NDT Briefing to the Portfolio Committee on Tourism Annual Report 2014/15 16 October 2015 Department of Tourism

NDT Briefing to the Portfolio Committee on Tourism

Annual Report 2014/15

16 October 2015Department of Tourism

www.tourism.gov.za

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Contents

1. Auditor-General South Africa’s (AGSA) Report: 2014-15 Audit.

2. Financial Information.

3. Programme Performance Information.

4. Human Resource Environment.

5. Service Delivery Information.

6. Governance Issues including Forensic Audits and Litigation Matters.

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1. Auditor-General South Africa’s (AGSA) Report2014/15 Audit

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1. Auditor-General’s Report

• Unqualified audit

– The department received an unqualified audit for the 2014/15 financial year. • Matter of emphasis

– As disclosed in the accounting policy note to the financial statements, the National Treasury has exempted the department from applying the Modified Cash Standard in respect of infrastructure development projects.

• Pre-determined Objectives:– No material findings on the usefulness and reliability of the reported performance information for the

selected programmes were identified.

• Financial Statements:- The financial statements submitted for auditing were not prepared in accordance with the prescribed

financial reporting framework and supported by full and proper records as required by section 40(1) (b) of the Public Finance Management Act.

- Material misstatements of disclosure items identified by the auditors in the submitted financial statement were subsequently corrected, resulting in the financial statements receiving and unqualified audit opinion.

• Compliance with Laws and Regulations:- Relates to financial statements not prepared in accordance with the prescribed financial reporting

framework and supported by full and proper records as required by section 40(1) (b) of the PFMA.

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Auditor General’s Report … continued.

• Internal Controls:- Internal controls relevant to the audit of financial statements, annual performance

report and compliance with legislation.

- Internal controls to ensure that the annual financial statements included the commitments disclosure note in respect of the EPWP –Training programmes were not effective.

• Consultants:- No findings relating to the use of consultants by the Department were identified during

the audit.

• Fraud:- No matters indicating a risk of occurrence of fraud were identified.

• Other reports

At the time of concluding the AGSA report, an investigation was being carried out by the Department, and some of its findings were being interrogated. Possible irregular and fruitless and wasteful expenditure cannot be prior to finalistion of the investigation.

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2. Financial Information

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Budget and Expenditure Review for 2014/15

Programme Final

Appropriation (R’000)

Expenditure (R’000)

Expenditure as per % of Final Appropriation

1. Administration 224 961 219 783 97.7%

2. Policy and Knowledge Services 929 693 929 647 100.0%

3. International Tourism Management 45 169 45 094 99.8%

4. Domestic Tourism Management 383 437 363 070 94.7%

Total 1 583 260 1 557 594 98.4%

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Actual Expenditure Per Programme

14%

60%

3%

23%

Administration Policy and Knowledge Services International Tourism Domestic Tourism

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Expenditure per Economical Classification (Summary)

Economical Classification Final AppropriationR’000

ExpenditureR’000

VarianceR’000

Current Payments 467 602 460 786 6 816

- Compensation of Employees 232 076 231 504 572 - Goods and Services 235 526 229 282 6 244

Transfers and Subsidies 1 102 580 1 083 730 18 850

- Departmental Agencies and Accounts

886 257 886 257 -

- Universities & Technikons 3 720 3 720 -

-Foreign Governments 8 612 8 552 60

- Non-Profit Institutions 26 450 26 450 -

- Households 177 541 158 751 18 790

Capital Assets 12 816 12 816 -

- Buildings and other fixed structures - - -

- Machinery and Equipment 10 718 10 718 -

- Software and other intangible Assets

2 098 2 098 -

Payment for Financial Assets 262 262 - Total 1 583 260 1 557 594 25 666

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Actual Expenditure Per High Level Item

30%

70%

1%

Current Payments Transfer and subsidies Capital Assets Payment of Financial Assets

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Details of Variance

Details Amount ActionR'000

Current Payments- Compensation of Employees- Goods and Services

6 816572

6 244

Paid to National Revenue Fund in accordance with PFMA

Transfer payments- Foreign governments and International Organisations- Household

18 850

60

18 790

Paid to National Revenue Fund in accordance with PFMA

Payments for capital assets- Machinery- Intangible assets

- --

.

TOTAL 25 666

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3. Programme Performance Information

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90.91%

9.09%

International Tourism Management

92.00%

8.00%

Chief Operations Officer

86.67%

13.33%

Policy & Knowledge Service

64.29%

29.57%

7.14%

Domestic Tourism Man-agement

Achieved Not achieved Not achieved; however significant work done Insufficient information to express opinion

BRANCHES ANNUAL PERFORMANCE OVERVIEW

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2014/15 DEPARTMENTAL ANNUAL PERFORMANCE

84.62%

13.85%

1.54%

Achieved Not achieved Not achieved; however significant work done

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Insufficient information to express opinion

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PROGRAMME 1

ADMINISTRATION

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Key Performance Indicator

Target Actual Performance

Strategic Objective: Provide effective organisational performance management system.

Number of strategic documents developed and implemented.

Annual Performance Report for 2013/14 developed.

Annual Performance Report for 2013/14 was developed.

Four quarterly reports on the implementation of the Strategic Plan and Annual Performance Plan.

Four quarterly reports on the implementation of the Strategic Plan and Annual Performance Plan were developed.

Review of the Strategic Plan and APP for 2015/16.

Strategic Plan and APP for 2015/16 reviewed.

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Number of strategic documents developed and implemented.

• Four quarterly Risk Mitigation Reports analysed and submitted to Audit and Risk Committees.

• Secretariat for the Risk Management Committee (RMC).

Three quarterly Risk Mitigation Reports were analysed and submitted to Risk Management Committee.

Secretariat provided for the Risk Management Committee (RMC).

Deviation from planned target: Fourth quarter Risk Mitigation Report not analysed and not submitted to Risk Management Committee.

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NDT FOSAD and Cabinet Coordination and support system reviewed and implemented.

Review and implement internal protocol.

Protocol was reviewed and implemented.

South African Tourism (SAT) oversight developed and implemented.

Four SAT oversight reports.

Four SAT oversight reports were prepared.

Strategic Objective: Provide corporate legal support.

Percentage compliance with legal services litigation protocol.

100% compliance with legal services litigation protocol.

100% compliance with legal services litigation protocol.

Percentage compliance with Legal Services Delivery Charter.

100% compliance with Legal Services Delivery Charter.

100% compliance with Legal Services Delivery Charter.

Percentage compliance with legislative programme of the department.

100% implementation of legislative programme.

100% implementation of legislative programme.

Key Performance Indicator Target Actual Performance


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Strategic Objective: Provide corporate legal support.

Percentage of tourists’ complaints referred to appropriate authorities for a resolution within agreed time frame.

100% of tourists’ complaints referred to appropriate authorities for resolution within agreed time frame.

100% of complaints referred to appropriate authorities for resolution within agreed time frame.

Strategic Objective: Provide a capable and skilled workforce.

Maximum vacancy rate of 8% maintained.

Maintain a maximum vacancy rate at 8%.

Vacancy rate as at 31 March 2015 was at 6%.

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Percentage representation of designated groups.

Maintain minimum 50% women representation.

Women representation as at 31 March 2015 was at 53%.

Maintain minimum 5% rate of people with disability.

Rate of people with disabilities as at 31 March 2015 was at 5.3%.

Maintain minimum 91% black representation.

Black representation as at 31 March 2015 was a 95.1%.

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Percentage implementation of Performance Management Development System (PMDS).

100% implementation of PMDS. 100% implementation of PMDS.

Percentage implementation of Workplace Skills Plan (WSP).

Development and 100% implementation of WSP.

100% development and implementation of WSP.

Percentage compliance on management of labour relations cases in line with prescripts.

100% compliance on management and handling of grievances, misconduct, disputes collective bargaining.

100% compliance on management and handling of grievances, misconduct, disputes and collective bargaining.

Number of Employee Health and Wellness (EHW) programmes facilitated.

Four EHW programmes facilitated.

Four EHW programmes facilitated.

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Strategic Objective: Provide and maintain measures to protect people, property and information.

Number of security threats and risk assessments conducted.

Four security threat and risk assessments conducted.

Four security threat and risk assessments conducted.

Strategic Objective: Provide effective governance of Information Communication Technology (ICT).Ensure maximum uptime ICT services.

97% uptime on all ICT services and maximum of 3% service time.

Maintained 98.75% uptime on all ICT services and maximum 1.25% service time.

Development of Information Communications technology Strategic Plan (ICTSP)

2014-2018 ICTSP developed.

2014-2018 ICTSP developed.

Strategic Objective: Ensure economic, efficient and effective use of departmental resources.Number of quarterly and annual financial statements compiled and submitted.

Submission of four quarterly and one annual financial statement to National Treasury and Auditor-General South Africa.

Submission of four quarterly and one annual financial statement to National Treasury and Auditor-General South Africa.

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Strategic Objective: Ensure economic, efficient and effective use of departmental resources.

Percentage of expenditure on procurement from enterprises with Broad-Based Black Economic Empowerment (BBBEE) status level of contributor 1-8 (excluding government entities).

100% of expenditure on procurement from B-BBEE status level of contributor 1 to 8 enterprises

100% of expenditure on procurement from B-BBEE status level of contributor 1 to 8 enterprises achieved.

Strategic Objective: Provide effective Internal Audit Services.

Percentage implementation of the annual Internal Audit plan.

100% implementation of the annual internal audit plan.

100% implementation of the annual internal audit plan.

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Strategic Objective: Reach out to tourism stakeholders through targeted communication.Percentage implementation of the Communication Strategy (media engagement, branding, events management, internal, intergovernmental communication).

100% implementation of the communication strategy.

91% implementation of the communication strategy.

Deviation from planned target: 9% implementation of the communication strategy.

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PROGRAMME 2

POLICY AND KNOWLEDGE SERVICES

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Strategic Objective: Develop, implement and update tourism policies, strategies, programmes and plans.Number of initiatives aimed at implementing local government support programmes.

Two initiatives:

1. Capacity building for tourism practitioners and policy makers at local government.

Capacity building of policy- makers at local government was conducted.

2. Local Government Conference.

Local Government Tourism Conference was hosted.

Number of programmes implemented to support compliance with tourist guiding legislation and regulation.

One (Development of Annual Tourism Guiding Report on the current status of the tourist guiding sector).

Annual Tourist Guiding report on the current status of tourist guiding sector was finalised.

Strategic Objective: Promote Responsible Tourism best practice.

Report on the implementation of the National Responsible Tourism Strategy.

Report and implementation Plan for Universal Accessibility (UA) in Provincial Parks.

Report and implementation Plan for Universal Accessibility (UA) in Provincial Parks was developed.

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Strategic Objective: Monitoring and evaluation of tourism sector performance, strategies, policies and initiatives.

Number of tourism monitoring reports developed.

Two reports developed:

1. 2013 State of Tourism Report (STR).

2013 State of Tourism Report (STR) was developed.

2. 2013/14 NTSS Implementation Report.

2013/14 NTSS Annual Implementation Report was developed.

Number of evaluation reports on tourism projects and initiatives developed.

Two evaluation reports:

1. Chef Training Programme (CTP).

Report on the evaluation of the Chef Training Programme (CTP) was developed.

2. Report on tourism sustainability post land settlement.

Report on tourism sustainability post land settlement was developed.

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Strategic Objective: Provide research and knowledge management services to inform policy and decision making.

Number of information and knowledge system, services and frameworks developed, implemented and maintained.

Two Knowledge Systems developed.

1. Visitor information Knowledge Centre Database Tool.

Visitor information Knowledge Centre Database Tool was developed.

2. Tourist Guide Central Database.

Tourist Guide Central Database was developed.

National Visitor Information Framework (NVIF) implementation (Visitor Information Centre national directory and operational guidelines developed).

National Visitor Information Framework (NVIF) implementation (Visitor Information Centre national directory and operational guidelines developed).

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Strategic Objective: Provide research and knowledge management services to inform policy and decision making.

Number of information and knowledge system, services and frameworks developed, implemented and maintained.

Two NTIGs maintained: One land port or entry (Beitbridge) One airport of entry (ORTIA).

One NTIG maintained: One airport of entry (ORTIA) was developed.

Deviation from planned target: One NTIG not maintained: One land port of entry (Beitbridge) was not developed.

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Strategic Objective: Provide research and knowledge management services to inform policy and decision making.Number of research studies conducted.

Six Research studies conducted in collaboration with universities completed.Phase 2:• Services Excellence • Cross-border tourist

guiding.• Events impact evaluation.• Tourism competitiveness• Religious tourismNew study:• Facilities within municipal

parks.

Five Research reports of studies in collaboration with universities finalised.

Deviation from planned target: One Research study conducted in collaboration with universities was not completed.

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Key Performance Indicator Target Actual PerformanceStrategic Objective: To promote compliance with the Tourism Sector B-BBEE Codes.

Number of programmes implemented to promote compliance with the Tourism Sector Specific B-BBEE Scorecard and verification

Two programmes implemented:

1. Amendment of Tourism B-BBEE Codes.

Amendment of Tourism B-BBEE Codes implemented.

2. Feasibility assessment of creating a database of black owned enterprises in the tourism sector.

Feasibility assessment of creating a database of black owned enterprises in the tourism sector was done.

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PROGRAMME 3

INTERNATIONAL TOURISM MANAGEMENT

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Strategic Objective: To provide international tourism market (country and/or region) analysis to inform strategic interventions.

Number of response plans on markets (country & region) per year.

Three response plans for priority areas in markets developed and implemented:

1. Potential benefits of sports tourism for South Africa from the Brazil & Argentina hub.

Potential benefits of sports tourism for South Africa from the Brazil & Argentina hub identified.

2. Policy directive for expanded market penetration in North Americas.

Policy directive for expanded market penetration in North Americas communicated.

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Number of response plans on markets (country & region) per year.

Three response plans for priority areas in markets developed and implemented continued.

3. Strategic political interventions for the Nordic region, Russia, Indonesia and the GCC region developed & piloted.

Strategic political interventions for Russia, Indonesia, and GCC region piloted.

Deviation from planned target: Strategic political intervention for the Nordic region not piloted.

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Number of Initiatives facilitated to institutionalise tourism in SA Missions abroad.

Two initiatives to support SA Missions abroad undertaken:

1. Provision of marketing collateral in foreign languages.

Provision of marketing collateral in foreign languages done.

2. Capacity Building on the tourism functions as part of Economic Diplomacy training for officials of SA Missions abroad.

Capacity Building on the tourism functions as part of Economic Diplomacy training for officials of SA Missions abroad conducted.

Strategic Objective: To reduce barriers to tourism growth to enhance tourism competitiveness.Number of initiatives facilitated to reduce barriers to tourism growth per year.

One initiative undertaken:

Policy direction on situational reporting for segmented tourism markets.

Policy direction on situational reporting for segmented tourism markets done.

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Strategic Objective: To reduce barriers to tourism growth to enhance tourism competitiveness.

Number of policy positions or initiatives developed to enhance tourism competitiveness per year.

One initiative:Assessment of the potential for tourism in positioning South Africa as an aviation hub for the Southern Corridor to enhance tourism competitiveness one conducted.

Assessment of the potential for tourism in positioning South Africa as an aviation hub for the Southern Corridor to enhance tourism competitiveness one conducted.

Strategic Objective: To utilise bilateral and multilateral engagements to advance the tourism national, regional, Africa and global agenda.Number of strategic national priorities facilitated to implement International Agreements per year.

Two national priorities facilitated:1. Regional Integration: • Capacity Building Workshop

on grading and statistics targeted at African countries that South Africa signed Agreement with.

• Capacity Building Workshop on grading and statistics targeted at African countries that South Africa signed Agreement with conducted.

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Strategic Objective: To utilise bilateral and multilateral engagements to advance the tourism national, regional, Africa and global agenda.

Number of strategic national priorities facilitated to implement International Agreements per year.

Two national priorities facilitated continued.

1. Review of the implementation of the Indaba expansion policy.

• Review of the implementation of the Indaba expansion policy finalised.

2. Training: Policy framework for

international placement for skills development.

Policy framework for international placement for skills development developed.

Number of national priorities driven through strategic engagements in multilateral fora.

Implementation of one national priority:

1. Regional integration: Development of South Africa's policy position on tourism within SADC & AU.

Regional integration: Development of South Africa's policy position on tourism within SADC & AU done.

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PROGRAMME 4

DOMESTIC TOURISM MANAGEMENT

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Strategic Objective: To implement tourism growth and development strategies in order to increase tourism’s contribution to inclusive economic growth.

Number of national tourism programmes activated from the approved Domestic Tourism Growth Strategy’s action plan (Four National Programmes).

Four programmes:

1. National Tourism Career Expo (NTCE) hosted.

National Tourism Career Expo (NTCE) hosted.

2. Nine (9) educators' seminars held.

Nine educators' seminars held.

3. Annual Tourism Month hosted.

Annual Tourism Month hosted.

4. Implement prioritised programmes for Pillars 2,3 and 4 of the National Tourism Service Excellence Strategy:

4.1 Up-skilling Service Delivery. 4.2 Public Awareness. 4.3 Service Standards and Norms.

Prioritised programmes for Pillars 2,3 and 4 of the National Tourism Service Excellence Strategy implemented: 4.1 Up-skilling Service Delivery. 4.2 Public Awareness.4.3 Service Standards and Norms.

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Strategic Objective: To coordinate and facilitate the development and implementation of integrated Support Packages to enhance destination competitiveness.

Number of projects implemented from the approved tourism development strategies action plan for the development of integrated support packages (e.g. access, amenities, attractions, accommodation).

Two projects implemented: 1. Capacity Building

Workshop hosted.Capacity Building Workshop hosted.

2. Implementation of tourism interpretation signage in 04 WHS.

• Mapungubwe• Richtersveld• uKhahlamba -

Drakensberg• Cape Floral

(Baviaanskloof) WHS.

• The department did not physically implement the tourism signage, instead it transferred funds to the four management authorities and one NGO to implement.

• Treasury agreed to the department’s request to transfer the funds to the four management authorities and one NGO. The implementation will continue into the new financial year.

Deviation from planned target: The target was not correctly formulated as a result the department could not implement tourism signage directly in the WHS, hence the transfer of funds to the management authorities and the NGO.

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Key Performance indicator Target Actual Performance

Strategic Objective: To provide support to tourism businesses through funding and capacity building in order to grow tourism’s contribution to Gross Domestic Product (GDP).Incentive programme implemented to support enterprises to grow.

*Tourism Incentive Programme (TIP) Implemented.

TIP was partially implemented:• The system was designed and

developed.• The programme was launched.

Deviation from planned target: • Call for applications.• The receipt of applications.• Adjudication and awarding of

incentives.

*The management of Tourism Incentive Programme was transferred from programme 4 to Programme 2 at mid-year.

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Strategic Objective: To provide support to tourism businesses through funding and capacity building in order to grow tourism’s contribution to Gross Domestic Product (GDP).Number of rural enterprises supported per year.

489 #466

Deviation from planned target: 23

Number of enterprises supported to grow through mentorship.

34 #35


Number of businesses supported with market access.

450 #282


Number of Historically Disadvantaged Enterprises (HDE) supported per year.

1 263 #1 363


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Strategic Objective: To provide support to tourism businesses through funding and capacity building in order to grow tourism’s contribution to Gross Domestic Product (GDP).Number of enterprises trained (industry workshops, customer service, toolkits and business skills).

975 #1 203


Number of full-time equivalent (FTE) jobs supported through Tourism Enterprise Partnership per year.

2 475 #2 701


Number of Full Time Equivalent (FTE) jobs created through the social responsibility Implementation programme (EPWP) per year.

4 369 3 037

Deviation from planned target: 1 332

#TEP figures are based on the audited report of the Independent Auditor (Herman Leach Chartered Accountants (SA)) to the Board of Directors of the Strategic Partners in Tourism (Operating as Tourism Enterprise Partnership).

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4. Human Resource Information

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Employee Relations Cases

Total number of Reported Misconduct Cases

Finalised cases Pending Cases

11 9 2

Number of Grievances Reported

Grievances Resolved

Grievances Pending

10 6 4

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Workforce Representativity as end of 31 March 2015

TOTAL ESTABLISHMENT

Race Number Percentage

Africans 444 87

Coloureds 27 5

Indians 17 3

White 25 5

TOTAL 513 100

Persons with Disabilities 27 5.3

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Employees per Occupational Bands: March 2015

OCCUPATIONAL BANDMALE FEMALE

TOTALAfrican Coloured Indian White African Coloured Indian White

Top Management 2 0 0 4 2 0 0 1 9Senior Management. 21 2 4 1 20 2 3 2 55Professionally qualified and experienced specialists and mid-management.

99 3 4 5 94 8 4 6 223

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents.

77 3 0 0 97 8 2 6 193

Semi-skilled and discretionary decision making. 19 0 0 0 13 1 0 0 33

Unskilled and defined decision making. 0 0 0 0 0 0 0 0 0

TOTAL 218 8 8 10 226 19 9 15 513

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5. Service Delivery Environment

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Service Delivery Environment

• SA enjoys good reputation globally due to political stability and foreign policy.• SA’s cooperative governance approach is important for tourism mandate. • SA established trade relations with important global tourism markets.• Tourism sector’s relatively low barriers for entry by new entrepreneurs creating access

to economic opportunities for previously disadvantaged individuals• An enabling natural and cultural resource base for leisure and business tourism

providing opportunities for product development.• SA’s policy on management of natural resources and protected areas, and growing

interest in responsible tourism and eco-tourism, increases competitive edge.• Economic infrastructure supportive to tourism growth with areas for further

development identified.• SA’s unemployment rate and limited culture of travel amongst South Africans impacts

on the size of the domestic market, which affects its growth.• Worldwide growth of use of internet for online travel arrangements.• Tax, legal and travel restrictions (e.g. air passenger departure tax) imposed on

citizens impact on cost of travel.

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6. Governance Issues

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6. Governance Issues

• Risk Management:- RMC held 4 meetings in 2014/15 to discharge its governance responsibilities

relating to risk management in line with PFMA, NT Regulations and Public Sector Risk Management Framework.

- Strategic and operational risk assessments conducted.

• Fraud and Corruption:- Information disseminated to staff on fraud prevention, detection and reporting. - Fraud risk assessment conducted to identify and assess potential fraud risks and

response strategies to mitigate such risks (assessment mainly focused on high-risk areas - supply chain, departmental projects, IT, payroll and travel services management).

- Published fraud and corruption reporting hotline number published on Dept. website.

• Conflict of Interest:- 100% compliance by SMS members on disclosure of financial interests.- Draft policy on performance of remunerated work outside of the Department was

being finalised. - Tender Committee members required to read, complete and sign declaration of

interest forms.

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6. Governance Issues including Forensic Audits and Litigation Matters ... Continued.

• Code of Conduct:- Department has Code of Conduct setting minimum compliance standards by

employees. Any alleged breach is regarded as misconduct, to be investigated and followed by disciplinary action and appropriate sanctions.

• Health, Safety and Environment:- Health and safety representatives, fire marshals and first-aiders appointed and

completed training in basic first aid and fire-fighting. - Additional fire equipment installed in the Department to ensure proper fire

detection.

• Audit Committee:- Audit Committee held 4 meetings in 2014/15 to discharge its oversight

responsibilities and ensure that Department has and maintains effective, efficient and transparent systems of financial, risk management, governance and internal control.

• Forensic Investigations:- Forensic investigation conducted on 13 SRI projects. The department is

implementing the recommendations of the report and cases have been opened with SAPS, where applicable. With regard to departmental officials, internal disciplinary process is being followed.

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Thank You

Documents

NDT Briefing to the Portfolio Committee on Tourism Annual Report 2014/15 16 October 2015 Department of Tourism