1. 1 Annual Report Presentation Finance Branch Presented by Mr O. Ayaya Chief Financial Officer Department: Water Affairs (DWA) 17 November 2009 1

2. 2 PRESENTATION OUTLINE Performance against priorities State of financial management systems Future performance areas Linkage of current targets with government overall aims 2

3. 3 Performance against priorities Strategic objective OutputTargetActual achievements Transformation of the state and society Risk Management Unit Established Risk Management Unit Established and Operational by October 2008 The structure has been approved but the post of the Director – Risk Management has not been filled yet. Risk Mitigation plan developed Completion and approval of a risk mitigation plan by September 2008 Risk mitigation plan and policy have been approved 3

4. 4 Performance against priorities Strategic objective OutputTargetActual achievements Transformation of the state and society Internal Audit Function Improved Three-year rolling strategic plan in line with prescripts by 30 June 2008 Three-year rolling strategic plan in line with prescripts was developed and approved by the Audit Committee. Execute 100% of rolling plan by 31 March 2009 The plan was executed and a number of projects were completed. However there are a number of projects that have not been implemented due to staff turnover including the Head of Internal Audit. A new Head of internal Audit has been appointed and projects not implemented will be incorporated in 2009/10 financial period’s plans 4

5. 5 Performance against priorities Strategic objective OutputTargetActual achievements Effective and efficient planning and budgeting processes Implementation of proper budget and expenditure control processes A list of department priorities aligned to the budget were agreed upon at top management meeting was held on 17 November 2008 2009 MTEF funds bids, reflecting priorities of the department, presented to National Treasury for funding Revenue, asset, liability and expenditure management enhanced Policies and procedures developed and implemented in line with business processes by 31 March 2009 19 policies and procedures have been reviewed and approved. 5

6. 6 Performance against priorities Strategic objective OutputTargetActual achievements Degree of reduction in audit queries Audit queries reducedProgressively milestones such as valuation of biological assets, verification and valuation of bulk infrastructure, preparation of interim financial statements, regular reconciliation and confirmation of debtor balance, etc have been achieved 6

7. 7 State of financial management systems Financial systems used  SAP- Water Trading Entity  BAS- main account  LOGIS- Procurement on Main Account 7

8. 8 State of financial management systems (Cont) Staffing  Structures for finance have been approved for both head office and regional offices  SMS and DDs in place  Regional heads of finance in place 8

9. 9 State of financial management systems (Cont) Separation of functions  Policy on linking of functions to either WTE or MEA implemented Review of delegations  Delegations have been reviewed 9

10. 10 State of financial management systems (Cont) Business processes and procedures Separation of functions Internal Audit - Key to internal control systems Establishment of a risk management Preparation of interim financial statements 10

11. 11 Future performance areas Improved revenue management Effective asset management Full compliance with SCM framework Effective Risk management Effective implementation of business processes and procedures Timeous payments to suppliers 11

12. 12 Future performance areas (Cont) Effective implementation of financial improvement plan Oversee and monitor donor funding Reporting of financial information in line with GAAP, GRAP, IFRIS and PFMA Preparation of MTEF and ENE submissions Preparation of adjustment budget and EWS Continuous evaluation and comparison of expenditure against the budget 12

13. 13 Future performance areas (Cont) Manage the bidding process Provide a reliable and relevant supplier data base 13

14. 14 Linkage of current targets with government overall aims Our Branch targets are aligned to the following government overall aims:  Strategic priority 10: Building a developmental state including improvement of public services and strengthening democratic institutions  Focus area: Improving the service delivery and quality of public services: the target is … health, water and land use management, issuing … in the Public Service.  Focus area: Improve financial management and reporting practices that entrench a culture and practice of transparency and honesty in service delivery 14

15. 15 Thank you 15