Presentation to the Portfolio Committee on Trade and Industry NRCS Quarterly Report 29 November 2012...

Presentation to the Portfolio Committee on Trade and Industry

NRCS Quarterly Report

29 November 2012

1

In attendance from NRCS

2

Mr. Katima TembaChief Executive Officer (Acting)

Ms. Reshma MathuraChief Financial Officer

Purpose

To brief the Portfolio Committee on Trade and Industry on the performance of the NRCS

for Quarter 2 of the 2013 Financial year

3

Scope

Organisational mandateBackgroundOrganisational challengesOverview of strategic outcomesPerformance against strategic planReport of the Auditor-General: UpdateFinancial overview

4

Organisational Mandate

5

Organisational MandateMission and Vision

6

Organisational mandateLegislative mandate

7

Mandate of the NRCS is derived from the following Acts.

Background

8

Background

9

Organisational Challenges

10


Current challenges faced by NRCS include:

Organisational maturity as NRCS is still in infancy stage Organisational transition from SABS to stand-alone entityDelivery of NRCS mandate and achievement of performance targets for operational unitsInternal stability resulting from investigations and uncertainty iro outcomes of these investigations.Stability of organisational structure and staff turnoverActing Positions at Snr Management levelGeneration of revenue reliant on trends and marketsInternal control weaknesses including procurement, asset management and HRLabour relations and a range of staff and HR issues

11


External challenges faced by NRCS include:

Inadequate and lack of testing facilities in South Africa Lack of qualified staff and the inability to recruit required specialist resources Capacity constraints: Evaluator capacity in Electro-technical approvals continues to be a major concern.Inability to cover all activities due to limited staff The application and regulation of products covered under VCs that are outdated. High transportation and storage costs for confiscated goods

12

Overview of strategic outcomes

13

Overview of strategic outcomesPer the Strategic Plan FY2012-FY2017

14

Performance against strategic plans

15

Performance against strategic plan

16

Strategic Goals

Outcome Division Targets Actual performance Achieved Comments

To Maximise compliance with all specifications and technical regulations falling under the mandate of the NRCS

Maximum coverage

Perishable Division

Imported productsInspection target Canned and Frozen Fish:2808 Local produced products:

Frozen products–: 263

Imported productsInspected 100% of all declared:Canned and Frozen Fish: 3116 Local produced products:Frozen products: 291

Yearly targets for fisheries cannot accurately be divided into quarterly and monthly periods, as local production and imports fluctuate tremendously due to fish quotas, seasonal variations & foreign exchange rates. In general, the production and import of canned fish increased more than expected and local production of canned fish increased but will decrease again in the remaining months of the financial year.

Canned Fish: 595Canned meat: 928 Exported product: 3301

Canned Fish: 211Canned Meat:769 Exported product: 2814

Legal Metrology Division

1226 Inspections 1015 Inspections Suspension of a technologist, lack of skilled Human resources and IR problems in KZN and Free State

Non-Perishable Division

CMM: 1205 InspectionsAutomotive: 1210 InspectionsElectrotech: 1210 Inspections

CMM: 785 InspectionsAutomotive: 1190 InspectionsElectro-technical: 1063 Inspections

• Inspectors committed most of their time at the ports of entry in line with the NRCS strategy.

• Year to date figures on par with the targets due to over-achievement in Quarter 1.

Performance against strategic planOverview

17

Performance against strategic planInspections

18

Performance against strategic planInspections

19


20

Strategic Goals Outcome Division Targets Actual performance

Achieved

Comments

To Maximise compliance with all specifications and technical regulations falling under the mandate of the NRCS

Prosecute non-compliances in accordance with NRCS Act

Special Investigation Unit

4 No cases investigated

• Unit not properly resourced

• Unit in the process of being resourced

To extend the scope of the NRCS regulatory activity to increase the protection of South African Citizens

Build a regulatory framework that is sustainable and that protects South African citizens

RRD 1 compulsory specifications / technical regulations approved by the Board

0 compulsory specifications approved by the Board

1 compulsory specification was approved by EXCO and submitted on 28 Sept for approval by the next meeting of the Board Technical Committee


21

Strategic Goals Outcome Division Targets Actual performance

Achieved Comments

To ensure the “right people are in the right place at the right time” to enable effective execution of the NRCS Strategy

Appropriate organisational structureCompetent and motivated staff

Corporate Services

100% implementation of the HR strategy

75% implementation of HR strategy

• Structure- Consultation phase

• Job grading and profiling currently at tender stage

• Draft polices prepared for consultation

To inform and educate stakeholders, industry and consumers regarding obligations of the NRCS with respect to specifications and technical regulations

Enhance consumer education

Corporate ServicesOperational Business Units

100% of all confiscations and product recalls covered

100% of alerts on non-compliances, confiscated products and recalls were issued

Report of the Auditor-GeneralUpdate

22

Action Plans: Auditor General report (1)

23

Area of audit concern

Detail Management interventions Status

Revenue from services rendered from exchange transactions

• Non-accrual for revenue• Inspections conducted

not translated into revenue within the reporting period

• A manual weekly report on certification is in the process of being implemented. This will be reviewed weekly for revenue completeness.

Property, plant and equipment

• Useful life of assets not reviewed

• Accuracy of asset register

• Full asset count will be conducted by February 2013.

• A reconciliation is in process between the Asset Register and the General Ledger

On track for end Feb 2013

Restatement of FY 2011 figures

• Correction iro. depreciation on investment property.

• Correction of bonus provision recognised as accrual.

• Figures were corrected in the AFS.• A financial manager is being appointed

and will add integrity to the AFS.• In the process of procuring an AFS

software to ensure accuracy of AFS

On track for end Jan 2013


24



Predetermined objectives

• Usefulness of information• Performance indicators not

well defined• Performance targets not

specific• Reliability of information• Reported performance not

valid, accurate and complete

• Achievement of planned targets

• 3 of 15 planned targets were achieved – 80% non-achievement

• NRCS 2012/13 – 2014/15 Annual Performance Plan has addressed some of the identified problems.

• The NRCS 2013/14 – 2015/16 Annual Performance Plan will ensure that all identified performance targets are clearly defined

• NRCS has also defined an inspection and is in the process of documenting processes to ensure uniformity and clear understanding

• All responsible Heads are now required to sign-off their performance information reports

• NRCS is in the process of recruiting to enhance capacity in areas that has insufficient human resources

In Progress


25



AFS, performance and annual report

• Not submitted in accordance with prescribed reporting frameworks

• A financial manager is being appointed and will add integrity to the AFS.

• In the process of procuring an AFS software to ensure accuracy of AFS

On track for end Jan 2013

Asset management

• Systems not in place to safeguard assets

• An asset accountant will be appointed to manage the recording of all assets.

• Policies and procedures related to assets will be reviewed.

• NRCS is in the process of commissioning a health check on JD Edwards, financial system to determine the root cause of the ICT problems on the asset register.

• In the meanwhile, a manual reconciliation between the fixed asset register and the GL is being conducted.

On track for end Mar 2013


26



Procurement and contract management

• Non-compliance with procurement thresholds, processes, requirements

• Awarding of contracts in accordance with legislative requirements

• The organisation’s procurement processes have been improved to ensure compliance to Treasury Regulations and Frameworks.

• The SCM policy has been revised and updated to incorporate all legislative requirements.

• The appointment of a SCM Manager has enhanced compliance and reporting of non-compliance.

• For all transactions initiated after 30 September 2012, the NRCS is now compliant to policies.

• The NRCS is further in the process of appointing a contract specialist who will both assist with management of contracts and assist in tender-related matters.

• The filing system will be upgraded, secured space for Procurement Department will be explored, and document movement to and from procurement will be managed more carefully.

In Progress and complete in some instances


27



Internal control

• Leadership oversight• Material

misstatements in financial and performance reporting

• The appointment of a CFO has strengthened the Finance Department and general financial controls.

• Furthermore, the capacitation of the finance department with competent staff, will further enhance its effectiveness.

• The NRCS is in the process of consulting employees on the organisational structure. This will bring stability and ensure clear lines of responsibility

• All Acting Executives are required to sign-off their divisional reports. NRCS is in the process of aligning all performance agreements are in-line with the NRCS annual performance plan.

In Progress


28



Expenditure management

• Irregular, fruitless and wasteful expenditure

• An SCM Manager has been appointed.• In addition, communication of the revised

procurement policy is an ongoing initiative to the management and staff of NRCS.

• Instances of irregular, fruitless and wasteful expenditure are recorded by procurement and relevant controls are being put in place to deal with these instances.

In Progress and ongoing

Financial overview

29

Financial Overview: Revenue

30

Composition of revenue for Year-to date (Sept 2012)

Financial Overview: Revenue

31

Actual versus budget revenue for each revenue stream compared to the prior year

Financial Overview: Expenditure

32

Expenditure makeup for YTD (September 2012)

Financial Overview: Expenditure

33

Expenditure for Q1 and Q2 compared to budget and actual

Financial Overview: Income vs. Expenditure

34

Income against expenditure for the year to date

The end

35

Presentation to the Portfolio Committee on Trade and Industry NRCS Quarterly Report 29 November 2012...

Documents

Transcript of Presentation to the Portfolio Committee on Trade and Industry NRCS Quarterly Report 29 November 2012...