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2009/10 Annual Report on Environmental and Tourism Expenditure

This briefing presents the Auditor General's report on the financial statements, budget and expenditure trends, and challenges faced by the Department of Environmental Affairs in the 2009/10 financial year. It includes information on expenditure per programme and economical classification, property expenditure, transfers to public entities and non-profit institutions, and foreign assistance.

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2009/10 Annual Report on Environmental and Tourism Expenditure

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  1. Briefing to Portfolio Committee on 2009/10 Annual Report Environmental and Tourism NosiphoNgcaba Director-General Department of Environmental Affairs 15 September 2010

  2. Presentation Outline • Auditor General Report on the Financial Statements • Budget & Expenditure for 2009/10 • Departmental Expenditure Trends • Expenditure per Programme • Expenditure per Economical Classification • Reprioritization for 2009/10 • Baseline Compensation to Operations • Property Expenditure for 2009/10 • Transfers to Public Entities & Revenue analysis • Transfers to EPWP and Non-Profit Institutions • Foreign Assistance for 2009/10 • Challenges experienced for period under review • Current detail expenditure

  3. AUDITOR GENERAL REPORT ON THE FINANCIAL STATEMENTS (Refer Annexure A) • Unqualified Audit • Donor funding Audit for 2009/10 in progress to be finalized by end of September 2010 • Unauthorized and irregular expenditure: No unauthorized or irregular expenditure was incurred in the current year . • Disclosure items in the Financial Statements The department complied with all disclosure requirements, classifications and policy frameworks as prescribed by Treasury. • Transfers to Agencies and other organizations All transfers made are per prior Management approval, Treasury approval and disclosure requirements.

  4. Budget and Expenditure Review for 2009/10

  5. Departmental Expenditure Trends

  6. Expenditure for the 2009/2010 Financial Year per Programme

  7. Expenditure per Economical Classification

  8. Payment for Capital Assets * Unutilized balance for the Projects paid back to National Treasury

  9. Reprioritization for funding shortfalls - 2009/10

  10. Property Management Expenditure 2007/08 2009/10

  11. Property Budget vs Expenditure

  12. Property Expenditure continued: • Property expenditure trends significantly increased from 2006/07 to 2009/10 to 141%. Increases not fully catered for, by DPW since 2006/07 • Annual shortfall absorbed by the department from 2009 (+-40 Million) • 122% of 2009 budget - already spent by December 2009 • Average Municipal & accommodation increase rate @ 10%- 14% • Average MTEF increase over 3 years @ 6-8% - therefore continuous shortfall over the MTEF • Projected increase in Municipality Fees of 25% in 2010.

  13. 500000 450000 400000 350000 300000 Compensationof Employees 250000 Goods and Services 200000 150000 100000 50000 0 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Baseline Compensation to Goods and Services

  14. Reasons for changes in compensation trends • 8% MTEF increase is insufficient to cover:- • Increases in establishment • additional posts for Environmental Management functions per Setion 40 of National Environmental Management Act (NEMA) • Overtime and Sea going allowances (mainly MCM) • Performance bonus • Pay progression increases • SMS increases -where not fully covered by Treasury *+-R 37 Million additional funds were therefore sourced from SRPP and non-comp budget to fund 2009/10 compensation shortfall

  15. Transfers to Public Entities & Revenue Analysis

  16. Reasons for transfers • Infrastructure development • Financial assistance • Ecological Restoration & Conservation development • Parks, Transfontier Parks development, Regional Economy & World Heritage sites • Land consolidation and rehabilitation • Tourism Infrastructure development • Alien plants control • People and Parks, Equity partnership & Co-Management of natural resources • Oceans & Coastal areas management Note: The Department needs to initiate models for measuring economic value of Conservation, Biodiversity and Economic Development as National Treasury is now initiating rationalization of transfers to Public Entities

  17. Transfer forExpanded Public Works Projects 2009/10

  18. Transfer forExpanded Public Works Projects 2009/10

  19. Transfer forExpanded Public Works Projects 2009/10

  20. Transfer to Non-Profit Institutions

  21. Transfer to Non-Profit Institutions

  22. Foreign Aid Assistance 2009/2010

  23. Detail Current Expenditure

  24. Detail Current Expenditure cont…

  25. Therefore Challenges experienced by the Department during 2009/2010 • Funding Entities deficits and slow Own Revenue Generation • Decreasing Donor funding • Accommodation allocation shortfall • Split Costs for establishing Tourism and Environment Department • Compensation of Employees shortfall • Use of Goods and Services shortfall for increased mandate of the Department

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