1. VOTE 30: ENVIRONMENTAL AFFAIRS Portfolio Committee Briefing Annual Financial Statements for the year ended 31 March 2014 1 Ms Nosipho Ngcaba Director General Department of Environmental Affairs 14-16 October 2014 -tbc

2. Presentation Outline -Expenditure per programme -Expenditure per economical classification -Transfers to Public Entities and other Agencies -Expanded Public Works Programmes & Projects -Donor Funding -30 Days Payment Report -Auditor- General report 2

3. Expenditure for the 2013/14 Financial Year per Programme ProgrammeFinal appropriation R’000 Actual Expenditure R’000 Expenditure as % of final appropriation Variance R’000 1. Administration767 018765 02699.7%1 992 2. Legal, Authorisations and Compliance104 258102 93498.7%1 324 3. Oceans and Coasts326 814326 08899.8%726 4. Climate Change and Air Quality229 760 100.0%- 5. Biodiversity and Conservation565 662 100.0%- 6. Environmental Programmes3 138 885 100.0%- 7. Chemicals and Waste Management74 44573 11398.2%1 332 Total5 206 8425 200 30799.9%6 535 3

4. Expenditure per Economical Classification Economical classificationFinal appropriation R’000 Actual Expenditure R’000 Balance Surrendered R’000 Note Current Payments1 537 3201 532 2265 094 - Compensation of employees - Goods and services 662 324 874 996 659 222 873 004 3 102 1 992 1212 Transfers and Subsidies3 447 7473 446 3061 441 Provinces and Municipalities Departmental agencies and accounts Foreign Governments Non-Profit Organisations Public Corporations: DBSA: Green Fund Expanded Public Works Projects Other transfers 14 1 133 710 12 890 1 517 250 000 2 046 554 3 062 14 1 133 430 12 890 1 517 250 000 2 045 393 3 062 - 280 - 1 161 - 3434 Payment for capital assets*221 619 - PPP payment for the new building PPP IT infrastructure new building Machinery, computers, office, laboratories equipment,& financial assets 146 000 27 582 48 037 146 000 27 582 48 037 ------ o/w payments for financial assets156 - Total5 206 8425 200 3076 535 5 Funds surrendered to National Treasury -Note 1: vacant posts not filled during the review of the establishment -Note 3: Saving on National Regulator for -Note 2: Savings from goods & services Compulsory Standards transfer -Note4: Saving on Expanded Public Works Projects

5. Detail Current Expenditure * Goods and services2013/14 R’000 2012/13 R’000 Consultants, contractors and agency/ outsourced services - Project Management cost, Smit Amandla operating and maintenance cost and professional fees. (Annexure A) Travel and subsistence. (Annexure B) Venues and facilities Other operating expenditure (refer to next slide)* Operating leases – Accommodation charges and operating lease payments. Inventory – herbicides, research supplies, oil & gas, food supplies Computer services - External computer services, software license and operational systems. Advertising – Media coverage services, recruitment, tenders Owned and leasehold property - Renovations for the previous financial year (Fedsure forum- Pretoria and Waterfront building) Communications – (Radio, TV transmission, National People's and Parks conference) Training and staff development (courses & workshops) Audit cost – External and Forensic investigations Catering Assets less than R5 000 Bursaries employees Rental and hiring Administrative fees (Registration, bank charges, management and handling fees) Entertainment - Meetings with external and internal stakeholders. Transport provided as part of the departmental activities. Fleet services 357 882 141 279 38 969 58 201 66 678 62 796 52 693 27 264 15 991 17 385 12 483 8 077 4 022 2 518 1 740 3 058 1 608 311 34 15 340 382 142 283 30 219 57 484 67 488 59 893 36 068 26 820 21 745 16 590 7 368 5 718 4 071 3 989 1 680 1 675 1 139 232 62 10 Total873 004824 916

6. Notes on goods & services ItemDescriptionVariance R’000 Consultants, contractors and agency/ outsourced services Increase Increased operation and manning cost for the SA Agulhas and Algoa Vessels 17 500 Operating leasesDecrease Additional rental/ accommodation charges in respect of the NRM regional offices and operating lease payments. 5 754 Computer services -Increase The support and maintenance for Working for Water and Fire Information Management System, Premium support and 2nd year Enterprise Agreement with Microsoft via SITA New departmental building expenditure 16 625 6

7. Detail Other Operating Expenditure * NotesExpenditure Other operating expenditure * 2013/14 R’000 2012/13 R’000 Air charter services & landing rights Professional bodies, membership and subscription fees* Printing & publications services Resettlement costs Harbour, dock fees Courier & Delivery services Other operating expenditure Freight services transport goods 28 356 18 448 5 602 3 033 649 1 087 916 110 30 866 14 598 5 513 1 690 1 434 1 206 1 200 977 Total58 20157 484 7 * Refer following slides

8. Payment for Professional bodies, membership and subscription fees* (R18 448) Benguela Current Commission (BCC) Intergovernmental Science –Policy Platform on Biodiversity & Ecosystem Services (IPBES) Commission for the Conservation of Antarctic Marine Living Resources(CCAMLR) African Institute for Environmentally Sound Management of Hazardous & other waste (AIESMH &W) United Nations Environment Programme (UNEP) Environmental Assessment Practitioners (EAP’s) Interim Certification Board (ICB) Environmental Systems Research Institute South Africa (ESRI) Enterprise Licence Agreement 8

9. Allocation to Public Entities and Own Revenue for the year ended 31 st March 2014 RevenueSANParks R’000 SANBI R’000 SAWS R’000 ISWP R’000 TOTAL Total Allocation544 264264 254182 943125 5801 117 041 DEA Operational Infrastructure Grant 237 421 306 843 208 684 55 570 162 943 20 000 28 790 96 790 637 838 479 203 Transfers from other departments/institutions, EPWP) 399 377251 8175 06710 205666 466 Total Transferred943 641516 071188 010135 7851 783 507 Revenue1 280 37660 443109 23314 6461 464 698 Revenue from operating activities/Admission fees/Aviation income/Park revenue Other income Sales Investment income Donations Fair value gain Non-regulated commercial income Penalties 1 200 012 20 169 33 529 21 275 5 391 - 36 735 14 304 1 871 6 522 171 840 - 81 952 898 - 4 616 5 520 - 16 247 - 11 902 2 039 - 675 10 - 20 1 330 601 37 410 35 400 33 088 11 092 840 16 247 20 Sub-total2 224 017576 514297 243150 4313 248 205 Deferred grant /transfers-(45 454)38 654(64 229)(71 028) Total revenue2 224 017531 060335 89886 2023 177 177

10. Public Entities Revenue and Expenditure for the year ended 31 st March 2014 ExpenditureSANParks R’000 SANBI R’000 SAWS R’000 iSimangaliso R’000 Total revenue per annual financial statements (2 224 017)(531 060)(335 898)(86 202) Total expenditure per annual financial statements 2 183 266491 240295 734107 015 Surplus/(Deficit) per annual financial statements 40 75139 82040 164(20 813) NB: SANParks has recorded a surplus of R40,7 million as opposed to a deficit of R173 859 million due to the application of GRAP 23 whereby all revenue received for infrastructure projects were recognised for the year under review.

11. Public Entities Revenue and Expenditure for the year ended 31 st March 2014

12. SANParks R’000 SANBI R’000 SAWS R’000 iSimangaliso R’000 Surplus/(Deficit)40 75139 82040 164(20 813)* Reason R215 947 million infrastructure grant revenue recognised as satisfied obligations during the year under review as well as the security services. The subsidising of employees' post- retirement health care benefit resulted in an actuarial loss of R157 500 million. Outstanding forestry grant claim from DAFF (R19,4m) A decrease in the Defined benefit liability (R22,6m) Capitalisation of Non- current assets (R24,2m) Gains from fair value adjustment- investment property (R38,7) This property relates to the portion of the Waterkloof land earmarked for sub- leasing. The value of the land has increased from R44,5m to R83,2m. This is a non-cash loss and is largely a function of reduced recoveries from projects and an increase in operating costs such as security related to boundary integrity (R21,3m) Write-off balance of the amount due to the entity by Sanyati (R6,1m) Public Entities Surplus/ (Deficit) for the year ended 31 st March 2014

13. EntityUnqualifiedEmphasis of matter Reason/CommentsAction SANParksUnqualified None SANBIUnqualified Material under spending of the budget Material underspent on capital expenditure by R15,400 million The variance resulted from the timing differences between the transfer of funds from National Treasury and the actual spending. The Capital expenditure project are closely monitored to ensure that they are concluded on time. SAWSUnqualifiedNone iSimangalisoUnqualifiedNone Auditor-General’s Opinion on Public Entities

14. 14 Allocations & Transfers to Other Agencies DBSA Green Fund R’000 Nat. Assoc. for Clean Air (NACA) R’000 National Regulator of Compulsor y Specificati ons. R’000 Global Environm ental Fund (GEF) R’000 Buyisa- e- Bag R’000 Compen- sation Fund R’000 Donatio ns and Liences R’000 Social Benefits/ Leave gratitude R’000 TOTAL R’000 Allocated Budget 250 0001 40010 50012 8901176 169712 994284 141 Transferred(250 000)(1 400)(10 220)(12 890)(117)(6 169)(71)(2 994)(283 861) Balance--280----

15. 15 Allocations & Transfers Expanded Public Works Projects Working for Water R’000 Working for Fire R’000 Environmental Projects R’000 TOTAL R’000 Allocated Budget815 685468 139762 7302 046 554 Projects Incentives 698 852 116 833 415 296 52 843 630 512 132 218 1 744 660 301 894 Transferred(814 231)(468 418)(762 744)(2 045 393) Projects Incentives (697 398) (116 833) (415 575) (52 843) (630 528) (132 216) (1 743 501) (301 892) Balance1 454(279)(14)1 161* *Unearned Incentives to paid back to National Treasury

16. Expanded Public Works per Projects* Expenditure 2013/14 R’000 2012/13 R’000 Working for water814 230662 519 Sustainable land base livelihoods-493 290 Working for Fire468 418362 620 People and parks141 336215 748 Working for waste165 051188 069 Working for coast149 662114 448 Working for forest operations-85 359 Working for land operations91 75741 384 Beneficiary training24 01336 464 Greening & open space management118 192- Wildlife economy35 917- Youth environmental service36 817 Total2 045 393*2 199 901 16

17. Foreign Aid Assistance Donor CountryPurposeBudget Allocated R’000 Expenditure R’000 Balance R’000 United Nations on Environmental Programmes (UNEP) Convention on Climate Change & Reducing Mercury emission 9641 669(705) United States Agency for International Development (USAID) Compilation of ARID Transfrontier Projects 216 - DenmarkWaste Management Strategy01 000(1 000) GermanyClimate Change Programme & Supporting the development and implementation of access and benefit sharing policies in Africa – South Africa 1 099824275 AustraliaFunding agreement in relation to South Africa land sector measurement 1 2402 006(766) TOTAL3 5195 715(2 196) 17

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19. Departmental Expenditure Trend YearBudget R’000 Actual R’000 % Expenditure 2004/20051 652 2681 633 88298.9% 2005/20061 753 3071 746 15499.6% 2006/20072 061 8042 059 66499.9% 2007/20082 790 5212 788 75799.9% 2008/20093 206 5573 198 87899.8% 2009/20103 510 6413 503 33899.8% 2010/20112 488 5142 390 02396.0% 2011/20124 201 6164 108 54997.8% 2012/20135 175 3214 942 66195.5% 2013/20145 206 8425 200 30799.9% 19

20. Auditor-General Report on the Financial Statements Unqualified Audit (Clean audit) Unauthorized and irregular expenditure: – No irregular expenditure occurred or brought forward to the reporting year. Fruitless and wasteful expenditure – Possible fruitless expenditure from previous years project spending to the amount of R25,865 million has been disclosed. Disclosure items in the financial statements The department complied with all disclosure requirements, classifications and policy frameworks as prescribed by Treasury. However, National Treasury has exempted the department from applying Modified Cash Standards in respect of Infrastructure development projects. Transfers to agencies and other organisations All transfers made are per prior management and Treasury approval as well as within disclosure requirements. 20

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