Questions and Replies

Reply:

1.A detailed list is attached in response to (a) – (g), for all National Treasury employees as at 8 May 2017.

2. (a) Total number of persons employed as at 31 March 2017 is 1168.

(b) Total number of persons employed as at 8 May 2017, 1164. (Annexure A attached) [confidential]

Reply:

The Financial Intelligence Centre refers information (financial intelligence) for investigation to law enforcement (SAPS), the tax authority, security services and regulators on an ongoing basis as part of the FICs regular function as envisaged in section 40 of the Financial Intelligence Centre Act 38 of 2001, as amended.

The FIC provides statistical information about its referrals in each of its Annual Reports.

Since the commencement of the 2011/2012 financial year until 31 March 2017 the FIC referred at least 5,230 financial intelligence reports to various bodies as defined in section 40 (1) of the FIC Act for investigation.

Of the 5,230 referrals stated above, 733 were disseminated for investigation to the law enforcement authorities - i.e. the South African Police Services (SAPS), inclusive of the Directorate of Priority Crime Investigation (DPCI) and the Crime Intelligence Division (CI).

Year on year statistics are tabulated below:

Year	Total referred	To law enforcement
2011/2012	761	108
2012/2013	883	200
2013/2014	883	64
2014/2015	870	61
2015/2016	511	89
2016/2017	1,322	211
2017/2018 (April, May)	49	21
Total	5,279	754

End.

Reply:

1.In the period the Commissioner has been employed with SARS, there is no record of the said GE.

2.SARS is unable to respond on behalf of SSA.

3. Please refer to response one (1) above.

4. SARS employees are employed in the capacity for which they are contracted for.

Reply:

Lenders imposed terms and conditions on SAA as per normal Loan market standards. This practice is not unique to SAA and applies to all companies both public and private and across all markets including RSA, Europe and USA to name a few. The following terms and conditions are contained in SAA loan agreements and the Airline has complied and continues to comply with each of those conditions.

	Financial Covenants	Complied with (Y/N)	Non-Financial Covenants	Complied with (Y/N)
Project Phoenix Loans	1. Non-payment SAA does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable	Y	1. Illegality / unlawfulness It is or becomes unlawful for SAA or the Guarantor to perform any of its obligations under the Finance Documents	Y
	2. Maintenance of insurance on assets SAA maintains insurances with insurance companies to such an extent and against such risks as companies engaged in similar business normally insure.	Y	2. Change of control SAA’s reporting lines change from the current reporting line, being National Treasury and the Minister of Finance, to another party.	Y
	3. Negative pledge SAA shall not unless otherwise agreed to in writing by the Lenders, create permit to subsist any Security over any of its assets.	Y	3. Misrepresentation Any representation or statement made or deemed to be made by SAA or the Guarantor in the Finance Documents or any other document delivered by or on behalf of SAA or the Guarantor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.	Y
	4. Disposals SAA will not enter into a single transaction or a series of transactions and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.	Y	4.Audit qualification The Auditors of SAA qualify the audited annual consolidated financial statements of SAA or any of its Affiliates.	Y
	5.Taxes SAA will maintain its status as a statutory body established in accordance with laws of South Africa and will maintain its tax residence in South Africa and ensure that it is not resident or liable to tax in any other jurisdiction.	Y	5. Government Guarantee The guarantee ceases to be legal, valid, binding and enforceable or otherwise ceases to be effective.	Y
	6. Merger SAA shall not, unless otherwise agreed to by the Lenders in writing, enter into any joint venture, amalgamation, demerger or corporate reconstruction.	Y	6. No breaching of laws SAA has not breached any law or regulation which breach has or might reasonably be expected to have a Material Adverse Effect.	Y
	7. Acquisition SAA shall not unless otherwise agreed to by the Lenders in writing, acquire or subscribe for shares or other ownership interest in or securities of any company or other person, or acquire any business, assets or incorporate any company or other person.	Y	7. Material adverse effect No material adverse effect has occurred.	Y
	8. Cross default Any financial indebtedness of SAA which is not paid due nor within any originally applicable grace period, or declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default, or cancelled or suspended by a creditor of SAA which as a result of an event of default.	Y	8. Constitutional documents SAA will ensure that no change is made to its constitutional documents without prior written consent of the Lenders where such change has or is reasonably likely to have a Material Adverse Effect.	Y
		Y	9. Sanctions SAA and to the best of knowledge of SAA having made due and careful enquiry, its Affiliates, are not Sanctioned Entities, to the extent applicable, or have not participated in a Sanctioned Transaction or have not contravened and Sanctions or are not targeted under any Sanctions.	Y
		Y	10. Compliance to anti-corruption laws SAA to the best knowledge of SAA having made due and careful enquiry, and each of its Affiliates, has conducted its businesses in compliance with Applicable Anti-Bribery Law and has instituted and maintains policies and procedures designed to promote and achieve compliance with such laws.	Y
			11. Change of business SAA shall procure that no substantial change is made to the general nature of the business of SAA from that carried on at the signature date.	Y
			12. Financial year end SAA shall not change its Accounting Reference Date.	Y
			13. Change in Auditors SAA may only replace its Auditors with the prior approval of the Lenders, such approval not to be unreasonably withheld or delayed.	Y
			14. Expropriation The authority or ability of any affiliate of SAA to conduct its business is wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person.	Y

Reply:

SAA was issued with two government guarantees in the past three financial years; R6.88 billion on 22 December 2014 to sign off and approve the 2013/14 Annual Financial Statements (AFS) and R4.72 billion on 08 September 2016 to sign off and approve the 2014/15 and 2015/16 AFS. Table 1 below highlights the conditions attached to each of these two government guarantees issued and the progress made by SAA on each condition.

Legend:

Condition complied with
Condition partially complied with
Condition not complied with

Table 1: SAA Guarantee Conditions

Conditions related to the R6.88 billion guarantee issued on 22 December 2014
Within 1 month, SAA to provide a comprehensive implementation plan for the 90 Day action plan interventions outlining the milestones and timelines for delivering the targeted savings and responsible person.	SAA submitted the 90 Day Action plan implementation dashboard.
SAA together with the Government will review and stress test the financial model and refined LTTS.	SAA provided a financial model which was stress tested by government and the airline.
Within 3 months, SAA to develop proposals on the network structure, fleet strategy and structure of the airline for consideration by Government.	SAA appointed InterVistas to assist the airline in developing a new Network and Fleet Plan which was considered by government.
Within 3 months, SAA to identify areas where it intends reducing operational costs and develop implementation plans to reduce such costs	SAA identified cost compression initiatives and developed an implementation plan.
Within 3 months, SAA to strengthen its governance, internal controls and working capital management, develop an implementation plan in this regard and provide monthly progress reports to government.	SAA has indicated that it has strengthened its governance and has included a detailed summary in the 90 Day Action Plan report. No monthly progress is given in this regard.
SAA to provide weekly reports to NT on its utilisation, cash position and daily cash forecasts.	SAA provides weekly reports of its daily cash forecast and utilisation thereof.
Conditions related to the R4.72 billion guarantee issued on 08 September 2016
The primary focus of the Board must be to return the airline to financial sustainability.	This condition has been included in SAA’s 2016/17 Shareholder compact The SAA Board has finalised its five year Corporate Plan, which represents the airline’s turnaround strategy.
SAA's strategy must be strengthened and alignment with other state owned airlines ensured.	The SAA Board has reviewed and revalidated the airline’s strategy which forms part of the approved turnaround strategy and informs the 5 year Corporate Plan. The next step is aligning the strategy with other State Owned Airlines.
SAA must implement more aggressive cost cutting initiatives as recommended by the Aviation expert (Deloitte) in areas of fuel, aircraft ownership, labour, maintenance, repair and overhaul and procurement.	Initiatives identified by Deloitte have not been implemented. However, Seabury has identified additional cost compression initiatives in SAA’s 5 year Corporate Plan.
The network fleet plan must be refined based on a sound business case so that the airline takes advantage of opportunities to scale back the operations of the airline to focus only on operating routes which positively contribute to the profitability of the airline, closes routes that have been making losses for longer than one year, and ensures that the network plan is aligned with other state owned airlines.	The SAA Board has reviewed and revalidated the airline’s strategy which forms part of the approved turnaround plan strategy and informs the 5 year Corporate. The next step is for SAA to close routes that have been loss making for more than a year and aligning the network plan with other State Owned Airlines.
The airline's strategy must better differentiate the airline, enabling it to continue to compete effectively, inter alia through addressing customer value proposition.	The SAA Board has reviewed and revalidated the airline’s strategy which forms part of the approved turnaround strategy and informs the 5 year Corporate Plan. NT is in the process of assessing SAA’s turnaround strategy and 5 year Corporate Plan to determine whether the airline has addressed this condition.
The airline must work with National Treasury (NT) and the Department of Public Enterprises (DPE) in giving consideration to the possible merger of SAA with South African Express (SAX) airlines and the potential introduction of a strategic equity partner.	SAA has availed itself and its subsidiaries to work with the consultant, Bain and Company SA. SAA officials availed themselves in engaging with DPE and NT officials on a regular basis during the time that Bain and Company SA was conducting the Study.
The Board is required to appoint a permanent Chief Executive Officer (CEO), Chief Financial Officer (CFO) and other key executives in consultation with the Minister of Finance.	In progress. The CFO has been appointed. Candidates for the CEO position have been shortlisted. It is anticipated that after the CEO is appointed then he/she will then fill other key executive positions.
Funding must be secured to meet the airline's liquidity requirements.	SAA has secured funding for its liquidity requirements and is in the process of refinancing.
The Board is required to ensure that the AFS for both 2014/15 and 2015/16 are finalized.	SAA’s 2014/15 and 2015/16 AFS have been finalised and tabled in parliament.
SAA is required to report progress on a weekly basis to NT until such a time that the Minister of Finance determines.	NT and SAA convene weekly monitoring meetings.
SAA must share all media communication with the Minister of Finance or his designated representative prior to the issuance of media communication and only communicate on issues that require shareholder approval where approval has been obtained from the Minister of Finance to do so.	This matter is dependent on media communication by SAA. Currently, NT is not aware of any non-adherence to this condition.

Source: National Treasury

Reply:

The Presidency is responsible for invitations to the World Economic Forum on Africa meetings and not the National Treasury. Only the Presidency has the prerogative to extend invitations. The National Treasury is delegated by the Presidency to organise logistics for the convening of the conference, however invitations do not form part of the delegated mandate.

Reply:

The FIC refers information in its possession for investigation to law enforcement agencies pursuant to its primary objectives and functions as defined in section 3 and 4 of the Financial Intelligence Centre Act 38 of 2001, as amended, with the aim of identifying proceeds of crime, combatting money laundering and the financing of terrorism.

The FIC does not refer cases of acts of criminality for investigation. Rather in terms of Section 40 of the Act, it refers packages of transactional and other information that present indicators of suspected criminality to be investigated by the competent authorities. It is for these authorities to determine if the transactions are indeed proceeds of crime, or may be associated with an unlawful predicate offence.

The FIC has recorded the information sought from 2012 onwards and which is set out below.

(a) Between 1 April 2012 till 31 March 2017 the FIC referred 87 matters for investigation by the competent authorities for them to determine if the transactions reported are proceeds of crime or connected to an unlawful predicate offence involving acts of corruption as defined by the Prevention and Combating of Corrupt Activities Act, Act 12 of 2004 (PRECCA) legislation.

The FIC made the following referrals related to suspected acts of corruption and for which statistics have been kept in the financial years:

2012/2013: 9

2013/2014: 8

2014/2015: 6

2015/2016: 40

2016/2017: 24

Total: 87 referrals.

(b) The FIC does not have information available regarding which of these matters have been investigated by the competent authorities or have resulted in a conviction.

Reply:

1.I have never had formal meetings with them.

2. No, I have declared all gifts I have received since my appointment as Member of Parliament and Member of the National Executive.

3. No statement will be made.

Reply:

a) R21 442 522.93

b) R28 313 315.54

Reply:

In June 2016, the National Treasury met with various officials within the Department of Energy (DoE), the Central Energy Fund (CEF) and the Strategic Fuel Fund (SFF). This meeting was held subsequent to the National Treasury learning of the disposal of the strategic oil reserves by the SFF with a view of understanding the details of what had occurred.

Following the meeting, the SFF committed to submitting to the National Treasury all documentation relating to the disposal process. The National Treasury reviewed the documentation in order to ascertain the legality of the process followed in accordance with the Public Finance Management Act (PFMA) and the Central Energy Fund Act of 1977.

The National Treasury completed its review and reported its findings and recommendations to the former Minister of Energy in August 2016. No response has been received to date. The former Minister of Energy instituted an investigation into the stock disposal process, however, the findings of the investigation have not been reported to the National Treasury.

Reply:

(1)(a)(b) Due to the secrecy provisions contained in Section 69 of the Tax Administration Act No. 28 of 2011, SARS is prohibited from disclosing any taxpayer information (Including whether or not a taxpayer is subject to an audit) to any person other than a SARS official.

The South African Revenue Service (SARS) makes no differentiation according to taxpayers’ political affiliation. SARS treats the tax affairs of all members of political parties in exactly the same manner as all other taxpayers in accordance with the compliance model. This model is premised on three components to encourage tax compliance: Education, Service and Enforcement.

(2)(a) The selection of taxpayers for audits is generated through an automated risk Engine and manual profiling which is designed based on principles such as:

• Random, empirical and statistical rule sets are deployed

• The comparison of declared information to third party information e.g. Banks, Employers, Insurance Companies, etc.;

• The verification of claims;

• Year on year comparisons on income, deductions and movements in the aforementioned to identify exceptions;

• The verification of incomplete and inconsistent submissions of tax returns.

• The compliance programme which informs profiling activity

(b) Any case triggered by the risk engine and above a stated threshold would be routed for an Audit. This might apply to one taxpayer for multiple years.

(3) (a)(b) SARS audits debit, credit and nil assessments. The risk is obviously higher with credit assessments and thus the percentage of credit assessments audited will be higher. This question must be viewed in light of the R30bn credit revised assessments SARS was able to prevent from flowing last year.

SARS cannot comment on taxpayer perception, however all audit alerts are based on a sound selection process which all taxpayers are subject to.

Reply:

The Board and management undertook a two-day strategy planning session and identified the following 5 key strategic pillars to transform SAA into a financially sustainable aviation group:

• Liquidity;
• Balance Sheet Restructuring;
• Revenue enhancement;
• Cost optimization; and
• Strategy direction

Furthermore, Seabury was appointed to assist the airline with the review of the LTTS, particularly to determine its appropriateness for SAA. The results of this review will form the basis for a five (5) year fully funded Business Plan. Once the 5 year business plan has been finalised, management will be in a position to determine whether or not it will need financial assistance from the shareholder, the quantum and the timing thereof.

Reply:

1. Yes.

(a) The reviews emanated from directives from the Public Protector to review contracts above R10m for the Public Rail Agency of South Africa (PRASA) which immediately extended to other State Owned Entities including Transnet;

(b) The National Treasury is still waiting for the requested documentation from Transnet and the Department of Public Enterprises respectively, in order to conclude the review;

(c) Submission of requested documents from Transnet and the Department of Public Enterprises will determine the timelines for the review; and

(d) The completion of the review is dependent on receipt of the documentation from Transnet and Department of Public Enterprises.

2.The report will be submitted to Standing Committee of Public Accounts which will make it public.

Reply:

a) and b)

The total amount borrowed by the largest state-owned entities is split into two, which constitutes borrowings by capex entities and borrowings by state-owned development finance institutions (DFIs). The amount that was reflected in financial statements as outstanding / borrowing by capex SOCs, which include ACSA, Eskom, SAA, SANRAL, TCTA and Transnet amounted to R557.1 billion for the 2015-16 financial year as shown in the link table below. The interest these entities incurred amounted to R43.9 billion for the 2015-16 financial year.

(Note: the interest incurred refers to the gross interest incurred by the entity before any adjustments such as capitalized interest costs, which would typically “understate” the interest incurred by the entity.)

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW1151Table_A-170606.pdf

The amount of debt that was outstanding or classified as borrowings by state-owned DFIs (Land Bank, DBSA and IDC) for the 2015-16 financial year amounted to R112.8 billion. The interest that these DFIs incurred for the 2015-16 financial year amounted to R7.1 billion. See the link below:

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW1151TableB-170606.pdf

In total, all the nine entities had a total of R669.9 billion shown as balance sheet debt for the 2015-16 financial year with a total interest of R51 billion worth of interest incurred for the same year.

In terms of the funding, the 6 capex SOCs raised gross borrowings (before any repayments) of R117.7 billion for the 2015-16 financial year relative to a budgeted amount of R101.4 billion.See the link below:

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW1151SOCs-170606.pdf

In terms of the funding, the 3 DFIs raised gross borrowings (before any repayments) of R58.8 billion for the 2015-16 financial year relative to a budgeted amount of R76.2 billion. See the link below:

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW1151DFIs-170606.pdf

Reply:

The OTO announced earlier this year that they will be launching an investigation with regards to the refund processes administered by SARS to better understand the challenges, risks and complexity associated with the process. The investigation is currently underway and SARS is committed to working with the OTO to give them the required insight into the process so that they will be able to satisfactorily give feedback to the public on their findings.

SARS would want the current investigation underway to first be concluded before additional responses to the topic at hand is made as this stage.

Reply:

(a)(i)(ii)(b)(i)(ii)(c)(d)(i)(ii)

The OTO announced earlier this year that they will be launching an investigation with regards to the refund processes administered by SARS to better understand the challenges, risks and complexity associated with the process. The investigation is currently underway and SARS is committed to working with the OTO to give them the required insight into the process so that they will be able to satisfactorily give feedback to the public on their findings.

SARS would want the current investigation underway to first be concluded before additional responses to the topic at hand is made as this stage.

Reply:

(a)(i)(ii)(b)(i)(ii)(c)(d)(i)(ii)

The OTO announced earlier this year that they will be launching an investigation with regards to the refund processes administered by SARS to better understand the challenges, risks and complexity associated with the process. The investigation is currently underway and SARS is committed to working with the OTO to give them the required insight into the process so that they will be able to satisfactorily give feedback to the public on their findings.

SARS would want the current investigation underway to first be concluded before additional responses to the topic at hand is made as this stage.

Reply:

(a) For the period 1 April 2017 to 31 May 2017, the Department of Communications (DoC) surrendered R562 080 976.58 to the National Revenue Funding in revenue arising from levies on the annual turnover of the license holders.

For the financial year ending 31 March 2017, the DoC paid R1 168 576 812.74 to the National Revenue Fund in collections received from the Independent Communications Authority of South Africa (ICASA), compared to R1 127 564 019.98 in 2015/16. According to ICASA, of the total amount collected and transferred to DoC in 2016/17, the figures included R795 million in funds arising from levies on the annual turnover of the licence holders cited in Chapter 3 of the Electronic Communication Act, Act 36 of 2005. Services provided for in terms of Chapter 3 of the Act include, Electronic Communication Services and Electronic Communication Network Services, (Universal Service Access Fund) and ALF (Annual License Fees).

(b) Information detailing the names of the licence holders cited under (a) have been withheld by ICASA owing to issues of confidentiality.

Reply:

Universal Service and Access Fund (USAF) – Cabinet approved Appropriations from the National Revenue Fund (NRF)

Between 2005/06 and as at 31 May 2017, a total of R2.8 billion was transferred to the Universal Service and Access Fund (USAF). This was done through the budget vote of the Department of Communications between 2005/06 to 2014/15 and the budget vote of the Department of Telecommunications and Postal Services from 2015/16 to date.

These allocations are comprised of funding of R501 million for projects related to its universal service and access mandate, as well as R2.3 billion for the Broadcasting Digital Migration project to pay for subsidies for Set Top Boxes (STBs), antennae and installation costs to qualifying poor households. The table link below illustrates the funding allocated:

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW1438USAF-170606.pdf

Source: ENE 2009 – ENE 2017

Reply:

The Minister of Finance has not been informed of any adjustment to the powers and functions of any (a) Local or (b) District municipality in terms of section 85(9A)(b) of the Local Government: Municipal Structures Act, Act 117 of 1998, as amended, before December 2015. (i) not applicable (ii) not applicable (iii) not applicable

Reply:

(1) The National Treasury reviewed coal contracts to established if Eskom complied with the SCM norms and standards when appointing the service provider.

(2) Yes.

(a) (1) Falcon Research and Consulting Services (Pty) Ltd and

(2) Israel Monnapula Dikgwatlhe.

(b) Both were appointed to assist the National Treasury to review and analyse the quality of coal delivered to Eskom by Tegeta Exploration and Resources.

(c) The total cost for Falcon Research and Consulting Services (Pty) Ltd

R 184 500.00,

The following is the breakdown of the cost for Falcon

Analysis of test coal results ...………………………………………………. R 13 500-00

Analysis of the Environmental Analysis report …………………………… R 4 500-00

Analysis of the technical aspects of the coal supply agreement ………. R 9 000-00

Analysis of the technical aspects in the draft report ……………………… R 18 000-00

Analysis of technical aspects in the minutes of the meetings …………… R 9 000-00

Extended reviews of documents………………………………………………. R103 500-00

Compilation of a technical report …………………………………………… R 27 000-00

TOTAL………………………………………………………………………….. R184 500.00

The following is the breakdown for Israel Monnapula Dikgwatlhe

Analysis of test coal results ...………………………………………………. R 24 800-00

Analysis of the Environmental Analysis report …………………………… R 18 600-00

Analysis of the technical aspects of the coal supply agreement ………. R 18600.00

Analysis of the technical aspects in the draft report ……………………… R 18 600-00

Analysis of technical aspects in the minutes of the meetings …………… R 9 920-00

Request additional data analysis………………………………. R12 400-00

Compilation of a technical report …………………………………………… R 49 600-00

Comparison of the quality of coal expected……………………………….. R5 425.00

Clear comparison of what was delivered………………………………….. R4 650.00

Clear comparison of results for Sibonisiwe and SABS in compliance of

Brakfontein mine with requirements for mining coal R4 030.00

NT findings with the response from Eskom………………………………. R5 425.00

TOTAL………………………………………………………………………… R178 250.00

(3) whether any draft and/or final report(s) on the review has/have been produced; if not, (a) why not and (b) by what date is a report expected; if so, (i) what is the title of each report and (ii) on what date was the report completed;

Response: A final draft report was sent to Eskom on 05 April 2017.

(4) whether the final report on the review will be made public; if not, why not; if so, by what date is it expected?

Response: Yes, as soon as the report is finalised.

Reply:

(a)  Total amount spent by Government on rating agencies fees

South Africa has solicited the credit rating services of Moody’s Investors Services (Moody’s), S&P Global Ratings (S&P), Fitch Ratings (Fitch) and the Japanese’ Ratings and Investment Information, Inc. (R&I). In terms of the contractual agreements, the government has to pay fees to the rating agencies for the services rendered.

Since April 2008 to May 2017, a total amount of R 81 451 873.00 has been paid to the rating agencies. The table link below illustrates the total spent in rands made to all the four solicited credit rating agencies. S&P is the highest paid rating agency followed by Moody’s.

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW1393Table-170605.pdf

(b) The detailed breakdown of such expenditure per rating agency:

(i) S&P:

S&P’s annual rating fees are based on:

• Annual surveillance;
• Rating of long term debt issuances;
• Ratings of short term debt issuances; and
• Ratings of the Commercial Paper and Medium Term Notes.

(ii) Moody’s:

Moody’s annual and quarterly rating fees are based on:

• Annual and quarterly credit surveillance;
• Ratings of all Non-US Medium Term Notes Programs;
• Ratings of all US Medium Term Notes;
• Ratings of all Global Medium Term Notes Programs;
• Ratings of all Commercial Paper/Short Term; and
• Ratings of all long term debt issuances and Medium Term Notes sales in all markets including local currency debt issuances.

(iii) Fitch

Fitch’s annual rating fees are based on:

• Annual surveillance;
• Ratings of debt issuance; and
• Expense reimbursement for reasonable travel and lodging expense incurred during the annual rating mission to the Republic of South Africa.

(iv) R&I

R&I’s annual rating fee is based on:

• On-going surveillance of the credit rating
• Foreign currency issuer rating;
• Domestic currency issuer rating; and
• Foreign currency short term rating.

Reply:

(1-2) The role of Prof. Chris Malikane is to advise Minister of Finance. The eight pages discussion documents, is not government position but was for his academic purposes.

(3) The government is doing all it can to improve the economic prospects of the country by ensuring that a conducive environment is created for public and private sector to invest in the economy and eventually create jobs.

(4) As government, we are clear and consistent in terms of Economic Policy and how to address current challenges. A lot of work is being done at the level of both local and abroad to avoid any further downgrade. We are working towards improving our current grading.

Reply:

1. The National Treasury did provide the former Minister of Communications or the Department of Communication with the report into investigation into the set-top box procurement process.

2. (a) There was no additional request made to PWC to conduct any further investigation as the Department of Communication has not requested the National Treasury to facilitate such an investigation.

(b) No further aspects of the process are being investigated, currently.

(c) The final report will be completed subject to completion of criminal proceedings by law enforcement agencies.

Reply:

The Minister of Finance provided a guarantee to the Commonwealth Games Federation in support of South Africa’s hosting of the 2022 Commonwealth Games in June 2016. The guarantee was in respect of the operational budget for the Games of R2.7 billion and a contingency budget capped at R479 million (18% of the operational budget) for possible overruns.

In effect, this meant that the South African Government, through the national and provincial departments involved in the hosting of the Games (including the Departments of Sport and Recreation; Arts and Culture; Police; and Human Settlements) as well as the host city, eThekwini, would commit these funds towards the cost of hosting the Games. These departments and the eThekwini municipality were to reprioritise their baseline funds to cover these costs. There would be therefore no additional funds made available for the hosting of the Games.

Reply:

Departmental transfers to public entities is governed by section 38(1)(j) of the Public Finance Management Act. Treasury regulation 8.4 sets out the framework for transfers and subsidies. In terms of Treasury Regulation 8.4.1, the accounting officer of a department must maintain appropriate measures to ensure that transfers to public entities are applied for intended purposes. This includes, but is not limited to, regular reporting procedures, internal and external audit requirements, regular monitoring procedures and scheduled and unscheduled inspection visits or reviews of performance.

Public entities strategic plans and annual performance plans are approved by the relevant Executive Authority and tabled in Parliament. These plans set out performance targets for public entities and in terms of Treasury Regulation 8.4.2, the accounting officer of a department may withhold transfers and subsidies to a public entity if, amongst others, the agreed objectives have not been attained and the transfer does not provide the value for money in relation to its purpose or objectives.

Treasury regulation 5.3.1 requires accounting officers of departments to establish procedures for quarterly reporting for effective performance monitoring, evaluation and corrective action.

Reply:

The OTO announced earlier this year that they will be launching an investigation with regards to the refund processes administered by SARS to better understand the challenges, risks and complexity associated with the process. The investigation is currently underway and SARS is committed to working with the OTO to give them the required insight into the process so that they will be able to satisfactorily give feedback to the public on their findings.

SARS would want the current investigation underway to first be concluded before additional responses to the topic at hand is made as this stage.

Reply:

The prevailing unemployment rate remains ominously high. To address the high unemployment rate will require greater effort to reignite growth in the economy. Government is focusing on three main areas: restoring investor confidence, improving the ease of doing business and implementing structural reforms to ensure inclusive growth. Extensive engagement with social partners should reinforce efforts to improve labour relations.

Government’s plans to reduce inequality and poverty; raise employment; and raise the standard of living of all South Africans is guided by the National Development Plan (NDP) supported through the allocation of budget resources according to the NDP priorities and direction.

The National Treasury oversees the following specific programmes to address unemployment, namely:

• the employment tax incentive which seeks to reduce the risk of hiring young, inexperienced workers;

• the learnership incentive which seeks to encourage the development of skills; and

• the Jobs Fund, which seeks to support innovative ways to support employment creation.

Additional details on government programmes to address unemployment can be directed to relevant departments such as Department of Labour, Department of Higher Education etc.

Reply:

The biggest risk to growth in 2017 lies in lower confidence. Achieving faster growth requires government to prioritise building confidence in households as well as foreign and local investors. This requires engagement with social partners, a focus on improving the ease of doing business to encourage investment and the development of Small Medium Enterprises as well as urgently addressing key structural reforms in the economy.

The National Treasury supports growth through the budget. The budget allocates resources according to the priorities and guidance of the National Development Plan.

In addition, the Minister of Finance and the National Treasury engage regularly with global and local investors to communicate Government’s fiscal and economic strategies and have also played an important role in Government engagements through the CEO initiative, to identify opportunities in labour intensive sectors such as agriculture and tourism to create jobs and growth.

Reply:

No. Currently the provisions of the South African Reserve Bank Act, 1989 (Act No. 90 of 1989 – “SARB Act”), as amended by the South African Reserve Bank Amendment Act , 2010 (Act No. 4 of 2010 – “SARB Amendment Act), effectively rule out the possibility of anyone, through the accumulation of shares, exerting undue influence on the South African Reserve Bank (“SARB”).

The Board of the SARB (“Board”) is a supervisory board and is strictly responsible for the corporate governance of the institution and not its day-to-day management. The Governors are vested with original powers of management and are responsible for the day-to-day management of the SARB, which includes monetary policy, bank supervision, financial stability and the payment system.

Previously, in the period before the SARB Act was amended in 2010 there was an absence of adequate preventative measures, private shareholding in a central bank could potentially create the risk of untoward actions by shareholders taken in pursuit of personal objectives rather than the public interest. Although a single shareholder in the SARB was in terms of the SARB Act restricted to holding not more than 10,000 shares and to no more than 50 votes at a meeting of shareholders, the SARB at times in the past (i.e. before 2010) experienced deliberate attempts at circumventing these limitations. Individual persons by utilising the names of minors, relatives, friends or other persons under their influence accumulated unduly large numbers of SARB shares under their control. This resulted in undue concentrations of SARB shares under the ultimate control of single persons, who could potentially utilise the commensurate number of votes under their control to exercise undue influence on the SARB for personal purposes and their own personal gain.

The SARB Amendment Act, which introduced substantial amendments to the legal structure and operations of the SARB, amongst other things, adequately addressed the previous anomaly. Major amendments constituted the introduction of the concept of “associates” in respect of shareholders or potential shareholders of the SARB and the establishment of a panel (established and convened by the Governor) to give effect to fit and proper principles with regard to non-executive directors elected by shareholders. It resulted in the existing numbers of SARB shares held by all persons who qualify as associates of a specific shareholder or potential shareholder being taken into account in the determination of the number of shares (limited to 10,000 shares) that the specific shareholder may lawfully hold or acquire. Shareholders were also hereafter only entitled to elect non-executive directors to the Board that had been declared eligible by the panel. The Board consists of fifteen directors (eleven non-executive and four executive directors) of which the President appoints eight, which includes the Governors. The shareholders elect the remaining seven.

Consequently, shareholders of the SARB have limited powers, which in addition to the above (at a general meeting of shareholders), are limited to discussing the annual report and financial statements of the SARB, appointing of the auditors and approving their remuneration and discussing special business duly placed on the agenda of the meeting.

Reply:

Chapter 6 of the Tax Administration Act No. 28 of 2011 protects the confidentiality of all taxpayers and as such I am unable to provide any details of the Presidents’ tax affairs.

Reply:

1.Due to the confidential nature of some of the information requested and our legislative obligation to the protection of personal information governed by the Protection of Personal Information Act, SARS is prohibited from disclosing any employee specific information that may include names of individuals, qualifications, job specific information, length of service, work record, etc.

The following summarised information can however be made available:

1227 employees resigned during the period 1 September 2014 to 30 April 2017 and 82 employees were dismissed during the same period.

2. Due to the confidential nature of some of the information requested and our legislative obligation to the protection of personal information governed by the Protection of Personal Information Act, SARS is prohibited from disclosing any employee specific information that may include names of individuals, qualifications, job specific information, length of service, work record, etc.

The following summarised information can however be made available:

The attrition rate for SARS remained stable over a period of 7 years. There is in actual fact a significant decline in the rate between 2013/14 and 2016/17 financial year.

913 External applicants were recruited during the period 1 September 2014 and 30 April 2017.

2674 Internal applicants were appointed during the period 1 September 2014 and 30 September 2017.

Internal appointments as a percentage of external appointments are reflected in the table below:

External Recruitment	Internal Appointments	Total	% Internal Appointments
913	2674	3587	74.55%

All recruitment is based on the requirements of the job that is necessary in terms of years of service and experience and demanded by the job to be performed.

Reply:

Sections 39 and 40 of the Public Finance Management Act (PFMA) places the responsibility of budgetary control and financial management on the accounting officer of the department, which in this case is the Director-General of the Department of Energy. Should fruitless and wasteful expenditure have taken place, Section 38(1)(g) requires the accounting officer to report the details of the case to the relevant treasury. The Department of Energy’s monthly expenditure report for March 2017 does not reflect any fruitless and wasteful expenditure in the department.

 

 

Reply:

(a) (i) 2014/15: R58,983,000, adjusted to R54,273,000

(ii) 2015/16: R55,662,000, adjusted to R94,698,000

(iii) 2016/17: R104,643,000, adjusted to R132,395,000

(b) R162,683.000

Reply:

(1)(b) No, the National Treasury and South African Airways have not made any payment for the Board Chairperson to stay at the Oyster Box Hotel in Durban, KwaZulu-Natal. National Treasury does not pay for accommodation for non-employees based on our internal policy.

(2)(b) Prohibited in terms of the National Treasury policy on Gifts, Donations and Sponsorships.

(3) No.

Reply:

NATIONAL TREASURY

(1)(a) No

(2)(a)(i)&(ii) No

(2)(a)(aa) N/A

(2)(a)(bb) N/A

ACCOUNTING STANDARDS BOARD

(1) The Accounting Standards Board did not participate in the Dialogue with the President: Unpacking of the SONA 2017 on Radical Economic Transformation Implementation event.

(2) The Accounting Standards Board did not it participate in the auction of the (i) souvenirs or (ii) personal belongings of the President of the Republic, Mr Jacob G Zuma.

CO-OPERATIVE BANKS DEVELOPMENT AGENCY

The Co-operative Banks Development Agency did not participate in the Dialogue with the President in Unpacking of the SONA 2017 on Radical Economic Transformation Implementation event hosted at the Oyster Box Hotel in Umhlanga, Durban, on 25 February 2017

The Co-operative Banks Development Agency did not participate in the auction of the (i) souvenirs or (ii) personal belongings of the President of the Republic, Mr Jacob G Zuma.

DEVELOPMENT BANK OF SOUTHERN AFRICA

(1) (b) No

(2) (b)(i) (ii) No

(3) (aa) (bb) N/A

FINANCIAL INTELLIGENCE CENTRE

1. The FIC did not take part in the Dialogue with the President: Unpacking of the SONA 2017 on Radical Economic Transformation Implementation event, hosted at the Oyster Box Hotel in Umhlanga, Durban, on 25 February 2017.

1. The FIC did not participate in the auction of the (i) souvenirs or (ii) personal belongings of the President of the Republic, Mr Jacob G Zuma.

FINANCIAL SERVICES BOARD

(1) (a) Not applicable.

(b) The FSB did not participate in the event referred to.

(2) (a) Not applicable.

(b) The FSB did not participate in the event referred to.

GOVERNMENT EMPLOYEES PENSION FUND

GEPF did not participate in the dialogue referred to in the question, and GEPF did not participate on the auction as mentioned in question 2.

INDEPENDENT REGULATORY BOARD FOR AUDITORS

No person from IRBA participated in the dialogue with the President, and no person participated in the auction referred to in the question.

PENSION FUNDS ADJUDICATOR

1. (b) No

1. (b)(i) No

(b)(ii) No

LAND BANK

1. (a) The Land Bank did not participate at the above-mentioned event as it was not invited.

2. (a) The Land Bank did not participate in the auction of the souvenirs or personal belongings of the President as it was not invited.

(aa) nothing was purchased.

(bb) no cost to the Bank.

FAIS OMBUD

No person from FAIS Ombud participated in the dialogue with the President, and no person participated in the auction referred to in the question.

PUBLIC INVESTMENT CORPORATION

(1)(b) The PIC did not incur costs for any participation in the Dialogue with the President: Unpacking of the SONA 2017 at the Oyster Box Hotel in Umhlanga Durban.

2(b) The PIC did not participate in any auction of souvenirs or personal belongings of President Jacob G Zuma.

SOUTH AFRICAN AIRWAYS

1(b) SAA did not participate in the Dialogue with the President: Unpacking of the SONA 2017 on Radical Economic Transformation Implementation event hosted at the Oyster Box Hotel in Umhlanga, Durban, on 25 February 2017.

2(b) SAA did not participate in the auction of the (i) souvenirs or (ii) personal belongings of the President of the Republic, Mr Jacob G Zuma.

SOUTH AFRICAN REVENUE SERVICES

1. The South African Revenue Service did not participate in any dialogue with the President to unpack SONA 2017.

2. The South African Revenue Service did not participate in any auction pertaining to items belonging to the President of the Republic, Mr JG Zuma.

SASRIA

1. Sasria SOC Limited did not participate in the dialogue with the President: Unpacking of the SONA 2017 on Radical Economic Transformation Implementation event.
2. Sasria SOC Limited did not participate in the auction of the (i) souvenirs or (ii) personal belongings of the President of the Republic, Mr Jacob G Zuma

TAX OMBUD

The Office of the Tax Ombud did not participate in the auction of the (i) souvenirs or (ii) personal belongings of the President of the Republic, Mr Jacob G Zuma.

Reply:

1. The Minister of Finance does not have the authority to conclude country agreements for the nuclear new build programme on behalf of government. In addition, the Minister does not have the mandate to determine policy or implementation frameworks for the energy sector. The Minister of Finance’s role in this regard will relate to Sections 66 and 70 of the Public Finance Management Act, which requires concurrence for any guarantee, indemnity or security that binds the National Revenue Fund to future financial commitments. In addition, the Preferential Procurement Policy Framework Act allows the Minister of Finance to make exemptions from provisions in the interests of national security, if the likely tenderers are international suppliers, or if it is in the public interest.

2. If any agreements have been concluded regarding project management and the construction of specified nuclear power plants, it would be between the relevant accounting authority and the service provider. Such agreements do not necessarily require the approval of the Minister of Finance.

Reply:

(1)(a) The total number of staff members of the SA Revenue Service who have resigned during the period 1 September 2014 to 30 April 2017 is 1277.

(b) 82 Employees were dismissed during the period 1 September 2014 to 30 April 2017.

(c)(i) 166 Employees were suspended with full pay during the period 1 September 2014 to 30 April 2017.

(c)(ii) 43 Employees were suspended without pay during the period 1 September 2014 to 30 April 2017.

(2)(a) 913 External applicants were recruited during the period 1 September 2014 and 30 April 2017 to fill funded vacancies.

(b) The annual attrition rate is reflected in the table below per financial year:

Reply:

1. Currently, section 107 of the Income Tax Act 58 of 1962 and section 74 of the Value Added Tax Act 89 of 1991 makes provision for the Minister of Finance to make regulations prescribing amongst other things the information that the Minister may require from the South African Revenue Service (SARS) Commissioner to ensure smooth tax administration and optimal revenue collection. The proposed amendments to section 107 of the Income Tax Act 58 of 1962 and section 74 of the Value Added Tax Act 89 of 1991 are to clarify that the Minister of Finance may make regulations in relation to the information that the Minister of Finance may deem necessary to ensure transparency, reporting on tax collection and that the target set in the Budget for revenue is achieved.

2. The proposed regulations will be made only after the amendment bills have been passed into law and will be published for public comment. A media statement will then be issued when these regulations are published for public comment.

Reply:

(a) what has he found to be the root cause of Sars’ loss of

   (i) institutional capacity

• SARS is unable to respond to comments made in the conference, however, the staff attrition rates over the last nine years have remained fairly constant between 6.59 in 2008/9 and 3.97% in 2016/17 (Feb. YTD) per annum.

Attrition Rate 2008/09	Attrition Rate 2009/10	Attrition Rate 2010/11	Attrition Rate 2011/12	Attrition Rate 2012/13	Attrition Rate 2013/14	Attrition Rate 2014/15	Attrition Rate 2015/16	Attrition Rate 2016/17 (Feb. 2017 YTD)
6.59%	4.12%	4.36%	4.18%	4.82%	6.01%	5.97%	4.61%	3.97%

 

(ii) its integrity

• The current public perception of loss of institutional capacity is not supported by the data, as can be gleaned from the above

(b) what actions should be taken in the national interest to rectify the situation?

SARS continues with the implementation and achievement of its strategic outcomes and objectives as articulated in the Strategic Plan tabled in Parliament. The revised Operating Model is being embedded to address the reviw.

Reply:

The total amount of financial losses suffered by the SA Airways as a result of the cancellation of flights due to the strike by the South African Cabin Crew Association on 26 April 2017 is R31 781 701.00.

Reply:

No, the National Treasury did not procure any services and has not made any payments. (a) (b) (c) (d), (i) (ii) (iii) (iv) (v) and (vi) are not applicable.

Reply:

(1)(a) and (b) At the outset it should be stated that any changes in the Government Employees Pension Fund’s (GEPF) Strategic Asset Allocation (SAA) cannot be implemented in a short period of time due to the size of the GEPF Portfolio. It is also for this reason that PIC clients provide the PIC with transition benchmarks, which are more dynamic benchmarks that reflect the SAA over a shorter term and are used during the period of transitioning a portfolio following mandate changes and changes in the SAA.

The revision of the 2007 GEPF Mandate in 2009 introduced new asset classes with new SAA ranges for these different asset classes. The effect was that there were breaches of the new SAA during the transition period when the GEPF Portfolio was being aligned with the revised GEPF Mandate. A similar situation occurred in 2011 when there was a further revision by the GEPF of its Mandate to the PIC and the portfolio had to be transitioned from the old to the newly revised mandate.

There are also from time to time technical breaches to the SAA due to market movements and currency fluctuations in different asset classes.

(2) As per point 5 of former Finance Minister Gordhan’s reply to Parliamentary Question 2375 of 30 November 2016, these breaches were reported to the GEPF’s Investment Committee and they were condoned and / or rectified.

Reply:

1. The National Treasury encourages constructive dialogue on PFMA related matters between Executive authorities, State Owned Companies and the National Treasury to avoid a situation where the matters are to be resolved with the intervention of the court. It is therefore regrettable that Denel has resorted to approaching the High Court for clarity on the Denel Asia and VR Laser Asia joint venture. Section 41(1)(h) of the Constitution states that

“All spheres of government and all organs of state within each sphere must---- co-operate with one another in mutual trust and good faith by

(i) fostering friendly relations;

(ii) assisting and supporting one another;

(iii) informing one another of, and consulting one another on, matters of common interest;

(iv) co-ordinating their actions and legislation with one another;

(v) adhering to agreed procedures; and

(vi) avoiding legal proceedings against one another.”

2. No, the National Treasury has not approached the courts.

3. Response to a, b and c is discussed below

30 October 2015: Submission by Denel SOC ltd. to the National Treasury (NT) with the title “PFMA Section 54 (2) pre notification: Proposed formation of Denel Asia”.

The intention of the letter was to inform the Department of Public Enterprises (DPE) of Denel’s intention to establish an incorporated joint venture company in Hong Kong for purposes of exploiting opportunities in the Asia Defense market.

11 December 2015: Submission by Denel SOC ltd. to the NT with the title “FORMAL APPLICATION FOR APPROVAL IN TERMS OF SECTION 51(1)(G) OF THE PUBLIC FINANCE MANAGEMENT ACT 1 OF 1999- PROPOSED ESTABLISHMENT OF DENEL ASIA SOC LIMITED” addressed to Minister D Van Rooyen.

05 February 2016: The NT - Office of the Chief Procurement Officer (OCPO) writes to Denel on the information they have received that Denel has established a JV agreement with VR laser in order to find a market for world class products in Asia. The purpose of the letter was to seek clarity on whether government prescripts were complied with when finalizing the JV agreement.

10 February 2016: Denel responds to the OCPO letter indicating that they will revert back by the 19 February 2016 with the requested information.

13 April 2016: Denel responds to the letter from OCPO dated 05 February 2016, indicating that Section 51(g) of the PFMA requires that the National Treasury be allowed a reasonable time to submit its decision prior to formal establishment of the joint venture. The further indicated that section 51 (g) read together with 51 (2) defines a reasonable time as 30 days from the date of submission which in the case of Denel Asia was 11 December 2015, 30 days thus expiring on 11 January 2016. This lead TO Denel assuming approval by both the Executive Authority as well as National Treasury which lead to the establishment of the joint venture.

18 April 2016: Letter from NT requesting additional information from Denel, which would assist in comprehensively assessing the application.

21 April 2016: Denel responded to NT’s letter and requested further clarity with regards to the information required.

26 April 2016: NT responded to Denel, providing the necessary clarity as requested by Denel.

11 May 2016: Denel still had not provided NT with the requested information; the Director-General (DG) wrote to Denel enquiring about the delay and offered his assistance in resolving any unanticipated obstacles. The DG further stated NT’s commitment to fast-tracking consideration of the application and the importance of Denel submitting the additional information in order for NT to be in a position to comprehensively assess all aspects of the application before reaching a decision was underlined. However, there was no response from Denel and the information was still not forthcoming.

10 June 2016: The Minister of Finance wrote to the Chairperson of Denel as well as the MPE requiring that the Board of Denel submit all the information that had been requested by 31 May 2016, as per the provisions of Section 54(1) of the PFMA. In addition, the letter highlighted that, in the event that the Board fails to submit the information, the Board, as the accounting authority of Denel, would be in breach of its fiduciary duties under the PFMA and must report its inability together with the reasons for failing to comply by no later than 28 June 2016.

28 June 2016: The Acting CEO (ACEO) of Denel, Mr Zwelakhe Ntshepe, sent a letter to the DG requesting that the deadline of 28 June 2016 be extended to 4 July 2016 citing that the extension will ensure that they provide a more comprehensive response to the request made by NT.

28 June 2016: The Chairperson of Denel sent a letter to the Minister of Finance and the MPE reiterating their position with regards to the Denel Asia transaction that all the relevant approvals were received. Denel further indicated that they would provide NT with the required information soon and underlined that it should be noted that the requested information would not be provided for the purpose of approval of the transaction but merely to comply with NT request as it is their view that the necessary approval(s) were obtained.

29 June 2016: NT grants Denel the requested extension to the 4th July 2016.

14 July 2016: The Acting CEO of Denel wrote to the DG responding to the request for information that had originally been sent on 18 April 2016. The letter stated that “in Denel’s view the approval process has been concluded as allowed for by the PFMA and thus provision of any information on the establishment of Denel Asia is purely for informational purposes”.

01 September 2016: NT sends a letter to Denel on the Sunday Time’s media statement asking Denel to share the letter with NT which was supposedly sent to them and made them react the way they did on the 31 August on the media.

05 September 2016: Denel responds to the NT letter dated 01 September 2016 to NT indicating that they also do not have the letter or the information quoted on the 28 August Sunday Times article.

24 November 2016: Denel writes to NT indicating that Denel Asia is dormant until such time two that the Ministers have reached consensus and Denel received an instruction to proceed from DPE.

Reply:

The National Treasury was informed about an additional amount of R316 447 361.41 (including VAT) when there was a dispute between the South Africa Social Security Agency (SASSA) and the Auditor-General on whether the variation should have been reported to the National Treasury or not. The expenditure was later declared irregular expenditure by the Auditor-General.

(a) The National Treasury agreed with the Auditor-General that R316 447 361.41 (including VAT) is irregular expenditure.

(b) Yes. 

Reply:

Name of the entity	Question 1	Question 2	Question 3
SASRIA	There is a vacancy for the Financial Director: (i) The position was vacant from 01 December 2016. (ii) It was due to resignation.	Vacancy was advertised: (a) interviews conducted. (b) to be filled by end of May 2017.	(a) One person is acting in the role. (b) Acting in the position from 01 December 2016. (c) Yes, the Acting person has applied.
SOUTH AFRICAN AIRWAYS (SAA)	The positions of Chief Executive Officer (CEO), Chief Financial Officer (CFO) are vacant at SAA. However, these positions are currently occupied by interim incumbents where the CEO is acting and the CFO is on secondment. (i) The position of the CEO has been vacant since 01 May 2015 whilst the position of the CFO has been vacant since 01 December 2015. The position of a COO does not exist in the current structure. (iii)The reason for the vacancies is due to resignation.	Both the positions of CEO and the CFO have been advertised, the interviews for the CFO position have been concluded and a successful candidate was approved by the Board. A discussion with the shareholders in this regard is awaited. Regarding the CEO position the first round of interviews and shortlisting has been concluded. The final round of interviews will start in due course, where after a discussion with the shareholders will be sought.	(a) There are two incumbents acting, one in each position. (b) The current Acting CEO started in this position in November 2015 and the interim CFO started in December 2015. (c) The interim CFO has applied for the position she is currently acting in.
GOVERNMENT TECHNICAL ADVISORY CENTRE (GTAC)	None.	Not applicable.	One person is acting as a head of GTAC. (b) 2 months and 2 weeks (Since February 2017); The position was advertised in April 2017.
FINANCIAL FISCAL COMMISSION (FFC)	(a) The position of Chief Executive Officer (CEO) is currently vacant. (i) Vacant since 01 September 2016. (ii) The term of the CEO came to an end on 31 August 2016.	The vacancy for a CEO has been advertised. The interviews have not yet been done. The recruitment process for the CEO is currently underway and it is anticipated that this will be filled by the 01 June 2017.	There is one person employed in an acting capacity namely the CEO. The Acting CEO was appointed on 12 September 2016. The Acting CEO has not applied for the position of the CEO.
GOVERNMENT PENSION ADMINISTRATION AGENCY (GPAA)	CFO position is vacant (i) Vacant since 01 October 2014. (ii) Delays in the appointment process. Chief Operations Officer (COO). (i) Vacant since 01 April 2014. (ii) Delays in the appointment process	The vacancy of CFO was advertised. Yes, interviews were conducted. It is uncertain when this position will be filled. The process will be communicated with the new Minister of Finance. The vacancy was advertised: Yes, interviews were conducted. There were no suitable candidates. (ii) It is uncertain when this position will be filled. The process will be communicated with the new Minister of Finance.	2 people (One internal person and the other from the National Treasury) National Treasury person: 1 year. GPAA person: 2 years. Total 3 years. They have not applied for the position. 1 person; 3 years The person has applied for the position.
Cooperative Banks Development Agency	Currently there is no post for a chief financial officer and chief operating officer in the organisation structure as the organisation only started operating in the 2010/11 financial year. The post of chief financial officer was recently established and will be funded in the 2018/19 financial year.	Not applicable	Not applicable
Financial Services Board	There is currently: (i) One vacancy of Chief Operations Officer (ii) Since October 2016. (iii) When the position was created.	The position has not been advertised as the entity is going through a transitional stage to change its current structure and mandate in terms of the Financial Sector Regulation Bill, 2015.	(a) One person is acting in the position. (b) Since October 2016.
Financial Intelligence Centre	No vacancy in respect of (a) and (b). There is no position of (c) chief operations officer on the structure of the entity.	Not applicable	Not applicable

Reply:

Yes, the National Treasury was invited by the Department of Women to attend meetings of the interdepartmental task team on the Sanitary Dignity Campaign which is aimed at providing sanitary products to indigent women, learners and students. Officials from the National Treasury attended the meetings and have been allocated to participate in the identified work streams. The National Treasury will also assist in assessing funding implications and sources.

Reply:

1. See the link: https://pmg.org.za/files/RNW885PRE-170418.docx
 

(2) The local government equitable share allocation for LIM368 for 2016/17 in the 2016 Division of Revenue Act was R92.5 million. In the 2017 Division of Revenue Bill the allocation to LIM368 is R93.4 million; and the indicative allocations for 2018/19 and 2019/20 are R100.8 million and R107.3 million respectively.

(3)(a) The Explanatory Memorandum to the Division of Revenue (available at www.treasury.gov.za and printed in the 2017 Division of Revenue Bill) sets out in detail how the local government equitable share allocations are calculated.

The Local Government Equitable Share (LGES) mainly funds free basic services for poor households in each municipality. For the purposes of the LGES formula, a poor household is defined as a household with an income less than the value of two state old age pensions. The number of poor households used in the LGES formula is based on the 2011 Census but is updated each year based on estimated household growth. The LGES also includes allocations for the institutional costs of municipalities and to subsidise other community services. Funds for community services and institutional costs are only allocated to municipalities with less ability to fund these costs from their own revenues.

The household numbers used to allocate the LGES since 2016 reflect the new municipal boundaries. The changes to municipal boundaries resulted in some significant changes to municipal allocations in 2016/17. To cushion the impact of these changes, all municipalities received at least 95 per cent of the equitable share formula allocation indicatively allocated to them in 2016/17 in the 2015 Division of Revenue Act. For merged municipalities, this guarantee was based on the sum of the equitable share allocations to the previously separate municipalities.

Additional funding was also allocated to the newly formed municipalities to support them with the costs of implementing the new demarcations. LIM368 was allocated R13.4 million in 2016/17 through the Municipal Demarcation Transition Grant. In 2017/18 the municipality is allocated R4.6 million through this grant.

(3)(b) The dates on which the local government equitable share is transferred to each municipality are prescribed in section 5(3) of the annual Division of Revenue Act. In 2016, local government equitable share transfers took place on 4 July 2016, 31 August 2016, 1 December 2016 and 17 March 2017. The 31 August 2016 transfer was made in terms of section 38 of the 2016 Division of Revenue Act which allowed for an additional transfer date for re-demarcated municipalities.

Reply:

1. The Small and Medium-sized Enterprises Fund was started by business and is driven through the CEO initiative as a show of solidarity and contribution towards growing the economy in a manner that creates more business and work opportunities for the people of South Africa. Government fully supports the initiative. While no “new money” is allocated to this initiative in the 2017 budget, Government is assessing the most appropriate vehicle and means through which to support SMME development, given the fiscally constrained environment.

2. As and when a decision has been made in this regard, government will then follow its process to set aside additional resources to further support SMMEs and announcements will then be made in either the Medium Term Budget Policy Statement or the Budget.

Reply:

a) The Office of the Chief Procurement Officer (OCPO) has an approved structure of 141 positions. Only 93 posts are funded. As at 31 March 2017, there are 91 permanent staff appointed on the OCPO establishment of which 28 are senior managers. (The said numbers do not reflect terminations, transfers or retirements from the department for the period 1 April 2013 to date.) Currently, the office component is 93, with 91 permanent and 2 contract employees.

(i) Since the inception of the OCPO on 1 April 2013, 47 appointments were made and 95 were absorbed from the establishment of the Specialist Function Division which was previously responsible for Supply Chain Management in the National Treasury.

(ii) No permanent employees are allocated to the OCPO call centre. The Black Business Council in the Built Environment (BBCBE) is funding thirteen (13) resources for queries on 30 day payments and ten (10) resources for the Central Supplier Database (CSD) funded by the South African Local Government Association (SALGA), for a period ending 31 March 2017. Call centres for CSD are also available at the Provincial Treasuries and the number of personnel are allocated as follows:

• Eastern Cape Provincial Treasury: 10 people
• Northern Cape Provincial Treasury: 8 people
• Western Cape Provincial Treasury: 4 people
• Free State Provincial Treasury: 5 people
• Limpopo Provincial Treasury: 18 people
• Gauteng Provincial Treasury: 15 people
• Mpumalanga Provincial Treasury: 7 people
• KwaZulu-Natal Provincial Treasury: 11 people
• North West Provincial Treasury: 6 people

b) The OCPO has only one office based in the National Treasury, Pretoria.