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Presentation to the Portfolio Committee: Water & Environment. Finance. Presentation by Mr Onesmus Ayaya Chief Financial Officer 13 April 2010. 1. Outline. Key challenges Previous audit outcomes Expenditure trends MTEF allocation. 2. - PowerPoint PPT Presentation
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Presentation to the Portfolio Committee: Water & Environment
Presentation by
Mr Onesmus AyayaChief Financial Officer
13 April 2010
Finance
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Outline
• Key challenges• Previous audit outcomes• Expenditure trends• MTEF allocation
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• To ensure sound financial management practices based on the implementation of accountability and governance framework underpinning the Public Finance Management Act, (Act No. 1 of 1999) for both Main Account and Water TradingEntity
This purpose contribute to Strategic Priority No. 6 of the strategic plan in terms of revenue management and implementation of financial improvement plan to address previous audit queries
PURPOSE OF THE FINANCE BRANCH
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KEY FOCAL AREAS IN THE BRANCH
• Supply Chain and Asset Management
• Revenue and debtors management
• Financial Accounting and Reporting
• Management Accounting
• Budget and Planning (including expenditure management)
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CHALLENGES FACING FINANCE
• To sustain unqualified audit • Non-integrated financial systems for Main Account• Sluggish transformation in terms of organisational
systems and processes required to support use of financial recourses to the Department
• Relationship between regions and head office
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CHALLENGES FACING FINANCE (CONT)
• Systems that requires proper implementation and post implementation refinements– long term, user requirements (SAP, LOGIS etc)
• Inadequate capacity (lack of skilled resources)• Extensive infrastructure assets – magnitude,
spatial distribution/location: Auditable assets plans needed
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Solutions to Challenges• Employment of budget controllers to monitor monthly
spending by program managers• Keeping vacant posts to no more that 5% of the
establishment• Implementation of integrated management system with
the help of national treasury• Formulation and implementation of clear assets
management plans• Solution is linking all procurement to business plan
during approvals
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EXPENDITURE OUTCOME FOR THE PERIOD ENDED 30 MARCH 2010
Programme Adjusted budget
2009/10
Actual
2009/10
R’ 000
% spent Available budget
Administration 799 046 776 415 97% 22 631
Water resource management
4 124 998 4 031 775 98% 93 223
Water services 2 849 958 2 648 532 93% 201 426
Total 7 774 002 7 456 722 96% 317 280
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Economic classification
Programme Adjusted Budget
2009/10
2009/10 Actual
% spent
Available Budget
Compensation of Employees
1 024 055 896 203 88% 127 852
Goods and Services 2 211 129 2 047 285 93% 163 844
Interest and Rent on land - 66 - (66)
Theft and Losses - 3 890 - (3 890)
Transfers and Subsidies 4 456 341 4 464 639 100 8 298
Payments for Capital Assets 82 477 44 639 54% 37 838
Total 7 774 002 7 456 722 96% 317 280
EXPENDITURE OUTCOME FOR THE PERIOD ENDED 30 MARCH 2010
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Reason for under spending• Unfilled vacant posts throughout the department
contributed to under – expenditure, it is anticipated approximately R110 million will not be spend in this current financial year
• Late submission of invoices in respect of services already rendered such as Fleet management Services (Phakisa) and IT Services (Arivia.)
• Accelerated community infrastructure programme, which requires counter party funding by municipalities
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KEY PROGRAMMES for 2010/2011
Post government reconfiguration: reorganised
Programme structure is as follows:
1. Administration
2. Water management
3. National water resources infrastructure
4. Regional management
5. Water sector regulation
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Programme 2010/2011
R’ 000
2011/2012
R’ 000
2012/2013
R’ 000
Administration 884 205 902 119 947 829
Water management
364 749 386 574 405 853
National water resources infrastructure
2 241 418 2 520 177 2 739 959
Regional management
4 329 013 5 077 318 5 320 451
Water sector regulation
177 207 204 019 214 140
Total allocation 7 996 592 9 090 207 9 628 232
MAIN ACCOUNT ALLOCATION (INCLUDING EARMARKED FUNDING)
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EARMARKED FUNDINGDescription of Earmarked Projects 2010/11
R’000
Learning Academy 20 000
Property Management - Rental of Buildings 156 000
Additional Capacity – Human Resources 7 000
Working for Water 668 583
Working on Fire 207 923
Replacement of donor funding 200 000
Bulk infrastructure 893 000
Water Services Operating Subsidy 807 682
Construction of Water Services Scheme 191 942
Compliance Monitoring & Enforcement 5 000
Total 5 446 905
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UN-EARMARKED FUNDING
Economic classification 2010/11
(R ’000)
Compensation of Employees 917 528
Goods and Services 1 246 288
Transfers of subsidies 287 008
Payment for Capital 98 863
Total 2 549 687
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DONOR FUNDING
Description of items 2010/2011
R’ 000
2011/2012
R’ 000
2012/2013
R’ 000
Water and sanitation services
350 334 - -
Water and sanitation programme
52 460 52 460 -
Upgrading of hydrometric equipment in Lesotho
- - -
Community water supply and sanitation
7 - -
Twinning arrangements with Dutch water boards
- - -
Total 402 794 52 460 -
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COMBINED BUDGET (EXCHEQUER & DONOR FUNDING)Description of items 2010/11
(R’000) 2011/12 (R’000)
2012/13 (R’000)
Exchequer funds 7,996,592 9,090,207 9,628,232 Donor Funds 402 794
52,460 0
Expenditure Recurrent expenditure 4,035,557 4,205,085 4,385,641 Goods and Services - Exchequer Funds
2,466,220 2,955,915 3,173,212
Goods and Services - Donor Funds
402 794
52,460 0
Compensation of employees 1,166,543 1,196,710 1,212,429 Transfers and subsidies 3,238,487 3,076,768 3,455,007 Provinces and municipalities 890,746 380,723 399,760 Departmental agencies and entities
2,102,743 2,400,653 2,623,459
Households 64,426 114,787 251,152 Foreign governments and organisations
180,106 180,111 180,117
Universities and non-profit organization
466 494 519
Payments for capital assets 1,125,342 1,860,814 1,787,584 Buildings and other fixed assets 1,038,326 1,769,218 1,691,779 Biological Assets 341 360 378 Machinery and equipment 74,196 77,931 81,560 Software and intangibles 12,479 13,305 13,867 TOTAL 8,399,386 9,142,667 9,628,232
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REQUEST FOR ADDITIONAL FUNDING – 2010/11Description of Budget Bids Amount
RequestedR’000
Amount Approved
R’000
DifferenceR’000
Water Conservation and Demand Management 60 000 0 (60 000 )
Rainwater Harvesting Programme 51 700 0 (51 700)
Natural Resource Management (WfW) 200 000 102 573 (97 427)
Funding for Deputy Minister 8 733 3 200 (5 533)
Olifants River Water Resource Development Project 306 000 0 (306 000)
Refurbishment of Infrastructure 1 000 000 0 (1 000 000)
Regional Bulk Infrastructure 1 354 000 54 000 (1 300 000)
Upgrading and expansion of the National Water Resource Monitoring Networks
17 000 0 (17 000)
Emergency Project to address the water crisis at Giyani
98 000 0 (98 000)
Mzimvubu River Catchment 6 000 0 (6 000)
Compensation of Employees adjustment 65 559
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Thank you
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