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QUARTERLY EXPENDITURE ANALYSIS FOR THE DEPARTMENT OF LABOUR 2013/14-2014/15

PRESENTED BY:

Musa Zamisa

Phelelani Dlomo

15 OCTOBER 2014

• Introduction• Overall Expenditure 2013/14

• Trends for 2013/14 quarterly expenditure Q1: Expenditure Analysis Q2: Expenditure Analysis Q3: Expenditure Analysis Q4: Expenditure Analysis

• Trends of the 2014/15 first quarter expenditure Q1: Expenditure analysis 2014/15

• Performance achieved vs budget spent in 2013/14

• Implications of non payment of invoices within 30 days1

PRESENTATION LAYOUT

OVERALL ALLOCATIONS FOR 2013/14

The Department was allocated R2.4 billion for 2013/14 financial year,

This represents a nominal increase of R275.7 million, or 12.9 per cent, from R2.1 billion in 2012/13,

The Allocations to specific categories in Q1 of 2013/14:

• R818 million on transfers and subsidies,

• R1.6 billion for operations,

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•An amount of R780.6 million was projected to be spent

•An amount of R630 million was spent

•The reported under expenditure amounted to R150.7 million

FIRST QUARTER EXP. FOR 2013/14

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• Delays in obtaining invoices from external service providers such as Travel with Flair,

• Delays in the filling of budgeted vacant positions,

• The National Treasury raised an issue around this since May 2013

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Q1: REASONS FOR UNDER EXPENDITURE 2013/14

WHAT ARE THE IMPLICATIONS OF NON PAYMENT OF INVOICES WITHIN 30 DAYS?

Q2: QUARTER EXPENDITURE 2013/14

•R1.2 billion was projected to be spent•Only spent R1.1 billion, •R100 million remained unspent,

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Q2: REASONS FOR UNDER EXPENDITURE

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• Delays in filling vacant posts,• Delays in obtaining invoices for Travel with Flair, and

office leases,• National Treasury raised an issue with the

Department since May 2013

WHAT ARE THE IMPLICATIONS FOR THE NON PAYMENT OF INVOICES WITHIN 30 DAYS?

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UNDEREXPENDITURE

FINAL EXPENDITURE

FINAL APPROPRIATION

OVERALL PICTURE FOR 2013/14

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Third Quarter Expenditure Highlights

Total spending 75.8 %

Compensation of Employees 73.5%

Goods & Services 53.8%

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Main issuesUnfilled VacanciesLate receipt of invoices from Travel & Fair

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Programme 1 (Administration) unfilled vacancies Late receipt of invoices from DPW for leases for office buildings

Programme 2 (Inspection and Enforcement Services) Unfilled vacancies Less than anticipated orders processed for the procurement of IT and

office equipment

Programme 4 (Labour Policy and industrial Relations) Unfilled vacancies Less than anticipated orders processed for the procurement of IT and

office equipment

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REASONS FOR UNDERSPENDING

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• The unfilled funded vacant posts

• Delays in the payment for lease

• Delays in the payment of invoices

• Including past financial year outstanding

• The National Treasury raised a concern.

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Q1: Reasons for under Expenditure 2014/15

WHAT ARE THE IMPLICATIONS FOR THE NON PAYMENT OF INVOICES WITHIN 30 DAYS?

Figure: 1 Personnel Budgets Vs Payment for Capital Assets

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The Implications for non payment of invoices within 30 days

The payment of suppliers within 30 days is a requirement of the PFMA in terms of section 38 (1) (f) and Treasury Regulation section 8.2.3 which respectively. It stipulate the following:

•An accounting officer of the department must settle all contractual obligations and pay all money owing including intergovernmental claims, within the prescribed or agreed period. •An accounting officer must ensure that all payments due to creditors are settled within 30 days from receipt of an invoice or, in the case of civil claims, from the date of settlement or court judgement.

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• The late or non-payment of suppliers is seriously impacting in the sustainability of the SMME’s.

• Ultimately affect the local economic development. • Does not assist in the fight against poverty, inequality and

unemployment.

Financial misconduct: • Section 81 of the PFMA which stipulates, the failure to

comply with 38,39,40,41 or 42 constitutes a financial misconduct and can lead to criminal offence,

• Disciplinary action being taken against the accounting officer who fails to implement section 38

Implications Cont……………..

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TABLE 1: PERFORMANCE TARGETS ACHIEVED VS BUDGET SPENT

PROGRAMME TARGETSPLANNED

TARGETS ACHIEVED

BUDGET ALLOCATION

BUDGET SPENT

PERCENTAGE- SPENT (%)

ADMINISTRATION25 18 (72%) R840.4 R795.8 94.7%

INSPECTION AND ENFORCEMENT 17 12 (70.5%) R426.8 R412.2 96.6%

PUBLIC EMPLOYMENT 14 13 (92%) R413.4 R413.4 100%

LABOUR POLICY AND INDUSTRIAL RELATIONS 24 16 (67%) R594.4 R594.0 100%

TOTAL 80 (100%) 59 (75%) 2 445.2 R2 371.4 97%

Thank you !!!!!!!

Siyabonga !!!!!!!!

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THE END!!!!!