1. PPC PRESENTATION ON THE CHIEF FINANCIAL OFFICER’S BRANCH
2010 MTEF STRATEGIC PLAN
CHIEF FINANCIAL OFFICER’S BRANCH
16 MARCH 2010

2. Presentation Outline Introduction DME financial resources split
2010 MTEF allocation
MTEC Proposal
2010/11 allocations per programme
2010/11 allocations per economic classification
Potential challenges
Programme focus areas
Conclusion

3. Introduction
The President of the Republic announced the formation of the Department of Energy in May 2009
The Minister of the department was appointed with immediate effect
Agreement reached to split fully wef 01 April 2010 3

4. Introduction (cont..)
The agreement included retention of financial administration with the DG DMR until the end of 2009/10, as the hosting Accounting Officer
The DOE held its strategic plan during August 2009
Proposed structure was presented to the DPSA during November 2009

5. DME Financial Resources Split
Line function programmes were attached to new respective departments with their resources accordingly
Support function split ratio of 70(DMR): 30 (DOE) was proposed based on the line function personnel attached to each department
Amount transferred is approximately R75m for 2010/11 5

6. MTEC proposal
The MTEC proposal involved mainly reprioritization of funds after Treasury ruled out any possibility of new funding
An amount of R150 million was re-allocated from INEP to support services
Benefit- DOE nothing whereas DMR about R65 million
The amount was then ear-marked for transfer back to DOE as it was reprioritised from the related programmes
Treasury has already been informed formally of the decision
An agreement between the two DGs was drafted and is awaiting approval 6

7. MTEC Proposal 7 Programme 2009/10 ENE MTEC Proposal
Final Appropriation
Variance
(Fin App-Proposal)
Variance as a % of Proposal
Administration
75,5
189,5
104,2
(85,3)
(45,0)
Hydrocarbons and Energy Planning
60,5
1 555,9
1 495,4
2 471,7
Electricity, Nuclear and Clean Energy
458,0
408,8
(49,2)
(10,7)
Associated Services
3 556,0
3 378,3
3 463,8
85.5
2,5
Total
4 150,0
4 086,4
5 535,4
1 449,0
35,5 7

8. MTEC proposal 8

9. 2010 MTEF Allocation
Total allocation for DoE for 2010 is R5,535 billion
Major projects funded:
Integrated National Electrification Programme- R2,808 billion
Demand Side Management-R 329 million
Renewable Energy –R36 million
Energy modelling system –R20 million
Transnet pipeline – R1,5 billion 9

10. Medium term expenditure estimates
DOE resource plan
2009/2010
2010/2011
2011/2012
2012/2013
Programmes
Revised Estimate
Medium term expenditure estimates
MTEF Baseline
Administration
68,2
104,2
127,7
106,9
Hydrocarbons and Energy Planning
54,4
1 5558,6
1 564,4
1 571,2
Electricity, Nuclear and Clean Energy
327,5
408,8
513,7
116,5
Associated Services
3 290,1
3 463,8
3 553,6
3 744,0
Total
3 740,2
5 535,4
5 739,6
5 538,7 10

11. DOE resource plan 11

12. Medium term expenditure estimates
DOE resource plan
2009/2010
2010/2011
2011/2012
2012/2013
Programmes
Revised Estimate
Medium term expenditure estimates
MTEF Baseline
Current Payments
194,5
202,1
235,6
220,7
Transfer and Subsidies
3 543,1
5 328,7
5 499,1
5 312,8
Payments of Capital Assets
2,6
4,6
5,0
5,3
Total
3 740,2
5 535,4
5 739,6
5 538,7 12

13. DOE resource plan 13

14. Potential financial challanges
Funding of New Generation Capacity (always funded from savings)
Discontinuation of energy efficiency (demand side management) allocation on the final year of the MTEF cycle (2012/13) to be replaced by tariffs
Structure not fully funded
Universal access costs projections far above the allocated budget

15. Programme focus areas CFO Office (Programme 1)
Drive transformation policies
Educate and Communicate with Stakeholders
Implement Policies and Procedures
Develop and Review Internal Processes
Improve Turnaround Time
Implement Service Level Agreements
Improve Management and leadership Capabilities
Attract, Develop and retain Skills 15

16. Programme focus areas (cont..)
Implement Effective Systems
Promote Core Values
11. Drive Innovation
12. Align Budget to Strategy
13. Maximize Utilization of Resources
14. Manage Costs effectively
15. Promote corporate governance 16

17. Promote and transform the mineral sector
Drive transformation policies
Increase the % of procurement spend benefiting targeted groups (HDI, Women, etc)
Recruitment in line with equity targets
Educate and Communicate with Stakeholders
Conduct Supplier information sessions
Improve accessibility of procurement opportunities
Increase number of Historically Disadvantaged SA’s participation in departmental procurement 17

18. Effective and efficient service delivery
Develop, Review and Implement Policies and procedures
Conduct gap analysis on policies
Develop new policies where none exist
Review existing policies to be in line with best practice.
Develop new procedures where none is in place
Review existing procedures for alignment to revised policies
Document and streamline internal processes for efficiency 18

19. Effective and efficient service delivery (Continued…)
Improve Turnaround Times
Establish current level of compliance
Development corrective measures where there are gaps
Continuously Monitor adherence to prescribed time frames
Implement Service Level Agreements
Identify Strategic Service Providers
Sign and register SLAs with all strategic Service Providers
Monitor adherence to signed SLAs 19

20. Culture, Systems and People
Improve Management and leadership Capabilities
Create a culture and environment for Managers to complete Management Courses
Conduct 360 degree Assessments on all employees
Implement corrective measures where gaps are identified
Develop PDP for all managers (Level 9 and above) 20

21. Culture, Systems and People
Attract, Develop and retain Skills
Create a conducive working environment
Improve turnaround time for filling vacant position
Develop and implement PDPs for all employees (below level 9) 21

22. Culture, Systems and People (Continue…)
Implement Effective Systems
Increase the Availability of IT Systems
Develop and ICT user awareness strategy
Monitor and take corrective action on all ICT related complaints/incidents
Promote Core Values
Implement and monitor achievement of service delivery improvement initiatives
Identify and ensure that all key personnel are vetted.
Conduct workshops to create awareness of departmental core values 22

23. Culture, Systems and People
Improve Management and leadership
Capabilities
Create a culture and environment for Managers to complete Management Courses
Conduct 360-degree Assessments on all employees
Implement corrective measures where gaps are identified
Develop PDP for all managers (Level 9 and above) 23

24. Culture, Systems and People
Improve Management and leadership
Capabilities
Create a culture and environment for Managers to complete Management Courses
Conduct 360 degree Assessments on all employees
Implement corrective measures where gaps are identified
Develop PDP for all managers (Level 9 and above) 24

25. Culture, Systems and People
Improve Management and leadership
Capabilities
Create a culture and environment for Managers to complete Management Courses
Conduct 360 degree Assessments on all employees
Implement corrective measures where gaps are identified
Develop PDP for all managers (Level 9 and above) 25

26. Culture, Systems and People (Continue…)
Drive Innovation
Create an environment conducive to innovative thinking
Quantify the monitory value associated with new innovations 26

27. Conclusion
Phase in approach in implementation of new structure is critical in maintaining spending in line with available budget over the MTEF period
Consistency in implementation of planned activities is vital for stabilization of financial capacity of the department
Overall, available funding will be sufficient to set up and sustain the operations of the department for the foreseeable future only if the R65 million transfer from DMR is successful 27

28. The end…..
THANK YOU! 28