PRESENTATION TO THE SELECT COMMITTEE ON EDUCATION & RECREATION FINANCIAL STATEMENTS Date: 9 NOVEMBER 2016 For the Active You! 1

SLOT 5: for the year ended 31 March 2016

REVENUE SRSA is amongst the non-revenue generating government departments. The revenue for the Department is mainly made up of the annual appropriation received from the National Revenue Fund. SRSA was appropriated an amount of R980 879 million for the financial year under review. SRSA also generated an amount of R406 thousand from: interest from bank account, recovery of telephone & parking expenses, and other staff debts. 3

EXPENDITURE The Department expensed almost all funds allocated in the current financial year. The amount to be surrendered is only R977 thousand of the R980 million appropriated from the Revenue Fund. The funds utilized amounts to 99,9% translating into R979 million of the allocated funds. The R977 thousand underspent was mainly in Compensation of Employees, with an amount of R521 million and R303 thousand in Transfers payments (Households) and Goods and Services. 4

EXPENDITURE (CONTINUED) The detailed breakdown of expenditure is included in the Appropriation Statement and the Notes to the Annual Financial Statements. 5

EXPENDITURE (CONTINUED) DEPARTMENT OF SPORT & RECREATION SA Final Appropriation Actual Expenditure Variance Expenditure as a % of final Appropriation R'000 % Current Expenditure Compensation of employees 94 305 93 784 521 99.4% Goods and services 167 806 165 496 2 310 98.6% Transfers and Subsidies Provinces & Municiaplities 533 225 - 100% Departmental agencies and accounts 30 363 30 344 19 99.9% Non-profit institutions 153 013 Households 2 026 (2 026) Payments for capital assets Machinery and equipment 2 167 2 014 153 92.9% 6

EXPENDITURE (CONTINUED) Expenditure is therefore broken down as follows in terms of Appropriation per Economic Classification: 1. Compensation of Employees The spending on compensation to employees is 99.4% for the year under review. This was achieved because there was a virement of R4.5 million to goods and services effected during the year. This was to enable the Department to defray over-expenditure on departmental projects. 7

EXPENDITURE (CONTINUED) 2. Goods and services The spending on Goods and Services is 98.6% for the year under review. The under-expenditure was due to bursary payments of non–employees budgeted under goods and services but expensed under Transfers and Subsidies. 8

EXPENDITURE (CONTINUED) 3. Transfers and Subsidies The spending on Transfers and Subsidies is R718 million which represent 100% of the appropriated amount, this simply means that SRSA did not under-spend on this budget item. Transfers and Subsidies was therefore broken as follows: To Provinces - R533 million which represent 75% of the Transfers and Subsidies budget To Non-Profit Institutions (Clubs and Federation) - 21% of the Transfers and Subsidies budget, which translates into R153 million To Boxing SA and South African Institute for Drug Free Sport – R30.3 million which is 4% of the Transfers and Subsidies budget. 9

EXPENDITURE (CONTINUED) 4. Payments for Capital Assets The spending on Payment for Capital Assets was 92.9% for the year under review. This represent actual expenditure of R2.014 million out of appropriated budget of R2.167 million. 10

EXPENDITURE AGAINST BUDGET 2013/14 TO 2015/16 EXPENDITURE (CONTINUED) EXPENDITURE AGAINST BUDGET 2013/14 TO 2015/16 Financial year Budget R’000 Expenditure Percent 2013/14 1 073 485 1 073 029 99.9% 2014/15 970 404 966 825 99.6% 2015/16 980 879 979 902 11

EXPENDITURE 2015/16 PER PROGRAMME EXPENDITURE (CONTINUED) EXPENDITURE 2015/16 PER PROGRAMME Per Programme Final Appropriation Actual Expenditure Variance Expenditure as a % of Final Appropriation   R'000 % Administration 114 507 114 448 59 99.9% Active Nation 652 207 652 170 37 100% Winning Nation 57 152 56 510 642 98.9% Sport Support 154 017 153 928 89 Infrastructure Support 2 996 2 846 150 95.0% 12

TRANSFER PAYMENTS Name of institution Final Appropriation R’000 Amount Transferred Provincial Conditional Grant 533 225 Boxing SA 10 468 SA Institute for Drug-Free Sport 19 816 CATHSSETA 79 60 National Federations 153 013 13

MASS PARTICIPATION PROVINCIAL ALLOCATIONS Province 2015/16 Division of Revenue Act Roll Overs Adjustments/Budget Cut Actual Transfer % of funds spent by department R’000 R'000 % Eastern Cape 61 066 - (503) 60 563 100% Free State 64 526 (128) 64 398 Gauteng 89 864 (330) 89 534 Kwa-Zulu Natal 89 191 1 435 (495) 88 696 Limpopo 63 459 (1 861) 61 598 Mpumalanga 44 039 1 027 (699) 43 340 Northern Cape 29 181 North West 40 752 6 186 (21) 40 731 Western Cape 55 216 32 (32) 55 184 537 294 8 680 (4 069) 533 225 14

FINANCIAL MANAGEMENT Challenges: There are still some gaps in the departmental Internal Control Systems, even though a lot of improvement has been experienced. Achievements : Maintenance of a clean audit Reduction of AG Findings Improvement on payment of suppliers within 30 days. 15

FINANCIAL PERFORMANCE Achievements: Unqualified opinion from AG for three (3) consecutive years No emphasis of matters reported by the AG on performance information Reduction in number of issues raised by the AG. 16

FINANCIAL PERFORMANCE (CONTINUED) AUDITOR-GENERAL’S REPORT: I have evaluated the reported performance information against the overall criteria of usefulness and reliability. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance was consistent with the planned programmes. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury’s Framework for managing programme performance information (FMPPI). 17

FINANCIAL PERFORMANCE (CONTINUED) AUDITOR-GENERAL’S REPORT: I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete. I did not identify any material findings on the usefulness and reliability of the reported performance information for the following programmes: Active Nation, Winning Nation and Sport Infrastructure Support. Opinion In my opinion, the financial statements present fairly, in all material respects, the financial position of the Department of Sport and Recreation South Africa as at 31 March 2016 and its financial performance and cash flows for the year then ended, in accordance with the Modified Cash Standards as prescribed by National Treasury and the requirements of the PFMA and DoRA. 18

WE CAN CONTINUE TO MAINTAIN THE DEPARTMENTAL CLEAN AUDIT. NOTES WORKING TOGETHER, WE CAN CONTINUE TO MAINTAIN THE DEPARTMENTAL CLEAN AUDIT. We will now take questions and advice from the Honourable Members. Thank You. Mr Alec Moemi ACCOUNTING OFFICER 19