Improving Public Infrastructure and creating employment opportunities to make Gauteng work better

Transcription

1 Department of Infrastructure Development Annual Report 2010/2011

2 Improving Public Infrastructure and creating employment opportunities to make Gauteng work better

3 Submission of the Annual Report to the Executive Authority Mr. Simon Bhekizwe Nkosi Member of the Executive Council Gauteng Department of Infrastructure Development I, the Accounting Officer of the Gauteng Department of Infrastructure Development (GDID) Vote 12, Ms. Mapula Modipa have pleasure in presenting the Department s Annual Report for the 2010/11 Financial Year, in accordance with Section 40 of the Public Finance Management Act (PFMA) to you, the Executive Authority, the Legislature and the Community of Gauteng. Ms. Mapula Modipa Head of Department Department of Infrastructure Development 31 May

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5 CONTENTS Section 1. GENERAL INFORMATION... 6 Vision, Mission and Values... 6 Organisational Structure... 7 Legislative Mandate... 8 Entities Reporting to the MEC... 9 MEC s Statement Overview by the Head of Department Section 2. INFORMATION ON PREDETERMINED OBJECTIVES Overall Performance Voted Funds Aim of Vote Summary of Programmes Key Strategic Objectives Achievements Overview of the Service Delivery Environment for 2010/ Overview of the Organisational Environment for 2010/ Key Policy Developments and Legislative Changes Departmental Revenue and Expenditure Departmental Expenditure Transfer Payments Conditional Grants and Earmarked Funds Capital Investment, Maintenance and Asset Management Plan Programme Performance Programme 1: Administration Programme 2: Infrastructure Development/Public Works Programme 3: Property Management Programme 4: Expanded Public Works Programme

6 Section 3. ANNUAL FINANCIAL STATEMENTS Report of the Audit Committee Report of the Accounting Officer Report of the Auditor General Appropriation Statement Notes to the Appropriation Statement Statement of Financial Performance Statement of Financial Position Statement of Changes in Net Assets Cash Flow Statement Notes to the Annual Financial Statements (including Accounting policies) Disclosures Notes to the Annual Financial Statements Annexures Section 4. HUMAN RESOURCE MANAGEMENT Section 5. OTHER INFORMATION Acronyms List of Contact Details

7 Section 1 General Information

8 1. GENERAL INFORMATION Vision, Mission and Values Vision of the Department To be a leading infrastructure provider and facilitator which positions Gauteng as a globally competitive city region with a sustainable and growing economy. Mission of the Department To facilitate service delivery through the development, construction and management of public infrastructure so as to optimise the creation of decent jobs and the promotion of a better life for all. Values of the Department The Department of Infrastructure Development espouses values that underpin its operations and the conduct of its officials with regard to its clients and citizens. They are as follows: Values of the Department of Infrastructure Development Integrity Honesty Professionalism Transparency Accountability Collective responsibility Compassion Innovation Value addition The Department will encourage conduct by its employees and contractors which engenders reliability, veracity, honour and truthfulness The Department promotes sincere, frank and open service to its clients and the citizens of the Province The Department commits to a service which is proficient and exceptional, displaying high levels of competence and skill The Department promotes simplicity and intelligibility of all its communication, engagement and services in general to ensure that citizens know and understand its functions and interventions The Department commits its staff and service providers to be answerable to the public and oversight institutions of government for services they render and commitments they make The Department espouses a culture of collective work, resourcefulness, ingenuity and initiatives to ensure seamless service delivery The Department pledges to deliver its services to clients and Gauteng residents with care, kindness and empathy in the selfless pursuit of a better life for all The Department commits to uphold highest standards of novelty and uniqueness in all the services that it provides, using all its potential to introduce fresh ideas and innovative ways of service delivery The Department promotes service delivery which improves the quality of business processes, state conduct and the lives of the citizens people of Gauteng 6

9 Interim Organisational Structure of the Department 7

10 Legislative Mandate Overarching Mandate The Constitutional mandate of the Gauteng Department of Infrastructure Development is drawn from Schedules 4 and 5 of The Constitution of the Republic of South Africa (Act 106 of 1996), which grants all Provinces concurrent (i.e. with National Government) and exclusive (i.e. provincial only) competencies. Provincial competencies are in essence legislative competencies on specific functional areas such as public works. The core mandate of the Department of Infrastructure Development is described as: Implementing all the GPG CAPEX budget allocation and other small, medium and large scale infrastructure projects which utilise sole or joint GPG financial investments; and to maximise the social and economic benefits that can be gained from the GPG property portfolio. The Department of Infrastructure Development plays a key role in utilising the construction sector as a catalyst to the development of skills, creation of jobs and the development of sustainable communities. Coupled with the Expanded Public Works Program (EPWP) and effective skills development programs linked to both CAPEX and Maintenance projects, the services rendered by the Department will yield a positive impact on the development of skills and the reduction of poverty within communities. All projects and programs within the Department are underpinned by a skills development and job creation component. In addition, the Department implements the policies of BBBEE and Preferential Procurement in line with the approved national targets, ensuring the empowerment of vulnerable and marginalised target groups, i.e. women, youth, and people with disabilities. Non-entity specific legislation The following National legislation and policies provide the broad legislative and policy context within which the Department of Infrastructure Development plans are implemented: Public Finance Management Act, Act 1 of 1999 Construction Industry Development Board Act, Act 38 of 2000 Constitution of the Republic of South Africa, Act 108 of 1996 Supply Chain Management Act Regulations Preferential Procurement Policy Act, Act 5 of 2000 Broad Based Black Economic Empowerment Act, Act 53 of 2003 White Paper Public Works: Towards the 21st Century White Paper Creating and Enabling Environment for Reconstruction and Development in the Construction Industry Government Immoveable Assets Management Act, Act 19 of 2007 The Inter-Governmental Relations Act Planning Professions Act, 2002 Architectural Professions Act, 2000 Built Environment Professions Act, 2000 Engineering Professions Act, 2000 Project and Construction Management Act, Property Valuers Professions Act,

11 National Spatial Development Perspective National Environmental Management Act, 1998 Occupational Health and Safety Act, 1993 Division of Revenue Act 1 of 2010 Expanded Public Works Programme Guidelines for implementation of labour intensive construction Prevention of Illegal Eviction from and Unlawful Occupation of Land Act Space Planning Norms and Standards Notice 1665 of 2005 Local Government: Municipal Property Rates Act, 2004 Deeds Registries Act, Act 47 0f 1937 Gauteng Land Administration Act, Act 11 of 1996 Promotion of Access to Information Act, Act 2 of 2000 Minimum Information Security Standards. The Criminal Procedure Act, Act 51 of 1997 as amended The Protection of Information Act, Act 84 of 1982 as amended Public Service Regulations, of 2001 The Prevention and Combating of Corrupt Activities Act, Act 12 of 2004 The National Building Regulations and Standards Act, Act 103 of 1956 as amended Employment Equity Act, Act 55 of 1998 Labour Relations Act, Act 66 of 1995 Public service Act, 1994 as amended Provincial Policy Mandates Provincial Policy and Legislative Mandates are derived from the following, among others: Gauteng Spatial Development Perspective Gauteng Growth and Development Strategy Municipal Integrated Development Plans Gauteng Strategy on Sustainable Development Gauteng Housing Management Plans Gauteng Planning and Development Act, Act 3 of 2003 Entities Reporting to the MEC No entities were reporting to the MEC for Gauteng Department of Infrastructure Development for the year ended 31 March

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13 Statement by the Member of the Executive Council Mr. Simon Bhekizwe Nkosi Member of the Executive Council A historic episode - South Africa hosting the FIFA World Cup - has come and gone, and 2010 is now a memory. The built industry is still staggering in the aftermath of the hard preparations, and Government is relieved to have witnessed its increased expenditure on new and rehabilitated infrastructure contributing towards this success. The Department has played a significant part in the story of its success through the upgrades of Sinaba Stadium, and HM Pitje Stadium is also going to be challenging in the sense that the country expects this vibe and momentum to continue. Moving forward after the landmark year of 2010, and as is common in developing countries such as ours, the key challenge is not necessarily going to be around delivering new infrastructure, but more on sustainable operations afterwards in terms of the maintenance and servicing of such infrastructure. It is in this context that one of the Department s critical focus areas for 2010 / 2011 has been the intensified repairs and maintenance programme of our Province s socio-economic infrastructure. The Gauteng Provincial Government (GPG) has placed strong emphasis on tracking deliverables as part of ensuring that we come up with innovative ways and also alternative construction methods to best deliver services to our people at a much faster pace. The stark reality is that our Nation s infrastructure needs are tremendous and Gauteng, which is at the epicentre of our economy, has to accommodate the bulk of the infrastructure demands. The Department of Infrastructure Development (DID) has been strategically positioned to enable the achievement of the GPG goals around quality education and health care, employment creation, poverty relief, skills training and development and access to quality service delivery. In essence DID is designed to help define and reposition the portfolio of socioeconomic infrastructure in the social growth and development agenda of the Province. All our service delivery efforts with regard to the above mandate should be biased towards addressing the challenge of employment creation, skills development and poverty relief efforts of the Gauteng Provincial Government. Concerted efforts will be made within the Department s Programmes of Action, to infuse the attainment of both the National and Provincial job creation targets. 11

14 The Department of Infrastructure Development is also intensifying energy saving efforts as part of the going green revolution in our service delivery programme. We are contributing to the reduction of our carbon footprint by promoting infrastructure which is relevant, useful, but also promotes sustainable development. Looking back at the 2010/2011 Financial Year, whilst the achievements of DID are considerable, there is still a need to closely monitor the systems we have put in place to ensure that previous concerns highlighted by the Auditor General unauthorised, irregular, fruitless and wasteful expenditure arising from internal control deficiencies and instances of non-compliance with applicable legislation are a thing of the past for our Department. The Accounting Officer and Chief Financial Officer have been leading our efforts to improve financial management systems and are working conscientiously to achieve a clean audit. The Department is committed to ensuring that its activities are underpinned by sound governance structures and the implementation of effective internal controls in all areas of operations. The Audit Committee continues to provide invaluable support and direction throughout the year and ensures that the Department remains focused on maintaining sound financial, internal controls and risk management systems. We remain committed to continuously implementing effective strategies which will result in the Department obtaining a clean audit report. This will be my priority as the Executing Authority. We look forward to the new Financial Year 2011/12 with hope and excitement, fuelled by the amount of ground already covered in the year under review. History has taught us lessons to help us prepare for the future characterised by improved service delivery, good corporate governance and capacity building. It is upon these virtues that a future competitive and competent social infrastructure will be developed, providing skills and employment to the most marginalised section of our society as we stride toward a better life for all. It is an honour for me to be deployed to and be given the responsibility of guiding the service delivery programme of the Department of Infrastructure Development. I commit myself, the Senior Management of the Department and all our valued employees across the Province to overcome these audit and other challenges and to work with determination to achieve our service delivery mandate. Mr. Simon Bhekizwe Nkosi Member of the Executive Council Gauteng Department of Infrastructure Development 12

15 Overview by the Head of Department Ms. Mapula Modipa Head of Department FINANCIAL YEAR: 2010/11 SCORING A GOAL FOR AFRICA I am the happiest man to announce that the World Cup in South Africa was a huge financial success for everybody, for Africa, for South Africa and for FIFA, FIFA President: Sepp Blatter (03/03/2011) What a year this was! One cannot begin any statement without reflecting on the highlight of the 2010/11 Financial Year. The successful hosting of the 2010 FIFA World Cup, as confirmed by FIFA, but more importantly by the fans, bears testimony that as a Country, our skills, technology and expertise is more than world class. With Gauteng being host to both the opening as well as closing events, the success of this tournament is indeed a success of this Department as the lead infrastructure provider for the Province. It is however important to note that the 2010 FIFA SWC, is but one of many success stories of this Department for the 2010/11 Financial Year. The Department remained focus on its over-arching strategic goals of providing a better life for all in Gauteng by creating employment opportunities via its Expanded Public Works Programme. The provision of quality public infrastructure continued with the completion of 13 GDE construction projects, 2 SRAC construction projects and 2 EMS construction projects. Provision of quality public infrastructure, while key, is not the end as such. Infrastructure needs to be continuously maintained to ensure prolonged service life and enhanced safety of the facility. In this regard, the Department has maintained 120 Health facilities and 33 Social Development facilities, as well as 27 of its own facilities. 13

16 Youth, Gender and Disability Mainstreaming within the Department has ensured that the interests of these target groups are well served. The Department has provided employment opportunities to the Youth, to Women and 36 to People living with Disabilities. In addition, the Department via its Maintenance Sub-Programme has availed 11% of all its maintenance jobs to the Youth, 16% to Women and 0,4% to People living with Disabilities. To ensure that skills are created and retained, EPWP beneficiaries have been trained in various artisan skills including plumbing, bricklaying and carpentry, while 77 contractors have been trained via the EPWP Contractor Incubation Programme. As the custodian of the Provincial property portfolio, the Department has verified 900 state owned properties in accordance with Market Related Rentals and 134 residential leases have been concluded. 100% of the Department s own asset register has been maintained, while the maintenance of the GPG asset register is at 45% completion. In addition, R11.3M in property revenue has been collected by the Department, while R211M in rates and taxes has been paid to Municipalities A skilled and empowered staff complement will enhance productivity and service delivery and as such the Department has trained and developed 983 staff members, and the Department has also put in place an Anti-Corruption Strategy to ensure that the fight against corruption continues unabated. Notwithstanding these achievements, going forward the Department remains focused on maintaining its place as the leading public infrastructure provider in Gauteng. The Department will pull out all the stops in building on the experiences of 2010/11 and ensuring that levels of achievement are improved in our service delivery plans for 2011/12. In closing, a note of appreciation goes out to all staff members and role players who have weathered the challenges of the 2010/11 Financial Year with the Department by means of their commitment and dedication. A call is made to increase such commitment, dedication and motivation towards ensuring that Gauteng indeed becomes a better place for all. Ms. Mapula Modipa Head of Department Gauteng Department of Infrastructure Development 14

17 Section 2 Information on Predetermined Objectives

18 2. INFORMATION ON PREDETERMINED OBJECTIVES 2.1 Overall Performance Voted Funds Main Appropriation Adjusted Appropriation Actual Amount Spent (Over) / Under Expenditure Responsible MEC Administering Department Accounting Officer R 000 R 000 R 000 R 000 1,204,239 1,314,038 1,167, , Aim of Vote Mr. Simon Bhekizwe Nkosi Gauteng Department of Infrastructure Development Ms. Mapula Modipa The aim of the vote is to achieve socio-economic growth, development and enhanced quality of life for all people in Gauteng Province Summary of Programmes Programme 1. Administration 2. Infrastructure Development/ Public Works Description The purpose of the Administration Programme is to ensure that all strategic operational and financial mechanisms and systems required for the delivery of the Department s goals and objectives are established and function at optimal efficiency. Furthermore, it ensures that Departmental staff adheres to the code of ethics regarding the Batho Pele principles. The Programme is also responsible for ensuring that the Department achieves its transformation targets and priorities, thereby contributing to National transformation targets and priorities, particularly in respect of poverty, unemployment and creating decent work and sustainable livelihood. Infrastructure Development Programme aims to ensure implementation of all GPG CAPEX projects through the provision, maintenance and refurbishment of social infrastructure. It includes ensuring that the infrastructure industry operates professionally and is inclusive of all previously disadvantaged people such as women, youth and people with disabilities. The Programme also ensures that infrastructure development is designed to support economic growth and investment within a framework that benefits the poor and underprivileged in the Province 16

19 Programme 3. Property Management 4. Expanded Public Works Programme Description Property Management Programme is responsible for the provision of accommodation within as well as outside of the CBD precinct area for all Provincial Departments. The Programme further aims at managing the Provincial property portfolio for the optimum benefit of all concerned. It provides facilities for all Provincial Departments to be able to render service to communities and involves the efficient management of properties and facilities owned or leased by the Department Expanded Public Works Programme (EPWP) facilitates the implementation of multi-sectoral community based projects across the Province whereby particularly youth, women and people with disabilities are provided with relevant training and productive employment opportunities such that skills and enterprises are developed and sustained, infrastructure is developed and maintained, and local economies enhanced. It focuses on drawing significant numbers of the unemployed into productive work through public works programs, in a manner where they gain skills while being employed. The EPWP is a Nation-wide Programme which will draw significant numbers of the unemployed into productive work particularly women (40%), youth (30%) and people with disability (2%), so that workers gain skills while they work, and increase their capacity to earn income. Further the Programme focuses on addressing the previously marginalised community through engagement with communities and local Municipalities in areas where projects will be implemented. This will ensure sustainability of projects. The Programme also provides platform for two-way dialogue between Government and people since communities are consulted prior to implementation of a project. * Please note that in terms of the Budget and Programme Structure there are three Programmes, viz. Administration, Public Works and Expanded Public Works Programme. Infrastructure Development and Property Management are sub- programmes under the Programme: Public Works. Property Management is therefore funded under Public Works Programme. However for the purpose of Departmental operations and reporting during 2010/11 Property Management was reported as a Programme in line with the interim organisational structure. 17

20 2.1.4 Key strategic objectives achievements The following is the list of Department s key achievements in relation to its strategic objectives during the year under review: 1. Provision and maintenance of public infrastructure to promote development of the less developed parts of the Province and redress economic disparities To prolong the life of public infrastructure, improve accessibility and keep equipment in a functional state, the Department rendered unplanned maintenance which included day to day maintenance and emergency maintenance for the Gauteng Department of Health and Social Development, as well as Agriculture and Rural Development. The following major maintenance was conducted: 3 Replacement of 2 chillers at Dr Yusuf Dadoo Hospital 3 Replacement of water pipes in theatre and X-ray room at Helen Joseph Hospital 3 Replacement and repair of laundry equipment at TMI laundry. 2. Expand infrastructure facilities to keep abreast of the growing demand for infrastructure and serve socio-economic ends The Department, through its capital works projects and its contribution to the Outcome Improved quality of basic education, has completed 13 Education projects which included new schools as well as refurbishment of existing schools. The new construction projects included Bronkhorstspruit Primary School, Katlehong South School, Rietvallei Primary School and Polokong Primary School. Additions and renovations were conducted at Mandisa Shiceka High School in Kagiso. In addition, the Department refurbished incontinence clinics at JISWA, Murial Brandt, Felicitas, Hope, Philadelphia, Francis Vorwerg, Phillip Kushlick and Adelaide Tambo Schools. Furthermore the Department completed 2 Sports, Recreation, Arts and Culture (SRAC) projects, namely the upgrade of Sinaba Stadium, the construction of new grandstand, ablution blocks and associated site works at HM Pitje Stadium, and the Lakeside Multi Purpose Community Centre (MPCC) was also completed. 3. Enhance the coordination of infrastructure across the Province To contribute to the Outcome Sustainable human settlements and improved quality of household life, the Department continued with the implementation of the Government Immovable Asset Management Act of 2007 (GIAMA). A workshop which included engagement with Provincial and National property custodians was held in order to provide a communication channel for the implementation of the Act. The Department also finalised 10 User Asset Management Plans (U-AMP). Furthermore, the Department through its vesting process succeeded in obtaining approval for 456 applications by the Provincial State Land Disposal Committee. One of the key requirements of the GIAMA, is the compilation of an accurate property asset register. To this effect the Department efficiently and effectively maintained 100% of its Asset Register and 45% of the GPG Asset Register. A total of 900 properties were verified. With regard to the Outcome A Responsive, Accountable, Effective and Efficient Local Government System the Department implemented Market Related Rentals with effect from June Door-to-door visits to ensure that the lease agreements are signed had been conducted where tenants were cooperative. Furthermore with regard to Devolution of Rates and Taxes grant, the Department continued to pay the rates and taxes of state owned properties. An amount of R211 million was spent from these allocations. 18

21 Rental revenue of R11,3 million was realised during the year under review of which R9,942 million was collected. 4. Implement and co-ordinate Expanded Public Works Programme (EPWP) in a manner that enhances skills development and optimises decent employment and entrepreneurship The Department contributed to the Outcome Decent employment through inclusive economic growth by implementing 17 Community based projects which include, Lillian Ngoyi Market, Thulasizwe School, Simunye School, Sekhulisile School, Rietvallei School, Diepsloot School, Sharpeville Hall, Germiston Hospital, Natalspruit Hospital, Bronkhorspruit School, Katlehong School, Polokong School, Lakeside Multi Purpose Community Centre (MPCC), Tsakane School, June 16 Memorial Site, Winnie Mandela School and National Youth Service Programme. Employment opportunities were created for youth, women and 36 people with disabilities temporary jobs were created. 77 emerging contractors were offered opportunities to participate in EPWP projects. 5. Continuous improvement of the technical and administrative capacity of the Department to pursue the goals of the developmental State The Department engaged in the process to overhaul its Departmental supply chain management system, including the re-engineering of processes and systems, skill assesments and the development of an appropriate structure. This will also assist in promoting the development of sustainable contractors owned and controlled by historically disadvantaged individuals. Furthermore the Department embarked on a head count to verify Departmental staff pursuant to the split of the then Department of Public Transport, Roads and Works, which is saving the Department approximately R36m per annum. An Anti-Corruption Strategy was also developed Overview of the service delivery environment for 2010/11 External factors that have negatively impacted on the Department s ability to deliver against its target include the following: With regard to the Devolution of Rates and Taxes grant, late submission, incomplete or inaccurate Municipal information and technical challenges in the electronic payment systems, non-receipt of some Municipal billing schedules and incomplete Municipal valuation rolls. The delay in the interface between the operations of the Integrated Electricity Asset Management System (IE Works) and the Basic Accounting System (BAS) hindered the payment process. The Department however has set up a joint task team with Municipalities to ensure that data is up to date as a correctional measure. A Debt Management Committee has been established to address the challenges related to billing by the Municipalities. Treasury has also been roped in to address this challenge. With regard to Market Related Rentals, there has been resistance to pay Market Related Rentals by tenants due to the protracted legal processes on eviction. Delays in confirmation of budget by client Departments and poor performance by some contractors have also impacted negatively on the Department s ability to deliver on certain projects. Irregular sittings of the Provincial State Land Disposal Committee impacted on the properties to be vested. The Department also experienced challenges with the participation of women and people with disabilities in the Expanded Public Works Programme (EPWP). Women and people with disabilities are reluctant to participate in EPWP projects due to fear of forfeiting the social grant. 19

22 2.1.6 Overview of the organisational environment for 2010/11 Organisational challenges impacted on the Department s ability to deliver on its services include the following: Finalisation of the migration process for personnel arising from the reconfiguration process Lack of financial and human resources delegation Finalisation and approval of the organisational structure Skilled human resource, i.e. engineers Instability of the Department due to prolonged temporary employment contracts Poor record keeping and inadequate registry divisions Inadequate budgets to deliver key client projects The effects of the closure of the three trading entities, which created disparity and oversupply of administrative personnel Key policy developments and legislative changes The following key policies were approved by the Accounting Officer during the year under review and have facilitated service delivery of the Departmental programmes and projects Human Resource Management Leave Policy Internship Policy Learnership Policy Gender Policy Overtime Policy Resettlement Policy Strike Management Policy Bursary Policy for Serving Employees Bursary Policy for External Applicants HIV and Aids Policy Employee Wellness Policy Sexual Harassment Policy Recruitment and Selection Policy Sport and Recreation Policy Strike Management Policy Risk Management Enterprise Risk Management Policy Fraud Prevention and Anti-Corruption Policy Office Services Landline Telephone Usage Management Policy Records Management Policy Charter EMT Charter 20

23 2.1.8 Departmental revenue, expenditure and other specific topics Collection of Departmental revenue Departmental Revenue 2007/08 Actual 2008/09 Actual 2009/10 Actual 2010/11 Target 2010/11 Actual % Deviation from Target Non-tax revenue 2,193 28,438 14,177 14,289 16, % Sales of capital assets Financial transactions (Recovery of loans and advances) Total Departmental Receipts ,193 28,438 14,177 14,289 16, % Departmental expenditure Programmes Voted for 2010/11 Roll-overs and Adjustments Virement Total Voted Actual Expenditure Variance R 000 R 000 R 000 R 000 R 000 R 000 Administration 126, ,796 98,493 28,303 Public Works 868, , , ,604 43,638 Expanded Public Works Programme 209, , ,098 74,902 Total 1,204, ,799-1,314,038 1,167, , Transfer payments Transfer payments were made to Municipalities in respect of the Devolution of Rates and Taxes grant received from the National Department of Public Works. Payments in terms of the conditional grant are governed by the Division of Revenue Act. An amount of R was transferred to Kopanong Precinct as disclosed in the Annual Financial Statement (Annexure 1 C). The invoices already submitted to the entity had to be processed and paid from the Department. 21

24 Conditional grants and earmarked funds Overview of grant received and actual expenditure on allocation Type of Grant Budget R 000 Actual Expenditure R 000 Devolution of Rates and Taxes grant % Available funds spent by the Department 294, ,819 72% Confirmation of Transfer It can be confirmed that the funds received as a result of the devolution of rates and taxes grant was allocated by the Gauteng Department of Finance: Treasury Division into the bank account of the Department. Indication of extent to which objective was achieved The amount of R211 Million had been spent from the allocated R294 Million. This translates to an achievement of 72% on the Devolution of Rates and Taxes budget. Reasons for variance The reasons for variance on the grant include: Non submission and late submission of billing schedules or invoices by Municipalities. Over projections by Municipalities also contributed to the under expenditure. Measures to improve performance The Department will continue to engage Municipalities with regard to submission of billing schedules or invoices. The MEC has also established a political oversight committee with MMCs to oversee this challenge. Furthermore a Debt Management Committee has been established where all Municipalities and GPG Departments continue to work out efficient ways of promoting accurate billing. Compliance with the Division of Revenue Act 1 of 2010 The Department has complied with the Act. The grant allocated was used solely for payment of rates and taxes as required. 22

25 Capital investment, maintenance and asset management plan Capital Investment List of projects during the year under review (2010/11) No. Project Name Project Description A. New Construction 1. Sokhulumi MPCC 2. Protea Glen Welding Skills 3. Zola MPCC Eldorado Park Stadium June 16 Heritage Site 6. Lakeside MPCC Kagiso Heritage Site Lillian Ngoyi African Market Construction of a MPCC Project Duration Start Finish Programme Funding Source April /03/2012 EPWP Equitable Share Erection of palisade April /03/2011 EPWP Equitable Share Construction of a MPCC April /11/2011 EPWP Equitable Share Tracks for the stadium April /03/2011 EPWP Equitable Share Construction of a heritage site Construction of a MPCC Construction of a heritage site Construction of a market April /10/2012 EPWP Equitable Share April /05/2011 EPWP Equitable Share April /05/2010 EPWP Equitable Share April /03/2011 EPWP Equitable Share 9. Klipspruit Hall Construction of a hall April 2007 April 2010 EPWP Equitable Share 10. Pfananani Enterprise Development 11. T-Shad Phase Kokosi MPCC 13. Tembisa MPCC Soshanguve Block H Jameson Park Home Based Care Centre Construction of an enterprise development centre Construction of a recycling plant Construction of a MPCC Construction of a MPCC for the aged Nov 2005 April 2010 EPWP Equitable Share Nov 2005 Jun 2010 EPWP Equitable Share March 2005 April 2010 EPWP Equitable Share Nov 2005 May 2010 EPWP Equitable Share Storm water upgrade Nov 2005 May 2010 EPWP Equitable Share Construction of a home based care centre Nov 2007 April 2010 EPWP Equitable Share 23

26 No. Project Name Project Description 16. Eldorado Park Taxi Rank Construction of a taxi rank Project Duration Start Finish B. Rehabilitation/Upgrade Johannesburg 1. Boiler replacement April 2007 March 2010 Hospital Boiler Johannesburg Hospital Upgrade of DID properties Koedoespoort Laboratory 3 Vacuum pumps April 2009 April 2010 Upgrade and refurbishment of various buildings Upgrading of laboratory 5. HM Pitje Staduim Upgrading 6. GPG Building Upgrade of access and security control 7. Sinaba Stadium Upgrading Katlehong Old Age Phase 11 Langalibahle Primary School Rehabilitation of an old age home Upgrading of a sports field Programme Funding Source April 2005 April 2010 EPWP Equitable Share April 2010 March 2013 April 2008 March 2011 March 2007 March 2010 April 2008 March 2011 March 2007 April 2009 April 2007 March March March 2011 Infrastructure Development Infrastructure Development Infrastructure Development Infrastructure Development Infrastructure Development Property Management Infrastructure Development EPWP EPWP Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Equitable Share Plans to close down or down-grade any current facilities No plans existed to close down or down-grade any facilities during the year under review. Maintenance backlog Conditional assessments to quantify and determine Departmental maintenance backlog will commence in the new financial year. No conditional assessments were conducted to determine the maintenance backlog during the year under review due to financial constraints. 24

27 Asset Management It is imperative to devise adequate internal controls to manage and safe-guard all Departmental assets. This was done through the drafting of a Policy and a Procedure Manual, which will guide all staff on the management and safe-guarding of assets. In 2010/2011 the asset portfolio increased significantly due to the incorporation of the entity assets whose operations were discontinued at the end of the 2009/2010 Financial Year. In addition capital assets from the Department of Roads and Transport, the Department of Community Safety and the Department of Local Government and Housing were transferred in accordance with the provisions of Section 42 of the Public Finance Management Act, The Department also transferred assets which previously belonged to Impophoma Infrastructure Support Entity and are related to the functions of the Department of Roads and Transport. Bearing in mind that the Department inherited assets from the former Department of Public Transport Roads and Works it came to light during the annual physical verification that some had exceeded their lifespan and were no longer usable. This prompted management to take a decision to write off such assets that the Department s records portray an accurate reflection of its asset portfolio. These consisted of 366 items of computer equipment and printers. To enhance accountability and reliability on financial information provided, the Department continued to prepare monthly reconciliations between the accounting system BAS and the asset register BAUD. This ensured that the asset register remained up-to-date during the year with respect to acquisitions, transfers and disposals. This information was also reviewed by the Provincial Asset Management Team which acts as an oversight body. As we close the current financial year, the state of the Department s asset portfolio is fairly good. Approximately 75% of the portfolio is in good working condition, 20% is fair and 5% has reached the end of its lifespan. A decision will be taken during 2011/2012 on these assets which have reached the end of their lifespan. In respect of immovable assets, the processes of verifying properties, buildings and land is still ongoing. Vesting of properties after verification is also still ongoing. Included in the verification process is a door-to-door exercise of verifying the property and the tenant to address revenue related issues as well. Major Maintenance projects which have been undertaken during the period under review No major Departmental maintenance projects were undertaken for the period under review, except for client Departments. Facilities that were closed down or down-graded during the period under review No Departmental facilities were closed down or down-graded during the year under review. 25

28 Projects that will be carried forward to the forthcoming financial year (2011/12) No. Project Name Project Description A. New Construction 1. Sokhumi MPCC 2. Zola MPCC June 16 Heritage Site Boipatong Heritage Site Kagiso Heritage Site Lillian Ngoyi African Market B. Rehabilitation/Upgrade Upgrade of DID properties Langalibahle Primary School Construction of a MPCC Construction of a MPCC Construction of a heritage site Construction of a heritage site Construction of a heritage site Construction of a market Upgrade and refurbishment of various buildings Upgrading of a sports field Project Duration Start Finish Programme Funding Source April 2010 April 2013 EPWP Equitable Share April 2007 April 2013 EPWP Equitable Share April 2009 April 2013 EPWP Equitable Share April 2007 April 2012 EPWP Equitable Share April 2007 April 2012 EPWP Equitable Share April 2007 April 2012 EPWP Equitable Share April 2010 March 2013 Infrastructure Development Equitable Share April 2007 April 2012 EPWP Equitable Share 26

29 New projects that will commence in the forthcoming financial year (2011/12) No. Project Name New and Replacements 1 Lehae MPCC 2 Eikenhof VIP toilets and communal water supply 3 Diepkloof paving 4 Bazami farmers settlements 5 Replacement of 10 lifts at 78 Fox, 3 at Thusanong, 3 at Peoples Bank, 8 at Corner House 6 Replace 2 generators at Fox street 7 Replace generator at Sage 8 Replace HVAC at 78 Fox 9 Replace smoke detection at 78 Fox Programme Programme 3 Programme 3 Programme 3 Programme 3 Programme 2 Programme 2 Programme 2 Programme 2 Programme 2 Municipality City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg City of Johannesburg Project description/type of structure Construction of a MPCC 1 Eikenhof VIP toilets and communal water supply Paving streets Fencing/water irrigation Mechanical installation Mechanical installation Mechanical installation Mechanical installation Mechanical installation Outputs 300 Toilets and 100 stand water and sanitation points Streets paved Fencing/water irrigation 24 lifts 2 generators replaced Generator at Sage replaced HVAC replaced Smoke detection replaced 27

30 No. Project Name Rehabilitation/Upgrading 1 Cleaning of vacant stands 2 GPG Precinct buildings Programme Municipality Project description/type of structure Programme 2 GPG Maintenance of vacant stands, grass cutting, rubble removal etc Programme 2 City of Johannesburg Building construction Outputs Vacant stands Building construction 3 Electrical compliance at 78 Fox Programme 2 City of Johannesburg Mechanical installation Electrical compliance Maintenance and Repairs 1 Maintenance of GPG Precinct buildings Programme 2 City of Johannesburg Maintenance GPG Precinct buildings maintained 2 Maintenance of social infrastructure 3 Maintenance of state houses 4 Maintenance of reserves Programme 2 GPG Maintenance Social infrastructure maintained Programme 2 GPG Maintenance State houses maintained Programme 2 GPG Vaal Dam and Roodeplaat Reserves maintained 28

31 The following process was in place in respect of the procurement system utilised by the Department, however, a Supply Chain Management reengineering processes was initiated and during 2011/12 the Gateway model will be implemented. Therefore, changes to the process flow will be eminent during the 2011/12 Financial Year. 29

32 Maintenance The Departmental Maintenance programme was severely impacted on by the shifting of funds from maintenance goods and services to maintenance compensation of employees to fund salaries of staff transferred from Impophoma Infrastructure Support Entity. Prior to the closure of the entities, the entities were required to fund its operating expenditure from the revenue it was supposed to generate from its operations. Therefore, the compensation of employees for the entities was never budgeted for in the past. However, based on the fact that the entities were not generating sufficient revenue, erstwhile Department of Public Transport, Roads and Works had to fund the compensation of employees. After the split of the former Department into the two newly formed Departments, the officials of the entities were absorbed into the relevant organisational structures. During the budget processes for the 2010/11 Financial Year, the Department did not budget fully for the officials of the then Impophoma Infrastructure Support Entity. The funding in respect of compensation of employees that was received from Provincial Treasury was also not sufficient to cover the expenditure fully. Therefore, during the adjustment budget process, funding had to be moved from goods and services to create sufficient budget for the staff absorbed from the various entities as Provincial Treasury was not able to assist with additional funding to fund the compensation of employees. Expenditure in comparison to property industry norms The Departmental expenditure on maintenance can be reported to be less than the property industry norms as there had been no major maintenance projects undertaken during the period under review. The main reason that contributed to the properties not being maintained appropriately was due to lack of funding. The budget related to property management in the main was linked to the Kopanong Precinct, Devolution of Rates and Taxes and some funding for goods and services. Since accruals from the previous financial year had to be met from the allocation, limited funding was available for maintenance. Progress made and intervention measure in addressing maintenance backlog In an effort to address the maintenance backlog, a team led by the Chief Financial Officer was established to assist in fast tracking the procurement process. This team assisted in the reduction of maintenance backlog despite limitations due to financial constraints. Maintenance backlogs relating to the Kopanong Precinct buildings and Departmental infrastructure could not be adequately addressed due to financial constraints emanating from prior financial year obligations that had to be fulfilled. As an intervention measure, the Departmental maintenance was temporarily transferred to the Sub-Programme: Property Management to ensure dedicated attention and focus on Departmental maintenance. This shift will therefore allow focus on conditional assessment to determine the extent of Departmental maintenance backlog and will also assist in the reduction of this backlog. 30

33 2.2 Programme Performance The activities of the Gauteng Department of Infrastructure Development are organised in the following programmes: Programme 1: Administration Programme 2: Infrastructure Development/Public Works Programme 3: Property Management Programme 4: Expanded Public Works Programme * Please note that in terms of the Budget and Programme Structure there are three Programmes, viz. Administration, Public Works and Expanded Public Works Programme. Infrastructure Development and Property Management are sub-programmes under the Programme: Public Works. Property Management is therefore funded under Public Works Programme. However for the purpose of Departmental operations and reporting during 2010/11 Property Management was reported as a Programme in line with the interim organisational structure. Programme 1: Administration Purpose: The purpose of the Administration programme is to ensure that all strategic operational and financial mechanisms and systems required for the delivery of the Department s goals and objectives are established and function at optimal efficiency. Furthermore, it ensures that Departmental staff adheres to the code of ethics in line with Batho Pele principles. The Programme is also responsible for ensuring that the Department achieves its transformation targets and priorities, thereby contributing to National transformation targets and priorities, particularly in respect of poverty, unemployment and creating decent work and sustainable livelihood. Strategic Objective of the programme Continuous improvement of the technical and administrative capacity of the Department to pursue goals of the Gauteng Provincial Government. Service Delivery Objectives and Indicators Office of the MEC Measurable Objective To coordinate the mainstreaming of MEC special projects into Departmental programmes Measure/ Indicator % of special projects integrated Actual Performance against Target Reason for Variance Target Actual 100% 100% - 31

34 Measurable Objective To strengthen intersectoral and community relations To timeously respond to questions from the Legislature Measure/ Indicator No. of outreach programmes No. of special events facilitated % of Legislature queries responded on time Actual Performance against Target Reason for Variance Target Actual % 100% - To coordinate the tabling of relevant documents to Legislature To establish and maintain political relationships with strategic partners within the private and public sectors To coordinate the formalisation of new/existing international, bilateral and multilateral cooperative agreements No. of documents tabled No. of initiatives formalised No. of cooperative agreements formalised Only twelve documents required for tabling for the year under review 15 4 Project put on hold and to continue in next financial year 6 0 No bilateral/ multilateral agreements entered into during the year under review To resolve queries received from the public in relation to service delivery % of queries resolved 100% 100% - 32

35 Office of the HOD Measurable Objective To Interface MEC s office with Administration To provide confidentiality over HoD documents To facilitate Departmental performance by the HoD. To create a transparent and accessible governance mechanism for the Department Measure/Indicator Actual Performance against Target Target Actual Reason for Variance Quarterly updated Calendar % compliance to deadlines on responses to Legislature Questions & queries from the MEC Turnaround time for submission of committee reports Submission by deadline 100% 100% - Submission by deadline % times reception is manned 100% 100% - % compliance to the Minimum Information Security Standards No. of progress/ performance review meetings with Chief Directorates No. of Performance Reviews with branches A two way communications mechanism to ensure a governance system that is transparent and accessible Commission a revised Communications Strategy to include regular communication updates to all staff related to executive decisions as well as current happenings within the Department. Introduction Management on the Floor where the HOD communicates current happenings within the Department 100% 100% Draft strategy developed and in the process of discussion

36 Measurable Objective Measure/Indicator Actual Performance against Target Target Actual Reason for Variance To ensure continuous improvement on the management and deployment of resources in order to achieve a clean audit report The deployment of resources in line with the PFMA and in accordance with the strategic objectives of the Department Commissioning of an audit report through the office of the CFO with respect to the current deployment of resources against the Departmental Strategic Objectives and the PFMA All currently deployed Departmental resources reviewed Reports generated - To ensure that the procurement system is overhauled to achieve shared economic benefits of the Department s opportunities A procurement system where Departmental opportunities are extended to emerging and new SMME service providers Commissioning an audit of the current procurement process with respect to beneficiaries of Departmental opportunities, with recommendations Commissioning a review and update of the current Service Provider Database Review of supply chain management processes is concluded - Commissioning a review to current procurement policies to ensure that Departmental opportunities benefit people in accordance with the revised and updated database, on a revolving basis 34

37 Measurable Objective Measure/Indicator Actual Performance against Target Target Actual Reason for Variance To ensure a transparent and corrupt free procurement process A transparent and uncorrupt procurement process Commissioning an audit of the current procurement process with respect to internal and external corruption, with recommendations Anti-Corruption Strategy approved - Commissioning a review of the current procurement processes and policies in accordance with the findings of the procurement audit Commissioning of an Anti-Corruption Strategy with respect to Departmental procurement as well as the procurement process as a whole Corporate Service Measurable Objective Monitoring and Evaluation To provide performance monitoring and evaluation information and support for the Department To enhance Monitoring and Evaluation of Departmental service delivery Measure/Indicator Number of reports submitted on time Monitoring and Evaluation Framework implemented Actual Performance against Target Target Actual Monitoring and Evaluation Framework drafted and adopted Reason for Variance Draft Departmental M&E Policy Framework M&E Framework dependant on the finalisation and approval of Gauteng M&E Policy Framework by the GPC 35

38 Measurable Objective To provide strategic performance information and support for the Department To provide technical performance information and support for the Department To provide performance monitoring and evaluation information and support for the Department To provide performance monitoring and evaluation information and support for the Department Measure/Indicator Number and percentage of instances of responses facilitated, consolidated, compiled and submitted in accordance with deadline (of technical information and reporting to the Office of the Premier, the Office of the MEC, the Office of the HOD as well as to the Gauteng Planning Commission) Number and percentage of instances of responses facilitated, consolidated, compiled and submitted in accordance with deadline (to the Gauteng Treasury, Gauteng Audit Services, Auditor General and to the Office of the CFO) Management information repository implemented Management information dashboard over-view of performance reporting Actual Performance against Target Target Actual Performance information repository created on DID Network Provide Departmental overview of performance information at BMT Reason for Variance 8(80%) 64(100%) - 8(80%) 13(100%) - Performance information repository created on DID Network Departmental overview of performance information at BMT provided

39 Measurable Objective Governance and Legal To conduct research within the Department To develop all Departmental policies To review all Departmental policies To monitor compliance to policies To coordinate the development of Provincial Legislation / Regulations Measure/Indicator Number of research reports monitored, conducted and evaluated. Number of policies developed Number of policies reviewed Number of policy compliance monitored Number of Legislation developed Number of Legislation/ Regulations reviewed Actual Performance against Target Target Actual Reason for Variance Policy workshop rescheduled 12 4 No signed policies to be monitored 1 0 No new Legislation was proposed 4 1 Capacity constraints To coordinate the development of Provincial Legislation / Regulations Number of Legislation compliance monitored To facilitate all intergovernmental relations Number of reports regarding intergovernmental relations

40 Measurable Objective To provide effective and efficient administrative and secretarial support to EMT BMT and SMT To provide effective, efficient and qualitative legal services Communications and ICT To communicate Departmental information Measure/Indicator Number of EMT meetings organised Number of BMT meetings organised Number of SMT meetings organised Percentage of contracts vetted Percentage of quality legal opinions provided Percentage of cases finalised Number of media briefings organised Number of information sharing sessions Number of marketing events Actual Performance against Target Target Actual Reason for Variance 14 8 Regular interaction with senior managers through one-one interventions 4 1 Regular interaction with senior managers through one-one interventions Regular interaction with senior managers through one-one interventions 100% 100%(125) - 100% 100%(83) - 100% 13%(19) Dependent on DOJ &CD processes and also pending finalisation of audit on outstanding litigation matters To build sound relations with key stakeholders and ensure structured interaction with the Department Resource centre Number of printed and electronic items Number of broad stakeholder engagement meetings initiated for the MEC and senior management

41 Measurable Objective To build sound relations with key stakeholders and ensure structured interaction with the Department To provide Inter- Governmental and Inter-Departmental liaison services to the Department To provide Inter- Governmental and Inter-Departmental liaison services to the Department To provide reputation management services to DID To establish strategic partnerships and campaigns with the corporate world To establish strategic partnerships and campaigns with the corporate world To provide community liaison and capacitating services Measure/Indicator Number of one-onone interfaces with stakeholder reps MEC s Outreach Programmes Number of Info exchange sessions Number of Cabinet Izimbizo participated in organising Number of regional liaison meetings held Number of reputation driver reports produced Number of Integrity Commissioner reports analysed Number of partnership projects initiated or concluded Number of joint campaigns initiated or concluded Number of strategic partnership meetings held Number of MECs Business Breakfast Meetings Number of CBO/ DID liaison and capacitating meetings held Actual Performance against Target Target Actual Reason for Variance Insufficient project budget allocation 4 3 No additional cabinet Izimbizo were held 6 5 Rescheduling of the meeting 2 1 Capacity constraints 1 0 Capacity constraints

42 Measurable Objective To provide community liaison and capacitating services To provide community liaison and capacitating services To maintain regular contact with reps of targeted groups (youth, women and people with disabilities and SMMEs) and facilitate sector development To provide well developed ICT infrastructure and support services. To provide logistical services To provide sound ICT governance and advanced technology Provision of good management and sound maintenance of information systems Provision of cutting-edge telecommunication infrastructure Measure/Indicator Number of regional service delivery forums attended Number of social facilitation meetings held and reports produced Number of MECs and HODs meeting with SMMEs Number of meetings with targeted groups Percentage of reliable ICT infrastructure and prompt services Percentage customer satisfaction Percentage of conformity to industry standards Percentage of ROI and TCO Percentage conformance to industry standards Actual Performance against Target Target Actual 95% availability and reliability 75% customer satisfaction 80% conformance to industry standards 90% ROI and 75% reduced TCO Reason for Variance 12 6 No additional service delivery forums scheduled Construction projects put on hold impacted on social facilitation meetings % availability and reliability 80% conformance to industry standards 90% ROI and 75% reduced TCO 50% DID embarked on reengineering the SCM processes which caused some delays in respect of procurement 80% 65% DID embarked on reengineering the SCM processes which caused some delays in respect of procurement

43 Measurable Objective Deploy and implement ICT Governance framework To do ICT asset verification and asset management Measure/Indicator Percentage implementation ITIL or CorbiT Asset verification and compilation of asset register Actual Performance against Target Target Actual Reason for Variance 60% 25% Insufficient project budget 70% 55% Delay in finalisation of system requirement Deployment of a Data Centre Strengthening of network infrastructure To deploy kiosks to outside staff Effective lease or rental Effective licensing Implementation of Data Centre Fortification network infrastructure Accessible kiosks infrastructure Cost effective leasing or rental Cost effective licensing 70% 35% DID embarked on reengineering the SCM processes which caused some delays in respect of procurement 80% 65% DID embarked on reengineering the SCM processes which caused some delays in respect of procurement 60% 25% Technical opinion on alternative use of the existing equipment for the kiosk environment had to be concluded 80% 55% Needs analysis on printing solution framework had to be concluded before the Department could lease or rent the machines 80% 60% Pending finalisation of license issue from Microsoft Human Resource Management To facilitate training and development programmes Number of people trained and developed

44 Measurable Objective To manage the Performance Management Development Systems (PMDS) To ensure implementation of the organisational structure To develop a comprehensive HR Strategy that will focus on all areas of Human Resources within the Department, including the achievement of EE Targets, Performance Management, Employee Wellness and Sound LR To implement the Employment Equity Plan To implement the Employment Equity Plan To develop programme of action to extend the Employment Equity Targets to include Military Veterans in accordance with Provincial Targets Measure/Indicator Percentage of employees appraised Percentage of vacant posts filled A comprehensive HR Strategy developed and implemented Percentage of women in senior management Percentage of people with disabilities Programme of action to extend the Employment Equity Targets to include Military Veterans in accordance with Provincial Targets Actual Performance against Target Target Actual Strategy developed and implemented Programme of Action finalised and approved Reason for Variance 90% 34% Lack of training. The Department has embarked on the process of training all SMS members on PMDS 100% 26% Moratorium on filling of vacant posts. Only critical posts were advertised during the year under review Draft HR strategy Limited internal capacity 40% 1.1% Delay in appointments due to limited SMS posts 2,5% 0% Lack of interest on posts advertised by the targeted group Programme of Action not finalised and approved Limited guidelines in place for recruitment of Military Veterans 42

45 Measurable Objective To implement an integrated health and wellness programme To ensure labour peace and stability Measure/Indicator Percentage of employees & family members reached through EHWP interventions within the service delivery timeframes attended to Percentage compliance with collective agreements and statutory laws Actual Performance against Target Target Actual Reason for Variance 60% 66% - 80% 49% Delay in implementation of certain resolutions such as no work and no pay resolution due to compliance with relevant Legislation Case management 80% 37% Dependant on external parties as well as GPSSBC for dispute resolution Collective bargaining 80% 50% Delay in implementation of certain resolutions such as no work and no pay resolution due to compliance with relevant Legislation Finance and Budget Management To compile annual financial statements To compile budget statements An annual financial statement complying with regulatory frameworks Budget statements complying with Treasury regulations and guidelines 4 sets of annual financial statements Infrastructure plan BS 2 & 3 Prepare an adjustment budget for 2010/2011 Capturing of 2011/12 budget on BAS 4 sets of annual financial statements Infrastructure plan BS 2 & 3 An adjustment budget for 2010/2011 prepared Budget for 2011/2012 captured on BAS

46 Measurable Objective Measure/Indicator Actual Performance against Target Target Actual Reason for Variance To compile financial reports Financial reports complying with Treasury guidelines 12 In-year monitoring reports 12 In-year monitoring reports - 12 Infrastructure reporting models 12 Infrastructure reporting models - Risk Management To facilitate the management of risks by performing comprehensive Fraud Prevention and Risk Awareness Campaign, Risk Assessments, Internal Inspection and Investigations Number of Fraud Prevention and Risk Awareness Campaign Number of Risk Assessments conducted as per the set target Number of internal inspections conducted as per the set target Percentage of investigations conducted One (1) Annual Fraud Prevention and Risk Awareness Campaign 3 phase Risk Assessment Process 60% of investigations conducted One (1) Annual Fraud Prevention and Risk Awareness Campaign 3 phase Risk Assessment Process completed % of investigations concluded

47 Measurable Objective Measure/Indicator Supply Chain Management To procure goods Percentage BBBEE and services expenditure according to BBBEE targets To develop Programme of Action to extend the Procurement BBBEE Targets to include Military Veterans in accordance with Provincial targets Programme of Action to extend the Procurement BBBEE Targets to include Military Veterans in accordance with Provincial targets Actual Performance against Target Target Actual Reason for Variance 70% spent on HDI 96.3% spent on HDI - 35% spent on women 2% spent on disability 33% spent on local labour 40% spent on women 0% spent on disability 0% spent on local labour 30% spent on youth 11.19% spent on youth A Programme of Action to extend the Procurement BBBEE Targets to include Military Veterans in accordance with Provincial targets finalised and approved A Programme of Action to extend the Procurement BBBEE targets to include Military Veterans in accordance with Provincial targets not finalised The Department has embarked on a process of developing a database that list the category and that projects will be allocated to such entities and MOU s have been signed with these targeted groups to advertise on their databases Pending finalisation of measurement template on local labour procurement. The Department is currently in the process of expediting the development and implementation of the template for local labour and a procurement policy that promote this objective No award to youth owned companies during the first two quarters of the year due to limited response by the youth owned companies A draft strategy pertaining to the inclusion of Military Veterans. The Department is finalising the policy for the inclusion of Military Veterans in the Procurement Framework - 45

48 Programme 2 : Infrastructure Development/Public Works Purpose Programme two aims to ensure implementation of all GPG CAPEX projects through the provision, maintenance and refurbishment of social infrastructure. It includes ensuring that the infrastructure industry operates professionally and is inclusive of all previously disadvantaged people such as women, youth and people with disabilities. The programme also ensures that infrastructure development is designed to support economic growth and investment within a framework that benefits the poor and underprivileged in the Province. Strategic Objectives of the programme Provision and maintenance of public infrastructure to promote development of the less developed parts of the Province and redress economic disparities Expand infrastructure facilities to keep abreast of the growing demand for infrastructure and serve socio-economic ends Service Delivery Objectives and Indicators Capital Works Measurable Objective Measure/ Indicator Actual Performance against Target Target Actual Reason for Variance Planning Planning of capital socio-economic infrastructure Number of Social Development infrastructure planned Social Development New: 2 Upgrade: 1 Social Development New: 0 Upgrade: 0 New projects (2) placed on hold by client Department after projects awarded Upgrade project awarded and to proceed with implementation in the new financial year Number of DARD infrastructure planned DARD New: 3 DARD New: 0 Delays in confirmation of budget by the client Department Upgrade: 1 Upgrade: 2 46

49 Measurable Objective Planning of capital socio-economic infrastructure Measure/ Indicator Number of Education infrastructure planned Number of Health infrastructure planned Actual Performance against Target Target Actual Education Education New: 12 New: 1 Septic Tanks: 11 Septic Tanks: 0 Palisade: 99 Palisade: 0 Restorative Upgrade: 123 Restorative Upgrade: 0 Upgrade: 3 Upgrade: 0 Grade R s: 30 Grade R s: 0 Reason for Variance During the course of the financial year DID and GDE agreed that funds be re-allocated to the latter for other urgent projects DID also embarked on re-engineering the SCM processes which caused some delays in respect of procurement EMS: 4 EMS: 0 Delay in confirmation of budget by client Department, none received to date Electro Mechanical: 3 Electro Mechanical: 1 Delay in confirmation of budget by client Department Planning of capital socio-economic infrastructure Construction To complete Health s projects Number of DID infrastructure planned Number of Health projects EPWP: 5 EPWP: 1 Ongoing consultation with stakeholder DID Upgrade: 3 DID Upgrade: 1 1 DID project had been completed while it has emerged that the other two are not actually DID projects and are DRT projects 2 0 DID embarked on reengineering the SCM processes which caused some delays in respect of procurement EMS

50 Measurable Objective To complete Education s projects (GDE) To complete Social Development s projects To complete DARD projects To complete (other) SRAC projects To complete EPWP projects To empower women, youth and people with disabilities in construction Professional Services Ensuring adherence to Occupational Health and Safety Act in all construction sites Measure/ Indicator Number of Education projects Fencing of schools Number of Social Development projects Number of DARD projects Number of other (SRAC) projects Number of EPWP projects Percentage of women empowered Percentage of youth empowered Percentage of people with disabilities empowered Percentage of construction sites complying with the OHS Act Actual Performance against Target Target Actual Reason for Variance Delay also due to termination and new appointment process of service provider due to poor performance During the course of the financial year DID and GDE agreed that funds be re-allocated to the latter for other urgent projects. 1 0 Poor performance by the contractor. The contractor was cancelled and the Department is in the process of appointing new contractor to conclude the outstanding work 5 0 Delays in confirmation of budget by client Department Project was 98% complete as at end of financial year and is to be completed in the new financial year 35% Reported for in the EPWP figures 30% Reported for in the EPWP figures 2% Reported for in the EPWP figures 95% 95% - 48

51 Measurable Objective Achievement of planned quality standards Measure/ Indicator Percentage of projects within acceptable built quality Review and development of standard specifications Review fee accounts Actual Performance against Target Target Actual Reason for Variance 90% 90% % 50% - Achievement of planned quality standards Development of documentation for internal professional work Review and approval of final accounts 100% 60% Limited software system required for engineers and architects. Software to be purchased in the next financial year 90% 90% - Maintenance Measurable Objective To maintain Government fixed assets To redress economic disparities To empower women Measure/Indicator Number of Government buildings maintained Number of maintenance jobs availed for co-ops Percentage of maintenance jobs availed for women Actual Performance against Target Target Actual Reason for Variance 120 Health facilities 120 Health facilities - 33 Social 33 Social Development - Development facilities facilities 8 DARD facilities 8 DARD facilities - 27 Infrastructure Development facilities 27 Infrastructure Development facilities 5 1 DID embarked on reengineering the SCM processes to align its policy with the cooperative approach 25% 16% DID embarked on reengineering the SCM processes which caused some delays in respect of procurement - 49

52 Measurable Objective To empower youth To empower people with disabilities Measure/Indicator Percentage of maintenance jobs availed for youth Percentage of maintenance jobs availed for people with disabilities Actual Performance against Target Reason for Variance Target Actual 10% 11% - 2% 0,4% The Department embarked on a process of developing a database that lists the category in an effort to ensure that projects are allocated to such organisations Programme 3: Property Management Purpose Property Management is responsible for the provisioning of accommodation within as well as outside of the CBD precinct area for all Provincial Departments. The Programme further aims at managing the Provincial property portfolio for the optimum benefit of all concerned. It provides facilities for all Provincial Departments to be able to render service to communities and involves the efficient management of properties and facilities owned or leased by the Department. Strategic Objectives of the programme Expand infrastructure facilities to keep abreast of the growing demand for infrastructure and serve socio-economic ends Enhance the coordination of infrastructure construction across the Province Service Delivery Objectives and Indicators Measurable Objective GIAM Verification of properties Valuation of properties Vesting of Provincial properties Measure/ Indicator Number of verified properties Number of valued properties Number of vested properties Actual Performance against Target Target 2000 of properties 2000 of properties 544 applications submitted to the PSLDC Actual Reason for Variance 900 MRR properties Limited funding 456 applications submitted to the PSLDC 0 Limited funding Unscheduled PSLDC sittings and certain properties already vested 50

53 Measurable Objective To effectively manage client relations for the property portfolio To effectively manage client relations for the property portfolio To prepare Asset Management Plans To ensure speedy coordination of all unsolicited proposals Measure/ Indicator Number of clients visited Number of client survey conducted Number of GIAMA forums held DID C-AMP completed Number of U-AMPS completed Effective and efficient management of unsolicited proposals Actual Performance against Target Target 11 client Departments visited Actual 11 client Departments visited Reason for Variance 3 client surveys 2 client surveys Identified need to put on hold further survey pending the development of an action plan based on the challenges from the first two surveys 3 GIAMA forums 3 GIAMA forums held 1 C-AMP completed 11 U-AMPS completed All schemes/ proposals processed and submitted to DLG Draft C-AMP completed 10 U-AMPS completed All schemes/ proposals processed and submitted to DLG Treasury granted extension to end of May Delay in gathering information from client Department due to the split and merge of five client Departments Non submission of information by DLG&H To ensure that the Asset Register is 100% efficiently and effectively maintained Maintained Asset Register 50% of maintained Asset Register 45% GPG Delay due to ExCo decision in October for client Departments to start consolidation of their own Asset Register for submission to DID. Further DID communicated in writing to client Departments to submit their Asset Register DID Asset Register 100% complete - 51

54 Measurable Objective Security Management Manage physical security functions within the Department Measure/ Indicator Uniform key control system within each Head Office building Managed guarding services at all sites Actual Performance against Target Target Uniform key control system at Corner House building Managed guarding services at all sites Actual None Guarding services at all sites managed Reason for Variance Insufficient project budget - Manage physical security functions within the Department Implementation of MISS Implementation of MISS Percentage of installed security systems Percentage of maintained security system Percentage of vetted security service providers with long term tender Percentage of vetted officials within service providers with long term tender Percentage of MISS awareness sessions conducted Established Security Committee Percentage of maintenance of encryption equipment Threat and risk assessment reports Install 50% of security system at two regional offices 100% of installed security system managed 100% of all service providers vetted Install 50% of security system at one regional office (Bloed Street) 100% of installed security system managed 41% of all service providers vetted Project re-prioritisation Late engagement of SSA to vet all service providers 75% of all officials 30% of all officials Resistance and lack of cooperation by officials to be vetted 50% of all staff at regional offices Security Committee established 0% of all staff at regional offices None 100% maintenance 100% maintenance of encryption equipment Conduct threat and risk assessments at all sites Conduct threat and risk assessments at 9 sites Project re-prioritisation Capacity constraints Capacity constraints

55 Measurable Objective Measure/ Indicator Actual Performance against Target Target Actual Reason for Variance Security risk and threat management An approved Emergency Plan An approved Emergency Plan None Capacity constraints Compliance to OHS Act Number of successful emergency drills 1 successful emergency drill at each Head Office building 0 Insufficient project budget Number of safety officers and fire marshals per building 1 safety officer and fire marshal at each floor at each Head Office 3 safety officers at Head Office Capacity constraints Technical Support To provide inspection on buildings to ensure compliance Percentage compliance with OHSA 30% compliance with OHSA 25% compliance with OHSA Capacity constraints Percentage compliance with building regulations 30% compliance with building regulations 25% compliance with building regulations Capacity constraints To render energy saving mechanisms Reduction of energy consumption 30% reduction of energy consumption 0% Change of approach in dealing with energy and water reduction project. Initial approach of multiple services has been abandoned, the Department will make use of service provider appointed by ESKOM to undertake the energy and water reduction project To render water saving mechanisms Reduction of water consumption 30% reduction of water consumption 0% Change of approach in dealing with energy and water reduction project. Initial approach of multiple services has been abandoned, the Department will make use of service provider appointed by ESKOM to undertake the energy and water reduction project 53

56 Measurable Objective Measure/ Indicator Actual Performance against Target Target Property Development (Leases, Rates and Taxes) To implement effective revenue management system Provide Facilities and Property Management Services for buildings in Precinct To effectively administer leases To effectively administer leases for hired buildings Figures of revenue collected Payments of rates and taxes to Municipalities Ensure building function well through the provision of facilities and property management Number of signed leases Signed commercial leases Actual Reason for Variance R10 M R11,3 M - R191M ( An additional amount of R103 M was granted to the Department during Adjustment budget) Utilities Management of 8 vacant and shared Precinct buildings 180 signed leases: 120 residential and 60 vacant land R211 M Utilities Management of 8 vacant and shared Precinct buildings 134 residential leases 62 valid/ completed leases & 72 partially signed lease agreements Delayed or nonsubmission of billing schedule by Municipalities 134 lease agreements were signed. However, 72 lease agreements do not have all the supporting documents and the Directorate is following up with the lessee 1 vacant land lease Lack of interest from the public to rent vacant land signed lease agreements No space requisition and no DAC approval received from client Departments - To effectively administer precinct leases for hired buildings Signed precinct commercial leases Management of lease agreements with owners of 7 privately owned buildings Management of lease agreements with owners of 7 privately owned buildings - 54

57 Measurable Objective Measure/ Indicator Precinct, Facilities Management To conduct space planning exercise for GPG properties Provide Facilities Management Services for all property categories Number/Percentage of assessment planning exercise for GPG properties Ensure building function well through the provision of facilities and property management Actual Performance against Target Target Conduct space assessment, management exercises with the view of the migration relocation of DID/ DLGH to new premises Facilities management of Precinct, Provincial including regional properties Precinct : 10 Actual 1 GPG building. DID occupancy 50% Facilities management of Precinct, Provincial including regional properties Precinct : 10 Reason for Variance No alternative accommodation could be found for the DLG&H DID to continue to arrange for alternative accommodation for the remaining staff of DLG&H - Provide Facilities Management Services for all property categories Ensure building function well through the provision of facilities and property management Commercial :10 Regional Offices: 0 Condition assessment Residential: 50 Maintenance Residential: 0 Commercial:0 Regional Offices: 0 Condition assessment Residential: 0 Maintenance Residential: 0 Insufficient project budget Insufficient project budget - Regional Offices: 0 Regional Offices: 0 Vacant land: On request Vacant land: On request 55

58 Programme 4: Expanded Public Works Programme Purpose The Expanded Public Works Program (EPWP) facilitates the implementation of multi-sectoral community based projects across the Province whereby particularly youth, women and people with disabilities are provided with relevant training and productive employment opportunities such that skills and enterprises are developed and sustained, infrastructure is developed and maintained, and local economies enhanced. It focuses on drawing significant numbers of the unemployed into productive work through Public Works Programs, in a manner where they gain skills while being employed. The EPWP is a Nation-wide programme which will draw significant numbers of the unemployed into productive work particularly women (40%), youth (30%) and people with disabilities (2%), so that workers gain skills, while they work, and increase their capacity to earn income. Further the programme focus on addressing the previously marginalised community through engagement with communities and local Municipalities in areas where projects will be implemented. This will ensure sustainability of projects. The programme also provides a platform for two-way dialogue between Government and people since communities are consulted prior to implementation of a project. Strategic Objective of the programme Implement and coordinate Expanded Public Works Programme (EPWP) in a manner that enhances skills development and optimises decent employment Service Delivery Objectives and Indicators Measurable Objective To ensure implementation of community-based programmes To ensure EPWP compliance in all four sectors To provide employment opportunities To provide employment opportunities to the youth To provide employment opportunities to the women Measure/ Indicator Number of community- based programme implemented Number of sectors coordinated Number of people employed Number of employment days created Number of youth employed Number of women employed Actual Performance against Target Reason for Variance Target Actual (monitor implementation of projects) Provided EPWP support to 8 Municipalities Women are often reluctant to participate in EPWP projects as this will cause them to forfeit the social grant - 56

59 Measurable Objective To provide employment opportunities to the people with disabilities To evaluate the sustainability of empowerment projects To capacitate the unemployed with skills To empower emerging contractors To facilitate participation in the Contractor Incubator Programme Measure/ Indicator Number of people with disabilities employed Number of employment impact assessments completed Number of temporary jobs created Number of people to be trained Number of contractors trained Percentage of women involved in the Contractor Incubator Programme Percentage of youth involved in the Contractor Incubator Programme Percentage of people with disabilities involved in the Contractor Incubator Programme Actual Performance against Target Reason for Variance Target Actual People with disabilities are often reluctant to participate in EPWP projects since the social grant is higher than the EPWP wage rate 4 0 Currently implementing recommendation of previous study, which raises issues of quality of training and sustainability of jobs Current strategy includes: multi-skilling and alignment of skills to the labour market In the process of sourcing and appointing service provider authorised and registered with relevant regulatory bodies contractors offered opportunities to participate in EPWP projects 20% 0% Development of the CIP implementation strategy which will be rolled out in the next financial year 10% 0% Development of the CIP implementation strategy which will be rolled out in the next financial year 2% 0% Development of the CIP implementation strategy which will be rolled out in the next financial year - 57

60 58

61 Section 3 Annual Financial Statements 59

62 Section 3. ANNUAL FINANCIAL STATEMENTS Report of the Audit Committee Report of the Accounting Officer Report of the Auditor General Appropriation Statement Notes to the Appropriation Statement Statement of Financial Performance Statement of Financial Position Statement of Changes in Net Assets Cash Flow Statement Notes to the Annual Financial Statements (including Accounting policies) Disclosures Notes to the Annual Financial Statements Annexures

63 REPORT OF THE AUDIT COMMITTEE FOR THE YEAR ENDED 31 MARCH 2011 GAUTENG PROVINCIAL GOVERNMENT Report of the Audit Committee Cluster 04 Infrastructure Development We are pleased to present our report for the financial year ended 31 March 2011 Audit Committee and Attendance: Non-Executive Members: The Audit Committee consists of three external members listed hereunder and is required to meet a minimum of at least four times per annum as per provisions of the Public Finance Management Act (PFMA). In terms of the approved Terms of Reference (GPG Audit Committee Charter), five meetings were held during the current year, i.e. three meetings for Quarterly Performance Reporting (financial and non-financial) and two meetings to review and discuss the Annual Financial Statements and the Auditor General Report. Name of Member Number of Meetings Attended Cleopas Sanangura (Chairperson) 03 Lorraine Francois (Member) 05 Sedzani Mudau (Member) 04 Executive Members: In terms of the GPG Audit Committee Charter, the Officials listed hereunder are obliged to attend the meetings of the Audit Committee: Compulsory Attendees Number of Meetings Attended Maggie Modipa (Head of Department) 05 Jacoba Van Antwerpen (Chief Financial Officer) 05 Rhulani Phelembe (Chief Risk Officer) 05 The Audit Committee noted that the (Head of Department/ Chief Financial Officer / Chief Risk Officer) attended all the meetings. Therefore, the Audit Committee is satisfied that the Department adhered to the provisions of the GPG Audit Committee Charter. Audit Committee Responsibility The Audit Committee reports that it has complied with its responsibilities arising from section 38 (1) (a) of the PFMA and Treasury Regulation The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with this Charter and has discharged all its responsibilities as contained therein. The Effectiveness of Internal Control The system of internal control applied by the Department over financial risk and risk management is effective, efficient and transparent but still needs to improve. In line with the PFMA and the King III Report on Corporate Governance requirements, Internal Audit provides the Audit Committee and Management with assurance that the internal controls are appropriate and effective. This is achieved by 61

64 REPORT OF THE AUDIT COMMITTEE FOR THE YEAR ENDED 31 MARCH 2011 means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. From the various reports of the Internal Auditors, the Audit Report on the Annual Financial Statements and the Management Report of the Auditor-General, it was noted that matters were reported indicating any material deficiencies in the system of internal control or any deviations therefrom. Accordingly, we can report that the system of internal control for the period under review was efficient and effective. The quality of in year management and monthly / quarterly reports submitted in terms of the PFMA and the Division of Revenue Act The Audit Committee is satisfied with the content and quality of monthly and quarterly reports prepared and issued by the Accounting Officer of the Department during the year under review. It was however noted that salaries and learnership expenses accounts were not properly disclosed. While it is immaterial it is important to categorize votes for management reporting purposes. Evaluation of Financial Statements The Audit Committee has: reviewed and discussed with the Auditor-General and the Accounting Officer the audited Annual Financial Statements to be included in the Annual Report; reviewed the Auditor-General s management report and management s response thereto; reviewed changes in accounting policies and practices; reviewed the Departments compliance with legal and regulatory provisions; and reviewed significant adjustments resulting from the audit. The Audit Committee concurs and accepts the Auditor-General s conclusions on the Annual Financial Statements, and is of the opinion that the audited Annual Financial Statements be accepted and read together with the report of the Auditor-General. Internal Audit The Audit Committee is satisfied that the internal audit function is operating effectively and that it has addressed the risks pertinent to the Department in its audit, however the Audit Committee is concerned with the number of audits that have been either cancelled or postponed due to unavailability of resources. Forensic Investigations The Audit Committee is not satisfied that the forensic investigations are properly reported with age-analysis of all reported issues indicated. The Forensic unit has not been effective during the year until the appointment of the Chief Risk Officer who is still establishing his Department and projects to work on. One-on-One with the Accounting Officer The Audit Committee has met with the Accounting Officer for the Department to ensure that there are not unresolved issues. Auditor-General South Africa The Audit Committee has met with the Auditor-General South Africa to ensure that there are not unresolved issues Dr Cleopas Sanangura Chairperson of the Audit Committee 62

65 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 Report by the Accounting Officer to the Executive Authority and Gauteng Provincial Legislature of the Republic of South Africa. 1. General review of the state of financial affairs The overall goal and purpose of the Gauteng Department of Infrastructure Development is to develop and maintain socio economic infrastructural conditions that allow all the people of Gauteng province to actively participate in economic and social life. Vision of the Department To be a leading infrastructure provider and facilitator that positions Gauteng as a globally competitive city region with a sustainable and growing economy. Mission of the Department To facilitate service delivery through the development, construction and management of public infrastructure so as to optimise the creation of decent jobs and the promotion of a better life for all. Important policy decisions and strategic issues facing the Department After the April 2009 National elections, the Provincial priorities changed. This therefore resulted in a review of the strategic imperatives within the Department, to ensure that these were aligned with the changed Provincial priorities. There is heightened focus on outcomes based monitoring and evaluation. This ensures the efficiency of resources deployed and avoids the misalignment of resource deployment and strategic thrust. The Monitoring and Evaluation unit was established to specifically ensure implementation of the above. To bridge the gap between the first and second economy, create jobs and reduce poverty, the Department has: continued with the implementation of projects in areas within the 20 Prioritised Townships Programme through the EPWP; and increased the participation of Construction Industry Development Board (CIDB) level 1 to 4 contractors in infrastructure projects as part of the contractor development programme. To enhance service delivery and contribute to the re-organisation of the state, the Department has: strategically redeveloped and rebranded provincial facilities providing a higher level of service for minor work and maintenance; implemented the Government Immovable Asset Management Act of 2007 (GIAMA) to maintain cost effectiveness, efficiency and uniformity in the management of immovable assets; 63

66 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 implemented the revised Regional Facilities Management Master plan on space management and specific buildings of client Departments; implemented a project to review the supply chain management processes within the Department to ensure efficient and effective procurement processes; implemented a project to verify the existence of employees of the Department; and migration of staff from various buildings to a centralised head office has been initiated and not yet finalised due to space constraints within the Province. Significant events during the year During November 2010 the Member of Executive Council was changed as per the executive decisions made in the Province. Major Projects undertaken or completed during the year Information on projects undertaken and those that were completed in the year under review is discussed in detail in the performance report. The Department is responsible for managing projects on behalf of client Departments, and the costs of these projects are recoverable from those Departments and are thus no listed here. The Department undertook a few major administrative projects to ensure administration is managed appropriately and processes are being streamlined to enhance service delivery. The Supply Chain Management re-engineering project was initiated to streamline procurement processes within the Department and to eradicate irregular expenditure. Verification of employees project was also undertaken during the year. Spending Trends The adjusted appropriation for the Department for 2010/11 amounted to R The increase between the main appropriation and the adjusted appropriation relates to additional funding that was received in respect of the Devolution of Rates and Taxes grant as well as compensation of employees. The total grant received amounted to R Earmarked funding relating to the Expanded Public Works Programme amounted to R During the financial year spending in respect of Departmental projects had to be slowed down to ensure that sufficient funds are available for payment of compensation of employees. After the split of the erstwhile Department of Public Transport, Roads and Works, the Department has not been resourced appropriately taking into consideration the absorption of the trading accounts into the Department. The cost relating to the compensation of employees of the entities amounted to approximately R Further to this, the cost related to compensation of employees for property management was not budgeted for as the proposal at the end of the 2009/10 financial year was that a Property Management Agency would be established. This necessitated the reprioritisation of expenditure to enable the Department to compensate employees. 64

67 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 Current Year Expenditure Programme Main Appropriation Adjustment Budget Expenditure to date Balance % spent R 000 R 000 R 000 R 000 % Administration 126, ,796 98,493 28,303 78% Public Works 868, , ,604 43,638 96% EPWP 209, , ,098 74,902 64% Total 1,204,239 1,314,038 1,167, ,843 89% Reasons for over/under spending Programme 1: Administration The under spending was mainly as a result of the fact that the Department did not have a full administrative function for the year under review. The Department has not yet procured the relevant information technology infrastructure and other related services within programme 1 due to the migration process not yet finalised. Service delivery within the Department was impacted on negatively due to some administration processes not functioning adequately. This will be addressed during 2011/12. Programme 2: Public Works The underspending in Programme 2 mainly consists of unspent conditional grant funding in respect of the Devolution of Rates and Taxes grant. The under spending of R within Programme 2 consists of an under spend of R in respect of the conditional grant for Municipal rates and taxes due to the claims received from Municipalities not being equal to the amounts requested originally by Municipalities. Payments in respect of this grant is only made on verified properties. Overspending of R within Programme 2 relates to compensation of employees for property management. Overspending of R relates to accruals of 2009/10 and commitments made in previous years that had to be honoured during this financial year regarding services rendered. Service delivery was slower as funding for goods and services had to be allocated to fund compensation of employees relating to employees of entities that had to be absorbed and paid by the Department Programme 3: Community Based Programmes The under spend was mainly as a result of the slow start of key projects within the Department and by client Departments. The under spend was mainly as a result of the slow start of key projects within the Department. During the financial year the Department requested Treasury to shift funds from Programme 3 to Programme 2 to fund the compensation of employees within Property Management, but the request was denied. 65

68 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 Fruitless expenditure Fruitless expenditure amounting to R has been recorded during the 2010/11 financial year. This is mainly as a result of interest paid on invoices not paid within 30 days. An improvement in respect of payment processes has been achieved if compared with the amount disclosed in the previous financial year. Based on the fact that the client Departments did not always pay on time, a further R was incurred on behalf of the Department of Health and Social Development and R has been incurred in respect of the Department of Education. Infrastructure funding is being ring-fenced by Treasury to ensure capital expenditure be funded appropriately and payment processes are improved. This resulted in a decrease of accruals. 2. Service rendered by the Department 2.1 The following services are rendered by the Department: Service Delivery of public infrastructure (capital works and maintenance works) Plan and co-ordinate the implementation of EPWP by all Provincial Departments Level and quality of service Effective and efficient infrastructure planning, construction and maintenance (including generic model development) The quality of service will include adherence to planned time, cost and quality indicators, adherence to minimum maintenance standards and 100% statutory compliance Establishment of an appropriate centralised coordination and management structure to ensure speedy, good-quality service delivery Up scaling of EPWP in the roads sector Application of EPWP principles in all infrastructure projects Maintenance of public infrastructure, including buildings Provision of accommodation Providing functional, safe, secure office accommodation for nine Gauteng Provincial Government line Departments. Provision of accessible infrastructure and buildings to all citizens of the Province The Department is responsible for the promotion of access to public buildings of persons with disabilities and compliance to OHSA 2.2 Tariff policy The market related rentals are being implemented with all new lease agreements being signed. This is an ongoing process together with the Door-to-Door verification process. Other tariffs were reviewed on an individual basis from time to time. 2.3 Free Services The Department rendered no free services. 66

69 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH Capacity constraints The Department experienced capacity constraints within the administration function during the financial year due to the split of the Department of Public Transport, Roads and Works into Department of Infrastructure Development and the Department of Roads and Transport. Administration staff was split to capacitate both the Departments. A Provincial moratorium was placed on the filling of vacant posts due to the Provincial reconfiguration that took place after the National elections in April The Department initiated a process of reviewing the organisational structure to ensure the structure addresses the functions the Department has to perform within the Province. Consultation processes have been continuous with organised labour. During the latter part of the financial year the Department initiated the process of advertising critical positions to capacitate the Department appropriately. At the time of this report, the Department is still continuing filling positions to address the capacity, both administratively and within the implementation branches. A number of critical posts remain vacant at the date of this report, and it will be a priority in the new financial year to ensure that these posts are filled. The Department continues to experience challenges with the unavailability of professional staff in the engineering and technical fields. The Department embarked on a long-term strategy to sensitise and assist learners in the technical fields, also through learnerships and internships, to address this challenge. The following is a summary of major challenges facing the Department: Project management capacity that is not sufficient in the Department; Competing for scarce skills is a National phenomenon; Procurement challenges were experienced during the 2010/11 financial year; Scarce skills required in the construction industry is inadequate and Organisational realignment of priorities to be implemented; The impact of the capacity constraints does affect service delivery with regards to efficient implementation of projects and administrative functions. In respect of the scarce skills related to project management and core professions related to the construction industry, causes a dependence on the services of professional consultants. This could result in projects being more expensive than what it should be if the Department had the relevant skills employed as officials within the Department. 4. Utilisation of donor funds The Department has received no donor funds from third parties during the 2010/11 Financial Year. 5. Trading entities and public entities During the 2010/11 financial year, the Department had no trading entities as the decision to close the trading accounts was taken during 2009/10. The closure of the trading accounts of the Department still had a severe impact 67

70 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 on the Department as various commitments had to be honoured. The three trading accounts that were closed during 2009/10 were as follows: Kopanong Precinct Impophoma Infrastructure Support Entity Emoyeni Conference Centre The transfer of the functions of the trading accounts is disclosed in the financial statements. The assets and liabilities of the activities were absorbed by the Department and have been recorded as such. Section 42 transfers of assets and liabilities were done to ensure that all assets of the entities have been absorbed in the asset register of the Department. Equally all liabilities of the entities were transferred to the Department. The operations of the entities did not continue during the 2010/11 financial year, but was performed by the Department. 6. Organisations to whom transfer payments have been made Transfer payments were made to Municipalities in respect of the Devolution of Rates and Taxes grant received from the National Department of Public Works. Payments in terms of the conditional grant are governed by the Division of Revenue Act. An amount of R was transferred to Kopanong Precinct as disclosed in Annexure 1 C. The invoices already submitted to the entity had to be processed and paid from the Department. 7. Public private partnerships (PPP) There are no public private partnerships for the period under review. 8. Corporate governance arrangements The Department of Infrastructure Development follows a corporate governance framework as governed and instructed by the PFMA, section 38 and section 40. This governs the actions of an Accounting Officer and that of an official within the Department. The Department is also guided by the principles of the King III report, which provides principles in respect of corporate governance. The Department is further guided by the Prevention and Combating of Corrupt Activities Act, Promotion of Administrative Justice Act and all other acts guiding corporate governance principles. The following principles of corporate governance are being instilled within the Department in that the Department s senior management aim to: Discipline: behave in accordance with universal, acknowledged, accepted and Government specific principles. Transparency: ensure that all transactions are fair and transparent regarding all parties involved. Independence: ensure that there are mechanisms in place to ensure that all actions of management are free from prejudice and are always of such a nature that the principles of Governance are uphold. Accountability: instil a culture where not only senior managers are accountable for their actions, but that all employees are always aware that they are accountable for their decisions and actions. All employees will remain accountable to the Department and to management for decisions taken. 68

71 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 Responsibility: have processes in place to ensure that corrective action is taken against any official that transgresses the rules and regulations of Government. Fairness: ensure that systems that exist within the Department are fair and transparent. The rights of all parties that are transacted and engaged with will always be respected. Social Responsibility: always be aware of all critical social issues and will always prioritise those issues and uphold ethical standards of Government as a whole. The Risk Management approach is to establish and maintain appropriate systems and processes to ensure the effective and efficient managing of risks facing the Department. Based on the risks identified relating to the existence of the entities of the Department, all the entities were closed and the functions incorporated into the Department. Risk Management assumes responsibility for enterprise wide Risk Management through co-ordination of the identification, analysis, mitigation and monitoring of all risk facing the Department to ensure compliance to the PFMA and other related legislature. However, every employee of the Department has the responsibility to manage risks that are identified to ensure that the system of internal control is managed effectively and efficiently. The Department has an approved Fraud Prevention Plan which is aligned to the principles of the PFMA as well as Treasury Regulations. Instances of alleged fraud were identified, investigated and reported on during the current year. Further investigations were initiated to quantify and confirm alleged irregular expenditure within the Department. This process is not yet finalised to date as each instance of alleged irregular expenditure must be investigated. This process also entails investigating compliance with the code of conduct and the senior management handbook that guides actions of senior managers and officials within the Public Service. Through the risk management processes, disciplinary processes have been instituted against officials where applicable. The Department s Directorate: Risk Management also facilitates both external and internal audits to ensure compliance with the PFMA. Internal audit was functional during the 2010/11 financial year and this function is performed by the Gauteng Department of Finance: Gauteng Audit Services. The Department participated in all the Audit Committee activities that met regularly during the 2010/11 financial year. Further to the above, the governance regarding procurement processes were addressed during the 2010/11 financial year and are still ongoing. Certain reputational issues experienced by the Department are directly linked to procurement and project management. As of January 2011 a Supply Chain Management re-engineering process commenced and included a review of the procurement environment, re-alignment of the policies and procedures to be followed. This will result in improved governance regarding these processes. The Department will continue with this process during 2011/12 and will implement the Gateway model of procurement for all mission critical projects as identified. 9. Discontinued activities/activities to be discontinued The transfer of functions of the three trading entities as transferred after 2009/10 financial year has been implemented during 2010/11 financial year. The commitments, assets and liabilities of the entities have been absorbed and were honoured during 2010/11. Some of the commitments will remain commitments of the Department in the future. The transfer of the functions of the trading accounts is disclosed in the financial statements in note 32, Transfer of functions. 69

72 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH New/proposed activities No new activities have been proposed by the Department. 11. Asset management The Department engaged in an extensive process to ensure the completeness and accuracy of the asset register through verification processes in respect of the movable assets All Departmental assets were captured in the asset register and the appropriate requirements in respect of Sec 42 of the PFMA in respect of the assets transferred were complied with. The asset register complies with the minimum requirements as determined by National Treasury. In respect of immovable assets, the processes of verifying properties, buildings and land is still ongoing. Vesting of properties after verification is also still ongoing. Included in the verification process is a door-to-door exercise of verifying the property and the tenant to address revenue related issues. 12. Inventories All inventory opening and closing balances, together with movements for the year will be reflected in Annexure Events after the reporting date To the best of my knowledge, no events after reporting date have occurred that could impact on the financial position of the Department in the future. 14. Information on predetermined objectives The Department compiles a quarterly report on the actual delivery against the strategic plan. This combined with the monthly financial reports provide management and the Member of the Executive Council with information to assess the Departments performance. The performance information is included in the annual report for reference. 15. SCOPA resolutions Reference to previous audit report and SCOPA Resolutions Completeness of fruitless and wasteful expenditure could not be determined The MEC must take disciplinary action including possible charges against all officials responsible for the fruitless and wasteful expenditure Subject Fruitless and wasteful expenditure Findings on Progress The Department created a fruitless and wasteful expenditure register Payments iro interest charged are recorded appropriately in the financial system. Investigations are ongoing and disciplinary action were instituted where applicable 70

73 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 Completeness of the rental receivables could not be determined The Department should submit the property management strategy seven days subsequent to the adoption thereof Completeness of the rental receivables could not be determined The MEC must address the recording of revenue receivables for rentals as a matter of urgency Completeness of the rental receivables could not be determined A moratorium of the intention to sell these properties be issued until the MEC completes the investigation on these properties, through an independent comprehensive investigation Completeness of the Departmental immovable asset register The MEC must ensure completion of the asset register Unauthorised expenditure incurred by the Department The Department must provide the Committee with a progress report on the effectiveness of measures put in place to avoid the recurrence of the unauthorised expenditure Rental receivables Rental receivables Rental receivables Immovable assets Unauthorised expenditure Rental receivables prior to March 2010 have been written off by the Accounting Officer A door-to-door verification campaign is being implemented by the Department to confirm tenants of properties and to sign lease agreements The Property Management Strategy is in a process of review and consultation The existing accounting systems do not provide for a revenue management system A door-to-door verification campaign is being implemented by the Department to confirm tenants of properties and to sign lease agreements This campaign will further accelerate implementation of market related rentals Revenue collection has been outsourced to improve management of receivables in respect of residential leases This matter will be addressed through the process of the development / adoption of the Property Management Strategy as soon as approval has been granted The completeness of the Asset Register of the Department is a continuous process Processes have been put in place to address unauthorised expenditure by strengthening controls on expenditure. Withdrawal of the delegations of authority was also implemented during 2010/11 71

74 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 The unauthorised expenditure of R not be approved until Department provides the Committee a report on all the investigations The Department should submit the report of the forensic investigation within seven (7) days after conclusion thereof Completeness of the Departmental immovable asset register The Department should submit the property management strategy seven days subsequent to the adoption thereof Completeness of the Departmental immovable asset register The MEC must address the matter pertaining to the title deeds of Government owned properties, develop an action plan to resolve the issue and submit such plan to the Committee Payments not made within 30 days of submission of the invoice The Department must submit a progress report on the effectiveness on managing the payment of invoices Unauthorised expenditure Unauthorised expenditure Immovable Assets Immovable Assets Accruals Non compliance with Treasury Regulations The investigations were initiated and in some instances outsourced. No timeline can be attached to the finalisation of the processes The investigations were initiated and no timeline can at this stage be attached to the finalisation of the processes, however outcomes will be communicated as soon as it becomes available The Property Management Strategy is currently under review. It will be submitted once it has been adopted. Furthermore, a request for exemption has been made to the Accountant General from being audited on immovable assets The DID Asset Register will be completed by 31 st March Title deeds are part of the vesting process and will be completed by A vesting action plan is available An accrual listing was created which is updated on a daily basis with invoices received to ensure completeness. This list is reconciled on a weekly basis to ensure the Department can distinguish between payments made and accruals for that particular week or month. The Department of Finance also forwards a report of any accrual existing on SAP that needs to be resolved. Therefore, manual controls have been implemented enhanced the management of the accruals of the Department The Department is also ensuring that the accrual listing distinguishes between the accruals of the Department and that of the client Departments to ensure appropriate reporting 72

75 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 The Department must submit a progress report on payments by client Departments for projects implemented on their behalf during the year under review Non compliance with laws and regulations The Department must provide SCOPA with a progress report of measures in place to monitor adequacy on internal controls in order to avoid recurrence of non-compliance with applicable legislation in future The Department must provide SCOPA with a progress report of measures put in place and systems put in place to address the office space and IT problems Accruals Non compliance with Treasury Regulations Non compliance with laws and regulations Non compliance with laws and regulations Since September 2010, the Department of Finance assisted the Department to ensure that infrastructure funds are ring-fenced. As and when invoices are received in respect of projects, the office of the CFO creates a spreadsheet of such invoices requesting funds from the client Departments to fund such expenditure. This process assists the Department to fast track payments of projects Additional controls have been implemented to address compliance with laws and regulations. Financial controls have been implemented to address non compliance Information Technology (IT) Appropriate permission through SITA must be obtained for procurement of the server and related IT systems. The Department is consulting with the Department of Finance as well as a transversal agreement exists with all Departments Office space The Department of Local Government is busy moving out and it is foreseen that by 30 June 2011 the Corner House building will be occupied by DID staff members 16. Prior modifications to audit reports Nature of qualification, disclaimer, adverse opinion and matters of non-compliance Qualified audit opinion: Completeness of receivables. Financial year in which it first arose Progress made in clearing / resolving the matter 2009/10 The opening balance of the receivables has been written off during the year by the Accounting Officer. The Department is currently busy with a door-to-door project to verify tenants and to ensure leases are signed. The function was outsourced to enhance reporting and collection processes 73

76 REPORT OF THE ACCOUNTING OFFICER FOR THE YEAR ENDED 31 MARCH 2011 Nature of qualification, disclaimer, adverse opinion and matters of non-compliance Qualified audit opinion: Fruitless expenditure Non payment of creditors within 30 days Non compliance with Treasury Regulation 16.A.6.4. Certification of pay point certificates Financial year in which it first arose Progress made in clearing / resolving the matter 2009/10 The Department has implemented controls to manage reporting of fruitless and wasteful expenditure. Manual controls have been put in place through implementation of a fruitless expenditure register 2009/10 The implementation of the process to ring fence infrastructure funds by the Department of Finance, has improved the turnaround time on infrastructure payments. A decrease of accruals at year end indicates the progress made in terms of this issue 2009/10 Compliance to this Treasury Regulation is being monitored to ensure reporting is done as required for any such deviations The Department has implemented a Supply Chain Management re-engineering process to address the compliance of Treasury Regulation 16A6.4 as well as enhancing procurement processes of the Department. On the job training has occurred and is monitored on an ongoing basis. Skills audits have been conducted and a training plan has been developed to address the skills required. Implementation will continue during 2011/ /10 This process is being monitored, however changes within the HR structures created challenges. This will be resolved as soon as the Provincial reconfiguration process is finalised and organisational structures are appropriately implemented 17. Exemptions and deviations received from the National Treasury No exemptions and deviations were received from National Treasury 18. Approval The Annual Financial Statements set out on pages 82 to 168 have been approved by the Accounting Officer. Ms. Mapula Modipa Head of Department 31 May

77 REPORT OF THE AUDITOR-GENERAL TO THE GAUTENG PROVINCIAL LEGISLATURE ON VOTE NO. 12: GAUTENG DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT REPORT ON THE FINANCIAL STATEMENTS Introduction 1. I have audited the accompanying financial statements of the department of Infrastructure Development, which comprise the appropriation statement, the statement of financial position as at 31 March 2011, and the statement of financial performance, statement of changes in net assets and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information, as set out on pages 82 to 168. Accounting Officer s responsibility for the financial statements 2. The accounting officer is responsible for the preparation of these financial statements in accordance with Departmental Financial Reporting Framework prescribed by the National Treasury and the requirements of the Public Finance Management Act, 1999 (Act No.1 of 1999) (PFMA), and for such internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor-General s responsibility 3. As required by section 188 of the Constitution of the Republic of South Africa, 1996 and section 4 of the Public Audit Act, 2004 (Act No. 25 of 2004) (PAA), my responsibility is to express an opinion on these financial statements based on my audit. 4. I conducted my audit in accordance with International Standards on Auditing and General Notice 1111 of 2010 issued in Government Gazette of 15 December Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 6. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. 75

78 REPORT OF THE AUDITOR-GENERAL TO THE GAUTENG PROVINCIAL LEGISLATURE ON VOTE NO. 12: GAUTENG DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT Opinion 7. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Department of Infrastructure Development as at 31 March 2011, and its financial performance and cash flows for the year then ended in accordance with the Departmental Financial Reporting Framework prescribed by National Treasury and the requirements of the Public Finance Management Act, 1999 (Act No. 1 of 1999). Emphasis of matters I draw attention to the matters below. My opinion is not modified in respect of these matters: Material under spending of the budget 8. As disclosed in the appropriation statement, the department materially under spent the budget on Administration, Public Works and Expanded Public Works Programme to the amounts of R , R and R , respectively. As a consequence, the department did not fully achieve its objectives as per the three programmes. Revenue 9. As disclosed in note 2 to the financial statement, the department received an amount of R relating to rental income from rented properties. Had the department charged market related rental, approximately R more could have been billed by the department. Immovable tangible capital assets 10. As disclosed in note 31 to the financial statements, the department is in the process of updating the title deeds with the Deeds Office for all provincial government buildings under its custodianship in line with the Government Immovable Asset Management Act (GIAMA) processes. Additional matters 11. I draw attention to the matters below. My opinion is not modified in respect of these matters: Financial reporting framework 12. The financial reporting framework prescribed by the National Treasury and applied by the Department of Infrastructure Development is a compliance framework. Thus my opinion would have reflected that the financial statements had been properly prepared instead of fairly presented as required by section 20(2)(a) of the PAA, which requires me to express an opinion on the fair presentation of the financial statements of the Department of Infrastructure Development. 76

79 REPORT OF THE AUDITOR-GENERAL TO THE GAUTENG PROVINCIAL LEGISLATURE ON VOTE NO. 12: GAUTENG DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT Unaudited supplementary schedules 13. The supplementary information set out on pages 158 to 168 do not form part of the financial statements and is presented as additional information. I have not audited these schedules and, accordingly, I do not express an opinion thereon. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 14. In accordance with the PAA and in terms of General Notice 1111 of 2010, issued in Government Gazette of 15 December 2010, I include below my findings on the annual performance report as set out on pages 16 to 57 and material non-compliance with laws and regulations applicable to the Department of Infrastructure Development. Predetermined objectives Presentation of information 15. For the selected programme: Expanded Public Works Programme, there are no adequate explanations for major variances in 49% between the planned and the actual reported targets. Usefulness of information 16. The reported performance information was deficient in respect of the following criteria: Measurability: Indicators are well defined and verifiable, and targets are specific, measurable and time bound. Consistency: Objectives, indicators and targets are consistent between planning and reporting documents. 17. The following audit findings relate to the above criteria: Changes to planned objectives/indicators/targets are not approved Additional and different objectives, indicators and targets were reported on as opposed to the approved annual performance plan. These additional/different objectives, indicators and targets were not approved subsequent to the strategic planning process. Planned and reported targets were not specific and measurable For the selected programme: Property Management, 49% of the planned and reported targets were not specific in clearly identifying the nature and the required level of performance, measurable in identifying the required performance, and time bound in specifying the time period or deadline for delivery. 77

80 REPORT OF THE AUDITOR-GENERAL TO THE GAUTENG PROVINCIAL LEGISLATURE ON VOTE NO. 12: GAUTENG DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT Planned and reported indicators were not well defined and verifiable For the selected programme: Property Management, 49% of the planned and reported indicators were not clear, well defined and verifiable. Planned and reported indicators were not verifiable For the selected programme: Property Management, valid performance management processes and systems that produce actual performance against the planned indicators did not exist for 49% of the indicators. Reliability of information 18. The reported performance information was deficient in respect of the following criteria: Validity: The reported performance did occur and does pertain to the entity. Accuracy: The amounts, numbers and other data relating to reported actual performance are recorded and reported appropriately. Completeness: All actual results and events that should have been recorded are included in the reported performance information. 19. The following audit findings relate to the above criteria: Reported performance against targets is not valid, accurate and complete when compared to source information For the selected programme: Property Management, 38% of the reported targets were not valid, accurate and complete based on the source information or evidence provided. For the selected programme: Expanded Public Works Programme, 55% of the reported targets were not valid, accurate and complete based on the source information or evidence provided. For the selected programme: Public Works Programme, 53% of the reported targets were not valid, accurate and complete based on the source information or evidence provided. Compliance with laws and regulations Annual financial statements, performance and annual reports 20. The financial statements submitted for audit did not comply with section 40(1) of the PFMA. Material misstatements were identified during the audit, which were corrected by management. 21. The department did not report on all performance against predetermined objectives, as required by section 40(3) (a) of the PFMA. 78

81 REPORT OF THE AUDITOR-GENERAL TO THE GAUTENG PROVINCIAL LEGISLATURE ON VOTE NO. 12: GAUTENG DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT Expenditure management 22. As disclosed in note 9 to the financial statements, the department incurred unauthorised expenditure of R contrary to the requirement of section 39(1)(b) of the PFMA. 23. As disclosed in note 25 to the financial statements, the department incurred irregular expenditure of R of which R relates to contracts entered into financial year and R relates to contracts entered into in prior year financial years, contrary to the requirement of section 38(1)(c)(ii) of the PFMA as well as Treasury Regulation (TR) 6.3.1(a). 24. As disclosed in note 26 to the financial statements, the department incurred fruitless and wasteful expenditure of R contrary to the requirement of section 38(1)(c)(ii) of the PFMA as well as TR Payments due to creditors were not settled within 30 days from date of receipt of an invoice, as per the requirements of section 38(1)(f) of the PFMA and TR Revenue management 26. Although the department did take steps to charge market related rentals as required by TR 16A7.4, such steps were not effective as reported in paragraph 9 of this report. 27. The department did not review the scale of tariffs of fees and charges at the time of preparing the budget and did not obtain approval from the relevant treasury for the proposed tariff structure, as required by TR Procurement and contract management 28. Tender invites for construction contracts were not advertised on the Construction Industry Development Board (CIDB) website, as per the requirement of section 24 of the CIDB Regulation. 29. Tender contracts were awarded to bidders who did not score the highest points as per section 2(1)(f) of the Preferential Procurement Policy Framework Act. 30. Tender invites were not advertised in at least the Government Tender Bulletin as per the requirement of TR 16A6.3(c). 31. National Treasury s Code of Conduct for Supply Chain Management Practitioners was not signed by officials and role players of supply chain management as per the requirement of TR16A Contrary to National Treasury Practice Note 6 of , the accounting officer did not report within ten days to the relevant Treasury and Auditor-General all cases where goods and services above the value of R1 million were procured by deviating from the Supply Chain Management. 79

82 REPORT OF THE AUDITOR-GENERAL TO THE GAUTENG PROVINCIAL LEGISLATURE ON VOTE NO. 12: GAUTENG DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT 33. Tenders were awarded to bidders who did not complete SBD 4, 8 and 9 declarations as required by Practice Note 7 of , Practice Note 4 of 2006 and in terms of the Instruction Note dated 21 July INTERNAL CONTROL 34. In accordance with the PAA and in terms of General Notice 1111 of 2010, issued in Government Gazette of 15 December 2010, I considered internal control relevant to my audit, but not for the purpose of expressing an opinion on the effectiveness of internal control. The matters below are limited to the significant deficiencies that resulted in the findings on the annual performance report and the findings on compliance with laws and regulations included in this report. Leadership 35. Management did not adequately implement documented policies and procedures to guide the effectiveness of the operations of the department and as a result instances of non-compliance with the applicable laws and regulations were identified as detailed under the reporting on compliance with laws and regulations section of this report. Financial and performance management 36. Management did not implement proper record keeping in a timely manner to ensure that complete, relevant and accurate information is accessible and available to support financial and performance reporting. 37. Management did not prepare accurate and complete financial and performance reports that are supported and evidenced by reliable information. OTHER REPORTS Performance audit 38. A performance audit was conducted during the year under review on the department s use of consultants. The audit is currently in the reporting phase and the findings will be reported on in a separate report. 39. A performance audit is being conducted on the Readiness of Government to report on its performance. The focus of the audit is on how government institutions are guided and assisted to report on their performance, as well as the systems and processes that they have put in place. The findings will be reported on in a separate report. 80

83 REPORT OF THE AUDITOR-GENERAL TO THE GAUTENG PROVINCIAL LEGISLATURE ON VOTE NO. 12: GAUTENG DEPARTMENT OF INFRASTRUCTURE DEVELOPMENT Investigations Investigations in progress 40. Investigations were conducted by the department based on allegations of financial misconduct by officials. The investigations were still in process at the date of this report. Investigations completed during the financial year 41. Investigations were finalised during the financial year by the department based on allegations of procurement irregularities, fraud and financial misconduct by officials. The department took disciplinary actions which resulted in some responsible officials being dismissed or suspended pending the outcome of the disciplinary process. In some instances, the disciplinary process is still ongoing. Johannesburg 30 July

84 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 Appropriation per programme 2010/ /10 APPROPRIATION STATEMENT Adjusted Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R' ADMINISTRATION Current payment 125,796 (9,581) - 116,215 87,931 28, % 156, ,939 Transfers and subsidies 1, ,130 1, % 2,941 2,117 Payment for capital assets (91) 110.7% 1, Payment for financial assets - 8,601-8,601 8, % , ,796 98,493 28, , , PUBLIC WORKS Current payment 466,134 56, , ,479 (48,069) 109.2% 780, ,130 Transfers and subsidies 512,108 (56,281) - 455, ,725 92, % 277, ,113 Payment for capital assets (394) % 1, Payment for financial assets (1) , , ,604 43,638 1,059,182 1,034, COMMUNITY BASED PROGRAMMES Current payment 208,999 (50) - 208, ,049 74, % 192, ,960 Transfers and subsidies % - - Payment for capital assets Payment for financial assets , , ,098 74, , ,157 Subtotal 1,314, ,314,038 1,167, , % 1,413,167 1,366,457 TOTAL 1,314, ,314,038 1,167, , % 1,413,167 1,366,457 82

85 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH / /10 Final Appropriation Actual Expenditure Final Appropriation Actual Expenditure TOTAL (brought forward) Reconciliation with statement of financial performance ADD Departmental receipts 16,386 14,177 Direct Exchequer receipts Aid assistance Actual amounts per statement of financial performance (total revenue) 1,330,424 1,427,344 ADD Aid assistance Direct Exchequer payments Prior year unauthorised expenditure approved without funding Actual amounts per statement of financial performance (total expenditure) 1,167,195 1,366,457 83

86 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 Appropriation per economic classification 2010/ /10 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Current payments R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000 Compensation of employees 413, , ,912 22, % 309, ,919 Goods and services 387,911 46, , ,774 33, % 819, ,988 Interest and rent on land (558) 358.3% 1,159 1,159 Transfers and subsidies Provinces and municipalities 353,727 (66,381) - 287, ,827 75, % 32,227 12,311 Departmental agencies and accounts 158, , ,054 8, % 244, ,535 Universities and technikons Foreign governments and international organisations Public corporations and private enterprises - 8,100-8,100-8, Non-profit institutions Households 1,000 2,060-3,060 2, % 3,343 3,383 Gifts and donations Payments for capital assets Buildings and other fixed structures Machinery and equipment ,340 (485) 156.7% 2,400 1,199 Heritage assets Specialised military assets Biological assets Land and subsoil assets Software and other intangible assets Payments for financial assets - 8,601-8,601 8, % - - Total 1,314, ,314,038 1,167, , % 1,413,167 1,366,494 84

87 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 Statutory Appropriation per economic classification 2010/ /10 Program 1 Per Economic classification Adjusted Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000 Current payments Compensation of employees 53, ,524 53, % 85, ,577 Goods and services 72,272 (9,631) - 62,641 34,873 27, % 70,091 40,306 Interest and rent on land (4) 108.0% 1,055 1,055 Transfers and subsidies Provinces and municipalities Departmental agencies and accounts % Universities and technikons Foreign governments and international organisations Public corporations and private enterprises Non-profit institutions Households 1, , % 2,143 1,860 Gifts and donations Payments for capital assets Buildings and other fixed structures Machinery and equipment (91) 110.7% Heritage assets Specialised military assets Biological assets Land and subsoil assets Payments for financial assets - 8,601-8,601 8, % - - Total 126, ,796 98,493 28, % 160, ,758 85

88 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH / /10 Detail per sub-programme Adjusted Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R' OFFICE OF THE MEC Current payment 6,856 5,685-12,541 8,653 3, % 12,241 13,111 Transfers and subsidies Payment for capital assets Payment for financial assets CORPORATE SERVICES Current payment 91,919 (15,006) - 76,913 58,778 18, % 85,422 82,180 Transfers and subsidies 1, , % 1,644 1,361 Payment for capital assets (34) 104.7% Payment for financial assets - 8,601-8,601 8, % MANAGEMENT Current payment 27,021 (260) - 26,761 20,500 6, % 58,648 58,648 Transfers and subsidies % 1, Payment for capital assets (57) 143.8% - - Payment for financial assets Total 126, ,796 98,493 28, % 160, ,758 86

89 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH / /10 Economic classification Adjusted Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Programme 2 R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000 Current payments Compensation of employees 295, , ,582 (27,127) 109.2% 165, ,199 Goods and services 170,679 56, , ,177 (20,388) 109.0% 615, ,828 Interest and rent on land (554) 433.7% Transfers and subsidies to: Provinces and municipalities 353,727 (66,381) - 287, ,827 75, % 32,227 12,311 Departmental agencies and accounts 158, , ,948 8, % 243, ,278 Universities and technikons Foreign governments and international organisations Public corporations and private enterprises - 8,100-8,100-8, Non-profit institutions Households - 2,000-2,000 1, % 1,200 1,523 Gifts and donations Payment for capital assets Buildings and other fixed structures Machinery and equipment (394) % 1, Heritage assets Land and subsoil assets Software and other intangible assets Payments for financial assets (1) - - Total 978, , ,603 43,639 95,5% 1,059,182 1,034,542 87

90 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH / /10 Detail per sub-programme Adjusted Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R' CONSTRUCTION Current payment 69,601 (10,200) - 59,401 49,848 9, % 125, ,406 Transfers and subsidies Payment for capital assets Payment for financial assets MAINTENANCE Current payment 267,987 24, , ,934 13, % 160, ,784 Transfers and subsidies 17,000 (14,011) - 2,989 2, % 9,162 9,162 Payment for capital assets (85) % Payment for financial assets PROPERTY MANAGEMENT Current payment 128,546 42, , ,697 (70,881) 141.5% 494, ,940 Transfers and subsidies 495,108 (40,270) - 452, ,230 91, % 267, ,559 Payment for capital assets (309) Payment for financial assets (1) Total 978, , ,604 43,638 95,5% 1,059,182 1,034,542 88

91 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH / /10 Economic classification Adjusted Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure Programme 3 R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000 Current payments Compensation of employees 64, ,039 15,326 48, % 59,189 43,143 Goods and services 144,960 (50) - 144, ,724 26, % 133, ,854 Interest and rent on land Transfers and subsidies to: Provinces and municipalities Departmental agencies and accounts Universities and technikons Foreign governments and international organisations Public corporations and private enterprises Non-profit institutions Households % - - Gifts and donations Payment for capital assets Buildings and other fixed structures Machinery and equipment Heritage assets Specialised military assets Biological assets Land and subsoil assets Software and other intangible assets Payments for financial assets Total 209, , ,099 74, % 193, ,194 89

92 APPROPRIATION STATEMENTS FOR THE YEAR ENDED 31 MARCH / /10 Detail per sub-programme Adjusted Appropriation Shifting of Funds Virement Final Appropriation Actual Expenditure Variance Expenditure as % of final appropriation Final Appropriation Actual Expenditure R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R' PROGRAMME SUPPORT Current payment 68,665 (50) - 68, ,968 (37,353) 154.4% 59,718 59,718 Transfers and subsidies % - - Payment for capital assets Payment for financial assets PROJECTIMPLEMENTATION Current payment 140, ,334 28, , % 133, ,242 Transfers and subsidies Payment for capital assets Payment for financial assets Total 209, , ,098 74, % 193, ,157 90

93 NOTES TO THE APPROPRIATION STATEMENT FOR THE YEAR ENDED 31 MARCH Detail of transfers and subsidies as per Appropriation Act (after Virement): Detail of these transactions can be viewed in the note on Transfers and subsidies, disclosure notes and Annexure 1 (A-H) to the Annual Financial Statements. 2. Detail of specifically and exclusively appropriated amounts voted (after Virement): Detail of these transactions can be viewed in note 1 (Annual Appropriation) to the Annual Financial Statements. 3. Detail on payments for financial assets Detail of these transactions per programme can be viewed in the note on Payments for financial assets to the Annual Financial Statements. 4. Explanations of material variances from Amounts Voted (after Virement): 4.1 Per Programme Final Appropriation Actual Expenditure Variance Variance as a % of Final Appropriation R 000 R 000 R 000 % Programme 1 126,796 98,493 28,303 22% Programme 2 978, ,604 43,638 4% Programme 3 209, ,098 74,902 36% 4.2 Per Economic classification Final Appropriation Current payments Actual Expenditure Variance Variance as a % of Final Appropriation R 000 R 000 R 000 % Compensation of employees 413, ,912 22,106 5% Goods and services 434, ,774 33,566 8% Interest and rent on land (558) (258%) Unauthorised expenditure approved

94 NOTES TO THE APPROPRIATION STATEMENT FOR THE YEAR ENDED 31 MARCH 2011 Per Economic classification Final Appropriation Actual Expenditure Variance Variance as a % of Final Appropriation R 000 R 000 R 000 % Transfers and subsidies Provinces and municipalities 287, ,827 75,519 26% Departmental agencies and 158, ,054 8,447 5% accounts Public corporations and private 8,100-8, % enterprises Households 3,060 2, % Gifts and donations % Payments for capital assets Machinery and equipment 855 1,340 (485) (57%) Payments for financial assets 8,601 8,601-0% 92

95 STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2011 Note 2010/ /10 REVENUE R'000 R'000 Annual appropriation 1 1,314,038 1,413,167 Departmental revenue 2 16,386 14,177 TOTAL REVENUE 1,330, 424 1,427,344 EXPENDITURE Current expenditure Compensation of employees 3 390, ,919 Goods and services 4 400, ,989 Interest and rent on land ,159 Unauthorised expenditure approved without funding Total current expenditure 792,460 1,059,067 Transfers and subsidies Transfers and subsidies 7 364, ,228 Unauthorised expenditure approved without funding Total transfers and subsidies 364, ,228 Expenditure for capital assets Tangible capital assets 8 1,340 1,199 Software and other intangible assets Unauthorised expenditure approved without funding Total expenditure for capital assets 1,340 1,199 Payments for financial assets 6 8,601 (37) 93

96 STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2011 Note 2010/ /10 R'000 R'000 Direct Exchequer Payments - - TOTAL EXPENDITURE 1,167,195 1,366,457 SURPLUS/(DEFICIT) FOR THE YEAR 163,229 60,887 Reconciliation of Net Surplus/(Deficit) for the year Voted funds 146,843 46,710 Annual appropriation 64,205 (90,749) Conditional grants 82, ,459 Unconditional grants - - Departmental revenue and NRF Receipts 15 16,386 14,177 SURPLUS/(DEFICIT) FOR THE YEAR 163,229 60,887 94

97 STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 MARCH 2011 ASSETS Note 2010/ /10 R'000 R'000 Current assets 537, ,203 Unauthorised expenditure 9 161, ,447 Fruitless and wasteful expenditure Cash and cash equivalents , ,172 Prepayments and advances Receivables , ,567 Non-current assets - - Investments - - Loans - - Other financial assets - - TOTAL ASSETS 537, ,203 LIABILITIES Current liabilities 536, ,203 Voted funds to be surrendered to the Revenue Fund , ,157 Departmental revenue and NRF Receipts to be 15 15,272 5,718 surrendered to the Revenue Fund Direct Exchequer Receipts to be surrendered to the - - Revenue Fund Payables , ,328 Non-current liabilities - - Payables - - TOTAL LIABILITIES 536, ,203 NET ASSETS

98 STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 31 MARCH 2011 NET ASSETS Note 2010/ /10 R'000 R'000 Capitalisation Reserves Opening balance - - Transfers: - - Movement in Equity - - Movement in Operational Funds - - Other movements - - Closing balance - - Recoverable revenue Opening balance - - Transfers: Irrecoverable amounts written off - - Debts revised (577) - Debts recovered (included in departmental receipts) 10 - Debts raised Closing balance Retained funds Opening balance - - Transfer from voted funds to be surrendered (Parliament/ - - Legislatures only) Utilised during the year - - Other - - Closing balance - - Revaluation Reserve Opening balance - - Revaluation adjustment (Housing departments) - - Transfers - - Other - - Closing balance - - TOTAL

99 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2011 CASH FLOW Note 2010/ /10 R'000 R 000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts 1,330,424 1,427,344 Annual appropriated funds received 1.1 1,314,038 1,413,167 Departmental revenue received 2 16,386 14,177 NRF Receipts - - Net (increase)/decrease in working capital (2,110) 15,943 Surrendered to Revenue Fund (166,989) (61,135) Current payments (792,460) (945,620) Payments for financial assets (8,601) 37 Transfers and subsidies paid (364,794) (306,228) Net cash flow available from operating activities 17 (4,530) 130,341 CASH FLOWS FROM INVESTING ACTIVITIES Payments for capital assets 8 (1,340) (1,199) Proceeds from sale of capital assets - - (Increase)/decrease in loans - - (Increase)/decrease in investments - - (Increase)/decrease in other financial assets - - Net cash flows from investing activities (1,340) (1,199) CASH FLOWS FROM FINANCING ACTIVITIES Distribution/dividend received - - Increase/(decrease) in net assets Increase/(decrease) in non-current payables - - Net cash flows from financing activities Net increase/(decrease) in cash and cash equivalents (5,609) 129,142 Cash and cash equivalents at beginning of period 129, Cash and cash equivalents at end of period , ,172 97

100 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2011 The Financial Statements have been prepared in accordance with the following policies, which have been applied consistently in all material aspects, unless otherwise indicated. However, where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the Financial Statements and to comply with the statutory requirements of the Public Finance Management Act, Act 1 of 1999 (as amended by Act 29 of 1999), and the Treasury Regulations issued in terms of the Act and the Division of Revenue Act, Act 1 of Presentation of the Financial Statements 1.1 Basis of preparation The Financial Statements have been prepared on a modified cash basis of accounting, except where stated otherwise. The modified cash basis constitutes the cash basis of accounting supplemented with additional disclosure items. Under the cash basis of accounting transactions and other events are recognised when cash is received or paid. 1.2 Presentation currency All amounts have been presented in the currency of the South African Rand (R) which is also the functional currency of the department. 1.3 Rounding Unless otherwise stated all financial figures have been rounded to the nearest one thousand Rand (R 000). 1.4 Comparative figures Prior period comparative information has been presented in the current year s financial statements. Where necessary figures included in the prior period financial statements have been reclassified to ensure that the format in which the information is presented is consistent with the format of the current year s financial statements. 1.5 Comparative figures - Appropriation Statement A comparison between actual amounts and final appropriation per major classification of expenditure is included in the Appropriation Statement. 98

101 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH Revenue 2.1 Appropriated funds Appropriated funds comprises of Departmental allocations as well as direct charges against revenue fund (i.e. statutory appropriation). Appropriated funds are recognised in the financial records on the date the appropriation becomes effective. Adjustments made in terms of the adjustments budget process are recognised in the financial records on the date the adjustments become effective. Unexpended appropriated funds are surrendered to the Provincial Revenue Fund. Any amounts owing to the Provincial Revenue Fund at the end of the financial year are recognised as payable in the statement of financial position. Any amount due from the Provincial Revenue Fund at the end of the financial year is recognised as a receivable in the statement of financial position. 2.2 Departmental revenue All Departmental revenue is recognised in the statement of financial performance when received and is subsequently paid into the Provincial Revenue Fund, unless stated otherwise. Any amount owing to the Provincial Revenue Fund is recognised as a payable in the statement of financial position. No accrual is made for amounts receivable from the last receipt date to the end of the reporting period. These amounts are however disclosed in the disclosure note to the annual financial statements. 2.3 Direct Exchequer receipts All direct exchequer receipts are recognised in the statement of financial performance when the cash is received and is subsequently paid into the Provincial Revenue Fund, unless stated otherwise. Any amount owing to the Provincial Revenue Funds at the end of the financial year is recognised as a payable in the statement of financial position. 2.4 Direct Exchequer payments All direct exchequer payments are recognised in the statement of financial performance when final authorisation for payment is effected on the system (by no later than 31 March of each year). 2.5 Aid assistance Aids assistance is recognised as revenue when received All in-kind aid assistance is disclosed at fair value on the date of receipt in the annexures to the Annual Financial Statements The cash payments made during the year relating to aid assistance projects are recognised as expenditure in the statement of financial performance when final authorisation for payments is effected on the system (by no later than 31 March of each year) 99

102 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2011 The value of the assistance expensed prior to the receipt of funds is recognised as a receivable in the statement of financial position. Inappropriately expensed amounts using aid assistance and any unutilised amounts are recognised as payables in the statement of financial position. All CARA funds received must be recorded as revenue when funds are received. The cash payments made during the year relating to CARA earmarked projects are recognised as expenditure in the statement of financial performance when final authorisation for payments effected on the system (by no later then 31 March of each year) Inappropriately expensed amounts using CARA funds are recognised as payables in the statement of financial position. Any unutilised amounts are transferred to retained funds as they are not surrendered to the revenue fund. 3. Expenditure 3.1 Compensation of employees Salaries and wages Salaries and wages are expensed in the statement of financial performance when the final authorisation for payment is effected on the system (by no later than 31 March of each year). Other employee benefits that give rise to a present legal or constructive obligation are disclosed in the disclosure notes to the financial statements at its face value and are not recognised in the statement of financial performance or position. Employee costs are capitalised to the cost of a capital project when an employee spends more than 50% of his/her time on the project. These payments form part of expenditure for capital assets in the statement of financial performance Social contributions Employer contributions to post employment benefit plans in respect of current employees are expensed in the statement of financial performance when the final authorisation for payment is effected on the system (by no later than 31 March of each year). No provision is made for retirement benefits in the financial statements of the Department. Any potential liabilities are disclosed in the financial statements of the National Revenue Fund and not in the financial statements of the employer department. Employer contributions made by the Department for certain of its ex-employees (such as medical benefits) are classified as transfers to households in the statement of financial performance. 3.2 Goods and services Payments made during the year for goods and/or services are recognised as an expense in the statement of financial performance when the final authorisation for payment is effected on the system (by no later than 31 March of each year). 100

103 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2011 The expense is classified as capital if the goods and/or services were acquired for a capital project or if the total purchase price exceeds the capitalisation threshold (currently R5 000). All other expenditures are classified as current. Rental paid for the use of buildings or other fixed structures is classified as goods and services and not as rent on land. 3.3 Interest and rent on land Interest and rental payments are recognised as an expense in the statement of financial performance when the final authorisation for payment is effected on the system (by no later than 31 March of each year). This item excludes rental for the use of buildings or other fixed structures. If it is not possible to distinguish between payment for the use of land and the fixed structures on it, the whole amount should be recorded under goods and services. 3.4 Payments for financial assets Debts are written off when identified as irrecoverable. Debts written-off are limited to the amount of savings and/or underspending of appropriated funds. The write off occurs at year-end or when funds are available. No provision is made for irrecoverable amounts but an estimate is included in the disclosure notes to the financial statements amounts. All other losses are recognised when authorisation has been granted for the recognition thereof. 3.5 Transfers and subsidies Transfers and subsidies are recognised as an expense when the final authorisation for payment is effected on the system (by no later than 31 March of each year). 3.6 Unauthorised expenditure When confirmed unauthorised expenditure is recognised as an asset in the statement of financial position until such time as the expenditure is either approved by the relevant authority, recovered from the responsible person or written off as irrecoverable in the statement of financial performance. Unauthorised expenditure approved with funding is derecognised from the statement of financial position when the unauthorised expenditure is approved and the related funds are received. Where the amount is approved without funding it is recognised as expenditure in the statement of financial performance on the date of approval. 3.7 Fruitless and wasteful expenditure Fruitless and wasteful expenditure is recognised as expenditure in the statement of financial performance according to the nature of the payment and not as a separate line item on the face of the statement. If the expenditure is recoverable it is treated as an asset until it is recovered from the responsible person or written off as irrecoverable in the statement of financial performance. 3.8 Irregular expenditure Irregular expenditure is recognised as expenditure in the statement of financial performance. If the expenditure is not condoned by the relevant authority it is treated as an asset until it is recovered or written off as irrecoverable. 101

104 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH Assets 4.1 Cash and cash equivalents Cash and cash equivalents are carried in the statement of financial position at cost. Bank overdrafts are shown separately on the face of the statement of financial position. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held, other short-term highly liquid investments and bank overdrafts. 4.2 Other financial assets Other financial assets are carried in the statement of financial position at cost. 4.3 Prepayments and advances Amounts prepaid or advanced are recognised in the statement of financial position when the payments are made and are derecognised as and when the goods/services are received or the funds are utilised. Prepayments and advances outstanding at the end of the year are carried in the statement of financial position at cost. 4.4 Receivables Receivables included in the statement of financial position arise from cash payments made that are recoverable from another party (including departmental employees) and are derecognised upon recovery or write-off. Receivables outstanding at year-end are carried in the statement of financial position at cost plus any accrued interest. Amounts that are potentials irrecoverable are included in the disclosure notes. 4.5 Investments Capitalised investments are shown at cost in the statement of financial position. Investments are tested for an impairment loss whenever events or changes in circumstances indicate that the investment may be impaired. Any impairment loss is included in the disclosure notes. 4.6 Loans Loans are recognised in the statement of financial position when the cash is paid to the beneficiary. Loans that are outstanding at year-end are carried in the statement of financial position at cost plus accrued interest. Amounts that are potentially irrecoverable are included in the disclosure notes. 4.7 Inventory Inventories that qualify for recognition must be initially reflected at cost. Where inventories are acquired at no cost, or for nominal consideration, their cost shall be their fair value at the date of acquisition. All inventory items at year-end are reflected using the weighted average cost or FIFO cost formula. 102

105 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH Capital assets Movable assets Initial recognition A capital asset is recorded in the asset register on receipt of the item at cost. Cost of an asset is defined as the total cost of acquisition. Where the cost cannot be determined accurately, the movable capital asset is stated at fair value. Where fair value cannot be determined, the capital asset is included in the asset register at R1. All assets acquired prior to 1 April 2002 are included in the register R1. Subsequent recognition Subsequent expenditure of a capital nature is recorded in the statement of financial performance as expenditure for capital assets and is capitalised in the asset register of the department on completion of the project. Repairs and maintenance is expensed as current goods and services in the statement of financial performance Immovable assets 5. Liabilities 5.1 Payables Initial recognition A capital asset is recorded on receipt of the item at cost. Cost of an asset is defined as the total cost of acquisition. Where the cost cannot be determined accurately, the immovable capital asset is stated at R1 unless the fair value for the asset has been reliably estimated. Subsequent recognition Work-in-progress of a capital nature is recorded in the statement of financial performance as expenditure for capital assets. On completion, the total cost of the project is included in the asset register of the Department that is accountable for the asset. Repairs and maintenance is expensed as current goods and services in the statement of financial performance. Recognised payables mainly comprise amounts owing to other governmental entities. These payables are carried at cost in the statement of financial position. 5.2 Contingent liabilities Contingent liabilities are included in the disclosure notes to the financial statements when it is possible that economic benefits will flow from the department, or when an outflow of economic benefits or service potential is probable but cannot be measured reliably. 103

106 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH Contingent assets Contingent assets are included in the disclosure notes to the financial statements when it is probable that an inflow of economic benefits will flow to the entity. 5.4 Commitments Commitments are not recognised in the statement of financial position as a liability or as expenditure in the statement of financial performance but are included in the disclosure notes. 5.5 Accruals Accruals are not recognised in the statement of financial position as a liability or as expenditure in the statement of financial performance but are included in the disclosure notes. 5.6 Employee benefits Short-term employee benefits that give rise to a present legal or constructive obligation are disclosed in the disclosure notes to the financial statements. These amounts are not recognised in the statement of financial performance or the statement of financial position. 5.7 Lease commitments Finance lease Finance leases are not recognised as assets and liabilities in the statement of financial position. Finance lease payments are recognised as an expense in the statement of financial performance and are apportioned between the capital and interest portions. The finance lease liability is disclosed in the disclosure notes to the financial statements. Operating lease Operating lease payments are recognised as an expense in the statement of financial performance. The operating lease commitments are disclosed in the discloser notes to the financial statement. 5.8 Impairment and other provisions The Department tests for impairment where there is an indication that a receivable, loan or investment may be impaired. An assessment of whether there is an indication of possible impairment is done at each reporting date. An estimate is made for doubtful loans and receivables based on a review of all outstanding amounts at year-end. Impairments on investments are calculated as being the difference between the carrying amount and the present value of the expected future cash flows / service potential flowing from the instrument. Provisions are disclosed when there is a present legal or constructive obligation to forfeit economic benefits as a result of events in the past and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the obligation can be made. 6. Receivables for Departmental revenue Receivables for Departmental revenue are disclosed in the disclosure notes to the annual financial statements. 104

107 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH Net Assets 7.1 Capitalisation reserve The capitalisation reserve comprises of financial assets and/or liabilities originating in a prior reporting period but which are recognised in the statement of financial position for the first time in the current reporting period. Amounts are recognised in the capitalisation reserves when identified in the current period and are transferred to the National/Provincial Revenue Fund when the underlining asset is disposed and the related funds are received. 7.2 Recoverable revenue Amounts are recognised as recoverable revenue when a payment made in a previous financial year becomes recoverable from a debtor in the current financial year. Amounts are either transferred to the National/Provincial Revenue Fund when recovered or are transferred to the statement of financial performance when written-off. 8. Related party transactions Specific information with regards to related party transactions is included in the disclosure notes. 9. Key management personnel Compensation paid to key management personnel including their family members where relevant, is included in the disclosure notes. 105

108 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Annual Appropriation 1.1 Annual Appropriation Included are funds appropriated in terms of the Appropriation Act (and the Adjustments Appropriation Act) for Provincial Departments: Final Appropriation 2010/ /10 Actual Funds Received Funds not requested/ not received Appropriation received R 000 R 000 R 000 R 000 Administration 126, , ,386 Public works 978, ,242-1,059,182 Community Based Programmes 209, , ,599 Total 1,314,038 1,314,038-1,413, Conditional grants Note 2010/ /10 R 000 R 000 Total grants received , ,

109 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Departmental revenue Note 2010/ /10 R 000 R 000 Tax revenue Sales of goods and services other than capital assets ,648 8,455 Interest, dividends and rent on land Transactions in financial assets and liabilities 2.3 3,735 5,715 Total revenue collected 16,386 14,177 Less: Own revenue included in appropriation Departmental revenue collected 16,386 14, Sales of goods and services other than capital assets Note 2010/ /10 2 R 000 R 000 Sales of goods and services produced by the department 12,648 8,455 Sales by market establishment 9,942 - Administrative fees 2,342 - Other sales 364 8,455 Sales of scrap, waste and other used current goods Total 12,648 8,455 The revenue that related to rental would have amounted to R36 million for the year under review if market related rentals were implemented for all 753 leased properties of the Department. 2.2 Interest, dividends and rent on land Note 2010/ /10 2 R 000 R 000 Interest 2 - Dividends - - Rent on land 1 7 Total

110 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Transactions in financial assets and liabilities Note 2010/ /10 2 R 000 R 000 Loans and advances - - Repayment of Public Contributions - - Receivables 3,735 5,694 Proceeds from investment - - Forex gain - - Stale cheques written back - 21 Other Receipts including Recoverable Revenue - - Total 3,735 5, Compensation of employees 3.1 Salaries and Wages Note 2010/ /10 R 000 R 000 Basic salary 209, ,862 Performance award 4,053 2,762 Service Based 16,567 14,297 Compensative/circumstantial 7,829 9,679 Periodic payments 46,088 15,208 Other non-pensionable allowances 66,332 64,414 Total 349, , Social contributions Note 2010/ /10 R 000 R 000 Employer contributions Pension 25,929 10,828 Medical 14,905 11,778 UIF - - Bargaining council Official unions and associations - - Insurance - - Total 40,920 22,697 Total compensation of employees 390, ,919 Average number of employees 1,612 1,

111 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Goods and services Note 2010/ /10 R 000 R 000 Administrative fees Advertising 2,646 6,129 Assets less than R5, Bursaries (employees) 110 1,054 Catering Communication 11,285 24,804 Computer services 4.2 2,673 2,867 Consultants, contractors and agency/outsourced services , ,064 Entertainment Audit cost external 4.4 4, Fleet services Inventory 4.5 8,808 20,503 Housing - 7 Operating leases 107,032 32,184 Owned and leasehold property expenditure , ,247 Transport provided as part of the departmental activities - 53 Travel and subsistence 4.7 3,614 31,164 Venues and facilities 3 1,007 Training and staff development 147 1,898 Other operating expenditure 4.8 4, Total 400, , Assets less than R5,000 Note 2010/ /10 4 R 000 R 000 Tangible assets Buildings and other fixed structures - - Machinery and equipment Intangible assets - - Total

112 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Computer services Note 2010/ /10 4 R 000 R 000 External computer service providers 2,673 2,867 Total 2,673 2, Consultants, contractors and agency/outsourced services Note 2010/ /10 4 R 000 R 000 Business and advisory services 22,386 - Legal costs 5,785 3,310 Contractors 30,659 95,797 Agency and support/outsourced services 172, ,957 Total 231, , Audit cost External Note 2010/ /10 4 R 000 R 000 Regularity audits 4, Total 4, Inventory Note 2010/ /10 4 R 000 R 000 Learning and teaching support material Food and food supplies Fuel, oil and gas 65 1,158 Other consumable materials 4,974 3,261 Maintenance material - - Stationery and printing 3,652 15,637 Total 8,808 20,

113 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Property payments Note 2010/ /10 4 R 000 R 000 Municipal services 22, ,217 Other Total 22, ,247 During the 2009/10 financial year the payments made in terms of the Devolution of Rates and Taxes grant were classified as goods and services, paid under municipal services rendered. During 2010/11 payment made in terms of the Devolution of Rates and Taxes grant was reclassified as payments within transfers and subsidies. 4.7 Travel and subsistence Note 2010/ /10 4 R 000 R 000 Local 3,602 27,171 Foreign 12 3,993 Total 3,614 31,164 An accrual amounting to R27 million, relating to g-fleet is included in the accrual listing of the Department. 4.8 Other operating expenditure Note 2010/ /10 4 R 000 R 000 Learnerships 4,408 - Resettlement costs Total 4, During prior years, learnerships were included in compensation of employees and did not form part of goods and services. 111

114 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Interest and rent on land Note 2010/ /10 R 000 R 000 Interest paid 774 1,159 Rent on land - - Total 774 1, Payments for financial assets Note 2010/ /10 R 000 R 000 Other material losses written off 6.1 8,600 - Debts written off (37) Total 8,601 (37) 6.1 Other material losses written off Nature of losses Note 2010/ /10 6 R 000 R 000 Other debtors 8,600 - Total 8, Debts written off Nature of debts written off Transfer to debts written off Note 2010/ /10 6 R 000 R 000 Ex-Employee 1 - Other - (37) Total 1 (37) 112

115 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Transfers and subsidies Note 2010/ /10 R 000 R 000 Provinces and municipalities 34, 35 Annex 211,827 12,301 1A, Annex 1B Departmental agencies and accounts Annex 1C 150, ,535 Households Annex 1H 2,913 3,382 Gifts, donations and sponsorships made Annex 1K - 10 Total 364, ,228 Unspent funds transferred to the above beneficiaries During the 2009/10 financial year the payments made in terms of the Devolution of Rates and Taxes grant were classified as goods and services, paid under Municipal services rendered. During 2010/11 payment made in terms of the Devolution of Rates and Taxes grant was reclassified as payments within transfers and subsidies. 113

116 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Expenditure for capital assets Note 2010/ /10 R 000 R 000 Tangible assets 1,340 1,199 Buildings and other fixed structures Heritage assets 29, Machinery and equipment 29 1,340 1,199 Specialised military assets Land and subsoil assets Investment property Biological assets Software and other intangible assets - - Capitalised development costs Computer software Mastheads and publishing titles Patents, licences, copyright, brand names, trademarks Recipes, formulae, prototypes, designs, models Services and operating rights Other intangibles Total 1,340 1,199 The following amounts have been included as project costs in Expenditure for capital assets Compensation of employees - - Goods and services - 133,917 Total - 133,

117 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Analysis of funds utilised to acquire capital assets 2010/11 Voted funds Aid assistance Total R 000 R 000 R 000 Tangible assets 1,340-1,340 Buildings and other fixed structures Heritage assets Machinery and equipment 1,340-1,340 Specialised military assets Land and subsoil assets Investment property Biological assets Software and other intangible assets Capitalised development costs Computer software Mastheads and publishing titles Patents, licences, copyright, brand names, trademarks Recipes, formulae, prototypes, designs, models Services and operating rights Other intangibles Total 1,340-1,

118 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Analysis of funds utilised to acquire capital assets 2009/10 Voted funds Aid assistance Total R 000 R 000 R 000 Tangible assets 1,199-1,199 Buildings and other fixed structures Heritage assets Machinery and equipment 1,199-1,199 Specialised military assets Land and subsoil assets Investment property Biological assets Software and other intangible assets Capitalised development costs Computer software Mastheads and publishing titles Patents, licences, copyright, brand names, trademarks Recipes, formulae, prototypes, designs, models Services and operating rights Other intangibles Total 1,199-1,

119 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Unauthorised expenditure 9.1 Reconciliation of unauthorised expenditure Note 2010/ /10 R 000 R 000 Opening balance 113,447 - Unauthorised expenditure discovered in current year 14 48, ,447 Less: Amounts approved by Parliament/Legislature with funding Less: Amounts approved by Parliament/Legislature without funding and written off in the Statement of Financial Performance Capital Current Transfers and subsidies - - Less: Amounts transferred to receivables for recovery - - Unauthorised expenditure awaiting authorisation / written off 161, , Analysis of unauthorised expenditure awaiting authorisation per economic classification 2010/ /10 R 000 R 000 Capital - - Current 161, ,447 Transfers and subsidies - - Total 161, ,

120 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Analysis of unauthorised expenditure awaiting authorisation per type 2010/ /10 R 000 R 000 Unauthorised expenditure relating to overspending of the vote or a main division within a vote Unauthorised expenditure incurred not in accordance with the purpose of the vote or main division Total 161, , , , Details of unauthorised expenditure current year Incident Disciplinary steps taken/criminal proceedings 2010/11 R 000 Commitment to service providers without approval from Accounting Officer Disciplinary processes have been initiated against officials who incurred unauthorised expenditure. Amount yet to be concluded Total - 118

121 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Fruitless and wasteful expenditure 10.1 Reconciliation of fruitless and wasteful expenditure Note 2010/ /10 R 000 R 000 Opening balance - - Less: Amounts condoned - - Current Capital - - Transfers and subsidies - - Less: Amounts transferred to receivables for recovery - - Fruitless and wasteful expenditure awaiting - - condonement - Analysis of awaiting condonement per economic classification Current - - Capital - - Transfers and subsidies - - Total Cash and cash equivalents Note 2010/ /10 R 000 R 000 Consolidated Paymaster General Account 123, ,129 Cash receipts - - Disbursements - - Cash on hand Cash with commercial banks (Local) - - Cash with commercial banks (Foreign) - - Total 123, ,

122 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Prepayments and advances Note 2010/ /10 R 000 R 000 Staff advances - - Travel and subsistence - - Prepayments - 17 Advances paid to other entities - - SOCPEN advances - - Total Receivables 2010/ /10 R 000 R 000 R 000 R 000 R 000 Note Claims recoverable 13.1 Less than one year One to three years Older than three years Total Total 21, , ,597 Annex 4 Recoverable expenditure , , Staff debt , , Other debtors , ,389 9,376 Total 251, , , Claims recoverable Note 2010/ /10 13 R 000 R 000 Provincial departments 21, ,597 Total 21, ,

123 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Recoverable expenditure (disallowance accounts) Note 2010/ /10 13 R 000 R 000 Sal: ACB Recalls - 93 Sal: Reversal Control 311 (19) Sal: Tax Debt Sal: Income Tax - (350) Sal: Medical Aid 2 4 Sal: Recoverable - 8 Sal: Pension Fund 15 3 Sal: Deduction Disall Sal: Insurance Deduction 1 - Outstanding Payments 1,284 - Total 1, Staff debt Note 2010/ /10 13 R 000 R 000 Employee Ex- Employee Breach of contract Ex-Employee Supplier Total 1, There is a potential debt for the negative amounts on the capped leave. These amounts will be further investigated. These amount to R Further to the above, staff debt will be taken on during 2011/12 amounting to R iro overpayments made to staff by the erstwhile Impophoma Infrastructure Support Entity. 121

124 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Other debtors Note 2010/ /10 13 R 000 R 000 Claim against contractor Debts Other 9, ,872 3,141 9, Total 227,389 9,376 The debt of R relates to transactions between the Department and Impophoma Infrastructure Support Entity during 2009/10 financial year where the Department funded the expenditure of the entity. Various of these transactions are currently part of investigations conducted. Over and above the debt reflected, trade debt relating to suppliers amounting to R related to claims instituted against suppliers will be reviewed and taken on during 2011/12 by the Department. It relates to debt owed to the erstwhile Impophoma Infrastructure Support Entity. 122

125 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Voted funds to be surrendered to the Revenue Fund Note 2010/ /10 R 000 R 000 Opening balance 160,157 52,676 Transfer from statement of financial performance 146,843 46,710 Add: Unauthorised expenditure for current year 9-113,447 Voted funds not requested/not received Paid during the year (160,157) (52,676) Closing balance 146, , Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund Note 2010/ /10 R 000 R 000 Opening balance 5,718 - Transfer from Statement of Financial Performance 16,386 14,177 Own revenue included in appropriation - - Paid during the year (6,832) (8,459) Closing balance 15,272 5, Payables current Amounts owing to other entities Note 2010/11 Total Annex /10 Total 274, ,890 Advances received ,313 2,066 Other payables ,696 3,372 Total 374, , Advances received Note 2010/ /10 16 R 000 R 000 Guarantees received 1,313 2,066 Total 1,313 2,

126 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Other payables Note 2010/ /10 16 R 000 R 000 EBT Rejections 19 - Sal: Persal EBT control Outstanding payments - 2,837 Sal: ACB Recalls 35 - Cancel Cheque Re-Issue 7 - Sal: Income Tax Telephone Control Other Previous year unauthorised 97,457 - Total 98,696 3, Net cash flow available from operating activities Net surplus/(deficit) as per Statement of Financial Performance Add back non cash/cash movements not deemed operating activities Note 2010/ /10 R 000 R ,229 60,887 (167,759) 69,454 (Increase)/decrease in receivables current 23,939 (56,927) (Increase)/decrease in prepayments and advances (Increase)/decrease in other current assets (48,459) - Increase/(decrease) in payables current 22, ,177 Proceeds from sale of capital assets - - Proceeds from sale of investments - - (Increase)/decrease in other financial assets - - Expenditure on capital assets 1,340 1,199 Surrenders to Revenue Fund (166,989) (61,135) Surrenders to RDP Fund/Donor - - Voted funds not requested/not received - - Own revenue included in appropriation - - Other non-cash items - - Net cash flow generated by operating activities (4,530) 130,

127 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Reconciliation of cash and cash equivalents for cash flow purposes Note 2010/ /10 R 000 R 000 Consolidated Paymaster General account 123, ,129 Fund requisition account - - Cash receipts - - Disbursements - - Cash on hand Petty Cash Cash with commercial banks (Local) - - Cash with commercial banks (Foreign) - - Total 123, ,

128 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 These amounts are not recognised in the Annual Financial Statements and are disclosed to enhance the usefulness of the Annual Financial Statements. 19. Contingent liabilities and contingent assets 19.1 Contingent liabilities Note 2010/ /10 R 000 R 000 Liable to Nature Motor vehicle guarantees Employees Annex 3A - - Housing loan guarantees Employees Annex 3A 1,412 1,488 Other guarantees Annex 3A - - Claims against the department Annex 3B 58, Other departments (interdepartmental unconfirmed Annex 5 274, balances) Other Annex 3B - - Total 334,266 2, Commitments Note 2010/ /10 R 000 R 000 Current expenditure Approved and contracted 127, Approved but not yet contracted , Capital expenditure Approved and contracted 1,217,399 1,265,758 Approved but not yet contracted 15,039-1,232,438 1,265,758 Total Commitments 1,360,285 1,266,119 Commitments: Commitments transferred from the trading accounts that were transferred into the Department are included in the amounts indicated above. The commitments as at 1 April 2010 are disclosed in note 34. The contracts that are shorter than 12 months which were awarded during 2010/11 amounted to R million. These projects include fencing projects of the Department of Education, replacement of autoclaves of the Department of Health and Social Development and training contracts related to client Department projects. 126

129 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Accruals 2010/ /10 R 000 R 000 Listed by economic classification 30 Days 30+ Days Total Total Goods and services 72,453 59, , ,196 Interest and rent on land Transfers and subsidies Capital assets 23,429 12,248 35, ,329 Other Total 95,882 71, , ,525 Note 2010/ /10 R 000 R 000 Listed by programme level Administration 45,165 12,776 Public Works 71, ,320 EPWP 50,308 4,429 Total 167, ,525 Note 2010/ /10 R 000 R 000 Confirmed balances with other departments Annex 5-346,847 Confirmed balances with other government entities Annex Total - 346, Employee benefits Note 2010/11 R /10 R 000 Leave entitlement 17,775 11,850 Service bonus (Thirteenth cheque) 7,901 9,632 Performance awards 6,195 3,135 Capped leave commitments 17,368 30,443 Other - - Total 49,239 55,

130 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Lease commitments 23.1 Operating leases expenditure 2010/11 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Not later than 1 year , ,655 Later than 1 year and not later than 5 years Total , ,570 Later than five years , ,437 Total lease commitments - - 1,168,662-1,168, /10 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Not later than 1 year , ,424 Later than 1 year and not later than 5 years Total , ,783 Later than five years , ,068 Total lease commitments - - 1,009,275-1,009,275 The lease commitments have increased from 2009/10 to 2010/11 due to the additional commitments received from the Kopanong Precinct related to lease agreements entered into before the transfer of functions. Therefore, the lease commitments effectively increased with R213 million. 128

131 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Finance leases expenditure** 2010/11 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Not later than 1 year , Later than 1 year and not later than 5 years Total ,344 5,344 Later than five years Total lease commitments ,416 12,416 LESS: finance costs (1,083) (1,083) Total present value of lease liabilities ,333 11, /10 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Not later than 1 year ,599 3,599 Later than 1 year and not later than 5 years Total Later than five years Total lease commitments ,194 4,194 LESS: finance costs (205) (205) Total present value of lease liabilities ,989 3,

132 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Receivables for departmental revenue Note 2010/ /10 R 000 R 000 Tax revenue - - Sales of goods and services other than capital assets 1,116 3,110 Other 3,816 - Total 4,932 3, Analysis of receivables for departmental revenue Note 2010/ /10 R 000 R 000 Opening balance 3,110 - Less: amounts received - - Add: amounts recognised 4,932 3,110 Less: amounts written-off/reversed as irrecoverable (3,110) - Closing balance 4,932 3,110 The closing balance of the prior year has been written off by the accounting officer due to the fact that the completeness of the figure could not be substantiated. Furthermore, the door-to-door tenant project assists with verification of tenants in the departmental properties. 130

133 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Irregular expenditure 25.1 Reconciliation of irregular expenditure Note 2010/ /10 R 000 R 000 Opening balance 500,692 89,838 Add: Irregular expenditure relating to prior year - - Add: Irregular expenditure relating to current year 242, ,854 Less: Amounts condoned (742,843) - Less: Amounts recoverable (not condoned) - - Less: Amounts not recoverable (not condoned) - - Irregular expenditure awaiting condonation - 500,692 Analysis of awaiting condonation per age classification Current year Prior years - 410,854-89,838 Total - 500, Details of irregular expenditure current year Incident Disciplinary steps taken/criminal proceedings 2010/11 R 000 Instruction to Perform Work issued Non compliance with procurement processes Various disciplinary matters have been opened during the 2010/11 financial year relating to irregular expenditure. Disciplinary hearing is currently taking place and results will be disclosed upon finalisation of these matters. 242,151 Total 242,

134 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Details of irregular expenditure condoned Incident Condoned by (condoning authority) 2010/11 R 000 Instruction to Perform Work issued Non compliance with procurement processes The accounting officer has condoned irregular expenditure incurred during the period under review inclusive the irregular expenditure of the prior year. The accounting officer has further implemented disciplinary proceedings against officials who did not comply with procurement processes. 742,843 Total 742,843 During 2009/10 the following irregular expenditure was incurred at the erstwhile entities and carried forward to this financial year. Impophoma Infrastructure Support Entity incurred R of irregular expenditure in 2009/ Fruitless and wasteful expenditure 26.1 Reconciliation of fruitless and wasteful expenditure Note 2010/ /10 R 000 R 000 Opening balance 48,220 9,376 Fruitless and wasteful expenditure relating to prior year - - Fruitless and wasteful expenditure relating to current year 1,822 38,844 Less: Amounts condoned - - Less: Amounts transferred to receivables for recovery - - Fruitless and wasteful expenditure awaiting 50,042 48,220 condonement 132

135 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Analysis of awaiting condonation per economic classification 2010/ /10 R 000 R 000 Current 1,822 38,844 Capital 48,220 9,376 Transfers and subsidies - - Total 50,042 48,220 Fruitless expenditure has mainly been incurred due to late payment of invoices and interest being charged by service providers. Fruitless expenditure has also been incurred on behalf of client Departments which are also disclosed in the financial statements of such Departments. This is mainly due to the fact that the client Departments did not transfer funds to the Department on time to process payments within the prescribed time. This occurred mainly in the beginning of the 2010/11 financial year before the infrastructure funding was ring-fenced by the Department of Finance, Treasury Division. Interest paid on behalf of the Department of Health and Social Development amounted to R Interest paid on behalf of the Department of Education amounted to R Analysis of Current year s fruitless and wasteful expenditure Incident Disciplinary steps taken/criminal proceedings 2010/11 R 000 Payment of interest due to late payment of accounts No action has been taken as bulk of the interest was charged during the period the Department experienced cashflow constraints. 1,822 Total 1,

136 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 The opening balances in respect fruitless expenditure incurred by the entities during 2009/10 were disclosed in the financial statements of the entities and is included in the transfer of function note. Name of Trading entity Amount of fruitless and wasteful expenditure (2009/10) Impophoma Infrastructure Support Trading entity R Emoyeni Conference Centre Trading entity R Kopanong Precinct Trading entity R Related party transactions Revenue received Note 2010/ /10 R 000 R 000 Tax revenue/ User charges - - Sales of goods and services other than capital assets - - Fines, penalties and forfeits - - Interest, dividends and rent on land - - Sales of capital assets - - Transactions in financial assets and liabilities - - Transfers - - Total - - Payments made Note 2010/ /10 R 000 R 000 Goods and services 1,265, ,767 Interest and rent on land 11,245 - Purchases of capital assets - 22,593 Transactions in financial assets and liabilities - - Transfers - 254,756 Total 1,276, ,116 Note 2010/ /10 R 000 R 000 Year end balances arising from revenue/payments Receivables from related parties 21, ,969 Payables to related parties 322, ,892 Total 343,535 1,014,

137 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 The related parties of the Department of Infrastructure Development are all its client Departments and other Departments it interacts with. The prior year figures had to be adjusted to include the receivables and payables as well as goods and service procured on behalf of client Departments. This was done to ensure compliance with the preparation guide of National Treasury. 28. Key management personnel No. of Individuals 2010/11 R /10 R 000 Political office bearers (provide detail below) 2 1,486 1,226 Officials: Level 15 to ,003 3,600 Level 14 (incl. CFO if at a lower level) 10 7,036 6,017 Family members of key management personnel - - Total 13,525 10,

138 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Movable Tangible Capital Assets MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Opening balance Curr Year Adjustments to prior year balances Additions Disposals Closing Balance R 000 R 000 R 000 R 000 R 000 HERITAGE ASSETS Heritage assets MACHINERY AND EQUIPMENT 21, , ,277 21,962 Transport assets ,292 87,292 - Computer equipment 12,580-4,372 7,715 9,237 Furniture and office equipment 7,068-7,380 5,084 9,364 Other machinery and equipment 1,667-4,880 3,186 3,361 SPECIALISED MILITARY ASSETS Specialised military assets BIOLOGICAL ASSETS Biological assets TOTAL MOVABLE TANGIBLE CAPITAL ASSETS 21, , ,277 21,

139 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Additions ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Cash Non-cash (Capital Work in Progress current costs and finance lease payments) Received current, not paid (Paid current year, received prior year) Total R 000 R 000 R 000 R 000 R 000 HERITAGE ASSETS Heritage assets MACHINERY AND EQUIPMENT 1, ,590 - (6) 103,924 Transport assets - 87, ,292 Computer equipment 680 3, ,372 Furniture and office equipment 524 6, ,380 Other machinery and equipment 136 4,750 - (6) 4,880 SPECIALISED MILITARY ASSETS Specialised military assets BIOLOGICAL ASSETS Biological assets TOTAL ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS 1, ,590 - (6) 103,

140 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Disposals DISPOSALS OF MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Sold for cash Transfer out or destroyed or scrapped Total disposals Cash Received Actual R 000 R 000 R 000 R 000 HERITAGE ASSETS Heritage assets MACHINERY AND EQUIPMENT - 103, ,277 - Transport assets - 87,292 87,292 - Computer equipment - 7,715 7,715 - Furniture and office equipment - 5,084 5,084 - Other machinery and equipment - 3,186 3,186 - SPECIALISED MILITARY ASSETS Specialised military assets BIOLOGICAL ASSETS Biological assets TOTAL DISPOSAL OF MOVABLE TANGIBLE CAPITAL ASSETS - 103, ,

141 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Movement for 2009/10 MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2010 Opening balance Additions Disposals Closing balance R 000 R 000 R 000 R 000 HERITAGE ASSETS Heritage assets MACHINERY AND EQUIPMENT 20,257 1,058-21,315 Transport assets Computer equipment 11, ,580 Furniture and office equipment 6, ,068 Other machinery and equipment 1, ,667 SPECIALISED MILITARY ASSETS Specialised military assets BIOLOGICAL ASSETS Biological assets TOTAL MOVABLE TANGIBLE ASSETS 20,257 1,058-21,

142 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Minor assets MINOR ASSETS OF THE DEPARTMENT AS AT 31 MARCH 2011 Specialised military assets Intangible assets Heritage assets Machinery and equipment Biological assets Total R 000 R 000 R 000 R 000 R 000 R 000 Opening balance ,863-3,863 Prior year balance Additions ,894-20,894 Disposals (1,337) - (1,337) TOTAL MINOR ASSETS ,635-23,635 Number of R1 minor assets Number of minor assets at cost TOTAL NUMBER OF MINOR ASSETS Specialised military assets Intangible assets Heritage assets Machinery and equipment Biological assets Total ,395-23, ,396-23,

143 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 MINOR ASSETS OF THE DEPARTMENT AS AT 31 MARCH 2010 Specialised military assets Intangible assets Heritage assets Machinery and equipment Biological assets Total R 000 R 000 R 000 R 000 R 000 R 000 Minor assets ,863-3,863 TOTAL ,863-3,863 Number of R1 minor assets Number of minor assets at cost TOTAL NUMBER OF MINOR ASSETS Specialised military assets Intangible assets Heritage assets Machinery and equipment Biological assets Total ,575-3, ,575-3,

144 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Intangible Capital Assets MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Opening balance Current Year Adjustments to prior year balances Additions Disposals Closing Balance R 000 R 000 R 000 R 000 R 000 CAPITALISED DEVELOPMENT COSTS COMPUTER SOFTWARE MASTHEADS AND PUBLISHING TITLES PATENTS, LICENCES, COPYRIGHT, BRAND NAMES, TRADEMARKS RECIPES, FORMULAE, PROTOTYPES, DESIGNS, MODELS SERVICES AND OPERATING RIGHTS OTHER INTANGIBLES TOTAL INTANGIBLE CAPITAL ASSETS

145 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Additions ADDITIONS TO INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Cash Non-Cash (Development work in progress current costs) Received current year, not paid (Paid current year, received prior year) Total R 000 R 000 R 000 R 000 R 000 CAPITALISED DEVELOPMENT COSTS COMPUTER SOFTWARE MASTHEADS AND PUBLISHING TITLES PATENTS, LICENCES, COPYRIGHT, BRAND NAMES, TRADEMARKS RECIPES, FORMULAE, PROTOTYPES, DESIGNS, MODELS SERVICES AND OPERATING RIGHTS OTHER INTANGIBLES TOTAL ADDITIONS TO INTANGIBLE CAPITAL ASSETS

146 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Disposals DISPOSALS OF INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Sold for cash Transfer out or destroyed or scrapped Total disposals Cash Received Actual R 000 R 000 R 000 R 000 CAPITALISED DEVELOPMENT COSTS COMPUTER SOFTWARE MASTHEADS AND PUBLISHING TITLES PATENTS, LICENCES, COPYRIGHT, BRAND NAMES, TRADEMARKS RECIPES, FORMULAE, PROTOTYPES, DESIGNS, MODELS SERVICES AND OPERATING RIGHTS OTHER INTANGIBLES TOTAL DISPOSALS OF INTANGIBLE CAPITAL ASSETS

147 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Movement for 2009/10 MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2010 Opening balance Additions Disposals Closing balance R 000 R 000 R 000 R 000 CAPITALISED DEVELOPMENT COSTS COMPUTER SOFTWARE MASTHEADS AND PUBLISHING TITLES PATENTS, LICENCES, COPYRIGHT, BRAND NAMES, TRADEMARKS RECIPES, FORMULAE, PROTOTYPES, DESIGNS, MODELS SERVICES AND OPERATING RIGHTS OTHER INTANGIBLES TOTAL INTANGIBLE CAPITAL ASSETS

148 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Immovable Tangible Capital Assets MOVEMENT IN IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Opening balance Curr Year Adjustments to prior year balances Additions Disposals Closing Balance R 000 R 000 R 000 R 000 R 000 BUILDINGS AND OTHER FIXED STRUCTURES 1,474, ,687-2,225,218 Dwellings 366,887-83, ,235 Non-residential buildings 1,107, ,339-1,774,983 Other fixed structures HERITAGE ASSETS 3,253-27,408-30,661 Heritage assets 3,253-27,408-30,661 LAND AND SUBSOIL ASSETS Land Mineral and similar nonregenerative resources INVESTMENT PROPERTY Investment property TOTAL IMMOVABLE TANGIBLE CAPITAL ASSETS 1,477, ,095-2,255,879 The Department is currently still in the process of vesting properties to ensure compliance with GIAMA as custodian of immovable assets of the Province. 146

149 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Additions ADDITIONS TO IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Cash Non-cash (Capital Work in Progress current costs and finance lease payments) Received current, not paid (Paid current year, received prior year) Total R 000 R 000 R 000 R 000 R 000 BUILDING AND OTHER FIXED STRUCTURES 11, ,687 (11,145) - 750,687 Dwellings - 83, ,348 Non-residential buildings - 667, ,339 Other fixed structures 11,145 - (11,145) - - HERITAGE ASSETS - 27, ,408 Heritage assets - 27, ,408 LAND AND SUBSOIL ASSETS Land Mineral and similar nonregenerative resources INVESTMENT PROPERTY Investment property TOTAL ADDITIONS TO IMMOVABLE TANGIBLE CAPITAL ASSETS 11, ,095 (11,145) - 778,

150 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Disposals DISPOSALS OF IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011 Sold for cash Transfer out or destroyed or scrapped Total disposals Cash Received Actual R 000 R 000 R 000 R 000 BUILDINGS AND OTHER FIXED STRUCTURES Dwellings Non-residential buildings Other fixed structures HERITAGE ASSETS Heritage assets LAND AND SUBSOIL ASSETS Land Mineral and similar nonregenerative resources INVESTMENT PROPERTY Investment property TOTAL DISPOSALS OF IMMOVABLE TANGIBLE CAPITAL ASSETS

151 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Movement for 2009/10 MOVEMENT IN IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2010 Opening balance Additions Disposals Closing balance R 000 R 000 R 000 R 000 BUILDINGS AND OTHER FIXED STRUCTURES 1,444,637 29,894-1,474,531 Dwellings 366, ,887 Non-residential buildings 1,077,750 29,894-1,107,644 Other fixed structures HERITAGE ASSETS - 3,253-3,253 Heritage assets - 3,253-3,253 LAND AND SUBSOIL ASSETS Land Mineral and similar non-regenerative resources INVESTMENT PROPERTY Investment property TOTAL IMMOVABLE TANGIBLE ASSETS 1,444,637 33,147-1,477,

152 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Immovable assets valued at R1 IMMOVABLE ASSETS VALUED AT R1 IN THE ASSET REGISTER AS AT 31 MARCH 2011 Buildings and other fixed structures Heritage assets Land and subsoil assets Investment property Total R 000 R 000 R 000 R 000 R 000 R1 Immovable assets TOTAL IMMOVABLE ASSETS VALUED AT R1 IN THE ASSET REGISTER AS AT 31 MARCH 2010 Buildings and other fixed structures Heritage assets Land and subsoil assets Investment property Total R 000 R 000 R 000 R 000 R 000 R1 Immovable assets TOTAL

153 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Transfer of functions During 2009/10 the following trading accounts of the Department were closed: Emoyeni Conference Centre, Kopanong Precinct and Impophoma Infrastructure Support Entity. All functions had to be transferred into the Department as of 1 April All closing balances of the entities were transferred to the Department. All assets and liabilities of the entities, together with commitments were transferred to the Department. The transfer of functions had an impact on the Department in respect of resources as funds had to be shifted during the adjustment budget to fund mainly compensation of employees of officials of the entities. All the accruals of the entities had to be paid by the Department. Disclosed in this note is the impact of the transfers of functions on the balances of the Department Statement of Financial Position Note Bal per dept 2009/10 AFS before transfer EMOYENI received KOPANONG received IMPOPHOMA received 2009/10 Bal after transfer 2009/ / / / /10 ASSETS R 000 R 000 R 000 R 000 R 000 Current Assets 518, , ,665 Unauthorised expenditure 113, ,447 Fruitless and wasteful expenditure Cash and cash equivalents 129, , ,241 Other financial assets Prepayments and advances Receivables 275, , ,960 Loans Non-Current Assets Investments Loans Other financial assets TOTAL ASSETS 518, , ,

154 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 LIABILITIES Current Liabilities 518,203 11,468 46, , ,005 Voted funds to be surrendered to the Revenue 160, ,157 Fund Departmental revenue and NRF Receipts to be 5, ,718 surrendered to the Revenue Fund Direct Exchequer receipts to be surrendered to the Revenue Fund Bank Overdraft Payables 352,328 11,468 46, , ,130 Aid assistance repayable Aid assistance unutilised Non-Current Liabilities Payables TOTAL LIABILITIES 518,203 11,468 46, , ,005 NET ASSETS - (10,908) (45,601) 23,169 (33,340) 152

155 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH Disclosure Notes Note Bal per dept 2009/10 AFS before transfer EMOYENI received KOPANONG received IMPOPHOMA received 2009/10 Bal after transfer 2009/ / / / /10 R 000 R 000 R 000 R 000 R 000 Contingent liabilities 2, ,299 49,330 Contingent assets Commitments 1,266, ,559-1,587,678 Accruals 404,525 1, , , ,573 Employee benefits 55, ,674 Lease commitments Operating lease 1,009,275-45,193 37,222 1,091,690 Lease commitments Finance lease 3, ,989 Lease commitments Operating lease revenue - - 3,389-3,389 Receivables for departmental revenue 3,110 3,367 17,465-23,942 Irregular expenditure 500, , ,484 Fruitless and wasteful expenditure 13, ,210 47,675 Impairment and other provisions 17, ,976 Movable tangible capital assets 21,315 3, ,009 88,702 Immovable tangible capital assets 1,477, ,100-2,145,884 Intangible capital assets Section 42 prescribes that assets and liabilities which are transferred should be verified by both the transferring and receiving department. All movable and immovable assets were verified and included in the asset register of the Department. The immovable assets included in the asset register are mainly the buildings of the Kopanong Precinct and the Emoyeni Conference centre. Liabilities and commitments of the entities were also identified and absorbed by the Department. The restated opening balances as per this disclosure note, relating to the Statement of Financial Position, specifically with regards to the bank accounts, receivables and payables, were not restated in the actual Statement of Financial Position. It is important though for the reader of the financial statements to note what the impact would have been, if the Statement of Financial Position would have been restated. Certain accounts were settled from the entity bank accounts as it related to claims from suppliers that were suppliers of the entities and not the Department. 153

156 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH STATEMENT OF CONDITIONAL GRANTS RECEIVED GRANT ALLOCATION SPENT 2009/10 NAME OF DEPARTMENT Division of Revenue Act/ Provincial Grants Roll Overs DORA Adjustments Other Adjustments Total Available Amount received by Department Amount spent by Department % of available funds spent by Department Division of Revenue Act Amount spent by department R 000 R 000 R'000 R'000 R 000 R'000 R'000 % R 000 R 000 National Public Works 191, , , , ,819 72% 401, , , , , , ,819 72% 401, ,

157 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH STATEMENT OF CONDITIONAL/UNCONDITIONAL GRANTS PAID TO MUNICIPALITIES GRANT ALLOCATION TRANSFER NAME OF MUNICIPALITY Division of Revenue Act Roll Overs Adjustments Total Available Actual Transfer Funds Withheld Reallocations by National Treasury or National Department R 000 R 000 R'000 R'000 R'000 % City of Joburg 26,435 - (9,947) 16,488 13, City of Tshwane 106,762-30, , , Ekurhuleni 29,240-68,728 97,968 67, Emfuleni 11,499-6,546 18,045 12, Lesedi 848-2,852 3, Merafong 2,892-1,605 4,497 2, Midvaal 2,287-2,806 5,093 4, Mogale 4,706 - (3,367) 1, Nokeng tsa Taemane 1,433-2,713 4, Randfontein 4,580 - (635) 3,945 3, Westonaria 699-1,724 2, Vehicles & licenses , , , ,

158 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH WORLD CUP EXPENDITURE 2010/ /10 Tickets acquired Quantity R 000 R / /10 Distribution of tickets Quantity R 000 R 000 Clients/Stakeholders Accounting Authority Executive Non-executive Accounting Officer Senior Management Other employees Family members of officials Other government entities Audit Committee members Other Please specify Please specify Total

159 DISCLOSURE NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH / /10 Travel Costs R 000 R 000 Clients/Stakeholders - - Accounting Authority - - Executive - - Non-executive - - Accounting Officer - - Senior Management - - Other employees - - Family members of officials - - Other government entities - - Audit Committee members - - Other - - Please specify - - Please specify - - Total / /10 Purchase of world cup apparel Quantity R 000 R 000 Specify the nature of the purchase (e.g. t-shirts, caps, etc.) Please specify Please specify Total Total world cup expenditure

160 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 1A STATEMENT OF CONDITIONAL GRANTS PAID TO MUNICIPALITIES NAME OF MUNICIPALITY Claims against state prov dept Vehicle and Licences Division of Revenue Act GRANT ALLOCATION TRANSFER SPENT 2009/10 Roll Overs Adjustments Total Available Actual Transfer Funds Withheld Reallocations by National Treasury or National Department Amount received by Municipality Amount spent by Municipality % of available funds spent by Municipality Division of Revenue Act R 000 R 000 R'000 R'000 R'000 % R'000 R'000 % R , City of Joburg 26,435 - (9,947) 16,488 13, ,188-8,356 City of Tshwane 106,762-30, , , , Ekurhuleni 29,240-68,728 97,968 67, , Emfuleni 11,499-6,546 18,045 12, , Lesedi 848-2,852 3, Merafong 2,892-1,605 4,497 2, , Midvaal 2,287-2,806 5,093 4, , Mogale 4,706 - (3,367) 1, Nokeng tsa 1,433-2,713 4, Taemane Randfontein 4,580 - (635) 3,945 3, , Westonaria 699-1,724 2, , , , , ,820-12,

161 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 1C STATEMENT OF TRANSFERS TO DEPARTMENTAL AGENCIES AND ACCOUNTS TRANSFER ALLOCATION TRANSFER 2009/10 Roll Overs Total Available Actual Transfer % of Available funds Transferred Adjusted Appropriation Adjustments Appropriation Act DEPARTMENT/ AGENCY/ ACCOUNT R'000 R'000 R'000 R'000 R'000 % R'000 Kopanong 158, , ,054 95% 290, , , ,054 95% 290,

162 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 1H STATEMENT OF TRANSFERS TO HOUSEHOLDS TRANSFER ALLOCATION EXPENDITURE 2009/10 Adjusted Appropriation Act Roll Overs Total Available Actual Transfer % of Available funds Transferred Adjustments Appropriation Act HOUSEHOLDS R'000 R'000 R'000 R'000 R'000 % R'000 Transfers Bursaries (Non-Empl) 1, , % 1,446 Injury on Duty Leave Gratuity ,966-1,778 1, ,001 2,913-3,382 Subsidies Total 1, ,001 2,913 3,

163 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 1K STATEMENT OF GIFTS, DONATIONS AND SPONSORSHIPS MADE AND REMMISSIONS, REFUNDS AND PAYMENTS MADE AS AN ACT OF GRACE 2010/ /10 NATURE OF GIFT, DONATION OR SPONSORSHIP (Group major categories but list material items including name of organisation R 000 R 000 Paid in cash Donations and Gifts - 10 Subtotal - 10 Made in kind Subtotal - - Remissions, refunds, and payments made as an act of grace Subtotal - - TOTAL

164 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 3A STATEMENT OF FINANCIAL GUARANTEES ISSUED AS AT 31 MARCH 2011 LOCAL Guarantor institution Guarantee in respect of Motor vehicles Original guaranteed capital amount Opening balance 1 April 2010 Guarantees draw downs during the year Guarantees repayments/ cancelled/ reduced/ released during the year Revaluations Closing balance 31 March 2011 Guaranteed interest for year ended 31 March 2011 Realised losses not recoverable i.e. claims paid out R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 Subtotal Housing Standard Bank of SA Housing (29) Nedbank Housing Firstrand Bank Housing ABSA Housing (26) Company Unique Housing Finance Old Mutual Housing Finance Peoples Bank Housing Nedbank ltd Housing (6) Incorporating NB Firstrand Bank ltd (15)

165 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 Guarantor institution Old Mutual Bank DIV of Nedbank Guarantee in respect of Original guaranteed capital amount Opening balance 1 April 2010 Guarantees draw downs during the year Guarantees repayments/ cancelled/ reduced/ released during the year Revaluations Closing balance 31 March 2011 Guaranteed interest for year ended 31 March 2011 Realised losses not recoverable i.e. claims paid out R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 Housing Investec Bank ltd Housing Nedcor Invesment Housing Bank ltd Community Bank Housing Subtotal 1,291 1,488 - (76) - 1, Other Subtotal TOTAL 1,291 1,488 - (76) - 1,

166 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 3B STATEMENT OF CONTINGENT LIABILITIES AS AT 31 MARCH 2011 Nature of Liability Claims against the department Opening Balance 1 April 2010 Liabilities incurred during the year Liabilities paid/ cancelled/ reduced during the year Liabilities recoverable (Provide details hereunder) Closing Balance 31 March 2011 R 000 R 000 R 000 R 000 R 000 Pending Legal Claims , ,142 Subtotal , ,142 Environmental Liability Subtotal Other Subtotal TOTAL , ,

167 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 3B (continued) Nature of Liabilities recoverable Opening Balance 1 April 2010 Details of Liability and Recoverability Movement during year Closing Balance 31 March 2011 R 000 R 000 R 000 Total

168 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 4 CLAIMES RECOVERABLE Government Entity Confirmed balance outstanding Unconfirmed balance outstanding Total 31/03/ /03/ /03/ /03/ /03/ /03/2010 R 000 R 000 R 000 R 000 R 000 R 000 Department Dept of Agriculture 10, ,228 10,381 8,228 Dept of Community Safety , ,500 Dept of Education 3, , Dept of Health - 52,655 1,682-1,682 52,655 Dept of Social Welfare - - 4, , Dept of Roads and Transport Dept of Economic Development ,112 53,326 7,188 10,962 21,300 64,288 Other Government Entities Emoyeni - 8, ,600 Impophoma - 192, ,709 Precinct , ,309 TOTAL - 254,635 7,188 10,962 21, ,

169 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 5 INTER-GOVERNMENT PAYABLES GOVERNMENT ENTITY Confirmed balance outstanding Unconfirmed balance outstanding Total 31/03/ /03/ /03/ /03/ /03/ /03/2010 R 000 R 000 R 000 R 000 R 000 R 000 DEPARTMENTS Current Dept of Roads and Transport - 346, , , ,847 Subtotal - 346, , , ,847 Non-current Subtotal Total - 346, , , ,847 OTHER GOVERNMENT ENTITY Current Other Subtotal Non-current Subtotal Total

170 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011 ANNEXURE 6 INVENTORY Inventory Note Quantity 2010/11 Quantity 2009/10 R 000 R 000 Opening balance - 3,218-4,478 Add/(Less): Adjustments to prior year balance Add: Additions/Purchases - Cash - 8,808-20,503 Add: Additions - Non-cash (Less): Disposals (Less): Issues - (8,329) - (21,762) Add/(Less): Adjustments (1) Closing balance - 3,697-3,

171 Section 4 Human Resource Management 169

172 4. HUMAN RESOURCE MANAGEMENT Service Delivery Table 4.1 Main services provided and standards Main services Actual customers Potential customers Inspection of GPG buildings to comply with OHSA and building regulation Compilation of User Asset Management Plan and Custodian Asset Management plan for GPG Departments Source office space on behalf of client Departments Leasing out of state owned residential houses, vacant land and commercial properties Construction of Hospitals Construction of Stadiums Construction of New Schools Renovation & Upgrading of Schools GPG Departments Other GPG Departments Standards of service Good All GPG Departments General Public Compliance to GIAMA Act. no. 19 of 2007 and PFMA Act. No 1 of Gauteng Provincial Government Departments Government officials and members of the public Department of Health & Social Development Department of Sports, Recreation, Arts & Culture Department of Education Department of Education GPG Departments General Public Sourcing building according to the client Department s requirements Signing of lease agreement. Signing lease agreement on market related rentals (MRR) in compliance to PFMA Actual achievement against standards Buildings complying with OHSA and building regulations Compiled 10 User Asset Management Plans and Draft Custodian Asset Management Plan Client Department satisfied with what we have sourced Lease agreement being signed by both parties on MRR NA Good As per Service Level Agreement NA Good As per Service Level Agreement NA Good As per Service Level Agreement NA Good As per Service Level Agreement 170

173 Main services Actual customers Potential customers Resorts & Entertainment Monitor and manage Departmental Performance Planning of Departmental Performance Procurement of goods and services Risk Identification and assessments. Conduct Risk Assessments, in three levels (Global, Strategic and Operational) in the Department Department of Agriculture & Rural Development All branches and Directorates All branches and Directorates Internal business units External service providers External client Departments Global Department-wide HOD, DDGs and Chief Directors Strategic Branchwide DDGs, Chief Directors and Director. Standards of service Actual achievement against standards NA Good As per Service Level Agreement All branches and Directorates All branches and Directorates HDIs Black Women Youth People with disabilities More client Departments Global Department-wide HOD, DDGs and Chief Directors. Strategic Branchwide DDGs, Chief Directors and Director. Quarterly Performance Reports and Programme of Action (POA) 1 Annual Performance Plan (APP) and Revised Strategic Plan Provision of an excellent standard of customer service and client relations 1 Global risk assessment Report 4 Strategic risk Assessment Reports for each Branch 4 Quarterly Performance Reports and 12 POA Reports 1 Annual Performance Plan completed. Revised Strategic Plan completed Current achievement of an average standard of service 1 Global risk assessment Report 4 Strategic risk Assessment Reports for each Branch Operational Directorate-wide Directors, Deputy Directors and selected Staff Operational Directorate-wide Directors, Deputy Directors and selected Staff 1 Control Risk Self Assessment Report per Directorate 1 Control Risk Self Assessment Report per Directorate 171

174 Main services Actual customers Potential customers Facilitate the Departmental Risk Management Operational Committee Facilitate the Departmental Business Continuity Plan Coordination of cooperatives registration Coordination of CIDB registration and upgrade Nominated Members of the Committee from within the Department All Directorates and Branches, including Regional Offices Emerging construction cooperatives Emerging contractors and cooperatives Invited External Attendees All Directorates and Branches, including Regional Offices All groups which want to start a construction business Registered construction companies Standards of service Signed minutes of meeting held Departmental Business Continuity Plan Cooperatives Act 14 of 2005 CIDB Act of 2000 Actual achievement against standards Signed minutes of meeting held Departmental Business Continuity Plan Achieved Achieved TABLE Consultation arrangements with customers Type of arrangement Actual customers Potential customers Actual achievements GIAMA Forums per quarter All GPG Departments General Public 3 GIAMA Forums Monthly meetings, telephone and communications on an ad hoc basis GPG client Departments, commercial tenants NA Regular liaison with customers took place One on one sessions Tenants Applicants for houses Signing of lease agreement Door to door verification exercise Client Review Meetings Tenants NA Signing of lease agreements and feedback from tenants. Health & Social Development NA 6 meetings were held Client Review Meetings Department of Education NA 4 meetings were held Client Review Meetings DARD NA 5 meetings were held 172

175 Type of arrangement Actual customers Potential customers Actual achievements Client Review Meetings Department of Infrastructure Development NA 3 meetings were held Client Review Meetings Health & Social Development NA 6 meetings were held APP one on one sessions with Chief Directorates and Directorates Chief Directorates and Directorates Chief Directorates and Directorates APP one on one sessions with Chief Directorates and Directorates conducted Contract award consultation Internal business units External service providers External client Departments HDIs Black Women Youth People with disability Consultations within 52 hours after contract award Performance management monitoring process implemented More client Departments SLA (service deliverables) Internal business units External service providers External client Departments HDIs Black Women Youth SLA implemented and maintained even though system related challenges are experienced People with disability More client Departments Intervention to minimise payment turnaround times Internal business units External service providers External client Departments HDIs Black Women Youth Above average achievement despite system related challenges People with disability More client Departments SCM process and opportunities workshops Internal business units External service providers External client Departments HDIs Black Women Youth People with disability More client Departments Excellent achievement in keeping internal and external customers abreast with SCM developments, requirements and opportunities Attending contractor forums meetings Emerging contractors and cooperatives Emerging contractors and cooperatives Achieved One-on-one consultations at CCC centers Emerging contractors and cooperatives Emerging contractors and cooperatives Achieved 173

176 Table Service delivery access strategy Access strategy One on one client visit to the Department A help desk was established where clients could log calls/ send s to report breakdowns/defects, after hours emergencies were reported to personnel on standby via cell phone Use of GPG intranet Performance Plan and Performance Reports Tender, RFI, RFQ and EOI Advertisement in Media Establishment of database to streamline quotation process Tender, RFI, RFQ and EOI Advertisement in state Tender Bulletin Promotion of spread of work in line with B-BBEE, CIDB and PPPFA Risk Assessment Reports CCC satellite offices Actual achievement Conducted visits to all 11 client Departments All clients communicated as per facilities provided GPG intranet used Annual Performance Plan and Annual Report available on the website to inform the public and stakeholders about Departmental Performance Good In progress Good Good 1 Global risk assessment Report, 4 Strategic risk Assessment Reports for each Branch, 1 Control Risk Self Assessment Report per Directorate 5 satellite offices opened and functional CCC main centers Ad-hoc service points at remote areas of GP Municipalities Functional Achieved and also on-going Table Service information tool Types of information tool Conduct client surveys Letters to tenants Reports State Tender Bulletin Actual achievements 2 client surveys conducted Signing of lease agreements Reports completed Good 174

177 Types of information tool DTI Reporting Compulsory briefing and clarification sessions per tender Monthly variance reporting Utilisation of SAP, BAS and SRM to facilitate procurement of goods and services Media publications DID website Ad-hoc service points Brochures and publications Constant communication with Contractor Forums Actual achievements Good Good Good Good Good Achieved Achieved Achieved Achieved Table Complaints mechanism Complaints mechanism Departments requested to complete GIAMA questionnaires Complaints were logged at the help desk, or telephonically to senior management One on one at the Head Office Door to door verification exercise Client review meetings Community meetings Meetings with community structures Meetings with Councilors Written complaints acknowledged, investigated, and acted upon with the relevant feedback Direct consultation facilitated when necessary Suggestions box Service evaluation form Actual achievement Questionnaires were issued out and completed by user Departments Complaints were resolved Resolving of queries and complaints Resolving of queries and complaints On a monthly basis Conducted Conducted Conducted Good Good Achieved Achieved 175

178 4.2. Expenditure Table Personnel costs by programme Programme Total expenditure R 000 Personnel expenditure R 000 Training expenditure R 000 Professional and special services R 000 Personnel cost as a percent of total expenditure Average personnel cost per employee R 000 Administration % 37 Public Works % 225 Community Based Programme % 11 Total % 272 Table Personnel costs by salary bands Salary bands Personnel Expenditure R 000 % of total personnel cost Average personnel cost per employee R 000 Lower skilled (Levels 1-2) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) Contract (level 1-2) Contract (level 3-5) Contract (level 6-8) Contract (level 9-12)

179 Salary bands Personnel Expenditure R 000 % of total personnel cost Average personnel cost per employee R 000 Contract (level 13-16) Periodic Remuneration Abnormal Appointment Total Table Salaries, Overtime, Home Owners Allowance and Medical Assistance by programme Salary bands Salaries Overtime Home owners allowances Medical assistance Amount R 000 Salaries as a % of personnel cost Amount R 000 Overtime as a % of personnel cost Amount R 000 Home owner allowance as a % of personnel cost Amount R 000 Medical assistance as a % of personnel cost Administration % % % % Public Works % % % % Community Based Programme % % % Total % % % % 177

180 4.3. Employment and Vacancies Table Employment and vacancies by programme Programme Number of posts Number of posts filled Vacancy rate Number of posts filled additional to the establishment Administration Infrastructure Development Community Based Programme Total * *The Department had a vacancy rate of 49%, however 20% of the total vacancy rate was declared unfunded posts therefore the Department had 29% vacancy rate for the year under review. Table Employment and vacancies by salary bands Salary band Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) Contract (Levels 3-5), Permanent Contract (Levels 6-8), Permanent Contract (Levels 9-12), Permanent Number of posts Number of posts filled Vacancy Rate Number of posts filled additional to the establishment

181 Salary band Number of posts Number of posts filled Vacancy Rate Number of posts filled additional to the establishment Contract (Levels 13-16), Permanent Total * * *The Department had a vacancy rate of 49%, however 20% of the total vacancy rate was declared unfunded posts therefore the Department had 29% vacancy rate for the year under review Table Employment and vacancies by critical occupation Critical Occupations Administrative related, Permanent All artisans in the building metal machinery etc., Permanent Architects town and traffic planners, Permanent Artisan project and related superintendents, Permanent Auxiliary and related workers, Permanent Binding and related workers, Permanent Bus and heavy vehicle drivers, Permanent Cartographers and surveyors, Permanent Cartographic surveying and related technicians, Permanent Chemical and physical science technicians, Permanent Civil engineering technicians, Permanent Number of Posts Number of Posts Filled Vacancy Rate Number of Posts Filled Additional to the Establishment

182 Critical Occupations Cleaners in offices workshops hospitals etc., Permanent Client inform clerks (switchboard reception information clerks), Permanent Compositors typesetters & related printing workers, Permanent Computer system designers and analysts, Permanent Electrical and electronics engineering technicians, Permanent Engineering sciences related, Permanent Engineers and related professionals, Permanent Finance and economics related, Permanent Financial and related professionals, Permanent Financial clerks and credit controllers, Permanent Food services aids and waiters, Permanent Head of Department/chief executive officer, Permanent Human resources & organisational development & related professionals, Permanent Human resources clerks, Permanent Human resources related, Permanent Identification experts, Permanent Number of Posts Number of Posts Filled Vacancy Rate Number of Posts Filled Additional to the Establishment

183 Critical Occupations Information technology related, Permanent Number of Posts Number of Posts Filled Vacancy Rate Number of Posts Filled Additional to the Establishment Inspectors of apprentices, works and vehicles, Permanent Language practitioners, interpreters & other commun, Permanent Legal related, Permanent Library mail and related clerks, Permanent Light vehicle drivers, Permanent Logistical support personnel, Permanent Material-recording and transport clerks, Permanent Messengers, porters and deliverers, Permanent Other administrat & related clerks and organisers, Permanent Other administrative policy and related officers, Permanent Other information technology personnel, Permanent Other occupations, Permanent Photographic, lithographic and related workers, Permanent Quantity surveyors & related professionals not classified elsewhere, Permanent Risk management and security services, Permanent

184 Critical Occupations Secretaries & other keyboard operating clerks, Permanent Number of Posts Number of Posts Filled Vacancy Rate Number of Posts Filled Additional to the Establishment Security officers, Permanent Senior managers, Permanent Trade labourers, Permanent Trade related, Permanent Trade/industry advisers & other related professions, Permanent Water plant and related operators, Permanent Total * * *The Department had a vacancy rate of 49%, however 20% of the total vacancy rate was declared unfunded posts therefore the Department had 29% vacancy rate for the year under review 4.4. Job evaluation Table Job Evaluation: April 2010 to March 2011 Salary band Number of posts Number of Jobs Evaluated % of posts evaluated by salary bands Posts Upgraded Number % of posts evaluated Posts Downgraded Number % of posts evaluated Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) Contract (Levels 3-5) Contract (Levels 6-8)

185 Salary band Number of posts Number of Jobs Evaluated % of posts evaluated by salary bands Posts Upgraded Number % of posts evaluated Posts Downgraded Number % of posts evaluated Contract (Levels 9-12) Contract (Levels 13-16), Permanent Total Table Profile of employees whose salary positions were upgraded due to their posts being upgraded Beneficiaries African Asian Coloured White Total Female Male Total Employees with a disability Table Employees whose salary level exceed the grade determined by job evaluation Occupation Number of employees Job evaluation level Remuneration level Reason for deviation N/A 0 N/A N/A N/A Total Number of Employees whose salaries exceeded the level determined by job evaluation in 2010/11 Percentage of total employment N/A N/A 183

186 Table Profile of employees whose salary level exceed the grade determined by job evaluation Beneficiaries African Asian Coloured White Total Female Male Total Employees with a disability 0 184

187 4.5. Employment changes Table Annual turnover rates by salary band for the period April 2010 to March 2011 Salary Band Number of employees per band as on 1 April 2010 Appointments and transfers into the Department Terminations and transfers out of the Department Turnover rate Skilled (Levels 3-5) Highly skilled production(levels 6-8) Highly skilled supervision(levels 9-12) Senior Management Service Band A Senior Management Service Band B Senior Management Service Band C Senior Management Service Band D Contract (Levels 3-5), Permanent Contract (Levels 6-8), Permanent Contract (Levels 9-12), Permanent Contract (Band A), Permanent Contract (Band B), Permanent Contract (Band C), Permanent Contract (Band D), Permanent Total

188 Table Annual turnover rates by critical occupation for the period April 2010 to March 2011 Occupation Employment Appointments Terminations Turnover Rate at Beginning of Period (April 2010) Administrative related, Permanent All artisans in the building metal machinery etc., Permanent Architects town and traffic planners, Permanent Artisan project and related superintendents, Permanent Auxiliary and related workers, Permanent Building and other property caretakers, Permanent Bus and heavy vehicle drivers, Permanent Civil engineering technicians, Permanent Cleaners in offices, workshops, hospitals etc, Permanent Client inform clerks (switchb recept inform clerks), Permanent Communication and information related, Permanent Compositors, typesetters & related printing workers, Permanent Computer programmers, Permanent Computer system designers and analysts, Permanent Electrical and electronics engineering technicians, Permanent Engineering sciences related, Permanent Engineers and related professionals, Permanent

189 Occupation Finance and economics related, Permanent Financial and related professionals, Permanent Financial clerks and credit controllers, Permanent Food services aids and waiters, Permanent General legal administration & rel. professionals, Permanent Head of Department/Chief Executive officer, Permanent Human resources & organisat developm & relate prof, Permanent Employment at Beginning of Period (April 2010) Appointments Terminations Turnover Rate Human resources clerks, Permanent Human resources related, Permanent Identification experts, Permanent Information technology related, Permanent Inspectors of apprentices works and vehicles, Permanent Language practitioners, interpreters & other commun, Permanent Legal related, Permanent Library mail and related clerks, Permanent Light vehicle drivers, Permanent Logistical support personnel, Permanent Material-recording and transport clerks, Permanent Messengers porters and deliverers, Permanent

190 Occupation Employment Appointments Terminations Turnover Rate at Beginning of Period (April 2010) Motor vehicle drivers, Permanent Motorised farm and forestry plant operators, Permanent Other administrative & related clerks and organisers, Permanent Other administrative policy and related officers, Permanent Other information technology personnel, Permanent Other occupations, Permanent Printing and related machine operators, Permanent Quantity surveyors & rela prof not class elsewhere, Permanent Risk management and security services, Permanent Road trade workers, Permanent Road workers, Permanent Secretaries & other keyboard operating clerks, Permanent Security guards, Permanent Security officers, Permanent Senior managers, Permanent Social work and related professionals, Permanent Trade labourers, Permanent Trade related, Permanent Water plant and related operators, Permanent Total *In Terms of the Annual report 7 Road Trade Workers and 112 Road Workers are not necessarily DID Employees but are reflected on DID staff establishment. The Department through its HR audit project has transferred these employees from the staff establishment of DID to DRT staff establishment. 188

191 Table Reasons why staff is leaving the department Termination Type Number % of total Death Resignation Expiry of contract Dismissal operational changes 0 0 Dismissal misconduct Dismissal inefficiency 0 0 Discharged due to ill-health 0 0 Retirement Transfers to other Public Service Departments Other 0 0 Total

192 Table Promotions by critical posts Occupation Employment at Beginning of Period (April 2010) Promotions to another Salary Level Salary Level Promotions as a % of Employment Progressions to another Notch within Salary Level Notch progressions as a % of Employment Administrative related All artisans in the building metal machinery etc. Architects town and traffic planners Artisan project and related superintendents Auxiliary and related workers Building and other property caretakers Bus and heavy vehicle drivers Civil engineering technicians Cleaners in offices workshops hospitals etc. Client inform clerks (switchboard, reception information clerks) Communication and information related Compositors typesetters & related printing workers Computer programmers. Computer system designers and analysts. Electrical and electronics engineering technicians Engineering sciences related

193 Occupation Engineers and related professionals Finance and economics related Financial and related professionals Financial clerks and credit controllers Food services aids and waiters General legal administration & rel. professionals Head of Department/ Chief Executive officer Employment at Beginning of Period (April 2010) Promotions to another Salary Level Salary Level Promotions as a % of Employment Progressions to another Notch within Salary Level Notch progressions as a % of Employment Human resources & organisat developm & relate prof Human resources clerks Human resources related Identification experts Information technology related Inspectors of apprentices works and vehicles Language practitioners, interpreters & other commun Legal related Library mail and related clerks Light vehicle drivers Logistical support personnel Material-recording and transport clerks

194 Occupation Employment at Beginning of Period (April 2010) Promotions to another Salary Level Salary Level Promotions as a % of Employment Progressions to another Notch within Salary Level Notch progressions as a % of Employment Messengers, porters and deliverers Motor vehicle drivers Motorised farm and forestry plant operators Other administrat & related clerks and organisers Other administrative policy and related officers Other information technology personnel. Other occupations Printing and related machine operators Quantity surveyors & related professional not classified elsewhere Risk management and security services Road trade workers Road workers Secretaries & other keyboard operating clerks Security guards Security officers Senior managers Social work and related professionals Trade labourers Trade related Water plant and related operators Total *In Terms of the Annual report 7 Road Trade Workers and 112 Road Workers are not necessarily DID Employees but are reflected on DID staff establishment. The Department through its HR audit project has transferred these employees from the staff establishment of DID to DRT staff establishment. 192

195 Table Promotions by salary band Salary Band Employees 1 April 2010 Promotions to another salary level Salary bands promotions as a % of employees by salary level Progressions to another notch within a salary level Notch progressions as a % of employees by salary band Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels13-16) Contract (Levels 3-5), Permanent Contract (Levels 9-12), Permanent Contract (Levels 13-16), Permanent Total

196 4.6. Employment Equity Table Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2011 Occupational categories (SASCO) Legislators, senior officials and managers Male Female Total African Coloured Indian White African Coloured Indian White Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations Total Employees with disabilities

197 Table Total number of employees (including employees with disabilities) in each of the following occupational bands as on 31 March 2011 Occupational Bands Male Female African Coloured Indian White African Coloured Indian White Total Top Management Senior Management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making Contract (Top Management), Permanent Contract (Senior Management), Permanent Contract (Professionally qualified), Permanent Contract (Skilled technical), Permanent Contract (Semiskilled), Permanent Total

198 Table Recruitment for the period 1 April 2010 to 31 March 2011 Occupational Bands Male Female African Coloured Indian White African Coloured Indian White Total Top Management Senior Management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making Total Employees with disabilities

199 Table Promotions for the period 1 April 2010 to 31 March 2011 Occupational Bands Male Female African Coloured Indian White African Coloured Indian White Total Top Management Senior Management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making Total Employees with disabilities

200 Table Terminations for the period 1 April 2010 to 31 March 2011 Occupational Bands Male Female African Coloured Indian White African Coloured Indian White Total Top Management Senior Management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making Total Employees with disabilities

201 Table Disciplinary action for the period 1 April 2010 to 31 March 2011 Disciplinary action Male Female African Coloured Indian White African Coloured Indian White Total Table Skills development for the period 1 April 2010 to 31 March 2011 Occupational categories Legislators, senior officials and managers Male Female African Coloured Indian White African Coloured Indian White Total Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations Total Employees with disabilities

202 4.7. Performance Rewards Table Performance rewards by race, gender, and disability Demographics Beneficiary Profile Cost Number of beneficiaries Total number of employees in group % of total within group Cost (R 000) Average cost per employee African, Female ,249 African, Male ,146 3,619 Asian, Female ,294 Asian, Male ,093 Coloured, Female ,965 Coloured, Male ,666 Total Blacks, Female ,283 Total Blacks, Male ,207 3,654 White, Female ,697 White, Male ,516 Employees with a disability ,243 Total ,183 4,

203 Table Performance Rewards by salary bands for personnel below Senior Management Service Salary Bands Beneficiary Profile Cost Number of beneficiaries Number of employees % of total within salary bands Total Cost (R 000) Average cost per employee Skilled (Levels 3-5) ,866 3,000 Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) ,550 5, ,181 Total Table Performance Rewards by critical occupations, 1 April 2010 to 31 March 2011 Critical Occupations Number of Beneficiaries Total Employment Percentage of Total Employment Cost (R'000) Average Cost per Beneficiary (R) Administrative related All artisans in the building metal machinery etc Architects, town and traffic planners Artisan project and related superintendents Auxiliary and related workers Building and other property caretakers Bus and heavy vehicle drivers Civil engineering technicians Cleaners in offices, workshops, hospitals etc. Client inform clerks (switchboard reception information clerks) Communication and information related Compositors typesetters & related printing workers

204 Critical Occupations Number of Beneficiaries Total Employment Percentage of Total Employment Cost (R'000) Average Cost per Beneficiary (R) Computer programmers Computer system designers and analysts Electrical and electronics engineering technicians Engineering sciences related Engineers and related professionals Finance and economics related Financial clerks and credit controllers Food services aids and waiters General legal administration & related professionals Head of Department/Chief Executive officer Human resources & organisational development & related professionals Human resources clerks Human resources related Identification experts Inspectors of apprentices works and vehicles Language practitioners, interpreters & other communicators Legal related Library mail and related clerks Light vehicle drivers Logistical support personnel Material-recording and transport clerks Messengers porters and deliverers Motor vehicle drivers

205 Critical Occupations Motorised farm and forestry plant operators Other administrat & related clerks and organisers Other administrative policy and related officers Other information technology personnel Number of Beneficiaries Total Employment Percentage of Total Employment Cost (R'000) Average Cost per Beneficiary (R) Other occupations Printing and related machine operators Quantity surveyors & related professionals not classified elsewhere Risk management and security services Road trade workers Road workers Secretaries & other keyboard operating clerks Security guards Security officers Senior managers Social work and related professionals Trade labourers Trade related Water plant and related operators Total

206 Table Performance related rewards (cash bonus), by salary band, for Senior Management Service Salary Band Beneficiary Profile Total Number of beneficiaries Number of employees % of total within Cost (R 000) band Average cost per employee Total cost as a % of the total personnel expenditure Band A Band B Band C Band D Total Foreign Workers Table Foreign Workers, 1 April 2010 to 31 March 2011, by salary band Salary Band 1 April March 2011 Change Number % of total Number % of total Number % change Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) Abnormal Appointments Total

207 Table Foreign Workers, 1 April 2010 to 31 March 2011, by major occupation Major Occupation 1 April March 2011 Change Number % of total Number % of total Number % change Administrative office workers Craft and related trades workers Professionals and managers Total Leave Utilisation Table Sick leave, 1 January 2010 to 31 December 2010 Salary Band Total days % days with medical certification Number of Employees using sick leave % of total employees using sick leave Average days per employee Estimated Cost (R 000) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels9-12 Senior management (Levels 13-16) Total

208 Table Disability leave (temporary and permanent), 1 January 2010 to 31 December 2010 Salary Band Total days taken % days with medical certification Number of Employees using disability leave % of total employees using disability leave Average days per employee Estimated Cost (R 000) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior management (Levels 13-16) Total Table Annual Leave, 1 January 2010 to 31 December 2010 Salary Bands Total days taken Average per employee Skilled Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision(levels 9-12) Senior management (Levels 13-16) Total

209 Table Capped leave, 1 January 2010 to 31 December 2010 Salary Bands Total days of capped leave taken Average number of days taken per employee Average capped leave per employee as at 31 December 2010 Skilled Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision(levels 9-12) Senior management (Levels 13-16) Total Table Leave payouts for the period 1 April 2010 to 31 March 2011 Reason Total Amount (R 000) Number of Employees Average payment per employee Leave payout for 2010/11 due to non-utilisation of leave for the previous cycle Capped leave payouts on termination of service for 2010/11 Current leave payout on termination of service for 2010/ Total

210 4.10. HIV AIDS and Health promotion programmes Table Steps taken to reduce the risk of occupational exposure Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any) Employees in level 3-8, with level 3-5 being the most affected Key steps taken to reduce the risk Ongoing awareness and counselling services with the assistance of Careway service provider Table Details of Health Promotion and HIV and AIDS Programmes Question Yes No Details, if yes 1. Has the Department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position 2. Does the Department have a dedicated unit or has it designated specific staff members to promote the health and well being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose 3. Has the Department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme 4. Has the Department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent x x x x Ms Phumelele Khumalo, Director; HRM 2 permanent employees and a Regional Program Coordinator to coordinate the program in different regions.(there was no budget allocated for the program, however, R was utilised from goods and services budget) Health screening awareness programme. Counselling and referral services. Physical fitness through EWC. Occupational health and safety. Sports and recreation 208

211 Question Yes No Details, if yes 5. Has the Department reviewed its employment policies and practices to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed 6. Has the Department introduced measures to protect HIV-positive employees or those perceived to be HIV-positive from discrimination? If so, list the key elements of these measures 7. Does the Department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved 8. Has the Department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators x x x x HIV/AIDS Policy reviewed, amendments made and the policy is awaiting approval Reviewed the HIV,AIDS and TB Policy to make provision for stigma and discrimination mitigation Ongoing education of all employees on understanding and addressing stigma and discrimination related to HIV and AIDS. Annual target for employees to undergo HIV Counselling and Testing achieved. Employees who tested HIV positive were referred to public health facilities, medical aid and Careways for further management IEC material distributed throughout the regions. A number of employees reached through HAST education. Condoms supplied on a daily basis in DID. Number of reports prepared and submitted. Attendance registers. 209

212 4.11. Labour Relations Table Collective agreements, 1 April 2010 to 31 March 2011 Total collective agreements NA Table Misconduct and disciplinary hearings finalised, 1 April 2010 to 31 March 2011 Outcomes of disciplinary hearings Number % of total Correctional counselling 0 0 Verbal warning 0 0 Written warning 1 Final written warning 0 0 Suspended without pay 0 0 Fine 0 0 Demotion 0 0 Dismissal Not guilty Case withdrawn 0 0 Total 5 1 Table Types of misconduct addressed at disciplinary hearings Type of misconduct Number % of total Fraud Insubordination Theft Tender irregularity Contravention of PFMA Total

213 Table Grievances lodged for the period 1 April 2010 to 31 March 2011 Grievances Number % of Total Number of grievances resolved Number of grievances not resolved Total number of grievances lodged Total Number of grievances withdrawn Table Disputes lodged with Councils for the period 1 April 2010 to 31 March 2011 Disputes Number % of Total Number of disputes upheld 0 0 Number of disputes dismissed 0 0 Total number of disputes lodged Table Strike actions for the period 1 April 2010 to 31 March 2011 Total number of person working days lost 2644 Total cost (R 000) of working days lost 0 Amount (R 000) recovered as a result of no work no pay 0 Table Precautionary suspensions for the period 1 April 2010 to 31 March 2011 Number of people suspended 8 Number of people whose suspension exceeded 30 days 8 Average number of days suspended 1350 Cost (R 000) of suspensions R

214 4.12. Skills Development Occupational Categories Legislators, senior officials and managers Gender Number of employees as at 1 April 2010 Training needs identified at start of reporting period Learnerships Skills Programmes & other short courses Other forms of training Total Female Male Professionals Female Technicians and associate professionals Male Female Male Clerks Female Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Male Female Male Female Male Female Male Female Male Elementary occupations Female Male Sub Total Female Male Total

215 Table Training provided 1 April 2010 to 31 March 2011 Occupational Categories Gender Number of employees as at 1 April 2010 Legislators, senior officials and managers Training provided within the reporting period Learnerships Skills Programmes & other short courses Other forms of training Total Female Male Professionals Female Technicians and associate professionals Male Female Male Clerks Female Male Service and sales workers Female Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Male Female Male Female Male Female Male Elementary occupations Female Male Sub Total Female Male Total

216 4.13. Injury on Duty Table Injury on duty, 1 April 2010 to 31 March 2011 Nature of injury on duty Number % of total Required basic medical attention only 0 0 Temporary Total Disablement 0 0 Permanent Disablement 0 0 Fatal 0 0 Total Utilisation of Consultants Table Report on consultant appointments using appropriated funds Project Title Total number of consultants that worked on the project Duration: Months Contract value in Natalspruit Regional Hospital 10 62mths R New Mamelodi Hospital 6 48mths R Tshwane District Hospital 6 21 mths R Germiston Hospital 6 40mths R Orange Farm EMS 1 11mths R Zola Hospital 15 32mths R Steve Biko Hospital 5 60mths R Chris Hani Baragwanath Hospital 8 20mths R Sebokeng Hospital 6 18mths R Sterkfontein Hospital 6 9mths R Eersterus CHC 6 14mths R Dr Yusuf Dadoo EMS 1 8mths R Katlehong Primary School 6 21mths R Baxolele Primary School 6 7mths R Ntuthuko Primary School 6 7mths R MC Weiler Primary School 6 6mths R Rand 214

217 Project Title Total number of consultants that worked on the project Duration: Months Contract value in Sikhulisile Primary School 6 15mths R Upgrade of MOM Primary School 6 7mths R Thulasizwe Primary School 6 17mths R Polokong Primary School 6 29mths R Diepsloot Secondary School 6 18mths R LSEN Schools - Incontinence Clinics Hope LSEN Schools - Incontinence Clinics Jiswa LSEN Schools - Incontinence Clinics Phillip Kushick LSEN Schools - Incontinence Clinics Muriel Brand LSEN Schools - Incontinence Clinics Adelaide Tambo LSEN Schools Incontinence Clinics Upgrade Filadelfia LSEN Schools Incontinence Clinics Upgrade Felicitas LSEN Schools Incontinence Clinics Upgrade Frances Vorwerg Rand 6 8mths R mths R mths R mths R mths R mths R mths R mths R Gontse Primary School 5 56mths R Winnie Mandela Primary School 6 16mths R Bronkhorstpruit Primary School 6 18mths R Simunye Primary School 6 18mths R Rietvallei Primary School 6 17mths R Jabulani Place of Safety 6 9mths R Pabalelo Place of Safety 6 14mths R Ephraim Zulu Old Age Home 6 4mths R

218 Table Analysis of consultant appointments using appropriated funds, in terms of Historically Disadvantaged Individuals (HDIs) Project Title Percentage ownership by HDI groups Percentage management by HDI groups Number of Consultants from HDI groups that work on the project Natalspruit Hospital 50% 83% 5 New Mamelodi Hospital 50% 50% 6 Germiston Hospital 30% 43% 3 Chris Hani Bara Hospital 50% 63% 5 Zola Hospital 30% 62% 8 Weskoppies Hospital 80% 63% 5 Sterkfontein Hospital 100% 100% 5 Steve Biko Hospital 20% 20% 1 Tshwane Hospital 30% 63% 5 Various Schools 100% 100% 1 Table Report on consultant appointments using Donor funds Project Title Total Number of consultants that worked on the project Duration: Work days Donor and Contract value in Rand NA NA NA NA Total number of projects Total individual consultants Total duration: Work days Total contract value in Rand NA NA NA NA Table Analysis of consultant appointments using Donor funds, in terms of Historically Disadvantaged Individuals (HDIs) Project Title Percentage ownership by HDI groups Percentage management by HDI groups Number of Consultants from HDI groups that work on the project NA NA NA NA 216

219 4.15 SIGNING OF PERFORMANCE AGREEMENTS AND FILLING OF POSTS FOR MEMBERS OF SENIOR MANAGEMENT SERVICE (SMS) SMS Level Total number of funded SMS posts per level Total number of SMS members per level Total number of signed Performance Agreements per level Signed Performance Agreements as % of total number of SMS members per level Director General / Head of Department % Salary level 16, but not HOD Salary level % Salary level % Salary level % Total % Reasons for not having concluded Performance Agreements for all SMS members as on 30 September 2010 Some SMS members were not placed during this period as the re-configuration process was in progress. Disciplinary steps taken against SMS members not having concluded Performance Agreements No disciplinary action was taken. 217

220 4.16 FILLING OF SMS POSTS Filling of SMS posts information as on 31 March 2011 SMS level Director General / Head of Department Total number of funded SMS posts per level Total number of SMS posts filled per level 1 1 % of SMS posts filled per level Total number of SMS posts vacant per level % of SMS posts vacant per level 100% - 0% Salary level 16, but not HOD Salary level % 1 20% Salary level % 2 20% Salary level % 5 15% Total % 8 16% SMS posts information as on 30 September 2010 SMS level Director General / Head of Department Total number of funded SMS posts per level Total number of SMS posts filled per level % of SMS posts filled per level Total number of SMS posts vacant per level % of SMS posts vacant per level % - 0% Salary level 16, but not HOD Salary level % 1 20% Salary level % 2 20% Salary level % 5 15% Total % 8 16% 218

221 Reasons for not having complied with the filling of funded vacant SMS- Advertised within 6 months and filled with 12 months after becoming vacant Reasons for vacancies not advertised within 6 months Reasons for vacancies not filled within 6 months Only critical posts were advertised within 6 months, however other SMS posts could not be advertised within 6 months due to the reconfiguration process Reconfiguration process Disciplinary steps taken for not complying with the prescribed timeframes for filling of SMS posts within 12 months None Performance Related Rewards (Cash Bonus) by Salary Band for Senior Management Service SMS Band Number of Beneficiaries Total Employment Percentage of Total Employment Cost R 000 Average Cost per Beneficiary Personnel Cost SMS R 000 Band A % Total %

222 220

223 Section 5 Other Information 221

224 5. OTHER INFORMATION ACRONYMS BAS BBBEE BMT C-AMP CBD CHC CIDB CIP CORBIT CRSA DAC DARD DID DLG&H DRT DOJ &CD EMS EMT EOI EPWP FM GCRA GDE GDF GIAMA GPG GPSSBC HCT HDI IE Works ITIL Basic Accounting System Broad Based Black Economic Empowerment Broad Management Team Custodian Immovable Asset Management Plan Central Business District Community Healthcare Centre Construction Industry Development Board Contractor Incubator Programme Common Objectives for Information and related Technology Control Risk Self Assessment Departmental Acquisition Committee Department of Agriculture and Rural Development Department of Infrastructure Development Department of Local Government and Housing Department of Roads and Transport Department of Justice and Constitutional Development Emergency Medical Services Executive Management Team Expression of interest Expanded Public Works Programme Facility Management Gauteng City Region Academy Gauteng Department of Education Gauteng Department of Finance Government Immovable Asset Management Act Gauteng Provincial Government General Public Service Sectoral Bargaining Council HIV Counselling and Testing Historically Disadvantaged Individual Integrated Electronic Asset Management System Information Technology Infrastructure Library 222

225 MEC MMC MIS MPCC MRR NDRDLR NYS OSHA PC PIE ACT PMDS PSLDC QS RIMS ROI SCM SLA SMME SMT SRAC SSA TCO TOLAB U-AMP Member of Executive Council Member of Mayoral Committee Management Information System Multipurpose Community Centre Market Related Rentals National Department of Rural Development and Land Reform National Youth System Occupational Health and Safety Act Project Cost Prevention of Illegal Eviction from and Unlawful Occupation of Land Act Performance Management Development System Provincial State Land Disposal Committee Quantity Surveys Revenue Information System Return on Investment Supply Chain Management Service Level Agreement Small, Medium and Micro Enterprise Senior Management Team Sports, Recreation, Arts and Culture State Security Agency Total cost of ownership Transport Operating Licensing Administrative Body User Immovable Asset Management Plan 223

226 List of Contact Details Information Officer Ms. M Modipa Enquiries Ms. N Ngwenya Contact Details Contact Details Tel: Tel: [email protected] [email protected] Physical Address Department of Infrastructure Development 64 Commissioner Street Corner Commissioner and Sauer Street Johannesburg Postal Address Department of Infrastructure Development Private Bag X86 Marshaltown

227 Notes 225

228 Notes 226

229 Department of Infrastructure Development 64 Commissioner Street Corner House Building Johannesburg 2001 Tel: PR Number: 115/2011 ISBN Number: