presentation to portfolio committee of dmr 2011 / 12 annual report 17 october 2012
DESCRIPTION
PRESENTATION TO PORTFOLIO COMMITTEE OF DMR 2011 / 12 ANNUAL REPORT 17 OCTOBER 2012. Presentation Outline. 1. Financial performance - Annual Financial Statements 2. Auditor General’s Report - 2011/12 Audit Findings 3. Section 32 Report. - PowerPoint PPT PresentationTRANSCRIPT
PRESENTATION TO PORTFOLIO COMMITTEE OF DMR 2011 / 12
ANNUAL REPORT
17 OCTOBER 2012
1
Presentation Outline 1. Financial performance
- Annual Financial Statements
2. Auditor General’s Report
- 2011/12 Audit Findings
3. Section 32 Report
2
APPROPRIATION STATEMENT FOR 2011/2012
PROGRAMME
2011/12Final Budget
R'000
2011/12ActualR'000
VarianceR'000
2010/11Actual R’000
1. ADMIN 265,940 257,600 8,340 226,727
2. MHS 141,419 141,252 167 137,092
3. MR 184,396 184,396 0 188,608
4. MPP 447,210
446,187 1,023 442,270
Total 1,038,965 1,029,435 9,530 994,697
3
Analysis of variances • The overall under spending by the Department was
R9,530 million which is 0.92 % of the budget
• The main reason for the under spending relates to the procurement of Goods and Services and operating lease contracts whereby orders were raised during the 2011/2012 financial year but delivery thereof and processing of invoices and payments happened subsequent to that. ICT projects which were not completed on time also contributed to the under spending as payment could not be processed during the financial year as planned. This was mainly on Programme 1: Administration.
4
Analysis of variances
• Mine Health and Safety Branch reflected 99.88% spending. An amount of R6.1 million was re-allocated to other Branches to cater for over expenditure
• Although Mineral Regulation Branch reflected 100% spending, an amount of R22.2 million was re-allocated to this Branch from other Branches to cater for higher than anticipated expenditure
• Mineral Policy and Promotion Branch reflected 99.77% spending. An amount of R16.2 million was re-allocated to other Branches for higher than anticipated expenditure
5
TREND ON UTILISATION OF FUNDS
EconomicClassification
2011/12R’000
2010/11R’000
2009/10R’000
Compensation of Employees 364,562 326,457 403,323
Goods and Services 222,639 200,013 263,475
Payment for Capex 18,558 28,347 48,690
Transfer and subsidy 420,837 438,120 3,828,303
Payments for financial assets 209 50 925
Interest and rent on land2,630 1,710 0
Unspent 9,530 1,145 137,288
TOTAL (BUDGET) 1,038,965 995,842 4,682,004
% Under Spending 0.92% 0.11% 2.90%
6
Analysis of Unspent Funds
• Under spending has been consistently below 3% for the last three years
• For the year under review, the unspent funds of 0.92% is as indicated on slide 5
7
Analysis of major variance in Statement of Financial Performance (Actual expenditure)
8
Items 2011/12 2010/11 Variance % varianceR’000 R’000 R’000 %
Compensation of employees
Basic salary 248,912
217,268
31,644
14.56
Periodic payments 39
187
(148)
(79.14)
Pension 32,936
28,875
4,061
14.06
Goods and services
Advertising 1,387
1,661
(274)
(16.50)
Communication 14,408
11,181
3,227 28.86
Analysis of major variance in Statement of Financial Performance (Actual expenditure)…cont
Items2011/12 2010/11 Variance
% variance
R’000 R’000 R’000 %Audit Cost 4,838
3,740
1,098 29.35
Operating leases82,271 64,147
18,124
28.25 Transactions in financial assets and liabilities
209
50
159
318
Tangible capital assets
Buildings and other fixed structures 864 17,059 (16,195) (94.93)
Machinery and equipment 17,064
10,148 6,916
68.15
Software and other intangible assets
630
1,140 (510)
(44.74)
9
Statement of Financial Performance: Variance analysis
• The staff cost increased by 14.56%
• Highest cost drivers on Goods and Service are Audit cost, Communication and Operating Leases.
• There was a decrease in software costs due to the purchase of less software in comparison to previous years.
10
Analysis of variances: Statement of Financial Position
Items2011/12 2010/11 Variance %variance
R’000 R’000 R’000 %
Current Assets Cash and cash equivalents 9,383 37,493 (28,110)
(74.97)
Prepayments and Advances 89 40 49 122.5
Receivables 18,984 20,663 (1,679)(8.13)
Current Liabilities Voted Funds to be surrendered 9,530 1,145 8,385
732.3
Revenue to be surrendered 3,097 44,180 (41,083) (92.9)
11
Analysis of variances: Statement of Financial Position
Item 2011/12 2010/11 Variance %variance
R’000 R’000 R’000 %
Net Assets Recoverable Revenue 2,129 1,052 1,077
102.4
12
Transfers and Subsidies to associated institutions
Recipient
2011/12
Purpose of transfer payment
Actual transfer
R'000
Council for Geoscience 154,405
Core funding in terms of establishing act and research to prevent ingress of water into underground holdings.
Council for Mineral Technology Research 196,956
R166.9 million -Core funding in terms of establishing act and R30 million - Mine Rehabilitation projects
South African Diamond and Precious Metals Regulator 39,374
Core funding in terms of establishing act
Mine Health and Safety Council 5,288
Core funding in terms of establishing act
13
Auditor General’s Report
• The Department obtained unqualified audit report for 2011/12
• Department’s goal is a “clean report” and will continue putting process and procedures in place to ensure the achievement of this goal by 2014
14
Auditor General’s Report (2011/2012)
15
No AG finding Action Plan
1. The corresponding figures for 31 March 2011 have been restated as a result of an error discovered during the audit of 31 March 2012 financial statements of the Department.
Review, monitor and enhance the newly implemented revenue system and the calculation of environmental liability.
Emphasis of Matter
Auditor General’s Report (2011/2012)…cont
16
No AG finding Action Plan
1. The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 40(1) of the PFMA. Material misstatements of disclosure items identified by the auditors were subsequently corrected.
Manual and electronic systems in place to ensure proper reconciliation
2. Money owing by the department was not always paid within 30 days of receiving an invoice or statement, as required by section 38(1)(f) of the PFMA and TR 8.2.3.
Monitoring system in place and reported on a monthly basis.To date 96% paid within 30 days.
3. Revenue Management Review, monitor and enhance the newly implemented the revenue system
Compliance with laws and regulations
SECTION 32 REPORT: EXPENDITURE AND REVENUE SECTION 32 REPORT: EXPENDITURE AND REVENUE ANALYSIS AS AT 30 SEPTEMBER 2012ANALYSIS AS AT 30 SEPTEMBER 2012
Year to date analysis (per economic classification)
17
Economic Classification
Year to Date
% Variance
Projected Expenditure
R’000
Actual Expenditure
R’000
Variance on Projected vs.
Actual Expenditure
R’000
Compensation of employees
202,883
199,524 3,359 1.66%
Goods and Services 97,751
128,774 (31,023) (31.74%)
Capital payments
12,007 10,772 1,235 10.29%
Financial Transactions
-
164 164 0.00%
Transfer Payments 334,913 301,730 33,183 9.91%
Interest and rent on land 49 553 (504) (396%)
TOTALS 647,603 641,517 6,414 0.99%
SECTION 32 REPORT: REVENUE ANALYSISSECTION 32 REPORT: REVENUE ANALYSIS
• Year to date analysis
18
ITEM DESCRIPTION
Projected Revenue
R’000
Revenue collection as at 30/09/2012
R’000
Variance on projected vs
Revenue collected
R’000
% Variance
DEPARTMENTAL REVENUE
13,764 77,518 63,754 463.19%
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THANK YOU