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Government Printing Works

Review of GPW's role in service delivery, corporitisation, and management weaknesses. Overview of products, strategic objectives, & ongoing developments. Audit opinion and corrective measures discussed.

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Government Printing Works

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  1. Government Printing Works GPW PresentationPortfolio Committee on Home AffairsAnnual Report for the Year ended 31 March 2007Tom Moyane - CEOCape Town 12 February 2008

  2. Government Printing Works Overview of the Year under Review • Contextualise the strategic role and position of GPW to service delivery programmes of DHA. • Review and report on the Corporitisation and transformation agenda within GPW. • Review the operating environment. • Review and report and the appropriate measures taken to address management weaknesses identified by the Office of the Auditor General during the audit in the context of 3 above .

  3. Government Printing Works MANDATE • To provide security printing needs of Government • to print all enabling face value documents: • birth certificates, • identification documents • passports, • visa labels • Permits and licenses. • to produce and distribute central Government information products: • Government gazettes, • Tender bulletins • Annual Reports

  4. Government Printing Works BACKGROUND • GPW is a Trading Account operating within the DHA vote • Received R199 000 • GPW operates purely on commercial basis : • Generates its revenue to defray costs. • Surplus is paid over to Revenue Fund at National Treasury. • Surplus retention is in place after consultation with & approval by National Treasury.

  5. Government Printing Works PRODUCTS AND SERVICES • Security Printing: • Passports, • ID’s, • Permits • licenses • examinations (questions & memoranda), • voters roll etc • Certificates (Road Worthy Certificates, etc) • Distribution & dissemination of Government Information: • Government Gazettes • Tender bulletins • Annual Reports • Supply of stationery

  6. Government Printing Works GPW STRATEGIC PLAN

  7. Government Printing Works Strategic Objective # 1Corporitisation • Preparation of a draft business case • Prepare a draft Security printer’s bill • Develop the Legal Transformation Process towards reconstituted organisation as public entity • Development of Holistic all encompassing conversion plan and accountabilities • Development of a new corporate identity and logo around 'brand promise'

  8. Government Printing Works Strategic Objective # 2Organisational Alignment and Staffing • Restructure organisation into a flatter organisation – on going. • Develop a health and safety strategy • Conduct skills assessment – on going

  9. Government Printing Works Strategic Objective # 3Develop a Marketing Strategy • Quantitative Market Survey and Analysis • Qualified and quantified present and future print market trends • Detailed competitor analysis • Benchmark against similar operations/ technology

  10. Government Printing Works Strategic Objective # 4Business Systems and Technology Improvements • Select and implement effective and efficient business systems – on going • Upgrade infrastructure and environment • Procurement of state of the art printing presses • Create capacity for proper Management Information and Business Intelligence

  11. Government Printing Works On Going Developments Corporitisation Successful printing and delivery of: • Draft Business Case - completed • Draft Security Printer’s Bill - completed • 1st Presentation to joint DPSA & Treasury Panel - 7 May 2007 • Review of the recommendations of the panel by TAP - On going • 2nd & Final Presentation to joint DPSA & Treasury – Waiting

  12. Government Printing Works Strategic Vulnerability Areas • People • Staff turnover - inability to attract the best skills including artisans, remuneration incompatible with industry norms. • Management • Leadership in terms of strategic & operational depth lacking. • Technology • Very old machines – average age +40 years (efficiency and quality affected and compromised) • Location • Current location not ideal – very old & inappropriate

  13. Government Printing Works AUDIT OPINION • Auditor General expressed an ADVERSE AUDIT opinion for the financial year ended 31/03/07.

  14. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Management of debtors. • Inventory. • Creditors (Payables). • Plant and Property. • Investigation. • Basic Conditions of Employment. • Information Systems Control and Communication. • Control Environment.

  15. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Management of debtors: • Lack of effective and efficient steps to collect outstanding debts • Corrective measures: • Identity top 10 defaulter with a view to take corrective measures on payments • Verification of the correctness of invoices issued • Monthly letters of demand and acknowledgement of debt to be sent Departmental CFO’s and DG’s • Last resort - consider termination of services to defaulting departments • Outstanding debt as of 31st March 2007 – R135,4 million • To date Jan 2008 outstanding debt - R138,3*

  16. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Management of debtors - continued • Suspense account resolved on a monthly basis • Debtors age analysis exceeded approved credit limits • Policy on long outstanding debtors • Debtors reconciliations & systems generated age analysis do not agree at year end • Corrective measures: • On a daily basis these accounts will be cleared as and when departments provide remittance advices. • Request collaboration of departmental CFO’s to submit remittance advises. • GPW will request departments to apply and agree on credit limits during the course of the year. • Formal policy on outstanding debts is in place and signed off 2006 and will be rigorously implemented • Age analysis on PECAS is real time!

  17. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Inventory Management • Thorough analysis of the system and processes will be done by the service provider to address inconsistencies between report and job tickets. • GPW relies on the PECAS software to evaluate its semi-finished products which are reflected in WIP • In the interim the profit margin on labour will be removed from WIP

  18. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Payables • To comply with IAS 39 on payables not recognised at fair value, the follow will be done: • GPW will bring consultants to train our people in order to address this problem. • Reconciliation of goods received account will be finalised by the end of February 2008. • Payment of all the suppliers within 30 days will be implemented with immediate effect. • Appoint a person to manage Creditors by April 2008

  19. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Property, Plant and Equipment • A thorough stock take will be conducted on assets for revaluation. • Write off and dispose of all unserviceable or obsolete equipment. • Update the asset register to be completed by the 28 March 2008. • In the next financial year all assets will be bar-coded.

  20. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Special Investigation • On-going • Gobodo Forensic Report pointed towards ‘possible’ wasteful or fruitless expenditure occurred between 1 April 2003 and 31 December 2004. • Management has sought second opinion from Special Investigation Unit (SIU) to check on possible materiality if any, in order to proceed with the final closure.

  21. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Basic Condition of Employment Act • Compliance to Section D.2(c) overtime concern Major contributory factors: • Staff turnover and high levels of resignations • Shortages in qualified artisans and machine minders • Incompatible remuneration policy • Pressure to deliver on time exacerbates need to increase overtime in contravention of section D.2(c).

  22. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Audit Committee & Internal Audi Fraud prevention plan • A fraud prevention committee has been formed to implement the fraud prevention policy which was officially signed off in November 2007. • In December 2007 a draft Whistle blowing policy completed which has been circulated for inputs before being signed off and implementation.

  23. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Audit Committee & Internal Audit - cont • Risk Assessment • The Audit Committee approved the previous risk assessment plan. • A risk plan was approved in November 2007. • Audit committee and internal function • In March 2007 a fully fledged GPW Audit Committee was established and has met regularly.

  24. Government Printing Works MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION” • Internal Control – Information Systems & Communication • Specific initiatives have been undertaken to improve IT control and communication environment • A strategic business plan has been formulated – circulated for comments, discussion and adoption by Exco before end of this financial year.

  25. Government Printing Works Achievements 2006/07 Successful printing and delivery of: • South African Examinations for Grades 9,10, 11 & 12 (Exam papers) QtyR • Limpopo 10,5mn 17,01mn • North West 0,92mn 1,48mn • Gauteng 1,13mn 3,87mn • Total Revenue generated22.36mn

  26. Government Printing Works Achievements 2006/07 Successful printing and delivery of: • Ministry of Finance (Lesotho) • Revenue Stamps 8,500 sheets R130 462,00

  27. Government Printing Works Achievements 2006/07 • Passport production 2006/072005/06 • Qty 1 041 478 1 013 724 • Value R18 746 604 R16 006 702 • Identity Cards produced 2006/072005/06 • Qty 2 079 114 2 255 225 • Value R9 480 760 R9 020 900

  28. Government Printing Works Achievements 2006/07 • Procurement - Contract Printing OrdersValue% • BEE 720 R89,4 mn 92 • Non BEE 66 R 7.7 mn 8 • To date BEE R130m • Procurement – Print Branch Value% • In House R168,6 mn 64 • Outsource R 97.1 mn 36

  29. Government Printing Works BALANCE SHEET AS AT 31 MARCH 2007 20072006 R’000R’000 ASSETS Non-current assets 25 520 35 723 Property, plant & equipment 25 520 35 723 CURRENT ASSETS 406 004 392 488 Inventories 96 022 103 338 Trade & other receivables 143 025 170 941 Cash & Cash equivalents 166 957 118 209 Total Assets 431 524 428 211 EQUITY AND LIABILITIES Funds 346 314 346 093 Capital fund 189 098 189 098 Machinery & Equip Fund 152 911 95 932 Funds distr to National Treasury 4 305 61 063 Current Liabilities 85 210 82 118 Trade & other payables 78 782 74 249 Provisions 6 428 7 869 Total Equity & Liabilities 431 524 428 211

  30. Government Printing Works COMPARATIVE ANALYSIS 2005/06 vs 2006/07 • Bank Balance • 2006/07 R166,9 million • 2005/06 R118,2 million • Growth 29,1% • Profitability • 2006/07 R61,0 million • 2005/06 R 4,3 million • Decrease (92,9)% • Debtors • 2006/07 R143,0 million • 2005/06 R170,9 million • Decrease in debts (16,3)%

  31. Government Printing Works THANK YOU

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