PRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

PRESENTATION TO THE PORTFOLIO COMMITTEE ON POLICE

Follow-up Meeting

28 August 2012

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PSIRA DELEGATIONPRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

REPRESENTATIVES

Mr. Thula Bopela Chairperson of Council

Mr. Manabela Chauke Director

Mr. Nick Ligege Deputy Director – Finance

Adv. Philani Mthethwa Deputy Director – Law Enforcement

Mr. Isaac Ralioma Senior Manager – Human Capital

Ms Zanele Ngcobo Secretary to Council

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PRESENTATION OVERVIEW

• PART A – Financial context

• PART B – Financial reporting – Quarter 4 of 2011/12

• PART C – Financial reporting– Quarter 1 of 2012/13

• PART D – HR Matters

FINANCIAL CONTEXT - REVENUE PRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

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• PSIRA does not receive any form of government assistance / grant

• PSIRA Revenue streams are as follows:

– Annual fees from Security Providers (SP’s)

– Annual fees from active Security Officers payable monthly

– Security providers pay R4,250.00 p.a.

– Security providers pay R7.00 p.m. for each SO employed

– Security officers pay R84 p.a. through salary deductions

– Revenue from services rendered i.e.

• Registration fees (both SO’s and SP’s)

• Disbursement fees – issuance of ID cards, Certificates ,

• Processing of training (course) reports

• Fines issued at code of conduct enquiries

PART BQuarter 4 of 2011/12

BUDGET VARIANCE REPORT PRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

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 Actual2012

Budget2012 Variance %

Revenue 98 227 752 130 847 364 -32 619 612 -25%

Other income 30 301 289 27 000 000 3 301 289 12%

Total Revenue 128 529 041 157 847 364 -29 318 323 -19%

         

Operating expenses -52 902 201 -75 034 287 22 132 086 29%Employee related costs -61 377 994 -72 956 621 11 578 627 16%

Debt impairment -24 065 517 -8 804 761 -15 260 756 -173%Total Operating expenses -138 345 711 -156 795 669 18 449 958 12%

         

Operating surplus -9 816 671 1 051 695 -10 868 365 1033%

Investment revenue 537 461 750 000 -212 539 -28%

Finance costs -1 440 0 1 440 Surplus for the quarter -9 280 650 1 801 695 11 082 345 -615%

FINANCIAL ANALYSISPRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

VARIANCE ANALYSIS

• Revenue below budget by 19% (R29.3m) as a result of delayed implementation of 2011 Annual Fees

• Operating expenses below budget by 12% (R18.4m) as a result of non-appointment of employees, expenditure savings and deferment of planned activities

• Cost of living adjustment for 2012 was 5.5%

YEAR on YEAR REVIEW

• Revenue growth of 33% from R97m (2011) to R128m (2012)

• Expenditure growth of 15% from R97.7m (2011) to R138.3m (2012)

• However, expenditure growth slowed down from 23% in 2010/11 to 15%

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PART CQuarter 1 of 2012/13

BUDGET VARIANCE REPORT PRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

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 Q1

2012-13Q1

Budget Variance %

Revenue 90 256 426 90 233 730 22 696 0.03%

Other income 7 203 610 7 442 857 -239 247 -3%

Total Revenue 97 460 036 97 676 587 -216 551 0%

         

Operating expenses -14 102 147 -22 495 873 8 393 726 37%Employee related costs -15 498 616 -17 554 779 2 056 163 12%

Debt impairment -48 004 073 -8 324 936 -39 679 137 -477%Total Operating expenses -77 604 836 -48 375 588 -29 229 248 -60%

         

Operating surplus 19 855 200 49 300 999 -29 445 799 60%

Investment revenue 102 505 118 005 -15 500 -13%

Finance costs -229 0 229 Surplus for the period 19 957 476 49 419 004 29 461 528 -60%

FINANCIAL ANALYSISPRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

VARIANCE ANALYSIS

• Revenue billing on budget at R97.4m, despite penalties and interest not billed

• Operating expenses below target, as result of deferral of planned activities

• Debt impairment is above budget by 477%, due to provisions of bad debt in light of court case

• Debt impairment is due to members of SIA who are paying in terms of old annual fee rates, (on a monthly basis)

• The payment by SIA is in terms of Court Interdict

• Revenue exceeded expenditure by R19.9m

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FINANCIAL ANALYSISPRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

FORECAST

• Debt impairment will reduce over the course of year, from R48m to R33.7m

• As a result of payments to be received on a monthly basis

• Revenue is estimated to be below budget by 4%, largely ascribed to penalties and interest that have been suspended

• Estimates indicate a surplus of R3.4m at year end

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CASH COLLECTIONPRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

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PART DHR Matters

PRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

Remuneration of Council

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2010  2011 2012

ChairpersonR 1,237,875 R 1,331,048 R 1,390,945

Deputy Chairperson

 R 0,00

 R 0,00 R 0,00

Council Members R 0,00 

R 0,00 R 0,00

PRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

Employee and Council numbers

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As at 31 March 2012

 

30 June 2012 Staff Movement 

Council members 3 3 0

Staff Members 214 210 -4

PRIVATE SECURITY INDUSTRY REGULATORY AUTHORITY

End

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