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PRESENTATION TO SELECT COMMITTEE ON ECONOMIC DEVELOPMENT OF DMR 2010 / 11 ANNUAL REPORT

PRESENTATION TO SELECT COMMITTEE ON ECONOMIC DEVELOPMENT OF DMR 2010 / 11 ANNUAL REPORT 15 NOVEMBER 2011. Presentation Outline. 1. Financial performance - Annual Financial Statements 2. Auditor General’s Report - Audit Findings - Report on Material Losses

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PRESENTATION TO SELECT COMMITTEE ON ECONOMIC DEVELOPMENT OF DMR 2010 / 11 ANNUAL REPORT

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  1. PRESENTATION TO SELECT COMMITTEE ON ECONOMIC DEVELOPMENT OF DMR 2010 / 11 ANNUAL REPORT 15 NOVEMBER 2011

  2. Presentation Outline 1. Financial performance - Annual Financial Statements 2. Auditor General’s Report - Audit Findings - Report on Material Losses - Report on Accruals

  3. APPROPRIATION STATEMENT FOR 2010/2011

  4. Analysis of variances • The overall under spending by the Department was R1,145 millionwhich is 0.11 % of the budget • The main reason for the under spending relates to the procurement of goods and services whereby orders were raised during the 2010/2011 financial year but delivery thereof and processing of invoices and payments happened subsequent to that. This was mainly on Programme 1: Administration

  5. TREND ON UTILISATION OF FUNDS

  6. Analysis of Unspent Fund • Under spending has been consistently below 3% for the last three years • For the year under review, the unspent funds is attributable to the late receipt of invoices and consequent delay in processing payments • However, this is not a true reflection of the matter as there is a huge gap between the unspent amount and the accrual raised which would have had constituted unauthorised expenditure had payment been done in time.

  7. Analysis of variance in Statement of Financial Performance

  8. Analysis of the Statement of Financial Performance

  9. Statement of Financial Performance: Variance analysis • The staff cost decreased as a result of the split of Department of Minerals and Energy into Dept of Mineral Resources and Dept of Energy. (1,076 vs 1,272) • The G & S cost is relatively low compared to 2009/10 owing to split of Dept of Minerals and Energy. However the operating lease cost increases due to the relocation of the Head Office and some of the Regional offices • The decrease in Tangible capital assets cost is attributable mostly to the leasehold improvements for Trevenna paid in 2009/10

  10. Statement of Financial Performance: Variance analysis • Decrease of 88.55% in transfers and subsidies is due to the fact that most of the transfers for the former DME relate to Dept of Energy • Financial transactions in assets and liabilities went down by 94% due to fewer losses written off during the financial year.

  11. Analysis of variances: Statement of Financial Position

  12. Analysis of variances: Statement of Financial Position

  13. Details of Transfers and Subsidies

  14. Audit Findings and action plan: 2009/2010 v 2010/2011

  15. Audit Findings and action plan: 2009/2010 v 2010/2011

  16. Audit Findings and action plan: 2009/2010 v 2010/2011

  17. Audit Findings and action plan: 2009/2010 v 2010/2011

  18. Audit Findings and action plan: 2009/2010 v 2010/2011

  19. Report on Accruals • The R1,1 million unspent funds to be surrendered would not have been sufficient to cover the accrual raised at the end of the year and this seem to be a growing trend. • Records show a trend between accruals and unspent funds for the past two financial periods as follows: 2009/2010: R19,6 million vs R11,5 million (deficit of R8,1 million) 2010/2011: R37,7 million vs R3,8 million (deficit of R33,9 million) • The unauthorised expenditure that would have been incurred by the Department as shown by the deficit above is an indication that there are serious challenges in the allocation of budget for Goods and Services

  20. THANK YOU

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