dedea 19-20 annual report - provincial government

Contents

PART A: GENERAL INFORMATION ................................................................................................................................................................ - 4 -

1. DEPARTMENT GENERAL INFORMATION ........................................................................................................................................ - 5 -

2. LIST OF ABBREVIATIONS/ ACRONYMS ............................................................................................................................................ - 6 -

3. FOREWORD BY THE MEC ....................................................................................................................................................................... - 8 -

4. REPORT OF THE ACCOUNTING OFFICER ........................................................................................................................................ - 9 -

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT ............. - 15 -

6. STRATEGIC OVERVIEW .......................................................................................................................................................................... - 16 - 6.1 VISION - ......................................................................................................................................................................... 16 -

6.2 MISSION - ......................................................................................................................................................................... 16 -

6.3 VALUES - ......................................................................................................................................................................... 16 -

7. LEGISLATIVE AND OTHER MANDATES ........................................................................................................................................... - 16 -

8. ORGANISATIONAL STRUCTURE ........................................................................................................................................................ - 17 -

9. ENTITIES REPORTING TO THE MEC.................................................................................................................................................. - 18 -

PART B: PERFORMANCE INFORMATION ................................................................................................................................................. - 19 - 1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES .......................................................................................- 20 -

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE ............................................................................................................- 20 -

2.1 Service Delivery Environment .............................................................................................................................. - 20 -

2.2 Service Delivery Improvement Plan ..................................................................................................................... - 22 -

2.1 Main Services and Standards .............................................................................................................................. - 22 -

2.2 Batho Pele Arrangements with Beneficiaries (Consultation access etc.) ............................................................. - 23 -

2.3 Service Delivery Information Tool ........................................................................................................................ - 26 -

2.4 Complaints Mechanism ....................................................................................................................................... - 27 -

2.5 Organisational Environment ............................................................................................................................... - 28 -

2.6 Key Policy Developments and Legislative Changes .............................................................................................. - 28 -

3. STRATEGIC OUTCOME ORIENTED GOALS .......................................................................................................................- 29 -

Performance Information by Programme ..................................................................................................................... - 31 -

3.1 Programme 1: Administration ............................................................................................................................. - 31 -

3.2 Programme 2: Economic Development and Tourism .......................................................................................... - 37 -

3.3 Programme 3: Environmental Affairs .................................................................................................................. - 51 -

4. TRANSFER PAYMENTS ....................................................................................................................................................... 62

4.1 Transfer payments to Public Entities ........................................................................................................................ 62

4.2 Transfer payments to all organisations other than public entities ........................................................................... 69

5. DONOR FUNDS .................................................................................................................................................................. 70

5.1 Donor Funds Received .............................................................................................................................................. 70

6. CAPITAL INVESTMENTS ............................................................................................................................................ 72

6.1 Capital Investment, Maintenance and Asset Management Plan ............................................................................. 72

PART C: GOVERNANCE ............................................................................................................................................................................................ 73 1. INTRODUCTION ................................................................................................................................................................. 74

2. RISK MANAGEMENT .......................................................................................................................................................... 74

3. FRAUD AND CORRUPTION ................................................................................................................................................. 74

4. MINIMISING CONFLICT OF INTEREST ................................................................................................................................ 75

5. CODE OF CONDUCT ........................................................................................................................................................... 75

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES ................................................................................................................ 76

7. PORTFOLIO COMMITTEES ................................................................................................................................................. 76

8. SCOPA RESOLUTIONS ........................................................................................................................................................ 77

9. PRIOR MODIFICATION TO AUDIT REPORTS ....................................................................................................................... 80

10. INTERNAL CONTROL UNIT ................................................................................................................................................. 80

11. INTERNAL AUDIT AND AUDIT COMMITTEES ...................................................................................................................... 80

14. B-BBEE COMPLIANCE PERFORMANCE INFORMATION ...................................................................................................... 86

PART D: HUMAN RESOURCE MANAGEMENT ............................................................................................................................................. 87

1 INTRODUCTION .............................................................................................................................................................................................. 88

2 OVERVIEW OF HUMAN RESOURCES..................................................................................................................................................... 89 2.1 VACANCY RATE .................................................................................................................................................................. 89

2.2 AGE PROFILE ..................................................................................................................................................................... 89

2.3 INTERNSHIP PROGRAMMES .............................................................................................................................................. 90

2.4 SICK LEAVE ........................................................................................................................................................................ 90

2.5 EMPLOYEE HEALTH AND WELLNESS .................................................................................................................................. 90

2.6 HR ADMINISTRATION ........................................................................................................................................................ 90

2

2.7 LABOUR RELATIONS .......................................................................................................................................................... 91

2.8 PERFORMANCE MANAGEMENT ........................................................................................................................................ 91

2.9 ORGANISATIONAL DEVELOPMENT .................................................................................................................................... 91

3 HUMAN RESOURCES OVERSIGHT STATISTICS ................................................................................................................................. 91 3.1 PERSONNEL RELATED EXPENDITURE ................................................................................................................................. 91

3.2 EMPLOYMENT AND VACANCIES ........................................................................................................................................... 93

3.3 FILLING OF SMS POSTS ...................................................................................................................................................... 96

3.4 JOB EVALUATION .............................................................................................................................................................. 97

3.5 EMPLOYMENT CHANGES .................................................................................................................................................. 99

3.6 EMPLOYMENT EQUITY .................................................................................................................................................... 103

3.7 SIGNING OF PERFORMANCE AGREEMENTS BY SMS MEMBERS....................................................................................... 106

3.8 PERFORMANCE REWARDS .............................................................................................................................................. 106

3.9 FOREIGN WORKERS ......................................................................................................................................................... 108

3.10 LEAVE UTILISATION ......................................................................................................................................................... 109

3.11 HIV/AIDS & HEALTH PROMOTION PROGRAMMES .......................................................................................................... 111

3.12 LABOUR RELATIONS ........................................................................................................................................................ 112

3.13 SKILLS DEVELOPMENT ..................................................................................................................................................... 114

3.14 INJURY ON DUTY ............................................................................................................................................................. 115

3.15 UTILISATION OF CONSULTANTS ...................................................................................................................................... 115

3.16 SEVERANCE PACKAGES ................................................................................................................................................... 116

PART E: FINANCIAL INFORMATION ...............................................................................................................................................................117

REPORT OF THE AUDITOR-GENERAL TO EASTERN CAPE PROVINCIAL LEGISLATURE ON VOTE NO. 9: DEPARTMENT

OF ECONOMIC DEVELOPMENT, ENVIRONMENTAL AFFAIRS AND TOURISM .................................................................................118 APPROPRIATION STATEMENT ....................................................................................................................................................... 124

NOTES TO THE APPROPRIATION STATEMENT ............................................................................................................................... 157

NOTES TO THE ANNUAL FINANCIAL STATEMENTS ........................................................................................................................ 170

ANNUAL APPROPRIATION ............................................................................................................................................................ 170

DEPARTMENTAL REVENUE ........................................................................................................................................................... 170

GOODS AND SERVICES .................................................................................................................................................................. 173

NOTES TO THE ANNUAL FINANCIAL STATEMENTS ....................................................................................................................... 174 NOTES TO THE ANNUAL FINANCIAL STATEMENTS ........................................................................................................................ 175

EXPENDITURE FOR CAPITAL ASSETS ............................................................................................................................................. 175

ANALYSIS OF NON-CURRENT INVESTMENTS ................................................................................................................................ 176

CAPITAL COMMITMENTS ............................................................................................................................................................. 178

ACCRUALS AND PAYABLES NOT RECOGNISED .............................................................................................................................. 179

DETAILS OF CURRENT AND PRIOR YEAR FRUITLESS AND WASTEFUL EXPENDITURE – ADDED CURRENT YEAR (UNDER

DETERMINATION AND INVESTIGATION) ...................................................................................................................................... 182

ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS ............................................................................................................... 191

3

1. DEPARTMENT GENERAL INFORMATION

PHYSICAL ADDRESS:

Block 16, Business Village

Bhisho 5605

POSTAL ADDRESS:

Private Bag X0054

Bhisho

Republic of South Africa

5605

TELEPHONE NUMBER: (+27) 043 605 7004/7007

FAX NUMBER: (+27) 043 605 7303

EMAIL ADDRESS: [email protected]

WEBSITE ADDRESS: www.dedea.gov.za

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2. LIST OF ABBREVIATIONS/ ACRONYMS ADZ Aquaculture Development Zone

AEL Atmospheric Emission Licenses

AFS Annual Financial Statements

AGSA Auditor General of South Africa

AIDC Automotive Industry Development Centre

AIDF Agro Industry Development Forum

AIDS Acquired Immune Deficiency Syndrome

AIM Agro-Industrial Manufacturing Cluster

AIP Audit Intervention Plan

ANC African Nation Congress

AO Accounting Officer

APP Annual Performance Plan

AQMPs Air Quality Management Plans

BAR Basic Assessment Report

BAS Basic Accounting System

BBBEE Broad Based Black Economic Empowerment

BCMM Buffalo City Metropolitan Municipality

BEE Black Economic Empowerment

BAIC Beijing Automotive Industry Corporation

C&E Compliance and Enforcement

CDC Coega Development Corporation

CEO Chief Executive Officers

CFI Capital Finance International

CFO Chief Financial Officers

CGEIT Certificate in the Governance of Enterprise

Information Technology

CHEMIN Chemical Incubator

CISA Certified Information Systems Auditor

CITES Convention of Internationally Threatened and

Endangered Species

CMT Coastal and Marine Tourism

CO2 Carbon Dioxide

COE Compensation of Employees

COGP Code of Good Practise

COGTA Department of Cooperative Governance and

Traditional Affairs

CoP Conference of Parties

CSIR Council for Scientific and Industrial Research

CTA Certificate in the Theory of Accounting

DCCRS District Climate Change Response Strategy

DEA Department of Environmental Affairs

DEDEAT Department of Economic Development,

Environmental Affairs and Tourism

DFI’s Development Finance Institutions

DGITO Departmental Government Information

Technology Officer

DIRCO Department for International Relations and

Cooperation

DLGTA Department of Local Government and

Traditional Affairs

DMR Department of Mineral Resources

DPSA Department of Public Service and

Administration

DPME Department of Performance Monitoring and

Evaluation

DRDAR Department of Rural Development and

Agrarian Reform

DRDLR Department of Rural Development and Land

Reform

DSBD Department of Small Business Development

dti Department of Trade and Industry

EC Eastern Cape

ECAIF Eastern Cape Automotive Industry Forum

ECBCSAP Eastern Cape Biodiversity Conservation

Strategy Action Plan

ECCOB Eastern Cape Chamber of Commerce and

Business

ECDC Eastern Cape Development Corporation

ECDEET Eastern Cape Disability Economic

Empowerment Trust

ECGBB Eastern Cape Gambling and Board

ECGMA Eastern Cape Game Management Association

ECITI Eastern Cape Information Technology

Incubator

ECLA Eastern Cape Liquor Act

ECLB Eastern Cape Liquor Board

ECIP Eastern Cape Infrastructure Plan

ECPTA Eastern Cape Parks and Tourism Agency

ECRDA Eastern Cape Rural Development Agency

ECSECC Eastern Cape Socio Economic Consultative

Council

EACS Environment and Culture Sector

EDMRS Electronic Document Management and

Records System

EIA Environmental Impact Assessment

EIM Environmental Impact Management

ELIDZ East London Industrial Development Zone

EPWP Extended Public Works Programme

EQM Environmental Quality Management

ERLN Economies of Regions Learning Network

FMCMM Financial Management Capability Maturity

Model

GDP Gross Domestic Product

GDPR Growth Domestic Product

GEMS Government Employees Medical Scheme

GEC Global Entrepreneurship Congress

GEN Global Entrepreneurship Network

GG Government Gazette

GIS Geographic Information System

GMC Greenest Municipality Competition

GTAC Government Technical Advisory Centre

HDIs Historically Disadvantaged Individuals

HIV Human Immune Virus

HOD Head of Department

HR Human Resources

HRD Human Resource Development

HRPP Human Resource Practise and Planning

IA Internal Audit

ICT Information and Communication Technology

IDAM Institute for Development Assistance

IDC Industrial Development Corporation

IDZ Industrial Development Zone

IGR Inter-Governmental Relations

IOD Institute of Directors

IPAP Industrial Policy Action Plan 3

6

IPP Independent Power Producer

IWCDP Integrated Wild Coast Development

Programme

IWMP Integrated Waste Management Plan

KPI Key Performance Indicator

LM Local Municipality

LNG Liquefied Natural Gas

LOGIS Local Government Information Systems

LRED Local and Regional Economic Development

MBCC Mandela Bay Composites Cluster

MBL Master of Business Leadership

MBSA Mercedes-Benz South Africa

MDA Manufacturing Development Act

MEC Member of the Executive Council

METT Management Effectiveness Tracking Tool

MinMEC Ministers and Members of Executive Council

MPAT Management Performance Assessment Tool

MPSA Minister of Public Service and Administration

MTEF Medium Term Expenditure Framework

MW Megawatts

NALSU Neil Aggett Labour Studies Unit

NAM Non-Automotive Manufacturing

NAMC National Agricultural Marketing Council

NEAS National Environmental Assessment Services

NEMA National Environmental Management Act

NHBRC National Home Builders Registration Council

NIRP National Integrated Resources Plan

NMBM Nelson Mandela Bay Municipality

NMMU Nelson Mandela Metropolitan University

OAG Office of the Accountant General

OMF Operations Management Framework

OTP Office of the Premier

PA Performance Agreement

PAIP SCOPA

PC Partially Conforms

PCMT Provincial Coordinating Management Team

PEDS Provincial Economic Development Strategy

PERSAL Personnel and Salary System

PFMA Public Finance Management Act

PIDS Provincial Industrial Development Strategy

PILIR Procedure on Incapacity Leave and Ill-Health

Retirement

PMDS Performance Management and Development

System

PMER Planning, Monitoring, Evaluation and

Reporting

PMO Programme/Project Management Office

PoA Programme of Action

PRIME Programme for Industrial and Manufacturing

Excellence

PSCBC Public Service Co-ordinating Bargaining

Council

PSR Public Service Regulations

QAIP Quality Assurance Improvement Program

QERF Quarterly Economic Research Forum

QPR Quarterly Performance Reporting

RMDEC Regional Mining Development And

Environmental Committee

S&T Subsistence and Travel

SAAELIP South African Atmospheric Emission Licensing

and Inventory Portal

SAB South African Breweries

SALEDP South African Low Emission Development

Programme

SALGA South African Local Government Association

SANRAL South African National Roads Agency Limited

SAPS South African Police Service

SCOPA Standing Committee on Public Accounts

SCM Supply Chain Management

SDIP Service Delivery Improvement Plan

SEA Strategic Environmental Assessment

SEM Species and Ecosystems Management

SERO Socio-Economic Review and Outlook

SEZ Special Economic Zone

SIP3 Strategic Infrastructure Programmes

SITA State Information Technology Agency

SLAs Service Level Agreements

SMMEs Small, Medium and Micro Enterprises

SMS Senior Management Service

SO Strategic Objective

TB Tuberculosis

TIERM Technical Indicator and Evidence Reference

Manual

TNPA Transnet National Ports Authority

UFH University of Fort Hare

USAID United States Agency for International

Development

VW Volkswagen South Africa

WIS Waste Information System

WSP Work Skills Plan

WRT Workplace Readiness Training

7

3. FOREWORD BY THE MEC

It gives me great pleasure to present our annual performance report for the 2019/20 financial year. The report

comes at the end of the five-year planning cycle which started in 2015/16. During the five-year period under

review, the following key achievements can be noted:

(a) The Eastern Cape Regional Economic Growth Rate was at 0.85%.

(b) A total of 1720 SMMEs received development finance and non-financial support.

(c) About 28 303 consumers were reached through the consumer awareness programme.

(d) A total of 389 environmental compliance inspections were conducted.

(e) An average of 97.6% of EIA applications were finalised within legislated timeframes.

(f) 22538 permits were issued within legislated timeframes in line with the NEMA Act. 95 535 ha were added

to the conservation estate.

(g) A total of 489 SMMEs/ local entrepreneurs were provided with integrated export support.

(h) The two SEZs realised 84 investments and exceeding R48 billion.

(i) To contribute to skills for the economy, 28 838 people were trained on various areas.

(j) Gambling revenue amounted to R800 million while 68.3% of fully compliant liquor licence applications

were processed within 60 working days.

(k) On the jobs front, the work of the department saw at least 88 684 jobs being created. The tourism spend

in the Province amounted to R12,9 billion.

(l) Tourism promotion resulted in the at least 10 230 600 domestic tourism trips which place the province in

5th position on the domestic ranking scale.

The detail of the Department’s performance in the 2019/20 financial year will be highlighted by the accounting

officer in the next few pages as well as the details under each of the three programmes of the Department.

Achievements were made under fiscal constraints and a poorly growing economy. The Department is in the

process of recalibrating its performance and has developed a new strategy with emphasis on impacts and

outcomes. The unpredictable environment presented by the COVID19 pandemic will require a further refinement

of the focus of the department. This will require, amongst others, sharpened collaborations, smarter working

tools and enhanced cross sector cooperation, local and national integration of programmes.

I would like to take this opportunity to thank and acknowledge the efforts of the previous HOD and MEC together

with the DEDEAT management and staff. I also take the opportunity to welcome and congratulate the new HOD,

Ms Mickey Mama for delivering on the planned and emerging work in the economic, environmental and tourism

spheres. You have done a remarkable job in the year under review to ensure that we are able to deliver on this

promise. I would like to express my gratitude to them for their hard work and dedication.

I, Mlungisi Mvoko, MEC for DEDEAT and Finance, in terms of the requirements of Section 65(1) (a) of the Public

Finance Management Act and Chapter 1, Part III of the Public Service Regulations, do hereby table the Annual

Report for the 2019/20 financial year.

____________________________________________________________

Mr Mlungisi Mvoko (MPL)

Honourable MEC of Finance, Economic Development,

Environmental Affairs and Tourism

30 September 2020

8

4. REPORT OF THE ACCOUNTING OFFICER

The 2019/2020 financial year was the last year of the five-year plan of the 5th Administration. Summary activity

outputs of the three programmes, namely Administration, Economic Development and Tourism, and Environmental

Affairs are reported under each of the programmes on pages 31, 37 and 51 respectively.

The two core programmes, Economic Development and Environmental Affairs, continued with the focus on job creation,

SMME development, industry development, socio-economic infrastructure development, investment promotion,

consumer protection services and sound environmental management among other priorities. During the year, the

economic development programme achieved 90.9% of set targets compared to 81.82% achieved in the previous year.

The environmental affairs programme achieved 42.9 % of set targets versus 43.75% achieved during the 2018/19

financial year. Overall, the Department achieved fully 66.9% of set targets compared to 62.79% achieved in the

preceding year (i.e. core programme 2 & 3). Specific outputs and outcomes are outlined under each of the three

programmes.

I will highlight significant results and challenges of the year under review.

The Office of the HOD continued to provide leadership, strategic guidance, management and administration of the

Department. All planning instruments for the new 2020- 2025 cycle were developed using the theory of change

methodology with special focus on outcomes. The Department was also able to implement Office 365 for all the

Departmental users. Most of the critical systems of IT have now been moved to the cloud, thus ensuring business

continuity anytime and anywhere.

The Department has in the past nine years has had positive audit outcomes although its endeavour to obtain a clean

audit has been jeopardised by irregular expenditure and non-compliance issues, which most have since been resolved.

The under-expenditure in the 2019/20 financial year was approximately 3.6 per cent of the budget. The Financial

Management unit has paid all valid invoices within thirty days in the year under review, which is consistent with previous

financial years. The Department was able to award services through procurement processes to BBBEE compliant

suppliers.

For the year under review, 19 out of 21 vacant funded positions were filled at an average rate of 3 months each. However,

the vacancy rate remains very high at 25.1% due to challenges in implementing the new organogram1. In terms of the

implementation of the Work Skills Plan (WSP), the Department achieved 151%, having trained 228 employees.

Under the Economic Development Programme, the Local Regional and Economic Development (LRED) grant funded

only 2 projects due to problems experienced with the initial service provider appointed to perform due diligence on

selected projects. A new service provider was appointed late in the financial year resulting in recommended companies

being awarded the grants at the beginning of the 2020/21 financial year.

A total of 121 cooperatives were provided with non-financial support. Various business awareness programmes

targeting Youth, Women, People with disability and Military veterans across all the six districts including the two Metros

were conducted. The Department has exceeded the annual target of 1,540 by 228% and has recorded 3,519 transactions

across all the six district Municipalities and two Metros on CIPC business registration services.

During the financial year, the Department supported 4 sustainable energy initiatives under four categories, namely:

Independent Power Producer Support Processes and support to SMMEs in the Energy Sector; Rural renewable energy

mini-grid and Support to Municipal Embedded Generation; Support to the Provincial Gas and Bunkering localization

programme and Sustainable Energy Forum or equivalent which advances the Eastern Cape Minigrid Project, among

others.

A total of 7 manufacturing initiatives were supported. These are summarised as follows: EC Automotive Industry Forum

(ECAIF); Non-Automotive Manufacturing Cluster (NAMC); EC Tooling Initiative (ECTI); Support to manufacturing

companies in distress; Support with the Implementation of Offtake agreements for the local procurement initiative;

Support the maritime manufacturing sector and Support to the revitalisation of EC state-owned Industrial Parks (IP).

On agro-processing, 3 initiatives were supported. The Provincial Agro Industry Development Action Implementation

Plan was approved by the Provincial Executive Committee. In support of the industry research and development pillar

of the plan, the Department has signed a collaboration with the Technology Innovation Agency (TIA) to mainstream

1 Please refer to Part D for more information in this regard

9

innovation in the sector for new entrants’ developments with new products and technologies thus providing for

inclusive sector growth and development. The Department as part of a provincial delegation to Canada undertook a

Cannabis Industry Study tour aimed at understanding how the Canadians have developed the industry and explore

opportunities for collaboration with investors, businesses and government in Ontario Province Canada for successful

development of the Cannabis Industry in the Eastern Cape Province South Africa.

On governance, the Department assessed boards of all public entities in line with the King IV Report. Key vacancies on

the boards of the Eastern Cape Development Corporation (ECDC), Eastern Cape Gambling Board (ECGB), Eastern Cape

Parks and Tourism Agency (ECPTA), and the Eastern Cape Liquor Board (ECLB) were filled.

Through the office of the consumer protector, 6 consumer awareness sessions were held throughout the Province.

These workshops were attended by 13031 people. The World Consumer Rights Celebration was held in the Province on

March 15, 2020. During the 2019/2020 financial year, 1150 complaints were received and registered on the Electronic

Case Management System of which 1071 were resolved.

The Department continued to publish the Eastern Cape Socio-Economic Review and Outlook (SERO) publication, which

is useful for business planning and research. The Emerging Researchers’ Conference, an annual seminar hosted by the

four Higher Education Institutions of the Eastern Cape Province (Nelson Mandela University, Rhodes University,

University of Fort Hare and Walter Sisulu University) was also hosted by the Department. A total of eleven papers related

to economic development issues were presented at this conference.

The tourism component oversighted the work of the Eastern Cape Parks and Tourism Agency (ECPTA). A number of

tourism infrastructure projects were implemented as part of the Oceans Economy - Operation Phakisa e.g. East London

Beachfront Development; East London Water World Upgrade and Expansion and N2 Gateway (The Big Tree at

Tsitsikamma).

On the environmental front, the following outputs can be highlighted:

The Provincial IDP review analysis session was held at Mpekweni Beach Resort from 29th July to 02nd August 2019. The

Compliance and Enforcement Unit has continued to enforce the Department’s environmental mandate making use of

collaborative strategies to achieve its mandate. Since the conviction of the Ndlovu’s during the last reporting period

the Eastern Cape has lost two rhinos to poaching. This is a considerable improvement from the 19 poached in the

Province of the Eastern Cape during the previous reporting period. A total of 51 administrative notices for non-

compliance were issued to transgressors while 66 compliance inspections were conducted.

The impact management Unit issued 95% of Environmental Authorizations within legislated timeframes. During the

reporting year, one license was issued within legislated timeframe as the Metros and some District Municipalities are

also Competent Authorities in terms of the NEM: AQA. An environmental awareness activity with a theme “Impacts of

poor air quality” was conducted at Morgan Bay under Great Kei Local Municipality in 2019.

The Department developed an Eastern Cape Integrated Waste Management Plan and Eastern Cape Recycling Strategy

and will be gazetted in the 2020/21 financial year. Waste Management Licenses issued for 2019/2020 financial year

were two (2) in total resulting in 50% achievement of planned target. The Province also conducted the annual Greenest

Municipality Competition (GMC), the campaign of motivating cleanliness and pride in our towns that was launched as

the Cleanest Town Competition focussing on promoting responsible waste management practices at local level with

the first position going to Umzimvubu Local Municipality.

On biodiversity, the Department issued 1,544 biodiversity Threatened Or Protected Species Regulations (TOPS) permits

during the year. The development of E-permit system phase 2 has been finalised by SITA and ready for deployment.

The development of the Eastern Cape Biodiversity Strategy and Action Plan (ECBCSAP) has been finalised and will be

gazetted for implementation.

Lastly, the Environmental Empowerment Services Unit under the Environmental Affairs Programme, implemented

Environment EPWP projects resulting in 734 work opportunities being created. A total of 35 environmental capacity

building sessions were held throughout the Province.

10

Overview of the financial results of the department:

Departmental receipts:

Departmental receipts

2019/2020 2018/2019

Estimate

Actual

Amount

Collected

(Over)/Under

Collection

Estimate

Actual

Amount

Collected

(Over)/Under

Collection

R’000 R’000 R’000 R’000 R’000 R’000

Tax Receipts 228,319 217,567 10,752 216,210 216,781 (571)

Casino taxes 187,291 187,125 166 177,359 176,212 1,147

Horse racing taxes 16,285 11,402 4,883 15,421 14,710 711

Liquor licences 24,743 19,039 5,704 23,430 25,859 (2,429)

Sale of goods and

services other than

capital assets

1,433 1,318 115 1,359 1,367 (8)

Transfers received - - - - - -

Fines, penalties and

forfeits

- 1,427 (1,427) - 90 (90)

Interest, dividends and

rent on land

719 1.023 (304) 680 384 296

Sale of capital assets - - - - - -

Financial transactions in

assets and liabilities

89 451 (362) 84 123 (39)

Total 230,560 221, 786 8,774 218,333 218,745 (412)

11

Programme Expenditure:

Programme Name

2019/2020 2018/2019

Final

Appropriation

Actual

Expenditure

(Over)/

Under

Expenditure

Final

Appropriation

Actual

Expenditure

(Over)/Under

Expenditure

R’000 R’000 R’000 R’000 R’000 R’000

Administration 244 053 238 072 5,981 233,580 224,888 8,691

Economic Development

& Tourism

818 356 778 780 39,576 606,612 598,608 8,005

Environmental Affairs 342 280 336 714 5,566 338,860 336,900 1,960

Total 1,404,689 1,353,566 51,123 1,179,052 1,160,396 18,656

Programmes Final Appropriation Actual Expenditure Variance Expenditure as % of

Final Appropriation

R’000 R’000 R’000 %

Administration

Current payments 229,279 223,624 5,655 97,5

Transfers and subsidies 4,343 4,169 174 96

Payment for capital assets 10,123 9,972 151 98,5

Payment of financial assets 308 307 1 99,7

Total 244,053 238,072 5,981 97,5

Economic Development


Transfers and subsidies 742,188 708,968 33,220 95,5

Payment for capital assets - - - -

Total 818,356 778,780 39,576 95,2

Environmental Affairs


Transfers and subsidies 236,621 236,521 100 100,0

Payment for capital assets - - - -

Total 342,280 336,714 5,566 98,4

Goods and Services and Payment of Capital Assets

Expenditure 2019/20 The budget allocation as adjusted for 2019/20 financial year was R1,405 million against expenditure of R1,354 million,

i.e. 96.4% of the budget. The spending pattern should be considered in the context of the Departmental cost drivers,

which comprises mainly of transfer payments.

In the voted budget, approximately 70% (R983 million) relates to transfers to Departmental agencies, other agencies and

municipalities. The remaining funds were utilised for operational expenses. Almost all the Departmental transfer payments are

disbursed via Programme 2: Economic Development and Tourism and Programme 3: Environmental Affairs. The total under-

spending for the Department amounts to R51.1 million or 3,64% of the voted budget for the 2019/20 financial year. A request

for rollover of funds was has been submitted to the Provincial Treasury made for the 2019/20 financial year. The Department

therefore awaits the Provincial Treasury’s decision..

Goods and Services The unspent funds relate to services where invoices were submitted late; Payment of legal fees to the Department of Justice,

payment of e-Disclosure services. The Gazetting of EC Integrated Waste Management Plan, EC Recycling Strategy, EC

Environmental Implementation Plan and the EC Biodiversity Conservation Strategy and Action Plan were delayed leading to an

underspending.

12

Payment of Capital Assets In this item under expenditure is due to an outstanding accrual for office equipment. There were challenges with the delivery of

office equipment due to the changes in the location of Head Office to sub offices between King Williams Town, Bhisho and East

London.

Transfers and subsidies Isiqalo Youth Fund was projected to be disbursed in the fourth quarter of the financial year. During the preparation for

disbursement process, it was discovered that some of the suppliers were not registered on the CSD. The delay in the

appointment of a credible service provider to conduct due diligence for evaluation of enterprises that showed potential to be

funded by the Department led to the delay in the transfers hence there is a significant underspending.

Virements/ rollovers The Department has applied for the rollover of funds mainly for LRED and Isiqalo Youth Funds projects. The LRED transactions

were not processed due to incomplete supporting documentation.

Unauthorised, fruitless and wasteful expenditure

The Department has incurred irregular expenditure in the current financial year of R519,000 and R71,000 in respect of fruitless

and wasteful expenditure.

Future plans of the Department In the previous financial year, the Department achieved an unqualified audit outcome with a finding on Performance

Information. It is the Department’s intention to continue improving on its audit outcomes, in order to achieve a clean

audit.

The Department is fully committed to fulfilling its mandate to provide leadership for the continued establishment of an

enabling environment for economic growth, leading to increased opportunities for prosperity for all citizens of the

Eastern Cape. The Department will also continue to provide interventions which seek to reduce red tape and support

the ease of doing business across South Africa. Future plans of the Department are contained in the strategic plan for

the 2020/21 to 2024/25 financial year.

Public Private Partnerships There were no Public – Private Partnerships in the 2019/20 financial year.

Discontinued activities/activities to be discontinued There were no activities discontinued and there is no intention to discontinue any services.

New or proposed activities New activities have been proposed under the ambit of the new strategic plan which is more outcome focused. However, a

number of the strategic intent would require significant resources and capacity e.g. focus on Oceans Economy and ICT as a

service offering among others. The Department will also look at opportunities as they manifest themselves, e.g. the COVID19

pandemic is resulting in the emergence of new focal areas that need to be tackled in the years ahead.

Supply chain management The Department continuously maintains and manages moveable assets on the system that was implemented for more than 4

financial years. The Department also disposed of office furniture to schools and non-governmental organisations. Year-end

physical verification of all moveable assets was done but because of the unforeseen lockdown the last quarter verification could

not be finalised. All the moveable assets acquired in the year under review have been accounted for and accurately captured on

the Asset Register as per the Asset Management Framework and Public Finance Management Act.

In the 2019/20 financial year the Department procured goods and services according to the approved procurement plan and

for those that were not in the initial plan an approval was sought from the Provincial Treasury. The Department provided

quarterly reports on the procurement of goods and services to the Provincial Treasury as was required. In addition, to ensure

that the Department received maximum value and that goods and services were delivered on time, at the right price, quality

and quantity, there was a need to have a good understanding of the market.

Gifts and Donations received in kind from non-related parties The Department did not have gifts and donations in the 2019/20 financial year.

13

Events after the reporting date Events after the reporting date that are classified as adjusting events have been accounted for in the annual financial

statements. The events after the reporting date that are classified as non-adjusting events after the reporting date have

been disclosed in the notes to the annual financial statements.

Other Not applicable.

Acknowledgements or appreciation As the Accounting Officer, I would like to thank the honourable MEC, Mr M. Mvoko, management, staff, leadership and

staff of the Department’s public entities, all key partners and all role players such as business owners, meeting and

workshop participants for making our work worthwhile.

I thank you.

__________________________________________________________

Ms M. Mama

Accounting Officer

Department of Economic Development, Environmental Affairs and Tourism

Date: 31 July 2020

14

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF

ACCURACY FOR THE ANNUAL REPORT

To the best of my knowledge and belief, I confirm the following:

(a) All information and amounts disclosed throughout the annual report are consistent.

(b) The annual report is complete, accurate and is free from any omissions.

(c) The annual report has been prepared in accordance with the guidelines on the annual report as issued by National

Treasury.

(d) The Annual Financial Statements (Part E) have been prepared in accordance with the modified cash standard and

the relevant frameworks and guidelines issued by the National Treasury.

The Accounting Officer is responsible for the preparation of the annual financial statements and for the judgements

made in this information.

The Accounting Officer is responsible for establishing and implementing a system of internal control that has been

designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human

resources information and the annual financial statements.

The external auditors are engaged to express an independent opinion on the annual financial statements.

In my opinion, the annual report fairly reflects the operations, the performance information, the human resources

information and the financial affairs of the department for the financial year ended 31 March 2020.

Yours faithfully

________________________________________________

Ms M. Mama

Accounting Officer


Date: 31 July 2020

15

6. STRATEGIC OVERVIEW

6.1 Vision

Sustainable development underpinned by economic growth and sound environmental management.

6.2 Mission

To lead economic development and environmental management in the Eastern Cape.

6.3 Values

LEADERSHIP: We influence the thinking and development of the Eastern Cape; develop team skills at every

level and lead in research, planning, performance management and financial results.

INTEGRITY: We remain honest and loyal while maintaining high professional standards.

FLEXIBILITY: Within the framework of the law, our operations are amenable to adjustments in line with

changes in the operating environment.

TEAMWORK: We design, implement and review our work through strong relationships, respect and sharing

across boundaries to achieve our objectives.

7. LEGISLATIVE AND OTHER MANDATES

The key mandates of DEDEAT are derived from Schedules 4 and 5 of the Constitution and a number of Acts have been

promulgated to further support the Department’s constitutional mandate. These include, among others: the Co-

operatives Act (14 of 2005); the Co-operatives Bank Act (40 of 2007); the Eastern Cape Unfair Business Practices Act (5

of 1998); the Consumer Protection Act (68 of 2008); the National Environmental Management Act (107 of 1998); the

Environment Conservation Act (73 of 1989); the National Environmental Management: Biodiversity Act (10 of 2004); the

Nature and the Environmental Conservation Ordinance (19 of 1974); the National Environmental Management -

Protected Areas Act (57 of 2003); the Sea Shore Act; the Environmental Conservation Decree (Former Transkei); the

Nature Conservation Act (Former Ciskei); the Atmospheric Pollution Prevention Act; and the Problem Animal Control

Ordinance. In addition, specific pieces of enabling legislation have been enacted to support the work of the department

through its six public entities. Examples include the Eastern Cape Development Corporation Act (2 of 1997) and the

Eastern Cape Gambling Amendment Act (Act 1 of 2015).

The mandate of the Department has been enhanced by the 14 key outcomes identified and agreed to by the National

Cabinet in 2010. The Department had to align its plans to the outcomes, in particular outcomes 4, 6, 7, 10 and 12 which

are outlined below:

• Outcome 4: Decent employment through inclusive economic growth.

Under this outcome, the following policies and strategies are used to drive DEDEAT programmes: Industrial Policy

Action Plan (IPAP); National Development Plan; New Growth Path; National LED Framework; Vision 2030 (successor

to the Provincial Growth and Development Plan); Jobs Fund Strategy; Provincial Industrial Development Strategy

(PIDS) now succeeded by the Provincial Economic Development Strategy (PEDS-2016); Strategic Integrated Projects

(SIP3); the 10 Point-Plan; National Youth Policy 2015 -2020; Provincial Youth Development Strategy (2015); and the

Renewable Energy Strategy.

• Outcome 6: An efficient, competitive and responsive economic infrastructure Network.

This is done through the Industrial Development Zone (IDZ) programmes at Coega and ELIDZ. The Department is

supporting the development of socio-economic infrastructure in identified areas of the Province through the SEZ

Act (2014) and SEZ Regulations (2016). Further support is provided through the Provincial Economic Stimulus Fund,

which was established in 2019/20 financial year. Support is also provided to the mandated agency for key

infrastructure coordination in the Province, Eastern Cape Socio Economic Consultative Council (ECSECC).

16

• Outcome 7: Rural development, land and agrarian reform, food security.

The Department has been collaborating with the Department of Rural Development and Agriculture. Agro-industry

is being supported through an industry forum whose aim is to develop specific agro value chains.

• Outcome 10: Environmental assets and natural resources that are well protected and continually

enhanced.

This is done through the Department and the ECPTA. The DEDEAT Group maintains a network of Reserves

throughout the Province. The Environmental Affairs Programme is responsible for implementation of

environmental legislation through compliance and enforcement, environmental quality management, biodiversity

management and environmental education services. The National Environmental Management Act (NEMA) is the

overarching legislation governing environmental management. There are other ancillary pieces of legislation that

work in tandem with the NEMA legislation.

• Outcome 12: An efficient, effective and development oriented public service and an empowered, fair

and inclusive citizenship.

This is done through various programmes of the Department and public entities such as consumer awareness

training, and environmental awareness training. Citizens are also empowered through province wide programmes

of the Eastern Cape Liquor Board (ECLB) and Eastern Cape Gambling and Board (ECGB). Inclusivity is also done

partly through EPWP programmes, SMMEs/Cooperatives support and training as part of outcome 4 above.

8. ORGANISATIONAL STRUCTURE

17

9. ENTITIES REPORTING TO THE MEC

The following entities report to the MEC of Economic Development, Environmental Affairs and Tourism:

Name of Entity Legislative Mandate Financial Relationship

(R‘000) Nature of Operations

Eastern Cape

Development

Corporation

To plan, finance, co-

ordinate, market,

promote and implement

the development of the

Province and all its

people in the fields of

industry, commerce,

agriculture, transport

and finance in line with

the ECDC Act (1997)

Main

Appropriati

on

472,139

Adjusted

Appropriati

on

217,842

1. Provides short-term and long-

term development finance

primarily to previously

disadvantaged entrepreneurs

2. Provides non-financial support

services to facilitate enterprise

development, promote trade and

investment

3. Manages investments in the form

of shares on behalf of the state as

well as other assets

East London

Industrial

Development

Zone

To pursue the aims and

objectives of the IDZ

Programme, as set out

in the IDZ Regulations

of the Manufacturing

Development Act

(MDA), Act.187 of 1993

115,604

181 575

1. Develops land so as to provide

suitable infrastructure for

industrial development

2. Promotes investment and trade

Coega

Development

Corporation

To pursue the aims and

objectives of the IDZ

Programme, as set out

in the IDZ Regulations

of the Manufacturing

Development Act

(MDA), Act.187 of 1993

56,620

104,903

1. Develops land so as to provide

suitable infrastructure for


2. Promotes investment and trade

Eastern Cape

Parks and

Tourism

Agency

To develop and manage

protected areas and to

promote and facilitate

the development of

tourism in the Province

in line with the ECPTA

Act (2010)

215,119

222 695

1. Management of conservation of

biodiversity and sustainable

utilization of natural resources

within the protected areas

2. Marketing, promotion and

development of the Province as a

tourism destination

Eastern Cape

Gambling

Board

To oversee all gambling

activities and to deal

with matters incidental

thereto in the Province

and to exercise certain

further powers as

contemplated in the

Eastern Cape Gambling

Act (2017)

58,710

58 710 1. Administration of applications for

and licensing of gambling

business activities; promotion of

responsible gambling through

public awareness and consumer

education; enforcement of

compliance with legislation as

well as with terms and conditions

attached to licences.

Eastern Cape

Liquor Board

To regulate registration

of the retail sale and the

micro-manufacturing of

liquor in the Province;

and to encourage entry,

support and control

socio-economic and

other costs associated

with liquor as provided

by the Eastern Cape

Liquor Act of 2003

62,483

62 483

1. Administration of applications for

registration and issuing of liquor

license, promotion of responsible

liquor trading and

consumption, alerting the public

to associated risks or adverse

effects through public awareness

and education; and enforcement

of compliance with legislation as

well as with terms and conditions

attached to licenses.

18

1. AUDITOR GENERAL’S REPORT: PREDETERMINED OBJECTIVES

The AGSA currently performs the necessary audit procedures on the performance information to provide reasonable

assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives

is included in the report to management, with material findings being reported under the Predetermined Objectives

heading in the Report on other legal and regulatory requirement sections of the auditor’s report.

Refer to page 118 of the Report of the Auditor General, published as Part E: Financial Information.

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE

2.1 Service Delivery Environment

THE GLOBAL ECONOMY

In the 2019/20 financial year, the global economic outlook was fragile and at risk of stagnation. Lower investment, rising

trade barriers and high debt were straining economies around the world. Economic growth remained weak, with a

slowdown in almost all countries and global trade is stagnating. The global economy also faced several downside risks;

ranging from a structural slowdown and coronavirus outbreak in China, the uncertain consequences of Brexit, concerns

about excessive corporate sector debt levels and the ever-surfacing risk of a euro-zone crisis and geopolitical risks in

the Middle East. The margin for fiscal stimulus in most of the world’s main economies narrowed, as higher spending

reduced budget coffers.

Although investment is indispensable for boosting productivity, low expected returns, uncertainty about economic

policy in major economies, and ongoing and emerging geopolitical tensions affected global investment. Protectionism

regarding trade and investment would be a major obstacle to the free flow of foreign direct investment (FDI) in 2020.

FDI is still below the 2008-2009 level and has decreased for the last couple of years. In 2018, net FDI inflows declined

by 38 percent compared to 2017. The biggest drop has been in the euro area, where lower production, less attractive

yields, and uncertainty surrounding Brexit, led to a fall in net FDI inflows to the region to a record low since the euro

was adopted in 1999.

Business activity also continued to decline, particularly in manufacturing, where global indicators of output and new

orders have dropped to their lowest level for seven years. Trade tensions are weighing heavily on industrial sectors,

especially in the advanced economies, where industrial production has declined in 2019. Services sector output has held

up for much of the year, helped by steady growth in consumer spending. In emerging market and developing

economies, government debt has risen. However, the current economic climate of low global interest rates and slow

growth may seem to alleviate partly concerns related to debt levels. Although global economic growth declined from

3.6 percent in 2018 to an estimated 2.9 percent in 2019, it was expected to improve to 3.3 percent in 2020,

notwithstanding the impact of the coronavirus (COVID19).

THE SOUTH AFRICAN ECONOMY

South African economy has not been immune to the global challenges, however also faced with its domestic challenges,

the economy hit its lowest in terms of economic performance since 2012. South Africa GDP shrank again in the 4th

quarter of 2019 after a contraction observed in the previous quarter, pushing the country into a technical recession. The

country’s economic growth is lacklustre, dragged down by the slow recovery in commodity prices and the fiscal risks

associated with unbudgeted bailouts for ailing state-owned enterprises (SOEs). Reforms are needed urgently to

strengthen governance and fight corruption, to reduce current fiscal deficits and debt, to improve business confidence

and macroeconomic policy credibility, to reassure private investment, and to promote an environment conducive to job

creation, particularly for Black youth.

Household debt increased at a slightly faster pace than nominal disposable income with the ratio of debt to disposable

income edging higher. However, the net wealth of households improved further over a period, as the increase in

household debt was outweighed by the increase in the market value of assets. This reflected mainly a further increase

in the value of equity portfolios and housing stock. At a sector level, the primary and secondary sectors have been

contracting while the services sector has been growing. Natural or cultured pearls; precious or semi-precious stones

and metals commodities; ores, slag and ash commodities; iron and steel commodities; vehicles other than railway

commodities; as well as edible fruit and nuts, peel of citrus fruits, and melons exhibited positive trade balance in 2018.

20

However, commodities with negative trade balance were mineral fuels and oil commodities; electrical machinery and

equipment and parts commodities; nuclear reactor, boilers and mechanical appliances commodities; pharmaceutical

products; as well as optical, photographic, measuring, checking, precision, medical or surgical instruments and

apparatus commodities. The current account deficit as a percentage of GDP is expected to widen over the medium

term.

The country remains an extremely unequal society, with high and rising unemployment, particularly among the youth.

Inflation is estimated to have moderated in 2019 to below the midpoint of the inflation target range, aided by one-off

factors. According to the South African Reserve Bank (SARB), the 10 main drivers of the CPI inflation in 2018 were the

petrol price, private transport operation, water and other services, primary and secondary education, cold beverages,

transport, insurance, wine, education and meat prices.

THE EASTERN CAPE ECONOMY

The economy of Eastern Cape (EC) has stagnated over the last couple of years, and projections remain subdued, as

downside risks have intensified amidst growing policy uncertainty and weakening business sentiment. Although the

government of EC has made significant progress in expanding infrastructure investment, the gap between the urban

and rural areas is still huge. The EC’s economic growth is reliant on the country’s performance and still well below its

real performance potential. Indeed, the economic growth in the province was still at 0.6 percent in 2018 and is

dominated largely by the tertiary sector with an average contribution of 71.4 percent. Within the secondary sector,

manufacturing industry increased by 1.0 percent in 2018.

With the current national fiscal constraint, lack of adequate public investment and poor weather conditions, the growth

prospects of the province were expected to be impacted negatively. Economic growth in the EC is relatively dependent

on the performance and growth of the country as whole. Numerous other fundamentals such fiscal constraint and

monetary space, lack of investment, poor weather conditions and political uncertainty have a considerable negative

impact on the growth prospects and outlook of the province. In 2019, the EC economic (GDP_R) growth is expected to

be around 0.5 percent before reaching 1.5 percent by 2022.

Figure 1 below shows the EC GDPR for the period 2012 to 2018 as well as the GDPR forecast from 2019 to 2022.

Source: SERO, 2019/20

21

The EC’s economic growth has reflected a downward and slowing trend over time (2012-2018) and the provincial

outlook is projected to contrast further to 0.5% in 2019 and then recover to an upward trajectory from 2019, improving

to 0.8% in 2020, reaching 1% in 2021. Crucial facts to note are firstly, that the province is still well below its real

performance potential still. Secondly, the projected EC’s economic recovery would have been at a moderate-to slow

rate owing to weakening business sentiments, existing risks of external environment constraints and subdued

investment globally. Consequently, over the last decade the province has recorded the lowest capital stock per capita

in the country, although it has increased by an annual average growth of 1.6 percent since 2008. Investment in the

primary sector and regions outside the metropolitan areas are still lagging behind despite their potential. The current

pace of public sector investment needs to improve to attract more private investment. The Province has two established

SEZs and the third one at the final stage for operationalization. Improved collaboration between the relevant agencies

is needed for the province to capitalize on the benefits of the three SEZs.

Turning to the demographics, there were 6.7 million people living in the Eastern Cape as reported by the Stats SA Mid-

Year population estimates of 2019. The population of the province still remained the fourth largest in the country, with

net migration having been negative since 2006. It is estimated that between 2016 and 2021 net migration will remain

negative, which is reason for concern as the negative net migration adversely affects the provincial equitable share as

well as economic activity. In fact, the effects of slow economic activity have been evidenced by the persistent high

unemployment in the province. According to the Quarterly Labour Force Survey (QLFS), unemployment in the province

in the third quarter increased to 39.5%, an increase of 3.0% percentage points from the third quarter. This was as a

result of specific observed labour market shifts quarter-on quarter including increase of 81 000 in the labour force size;

decrease of 18 000 in employed; increase of 99 000 in the unemployed; decrease of 69 000 in the not economically

active and decrease of 77 000 in discouraged workers.

Year-on-Year, the number of people employed in the province increased by 9 000 (from 1 375 million to 1 384 million)

and unemployed increased by 126 000 (from 778 thousand to 904 thousand), with the unemployment rate increasing

by 3.4% percentage points year on year. Clearly, this speaks of the worrisome and declining employment prospects in

the Eastern Cape illustrated in declining employment absorption rate from 32.2% to 32.1%. It is also important to note

that whilst the provincial unemployment rate stood at 39.5% in the last quarter of 2019, unemployment was even more

pronounced in the non-metro regions reaching 43.9%. The fact that employment opportunities are skewed in favour of

the metros is also evidenced by lower than provincial unemployment rates of 31.2% in Buffalo City Metro and 34.2% in

Nelson Mandela Bay Metro.

Overall, the number of people employed in the province decreased from1 402 million in quarter 4 to 1 384 million in

the last quarter of 2019. This has been due to the fact that five industries shed a total of 54 000 jobs, and these are

agriculture (19 000), mining (1 000), manufacturing (7 000), construction (6 000) and trade (21 000). Four other

industries created 46 000 new jobs that is utilities (4 000), transport (23 000), community and social services (18 000)

and private households (2 000) new jobs in the same reporting period; with Finance jobs remaining the same between

the two quarters. Seeing that the number of job losses were 8 000 more than the number of new jobs, and the increase

in number of unemployed by 99 000 in the last quarter, it then is no surprise that provincial unemployment deepened

overall.

2.2 Service Delivery Improvement Plan

The Department maintains an annual service delivery improvement plan which is developed in line with the guidelines

of the Department of Public Service and Administration (DPSA) through the Public Service Regulations, Chapter 1, Part

III C. The table below highlights the service delivery plan and the achievements to date.

2.1 Main Services and Standards

Main services Beneficiaries

Current/ actual

standard of

service

Desired

standard of

service

Actual achievement

1. Provide

consumer

complaint

support

General

business and

consumers of

any goods or

services in the

Province of the

Eastern Cape

We provide

consumer

complaint advice

and support to

consumers on all

lodged complaints

within a month

We will provide

consumer

complaint advice

and support to

consumers on all

lodged

complaints

within a Month.

Seven (7) complaints were open at the

end of the 2018/2019 Financial Year.

During the 2019/2020 Financial year,

1150 complaints were received and

registered on the Electronic Case

Management System. 1071 Complaints

were Resolved leaving 86 Complaints

open at the end of the Financial Year.

22

Main services Beneficiaries

Current/ actual

standard of

service

Desired

standard of

service

Actual achievement

The department

has set a target

of 75% of all

complaints

received to be

resolved/

finalised within

the Quarter.

Statistics indicate that 92% of complaints

that were received were resolved or

referred to Regulatory Bodies with

jurisdiction.

Improved relationships with Regulatory

Bodies ensures that complaints are

referred within 7 days of receipt should

the complaint not fall within the

jurisdiction or mandate of the Provincial

Office of the Consumer Protector.

2. Issuing of

EIA

decisions

called

authorizati

ons

Private

individuals,

general

business

community and

other

government

departments

and agencies

wanting to

develop a listed

activity or in a

listed area

We issue decisions

called

Authorizations and

licenses on all

applications with

complete

information in line

with timeframes

We will issue

decisions called

Authorizations

on all

applications with

complete

information

within

timeframes.

The department

has set a target

of 98% of

applications with

complete

information

95 % of applications were finalized within

legislated timeframes

2.2 Batho Pele Arrangements with Beneficiaries (Consultation access etc.)

Current/actual arrangements

Consumer Protection Desired arrangements Actual achievements

Access: Regional offices and the

Head Office serve as service

centres for easy access to

improve service delivery, a call

centre and an electronic case

management system are

operational and complaints are

received by telefax and email

([email protected]

)

The call centre (share call)

is accessible to the

consumers in English and

isiXhosa and it helps in

reducing travelling costs

by the consumers. The

walk-ins and faxes also

used by consumers.

The call centre is accessible to all consumers and

members of the public who have any enquiries or

complaints to lodge. Enquiries and complaints are

also received by way of walk – in public at all

regional offices and emails are received on a daily

basis on [email protected] email.

The share call center is accessible to all

consumers and members of the public who have

any enquiries or complaints to lodge. Enquiries

and complaints are also received by way of walk –

in public at all regional offices.

There has been a marked increase in the number

of complaints that are received by email

[email protected]. These

complaints are analysed and submitted to the

Regional Office

Consultation: Conduct six

education programmes which

consist of awareness workshops

aligned to the Consumer

Protection Education Business

Plan.

Conduct six (6) education

programmes.

The six education

programmes are the

following:

(1) Right to fair value,

good quality and safety

Six (6) awareness programmes were conducted in

2019/2020. The six (6) education programmes

conducted were:

(1) Right to fair value, good quality and safety

(2) The Office of the Consumer Protector

(3) Financial Literacy

(4) Consumer Rights

(5) Spend Wisely Campaign

23



(2) The Office of the

Consumer Protector

(3) Financial Literacy

(4) Consumer Rights

(5) Spend Wisely

Campaign

(6) The Eastern Cape

Consumer Protection Act

(6) The Eastern Cape Consumer Protection Act

Courtesy: Confidentiality of

complainants or consumer is

maintained at all times, etiquette

and accurate disclosure are

critical.

The officials are to give

constant feedback to the

consumers at appropriate

time intervals. Reports

drawn from electronic

case management system

on the number of users,

complaints trends and the

level of consumer

satisfaction. A plan to be

developed to request

permission from

complainants to be able

to contact complainants

to determine the level of

satisfaction of services

rendered and

recommendations to

improve services of the

Office of the Consumer

Protector to be

developed for

implementation during

2021/2022.

Mobile teams will also

conduct information

sharing sessions in

faraway communities

during 2021/2022.

A Standard Operating Procedure assists with

Consumers understanding the time frames when

feedback should be expected, and all consumer

advisors are to comply with the Standards.

Regular reports are drawn from the Reporting

Platform of the Electronic Case Management

System and Consumers were given time frames in

terms of resolution and advice.

Information: Information sheets

and posters developed and

launched with the call centre.

Radio interviews were conducted

aligned to the business plan.

The six (6) education

programmes, radio

interviews will be

conducted, posters and

flyers be distributed.


conduct information

sharing sessions in

faraway communities.

Information was shared with all participants

through awareness sessions based on the six (6)

education programmes. Consumer Guides (a

booklet summarizing the Consumer Protection

Act), pamphlets, flyers were distributed during

the sessions. Mobile teams conducted awareness

sessions for faraway communities during the

Public Service Month campaign in September in

the Chris Hani Region.

Redress: The call centre’s case

management automatically

escalates to supervisors.

A plan to be developed to

request permission from

complainants to be able

to contact complainants

to determine the level of

satisfaction of services

rendered and

recommendations to

improve services of the

Office of the Consumer

Protector to be

developed for

All complaints received by the Call Centre are

logged on the Electronic Case Management

System and an email is submitted to the Office of

the Consumer Protector, where the Complaint is

analysed and submitted to the Regiomal Office

best placed to assist the Complainant in as

effective and efficient manner as possible.

All complaints relating to the service delivered by

the Office of the Consumer Protector are

escalated to the Provincial Consumer Protector.

Reports are requested from Regions and the

24



implementation in the

2021/2022 financial year.


conduct information

sharing sessions in

faraway communities.

complaint is mediated to ensure that the

Consumer receives the required service that they

require.

Openness & Transparency:

Publication of reports and

distribution to strategic centres

e.g. Municipalities, other

Government offices, Multi-

purpose centres.

The electronic case

management system

allows the Supervisor and

the Consumer Protector a

bird’s view an all

complaints lodged and

captured in the system.

Regular reports are drawn from the Reporting

Platform of the Electronic Case Management

System. All open incidents are perused by the

Head Office of the Office of the Consumer

Protector and emails are submitted to District

Offices with advice and guidance on Complaints.

Value for Money: The return on

investment for the Call Centre

and Electronic Case

Management System will lead to

efficiency and lead to timeous

and effortless lodgment of

complaints by consumers.

The improved turnaround

time within 90 days

The Electronic Case Management System submits

emails indicating when a new complaint is logged

to ensure that Complainant’s are advised of the

incident number. Escalation emails are forwarded

to supervisors and management aligned to the

Standard Operating Procedures. Any official in

the Office of the Consumer Protector is able to

provide feedback to a Consumer once the

incident number is entered into the Electronic

Case Management System.

The monetary value of savings for Consumers in

respect of Complaints resolved during the

2018/2019 Financial Year was R518 120,00.


Environmental Impact

Management

Desired arrangements Actual achievements

Access: The public can access

NEAS, a public portal which is

operational.

As explained in the left

column

No achievement on this as there was no target as

per the explanation on the far-left column.

Consultation: One stakeholder

forum session once in a quarter.

Conduct one (1)

stakeholder forum

session once a quarter

where all the governance

and compliance issues are

addressed.

Four stakeholder fora were held, one in each

quarter.

Courtesy: Quarterly reports

presented to stakeholders at

quarterly Environmental Quality

Management (EQM) Forum,

EQM Technical Committee

meetings and at DEDEAT

Environmental Affairs

Management meetings.

Stakeholders are briefed

at quarterly

Environmental Quality

Management (EQM)

Forum, EQM Technical

Committee meetings and

at DEDEAT Environmental

Affairs Management

meetings.

Several presentations relating to the policy

development and strategic directions of the

sector were given to the stakeholders.

Information: Information is

disseminated in all stakeholder

forum sessions once in a quarter,

distributed to municipalities,

multi-purpose centres and

departmental website. The

public portal on NEAS is very

transparent tool and the whole

EIA process is transparent

Information is

disseminated in all

stakeholder forum

sessions held quarterly.

Several presentations relating to the policy

development and strategic directions of the

sector were given to the stakeholders.

25


Environmental Impact

Management

Desired arrangements Actual achievements

especially if one registers as an

interested party.

Redress: The review of decision

is done only through the Office

of the MEC, only the MEC can

upheld or rescind the appeal.

The clients must lodge an

appeal within 20 days

after the decision and the

appeal is 90 days, only

the MEC can uphold the

appeal or rescind the

Environmental

Authorization.

Nine (9) appeals were finalized within legislated

timeframes.

Openness & Transparency: The

public portal on NEAS is very

transparent tool and the whole

EIA process is transparent

especially if one registers as an

interested party.

Interested and affected

parties are required to

participate in the Public

Participation process

through registration and

are given access to all

documentation relating

to the relevant

application.

For all the finalized EIA Applications, interested

and affected parties did register and formed part

of the Public Participation Process.

Value for Money: Applications

must be finalized within

timeframes.

On average applications

are finalized well within

timeframes.

95% of applications were finalized within


Time: Time frames within 30

BAR and 45 days Scoping EIR

Report after all the required

information has been received.

107 days is the legislated

timeframe within which

applications must be

finalized after submitting

a final report to the

Department. This is

applicable for both Basic

Assessment Reporting

Process and

Scoping/Environmental

Impact Reporting Process.

95% of applications were finalized within


2.3 Service Delivery Information Tool

Current/actual information

tools

Desired information

tools Actual achievements

Consumer education programme:

Posters, booklets and information

sheets, radio interviews and road

shows

Posters, booklets and

information sheets, radio

interviews and road shows.

Research into effectiveness

of utilisation of Social Media

Platforms will be

undertaken in the

2019/2020 Financial Year.

Booklets and information sheets were

distributed during the awareness workshops.

Consumer Alerts were posted on the DEDEAT

Facebook page and Internal Communications.

Quarterly stakeholder forum

sessions

Conduct one (1)

stakeholder forum sessions

once in a quarter.

Members of the Consumer Education

Committee attended all Quarterly sessions;

Members of the Consumer Protection Forum

attended all Quarterly sessions and Policy and

Strategy Sessions during the financial Year. The

Eastern Cape Province Office hosted sessions

during the last Quarter in preparation of the

World Consumer Rights Celebration held in

March 2020.

26

Current/actual information

tools

Desired information

tools Actual achievements

Consumer protection services:

Regional offices and the Head

Office serve as service centres for

easy access to improve service

delivery, a call centre and an

electronic case management

system are operationaland

complaints are received by telefax

and email

([email protected])

Inputting of data onto the

Electronic Case

Management System to

be accurate and to be

extended to include the

Municipality within the

area of the complaint.

Regional offices and the Head Office serve as

service centres for easy access to improve

service delivery, a call centre and an electronic

case management system are operational and

complaints are received by telefax and email

([email protected])

Impact Management Conduct one EQM

Stakeholder Forum per

quarter.

Four stakeholder fora were held, one in each

quarter.

Participate in one Provincial

Infrastructure Forum per

quarter, in order to

disseminate information to

local authorities. NB!! This

structure is no longer

operational due to Treasury

Containment Measures

As per the mid column- no expectation, no

target and no achievement

Booklets and brochures

available to stakeholders

No new booklets were developed in the

2019/20 financial year as the old booklets were

still available and therefore no plan to develop

such booklets.

2.4 Complaints Mechanism

Current/actual complaints

mechanism

Desired complaints

mechanism Actual achievements

Regional offices and the Head

Office serve as service centres for

easy access to improve service

delivery, a call centre and an

electronic case management

system are operational and

complaints are received by telefax

and email

([email protected] )

A Standard Operating System has

been approved to ensure that all

services across the Province are

delivered consistently and aligned

to time frames.

The Electronic Case

Management System be

utilized to the full

potential to assist with

Monitoring and

Evaluation and Trend

Analysis.

Consumers lodged complaints with the

Consumer Protection Share Call Centre or by

telefax, emails and walk ins at District Offices.

District supervisors and management monitor

and evaluate complaints as well as turnaround

times on a monthly basis. Guidance is also

provided by management with regard to

resolution of complaints.

Trend Analysis is undertaken on both

Complaints received per District as well as on

the classification type of complaint.

Impact Management: An appeal

process

The clients must lodge

an appeal within 20 days

after the decision and

the appeal is 90 days,

only the MEC can uphold

the appeal or rescind the

Environmental

Authorization.

Nine (9) appeals were finalized within legislated

timeframes

27

2.5 Organisational Environment

2019/20 was the last year of the 5-year plan. A lot of work was done to finalise implementation of planned activities

while developing new ones for the next 5-year cycle. The Department’s strategic goal is to create a conducive

environment for sustainable development, which is diversified, innovative, equitable and supported by a skilled

workforce. This is delivered directly by the department, its six District Offices and six public entities at a cost of

approximately R1.4 billion. A capable management leadership team supported by an enthusiastic workforce who

worked as teams was in place throughout the year. The service delivery model which was outlined in 2016 continued to

be operationalised. The department started a process to implement the 2018 approved organisational structure. Due

to funding constraints and labour issues, the structure could not be fully operationalised in 2019/20. The department

operated with 25.1% vacancy rate during the year. This was outside the acceptable 10% limit set for the public sector.

The department staff is well qualified with a number of officials being holders of Specialist, Masters and PhDs degrees.

During the year, 228 staff members were exposed to training (inclusive of short-term and long-term courses). Overall,

the organisational environment remained stable although the human resource function remained constrained.

The department has been largely compliant with processes and policies operational in the public service. Financial

resources of the department of approximately R1.4 billion, representing an allocation of approximately 1.4% of the total

Provincial budget, is insignificant to make a massive dent to unemployment, poverty and lack of industrial infrastructure.

On the other hand, financial expenditure has been impressive at 98.4% for the year. However, budgeting efficiency

issues need to be improved since there was significant virement of funds within programmes.

Strategic risks were reviewed at the beginning of the financial year. This will assist the department in managing its

strategic objectives. Work continued on governance and oversight of public entities under care of the department.

Board assessments were conducted by a third party on behalf of the department. Management of both the department

and public entities continued to receive political and strategic support from the MEC, Portfolio Committee and Boards

of Directors. At the beginning of the new year, the Department had a new MEC, Honourable Mlungisi Mvoko.

Engagements with the Chairpersons and Chief Executives of all entities were undertaken in order to check progress and

or remove any hindrance towards the full implementation of the department’s plans in line with governance and

oversight functions. There is still room for improvement in providing timely and accurate performance information to

aid management, the MEC and Boards with decision making.

Two DEDEAT Group planning sessions took place to review and plan for the new 5-year cycle with a special focus on

outcomes using the theory of change methodology. The department partnered with a number of stakeholders to

complement implementation of programmes and activities. This is key going forward since it increases the chances of

success given the dwindling resources and challenging operating environment. Implementation of the Operations

Management Framework (OMF) was slow due to human and financial capacity constraints in the department.

It is pleasing to note that the department had an adequate complement of tools and assets (e.g. vehicles, uniforms, ICT

equipment) to facilitate the implementation of various programmes. However, head office accommodation was

seriously impacted leading to officials operating in dispersed conditions. Provision of most ICT services like email,

internet was close to 100% to all staff members of the Department. This includes the provision of adequate working

tools desktop, laptops, tablets and printing services. Electronic communication of DEDEAT work was enhanced during

the year. Electronic e-permit solution for the Environmental Affairs section which was developed in 2017/18 could not

be finalised by SITA during the year. As a result, biodiversity permitting continued to be performed manually. The e-

vaya (an electronic document processing and tracking tool) system continued to function well easing and speeding

transactional processes in the department.

2.6 Key Policy Developments and Legislative Changes

The following is the status of pieces of legislation which should be noted:

• The Eastern Cape Gambling Amendment Act, 2015 (Act No. 1 of 2015) amended the Eastern Cape Gambling Act,

1997 (Act No. 5 of 1997) and came into operation on 1 August 2016. On the 19th February 2018 the Honourable

Premier published a Proclamation bringing into operation section 4 and section 5 of the Eastern Cape Gambling

Amendment Act, 2015 (Act No. 1 of 2015). These sections provide that the juristic person will be known as the

Eastern Cape Gambling Board. The impact of the Legislation provides for the following: reinforced monitoring to

enforce compliance by the industry; an expanded revenue-base and increased economic contribution; a revised

regulatory system that caters for new forms of gambling; a quicker decision making process and responsiveness

28

to demands; and enhanced suitability of mechanisms to promote entry into the industry. The Regulations in terms

of the Act are being finalised and will be published in Quarter 2 of the 2020/2021 Financial year.

• The Eastern Cape Liquor Authority Act, 2018 (Act No. 4 of 2018) was assented to and published in the Provincial

Gazette during March 2019. Regulations in terms of the Act have been finalised and will be published for comment

during Quarter 2 of the 2020/2021 financial year.

• The White Paper on Consumer Protection in the Eastern Cape has been endorsed by the Executive Council. The

Eastern Cape Consumer Protection Act, 2018 (Act No. 3 of 2018) has been assented to by the Honourable Premier

and published in the Provincial Gazette during March 2019. The Act when proclaimed and in operation will provide

the Office of the Consumer Protector with the necessary legislative mandate to ensure a more effective and efficient

service to consumers within the Eastern Cape and will be aligned to the Consumer Protection Act, 2008 and

provides for procedures and mechanisms to provide redress to consumers. Provision is made for the establishment

of the Eastern Cape Consumer Tribunal for referral of complaints that are not resolved in terms of alternative

dispute resolution mechanisms. The Eastern Cape Consumer Protection Act will come into operation as from the

1st June 2020. Regulations in terms of the Act will be published in Quarter 2 of the 2020/2021 financial year.

• The Eastern Cape Parks and Tourism Agency Act (No 2 of 2010) was reviewed. The Eastern Cape Parks and Tourism

Bill, 2018 was published for public comment on the 12th February 2018. The Bill will promote alignment with the

National tourism legislation whilst it will seek to address gaps that have been identified which have a direct impact

on implementation. The Bill has been endorsed by the Executive Council and will be tabled in the Provincial

Legislature during Quarter 3 of the 2020/2021 financial year.

• The Department has reviewed the Eastern Cape Development Corporation Act, 1997 (Act no. 2 of 1997). A White

Paper on the Eastern Cape Development Corporation is being developed which will inform the Eastern Cape

Development Corporation Bill to align with the Economic Policy direction of the country and the province.

• Formal and Informal businesses are currently governed by the Business Act, 1991 (Act No. 71 of 1991) which

predates the Constitution of the Republic of South Africa, 1996. The Department is currently working on the policy

development of a White Paper on Businesses in the Eastern Cape which will culminate in the publication for

comment of the Eastern Cape Businesses Bill. The overall intention of the Bill will be to provide for measures to

protect consumers in the Province against unhealthy, harmful, and unsafe goods and business practises, provide

for the designation of Licensing, Permitting and Registration Authorities, Committees and Officers in the Province

and their objects, powers, duties and functions, provide for a conducive environment to ensure graduation and

transitioning of small businesses operating in the informal sector into the main stream economy, provide for a

developmental agenda that covers transfer of skills, capacity building and business support to the SMME’s and to

provide for business data collection across the board that will be beneficial to proactive economic planning regime.

• The Eastern Cape Environmental Management Bill, 2019 was published for public comment on the 22nd July 2019.

The Bill is aims to rationalize, consolidate and reform the law regulating environmental management and to provide

for the harmonisation of provincial legislation with national legislation regulating protected areas, biodiversity,

waste management and air quality.

3. Strategic outcome oriented goals

The Department has one goal, which is supported by four strategic objectives.

Strategic Goal Abbreviated Strategic Objectives (SO)

To create a conducive

environment for

sustainable development

which is diversified,

innovative, equitable and

supported by a skilled

workforce.

SO 1 A leading high performance organisation which is efficient, effective, relevant and

financially viable with sufficient capacity and motivated staff.

SO 2 Strategic frameworks and partnerships support and promote infrastructure

development, industrialisation and sustainable SMMEs that reduce poverty, create

employment and economic equity in the Eastern Cape Province.

SO 3 Carbon footprint reduced and investments in sustainable projects increased in the

Eastern Cape.

SO 4 To establish implement and maintain effective environmental systems to manage

waste, air quality, environmental impact, coastal management and climate change for

sustainable development.

When the goal is linked to the strategic objectives, the following high-level results for the year under review can be

noted:

29

Outcome 4: Decent employment through inclusive growth The Department has created 16 579 jobs during the past year. A total of 233 SMMEs were provided with non-financial

support. The number of cooperatives funded was 20. A total of 7 002 people were trained in various sectors of the

economy.

Outcome 6: An efficient, competitive and responsive economic infrastructure network The IDZ programme performed relatively well considering the depressed economic climate. A total of 18 investors were

realised with a projected investment of R3,272 billion. The Department is working with the two IDZs on transitioning

from IDZs to SEZs since the publication of the Special Economic Zones (SEZ) Regulations.

Outcome 7: Rural development, land and agrarian reform, food security The Department continued to provide support to the agri-industry through the formation of an agro-processing forum.

This includes collaboration with the Department of Agriculture and Rural Development (DRDAR) which is primarily

involved in agri-farming. Three agro-processing initiatives were facilitated during the year.

Outcome 10: Environmental assets and natural resources that are well protected and continually

enhanced The Department has processed 95% of EIA applications within the permitted timeframes in 2019/20. Waste license

applications were also processed during the period. A total of 35 environmental capacity building activities were

conducted throughout the Province. The department through the ECPTA, added 12 627 hectares to the conservation

estate during the year. Through the environmental EPWP programme, 734 work opportunities were created.

Outcome 12: An efficient, effective and development oriented public service and an empowered,

fair and inclusive citizenship Empowerment of citizens took place through programmes such as environmental education, consumer, liquor and

gambling awareness campaigns. Through the work of the ECDC, Coega and ELIDZ, a total of 7002 people were

trained, thus providing a path to income security. The Consumer awareness programme empowered 13031 people

directly by way of 6 themed consumers workshops during the year. A total of 34 environmental awareness sessions

were conducted while the responsible gambling campaign reached an estimated 5.1 million people.

30

Performance Information by Programme

3.1 Programme 1: Administration

Programme Purpose

Administration provides the Department with strategic leadership and management, as well as overall administrative

and performance oversight function.

The programme is structured as follows:

Sub-Programme Sub-Programme Purpose

1.1: Office of the MEC Provide overall political and policy leadership for the Department

1.2: Office of the HOD Provide effective and efficient strategic leadership to the Department.

1.3: Financial Management Establish and maintain appropriate financial management systems.

1.4: Corporate Services Ensure adequate provision of institutional capacity through effective

human capital management, organisational development interventions.

31

Str

ate

gic

Ob

ject

ive:

SO

1: H

igh

Perf

orm

an

ce O

rgan

isati

on

Str

ate

gic

ob

ject

ive i

nd

ica

tors

, p

lan

ned

ta

rgets

an

d a

ctu

al

ach

ievem

en

ts

Pro

gra

mm

e N

am

e: A

dm

inis

trati

on

Str

ate

gic

Ob

ject

ive(s

) S

trate

gic

Ob

ject

ive I

nd

icato

r A

ctu

al

Ach

ievem

en

t

20

18

/20

19

Pla

nn

ed

Targ

et

20

19

/20

20

Act

ual

Ach

ievem

en

t

20

19

/20

20

Devia

tio

n f

rom

Pla

nn

ed

Targ

et

to

Act

ual

Ach

ievem

en

t

for

20

19

/20

20

SO

1: H

igh

Perf

orm

an

ce

Org

an

isati

on

1

Org

an

isati

on

al p

erf

orm

an

ce in

dex

0

- 0

0

2

Fin

an

cial m

atu

rity

in

dex

2.9

3

2.8

-0

.22

3

HR

eff

icie

ncy

in

dex

0

7

6.2

-0

.83

4

Cu

sto

mer

rela

tio

ns

ind

ex

0

4

0

-44

Perf

orm

an

ce in

dic

ato

rs, p

lan

ned

targ

ets

an

d a

ctu

al ach

ievem

en

ts

No

. P

rog

ram

me/S

ub

-pro

gra

mm

e

P

erf

orm

an

ce I

nd

icato

r

Act

ual

Ach

ievem

en

t

20

16

/20

17

Act

ual

Ach

ievem

en

t

20

17

/20

18

Act

ual

Ach

ievem

en

t

20

18

/20

19

Pla

nn

ed

Targ

et

20

19

/20

20

Act

ual

Ach

ievem

en

t

20

19

/20

20

Devia

tio

n f

rom

Pla

nn

ed

Targ

et

to

Act

ual

Ach

ievem

en

t fo

r

20

19

/20

20

Su

b-p

rog

ram

me 1

.1: O

ffic

e o

f th

e H

OD

1.1

A

vera

ge M

PA

T s

core

2.5

2.7

2.5

-

- 0

1.2

%

netw

ork

fu

nct

ion

alit

y

N/A

100%

96%

99.5

%

98.6

%

-0.9

%5

1.3

P

ub

lic E

nti

ties

Acc

ou

nta

bili

ty in

dex

8.4

9.5

8.9

10

8.5

-1

.56

2 T

he lo

wer

sco

re w

as d

ue to

the

fact

that

, in

2019

/20,

the

orga

nisa

tiona

l str

uctu

re fo

r tr

ansf

er p

aym

ent w

as n

ot fu

lly r

esou

rced

and

was

not

sep

arat

e fr

om th

e ca

shie

r’s o

ffice

. 3

The

slig

htly

low

er s

core

was

cau

sed

by s

taff

perc

eptio

n th

at r

ecru

itmen

t & s

elec

tion

proc

esse

s w

ere

not p

erfo

rmin

g op

timal

ly.

4 T

his

is c

ondu

cted

thro

ugh

the

empl

oyee

sat

isfa

ctio

n su

rvey

. The

opt

imal

func

tioni

ng o

f the

cus

tom

er c

are

unit

was

impa

cted

by

capa

city

issu

es. D

urin

g th

e re

port

ing

perio

d, c

usto

mer

car

e ha

d no

hum

an r

esou

rces

and

the

post

cou

ld n

ot

be fi

lled

due

to th

e re

stru

ctur

ing

proc

ess

that

is s

till u

nfol

ding

. 5

Dat

a lin

es h

ave

been

goi

ng d

own

as a

res

ult o

f pow

er in

terr

uptio

ns d

ue to

load

-she

ddin

g, c

able

thef

ts a

nd c

able

dam

age

caus

ed b

y ro

ad-c

onst

ruct

ion.

The

Dep

artm

ent d

oes

not h

ave

muc

h co

ntro

l ove

r th

ese

even

tual

ities

. 6

The

sco

re w

as lo

wer

bec

ause

of t

he fo

llow

ing:

sch

edul

ed q

uart

erly

ME

C/c

hairp

erso

ns m

eetin

gs w

ere

not h

eld

as a

ntic

ipat

ed d

ue to

the

busy

sch

edul

e of

the

ME

C; H

oD/C

EO

s fo

rum

mee

ting

sche

dule

d fo

r qu

arte

r 4

was

pos

tpon

ed d

ue

to C

OV

ID19

lock

dow

n; th

e E

CD

C,C

DC

, and

the

ELI

DZ

did

not

mee

t the

targ

ets

set f

or jo

b cr

eatio

n an

d in

vest

men

t pro

mot

ion;

the

EC

LB a

nd th

e E

CG

B d

id n

ot is

sue

licen

ces

and

colle

ct r

even

ue a

s pl

anne

d as

the

indu

stry

was

affe

cted

dr

astic

ally

dur

ing

the

CO

VID

19 lo

ckdo

wn;

and

the

EC

PT

A d

id n

ot m

eet t

he r

even

ue a

nd th

e to

uris

m ta

rget

as

plan

ned.

If ta

rget

s ar

e m

isse

d, o

r ce

rtai

n pl

anne

d ac

tiviti

es a

re n

ot u

nder

take

n, th

is h

as a

neg

ativ

e be

arin

g on

the

over

all s

core

of

the

inde

x.

32

In

dic

ato

r

Act

ual

Ach

ievem

en

t

20

16

/20

17

Act

ual

Ach

ievem

en

t

20

17

/20

18

Act

ual

Ach

ievem

en

t

20

18

/20

19

Pla

nn

ed

Targ

et

20

19

/20

20

Act

ual

Ach

ievem

en

t

20

19

/20

20

Devia

tio

n f

rom

Pla

nn

ed

Targ

et

to A

ctu

al

Ach

ievem

en

t fo

r

20

19

/20

20

Su

b-P

rog

ram

me 1

.3: Fin

an

cial M

an

ag

em

en

t

1.3

A

vera

ge n

um

ber

of

days

to

pay

sup

plie

rs

N/A

30

23

30

18

+12

7

1.4

A

nn

ual au

dit

ou

tco

me

Un

qu

alif

ied

U

nq

ualif

ied

U

nq

ualif

ied

C

lean

U

nq

ualif

ied

-

Su

b-P

rog

ram

me 1

.4: C

orp

ora

te S

erv

ices

1.5

%

im

ple

men

tati

on

of

the w

ork

ski

lls p

lan

67%

80%

100%

85%

151%

+

66

8

1.6

%

of

staff

co

mp

lyin

g w

ith

all

PM

DS p

roce

sses

(co

ntr

act

s an

d r

evi

ew

s)

81.7

%

92%

90%

95%

63.8

%

-31.2

%9

7 B

ette

r ac

hiev

emen

t is

due

to im

prov

emen

t in

syst

ems,

in p

artic

ular

the

e-va

ya s

yste

m a

nd th

e im

med

iate

res

pons

e by

end

-use

rs o

f goo

ds a

nd s

ervi

ces

as w

ell a

s im

prov

ed b

illin

g by

sup

plie

rs.

8 O

vera

chie

vem

ent r

esul

ted

from

an

ad

hoc r

eque

st fo

r tr

aini

ng fr

om th

e F

inan

ce U

nit,

whi

ch w

as fu

nded

by

the

Hum

an R

esou

rce

Dev

elop

men

t Uni

t. T

here

wer

e al

so m

ore

conf

eren

ces

atte

nded

by

staf

f tha

n w

as in

itial

ly fo

reca

sted

.

9 C

ontr

actin

g av

erag

ed 9

0.3%

due

to in

adeq

uate

sup

ervi

sion

from

the

resp

ectiv

e pr

ogra

mm

es/r

egio

ns a

nd la

ck o

f con

sequ

ence

man

agem

ent.

The

firs

t hal

f yea

r re

view

s av

erag

ed 8

1.1%

and

the

last

hal

f ave

rage

d 19

.9%

. The

firs

t hal

f has

be

en im

pact

ed b

y in

adeq

uate

sup

ervi

sion

and

lack

of c

onse

quen

t man

agem

ent.

For

the

seco

nd h

alf,

it’s

mos

tly S

MS

mem

bers

who

had

not

sub

mitt

ed th

eir

repo

rts

to th

e P

MD

S U

nit.

The

nat

iona

l loc

kdow

n ca

used

by

CO

VID

19 h

as

affe

cted

the

timeo

us c

ompl

etio

n an

d su

bmis

sion

of r

evie

ws.

Con

sequ

ently

, DP

SA

has

ext

ende

d th

e pe

riod

unde

r w

hich

the

revi

ews

and

cont

ract

ing

shou

ld b

e co

mpl

eted

.

33

Administration Key Achievements

Office of the HOD The Office of the HOD provided leadership, strategic guidance, management and administration of the department,

including ensuring efficient utilisation of resources, maintenance of discipline, promotion of sound labour relations and

proper use and care of state property. Integrated governance, service delivery and Public Entity Oversight were

facilitated. The office also oversighted the implementation of Provincial transversal programmes and transformation

priorities. The office participated in Provincial and National platforms that included among others, Portfolio Committee

sessions, cluster and cabinet committees, Environmental, Tourism and Economic Development MINMECs.

Strategic Management The strategic management operated with reduced capacity after the retirement of one official and the resignation of

another. The General Manager of the Unit was also assigned to the Corporate Services Unit. Despite this, most of the

planned work was achieved. Reporting tools and timelines for the department and public entities were developed and

distributed to relevant officials at the beginning of the year. Due to challenges experienced with office accommodation

and lack of electronic performance management system, the Unit created SharePoint portals for use by the department

and public entities for reporting purposes. This was activated during the third quarter.

The Strategic Management Unit developed and completed all statutory reporting documents including quarterly

performance reports (QPR) to the Department of Planning, Monitoring and Evaluation (DPME), full narrative reports,

half year report and the 2018/19 annual report. Performance validation was conducted for core programmes and in all

six public entities that report to the department. The Unit had planned to evaluate 2 programmes, which did not

materialise. Although terms of reference for M&E projects were developed in advance, procurement delays led to the

cancellation of these projects.

In terms of planning, all planning instruments for 2019/20 were developed and published including six regional

operational plans, the annual performance plan as well as the departmental operational plan. Support was also provided

to all six public entities of the department in relation to their plans. All plans of the public entities were reviewed in

preparation for the 2020/21 financial year. Since 2020/21 is the start of a new 5-year government cycle, the Strategic

Management Unit was able to develop a suite of new plans consisting of a 5-year strategic plan, an annual performance

plan and an operational plan with special emphasis on outcomes using the theory of change methodology. This process

was preceded by numerous engagements and research, culminating in the hosting of planning workshops in the

department and public entities. Lastly, the unit was instrumental in finalising key outputs such as the policy speech of

the MEC, the Provincial Medium-Term Strategic Framework (MTSF) and the Programme of Action (PoA).

Information and Communication Technology (ICT) DEDEAT has in the financial year under review implemented office 365 for all the departmental users. This provides

flexibility to scale DEDEAT’s business quickly as it can grow as the DEDEAT grows. Office 365 has provided the ability to

mix and match applications to create your DEDEAT own custom solution for each user or section, and it’s easy to add

or remove users by simply adding or eliminating licenses. This has enabled DEDEAT staff to work from anywhere as

long as they have internet connectivity, because it is entirely cloud-based, email, files and office programs (including

Word, PowerPoint, Excel, etc.) can be accessed from any location and any device. The DEDEAT staff are able to create,

edit, and share from PC, Mac or iOS, Android, or Windows device with anyone in real time.

This has provided ease of collaboration for teams that work together on tasks, documents or presentations. Everyone

who needs to contribute to or edit a document (or spreadsheet, or presentation, etc.), can work on the same version

(and get real-time changes) rather than having multiple copies. Furthermore, with multi-party HD video, shared

calendars and team chat, team members will always be in sync. Office 365 is always up to date because it’s in the cloud,

so DEDEAT benefit from the access to the latest versions at no additional charge, there are no compatibility issues

because all users will be using the same version.

DEDEAT has massively reduced capital spend through the subscription -based office 365 service, which means DEDEAT

pay an annual or monthly fee per user. Since it runs in the cloud, there is a reduced need for onsite servers for our

website, emails or document storage. This platform provides up to 5 devices per user. The beauty of Office 365 is that

documents can now be accessed from any of these devices, and auto-syncing means that the most current version is

always at hand.

During the beginning of the financial year DEDEAT experienced gas leak in the server rooms belonging to Social

Development, this meant that DEDEAT had to vacate the buildings. However, since ICT had moved most of the critical

34

systems to the cloud this meant that DEDEAT users were able to access Evaya to process electronic memos, e-leaves,

e-requisitions, payments of suppliers without any interruptions.

Financial Management Financial Management is a sub-programme under the Administration programme that facilitates the provision of

financial, supply chain, asset management, and internal control services to the department. This sub directorate has

continued to provide financial support to the department by ensuring that all statutory requirements are complied with

in terms of the Public Financial Management Act (PFMA) and related prescripts that led to improved spending and audit

outcomes. Within this context, the department is aiming to maintain its governance requirements and positive audit

outcomes

The department has in the past nine years achieved positive audit outcomes although its endeavour to obtain a clean

audit has been jeopardised by irregular expenditure and non-compliance with legislation issues, which most have since

been resolved. The under-expenditure in the 2019/20 financial year was approximately 3.6 per cent of the budget.

The unit has in the 2019/20 financial year worked under stressed conditions as the unit has been housed in two separate

buildings around King Williams Town. This has impacted negatively on the smooth running of the unit. The unit had

made efforts to continuously strengthen the control environment especially in the area of financial management, which

was still the main focus during the year under review. Annual training for the Financial Management division was

conducted on areas where weakness in internal controls were identified.

Monthly and quarterly submissions of the In-Year Monitoring (IYM) were made to the Provincial Treasury by the

department and the public entities respectively and other statutory reports for Supply Chain Management (SCM) as

required by legislation and provincial circulars. The rollover requests, the Medium-Term Expenditure Framework, the

Adjusted Estimates of Provincial Expenditure and Estimates for Provincial Expenditure were also submitted as required

by the Treasury Guidelines were also submitted as per the Treasury guidance and timeframes. A total of 86% approved

invoices were paid within 30 days of receipt and 14% of the invoices were paid outside of 30 days due to end-user

goods delivery related matters and SCM unresolved issues (e.g. tax clearance and banking details verification, incorrect

billing by the suppliers.

The financial Management unit has paid all valid invoices within thirty days in the year under review, which is consistent

with previous financial years. The department was able to award services through procurement processes to BBBEE

compliant suppliers. The internal control activities ensure that the Department complies with laws and regulations of

financial management. The activities undertaken during the period under review includes ensuring that, before

payments are authorised in the LOGIS or BAS system, all documents are checked and verified to comply with applicable

policies and regulations. The efforts and systems put in place to strengthen the control environment prove to be

effective, and this is evidenced by the reduction of irregular expenditure incurred. Within this context, the department

is aiming to maintain its positive audit outcomes.

Human Resource Management Human resource management refers to the process of recruiting and developing department’s workforce. The Human

Resources (HR) department is concerned with identifying talent gaps in the Department, advertising for positions,

evaluating potential candidates, and hiring top talent. For the year under review,19 out of 21 vacant funded positions

were filled at an average rate of 3 month each. The prescribed turnaround for filling of vacancies is 6 months and this

a huge achievement that is worth mentioning. This process was guided by an approved Annual Recruitment Plan. HR

management also oversees the development and review of guidelines and policies and in terms of the actual

achievement in this regard, 8 of these were developed and approved. Overall, human resource management guarantees

the smooth running of employees within the Department. The practice of Human Resources Management (HRM) is

viewed through the prism of overall strategic goals for the Department instead of a standalone tint that takes a unit

based or a micro approach. The holistic perspective towards HRM ensures that there are no piecemeal strategies and

the HRM policy enmeshes itself fully with those of the Departmental goals. For instance, if the training needs of the

employees are simply met with perfunctory trainings on omnibus topics, the department stands to lose not only from

the time that the employees spend in training but also a loss of direction. Hence, the Department that takes its HRM

policies seriously will ensure that training is based on focused and topical methods. In addition, HRM ensures

employer/employee relations in the Department and this unit has been struggling over the year, in the year under

reporting, drastic improvements have been seen in terms of getting cases finalised and with the required turn-around

time.

Another critical component of Human Resource Management is Organisational Development (OD) Directorate which

includes Organisational Design, Human Resource Development (HRD), Functional Efficiency Services (FES), Performance

35

Management and Development System Unit (PMDS). The Departmental Structure was approved in March 2018 and

subsequently implemented in a phased approach which resulted in migration of 473 employees with 176 vacancies and

93 employees in excess of the establishment pending placement. This followed a series of engagements and

consultation of labour and Management including all district offices. With regards to PMDS, the department remained

in the top 10% in the province in terms of contracting with all its SMS members signing on time and the levels below

SMS achieving above 90% of signed contracts by the end of May 2019. The improvement was a result of a number of

interventions such as training and development on the application of the Performance Management and Development

System (PMDS) and consequence management for non-compliance to policy and deadlines. There has, however, been

delays in the processing of pay progression and performance bonuses due to delayed sitting of level-based moderation

committees caused by the unavailability of workspace and lack of access to files. In terms of implementation of WSP,

the department has trained 228 employees. This figure excludes bursaries awarded to permanent employees.

Strategy to overcome areas of under performance Organisational Development has recorded under performance on the Performance Management Development System

(PMDS) as a result of the Covid19 outbreak. The under-performance was non-compliance with 2019/20 annual

assessments and second mid-year reviews which were due for submission on 31 March 2020. Thus, PMDS unit has

devised mitigation strategies to deal with areas of under-performance, which are listed as follows:

• Gradual development and introduction of ePMDS system to ease the challenge of non-submission

• The Programme Managers will have to enforce Microsoft Teams Review Meetings.

Changes to planned targets There were no changes made to the 2019/20 annual performance plan.

Linking performance with budgets The performance indicators of the programme provide firstly an indication of overall organisational performance and,

secondly, measures of performance in the delivery of administrative service functions to the rest of the Department.

Therefore, there may not be a direct link between the performance of the programme and the budget. The link is more

indirect and reflected through compensation of employees, goods and services etc.

Sub-programme Expenditure

2019/20 2018/19

Sub programme

Final

Appropriatio

n

Actual

Expenditur

e

(Over)/Unde

r

Expenditure

Final

Appropriatio

n

Actual

Expenditur

e

(Over)/Unde

r

Expenditure R'000 R'000 R'000 % R'000 R'000

1 OFFICE OF THE MEC 1,644 1,446 198 3,614 3,344 269

2 OFFICE OF THE HOD 66,120 64,129 1,991 61,895 55,408 6,487

3

FINANCIAL

MANAGEMENT

115,157 114,033 1,124 109,527 108,774 751

4 CORPORATE SERVICES 61,132 58,464 2,668 58,546 57,361 1,185

TOTAL 244,053 238,072 5,981 233,580 224,887 8,691

Goods and Services The unspent funds relate to the following items; Payment of legal fees to the Department of Justice (DoJ) where the

DOJ has instructed attorneys to represent the department on legal matters. There has been a delay by the DOJ in

submitting these invoices for payment.

The department had plans to develop a performance management system. This was delayed after the signed

specifications document went missing and by the time a decision was made it was too late to initiate procurement

resulting in funds being allocated elsewhere. The Internal Audit unit had planned training that was to be attended

throughout the financial year but that was delayed as the department had to reprioritise funds.

The department had outsourced the ethics management verification and e-Disclosure processes, and business

continuity. However, consultants submitted their invoices late. The maintenance budget (Utilization of the photocopiers)

had been reduced due to the reduction of leased machines as the department is moving to a paperless environment.

The HR Planning project was budgeted for and was part of the departmental procurement plan but was later cancelled.

36

Capital Payments: Under expenditure was due to an outstanding accrual for office equipment. There has been challenges with the delivery

of office equipment to the department due to the changes in the location of Head Office to scattered sub-offices

between King Williams’ Town, Bhisho and East London.

3.2 Programme 2: Economic Development and Tourism

Economic development is primarily responsible for administering sustainable economic policies and developing

appropriate strategies to promote business development and job creation. The overall goal of the programme is to

sustain economic development through partnerships.

This programme is structured as follows:

Sub-programme Sub-programme Purpose

2.1: Integrated Economic Development Services • To support and develop business enterprises.

• To promote economic growth and development of local

economies with partnerships with key stakeholders by

aligning Local and Regional Economic Development (LRED)

initiatives with government programmes.

• To facilitate the process of empowerment and creation of an

enabling business environment for PDIs.

2.2: Trade and Sector Development • To facilitate trade promotion, retention and attraction of

investment in priority sectors.

• To facilitate implementation of National and Provincial

Priority Programmes.

• To create an enabling environment for the sustainable

economic growth and development in prioritised and

emerging sectors in the Eastern Cape.

• To drive implementation of programmes in these prioritised

sectors: agro processing; Automotive; Green Economy;

Manufacturing; and Tourism

2.3: Business Regulations and Governance • To lobby for provision of a regulatory framework that

addresses barriers in the broader business environment

• To promote good corporate governance principles, stability

and efficiency in doing business.

• To develop, implement and promote measures that ensure

the rights and interests of all consumers.

• To promote and maintain an effective and efficient system

for regulation of business, industries and sectors.

2.4: Economic Planning • To develop evidence based provincial policies and strategies

which inform decision making processes.

• To ensure accessible scientific information to inform

economic policy and planning processes.

2.5 Tourism • To create an enabling tourism environment through

legislation, policy and strategy development

• To create demand and supply for tourism

• To ensure sustainability and tourism sector transformation

37

Str

ate

gic

Ob

ject

ive

•

SO

2: S

ust

ain

ab

le e

nte

rpri

ses

an

d in

frast

ruct

ure

deve

lop

men

t th

at

ben

efi

ts lo

cal co

mm

un

itie

s are

su

pp

ort

ed

an

d p

rom

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d.

Str

ate

gic

ob

ject

ives

ind

ica

tors

, p

lan

ned

ta

rgets

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d a

ctu

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ach

ievem

en

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gra

mm

e N

am

e: Eco

no

mic

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pm

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gic

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nd

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nn

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tio

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nn

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to A

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SO

2: S

ust

ain

ab

le e

nte

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an

d

infr

ast

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deve

lop

men

t th

at

ben

efi

ts lo

cal co

mm

un

itie

s are

sup

po

rted

an

d p

rom

ote

d

1

Em

plo

ymen

t C

reati

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(G

row

th in

em

plo

ymen

t -

%)

-1.2

0.8

0.2

4%

-5

6%

10

2

East

ern

Cap

e R

eg

ion

al Eco

no

mic

Gro

wth

Rate

(G

DP

R -

%)

0.6

1.6

0.6

%

-1.0

%11

3

Ind

ust

ry g

row

th r

ate

0.9

8

1.0

0.6

7

-0.3

3%

12

4

Nu

mb

er

of

stra

teg

ic p

roje

cts

sup

po

rted

by

the P

rovi

nci

al

Eco

no

mic

Sti

mu

lus

Fun

d (

PESF)

N

/A

5

14

+9

13

10 F

aste

r gr

owth

of t

he p

rovi

ncia

l lab

our

forc

e su

pply

out

pace

s pr

ovin

cial

job

crea

tion.

11

The

eco

nom

y of

Eas

tern

Cap

e (E

C)

has

stag

nate

d ov

er th

e la

st c

oupl

e of

yea

rs a

nd p

roje

ctio

ns r

emai

n su

bdue

d, a

s do

wns

ide

risks

hav

e in

tens

ified

am

idst

gro

win

g po

licy

unce

rtai

nty

and

wea

keni

ng b

usin

ess

sent

imen

t. 12

The

eco

nom

y w

as la

rgel

y de

pres

sed

in 2

019/

20. A

mon

g a

host

of f

acto

rs, t

here

was

a g

ener

al la

ck o

f dem

and

for

good

s, c

redi

t rat

ing

dow

ngra

des,

inte

rrup

ted

pow

er s

uppl

ies,

a lo

t mor

e go

ods

bein

g im

port

ed in

stea

d of

bei

ng

man

ufac

ture

d lo

cally

, im

pact

ed o

n th

e de

sira

ble

indu

stry

gro

wth

rat

e.

13 T

his

targ

et is

dem

and

driv

en. S

ince

this

is a

new

indi

cato

r, in

itial

est

imat

es fo

r su

ppor

t was

set

at 1

5 bu

t was

late

r re

vise

d do

wnw

ards

to 5

bas

ed o

n ex

istin

g ca

paci

ty a

nd th

e ne

ed to

pro

vide

suf

ficie

nt fu

ndin

g to

hig

h le

vel p

roje

cts.

S

ubse

quen

tly, a

tota

l of 3

5 bu

sine

ss p

lans

wer

e re

ceiv

ed a

nd r

evie

wed

of w

hich

14

wer

e re

com

men

ded

for

fund

ing.

The

se p

roje

cts

prov

ed to

hav

e a

stro

ng e

cono

mic

impa

ct a

nd th

at th

e pr

ovin

ce s

tand

s to

ben

efit

imm

ense

ly fr

om th

em.

38

Perf

orm

an

ce in

dic

ato

rs p

lan

ned

targ

ets

an

d a

ctu

al ach

ievem

en

ts

No

P

erf

orm

an

ce I

nd

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r

Act

ual

Ach

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en

t

20

16

/20

17

Act

ual

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t

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17

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18

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ual

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en

t

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18

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Pla

nn

ed

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et

20

19

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20

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ual

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ievem

en

t

20

19

/20

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Devia

tio

n

fro

m P

lan

ned

Targ

et

to

Act

ual

Ach

ievem

en

t

for

20

19

/20

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Pro

gra

mm

e/

Su

b–p

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ram

me: In

teg

rate

d E

con

om

ic D

evelo

pm

en

t

En

terp

rise

Develo

pm

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t

2.1

Nu

mb

er

of

coo

pera

tive

s p

rovi

ded

wit

h n

on

-

fin

an

cial su

pp

ort

88

98

94

104

121

+

17

14

Reg

ion

al

an

d L

oca

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no

mic

Develo

pm

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t

2.2

N

um

ber

of

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t p

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fun

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Develo

pm

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2.3

N

um

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of

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nerg

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litate

d

5

6

6

4

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8

7

7

6

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16

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N

um

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of

ag

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2

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usi

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ula

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d G

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Bu

sin

ess

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um

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licy

fram

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ork

s d

eve

lop

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en

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ase

of

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ing

bu

sin

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in

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3

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3

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tect

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N

um

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of

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sum

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ram

mes

imp

lem

en

ted

6

6

6

6

6

0

14 A

bove

targ

et a

chie

vem

ent w

as r

ealis

ed d

ue to

incr

ease

d de

man

d on

the

depa

rtm

ent f

or c

oope

rativ

e su

ppor

t as

wel

l as

impr

oved

par

tner

ship

s w

ith k

ey s

take

hold

ers

e,g.

Nat

iona

l Dev

elop

men

t Age

ncy

(ND

A),

Dep

artm

ent o

f Sm

all

Bus

ines

s D

evel

opm

ent (

DS

BD

) an

d M

unic

ipal

ities

. 15

The

app

oint

ed c

onsu

ltant

to p

erfo

rm d

ue d

ilige

nce

on r

ecom

men

ded

proj

ects

faile

d to

del

iver

qua

lity

repo

rts

to th

e de

part

men

t, th

us d

elay

ing

the

final

isat

ion

of a

ppro

vals

of t

he 2

019/

20 a

pplic

atio

ns. T

his

nece

ssita

ted

the

proc

urem

ent o

f a

new

ser

vice

pro

vide

r to

per

form

due

dili

genc

e. H

owev

er, t

he n

ew s

ervi

ce p

rovi

der

was

onl

y su

cces

sful

ly e

ngag

ed o

n th

e 21

st o

f Feb

ruar

y 20

20, t

hus

only

bei

ng a

ble

to c

oncl

ude

the

proc

essi

ng o

f app

licat

ions

for

fund

ing

in th

e 20

20/2

1 fin

anci

al y

ear.

16

Ove

rper

form

ance

was

due

to th

e fa

ct th

at, t

he m

anuf

actu

ring

unit

was

giv

en a

n ad

ditio

nal t

ask

durin

g th

e ye

ar, i

.e. t

o dr

ive

the

'' of

ftake

agr

eem

ent "

inte

rven

tion

as p

art o

f loc

al p

rocu

rem

ent i

nitia

tive

of th

e P

rovi

ncia

l Tre

asur

y. F

urth

er

wor

k w

ill b

e co

nduc

ted

in th

e ne

w fi

nanc

ial y

ear

to r

oll o

ut th

is p

lan.

39

No

P

erf

orm

an

ce I

nd

icato

r

Act

ual

Ach

ievem

en

t

20

16

/20

17

Act

ual

Ach

ievem

en

t

20

17

/20

18

Act

ual

Ach

ievem

en

t

20

18

/20

19

Pla

nn

ed

Targ

et

20

19

/20

20

Act

ual

Ach

ievem

en

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40

Economic Development Key Achievements

Integrated Economic Development Services

Local Regional and Economic Development During 2019/20 financial year, the department funded four (4) enterprises under the LRED Fund. Two manufacturing

businesses in Dimbaza, Buffalo City Metropolitan area. One of the businesses is for people with disabilities. The other

two are based in the highly impoverished Joe Gqabi District Municipality. One operates in the manufacturing sector and

the other is for a feasibility study in the agro-processing sector. A total amount of R1 779 770.86 was transferred directly

to these entities. EC Braille and M&B were approved in the 2018/19 financial year, however due to a technicality with

CSD their transfers could not be finalised during that year. AET Africa was funded in 2018/19 financial year, however,

some of the items funded had VAT excluded as well as commissioning of the machinery. This payment was then made

in the 2019/20 financial year. Pengulah Agri was a 2018/19 appellant whose appeal was successful and therefore the

transfer was made in the 2019/20 financial year.

The department experienced delays in the roll out of the LRED fund during the 2019/20 financial year. The major

obstacle was in relation to a suitable appointment of a service provider to conduct due diligence on selected businesses.

Initially a tender was advertised, from which no suitable service provider was found. Secondly, requests for quotations

were sent out, which resulted in an appointment of an unsuitable service provider who provided the department with

poor quality reports, which the department could not utilise to make final decisions on verified businesses. Thirdly, from

the last quotes requested, Price Water Coopers (PWC) was appointed on 21st February 2020 to perform due diligence

on LRED grant applications. The final due diligence reports were submitted by PWC during quarter 1 of the 2020/21

financial year.

In response to the poor response and quality of submissions received for LRED Fund, especially from the rural

communities, LRED Fund workshops were held in the rural municipalities of the Eastern Cape, specifically in OR Tambo

(Nyandeli Local Municipality in Libode) and (Ingquza Hill Local Municipality in Lusikisiki), Alfred Nzo (Mzimvubu Local

Municipality in Mt Frere), Amathole (in Mbhashe Local Municipality, covering Elliotdale, Idutywa and Willowvale.

Enterprise Development The Enterprise Development Directorate has threefold tasks and the first one is creating an enabling environment for

the growth, sustainability and competitiveness of enterprises (SMME’s, Co-operatives, Informal businesses and other

social and community enterprises) through review and alignment of strategies with policies and legislations that govern

these entities. Secondly, design support programmes that aims at socio-economic development of the designated

groups that includes Women, Youth, People with disability and Military veterans. Thirdly, monitor the implementation

of the support programmes by the designated statutory institutions that provides both the financial and non-financial

support across all the spheres of government.

A series of training workshops on 2019 Co-operative Regulations of the amended act no.6 of 2013 were held in

partnership with the department of small business Development (DSBD) and National Development Agency (NDA) (14-

15 May 2019 and11-20 February 2020 respectively) for both the government officials (Business Advisors, LED officials,

Trade & Industry advisors) at the level of provincial sector departments and Municipalities and Co-operative

organizations and Business practitioners. The new changes brought by the co-operative amended act no.6 of 2013 is

the four tier structure of the South African Co-operative Model (Primary Co-op, Secondary-Co-op, Tertiary Co-op and

Apex Body), Legislative & administrative compliance, intergovernmental framework and institutional support in a form

of Co-operative Development Agency (CDA) and Co-operative tribunal for conflict resolution.

The department in partnership with DSBD had conducted stakeholder consultative sessions (Municipality

officials’/Business chambers/Informal traders’ organizations) during 20-24 May 2020 in all the districts and 2 Metros

with the review and repeal of the Business Act No. 71 of 1991. The act has to be repealed as it is outdated and not in

sync with many economic developments post 1994 democratic dispensation. The review takes into account the

provisions of the SA Constitution section 44 and schedule 4 and 5 for the concurrent functions between national,

provincial and Local government spheres. The new act will provide more clarity on the role of the national government-

creating a framework and minimum standards for licensing of businesses activities with Provinces and Municipalities

providing concrete by laws as dictated by conditions and operating environment for local businesses.

The directorate has embarked on various business awareness programmes targeting Youth, Women, People with

disability and Military veterans across all the six districts including the two Metros. The programmes targeting the youth

41

were implemented in partnership with various stakeholders at the regional level with special focus on June Month., and

the women during the August Month.

And people with disability during November/December months. The Global Entrepreneurship week (GEW) which is held

on annual basis from the 2nd week of November and celebrated globally by more than 10 Million people 39 000

simultaneous events over the week in more than 170 countries that participate in Global Entrepreneurship Network

(GEN) was also celebrated during the November month. The key themes included education, enterprise ecosystem,

financial inclusion and policy development and collaboration with various institutions and stakeholders were held

around promotion of entrepreneurship, grassroots innovations, round table discussions for the disability sector, and

policy workshops for the Military veterans in all the six districts. The department has a partnership with Company

Intellectual Property Commission (CIPC) for the registration of companies and other related company related matters

such as annual returns, Black Economic Empowerment (BEE) certificate, director amendment, disclosure certificate,

customer registration and password reset. The department has exceeded the annual target of 1540 by 228% and has

recorded 3519 transactions across all the six district Municipalities and two Metros. The increase has been influenced

by taking services to the people through Mobile registration services in the various information awareness sessions,

business opportunity workshops and stakeholder engagement sessions. The self- service terminals (SST) has reduced

tremendously the waiting period for company registration from 4 weeks to 24hrs and has empowered the business

owners to actively engaged on company matters through direct access to their accounts through registration.

A total of 121 co-operatives were provided with non- financial assistance (technical advice, regulatory compliance,

Governance and administrative registration processes) against a target of 104. The target was exceeded due to the

awareness sessions that were held in partnership with other stakeholders as well as the monitoring of the funded co-

operatives under IMVABA fund. In terms of funding, a total of 20 cooperatives were supported under period under

review through IMVABA fund that is administered by Eastern Cape Development Corporation (ECDC) on behalf of the

department. A total of 108 job opportunities were facilitated for the 20 cooperatives supported and 65 are women and

29 are youth. The key sectors supported include Agriculture (11) Manufacturing (6) and Services (3). The beneficiaries

are in all the six districts with OR Tambo (7) Amathole and Chris Hani with (3) each and Nelson Mandela Metro (NMM),

Buffalo City Metropolitan Municipality (BCMM) and Alfred Nzo with (2) each and Joe Gqabi (1).

Trade and Sector Development

Sustainable Energy Sustainable Energy is both an economic activity and an economic enabler. During the year under review South Africa

went through a period of constrained energy supply which in turn severely hampered provincial economic growth. In

implementing the Provincial Sustainable Energy Strategy, the province is working to create the most enabling

institutional environment for sustainable energy development, which in turn can unlock and trigger provincial economic

growth. During the financial year, the Department supported sustainable energy initiatives under four categories,

namely:

Independent Power Producer Support Processes and support to SMMEs in the Energy Sector: Under its Wind and Solar

farm support programme, the Department is working to unlock the opportunities for new wind and solar farms in

appropriate areas in the Province. Particular focus is placed on overcoming the obstacles to renewable energy in the

former homelands; while paying attention to infrastructure challenges such as Grid Transmission Infrastructure.

Furthermore, through a number of programmes, the department focuses on supporting optimal socio-economic

outcomes in the communities where the wind farms are situated. This included support to the Intergovernmental

Relations – Independent Power Producer Forum. This is a technical platform for local and provincial government, and

the Independent Power Producers. DEDEAT also continued with the SMME in Energy Programme, which is a process

that works to build the readiness of local SMMEs for participation in the infrastructure value chain prior to project

initiation. This means that once the project starts, local rural SMMEs are on a more even footing with those from the

Metros.

Rural renewable energy minigrid and Support to Municipal Embedded Generation: Since 2015, DEDEAT in collaboration

with numerous partners, has championed the establishment of the Eastern Cape Minigrid Project. The project entails a

renewable energy hybrid mini grid which provides high quality energy to a deep rural village which is too remote to be

electrified by the conventional grid. The minigrid will ultimately be owned and operated by a local municipality. The

construction of the solar and grid components was completed during the year under review, with grid energization

occurring in the fourth quarter. Going forward the grid will go through an 18-month commissioning test period, while

the wind energy component will be added towards the end of 2020. This is a first of kind, proof of concept model for

bringing high quality electrification to deep rural communities.

42

Support to the Provincial Gas and Bunkering localization programme: During the year, DEDEAT focussed on supporting

the advancement of the Liquified Natural Gas (LNG) Gas Programme at Coega, while also focussing on Maritime

Bunkering localisation support. A bunkering value chain was developed, which formed the basis for an SMME Bunkering

Capacity assessment and draft resource pack.

Sustainable Energy Forum or equivalent: DEDEAT hosted sessions which focusses on partnerships and collaboration for

the advancement of the Eastern Cape Minigrid Project, among others.

Manufacturing

Over the year in review, the DEDEAT manufacturing activities have resulted in the support of ‘’7’’ manufacturing

initiatives. These are summarised as follows:

1. Eastern Cape Automotive Industry Forum (ECAIF) – Partnership with Tier 1 to Tier 3 Eastern Cape (EC) automotive

supplier to roll-out interventions to improve competitiveness of this sectors;

2. Non-Automotive Manufacturing Cluster (NAMC) – Partnerships with the metals, chemicals and plastics sector in

Buffalo city metro and Nelson Mandela Bay Metro to roll-out interventions to improve competitiveness of this

sectors;

3. EC Tooling Initiative (ECTI) – Partnership with the EC tooling sector to roll-out interventions to improve

competitiveness of this sectors;

4. Support to manufacturing companies in distress: Maintaining a self-help web-based portal and helpdesk to

support (financial and non-financial) the manufacturing sector (incl of agro-processing) and aiding companies or

initiatives where such assistance falls within the appropriate departmental mandate;

5. Support with the Implementation of offtake agreements for the local procurement initiative: The finalisation and

roll-out of an implementation plan to ensure that new manufacturing capacity is localised to supply EC government

goods that are imported from outside the province or South Africa;

6. Support the maritime manufacturing sector – development and roll-out of a sector plan to support the growth of

this sector;

7. Support to the revitalisation of EC state-owned Industrial Parks (IP) – the facilitation of support (financial) to EC IPs

to fast track infrastructure developments to enhance these facilities for attraction of new investors.

With regards to the Automotive sector, ECAIF was finalised and is implementing a new EC Automotive ‘’4’’ year strategy

which is aligned to newly adopted SA Automotive masterplan 2035. A localisation supermarket has been successfully

launched to support new black entrants with market opportunities to form part of the mainstream supply chain of the

automotive sector. Additionally, the youth skills placement programme, a partnership with MerSETA has resulted in the

absorption of ‘’356’’ youth in the industry. The sector aims to continue with this initiative annually.

With regards to the general manufacturing sector, the Non-Automotive Manufacturing (NAM) cluster has secured

additional funding from the Provincial economic stimulus fund to implement the advance prototyping shared facility in

East London. The project has gained significant traction and planned to be completed in the new financial year.

The maritime manufacturing sector remains underdeveloped in the province. It is the intend of the department to find

sustainable interventions to enable the growth of this sector. This was concretized through the development of a

localisation sector action plan to drive interventions in this segment. The plan will be rolled out and monitored in the

new financial year.

The de-industrialisation trend remains high in the province and this it aggravated by the South African economy being

trapped in a low growth environment. The manufacturing sector is constantly plagued by market dynamic impacting

their sustainability. The department hence agreed to maintain the ‘’support programme to manufacturing companies

in distress’’ over the MTEF period. The programme has resulted thus far in support rendered to ‘’17’’ companies seeking

non-financial and financial support. Through the departmental jobs stimulus fund implemented by the ECDC, ‘’17’’

distressed companies received R9.8 million funding support resulting in the retention of ‘’980’’ jobs in the province.

The EC government procurement is deemed as a very important instrument to support SMMEs in the province. The

province committed to spend at least ‘’50%’’ of its goods and service budget on local SMMEs in 2016. This commitment

resulted in the implementation of the Local Economic Development Procurement Framework in 2016. The province

additionally committed to expand manufacturing capacity to supply goods to the Province which are being imported

from Outside the province or South Africa. The department has developed an implementation plan to support the roll-

out of offtake agreements in the province in the new financial year.

43

Agro-processing A product of the Provincial Agro Industry Development Forum, the Provincial Agro Industry Development Action

Implementation Plan, was approved by the Provincial Executive Committee. The plan is aimed at ensuring alignment of

the sector stakeholders along the priority commodities value chains in the province. The complete value chain approach

has been adopted in order to realise all the possible economic development benefits of the sector, that is, revenue

generation and job creation. The target is to grow the agro industry contribution to the provincial economy by 20%

within the next 5 years through providing increased primary production, increased local value addition of products

produced in the province and reduce the import of agricultural products into the province especially those that can be

produced competitively. The Provincial Executive approval is paving a way for ramped private sector engagements for

collaboration and partnership towards sector development and transformation. The pillars of the plan include

institutional arrangements for industry development, increased agro processing and beneficiation, increased primary

production support, agricultural land utilisation monitoring, industry research and development as well as business and

entrepreneurship development.

The Department working with the Provincial Treasury has engaged the World Bank as means of resource mobilisation

for the sector development through local value chains and a commitment for funding towards:

(i) Building Data on and Monitoring Government Support to Agricultural Markets: To be funded under IFC

Investment Climate program specifically the South Africa Private Sector Competitiveness (SA PSCP – 602710) and

Investment Climate Reform for Prosperity.

(ii) Irrigation Improvement Planning: Initially to be funded under through internal WBG funding (phase 1), with a view

to identification of additional funding for an expanded scope of work (phase 2).

The final figures will be informed by the Terms of Reference for the projects to be developed in the next financial year.

In-line with the Plan, the Department has funded the first initiatives for the integrated sector development through the

Provincial Economic Stimulus Fund for the development of the Fresh Produce industry in the Chris Hani District, Grain

industry development covering Mqanduli/Ugie/Maclear/Mt Fletcher, Aquaculture – abalone infrastructure development

in the Coega Aquaculture Development Zone and Red Meat industry towards commercialisation of the Custom feedlots

in the province. An amount of R75,588 Million was transferred to the implementing entities which include the Chris Hani

Development Agency, ECRDA and Coega Special Economic Zone (SEZ) for the 2019-2020 financial year. The projects

are in the early implementation stages with some projects to be fully operational in the next financial year while others

are multi-year projects.

In support of the industry research and development pillar of the plan, the Department has signed a collaboration with

the Technology Innovation Agency (TIA) to mainstream innovation in the sector for new entrants’ developments with

new products and technologies thus providing for inclusive sector growth and development. The priority commodities

for the innovation support include Fresh Produce, Red Meat, Grain and Cannabis Industry.

The Department as part of a provincial delegation to Canada undertook a Cannabis Industry Study tour aimed at

understanding how the Canadians have developed the industry and explore opportunities for collaboration with

investors, businesses and government in Ontario Province Canada for successful development of the Cannabis Industry

in the Eastern Cape Province South Africa. It was confirmed that legislation and policy are critical for the development

of the industry and all stakeholders (legal fraternity, business, government, communities and medics) should work

together for the initiative to be a success. Engagements with the National Departments and Authorities are underway

for the development of a National Cannabis Masterplan which has among other pillars has legislation for inclusive

cannabis industry intended to include the rural communities. The Provincial Executive has granted a go ahead for the

existing industrial complexes (SEZs and Industrial Parks) to be aggressive in attracting investors under the current

legislation regime which requires controlled environments and there are already signed letters of intents for both the

East London Industrial Development Zone (ELIDZ) and the Coega SEZ.

The development of the Wild Coast SEZ was continued and progressed well during the year as the application for

designation was submitted to the Department of Trade and Industry (Dti) on the 24th of July 2020 and now awaiting

outcome. The application had a pipeline of investors which were all relevant to the agricultural production in the Wild

Coast region as they included potato, vegetables, poultry processing and beverages. Working with the agro industry

stakeholders, the next step will be mobilisation of farmers to ramp up production as suppliers to the processors on the

zone.

Economic Development projects under the Stimulus fund, these projects were to be implemented in 2019/20 financial

year Rural Agro-Industries & Financial Initiative and Somerset East Multi-Purpose Industrial Park the following

allocations were made:

44

MUNICIPALITIES TYPE AMOUNT

Cacadu Development Agency Somerset East Multi-Purpose Industrial Park R28 000 000 -00

Chris Hani Development Agency Rural Agro-Industries & Financial Initiative R15 000.000-00

Business regulation and governance

Policy, legislative and strategy development:

The department has held a series of training workshops on 2019 Co-operative Regulations of the amended act no.6 of

2013 in partnership with the department of small business Development (DSBD) and National Development Agency

(NDA) (14-15 May 2019 and11-20 February 2020 respectively) for both the government officials (Business Advisors, LED

officials, Trade & Industry advisors) at the level of provincial sector departments and Municipalities and Co-operative

organizations and Business practitioners. The new changes brought by the co-operative amended act no.6 of 2013 is

the four tier structure of the South African Co-operative Model (Primary Co-op, Secondary-Co-op, Tertiary Co-op and

Apex Body), Legislative & administrative compliance, intergovernmental framework and institutional support in a form

of Co-operative Development Agency (CDA) and Co-operative tribunal for conflict resolution.

The EC draft license bill was presented by Business Regulations unit to stakeholders with a hope for more inputs towards

a process to align with national. The specific recommendations regarding the Act amongst others are as follows:

• Businesses Act 71 of 1991 be repealed with its implementing Proclamations;

• No business be exempt from the operation of the Act regardless of size or sector unless the exemption procedure

as set out is satisfied;

• National Legislation should set the minimum standards that all businesses would have to adhere to and Provinces

and Municipalities provide concrete by laws to govern business activities in their respective jurisdictions,

• In licensing businesses non-discriminatory practices, efficient, effective, transparent, and unbiased decision-

making processes be followed;

• It be required that a person obtaining a license be obliged to fulfill all requirements set down in the minimum

standards;

• A registry of information be created at all spheres of government and should be updated;

• All businesses must be subjected to the required inspections before they can be licensed.

The department in partnership with Economic Development Department has on the 19-23 August 2020 engaged 222

people from different stakeholders across all the six districts on inputs on white paper for social economy. The project

is funded by the Flanders government and is implemented by the Economic Development Department (EDD) and the

Industrial Development Corporation (IDC) with the International Labour Organisation (ILO) as the technical advisor. The

background and context for the policy on social economy emanates from government recognition of the potential the

sector can contributes to new opportunities if it were properly supported. The New Growth Path-acknowledges this fact

“The Social Economy includes some myriad not-for-profit institutions that provide goods and services, including co—

operatives, non -governmental organisations (NGOs) and stokvels. If the sector grew in South Africa closer to

international norms, we can anticipate 260 000 new opportunities” (page 33). Therefore, the sector has multiple

legislations and definitions as well as inadequate coordination and alignment between the multiple interventions. The

key policy focus areas identified in the white paper includes the following (Legal & regulatory environment, Finance

mechanism, access to markets and social innovation). The EDD convened the national strategy framing workshop on

13-14 November 2020 with all provincial representatives, Development Finance Institutions (DFIs), relevant sector

departments to finalize inputs for drafting a policy paper on social economy in South Africa.

The following strategies were developed during the 2019/2020 financial period as part of the normal review, creating

enabling environment for the institutional support and growth of SMME sector and informal economy: (1. Provincial Co-

operative Development Strategy 2019-2024, 2. Provincial Business Incubation Strategy 2019-2024 and 3. Informal

business strategy 2019-2024).

Governance

The department assessed all its public entities’ boards during the financial year to advise the shareholder on compliance

with some commonly accepted key principles of the King IV Report or elements of good governance. These include

efficiency, integrity, stewardship, and leadership. The report was focused on the public entities’ boards and committee

members of the Eastern Cape Development Corporation, Coega Development Corporation, East London Industrial

Development Corporation, Eastern Cape Parks and Tourism Agency, Eastern Cape Gambling Board, Eastern cape Liquor

Board.

45

Through the Public Entity Oversight, the department was engaged in the following activities to streamline governance

during the 2019/20 financial year:

• Review of the ECDC Act;

• Filling of vacant positions, amongst others, the ECDC, ECGB, ECPTA, and the ECLB;

• Amendment to the ECGBB name to ECGB;

• Implementation of the Information and Communication Technology (ICT) governance framework and

participated in the ICT Committee and the Change Control Committee;

• Facilitated the process of listing of the Coega Development Corporation (CDC) in terms of the PFMA and

National Treasury Regulations;

• Facilitation of the MEC/Chairpersons of the Board meetings

• Presentations and response to the Portfolio Committee questions; and

• Submission of the oversight reports to the Audit Committee and the Risk Committee for comment and

conducting oversight meetings.

The department facilitated a review of the Eastern Cape business strategy through Government Technical Advisory

Agency (GTAC) and recommendation were provided to the Provincial Treasury and the MEC for implementation. A

framework on comments was also provided for standardisation of remuneration for boards and executives.

IGR / Resource Mobilisation The department maintained firm inter-governmental relations through several provincial and local government

structures as well as participation in national structures for implementation of the Intergovernmental Relations

Framework.

An Inter-Ministerial Task Team was established by the MEC Safety & Liaison and MEC DEDEAT. One of the objectives

was to respond to Civil Society complaint on illegal occupation of state property in Mthatha. Key to these was the illegal

occupation of ECDC properties in Mthatha by criminal elements. The Ad-hoc Multi-Disciplinary Task Team committee

is composed of a number of key institutions of Government South African Police Services (SAPS); National Prosecution

Authority (NPA); KSD Local Municipality (LM); OR Tambo DM; ECDC; DEDEAT and Safety & Liaison as the Chair of the

committee.

Other structures that the department participated in include: MINMEC Technical MUNIMEC, Premiers Outreach

Programmes, Portfolio Committee Oversight Visits, DEDEAT District Forums, DIMAFO, and Economic Infrastructure

Cluster/Economic Growth Meeting and Industrial Development Planning (IDP) and Budget Reporting Forum held in

District Municipalities.

Highlights from the meetings attended in municipalities include the following:

Amathole/ Buffalo City - DEDEAT made a presentation to DIMAFO on plans to mitigate climate change and ocean

economy. OR Tambo - District Development Model meetings were attended and inputs on the pillars of Economic

development. Joe Gqabi - DEDEAT assisted the municipality with the technical support in the formation of LED strategy.

Alfred Nzo - Wild Coast Special Economic Zone stakeholder engagement Workshop and status quo of the projects was

presented, follow up meeting where political, administrative and traditional committees were established. Sarah

Baartman/ Nelson Mandela - pursued the R500 000 Small Town revitalization grant for Sunday’s River Municipality.

Office of the Consumer Protector

The Office of the Consumer Protector after analysis of trends, consultation and discussions as a member of the

Consumer Protection Forum, identified 6 Education Programmes for the 2019/2020 Financial Year as follows:

Quarter Months Name of Education Programme

Q1 – Q4 April to March (1) Right to fair value, good quality and safety

Q1 April to June (2) The Office of the Consumer Protector

Q2 July to September (3) Financial Literacy & (4) Consumer Rights

Q3 October – December (5) Spend Wisely Campaign

Q4: January to March (6) The Eastern Cape Consumer Protection Act

During Quarter 1, Education Programme 2 known as ‘The Role of the Office of the Consumer Protector’ was conducted.

Consumers were made aware of services offered by the Office as well as those of National Regulators and Ombuds,

some of who have no Provincial footprint.

46

Nineteen (19) workshops were held in the Eastern Cape during the First Quarter and 1061 participants were reached.

Furthermore, following the country-wide media reports which showed the widespread sale of counterfeit and expired

consumer goods, the Office of the Consumer Protector decided to embark on a vigorous campaign for Education

Programme 1 known as ‘The Right to Fair Value, Good Quality and Safety’ and to run the programme for the entire

financial year. Twenty-three (23) workshops were conducted throughout the Province for Education Programme 2 and

1587 participants were reached. The categorization of participants indicates 54% were women, 9% children, 22%

youth,15% elderly and 4% people with disabilities.

During Quarter 2, Education Programme 3 Workshops which were conducted in July, aimed at educating participants

on good financial skills, the importance of budgeting as well as creating awareness of Consumer Rights as contained in

the Consumer Protection Act.

Education Programmes 4 Workshops were conducted in August and September aimed at creating awareness of

Consumer Rights as contained in the Consumer Protection Act as well as informing consumers of responsibilities when

transacting with businesses and creating awareness of the services offered by the Office of the Consumer Protector.

Businesses were also educated on acceptable standards in terms of The Consumer Protection Act. The Public Service

Month campaign in Chris Hani District Municipality during September 2019 also created a platform to create awareness

and to take the services of the Office of the Consumer Protector.

Fifteen (15) Education workshops on ‘Financial Literacy’ were conducted throughout the Province, exposing 1 138

attendees to Financial Literacy. Workshops on ‘Consumer Rights’ were conducted throughout the Province and 2 447

participants were reached. Categorization of Participants reached, 65% were women, 6% children, 42% youth,10%

elderly and 3% people with disabilities. During Quarter 3 Education Programme 5 known as ‘The Spend Wisely

Campaign’ was conducted. While the Office of the Consumer Protection acknowledges the spirit of giving that

characterizes the Christmas season, we believe that responsible spending without incurring debt is a far healthier option

for any household. South Africans often hit the festive season as if it is the end of time, choosing to ignore the looming

financial responsibilities, such as school fees and other bills that come only too quickly in the New Year.

Twenty-Five (25) ‘Spend Wisely’ activities, were conducted throughout the Province whilst 3346 participants were

reached.

The categorisation of participants indicates that 58% women, 6% children, 39% youth,10% elderly and 4% people with

disabilities were reached. ‘The Right to Fair Value, Good Quality and Safety’ programme was conducted throughout the

Province and across the Financial Year. Nineteen (19) Education Workshops on ‘Eastern Cape Consumer Protection Act’

were conducted throughout the Province and 1 938 participants were reached. Due to the fact that the majority of

National Regulators and Ombuds offices are situated in the Gauteng Province, a concerted effort is made by the Office

of the Consumer Protector to invite stakeholders to participate in workshops conducted in the Eastern Cape. The Office

furthermore collaborates with stakeholders to ensure a wider and more effective reach of participants in the Province.

During the year, the Office of the Consumer Protector collaborated with the following stakeholders: Independent

Communications Association of South Africa (ICASA); South African Revenue Services (SARS); National Youth

Development Agency (NYDA); Government Communication Information System (GCIS); The Masters Office (Department

Of Justice); Financial Sector Conduct Authority (FSCA); National Credit Regulator (NCR); South African Social Security

Agency (SASSA); Small Enterprise Development Agency (SEDA); Productivity SA; Department of Social Development;

Department of Cooperative Governance and Traditional Affairs (Cogta); Youth Council of the Eastern Cape; Office of the

Premier.

World Consumer Rights Celebration – Province of the Eastern Cape March 15th is World Consumer Rights Day (WCRD)

the day on which consumer rights are celebrated and consumer champions get to advocate key consumer issues with

vigour and fundamental consumer rights are highlighted to raise awareness and to encourage the market to comply

with consumer protection prescripts. The Consumer Protection Forum (CPF) a voluntary association of government

consumer protection bodies in South Africa, resolved during its strategic meeting in 2017 to undertake joint national

campaigns involving all its members to ensure a common voice and standardization of messages targeted at South

African consumers. The aim is to coordinate messaging and in an effort to minimise public confusion given the various

consumer bodies in SA and the various messages that consumers are exposed to during periods such as WCRD. The

consumer rights day campaign presents an opportunity for consumer bodies to speak in one voice and to display and

celebrate successes in the area of consumer protection.

The CPF endorsed the proposal to host the WCRD 2020 celebrations in the Eastern Cape as the Province has made huge

strides with the signing into law of the Eastern Cape Consumer Protection Act, 2018 (Act No.03 of 2018) that is aligned

47

to the national legislation, the Consumer Protection Act, 2008. This move represents remarkable progress for consumer

protection and gives effect to the envisaged concurrent jurisdiction contained in the Constitution of South Africa, 1996.

Provincial Consumer Affairs offices, regulators such as the National Regulator for Compulsory Specifications,

Independent Communications Authority of South Africa, National Credit Regulator, Council for Medical Aid Schemes,

Financial Sector Conduct Authority , Accredited Alternative Dispute Resolution Agents (Consumer Goods and Services

Ombudsman Office, Motor Industry Ombudsman of South Africa), and the National Consumer Commission and

Department of Tourism participated in the campaign.

Theme: “Fighting Consumer Exploitation” Primary Message: Know your Rights and Responsibilities

Sessions were interactive and participants showed a keen interest in all presentations thereby showing how important

consumer education is and how it applies to everyone in their daily lives. The campaign also reiterated that lodging

complaints and requesting guidance from the Office should be any consumers first point of call as the link between

consumers in the Eastern Cape and regulators situated in Gauteng.

Alfred Nzo region of the Office of the Consumer Protector was and is still facing a challenge of ex mine workers and

their beneficiaries that are exploited by people who claim to assist them in claiming their pensions from their former

place of employment. They are pursued and deceived to pay large amounts of money to the people who claim to be

assisting them to get their money.

In August 2018 the Region invited the Financial Sector Conduct Authority to capacitate vulnerable consumers, after the

trend was identified especially at Mt Ayliff, Mt Frere and Matatiele. Thereafter, the Region has been receiving an influx

of enquiries and numerous complaints on unclaimed benefits. The office conducted consumer workshops where claim

forms were issued. These workshops were conducted at Brooksnek, Dutyini, Phepheni and Engcweleni in Mt Ayliff,

Mangolong A/A in Matatielle, Betshwane in Mt Ayliff and others with more than 1000 unclaimed benefit forms were

completed and sent to FSCA. There was an exhibition and one on one with consumers that desperately needed

consumer protection services. In conclusion, areas of collaboration with FSCA has yielded good results in improved

communication relations, working relations and increased levels of understanding and knowledge within consumer

officials and improved visibility of the office. Innovative and initiative skills have been developed in terms of utilising

readily available resources for betterment of service delivery, by mobilizing our communities in the most cost

economical and efficient ways.

Seven complaints were open at the end of the 2018/2019 Financial Year. During the 2019/2020 financial year, 1150

complaints were received and registered on the Electronic Case Management System. A total of 1071 complaints were

resolved leaving 86 complaints open at the end of the financial year. Statistics indicate that 92% of complaints that were

received were resolved or referred to regulatory bodies with jurisdiction. Improved relationships with regulatory bodies

ensure that complaints are referred within 7 days of receipt should the complaint not fall within the jurisdiction or

mandate of the Provincial Office of the Consumer Protector.

Economic Planning and Research Economic Planning has the key responsibility for facilitating economic policy, planning and research activities within the

department. The overall performance of the Sub-Programme: Economic Planning during the 2019/20 financial year has

been satisfactory. One of the subprogramme highlights in the reporting period was Eastern Cape Socio-Economic

Review and Outlook (SERO) publication. Overall, SERO provides an objective overview and analysis of past and

forecasted economic growth, key labour market dynamics, and socio-economic development of the province. This

annual publication focused on the province’s emerging cannabis sector for this year’s special chapter.

The subprogramme also recently adopted concept of policy dialogues aimed at providing a platform for discourse on

policy and development issues affecting the province. in the reporting period, two efficacious policy dialogues were

hosted. One in the youth month, which brought together youthful stakeholders involved in one way or the other with

youthful functions on the policy making, youth programmes implementation, monitoring and evaluation, youth

empowerment and youth entrepreneur support roles. What was a key discussion area being the need for a responsive

provincial youth development strategy, that was more in touch with the realities and challenges facing provincial youth.

The policy dialogue provided inputs that would be valuable to the Office of the Premier for the strategy review process.

The second policy dialogue was hosted in December focusing on township and rural economy theme. This was in line

with acknowledging that the Eastern Cape is largely a rural province and thus in need of a township and rural economies

strategy. The main purpose of the policy dialogue was to solicit inputs for framing a strategy for the Eastern Cape

Province for village and township economy from stakeholders including Experts on village/township economy, Higher

learning institutions (in particular Nelson Mandela Bay), South African Local Government Association (SALGA-EC),

48

Cooperative Government and Traditional Affairs (COGTA-EC), Office of the Premier (OTP), EC Provincial Treasury,

Business Chambers/ associations/ formations, Development agencies and other Research institutions/agencies.

Lastly, the subprogramme hosted a well-attended Emerging Researchers’ Conference, annual seminar hosted by the

four Higher Education Institutions of the Eastern Cape Province (Nelson Mandela University, Rhodes University,

University of Fort Hare and Walter Sisulu University). This is a platform which recognises untapped potential of research

work generated each year by emerging scholars and post-graduate students relevant to much needed economic

development in the province; and therefore provides an opportunity for postgraduate and emerging researchers to

present and profile their research on the economic development issues facing the province. A total of eleven papers

related to economic development issues were presented at this Conference held on 30 September 2019.

Tourism Development The overall performance of the Sub-Programme: Tourism during the 2019/20 financial year has been satisfactory. This

is largely attributed to improved coordination between the three spheres of government and effective collaboration

with the Department of Tourism and the private sector.

1. The following skills development projects were implemented in close collaboration with the Department of

Tourism:

• The graduation of 58 youth from the EC under the National Youth Chefs Training Programme.

• The training of 71 youth as Data Capturers from all the EC municipalities to participate in the National Tourism

Information Management System data collection project.

• The Tourism Green Coast Programme implemented in 25 beaches on the Wild Coast with 111 youth

participating.

• The hosting of the Educators’ Seminar attended by 60 tourism and hospitality educators in close collaboration

with the Department of Tourism and the Department of Education.

2. The following tourism infrastructure projects are being implemented as part of the Oceans Economy - Operation

Phakisa: Coastal and Marine Tourism Work Stream in collaboration with the sector departments:

• East London Beachfront Development: Construction commenced on 02/03/2020.

• East London Water World Upgrade and Expansion: Construction commenced on 02/03/2020.

• Wild Coast Corridor Tourism Master Plan (non-infrastructure): This has been completed.

• The N2 Gateway (The Big Tree at Tsitsikamma): A tourism information centre with restaurant / coffee shop, curio

shop, etc has been completed.

• Development of beach precincts and Wild Coast Hiking Trail: R21 Million has been committed by the

Department of Tourism for the Development of beach precincts at Mthentu and Mzamba: Technical studies

have been conducted and approved by the municipality. Development of selected beach precincts at Ndlambe

Municipality: Designs with cost estimations have been completed. The DEDEAT is considering the Environmental

Impact Assessment. Wild Coast Hiking Trail: Project plans and costs estimates have been completed and

submitted to the Department of Tourism for final approval of 5 sites.

• Indi-Atlantic Route: R2 million has been committed by the Department of Tourism for the development of the

Hole in the Wall and Coffee Bay Beaches as part of implementing the Indi-Atlantic Tourism Route.

• Renovations and Upgrades of Tourism Infrastructure in Protected Areas: The DEDEAT has approved R43 000

000 over a three-year period and R9 600 000 for 2019/20 for renovations to nature reserves from the Provincial

Economic Stimulus Fund.

3. The hosting of the Religious Heritage Dialogue in Keiskammahoek as part of the programme of the Religious

Heritage Expo championed by the South African Council of Churches and the Department of Education serves to

enhance the initiative towards the development and promotion of heritage tourism.

4. The support for the empowerment of Women in Tourism Eastern Cape’s business conference initiative as part of

tourism enterprise development and transformation was done in collaboration with the private sector.

5. The Capacity Building workshop was held in Jeffreys Bay in October 2019 as part of the Enablers of Growth: Public

Awareness Campaigns was attended by 60 delegates mainly SMMEs and co-operatives in the tourism and

hospitality sector.

49

Strategy to overcome areas of under performance The reasons for under performance of the Local and Regional Economic Development (LRED) Fund relate to the

appointment of a due diligence service provider, non-submission of key documents by applicants, limited sectors and

non-compliance to industry standards.

The challenge relating to the procurement of a suitable service provider has been due to the fact that the department

has been advertsing this service only for one year. This has caused delays as it has proven to be difficult to appoint a

service provider best suited for this task. The department is now going to advertise for a multi-year period (three years)

for a pool of service providers which will enable the department to source any one of the consultants at any given point

during the period of the contract. It is envisaged that this will improve turnaround times of finalising funding of local

and regional economic development projects. The department is also in a process of conducting some of the vetting

which was usually conducted at the end of the process but get it done upfront so that there are no delays, vetting such

as credit criminal checks will be conducted upfront to speed up the application process.

Non submission of key documents – Another factor which caused delays and resulted into under performance of LRED

fund is due to non-submission of mandatory documents by LRED applicants. These mandatory documents include valid

tax clearance certificates, quotation, proof of security of tenure and other. To further explain the documents to the

SMMEs, and the reason they are required, the department conducted workshops in the most rural areas of the province.

From the workshops conducted, some of the feedback received was that the department’s application form was

complicated, and this was seen as disadvantaging some applicants. The department has since reviewed its application

form and simplified it so that it is easily understood by the targeted audience.

Some of the LRED applicants apply not meeting industry standards, the LRED Policy was reviewed to ensure that the

fund also assists in funding for industry standards with the relevant industry bodies.

The feedback from the workshops held also revealed that there was dissatisfaction from the SMMEs about the

limitations of the sectors funded under LRED. The department has then reviewed the LRED Policy such that it includes

other sectors such as services, franchises and logistics.

The reasons stated above led the department coming up with a screening mechanism, which will screen applicants

before they apply for LRED Fund. This will help to ensure that all the compliance documents are submitted. It is

envisaged that this process will make the funding process more efficient as any applicant who is not successfully

screened will then get assistance from the region on how to get those required documents submitted. The bottlenecks

which were previously encountered will be limited.

In order for the department to also respond with speed, especially in light of the pandemic, the department is in the

process of ensuring that the screening and application process is undertaken virtually. This will limit human contact; it

will ensure that the documents required are submitted and applicants will know sooner about the status of their LRED

applications.

The issues of under-performance in tourism relate mainly to external factors in the micro and macro environments. The

key factors in the micro-environment include accessibility (poor or lack thereof) in terms of enabling infrastructure such

as poor roads particularly to rural areas that are a deterrent to the growth of domestic tourism; customers (domestic or

international tourists) demanding better product offerings and so on. At the macro-environment level, it is mainly the

economic factors such as economic recession, crime and grime, outbreak of COVID-19 that inhibit international tourist

arrivals.

Going forward, the following actions will be pursed to mitigate against these factors:

• Implementation of the Tourism Strategy 2020_21-2024_25 which emphasises “Value Chain Diversification”,

“Brand Positioning”, Tourism Experience Support”, “Visitor Experience” and “Business Events”. The Provincial

Economic Stimulus Fund coupled with other financial resources mobilised from other sector departments will

be used to development more tourism infrastructure in support of tourism growth and development targeting

rural and cultural heritage tourism. This will be supplemented by the post-COVID-19 Tourism Recovery Plan;

• In addition, there is a strategic intent to develop an “Airlift Strategy” to stimulate tourism growth through

frequent and wider options of air transportation; and

• Monitoring of the revised Risk Register.

Changes to planned targets There were no changes made to the annual performance plan.

50

Linking performance with budgets The performance indicators of the programme provide firstly an indication of overall organisational performance and,

secondly, measures of performance in the delivery of economic development programme functions. Therefore, there

may not be a direct link between the performance of the programme and the budget. The link is more indirect and

reflected through compensation of employees, goods and services etc.

Sub-programme expenditure

2019/20 2018/19

Sub programme

Final

Appropriati

on

Actual

Expenditur

e

(Over)/

Under

Expenditur

e

Final

Appropriati

on

Actual

Expenditur

e

(Over)/Und

er

Expenditur

e R'000 R'000 R'000 R’000 R'000 R'000

1

INTEGRATED ECONOMIC

DEVELOPMENT SERVICES

69,397 49,944 19,453 230,859 229,216 1,644

2

TRADE AND SECTOR

DEVELOPMENT

588,451 572,983 15,468 222,153 217,738 4,415

3

BUSINESS REGULATION &

GOVERNANCE

142,947 140,697 2,250 139,156 138,667 489

4 ECONOMIC PLANNING 6,517 4,998 1,519 2,666 2,498 167

5 TOURISM 11,044 10,158 886 11,778 10,489 1,289

TOTAL 818,356 778,780 39,576 606,612 598,608 8,005

Transfers and subsidies The Isiqalo Youth Fund was projected to be disbursed in the fourth quarter of the financial year. During the preparation

for disbursement process, it was discovered that some of the suppliers were not registered on the CSD. The delay in the

appointment of a credible service provider to conduct due diligence for evaluation of enterprises that showed potential

to be funded by the department led to the delay in the LRED transfers, hence significant underspending on this fund.

3.3 Programme 3: Environmental Affairs

Environmental Affairs administers environmental policies that are cascaded down from national level in line with the

mandate of the Department. Importantly, it regulates environmental management through instruments such as the

environmental impact assessments, compliance and enforcement and biodiversity management tools.

The programme is structured as follows:

Sub-programme Sub-programme purpose

3.1: Policy Co-ordination and

Environmental Planning

To establish legislation, policies, programmes, procedures and systems that

will effectively empower and support the core functional programmes.

3.2: Compliance and Enforcement To ensure that environmental legislation is effectively used to protect the

environment and its resources from unlawful and unsustainable exploitation

and negative impact.

3.3: Environmental Quality

Management

To strive towards a safe and healthy environment through effective

environmental impact assessment, air quality management, waste and

pollution management for the people of the Eastern Cape.

3.4: Biodiversity Management To conserve the diversity of landscapes, ecosystems, habitats, biological

communities, populations, spices & genes and promote conservation and

sustainable use of natural resources in the Eastern Cape.

3.5: Environmental Empowerment

Services

To empower and capacitate the external stakeholders of the Department to

meaningfully participate in and contribute to effective environmental

management.

51

Str

ate

gic

Ob

ject

ives

•

S3.1

: C

arb

on

footp

rin

t re

du

ced a

nd in

vest

men

ts in

su

stain

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pro

ject

s in

crease

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th

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•

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: To e

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, im

ple

men

t and m

ain

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eff

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18 T

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l Hun

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Pro

clam

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as fi

nalis

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the

ME

C a

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r.

19 O

pera

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is in

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of r

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in th

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. 20

SIT

A fi

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as th

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as n

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the

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21

Ope

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the

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for

impl

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ting

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ate

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espo

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tions

.

52

No

. P

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51

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26

Su

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22 T

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and

can

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t pla

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23

Thi

s is

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here

mor

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as d

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spec

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as

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25 T

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whe

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perv

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OR

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Reg

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. 26

Tw

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, the

two

who

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ould

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54

Environmental Affairs Key Achievements The Environmental Affairs programme has been instrumental in areas of environmental compliance and enforcement,

environmental quality management, biodiversity management and empowerment services. The following key

achievements should be noted:

Policy Co-ordination and Environmental Planning The Department delivered a keynote address at the launch of Packa-Ching Mobile Buyback Centre at Yakhe Community

Centre, Buffalo Flats in Duncan Village that seeks to promote community recycling initiative. Participated at a Wild Coast

Electrification Programme meeting with DEDEAT-ESKOM and Mbhashe Local Municipality that resolved the permitting

process that needs to be followed when the programme is being rolled out in those communal areas. Provincial

Integrated Development Plan (IDP) review analysis session was held at Mpekweni Beach Resort from 29th July to 02nd

August 2019. All municipal IDPs were presented, analysed by the various teams except Great Kei LM and Enoch Mgijima

LM. Draft Eastern Cape Environmental Management Bill public consultation was held across the Province led by the

Department and the closing date for public consultation was extended by 60 days by the MEC because of stakeholder

request. The Programme attended environment sector various working groups meetings and implementation sessions

as these results into reports presented at MINTECH and MINMEC meetings to streamline applicable legislative

framework application across provinces and national.

Compliance and enforcement The Environmental Affairs Directorate: Compliance and Enforcement has continued to enforce the Department’s

environmental mandate making use of collaborative strategies to achieve its mandate. Since the conviction of the

Ndlovu’s during the last reporting period the Eastern Cape has lost two rhinos to poaching. This is a considerable

improvement from the 19 poached in the Province of the Eastern Cape during the previous reporting period. Cycad

poaching continues but unfortunately no arrests were made during the reporting period.

Successes of the Directorate is largely as direct result of co-operative governance and intergovernmental strategies

which flow from the Eastern Cape Environmental Crime Working Group (SAPS, NPA, South African National Parks

(SANParks), and ECPTA) and Phakisa joint operations. The Directorate participated in 9 Operation Phakisa enforcement

operations along the Eastern Cape Coastline. It was during a special operation that an MEC administrative notice was

effected and an unlawful structure on the Wild Coast demolished. It is envisaged that more demolitions consequent to

MEC administrative action will follow in the next reporting period. Additional resources provided through joint

operations facilitates Department enforcement effort.

The continued development of formalised private public relationships through the growth and support of Programme

3's Honorary Nature Conservation Officers (HNCO’s) has resulted in enforcement successes and reduced poaching as

visibility increases and DEDEAT’s enforcement human resources are supported. During the last reporting period the

HNCO’s have contributed a considerable amount of resources to environmental enforcement including; 28 581 hours

worked, 273 990 km travelled, 153 helicopter hours, 38 fixed wing hours and 178 drone flying hours to effect their duties

and participated in 40 joint operations with DEDEAT. Their efforts certainly contributed to curtailed poaching incidents

for the reporting period. The Honorary Nature Conservation Officers have consistently assisted the Departmental

officials with voluntary patrols and visible enforcement efforts in the Amathole, Chris Hani and Sarah Baartman Regions.

The unauthorised clearing of sub-tropical thicket for agricultural practice has continued from the previous reporting

period and is becoming increasingly problematic and resulted in outcries from several quarters. Clearing of indigenous

vegetation is exacerbated as farms try to justify their productivity. The Directorate: Compliance and Enforcement’s

collaborative response to combat the clearing of this vegetation type with educational institutions and botanical

specialists is ongoing and professional assistance is provided in the form of evidence to support administrative action

and criminal prosecutions. The availability of resources to the DEDEAT will ultimately determine the Directorates success

in this area. Thicket clearing still threatens the biodiversity of the Eastern Cape Province and encourages the advancing

threat of climate change.

Environmental quality management

Environmental Impact Management (EIM)

The Sub-programme issued 38 Environmental Authorizations within legislated time-frames in quarter 1, i.e. 100% as

per the national target. The results are regarded as acceptable and currently do not have implications that need to be

considered and addressed. In total 46 applications were finalised by the Unit and 8 were either closed due to withdrawals

by the applicant or lapsed due to timeframes not being met by the applicants.

55

During quarter 2, 32 Environmental Authorizations were issued within legislated time-frames, i.e. 95%. It is regrettable

that in 2 instances the legislated time-frames were missed in that quarter. In total 44 applications were finalised by the

Unit, 34 by means of Environmental Authorizations and 10 were either closed due to withdrawals by the applicant or

lapsed due to timeframes not being met by the applicants.

During quarter 3, 31 Environmental Authorizations were issued within legislated timeframes, i.e. 92.7%. It is regrettable

that in 3 instances the legislated timeframes were missed in this quarter. There were personnel challenges in the Amatole

Regional office. The EIM Directorate has been operating at a level below the minimum number of officials required, and

if posts become vacant, these are not filled timeously or when key officials become ill it becomes difficult to be fully

effective and efficient. The fact that only 2 applications missed timeframes in that region stands to the credit of only 2

officials who were active as opposed to the expected number of officials, six. It must also be noted with concern that

the third application which missed timeframe was from OR Tambo region which has also got personnel challenges in

terms of no Regional Manager and an Assistant Manager who was also on sick leave during the quarter.

Air Quality & Climate Change

Air Quality

During the reporting year one license was issued within legislated timeframe as the Metros and some District

Municipalities are also competent authorities in terms of the National Environmental Management Air Quality Act (NEM:

AQA). The department has received 5 applications of which one was a renew and the rest are section 22A applications.

A sec22A application is where an operator is running a registered application without an Atmospheric Emission License.

Most of the applications were in the forestry industry and involve either pole manufacturing or charcoal manufacturing.

One incident was recorded where a National Ambient Standard was exceeded. This was on the 19 July 2019 the hourly

NO2 standard of 106 ppb was exceeded when a reading of 107ppb was measured for exceedances of emissions at

07H00 in the morning. The exceedance has been attributed to traffic based on wind direction, speed and prevailing

activities in the area.

This was the only exceedance of the National Standards. Air Monitoring stations continue to experience station

availability challenges due to load shedding as a result of ESKOM.

All District and Metro’s have air quality management plans in place to assist in the management of air quality. Mbhashe

LM has now started with the development of their municipal Air Quality Management Plan. While Mbizana LM has

indicated that they intend to develop an Air Quality Management Plan. Walter Sisulu LM has indicated that they intend

to adopt their District Air Quality Management Plan and enter into a Memorandum of Understanding to clarify who

implements what in terms of the Air Quality Management Plan.

An Environmental awareness activity with a theme “Impacts of poor Air quality” was conducted at Morgan Bay under

Great Kei Local Municipality on the 10th September 2019. The purpose of the event was to sensitise residents of the

harmful diseases, damaged environment that they are subject to, if exposed to poor air quality.

Climate Change

A Climate Change Job Sector Response workshop was attended in Pretoria. The Jobs Sector Response Plan is to develop

resilience to the expected impacts of climate change on impacted sectors so as to build economic resilience to the

expected impacts. The sectors dealt with in this plan include Tourism, Agriculture, Mining, Metal processing and the

Transport Sector. The work done indicates that a number of sectors are vulnerable to the impacts of climate change as

either a direct result on their business model or indirectly because of their Carbon Emissions. This matter has added

implications for the Eastern Cape as a lot of the jobs lost have employed people who have their roots in the Eastern

Cape and will in all probability return home as a result of these job losses, thus creating possible social issues and

hardships for the affected families. The Sector plan has made numerous recommendations on how to build resilience

into these sectors.

In the Chris Hani District Municipality, Wildlife and Environmental Society of Africa has commenced with a R10 000 000

Climate Change project with the District Municipality and local schools which will see biological waste digested and the

resulting Methane gas used for cooking in the school feeding scheme. Schools have been identified in the Enoch

Mgijima, Sakhisizwe, Intsika Yethu and Emalahleni Local Municipalities. This project has been negatively affected by the

COVID-19 state of disaster as well as the prevalent drought.

The Department has participated in a climate change project to develop electronic environmental education material

and course material for new personnel joining the public service. This material will be presented as part of the Induction

56

process. A workshop was held on the 4&5 June 2019 to develop the electronic material needed to help municipalities

manage water demand and resource management. With regards to the learning material for personnel undergoing

induction this material has now been finalised.

On the 1st June 2019, the new carbon tax came into effect. The tax rate is R120 per ton of CO2 equiv.. The Act allows

companies an automatic 60% rebate and further possible allowances up to a maximum of 90% of the total emissions.

These rebates include a fugitive emission allowance, a trade exposure allowance, a performance allowance, a carbon

budget allowance and an offset allowance.

The National Department of Environment, Forestry and Fisheries (DEFF) conducted training on National Climate Change

Information System (NCCIS) and this was conducted in collaboration with DEDEAT, South African Weather Services

(SAWS), Council for Scientific and Industrial Research (CSIR) and other stakeholders. The purpose of the training was to

introduce NCCIS and train officials on how to utilize the system. The system is a coherent system of data collection that

is meant to centralise information in one place for accurate monitoring and reporting of climate change mitigation

within the national, provincial and municipal structures. The Green Book, an online planning support was presented to

the training participants and an overview of the EC province Climate Change Interventions was presented.

Ntabankulu and Mbizana Local Municipality have indicated that they wish to develop Climate Change Response

Strategies. Joe Gqabi DM approached the department on the issues of their Climate Change Response Strategy. It was

apparent at the meeting that the Senior Management of the municipality were not aware that a strategy had been

developed with them in 2017 and that they were required to adopt the plan and then fund the implementation thereof.

This matter has since been resolved and the District Municipality has appointed a champion to drive the adoption

process through council. At this stage the plan has not been adopted.

In Umzimvubu LM a capacity building session was held based on the topic Climate Change and Its Impacts on

Biodiversity was conducted at Ngojini Village: Umzimvubu Local Municipality. Ngojini Village is one of the furthest and

most rural villages within the Umzimvubu Local Municipality with very few households in the area, maintaining much

of its natural vegetation. It is also an area that is prone to waterborne diseases since the village uses water directly from

the rivers. The purpose of the session was to educate community members on climate change and its impacts on

biodiversity and the environment at large as well as on the sustainable use of the natural resources found in the area

including biodiversity and water bodies.

In Joe Gqabi a joint capacity building effort between the Units Environmental Empowerment Services (EES) and

Environmental Quality Management (EQM) was conducted. The region then conducted four (4) sessions of Climate

Change awareness in St Peters and St Pauls Anglican Church. This target audience was chosen because most awareness

activities involve in most government departments, organs of state and communities As a result it was decided to focus

on NGOs and Non Profit Organisations (NPOs), hence the first the first NPO that was identified was the Anglican Church,

because the Church already has a program that is intended to build environmental awareness (Green Anglican).

Subsequently four (4) climate change awareness were conducted two in Sterkspruit and two in Aliwal North. The session

started with the legislative mandate, giving definition of climate change, causes of climate change and adaptation and

mitigation strategies. The effects of climate change on economy and general impacts thereof. Response strategies were

some of the areas that were presented. The intention is to have program that we will conduct the climate change in all

churches in the region. The congregations appreciated the presentations and requested that during the month of

October the congregation is going to host a conference and have invited the department to come and present again,

but the conference will include some towns in Alfred Nzo, O.R Tambo, Chris Hani and Sarah Baartman regions.

The Department is involved in addressing the region Drought which has been declared a disaster in the Province. The

drought has been particularly serious in the Western and central portions affecting numerous communities and farmers.

In Chris Hani water shedding was practised and this had a direct impact on certain businesses particularly in the food

preparation of the economy. Farmers are particularly badly affected and suffered extensive animal deaths. Due to the

failed spring rains planting by farmers were focussed on pastures to ensure adequate feed for animals. The drought has

not been broken and is particularly bad in Sarah Baartman and Port Elizabeth.

Waste Management The department developed an Eastern Cape Integrated Waste Management Plan and Eastern Cape Recycling Strategy

and will be gazetted in the next financial year. The Provincial Waste Management Officer hold training sessions and

meetings with internal staff, municipal officials and relevant stakeholders to update them on the applicability of Norms

and Standards. The Waste Management Directorate attended and presented at the National Waste Khoro 2019 held in

Kimberley with a Theme: “Good Green Deeds Towards a Recycling Economy and Sustainable land Remediation”.

57

Waste Management Licenses issued for 2019/2020 financial year were four (4) in total:

• Rossouw and Herschel landfill sites both in Senqu, Joe Gqabi District

• Vaduba Garden Refuse Composting Facility – BCMM, Amathole District

• Plastic Recycling Facility in Mnquma, Amathole District.

Two of the licenses have been granted within legislated timeframe and the other 2 (Rossouw and Herschel landfill sites

both in Senqu, Joe Gqabi District) outside the timeframes. These will improve recycling initiatives and operation of the

waste disposal facilities within the Province.

The Province also conducted the annual Greenest Municipality Competition (GMC), the campaign of motivating

cleanliness and pride in our towns that was launched as the Cleanest Town Competition focussing on promoting

responsible waste management practices at local level. the winning municipalities were as follows:

• 1st Position – Umzimvubu LM,

• 2nd position – Kouga LM and

• 3rd Position – Senqu LM.

Umzimvubu LM will represent the Province at 2020 National GMC.

Biodiversity and Coastal Management

Biodiversity Management

The Department continues to contribute in conservation of species that are used commercially in Bioprospecting to

ensure sustainable utilisation through development of Biodiversity Management Plans (BMP) and implementation

thereof.

The National Minister has requested DEDEAT to coordinate the development and submission of the Biodiversity

Management Plan for Aloe ferox. This is one of the key deliverables from the 2016 Biodiversity Economy Lab. DEDEAT

will also coordinate the implementation of this BMP. Stakeholder workshops have been held with relevant structures

including Traditional Leaders, Bioprospecting Industry, Tappers and harvesters, South African Biodiversity Institute

(SANBI), DEFF, Department of Science and Innovation (DSI) and DEDEAT. A draft document has been developed and

will be published for comment in the next Financial Year.

The Department continues to co-chair with the Western Cape counterpart on the Honey bush Tea Community of

Practise (COP). The COP has developed harvesting guidelines to ensure sustainable harvesting of this valuable resource.

DEDEAT also contributed in the development of the Biodiversity Management Plan of Honey bush Tea.

The development of E-permit system phase 2 has been finalised by the State Information Technology Agency (SITA)

and ready for deployment. The system includes the issuing of permits that must comply with the legislated time frame

(Threatened Or Protected Species Regulations (ToPS)) as well as permits issued in terms of Provincial Legislation. The

system will enhance efficiency by reducing turnaround times, increase accuracy of data and contribute to conservation

of our trees due to less paper usage.

The development of the Eastern Cape Biodiversity Strategy and Action Plan (ECBCSAP) has been finalised and will be

gazetted for implementation. The ECBCSAP will be a major avenue for addressing pressures on biodiversity, land use

planning and sustainable development in the Province.

The Sarah Baartman District Coastal Management Programme (CMP) was published in the gazette by the MEC for public

comments and was thereafter adopted by the Municipal Council for implementation. The CMP will be implemented in

the four coastal Local Municipalities (Koukamma, Kouga, Sundays River Valley and Ndlambe) falling within the Sarah

Baartman District.

An Estuarine Management Plan for the Seekoei Estuary was approved by the MEC for implementation by Kouga Local

Municipality and other relevant government departments and stakeholders. The Estuarine Management Plans will guide

the implementation of management strategies in order to restore the natural functioning of the Seekoei Estuary, which

is situated in Jeffreys Bay, within the Kouga Local Municipality.

Integrated Coastal Management trainings for Traditional Leaders were undertaken in collaborations with the

Department of Forestry, Fisheries and the Environment (DFFE). Training focused on coastal Traditional Leaders on the

eastern part of the provinces (Amathole, OR Tambo and Alfred Nzo Districts). Purpose of this session was to empower

58

the Traditional Leaders with knowledge on the relevant legislation being implemented by government to manage the

coastal environment as well as the heritage resource along the coast.

On Coastal Access, the Province worked with DFFE in order to facilitate public access to the beach in Eersterivier

(Koukamma Local Municipality). Ngqushwa Local Municipality also wrote to the Department requesting assistance with

facilitation of coastal access in Fish River, Mpekweni and Mgwalana areas. Coastal access is the mandate of local

government in terms of the National Environmental Management: Integrated Coastal Management Act (ICM Act). A

meeting was however held with the Municipality and a roadmap implementation plan for municipality, supported by

District Municipality and Province was developed.

Ingquza Hill LM was assisted with facilitation of access to the Mbotyi Launch site for the sardine run season. The season

is likely to be affected by the outbreak of the COVID-19 as the lockdown has been implemented in the country and

tourism activities are hugely affected.

Nine (9) coastal settlements were mapped by end of the quarter in the Wild Coast and issued with permits in line with

the Wild Coast Environmental Management Plan. These settlements are all in the Amathole Region. This exercise will

unlock service delivery and economic development opportunities within these Wild Coast communities. Challenges

were being experience with the OR Tambo communities and officials had been sent away by some communities where

they were not able to agree with the terms of mapping.

Four (4) Provincial Coastal Committee (PCC) meetings were held during the year, in line with the Terms of Reference.

The PCC is a requirement of the ICM Act. The Province also participated in three (3) out of the four (4) annual MinTech

Working Group 8 meetings. Issues from the PCC were escalated to the WG8 for resolution or further escalation. Province

participated and presented at the inaugural Integrated Coastal Management Lekgotla that was held in Cape Town,

under the Theme: From Science to Policy and Beyond.

Environmental Empowerment Services Environment Expanded Public Works Programme (EPWP) projects inception meetings, for projects to be implemented

by Koukamma, Inxuba Yethemba, Port St Johns, Mbizana, Mbhashe and Walter Sisulu Municipalities, were convened by

the EES Unit. These projects were projected to create 750 jobs. For the 2019/20 financial year, the thrust of the projects

was directed towards waste management and alien invasive plants eradication projects with the following allocations:

MUNICIPALITIES TYPE AMOUNT

Port St Johns Alien plant removal R3 000 000 – 00

Mbhashe Alien plant removal R4 000 000 – 00

Mbizana Alien plant removal R3 286 000 – 00

Inxuba Yethemba Waste management R3 000 000 – 00

Koukamma Waste management R2 670 000 – 00

Walter Sisulu Waste management R2 000 000 – 00

CAPACITY BUILDING ACTIVITIES REGION VENUE

QUARTER ONE

1.Environmental Crimes J/Gqabi Sterkspruit

2.Illegal Hunting, Rhino Poaching and Animals in

Captivity

Amathole Port Alfred

3. Career Exhibition C/Hani Thornhill Hall – Enoch Mgijima LM

4.Sustainable utilization of Natural Resources A/Nzo Cedarville Combined School – Matatiele LM

5.Environmental Career Expo OR Tambo Mhlontlo LM

6.Quality of Environmental Impact Assessment OR Tambo KSD LM

QUARTER TWO

7.Conservation for Sustainable Development C/Hani Tsomo Town Hall – Intsika LM

8.Impact of Alien Invasive Species on Ecosystem

Services

C/Hani Lower Lufutha Community Hall - Cala

9.Econimic Opportunities in the Waste Sector C/Hani Middleburg Town Hall – Inxuba Yethemba LM

10.Environmental Compliance Monitoring Amathole Sandile Village, Sandile Primary School

11.Climate Change and its Impact on Biodiversity A/Nzo Ngajini Village – Umzimvubu LM

12.Community Based Natural Resource Management OR Tambo Qumbu, Shawbury Location – Mhlontlo LM

13.Prevention of Disasters in Maclear J/Gqabi Maclear – Elundini LM

59

CAPACITY BUILDING ACTIVITIES REGION VENUE

14. Building Climate Change Resilience in Aliwal

North

J/Gqabi Aliwal North St Pauls Anglican Church

15.Career Expo S/Baartman Kirkwood – Sundays River Valley LM

16.Career Expo S/Baartman Somerset East & Cookhouse – Blue Crane

Route LM

QUARTER THREE

17.Environmental Policy Framework Amathole DEDEAT Regional Office

18.Promoting Efficient Energy Use in Communities J/Gqabi Rietfontein, Sterkspruit

19.Environmental Skills Development J/Gqabi Aliwal North

20.Integrated Waste Management S/Baartman Booysen Park - NMBM

21. Sustainable Fishing S/Baartman Pellsrus Community Hall, Jeffreys Bay – Kouga

LM

22.Sustainable Environmental Business Opportunities Amathole Double Drift Nature Reserve

23. International Environmental Obligations Amathole DEDEAT Regional Office

24.Inappropriate Coastal Development as a threat to

Infrasstructure

OR Tambo Green Farm PSJ

25.Impact of Alien Invasive Species OR Tambo PSJ Town Hall

26.Effective Waste Management as a response to

Climate Change

OR Tambo Mthatha Town Hall – KSD LM

27.Prevention of Landfill Emission & their Impact to

the Environment

C/Hani Sakhisizwe Municipal Hall - Cala

28. Habitat Destruction due to illegal activities A/Nzo Ulwandle olubomvu Great Place – Ntabankulu

LM

29.Environmental Skills Development A/Nzo Nonkqubela SSS – Mbizana LM

30.Impacts of Illegal Developments in the

Environment

A/Nzo Mt Ayliff Hospital JSS – Mzimvubu LM

QUARTER FOUR

31.Recycling Information and Benefits J/Gqabi Bishop Dermont SSS – Aliwal North

32.EIA Regulations J/Gqabi Sterkspruit – Senqu LM

33.Waste Disposal Impact on the Environment C/Hani Dordrecht – Emalahleni LM

34.Rhino Anti-Poaching S/Baartman Double Drift Game Reserve – Raymond Mhlaba

LM

35.Development Planning Amathole Ncaza- Raymond Mhlaba LM

AWARENESS ACTIVITIES REGION VENUE

QUARTER ONE

1.Sustainable Use of Resources OR Tambo Kanyayo Location, Flagstaff

2. Veld Management OR Tambo Mhlontlo LM

3. Career Exhibition J/Gqabi Aliwal Spa, Walter Sisulu, Sterkspruit, Maclear,

Mt Fletcher

4.Biodiversity Loss from Soil Erosion Amathole Thornville – Mbhashe LM

5.Poisonous Plants in South Africa (Cestrum Parqui) C/Hani Rwantsana Community Hall – Emalahleni LM

6.Effective Waste Management as a Response to

Climate Change

C/Hani Cofimvaba Wellness Centre

QUARTER TWO

7.Impacts of Poor Air Quality Amathole Morgan Bay – Great Kei LM

8.Land Based Pollution on the Coastal Zone Amathole Mazeppa Village – Mbhashe LM

9.Sustainable use of Natural Resources – Awareness

on Vultures

A/Nzo Umngeni SPS – Matatiele LM

10.Proper Waste Management J/Gqabi Greenslade Hall, Aliwal North

QUARTER THREE

11.Impacts of Rapid Urbanisation to Humankind S/Baartman KwaZakhele, Lillian Ngoyi Community Hall -

NMBM

12.Marine Ecosystem Functioning S/Baartman Mandela Park Community Hall – Kouga LM

13.Climate Change S/Baartman BB Zondani Community Hall – Makhanda LM

14. Wastes Recycling Combating Climate Change and

Assisting in Poverty Alleviation

J/Gqabi Rugby Hall - Burgersdorp

60

AWARENESS ACTIVITIES REGION VENUE

15. Greening as a Mitigation Measure to Climate

Change

J/Gqabi Aliwal North – Walter Sisulu LM

16.Prevention of Pollution C/Hani Exhibeni JSS KuBeyele Village – Engcobo LM

17.Ecosystem Services Benefits C/Hani Vusubuntu Cultural Village – Inxuba Yethemba

LM

18. Impacts of Alien and Invasive Flora Species A/Nzo Youth Centre – Mbizana LM

19.Sustainable of Natural Resources A/Nzo Solomon JSS – Ntabankulu LM

QUARTER FOUR

20.Freshwater Sources and Wetlands Management A/Nzo St Patricks SPS – Mbizana LM

21.Wetlands Management OR Tambo Nobuhle JSS – PSJ LM

22.Freshwater Resources – Our Livelihood OR Tambo Highlybury – KSD LM

23.Coastal Management OR Tambo Hluleka – Nyandeni LM

24.Value of Environment in enhancing the Quality of

Life

C/Hani Mandela Park Community Hall – Engcobo LM

25.Promotion of Proper Waste Management C/Hani Ezibeleni – Enoch Mgijima LM

26.Local Wetlands Day J/Gqabi Maclear –Elundini LM

27.Urbanization as a threat to Rural Livelihood Amathole Morgan Bay – Great Kei LM

28.Negligence and Deterioration on Existing

Infrastructure

Amathole Lower Desi Location – Mbhashe LM

Provincial Enviro Awards Competition was held at the DANS Country Lodge, Nyandeni LM. The provincial winners

were as follows:

Primary School Category

School Region Amount

Hlabathi JSS OR Tambo R115 000 – 00

Didi Senior Primary School Alfred Nzo R85 000 – 00

Thornvale PS Chris Hani R60 000 – 00

Ben Nyathi PS Sarah Baartman R40 000 – 00

St Christophers Private School Amathole R30 000 – 00

Sterkspruit PS Joe Gqabi R25 000 – 00

Secondary School Category

School Region Amount

Bizana Senior Secondary School Alfred Nzo R115 000 – 00

Holy Cross Education Centre OR Tambo R85 000 – 00

Rainbow Preparatory Chris Hani R60 000 – 00

Bishop Dermont High School Joe Gqabi R40 000 – 00

Ndabankulu Public School Amathole R30 000 – 00

St Colmcille High School Sarah Baartman R25 000 – 00

Strategy to overcome areas of under performance There is dire need to fast track recruitment processes and fill critical vacant post with the assistance of Corporate

Services. Provision of additional budget to address the full mandate of the programme as the results are not realised

within a short space of time. The Programme will continue to maintain and establish strategic partnerships because of

inadequate budget allocation. Gazetting of developed Plans and Strategies coupled with awareness programme and

implementation depending on budget allocated.

Changes to planned targets There were no changes made to the 2019/20 annual performance plan.

Linking performance with budgets The amount of underspending recorded by the programme is not material when compared to the budget. The

programme operated within planned operational plans and cash flow projections and wars therefore able to achieve a

61

number of its predetermined objectives, despite the challenges highlighted earlier. Where targets were missed, was

mainly due to portfolio of evidence not being properly packaged.

Sub-programme expenditure

2019/20 2018/19

Sub Programme Name

Final

Appropriati

on

Actual

Expenditure

(Over)/Und

er

Expenditure

Final

Appropriati

on

Actual

Expenditure

(Over)/Und

er

Expenditure R'000 R'000 R'000 R’000 R'000 R'000

1

Environmental Policy, Planning

and Coordination

31,839 31,571 268 24,500 24,282 219

2 Compliance and Enforcement 52,166 51,176 990 50,065 49,891 174

3

Environmental Quality

Management

22,865 21,354 1,511 20,324 20,162 162

4 Biodiversity Management 221,162 219,714 1,448 231,121 230,463 658

5

Environmental Empowerment

Services

14,248 12,899 1,349 12,946 12,103 843

Total 342,280 336,714 5,566 338,956 336,900 2,056

Goods and Service Under-expenditure on travel and subsistence items (accommodation and travelling) resulted from the

postponement/cancellation of projects such as the Provincial Event (Desertification Day Celebration), the Provincial

Clean Up Campaign event, traveling and accommodation for joint working groups (WG5 and W9), National

Environmental Authorization System and Environment and Culture (WG6), Outcome 10 coordinators meeting and

MINTECH Working Group 3 meeting including EIP/EMP sub-committee of MINMEC meetings.

The implementation of E-Permit was not completed as scheduled and that led to underspending. The dispute between

the department and Government printers led to a delay in the Gazetting of EC Integrated Waste Management Plan, EC

Recycling Strategy, EC Environmental Implementation Plan and the EC Biodiversity Conservation Strategy and Action

Plan. leading to underspending.

4. Transfer payments

4.1 Transfer payments to Public Entities

Name of Public

Entity Services rendered by the public entity

Amount

transferred to

the public

entity

Amount spent

by the public

entity

R’000 R’000

Eastern Cape

Development

Corporation

1. Provides short-term and long-term development finance

primarily to previously disadvantaged entrepreneurs

2. Provides non-financial support services to facilitate enterprise

development, promote trade and investment

3. Manages investments in the form of shares on behalf of the

state as well as other assets

4. The public entity has 2 goals and 3 objectives namely:

1. Stimulate economic activity.

2. Optimize all resources to maximize investment returns and

attain sustainability.

217, 842 156,044

ECDC Key Achievements (2019/20)

• ECDC disbursed R58 763 146 worth of development finance

to assist 216 SMME’s

• 233 SMMEs were assisted with non- financial support services.

• 20 Co-operatives were supported with finance through the

Imvaba fund.

• 3 incubators were supported

62

Name of Public


Amount

transferred to

the public

entity

Amount spent

by the public

entity

R’000 R’000

• ECDC facilitated R 1 190 246 133 worth of investments.

• 12 development projects were facilitated

• 211 SMMEs/Local Entrepreneurs were provided with

integrated export support

• 223 people trained in sector development and strategic

initiatives

832 jobs were facilitated and 397 youth job facilitated while 980

jobs were saved through the EC Job Stimulus Fund

Eastern Cape

Gambling Board

5. Administration of applications for and licensing of gambling

business activities; promotion of responsible gambling through

public awareness and consumer education; enforcement of

compliance with legislation as well as with terms and

conditions attached to licences.

58,710 54,581

ECGB Key Achievements (2019/20)

• The entity’s overall organizational performance achievement

is (86%) of the planned key performance indicators / targets

for the financial year under review.

• The entity collected R189.7 million in gambling tax revenue

from all licensed gambling operators in the province. The

COVID-19 pandemic and associated regulations in terms of

the disaster management act had a significant impact on

Revenue generation in the last quarter and this trend is

expected to be seen in the next financial year onwards.

• The gambling industry maintained a total number of Four

thousand Five Hundred and Eighty-eight (4 588) sustainable

job opportunities created cumulatively as at 31 March 2020.

• The industry in the Province for the reporting period under

review has shown a slight improvement at 85% in terms of

compliance maturity level that has been maintained and

compliance barometer results are just above the acceptable

compliance level 3, and year-on-year comparatively the

industry has improved by 2.72% from 83% of the previous

year.

• A total of five licenses issued, One key Type B (20-40

machines) gambling licences was awarded to a suitable

qualifying applicant and other non-key two Type C gambling

machine site and two Bookmaker licences and various other

additional premises and refurbishments conducted by

licensees. These licences issued saw a contribution to Small

Towns Revitalization Programme towards infrastructure

development to a tune of R11.8 million investment spend and

creation of job opportunities benefiting the Province.

• A total of two hundred and ninety-five Compliance audits and

regulatory inspections were conducted at several licenced

operators in the province These audits were conducted for

purposes of ensuring accuracy and completeness of gambling

tax revenues, compliance with the requirements of the Act,

Regulations, Rules as well as Bid Commitments made by the

respective licensees.

• In support of SMME’s by the industry, licensees made a total

procurement expenditure of R111 million which equates to

just under 65%, spent on Local Suppliers.

• The industry has contributed a total R11 million towards

Corporate Social Investment (CSI) / Socio Economic

Development (SED) initiatives in line with the CSI framework

63

Name of Public


Amount

transferred to

the public

entity

Amount spent

by the public

entity

R’000 R’000

as approved by the Board for the period ending 31 March

2020.

• In searching and rooting out of illegal gambling operations

five sweeps operations / gambling raids were conducted in

various towns in all the 5 Zones in the Province. These illegal

gambling raids / operations have been conducted in

collaboration with State agencies such as SAPS, SARS, Asset

Forfeiture Unit and Prosecuting Authorities wherein Sixteen

illegal gambling establishments were discovered and closed

down subsequently Sixteen cases were opened at the

respective towns police stations and court processes are on-

going, confiscated Twenty-seven Gambling Machines with an

estimated value of R55 000 and proceeds of R23 559

confiscated from these illegal operations including four (4)

internet gambling operations were identified. Sweeps

operations are a pro-active approach that seeks to eradicate

illegal gambling, protect public from nefarious trends related

to illegal gambling and ensure protection of licensed

gambling operators from illegal competition.

• The entity hosted Twelve successful awareness and

responsible gambling campaigns for minimisation of harmful

effects of excessive and irresponsible gambling at workplace

for the employees across all occupational levels of

Government Departments in the Province.

• A total of 5.1 million people were reached through various

media and event platforms such as Electronic media, Print

media and General events that were utilised to profile and

promote responsible gambling and create awareness about

the consequences of involvement in illegal gambling activities.

• Four socio-economic development projects to the value of

R529 922 were implemented, benefitting several Eastern Cape

organisations. These projects were informed by the entity’s

Socio-Economic Development Policy and the Eastern Cape

Anti-Poverty Strategy, as championed by the Eastern Cape

Department of Social Development and Special Programmes.

• Two Gambling Economic Opportunity awareness sessions

were conducted. These sessions resonated with the theme for

gambling licences to be the catalyst for economic

development through procurement and enterprise

development within the various municipalities in the Province.

• The entity carried out five sweeps (operations) which sought

to eradicate illegal gambling, protect the public from

nefarious trends related to illegal gambling and protect

licensed gambling operators from illegal competition. The

sweeps were conducted in towns and areas in all five Zones in

the province.

• A research study was conducted to investigate possible

revenue generation models and opportunities within the

gambling industry in terms of potential taxes/fees. The ECGB

continued with its quest to conduct research to inform policy

making decisions while also keeping abreast with industry

requirements. The recommendations from this research will

inform the ECGB’s decision making on further revenue streams

in the province.

• The entity held two seminars on the effectiveness and

efficiency of the support provided by Route Operators to Type

64

Name of Public


Amount

transferred to

the public

entity

Amount spent

by the public

entity

R’000 R’000

A, B and C Limited Payout Machine (LPM) Site Operators in the

Eastern Cape.

The ECGB achieved a Level 5 Human Resource Efficiency Index

rating. The Human Resource Efficiency Index is an assessment

tool used to assess the ability of organisational human

resources departments to strategically assist in the

achievement of service delivery goals. The assessment is

conducted annually by a panel of managers from all budget

programmes, with the outcomes of the assessment informing

appropriate strategies with which to strengthen human

resources functionality and effectiveness in the organisation.

The ECGB has utilised the Index and results to guide the

organisation in ensuring that it becomes an employer of choice

Eastern Cape

Liquor Board

6. Administration of applications for registration and issuing of

liquor license, promotion of responsible liquor trading and

consumption, alerting the public to associated risks or adverse

effects through public awareness and education; and

enforcement of compliance with legislation as well as with

terms and conditions attached to licenses.

62,483 60,145

ECLB Key Achievements (2019/20)

• As part of the liquor trader’s development programme the

entity facilitated registration of three new formal Liquor

Traders Associations in the following areas Mzamba,

Keiskamahoek, KwaNobuhle.

• The Department of Local Government and Traditional Affairs

in partnership with the Eastern Cape Liquor Board has

developed a Standard Liquor- Trading By-Law Framework that

is designed to assist municipalities develop comprehensive

municipal liquor trading by-laws.

• In partnership with Aware!Org the ECLB continued to roll out

the Responsible Trade Facilitation programme which is aimed

at training and coaching Liquor Licence Holders and Outlet

Managers to comply with the relevant legislation and to trade

more responsibly. Aware.org has invested a total amount of

R4 833 330.00 for implementation of RTF in the Eastern Cape

Province in this period. The programme was first piloted for a

period of 12 months at 180 liquor outlets in East London and

Queenstown in Apr 2018- Mar 2019 period. In the last financial

year; Apr 2019-Mar 2020 the programme roll-out was

extended to 180 outlets spread across East London, King

Williams Town, Butterworth, Idutywa, Stutterheim and Peddie.

• In the period under review 610 persons operating illegal liquor

trading outlets were referred to the criminal justice system for

prosecution, 406 of those illegal liquor traders were issued

with the Notice to Appear in Court with an option to pay a fine

(J534) amounting in total to R375 200.00; 70 criminal cases

were opened and these cases are pending finalization in court

and 134 Section 19 Notices were issued. Liquor to the value of

about R2 237 428.00 has been confiscated from these illegal

outlets and will be disposed of once the criminal proceedings

have been finalized with just one liquor outlet found to have

liquor to the value of about R2m.This outlet is suspected to

have been illegally distributing to other liquor outlets. The

case is still pending in court. The budget was R63 435 and

Actual is R63 071 with a variance is R364.

65

Name of Public


Amount

transferred to

the public

entity

Amount spent

by the public

entity

R’000 R’000

In partnership with Department of Education and Aware!Org as

part of the Anti-alcohol education and awareness programme,

underage drinking was introduced in the school curriculum so

that young people can be educated about the risks inherent in

the consumption of alcohol at an early age. This programme

was piloted in eight (8) schools (four schools in Zwelitsha &

four schools in Peddie).

Eastern Cape

Parks& Tourism

Agency

7. Management of conservation of biodiversity and sustainable

utilization of natural resources within the protected areas

8. Marketing, promotion and development of the Province as a

tourism destination

222,695 215,795

ECPTA Key Achievements (2019/20)

• First of its kind community-public-private partnership saw a

community benefit directly from the Black Rhino Range

Expansion Programme

• 14 of the 15 reserves managed by ECPTA were assessed with

a MET-SA score above the national standard of 67.

• Secured additional funding for the internationally supported

Rhino Impact Bond intervention once assessed as “investment

ready”

• Collaborated with University of Fort Hare to launch a new

mentorship programme for tourism entrepreneurs

• The Mkhambathi Concession was launched at the Tourism

Indaba

The Board approved a 5-year Tourism Plan

East London

Industrial

Development

Zone

9. Develops land so as to provide suitable infrastructure for


10. Promotes investment and trade 181,575 181,575

ELIDZ Key Achievements (2019/20)

• The ELIDZ attracted 7 new investors during the year with a

combined investment value of R1,363bn in the automotive,

and general manufacturing sectors.

• By the end of the financial year,the ELIDZ saw the completion

of 6 infrastructure and superstructure projects in the zone.

Another 8 projects were in progress at the close of the

financial year with delays being experienced due to COVID19

lockdown restrictions.

• A total of 15 Corporate Social Investment (CSI) projects

successfully carried out during the year, 11 bursaries awarded

and 41 interns were trained which emphasises the ELIDZ’s role

in the community as well as ongoing contributions to skills

development initiatives for youth within the province.

The ELIDZ hosts 2 incubators

Coega

Development

Corporation

• Develops land so as to provide suitable infrastructure for


• Promotes investment and trade

104,903 56,620

COEGA Key Achievements (2019/20)

• It is within this environment that CDC, through strategic

interventions, has been able to stay on course and gain some

ground in achieving objectives set in its five-year 2015-2020

sustainable growth strategy. This, along with CDC’s investment

promotion activities for the Coega SEZ, have yielded some

positive results in the last financial year with:

66

Name of Public


Amount

transferred to

the public

entity

Amount spent

by the public

entity

R’000 R’000

• 12 new investors secured valued at R719 million;

• Cumulative Operational Jobs created 8 306;

• Construction Jobs created 5 934;

• Number of People trained 6 591;

• 383 SMMEs benefited from the training programme (178

SMMEs received CETA Accredited Training and 205 SMMEs

received Non-Accredited Training);

• 80% of SMME’s who were awarded contracts by the CDC have

successfully completed the mentorship programme while 72

SMME’s have successfully upgraded on CIDB;

• In the FY 2019/20, CDC improved its B-BBEE status from level 4

to a level 2;

During the FY2019/20 the CDC has continued on its upward

trajectory as a leader. Capping the good work achieved by the

CDC, the organisation has been rewarded by captains of industry

through the number of awards received mainly:

• Merit Award for Major Accomplishments at the 2019 Exporters

Club Awards;

• Employer of the Year Award at the 2019 National Business

Awards; and Top Employer 2019/20 by the Top Employers

Institute.

As indicated in the 2019/20 APP, the following indicators are included for information purposes as they are

implemented through ELIDZ, COEGA, ECDC, ECGB, ECLB and ECPTA. These indicators are oversighted by the

Economic Development and Tourism Programme (Programme 2).

Enterprise Development

# Indicator 2016/17

Actual

achievement

2017/18

Actual

achievement

2018/19

Actual

achievement

2019/20

Planned

target

2019/20

Actual

achievement

1. Number of SMMEs assisted with non-

financial

Support

368 278 228 150 233

2. Number of SMMEs received development

Finance 263 163 190 150 216

3. Number of youth jobs facilitated31 42% 575 2675 245 397

4. Number of co-operatives supported with

finance 16 20 20 20 20

5.

Number of jobs created/ facilitated

ECDC = 1853

ELIDZ = 2439

Coega = 16

869

ECDC = 498

ELIDZ =3904

Coega = 17

767

ECDC = 1295 ELIDZ = 4666

Coega = 17767

ECDC = 510

ELIDZ = 8758

Coega =

19842

ECDC= 832

ELIDZ =1507

Coega =

14240

6. Number of economic infrastructure

projects implemented 3 4 4 2 0

Trade and Investment Promotion

7. Number of investments realized

ELIDZ = 4

Coega = 16

ELIDZ = 5

Coega = 14p

ELIDZ = 5

Coega = 8

ELIDZ = 6

Coega = 12

8. Value of investments realised

ECDC =

R633.2 mil

ELIDZ =

R1.060 bil

ECDC =

R394.4 mil

ELIDZ =

R1.355 bil

ECDC = R305 mil

ELIDZ = R819.5 milCoega =

R860.7 mil

ECDC = R370

mil

ELIDZ = R320

mil

ECDC= R 1

190 246 133

ELIDZ =

R1,363b

31 Indicator changed from % to number in 2017/18.

67

Enterprise Development

# Indicator 2016/17

Actual

achievement

2017/18

Actual

achievement

2018/19

Actual

achievement

2019/20

Planned

target

2019/20

Actual

achievement

Coega =

R11.685 bil

Coega =

R860 mil

Coega = R1.1

bil

Coega = R719

mil

9. Number of development projects

facilitated

9 1010

12 12

10 Number of SMMEs/Local entrepreneurs

provided with integrated export support

93 81175

75 211

11 Number of people trained (sector

development and strategic initiative)

ECDC = 559

ELIDZ = N/A

Coega = 6

697

ECDC = 135

ELIDZ = 117

Coega = 6

674

ECDC = 203ELIDZ = 132

Coega = 6674

ECDC = 200

ELIDZ = 120

Coega = 5

013

ECDC= 223

ELIDZ = 188

Coega = 6591

12 Number of incubation programmes

supported

ELIDZ = 3

ECDC = 3

ELIDZ = 3

ECDC = 4

ELIDZ = 3ECDC = 3

ELIDZ = 3

ECDC = 3

ECDC= 3

ELIDZ = 2

Liquor Regulation

13

Percentage of fully compliant liquor

license

applications processed within 60 working

days

66% 70% 69% 100% 93%

14 Percentage of compliance monitoring

inspections conducted32

6855 7124 70% 100%

15 Percentage of complaints attended to

within 30 days

87% 84% 88% 75% 65%

16 Number of awareness interventions

conducted

4 120 174 160 203

17 Number of social responsibility

programmes conducted

7 7 11 8 12

Gambling Regulation

18 Revenue collected R170.8 mil R181.3 mil R191.3 mil R200 mil R189.7 mil

19 Number of licenses issued 2 10 2 2 1

20

Number of responsible gambling

awareness sessions/ workshops

conducted

5 14 13 12 12

21 Number of inspections conducted 120 125 130 140 140

22 Number of people reached through

responsible gambling campaigns

2.3 mil 3.7 mil 3.66 mil 1.0 mil 5.1 mil

Tourism Planning

23 Brand Awareness Index 3 2.9 2.9 2.7 2.9

Tourism Growth and Development

24 Hospitality Revenue R4.9 mil R7.5 mil R8.4 mil R8.1 mil R6.917 mil

Tourism Sector Transformation

24 Provincial Tourism Development Index 3 1 3 2.7 3.0

32 Used to be number of compliance inspections conducted until 2017/18.

68

As indicated in the 2019/20 APP, the following indicators are included for information purposes as they are

implemented through the ECPTA. These indicators are oversighted by the Environmental Affairs Programme

(Programme 3).

Biodiversity and Protected Area Planning and Management

# Indicator

2016/17

Actual

achievement

2017/18

Actual

achievement

2018/19

Actual

achievement

2019/20

Planned

target

2019/20

Actual

achievement

26 Number of hectares in the

conservation estate 0 67 887 ha33 1 748 ha34 10 000 ha 12 627 ha

Conservation Agencies and Services

27 Percentage of area of state

managed protected areas

assessed with a METT score above

67%

93% 100%(15) 100% (15)35 80(12) 93 (14)

28 Number of Biodiversity Economy

initiatives implemented

New

Indicator 1 136 2.7 3.0

4.2 Transfer payments to all organisations other than public entities

The table below reflects the transfer payments made for the period 1 April 2019 to 31 March 2020

Organisations to whom transfer payments have been made

The table below reflects the transfer payments which were budgeted for in the period 1 April 2019 to 31 March 2020, but no

transfer payments were made.

Name of transferee

Purpose for which

the funds were to be

used

Amount budgeted

for

(R’000)

Amount transferred

(R’000)

Reasons why funds

were not transferred

N/A N/A N/A N/A N/A

Conditional Grants and earmarked funds paid

The table below details the conditional grants and earmarked funds paid by the department during the period 1 April

2019 to 31 March 2020.

33 The properties prepared but not declared in 2016/17 are included in the 2017/18 results. 34 The target was not achieved due to boundary issues that require the intervention of the land surveyor, mining rights issues from the Department of Mineral Resources (DMR), property transfers, and correspondence challenges with overseas landowners. The extent of the remaining properties to be declared is 12 903,5841 ha and these properties will be submitted for declaration during the course of the 2019/20 year as they become ready. 35 The target has been exceeded due to successful implementation of reserve specific METT turnaround plans that were initiated in the previous financial year. The average METT score across ECPTA managed reserves is 75%. 36 This reflects the Mnembe Safaris game farm programme in Enoch Mgijima Municipality (Queenstown area)

69

Conditional Grant: EPWP

Department who transferred the grant DEDEAT

Purpose of the grant

Job creation through EPWP on Environmental Sector projects; and

Encourage municipalities to improve environmental management

services in accordance with the environmental legislation

Expected outputs of the grant

Improve the scope and standard of environmental management and

conservation of biological resources in the Local Municipalities

funded, by providing assistance in their respective areas;

Ensure that the agreed minimum numbers of jobs are created;

The beneficiary communities must be provided with training; and

Improve the scope and standard of Waste management in the

Province, providing assistance to the Municipalities.

Actual outputs achieved The Intended outputs have been achieved with the monitoring of the

project through the Steering Committee

Amount per amended DORA R2,670 million

Amount received (R’000) R2,670 million

Reasons if amount as per DORA was not

received

N/A

Amount spent by the department (R’000) R2,670 million

Reasons for the funds unspent by the entity N/A

Reasons for deviations on performance N/A

Measures taken to improve performance

Submission of credible business plan using DEDEAT business plan

template; The funding to be strictly utilized for the project;

Sign a Service Level Agreement; and Allocation to be transferred to

the municipality's bank account. A separate account for those funds

to be opened thereafter the receipt of such funds.

Monitoring mechanism by the receiving

department

The project will be monitored, and progress evaluated by a Project

Steering Committee; Monthly project tracking sheet and expenditure

report to be submitted to DEDEAT; and

Planned and ad hoc site visits will be undertaken by DEDEAT during

the implementation of the projects

5. DONOR FUNDS

5.1 Donor Funds Received

Donor assistance includes both cash and in-kind contributions. Reporting on donor assistance needs substantial

improvement in light of the lack of sufficient funding information received in prior financial years from institutions. The

following information should be presented for donor funds. All financial amounts must agree to the amounts disclosed

in the annual financial statements.

70

Donor Fund EU Fund:

Name of donor Ecological Resource Management Systems at Rural Schools

Full amount of the funding R27,359 million

Period of the commitment 26 March 2018 to 31 March 2020

Purpose of the funding The programme is to support 30 rural schools in Amathole District to use

sewer relevant feed waste to generate a fertilizer for school garden and

produce a cooking gas form a Biogas system for school’s nutrition

programme.

Expected outputs Installation of Biogas system to produce a cooking gas for rural school’s

nutrition programme

Use of waste from the system to generate a fertilizer for school garden

The system will also create a practical life science laboratory in

environmental biotechnology, agriculture and renewable energy for

leaners.

It will help the learners to have the insight on Green Economy sectors such

as Bio-economy, Renewable energy economy and eco-agriculture.

Actual outputs achieved The first 2 outputs above are completed in the first 5 schools, now in the

process of procuring for the next 15 schools and the project is also held

back by the Covid 19.

Amount received in current period (R’000) R27,359 million

Amount spent by the department (R’000) R17,245 million

Reasons for the funds unspent The project runs till March 2021 and the money is transferred in trenches

to the Implementing Agent ECDC. The is transferred to ECDC as per the

work plan signed by both the department and ECDC

Monitoring mechanism by the donor To ensure the project is managed locally ECDC is the implementing agent

who monitors and the progress of the project. The contractor reports to

ECDC

DEDEAT does the overview of the project by means of progress reports

from ECDC and do site visits to evaluate the progress.

The National Treasury receives the reports from DEDEAT and does site

visits whenever they see a need to do so.

A PSC is established to drive the project and National Treasury forms part

of the PSC

Donor monitors the project by getting reports from National Treasury

MOU and SLA is signed between all relevant parties to ensure compliance

71

6. CAPITAL INVESTMENTS

6.1 Capital Investment, Maintenance and Asset Management Plan

The R9.972 million in respect of finance lease payments for motor vehicles and cellular phones. The department funded

a total amount of R74,490 million towards infrastructure, project implemented by Coega Development Corporation

(CDC) all this has been work in progress as the houses not yet complete last payments were in 2018/19.

Infrastructure

projects

2019/20 2018/19

Final

Appropriation

R’000

Actual

Expenditure

R’000

(Over)/Under

Expenditure

R’000

Final

Appropriation

R’000

Actual

Expenditure

R’000

(Over)/

Under

Expendi

ture

R’000

New and

replacement assets

Existing

infrastructure assets

Upgrades and

additions - - - 5,000 1,326 3,674

L

Total - - - 5,000 1,326 3,674

72

1. Introduction

The Department established its governance structures in order to maintain the highest standards of governance in the

management of public funds and resources. The key principle behind each structure is independence, accountability and

integrity. The Department also ensures that governance is audited to provide assurance that the Department’s governance

structures are effective, efficient and economical in the utilisation of government resources.

2. Risk Management

The risk management committee was fully functional and performed its work as directed by its terms of reference, risk

management policy and the risk appetite and tolerance framework. The work of the risk management committee was

reported to the audit committee and the accounting officer, and risk management oversight was coordinated with all

the role players. Key achievements of this coordinated approach and combined assurance resulted in the improved

maturity level, at least the National Treasury maturity assessment. An external evaluation of risk management was

conducted by an independent party, aligned to the King IV requirement. of which report concluded that good faith

efforts are made to conform but falls short of achieving the spirit and intent of some major aspects of the requirements.

Unlike the National Treasury evaluation, the King IV aligned evaluation focused more on the performance, rather than

compliance. A combined assurance was implemented during the last quarter of the financial year. The more benefits of

this, combined with the independent party evaluation recommendations, which are being implemented, will be more

visible in the ensuing year. The resourcing of both the risk management and internal audit functions was increased in

the 2019-2020 financial year, which improves the overall effectiveness of risk management within the department.

3. Fraud and Corruption

Fraud and corruption represent significant potential risks to the Department’s assets and can negatively impact on service

delivery efficiency and the Department’s reputation.

The Eastern Cape Government has adopted an Anti-Fraud and Corruption Strategy which confirms the Province’s zero-tolerance

stance towards fraud, theft and corruption. In line with this strategy the Department is committed to zero-tolerance with regard

to corrupt, fraudulent or any other criminal activities, whether internal or external, and vigorously pursues and prosecutes by all

legal means available, any parties who engage in such practices or attempt to do so.

The Department has a draft Fraud and Corruption Prevention Plan. Various channels for reporting allegations of fraud, theft and

corruption exist and the Department has the following mechanisms in place to report fraud and corruption and how these

operate (e.g. whistle blowing):

• National Anti – Corruption Hotline (0800 701 701)

• Walk-ins

• Departmental email address

• AGSA

Cases are reported through the Hotline number and referred to the Department for further investigation. Each allegation

received by the Fraud and Anti-Corruption Unit (Security) is recorded in a Case Register which is used as a management tool to

report on progress made with cases relating to the Department and to generate statistics for the Province and Department. The

Department conducts an investigation and report its findings to the relevant stakeholders. After preliminary investigation,

findings with recommendations are sent to the Office of the Premier (DG) for submission to the Office of the Public Service

Commission.

Employees and those external to the Department who blow the whistle on suspicions of fraud, corruption and theft are protected

if the disclosure is a protected disclosure (i.e. meets statutory requirements. The opportunity to remain anonymous is afforded

to any person who would like to report acts of fraud, theft and corruption and should they do so in person, their identities are

kept confidential by the person to whom they are reporting.

Once fraud, theft or corruption is confirmed after completion of an investigation, the relevant employee who participated in

these acts is subjected to a disciplinary hearing. Where prima facie evidence of criminal conduct is detected, a criminal matter is

reported to the South African Police Services.

74

The following table summarises the cases for the year under review:

Open cases as at 1 April 2019 7

New cases (2019/20) 1

Closed cases (2019/20) 7

Duplicate / incorporated cases (2019/20) 0

Open cases as at 31 March 2019 1

Progress made in implementing the Departments Fraud Prevention Plan:

a) Reviewed the Fraud Prevention Plan

b) Quarterly reports submitted to Office of the Premier, Audit and Risk Management Committees

c) Participating in the Provincial Anti-Corruption Case Review sessions quarterly

d) Accounting Officer represents the Department through the Provincial Anti-Corruption Council chaired by the

Director General.

4. Minimising Conflict of Interest

SMS members have disclosed their financial interests (100% compliance) for the 2019/20 financial year and submitted

the same to the Public Service Commission as required by Public Service Regulations, 2016. Both the eDisclosure and

register of SMS members’ disclosed financial interests was compared to the centralised supplier database to ensure

that no conflict of interest existed. Where potential conflict of interest had been flagged by the Provincial Treasury and

AGSA, these were reviewed and no conflict of interest was found.

The following activities were also undertaken by the Department:

a) Updating financial and supply chain management delegations

b) The SCM reforms introduced per National Treasury SCM instruction No. 4A of 2016-17, effective from 01 July

2016, together with the Centralised Supplier Database facilitated the ease of verification of conflict of interest,

which the Department implemented.

c) Disclosure of financial interests by the finance and SCM) officials, practitioners, role players and Bid Committee

members.

d) Screening of officials and potential staff (applicants) and key suppliers such as Security Service providers

Number of employee vetting forms submitted to the State Security Agency 11

Number of shortlisted candidate’s pre-screening forms submitted to the State

Security Agency

18

Number of Service Providers pre-screening forms submitted to the State

Security Agency

1

5. Code of Conduct

The Public Service Code of Conduct lays a framework with a guide of principles designed to assist employees of the

Department to uphold professional conduct in the Department with honestly and integrity. The Code also outlines high

standards of professional ethics that employees in the Department are supposed to always maintain and promote.

Breaking the code of ethics can result in disciplinary action that may lead to serious consequences such as suspension

from work without pay, demotion, and / or dismissal. A code of ethics is important because it clearly lays the "rules" for

acceptable behaviour and provides a preventative warning.

The Department is adhering to the above code of conduct. The Department is utilising the disciplinary process outlined

in Disciplinary Code and Procedure for the public service: Public Service Coordinating Bargaining Council Resolution 1

of 2003, Annexure A when an employee transgresses any provisions contained in the Code. When an employee

transgresses the rule or code of conduct the following process is implemented:

a) An investigation is conducted before a hearing can be instituted.

b) If there is a prima facie evidence, a charge sheet is formulated containing date, venue, time and rights of the

employee during the disciplinary enquiry. The charge sheet is served to the alleged employee at least five working

days before the date of the enquiry.

c) The Head of Department appoints a presiding officer and Employer Representative.

75

d) The disciplinary outcome / sanction is served to the employee, and the employee has the right to appeal within

five working days to the Executing Authority.

e) After receiving the appeal outcome, or if the employee did not appeal at all, the sanction is then implemented.

f) If the employee is not satisfied with the sanction, then they have the recourse to follow dispute resolution

processes

Please refer to Part D of the annual report for further information on disciplinary matters.

6. Health Safety and Environmental Issues

In the workplace, Health and Safety regulations are paramount to the well-being of the employees. Many hazards are

present in today's work environments, and it's the employer's job to keep employees safe from these hazards. It's a job

that is so important that there are occupational safety standards and regulations. In the Public Service, Departments are

required to develop a healthy, dedicated, responsive and productive workforce as it is said, “Healthy minds, healthy

bodies, translate to increased productivity”.

In the Department, the health and safety and environmental issues are governed by IEHW strategic framework

developed by DPSA as well as Occupational Health and Safety Act. This framework has 4 functional pillars and SHERQ

(Safety, Health, Environment, Risk and Quality) is one of them. The following are the programmes under this pillar

which should be implemented:

i. Occupational Health & Safety

• Occupational Hygiene

• Hazard Control

• Health & Safety representation & appointment of Health and Safety committee

ii. Environmental Management and

• Work design

• Building and offices

• Lighting

• Ventilation and sanitation

iii. Risk and Quality Management

• Risk Assessment,

• Disaster Management,

• Emergency preparedness plans and standards

In compliance to the IEWH strategic framework as well as Occupational Health and safety act, DEDEAT had appointed

Health and Safety representatives as well as committee to monitor the implementation, however, full compliance is

always a challenge due to centralised function for state properties. This makes it almost impossible to adhere to the

health and safety standards as required even if the Department is willing to as a result for a better half of the year the

Department had to vacate the allocated building because it did not meet the Health and safety standards and it is

unfortunate that, even the recently allocated buildings still does not meet the required standards. The limited budget

in which the Department is operating with is also not assisting the situation.

7. Portfolio Committees

The department and its entities were oversighted by the Portfolio Committee on Economic Development, Environmental

Affairs and Tourism. After the tabling of the department’s policy speech, the Department and the Entities presented the

annual performance plans and the budget vote. These were considered and adopted by the committee.

76

8. SCOPA Resolutions

Resolution No. Subject Details Response by the

department Resolved (Yes/No)

A (a) The Department is

experiencing internal

control weaknesses

particularly in Supply

Chain Management

Unit as a result the

Department incurred

an irregular

expenditure amounting

to R214, 3 million that

had accumulated over

a number of years

which is mainly caused

by infrastructure

projects implemented

by Coega Development

Corporation for Nelson

Mandela Metro on

behalf of the province.

Furthermore, irregular

expenditure of R30, 1 million

incurred during the current

year under review which is

attributable to non-

compliance with SCM

procedures.

(a) The Accounting

Officer must develop

stringent measures to

be implemented over

agencies that should

be carried through

the level of the

province as a whole

and a better planning

and coordination with

other Departments is

obligatory. A report in

this regard must be

furnished to the

Committee within 30

days after the

adoption of this

report.

The department is

currently with National

Treasury to condone

this irregular

expenditure as it

involves another

sphere of government.

Provincial Treasury has

been instrumental in

assisting in this

regard, but this

remained unresolved

at year end. The

Department is

continuing to work

closely with both

National and

Provincial Treasuries

to clear the irregular

expenditure for the

prior and current

years.

Yes

B The Department failed to take

effective and appropriate steps

to prevent the occurrence of

irregular expenditure during

the year under review as

required by Section 38(1) (c)

(ii) of the PFMA and Treasury

Regulation 9.1.

(b) The Accounting

Officer must ensure

that appropriate and

effective steps are

taken to prevent

occurrence of

irregular expenditure.

In addition,

consequence

management must be

implemented against

officials who fail to

comply with

provisions of the

PFMA, as required by

Section 38 (1) (h) of

the same Act. A

report on this regard

must be submitted to

the Committee within

30 days after the

adoption of this

report. In addition,

the Member of the

Executive Council

must be made aware

of these

transgressions as

he/she is the one who

is accountable by law

to the Legislature.

In the financial year

under review there is no

new irregular

expenditure, all

investigations were

conducted in the

previous years. The

growth is as a result of

expenditure that is

being incurred against

the old contracts.

Currently there are

systems in place that

prevent irregular

expenditure.

Yes

77



c The Department failed to take

effective and appropriate steps

to prevent the occurrence of

irregular expenditure during

the year under review as

required by Section 38(1) (c)

(ii) of the PFMA and Treasury

Regulation 9.1.

The Department must

ensure that all funded

vacant positions are filled

before the end of the

current financial year to

minimise the negative

impact on service delivery.

In addition, the

department must monitor

its budget and make

certain that the

appropriated budget is

spent fully and in line with

the purpose for which the

funds were allocated.

The department is in a

process of all funded

posts on the approved

organogram. The

process will commence

with the leadership

positions.

Yes

D The Department failed to

ensure that financial

statements are free of material

errors as a result

corresponding figures for 31

March 2017 were restated as a

result of an error in the

financial statements of a

Department and for the year

ended 31 March 2018.

Material misstatements were

also identified in the annual

performance report of

Economic Development and

Tourism programme.

The Accounting the

Department must institute

stringent quality control

measures to verify the

accuracy and completeness

of its financial statements

prior submitting for audit in

line with the requirements of

section 40(1) (a) and (b) of

the PFMA.

The corrective action

is being actioned

currently. The first

quarter Interim

Financial Statements

have been properly

stated and disclosed;

the second interim

financial statement

will be given to A-G

for scrutiny. The

governance structures

have been

strengthened.

Corrective action for the

annual report has

already been

implemented

Yes

e (e) Leadership did not

adequately perform

their oversight

responsibilities relating

to the general control

environment by

ensuring that policies

and procedures for

monitoring and

reporting in the

financial statements,

performance report

and compliance with

key legislation were

implemented. This is

evidenced by repeat

findings on key

controls, deficiencies

on reported

information in the

annual performance

report and non-

compliance with

legislation and is

directly linked to

inadequate

consequence

management.

The Accounting Officer must

ensure that the Department

has effective leadership that

is based on a culture of

honesty, ethical business

practices and good

governance to protect and

enhance the interests of the

Department. Furthermore,

effective and appropriate

steps must be taken to

ensure that policy

transgressions are resolved,

and the public funds lost due

to those transgressions are

recovered.

The accounting officer

did monitor the

adherence to

standards operating

procedures of the

department to the

level of capacity that

the department has at

its disposal whilst

awaiting the approval

of the structure which

amongst its critical

posts is a permanent

post of Chief Audit

Executive, a fully-

fledged accounting

services unit and risk

management unit

which is a stand-alone

from internal control

unit. The gradual

improvement of the

departmental audit

outcomes reflects the

accounting officer’s

implementation of

good practices and

compliance with

standard operating

Yes

78



procedures within the

department.

The department,

through its recruitment

processes, plans to

attract suitable

candidates (as these

posts will no longer be

1-year contracts). This

will ensure stability,

accountability and

strong leadership in the

Departments’

administration in order

to assist the accounting

officer.

F The risk management unit and

the audit committee

discharged their legislated

mandate during the year;

however, they could not be

fully effective assurance

providers as their

recommendations and follow-

up actions were not always

implemented by

management, thereby limiting

the Department’s ability to

mitigate its strategic and

operational risks. This was

partly caused by the capacity

issues in the internal audit unit.


ensure that the department

has effective risk

management unit and audit

committee, adequate

internal controls must be

established and adhered to

in ensuring that risks are

identified and prevented or

addressed immediately after

being discovered.

Consequence management

must be instituted against

officials who neglected

recommendations of the

internal audit and audit

committee. A report in this

regard must be submitted to

the Legislature within 30

days of adoption of this

report.

The department has

taken a conceited

effort to augment the

unit with consultants

as it is currently

staffed with 2 officials;

1 manager (on sick

leave for over a year

ever since being

involved in a car

accident), 1 assistant

manager. Also,

through the

intervention from

Provincial Treasury, a

Chief Audit Executive

from Human

Settlements is

assisting the

department.

The consultants will be

engaged for a period

of a year to provide

the following;

1) Transfer of skills;

2). Provide and hand

over all audit

assignments to the new

Chief Audit Executive

who will be responsible

for the recruitment of

officials in the new

approved structure.

Yes

G The Department did not have

an effective internal control

system to monitor compliance

with legislation, as repeat

findings were identified in this

area.


ensure that there are

adequate internal controls,

and that Departmental

officials fully comply with all

relevant legislations.

Furthermore, there must be

continuous monitoring to

ensure implementation of

corrective measures and

compliance to policies.

The gradual

improvement of the

departmental audit

outcomes reflects the

accounting officer’s

implementation of

good practices and

compliance with

standard operating

procedures within the

department.

Partly

79

9. Prior Modification to Audit Reports

The department has included the following information in the table as follows:

Nature of qualification, disclaimer, adverse opinion

and matters of non-compliance

Financial year

in which it first

arose

Progress made in clearing / resolving

the matter

N/A N/A N/A

10. Internal Control Unit

The Public Finance Management Act read with the National Treasury Regulations, is used as a primary basis for

compliance monitoring, and this is implemented through the review of procurement and payment processes transaction

by transaction. There is a considerable improvement in the financial management function through the implementation

of the approach.

Despite the above, there is room for improvement, once this is embedded in all management processes.

11. Internal audit and audit committees

The department during the 2019/20 financial year undertook a process to capacitate the internal audit unit. Internal

audit implemented its risk-based audit plan, which was based on the risk register from the Risk Management Unit of

the department. Internal Audit conducted its reviews with due professional care and independence, which is a

prerequisite for an effective Internal audit unit.

Internal audit completed 81% of its plan where 13 audits of the 16 planned audits were completed.

The internal audit function performed the following audits during the year:

1. Review of AFS (18/19)

2. Annual Performance Report Review (18/19)

3. Debt Management

4. Performance Management and Development Systems

5. Communication Management

6. Revenue Management

7. Leave Management and Service Terminations

8. SCM: Contract Management

9. Performance Information (PR 3)

10. Transfer Payments - Public Entities

11. Review of Interim Financial Statements

12. Review of Strategic Plan and Annual Performance Plan 2020/2021

13. Transfer Payments to Municipalities

Where control weaknesses have been identified management has/or is in the process of attending to such weaknesses.

The following are the audits that were not performed in the 19/20 financial year due to the vacancies in the unit which

resulted in the unit being unable to complete all the planned audits, furthermore the impact of the national state of

disaster lead to Q4 planned audits being deferred to the 20/21 plan as the building was inaccessible :

• Transfer Payments to LRED

• Transfer Payments to Non-Profit Institution.

• HR- Recruitment and Selection

• Organisational Development

• Transfer Payments Enterprise Development (Incubation)

• Environmental Affairs - Biodiversity management

• ICT

Most of the findings raised on quality assurance in the Quality Assurance Improvement Program (QAIP) have been

addressed except the findings relating to utilisation of IT in the Internal Audit Activity.

80

INTERNAL AUDIT AND AUDIT COMMITTEES

OBJECTIVE ASSURANCE RESPONSIBILITIES Internal Audit Function must evaluate and contribute to the improvement of governance, risk management, and

control processes using a systematic and disciplined approach in the following areas:

Governance Processes • Internal Audit Function should contribute to the Departments’ governance processes by evaluating and

improving the governance processes in its accomplishment of the following objectives: -

• Promoting appropriate ethics and values within the departments of Economic Development, Environmental

Affairs & Tourism;

Risk Management • Internal Audit Function must evaluate the adequacy and effectiveness and contribute to the improvement of

the risk management process.

• Internal Audit Function must evaluate risk exposures relating to Departments’ governance, operations and

information systems regarding the:

• Reliability and integrity of financial and operational information;

• Effectiveness and efficiency of operations;

• Compliance with laws, regulations, policies, procedures and contracts.

Internal Control Internal Audit Function must assist the Department in maintaining effective controls by evaluating their effectiveness

and efficiency and by promoting continuous improvement. Internal Audit Function must evaluate the adequacy and

effectiveness of controls in responding to risks within the Departments’ governance, operations and information

systems regarding the following:

• Reliability and integrity of financial and operational information;

• Effectiveness and efficiency of operations;

• Compliance with laws, regulations, policies, procedures and contracts

CONSULTING ACTIVITIES RESPONSIBILITIES To provide consulting services which will contribute to the better management of Departments’ significant risks,

without assuming management responsibilities.

The following consulting services on issues relating to the governance, risk management and control processes could

be rendered:

• Providing Executive Management with advice on the identification and assessment of significant risk

exposures, with a view to improve the Department’s control environment;

• Partake in steering committees as risk and control specialists making recommendations relating to process

design.

AUDIT COMMITTEE AUTHORITY • The AC is authorised to request an investigation into any activity within its powers, as identified in this AC

Charter. The AC has the right to seek independent advice and must be provided with the resources necessary

to investigate such matters, following due process.

• The AC shall have unrestricted access to departmental staff and records containing information needed to

properly perform its duties and execute its powers, following due process and protocols.

11.1 AUDIT COMMITTEE RESPONSIBILITIES

The AC’s responsibilities relating to Internal Audit, who evaluate and contribute to the improvement of

governance, risk management and control processes, are to:

• Monitor and review the effectiveness of the Internal Audit Function including compliance with the

International Standards for the Professional Practice of Internal Auditing.

• Review and approve the Internal Audit Charter and amendments thereto, at least annually.

81

Responsibilities relating to the External Audit Function performed by the Auditor General of South Africa

(AGSA):

• Review AGSA’ independence and objectivity and the effectiveness of the audit process, taking into

consideration relevant professional and regulatory requirements.

• If the AC becomes aware of non-audit services being rendered by a firm contracted by AGSA, it shall be

reported to the AO and AGSA.

Responsibilities relating to Accounting and Financial Reporting

Review of Audited Annual Financial Statements (AFS)

• Inspect and confirm that the AFS have been signed by the AO on or before the date of the audit report;

• Enquire from AO if the AFS have been prepared in accordance with the Preparation Guide and Specimen

Financial Statements issued by National Treasury and in compliance with all applicable laws and regulations;

Review of accounting policies • Ensure that the Accounting Policies are as per the policies disclosed in the specimen financial statements

issued by National Treasury. Where there are deviations, ensure that there is evidence of satisfactory

consultation with the Office of the Accountant-General (OAG) regarding the changes;

• Consider the reasons for the changes in policies, if any. Assess whether changes have been correctly dealt

with and disclosed in the AFS;

Review of management and audit report • Determine how significant financial reporting issues for the reporting period were resolved between

management and AGSA;

• Review significant adjustments arising from the external audit (“overs and unders’ schedule”) and their impact

on the AFS, the transactions agreed with management and processed, and those not adjusted for.

Review of In-Year Monitoring Reports Review the quality of quarterly In-Year Monitoring Reports, and report to the AO instances of non-achievement or slow

progress.

Responsibilities relating to Risk Management • Consider the Department’s risk management strategy and policy.

• Review and discuss the risk management initiatives planned for the year and the results thereof.

Responsibilities relating to Internal Control • Review the adequacy and effectiveness of the internal control systems;

• Consider disclosing implications of material internal control deficiencies identified in external audit reports,

internal audit reports or during the execution of the committee’s oversight functions, and the way

management is dealing with it.

Responsibilities relating to the Pre-determined Objectives • Review on a quarterly basis the department’s progress towards achievement of its annual strategic objectives

as well as the quality of the Quarterly Performance Reports, and report to the AO instances of non-

achievement or slow progress.

Responsibilities relating to Ethics and Forensic Investigations Review arrangements by which staff may, in confidence, raise concerns about possible improprieties in matters of

financial reporting or other matters, with a view to ensuring that arrangements are in place for the appropriate and

independent investigation of such matters and for appropriate follow-up action.

82

12. AUDIT COMMITTEE MEMBERS AND ATTENDANCE

The Audit Committee consists of the members listed hereunder and meets at least four times per annum as per its

approved terms of reference. During the current year six meetings were held. The members and their attendance of

the meetings held are as follows:

Name of

Member Qualifications

Internal or

External

If, Internal,

Position in

department

Date

Appointed

Date

Resigned

No. of

Meetings

Attended

No. of

Special

Meetings

Attended

Tracy

Cumming

CA(SA), CTA, B.

Comm

External None 1 Aug ‘14 None 4 2

Simthandile

Peter

ML, LLB, MDP External None 1 Aug ‘14 None 4 2

Craig Sparg CA(SA), CTA, B.

Comm.


Nkosana

Sifumba

B. Comm, MBL,

CISA, CGEIT


13. AUDIT COMMITTEE REPORT

We present our report for the financial year ended 31 March 2020.

13.1 Audit Committee Responsibility

The Audit Committee reports that it has complied with its responsibilities arising from Section 77 of the Public Finance

Management Act and Treasury Regulation 3.1. 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.

13.2 The effectiveness of internal control

In line with PFMA and the King IV 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 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, it was noted that matters

were reported indicating deficiencies in the system of internal control or deviations there from. Accordingly, we can

report that the system of internal control was not entirely effective for the year under review.

13.3 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 not entirely satisfied with the content and quality of quarterly performance reports, due to the

inherent control weaknesses in the performance management system.

13.4 Evaluation of Financial Statements and Annual Performance Report

The Audit Committee has:

• Reviewed and discussed the unaudited annual financial statements to be included in the annual report with

management;

• Reviewed and discussed the unaudited information on pre-determined objectives to be included in the annual

report with management;

• Reviewed for changes in accounting policies and practices;

• Advised management that the financial statements and performance report may not be free from material

misstatements due to the failure of internal controls during the preparation process;

• Reviewed the Department’s compliance with legal and regulatory provisions.

83

Based on the Audit Committee’s review of the annual financial statements the Committee resolved that they be

recommended for submission to the Auditor General South Africa for auditing. Based on the Audit Committee’s review

of the information on predetermined objectives, the Committee resolved that the report be recommended for

submission to the Auditor General South Africa for auditing, but due to weaknesses in the control environment the

information may not be free from material misstatement.

13.4 Internal Audit

Implementation of the Quality Assurance Improvement Program (QAIP) by internal audit based on the Quality

Assurance Review performed by the Institute of Internal Auditors has initially been slow, however by year end the plan

has been updated and is now being implemented. The Internal Audit function is now capacitated internally with a few

vacancies, which will be filled in the 2020/21 financial year. The implementation of internal audit findings by

management will remain a focus area moving forward.

The internal audit function performed the following audits during the year:

1. Review of AFS 18/19

2. Annual Performance Report Review 18/19

3. Debt Management

4. Performance Management and Development Systems

5. Communication Management

6. Revenue Management

7. Leave Management and Service Terminations

8. SCM: Contract Management

9. Performance Information (PR 3)

10. Transfer Payments - Public Entities

11. Review of Interim Financial Statements

12. Review of Strategic Plan and Annual Performance Plan 2020/2021

13. Transfer Payments - Municipalities and non- profit institutions

In the 2019/20 financial year an external service provider was appointed to lead the internal audit division for 5 months of the

financial year after which the contract expired, and the department capacitated the internal audit unit by employing staff in the

unit. The service provider commenced duties in April 2017 and the contract ended on 29 August 2019.

The audit committee has ensured that all risks in the DEDEAT risk register has been assured in the 19/20 except for the below

risks that are unassured:

• Doubtful data integrity and loss of information

• Business Interruption

• Misalignment of ICT with the organisational strategic objectives

• Recruitment & Selection – Fruitless and Wasteful Expenditure

• Recruitment & Selection – Conflict of Interest

• Organisational Development – Non-compliance with Public Service Regulations (PSR) 1/111/B:2(d)

• Injuries and Fatalities

• Failure of Co-operative enterprises

• Tourism Development – Poor service levels

• Economic Planning – Inadequate economic policy coordination

• Economic Planning – Unavailability of information and data

• Environmental Affairs – Climate Change

• Environmental Affairs – Overexploitation of environmental resources

The audit committee raises concern over the unassured risks in the department as these pose a risk over the achievement of

the department’s strategic objectives. There has been an improvement, by management, in implementing internal audit

recommendations for the 2019/20 financial year, however there still room for improvement.

13.6 Risk Management

The Head of Department established the Risk Management Committee (RMC) to exercise certain responsibilities, as set

out in the approved RMC Terms of Reference.

The RMC is chaired by an external Chairperson who brings a lot of valuable experience in Governance matters.

84

The RMC reviewed risk management processes during the year. The following policy related documents on Risk Management

were approved, such as, Risk Management Policy, Risk Appetite Framework, 2019/20 Risk Assessment Report and the Risk

Management Implementation Plan. The Fraud Prevention Plan and Business Continuity Plan are yet to be completed and

approved.

There is a fraud hotline in place that the department communicates through all its internal and external communication

strategies. There is concern over the non-functioning of this fraud hotline as tests conducted yielded unfavourable results from

the Office of the Premier (OTP).

The Head of Department committed management of the Department to comply with all relevant Corporate Governance

processes. Risk management and Internal Audit of the department reports at an appropriate level (administratively report to

the Head of Department and functionally to the Audit Committee).

All governance structures were established, such as Risk Management and IT Governance Committees.

There has been a noticeable deterioration in risk management in the Department in the current year. Meetings have not been

held timely, reports have been submitted late or not at all and attendance at meetings by management is poor.

For risk management maturity of the Department to improve, it is critical that recommendation made by the RMC are

implemented timely by management, risk management processes are prioritised, and effective monitoring of implementation

take place.

13.7 ICT Governance

The Committee continued its focus on the Department’s Information and Communication Technology (ICT)

environment which included the review of the ICT Governance policy framework and Strategy. The Corporate

Governance of ICT Policy Framework has been reworked into a Departmental Corporate Governance of ICT Policy

Framework (CGICT) for implementation in the Department and is in its second phase of implementation. The first phase

covers, creating an enabling environment which addresses the development of policies, structures, the allocation of

accountability and responsibility for the implementation of CGICT. The second phase focusses on the business and ICT

strategic alignment.

The Business Continuity Plan (BCP) has been developed in the 2019/2020 financial year. The department is in the process

of validating the approved BCP. The department has an approved Disaster Recovery Plan that has not been tested in

the current year but to mitigate the fact that testing has not been done the department has migrated mission critical

systems (eVaya/Email Exchange online/Data Storage/Share Point) to the cloud to make sure that the system failure is

minimised and the system availability is maximised as a Disaster Recovery Plan by year end. Furthermore, DEDEAT has

also implemented cloud-based systems to enable remote access and remote working by staff-members and these

include Microsoft Teams and as well as SharePoint for management of documents and files. The department has also

implemented enhanced security Multifactor Authentication which strengthens use of access to the system.

The ICT Steering committee has been established and has been effective with a new chairperson of the committee

overseeing the monitoring of all ICT related matters.

13.8 Auditor-General South Africa

The Audit Committee has met with the Auditor General of South Africa to discuss the Audit Strategy at the

commencement of the audit and has meet with the Chairperson at the conclusion of the audit to ensure that there are

no unresolved issues. The Audit Committee concurs with the conclusions reached by the Auditor General.

Appreciation

The Audit Committee expresses its sincere appreciation to the Executive Authority, Accounting Officer, AGSA,

Management, and internal audit for their support and co-operation.

__________________________________________________

Mrs T Cumming

Audit Committee Chairperson

13 October 2020

85

14. B-BBEE COMPLIANCE PERFORMANCE INFORMATION

The following table has been completed in accordance with the compliance to the BBBEE requirements of the BBBEE

Act of 2013 and as determined by the Department of Trade and Industry.

Has the Department / Public Entity applied any relevant Code of Good Practice (B-BBEE Certificate Levels 1 –

8) with regards to the following:

Criteria Response

Yes / No

Discussion

(include a discussion on your response and indicate what

measures have been taken to comply)

Determining qualification criteria for the

issuing of licences, concessions or other

authorisations in respect of economic

activity in terms of any law?

No

Developing and implementing a

preferential procurement policy?

Yes In line with Preferential Procurement Regulation,2017

Determining qualification criteria for the

sale of state-owned enterprises?

No

Developing criteria for entering into

partnerships with the private sector?

No

Determining criteria for the awarding of

incentives, grants and investment

schemes in support of Broad Based

Black Economic Empowerment?

Yes Through Local Regional Economic Development

Programme (LRED)

86

1 INTRODUCTION

People are a key element in achieving the strategic objectives of the department. It is through their efforts that the

mandate of the department is realised and that value-adding services are provided to citizens. In order to ensure

sustained improvement in the way the department conducts its business, it is important that suitable people, with the

appropriate skills, competence and understanding of the provincial and departmental service delivery approach, are

employed.

Planning for the consistent availability of the appropriate skills, at the right place and at the right time is often complex,

as the department must contend with increasing budgetary constraints and dire skills shortages, especially in the highly

technical and specialised occupations.

By means of workforce planning the Department has identified the current and future workforce needs and flagged the

potential challenges that could impact on the achievement of the Department’s strategic objectives.

To consistently deliver on our mandate as a Department and improve services to the citizens of the Eastern Cape

Province is not without its challenges. In addition, the modern HR management landscape has shifted significantly in

recent years and requires complex navigation between a range of competing variables as we move from “HR

Management” to “People Management”.

Not only are these variables inter-dependent and inter-related, but they are also governed by stringent rules and

regulations found in a plethora of legislation, which prove difficult when recruitment, retention and attraction initiatives

are explored.

The challenges include balancing service delivery imperatives, the attraction and retention of critical and scarce skills,

employee empowerment, career management, succession planning, employment equity and creating an enabling

environment where employees are able to thrive. Further to this, the Department is required to function within a

constrained fiscal environment, which demands that managers consider the impact of “doing more with less”.

Despite the changing patterns and demands impacting on the modern workplace, the consistent hard work of our

employees, has resulted in some remarkable achievements and service delivery improvements during the year under

review.

Legislation that governs human resource management

The information provided in Part D is prescribed by the Public Service Regulations. In addition to the Public Service

Regulations, the following prescripts direct HR Management within the Public Service:

Legislation Purpose

Occupational Health and Safety Act

(Act 85 of 1993), as amended

To provide for the health and safety of persons at work and for the health and safety

of persons in connection with the use of plant and machinery; the protection of

persons other than persons at work against hazards to health and safety arising out of

or in connection with the activities of persons at work; to establish an advisory council

for occupational health and safety; and to provide for matters connected therewith.

Public Service Act (Act 103 of 1994), as

amended

To provide for the organisation and administration of the public service of the

Republic, the regulation of the conditions of employment, terms of office, discipline,

retirement and discharge of members of the public service, and matters connected

therewith.

Labour Relations Act (Act 66 of 1995),

as amended

To regulate and guide the employer in recognising and fulfilling its role in effecting

labour peace and the democratisation of the workplace; as well as to provide a

framework in which employees and their trade unions, employers and employer

organisations can bargain collectively and formulate industrial policy; and to promote

orderly collective bargaining (also at sectoral level), employee participation in

decision-making in the workplace (i.e. the establishment of workplace forums) and the

effective resolution of labour disputes.

Basic Conditions of Employment Act

(Act 75 of 1997), as amended

To give effect to the right to fair labour practices referred to in section 23(1) of the

Constitution by establishing and making provision for the regulation of basic

conditions of employment; and thereby to comply with the obligations of the Republic

as a member state of the International Labour Organisation; and to provide for matters

connected therewith.

88

Legislation Purpose

Skills Development Act (Act 97 of

1998), as amended

To provide an institutional framework to devise and implement national, sector and

workplace strategies to develop and improve the skills of the South African workforce;

to integrate those strategies within the National Qualifications Framework

contemplated in the South African Qualifications Authority Act, 1995; to provide for

Iearnerships that lead to recognised occupational qualifications; to provide for the

financing of skills development by means of a levy-grant scheme and a National Skills

Fund; to provide for and regulate employment services; and to provide for matters

connected therewith.

Employment Equity Act (Act 55 of

1998), as amended

To promote equality, eliminate unfair discrimination in employment and to ensure the

implementation of employment equity measures to redress the effects of unfair

discrimination; to achieve a diverse and efficient workforce broadly representative of

the demographics of the province.

Public Finance Management Act (Act 1

of 1999), as amended

To regulate financial management in the national government and provincial

governments; to ensure that all revenue, expenditure, assets and liabilities of those

governments are managed efficiently and effectively; to provide for the responsibilities

of persons entrusted with financial management in those governments; and to provide

for matters connected therewith.

Skills Development Levy Act (Act 9 of

1999), as amended

To provide for the imposition of a skills development levy; and for matters connected

therewith.

Promotion of Access to Information

Act (Act 2 of 2000), as amended

To give effect to the constitutional right of access to any information held by the State

and any information that is held by another person and that is required for the exercise

or protection of any rights; and to provide for matters connected therewith.

Promotion of Administrative Justice

Act (Act 3 of 2000) (PAJA), as amended

To give effect to the right to administrative action that is lawful, reasonable and

procedurally fair and to the right to written reasons for administrative action as

contemplated in section 33 of the Constitution of the Republic of South Africa, 1996;

and to provide for matters incidental thereto.

Protection of Personal Information Act To give effect to the protection of personal information by public and private bodies.

2 OVERVIEW OF HUMAN RESOURCES

2.1 Vacancy rate

At the end of the 2019/20 financial year, the Department had an apparent overall vacancy rate of 25,1%. Whilst this is

an improvement on the 28,5% vacancy rate reported during the 2018/19 financial year, the vacancy rate is not a true

reflection on the actual number of vacant funded posts in the Department. The Department is still in the process of

implementing the approved 2018 Organisational Structure and has more than 140 employees currently in “excess” to

the approved structure, whilst there are still vacant posts on the approved establishment. The number of “excess”

employees, when added to the approved establishment, increases the total number of posts, hence the high reported

vacancy rate. Some of these “excess” employees are still to undergo the placement process. Once this has been finalised,

the reported vacancy rate will be reduced. The vacancy rate will be further reduced with the implementation of the 2020

Annual Recruitment Plan, which contains 54 posts to be filled.

There has been an improvement in the turn-around times for the filling of vacancies. There have been positions that

were filled within an average of 3 months instead of the 6 months as required by the DPSA and OTP. This is despite the

challenges experienced along the way such as budget cuts on compensation of employees, centralisation of some of

functions related to Recruitment and Selection as well labour instability. Ensuring equitable representation of the

workforce, particularly at SMS, and employment of persons with disabilities has been, and is still, a challenge to be

addressed by developing intervention strategies in this regard.

2.2 Age profile

The average age of employees within the Department is 44 years. Although 34,3% of the Department is younger than

40 years of age, a growing number of staff (18,8%) are falling into the 55-65 year age group and approximately 2,74%

are nearing retirement. Planning in this regard is important in order to mitigate the risk of losing critical institutional

memory and knowledge. The Department’s HR Plan discusses our plans to deal with this.

89

2.3 Internship Programmes

The Department created learning opportunities for 24 unemployed graduates through the Internship Programme and

provided these graduate interns with requisite workplace experience. A further 7 learners gained experiential learning

as part of their course work. The 24 interns comprised 4,6% of the total number of employees remunerated over the

period.

2.4 Sick Leave

The utilisation of sick leave is monitored closely to ensure that:

• Service delivery continues unabated

• Wellness initiatives have the desired workforce impact

• Employees receive the required employer support

• There is full compliance with legislation and policy determinations governing sick leave usage.

There does not appear to be a general tendency of abuse of sick leave in the Department and there are a relatively low

number of employees applying for incapacity leave.

2.5 Employee health and wellness

The Department recognise the benefits of investing in the wellness of their employees. Employee wellness is important

for the Department’s success and as such, the Department is becoming more aware of the impact of wellness and its

benefits on the business, allowing wellness to become recognised as a strategic issue, which requires a strategic and

integrated approach to wellness to be adopted.

The wellness benefits that the Department offers are appreciated by employees as it positively impacts their health and

well-being and creates long-term value for the Department. Increasingly, research suggests that employers can reduce

costs by investing in the health and well-being of their employees. This includes both the direct costs of providing

healthcare and indirect costs, such as absenteeism and reduced productivity.

The DPSA has investigated the health needs of employees in the public administration which was followed by the

development of interventions and initiatives in the Employee Health & Wellness strategy which has been be adopted

by DEDEAT for implementation. This adopted strategy is underpinned by four functional pillars namely:

• HIV and TB Management in the workplace: Prevention, Treatment, Care and Support, Monitoring and

Research.

• Health and Productivity Management: Disease Management and Chronic illness, Mental

Health/Psychosomatic Illnesses, Injury on Duty and Incapacity due to ill health.

• SHERQ (Safety, Health, Environment, Risk and Quality): Occupational Health and Safety, Environmental

Management, Risk and Quality Management.

• Wellness Management: Promotion of the physical, social, emotional, occupational, spiritual and intellectual

wellness of employees.

The EHW Programme is monitored in the Department through monthly and quarterly utilisation reports for primary

and secondary services. Furthermore, on-going reporting to the DPSA is a requirement and such reporting focuses on

the four functional pillars mentioned above.

2.6 HR administration

There has been a vast improvement in compliance management and accountability in the Corporate Management

component which has led to quality mandatory reports being submitted to the Office of the Premier on a regular basis

or as and when required.

There has also been a noticeable improvement in the management and processing of employee benefits, especially

pension pay-outs. Pension pay-outs are now (on average) being received by former employees within 30 days of

processing.

90

The management of leave has been prioritized in order to improve monitoring and control thereof.

The unavailability of the proper infrastructure for the Department impacts negatively on Records Management as the

currently allocated spaces do not have suitable registry space and this calls for an urgent need to adopt paperless

mechanism.

2.7 Labour relations

Ineffective employer-employee engagement is another challenge within the Department which leads to unnecessary

disputes. In particular, this has impacted negatively and has resulted in delays in the full implementation of the approved

organisational structure, amongst other things. The bilateral meetings between individual unions and the management

have continued in order to ensure that issues of mutual interest are discussed and resolved. There is a dire need for the

resuscitation of the platform of engagement to ensure labour stability in the Department.

2.8 Performance management

The Department remained at the top position in the province in terms of contracting with more than 90% of employees

having signed contracts by the end of April 2019.The improvement was a result of several interventions such as training

and development on the application of the Performance Management and Development System (PMDS) and

consequence management for non-compliance to policy and deadlines. Payments of bonuses and pay progression

have been made. A departmental policy on PMDS and Incentive framework is the process of being developed and E-

PMDS will be launched to improve the process.

2.9 Organisational development

As already alluded to, it has been a daunting challenge to fully implement the organisational structure, which was

approved in 2018, due to disputes by organised labour. All positions in the structure were job evaluated but are now

due for evaluation and steps to evaluate them have been undertaken.

The Departmental Work-study Officers are in the process of reviewing all the Departmental job descriptions to ensure

their alignment to the Department’s mandate. It is also worth mentioning that the directorate has taken it upon

themselves to ensure the development of standard operating procedures as part of the Operations Management

Framework.

3 HUMAN RESOURCES OVERSIGHT STATISTICS

3.1 Personnel Related Expenditure

The following tables summarise the final audited personnel related expenditure by programme and by salary bands. In

particular, it provides an indication of the following:

• amount spent on personnel

• amount spent on salaries, overtime, homeowner’s allowances and medical aid.

•

Table 3.1.1 Personnel expenditure by programme for the period 1 April 2019 and 31 March 2020

Programme

Total

Expenditure

(R’000)

Personnel

Expenditure

(R’000)

Training

Expenditure

(R’000)

Professional

and Special

Services

Expenditure

(R’000)

Personnel

Expenditure

as a % of Total

Expenditure

Average

Personnel

Cost per

Employee

(R’000)

Administration 238 072 117 238 1 758 4 017 49,24 442,41

Economic

development

778 780 57 902 0 3 138 7,43 615,98

Environmental

affairs

336 714 87 823 0 230 26,08 542,11

TOTAL 1 353 566 262 963 1 758 7 385 19,42 504,72

91

Table 3.1.2 Personnel costs by salary band for the period 1 April 2019 and 31 March 2020

Salary Band

Personnel

Expenditure

(R’000)

% of Total

Personnel Cost No. of Employees

Average

Personnel Cost

per Employee

(R’000)

Skilled (Levels 3-5) 28 479 10,83 103 276,49

Highly skilled production (Levels 6-8) 90 436 34,39 208 434,79

Highly skilled supervision (Levels 9-12) 100 133 38,08 145 690,57

Senior management (Levels >= 13) 40 578 15,43 32 1,268,07

Contract (Levels 3-5) 247 0,09 7 35,35

Contract (Levels 6-8) 1 628 0,62 24 67,83

Contract (Levels 9-12) 1 107 0,42 1 1 107,43

Contract (Levels >= 13) 354 0,13 1 354,30

TOTAL 262 963 100,00 521 504,73

Note: The total of 521 employees reflected in the above tabled includes 24 interns.

Table 3.1.3 Salaries, Overtime, Homeowners Allowance and Medical Aid by programme for the period 1 April 2019 and

31 March 2020

Programme

Salaries Overtime Home Owners Allowance Medical Aid

Amount

(R’000

Salaries as

a % of

Personnel

Costs

Amount

(R’000)

Overtime as

a % of

Personnel

Costs

Amount

(R’000)

HOA as a %

of

Personnel

Costs

Amount

(R’000)

Medical aid

as a % of

Personnel

Costs

Administration 94 672,00 79,00 392,00 0,30 4 105,00 3,40 6 182,00 5,20

Economic

development

44 353,00 80,20 0,00 0,00 1 461,00 2,60 2 216,00 4,00

Environmental

affairs

76 275,00 78,60 120,00 0,10 2 872,00 3,00 4 410,00 4,50

TOTAL 215 301,00 79,10 512,00 0,20 8 438,00 3,10 12 808,00 4,70

92

Table 3.1.4 Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for the period 1 April 2019 and

31 March 2020

Salary Bands

Salaries Overtime Home Owners

Allowance Medical Aid

Amount

(R’000

Salaries as a

% of

Personnel

Costs

Amount

(R’000)

Overtime as

a % of

Personnel

Costs

Amount

(R’000)

HOA as a %

of

Personnel

Costs

Amount

(R’000)

Medical Aid

as a % of

Personnel

Costs

Skilled (Levels 3-5) 21 305,00 73,90 98,00 0,30 1 743,00 6,00 2 875,00 10,00

Highly skilled

production (Levels

6-8)

71 496,00 78,00

224,00 0,20 3 504,00 3,80 5 995,00 6,50

Highly skilled

supervision (Levels

9-12)

83 646,00 79,60 185,00 0,20 2 325,00 2,20 3 659,00 3,50

Senior management

(Levels >= 13)

35 586,00 82,40 0,00 0,00 865,00 2,00 278,00 0,60

Contract (Levels 3-

5)

250,00 98,80 0,00 0,00 0,00 0,00 0,00 0,00

Contract (Levels 6-

8)

1 642,00 98,30 4,00 0,20 0,00 0,00 0,00 0,00

Contract (Levels 9-

12)

1 038,00 91,80 0,00 0,00 0,00 0,00 0,00 0,00

Contract (Levels >=

13)

337,00 90,10 0,00 0,00 0,00 0,00 0,00 0,00

TOTAL 215 301,00 79,10 512,00 0,20 8 438,00 3,10 12 808,00 4,70

3.2 Employment and Vacancies

The tables in this section summarise the position with regard to employment and vacancies, showing the number of

posts on the establishment, the number of employees, the vacancy rate, and whether there are any staff that are

additional to the establishment.

This information is presented in terms of three key variables:

• programme

• salary band

• critical occupations

Table 3.2.1 Employment and vacancies by programme as on 31 March 2020

Programme

Number of Posts

on Approved

Establishment

Number of Posts

Filled Vacancy Rate

Number of Employees

Additional to the

Establishment

Administration 336 265 21,10 31

Economic development 134 94 29,90 0

Environmental affairs 226 162 28,30 0

TOTAL 696 521 25,10 31

As a result of the approved 2018 organisational structure that has not yet been fully implemented the indicated vacancy

rate is higher than the actual vacancies on the approved structure. The department currently has over 140 employees

who are “in excess” of the approved structure but are included in the approved establishment of 696 reflected above,

hence the high vacancy rate.

93

Table 3.2.2 Employment and vacancies by salary band as on 31 March 2020

Salary band

Number of Posts

on Approved

Establishment

Number of Posts

Filled Vacancy Rate

Number of Employees

Additional to the

Establishment

Skilled (Levels 3-5), Permanent 113 103 8,80 0

Highly Skilled Production (Levels

6-8), Permanent

311 208 33,10 0

Highly Skilled Supervision (Levels

9-12), Permanent

201 145 27,90 0

Senior Management (Levels >=

13), Permanent

38 32 15,80 0

Contract (Levels 3-5), Permanent 7 7 0,00 7

Contract (Levels 6-8), Permanent 24 24 0,00 24

Contract (Levels 9-12),

Permanent

1 1 0,00 0

Contract (Levels >= 13),

Permanent

1 1 0,00 0

TOTAL 696 521 25,10 31

94

Table 3.2.3 Employment and vacancies by critical occupations as on 31 March 2020

Critical Occupations Number of

Posts

Number of

Posts

Vacancy

Rate

Number of

Posts Filled

Additional to

the

Establishment

Administrative related 20 10 50.00 0

Agricultural, animal, oceanography, forestry & other

sciences 122 87 28.69

0

Agriculture related 2 2 0.00 0

Bus and heavy vehicle drivers 9 8 11.11 0

Cleaners in offices workshops hospitals etc. 17 16 5.88 0

Client inform clerks (switchboard, reception, information

clerks) 4 2 50.00

0

Communication and information related 1 1 0.00 0

Conservation labourers 1 1 0.00 0

Economists 5 2 60.00 0

Engineering sciences related 1 1 0.00 0

Finance and economics related 6 4 33.33 0

Financial and related professionals 37 25 32.43 0

Financial clerks and credit controllers 14 13 7.14 0

Head of department/chief executive officer 1 1 0.00 0

Human resources & organisational development & related

professions 13 12 7.69

0

Human resources clerks 32 29 9.38 0

Human resources related 15 5 66.67 0

Information technology related 5 3 40.00 0

Language practitioners interpreters & other communication 3 2 33.33 0

Library mail and related clerks 2 2 0.00 0

Light vehicle drivers 1 1 0.00 0

Logistical support personnel 18 17 5.56 0

Material-recording and transport clerks 1 1 0.00 0

Nature conservation and oceanographical related

technicians 8 7 12.50

0

Other administration & related clerks and organisers 148 93 37.16 0

Other administrative policy and related officers 9 9 0.00 0

Other information technology personnel. 3 3 0.00 0

Other occupations 41 40 2.44 31

Regulatory inspectors 5 4 20.00 0

Secretaries & other keyboard operating clerks 30 25 16.67 0

Security officers 24 24 0.00 0

Senior managers 37 32 16.22 0

Trade/industry advisers & other related profession 61 40 34.43 0

TOTAL 696 521 25.14 31

95

3.3 Filling of SMS Posts

Table 3.3.1 SMS post information as on 31 March 2020

SMS Level

Total number of

funded SMS

posts

Total

number of

SMS posts

filled

% of SMS posts

filled

Total

number of

SMS posts

vacant

% of SMS

posts

vacant

Director-General/ Head

of Department 1 1 100,00 0 0,00

Salary Level 16 0 0 0 0 0


Salary Level 14 4 2 75,00 2 50,00

Salary Level 13 32 29 87,88 3 9,34

TOTAL 37 32 86,84 5 13,51

Table 3.3.2 SMS post information as on 30 September 2019

SMS Level

Total number of

funded SMS

posts

Total

number of

SMS posts

filled

% of SMS posts

filled

Total

number of

SMS posts

vacant

% of SMS

posts

vacant


of Department 1 1 100,00 0 0



Salary Level 14 4 3 75,00 1 0,25

Salary Level 13 32 30 93,75 2 6,25

Total 37 35 95,59 3 4,41

Table 3.3.3 Advertising and filling of SMS posts for the period 1 April 2019 and 31 March 2020

SMS Level

Advertising Filling of Posts

Number of vacancies per

level advertised in 6

months of becoming

vacant

Number of vacancies

per level filled in 6

months of becoming

vacant

Number of vacancies

per level not filled in

6 months but filled in

12 months

Director-General/ Head of

Department 1

0 1

Salary Level 16 0 0 0




Total 5 0 1

Table 3.3.4 Reasons for not having complied with the filling of funded vacant SMS – Advertised within 6 months and

filled within 12 months after becoming vacant for the period 1 April 2019 and 31 March 2020

Reasons for vacancies not advertised within six months

Vacancies were advertised within stipulated 6 months of becoming vacant

Reasons for vacancies not filled within twelve months

N/A

(See Public Service Regulations Chapter 1, Part VII C.1A.3).

96

Table 3.3.5 Disciplinary steps taken for not complying with the prescribed timeframes for filling SMS posts within

12 months for the period 1 April 2019 and 31 March 2020

Reasons for vacancies not advertised within six months

N/A

Reasons for vacancies not filled within six months

N/A

(See Public Service Regulations Chapter 1, Part VII C.1A.2 and Section 16A(1) or (2) of the Public Service Ac).

3.4 Job Evaluation

The following table summarises the number of jobs that were evaluated during the year under review. The table

also provides statistics on the number of posts that were upgraded or downgraded.

Table 3.4.1 Job evaluation by salary band for the period 1 April 2019 and 31 March 2020

Salary Band

Number of

Posts on

Approved

Establishment

Number of

Jobs

Evaluated

% of Posts

Evaluated

by Salary

Bands

Posts Upgraded Posts downgraded

Number % of Posts

Evaluated Number

% of Posts

Evaluated

Skilled (Levels 3-5) 113 0 0,00 0 0,00 0 0,00

Highly Skilled

Production (Levels

6-8)

311 0 0,00 0 0,00 0 0,00

Highly Skilled

Supervision (Levels

9-12)

201 0 0,00 0 0,00 0 0,00

Senior

Management

Service Band A

33 0 0,00 0 0,00 0 0,00

Senior

Management

Service Band

B

5 0 0,00 0 0,00 0 0,00

Contract

(Levels 3-5)

7 0 0,00 0 0,00 0 0,00

Contract

(Levels 6-8)

24 0 0,00 0 0,00 0 0,00

Contract (Levels 9-

12)

1 0 0,00 0 0,00 0 0,00

Contract Band C 1 0 0,00 0 0,00 0 0,00

TOTAL 696 0 0,00 0 0,00 0 0,00

As a result of the approved 2018 organisational structure that has not yet been fully implemented the department

currently has over 140 employees who are “in excess” of the approved structure but are included in the approved

establishment of 696 reflected above. The approved organisational structure has 565 posts.

Table 3.4.2 Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1

April 2019 and 31 March 2020

Beneficiary African Asian Coloured White Total

Female 0 0 0 0 0

Male 0 0 0 0 0

TOTAL 0 0 0 0 0

Employees with a disability 0 0 0 0 0

97

Table 3.4.3 Employees with salary levels higher than those determined by job evaluation by occupation for

the period 1 April 2019 and 31 March 2020

Occupation Number of

Employees

Job

Evaluation

Level

Remuneration

level

Reason for

deviation

Administrative related 20 N/A N/A N/A

Agricultural, animal, oceanography, forestry & other

sciences

122 N/A N/A N/A

Agriculture related 2 N/A N/A N/A

Bus and heavy vehicle drivers 9 N/A N/A N/A

Cleaners in offices workshops hospitals etc. 17 N/A N/A N/A

Client inform clerks (switchboard, reception,

information clerks)

4 N/A N/A N/A

Communication and information related 1 N/A N/A N/A

Conservation labourers 1 N/A N/A N/A

Economists 5 N/A N/A N/A

Engineering sciences related 1 N/A N/A N/A

Finance and economics related 6 N/A N/A N/A

Financial and related professionals 37 N/A N/A N/A

Financial clerks and credit controllers 14 N/A N/A N/A

Head of department/chief executive officer 1 N/A N/A N/A

Human resources & organisational development &

related professions

13 N/A N/A N/A

Human resources clerks 32 N/A N/A N/A

Human resources related 15 N/A N/A N/A

Information technology related 5 N/A N/A N/A

Language practitioners, interpreters & other

communication

3 N/A N/A N/A

Library mail and related clerks 2 N/A N/A N/A

Light vehicle drivers 1 N/A N/A N/A

Logistical support personnel 18 N/A N/A N/A

Material-recording and transport clerks 1 N/A N/A N/A


technicians

8 N/A N/A N/A

Other administration & related clerks and organisers 148 N/A N/A N/A

Other administrative policy and related officers 9 N/A N/A N/A

Other information technology personnel. 3 N/A N/A N/A

Other occupations 41 N/A N/A N/A

Regulatory inspectors 5 N/A N/A N/A

Secretaries & other keyboard operating clerks 30 N/A N/A N/A

Security officers 24 N/A N/A N/A

Senior managers 37 N/A N/A N/A

Trade/industry advisers & other related profession 61 N/A N/A N/A

TOTAL 696

The “N/A” values are as a result of the Department not undertaking any job evaluations during the year under review.

98

The following table summarises the beneficiaries of the above in terms of race, gender, and disability.

Table 3.4.4 Profile of employees who have salary levels higher than those determined by job evaluation for the period 1


Beneficiary African Asian Coloured White Total

Female N/A N/A N/A N/A N/A

Male N/A N/A N/A N/A N/A

Total N/A N/A N/A N/A N/A

Employees with a disability N/A N/A N/A N/A N/A

3.5 Employment Changes

This section provides information on changes in employment over the financial year. Turnover rates provide an

indication of trends in the employment profile of the Department. The following tables provide a summary of

turnover rates by salary band and critical occupations.

Table 3.5.1 Annual turnover rates by salary band for the period 1 April 2019 and 31 March 2020

Salary Band

Number of

Employees at

Beginning of

Period-April

2019

Appointments

and Transfers

into the

Department

Terminations and

Transfers out of

the Department

Turnover Rate

Skilled (Levels 3-5) Permanent 108 0 6 5,56

Highly Skilled Production (Levels 6-8)

Permanent 230 1 13 5,65

Highly Skilled Supervision (Levels 9-12)

Permanent 141 4 12 8,51

Senior Management (Levels 13-16)

Permanent 35 1 2 5,71

Contract (Levels 3-5) Permanent 0 7 0,00

Contract (Levels 6-8) Permanent 0 24 4 0,00



TOTAL 519 39 37 7,13

Contract (Levels 3-5): Learners who are paid via Persal, but the funding is provided by the SETA

Contract (Levels 6-8): Interns

Table 3.5.2 Annual turnover rates by critical occupation for the period 1 April 2019 and 31 March 2020

Occupation

Employment at

beginning of

period-

1 April 2019

Appointments

and transfers

into the

department

Terminations

and transfers out

of the

department

Turnover Rate

Administrative related permanent 15 0 5 33,33

Agricultural, animal oceanography

forestry & other sciences, permanent 124 0 5 4,03

Agriculture related permanent 3 0 0 0,00

Bus and heavy vehicle drivers

permanent 9 0 0 0,00

Cleaners in offices workshops hospitals

etc. Permanent 18 1 4 22,22

Client inform clerks (switchboard,

reception, information clerks)

permanent

3 0 0 0,00

99

Occupation

Employment at

beginning of

period-

1 April 2019

Appointments

and transfers

into the

department

Terminations

and transfers out

of the

department

Turnover Rate

Communication and information

related permanent 1 0 0 0,00

Conservation labourers permanent 1 0 0 0,00

Economists permanent 3 0 0 0,00

Engineering sciences related permanent 1 0 0 0,00

Finance and economics related


Financial and related professionals


Financial clerks and credit controllers


Head of department/chief executive

officer permanent 1 0 1 100,00

Human resources & organisational

development & relate profession

permanent

10 1 1 10,00

Human resources clerks permanent 31 0 0 0,00

Human resources related permanent 7 0 1 14,29

Information technology related


Language practitioners, interpreters &

other communication permanent 2 0 0 0,00

Library mail and related clerks


Light vehicle drivers permanent 1 0 0 0,00

Logistical support personnel permanent 17 0 0 0,00

Material-recording and transport clerks


Natural sciences related permanent 1 0 0 0,00

Nature conservation and

oceanographical related technical

permanent

11 0 1 9,09

Other administrator & related clerks

and organisers permanent 38 0 4 10,53

Other administrative policy and related

officers permanent 12 1 1 8,33

Other information technology

personnel. Permanent 4 1 1 25,00

Other occupations permanent 3 31 1 33,33

Regulatory inspectors permanent 4 0 0 0,00

Secretaries & other keyboard operating

clerks permanent 28 0 0 0,00

Security officers permanent 25 0 2 8,00

Senior managers permanent 35 1 2 5,71

Trade/industry advisers & other related

profession permanent 54 2 3 5,56

Total 519 39 37 7,13

100

The table below identifies the major reasons why staff have left the Department.

Table 3.5.3 Reasons why staff have left the Department for the period 1 April 2019 and 31 March 2020

Termination Type Number % of Total Resignations

Death, Permanent 5 13,20

Resignation, Permanent 12 31,60

Expiry of contract, Permanent 6 15,80

Dismissal-misconduct, Permanent 1 2,60

Retirement, Permanent 13 36,80

TOTAL 37 100,00

Total number of employees who left as a % of total

employment

7,13

Table 3.5.4 Promotions by critical occupation for the period 1 April 2019 and 31 March 2020

Occupation

Employment at

Beginning of

Period (1 April

2019)

Promotions to

Another Salary

Level

Salary Level

Promotions

as a % of

Employees by

occupation

Notch

Progressions

as a % of

Employees

by

occupation

Administrative related 15 1 6,70 60,00

Agricultural, animal, oceanography forestry & other

sciences

124 0 0,00 59,70

Agriculture related 3 0 0,00 0,00

Bus and heavy vehicle drivers 9 0 0,00 100,00

Cleaners in offices workshops hospitals etc. 18 0 0,00 88,90

Client inform clerks (switchboard, reception,

information clerks)

3 0 0,00 100,00

Communication and information related 1 0 0,00 100,00

Conservation labourers 1 0 0,00 100,00

Economists 3 0 0,00 33,30

Engineering sciences related 1 0 0,00 0,00

Finance and economics related 10 0 0,00 40,00

Financial and related professionals 27 1 3,70 70,40

Financial clerks and credit controllers 15 0 0,00 86,70

Head of department/chief executive officer 1 1 100,00 0,00

Human resources & organisational development &

relate professions

10 1 10,00 70,00

Human resources clerks 31 0 0,00 93,50

Human resources related 7 2 28,60 42,90

Information technology related 2 1 50,00 50,00

Language practitioners, interpreters & other

communication-related

2 0 0,00 50,00

Library mail and related clerks 2 0 0,00 100,00

Light vehicle drivers 1 0 0,00 100,00

Logistical support personnel 17 0 0,00 100,00

Material-recording and transport clerks 1 0 0,00 100,00

Natural sciences related 1 0 0,00 100,00


technical

11 0 0,00 18,20

101

Occupation

Employment at

Beginning of

Period (1 April

2019)

Promotions to

Another Salary

Level

Salary Level

Promotions

as a % of

Employees by

occupation

Notch

Progressions

as a % of

Employees

by

occupation

Other administration & related clerks and organisers 38 0 0,00 78,90

Other administrative policy and related officers 12 1 8,30 66,70

Other information technology personnel. 4 0 0,00 75,00

Other occupations 3 0 0,00 66,70

Regulatory inspectors 4 0 0,00 100,00

Secretaries & other keyboard operating clerks 28 0 0,00 92,90

Security officers 26 0 0,00 88,50

Senior managers 35 1 3,30 0,00

Trade/industry advisers & other related profession 53 2 3,70 66,70

TOTAL 519 11 2,12 67,40

Table 3.5.5 Promotions by salary band for the period 1 April 2019 and 31 March 2020

Salary Band Employees 1

April 2019

Promotions to

another salary

level

Salary bands

promotions as

a % of

employees by

salary level

Progressions to

another notch

within a salary

level

Notch

progression as

a % of

employees by

salary bands

Skilled (Levels 3-5), Permanent 108 0 0,00 102 94,40

Highly Skilled Production

(Levels 6-8), Permanent

230 0 0,00 149 65,60

Highly Skilled Supervision

(Levels 9-12), Permanent

141 9 6,40 96 68,10

Senior Management (Levels >=

13), Permanent

35 1 2,90 0 0,00


Permanent

0 0 0,00 0 0,00


Permanent

1 0 0,00 0 0,00


Permanent

4 0 0 0 0,00

TOTAL 519 11 2,10 347 67,40

102

3.6 Employment Equity

Table 3.6.1 Total number of employees (including employees with disabilities) in each of the following occupational

categories as at 31 March 2020

Occupational Categories Male Female

Total African Coloured Indian White African Coloured Indian White

Senior Officials and

Managers 14 0 0 5 9 0 0 2 30

Professionals 102 3 3 14 114 2 0 4 242

Technicians and Associates

professionals 18 0 0 2 28 1 0 2 51

Clerks 24 1 0 0 79 2 0 4 110

Service Shop and Market

Sales Workers 16 1 0 0 10 1 0 0 28

Plant and Machine

Operators and Assemblers 9 0 0 0 0 0 0 1 10

Labourers and related

Workers 21 0 0 0 29 0 0 0 50

TOTAL 204 5 3 21 269 6 0 13 521

Table 3.6.2 - Total number of employees (incl. employees with disabilities) per occupational bands as on 31 March 2020

Occupational

Categories

Male Female Total

African Coloured Indian White African Coloured Indian White

Top Management,

Permanent 0 0 0 0 1 0 0 0 1

Senior Management,

Permanent 15 1 0 5 9 0 0 2 32

Professionally qualified

and experienced

specialists and mid-

management,

Permanent

38 1 2 8 29 0 0 1 79

Skilled technical and

academically qualified

workers, junior

management,

supervisors, foremen,

Permanent

95 2 1 8 154 4 0 10 274

Semi-skilled and

discretionary decision

making, Permanent

41 1 0 0 59 2 0 0 103

Contract (Senior

Management),

Permanent

0 0 0 0 0 0 0 0 0

Contract

(Professionally

Qualified), Permanent

1 0 0 0 0 0 0 0 1

Interns and learners 14 0 0 0 17 0 0 0 31

TOTAL 204 5 3 21 269 6 0 13 521

Employees with

disabilities 4 0 0 0 0 0 0 0 4

103

Table 3.6.3 Recruitment for the period 1 April 2019 and 31 March 2020

Occupational

Categories

Male Female Total


Senior Management,

Permanent

0 0 0 0 1 0 0 0 1


and experienced


management,

Permanent

3 0 0 0 1 0 0 0 4



workers, junior

management,


Permanent

1 0 0 0 0 0 0 0 1

Contract

(Professionally

qualified), Permanent

1 0 0 0 0 0 0 0 1

Contract (Skilled

technical), Permanent

11 0 0 0 14 0 0 0 25

Contract (Semi-skilled),

Permanent

3 0 0 0 4 0 0 0 7

TOTAL 19 0 0 0 20 0 0 0 39

Employees with

disabilities

0 0 0 0 0 0 0 0 0

Table 3.6.4 – Progression and Promotions for the period 1 April 2019 and 31 March 2020

Occupational

Categories

Male Female Total


Senior Management,

Permanent

1 0 0 0 0 0 0 0 1


and experienced


management,

Permanent

49 1 1 14 37 1 0 2 105



workers, junior

management,


Permanent

40 2 0 1 98 3 0 5 149

Semi-skilled and


making, Permanent

40 1 0 0 59 2 0 0 102

Contract (Top

Management),

Permanent

0 0 0 0 1 0 0 0 1

TOTAL 130 4 1 15 195 6 0 7 358

Employees with

disabilities

3 0 0 0 0 0 0 0 3

104

Table 3.6.5 - Terminations for the period 1 April 2019 and 31 March 2020

Occupational

Categories

Male Female Total


Senior Management,

Permanent 1 0 0 0 1 0 0 0 2


and experienced


management,

Permanent

4 0 0 2 5 0 0 0 11



workers, junior

management,


Permanent

10 0 0 0 4 0 0 0 14

Semi-skilled and


making, Permanent

3 0 0 0 3 0 0 0 6

Contract (Professionally

qualified), Permanent 3 0 0 0 1 0 0 0 4

TOTAL 21 0 0 2 14 0 0 0 37

Table 3.6.6 Disciplinary action for the period 1 April 2019 and 31 March 2020

Disciplinary

Action

Male Female Total


TOTAL

13 0 0 1 5 0 0 0 19

Table 3.6.7 Skills development for the period 1 April 2019 and 31 March 2020

Occupational

category

Male Female Total


Legislators, senior

officials and

managers

14 0 0 2 8 0 0 1 25

Professionals 28 1 1 4 32 0 0 0 66

Technicians and

associate

professionals

2 0 0 0 0 0 0 0 2

Clerks 37 1 0 0 97 0 0 0 135

TOTAL 81 2 1 6 137 0 0 1 228

Employees with

disabilities

0 0 0 0 0 0 0 0 0

105

3.7 Signing of Performance Agreements by SMS members

To encourage good performance, the Department has granted the following performance rewards during the year

under review. The information is presented in terms of race, gender, and disability, and salary bands and critical

occupations.

Table 3.7.1 Signing of Performance Agreements by SMS members as on 31 May 2019

SMS Level Total number of

funded SMS posts

Total number

of SMS

members

Total number

of signed

performance

agreements

Signed

performance

agreements as

% of total

number of

SMS members


of Department 1 1 1 100,00

Salary Level 16 0 0 0 100,00

Salary Level 15 0 0 0 100,00

Salary Level 14 3 3 3 100,00

Salary Level 13 33 31 31 100,00

TOTAL 37 35 35 100,00

Table 3.7.2 Reasons for not having concluded Performance agreements for all SMS members as on 31 May 2019

Reasons

All SMS Members have signed off their Performance Agreement as on 31 May 2019

Table 3.7.3 Disciplinary steps taken against SMS members for not having concluded Performance agreements as on 31

May 2019

Reasons

None

3.8 Performance Rewards

3.8.1 Performance rewards by race, gender and disability for the period 1 April 2019 and 31 March 2020

Race and Gender

Beneficiary Profile Cost

Number of

beneficiaries

Number of

employees

% of Total

within group

Cost

(R’000)

Average cost

per employee

(R)

African, Female 24 269 8,92 444,12 18 505,13

African, Male 13 200 6,50 268,00 20 615,21

Asian, Female 0 0 0,00 0,00 0,00

Asian, Male 0 3 0,00 0,00 0,00

Coloured, Female 0 6 0,00 0,00 0,00

Coloured, Male 0 5 0,00 0,00 0,00

White, Female 1 13 7,69 10,27 10 268,85

White, Male 3 21 14,29 63,41 21 136,50

Employees with a disability 0 4 0,00 0,00 0,00

TOTAL 41 521 7,87 785,80 19 165,84

106

Table 3.8.2 Performance rewards by salary band for personnel below Senior Management Service for the period 1


Salary Band

Beneficiary Profile Cost Total cost as

a % of the

total

personnel

expenditure

Number of

beneficiaries

Number

of

employee

s

% of Total

within

salary

bands

Total cost

(R’000)

Average

cost per

employee

(R)

Skilled (Levels 3-5) 15 103 14,56 237,23 15 815,09 0,83

Highly Skilled Production (Levels

6-8) 12 208 5,77 167,44 13 953,23 0,19

Highly Skilled Supervision (Levels

9-12) 13 145 8,97 341,58 26 275,76 0,34

Contract (Levels 3-5) 0 7 0,00 0,00 0,00 0,00

Contract (Levels 6-8) 0 24 0,00 0,00 0,00 0,00

Contract (Levels 9-12) 0 1 0,00 0,00 0,00 0,00

TOTAL 40 488 8,20 746,25 18 656,25 0,34

Table 3.8.3 Performance rewards by critical occupation for the period 1 April 2019 and 31 March 2020

Critical Occupation


Number of

beneficiaries

Number of

employees

% of Total

within

occupation

Total cost (R) Average cost

per employee

Financial clerks and credit

controllers 3 14 21,43 43 414 14 471,48

Human resources clerks 4 29 13,79 56 898 14 224,52

Security officers 5 24 20,83 85 485 17 097,10

Human resources & organisational

development & related

professionals

0 12 0,00 0,00 0,00

Logistical support personnel 2 17 11,76 25 009 12 504,47

Finance and economics related 1 8 12,50 25 047 25 046,85

Natural sciences related 0 1 0,00 0,00 0,00

Other administration & related

clerks and organisers 3 33 9,09 42 098 14 032,80

Other occupations 1 33 3,03 32 674 32 673,78

Nature conservation and

oceanographical related.technical 1 10 10,00 17 654 17 654,10

Agriculture, animal, oceanography

forestry & other sciences 8 118 6,78 215 015 26 876,89

Financial and related professionals 1 26 3,85 13 657 13 657,20

Administrative related 2 11 18,18 33 050 16 525,07

Communication and information

related 0 1 0,00 0,00 0,00

Secretaries & other keyboard

operating clerks 3 28 10,71 59 422 19 807,28

Cleaners in offices workshops

hospitals etc. 1 16 6,25 7 480 7 479,75

Library mail and related clerks 0 2 0,00 0,00 0,00

Human resources related 1 7 14,29 27 415 27 415,20

Trade/industry advisers & other

related profession 1 54 1,85 13 657 13 657,20

Head of department/chief

executive officer 0 1 0,00 0,00 0,00

Language practitioners,

interpreters & other

communication officers

0 2 0,00 0,00 0,00

107

Critical Occupation


Number of

beneficiaries

Number of

employees

% of Total

within

occupation

Total cost (R) Average cost

per employee

Regulatory inspectors 1 4 25,00 16 881 16 881,45

Material-recording and transport

clerks 0 1 0,00 0,00 0,00

Other administrative policy and

related officers 0 12 0,00 0,00 0,00

Bus and heavy vehicle drivers 1 9 11,11 9 213 9 212,55

Senior managers 1 29 3,45 39 549 39 549,45

Client inform clerks (switchboard,

reception, information clerks) 0 3 0,00 0,00 0,00

Economists 0 3 0,00 0,00 0,00

Other information technology

personnel. 0 4 0,00 0,00 0,00

Light vehicle drivers 0 1 0,00 0,00 0,00

Engineering sciences related 0 1 0,00 0,00 0,00

Conservation labourers 0 1 0,00 0,00 0,00

Information technology related 1 3 33,33 22 179 22 179,36

Agriculture related 0 3 0,00 0,00 0,00

TOTAL 41 521 7,87 785 799 19 165,84

Notes: The CORE classification, as prescribed by the DPSA, was used for completion of this table.

Table 3.8.4 Performance related rewards (cash bonus), by salary band for senior management for the period 1


Salary Band

Number

of

Beneficiari

es

Number

Of

Employees

% Of Total

Within

Salary

Band

Total Cost

(R)

Average

Cost Per

Employee

(R)

Total Cost

As A % Of

The Total

Personnel

Expenditu

re

Personnel

Cost SMS

(R'000)

Band A 1 29 3,40 39 549,45 39 549.45 0.10 35,266

Band B 0 3 0,00 0,00 0,00 0.00 5,920

Band C 0 1 0,00 0,00 0,00 0.00 374

Band D 0 0 0,00 0,00 0,00 0.00 2,010

TOTAL 1 33 3,00 39 549,45 39 549,45 0.10 43,570

3.9 Foreign Workers

The tables below summarise the employment of foreign nationals in the Department in terms of salary band and

major occupation.

Table 3.9.1 Foreign workers by salary band for the period 1 April 2019 and 31 March 2020

Salary Band 01 April 2019 31 March 2020 Change

Number % of Total Number % of Total Number % Change

Highly skilled production (Lev. 6-

8) 0 0 0 0 0 0

Highly skilled supervision (Lev.

9-12) 0 0 0 0 0 0

Contract (Level 9-12) 0 0 0 0 0 0

Contract (Level 13-16) 0 0 0 0 0 0

TOTAL 0 0 0 0 0 0

108

Table 3.9.2 Foreign workers by major occupation for the period 1 April 2019 and 31 March 2020

Major Occupation 01 April 2019 31 March 2020 Change

Number % of Total Number % of Total Number % Change

N/A 0 0 0 0 0 0

3.10 Leave Utilisation

The Public Service Commission identified the need for careful monitoring of sick leave within the public service.

The following tables provide an indication of the use of sick leave and disability leave. In both cases, the estimated

cost of the leave is also provided.

Table 3.10.1 Sick leave for the period 1 January 2019 and 31 December 2019

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)

Contract (Levels 3-5) 2 0,00 1 0,20 2 0,00

Contract (Levels 6-8) 17 29,40 8 1,70 2 7,00

Highly skilled production

(Levels 6-8)

1 875 70,50 205 43,90 9 2 880,00

Highly skilled supervision

(Levels 9-12)

1 082 74,10 133 28,50 8 2 782,00

Senior management

(Levels 13-16)

177 81,90 20 4,30 9 781,00

Skilled (Levels 3-5) 1 014 73,10 100 21,40 10 934,00

TOTAL 4 167 72,40 467 100,00 9 7 384,00

Table 3.10.2 Disability leave (temporary and permanent) for the period 1 January 2019 and 31 December 2019

Salary Band Total

Days

% Days with

Medical

Certification

Number

of

Employees

using

Disability

Leave

% of Total

Employees

using

Disability

Leave

Average

Days per

Employee

Estimated

Cost

(R’000)

Highly skilled production

(Levels 6-8)

92 100,00 2 33,30 46 125,00

Highly skilled supervision

(Levels 9-12)

28 100,00 2 33,30 14 82,00

Skilled (Levels 3-5) 208 100,00 2 33,30 104 189,00

TOTAL 328 100,00 6 100,00 55 395,00

The table below summarises the utilisation of annual leave. The wage agreement concluded with trade unions in

the PSCBC in 2000, requires the management of annual leave to prevent high levels of accrued leave being paid at

the time of termination of service.

109

Table 3.10.3 Annual leave for the period 1 January 2019 and 31 December 2019

Salary Band Total Days

Taken

Number of

Employees

using annual

leave

Average

Days per

Employee

Contract (Levels 3-5) 36 6 6



Highly skilled production (Levels 6-8) 5 473,00 226 24

Highly skilled supervision (Levels 9-12) 3 718,00 152 24

Senior management (Levels 13-16) 740 34 22

Skilled (Levels 3-5) 2 726,00 108 25

TOTAL 12 852,00 551 23

Table 3.10.4 Capped leave for the period 1 January 2019 and 31 December 2019

Salary Band Total Days of Capped Leave Taken

Number of

Employees

Using

Capped

Leave

Average

number of

days taken

per

Employee

Average

Capped

leave per

employee

as on 31

Dec 2018

Highly skilled production (Levels 6-8) 2 2 1 92

Highly skilled supervision (Levels 9-

12)

18 4 5 83

Senior management (Levels 13-16) 0 0 0 96

Skilled (Levels 3-5) 4 1 4 74

TOTAL 24 7 3 83

The following table summarise payments made to employees as a result of leave that was not taken.

Table 3.10.5 Leave pay-outs for the period 1 April 2019 and 31 March 2020

Reason

Total Estimated

Amount

(R’000)

Number of

Employees

Average

Payment per

Employee (R)

Annual - discounting with resignation (work days) 902.00 12 75 167,00

Annual - discounting: unused vac credits (suspension) 191.00 1 191 000,00

Annual - gratuity: death/retirement/medical retirement

(work days)

534.00 13 41 077,00

Capped - gratuity: death/retirement/medical retirement

(work days)

1 907.00 11 173 364,00

TOTAL 3 534.00 37 95 513.75

110

3.11 HIV/AIDS & Health Promotion Programmes

Table 3.11.1 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)

Key Steps Taken to Reduce the Risk

Learners and Interns The Department conducted quarterly Health

Screening sessions which included HIV Counselling

and Testing and commemoration of World Aids

Day, whereby informative content was shared.

Table 3.11.2 Details of health promotion and HIV/AIDS programmes (tick the applicable boxes and

provide the required information)

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.

√ Ms Mbalentle Mlokothi

2. Does the Department have a dedicated unit,

or has it designated specific staff members, to

promote the health and well-being of

employees? If so, indicate the number of

employees who are involved in this task and

the annual budget that is available for this

purpose.

√ 1 employee

R159.148.00

3. Has the Department introduced an Employee

Assistance or Health Promotion Programme

for employees? If so, indicate the key

elements/services of this Programme.

√ Awareness sessions on personal Finance

management.

Assess and referee employees and their

dependants with psychosocial stressors

for therapeutic sessions.

Awareness sessions on management of

communicable and non-communicable

diseases.

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.

√ a) T. Rorwana - Global Life Building

b) T. Tokwe - Joe Gqabi Region

c) N. Nyatela - Global Life Building

d) S. Mtongana - Joe Gqabi Region

e) B. Peter Std Bank & Canteen.

f) N. Tsere - Joe Gqabi Region

g) T. Banzi Std Bank & Canteen

h) D. Rademeyer - Sarah Baartman

Region

i) S. Mgudlwa - Phalo House &

Amalinda

j) N. Snayers - Sarah Baartman Region

k) Z.V. Gule - Phalo House & Amalinda

l) S. Gwayi - OR Tambo Region

m) S. Sadayile - Phalo House&

Amalinda

n) N. Mampofu - OR Tambo Region

o) M. Twani - Amathole Region

p) S. Qongqo - OR Tambo Region

q) H. Hanise - Amathole Region

r) N. Magugu - Alfred Nzo Region

s) T. Gqamane - Amathole Region

t) B. Vena - Alfred Nzo Region

u) A. Velembo - Chris Hani Region

111

Question Yes No Details, if Yes

v) S. Tukutezi - Alfred Nzo Region

w) V. Banzi - Chris Hani Region

x) N. Zingani - Secretariat

y) B. Mntamo - Chris Hani Region

z) M. Mlokothi – Senior Manager: HR

aa) L. Mardon - Environmental Affairs

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

√ HIV&AIDS, TB and STI Management

Policy

Health and Productivity Management

Policy

Wellness Management Policy

SHERQ Management Policy

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.

√ The department organised a talk on

stigma and discrimination during Wold

Aids Day Commemoration.

The Department also developed

HIV/AIDS, TB and STI Management

Policy to deal with issues of stigma and

discrimination

7. Does the Department encourage its

employees to undergo voluntary counselling

and testing? If so, list the results that have you

achieved.

√ 23% of employees tested for HIV and

know their status.

8. Has the Department developed

measures/indicators to monitor & evaluate the

impact of its health promotion programme? If

so, list these measures/indicators.

√ Internal Audit is monitoring

implementation of EHW Policies and

compliance with legislation

3.12 Labour Relations

Table 3.12.1 Collective agreements for the period 1 April 2019 and 31 March 2020

Subject Matter Date

None

The following table summarises the outcome of disciplinary hearings conducted within the Department for the year

under review.

Table 3.12.2 Misconduct and disciplinary hearings finalised for the period 1 April 2019 and 31 March 2020

Outcomes of Disciplinary Hearings Number % of Total

Correctional counselling 0 0

Verbal warning 0 0

Written warning 0 0

Final written warning 0 0

Suspended without pay 2 40

Fine 0 0

Demotion 0 0

Dismissal 0 0

Not guilty 1 20

Case withdrawn 2 40

TOTAL 5 100

112

Table 3.12.3 Types of misconduct addressed at disciplinary hearings for the period 1 April 2019 and 31 March 2020

Type of misconduct Number % of Total

Misuse of GG Vehicle 3 16

Unlawful removal of property and tempering with security measures 2 11

Gross insubordination and putting the department in disrepute 3 16

Failure to declare financial interests 4 21

Unauthorised absence 4 21

Insubordination – threatening the supervisor 0 0

Gross insubordination and non-compliance with prescripts: contravention of the

PFMA 0 0

Unbecoming conduct 1 5

Loss of State Property 1 5

Non-disclosure and failure to acquire permission to Trade with the State 1 5

TOTAL 19 100

Table 3.12.4 Grievances logged for the period 1 April 2019 and 31 March 2020

Grievances Number % of Total

Number of grievances resolved 11 55

Number of grievances not resolved 9 45

TOTAL 20 100

Table 3.12.5 Disputes logged with Councils for the period 1 April 2019 and 31 March 2020

Disputes Number % of Total

Number of disputes upheld 1 17

Number of disputes dismissed 2 33

Number of disputes pending 3 50

TOTAL NUMBER OF DISPUTES LODGED 6 100

Table 3.12.6 Strike actions for the period 1 April 2019 and 31 March 2020

Strike action Number

Total number of persons working days lost 0

Total costs working days lost 0

Amount recovered as a result of no work no pay (R’000) 0

Table 3.12.7 Precautionary suspensions for the period 1 April 2019 and 31 March 2020

Precautionary suspensions Number

Number of people suspended 0

Number of people whose suspension exceeded 30 days 0

Average number of days suspended 0

Cost of suspension (R’000) 0

113

3.13 Skills Development

This section highlights the efforts of the Department with regard to skills development.

Table 3.13.1 Training needs identified for the period 1 April 2019 and 31 March 2020

Occupational

Category Gender

Number

of

Employees

as at 1

April 2019

Training Needs Identified at Start of the Reporting Period

Learnerships

Skills

Programmes

& Other

Short

Courses

Training

Other

Forms

of

Training

Total

Legislators, senior

officials and

managers

Female 12 0 6 3 12 21

Male 21 0 6 4 21 31

Professionals Female 120 0 8 5 58 71

Male 122 0 13 9 87 109

Technicians and

associate

professionals

Female 31 0 2 1 4 7

Male 20 0 2 1 5 8

Clerks Female 85 0 35 10 182 227

Male 25 0 15 7 89 111

Plant and machine

operators and

assemblers

Female 1 0 0 0 0 0

Male 9 0 1 0 9 10

Elementary

occupations

Female 38 0 2 0 19 21

Male 35 0 2 0 20 22

Sub Total Female 287 0 53 19 275 347

Male 232 0 39 21 231 291

TOTAL 519 0 92 40 506 638

*this total excludes bursaries awarded to officials

Table 3.13.2 Training provided for the period for the period 1 April 2019 and 31 March 2020

Occupational

Category Gender

Number

of

Employees

as at 1

April 2019


Learnerships

Skills

Programmes

& Other

Short

Courses

Training

Other

Forms

of

Training

Total

Legislators, senior

officials and

managers

Female 12 0 9 1 6 16

Male 21 0 16 4 0 20

Professionals Female 120 0 32 5 7 44

Male 122 0 34 8 0 42

Technicians and

associate

professionals

Female 31 0 0 0 0 0

Male 20 0 2 0 0 2

Clerks Female 85 0 97 8 12 117

Male 25 0 38 10 0 48

Service and sales

workers

Female 0 0 0 0 0 0

Male 0 0 0 0 0 0

Skilled agriculture

and fishery worker

Female 0 0 0 0 0 0

Male 0 0 0 0 0 0

Craft and related

trades workers

Female 0 0 0 0 0 0

Male 0 0 0 0 0 0

Female 1 0 0 0 0 0

114

Occupational

Category Gender

Number

of

Employees

as at 1

April 2019


Learnerships

Skills

Programmes

& Other

Short

Courses

Training

Other

Forms

of

Training

Total

Plant and machine

operators and

assemblers

Male 9 0 0 0 0 0

Elementary

occupations

Female 38 0 0 0 13 13

Male 35 0 0 0 0 0

Sub Total Female 287 0 138 14 38 190

Male 232 0 90 22 0 112

TOTAL 519 0 228 36 38 302

3.14 Injury on Duty

The following tables provide basic information on injury on duty.

Table 3.14.1 Injury on duty for the period 1 April 2019 and 31 March 2020

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 0 0

3.15 Utilisation of Consultants

Table 3.15.1 Report on consultant appointments using appropriated funds for the period 1 April 2019 and 31 March 2020

Project Title

Total Number of

Consultants That

Worked on the

Project

Duration Contract Value in Rand

Conduct due diligence services for

LRED recommended projects [1]

1 12 months R 369,275

Appointment of a service provider

for mainstreaming climate change

1 12 Months R549,161

Conduct due diligence services for

LRED recommended projects [1]

2 6 Months R492,660

Appointment a service provider to

develop business processes

mapping for the department

2 12 Months R296,000

[1] Initially a tender was advertised, from which no suitable service provider was found. Requests for quotations were

sent out, which resulted in the appointment of a service provider who subsequently provided the department with poor

quality reports, which the department could not utilise to make final decisions on verified businesses for LRED. The

second consultant was appointed in February 2020 to perform the due diligence on LRED grant applications.

Total Number of Projects Total Individual

Consultants Total Duration

Total Contract Value in

Rand

4 6 R 1 707 096

The amount of R1.71 million represents the contracts that were awarded in the 2019/20 financial year. The difference

between this value and the R7.39 million reflected in the Annual Financial Statements for Professional and Special

Services expenditure is as a result of some projects already been awarded in the 2018/19 financial year that continued

115

into the 2019/20 financial year.

Table 3.15.2 Analysis of consultant appointments using appropriated funds, in terms of Historically

Disadvantaged Individuals (HDIs) for the period 1 April 2019 and 31 March 2020

Project Title Name of Consultant BBBEE status

(Level)

Conduct due diligence services for LRED

recommended projects

Nathi Siyakwazi Management

Consultants

1

Appointment of a service provider for

mainstreaming climate change

SRK Consulting 1

Conduct due diligence services for LRED

recommended projects

PricewaterhouseCoopers (PWC) 1

Appointment a service provider to develop

business processes mapping for the

department

Macebo Media 1

Table 3.15.3 Report on consultant appointments using donor funds for the period 1 April 2019 and 31 March 2020

Project Title

Total Number of

Consultants That

Worked on Project

Duration Work Days Donor and Contract

Value in Rand

None

Total Number of Projects Total Individual

Consultants Total uration Work Days

Total Contract Value in

Rand

None

Table 3.15.4 Analysis of consultant appointments using Donor funds, in terms of Historically Disadvantaged

Individuals (HDIs) for the period 1 April 2019 and 31 March 2020

Project Title Percentage Ownership

by HDI Groups

Percentage

Management by HDI

Groups

Number of Consultants

from HDI Groups That

Work on the Project

None

3.16 Severance Packages

Table 3.16.1 Granting of employee-initiated severance packages for the period 1 April 2019 and 31 March 2020

Salary Band

Number of

applications

received

Number of

applications

referred to

the MPSA

Number of

applications

supported by

MPSA

Number of

packages

approved by

Department

Lower skilled (Levels 1-2) 0 0 0 0

Skilled (Level 3-5) 0 0 0 0

Highly skilled production (Level 6-8) 0 0 0 0

Highly skilled supervision (Level 9-12) 0 0 0 0

Senior management (Levels 13-16) 0 0 0 0

Total 0 0 0 0

116

1. REPORT OF THE AUDITOR GENERAL

Report of the auditor-general to Eastern Cape Provincial Legislature on vote

no. 9: Department of Economic Development, Environmental Affairs and

Tourism

Report of the auditor-general to the Eastern Cape Provincial Legislature on vote no. 9: Eastern Cape


Report on the audit of the financial statements

Opinion

1 . I have audited the financial statements of the Eastern Cape Department of Economic Development,

Environmental Affairs and Tourism set out on pages 124 to 190, which comprise the appropriation

statement, statement of financial position as at 31 March 2020, statement of financial performance,

statement of changes in net assets and cash flow statement for the year then ended, as well as the notes

to the financial statements, including a summary of significant accounting policies.

2. In my opinion, the financial statements present fairly, in all material respects, the financial position of

the Eastern Cape Department of Economic Development, Environmental Affairs and Tourism as at 31

March 2020, and its financial performance and cash flows for the year then ended in accordance with

the Modified Cash Standard (MCS) prescribed by the National Treasury and the requirements of the and

the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and the Division

of Revenue Act of South Africa 2019 (Act No. 16 of 2019) (Dora).

Basis for opinion

3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities

under those standards are further described in the auditor-general's responsibilities for the audit of the

financial statements section of this auditor's report.

4. I am independent of the department in accordance with sections 290 and 291 of the Code of ethics for

professional accountants and parts 1 and 3 of the International Code of Ethics for Professional Accountants

(including International Independence Standards) of the International Ethics Standards Board for

Accountants (IESBA codes) as well as the ethical requirements that are relevant to my audit in South Africa.

I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA codes.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my

opinion.

Emphasis of matters

6. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Material underspending 7. As disclosed in the appropriation statement, the department materially underspent the current year

budget by R51,1 million.

118

Irregular expenditure

8. As per note 25.4 to the financial statements, the department disclosed R251,1 million as irregular

expenditure under assessment for transfer payments made in respect of the Provincial Economic

Stimulus Fund.

Other matters

9. I draw attention to the matter below. My opinion is not modified in respect of this matter.

Unaudited supplementary schedules

10. The supplementary information set out on pages 191 to 202 does 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 on them.

Responsibilities of the accounting officer for the financial statements 11. The accounting officer is responsible for the preparation and fair presentation of the financial

statements in accordance with the MCS and the requirements of the PFMA and Dora, and for such

internal control as the accounting officer determines is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

12. In preparing the financial statements, the accounting officer is responsible for assessing the

department's ability to continue as a going concern, disclosing, as applicable, matters relating to going

concern and using the going concern basis of accounting unless the appropriate governance structure

either intends to liquidate the department or to cease operations, or has no realistic alternative but to

do so.

Auditor-general's responsibilities for the audit of the financial statements 13. My objectives are to obtain reasonable assurance about whether the financial statements as a whole are

free from material misstatement, whether due to fraud or error, and to issue an auditor's report that

includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an

audit conducted in accordance with the ISAS will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of

these financial statements.

14. A further description of my responsibilities for the audit of the financial statements is included in the

annexure to this auditor's report.

Report on the audit of the annual performance report

Introduction and scope 15. In accordance with the Public Audit Act of South Africa 2004 (Act No. 25 of 2004) (PAA) and the general notice

issued in terms thereof, I have a responsibility to report on the usefulness and reliability of the reported

performance information against predetermined objectives for the selected programme presented in the annual

performance report. I performed procedures to identify material findings but not to gather evidence to express

assurance.

16. My procedures address the usefulness and reliability of the reported performance information, which must be

based on the approved performance planning documents of the department. I have not evaluated the

completeness and appropriateness of the performance indicators included in the planning documents. My

119

procedures do not examine whether the actions taken by the department enabled service delivery. My

procedures also do not extend to any disclosures or assertions relating to planned performance strategies and

information in respect of future periods that may be included as part of the reported performance information.

Accordingly, my findings do not extend to these matters.

17. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria

developed from the performance management and reporting framework, as defined in the general notice, for

the following selected programme presented in the annual performance report of the department for the year

ended 31 March 2020:

Programmes Pages in the annual

performance report

Programme 3 — environmental affairs 52 - 54

18.

18. I performed procedures to determine whether the reported performance information was properly presented and

whether performance was consistent with the approved performance planning documents. I performed further

procedures to determine whether the indicators and related targets were measurable and relevant, and assessed

the reliability of the reported performance information to determine whether it was valid, accurate and complete.

19. I did not identify any material findings on the usefulness and reliability of the reported performance information

for this programme:

o Programme 3 — Environmental Affairs

Other matters

20. I draw attention to the matters below.

Achievement of planned targets

21. Refer to the annual performance report on pages 50 to 53 for information on the achievement of planned

targets for the year and explanations provided for the under/over achievement of a number of targets.

Adjustment of material misstatements

22. I identified material misstatements in the annual performance report submitted for auditing. These

material misstatements were in the reported performance information of programme 3: Environmental

Affairs. As management subsequently corrected the misstatements, I did not raise any material findings on

the usefulness and reliability of the reported performance information.

Report on the audit of compliance with legislation

Introduction and scope

23. In accordance with the PAA and the general notice issued in terms thereof, I have a responsibility to report

material findings on the department's compliance with specific matters in key legislation. I performed

procedures to identify findings but not to gather evidence to express assurance.

24. The material findings on compliance with specific matters in key legislation are as follows:

Strategic planning and performance management

25. Specific information systems were not implemented to enable monitoring the progress made towards achieving targets, core objectives and service delivery, as required by public service regulation 25(1)(e)(i)and (iii).

120

Expenditure management

26. Effective and appropriate steps were not taken to prevent irregular expenditure, as required by section 38(1

)(c)(ii) of the PFMA and treasury regulation 9.1.1. All of the irregular expenditure disclosed in the financial

statements was caused by not following procurement processes.

Other information

27. The accounting officer is responsible for the other information. The other information comprises the

information included in the annual report. The other information does not include the financial statements,

the auditor's report and the selected programme presented in the annual performance report that has

been specifically reported in this auditor's report.

28. My opinion on the financial statements and findings on the reported performance information and

compliance with legislation do not cover the other information and I do not express an audit opinion or

any form of assurance conclusion thereon.

29. In connection with my audit, my responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements and the selected

programme presented in the annual performance report, or my knowledge obtained in the audit, or

otherwise appears to be materially misstated.

30. I did not receive the other information prior to the date of this auditor's report. When I do receive and read

this information, if I conclude that there is a material misstatement therein, I am required to communicate

the matter to those charged with governance and request that the other information be corrected. If the

other information is not corrected, I may have to retract this auditor's report and re-issue an amended

report as appropriate. However, if it is corrected this will not be necessary.

Internal control deficiencies

31. I considered internal control relevant to my audit of the financial statements, reported performance

information and compliance with applicable legislation; however, my objective was not to express any

form of assurance on it. The matters reported below are limited to the significant internal control

deficiencies that resulted in the findings on compliance with legislation included in this report.

32. Inadequate internal controls and monitoring of action plans over the performance reporting process,

including year-end reporting, resulted in a material misstatement of reported performance information.

Even though the misstatement was subsequently corrected, this resulted in a repeat material non-

compliance.

33. The department has adequate systems in place to monitor compliance with applicable legislation,

however the implementation of these controls is not regularly monitored resulting in recurring non-

compliance with SCM-related legislation. This non-compliance could have been prevented had there

been proper monitoring and review processes in place.

East London

7 October 2020

Auditing to build public confidence

121

Annexure — Auditor-general's responsibility for the audit

1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain

professional scepticism throughout my audit of the financial statements and the procedures performed

on reported performance information for selected programmes and on the department's compliance

with respect to the selected subject matters.

Financial statements 2. In addition to my responsibility for the audit of the financial statements as described in this auditor's

report, I also:• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or

error; design and perform audit procedures responsive to those risks; and obtain audit evidence that is

sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement

resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations or the override of internal control

• obtain an understanding of internal control relevant to the audit 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

department's internal control

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by the accounting officer

• I conclude on the appropriateness of the accounting officer's use of the going concern basis of accounting

in the preparation of the financial statements. I also conclude, based on the audit evidence obtained, whether

a material uncertainty exists relating to events or conditions that may cast significant doubt on the ability of

the Department of Economic Development, Environmental Affairs and Tourism to continue as a going concern.

If I conclude that a material uncertainty exists, I am required to draw attention in my auditor's report to the

related disclosures in the financial statements about the material uncertainty or, if such disclosures are

inadequate, to modify my opinion on the financial statements. My conclusions are based on the information

available to me at the date of this auditor's report. However, future events or conditions may cause a

department to cease operating as a going concern

• evaluate the overall presentation, structure and content of the financial statements, including the disclosures,

and determine whether the financial statements represent the underlying transactions and events in a manner

that achieves fair presentation

Communication with those charged with governance

3. I communicate with the accounting officer regarding, among other matters, the planned scope and

timing of the audit and significant audit findings, including any significant deficiencies in internal

control that I identify during my audit.

I also confirm to the accounting officer that I have complied with relevant ethical requirements regarding

independence, and communicate all relationships and other matters that may reasonably be thought to

have a bearing on my independence and, where applicable, actions taken to eliminate threats or

safeguards applied

122

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2 5

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788

76.2

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2 9

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62

Min

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92

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1 2

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3 7

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Mach

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D

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Cate

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Tra

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Ven

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To

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Cate

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Paym

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So

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456

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Go

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Cate

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Op

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Dep

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Go

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330

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Co

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Tra

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Ven

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Tra

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Dep

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rren

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mp

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Sala

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76 5

99

(741)

(93)

75 7

65

75 2

13

552

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90

71 7

88

So

cial co

ntr

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tio

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12 2

07

741

-

12 9

48

12 6

10

338

97.4

%

12 0

23

12 0

20

88

80

6

- (9

3)

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71

3

87

82

3

89

0

99

.0 %

8

3 8

13

8

3 8

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Go

od

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Ad

min

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31

Ad

vert

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g

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(60)

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106

Min

or

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- 71

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-

Cate

rin

g: D

ep

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men

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ivit

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125

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288

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%

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22

907

Co

mp

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r se

rvic

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742

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00)

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342

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%

396

53

Co

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ness

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d

ad

viso

ry s

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Co

ntr

act

ors

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219

-

(69)

- -

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150

230

67

155

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59.7

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912

126

911

53

148

Dep

art

men

t o

f E

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mic

Develo

pm

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t, E

nvir

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To

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Nu

mb

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An

nu

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31 M

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020

Fig

ure

s in

Ran

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nd

20

19

/20

20

20

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19

A

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Inve

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loth

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Inve

nto

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ther

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plie

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-

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148

7

95.5

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Co

nsu

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255

255

Co

nsu

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nti

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37)

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93

260

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53

an

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Tra

nsp

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vid

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(43)

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111

act

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Tra

vel an

d s

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sist

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56

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99

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46

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23

Op

era

tin

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(2

27)

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329

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188

149

Ven

ues

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93

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Ren

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114

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229

51.3

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198

186

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6 9

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70

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57

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.0 %

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1

1 5

67

To

tal

curr

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t p

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5 7

52

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74

Tra

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56

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100.0

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80

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Dep

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Dep

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No

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Ho

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93

92

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33

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38

86

0

33

6 9

00

149

Dep

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Develo

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nvir

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Nu

mb

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09)

An

nu

al F

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l S

tate

men

ts fo

r th

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arc

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020

Ap

pro

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Sta

tem

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Fig

ure

s in

Ran

d t

ho

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20

19

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20

2

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9

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3.1

EN

VIR

ON

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LA

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D C

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(2

5)

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21

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31

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31

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13

139

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1 1

52

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49

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11

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Go

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rin

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33

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65

Tra

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156

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1 1

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951

780

Op

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Ven

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88

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1

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64

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91

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1

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9

09

To

tal

curr

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t p

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ts

11

15

0

11

4

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1

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9

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23

7

10

02

7

Tra

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56

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No

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s 1 5

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Ho

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93

92

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63

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55

To

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63

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11

4

93

3

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3

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9.2

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50

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24

28

2

150

Dep

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Nu

mb

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09)

An

nu

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ded

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arc

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020

99.0

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Fig

ure

s in

Ran

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2

01

9/2

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0

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3.2

C

OM

PLIA

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(4)

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9

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Go

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(60)

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106

106

Min

or

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35

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35

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58

33

Co

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(50)

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nto

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(43)

(15)

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207

64

105

1

66.3

%

98.5

%

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304

Inve

nto

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ther

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155

148

7

95.5

%

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Co

nsu

mab

le s

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(43)

- 87

87

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%

28

28

Co

nsu

mab

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100

an

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Tra

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2 3

86

(100)

354

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40

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2 2

74

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%

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89

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2 2

98

Op

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tin

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-

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124

123

Ven

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31

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199

35

85.0

%

126

101

3 6

28

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62

8

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79

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8

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65

2

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3

To

tal cu

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52

17

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52

16

6

51

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6

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0

98

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17

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52

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6

51

17

6

99

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98

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4

9 8

91

151

Dep

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mb

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09)

An

nu

al F

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cia

l S

tate

men

ts fo

r th

e y

ear

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arc

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020

Ap

pro

pri

ati

on

Sta

tem

en

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Fig

ure

s in

Ran

d t

ho

usa

nd

2

01

9/2

02

0

2

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01

9

Ad

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pro

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ON

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AN

AG

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T

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16 5

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29

159

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75

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75

So

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2 6

53

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56

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94

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97.9

%

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3

22

1

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Go

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Inve

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262

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Co

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mab

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168

168

Tra

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2 1

35

2

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37

1 4

45

692

67.6

%

1 4

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99

Op

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tin

g p

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338

-

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9

329

2.7

%

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Ven

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368

61

85.8

%

299

298

3

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1

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21

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6

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2

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To

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curr

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t p

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06

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(11

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To

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(11

0)

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152

Dep

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An

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al F

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l S

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ts fo

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arc

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pro

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on

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tem

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Fig

ure

s in

Ran

d t

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nd

20

19

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20

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9

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3.4

B

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SIT

Y M

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385

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535

471

64

88.0

%

425

425

So

cial co

ntr

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tio

ns

260

(1

50)

- 110

90

20

81.8

%

97

97

64

5

--

64

5

56

1

84

8

7.0

%

52

2

52

2

Go

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min

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31

Min

or

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36

--

36

- 36

- %

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Cate

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156

Department of Economic Development, Environmental Affairs & Tourism (Vote Number 09) Annual Financial Statements for the year ended 31 March 2020

Notes to the Appropriation Statement

1. 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

Details 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

Figures in Rand thousand

Final

Appropriation

Actual

Expenditure

Variance

Variance as a

% of Final

Appropriation

Programme 1: ADMINISTRATION 244 053 238 072 5 981 2.5 %

Programme 2: ECONOMIC DEVELOPMENT

AND TOURISM

818 356 778 780 39 576 4.8 %

Programme 3: ENVIRONMENTAL AFFAIRS

342 280

336 714

5 566

1.6 %

Programme 1 The department's adverts for recruitment are processed by the Office of The Premier (OTP); There were delays that

emanated from errors from OTP resulting to a publication that contained certain errors and the matter was later resolved

by DPSA on the 11 March 2020. Other unspent funds relate to services where invoices were submitted late for legal fees

to the Department of Justice, payment of e-Disclosure services and Business continuity consulting.

Programme 2 SITA became unresponsive in respect to the Agri-Intelligence portal. There has been an extensive underspending on

travel and subsistence items (Accommodation, travelling) resulted from the postponement/cancellation of the projects

towards the end of the financial year. The unspent funds relating to services where invoices were submitted late was

delayed leading to an underspending of funds. Isiqalo Youth Fund was projected to be disbursed in the fourth quarter

of the financial year; during the preparation for disbursement process, it was discovered that some of the suppliers were

not registered on the CSD website. The delay in the appointment of a credible service provider to conduct due diligence

for evaluation of enterprises that showed potential to be funded by the department delayed the transfers hence there

is an underspending.

Programme 3 E-Permit under spending is waiting for the completion of the engagement between IT Management office, SITA and

the signing of the SLA. The Gazetting of EC Integrated Waste Management Plan, EC Recycling Strategy, EC

Environmental Implementation Plan, EC Biodiversity Conservation Strategy and Action Plan were delayed leading to an

underspending.

157


Notes to the Appropriation Statement

4. Explanations of material variances from Amounts Voted (after Virement): (continued)

4.2 Per economic classification

Figures in Rand thousand Final

Appropriation

Actual

Expenditure

Variance Variance as a

% of Final

Appropriation

Current payments

Compensation of employees

266 985

262 963

4 022

1.5 %

Goods and services 144 121 130 666 13 455 9.3 %

Transfers and subsidies

Provinces and municipalities

18 956

18 956

-

- %

Departmental agencies and accounts 923 234 923 234 - - %

Public corporations and private enterprises 35 000 1 780 33 220 94.9 %

Non-profit institutions 1 526 1 427 99 6.5 %

Households 4 436 4 261 175 3.9 %

Payments for capital assets

Machinery and equipment

10 123

9 972

151

1.5 %

Payments for financial assets 308 307 1 0.3 %

Compensation of Employees The department's adverts for recruitment are processed by the Office of The Premier (OTP); There were delays that

emanated from errors from OTP resulting to a publication that contained certain errors and the matter was later resolved

by DPSA on the 11 March 2020. The payment of PMDS to SMS members had an impact on underspending as the

assessment process was not finalised by the end of end of the financial year.

Goods and Services The unspent funds relates to services where invoices were submitted late; Payment of legal fees to the Department of

Justice, payment of e-Disclosure services. The Gazetting of EC Integrated Waste Management Plan, EC Recycling

Strategy, EC Environmental Implementation Plan and the EC Biodiversity Conservation Strategy and Action Plan were

delayed leading to an underspending.

Transfers and Subsidies Isiqalo Youth Fund was projected to be disbursed in the fourth quarter of the financial year. During the preparation for

disbursement process, it was discovered that some of the suppliers were not registered on CSD. The delay in the

appointment of a credible service provider to conduct due diligence for evaluation of enterprises that showed potential

to be funded by the department led to the delay in the transfers hence there is a significant underspending.

Capital Payments In this item under expenditure is due to an outstanding accrual for office equipment, there have been challenges with

the delivery of office equipment this was due to the changes in the location of Head Office sub offices between King

Williams Town, Bhisho and East London.

4.3 Per conditional grant

Figures in Rand thousand Final Appropriation Actual Expenditure

Conditional grant EPWP 2 670 2 670

158


Statement of Financial Performance

Figures in Rand thousand Note(s) 2019/2020 2018/2019

Revenue

Annual appropriation 1 1 404 689 1 179 052

Departmental revenue

Aid assistance

3 -

27 359

412

-

Total revenue 1 432 048 1 179 464

Expenditure

Current expenditure

Compensation of employees 5 262 963 257 573

Goods and services 6 130 666 124 541

Total current expenditure 393 629 382 114

Transfers and subsidies

Transfers and subsidies 8 949 658 765 251

Aid assistance 4 17 245 -

Total transfers and subsidies 966 903 765 251

Expenditure for capital assets

Tangible assets 9 9 972 13 031

Payments for financial assets 7 307 -

Total expenditure 1 370 811 1 160 396

Surplus for the year 61 237 19 068

Reconciliation of Net Surplus/(Deficit) for the year

Voted funds

Annual appropriation 51 123 18 656

51 123 18 656

Departmental revenue and NRF Receipts 15 - 412

Aid assistance 4 10 114 -

Surplus for the year 61 237 19 068

159


Statement of Financial Position as at 31 March 2020 Figures in Rand thousand Note(s) 2019/2020 2018/2019

Assets

Current Assets

Cash and cash equivalents 10 77 636 40 647

Receivables 11 2 746 1 120

80 382 41 767

Non-Current Assets

Investments 12 427 597 427 597

Receivables 11 2 782 6 802

Loans 13 83 198

430 462 434 597

Total Assets 510 844 476 364

Liabilities

Current Liabilities

Voted funds to be surrendered to the Revenue Fund 14 51 123 18 656

Departmental revenue and NRF Receipts to be surrendered to the Revenue

Fund

15 17 681 25 012

Payables 16 (6) 13

Aid assistance unutilised 4 10 114 74

78 912 43 755

Total Liabilities 78 912 43 755

431 932 432 609

Represented by:

Capitalisation reserve 427 597 427 597

Recoverable revenue 4 335 5 012

Total 431 932 432 609

160


Statement of Changes in Net Assets Figures in Rand thousand Note 2019/2020 2018/2019

Capitalisation reserves

Opening balance 427 597 427 597

Recoverable revenue

Opening balance 5 012 (204)

Transfers:

Debts

revised

(479) 198

Debts raised (198) 5 018

Closing balance 4 335 5 012

Total 431 932 432 609

161


Cash Flow Statement Figures in Rand thousand Note(s) 2019/2020 2018/2019

Cash flows from operating activities

Receipts

Annual appropriated funds received 1.1 1 404 689 1 179 052

Departmental revenue received 3 220 763 218 361

Interest received 3.3 1 023 384

Aid assistance received 27 359 -

1 653 834 1 397 797

Net (increase)/decrease in working capital (1 645) (272)

Surrendered to Revenue Fund (247 773) (250 151)

Surrendered to RDP Fund/Donor (74) -

Current payments (393 629) (382 114)

Payments for financial assets (307) -

Transfers and subsidies paid (966 903) (765 251)

Net cash flow available from operating activities 17 43 503 9

Cash flows from investing activities

Payments for capital assets 9 (9 972) (13 031)

(Increase)/decrease in loans 115 (7)

(Increase)/decrease in non-current receivables 11 4 020 -

Net cash flows from investing activities (5 837) (13 038)

Cash flows from financing activities

Increase/(decrease) in net assets (677) 4

Increase/(decrease) in non-current payables - 197

Net cash flows from financing activities (677) 201

Cash and cash equivalents at beginning of period 40 647 53 475

Net increase/(decrease) in cash and cash equivalents 36 989 (12 828)

Cash and cash equivalents at the end of the year 18 77 636 40 647

162


Accounting Policies

Summary of significant accounting policies

The annual financial statements have been prepared in accordance with the following policies, which have been applied

consistently in all material aspects, unless otherwise indicated. Management has concluded that the annual financial

statements present fairly the department’s primary and secondary information.

The historical cost convention has been used, except where otherwise indicated. Management has used assessments

and estimates in preparing the annual financial statements. These are based on the best information available at the

time of preparation.

Where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the annual

financial statements and to comply with the statutory requirements of the Public Finance Management Act (PFMA), Act

1 of 1999 (as amended by Act 29 of 1999, and the Treasury Regulations issued in terms of the PFMA and the annual

Division of Revenue Act.

1. Basis of preparation

The annual financial statements have been prepared in accordance with the Modified Cash Standard.

2. Going concern

The annual financial statements have been prepared on a going concern basis.

3. Presentation currency

Amounts have been presented in the currency of the South African Rand (R) which is also the functional currency of the

department.

4. Rounding

Unless otherwise stated financial figures have been rounded to the nearest one thousand Rand (R).

5. Comparative information

5.1 Prior period comparative information

Prior period comparative information has been presented in the current year's annual financial statements. Where

necessary figures included in the prior period annual 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 annual financial statements.

5.2 Current year comparison with budget A comparison between the approved, final budget and actual amounts for each programme and economic classification

is included in the appropriation statement.

6. Revenue

6.1 Appropriated funds

Appropriated funds comprise of departmental allocations as well as direct charges against the revenue fund (i.e. statutory

appropriation).

163


Accounting Policies

Appropriated funds are recognised in the statement of financial performance on the date the appropriation becomes

effective. Adjustments made in terms of the adjustments budget process are recognised in the statement of financial

performance on the date the adjustments become effective.

The net amount of any appropriated funds due to / from the relevant revenue fund at the reporting date is recognised

as a payable / receivable in the statement of financial position.

6. Revenue (continued)

6.1 Departmental revenue

Departmental revenue is recognised in the statement of financial performance when received and is subsequently paid

into the relevant revenue fund, unless stated otherwise.

Any amount owing to the relevant revenue fund at the reporting date is recognised as a payable in the statement of

financial position.

6.2 Accrued departmental revenue

Accruals in respect of departmental revenue (excluding tax revenue) are recorded in the notes to the annual financial

statements when:

• it is probable that the economic benefits or service potential associated with the transaction will flow to the

department; and

• the amount of revenue can be measured reliably.

Accrued tax revenue (and related interest and / penalties) is measured at amounts receivable from collecting agents.

7. Expenditure

7.1 Compensation of employees

7.1.1 Salaries and wages

Salaries and wages are recognised in the statement of financial performance on the date of payment.

7.1.2 Social contributions

Social contributions made by the department in respect of current employees are recognised in the statement of financial

performance on the date of payment.

Social contributions made by the department in respect of ex-employees are classified as transfers to households in the

statement of financial performance on the date of payment.

7.2 Other expenditure

Other expenditure (such as goods and services, transfers and subsidies and payments for capital assets) is recognised in

the statement of financial performance on the date of payment. The expense is classified as a capital expense if the total

consideration paid is more than the capitalisation threshold.

7.3 Accruals and payables not recognised

Accruals and payables not recognised are recorded in the notes to the annual financial statements at cost at the

reporting date.

164


Accounting Policies

7. Expenditure (continued)

7.4 Leases

7.4.1 Operating leases

Operating lease payments made during the reporting date are recognised as current expenditure in the statement of

financial performance on the date of payment.

The operating lease commitments are recorded in the notes to the annual financial statements.

7.4.2 Finance leases

Finance lease payments made during the reporting period are recognised as capital expenditure in the statement of

financial performance on the date of payment.

The finance lease commitments are recorded in the notes to the annual financial statements and are not apportioned

between the capital and interest portions.

Finance lease assets acquired at the end of the lease term are recorded and measured at the lower of:

• cost, being the fair value of the asset; or

• the sum of the minimum lease payments made, including any payments made to acquire ownership at the end

of the lease term, excluding interest.

8. Aid assistance

8.1 Aid assistance received

Aid assistance received in cash is recognised in the statement of financial performance when received. In-kind aid

assistance is recorded in the notes to the annual financial statements on the date of receipt and is measured at fair value.

Aid assistance not spent for the financial year but committed or is work in progress are not be refunded back to the

donor and are not recognised as a payable in the statement of financial position.

Aid assistance not spent for the intended purpose and any unutilised funds from aid assistance that are required to be

refunded to the donor are recognised as a payable in the statement of financial position.

8.2 Aid assistance paid

Aid assistance paid is recognised in the statement of financial performance on the date of payment. Aid assistance

payments made prior to the receipt of funds are recognised as a receivable in the statement of financial position.

9. Cash and cash equivalents Cash and cash equivalents are stated at cost in the statement of financial position.

Bank overdrafts are shown separately on the face of the statement of financial position as a current liability.

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.

165


Accounting Policies

10. Loans and receivables

Loans and receivables are recognised in the statement of financial position at cost plus accrued interest, where interest

is charged, less amounts already settled or written-off. Write-offs are made according to the department’s write-off

policy.

11. Investments

Investments are recognised in the statement of financial position at cost.

12. Financial assets

12.1 Financial assets (not covered elsewhere)

A financial asset is recognised initially at its cost, plus transaction costs that are directly attributable to the acquisition or

issue of the financial asset.

At the reporting date, a department shall measure its financial assets at cost, less amounts already settled or written-

off, except for recognised loans and receivables, which are measured at cost plus accrued interest, where interest is

charged, less amounts already settled or written-off.

12.2 Impairment of financial assets

Where there is an indication of impairment of a financial asset, an estimation of the reduction in the recorded carrying

value, to reflect the best estimate of the amount of the future economic benefits expected to be received from that

asset, is recorded in the notes to the annual financial statements.

13. Payables

Payables recognised in the statement of financial position are recognised at cost.

14. Capital assets

14.1 Immovable capital assets

Immovable assets reflected in the asset register of the department are recorded in the notes to the annual financial

statements at cost or fair value where the cost cannot be determined reliably. Immovable assets acquired in a non-

exchange transaction are recorded at fair value at the date of acquisition. Immovable assets are subsequently carried in

the asset register at cost and are not currently subject to depreciation or impairment.

Subsequent expenditure of a capital nature forms part of the cost of the existing asset when ready for use.

Additional information on immovable assets not reflected in the assets register is provided in the notes to annual

financial statements.

14.2 Movable capital assets

Movable capital assets are initially recorded in the notes to the annual financial statements at cost. Movable capital

assets acquired through a non-exchange transaction is measured at fair value as at the date of acquisition.

Where the cost of movable capital assets cannot be determined reliably, the movable capital assets are measured at

fair value and where fair value cannot be determined; the movable assets are measured at R1.

166


Accounting Policies

All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R1. Movable

capital assets are subsequently carried at cost and are not subject to depreciation or impairment. Subsequent

expenditure that is of a capital nature forms part of the cost of the existing asset when ready for use.

14.3 Intangible assets

Intangible assets are initially recorded in the notes to the annual financial statements at cost. Intangible assets acquired

through a non-exchange transaction are measured at fair value as at the date of acquisition.

Internally generated intangible assets are recorded in the notes to the annual financial statements when the department

commences the development phase of the project.

14.4 Project costs: Work-in-progress

Expenditure of a capital nature is initially recognised in the statement of financial performance at cost when paid.

Amounts paid towards capital projects are separated from the amounts recognised and accumulated in work-in-

progress until the underlying asset is ready for use. Once ready for use, the total accumulated payments are recorded

in an asset register. Subsequent payments to complete the project are added to the capital asset in the asset register.

Where the department is not the custodian of the completed project asset, the asset is transferred to the custodian

subsequent to completion.

15. Provisions and contingents

15.1 Provisions

Provisions are recorded in the notes to the annual financial statements 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 or service potential will be required to settle the obligation and a reliable estimate of the

obligation can be made. The provision is measured as the best estimate of the funds required to settle the present

obligation at the reporting date.

15.2 Contingent liabilities

Contingent liabilities are recorded in the notes to the annual financial statements when there is a possible obligation

that arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one

or more uncertain future events not within the control of the department or when there is a present obligation that is

not recognised because it is not probable that an outflow of resources will be required to settle the obligation or the

amount of the obligation cannot be measured reliably.

15.3 Contingent assets

Contingent assets are recorded in the notes to the annual financial statements when a possible asset arises from past

events, and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future

events not within the control of the department.

15.4 Commitments

Capital commitments are recorded at cost in the notes to the financial statements.

167


Accounting Policies

16. Unauthorised expenditure

Unauthorised expenditure is recognised in the statement of financial position until such time as the expenditure is either:

• approved by Parliament or the Provincial Legislature with funding and the related funds are received; or

• approved by Parliament or the Provincial Legislature without funding and is written off against the

appropriation in the statement of financial position; or

• transferred to receivables for recovery.

Unauthorised expenditure is measured at the amount of the confirmed unauthorised expenditure.

17. Fruitless and wasteful expenditure

Fruitless and wasteful expenditure is recorded in the notes to the annual financial statements when confirmed. The

amount recorded is equal to the total value of the fruitless and or wasteful expenditure incurred.

Fruitless and wasteful expenditure is removed from the notes to the annual financial statements when it is resolved or

transferred to receivables for recovery.

Fruitless and wasteful expenditure receivables are measured at the amount that is expected to be recoverable and are

de- recognised when settled or subsequently written-off as irrecoverable.

18. Irregular expenditure

Irregular expenditure is recorded in the notes to the annual financial statements when confirmed. The amount recorded

is equal to the value of the irregular expenditure incurred unless it is impracticable to determine, in which case reasons

therefor are provided in the note.

Irregular expenditure is removed from the note when it is either condoned by the relevant authority, transferred to

receivables for recovery, not condoned and removed or written-off.

Irregular expenditure receivables are measured at the amount that is expected to be recoverable and are de-recognised

when settled or subsequently written-off as irrecoverable.

19. Changes in accounting policies, accounting estimates and errors

Changes in accounting policies that are effected by management have been applied retrospectively in accordance with

MCS requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative

effect of the change in policy. In such instances the department shall restate the opening balances of assets, liabilities

and net assets for the earliest period for which retrospective restatement is practicable.

Changes in accounting estimates are applied prospectively in accordance with MCS requirements.

Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with MCS

requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative

effect of the error. In such cases the department shall restate the opening balances of assets, liabilities and net assets

for the earliest period for which retrospective restatement is practicable.

20. Events after the reporting date

Events after the reporting date that are classified as adjusting events have been accounted for in the annual financial

statements. The events after the reporting date that are classified as non-adjusting events after the reporting date have

been disclosed in the notes to the annual financial statements.

168


Accounting Policies

21. 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 Provincial

Revenue Fund when the underlying asset is disposed, and the related funds are received.

22. 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 Provincial Revenue Fund

when recovered or are transferred to the statement of financial performance when written-off.

23. Related party transactions

A related party transaction is a transfer of resources, services or obligations between the reporting entity and a related

party.

Related party transactions within the MEC's portfolio are recorded in the notes to the financial statements when the

transaction is not at arm's length.

Key management personnel are those persons having the authority and responsibility for planning, directing and

controlling the activities of the department. The number of individuals and their full compensation is recorded in the

notes to the financial statements.

24. Inventories

At the date of acquisition, inventories are recognised at cost in the statement of financial performance.

Where inventories are acquired as part of a non-exchange transaction, the inventories are measured at fair value as at

the date of acquisition.

25. Employee benefits

The value of each major class of employee benefit obligation (accruals, payables not recognised and provisions) is

disclosed in the Employee benefits note.

169


Notes to the Annual Financial Statements

1. Annual appropriation

1.1 Annual appropriation

Included are funds appropriated in terms of the Appropriation Act (and the Adjustments Appropriation Act)

for National Departments (Voted funds) and Provincial Departments:

Figures in Rand thousand 2019/2020 2018/2019

Final Actual

Funds

Final Appropria

tion

Appropriation Received Appropriation received

Programme 1: ADMINISTRATION 244 053 244 053 233 580 233 580

Programme 2: ECONOMIC DEVELOPMENT AND TOURISM 818 356 818 356 606 612 606 612

Programme 3: ENVIRONMENTAL AFFAIRS 342 280 342 280 338 860 338 860

Total 1 404 689 1 404 689 1 179 052 1 179 052

1.2 Conditional grants

Total grants received

34

2 670

2 204

Provincial grants included in total grants received

2 670

2 204

2. Statutory appropriation

The department shares an MEC with Provincial Treasury and the salary of the MEC is paid by Provincial

Treasury.

3. Departmental revenue

Tax revenue 217 567 207 331

Sales of goods and services other than capital assets 3.1 1 318 1 367

Fines, penalties and forfeits 3.2 1 427 90

Interest, dividends and rent on land 3.3 1 023 384

Transactions in financial assets and liabilities 3.4 451 9 573

Total revenue collected 221 786 218 745

Less: Own revenue included in appropriation 15 221 786 218 333

Departmental revenue collected - 412

3.1 Sales of goods and services other than capital assets

Sales by market establishment 16 16

Administrative fees 1 024 1 061

Other sales 278 290

Sales of goods and services produced by the department 1 318 1 367

3.2 Fines, penalties and forfeits

Fines 1 427 90

The increase in balance is due to an increase in payment of fines.

Figures in Rand thousand Note 2019/2020 2018/2019

170



3. Departmental revenue (continued)

3.3 Interest, dividends and rent on land

Interest 1 023 384

3.4 Transactions in financial assets and liabilities

Other receipts including recoverable revenue 451 9 573

3.5 Cash received not recognised (not included in the main note) -

2019/2020

Name of entity

Eastern Cape Development Corporation

Amount

received

52 174

Amount paid

to the

revenue fund

52 174

The cash received is previous year's surrender of unspent funds by ECDC.

4. Aid assistance

Opening balance 74 74

Transferred from statement of financial performance 10 114 -

Paid during the year (74) -

Closing balance 10 114 74

The balance is aid assistance not spent received during the year from EU.

4.1 Analysis of balance by source

Aid assistance from other sources 10 114 74

4.2 Analysis of balance

Aid assistance unutilised 4 10 114 74

4.3 Aid assistance expenditure per economic classification

Transfers and subsidies 17 245 -

This amount is the EU aid assistance expenditure transferred to ECDC.

171



5. Compensation of employees

5.1 Salaries and wages

Basic salary 188 561 182 976

Performance award 786 721

Service based 623 472

Compensative/circumstantial 849 2 329

Other non-pensionable allowances 34 955 35 635

Total 225 774 222 133

The department's recruitment process encountered delays that resulted in the

underspending.

5.2 Social contributions

Employer contributions

Pension

24 325

23 364

Medical 12 815 12 027

Bargaining council 49 47

Total 37 189 35 439

Total compensation of employees

262 963

257 573

Average number of employees

521

549

The decrease is due to resignation and retirement and delayed appointment process.


172



6. Goods and services Administrative fees 14 257

Advertising 2 524 2 962

Minor assets 6.1 12 1 203

Bursaries (employees) 1 988 1 674

Catering 2 734 1 950

Communication 887 2 206

Computer services 6.2 18 323 6 676

Consultants: Business and advisory services 7 385 8 545

Legal services 2 134 5 111

Contractors 10 824 10 667

Audit cost - external 6.3 4 776 4 461

Fleet services 3 883 4 027

Inventory 6.4 817 729

Consumables 6.5 2 183 3 007

Operating leases 37 576 34 749

Property payments 6.6 8 713 9 998

Rental and hiring 361 186

Transport provided as part of the departmental activities 70 111

Travel and subsistence 6.7 19 176 19 536

Venues and facilities 3 457 3 092

Training and development 1 758 1 910

Other operating expenditure 6.8 1 071 1 484

Total 130 666 124 541

The department had in the year under review paid computer services for the current and an accrual in respect of Microsoft

services hence the significant difference from the prior year expenditure. Operating leases increase in expenditure the

department had increased its allocation of cell phones and 3Gs to field workers as part of their working tools in line with the

departmental policy.

6.1 Minor assets

Tangible assets


12

1 203

There were less purchases of new furniture in the current year.

6.2 Computer services

SITA computer services 2 610 2 392

External computer service providers 15 713 4 284

Total 6 18 323 6 676

Increase in spending is as a result of previous year's late payment for the Microsoft license amounting to R5.3 mil.

6.3 Audit cost - external

Regularity audits 4 776 4 461

This is due to the normal audit fees increase as there were no unnecessary increases caused by delays in the audit.


173


Notes to the Annual Financial Statements Figures in Rand thousand Note(s) 2019/2020 2018/2019

6. Goods and services (continued)

6.4 Inventory

Clothing material and accessories 605 -

Materials and supplies 64 729

Other supplies 6.4.1 148 -

Total 6 817 729

6.4.1 Other supplies

Ammunition and security supplies 148 -

6.5 Consumables

Uniform and clothing 435 255

Household supplies 478 380

Building material and supplies 57 -

IT consumables 222 82

Other consumables 54 1 210

Consumable supplies 1 246 1 927

Stationery, printing and office supplies 937 1 080

Total 6 2 183 3 007

The department had to buy uniform for additional appointed officials in programme 3 over and above the normal yearly

replacements as per the departmental policy. The departments move to the various buildings for Head Office staff had also put

a strain on household supplies and building and material supplies. Special cleaning had to be conducted at head office to

remove the gas particles that had an effect on the furniture and documents before they were moved to the various buildings

currently used by the head office officials.

6.6 Property payments

Municipal services

136

84

Other 8 577 9 914

Total 6 8 713 9 998

The department had to hire a company to conduct a specialised cleaning at Head Office after the gas leak as this had an

effect on the documents and furniture.

6.7 Travel and subsistence

Local 18 672 18 782

Foreign 504 754

Total 6 19 176 19 536

6.8 Other operating expenditure

Professional bodies, membership and subscription fees 261 274

Resettlement costs 240 858

Other 570 353

Total 6 1 071 1 484

174



7. Payments for financial assets

Other material losses written off 7.1 307 -

There was a write-off implemented by the department during the financial year, the debts were more than 3 years

old and deemed not recoverable.

7.1 Other material losses written off

Nature of losses

Debts written off

307

-

8. Transfers and subsidies

Provinces and municipalities 35 61 956 13 450

Departmental agencies and accounts Annexure 1B 880 234 728 667

Public corporations and private enterprises Annexure 1D 1 780 19 870

Non-profit institutions Annexure 1F 1 427 1 575

Households Annexure 1G 4 261 1 689

Total 949 658 765 251

Transfers and Subsidies have increased due to the Provincial Economic Stimuls Fund transfered during the year under review.

9. Expenditure for capital assets

Tangible assets

Buildings and other fixed structures

31

-

1 326

Machinery and equipment 29 9 972 11 705

9 972 13 031

9.1 Analysis of funds utilised to acquire capital assets - 2019/2020

Figures in Rand thousand Voted funds Total

Tangible assets


9 972 9 972

9.2 Analysis of funds utilised to acquire capital assets - 2018/2019

Figures in Rand thousand Voted funds Total

Tangible assets


1 326

1 326

Machinery and equipment 11 705 11 705

13 031 13 031

9.3 Finance lease expenditure included in expenditure for capital assets

Tangible assets


9 749

8 792


175



10. Cash and cash equivalents

Consolidated paymaster general account 77 636 40 647

The increase in balance is as a result of unspent funds due to be surrendered and departmental revenue received

from entities before year end.

11. Receivables

Figures in Rand

thousand

Note

Current

2019/2020

Non-

Total

Current

2018/2019

Non-

Total

current current

Claims recoverable 11.1 - 615 615 5 610 615

Staff debt 11.2 2 746 2 167 4 913 1 115 6 192 7 307

Total 2 746 2 782 5 528 1 120 6 802 7 922

11.1 Claims recoverable

National departments 610 610

Provincial departments 5 5

Total 11 615 615

11.2 Staff debt

Staff debts 4 913 7 307

There was a write-off R307 thousand implemented by the department during the financial year as the debts were not

recoverable and were all more than 3 years old. The department further recovered funds from the employees who left the

service through resignation.

The departments debt is made up of salary overpayments R1, 515 million, Human Resources Operational Processes Team

R3, 367 million, government vehicles and other debts R31 thousand.

11.3 Impairment of receivables

Estimate of impairment of receivables

2 109 3 518

12. Investments

Non-Current

Shares and other equity

Investments at cost

427 597 427 597

The total is made up of the following investments; Eastern Cape Development Corporation - R427, 590 million,

East London Industrial Development Zone - R740 Rands and Coega Development Corporation R6, 738 thousand.

Analysis of non-current investments



176



13. Loans

Private enterprises 83 198

Analysis of balance


New issues 4 8

Repayments (119) (1)

Closing balance 83 198

The decrease in loans was a result of a payment received which then reduced the balance.

13.1 Impairment of loans

Estimate of impairment of loans 41 99

14. Voted funds to be surrendered to the Revenue Fund


Transferred from statement of financial performance 51 123 18 656

Paid during the year (18 656) (40 887)


Voted funds to be surrendered has increased because of unspent funds by the

department.

15. Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund


Transferred from statement of financial performance - 412

Own revenue included in appropriation 3 221 786 218 333

Paid during the year (229 117) (209 264)


16. Payables - current

Clearing accounts 16.1 (6) 13

16.1 Clearing accounts Clearing accounts (6) 13

Clearing accounts balance is total of balances from the following accounts; bank adjustment, Tax debt, Income Tax debt, current

debt receivables, pension recoverable, GEHS refund control account, bargaining council, persal EBT control account, PERSAL

interface control account, salary reversal control account and unpaid/recalled BAS EBT control account.

Due to prior period error, prior year balance for clearing accounts (payables) has decreased from R1, 111 million to R13

thousand. Refer to note 32.1.

177




17. Net cash flow available from operating activities

Net surplus as per Statement of Financial Performance 61 237 19 068

Add back non cash/cash movements not deemed operating activities

(Increase)/decrease in receivables (1 626) 100

(Increase)/decrease in prepayments and advances - 22

Increase/(decrease) in payables – current (19) (394)

Expenditure on capital assets 9 972 13 031

Surrenders to Revenue Fund (247 773) (250 151)

Surrenders to RDP Fund/Donor (74) -

Own revenue included in appropriation 221 786 218 333

Net cash flow generated by operating activities 43 503 9

The increase is as a result of the deparment underspending.

18. Reconciliation of cash and cash equivalents for cash flow purposes

Consolidated paymaster general account 77 636 40 647

This is due to underspending and revenue collected from entities.

19. Contingent liabilities and contingent assets

19.1 Contingent liabilities

Liable to Nature

Claims against the department

Annex 3B

13 447

3 710

Intergovernmental payables (unconfirmed balances) Annex 5 55 471

Total 13 502 4 181

The increase is a result of a dispute in relation to management fees that are claimed by Coega Development

Corporation. This has thus increased contingent liabilities for the year under review.

20. Capital commitments

Machinery and Equipment - 78

Due to changes in the 2019/20 MCS which require departments to disclose only contracted capital commitments (and

exclude current commitments and those not contracted), the balance of prior year has decreased from R41, 959

million to R78 thousand.

As at 31 March 2020 the department did not have capital commitments.

178


Notes to the Annual Financial Statements Figures in Rand thousand 2019/2020 2018/2019

21. Accruals and payables not recognised

21.1 Accruals

Listed by economic classification 30 Days Total Total

Goods and services 3 735 3 735 4 043

Transfers and subsidies 3 994 3 994 -

Total 7 729 7 729 4 043

Listed by programme level

Programme 1: ADMINISTRATION 2 511 3 083

Programme 2: ECONOMIC DEVELOPMENT AND TOURISM 4 999 449

Programme 3: ENVIRONMENTAL AFFAIRS 219 511

Total 7 729 4 043

21.2 Payables not recognised Figures in Rand thousand 2019/2020 2018/2019

Listed by economic classification 30 Days 30+ Days Total Total

Goods and services 72 28 100 2 834

Capital assets 147 - 147 -

Total 219 28 247 2 834

Listed by programme level

Programme 1: ADMINISTRATION 235 1 179

Programme 2: ECONOMIC DEVELOPMENT AND TOURISM 12 1 300

Programme 3: ENVIRONMENTAL AFFAIRS - 355

Total 247 2 834

Included in the above totals are the following:

Confirmed balances with other departments Annex 5 64 53

10 883 10 978

7 436 7 554

2 000 3 552

18 504 19 765

22. Employee benefits Leave entitlement

Service bonus

Performance awards Capped leave commitments Other 447 479

Total 39 270 42 328

Included in the leave entitlement and capped leave commitment balances are negative leave balances to the value of R259

thousand. These negative leave balances came about when leave was taken by employees, based on the PERSAL leave credit

(opening yearly balance) allocated at the beginning of the leave cycle which is calculated based on a calendar year. However,

this cycle is not inline with the accounting cycle which ends at the end of March each financial year. These leave credits are

calculated per month depending on the number of months worked by each official.

179




23. Lease commitments

23.1 Operating leases

2019/2020


Not later than 1 year

Machinery

and

equipment

20 304

Total

20 304

Later than 1 year and not later than 5 years 5 070 5 070

Total lease commitments 25 374 25 374

2018/2019



Machinery

and

equipment

36 763

Total

36 763



23.2 Finance leases **

2019/2020



Machinery

and

equipment

4 877

Total

4

877



2018/2019



Machinery

and

equipment

5 964

Total

5

964



24. Accrued departmental revenue

Tax revenue 7 283 17 282

Negative year-on-year revenues were experienced in the horseracing (totalisator) and casino

sectors.

24.1 Analysis of accrued departmental revenue


Less: Amounts received (17

282)

(17 344)

Add: Amounts recognised 7 283 17 282

Total 7 283 17 282

180



25. Irregular expenditure

25.1 Reconciliation of irregular expenditure


Add: Irregular expenditure - relating to prior year 25.2 56 1 697

Add: Irregular expenditure - relating to current year 25.2 463 -

Less: Prior year amounts condoned 25.3 (5 423) (210 592)

Closing balance 519 5 423

Analysis of awaiting condonation per age classification

Current year

463 1 697

Prior year 56 3 726

Total 519 5 423

25.2 Details of current and prior year irregular expenditure – added current year

(under determination and investigation)


Incident Disciplinary steps taken/ Criminal proceedings

Procurement Process not followed Under Investigation

2019/2020

298

Award made to a close family member of Under Investigation

the departmental official

Supplier with lowest score selected Under investigation

40

181

Total 519

25.3 Details of irregular expenditure condoned


Incident Condoned by (condoning authority)

Intengu Communications Provincial Treasury

2019/2020

316

Technologies Acceptance and Biztec Provincial Treasury

Consulting (PABX)

Coega Infrastructure Projects Provincial Treasury

3 055

2 052

Total 5 423

The department's irregular expenditure was condoned by National Treasury with an amount of R 5, 423 million.

25.4 Details of irregular expenditures under assessment (not included in the main note)


Incident

Irregular expenditure on the Provincial

2019/2020

251 086

Economic Stimulus Fund

Transfer payments of R251, 086 million made to provincial entities during the 2019/20 financial year are in respect of

the Provincial Economic Stimulus Fund.

181



26. Fruitless and wasteful expenditure

26.1 Reconciliation of fruitless and wasteful expenditure


Fruitless and wasteful expenditure - relating to prior year 26.2 - 38

Fruitless and wasteful expenditure - relating to current year 26.2 71 8

Closing balance 162 91

26.2 Details of current and prior year fruitless and wasteful expenditure – added current year

(under determination and investigation)


Incident

Legal Fees

Disciplinary steps taken/ Criminal proceedings

Under investigation

2019/2020

71

27. Related party transactions

Payments made

Expenditure for capital assets - 121

Relationships

Related party

Eastern Cape Development Corporation

Eastern Cape Gambling and Betting Board

Eastern Cape Liquor Board

Eastern Cape Parks and Tourism Agency Coega

Development Corporation Pty Ltd

East London Industrial Development Zone

Eastern Cape Provincial Treasury

Public Entity in the same MEC portfolio






Department in the same MEC portfolio

28. Key management personnel

Officials: No. of Individuals

Level 15 to 16 2 2 008 2 312

Level 14 (incl. CFO if at a lower level) 5 5 452 6 472

Level 13 32 33 003 31 049

Total 40 463 39 833

The head of department's contract ended in November 2019 at salary level 16 and the new head of department commenced

employment on the 1st of December 2019 at salary level 1

182




29. Movable Tangible Capital Assets

Movement in movable tangible capital assets per asset register for the year ended 31 March 2020


Opening balance

Additions Disposals Closing

balance Machinery and equipment

Transport assets 1 853 - - 1 853

Computer equipment 9 098 - 199 8 899

Furniture and office equipment 9 897 101 40 9 958

Other machinery and equipment 1 057 47 - 1 104

Total movable tangible capital assets 21 905 148 239 21 814

29.1 Additions

Additions to movable tangible capital assets per asset register for the year ended 31 March 2020

Figures in Rand thousand Cash (Capital Work Received

current, not

paid

Total

in Progress

current costs

and finance (Paid current

lease year, received

payments) prior year)


Transport assets 5 963 (5 963) - -

Furniture and office equipment 176 - (75) 101

Other machinery and equipment 3 833 (3 786) - 47

Total additions to movable tangible capital assets 9 972 (9 749) (75) 148

29.2 Disposals

Disposals of movable tangible capital assets per asset register for the year ended 31 March 2020

Figures in Rand thousand Non-Cash

Disposal

Total Disposal


Computer Equipment 199 199

Furniture and office equipment 40 40

Total additions to movable tangible capital assets 239 239

183

Department of Economic Development, Environmental Affairs & Tourism (Vote Number 09)

Annual Financial Statements for the year ended 31 March 2020



29.3 Movement for 2018/2019

Movement in movable tangible capital assets per asset register for the year ended 31 March 2019



Opening balance Additions Disposals Closing

balance

Transport assets 705 1 148 - 1 853

Computer equipment 8 912 961 (775) 9 098

Furniture and office equipment 9 078 878 (59) 9 897

Other machinery and equipment 1 057 - - 1 057

Total movable tangible capital assets 19 752 2 987 (834) 21 905

29.4 Minor assets

Movement in minor assets per the asset register for the year ended as at

31 March 2020


Machinery

and

Total

Opening balance

equipment

8 399 8 399

Additions 11 11

Disposals (207) (207)

Total minor assets 8 203 8 203

Number of minor assets at cost

Machinery

and

equipment

Total

4

Movement in minor assets per the asset register for the year ended as at

31 March 2019

Figures in Rand

thousand

Opening balance

Intangible

assets

2

Machinery

and

equipment

7 682

Total

7 684

Prior period errors (9) (9)

Additions 1 203 1 203

Disposals (477) (479)

Total minor

assets

-

8 399 8 399


Machinery

and

Total

Number of minor assets at cost

equipment

534 534

184





29.4.1 Prior period error


Nature of prior period error

Relating to 2018/2019 (affecting the

opening balance) Machinery and

equipment - disposals

2018/2019

30

The error was a result of a figure ommitted for machinery and equipment

understating disposals.

30. Intangible Capital Assets

30.1 Movement for 31 March 2019

Movement in intangible capital assets per asset register for the year

ended 31 March 2019

Figures in Rand thousand Opening Disposals

Software

balance

2 179 (2 179)

31. Immovable Tangible Capital Assets

Movement in immovable tangible capital assets per asset register for the year ended 31 March 2020



Opening balance Closing balance

Other fixed structures 48 650 48 650

31.1 Movement for 2018/19 Movement in immovable tangible capital assets per asset register for the year ended 31 March 2019



Other fixed structures

Opening

balance

48 650

Closing

balance

48 650

31.2 Capital Work-in-progress

Capital Work-in-progress as at 31 March 2020



Note Opening

balance

01 April

2019

74 491

Closing

balance

31 March

2020

74 491

185






Age analysis on ongoing projects

1 to 3 Year(s)

Number of

projects

Planned,

Construction

started

1

2019/2020

Total

74 491

Capital Work-in-progress as at 31 March 2019



Note Opening

balance

01 April 2018

73 165

Current

Year WIP

1 326

Closing

balance

31 March

2019

74 491


Age analysis on ongoing projects

1 to 3 Year(s)

Number of

projects

Planned,

Construction

started

1

2018/2019

Total

74 491

186





32. Prior period errors

32.1 Correction of prior period errors


Amount bef

2018/2019

Prior period Restated

Liabilities

error correction error amount

Payables current 1 111 (1 098) 13

Payables non current 4 114 (4 114) -

Net effect 5 225 (5 212) 13

The prior period error is due to the incorrect classification of the Debt Receivable Income Account as payables instead

of recoverable revenue and is now adjusted accordingly.

Figures in Rand thousand 2018/2019

Amount bef Prior period Restated

error error amount

correction

Other

Recoverable revenue (Debts revised) 198 - 198

Recoverable revenue (Debts raised) (194) 5 212 5 018

Net effect 4 5 212 5 216

The prior period error is due to the incorrect classification of the Debt Receivable Income Account as payables instead

of recoverable revenue and is now adjusted accordingly.

187

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73 1

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74 4

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202

dedea 19-20 annual report - provincial government

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