1. DIRCO AND ARF PERFORMANCE AND FINANCIAL REPORT Quarter 2 & 3 Presentation to Portfolio Committee 04 March 2015

2. TABLE OF CONTENTS 2 1.DIRCO reports on: 1.1 performance information Quarter 2 & 3 1.2 financial report: Quarter 2 1.3 financial report: Quarter 3 2.African Renaissance fund (ARF): Quarter 2 &3

3. Programme 1 (APP) Sub- programme Performance AreasTargets informed by Corporate Services Turnaround times for filling of vacancies, grievances SMS PMDS DPSA prescripts, 4 months for filling of vacancies Compliance & Efficiency Consular services National Treasury prescripts Vienna Convention Diplomatic Training, Research and Development Training & researchWorkplace Skills Plan (WSP) Internal AuditInternal ControlInternal Audit Framework (NT) Risk management Internal ControlNational Treasury Framework

4. Programme 1: Administration Forty five (45) vacancies filled, some within the four months turn around time, has also introduced e-recruitment to assist with the turn around times. Completed the Organisational Functional Assessment. Continued with its commitment to provide capacity building, provided seventy four (74) training programmes of which four (4) to international participants. Continued to deliver consular services including the legalization of documents. Improved the payment of suppliers with an average of 99% of suppliers paid within 30 days. Submitted the MPAT self assessment. 4 Programmes Adjusted Appropriation ProjectionActualVariance Administration1 396 255967 040 828 976 138 064

5. Programme 2: International Relations (APP) Performance IndicatorAnnual TargetAchieved by end of Q3 The performance indicator on political work to utilise the structured mechanisms (BNCs, JCCs, JNCs and others) to advance national priorities, to strengthen relations, to lobby for support for multilateral engagements and common positions 34 Structured bilateral mechanisms 65 High level visits 24 21 The performance indicator on economic diplomacy to reflect the work that missions will undertake in order to increase value added exports; attract Foreign Direct Investment to priority sector (NGP and IPAP);promote tourism; promote the removal of non tariff barriers 155 chamber of commerce 17 government ministries 17 potential investors and importers 91 35 67 5 Programmes Adjusted Appropriation ProjectionActualVariance International Relations3 054 7132 167 6742 310 985-143 311

6. Programme 2: International Relations Twenty structured bilaterals and eighteen high level visits with various countries with outcomes that includes : Commitments to strengthen cooperation with Turkey in areas of Energy; Defence; Education and skills development Agreed on Academic Cooperation (Mexico) and Action Plan for future engagements with Mexico and Canada Commitment for financial assistance in green economy, HIV Prevention, Governance Public Administration was made by Germany Explore areas for further cooperation in education, science and technology, health and arts and culture with Czech republic Intensified cooperation in mining, the blue economy, science and technology and agriculture 6

7. Programme 2: International Relations Economic diplomacy work included meetings with chamber of commerce (52), targeted government ministries(20), high-level potential investors and importers(33) which covered areas such as: technical matters impacting on the export of South African horticultural products as well as the way forward regarding South Africa’s Country of recognition Application were discussed. Discussions also centred on possible areas of cooperation w.r.t. SA’s infrastructure and development the import of South African fruit and meat as well as country-specific training in the defence area possible collaboration in areas of agriculture, food processing, aviation, transport infrastructure and science and education Engagements included the likes of Mondi, Nestle, Shell and stakeholders in the canned and frozen foods industry 7

8. Programme 3: International Cooperation (APP) Participate and play an active role in international organisations and institutions in line with South Africa’s national values and foreign policy objectives in order to influence outcomes and resolutions in order to promote an equitable and just System of Global Governance in areas such as: –Peace and security (UNSC, Disarmament, peace building) –Sustainable Development (social, economic and environment) (Climate Change issues, post - 2015 development agenda, SA member of the Economic and Social Council (ECOSOC), G20 & Commission on Population & Development) –Human Rights and Humanitarian Affairs (SA Member of UN Human Rights Council (HRC), UN High Commission for Refugees Executive Committee (UNHCREXCOM), Convention on Rights of Persons with Disabilities (UNCRPD), Sessions of the UN Commission on the Status of Women & other 8

9. Programme 3: International Cooperation Participated in UNGA elections to elect members of the principle organs and subsidiary bodies of the UN Advanced SA’ positions in the Regular Sessions of UNGA main Committees from Oct-Dec 2014 Participated in the 27 th Session of the Human Right Council in Geneva from 8-26 September 2014 -SA led budgetary negotiations on behalf of the Africa Group in COP12 and G77+China in COP 12 and COP/MOP1 -Handed over chair of the Group of like-Minded Mega bio- diverse Countries to Guatamala 9

10. Programme 3: International Cooperation Advanced SA’s position on nuclear disarmament, nuclear Non- Proliferation and peaceful uses of nuclear energy during the International Atomic Energy Agency Board of Governance (IAEA) Advanced SA’s positions in support of its domestic imperatives and regional initiatives through Contributing to the Ministerial Declaration on Sustainable Development Goals (SDGs) during the ECOSOC High-Level Segment, Annual Ministerial Review & Ministerial High- Level Political Forum 10

11. Programme 3:Continental Cooperation (APP) Participate and play active role in continental and regional structures to contribute and enhance efforts for sustainable development and peace and security With particular focus on: –Strengthening the AU and its structures –Participating in peace missions, and (Peace, Conflict, Reconstruction and Development (PCRD) initiatives –Democracy, Good Governance (APRM) & Human Rights –New Partnership for Africa’s Development (NEPAD) –Regional Integration to increase intra-Africa trade 11

12. Programme 3:Continental Cooperation Convened three national consultative sessions ( Youth; Academia and women) on AU Agenda 63: Advanced SA’s positions on B order control issues; Transnational crimes; Funding for terrorist and foreign involvement in Africa and the Establishment of specialized counter-terrorism unit in Africa at the AUPSC Summit in September 2014 SA participated in Four SADC Election Observer Missions Mozambique; Botswana; Namibia and Mauritius South Africa was elected chair of the SADC Organ on Peace, Security and Defense Cooperation during the 34 th Ordinary Session of the SADC Summit held in August 2014 12

13. Programme 3: South –South and North – South Cooperation (APP) Pursue cooperation among countries and groupings of the South and the development of common positions on political, economic, social and human rights issues and to harness emerging collective political and economic influence of countries of the South in pursuit of the Development Agenda. With particular focus on: –BRICS; IBSA – EU; TICAD 13

14. Programme 3: South –South and North – South Cooperation SA participated in the inaugural US-Africa Leaders Summit in Washington where the importance of AGOA for Africa’s development was discussed Contributed to the Ministerial declaration on special developmental needs of Africa during the negotiations of G77 Ministerial outcomes on 26 September 2014 where SA was also elected chair of G77 during the meeting Participated in the BRICS leaders Summit where the meeting agreed on the need for ratification the Agreement on the New Development Bank and the treaty on establishment of a Contingent Reserve Arrangements 14 Programmes Adjusted Appropriation ProjectionActualVariance International Cooperation512 500372 301341 70730 594

15. Programme 4: Public Diplomacy and State Protocol services (APP) Performance IndicatorAnnual TargetAchieved by end of Q3 Media briefings, statements, opinion pieces and Public participation programmes (PPP) 24 media briefings 12 PPP 11 opinion pieces 23 15 18 Protocol services for state and ceremonial events, incoming and outgoing state visits Immunities and privileges provided for the Diplomatic Corps Respond to 100% of requests Responded to 8171 requests, including requests for diplomatic accreditation and diplomatic privileges 15 Programmes Adjusted Appropriation ProjectionActualVariance Public Diplomacy and Protocol317 249265 825205 74860 077

16. Programme 4: Public Diplomacy and State Protocol services Principals held (17) Media Briefings to articulate SA’ positions on international affairs Twelve (12) Public Participation Programmes were undertaken Continue to render State Protocol services 16

17. 17 QUARTER 2 FINANCIAL REPORT

18. 18 Vote Expenditure (R’000) Programmes Voted (Main Appropriation) Quarter 2 ProjectionActualVariance Administration 1 396 255 705 923571 778134 145 International Relations 2 810 160 1 493 0351 617 324-124 289 International Cooperation 486 371 254 750242 87011 880 Public Diplomacy and Protocol 317 249 214 092138 76775 325 International Transfers 744 289 124 924145 305-20 381 Total 5 754 324 2 792 7242 716 04476 680 Economic Classification Compensation of employees2 461 835 1,334,4691,348,641-14,172 Goods and services2 120 789 1,108,4841,132,261-23,777 Transfer payments745 723 126 247149,70723 460 Payments for capital assets425 977 223,52485,434138,090 Total5 754 324 2 792 7242 716 04476 680 Expenditure/projection as % of total budget50.3%44.5%

19. Foreign exchange impact 19 Currency 2014-15 Baseline Foreign Currency 2014/15 Baseline Rand Value (Budget Rate) 2014/15 Baseline Rand Value (Average Spot Rate) Projected shortfall USD 185,073 1,732,290 2,009,900(277,611) EUR 68,261 805,481 979,546(174,066) GBP 5,771 81,949 102,783(20,835) JPY 504,923 45,443 52,307(6,864) SFR 13,411 135,861 157,198(21,337) Total 2,801,023 3,301,736(500,713)

20. Vote Expenditure continued… Total expenditure for the Department as at the end of the second quarter amounted to R2.716 billion or 44.5% of the appropriation. The main cost drivers are as follows: 1.Compensation of employees a)Cost of living allowance paid to transferred officials serving abroad and Locally Recruited Personnel salaries as well as benefits 2.Goods and Services a)Operational expenditure for missions that is operating lease paid for the provision of accommodation in terms of office, residential and staff for transferred officials abroad, education allowances in relations to transferred staff abroad. 20

21. Vote Expenditure continued… 3.Transfers and Subsidies a)Recapitalisation of the African Renaissance and International Cooperation Fund b)Assessed membership contributions to international organisations which are US dollar denominated namely; I.African Union II.United Nations III.Southern African Development Community IV.Commonwealth 21

22. Foreign exchange impact continued… 1.The department projects a shortfall amounting to R500 million based on the prevailing rates due to the depreciation of the rand against other major currencies on expenditure incurred in foreign currency in missions abroad as well as transfer payments to international organisations. 2.This imposes a major risk with regard to the management of the department’s budget, as the Department has no control over the fluctuation of both Rand against major foreign currencies as well as local currencies against major currencies. It also poses reputational risk to the department and the country. 22

23. 23 QUARTER 3 FINANCIAL REPORT

24. 24 Vote Expenditure per programme (R’000) Programmes Main Appropriation Adjustments Adjusted Appropriation Quarter 3 ProjectionActualVariance Administration 1 396 255 - 967 040 828 976 138 064 International Relations 2 810 160 244 553 3 054 713 2 167 674 2 310 985 -143 311 International Cooperation 486 371 26 129 512 500 372 301 341 707 30 594 Public Diplomacy and Protocol 317 249 - 265 825 205 748 60 077 International Transfers 744 289 79 318 823 607 206 339 196 545 9 794 Total 5 754 324 350 000 6 104 324 3 979 1793 883 96195 218 Economic Classification Compensation of employees 2 461 835119 9642 581 799 1,933,4391,977,615 -44,176 Goods and services 2 120 789150 7182 271 507 1,505,3421,638,333 -132,991 Transfer payments 745 72379 318825 041 207 764200,346 7 418 Payments for capital assets 425 977 332,63467,666 264,968 Total 5 754 324350 0006 104 324 3 979 1793 883 96195 218 Expenditure/projection as % of total budget71.4%63.6%

25. Foreign exchange impact continued… Currency 2014-15 Baseline Foreign Currency R’000 2014/15 Baseline Rand Value (Budget Rate) R’000 2014/15 Baseline Rand Value (Average Spot Rate) R’000 Projected shortfall R’000 USD 169,074 1,582,530 1,930,821(348,292) EUR 65,536 773,325 923,403(150,078) GBP 5,738 81,485 103,132(21,647) JPY 476,725 42,905 45,851(2,946) SFR 13,179 133,502 155,179(21,677) Total 2,613,747 3,158,386 (544,639) Less additional funding received during AENE 350,000 Projected shortfall as at financial year end (194,639) 25

26. Projected expenditure for the year Economic ClassificationVote Appropriation Projected Total expenditure as at year end Variance % of spending to Appropriation Administration1 419 569 0100.0% International Relations3 051 071 3 177 785 -126 714104.2% International Cooperation504 400 524 305 -19 905103.9% Public Diplomacy and Protocol 309 297 0100.0% International Transfers819 987 868 396 -48 409105.9% Total6 104 324 6 299 352 -195 028103.2% Economic Classification Compensation of employees2 581 799 2 686 692 -104 893104.1% Goods and services2 418 455 2 460 181 -41 725101.8% Transfer payments830 093 878 502 -48 409105.6% Payments for capital assets273 977 0100.0% Total6 104 324 6 299 352 -195 028103.2% Projected Expenditure as % of total budget 103% 26

27. The department projects to spend all it budget however the projections are showing that the department will have budget shortfall of R195 million by the end of financial year due to foreign exchange loss. The National Treasury has been informed of the projected budget shortfall as result of the exchange. 27 Projected expenditure for the year

28. The Asset portfolio of the Department consists of the following: Immovable assets: Consist of Chanceries (Offices), Official Residences and staff accommodation Movable assets – Major (economic value over R5000): Consist of motor vehicle, office and domestic furniture, office and domestic equipment Movable assets – Minor (economic value less than R5000): Consist of office and domestic furniture, office and domestic equipment, audio visual and gardening equipment. Intangible Assets – Consist of software applications and patent. 28

29. The Asset portfolio of the Department consists of the following: Description Total Number of Assets Total Number of Locations Total Number of Custodians Total value R ’million Immovable1359475 5 126 Movable: Major21 8105 1753 122 667 Intangible4443 27 Movable: minor145 9128 1784 347 131 Grand Total167 90113 4517 547 5 952 29

30. 1. MANAGEMENT OF ASSETS Recurring Findings: Existence: Assets not physically verifiable. Completeness: Assets not recorded in the fixed asset register. 30

31. 1. MANAGEMENT OF ASSETS Measures implemented: a)The department set up an oversight task team consisting of 3 audit committee members, CFO and senior managers from Financial and Supply Chain Management. b)Developed turn around strategy on assets management c)Review the asset procedure manual d)Conducted three days workshop with Corporate Service Managers(Heads of Administration at missions) e)Appointment of asset controllers at Head Office. f)Enforced the verification of assets using a scanning device (HARDCAT) g)Introduced consequence management letters. h)Quality assurance teams were sent to missions identified as high risk and non preforming. i)Decentralisation of functions of asset register maintenance. 31

32. STATUS OF ASSETS PHYSICAL VERIFICATION Summary: Verification of Assets as at end of December 2014 Presentation per region Total Asset Verified from April 2014Not Verified%scanned Asia and Middle East 30 514 29 617 89797,06% Americas 19 913 19 701 21298,94% Europe 41 241 40 693 54898,67% Africa 53 814 51 058 2 75694,88% Total 145 482 141 069 4 41396,97% 32

33. African Renaissance Fund (ARF) 33

34. 34 ARF Performance report Performance indicatorsAnnual Target ACTUAL PERFORMANCE AGAINST TARGETS Percentage of requests responded to for the quality assurance and review of project proposals in preparation for the ARF Board meetings 100% of requests received responded to timeously as per objectives of the project plan. Five (5) Project Proposals processed for ARF Board meetings. Number of ARF structures and processes convened to identify and recommend projects in compliance with the ARF Act, 2000 and PFMA, 1999 Four Advisory Committee meetings to consider project proposals for recommendation Two meetings were held, one scheduled and one ad hoc Democracy and good governance 100% of approved disbursement to support democracy and good governance processed 100% of approved disbursement to support democracy and good governance processed

35. 35 ARF Performance report Performance indicatorsAnnual Target ACTUAL PERFORMANCE AGAINST TARGETS Humanitarian assistance 100% of approved disbursement for humanitarian assistance processed 100% of approved disbursement for humanitarian assistance processed Capacity-building 100% of approved disbursement to support capacity-building processed 100% of approved disbursement to support capacity-building processed

36. 36 ARF Financial report R'000 Accumulated surplus1 864 871 Appropriated funds277 560 Committed funds – existing projects581 372 Approved Grants for disbursement for Q2 and Q3 189 900 Available funds1 371 159

37. ARF Financial report 2014/15 Approved projects are as following projects: (a) Humanitarian assistance to South Sudan (R15 million); (b) Humanitarian assistance for drought relief in Namibia (R100 million); (c) Humanitarian assistance to Palestine women and children (R11, 2 million); 37

38. ARF Financial report (d) Humanitarian Assistance for Ebola virus disease outbreak in West Africa and other African countries (R32,5 million); (e) South Africa’s pledge to the African-led International Support Mission to the Central African Republic (MISCA) (R11, 2 million; 38

39. ARF Financial report (f) South Africa’s additional assessed membership contribution (R17 million) (g) SA’s Mediation support to Kingdom of Lesotho peace process (R3 million); and (h) South Africa’s participation in AU/SADC led Election Observation Missions (R13, million) 39

40. PROGRESS ON ACTION PLAN 40 The Accounting Officer shall ensure that risk assessment is regularly conducted to identify emerging risks. A risk management plan and fraud management plan shall be prepared and included in the annual performance plan. The risk assessment on the second quarter The risk and fraud management have been developed and adopted in February 2013 The Accounting Officer shall ensure that the Advisory Committee and Secretariat develops and implement the Terms of Reference applicable to them. Terms of reference for Advisory Committee as well as Secretariat have been adopted in the second quarter. The Fund shall share the internal audit services and Audit Committee of the Department. The Accounting officer appointed the audit and risk committees. Internal audit ahs developed and implemented an audit strategy for the Fund.

41. PROGRESS ON ACTION PLAN 41 Lack of policies and proceduresDeveloped an operational framework and adopted DIRCO policies and procedures relevant to ARF. Inadequate monitoring and evaluation Appointed full time secretariat for a period of six months as part of the transitional arrangements. Non compliance with the relevant prescripts Tabled the Strategic Plan 2014-2017 and the Annual Performance Plan 2014-2015

42. 42 THANK YOU