Review of Expenditure Trends&

MTEF Allocations2010/11 – 2011/12 -2012/13

Presentation by N Ngcaba20 April 2010

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Issues for Discussion

• Y/Y Comparative Expenditure Patterns Review• Challenges and Risks identified• Baseline and MTEF Allocations Review• Ratio of Goods and Services• Review of Foreign Assistance and Projects• Transfers to Public Entities• Efficiency Models and Resourcing the

Department

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Comparative Expenditure Patternsper Items

2007/08Budget

2007/08Audited

2006/07Budget

2006/07Audited

Compensation of EmployeesR’000

342 195

R’000

342 195

R’000

264 146

R’000

262 506

Goods and Services 323 076 321 154 281 093 281 093

Other Financial Equivalents209 209 203 203

Transfers: DEAT Agencies 1 373 701 1 373 701 1 042 176 1 042 176

Transfers: Non Profit Institutions 740 692 740 490 463 904 463 627

Transfers: Foreign Governments - - - -

Capital Asset 10 348 10 348 10 042 9 899

Departmental Totals 2 790 521 2 788 757 2 061 804 2 059 664

Y/Y spend 99,94% 99,90%

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Comparative Expenditure Patternsper Items

2008/09Budget

2008/09Audited

2009/10Budget

2009/10Audited

Compensation of EmployeesR’000

396 748

R’000

396 748

R’000

464 795

R’000

464 716

Goods and Services 358 470 356 441 440 318 434 308

Other Financial Equivalents572 572 158 158

Transfers: DEAT Agencies 1 567 303 1 567 303 1 672 009 1 671 931

Transfers: Non Profit Institutions 860 430 860 395 783 562 782 947

Transfers: Foreign Governments 9 000 9 000 9 000 9 000

Capital Asset 14 034 8 419 140 001 145 900

Departmental Totals 3 206 557 3 198 878 3 510 641 3 508 960

Y/Y spend 99,76% 99,95%

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Challenges Identified in Expenditure Trends of +/- 99%

• Inflation and global economic decline has significantly affected financial resources across all Entities

• Baseline short funding has drastically reduced the budget margin of safety on annual bases

• Further short funding is anticipated in outer years• Donor funds also expected to decrease therefore placing more pressure on the

department to fund environmental projects and mandates• More constraints anticipated in linking the MTEF to strategic plan, service delivery

and structure development• Possible delays in in the implementation of new or continuation of existing

environmental projects• DEA financial after split e.g. building, structure and systems still to be factored• Less flexibility and possible delays in internal & external co-ordination of

environmental mandates• Audit exposures for performance Audit where funds are not available• Unprecedented increase in occupancy and municipality costs

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Strategic Risks Identified

Risk Description Contributory Factor/s Inherent RiskShrinking Purse Reduction of MTEF allocations (NT)

leading to budget constraints16

Insufficient Baseline allocation for operational expenditure

Insufficient funds for the implementation of environmental mandates ands priorities

12

Insufficient funds for Intergovernmental Co-ordination and Integration

Insufficient funds for the co-implementation of environmental sector plans and systems

9

Possible loss of opportunities and leveraging of economic development

Limited developmental focus in the implementation of environmental mandate

9

Inadequate funds for internal integration

Insufficient funs for organizational growth, structure funding, systems development and knowledge expansion

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Review of Baseline Request and Allocations

2009/10 2010/11 2011/12

R’000 R’000 R’000

Departmental Baseline 3 446 860 3 762 673 3 614 173

Requested Adjustment to Baseline 450 195 621 000 1 042 000

Actual Adjustment to Baseline 68 340 164 393 581 931

Initial Total allocated (Dec 08) 3 515 200 3 927 066 4 196 105

Further cuts January 2009 (34 417) (42 990) (48 641)

Final Total Allocation January 2009

3 480 783 3 884 076 4 147 464

% Increase to Baseline 0.01% 3.2% 14.8%Note: 14% to the replacement of Polar Vessel – SA Agulhas

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Review of MTEF 2010/11 – 2012/13

2010/11 2011/12 2012/13

R’000 R’000 R’000

Departmental Baseline 3 884 076 4 147 464 4 345 921

Additional funds allocated to baseline 88 793 111 277 216 645

New Building - - 60 000

SAWS Early Warning System and Risk Reduction - - 5 000

Compensation of Employees adjustment 19 428 22 997 24 815

Earmarked EPWP Incentives 65 365 88 280 126 830

Earmarked Climate Change Dialogue 4 000 - -

% Baseline Increase .004% .005% .005%

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Cont… Review of MTEF 2010/11 – 2012/13

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2010/11 2011/12 2012/13

Adjustment, Efficiency Savings and Transfers (1 363 075) (1 441 205) (1 503 837)

DEA cut (3 635) (9 341) (531)

SANPARKS & MLRF Retained Revenue cuts (83 914) (88 613) (94 306)

Tourism Functions Transfer (1 155 108) (1 213 894) (1 273 355)

Fisheries Function Transfer (122 418) (129 357) (135 645)

DEA MTEF Allocation 2 607 794 2 817 536 3 058 729

Ratio of Compensation to Goods and Services

2009/10 2010/11 2011/12 2012/13

Compensation of Employees

R’000

260 293

R’000

324 869

R’000

351 536

R’000

368 862

Goods and Services 388 117 361 441 421 135 450 030

Current Ratio 1 : 1,49 1 : 1,34 1 : 1,19 1 : 1,22

Desired Ratio including inflation adjustment 1 : 1,8 1 : 1,9 1 : 2,0 1 : 2,2

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Foreign Assistance received and Projects Finalised

Donor Country 2006/07 2007/08 2008/09

European Union

R’000

676

R’000

0

R’000

0

UNEP 0 0 1 170

UNESCO 0 1 092 0

Netherlands 0 1 350 200

Denmark 14 527 17 087 16 267

Norway 13 672 25 425 30 802

Flanders 2 283 0 626

Total 31 158 44 954 49 065

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Foreign Aid Assistance

Country Project 2010/11 2011/12 2012/13

R’000 R’000 R’000

Denmark Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes

1 000 1 000 1 000

Tanzania Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes

146 146 146

Kenya Support for the Africa Institute for the Environmentally Sound Management of Hazardous and other Wastes

568 568 568

Denmark Urban Environmental Development Programme

3 385 4 326 5 338

World Bank African Stockpile Programme (Hazardous Waste)

1 576 2 754 -

Total 6 675 8 794 7 052

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Transfers to Public Entities MTEF

Public Entity 2010/11 2011/12 2012/13

R’000 R’000 R’000

South African Weather Services 135 915 142 469 149 671

iSimangaliso Wetland Park Authority 21 365 22 347 23 213

South African National Parks 174 718 167 698 183 163

South African National Biodiversity Institute 141 231 147 867 153 347

Total 473 229 480 381 509 395

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Infrastructure Investment MTEF

Sub Programme 2010/11 2011/12 2012/13

R’000 R’000 R’000

South African Weather ServiceInfrastructure InvestmentModernisation Programme

92 5007 654

010 202

00

iSimangaliso Wetland Park AuthorityInfrastructure InvestmentDuku Duku 23 000

037 000

5 00038 850

5 250

South African National Biodiversity InstituteInfrastructure InvestmentExpansion Botanical Gardens

10 0003 000

10 0005 000

10 0005 200

South African National ParksInfrastructure Development 0 60 000 63 000

Total 136 154 219 702 122 350

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Efficiency Models and Resourcing the Department

• Alternative funding & other ventures like co-funding are being explored by the department and its public entities for continued delivery of services

• Establishment and occupancy costs are being tightly monitored for their high cost nature, or exponential increase above MTEF and inflation.

• Timing of infrastructure and capital projects are annually monitored for inflations increases

• Non-priority programmes have been removed from the MTEF

• Strict budget and expenditure monitoring is being maintained for clean audits.

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Process for MTEF linkage to Strategic Plan, Deliverables and Performance

Strategicplan

Mediumterm

budget

Individualperformance

plans

Monthly/quarterlyreports

3 yearsUpdated annuallyIncludes budget information

Year 1

Detailed focus on first year ofstrategic plansIncludes output and servicedelivery information

Expenditure trends3 Year forward estimetesStrategic direction explainedPrevious year's outcome incorporatedwhen deciding resource allocation

Staff have performance agreements andindividual development plansLinked to departmental key objectives

and outputsIndicate individual contribution towardsachieving departmental objectives

Progress against budget andimplementing strategic plansHighlights departmental performance(financial and non-financial) against

targets

Environmental changes

Expenditure outcomes andnew budget allocations

Strategic direction changes

Annualreview

Annualreports

Audit Performance againstbudget and strategic plan

Meeting reportingrequirements - Treasury

and Public ServiceRegulations

Thank You

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