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Financial Report: DRDLR’s Annual Report ending 31 March 2015

Financial Report: DRDLR’s Annual Report ending 31 March 2015 Presentation to the Portfolio Committee on Rural Development and Land Reform 14 October 2015. Table of Contents. Executive Summary-Financial Performance Annual Financial Statements Statement of Financial Position

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Financial Report: DRDLR’s Annual Report ending 31 March 2015

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  1. Financial Report: DRDLR’s Annual Report ending 31 March 2015 Presentation to the Portfolio Committee on Rural Development and Land Reform 14 October 2015

  2. Table of Contents • Executive Summary-Financial Performance • Annual Financial Statements • Statement of Financial Position • Statement of Financial Performance • Statement of Changes in Net Assets • Cash Flow Statement • Report of the Auditor General • Summary of Audit Findings

  3. Executive Summary-Financial Performance • The Department’s total spending for the 2014-2015 financial year amounted to R9.4 billion, representing 99.4% of the Appropriation of R9.4 billion, leaving unspent funds of R59.5 million. • The greatest contributor to the unspent funds was Rural Development’s Goods and services (R35.7 million). • The second greatest contributor was the unspent funds of R10 million under Households Transfers, for projects that could not be finalized within the financial year. • These funds could not be utilised elsewhere in the Department due to the PFMA 8% limit on virements after the AENE. • Expenditure on goods and services decreased by R833 million or 38.2% from R2.1 billion to R1.3 billion in 2014/15. This is due to SCOA reclassification of NARYSEC expenditure to Households and cost containment measures that were implemented following the cost containment circular issued by National Treasury

  4. Executive Summary-Financial Performance

  5. Programme Expenditure

  6. Statement of Financial Position as at 31 March 2015

  7. Statement of Financial Position as at 31 March 2015

  8. …..Statement of Financial Position as at 31 March 2015

  9. Statement of Financial Performance for the year ended 31 March 2015

  10. ……..Statement of Financial Performance for the year ended 31 March 2015

  11. Statement of Changes in Net Assets for the year ended 31 March 2015

  12. Cash Flow Statement for the year ended 31 March 2015

  13. ……..Cash Flow Statement for the year ended 31 March 2015

  14. Public Entities and Trading Accounts

  15. Public Entities (Cont.)

  16. Programme Expenditure (cont.) • The department’s expenditure for the financial year 2014/15 amounted to R9,396 billion or 99.4% of the budget allocation of R9,455 billion. This resulted in an under-spend of R59 million • Transfer payments, excluding public entities

  17. Transfer Expenditure (cont.) • Transfer payments, excluding public entities (cont.)

  18. Transfer Expenditure (cont.) • Transfer payments, excluding public entities (cont.)

  19. Transfer Expenditure (cont.)

  20. Transfer Expenditure (cont.)

  21. Transfer Expenditure (cont.)

  22. Transfer Expenditure (cont.)

  23. Transfer Expenditure (cont.)

  24. Transfer Expenditure (cont.)

  25. Transfer Expenditure (cont.) • Transfer payments, excluding public entities (cont.)

  26. Transfer Expenditure (cont.) • Transfer payments, excluding public entities (cont.)

  27. Irregular, Fruitless and Wasteful expenditure • Fruitless and wasteful expenditure increased by 12% ( R 5,417 million to R 6,073 million) from previous year. This is due to the extension on the NARYSEC training program from 2 to 4 years due to the unavailability of accredited work place sites, unavailability of space at accredited colleges for further education and training and interest paid as compelled by the courts on Restitution matters. • The Department has also seen an increase in Irregular expenditure (R 12,647 million to R25,286 million:2014/15). This is due to non-compliance with Supply Chain prescripts. • These case are still in the process of being investigated by the Financial Compliance Committee.

  28. Irregular, Fruitless and Wasteful expenditure • On all the finalized cases of fruitless and irregular expenditure, warning letters were issued and disciplinary actions are underway for the officials who were found guilty. • The Department remains committed to eradicating non-compliance with the laws and regulations applicable to it. • The internal control environment is continuously being monitored for its effectiveness and weaknesses identified are addressed in order to improve financial management and the overall efficiency in the operations of the department • In addition the department has improved its standard operating procedures to identify fruitless and wasteful expenditure before it occurs

  29. Report of Auditor General • The audit report was issued by AGSA on 31 of July 2015 and the Department has obtained an unqualified audit opinion. • The audit report contains emphasis of matter regarding significant uncertainties. These matters were not as a result of audit findings but as disclosed upfront by the department in the notes to the AFS. The AG deemed it necessary to bring these matters to the attention of the users of the AFS. The emphasis was on: • Claims instituted against the Department amounting to R2 123 million. These claims are subject to the outcome of legal proceeding. As a result, no provision for any liability that may result has been made in the Department’s financial statements. • The Department has a possible liability towards the claimants in terms of the Restitution of Lands Rights Act, 1994 (Act No. 22 of 1994). The total amount of claims verified and on route for approval in terms of section 42D of this Act amounts to approximately R113 million, for which once approved by the Minister it will increase the commitment amount disclosed in Note 19 to the AFS.

  30. Report of Auditor General-cont • Provision has been made for the impairment amounting to R16 million. This relates to Inala Farms(Pty) Ltd which is in the process of being liquidated and the investment might not be recovered. • Provision amounting to R 99 million has also been made, of which R43 million relates to non-recovery of lease debtors and R28 million relates to provision for doubtful debts. • Other important matters were reported by the AG and the department has already developed Management Action Plans in order to address these matters. The action plans are monitored monthly by management and progress is reported to the Audit Committee & Senior Management Committee for oversight. • The Department remains committed to maintaining the unqualified audit opinion that it received and will continue to implement measures to attain this ideal.

  31. Summary of Audit Findings

  32. AGRICULTURAL LAND HOLDING ACCOUNT

  33. Contents 2014/15 unaudited financial results • Executive summary • Statement of Financial Position • Statement of Financial Performance • Statement of Changes in Net Assets • Cash Flow Statement • Other Financial Matters/Disclosures

  34. Statement of Financial Position as at 31 March 2015

  35. Statement of Financial Position as at 31 March 2015 - continued

  36. Statement of Financial Performance as at 31 March 2015

  37. Statement of Financial Performance as at 31 March 2015-continued

  38. Statement of Changes in Net Assets as at 31 March 2015

  39. Statement of Cash Flows as at 31 March 2015

  40. Statement of Cash Flows as at 31 March 2015 - continued

  41. DEEDS REGISTRATION TRADING ACCOUNT

  42. Contents • Executive summary • Statement of Financial Position • Statement of Financial Performance • Statement of Changes in Net Assets • Cash Flow Statement • Other Financial Matters/Disclosures

  43. Executive Summary • The Deeds generated revenue from the registration of deeds and sale of information amounting to R 522 million for the 2014/15 financial year, this is an increase of R7 million compared to prior year. • Total revenue amounted to R722 million, this grew from R603 million in 2013/14 or a 19.7% increase. • Surplus for the year amounted to R110 million showing an increase R5 million compared to prior year. This indicates an increase of 4.9%. • The closing balance on the current bank account as at 31/03/2015 was R290 million

  44. Statement of Financial Position for the year ended 31 March 2015

  45. Statement of Financial Position as at 31 March 2015 (cont)

  46. Statement of Financial Performancefor the year ended 31 March 2015

  47. Statement of Financial Performancefor the year ended 31 March 2015

  48. Cash Flow Statement for the year ended 31 March 2015

  49. Cash Flow Statement for the year ended 31 March 2015 (cont)

  50. Conditional grants received 2014/2015 • The Deeds Registration Trading Account received the following grants in 2014/2015 from the Department Rural Development and Land Reform: • E-cadastreproject R98, 3m • Annual salary increases R14, 9m

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