4 th Quarter Finance Report 2014 2015 Financial

4 th Quarter Finance Report 2014 -2015 Financial year 1 Finance report – Q 4 of 2014/15 year

Contents 1. Introduction 2. Budget overview 3. Financial performance 4. Financial position 5. Cashflow 6. Other financial management matters 2 Finance report – Q 4 2014/15 year

Introduction This presentation seeks to summarize financial management activities undertaken by the Commission during the financial year to 31 March 2014, particularly focussing on the fourth quarter of the financial period. The events and matters reported are in the main for accountability to Parliament on performance for the period against the Annual Performance Plan, Funds appropriated for the period and other obligations advanced by the Committee from time to time. Additional information is provided in this presentation in report – Q 4 2014/15 year 3 the Finance interest of openness, transparency and

Budget overview per program & economic classification Compensation Depreciation Goods & of Employees & Services Amortisation COMMISSIONERS: GOVERNANCE & SUPPORT CORPORATE SUPPORT SERVICES 8 947 261 SERVICE DELIVERY PROGRAM 28 761 613 Grand Total Relative % 4 541 343 9 863 050 47 571 924 1 807 260 8 069 212 Grand Total 9 488 604 19 739 522 11 920 445 40 682 058 69 910 1 807 260 20 531 000 184 68% Finance report – Q 4 2014/15 year 3% 29% 100% Relative % Program/economic class • Funds available for the financial year were as follows; • Allocation from NT R 67, 2 m 14% • Internal sources (Interest ) R 2, 7 m • Total adjusted budget= R 69, 9 28% million 58% • 58% set aside for the main service delivery program • COE key driver of expenditure (68%). CGE is a service organisation

Itemised budget over MTEF period Cls Bank Charges CAPEX Compensation of Employees Computer Servicing, Internet & Website Courier Services Employee Assistance Program Media Outreach Office Cleaning, Maintenance, Plants & Security Office Consumables Printing & Stationery Professional Services Report writing & Printing Materials Telecommunication Expenses Travel, Accomodation and Related Expenditure Venues, Catering & Event Management Training and development Grand Total 55 2013/14 2014/15 2015/16 2016/17 2017/18 51 600 54 690 57 971 61 449 64 706 44 479 979 47 717 258 50 581 597 53 110 677 55 766 211 639 900 671 908 703 726 745 945 785 448 127 800 135 452 143 579 152 194 160 258 300 000 317 962 337 040 357 262 376 197 888 000 941 168 997 638 1 057 497 1 110 372 1 615 821 1 712 567 1 815 321 1 924 240 2 024 510 35 700 37 838 40 108 42 514 44 767 904 800 958 974 1 016 513 1 077 503 1 134 604 3 144 200 3 332 457 3 532 404 3 744 348 3 940 294 1 310 000 1 388 435 1 471 741 1 560 046 1 638 060 2 142 000 2 270 251 2 406 466 2 550 854 2 683 427 4 796 000 4 893 522 4 712 226 4 994 960 5 258 693 1 994 200 2 113 601 2 240 417 2 374 842 2 495 653 650 000 688 918 730 253 774 069 812 772 63 080 000 67 235 000 70 787 000 74 528 400 78 295 972 Finance report – Q 3 2014/15 year 2014/2015 figures Commissioners’ R 9. 5 m Corporate Services R 19. 7 m Main/Core Service Delivery R 40. 7 m

Financial performance 6 Finance report – Q 4 2014/15 year

How much income was available for the year? Total transfers as appropriated for 2014/15 period were R 67, 2 m Adjusted by R 2, 7 m interest income from surplus funds from previous periods Total adjusted Budget to execute the 2014/15 APP amounted to R 70 million Further injections/income of R 7 million from extra ordinary transactions were recorded. Hence Total income & revenue for the year million 7 Finance report – Q 4 2014/15 year was R 74, 7

Notes on Revenue and Income Revenue/income source Actuals 2015 Actuals 2014 Government Grant Conditional grants Donor income Interest Income Sundry Income 67 235 000 63 080 000 4 778 925 1 801 410 764 854 766 887 86 716 109 768 Totals 74 666 905 63 956 654 % change 7% 100% 0% -21% 17% ØTotal revenue and income increase by 17% from 2014 year Ø Conditional grant was for vehicles purchase(R 4, 3 m), portion of ICT project (R 500, 000) Ø Total income extra Treasury allocation is R 7, 4 million 8 Finance report – Q 4 2014/15 year

Extra-ordinary transactions Source/description Amount Accounting treatment and impact to surplus and/or deficit Gender summit – donations in cash and kind from partners Increase in income and corresponding R 1, 194919 Human Rights months advertorials by SABC increase in expenditure Increase in income and corresponding increase in expenditure R 599, 370 Conditional Grant – Vehicles R 4, 275, 099 Increase in income for the year. This dilutes the picture, otherwise a deficit would have been reported had IAS 20 be followed instead of GRAP 23 Conditional Grant – ICT professional R 503, 826 increase in expenditure services 9 Increase in income and corresponding SARS – payment of penalties & interest R 1, 826, 713 Total net effect R 4, 746, 501 Finance report – Q 4 2014/15 year Increase in expenditure

Expenditure for the year – Budget comparatives Summary results by economic classification q As appropriated, COE was within budget q. Saving from depreciation mainly due to asset recapitalization project that was implemented later than anticipated – mainly ICT infrastructure q Goods & Services the main contributor for spending by R 5, 5 million 10 Finance report – Q 4 2014/15 year

Summary results by programme & EC 11 Finance report – Q 4 2014/15 year

Budget comparatives Row Labels Bad debts Bank Charges CAPEX Compensation of Employees Computer Servicing, Internet & Website Courier Services Depreciation & Amortisation Employee Assistance Program Media Outreach Office Cleaning, Maintenance, Plants & Security Office Consumables Others Printing & Stationery Professional Services Report writing, Printing & Publishing Subscriptions Telecommunication Expenses Training and Development Travel, Accomodation and Related Expenditure Vehicle expenses, maint, fuel and other Venues, Catering & Event Management Interest paid Grand Total 12 Finance report – Q 4 2014/15 year 4 th Quarter 4 th Quater Quarter Actuals budget as Budget revised variance 2 800 13 204 11 000 061 77 776 77 417 208 454 488 158 44 974 450 932 1 485 201 1 854 099 (165 475) 688 299 83 429 2 467 182 368 699 109 863 1 330 19 256 402 14 333 10 820 034 296 953 21 583 576 116 428 361 45 763 337 398 863 987 1 310 646 23 658 592 418 507 841 928 489 250 653 311 650 0 17 329 884 (2 800) 1 129 (180 028) 219 177 (55 834) 367 662 (59 797) 789 (113 534) (621 214) (543 452) 189 133 (95 881) 424 412 (1 538 693) (118 046) 201 787 (1 329) (1 926 518) Actuals Adjusted YTD Budget % var Year to date Annual budget variance 2 800 54 216 46 553 452 624 937 240 638 887 848 1 544 978 172 850 835 600 5 125 250 2 760 277 70 536 2 503 918 613 107 7 366 880 1 180 566 2 693 995 1 828 051 75 059 898 57 334 46 371 769 850 363 154 332 1 290 462 1 515 789 183 050 489 594 4 327 635 2 440 749 280 978 2 369 671 1 231 365 4 951 942 1 002 614 2 428 584 9 69 946 239 (2 800) 3 117 (181 682) 225 426 (86 307) 402 614 (29 189) 10 200 (346 006) (797 615) (319 528) 210 442 (134 247) 618 258 (2 414 938) (177 952) (265 411) (1 828 042) (5 113 659) 5% (0%) 27% (56%) 31% (2%) 6% (71%) (18%) (13%) 75% (6%) 50% (49%) (18%) (11%) (100%) (7%)

Q 4 comparatives 13 Finance report – Q 3 2014/15 year

Summary 12 months' results notes For the 2014/2015 financial year, the Commission spent R 75 million against an approved budget of R 70 million. The overspending was R 5, 1 million as a result and is mainly explained by the following; Extra-budgetary spending for the Gender Summit and the Human Rights month which were funded through donations to the combined amount of R 1, 8 million. Penalties and Interest paid to the South African Revenue Services to an amount of R 1, 8 million The remaining spending gap is attributable to the variances that arose from the general operating activities, where travel and accommodation was the main driver at variance of R 2, 4 for the year. 14 Finance report – Q 3 2014/15 year

Overview – financial performance – Net results Total Income for the year to December 2014 : R 52, 3 million Transfer were R 50, 4 million, year to December 2014 and R 16, 8 million for quarters 3 – therefore year to date share of 75% was duly transferred Interest income of R 198, 531 earned in the 3 rd quarter (YTD ; R 610, 630). whilst R 21, 061 was received from other sundry sources(SETA, etc) Cumulative donor income arose from Gender summit activities during the first quarter – R 1, 2 m in Q 1 and none in recorded in Q 3 Total cumulative spending was R 55, 8 m (or 80% of the annual budget) was incurred as at 31 December 2014, signalling around 5% overall spending pressure (over R 3 m). 15 Finance report – Q 4 2014/15 year

Extra- ordinary transactions, contingencies, Litigation and other significant developments Donor Income at R 1, 2 million emanating from 16 contributions by partners to the Gender Summit that was held in April of 2014. Grant income conditionally received from National Treasury for the purchase of vehicles at R 4, 3 million. Spent (Conditions met ) Penalties and interest charged by the South African revenue Services for a combined figure of R 1, 8 million. Consequence management being implemented against liable officials Litigations – (CGE v Gasa and Axolute v CGE). For the latter matter, an application made to court for the dismissal of claim by plaintiff following expiry of notice (not acted upon by plaintiff). No fraud or related incidents whatsoever were reported in the period, either through fraud line or internal whistle blowing during the period and the year long Finance report – Qprocedures 4 2014/15 year

Financial Position 17 Finance report – Q 4 2014/15 year

Overview financial position The health of the CGE finances is sound. The going concern assumption is still valid but for funding threads going forward Solvency sound – Net asset position solid Liquidity – at parity but anticipated to be on a down-ward trend unless costs are contained and/or additional funding is secured Fixed assets increasing by R 4, 3 m due to acquisition of 18 vehicles in the main – this exchanges cash for non-current assets thus diminishing liquidity. Cash at hand reducing dramatically Receivables insignificant but linked to matters under litigation (Gasa – R 271 k) and SAPS investigation (PAL & Assoc – R 135 K). There is a corresponding impairment/provision for doubtful collectability Liabilities largely provision for staff payables, exchange – Finance report 4 2014/15 year leave, 13 th– Qand performance bonus overlapping the two

Cash flow For the same period in the previous year, cash & cash equivalents were R 19, 5 million compared to R 13, 2 million the current year Cash balances movements accounted for in the main by: Cash utilised for investment in non-current assets – R 4, 6 m (vehicle purchase in the main) R 1, 6 7 million attributable to outflows from operating activities mainly due to increased expenditure Liquidity remain sound but comparably reduced between the two periods mainly as a result of CAPEX spending and increased spending on goods and services 19 Finance report – Q 4 2014/15 year

Other Financial management matters. . . 1 Risk management Risk Mitigating action plans being regularly implemented by 20 management Regular Committee meetings held where oversight is exercised. Last quarterly meeting was held on 29 January 2015 and workshops to assess risk carried out during the quarter under review All top risks were reviewed and discussed in-depth by the Committee in each meeting Emerging and critical risks identified and/or updated are; ◦ BCP especially as is affected by electricity blackouts – the area ranked high, however, mitigated after the JHB landlord procured and installed an electricity diesel generator during the reporting quarter ◦ Funding – owing to the budget cut, the risk is directly impacted (likelihood certain with significant impact) – high ◦ Accommodation condition and availability – moderate to high on Finance report – Q 4 2014/15 year reassessment

Other Financial management matters. . . 2 Supply Chain management ICT project procurement was concluded where bids were awarded to various service providers at a total cost of R 2, 8 million (within available budget) Audit Issues All Audit action plans previously committed by management were implemented with success. Regular Key control assessments by AGSA indicates material improvements PFMA reporting processes underway – Financial statements and Report on pre-determined objectives to be submitted on 31 May 2015 to AGSA and NT (PFMA; s 55) 21 Finance report – Q 4 2014/15 year

End; Q&A CGE Free Call Hotline 0800 007 709 ▫Thank you 22 Finance report – Q 3 2014/15 year