Management

2014/15 2013/14

Adjusted

Appropriation

Shifting

of Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. Financial Asset and Liability

Management

15 401 (1 300) 14 101 12 125 1 976 86.0% 20 908 15 318

2. Public Private Partnerships 6 615 6 615 5 673 942 85.8% 7 175 5 238

3. Supply Chain Management 65 341 6 571 71 912 70 492 1 420 98.0% 57 748 43 333

4. Financial Reporting 65 330 (8 526) 56 804 55 847 957 98.3% 58 037 54 840

5. Norms and Standards 4 336 4 336 4 016 320 92.6% 4 740 3 776

6. Support and Interlinked Financial

Systems

129 853 129 853 119 882 9 971 92.3% 120 478 118 482

7. Gaming and Betting 44 132 44 132 43 013 1 119 97.5%

Total 331 008 (3 255) 327 753 311 048 16 705 94.9% 269 086 240 987


Compensation of employees 59 214 (92) 59 122 55 466 3 656 93.8% 53 945 49 299

Salaries and wages 51 641 (92) 51 549 49 978 1 571 97.0% 46 456 44 286

Social contributions 7 573 7 573 5 488 2 085 72.5% 7 489 5 013


Administrative fees 7 429 (994) 6 435 6 383 52 99.2% 10 331 9 906




Advertising 60 60 153 (93) 255.0%

Minor assets 168 (30) 138 110 28 79.7% 490 294

Catering: Departmental activities 54 54 96 (42) 177.8% 51 135

Communication 638 638 459 179 71.9% 523 420

Computer services 128 204 (3 470) 124 734 115 201 9 533 92.4% 111 018 111 876


77 777 (2 083) 75 694 73 242 2 452 96.8% 80 089 60 189

Legal services 270 837 1 107 1 004 103 90.7% 120 20

Contractors 122 (66) 56 20 36 35.7% 85 24


Consumable supplies 155 (50) 105 64 41 61.0% 109 56


668 668 717 (49) 107.3% 463 456

Operating leases 276 276 58 218 21.0% 105 83

Property payments 42 42 42 65

Transport provided: Department act 4 (4)

Travel and subsistence 5 190 (57) 5 133 5 418 (285) 105.6% 3 811 3 821

Training and development 460 (43) 417 575 (158) 137.9% 322 424

Operating payments 119 119 72 47 60.5% 23 276

Venues and facilities 48 48 83 (35) 172.9% 89 14

Interest and rent on land 968 (320) 648 648 2 708

Interest 968 (320) 648 648 2 708

Transfers and subsidies 41 543 58 41 601 41 343 258 99.4% 1 112 493

Departmental agencies and accounts 39 276 39 276 39 276 100.0%

Departmental agencies 39 276 39 276 39 276 100.0%

Non-profit institutions 1 308 1 308 1 227 81 93.8%

Households 959 58 1 017 840 177 82.6% 1 112 493

Social benefits 956 58 1 014 837 177 82.5% 58 58

Other transfers to households 3 3 3 100.0% 1 054 435

Payments for capital assets 7 600 3 055 10 655 10 580 75 99.3% 3 494 2 944

Machinery and equipment 7 600 3 055 10 655 10 580 75 99.3% 3 494 2 944

Other machinery and equipment 7 600 3 055 10 655 10 580 75 99.3% 3 494 2 944





Total 331 008 (3 255) 327 753 311 048 16 705 94.9% 269 086 240 987

Programme 4: Internal Audit

2014/15 2013/14

Adjusted

Appropriati

on

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. Assurance Services 68 008 5 855 73 863 73 585 278 99.6% 59 253 59 033

2. Risk Management 57 901 57 901 56 835 1 066 98.2% 50 328 48 329

Total for sub programmes 125 909 5 855 131 764 130 420 1 344 99.0% 109 581 107 362


Current payments 124 939 5 841 130 780 129 803 977 99.3% 108 728 106 709

Compensation of employees 59 037 (3 302) 55 735 54 987 748 98.7% 51 196 49 329

Salaries and wages 53 056 (3 092) 49 964 49 627 337 99.3% 44 570 44 287

Social contributions 5 981 (210) 5 771 5 360 411 92.9% 6 626 5 042

Goods and services 65 902 9 143 75 045 74 816 229 99.7% 57 532 57 380

Administrative fees 280 280 224 56 80.0% 194 130

Advertising 144 (144) 9 104

Minor assets 210 210 63 147 30.0% 67

Bursaries: Employees (22) 22

Catering: Departmental activities 56 56 34 22 60.7% 58 26

Communication 620 620 399 221 64.4% 431 387

Computer services 300 300 250 50 83.3% 800 953


57 511 9 143 66 654 66 791 (137) 100.2% 49 885 50 680




Contractors 7 (7) 4

Entertainment 4

Consumable supplies 68 68 37 31 54.4% 66 25


272 272 453 (181) 166.5% 357 391

Operating leases 319 319 319 265 68

Travel and subsistence 5 210 5 210 4 787 423 91.9% 4 534 3 733

Training and development 850 850 1 241 (391) 146.0% 740 505

Operating payments 186 186 408 (222) 219.4% 189 303

Venues and facilities 20 20 20 4

Transfers and subsidies 160 10 170 170 100.0% 122 121

Households 160 10 170 170 100.0% 122 121

Social benefits 160 10 170 170 100.0% 122 121

Payments for capital assets 810 810 443 367 54.7% 730 531

Machinery and equipment 810 810 443 367 54.7% 730 531

Other machinery and equipment 810 810 443 367 54.7% 730 531

Payments for financial assets 4 4 4 100.0% 1 1

Total 125 909 5 855 131 764 130 420 1 344 99.0% 109 581 107 362

Programme 5: Growth and Development

2014/15 2013/14

Adjusted

Appropriati

on

Shifting of

Funds

Virement Final

Appropriation

Actual

Expenditure


as % of final

appropriation

Final

Appropriation

Actual

expenditure

R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Sub programme

1. Budget Communication 7 810 (2 600) 5 210 5 180 30 99.4% 7 464 7 456




2. Special Infrastructure Projects 31 883 31 883 31 665 218 99.3% 39 754 21 085

3. Special Projects 7 000 7 000 6 967 33 99.5% 12 627 12 514

4. Strategic Cabinet Initiatives

Total 46 693 (2 600) 44 093 43 812 281 99.4% 59 845 41 055


Current payments 14 810 (2 600) 12 210 12 147 63 99.5% 20 091 19 970

Compensation of employees

Goods and services 14 810 (2 600) 12 210 12 147 63 99.5% 20 091 19 970

Advertising 849 849 1 322 (473) 155.7% 578 501

Catering: Departmental activities 1 850 (691) 1 159 1159 100.0% 1 816 1 816


1 056 1 056 991 65 93.8% 2 680 3 137

Contractors 3 405 (633) 2 772 2 772 100.0% 11 684 10 778


650 (348) 302 302 100.0% 479 576

Consumable supplies 7

Property payments 4 000 4 000 4 000 100.0%


900 (28) 872 616 256 70.6% 844 914

Operating payments 200 200 200 248 31

Venues and facilities 1 900 (900) 1 000 985 15 98.5% 1 762 2 210

Transfers and subsidies 31 883 31 883 31 665 218 99.3% 39 754 21 085

Provinces and municipalities 31 883 31 883 31 665 218 99.3% 39 754 21 085

Municipalities 31 883 31 883 31 665 218 99.3% 39 754 21 085

Municipal agencies and funds 31 883 31 883 31 665 218 99.3% 39 754 21 085

Payments for capital assets

Payments for financial assets

Total 46 693 (2 600) 44 093 43 812 281 99.4% 59 845 41 055

KWAZULU NATAL PROVINCIAL TREASURY: VOTE 6

NOTES TO THE APPROPRIATION STATEMENT

FOR THE YEAR ENDED 31 MARCH 2015


1. Detail of transfers and subsidies as per Appropriation Act (after Virement):

Detail of these transactions can be viewed in the note on Transfers and subsidies, disclosure

notes and Annexure 1 (A-H) to the Annual Financial Statements.

2. Detail of specifically and exclusively appropriated amounts voted (after Virement):

Detail of these transactions can be viewed in note 1 (Annual Appropriation) to the Annual

Financial Statements.

3. Detail on payments for financial assets

Detail of these transactions per programme can be viewed in the note to Payments for financial

assets to the Annual Financial Statements.

4. Explanations of material variances from Amounts Voted (after Virement):

4.1 Per programme Final

Appropriation

Actual

Expenditure

Variance

R’000

Variance as a

% of Final

Appropriation

Administration 118 093 113 215 4 878 4.1%

Per programme Final

Appropriation

Actual

Expenditure

Variance

R’000

Variance as

a % of Final

Appropriati

on

Fiscal Resource Management 87 023 75 467 11 556 13.3%

Explanation of variance: Programme 1 Administration under spent by 4.1% as a result of the following: - Delays in the filling of vacant funded posts resulting from the lengthy human resource evaluation and recruitment processes and delays in reviewing of the programme 1 organisational structure. - Mainly due to strict adherence to the cost-cutting measures circular. - Savings were realised on items such as travel and subsistence, legal fees, minor assets and lower than anticipated audit costs. - Machinery and equipment was due to adherence to cost-cutting measure.

Explanation of variance: • Programme 2: Fiscal Resource Management under-spent by 13.3% as a result of the following: - Slow spending on the Municipal Support Programme (MSP) project due to unresolved disputes with the service providers. - Invoices have been withheld due the unsatisfactory work received from appointed service providers. - A rollover of R9 400 million has been requested in this regard. - Savings arose from items such as travel and subsistence and venues and facilities as a result of adherence to cost cutting measures.





Per programme Final

Appropriation

Actual

Expenditure

Variance

R’000

Variance as a

% of Final

Appropriation

Financial Management 327 753 311 048 16 705 5.1%

Per programme Final

Appropriation

Actual

Expenditure

Variance

R’000

Variance as a

% of Final

Appropriation

Internal Audit 131 764 130 420 1 344 1.0%

Explanation of variance: • Programme 3: Financial Management under-spent by 5.1% mainly due to the following: - Later than anticipated filling of vacant funded posts. - Decreased Bank Charges resulting from a better negotiated tender contract. - Non receipt of SITA invoices for Computer services amounting to R9 700 million. These funds are committed and a rollover request has been submitted on this regard. - Savings were also realised from the Interest as a result of a positive bank balance on the IGCC and PMG accounts. - The department also made recoveries from external client via the Inter-departmental Accounts (IDA's).

• Programme 4: Internal Audit (savings) Internal Audit - This programme has spent 99% of its allocated budget. The remaining savings are emanating from compensation of employees as a result of learners being offered permanent employment with other institutions

Per programme Final

Appropriation

Actual

Expenditure

Variance R’000 Variance as a

% of Final

Appropriation

Growth and Development 44 093 43 812 281 0.6%

Explanation of variance: • Programme 5: Growth and Development under-spent by 0.6% due to: - Decrease in the number of the MECs community outreach programmes that were held in this financial year.





4.2 Per economic

classification

Final

Appropriation

Actual

Expenditure

Variance Variance as a % of

Final Appropriation

R’000 R’000 R’000 R’000

Current payments

Compensation of employees 218 561 211 837 6 724 3.1%

Goods and services 392 922

366 975 25 947 6.6%

Interest and rent on land 648 0 648 100.0%

Transfers and

subsidies

Provinces and

municipalities

32 146 31 932 214 0.7%

Departmental agencies

and accounts

39 276 39 277 (1) 0.0%

Non-profit institutions 2 308 2 184 124 5.4%

Households 7 078 6 899 179 2.5%

Payments for capital

assets

Machinery and

equipment

15 783 14 854 929 5.9%

Payments for

financial assets

4 4 0

Explanation of variance: Spending in respect of economic classification can be summarised as follows: • Compensation of employees: - The under-spending of 3,1% is due to delays in the filling of vacant funded posts resulting from DPSA not confirming and approving reviewed structures on time and difficulty in finding suitably qualified candidates. • Goods and services reflects under-expenditure of 6.6% due to the following: - Lower than anticipated audit costs. - Slow spending on the Municipal Support Programme (MSP) project due to unresolved disputes with the service providers which led to payments being withheld for orders already issued. - Savings from travel and subsistence, as well as venues and facilities as a result of adherence to cost-cutting measures. - Non receipt of SITA invoices resulted in a huge under-spending for computer services. • Interest and Rent on Land reflects 100% savings due to:- Improvement in the funds available in the PMG and IGCC account, resulting in no interest having to be paid by the province. • Transfers and subsidies: - Provinces and municipalities was at 0.7% due to late receipt of Umsunduzi Electrification invoice for the balance of the outstanding transfer amount which was only received after the cut-off date for the processing. - Non profit Institution was at 5.4%, the under-spending relates to transfers made to Umgungundlovu Sports Academy and Financial Literacy Programme. - Households was under-spent by 2.5% mainly due to lower than anticipated payments towards staff exit and leave gratuities. • Machinery and equipment reflects an under-spending of 5.9% mainly due to: - Strict implementation and adherence to cost cutting measures circular.


STATEMENT OF FINANCIAL PERFORMANCE

AS AT 31 MARCH 2015


Note 2014/15 2013/14

R'000 R'000

REVENUE

Annual appropriation 1 708 726 653 971

Departmental revenue 2 597 602 49 814

TOTAL REVENUE 1 306 328 703 785

EXPENDITURE

Current expenditure

Compensation of employees 3 211 834 185 326

Goods and services 4 366 977 360 535

Total current expenditure 578 811 545 861

Transfers and subsidies

Transfers and subsidies 5 80 292 25 290

Total transfers and subsidies 80 292 25 290

Expenditure for capital assets

Tangible assets 6 14 855 5 973

Total expenditure for capital assets 14 855 5 973

Payments for financial assets 7 4 417

TOTAL EXPENDITURE 673 962 577 541

SURPLUS/(DEFICIT) FOR THE YEAR 632 366 126 244

Reconciliation of Net Surplus/(Deficit) for the year

Voted funds 34 764 76 430

Annual appropriation 34 764 76 430

Departmental revenue and NRF Receipts 597 602 49 814

SURPLUS/(DEFICIT) FOR THE YEAR 632 366 126 244

KWAZULU NATAL PROVINCIAL TREASURY

VOTE 6

STATEMENT OF FINANCIAL POSITION

as at 31 March 2015


Note 2014/15 2013/14

R'000 R'000

ASSETS

Current assets

39 409 1 774

Cash and cash equivalents 8 34 515 4

Prepayments and advances 9 7 48

Receivables 10 4 887 1 722

Non-current assets

112 126

Receivables 10 112 126

TOTAL ASSETS 39 521 1 900

LIABILITIES

Current liabilities

38 529 959

Voted funds to be surrendered to the Revenue Fund 11 34 510 (3 570)

Departmental revenue and NRF Receipts to be

surrendered to the Revenue Fund

12 4 017 4 397

Bank overdraft 13 64

Payables 14 2 68

Non-current liabilities

TOTAL LIABILITIES 38 529 959

NET ASSETS 992 941

Note 2014/15 2013/14

R'000 R'000

Represented by:

Recoverable revenue 992 941

TOTAL 992 941


VOTE 6

STATEMENT OF CHANGES IN NET ASSETS

for the year ended 31 March 2015


Note 2014/15 2013/14

R'000 R'000

Capitalisation Reserves

Opening balance

Transfers:

Movement in Equity

Movement in Operational Funds

Other movements

Closing balance

Recoverable revenue

Opening balance 941 936

Transfers: 51 5

Irrecoverable amounts written off 7.1 4 417

Debts revised

Debts recovered (included in departmental

receipts)

(737) (776)

Debts raised 784 364

Closing balance 992 941

Retained funds

Opening balance

Transfer from voted funds to be surrendered

(Parliament/Legislatures ONLY)

Utilised during the year

Other transfers

Closing balance

Revaluation Reserve

Opening balance

Revaluation adjustment (Housing departments)

Transfers

Other

Closing balance

TOTAL 992 941


CASH FLOW STATEMENT



Note 2014/15 2013/14

R'000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts 1 306 035 623 351

Annual appropriated funds received 1.1 708 472 573 971

Departmental revenue received 2 541 359 540

Interest received 2.3 56 204 48 840

Net (increase)/decrease in working capital (3 176) 996

Surrendered to Revenue Fund (594 412) (60 332)

Current payments (578 811) (545 861)

Payments for financial assets (4) (417)

Transfers and subsidies paid (80 292) (25 290)

Net cash flow available from operating activities 15 49 340 (7 553)

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for capital assets 6 (14 855) (5 973)

Proceeds from sale of capital assets 2.4 39 434

Net cash flows from investing activities (14 816) (5 539)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase/(decrease) in net assets 51 5

Net cash flows from financing activities 51 5

Net increase/(decrease) in cash and cash equivalents 34 575 (13 087)

Cash and cash equivalents at beginning of period (60) 13 027

Cash and cash equivalents at end of period 16 34 515 (60)


ACCOUNTING POLICIES



Summary of significant accounting policies

The financial statements have been prepared in accordance with the following policies, which have been applied consistently in all material aspects, unless otherwise indicated.

The historical cost convention has been used, except where otherwise indicated. Management has used assessments and estimates in preparing the annual financial statements. These are based on the best information available at the time of preparation.

Where appropriate and meaningful, additional information has been disclosed to enhance the

usefulness of the financial statements and to comply with the statutory requirements of the

Public Finance Management Act (PFMA), Act 1 of 1999 (as amended by Act 29 of 1999), and

the Treasury Regulations issued in terms of the PFMA and the annual Division of Revenue Act.

1 Basis of preparation

The financial statements have been prepared in accordance with the Modified Cash

Standard.The financial statements fairly present the department's primary and

secondary information.

2 Going concern

The financial statements have been prepared on a going concern basis.

3 Presentation currency

Amounts have been presented in the currency of the South African Rand (R) which is

also the functional currency of the department.

4 Rounding

Unless otherwise stated financial figures have been rounded to the nearest one

thousand Rand (R’000).

5 Foreign currency translation

Cash flows arising from foreign currency transactions are translated into South African

Rands using the exchange rates prevailing at the date of payment / receipt.

6 Comparative information

6.1 Prior period comparative information

Prior period comparative information has been presented in the current year’s financial

statements. Where necessary figures included in the prior period financial statements

have been reclassified to ensure that the format in which the information is presented is

consistent with the format of the current year’s financial statements.

6.2 Current year comparison with budget

A comparison between the approved, final budget and actual amounts for each

programme and economic classification is included in the appropriation statement.

7 Revenue

7.1 Appropriated funds

Appropriated funds comprises of departmental allocations as well as direct charges

against the revenue fund (i.e. statutory appropriation).


ACCOUNTING POLICIES



Appropriated funds are recognised in the statement of financial performance on the

date the appropriation becomes effective. Adjustments made in terms of the

adjustments budget process are recognised in the statement of financial performance

on the date the adjustments become effective.

The net amount of any appropriated funds due to / from the relevant revenue fund at the

reporting date is recognised as a payable / receivable in the statement of financial

position.

7.2 Departmental revenue

Departmental revenue is recognised in the statement of financial performance when

received and is subsequently paid into the relevant revenue fund, unless stated

otherwise.

Any amount owing to the relevant revenue fund at the reporting date is recognised as a

payable in the statement of financial position.

7.3 Accrued departmental revenue

Accruals in respect of departmental revenue (excluding tax revenue) are recorded in the

notes to the financial statements when:

it is probable that the economic benefits or service potential associated with the transaction will flow to the department; and

the amount of revenue can be measured reliably.

The accrued revenue is measured at the fair value of the consideration receivable.

Accrued tax revenue (and related interest and / penalties) is measured at amounts

receivable from collecting agents.

8 Expenditure

8.1 Compensation of employees

8.1.1 Salaries and wages

Salaries and wages are recognised in the statement of financial performance on the

date of payment.

8.1.2 Social contributions

Social contributions made by the department in respect of current employees are

recognised in the statement of financial performance on the date of payment.

Social contributions made by the department in respect of ex-employees are classified

as transfers to households in the statement of financial performance on the date of

payment.

8.2 Other expenditure

Other expenditure (such as goods and services, transfers and subsidies and payments

for capital assets) is recognised in the statement of financial performance on the date of

payment. The expense is classified as a capital expense if the total consideration paid

is more than the capitalisation threshold.

8.3 Accrued expenditure payable

Accrued expenditure payable is recorded in the notes to the financial statements when


ACCOUNTING POLICIES



the goods are received or, in the case of services, when they are rendered to the

department.

Accrued expenditure payable is measured at cost.

8.4 Leases

8.4.1 Operating leases

Operating lease payments made during the reporting period are recognised as current

expenditure in the statement of financial performance on the date of payment.

The operating lease commitments are recorded in the notes to the financial statements.

8.4.2 Finance leases

Finance lease payments made during the reporting period are recognised as capital

expenditure in the statement of financial performance on the date of payment.

The finance lease commitments are recorded in the notes to the financial statements

and are not apportioned between the capital and interest portions.

Finance lease assets acquired at the end of the lease term are recorded and measured

at the lower of:

cost, being the fair value of the asset; or

the sum of the minimum lease payments made, including any payments made to

acquire ownership at the end of the lease term, excluding interest.

9 Aid Assistance

9.1 Aid assistance received

Aid assistance received in cash is recognised in the statement of financial performance

when received. In-kind aid assistance is recorded in the notes to the financial

statements on the date of receipt and is measured at fair value.

Aid assistance not spent for the intended purpose and any unutilised funds from aid

assistance that are required to be refunded to the donor are recognised as a payable in

the statement of financial position.

9.2 Aid assistance paid

Aid assistance paidis recognised in the statement of financial performance on the date

of payment. Aid assistance payments made prior to the receipt of funds are recognised

as a receivable in the statement of financial position.

10 Cash and cash equivalents

Cash and cash equivalents are stated at cost in the statement of financial position.

Bank overdrafts are shown separately on the face of the statement of financial position.

For the purposes of the cash flow statement, cash and cash equivalents comprise cash

on hand, deposits held, other short-term highly liquid investments and bank overdrafts.

11 Prepayments and advances

Prepayments and advances are recognised in the statement of financial position when

the department receives or disburses the cash.

Prepayments and advances are initially and subsequently measured at cost.


ACCOUNTING POLICIES



12 Loans and receivables

Loans and receivables are recognised in the statement of financial position at cost plus

accrued interest, where interest is charged, less amounts already settled or written-off.

13 Investments

Investments are recognised in the statement of financial position at cost.

14 Impairment of financial assets

Where there is an indication of impairment of a financial asset, an estimation of the

reduction in the recorded carrying value, to reflect the best estimate of the amount of

the future economic benefits expected to be received from that asset, is recorded in the

notes to the financial statements.

15 Payables

Loans and payables are recognised in the statement of financial position at cost.

16 Capital Assets

16.1 Immovable capital assets

Immovable capital assets are initially recorded in the notes to the financial statements at cost. Immovable capital assets acquired through a non-exchange transaction is measured at fair value as at the date of acquisition.

Where the cost of immovable capital assets cannot be determined accurately, the immovable capital assets are measured at R1 unless the fair value of the asset has been reliably estimated, in which case the fair value is used.

All assets acquired prior to 1 April 2004, in which the KZN Treasury letter dated 6 September 2005 (or a later date as approved by the OAG) may be recorded at R1.

Immovable capital assets are subsequently carried at cost and are not subject to depreciation or impairment.

Subsequent expenditure that is of a capital nature is added to the cost of the asset at

the end of the capital project unless the immovable asset is recorded by another

department in which case the completed project costs are transferred to that

department.

16.2 Movable capital assets

Movable capital assets are initially recorded in the notes to the financial statements at cost. Movable capital assets acquired through a non-exchange transaction is measured at fair value as at the date of acquisition.

Where the cost of movable capital assets cannot be determined accurately, the movable capital assets are measured at fair value and where fair value cannot be determined; the movable assets are measured at R1.

All assets acquired prior to 1 April 2004, in which the KZN Treasury letter dated 6 September 2005 (or a later date as approved by the OAG) may be recorded at R1.

Movable capital assets are subsequently carried at cost and are not subject to depreciation or impairment.

Biological assets are subsequently carried at fair value.

Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project unless the movable asset is recorded by another


ACCOUNTING POLICIES



department/entity in which case the completed project costs are transferred to that department.

16.3 Intangible assets

Intangible assets are initially recorded in the notes to the financial statements at cost. Intangible assets acquired through a non-exchange transaction are measured at fair value as at the date of acquisition.

Internally generated intangible assets are recorded in the notes to the financial statements when the department commences the development phase of the project.

Where the cost of intangible assets cannot be determined accurately, the intangible capital assets are measured at fair value and where fair value cannot be determined; the intangible assets are measured at R1.

All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may berecorded at R1.

Intangible assets are subsequently carried at cost and are not subject to depreciation or impairment.

Subsequent expenditure that is of a capital nature is added to the cost of the asset at

the end of the capital project unless the intangible asset is recorded by another

department/entity in which case the completed project costs are transferred to that

department.

17 Provisions and Contingents

17.1 Provisions

Provisions are recorded in the notes to the financial statements when there is a present

legal or constructive obligation to forfeit economic benefits as a result of events in the

past and it is probable that an outflow of resources embodying economic benefits or

service potential will be required to settle the obligation and a reliable estimate of the

obligation can be made. The provision is measured as the best estimate of the funds

required to settle the present obligation at the reporting date.

17.2 Contingent liabilities

Contingent liabilities are recorded in the notes to the financial statements when there is

a possible obligation that arises from past events, and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain future

events not within the control of the department or when there is a present obligation that

is not recognised because it is not probable that an outflow of resources will be required

to settle the obligation or the amount of the obligation cannot be measured reliably.

17.3 Contingent assets

Contingent assets are recorded in the notes to the financial statements when a possible

asset arises from past events, and whose existence will be confirmed by the occurrence

or non-occurrence of one or more uncertain future events not within the control of the

department.

17.4 Commitments

Commitments are recorded at cost in the notes to the financial statements when there is

a contractual arrangement or an approval by management in a manner that raises a

valid expectation that the department will discharge its responsibilities thereby incurring


ACCOUNTING POLICIES



future expenditure that will result in the outflow of cash.

18 Unauthorised expenditure

Unauthorised expenditure is recognised in the statement of financial position until such time as the expenditure is either:

approved by Parliament or the Provincial Legislature with funding and the related funds are received; or

approved by Parliament or the Provincial Legislature without funding and is written off against the appropriation in the statement of financial performance; or

transferred to receivables for recovery.

Unauthorised expenditure is measured at the amount of the confirmed unauthorised

expenditure.

19 Fruitless and wasteful expenditure

Fruitless and wasteful expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the total value of the fruitless and or wasteful expenditure incurred.

Fruitless and wasteful expenditure is removed from the notes to the financial statements when it is resolved or transferred to receivables for recovery.

Fruitless and wasteful expenditure receivables are measured at the amount that is

expected to be recoverable and are de-recognised when settled or subsequently

written-off as irrecoverable.

20 Irregular expenditure

Irregular expenditure is recorded in the notes to the financial statements when

confirmed. The amount recorded is equal to the value of the irregular expenditure

incurred unless it is impracticable to determine, in which case reasons therefor are

provided in the note.

Irregular expenditure is removed from the note when it is either condoned by the

relevant authority, transferred to receivables for recovery or not condoned and is not

recoverable.

Irregular expenditure receivables are measured at the amount that is expected to be

recoverable and are de-recognised when settled or subsequently written-off as

irrecoverable.

21 Changes in accounting policies, accounting estimates and errors

Changes in accounting policies that are affected by management have been applied

retrospectively in accordance with MCS requirements, except to the extent that it is

impracticable to determine the period-specific effects or the cumulative effect of the

change in policy. In such instances the department shall restate the opening balances

of assets, liabilities and net assets for the earliest period for which retrospective

restatement is practicable.

Changes in accounting estimates are applied prospectively in accordance with MCS

requirements.

Correction of errors is applied retrospectively in the period in which the error has

occurred in accordance with MCS requirements, except to the extent that it is


ACCOUNTING POLICIES



impracticable to determine the period-specific effects or the cumulative effect of the

error. In such cases the department shall restate the opening balances of assets,

liabilities and net assets for the earliest period for which retrospective restatement is

practicable.

22 Events after the reporting date

Events after the reporting date that are classified as adjusting events have been

accounted for in the financial statements. The events after the reporting date that are

classified as non-adjusting events after the reporting date have been disclosed in the

notes to the financial statements.

23 Agent-Principal arrangements –

In terms of KwaZulu- Natal Gaming and Betting Act, every bookmaker must within the

prescribed period pay to the board all monies due for betting taxes.

The board must also pay within 15 days to the Provincial Revenue Fund the collected

taxes in accordance with the KZN Gaming and Betting Tax Act.

a) The functions of Provincial Treasury includes collecting and optimising Provincial own revenue.

b) The department has the power to direct the activities of the board in terms of the law.

The Board accounts and reports to the MEC for Finance.

The MEC for Finance has the final deciding powers over the activities of the entity. This includes:

(i) Appointment of the board members

(ii) Collecting the revenue, paying it over to the revenue fund to supplement the National Equitable Share of the KwaZulu Natal Province and,

(iii) Attending to all legal matters that affect the Board’s operations.

c) Treasury has the power to use the majority of the activity related resources (collected revenue) in pursuit of its functions which are:

Collecting own revenue.

Promoting effective and optimal financial resource allocation to the Provincial Departments and Public Entities. This function resides within Programme 2 and it is included as part of their Annual Performance Plan targets.

The collection of revenue specifically related to the Gaming and Betting is also included in Programme 3, sub-programme : Gaming and Betting

d) The department incurs sacrifice and economic benefits to ensure the

proper/efficient functioning of Gaming and Betting industry within the province of KwaZulu Natal i.e.


ACCOUNTING POLICIES



It has appointed legal experts who are amending KwaZulu Natal Gaming and Betting Act.

Where there are dispute between the role players the department is expected to mediate or in case of litigations the department is expected to defend the decisions of the entity.

e) The department budgets for the collection of this revenue in its books over the Medium Term Expenditure Framework period.

Since this is a taxation collection function, the entity has no control or power over the usage of the collected taxes in terms of the law, hence it is a function of Treasury and only Treasury can redistribute taxes for service delivery purposes.

24 Departures from the MCS requirements - N/A

25 Capitalisation reserve

The capitalisation reserve comprises of financial assets and/or liabilities originating in a

prior reporting period but which are recognised in the statement of financial position for

the first time in the current reporting period.Amounts are recognised in the capitalisation

reserves when identified in the current period and are transferred to the Provincial

Revenue Fund when the underlying asset is disposed and the related funds are

received.

26 Recoverable revenue

Amounts are recognised as recoverable revenue when a payment made in a previous

financial year becomes recoverable from a debtor inthe current financial year. Amounts

are either transferred to the Provincial Revenue Fund when recovered or are

transferred to the statement of financial performance when written-off.

27 Related party transactions

A related party transaction is a transfer of resources, services or obligations between

the reporting entity and a related party. Related party transactions are recorded in the

notes to the financial statements when the transaction is not at arm’s length.

28 Inventories (Effective from 1 April 2016)

At the date of acquisition, inventories are recorded at cost price in the notes to the

financial statements

Where inventories are acquired as part of a non-exchange transaction, the cost of

inventory is its fair value at the date of acquisition.

Inventories are subsequently measured at the lower of cost and net realisable value or

the lower of cost and replacement value.


NOTES TO THE ANNUAL FINANCIAL STATEMENTS



1. Annual Appropriation

1.1 Annual Appropriation

2014/15 2013/14

Final

Appropriation

Actual

Funds

Received

Funds not

requested/

not received

Appropriati

on

received

R’000 R’000 R’000 R’000

Administration 118 093 118 051 42 99 160

Fiscal Resource

Management

87 023 86 992 31 89 822

Financial Management 327 753 327 635 118 236 311

Internal Audit 131 764 131 717 47 96 154

Growth and Development 44 093 44 077 16 52 524

Total 708 726 708 472 254 573 971

2. Departmental revenue

Note 2014/15 2013/14

R’000 R’000

Tax revenue 538 524

Sales of goods and services other than capital

assets

2.1 322 169

Fines, penalties and forfeits 2.2 1

Interest, dividends and rent on land 2.3 56 204 48 840

Sales of capital assets 2.4 39 434

Transactions in financial assets and liabilities 2.5 2 513 370

Total revenue collected 597 602 49 814

Less: Own revenue included in appropriation 2

Departmental revenue collected 597 602 49 814

The increase in revenue collected is as a result of inherited entity Gaming and betting board,

which deals with gaming industry and it collects tax revenue from gaming and betting operators

(Casinos and sport betting). The department collected approximately 80% from gaming and

betting taxes.





2.1 Sales of goods and services other than capital assets

Note 2014/15 2013/14

2 R’000 R’000

Sales of goods and services produced by the

department

319 167

Sales by market establishment 90 54

Administrative fees 29 51

Other sales 200 62

Sales of scrap, waste and other used current goods 3 2

Total 322 169

2.2 Fines, penalties and forfeits

Note 2014/15 2013/14

2 R’000 R’000

Penalties 1

Total 1

2.3 Interest, dividends and rent on land

Note 2014/15 2013/14

2 R’000 R’000

Interest 56 204 48 840

Total 56 204 48 840

2.4 Sale of capital assets

Note 2014/15 2013/14

2 R’000 R’000

Tangible assets 39 434

Machinery and equipment 2 39 434

Total 39 434

2.5 Transactions in financial assets and liabilities

Note 2014/15 2013/14

2 R’000 R’000

Loans and advances

Receivables 2 513 370

Total 2 513 370





3. Compensation of employees

3.1 Salaries and Wages

Note 2014/15 2013/14

R’000 R’000

Basic salary 147 664 127 309

Performance award 2 959 3 783

Service Based 162 74

Compensative/circumstantial 1 860 2 074

Periodic payments 985 632

Other non-pensionable allowances 37 588 32 225

Total 191 218 166 097

3.2 Social contributions

Note 2014/15 2013/14

R’000 R’000

Employer contributions

Pension 16 069 14 672

Medical 4 520 4 534

Bargaining council 27 23

Total 20 616 19 229

Total compensation of employees

211 834 185 326

Average number of employees

514 475

4. Goods and services

Note 2014/15 2013/14

R’000 R’000

Administrative fees 7 561 11 898

Advertising 4 448 3 993

Minor assets 4.1 549 614

Bursaries (employees) 259 194

Catering 1 818 2 961

Communication 1 575 2 156

Computer services 4.2 115 481 112 843

Consultants: Business and advisory services 168 919 163 279

Legal services 3 182 1 218

Contractors 3 988 12 355

Agency and support / outsourced services 576

Audit cost – external 4.3 4 406 3 318

Fleet services 1 375 1 194





Consumables 4.4 3 306 2 351

Operating leases 15 440 13 498

Property payments 4.5 12 526 7 072

Transport provided as part of the departmental

activities

652 931

Travel and subsistence 4.6 15 369 12 512

Venues and facilities 1 808 2 952

Training and development 2 595 2 021

Other operating expenditure 4.7 1 720 2 599

Total 366 977 360 535

VARIANCE EXPLANATIONS

Admin fees decrease

A decrease in administrative fees is a result of better negotiated banking tender

contract, including cost cutting measures on travelling agent fees.

Legal Services Increase

An increase in legal fees was due to more cases against the department as a result of

function shift of the public entity from Office of the Premier.

Contractors Decrease

Reduced renovations of office accommodation during the year that are reaching final

stages.

Property Payments Increase

Due to rehabilitation of floor at Inkosi Albert Luthuli Hospital (once off project).

Travel and Subsistence Increase

Amongst other things is the increase in Petrol prices during the year and,

Increasing the rate of hotel accommodation.

Computer Services Increase

E -procurement tool and leave systems were developed during the year.





4.1 Minor assets

Note 2014/15 2013/14

4 R’000 R’000

Tangible assets 549 614

Machinery and equipment 549 614

Total 549 614

4.2 Computer services

Note 2014/15 2013/14

4 R’000 R’000

SITA computer services 85 448 97 003

External computer service providers 30 033 15 840

Total 115 481 112 843

4.3 Audit cost – External

Note 2014/15 2013/14

4 R’000 R’000

Regularity audits 3 913 3 074

Computer audits 493 244

Total 4 406 3 318

4.4 Consumables

Note 2014/15 2013/14

4 R’000 R’000

Consumable supplies 1 142 564

Uniform and clothing 22 158

Household supplies 254 273

Building material and supplies 71

Communication accessories 1

IT consumables 7 28

Other consumables 858 34

Stationery, printing and office supplies 2 164 1 787

Total 3 306 2 351

4.5 Property payments

Note 2014/15 2013/14

4 R’000 R’000

Municipal services 3 328 2 953

Property maintenance and repairs 5 361 4 119

Other 3 837

Total 12 526 7 072





4.6 Travel and subsistence

Note 2014/15 2013/14

4 R’000 R’000

Local 15 365 11 531

Foreign 4 981

Total 15 369 12 512

4.7 Other operating expenditure

Note 2014/15 2013/14

4 R’000 R’000

Professional bodies, membership and subscription

fees

379 308

Resettlement costs 188 126

Other 1 153 2 165

Total 1 720 2 599

5. Transfers and subsidies

2014/15 2013/14

R’000 R’000

Note

Provinces and municipalities 29, Ann 1E 31 906 21 970

Departmental agencies and accounts Annex 1A 39 303 13

Non-profit institutions Annex 1B 2 184

Households Annex 1C 6 899 3 307

Total 80 292 25 290

6. Expenditure for capital assets

Note 2014/15 2013/14

R’000 R’000

Tangible assets 14 855 5 973

Machinery and equipment 14 855 5 973

Intangible assets

Software

Total 14 855 5 973

6.1 Analysis of funds utilised to acquire capital assets – 2014/15

Voted funds Aid

assistance

Total

R’000 R’000 R’000



Total 14 855 14 855





6.2 Analysis of funds utilised to acquire capital assets – 2013/14

Voted funds Aid

assistance

Total

R’000 R’000 R’000



Total 5 973 5 973

7. Payments for financial assets

Note 2014/15 2013/14

R’000 R’000

Debts written off 4 417

Total 4 417

7.1 Debts written off

Note 2014/15 2013/14

R’000 R’000

Other debt written off

Late Mr Zondi’s bursary debt 4 417

Total 4 417

Total debt written off 4 417

8. Cash and cash equivalents

Note 2014/15 2013/14

R’000 R’000

Consolidated Paymaster General Account 34 511

Cash on hand 4 4

Total 34 515 4

9. Prepayments and advances

Note 2014/15 2013/14

R’000 R’000

Travel and subsistence 7 48

Total 7 48





10. Receivables

2014/15 2013/14

R’000 R’000 R’000 R’000 R’000

Note

Less

than one

year

One to

three

years

Older

than

three

years

Total

Total

Claims recoverable 10.1

Annex

4

3 230 3 230 305

Recoverable

expenditure

10.2 44 44 206

Staff debt 10.3 87 49 136 162

Other debtors 10.4 1 526 63 1 589 1 175

Total 4 887 112 4 999 1 848

10.1Claims recoverable

Note 2014/15 2013/14

R’000 R’000

National departments 4 4

Provincial departments 3 226 300

Private enterprises 1

Total 3 230 305

10.2 Recoverable expenditure (disallowance accounts)

Note 2014/15 2013/14

R’000 R’000

Sal: Tax Debt 44 38

Disall damages & losses 100 100

Disall damages & losses (100) (100)

Dishonoured cheques 146

Pension Recoverable 22

Total 44 206

10.3 Staff debt

Note 2014/15 2013/14

R’000 R’000

Tax debts 7

Bursary debts 80 121

Overpaid Salary 3 4

Travel and Subsistence 9

Other 40





Cell phone 13 20

Housing allowance 1

Total 136 162

10.4 Other debtors

Note 2014/15 2013/14

R’000 R’000

Bursary Debts 1 003 953

Losses and Damages 13 9

Tax Debts 11 10

Overpaid salary 413 155

Subsided Vehicle 16 16

Private telephone 14 23

Other 119 9

Total 1 589 1 175

11. Voted funds to be surrendered to the Revenue Fund

Note 2014/15 2013/14

R’000 R’000

Opening balance (3 570) 14 895

Prior period error

As restated (3 570) 14 895

Transfer from statement of financial performance (as

restated)

34 764 76 430

Voted funds not requested/not received 1.1 (254) (80 000)

Paid during the year 3 570 (14 895)

Closing balance 34 510 (3 570)

12. Departmental revenue and NRF Receipts to be surrendered to the Revenue

Fund

Note 2014/15 2013/14

R’000 R’000

Opening balance 4 397 20

Prior period error

As restated 4 397 20

Transfer from Statement of Financial Performance

(as restated)

597 602 49 814

Paid during the year (597 982) (45 437)

Closing balance 4 017 4 397





13. Bank Overdraft

Note 2014/15 2013/14

R’000 R’000

Consolidated Paymaster General Account 64

Total 64

14. Payables – current

Note 2014/15 2013/14

R’000 R’000

Clearing accounts 14.1 1 68

Other payables 14.2 1

Total 2 68

14.1 Clearing accounts

Note 2014/15 2013/14

R’000 R’000

(Identify major categories, but list material amounts)

Sal: Income Tax 1 68

Total 1 68

14.2 Other payables

Note 2014/15 2013/14

R’000 R’000

(Identify major categories, but list material amounts)

Sal: Income Tax 1 0

Total 1 0

15. Net cash flow available from operating activities

Note 2014/15 2013/14

R’000 R’000

Net surplus/(deficit) as per Statement of Financial

Performance

632 366 126 244

Add back non cash/cash movements not deemed

operating activities

(583 026) (133 797)

(Increase)/decrease in receivables – current (3 151) 971

(Increase)/decrease in prepayments and advances 41 (40)

(Increase)/decrease in other current assets

Increase/(decrease) in payables – current (66) 65

Proceeds from sale of capital assets (39) (434)

Expenditure on capital assets 14 855 5 973

Surrenders to Revenue Fund (594 412) (60 332)

Voted funds not requested/not received (254) (80 000)

Net cash flow generated by operating activities 49 340 (7 553)





16. Reconciliation of cash and cash equivalents for cash flow purposes

Note 2014/15 2013/14

R’000 R’000

Consolidated Paymaster General account 34 511 (64)

Cash on hand 4 4

Total 34 515 (60)

17. Contingent liabilities and contingent assets

Contingent liabilities

Note 2014/15 2013/14

R’000 R’000

Liable to Nature

Other guarantees Annex 2A 1 600

Claims against the department Annex 2B 1 550 45

Intergovernmental payables (unconfirmed

balances)

Annex 4 3 2 352

Total 3 153 2 397

Amount R1 600 in respect of advances and guarantee from bookmakers is receivable from

Office of the Premier due to transfer of function Gaming and Betting.

18. Commitments

Note 2014/15 2013/14

R’000 R’000

Current expenditure

Approved and contracted 135 477 140 520

135 477 140 520

Capital expenditure

Approved and contracted 230 239

230 239

Total Commitments 136 707 140 759

19. Accruals and payables not recognised 2014/15 2013/14

R’000 R’000 Listed by economic classification

30 Days 30+ Days Total Total Goods and services 8 401 16 940 25 341 18 160 Transfers and subsidies 3 978 3 978 Capital assets 14 14

Total 12 393 16 940 29 333 18 160





Note 2014/15 2013/14

R’000 R’000 Listed by programme level Administration 3 728 2 926 Fiscal Resource Management 749 1 613 Financial Management 10 170 9 247 Internal Audit 10 161 4 061 Growth and Development 4 525 313

Total 29 333 18 160

Note 2014/15 2013/14

R’000 R’000 Confirmed balances with other departments Annex 4 1093 1 Confirmed balances with other government entities Annex 4 42

Total 1 093 43

20. Employee benefits

Note 2014/15 2013/14

R’000 R’000

Leave entitlement 8 324 4 440

Service bonus (Thirteenth cheque) 4 639 4 235

Performance awards 3 056 2 715

Capped leave commitments 6 042 5 667

Other 74

Total 22 135 17 057

The leave entitlement as disclosed above is the net of negative balances. The negative balance

amount to R226k.

21. Lease commitments

21.1 Operating leases expenditure

2014/15

Specialised

military

equipment

Land

Buildings

and other

fixed

structures

Machinery

and

equipment

Total

Not later than 1 year 12 580 12 580

Later than 1 year and not

later than 5 years

26 165 26 165

Total lease commitments 38 745 38 745





2013/14 Specialised

military

equipment

Land

Buildings

and other

fixed

structures

Machinery

and

equipment

Total



later than 5 years

15 472 15 472

Later than five years

Total lease commitments 24 265 24 265

21.2 Finance leases expenditure

2014/15

Specialised

military

equipment

Land

Buildings and

other fixed

structures

Machinery

and

equipment

Total



later than 5 years

606 606

Later than five years

Total lease

commitments

2 523 2 523

2013/14 Specialised

military

equipment

Land

Buildings and

other fixed

structures

Machinery

and

equipment

Total



later than 5 years

437 437

Total lease

commitments

2 169 2 169

**This note excludes leases relating to public private partnership as they are separately

disclosed to note no.35.

22. Irregular expenditure

22.1 Reconciliation of irregular expenditure

Note 2014/15 2013/14

R’000 R’000

Opening balance

Prior period error

Add: Irregular expenditure – relating to prior year

Add: Irregular expenditure – relating to current year 846 433

Less: Current year amounts condoned (846) (433)

Less: Amounts not condoned and recoverable

Closing balance





22.2 Details of irregular expenditure – current year

Incident Disciplinary steps taken/criminal

proceedings

2014/15 R’000

Legal services procured to attend to urgent legal matters iro Gaming and Betting Board (PKX Attorneys) 574

Legal services procured to attend to urgent bid appeal matters Imvula Quality Protection Services& Others (PKX Attorneys) 155

Legal services procured to attend to bill amendment (MMK) 117

Total 846

All the above transactions amounting to R846k were condoned by the accounting Officer.

Themajority of irregular transactions relate to the operation of the inherited entity.

22.3 Details of irregular expenditure condoned

Incident Condoned by (condoning authority) 2014/15

R’000

Legal services procured to attend to urgent legal matters iro Gaming and Betting Board 574

(PKX Attorneys)

Legal services procured to attend to urgent bid appeal matters Imvula Quality Protection

Services & Others (PKX Attorneys) 155

Legal services procured to attend to bill amendment (MMK) 117

Total 846

23. Related party transactions

KZN Treasury has a related party relationship with KZN Gaming & Betting Board.

Refer to the Accounting officer report.

24. Key management personnel

No. of Individuals 2014/15 2013/14

R’000 R’000

Political office bearers (provide detail below) 1 1 799 1 735

Officials:

Level 15 to 16 6 7 812 5 350

Level 14 (incl. CFO if at a lower level) 13 14 139 9 585

Family members of key management personnel

Total 23 750 16 670





25. Movable Tangible Capital Assets

MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE

YEAR ENDED 31 MARCH 2015

Opening

balance

Additions Disposals Closing

Balance

R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT 38 484 14 869 584 52 769

Transport assets 6 012 2 398 8 410

Computer equipment 28 614 11 786 451 39 949

Furniture and office equipment 3 551 680 58 4 173

Other machinery and equipment 307 5 75 237

Capital Work-in-progress(Effective 1

April 2016)

TOTAL MOVABLE TANGIBLE

CAPITAL ASSETS 38 484 14 869 584 52 769

25.1 Additions

ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE

YEAR ENDED 31 MARCH 2015

Cash* Non-

cash**

(Capital

Work in

Progress

current

costs and

finance

lease

payments)

Received

current,

not paid

(Paid

current

year,

received

prior year)

Total

R’000 R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT 14 855 14 14 869

Transport assets 2 398 2 398

Computer equipment 11 772 14 11 786

Furniture and office equipment 680 680

Other machinery and equipment 5 5

TOTAL ADDITIONS TO

MOVABLE TANGIBLE

CAPITAL ASSETS

14 855 14 14 869





25.2 Disposals

DISPOSALS OF MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR

THE YEAR ENDED 31 MARCH 2015

Sold for

cash

Transfer

out or

destroyed

or

scrapped

Total

disposals

Cash

Received

Actual

R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT 395 189 584 39

Computer equipment 262 189 451 8

Furniture and office equipment 58 58

Other machinery and equipment 75 75 31

TOTAL DISPOSAL OF

MOVABLE TANGIBLE CAPITAL

ASSETS

395 189 584 39

25.3 Movement for 2013/14

MOVEMENT IN TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31

MARCH 2015

Opening

balance

Prior

period

error


Balance

R’000 R’000 R’000 R’000 R’000

MACHINERY AND

EQUIPMENT

34 190 3 5 973 1 682 38 484

Transport assets 5 427 (1) 1 695 1 109 6 012

Computer equipment 25 132 4 055 573 28 614

Furniture and office equipment 3 330 3 218 3 551

Other machinery and equipment 301 1 5 307

TOTAL MOVABLE TANGIBLE

CAPITAL ASSETS 34 190 3 5 973 1 682 38 484





Prior period error

Note 2013/14

25.3 R’000

Nature of prior period error

Relating to 2013/14 3

Correcting prior year rounding off differences 3

Total 3

Correcting prior year rounding off differences

25.4 Minor assets

MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED AS AT 31

MARCH 2015

Specialise

d military

assets

Intangible

assets

Heritage

assets

Machinery

and

equipment

Biologica

l assets

Total

R’000 R’000 R’000 R’000 R’000 R’000

Opening balance 1 651 4 993 6 644

Additions 549 549

Disposals 54 54

TOTALMINOR

ASSETS

1 651 5 488 7 139

Specialised

military

assets

Intangible

assets

Heritage

assets

Machinery

and

equipment

Biological

assets

Total

Number of R1

minor assets

2 362 2 362

Number of minor

assets at cost

36 2 879 2 915

TOTAL NUMBER

OF MINOR ASSETS

36 5 241 5 277





MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED AS AT

31 MARCH 2014

Specialise

d military

assets

Intangible

assets

Heritage

assets

Machinery

and

equipment

Biologica

l assets

Total

R’000 R’000 R’000 R’000 R’000 R’000

Opening balance 1 651 4 312 5 963

Prior period error 81 81

Additions 615 615

Disposals (15) (15)

TOTALMINOR

ASSETS

1 651 4 993 6 644

26. Intangible Capital Assets

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED

31 MARCH 2015

Opening

balance


Balance

R’000 R’000 R’000 R’000

SOFTWARE 28 515 28 515

Capital Work-in-

progress(Effective 1 April 2016)

TOTAL INTANGIBLE CAPITAL

ASSETS 28 515 28 515

26.1 Movement for 2013/14

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED

31 MARCH 2014

Opening

balance

Prior

period

error


Balance

R’000 R’000 R’000 R’000 R’000

SOFTWARE 28 515 28 515

MASTHEADS AND PUBLISHING

TITLES

TOTAL INTANGIBLE CAPITAL

ASSETS 28 515 28 515





27. Agent-principal arrangements

27.1 Department acting as the principal

2014/15 2013/14

R’000 R’000

Gaming and Betting as the principal 538 524

Total 538 524

27.2

In terms of KwaZulu- Natal Gaming and Betting Act, every bookmaker must within the

prescribed period pay to the board all monies due for betting taxes.

The board must also pay within 15 days to the Provincial Revenue Fund the collected taxes in

accordance with the KZN Gaming and Betting Tax Act.

Since this is a taxation collection function, the entity has no control or power over the usage of

the collected taxes in terms of the law, hence it is a function of Treasury and only Treasury can

redistribute taxes for service delivery purposes.

28. Transfer of functions

On 01 April 2014, KwaZulu-Natal Gaming and Betting Board (KZNGBB) were transferred from

Vote 1 Office of the Premier (OTP) to Vote 6 KwaZulu-Natal Provincial Treasury. The entity

strategic objective is to enhance the Gaming and Betting regulatory environment in KwaZulu

Natal.





29. STATEMENT OF CONDITIONAL /UNCONDITIONAL GRANTS PAID TO MUNICIPALITIES

NAME OF MUNICIPALITY

GRANT ALLOCATION TRANSFER

Division

of

Revenue

Act

Roll-

Overs Adjustments

Total

Available

Actual

Transfer

Funds

Withheld

Re-

allocations

by National

Treasury or

National

Department

Division of

Revenue

Act

R’000 R’000 R'000 R'000 R'000 % R'000

KZ225 Msunduzi 5 500 5 500 5 282 16 186

KZN433 Greater Kokstad 26 383 26 383 26 383 20 677

Hibscuss Coast 2 288

Zululand 603

31 883 31 883 31 665 39 754

National Departments are reminded of the DORA requirements to indicate any re-allocations by the National Treasury or the transferring

department, certify that all transfers in terms of this Act were deposited into the primary bank account of a province or, where appropriate, into the

CPD account of a province as well as indicate the funds utilised for the administration of the receiving officer.


VOTE 6

ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS



ANNEXURE 1A STATEMENT OF TRANSFERS TO DEPARTMENTAL AGENCIES AND ACCOUNTS

DEPARTMENT/ AGENCY/ ACCOUNT

TRANSFER ALLOCATION TRANSFER 2013/14

Adjusted

Appropriation

Roll

Overs

Adjustments

Total

Available

Actual

Transfer

% of

Available

funds

Transferred

Appropriation

Act

R'000 R'000 R'000 R'000 R'000 % R'000

KZN Gaming and Betting Board 39 276 39 276 39 276 100%

PD : Vehicle Licences 22 22 26 118% 20

Com: Licences 1 2

39 298 39 298 39 303 22

ANNEXURE 1B

STATEMENT OF TRANSFERS TO NON-PROFIT INSTITUTIONS

NON-PROFIT INSTITUTIONS

TRANSFER ALLOCATION EXPENDITURE 2013/14

Adjusted

Appropriation

Act

Roll

overs

Adjustments

Total

Available

Actual

Transfer

% of

Available

funds

transferred

Appropriation

Act

R'000 R'000 R'000 R'000 R'000 % R'000

Transfers

KZN Financial Literacy

UMgungundlovu Sport Academy

1 000

1 308

1 000

1 308

957

1 227

96%

94%

2 308 2 308 2 184

Subsidies

Total 2 308 2 308 2 184


VOTE 6




ANNEXURE 1C

STATEMENT OF TRANSFERS TO HOUSEHOLDS

HOUSEHOLDS

TRANSFER ALLOCATION EXPENDITURE 2013/14

Adjusted

Appropriation

Act

Roll

Overs

Adjustments

Total

Available

Actual

Transfer

% of

Available

funds

Transferre

d

Appropriation

Act

R'000 R'000 R'000 R'000 R'000 % R'000

Transfers

Injury on Duty 3 5 8 8 100% 12

Post retirement benefit 700 (84) 616 519 84% 1 053

Severance Package 1 536 1 536 1 453 95% 0

Leave Gratuity 437 716 1 153 1 153 100% 308

Bursaries (Non- employee) 3 195 567 3 762 3 762 100% 4 058

Claims against State (Cash) 3 3 3 100% 27

5 874 1 204 7 078 6 898 5 458

Subsidies

Total 5 874 1 204 7 078 6 898 5 458


VOTE 6




ANNEXURE 1D

STATEMENT OF GIFTS, DONATIONS AND SPONSORSHIPS RECEIVED

NAME OF ORGANISATION NATURE OF GIFT, DONATION OR SPONSORSHIP

2014/15 2013/14

R’000 R’000

Received in cash

ABSA Bank Sponsorship for the 2014: Women's Business Breakfast 13

FNB Sponsorship for the 2014: Budget Road Show 80

ABSA Bank Sponsorship for the 2015: Budget Business Breakfast 100

Subtotal 100 93

Received in kind

Subtotal

TOTAL 100 93


VOTE 6




ANNEXURE 1E

STATEMENT OF GIFTS, DONATIONS AND SPONSORSHIPS MADE

NATURE OF GIFT, DONATION OR SPONSORSHIP

(Group major categories but list material items including name of organisation

2014/15 2013/14

R’000 R’000

Made in kind

Umgeni Municipality 35

Mpofana Municipality 35

Umshwathi Municipality 35

Impendle Municipality 35

Mkhambathini Municipality 35

Duze Primary 66

Ottawa Primary School 8

Amaoti No3 Combine School 8

Bavumile Junior Primary School 8

Bhekulwandle P School 8

Wozamoya High School 8

Ndwedwe Circuit 2

Maphumulo Circuit 2

Mandeni Circuit 2

Mhlali Circuit 2

Mgungundlovu District 37


Ilembe District 37


Richmond District 53

Underburg District 16

Inhlangeni Primary School 32

Asmalls and Sons 1


VOTE 6




Sweetwaters Primary School 3

Ikhokhwanw Primary School 4

Howick Primary School 3

Mconjwana Primary School 1

Jabula Primary School 1

Mpophomeni High School 2

Nhlanhleni Primary 1

Zamuthule Primary School 2

Currys Post Primary 2

Hawkstone Primary School 2

Cedara Primary 2

Lions River Primary 1

Sifisesihle Primary School 2

Crystal Spring School 2

Unkonka Primary School 1

Morton Estate 2

Haza Primary School 3

Silindele Primary School 2

Asithuthuke Combined School 2

Isibongo Junior School 2

Cosmo Primary School 2

Injoloba Secondary School 1

uMthombo Secondary School 3

Asibemunye High School 2

Qhamuke Primary School 2

Trianara Primary School 1

Yarrow Intermediate School 2

Nogqaza Primary School 2

Sibongumbomvu Combine School 2

Shea O' Combine School 2


VOTE 6




Gartmore Primary School 2

Siwelile Primary School 3

Howick West Primary 1

Ramatha Road School 12

Sobantu Secondary School 23

Howick Secondary School 2

Corrie Lyn Primary School 2

Esiphethwinisendiza 1

Issy Geshen Old Age Home 20

Hluma Women's Support Group 18

Ntwenhle High School 14

Gijima Primary School 6

BhekaPhambili 5

Gugulethu Junior Primary School 1

DR J.L. Dube 2

Khuphukani Junior Primary School 2

Phakama HP 2

Corovoca Primary School 1

Quarry Heights and Phumelela Higher Primary School 1

Avoca Hills Prim 2

Nhlakanipho High School 1

Zamokuhle, Mzuvele, Zeph Dlomo,Roseland and Hillview Schools 1

Ferndale Primary Schools 1

Tongaat Junior Primary 13

Insizwakazi Primary 13

TOTAL 241 885


VOTE 6




ANNEXURE 2A

STATEMENT OF FINANCIAL GUARANTEES ISSUED AS AT 31 MARCH 2014 – LOCAL

Guarantor

institution

Guarantee in

respect of

Original

guaranteed

capital

amount

Opening

balance

1 April

2014

Guarantees

draw

downs

during the

year

Guarantees

repayments/

cancelled/

reduced/

released

during the

year

Revaluations

Closing

balance

31 March

2015

Guaranteed

interest for

year ended

31 March

2015

Realised

losses not

recoverable

i.e. claims

paid out

R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

Other

Bookmakers advances and

guarantees from

bookmakers

receivable

1 600 1 600

Subtotal 1 600 1 600

TOTAL 1 600 1 600

Amount R1 600 in respect of advances and guarantee from bookmakers is receivable from Office of the Premier due to transfer of function Gaming and Betting.


VOTE 6




ANNEXURE 2B

STATEMENT OF CONTINGENT LIABILITIES AS AT 31 MARCH 2015

Nature of Liability

Liabilities incurred

during the year

Liabilities paid/cancelled/reduced during the

year

Liabilities recoverable (Provide

details hereunder)

Opening Closing

Balance Balance

1 April 2014 31 March

2015

R’000 R’000 R’000 R’000 R’000

Claims against the department

R Ranjith vs. KZN Treasury 45 45

Raubex construction (Pty) Ltd v MEC: Finance & KZN Bid Appeals (TMJ Attorneys) 85 85

Barleda 232 CC t/a Barleda Plants & Civils v MEC:Finance & KZN Bid Tribunal (TMJ Attorneys)

85 85

Tekweni Civils CC v MEC:Finance & KZN Bid Appeals (TMJ Attorneys) 85 85

F Rouget v KZN Provincial Treasury (PKX Inc) 120 120

K Naidoo & Others //Hollywood Sport Book KZN (PTY) LTD (MMK Inc) 75 75

Bingo Regulations Review and opinion (MMK Inc) 65 65

Roho Communications v MEC:Finance & KZN Bid Tribunals ((TMJ Attorneys) 85 85

North Sea Jazz Festival(SD Moloi & Associates) 600 600

Chairperson/ MEC: Finance and others (Gaming and Betting) 200 200

Lindani Cleaning and security services 150 150

Subtotal 45 1 550 1 595

TOTAL 45 1 550 1 595


VOTE 6




ANNEXURE 3

CLAIMES RECOVERABLE

Government Entity

Confirmed balance outstanding

Unconfirmed balance outstanding

Total Cash in transit at year

end 2014/15 *

31/03/2015 31/03/2014 31/03/2015 31/03/2014 31/03/2015 31/03/2014

Receipt date up to

six (6) working

days after year end

Amount

R’000 R’000 R’000 R’000 R’000 R’000 R’000

Department

KZ Economic Development and Tourism

300 300

KZ Health 2 208 2 208

KZ Social Development 787 787

KZ Education 35 35

KZ Sport and Recreation 158 158

KZ Office of the Premier 38 38

Labour Compensation Fund 4 4 4 4

2 366 300 864 4 3 230 304

Other Government Entities

Giltime 1 1

1 1

TOTAL 2 366 301 864 4 3 230 305





ANNEXURE 4

INTER-GOVERNMENT PAYABLES

GOVERNMENT ENTITY

Confirmed balance outstanding

Unconfirmed balance outstanding

TOTAL Cash in transit at year end

2014/15 *

31/03/2015 31/03/2014 31/03/2015 31/03/2014 31/03/2015 31/03/2014

Payment date up to six (6)

working days before year end

Amount

R’000 R’000 R’000 R’000 R’000 R’000 R’000

DEPARTMENTS

Current

KZ Office of the Premier 74 328 74 328

KZ Social Development 1 181 182

KZ Health 48 48

KZ Public Works 1 019 1 505 1 019 1 505

Government Printing Works 171 171

SAPS 51 51

Department of Justice 34 34

Subtotal 1 093 1 2 318 1 093 2 319

Total 1 093 1 2 318 1 093 2 319





OTHER GOVERNMENT ENTITY Current

Palama 42 3 34 3 76

Subtotal 42 3 34 3 76

Total 1 093 43 3 2 352 1 096 2 395