21 October 2009 Presented by Cathy Motsisi Chief Financial Officer

1. 21 October 2009Presented by Cathy MotsisiChief Financial Officer Presentation to: The Select Committee on Appropriations Financial Performance for the 1st Quarter of the Financial Year

2. Total DeptBudget vs Expenditure as at 30 June 2009

3. Expenditure Breakdown Per Programme (linear Target 25%)

4. Expenditure Analysis per Branch (Linear Target = 25%)

5. Analysis of the Current Budget per Branch - 30 June

6. Expenditure Analysis per Region – Linear Target 25%

7. Expenditure Analysis 1st Quarter- Earmarked Funds

8. Expenditure Analysis- Earmarked Funds Cont.

9. PROPERTY MANAGEMENT TRADING ENTITY (PMTE)Financial Performance 30 June 2009

10. Financial Performance of the PMTE Actual Claimed for Budget Received the Quarter R’000 R’000 R’000 Revenue 601,645 1,308,130b 5,316,190b State Accommodation 335,886 636,540 2,506,611b Private Accommodation charges 258,747 512,889 2,122,568 Management Fee (Municipal) 7,011 6,598 79,000 Augmentation - 152,103 608,011 Expenditure 1,280,980b Cleaning & Gardening 29,070 Leasing 686,436 Maintenance 521,026 Rates 44,330 Arrear Municipal 118,820 Deficit as at 30 June 2009(679,336) PMTE Bank Balance (Overdraft) (R1,5 billion)

11. Billing Challenges The department uses the Works Control System (WCS) system to generated invoices to clients for Capital Projects and Property Management Information System( PMIS) for Municipal Services Charges and Rental payments for leases. Challenges: • Billing happens monthly with a timing difference of one month except for leases which are billed quarterly. • The generation of invoices is highly manual as the systems used are not billing systems. • Invoices must first be validated by DPW Regional Offices and couriered back to head office for distribution to clients • Clients wait for the last quarter of the financial year to follow up on invoices with queries

12. Payment Challenges with clients • Disputes with Client department: • Occupation of leased properties • Disagreements on consumption ( Municipal Services) • Budgetary constraints • Purported lost invoices • Poor appreciation of payments to organs of state • Where the capital budget is under spent due to delays in project implementation, DPW assists client departments to request rollovers. • At the end of the first quarter DPW had already invoices R1,149 billion to client departments, however, only 52% was paid.

13. Action Plan for effective Billing System and Revenue Collection • Comprehensive action plans have been drafted for the full implementation of the PMTE. • One on one visits to client departments • Billing enhanced to provide itemized invoices • National Treasury engaged to enforce payment by departments • Capacity created to expedite invoicing much faster • Space audit will be conducted to ensure correct invoicing • A credible billing system will be implemented when the PMTE is fully established. • Systems for monitoring of consumption will be explored

14. Expenditure analysis of the PMTE

15. Analysis of the Capital Budget

16. Client Capital Budget Total Budget 2,386,811b • Expenditure to date 519,388 mil • Expenditure % 22% • Projections to 31 Mar 2010 3,911,184 • Projected over exp 1,524,373

17. I Thank You!