Finance Report Financial Quarter ending 31 December 20152016

Finance Report Financial Quarter ending 31 December 2015/2016 Financial Year 1

Table of contents • • Financial Performance and Budget Management Financial Position Cash flow management Management Accounts – Analytics Corporate Services Risk Management Audit and PFMA related matters 2

• G ran incr t/transf e ers mar ased gina lly a prio t r due quarte 1% of r t redu o budg figure e ta • O ction s by ry ther N T in 20 incom e les 1 4. 201 Figu ser 5 r R 60 include es for 0 s don k SABC atio ns days cam for 16 paig ns • Per s 6% onnel cos main cost in l to • f liv y due crea s Fin ing to gen ed by anc a d cha e c (201 just era me l rela rge in osts w 4) nts • tin e the r e g Cos ao to pr fea t con pena eviou nce o l tur s t f es ainm ties b year f in c en , y urr t eff SARS ent e per cts iod 3

Summary analysis for Q 3 results • Transfers according to allocation at R 16, 9 million. Other income recorded at R 784 k • Expenditure at R 16, 7 million, leaving an operating surplus of R 1, 1 million • Compared to previous period, efficiency gains recorded due to cost containment efforts and other dynamic/innovative interventions to deliver services cost effectively (e. g. partnering internally and with external stakeholders) • Spending was within budget 4

Actual comparative figures 60000 50000 40000 30000 20000 10000 t) s ici se ef en lu s/ (d Ex p om nc r. I he su rp Ot Tr an sfe rs e 0 2015 2014 5

Summary analysis on YTD results – 31 Dec 2015 • Transfers for the three quarters were in line with official appropriation at R 50, 8 million or 75% of total annual allocation. Other income of about R 1, 5 million includes R 951, 000 donation from SABC for the Women month and 16 days activities during the year under review. The remainder is largely interest income from cash held in the current account at the bank. • Total expenditure was R 51, 4 m (9 months) compared to R 54 m in the previous year (same period). The overall spending is within revenue recorded in the 9 months’ period resulting to a net surplus of R 876, 870. The surplus is attributable to efficiency gains in the main. • It is projected that by the end of the financial year, the Commission’s spending will be within budget. 6

Year to 31 December 2015 expenditure per programme and strategic objective • • 80% of costs relatively fixed – COE and office overheads 20% direct to specific APP activities The main service delivery programme accounts for most of spending ( 56%) 7

• • 32% of total expenditure was incurred in provinces (R 16, 5 m) It takes a monthly average of R 203 k to operate a provincial office where R 167 k thereof is COE average Provincial expenses are COE- intensive (82%) whilst HQ is 66%. COE intensity implies less overheads in relative terms Provincial offices are main service delivery outlets 8

SO 1 – Enabling Legislative environment • • • Spending consistent with APP roll out – no material deviation from Plan Efficiency gains on travel related expenditure were realised Litigation on the Univen matter contributed to the higher than budget spending on SO 1 -3 9

SO 2 – Promotion and protection of gender rights • This SO is activity -intensive and also involves the use of multidisciplinary teams in execution • Consistent with the actual APP activities, spending deviations within the acceptable bounds 10

SO 3 – Monitoring of compliance to treaties • Activities on SO are saturated in q 4 in terms of the annual plan hence YTD spending lags the annual budget at 58% • AGDI project delays also contributed. Catch up set for Q 4 therefore no deviation is anticipated • Spending and completion of APP activities to be achieved by end of Quarter 4 11

SO 4 – Effective and efficient administration • • ITC and Communications spending activities included those funded by respectively conditional grant from NT and Donation in kind from the SABC HR lagging due to rescheduling of training into the 4 th quarter due to calendar challenges to synchronise with service providers ( most in particular; the School of Government) + delays in projects such as business model review 12

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-Inflows and outflows from operating activities remain constant between comparative periods -R 7 million invested into PPE over the past 12 to 18 months period -Cash held reducing over time and anticipated to be under pressure over the next 12 months period. 14

Corporate Services overview • Supply Chain Management • Fleet Management • Facilities and office accommodation 15

SCM – Demand Management • Supplier database – New circular from National Treasury re- Centralised Supplier Database effective from 1 April 2016. Transitional activities must be undertaken during 4 th quarter. • Additional needs identified includes material and training manual (content) development for PEI by third party provider. Specifications in this regard were compiled for sourcing during Q 4. • As part of the aggregate procurement plan for the year, the procurement of copier machines is still pending the decision by NT (office of the Procurement Officer) on a transversal contract, therefore current lease is operative on a yearly extended basis ( compliant with guidelines/instruction notes) • Demand planning activities for new year will take place alongside the APP planning cycle activities 16

SCM – Acquisition Management • New travel agency was awarded a three year contract during December 2015 to commence operations from 1 January 2016. Previous contract formally lapsed and the change over to new provider occurred with success/no exception or challenge. Final but insignificant settlement of the latter’s outstanding accounts during Jan to Feb 2016 due to time lags due to commercial practice ( Agent awaits billing from providers before invoice made out to CGE). • There has not been any deviations recorded for the acquisition on any goods and services during this quarter. • No irregular expenditure, whatsoever was identified/recorded during the period to 31 December 2015. 17

SCM – Performance Management • Contract register reviewed during the quarter under review. Corrective action taken on all anomalies ; not only ensure compliance but effective contract management for the effective performance of the CGE business • An offer from a winning bid (for the supply of laptops) was terminated because the provider could not deliver according to the bid specifications. A new RFQ was issued, adjudicated and delivery taken in January/February 2016. Therefore performance on all IT project related supplier contracts is fulfilled in line with contractual obligations and corresponding performance standards 18

SCM – Disposal Management • • HQ old, scrap and technologically obsolete assets were disposed at gross proceeds of R 11, 000 Disposals for items held in provincial offices will be dealt with by provinces directly in consultation with the Disposal Committee of the CGE. The processes are underway for completion by 29 February 2016. The second phase for the disposal of IT equipment is currently underway where the method of disposal is through donations to institutions of learning (in line with CGE policy and National Treasury Regulations). The beneficiaries are been identified amongst local stakeholders for ratification by Committee and approval by CEO by the first week of March 2016. In terms of the schedule, all assets eligible for disposal shall be cleared from the fixed assets register by close of the financial year (at reporting date) 19

SCM – Logistics Management…. 1 • Fleet management – concerns remain around the effectiveness of management enforcement of controls. The issue of consequence management highlighted to responsible line managers and PC’s. There are specific investigations into incidents that resulted in dents for two provincial vehicles: – Limpopo – Pretoria • Tracking system will be upgraded to include functionalities that could assist fleet management controls (such as history on driving/behaviour/speed, e. t. c) • Assets management – A physical verification of all CGE assets commences effective from week ending 12 February 2016 and shall carry over the end of the month. 20

SCM – Logistics Management…. 2 Office Accommodation: • The Eastern Cape and Pretoria offices are destined to change premises by the beginning of the new financial year(1 April 2016). – Floor plans discussed with owners/lessors and agreed for development already – Branding of offices and IT cabling discussed and planned into the logistics • A proposal from the Free State office to move floor to the ground level is being evaluated ( Cost and benefit analysis). The proposal promises to improve accessibility by public. • Still awaiting NDPW on developments regarding the HQ procurement instruction. The office lease was extended for 18 months since April 2015 to cover the period of procurement. The schedule overrun will be followed through during the quarterly bilateral meeting with NDPW’s Key Account Management to held in March 2016. 21

• Eastern Cape, Free state and Western Cape spending higher than average mainly due to expenses incurred for maintenance & repairs to old fleet. The old fleet is been assessed for layoff/disposal since its retention appears uneconomic and cost ineffective. • It costs on average R 5, 400 per quarter to run and maintain a vehicle without taking depreciation expense into account • Fleet expenditure quarterly summary December 2015. xlsx 22

2015/2016 Year end planning • Section 40 and 55 reporting period – 31 May 2016 PFMA submission due date on AFS and Pre-determined objectives. • Plans for audit readiness in place - Audit by AGSA to commence by 2 May 2016 in terms of the signed engagement letter. The budget and schedule was duly approved by the Audit committee • Currently underway is the IS audit co-sourced with internal audit of the CGE. A determination will be made by AGSA if reliance will be placed on this work, thus if in favour, extra costs, time and effort could be avoided/saved. 23

Audit Action plans • The implementation of the recommendation by the AGSA and the CGE internal auditors progressing according to commitments made without any material deviation. – – – SCM compliance with prescripts ICT environment weaknesses Human Resources Management Performance information reporting (s 40) Financial Statements (s 40) General internal control systems 24

Audit Action plans – implementation status • All specific individual issues corrected • Structural/systemic weaknesses addressed to stem recurrence. Internal controls developed and/or heightened as the case may be • Progress reviewed and assured by internal audit • AGSA follow-up tracking document - February 2016. xls 25

Risk Management • Identified risk treatment plans are implemented by Management and subjected to oversight by all governance Committees • Notable actions implemented includes – Physical security – Biometrics access devise , smoke detector and alarm installed in the server rooms at head office – Staffing – critical positions filled (FS) – Budget – mitigated through cost control and expenditure management • Emerging risks – None, whatsoever identified during period under review and/or any reassessment on existing risks was considered to adversely impacting the achievement of any objectives of the organisation. • Risk Assesment report- financial period to January 2016. pdf 26

Contingencies, fraud and Litigations • Receivables – CGE v Gasa case – impairment and/or recoverability assessment to be made before the end of the financial year. High dependency on the Good Governance and social ethics committee. • Contingent liability -Axolute v CGE – matter resolved and will not impact financial statements anymore. • Management is not aware of any actual or potential fraudulent activities, whatsoever. No report in this regard was made to management during the period under review. 27

Thank You HAVE A GENDER RELATED COMPLAINT ? ? REPORT IT TO 0800 007 709 Twitter Handle @CGEinfo Facebook: Gender Commission of South Africa 28