budgetary Review and Recommendation Report (BRRR) of the Portfolio Committee on THE ENTITIES OF THE Environmental Affairs, NAMELY SOUTH AFRICAN NATIONAL PARKS (SANPARKS), ISIMANGALISO WETLAND PARK AUTHORITY (ISPA), SOUTH AFRICAN WEATHER SERVICE (SAWS) AND SOUTH AFRICAN NATIONAL BIODIVERSITY INSTITUTE (SANBI) ANNUAL REPORTS AND FINANCIAL STATEMENTS FOR 2016/17 FINANCIAL YEAR, DATED 17 OCTOBER 2017.
The Portfolio Committee on Environmental Affairs (hereinafter the Committee), did not consider the Department of Environmental Affairs’ Annual Report for the year under review as there is a dispute between the Office of the Auditor General South Africa (AGSA) and the Department regarding the different interpretation with regard to the application of Modified Cash Standards as it relates to transfer payment for the Expanded Public Works Programme (EPWP) projects. This difference in interpretation and application of the Modified Cash Standard has existed for some time now. The National Treasury has facilitated the appointment of an independent mediator to help mediate a process of finding a solution on the issues in dispute between the Department and the AGSA. This mediation process undertaken by all the relevant parties together with the independent mediator was at an advanced stage, but it was not finalised by 30 September 2017 when the 2016/17 annual report of the Department was due for submission and tabling in Parliament as statutorily required by section 65 of the Public Finance Management Amendment Act (PFMA), 1999 (Act No 29 of 1999).
Consequently, having considered the performance and submission to Parliament for the medium-term period of the entities reporting under the Department of Environmental Affairs entities, namely: the South African National Parks (SANParks), iSimangaliso Wetland Park Authority (IWPA); South African Weather Service (SAWS) and the South African National Biodiversity Institute (SANBI), and having further interacted with the AGSA on their respective reports on the performance of the environmental portfolio, on 3 and 4 October 2017, the Committee reports as follows:
1.1 Mandate of the Committee
The mandate of the Portfolio Committee is to enhance the principles of a developmental state through passing legislation and to facilitate public participation, monitoring and oversight functions over the legislative processes relating to the environment; confer with relevant governmental and civil society organs on the impact of environmental legislation and related matters; and to enhance and develop the capacity of committee members in the exercise of effective oversight over the Executive Authority. Thus, the core mandate of the Committee is to:
- Consider legislation referred to it;
- Conduct oversight of any organ of state and constitutional institutions falling within its portfolio;
- Consider international agreements; and
- Consider the budgets, strategic plans, annual performance plans and related performance reports and targets of the Department and entities falling within its portfolio.
- PURPOSE of the Budgetary Review and Recommendation Report
The Money Bills Procedures and Related Matters Amendment Act No 9 of 2009 (the Money Bills Act) sets out the process that allows Parliament through its committees to make recommendations to the Minister of Finance to amend the budget of a national department. In October of each year, portfolio committees must compile the Budgetary Review and Recommendation Reports (BRRRs) that assess service delivery performance given the available resources; evaluate the effective and efficient use and forward allocation of resources; and may make recommendations on forward use of resources.
The BRRR is based on a comprehensive review and analysis of the previous financial year’s performance, as well as performance to date. In addition to the Annual and Quarterly reports, the BRRR also sources documents for the Standing/Select Committees on Appropriations/Finance when they make recommendations to the Houses of Parliament on the Medium-Term Budget Policy Statement (MTPBS). The Budgetary Review and Recommendations Report of the Portfolio Committee is based on the information that it accessed through various engagements with the departmental entities, namely, the SANParks, iSimangaliso, SAWS and SANBI as well as the AGSA on their respective reports on the performance of the environmental portfolio. It is in this regard that the Portfolio Committee reports as follows:
- OVERVIEW of the Auditor-General’s Audit Outcome Report for 2016/17
The Auditor-General of South Africa (AGSA) has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, established to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing of public governance and annual performance targets, inter alia. In so doing, the Auditor-General builds public confidence in the manner in which the environmental portfolio is governed and administered on behalf of the South African population.
In line with this mandate, the Auditor-General of South Africa provided an overview of the audit outcomes and other findings in respect of the Environmental Affairs portfolio for the period under review – the 2016/17 financial year. The AGSA reported that the quality of the annual performance reports submitted by DEA entities for the audit had retrogressed significantly for two entities (SANParks and SAWS) over the previous year, with entities having received material findings on usefulness or reliability of the information submitted for auditing purposes. SANParks even failed to correct certain misstatements that had been brought to its attention by the Auditor-General. Similarly, SANBI would not have achieved a clean audit opinion if it had not corrected certain material misstatements that the Auditor-General had brought to its attention, meaning that internal controls were relatively weak in these three departmental entities.
The following findings, relating to the Department’s four entities were highlighted:
3.1 South African National Parks
For the 2016/17 financial year, SANParks retrogressed, having obtained unqualified audit opinion with material findings on performance information, in terms of the usefulness and reliability of material indicators that pertain to the “percentage reduction in recorded fatalities of rhinos and elephants poached as a ratio of recorded number of poaching activities in the Kruger National Park (KNP)”. The framework for managing programme performance information requires SANParks to have appropriate systems to collect, collate, verify and store performance information to ensure reliable reporting of actual achievements against planned objectives, indicators and targets. The reported achievement of 7.2 per cent reduction in recorded fatalities of rhino and elephant poached in KNP was not adequately supported by sufficient appropriate audit evidence due to errors identified in the supporting listings of the current year and insufficient information provided to support the prior year achievement.
The second material finding relates to the “percentage growth in total number of local black visitors”, which the Auditor-General was unable to obtain sufficient appropriate audit evidence for the reported achievement of the target of two per cent, as the systems implemented by management did not permit accurate verification of the reported performance. The reliability of the reported achievement of this indicator could not be determined. Thirdly, the Auditor-General was unable to obtain sufficient appropriate audit evidence for the reported achievement of the target of four per cent growth in “overnight local black visitors” as the systems implemented by management could not be accurately verified. Fourthly, the reported achievement for the target – “total number of free access entrants during SANParks week and other planned events” − was misstated as the evidence provided indicated that the actual free entrants during the SANParks week was 48 603 as opposed to 62 312 as reported in the annual performance report of the entity. Finally, the Auditor-General indicated that SANParks management did not design and implement appropriate systems and internal controls to report reliable performance information for certain indicators and there was an amount of R955.000 irregular expenditure incurred in the 2016/17 financial year.
3.2 iSimangaliso Wetland Park Authority
For the 2016/17 financial year, iSimangaliso Wetland Park Authority sustained its clean audit opinion as a result of maintaining adequate controls throughout the period under review.
3.3 South African National Biodiversity Institute
SANBI improved significantly in the year under review, obtaining an unqualified audit opinion with no findings in the 2016/17 financial year relative to the 2015/16 audit outcome of an unqualified audit opinion with findings. Notwithstanding, the Auditor-General identified material misstatements in the Annual Performance Report submitted for auditing in programmes 2, 4, and 6 (manage and unlock benefits of the network of NBGs as windows
into South Africa’s biodiversity; assess, monitor and report on the state of biodiversity and increase knowledge for decision-making, including climate change; and provide human capital development, biodiversity education and awareness in response to SANBI’s mandate). However, the management of SANBI subsequently corrected the misstatements, meaning that SANBI received an unqualified opinion only after correcting the errors identified during the audit process. There was also an irregular expenditure of R95 887.00 reported for the period under review.
- South African Weather Service
For the 2016/17 financial year, SAWS received a clean audit opinion, however, the Auditor-General noted that in the annual financial statements there were material misstatements submitted. The Auditor-General also identified inadequate monitoring of the Supply Chain Management legislation, which resulted in non-compliance relating to procurement above R500 000. It was further reported that prepayments were made wherein SAWS was not contractually required to make such payment, contrary to the requirements of Treasury Regulations. As a result, an irregular expenditure of R3 087 620 was incurred by SAWS in the 2016/17 financial year. The AGSA recommended that management must enhance their monitoring controls over compliance with laws and regulations.
4.OVERVIEW of perfomance BY THE DEPARTMENTAL ENTITIES
4.1 South African National Parks’ mandate
SANParks was established in terms of the National Environmental Management: Protected Areas Act (Act No 57 of 2003), with the mandate to conserve, protect, control and manage national parks and other defined protected areas and biological diversity. Accordingly, SANParks is organised to serve three critical objectives: conservation, responsible tourism and socio-economic development. The key mandate of the organization is the conservation of South Africa’s biodiversity, landscapes and associated heritage assets through a system of national parks. SANParks has a significant role in the promotion of South Africa’s nature-based tourism, or ecotourism business targeted at both international and domestic tourism markets. The eco-tourism component provides for the organization’s self-generated revenues from commercial operations that are necessary to supplement government funding of conservation management.
SANParks has also taken a strategic decision to expand its role in the development of neighbouring communities, as the organization is required to build constituencies at international, national and local levels, in support of conservation of the natural and cultural heritage of South Africa through its corporate social investment. SANParks plays an important role in ensuring that a broad base of South Africans participate and get involved in biodiversity initiatives. It is in executing its legal mandate that SANParks achieved the following targets in the year under review (2016/17) under the following respective strategic objectives:
4.1.1 Improved representative conservation estate
- The target of 1 387 ha for terrestrial area added to national parks was exceeded (3 873 ha);
- The target to determine the State of Biodiversity Baseline was met at 53 per cent;
- Midterm METT Report was submitted to DEA, as planned;
- The target to determine the State of Area Integrity Baseline was done at 69 per cent;
- The target to identify three parks (Golden Gate Highlands NP, Mokala NP, Mountain Zebra National Park) as ready for energy consumption audit for the 2017/18 financial year was achieved; and
- The target to identify three parks (Agulhas, Bontebok and Wilderness Section of Garden Route NP) as ready for water consumption audit was met.
4.1.2 Effectively managed ecosystem, species and cultural heritage assets
- The target for total hectares of land rehabilitated/restored for initial and follow-up was achieved, whereas the target for wetlands was not met;
- The target to review two Park Management Plans was achieved (e.g., for the Karoo and Mokala National Parks);
- The target of two per cent reduction in recorded fatalities of rhinos and elephants poached as a ratio of recorded number of poaching activities in the KNP was exceeded as 7.2 per cent reduction in recorded fatalities of rhino and elephant was achieved (the AGSA disputed this achievement);
- The target to achieve a zero-number of rhinos poached per annum in 6 rhino parks other than KNP was attained;
- The target to implement 100 per cent of planned annual activities on the Rhino Management Strategy was met;
- The target to realise two per cent increase in SANParks EMI fines for key species and arrests for key species was exceeded by 47.5 per cent and 59.6 per cent in the 2016/17 financial year, respectively;
- Determination of sustainability threshold for rhino, elephant, cycad and penguin species was done; and
- The target to complete the SANParks Wildlife Utilisation Strategy and to finalise the SANParks Cultural Heritage Management Plan was realised.
4.1.3 Enhanced knowledge for decision making
- The target for rating 75 per cent of research projects as essential and relevant to SANParks key issues was exceeded by five per cent; and
- A total 41 peer-reviewed articles were published in the 2016/17 financial year, more than the target of 20 publications.
4.1.4 Enhanced tourism returns
- The percentage of growth in Gross Operating Tourism Revenue grew by 14.5 per cent, more than the projected 11 per cent;
- Total number of visitors to national parks rose to 6 750 083, exceeding the 6 034 000 target;
- The percentage of growth in total number of local black visitors grew to 10 per cent, exceeding the two per cent target (although the AGSA held a different view on this target’s achievement);
- Percentage growth in overnight local black visitors reached to 16.7 per cent, more than the four per cent target (the Auditor-General did not agree with this achievement);
- Accommodation occupancy rate increased to 74 per cent, more than the 72.5 per cent;
- Total number of accommodation unit nights sold grew to 576 289, exceeding the 565 600 target; and
- Customer Satisfaction Index rose to 81.9 per cent, as opposed to the 78 per cent target.
4.1.5 Diversified and enhanced tourism opportunities and experiences
- Eleven revenue-generating products were developed, short of the 13 products target; and
- The target of implementing six Visitor Plans and three Interpretation Plans was not met, as only four Interpretation and Visitor Management Plans were implemented.
4.1.6 Optimised contribution to the green and blue economy
- The target of creating 6 469 full-time equivalent jobs was missed, as only 6 013 FTE jobs were created;
- The target of supporting 540 SMMEs/enterprises was overachieved, with 856 SMMEs having been supported in the year under review;
- The target for implementing two Green Economy and Blue Economy projects was attained; and
- The target of implementing four Science Labs and one e-learning support system, as part of social legacy projects, was fully met.
4.1.7 Enhanced awareness and skills
- The total number of participants in environmental education programme dropped to 205 815, less than the 218 000 target; and
- The total number of Free Access Entrants during SANParks week and other planned events reached to 62 312, more than the planned target of 54 000, although the AGSA held a different view on this target.
4.1.8 Enhanced stakeholder engagement
- The target for total number of proactive media engagements of 125 media releases and 10 media events were exceeded as 239 media releases were generated and 126 media events were convened;
- Positive or neutral media reputation rating target of at least 95 per cent was achieved; and
- Responding to all PAIA requests within timeframes was achieved at 100 per cent.
4.1.9 Adequate, appropriately skilled, transformed and diverse human capital
- The target to attain 60 per cent of black people in management was not met at 56.7 per cent, whereas the target for achieving 50 per cent of women in management was not also met at 37.2 per cent;
- The target to achieve two per cent of people living with disabilities was exceeded at 2.1;
- The total male: female ratio of 1:0.8 was not met at 1:0.6;
- The target for 76 per cent of employees meeting minimum educational requirements (C and upper) was not met at 74 per cent; and
- The target to spend three per cent of payroll spent on the Skills Development Programme was not achieved at 0.29 per cent.
Furthermore, SANParks met all its targets under the strategic objective of creating a conducive working environment; optimised business processes and knowledge management systems; and accountable corporate governance. Similarly, under the strategic objective of financial sustainability, the organisation attained a good income ratio (1.11:1) better than anticipated and did well on many other indicators, with the exception of having attained three per cent over-expenditure on its allocated budget. SANParks also did not fully implement its fundraising strategy, thereby failing to raise the R50 million revenue target that it set for itself.
4.2 iSimangaliso Wetland Park Authority
The iSimangaliso Wetland Park Authority in KwaZulu-Natal was established in terms of the World Heritage Convention Act (Act No 49 of 1999), with the mandate to ensure that effective and active measures were taken in the Park for the protection and conservation of World Heritage Convention values; promote empowerment of historically disadvantaged communities living adjacent to the Park; promote, manage, oversee, market and facilitate optimal tourism and related development in the Park; and encourage, sustain, invest and contribute to job creation.
The iSimangaliso Wetland Park Authority has executed its mandate exceptionally well, for example, the 2016/2017 Annual Report of the organisation that was tabled by the Minister of Environmental Affairs in Parliament in September 2017 gave the iSimangaliso Wetland Park Authority an unqualified audit opinion from the Auditor-General for more than a decade in a row. Covering a 3 280-square kilometres area, iSimangaliso is the third largest park in South Africa and the first listed World Heritage Site in South Africa in 1999.
The 2016/17 Annual Report of the iSimangaliso Wetland Park Authority indicates that iSimangaliso had 27 of its targets on target and four of them off target, as indicated under the following respective programmes outlined below.
4.2.1 Conservation and park operations
- Targets for the number of park management meetings attended with day-to-day conservation manager (6), new environmental audits completed (6), and of follow-up environmental audits completed (5) were all exceeded by a factor of one each;
- The target for deploying 30 environmental monitors in iSimangaliso was not met at 28;
- The target for treating 15 500 ha of invasive alien plants was exceeded at 27 795 ha;
- The target for cleaning 320 kilometres of accessible coastline was achieved;
- The 100 per cent target for annual controlled burning programme was not achieved at 21 per cent;
- The 80 per cent target set for processing applications for developments in the buffer zone was exceeded at 100 per cent; and
- The 100 per cent targets for identifying unauthorised and authorised developments, and for the completion of annual infrastructure maintenance programme was met, respectively.
- The targets for creating 1 782 temporary jobs, 250 people participating in SMMEs and skills development programmes, and awarding of 24 bursaries were all exceeded at 1 813, 371 and 36, respectively;
- The target for attaining 4 800 training days was missed at 4 785; and
- The 76 per cent target for procurement from black-owned suppliers was met.
- The target for raising R17.4 million revenue was exceeded at R18.9 million;
- The target for 480 000 visitor entries into the Park was exceeded 484 614;
- The target to retender 80 per cent of lapsed licenses/concessions was achieved;
- The 60 per cent target for the implementation of plan in respect of new tourism developments was not achieved at 50 per cent; and
- The targets for implementing three annual events, 100 per cent implementation of annual marketing and PR programme, and 90 per cent implementation of annual infrastructure programme were all met.
4.2.4 Finance and administration
- Achieved the target for approving 50 new research proposals that relate to management;
- Met the target for conducting two visitor market surveys;
- Attained the targets for 100 per cent completion of the environmental education plan for the year, implementation of plans to mitigate the impact of identified threats to rare and endangered species and ecosystems, and completion of plans requested/required within the financial year;
- The target for attaining an unqualified audit opinion was achieved;
- The target to complete assessment for business systems improvements and technical requirements was met; and
- The 90 per cent target for retention of skills was overachieved at 97 per cent.
4.3 South African National Biodiversity Institute (SANBI)
SANBI was established in September 2004, in terms of the National Environmental Management: Biodiversity Act (Act No 10 of 2004). The mandate of the Institute is to monitor and report regularly on the status of South Africa’s biodiversity, which includes all listed threatened or protected species, ecosystems and invasive species; and the impact of any genetically modified organisms that have been realised into the environment. The Institute is also mandated to act as an advisory and consultative body on matters relating to organs of State and other biodiversity stakeholders; coordinate and promote the taxonomy of South Africa’s biodiversity; manage, control and maintain all national botanical gardens, herbaria and collections of dead animals that may exist; and advise the Minister of Environmental Affairs on any matter regulated in terms of the Act, and any international agreements affecting biodiversity that are binding on South Africa.
In the year under review (2016/17), SANBI had 38 planned targets of which the Institute exceeded nine, fully met 24 and substantially achieved five. This translates into the total achievement percentage of 87 per cent in the following targets for the reporting period 2016/17:
4.3.1 Render effective and efficient Corporate Services
- The target to allocate and spent two per cent of payroll on staff development was met;
- The targets to transform the Institute that reflects the demography of the South African population, in terms of males, females and people living with disabilities were met;
- The target to increase two per cent of income generated on rental, admission sales and other income was exceeded at 22 per cent;
- The target to achieve unqualified annual financial statements to comply with PFMA and GRAP requirements was met;
- The target for attaining 90 per cent availability of ICT Services was overachieved at 100;
- Fully updated, mitigated and monitored all risks, as planned;
- Complied with all relevant Acts and SANBI/DEA protocol through implementation of the Compliance Framework;
- Met all the targets for hosting four shows, four exhibitions, 12 Concerts, 12 Events and four campaigns/activations during the year under review; and
- Utilised the four internal communication platforms during the year, as planned.
4.3.2 Manage and unlock benefits of the network of National Botanical Gardens as windows into South Africa’s biodiversity
- The target to establish and operate new National Botanical Gardens was partially achieved;
- The target to complete 45 maintenance/development projects and two SANBI capital infrastructure projects was achieved;
- The target to add 20 new indigenous plant species to the living collections of the combined network of National Botanical Gardens and/or Millennium Seed Bank was met; and
- The target to attain a minimum of two per cent increase in visitor numbers through expanded tourism-related activities and events in National Botanical Gardens was exceeded at nine per cent.
4.3.3 Build the foundational biodiversity science
- The target for compiling information on 4 200 South African plant and 1 000 animal species was exceeded at 4 916 South African plant and 1 014 animal species;
- Actions and plans to finalise ecosystem classification systems and maps, as approved by the National Committee were completed for terrestrial, freshwater, estuarine and marine systems were completed as per the plan; and
- The target to add 12 000 records to plant database and 35 000 records to animal database was exceeded with 16 473 plant records and 35 054 animal records added.
4.3.4 Assess, monitor and report on the state of biodiversity and increase knowledge for decision-making, including adaptation to climate change
- The target to publish 75 articles was exceeded by 42 publications, (in total 117publications were produced);
- The National Biodiversity Assessment 2018 operational plan meeting targets were agreed to by the Core Reference Group and Steering Committee, as scheduled;
- The National Invasive Species Report (NISR) was initiated and the plan partially implemented;
- The plan to submit the GMO Monitoring Plan to the Department of Environmental Affairs by the end of March 2017 was on target;
- Red List Assessment for line fish was completed and posted on the official national Red list website for South African Species Status and Information, according to plan;
- The target for one update for Non-Detriment Findings for the Scientific Authority was partially met; and
- The plan to initiate three large research and assessment programmes was on target.
4.3.5 Provide biodiversity policy advice and access to biodiversity information; and support for climate change adaptation
- Met the target for producing two tools, including an Ecosystem Restoration Decision Support Tool and an Online User Tool for accessing biodiversity information;
- Achieved the target to develop and disseminate three knowledge resources;
- Successively convened and hosted four learning or coordination events hosted, including the Biodiversity Planning Forum, the Biodiversity Information Management Forum, the Freshwater Ecosystem Network and the National Management, Research and Planning (MAREP) Forum;
- Held four training sessions, including geo-referencing training, the UEIP-UCPP Learning Exchange to build capacity in catchment management and held two training sessions on Biodiversity GIS (BGIS), as planned;
- Responded 100 per cent to all written requests from DEA and other organs of state within stipulated timeframe;
- Met the target to share lessons and experiences from the National Implementing Entity (NIE) at four fora, including Adaptation Futures 2016, Treasury Innovation Fund Workshop, UNFCCC COP, and ICLEI Local Climate Solutions for Africa (Water and Climate Congress); and
- Met the target to identify a biodiversity tool into which Climate Change Adaptation would be incorporated.
4.3.6 Human capital development: drive human capital development, education and awareness in response to SANBI’s mandate
- The target to develop 92 professionals through structured internships and postgraduate studentships was partially met with only 66 professionals trained;
- The target for 1 000 beneficiaries to participate in Biodiversity Careers Programme was exceeded at 1 338 beneficiaries;
- The target to reach 50 000 garden and school-based beneficiaries was exceeded as 55 373 beneficiaries participated; and
- Fully achieved the annual assessment of iSpot records and the review of SABAP contract.
4.4 South African Weather Service (SAWS)
The mandate of the South African Weather Services (SAWS) was established in terms of the South African Weather Service Act (Act No 8 of 2001). Its mandate is to provide two distinct services, i.e., the public good service, which is funded by the Government and commercial services where the user pays principle applies. This entails maintaining, extending and improving the quality of meteorological services; providing risk information, which is essential for minimizing the impact of disasters; collecting meteorological data over oceans; and fulfilling Government’s international obligations under the World Meteorological Organisation and the International Civil Aviation Organisation.
For the period under review (2016/17), SAWS achieved 26 of its 31 targets; substantially achieved two targets; and did not meet three of its planned targets. Overall, SAWS achieved a total performance percentage of 84 in the following strategic objectives:
4.4.1 Provision of products and services
- 'As is' Report was completed as per plan;
- Completed Climate Change Reference Atlas and launched it on the World Meteorology day (23rd March 2017);
- Developed One Water Sector Speciﬁc Product viz Precipitation Concentration Index (indicator for agro-hydro applications);
- Off target for the completion of a 5-year marketing plan for sector speciﬁc products on weather and climate for the agricultural sector;
- Off target for the implementation of annual milestones for sector speciﬁc 5-year marketing plans (80 per cent for the agricultural sector); and
- Off target for the establishment of one joint venture and one strategic alliance.
4.4.2 Capability and capacity development
- Targets for radar data, LDN data and SAAQIS availability were all met;
- The target for implementing 80 per cent of annual plan/targets of the dual career-pathing programme was partially achieved;
- Baseline in employee capability was successfully established;
- Five per cent increase in leadership competency index was achieved;
- Attained the retention of 92 per cent employee retention rate for core/critical skills;
- The targets for 74 per cent Africans, three per cent people living with disabilities, 40 per cent women in core positions and 42 per cent women in management were all met;
- Realized the completion of 100 per cent of phase I of the National Educational Plan (NEP);
- Implementation of 80 per cent annual targets of the Regional Training Centre (RTC) Strategy was achieved;
- The targets for awarding 62 bursaries and absorbing 60 per cent of bursars were achieved; and
- Achieved the targets for 100 per cent implementation of the doctoral programme and implementation of 10 per cent of doctoral programme annual milestones.
4.4.3 Engage stakeholders
- Fully implemented 80 per cent of annual communications programmes for 2016/17 as per the communications strategy;
- Successfully established baseline in traffic volumes on media platforms (website/Facebook, Twitter, YouTube);
- Exceeded the Advertising Value Equivalent (AVE) of R22 million due to additional exposure caused by severe weather, especially cyclone Dineo;
- Successfully implemented engagement programmes for eight targeted stakeholder groups (SES); and
- Substantially achieved 85 per cent overall stakeholder satisfaction level just below the 86 per cent target.
4.4.4 Research and knowledge/intelligence creation
- Secured 25 per cent of funds for conducting the SEB study, as per plan;
- Facilitated the implementation of the National Framework for Climate Services (NFCS) for three key climate sensitive sectors;
- Achieved the establishment of one Partnership Agreement through Memorandum of Understanding; and
- Successfully published 14 peer-reviewed articles.
4.4.5 Growth and sustainability
- Successfully attained R189.28 million parliamentary grant funding, excluding SAAQIS;
- Realised R108.37 million growth in year-on-year aviation revenue, as envisaged; and
- Achieved R18 million growth in commercial revenue as per set target (annual total revenue).
- Committee Observations
Following the Committee’s interaction with the AGSA as well as the departmental four entities on their annual reports, financial statements and the audit outcomes in the period under review (2016/17 financial year) as well as engagements with their respective quarterly reports for the current year, the Committee made the following observations:
- The Committee noted with concern that for the second year, the Department of Environmental Affairs has failed to table its annual report, timeously to Parliament. The Committee understands that the reason for not tabling the annual report is the result of the dispute between the Department and the AGSA on application of the Modified Cash Standard on Programme 6: Environmental Programmes. Ordinarily, the Committee was supposed to have started interrogating the Department’s annual report followed by those of the departmental entities. Parliament has for the past two consecutive years been appropriating funds to the Department, but the Department could not account on time to the Committee. The Committee expressed a concern that this might lead to a court challenge in the years to come. Furthermore, the Committee cannot fully table its own annual report to Parliament as required, owing to the fact that it would not be a complete report without the processing of the Department’s 2016/17 Annual Report. Notwithstanding, the Portfolio Committee recommended to the Department to apply for exemption from using the Modified Cash Standards for its transfers to the Working for programmes in its meeting with the Department on 1st November 2016 to avoid running into the same problem with the AGSA. Subsequently, the Committee met jointly with the Department of Environmental Affairs, Auditor-General of South Africa and the National Treasury on the application of Modified Cash Standard Expenditure Classification on 2nd May 2017, with the aim of resolving the issue of differences in the understanding of applying this concept in the Department’s transfers to the EPWP projects in the environmental portfolio. The Committee noted with a great concern that the Department had not capitalised on these opportunities;
- The Committee noted with concern that the Auditor-General of South Africa (AGSA) had not been able to provide detailed explanation regarding the irregular expenditure R3 087 620 incurred by SAWS for not following the competitive bidding process and deviation with the Supply Chain Management policies;
- With regard to SANParks, the Committee noted with concern that it has regressed following material findings on performance information pertaining to four indicators, as stated in section 3.1 of this BRRR;
- The Committee expressed appreciation over the two per cent reduction in poached rhino relative to the previous financial year, however, the Committee was concerned about the appropriateness of the target/ indicator;
- The Committee noted that although the iSimangaliso Wetland Park Authority sustained a clean audit opinion, it was concerned with tense relationship between the Authority and communities within and adjacent to the park. Reference was made to the recent public hearings on the Marine Spatial Planning Bill held in the Umfolozi Municipal Offices, wherein communities complained that iSimangaliso did not serve the developmental and transformational needs of the community;
- The Committee congratulated SANBI for having been selected as the National Implementation Entity (NIE) for the Adaptation Fund in the country;
- In respect to SAWS, the Committee noted that SAWS received an unqualified audit opinion, however, the AGSA reported that it had material findings on compliance with relevant legislation, which could have resulted in the entity receiving a qualified audit outcome for the year under review;
- The Committee also noted with concern that there were contracts within SAWS awarded to bidders without checking whether the bidders work for the state or not; and
- The Committee noted with concern the ineffective leadership of the SAWS Board that led to the entity having to unnecessarily incur R2 million as a result of the premature termination of the former CEO’s employment contract.
- CONCLUSION and recommendations
Having duly interrogated the annual reports, financial statements and the audit outcomes of the Department’s four entities in the period under review (2016/17 financial year) as well as having scrutinised their respective quarterly reports for the current year, the Committee is well pleased with the performance of the DEA entities for the period under review. However, the Committee was concerned by the delay in the tabling of the Department’s 2016/17 Annual Report, which sadly has happened for the second time.
Notwithstanding, the Committee recommends the following:
- The Department should meet with the National Treasury and AGSA to resolve the dispute on the application of the Modified Cash Standard to find a long lasting solution;
- The AGSA should submit the Special Report, in terms of section 65(2)(b) of the PFMA Act, 1999 pertaining to the late tabling of the DEA Annual Report and financial statements for the 2016/17 financial year;
- The entities should ensure that the issues, which were raised by the Auditor-General in auditing their annual performance, including financial statements, do not recur in the 2017/18 financial year. Therefore, every effort must be made to comply with National Treasury regulations and all applicable legislation, and all matters of material misstatements should be avoided in any annual financial statement;
- SANParks should address all the issues raised by the AGSA, particularly the targets/indicators on the recorded attempts on rhino poaching during 2018/19 medium term review. The target should focus on reducing the number of animals poached and killed, rather than on poaching efforts;
- SANParks should review the target of “two per cent reduction in poached rhinos” to adequately reflect the public efforts and resources put in rhino conservation in national parks;
- SANBI should, as the National Implementing Entity for the Global Adaptation Fund in South Africa, ensure that projects in rural areas are also initiated and adequately funded from the Green Climate Fund and/or the Climate Adaptation Fund;
- iSimangaliso should strive to harmonise the relationship with the communities living adjacent to the Park as well as facilitate economic opportunities for the communities;
- iSimangaliso should submit black contractors’ information on its database;
- iSimangaliso should also collaborate with SANBI on the management and the eradication of invasive species;
- SAWS should submit a detailed report on the irregular expenditure of R3 087 620 within two weeks;
- SAWS should also submit a report on the expenditure relating to the termination of the ICT Manager’s contract;
- SAWS should also submit a list of its properties and their value in various provinces; and
- SAWS should also submit the list of suppliers on its database.
The Portfolio Committee on Environmental Affairs recommends for the consideration of this Budgetary Review and Recommendation Report (BRRR) for the Department of Environmental Affairs Public Entities for 2016/17 financial year.