1. Finance & Human Resources
Presentation to the Portfolio Committee on Economic Development
15 October 2015
Tabled at the Portfolio Committee

2. HR Overview
Key to success in delivering on the Department’s objectives has been ensuring appropriate human resources.
The Department implemented a new staffing model that permitted mobilisation of resources as required using permanent appointments, contracts and part-time appointments, secondments of staff and using staff employed by other agencies.
These measures have enabled the Department to deliver on its Strategic Objectives through responsive and appropriately resourced project teams.

3. Performance Overview
The Department met all its targets and exceeded its targets for 50% of the indicators included in its Annual Performance Plan.

4. Financial Performance Overview
For the year under review the department spent 99.72% (ie. under spending of 0.28%) and obtained an unqualified audit opinion

5. Financial Performance Overview
In their report The Financial and Fiscal Commission stated the following:-
“Spending performance across major programmes has improved
In 2014/15, all programmes achieved almost 100% expenditure against budget
Review to organizational structure has seen significant drop in underspending – in 2014/15, this amounted to 0.3% of the total budget
No roll-overs requested in 2014/15, signaling improved efficiency in planning, budgeting and implementing budget programs.”

6. Financial Performance per Programme
Programmes
2014/15
2013/14
Annual Budget
Expenditure
Variance
R'000 %
Administration
88 076
87 419
657
0.75%
91 342
91 301 41
0.04%
Economic Policy Development
12 834
12 775 59
0.46%
23 891
23 886 5
0.02%
Economic Planning and Coordination
1 048
0.18% 4 0%
Economic Development and Dialogue
9 450
9 267
183
1.94%
11 718
11 697 21
Total
1 948
0.28% 71
0.01%

7. Year on Year Performance per Programme
Programmes
2014/15
2013/14
Variance
Administration
99.25%
99.96%
-0.71%
Economic Policy Development
99.54%
99.98%
-0.44%
Economic Planning and Coordination
99.82%
100.0%
-0.18%
Economic Development and Dialogue
98.06%
-1.76%
Total
99.72%
99.99%
-0.27%
Total (R’000)

8. Financial Performance per Economic Classification
Programmes
2014/15
2013/14
Annual Budget
Expenditure
Variance
R'000 %
Compensation of employees
76 561
75 688
872
0.04%
70 948
70 922 26
Goods & services
41 590
40 567
1 024
0.06%
66 276
65 872
404
0.61%
Departmental agencies 0%
Public corporations
Non-profit institutions 60
Households
220
219
0.8%
499
495 4
Payments for capital assets
2 764
2 712 52
0.05%
6 134
6 497
-363
-5.60%
Payments for financial assets 27
Totals
1 948
0.28% 71
0.01%

9. Financial Performance per Economic Classification
Programmes
2014/15
2013/14
Variance
Compensation of Employees
98.86%
99.96%
-1.1%
Goods & services
97.54%
99.94%
-2.4%
Departmental Agencies
100 .0% 0%
Public Corporations
100.0%
Non-profit institutions
-100%
Households
99.20%
0.8%
Payment for capital assets
98.12%
99.95%
-1.83%
Totals
99.72%
99.99%
-0.27%

10. Comparison of spending Year on Year
Year on year decrease in expenditure was mainly due to:
Decrease in the annual appropriation of the vote by R75m which was made up of reductions:
Goods and Services of R25m
Transfers to agencies of R52m
Reduction in the advertisement, legal costs and travel and mainly implementing the cost containment measures
Fewer assets purchased and there were no software purchases.

11. Overall Performance for 2014/15
KPIs
Total Number of KPIs 22
KPI’s with targets exceeded 11
KPI’s with targets met
R’000
Budget
Expenditure
Under spending
1 948

12. Performance for the 2014/15 - Programme 1
Budget
88 076
Expenditure
87 419
Under spending
657

13. Performance for the 2014/15 - Programme 2
KPIs
Total Number of KPIs 4
KPIs with targets Exceeded 2
KPI’s with targets met
R’000
Budget
12 834
Expenditure
12 775
Under spending 59

14. Performance for the 2014/15 – Programme 3
KPIs
Total Number of KPIs 13
KPIs with targets Exceeded 8
KPI’s with targets met 5
R’000
Budget
Expenditure
Under spending
1 048

15. Performance for the 2014/15 – Programme 4
KPIs
Total Number of KPIs 5
KPIs with targets Exceeded 1
KPI’s with targets met 4
R’000
Budget
9 450
Expenditure
9 267
Under spending
183

16. Transfers to Entities Description 2014/15 2013/14 R'000
Industrial Development Corporation
Industrial Development Corporation: Sefa
Competition Commission
Competition Tribunal
19 911
16 945
International Trade Administration Commission
88 374
79 770
 Total
For the financial year under review 83% of the budget was transferred to the department’s entities.

17. Revenue Performance Description 2014/15 2013/14 R'000
Sales of goods and services other than capital assets 85 23
Fines, penalties and forfeits
Interest, dividends and rent on land
50 237
50 229
Transactions in financial assets and liabilities 45
9 836
Total
50 367
60 088
EDD no longer reports on penalties collected by the Competition Commission in line with reporting requirements reflected in the Accounting Manual issued by OAG.
In 2014/15 R880 million was received from Competition Commission for fines and penalties imposed by the Competition Tribunal which is no longer recognised as Departmental Revenue. This was paid to the National Revenue Fund.
In 2013/14 R1,098 billion was received and paid over to National Revenue Fund.
Dividends are received from Industrial Development Corporation

18. HR Information Number of posts on approved establishment 164
Number of funded posts
149
Number of posts filled (incl. additional to the establishment)
124
Staff utilised not on EDD establishment 79
As a result of the October 2014 Medium Term Budget Policy Statement (MTBPS), which gave effect to the Cabinet decision to reduce allocations for compensation of employees across government, the EDD’s funded posts were reduced to 149.
The EDD had the ratio of employing women in senior management positions at 54% for the 2014/15 financial year.
19 interns were in the employ of the EDD during the 2014/15 financial year
The Department employs staff on a permanent basis, as well as through fixed term contracts for specific projects and secondments to access specific scarce skills and knowledge in relation to, for example, the PICC technical unit,. wherein an additional 79 staff from various government entities were utilised at no cost to the Department.

19. Auditor–General Report
Audit Outcome
The department obtained an unqualified audit opinion.
One non-compliance matter regarding verification of employees was reported as this was not finalised prior to employees taking office. These were however completed prior to the audit.
Improved management report - less findings compared to the last financial years.
No material misstatements
Positive conclusion on performance information
The management report issued by the Auditor-General for the 2014/15 financial year reflected 25 findings compared to 41 findings in the 2013/14 financial year.

20. Outcomes of Auditor–General Report
Area of responsibility
No. of Findings %
Matters Affecting the Audit
Human Resources Management 11
44% 1
100%
Financial Accounting 8
32% 0%
Supply Chain Management 3
12%
Information Technology
Totals 25

21. Commitments on addressing Audit Issues
A consolidated ‘heatmap’ to rectify the audit findings has been compiled, which reflects responsible persons and timeframes to rectify each finding
In the Heatmap process, specific attention is given to the priority areas of the AG findings but most importantly repeat findings around human resource management matters
‘Heatmap’ mitigation plans are being monitored every second Friday at the progress meetings, attended by the process owners & chaired by the CFO. Internal Audit attends these meetings and will audit the corrective measures that have been implemented as part of the audit coverage plan
Progress reports on the implementation of corrective measures are presented to the Audit Committee, DG and Manco.

22. Conclusion
During the past administration, the EDD developed the administrative structures and reviewed policies required to live up to its responsibilities in terms of government policy while complying with governance requirements.
The Department has consistently achieved unqualified audit opinions, achieved most of its annual targets and spent almost all of its annual allocated budget.
The EDD will also commission work to be done through public institutions and universities, where appropriate, based on Memoranda of Understanding ( MOUs).
These projects will source additional intellectual expertise to supplement the role of the EDD staff.

23. THANK YOU
SIYABONGA