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1
Department of Economic Development,
Environmental Affairs and Tourism
VOTE NO. 9
ANNUAL REPORT
2018/2019 Financial Year
2
Contents
PART A: GENERAL INFORMATION ........................................................................................................................ 4
1. DEPARTMENT GENERAL INFORMATION .................................................................................................... 4
2. LIST OF ABBREVIATIONS/ ACRONYMS ........................................................................................................ 5
3. FOREWORD BY THE MEC ................................................................................................................................. 9
4. REPORT OF THE ACCOUNTING OFFICER .................................................................................................. 11
5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF
ACCURACY FOR THE ANNUAL REPORT .................................................................................................... 17
6. STRATEGIC OVERVIEW ................................................................................................................................... 18
6.1 VISION ............................................................................................................................................................... 18
6.2 MISSION ............................................................................................................................................................ 18
6.3 VALUES ............................................................................................................................................................. 18
7. LEGISLATIVE AND OTHER MANDATES ..................................................................................................... 18
8. ORGANISATIONAL STRUCTURE ................................................................................................................... 20
9. ENTITIES REPORTING TO THE MEC ........................................................................................................... 21
PART B: PERFORMANCE INFORMATION ............................................................................................................ 22
1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES ................................................. 23
2. OVERVIEW OF DEPARTMENTAL PERFORMANCE ............................................................................. 23
2.1 Service Delivery Environment..................................................................................................................... 23
2.2 Service Delivery Improvement Plan ............................................................................................................ 26
2.1 Main Services and Standards .................................................................................................................... 27
2.2 Batho Pele Arrangements with Beneficiaries (Consultation access etc.) ................................................. 28
2.3 Service Delivery Information Tool ............................................................................................................ 31
2.4 Organisational Environment ..................................................................................................................... 33
2.5 Key Policy Developments and Legislative Changes .................................................................................. 34
3. STRATEGIC OUTCOME ORIENTED GOALS ........................................................................................... 35
Performance Information by Programme ................................................................................................................ 37
3.1 Programme 1: Administration .................................................................................................................... 37
3.2 Programme 2: Economic Development and Tourism ................................................................................ 47
3.3 Programme 3: Environmental Affairs ......................................................................................................... 64
4. TRANSFER PAYMENTS ................................................................................................................................ 77
4.1 Transfer payments to Public Entities .......................................................................................................... 77
4.2 Transfer payments to all organisations other than public entities .............................................................. 79
5. DONOR FUNDS ............................................................................................................................................. 83
5.1 Conditional Grants ..................................................................................................................................... 83
5.2 Donor Funds Received ................................................................................................................................ 84
6. CAPITAL INVESTMENTS .............................................................................................................................. 84
6.1 Capital Investment, Maintenance and Asset Management Plan ................................................................. 84
3
PART C: GOVERNANCE............................................................................................................................................. 85
1. INTRODUCTION ............................................................................................................................................... 86
2. RISK MANAGEMENT ...................................................................................................................................... 86
3. FRAUD AND CORRUPTION ............................................................................................................................ 86
4. MINIMISING CONFLICT OF INTEREST ........................................................................................................ 86
5. CODE OF CONDUCT ........................................................................................................................................ 87
6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES .................................................................................. 87
7. PORTFOLIO COMMITTEES ............................................................................................................................ 87
8. SCOPA RESOLUTIONS .................................................................................................................................... 87
1. PROGRAMME 2: ECONOMIC DEVELOPMENT .......................................................................................... 89
2. PROGRAMME 3: ENVIRONMENTAL AFFAIRS .......................................................................................... 91
3. GENERAL FINDINGS AND GENERAL RECOMMENDATIONS ................................................................ 91
4. GENERAL RECOMMENDATIONS .................................................................................................................. 92
9. PRIOR MODIFICATION TO AUDIT REPORTS ............................................................................................. 92
10. INTERNAL CONTROL UNIT ........................................................................................................................... 92
11. INTERNAL AUDIT AND AUDIT COMMITTEES .......................................................................................... 92
12. AUDIT COMMITTEE AUTHORITY ................................................................................................................ 93
13. AUDIT COMMITTEE RESPONSIBILITIES .................................................................................................... 94
14. AUDIT COMMITTEE AND ATTENDANCE …………………………………………………………………96
15. AUDIT COMMITTEE REPORT ........................................................................................................................ 96
PART D: HUMAN RESOURCE MANAGEMENT .................................................................................................. 100
PART E: FINANCIAL INFORMATION .................................................................................................................. 125
1. REPORT OF THE AUDITOR-GENERAL TO EASTERN CAPE PROVINCIAL LEGISLATURE ON
VOTE NO. 9: DEPARTMENT OF ECONOMIC DEVELOPMENT, ENVIRONMENTAL AFFAIRS AND
TOURISM ...................................................................................................................................................... .....127
2. ANNUAL FINANCIAL STATEMENTS ........................................................................................................... 134
4
PART A: GENERAL INFORMATION
1. DEPARTMENT GENERAL INFORMATION
PHYSICAL ADDRESS:
Hockley Hill, Hockley Close
King Williams Town
Private Bag X0054
Bhisho
South Africa
5650
POSTAL ADDRESS:
Private Bag X0054
King Williams Town
5605
TELEPHONE NUMBER: (+27) 043 605 7022
FAX NUMBER: (+27) 043 605 7303
EMAIL ADDRESS: [email protected]
WEBSITE ADDRESS: www.dedea.gov.za
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2. LIST OF ABBREVIATIONS/ ACRONYMS
ADZ Aquaculture Development Zone
AEL Atmospheric Emission Licenses
AFS Annual Financial Statements
AGSA Auditor General of South Africa
AIDC Automotive Industry Development Centre
AIDF Agro Industry Development Forum
AIDS Acquired Immune Deficiency Syndrome
AIM Agro-Industrial Manufacturing Cluster
AIP Audit Intervention Plan
ANC African Nation Congress
AO Accounting Officer
APP Annual Performance Plan
AQMPs Air Quality Management Plans
BAR Basic Assessment Report
BAS Basic Accounting System
BBBEE Broad Based Black Economic Empowerment
BCMM Buffalo City Metropolitan Municipality
BEE Black Economic Empowerment
BAIC Beijing Automotive Industry Corporation
C&E Compliance and Enforcement
CAE Compliance and Enforcement
CDC Coega Development Corporation
CEOs Chief Executive Officers
CFI Capital Finance International
CFO’s Chief Financial Officers
CGEIT Certificate in the Governance of Enterprise Information Technology
CHEMIN Chemical Incubator
CISA Certified Information Systems Auditor
CITES Convention of Internationally Threatened and Endangered Species
CMT Coastal and Marine Tourism
CO2 Carbon Dioxide
COE Compensation of Employees
COGP Code of Good Practise
COGTA Department of Cooperative Governance and Traditional Affairs
CoP Conference of Parties
CSIR Council for Scientific and Industrial Research
CTA Certificate in the Theory of Accounting
DCCRS District Climate Change Response Strategy
DEA Department of Environmental Affairs
DEDEAT Department of Economic Development, Environmental Affairs and Tourism
DFI’s Development Finance Institutions
DGITO Departmental Government Information Technology Officer
DIRCO Department for International Relations and Cooperation
DLGTA Department of Local Government and Traditional Affairs
DMR Department of Mineral Resources
DPSA Department of Public Service and Administration
DPME Department of Performance Monitoring and Evaluation
DRDAR Department of Rural Development and Agrarian Reform
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DRDLR Department of Rural Development and Land Reform
DSBD Department of Small Business Development
DTI Department of Trade and Industry
EC Eastern Cape
ECAIF Eastern Cape Automotive Industry Forum
ECBCSAP Eastern Cape Disability Economic Empowerment Trust
ECCOB Eastern Cape Chamber of Commerce and Business
ECDC Eastern Cape Development Corporation
ECDEET Eastern Cape Disability Economic Empowerment Trust
ECGBB Eastern Cape Gambling and Betting Board
ECGMA Eastern Cape Game Management Association
ECITI Eastern Cape Information Technology Incubator
ECLA Eastern Cape Liquor Act
ECLB Eastern Cape Liquor Board
ECIP Eastern Cape Infrastructure Plan
ECPTA Eastern Cape Parks and Tourism Agency
ECRDA Eastern Cape Rural Development Agency
ECSECC Eastern Cape Socio Economic Consultative Council
EACS Environment and Culture Sector
EDMRS Electronic Document Management and Records System
EIA Environmental Impact Assessment
EIM Environmental Impact Management
ELIDZ East London Industrial Development Zone
EPWP Extended Public Works Programme
EQM Environmental Quality Management
ERLN Economies of Regions Learning Network
FMCMM Financial Management Capability Maturity Model
GDP Gross Domestic Product
GDPR Growth Domestic Product
GEMS Government Employees Medical Scheme
GEC Global Entrepreneurship Congress
GEN Global Entrepreneurship Network
GG Government Gazette
GIS Geographic Information System
GMC Greenest Municipality Competition
GTAC Government Technical Advisory Centre
HDIs Historically Disadvantaged Individuals
HIV Human Immune Virus/
HOD Head of Department
HR Human Resources
HRD Human Resource Development
HRPP Human Resource Practise and Planning
IA Internal Audit
ICT Information and Communication Technology
IDAM Institute for Development Assistance
IDC Industrial Development Corporation
IDZ Industrial Development Zone
IGR Inter-Governmental Relations
IOD Institute of Directors
IPAP Industrial Policy Action Plan 3
7
IPP Independent Power Producer
IWCDP Integrated Wild Coast Development Programme
IWMP Integrated Waste Management Plan
KPI Key Performance Indicator
LM Local Municipality
LNG Liquefied Natural Gas
LOGIS Local Government Information Systems
LRED Local and Regional Economic Development
MBCC Mandela Bay Composites Cluster
MBL Master of Business Leadership
MBSA Mercedes-Benz South Africa
MDA Manufacturing Development Act
MEC Member of the Executive Council
METT Management Effectiveness Tracking Tool
Min MECs Ministers and Members of Executive Council
MPAT Management Performance Assessment Tool
MPSA Minister of Public Service and Administration
MTEF Medium Term Expenditure Framework
MW Megawatts
NALSU Neil Aggett Labour Studies Unit
NAM Non-Automotive Manufacturing
NAMC National Agricultural Marketing Council
NDT National Department of Tourism
NEAS National Environmental Assessment Services
NEMA National Environmental Management Act
NHBRC National Home Builders Registration Council
NIRP National Integrated Resources Plan
NMBM Nelson Mandela Bay Municipality
NMMU Nelson Mandela Metropolitan University
OAG Office of the Accountant General
OMF Operations Management Framework
OTP Office of the Premier
PA Performance Agreement
PAIP SCOPA
PC Partially Conforms
PCMT Provincial Coordinating Management Team
PEDS Provincial Economic Development Strategy
PERSAL Personnel and Salary System
PFMA Public Finance Management Act
PIDS Provincial Industrial Development Strategy
PILIR Procedure on Incapacity Leave and Ill-Health Retirement
PMDS Performance Management and Development System
PMER Planning, Monitoring, Evaluation and Reporting
PMO Programme/Project Management Office
PoA Programme of Action
PRIME Programme for Industrial and Manufacturing Excellence
PSCBC Public Service Co-ordinating Bargaining Council
PSR Public Service Regulations
PTCC Provincial Tourism Coordination Council
QAIP Quality Assurance Improvement Program
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QERF Quarterly Economic Research Forum
QPR Quarterly Performance Reporting
RMDEC Regional Mining Development And Environmental Committee
S&T Subsistence and Travel
SAAELIP South African Atmospheric Emission Licensing and Inventory Portal
SAB South African Breweries
SALEDP South African Low Emission Development Programme
SALGA South African Local Government Association
SANRAL South African National Roads Agency Limited
SAPS South African Police Service
SCOPA Standing Committee on Public Accounts
SCM Supply Chain Management
SDIP Service Delivery Improvement Plan
SEA Strategic Environmental Assessment
SECSICOM Stakeholders in the Eastern Cape Safari Industry Committee
SEM Species and Ecosystems Management
SERO Socio-Economic Review and Outlook
SEZ Special Economic Zone
SIP3 Strategic Infrastructure Programmes
SITA State Information Technology Agency
SLAs Service Level Agreements
SMMEs Small , Medium and Micro Enterprises
SMS Senior Management Service
SO Strategic Objective
TB Tuberculosis
TGCSA Tourism Grading Council of South Africa
TIERM Technical Indicator and Evidence Reference Manual
TNPA Transnet National Ports Authority
UFH University of Fort Hare
USAID United States Agency for International Development
VW Volkswagen South Africa
WIS Waste Information System
WSP Work Skills Plan
WRT Workplace Readiness Training
9
3. FOREWORD BY THE MEC
It gives me great pleasure to present our annual performance report for the
2018/19 financial year which not only provides us with an opportunity to
reflect on the past year but also to look forward as we come towards the
closure of our five-year term. As our term is heading towards a close our
efforts to meet the targets we set for ourselves are moving into high gear.
The past years, and 2018/19 in particular, were of mixed fortunes for the
South African economy - with the economic uncertainties and ratings
agencies downgrading their forecasts, this together with the concomitant
impact on investment and job creation. Despite some trying conditions
created by the economy, drought and the political uncertainty in the
country, the Department recorded some excellent successes and many
noteworthy job creation milestones as noted in this Annual Report.
The SEZ programme performed relatively well considering the depressed economic climate. A total of 21
investments were realised with a projected investment of R3,255 billion. Through our public entities the
Department has created 19,880 job opportunities during the past year.
One of the biggest highlights is the Skills Programme, which has thus far resulted in a total of 7,916 people
trained in various sectors of the economy, which augers well for the creation of a skilled workforce to take
advantage of the many job opportunities being created.
In the sustainable energy and oil and gas space, the Department continued to be a major player in the country.
The Department championed the Eastern Cape Mini-grid Project, which is being implemented in the
Raymond Mhlaba Local Municipality, as a holistic village development concept with high quality local
energy as the backbone. This project represents a first of its kind technical and institutional model for rural
electrification.
Over the past year we have been leading and supporting a provincial natural gas economy programme which
has focussed on our readiness for the Gas to Power plant located at Coega (including technical, permitting,
logistics and market studies); support for development of, and local participation and beneficiation in, a
regional natural gas economy - particularly for a regional gas economy which allows for participation of
SMMEs and Black Industrialists; support for the National Strategic Environmental Assessment for a Natural
Gas Pipeline; and readiness for indigenous onshore gas, particularly at the local government level. This sector
will continue to receive focus in the coming year.
The Eastern Cape Province is one of the most biodiverse areas in the country. It is also home to some of the
driest areas, which makes the Province vulnerable to climate change and related issues. During the past period
the effects of climate change have been evident, with the Province experiencing a severe drought. The
increased pressure on natural resources to meet growing demand amidst these troubling times continues to be
a difficult task for the Department to plan and manage accordingly and therefore we continued to work closely
with local government. The Local Government Climate Change Response Strategies project was completed
and all the District Municipalities now have Climate Change Response Strategies which are incorporated into
their Municipal IDP’s. Capacity to implement, however, remains a challenge and this is one area in which we
will continue to provide support.
10
Our Green Scorpions continue to be champions of environmental compliance and enforcement. During the
reporting period there have been several noteworthy outcomes that included the successful conviction and
sentencing of the Ndlovu and Homela syndicates. The three Ndlovu’s were convicted of ten rhino poaching
incidents in the Province and were individually sentenced to in excess of 500 years’ imprisonment but will
each serve 25 years effectively, the equivalent of a life sentence. This was the first rhino poaching case herd in
the High Court of South Africa.
Over the year, we encountered a number of challenges which we will continue to work through, but our
number one priority in this Department, and as the Eastern Cape Provincial Government remains growing the
economy and creating more jobs, whilst ensuring at the same time that our ecological assets are preserved.
I would like to take this opportunity to thank and acknowledge the leadership of the former Executive
Authority, former MEC Lubabalo Mabuyane and the DEDEAT team, under the leadership of Mr Bongani
Gxilishe. They have done are markable job in the year under review to ensure that we are able to deliver on
this promise. I would like to express my gratitude to them for their hard work and dedication.
In terms of the requirements of Section 65(1) (a) of the Public Finance Management Act and Chapter 1, Part
III of the Public Service Regulations, do hereby table the Annual Report for the 2018/19 financial year.
_________________
The Honourable Mlungisi Mvoko (MPL)
MEC of the Department of Economic Development,
Environmental Affairs and Tourism
31 August 2019
11
4. REPORT OF THE ACCOUNTING OFFICER
Overview of the operations of the department
In pursuit of the development agenda set in the 2015 – 2019 strategic plan
of the department, a number of activities were implemented in line with
both the 2018/19 annual performance and operational plans. Summary
activity outputs of the three programmes, namely Administration,
Economic Development and Tourism, and Environmental Affairs are
reported under each of the programmes on pages 37-47, 47-64 and 64-76
respectively. No significant policy shifts were recorded during the year.
The focus has been on implementation of policies and strategies that were
developed in prior years.
The two key programmes, Economic Development and Tourism as well
as Environmental Affairs, continued to pursue their activities with vigour
with the aim of developing a sustainable development path for the Eastern
Cape. All work was aimed at job creation, SMME development, socio-
economic infrastructure development, investment promotion, tourism development & marketing as well as
sound environmental management. During the year, the economic development programme achieved 81,82%
of set targets (excluding the 3 strategic objective indicators) compared to 72,72%achieved in the previous
year. The environmental affairs programme achieved 43,75% of set targets (excluding the 2 strategic objective
indicators) versus 50%achieved during the 2017/18 financial year. Overall, the department achieved fully
62,79% of set targets (for core programmes 2 & 3 indicators) compared to 65,31%achieved in the preceding
year. Specific outputs and outcomes are outlined under each of the three programmes.
A number of activities and outputs were recorded in the year under review. While the department focused on
implementation of the new organisational structure, the entities of the department continued to perform well
with three entities (ECPTA, ELIDZ & ECGB) receiving clean audits compared to three achieved in the prior
year. Governance of the entities continue to improve with the majority of the entities having fully functional
boards. However, the public entities accountability index was slightly lower than planned at 8.9 or 89%.
Progress on the legislative front included the review of the ECDC Act.
During the year, 16 LRED projects were funded with R19,8 million. In the year before, 9 LRED projects were
funded. Over the term under review quality of applications have improved, thus improved performance on the
approved and funded enterprises. Previously funded projects were also monitored throughout the Province.
Over the year in review, the DEDEAT sustainable energy activities have focussed on support to 6sustainable
energy initiatives. The Office of the Consumer protector held 6 consumer education programmes reaching
11417 participants throughout the Province. A total of 474 complaints were received and registered on the
Electronic Case Management System of which 458 complaints were resolved leaving 44 complaints open at
the end of the Financial Year.
Through the economic research and planning unit, the department has produced 4economic intelligence
reports. The Real Investment Monitor and International Trade Tracker was also produced to track investment
trends. The department is in the process of exploring tools that can assist in identifying international trade
opportunities with the aim of supporting entrepreneurs with export development and promotion. Detailed
performance of the sub-programmes of the Economic Development and Tourism Programme is located in part
B of this annual report.
12
The environmental affairs programme is the custodian of environmental legislation in the Province. There
were challenges in reviewing municipal IDPs for environmental content since COGTA called out review
meetings late in the 4th quarter. Only one Section 24G application was finalised with a fine and a record of
decision having been made. The Environmental Impact Management finalized a total of 147 applications
within timeframes out of a total of 148meaning 99.2% were finalised during the year compared to 100%
finalised in the 2017/18year.
The department continued to host the Provincial Greenest Municipality Competition and Top Green
Organisation Awards. The top three winners for the year were Mzimvubu Local Municipality, Ndlambe Local
Municipality and Elundini Local Municipality, in that order. Participants and winners received cash prizes,
trophies, awards and certificates of participation as detailed in this report.
The Biodiversity Electronic Permit System, which was being developed from 2016/17 is still incomplete due
to delays by SITA. There are indications that the system will be completed within the first half of the 2019/20
financial year. It means the department continued to use the manual system to process biodiversity permits.
Since biodiversity permits are demand driven, fewer permits than planned were issued during the year under
review.
EPWP projects were implemented resulting in the creation of 363 jobs compared to 921created in the 2017/18
financial year. Funding constraints led to the reduction in the throughput in 2018/19. Detailed performance of
the sub-programmes of the Environmental Affairs Programme is located in part B of this annual report.
13
Overview of the financial results of the department:
Departmental receipts:
Departmental receipts
2018/2019 2017/2018
Estimate Actual
Amount
Collected
(Over)/Under
Collection
Estimate
Actual
Amount
Collected
(Over)/Under
Collection
R’000 R’000 R’000 R’000 R’000 R’000
Tax Receipts 216,210 216, 781 (571) 205,133 200,872 4,261
Casino taxes 177,359 176212 1,147 168,272 168,800 (528)
Horse racing taxes 15,421 14710 711 14,631 12,107 2,524
Liquor licences 23,430 25,859 (2,429) 22,230 19,965 2,265
Sale of goods and services
other than capital assets
1,359 1,367 (8) 1,288 1,205 83
Transfers received - - - - -
Fines, penalties and forfeits - 90 (90) - 465 (465)
Interest, dividends and rent
on land
680 384 296 646 279 367
Sale of capital assets - - - - 178 (178)
Financial transactions in
assets and liabilities
84 123 (39) 80 3,563 (3,483)
Total 218,333 218,745 (412) 207,147 206,562 585
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Programme Expenditure:
Programme Name
2018/2019 2017/2018
Final
Appropriation
Actual
Expenditure
(Over)/ Under
Expenditure
Final
Appropriation
Actual
Expenditure
(Over)/Under
Expenditure
R’000 R’000 R’000 R’000 R’000 R’000
Administration 233,580 224,888 8,691 232,790 219,921 12,869
Economic Development 606,612 598,608 8,005 587,047 569,345 17,702
Environmental Affairs 338,860 336,900 1,960 298,829 288,513 10,316
Total 1,179,052 1,160,396 18,656 1,118,666 1,077,779 40,887
Programmes Final Appropriation Actual Expenditure Variance Expenditure as % of
Final Appropriation
R’000 R’000 R’000 %
Administration
Current payments 219,722 211,494 8,228 96.3
Transfers and
subsidies
1,689 1,689 - 100
Payment for
capital assets
12,169 11,705 464 96.2
Payment of
financial
assets
- - -
Total 233,580 224,888 8,691 96.3
Economic Development
Current payments 78,445 75,246 3,199 95.9
Transfers and
subsidies
523,167 522,036 1,131 99.8
Payment for
capital assets
5,000 1,326 3,674 26.5
Total 606,612 598,608 8,005 98.7
Environmental Affairs
Current payments 97,326 95,374 1,953 98
Transfers and
subsidies
241,534 241,526 9 100
Payment for
capital assets
Total 338,860 336,900 1,960 99.4
Subtotal
Statutory Appropriation
Current payments - - - -
Transfers and
subsidies
- - - -
Payment for
capital assets
- - - -
Payment of
financial
assets
- - - -
Total - - - -
15
Goods and Services and Payment of Capital Assets
Expenditure 2018/2019
The budget allocation as adjusted for 2018/19 financial year was R1,179 million against which the
expenditure was R1,160 million, i.e. 98.4% of the budget. The spending pattern should be considered in the
context of the Departmental cost drivers, which comprises mainly transfer payments.
Approximately 60% (R703 million) of the expenditure consisted of transfers to the Departmental agencies.
The remaining funds were utilised for operational expenses. All the departmental transfer payments are
disbursed via Programme 2: Economic Development and Tourism and Programme 3: Environmental Affairs.
The total under-spending for the Department amounts to R18.6 million or 1.6% of the voted budget for the
2018/19 financial year. No requests for roll over’s were approved for the 2018/19 financial year.
Goods and Services
The under spending on goods and services is as a result of late payment of Microsoft licences. Non-payment of
SITA for departmental systems (BAS, Persal Logis and Internet) inclusive of E-Permit system for environmental
affairs programme. There was under spending on the Infrastructure projects caused by incomplete municipal housing
beneficiary list.
Transfers and subsidies Capital Payments
The Programme transfers to all six Public Entities as well as Business Enterprises funded under the LRED.
There are monitoring structures established to monitor these transfers. For the Public Entities, quarterly
performance review meetings are held to monitor progress on the achievement of set Key Performance
Indicators. This process is further enhanced with Portfolio of Evidence.
With regards to LRED transfers a total of sixteen (16) business enterprises were transferred to. Unfortunately,
additional two that qualified could not be completed due to a system failure of the Centralized Supplier
Database (CSD).
Virements/ rollovers
The Department has applied for the roll-over of funds for mainly accruals, LRED and payables, the LRED
transactions were not processed due to incomplete Centralized Supplier Database. Virements were also performed to
ECPTA for protected areas to enhance security in the reserves as part of the Rhino Poaching programmes. Lastly for
the payment of leave gratuity.
Unauthorised Expenditure
There was no unauthorised expenditure.
Future plans of the Department
The Department is fully committed to fulfilling its mandate to provide leadership for the continued
establishment of an enabling environment for economic growth, leading to increased opportunities for
prosperity for all citizens of the Eastern Cape. The Department will also continue to provide interventions
which seek to reduce red tape and support the ease of going business across South Africa.
16
Public Private Partnerships
There were no Public – Private Partnerships in 2018/19 financial year.
Discontinued activities/activities to be discontinued
There are no activities that have been discontinued and there is no intention to discontinue any services.
New or proposed activities
There are no new proposed activities with the exception of the establishment of a stimulus fund which falls under the ambit of economic development programmes.
Supply chain management
The Department continuously maintains and manages moveable assets on the system that was implemented in more than 3 financial years. The Department also disposed office furniture and computer equipment to schools and nongovernmental organisations. Year-end physical verification of all moveable assets was done. All the moveable assets acquired in the year under review have been accounted for and accurately captured on the Asset Register as per the Asset Management Framework and Public Finance Management Act.
In the 2018/19 financial year the department procured goods and services according to the approved procurement plan. Furthermore, the Department provided quarterly reports on the procurement of goods and services to Treasury as required. In addition, to ensure that the Department receives maximum value and that goods and services are delivered on time, at the right price and of the right quality and quantity, there must be a good understanding of the market. In its effort to excel in client service, the finance unit, in conjunction with the line functions has introduced strategic sourcing that is a collaborative and structured process in its procurement to realise value for money.
Moreover, in setting clear standards and ensuring compliance, the Supply Chain Management and Financial Delegations underwent its annual review with the unswerving intent to engender efficiency into processes and adequately locate accountability and responsibility of budget holders within Programmes. During the 2018/19 financial year, the Delegations of Authority was revised to ensure that processes were unhindered by structural changes. Due to these said changes, it enabled Programmes to more effectively manage, control and thereby be accountable for their budgets and to limit the risk exposure in certain areas.
Gifts and Donations received in kind from non-related parties
The department didn’t have gifts and donations in the 2018/19 financial year.
Events after the reporting date
The department has received condonation of irregular expenditure on the day of submission and the last condonation letter was received on the 3rd of June 2019.
Other
Not applicable
I thank you.
Mr. B. Gxilishe
Accounting Officer
Department of Economic Development, Environmental Affairs and Tourism
Date: 31 May 2019
17
5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE
ANNUAL REPORT
To the best of my knowledge and belief, I confirm the following:
All information and amounts disclosed in the annual report is consistent.
The annual report is complete, accurate and is free of any omissions.
The annual report has been prepared in accordance with the guidelines on annual reports as issued by
National Treasury.
The Annual Financial Statements (Part E) have been prepared in accordance with the modified cash
standard and the relevant frameworks and guidelines issued by the National Treasury.
The Accounting Officer is responsible for the preparation of the annual financial statements and for the
judgements made in this information.
The Accounting Officer is responsible for establishing and implementing a system of internal control that
has been designed to provide reasonable assurance as to the integrity and reliability of the performance
information, the human resources information and the annual financial statements.
The external auditors are engaged to express an independent opinion on the annual financial statements.
In my opinion, the annual report fairly reflects the operations, the performance information, the human
resources information and the financial affairs of the Department for the financial year ended 31 March
2019.
Yours faithfully
Mr. B Gxilishe
Accounting Officer
Department of Economic Development, Environmental Affairs and Tourism
Date: 31 May 2019
18
6. STRATEGIC OVERVIEW
6.1 Vision
Sustainable development underpinned by economic growth and sound environmental management.
6.2 Mission
To lead economic development and environmental management in the Eastern Cape.
6.3 Values
LEADERSHIP:
We influence the thinking and development of the Eastern Cape; develop team skills at every level and lead in
research, planning, performance management and financial results.
INTEGRITY:
We remain honest and loyal while maintaining high professional standards.
FLEXIBILITY:
Within the framework of the law, our operations are amenable to adjustments in line with changes in the
operating environment.
TEAMWORK:
We design, implement and review our work through strong relationships, respect and sharing across
boundaries to achieve our objectives.
7. LEGISLATIVE AND OTHER MANDATES
The key mandates of DEDEAT are derived from Schedules 4 and 5 of the Constitution and a number of Acts
have been promulgated to further support the Department’s constitutional mandate. These include, among
others: the Co-operatives Act (14 of 2005); the Co-operatives Bank Act (40 of 2007); the Eastern Cape Unfair
Business Practices Act (5 of 1998); the Consumer Protection Act (68 of 2008); the National Environmental
Management Act (107 of 1998); the Environment Conservation Act (73 of 1989); the National Environmental
Management: Biodiversity Act (10 of 2004); the Nature and the Environmental Conservation Ordinance (19
of 1974); the National Environmental Management - Protected Areas Act (57 of 2003); the Sea Shore Act; the
Environmental Conservation Decree (Former Transkei); the Nature Conservation Act (Former Ciskei); the
Atmospheric Pollution Prevention Act; and the Problem Animal Control Ordinance. In addition, specific
pieces of enabling legislation have been enacted to support the work of the department through its six public
entities. Examples include the Eastern Cape Development Corporation Act (2 of 1997) and the Eastern Cape
Gambling Amendment Act (Act 1 of 2015).
19
The mandate of the Department has been enhanced by the 12 (now 14) key outcomes identified and agreed to
by the National Cabinet in 2010. The Department had to adjust its strategic plan to demonstrate alignment
with outcomes 4, 6, 7, 10 and 12 which are outlined below:
Outcome 4:
Decent employment through inclusive economic growth.
Under this outcome, the following policies and strategies are used to drive DEDEAT programmes:
Industrial Policy Action Plan (IPAP); National Development Plan; New Growth Path; National LED
Framework; Vision 2030 (successor to the Provincial Growth and Development Plan); Jobs Fund
Strategy; Provincial Industrial Development Strategy (PIDS) now succeeded by the Provincial Economic
Development Strategy (PEDS-2016); Strategic Integrated Projects (SIP3); the 10 Point-Plan; National
Youth Policy 2015 -2020; Provincial Youth Development Strategy (2015); and the Provincial Sustainable
Energy Strategy (2012).
Outcome 6:
An efficient, competitive and responsive economic infrastructure Network.
This is done through the Industrial Development Zone (IDZ) programmes at Coega and ELIDZ. The
Department is supporting the development of socio-economic infrastructure in identified areas of the
Province. A process to transition from the IDZs to SEZs is underway since the gazetting of the SEZ Act
(2014) and SEZ Regulations (2016).
Outcome 7:
Rural development, land and agrarian reform, food security.
The Department has been collaborating with the Department of Rural Development and Agriculture.
Agro-industry is being supported through an industry forum whose aim is to develop specific agro value
chains.
Outcome 10:
Environmental assets and natural resources that are well protected and continually enhanced.
This is done through the Department and the ECPTA. The DEDEAT Group maintains a network of
Reserves throughout the Province. The Environmental Affairs Programme is responsible for
implementation of environmental legislation through compliance and enforcement, environmental quality
management, biodiversity management and environmental education services.
Outcome 12:
An efficient, effective and development oriented public service and an empowered, fair and
inclusive citizenship.
This is done through various programmes of the Department and public entities such as consumer
education and awareness progammes, and environmental awareness training. Citizens are also empowered
through province wide programmes of the Eastern Cape Liquor Board (ECLB) and Eastern Cape
Gambling and Betting Board (ECGBB).
20
8. ORGANISATIONAL STRUCTURE
21
9. ENTITIES REPORTING TO THE MEC
The following entities report to the MEC of Economic Development, Environmental Affairs and Tourism:
Name of Entity Legislative Mandate Financial Relationship
(R‘000)
Nature of Operations
Eastern Cape
Development
Corporation
To plan, finance, co-ordinate,
market, promote and implement
the development of the Province
and all its people in the fields of
industry, commerce, agriculture,
transport and finance in line
with the ECDC Act (1997)
Main
Appropriation
R181,375
Adjusted
Appropriation
R236,344
Provides short-term and long-term
development finance primarily to previously
disadvantaged entrepreneurs
Provides non-financial support services to
facilitate enterprise development,
promote trade and investment
Manages investments in the form of shares on
behalf of the state as well as other assets
East London
Industrial
Development Zone
To pursue the aims and
objectives of the IDZ
Programme, as set out in the
IDZ Regulations of the
Manufacturing Development
Act (MDA), Act.187 of 1993
R112,172
R112,172 Develops land so as to provide suitable
infrastructure for industrial development
Promotes investment and trade
Coega Development
Corporation
To pursue the aims and
objectives of the IDZ
Programme, as set out in the
IDZ Regulations of the
Manufacturing Development
Act (MDA), Act.187 of 1993
R30,000 R31,270 Develops land so as to provide suitable
infrastructure for industrial development
Promotes investment and trade
Eastern Cape Parks
and Tourism Agency
To develop and manage
protected areas and to promote
and facilitate the development
of tourism in the Province in
line with the ECPTA Act (2010)
R206,805
R233,579 Management of conservation of biodiversity
and sustainable utilization of natural resources
within the protected areas
Marketing, promotion and development of the
Province as a tourism destination
Eastern Cape
Gambling and
Betting Board
To oversee all gambling and
betting activities and to deal
with matters incidental thereto
in the Province and to exercise
certain further powers as
contemplated in the Eastern
Cape Gambling and Betting Act
(1997)
R55,761
R55,761 Administration of applications for and
licensing of gambling and betting business
activities; promotion of responsible
gambling through public awareness and
consumer education; enforcement of
compliance with legislation as well as with
terms and conditions attached to licences.
Eastern Cape Liquor
Board
To regulate registration of the
retail sale and the micro-
manufacturing of liquor in the
Province; and to encourage
entry, support and control socio-
economic and other costs
associated with liquor as
provided by the Eastern Cape
Liquor Act of 2003
R59,541
R59,541 Administration of applications for registration
and issuing of liquor license, promotion of
responsible liquor trading and
consumption, alerting the public to associated
risks or adverse effects through public
awareness and education; and enforcement of
compliance with legislation as well as with
terms and conditions attached to licenses.
22
PART B: PERFORMANCE INFORMATION
23
1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES
The AGSA currently performs the necessary audit procedures on the performance information to provide
reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against
predetermined objectives is included in the report to management, with material findings being reported under
the Predetermined Objectives heading in the Report on other legal and regulatory requirement sections of the
auditor’s report.
Refer to page 127-133 of the Report of the Auditor General, published as Part E: Financial Information.
2. OVERVIEW OF DEPARTMENTAL PERFORMANCE
2.1 Service Delivery Environment
Government endeavours towards an employment friendly, equitable and inclusive economic trajectory steered
to the adoption of the various policy frameworks both nationally and provincially. These include the Medium
Term Strategic Framework (MTSF), structured around fourteen policy priority outcomes which cover the
focus areas identified in the National Development Plan (NDP). Of specific relevance to Department of
Economic Development, Environmental Affairs is Outcome 4, a clear mandate for Decent employment
through inclusive growth. Necessarily, the Provincial Development Plan carries crucial targets and deadlines
towards changing the economic trajectory in the Eastern Cape Province. There were however, a number of
factors including demographics (population dynamics), per capita income, income categories per households,
economic structure and performance as well as unemployment that impacted on the service delivery
environment.
2.1.1 Demographics
The importance of examination of population dynamics in invaluable for planning purposes, as population
size determines allocation of provincial equitable share, crucial for demand and supply needs of goods and
services and basic and economic infrastructure needs. Further, population statistics is important when
analysing an economy, as the population growth directly and indirectly impacts employment and
unemployment, as well as other economic indicators such as economic growth and per capita income.
In 2018, Eastern Cape had a total population of 6 522 700. This makes Eastern Cape fourth most populous
province after Gauteng, KwaZulu-Natal and Western Cape; as the population accounts for 11.3% of total
South African population. However, this marks a decline in the provincial share of the national population
which adversely affects the provincial equitable share and therefore economic activity. The reason for this
decline in population is that Eastern Cape net migration has been negative since 2006, and it is estimated that
between 2016 and 2021 net migration will remain negative, thence the frail provincial fiscal framework. This
unfortunately will continue to frustrate pace of service and economic infrastructure delivery in the Eastern
Cape.
24
2.1.2 Per Capita Income
Per capita income refers to the income per person. Thus, it takes the total personal income per annum and
divides it equally among the population. Per capita income is often used as a measure of wealth particularly
when comparing economies or population groups. Rising per capita income usually indicates a likely swell in
demand for consumption. The per capita income for Eastern Cape Province was (R 40,800) is lower than that
of the South Africa as a whole which is R 59,600.
In Eastern Cape Province, the White population group has the highest per capita income, with R239,000,
relative to the other population groups. The population group with the second highest per capita income
within Eastern Cape Province is the Asian population group (R119,000), where the Coloured and the African
population groups had a per capita income of R57,100 and R29,300 respectively.
2.1.3 Households by Income Category
In a growing economy among which production factors are increasing, most of the household incomes are
spent on purchasing goods and services. Therefore, the measuring of the income and expenditure of
households is a major indicator of a number of economic trends. It is also a good marker of growth as well as
consumer tendencies. It was estimated that in 2018 19.34% of all the households in the Eastern Cape
Province, were living on R30,000 or less per annum. In comparison with 2008's 43.24%, the number is about
half. The 30000-42000 income category has the highest number of households with a total number of 253 000,
followed by the 18000-30000 income category with 248 000 households. Only 160 households fall within the
0-2400 income category.
25
Eastern Cape National Total Eastern Cape
as % of national
0-2400 161 1,150 14.0%
2400-6000 3,250 22,800 14.3%
6000-12000 38,100 275,000 13.8%
12000-18000 78,100 574,000 13.6%
18000-30000 248,000 1,700,000 14.6%
30000-42000 253,000 1,730,000 14.6%
42000-54000 212,000 1,560,000 13.6%
54000-72000 225,000 1,720,000 13.1%
72000-96000 193,000 1,570,000 12.2%
96000-132000 164,000 1,490,000 10.9%
132000-192000 145,000 1,420,000 10.2%
192000-360000 161,000 1,820,000 8.9%
360000-600000 94,100 1,220,000 7.7%
600000-1200000 63,800 895,000 7.1%
1200000-2400000 20,300 299,000 6.8%
2400000+ 3,030 49,100 6.2%
Total 1,900,000 16,400,000 11.6%
Source: IHS Markit Regional eXplorer version 1692
2.1.4 Economic Structure and Performance
In 2018, the community services sector is the largest within Eastern Cape Province accounting for R 103
billion or 30.6% of the total GVA in the province's economy. The sector that contributes the second most to
the GVA of the Eastern Cape Province is the trade sector at 20.2%, followed by the finance sector with
18.3%. The sector that contributes the least to the economy of Eastern Cape Province is the mining sector with
a contribution of R 449 million or 0.13% of the total GVA.
Eastern Cape National Total Eastern Cape
as % of national
Agriculture 6.7 106.1 6.3% Mining 0.4 350.9 0.1% Manufacturing 43.6 572.9 7.6% Electricity 9.0 166.0 5.4% Construction 13.3 170.3 7.8% Trade 67.9 652.7 10.4% Transport 30.3 426.7 7.1% Finance 61.4 854.4 7.2% Community services 102.7 1,041.3 9.9%
Total Industries 335.3 4,341.3 7.7%
Source: IHS Markit Regional eXplorer version 1692
The Eastern Cape real GDP-R grew by 0.6% year-on-year to R235.6 billion in 2017. The province ranked as
the fourth largest regional economy in South Africa. In absolute terms, the Eastern Cape economy grew by
R1.5 billion in 2017. The province was ranked ninth in the country in terms of GDP-R growth in 2017. The
province’s growth was lower than the national average for 2017 of 0.8%. In 2016, provincial growth of 0.9%
26
was faintly higher than national growth at 0.8%. Thus, 2017 has seen a decline in provincial growth rate on
the previous year and the province performing worse than the national average growth rate.
2.1.5 Unemployment
According to the Quarterly Labour Force Survey (QLFS), unemployment in the province in the fourth quarter
stood at 36.1%, an increase of 0.5% percentage points from the third quarter. This resulted in the following
labour market shifts of decrease of 5 000 in the labour force; decrease of 15 000 in employed as well as;
increase of 9 000 in the unemployed and increase of 17 000 in discouraged workers. Year-on-Year, the
number of people employed in the province decreased by 16 000 and unemployed increased by 24 000, with
the unemployment rate increasing by 1% percentage points.
Overall, employment dynamics in the province are worrisome. More so as the labour force decreased in the
last quarter of 2018, resulting in an increase in the discouraged and not economically employed people in the
province. The negative labour market developments are worsened by the slow pace of employment reflected
in increase in unemployment rate and simultaneous decrease in employment absorption and labour force
participation rates which are both telling factors of poor employment prospects in the province. Overall, the
number of people employed in the province has increased from 1295 in 2010 to 1376 in 2018. However, in
between the reporting years, all sectors have at a certain point shed jobs. The distress is that manufacturing has
lost a total of 31 000 jobs in the past 8 years. This is in spite of all provincial interventions since implemented
to support manufacturing as a sector.
2.2 Service Delivery Improvement Plan
The Department maintains an annual service delivery improvement plan which is developed in line with the
guidelines of the Department of Public Service and Administration (DPSA) through the Public Service
Regulations, Chapter 1, Part III C. The table below highlights the service delivery plan and the achievements
to date.
27
2.1 Main Services and Standards
Main services Beneficiaries Current/actual
standard of
service
Desired standard of
service
Actual achievement
1. Provide
consumer
complaint
support
General business and
consumers of any
goods or services in
the Province of the
Eastern Cape
We provide
consumer
complaint advice
and support to
consumers on all
lodged
complaints within
a month
We will provide
consumer complaint
advice and support to
consumers on all
lodged complaints
within a Month.
The department has set
a target of 75% of all
complaints received to
be resolved/ finalised
within the Quarter
28 Complaints were open at the end of the
2017/2018 Financial Year. During the
2018/2019 Financial year, 474 complaints
were received and registered on the
Electronic Case Management System.
458 Complaints were Resolved leaving
44 Complaints open at the end of the
Financial Year.
Statistics indicate that 91% of complaints
that were received were resolved or
referred to Regulatory Bodies with
jurisdiction.
Improved relationships with Regulatory
Bodies ensures that complaints are
referred within 7 days of receipt should
the complaint not fall within the
jurisdiction or mandate of the Provincial
Office of the Consumer Protector.
2. Issuing of
EIA
decisions
called
authorizatio
ns
Private individuals,
general business
community and other
government
departments and
agencies wanting to
develop a listed
activity or in a listed
area
We issue
decisions called
Authorizations
and licenses on
all applications
with complete
information in
line with
timeframes
We will issue decisions
called Authorizations
on all applications with
complete information
within timeframes.
The department has set
a target of 98% of
applications with
complete information
In this reporting year 147 out of 148
environmental authorizations were
finalized within legislated time-frames,
i.e. 99.2% as opposed to a target of 98%.
In addition, average turnaround times
were generally below legislated time-
frames. This was achieved under very
difficult circumstances, including staff
shortage and work overload in some
offices, exacerbated by the office
disruptions in the last quarter.
28
2.2 Batho Pele Arrangements with Beneficiaries (Consultation access etc.)
Current/actual arrangements
Consumer Protection
Desired arrangements Actual achievements
Access: Regional offices and the
Head Office serve as service centres
for easy access to improve service
delivery, a call centre and an
electronic case management system
are operational and complaints are
received by telefax and email
The call centre (share call) is
accessible to the consumers in
English and isiXhosa and it
helps in reducing travelling
costs by the consumers. The
walk-ins and faxes also used by
consumers.
The call centre is accessible to all consumers and members
of the public who have any enquiries or complaints to
lodge. Enquiries and complaints are also received by way
of walk – in public at all regional offices.
There has been a marked increase in the number of
complaints that are received by email
[email protected]. These complaints are
analysed and submitted to the Regional Office where the
Complainant resides and the complaint is analysed and
submitted to a Consumer Advisor to assist the Complainant.
Consultation: Conduct six
education programmes which
consist of awareness workshops
aligned to the Consumer Protection
Education Business Plan.
Conduct six (6) education
programmes which consist of 85
awareness workshops held
quarterly in all regions targeting
5000 consumers. The six
education programmes are the
following:
– The Office of the
Consumer Protector
– Financial Literacy
– Consumer Rights
– Right to fair value, good
quality and safety
– Spend Wisely Campaign
– Rights of Consumers in the
Tourism Industry
Six (6) programmes consisting of 154 awareness workshops
were conducted in 2018/19. The six (6) education
programmes conducted were:
– The Office of the Consumer Protector (Q1)
– Financial Literacy (Q2)
– Consumer Rights (Q2)
– Right to fair value, good quality and safety (Q3 – Q4)
– Spend Wisely Campaign (Q3)
– Growing the Economy Through Tourism (Q4)
Courtesy: Confidentiality of
complainants or consumer is
maintained at all times, etiquette
and accurate disclosure are critical.
The officials are to give
constant feedback to the
consumers at appropriate time
intervals. Reports drawn from
electronic case management
system on the number of users,
complaints trends and the level
of consumer satisfaction. A plan
to be developed to request
permission from complainants
to be able to contact
complainants to determine the
level of satisfaction of services
rendered and recommendations
to improve services of the
Office of the Consumer
Protector to be developed for
implementation.
Mobile teams will also conduct
information sharing sessions in
faraway communities.
A Standard Operating Procedure assists with Consumers
understanding the time frames when feedback should be
expected and all consumer advisors are to comply with the
Standards.
Regular reports are drawn from the Reporting Platform of
the Electronic Case Management System and Consumers
were given time frames in terms of resolution and advice.
29
Information: Information sheets
and posters developed and
launched with the call centre.
Radio interviews were conducted
aligned to the business plan.
The six (6) education
programmes, radio interviews
will be conducted, posters and
flyers be distributed. Mobile
teams will also conduct
information sharing sessions in
faraway communities.
Information was shared with 11 417 attendees through
awareness session based on the six (6) education
programmes. Consumer Guides (a booklet summarizing the
Consumer Protection Act), pamphlets, flyers were
distributed during the sessions. Mobile teams conducted
awareness sessions for faraway communities during the
Public Service Month campaign in September.
Redress: The call centre’s case
management automatically
escalates to supervisors.
A plan to be developed to
request permission from
complainants to be able to
contact complainants to
determine the level of
satisfaction of services rendered
and recommendations to
improve services of the Office
of the Consumer Protector to be
developed for implementation in
the second half of 2017/2018.
Mobile teams will also conduct
information sharing sessions in
faraway communities.
All complaints received by the Call Centre are logged on the
Electronic Case Management System and an email is
submitted to the Office of the Consumer Protector, where
the Complaint is analysed and submitted to the District
Office best placed to assist the Complainant in as effective
and efficient manner as possible.
Even though there is a Customer Satisfaction Survey once a
Complaint is logged with the Call Centre, it is unfortunate
that no callers have completed the survey.
All complaints relating to the service delivered by the Office
of the Consumer Protector are escalated to the Provincial
Consumer Protector. Reports are requested from Regions
and the complaint is mediated to ensure that the Consumer
receives the required service that they require.
Openness & Transparency:
Publication of reports and
distribution to strategic centres e.g.
Municipalities, other Government
offices, Multi-purpose centres.
The electronic case management
system allows the Supervisor
and the Consumer Protector a
bird’s view an all complaints
lodged and captured in the
system.
Regular reports are drawn from the Reporting Platform of
the Electronic Case Management System. All open
incidents are perused by the Head Office of the Office of the
Consumer Protector and emails are submitted to District
Offices with advice and guidance on Complaints.
Value for Money: The return on
investment for the Call Centre and
Electronic Case Management
System will lead to efficiency and
lead to timeous and effortless
lodgment of complaints by
consumers.
The improved turnaround time
within 90 days
The Electronic Case Management System submits emails
indicating when a new complaint is logged to ensure that
Complainant’s are advised of the incident number.
Escalation emails are forwarded to supervisors and
management aligned to the Standard Operating Procedures.
Any official in the Office of the Consumer Protector is able
to provide feedback to a Consumer once the incident
number is entered into the Electronic Case Management
System.
The monetary value of savings for Consumers in respect of
Complaints resolved during the 2018/2019 Financial Year
was R518 120,00
30
Current/actual arrangements
Environmental Impact
Management
Desired arrangements Actual achievements
Access: The public can access
NEAS, a public portal which is
operational.
The public can access NEAS
through the public portal.
The NEAS public portal is currently not active, due to
changes in the electronic system being effected at national
level. Applicants, their service providers and interested and
affected parties can however access information via regional
offices and if not satisfied via Head Office.
Consultation: One stakeholder
forum session once in a quarter.
Conduct one (1) stakeholder
forum session once a quarter
where all the governance and
compliance issues are addressed.
Four Stakeholder forums were conducted.
Courtesy: Quarterly reports
presented to stakeholders at
quarterly Environmental Quality
Management (EQM) Forum, EQM
Technical Committee meetings and
at DEDEAT Environmental Affairs
Management meetings.
Stakeholders are briefed at
quarterly Environmental Quality
Management (EQM) Forum,
EQM Technical Committee
meetings and at DEDEAT
Environmental Affairs
Management meetings.
Quarterly meetings of both the EQM External Stakeholder
Forum and the EQM Technical Committee involving Head
Office and Regions took place as planned. Extensive
feedback was given at an Environmental Affairs
Management meeting.
Information: Information is
disseminated in all stakeholder
forum sessions once in a quarter,
distributed to municipalities, multi-
purpose centres and departmental
website. The public portal on
NEAS is very transparent tool and
the whole EIA process is
transparent especially if one
registers as an interested party.
Information is disseminated in
all stakeholder forum sessions
held quarterly.
In addition to EQM Forum and Technical Committee the
Directorate participated in numerous structures and forums
for purposes of coordination and facilitation. This included
the Eastern Cape Forestry Sector Forum [ECFSF], the Co-
ordinating Committee for Agricultural Water [CCAW], the
DWS Licensing Assessment and Authorization Committee
[LAAC], Provincial and District Infrastructure Forums,
while regional offices participated in District Environmental
Management Forums. One EIM official is a member of the
ELRED Assessment Committee and therefore ensures
coordination at that level. A special effort was made to
ensure regular presentations on the Eastern Cape
Biodiversity Conservation Plan at ECFSF and CCAW.
Redress: The review of decision is
done only through the Office of the
MEC, only the MEC can upheld or
rescind the appeal.
The clients must lodge an appeal
within ± 20 days after the
decision and the appeal is ± 90
days, only the MEC can upheld
or rescind the appeal.
The EIM Directorate is responsible to review appeals and
make submissions to the office of the MEC. Such reviews
took place in this reporting year as required.
Openness & Transparency: The
public portal on NEAS is very
transparent tool and the whole EIA
process is transparent especially if
one registers as an interested party.
The public portal on NEAS is
very transparent tool especially
if one registers as an interested
party.
The NEAS public portal is currently not active, due to
changes in the electronic system being effected at national
level. Applicants, their service providers and interested and
affected parties can however access information via regional
offices and if not satisfied via Head Office. If a citizen is
still not satisfied legislated channels via PAIA can and are
being followed.
Value for Money: Applications
must be finalized within time-
frames.
On average applications are
finalized well within time-
frames.
99.2% of applications were finalized within time-frames.
Time: Time frames within 30 BAR
and 45 days Scoping EIR Report
after all the required information
has been received.
The EIA Regulations have
changed, the new time-frame is
107 days.
In this reporting year 147 out of 148 environmental
authorizations were finalized within legislated time-frames,
i.e. 99.2% as opposed to a target of 98%.
31
2.3 Service Delivery Information Tool
Current/actual information
tools
Desired information tools Actual achievements
Consumer education programme:
Posters, booklets and information
sheets, radio interviews and road
shows
Posters, booklets and information
sheets, radio interviews and road
shows. Research into effectiveness
of utilisation of Social Media
Platforms will be undertaken in the
2017/2018 Financial Year.
Booklets and information sheets were distributed during
the awareness workshops.
4 radio interviews were conducted as follows:
– 1 with PE FM with an average reach of 20000
listeners,
– 1 with Alfred Nzo Community Radio with an
average reach of 273000 listeners,
– 2 with Umhlobo Wenene FM with an average reach
of 2916000 listeners per show.
16 radio adverts were aired with an average reach of
2916000 listeners per advert
7 Consumer Alerts were posted on the DEDEAT
Facebook page and Internal Communications.
Quarterly stakeholder forum sessions Conduct one (1) stakeholder forum
sessions once in a quarter.
Members of the Consumer Education Committee attended
3 Quarterly sessions;
Members of the Consumer Protection Forum attended 2
Quarterly sessions and 2 Policy and Strategy Sessions
during the financial Year.
Consumer protection services:
Regional offices and the Head
Office serve as service centres for
easy access to improve service
delivery, a call centre and an
electronic case management system
are operational and complaints are
received by telefax and email
Inputting of data onto the
Electronic Case Management
System to be accurate and to be
extended to include the
Municipality within the area of
the complaint.
Regional offices and the Head Office serve as service
centres for easy access to improve service delivery, a call
centre and an electronic case management system are
operational and complaints are received by telefax and
email ([email protected])
Escalation emails are forwarded to supervisors and
management aligned to the Standard Operating
Procedures. Any official in the Office of the Consumer
Protector is able to provide feedback to a Consumer once
the incident number is entered into the Electronic Case
Management System.
Impact Management Conduct one EQM Stakeholder
Forum per quarter.
Achieved.
Participate in one Provincial
Infrastructure Forum per quarter, in
order to disseminate information to
local authorities.
Achieved.
Booklets and brochures available to
stakeholders
Booklets and brochures are available.
32
Complaints Mechanism
Current/actual complaints
mechanism
Desired complaints
mechanism
Actual achievements
Regional offices and the Head
Office serve as service centres for
easy access to improve service
delivery, a call centre and an
electronic case management system
are operational and complaints are
received by telefax and email
A Standard Operating System has
been approved to ensure that all
services across the Province are
delivered consistently and aligned to
time frames.
The Electronic Case
Management System be utilized
to the full potential to assist with
Monitoring and Evaluation and
Trend Analysis.
Consumers lodged complaints with the Consumer
Protection Share Call Centre or by telefax, emails and
walk ins at District Offices. There has been a marked
increase in the number of complaints that are emailed to
District supervisors and management monitor and evaluate
complaints as well as turnaround times on a monthly
basis. Guidance is also provided by management with
regard to resolution of complaints.
A Standard Operating Procedure assists with Consumers
understanding the time frames when feedback should be
expected and all consumer advisors are to comply with the
Standards.
Trend Analysis is undertaken on both Complaints received
per District as well as on the classification type of
complaint.
All complaints relating to the service delivered by the
Office of the Consumer Protector are escalated to the
Provincial Consumer Protector. Reports are requested
from Regions and the complaint is mediated to ensure that
the Consumer receives the required service that they
require.
Impact Management: An appeal
process
The review of decision is done
only through the Office of the
MEC. Only the MEC can uphold
or rescind the appeal.
The EIM Directorate is responsible to review appeals and
make submissions to the office of the MEC. Such reviews
took place in this reporting year as required.
33
2.4 Organisational Environment
2018/19 was the fourth year of implementation of the five-year plan, which coincided with the five-year end
of the 5th political administration. The organisational environment continued to be marginally efficient due to
a number of issues such as limited staffing, systems and efficiency of staff. The e-vaya (an electronic
document processing and tracking tool) system continued to function well easing and speeding transactional
processes in the department. A number of systems still needs to be developed and/or improved. Examples of
lack of systems that impact on the work of the department include e-permitting system for biodiversity and the
strategic management system for managing planning through to reporting and archiving.
Evaluations have not been prioritised in the past. Going forward, at least two evaluations will be conducted in
each year. The Operations Management Framework (OMF) will be institutionalised in the department starting
2019/20 with partial allocation of funding for the project. This and other evaluations earmarked in the year
could not take place due to delays in procurement processes. Going forward, it is key for the department to
focus on outcomes of operations rather than processes per se.
Through the work of the department, regions and public entities, the DEDEAT group was able to spent about
98.4% of its budget. There was more collaborative work although more needs to be done. The department
conducted performance validation programmes with all its public entities in line with accountability matrices
in operation.
Overall, the organisational environment remained stable although the human resource function remained
constrained. The department operated with a high vacancy rate of 28,50% vacancy rate during the year. This is
very high and above the acceptable threshold of 10% set by DPSA. Part of the reason for this is due to delays
in post to person matching and challenges being made by labour Unions. Ongoing discussions and
negotiations with Unions are taking place.
The Corporate Services directorate recruited two senior managers which assisted in stabilising the corporate
services functions. The leadership of the department remained fairly stable with no resignations recorded. The
centralised recruitment process designed to limit the growth of CEO budgets is still a challenge and the
department prefers to have authority to recruit on its own.
In February 2019, the department’s head office had a safety incident resulting in the building being evacuated.
Since then, staff of the department operated from dispersed offices in five locations. This had a negative
impact on the morale of staff, productivity and delivery of set targets. All organisational committees were
largely functional and effective during the year.
The department has been largely compliant with processes and policies operational in the public service. The
financial management processes remained stable as indicated in the latest MPAT results. The department has
achieved a slightly lower overall score of 2.5 compared to 2.7which was achieved in the previous year.
Management is putting measures in place to address the shortcomings.
Although there was an under-expenditure of 1.6% of funds in 2018/19, financial resources of the department
of approximately R1.1 billion, representing an allocation of 1.4% of the total Provincial budget, is
insignificant to make a massive dent to unemployment, poverty and lack of industrial infrastructure.
Budgeting efficiencies and collaborations need to be improved going forward. It is good to note that where the
department struggled with resources, some form of partnerships were pursued in order to achieve the
objectives of the department. The establishment of a Provincial Stimulus fund of R339 million in 2019/20 is a
step in the right direction in stimulating growth and development in the Province.
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It is pleasing to note that the department had an adequate complement of tools and assets (e.g. vehicles,
uniforms, ICT equipment) to facilitate the implementation of various programmes. As reported in the previous
year’s annual report, it is mainly the head office building that requires serious attention in order to improve the
health and safety of staff. Provision of most ICT services like email, internet was close to 100%. The ESKOM
power cuts and lack of a standby generator impacted on the uninterrupted network connectivity of staff.
Governance issues, people and process issues were handled in line with applicable prescripts. The department
continued to manage identified risks and emergent risks using standard protocols in place. The same process
applied to all public entities of the department. Lastly, the department was privileged to have a dynamic,
passionate and active MEC during the year. The MEC provided strong political and practical direction to
economic development in the province. It is expected that the new MEC of the department will continue on
the same trajectory.
2.5 Key Policy Developments and Legislative Changes
The following is the status of policy development and legislative review which should be noted:
The Eastern Cape Gambling Amendment Act, 2015 (Act No. 1 of 2015) amended the Eastern Cape
Gambling Act, 1997 (Act No. 5 of 1997) and came into operation on 1 August 2016. On the 19th
February 2018 the Honourable Premier published a Proclamation bringing into operation section 4 and
section 5 of the Eastern Cape Gambling Amendment Act, 2015 (Act No. 1 of 2015). These sections
provide that the juristic person will be known as the Eastern Cape Gambling Board. The impact of the
Legislation provides for the following: reinforced monitoring to enforce compliance by the industry; an
expanded revenue-base and increased economic contribution; a revised regulatory system that caters for
new forms of gambling; a quicker decision making process and responsiveness to demands; and enhanced
suitability of mechanisms to promote entry into the industry. The Regulations in terms of the Act are
being developed and it is envisioned that they will be implemented during 2019/2020.
The Eastern Cape Liquor Authority Act, 2018 (Act No. 4 of 2018) was assented to and published in the
Provincial Gazette during March 2019. Regulations in terms of the Act will be drafted and will be
published for comment once the Hon Premier promulgates the Act.
The White Paper on Consumer Protection in the Eastern Cape has been endorsed by the Executive
Council. The Eastern Cape Consumer Protection Act, 2018 (Act No. 3 of 2018) has been assented to by
the Honourable Premier and published in the Provincial Gazette during March 2019. The Act when
proclaimed and in operation will provide the Office of the Consumer Protector with the necessary
legislative mandate to ensure a more effective and efficient service to consumers within the Eastern Cape
and will be aligned to the Consumer Protection Act, 2008 and provides for procedures and mechanisms to
provide redress to consumers. Provision is made for the establishment of the Eastern Cape Consumer
Tribunal for referral of complaints that are not resolved in terms of alternative dispute resolution
mechanisms.
The Eastern Cape Parks and Tourism Agency Act (No 2 of 2010) was reviewed. The Eastern Cape Parks
and Tourism Bill, 2018 was published for public comment on the 12th February 2018. The Bill will
promote alignment with the National tourism legislation whilst it will seek to address gaps that have been
identified which have a direct impact on implementation.
The Department has reviewed the Eastern Cape Development Corporation Act, 1997 (Act no. 2 of 1997).
A White Paper on the Eastern Cape Development Corporation is being developed which will inform the
Eastern Cape Development Corporation Bill to align with the Economic Policy direction of the country
and the province.
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Formal and Informal businesses are currently governed by the Business Act, 1991 (Act No. 71 of 1991)
which predates the Constitution of the Republic of South Africa, 1996. The Department is currently
working on the policy development of a White Paper on Businesses in the Eastern Cape which will
culminate in the publication for comment of the Eastern Cape Businesses Bill. The overall intention of
the Bill will be to repeal the Business Act, 1991, to provide for measures to protect consumers in the
Province against unhealthy, harmful, and unsafe goods and business practises, provide for the designation
of Licensing, Permitting and Registration Authorities, Committees and Officers in the Province and their
objects, powers, duties and functions, provide for a conducive environment to ensure graduation and
transitioning of small businesses operating in the informal sector into the main stream economy, provide
for a developmental agenda that covers transfer of skills, capacity building and business support to the
SMME’s and to provide for business data collection across the board that will be beneficial to proactive
economic planning regime.
The Eastern Cape Environmental Management Bill will be published for public comment and
consultations will occur during the first quarter of the 2019/2020 financial year.
3. STRATEGIC OUTCOME ORIENTED GOALS
The Department has one goal, which is supported by four strategic objectives.
Strategic Goal Abbreviated Strategic Objectives
To create a conducive
environment for
sustainable
development which is
diversified, innovative,
equitable and supported
by a skilled workforce.
SO 1 A leading high performance organisation which is efficient, effective, relevant and
financially viable with sufficient capacity and motivated staff.
SO 2 Strategic frameworks and partnerships support and promote infrastructure development,
industrialisation and sustainable SMMEs that reduce poverty, create employment and
economic equity in the Eastern Cape Province.
SO 3 Carbon footprint reduced and investments in sustainable projects increased in the
Eastern Cape.
SO 4 To establish implement and maintain effective environmental systems to manage waste,
air quality, environmental impact, coastal management and climate change for sustainable
development.
When the goal is linked to the strategic objectives, the following high level results for the year under review
can be noted:
Outcome 4: Decent employment through inclusive growth
The Department has created 19 880 jobs compared to 23 592jobscreated during the past year. A total of 227
SMMEs were provided with non-financial support compared to 368SMMEs achieved in the prior year. The
number of cooperatives supported with finance was 20 compared to 16 achieved in 2017/18. A total of7 916
people were trained in various sectors of the economy compared to 7 300people trained in 2017/18.
Outcome 6: An efficient, competitive and responsive economic infrastructure network
The IDZ programme performed relatively well considering the depressed economic climate. A total of 21
investors were realised compared to 20investors realised in 2017/18 with a projected investment of R3,255
billion compared to R13,378 billion achieved in 2017/18. The Department is working with the two SEZs in
implementing the amended Special Economic Zones (SEZ) Regulations.
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Outcome 7: Rural development, land and agrarian reform, food security
The Department continued to provide support to the agri-industry through the formation of an agro-processing
forum. This includes collaboration with the Department of Agriculture and Rural Development (DRDAR)
which is primarily involved in agri-farming. Two Agro-Processing initiatives were facilitated during the year.
Outcome 10: Environmental assets and natural resources that are well protected and continually enhanced
The Department has processed 99.2% of EIA applications within the permitted timeframes in 2018/19. Waste
license applications were also processed during the period. A total of 32environmental capacity building
activities were conducted throughout the Province. Through the environmental EPWP programme, 363 work
opportunities were created compared to 921 work opportunities created in 2017/18.
Outcome 12: An efficient, effective and development oriented public service and an empowered, fair and
inclusive citizenship
The e-vaya business transacting system continued to function smoothly in the department. The first phase of
the strategic management solution was completed. However, due to funding gaps, the department could not
proceed to phase 2 of the project which would have entailed the development of an ICT enabled strategic and
project management solution. Employees continue to be empowered. The Department awarded 46 bursaries
compared to 38 that were issued to employees in 2017/18. A new organisational structure was developed but
is yet to be approved by the DPSA. Empowerment of citizens took place through programmes such as
environmental education, consumer awareness and, education programmes, liquor and gambling awareness
campaigns.
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Performance Information by Programme
3.1 Programme 1: Administration
Programme Purpose
Administration provides the Department with strategic leadership and management, as well as overall administrative and performance oversight function. The programme is structured as follows:
Sub-Programme Sub-Programme Purpose
1.1: Office of the MEC Provide overall political and policy leadership for the Department.
1.2: Office of the HOD Provide effective and efficient strategic leadership to the Department.
1.3: Financial Management Establish and maintain appropriate financial management systems.
1.4: Corporate Services Ensure adequate provision of institutional capacity through effective human capital management, organisational development interventions.
Strategic Objective:
SO 1: High Performance Organisation Strategic objective indicators, planned targets and actual achievements
Programme Name: Administration
Strategic Objective(s)
Strategic Objective Indicator Actual
Achievement 2017/2018
Planned Target
2018/2019
Actual Achievement
2018/2019
Deviation from Planned Target to Actual Achievement for
2018/2019
SO1: High Performance Organisation
1 Organisational performance index
- 5 01 -5
2 Financial maturity index 2.9 3 2.92 -0.1
3 HR efficiency index 4.5 6.5 03 -6.5
4 Customer relations index 2.9 4 04 -4
1This index is measured on a scale from 1 (lowest) to 5 (highest) and is based on the organisational performance assessment tool administered by the Strategic Management Unit. Terms of reference were prepared but the evaluation could not be completed due to delays in procurement processes. A decision was made to defer the evaluation to the 2019/20 financial year. The TOR were re-submitted to the SCM unit in April 2019. It should be noted that elements of the measure are already factored in the operations of the department. 2The department slightly under-performed on revenue collection which impacted on the overall score. Revenue collected is tied to economic performance, which was not in good health in 2018/19. 3 Due to unforeseen challenges experienced with head office accommodation in the fourth quarter of the year, the period in which the assessment is normally conducted, Corporate Services was unable to process the assessment. 4Due to capacity constraints in the department, no customer relations assessment was conducted during the reporting year. The non-action of the customer relations index did not relate in any under expenditure since it did not have any operational cost.
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Performance indicators, planned targets and actual achievements
No. Programme/Sub-programme
Performance Indicator
Actual Achievement
2015/2016
Actual Achievement
2016/2017
Actual Achievement
2017/2018
Planned Target 2018/2019
Actual Achievement
2018/2019
Deviation from Planned Target to
Actual Achievement for
2018/2019
Sub-programme 1.1: Office of the HOD
1.1 Average MPAT score
N/A 2.5 2.7 3 2.55 -0.5
1.2 % network functionality
N/A N/A 100% 100% 96%6 -4%
Sub-Programme 1.3: Financial Management
1.3 Average number of days to pay suppliers
N/A N/A 30 30 237 +7
1.4 Annual audit outcome
Unqualified Unqualified Unqualified Unqualified Unqualified -
Sub-Programme 1.4: Corporate Services
1.5 % implementation of the work skills plan
N/A 67% 80% 80% 100%8 +20%
1.6 % of staff complying with all PMDS processes (contracts and reviews)
N/A 81.7% 92% 95% 90%9 -5%
5The score slightly went down from a previous score of 2.7 to 2.5 due to low scores in governance & accountability, financial discipline, anti-corruption and ethics, risk management, corporate governance in ICT and evaluation. The root
cause was inadequate capacity (human and financial resources) and limited policies in place. 6Occasional electricity blackouts mean that when the power is off the department is unable to provide continuous
connectivity. Secondly, since the department does not have a stand-by generator, in the event of power outages, the available UPS systems’ drawdown power can only handle specified hours until such time power is restored. The move from head office building in February had an impact on connectivity as well. 7Similar to the prior year, the 30-day payment target period is a statutory requirement for payment of valid invoices upon presentation in all government departments. The department has sound management systems and monitoring in place, which allow payments to beneficiaries to be processed in less than 30 days from the date of valid receipt of invoice. 8The work skills plan is developed by 30 April of each year and cannot be amended. More training took place due to the
inclusion of interns who ordinarily were not included in the work skills plan. 9The lower figure was due to the introduction of changes of DPSA directives and determination with effect from 01 April
2018/2019 financial year which created uncertainty and non-uniformity on review processes by staff in the department.
The Department has since coordinated workshops and meetings to enforce adherence to the directives.
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Administration Key Achievements
OFFICE OF THE HOD
The Office of the HOD provided leadership, strategic guidance, management and administration of the
department, including ensuring efficient utilisation of resources, maintenance of discipline, promotion of
sound labour relations and proper use and care of state property. Facilitated integrated governance, service
delivery and Public Entity Oversight. Overseen the implementation of Provincial transversal programmes and
transformation priorities. Coordinated inputs and developed reports on the implementation of cabinet
resolutions. As part of monitoring the functioning and effectiveness of Governance Structures, the office
produced quarterly reports on the seating of the structures. During the period under review, the office
participated in Provincial and National platforms that included: - the Provincial Management Meetings,
Cluster, Cabinet and Executive Council, the schools visit programme, Mintech and Minmec Environment,
Executive Council Lekgotla, Portfolio Committee sessions, Cabinet Budget Committee.
Special Programmes Unit
The Special Programmes Unit is responsible to mainstream departmental programmes to benefit the
designated groups. Capacity building and awareness raising sessions were conducted for departmental
officials. The unit developed and ensured compliance with the Gender Equality and Job Access Strategic
Frameworks. The unit monitored and played an oversight responsibility to the Public Entities and the
ECDEET.
As part of monitoring the Gender Equality and Job Access Strategic Frameworks implementation plans, the
Unit through performance information from relevant business units within the department and also from
public entities developed and submitted Departmental Implementation plans and Reports, these were
submitted to the Office of the Premier and subsequently to the DPSA. In terms of oversight on public entities,
the unit analysed public entities’ quarterly reports and presented the analysis reports for consideration by the
Public Entity Internal Oversight Committee. Feedback on the analysis performed was provided to the entities.
The following achievements during the period under review are highlighted:
The Special Programmes Unit hosted two business opportunities workshops in commemoration and
celebration of youth month. In partnership with Buffalo City Metro, the Enterprise Development and
Consumer Protection Units from the Amathole Regional Office hosted an information dissemination and
business opportunities workshop for the youth and women in Ndevana Community. The workshop
communicated available business and funding opportunities for the key priority sectors.
In line with its mandate of celebrating institutionalised days, SPU celebrated the disability month and the
elderly month. The Unit celebrated the elderly month by hosting in partnership with Amatole Regional
Office and Consumer Protection Unit, a consumer protection awareness workshop for the elderly persons
at Khayalethemba in Mdantsane, in the Buffalo City Metropolitan Municipality on the 30th October 2018
for 84 people. The aim of the session was to educate the elderly about their consumer rights and
introducing to them other stakeholders who are key in the protection of consumer rights. The stakeholders
who took part in the event were the Department of Justice, Sheriff of the court and Department of Social
Development.
The Unit in partnership with Sarah Baartman Regional Office, Enterprise Development and Consumer
Protection Units, Sarah Baartman DM and Makana LM hosted an information dissemination workshop for
persons with disabilities at Alicedale on the 29th of November 2018.
The unit in partnership with ECDEET handed over a Braille Machinery in Dimbaza to the EC Braille
Institute on the 03rd of December 2018 in celebration of Disability month and International Day for
Persons with Disabilities. The DEDEAT MEC did the hand-over to the project beneficiaries.
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The unit hosted a build-up programme on the fight against Gender Based Violence in partnership with
Mhlontlo Local Municipality and Department of Social Development at Khalankomo Village, Ward 20,
Qumbu on the 5th March 2019 as part of celebration of International Women’s day. Sixty-seven (67)
people attended the event.
The Unit in partnership with the Chris Hani Regional Office, Environmental Empowerment Services Unit
and other role players hosted the launch of Women in Environment Forum on the 12 March 2019 in
Queenstown where a total of ninety-one (91) people attended the event.
As part of celebrating the International Women’s day, the Unit in partnership with OR Tambo Regional
Office, Enterprise Development Unit in particular, hosted Women in Business event at Mthatha Stadium
on the 27 March 2019 where a total of 101 people attended the event.
Internal Audit
In the 2018/19 financial year an external service provider was appointed to capacitate the internal audit
division for a 12-month period. The service provider commenced duties in September 2018.
Internal Audit implemented its risk-based audit plan, which was based on the Risk registers from the Risk
Management Unit of the Department. The plan was discussed with the Executive Management and approved
by the Audit Committee. The Internal audit plan was also shared with the Auditor General.
Internal Audit conducted its reviews with due professional care and independence, which is a prerequisite for
an effective Internal Audit Unit. The Audit Committee has provided the necessary support and assistance to
ensure that the Unit is able to complete its responsibilities with the highest level of integrity and
independence.
Internal Audit completed 81% of its audit plan where 13 audits out of a total of 16 planned audits were
completed.
The internal audit function performed the following audits during the year:
Evaluation of the Annual Financial Statements;
Governance review;
Risk Management;
Supply Chain Management;
Interim Financial Statements review;
Transfer Payments to Public Entities;
Transfer Payments to Municipalities and Non-Profit Institution;
Transfer Payments to Households;
Transfer Payments to LRED;
Records Management;
Safety and Health Environment;
Audit Intervention Plan (AIP);
IA findings register – Follow up.
Where control weaknesses have been identified, management has/ or is in the process of attending to such
weaknesses.
The following planned risk based internal audits could not be performed during the year due to inaccessibility
of the building from 12 February 2018. The following are thus reported as unassured risks:
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Performance Information;
Compliance audit – Economic Development;
Compliance audit – Environmental Affairs.
Most of the findings raised on quality assurance in the Quality Assurance Improvement Program (QAIP) have
been addressed except for those that relate to the staffing of the Internal Audit unit.
Portfolio Management Office
The Portfolio Management Office (PMO) has throughout the year, served as a transversal support unit to the
Department’s mandated numerous provincial activities, centering its resources to the economic and social
infrastructure initiatives. The PMO’s intention being to support efficient and effective service delivery
mandates of the department, its entities and related stakeholders. The PMO ensured monitoring of the
Economic Infrastructure Programme (EIP) and the Integrated Social Infrastructure Development Programme
(ISIDP)
Legal Services
The Legal Services Unit is tasked to oversee and advise on all areas of litigation as well as provide support to
all the programmes in the Department in respect of matters that would require legal expertise.
Litigation cases were monitored and legal risks were analysed. Contingent liabilities were kept up to date and submitted to the Audit Committee quarterly, the State Attorney as well as to the Finance Division to ensure that the interim financial statements were accurate.
90% of the Department’s Labour Disputes have been finalised in favour of the Department.
Litigation in the Department has also decreased substantially and this can be attributed to ongoing consultation with the various programmes and the Legal Services Unit to ensure legality of procedures that are being followed in the Department.
The following are highlights of activities that were undertaken by the unit:
The Eastern Cape Consumer Protection Act, 3 of 2018 was assented and awaiting promulgation.
The Eastern Cape Liquor Authority Act, 4 of 2018 was assented to and awaiting promulgation.
Eastern Cape Development Corporation Act, 1 of 1997 – Stakeholder consultation on the new Bill is underway.
Further to the above, the office has ensured corporate governance is complied with in terms of public entity board capacitation and the following entities have had new appointees to the Board by the Hon. MEC:
1. The Eastern Cape Gambling Board 2. The Eastern Cape Liquor Authority. 3. Eastern Cape Parks and Tourism Agency
Strategic Management
Due to limited funding of the strategic management unit, the bulk of work under strategic management is
routine covering the development of plans and reports. During the year, planning sessions were conducted
culminating in the finalisation of the DEDEAT 2019/20 annual performance plan, operational plan and
regional operational plans. Corporate plans and annual performance plans of all public entities were reviewed
to ensure alignment to prescripts and the mandate of the department. The unit participated in numerous
planning sessions to ensure appropriate technical support and advice within the DEDEAT Group such as the
empowered futures with the UNDP, BBBEE and Township economy summit, ECPTA strategy session,
integrated provincial planning workshop with the OTP, to name but just a few. The business process mapping
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and standard operating procedures of the Office of the Consumer Protector and EIA have been printed and
will be distributed in the 2019/20 financial year.
In terms of reporting, quarterly reporting tools for the department and its public entities were developed and
communicated to all. This included sessions on the utilisation of the tools and approaches to verification of
performance evidence. The technical indicator and evidence reference manual (TIERM) was updated and
circulated to all senior officials in the department to guide reporting. Quarterly performance reports (QPR)
for all quarters were completed and published. Consolidated quarterly reports were also developed during
each quarter. To ensure quality reports, the strategic management unit conducted performance validation on
all portfolios of evidence aligned to results on active indicators and targets. In addition, performance
validation sessions were facilitated at all six public entities of the department. The annual report of the
department and half year performance report were developed and published. The unit developed terms of
reference for two evaluations (SMME evaluation and Organisational Performance Assessment) but these
could not be conducted due to delays in procurement processes. These projects have been carried over to the
2019/20 financial year.
Information and Communication Technology (ICT)
DEDEAT partnered with CIPC for the implementation of CIPC system in all the regions of the Department.
The system is used for assisting SMME’s in registering and maintaining their business. This reduces the time
and cost for SMME’s to travel to Pretoria for maintenance and registration of business, the system is installed
in such a way that it provides self-services for the public, assistance is also provided in regional offices to the
public by trained departmental officials.
Provision of email, adequate working tools desktop, laptops, tablets, printing and internet services to all the
staff members of the Department. The email services is also accessible on the phone outside of the office to
improve responsiveness and increase accountability to service delivery imperatives. Video conferencing
facility to improve communication, increase reach out to regions, reduce travelling and increase productivity
as well as software support and installation of current software to ensure that the department has the latest
version of software have been provided.
A Geographic Information System (GIS) for mapping of projects that the department has funded and other
requirements which require availability of information for better decision making process has been provided
with new spatial database, image server and ArcGIS server being set-up.
The Office of the Consumer Protector, share call centre system and electronic case management system which
allows consumers to telephonically have the call centre log a complaint or Office of the Consumer Protector
Officials in the department to log complaints for the intervention of the consumer protector to ensure that
whatever issue they have is correctly attended to and resolved was supported.
The office of the DGITO has provided second phase II of electronic e-permit solution for the Environmental
Affairs section. This provides an electronic channel for citizens to apply for permits which are also classified
for TOPS, to track the status of permits applied for, reduce the amount of time taken up by pre-application
support, reduce the time currently needed to issue a permit, manage permit applications internally to the
Eastern Cape DEDEAT from initiation, assessment, issuing and further management of the permit.
The Department has developed the Agro-processing portal which assist the primary producers and processors
to post their requests and primary produces responds to the posted request with the aim of ensuring that the
producers produces for markets based on the demands of the processors.
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The office of the DGITO has upgraded the current eVaya payment module to facilitate the payment of
invoices to ensure that the department meets that require 30 days payment cycle, these streamlined processes
reduced turnaround time in decision making in the department.
The office the DGITO continued to upgrade network by putting new network equipment in regional offices as
part of the implementation of the departmental IT Strategy and Disaster Recovery site in the East London
office to ensure IT business continuity in the event of a disaster.
FINANCIAL MANAGEMENT
The Financial Management sub-programme facilitates the provision of financial, supply chain, asset
management, and internal control services to the department. The sub-programme continued to provide
financial support to the department by ensuring that all statutory requirements are complied with in terms of
the Public Financial Management Act (PFMA) and related prescripts that led to improved spending and audit
outcomes. Within this context, the department is aiming to maintain its positive audit outcomes.
Over the past 8 years the Department has managed to get unqualified audit opinion, which it hopes to continue
during 2018/19. The financial management systems employed have been continually refined and improved
over the years. The under-expenditure in the 2018/19 financial year was approximately 1.6 per cent of the
budget.
Financial Management has embarked upon the lean journey in some of its operational areas and is looking to
continue developing and building a culture in which units are focused on the elimination of waste in which
cost containment measures have been rigorously implemented with increased management and monitoring
thereof. In other words, delivering services through streamlined processes that minimizes non-value-added
activities. A deliberate effort to continuously strengthen the control environment especially in the area of
financial management has still been a main source of focus during the year under review Training was
conducted on areas where weakness in internal controls have been identified. These include, amongst other,
training in irregular and fruitless expenditure, full financial management session and Ethics Awareness
sessions.
Compliance requirements continued to be integrated into the Department’s day-today operations. The
Department was able to submit the In-Year Monitoring reports to Provincial Treasury by the 15th of every
month as required by legislation. The rollover requests, the Medium Term Expenditure Framework, the
Adjusted Estimates of Provincial Expenditure and Estimates for Provincial Expenditure were also submitted
as required by the Treasury Guidelines.
Furthermore, all valid invoices were paid within thirty days in the year under review, which is an
improvement compared to the previous financial year. In line with the economic transformation the
department was able to award based on the procurement to BBBEE compliant suppliers. The internal control
activities ensure that the Department complies with laws and regulations with regard to financial management.
The activities undertaken during the period under review includes ensuring that, before payments are
authorised in the LOGIS or BAS system, all documents are checked and verified to comply with applicable
policies and regulations. The efforts and systems put in place to strengthen the control environment prove to
be effective, and this is evidenced by the reduction of the irregular expenditure incurred. Within this context,
the department is aiming to maintain its positive audit outcomes.
In efforts to excel its client service, finance, in conjunction with the line functions has introduced strategic
sourcing that is a collaborative and structured process in its procurement to realise value for money. In order
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to create an enabling environment that develops a positive customer service culture, the unit recognised that
officials had to be equipped with the relevant skills and knowledge to meet its objectives. This encouraged
Financial Management to coordinate and conduct various training programmes to staff with the specific intent
to capacitate staff on financial management processes.
CORPORATE SERVICES
The Directorate, Human Resources Planning & Practices (HRPP) consists of 4 (four) sub-directorates/ units,
namely: Human Resource Planning & Practices, Employee Health & Wellness, Labour Relations and Human
Resource Administration.
In terms of recruitment and selection, the Annual recruitment plan (ARP) could not be fully implemented due
to delays on the implementation of the structure which was approved in 2018. This has resulted to the vacancy
rate which is slightly above the norm, however in the second and third quarter of the year, the Department had
made strides in terms of ensuring the implementation of the ARP. As a result, 27 posts were filled, of which
thirteen (13) were filled within six (6) weeks. The vacancy rate could have been aggravated by staff turnover
but the Department has a very low staff turnover. In terms of achievement in the employment of people from
the designated groups, the department has made strides in terms of employment of women but constant efforts
still need to be made particularly with regards to employment of women at senior management level as well as
employment of PWD’s. The unit Employee Health & Wellness (EH & W) has been operating with only one
official who is at Practitioner level but despite the capacity challenges, the unit managed to deliver
successfully on all 4 pillars of EH & W with room for improvement. Labour Relations had serious capacity
challenges in terms of staff and training which had resulted to slow turn-around times in the finalisation of
cases and performance of the unit in general, for example the unit opened the year with a total of17cases and
of these10cases were finalised,7 still remain pending. This is aggravated by systems as well as budgetary
challenges. Leave Management has been a challenge but the introduction of monthly leave auditing has
yielded some positive results.
Office management and security
The four National Anti-corruption Hotline cases that were referred to the department by Public Service
Commission were all finalised in this financial year. The cases referred to the department from the
Presidential Hotline were finalised and closed by the Office of the Premier. Building at Beacon Hill has
become inhabitable due to gas and acid emitted when batteries in the Social Development section of the
building got damaged. The department through the building task team acquired new office space in King
Williams Town and Bhisho and the process is still ongoing.
Pre-employment screening and vetting documents are submitted to State Security Agency timeously for
purposes of minimising risks relating to departmental assets inclusive of departmental information and image.
Service providers are monitored through quarterly loco-inspections and meetings. Savings on expenditure of
security services was done by the department through facilitation and negotiation with the Department of
Public Works to take over the protection of its buildings allocated for use by the department. The savings are
at the range of four million a year over the next three years going forward.
Organizational Development
The Organisational Development, under Efficiency Services has loaded 521 Posts on the Persal fixed post
establishment as fixed permanent personnel pending the final Placement Panel decision for person-to-post
matching for the remaining 163 excess staff. The 2006 post establishment was abolished and all staff fully
migrated towards 2018 Organisational Structure. Furthermore, OD Unit has conducted three (3) Change
Management sessions as measure of anchoring the implementation of the Organisational Structure with
Programme 3, HRM Forum and Management Placement Committee including Organised Labour.
45
Human Resource Development has achieved a commendable performance by training 299 employees across
all levels in an effort to implement the Workplace Skills Plan (WSP). In terms of PMDS, performance
bonuses and pay progression for qualifying employees were processed and paid before December 2018.
Communications
Communications unit seeks to provide strategic support to the department in pursuit of its vision through
provision of sound internal, external communication and media services.
To achieve this, the unit has over the financial year put in place and approved communication strategy and
policy, updated its intranet (18) with the introduction of internal campaigns and updated website (35),
published sector content for publicity (55), profiled the programmes and campaigns in the mainstream and
community media (20) including holding media briefings.
Social media has been the other major highlight of the year with more than 100% increase in Facebook
community, from 4000 to now under 1000 000. DEDEAT and executive’s presence in the mainstream and
social media has also been evident.
Strategy to overcome areas of under performance
Indicator Short title Strategy to overcome under-performance
1 Organisational performance
index
This activity has been programmed to take place in 2019/20.
2 Financial maturity index Performance is fairly good. The department will put in place measures for enhanced revenue collection.
3 HR efficiency index Alternative arrangements will be made to ensure the HR assessment is
conducted in lieu of the 2018/19 financial year.
4 Customer relations index Efforts will be made to measure this in 2019/20 despite the lack of human and financial resources.
1.1 Average MPAT score This indicator is integrated in other performance outcomes of the various portfolios of the department. The measure in its current form is being discontinued by the DPME.
1.2 % network functionality Since the majority of staff has access to laptops, the department will be migrating to the Cloud system for mission critical systems to enable access to data and information.
1.6 % of staff complying with all
PMDS processes (contracts and
reviews)
More communication and guidance will be provided to staff including
implementation of consequence management for non-compliance. Sessional outcomes will be captured in Persal by the personal controllers.
Changes to planned targets
There were no changes to planned indicators and targets.
Linking performance with budgets
The performance indicators of the programme provide firstly an indication of overall organisational
performance and, secondly, measures of performance in the delivery of administrative service functions to the
rest of the Department. Therefore, there may not be a direct link between the performance of the programme
and the budget. The link is more indirect and reflected through compensation of employees, goods and
services etc.
46
Sub-programme Expenditure
2018/19 2017/18
Sub programme Final
Appropriation
Actual
Expenditure
(Over)/Under
Expenditure
Final
Appropriation
Actual
Expenditure
(Over)/Under
Expenditure
R'000 R'000 R'000 % R'000 R'000
1 OFFICE OF THE MEC 3,614 3,345 269 2,548 2,232 315
2 OFFICE OF THE HOD 61,895 55,408 6,487 68,176 64,192 3,984
3 FINANCIAL MANAGEMENT 109,527 108,774 751 102,790 98,247 4,543
4 CORPORATE SERVICES 58,546 57,361 1,185 59,276 55,249 4,027
TOTAL 233,580 224,888 8,691 232,790 219,921
12,869
The under spending on goods and services is as a result of late payment of Microsoft licences. The variance is due to
savings that have been realised through the implementation of austerity measures on S & T.
47
3.2 Programme 2: Economic Development and Tourism
Economic development is primarily responsible for administering sustainable economic policies and
developing appropriate strategies to promote business development and job creation. The overall goal of the
programme is to sustain economic development through partnerships.
This programme is structured as follows:
Sub-programme Sub-programme Purpose
2.1: Integrated Economic Development Services To support and develop business enterprises.
To promote economic growth and development of local economies with partnerships with key stakeholders by
aligning Local and Regional Economic Development (LRED) initiatives with government programmes.
To facilitate the process of empowerment and creation of an enabling business environment for PDIs.
2.2: Trade and Sector Development To facilitate trade promotion, retention and attraction of investment in priority sectors.
To facilitate implementation of National and Provincial Priority Programmes.
To create an enabling environment for the sustainable economic growth and development in prioritised and
emerging sectors in the Eastern Cape.
To drive implementation of programmes in these prioritised sectors: agro processing; Automotive; Green Economy; Manufacturing; and Tourism
2.3: Business Regulations and Governance To lobby for provision of a regulatory framework that addresses barriers in the broader business environment
To promote good corporate governance principles, stability and efficiency in doing business.
To develop, implement and promote measures that ensure the rights and interests of all consumers.
To promote and maintain an effective and efficient system for regulation of business, industries and sectors.
2.4: Economic Planning To develop evidence based provincial policies and strategies
which inform decision making processes.
To ensure accessible scientific information to inform economic policy and planning processes.
2.5 Tourism To create an enabling tourism environment through
legislation, policy and strategy development
To create demand and supply for tourism
To ensure sustainability and tourism sector transformation
Strategic Objective
SO2: Employment created through sustainable and inclusive economic growth and development.
48
Strategic objectives indicators, planned targets and actual achievements
Performance indicators planned targets and actual achievements
No
Performance
Indicator
Actual
Achievement
2015/2016
Actual
Achievement
2016/2017
Actual
Achievement
2017/2018
Planned
Target
2018/2019
Actual
Achievement
2018/2019
Deviation
from Planned
Target to
Actual
Achievement
for 2018/2019
Sub–programme: Integrated Economic Development
Enterprise Development
2.1
Number of
cooperatives provided with non-financial support
232 88 98 98
9413
-4
10Five industries shed a total of 69,000 jobs altogether namely agriculture, mining, utilities, trade and finance trade as one
of the key industries providing EC jobs shed a lot of jobs 39,000. 11Contraction in the secondary sector resulted in the slower GDPR growth rate. 12Manufacturing is a critical, value adding sector for the Eastern Cape. However, the sector has been underperforming over the last few years. This is with negligible growth in the province’s manufacturing sector during 2016 at 0.6% and a contraction to a negative growth of 0.2% in 2017, on the back of low domestic and international demand linked to poor
global prospects. Metals, metal products, machinery and equipment; transport equipment; and furniture and other manufactured goods are the major sub industries contributing to the poor performance of the manufacturing sector in 2017. On the other hand, construction also shrunk between the 2 financial years. 13The total number of cooperatives that have been supported for non -financial support for co-operatives is 94 against a
target of 98 for the period under review 2018/2019 financial year. Thus a progress of 96% has been registered for
performance of the KPI. The key challenge faced was the portfolio of evidence (POE) which was not aligned to the
TIERM and thus some information was discarded. Going forward, the Electronic Document Management System
(EDMS) will be implemented to ensure files are loaded in line with the TIERM and are easily retrievable for audit
purpose. More importantly training of staff will be done as well as resources provided for effectiveness.
Programme Name: Economic Development
Strategic Objectives Strategic Objective
Indicator
Actual
Achievement
2017/2018
Planned
Target
2018/2019
Actual
Achievement
2018/2019
Deviation
from Planned
Target to
Actual
Achievement
for 2018/2019
SO 2: Employment created through sustainable and inclusive economic growth and development
1 Employment Creation (Growth in employment - %)
-2.3 1.9 -1.210 -3.1
2 Eastern Cape Regional Economic Growth Rate (GDPR - %)
1.1 1.2 0.611 -0.6
3 Industry growth rate 7.96 1.0 0.9812 -0.02
49
Regional and Local Economic Development
2.2 Number of economic development
projects funded at local and regional levels
8 9 9 8 1614 +8
Sub-programme: Trade and Sector Development
2.3 Number of
sustainable energy initiatives facilitated
5 5 6 6
6
0
2.4 Number of manufacturing initiatives facilitated
3 8 7 7 7
0
2.5 Number of
agro-processing initiatives facilitated
N/A 2 3 4
4
0
Sub-programme: Business Regulations and Governance
Governance
2.6 Public entities accountability index
9 8.4 9.5 10
8.915
-1.1
Business Regulation
2.7 Number of
policy frameworks developed to enable the ease
of doing business
New indicator New indicator 5 3
3
0
Consumer Protection
2.8 Number of consumer education programmes implemented
6 6 6 6
6
0
2.9 Number of
participants reached
4 830 6 089 8 607 8 600
1141716
+2817
14 The over performance is due to unexpectedly high quality of LRED applications than was the case in prior years, which resulted in a wider pool of applicants that were approved for funding. 15The slight under-performance was due to the fact that out of the 4 scheduled Group meetings; only 2 were convened.
MEC met with the Public Entities’ Boards individually. Secondly, the two SEZs underperformed on manufacturing and construction jobs which impacted on the overall public entities accountability index score. The economy has generally been performing below expectation thus depressing job creation. 16Due to invitations received from various stakeholders and requests from regulatory bodies for collaborative education
programmes, the number of participants was exceeded.
50
Sub-programme: Economic Planning
Knowledge Management
2.10 Number of provincial economic intelligence reports produced
3 3 6 4 4 0
Sub-programme: Tourism
Tourism Planning
2.11 Status report on the implementation of sector
policies/ strategies
0 2 2 2
2
0
Economic Development and Tourism Key Achievements
Integrated Economic Development Services
Enterprise Development
Enterprise Development has a responsibility of developing policies, strategies, design of support programmes for
enterprises and monitoring implementation thereof. The implementation is largely rolled out through ECDC. Non-
financial support is rendered through DEDEAT regional offices.
Furthermore, the department has been tasked to incorporate the recommendations of the impact study on effective
funding of co-operatives in the province that was commissioned by the Provincial Treasury. The recommendations
includes institutional support e.g. mentorship, incubations, capacity building and market access which will ensure the
sustainability of co-operative enterprises, the design of responsive programmes that addresses the needs of co-
operatives at different stages of their cycle of development. A total of 94 co-operatives were provided with non-
financial support against a target of 98. The nature of support included training on co-operative governance,
technical support for compliance with statues and regulations of the principal co-operatives act no.14 of 2005, and
facilitation of funding for the co-operative enterprises that were expanding their businesses.
The department has supported 5 Co-operative Financial Institutions (CFIs) affiliated to National Association of Co-
operative Financial Institutions of South Africa (NACFISA) for a five days’ managers training programme that was
held in October 2018 in Durban. A total of 12 members participated including board members of the respective
CFIs. The training focussed on financial management and governance training which will assist the CFIs in
efficiently running their operations.
During the period under review the department has assisted a total of 682 companies for registration, annual returns,
electronic disclosures, address changes, issuing of BEE certificates, financial year end changes, registration of end
users through collaboration with CIPC for the establishment of Self Service Terminals (SSTs) at 6 DEDEAT
regional offices. The turnaround time for registration of companies has been significantly reduced to 48 hours. The
CIPC will soon introduce the registration of Co-operatives through the SSTs following the regulations of the
amended Act No6 of 2013 that have been gazetted in March 2019. The electronic system has made registration
process more accessible to communities including villages and affordable as it cut out the middleman and exorbitant
prices and red tape.
51
The global entrepreneurship week for 2018 was a success. This event has grown over the years, strengthened by
collaboration with key stakeholders that have a mandate for SMME development in the Province. The highlights for
2018 included the certification ceremony of 21 women in construction in Joe Gqabi district in collaboration with
NHRBC and CETA. Benefits of having the NHBRC registration certificate include:
Compliance with the Act.
Recognition by financial institutions as an accredited home builder.
Access to NHBRC mediation services.
Access to NHBRC training programmes and other building resources.
Through collaboration with SA Tourism Grading council and ECPTA service excellence and grading opportunities
in tourism workshop was held in Jeffrey bay in Sarah Baartman district. The targeted B&B’s in the district received
valuable information that will help with improving their businesses by taking up available services provided by these
institutions.
Through collaboration with ECRDA the dialogue on Entrepreneurship Chronicles was held in Mthatha targeting the
youth and ideas were shared on how to pitch & Polish your business concept for financiers and venture capitalist.
The event was limited to 50 enterprises. In Partnership with SEDA and Mbizana Local Municipality the department
hosted second annual pop up market and exhibition in Mbizana during the GEW 2018 that was graced by the
presence of The Mbizana LM Mayor. The private sector participated by sharing opportunities in terms of their
Enterprise and Supplier Development programmes.
In order to improve the sustainability of enterprises the department has developed the provincial strategic framework
for business incubation and intends to establish a fund for incubation. It is envisaged that the ring-fenced fund will
assist with the feasibility study for establishment of business incubators and resourcing the new and existing business
incubators that want to expand into other areas. Establish partnerships with private sector for sustainable operations
of business incubators in the province.
In line with the implementation of the SMME Strategy the department has established a Provincial Business
Chamber Forum for policy dialogue and coordination of support programmes for entrepreneurs in the EC
Province. The terms of reference were developed and adopted by the respective chambers that participate in
the forum and the launch will be in 2019/2020 financial year.
Local Regional and Economic Development
The strategic objective of Local and Regional Economic Development (LRED) is to promote economic
growth and development of the local economies in partnership with key stakeholders and by aligning LRED
initiatives with government programmes. The strategic focus of the LRED Unit is to create strategic
partnerships and support enterprises at the regional level and the local level, which are dedicated to and
capable of undertaking effective and integrated actions to stimulate the local and regional economies, generate
more and better jobs.
The purpose of LRED is to promote and administer sustainable economic development and employment
creation by supporting Eastern Cape based entities that aim to stimulate economic growth of the Province.
LRED involves an effort to actively integrate those groups that are marginalised or excluded by markets, from
the rural areas, youth, women and disabled.
On social exclusion, LRED is striving to make a critical contribution by bridging the gap between different
social groups at the local and regional levels. LRED aims to address opportunities that create value-
addition/beneficiation by connecting different groups at the local and regional levels.
52
The department has reviewed the Local and Regional Economic Development Fund Mandate and Policy
which structures DEDEAT’s LRED Fund. The aim of the DEDEAT LRED Fund is to promote and administer
sustainable economic development and employment creation by supporting Eastern Cape based entities that
aim to stimulate economic growth of the Province. In revising the policy, the focus is on supporting entities
operating or entering into the priority sectors as per the Provincial Economic Development Strategy (PEDS).
LRED Annual target was 8, however due to the quality of applications received the Unit have doubled this
number. An amount of R19 868 553 has been invested in these sixteen (16) SMME’s with some designated
groups i.e. women and youth owned within the Province and a good Return on Investment (ROI) is expected.
In terms of Socio-Economic impact, a total number one hundred and thirty-nine (139) jobs will be created
through this investment.
An official handover ceremony of all sixteen (16) LRED funded project for 2018-2019 Financial Year was
done by the Member of the Executive Council (MEC) responsible for the Department of Economic
Development, Environmental Affairs and Tourism (DEDEAT) Honourable L.O. Mabuyane on the 26 March
2019, in Mthatha under OR Tambo Region. Below is the list of all economic development projects funded at
local and regional level.
Trade and Sector Development
Sustainable Energy
Work of the DEDEAT sustainable energy unit includes the Independent Power Wind and Solar Farm Support
Programme; the Eastern Cape Mini grid Project (Incorporating the South African Wind Energy Programme
component); Small Scale Embedded Generation (Support to Municipalities) and Natural Gas Support
(Offshore Gas and onshore indigenous, with an immediate focus on the Gas to Power project at Coega). The
unit also supports localisation support for offshore bunkering
In respect to wind and solar farm support, so far the Eastern Cape has been awarded 16 wind farms and 1 solar
farm, in four procurement rounds, at an estimated value of R33.4 Billion. The Eastern Cape has significant
potential for economic growth through participation in this on-going build programme. DEDEAT has
supported the Utility Scale Wind and Solar Farm programme in three areas:
Supporting the establishment of wind farms in the EC (supporting wind farms in the former homelands,
Renewable Energy Development Zones, regulatory unblocking, wind farm – vulture challenges,
infrastructure support).
Support programme for SMME and Black Industrialist participation in the value chain.
Supporting and operating coordination and interfacing processes between wind and solar farms, local
government and communities – especially in relation to the rollout of socio-economic benefits from wind
farms.
DEDEAT has championed the Eastern Cape Mini-grid Project, which is being implemented in the Raymond
Mhlaba Local Municipality. The project represents a model for supplying high quality energy to deep rural
villages which are not due to be connected to the national electricity grid within the next five to ten years.
This represents a first of kind technical and institutional model for rural electrification. The project is not only
about electrification. It is also about crowding in training, livelihood development and local enterprise
development with contributions from multiple partners both from South Africa and Germany. It is a holistic
village development concept with high quality local energy as the backbone.
53
The project has completed its first phase of construction and has initiated the second and final phase of
construction under GIZ, which focuses on electronics, storage, back-up generation, reticulation and smart grid
management.
The Eastern Cape has prospects of 20 trillion cubic feet of gas in the form of indigenous onshore gas, and 26
trillion cubic feet of offshore gas. The recent “Brulpadda” billion-barrel gas condensate find in block 11B/12B
has confirmed the Eastern Cape offshore prospects as a significant petroleum province.
DEDEAT has been leading and supporting a provincial natural gas economy programme which has focussed
on:
Readiness for the Gas to Power plant located at Coega. This has included technical, permitting, logistics
and market studies;
Support for development of, and local participation and beneficiation in, a regional natural gas economy -
particularly for a regional gas economy which allows for participation of SMMEs and Black Industrialists;
Support for the National Strategic Environmental Assessment for a Natural Gas Pipeline;
Readiness for indigenous onshore gas, particularly at the local government level.
Manufacturing
Maritime Manufacturing
The unit has implemented a maritime manufacturing working group which aims to support and fast track
designated projects for the Eastern Cape. Transnet National Ports Authority (TNPA) has made significant
progress towards the upgrading of infrastructure for identified EC ports.
All infrastructure projects for port of Port Elizabeth have been completed. The Port has commenced with
investigating the maximization of existing cradle area to provide additional space to support the refurbishment
of the fishing industries boats. For the port of East London, the 1st phase upgrades is still in progress and is
planned to be completed in 2021. For the development of the maritime training college - a service provider
has been appointed for the design work and construction is planned to be completed end of Mar 2020.
For the EL Port boatbuilding cluster – the port area has been segregated into common pockets to be leased to
private sector for marine manufacturing related activities. Additionally, TNPA has commenced with the
conceptualisation of a ‘’green ship recycling’’ initiate to be implemented in the new financial year.
TNPA EL has initiated the development of a strategic business case to support the development / expansion of
the East London port. Various stakeholders have been engaged to strengthen a socio economic case to
enhance this business case. The manufacturing unit has implemented a research project – Socio Economic
Impact analysis to support inputs towards this business case. Project planned to be finalised by June 2019.
Automotive
The Department has partnered with the automotive component suppliers to establish the Eastern Cape
Automotive Industry Forum (ECAIF) in 2016. The ECAIF focuses strongly on enhancing the competitiveness
of the component manufacturers in the automotive supply chain with a future vision to drive the ‘’introduction
and strengthening of black industrialist’’ in this sector. A black supplier development programme developed
by ECAIF. As an element of this programme, a black manufactures day was held on the 1st June 2018 to
exhibit back manufactures and link them with purchasing units of the tier 1 companies. The day was a huge
success as ECAIF expected on ‘’60’’ participants, however more than 150 participants from various
automotive companies attended. This event will be annualised and ECAIF’s intend based on interest from
industry to have a similar day in East London for the future.
54
The National South Africa Automotive Master (SAAM) Plan 2035 has been finalised this year, which
additionally results in the reviewing of the Dti’s Automotive Production Development programme (APDP) –
incentives for this sector. Based on the policy change, the automotive sector need to respond to policy changes
as prioritised within SAAM 2035 or risk losing the incentives provided by Dti. In response, ECAIF launched
their new 4-year business strategy in Feb 2019 in East London and Uitenhage respectively. The strategy will
focus intensively on the introduction of ‘’15’’ new entrants / black industrialist to the automotive supply chain
over this 4 years.
ECAIF also commenced with the implementation of a ‘’world class operator’’ skills programme in Oct 2018.
Thus far, 83 youth have been trained through this programme from East London, Port Elizabeth and
Uitenhage area. These trainees will be utilisation for absorption within the automotive component sector in the
new financial year.
Light/ General Manufacturing
The Department has been supporting various initiatives to drive the diversification of the industrial sectors in
the Province:
Support to EC Manufacturing Companies in Distress
The Department acknowledges the deindustrialization trend within the Province and has implemented a web-
based ‘’Manufacturing Support Centre’’ as an instrument to log distress calls from affected companies and to
initiate interventions for these companies. ‘’7’’ distress companies have registered a ticket this far, with
support interventions being at various levels.
Additional to the above, the Job Stimulus fund hosted by ECDC has funded ‘’12’’ companies which resulted
in the saving of 808 jobs.
Non-Automotive Manufacturing (NAM) Cluster
The competitiveness of all sectors is critical to ensure the sustainability of the industrial base in the Province.
DEDEAT has partnered with chemical and plastics and metals sector to establish the Non-Automotive
Manufacturing (NAM) Cluster which is focusing on skills development, supplier development, energy
efficiencies, and market development to retain and grow the industrial sectors within Province.
The NAM Cluster has established its offices in East London and will implement a ‘’shared services Hub’’ for
at this site to support the NAM sectors with prototyping and commercialisation of new products in the next
financial year.
EC State-Owned Industrial Parks
The Department is working with DTI and other stakeholders towards the refurbishment of Industrial Parks
that may lead to the attracting of investment in these parks. For the financial year under review the following
progress has been made:
Fort Jackson - Phase 1 for security upgrades completed. Next phase still to be finalized and funding to be
pursued. A session was held with DTI and ECDC on the 11th of September 2018 on the ECDC submitted a
request to DTI to fund the refurbishment of buildings for the Expansion of Rehau Automotive linked to
MBSA W205 expansion plan in Fort Jackson. The company intends investing R300millionas part of this
expansion. ECDC still awaiting feedback from DTI’s Critical Infrastructure programme unit.
55
Vulindlela - Conditional approval of R49million received from Dti’s Critical Infrastructure Programme to
commence with Phase 2 infrastructure refurbishment in the park. Project will commence in new financial
year.
Komani Industrial Park - Phase 1b – R 45.32 million funding approved by DTI for implementation by DBSA
in 2018. Project will commence in the new financial year.
Dimbaza: Phase 1- R49 million funding approved by DTI for implementation by DBSA. For this phase,
engineers have been appointed, assessment and inception report has been completed and project
implementation to commence in the new financial year.
Agro processing
The Department has previously led the establishment of the Provincial Agro Industry Development Forum for
the coordination and alignment of the sector stakeholders so as to provide focussed support and realise
meaningful impact through the respective programmes. The Forum has produced a Provincial Agro Industry
Development Action Implementation Plan which is awaiting final approval by the Provincial EXCO so that it
can be rolled-out. The intention is grow the agro industry contribution to the provincial by 20% within the
next 5 years, through building local value chains and provide for local value addition and reduction of
agricultural products imports, especially those that can be produced competitively by the province. Amongst
the pillars of the plan is agricultural land utilisation monitoring, industry research and development as well as
business and entrepreneurship development.
The Department has continued supporting the Agro Industrial Manufacturing (AIM) Cluster through the
development of an Agro Industry Market Intelligence Portal in collaboration with the State Information
Technology Agency (SITA). The portal is providing a demand and supply meeting platform for the processors
and farmers in the province so as to ensure that there is informed production while enabling the agro
processors are linking with the local producers and thereby increasing the sourcing of raw materials locally.
The portal is now live at www.eservices.gov.za. As part of rolling-out the programme, Agro Industry
Stakeholder Sessions were organised and held in Port Elizabeth and King Williams Town, presenting what the
Agro Industry Market Intelligence Portal offers and was appreciated. The sessions will be held in the other
districts as well in the next financial year.
As part of developing the local industry value chains, a feasibility study and business plan for 6 District Fresh
Produce Multi-user facilities was done. The facilities are to provide for packaging, market and processing
under one-roof or virtually instead of a single post-harvest facility. Secondly, the facilities will provide for the
participatory shareholding of farmers thus encouraging the development of new entrants in industry especially
the historically disadvantaged farmers. The report indicated that an investment of R54.5 million is required to
establish the nine facilities in the districts and 1 012 permanent jobs and 1 687 seasonal jobs will be created.
The next step is to facilitate the roll-out of the facilities working with the existing agro industry hubs such as
RED Hubs, Agri-parks, Fresh Produce Markets and Industrial Parks and linking up with the local retailers and
food industry players.
The establishment of the Wild Coast Special Economic Zone is getting closer to realisation as the land for
development was secured with the Link Community next to the Mthatha Airport and an Environmental
Authorisation was granted. The next step is to submit the application for designation which will then provide
for the development of a Agro Industrial Complex for the Wild Coast region, thus stimulating the
development of the agriculture industry in the region and create the much needed jobs.
56
Business regulation and governance
Regulation Services
The objectives that are of specific relevance to regulation services include lobbying for provision of a
regulatory framework that addresses barriers in the broader business environment, promote stability and
efficiency in doing business. The related aspects of these objectives is maintenance of an effective and
efficient system for regulation of business, industries and sectors which demands a review of the gambling
and liquor legislation.
Therefore, the number of policy frameworks developed to enable the ease of doing business indicator relates
to the two specific objectives. The initiatives that were undertaken during the 2018/19 financial year was an
ongoing persuasion of local municipalities to consider adopting policy models that that have potential to
inspire business confidence in their respective areas of jurisdiction and which over some form of incentives to
investors. It is in line with these objectives that a draft investment incentive policy framework, was developed
which the municipalities could review and elect to adopt or adapt. In addition, the department committed to
support local municipalities towards proclamation of bylaws that are essential to regulate business and trading
with the aim of creating a stable business environment which is essential to optimise collecting of revenue.
The Raymond Mhlaba Municipality benefited from this commitment as the department approved a request of
this municipality to procure and pay for the cost of proclamation in the government gazette seven bylaws on
its behalf. However, printing is taking a longer period than was anticipated.
Governance
Board effectiveness evaluation was in the process of being conducted to improve the performance of the Board
and, in so doing, improve the public entities’ performance. The department managed to have stakeholder
engagement, amongst others, the MEC and the Chairpersons of the Board quarterly meetings to discuss policy
and strategic issues, Head of the Department and the Chief Executive Officers quarterly meetings to discuss
performance. The MEC appointed members to most vacant positions to ensure governance and performance.
The governance reports were prepared on a quarterly basis to monitor board meetings and compliance in terms
of the Corporate Plans and Service Level Agreements with public entities.
Inter-governmental Relations
The department takes part and maintains firm intergovernmental relations through a number of national,
provincial and local government structures as well international partnerships. In the Buffalo City Metropolitan
Municipality (BCMM) and Nelson Mandela Bay Municipality (NMBM) and District Municipalities the
following issues were noted:
Inadequate execution of Operation Masiphathisane in the Metros
lack of political leadership in the BCM and NMBM. The MEC for COGTA has been assigned to assist
Poor attendance by sector departments, districts were urged to name and shame those departments.
Meetings were held to discuss schedule A and 4 of the Constitution, along the lines of defining the mandate of
government and also ensuring that planning is bottom up not vice versa. Municipalities that do not report on
EPWP on attendance and skills transfer), they do not get funding. Spatial planning is also an area that will be
looked at. There is a lack of integration and working together in the way in which government is currently
working around household profiling. The impact on the ground regarding social grant is not maximum, as it
looks like it does not uplift the livelihood of the beneficiaries and local businesses/ SMMEs.
57
A number of activities were carried out including the DEDEAT engagement of WSLM and Mbashe Local
municipalities with the view to assist them with the promulgation of its by- laws. All previously funded
businesses were visited to assess the impact of the LRED funding while Mbhashe Local Municipality
submitted a request for the gazetting of by- laws in order to fulfill its legislative authority and to have
enforceable by- laws.
The Unit participated in the Regional Directors Forum where key issues raised relate to strategic decisions that
affect service delivery projects such as incapacity of municipalities to spend grants, improvement of
coordination of Local Economic Development in the districts, and illegal dumping in most municipalities.
The Unit participated in the Small Town Forum and Public Entities Forum where coordination of
intergovernmental relations between municipalities and stakeholders to encourage planning for alignment of
development initiatives for effective service delivery takes place. As part of international relations, DEDEAT
and the Jackson School Geosciences were tasked to develop a joint concept paper, which is work in progress.
This will culminate in technical assistance and cooperation program on shale gas fracking.
Office of the Consumer Protector
Consumer Complaint Support
In terms of the Operational Plan, the Service Delivery Improvement Plan and Section 84 of the Consumer
Protection Act (Act no. 68 of 2008) the Office of the Consumer Protector is required to provide consumer
complaint support. The Office is responsible for the facilitation of the mediation and conciliation of consumer
related complaints between residents and businesses carrying on business exclusively within the Province.
Due to the interactive relations between the Office of the Consumer Protector and National Regulators and
Ombuds, the Office is a conduit for complaints received that fall outside the jurisdiction of the Office of the
Consumer Protector and refer all complaints to the Regulator / Ombud with the requisite jurisdiction.
The Standard Operating Procedures, Electronic Case Management System linked to the Sharecall centre and
the receipt of complaints by email have improved the turnaround time for the resolution of complaints. Below
is a table setting out the statistics for consumer complaint support, which indicates that the percentage of
complaints received / resolved is at 91%, which indicates performance over the operational target of 75%.
28 Complaints were open at the end of the 2017/2018 Financial Year. During the 2018/2019 Financial year,
474 complaints were received and registered on the Electronic Case Management System. 458 Complaints
were Resolved leaving 44 Complaints open at the end of the Financial Year.
Improved relationships with Regulatory Bodies ensures that complaints are referred within 7 days of receipt
should the complaint not fall within the jurisdiction or mandate of the Provincial Office of the Consumer
Protector.
Region Open at 1
April 2018
Received Resolved Open at 1
April 2019
ALFRED NZO 1 92 91 2
AMATHOLE 7 70 67 10
HEAD OFFICE 2 65 63 4
SARAH BAARTMAN 14 169 167 16
58
CHRIS HANI 2 25 24 3
JOE GQABI 0 26 26 0
O R TAMBO 2 27 20 9
TOTAL 28 474 458 44
The Eastern Cape Consumer Protection Act, 2018 (Act no. 3 of 2018) was assented to during March 2019.
Regulations are being drafted and once finalised, the Act will be promulgated and Regulations will be
published for public comment. The commencement of the Act will lead to improved consumer complaint
support in the province, with additional enforcement functions and powers being provided for the Office of
the Consumer Protector, together with the establishment of the Eastern Cape Consumer Tribunal with
administrative powers to adjudicate breaches of the Consumer Protection Act.
Co-operative Activities
During the 2018/2019 financial year, the Office of the Consumer Protector, together with the Business
Regulation and Governance Unit supported the Eastern Cape Provincial Legislature, Portfolio Committee for
Economic Development with the following public hearings throughout the Province:
1. Eastern Cape Consumer Protection Bill.
2. Eastern Cape Liquor Authority Bill;
3. National Credit Amendment Bill; and
4. National Gambling Amendment Bill.
The National Credit Regulator (NCR) approached the Sarah Baartman Region Office of the Consumer
Protector to conduct joint operations.
SASSA was identified as a key stakeholder and assisted with the joint operation as the majority of cards
retained unlawfully by credit providers were SASSA cards.
The joint operation consisted of raids, where a search warrant is obtained and all prohibited instruments such
as bank cards, identity documents, SASSA and other cards are seized by the South African Police Services
(SAPS) and taken into evidence in order to prosecute a criminal case.
The outcome of the operation held during February 2019 is as follows:
Jeffreys Bay – 69 bank cards, 36 Identity documents, 6 SASSA Cards and 1 passport seized and a
criminal case opened.
Somerset East – 223 SASSA and various cards and a criminal case opened.
Humansdorp – 430 Prohibited instruments found and 2 criminal cases opened.
The operations were successful and the NCR has earmarked the Eastern Cape for further operations.
Consumer Education
The Office of the Consumer Protector in the Province of the Eastern Cape is responsible for the enforcement
of the Consumer Protection laws that apply in the Province and does so through various mechanisms such as
the amicable resolution of consumer complaints by utilising alternative dispute resolution mechanisms,
capacity building and awareness creation relating to Consumer Protection and the promotion of voluntary
compliance by business. The overall purpose of Education and Awareness Programmes is therefore to provide
access to efficient and effective redress for consumers through education and awareness creation. The Office
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of the Consumer Protector utilises tools such as media releases/ consumer alerts, workshops, active
engagement of the community and other partners, print and radio as well as the production of information
brochures.
During the year, the Office of the Consumer Protector worked in collaboration with sister regulators to ensure
that consumers are able to be aware of their rights in terms of other Consumer Related Legislation and that
they are able to utilize the Office of the Consumer Protector as a conduit for referral of their complaints to
National Ombudsman and Regulators. In terms of the Annual Performance Plan 6 awareness campaigns under
the following themes were conducted:
Services Offered by the Office of Consumer Protector - Consumers were made aware of services
offered by this office as well as those of accredited National Ombudsman and Regulators who have no
Provincial footprint. For the campaign, 34 awareness sessions wherein 2 193 attendees were exposed
to consumer education, were conducted.
Financial Literacy - The Financial Literacy Education Programme consisted of a number of
workshops that occurred in the Province which were aimed at educating attendees on good financial
skills, the importance of budgeting as well as creating awareness of Consumer Rights as contained in
the Consumer Protection Act. Fourteen Education Workshops on ‘Financial Literacy’ were conducted
throughout the Province exposing 1 483 attendees.
Know Your Rights - The ‘Know Your Rights’ Education Programme workshops that occurred in the
Province were aimed at creating awareness of Consumer Rights as contained in the Consumer
Protection Act as well as informing consumers of Responsibilities when transacting with businesses
and creating awareness of the services offered by the Office of the Consumer Protector. Businesses
were also educated on acceptable standards in terms of The Consumer Protection Act. Forty
Education Workshops on ‘Know Your Rights’ were conducted throughout the Province reaching out
to 2409 Participants.
The Right to Fair Value, Good Quality and Safety - Following the country-wide media reports which
showed the widespread sale of counterfeit and expired consumer goods, the Office of the Consumer
Protector had to embark on a vigorous campaign for Education Programme 4 and requested the
approval of The Head of Department to run the programme until the end of the financial year and
report on it in Quarter 4. 32 workshops were held in support of this Programme and 2388 Participants
were reached.
The Spend Wisely Campaign - While the Consumer Protection office acknowledges the spirit of
giving that characterizes the Christmas season, we believe that responsible spending without incurring
debt is a far healthier option for any household. South Africans often hit the festive season as if it is
the end of time, choosing to ignore the looming financial responsibilities, such as school fees and
other bills that come only too quickly in the New Year. Twenty seven Education Workshops wherein
2 449 participants were reached during the ‘Spend Wisely’ Campaign.
Growing The Economy Through Tourism - The aim of these workshops was to capacitate
stakeholders on compliance with The Consumer Protection Act and to create awareness on illegal
display of Tourism Grading Council of South Africa (TGCSA) stars and various benefits of grading.
The unit is aware of the problems encountered by consumers in accessing value-for-money services in
the tourism industry and difficulties encountered for redress when required. This campaign was
therefore an attempt to raise awareness and to bring services to the consumers and also provided a
platform wherein consumer rights and responsibilities as well as responsibilities of businesses were
discussed. 7 workshops were held in support of Education Programme 6 and 495 Participants were
reached.
60
The Public Service Month campaign in Nelson Mandela Metro during September 2018 also created a platform
to create awareness and to take the services of the Office of the Consumer Protector to the people.
The following National Regulators participated in some of the workshops during the year:
Motor Industry Ombud of South Africa (MIOSA);
Independent Communications Association of South Africa (ICASA);
South African Revenue Services (SARS);
Rental Housing Tribunal (Eastern Cape);
National Credit Regulator (NCR);
The Masters Office (Department of Justice).
Financial Sector Conduct Authority (FSCA);
National Energy Regulator of South Africa (NERSA);
Council for Debt Collectors (CDC);
Consumer Education Officials ensured that consumers are aware of how to contact the Office of the Consumer
Protector, either by visiting the Regional Offices, emailing, faxing or lodging a call with the Consumer
Protector Share call Centre were held throughout the Province of the Eastern Cape. During and after the
workshops, a table with the Consumer services material was set to attend to consumer queries and new
complaints.
Economic Planning and Research
DEDEAT Innovation Programme
The Department continues to support implementation of the Provincial Innovation Strategy. The work is
rolled out in partnership with the ELIDZ Science and Technology Park.
Support to Incubation Programme
The ECDC coordinates Incubation Programme. During the year under review, the Department further
supported Chemin and ECITI. With regards to ECITIa total of six prototypes were prioritised.
Eastern Cape Economic Review
This publication provides a bi-annual economic overview of the performance of the Eastern Cape economy.
The intention is for readers to be taken on a guided tour of the latest ‘facts and figures’ of the provincial
economy. The publication provides a concise but broad overview of the provincial socio-economic landscape.
The data used is from a range of sources, but mostly from Statistics South Africa and the South African
Reserve Bank. At times, regionally forecasted data is drawn from Quantec and Global Insights databases.
Every effort has been made to provide the reader with the latest data available. Importantly, the EC Economic
Review represents a collaborative research partnership amongst numerous Economic Researchers in the
province – and henceforth provides a holistic provincial perspective. In 2018, two editions were released 2017
Q3 & Q4 and 2018 Q1 & Q2.
Real Investment Monitor
This publication provides a concise and easy to interpret overview of recent real investment trends in the
province. There is a statistical section which monitors capital formation, business confidence and economic
growth; this is supported by a media monitoring section which provides headlines of noteworthy investment
61
announcements in the media during specific quarters. The Real Investment Monitor was completed and
circulated, highlighting improved business confidence index and progress on investment announcements.
Quarterly Economic Dialogue
Policy Dialogues create a platform for discourse on policy and development issues affecting the province and
year two sessions were hosted on agro-industry as well as Women in ICT. For each, crucial stakeholders were
hosted for a meaningful opportunity to share information for coordinated efforts around interventions for both
sectors. Each policy dialogue had 3 objectives to meet, identifying challenges and opportunities, policy review
needed and having outputs of these policy dialogues being instrumental as planning tools going forward.
Provincial Economic Stimulus Programme
Consistent with the national trend and the country entering a downward phase of the business cycle, the
Eastern Cape province experienced an acute drop in the GDP-R growth rate over the last decade from a high
growth rate of 3.7% per annum in 2011 declining to 0.6% in 2017. Continued lowly economic growth has
likely resulted injob losses and reduced per capita income levels in the province. Reduced per capita incomes
often manifest in a widening of income inequality and increase the risk of lower income households either
becoming poor or falling deeper into poverty. Whilst projections for the coming years are indicative of an
upward turn in the business cycle with provincial growth rate projected at 1.3% for 2018, 1.6% in 2019 and
1.8% in 2020; the combined frail national and provincial macroeconomic outlook have threatened the
sustainability of provincial fiscal framework.
This combination of outlooks has since resulted in constrained public finances which has not only further
pressurised provincial revenue collection but also manifested in inability of provincial government to expand
its investment in economic and social development and therefore inability to meet growing demand for
government services such as health and education. This has necessitated the provincial government to rethink
and further reprioritize effective models of service delivery, hence the establishment of the Provincial
Economic Stimulus Fund (PESF).
The PESF will fund catalytic economic development initiatives and projects aimed at unleashing opportunities
that grow the economy, enable economic development, trade and investment promotion.
Eastern Cape Investment Conference
ECSECC in collaboration with DEDEAT, ELIDZ, Coega, IDC and Provincial Treasury hosted The Eastern
Cape Investment Conference on the12th February 2019, in East London. The conference aimed to capitalise on
processes flowing from President Ramaphosa’s National Investment Conference that took place in October
2018 and attracted nearly R290 billion in investment pledges. The President aims to attract investments of
$100bn to the country by 2023.
The objectives of the Conference included:
Discussions on the Presidential process and benefits this province can gain from it
Popularizing current provincial economic development processes that would match with and enhance the
national investment programme. These included the Provincial Stimulus Package and programmes on the
Oceans Economy, infrastructure, the Fourth Industrial Revolution, agro-industrial development,
government revenue enhancement and skills development.
Tourism Development
The performance of the tourism subprogram during the 2019/20 financial year has been satisfactory and this
can be attributed to improvement in coordination between the three spheres of government and effective
collaboration between the Department of Tourism and the private sector.
62
The following skills development projects were implemented in close collaboration with Department of
Tourism
33 youth successfully completed a Food Safety Learnership and most of them were employed at the
Cecilia Makiwane Hospital which was able to record for the first time more than 100% decrease in food
waste.
18 youth completed a Tourism Resource Efficiency Learnership was implemented in partnership with the
National Cleaner Production Centre. This contributes to inculcating a culture of responsible tourism
practices, which will lead to increased awareness and pro-active action to reduce the industry’s carbon
footprint.
164 youth are participating in a Fast Food Services Learnership is still continuing in Mthatha, East
London, Mbizana and Port Elizabeth and King Williamstown. The programme will be completed in
September 2019.
86 youth from all the municipalities across the province were successfully mobilised to participate in the
Tourism Data Collection Project. Training will start in April 2019.
185 youth participating in the Tourism Safety Monitors Program funded by the Department of Tourism
and the training is still continuing.
Women in Tourism Eastern Cape (WITEC) Chapter was launched in August 2019 and is designed to
accelerate the transformation agenda in the tourism industry with women rising to greater heights. 5 branches
are now operational across the province and the membership is growing at a fast rate.
Collaboration with Department of Tourism on the implementation of Operation Phakisa (Coastal and Marine
Tourism) in the following projects:
R21 million secured for the development of economic infrastructure in 6 beaches in the Wild Coast and
Port Alfred.
Completion of the Wild Coast Trail from Port St. Johns to Coffee Bay including the construction of an
overnight.
R1million for the development of a 20 year Coastal and Marine Tourism Master Plan for the Wild Coast
Tourism Corridor starting from Coffee Bay to Port St. Johns. This will also include the major
infrastructure development implemented by SANRALL to maximize on the tourism related opportunities
arising from such huge investment.
50 beaches were selected to be part of the Tourism Green Coast Program with 113 youth t participating in
the 24month learnership programme.
7 beaches participated in the Blue Flag Programme with 45 youth completing the 18month learnership
program
Key major initiatives towards the development and promotion of heritage tourism are as follows:
R57.7 million from Department of Tourism towards the development and construction of the
Baviaanskloof World Heritage site.
Launching of the Cradock Four Garden of Remembrance at Inxuba Yethemba Municipality on 21 March
2019 by the Minister of Tourism.
Hosting of Religious Heritage Dialogue in Keiskammahoek as part of the programme of the Religious
Heritage Expo championed by the South African Council of Churches. The session further affirmed the
need to raise awareness on religious tourism as one the key drivers of domestic tourism.
63
Successful hosting of the 2018 World Tourism Day Celebrations in September in Mthatha attracting more
than 1000 people and receiving a funding commitment valued at R45 million from NDT for the dining
facilities and additional chalets the Cape Morgan Nature Reserve over a period of 3 years.
On the low side, the state of roads leading to the major tourist destinations remains a major challenge and
impacts negatively on domestic tourism performance. Also the integration of the Provincial Brand and the
Provincial destination brand has not materialised pending the finalisation of the Home of Legends by the
Office of the Premier.
Strategy to overcome areas of under performance
Indicator Short title Strategy to overcome under-performance
1 Employment Creation
(Growth in employment - %)
This is a reportable indicator whose performance is sourced from the
Statistics South Africa and/ or IHS- Markit. The department has no control and output is dependent on the performance of the economy.
2 Eastern Cape Regional Economic Growth Rate (GDPR - %)
This is a reportable indicator whose performance is sourced from the
Statistics South Africa and/ or IHS- Markit. The department has no control
and output is dependent on the performance of the economy.
3 Industry growth rate This is a reportable indicator whose performance is sourced from the
Statistics South Africa and/ or IHS- Markit. The department has no control
and output is dependent on the performance of the economy.
2.1 Number of cooperatives provided with non-financial
support
Further training on TIERM requirements and PoE management will be made with enterprise development staff. Electronic Document Management
System (EDMS) will be implemented to ensure files are loaded and easily retrievable.
2.6 Public entities accountability index
The department will strive to ensure that all MEC-board chairpersons meetings take place as scheduled.
Changes to planned targets
There were no changes to indicators and targets in 2018/19.
Linking performance with budgets
The performance indicators of the programme provide firstly an indication of overall organisational
performance and, secondly, measures of performance in the delivery of economic development programme
functions. Therefore, there may not be a direct link between the performance of the programme and the
budget. The link is more indirect and reflected through compensation of employees, goods and services etc.
64
Sub-programme expenditure
2018/19 2017/18
Sub programme Final
Appropriati
on
Actual
Expenditu
re
(Over)/Un
der
Expenditur
e
Final
Appropriati
on
Actual
Expenditu
re
(Over)/Un
der
Expenditur
e
R'000 R'000 R'000 R’000 R'000 R'000
1
INTEGRATED ECONOMIC DEVELOPMENT
SERVICES
230,859 229,216 1,644 168,513 160,395 8,118
2 TRADE AND SECTOR DEVELOPMENT 222,153 217,738 4,415 269,036 262,438 6,599
3 BUSINESS REGULATION & GOVERNANCE 139,156 138,667 489 133,835 131,783 2,052
4 ECONOMIC PLANNING 2,666 2,498 167 5,655 4,852 803
5 TOURISM 11,778 10,489 1,289 10,008 9,877 131
TOTAL
606,612
598,608
8,005
587,047
569,345 17,703
Goods and Services and Payment of Capital Assets
Non-payment of SITA for departmental systems (BAS, Persal Logis and Internet) inclusive of E-Permit.
Management Fees were also affected as they are paid according to 10% work that has been completed and verified.
The variance is due to savings that have been realised through the implementation of austerity measures on S&T.
There was under spending on the Infrastructure projects caused by incomplete municipal housing beneficiary list.
Transfers and subsidies
The Programme transfers to all six Public Entities as well as Business Enterprises funded under the LRED.
There are monitoring structures established to monitor these transfers. For the Public Entities, quarterly
performance review meetings are held to monitor progress on the achievement of set Key Performance
Indicators. This process is further enhanced with Portfolio of Evidence.
With regards to LRED transfers, a total of sixteen (16) business enterprises were transferred to. Unfortunately
additional two could not be completed due to a system failure of the Centralized Supplier Database (CSD).
3.3 Programme 3: Environmental Affairs
Environmental Affairs administers environmental policies that are cascaded down from national level in line
with the mandate of the Department. Importantly, it regulates environmental management through instruments
such as the environmental impact assessments, compliance and enforcement and biodiversity management
tools.
The programme is structured as follows:
Sub-programme Sub-programme purpose
3.1: Policy Co-ordination and
Environmental Planning
To establish legislation, policies, programmes, procedures and systems that
will effectively empower and support the core functional programmes.
3.2: Compliance and Enforcement To ensure that environmental legislation is effectively used to protect the environment and its resources from unlawful and unsustainable exploitation and negative impact.
65
3.3: Environmental Quality Management
To strive towards a safe and healthy environment through effective environmental impact assessment, air quality management, waste and pollution management for the people of the Eastern Cape.
3.4: Biodiversity Management To conserve the diversity of landscapes, ecosystems, habitats, biological
communities, populations, spices & genes and promote conservation and sustainable use of natural resources in the Eastern Cape.
3.5: Environmental Empowerment Services
To empower and capacitate the external stakeholders of the Department to meaningfully participate in and contribute to effective environmental management.
Strategic Objectives
SO3: Climate change resilient and lower carbon footprint province
SO4:Maintenance and sustainable use of provincial ecological resources
Strategic objectives indicators, planned targets and actual achievements
17There was no performance because the Draft Climate Change Bill requirements are significantly different to what has
been developed. This means that a significant amendment is required to the Climate Change Strategy as a result a
decision was taken to suspend this process until the Climate Change Bill is finalised. 18The revised National TOPS List was submitted to the National Assembly by the Department of Environmental Affairs (DEA) Minister for approval with no indication of when the list will be approved.
Programme Name: Environmental Affairs
Strategic Objectives
Strategic
Objective
Indicator
Actual
Achievement
2017/2018
Planned
Target
2018/2019
Actual
Achievement
2018/2019
Deviation from
Planned Target
to Actual
Achievement
for 2018/2019
SO 3: Climate change resilient and lower carbon footprint
province
1
Air Quality Management
systems, processes and measures implemented
New Indicator
Stakeholder consultation
on options for a
provincial climate
change response strategy
conducted
017
No stakeholder
consultation on options for a
provincial climate change
response strategy were
conducted
SO 4: Maintenance and sustainable use of provincial ecological resources 2
Status of specified species
0 Critically
endangered 018
No report on critically
endangered species was generated
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Performance indicators planned targets and actual achievements
No. Performance
Indicator
Actual
Achievement
2015/2016
Actual
Achievement
2016/2017
Actual
Achievement
2017/2018
Planned
Target
2018/2019
Actual
Achievement
2018/2019
Deviation
from
Planned
Target to
Actual
Achievement
for
2018/2019
Sub-programme: Environmental Policy, Planning and Co-ordination
Intergovernmental Coordination, Spatial and Development Planning
3.1 Number of inter-governmental sector tools reviewed
45 0 39 39 1919 -20
Legislative Development
3.2 Number of legislated tools developed
- 4 0 1 1 0
Research and Development Support
3.3 Number of environmental
research projects completed
- - 0 - -
-
Environmental Information Management
3.4 Number of functional environmental
information management systems maintained
5 3 1 1 020 -1
Climate Change Management
3.5 Number of
climate change response interventions implemented
- - 0 - -
-
19 This indicator is dependent on the invites from the Eastern Cape COGTA. The Eastern Cape COGTA sent invitations to departments very late for procurement processes to be finalised timeously leading to less participation by Regional Offices of the Department. Although some participation took place (less than the projected target of 39), portfolio of evidence was not fully aligned to the TIERM guideline. 20 SITA delayed in finalising the Biodiversity E-permit system Phase 2 as they put it on hold without advising the department. It has been resuscitated with the plan that it should be live by the end of Q1 of 2019/20 financial year.
67
Sub-programme: Compliance and Enforcement
Environmental Quality Management and Compliance and Enforcement
3.6 Number of administrative
enforcement notices issued for non-compliance with
environmental management legislation
115 118 89 68
6421
-4
3.7 Number of completed
criminal investigations handed to the NPA for
prosecution
New indicator
New indicator
55 50
5722
+7
3.8 Number of compliance inspections conducted
145 7 7 88 7723 -11
Biodiversity Management, Compliance and Enforcement
3.9 Number of s24G
applications finalised
- 15 3 6 124 -5
Sub–programme: Environmental Quality Management
Impact Management
3.10 Percentage of complete EIA applications
finalised within legislated time frames
98 97.3 100 98% 99.2% +1.2%
Air Quality Management
3.11 Percentage of atmospheric emission licenses issued within legislated time frames
98 100 0 100%
100%
0
21 This indicator is demand driven. It is difficult to predict the number of contraventions during a quarter, particularly those that require administrative action to be used as the preferred enforcement tool. 22 It is difficult to predict the number of contraventions and extent of the subsequent nature of investigations to prove criminal cases and the availability of resources. Access to working tools, extra manpower from SAPS, DAFF and DEA
assisted in increasing the number of completed cases for submission to the NPA. 23 It is a challenge to predict the number of compliance monitoring inspections that will be undertaken as the nature of environmental transgressions results into time consuming investigations to prove criminal cases. The availability of operational resourcesis also a challenge. 24The indicator and target are demand driven and the Unit cannot determine in absolute terms how many S24G applications will be finalised with records of decisions being made. The original target was made based on the information on cases at hand, as well as previous performance on the same indicator.
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Pollution and Waste Management
3.12 Percentage of waste licence
applications finalised within legislated time frames
98 75 83.3 98 100%25 +2%
Sub-programme: Biodiversity Management
3.13 Number of
permits issued within legislated timeframes
9 500 9 519 1 167 1600 99426 -606
Sub-programme: Environmental Empowerment Services
Environmental Capacity Development and Support
3.14 Number of work opportunities
created through environmental programmes
600 954 921 350
36327
+13
3.15 Number of environmental capacity building activities conducted
29 29 31 25
3228
+7
Environmental Communication and Awareness Raising
3.16 Number of environmental
awareness activities conducted
25 33 28 28
3329
+5
3.17 Number of hectares in the
conservation estate30
606 135
(added 25 900 ha)
0 67 887 ha31 18 050 ha 1 748 ha32 -16 302 ha
3.18 Percentage of area of state managed protected areas assessed with a METT-SA score above 67%
20%(3) 93% 100%(15) 67%(10) 100% (15)33 +33% (5)
25Applicants that submitted all the required information were efficiently finalised within legislated timeframe. 26 The target cannot be predicted with accuracy since it is demand driven. 27Environment EPWP Projects were implemented by all municipalities as planned. 28The programme responded to requests for capacity building hence the achievement above target. 29The programme responded to community requests for environmental awareness hence the achievement above target. 30ECPTA, a public entity of the department, is the driver of this indicator. The stewardship programme has been utilised to increase the protected area estate. The Provincial National Protected Area Expansion Strategy (NPAES 1.2 in ECPTA) targets must increase and maintain the conservation estate. The indicator therefore measures the increase in the size of the Province’s land coverage which has been declared/proclaimed to be under formal protection. 31 The properties prepared but not declared in 2016/17 are included in the 2017/18 results. 32 The target was not achieved due to boundary issues that require the intervention of the land surveyor, mining rights
issues from the Department of Mineral Resources (DMR), property transfers, and correspondence challenges with overseas landowners. The extent of the remaining properties to be declared is 12 903,5841 ha and these properties will be
submitted for declaration during the course of the 2019/20 year as they become ready. 33The target has been exceeded due to successful implementation of reserve specific METT turnaround plans that were initiated in the previous financial year. The average METT score across ECPTA managed reserves is 75%.
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3.19 Number of Biodiversity
Economy initiatives implemented34
New
Indicator
New
Indicator
1 1 135 0
Environmental Affairs Key Achievements
The Environmental Affairs programme has been instrumental in areas of environmental compliance and
enforcement, environmental quality management, biodiversity management and empowerment services. The
following key achievements should be noted:
Policy Co-ordination and Environmental Planning
The Provincial Hunting Proclamation was finalised and gazetted that contributed to the effective regulation of
wildlife industry in the Province. EC COGTA organised and hosted the Provincial IDP Review Analysis
Session in Q4 instead of Q2 but Managers were able to participate at such a short notice. The Eastern Cape
3rd edition of the Environmental Implementation Plan for the Province has been developed and tabled at the
MINTECH Working Group III in terms of the NEMA Chapter 3. Provincial Environment and Culture Sector
quarterly meetings have been held with National Department of Public Works, Provincial Department of
Public Works, DEA, DRDAR and Municipalities where progress reports were tabled and confirmed in terms
of being registered in the DPW EPWP system.
Compliance and enforcement
The Environmental Affairs Directorate: Compliance and Enforcement has continued to enforce the
Department’s environmental mandate making use of collaborative strategies to achieve its mandate. During
the reporting period there have been several noteworthy outcomes that included the successful conviction and
sentencing of the Ndlovu and Homela syndicates. The three Ndlovu’s were convicted of ten rhino poaching
incidents in the Province of the Eastern Cape and were individually sentenced to in excess of 500 years’
imprisonment but will each serve 25 years effectively, the equivalent of a life sentence. This was the first
rhino poaching case herd in the High Court of South Africa. During the trial MEC Mabuyane successfully
arranged a community march to the doors of the High Court in support of the State’s case. The march was
well attended by interested and affected parties throughout the Province with representation from many
sectors of society. The Ndlovu’s have been linked to rhino poaching incidents in other South African
Provinces.
A well-known cycad poacher and syndicate leader, Mr Sam Homela, was sentenced in the Port Elizabeth
Regional Court to 11 years’ direct imprisonment. This in addition to the eight-year sentence that he is
currently serving since being sentenced by the Eastern Cape Courts during 2016. Since the arrest of Mr
Homela there have not been any reports for cycad poaching in the western part of the Province of the Eastern
Cape.
Successes are a direct result of co-operative governance and intergovernmental strategies which flow from the
Eastern Cape Environmental Crime Working Group (SAPS, NPA, SANParks, and ECP&TA) and Phakisa
joint operations. The C&E participated in eight Operation Phakisa enforcement operations along the Eastern
Cape Coastline.
34This is designed to collect data on approved biodiversity economy initiatives/ project proposals and progress on implementation thereof for the purposes of promoting social well-being while maintaining the ecological resource base. 35This reflects the Mnembe Safaris game farm programme in Enoch Mgijima Municipality (Queenstown area)
70
The continued development of formalised private public relationships through the growth and support of
Programme 3's Honorary Nature Conservation Officers also resulted in successes that included the early
apprehension of rhino poachers adjacent to Inkwenkwezi Private Game Reserve. Their efforts certainly
curtailed a rhino poaching incident. Heavy calibre ammunition was recovered on the scene and a vehicle was
ceased. The Honorary Nature Conservation Officers have consistently assisted the Departmental officials with
voluntary patrols and visible enforcement efforts in the Amathole, Chris Hani and Sarah Baartman Regions.
The unauthorised clearing of sub-tropical thicket for agricultural practice has become increasingly problematic
and resulted in outcries from several quarters. The Directorate: Compliance and Enforcement has developed a
collaborative response to combat the clearing of this vegetation type with educational institutions and
botanical specialists. It is envisaged that DEDEAT will be able to successfully stem the tide of indiscriminate
clearing with the availability of necessary resources. Thicket clearing threatens the biodiversity of the Eastern
Cape Province and encourages the advancing threat of climate change.
Environmental Affairs will continue to foster and strengthen sound co-operative governance relationships in
its enforcement strategy through the Eastern Cape Environmental Crime Working Group and Honorary Nature
Conservation Officers, undertaking of informed compliance monitoring exercises, participation in joint
operations such as Operation Phakisa where resources are shared to conserve the coastal environment for
present and future generations and resolving environmental transgressions through appropriate enforcement
action.
Environmental Quality Management
In this reporting year 147 out of 148 environmental authorizations were finalized within legislated time-
frames, i.e. 99.2% as opposed to a target of 98%. In addition, average turnaround times were generally below
legislated time-frames. This was achieved under very difficult circumstances, exacerbated by the office
disruptions in the last quarter. The post of Regional Manager Environmental Affairs in the O.R. Tambo
Regions was vacant right through the year, and the Manager EIM in Head Office had to take responsibility for
signing off on environmental authorizations for that region. This means that in addition to all his normal work
he had to review bulky reports and do quality control on documents drafted by officials in that region. It must
also be noted that in some regional offices there is a significant staff shortage, but in such cases management
in those regions have made internal arrangements that allowed such offices to still meet time-frames. It
commonly happened that managers took up additional responsibilities that are not part of their job
descriptions, by themselves reviewing EIA reports and drafting authorizations. This entailed extensive work
outside official working hours, taking work home over week-ends and going to work while on leave. This
situation is not really sustainable and has already caused at least one manager to be severely affected, even to
the extent of being hospitalized.
The EIM Directorate reviewed EIA appeals and made recommendations to the MEC as required. It must be
noted that during this reporting period there were no legal repercussions or litigation following from MEC
appeal decisions, meaning that the unit is making legally sound recommendations to the MEC.
In terms of ensuring that national best practice in environmental management is applied in DEDEAT the EIM
Directorate participated in 4 meetings of MinTech Working Group 5, 4 meetings of the National EIA
Implementation Committee and 8 meetings of the National EIA Evaluation process. A representative from the
unit also played a leading role in EAPASA, the registration authority for Environmental Assessment
Practitioners. All the issues from these national forums were communicated to provincial stakeholders and
DEDEAT EQM officials at the quarterly EQM Forum and Technical Committee.
71
In order to facilitate effective implementation of EIM in the Province quarterly meetings of both the EQM
External Stakeholder Forum and the EQM Technical Committee involving Head Office and Regions took
place as planned. In addition, the Directorate participated in numerous structures and forums for purposes of
coordination and facilitation. This included the Eastern Cape Forestry Sector Forum [ECFSF], the Co-
ordinating Committee for Agricultural Water [CCAW], the DWS Licensing Assessment and Authorization
Committee [LAAC], Provincial and District Infrastructure Forums, while regional offices participated in
District Environmental Management Forums. One EIM official is a member of the ELRED Assessment
Committee and therefore ensures coordination at that level. A special effort was made to ensure regular
presentations on the Eastern Cape Biodiversity Conservation Plan at ECFSF and CCAW.
With regards to capacity building targets for the year were exceeded, mainly by means of training organized
as part of EQM Technical Committee. This is done as a cost saving measure. Examples, included DEA
Screening Tool, Eastern Cape Biodiversity Conservation Plan etc. In addition, 20 officials participated in
accredited training and 10 in refresher training offered by DEA. A number of EIM officials participated in the
international conference of the IAIA which took place in Durban and exposed them to international best
practice in environmental impact management.
With reference to policy development the Directorate took responsibility for the development of a number of
environmental management policy documents. This included draft coastal management regulations for the
Eastern Cape Environmental Management Bill, an action plan for DEDEAT monitoring of Wild coast N2
construction activities, a strategy document for a cabinet submission on Wild Coast environmental
management and a guideline for the implementation of the new Eastern Cape Biodiversity Conservation Plan
in EIA processes.
Air Quality & Climate Change
During the 2018/19 Financial year two Atmospheric Emission License (AEL) was issued to Messrs Langeni
Sawmills and East Coast Asphalt who are both located in the OR Tambo District. The License was issued
within time frames. The Air Quality Monitoring Stations located in the province operated within expected
parameters and no exceedences were experienced. However, maintenance is proving to be a challenge to the
Municipalities due in part to slow procurement of parts and services.
A large fire in the Western Regions of the Province (Tsitsikamma) did create considerable pollution but due to
its remoteness its impacts on public health were very limited. During this financial year Buffalo City
Metropolitan Municipality, Chris Hani and OR Tambo District Municipalities reviewed their Air Quality
Management Plans. The Department also assisted Alfred Nzo District Municipality to develop their own Air
Quality Management Plan. As a result of this all Metro’s and District Municipalities now have either adopted
or draft AQMPs.
Climate Change
The Local Government Climate Change Response Strategies project was completed. The project aims were to
assist all the District Municipalities to develop Climate Change Response Strategies which are incorporated
into the Municipal IDP’s. In respect of this project risk and vulnerabilities studies for all the District
Municipalities were developed. Municipalities were workshopped on Climate Change adaptation activities
that could be included in the Municipal IDP’s. All District Municipalities have now developed their draft
climate change response strategies and are awaiting approval by their Councils. Projects have been
identification for inclusion in Municipal IDP’s.
72
In the Alfred Nzo Region DAFF is rolling out the Fortified Veld Management Project as part of Operation
Phakisa. This project is in with the current Climate Change projects being implemented by the UCPP. Here
communities are encouraged to practice rotational grazing and veld management in order to build climate
resilience around the nexus of water, food security and Ecosystem Based Adaptation with the removal of alien
invasive plants. In Ntabankulu, the clearing of alien plants along water courses and around the towns dam is
already yielding results and streams are flowing stronger than before. This project has created 47 jobs, with
total number of, 121.47 hectares being cleared so far. In the OR Tambo Region three significant projects are
being implemented which will build resilience and mitigate the impacts of climate change.
In the first project the Department has entered a MOU with SA Low Emission Development (SALED) which
is an initiative of USAID. In terms of the agreement the Department will act as an intermediary between the
Municipalities and USAID SA-LED Program. A regional study tour captured issues of interest to the region
which are relevant to the Program. As part of this imitative Port St Johns LM’s buildings have been identified
as a pilot for the roll out of energy efficiency programme starting with an energy audit. A project steering
committee has been established which includes representatives of ORT DM; DEDEAT; USAID SA.
In the second project The Federation of Canadian Municipalities (FCM) in partnership with South African
Local Government Association (SALGA) have received a contribution from Global Affairs to implement a 4-
year programme of building inclusive green municipalities with effect from January 2017. The aim of the
programme is to improve capacity of South African municipal government to support effective service
delivery, local green economic growth and improve climate change mitigation and adaptation measures. This
programme aims to pilot local economic development initiatives with climate change integration (for KSD
LM) in order to promote job creation, enhance well-being at the same time empowering women, youth and
vulnerable groups. In PSJ LM the project centres around building resilience for municipal assets against the
impacts of climate change thereby facilitating adaptation. In this light, PSJ LM is required to develop an
effective and efficient Asset Management Plan taking into consideration Climate Change adaptation and
mitigation measures.
The last project involves a renewable energy project located in Lambasi village in Lusikisiki which will
produce bio-energy feedstock production and refinery. The proponent is New Auto Energy (Pty) Ltd. In the
Chris Hani District Municipality, Wildlife and Environmental Society of Africa has commenced with a R10
000 000 Climate Change project with the District Municipality and local schools which will see biological
waste digested and the resulting Methane gas used for cooking in the school feeding scheme. Schools have
been identified in the Enoch Mgijima, Sakhisizwe, Intsika Yethu and Emalahleni Local Municipalities.
Currently the drought is affecting a large part of the province. Poor summer rains have not relieved the serious
drought being experienced in parts of the province. The Department continues to assist by fast tracking
environmental authorisations through the use of section 30A as envisaged in NEMA and co-ordinating
activities through engagements with the Provincial and Regional Disaster Management Structures. The
Drought Disaster in the Province has created a unique set of challenges for local authorities. The matter is
further compounded by load shedding which as compromised borehole pumps and other electronic
infrastructure.
Waste Management
The Department has finalised three (3) waste licenses, two (2) licences have been granted and one (1)
application has lapsed due to non - submission of required information. Approval for the construction of Lady
Grey and Barkly East Landfill Site Liners in terms of regulation 636 of National Norms and Standards for
Disposal of Waste to Landfill site in Barkly East and Lady Grey landfill site. Amathole Regional office and
73
Head Office joined hands with Buffalo City Metropolitan Municipality in the clean-up campaign in Orange
Groove settlement and surrounding areas. The actions were build-up activities towards the Launch of the
GOOD GREEN DEEDS South Africa Programme held in Buffalo City Municipality.
In the South African Waste Information System (SAWIS) five reports have been approved from the System
from Amahlathi LM, Senqu LM, Enviro Serve, Amathole DM and KSD LM. The Department has developed
the Eastern Cape Provincial Integrated Waste Management Plan (IWMP) and the Provincial Recycling
Strategy.
Biodiversity and Coastal Management
Biodiversity Management
In terms of Biodiversity Conservation, the Biodiversity Conservation Strategy and Action Plan (ECBCSAP)
was published the Gazette for public comments. It is currently being reviewed on the basis of the comments
and will be finalized in the 2019-2020 financial year.
4 Facilities breeding with Appendix I listed CITES (Convention on International Trade in Endangered Species
of Wild Fauna and Flora) African Grey Parrots were inspected and recommended to the Department of
Environmental Affairs for registration with the CITES Secretariat in Sweden. The aviaries will be able to
trade internationally after registration. The parrots are coming from legally registered breeding facilities that
comply with legislative requirements. In implementing the outcomes of the Biodiversity Lab DEDEAT is co-
chairing the Honey Bush Tea Community of Practise to ensure beneficiation for local communities through
Bio-prospecting Economy. DEDEAT has been requested by the Director General of Environmental Affairs to
assist with the development of the Aloe ferox Species Management Plan. Implementation of the following
BMP’s namely: Albany Cycad and Perlagoniumsidoides in active to ensure the long term survival of these
species for the benefit of the communities where these species occur. The Eastern Cape Wildlife
Transformation Strategy is being implemented by the Eastern Cape Parks and Tourism Agency (ECPTA). The
aim for the strategy is to ensure transformation does take place within the wildlife industry and that previously
disadvantage members of the society are encouraged and supported to take part in the wildlife industry.
ECPTA also implements the Stewardship Programme for the province. The programme is aimed at ensuring
increase in conservation estate within the province which will contribute to the country’s targets towards land
under conservation.
Two Scientist positions were filled during the 2018-2019 financial, one for Freshwater Ecologist and another
one Coastal Ecologist. The Scientists will help ensuring that the decisions of the sub-programme have a
scientific input into them.
Coastal Zone Management
Since the enactment of National Environmental Management: Integrated Coastal Management Act (24 of
2008) (ICM Act), the Department is chairing an operational Eastern Cape Provincial Coastal Committee (EC
PCC) for coordination of coastal management activities and projects by various stakeholders. There PCC has
continued to make progress in terms of implementation of the ICM Act and the Provincial Coastal
Management Programme.
Municipal support is ensured through the establishment of functioning Provincial Coastal Management
Technical Committee (PCMTC), which meets bimonthly to discuss permit applications, technical issues
delegated by PCC, and get updates from sector departments on programmes they run that affect the coastal
communities or the coastal environment.
74
The province participates in MinTech Working Groups 8 forum that are responsible for Biodiversity
Conservation and Oceans & Coastal Management respectively. The province is active at these forums and has
continued to elevate the challenges. As a result of its participation, the province gets prioritized for
implementation of projects and funding for coastal management related projects.
The MEC published the Coastal Management Programmes for Amathole and OR Districts in the Provincial
Gazette for public comments. Approval of these CMPs by the MEC to be confirmed in writing in the 2019-
2020 financial year. the Department has further supported the development of the Sarah Baartman Coastal
Management Programme, which is being done through funding from the National Department of
Environmental Affairs. Public Participations workshops for the setting vision and objectives for the Sarah
Baartman Coastline were all led by the Department with the support of the consultant appointed for the EMP
development.
The Seekoei Estuarine Management Plan (EstMP) was published in the Gazette by the MEC during the 2018-
2019 financial for public comments in line with Section 53 of the ICM Act. All comments received were
discussed and addressed in meeting with the Kouga Local Municipality, who are the responsible authority for
the implementation of the EstMP. The Seekoei EstMP has been submitted to the office of the MEC for final
approval.
The Department in collaboration with the National Department of Environmental Affairs: Oceans and Coast
Branch have initiated a project for the improvement of water quality and governance on the Swartkops
Estuary. The project is known as the Benguella Current Large Marine Ecosystem 111 Pilot Project
(BCLME111) and is funded by the through the Bunguella Current Commission. The project seeks to bring
science and management together for better management of the swartkops estuary. A vast range of
stakeholders participate in the project.
For the next 2019-2020 financial year, the Department will develop 2 Estuarine Management Plans, one for
Kowie Estuary and another one Kromme Estuary. Work on the BCLME111, finalization of the Sarah
Baartman CMP, approval of the CMPs Amathole and OR Tambo Districts will continue into the 2019-2020
financial year.
Environmental Empowerment Services
For 2018/19FY EES had created a total of 363 work opportunities (W/O) in projects addressing environmental
challenges.
Alien Plant eradication project in Port St Johns LM funded at R3m;
Waste Management project in Intsika Yethu LM funded at R2 204 000.00
Waste Management project in Great Kei LM funded at R3 467 000.00
Waste Management project in Emalahleni LM funded at R3m
The sub-programme had conducted 33 Environmental Awareness Activities and 32 Capacity Building
Activities during 2018/19FY. Also the following Environmental Days had been celebrated during 2018/19FY
by the sub-programme;
Biodiversity Day Celebration at Amathole Region, Raymond Mhlaba LM
World Enviro Day Celebrations at OR Tambo Region, Bumbane Great Place
Marine Day Celebrations at Sarah Baartman Region, Kouga LM
Wetlands Day Celebrations at Joe Gqabi Region, Walter Sisulu LM
75
The sub-programme had conducted Greenest Municipality Competition (GMC) Awards for Local
Municipalities in the six regions of the Province.
The awarded municipalities for 2018/19FY were as follows:
Mzimvubu LM – R500 000
Ndlambe LM – R300 000
Elundini LM – R200 000
The following municipalities received the certificates for participating: Ingquza Hill LM, Emalahleni LM and
Ngqushwa LM.
The sub-programme had conducted Enviro Awards Competition Programme for Primary and Secondary
Schools in the Province. The Event was held at Wild Coast Sun in Mbizana LM. The winning schools were as
follows:
PRIMARY SCHOOL SECONDARY SCHOOLS AMOUNT
1.Didi (A/Nzo) 1. St Christopher’s (Amathole) R115 000.00
2.Mabandla JSS (J/Gqabi) 2.Marillier’s LA (OR Tambo) R85 000.00
3. Marillier’s LA (OR Tambo) 3.Jamanagile SSS (J/Gqabi) R60 000.00
4.Mbulelo PS (Amathole) 4.St Thomas HS (S. Baartman) R40 000.00
5.Mgwenyana (C/Hani) 5.Nompumelelo SS (C/Hani) R30 000.00
6.Inkqubela PS (S/Baartman) 6.Bizana Village SSS (A/Nzo) R25 000.00
Strategy to overcome areas of under performance
Indicator Short title Strategy to overcome under-performance
1 Stakeholder consultation on options for a provincial climate change response
This is dependent on national systems and will be discussed at environmental sector level.
2 Critically endangered This is dependent on national systems and will be discussed at environmental sector level.
3.1 Number of inter-governmental tools reviewed
Better communication will be made with COGTA and alternative means of reviewing IDP plans of environmental content explored.
3.4 Functional environmental information systems
The e-permitting system is back on track. Efforts will be made to ensure SITA completes the system as soon as possible in 2019/20.
3.6 Number of administrative
enforcement notices issued
This is demand driven. Targets will be reviewed.
3.8 Number of compliance inspections conducted
This is demand driven. Targets will be reviewed.
3.9 Number of S24G applications finalised
This is demand driven but greater coordination between finance, compliance and enforcement as well as quality management units will be
made to ensure case completion.
3.13 Number of permits issued within timeframes
The e-permit system will be finalised in the current year so that issues of completeness can be addressed.
3.14 Number of work opportunities The programme will improve on management of performance information
which was problematic in the year under review. Standard approaches to proof of payment and signing of contracts will be enforced.
Changes to planned targets
There were no changes made to indicators and targets during the year.
76
Linking performance with budgets
The amount of under spending recorded by the programme is not material when compared to the budget. The
programme operated within planned operational plans and cash flow projections and wars therefore able to
achieve a number of its predetermined objectives, despite the challenges highlighted earlier. Where targets
were missed, was mainly due to portfolio of evidence not being properly packaged.
Sub-programme expenditure
2018/19 2017/18
Sub Programme Name Final
Appropri
ation
Actual
Expendi
ture
(Over)/U
nder
Expendit
ure
Final
Appropri
ation
Actual
Expendit
ure
(Over)/U
nder
Expendit
ure
R'000 R'000 R'000 R’000 R'000 R'000
1
ENVIRONMENTAL POLICY,
PLANNING AND COORDINATION
24,500 24,282 219 23,501 22,419 1,082
2 COMPLIANCE AND ENFORCEMENT 50,065 49,891 174 42,440 41,225 1,215
3
ENVIRONMENTAL QUALITY
MANAGEMENT
20,324 20,162 162 21,482 18,164 3,318
4 BIODIVERSITY MANAGEMENT 231,121 230,463 658 199,523 196,260 3,263
5
ENVIRONMENTAL EMPOWERMENT
SERVICES
12,946 12,103 843 11,883 10,445 1,438
TOTAL 338,956 336,900 2056 298,829 288,513 10,316
77
4. TRANSFER PAYMENTS
4.1 Transfer payments to Public Entities
Name of Public
Entity Services rendered by the public entity
Amount
transferred to
the public
entity
Amount spent
by the public
entity
R’000 R’000
Eastern Cape
Development
Corporation
Provides short-term and long-term development finance primarily to previously
disadvantaged entrepreneurs
Provides non-financial support services to facilitate enterprise development,
promote trade and investment
Manages investments in the form of shares on behalf of the state as well as other
assets
The public entity has 2 goals and 3 objectives namely:
1. Stimulate economic activity.
2. Optimize all resources to maximize investment returns and attain sustainability.
R236,344 R180,664
ECDC Key Achievements (2018/19)
Rand value of loans disbursed is R 43 026 594 assisting 190 SMMEs
227 SMMEs were assisted with non- financial support services and 3 incubators were supported.
20 Co-operatives supported with finance
R 305 015 321 value of investments realised
174 SMMEs/Local Entrepreneurs were provided with integrated export support and 203 people were trained as part of sector development
and strategic initiatives.
1240 jobs were facilitated, 2642 youth jobs were facilitated and 808 jobs were saved through the intervention of the jobs fund.
Eastern Cape
Gambling & Betting
Board
Administration of applications for and licensing of gambling and betting business
activities; promotion of responsible gambling through public awareness and
consumer education; enforcement of compliance with legislation as well as with
terms and conditions attached to licences.
R55,761 R53,624
ECGBB Key Achievements (2018/19)
Eastern Cape Gambling Board (ECGB). Currently this is the most stable public entity in the group, with the board and management seeming to be in
sync with each other. The sector continues to grow despite pressures for the middle class. In the EC gambling activities include five casino operations
(Queens Casino in Queenstown, Mayfair Casino in Mthatha, Hemingways Casino in East London, Boardwalk Casino in Port Elizabeth and Wild Coast Sun Casino in Mzamba), Limited Payout Machines (two provincial license holders known as route operators with more than 200 sites across the
province), three Bingo license holders with fifteen sites across the province. On the betting side, there are 11 registered bookmakers with more than 50 branches, as well as one horse racing track and totalisator. There have been recent legislative amendments that affect the ECGB.
Eastern Cape Liquor
Board
Administration of applications for registration and issuing of liquor license,
promotion of responsible liquor trading and consumption, alerting the public to
associated risks or adverse effects through public awareness and education; and
enforcement of compliance with legislation as well as with terms and conditions
attached to licenses.
R59,541 R58,396
ECLB Key Achievements (2018/19)
A total of 1 203applications were considered by the Board in the 2018/19 financial year and 772 of those were approved. It is estimated that 3
jobs are created for each license issued and thus 2 316 jobs were created.
The total number of active license holders which were expected to renew their licenses during the period under review is 7176. 6774 license
holders paid their renewal fees while 402 failed to renew their licenses. This is as a result of the different initiatives conducted by the entity to
remind liquor traders to renew their as renewal is critical for generating revenue and minimising illegal trading.
In contributing towards transformation through the Liquor Traders Development Programme, ECLB has facilitated the formation of a formally
constituted Eastern Cape Craft Brewers and Distillers Association which consist of 12 members. The Eastern Cape Liquor Board also has
facilitated a seminar on exporting programmes run by Eastern Cape Development Corporation for the craft brewers. They will be participating in
the export development programme.
The entity continues to intensify its efforts to enforce compliance with liquor trading conditions and regulations and partnership with Law
Enforcement Agencies and Traditional Authorities as a result 635 persons operating illegal liquor trading outlets were referred to the criminal
justice system for prosecution:
o 450 illegal liquor traders were issued with the Notice to Appear in Court with an Option to Pay a Fine (J534) amounting in total to
R414 220.00;
o 77 criminal cases were opened and these cases are pending adjudication in court.
108 of these illegal traders were issued with Section 19 notices to cease trading.
The entity has strengthened collaboration and partnerships with stakeholders in the private and public sector. The areas of collaborations
committed to have been for Fight against Abuse of Alcohol, Responsible Liquor Consumption and Trading, Underage Drinking, Liquor Traders
78
Name of Public
Entity Services rendered by the public entity
Amount
transferred to
the public
entity
Amount spent
by the public
entity
R’000 R’000
Development Programme. Amongst others is:
- a partnership with Aware!Org (The Association for Alcohol Responsibility and Education - the alcohol industry’s response to concerns
regarding alcohol misuse and abuse) to facilitate harm reduction programmes in the province. The focus areas are underage drinking and
Liquor Traders facilitation programme. The partnership has been formalised through the signing of an MOU.
- Shoprite Checkers who has been sponsoring the school –based interventions.
- Heineken for the FAS research and interventions
Furthermore, Aware!org has committed to work with ECLB in introducing underage drinking as a module within the school curriculum. The
concept has already been introduced to the EC Department of Education and they have gladly welcomed it
Eastern Cape Parks&
Tourism Agency
Management of conservation of biodiversity and sustainable utilization of natural
resources within the protected areas
Marketing, promotion and development of the Province as a tourism destination
R233,579 R154,196
ECPTA Key Achievements (2018/19)
Leveraging resources
By the end of 2018/19, ECPTA had leveraged over R160million in conditional grants from national government and private funders for 2019/20
Conservation
ECPTA achieved a METT score of 75%, with all reserves scoring over the 67% standard set nationally
The Agency has increased the protected area estate through its stewardship programme by over 93 000 hectares since 2015/16, surpassing the
70 000 hectare 5-year target in year 3
The single biggest addition to the protected area estate is the 68 000 ha Indalo Game Reserves Protected Environment, which was declared in
2018/19
Transformation
Eastern Cape participation AND winners numbers in the National Tourism Excellence Lilizela Awards represent a major achievement for the
provincial transformation effort:
In the inaugural year, 2013, there were 75 participants from the Eastern Cape, 1.3% of which were PDI In 2018, the Eastern Cape boasted 335 entrants (the most of all provinces), and 13 National winners (also the most of all provinces).
156 of the EC participants were PDIs, making up 46.57% of provincial entries
Four transformation sites (game farms owned by previously disadvantaged individuals) have been supported to meet the standards for receipt of
game. 283 head of game were successfully translocated to these sites on a custodianship basis by the end of 2018/19.
Towards the end of the 2018/19 financial year, Provincial Cabinet granted approval for the translocation of rhino to a new transformation site as
part of both the Black Rhino Range Expansion Project (International) and the Game Farm programme (Provincial). The translocation will take
place in the first half of the 2019/20 financial year.
Marketing
ECPTA launched the EXPLORE app – downloadable on IoS and Android, in late 2018. The app provides visitors with an accessible guide to
tourist activities and opportunities across the Eastern Cape, and heralds ECPTA’s intent to embrace technology in achieving its objectives East London
Industrial
Development Zone
Develops land so as to provide suitable infrastructure for industrial development
Promotes investment and trade R112, 172 R112,172
ELIDZ Key Achievements (2018/19)
An amount of R101 million has been spent on SMME procurements making 26.54% of total spends; while 10.73% (amounting to R41
million) has been spent with women-empowered companies.
To date the ELIDZ has exceeded its annual target of 32 interns and has to date ensured the creation of 45 opportunities.
5 investors were secured during the year.
An amount of R101 million has been spent on SMME procurements making 26.54% of total spends; while 10.73% (amounting to R41
million) has been spent with women-empowered companies.
3 incubators are hosted at the ELIDZ’s STP. These are Chemin, Cortex Hub and ECTI.
87 skills beneficiaries have been trained in the STP to date.
The ELIDZ reports an achievement of 3993 manufacturing jobs during the 2018/19 FY.
82% local procurement for all contracts awarded during the FY.
Coega Development
Corporation
Develops land so as to provide suitable infrastructure for industrial development
Promotes investment and trade R31,270 R31,020
COEGA Key Achievements (2018/19)
This year marks the 20th anniversary since the establishment of the Coega Development Corporation (CDC) in 1999. As we celebrate this significant
milestone, we reflect on the journey pursuant to our vision to be the leading catalyst for championing of socioeconomic development in the Eastern
Cape Province. The key performance indicators of the CDC show that 18 new investors were signed – four more than the previous financial year - with
an investment value pledged of R2.06 billion. At the end of the 2018/19 financial year, the organisation had also accumulated a total of forty-five (45)
operational investors, all of whom have contributed in excess of R9.53 billion in private sector investment, employing 7 815 people, of whom more than
79
Name of Public
Entity Services rendered by the public entity
Amount
transferred to
the public
entity
Amount spent
by the public
entity
R’000 R’000
86% are from the Eastern Cape and the balance being experts from the rest of the country and abroad. On the construction front, 8 016 jobs were created
through infrastructure projects in the same period. The CDC is therefore doing its part in making a significant contribution to reducing unemployment in
the region and contributing to the country’s National Development Plan (NDP) priorities, particularly those of bringing about faster economic growth,
higher investment and greater labour absorption as well as building a capable developmental state. In particular, the CDC acknowledges the important
role Small, Medium and Micro Enterprises (SMMEs) play in growing the economy and providing employment to a large number of unemployed South
Africans. To this end, during the financial year, the CDC in meeting its socio-economic developmental objectives awarded 33% of procurement spend
to SMMEs. Additionally, our commitment to training ensured that 7 406 people participated. As regards good corporate citizenship, the flagship Coega
Maths and Science Programme, our education orientated Corporate Social Investment (CSI) initiative, continued to provide Grade 12 learners from
disadvantaged communities with support to improve their Maths and Science results to obtain entry to higher institutions of learning. All 85 learners
successfully completed the programme with the pass rate of 100% in both mathematics and physical science. The CSI programmes will be strengthened
by the establishment of the Coega Development Foundation (CDF), which will consolidate all community-focused programmes, including skills
development and ancillary services.
4.2 Transfer payments to all organisations other than public entities
The table below reflects the transfer payments made for the period 1 April 2018 to 31 March 2019
Organisations to whom transfer payments have been made
Transfers to Public Entities
PUBLIC ENTITY PURPOSE OF TRANSFER DID THE
DEPARTMENT
COMPLY WITH
S38(1)(J) OF THE
PFMA
AMOUNT
TRANSFERRED
R’000
AMOUNT
SPENT BY
THE
ENTITY
R’000
REASONS FOR THE
FUNDS UNSPENT BY
THE ENTITY
Eastern Cape
Development
Corporation
Provides short-term and long-term
development finance primarily
to previously disadvantaged
entrepreneurs.
Provides non-financial support
services to facilitate enterprise
development, promote trade and
investment.
Manages investments in the form
of shares on behalf of the state as
well as other assets
The public entity has 2 goals and 3
objectives namely:
1. Stimulate economic activity.
2. Optimize all resources to
maximize investment returns and
attain sustainability.
Yes R236,344 R180,664 Due to diligence process
must be followed before
committing funds and the
ECDC Board delegation
was required before
awarding one if the
contracts to the client.
R17m for Commercial
Property Development,
approved, R15m for Health
medical suppliers and
services due diligence
completed late. Films
approved but funds not yet
released.
Eastern Cape
Gambling Board
Administration of applications for
and licensing of gambling and
betting business activities;
promotion of responsible gambling
through public awareness and
consumer education; enforcement
of compliance with legislation as
well as with terms and conditions
attached to licences.
Yes R55,761 R53,624 Under spending is due to
primarily the delays
encountered in the
development timetable of
the new gambling
Regulation system. The
was also capital in transit
at year-end (fleet vehicle
replacement, and furniture
ordered delivered in April)
East London
Industrial
Development Zone (
IDZ)
Develops land so as to provide
suitable infrastructure for industrial
development
Promotes investment and trade.
Yes R112,172 R112,172 N/A
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PUBLIC ENTITY PURPOSE OF TRANSFER DID THE
DEPARTMENT
COMPLY WITH
S38(1)(J) OF THE
PFMA
AMOUNT
TRANSFERRED
R’000
AMOUNT
SPENT BY
THE
ENTITY
R’000
REASONS FOR THE
FUNDS UNSPENT BY
THE ENTITY
Eastern Cape Liquor
Board
Administration of applications for
registration and issuing of liquor
license, promotion of responsible
liquor trading and
consumption, alerting the public to
associated risks or adverse effects
through public awareness and
education; and enforcement of
compliance with legislation as well
as with terms and conditions
attached to licenses.
Yes R59,541 R58,396 Under spending is due to
delay in finalisation of
tender process for the
procurement of Computers
for Inspectors, Training
working group schedule
for quarter 4 were not
attended as planned due to
unavailability of
Inspectors. Mthatha Office
Partitioning the delay was
caused from getting
credible suppliers
Licences, Software’s and
Utilities.
Eastern Cape Parks
and Tourism Agency
Marketing, promotion and
development of the Province as a
tourism destination.
Yes
R233,579
R154,196
The under spending relates
to the Digital Protection of
valuable species. The funds
were committed at the year
end.
Coega Development
Corporation
Develops land so as to provide
suitable infrastructure for industrial
development.
Promotes investment and trade.
Yes R31,270 R31,020 Funds to be committed for
the completion of EIA and
feasibility studies gas
project. Due to timing of
when the funds were
received was not able to
commit or spend the
remaining amount.
TOTAL R728,667 R
Transfers to Universities and Technikons
There were no transfers in 2018/19.
Other Transfers to Private Enterprises
NAME OF PRIVATE ENTERPRISE PURPOSE OF TRANSFER DID THE DEPARTMENT
COMPLY WITH S38(1)(J)
OF THE PFMA
AMOUNT
TRANSFERRED
AMOUNT
SPENT BY THE
ENTITY R’000
KLAUSHE MANUFACTURERS To buy machinery and
equipment to manufacture
furniture.
Yes R1,490 R1,096
CHEMBLEND PTY LTD
To buy machinery and
equipment to manufacture
furniture.
Yes R1,215 R0.00
SOBAG TRADING To buy machinery and
equipment to manufacture
cleaning chemicals.
Yes R805 R709
BACALUM MANUFACTURERS CC To buy machinery and
equipment to manufacture
aluminium windows and
doors.
Yes R2,886 R380
AMAZING WASTE Renewable Energy – Yes R109 R0.00
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NAME OF PRIVATE ENTERPRISE PURPOSE OF TRANSFER DID THE DEPARTMENT
COMPLY WITH S38(1)(J)
OF THE PFMA
AMOUNT
TRANSFERRED
AMOUNT
SPENT BY THE
ENTITY R’000
COLLECT&PROC PTY Feasibility study
AMINA CHEM PTY LTD To buy machinery and
equipment to manufacture
cleaning chemicals.
Yes R1,349 R1,349
AET AFRICA PTY LTD To buy machinery and equipment to manufacture
proto type geysers.
Yes R1,695 R0.00
MBI DEVELOPMENT PRIMARY
COOP LTD
To buy Agro processing
equipment
Yes R482 R0.00
PARADIGM SUPPLY CHAIN SOLUT
CC
Tourism programmes –
Feasibility study
Yes R115 R115
MABIJA BUILDING CIVIL CONSTR
CC
To buy delivery truck and
machinery to manufacture
Bricks and Blocks
Yes R2,162 R2,162
HLOZA ENGINEERING CC To buy machinery to
manufacture auto/motor parts Yes R2,942 R0.00
COFFEE BAY RIVER KAYAKING To buy a customised vehicle
and kayak sets for Tourism.
Yes R816 R253
NEWBREED HOLDINGS (PTY) LTD To buy machinery and
equipment to manufacture
auto/motor parts.
Yes R1,504 R1,195
BLACK SPOT MEDIA (PTY) LTD To buy machinery and
equipment to manufacture
protective clothing.
Yes R531 R531
IKIM SOLUTIONS CC To buy machinery and
equipment for manufacturing
of washing powder soap.
Yes R1,553 R118
IYANZI (PTY) LTD To buy machinery and
equipment for printing and
embroidery of garments.
Yes R216 R215
TOTAL R19,870 R8,123
Transfers to Municipalities
NAME OF MUNICIPALITY PURPOSE OF TRANSFER DID THE
DEPARTMENT
COMPLY WITH
S38(1)(J) OF THE
PFMA
AMOUNT
TRANSFERRED R’000
AMOUNT
SPENT BY
THE ENTITY
R’000
IntsikaYethu Municipality EPWP Yes R2,204 R1,551
Great Kei Municipality EPWP Yes R3,476 R1,054
Emalahleni Municipality EPWP Yes R3,000 R1,551
Port St Johns Municipality EPWP Yes R3,000 R3,000
Raymond Mhlaba Municipality Renewable energy Yes R270 R270
Elundini Municipality Small towns revitalization
programme
Yes R500 R500
Elundini Municipality Environmental Awards Yes R200 R200
Umzimvubu Municipality Environmental Awards Yes R500 R500
Ndlambe Municipality Environmental Awards Yes R300 R300
TOTAL R13,450 R8,926
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Transfers to other Entities and Greenest Municipality
NAME OF ENTITY /
MUNICIPALITY
PURPOSE OF
TRANSFER
DID THE
DEPARTMENT
COMPLY WITH
S38(1)(J) OF THE
PFMA
AMOUNT
TRANSFERRED R’000
AMOUNT SPENT
BY THE ENTITY
R’000
Ndlambe Municipality Environmental Awards Yes R300 R300
Umzimvubu Municipality Environmental Awards Yes R500 R500
Elundini Municipality Environmental Awards Yes R200 R200
TOTAL R1,000 R1,000
Transfers to other Entities and Environmental Award Competition
NAME OF ENTITY PURPOSE OF
TRANSFER
DID THE DEPARTMENT
COMPLY WITH S38(1)(J) OF
THE PFMA
AMOUNT
TRANSFERRED R0.00
Didi Primary School Environmental Awards Yes 22,500
Jolobe Senior Primary School Yes 17,500
Zenith Primary School Yes 10,500
Hardenberg Primary School Ye 8,500
Bizana Village SSS Yes 22,500
Mount Ayliff Hospital JSS Yes 17,500
Ezizityaneni JSS Yes 10,500
DIDI Primary Yes 137,500
Bergview College Yes 8,500
Mabandla JSS Yes 22,500
Zandise JSS Yes 17,500
Esilindini JSS Yes 10,500
Jamangile SSS Yes 22,500
Mabandla JSS Yes 17,500
Egqili SSS Yes 10,500
Marillier’s Learning Academy Yes 22,500
Hlabathi JSS Yes 17,500
Transkei Primary Yes 10,500
Mgwenyene JSS Yes 10,500
Marillier’s Learning Academy Yes 22,500
Holy Cross Education centre Yes 17,500
St John College Yes 10,500
Holy Cross SSS Yes 8,500
Mgwenyane JSS Yes 22,500
Lhane Primary School Yes 17,500
Seplan JSS Yes 10,500
Unathi Mkefa PPS Yes 8,500
Nompumelelo HS Yes 22,500
Daliwonga SSS Yes 17,500
St James SSS Yes 10,500
Echibini SSS Yes 8,500
Inkqubela PS Yes 22,500
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NAME OF ENTITY PURPOSE OF
TRANSFER
DID THE DEPARTMENT
COMPLY WITH S38(1)(J) OF
THE PFMA
AMOUNT
TRANSFERRED R0.00
Fumisukoma PS Yes 17,500
Ben Nyathi PS Yes 10,500
W.B Tshume PS Yes 8,500
St Thomas HS Yes 22,500
Loyiso HS Yes 17,500
Global Leadership Academy Yes 10,500
St Colmcille HS Yes 8,500
Mbulelo PS Yes 22,500
Luyteville PS Yes 17,500
Ezingcuka PS Yes 10,500
Ncihana PS Yes 8,500
St Christopher’s Private School Yes 22,500
St Mathews HS Yes 17,500
Nomaka Mbeki S.S.S. Yes 10,500
ENVIRO S.S.S. Yes 8,000
Didi Primary School Yes 115,000
Mabandla J.S.S Yes 85,000
Marillier’s Learning Academy Yes 60,000
Mbulelo P.S Yes 40,000
Mgwenyane J.S.S. Yes 30,000
Inkqubela P.S. Yes 25,000
St Christopher’s Private School Yes 115,000
Marillier’s Learning Academy Yes 85,000
Mabandla school Yes 17,500
Jamangile JSS Yes 60,000
St Thomas HS Yes 40,000
Nompumelelo High School Yes 30,000
Bizana Village Yes 25,000
TOTAL R1,574,500
5. DONOR FUNDS
5.1 Conditional Grants
Transfers to Municipalities for EPWP (Conditional Grant)
NAME OF MUNICIPALITY PURPOSE OF TRANSFER DID THE
DEPARTMENT
COMPLY WITH
S38(1)(J) OF THE
PFMA
AMOUNT
TRANSFERRED
R’000
AMOUNT
SPENT BY
THE ENTITY
R’000
IntsikaYethu The grant is utilised on projects
relating to cleaning, poverty
alleviation and job creation
projects.
Yes 2,204 R1,551
TOTAL
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5.2 Donor Funds Received
No donor funds were received during 2018/19 financial year.
6. CAPITAL INVESTMENTS
6.1 Capital Investment, Maintenance and Asset Management Plan
No Capital Investments were made during the year.
85
PART C: GOVERNANCE
86
1. INTRODUCTION
The Department established its governance structures in order to maintain the highest standards of governance
in the management of public funds and resources. The key principle behind each structure is independence,
accountability and integrity. The Department also ensures that governance is audited to provide assurance that
the Department’s governance structures are effective, efficient and economical in the utilisation of
government resources.
2. RISK MANAGEMENT
A Risk Management Committee (RMC) which is chaired by an external Chairperson who brings a lot of
valuable experience in risk management and governance matters was established by the Head of Department.
The Department has implemented a process champion model whereby the risk management unit is the
custodian of the risk management function; however, every risk champion is responsible for managing risks in
their areas of responsibilities. The risk management committee considered the risk registers and quarterly risk
management implementation reports and provided advice, within the context of its terms of reference, risk
management policy and the risk appetite and tolerance framework. The committee submitted quarterly reports
to the Accounting Officer and the Audit Committee, providing feedback on the committee’s work and its
independent opinion on the functioning of risk management within the Department. An audit of risk
management was conducted, which highlighted the need for increased capacity and independence of the risk
management unit, including strengthening of the risk management culture within the department. This was
reinforced by the results of assessments conducted by the Department of Performance, Monitoring and
Evaluation (MPAT), National Treasury (FMCMM), external and internal audit reports, independent
evaluation report and the feedback received through the risk management and audit committees. The overall
effectiveness of risk management within the department has still not achieved the desired level. However, the
department is committed to addressing the identified gaps to enhance the risk management maturity level,
which include the approval of an organisational structure that has risk management directorate, reporting to
the head of department. For risk management maturity of the Department to improve, it is critical that
recommendations made by the RMC and AC are implemented timely by management and effective
monitoring of implementation should take place.
3. FRAUD AND CORRUPTION
The Fraud prevention plan details how the department intends to prevent, detect, investigate and resolve cases
of fraud. The overall effectiveness of implementation thereof is still inadequate. However, the department is
satisfied that the internal controls that it has implemented are adequate to ensure that fraud and corruption
risks are managed. This is evidenced by the consequence management implemented throughout the financial
year.
4. MINIMISING CONFLICT OF INTEREST
The Department’s SMS members disclosed their financial interest to the Accounting Officer and the
Executive Authority, and submitted the same to the Public Service Commission as required by Public Service
Regulations, 2016. Both the eDisclosure and register of SMS members’ disclosed financial interests was
compared to the centralised supplier database to ensure that no conflict of interest existed. Where there were
flagged possibilities of conflict of interest, by Provincial Treasury and the Public Service Commission was
reviewed and found no conflict of interest.
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Over and above the verification process mentioned above, the following activities were undertaken by the
Department:
a. Updating of the financial and supply chain management delegations.
b. The SCM reforms introduced per National Treasury SCM instruction No. 4A of 2016-17, effective from
01 July 2016, together with the Centralised Supplier Database facilitated the ease of verification of
conflict of interest, which the Department implemented, and
c. Disclosure of financial interests by the finance and supply chain management (SCM) officials,
practitioners, role players and Bid Committee members. Screening of officials and potential staff
(applicants) and key suppliers such as Security Service providers by the State Security Agency were
facilitated within the Department.
5. CODE OF CONDUCT
The Department established its governance structures in order to maintain the highest standards of governance in the
management of public funds and resources. The key principle behind each structure is independence, accountability
and integrity. The Department also ensures that governance is audited to provide assurance that the Department’s
governance structures are effective, efficient and economical in the utilisation of government resources.
6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES
In terms of managing Health, Safety and Environmental issues, the Department has a structured Employee
Health & Wellness Unit under the directorate Human Resource Management. This unit’s functions are guided
by DPSA four (4) pillars, of which one is SHERQ Management (Safety, Health, Environment, Risk &
Quality). The sub-programmes under this pillar are Occupational Health & Safety, Environmental
Management and Risk and Quality Management. To ensure the implementation of this pillar with its sub-
programmes, the governance structures such as Health and Safety committees and First Aiders are in place as
to ensure compliance with Health, Safety and Environmental issues.
7. PORTFOLIO COMMITTEES
The department and its entities were oversighted by the portfolio committee on economic
development, environmental affairs and tourism. after the tabling of the department’s policy speech,
the department and the entities presented the annual performance plans and the budget vote. these
were considered and adopted by the committee. the department provided briefings to the committee
on the national credit amendment bill and the gambling bill. the committee conducted public
hearings on these bills in all the regions. the committee also considered the departmental responses
to the house resolutions.
8. SCOPA RESOLUTIONS
Programme 1: Administration
COMMITTEE FINDINGS
(a) The Department under spent on compensation of employees (COE) due to delays in the finalisation of the recruitment and
appointment processes as outlined in the Annual Recruitment Plan.
(b) The Department appointed Sizwe Ntsaluba Gobodo to provide internal audit services and skills transfer to staff.
(c) The Department’s Alfred Nzo district offices shares ICT infrastructure with four departments. Furthermore, the Department
does not have a dedicated network controller and this leads to frequent network interruptions which are a data loss risk.
(d) Two Department employees have been on precautionary suspension since 2015 and they have been paid an amount
estimated at R4.1 million in salaries.
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(e) The Department’s Head Office staff accounts for 25% of misuse of government vehicles.
(f) Organised labour is against the implementation of the newly approved organisational structure, alleging that they were not
consulted.
RESPONSES TO RECOMMENDATIONS
1. Recommendation
(a) The Department must within 30 days submit a progress report to the Committee on the implementation of the Annual
Recruitment Plan.
DEDEAT RESPONSE:
The under expenditure on CoE has been caused by the current restructuring process which the Department is undergoing. A
new organogram was approved in March 2018 and subsequent to that the Department was supposed to start the process of
implementation immediately but there has been delays due misunderstanding related to consultation between Labour and
Management. The actual implementation has started in that from the Annual Recruitment Plan (ARP) certain critical
positions were identified for advertisement and filling while sorting out the disagreements which exists between
Management and Labour. 20 of the identified positions were advertised in July/August 2018 and were filled within 8 weeks
with the exception of those where suitable candidates could not be found. The 2nd batch of advert was issued in
Nov/December2018 and the Department is now in a process of filling those advertised posts and the plan is to fill all the
advertised posts by April 2019.
(b) The Department must within 30 days submit a report to the Committee on the skills transfer programme and duration of the
internal audit contract.
DEDEAT RESPONSE:
The report is not available yet as this matter was raised with DEDEAT Audit Committee as SNG did not have resources to
transfer skills and wanted this project to be attended separately. The skills plan is available (see attached). The department
is still in the process of filling the positions. The available Manager, Assistant Manager, and the Internal are only mentored
in-house.
(c) The Department must within 30 days submit a plan to the Committee on how the problem will be resolved.
DEDEAT RESPONSE:
The issues that are caused by sharing network were resolved by segregating the DEDEA network within the network, the
department installed its own router to segregate network, static IP (Internet Protocol) were also configured in the
workstations to ensure that they have constant access to the network/internet. A separate departmental network cabinet was
installed in the shared serve room and departmental network equipment has been installed in the said cabinet and it clearly
marked.
Head-office has network controllers and technicians have been providing support to the Alfred Nzo regions while the post
of a regional network controller has been vacant. The post has been advertised and interviews will take place on the before
the end of the financial year.
The data is mostly located at a central venue in secure datacentres that are located in head office. The region accesses the
data from a central place to reduce the potential loss of data. The frequent network interruptions are a result of copper
cable theft that is prevalent in the region, this has affected Telkom a lot and it’s beyond the control of the department.
(d) The Department must within 30 days submit a progress report to the Committee on the resolution of the matter. Reasons
must be provided on why the matter dragged on for three years as opposed to the 90-day period set for the resolution of
disciplinary matters.
DEDEAT RESPONSE:
The award on the merits of the matter was provided to the Department on the 20th December 2018 wherein it is stated that
both employees have been found guilty with that which they had been charged with. The Chairperson of the Disciplinary
Hearing then set a date as to when parties would be able to argue mitigating / aggravating circumstances on the 18th
January 2019. Mrs Sigwela did not avail herself for the hearing and Mrs. Maseko’s representative had written
representations ready (as they had an option to either do it in writing or orally). He however then stated that even though
89
he has written representations he is not ready to do oral submissions. This was a lost day due to the suspended employees.
The Chairperson then provided two further dates, being the 11th and 12th February 2019 and indicated to the parties that
should they not be present or alternatively submit their submissions he will be proceed to make his ruling on the basis of
not having received anything from the parties who had failed to do so.
The ruling was released on the 7th March 2019 as the final outcome of the disciplinary hearing, both employees have
however appealed the outcomes of the hearing.
The Department has its representative – Adv. T Mqobi
Defendant 1 – Mrs Sigwela has her own representative
Defendant 2 – Mrs Maseko has her own representative
The Chairperson of the disciplinary hearing is a practising attorney and therefore this matter is not the only matter that is
dealt with.
In light of the above, it has been extremely difficult to ensure that the availability of dates for the four different
representatives align. This has been one of the main reasons for the delay.
There have also been times when the defendants have changed legal representation, were given a period of two months to
do so and upon meeting again had still not had legal representation. Things like this have caused delays.
Defendant 1 has also been ill on various occasions and could not attend.
Defendant 1’s representative at one point had a major accident and appearance dates had to be rescheduled.
There were also times that the Department had delays in obtaining the necessary documentation requested by the
Defendant’s.
This has been an extraordinary matter and by no means has the Department been happy with the period it has taken to
finalise this matter.
(e) The Department must within 30 days submit a report to the Committee on steps taken to curb this practice as well as a
report on consequence management steps taken.
DEDEAT RESPONSE:
The Department accounts for 25% of misuse of government vehicles and this is a cause for concern. To curb this practice,
the Department has a transport policy which guides the management of government vehicles. In addition,
Labour Relations unit conducts from time to time the advocacy session of the Code of Conduct in the Public Service. With
regards to reported cases of misuse of the government vehicles, all transgressors get charged for misconduct.
(f) The Department must engage organised labour in the matter and submit a report to the Committee within 30 days.
DEDEAT RESPONSE:
As the post establishment (Structure) was approved in March 2018 by DPSA, the Department is obliged to implement the
structure so as to avoid the adverse effects of non-alignment of its structure to COE, ARP, PMDS Contracts, EE Plan, HR
Plan and APP. As we undertake to implement, organised labour is part of the process and as such an engagement session is
envisaged to held on 28 February and 01 March 2019 in order to discuss the Staff Placement (Person-to-post matching)
approach. The structure itself was due for implementation in April 2018 and labour disputes the consultations since they
are not willing to sign registers when meeting the Employer. However, the Department was patient enough to engage
labour and the last consultation sessions were in June 2018 and in August 2018.
1. Programme 2: Economic Development
COMMITTEE FINDINGS
1. Findings
(a) Economic Planning achieved 50% of its performance target.
90
(b) The Department and Independent Power Producer (IPP) EDF Renewables South Africa discussed terms of reference for
the support of SMMEs in relation to the Ngqushwa Municipality wind farm project.
RESPONSES TO RECOMMENDATIONS
2. Recommendations
(a) The Department must submit a report on the non-attainment of the target. The report must be submitted to the
Committee within 30 days.
DEDEAT RESPONSE:
Most of the work is done by the consultants and the procurement process was not finalised. The vacant position for the
Director: Economic Planning and Research was filled and performance will be improving going forward.
(b) The Department must submit a report on SMME support and details of SMME participation in the project. The report
must be submitted to the Committee within 30 days.
DEDEAT RESPONSE:
Local rural SMMEs often struggle to participate in the highly technical wind farm industry. The statutory, technical, risk,
financial and project conditions imposed upon the wind farm construction companies cause supplier requirements that are
difficult for local SMMEs to comply with. These relate mostly to legislative compliance, industry codes and standards,
certification and accreditation, qualifications, skills and performance guarantees.
DEDEAT has initiated a programme to work with local municipalities, wind farm construction companies, development
finance and business development institutions to build the capability of local SMMEs to participate in the wind farm value
chains.
A service provider has recently been appointed to facilitate the 5th phase of the SMME in Energy programme. Their focus
will be on 3 municipalities where the construction of four wind farms will take place. A strong focus will be placed on the
Ngqushwa Municipality, where the Wesley Ciskei wind farm will be built.
The programme includes, among others,
• Support to the Ngqushwa Municipality;
• SMME support processes including resource packs, supplier days, business development sessions and match-making
with development finance and business development institutions; and
• Ongoing support for the Local Government-Independent Power Producer engagements, to ensure information flow
and synergy regarding the implementation of Socio-Economic Development (SED) and Enterprise Development (ED)
obligations by the wind farms.
Some of the objectives of the supplier day are to:
• Provide IPPs (and their respective EPCs and O&M contractors) with an opportunity to present opportunities for
SMMEs during construction and operation of wind energy facilities;
• Bring together government support departments and agencies so as to provide SMMEs with an opportunity to interact
with these departments and agencies based on the requirements of IPPs (e.g. trade finance, development finance,
certification, etc.); and
• Provide a platform for IPPs, SMMEs and local municipalities to engage simultaneously.
The Wesley Ciskei Wind Farm will start construction in November 2019, will connect to the grid in July 2020 and start
operating in June 2021. In late 2018 and early 2019 planning meetings took place with EDF Renewable (the developer of
the wind farm), in order to outline the process of collaboration around SMME development going forward.
EDF Renewables have committed to fully participate in the DEDEAT’s SMMEs Support Programme in Renewable
Energy by assisting Black enterprises and/or SMMEs to obtain statutory certifications and further development.
The wind farm will be appointing the Engineering, Procurement and Construction (EPC) contractor in May 2019. Once
the EPC is appointed, detailed structuring of support requirements can be undertaken.
91
2. Programme 3: Environmental Affairs
COMMITTEE FINDINGS
1. Findings
(a) The Department is in the process of developing a Provincial Recycling Strategy and is reviewing the Eastern Cape
Provincial Integrated Waste Management Strategy.
(b) The Department facilitated a joint venture with the Department of Mineral Resources (DMR) to create awareness and to
educate the public about illegal sand mining.
RESPONSES TO RECOMMENDATIONS
2. Recommendations
(a) The Department must within 30 days submit a progress report to the Committee on the respective processes.
DEDEAT RESPONSE:
Development of the EC Recycling Strategy: Public Consultation process has been undertaken at Amathole, Sarah
Baartman/NMBM, Chris Hani and Joe Gqabi. OR Tambo and Alfred Nzo public consultations will be undertaken
before the end of the current financial year.
EC IWMP public consultations have been undertaken in all Regions.
(b) The Committee commends the initiative. Furthermore, the Department must engage the DMR and formalise the initiative
so that a province-wide roll-out plan for educating the public about illegal sand mining is developed.
DEDEAT RESPONSE:
There were two joint law enforcement operations under Operation Phakisa that encompasses awareness about the
impact of illegal sand mining activities in the Wild Coast.
3. General findings and general recommendations
COMMITTEE FINDINGS
1. Findings
(a) The Department’s frayed labour relations are a risk to its operational environment and the attainment of performance
targets.
(b) The non-filling of posts in the adopted organogram poses an operational risk to the Department.
(c) The Department’s offices in King William’s Town are in a state of decay and are unsuitable for its employees.
RESPONSES TO RECOMMENDATIONS
Recommendation
(a) The Department must within 30 days submit a labour relations turnaround plan to the Committee.
DEDEAT REPONSE – See Attached Labour Relations Plan
(b) The Department must within 30 days submit a plan for the filling of posts.
DEDEAT REPONSE – See Attached Recruitment Plan
(c) The Department must within 30 days submit a report to the Committee on the state of its offices.
DEDEAT REPONSE – See Attached state of DEDEAT offices report
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4. General Recommendations
COMMITTEE FINDINGS
1. Findings
(a) The PCMT is centralised, cuts across departments and affects the responsibility of Accounting Officers in recruitment.
RESPONSES TO RECOMMENDATIONS
2. Recommendations
(a) The Department must work with OTP and report to the Committee on the efficiency and legal standing of the PCMT.
DEDEAT Response:
The department contacted various individuals to try and obtain the terms of reference or the proposal for the establishment
but so far have not been able to locate any of the documents. In discussion with Mr. Rupert Fortune (Acting Chief State
Law Advisor) he advised that he is aware that the proposal was made by the Office of the Premier to curb Departments,
especially the bigger ones like Education and Health from appointing staff where there was no funding for such
positions. No form of opinion on the committee was established yet but an EXCO resolution to the establishment of the
PCMT is attached hereto.
9. PRIOR MODIFICATION TO AUDIT REPORTS
The department has included the following information in the table as follows:
10. INTERNAL CONTROL UNIT
The Public Finance Management Act read with the National Treasury Regulations, is used as a primary basis
for compliance monitoring, and this is implemented through the review of procurement and payment
processes transaction by transaction. There is a considerable improvement in the financial management
function through the implementation of the approach
Despite the above, there is a room for improvement, once this is embedded in all management processes.
11. INTERNAL AUDIT AND AUDIT COMMITTEES
OBJECTIVE ASSURANCE RESPONSIBILITIES
Internal Audit Function must evaluate and contribute to the improvement of governance, risk management,
and control processes using a systematic and disciplined approach in the following areas:
11.1 Governance Processes
Internal Audit Function should contribute to the Departments’ governance processes by evaluating and
improving the governance processes in its accomplishment of the following objectives:-
Promoting appropriate ethics and values within the departments of Economic Development,
Environmental Affairs & Tourism;
Matters of non-compliance Financial year in
which it first
arose
Progress made in clearing / resolving the matter
Internal Audit: The departmental internal audit function was not fully
capacitated in the 2018/19 financial year this was fundamentally due to
the internal processes.
2018/19
93
Ensuring effective organisational performance management and accountability;
Communicating risk and control information to appropriate areas of the department;
Co-ordinating the activities of and communicating information among the management, external and
internal audit;
Internal Audit Function must evaluate the design, implementation, and effectiveness of DEDEAT’s
ethics-related programmes and activities.
Internal Audit Function must assess whether information technology governance of the department
supports the organization’s strategies and objectives.
11.2 Risk Management
Internal Audit Function must evaluate the adequacy and effectiveness and contribute to the improvement
of the risk management process.
Internal Audit Function must evaluate risk exposures relating to Departments’ governance, operations and
information systems regarding the:
Reliability and integrity of financial and operational information;
Effectiveness and efficiency of operations;
Safeguarding of assets; and
Compliance with laws, regulations, policies, procedures and contracts.
11.3 Control
Internal Audit Function must assist the Department in maintaining effective controls by evaluating their
effectiveness and efficiency and by promoting continuous improvement.
Internal Audit Function must evaluate the adequacy and effectiveness of controls in responding to risks within
the Departments’ governance, operations and information systems regarding the:
Reliability and integrity of financial and operational information;
Effectiveness and efficiency of operations;
Safeguarding of assets; and
Compliance with laws, regulations, policies, procedures and contracts
B. CONSULTING ACTIVITIES RESPONSIBILITIES
To provide consulting services which will contribute to the better management of the Departments’ significant
risks, without assuming management responsibilities.
The CAE will conduct an assessment of the consulting services’ impact on the objective assurance services
and reach a formal agreement with the Accounting Officer of the relevant Department. The required services
will be presented to the relevant Audit Committee for approval.
The internal audit function performed reviews in accordance with the approved annual audit plan.
12. AUDIT COMMITTEE AUTHORITY
12.1 The Audit Committee is authorised to request an investigation into any activity within its powers, as
identified in this Terms of Reference. The Audit Committee has the right to seek independent advice
and must be provided with the resources necessary to investigate such matters, following due process.
94
12.2 The Audit Committee shall have unrestricted access to departmental staff and records containing
information needed to properly perform its duties and execute its powers, following due process and
protocols.
12.3 The Audit Committee will safeguard all the information supplied to it, in full compliance with the law.
12.4 The Audit Committee will be afforded direct and unobstructed lines of communication to the relevant
Provincial Minister, Accounting Officer, Senior Management Team of the Department, the Provincial
Treasury as well as AGSA and the Internal Audit Function.
13. AUDIT COMMITTEE RESPONSIBILITIES
13.1 The Audit Committee’s responsibilities relating to Internal Audit, who evaluate and contribute to the
improvement of governance, risk management and control processes, are to:
Monitor and review the effectiveness of the Internal Audit Function including compliance with the
International Standards for the Professional Practice of Internal Auditing.
Review and approve the Internal Audit Charter and amendments thereto, at least annually.
Obtain annually from the CAE confirmation regarding the independence, objectivity and competency of
the Internal Audit Function.
Review and approve the Rolling 3-Year Strategic and Annual risk-based Internal Audit Coverage Plans
and changes in these plans, ensuring that material risk areas are included.
Promote a Combined Assurance Model, which will include inter-alia, co-ordination and co-operation
between AGSA and the Internal Audit Function to minimise duplication of effort and promote reliance
where possible.
13.2 Responsibilities relating to the External Audit Function performed by the Auditor-General of South
Africa (AGSA):
Review AGSA’ independence and objectivity and the effectiveness of the audit process, taking into
consideration relevant professional and regulatory requirements.
If the Audit Committee becomes aware of non-audit services being rendered by a firm contracted by
AGSA, it shall be reported to the Accounting Officer and AGSA.
Discuss with AGSA and the Department before the audit commences and, as deemed necessary during the
audit, the nature and scope of the audit (including the accounting principles, policies and practices adopted
in the preparation of Annual Financial Statements, planned levels of materiality, resourcing and the terms
of AGSA’s engagement letter and strategic plan). In particular, the Audit Committee should:
13.3 Responsibilities relating to Accounting and Financial Reporting
Review of Audited Annual Financial Statements (AFS)
Inspect and confirm that the AFS have been signed by the Accounting Officer (AO) on or before the date
of the audit report’
Enquire from AO if the AFS have been prepared in accordance with the Preparation Guide and Specimen
Financial Statements issued by National Treasury and in compliance with all applicable laws and
regulations;
Review AFS for abnormal and/or significant transactions of the department and the disclosure thereof in
the AFS;
Obtain explanations for all significant variances in the annual financial statements as compared to the
appropriated budget and prior year;
Enquire from management, AGSA and Legal Services about any outstanding litigation, contingencies and
claims, and how these matters are reflected in the department’s financial statements.
95
13.4 Review of accounting policies:
Ensure that the Accounting Policies are as per the policies disclosed in the specimen financial statements
issued by National Treasury. Where there are deviations, ensure that there is evidence of satisfactory
consultation with the Office of the Accountant-General (OAG) regarding the changes;
Consider the reasons for the changes in policies, if any. Assess whether changes have been correctly dealt
with and disclosed in the AFS;
Enquire whether these changes are consistent with the required accounting framework and if not, whether
National Treasury (OAG) approval has been obtained.
determine how significant financial reporting issues for the reporting period were resolved between
management and AGSA;
13.5 Responsibilities relating to Risk Management
Consider the Department’s risk management strategy and policy.
Review and discuss the risk management initiatives planned for the year and the results thereof.
Examine the manner in which management ensures and monitors the adequacy of the nature, intent and
effectiveness of the risk and control infrastructure of the relevant Department.
regularly receive assurance reports from management, the Internal Audit Function, AGSA and others on
the operational effectiveness of matters related to risk and control (inclusive of ICT risks) and the
conclusions of any testing carried out on them by the Internal Audit Function or AGSA;
13.6 Responsibilities relating to Internal Control
Review the adequacy and effectiveness of the internal control systems;
Consider disclosing implications of material internal control deficiencies identified in external audit
reports, internal audit reports or during the execution of the committee’s oversight functions, and the
manner in which management is dealing with it.
Review of the departments’ processes for compliance with the laws and regulations of applicable statute.
13.7 Responsibilities relating to the Pre-determined Objectives
Review on a quarterly basis the department’s progress towards achievement of its annual strategic
objectives as well as the quality of the Quarterly Performance Reports, and report to the Accounting
Officer, instances of non-achievement or slow progress.
13.8 Responsibilities relating to Ethics and Forensic Investigations
Review arrangements by which staff may, in confidence, raise concerns about possible improprieties in
matters of financial reporting or other matters, with a view to ensuring that arrangements are in place for
the appropriate and independent investigation of such matters and for appropriate follow-up action.
Review any situations that arise relating to violations of ethical conduct, potential conflict of interest or
questionable situations of a material nature that it becomes aware of and make suitable recommendations
to the Accounting Officer.
Evaluate the departments’ exposure to fraud.
Periodically receive reports on the prevention, detection and investigation of fraudulent activities or
misconduct within the department and the related management responses.
96
14. AUDIT COMMITTEE MEMBERS AND ATTENDANCE
The Audit Committee consists of the members listed hereunder and meets at least four times per annum as per
its approved terms of reference. During the current year six meetings were held. The members and their
attendance of the meetings held are as follows:
Name of
Member
Qualifications Internal
or
external
If internal,
position in
the
department
Date
appointed
Date
Resigned
No. of
Meetings
attended
No of Special
Meetings
attended
Tracy
Cumming
CA(SA), CTA,
B Comm
External None 01 August
2014
None 4 2
Simthandile
Peter
ML, LLB,
MDP,
External None 01 August
2014
None 4 2
Craig Sparg CA(SA), CTA,
B Comm
External None 01 August
2014
None 4 2
Nkosana
Sifumba
B Comm,
MBL, CISA,
CGEIT
External None 01 August
2014
None 3 2
15. AUDIT COMMITTEE REPORT
We present our report for the financial year ended 31 March 2019.
15.1 Audit Committee Responsibility
The Audit Committee reports that it has complied with its responsibilities arising from Section 77 of the
Public Finance Management Act and Treasury Regulation 3.1. The Audit Committee also reports that it has
adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in
compliance with this charter and has discharged all its responsibilities as contained therein.
15.2 The effectiveness of internal control
In line with PFMA and the King IV Report on Corporate Governance requirements, Internal Audit provides
the Audit Committee and management with assurance that the internal controls are appropriate and effective.
This is achieved by means of the risk management process, as well as the identification of corrective actions
and suggested enhancements to the controls and processes. From the various reports of the Internal Auditors,
it was noted that matters were reported indicating deficiencies in the system of internal control or deviations
there from. Accordingly, we can report that the system of internal control was not entirely effective for the
year under review.
15.3 The quality of in year management and monthly/quarterly reports submitted in terms of the
PFMA and the Division of Revenue Act
The Audit Committee is not entirely satisfied with the content and quality of quarterly performance reports,
due to the inherent control weaknesses in the performance management system.
97
15.4 Evaluation of Financial Statements and Annual Performance Report
The Audit Committee has:
Reviewed and discussed the annual financial statements to be included in the annual report with
management;
Reviewed and discussed the information on pre-determined objectives to be included in the annual
report with management;
Reviewed for changes in accounting policies and practices;
Advised management that the financial statements and performance report may not be free from
material misstatements due to the failure of internal controls during the preparation process;
Reviewed the Department’s compliance with legal and regulatory provisions.
Based on the Audit Committee’s review of the annual financial statements the Committee resolved that they
be recommended for submission to the Auditor General South Africa for auditing.
Based on the Audit Committee’s review of the information on predetermined objectives and the unassured
inherent risks related to the validity, accuracy and completeness of the portfolio of evidence to support
Programme 3, the Committee resolved that the report be recommended for submission to the Auditor General
South Africa for auditing, but may not be free from material misstatement.
15.5 Internal Audit
Implementation of the Quality Assurance Improvement Program (QAIP) by internal audit based on the
Quality Assurance Review performed by the Institute of Internal Auditors has been slow. Internal audit
received a Partially Conforms (PC) rating. Due to the slow implementation of the QAIP the Audit Committee
concludes that the Internal Audit function is still partially effective.
The internal audit function performed the following audits during the year:
o Corporate Governance
o Risk Management Process
o Management Performance Assessment Tool (MPAT)
o Records Management
o Interim Financial Statements (Half yearly)
o Supply Chain Management
o Transfer payments –
Public Entities
Municipalities (EPWP & GMC)
Household (Leave gratuity)
LRED
o Performance Information/ Predetermined objectives
o Compliance Audit - Environmental Affairs
o Compliance Audit - Economic development
o Safety, Health and Wellness Environment
o Follow up on Internal Audit Findings
o Follow up on Auditor General Findings
In the 2018/19 financial year an external service provider appointed to lead the internal audit division for a 12-
month period. The service provider commenced duties in April 2017.
98
There has been a marginal improvement, by management, in implementing internal audit recommendations.
15.6 Risk Management
The Head of Department established the Risk Management Committee (RMC) to exercise certain
responsibilities, as set out in the approved RMC Terms of Reference.
The RMC is chaired by an external Chairperson who brings a lot of valuable experience in Governance
matters.
The RMC reviewed risk management processes during the year. The following policy related documents on
Risk Management were approved, such as, Risk Management Policy, Risk Appetite Framework, 2018/19 Risk
Assessment Report and the Risk Management Implementation Plan. The Fraud Prevention Plan and Business
Continuity Plan are yet to be completed and approved.
The Head of Department committed management of the Department to comply with all relevant Corporate
Governance processes. Risk management and Internal Audit of the department reports at an appropriate level
(administratively report to the Head of Department and functionally to the Audit Committee).
All governance structures were established, such as Risk Management and IT Governance Committees.
There is a noticeable increase in risk management awareness in the Department, however there appears to be a
challenge in the integration and reporting processes.
For risk management maturity of the Department to improve, it is critical that recommendation made by the
RMC are implemented timely by management and effective monitoring of implementation take place.
15.7 ICT Governance
The Committee continued its focus on the Department’s Information and Communication Technology (ICT)
environment which included the review of the ICT Governance policy framework and Strategy. The
Corporate Governance of ICT Policy Framework has been reworked into a Departmental Corporate
Governance of ICT Policy Framework (CGICT) for implementation in the Department and is in its second
phase of implementation. The first phase covers, creating an enabling environment which addresses the
development of policies, structures, the allocation of accountability and responsibility for the implementation
of CGICT. The second phase focusses on the business and ICT strategic alignment.
Although, most components of the CGICT have been addressed, the Audit Committee highlighted the risks of
not having the Business Continuity Management Program in place and a tested Disaster Recovery Plan. The
Committee further noted that, although the IT Steering committee is in place, it is not yet fully effective due to
non-attendance by some of the key stakeholders in the Department and this needs urgent management
intervention.
The Department has made progress in establishing ICT support standards, data governance, ICT governance
structure. However, there are still weaknesses that need further improvement particularly in security
management, user account management and service continuity controls.
99
15.8 Auditor-General South Africa
The Audit Committee has met with the Auditor General of South Africa to discuss the Audit Strategy at the
commencement of the audit and has planned to met at the conclusion of the audit to ensure that there are no
unresolved issues. The Audit Committee concurs with the conclusions reached by the auditor general.
Appreciation
The Audit Committee expresses its sincere appreciation to the Executive Authority, Accounting Officer,
AGSA, Management, and internal audit for their support and co-operation.
Mrs T Cumming
Audit Committee Chairperson
31 May 2019
100
PART D: HUMAN RESOURCE MANAGEMENT
101
1. LEGISLATION THATGOVERNHRMANAGEMENT
The following pieces of legislation govern the activities of the human resource function in the
Department:
The Constitution of the Republic of South Africa (Act 106 of 1996)
Public Service Act 103 of 1994
Public Service Regulations Act of 2001
Labour Relations Act 66 of 1995
Occupational Health and Safety Act 85 of 1993
Basic Conditions of Employment Act 11 of 2002
Skills Development Act
2. INTRODUCTION
The Human Resource Management directorate of the Department is responsible for Human resource
development, Staff Provisioning, Management of employee benefits, management of Labour Relations,
and management of Staff performance, Organisational development and employee wellness.
There has been noticeable improvement in terms of reporting and compliance, the finalisation of the
Organisational realignment process, improved management of Labour Relations and vigorous
implementation of employee wellness programmes received focus in the 2018/19 financial year.
In terms of Compliance Management and Accountability Framework, the Department had shown
continuous improvement in that reports were submitted to the Office of the Premier on a regular basis.
The Annual Recruitment Plan (ARP) was developed and approved so as to manage the filling of
vacancies. Vacancies have been filled in line with the ARP and the DPSA directives even though there
has been delays due to structural review process that has been unfolding. In terms of compliance to
Employment Equity Act and the Department’s Employment equity plan, the department currently has
41% females at SMS level which is below the 50% required target. In terms of people with disabilities,
the department is at 1,08% which is far below the 7% target.
There has been improvement in management of employee records, processing of employee benefits,
especially pension pay-outs. Pension pay-outs were received by former employees within 30 days of
processing. Monthly leave auditing has been introduced for effective and efficient management of leave in
order to improve monitoring and control thereof.
There has been disputes with organised labour due to disagreements with the implementation of the
structure amongst other things and these has resulted to the disbandment of the Labour Management
Forum. The bilateral meetings between individual unions and the management have continued in order to
ensure that issues of mutual interest are discussed and resolved and as such there has been improvement of
relations between the parties. Resuscitation of the Labour Management forum is in the plans for 2019/20
and the focus will be on relationship building between management and organised labour.
102
In the department more than 90% of SMS have contracted within the required turn-around times. The staff
below SMS level remained at the acceptable level in terms of contracting with also more than 90% of staff
having signed contracts by the end of March 2019. The improvement was a result of a number of
interventions such as training and development on the application of the Performance Management and
Development System (PMDS) and consequence management for non-compliance to policy and deadlines.
There has, however, been delays in the processing of pay progression and performance bonuses due to a
high number of grievances and appeals on the outcomes of the moderation of performance. The MEC
appointed an appeals committee to deal with disputes on the outcomes of the moderation process.
Employee Wellness programmes were rolled out during the year so as to ensure compliance to the DPSA
pillars of Employee Health and Wellness. Policy advocacy sessions are regularly conducted and HR
circulars are developed so as to ensure that officials were kept informed of all Human Resource related
policy changes within the Department.
3. HUMAN RESOURCES OVERSIGHT STATISTICS
3.1. Personnel Related Expenditure
The following tables summarise the final audited personnel related expenditure by programme and by salary
bands. In particular, it provides an indication of the following:
amount spent on personnel
amount spent on salaries, overtime, homeowner’s allowances and medical aid.
Table 3.1.1 Personnel expenditure by programme for the period 1 April 2018 and 31 March 2019
Programme
Total Expenditure
(R’000)
Personnel
Expenditure (R’000)
Training
Expenditure
(R’000)
Professional and
Special Services
Expenditure (R’000)
Personnel
Expenditure as
a % of Total
Expenditure
Average
Personnel Cost
per Employee
(R’000)
Administration 229 935 114 940 1 352 705,15 0 50 418
Economic
development
599 758 58 573 127 497,30 0 9,80 542
Environmental affairs 336 907 83 808 334 666,54 0 24,90 511
TOTAL 1 166 852 257 573 1 814 868,99 0 22,10 471
Table 3.1.2 Personnel costs by salary band for the period 1 April 2018 and 31 March 2019
Salary Band
Personnel Expenditure
(R’000)
% of Total Personnel
Cost
No. Of Employees
Average Personnel
Cost per Employee
(R’000)
Abnormal Appointment 1 476 0,60 27 52 846
Contract (Levels 13-16) 3 663 1,40 06 800 000
Contract (Levels 6-8) 355 0,10 1 355 000
Contract (Levels 9-12) 5 229 2 4 1 307 250
Highly skilled production (Levels 6-8) 90 517 34,10 230 393 552
Highly skilled supervision (Levels 9-12) 93 182 35,10 141 660 865
Senior management (Levels 13-16) 36 181 13,60 35 1 033 743
Skilled (Levels 3-5) 28 372 10,70 108 262 704
TOTAL 258 976 97,70 546 473 508
Note: The total of 546 employees reflected in the above tabled includes 27learners and interns (shown as “abnormal appointment) As at 1 April 2018, the Department had a
total of 06 contract workers at SMS level, in September contracts expired and these post were replaced by permanent posts. So by 31 March 2019, there were no contract
workers at SMS level.
103
Table 3.1.3 Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for the period 1 April 2018 and 31 March
2019
Programme
Salaries
Overtime
Home Owners Allowance
Medical Aid
Amount
(R’000)
Salaries as
a % of
Personnel
Costs
Amount
(R’000)
Overtime as a
% of Personnel
Costs
Amount
(R’000)
HOA as a %
of Personnel
Costs
Amount
(R’000)
Medical aid as
a % of
Personnel
Costs
Administration 94 379,00 80,50 351,00 0,30 4 147,00 3,50 5 872,00 5,00
Economic
development
45 519,00 82,20 0,00 0,00 1 472,00 2,70 1 931,00 3,50
Environmental affairs 73 452,00 79,40 34,00 0,00 2 714,00 2,90 4 123,00 4,50
TOTAL 213 350,00 80,50 385,00 0,10 8 333,00 3,10 11 925,00 4,50
Table 3.1.4 Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for the period 1 April 2018 and 31
March 2019
Salary Bands
Salaries
Overtime
Home Owners Allowance
Medical Aid
Amount (R’000
Salaries as
a % of
Personnel
Costs
Amount
(R’000)
Overtime as a %
of Personnel
Costs
Amount
(R’000)
HOA as a % of
Personnel
Costs
Amount
(R’000)
Medical Aid as
a % of
Personnel Costs
Abnormal 1 476,00 98,40 0,00 0,00 0,00 0,00 0,00 0,00
Contract (Levels 13-
16)
3 641,00 94,40 0,00 0,00 6,00 0,20 0,00 0,00
Contract (Levels 6-8) 337,00 94,90 0,00 0,00 0,00 0,00 0,00 0,00
Contract (Levels 9-12) 5 068,00 95,00 8,00 0,10 9,00 0,20 22,00 0,40
Highly skilled 77 997,00 80,70 123,00 0,10 2 244,00 2,30 3 146,00 3,30
Highly skilled 72 019,00 79,10 173,00 0,20 3 499,00 3,80 5 704,00 6,30
Senior management 32 037,00 84,20 0,00 0,00 840,00 2,20 259,00 0,70
Skilled (Levels 3-5) 20 774,00 73,10 81,00 0,30 1 734,00 6,10 2 794,00 9,80
TOTAL 213 350,00 80,50 385,00 0,10 8 333,00 3,10 11 925,00 4,50
3.2. Employment and Vacancies
Thetablesinthissectionsummarisethepositionwithregardtoemploymentandvacancies, showing the number of posts on
the establishment, the number of employees, the vacancy rate, and whether there are any staff that are
additional to the establishment.
This information is presented in terms of three key variables:
programme
salary band
critical occupations
104
Table 3.2.1 Employment and vacancies by programme as on 31 March 2019
Programme
Number of Posts
on Approved
Establishment
Number of Posts Filled
Vacancy Rate (%) Number of Employees Additional
to the Establishment
Administration 324 247 23,80 0
Economic development 147 101 31,30 0
Environmental affairs 255 171 32,90 0
Total 726 519 28,50 0
Table 3.2.2 Employment and vacancies by salary band as on 31 March 2019
Salary band
Number of Posts on
Approved
Establishment
Number of Posts Filled
Vacancy Rate (%)
Number of
Employees
Additional to
the
Establishment
Skilled (Levels 3-5), Permanent 118 108 8,50 0
Highly Skilled Production (Levels 6-8),
Permanent
329 230 30,10 0
Highly Skilled Supervision (Levels 9-
12), Permanent
235 141 40,00 0
Senior Management (Levels 13-16),
Permanent
39 35 10,30 0
Contract (Levels 9-12), Permanent 1 1 0,00 0
Contract (Levels 13-16), Permanent 4 4 0,00 0
TOTAL 726 519 28,50 0
Table 3.2.3 Employment and vacancies by critical occupations as on 31 March 2019
Critical Occupations
Number of Posts
Number of Posts
Filled
Vacancy Rate
(%)
Number of Posts Filled
Additional to the
Establishment
Administrative related, Permanent 23 15 34,80 0
Agricultural Animal Oceanography Forestry & Other
Science, Permanent
145 124 14,50 0
Agriculture related, Permanent 3 3 0,00 0
Bus and Heavy Vehicle Drivers, Permanent 2 0 100,00 0
Cleaners In Offices Workshops Hospitals etc.,
Permanent
10 9 10,00 0
Client Inform Clerks (Switch B Receipt Inform Clerks),
Permanent
19 18 5,30 0
Communication and Information related, Permanent 3 3 0,00 0
Conservation Labourers, Permanent 1 1 0,00 0
Economists, Permanent 1 1 0,00 0
Engineering Sciences related, Permanent 3 0 100,00 0
Finance and Economics related, Permanent 7 3 57,10 0
Financial and related Professionals, Permanent 1 1 0,00 0
Financial Clerks and Credit Controllers, Permanent 18 10 44,40 0
Head of Department/Chief Executive Officer, Permanent 40 27 32,50 0
Human Resources & OrganisaTDevelopM& related
Prof, Permanent
18 15 16,70 0
Human Resources Clerks, Permanent 2 0 100,00 0
Human Resources related, Permanent 1 1 0,00 0
Information Technology related, Permanent 14 11 21,40 0
Language Practitioners Interpreters & other Commun,
Permanent
37 31 16,20 0
Library Mail and related Clerks, Permanent 22 7 68,20 0
Light Vehicle Drivers, Permanent 5 2 60,00 0
Logistical Support Personnel, Permanent 3 2 33,30 0
105
Critical Occupations
Number of Posts
Number of Posts
Filled
Vacancy Rate
(%)
Number of Posts Filled
Additional to the
Establishment
Material-Recording and Transport Clerks, Permanent 2 2 0,00 0
Nature Conservation and OceanographicalRel.Techni,
Permanent
1 1 0,00 0
Other Administrat& Related Clerks and Organisers,
Permanent
19 17 10,50 0
Other Administrative Policy and related Officers,
Permanent
1 1 0,00 0
Other Information Technology Personnel., Permanent 1 0 100,00 0
Other Occupations, Permanent 2 1 50,00 0
Regulatory Inspectors, Permanent 55 12 78,20 0
Secretaries & other Keyboard Operating Clerks, 31 28 9,70 0
Security Officers, Permanent 26 26 0,00 0
Senior Managers, Permanent 35 31 11,40 0
Trade/Industry Advisers & other related Profession, 89 54 39,30 0
TOTAL 726 519 28,50 0
3.3. Filling of SMS Posts
Table 3.3.1 SMS post information as on 31 March 2019
SMS Level
Total number of funded
SMS posts
Total number of SMS
posts filled
% of SMS posts filled
Total number of
SMS posts vacant
% of SMS posts
vacant
Director-General/Head of
Department
Salary Level 16 1 1 100 0 0
Salary Level 15 0 0 0 0 0
Salary Level 14 4 4 100 0 0
Salary Level 13 33 30 90.10% 3 3.03%
Total 38 35 92.1% 3 7.89%
Table 3.3.2 SMS post information as on 30 September 2018
SMS Level
Total number of funded
SMS posts
Total number of SMS
posts filled
% of SMS posts filled
Total number of
SMS posts vacant
% of SMS posts
vacant
Director-General/Head of
Department
Salary Level 16 1 1 100 0 0
Salary Level 15 0 0 0 0 0
Salary Level 14 4 4 100 0 0
Salary Level 13 33 30 90.10 3 3.03
Total 38 35 92.1 3 7.89
Table 3.3.3 Advertising and filling of SMS posts for the period 1 April 2018 and 31 March 2019
SMS Level
Advertising Filling of Posts
Number of vacancies per level
advertised in 6 months of
becoming vacant
Number of vacancies per level
filled in 6 months of becoming
vacant
Number of vacancies per level
not filled in 6 months but
filled in 12 months
Director-General/Head of Department
Salary Level 16 0 0 0
Salary Level 15 0 0 0
Salary Level 14 0 0 0
Salary Level 13 5 5 3
Total 5 5 3
106
Table 3.3.4 Reasons for not having complied with the filling of funded vacant SMS – Advertised within 6 months and filled within 12
months after becoming vacant for the period 1 April 2018 and 31 March 2019
Reasons for vacancies not filled within twelve months
No suitable candidates could be found
(See Public Service Regulations Chapter 1, Part VIIC.1A.3).
Table 3.3.5 Disciplinary steps taken for not complying with the prescribed timeframes for filling SMS posts within 12 months for the
period 1 April 2018 and 31 March 2019
Reasons for vacancies not advertised within six months
N/A
Reasons for vacancies not filled within six months
No suitable candidates found and as result posts had to be re-advertised.
(See Public Service Regulations Chapter 1, Part VIIC.1A. 2 and Section 16A(1) or (2) of the Public Service Act).
3.4. Job Evaluation
The following table summarises the number of jobs that were evaluated during the year under review. The table also
provides statistics on the number of posts that were upgraded or downgraded.
Table 3.4.1 Job evaluation by salary band for the period 1 April 2018 and 31 March 2019
Salary Band
Number of Posts on
Approved
Establishment
Number of
Jobs
Evaluated
% of Posts
Evaluated by
Salary Bands
Posts Upgraded Posts downgraded
Number
% of Posts
Evaluated
Number
% of Posts
Evaluated
Lower skilled (Levels 1-2) 0 0 0 0 0 0 0
Skilled (Levels 3-5) 19 19 100% 0 0 0 0
Highly skilled production
(Levels 6-8)
288 288 100% 0 0 0 0
Highly skilled supervision
(Levels 9-12)
205 205 99% 0 0 0 0
Senior management
Service band A
34 34 100% 0 0 0 0
Senior management
Service band B
4 4 100% 0 0 0 0
Senior Management
Service Band C
1 1 100% 0 0 0 0
Contract (Levels 3-5) 0 0 0 0 0 0 0
Contract (Levels 6-8) 0 0 0 0 0 0 0
Contract (Levels 9-12) 1 1 100% 0 0
Contract (B and A) 0 0 0 0 0 0 0
Contract (B and B) 0 0 0 0 0 0 0
TOTAL 0 0 0 0 0 0 0
The following table provides a summary of the number of employees whose positions were upgraded due to their post
being upgraded.
107
Table3.4.2Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1 April 2018 and 31 March
2019
Beneficiary African Asian Coloured White Total
Female 0 0 0 0 0
Male 0 0 0 0 0
Total 0 0 0 0 0
Employees with a disability
The following table summarises the number of cases where remuneration bands exceeded the grade determined by
job evaluation. Reasons for the deviation are provided in each case.
Table 3.4.3 Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2018
and 31 March 2019
Occupation
Number of
Employees
Job Evaluation
Level
Remuneration
level
Reason for deviation
Administrative related, Permanent 0 0 0 N/A
Administrative officers 0 0 0 N/A
Agriculture animal oceanography forestry & other science, Permanent 0 0 0 N/A
Audit manager (Internal) 0 0 0 N/A
Consumer advisors 0 0 0 N/A
Economists, Permanent 0 0 0 N/A
Economists, Permanent 0 0 0 N/A
Finance and economics related, Permanent 0 0 0 N/A
Financial and related professionals, Permanent 0 0 0 N/A
Head of Department/ Chief Executive Officer 0 0 0 N/A
Human resources and organisational development & relate prof Permanent 0 0 0 N/A
Information technology related, Permanent 0 0 0 N/A
Internal Auditors managers 0 0 0 N/A
Logistical support personnel, Permanent 0 0 0 N/A
Material-recording and transport clerks, Permanent 0 0 0 N/A
Nature conservation and oceanographical related technician, Permanent 0 0 0 N/A
Network controller 0 0 0 N/A
Other administrative policy and related officers, Permanent 0 0 0 N/A
Other information technology personnel, Permanent 0 0 0 N/A
Resource Assistant 0 0 0 N/A
Records Controller 0 0 0 N/A
Secretaries (personal assistants) 0 0 0 N/A
Security officer, Permanent 0 0 0 N/A
Special Programmes Practitioner 0 0 0 N/A
State Accountants 0 0 0 N/A
Tourism manager, Permanent 0 0 0 N/A
Trade/industry advisers & other related profession, Permanent 0 0 0 N/A
TOTAL 0 0 0 N/A
The following table summarises the beneficiaries of the above in terms of race, gender, and disability.
108
Table 3.4.4 Profile of employees who have salary levels higher than those determined by job evaluation for the period 1 April 2018
and 31 March 2019
Beneficiary African Asian Coloured White Total
Female 0 0 0 0 0
Male 0 0 0 0 0
Total 0 0 0 0 0
Employees with a disability 0 0 0 0 0
3.5. Employment Changes
This section provides information on changes in employment over the financial year. Turnover rates provide an
indication of trends in the employment profile of the Department. The following tables provide a summary of
turnover rates by salary band and critical occupations.
Table 3.5.1 Annual turnover rates by salary band for the period 1 April 2018 and 31 March 2019
Salary Band
Number of Employees
at Beginning of Period-
April 2018
Appointments and
Transfers into the
Department
Terminations and
Transfers out of the
Department
Turnover Rate
Skilled (Levels 3-5) 115 0 7,00 6,10
Highly skilled production (Levels 6-8) 234 9,00 8,00 3,40
Highly skilled supervision (Levels 9-12) 137 5,00 5,00 3,60
Senior management Service bands A
20 7,00 0,00 0,00
Senior management Service bands B 5 0,00 0,00 0,00
Senior management Service bands C 1 0,00 0,00 0,00
Contracts 15 4,00 15,00 100,00
Total 528 26,00 35,00 6,60
109
Table 3.5.2 Annual turnover rates by critical occupation for the period 1 April 2018 and 31 March 2019
Occupation
Employment at
beginning of
period- 1 April
2018
Appointments
and transfers
into the
department
Terminations
and transfers
out of the
department
Turnover Rate
Administrative related Permanent 15 1 1 6,70
Agricul Animal Oceanography Forestry & other Scien Permanent 122 6 3 2,50
Agriculture related Permanent 2 0 0 0,00
Bus and Heavy Vehicle Drivers Permanent 9 0 0 0,00
Cleaners in offices Workshops Hospitals etc. Permanent 22 0 4 18,20
Client Inform Clerks(SwitchB Receipt Inform Clerks) Permanent 3 0 0 0,00
Conservation Labourers Permanent 1 0 0 0,00
Economists Permanent 1 0 0 0,00
Engineering Sciences related Permanent 3 0 0 0,00
Farming Forestry Advisors and Farm Managers Permanent 1 0 0 0,00
Finance and Economics related Permanent 11 2 3 27,30
Financial and related Professionals Permanent 27 2 3 11,10
Financial Clerks and Credit Controllers Permanent 16 0 1 6,30
Head of Department/Chief Executive Officer Permanent 1 0 0 0,00
Human Resources & OrganisatDevelopM& Relate Prof Permanent 12 0 1 8,30
Human Resources Clerks Permanent 33 0 2 6,10
Human Resources related Permanent 8 0 1 12,50
Information Technology related Permanent 1 0 0 0,00
Language Practitioners Interpreters & other Commun Permanent 1 1 0 0,00
Library Mail and related Clerks Permanent 2 0 0 0,00
Life Sciences related Permanent 1 0 0 0,00
Light Vehicle Drivers Permanent 17 0 0 0,00
Logistical Support Personnel Permanent 1 0 0 0,00
Material-Recording and Transport Clerks Permanent 1 0 0 0,00
Nature Conservation and OceanographicalRel.Techni Permanent 11 1 0 0,00
Other Administrat& related Clerks and Organisers Permanent 39 1 1 2,60
Other Administrative Policy and related officers Permanent 14 0 0 0,00
Other Information Technology Personnel. Permanent 4 0 0 0,00
Other Occupations Permanent 3 0 0 0,00
Regulatory Inspectors Permanent 4 0 0 0,00
Secretaries & other Keyboard Operating Clerks Permanent 30 0 2 6,70
Security officers Permanent 28 0 2 7,10
Senior Managers Permanent 31 7 6 19,40
Trade/Industry Advisers & other related Profession Permanent 53 5 5 9,40
TOTAL 528 26 35 6,60
The table below identifies them as or reasons why staff have left the Department
110
Table 3.5.3 Reasons why staff have left the Department for the period 1 April 2018 and 31 March 2019
Termination Type Number % of Total Terminations
Death 0 0
Resignation 13 28.88%
Expiry of contract 14 31.11%
Dismissal – operational changes 0 0
Dismissal – misconduct 2 4.44%
Dismissal – inefficiency 0 0
Discharged due to ill-health 0 0
Retirement 15 33.33%
Transfer to other Public Service Departments 1 2.22%
Other 0 0
Total 45 100%
Total number of employees who left as a % of total employment is
8.33% 8.52
%
Table 3.5.4 Promotions by critical occupation for the period 1 April 2018 and 31 March 2019
Occupation
Employment at
Beginning of
Period (1 April
2018)
Promotions
to Another
Salary Level
Salary
Level
Promotions
as a % of
Employees
by
Notch
Progression
s as a % of
Employees
by
occupation
Administrative related 15 0 0,00 80,00
Agricul Animal Oceanography Forestry & other Science 122 0 0,00 136,10
Agriculture related 2 0 0,00 100,00
Bus and Heavy Vehicle Drivers 9 0 0,00 100,00
Cleaners in offices Workshops Hospitals etc. 22 0 0,00 81,80
Client Inform Clerks(SwitchB Receipt Inform Clerks) 3 0 0,00 66,70
Conservation Labourers 1 0 0,00 100,00
Economists 1 0 0,00 100,00
Engineering Sciences Related 3 0 0,00 100,00
Farming Forestry Advisors and Farm Managers 1 0 0,00 63,60
Finance and Economics related 11 1 9,10 66,70
Financial and related Professionals 27 1 3,70 87,50
Financial Clerks and Credit Controllers 16 0 0,00 0,00
Head of Department/Chief Executive officer 1 0 0,00 66,70
Human Resources &Organisat DevelopM& relate Prof 12 0 0,00 93,90
Human Resources Clerks 33 0 0,00 37,50
Human Resources Related 8 0 0,00 100,00
Information Technology Related 1 1 100,00 100,00
Language Practitioners Interpreters & other Commun 1 0 0,00 100,00
Library Mail and related Clerks 2 0 0,00 100,00
Light Vehicle Drivers 1 0 0,00 88,20
Logistical Support Personnel 17 0 0,00 100,00
Material-Recording and Transport Clerks 1 0 0,00 100,00
Nature Conservation and OceanographicalRel.Techni 1 0 0,00 136,40
111
Occupation
Employment at
Beginning of
Period (1 April
2018)
Promotions
to Another
Salary Level
Salary
Level
Promotions
as a % of
Employees
by
Notch
Progression
s as a % of
Employees
by
occupation
Other Administrate & related Clerks and Organisers 11 0 0,00 89,70
Other Administrative Policy and related officers 39 0 0,00 71,40
Other Information Technology Personnel. 14 0 0,00 50,00
Other Occupations 4 0 0,00 66,70
Regulatory Inspectors 3 0 0,00 100,00
Secretaries & other Keyboard Operating Clerks 4 0 0,00 80,00
Security Officers 28 0 0,00 96,40
Senior Managers 31 0 0,00 80,60
Trade/Industry Advisors & other related Profession 53 3 5,70 66,00
TOTAL 528 6 1,10 93,90
Table 3.5.5 Promotions by salary band for the period 1 April 2018 and 31 March 2019
Salary Band
Employees 1 April
2018
Promotions to
another salary
level
Salary bands
promotions as a %
of employees by
salary level
Progressions to
another notch
within a salary
level
Notch progression
as a % of
employees by
salary bands
Skilled (Levels 3-5), Permanent 115 0 0,00 108 93,90
Highly Skilled Production (Levels 6-8), Permanent 234 0 0,00 211 90,20
Highly Skilled Supervision (Levels 9-12), Permanent 137 5 3,60 149 108,80
Senior Management (Levels 13-16), Permanent 26 1 3,80 27 103,80
Contract (Levels 6-8), Permanent 1 0 0,00 0 0,00
Contract (Levels 9-12), Permanent 8 0 0,00 1 12,50
Contract (Levels 13-16), Permanent 7 0 0,00 0 0,00
TOTAL 528 6 1,10 496 93,90
3.6. Employment Equity
Table 3.6.1 Total number of employees (including employees with disabilities) in each of the following occupational categories as at
31 March 2019
Occupational Categories
Male Female Total
African
Coloured
Indian
White
African
Coloured
Indian
White
Senior Officials and Managers 15 0 0 5 9 0 0 3 249
Professionals 105 3 3 15 117 2 0 4 57
Technicians and Associates 21 0 0 3 30 1 0 2 22
Clerks 27 1 0 0 85 2 0 4 10
Service Shop and Market Sales
Workers
18 1 0 0 10 1 0 0 30
Plant and Machine Operators and 9 0 0 0 0 0 0 1 119
Labourers and related Workers 7 0 0 0 15 0 0 0 32
TOTAL 202 5 3 23 266 6 0 14 519
112
Table 3.6.2 - Total number of employees (incl. employees with disabilities) per occupational bands as on 31 March 2019
Occupational Categories
Male Female Total
African Coloured Indian White African Coloured Indian White
Occupational Bands
Top Management, Permanent
1 0 0 0 0 0 0 0 1
Senior Management, Permanent
15 1 0 5 10 0 0 3 34
Professionally qualified and experienced
specialists and mid-management, Permanent
62 1 2 17 56 1 0 2 141
Skilled technical and academically qualified
workers, junior management, supervisors,
78 2 1 1 136 3 0 9 230
Semi-skilled and discretionary decision making,
Permanent
43 1 0 0 62 2 0 0 108
Contract (Senior Management), Permanent
3 0 0 0 1 0 0 0 4
Contract (Professionally Qualified), Permanent 0 0 0 0 1 0 0 0 1
TOTAL
202 5 3 23 266 6 0 14 519
Employees with disabilities 4
Table 3.6.3 Recruitment for the period 1 April 2018 and 31 March 2019
Occupational Categories
Male Female Total
African Coloured Indian White African Coloured Indian White
Occupational Bands
Senior Management, Permanent
3 1 0 1 2 0 0 1 8
Professionally qualified and experienced
specialists and mid-management, Permanent
3 0 0 0 2 0 0 0 2
Skilled technical and academically qualified
workers, junior management, supervisors,
foremen, Permanent
4 0 0 0 5 0 0 0 5
Contract (Professionally qualified), Permanent
1 0 0 0 2 0 0 0 2
TOTAL
11 1 0 1 10 0 0 1 17
Employees with disabilities 0
113
Table 3.6.4 – Promotions for the period 1 April 2018 and 31 March 2019
Occupational Categories
Male Female Total
African
Coloured
Indian
White
African
Coloured
Indian
White
Occupational Bands
Top Management, Permanent 0 0 0 0 0 0 0 0 0
Senior Management, Permanent 1 0 0 0 0 0 0 0 1
Professionally qualified and experienced
specialists and mid-management, Permanent
0 0 0 0 0 0 0 0 0
Skilled technical and academically qualified
workers, junior management, supervisors,
0 0 0 0 0 0 0 0 0
Semi-skilled and discretionary decision making,
Permanent
0 0 0 0 0 0 0 0 0
Contract (Senior Management), Permanent 0 0 0 0 0 0 0 0 0
Contract (Professionally qualified), Permanent 0 0 0 0 0 0 0 0 0
TOTAL 1 0 0 0 0 0 0 0 0
Table 3.6.5 - Terminations for the period 1 April 2018 and 31 March 2019
Occupational Categories
Male Female Total
African
Coloured
Indian
White
African
Coloured
Indian
White
Occupational Bands
02 Senior Management, Permanent
0 0 0 0 1 0 0 0 1
03 Professionally qualified and experienced
specialists and mid-management, Permanent
2 0 0 0 2 0 1 0 5
04 Skilled technical and academically qualified
workers, junior management, supervisors,
foremen, Permanent
1 0 0 0 6 0 0 1 8
05 Semi-skilled and discretionary decision
making, Permanent
4 0 0 0 3 0 0 0 7
10 Contract (Professionally qualified), Permanent 3 1 0 1 4 0 0 1 10
TOTAL
10 1 0 1 16 0 1 2 31
Table 3.6.6 Disciplinary action for the period 1 April 2018 and 31 March 2019
Disciplinary Action
Male Female
African Coloured Indian White African Coloured Indian White Total
TOTAL
10 0 0 2 5 00 0 0 17
114
Table 3.6.7 Skills development for the period 1 April 2018 and 31 March 2019
Occupational category
Male
Female
Total
African Coloured Indian White African Coloured Indian White
Legislators, senior officials
and managers
7 0 0 3 5 0 0 2 17
Professionals 10 2 1 8 12 0 0 9 42
Technicians and associate
professionals
2 0 0 0 0 0 0 0 2
Clerks 70 6 0 4 77 5 0 3 163
Service and sales
workers
7 0 0 0 6 0 0 2 15
Skilled agriculture and
fishery workers
5 0 0 3 4 0 0 3 15
Craft and related
trades workers
0 0 0 0 0 0 0 0 0
Plant and machine
operators and assemblers
0 0 0 0 0 0 0 0 0
Elementary
occupations
0 0 0 0 0 0 0 0 0
TOTAL 101 8 1 18 104 5 0 19 254
Employees with
disabilities
0 0 0 0 0 0 0 0 0
3.7 Signing of Performance Agreements by SMS members
To encourage good performance, the Department has granted the following performance rewards during the year under
review. The information is presented in terms of race, gender, and disability, and salary bands and critical occupations.
Table 3.7.1 Signing of Performance Agreements by SMS members as on 31 May 2018
SMS Level
Total number of funded
SMS posts
Total number of
SMS posts filled
% of SMS posts
filled
Total number
of SMS posts
vacant
% of SMS posts vacant
Director-General/Head of
Department
0 0 0 0 0
SalaryLevel16 1 1 100% 0 0
SalaryLevel15 0 0 0 0 0
SalaryLevel14 5 5 100% 0 0
SalaryLevel13 33 30 90% 3 10%
TOTAL 36 36 90% 3 10%
Table 3.7.2 Reasons for not having concluded Performance agreements for all SMS members as on 31 May 2018
Reasons
All SMS contracts were concluded
Table 3.7.3 Disciplinary steps taken against SMS members for not having concluded Performance agreements as on 31 May 2018
Reasons
N/A
115
3.8 Performance Rewards
3.8.1 Performance rewards by race, gender and disability for the period 1 April 2018 and 31 March 2019
Race and Gender
Beneficiary Profile Cost
Number of
beneficiaries
Number of
employees
% of Total within
group
Cost
(R’000)
Average cost per
employee (R’)
African, Male 15 198 7.60 264.97 17 665,00
Asian, Male 0 6 0.00 0.00 0.00
Coloured, Male 0 5 0.00 0.00 0.00
White, Male 1 23 4.30 26.70 26 697,00
African, Female 24 266 9.00 346.79 14 450,00
Asian, Female 0 0 0.00 0.00 0.00
Coloured, Female 0 6 0.00 0.00 0.00
White, Female 4 14 28.60 67.02 16 756,00
Total 44 518 49.0 705.48 234 658,00
Table 3.8.2 Performance rewards by salary band for personnel below Senior Management Service for the period 1 April 2018 and 31
March 2019
Salary Band
Beneficiary Profile Cost Total cost as a %
of the total
personnel
expenditure
Number of
beneficiaries
Number of
employees
% of Total
within salary
bands
Total cost
(R’000)
Average cost
per employee
(R)
Lower skilled (Levels 1-2) 0 0 0 0 0 0
Skilled (Level 3-5) 18 108 16.70 193.14 10 730,00 18.00
Highly skilled production (Level 6-8) 15 23 6.50 236.34 15 756,00 15.00
Highly skilled supervision (Level 9-12) 12 141 8.50 291.55 24 296,00 12.00
TOTAL 45 479 31.70 721.03 50 782,00 45.00
Table 3.8.3 Performance rewards by critical occupation for the period 1 April 2018 and 31 March 2019
Critical Occupation
Beneficiary Profile Cost
Number of
beneficiaries
Number of
employees
% of Total
within
occupation
Total cost (R)
Average cost per
employee
Administrative related 1 15 6,70 16,73 16 727,00
Agricultural animal oceanography
forestry & other science
9 124 7,30 205,13 22 793,00
Agriculture related 0 3 0,00 0,00 0,00
Bus and heavy vehicle drivers 2 9 22,20 27,14 13 572,00
Cleaners in offices workshops
hospitals etc.
2 18 11,10 13,77 6 887,00
Client in form clerks (switchboard
,receptionist ,information clerks)
0 3 0,00 0,00 0,00
Computer system designers and
analysts
0 0 0 0 0
Conservation labourers 0 1 0,00 0,00 0,00
Economists 1 3 33,30 31,64 31 640,00
116
Critical Occupation
Beneficiary Profile Cost
Number of
beneficiaries
Number of
employees
% of Total
within
occupation
Total cost (R)
Average cost per
employee
Engineering sciences related 0 0 0 0 0
Farming, forestry advisors and farm
managers
0 0 0 0 0
Finance and economics related 0 10 0,00 0,00 0,00
Financial and related professionals 1 27 3,70 26,70 26 697,00
Financial clerks and credit
controllers
3 15 20,00 41,23 13 742,00
Head of Department/Chief
Executive Officer
0 1 0,00 0,00 0,00
Human resources, organisational
development & relate prof
0 11 0,00 0,00 0,00
Human resources clerks 6 31 19,40 62,82 10 470,00
Human resources related 0 0 0 0 0
Information technology related 0 2 0,00 0,00 0,00
Language practitioners, interpreters
& other communication
0 2 0,00 0,00 0,00
Legal related 0 0 0 0 0
Library mail and related clerks 0 2 0,00 0,00 0,00
Life sciences related 0 0 0 0 0
Light vehicle drivers 0 1 0,00 0,00 0,00
Logistical support personnel 3 17 17,60 43,97 14 656,00
Material-recording and transport
clerks
0 1 0,00 0,00 0,00
Nature conservation and
oceanographically related
technicians
1 12 8,30 21,96 21 965,00
Other administrative, related clerks
and organisers
5 39 12,80 72,87 14 574,00
Other administrative policy and
related officers
1 12 8,30 17,66 17 657,00
Other information technology
personnel
0 4 0,00 0,00 0,00
Other occupations 1 3 33,30 15,04 15 043,00
Regulatory inspectors 1 4 25,00 15,62 15 617,00
Secretaries & other key board
operating clerks
3 28 10,70 50,84 16 946,00
Security officers 4 26 15.40 33.68 8 420,00
Senior managers 0 31 0.00 0.00 0.00
Trade/industry advisers & other
related profession
1 58 1.90 24.23 24 229,00
TOTAL 43 505 237.00 707.26 291 639.00
Notes: The CORE classification, as prescribed by the DPSA, was used for completion of this table.
117
Table 3.8.4 Performance related rewards (cash bonus), by salary band for senior management for the period 1 April 2018 and 31
March 2019
Salary Band Beneficiary Profile Cost Total cost as a
% of the total
personnel
expenditure
Number of
beneficiaries
Number of
employees
% of Total within
salary bands
Total cost (R’000)
Average cost per
employee
B and A Band A 29 0.00 0.00 0.00 32 846,99
B and B Band B 5 0.00 0.00 0.00 6 652,56
B and C Band C 1 0.00 0.00 0.00 2 413,09
B and D Band D 35 0.00 0.00 0.00 41 912,63
TOTAL TOTAL
3.9 Foreign Workers
The tables below summarise the employment of foreign nationals in the Department in terms of salary band and major
occupation.
Table 3.9.1 Foreign workers by salary band for the period 1 April 2018 and 31 March 2019
Salary Band
01 April 2018 31 March 2019 Change
Number % of Total Number % of Total Number % Change
Highly skilled production (Lev. 6-8) 0 0,00 0 0,00 0 0,00
Highly skilled supervision (Lev. 9-12) 0 0,00 0 0,00 0 0,00
Contract (Level 9-12) 0 0,00 0 0,00 0 0,00
Contract (Level 13-16) 0 0,00 0 0,00 0 0,00
TOTAL 0 0,00 0 0,00 0 0,00
Table 3.9.2 Foreign workers by major occupation for the period 1 April 2018 and 31 March 2019
Major Occupation
01 April 2018 31 March 2019 Change
Number % of Total Number % of Total Number % Change
0 0,00 0 0,00 0 0,00
118
3.10 Leave Utilisation
The Public Service Commission identified the need for careful monitoring of sick leave within the public service.
The following tables provide an indication of the use of sick leave and disability leave. In both cases, the estimated
cost of the leave is also provided.
Table 3.10.1 Sick leave for the period 1 January 2018 and 31 December 2018
Salary Band
Total Days
% Days with
Medical
Certification
Number of
Employees using
Sick Leave
% of Total
Employees using
Sick Leave
Average Days per
Employee
Estimated Cost
(R’000)
Contract (Levels 13-16) 26 69,20 6 1,30 4 98,00
Contract (Levels 3-5) 0 0,00 0 0,00 0 0,00
Contract (Levels 6-8) 0 0,00 0 0,00 0 0,00
Contract (Levels 9-12) 24 70,80 5 1,10 5 60,00
Highly skilled production
(Levels 6-8)
1 789 62,40 206 44,60 9 2 541,00
Highly skilled supervision
(Levels 9-12)
857 65,10 123 26,60 7 2 125,00
Senior management (Levels
13-16)
136 68,40 23 5,00 6 556,00
Skilled (Levels 3-5) 789 60,80 99 21,40 8 676,00
TOTAL 3 621 63,00 462 100,00 8 6 055,00
Table 3.10.2 Disability leave (temporary and permanent) for the period 1 January 2018 and 31 December 2018
Salary Band
Total Days
% Days with
Medical
Certification
Number of
Employees using
Disability Leave
% of Total
Employees using
Disability Leave
Average Days
per Employee
Estimated Cost (R’000)
Highly skilled production (Levels 6-8) 149 100,00 7 46,66 21 216,00
Highly skilled supervision (Levels 9-12) 253 100,00 8 53,33 32 711,00
TOTAL 402 100,00 15, 100,00 53 927,00
The table below summarises the utilisation of annual leave. The wage agreement concluded with trade unions in the
PSCBC in 2000, requires the management of annual leave to prevent high levels of accrued leave being paid at the time of
termination of service.
Table 3.10.3 Annual leave for the period 1 January 2018 and 31 December 2018
Salary Band
Total Days Taken
Number of Employees
using annual leave
Average Days per
Employee
Contract (Levels 13-16) 87 7 12
Contract (Levels 3-5) 0 0 0
Contract (Levels 6-8) 4 1 4
Contract (Levels 9-12) 86 9 10
Highly skilled production (Levels 6-8) 6 005 244 25
Highly skilled supervision (Levels 9-12) 3 773 145 26
Senior management (Levels 13-16) 750 33 23
Skilled (Levels 3-5) 3 381 114 30
TOTAL 14 086 553 25
119
Table 3.10.4 Capped leave for the period 1 January 2018 and 31 December 2018
Salary Band
Total Days of Capped
Leave Taken
Number of Employees
Using Capped Leave
Average number of days
taken per Employee
Average Capped leave per employee
as on 31 Dec 2018
58,68 8 7 96
Highly skilled supervision (Levels 9-12) 8,36 3 3 88
Senior management (Levels 13-16) 0,00 0 0 96
Skilled (Levels 3-5) 119,00 10 12 74
TOTAL 186,04 21 9 86
The following table summarise payments made to employees as a result of leave that was not taken.
Table 3.10.5 Leave pay-outs for the period 1 April 2018 and 31 March 2019
Reason
Total Amount (R’000)
Number of Employees
Average Payment
per Employee (R’000)
Leave pay-out for 2016/17 due to non-utilisation of leave for previous cycle
28,00 1 28 000,00
Capped leave pay-outs on termination of service for 2017/18
882,00 8 110 250,00
Current leave pay-out on termination of service for 2017/18
411,00 17 47931,00
TOTAL 1 320,00 26
3.11 HIV/AIDS & Health Promotion Programmes
Table 3.11.1 Steps taken to reduce the risk of occupational exposure
Units/Categories of Employees Identified to beat High Risk of Contracting HIV &
Related Diseases (if any)
Key Steps Taken to Reduce the Risk
Interns and Learners Voluntary Counselling and testing is conducted through
GEMs on a Quarterly basis. All employees are encouraged
to test. Condoms are provided to all officials and
distributed to the toilets. Sex and HIV/Aids education
conducted.
Table 3.11.2 Details of health promotion and HIV/AIDS programmes (tick the applicable boxes and provide the required information)
Question Yes No Details, if Yes
1. Has the Department designated a member of the SMS to
implement the provisions contained in Part VIE of Chapter 1 of
the Public Service Regulations, 2001? If so, provide her/his name
and position.
The Senior Manager: HRPP is a designated person to
implement the provision of EH & W as per the Public
Service Regulations.
2. Does the Department have a dedicated unit, or has it designated
specific staff members, to promote the health and well-being
of employees? If so, indicate the number of employees who are
involved in this task and the annual budget that is available for
this purpose.
Under HRPP, there is unit dealing with EH & W so as
to ensure the implementation of PSR.
Question Yes No Details, if Yes
3. Has the Department introduced an Employee Assistance or Health
Promotion Programme for employees? If so, indicate the key
elements/services of this Programme.
1. Physical Health, for example the Department has
a dedicated sports day every week.
2. Health & Education sessions
3. Referral of employees to the Psychologists
120
Question Yes No Details, if Yes
4. Has the Department established (a) committee(s) as
contemplated in Part VIE.5(e) of Chapter 1 of the Public Service
Regulations, 2001? If so, please provide the names of the members
of the committee and the stakeholder(s) that they represent.
The Department does not have aa structure committee
to deal with HIV/AIDS in the workplace, however there
are appointed Peers educators to deal with issues of
HIV/AIDS and STI’s.
Voluntary Counselling and testing is conducted through
GEMs on a Quarterly basis. All employees are
encouraged to test. Condoms are provided to all
officials and distributed to the toilets. Sex and
HIV/Aids education conducted.
5. Has the Department reviewed its employment policies and
practices to ensure that these do not unfairly discriminate against
employees on the basis of their HIV status? If so, list the
employment policies/practices so reviewed.
The Department has developed an HIV /AIDS policy
and HIV/AIDS is also mainstream in other policies.
6. Has the Department introduced measures to protect HIV-positive
employees or those perceived to be HIV-positive from
discrimination? If so, list the key elements of these measures.
Voluntary Counselling and testing is conducted
through GEMs on a Quarterly basis. All employees are
encouraged to test. Condoms are provided to all
officials and distributed to the toilets. Sex and
HIV/Aids education conducted. There is also
HIV/AIDS policy.
7. Does the Department encourage its employees to undergo
voluntary counselling and testing? If so, list the results that have
you achieved.
In the year under review, 104 employees tested for
HIV/AIDS and they all know their status.
8. Has the Department developed measures/indicators to
monitor & evaluate the impact of its health promotion
programme? If so, list these measures/indicators.
Sick leave utilization
3.12 Labour Relations
Table 3.12.1 Collective agreements for the period 1 April 2018 and 31 March 2019
Subject Matter
Date
N/A
The following table summarises the outcome of disciplinary hearings conducted within the Department for the year under
review.
Table 3.12.2 Misconduct and disciplinary hearings finalised for the period 1 April 2018 and 31 March 2019
Outcomes of Disciplinary Hearings Number % of Total
Correctional counselling 0 0
Verbal warning 0 0
Written warning 02 18.18%
Final written warning 04 36.36%
Suspended without pay 02 18.18%
Fine 0 0
Demotion 0 0
Dismissal 2 18.18%
Not guilty 0 0
Case withdrawn 1 9.09%
Total 11 100%
121
Table 3.12.3 Types of misconduct addressed at disciplinary hearings for the period 1 April 2018 and 31 March 2019
Type of misconduct Number % of Total
Without permission – misuse of GG Vehicle 02 11.7%
Unlawful removal of property and tempering with security measures 03 17.6%
Gross insubordination and putting the department in disrepute 0 0
Failure to declare financial interests 01 5.8%
Unauthorised absence 05 29.4%
Insubordination – threatening the supervisor 03 17.6%
Gross insubordination and non-compliance with prescripts: contravention of the PFMA 02 11.7%
Unbecoming conduct 01 5.8%
TOTAL 17 100%
Table 3.12.4 Grievances logged for the period 1 April 2017 and 31 March 2018
Number % of Total
Number of grievances resolved 10 55.6%
Number of grievances not resolved
08 44.4%
TOTAL 18 100%
Table 3.12.5 Disputes logged with Councils for the period 1 April 2018 and 31 March 2019
Number % of Total
Number of disputes upheld
07 77.7%
Number of disputes dismissed
01 11.1%
Number of disputes pending 01 11.1%
Total number of disputes lodged 09 100%
Table 3.12.6 Strike actions for the period 1 April 2018 and 31 March 2019
Total number of persons working days lost N/A
Total costs working days lost N/A
Amount recovered as a result of no work no pay (R’000) N/A
Table 3.12.7 Precautionary suspensions for the period 1 April 2018 and 31 March 2019
Number of people suspended
02
Number of people whose suspension exceeded 30 days
02
Average number of days suspended
1161 days
Cost of suspension (R’000) R537 863 911
3.13SkillsDevelopment
This section highlights the efforts of the Department with regard to skills development.
Table 3.13.1 Training needs identified for the period 1 April 2018 and 31 March 2019
Occupational Category
Gender
Number of
Employees as at
1 April 2017
Training Needs Identified at Start of the Reporting Period
Learnerships
Skills Programmes
& Other Short
Courses
Other Forms
of Training
Total
Legislators, senior officials and
managers
Female 15 0 5 0 20
Male 13 0 7 0 20
Professionals
Female 25 0 3 0 28
Male 28 0 5 0 33
Technicians and associate
professionals
Female 4 0 2 0 6
Male 4 0 2 0 6
122
Occupational Category
Gender
Number of
Employees as at
1 April 2017
Training Needs Identified at Start of the Reporting Period
Learnerships
Skills Programmes
& Other Short
Courses
Other Forms
of Training
Total
Legislators, senior officials and
managers
Female 15 0 5 0 20
Male 13 0 7 0 20
Clerks
Female 90 0 13 0 103
Male 99 0 11 0 110
Service and sales workers
Female 10 0 3 0 13
Male 15 0 3 0 18
Skilled agriculture and fishery
workers
Female 15 0 4 0 19
Male 10 0 5 0 15
Craft and related trades workers Female 0 0 0 0 0
Plant and machine operators and
assemblers
Male 5 0 1 0 6
Female 0 0 0 0 0
Elementary occupations
Male 15 0 2 0 17
Female 20 0 2 0 22
Sub Total Female 179 0 32 0 211
Male 189 0 36 0 225
*this total excludes bursaries awarded to officials
Table 3.13.2 Training provided for the period for the period 1 April 2018 and 31 March 2019
Occupational Category
Gender
Number of
Employees
as at 1
April 2017
Training Provided within the Reporting Period
Learnerships
Skills
Programmes
& Other
Short
Courses
Other Forms
of Training
Total
Legislators, senior officials and managers
Female 7 0 5 0 12
Male 10 0 9 0 19
Professionals
Female 21 0 2 0 23
Male 21 0 3 0 24
Technicians and associate
professionals
Female 0 0 0 0 0
Male 2 0 2 0 4
Clerks
Female 85 0 10 0 95
Male 80 0 10 0 90
Service and sales workers
Female 8 0 1 0 9
Male 7 0 1 0 8
Skilled agriculture and fishery worker
Female 7 0 1 0 8
Male 8 0 1 0 9
Craft and related trades workers Female 0 0 0 0 0
Male 0 0 0 0 0
Plant and machine operators and
assemblers
Female 0 0 0 0 0
Male 0 0 0 0 0
Elementary occupations Female 0 0 0 0 0
Male 0 0 0 0 0
Sub Total Female 128 0 19 0 147
Male 126 0 26 0 152
Total 254 0 45 0 299
123
3.14 Injury on Duty
The following tables provide basic information on injury on duty.
Table 3.14.1 Injury on duty for the period 1 April 2018 and 31 March 2019
Nature of Injury on Duty Number % of total
Required basic medical attention only 0,00 0,00
Temporary total disablement 0,00 0,00
Permanent disablement 0,00 0,00
Fatal 0,00 0,00
Total 0,00 0,00
3.15 Utilisation of Consultants
Table 3.15.1 Report on consultant appointments using appropriated funds for the period 1 April 2018 and 31 March
2019
Project Title
Total Number of
Consultants That
Worked on Project
Duration
Contract Value in Rand
Due Diligence on LRED funding
1 12
R 267 200,00
Internal Audit Services
1 12
R 1 475 392,50
Development of a consumer Confidence Research Index
1 12
R 357 807,62
Feasibility study and business plan for six district
agricultural fresh produce multi-user facilities.
1 12
R 1 193 725,00
Socio- Economic study focusing on Export
Manufacturing, Industry structure, value chain analysis
and port capacities to stimulate industrial growth and
development in the Eastern Cape.
1 12
R 410 614,60
Development of a localization programme for EC maritime manufacturing sector FY2018/19 to
FY2019/20
1 12
R 418 800,00
Maintain and Support manufacturing companies in
distress FY2018/19 to FY 2020/21
1 36
R 1 375 423,00
Development of Air Quality Management Plan.
1 12
R 463 565,00
Support to SMME’s in the energy sector Phase 5
1 12
R 486 316,24
Oversight, Facilitation & Training for Hybrid Minigrid
in Upper Blinkwater
1 36
R 2 672 082,50
Implementation of a localization Programme for the EC Gas to Power Sector and Bunkering Services.
1 24
R 1 071 450,00
EC Business incubation strategic framework and
implementation model
1 5
R 423 368,10
Total Number of Projects
Total Individual
Consultants
Total Duration
Total Contract Value in Rand
124
Table 3.15.2 Analysis of consultant appointments using appropriated funds, in terms of Historically
Disadvantaged Individuals (HDIs) for the period 1 April 2018 and 31 March 2019
Project Title
Percentage Ownership by HDI
Groups
Percentage Management by
HDI Groups
Number of Consultants from
HDI Groups That Work on the
Project
This information is not
available due to the
introduction of the BEE
certificate.
Table 3.15.3 Report on consultant appointments using donor funds for the period 1 April 2018 and 31 March 2019
Project Title
Total Number of Consultants
That Worked on Project
Duration
Work Days
Donor and Contract Value in
Rand
None
Total Number of Projects
Total Individual Consultants
Total Duration
Work Days
Total Contract Value in Rand
N/A
Table 3.15.4 Analysis of consultant appointments using Donor funds, in terms of Historically Disadvantaged
Individuals (HDIs) for the period 1 April 2018 and 31 March 2019 Project Title
Percentage Ownership by HDI
Groups
Percentage Management by
HDI Groups
Number of Consultants from
HDI Groups That Work on the
Project
None
3.16 Severance Packages
Table 3.16.1 Granting of employee initiated severance packages for the period 1 April 2018 and 31 March 2019
Salary Band
Number of
applications
received
Number of
applications
referred to the
MPSA
Number of
applications
supported by MPSA
Number of packages
approved by
Department
Lowers killed (Levels 1-2) 0 0 0 0
Skilled (Level 3-5) 0 0 0 0
Highly skilled production (Level 6-8) 0 0 0 0
Highly skilled supervision (Level 9-12) 0 0 0 0
Senior management (Levels 13-16) 0 0 0 0
Total 0 0 0 0
125
PART E: FINANCIAL INFORMATION
126
Audit Report
For the year ended
31 March 2019
127
Report on the audit of the financial statements
Report of the auditor-general to the Eastern Cape Provincial
Legislature on vote no. 9: Eastern Cape Department of Economic
Development, Environmental Affairs and Tourism
Opinion
1. I have audited the financial statements of the Eastern Cape Department of Economic
Development, Environmental Affairs and Tourism set out on pages 135 to 209, which
comprise the appropriation statement, the statement of financial position as at 31 March
2019, the statement of financial performance, statement of changes in net assets and the
cash flow statement for the year then ended, as well as the notes to the financial
statements, including a summary of significant accounting policies.
2. In my opinion, the financial statements present fairly, in all material respects, the financial
position of the Eastern Cape Department of Economic Development, Environmental
Affairs and Tourism as at 31 March 2019, and its financial performance and cash flows
for the year then ended in accordance with the Modified Cash Standard (MCS) prescribed
by the National Treasury and the requirements of the Public Finance Management Act of
South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Division of Revenue Act of South
Africa, 2018 (Act No. 1 of 2018) (Dora).
Basis for opinion
3. I conducted my audit in accordance with the International Standards on Auditing (ISAs).
My responsibilities under those standards are further described in the auditor-general’s
responsibilities for the audit of the financial statements section of this auditor’s report.
4. I am independent of the department in accordance with sections 290 and 291 of the
International Ethics Standards Board for Accountants’ Code of ethics for professional
accountants and parts 1 and 3 of the International Ethics Standards Board for Accountants’
International code of ethics for professional accountants (including International Independence
Standards) (IESBA codes) as well as the ethical requirements that are relevant to my audit in
South Africa. I have fulfilled my other ethical responsibilities in accordance with these
requirements and the IESBA codes.
5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a
basis for my opinion.
Emphasis of matters
6. I draw attention to the matters below. My opinion is not modified in respect of these matters.
128
Irregular expenditure
7. Irregular expenditure of R5,4 million (2018: R214,3 million) is disclosed in note 27 to
the financial statements. Included in this total, is prior year irregular expenditure that has
accumulated over a number of years. The National Treasury, as the relevant condoning
authority, has condoned R210,6 million (2018: R6,5 million) relating to the opening
balance. Irregular expenditure of R1,7 million (2018: R30,1 million) incurred during the
current year is included in the total amount disclosed.
Material underspending of the budget
8. As disclosed in the appropriation statement, the department materially underspent the current
year budget by R18,7 million, as detailed in the notes to the appropriation statement.
Restatement of corresponding figures
9. As disclosed in note 35 to the financial statements, the corresponding figures for 31 March
2018 were restated, as a result of an error in the financial statements of the department at, and
for the year ended, 31 March 2019.
Other matter
10. I draw attention to the matter below. My opinion is not modified in respect of this matter.
Unaudited supplementary information
11. The supplementary information set out on pages 197 to 209 does not form part of the
financial statements and is presented as additional information. I have not audited these
schedules and, accordingly, I do not express an opinion on them.
Responsibilities of the accounting officer for the financial statements
12. The accounting officer is responsible for the preparation and fair presentation of the
financial statements in accordance with the MCS and the requirements of the PFMA and
Dora, and for such internal control as the accounting officer determines is necessary to
enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
13. In preparing the financial statements, the accounting officer is responsible for assessing
the Eastern Cape Department of Economic Development, Environmental Affairs and
Tourism’s ability to continue as a going concern, disclosing, as applicable, matters
relating to going concern and using the going concern basis of accounting unless the
appropriate governance structure either intends to liquidate the department or to cease
operations, or has no realistic alternative but to do so.
129
Report on the audit of the annual performance report
Auditor-general’s responsibilities for the audit of the financial
statements
14. My objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes my opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with the ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial
statements.
15. A further description of my responsibilities for the audit of the financial statements is included
in the annexure to this auditor’s report.
Introduction and scope
16. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA)
and the general notice issued in terms thereof, I have a responsibility to report material
findings on the reported performance information against predetermined objectives for
selected programmes presented in the annual performance report. I performed procedures
to identify findings but not to gather evidence to express assurance.
17. My procedures address the reported performance information, which must be based on
the approved performance planning documents of the department. I have not evaluated
the completeness and appropriateness of the performance indicators included in the
planning documents. My procedures also did not extend to any disclosures or assertions
relating to planned performance strategies and information in respect of future periods
that may be included as part of the reported performance information. Accordingly, my
findings do not extend to these matters.
18. I evaluated the usefulness and reliability of the reported performance information in
accordance with the criteria developed from the performance management and reporting
framework, as defined in the general notice, for the following selected programmes
presented in the annual performance report of the department for the year ended 31 March
2019:
Programmes Pages in the annual
performance report
Programme 2 – Economic Development and Tourism 47-64
Programme 3 – Environmental Affairs 64-76
130
19. I performed procedures to determine whether the reported performance information was
properly presented and whether performance was consistent with the approved
performance planning documents. I performed further procedures to determine whether
the indicators and related targets were measurable and relevant, and assessed the
reliability of the reported performance information to determine whether it was valid,
accurate and complete.
20. I did not raise any material findings on the usefulness and reliability of the reported
performance information for programme 2 – economic development and tourism.
21. The material findings in respect of the reliability of programme 3 are as follows:
Programme 3 – Environmental Affairs
Number of administrative enforcement notices issued for non-compliance with environmental
management legislation
22. I was unable to obtain sufficient appropriate audit evidence for the reported achievement of
the target. This was due to limitations placed on the scope of my work. I was unable to
confirm the reported achievement by alternative means. Consequently, I was unable to
determine whether any adjustments were required to the reported achievement of 64 for the
performance indicator. This is not in line with the requirements of section 40(3)(a) of the
PFMA, public service regulation (PSR) 25(1)(e), and chapter 5 of the Framework for
Managing Programme Performance Information (FMPPI).
Number of permits issued within legislated time-frames
23. The reported achievement for the target of 1 600 for the performance indicator was
misstated, as the evidence provided indicated 1 289 and not 994 as reported. This is not in
line with the requirements of section 40(3)(a) of the PFMA and chapter 5 of the FMPPI.
Other matters
24. I draw attention to the matters below.
Achievement of planned targets
25. Refer to the annual performance report on pages 47 to 76 for information on the
achievement of planned targets for the year and explanations provided for the under- or
overachievement of a number of targets. This information should be considered in the
context of the material findings on the reliability of the reported performance information in
paragraphs 22 to 23 of this report.
131
Other information
Adjustment of material misstatements
26. I identified material misstatements in the annual performance report submitted for
auditing. These material misstatements were on the reported performance information of
programme 3 – Environmental Affairs. As management subsequently corrected only
some of the misstatements, I raised material findings on the reliability of the reported
performance information. Those that were not corrected are reported above.
Introduction and scope
27. In accordance with the PAA and the general notice issued in terms thereof, I have a
responsibility to report material findings on the compliance of the department with specific
matters in key legislation. I performed procedures to identify findings but not to gather
evidence to express assurance.
28. The material finding on compliance with the specific matter in key legislation is as follows:
Strategic planning and performance management
29. Specific information systems were not implemented to enable the monitoring of progress
made towards achieving targets, core objectives and service delivery, as required by PSR
25(1)(e)(i) and (iii).
30. The accounting officer is responsible for the other information. The other information
comprises the information included in the annual report. The other information does not
include the financial statements, the auditor’s report and those selected programmes
presented in the annual performance report that have been specifically reported in this
auditor’s report.
31. My opinion on the financial statements and findings on the reported performance information
and compliance with legislation do not cover the other information and I do not express an
audit opinion or any form of assurance conclusion thereon.
32. In connection with my audit, my responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial
statements and the selected programmes presented in the annual performance report, or my
knowledge obtained in the audit, or otherwise appears to be materially misstated.
33. If based on the work I have performed, I conclude that there is a material misstatement in this
other information, I am required to report that fact. I have nothing to report in this regard.
Report on the audit of compliance with legislation
132
Internal control deficiencies
34. I considered internal control relevant to my audit of the financial statements, reported
performance information and compliance with applicable legislation; however, my objective was
not to express any form of assurance on it. The matters reported below are limited to the
significant internal control deficiencies that resulted in the findings on the annual performance
report and the finding on compliance with legislation included in this report.
The monitoring of internal controls, compliance with key legislation as well as financial
and performance reporting was not effective, as issues raised in the current year were
previously reported. An action plan needs to be implemented and monitored regularly for
progress to be made.
Some instances of non-compliance re-occurred during the current financial year as a
result of the inadequate review of the performance report for consistency with the plan as
well as the validity and accuracy of reported information against supporting records.
The audit committee fulfilled its oversight responsibilities as legislated; however, the
committee’s impact was hampered by management’s slow response to internal audit and
external audit findings as well as capacity issues in the unit.
East London
31 July 2019
Auditing to build public confidence
133
Annexure – Auditor-general’s responsibility for the audit
1. As part of an audit in accordance with the ISAs, I exercise professional judgement and
maintain professional scepticism throughout my audit of the financial statements, and the
procedures performed on reported performance information for selected programmes and
on the department’s compliance with respect to the selected subject matters.
Financial statements
2. In addition to my responsibility for the audit of the financial statements as described in this
auditor’s report, I also:
identify and assess the risks of material misstatement of the financial statements
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
my opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control
obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the department’s internal control
evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the accounting officer
conclude on the appropriateness of the accounting officer’s use of the going concern
basis of accounting in the preparation of the financial statements. I also conclude,
based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Department of Economic
Development, Environmental Affairs and Tourism’s ability to continue as a going
concern. If I conclude that a material uncertainty exists, I am required to draw attention
in my auditor’s report to the related disclosures in the financial statements about the
material uncertainty or, if such disclosures are inadequate, to modify the opinion on the
financial statements. My conclusions are based on the information available to me at
the date of this auditor’s report. However, future events or conditions may cause a
department to cease continuing as a going concern
evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation
Communication with those charged with governance
3. I communicate with the accounting officer regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that I identify during my audit.
4. I also confirm to the accounting officer that I have complied with relevant ethical
requirements regarding independence, and communicate all relationships and other matters
that may reasonably be thought to have a bearing on my independence and, where
applicable, related safeguards.
134
Annual Financial Statements
for the year ended
31 March 2019
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
Notes to the Appropriation Statement
1. Detail of transfers and subsidies as per Appropriation Act (after Virement):
Detail of these transactions can be viewed in the note on Transfers and subsidies, disclosure notes and Annexure 1 (A-H) to the Annual Financial Statements.
2. Explanations of material variances from Amounts Voted (after Virement):
2.1 Per programme
Figures in Rand thousand
Final Appropriation
Actual Expenditure
Variance
Variance as a
% of Final Appropriation
Programme 1: ADMINISTRATION 233,580 224,888 8,691 3.7 % Programme 2: ECONOMIC DEVELOPMENT AND 606,612 598,608 8,005 1.3 %
TOURISM Programme 3: ENVIRONMENTAL AFFAIRS
338,860
336,900
1,960
0.6 %
2.2 Per economic classification
Figures in Rand thousand Final Actual Variance Variance as a Appropriation Expenditure % of Final Appropriation Current payments
Compensation of employees 258,302 257,573 729 0.3 % Goods and services 137,191 124,541 12,650 9.2 % Transfers and subsidies
Provinces and municipalities 13,450 13,450 - - % Departmental agencies and accounts 728,667 728,667 - - % Public corporations and private enterprises 21,001 19,870 1,131 5.4 % Non-profit institutions 1,583 1,575 8 0.5 % Households 1,689 1,689 - - % Payments for capital assets
Buildings and other fixed structures 5,000 1,326 3,674 73.5 % Machinery and equipment 12,169 11,705 464 3.8 %
The underspending on good and services is as a result of late payment of Microsoft licences as there has been a difficulty to register a foreign bank transaction. Two transfers for LRED projects were not processed as their Centralized Supplier Database (CSD) information were incomplete. Also underspending on the implementation of the social infrastructure projects due to the delays.by the NMBM in finalising the units that were to be built
2.3 Per conditional grant
Figures in Rand thousand
Final Appropriation
Actual Expenditure
EPWP 2,204 2,204
167
Statement of Financial Performance
Figures in Rand thousand Note 2018/2019 2017/2018
Revenue
Annual appropriation
1
1,179,052
1,118,666
Departmental revenue 2 412 -
Aid assistance 3 - 8,915
Total revenue 1,179,464 1,127,581
Expenditure
Current expenditure
Compensation of employees
4
257,573
240,050
Goods and services 5 124,541 125,059
Total current expenditure 382,114 365,109
Transfers and subsidies
Transfers and subsidies
7
765,251
668,698
Aid assistance 3 - 8,841
Total transfers and subsidies 765,251 677,539
Expenditure for capital assets
Tangible assets
8
13,031
43,764
Payments for financial assets 6 - 208
Total expenditure 1,160,396 1,086,620
Surplus for the year 19,068 40,961
Reconciliation of Net Surplus for the year
Voted funds
Annual appropriation
18,656
40,887
18,656 40,887
Departmental revenue and NRF Receipts 16 412 -
Aid assistance 3 - 74
Surplus for the year 19,068 40,961
168
Statement of Financial Position as at 31 March 2019
Figures in Rand thousand Note 2018/2019 2017/2018
Assets
Current Assets
Cash and cash equivalents 10 40,647 53,475
Prepayments and advances 11 - 22
Receivables 12 1,120 4,494
41,767 57,991
Non-Current Assets
Investments 13 427,597 427,597
Receivables 12 6,802 3,528
Loans 14 198 191
434,597 431,316
Total Assets 476,364 489,307
Liabilities
Current Liabilities
Voted funds to be surrendered to the Revenue Fund 15 18,656 40,887
Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund 16 25,012 15,531
Payables 17 1,111 1,505
Aid assistance repayable 3 74 74
44,853 57,997
Non-Current Liabilities
Payables 18 4,114 3,917
Total Liabilities 48,967 61,914
427,397 427,393
Represented by:
Capitalisation reserve 427,597 427,597
Recoverable revenue (200) (204)
Total 427,397 427,393
169
Statement of Changes in Net Assets Figures in Rand thousand Note 2018/2019 2017/2018
Capitalisation Reserves Opening balance
427,597
427,590
Transfers: Movement in Equity
-
7
Closing balance 427,597 427,597
Recoverable revenue Opening balance
(204)
527
Transfers: Irrecoverable amounts written off
-
(921)
Debts revised 198 190
Debts raised (194) -
Closing balance (200) (204)
Total 427,397 427,393
170
Cash Flow Statement
Figures in Rand thousand Note 2018/2019 2017/2018
Cash flows from operating activities
Receipts
Annual appropriated funds received 1.1 1,179,052 1,118,666
Departmental revenue received 2 218,361 206,105
Interest received 2.3 384 279
Aid assistance received 3 - 8,915
1,397,797 1,333,965
Net (increase)/decrease in working capital
(272)
4,986
Surrendered to Revenue Fund (250,151) (302,753)
Current payments (382,114) (365,109)
Payments for financial assets - (208)
Transfers and subsidies paid (765,251) (677,539)
Net cash flow available from operating activities 19 9 (6,658)
Cash flows from investing activities
Payments for capital assets 8 (13,031) (43,764)
Proceeds from sale of capital assets 2.4 - 178
(Increase)/decrease in loans (7) 730
(Increase) in investments - (7)
Net cash flows from investing activities (13,038) (42,863)
Cash flows from financing activities
Increase/(decrease) in net assets
4 (724)
Increase/(decrease) in non-current payables 197 (383)
Net cash flows from financing activities 201 (1,107)
Cash and cash equivalents at beginning of period
53,475
104,103
Net (decrease) in cash and cash equivalents (12,828) (50,628)
Cash and cash equivalents at the end of the year 20 40,647 53,475
Accounting Policies
171
Summary of significant accounting policies
The annual financial statements have been prepared in accordance with the following policies, which have been applied consistently in all material aspects, unless otherwise indicated. Management has concluded that the annual financial statements present fairly the department’s primary and secondary information.
The historical cost convention has been used, except where otherwise indicated. Management has used assessments and estimates in preparing the annual financial statements. These are based on the best information available at the time of preparation.
Where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the annual financial statements and to comply with the statutory requirements of the Public Finance Management Act (PFMA), Act 1 of 1999 (as amended by Act 29 of 1999, and the Treasury Regulations issued in terms of the PFMA and the annual Division of Revenue Act.
1. Basis of preparation
The annual financial statements have been prepared in accordance with the Modified Cash Standard.
2. Going concern
The annual financial statements have been prepared on a going concern basis.
3. Presentation currency
Amounts have been presented in the currency of the South African Rand (R) which is also the functional currency of the department.
4. Rounding
Unless otherwise stated financial figures have been rounded to the nearest one thousand Rand (R '000).
5. Comparative information
5.1 Prior period comparative information
Prior period comparative information has been presented in the current year's annual financial statements. Where necessary figures included in the prior period annual financial statements have been reclassified to ensure that the format in which the information is presented is consistent with the format of the current year's annual financial statements.
5.2 Current year comparison with budget
A comparison between the approved, final budget and actual amounts for each programme and economic classification is included in the appropriation statement.
6. Revenue
6.1 Appropriated funds
Appropriated funds comprises of departmental allocations as well as direct charges against the revenue fund (i.e. statutory appropriation).
Appropriated funds are recognised in the statement of financial performance on the date the appropriation becomes effective. Adjustments made in terms of the adjustments budget process are recognised in the statement of financial performance on the date the adjustments become effective.
The net amount of any appropriated funds due to / from the relevant revenue fund at the reporting date is recognised as a payable / receivable in the statement of financial position.
Accounting Policies
172
6. Revenue (continued)
6.2 Departmental revenue
Departmental revenue is recognised in the statement of financial performance when received and is subsequently paid into the relevant revenue fund, unless stated otherwise.
Any amount owing to the relevant revenue fund at the reporting date is recognised as a payable in the statement of financial position.
6.3 Accrued departmental revenue
Accruals in respect of departmental revenue (excluding tax revenue) are recorded in the notes to the annual financial statements when:
it is probable that the economic benefits or service potential associated with the transaction will flow to the department; and
the amount of revenue can be measured reliably.
Accrued tax revenue (and related interest and / penalties) is measured at amounts receivable from collecting agents.
7. Expenditure
7.1 Compensation of employees
7.1.1 Salaries and wages
Salaries and wages are recognised in the statement of financial performance on the date of payment.
7.1.2 Social contributions
Social contributions made by the department in respect of current employees are recognised in the statement of financial performance on the date of payment.
Social contributions made by the department in respect of ex-employees are classified as transfers to households in the statement of financial performance on the date of payment.
7.2 Other expenditure
Other expenditure (such as goods and services, transfers and subsidies and payments for capital assets) is recognised in the statement of financial performance on the date of payment. The expense is classified as a capital expense if the total consideration paid is more than the capitalisation threshold.
7.3 Accruals and payables not recognised
Accruals and payables not recognised are recorded in the notes to the annual financial statements at cost at the reporting date.
Accounting Policies
173
7. Expenditure(continued)
7.4 Leases
7.4.1 Operating leases
Operating lease payments made during the reporting date are recognised as current expenditure in the statement of financial performance on the date of payment.
The operating lease commitments are recorded in the notes to the annual financial statements.
7.4.2 Finance leases
Finance lease payments made during the reporting period are recognised as capital expenditure in the statement of financial performance on the date of payment.
The finance lease commitments are recorded in the notes to the annual financial statements and are not apportioned between the capital and interest portions.
Finance lease assets acquired at the end of the lease term are recorded and measured at the lower of:
cost, being the fair value of the asset; or
the sum of the minimum lease payments made, including any payments made to acquire ownership at the end of the lease term, excluding interest.
8. Aid assistance
8.1 Aid assistance received
Aid assistance received in cash is recognised in the statement of financial performance when received. In-kind aid assistance is recorded in the notes to the annual financial statements on the date of receipt and is measured at fair value.
Aid assistance not spent for the intended purpose and any unutilised funds from aid assistance that are required to be refunded to the donor are recognised as a payable in the statement of financial position.
8.2 Aid assistance paid
Aid assistance paid is recognised in the statement of financial performance on the date of payment. Aid assistance payments made prior to the receipt of funds are recognised as a receivable in the statement of financial position.
9. Cash and cash equivalents
Cash and cash equivalents are stated at cost in the statement of financial position.
Bank overdrafts are shown separately on the face of the statement of financial position as a current liability.
For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held, other short- term highly liquid investments and bank overdrafts.
10. Prepayments and advances
Prepayments and advances are recognised in the statement of financial position when the department receives or disburses the cash.
Prepayments and advances are initially and subsequently measured at cost.
11. Loans and receivables
Loans and receivables are recognised in the statement of financial position at cost plus accrued interest, where interest is charged, less amounts already settled or written-off. Write-offs are made according to the department’s write-off policy.
Accounting Policies
174
12. Investments
Investments are recognised in the statement of financial position at cost.
13. Financial assets
13.1 Financial assets (not covered elsewhere)
A financial asset is recognised initially at its cost, plus transaction costs that are directly attributable to the acquisition or issue of the financial asset.
At the reporting date, a department shall measure its financial assets at cost, less amounts already settled or written-off, except for recognised loans and receivables, which are measured at cost plus accrued interest, where interest is charged, less amounts already settled or written-off.
13.2 Impairment of financial assets
Where there is an indication of impairment of a financial asset, an estimation of the reduction in the recorded carrying value, to reflect the best estimate of the amount of the future economic benefits expected to be received from that asset, is recorded in the notes to the annual financial statements.
14. Payables
Payables recognised in the statement of financial position are recognised at cost.
15. Capital assets
15.1 Immovable capital assets
Immovable assets reflected in the asset register of the department are recorded in the notes to the annual financial statements at cost or fair value where the cost cannot be determined reliably. Immovable assets acquired in a non-exchange transaction are recorded at fair value at the date of acquisition. Immovable assets are subsequently carried in the asset register at cost and are not currently subject to depreciation or impairment.
Subsequent expenditure of a capital nature forms part of the cost of the existing asset when ready for use.
Additional information on immovable assets not reflected in the assets register is provided in the notes to annual financial statements.
15.2 Movable capital assets
Movable capital assets are initially recorded in the notes to the annual financial statements at cost. Movable capital assets acquired through a non-exchange transaction is measured at fair value as at the date of acquisition.
Where the cost of movable capital assets cannot be determined reliably, the movable capital assets are measured at fair value and where fair value cannot be determined; the movable assets are measured at R1.
All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R1
Movable capital assets are subsequently carried at cost and are not subject to depreciation or impairment.
Subsequent expenditure that is of a capital nature forms part of the cost of the existing asset when ready for use.
15.3 Intangible assets
Intangible assets are initially recorded in the notes to the annual financial statements at cost. Intangible assets acquired through a non-exchange transaction are measured at fair value as at the date of acquisition.
Internally generated intangible assets are recorded in the notes to the annual financial statements when the department commences the development phase of the project.
Accounting Policies
175
15. Capital assets(continued)
Where the cost of intangible assets cannot be determined reliably, the intangible capital assets are measured at fair value and where fair value cannot be determined; the intangible assets are measured at R1.
All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R1.
Intangible assets are subsequently carried at cost and are not subject to depreciation or impairment.
Subsequent expenditure of a capital nature forms part of the cost of the existing asset when ready for use.
15.4 Project costs: Work-in-progress
Expenditure of a capital nature is initially recognised in the statement of financial performance at cost when paid.
Amounts paid towards capital projects are separated from the amounts recognised and accumulated in work-in-progress until the underlying asset is ready for use. Once ready for use, the total accumulated payments are recorded in an asset register. Subsequent payments to complete the project are added to the capital asset in the asset register.
Where the department is not the custodian of the completed project asset, the asset is transferred to the custodian subsequent to completion.
16. Provisions and contingents
16.1 Provisions
Provisions are recorded in the notes to the annual financial statements when there is a present legal or constructive obligation to forfeit economic benefits as a result of events in the past and it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation and a reliable estimate of the obligation can be made. The provision is measured as the best estimate of the funds required to settle the present obligation at the reporting date.
16.2 Contingent liabilities
Contingent liabilities are recorded in the notes to the annual financial statements when there is a possible obligation that arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not within the control of the department or when there is a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the obligation cannot be measured reliably.
16.3 Contingent assets
Contingent assets are recorded in the notes to the annual financial statements when a possible asset arises from past events, and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the department.
16.4 Commitments
Commitments (other than for transfers and subsidies) are recorded at cost in the notes to the annual financial statements when there is a contractual arrangement or an approval by management in a manner that raises a valid expectation that the department will discharge its responsibilities thereby incurring future expenditure that will result in the outflow of cash.
17. Unauthorised expenditure
Unauthorised expenditure is recognised in the statement of financial position until such time as the expenditure is either: approved by the Provincial Legislature with funding and the related funds are received;or approved by the Provincial Legislature without funding and is written off against the appropriation in the statement of
financial position; or transferred to receivables for recovery.
Unauthorised expenditure is measured at the amount of the confirmed unauthorised expenditure.
Accounting Policies
176
18. Fruitless and wasteful expenditure
Fruitless and wasteful expenditure is recorded in the notes to the annual financial statements when confirmed. The amount recorded is equal to the total value of the fruitless and or wasteful expenditure incurred.
Fruitless and wasteful expenditure is removed from the notes to the annual financial statements when it is resolved or transferred to receivables for recovery.
Fruitless and wasteful expenditure receivables are measured at the amount that is expected to be recoverable and are de- recognised when settled or subsequently written-off as irrecoverable.
19. Irregular expenditure
Irregular expenditure is recorded in the notes to the annual financial statements when confirmed.
The amount recorded is equal to the value of the irregular expenditure incurred unless it is impracticable to determine, in which case reasons therefor are provided in the note.
Irregular expenditure is removed from the note when it is either condoned by the relevant authority, transferred to receivables for recovery or not condoned and is not recoverable.
Irregular expenditure receivables are measured at the amount that is expected to be recoverable and are de-recognised when settled or subsequently written-off as irrecoverable.
20. Changes in accounting policies, accounting estimates and errors
Changes in accounting policies that are affected by management have been applied retrospectively in accordance with MCS requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the change in policy. In such instances the department shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.
Changes in accounting estimates are applied prospectively in accordance with MCS requirements.
Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with MCS requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the error. In such cases the department shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.
21. Events after the reporting date
Events after the reporting date that are classified as adjusting events have been accounted for in the annual financial statements. The events after the reporting date that are classified as non-adjusting events after the reporting date have been disclosed in the notes to the annual financial statements.
22. Capitalisation reserve
The capitalisation reserve comprises of financial assets and/or liabilities originating in a prior reporting period, but which are recognised in the statement of financial position for the first time in the current reporting period. Amounts are recognised in the capitalisation reserves when identified in the current period and are transferred to the Provincial Revenue Fund when the underlying asset is disposed and the related funds are received.
23. Recoverable revenue
Amounts are recognised as recoverable revenue when a payment made in a previous financial year becomes recoverable from a debtor in the current financial year. Amounts are either transferred to the Provincial Revenue Fund when recovered or are transferred to the statement of financial performance when written-off.
24. Related party transactions
A related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party.
Accounting Policies
177
24. Related party transactions(continued)
Related party transactions within the MEC’s portfolio are recorded in the notes to the financial statements when the transaction is not at arm’s length.
Key management personnel are those persons having the authority and responsibility for planning, directing and controlling tthe activities of the department. The number of individuals and their full compensation is recorded in the notes to the financial statements.
25. Inventories
At the date of acquisition, inventories are recognised at cost in the statement of financial performance.
Where inventories are acquired as part of a non-exchange transaction, the inventories are measured at fair value as at the date of acquisition.
26. Public-Private Partnerships
Public Private Partnerships are accounted for based on the nature and or the substance of the partnership. The transaction is accounted for in accordance with the relevant accounting policies.
A summary of the significant terms of the PPP agreement, the parties to the agreement, and the date of commencement thereof together with the description and nature of the concession fees received, the unitary fees paid, rights and obligations of the department are recorded in the notes to the annual financial statements.
27. Employee benefits
The value of each major class of employee benefit obligation (accruals, payables not recognised and provisions) is disclosed in the Employee benefits note.
178
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
1. Annual appropriation
1.1 Annual appropriation
Included are funds appropriated in terms of the Appropriation Act (and the Adjustments Appropriation Act) for National Departments (Voted funds) and Provincial Departments:
Figures in Rand thousand 2018/2019 2017/2018
Final Appropriation
Actual Funds Received
Final Appropriation
Appropriation received
Programme 1: Administration 233,580 233,580 232,790 232,790 Programme 2: Economic Development and Tourism 606,612 606,612 587,047 587,047
Programme 3: Environmental Affairs 338,860 338,860 298,829 298,829
Total 1,179,052 1,179,052 1,118,666 1,118,666
1.2 Conditional grants**
Total grants received 36 2,204 2,554
**Conditional grants are included in the amounts per the Final Appropriation in Note 1.1
2. Departmental revenue
Tax revenue
207,331 200,872 Sales of goods and services other than capital assets 2.1 1,367 1,205 Fines, penalties and forfeits 2.2 90 465 Interest, dividends and rent on land 2.3 384 279 Sales of capital assets 2.4 - 178
Transactions in financial assets and liabilities 2.5 9,573 3,563
Total revenue collected 218,745 206,562
Less: Own revenue included in appropriation 16 218,333 206,562
Departmental revenue collected 412 -
2.1 Sales of goods and services other than capital assets
Other sales
1,367 1,205
Sales of goods and services produced by the department 1,367 1,205
Total 1,367 1,205
2.2 Fines, penalties and forfeits
Fines
90 465
2.3 Interest, dividends and rent on land
Interest
384 279
2.4 Sales of capital assets
Tangible assets
Machinery and equipment 31 - 178
179
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
2. (continued)
2.5 Transactions in financial assets and liabilities
Other receipts including recoverable revenue
9,573 3,563
3. Aid assistance
Opening balance Transferred from statement of financial performance
74
- -
74
Closing balance 74 74
3.1 Analysis of balance by source
Aid assistance from other sources
74 74
3.2 Analysis of balance
Aid assistance unutilised 3 74 74
3.3 Aid assistance expenditure per economic classification
Transfers and subsidies
- 8,841
4. Compensation of employees
4.1 Salaries and wages
Basic salary
182,976 170,062 Performance award 721 652 Service based 472 293 Compensative/circumstantial 2,329 2,694
Other non-pensionable allowances 35,635 33,569
Total 222,133 207,270
4.2 Social contributions
Employer contributions Pension
23,364
21,462 Medical 12,027 11,274
Bargaining council 47 44
Total 35,439 32,780
Total compensation of employees
257,573
240,050
Average number of employees
549
559
180
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
5. Goods and services
Administrative fees 257 357 Advertising 2,962 1,049 Minor assets 5.1 1,203 662 Bursaries (employees) 1,674 1,334 Catering 1,950 2,657 Communication 2,206 2,897 Computer services 5.2 6,676 16,312 Consultants: Business and advisory services 8,545 13,568 Legal services 5,111 3,335 Contractors 10,667 11,953 Audit cost - external 5.3 4,461 4,467 Fleet services 4,027 3,287 Inventory 5.4 729 1,069 Consumables 5.5 3,007 1,358 Operating leases 34,749 23,568 Property payments 5.6 9,998 9,931 Rental and hiring 186 409 Transport provided as part of the departmental activities 111 - Travel and subsistence 5.7 19,536 20,668 Venues and facilities 3,092 2,586 Training and development 1,910 2,168
Other operating expenditure 5.8 1,484 1,424
Total 124,541 125,059
Increase in advertising is caused by advertisement of new posts in the approved structure and tenders for preparation for the new financial year i.e. Consultants: Business and advisory services, appointment of the service providers for the projects that have been implemented only in phase1 and the funds were redirected to other cost pressures. Support to SMMEs in Energy Phase 5, Operation Phakisa: Gas, Oil and Bunkering, conduct Feasibility study and develop business plan development for 6 district fresh produce multi-user facilities, Operation Phakisa - Marine Manufacturing (Ship Repair and Boatbuilding), manufacturing Companies in Distress, Economic Impact analysis on the expansion for East London Port and development of Eastern Cape Business Incubator Implementation Framework. There has been an increase in Operating leases as the department acquired land line telephones management system (PABX), and additional Laptops for the field workers i(working tools) and additional servers for disaster management hub which was established at Amathole Regional office.
5.1 Minor assets
Tangible assets Machinery and equipment
1,203
662
Department purchased new furniture for regional offices after the disposal of old and obsolete furniture.
5.2 Computer services
SITA computer services 2,392 14,629
External computer service providers 4,284 1,683
Total 5 6,676 16,312
Decrease in spending compared to the previous year is as a result of late payment of Microsoft licences, the delay was caused by the difficulty to register a foreign bank account. SITA invoices in respect of for departmental systems (BAS, Persal Logis and Internet) inclusive of E-Permit for Programme 3: Environmental Affairs were not received for the department to process payments
5.3 Audit cost - external
Regularity audits 4,461 4,467
181
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
5. Goods and services(continued)
5.4 Inventory
Materials and supplies
729 1,069
5.5 Consumables
Uniform and clothing
255 - Household supplies 380 467 Communication accessories - 29 IT consumables 82 56
Other consumables 1,210 11
Consumable supplies 1,927 563
Stationery, printing and office supplies 1,080 795
Total 5 3,007 1,358
increase is as a result of uniform bought for all drivers, general assistants and security personnel of the department as compared to the previuos financial year as only a few were provided in 2017/18 financial year. Other consumable include media promotions that were done for the MEC..
5.6 Property payments
Municipal services
84
88
Other 9,914 9,843
Total 5 9,998 9,931
5.7 Travel and subsistence
Local
18,782 19,866
Foreign 754 802
Total 5 19,536 20,668
5.8 Other operating expenditure
Professional bodies, membership and subscription fees
274 185 Resettlement costs 858 667
Other 353 572
Total 5 1,484 1,424
6. Payments for financial assets
Material losses through criminal conduct Debts written off
-
208
7. Transfers and subsidies
Provinces and municipalities 37 13,450 13,038 Departmental agencies and accounts Annex 1B 728,667 636,482 Public corporations and private enterprises Annex 1D 19,870 16,801 Non-profit institutions Annex 1F 1,575 1,268
Households Annex 1G 1,689 1,109
Total 765,251 668,698
182
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
8. Expenditure for capital assets
Tangible assets Buildings and other fixed structures
33
1,326
30,974
Machinery and equipment 31 11,705 12,790
13,031 43,764
8.1 Analysis of funds utilised to acquire capital assets -2018/2019
Figures in Rand thousand Tangible assets Buildings and other fixed structures
Voted funds
1,326
Total
1,326
Machinery and equipment 11,705 11,705
Total 13,031 13,031
8.2 Analysis of funds utilised to acquire capital assets -2017/2018
Figures in Rand thousand Tangible assets Buildings and other fixed structures
Voted funds
30,973
Total
30,974
Machinery and equipment 12,791 12,790
Total 43,764 43,764
8.3 Finance lease expenditure included in expenditure for capital assets
Tangible assets Machinery and equipment
8,792
11,489
9. Unauthorised expenditure
9.1 Reconciliation of unauthorised expenditure
Opening balance
- 4,430
Less: Amounts approved by Legislature with funding - (4,430)
- -
10. Cash and cash equivalents
Consolidated paymaster general account
40,647 53,475
11. Prepayments and advances
Prepayments (Not expensed)
- 22
11.1 Prepayments (Expensed)
Figures in Rand thousand
Balance as at 01 April 2018
Less: Received in the current
year
Capital assets
22 (22)
183
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
12. Receivables
Figures in Rand thousand
Note
Current
2018/2019
Non-
Total
Current
2017/2018
Non-
Total
current current
Claims recoverable 12.1 5 610 615 - 610 610
Staff debt 12.2 1,115 6,192 7,307 4,494 2,918 7,412
Total 1,120 6,802 7,922 4,494 3,528 8,022
12.1 Claims recoverable
National departments
610 610
Provincial departments 5 -
Total 12 615 610
12.2 Staff debt
Staff debts
7,307
7,412
12.3 Impairment of receivables
Estimate of impairment of receivables
3,518 3,370
Impairment of receivables is based on all debts older than
3 years
13. Investments
Non-Current
Investment held in Public Entities
427,597
427,597
Department hold 100 % shareholding at ECDC, 100 % holding at CDC and 74% holding at ELIDZ
Analysis of non-current investments
Opening balance 427,597 427,597
184
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
14. Loans
Private enterprises 198 191
Analysis of balance
Opening balance 191 921 New issues 8 439 Repayments (1) (151)
Write offs - (1,018)
Closing balance 198 191
14.1 Impairment of loans
Estimate of impairment of loans 99 95
15. Voted funds to be surrendered to the Revenue Fund
Opening balance 40,887 96,466 Transferred from statement of financial performance 18,656 40,887
Paid during the year (40,887) (96,466)
Closing balance 18,656 40,887
16. Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund
Opening balance 15,531 15,256 Transferred from statement of financial performance 412 - Own revenue included in appropriation 2 218,333 206,562
Paid during the year (209,264) (206,287)
Closing balance 25,012 15,531
17. Payables -current
Clearing accounts 1,111 1,505
18. Payable -non-current
Figures in Rand thousand 2018/2019 2017/2018 Note Two to three Total Total
years Other payables 18.1 4,114 4,114
3,917
18.1 Other payables
Debts raised on a closed financial year 4,114
3,918
185
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
19. Net cash flow available from operating activities
Net surplus as per Statement of Financial Performance Add back non cash/cash movements not deemed operating activities decrease in receivables – current
19,068
100
40,961
626 (Increase)/decrease in prepayments and advances 22 (22)decrease in other current assets - 4,430 (decrease) in payables – current (394) (48)Proceeds from sale of capital assets - (178)Expenditure on capital assets 13,031 43,764 Surrenders to Revenue Fund (250,151) (302,753)
Own revenue included in appropriation 218,333 206,562
Net cash flow generated by operating activities 9 (6,658)
20. Reconciliation of cash and cash equivalents for cash flow purposes
Consolidated paymaster general account
40,647 53,475
21. Contingent liabilities and contingent assets
21.1 Contingent liabilities
Liable to Nature Claims against the department
Annex 3B
3,710
14,003
Intergovernmental payables (unconfirmed balances) Annex 5 471 1,236
Total 4,181 15,239
22. Commitments
Current expenditure Approved and contracted
40,885
25,370
Approved but not yet contracted 996 -
41,881 25,370
Capital expenditure Approved and contracted
78
271
78 271
41,959 25,641
Contracts within one year are R31,1 million and more than one year amounts to R10,8 miliion. The increase is as a result of new awarded contracts for securities at year end.
186
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
23. Accruals and payables not recognised
23.1 Accruals
Figures in Rand thousand Listed by economic classification
30 Days
2018/2019 30+Days
Total
2017/2018 Total
Goods and services 3,000 1,043 4,043 1,275
Listed by programme level Administration
3,083
897 Economic Development & Tourism 449 72
Environmental Affairs 511 306
Total 4,043 1,275
-
The increase is due to a delay in payments of operating leases and finance leases
23.2 Payables not recognised
Figures in Rand thousand Listed by economic classification
30 Days
2018/2019 30+Days
Total
2017/2018 Total
Goods and services 2,581 253 2,834 2,903
Listed by programme level Administration
1,179
2,284 Economic Development & Tourism 1,300 365
Environmental Affairs 355 254
Total 2,834 2,903
Included in the above totals are the following: Confirmed balances with other departments
Annex 5
53
84
24. Employee benefits
Leave entitlement
10,978 9,559 Service bonus 7,554 6,917 Performance awards 3,552 1,082 Capped leave commitments 19,765 19,464
Long Service Recognition 479 314
Total 42,328 37,336
Included in the leave entitlement and capped leave commitment balances are negative leave balances to the value of R315 995.11. These negative leave balances came about when leave was taken by employees, based on the PERSAL leave credit (opening yearly balance) allocated at the beginning of the leave cycle which is calculated based on a calendar year. However , this cycle is not inline with the accounting cycle which ends at the end of March each financial year. These leave credits are calculated per month depending on the number of months worked by each official .
187
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
25. Lease commitments
25.1 Operating leases
2018/2019
Figures in Rand thousand
Not later than 1 year
Machinery
and equipment
36,763
Total
36,763
Later than 1 year and not later than 5 years 23,346 23,346
Total lease commitments 60,109 60,109
2017/2018
Figures in Rand thousand
Not later than 1 year
Machinery
and equipment
33,102
Total
33,102
Later than 1 year and not later than 5 years 44,231 44,231
Total lease commitments 77,333 77,333
Decrease is mainly under leases over one year as result of
reduced lease terms
25.2 Finance leases **
2018/2019
Figures in Rand thousand
Not later than 1 year
Machinery
and equipment
5,964
Total
5,964
Later than 1 year and not later than 5 years 4,449 4,449
Total operating lease revenue receivable 10,413 10,413
2017/2018
Figures in Rand thousand
Not later than 1 year
Machinery
and equipment
7,210
Total
7,210
Later than 1 year and not later than 5 years 6,754 6,754
Total operating lease revenue receivable 13,964 13,964
26. Accrued departmental revenue
Tax revenue
17,282 17,344
188
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
26. Accrued departmental revenue(continued)
26.1 Analysis of accrued departmental revenue
Opening balance 17,344 15,271 Less: Amounts received (17,344) (15,271)
Add: Amounts recognised 17,282 17,344
Total 17,282 17,344
189
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
27. Irregular expenditure
27.1 Reconciliation of irregular expenditure
Opening balance
214,318 190,722 Add: Irregular expenditure - relating to current year 1,697 30,132
Less: Prior year amounts condoned (210,592) (6,536)
Closing balance 5,423 214,318
Analysis of awaiting condonation per age classification Current year
1,697
30,132
Prior year 3,726 184,186
Total 5,423 214,318
.Department has received condonation of irregular expenditure on the day of submission and the last condonation letter was received on the 3 June 2019
27.2 Details of irregular expenditure – added current year (relating to current and prior years)
Figures in Rand thousand 2018/2019 Incident Disciplinary steps taken/ Criminal proceedings Procurement procedure not followed by NMBM
Under investigation 1,206
Procurement procedure not followed Under investigation 435
Procurement processes not followed by the region
Under investigation 15
award made to a close family member of under investigation the department official
41
Total 1,697
27.3 Details of the non-compliance where an institution was not represented in a bid committee for contracts arranged by other institutions
Figures in Rand thousand Incident NMBM procurement for ISIDP with CDC
2018/2019
1,206
28. Fruitless and wasteful expenditure
28.1 Reconciliation of fruitless and wasteful expenditure
Opening balance 45 77 Fruitless and wasteful expenditure - relating to prior year 38 - Fruitless and wasteful expenditure - relating to current year 8 36
Less: Amounts resolved - (68)
Closing balance 91 45
28.2 Analysis of awaiting resolution per economic classification
Current 91 45
190
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
28. Fruitless and wasteful expenditure(continued)
28.3 Analysis of current year’s (relating to current and prior years) fruitless and wasteful expenditure
Incident Disciplinary steps taken/ Criminal proceedings 2018/2019 Interest, traffic fines, catering Under investigation 53
None utilisation of the Teammate system
under investigation 38
Total 91
29. Related party transactions
Payments made
Expenditure for capital assets
121 2,816
Other
List related party relationship Eastern Cape Development Corporation
- Public Entity in the same MEC portfolio
Eastern Cape Gambling and Betting Board - Public Entity in the same MEC portfolio Eastern Cape Liquor Board- Public Entity in the same MEC portfolio Eastern Cape Parks and Tourism Agency- Public Entity in the same MEC portfolio Coega Development Corporation Pty Ltd- Public Entity in the same MEC portfolio East London Industrial Development Zone- Public Entity in the same MEC portfolio Eastern Cape Provincial Treasury - in the same MEC Portfolio
30. Key management personnel
Officials:
No. of Individuals
Level 15 to 16 1 2,312 2,158 Level 14 (incl CFO if at a lower level) 5 6,472 6,696
Level 13 31 31,049 25,444
Total 39,833 34,298
Change in accounting policy has been affected retrospectively in accordance with MCS requirement for Level 13.Refer to note 34
191
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
31. Movable Tangible Capital Assets
Movement in movable tangible capital assets per asset register for the year ended 31 March 2019
Figures in Rand thousand
Machinery and equipment
Opening balance
Additions Disposals Closing Balance
Transport assets 705 1,148 - 1,853 Computer equipment 8,912 961 775 9,098 Furniture and office equipment 9,078 878 59 9,897
Other machinery and equipment 1,057 - - 1,057
Total movable tangible capital assets 19,752 2,987 834 21,905
31.1 Additions
Additions to movable tangible capital assets per asset register for the year ended 31 March2019
Figures in Rand thousand Cash* (Capital Work Received Total in Progress current, not
current costs paid
and finance (Paid current
lease year, received payments) prior year)
Machinery and equipment
Transport assets 7,185 (6,037) - 1,148 Computer equipment 961 - - 961 Furniture and office equipment 803 - 75 878
Other machinery and equipment 2,756 (2,756) - -
Total additions to movable tangible capital assets 11,705 (8,793) 75 2,987
31.2 Disposals
Disposals of movable tangible capital assets per asset register for the year ended 31 March2019
Figures in Rand thousand Sold for Non-cash Total cash disposal disposals Machinery and equipment
Computer equipment - 775 775
Furniture and office equipment - 59 59
Total disposals of movable tangible capital assets - 834 834
31.3 Movement for 2017/2018
Movement in movable tangible capital assets per asset register for the year ended 31 March2018
Figures in Rand thousand
Machinery and equipment
Opening balance
Additions Disposals Closing Balance
Transport assets 1,668 - (963) 705 Computer equipment 8,905 772 (765) 8,912 Furniture and office equipment 8,690 489 (101) 9,078
Other machinery and equipment 1,065 41 (49) 1,057
Total movable tangible capital assets 20,328 1,302 (1,878) 19,752
31.4 Minor assets
Movement in minor assets per the asset register for the year ended 31 March 2019
192
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
31. Movable Tangible Capital Assets(continued)
Figures in Rand thousand Intangible assets
Opening balance 2
Machinery and
equipment 7,682
Total
7,684 Value adjustments - (9) (9)Additions - 1,203 1,203
Disposals (2) (447) (449)
Total minor assets - 8,429 8,429
Figures in Rand thousand
Number of minor assets at cost
Machinery and
equipment 534
Value adjustment are assets received in the prior year and paid in the current year
Movement in minor assets per the asset register for the year ended 31 March 2018
Figures in Rand thousand Intangible assets
Opening balance 2
Machinery and
equipment 7,390
Total
7,392 Additions - 671 671
Disposals - (379) (379)
Total minor assets 2 7,682 7,684
Figures in Rand thousand
Number of minor assets at cost
Machinery and
equipment 343
Total
343
31.4.1 Prior period error
Figures in Rand thousand Nature of prior period error Relating to 2017/2018 Machinery and equipment
2017/2018
2
Opening balance excluded R2 000 which was mistaken as intangible assets. Refer to note 34.1
31.5 Movable assets written off
Movable assets written off for the year ended 31 March 2018
Figures in Rand thousand
Assets written off
Machinery and
equipment 88
Total
88
193
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
32. Intangible Capital Assets
Movement in Intangible Capital Assets per asset register for the year ended 31 March 2019
Figures in Rand thousand Opening balance
Disposals
Software 2,179 (2,179)
32.1 Disposals
Disposals of Intangible Capital Assets per asset register for the year ended 31 March 2019
Figures in Rand thousand Non-cash disposal
Total disposals
Software 2,179 2,179
32.1.1 Prior period error
33. Immovable Tangible Capital Assets
Movement in Immovable Tangible Capital Assets per asset register for the year ended 31 March 2019
Figures in Rand thousand Opening balance
Closing Balance
Buildings and other fixed structures Other fixed structures 48,650 48,650
Immovable Tangible Capital Assets under investigation
33.1 Additions
Additions to Immovable Tangible Capital Assets per asset register for the year ended 31 March 2019
Figures in Rand thousand Cash (Capital Work
in Progress current costs and finance
lease payments)
Buildings and other fixed structures Other fixed structures 1,326 (1,326)
194
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
33. Immovable Tangible Capital Assets (continued)
33.2 Movement for 2017/2018
Movement in Immovable Tangible Capital Assets per asset register for the year ended 31 March 2018
Figures in Rand thousand Opening balance
Additions Disposals Closing Balance
Buildings and other fixed structures Other fixed structures 83,303 3,768 (38,421) 48,650
195
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
33. Immovable Tangible Capital Assets (continued)
33.3 Capital work-in-progress
Capital work-in-progress as at 31 March 2019
Figures in Rand thousand Note Opening balance
01 April 2018
Current Year WIP
Closing balance
31 March 2019
Buildings and other fixed structures 73,164 1,326 74,490
Figures in Rand thousand Number of projects 2018/2019 Age analysis on ongoing projects Planned,
Construction started
Planned, Construction not started
Total
1 to 3 Year(s) 1 1 74,491
Capital work-in-progress as at 31 March 2018
Figures in Rand thousand Note Opening balance
01 April 2017
Prior period error
Current Year WIP
Ready for use
(Assets to the AR) /
Contracts terminated
Closing Balance
31 March 2018
Buildings and other fixed structures 45,959 (330) 28,487 (952) 73,164
Figures in Rand thousand Number of projects 2017/2018 Age analysis on ongoing projects Planned,
Construction not started
Planned, Construction not started
Total
1 to 3 Year(s) 1 1 73,164
33.4 S42 Immovable assets
Assets to be transferred in terms of S42 of the PFMA - 31 March 2019
There were no transfers in the current year.
Assets to be transferred in terms of S42 of the PFMA - 31 March 2018
Figures in Rand thousand Number of assets
Value of assets
Buildings and other fixed structures Other fixed structures 40 38,421
34. Changes in accounting policy
During the year the following changes were made to the accounting policy accounting for transactions, assets, liabilities, events and circumstances.
196
Notes to the Annual Financial Statements
Figures in Rand thousand Note 2018/2019 2017/2018
34. Changes in accounting policy (continued)
Figures in Rand thousand Value derived using
amended policy
R-value impact of change in
policy
Accounting policy change : Key Management Personel Key management personellevel13 25,444 25,444
Key management personnel now includes all directors that are responsible or make decisions for the Department. This change in accounting policy has been affected retrospectively in accordance with MCS requirement
35. Prior period errors
35.1 Correction of prior period errors
Figures in Rand thousand 2017/2018
Opening Balance - Minor Assets
Amount before error
correction
Prior period errors
Restated Amount
Machinery and equipment 7,390 2 7,392
Opening balance excluded R2000 which was mistaken as intangible assets. Refer to note 31.4
Notes to the Annual Financial Statements
197
Figures in Rand thousand
34. Statement of Conditional grants received
Figures in Rand thousand Grant allocation Spent 2017/2018
Name of municipality Division of
Revenue Act/
Provincial Grants
Total Available
Amount received
by department
Amount spent by depart- ment
Division of
Revenue Act
Amount received
by department
Intsika Yethu Municipality 2,204 2,204 2,204 2,204 2,554 2,554
Notes to the Annual Financial Statements
198
Figures in Rand thousand
35. Statement of Conditional grants and other transfers to municipalities
Figures in Rand thousand Grant allocation Transfer
Name of municipality DoRA and other
transfers
Total Available
Actual Transfer
Intsika Yethu Municipality 2,204 2,204 2,204 Great Kei Municipality 3,476 3,476 3,476 Emalahleni Municipality 3,000 3,000 3,000 Port St Johns Municipality 3,000 3,000 3,000 Raymond Mhlaba Municipality 270 270 270 Elundini Municipality 700 700 700 Umzimvubu Municipality 500 500 500
Ndlambe Municipality 300 300 300
Total 13,450 13,450 13,450
199
Annexures to the Annual Financial Statements
Figures in Rand thousand 2018/2019 2017/2018
Annexure 1A
Statement of conditional grants and other transfers paid to Municipalities
Figures in Rand thousand Grant allocation Transfer Spent 2017/2018
DoRA and Total Actual Amount Amount Unspent % of Division Actual
Name of Municipality
other transfers
Available Transfer received by
municipalit ies
spent by munici- pality
funds available funds
spent by munici- pality
of Revenue
Act
transfer
Intsika Yethu Local Municipality 2,204 2,204 2,204 2,204 1,551 653 70 % 2,400 2,400
200
Annexure 1B
Statement of transfers to Departmental Agencies and Accounts
Figures in Rand thousand Grant allocation Transfer 2017/2018
Departmental agency/Account
Adjusted Appropriation
Total Available
Actual Transfer
% of Available
funds Transferred
Final Appropriation
Eastern Cape Gambling Board 55,761 55,761 55,761 100 % 53,072 Eastern Cape Liqour Board 59,541 59,541 59,541 100 % 56,668 Eastern Cape Parks & Tourism Agency 233,579 233,579 233,579 100 % 195,953 Eastern Cape Development Corporation 236,344 236,344 236,344 100 % 184,022 Coega Development Corporation 31,270 31,270 31,270 100 % 40,000
East London Industrial Development Zone 112,172 112,172 112,172 100 % 106,767
Total 728,667 728,667 728,667 636,482
201
Annexure 1D
Statement of transfers/subsidies to Public Corporations and Private Enterprises
Figures in Rand thousand Transfer allocation Expenditure 2017/2018
Public Corporations/Private Enterprise
Adjusted Appro-
priation Act
Total Available
Actual Transfer
% of Available
funds Transferred
Final Appropriation
Private enterprises Subsidies
Local Regional Economic Development Projects 21,001 21,001 19,870 94.6 % 22,676
Chemini Incubation - - - - % 1,800
Subtotal for private enterprises 21,001 21,001 19,870 94.6 % 24,476
202
Annexure 1F
Statement of transfers to Non-Profit Institutions
Figures in Rand thousand Transfer Allocation Expenditure 2017/2018
Adjusted Total Actual % of Final Appro- Available Transfer Available Appropriation
priation Act funds
Non-profit Institutions Transferred
Transfers
Environmental Awards 1,583 1,583 1,575 99 % 1,433
203
Annexure 1G
Statement of transfers to Households
Figures in Rand thousand Transfer Allocation Expenditure 2017/2018
Households
Adjusted Appro-
priation Act
Total Available
Actual Transfer
% of Available
funds Transferred
Final Appropriation
Transfers Leave gratuity
1,679
1,679
1,679
100 %
1,070
Injury on duty 10 10 10 100 % 50
Total 1,689 1,689 1,689 1,120
204
Annexure 2A
Statement of investments in and amounts owing by/to national/provincial public entities
Name of Public Entity
State Entity’s PFMA
Schedule type (state year end if not 31 March)
% ofshares held Number of shares held Cost of investment Net Asset value of investment
Profit/(Loss) for the year
Figures in Rand thousand 2018/2019 2017/2018 2018/2019 2017/2018 2018/2019 2017/2018 2018/2019 2017/2018 2018/2019 2017/2018
National/Provincial Public Entity Eastern Cape Development Corporation
3D
100 %
100 %
41,259,000
41,259,000
427,590
427,590
1,410
1,257,072
30,553
(37,897)
East London Industrial Development Zone 3D 74 % 74 % 740,000 740,000 7 7 2,316,606 421,373 99,683 134,007
Coega Development Corporation N/A 100 % 100 % 6,738 6,738 - - 5,524,565 5,200,985 158,534 23,175
Total 42,005,738 42,005,738 427,597 427,597 7,842,581 6,879,430 288,770 119,285
205
Annexure 3B
Statement of contingent liabilities as at 31 March 2019
Nature of Liability Opening Balance
01 April2018
Figures in Rand thousand
Claims against the department
Liabilities incurred
during the year
Liabilities paid/cancelled
/reduced during the year
Closing Balance31 March 2019
Claims against the department 14,002 869 (11,161) 3,710
206
Annexure 4
Claims recoverable
Government Entity Unconfirmed balance outstanding
Total Cash in transit at year end 31 March
2019 *
Figures in Rand thousand 2018/2019 2017/2018 2018/2019 2017/2018 Receipt date up to six (6) working days after year end
Department International Relations
610
610
610
610
Western Cape Office of the Premier 3 - 3 -
Eastern Cape Department of Home Affairs 2 - 2 -
Total 615 610 615 610
207
Annexure 5
Inter-Government payables
Government Entity
Confirmed balance outstanding
Unconfirmed balance outstanding
Total Cash in transit at year end 31 March
2019 *
Figures in Rand thousand 2018/2019 2017/2018 2018/2019 2017/2018 2018/2019 2017/2018 Payment date up to six (6) working days after yearend
Departments Current Department of Justice and Constitutional Development - - 470 - 470 - South African Police Services - - 1 1 1 1 Eastern Cape Office of the Premier 33 - - - 33 - Eastern Cape Provincial Treasury 20 84 - - 20 84
Total 53 84 471 1 524 85
208
Annexure 6
Inventories
Figures in Rand thousand Quantity 2018/2019 Quantity 2017/2018
Inventories Add: Additions/Purchases - Cash
1,098
729
2,246
1,069
(Less): Issues (1,098) (729) (2,246) (1,069)
Closing balance - - - -
209
Annexure 7
Movement in capital-work-in progress for the year ended 31 March 2019
Figures in Rand thousand Opening balance
Prior period errors
Current year Capital WIP
Closing balance
Buildings and other fixed structures Other fixed structures 73,164 - 1,326 74,490
73,164 - 1,326 74,490
Figures in Rand thousand Number of projects 2018/2019 Age analysis on ongoing projects Planned,
Construction started
Planned, Construction not started
Total
1 to 3 Year(s) 1 1 74,490
Movement in capital work-in-progress for the year ended 31 March 2018
Figures in Rand thousand Opening balance
Buildings and other fixed structures
Prior period errors
Current year Capital WIP
Ready for use (Asset
register) / Contract
terminated
Closing balance
Dwellings 45,959 (330) 28,487 (952) 73,164
45,959 (330) 28,487 (952) 73,164
