department of energy pce presentation on the department’s 2012/13 annual financial statements ms...

DEPARTMENT OF ENERGY

PCE PRESENTATION ON THE

DEPARTMENT’S 2012/13 ANNUAL FINANCIAL STATEMENTS

Ms Yvonne ChettyChief Financial Officer

1

INTRODUCTION• The year under review, year 2012/13, is the third year that the

Department of Energy has been operating as an independent department.

• The DOE’s budget allocation increased by 8.6% from R6.20 billion in 2011/12 financial year to R6.73 billion in the 2012/13 financial year.

• Of the 8.6% increase between the two years, 7.46% was allocated to transfers and subsidies and 1.14% allocated to the Department’s operational budget.

2

INTRODUCTION (continued)

• From the 2012/13 total budget allocation of R6.73 billion, 93.6% was allocated to transfers as follows:o Integrated National Electrification Programme – R3 billion;o Transnet’s New Multi-Product Pipeline – R1.5 billion;o NECSA – R568 million;o Energy Efficiency Demand Side Management – R1,02 billion

• The balance were transfers to State Owned Entities and other smaller programmes.

• Only 6.4% (or R429 million) of the total budget was allocated for the Department’s operational needs.

• The Department spent 98.9% of its allocated 2012/13 budget.

3

FINANCIAL PERFORMANCEStatement of Financial Performance for the year ended

31 March 2013

4

2012/13 R'000

TOTAL REVENUE 7,199,786

EXPENDITURECurrent expenditure 373,677 Transfers and subsidies 6,350,900 Expenditure for capital assets 10,555 Payments for financial assets 36 TOTAL EXPENDITURE 6,735,168

SURPLUS/(DEFICIT) FOR THE YEAR 464,618 Voted Funds 75,494 Departmental revenue 2,516 Direct Exchequer receipts 387,618 Aid assistance (1,010)

2012/13 BUDGET OVERVIEWExpenditure Per Economic Classification

DETAILS Budget Actual spend 31/03/2013

Actual % on budget spend

Rand’s Million R'000 R'000 %

Transfers and subsidies 6,304,841 6,276,700 99.6%

Compensation of Employees 206,763 201,485 97.4%

Goods and Services 207,747 170,208 81.9%

Payments for capital assets 15,127 10,555 69.8%

Payments for financial assets 0 36

Total

6,734,478

6,658,984 98.9%

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2012/13 BUDGET OVERVIEW (continued)Per Programme

DETAILS Budget2012/13

Actual spend 2012/13


R'000 R'000 %

Totals 2012/2013 6,734,478 6,658,984 98.9%

Administration 236,583 219,486 92.8%

Energy Policy and Planning 1,563,403 1,544,913 98.8%

Petroleum Regulation 1,139,787 1,139,476 100.0%

Programs and Projects 3,147,822 3,112,376 98.9%

Nuclear Energy 646,883 642,733 99.4%

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2012/13 EXPENDITURE AGAINST THE TARGETSAdministration

Administration Planned Targets Achieved Partially

AchievedNot Achieved

Corporate Services 29 22 5 2Governance & Compliance 31 27 3 1Financial Management Services 25 24 1 0Director General’s Office 10 9 1 0Total 95 82 10 3




R'000 R'000 %Administration 236,583 219,486 92.8%

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2012/13 EXPENDITURE AGAINST THE TARGETS (continued)

Energy Policy & PlanningPlanned Targets Achieved Partially


Energy Policy and Planning

68 26 32 10

Total 68 26 32 10




R'000 R'000 %Energy Policy and Planning 1,563,403 1,544,913 98.8%

8


Energy RegulationPlanned Targets Achieved Partially


Energy Regulation16 6 7 3

Total 16 6 7 3




R'000 R'000 %Energy Regulation 1,139,787 1,139,476 100.0%

9


Programmes and ProjectsPlanned Targets Achieved Partially


Programmes and Projects

9 2 1 6Total 9 2 1 6




R'000 R'000 %Programmes and Projects

3,147,822 3,112,376 98.9%

10


Nuclear EnergyPlanned Targets Achieved Partially


Nuclear Energy 10 2 7 1Total 10 2 7 1




R'000 R'000 %Nuclear Energy 646,883 642,733 99.4%

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FINANCIAL PERFORMANCEAnalysis of financial performance:• The department’s total spending for the year was R6.66 billion (98.9%) of the total budget of R6.73 billion.

•The above represents an under spending of 1.12% (or R75.49 million).

•A total of R28.14 million (37%) of the overall balance of R75.49 million remaining are for Transfer payments

•The composition of the overall balance of R75.49 million is as follows:Compensation of Employees :R5.28 million Goods & Services :R37.54 million Transfer Payments :R28.14 million Capital Assets :R4.57 million

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FINANCIAL PERFORMANCE (continued)Analysis of financial performance: • A rollover request was submitted to NT for the unspent budget amount of R69.34 million (Subsequently R28.07 million was approved)

Compensation of employees• The under-expenditure of compensation of employees by 2.55% is mainly due to delay in the implementation of SMS salary adjustment. •The department had anticipated the SMS salary adjustment implementation to be effective from January 2013 however it was only implemented from April 2013 as per DPSA instructions.

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FINANCIAL PERFORMANCE (continued)Analysis of financial performance: Goods & Services•The under-spending of goods & services by 18.07% (or R37.54 million) is due to late receipts of invoices and delay in the delivery in goods and services.•The following major payments could not be disbursed before 31 March 2013:

o The development of the 20 year Liquid Fuels Infrastructure Road Map plan incorporating an audit of Refineries, an amount of R 2.3 million.

o The review of the electricity distribution industry asset status report, subsequent development of a business case and the design of an integrated contract management system for the implementation of the asset rehabilitation programme, an amount of R11.8 million.

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FINANCIAL PERFORMANCE (continued)Analysis of financial performance: Goods & Services•The following major payments could not be disbursed before 31 March 2013:

o The acquisition of an electronic monitoring tool to monitor the implementation of electricity connections and various energy projects, an amount of R 6.5 million

Transfer Payments•An amount of R28.07 million of the overall balance of R28.14 million within this category was attributable to funding specifically appropriated to the Non-Grid Households that was not transferred in full• A rollover request was submitted to National Treasury for R28.07 million, for Non-grid - Solar Home Systems project (this request was subsequently approved)

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FINANCIAL PERFORMANCE (continued)Analysis of financial performance: CAPEX•The under-spending in Capex is due to the delay in the procurement processes as some of the projects and acquisition could not be finalised before year-end.

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FINANCIAL PERFORMANCE (continued)

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FINANCIAL PERFORMANCE (continued)

Detailed expenditure ( Top 5 Expenditure)

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FINANCIAL POSITIONStatement of Financial Position as at 31 March 2013

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2012/13ASSETS R'000

Current assets 75,726

Unauthorised expenditure 14,860Cash and cash equivalents 59,660Prepayments and advances 71Receivables 125Aid assistance receivable 1,010

Non-current assets 2,205

Investments 2,205

TOTAL ASSETS 77,931

LIABILITIESCurrent liabilities 75,726

Voted funds to be surrendered to the Revenue Fund 75,494

Dept. Revenue and NRF Receipts to be surrendered to the Revenue Fund

62

Payables 170

TOTAL LIABILITIES 75,726

NET ASSETS 2,205

Unauthorized Expenditure – R14.86m•The unauthorized expenditure of R14.86 million is due to an Infrastructure Grant transfer payments paid to the Mthonjaneni Municipality in May 2010.

•The transfer was appropriated in the 2009/10 financial year , the payment to the municipality was processed in March 2010, but transferred in May 2010 due to the system rejection of the banking details.

•This amount was condoned by National Treasury on 09 November 2011, however NT has not yet indicated if the approval was granted with or without funding.

•The matter is currently under discussion with National Treasury.

FINANCIAL POSITION (continued)

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FINANCIAL POSITION (continued)Irregular expenditure•All irregular expenditure incurred in the 2011/12 and 2012/13 financial years has been condoned.

•Total irregular expenditure incurred during the financial year 2012/13 is R8.24 million.

o R219 000 relates to non-compliance to SCM processeso R8.02 million relates to lease payments made directly to the Landlord,

of Travenna Campus

NB: In terms of the MoU between the DoE and the DMR during the split of DME, it was agreed DMR was to defray all accommodation costs and will be reimbursed by DoE for it’s portion of the expense. However DMR subsequently refused to accept the reimbursements from the DoE, the department was then forced to settle monthly payments directly to the Landlord.

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FINANCIAL POSITION (continued)Investments – R2.2 million

•The department is a 100% shareholder in The South African Nuclear Corporation Limited (NECSA) and own 2,2 shares of R1 each

Current Liabilities – R75.73 million

•The breakdown of the above is as follows;•Surplus of voted funds, surrendered to NT R75.49 Million•Departmental revenue, surrendered to NT R62 000•Owing to SARS -Paid post year end R138 000•Owing to GEPF - Paid post year end R28 000

(NB: Surplus funds account for 99.7% of the current liabilities).

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REPORT OF THE AUDITOR GENERAL Audit outcomes for the last 3 years

2010/11 2011/12 2012/13

Audit Opinion Unqualified Unqualified Unqualified

Support Function

Corporate Services 3 5 1

Information Technology 0 6 3

Financial Management Services 17 14 3

Governance and Compliance 7 6 2

Line Function 10 7 8

Total 37 38 17

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REPORT OF THE AUDITOR GENERAL

Audit opinion:

•The department received an unqualified audit opinion, without any emphasis of matter.

•The department has completed an action plan to address all outstanding AGSA findings.

•Most of the audit findings were addressed by 31 July 2013

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Thank you

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department of energy pce presentation on the department’s 2012/13 annual financial statements ms...

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