Finance Report

1. Finance Report Quarter ending 31 December 2016 2016/2017Financial Year

2. The Purpose of the presentation is in response to this extract from the invitation letter by PC • Financial Performance • A brief overview of the financial report of the CGE. Expenditure per programme • An overview of the CGEs management of income, expenditure, transfers, cash and assets, as well as the state of its financial management systems – achievements and challenges. • Audit Action Plan • Brief overview of the recommendations of the AGSA on the 2015/2016 annual report • Progress and implementation of AGSA recommendations. • Clear indication for each recommendation what the plan of action is, the key person responsible, time frame (specific), cost implications if any • Progress and implementation of BRRR of 2016

3. Table of contents • Financial Performance • Financial Position • Financial Management system • Audit Action Plans • Budgetary Review & Recommendations Reports

6. Overview – Income and Expenditure 3 months (Q3 – Oct to Dec 2016) Cumulative to 31 Dec 2016 Total income for YTD. R54, 6 million of which – Transfers were R52, 6 million Donor Income was R1,8m (SABC) Interest and other sundry receipts were R396, 000 Total expenditure came to R58, 6 million Year to date deficit of R3,8 m was recorded. There are mitigating plans in place to avert deficits/unauthorised expenditure by the end of the financial year • Total income was R18, 4 million of which – • Transfers from NT were R17, 4 million • Donor, Interest & other – R 1 million • Total Expenditure amounted to R18, 4 million • For the 3 months’ period, a break-even (Income equals expenditure) was reported. This was mainly due to the short period (holidays) of operations and the effect of a reduction in the leave provision recorded during December.

7. YTD (Dec. 2016) Expenditure per programme and economic classification

9. Financial management systems Achievements Challenges Anticipated budget and cash-flow management pressures due to budgetary reductions. A few accommodation related issues. However, NDPW is actively assisting Pending regularisation of expenditure by National Treasury • ICT systems improvements • Main infrastructure • Accounting systems upgraded • Continuous improvements in the internal control environment • Resolved and implemented AGSA recommendation on key controls

10. Audit action plans…..An overview • AGSA Audit Report for 2015/2016 Financial year – Clean Opinion without any matter brought to the attention of users of the Financial Statement, Pre-determined Objectives’ report was unqualified and no material non-compliance with key legislation was identified and expressed by AGSA. However, recommendations were made to address control weaknesses on: • Internal control weaknesses ( substantially resolved) • Human Resources Management • Information Technology • Procurement and Payments of service providers • Asset Management • Pre-Determined objectives • Expenditure Management • Audit Plans of Action were implemented in line with the recommendations by AGSA – Schedule attached as annexure

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12. Annexures

13. Key notes on financial performance • Income and spending activities for the 2016/2017 were against a context of budgetary reductions from the fiscus in the past two periods (2015/16 – R3,1 m; 2016/2017 – R4,6 m). The reductions put a strain and pressure on the operations of the CGE. In this regard: - For the year – to- date, All income due and receivable was recorded at R54, 6 million (Including R52 m transfers) - Overall cumulative spending incurred at R58, 6 million as at 31 December 2016 Therefore total spending exceeded the budget (R55 m) and income resulting in an accumulated deficit of over R3 million. Key expenditure drivers are shown in the ensuing slide……………

15. For SO1: • Expenditure Year to Dec 2016 represented 78% of the annual budget for the SO. • Targets achieved consistent with APP. • Efficiency gains noted in line with cost containment initiatives under-taken.

16. For SO2: • For the period to end of Dec 2016, 78% was spent, also consistent with the achievement of the related performance target. • No variance anticipated by the end of the financial year, whatsoever • Efficiency gains noted in line with cost containment initiatives under-taken.

17. For SO3: • 41% of the annual SO budget spent so far. • Main contributor to spending is COE at R1.6 million. Officials time collecting data and drafting of reports – AGDI, CEDAW and attending meetings and conferences organised by regional and multi-lateral organizations e.t.c • Ordinarily, activities related to SO are saturated during the 4th quarter of the financial year. Therefore the remaining budget will be fully utilised by the end of the FY

18. For SO4: • Overall 97% recorded. Actual expenditure includes R1, 6 m depreciation & R1,8 m (donated by SABC) – not budgeted for • Higher spending rate: • Financial management due to regularity audit fees • Information Technology due to the investment project (Final leg of the project concluded in Q1)