quarterly financial performance presentation (3rd quarter ending 31 december 2011)
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QUARTERLY FINANCIAL PERFORMANCE PRESENTATION (3rd Quarter ending 31 December 2011). Presented by:Ms Yvonne Chetty Chief Financial Officer. 1 1. 3rd Quarter Performance for 2011/12 – overview 3rd Quarter Performance for 2011/12 – by Programme - PowerPoint PPT PresentationTRANSCRIPT
3/15/12
QUARTERLY FINANCIAL PERFORMANCE PRESENTATION
(3rd Quarter ending 31 December 2011)Presented by: Ms Yvonne Chetty
Chief Financial Officer
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PRESENTATION LAYOUT
• 3rd Quarter Performance for 2011/12 – overview• 3rd Quarter Performance for 2011/12 – by Programme• Budget Composition per Programme for MTEF period• Forecast report for year end 31/03/12
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3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12
Overview – Economic Classifications
Vote 29: Energy11/12 Total
BudgetR’000
YTD BudgetR’000
YTD ActualR’000
YTD Var R’000
YTD Var
%
% of Total 11/12 Budget
expended
Total Energy 6,200,909 4,938,937 4,377,030 561,907 11.4% 70.6%
Compensation of Employees
183,317 134,520 137,325 (2,805) -2.1% 74.9%
Goods & Services 148,213 117,242 108,060 9,182 7.8% 72.9%
Transfers & Subsidies 5,861,467 4,680,507 4,128,515 551,992 11.8% 70.4%
Payments for Capital Assets 7,912 6,668 3,130 3,538 53.1% 39.6%
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3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12
• As at the end of the third quarter, the Department had disbursed a total of R4.37 billion or 70.59% of the total budget allocation for the 2011/12 financial year
• This total disbursement of R4.37 billion, was R561.9 million less than the available benchmark drawing of R4.9 billion from the National Revenue Fund, mainly due to the performance within the transfer payments classification.
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3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12
TRANSFER PAYMENTS
• The Department had a total of R4.7 billion available to transfer to entities or implementing agents and an actual of R4.1 billion was transferred, resulting in a variance of R552 million.
• The under spending of R552 million is mainly due to the following:Programme 2: Energy Policy & Planning
• Transnet pipeline – R375 million for December not transferred
Programme 3: Energy Regulation• Working for Energy Project – R17.5 million below budget• EEDSM Municipalities – R61.8 million not transferred
Programme 4: National Electrification Programme• INEP Municipalities – R88.7 million not transferred
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3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12
GOODS AND SERVICES
• The results reflected within the Goods and Services’ economic classification showed a R9.1 million year-to-date under spend.
• This is mainly due to an under spending within Professional Services as a result of the delay in the implementation of the Energy modelling system.
The saving will however be re-directed to other areas of spending to provide funding for the projected over spending under programme 1 and 4.
• The YTD spending within goods and services of programme 2 is R7.55 million below budget due to an under spending, but these unspent funds will be redirected to other areas within the Department.
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MAJOR COST DRIVERS (Top 5) -GOODS AND SERVICES AS AT 31 DECEMBER 2011
Expenditure Item 2011/12 Actual
Expenses 2011/12 Budget Balance
Travel and Subsistence 29,378,507 32,360,361 2,981,854
Cons/Prof: Business & Advisory Service 22,420,072 28,727,400 6,307,328
Lease Payments 17,667,555 30,649,000 12,981,445
Operating Payments 10,984,262 11,950,423 966,161
Venues and Facilities 5,593,474 6,023,100 429,626
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3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12
CAPITAL ASSETS
• Although spending in Capital assets increased from R2.3 million in the last quarter to R3.1 million in the current quarter, this performance was still below the Department’s initial plan and resulted in an under spend of R3.5 million.
• The Department had anticipated moving to the new office accommodation by 1 April 2012. The costs associated with this move, e.g. ICT costs, were catered for within this category. The move is delayed due to the internal processes at the Department of Public works.
• The EDI-H assets were also transferred to the Department and DoE purchased lower quantities of assets than originally planned.
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FINANCIAL PERFORMANCE AS AT 31 DECEMBER 2011 – OVERVIEW BY
PROGRAMME
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Vote 29: Energy
11/12 Adjusted Budget
YTD Budget
YTD Actual Expenditure
YTD VARIANCE
YTD VARIANCE Percentage of
total 11/12 Adjusted budget
expendedR’000 R’000 R’000 R’000 %
TOTAL: Programme 6,200,909 4,938,937 4,377,030 561,907 11.4% 70.6%
Administration
198,140
146,065
150,753
(4,688) -3.2% 76.1%
Energy Policy & Planning
1,544,708
1,162,281
776,271
386,010
33.2% 50.3%
Energy Regulation
551,631
319,211
222,732
96,479
30.2% 40.4%National Electrification Programme
3,264,555
2,690,587
2,609,420
1,167 3.0% 79.9%Nuclear Energy and Regulation
641,875
620,793
617,854
2,939
0.5% 96.3%
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Programme 1: Administration
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Vote 29: Energy
11/12 Adjusted Budget
YTD Budget
YTD Actual Expenditure
YTD VARIANCE
YTD VARIANCE Percentage of
total 11/12 Adjusted budget
expendedR’000 R’000 R’000 R’000 %
198,140
146,065
150,753
(4,688)
-3.2% 76.1%
Compensation of employees
83,311
60,601
69,596
(8,995)
-14.8% 83.5%
Goods and Services
106,589
78,622
78,015
607
0.8% 73.2%
Transfers and subsidies
349
174
33
141
81.0% 9.5%Payments for Capital Assets
7,891
6,668
3,109
3,559
53.4% 39.4%
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Programme 1: Performance Overview
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• Total spent in Programme 1 is R150.7 million against a YTD budget of R146.1 million.
• The overall YTD shortfall of R4.7 million is mainly due to the overspending within the Compensation of employees classification
Compensation of Employees• A total of R69.6 million has been spent YTD from an available budget of
R60.6 million, resulting in a deficit of R9 million
• The over spending is mainly due to positions being filled additionally to the approved establishment
Transfers• Mainly due to reduced payments to departing employees – 141k
Capex• Mainly due to the relocation of the DoE to the Landbank Building – 3.5 mil
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Programme 2: Energy Policy and Planning
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Vote 29: Energy
11/12 Adjusted Budget
YTD Budget
YTD Actual Expenditure
YTD VARIANCE
YTD VARIANCE Percentage of
total 11/12 Adjusted budget
expendedR’000 R’000 R’000 R’000 %
1,544,708
1,162,281
776,271
386,010
33.2% 50.3%Compensation of employees
30,355
22,536
19,079
3,457
15.3% 62.9%
Goods and Services
14,353
14,745
7,192
7,553
51.2% 50.1%
Transfers and subsidies
1,500,000
1,125,000
750,000
375,000
33.3% 50.0%Payments for Capital Assets
-
-
-
-
- -
• Compensation of employees: Negatively affected by vacancies• Transfer payments: R375 million below budget due to the delay in disbursing the 3rd quarter
payment to Transnet in respect of the Petroleum pipelines• Goods and services: YTD spending within goods and services is R7.5 million below budget
due to an under spending in Travel & subsistence, Professional Services & Inventory: Stationery. Professional services has mainly been affected by the delay in the implementation of the Energy modelling system
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Programme 3: Energy Regulation
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Vote 29: Energy
11/12 Adjusted Budget
YTD Budget
YTD Actual Expenditure
YTD VARIANCE
YTD VARIANCE Percentage of
total 11/12 Adjusted budget
expendedR’000 R’000 R’000 R’000 R’000
551,631
319,211
222,732
96,479
30.2% 40.4%
Compensation of employees
47,232
34,797
33,323
1,474
4.2% 70.6%
Goods and Services
9,009
6,122
6,123
(1)
0.0% 68.0%
Transfers and subsidies
495,369
278,292
183,265
95,027
34.1% 37.0%
Payments for Capital Assets
21
-
21
(21)
0.0% 100.0%
• 30% overall under spent as at 31 December 2011 • Compensation of employees mainly due to vacancies• The under spending is mainly within the Transfer payments area• Transfer payments: R278.3 million was available for transfer as at the end of December and
only R183.3 million was transferred resulting in an under spending of R95 million
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Programme 3: Energy Regulation
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Transfer payments details per entity/project:
• Working for Energy: – R17.5 million below budget. A reclassification request was declined by NT
• EEDSM Municipalities: – R61.8 million not transferred the result of Municipalities not adhering to contractual obligations
• EDIH: - Core funding of R11.76 million not transferred. A submission for reclassification has been submitted to National Treasury for approval.
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Programme 4: National Electrification Programme
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Vote 29: Energy
11/12 Adjusted Budget
YTD Budget
YTD Actual Expenditure
YTD VARIANCE
YTD VARIANCE
Percentage of total 11/12
Adjusted budget
expendedR’000 R’000 R’000 R’000 %
3,264,555
2,690,587
2,609,420
81,167
3% 79.9%
Compensation of employees
14,965
11,025
10,994
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0.3% 73.5%
Goods and Services
5,305
4,533
5,220
(687)
-15.2% 98.4%
Transfers and subsidies
3,244,285
2,675,029
2,593,206
81,823
3.1% 79.9%
Payments for Capital Assets
-
- -
-
- -
• The under spending is mainly within the Transfer payments area• The major contributor is the Conditional grants payable to municipalities, R88.7 million
below the projection in terms of DORA payment schedules• The approval for the revision of the drawings schedule was received after the December
pay run. Payments in the following period to be distributed as per the revised schedule
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Programme 5: Nuclear Energy and Regulation
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Vote 29: Energy
11/12 Adjusted Budget
YTD Budget YTD Actual
Expenditure YTD
VARIANCEYTD VARIANCE
Percentage of total 11/12 Adjusted budget
expendedR’000 R’000 R’000 R’000 %
641,875
620,793
617,854
2,939
0.5% 96.3%
Compensation of employees
7,454
5,561
4,333
1,228
22.1% 58.1%
Goods and Services
12,957
13,220
11,510
1,710
12.9% 88.8%
Transfers and subsidies
621,464
602,012
602,011
1
0.0% 96.9%
Payments for Capital Assets
-
-
-
-
- -
• Total spent R617.8 million against a YTD budget of R621 million.• The 0.5% under spending is within the compensation of employees due to
vacancies and savings within goods and services mainly in the Outsourced services expenditure category
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TRANSFER PAYMENT SCHEDULE
Programme Projects & Entities 11/12 Adjusted
BudgetYTD Budget
31/12/11
YTD Actual Expenditure
31/12/11
YTD VARIANCE
31/12/11
R’000 R’000 R’000 R’000
Programme 2 Transnet Pipelines 1,500,000 1,125,000 750,000 375,000Programme 3 EEDSM - Municipalities 280,000 119,800 58,000 61,800 EEDSM – Eskom 118,800 90,000 90,000 0 REFSO 39,711 30,447 20,190 10,257 EDIH 11,758 8,820 0 8,820 WORKING FOR ENERGY
25,000 17,500 0 17,500 SANEDI 20,100 11,725 15,075 -3,350Programme 4 INEP - Municipalities 1,096,611 888,716 800,001 88,715 INEP - Eskom 1,737,813 1,426,345 1,426,345 0 INEP – Non-grid 127,861 77,968 85,860 -7,892 LOC 2010 WC 282,000 282,000 281,000 1,000Programme 5 NNR 35,430 15,978 15,977 1 NECSA 586,034 586,034 586,034 0Programme 1 Households 349 174 33 141 Total Transfers 5,861,467 4,680,507 4,128,515 551,992
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BUDGET COMPOSITION PER PROGRAMME FOR 2011/12 TO 2014/15
MTEF ALLOCATIONS
1818
2011/12 AdjustedBudgetR’000
12/13 MTEF allocation
R’000
13/14 Indicative Baseline
R’000
14/15 Indicative Baseline
R’000
Programme 6,200,909 6,805,903 6,389,935 7,008,524
Administration 198,140 181,745 184,087 193,702
Energy Policy & Planning 1,544,708 1,541,548 75,213 79,737
Energy Regulation 551,631 1,350,028 2,067,180 2,375,276
National Electrification Programme
3,264,555 3,136,294 3,410,148 3,706,096
Nuclear Energy and Regulation 641,875 596,288 563,307 653,713
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2011/12 FINANCIAL PERFORMANCE
FORECAST FOR YEAR END 31/3/12
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Vote 29: Energy Adjusted Budget
YTD Actual Expenditure
29/2/12
YTDBALANCE
29/2/12
FORECAST/COMMITMENTS
For 31 March 2012
11/12 EstimatedFinal
Balance Ref.
R’000 R’000 R’000 R’000 R’000
TOTAL: ENERGY
6,200,909
5,460,970 739,939 682,288 53,565
Compensation of employees
188,212
168,345
19,867
19,867 - {A}
Goods and Services
162,283
122,580
39,703
39,703 - {B}
Transfers and subsidies
5,841,947
5,166,840
675,107
621,542 53,565 {C}Payments for Capital Assets
8,467
3,200
5,267
5,267 - {D}Payments for Financial Assets
- 5 (5) (5) - -
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2011/12 FINANCIAL PERFORMANCE
2020
11/12 EstimatedFinal
Balance
R million
PROJECT/ENTITY
53.5
COMMENT
EDIH
10.7
The Department ‘s request for a reclassification was declined by the NT as it deviated from the Virements ceiling of 8%. The Department has submitted a deviation proposal.
2010 Local Organising Committee
1.0
Balance will be surrendered to National Treasury.
EEDSM Municipalities
27.0
Challenges being experienced with some Municipalities, one in Port Elizabeth.
INEP Municipalities
13.5
Funding challenges are being experienced by one of the service providers. The Department is exploring various mechanisms to assist this service provider in providing the services.
Households 0.3
C. Transfer Payments• The estimated balance of R53.5 million is as follows:
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Thank You!
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