1. Review of Expenditure Trends & MTEF Allocations 2010/11 – 2011/12 -2012/13 Presentation by N Ngcaba 20 April 2010 1

2. Issues for Discussion Y/Y Comparative Expenditure Patterns Review Challenges and Risks identified Baseline and MTEF Allocations Review Ratio of Goods and Services Review of Foreign Assistance and Projects Transfers to Public Entities Efficiency Models and Resourcing the Department 2

3. Comparative Expenditure Patterns per Items 2007/08 Budget 2007/08 Audited 2006/07 Budget 2006/07 Audited Compensation of Employees R’000 342 195 R’000 342 195 R’000 264 146 R’000 262 506 Goods and Services323 076321 154281 093 Other Financial Equivalents 209 203 Transfers: DEAT Agencies1 373 701 1 042 176 Transfers: Non Profit Institutions740 692740 490463 904463 627 Transfers: Foreign Governments---- Capital Asset10 348 10 0429 899 Departmental Totals2 790 5212 788 7572 061 8042 059 664 Y/Y spend99,94%99,90% 3

4. Comparative Expenditure Patterns per Items 2008/09 Budget 2008/09 Audited 2009/10 Budget 2009/10 Audited Compensation of Employees R’000 396 748 R’000 396 748 R’000 464 795 R’000 464 716 Goods and Services358 470356 441440 318434 308 Other Financial Equivalents 572 158 Transfers: DEAT Agencies1 567 303 1 672 0091 671 931 Transfers: Non Profit Institutions860 430860 395783 562782 947 Transfers: Foreign Governments9 000 Capital Asset14 0348 419140 001145 900 Departmental Totals3 206 5573 198 8783 510 6413 508 960 Y/Y spend99,76%99,95% 4

5. Challenges Identified in Expenditure Trends of +/- 99% Inflation and global economic decline has significantly affected financial resources across all Entities Baseline short funding has drastically reduced the budget margin of safety on annual bases Further short funding is anticipated in outer years Donor funds also expected to decrease therefore placing more pressure on the department to fund environmental projects and mandates More constraints anticipated in linking the MTEF to strategic plan, service delivery and structure development Possible delays in in the implementation of new or continuation of existing environmental projects DEA financial after split e.g. building, structure and systems still to be factored Less flexibility and possible delays in internal & external co-ordination of environmental mandates Audit exposures for performance Audit where funds are not available Unprecedented increase in occupancy and municipality costs 5

6. Strategic Risks Identified Risk DescriptionContributory Factor/sInherent Risk Shrinking PurseReduction of MTEF allocations (NT) leading to budget constraints 16 Insufficient Baseline allocation for operational expenditure Insufficient funds for the implementation of environmental mandates ands priorities 12 Insufficient funds for Intergovernmental Co-ordination and Integration Insufficient funds for the co- implementation of environmental sector plans and systems 9 Possible loss of opportunities and leveraging of economic development Limited developmental focus in the implementation of environmental mandate 9 Inadequate funds for internal integration Insufficient funs for organizational growth, structure funding, systems development and knowledge expansion 12 6

7. Review of Baseline Request and Allocations 2009/102010/112011/12 R’000 Departmental Baseline3 446 8603 762 6733 614 173 Requested Adjustment to Baseline 450 195621 0001 042 000 Actual Adjustment to Baseline68 340164 393581 931 Initial Total allocated (Dec 08)3 515 2003 927 0664 196 105 Further cuts January 2009(34 417)(42 990)(48 641) Final Total Allocation January 2009 3 480 7833 884 0764 147 464 % Increase to Baseline0.01%3.2%14.8% Note: 14% to the replacement of Polar Vessel – SA Agulhas 7

8. Review of MTEF 2010/11 – 2012/13 2010/112011/122012/13 R’000 Departmental Baseline3 884 0764 147 4644 345 921 Additional funds allocated to baseline88 793111 277216 645 New Building--60 000 SAWS Early Warning System and Risk Reduction--5 000 Compensation of Employees adjustment19 42822 99724 815 Earmarked EPWP Incentives65 36588 280126 830 Earmarked Climate Change Dialogue4 000-- % Baseline Increase.004%.005% 8

9. Cont… Review of MTEF 2010/11 – 2012/13 9 2010/112011/122012/13 Adjustment, Efficiency Savings and Transfers(1 363 075)(1 441 205)(1 503 837) DEA cut(3 635)(9 341)(531) SANPARKS & MLRF Retained Revenue cuts(83 914)(88 613)(94 306) Tourism Functions Transfer(1 155 108)(1 213 894)(1 273 355) Fisheries Function Transfer(122 418)(129 357)(135 645) DEA MTEF Allocation2 607 7942 817 5363 058 729

10. Ratio of Compensation to Goods and Services 2009/102010/112011/122012/13 Compensation of Employees R’000 260 293 R’000 324 869 R’000 351 536 R’000 368 862 Goods and Services388 117361 441421 135450 030 Current Ratio1 : 1,491 : 1,341 : 1,191 : 1,22 Desired Ratio including inflation adjustment1 : 1,81 : 1,91 : 2,01 : 2,2 10

11. Foreign Assistance received and Projects Finalised Donor Country2006/072007/082008/09 European Union R’000 676 R’000 0 R’000 0 UNEP001 170 UNESCO01 0920 Netherlands01 350200 Denmark14 52717 08716 267 Norway13 67225 42530 802 Flanders2 2830626 Total31 15844 95449 065 11

12. Foreign Aid Assistance CountryProject2010/112011/122012/13 R’000 Denmark Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes 1 000 Tanzania Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes 146 Kenya Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes 568 Denmark Urban Environmental Development Programme 3 3854 3265 338 World Bank African Stockpile Programme (Hazardous Waste) 1 5762 754- Total6 6758 7947 052 12

13. Transfers to Public Entities MTEF Public Entity2010/112011/122012/13 R’000 South African Weather Services135 915142 469149 671 iSimangaliso Wetland Park Authority21 36522 34723 213 South African National Parks174 718167 698183 163 South African National Biodiversity Institute141 231147 867153 347 Total473 229480 381509 395 13

14. Infrastructure Investment MTEF Sub Programme2010/112011/122012/13 R’000 South African Weather Service Infrastructure Investment Modernisation Programme 92 500 7 654 0 10 202 0000 iSimangaliso Wetland Park Authority Infrastructure Investment Duku 23 000 0 37 000 5 000 38 850 5 250 South African National Biodiversity Institute Infrastructure Investment Expansion Botanical Gardens 10 000 3 000 10 000 5 000 10 000 5 200 South African National Parks Infrastructure Development060 00063 000 Total136 154219 702122 350 14

15. Efficiency Models and Resourcing the Department Alternative funding & other ventures like co-funding are being explored by the department and its public entities for continued delivery of services Establishment and occupancy costs are being tightly monitored for their high cost nature, or exponential increase above MTEF and inflation. Timing of infrastructure and capital projects are annually monitored for inflations increases Non-priority programmes have been removed from the MTEF Strict budget and expenditure monitoring is being maintained for clean audits. 15

16. Process for MTEF linkage to Strategic Plan, Deliverables and Performance Strategic plan Medium term budget Individual performance plans Monthly/ quarterly reports 3 years Updated annually Includes budget information Year 1 Detailed focus on first year of strategic plans Includes output and service delivery information Expenditure trends 3 Year forward estimetes Strategic direction explained Previous year's outcome incorporated when deciding resource allocation Staff have performance agreements and individual development plans Linked to departmental key objectives and outputs Indicate individual contribution towards achieving departmental objectives Progress against budget and implementing strategic plans Highlights departmental performance ( financial and non-financial) against targets Environmental changes Expenditure outcomes and new budget allocations Strategic direction changes Annual review Annual reports Audit Performance against budget and strategic plan Meeting reporting requirements - Treasury and Public Service Regulations

17. Thank You 17