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QUARTERLY FINANCIAL PERFORMANCE PRESENTATION (3rd Quarter ending 31 December 2011)

QUARTERLY FINANCIAL PERFORMANCE PRESENTATION (3rd Quarter ending 31 December 2011). Presented by: Ms Yvonne Chetty Chief Financial Officer. 1 1. 3rd Quarter Performance for 2011/12 – overview 3rd Quarter Performance for 2011/12 – by Programme

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QUARTERLY FINANCIAL PERFORMANCE PRESENTATION (3rd Quarter ending 31 December 2011)

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  1. QUARTERLY FINANCIAL PERFORMANCE PRESENTATION (3rd Quarter ending 31 December 2011) Presented by: Ms Yvonne Chetty Chief Financial Officer 11

  2. 3rd Quarter Performance for 2011/12 – overview • 3rd Quarter Performance for 2011/12 – by Programme • Budget Composition per Programme for MTEF period • Forecast report for year end 31/03/12 PRESENTATION LAYOUT 22

  3. 3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12Overview – Economic Classifications 33

  4. 3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12 • As at the end of the third quarter, the Department had disbursed a total of R4.37 billion or 70.59% of the total budget allocation for the 2011/12 financial year • This total disbursement of R4.37 billion, was R561.9 million less than the available benchmark drawing of R4.9 billion from the National Revenue Fund, mainly due to the performance within the transfer payments classification. 44

  5. 3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12 • TRANSFER PAYMENTS • The Department had a total of R4.7 billion available to transfer to entities or implementing agents and an actual of R4.1 billion was transferred, resulting in a variance of R552 million. • The under spending of R552 million is mainly due to the following: Programme 2: Energy Policy & Planning • Transnet pipeline – R375 million for December not transferred Programme 3: Energy Regulation • Working for Energy Project – R17.5 million below budget • EEDSM Municipalities – R61.8 million not transferred Programme 4: National Electrification Programme • INEP Municipalities – R88.7 million not transferred 55

  6. 3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12 • GOODS AND SERVICES • The results reflected within the Goods and Services’ economic classification showed a R9.1 million year-to-date under spend. • This is mainly due to an under spending within Professional Services as a result of the delay in the implementation of the Energy modelling system. The saving will however be re-directed to other areas of spending to provide funding for the projected over spending under programme 1 and 4. • The YTD spending within goods and services of programme 2 is R7.55 million below budget due to an under spending, but these unspent funds will be redirected to other areas within the Department. 66

  7. MAJOR COST DRIVERS (Top 5) -GOODS AND SERVICES AS AT 31 DECEMBER 2011 77

  8. 3rd QUARTER FINANCIAL PERFORMANCE FOR 2011/12 • CAPITAL ASSETS • Although spending in Capital assets increased from R2.3 million in the last quarter to R3.1 million in the current quarter, this performance was still below the Department’s initial plan and resulted in an under spend of R3.5 million. • The Department had anticipated moving to the new office accommodation by 1 April 2012. The costs associated with this move, e.g. ICT costs, were catered for within this category. The move is delayed due to the internal processes at the Department of Public works. • The EDI-H assets were also transferred to the Department and DoE purchased lower quantities of assets than originally planned. 88

  9. FINANCIAL PERFORMANCE AS AT 31 DECEMBER 2011 – OVERVIEW BY PROGRAMME 99

  10. Programme 1: Administration 1010

  11. Programme 1: Performance Overview • Total spent in Programme 1 is R150.7 million against a YTD budget of R146.1 million. • The overall YTD shortfall of R4.7 million is mainly due to the overspending within the Compensation of employees classification Compensation of Employees • A total of R69.6 million has been spent YTD from an available budget of R60.6 million, resulting in a deficit of R9 million • The over spending is mainly due to positions being filled additionally to the approved establishment Transfers • Mainly due to reduced payments to departing employees – 141k Capex • Mainly due to the relocation of the DoE to the Landbank Building – 3.5 mil 1111

  12. Programme 2: Energy Policy and Planning • Compensation of employees: Negatively affected by vacancies • Transfer payments: R375 million below budget due to the delay in disbursing the 3rd quarter payment to Transnet in respect of the Petroleum pipelines • Goods and services: YTD spending within goods and services is R7.5 million below budget due to an under spending in Travel & subsistence, Professional Services & Inventory: Stationery. Professional services has mainly been affected by the delay in the implementation of the Energy modelling system 1212

  13. Programme 3: Energy Regulation • 30% overall under spent as at 31 December 2011 • Compensation of employees mainly due to vacancies • The under spending is mainly within the Transfer payments area • Transfer payments: R278.3 million was available for transfer as at the end of December and only R183.3 million was transferred resulting in an under spending of R95 million 1313

  14. Programme 3: Energy Regulation • Transfer payments details per entity/project: • Working for Energy: – R17.5 million below budget. A reclassification request was declined by NT • EEDSM Municipalities: – R61.8 million not transferred the result of Municipalities not adhering to contractual obligations • EDIH: - Core funding of R11.76 million not transferred. A submission for reclassification has been submitted to National Treasury for approval. 1414

  15. Programme 4: National Electrification Programme • The under spending is mainly within the Transfer payments area • The major contributor is the Conditional grants payable to municipalities, R88.7 million below the projection in terms of DORA payment schedules • The approval for the revision of the drawings schedule was received after the December pay run. Payments in the following period to be distributed as per the revised schedule 1515

  16. Programme 5: Nuclear Energy and Regulation • Total spent R617.8 million against a YTD budget of R621 million. • The 0.5% under spending is within the compensation of employees due to vacancies and savings within goods and services mainly in the Outsourced services expenditure category 1616

  17. TRANSFER PAYMENT SCHEDULE 1717

  18. BUDGET COMPOSITION PER PROGRAMME FOR 2011/12 TO 2014/15 MTEF ALLOCATIONS 1818

  19. 2011/12 FINANCIAL PERFORMANCEFORECAST FOR YEAR END 31/3/12 1919

  20. 2011/12 FINANCIAL PERFORMANCE • Transfer Payments • The estimated balance of R53.5 million is as follows: 2020

  21. Thank You! 2121

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