Questions and Replies

Reply:

I want to refer the Honourable Member to the submission made by the National Treasury in its submission to the Nugent Commission on 29 August 2018, which I fully endorse: “Enforcement powers that are also intrusive are necessary for any tax collection agency. Whilst most taxpayers seek to comply, there are cases of taxpayers who are less cooperative when declaring income or have a clear incentive to withhold key facts about the nature of income-generating activities of the person or business. In such cases it is necessary for SARS to have intrusive enforcement capacity to deal with such evasion.” (“Tax Policy input”, 29 August 2018, pg. 2, Document available on wwww.inqcomm.co.za).

While it is not required of me to infer or elaborate the meaning of Mr. Momoniat’s statement at the Standing Committee on Finance meeting on 17 September 2019, I am informed that Mr. Momoniat was responding in general terms to the Honourable Member’s questions about surveillance capacity of SARS after presenting on progress made on the implementation of the recommendations of the Commission of Inquiry into Tax Administration and Governance by SARS (the Nugent Commission). It is not clear to me why the Honourable Member did not ask Mr Momoniat any further questions for clarification at that meeting. I am in agreement with his view on the general requirement for intrusive capacity for a well-functioning revenue-collection authority. I am sure the Honourable Member will also agree that SARS must have significant intrusive powers, not only to deal with taxpayers concealing information on income received, but also to counter illegitimate trades (and financial flows) in commodities such as tobacco, liquor and counterfeit goods.

Seeing that Mr Momoniat’s response was on the principle, rather than on any specific unit within SARS, questions (a) to (c) do not apply. Indeed, since SARS is a semi-autonomous revenue authority which determines its own internal organization, it is the Commissioner, and not the Minister or any official at National Treasury, who can provide any information on any unit within SARS. I am sure the Honourable Member is also aware that the Nugent Commission’s final report points out that there is “no reason why SARS was, and is not entitled to establish and operate a unit to gather intelligence on the illicit trades, even covertly, within limits.” (p76 par [9]) Indeed, the Nugent Commission has noted that any such unit is not unlawful. Indeed, SARS must not be a toothless tiger when dealing with tax evasion and illegitimate trades and financial flows.

Reply:

a) The travel costs for the National Treasury official who attended the joint Portfolio Committee meetings on (i) 29 October 2019 was R14 536.72 via Pietermaritzburg (the official had a meeting at the Msunduzi Local Municipality on the 28th October and travel arrangements were made for him to catch a flight from Pietermaritzburg to Cape Town) and (ii) 5 November 2019 was R8 224.22.

b) Only one (1) official attended both meetings..

Reply:

i) The details of purpose of investigation or specialised performance audit conducted is reflected as the title of each report, as listed in Annexure A of Parliamentary Question 3072, dated 26 October 2018, as attached.

(ii) (aa) The details of findings are contained in the detailed reports of the organ of state concern and should be required from the relevant organisation.

iii) (bb) The details of recommendations are contained in the detailed reports of the organ of state concern and should be required from the relevant organisation.

NATIONAL ASSEMBLY

QUESTION FOR WRITTEN REPLY

QUESTION NUMBER: 3072 [NW3436E]

DATE OF PUBLICATION: 26 OCTOBER 2018

OFFICE OF ACCOUNTANT-GENERAL: Specialised Audit Services’ Investigations and performance audits

Reporting Period: 1 April 2017 until 30 September 2018

No	Nature of assignment	Organ of state	Report title	Period completion
(i) Financial Year: 1 April 2017 until 31 March 2018
1.	Forensic Investigation	Richmond Municipality	Supply Chain Management Irregularities	June 2017
2.	Forensic Investigation	Disobotla Local Municipality	Supply Chain Management Irregularities	June 2017
3.	Forensic Investigation	Department of Women	Supply Chain Management Irregularities	September 2017
4.	Forensic Investigation	National Department of Transport	Supply Chain Management Irregularities	September 2017
5.	Forensic Investigation	Eastern Cape Department of Human Settlements	Irregularities in Land Acquisition	September 2017
6.	Forensic Investigation	Eastern Cape Department of Social Development	Supply Chain Management Irregularities	September 2017
7.	Forensic Investigation	Northern Cape Department of Health	Supply Chain Management Irregularities – (WTSO Medical Suppliers)	September 2017
8.	Forensic Investigation	Northern Cape Department of Health	Supply Chain Management Irregularities – (Dr. Dithebe Medical & Dental Suppliers)	September 2017
9.	Forensic Investigation	Mnquma Local Municipality	Municipal Corruption	September 2017
10.	Forensic Investigation	Moses Kotane Local Municipality	Supply Chain Management Irregularities	September 2017
11.	Forensic Investigation	Independent Police Investigative Directorate	Supply Chain Management Irregularities	December 2017
12.	Forensic Investigation	OR Tambo District Municipality	Fraudulent Payments	December 2017
13.	Forensic Investigation	Bushbuck Ridge Municipality	Fraudulent Payments	December 2017
14.	Forensic Investigation	Department of Arts & Culture	Supply Chain Management Irregularities	December 2017
15.	Forensic Investigation	Eastern Cape Office of the Premier	Supply Chain Management Irregularities	December 2017
16.	Forensic Investigation	Eastern Cape Office of the Premier	Supply Chain Management Irregularities	December 2017
17.	Forensic Investigation	Eastern Cape Office of the Premier	Supply Chain Management Irregularities	December 2017
18.	Specialized Performance Audit	National Treasury	OAG- Operational Plan 2018/19 Phase 1	December 2017
19.	Forensic Investigation	Council for Geoscience	Supply Chain Management Irregularities	December 2017
20.	Forensic Investigation	Limpopo Department of Transport	Supply Chain Management Irregularities	December 2017
21.	Forensic Investigation	Northern Cape Department of Health	Supply Chain Management Irregularities – Gopolang	December 2017
22.	Forensic Investigation	Northern Cape Department of Health	Supply Chain Management Irregularities – Adcarden	December 2017
23.	Forensic Investigation	Northern Cape Department of Health	Supply Chain Management Irregularities – CQW	December 2017
24.	Forensic Investigation	National Treasury	Supply Chain Management Irregularities – RT5	December 2017
25.	Forensic Investigation	City of Matlosana Local Municipality	Supply Chain Management Irregularities	December 2017
26.	Specialized Performance Audit	Bergrivier Local Municipality	Supply Chain Management Irregularities	March 2018
27.	Forensic Investigation	Eastern Cape Office of the Premier	Supply Chain Management Irregularities – mobile classrooms	March 2018
28.	Forensic Investigation	Eastern Cape Office of the Premier	Supply Chain Management Irregularities – mobile classrooms	March 2018
29.	Forensic Investigation	Eastern Cape Office of the Premier	Supply Chain Management Irregularities – school furniture	March 2018
30.	Specialized Performance Audit	National Treasury	OAG Operational Plan	March 2018
31.	Performance Audit	Government Pensions Administration Agency	Supply Chain Management unit Review	March 2018
32.	Specialized Performance Audit	Government Pensions Administration Agency	Supply Chain Management unit establishment	March 2018
33.	Specialized Performance Audit	Government Pensions Administration Agency	Supply Chain Management policies and Procedure Manual	March 2018
34.	Specialized Performance Audit	Government Pensions Administration Agency	Supply Chain Management Process and Procedures	March 2018
35.	Specialized Performance Audit	Government Pensions Administration Agency	Supply Chain Management unit Performance Management	March 2018
36.	Forensic Investigation	Kimberley Mental Hospital	Supply Chain Management Irregularities	March 2018
37.	Forensic Investigation	Eastern Cape Department of Social Development	Financial Mismanagement – ECDC Centers	March 2018
38.	Forensic Investigation	Eastern Cape Department of Social Development	Financial Mismanagement – Co-operatives	March 2018
39.	Forensic Investigation	Northern Cape Department of Health	Supply Chain Management Irregularities - Afrollah	March 2018
40.	Forensic Investigation	Independent Police Investigative Directorate	Supply Chain Management Irregularities	March 2018
41.	Forensic Investigation	Independent Police Investigative Directorate	Supply Chain Management Irregularities – Financial Analysis	March 2018
42.	Forensic Investigation	Department of Trade and Industry	Supply Chain Management Irregularities – Employment Creation Fund	March 2018
43.	Forensic Investigation	Limpopo Department of Cooperative Governance	Supply Chain Management Irregularities	March 2018
44.	Forensic Investigation	Eastern Cape Cooperative Governance	Supply Chain Management Irregularities – Dr Beyers Naude Municipality	March 2018
45.	Forensic Investigation	National Treasury	Supply Chain Management Irregularities –RT50	March 2018
46.	Forensic Investigation	Moses Kotane Local Municipality	Supply Chain Management Irregularities – ICT Continuous Contract	March 2018
(II) Financial Year: 1 April 2018- 30 September 2018
1.	Forensic Investigation	Eastern Cape Department of Human Settlements	Fraud & Corruption -	June 2018
2.	Forensic Investigation	National School of Government	Conflict of Interest	June 2018
3.	Forensic Investigation	Department of Women	Supply Chain Management Irregularities – Phase 2	June 2018
4.	Specialized Performance Audit	Department of Trade & Industry	Irregular Administering of Employment Creation Fund	June 2018
5.	Forensic Investigation	Passenger Rail Agency South Africa (PRASA)	PPP Supply Chain Management Irregularities	June 2018
6.	Forensic Investigation	National Treasury – Government Technical Advisory Center (GTAC)	Supply Chain Management Irregularities – Appointment	June 2018
7.	Forensic Investigation	Northern Cape Department of Transport, Safety & Liaison	Irregular Transfer of Grant Funding by RTMC	June 2018
8.	Forensic Investigation	Eastern Cape Department of Social Development	Supply Chain Management Irregularities	June 2018
9.	Forensic Investigation	Department of International Relations and Cooperation (DIRCO)	Review of Forensic Investigation Reports	September 2018
10.	Specialized Performance Audit	Bergrivier Local Municipality	Audit of Completeness of Pre-paid electricity sales – Phase 2	September 2018
11.	Forensic Investigation	National Treasury	Irregular appointment of service providers on the RT25 (mSCOA) by Municipalities.	September 2018
12.	Forensic Investigation	Limpopo Department of Health	Supply Chain Management Irregularities	September 2018
13.	Forensic Investigation	Modimolle Local Municipality	Supply Chain Management Irregularities	September 2018
14.	Forensic Investigation	National Treasury	Supply Chain Management Irregularities	September 2018
15.	Forensic Investigation	North West Department of Rural Environment & Agriculture Development	Supply Chain Management Irregularities	September 2018
16.	Forensic Investigation	Amathole District Municipality	Supply Chain Management Irregularities	September 2018
17.	Forensic Investigation	Nelson Mandela Bay Municipality	Supply Chain Management Irregularities – IPTS (phase 4)	September 2018

Reply:

As explained in the reply to question 934, financing the Gauteng Freeway Improvement Project (GFIP) is done on a corporate finance basis and not a project finance basis. Borrowing for toll roads are done on the basis that there is a revenue stream to finance the debt. A significant portion of the South African National Roads Agency’s existing debt was to finance the upgrade of roads on GFIP and it requires a revenue stream to finance it, so e-tolls cannot be abolished without a revenue stream to finance existing commitments.

Reply:

(a)(b)(c)(i)(ii) No

Reply:

(a)(i)&(ii) No costs incurred

(b)(i)&(ii) No costs incurred

Reply:

Section 23 of the Independent Police Investigative Directorate Act (hereafter referred to as the IPID Act) (2011) provides that the conditions of service, including the salary and allowances payable to an investigator appointed under the IPID Act (2011), must be on par with members appointed as detectives in terms of the South African Police Service Act.

As part of the 2018 Medium Term Expenditure Framework (MTEF) Budget, funds were reprioritised from the South African Police Service (SAPS) to the Independent Police Investigative Directorate (IPID) to provide for various IPID unfunded cost pressures, amongst which was the implementation of section 23 of the IPID Act (2011). At the time of the allocation, the IPID had costed the prospective implementation of section 23 of the Act to amount to R9.3 million over the 2018 MTEF. Subsequent to the allocation of the additional funding, IPID then informed the National Treasury that in terms of the Court ruling, it was also required to implement section 23 retrospectively. This implies that the IPID was required to back-date the salary adjustment for investigators to align with the salaries of Detectives in SAPS, from when the Act was first implemented in 2012. As the budget process had already been concluded, no additional funds were allocated to the IPID.

Upon further engagements with the IPID on this matter, the National Treasury was informed that implementation of section 23 of the IPID Act (2011) did occur in 2018/19 but only as it relates to the prospective adjustment of salaries (notch increments) for investigators. Other salary-related adjustments such as pension liability and back-dated payments were not implemented due to the unavailability of funds.

As part of the 2019 Adjustments Budget, the IPID approached the National Treasury with a request to shift funds within compensation of employees to provide for the back-dated payment of pension liabilities for investigators. The National Treasury supported this proposal on condition that the IPID can accommodate the attendant carry-through costs associated with the revised pension contribution for investigators within its baseline.

Reply:

The aforementioned Classification Circular was developed in consultation with provincial treasuries, specifically the Provincial Accountants-General (PAGs). Once issued the PAGs took responsibility for the implementation thereof in their respective provinces. Any investigation in to the accounting practices as referred to in (1) above would accordingly fall within the remit of each provincial treasury.

Any challenges identified in the implementation and/or audit are however communicated between the PAGs and the National Treasury, represented by the Office of the Accountant-General (OAG), for discussion and resolution. These discussions focus on the substance of the arrangements and the appropriate classification in the accounting and budgeting processes and systems. The legality of arrangements (suspected and/or confirmed) is dealt with by the accounting officer of the provincial department under the oversight of the provincial treasury.

Assets procured from implementing agents are classified and recorded as such in the provincial department’s financial statements. Non-compliance has and will be identified by the AGSA where the accounting office of the department fails to ensure compliance. To this end, there are regular engagements between the National Treasury, OAG, and the AGSA to ensure the accuracy of the audit findings and recommendations. Any correction of material errors such as correcting the non-disclosure of capital assets acquired from implementing agents are identified separately in the notes to the financial statements.

Reply:

SARS administers the Customs and Excise Act and does not perform immigration functions at places of entry or exit.

(a)(b)(i)(ii)

Processing times per location are not available as the customs declaration processing system is centralized. Import and export declarations are submitted electronically to customs, processed electronically and released electronically by customs.

The historic data is not readily available and involves an extensive process of data extraction due to the current system design. The average turnaround time consistently over the last several years is less than a minute.

For 2019, the average processing time for electronic import and export declarations on which there is no impediment to the release, i.e. detention for inspection purposes, was 39 seconds. In other words, service providers who submitted electronic declarations to Customs received an electronic release message from customs within 39 seconds of submission, on average.

It is to be noted that more than 70% of all cargo are cleared prior to arrival.

Reply:

1. The value of the official gold reserves as at 30 September 2019 was US$5.97 billion (ZAR90,88 billion) (as outlined in the monthly release below), which is approximately 4 million fine ounces. As indicated to the Honourable Member in response to his previous question PQ NW232E (as published on 15 February 2019), the South African Reserve Bank publishes information on our gold reserves every month, which the Honourable Member can access from its website, at

https://www.resbank.co.za/Markets/ForeignReserves/Pages/default.aspx

In particular, for this question, I refer the Honourable Member to the following link on its website:

https://www.resbank.co.za/Lists/News%20and%20Publications/Attachments/9541/GoldFXReserves_September2019.pdf

2. The SA Reserve Bank has not made any public announcement on its future plans with regard to the composition of the reserves, but it generally increases reserves depending on timing, particularly when the rand strengthens.

 

Reply:

(a)(b)(c) A certain company (details furnished) is not reflected on the SARS vendor masterrecord and therefore SARS has no record that this company has ever been contracted, including the period 1 January 2008 to 31 December 2014, by SARS.

Reply:

(a)(i)(ii)(b) SARS has no record that a certain person was approached with a financial offer in April 2014 and no amount was ever paid by way of settlement to the person concerned.

Reply:

(a)(b)(c) According to SARS available records, SARS did not lease any offices in Waterfall Park during the period 1 January 2009 until 31 December 2014.

Reply:

1. The current administration has no knowledge that any SARS employee held an in-depth interview with a certain newspaper. SARS employees are prohibited from disclosing any taxpayer information contrary to the provisions of Chapter 6 of the Tax Administration Act, 2011. This is an offence in terms of section 236 of that Act.

2. (a)(b) As at the date of providing this response SARS cannot locate a reply to a media inquiry to a certain newspaper during 1 January 2014 and 31 March 2014. It is however noted that in an article published by a certain newspaper on 20 March 2014 it is reported that “Sars provided amaBhungane with general details of the work it has done to combat non-compliance in the tobacco industry, but did not comment on the specific incidents referred to in this article.”

Reply:

All employers, including the SSA, are required to deduct pay-as-you-earn from remuneration paid to employees in accordance with the Fourth Schedule to the Income Tax Act, 1962; and SARS has issued a Guide which is publicly available to assist employers.

(a)(b) SARS is statutorily unable to disclose details of any arrangement made with or about any person who is a taxpayer.

Reply:

a) SARS cannot identify listening devices imported into the country by SARS.

b) Not applicable.

Reply:

1. No, National Treasury is not actively considering the introduction of prescription of assets. I want to assure all member of any retirement fund that Government’s first and foremost responsibility is to protect their funds at all times, and we have in fact strengthened our regulatory system to continue to do so (e.g. through “Twin Peaks” legislation like the Financial Sector Regulation Act of 2017). In addition, the current regulatory framework in terms of the Pensions Fund Act (PFA) places a fiduciary duty on trustees of funds to always invest prudently and in the best interest of the members. This naturally means investing for the long term, in ways that support economic development and growth, and earning good returns based on fund and market fundamentals. This is good for pension fund members as well as the country. Regulation 28 of the PFA and Guidance Notice 1 of 2019 on Sustainability of Investments and Assets already require pension fund trustees to consider Environmental, Social and Governance (ESG) issues when making investments (refer to Guidance Notice 1 of 2019 on Sustainability of Investments and Assets in the context of retirement funds issued by the Financial Sector Conduct Authority (FSCA) and available on its website www.fsca.co.za).

I would like to caution all who make public comments on retirement funds, including those who report on them, to take greater care that they do not in the process scare retirement fund members to cash out their funds and hence not to preserve their savings. They will become more vulnerable in old age, when they retire and no longer have a decent income or savings.

2. National Treasury has not held any consultative meetings this year with industry or any person on prescribed assets. Guidance is currently given by Government through Regulation 28 and the abovementioned Guidance Notice.

Reply:

1. (a) Below are link summarizing the monies allocated and disbursed to state owned enterprises over the last years. There are two types of payments, the first is the recapitalization funding and the other transfers to public corporations. Transfers are regular payments made to entities by parent departments.

http://pmg-assets.s3-website-eu-west-1.amazonaws.com/RNW302.pdf 

1) (b) With regard to transfers to public corporations- Regular transfers for operations paid by the parent department have no conditions. The recapitalization conditions detail is listed below for each SOE.

Broadband Infraco:

1) (b) No Conditions - Funds were allocated for establishment costs as this was a newly created entity.

1. No conditions
2. No conditions
3. No conditions breached

Denel

1. (b) Allocated subject to Cabinet approval of Denel's strategy, business plan and funding plan
2. Corporate plan approved
3. Monthly meetings continue to be held with the SOC and the Department of Public Enterprises
4. NA

Development Bank of Southern Africa

1. (b) There were no specific conditions for the recapitalisation the Development Bank of Southern Africa. It was meant to stabilise their financial position after making loses in the previous years
2. No conditions
3. No conditions
4. No conditions breached

Eskom

2008/09 -2010/11 Subordinated loan (R60 billion)

1) (b) The conditions that were imposed on Eskom mainly related to Eskom achieving certain financial metrics in order to service the debt as well as interest.

2) Due to deterioration of its financial position, Eskom did not meet these conditions. Ultimately, the loan was converted into equity in 2015 as part of the Government support package that was provided to Eskom.

3) Quarterly progress reports and regular engagements between the National Treasury, DPE and Eskom.

4) No conditions were breached. The subordinated loan was later converted to equity in line with a cabinet decision as part of Government Support Package to Eskom.

2015/16 R23 billion equity

1.(b) The conditions as detailed below:

• 1. Developing a three-year generation strategy;
• 2. Developing a comprehensive maintenance strategy;
• 3. Delivering at least R60 billion through cost savings programme in line with the 2015 corporate plan;
• 4. Submit application to NERSA for tariff adjustments;
• 5. Raise the borrowing programme additional R52 billion of debt over the planned borrowings in the MYPD3;
• 6. No new investment to be undertaken in future coal mines;
• 7. Connect Renewable Energy programme to the National grid;
• 8. Implement the R250 billion capex together with additional R29 billion for critical transmission and distribution infrastructure;
• 9. Limit cost overruns in the new build programme;
• 10. Review of labour costs, employee benefits and salary adjustments;
• 11. Develop a detail proposal for the disposal of non-core assets;
• 12 Independent review of operating model and subsidiaries;
• 13. Ensure all the investigations initiated by the Board are concluded within the contracted timelines and submit findings to National Treasury and DPE;
• 14. Fill vacant position as a matter of priority; and
• 15. Provide quarterly reports to National Treasury and DPE
•  
• However, initially did not meet the below conditions such as:
• 1. Detailed study on labour costs;
• 2. Study on the operating model; and
• 3. Not providing sufficient information on the quarterly report according to National Treasury requirements.

 

2) Yes all the conditions were subsequently met

3) Quarterly progress reports and regular engagements between the National Treasury, DPE and Eskom.

4) Funds were withheld until ESKOM complied with conditions

2019/20 R23 billion equity

1) (b) No conditions were attached.

1. No conditions
2. No conditions
3. No conditions breached

Land and Agricultural Development Bank of South Africa

1. (b) There were no specific conditions for the recapitalisation the Land and Agricultural Development Bank of South Africa. It was meant to stabilise their financial position after making loses in the previous years
2. No conditions
3. No conditions
4. No conditions breached

National Housing Finance Cooperation

1. (b) No conditions were given
2. No conditions
3. No conditions
4. No conditions breached

National Urban Reconstruction and Housing Agency

1. (b) Use recapitalisation funds to repay loan commitments.
2. Yes - conditions were met
3. Quarterly reports - Proof of loan repayment contained in 2016 Annual Report notes to the financial statements
4. NA

Rural Housing Loan Fund

1. (b) No conditions were given
2. No conditions
3. No conditions
4. No conditions breached

South African Airways (SAA)

1) (b) Money should be used only for government guaranteed debt, SAA should submit maturity profile of government guaranteed debt together with negotiation plan to manage short-term debt; provide progress reports on progress on initiatives that have been implemented to improve working capital management, provide quarterly financial performance reports

2) Yes

3) Weekly and monthly meetings are being held to monitor financial performance and implementation of measures to improve cash flow

4) Na

South African Express SOC Limited (SAX)

1 (b)

• 1. Funds will not be utilised to repay any portion of debt owed by South African Express Airways SOC Limited to Transnet;
• 2. The funds should be utilised only to repay South African Express Airways SOC Limited government guaranteed debt;
• 3. Upon recapitalisation, South African Express Airways SOC Limited’s government guarantees will be reduced in line with the quantum of recapitalisation;
• 4. South African Express Airways SOC Limited submits monthly progress reports on the utilization of funds to the Department of Public Enterprises and the National Treasury;
• 5. By 31 December 2018, Department of Public Enterprises should present a plan for approval by Cabinet of the optimal corporate structure for state owned airlines which should include options that will be pursued for strategic equity partnerships and the disposal of non-core assets; and
• 6. By 31 December 2018, South African Express Airways SOC Limited and Department of Public Enterprises should submit a comprehensive plan that outlines the airlines strategy to reduce its reliance on Government financial support in the form of guarantees or recapitalisation.

2) The airline used some of the money to pay for leases instead of guaranteed debt as was required

3) Monthly meetings are held

4) A Letter was written to the Department of Public Enterprises and the entity was notified about the irregular expenditure. The Auditor General South Africa was also notified.

South African Post Office

1) (b)

• R650m Amount was allocated as recapitalisation of SAPO to implement a strategic turnaround plan. The conditions set were as follows: 1. SAPO must not utilize this allocation to fund any past or future salary increases and bonuses. The DTPS must ensure compliance with this condition.
• 2. The Department must further ensure SAPO continues to submit progress reports on the implementation of its Strategic Turnaround Plan by 20th of every month, clearly providing a breakdown of how the funds have been used. National Treasury should be notified prior to the due date should there be any delays in the submission of the report.
• R3.7bn
• 1. SAPO effect payment to the Facility Agent (Nedbank) to defray the R3.7bn loan.
• 2. SAPO providing a letter to National Treasury from Facility Agent confirming that the R3.7bn facility has been defrayed in full.
• 3. The guarantee agreement entered into between the lenders and the National Treasury will be terminated upon the receipt of the confirmation letter as set out above.
• 4. SAPO will be liable to pay any outstanding interest of fees that may arise, after the R3.7bn allocation is affected, ensuring that the R3.7bn facility is fully defrayed.
• 5. SAPO's R4.17bn guarantee and R4.42bn borrowing limit will be reduced by R3.7bn. The National Treasury will issue a letter to this effect upon the settlement of the R3.7bn facility. All guarantee conditions will remain in full force and effect.
• 6. SAPO will continue to report to the Monthly Monitoring Task Team on the development and implementation of a revised corporate strategy on a monthly and quarterly basis.
• R2.9bn
• 1. SAPO's R470 million guarantee will be folded into this guarantee.
• 2. The guarantee will lapse after three years or as soon as the loan to be raised is defrayed, whichever comes sooner.
• 3. The monthly monitoring task team will continue for the duration of the guarantee period.
• 4. SAPO to provide monthly reports on the company's financial position and progress in developing and implementing a longer term turnaround strategy.
• 5. SAPO will provide monthly cash flows and projections as well as a breakdown of all outstanding creditor balances and projected creditor balances.
• 6. Should labour increase (including back pay) exceed the assumption included in the cash requirement calculation submitted for this application, measures will be taken by SAPO to ensure that the overall salary bill remains within the budget identified.
• 7. The guarantee will be reduced by allocations or recapitalisation that may be made to SAPO.
• 8. SAPO will be responsible for the drafting of a feasible and implementable corporate strategy framed within the legislative prescripts of its relevant policies. The corporate strategy will be accompanied by operational plans that will assist in monitoring the implementation and progress made by SAPO.
• 9. SAPO with the assistance of DTPS to implement its 4 phased cost reduction strategy including its revised business model as part of the 2019 corporate strategy.
• 10. All critical vacancies are to be filled within 5 months of the issuance of this guarantee.
• 11. SAPO will rebalance its post office network in an effort to eliminate operational and cost inefficiencies.
• 12. SAPO will not utilise the excess capital within Postbank to fund operations.

2) Yes

3) Monthly meetings, Monthly and quarterly reports

4) None. All conditions relating to the R650m and the R3.7b allocations have been fully met. With regard to the R2.9b allocation, conditions have been met, and the 2019 Corporate Plan submitted by the Post Office addresses the conditions that are related to the revised business model.

South African Postbank

1) (b)

- The Postbank is to provide a comprehensive project plan that sets out specific project implementation, timelines and responsibilities along with associated budgets;

-The Postbank will provide quarterly progress reports on projects and expenditure against the budget.

2. Conditions are partially met in a sense that the corporatisation is still ongoing process due to the long nature of the process that had to be undertaken

3. Monitoring meetings between DoC and Treasury were held on a regular basis where progress was discussed and noted.

4. NA

Reply:

The information required is contained in the Annexure to this reply.

ANNEXURE

Investment Name	REIPPP Bid Round	Technology	Plant Capacity (MW)	PIC shareholding (%)	Plant Status	PIC investment (R million)
SunEdison Soutpan-Erika	1	Solar PV	28	24%	Sold	R153
SunEdison Witkop-Core	1	Solar PV	30	39%	Sold	R171
SolarCapital de Aar 1	1	Solar PV	94	25%	Held-for-sale	R196
Touwsrivier Solar Park	1	CPV	44	40%	Production	R354
SunEdison Boshoff	2	Solar PV	60	19%	Production	R318
Bokpoort Solar CSP	2	CSP	50	25%	Production	R525
Intikon Jasper	2	Solar PV	75	41.5%	Production	R236
Ilanga CSP1 / Karoeshoek Solar One	3	CSP	100	20%	Production	R557
Xina Solar One	3	CSP	100	20%	Production	R623
Kathu Solar Park	3.5 (CSP bid window)	CSP	100	17.5%	Production	R583
Roggeveld Wind Farm	4	Wind	140	23.25%	Construction	R313
TOTAL						R4 029

Reply:

With reference to the list of forensic investigations and specialised performance audits, as listed on ANNEXURE A of Question No. 3072, Below is the response:

i. The details of the findings and recommendations are contained in the detailed reports submitted to the respective department, municipality, entity or law enforcement agent, if requested.

ii. National Treasury is an agent and not the owner of the reports. Therefore, the respective organ of state, as reflected in Annexure A of Question No. 3072 should be responsible for responding to the question posed.

Reply:

NATIONAL TREASURY

(i)	(aa) Cleaning	(bb) Security	(cc) Gardening
(aaa) 2017-2018	R6 034 638.21	R 8 514 099.44	0
(bbb) 2018-2019	R6 179 029.93	R 9 417 747.00	0
Total Amount	R12 213 668.14	R17 931 846.44	0

(b)	Cleaning	Security	(c) Total Amount
Rise Security		R 15 155 105.26	R 15 155 105.26
Complete Security		R 1 628 077.18	R 1 628 077.18
Pabalelo Security		R 1 148 664.00	R 1 148 664.00
Bontle Ke Botho	R9 870 667.61		R9 870 667.61
Neso Scope	R2 343 000.53		R2 343 000.53
Total Amount	R12 213 668.14	R17 931 846.44

ASB

The Accounting Standards Board has two separate service providers, one for cleaning services, and one for security services. We do not have a garden and accordingly, we have not incurred any garden services. The cleaning contract cost R75 543, 88 in 2017/18 and R81 275,40 in 2018/19. The security cost R6 972,63 in 2017/18 and R8 508,63 in 2018/19.

CBDA

The Co-operative Banks Development Agency (CBDA) did not utilize any service provider for cleaning, security and gardening services as the Agency is housed at the National Treasury offices.

DBSA

1. (aa)(bb)(cc) (aaa) (bbb)

Cleaning (Services have been insourced since – June 2015)

Period	Remuneration (Cost to Bank)	Equipment and Consumables	Total Costs
2017/18	3,180,157	1,138,231	4,318,388
2018/19	3,425,033	1,816,742	5,241,775

Security (Services have been insourced since– July 2016)

Period	Remuneration (Cost to Bank)	Service Provider (Maintenance)	Service Provider (Armed Response)	Equipment and Consumables	Total Costs
2017/18	5,521,486	457,552	36,529	27,983	6,043,550
2018/191)	6,402,059	466,121	22,922	140,495	7,031,597

Note 1: Equipment and consumables includes licence fee for security electronic system.

Landscaping services costs

Period	Service Provider (Full landscaping services)	Small Enterprise Development company (Gardening services)	Incubation costs (Training Service Provider)	Total Costs
2017/18	1,367,000 2)	0.00	0.00	1,367,000
2018/19	332,187 3)	1,127,406 3)	173,971 4)	1,633,564

Notes:

2: In 2017/18 R1,367,000 was paid for Landscaping Services to a contracted services provider.

3: During 2018/19 a fully black owned enterprise development company was created by the DBSA for
gardening services and R1,127,406 was paid to the enterprise development company for the
landscaping services. The R332,187 paid to the contracted services provider was for last contracted
services provided before contract ending.

4: R173,971 paid for incubation programme in training the enterprise development beneficiaries..

b. Amounts paid to each service providers, per specific service provided, included in the tables above.

c. Total amounts paid to each service provider included in the tables above and are the same amounts
paid for specific service.

FAIS OMBUD

The following amounts, where applicable, were expended by the FAIS Ombud on the following services:

(aa) Cleaning Services: 2017/18 – Nil

2018/19 – Nil

(Cleaning services are provided in-house)

(bb) Security Services: 2017/18 – R73,139.42

2018/19 – R106,692.96

Supplier	2018/2019	2017/2018
	R	R
ADT Security (Pty) Ltd	4 539,79	14 431,46
Cheche Consulting (Pty) Ltd	15 000,00	3 363,00
National Security & Fire (Pty) Ltd	362,52	362,52
Royal Security CC	46 390,65	54 982,44
Securec PVT LTD	400,00	-
Today’s Destiny Trading & Projects	40 000,00	-
Grand Total	106 692,96	73 139,42

(cc) Gardening Services - 2017/18 – Nil

2018/19 – Nil

(Not applicable to the FAIS Ombud)

FIC

(a)(ii) The FIC incurred the following expenditure during the 2017/18 and 2018/19 financial years:

(aa) Cleaning (aaa) 2017/18 R 1 549 926.81 (bbb) 2018/19 R1 724 438.64

(bb) Security (aaa) 2017/18 R 2 444 465.51 (bbb) 2018/19 R2 608 760.02

(cc) Gardening (aaa) 2017/18 R24 889.40 (bbb) 2018/19 R32 659.98

(b)(c) The FIC paid the following to each service provider for the specified services rendered:

		Amount R'	Cleaning	Security	Gardening
Name of the supplier	Service rendered	2017/2018	2018/2019	Total	2017/2018	2018/2019	2017/2018	2018/2019	2017/2018	2018/2019
Nakisani Hygiene Services	Cleaning Services - Centurion	1 109 707.55	1 210 981.16	2 320 688.71	1 109 707.55	1 210 981.16
Bright and Spotless Cleaning Services	Hygiene Services - Centurion	406 673.16	477 721.68	884 394.84	406 673.16	477 721.68
Monabo Hygiene Sevices	Cleaning and Hygiene Services – Cape Town	33 546.10	35 735.80	69 281.90	33 546.10	35 735.80
Analytical Risk Management	Physical Security Services - Centurion	2 211 495.11	2 367 185.27	4 578 680.38			2 211 495.11	2 367 185.27
Mafoko Security Services	Physical Security Services – Cape Town	232 970.40	241 574.75	474 545.15			232 970.4	241 574.75
Bidvest Execuflora (Pty) Ltd	Office plant maintenance	24 889.40	19 834.74	44 724.14					24 889.4	19 834.74
FSG Landscaping Group (Pty) Ltd	Office plant maintenance		12 825.24	12 825.24						12 825.24
		4 019 281.72	4 365 858.64	8 385 140.36	1 549 926.81	1 724 438.64	2 444 465.51	2 608 760.02	24 889.40	32 659.98

FSCA

(ii) The Financial Sector Conduct Authority (then the Financial Services Board) has incurred the following expenditure on the services and in the financial years mentioned:

SERVICE	FINANCIAL YEAR
	(aaa) 2017-18	(bbb) 2018-19
(aa) Cleaning Services	R1 494 718.71	R2 503 412.71
(bb) Security Services	R982 313.25	R1 193 662.23
(cc) Gardening Services	N/A	N/A

(b) amount was paid to each service provider to provide each specified service

SERVICE PROVIDER	SERVICE PROVIDED	FINANCIAL YEAR
		(aaa) 2017-18	(bbb) 2018-19
Masana Hygiene Services (Pty) Ltd (Reg. No. 2014/110265/07)	(aa) Cleaning Services	R1 494 718.71	R2 503 412.71
Afrisix (Pty) Ltd (Reg. No. 1998/025088/07)	(bb) Security Services	R982 313.25	N/A
Raite Security and Consulting CC (Reg. No. 2007/043172/23)	(bb) Security Services	N/A	R1 193 662.23

(c) total amount was paid to each of the service providers

TOTAL AMOUNT PAID FOR 2017/18 AND 2018/19 FINANCIAL YEARS
Masana Hygiene Services (Pty) Ltd (Reg. No. 2014/110265/07)	R3 998 131.42
Afrisix (Pty) Ltd (Reg. No. 1998/025088/07)	R982 313.25
Raite Security and Consulting CC (Reg. No. 2007/043172/23)	R1 193 662.23

GEPF

2017 - 2018 financial year

Cleaning

Bower Pty (Ltd) R223 978.50

Security

Broll R 33 665.11

Gardening services

R0

2018 - 2019 financial year

Cleaning

Bower Pty (Ltd) R239 657.79

Security

Broll R 36 358.32

Gardening service

R0

GPAA

IRBA

(a) (ii) (aa) total amount cleaning

(aaa) 2017-18 80 383

(bbb) 2018-19 240 241

(a) (ii) (bb) total amount security

(aaa) 2017-18 13 070

(bbb) 2018-19 9 743

(a) (ii) (cc) total amount gardening services

(aaa) 2017-18 Nil

(bbb) 2018-19 Nil

(b) amount was paid to each service provider to provide each specified service

(ii) (aa) total amount cleaning

(aaa) 2017-18 We Clean It All 80 383

(bbb) 2018-19 We Clean It All 240 241

(ii) (bb) total amount security

(aaa) 2017-18 Fidelity ADT 13 070

(bbb) 2018-19 Fidelity ADT 9 743

(ii) (cc) total amount gardening services

(aaa) 2017-18 Nil

(bbb) 2018-19 Nil

(c) total amount was paid to each of the service providers

(a) 2017-18 We Clean It All 80 383

(b) 2018-19 We Clean It All 240 241

(c) 2017-18 Fidelity ADT 13 070

(d) 2018-19 Fidelity ADT 9 743

LAND BANK

Land Bank has spent the following on the commodities requested:

(aaa) 2017-2018 Financial Year

(aa) Cleaning & Hygiene Services

Services Rendered Land Bank Head Office, 9 Provincial Offices and 15 Satellite Branches

(b) Monabo Hygiene Services

R2 373 113.96 – Total amount paid 2017/2018 Financial year

(c) R2 373 113.96 - Total paid for cleaning and hygiene services for the 2017/18 Financial Year

(bb) Security Services

(b) Fidelity Security Services – R1 692 415.59

Services rendered to Land Bank Head Office, 9 Provincial Offices, 15 Satellite Branches and 6 Properties in Possession

(b) Remez Security - R7 951.50

(b) ADT – R15 591.91

(b) Link Up – R6 036.00

(b) Kloof Alarms – R4 909.00

(b) PMB Security – R19 263.60

(b) Wulfe Security – R5 675.00

(b) Bethal Security – R26 077.67

(b) CSS Security – R4 999.79

(b) Blue Connection t/a Golden Eye – R3 585.80

(b) Salute Security – R4 920.00

(b) BAI Security – R2 508.00

(b) ARS Security – R11 168.00

(b) Ravens Security – R3 895.05

(b) Craddock Security – R2 585.00

(c) R1 811 681.91 - Total paid for security services for the 2017/18 Financial Year

(cc) Gardening Services

(b) Kgatlha Garden Service – R70 104.28

(c) R70 104.28 – Total paid for gardening services for the 2017/18 Financial Year

(bbb) 2018-2019 Financial Year

(aa) Cleaning & Hygiene Services

Services Rendered Land Bank Head Office, 9 Provincial Offices and 15 Satellite Branches

(b) Monabo Hygiene Services

R2 571 172.54 – Total amount paid 2018/2019 Financial year

(c) R2 571 172.54 - Total paid for cleaning and hygiene services for the 2018/19 Financial Year

(bb) Security Services

(b) Fidelity Security Services – R3 158 695.31

Services rendered to Land Bank Head Office, 9 Provincial Offices, 15 Satellite Branches and 6 Properties in Possession

(b) Remez Security – R3 593.75

(b) ADT – R19 479.03

(b) Link Up – R6 380.82

(b) Kloof Alarms – R7 234.99

(b) PMB Security – R5 940.24

(b) Wulfe Security – R6 296.83

(b) Bethal Security – R5 690.00

(b) CSS Security – R4 728.50

(b) Blue Connection t/a Golden Eye – R4 497.45

(b) Salute Security – R4 812.20

(b) BAI Security – R2 692.00

(b) ARS Security – R12 244.00

(b) Ravens Security – R3 997.50

(b) Craddock Security – R9 843.23

(c) R3 256 125.85 - Total paid for security services for the 2017/18 Financial Year

(cc) Gardening Services

(b) Kgatlha Garden Service – R64 458.77

(c) R64 458.77 – Total paid for gardening services for the 2017/18 Financial Year

PFA

The Office of the Pension Funds Adjudicator confirms that the total amount spent for cleaning services was R247 008.34 for 2018/19 and R207 090.49 for 2017/18 financial year. We had three service providers over this period, namely:

• Bidvest Prestige Group – R0 (2018/19) and R106 903.20 (2017/18)
• Monabo Hygiene Services – R247 008.34 (2018/19) and R79 645.82 (2017/18)
• Benedition (Pty) Ltd – R0 (2018/19) and R20 541.47 (2017/18)

The total amount spent for gardening services was R44 477.03 for 2018/19 and R44 433.36 for 2017/18 financial year from ExecuFlora.

PIC

(a)(ii)(aa) The PIC did not spend money on cleaning services as it is provided by the landlord of the building occupied by the PIC.

(a)(ii)(bb) Details regarding security are as follows:

(a)(ii)(cc) The PIC did not spend money on gardening services as it is provided by the landlord of the building occupied by the PIC.

SARS

(a)(ii) SARS has spent the following total amounts on the indicated services:

(aa) Cleaning

(aaa) 2017-18 : R 57 149 143.13

(bbb) 2018-19: R 56 946 298.87

(bb) Security:

(aaa) 2017-18 : R145 006 450.14

(bbb) 2018-19: R141 190 731.16

 

(cc) Gardening Services:

(aaa) 2017/18: R978 899.74

(bbb) 2018-19: R1 216 841.22

(b)(c) The amounts paid to each service provider to provide each specified service and

total amount paid to each service provider in the respective financial years were:

 

2017/18 Financial Year

Cleaning

Supplier Name	Total Amount Paid
Ikhayelihle Cleaning Services	R 6 728 865.90
Masana Hygiene Services	R 4 194 777.57
Servest Cleaning	R 11 616 558.24
Samagaba Cleaning Services pty	R 7 277 573.42
Staza Cleaning Services	R 5 302 914.67
CSG Food Solutions	R 4 669 789.78
Bidvest Prestige	R 4 792 727.28
Kusile Hygiene and Industrial	R 5 386 559.94
Sabuh Trading cc	R 3 104 793.80
Risk Release pty ltd	R 4 074 582.53

Security

Supplier Name	Total Amount Paid
Royal Security Services	R 21 742 018.94
Fidelity Security Services	R 61 141 560.98
Bidvest Protea	R 62 122 870.22

Gardening Services

Supplier Name	Total Amount Paid
4 Seasons Landscaping pty ltd	R 106 819.40
Amaloba Projects	R 265 571.30
Garden Boy Concepts pty ltd	R 130 500.00
Nozihle Cleaning Services	R 64 116.24
Pointing Out Trading (pty) ltd	R 72 000.00
Rothe Plantscapers	R 29 092.80
Shumani Development cc	R 234 000.00
Shumani Development cc	R 76 800.00

2018/19 Financial Year

Security

Supplier Name	Total Amount Paid
Royal Security Services	R 5 910 149.56
Fidelity Security Services	R 94 155 278.20
Bidvest Protea	R 15 408 987.39
Thorburn Security Solutions	R 25 716 316.01

Cleaning

Supplier Name	Total Amount Paid
Ikhayelihle Cleaning Services	R 7 666 045.70
Masana Hygiene Services	R 4 506 730.23
Servest Cleaning	R 9 720 826.30
Samagaba Cleaning Services pty	R 7 393 172.39
Staza Cleaning Services	R 5 528 611.84
CSG Food Solutions	R 4 715 269.24
Bidvest Prestige	R 4 507 725.22
Kusile Hygiene and Industrial	R 5 188 611.07
Sabuh Trading cc	R 3 400 783.11
Risk Release pty ltd	R 4 318 523.77

 

Gardening Services

Supplier Name	Total Amount Paid
4 Seasons Landscaping pty ltd	R 128 183.28
Amaloba Projects	R 144 007.60
Botle Bja Jehova Trading Enterprise	R 69 500.00
Cities Landscaping and Projects	R 156 042.20
Garden Boy Concepts pty ltd	R 130 200.00
Mukelo Projects pty ltd	R 39 420.00
Noels Lawnmower Centre	R 2 976.00
Nono Investment pty ltd	R 115 575.00
Nozihle Cleaning Services	R 70 162.14
Seenathy Trading	R 40 000.00
Shumani Development cc	R 234 000.00
Shumani Development cc	R 76 800.00
Ubuntu Installations pty ltd	R 9 975.00

SASRIA

(aa) Cleaning services

Sasria SOC Ltd (“Sasria”) does not outsource cleaning services. We permanently employ cleaning personnel.

(bb) Security services

Sasria’s security costs for the two years ending 31 March 2018 and 2019 respectively are as follows:

Financial year ending 31 March 2018

Service Provider	Service Rendered	Rand (Excl. VAT)
Growthpoint Properties Ltd	Security	11 795.00
Fidelity Security Services (Pty) Ltd	Security	105 926.56
ARS Advanced Risk Solutions	Security	124 040.00

Financial year ending 31 March 2019

Service Provider	Service Rendered	Rand (Excl. VAT)
Growthpoint Properties Ltd	Security	12 098.90
ARS Advanced Risk Solutions	Security	234 668.00

(cc) Garden services

Sasria does not incur costs on gardening services, as they are provided by the landlord.

TAX OMBUD

The cleaning and security expenses relating to Office of the Tax Ombud (OTO) are paid centrally by South African Revenue Services (SARS). SARS contracted different service providers in different regions, therefore these expenses of the OTO are included in SARS’s costs.

Reply:

NATIONAL TREASURY

No

(a) - (f) N/A

ASB

The Accounting Standards Board has not entered into any transactions with of these certain companies or any of their affiliated companies

CBDA

The Co-operative Banks Development Agency (CBDA) did not utelise the services of these certain companies.

DBSA

NO- none appear on the SAP System

(a)(b)(c)(d)(e)(f) N/A

FAIS OMBUD

No contracts were entered into with any of the entities listed in the question.

FIC

The FIC did not contract any services from of these certain companies.

(a) Not applicable

(b) Not applicable

(c) Not applicable

(d) Not applicable

(e) Not applicable

(f) Not applicable

-----------------------------------------------------------------------------------------------------------------

FSCA

The Financial Sector Conduct Authority (and the former Financial Services Board) has never contracted of these certain companies.

GEPF

Government Employees Pension Fund did not contract with the any of of these certain companies.

GPAA

The GPAA have none of the of these certain companies listed on our databases.

IRBA

The IRBA hereby declares that we have not contracted any of of these certain companies.

LAND BANK

Land Bank has never contracted the services of Forensic Data Analysts, Muvoni Technology Group, Muvoni Investment Holdings or Ideco.

Land Bank has contracted the services of companies affiliated to Muvoni Technology group that are part of the same holding company which is under the umbrella of the EOH Group of companies.

These services are as follows:

1. Bankserv

(a) Licensing for documentation management system

(b) User based license fee

(c) R5 303 326.92 (Excluding VAT) – Last payment made on 30 June 2019

(d) Renewable yearly

(e) Executive Manager: Legal Services & Executive Manager: Corporate Banking

(d) Yes

2. EOH Recruitment Solutions

(a) Recruitment Services

(b) Placement fee based on remuneration package.

(c) R151 200.00 (Excluding VAT) – Last payment made on 9 December 2015

(d) 3 years

(e) Executive Manager: HR & General Manager: HR

(f) Yes

3. Managed Integrity Services

(a) Background screening

(b) Service based fee depending on checks required.

(c) R366 237.27 (Excluding VAT) – Last payment made on 25 July 2019

(d) 3 years

(e) Executive Manager: HR & CFO

(f) Yes

4. Xpert Decision Systems

(a) Due Diligence Searches

(b) Service based fee depending on checks required.

(c) R140.00 (Excluding VAT) – Last payment made on 30 September 2018

(d) 3 years

(e) Head of Internal Audit & CFO

(f) Yes

5. EOH Abantu

(a) Recruitment Service

(b) Placement fee based on remuneration package.

(c) No payments made

(d) 3 years

(e) Executive Manager: HR & General Manager: HR

(f) Yes

Note: The Bank is in the process of determining whether to continue business with the EOH group of companies.

PFA

The Office of the Pension Funds Adjudicator did not contract t of these certain companies.

PIC

The PIC did not contract any of these certain companies. The rest of the question falls away.

SARS

The South African Revenue Service contracted service from one of the certain companies mentioned.

1. The service rendered relates to biometric services and biometric equipment for vetting purposes.

The total monetary value, amount paid, and duration of each contract are as follow:

Contract Number	Approved amount	PO Spend	Duration of the contract
4500116455	R 226 064.20	R 4 560.00	once-off
4500141177	R 180 000.00	R 178 940.10	once-off
4500147238	R 62 221.20	R 61 081.20	once-off
4500148827	R 11 400.00	R 11 400.00	once-off
4600001513	R 500 000.00	R 61 081.20	2 years
4600001513		R 437 574.25
4600002084	R 502 345.56	R 315 854.10	1 year
4400000285		R 19 710.60
4400000285		R 114 846.61
4400003006	R 498 807.00	R 484 739.15	3 years
4400003548	R 497 070.36	R 4 564.35	3 years
	R 2 477 908.32	R 1 694 351.56

1. These contracts were approved by the assigned delegated person in line with the Delegation of Authority at the time. Approvals per contract was done as follow:

Contract Number	Approval per DOA
4500116455	Executive Procurement
4500141177	Acting Executive Procurement
4500147238	Executive Procurement
4500148827	Executive Procurement
4600001513	Executive Procurement
4600001513
4600002084	Executive Procurement
4400000285
4400000285
4400003006	Acting Group Executive: Procurement
4400003548	National Bid Adjudication Committee Chairperson Tier 1

1. Yes, each contract was concluded in line with the Public Finance Management Act, Act 1 of 1999, and relevant departmental regulations.

SASRIA

Sasria SOC Ltd has, for the financial years ending 31 March 2018 and 2019 respectively, not contracted of these certain companies.

Whilst we took care and exercised the necessary diligence in preparing the requested information, it is pertinent that we highlight the fact that we completely relied on the stated service providers’ company names as stated above. Therefore, in cases where the service provider’s registered name differs with the trading name, there exists a slight possibility that the service provider may have not been picked up, depending on what may have been recorded on our database at transaction stage.

TAX OMBUD

the Office of the Tax Ombud (OTO) has not of these certain companies.

Reply:

The payment of import or excise duties is based on national policy

determined by the Department of Trade and Industry (the dti), as well as on

international trade instruments to which South Africa is a signatory. Robust

methodologies are followed to ensure that all commodities are classified

correctly, and that the South African Revenue Service collects the correct

amount of revenue due to the state. Accordingly, the payment of import or

excise duties is based on a tariff rate applicable to a specific commodity as

determined by the dti.

(a)(b)(i)(ii) In the case of the import and/or production of electric vehicles, Ordinary

Customs Duties on importation and Ad Valorem Excise duties, payment of

duties based on the customs value of the imported goods, levied by

government are applicable. There are no other additional taxes payable on

electric vehicles. All Vehicles are classified in Chapter 87 of Schedule 1 of

the Customs and Excise Act 91 of 1964. The rates of duty on electric

vehicles range

between 0% and 25%.

It is worth noting that there is no differentiation between the treatment of the conventional fuel combustion and electric vehicles with regards to applicable Customs procedures, the rates and tax-types levied during importation or manufacturing locally, for as long as the vehicles belong to the same categories (that is, whether it’s a bus, truck, ordinary passenger vehicle, etc.).

However, because SARS administer Ad Valorem Excise duties, which considers both weight and value, the mass of the vehicle will invariably impact on the rate of the duty applicable. Thus, smaller cars may attract smaller rates of duty, although the value may be a differentiating factor if such a smaller vehicle is much more expensive. For an example, an electric passenger vehicle and fuel combustion engine passenger vehicle will attract the same rate of duty or excise if the two are of the same mass and value.

Reply:

The elicit economy is a continuously changing landscape and a function of the overall levels of societal and tax compliance.

SARS is in the process of conducting scientific and evidence-based research to quantify the size of the illicit economy for South Africa and as such there is no official position yet on the size of the illicit economy. The study also seeks to identify, quantify illicit/illegal activities taking place in both the formal and informal economy. The study will further involve identifying, locating, understanding, registering, managing and monitoring illicit businesses in their different forms and sizes in the illicit economy.

The illicit economy ranges from the underground economy, which operates outside of the rules and regulations of the country, to organised crime. It involves money, goods or value gained from illegal and generally unethical activity. The activities and/or transactions that occur in the underground economy are illegal for various reasons. Transactions in the underground economy are illegal either because the good or service being traded is illegal or because an otherwise licit transaction does not comply with government reporting requirements. People who work in the underground economy do not declare their incomes. In other words, the tax authorities have no official records of their activities or transactions. These activities generate a wide range of economic, social, environmental or political harms and contribute to the tax gap.

(a) The outcome of the comprehensive research will assist in determining the size of each illegal trading item. In the absence of SARS own research findings, It is difficult

to put a value to the illicit economy. The research studies, which commenced in November 2018, are expected to be completed by March 2020.

(b) In line with the overall SARS strategy of discouraging non-compliance (and incentivizing good behavior) through education and/or enforcement action as executed by its Enforcement divisions, and in recognition of the need for alternative enforcement responses to non-compliance within the illicit economy, SARS established an interim capability to conduct investigations into the illicit economy. The capability executes integrated enforcement investigations and comprises of multi-disciplinary and collaborative investigations and enforcement debt recovery actions, supported by legal experts and data analytics. The tax and customs legislation administered by the Commissioner for SARS (for example, the Tax Administration Act, 2011) governs the conduct of all units within SARS.

Reply:

[(a)(i), (aa), (bb), (cc)(ii)(iii) and (iv)]: 2015/16 Provincial Grants

In 2015/16 Provinces were allocated R85.3 billion in various conditional grants, of which, R276 million was not transferred to provinces. Of the total of R86.6 available to provinces (including roll overs) provinces spent R85.3 billion resulting in an underspending of R1.3 billion.

Roll overs amounting to R1.04 billion were approved and provinces surrendered R508 million, which was made up of unapproved roll-overs and unspent amounts that were not requested, back to the National Revenue Fund.

Under spending occurred mainly on infrastructure related components of the grants including the building of libraries, the Education Infrastructure Grant, the Health Revitalisation Grant and the Human Settlements Development Grant. The reasons for under expenditure includes, capacity constraints, poor planning and execution, poor workmanship resulting in cost increases and weak overall project management.

The detailed information on the 2015/16 allocations, roll-overs and unspent amounts per grant are in the following annexures:

Annexure AP - (a) (i) expenditure and underspending

Annexure AP – (aa) transfers

Annexure BP – (bb) surrendered to NRF

Annexure BP – (cc) roll-overs

Annexure AP - (a) (iii) actual expenditure per each grant

Annexure AP - (a) (iv) allocations

[(a)(i), (aa), (bb), (cc)(ii)(iii) and (iv)] 2016/17 Provincial Grants:

In 2016/17 Provinces were allocated R89 billion in various conditional grants, of which, R7 million was not transferred to provinces. Of the total of R90.7 available to provinces (including roll overs) provinces spent R88.5 billion resulting in an underspending of R2.2 billion.

Roll overs amounting to R1.4 billion was approved and provinces surrendered R417 million, which was made up of unapproved roll-overs and unspent amounts that were not requested, back to the National Revenue Fund.

Under spending occurred mainly on infrastructure related components of the grants including the building of libraries, the Education Infrastructure Grant, the Health Revitalisation Grant and the Human Settlements Development Grant. The School Nutrition grant underspent as well due to invoices being submitted late for payments. In terms of the infrastructure related grants, the reasons for under expenditure include, capacity constraints, poor planning and execution poor workmanship resulting in cost increases and weak overall project management.

The detailed information 2016/17 on allocations, roll-overs and unspent amounts per grant are in the following annexures:

Annexure AP - (a) (i) expenditure and underspending

Annexure AP – (aa) transfers

Annexure BP – (bb) surrendered to NRF

Annexure BP – (cc) roll-overs

Annexure AP - (a) (iii) actual expenditure per each grant

Annexure AP - (a) (iv) allocations

[(a)(i), (aa), (bb), (cc)(ii)(iii) and (iv)] 2017/18 Provincial Grants

In 2017/18 Provinces were allocated R96.7 billion in various conditional grants, of which, R38 million was not transferred to provinces. Of the total of R98.5 available to provinces (including roll overs) provinces spent R96.3 billion resulting in an underspending of R2.2 billion.

Roll overs amounting to R1.4 billion was approved and provinces surrendered R755 million, which was made up of unapproved roll-overs and unspent amounts that were not requested, back to the National Revenue Fund.

Under spending occurred mainly on infrastructure related components of the grants including the, Education Infrastructure Grant, the Health Revitalisation Grant and the Provincial Roads Maintenance Grant. The School Nutrition grant underspent as well due to invoices being submitted late for payments. In terms of the infrastructure related grants, the reasons for under expenditure include, capacity constraints, poor planning and execution poor workmanship resulting in cost increases and weak overall project management.

The detailed information 2017/18 on allocations, roll-overs and unspent amounts per grant are in the following annexures:

Annexure AP - (a) (i) expenditure and underspending

Annexure AP – (aa) transfers

Annexure BP – (bb) surrendered to NRF

Annexure BP – (cc) roll-overs

Annexure AP - (a) (iii) actual expenditure per each grant

Annexure AP - (a) (iv) allocations

[(a)(i), (aa), (bb), (cc)(ii)(iii) and (iv)] 2018/19 Provincial Grants

In 2018/19 Provinces were allocated R100.3 billion in various conditional grants, of which, R9 million was not transferred to provinces. Of the total of R103 available to provinces (including roll overs) provinces spent R99.4 billion resulting in an underspending of R3.5 billion. It must be noted however, that these numbers are pre-audited and is subject to change once the audit has been finalized.

Roll overs amounting to R2 billion was approved and provinces surrendered R1.4 billion, which was made up of unapproved roll-overs and unspent amounts that were not requested, back to the National Revenue Fund. It must be noted however, that these numbers are pre-audited and is subject to change once the audit has been finalized.

Under spending occurred mainly on infrastructure related components of the grants including the, Education Infrastructure Grant, the Health Revitalisation Grant and the Human Settlements Development Grant. The School Nutrition grant underspent as well due to invoices being submitted late for payments. There also SCM and planning delays that resulted in underspending on the Comprehensive Agricultural Support Programme.

In terms of the infrastructure related grants, the reasons for under expenditure include, capacity constraints, poor planning and execution poor workmanship resulting in cost increases and weak overall project management.

The detailed information 2018/19 on allocations, roll-overs and unspent amounts per grant are in the following annexures:

Annexure AP - (a) (i) expenditure and underspending

Annexure AP – (aa) transfers

Annexure BP – (bb) surrendered to NRF

Annexure BP – (cc) roll-overs

Annexure AP - (a) (iii) actual expenditure per each grant

Annexure AP - (a) (iv) allocations

Kindly note that National Treasury has published this information (Allocation, Transfers, Expenditure and underspending) on the website.

[(b), (i), (aa), (bb), (cc), (ii), (iii) and (iv)] 2014/15 Local Government Grants

In 2014/15 municipalities were allocated R25.7 billion in various conditional grants and R25.5 billion was transferred to municipalities. Municipalities underspent on the transferred amount and as a result a total amount of R3 billion in different grants was requested by municipalities to be rolled over into the next financial year, however only R1.2 billion was approved to be rolled over into the 2015/16 financial year and R1.8 billion was unapproved.

A total of R3.2 billion in unspent conditional grants was returned to the National Revenue Fund, this was made up of unapproved roll-overs and unspent amounts that were never requested to be rolled over into the next financial year, but were unspent at the end of the financial year.

The reasons for under expenditure vary, as seen from the roll-over requests submissions by municipalities, ranging from capacity constraints, poor planning, slow or late procurement, leadership issues, among others. There is of late disruptions to procurement and project implementation processes by local business forums demanding that 30 per cent of each project cost be procured from local entrepreneurs or SMME’s, which is not always possible due to most not meeting the qualifying criteria required to deliver on the projects needed to be implemented.

The detailed information 2014/15 on allocations, roll-overs and unspent amounts per grant are in the following annexures:

Annexure C - (b)(i) expenditure and underspending

Annexure A – (aa) transfers

Annexure C – (bb) offset/surrendered to NRF

Annexure B – (cc) roll-overs

Annexure C - (b)(iii) actual expenditure per each grant

Annexure A - (b) (iv) allocations

[(b), (i), (aa), (bb), (cc), (ii), (iii) and (iv)] 2015/16 Local Government Grants

In 2015/16 municipalities were allocated R28 billion in various conditional grants and R27.7 billion was transferred to municipalities. Municipalities underspent on the transferred amount and as a result a total amount of R2.5 billion in different grants was requested by municipalities to be rolled over into the next financial year, however only R991.2 million was approved to be rolled over into the 2015/16 financial year, while R1.5 billion was unapproved.

A total of R1.5 billion in unspent conditional grants was returned to the National Revenue Fund, a reduced amount than in 2014/15, and made up of unapproved roll-overs and unspent amounts that were never requested to be rolled over into the next financial year, but were unspent at the end of the financial year.

The reasons for under expenditure vary, as seen from the roll-over requests submissions by municipalities, ranging from capacity constraints, poor planning, slow or late procurement, leadership issues, among others. There is of late disruptions to procurement and project implementation processes by local business forums demanding that 30 per cent of each project cost be procured from local entrepreneurs or SMME’s, which is not always possible due to most not meeting the qualifying criteria required to deliver on the projects needed to be implemented.

The detailed information on 2015/16 allocations, roll-overs and unspent amounts per grant are in the following annexures:

Annexure C - (b)(i) expenditure and underspending

Annexure A – (aa) transfers

Annexure C – (bb) offset/surrendered to NRF

Annexure B – (cc) roll-overs

Annexure C - (b)(iii) actual expenditure per each grant

Annexure A - (b) (iv) allocations

[(b), (i), (aa), (bb), (cc), (ii), (iii) and (iv)] 2016/17 Local Government Grants

In 2016/17 municipalities were allocated R30 billion in various conditional grants and R29.7 billion was transferred to municipalities. Municipalities underspent on the transferred amount and as a result a total amount of R2.1 billion in different grants was requested by municipalities to be rolled over into the next financial year, albeit a lesser amount than in the previous financial year. Of the total requested roll-over of R2.1 billion, only R923.5 million was approved to be rolled over into the 2015/16 financial year, while R1.1 billion was unapproved.

A total of R1.4 billion in unspent conditional grants was returned to the National Revenue Fund (R1.5 billion in 2015/16), this was made up of unapproved roll-overs and unspent amounts that were never requested to be rolled over into the next financial year, but were unspent at the end of the financial year.

The reasons for under expenditure vary, as seen from the roll-over requests submissions by municipalities, ranging from capacity constraints, poor planning, slow or late procurement, leadership issues, among others. There is of late disruptions to procurement and project implementation processes by local business forums demanding that 30 per cent of each project cost be procured from local entrepreneurs or SMME’s, which is not always possible due to most not meeting the qualifying criteria required to deliver on the projects needed to be implemented.

The detailed information on allocations, roll-overs and unspent amounts per grant are in the following annexures:

Annexure C - (b)(i) expenditure and underspending

Annexure A – (aa) transfers

Annexure C – (bb) offset/surrendered to NRF

Annexure B – (cc) roll-overs

Refer to last paragraph above - (b)(ii) why not spent per grant

Annexure C - (b)(iii) actual expenditure per each grant

Annexure A - (b) (iv) allocations

[(b), (i), (aa), (bb), (cc), (ii), (iii) and (iv)] 2017/18 Local Government Grants

In 2017/18 municipalities were allocated R32.4 billion in various conditional grants and R32 billion was transferred to municipalities. Municipalities underspent on the transferred amount and as a result a total amount of R3.2 billion in different grants was requested by municipalities to be rolled over into the next financial year, over R200 million and R700 million more than in 2014/15 and 2016/17 respectively. From the requested roll-over of R3.2 billion, a mere R904 million was approved to be rolled over into the 2015/16 financial year, however R2.3 billion was unapproved to be carried over into 2018/19.

A total amount of R3.6 billion in unspent conditional grants was returned to the National Revenue Fund, this was made up of unapproved roll-overs and unspent amounts that were never requested to be rolled over into the next financial year, but were unspent at the end of the financial year. The reasons for under expenditure vary, as seen from the roll-over requests submissions by municipalities, ranging from capacity constraints, poor planning, slow or late procurement, leadership issues, among others. There is of late disruptions to procurement and project implementation processes by local business forums demanding that 30 per cent of each project cost be procured from local entrepreneurs or SMME’s, which is not always possible due to most not meeting the qualifying criteria required to deliver on the projects needed to be implemented.

The detailed information on allocations, roll-overs and unspent amounts per grant are in the following annexures:

Annexure C - (b)(i) expenditure and underspending

Annexure A – (aa) transfers

Annexure C – (bb) offset/surrendered to NRF

Annexure B – (cc) roll-overs

Annexure C - (b)(iii) actual expenditure per each grant

Annexure A - (b) (iv) allocations

Kindly note that National Treasury has published the information (Allocation, Transfers, Expenditure and underspending) on the website

Reply:

(a)(i) Over the past 10 financial years, rebate item 406.01 was used 311 times. The table below depicts data in respect of direct imports and ex-warehouse declarations cleared under rebate item 406.01:

Financial Year	Occurrences
2009/04 - 2010/03	1
2010/04 - 2011/03	0
2011/04 - 2012/03	15
2012/04 - 2013/03	282
2013/04 - 2014/03	4
2014/04 - 2015/03	0
2015/04 - 2016/03	5
2016/04 - 2017/03	0
2017/04 - 2018/03	3
2018/04 - 2019/03	1
Total	311

(aa)

(bb) Since 1 April 2019, rebate item 406.01 has not been used. The table below contains data in respect of direct imports and ex-warehouse declarations declared under rebate item 406.01:

Financial Year	Occurrences
2019/04 - 2019/09/18	0

1. Over the past 10 financial years, drawback item 540.01 was used four times. The table below contains data in respect of draw-backs processed under item of 540.01:

Financial Year	Occurrences
2009/04 - 2010/03	0
2010/04 - 2011/03	1
2011/04 - 2012/03	1
2012/04 - 2013/03	0
2013/04 - 2014/03	0
2014/04 - 2015/03	1
2015/04 - 2016/03	0
2016/04 - 2017/03	0
2017/04 - 2018/03	1
2018/04 - 2019/03	0
Total	4

(aa)

(bb) Since 1 April 2019, drawback item 540.01 has not been used. The table below contains data in respect of draw-backs processed under item of 540.01:

Financial Year	Occurrences
2019/04 – 2019/09/18	0

(b) The table below contains data in respect of total customs duties rebated under 406.01 and refunded under 540.01

Rebate/Refund Item	Sch 1P1	Sch 1P2B	Total
406.01 (rebate)	R558 624.90	R296 169.00	R854 793.90
540.01 (refund)	R0	R0	R338 273.30

(c) The Rebate item 406.01 relates to the rebate of Customs duties on goods imported for the personal or official use by the State President and his/her family and duty drawback item 540.01 provides for duty drawback (refund) of petrol and distillate fuels. Item 540.01 permits drawbacks for diplomatic and foreign representatives, as well as the State President.

Due to the legislative specifications regarding the restrictions on sharing of client specific information, SARS is not at liberty to disclose the taxpayer specific information.

Reply:

In 2015, Government approved a government guarantee agreement with China Development Bank for an amount of US$5 billion for Eskom. This guarantee is part of the R350 billion government guarantees granted to Eskom to assist the entity in raising funding for its build programme. The condition for the guarantees is that they must be utilised for funding of the Capital expenditure programme. Therefore, this guarantee is to assist Eskom in the funding of the Medupi and Kusile power stations.

Reply:

1. The National Treasury did not host any event and / or function for their 2019 Budget Vote debate.

2. No.

Reply:

	(aa) 2016	(aa) 2017	(aa) 2018	(bb)
(a)(i)	8	5	3	2
(ii)	0	0	0	0
(iii)	0	0	0	0
(b)(i)	1	0	0	0
(b)(Ii)	2	0	0	0

Reply:

1. (a), (b), (c) (i) and (ii),

SANRAL does not report their guarantee usage in terms of drawdowns on a project basis and as such, the only amount available is the total guaranteed debt of SANRAL, which represents exposure for government. As at 31 March 2019, this amount was R39.5 billion, which includes accrued interest and revaluations on inflation linked debt.

2. Yes, new bonds have been issued in the 2019/20 financial year. All bonds that have been issued in the 2019/20 financial year were issued under the R31.9 billion guaranteed Domestic Medium-Term Note. These were issued through private placements

The first issuance was a floating rate note (HWF11 bond) and was issued on 15 July 2019 amounting to R2 billion (nominal). The bond has a maturity date of 15 July 2022 and has interest payments linked to the 3-month JIBAR that is paid quarterly and a margin of 147 basis points over the JIBAR rate. This was a new note.

The second bond issuance was the HWAY35 bond on 15 July 2019 amounting R200 million of which the HWAY35 was an existing bond introduced initially in 2010. The bond has a maturity date of 31 July 2035. The bond has a fixed coupon rate of 9.25% per annum payable semi-annually in arrears.

The third bond issuance was on 29 July 2019 and was a floating rate note/bond (HWF12 bond) that has a maturity date of 29 July 2022. Amounts raised through this issuance was R1.650 billion. The interest payments are linked to the 3-month JIBAR and are paid quarterly. The interest is paid at JIBAR plus a margin of 147 basis points. This was a new note.

The fourth bond issuance was also on 29 July 2019 and was an issuance amount of R150 million related on the HWAY35 fixed rate bond (the details of the bond are as above).

3. (a),

At this point the full impact of the low revenue collection is unknown and it will become clear once the audited financial results are made public. However, the loss in income due to GFIP in 2017/18 had to be covered through the fiscus by an amount of R463 million. In terms of the impact on SANRAL’s credit rating, the entity’s rating agency has a better understanding of what the impact of lower toll collections will be and will consider other variables.

(b),

It is difficult to attribute the cost of funding or SANRAL’s interest rates to one variable or factor. However, what National Treasury has established is that SANRAL, similar to other state-owned entities have been borrowing at higher interest rates relative to their peers. For instance, SANRAL’s recent issuances have been at higher interest rates compared to corporates with similar credit ratings. As an illustration, corporates with similar credit ratings to SANRAL (i.e. AAA credit rating by Moody’s) who have issued floating rate bonds with similar tenures (3 years) have been borrowing at 3 months JIBAR and spreads of between 100 basis points and 145 basis points with no Government guarantee. However, SANRAL on the back of a Sovereign guarantee or Government guarantee borrowed at 3 months JIBAR and a spread of 147 basis points. What is clear is that the cost of funding is high relative to corporates but it is unclear if this relates to the low toll collections.

4. (a) and (b)

Government officials together with SANRAL are engaging on the model for GFIP and tolling as a whole. Various options are being considered and will be communicated by the relevant officials. That includes the funding model.

Reply:

Municipality information

1. This must be referred to the Office of the Auditor-General for a response.
2. This must be referred to the Office of the Auditor-General for a response.
3. With regards to municipalities, the National Treasury in conjunction with the Department of Cooperative Governance (DCoG) developed the Municipal Public Accounts (MPAC) Guideline and Toolkit to assist MPACs to perform their oversight and other related responsibilities, which include reviewing and recommending to Council actions or otherwise relating to the expediting and conclusion of unauthorised, irregular, fruitless and wasteful expenditure (UIF&W) processes. This guideline and toolkit was supported by Municipal Finance Management Act (MFMA) Circular 92 which further supports the effective functioning and decision-making of councillors serving on MPACs.

The National and provincial treasuries provided training to councillors serving on the MPAC in consultation with DCoG and South African Local Government Association (SALGA). As at the end of March 2019, the MPAC Guideline and Toolkit have been rolled out and a total of 875 MPAC Councillors and 205 municipal officials have been trained countrywide. Further training was provided to Municipal Disciplinary Board members to enable consequence management processes to be expedited in line with Chapter 15 of the MFMA read together with the Municipal Regulations on Financial Misconduct Procedures and Criminal Proceedings. These are being monitored by national and provincial treasuries for actions and resolutions taken. It should be noted that progress in this area has been slow, as it depends on finalisation of the investigation process.

One of the biggest causes of irregular expenditure relates to non-compliance with Supply Chain Management (SCM) processes and procedures, particularly the awarding of awards to persons in the service of the state which is prohibited in terms of the Municipal Supply Chain Management Regulations. The National Treasury issued MFMA Circular 81, which introduced the Central Suppliers Database that requires all suppliers to be registered on the database. The database interfaces with South African Revenue Services, the Companies and Intellectual Property Commission and government’s payroll system and assists municipalities with some of the necessary verification. The system verifies supplier’s tax and BEE status, and enable public sector officials doing business with the state to be identified. Thus, if used correctly it will assist in reducing incidences where municipalities award contracts to persons in the service of the state, in non-compliance with the SCM Regulations.

Municipalities have also been incorrectly applying SCM Regulation 32, which enables municipalities to procure goods and services under a contract secured by another organ of state, which has also contributed to the irregular expenditure. In July 2019, the National Treasury issued MFMA Circular 96 which provides further elaboration to municipalities on the principles captured in Regulation 32 of the SCM Regulations when procuring goods or services from contracts secured by other organs of state. The correct application will assist in the number of incidences of non-compliance and further reduce the irregular expenditure.

During 2018/19 support was prioritised to the 10 municipalities with the highest UIF&W, making up over R24 billion. The National and provincial treasuries have engaged these municipalities to assist with the processes to address the UIF&W, to identify the root causes and to put measures in place to address the recurrence of the incidences that resulted in the UIF&W.

It should be emphasised that it is the responsibility of municipalities to hold officials and councillors to account for any compliance with the MFMA in keeping with the underlying principles in the legal framework. It is also the responsibility of the municipalities to put measures in place to avoid any non-compliance with the MFMA.

Further detailed actions taken should be addressed to the respective municipal executive and administration.

Departments and public entity information

The graphs below shows a comparative analysis of unqualified audits with no findings of all national and provincial PFMA compliant institutions over a period of five (5) financial years from 2013/2014 to 2017/2018. Information on unqualified audits with no findings for the previous five (5) years from 2013/2014 can be obtained from the Auditor-General for a response.

Decrease in a percentage of unqualified audits with no findings is attributable to areas of non-compliance findings mainly on, material misstatements, unauthorised, irregular, fruitless and wasteful expenditure, expenditure management, procurement management and consequence management.

 

(2)(a) This information can obtained from the Auditor-General for a response.

(b) The graphs below shows a comparative analysis related to amount of unuathorised, irregular and fruitless and wasteful and expenditure incurred by PFMA compliant institutions at national level from 2013/2014 to 2017/2018. Information related to unuathorised, irregular and fruitless and wasteful and expenditure incurred by PFMA compliant institutions at provincial level can be obtained from the Auditor-General for a response.

 

1. (i) & (ii) This information can obtained from the Auditor-General for a response.
2. (i) & (ii) This information can obtained from the Auditor-General for a response.

(3) Section 38(1)(h)(iii) and section 51(1)(e) of the PFMA require accounting officers for departments, trading entities and constitutional institutions and accounting authorities of public entities to take effective and appropriate disciplinary steps against any official who makes or permits fruitless and wasteful expenditure. In terms of section 81(1)(b) and section 83(1)(b) of the PFMA, accounting officers for departments or constitutional institutions and accounting authorities of public entities commit an act of financial misconduct if that accounting officer or accounting authority wilfully or negligently makes or permits a fruitless and wasteful expenditure. Therefore it is the responsibility of accounting officers or accounting authorities to address consequence management and ensure maintenance of proper governance systems in their respective institutions.

In May 2014 and 2015, National Treasury issued the first guidelines on Irregular, Fruitless and Wasteful and Unauthorised Expenditure which were aimed at providing accounting officers and accounting authorities with clarity on treatment of those expenditures.

New Frameworks dealing with irregular, fruitless and wasteful expenditure were further introduced by National Treasury 2019 as Treasury Instructions to give legal effect to the process that must be followed by accounting officers and accounting authorities. These frameworks are aimed at enhancing the understanding, interpretation an application of legislative provisions dealing with these expenditures. Thus far 64 PFMA compliant institutions have been trained on these frameworks. Accounting officers and accounting authorities of national institutions are also required to report to National Treasury and accounting officers and accounting authorities of provincial institutions are required to their respective provincial treasuries on any irregular, unauthorized and fruitless and wasteful expenditure incurred, regular assessments, and determination of losses, criminal conduct and investigations of persons responsible for incurring such expenditures. This report also requires information on the process followed by accounting officers and accounting authorities in dealing with the recovery of any losses incurred, referral of criminal cases and approval process of expenditure free losses or criminal conduct.

Reply:

1. Table 1 below provides for the total Rand value of invoices older than 30 days and not paid at the end of March 2019 by provincial government departments which amounts to R 6.5 billion. The total Rand value of invoices older than 30 days and not paid for the period April 2019 to June 2019 (quarter 1) amounts to R4.2 billion.

Table 1: Breakdown of Rand value of invoices older than 30 days and not paid by provincial government departments

No.	Provincial Government	Rand Value of invoices	Rand value of invoices
		Financial year 2018/2019	Quarter 1 2019/2020
1.	Gauteng Provincial Government	R 2,594,175,217	R 1,569,850,293
2.	Eastern Cape Provincial Government	R 2,106,056,624	R 1,801,248,512
3.	North West Provincial Government	R 425,920,679	R 334,279,273
4.	Northern Cape Provincial Government	R 383,727,433	R 3,017,092
5.	Free State Provincial Government	R 363,567,669	R 376,196,410
6.	Limpopo Provincial Government	R 253,168,817	R 22,928,479
7.	Mpumalanga Provincial Government	R 251,872,232	R 66,474,435
8.	KwaZulu-Natal Provincial Government	R 149,830,770	R 106,337,570
9.	Western Cape Provincial Government	R 240,497	R 495,083
	TOTAL	R 6,528,559,938	R 4,280,827,148

1. Table 2 below provides information related to the worst offender with regards to the Rand value of invoices older than 30 days and not paid with the department of Health recorded as the worst offender in 8 provincial government.

Table 2: Worst offenders with regards to Rand value of invoices older than 30 days and not paid by provincial departments.

No.	Provincial Government	Worst Performing Department	Rand Value of invoices	Rand Value of invoices
			Financial Year 2018/2019	Quarter 1 2019/2020
1.	Gauteng Provincial Government	Health	R 2,511,355,983	R 1,398,653,153
2.	Eastern Cape Provincial Government	Health	R 2,099,576,206	R 1,786,003,732
3.	North West Provincial Government	Health	R 372,225,614	R 310,045,484
4.	North Cape Provincial Government	Health	R 366,823,789	R 2,724,850
5.	Free State Provincial Government	Health	R 328,806,217	R 354,418,156
6.	Limpopo Provincial Government	Health	R 228,412,055	R 19,694,056
7.	Mpumalanga Provincial Government	Health	R 251,872,232	R 66,474,435
8.	KZN Provincial Government	Public Works	R 59,287,827	Not reported as worst offender
		Education	R 50,063,864	Not reported as worst offender
		Health	R 30,619,310	R 74,545,388
9.	Western Cape Provincial Government	Education	R 240,497	Not reported as worst offender
		Health	Not reported as worst offender	R 472,921

Reply:

a) The total number of unclaimed (i) Pension and (ii) Funeral benefit

Details	Rand Amount	Cases
Funeral Benefit	R1 197 422.62	138
Total unclaimed Benefit (July 2019)	R664 186 398.71	17 558

(iii) The GPAA do not deal with investment of funds.

Reply:

The questions relate to taxpayer information provided by a taxpayer and taxpayer information obtained by SARS in respect of a taxpayer. SARS is prohibited from disclosing such taxpayer information in terms of section 68 (1)(b) of the Tax Administration Act, Act 28 of 2011

SARS GOVERNANCE IN RESPECT OF OUR CASE SELECTION

The legislative provisions governing tax inquiries is contained in Chapter 5 of the Tax Administration Act, No. 28 of 2011 (“TAA”). A tax inquiry is a formal process with witnesses subpoenaed and evidence being led under oath or solemn declaration, but it remains an information gathering mechanism.

We think it would be helpful to share members of parliament what process we follow when a matter comes to our attention.

SARS has an independent case selection methodology to protect the governance of how matters are followed up to ensure that there is a verifiable trail that informs how cases are selected.

When a matter comes to SARS’ attention, it is reviewed and evaluated to ensure the validity or merit of the case. Once we have applied our minds and possible grounds are established the case is then further investigated and should additional information be required, there are a number of instruments at SARS disposal that can be utilised to collect relevant information such as:

• a request for relevant material;
• production of relevant material in person during an interview at a SARS office;
• inspection,
• audit or criminal investigation;
• tax inquiry before a presiding officer;
• and search and seizure.

Based on the facts of the case the most appropriate investigative approach will be selected within the legal framework of legislation administered by the Commissioner for SARS.

The legislative provisions governing tax inquiries is contained in Chapter 5 of the Tax Administration Act, No. 28 of 2011 (“TAA”). A tax inquiry is a formal process with witnesses subpoenaed and evidence being led under oath or solemn declaration, but it remains an information gathering mechanism.

Before an inquiry into the tax affairs of a person may be held, SARS must apply through an ex parte application to a judge of the High Court for an order designating a person to act as a presiding officer, the order, will also be specific to the ambit of the inquiry. According to section 56 of the TAA, the tax inquiry is private and confidential. The secrecy provisions of the TAA apply to all the persons present at questioning, including the persons being questioned.

Information disclosed during an inquiry constitutes taxpayer information and is subject to the confidentiality provisions of the TAA, which regulate the disclosure of taxpayer information. The information obtained during the inquiry will be used by SARS to conduct investigations into the taxpayer’s affairs, to establish, whether the taxpayers complied with their obligation in terms of the relevant tax acts administered by the Commissioner for SARS.

Due to the confidentiality provisions contained in the TAA, SARS, is accordingly not in a position to provide any specific information pertaining to the ambit of the inquiry outside of the specified provisions.

Reply:

a) The average time it takes to process claims are 33-days.

b) Ms Robin-Lee Fortune should enquire herself directly from the GEPF why there was a delay in the payment of the benefit.

Reply:

South Africa has enjoyed substantial Foreign Direct Investment (FDI) and seeks to grow FDI in order to improve economic growth. FDI ranges from small investments to billion Rand investments by multinational enterprises.

“Business ownership” structures and compositions are varying in nature. Businesses can be incorporated and established in the Republic for example as either a sole proprietorship, partnership; proprietary limited company and, public company.

The shareholder ownership composition as well can vary between 100% locally owned, 100% foreign-owned, a combination of both local and foreign ownership (i.e. Foreign-owned can include 100%, 50.1%, 25% or something in between). Furthermore, stock exchange listed companies can be owned by persons from over 240 countries worldwide.

Foreign-owned businesses can include companies, sole proprietorships, partnerships and so forth that have indicated to be non-South African in their records with SARS.

The top three countries that contribute to foreign-owned businesses in the Republic are the United Kingdom, United States and Germany.

1. Per the SARS records, the annual contribution by foreign-owned businesses that include but are not limited to companies, sole proprietorships and, partnerships that are trading in the Republic is approximately R2.4 trillion gross income declared per tax returns submitted for the tax year 2017.

(a)(b)(c)(d)(e)(f)

The SARS does not maintain a distinction of foreign-owned businesses based on country of nationality in our records. Our records only reflect the classification of foreign-owned businesses where the taxpayer completed the required indicator or specified the country of nationality.

2. (a) Of the 14 269 foreign-owned businesses on our records, 1 266 are registered and contribute to value-added tax (VAT).

(b) The VAT return filing rate is 52.09% with a correlating VAT payment compliance rate of 88.15% as per the SARS annual report for 2018/19. SARS is on an ongoing journey to improve compliance and close the tax gap through compliance interventions in both the formal and informal sectors.

3. The report in question Shifting Market Frontiers: Africa Rising indicates that South Africa has an estimated annual revenues of R7 billion from “spaza shops” that are operated in the Republic that can be owned by both South Africans and Foreign nationals.

There has been no record or evidence found that “the Republic allegedly loses R7 billion…”, it has been noted per aforementioned report that the “estimated annual revenues of R7bn, spaza shops are a significant retail channel in South Africa, especially in townships and informal settlements. This stems from the fact that their business structure is established to cater to the buying patterns, rising purchasing power and product preferences of consumers living there”. As such, spaza shops play a vital role in serving local communities as part of the informal economy.

This segment does contribute to indirect taxes (Value-add Tax) through their purchasing from suppliers and direct taxes (Income Tax) on their income earned. SARS endeavors to expand efforts through our outreach programme by way of clarification, awareness and education to improve compliance efforts with traders alike.

Reply:

(1) What (a) is the total number of technical advisors who are currently deployed by the National Treasury under Programme 8 and (b) is the name of each (i) municipality and (ii) provincial department to which each technical advisor is currently deployed?

(a) There were 82 MFIP technical advisors deployed under the Municipal Finance Improvement Programme (MFIP) as at 30 August 2019.

(b) Attached kindly find annexure ‘A’ which details the deployment of the 83 technical advisors per municipality, National Treasury (NT) and provincial treasuries (PTs).

(2) whether he has found that there is any improvement as a result of Programme 8 with respect to the financial management of the specified municipalities and provincial departments; if not, what is the position in this regard; if so, what are the relevant details;

The MFIP III context

The current phase three of the MFIP, which commenced on 1 April 2017 and ends 31 March 2020, is a strategically-driven programme of technical assistance aligned to the six Local Government Financial Management (LGFM) game changers, viz. funded budgets, revenue management, mSCOA implementation, asset management, supply chain management and audit outcomes. The overall strategic goals of the MFIP are to facilitate improved local government financial management capacity, enhanced budget and financial management practices and improved audit outcomes through the provision of direct technical capacity support.

Accordingly, the MFIP III is designed to build the institutional and technical financial management capacity of the National Treasury (NT), provincial treasuries (PTs) and Municipalities. This is mainly achieved through the placement of technical advisors (TAs) within the MFMA support units of national and provincial treasuries, and the Budget and Treasury Offices (BTOs) of municipalities.

Almost 50% of the TAs were sourced by November 2017 with the remaining TAs sourced between January 2018 and August 2019. It should thus be noted that the actual date of deployment is directly associated with the extent of improvements shown.

Has there been any improvement as a result of MFIP with respect to the financial management of the specified municipalities and provincial departments? If yes, provide some details:

Yes, there has been improvement, in some of the following financial management areas:

2.1 Supply Chain Management

a) Capacitation of Councillors specifically in dealing with Unauthorised Irregular Fruitless and Wasteful Expenditure (UIF&W) which has resulted in some municipalities that did not have functional MPACs establishing such committees.

b) Establishment of Disciplinary Boards in most of the municipalities now monitoring implementation of the implementation of this reform.

c) Evaluation for alignment of SCM Policy to the legislation and reforms resulting in municipalities increasingly complying with applicable regulations. There has been a marked decline in the utilisation of SCM regulation 32 which was a major source of irregular expenditure for municipalities.

2.2 Audit outcomes

a) Most municipalities with Municipal Advisors improved or retained their previous audit opinions in the 2017/18 financial year, as outlined below:

• 3 out 15 or 20% of municipalities improved on their audit outcomes;
• 4 out 15 or 26% of municipalities retained their unqualified audit opinion;  
• 3 out of 15 or 20% of municipalities retained their qualified audit opinion;  
• 4 out 15 or 26% of municipalities retained their disclaimed audit opinion; and  
• 1 out of 15 or 8% of municipalities regressed from qualified to disclaimer audit opinion

2.3 Asset management

1. Reviewed and updated the asset management policies and standard operating procedures for 59 municipalities.
2. Drafted and circulated various methodologies and guidelines to assist municipalities on how they can correctly apply the GRAP standards on Property, Plant and Equipment, Investment Property, Intangible assets, Heritage assets and Inventory
3. Training and capacity building for municipal officials for 65 municipalities on asset management practices such as
   • GRAP compliance when valuing and accounting for the municipality’s assets
   • Implementation of municipal asset management policy and procedures
   • Internal control systems of assets and liabilities, including an asset and liability register, as prescribed 

2.4 The following are some of the key institutional and technical factors that contribute to areas that do not show the requisite improvements?

1. Some provincial treasuries and municipalities are severely incapacitated by the absence of staff (warm bodies) in the MFMA units and BTOs respectively impacting adversely on the programme’s impact.
2. Some MPACs and Councils not taking decisive action (consequence management) to deal with officials responsible for causing UIF&W expenditure resulting in recurrence of such incidents.
3. Municipalities adopting unfunded budgets, which generally leads to cash flow challenges during the financial year.
4. Poor revenue management, cash flow management and expenditure management practices resulting in liquidity and business continuity risks.
5. Severe cashflow challenges is experienced by a number of municipalities resulting in high level of fruitless and wasteful expenditure (interest payable on overdue accounts) emanating from the late or non-payment of ESKOM, water board and other creditor accounts.
6. Over reliance on external service providers to perform functions like the preparation of annual financial statements and the compilation of fixed asset registers.
7. Poor asset management, ageing infrastructure and low levels of maintenance resulting in high distribution losses and service delivery breakdowns or interruptions.
8. Municipalities not budgeting, transacting or reporting in/from their core financial system (FS) impacting the quality and reliability of financial information.
9. Poor or non-implementation by municipalities of audit action plans to effectively address the root causes of audit findings.

(3) Whether the progress related to the specific tasks of each advisor is monitored; if not, what is the position in this regard; if so, what are the relevant details;

Yes, the progress related to the specific tasks of each advisor is monitored by the MFIP Programme Management Unit (PMU) as part of the overall performance management protocols of the programme. The following are the key steps involved:

• 1. Each advisor prepares a support plan or workplan, in line with the original scope of work, within one to three months after appointment and placement for approval by the relevant entity and the PMU;
  2. Each advisor captures his/her effort/time daily on the Capture Effort Application against the approved support- or workplan. This is then reviewed and approved by the relevant NT Director/ Chief Director/ Senior Advisor/ Director at the PMU.
  3. Monthly reports for each advisor are submitted to the PMU signed off by the Municipal Manager / NT Chief Director and/ or PT MFMA Coordinator.
  4. Formal performance reviews of all technical advisors are conducted bi-annually by the PMU in consultation with the relevant NT, PT or municipal counterparts.

(4) What is the (a) specific task of each technical advisor and (b) cost to the National Treasury with respect to each technical advisor;

a) Each technical advisor signs a support plan or workplan that details the specific key focus areas, functional areas, tasks/activities and timelines that they will be performing, in accordance with the original scope of work published in the procurement terms of reference. The support- or workplan is also signed by the counterpart at the relevant entity and approved by the MFIP PMU.

(b) The cost of each technical advisor is capped as follows:

• Senior Advisors are currently paid on average R861.12 per hour and are contracted for a maximum of 1 840 hours per annum, amounting to an average annual cost of R1 584 460.80 exclusive of VAT per senior advisor.
• Advisors and Specialists are currently paid on average R807.30 per hour and are contracted for a maximum of 1 840 hour per annum, amounting to an average annual cost of R1 485 432.00 exclusive of VAT per advisor or specialist.

(5) Whether he will make a statement on the matter?

The Minister is prepared to make a statement relating to the above responses.

Reply:

DBSA

Number of workers: (None of these workers sourced through tenders since insourcing dates)

Personnel	Number	Comments
Cleaning	19	DBSA insourced the cleaning workers June 2015
Security	15	DBSA insourced the security workers July 2016
General workers	22	Consist of all Facilities’ workers excluding Manager, Supervisors, Cleaning and Security staff – general workers always permanent employees of DBSA

Total amount spend FY 2018/19: (Total Cost to Bank)

Personnel	Rand
Cleaning	3,425,033
Security	6,402,059
General workers	5,158,569

SARS

1. SARS has contracted, through service providers,

a) eight hundred and thirty one (831) security officers on a contractual basis and one hundred and seventy (170) on an ad-hoc basis for annual SARS peak periods that include the tax filing season and the festive season increase experienced at Ports of Entries;

b) seven hundred and sixty nine (769) cleaning personnel deployed by the appointed service providers for the SARS offices nationally;

c) no general workers are contracted by SARS.

2. Estimated spend on security service providers who are contracted to safeguard all SARS buildings, facilities and infrastructure is approximately R150 million per annum. SARS spends on average R69.6 million per annum on cleaning services nationally. SARS has not contracted any general workers through service providers; therefore no spending has been done in this regard.

Reply:

a) (i) 2016 - Nil

2017 - Nil

2018 - Nil

(ii) Since 1 January 2019 - Nil

(b) (i) Dismissals - Nil

(ii) Criminal charges - Nil

Reply:

1. The financial recovery plan for the West Rand District Municipality was prepared by the Municipal Finance Recovery Service (MFRS) following a request from the Gauteng Provincial Government.

The MFRS has for purposes of the preparation of the financial recovery plan consulted with both the administrative and political leadership component of the municipality (Executive Mayor and Mayoral Committee; Accounting Officer and senior management); MEC’s for Finance and Local Government; Organised local government; Organised labour; and principal suppliers including creditors and the community.

The financial recovery plan is holistic focusing on financial management; organisational structure and institutional matters; human resource management; governance; and infrastructure and service delivery. Moreover, it addresses the municipality’s service delivery model, operations, structure, processes, policies, bylaws, budget, cash flow management, debt collection, expenditure and revenue-raising measures. These collectively will contribute to the turnaround if implemented accordingly. The turnaround of the West Rand District Municipality requires not only internal commitment from the Municipality but support from the Provincial Executive.

2. The financial recovery plan was submitted by the MFRS to the Gauteng MEC for Finance for further processing in terms of Section 143(2) of the Municipal Finance Management Act, 2003.

Reply:

1. The National Treasury does not provide financial assistance to municipalities. An operational deficit indicates that the municipality’s operating expenses exceeds the revenue. Failure to contain costs while not realising anticipated revenue collection levels results in operating deficits. The first approach is for the municipality to implement cost containment measures and reduce the operating expenses.

Given that Sedibeng is a delegated municipality, the Gauteng Provincial Treasury will continue to support the municipality to ensure that it adopts a funded budget going forward.

2. Currently the municipality does not have a financial recovery plan. However, reference should be made to chapter 13 of the Municipal Finance Management Act, (Act No. 56 of 2003) on the process to be followed for resolution of financial challenges.

Reply:

No, the National Treasury has not investigated such impact, as neither the National Treasury nor the South African Reserve Bank have any evidence that any bank has taken part in currency manipulation, as indicated in our previous replies to oral question 57 and 245 submitted on 29 March 2019, and will repeat the essence of those replies below.

We are not aware that the Competition Commission has made any finding on the manipulation of the rand, but is investigating a case of price fixing and market allocation in the trading of foreign currency pairs involving the Rand, which it has referred to the Competition Tribunal for prosecution. The currency market is a deep and liquid market, and it is difficult to determine any material or long-lasting impact of any one transaction on the level or value of the currency.

It is important for members to differentiate between the impact of any transaction on consumers and the impact on the value of the rand – the investigation before the Competition Commission appears to be related more to the conduct of bank traders towards clients, rather than providing evidence of their affecting the actual value of the rand.

We should all await the outcome of the Competition Commission’s investigation before acting on them. I am also happy to invite the Honourable Member to provide any other evidence he may have on any currency manipulation to the Commission and/or National Treasury.

Reply:

In terms of its mandate and legal provision, SARS established an interim capability to conduct investigations into the illicit economy. The capability executes integrated enforcement investigations and comprises of data analysis, risk identification, criminal and compliance investigation and audits and debt recovery.

(a) Its current staff complement is 60.

(b) The capability is funded through SARS financial allocation.

The mandate and scope of this capability is currently under review in order to better define and sharpen its focus.

As part of the review by the new Commissioner the following is being assessed:

• SARS’ capability and capacity to monitor and assess the activities within the elicit economy as well as assess the true revenue impact/ risk that the illicit economy presents to the state.
• SARS’ capability and capacity to conduct the investigative and audit work
• The most effective organizational arrangement
• Collaboration with the agencies of State.

Reply:

(a) (i) (ii) (iii) (aa) Own	Nil
(a) (i) (bb) Rent	Three (3) buildings: - 1108 John Vorster Drive (1 x floor only) - 240 Madiba Street; and - 40 Church Square.
(a) (ii) (iii) (bb)	Nil
(b) (i) Value and purpose owned property	Not applicable
(b) (ii) Value and purpose of rented property	1108 John Vorster Drive (1 x floor only)	R65 033 050.00	Office accommodation and State Transversal Information and Communication Technology site
	240 Madiba Street	R603 337 824.00	Office accommodation
	40 Church Square	R19 030 631.00	Office accommodation
(c) (i) Duration of rental:	1108 John Vorster Drive (1 x floor only)	20 years
	240 Madiba Street	16 years
	40 Church Square	16 years
(c)(ii) From whom is each property rented:	1108 John Vorster Drive (1 x floor only)	Rented on behalf of National Treasury by the Department of Public Works, owned by SITA.
	240 Madiba Street	Rented on behalf of National Treasury by the Department of Public Works, owned by Bothongo Group Management.
	40 Church Square	State owned - Department of Public Works.
(c)(iii) Monthly rental fee for each property:	1108 John Vorster Drive (1 x floor only)	R1 127 659.02
	240 Madiba Street	R4 221 538.45
	40 Church Square	R673 134.08

 

Reply:

National Treasury did not support any investments in energy resources outside the borders of the Republic.

Reply:

1. SAA was recapitalized with R5 billion during February 2019 to assist the airline to repay maturing government guaranteed debt. This was in accordance with the SAA Special Appropriation Bill which was tabled at the time of the Medium Term Budget Policy Statement (MTBPS) in October 2018. The R5 billion formed part of the R21.7 billion funding request by SAA.

2. In the 2019 Budget Speech, the Minister of Finance indicated the following:

“On other state-owned enterprises, we are reviewing our framework for state-owned enterprise support. Government has revised the contingency reserve upwards to R13 billion for 2019/20 to respond to possible requests for financial support”.

SAA is one of the entities that has applied for funding from the Contingency Reserve. The amount the airline applied for and the outcome of the funding request will only be determined after the normal budgetary and legislative processes have been finalised which is expected around August/September 2019.

3. In line with the 2019 Budget Speech, National Treasury has indicated that government remains committed to supporting the airline and its funding requirements through the

contingency reserve process which is currently underway.

4. None

Reply:

1. R199 million has been allocated to the SABC for the 2019/2020 financial year. This is to specifically cater for public broadcasting obligations, community radio stations, Channel Africa and programme production. More detail can be found within the Estimates of National Expenditure.

2. In the 2019 Budget Speech, the Minister of Finance indicated the following:

“On other state-owned enterprises, we are reviewing our framework for state-owned enterprise support. Government has revised the contingency reserve upwards to R13 billion for 2019/20 to respond to possible requests for financial support”

SABC is one of the entities that has applied for funding from the contingency reserve. The amount that the entity has applied for and the outcome of the funding request will only be determined after the normal budgetary and legislative processes have been finalised which is expected around August/September 2019.

3. In line with the 2019 Budget Speech, National Treasury has indicated to the SABC that government remains committed to supporting the entity and its funding requirements through the contingency reserve process which is currently underway.

4. None.

Reply:

1. By 30 April 2019, National Treasury transferred a total of R13.5 billion to Eskom of the R17.652 billion that was approved by the Minister of Finance through invoking Section 16 of the Public Finance Management Act (PFMA).

2. Government acknowledges that the R23 billion for 2019/2020 will not be sufficient and is thus tabling a Special Appropriation Bill to Parliament for urgent consideration and approval.

3. Given the strategic role that Eskom plays in pursuit of governments objectives, the Minister of Finance announced that government has committed to set aside R23 billion per year over the next 3 years to financially support Eskom. Moreover, beyond MTEF the current fiscal planning includes R23 billion per year to support Eskom over the next 10 years, with the total accumulated support amounting to R230 billion or R150 billion in net present value terms.

4. None.

Reply:

1. (a) The Nugent Commission was funded by the fiscus, which is the same as other Commissions.

   (b) A total amount of R7 985 726 was spent on the Commission.

2. (a) Judge Nugent was paid in accordance with the President’s determination on remuneration of the Chairperson of the Commission. He received a total amount R816 459 for the period 1 June to 31 December 2018.

  (b) The last day of the Commission was 31 December 2018.

3. The work of the Commission has been finalised and the report was submitted to the Office of the President.

Reply:

1. No signs of hacking were found. The possibility that Minister’s twitter account may have been hacked was raised in an interview, during which the journalist asked if Minister’s twitter account had been hacked. The response was that we did not know at the time how Minister had ended up liking the tweet in question, and that we were looking into the matter.
2. See response to question 1