VOTE 30 ENVIRONMENTAL AFFAIRS Select Committee Briefing Annual

VOTE 30: ENVIRONMENTAL AFFAIRS Select Committee Briefing Annual Financial Statements for the year ended 31 March 2014 Ms Nosipho Ngcaba Director General Department of Environmental Affairs 1

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

Expenditure for the 2013/14 Financial Year per Programme Final appropriation Actual Expenditure R’ 000 Expenditure as % of final appropriation Variance R’ 000 1. Administration 767 018 765 026 99. 7% 1 992 2. Legal, Authorisations and Compliance 104 258 102 934 98. 7% 1 324 3. Oceans and Coasts 326 814 326 088 99. 8% 726 4. Climate Change and Air Quality 229 760 100. 0% - 5. Biodiversity and Conservation 565 662 100. 0% - 3 138 885 100. 0% - 74 445 73 113 98. 2% 1 332 5 206 842 5 200 307 99. 9% 6 535 6. Environmental Programmes 7. Chemicals and Waste Management Total 3

Expenditure per Economical Classification Economical classification Current Payments Final appropriation R’ 000 Actual Expenditure R’ 000 Balance Surrendered R’ 000 Note 1 537 320 1 532 226 5 094 662 324 874 996 659 222 873 004 3 102 1 992 Transfers and Subsidies 3 447 747 3 446 306 1 441 Provinces and Municipalities Departmental agencies and accounts Foreign Governments Non-Profit Organisations Public Corporations: DBSA: Green Fund Expanded Public Works Projects Other transfers 14 1 133 710 12 890 1 517 250 000 2 046 554 3 062 14 1 133 430 12 890 1 517 250 000 2 045 393 3 062 280 1 161 - Payment for capital assets* 221 619 - PPP payment for the new building PPP IT infrastructure new building Machinery, computers, office, laboratories equipment, & financial assets 146 000 27 582 48 037 - 156 - 5 206 842 5 200 307 6 535 - Compensation of employees - Goods and services o/w payments for financial assets Total Funds surrendered to National Treasury -Note 1: vacant posts not filled during the review of the establishment -Note 2: Savings from goods & services -Note 3: Saving on National Regulator for Compulsory Standards transfer -Note 4: Saving on Expanded Public Works Projects 1 2 3 4 5

Detail Current Expenditure * Goods and services 2013/14 R’ 000 2012/13 R’ 000 Consultants , contractors and agency/ outsourced services - Project Management cost, Smit Amandla operating and maintenance cost and professional fees. (Annexure A) Travel and subsistence. (Annexure B) Venues and facilities Other operating expenditure (refer to next slide)* Operating leases – Accommodation charges and operating lease payments. Inventory – herbicides, research supplies, oil & gas, food supplies Computer services - External computer services, software license and operational systems. Advertising – Media coverage services, recruitment, tenders Owned and leasehold property - Renovations for the previous financial year (Fedsure forum. Pretoria and Waterfront building) Communications – (Radio, TV transmission, National People's and Parks conference) Training and staff development (courses & workshops) Audit cost – External and Forensic investigations Catering Assets less than R 5 000 Bursaries employees Rental and hiring Administrative fees (Registration, bank charges, management and handling fees) Entertainment - Meetings with external and internal stakeholders. Transport provided as part of the departmental activities. Fleet services 357 882 340 382 141 279 38 969 58 201 66 678 62 796 52 693 27 264 15 991 142 283 30 219 57 484 67 488 59 893 36 068 26 820 21 745 17 385 12 483 8 077 4 022 2 518 1 740 3 058 1 608 311 34 15 16 590 7 368 5 718 4 071 3 989 1 680 1 675 1 139 232 62 10 Total 873 004 824 916

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

Detail Other Operating Expenditure * Notes Other operating expenditure * Expenditure 2013/14 R’ 000 2012/13 R’ 000 Air charter services & landing rights Professional bodies, membership and subscription fees* Printing & publications services Resettlement costs Harbour, dock fees Courier & Delivery services Other operating expenditure Freight services transport goods 28 356 18 448 5 602 3 033 649 1 087 916 110 30 866 14 598 5 513 1 690 1 434 1 206 1 200 977 Total 58 201 57 484 * Refer following slides 7

Payment for Professional bodies, membership and subscription fees* (R 18 448) • • • Benguela Current Commission (BCC) Intergovernmental Science –Policy Platform on Biodiversity & Ecosystem Services (IPBES) Commission for the Conservation of Antarctic Marine Living Resources(CCAMLR) African Institute for Environmentally Sound Management of Hazardous & other waste (AIESMH &W) United Nations Environment Programme (UNEP) Environmental Assessment Practitioners (EAP’s) Interim Certification Board (ICB) Environmental Systems Research Institute South Africa (ESRI) Enterprise Licence Agreement 8

Allocation to Public Entities and Own Revenue for the year ended 31 st March 2014 Revenue SANParks R’ 000 SANBI R’ 000 SAWS R’ 000 ISWP R’ 000 TOTAL Total Allocation 544 264 254 182 943 125 580 1 117 041 DEA Operational Infrastructure Grant 237 421 306 843 208 684 55 570 162 943 20 000 28 790 96 790 637 838 479 203 Transfers from other departments/institutions, EPWP) 399 377 251 817 5 067 10 205 666 466 Total Transferred 943 641 516 071 188 010 135 785 1 783 507 Revenue 1 280 376 60 443 109 233 14 646 1 464 698 Revenue from operating activities/Admission fees/Aviation income/Park revenue Other income Sales Investment income Donations Fair value gain Non-regulated commercial income Penalties 1 200 012 36 735 81 952 11 902 1 330 601 20 169 33 529 21 275 5 391 - 14 304 1 871 6 522 171 840 - 898 4 616 5 520 16 247 - 2 039 675 10 20 37 410 35 400 33 088 11 092 840 16 247 20 Sub-total 2 224 017 576 514 297 243 150 431 3 248 205 - (45 454) 38 654 (64 229) (71 028) 2 224 017 531 060 335 898 86 202 3 177 Deferred grant /transfers Total revenue

Public Entities Revenue and Expenditure for the year ended 31 st March 2014 Expenditure SANParks R’ 000 SANBI R’ 000 SAWS R’ 000 i. Simangaliso R’ 000 (2 224 017) (531 060) (335 898) (86 202) Total expenditure per annual financial statements 2 183 266 491 240 295 734 107 015 Surplus/(Deficit) per annual financial statements 40 751 39 820 40 164 (20 813) Total revenue per annual financial statements NB: SANParks has recorded a surplus of R 40, 7 million as opposed to a deficit of R 173 859 million due to the application of GRAP 23 whereby all revenue received for infrastructure projects were recognised for the year under review.

Public Entities Revenue and Expenditure for the year ended 31 st March 2014 2, 500, 000 Revenue VS Expenditure 2, 000 1, 500, 000 R'000 1, 000 500, 000 Revenue (500, 000) Expenditure Surplus/(Deficit) SANPARKS 2, 224, 017 2, 183, 266 40, 751 SANBI 531, 060 491, 240 39, 820 SAWS 335, 898 295, 734 40, 164 Isimangaliso 86, 202 107, 015 (20, 813)

Public Entities Surplus/ (Deficit) for the year ended 31 st March 2014 SANParks R’ 000 Surplus/(Deficit) Reason SANBI R’ 000 SAWS R’ 000 i. Simangaliso R’ 000 40 751 39 820 40 164 (20 813)* • R 215 947 million infrastructure grant revenue recognised as satisfied obligations during the year under review as well as the security services. • The subsidising of employees' postretirement health care benefit resulted in an actuarial loss of R 157 500 million. • Outstanding forestry grant claim from DAFF (R 19, 4 m) • A decrease in the Defined benefit liability (R 22, 6 m) • Capitalisation of Noncurrent assets (R 24, 2 m) • Gains from fair value adjustmentinvestment property (R 38, 7) This property relates to the portion of the Waterkloof land earmarked for subleasing. The value of the land has increased from R 44, 5 m to R 83, 2 m. • • This is a non-cash loss and is largely a function of reduced recoveries from projects and an increase in operating costs such as security related to boundary integrity (R 21, 3 m) Write-off balance of the amount due to the entity by Sanyati (R 6, 1 m)

Auditor-General’s Opinion on Public Entities Entity Unqualified Emphasis of matter Reason/Comments Action SANParks Unqualified None SANBI Unqualified Material under spending of the budget Material underspent on capital expenditure by R 15, 400 million The variance resulted from the timing differences between the transfer of funds from National Treasury and the actual spending. The Capital expenditure project are closely monitored to ensure that they are concluded on time. SAWS Unqualified None i. Simangaliso Unqualified None

Allocations & Transfers to Other Agencies DBSA Green Fund Nat. Assoc. for Clean Air (NACA) R’ 000 Global Environm ental Fund (GEF) Buyisae. Bag Compensation Fund Donatio ns and Liences Social Benefits/ Leave gratitude TOTAL R’ 000 National Regulator of Compulsor y Specificati ons. R’ 000 R’ 000 Allocated Budget Transferred Balance 250 000 1 400 10 500 12 890 117 6 169 71 2 994 284 141 (250 000) (1 400) (10 220) (12 890) (117) (6 169) (71) (2 994) (283 861) - - 280 14

Allocations & Transfers Expanded Public Works Projects Working for Water Working for Fire Environmental Projects TOTAL R’ 000 Allocated Budget 815 685 468 139 762 730 2 046 554 Projects Incentives 698 852 116 833 415 296 52 843 630 512 132 218 1 744 660 301 894 Transferred (814 231) (468 418) (762 744) (2 045 393) Projects Incentives (697 398) (116 833) (415 575) (52 843) (630 528) (132 216) (1 743 501) (301 892) 1 454 (279) (14) 1 161* Balance *Unearned Incentives to paid back to National Treasury 15

Expanded Public Works per Projects* Expenditure 2013/14 R’ 000 Working for water 2012/13 R’ 000 814 230 662 519 - 493 290 Working for Fire 468 418 362 620 People and parks 141 336 215 748 Working for waste 165 051 188 069 Working for coast 149 662 114 448 - 85 359 Working for land operations 91 757 41 384 Beneficiary training 24 013 36 464 118 192 - Wildlife economy 35 917 - Youth environmental service 36 817 Sustainable land base livelihoods Working forest operations Greening & open space management Total 2 045 393* 2 199 901 16

Foreign Aid Assistance Donor Country Purpose Budget Allocated R’ 000 Expenditure Balance R’ 000 United Nations on Environmental Programmes (UNEP) Convention on Climate Change & Reducing Mercury emission 964 1 669 (705) United States Agency for International Development (USAID) Compilation of ARID Transfrontier Projects 216 - Denmark Waste Management Strategy 0 1 000 (1 000) Germany Climate Change Programme & Supporting the development and implementation of access and benefit sharing policies in Africa – South Africa 1 099 824 275 Australia Funding agreement in relation to South Africa land sector measurement 1 240 2 006 (766) 3 519 5 715 (2 196) TOTAL 17

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Departmental Expenditure Trend Year Budget R’ 000 Actual R’ 000 % Expenditure 2004/2005 1 652 268 1 633 882 98. 9% 2005/2006 1 753 307 1 746 154 99. 6% 2006/2007 2 061 804 2 059 664 99. 9% 2007/2008 2 790 521 2 788 757 99. 9% 2008/2009 3 206 557 3 198 878 99. 8% 2009/2010 3 510 641 3 503 338 99. 8% 2010/2011 2 488 514 2 390 023 96. 0% 2011/2012 4 201 616 4 108 549 97. 8% 2012/2013 5 175 321 4 942 661 95. 5% 2013/2014 5 206 842 5 200 307 99. 9% 19

Auditor-General Report on the Financial Statements • Unqualified Audit (Clean audit) • Unauthorized and irregular expenditure: – No irregular expenditure occurred or brought forward to the reporting year. • Fruitless and wasteful expenditure – Possible fruitless expenditure from previous years project spending to the amount of R 25, 865 million has been disclosed. • Disclosure items in the financial statements The department complied with all disclosure requirements, classifications and policy frameworks as prescribed by Treasury. However, National Treasury has exempted the department from applying Modified Cash Standards in respect of Infrastructure development projects. • Transfers to agencies and other organisations All transfers made are per prior management and Treasury approval as well as within disclosure requirements. 20

THANK YOU 21