TABLE OF CONTENTS...Ms Weziwe Tikana MEC for Transport, Safety and Liaison SUBMISSION OF THE ANNUAL...

TABLE OF CONTENTS

PART A: GENERAL INFORMATION ...................................................................................................................................... 2

1. DEPARTMENTAL GENERAL INFORMATION .............................................................................................................. 3

2. LIST OF ABBREVIATIONS/ACRONYMS ...................................................................................................................... 4

3. FOREWORD BY THE MEC ......................................................................................................................................... 6

4. REPORT OF THE ACCOUNTING OFFICER ................................................................................................................... 8

5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT ........................ 13

6. STRATEGIC OVERVEW ........................................................................................................................................... 14

7. LEGISLATIVE AND OTHER MANDATES ................................................................................................................... 15

8. ORGANISATIONAL STRUCTURE.............................................................................................................................. 16

9. ENTITIES REPORTING TO THE MEC ........................................................................................................................ 17

PART B: PERFORMANCE INFORMATION .......................................................................................................................... 18

1. AUDITOR GENERAL’S REPORT: PERFORMANCE INFORMATION ............................................................................. 19

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE ................................................................................................... 19

3. STRATEGIC OUTCOME ORIENTED GOALS ............................................................................................................... 23

4. SUMMARY OF PROGRAMMES ............................................................................................................................... 25

5. PERFORMANCE INFORMATION BY PROGRAMMES................................................................................................ 26

PROGRAMME 1: ADMINISTRATION ...................................................................................................................... 26

PROGRAMME 2: TRANSPORT INFRASTRUCTURE .................................................................................................. 31

PROGRAMME 3: TRANSPORT OPERATIONS .......................................................................................................... 34

PROGRAMME 4: TRANSPORT REGULATION .......................................................................................................... 39

PROGRAMME 5: EPWP/COMMUNITY BASED PROGRAMMES (TRANSPORTATION) ............................................. 43

GOVERNMENT FLEET MANAGEMENT SERVICES .................................................................................................... 46

6. TRANSFER PAYMENTS EXCLUDING PUBLIC ENTITIES ............................................................................................. 49

7. CONDITIONAL GRANTS AND EARMARKED FUNDS PAID ........................................................................................ 49

8. DONOR FUNDS RECEIVED ...................................................................................................................................... 49

9. CAPITAL INVESTMENT, MAINTENANCE AND ASSET MANAGEMENT PLAN............................................................. 50

10. DEPARTMENTAL RECEIPTS .................................................................................................................................... 50

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PART C: GOVERNANCE ..................................................................................................................................................... 51

1. INTRODUCTION ..................................................................................................................................................... 52

2. RISK MANAGEMENT .............................................................................................................................................. 52

3. FRAUD AND CORRPUTION ..................................................................................................................................... 52

4. MINIMISING CONFLICT OF INTEREST ..................................................................................................................... 53

5. CODE OF CONDUCT ............................................................................................................................................... 53

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES .................................................................................................... 54

7. PORTFOLIO COMMITTEE ....................................................................................................................................... 54

8. SCOPA RESOLUTIONS ............................................................................................................................................ 55

9. PRIOR MODIFICATION TO AUDIT REPORTS ........................................................................................................... 56

10. INTERNAL CONTROL UNIT ..................................................................................................................................... 56

11. INTERNAL AUDIT AND AUDIT COMMITTEE ............................................................................................................ 57

12. AUDIT COMMITTEE REPORT .................................................................................................................................. 59

PART D: HUMAN RESOURCE MANAGEMENT ................................................................................................................... 62

1. INTRODUCTION ..................................................................................................................................................... 63

2. HUMAN RESOURCES OVERSIGHT STATISTICS ........................................................................................................ 63

3. HUMAN RESOURCES OVERSIGHT STATISTICS ........................................................................................................ 64

PART E: FINANCIAL MANAGEMENT ................................................................................................................................. 90

REPORT OF THE AUDITOR-GENERAL ................................................................................................................................ 91

ANNUAL FINANCIAL STATEMENTS ................................................................................................................................... 97

PART F: FINANCE INFORMATION-TRADING ENTITY ……………………………………………………………………..…………………………..194 ACCOUNTING OFFICERS RESSPONSIBILITY AND APPROVAL ……………………………………………………………………………….……….201 AUDITORS RESPONSIBILITY FOR THE AUDIT ……………………………………………………….…………………………………..………………… 202

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Ms Weziwe Tikana MEC for Transport, Safety and Liaison SUBMISSION OF THE ANNUAL REPORT OF VOTE 10 -2017-18 The Annual Report of the Vote 10: Eastern Cape Department of Transport for the period 1 April 2017 to 31 March 2018 is hereby submitted to the Member of the Executive Council. This submission is done in accordance with Chapter 5 Part 2 (40) (d) (i) of the Public Finance Management Act of 1999, chapter 18 and 19 of the Treasury Regulations. This report also includes information required by the Public Service Regulations, 2001 on human resource information. Yours in an efficient, safe, affordable and sustainable transport system ___________________________________________ Ms I I.N. Mpolweni Head of Department Eastern Cape Department of Transport 30 August 2018

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PART A: GENERAL INFORMATION

1. DEPARTMENTAL GENERAL INFORMATION

5601 POSTAL ADDRESS : Department of Transport Private Bag x0023

BHISHO 5605

SWITCHBOARD : 043 604 7400 WEBSITE ADDRESS : www.ectransport.gov.za

PHYSICAL ADDRESS : Stellenbosch Park Flemming Street Schornville KING WILLIAM’S TOWN

POSTAL & CONTACT DETAILS PHYSICAL ADDRESS

HEAD OFFICE

Postal Address Office of the Head of Department Private Bag x0023 BHISHO 5605 Contact Details Tel.: (043)604-7472 Fax: 086 646-6602 E-mail:[email protected]

Street Address Stellenbosch Park Flemming Street Schornville KING WILLIAM’S TOWN 5601

Superintendent General: Ms I. N. Mpolweni

CHIEF FINANCIAL OFFICER

Postal Address Private Bag X0023 BHISHO 5605 Contact Details Tel.: (043)604-7416 Fax: 086 687-8528 Email (PA): [email protected]

Street Address Stellenbosch Park Flemming Street Schornville KING WILLIAM’S TOWN 5601

Chief Financial Officer: Mr. D.S. Skweyiya

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mailto:[email protected]

mailto:[email protected]

2. LIST OF ABBREVIATIONS/ACRONYMS Abbreviation Description AB350 Africa’s Best 350 Ltd ABET Adult Basic Education Training AG Auditor-General AIDS Acquired Immuno Deficiency Syndrome APP Annual Performance Plan ATNS Air Traffic Navigation System BAS Basic Accounting System CFO Chief Financial Officer CSIR Council For Scientific and Industrial Research DLTC Driver’s License Testing Centre DME Distance Measuring Equipment DPSA Department of Public Service Administration DVOR Doppler VHF Omni-Directional Range ECDC Eastern Cape Development Corporation ECPT Eastern Cape Provincial Treasury EPWP Expanded Public Works Programme EXCO Executive Council FET Further Education and Training GEMS Government Employees Medical Scheme GFMS Government Fleet Management Services GIS Geographical Information System HCT HIV Counselling and Testing HIV Human Immuno Virus HOD Head of Department HR Human Resource HRD Human Resource Development IRPTN Integrated Rapid Public Transport Network IOD Injury on Duty ICT Information and Communication Technology ITP Integrated Transport Plan KSD King Sabata Dalindyebo LDV Light Delivery Vehicle LOC Local Organising Committee LED Local Economic Development MEC Member of the Executive Council MIS Management Information System MPAT Management Performance Assessment Tool MPSS Minimum Physical Security Standards MTC Mayibuye Transport Corporation MTEF Medium Term Expenditure Framework NaTIS National Traffic Information System NDoT National Department of Transport NMBMM Nelson Mandela Bay Metropolitan Municipality NTRA National Roads Traffic Act OHS Occupational Health and Safety OL Operating License OP Operational Plan OTP Office of the Premier PCC Provincial Coordinating Committee PCMT Provincial Coordinating Monitoring Team PDP Personal Development Plan PET Participatory Educational Technique PFMA Public Finance Management Act PIPTMP Provincial Integrated Public Transport Master Plan PILIR Policy and Procedure on Incapacity, Leave ,Ill-health and Retirement PLTF Provincial Land Transportation Framework PSC Public service Commission PSETA Public Sector Education and Training Authority PSR Public Service Regulations

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Abbreviation Description PT Provincial Treasury PVA Public Viewing Area RSR Rail Safety Regulator RTMC Road Traffic Management Corporation SACAA South African Civil Aviation Act SANRAL South African National Roads Agency SANTACO South African National Taxi Council SCM Supply Chain Management SCMU Supply Chain Management Unit SETA Skills Education Training Authority SG Superintendent-General SIU Special Investigating Unit SLA Service Level Agreement SMME Small Medium Micro Enterprise SMS Senior Management Service SP Strategic Plan TB Tuberculosis TETA Transport Education and Training Authority TRAFMAN Traffic Management System TT Task Team TTC Transport Technical Committee VTS Vehicle Testing Station

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3. FOREWORD BY THE MEC

MEC WEZIWE TIKANA

TRANSPORT, SAFETY AND LIASON

The 2017/18 financial year has been very successful in the Eastern Cape Department of Transport. We continued to traverse the province over the period of 12 months energized by our vision of providing an efficient, sustainable, affordable and accessible transport system to the people of the Eastern Cape.

The department remains a critical player in creating an enabling environment for socio-economic growth and development of our province. It is also one of the major contributors to the provincial revenue strategy, this is evident in the collection of about R 648 5m , mainly through traffic fines. We are also acutely aware of the potential revenue that could be collected hence we are currently putting in place modernized systems to improve our revenue collection strategy.

During the year under review, we entered into strategic partnerships with other government entities to ensure that we create an environment conducive for the socio-economic development of our people. The successful hosting of the Mthatha Airshow and Aviation Career Expo in partnership with the South African Civil Aviation Authority (SACAA) was one of such partnerships.

Through this event, we exposed about 1038 Grade 09 – 12 learners to careers in the aviation industry. We have committed to bring this event annually.

In a country that is still struggling to ensure access to higher education, as a department, we continue to make a contribution to alleviate the plight of our young people. During last financial year about 54 young people gained access to doors of learning, to special in areas such as Engineering, Information Technology, Transport Economics, Aviation and Maritime Studies through our bursary fund.

In line with the decision of the Executive Council, with respect to the allocation of the roads function, we spent part of the year readying ourselves to reintegrate roads construction and maintenance work of government to the transport family. We are looking forward to this growth as it pulls together all the elements necessary for the creation of safe and accessible roads infrastructure which play a major role in traffic safety.

Recognizing the importance of our traffic law enforcement team in improving road safety, we have up-skilled the existing ones, recruited, trained and brought into our system new members. We further strengthened our road safety education campaigns, promoting safer road conduct by all categories of road users in our province.

We acknowledge the challenges we face in the Scholar Transport Programme which in the main are a result of budget shortfalls. However, we celebrate the fact that over 80572 learners from 746 schools across the province are able to have access to education facilities and their safety from opportunistic criminals is guaranteed.

The department still faces many complex challenges, including the need to improve the provision of public transport and ensuring the safety of commuters and operators alike. Also, in these times of shrinking resources, there is always an impending challenge of finding financial resources to support the needs of our people. In order to address these issues, we are introducing revised models of operation especially for our infrastructure projects which includes beefing up internal capacity to deliver on our mandate. We are also examining sourcing models for our strategic procurement needs balancing this with expanding our contribution to local economic development.

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In summary, I believe it has been a progressive year. We have made a lot of progress but there is still a lot of work to be done to “improve the quality of life of all citizens and free the potential of each person,” as envisaged by the Constitution of the Republic of South Africa.

__________________________________ MEC Weziwe Tikana DEPARTMENT OF TRANSPORT

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4. REPORT OF THE ACCOUNTING OFFICER Overview of the operations of the Department The Department during the 2017/18 financial year continued with its mandate of delivering an efficient, safe, sustainable, affordable and accessible transport system. The Department has a responsibility of contributing towards implementation of the Provincial Strategic Framework Priority No 2 that is “Building social and economic infrastructure” and our goal was to provide a safe and efficient Integrated Transport Network in the Province. This is in line with National Development Plan 2030 that requires integrated planning approach which includes planning authorities and stakeholders at large.

The priorities of Departments over next 5 years are:

• Strengthen the Transport Planning Function and Mobilise Resource • Expand the Public Transport System • Enhance the Scholar Transport Programme • Review and Strengthen transport regulatory function • Provision of non-motorized transport infrastructure • Develop a Road Safety Management Strategy • Enhance upskilling programme • Operation Phakisa: Ocean Economy

Significant events and projects that occurred during the year under review include the following:

The process of establishing a traffic control centre in Middleburg is at an advanced stage.A tender for the design and build of the facility will be advertised in June 2018.The facility will integrate the adjacent and previously neglected towns of Cradock and Graaff Reinet The facility will generate revenue from the traffic traversing through N9 and N10.The design phase for the development of a Maritime Resource Centre is currently underway.

Public Transport :The rollout is also hampered by inadequate funding for the empowerment and the pilot phase of the project. For the 2017/18 financial, only R 2.9 million has been made available. The current budget can only cater for the transformation and empowerment process unless additional budget is made available.

Aviation – Airports Company South Africa (ACSA) has been appointed as the management company of the Mthatha airport and has assumed management of the airport since February 2018. A new Category 6 fire engine has been procured and delivered to the Airport. This will assist the Departments efforts to upgrade the airport from a CAT 4 status to a CAT5/6. The Department has already started the upgrading of the fire station at Mthatha to comply with CAT 6 standards and a fire simulator will be constructed. The Department is continuously engaging South African Airways and other airlines to address the issue of reduction of flights to the Province. The renovation of Bhisho Airport is currently underway. Scholar Transport - the department of Transport provides scholar transport to 80 572 learners daily to 746 schools across the province, which represents 80% of the total scholar transport demand in the province. A budget of R504 million which has not grown since the last financial year, as a result the department have not been able to increase the number of learners that are in need. Oceans Economy - In July 2014, the President of the Republic of South Africa launched Operation Phakisa: Oceans Lab programme, which is a methodology to deliver Big Fast Results in a 3 Feet Plan implementation programme. Provincial task team developed an Integrated Oceans Economy Strategy that is driven by Maritime Unit of the Department of Transport, provincially. The role of the Provincial Department of Transport will remain as coordinating and facilitating maritime initiatives in the Province Job Creation :The Department through Community Based programme embarked on various projects using EPWP principles which contributed vastly on the creation of 1803 work opportunities as part of socio economic development to minimize inequality gaps.Beneficiaries received training focusing on building certain skills set as per phase 3 of EPWP whilst projects were monitored using EPWP principles as a basis.

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Law Enforcement: The Department has elevated road safety as a key priority as it is about the ‘right to life’, especially given the increasing deaths on roads. The department continues with the activities to curb and reduce corruption at the Driving License centres (DLTC’s) Vehicle testing stations (VTS’s), Registering Authorities (RA’s) and embossers by deregistered non-compliant centers due to the fact that they did not conform to NTRA requirements.

With support from the Road Traffic Management Corporation (RTMC), the department purchased three additional trucks to strengthen law enforcement initiatives and address the challenges posed by stray animals on our roads.

The Department has rolled out TRAFMAN to various Traffic Centres, linking up to the Traffic Infringement Management Centre which plays an integral part in management of traffic fines, analyse fixed camera reports, monitor deployment of patrol vehicles across the road network. Overview of the financial results of the department

2.1 Departmental receipts A target of R670 million was set for 2017/18 for the collection of own revenue (2016/17 R770.6 million). The main source of revenue is the collection of revenue from motor vehicle license fees. The actual own revenue collected is R619.6 million (2016/17 R651.1 million). The under collection is due unrealistic non-payment of motor vehicle license fees collected by some Registering Authorities (RAs). Kouga Municipality continues to pay their debt and the current collections as per their negotiations and the debt will be paid up in 2018/19 financial year. The Department is monitoring the registering authorities (RA’s) in order to pay over all monies collected. Letters are being written to those that are defaulting to warn them that the function will be discontinued if they do not pay their arrears. Further details appear in paragraph 2.3 at the revenue table below.

2.2 Tariffs The following are the main sources of revenue and have not changed over the years:

a) Motor Vehicle Licence Fees b) Vehicle Licence Number Plates c) Road Traffic Fines d) Fees accruing from issued road transportation permits e) Airport landing fees

The tariffs determined are described below. All revenue collected by the department is subsequently paid over to Provincial Treasury.

Motor Vehicle Licence Fees Motor vehicle license fees are the major source of own revenue collected by the department. Vehicle license fees are determined according

to mass and category of each vehicle as specified in the National Road Traffic Act, (Act 93 of 1996). There was no increase in MVL for 2017/18 financial year due to the fact that the province is on par with other provinces and more in some categories.

Vehicle Licence Number Plates

Ordinary license number plates are sold by registered private businesses. Specific number plates or alpha numerical were sold at R957 per set during the year under review while personalised number plates were sold at R3,309 per set. The last increase was made in 2011/12 through provincial gazette dated 14th January 2011. The non-increase is due to the fact that National Department of Transport (NDoT) will determine the tariffs increase for all provinces.

Road Traffic Fines

Revenue collected from traffic fines is paid over to Provincial Treasury into the Provincial Revenue Fund.

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Free Services

There were no free services rendered during the year under review.

2.3 Revenue table Departmental receipts 2017/2018 2016/2017

Estimate Actual

Amount Collected

(Over)/Under Collection Estimate

Actual Amount

Collected (Over)/Under

Collection

R’000 R’000 R’000 R’000 R’000 R’000 Tax Receipts Motor vehicle license 638 312 619 615 18 697 728 228 614 072 114 156

Sale of goods and services other than capital assets 22 935 23 238 -303 21 637 29 738 -8 101

Fines, penalties and forfeits 7 046 5 203 1 843 17 358 6 635 10 723 Interest, dividends and rent on land 1 040 0 0 2 225 0 2 225 Sale of capital assets 0 0 0 0 0 0 Financial transaction in assets and liabilities. 699 484 215 1 242 658 584

TOTAL 670 032 648 540 21 492 770 686 651 103 119 583

2016/17 2017/18

Programme Name Final Expenditure

Actual Expenditure

Over/Under Expenditure

Final Appropriation

Actual Expenditure

Over/Under Expenditure

Administration 282 968 282 686 282 294 666 294 255 411 Transport Infrastructure 12 583 10 033 2 550 15 273 10 421 4 852 Transport Operations 1 074 785 1 073 410 1375 1 140 142 1 139 403 739 Transport Regulations 318 252 318 252 - 337 586 337 345 241 Community Based Programme 55 110 55 091 19 55 537 55 515 22 Total 1 743 698 1 739 472 4 226 1 843 204 1 836 939 6 265

Reasons for under collection. The under collection is due to the fact that some municipalities did not pay over some of the monies collected for Motor Vehicle Licensing during 2017/18 financial year. Furthermore the offenders did not pay the traffic fines as anticipated.

The company that was supposed to have paid the department R7.50 for each blanker for motor vehicle registration number plate to whom it sells the product in the territory. The unit have tried to contact the company but in vain and have referred that to legal section.

The under collection on debts is due to the fact that some of those debts are for retired employees and those that have passed on.

Measures taken during the year to keep on track Letters and meeting were held with those defaulting municipalities and some have offered to pay the outstanding debts in instalments whist also paying the current collections. Those that are still not paying the department is planning withdraw the function or not supply them with the face value documents until they pay the outstanding amounts. Debtors that are not traceable the department will consider writing off those debts as per departmental debt write off policy.

2.4 Programme Expenditure The adjusted appropriation of the department per programme is disclosed in the Appropriation Statement and is as follows:

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Administration: The under expenditure in the programme is immaterial

Transport Infrastructure: The under spending under this programmes is mainly on compensation of employees due the non-filling of posts resulting from the inability to attract scarce skills.

Transport Operations: The underspending in the programme is on transfers and subsidies due to the saving realised on the subsidy for AB350.

Transport Regulations: The under expenditure in the programme is immaterial

Community Based Programmes: The under expenditure in the programme is immaterial

2.5 Virements/roll overs

Programme Adjusted Appropriation Virements Final Appropriation

R’000 R’000 R’000

Administration 299 883 ( 5 217) 294 666

Transport Infrastructure 16 573 (1 300) 15 273

Transport Operations 1 132 191 7 951 1 140 142

Transport Regulations 339 426 (1 840) 337 586

Community based 55 131 406 55 537

Total 1 843 204 - 1 843 204 During the year under review the Department processed all virements in terms of Section 43 of the Public Finance Management Act and the National Treasury Regulations 6.3.1.The virements were done in order to defray excess expenditure and address projected unanticipated cost pressures under Transport Operations, Transport Regulations and Community Development. 1. Reasons for unauthorized, fruitless and wasteful expenditure and the amounts involved as well as steps taken to address

and prevent a recurrence Fruitless and wasteful expenditure The department incurred fruitless and wasteful expenditure amounting to R170, 289 (2015/16: R111, 509 resulting from the payment interest from Telkom & Soma).

Unauthorised expenditure There was no unauthorised expenditure incurred during the 2017/18 financial year

2. Future plans of the department The Organisational Structure is revisited due to the pending Roads transfer from Department Public Works to the Department Of Transport.

3. Public Private Partnerships None

4. Discontinued activities None

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5. New or proposed activities

The Office of the Premier gazetted (gazette no. 3871 ) transfer of Roads function from Department of Public Works to Department Of Transport with effect from 1 April 2018.

6. Supply chain management

The Departmental asset officials continued to attend a meeting on GIAMA at the Department of Public Works. Immovable assets continued to be reported to the Department of Public Works who in turn account for such assets. On the completion of work in progress by the department, the amount is expected to be transferred to the Department of Public Works in 2017/18 financial year as Mthatha Airport runway lights have been completely installed.

7. Gifts and donation received in kind from non -related parties The gifts and donations were received during the year were from Old Mutual and RTMC as disclosed in Annexure 1H of the Annual Financial Statements.

8. Exemptions and deviations received from the National Treasury

The department is exempt from disclosing accrued tax revenue other than those receivable from collecting agencies and any related payables or receivables such as interest or penalties relating to the collection of the tax receipts.

9. Events after the reporting date None

10. Other HROPT cases The process that was initiated by the department regarding the HROPT was put in abeyance pending the outcome of the court case wherein 447 employees of the department litigated on the matter. The department is currently awaiting the judgement.

Industrial strike No employees engaged in the industrial action during the period under review and consequently no deductions was made against

any employees in respect hereof.

11. Acknowledgement/s or Appreciation The Department continue to appreciate the leadership provided by the Executive Authority, Portfolio Committee on Transport, SCOPA, Office of the Premier, Provincial Treasury and Audit Committee in performing their oversight function.

12. Conclusion The Department after redefining its vision and mission towards providing an efficient, affordable, safe, sustainable and accessible transport system is set to improve lives in the Eastern Cape. This approach is in accordance with the National Development Plan 2030 which requires an integrated planning to include the planning authorities and stakeholders at large.

The department is committed to complete the new 5 year strategic term with confidence and pride to improve the lives of the Eastern Cape through the service delivery of transport mandate.

13. Approval and sign off The attached annual financial statements set out on pages 122 to 218 as well as predetermined objectives set out on pages 28 to 55 have been approved by the Accounting Officer.

------------------------------------------------------- Ms I.N Mpolweni Head of Department Date: 30 May 2018

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5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT To the best of my knowledge and belief, I confirm the following:

• All information and amounts disclosed throughout of the annual report are consistent • The Annual report is complete, accurate and is free from any omissions. • The Annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury • The Annual Financial statements (Part E) have been prepared in accordance with modified cash standards and the relevant

frameworks and guidelines issued by National Treasury. The Accounting Officer is responsible for the preparation of the annual financial statement and for the judgements made in this information. The Accounting officer is responsible for establishing and implementing a system of internal control that has been designed to provide reasonable assurance as to the integrity and reliability of the performance, the human resource information and the annual financial statement. The external auditors are engaged to express an independent opinion on the annual financial statements In my opinion, the annual report fairly reflects the operations, performance information, the human resource information and the financial affairs of the department for the financial year ended 31 March 2018. Yours faithfully ________________________________ Ms I.N Mpolweni Head of Department Date: 30 May 2018

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6. STRATEGIC OVERVEW

6.1 Vision

“An efficient, safe, sustainable, affordable and accessible transport system”

6.2 Mission “Provide , facilitate develop, regulate and enhance a safe , affordable and reliable multi modal transport systems which is integrated with land use to ensure optimal mobility of people and goods in support of socio- economic growth and development in the Province of the Eastern Cape”

6.3 Values The values of the Department rest on the pillars of: Commitment : The Department will endeavour to exceed expectations in delivering an efficient, safe, sustainable,

affordable and accessible transport system. The Department will work with urgency and commitment to be successful from employee and department perspectives.

Accountability : At all Times we act with integrity, providing quality service, being reliable and responsible. Teamwork : Working co-operatively and making our work environment fun and enjoyable. We work with one another and our stakeholders with enthusiasm and appreciation. Good Governance: The Department encourages the public trust and participation that enables services to improve. The Department will strive to adhere to the six core principles of good governance i.e:

• Focusing on the Department’s purpose and on outcomes for citizens and service users • Performing effectively in clearly defined functions and roles • Promoting values for the whole department and demonstrating the values of good governance through

behaviour. • Taking informed, transparent decisions and managing risk. • Developing the capacity and capability to be effective. • Engaging stakeholders and making accountability real.

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7. LEGISLATIVE AND OTHER MANDATES

The Department derives its existence and operations from the following legislative mandate and Regulations emanating from the above legislation:

• Constitution of the Republic of South Africa Act, 1996 (No. 108 of 1996)

• White Paper on National Transport Policy (1996)

• National Road Traffic Act (Act No. 93 of 1996)

• Urban Transport Act (No 78 of 1977)

• Eastern Cape Roads Act (No. 3 of 2003)

• Passenger Transportation (Interim Provisions) Act (No 11 of 1999)

• Road Transportation Act (No. 74 of 1977)

• Criminal Procedure Act (No.51 of 1977)

• Public Finance Management Act (No 1 of 1999 and 29 of 1999)

• Public Service Act (No.103 of 1994)

• Skills Development Act (No. 97 of 1998)

• Skills Development Levy Act (No. 9 of 1999)

• Preferential Procurement Policy Framework Act (No. 5 of 2000)

• Employment Equity Act (No. 55 of 1998)

• National Environmental Management Act ( No.05 of 2000)

• Environmental Conservation Act ( No. 107 of 1998)

• Civil Aviation Act (No 73 of 1989)

• National Water Act (No.13 of 2009)

• Occupational Health and Safety Act (including the Construction Regulations) (no 85 of 1993)

• Mine Health and Safety Act (No. 29 of 1996)

• Mineral and Petroleum Resources Development Act (no.28 of 2002)

• National Land Transport Strategic Framework

• Public Transport Strategy and Action Plan (2007)

• National Land Transport Act (2009)

• Division of Revenue Act (1998)

• Learner Transport Policy (2017)

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8. ORGANISATIONAL STRUCTURE

MEC: Transport , Safety and Liaison

Ms. Weziwe Tikana

Accounting Officer

Ms. Irene Mpolweni

DDG: Administration

Mr L Sisilana

Administration

Late Ms N Bono

Community Based Programmes

Mr. GC Conjwa

DDG: Transport Operations and Regulation

Vacant

Transport Infrastructure

Mr. A.Z Soko

Transport Operations

Mr. A De Vries

Transport Regulation

Mr. C Reynolds

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9. ENTITIES REPORTING TO THE MEC The Department has two entities under its control and they are as follows:

Mayibuye Transport Corporation Mandate Ciskeian Corporations Act (Act 18 of 1981) Outputs Provide an affordable bus passenger service to the predominantly rural communities in the erstwhile Ciskei and Border

areas of the Province of the Eastern Cape. Establishment Mayibuye Transport Corporation (MTC) is listed in Schedule 3D of the Public Finance Management Act, No.1 of 1999.

This corporation was established in terms of the Ciskeian Corporations Act (Act 18 of 1981). The main purpose of the Corporation is to provide an affordable bus passenger service to the predominantly rural communities in the erstwhile Ciskei and Border areas of the Province of the Eastern Cape. The Board of Directors is composed of (10) members, whose appointments are approved by the MEC for Roads and Transport. The Chief Executive Officer who was appointed on the 1st September 2006, while the Chief Financial Officer was appointed during the financial year under review.

Nature of operations The Corporation exists as a parastatal bus operation, which provides passenger services in the Amathole District and parts of the Chris Hani District.

Financial Relationships Mayibuye is funded by means of a grant-in-aid, which is reflected under transfer payments in the income statement of the Department. The Corporation submits its budget, business plan, management reports, financial statements and audited financial statements in compliance with the relevant provisions of the Public Finance Management Act.

Government Fleet Management Trading Entity Mandate Treasury Regulation 19 Outputs Provision and management of vehicle fleet

Provide fleet management support to end-users Establishment Cabinet Resolution. See establishment letter from Treasury. Nature of operations Procurement of vehicles

Administration of fleet Repair and Maintenance of vehicles Disposal of obsolete fleet Verification of fleet Development and monitor implementation of fleet management strategies Report on the activities of the entity to the Accounting Officer Management of contract with subsidised vehicles service providers

Financial Relationships

Initial capital investment of R362m was injected to establish the Trading Entity. This includes the buy-back of vehicles from Fleet Africa and the increase fleet to address the shortfall. The Trading Entity will sustain itself through rate card system and by exploring possible investment opportunities.

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PART B: PERFORMANCE INFORMATION 1. AUDITOR GENERAL’S REPORT: PERFORMANCE INFORMATION The AGSA currently performs the necessary audit procedures on the performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported under the Predetermined Objectives heading in the Report on other legal and regulatory requirements section of the auditor’s report.

Refer to page (to be inserted later) of the Report of the Auditor General, published as Part E: Financial Information.

2. OVERVIEW OF DEPARTMENTAL PERFORMANCE 2.1 Service Delivery Environment Together with the Office of the Premier and the Department of Public Works, the department ensured the successful transfer of the roads function to the Department of Transport. The Department has awarded 54 bursaries to external youth to study in the following fields:

• 7 Aviation coming from O.R. Tambo, Alfred Nzo and Amathole • 6 Transport Economics from O.R. Tambo and Amathole • 9 Maritime Studies from Amathole, Sarah Baartman and O.R. Tambo • 20 Transport Engineering from Amathole, Alfred Nzo, Chris Hani, Joe Gqabi, O.R. Tambo and Sarah Baartman.

18 bursary holders graduated in May 2017 inclusive of 7 civil engineers who have now been placed with SANRAL under the school of excellence to be registered as technicians, technologists and engineers. In partnership with SAMSA the department trained 36 young people from Port St Johns as divers and lifeguards. 35 unemployed and qualified Traffic Officers in that were part of our internship programme in order to increase visibility on our roads were appointed The provision of public transport for the inhabitants of the province through bus subsidies continued during the year under review with Mayibuye Transport Corporation, Africa Best 350 and Algoa Bus Company as catalyst towards the mobility and accessibility through quality and affordability transportation system. Furthermore, over 17 612 280. kilometers out of the subsidized were operated benefitting over 13,000 000 passengers, 1992 routes subsidized and approximately 374 882 trips were subsidized. ACSA has since February 2018 taken over the running of the Mthatha Airport. Part of their brief is to ensure that the department is able to attract additional carriers for Mthatha to advance the local economic development strategy of the province. The department of Transport provides scholar transport to 80 572 learners daily to 746 schools across the province, which represents 80% of the total scholar transport demand in the province. A budget of R504 million which has not grown since the last financial year, as a result the department have not been able to increase the number of learners that are in need. The Department has elevated road safety as a key priority as it is about the ‘right to life’, especially given the increasing deaths on roads. The department continues with the activities to curb and reduce corruption at the Driving License centres (DLTC’s) Vehicle testing stations (VTS’s), Registering Authorities (RA’s) and embossers by deregistered non-compliant centers due to the fact that they did not conform to NTRA requirements.

With support from the Road Traffic Management Corporation (RTMC), the department purchased three additional trucks to strengthen law enforcement initiatives and address the challenges posed by stray animals on our roads.

The Department has rolled out TRAFMAN to various Traffic Centres, linking up to the Traffic Infringement Management Centre which plays an integral part in management of traffic fines, analyse fixed camera reports, monitor deployment of patrol vehicles across the road network. The Department through Community Based programme embarked on various projects using EPWP principles which contributed vastly on the creation of 1803 work opportunities as part of socio economic development to minimize inequality gaps.Beneficiaries received training focusing on building certain skills set as per phase 3 of EPWP whilst projects were monitored using EPWP principles as a basis. Car Wash labourers have been developed into SMMEs and 5 cooperatives are formally registered. The Department in collaboration with GFMS are assisting these labourers to exit and become entrepreneurs who can do business with GFMS. GFMS provided 3685 vehicles to 12 departments. The entity is ready to provide the yellow fleet needed for the roads projects through the RT57 .Our LED / SMME Expenditure for 2017/18 financial year is over half a billion and the majority of that expenditure is on Scholar Transport Challenges facing the department are as follows:

• Challenges around the public transport industry caused delays on the implementation of Empowerment, however the department continues to engage with all affected parties with the view to resolve the challenges.

• The department experienced delays during the procurement process of the designs for the Middelburg Traffic Control centre due to the complexity of the project however, engagements with Provincial Treasury for them to provide necessary support for the

22

department to appoint appropriate service providers to deal with the procurement of suitable qualified service providers are ongoing.

• Closing the existing service delivery gap between the 101 000 learners deserving of the scholar transport services and 80 572 currently benefitting is still a gap due to competing priorities.

• The dilapidating Information and Communication Technology (ICT) infrastructure in the department is delaying the improvement of efficiencies in the department especially in district offices and the challenge might worsen when the roads function resides with the department in the 2018/19 financial year if not addressed, the current capacity may not be able to accommodate the number of employees, however LAN refurbishment network has been started at 6 traffic stations and 5 new servers and storage Area Network have been procured . Implementation of services to migrate from the old equipment to the new equipment is still underway.

2.2 Service Delivery Improvement Plan Main services provided and standards

Main Services Actual Customers Potential Customers

Standard of Services

Actual Achievement against Standards

1 Provision of Scholar Transport. Learners Not Applicable Scholar transport has been insourced and 80 572 learners were ferried

2 Promotion of Transport Safety and Compliance.

Road users, schools and communities.

Road Accident Fund

500 schools involved in Road Safety Education.

448 schools involved in Road Safety Education where 95,220 learners were trained in Road Safety Education programmes.

Consultation arrangements with customers

Type of arrangements Actual Customers Potential Customers Actual Achievements 1 MEC’s Transport Coordination Structure

(TRANSMEC) All Key Transport Stakeholders in the Province

Public Transport Industry

1 TRANSMEC was coordinated for the year under review

2 Transport Technical Committee (TTC) All Key Transport Stakeholders in the Province

Private Sector 2 TTC’s meeting coordinated for the year under review with all key transport stakeholders.

3 Transport Forums District Transport Forums have been revived in all districts.

Municipalities and Transport Users

Integration of inputs from municipal IDP’s and infrastructure sector to the Departmental Strategy and annual plans.

23

Batho Pele arrangements with beneficiaries Current /Actual Arrangements Desired Arrangements Actual achievements

1 The Department established a Call centre where recipients of the service and the public at large are assisted in all transport related challenges.

Improved Communication between the Department and its stakeholders

With the assistance of Customer Care complaints and compliments framework, which indicate steps to take when handling complaints, the public is assisted and where necessary redress is applied.

Service Delivery Information Tool

Current /Actual information tools Desired information tool Actual Achievements 1 Service Excellence Effective and efficient departmental Service

Excellence tool adopted and implemented by the Department.

Departmental Service Excellence tool was adopted and implemented by the Department.

Complaint Mechanism

Current /actual complaints mechanism Desired complaints mechanism Actual Achievements

1 A customer care complaints and compliments management framework developed and implemented

Improve citizens satisfaction, determine ways of improvement and development in the departments processes and take necessary action

The department served and satisfy or clarify issues for dissatisfied customers or recipients of the service

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2.3 Organisational Environment The department is recruiting for the vacant posts utilising the organogram of the department. During this period under review, department submitted a request to fill 228 posts for the recruitment process, the department was guided by the protocols of the Provincial Coordinating Monitoring Team (PCMT) established by Office of the Premier to monitor the provincial spending on Compensation of Employees. This necessitated the department submit their Annual Recruitment plans to the Office of the Premier after which a date is set for Departments to make a representation to this structure (PCMT) which then approves or not which posts to be filled. Advertisements of approved posts are then centralized to OTP. The department prioritized funds to ensure that filled posts are adequately provided for and to cater for the critical posts contained in the approved Annual Recruitment Plan. The department is facing challenges in recruiting for critical skills posts, e.g, Engineers, as there is a high vacancy rate in this occupational class due unavailability of suitable and experienced candidates to fill the posts

The department’s approach was in compliance with the EXCO resolution of reducing the compensation of employees in the departmental operations especially on support function focusing on core function.

Staff Categories

Number of posts (with and without Roads)

2012/13 (without) 2013/14 (without)

2014/15 without)

2015/16 (without)

2016/17 (without)

2017/18 (without)

Total staff complement 1,688 1,569 1,600 1,556 1500 1521

Number of professional and managerial posts 351 130 44 258 146 155

Number and managerial posts filled of professional 266 123 34 39 130 131

Number of excess staff 0 0 0 0 0 0

2.4 Key policy developments and legislative changes In 2017/18 the department participated in public participations for the Draft White paper on National Rail policy organised by national Department of Transport. The White paper was presented and we are awaiting from National Department of Transport to approve the White Paper as a working document.

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3. STRATEGIC OUTCOME ORIENTED GOALS The Department has a responsibility of contributing towards implementation of the Provincial Strategic Framework Priority No 2 that is “Building social and economic infrastructure” with the goal of implementing an Integrated Public Transport Network (IPTN) throughout the province. To that end, efforts to integrate existing bus services with the planned rapid public transport network systems in two of the provinces main cities are underway. Some of the key activities towards the attainment of this goal are as follows:

• Integrate Algoa Bus Service (National subsidized service) into the NMBM Rapid Public Transport Network • Increase the number of AB350 buses servicing the Eastern part of the Province from 55 to 166. • Increase the number of Mayibuye Transport Corporation busses from 48 to 66 and further integrate into the Buffalo city

Municipality’s Integrated Public Transport Network • Continuously make efforts to reduce the high fatality rate on the roads of our province by implementing intensive safety and traffic

law enforcement campaigns • To increase the capacity of Mthatha airport • Implementation of the Scholar Transport Programme

The Department’s strategic goals are summarized as follows:

1. Good governance towards an efficient transport system. 2. Integrated transport planning. 3. Accessibility and mobility through a safe transport system. 4. Safe transport environment through the regulation of traffic on transport infrastructure. 5. Economic Empowerment and poverty alleviation through the Transportation Sector.

Details of these outcome oriented strategic goals is are given below. Strategic Goal 1 Good governance towards an efficient transport system. Goal statement Provide enabling business processes and appropriate capacity to the core functions of the department in a

manner that ensures accountability, transparency, sound leadership and efficient management of resources. Provincial Strategic Priority Strengthening the developmental state and good governance Outcome 12. An efficient, effective and development oriented public service and an empowered, fair and inclusive

citizenship Critical Success factors for Strategic Outcome Oriented-Goal No 1:

• Understand and commit to implications for a performance culture • Position the strategic role of HR in service delivery • Break down silos and see the attainment of Departmental objectives as a responsibility of all managers

Strategic Goal 2 Integrated transport planning Goal statement Provides planning for all modes of transport including the movement of goods and passengers to integrate

transport and spatial planning Provincial Strategic Priority Transforming the economy to create jobs and sustainable livelihoods

Outcome 6. An efficient, competitive and responsive economic infrastructure network

Critical Success factors for Strategic Outcome Oriented-Goal No 2:

• Improve spatial and regional focus in planning and allocating resources • Develop capacity for horizontal and vertical coordination and to perform the required planning, designing, implementing and

monitoring of the transportation system.

Strategic Goal 3 Accessibility and mobility through a safe transport system. Goal statement Facilitate the provision of safe, compliant transport services through provincial and national resources in order

to improve the mobility and accessibility of communities particularly those without or with limited access. Provincial Strategic Priority Transforming the economy to create jobs and sustainable livelihoods Outcome 6. An efficient, competitive and responsive economic infrastructure network

7. Vibrant, equitable, sustainable rural communities contributing towards food security for all Critical Success factors for Strategic Outcome Oriented-Goal No 3:

• Encourage collaboration with other Departments such Local Government and Traditional Affairs, Education • Develop capacity for horizontal and vertical coordination

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Strategic Goal 4 Safe transport environment through the regulation of traffic on transport infrastructure. Goal statement To ensure the provision of a safe transport environment through the regulation of traffic on public infrastructure,

law enforcement and the registration and licensing of vehicles and drivers. This includes the management and control of registering of transport operators and the issuing of all licenses and permits required in terms of legislation.

Provincial Strategic Priority Intensifying the fight against crime and corruption. Outcome 3. All people in South Africa are and feel safe


• Improve capacity for MIS on road accidents and fatalities • Encourage collaboration with other Departments such as Roads and Public Works, Health, Education

Strategic Goal 5 Economic Empowerment and poverty alleviation through the Transportation Sector. Goal statement Ensure delivery of accessible services through integrated, socially just, developmental and empowering

practices in order to improve the quality of life of communities within the Province through community development programmes.

Provincial Strategic Priority Transforming the economy to create jobs and sustainable livelihoods. Outcome 4. Decent employment through inclusive economic growth


• Make bold decisions about the appropriate structure of CBT • Ensure that staff in CBT have the necessary capacity to think strategically and innovatively • Involve communities in planning and execution of community based projects

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4. SUMMARY OF PROGRAMMES The following table presents the Programme structure for the Department of Transport:

Programme Sub-Programmes Strategic Goals 1. Administration 1.1 Office of the MEC Good governance towards an efficient transport

system. 1.2 Management of the Department 1.3 Corporate Support 1.4 Departmental Strategy

2. Transport Infrastructure 2.1 Programme Support Infrastructure Integrated transport planning 2.2 Infrastructure Planning 2.3 Infrastructure Design

3. Transport Operations 3.1 Programme Support Operations Accessibility and mobility through a safe transport system. 3.2 Public Transport Services

3.3 Transport Safety and Compliance 3.4 Transport Systems 3.5 Infrastructure Operations 3.6 Scholar Transport

4. Transport Regulation 3.1 Programme Support Regulation Safe transport environment through the regulation of traffic on transport infrastructure. 3.2 Traffic Administration & Licensing

3.3 Operator License and Permits 3.4 Law Enforcement

5.Community Transportation Programmes

4.1 Programme Support Economic Empowerment and poverty alleviation through the Transportation Sector. 4.2 Community Development

4.3 Innovation and Empowerment 4.4 EPWP Co-ordination and monitoring

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5. PERFORMANCE INFORMATION BY PROGRAMMES 5.1 Programme 1: Administration The Administration programme provides the Department with the overall management and administrative, strategic, financial and corporate support services in order to ensure that it delivers on its mandate in an integrated, efficient, effective, and sustainable manner.

The programme is divided into four (4) sub-programmes as follows: 1. Office of the Member of the Executive Council provides sound political leadership towards the implementation of

government priorities. 2. Management of the Department implements overall management and support of the department. 3. Corporate Support provides administrative support to the core functions of the Department 4. Departmental Strategy provides operational support in terms of Strategic planning, Monitoring and Evaluation including

policy development and co-ordination.

Strategic Objectives Planned Targets and Actual Achievements

Strategic Objectives Actual

Achievement 2015/2016

Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018

Deviation from planned target

to Actual Achievement for 2017/2018

Comment of deviations

SO1

100% policy directives are executed

80% - - - -

SO2

Governance and accountability performance level achieved in MPAT

- 2.2 3 1,6 1,4 Not all SMS members completed financial disclosures and submitted to PSC by 31 May of every year,

SO3

Human Resource Management performance level achieved in MPAT

0 0 4 2 2 Finalisation of organisational structure, timeous submission of statutory reports to oversight bodies and Delegations that do not comply with the Public Service Act and Public Service Regulations contributed to underperformance.

SO4

Financial Management performance level achieved in MPAT

0 0 4 2,6 1,4 Payment of invoices within 30 days and the approval of Asset management strategy has resulted into underperformance.

S05

Service delivery improvement plan reviewed once per year

0 1 1 1 -

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Office of the Member of the Executive Council

Performance Indicators - Planned Targets and Actual Achievements per sub-programme

Performance Indicator Actual


Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018


to Actual Achievement for

2017/2018


P1

Policy Speech presented to the Legislature in March annually

1 1 1 1 -

P2

Number of the MEC’s stakeholder engagements

20 28 36 63 (27) School visits during school opening in January, Road Safety awareness’s and Taxi violence that confronted the Province has resulted to increased stakeholder engagements by the MEC.

P3

Number of session to review the Department’s performance against policy issues included in the Policy Speech

7 4 4 4 -

Sub –Programme : Management of the Department Performance Indicators - Planned Targets and Actual Achievements per sub-programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018




P4

Number of management meetings held to monitor implementation of strategic objectives

11 - 20 16 4 The meetings commissioned by MEC would to review departmental performance include Top Management therefore the department could not have more than one Top Management in a month hence the underperformance.

P5

Average MPAT rating level achieved on governance imperatives

0 2.2 3 1,6 1,4 Not all SMS members completed financial disclosures and submitted to PSC by 31 May of every year,

30

Sub –Programme : Corporate Support Performance Indicators - Planned Targets and Actual Achievements per sub-programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018

Deviation from planned target to

Actual Achievement for

2017/2018


P6

Number of days to fill a vacant funded post after advertisement

120 - 90 250 days 160 days Delays on the sitting of panels and issues raised by Labour unions contributed to underperformance.

P7 Number of wellness

programmes implemented

5 - 5 5 - -

P8

Number of human resource development interventions implemented

- - 4 4 - -

P9

Number of organisational development initiatives

3 - 4 3 1 Assimilation of the roads function into the proposed organisational, aligning the proposed structure with the budget as well as protracted consultation as required by DPSA delayed the finalisation of organisational structure

P10 Average number of

days for the payments of creditors

0 - 30 19 days (11 days) -

P11

Actual % spent on budget allocated

99,82% - 100 99,7% 0.003% The under expenditure emanated from the delayed appointment of Engineers under compensation of employees and the technical challenges experienced during procurement stages for the designs and planning for the construction of the Middelburg Traffic Control Centre.

P12

Actual % of Revenue collected on budgeted amount

90% - 100 97% 3% Some of the municipalities are still owing monies collected for 2016/17 and 2017/18 financial years.

P13

Number of projects delivered as per the ICT project plan

- - 3 2 1 The only one supplier who responded towards the procurement of data centre upgrade didn’t meet the specification and the tender was later cancelled.

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Sub –Programme : Departmental Strategy Performance Indicators - Planned Targets and Actual Achievements per sub-programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018


Actual Achievement for 2017/2018


P14

No of performance reports submitted to relevant authorities in terms of the Treasury Regulations

6 - 6 6 -

P15

No of statutory documents developed to implement the Department’s 5 year Strategic Plan

3 - 4 4 -

P16 No. of key service

delivery projects monitored

3 - 3 3 -

P17

No of status reports to departmental provincial and national policies

4 - 4 4 -

Strategy to overcome areas of under performance P5: All SMS members will complete financial disclosures and submitted to Public Service Commission by 31 May of every year as required. P6: The department will projectise filling of vacant funded posts and ensure that program managers adhere to set timeframes. Any deviation will be report to the Accounting officer. P12: Letters were written to municipalities with outstanding balances and meeting were held with them and they promise to pay. The department further presented the outstanding balances by municipalities to the ENUG as a result some are paying the outstanding monies in instalments. The department requested Provincial Treasury to intervene. P13: The department is currently busy with procurement process of re advertising Data centre service and to address the issue of one supplier responded during procurement by ensuring that it relaxes the specification. Changes to planned targets P9: The target for the indicator is 3 i.e Job Evaluation, Organisational Structure and Change Management instead of 16 however there was a printing error during the printing of statutory documents.

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Linking performance with budget

Sub-Programme

2017/18 2016/17

Final Appropriation

Actual Expenditure

(Over)/Under Expenditure

Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000 1 Office of the MEC 10,942 10,924 18 9 953 9 861 92

2 Management of the Department 30,317 30,217 100 25 691 25 685 6

3 Corporate Services 240,771 240,490 281 239 145 238 978 167

4 Departmental Strategy 12,636 12,624 12 8 179 8 162 17

TOTAL 294,666 293,585 411 282 968 282 686 282

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5.2 Programme 2: Transport Infrastructure The main purpose of this programme is to ensure that transport policy and planning occur within a single comprehensive and integrated programme with mutual support between all disciplines of transport and land use. This includes planning for the provision of transport services, facilities and infrastructure including provision of support and co-ordination of the Integrated Transport Planning at the local sphere.

The programme is divided into three (3) sub-programmes as follows:

• Programme Support facilitates the governance of the programme and the attainment of the programme objectives.

• Infrastructure Planning maintains a Provincial Land Transport Framework (PLTF) as an overall guide to transport planning within the Province.

• Infrastructure Design undertakes traffic engineering to contribute to a holistic road traffic management strategy in support of an environment that is conducive to a safe transport system.




Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018




SO6

Number of Annual Plans developed for the programme in line with the Department’s 5 year plan

- - 2 2 -

SO7

Provincial Land Transport Framework (PLTF) maintained as an overall guide to transport planning within the Province

1 1 1 1 -

SO8 Number of designs

for transport –related infrastructure

2 0 4 4 -

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Programme Support Infrastructure Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


P18

Number of strategic sessions held to develop and monitor programme plans.

2 2 2 0 2 The strategic session could not be held due to the fact that the department awaited for Roads function to be officially transferred to the department so that 2018/19 plan could incorporate Roads inputs.

P19

Number of programme performance reports to Monitoring and Evaluation Unit

4 4 4 4 -

Infrastructure Planning Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018




P20

Number of transport plans developed towards implementing the Provincial Land Transport Framework (PLTF)

4 3 2 2 -

P21

Number of system design developed towards the phased implementation of Integrated Pubic Transport Master Plan

3 0 5 4 1 Queenstown to Mthatha via R61 not done pending completion of the simultaneous Empowerment exercise currently underway.

P22

Number of data gathering projects for transport planning

1 1 1 1 -

P23 Number of road

safety assessment projects

3 3 3 3 -

P24

Number of engagements with relevant authorities.

12 16 8 8 -

35

Infrastructure Design Performance Indicators-Planned Targets and Actual achievements per sub- programme

Performance Indicator

Actual Achievement

2015/2016

Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018




P25

Number of designs for public transport facilities

0 1 1 1 -

P26

Number of design for law enforcement facilities

0 0 3 2 1 The third design was for Middelburg Traffic Control Centre however it could not be done due to the limitation of scope during procurement process.

Strategy to overcome areas of under performance P18: This will be undertaken during this year (inclusive of the Roads function) in preparation for the term starting in 2019. P21: Systems design for Queenstown to Mthatha via R61 will only be considered in outer years after the completion of the Empowerment exercise being conducted by the Department. P26: This will be done during this financial year with SANRAL as an Implementing Agent (IA) as mandated by Provincial Treasury in the Department’s budget allocation letter.

Changes to planned targets None Linking performance with budget

Sub-Programme

2017/18 2016/17 Final

Appropriation Actual

Expenditure (Over)/Under Expenditure

Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000 1 Programme Support Infrastructure 1,385 757 628 1 384 1 304 80 2 Infrastructure Planning 13,888 9,664 4,224 10 540 8 129 2 411 3 Infrastructure Design - - - 659 600 59 TOTAL 15,273 10,421 4,852 12 583 10 033 2 550

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5.3 Programme 3: Transport Operations The main objective of this programme is to plan, regulate and facilitate the provision of integrated land transport services through coordination and co-operation with national and local authorities, as well as the private sector in order to enhance the mobility of all communities, particularly those without or with limited access. The programme is divided into six (6) sub-programmes as follows:

1. Programme Support facilitates the governance of the programme and the attainment of the programme objectives. 2. Public Transport Services provides management of integrated land transport to provide mobility to the commuters. 3. Transport Safety and Compliance manage/co-ordinate and facilitate the transport safety and compliance in all modes with

related legislation and policies through pro-active and re-active tactics and strategies 4. Transport Systems ensures that there is collaboration between the various stakeholders in the province to promote rail and

maritime services as modes of transport. 5. Infrastructure Operations manages provincial airports. 6. Scholar Transport assists with the transportation of learners walking an excess of 3km to access schools inline with the National

Draft Scholar Transport Policy.




Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018


to Actual Achievement for 2017/2018.


SO9


- 2 2 2

SO10

Number of kilometers operated by operators receiving financial assistance

16,525 325.1 18,418,911.14 16,856,444 17 602 159,70 (745 715) The reasons for overachievement is because our projections were incorrectly captured during printing: Algoa annual target is 12 307 200 and minus that from 16 856 444 the remainder is 4, 549,244 and both Mayibuye and AB350 could not share 4, 549,244 This was only discovered during reporting as the target is an annual target

SO10

Number of road users reached through transport safety interventions

109,237 206 580 165 000 309,817 (144,817) The target has been reached and exceeded due to more activities than planned such as Centenary Celebrations of OR Tambo and integrated Road Safety awareness campaigns with Road Traffic Management Corporation (RTMC) and National Executive of Youth in Transport.

SO11

Number of Provincial owned airport complaint with South African Aviation Regulation

2 2 2 2 -

SO12

Number of learners transported from the scholar transport scheme

68,519 76 925 80 000 80 572 (572) Rationalization of schools done by Department of Education and interventions have resulted to additional learners ferried .

37

Performance Indicators-Planned Targets and Actual achievements per sub- programme Programme Support Operation


Actual Achievement

2015/2016

Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


P27

Number of strategic sessions held to develop and monitor programme plans

2 2 2 1 1 The Programme did not conduct the strategic plan session as targeted due to the fact that after Departmental Strategic Plan, it transpired that Safety is the major focus in 2018/19 financial year and the programme decided to rather focus its efforts on Transport Safety Strategic Session in Sarah Baartman from the 8th to the 10th March 2018.

P28

Number of Programme performance reports to Monitoring and Evaluation.

4 4 4 4 -

Public Transport Services Performance Indicators-Planned Targets and Actual achievements per sub- programme


Actual Achievement

2015/2016

Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


P29

Number of routes operated under the Provincial Integrated Public Transport Master Plan (PIPTMP).

0 0 1 0 1 The Department with the industry agreed to start with capacity and empowerment before starting to implement master plan. The service provider for capacity and empowerment of the public transport industry has been procured.

38

SECTOR INDICATORS P3

0 Number of routes subsidized.

2,158 1,973 2 100 2260 (160) The over-performance is due to the inclusion of the performance of AB350 who also receive subsidy from the department . The indicator does not specify that the performance for reporting will only focus on Public Transport conditional grant

P31

Number of kilometers subsidized

9 637 720.7

10,576,122.4 12 307 200 15 221 936.7 (2 914 736.7) The performance has included the performance of AB350 since it also receive subsidy from the department hence over performance

P32

Number of trips subsidized. 343,746 377, 468 569 173 451 343 117 830 Algoa Bus Company had conducted ongoing amendments of routes in order to ensure that the service rendered is viable, the National Bus Strike in April 2017, service delivery unrest in the Northern areas in Port Elizabeth from 11-12 May and in the Motherwell surroundings from 20-21 June respectively. Algoa Bus Company operated the Christmas Service Timetable in December 2017 resulting in the reduction of service within its area of operations. Furthermore, there had been a few, but consistent misbehavior challenges by dispatchers and bus drivers who would either fail to cover or complete trips respectively. As a result, the company had to pay the penalties .

Transport Safety and Compliance Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018




P33

Number of cooperatives engaged to monitor progress on transformation

12 0 12 0 12 The department targeted “Number of corporative engaged to monitor progress on transformation and the performance was on awareness which does not talk to the indicator and the technical indicator.

P34

Number of road safety awareness interventions conducted

3 3 3 3 -

P35

Number of schools involved in road safety education programmes

503 452 500 447 53 The underperformance is due to vehicle breakdowns and 1 resignation and official involved in injury on duty.

39

Infrastructure Operations Performance Indicators-Planned Targets and Actual achievements per sub- programme


Actual Achievement

2015/2016

Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018




P36

Number of assessments conducted in Bhisho airport to ensure compliance with CAA requirements.

16 16 16 16 -

P37

Number of assessments conducted in Mthatha airport to ensure compliance with CAA requirements.

16 16 16 15 1 The contract for the appointed official who was responsible for maintenance at Mthatha Airport has expired in January 2018 and the department could not appoint due to the fact that it has already started with the recruitment process and no competent person within the department could act for the period under review.

P38

Number of Maritime initiatives

1 2 2 0 2 The department reported on the 2 initiatives as being achieved since but upon verification it was found to have been partially achieved.

Scholar Transport Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


P39

Number of schools benefitting from scholar transport scheme

0 745 738 746 8 Rationalization of schools done by Department of Education and interventions have resulted to additional schools.

P40

Number of transport operators capacitated on the requirements for the scholar transport scheme

0 1520 1 929 998 931 Only 998 operators attended the capacitation despite bulk short message service (sms) invitations

40

Strategy to overcome areas of under performance P30-32: The programmes will revise the target so that it could talk to baseline. P35: The permanently allocated vehicle utilised by the Road Safety staff are due for replacement during the financial year 2018/19. New vehicles will be sought. Critical vacant posts will be filled.

P37: The department has started recruitment process to appoint maintenance officer for Mthatha Airport

Changes to planned targets P33: Number of cooperatives engaged to monitor progress on transformation has been rephrased after printed Annual Performance Plan to be read as Number of engagements to monitor progress on transformation hence the performance.

Linking performance with budgets

Sub-Programme

2017/18 2016/17 Final



Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000 1 Programme Support 11,583 11,555 28 7 892 7 869 23

2 Public Transport Services

500,678 500,001 677 475 766 472 648 3 118

3 Transport Safety and Compliance

56,302 56,293 9 55 868 55 868 -

4 Infrastructure Operations

50,040 50,037 3 51 367 51 177 190

5 Scholar Transport 521,539 521,517 22 483 892 485 848 (1 956) TOTAL 1,140,142 1,139,403 739 1 074 785 1 073 410 1 375

41

5.4 Programme 4: Transport Regulation The objective of the programme is to ensure the provision of a safe transport environment through the regulation of traffic on public roads, law enforcement and the registration and licensing of vehicles and drivers.

The programme is divided into four (4) sub-programmes as follows: 1. Programme Support facilitates the governance of the programme. 2. Transport Administration and Licensing facilitates the implementation of laws and regulations relating to vehicle registration,

licensing and compliance. 3. Operator License and Permits facilitate the registering of Public transport vehicles and operators. 4. Law Enforcement maintains law and order on the roads through the enforcing of traffic laws and regulations.




Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


SO14


- 2 2 2 -

SO15

Number of licensing authorities conforming to the prescripts of the NRTA to prevent Fraud and Corruption

205 235 232 222 10 VTS’s from Mthatha, Butterworth, Port Elizabeth and East London had to be deregistered due to the fact that they did not conform to NTRA requirements which includes corruption.

SO16

Number of operating licenses issued

2,004 8,957 6,600 5 608 992 Because of Taxi violence in the province around Maclear Strekspruit and Mthatha the department had to declared moratorium on new applications to curb Taxi violence which is caused by over supply.

SO17

Number of traffic law enforcement operations conducted

31,040 26,056 12,088 24,458 (12 370) The over performance was due to intensified Law Enforcement operations triggered by Taxi Violence in the OR Tambo, Chris Hani and Joe Gqabi Districts. 1

1 The figure include other Law Enforcement operations that are measured at indicator level.

42

Programme Support Regulation Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


P41

Number of strategic sessions conducted.

2 5 2 0 2 The provided evidence was not talking to the technical indicator description which is to develop and review Annual performance Plan and Operational Plan

P42

Number of performance support interventions

4 7 3 3 -

P43

No. of performance reports submitted to Monitoring and Evaluation

4 4 4 4 -

Transport Admin and Licensing Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


P44

Number of Compliance Inspections conducted.

205 237 232 222 10 VTS’s from Mthatha, Butterworth, Port Elizabeth and East London had to be deregistered due to the fact that they did not conform to NTRA requirements which includes corruption.

P45

Number of Licensing Stakeholder engagements.

4 3 4 4 -

43

Operator License and Permits Performance Indicators-Planned Targets and Actual achievements per sub- programme


Actual Achievement

2015/2016

Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


P46

Number of PRE hearings conducted

9 40 72 38 2 The number of PRE Sittings are dependent on the number of applications received therefore there has been less sitting due to less applications.

P47

Number of abnormal loads permits issued.

3,212 4,285 4,800 2,701 2,099 The number of Abnormal Loads Permits issued are dependent on the number of applications received. There was a decrease in applications received from wind turbine farms as most farms were established in 16/17 financial year.

Law Enforcement Performance Indicators-Planned Targets and Actual achievements per sub- programme


Actual Achievement

2015/2016

Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


Standardised Sector Indicators

P48

Number of speed operations conducted.

2,296 2,820 2 642 2179 463 The resource for speed operations were redirected to assist with Taxi violence in O.R Tambo, Chris Hani and Joe Gqabi Districts hence underperformance

P49

Number of vehicles weighed

11,572 19,531 4224 14,262 (11 620) There was an influx of freight vehicles in the province which caused more operations to be conducted.

P50

Number of drunken driving operations conducted

422 577 552 713 (161) The over performance was due to intensified Law Enforcement operations triggered by Taxi Violence in the OR Tambo, Chris Hani and Joe Gqabi Districts.

P51

Number of vehicles stopped and checked

1,122,602 1,082 215 1, 080 000 1 086 505 (6 505) The over performance was due to intensified Law Enforcement operations triggered by Taxi Violence in the OR Tambo, Chris Hani and Joe Gqabi Districts.

P52

Number of public transport operations conducted

2,945 3,128 750 3, 007 (2257) The over performance was due to intensified Law Enforcement operations triggered by Taxi Violence in the OR Tambo, Chris Hani and Joe Gqabi Districts.

P53

Number of law enforcement facilities improved

0 1 7 2 5 Pakade Traffic Station: The project is 83,3% complete and the remaining percentage will be finalized during 2018/19 financial year.

44

Strategy to overcome areas of under performance

P44 - The programme will assist the non-compliant Vehicle testing stations to adhere to the NRTA requirements. P46 - Target to be reviewed to the baseline for the outer years as this target is dependent on applications received by public transport operators. P47 - Target to be reviewed to the baseline for the outer years as this target is dependent on applications received from the members of the public. P53 – The programme will engage Supply Chain Management to conduct Suppliers Day for Infrastructure suppliers on basic requirements for infrastructure procurement.

Changes to planned targets None Linking performance with budgets

Sub-Programme

2017/18 2016/17 Final



Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000

1 Programme Support Regulation

14,448 14,448 - 3 558 3 399 159

2 Transport Admin and Licensing

12,278 12,276 2 10 682 10 583 99

3 Operator License and Permit

10,095 10,088 7 10 507 10 454 53

4 Law Enforcement 300,765 300,533 232 293 505 293 816 (311)

TOTAL 337,586 337,345 241 318 252 318 252 -

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Programme 5: EPWP/Community Based Programmes (Transportation) The objective of the programme is to ensure delivery of accessible services through integrated, socially just, developmental and empowering processes in order to improve the quality of life of communities within the province by way of community development programmes.

The programme is divided into four (4) sub-programmes as follows: 1. Programme Support facilitates the governance of the programme and the attainment of the programme objectives. 2. Community Development facilitates implementation of community supported transportation service delivery projects through

identification and creation of work opportunities 3. Innovation and Empowerment It provides for SMME development and facilitate entry of SMMEs into the main stream economy

over the MTSF period. 4. Sector Co-ordination and Monitoring reports and assesses impact of all EPWP Projects implemented by the Department.




Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


SO18


- 2 2 2 -

SO19

Number of work opportunities created and sustained through Community Based

1,208 1,478 50 130 1 803 48 327 Target for work opportunities created is 1503 however there was a printing error during the printing of statutory documents that indicated 50130.

SO20

Number of SMME’s established over the period of 5 Years

0 5 0 0 -

SO21

Number of impact assessment conducted

- 0 0 0 -

Performance Indicators-Planned Targets and Actual achievements per sub- programme Programme Support



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018




P54

Number of strategic sessions conducted.

2 2 2 1 1 The programme could not hold strategic plan session due to the fact that it awaited the transfer of Roads function inclusive of Expanded Public Works Programme so that 2018/19 plans could include inputs from EPWP.

P55

Number of Programme specific performance reports submitted to Monitoring and Evaluation Unit

4 4 4 4 -

46

Community Development Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018 Actual Achievement

2017/2018

Deviation from planned

target to Actual

Achievement for 2017/2018

Comment of

deviations

P56

Number of work opportunities created through the Road Ranger project

688 736 836 836 -

P57

Number of work opportunities created through the pilot Car Wash Projects in conjunction with the Government Fleet Management Trading Entity

137 137 137

137 -

P58

Number work opportunities created through the maintenance of transport facilities

233 135 143 143 -

P59

Number of work opportunities created through road safety initiatives

160 174 264 264 -

P60

Number of work opportunities created through community based support programmes

0 0 143 143 -

Innovation and Empowerment Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018

Deviation from planned

target to Actual

Achievement for 2017/2018


P61

Number of SMMEs established

0 5 5 0 5 During the year under review, there was no target to establish SMME‘s, it was targeted during 2016/17 financial year however a human error occurred during the printing of statutory documents. Refer to Strategic Objective SO 20.

P62 Number of training

sessions conducted. 9 9 9 9 -

47

EPWP Coordination and Monitoring Performance Indicators-Planned Targets and Actual achievements per sub- programme



Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018



2017/2018


P63

Number of Departmental projects aligned to EPWP principles and guidelines

6 6 6 6 -

Standardised Sector Indicators

P64

Number of jobs created.

1,208 1478 1 503 1803 (300) The programme created more jobs on Walking Bus, Scholar Transport Monitors, Weekend Road Rangers, Grid Gates, Safe Animal Crossing, Roadside through the Incentive grant hence the variance.

P65

Number of full-time equivalent (FTE’s)

98 101 1350 331 1 019 The programme has targeted 123 but there was an error during printing of statutory documents. The programme implemented new strategy of creating more full time equivalents in order to get more Incentive grant funding for creation of more work opportunities.

P66

Number of youths (18-35) employed.

406 520 670 780 (110) The programme targeted more youth during recruitment on the new projects as per Phase 3 principles hence 110 variance

P67

Number of women employed.

355 557 655 750 (95) The programme targeted more women during recruitment on the new projects as per Phase 3 principles that resulted on the 95 variance

P68

Number of people living with disabilities

8 10 13 18 ( 5) The programme targeted more persons with disability during recruitment on the new projects as per Phase 3 principles as such we exceeded by 5.

48

Strategy to overcome areas of under performance P61: There was no target to establish SMME‘s during the year under review, it was targeted during 2016/17 financial year however a human error occurred during the printing of statutory documents. Refer to Strategic Objective SO 20.

P65: Target for full time equivalent was incorrectly captured during the printing of statutory document, the correct target was 123 instead of 1350.

Changes to planned targets None

Linking performance with budgets

Sub-Programme

2017/18 2016/17 Final



Final Appropriation

Actual Expenditure


R’000 R’000 R’000 R’000 R’000 R’000

1 Programme Support 1,972 1,961 11 2 106 2 106 -

2 Community Development

39,504 39,504 - 42 690 42 684 6

3 Innovation and Empowerment

3,220 3,219 1 4 014 4 013 1

4 EPWP Coordination and Monitoring

10,841 10,831 10 6 300 6 288 12

TOTAL 55,537 55,524 22 55 110 55 91 19

Government Fleet Management Services The objective of the Entity is to provide a reliable and cost-effective fleet and fleet management services for the government of the Eastern Cape.




Actual Achievement

2016/2017

Planned Target

2017/2018

Actual Achievement

2017/2018




S023

Percentage of leased vehicle availability

90% 98% (747254/ 760012)

95% 95% (724431/760078)

49

Performance Indicators-Planned Targets and Actual achievements per sub- programme


Actual Performance 2015/16

Actual Performance

2016/17

Planned Targets 2017/18

Actual Achievement

2017/18

Deviation from

planned target to actual

achievement for 2017/18

Comments of deviation

P69 Percentage of vehicles

availability (of leased fleet)

94% 95% 95% -

P69

Percentage of leased vehicles that are compliant

79% 90% 78% 2236/2879

12% Due to delays with confirmation of vehicle replacement requirements by User Departments, GFMS ordered 394 vehicles in September and October 2017 (making up for two quarters). In-line with contract delivery timelines the vehicle deliveries started in late November and early December (December Holiday) finishing in January 2018. The RT46 E-fuel Service Provider responsible for the production of the Fuel mechanism were unable to supply sufficient E-fuel mechanism and a further bottleneck was the contracted capacity of RT46 E-fuel technicians who could only install 5 vehicles a day. The mentioned delays resulted in GFMS not being able to replace non-compliant vehicles timeously.

P70

Percentage of leased vehicles serviced on scheduled service intervals

81% 90% 45% 2224/4978

45%

The Service Level Agreement between GFMS and User Departments stipulate that Departments must ensure that the vehicles that are due for their scheduled service at the OEM accredited service provider are serviced on time. However User Departments are not adhering to the service parameters as per OEM standards due to the absence of transport officers within User Departments dedicated inter alia for timeously scheduling of servicing of vehicles

P71 Financial Maturity Index

achieved - 3 2.97 0.03 Finance policies were not reviewed due to

inadequate human resources

P72 Human Resources

efficiency index - 3 2 1 Non provision of fully fledged human

resource services due to temporal organisational structure

P73

Percentage of customer satisfaction survey score

- 75% 50% 25% The survey analysis highlighted the following areas which respondents felt was not been handled timeously by GFMS; Replacement of vehicles, authorisation on vehicles repairs and licencing of vehicles Whilst there are systemic challenges within GFMS some of the rating by User Departments are as a result of a lack of proper understanding of the different responsibilities between user departments and GFMS.

P74

Number of provincial abuse cases resolved reports

- 12 10 2 The escalation reports for the first two months were sent at the end of the first quarter as opposed to monthly due to a misunderstanding of a Technical Indicator Descriptor.

50

Strategies to overcome areas of underperformance

P69: A formal request was done to the Service Provider for more technicians to address backlog Specification requirements for the new RT46 contract have been modified to increase the contractual number of technicians to improve efficiency. P70: Conduct awareness sessions on fleet maintenance and highlight possible risks for not taking vehicles for service. P71 : Finance policies will be reviewed within the new financial year 2018/19. P72 : Development and implementation of responsive Organisational Structure Development P73: An improvement plan will be developed addressing systematic challenges. GFMS is visiting districts to educate the transport officers/ fleet managers on roles and responsibilities of GFMS and user departments

51

6. Transfer payments excluding public entities 6.1 Public Entities

Name of Public Entity Services rendered by the public entity

Amount transferred to the public entity

Amount spent by the public entity

Achievements of the public entity

1 Mayibuye Transport Corporation

Provision of public transport services 117 704 111 704 -

6.2 The table below reflects the transfer payments made for the period 1 April 2017 to 31 March 2018:

Name of transferee Purpose for which the funds were used

Compliance with s 38 (1) (j) of the PFMA

Amount transferred

(R’000)

Amount spent by the

entity

Reasons for the funds unspent by

the entity

1 Provincial DA:Taxi Council (SANTACO)

Professionalization of Taxi Industry Yes 1 883 1,883 -

2 Africa Best 350 Ltd Provision of public transport services

Yes 139 115 138 467 648

3 Algoa Bus Company Pty.Ltd Yes 231 252 231 252 -

4 Bus Operators - - - - - 5 Households Yes 18 487 18 487 -

7. Conditional Grants and Earmarked funds paid Department who transferred the grant National Department of Transport Purpose of the grant Financial assistance towards an efficient, safe, reliable and affordable Public Transport system.

Creation of employment opportunities and poverty alleviation of poverty. Expected outputs of the grant Transportation of passengers and creation of job opportunities. Actual outputs achieved 10 553 999,60 of vehicle kilometres subsidised Amount per amended DORA 236,176m Amount received (R’000) 236,176ml Reasons if amount as per DORA not received N/A Amount spent by the department (R’000) 236,172m Reasons for the funds unspent by the entity 4m in respect of EPWP Monitoring mechanism by the receiving department

The Department has a board representative on Algoa Bus Company and IYM for EPWP.

8. Donor Funds received Name of donor TETA,RTMC,PSETA Full amount of the funding 1,278m Period of the commitment Current Financial Year Purpose of the funding Training of staff

Expected outputs Increased level of training Actual outputs achieved Increased level of training Amount received in current period (R’000) 1,278m

Amount spent by the department (R’000) 6,459m Reasons for the funds unspent

Monitoring mechanism by the receiving donor

Entered into SLA with various service providers for training purposes.

52

9. Capital investment, maintenance and asset management plan 2017 /2018 2016/2017

Infrastructure projects

Final Appropriation

R’000

Actual Expenditure

R’000


R’000

Final Appropriation

R’000

Actual Expenditure

R’000


R’000 New and replacement assets 54 482 53 222 1 260 Aid assistance - 4 072 -

- Existing infrastructure assets

10 571 5 882 4 689 12 043 12 029 14

- Upgrades and additions 7 138 3 612 3 526 - Rehabilitation, renovations

and refurbishments - - - - - -

- Maintenance and repairs 3 433 2 270 1 163 - - - Current - - - - - -

- Capital - - - - - - - Total 65 053 63 176 5 949 12 043 12 029 14

10. Departmental receipts

Departmental receipts 2017/2018 2016/2017

Estimate Actual Amount Collected

(Over)/Under Collection Estimate Actual Amount

Collected (Over)/Under

Collection R’000 R’000 R’000 R’000 R’000 R’000

Tax Receipts Motor vehicle license 638 312 619 615 18 697 728228 614 072 114 1566

Sale of goods and services other than capital assets 22 935 23 238 (303) 21637 29 738 (8101)

Fines, penalties and forfeits 7 046 5 203 1 843 17358 6 635 10723

Interest, dividends and rent on land 1 040 - 1 040 2225 0 2225

Sale of capital assets - - - 0 0 0

Financial transaction in assets and liabilities. 699 484 215 1242 658 584

TOTAL 670 032 648 540 21 492 770 686 651 103 119 583 Reasons for under collection The under collection is due to the fact that some municipalities did not pay over some of the monies collected for Motor Vehicle Licensing during 2017/18 financial year. Furthermore the offenders did not pay the traffic fines as anticipated. The company that was supposed to have paid the department R7.50 for each blanker for motor vehicle registration number plate to whom it sells the product in the territory. The unit have tried to contact the company but in vain and have referred that to legal section. The under collection on debts is due to the fact that some of those debts are for retired employees and those that have passed on. Measures taken during the year to keep on track Letters and meeting were held with those defaulting municipalities and some have offered to pay the outstanding debts in instalments whist also paying the current collections. Those that are still not paying the department is planning take the function or not supply them with the face value documents until they pay the outstanding amounts. Those that are not traceable the department will consider writing off those debts as per departmental debt write off policy. The department requested Provincial Treasury to intervene

53

PART C: GOVERNANCE 1. INTRODUCTION Commitment by the Department to maintain the highest standards of governance is fundamental to the management of public finances and resources. User want assurance that the Department has good governance structures in place to effectively, efficiently and economically utilise the state resources, which is funded by the tax payers.

2. RISK MANAGEMENT The department has in place the risk management policy and the risk management strategy which guides the implementation of the policy. The department as part of implementing its risk management strategy has continued to identify and assess strategic and operational risk which might affect the department’s ability to achieve its objectives. The department continues to identify emerging risks and present them to the top management.

The department has established a risk management committee with an independent external chairperson. The Committee meets at least on a quarterly basis and assesses the effectiveness of the department’s risk management systems, practices and procedures, and provides recommendations for improvement, and furthermore the chairperson of the Risk Management committee also report to the Accounting officer and Audit Committee on the effectiveness of risk management in the department. The Risk management function has continued to present during the strategic planning sessions on the effectiveness of risk management in the department. Furthermore internal audit unit as part of their operational plan audits the risk assessment process and reports to the audit committee. The Risk Management function is included in the performance agreements of senior management. Risk coordinators were appointed for the department and its districts. The department had experience regression in the Implementation of action plans due to, amongst other things, budget constraint. However, it was agreed by management that most of the action plans will deferred to the new financial year. The department has also set up working teams for receiving the roads function and the emerging risks from the Transfer have been identified and continuously reported to the Risk Management Committee and Audit Committee on a quarterly basis.

3. FRAUD AND CORRPUTION Fraud and Corruption The department has recently reviewed its Fraud Prevention Plan, Fraud Prevention policy and Whistleblowing policy. The departmental fraud prevention policy is implemented through its implementation plan which is reviewed annually. The Fraud Prevention Implementation Plan covers the four pillars as prescribed in the Public Sector Anti-Corruption Strategy.

• Preventing Fraud and Corruption The department conducted fraud and corruption awareness sessions to newly appointed officials, this is done to encourage employees to report incidents of corruption and promote whistleblowing policy. Security Management Component has facilitated the pre-employment screening and security vetting of potential employees, on order to minimize the risk of appointing tainted or potentially corrupt officials.

• Detecting Fraud and Corruption The department has a whistleblowing policy which seeks to encourage employees to report incidents of fraud and corruption without fear of victimization. The department conducts detection reviews on high risk areas as highlighted in the departments fraud risk register. Incidents of corruption are reported through the National Anti-Corruption Hotline, Presidential Hotline, the Office of the Public Protector and walk-ins. Department maintains a database where all incidents of corruption are captured. Thisis done to ensure accurate recording, categorization and tracking progress on cases reported to the department and to provide statutory reports to the Public Service Commission, Office of the Premier and Provincial Treasury.

55

• Investigating Fraud and Corruption Investigations are done to ensure that all reported cases are investigated and resolved in good time, collaborating with Law enforcement agencies where necessary and ratification of recommendations in investigation reports by Legal Services.

• Resolution of Fraud and Corruption Investigation reports are approved by the Head of Department and forwarded to Corporate Services for implementation and instituting of disciplinary action against implicated person and where necessary, recovery of losses incurred by the department and to the South African Police Service for criminal prosecution.

4. MINIMISING CONFLICT OF INTEREST • Awareness workshops are held at Districts and HO on management of conflict of interests. • Disclosure of interest is done by SMS members in terms of SMS Handbook • Additional disclosure of gifts/sponsorship/donations as per the Departmental policy for all staff. • Disclosure of interests in procurement and recruitment processes. • Implementation of EXCO resolution on prohibition of trading by Provincial public servants with the departments and their entities. • The awarding of bids is done after PERSAL verification clearing the bidders as non-staff members of Provincial Departments.

5. CODE OF CONDUCT OUR COMMITMENT TO THE PUBLIC SERVICE CODE OF CONDUCT

Our Relationship with the legislature and executive

As employees of the Department of Transport we diligently affirm our commitment to: • Be faithful to the Republic and honour the constitution • Put the public interest first • Loyally execute the policies of the Government • Strive to be faithful to statutory requirements and instructions • Co-operate with public institutions in promoting public interest Our Relationship with the public

As employees of the Department of Transport we diligently affirm our commitments to: • Promote the unity and well-being of the South African Nation • Be unbiased and impartial • Be polite, helpful and reasonably accessible and maintain high service standards • Have regard for the circumstances and concerns of the public • The development and upliftment of all South Africans • Not unfairly discriminate against any member of the public • Not abuse our positions as Public Servants • Respect and protect every person’s dignity and rights • Recognise the public’s right to information except where protected by law Our Relationship with Our Colleagues

As employees of the Department of Transport we diligently affirm our commitments to: • Co-operate fully with other colleagues to advance the public interest • Execute all reasonable instructions by the person’s officially assigned to give such • Refrain from favouring friends and family and not abuse our authority nor be unduly influenced • Use the appropriate channels to air any grievances or make direct representations • Committed to development, motivation and utilisation of our staff and promote sound labour relations • Deal fairly, professionally and equitably with colleagues • Refrain from party political activities in the workplace

56

Performance of our Duties

As employees of the Department of Transport we diligently affirm our commitments to: • Strive to achieve objectives of our Department cost effectively and in the public interest • Be creative in thought in the execution of our duties • Be punctual in the execution of our duties • Professionally and committed in our duties • Not engage in any action or transaction in conflict with the execution of our duties • Recuse ourselves form any official action or decision making and self-development throughout our careers • Be honest and accountable when dealing with public funds • Promote sound, efficient, effective, transparent and accountable administration • Report, fraud, corruption, nepotism and maladministration • Give honest and impartial advice • Honour confidentiality Our Personal Conduct and Private Interest

• Dress and behave in a manner that enhances the public service during official duties • Act responsibly in the use of alcohol or intoxicating substances • Not use our position to obtain gifts or benefits for ourselves or accept such that can be construed as bribes • Not disclose official information for personal gain or the gain of others • Not without prior approval undertake remunerative work outside official duties or use official equipment for such work.

6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES This is extensively dealt with under the Employee Wellness Programme in Part D: Human Resource Management.

7. PORTFOLIO COMMITTEE DATE ACTIVITY CONSIDERED

11 April 2017 and 09 May 2017 Budget Vote overviews - Governance matters

- Projects for the department

- Transportation issues and scholar transport programme

- Traffic issues - - Job creation issues

- Fleet issues

- Public Transport industry matters

27 June 2017 Petitions

17 August 2017 First quarter report

17 September 2017 Petitions

09 November 2017 and 24 November Financial oversight report

6 December 2017 to 07 December 2017 Public participation)

57

8. SCOPA RESOLUTIONS Resolution

No. Subject Details Responses by the department Resolved (Yes/No)

Letter dated 26 March 2018

Report of the Auditor General on the financial statements of Vote 10 -Department of Transport for the year ended 31 March 2017.

Irregular expenditure has been repeat finding in the last 3 consecutive years including the year under review, The Accounting officer has failed to comply with 38 (1)(c) (ii) of PFMA

A team headed by Legal services was appointed to further investigate old and current cases of irregular, fruitless expenditure. The committee was expanded by appointing members with proxy status in order for the committee to quorate. Internal Audit developed a risked based internal audit plan to address the potential risk that can emerge in the Department for improving governance, controls and risk management processes. Internal control unit conducts inspections on all departmental vouchers that are above R10 000. Financial pledges to programme and sub programme managers with a clause that all transaction incurred are free from Irregular Expenditure, will be entered into for the year 2018/19 financial year. A preventative checklist was developed and tabled by management. Disciplinary measures are underway for officials deemed to have transgressed the legislation.

No

The Department failed to produce annual financial statements that are free from misstatements.

The findings is an error, the Auditor General instead congratulated the department on producing Annual Financial Statements that are free from misstatement. The misstatement identified in the annual report submitted for audit were in the report submitted for audit were in the reported performance of Programme 3 – Transport Operations (Scholar transport Performance Indicator 32), pertaining sufficient appropriate evidence to support the reported achievement of this indicator. Management subsequently corrected some of the misstatements, these findings were raised on the usefulness and reliability of the reported information. With the assistance of Internal Audit Directorate who conducted quarterly assessment on reported performance against submitted evidence, the directorate has managed to reduce misstatements on the reported quarterly performance information.

Yes

Senior Management of the Department did not exercise sufficient oversight on performance on performance reporting, compliance and internal controls in order to curb occurrence previous year deficiencies. There were gaps in the data collected from Education with regard to Scholar transport.

There were several request submitted to the Department of Education to submit the number of learners benefiting from the scholar transport scheme. This must include the names of learners, ID numbers, gender, and grade, kilometres travelled, school names, and pick up points, routes and disability status of learners. There are engagements between the Department of Education and Transport at the level of the Accounting Officers and at the level of the MEC’s. Learner verification project and ad-hoc monitoring at school level to strengthen data management are also taking place. A Memorandum of Understanding (MoU) and Standard operating procedures between the two departments have been signed.

Yes

58

9. PRIOR MODIFICATION TO AUDIT REPORTS Nature of qualification, disclaimer, adverse opinion

and matters of noncompliance Financial year in which it rose Progress made in clearing resolving the matter

Unqualified audit opinion on the annual financial statements with matters of emphasis on noncompliance with legislation and internal control deficiencies Qualified audit opinion on annual performance information on usefulness and reliability

2017/18 The department has started dealing with issues raised by Auditor General on the management letter and has also developed Audit intervention Plan which is monitored monthly.

10. INTERNAL CONTROL UNIT The following work was performed by Internal Control unit during the year under review • Inspected departmental vouchers to identify Irregular, Fruitless and Wasteful Expenditure as per National Treasury guide lines and

followed up on all identified irregularities. • Inspected accommodation vouchers to ensure compliance with Cost Containment measures and sought recovery of monies paid by

the department that exceeded the accepted amount (R1,400). • Maintained Irregular, Fruitless and Wasteful expenditure registers and reported to the Accounting Officer and Provincial Treasury on

a monthly basis. • Developed and monitored Audit Improvement Plan of the Department for progress. • Prepared and submitted working papers on Irregular, fruitless and wasteful expenditure to Financial Reporting for Interim Financial

Statements & Annual Financial Statements. • Facilitated the process of requesting condoning of aging and current Irregular, fruitless and wasteful expenditure incurred by the

Department which includes investigation of cases. • The progress on investigation is reported to the IYM on a monthly basis and some cases have been submitted to the relevant authority

with the assistance of Provincial Treasury. • Submission of financial misconduct database at Provincial Treasury for Losses Irregular, Fruitless and Wasteful expenditure.

59

11. INTERNAL AUDIT AND AUDIT COMMITTEE We present our report for the financial year ended 31 March 2018. Key activities

During the 2017/18 financial year, the post of Chief Audit Executive (CAE) was vacant, however it should be noted that an Acting CAE was appointed during March 2017 until the end of the financial year. Due to delays in finalising litigation relating to the previous CAE, the vacant CAE post could not be filled during the year. Despite that the internal audit division was able to complete the approved audit plan for the 2017/18 financial year.

The internal audit function performed the following audits during the year as per its approved Internal Audit Plan:

• Annual Financial Statements Review • Evaluation of the Annual Report • Performance Management Development System • Community Based Programme (CBP) • Subsistence and Travelling Allowance • Performance Information Q1&2 • Key Internal Controls Assessment - Q1&2 • Management Performance Assessment Tool ( MPAT) • Interim Financial Statements - Q1&2 • Transfer Payments - Q1&2 • Transport Administration, Licensing and Traffic Law Enforcement • Audit Intervention Plan (AIP) • IA findings register – Follow up • Key Internal Controls Assessment – Q3 • Follow-up audit - Scholar Transport • Follow-up audit - Supply Chain and Contracts Management • Road safety education programmes • Risk Management Process • ICT Governance ( ICT Audit Follow-up, Network Vulnerability and Risk Assessment) -Outsourced

Though there has been a marginal improvement, by management, in implementing internal audit recommendations, there is still a need for further improvement.

Objectives of the internal audit

The objective of the Internal Audit activity is to enhance and protect organizational value by providing risk based and objective assurance, advice and insight to management and the Audit Committee. Internal Audit provides information and reports to management and the Audit Committee in order to improve the Department’s governance, risk management and internal controls by providing insight and recommendations based on analyses and assessments of data and business processes. Audit committee objectives

The Audit Committee reports that it has complied with its responsibilities arising from Section 77 of the Public Finance Management Act and Treasury Regulation 3.1. The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.

Audit Committee Members and Attendance

The Audit Committee consists of the members listed below and meets at least four times per annum as per its approved terms of reference. During the 2017/18 financial year six meetings were held. The members and their attendance of the meetings held are as follows:

60

Name of Member Qualifications Internal Or

External Date

Appointed Contract end Date

No. of Quarterly Meetings Attended

No. of Special Meetings Attended

Mr. C. Sparg

1. Bachelor of Commerce 2. CTA 3. CA(SA) 4. Membership in Institute of Directors(SA)

External (Chairperson)

01 April 2017

31 March 2020

4 2

Mr J. Emslie

1. Bachelor of Commerce 2. Postgraduate Diploma in Accountancy 3. CA(SA) 4. Auditor IRBA

External (member)

01 April 2017

31 March 2020

4 2

Ms. W. Dukuza

1. BProc Degree 2. Admission Exams as an Attorney 3. Certificate in Labour Relations Management

External (member)

01 April 2017

31 March 2020

4 2

Mr. HJ Marsberg

B.Com (Rhodes) Membership of the IIA

External member

1 June 2018 31 May 2021

0 (new appointment) 0

61

12. AUDIT COMMITTEE REPORT 1. The effectiveness of internal control In line with PFMA and the King IV Report on Corporate Governance requirements, Internal Audit provides the Audit Committee and management with reasonable assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. From the various reports of the Internal Auditors, Auditor-General and risk management, it was noted that matters were reported indicating deficiencies in the system of internal control or deviations therefrom. Accordingly, we can report that the system of internal control was not entirely effective for the year under review.

There is a need for improvement in the internal controls and in the adherence to internal controls in certain areas, and the Audit Committee is committed to assisting the department in this regard. Internal audit has a role to play in this regard.

In addition to mandatory internal audit reviews, the unit completed several risk based assignments where areas of internal control weaknesses were raised. Each area of weakness was followed up by an agreed management action plan that requires continued monitoring. These areas included:

- Performance Management And Development System (PMDS): Internal control weaknesses and compliance matters - Community Based Programme (CBP): Systems and internal controls - Transport Administration, Licensing and Traffic Law Enforcement: Internal control weaknesses and compliance matters

The quality of in year management and monthly / quarterly reports submitted in terms of the PFMA and the Division of Revenue Act

During the year under review the Department reported monthly and quarterly to the Treasury as is required by the PFMA. The Audit Committee reviewed the content and quality of the interim financial reports and performance reports prepared and issued by the Department during the year under review.

2. Evaluation of Financial Statements and Annual Performance Report The Audit Committee has:

• Reviewed and discussed the unaudited annual financial statements to be included in the annual report with management; • Reviewed and discussed the unaudited information on pre-determined objectives to be included in the annual report with

management; • Reviewed for changes in accounting policies and practices; • Reviewed the Department’s compliance with legal and regulatory provisions; • Reviewed explanations for significant fluctuations compared to previous year; • Reviewed explanations for variances between the financial statements and budgeted amounts; • Reviewed any new or proposed legislation that may have an impact on policies, the financial statements and disclosure therein; • Enquired into the adequacy, reliability and completeness of supporting information as supporting these financial statements; • Advised management that the financial statements and performance report may not be free from material misstatements.

Based on the Audit Committee’s review of the unaudited annual financial statements the Committee resolved that they be recommended for submission to the Auditor General South Africa for auditing.

Based on the Audit Committee’s review of the unaudited information on predetermined objectives the Committee resolved that they be recommended for submission to the Auditor General South Africa for auditing.

62

3. Internal Audit

During the 2017/18 financial year, the post of Chief Audit Executive (CAE) was vacant, however it should be noted that an Acting CAE was appointed during March 2017 until the end of the financial year. Due to delays in finalising litigation relating to the previous CAE, the vacant CAE post could not be filled during the year. Despite that the internal audit division was able to complete the approved audit plan for the 2017/18 financial year.

The internal audit function performed the following audits during the year as per its approved Internal Audit Plan:

• Annual Financial Statements Review • Evaluation of the Annual Report • Performance Management Development System • Community Based Programme (CBP) • Subsistence and Travelling Allowance • Performance Information Q1&2 • Key Internal Controls Assessment - Q1&2 • MPAT • Interim Financial Statements - Q1&2 • Transfer Payments - Q1&2 • Transport Administration, Licensing and Traffic Law Enforcement • Audit Intervention Plan (AIP) • IA findings register – Follow up • Key Internal Controls Assessment – Q3 • Follow-up audit - Scholar Transport • Follow-up audit - Supply Chain and Contracts Management • Road safety education programmes • Risk Management Process • ICT Governance ( ICT Audit Follow-up, Network Vulnerability and Risk Assessment) -Outsourced

4. Risk Management The Head of Department established the Risk Management Committee (RMC) to exercise certain responsibilities, as set out in the approved RMC Terms of Reference.

A suitably qualified and experienced external Chairperson for the RMC was appointed during the month of February 2018 of the 2017/18 financial year. This is a step in the right direction towards raising the profile and awareness of risk management in the Department.

The Head of Department committed management of the Department to comply with all relevant Corporate Governance processes. Risk management and Internal Audit of the department reports at an appropriate level (administratively report to the Head of Department and functionally to the Audit Committee).

For the risk management maturity of the Department to improve, it is critical that recommendations made by the RMC are implemented timeously by management and effective monitoring of implementation takes place.

5. ICT Governance

The Committee has reviewed the Department’s compliance in terms of the Corporate Governance of ICT Framework. Though some progress has been made in implementing ICT governance, there are still capacity constraints and weaknesses that need further improvement, particularly in the area of security and ICT business continuity controls.

63

6. Auditor-General South Africa The Audit Committee met with the Auditor General of South Africa in order to discuss the Audit Strategy at the commencement of the audit and has met with the AGSA during the audit process to ensure that all matters relating to the audit were resolved. We concur with and accept the opinion of the AGSA on the financial statements of the Department for the year ended 31 March 2018. 7. Appreciation The Committee expresses its sincere appreciation to the Honourable MEC, Accounting Officer, Management, Internal Audit, Provincial Treasury and the AGSA for their co-operation in enabling the Committee to execute and fulfil its responsibilities.

Mr C. Sparg CA(SA) Chairperson of the Audit Committee Date: 31 July 2018

64

PART D: HUMAN RESOURCE MANAGEMENT

1. INTRODUCTION

The information contained in this part of the annual report has been prescribed by the Minister for the Public Service and Administration for all departments in the public service.

2. HUMAN RESOURCES OVERSIGHT STATISTICS

HR planning is an inclusive and dynamic process that involves the identification of both current and future human resource needs as well as potential challenges in order for the department to consistently achieve its organisational objectives. It is also the two-way operational link between high-level strategy and action-orientated implementation that can be regularly monitored and evaluated. Therefore, HR planning aims to ensure that an organisation has the right people, with the right skills, at the right place at the right time, all the time.

Departments are supposed to have MTEF aligned HR Plans in place, which are then updated should the need arise. The assessment is conducted by a panel of line managers for each department and reflects general management perceptions of the ability of HRM in the department to strategically assist in the achievement of service delivery goals. The need to position HR professionals as change agents

• The need to improve disability equity representation

• The need to improve recruitment processes

• The need to utilise information gathered during exit interviews to inform retention strategies

• The need to update organisational structures in terms of present realities

• The need to improve on employee relations.

• Staff attraction and retention focuses on both attracting suitably qualified professionals whose skills are in demand in the employment market to join the department through focused recruitment strategies and keeping those who are already employed, especially those whose skills are crucial to the department, e.g. Engineers. Staff attraction and retention involves motivating staff by covering both the psychological aspects of the employees, their perception, goals, behaviours and the operational aspects attached to the job or tasks for which they were appointed.

66

3. HUMAN RESOURCES OVERSIGHT STATISTICS The information provided in this section is for Eastern Cape Department of Transport inclusive of its Government Fleet Management Trading Entity.

3.1. Personnel related expenditure

Table 3.1.1 Personnel expenditure by programme for the period 1 April 2017 and 31 March 2018

Programme Total

expenditure (R’000)

Personnel expenditure

(R’000)

Training expenditure

(R’000)

Professional and special

services expenditure

(R’000)

Personnel expenditure as a

% of total expenditure

Average personnel cost per employee

(R’000)

Administration 294 640,00 216 322, 3 090 000 0,00 73,40% 134,00 Transport Infrastructure 9 929,00 6 901 802 000 0,00 69,50% 4,00

Transport Operation 1 139 276,00 90 361 1 043 500 0,00 7,90% 56,00 Transport Regulation 337 915,00 243 986 1 923 500 0,00 72,20% 151,00 Community Based Programme 55 525,00 5 091 5 967 000 0,00 9,20% 3,00

Total 1 837 285,00 562 661 12 601 000 0,00 30,60% 349,00

Table 3.1.2 Personnel costs by salary band for the period 1 April 2017 and 31 March 2018

Salary band Personnel expenditure (R’000)

% of total personnel cost

No. of employees

Average personnel cost per employee (R’000)

Lower skilled (Levels 1-2) 7 482 1,20 46 162 652 Skilled (level 3-5) 47 304 7,70 196 241 347 Highly skilled production (levels 6-8) 340 306 55,30 970 350 831 Highly skilled supervision (levels 9-12) 137 098 22,30 211 649 754

Senior and Top management (levels 13-16) 41 950 6,80 37 1 133 784

Total 574 140 93.30 1460 2 538 368

Table 3.1.3 Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for the period 1 April 2017 and 31 March 2018 Programme

Salaries Overtime Home Owners Allowance Medical Aid Amount (R’000

Salaries as a % of personnel

costs

Amount (R’000)

Overtime as a % of

personnel costs

Amount (R’000)

HOA as a % of personnel

costs

Amount (R’000)

Medical aid as a % of

personnel costs

Administration 211 171 80,10 669 0,30 8 286 3,10 12 079 4,60 Transport Infrastructure 5 219 83,65 0 0 252,00 4.0 768,00 12.30

Transport Operation 73 230 78,20 1 935,00 2.0 2096,00 2.2 3151,00 3.3 Transport Regulation 174 768 70,40 21

298,00 8,60 8 877,00 3,60 16 913,00 6,80

Community Based Programme 4 392,00 79,50 0,00 0,00 76,00 1,40 149,00 2,70

Total 468 780,00 76,10 23 902,00

3,90 19 587,00

3,20 33 060,00

5,40

67

Table 3.1.4 Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for the period 1 April 2017 and 31 March 2018

Salary band

Salaries Overtime Home Owners Allowance Medical Aid

Amount (R’000

Salaries as a % of

personnel costs

Amount (R’000)

Overtime as a % of

personnel costs

Amount (R’000)

HOA as a % of personnel costs

Amount (R’000)

Medical aid as a % of personnel

costs Skilled (level 1-2) 5 188 69.30 0.00 0.00 686 9.20 886 11.80 Skilled (level 3-5) 34 953 73.80 761 1.60 2 564 5.40 4 265 9.00 Highly skilled production (levels 6-8)

248 055 72.30 21 743 6.30 12 432 3.60 23 326 6.80

Highly skilled supervision (levels 9-12

114 667 81.00 1 386 1.00 2 733 1.90 4 101 2.90

Senior management (level 13-16) 35 439 79.90 0.00 0.00 1 004 2.30 427 1.00

10 Contract (Levels 1-2) 135 100.00 0.00 0.00 0.00 0.00 0.00 0.00

11 Contract (Levels 3-5) 2 256 99.10 0.00 0.00 0.00 0.00 0.00 0.00

12 Contract (Levels 6-8) 7 823 99.00 0.00 0.00 0.00 0.00 0.00 0.00

13 Contract (Levels 9-12) 11 581 96.10 13.00 0.10 13 0.10 55.00 0.50

14 Contract (Levels 13-16) 5 229 89.00 0.00 0.00 155 2.60 0.00 0.00

20 Abnormal Appointment 3 453 95.30 0.00 0.00 0.00 0.00 0.00 0.00

Total 468 780 76.10 23 902 3.90 19 587 3.20 33 060 5.40

3.2. Employment and Vacancies

Table 3.2.1 Employment and vacancies by programme as on 31 March 2018

Programme Number of posts on approved establishment

Number of posts filled

Vacancy Rate

Number of employees additional to the establishment

Administration 659 580 12 46 Transport Infrastructure 18 16 11 0 Transport operation 247 226 9,40 27 Transport regulation 753 682 9,40 0 Community based programme 12 10 16,70 0

Total 1 689 1 514 10,40 73

68

ntozakhe, nomthandazo

Lets we remove all highlighted yellow as they do not form part of the guide.

Table 3.2.2 Employment and vacancies by salary band as on 31 March 2018

Salary band Number of posts on approved establishment

Number of posts filled

Vacancy Rate


Lower skilled ( 1-2) 46 46 0 1 Skilled(3-5) 213 196 8 15 Highly skilled production (6-8) 1 076 970 9,90 2 Highly skilled supervision (9-12)

256 210 18 7

Highly skilled supervision (9-12) Temporary

1 1 0 0

Senior management (13-16) 43 37 14 1 11 Contract (Levels 3-5), Permanent

10 10 0 10

12 Contract (Levels 6-8), Permanent

25 25 0 24


16 16 0 12


3 3 0 1

Total 1 689.00 1 514 10 73

69


Your total is 1514 but mine is 1477, pls verify


Total that I have is 72 not 73 , please verify

Table 3.2.3 Employment and vacancies by critical occupations as on 31 March 2018 Critical occupation Number of posts on approved

establishment Number of posts filled

Vacancy Rate


Administrative Related, Permanent 169 146 13.60 16 Air Traffic Controllers, Permanent 4 4 0 0 Aircraft Pilots & Related Associate Professionals, Permanent

1 1 0 0

All Artisans In The Building Metal Machinery Etc., Permanent

7 6 14.30 1

Architects Town And Traffic Planners, Permanent

1 1 0 0

Bus And Heavy Vehicle Drivers, Permanent 2 2 0 0 Cleaners In Offices Workshops Hospitals Etc., Permanent

65 64 1.50 1

Client Inform Clerks (Switchb Recept Inform Clerks), Permanent

11 11 0 0

Computer Programmers., Permanent 1 0 100.00 0 Engineering Sciences Related, Permanent 1 1 0 0 Engineers And Related Professionals, Permanent

18 15 16.70 9

Finance And Economics Related, Permanent

19 16 15.80 0

Financial And Related Professionals, Permanent

18 12 33.30 1

Financial Clerks And Credit Controllers, Permanent

125 111 11.20 4

Fire Fighting And Related Workers, Permanent

25 23 8.00 0

Head Of Department/Chief Executive Officer, Permanent

2 1 50.00 0

Human Resources & Organisat Developm & Relate Prof, Permanent

16 14 12.50 1

Human Resources Clerks, Permanent 88 80 9.10 1 Human Resources Related, Permanent 22 17 22.70 0 Information Technology Related, Permanent 1 1 0 0 Language Practitioners Interpreters & Other Commun, Permanent

1 1 0 0

Legal Related, Permanent 3 3 0 0 Library Mail And Related Clerks, Permanent 51 46 9.80 3 Light Vehicle Drivers, Permanent 20 19 5.00 4 LOGISTICAL SUPPORT PERSONNEL, Permanent

7 7 0 3

Material-Recording And Transport Clerks, Permanent

96 87 9.40 3

Messengers Porters And Deliverers, Permanent

4 4 0 1

Motor Vehicle Drivers, Permanent 2 2 0 0 Other Administrat & Related Clerks And Organisers, Permanent

158 137 13.30 7

Other Administrat & Related Clerks And Organisers, Temporary

1 1 0 0

Other Administrative Policy And Related Officers, Permanent

24 24 0 0

Other Information Technology Personnel., Permanent

14 12 14.30 1

Other Occupations, Permanent 3 2 33.30 0 Regulatory Inspectors, Permanent 602 546 9.30 0 Risk Management And Security Services, Permanent

4 3 25.00 1

Road Workers, Permanent 1 1 0 0 Secretaries & Other Keyboard Operating Clerks, Permanent

63 57 9.50 13

Security Officers, Permanent 1 1 0 0 Senior Managers, Permanent 36 33 8.30 3 Social Work And Related Professionals, Permanent

1 1 0 0

Trade Labourers, Permanent 1 1 0 0 Total 1 689 1 514 10.40 73

70

3.3. Filling of SMS Posts

Table 3.3.1 SMS post information as on 31 March 2018

SMS Level Total number of funded SMS posts

Total number of SMS posts filled

% of SMS posts filled

Total number of SMS posts vacant

% of SMS posts vacant

Director-General/ Head of Department

1 1 100 0 0

Salary Level 16 1 1 100 0 0 Salary Level 15 1 1 100 0 0 Salary Level 14 7 6 85 1 14.2 Salary Level 13 33 29 87 4 12.12 Total 43 38 88 5 11.62

Table 3.3.2 SMS post information as on 30 September 2017


Total number of SMS posts filled

% of SMS posts filled

Total number of SMS posts vacant

% of SMS posts vacant


1 1 100 0 0

Salary Level 16 1 1 100 0 0 Salary Level 15 1 1 100 0 0 Salary Level 14 7 7 100 0 0 Salary Level 13 33 31 93 2 6 Total 43 41 95.3 2 4.6

Table 3.3.3 Advertising and filling of SMS posts for the period 1 April 2017 and 31 March 2018

Advertising Filling of posts

SMS Level Number of vacancies per level

advertised in 6 months of becoming vacant

Number of vacancies per level filled in 6 months of becoming

vacant

Number of vacancies per level not filled in 6 months but filled in 12

months Director-General/ Head of Department 0 0 0

Salary Level 16 0 0 0 Salary Level 15 0 0 0 Salary Level 14 1 0 0 Salary Level 13 1 0 0 Total 2 0 0

Table 3.3.4 Reasons for not having complied with the filling of funded vacant SMS - Advertised within 6 months and filled within 12 months after becoming vacant for the period 1 April 2017 and 31 March 2018

Reasons for variances not advertised within 6 months n/a

Reasons for variances not filled within 6 months No suitable candidate found

Table 3.3.5 Disciplinary steps taken for not complying with the prescribed timeframes for filling SMS posts within 12 months for the period 1 April 2017 and 31 March 2018

Reasons for vacancies not advertised within six months n/a Reasons for vacancies not filled within six months

No disciplinary steps taken. The post advertised within the prescribed timeframes but could not be filled due to reasons cited in 3.3.4

71


Please verify figures are not aligned to 2016/17 financial year although no major changes happened


Please provide information for this table

3.4. Job Evaluation

Table 3.4.1 Job Evaluation by Salary band for the period 1 April 2017 and 31 March 2018

Salary band Number of posts on

approved establishment

Number of Jobs

Evaluated

% of posts evaluated by salary bands

Posts Upgraded Posts downgraded Number % of posts

evaluated Number % of posts

evaluated Lower Skilled (Levels1-2) 46 0.00 100% 0.00 0.00 0.00 0.00

Skilled (Levels 3-5) 213 0.00 0,00 0.00 0.00 0.00 0.00 Highly skilled production (Levels 6-8)

1 076 0.00 0,00 0.00 0.00 0.00 0.00

Highly skilled supervision (Levels 9-12)

257 137 53% 0.00 0.00 0.00 0.00

Senior Management Service Band A

32 0.00 0.00 0.00 0.00 0.00 0.00

Senior Management Service Band B

9 1 11% 0.00 0.00 0.00 0.00

Senior Management Service Band C

1 1 100% 0.00 0.00 0.00 0.00

Senior Management Service Band D

1 0 0,00 0.00 0.00 0.00 0.00

11 Contract (Levels 3-5) 10 0.00 0.00 0.00 0.00 0.00 0.00

12 Contract (Levels 6-8) 25 0.00 0.00 0.00 0.00 0.00 0.00

13 Contract (Levels 9-12) 16 0.00 0.00 0.00 0.00 0.00 0.00

14 Contract Band A 2. 0.00 0.00 0.00 0.00 0.00 0.00 17 Contract Band D 1 0.00 0.00 0.00 0.00 0.00 0.00 Total 1 689 139 8% 0.00 0.00 0.00 0.00

Table 3.4.2 Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1 April 2017 and 31 March 2018

Gender African Asian Coloured White Total Female 0 0 0 0 0 Male 0 0 0 0 0 Total 0 0 0 0 0

Employees with a disability 0

Table 3.4.3 Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2017 and 31 March 2018

Occupation Number of employees Job evaluation level Remuneration level Reason for deviation N/A 0 0 0 0 N/A 0 0 0 0 N/A 0 0 0 0 Total number of employees whose salaries exceeded the level determined by job evaluation 0 Percentage of total employed 0

72


I suggest we remove the highlighted yellow rows as they do not form part of the guide

Table 3.4.4 Profile of employees who have salary levels higher than those determined by job evaluation for the period 1 April 2017 and 31 March 2018

Gender African Asian Coloured White Total

Female 0 0 0 0 0 Male 0 0 0 0 0 Total 0 0 0 0 0

Employees with a disability 0 0 0 0 0

Total number of Employees whose salaries exceeded the grades determine by job evaluation None

3.5. Employment Changes

Table 3.5.1 Annual turnover rates by salary band for the period 1 April 2017 and 31 March 2018 Salary band Number of employees at

beginning of period-1 April 2017

Appointments and transfers into the

department

Terminations and transfers out of the

department

Turnover rate

Lower skilled ( Levels 1-2) 54 6 1 1,90 Skilled (Levels3-5) 320 15 8 2,50 Highly skilled production (Levels 6-8) 850 61 47 5,50

Highly skilled supervision (Levels 9-12) 174 11 18 10,30

Senior Management Service Bands A 28 0 3 10,70

Senior Management Service Bands B 7 0 1 14,30

Senior Management Service Bands C 1 0 0 0,00

Senior Management Service Bands D 1 0

Contracts 10 Contract (Levels 1-2) Permanent 2 0 2 100

11 Contract (Levels 3-5) Permanent 14 10 14 100



14 Contract Band A Permanent 6 2 5 83 17 Contract Band D Permanent 1 0 0 0,00 Total 1 498 130 124 8,30

Table 3.5.2 Annual turnover rates by critical occupation for the period 1 April 2017and 31 March 2018

Critical occupation Number of employees at beginning of period-April

2017


department


department Turnover

rate

Administrative Related Permanent 162. 13 28 17.30 Air Traffic Controllers Permanent 5 0 1 20.00 Aircraft Pilots & Related Associate Professionals Permanent

1 0 0 0.

All Artisans In The Building Metal Machinery Etc. Permanent

8 0 2 25.00

Architects Town And Traffic Planners Permanent

1 0 0 0.00

73

Critical occupation Number of employees at beginning of period-April

2017


department


department Turnover

rate

Bus And Heavy Vehicle Drivers Permanent

2 0 0 0.00

Cleaners In Offices Workshops Hospitals Etc. Permanent

65 6 6 9.20

Client Inform Clerks(Switchb Recept Inform Clerks) Permanent

11 0 0 0

Engineering Sciences Related Permanent

1 0 0 0

Engineers And Related Professionals Permanent

11 8 4 36.40

Finance And Economics Related Permanent

16 1 1 6.30

Financial And Related Professionals Permanent

10 1 1 10.00

Financial Clerks And Credit Controllers Permanent

119 4 8 6.70

Fire Fighting And Related Workers Permanent

12 11 0 0

Head Of Department/Chief Executive Officer Permanent

1 0 0 0

Human Resources & Organisat Developm & Relate Prof Permanent

16 0 2 12.50

Human Resources Clerks Permanent

90 1 7 7.80

Human Resources Related Permanent

15 1 2 13.30

Language Practitioners Interpreters & Other Commun Permanent

1 0 0 0

Legal Related Permanent 3 0 0 0. Library Mail And Related Clerks Permanent

48 3 5 10.40

Light Vehicle Drivers Permanent 21 1 3 14.30 Logistical Support Personnel Permanent

5 3 1 20.00

Material-Recording And Transport Clerks Permanent

97 3 9 9.30

Messengers Porters And Deliverers Permanent

2 2 0 0.00

Motor Vehicle Drivers Permanent 3 0 1 33.30 Other Administrat & Related Clerks And Organisers Permanent

118 17 9 7.60

Other Administrative Policy And Related Officers Permanent

24 0 0 0.00

Other Information Technology Personnel. Permanent

14 1 2 14.30

Other Occupations Permanent 2 0 0 0.00 Regulatory Inspectors Permanent 525 43 23 4.40 Risk Management And Security Services Permanent

2 1 1 50.00

Road Workers Permanent 1 0 0 0.00 Secretaries & Other Keyboard Operating Clerks Permanent

54 6 2 3.70

Senior Managers Permanent 30 2 6 20.00 Social Work And Related Professionals Permanent

1 0 0 0.00

Trade Labourers Permanent 1 0 0 0.00 Total 1 498 130 124 8.30

74

The table below identifies the major reasons why staff left the department.

Table 3.5.3 Reasons why staff left the department for the period 1 April 2017 and 31 March 2018 Termination Type Number % of Total Resignations

Death, Permanent 7 0.50 Resignation, Permanent 31 2 Expiry of contract, Permanent 41 2.7 Transfers, Permanent 2 0.10 Discharged due to ill health, Permanent 2 0.10 Dismissal-misconduct, Permanent 5 0.33 Retirement, Permanent 38 2.50 Total 124 8.1 Total number of employees who left as a % of total employment 8.1

Table 3.5.4 Promotions by critical occupation for the period 1 April 2017 and 31 March 2018

Occupation Employees 1 April 2017

Promotions to another salary

level

Salary level promotions as a % of

employees by occupation

Progressions to another notch within

a salary level

Notch progression as a % of employees by

occupation

Administrative Related 162 13 28.00 17.30 162 Air Traffic Controllers 5 0 1.00 20.00 5 Aircraft Pilots & Related Associate Professionals 1 0 0 0 1

All Artisans In The Building Metal Machinery Etc. 8 0 2.00 25.00 8

Architects Town And Traffic Planners 1 0 0 0 1

Bus And Heavy Vehicle Drivers 2 0 0 0 2

Cleaners In Offices Workshops Hospitals Etc. 65 6 6.00 9.20 65

Client Inform Clerks(Switchb Recept Inform Clerks)

11 0 0 0 11

Engineering Sciences Related 1 0 0 0 1

Engineers And Related Professionals 11 8 4 36.40 11

Finance And Economics Related 16 1 1 6.30 16.

Financial And Related Professionals 10 1 1 10.00 10

Financial Clerks And Credit Controllers 119 4 8 6.70 119

Fire Fighting And Related Workers 12 11 0 0 12

Head Of Department/Chief Executive Officer 1 0 0 0 1

Human Resources & Organisat Development & Relate Prof

16.00 0 2 12.50 16

Human Resources Clerks 90.00 1 7 7.80 90 Human Resources Related 15.00 1 2 13.30 15 Language Practitioners Interpreters & Other Commun

1.00 0 0 0 1

Legal Related 3.00 0 0 0 3 Library Mail And Related Clerks 48 3 5 10.40 48

Light Vehicle Drivers 21 1 3 14.30 21 Logistical Support Personnel 5 3 1 20.00 5

Material-Recording And Transport Clerks 97 3 9. 9.30 97

75

Occupation Employees 1 April 2017


level

Salary level promotions as a % of

employees by occupation

Progressions to another notch within

a salary level

Notch progression as a % of employees by

occupation

Messengers Porters And Deliverers 2 2 0 0 2.

Motor Vehicle Drivers 3 0 1 33.30 3 Other Administrat & Related Clerks And Organisers

118 17 9 7.60 118

Other Administrative Policy And Related Officers 24 0 0 0 24

Other Information Technology Personnel. 14 1 2 14.30 14

Other Occupations 2 0 0 0 2 Regulatory Inspectors 525 43 23 4.40 525 Risk Management And Security Services 2 1 1 50.00 2

Road Workers 1 0 0 0 1 Secretaries & Other Keyboard Operating Clerks 54 6 2 3.70 54

Senior Managers 30 2. 6 20.00 30 Social Work And Related Professionals 1 0 0 0 1

Trade Labourers 1 0 0 0 1 Total 1 498 130 124. 8.30 1 498.00

76

Table 3.5.5 Promotions by salary band for the period 1 April 2017 and 31 March 2018

Salary Band Employees 1 April 2017


level

Salary bands promotions as a % of employees by

salary level

Progressions to another notch within a salary

level

Notch progression as a % of

employees by salary bands

Lower skilled ( Levels 1-2) 54 0 0 29 53,70

Skilled (Levels3-5) 320 1 0,30 152 47,50 Highly skilled production (Levels 6-8) 850 55 6,50 701 82,50

Highly skilled supervision (Levels 9-12) 174 10 5,70 104 59,80

Senior Management (Level 13-16) 37 0 0 10 27,00

10 Contract (Levels 1-2), Permanent 2 0 0 0 0

11 Contract (Levels 3-5), Permanent 14 0 0 1 7,10




Total 1 498 66,00 4,40 1 002 66,90

77

3.6. Employment Equity

Table 3.6.1 Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2018

Occupational category Male Female Total African Coloured Indian White African Coloured Indian White Legislators, Senior Officials And Managers Professionals 37 2 0 3 51 0 0 0 94.00 Technicians And Associate Professionals 80 7 0 2 83 5 0 1 178. Clerks 147 6 1 7 343 10 1 15 530 Service And Sales Workers 320 69 0 11 157 17 1 1 576 Craft And Related Trades Workers 6 0 0 0 0 0 0 0 6. Plant And Machine Operators And Assemblers 20 0 0 0 2 1 0 0 23 01 - Senior Officials And Managers 16 2 0 2 15 0 0 0 35 Unknown 0 0 0 1 0 0 0 0 1 09 - Labourers And Related Workers 23 1 0 0 46 1 0 0 71 Elementary occupations Total 649 87 1 26 697 34. 2 18 1 514 Employees with disabilities 6 1 0 1 9 0 0 0 17

Table 3.6.2 Total number of employees (including employees with disabilities) in each of the following occupational bands as on 31 March 2018

Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management 1 0 0 0 1 0 0 0 2

Senior Management 16 2 0 4 13 0 0 0 35

Professionally qualified and experienced specialists and mid-management

104 8 0 3 88 6 0 1 210

Professionally qualified and experienced specialists and mid-management, Temporary

1 0 0 0 0 0 0 0 1

Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents

418 73 1 19 416 25 2 16 970

Semi-skilled and discretionary decision making 78 3 0 0 113 1 0 1 196

Unskilled and defined decision making 7 0 0 0 37 2 0 0 46 08 Contract (Top Management), Permanent 0 0 0 0 1 0 0 0 1 09 Contract (Senior Management), Permanent 2 0 0 0 0 0 0 0 2 10 Contract (Professionally Qualified), Permanent 5 1 0 0 10 0 0 0 16 11 Contract (Skilled Technical), Permanent 15 0 0 0 10 0 0 0 25 12 Contract (Semi-Skilled), Permanent 2 0 0 0 8. 0 0 0 10 Total 649 87 1 26 697 34 2 18 1 514

78


Total is 93 not 94, pls verify

Table 3.6.3 Recruitment for the period 1 April 2017 to 31 March 2018

Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management 2 0 0 0 0 0 0 0 2 Professionally qualified and experienced specialists and mid-management

6 0 0 0 5 0 0 0 11


31 2 0 1 27 0 0 0 61

Semi-skilled and discretionary decision making 10 0 0 0 5 0 0 0 15

Unskilled and defined decision making 2 0 0 0 4 0 0 0 6

Contract 18 0 0 0 17 0 0 0 35 Total 69 2 0 1 58 0 0 0 130

Employees with disabilities

Table 3.6.4 Promotions for the period 1 April 2017 to 31 March 2018

Occupational band Male Female Total African Coloured Indian White African Coloured Indian White

Senior Management 2 0 0 0 1 0 0 0 3 Professionally qualified and experienced specialists and mid-management 2 0 0 0 2 0 0 0 4


3 3 0 0 11 0 0 0 17

Semi-skilled and discretionary decision making 33 11 0 0 42 0 0 0 86 Unskilled and defined decision making Contracts Total 40 14 0 0 56 0 0 0 110 Employees with disabilities

Table 3.6.5 Terminations for the period 1 April 2017 to 31 March 2018

Occupational band Male Female

Total African Coloured Indian White African Coloured Indian White Senior Management 4 0 0 0 1 0 0 0 5 Professionally qualified and experienced specialists and mid-management

4 0 0 0 6 0 0 0 10


15 2 0 0 14 0 0 0 31

Semi-skilled and discretionary decision making

15 1 1 0 12 1 0 1 31

Unskilled and defined decision making 4 0 0 0 2 0 0 0 6

09 Contract (Senior Management), Permanent 1 0 0 0 1 0 0 0 2

10 Contract (Professionally qualified), Permanent

2 0 0 1 2 0 0 0 5

11 Contract (Skilled technical), Permanent 6 1 0 0 7 1 0 0 15

12 Contract (Semi-skilled), Permanent 9 0 0 0 9 1 0 0 19

13 Contract (Unskilled), Permanent 2 0 0 0 2 0 0 0 4

Total 58 4 1 1 56 3 0 1 124

79

Occupational band Male Female

Total African Coloured Indian White African Coloured Indian White Employees with Disabilities

Table 3.6.6 Disciplinary action for the period 1 April 2017 to 31 March 2018

Disciplinary action Male Female

Total African Coloured Indian White African Coloured Indian White

Final Written Warning 1 0 0 0 0 0 0 0 1 No Outcome 0 0 0 0 0 0 0 0 0 Suspended Without Payment

1 0 0 0 0 0 0 0 1

Total 2 0 0 0 0 0 0 0 2 Table 3.6.7 Skills development for the period 1 April 2017 to 31 March 2018

Occupational category Male Female Total African Coloured Indian White African Coloured Indian White

Legislators, senior officials and managers

12 0 0 131 10 0 5 158

Professionals 0 0 0 0 0 0 0 0 0

Technicians and associate professionals

19 0 0 0 0 0 0 0 19

Clerks 66 3 0 2 162 6 0 0 239

Service and sales workers 406 40 12 210 15 0 5 688

Skilled agriculture and fishery workers

0 0 0 0 0 0 0 0 0

Craft and related trades workers

0 0 0 0 0 0 0 0 0

Plant and machine operators and assemblers

0 0 0 0 0 0 0 0 0

Elementary occupations 0 0 0 0 0 0 0 0 0

Total 503 43 0 14 503 31 0 10 1104

Employees with disabilities

80

3.7. Signing of Performance Agreements by SMS Members

Table 3.7.1 Signing of Performance Agreements by SMS members as on 31 May 2018


Total number of SMS members

Total number of signed performance agreements

Signed performance agreements as % of total number of SMS members


1 1

Salary Level 16 2 2 Salary Level 15 1 1 Salary Level 14 6 6 4 0.7% Salary Level 13 30 30 20 0.67% Total

Table 3.7.2 Reasons for not having concluded Performance agreements for all SMS members as on 31 March 2018

Reasons Implementation of the new determination on SMS Members had some detrimental effect in concluding PA’S in time

Table 3.7.3 Disciplinary steps taken against SMS members for not having concluded Performance agreements as on 31 March 2018

Reasons None

3.8. Performance Rewards

Table 3.8.1 Performance Rewards by race, gender and disability for the period 1 April 2017 to 31 March 2018

Race and Gender

Beneficiary Profile Cost Number of

beneficiaries Number of employees

% of total within group

Cost (R’000)

Average cost per employee

African Male 73 643 11.40% 1 294 240 17 729 Female 101 688 14.70% 1 451 430 14 371 Asian Male 0 1 0 0 0 Female 1 2 50% 9 215 9 215 Coloured Male 11 86 12.8% 177 000 16 091 Female 4 34 11.8 104 460 26 115 White Male 7 25 28% 124 960 17 852 Female 5 18 27.8% 71 420 14 284 People with disabilities

5 17 29.4% 73 290 14 659

Total 207 1514 13.7% 3 306 022 15 971

2 The difference of R 29 000 is a result of payment processed on BAS.

81

Table 3.8.2 Performance Rewards by salary band for personnel below Senior Management Service for the period 1 April 2017 to 31 March 2018

Salary band

Beneficiary Profile Cost Total cost as a % of the total personnel expenditure Number of


% of total within salary bands

Total Cost (R’000)


Lower Skilled (Levels 1-2)

6 46 13 326 530 5 442

Skilled (level 3-5) 27 196 13 228 110 8 448 Highly skilled production (level 6-8)

146 970 15 2 073 180 14 200

Highly skilled supervision (level 9-12)

27 211 12 929 730 34 435

Total 206 1474 14 3 263 270 15 843 Table 3.8.3 Performance Rewards by critical occupation for the period 1 April 2017 to 31 March 2018

Critical occupation



% of total within occupation



Financial Clerks And Credit Controllers 23 111 20.70 325.68 14 160

Air Traffic Controllers 0 4 0 0 0 Human Resources Clerks 9 80 11.30 160.66 17 851 Security Officers 0 1 0 0 0 All Artisans In The Building Metal Machinery Etc. 1 6 16.70 18.00 17 996

Human Resources & Organisat Developm & Relate Prof 2 14 14.30 60.27 30 134

Messengers Porters And Deliverers 0 4 0 0 0 Risk Management And Security Services 0 3 0 0 0

Finance And Economics Related 5 16 31.30 109.74 21 948 Logistical Support Personnel 0 7 0 0 0 Other Administrat & Related Clerks And Organisers 23 138. 16.70 338.36 14 711

Other Occupations 0 2 0 0 0 Legal Related 0 3 0 0 0 Financial And Related Professionals 3 12 25.00 49.81 16 602 Architects Town And Traffic Planners 0 1 0 0 0 Administrative Related 16 146 11.00 622.41 38 901 Secretaries & Other Keyboard Operating Clerks 9 57 15.80 155.52 17 280

Library Mail And Related Clerks 9 46 19.60 111.89 12 432 Cleaners In Offices Workshops Hospitals Etc. 8 64. 12.50 48.05 6 007

Human Resources Related 2 17 11.80 77.18 38 592 Head Of Department/Chief Executive Officer 0 1 0 0 0

Aircraft Pilots & Related Associate Professionals 0 1 0 0 0

Trade Labourers 0 1 0 0 0 Language Practitioners Interpreters & Other Commun 0 1 0 0 0

Social Work And Related Professionals 0 1 0 0 0

Regulatory Inspectors 70 546 12.80 860.01 12 286 Road Workers 0 1 0 0 0 Material-Recording And Transport Clerks 15 87 17.20 165.36 11 024

Other Administrative Policy And Related Officers 4 24 16.70 84.27 21 067

82


Total is 1423 not 1474 please veirfy


Please provide total cost as % of the total personnel expenditure : last column

Critical occupation



% of total within occupation



Fire Fighting And Related Workers 0 23 0 0 0 Bus And Heavy Vehicle Drivers 0 2 0 0 0 Senior Managers 1 33 3 42.35 42 348 Client Inform Clerks(Switchb Recept Inform Clerks) 0 11 0 0 0

Engineers And Related Professionals 0 15 0 0 0 Other Information Technology Personnel. 3 12 25 50.10 16 700

Light Vehicle Drivers 4 19 21.10 26.37 6 592 Engineering Sciences Related 0 1 0 0 0 Motor Vehicle Drivers 0 2 0 0 0 Information Technology Related 0 1 0 0 0 TOTAL 207 1 514 13.70 3 306.023 15 971

Table 3.8.4 Performance related rewards (cash bonus), by salary band for Senior Management Service for the period 1 April 2017 to 31 March 2018

Salary band

Beneficiary Profile Cost Total cost as a % of the total personnel expenditure Number of


% of total within salary bands



Band A Band A 1 30 3.30 42.35 42 348.20 Band B Band B 0 7 0 0 0 Band C Band C 0 1 0 0 0 Band D Band D 0 2 0 0 0 Total TOTAL 1 40 2.50 42.35 42 348.20

3.9. Foreign Workers

Table 3.9.1 Foreign workers by salary band for the period 1 April 2017 and 31 March 2018

Salary band 01 April 2017 31 March 2018 Change Number % of total Number % of total Number % Change

Contract (level 6-8) 1 33.30 0 0 1 50 Contract (level 9-12) 0 0 0 0 0 0 Contract (level 13-16) 2 66.70 1 100 1 50 Total 3 100 1 100 2 100

Table 3.9.2 Foreign workers by major occupation for the period 1 April 2016 and 31 March 2016

Major occupation 01 April 2017 31 March 2018 Change Number % of total Number % of total Number % Change

Professional and Managers 1 100 - 2.00 100 Total 3 100. 1 100 - 2.00 100

3 The difference of R 29 000 is a result of payment processed on BAS.

83

3.10. Leave utilisation

Table 3.10.1 Sick leave for the period 1 April 2017 to 31 December 2017 Salary band Total

days % Days with

Medical certification

Number of Employees using

sick leave

% of total employees using

sick leave

Average days per employee

Estimated Cost (R’000)

Lower Skills (Level 1-2) 253 65.20 44 3.30 6 128 Skilled (levels 3-5) 1 416 69.10 194 14.60 7 1 113 Highly skilled production (levels 6-8)

7 121 75.60 850 63.90 8 8 490

Highly skilled supervision (levels 9 -12)

127 68.50 18 1.40 7 271

Top and Senior management (levels 13-16)

109 81.70 19 1.40 6 441

Contract (Levels 1-2) 6 0 2 0.20 3 3 Contract (Levels 13-16) 2 100 1 0.10 2 7 Contract (Levels 3-5) 53 67.90 10 0.80 5 40 Contract (Levels 6-8) 83 47.00 17 1.30 5 106 Contract (Levels 9-12) 127 68.50 18 1.40 7 271 Total 10 655 74.50 1 330 100 8 14 201

Table 3.10.2 Disability leave (temporary and permanent) for the period 1 April 2017 to 31 December 2017

Salary band Total days

% Days with Medical

certification Number of Employees using disability leave

% of total employees using disability leave

Average days per employee

Estimated Cost (R’000)

Skilled (Levels 3-5) 47 100 3 18.80 16 31

Highly skilled production (Levels 6-8)

318 100 10 62.50 32 344

Highly skilled supervision (Levels 9-12)

86 100 3 18.80 29 254

Total 451 100 16 100.00 28 629 Table 3.10.3 Annual Leave for the period 1 April 2017 to 31 December 2017

Salary band Total days taken Number of Employees using annual leave Average per employee Lower skilled (Levels 1-2) 984 52 19

Skilled Levels 3-5) 4 823 270 18

Highly skilled production (Levels 6-8) 21 308. 978 22

Highly skilled supervision(Levels 9-12) 5 146 227 23

Senior management (Levels 13-16) 768 38 20 Contract (Levels 1-2) 32. 2 16 Contract (Levels 13-16) 53 5 11 Contract (Levels 3-5) 171 14 12 Contract (Levels 6-8) 217 17 13 Contract (Levels 9-12) 350 23 15 Total 33 852 1 626 21

84

Table 3.10.4 Capped leave for the period 1 January 2017 to 31 December 2017

Salary band Total days of capped leave

taken

Number of Employees using capped leave

Average number of days taken per employee

Average capped leave per employee as on 31 December

2015 Skilled Levels 3-5) 1 1 1 88

Highly skilled production (Levels 6-8)

303 12 25 133

Highly skilled supervision(Levels 9-12)

11 5 2 150

Senior management (Levels 13-16)

82 1 82 77

Total 397 19 21 131 Table 3.10.5 Leave payouts for the period 1 April 2017 and 31 December 2017

Reason Total amount (R’000) Number of employees Average per employee (R’000) Capped leave payouts on termination of service for 2016/ZZ 8 646 63 137 238

Current leave payout on termination of service for 2016/ZZ 113 9 12 556

Total 8 758 72 121 9.

85

3.11. HIV/AIDS & Health Promotion Programmes

Table 3.11.1 Steps taken to reduce the risk of occupational exposure Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any)

Key steps taken to reduce the risk

Table 3.11.2 Details of Health Promotion and HIV/AIDS Programmes (tick the applicable boxes and provide the required information)

Question Yes No Details, if yes 1. Has the department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position.

x Director: HRM Mr MAF Tokota

2. Does the department have a dedicated unit or has it designated specific staff members to promote the health and well-being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose.

x S Magwebu – Deputy Director EHW (Head Office) B Nqala Assistant Director (Head Office) L.W Fana (Head Office) M.L Qwabaza (Head Office) T Ntshuntshe (Head Office) P V Maseti (Head Office) L Mntambo (Amathole) N Matyobeni (Amathole) N Tuntulwana (Alfred Nzo) N. Msipha (Chris Hani) N Baai (O.R Tambo) S Ngxishe (O.R Tambo) N Ntselamane (O.R Tambo) S Mpondo (Sarah Baartman) V Mnduzlwana(Sarah Baartman)

3. Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme.

x EAP @ Wellness Management Pillar: Individual wellness-physical. Individual wellness-psycho-social. Organisational wellness and Work life balance. Health & Productivity Management: Diseases Management. Mental health & psychosomatic Illnesses. Incapacity due ill-health and Occupational Health education and promotion.

4. Has the department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent.

x EHW Committee members: Chairperson :SM:HRM :MAF Tokota DD : EHW :S Magwebu Coordinators: HIV/AIDS & TB : T Ntshuntshe Health & Productivity Management : L Fana Wellness Management : B Nqala SHERQ : P V Maseti PSA : N Nogabe NEHAWU : N Malinga POPCRU : Machakela SPU : M Vuso Transport Planning : A Soko

86

Question Yes No Details, if yes 5. Has the department reviewed its employment policies and practices to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed.

x HIV/AIDS and TB Management policy

6. Has the department introduced measures to protect HIV-positive employees or those perceived to be HIV-positive from discrimination? If so, list the key elements of these measures.

x Adherence to legislation and policies. Protection of women , children and people living with disability through Human Rights and access to Justice awareness.

7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved.

x Reports available from GEMS reports on monthly or quarterly basis pending to GEMS bookings availability.

8. Has the department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/indicators.

x Through monthly and quarterly Departmental, OTP & DPSA reports.

3.12. Labour Relations

Table 3.12.1 Collective agreements for the period 1 April 2017 and 31 March 2018 • If there were no agreements, keep the heading and replace the table with the following:

Total number of Collective agreements None Table 3.12.2 Misconduct and disciplinary hearings finalised for the period 1 April 2017 and 31 March 2018

Outcomes of disciplinary hearings Number % of total Correctional counselling 2 14.2 Verbal warning 0 0.00 Written warning 3 21.4 Final written warning 1 7.1 Suspended without pay 1 7.1 No outcome 1 7.1 Fine 0 0 Demotion 0 0 Dismissal 3 21.4 Not guilty 1 7.1 Case withdrawn 2 14.2 Total 14 100

Table 3.12.3 Types of misconduct addressed at disciplinary hearings for the period 1 April 2017 and 31 March 2018

Type of misconduct Number % of total Absent from work without reason of permission 03 15 Steals bribes or commit fraud 07 35 Misuse of state vehicle 02 10 Flouting of SCM policies and procedures 3 15 Participate in unlawful industrial action 2 10 Dishonesty 1 05 Insubordination 1 05 Flouting of HR processes 1 05 Total 20 100

Table 3.12.4 Grievances logged for the period 1 April 2017 and 31 March 2018

Grievances Number % of Total Number of grievances resolved 07 87% Number of grievances not resolved 1 13% Total number of grievances lodged 8 100%

87

Table 3.12.5 Disputes logged with Councils for the period 1 April 2017 and 31 March 2018 Disputes Number % of Total Number of disputes upheld 3 50%

Number of disputes dismissed 3 50%

Total number of disputes lodged 6 100% Table 3.12.6 Strike actions for the period 1 April 2017 and 31 March 2018

Total number of persons working days lost 0 Total costs working days lost 0 Amount recovered as a result of no work no pay (R’000) 0

Table 3.12.7 Precautionary suspensions for the period 1 April 2017 and 31 March 2018

Number of people suspended 4 Number of people who’s suspension exceeded 30 days 4 Average number of days suspended 12 Cost of suspension(R’000) R 2 748 000

88

3.13. Skills development

This section highlights the efforts of the department with regard to skills development. Table 3.13.1 Training needs identified for the period 1 April 2017 and 31 March 2018

Occupational category Gender

Number of employees as at 1 April 2017

Training needs identified at start of the reporting period

Learnerships Skills Programmes & other short courses Other forms of training Total


Female 15 Contract Management, Emerging Management Development Programme, First Aid and Records Management

Women Summit Bursary

47 1

Male 20

Contract Management, Emerging Management Development Programme, First Aid and Records Management

Bursary

17 2

Professionals Female 52 Occupational Health and Safety and compulsory induction programme.

Border Kei Conference Bursary

4 1

Male 42 Occupational Health and Safety and compulsory induction programme.


1 3


Female 89 Compulsory Induction Program Cyber security, ITLL, A+, MCSA, Windows 10

Bursary

1 5 3

Male

89 Compulsory Induction Program Cyber security, ITLL, A+, MCSA, Windows 10

Bursary

1

10 3

Clerks Female 369 Labour Representative, Human Resource Management, Financial Management, Public Management, Records Management and Compulsory Induction Programme, Occupational Health and Safety, Fleet Management

Bursary

137 7

Male 161 Labour Representative, Human Resource Management, Financial Management, Public Management, Records Management and Compulsory Induction Programme , Fleet Management, Fire fighting

Bursary

77 5

Service and sales workers

Female 176 Fire-Arm Maintenance, Labour Representation, Junior Commander, Compulsory Induction Programme, Examiner Of Drivers Licence and Fire-Arm Instructor, Examiner of motor vehicle, Project Management, Fire fighting

Bursary

350 8

Male 400 Fire-Arm Maintenance, Labour Representation, Junior Commander, Compulsory Induction Programme, Examiner Of Drivers Licence and Fire-Arm Instructor Examiner of motor vehicle, Project Management

Bursary

548

10

Elementary occupations

Female 50 Public Management and Compulsory Induction Program

3

Male 51 Public Management and Compulsory Induction Program

1

Sub Total Female 751 567 Male 763 678

Total 1514 1245

89

Table 3.13.2 Training provided for the period 1 April 2017 and 31 March 2018

Occupational category Gender

Number of employees as at

1 April 2017

Training needs identified at start of the reporting period

Learnerships Skills Programmes & other short courses Other forms of training Total


Female 15 Contract Management, Emerging Management Development Programme, First Aid and Records Management

Women Summit Bursary

47 1

Male 20

Contract Management, Emerging Management Development Programme, First Aid and Records Management

Bursary

17 2

Professionals Female 52 Occupational Health and Safety and compulsory induction programme.


4 1

Male 42 Occupational Health and Safety and compulsory induction programme.


1 3


Female 89 Compulsory Induction Program Fire fighting

Bursary

1 5 3

Male

89 Compulsory Induction Program Bursary

1

10 3

Clerks Female 369 Labour Representative, Human Resource Management, Financial Management, Public Management, Records Management and Compulsory Induction Programme, Occupational Health and Safety

Bursary

137 7

Male 161 Labour Representative, Human Resource Management, Financial Management, Public Management, Records Management and Compulsory Induction Programme

Bursary

77 5

Service and sales workers

Female 176 Fire-Arm Maintenance, Labour Representation, Junior Commander, Compulsory Induction Programme, Examiner Of Drivers Licence and Fire-Arm Instructor

Bursary

350 8

Male 400 Fire-Arm Maintenance, Labour Representation, Junior Commander, Compulsory Induction Programme, Examiner Of Drivers Licence and Fire-Arm Instructor

Bursary

548

10

Elementary occupations

Female 50 Public Management and Compulsory Induction Program

3

Male 51 Public Management and Compulsory Induction Program

1

Sub Total Female 751 567 Male 763 678

Total 1514 1245

90

3.14. Injury on duty

Table 3.14.1 Injury on duty for the period 1 April 2017 and 31 March 2018

Nature of injury on duty Number % of total Required basic medical attention only 7 1.36 Temporary Total Disablement 0 0 Permanent Disablement 0 0 Fatal 0 0 Total 7 1.36

3.15. Utilisation of Consultants

Table 3.15.1 Report on consultant appointments using appropriated funds for the period 1 April 2017 and 31 March 2018 Project title Total number of consultants

that worked on project Duration

(work days)

Contract value in

Rand Professional services for the development of provincial strategy and implementation plan for the provision and management of vehicle impoundment facilities for 9 months

SMEC 8 months R495, 982.08

Professional services for the development of provincial strategy and implementation plan for the provision of management of animal pounds for 9 months

MSBA 8 months R459, 947.25

Professional services to undertake the design of civil and building works for the Public Transport Facility at Ntabankulu in the Eastern Cape

CAMDEKON 6 months R329, 688.00

Professional services for the establishment of a project management office (PMO) and the Provision of Technical Support

GIBB 36 months R1, 824, 636.00

Total number of projects Total individual consultants Total duration

Work days Total contract value in Rand

4 4 58 R3, 110,253.33

Table 3.15.2 Analysis of consultant appointments using appropriated funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2017 and 31 March 2018

Project title Percentage ownership by HDI groups Percentage management by HDI

groups Number of consultants from HDI groups that work on the

project NONE Only one project for consultancy services was procured within

the 2017/18 financial year. With the increase of the consultancy services scope in the 2018/19 financial year ,the Department will invoke Preferential Procurement Regulation (PPR) 2017 paragraph 4a-c

None, the 2018/19 procurement plan will address the HDI numbers through PPR2017

That didn’t form part of the project specification, this will be addressed by PPR 2017

Table 3.15.3 Report on consultant appointments using Donor funds for the period 1 April 2017 and 31 March 2018

Project title Total Number of consultants that worked on project

Duration (Work days)

Donor and contract value in Rand

Not Applicable

Total number of projects Total individual consultants Total duration

Work days Total contract value in Rand

91

Table 3.15.4 Analysis of consultant appointments using Donor funds, in terms of Historically Disadvantaged Individuals (HDIs) for the period 1 April 2017 and 31 March 2018

Project title Percentage ownership by HDI groups

Percentage management by HDI groups

Number of consultants from HDI groups that work on the project

Not applicable

3.16. Severance Packages

Table 3.16.1 Granting of employee initiated severance packages for the period 1 April 2017 and 31 March 2018

Salary band Number of applications received

Number of applications referred to the MPSA

Number of applications supported by MPSA

Number of packages approved by department

Lower skilled (Levels 1-2) Skilled Levels 3-5) Highly skilled production (Levels 6-8)

Highly skilled supervision(Levels 9-12)

Senior management (Levels 13-16)

Total

92

PART E: FINANCIAL MANAGEMENT Report of the auditor-general to the Eastern Cape Provincial Legislature on vote no. 10: Department of Transport Report on the audit of the financial statements Opinion

1. I have audited the financial statements of the Department of Transport set out on pages 102 to 195 which comprise the appropriation statement, the statement of financial position as at 31 March 2018, the statement of financial performance, statement of changes in net assets, and cash flow statement for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies.

2. In my opinion the financial statements present fairly, in all material respects, the financial position of the Department of Transport as at 31 March 2018, and its financial performance and cash flows for the year then ended in accordance with the Modified Cash Standard (MCS) prescribed by the National Treasury and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No.1 of 1999) (PFMA) and the Division of Revenue Act of South Africa, 2017 (Act No. 3 of 2017) (DoRA).

Basis for opinion 3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities under those standards are

further described in the auditor-general’s responsibilities for the audit of the financial statements section of this auditor’s report.

4. I am independent of the department in accordance with the International Ethics Standards Board for Accountants’ Code of ethics for professional accountants (IESBA code) and the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA code.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Emphasis of matters 6. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Irregular expenditure 7. Irregular expenditure of R153,4 million that has accumulated over a number of years and that has not been recovered, written off or

condoned is disclosed in note 25 to the financial statements. Irregular expenditure of R24,5 million incurred during the current year is included in the amount disclosed.

Impairment of investment

8. Material debt impairments of R140 million (2016-17: R123,9 million) on investments were disclosed in note 13 to the financial statements. This impairment arose as a result of adjusting the investment to the net asset value of the affected entity.

Impairment of accrued department revenue 9. Material debt impairments of R30,4 million (2016-17: R 29,1 million) on accrued departmental revenue were disclosed in note 24.2 to

the financial statements. This arose from the poor expected recoverability of income from institutions performing an agency function on behalf of the department

Responsibilities of the accounting officer for the financial statements

10. The accounting officer is responsible for the preparation and fair presentation of the financial statements in accordance with the MCS prescribed by the National Treasury and the requirements of the PFMA and DoRA, and for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

94

11. In preparing the financial statements, the accounting officer is responsible for assessing the department’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the accounting officer either intends to liquidate the department or to cease operations, or has no realistic alternative but to do so.

Auditor-general’s responsibilities for the audit of the financial statements

12. My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

13. A further description of my responsibilities for the audit of the financial statements is included in the annexure to this auditor’s report.

Report on the audit of the annual performance report Introduction and scope

14. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof, I have a responsibility to report material findings on the reported performance information against predetermined objectives for selected programmes presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance.

15. My procedures address the reported performance information, which must be based on the approved performance planning documents of the department. I have not evaluated the completeness and appropriateness of the performance indicators included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, my findings do not extend to these matters.

16. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected programmes presented in the annual performance report of the department for the year ended 31 March 2018:

Programmes Pages in the annual performance report Programme 3 - Transport Operations 37 to 41 Programme 4 - Transport Regulation 42 to 45

17. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete.

18. The material findings in respect of the reliability and usefulness of programme 3: Transport Operations and programme 4: Transport Regulation are as follows:

Programme 3 - Transport Operations

P38: Number of maritime initiatives

19. The planned target for this indicator was not specific in clearly identifying the nature and required level of performance and is not measurable.

95

P29 Number of routes operated under the Provincial Integrated Public Transport Master Plan (PIPTMP).

20. The reason for the variance between the planned target of 1 and the reported achievement of 0, was not reported (or explanations were invalid) in the annual performance report.

P39 Number of schools benefiting from the transport scheme

21. The reason provided for the variance between the planned target of 738 and the reported achievement of 746, did not agree with the supporting evidence provided.

Programme 4 - Transport regulation

P46 Number of PRE hearings conducted

22. I was unable to obtain sufficient appropriate audit evidence to support the reason for the variance between the planned target of 72 and the achievement of 38 reported in the annual performance report. In addition, the variance was incorrectly recorded as 2. This was due to incorrect evidence provided. I was unable to confirm the reported reason for the variance by alternative means. Consequently, I was unable to determine whether any adjustments were required to the reported reason for the variance.

Various indicators

23. The department did not have an adequate record keeping system to enable reliable reporting on achievement of the indicators listed below. As a result, I was unable to obtain sufficient appropriate audit evidence in some instances, while in other cases the supporting evidence provided did not agree to the reported achievements. Based on the supporting evidence that was provided, the achievement of these indicators was different to the reported achievement in the annual performance report. I was also unable to further confirm the reported achievements by alternative means. Consequently, I was unable to determine whether any further adjustments were required to the reported achievements of the indicators listed below.

Indicator description Reported achievement P48: Number of speed operations conducted 2 179 P50: Number of drunken driving operations conducted 713 P51: Number of vehicles stopped and checked 1 086 505 P52: Number of public transport operations conducted 3 007 Other matters

24. I draw attention to the matters below: Achievement of planned targets

25. Refer to the annual performance report on pages 37 – 41 and 42 - 45 for information on the achievement of planned targets for the year and explanations provided for the under and over achievement of a significant number of targets. This information should be considered in the context of the material findings on the usefulness and reliability of the reported performance information in paragraphs 19 to 23 of this report.

Adjustment of material misstatements

26. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of programme 3: Transport Operations. As management subsequently corrected only some of the misstatements, I raised a material finding on the reliability of the reported performance information. The misstatements that were not corrected is reported above.

96

Report on the audit of compliance with legislation

Introduction and scope

27. In accordance with the PAA and the general notice issued in terms thereof, I have a responsibility to report material findings on the compliance of the department with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance.

28. The material findings on compliance with specific matters in key legislation are as follows:

Strategic planning

29. Specific information systems were not established to enable the monitoring of progress made towards achieving targets, core objectives and service delivery as required by public service regulation 25(1 )(e)(i) and (iii).

Expenditure management

30. Effective steps were not taken to prevent irregular expenditure amounting to R24,5 million, as disclosed in note 25 to the annual financial statements, as required by section 38(1)(c)(ii) of the PFMA and Treasury Regulation 9.1.1. Irregular expenditure of R13,7 million (56%) was incurred as the result of incorrect application of National Treasury circular relating to upgrading of posts for traffic officers. A further R9,2 million (38%) of the irregular expenditure disclosed was incurred as a result of non-compliance with SCM regulations, where non-bidders in the scholar transport contract were allocated and paid for routes they serviced without participating in the SCM process for the contract.

Financial statements

31. The financial statements submitted for auditing were not supported by full and proper records as required by section 40(1) (a) of the PFMA. A material misstatements of lease commitments was identified by the auditors in the submitted financial statement was corrected and the supporting records were provided subsequently, resulting in the financial statements receiving an unqualified opinion

Revenue management

32. Interest was not charged on debts as required by Treasury Regulation 11.5.1.

Procurement and contract management

33. Bid documentation for procurement of commodities designated for local content and production, did not meet the stipulated the minimum threshold for local production and content as required by the 2017 preferential procurement regulation 8 (2).

34. Commodities designated for local content and production, were procured from suppliers who did not submit a declaration on local production and content as required by the 2017 preferential procurement regulation.

35. Commodities designated for local content and production, were procured from suppliers who did not meet the prescribed minimum

threshold for local production and content, as required by the 2017 preferential procurement regulation 8(5).

Consequence management

36. I was unable to obtain sufficient appropriate audit evidence that losses resulting from irregular expenditure were recovered from the liable person, as required by treasury regulation 9.1.4.

37. I was unable to obtain sufficient appropriate audit evidence that disciplinary steps were taken against officials who had incurred fruitless and wasteful expenditure as required by section 38(1 )(h)(iii) of the PFMA. This was due to proper and complete records that were not maintained as evidence to support the investigations into fruitless and wasteful expenditure.

38. Disciplinary steps were not taken against some of the officials who had incurred or permitted fruitless and wasteful expenditure, as

required by section 38(1)(h)(iii) of the PFMA.

97

Other information

39. The accounting officer is responsible for the other information. The other information comprises the information included in the annual report. The other information does not include the financial statements, the auditor’s report and those selected programmes presented in the annual performance report that have been specifically reported in this auditor’s report.

40. My opinion on the financial statements and findings on the reported performance information and compliance with legislation do not cover the

other information and I do not express an audit opinion or any form of assurance conclusion thereon.

41. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements and the selected programmes presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

42. If, based on the work I have performed, I conclude that there is a material misstatement in this other information, I am required to report that fact. I have nothing to report in this regard.

Internal Control deficiencies

43. I considered internal control relevant to my audit of the financial statements, reported performance information and compliance with applicable

legislation; however, my objective was not to express any form of assurance on it. The matters reported below are limited to the significant internal control deficiencies that resulted in the basis for the unqualified opinion, the findings on the annual performance report and the findings on compliance with legislation included in this report.

• The department did not have sufficient monitoring controls in place. This deficiency led to reportable findings on the annual financial statements, performance report and compliance with laws and regulations.

• Additionally, the department did not adequately implement its action plans to address shortcomings in scholar transport, compliance and performance management that were also identified in previous financial years.

• Adequate and robust systems and processes were not in place to monitor compliance with applicable laws and regulations and to produce credible and accurate financial and performance reporting.

• Management did not respond to all the recommendations of the audit committee and internal audit which impacted the effectiveness of these governance structures and resulted in repeat audit findings being raised.

Other reports

44. I draw attention to the following engagements conducted by various parties that had, or could have, an impact on the matters reported in the department’s financial statements, reported performance information, compliance with applicable legislation and other related matters. These reports did not form part of my opinion on the financial statements or my findings on the reported performance information or compliance with legislation.

45. Investigations

The department is investigating officials in the scholar transport programme who has been suspended due to not following the department’s policies.

98

Annexure - Auditor-general’s responsibility for the audit

1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my audit of the financial statements, and the procedures performed on reported performance information for selected programmes and on the department’s compliance with respect to the selected subject matters.

Financial statements

2. In addition to my responsibility for the audit of the financial statements as described in this auditor’s report, I also: • identify and assess the risks of material misstatement of the financial statements whether due to fraud or error, design and

perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the department’s internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the accounting officer.

• conclude on the appropriateness of the accounting officer’s use of the going concern basis of accounting in the preparation of the financial statements. I also conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Department of Transport’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the financial statements. My conclusions are based on the information available to me at the date of this auditor’s report. However, future events or conditions may cause a department to cease continuing as a going concern.

• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Communication with those charged with governance

3. I communicate with the accounting officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.

4. I also confirm to the accounting officer that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to have a bearing on my independence and, where applicable, related safeguards.

99

APPR

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103

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68

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33

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39

9

380

2,6

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3 989

So

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2 195

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0

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94

1

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Publi

c cor

pora

tions

and p

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s

48

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48

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48

7,496

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466 5

76

46

3 525

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117,7

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117,7

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117,7

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113 8

01

11

3 801

P

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s

37

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-

-

37

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9,792

647

99.8%

352 7

75

34

9 724

Su

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prod

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and p

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9,792

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352 7

75

34

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104

Hous

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s

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575

9,5

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(6

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1

8,488

18,4

86

2 10

0.0%

9 326

9 319

Socia

l ben

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9,36

4

9,778

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18,4

88

1

8,486

2

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9 3

26

9 3

19

Othe

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s

59,1

74

1,8

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56

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61,6

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5

6,834

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72

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72

218

Build

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10,5

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138

3,61

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12

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029

Build

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7,13

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3,

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26

50.6%

12 04

3

12 02

9 Ma

chine

ry an

d equ

ipmen

t

48,6

24

5,2

89

56

9

54,4

82

5

3,222

1 260

97

.7%

60

511

60

146

Tran

spor

t equ

ipmen

t

29,4

13

5,7

79

(1,20

0)

3

3,992

33,9

67

25

99.9%

44 52

0

44 46

6 Ot

her m

achin

ery a

nd

equip

ment

1

9,211

(4

90)

1,7

69

2

0,490

19,2

55

1,2

35

94.0%

15

991

15

680

S

oftwa

re

- -

- -

- -

- 44

43

Pa

ymen

ts fo

r fin

ancia

l ass

ets

-

-

-

-

-

-

-

-

451

Tota

l

1

,843,2

04

-

-

1,84

3,204

1

,836,9

39

6,2

65

99.7%

1

,743,6

98

1,73

9,472

105

Prog

ram

me 1

: AD

MINI

STRA

TION

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 %

R'

000

R'00

0 Su

b pr

ogra

mm

e

1.

Offic

e of th

e MEC

10

,590

18

5

167

10,94

2

10

,924

18

99

.8%

9 9

53

9 8

61

2.

Mana

geme

nt

41

,790

(10,6

86)

(7

87)

30,31

7

30

,217

100

99

.7%

25

691

25

685

3.

Corp

orate

Sup

port

239,1

26

3,1

85

(1,54

0)

240,7

71

240,4

90

281

99

.9%

23

9 145

238 9

78

4.

Depa

rtmen

tal S

trateg

y

8,377

7,316

(3

,057)

12

,636

12,62

4

12

99.9%

8 179

8 162

To

tal f

or su

b pr

ogra

mm

es

299,8

83

-

(5

,217)

29

4,666

29

4,255

41

1 99

.9%

282,9

68

282,6

86

Econ

omic

class

ifica

tion

Cu

rrent

pay

men

ts

287,4

20

42

3

(4

,543)

28

3,300

28

3,248

52

10

0.0%

26

9,271

269 0

46

Com

pens

atio

n of

empl

oyee

s

21

4,945

-

1,3

77

216,3

22

216,2

73

49

10

0.0%

20

3,370

203 1

44

Salar

ies an

d wag

es

185,7

11

(3,72

5)

2,6

27

184,6

13

184,5

66

47

10

0.0%

17

4,293

174 0

77

Socia

l con

tributi

ons

29,23

4

3,725

(1

,250)

31

,709

31,70

7

2

10

0.0%

29

,077

29

067

Good

s and

serv

ices

72,47

5

423

(5,92

0)

66,97

8

66

,969

9

10

0.0%

65

,767

65

768

Admi

nistra

tive f

ees

37

0

15

(40)

345

34

5

-

10

0.0%

268

26

8 Ad

vertis

ing

1,3

41

62

(7

0)

1,3

33

1,3

33

-

100.0

%

1,9

61

1 9

62

Mino

r ass

ets

54

7

(108

)

(25)

414

41

4 -

100.0

%

18

6

185

Audit

costs

: Exte

rnal

6,5

00

19

6

-

6,6

96

6,6

96

-

100.0

%

5,9

72

5 9

72

Bursa

ries:

Emplo

yees

3,286

190

(2

35)

3,2

41

3,2

41

-

100.0

%

4,2

80

4 2

80

106

Prog

ram

me 1

: AD

MINI

STRA

TION

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 %

R'

000

R'00

0 Ca

tering

: Dep

artm

ental

activ

ities

1,4

71

49

8

(23)

1,946

1,946

-

10

0.0%

1,488

1 488

Co

mmun

icatio

n

8,249

(567

)

(44)

7,638

7,637

1

10

0.0%

8,520

8 520

Co

mpute

r ser

vices

18

,559

(2,88

0)

(1,25

0)

14,42

9

14

,429

-

10

0.0%

17

,645

17

645

Cons

ultan

ts: B

usine

ss an

d ad

visor

y ser

vices

1,412

(24)

7

1,3

95

1,3

95

-

100.0

%

73

2

732

Lega

l ser

vices

2,450

3,923

(3

,057)

3,316

3,316

-

10

0.0%

4,251

4 251

Co

ntrac

tors

36

0

(129

)

-

23

1

230

1

99.6%

299

29

9 Ag

ency

and s

uppo

rt / o

utsou

rced

servi

ces

22

7

(57)

-

17

0

170

-

100.0

%

28

28

En

tertai

nmen

t

88

-

-

88

87

1

98

.9%

80

80

Fle

et se

rvice

s (inc

luding

go

vern

ment

motor

tran

spor

t

1,764

535

(4

66)

1,8

33

1,8

33

-

10

0.0%

1,185

1 185

Inv

entor

y: Ma

terial

s and

supp

lies

-

1

-

1

1

-

10

0.0%

-

- Co

nsum

able

supp

lies

1,2

83

(3

07)

(1

01)

87

5

875

-

100.0

%

69

8

698

Cons

umab

le: S

tation

ery,

print

ing

and o

ffice s

uppli

es

2,5

20

(4

65)

(1

45)

1,9

10

1,9

08

2

99.9%

1,532

1 532

Pr

oper

ty pa

ymen

ts

2,114

(1

,047)

-

1,0

67

1,0

67

-

100.0

%

96

8

968

Tran

spor

t pro

vided

1,685

242

(5

3)

1,8

74

1,8

74

-

100.0

%

85

2

853

Trav

el an

d sub

sisten

ce

10,41

8

1,217

(1

,086)

10

,549

10,54

6

3

10

0.0%

10

,061

10

061

Train

ing an

d dev

elopm

ent

3,3

23

(2

5)

-

3,298

3,298

-

10

0.0%

2,112

2 112

107

Prog

ram

me 1

: AD

MINI

STRA

TION

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 %

R'

000

R'00

0 Op

erati

ng pa

ymen

ts

854

87

68

1,0

09

1,0

09

-

10

0.0%

281

28

1 Ve

nues

and f

acilit

ies

3,6

44

(9

27)

60

0

3,317

3,316

1

10

0.0%

2,292

2 293

Re

ntal a

nd hi

ring

10

(7)

-

3

3

-

10

0.0%

76

75

Inte

rest

and

rent

on

land

-

-

-

-

6

(6

)

-

13

4

134

Inter

est

-

-

-

-

6

(6

)

-

13

4

134

Tran

sfer

s and

subs

idies

5,258

(1

)

(451

)

4,806

4,806

-

10

0.0%

3 805

3 805

Ho

useh

olds

5,2

58

(1)

(4

51)

4,8

06

4,8

06

-

100.0

%

3 8

05

3 8

05

Socia

l ben

efits

5,2

58

(1)

(4

51)

4,8

06

4,8

06

-

100.0

%

3 8

05

3 8

05

Paym

ents

for c

apita

l ass

ets

7,2

05

(4

22)

(2

23)

6,5

60

6,2

01

35

9

94.5%

9 892

9 835

Ma

chine

ry an

d equ

ipmen

t

7,205

(422

)

(223

)

6,560

6,201

359

94

.5%

9 8

48

9 7

92

Tran

spor

t equ

ipmen

t

2,849

(35)

-

2,8

14

2,8

14

-

100.0

%

2 9

05

2 8

73

Othe

r mac

hiner

y and

equip

ment

4,3

56

(3

87)

(2

23)

3,7

46

3,3

87

35

9

90.4%

6 943

6 919

So

ftwar

e and

othe

r intan

gible

asse

ts -

- -

- -

- -

44

43

Tota

l

29

9,883

-

(5,21

7)

294,6

66

294,2

55

411

99.9%

28

2,968

28

2,686

108

1.1 O

FFIC

E OF

THE

MEC

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

10

,390

29

7

167

10,85

4

10

,846

8

99

.9%

9 7

39

9 6

52

Comp

ensa

tion o

f emp

loyee

s

5,037

(123

)

-

4,9

14

4,9

06

8 99

.8%

5 5

30

5 4

44

Good

s and

servi

ces

5,3

53

42

0

167

5,9

40

5,9

40

-

10

0.0%

4 209

4 208

Tr

ansf

ers a

nd su

bsid

ies

- -

- -

- -

- 47

47

Pa

ymen

ts fo

r cap

ital a

sset

s

200

(1

12)

-

88

78

10

88

.6%

16

7

162

Mach

inery

and e

quipm

ent

20

0

(112

)

-

88

78

10

88.6%

167

16

2 To

tal

10,59

0

185

16

7

10

,942

10,92

4

18

99

.8%

9,9

53

9,8

61

109

1.2 M

ANAG

EMEN

T 20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fun

ds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

39,6

76

(9,91

8)

(7

87)

2

8,971

28,9

62

9 10

0.0%

24 79

2

24 78

6 Co

mpen

satio

n of e

mploy

ees

3

0,033

(6

,277)

(694

)

23,0

62

2

3,059

3

100.0

%

18

758

18

751

Good

s and

servi

ces

9,64

3

(3

,641)

(93)

5,

909

5,90

3

6

99.9%

6 034

6 035

Tr

ansf

ers a

nd su

bsid

ies

43

0

153

-

583

58

3

-

100.0

%

60

60

Hous

ehold

s

430

15

3

-

58

3

583

- 10

0.0%

60

60

Pa

ymen

ts fo

r cap

ital a

sset

s

1,

684

(9

21)

-

763

67

2

91

88

.1%

83

9

839

Mach

inery

and e

quipm

ent

1,68

4

(921

)

-

76

3

672

91

88.1%

839

83

9

To

tal

4

1,790

(1

0,686

)

(787

)

30,3

17

3

0,217

10

0 99

.7%

2

5,691

25

,685

110

1.3 C

ORPO

RATE

SUP

PORT

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

22

9,286

2,490

(866

)

23

0,910

23

0,878

32

100.0

%

22

6 738

226 6

06

Comp

ensa

tion o

f emp

loyee

s

17

4,164

5,080

2,071

18

1,315

18

1,277

38

10

0.0%

172 4

01

17

2 268

Go

ods a

nd se

rvice

s

55

,122

(2,59

0)

(2,93

7)

49,59

5

49

,595

-

100.0

%

54

203

54

204

Inter

est a

nd re

nt on

land

-

-

-

-

6

(6)

-

134

13

4 Tr

ansf

ers a

nd su

bsid

ies

4,8

28

(1

54)

(4

51)

4,2

23

4,2

23

-

10

0.0%

3 698

3 698

Ho

useh

olds

4,8

28

(1

54)

(4

51)

4,2

23

4,2

23

-

10

0.0%

3 698

3 698

Pa

ymen

ts fo

r cap

ital a

sset

s

5,012

849

(2

23)

5,6

38

5,3

89

24

9 95

.6%

8 7

09

8 6

74

Mach

inery

and e

quipm

ent

5,0

12

84

9

(223

)

5,638

5,389

249

95.6%

8 709

8 674

To

tal

239,1

26

3,1

85

(1,54

0)

240,7

71

240,4

90

281

99.9%

23

9,145

23

8,978

111

1.4 D

EPAR

TMEN

TAL

STRA

TEGY

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fun

ds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

8,

068

7,5

54

(3,05

7)

1

2,565

12,5

62

3 10

0.0%

8 002

8 002

Co

mpen

satio

n of e

mploy

ees

5,71

1

1,320

-

7,03

1

7,

031

- 10

0.0%

6 681

6 681

Go

ods a

nd se

rvice

s

2,

357

6,2

34

(3,05

7)

5,53

4

5,

531

3 99

.9%

1 3

21

1 3

21

Paym

ents

for c

apita

l ass

ets

30

9

(238

)

-

71

62

9 87

.3%

17

7

160

Mach

inery

and e

quipm

ent

30

9

(238

)

-

71

62

9 87

.3%

17

7

160

Tota

l

8,

377

7,3

16

(3,05

7)

1

2,636

12,6

24

12

99.9%

8,

179

8,1

62

112

1.4 D

EPAR

TMEN

TAL

STRA

TEGY

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

8,068

7,554

(3

,057)

12

,565

12,56

2

3

100.0

%

8 0

02

8 0

02

Comp

ensa

tion o

f emp

loyee

s

5,711

1,320

-

7,0

31

7,0

31

- 10

0.0%

6 681

6 681

Go

ods a

nd se

rvice

s

2,357

6,234

(3

,057)

5,534

5,531

3

99.9%

1 321

1 321

Pa

ymen

ts fo

r cap

ital a

sset

s

309

(2

38)

-

71

62

9

87.3%

177

16

0 Ma

chine

ry an

d equ

ipmen

t

309

(2

38)

-

71

62

9

87.3%

177

16

0

To

tal

8,3

77

7,3

16

(3,05

7)

12,63

6

12

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12

99.9%

8,179

8,162

113

Prog

ram

me 2

: TR

ANSP

ORT

INFR

ASTR

UCTU

RE

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

Varia

nce

Expe

nditu

re

as %

of f

inal

appr

opria

tion

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 %

R'

000

R'00

0 Su

b pr

ogra

mm

e

1. Pr

ogra

mme S

uppo

rt

1,299

86

-

1,3

85

75

7

628

54

.7%

1 3

84

1 3

04

2.

Infra

struc

ture P

lannin

g

15

,274

(8

6)

(1,30

0)

13,88

8

9,664

4,224

69.6%

10 54

0

8 129

3.

Infra

struc

ture D

esign

-

- -

- -

- -

659

600

Tota

l for

sub

prog

ram

mes

16

,573

-

(1

,300)

15

,273

10,42

1

4,852

68

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12,58

3

10

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Econ

omic

class

ifica

tion

Cu

rrent

pay

men

ts

12,75

5

(1

,628)

(1

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9,827

9,075

752

92

.3%

12

306

9 3

54

Com

pens

atio

n of

empl

oyee

s

7,737

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57)

-

7,580

6,901

679

91

.0%

8 2

04

5 9

64

Salar

ies an

d wag

es

7,0

96

(80)

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7,0

16

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12

50

4

92.8%

7 451

5 492

So

cial c

ontrib

ution

s

641

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56

4

389

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5

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753

47

2 Go

ods a

nd se

rvice

s

5,018

(1

,471)

(1

,300)

2,247

2,174

73

96.8%

4 102

3 390

Ad

vertis

ing

87

(7

3)

-

14

9

5

64.3%

55

- Mi

nor a

ssets

10

-

-

10

-

10

- 6

6 Ca

tering

: Dep

artm

ental

activ

ities

9

-

-

9

8

1

88

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67

119

114

Comp

uter s

ervic

es

25

7

(8

)

-

24

9

247

2

99.2%

210

20

9 Inf

rastr

uctur

e and

plan

ning

servi

ces

3,0

83

(7

42)

(1,30

0)

1,0

41

1,0

30

11

98

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2 2

96

1 6

81

Contr

actor

s

-

-

-

-

-

-

-

31

5

313

Enter

tainm

ent

2

-

-

2

2

-

10

0.0%

2

2 Co

nsum

able

supp

lies

27

5

(14)

-

26

1

261

-

100.0

%

- -

Cons

umab

le: S

tation

ery,

print

ing

and o

ffice s

uppli

es

41

(3

2)

-

9

9

-

10

0.0%

7

6 Op

erati

ng le

ases

-

157

- 15

7 15

7 -

100.0

%

- -

Trav

el an

d sub

sisten

ce

1,2

00

(7

59)

-

441

42

7

14

96.8%

844

82

1 Op

erati

ng pa

ymen

ts

22

-

-

22

-

22

- 2

- Ve

nues

and f

acilit

ies

32

-

-

32

24

8

75.0%

298

23

3 Tr

ansf

ers a

nd su

bsid

ies

-

167

-

167

16

6

1

99

.4%

- -

Ho

useh

olds

-

167

-

167

16

6

1

99

.4%

- -

S

ocial

bene

fits

-

167

-

167

16

6

1

99

.4%

- -

Paym

ents

for c

apita

l ass

ets

3,8

18

1,4

61

-

5,279

1,180

4,099

22.4%

277

22

8 Bu

ilding

s and

othe

r fixe

d stru

cture

s

3,500

1,131

-

4,6

31

1,1

31

3,5

00

24

.4%

- -

Bu

ilding

s

3,500

1,131

-

4,6

31

1,1

31

3,5

00

24

.4%

- -

115

Mach

inery

and e

quipm

ent

31

8

330

-

648

49

59

9

7.6%

277

22

8 Tr

ansp

ort e

quipm

ent

-

1

-

1

-

1

- -

- Ot

her m

achin

ery a

nd eq

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nt

318

32

9

-

64

7

49

598

7.6

%

27

7

228

Paym

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or fi

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ial as

sets

-

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1 To

tal

16,57

3

-

(1,30

0)

15,27

3

10

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4,8

52

68.2%

12

,583

10,03

3 2.1

TRA

NSPO

RT IN

FRAS

TRUC

TURE

20

17/18

20

16/17

Adju

sted

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n Sh

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ifica

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07

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76

Good

s and

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98

1

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)

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0

542

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167

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167

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6

1

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- Ho

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167

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167

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6

1

99.4%

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- Pa

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ts fo

r cap

ital a

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s

318

33

0

-

64

8

49

59

9 7.6

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27

7

228

Mach

inery

and e

quipm

ent

31

8

330

-

648

49

599

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277

22

8

To

tal

1,2

99

86

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1,385

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84

1,3

04

116

2.2 IN

FRAS

TRUC

TURE

PLA

NNIN

G 20

17/18

20

16/17

Adju

sted

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prop

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n Sh

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men

t Fi

nal

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pend

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rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

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l Ap

prop

riatio

n Ac

tual

expe

nditu

re

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omic

class

ifica

tion

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0 R'

000

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0 R'

000

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000

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nt p

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ents

11

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7)

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0)

9,2

57

8,5

33

72

4 92

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10

540

7 6

76

Comp

ensa

tion o

f emp

loyee

s

7,737

(1

57)

-

7,580

6,901

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91.0%

8 204

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Go

ods a

nd se

rvice

s

4,037

(1

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1,6

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1,6

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45

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1 714

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r cap

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s

3,500

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4,6

31

1,1

31

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s and

othe

r fixe

d stru

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s

3,500

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31

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ts fo

r fin

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l ass

ets

- -

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Tota

l

15

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(8

6)

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0)

13,88

8

9,664

4,224

69

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10,54

0

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2.3

INFR

ASTR

UCTU

RE D

ESIG

N 20

17/18

20

16/17

Adju

sted

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prop

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pend

iture

as

% o

f fin

al ap

prop

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n

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l Ap

prop

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n Ac

tual

expe

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re

Econ

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class

ifica

tion

R'00

0 R'

000

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0 R'

000

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000

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0 R'

000

Curre

nt p

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ents

-

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- -

659

600

Good

s and

serv

ices

- -

- -

- -

- 65

9 60

0 To

tal

- -

- -

- -

- 65

9 60

0

117

Prog

ram

me 3

: TR

ANSP

ORT

OPER

ATIO

NS

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

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nce

Expe

nditu

re

as %

of f

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appr

opria

tion

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l Ap

prop

riatio

n Ac

tual

expe

nditu

re

R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 %

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000

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0 Su

b pr

ogra

mm

e

1.

Prog

ramm

e Sup

port

12,52

4

48

0

(1

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11

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11,55

5

28

99

.8%

7 8

92

7 8

69

2.

Publi

c Tra

nspo

rt Se

rvice

s

50

4,417

(3

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(20)

50

0,678

50

0,001

677

99

.9%

47

5 766

472 6

48

3. Tr

ansp

ort S

afety

and C

ompli

ance

58

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1)

2,3

97

56,30

2

56

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9

100.0

%

55

868

55

868

4.

Infra

struc

ture O

pera

tions

54

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(6,18

5)

2,0

56

50,04

0

50

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3

10

0.0%

51 36

7

51 17

7

5. Sc

holar

Tra

nspo

rt

50

3,055

13

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4,9

39

521,5

39

521,5

17

22

100.0

%

48

3 892

485 8

48

Tota

l for

sub

prog

ram

mes

1,132

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-

7,951

1,140

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1,1

39,40

3

73

9 99

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1 0

74 78

5

1 073

410

Econ

omic

class

ifica

tion

Cu

rrent

pay

men

ts

624,1

18

(4

35)

7,0

87

630,7

70

630,7

26

44

100.0

%

58

1 575

583 5

17

Com

pens

atio

n of

empl

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s

89

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33)

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90

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0

9

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85

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85

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Salar

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78,13

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743

77,98

4

77

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2

10

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3

74 30

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cial c

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ution

s

11

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12,09

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8

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8 Go

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nd se

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s

53

4,449

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)

6,344

54

0,691

54

0,651

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10

0.0%

496 1

24

49

8 065

118

Admi

nistra

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ees

53

(5

0)

-

3

3

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10

0.0%

86

86

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vertis

ing

78

1

(57)

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72

4

724

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%

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60

1 2

54

Mino

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33

2

(267

)

-

65

64

1

98.5%

520

50

5 Ca

tering

: Dep

artm

ental

activ

ities

1,4

66

(1

3)

-

1,453

1,451

2

99

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2 1

62

2 1

62

Comm

unica

tion

17

2

(105

)

-

67

67

-

100.0

%

75

24

Comp

uter s

ervic

es

1,0

00

(1,00

0)

-

-

-

-

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- Co

nsult

ants:

Bus

iness

and

advis

ory s

ervic

es

2,4

64

(1

11)

-

2,353

2,353

-

10

0.0%

2 833

2 833

Inf

rastr

uctur

e and

plan

ning

servi

ces

7,1

07

(2,95

9)

-

4,148

4,148

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10

0.0%

4 678

4 603

Co

ntrac

tors

4,0

07

(2,68

3)

-

1,324

1,320

4

99

.7%

41

4

413

Agen

cy an

d sup

port

/ outs

ource

d se

rvice

s

6,818

(317

)

-

6,5

01

6,5

01

-

100.0

%

3 8

34

3 8

34

Enter

tainm

ent

18

(3)

-

15

14

1

93

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16

12

Fleet

servi

ces (

includ

ing

gove

rnme

nt mo

tor tr

ansp

ort

2,8

21

18

4

-

3,0

05

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03

2

99.9%

1 864

1 863

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nsum

able

supp

lies

2,2

08

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9)

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2

99

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29

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29

Cons

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tation

ery,

print

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and o

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1,0

71

(1

65)

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906

90

5

1

99

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1 1

35

1 1

25

Oper

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leas

es

30

0

170

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47

0

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9,0

48

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0)

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3

10

0.0%

6 866

6 862

119

Tran

spor

t pro

vided

48

2,132

14

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6,4

71

503,2

46

503,2

39

7

100.0

%

45

9 278

46

1 420

Tr

avel

and s

ubsis

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6,605

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(64)

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16

99

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8 0

31

8 0

00

Train

ing an

d dev

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ent

2,9

67

(2,96

7)

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26

26

Op

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ng pa

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ts

1,215

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63

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1,864

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1

100.0

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1 3

87

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84

Inter

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nt on

land

-

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5

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89

39

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1,883

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1,883

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)

1,883

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s

48

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48

8,143

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7,496

647

99

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46

6 576

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23

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pora

tions

11

7,704

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11

7,704

11

7,704

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01

11

3 801

S

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prod

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11

7,704

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7,704

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0.0%

113 8

01

11

3 801

Pr

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enter

prise

s

37

0,439

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-

37

0,439

36

9,792

64

7

99.8%

352 7

75

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9 722

Subs

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on pr

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ts an

d p

rodu

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e)

370,4

39

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370,4

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369,7

92

64

7

99.8%

-

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120

Othe

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nsfer

s to p

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s

-

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-

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35

2 775

349 7

22

Hous

ehold

s

1,263

39

72

1,3

74

1,3

74

-

100.0

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1 7

49

1 7

49

Socia

l ben

efits

1,0

52

25

0

72

1,3

74

1,3

74

-

100.0

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1 7

49

1 7

49

Othe

r tra

nsfer

s to h

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holds

211

(2

11)

-

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-

-

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ymen

ts fo

r cap

ital a

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s

16

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396

79

2

17

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17,92

4

48

99

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23

091

22

827

Build

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ixed s

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2,2

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s

2,200

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14,58

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2,596

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17,97

2

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11 04

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4,4

36

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2,9

94

2,9

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20

99.3%

8 297

8 276

Ot

her m

achin

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10

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2,8

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1,9

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14,97

8

14

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28

99.8%

2 751

2 522

To

tal

1,1

32,19

1 -

7,9

51

1,1

40,14

2

1,139

,403

739

99.9%

1 074

785

1 0

73 41

0

121

3.1 P

ROGR

AMME

SUP

PORT

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

8,

798

547

(6

3)

9,28

2

9,273

9

99.9%

4 355

4 353

Co

mpen

satio

n of e

mploy

ees

1,76

8

105

-

1,

873

1,8

70

3 99

.8%

1 6

65

1 6

66

Good

s and

servi

ces

7,03

0

442

(6

3)

7,40

9

7,403

6

99.9%

2 690

2 687

Pa

ymen

ts fo

r cap

ital a

sset

s

3,

726

(6

7)

(1,35

8)

2,30

1

2,282

19

99

.2%

3 5

37

3 5

16

Mach

inery

and e

quipm

ent

3,72

6

(67)

(1

,358)

2,

301

2,2

82

19

99.2%

3 537

3 516

To

tal

1

2,524

48

0

(1

,421)

11,5

83

11,55

5

28

99

.8%

7,89

2

7,869

3.2

PUB

LIC

TRAN

SPOR

T SE

RVIC

ES

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

Varia

nce

Expe

nditu

re

as %

of f

inal

appr

opria

tion

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

16

,117

(3,69

3)

-

12

,424

12,42

2

2

100.0

%

8 4

71

8 4

60

Comp

ensa

tion o

f emp

loyee

s

7,489

163

-

7,652

7,652

-

100.0

%

7 4

60

7 4

60

122

Good

s and

servi

ces

8,6

28

(3,85

6)

-

4,772

4,770

2

100.0

%

1 0

11

1 0

00

Tran

sfer

s and

subs

idies

48

8,143

-

-

48

8,143

48

7,496

647

99.9%

467 0

96

46

4 043

Pu

blic c

orpo

ratio

ns an

d priv

ate

enter

prise

s

48

8,143

-

-

48

8,143

48

7,496

647

99.9%

46

6,576

463,5

23

Paym

ents

for c

apita

l ass

ets

15

7

(26)

(20)

111

83

28

74

.8%

19

9

145

Mach

inery

and e

quipm

ent

15

7

(26)

(20)

111

83

28

74

.8%

19

9

145

Tota

l

50

4,417

(3

,719)

(20)

50

0,678

50

0,001

677

99.9%

47

5,766

472,6

48

3.3 T

RANS

PORT

SAF

ETY

AND

COMP

LIAN

CE

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

Varia

nce

Expe

nditu

re

as %

of f

inal

appr

opria

tion

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

54,6

12

(3,18

6)

2,2

11

5

3,637

53,6

28

9 10

0.0%

52 46

3

52 46

3 Co

mpe

nsat

ion

of

empl

oyee

s

41,7

35

(1,53

6)

2,2

11

4

2,410

42,4

10

- 10

0.0%

43 54

3

43 54

3 Go

ods a

nd se

rvice

s

12,8

77

(1,65

0)

-

11,2

27

1

1,218

9

99.9%

8 920

8 920

Tr

ansf

ers a

nd

subs

idies

2,

134

(2

11)

-

1,

923

1,92

3

-

100.0

%

2 8

70

2 8

70

Depa

rtmen

tal ag

encie

s an

d acc

ounts

1,

883

-

-

1,88

3

1,

883

- 10

0.0%

1 794

1 794

123

Hous

ehold

s

251

(2

11)

-

40

40

-

100.0

%

1 0

76

1 0

76

Paym

ents

for c

apita

l ass

ets

1,2

80

(7

24)

18

6

742

74

2

-

100.0

%

53

5

535

Mach

inery

and e

quipm

ent

1,2

80

(7

24)

18

6

742

74

2

-

100.0

%

53

5

535

To

tal

58,02

6

(4

,121)

2,397

56

,302

56,29

3

9

100.0

%

55,86

8

55

,868

3.4 IN

FRAS

TRUC

TURE

OPE

RATI

ONS

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

Varia

nce

Expe

nditu

re

as %

of f

inal

appr

opria

tion

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

42

,291

(8,05

2)

-

34

,239

34,23

7

2

100.0

%

33

419

33

269

Comp

ensa

tion o

f emp

loyee

s

15

,506

87

4

-

16,38

0

16

,380

- 10

0.0%

15 50

4

15 50

4 Go

ods a

nd se

rvice

s

26

,785

(8,92

6)

-

17

,859

17,85

2

7

100.0

%

17

915

17

765

Inter

est a

nd re

nt on

land

-

-

-

-

5

(5)

- -

- Tr

ansf

ers a

nd su

bsid

ies

93

4

198

72

1,2

04

1,2

04

- 10

0.0%

153

15

3 Ho

useh

olds

93

4

198

72

1,2

04

1,2

04

- 10

0.0%

153

15

3 Pa

ymen

ts fo

r cap

ital a

sset

s

10

,944

1,6

69

1,9

84

14,59

7

14

,596

1

100.0

%

17

795

17

755

124

Build

ing an

d othe

r fixe

d stru

cture

s

2,200

(2

,200)

-

-

-

-

-

12

043

12

029

Mach

inery

and e

quipm

ent

8,7

44

3,8

69

1,9

84

14,59

7

14

,596

1

100.0

%

5 7

52

5 7

26

Tota

l

54

,169

(6,18

5)

2,0

56

50,04

0

50

,037

3

100.0

%

51,36

7

51

,177

3.5 S

CHOL

AR T

RANS

PORT

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

50

2,300

13

,949

4,9

39

521,1

88

521,1

66

22

10

0.0%

482 8

67

48

4 972

Co

mpen

satio

n of e

mploy

ees

23,17

1

61

(1,46

8)

21,76

4

21

,758

6

100.0

%

17

279

17

279

Good

s and

servi

ces

479,1

29

13,88

8

6,407

49

9,424

49

9,408

16

10

0.0%

465 5

88

46

7 693

Tr

ansf

ers a

nd su

bsid

ies

78

52

-

130

13

0

-

100.0

%

- -

Hous

ehold

s

78

52

-

13

0

130

- 10

0.0%

-

- Pa

ymen

ts fo

r cap

ital a

sset

s

677

(4

56)

-

221

22

1

-

100.0

%

1 0

25

87

6 Ma

chine

ry an

d equ

ipmen

t

677

(4

56)

-

221

22

1

-

100.0

%

1 0

25

87

6 To

tal

503,0

55

13,54

5

4,939

52

1,539

52

1,517

22

100.0

%

483,8

92

485,8

48

125

Prog

ram

me 4

: TR

ANSP

ORT

REGU

LATI

ONS

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

Varia

nce

Expe

nditu

re

as %

of f

inal

appr

opria

tion

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 %

R'

000

R'00

0 Su

b pr

ogra

mm

e

1.

Prog

ramm

e Sup

port

5,3

61

9,0

87

-

14

,448

14,44

8

-

10

0.0%

3 558

3 399

2. Tr

ansp

ort A

dmini

strati

on

13,09

5

(817

)

-

12,27

8

12

,276

2

100.0

%

10

682

10

583

3.

Oper

ator L

icens

e and

Per

mits

14,04

2

(3

,947)

-

10,09

5

10

,088

7

99.9%

10 50

7

10 45

4

4. La

w En

force

ment

306,9

28

(4,32

3)

(1,84

0)

300,7

65

300,5

33

232

99.9%

293 5

05

29

3 816

To

tal f

or su

b pr

ogra

mm

es

339,4

26

-

(1

,840)

33

7,586

33

7,345

24

1 99

.9%

31

8 252

318 2

52

Econ

omic

class

ifica

tion

Cu

rrent

pay

men

ts

305,8

87

(9,93

0)

(1,84

0)

294,1

17

294,1

42

(2

5)

10

0.0%

275 5

35

27

5 543

Co

mpe

nsat

ion

of em

ploy

ees

248,7

09

(2,60

3)

(2,12

0)

243,9

86

243,9

84

2

100.0

%

22

8 983

229 5

74

Salar

ies an

d wag

es

214,2

29

(5,47

7)

(2,12

0)

206,6

32

206,6

30

2

100.0

%

19

4 445

195 1

12

Socia

l con

tributi

ons

34,48

0

2,874

-

37,35

4

37

,354

-

100.0

%

34

538

34

462

Good

s and

serv

ices

57,17

8

(7

,327)

280

50,13

1

49

,999

132

99

.7%

46

552

45

969

Admi

nistra

tive f

ees

16

8

(50)

-

11

8

118

-

100.0

%

35

6

354

126

Adve

rtising

50

(50)

424

42

4

421

3

99.3%

217

21

7 Mi

nor a

ssets

1,016

(766

)

-

25

0

250

-

100.0

%

13

4

126

Cater

ing: D

epar

tmen

tal ac

tivitie

s

845

50

-

895

89

3

2

99

.8%

1 1

21

1 0

75

Comm

unica

tion

27

(8)

-

19

15

4

78

.9%

18

11

Comp

uter s

ervic

es

19

(1

9)

-

-

-

-

-

48

- Co

nsult

ants:

Bus

iness

and

advis

ory s

ervic

es

5,089

(522

)

(276

)

4,291

4,291

-

10

0.0%

7 7

18

7 6

76

Contr

actor

s

1,000

(187

)

-

81

3

785

28

96

.6%

1 1

89

1 8

75

Enter

tainm

ent

6

(1

)

-

5

5

-

100.0

%

2 2

Fleet

servi

ces (

includ

ing

gove

rnme

nt mo

tor tr

ansp

ort

18,99

1

1,010

-

20,00

1

19

,981

20

99

.9%

14

644

13

925

Inven

tory o

ther s

uppli

es

-

117

-

117

10

3

14

88.0%

-

- Co

nsum

able

supp

lies

6,0

65

(5,55

5)

35

6

866

86

6

-

10

0.0%

1 116

1 050

Co

nsum

able:

Stat

ioner

y, pr

inting

an

d offic

e sup

plies

6,558

(1

,853)

-

4,7

05

4,7

05

-

100.0

%

5 2

46

5 2

15

Oper

ating

leas

es

2,0

71

(5

00)

-

1,571

1,550

21

98

.7%

1 0

74

1 0

59

Prop

erty

paym

ents

4,7

83

(3

67)

(6

35)

3,7

81

3,7

81

-

100.0

%

4 1

61

4 1

61

Tran

spor

t pro

vided

370

37

6

-

74

6

705

4

1

94.5%

793

79

2

127

Trav

el an

d sub

sisten

ce

7,7

34

10

7

348

8,1

89

8,1

89

-

100.0

%

5 9

22

5 8

66

Oper

ating

paym

ents

42

0

1,054

-

1,4

74

1,4

74

-

100.0

%

80

9

799

Venu

es an

d fac

ilities

1,966

(162

)

63

1,867

1,867

-

10

0.0%

1 984

1 766

Int

eres

t and

rent

on la

nd

-

-

-

-

15

9

(159

)

-

- -

Rent

on la

nd

-

-

-

-

15

9

(159

)

-

- -

Tran

sfer

s and

subs

idies

2,544

9,362

-

11,90

6

11

,905

1

100.0

%

3 6

73

3 6

67

Hous

ehold

s

2,544

9,362

-

11,90

6

11

,905

1

100.0

%

3 6

73

3

667

Socia

l ben

efits

2,5

44

9,3

62

-

11

,906

11,90

5

1

10

0.0%

3 673

3 667

Pa

ymen

ts fo

r cap

ital a

sset

s

30

,995

568

-

31

,563

31,29

8

26

5

99.2%

39 04

4

39 04

2 Bu

ilding

s and

othe

r fixe

d stru

cture

s

4,850

(2

,343)

-

2,5

07

2,4

81

26

99.0%

-

- Bu

ilding

s

4,850

(2

,343)

-

2,5

07

2,4

81

26

99

.0%

- -

Mach

inery

and e

quipm

ent

26,14

5

2,9

11

-

29

,056

28,81

7

23

9

99.2%

39 04

4

39 04

2 Tr

ansp

ort e

quipm

ent

22,01

6

6,062

-

28,07

8

28

,078

-

100.0

%

33

250

33

250

Othe

r mac

hiner

y and

equip

ment

4,1

29

(3,15

1)

-

978

73

9

23

9

75.6%

5 794

5 792

To

tal

339,4

26

-

(1

,840)

33

7,586

33

7,345

24

1 99

.9%

318,2

52

318,2

52

128

4.1 P

ROGR

AMME

SUP

PORT

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

5,205

2,853

-

8,0

58

8,0

58

-

10

0.0%

3 558

3 399

Co

mpen

satio

n of e

mploy

ees

3,3

24

(2

37)

-

3,087

3,087

-

100.0

%

2 4

84

2 4

84

Good

s and

servi

ces

1,8

81

3,0

90

-

4,971

4,971

-

100.0

%

1 0

74

91

5 Tr

ansf

ers a

nd su

bsid

ies

21

18

-

39

39

-

100.0

%

- -

Hous

ehold

s

21

18

-

39

39

-

10

0.0%

-

- Pa

ymen

ts fo

r cap

ital a

sset

s

135

6,2

16

-

6,351

6,351

-

100.0

%

- -

Mach

inery

and e

quipm

ent

13

5

6,216

-

6,3

51

6,3

51

-

10

0.0%

-

- To

tal

5,3

61

9,0

87

-

14

,448

14,44

8

-

100.0

%

3,5

58

3,3

99

129

4.2 T

RANS

PORT

ADM

INIS

TRAT

ION

AND

LICE

NSIN

G 20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

12

,333

(4

87)

-

11

,846

11,84

5

1

100.0

%

10

273

10

175

Comp

ensa

tion o

f emp

loyee

s

10

,273

21

7

-

10,49

0

10

,489

1 10

0.0%

8 359

8 288

Go

ods a

nd se

rvice

s

2,060

(704

)

-

1,3

56

1,3

56

-

10

0.0%

1 914

1 887

Tr

ansf

ers a

nd su

bsid

ies

35

0

(65)

-

28

5

284

1 99

.6%

25

1

251

Hous

ehold

s

350

(6

5)

-

285

28

4

1

99.6%

251

25

1 Pa

ymen

ts fo

r cap

ital a

sset

s

412

(2

65)

-

147

14

7

-

100.0

%

15

8

157

Mach

inery

and e

quipm

ent

41

2

(265

)

-

14

7

147

- 10

0.0%

158

15

7 To

tal

13,09

5

(817

)

-

12,27

8

12

,276

2

10

0.0%

10

,682

10,58

3 4.3

OPE

RATO

R LI

CENS

E AN

D PE

RMIT

S 20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

13

,736

(3,64

9)

-

10

,087

10,08

7

-

100.0

%

10 49

7

10 44

5 Co

mpen

satio

n of e

mploy

ees

7,7

59

(1,71

9)

-

6,040

6,039

1

100.0

%

5 0

43

5 0

43

130

Good

s and

servi

ces

5,9

77

(1,93

0)

-

4,047

4,048

(1

) 10

0.0%

5 454

5 402

Pa

ymen

ts fo

r cap

ital a

sset

s

306

(2

98)

-

8

1

7

12.5%

10

9 Ma

chine

ry an

d equ

ipmen

t

306

(2

98)

-

8

1

7

12.5%

10

9 To

tal

14,04

2

(3

,947)

-

10,09

5

10

,088

7

99

.9%

10,50

7

10

,454

4.4 L

AW E

NFOR

CEME

NT

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

Varia

nce

Expe

nditu

re

as %

of f

inal

appr

opria

tion

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

27

4,613

(8

,647)

(1

,840)

26

4,126

26

4,152

(26)

10

0.0%

251 2

07

25

1 524

Co

mpen

satio

n of e

mploy

ees

227,3

53

(8

64)

(2,12

0)

224,3

69

224,3

69

-

10

0.0%

213 0

97

21

3 759

Go

ods a

nd se

rvice

s

47

,260

(7,78

3)

28

0

39

,757

39,62

4

13

3 99

.7%

38

110

37

765

Inter

est o

n ren

t and

land

-

-

-

-

159

(1

59)

-

-

- Tr

ansf

ers a

nd su

bsid

ies

2,1

73

9,4

09

-

11

,582

11,58

2

-

100.0

%

3 4

22

3 4

16

Hous

ehold

s

2,173

9,409

-

11,58

2

11

,582

- 10

0.0%

3 422

3 416

Pa

ymen

ts fo

r cap

ital a

sset

s

30

,142

(5,08

5)

-

25

,057

24,79

9

25

8 99

.0%

38

876

38

876

Build

ings a

nd ot

her f

ixed s

tructu

res

4,8

50

(2,34

3)

-

2,507

2,481

26

99

.0%

- -

Mach

inery

and e

quipm

ent

25,29

2

(2

,742)

-

22,55

0

22

,318

232

99

.0%

38

876

38

876

Total

30

6,928

(4

,323)

(1

,840)

30

0,765

30

0,533

232

99.9%

29

3,505

29

3,816

131

Prog

ram

me 5

: CO

MMUN

ITY

BASE

D PR

OGRA

MME

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

Varia

nce

Expe

nditu

re

as %

of f

inal

appr

opria

tion

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 %

R'

000

R'00

0 Su

b pr

ogra

mm

e

1.

Prog

ramm

e Sup

port

2,9

24

(6

79)

(2

73)

1,9

72

1,9

61

11

99

.4%

2 1

06

2 1

06

2.

Comm

unity

Dev

elopm

ent

37,38

3

674

1,4

47

39,50

4

39

,504

-

100.0

%

42

690

42

684

3.

Innov

ation

and E

mpow

erme

nt

3,249

(29)

-

3,2

20

3,2

19

1

100.0

%

4 0

14

4 0

13

4. EP

WP

Coor

dinati

on an

d Mon

itorin

g

11

,575

34

(7

68)

10,84

1

10

,831

10

99

.9%

6 3

00

6 2

88

Tota

l for

sub

prog

ram

mes

55

,131

-

406

55,53

7

55

,515

22

100.0

%

55,11

0

55

,091

Econ

omic

class

ifica

tion

Cu

rrent

pay

men

ts

54,24

9

(273

)

301

54,27

7

54

,270

7

100.0

%

52

517

52

512

Com

pens

atio

n of

empl

oyee

s

5,889

(398

)

(399

)

5,092

5,092

-

10

0.0%

4 890

4 887

Sa

laries

and w

ages

5,226

(358

)

(399

)

4,469

4,468

1

10

0.0%

4 312

4 311

132

Socia

l con

tributi

ons

66

3

(40)

-

62

3

624

(1)

10

0.2%

578

57

6 Go

ods a

nd se

rvice

s

48

,360

12

5

700

49,18

5

49

,178

7

100.0

%

47

627

47

625

Adve

rtising

100

-

(100

)

-

-

-

-

80

80

Mino

r ass

ets

30

(2

6)

-

4

4

-

10

0.0%

3

4 Ca

tering

: Dep

artm

ental

activ

ities

75

0

16

-

76

6

766

-

-

100.0

%

1 2

17

1 2

17

Comp

uter s

ervic

es

1,1

18

(1

6)

(2

4)

1,0

78

1,0

78

-

100.0

%

98

7

987

Contr

actor

s

5

(5)

-

-

-

-

-

306

30

6 Ag

ency

and s

uppo

rt / o

utsou

rced

servi

ces

39,72

3

16

1,067

40

,806

40,80

5

1

10

0.0%

38 91

9

38 91

9 En

tertai

nmen

t

2

(1)

-

1

1

-

10

0.0%

2

2 Fle

et se

rvice

s (inc

luding

go

vern

ment

motor

tran

spor

t

60

(13)

-

47

43

4

91.5%

55

53

Co

nsum

able

supp

lies

2,7

96

12

(2

43)

2,5

65

2,5

65

-

100.0

%

2 2

56

2 2

55

Cons

umab

le: S

tation

ery,

print

ing

and o

ffice s

uppli

es

10

3

(19)

-

84

84

-

100.0

%

44

44

Tran

spor

t equ

ipmen

t

228

(2)

-

226

22

6

-

10

0.0%

-

- Tr

avel

and s

ubsis

tence

1,822

64

-

1,8

86

1,8

85

1

99.9%

1 915

1 915

Tr

aining

and d

evelo

pmen

t

1,195

91

-

1,2

86

1,2

85

1

99.9%

1 753

1 753

Op

erati

ng pa

ymen

ts

13

9

-

22

22

-

10

0.0%

22

22

133

Venu

es an

d fac

ilities

415

(1)

-

414

41

4

-

100.0

%

68

68

Tran

sfer

s and

subs

idies

510

39

9

105

1,0

14

1,0

14

- 10

0.0%

2 2

99

2 294

De

partm

ental

agen

cies a

nd ac

coun

ts

-

39

9

380

77

9

779

- 10

0.0%

2 2

00

2 195

De

partm

ental

agen

cies (

non-

busin

ess

entiti

es)

-

399

38

0

779

77

9

-

100.0

%

- -

Socia

l sec

urity

fund

s -

- -

- -

- -

2 200

2 1

95

Hous

ehold

s

510

-

(275

)

235

23

5

-

100.0

%

99

99

So

cial b

enefi

ts

510

-

(275

)

235

23

5

-

100.0

%

99

99

Paym

ents

for c

apita

l ass

ets

37

2

(126

)

-

24

6

231

15

93.9%

29

4 28

5 Ma

chine

ry an

d equ

ipmen

t

372

(1

26)

-

246

23

1

15

93

.9%

294

285

Tran

spor

t equ

ipmen

t

112

(7)

-

105

101

4 96

.2%

68

68

Othe

r mac

hiner

y and

equip

ment

26

0

(119

)

-

14

1

130

11

92.2%

22

6 21

7 To

tal

55,13

1

-

40

6

55

,537

55,51

5

22

10

0.0%

55

,110

55,09

1

134

5.1 P

ROGR

AMME

SUP

PORT

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

2,389

(552

)

-

1,8

37

1,8

36

1 99

.9%

1 9

64

1 9

64

Comp

ensa

tion o

f emp

loyee

s

1,969

(416

)

-

1,5

53

1,5

52

1 99

.9%

1 6

29

1 6

29

Good

s and

servi

ces

42

0

(136

)

-

28

4

284

-

10

0.0%

335

33

5 Tr

ansf

ers a

nd su

bsid

ies

30

5

-

(2

73)

32

32

- 10

0.0%

-

- Ho

useh

olds

30

5

-

(2

73)

32

32

- 10

0.0%

-

- Pa

ymen

ts fo

r cap

ital a

sset

s

230

(1

27)

-

103

93

10

90

.3%

14

2

142

Mach

inery

and e

quipm

ent

23

0

(127

)

-

10

3

93

10

90.3%

142

14

2

To

tal

2,9

24

(6

79)

(2

73)

1,9

72

1,9

61

11

99.4%

2,106

2,106

135

5.2 C

OMMU

NITY

DEV

ELOP

MENT

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fu

nds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

37

,383

26

8

1,067

38

,718

38,71

8 -

100.0

%

40

448

40

448

Comp

ensa

tion o

f emp

loyee

s

1,006

372

-

1,378

1,378

-

100.0

%

57

3

573

Good

s and

servi

ces

36,37

7

(104

)

1,067

37

,340

37,34

0 -

100.0

%

39

875

39

875

Tran

sfer

s and

subs

idies

-

39

9

380

77

9

779

- 10

0.0%

2 223

2 218

De

partm

ental

agen

cies a

nd ac

coun

ts

-

39

9

380

77

9

779

- 10

0.0%

2 200

2 195

Ho

useh

olds

-

-

-

-

-

-

-

23

23

Paym

ents

for c

apita

l ass

ets

-

7

-

7

7

-

100.0

%

19

18

Mach

inery

and e

quipm

ent

-

7

-

7

7

-

100.0

%

19

18

Tota

l

37

,383

67

4

1,447

39

,504

39,50

4

-

100.0

%

42,69

0

42

,684

136

5.3 IN

NOVA

TION

AND

EMP

OWER

MENT

20

17/18

20

16/17

Adju

sted

Ap

prop

riatio

n Sh

iftin

g of

Fun

ds

Vire

men

t Fi

nal

Appr

opria

tion

Actu

al Ex

pend

iture

Va

rianc

e Ex

pend

iture

as

% o

f fin

al ap

prop

riatio

n

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

3,

219

(2

2)

-

3,

197

3,19

6

1

100.0

%

4 0

13

4 0

12

Comp

ensa

tion o

f emp

loyee

s

1,

074

17

-

1,

091

1,09

1

-

100.0

%

1 0

92

1 0

91

Good

s and

servi

ces

2,14

5

(39)

-

2,10

6

2,

105

1 10

0.0%

2 921

2 921

Pa

ymen

ts fo

r cap

ital a

sset

s

30

(7)

-

23

23

-

10

0.0%

1

1 Ma

chine

ry an

d equ

ipmen

t

30

(7)

-

23

23

-

10

0.0%

1

1 To

tal

3,24

9

(29)

-

3,22

0

3,

219

1 10

0.0%

4,

014

4,0

13

137

5.4 E

PWP

COOR

DINA

TION

AND

MON

ITOR

ING

2017

/18

2016

/17

Ad

just

ed

Appr

opria

tion

Shift

ing

of

Fund

s Vi

rem

ent

Fina

l Ap

prop

riatio

n Ac

tual

Expe

nditu

re

Varia

nce

Expe

nditu

re

as %

of f

inal

appr

opria

tion

Fina

l Ap

prop

riatio

n Ac

tual

expe

nditu

re

Econ

omic

class

ifica

tion

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

%

R'00

0 R'

000

Curre

nt p

aym

ents

11

,258

33

(7

66)

10,52

5

10

,520

5 10

0.0%

6 092

6 088

Co

mpen

satio

n of e

mploy

ees

1,8

40

(3

71)

(3

99)

1,0

70

1,0

71

(1)

100.1

%

1 5

96

1 5

94

Good

s and

servi

ces

9,4

18

40

4

(367

)

9,455

9,449

6

99.9%

4 496

4 494

Tr

ansf

ers a

nd su

bsid

ies

20

5

-

(2)

20

3

203

- 10

0.0%

76

76

Ho

useh

olds

20

5

-

(2)

20

3

203

- 10

0.0%

76

76

Pa

ymen

ts fo

r cap

ital a

sset

s

112

1

-

11

3

108

5 95

.6%

13

2

124

Mach

inery

and e

quipm

ent

11

2

1

-

113

10

8

5

95.6%

132

12

4 To

tal

11,57

5

34

(768

)

10

,841

10,83

1

10

99

.9%

6,3

00

6,2

88

138

NOTES TO THE APPROPRIATION STATEMENT FOR THE YEAR ENDING 31 MARCH 2018 1. Detail of transfers and subsidies as per Appropriation Act (after Virement): Detail of these transactions can be viewed in the note on Transfers and subsidies, disclosure notes and Annexure 1 (A-G) to the Annual Financial Statements. 2. Detail of specifically and exclusively appropriated amounts voted (after Virement): Detail of these transactions can be viewed in note 1 (Annual Appropriation) to the Annual Financial Statements. 3. Detail on payments for financial assets Detail of these transactions per programme can be viewed in the note on Payments for financial assets to the Annual Financial Statements. 4. Explanations of material variances from Amounts Voted (after Virement):

4.1 Per programme Final


Expenditure Variance

R’000 Variance as a % of Final

Appropriation Programme 1: Administration 294 666 294 255 411 0% Programme 2: Transport Infrastructure

15 273

10 421

4 852

47% Programme 3: Transport Operations

1 140 142

1 139 403

739

0% Programme 4: Transport Regulation

337 586

337 345

241

0% Programme 5: Community Based Programme

55 537

55 515

22

0%

Programme name: Administration Explanation of variance:

• The underspending is mainly on capital due to late receipt of invoices for contractual obligations Programme name: Transport Infrastructure Explanation of variance:

• The underspending is mainly attributable to capital expenditure due to technical challenges experienced during procurement stages for the design and planning for the construction of Middleburg Traffic Control Centre.

4.2 Per economic classification Final


Expenditure Variance Variance as a % of Final

Appropriation R’000 R’000 R’000 R’000

Current payments Compensation of employees 563 059 562 320 739 0% Goods and services 709 232 708 971 261 0% Interest and rent on land - 170 (170) -

Transfers and subsidies Departmental agencies and accounts

2 662

2 662

-

0% Public corporations and private enterprises

488 143

487 496

647

0%

139

Households 18 488 18 486 2 0%

Payments for capital assets Buildings and other fixed structures 7 138 3 612 3 526 98% Machinery and equipment 54 482 53 222 1 260 2%

4.3 Per conditional grant Final Appropriation

Actual Expenditure

Variance Variance as a % of Final Appropriation

R’000 R’000 R’000 R’000 Public Transport Operations 231 252 231 252 - 0% Expanded Public Works Program 4 924 4 920 4 0%

140

STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDING 31 MARCH 2018

Notes 2017/18 2016/17 R'000 R'000 REVENUE Annual appropriation 1 1 843 204 1 743 698 Departmental revenue 2 - - Aid assistance 3 1 278 6 385 TOTAL REVENUE 1 844 482 1 750 083 EXPENDITURE Current expenditure Compensation of employees 4 562 320 529 020 Goods and services 5 708 971 660 816 Interest and rent on land 6 170 134 Aid assistance 3 2 387 1 036 Total current expenditure 1 273 848 1 191 006 Transfers and subsidies Transfers and subsidies 8 508 644 476 833 Total transfers and subsidies 508 644 476 833 Expenditure for capital assets Tangible assets 9 60 906 72 175 Intangible assets 9 - 43 Total expenditure for capital assets 60 906 72 218 Payments for financial assets 7 - 451 TOTAL EXPENDITURE 1 843 398 1 740 508 SURPLUS FOR THE YEAR 1 084 9 575

Reconciliation of Net Surplus for the year Voted funds 6 265 4 226

Annual appropriation 6 261 4 067 Conditional grants 4 159

Aid assistance 3 (5 181) 5 349 SURPLUS FOR THE YEAR 1 084 9 575

141

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2018

Notes 2017/18 2016/17 R'000 R'000 ASSETS Current assets 26 890 30 958

Cash and cash equivalents 10 25 666 30 196 Receivables 12 1 224 762

Non-current assets 620 090 603 907

Investments 13 610 358 603 358 Receivables 12 9 732 549

TOTAL ASSETS 646 980 634 865 LIABILITIES Current liabilities 26 621 30 997

Voted funds to be surrendered to the Revenue Fund 14 6 265 4 226 Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund

15 11 391

16 869

Payables 16 6 948 2 704 Aid assistance repayable 3 2 017 7 198

TOTAL LIABILITIES 26 621 30 997 NET ASSETS 620 359 603 868 2017/18 2016/17 R'000 R'000 Represented by: Capitalisation reserve 610 358 603 358 Recoverable revenue 10 001 510 TOTAL 620 359 603 868

142

STATEMENT OF CHANGES IN NET ASSETS FOR TH YEAR ENDING 31 MARCH 2018 Note 2017/18 2016/17 R'000 R'000 Capitalisation Reserves Opening balance 603 358 593 358 Transfers:

Movement in Equity 7 000 10 000 Closing balance 610 358 603 358

S Recoverable revenue Opening balance 510 539 Transfers: 9 491 (29)

Irrecoverable amounts written off 7.1 - (451) Debts recovered (333) - Debts raised 9 824 422

Closing balance 10 001 510 TOTAL 620 359 603 868

143

CASH FLOW STATEMENT FOR THE YEAR ENDING 31 MARCH 2018 Notes 2017/18 2016/17 R'000 R’000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts 2 493 022 2 401 186

Annual appropriated funds received 1.1 1 843 204 1 743 698 Departmental revenue received 2 648 540 651 103 Aid assistance received 3 1 278 6 385

Net (increase) / decrease in working capital (5 401) 3 983 Surrendered to Revenue Fund (658 244) (648 726) Current payments (1 273 678) (1 190 872) Interest paid 6 (170) (134) Payments for financial assets - (451) Transfers and subsidies paid (508 644) (476 833) Net cash flow available from operating activities 17 46 885 88 153 CASH FLOWS FROM INVESTING ACTIVITIES Payments for capital assets 9 (60 906) (72 218) Increase in investments (7 000) (10 000) Net cash flows from investing activities (67 906) (82 218) CASH FLOWS FROM FINANCING ACTIVITIES Increase in net assets 16 491 9 971 Net cash flows from financing activities 16 491 9 971 Net (decrease)/increase in cash and cash equivalents (4 530) 15 906

Cash and cash equivalents at beginning of period 30 196 14 290 Cash and cash equivalents at end of period 18 25 666 30 196

144

Summary of significant accounting policies The financial statements have been prepared in accordance with the following policies, which have been applied consistently in all material aspects, unless otherwise indicated. Management has concluded that the financial statements present fairly the department’s primary and secondary information. The historical cost convention has been used, except where otherwise indicated. Management has used assessments and estimates in preparing the annual financial statements. These are based on the best information available at the time of preparation. Where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the financial statements and to comply with the statutory requirements of the Public Finance Management Act (PFMA), Act 1 of 1999 (as amended by Act 29 of 1999), and the Treasury Regulations issued in terms of the PFMA and the annual Division of Revenue Act. 1 Basis of preparation

The financial statements have been prepared in accordance with the Modified Cash Standard (MCS). 2 Going concern

The financial statements have been prepared on a going concern basis. 3 Presentation currency

Amounts have been presented in the currency of the South African Rand (R) which is also the functional currency of the department.

4 Rounding Unless otherwise stated financial figures have been rounded to the nearest one thousand Rand (R’000).

5 Comparative information 5.1 Prior period comparative information

Prior period comparative information has been presented in the current year’s financial statements. Where necessary figures included in the prior period financial statements have been reclassified to ensure that the format in which the information is presented is consistent with the format of the current year’s financial statements.

5.2 Current year comparison with budget A comparison between the approved, final budget and actual amounts for each programme and economic classification is included in the appropriation statement.

6 Revenue 6.1 Appropriated funds

Appropriated funds comprises of departmental allocations as well as direct charges against the revenue fund (i.e. statutory appropriation). Appropriated funds are recognized in the statement of financial performance on the date the appropriation becomes effective. Adjustments made in terms of the adjustments budget process are recognized in the statement of financial performance on the date the adjustments become effective. The net amount of any appropriated funds due to / from the relevant revenue fund at the reporting date is recognized as a payable / receivable in the statement of financial position.

6.2 Departmental revenue Departmental revenue is recognized in the statement of financial performance when received and is subsequently paid into the relevant revenue fund, unless stated otherwise. Any amount owing to the relevant revenue fund at the reporting date is recognized as a payable in the statement of financial position.

6.3 Accrued departmental revenue Accruals in respect of departmental revenue (excluding tax revenue) are recorded in the notes to the financial statements when: • it is probable that the economic benefits or service potential associated with the transaction will flow to the department;

and • the amount of revenue can be measured reliably. The accrued revenue is measured at the fair value of the consideration receivable. Accrued tax revenue (and related interest and / penalties) is measured at amounts receivable from collecting agents. Write-offs are made according to the department’s debt write-off policy

7 Expenditure 7.1 Compensation of employees 7.1.1 Salaries and wages

Salaries and wages are recognized in the statement of financial performance on the date of payment. 7.1.2 Social contributions

145

Social contributions made by the department in respect of current employees are recognized in the statement of financial performance on the date of payment. Social contributions made by the department in respect of ex-employees are classified as transfers to households in the statement of financial performance on the date of payment.

7.2 Other expenditure Other expenditure (such as goods and services, transfers and subsidies and payments for capital assets) is recognized in the statement of financial performance on the date of payment. The expense is classified as a capital expense if the total consideration paid is more than the capitalisation threshold.

7.3 Accruals and payables not recognized Accruals and payables not recognized are recorded in the notes to the financial statements at cost at the reporting date.

7.4 Leases 7.4.1 Operating leases

Operating lease payments made during the reporting period are recognized as current expenditure in the statement of financial performance on the date of payment. The operating lease commitments are recorded in the notes to the financial statements.

7.4.2 Finance leases Finance lease payments made during the reporting period are recognized as capital expenditure in the statement of financial performance on the date of payment. The finance lease commitments are recorded in the notes to the financial statements and are not apportioned between the capital and interest portions. Finance lease assets acquired at the end of the lease term are recorded and measured at the lower of: • cost, being the fair value of the asset; or • the sum of the minimum lease payments made, including any payments made to acquire ownership at the end of the lease

term, excluding interest. 8 Aid Assistance 8.1 Aid assistance received

Aid assistance received in cash is recognized in the statement of financial performance when received. In-kind aid assistance is recorded in the notes to the financial statements on the date of receipt and is measured at fair value. Aid assistance not spent for the intended purpose and any un-utilised funds from aid assistance that are required to be refunded to the donor are recognized as a payable in the statement of financial position.

8.2 Aid assistance paid Aid assistance paid is recognized in the statement of financial performance on the date of payment. Aid assistance payments made prior to the receipt of funds are recognized as a receivable in the statement of financial position.

9 Cash and cash equivalents Cash and cash equivalents are stated at cost in the statement of financial position. Bank overdrafts are shown separately on the face of the statement of financial position as a current liability. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held, other short-term highly liquid investments and bank overdrafts.

10 Prepayments and advances Prepayments and advances are recognized in the statement of financial position when the department receives or disburses the cash. Prepayments and advances are initially and subsequently measured at cost. MCS also states that a department may recognise a prepayment in the statement of financial performance if the prepayment was budgeted for as an expense in the year in which the actual prepayment was made.

11 Loans and receivables Loans and receivables are recognized in the statement of financial position at cost plus accrued interest, where interest is charged, less amounts already settled or written-off. Write-offs are made according to the department’s write-off policy.

12 Investments Investments are recognized in the statement of financial position at cost.

13 Financial assets 13.1 Financial assets (not covered elsewhere)

146

A financial asset is recognized initially at its cost plus transaction costs that are directly attributable to the acquisition or issue of the financial asset. At the reporting date, a department shall measure its financial assets at cost, less amounts already settled or written-off, except for recognized loans and receivables, which are measured at cost plus accrued interest, where interest is charged, less amounts already settled or written-off.

13.2 Impairment of financial assets Where there is an indication of impairment of a financial asset, an estimation of the reduction in the recorded carrying value, to reflect the best estimate of the amount of the future economic benefits expected to be received from that asset, is recorded in the notes to the financial statements.

14 Payables Payables recognized in the statement of financial position are recognized at cost.

15 Capital Assets 15.1 Immovable capital assets

Immovable assets reflected in the asset register of the department are recorded in the notes to the financial statements at cost or fair value where the cost cannot be determined reliably. Immovable assets acquired in a non-exchange transaction are recorded at fair value at the date of acquisition. Immovable assets are subsequently carried in the asset register at cost and are not currently subject to depreciation or impairment. Subsequent expenditure of a capital nature forms part of the cost of the existing asset when ready for use. Additional information on immovable assets not reflected in the assets register is provided in the notes to financial statements.

15.2 Movable capital assets Movable capital assets are initially recorded in the notes to the financial statements at cost. Movable capital assets acquired through a non-exchange transaction is measured at fair value as at the date of acquisition. Where the cost of movable capital assets cannot be determined reliably, the movable capital assets are measured at fair value and where fair value cannot be determined; the movable assets are measured at R1. All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R1. Movable capital assets are subsequently carried at cost and are not subject to depreciation or impairment. Subsequent expenditure that is of a capital nature forms part of the cost of the existing asset when ready for use.

15.3 Intangible assets Intangible assets are initially recorded in the notes to the financial statements at cost. Intangible assets acquired through a non-exchange transaction are measured at fair value as at the date of acquisition. Internally generated intangible assets are recorded in the notes to the financial statements when the department commences the development phase of the project. Where the cost of intangible assets cannot be determined reliably, the intangible capital assets are measured at fair value and where fair value cannot be determined; the intangible assets are measured at R1. All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R1. Intangible assets are subsequently carried at cost and are not subject to depreciation or impairment. Subsequent expenditure of a capital nature forms part of the cost of the existing asset when ready for use.

15.4 Project Costs: Work-in-progress Expenditure of a capital nature is initially recognised in the statement of financial performance at cost when paid. Amounts paid towards capital projects are separated from the amounts recognised and accumulated in work-in-progress until the underlying asset is ready for use. Once ready for use, the total accumulated payments are recorded in an asset register. Subsequent payments to complete the project are added to the capital asset in the asset register. Where the department is not the custodian of the completed project asset, the asset is transferred to the custodian subsequent to completion.

16 Provisions and Contingents 16.1 Provisions

Provisions are recorded in the notes to the financial statements when there is a present legal or constructive obligation to forfeit economic benefits as a result of events in the past and it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation and a reliable estimate of the obligation can be made. The provision is measured as the best estimate of the funds required to settle the present obligation at the reporting date.

16 Provisions and Contingents 16.1 Provisions

147

Provisions are recorded in the notes to the financial statements when there is a present legal or constructive obligation to forfeit economic benefits as a result of events in the past and it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation and a reliable estimate of the obligation can be made. The provision is measured as the best estimate of the funds required to settle the present obligation at the reporting date.

16.2 Contingent liabilities Contingent liabilities are recorded in the notes to the financial statements when there is a possible obligation that arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not within the control of the department or when there is a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the obligation cannot be measured reliably.

16.3 Contingent assets Contingent assets are recorded in the notes to the financial statements when a possible asset arises from past events, and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the department.

16.4 Commitments Commitments (other than for transfers and subsidies) are recorded at cost in the notes to the financial statements when there is a contractual arrangement or an approval by management in a manner that raises a valid expectation that the department will discharge its responsibilities thereby incurring future expenditure that will result in the outflow of cash.

17 Unauthorised expenditure Unauthorised expenditure is recognised in the statement of financial position until such time as the expenditure is either: • approved by the Provincial Legislature with funding and the related funds are received; or • approved by the Provincial Legislature without funding and is written off against the appropriation in the statement of

financial performance; or • transferred to receivables for recovery. Unauthorised expenditure is measured at the amount of the confirmed unauthorised expenditure.

18 Fruitless and wasteful expenditure Fruitless and wasteful expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the total value of the fruitless and or wasteful expenditure incurred. Fruitless and wasteful expenditure is removed from the notes to the financial statements when it is resolved or transferred to receivables for recovery. Fruitless and wasteful expenditure receivables are measured at the amount that is expected to be recoverable and are de-recognised when settled or subsequently written-off as irrecoverable.

19 Irregular expenditure Irregular expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the value of the irregular expenditure incurred unless it is impracticable to determine, in which case reasons therefor are provided in the note. Irregular expenditure is removed from the note when it is either condoned by the relevant authority, transferred to receivables for recovery or not condoned and is not recoverable. Irregular expenditure receivables are measured at the amount that is expected to be recoverable and are de-recognised when settled or subsequently written-off as irrecoverable.

20 Changes in accounting policies, accounting estimates and errors Changes in accounting policies that are effected by management have been applied retrospectively in accordance with MCS requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the change in policy. In such instances the department shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable. Changes in accounting estimates are applied prospectively in accordance with MCS requirements. Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with MCS requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the error. In such cases the department shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable.

148

21 Events after the reporting date Events after the reporting date that are classified as adjusting events have been accounted for in the financial statements. The events after the reporting date that are classified as non-adjusting events after the reporting date have been disclosed in the notes to the financial statements.

22 Principal-Agent arrangements The department is party to a principal-agent arrangement with various municipalities and the South African Post Office. In terms of the arrangement the department is the principal as well as an agent and is responsible for collection of motor vehicle fees. All related revenues, expenditures, assets and liabilities have been recognised or recorded in terms of the relevant policies listed herein. Additional disclosures have been provided in the notes to the financial statements where appropriate.

23 Departures from the MCS requirements Management has concluded that the financial statements present fairly the department’s primary and secondary information; that the department complied with the Standard with no exception.

24 Capitalisation reserve The capitalisation reserve comprises of financial assets and/or liabilities originating in a prior reporting period but which are recognised in the statement of financial position for the first time in the current reporting period. Amounts are recognised in the capitalisation reserves when identified in the current period and are transferred to the Provincial Revenue Fund when the underlying asset is disposed and the related funds are received.

25 Recoverable revenue Amounts are recognised as recoverable revenue when a payment made in a previous financial year becomes recoverable from a debtor in the current financial year. Amounts are either transferred to the Provincial Revenue Fund when recovered or are transferred to the statement of financial performance when written-off.

26 Related party transactions A related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party. Related party transactions within the MEC’s portfolio are recorded in the notes to the financial statements when the transaction is not at arm’s length. Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the department. The number of individuals and their full compensation is recorded in the notes to the financial statements.

27 Inventories At the date of acquisition, inventories are recognised at cost in the statement of financial performance. Where inventories are acquired as part of a non-exchange transaction, the inventories are measured at fair value as at the date of acquisition. Inventories are subsequently measured at the lower of cost and net realisable value or the lower of cost and current replacement value. The cost of inventories is assigned by using the weighted average cost basis.

28 Employee benefits The value of each major class of employee benefit obligation (accruals, payables not recognised and provisions) is disclosed in the Employee benefits note.

149

1. NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ending 31 March 2018 1.1 Annual Appropriation Included are funds appropriated in terms of the Appropriation Act (and the Adjustments Appropriation Act) for National Departments (Voted funds) and Provincial Departments:

1.2 Conditional grants

Note 2017/18 2016/17 R’000 R’000 Total grants received 35 236 176 223 937 Provincial grants included in Total Grants received 236 176 223 937

1. Departmental revenue

Notes 2017/18 2016/17 R’000 R’000 Tax revenue 619 615 614 072 Sales of goods and services other than capital assets 2.1 23 238 29 738 Fines, penalties and forfeits 2.2 5 203 6 635 Transactions in financial assets and liabilities 2.3 484 658 Total revenue collected 648 540 651 103 Less: Own revenue included in appropriation 15 648 540 651 103 Departmental revenue collected - -

2017/18 2016/17 Final

Appropriation Actual Funds

Received Funds not

requested/not received

Final Appropriation

Appropriation received

R’000 R’000 R’000 R’000 R’000 Administration 294 666 294 666 - 282 968 282 968

Transport Infrastructure

15 273

15 273

-

12 583

12 583

Transport Operations

1 140 142

1 140 142

-

1 074 785

1 074 785

Transport Regulation

337 586

337 586

-

318 252

318 252

Community Based 55 537 55 537 -

55 110 55 110 Total 1 843 204 1 843 204 - 1 743 698 1 743 698

150

2.1 Sales of goods and services other than capital assets

Note 2017/18 2016/17 2 R’000 R’000

Sales of goods and services produced by the department

23 238

29 738 Sales by market establishment 1 392 938 Administrative fees 21 846 28 800

Total 23 238 29 738 2.2 Fines, penalties and forfeits

Note 2017/18 2016/17 2 R’000 R’000 Fines 5 203 6 635 Total 5 203 6 635

2.3 Transactions in financial assets and liabilities

Note 2017/18 2016/17 2 R’000 R’000 Receivables 484 658 Total 484 658

2.4 Cash received not recognised (not included in the main note)

2017/18 Name of entity Amount received Amount paid to

the revenue fund Balance

R’000 R’000 R’000 Eastern Cape Government Fleet Management Services

322 958

322 958

- Total 322 958 322 958 -

2016/17 Name of entity Amount received Amount paid to

the revenue fund Balance

R’000 R’000 R’000 Eastern Cape Government Fleet Management Services

19 795

19 795

- Total 19 795 19 795 -

In terms of GRAP MCS 18(g) cash received for another entity then surrendered to revenue fund does not roll up to the main departmental revenue note.

151

2. Aid assistance

Note 2017/18 2016/17 R’000 R’000 Opening Balance 7 198 1 849 Add: Revenue 1 278 6 385 Less: Expenditure - Current (2 387) (1 036) Less: Expenditure - Capital (4 072) - Closing Balance 3.1 2 017 7 198

3.1. Analysis of balance by source

2017/18 2016/17 Note R’000 R’000 Aid assistance from other sources (Annexure 1E) 2 017 7 198 Closing balance 3 2 017 7 198

a. Analysis of balance

2017/18 2016/17 Note R’000 R’000 Transport Education and Training Authority (TETA) 3 865 1 042

Transport Education and Training Authority (TETA) Flagship Programme 3

1

1 Public Sector Education Training Authority (PSETA) 3 78 78 Road Traffic Management Corporation (RTMC) 3 1 073 6 077 Closing balance 2 017 7 198

Aid assistance not requested/not received 2 017 7 198

a. Aid assistance expenditure per economic classification

2017/18 2016/17 R’000 R’000 Current 2 387 - Capital 4 072 - Total aid assistance expenditure 6 459 -

152

3. Compensation of employees 4.1 Salaries and Wages

2017/18 2016/17 R’000 R’000 Basic salary 380 180 352 669 Performance award 3 335 2 388 Service Based 609 749 Compensative and circumstantial 30 649 35 164 Periodic payments 654 114 Other non-pensionable allowances 64 734 62 210 Total 480 161 453 294

4.2 Social contributions

2017/18 2016/17 R’000 R’000 Employer contributions Pension 49 755 44 923 Medical 32 288 30 696 Bargaining council 116 107 Total 82 159 75 726

Total compensation of employees 562 320 529 020 Average number of employees 1 445 1 417

4. Goods and services

Notes 2017/18 2016/17 R’000 R’000 Administrative fees 463 709 Advertising 2 487 3 513 Minor assets 5.1 732 827 Bursaries (employees) 3 241 4 280 Catering 5 065 6 062 Communication 7 720 8 555 Computer services 5.2 15 754 18 840 Consultants: Business and advisory services 8 039 11 240 Infrastructure and planning services 5 178 6 283 Legal services 3 316 4 252 Contractors 2 335 3 207 Agency and support / outsourced services 47 476 42 781 Entertainment 108 98 Audit cost – external 5.3 6 696 5 972 Fleet services 24 860 17 018 Inventory 5.4 104 - Consumables 5.5 13 205 12 951 Operating leases 2 177 1 059 Property payments 5.6 11 844 11 991

153

Rental and hiring 3 75 Transport provided as part of the departmental activities 506 045 463 065 Travel and subsistence 5.7 26 223 26 662 Venues and facilities 7 722 5 745 Training and development 4 583 3 890 Other operating expenditure 5.8 3 595 1 741 Total 708 971 660 816

5.1 Minor assets

Note 2017/18 2016/17 5 R’000 R’000 Tangible assets

Machinery and equipment 732 827 Total 732 827

5.2 Computer services

Note 2017/18 2016/17 5 R’000 R’000 SITA computer services 12 885 16 149 External computer service providers 2 869 2 691 Total 15 754 18 840

5.3 Audit cost – External

Note 2017/18 2016/17 5 R’000 R’000 Regularity audits 6 696 5 972 Total 6 696 5 972

5.4 Inventory

Note 2017/18 2016/17 5 R’000 R’000 Material and supplies 104 - Total 104 -

154

5.5 Consumables

Note 2017/18 2016/17 5 R’000 R’000

Consumable supplies 5 593 5 030 Uniform and clothing 2 781 3 408 Household supplies 839 853 Building material and supplies 758 262 IT consumables 157 153 Other consumables 1 058 354

Stationery, printing and office supplies 7 612 7 921 Total 13 205 12 951

5.6 Property payments Note 2017/18 2016/17 5 R’000 R’000 Municipal services 1 849 1 783 Other (Gardening, Cleaning, Fumigation, Safeguard and Security services at airports and district offices)

9 995

10 208

Total 11 844 11 991 5.7 Travel and subsistence

Note 2017/18 2016/17 5 R’000 R’000 Local 26 223 26 662 Total 26 223 26 662

5.8 Other operating expenditure

Note 2017/18 2016/17 5 R’000 R’000 Professional bodies, membership and subscription fees 23 13 Resettlement costs 2 250 1 344 Other ( Printing and Publications , Motor Vehicle insurance) 1 322 384 Total 3 595 1 741

5. Interest and rent on land

Note 2017/18 2016/17 R’000 R’000

Interest paid 170 134 Total 170 134

6. Payments for financial assets

Note 2017/18 2016/17 R’000 R’000 Debts written off 7.1 - 451 Total - 451

155

7.1 Debts written off

Note 2017/18 2016/17 7 R’000 R’000

Road Traffic Management Corporation - 451 Total - 451

7. Transfers and subsidies

2017/18 2016/17 R’000 R’000 Notes Departmental agencies and accounts Annex 1A 2 662 3 989 Public corporations and private enterprises Annex 1B 487 495 463 525 Households Annex 1C 18 487 9 319 Total 508 644 476 833

8. Expenditure for capital assets Notes 2017/18 2016/17 R’000 R’000 Tangible assets 60 906 72 175

Buildings and other fixed structures 33.1 3 613 12 029 Machinery and equipment 31.1 57 293 60 146

Intangible assets - 43

Software 32 - 43

Total 60 906 72 218 9.1 Analysis of funds utilised to acquire capital assets – 2017/18

Voted funds spent

Aid assistance Total

R’000 R’000 R’000 Tangible assets 56 834 4 072 60 906

Buildings and other fixed structures 3 613 - 3 613 Machinery and equipment 53 221 4 072 57 293

Total 56 834 4 072 60 906

156

9.2 Analysis of funds utilised to acquire capital assets – 2016/17

Voted funds spent

Total

R’000 R’000 Tangible assets 72 175 72 175

Buildings and other fixed structures 12 029 12 029 Machinery and equipment 60 146 60 146

Intangible assets 43 43

Software 43 43

Total 72 218 72 218 9.3 Finance lease expenditure included in Expenditure for capital assets

2017/18 2016/17 R’000 R’000 Tangible assets

Machinery and equipment 36 097 56 384 Total 36 097 56 384

9. Cash and cash equivalents

2017/18 2016/17 R’000 R’000 Consolidated Paymaster General Account 25 666 30 196 Total 25 666 30 196

10. Prepayments and advances

Note 2017/18 2016/17 R’000 R’000 Prepayments (expensed) 11.1 - 4 493 Total - 4 493

157

11.1 Prepayments (Expensed) Note Amount as at 1

April 2017 Less: Received in the current

year

Add: Current Year

prepayments

Amount as at 31 March 2018

R’000 R’000 R’000 R’000 Capital assets 4 493 - - - Total 4 493 - - -

11. Receivables 2017/18 2016/17

Current Non-current Total Current Non-current Total

Notes R’000 R’000 R’000 R’000 R’000 R’000 Claims

recoverable Annexure

4 12.1

323 - 323 1 116 117

Recoverable expenditure

12.2 - - - 6

-

6

Staff debt 12.3 888 402 1 290 451 335 786 Fruitless and

wasteful expenditure

12.5 - 98 98 - 98 98

Other debtors 12.4

13 9 232

9 245

304

-

304 Total 1 224 9 732 10 956 762 549 1 311

12.1 Claims recoverable

Note 2017/18 2016/17 12 and Annex 4 R’000 R’000 Provincial departments 323 116 Public entities - 1 Total 323 117

158

12.2 Recoverable expenditure (disallowance accounts)

Note 2017/18 2016/17 12 R’000 R’000

Sal: Tax debt - 6 Total - 6

12.3 Staff debt

Note 2017/18 2016/17 12 R’000 R’000

Staff debt 1 290 786 Total 1 290 786

12.4 Other debtors

Note 2017/18 2016/17 12 R’000 R’000

Scholar transporters 7 304 Dishonoured cheques 6 - Leave gratuity – ex employees 9 232 - Total 9 245 304

12.5 Fruitless and wasteful expenditure

Note 2017/18 2016/17 12 R’000 R’000

Opening balance 98 98 Total 98 98

12.6 Impairment of receivables

Note 2017/18 2016/17 12 R’000 R’000 Estimate of impairment of receivables 323 233 Total 323 233

159

12. Investments 2017/18 2016/17 R’000 R’000 Non-Current Shares and other equity Mayibuye Transport Corporation 248 356 241 356 EC Government Fleet Management Services 362 002 362 002 Total non-current 610 358 603 358

2017/18 2016/17 R’000 R’000 Analysis of non-current investments Opening balance 603 358 593 358 Additions in cash 7 000 10 000 Closing balance 610 358 603 358

13.1 Impairment of investments

2017/18 2016/17 R’000 R’000 Estimate of impairment 140 000 123 897 Total 140 000 123 897

13. Voted funds to be surrendered to the Revenue Fund

2017/18 2016/17 R’000 R’000 Opening balance 4 226 1 188

Transfer from statement of financial performance (as restated)

6 265

4 226 Paid during the year (4 226) (1 188) Closing balance 6 265 4 226

15. Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund

2017/18 2016/17 R’000 R’000 Opening balance 16 869 13 304 Own revenue included in appropriation 648 540 651 103 Paid during the year (654 018) (647 538) Closing balance 11 391 16 69

160

16. Payables – current

Notes 2017/18 2016/17 R’000 R’000 Payroll clearing accounts 16.1 647 1 376 Other payables 16.2 6 301 1 328 Total 6 948 2 704

16.1 Clearing accounts

Note 2017/18 2016/17 16 R’000 R’000 Payroll clearing accounts 647 1 376 Total 647 1 376

16.2 Other payables

Note 2017/18 2016/17 16 R’000 R’000 Enatis – (RTMC) 6 285 1 328 Pension recoverable 16 - Total 6 301 1 328

17. Net cash flow available from operating activities

2017/18 2016/17 R’000 R’000

Net surplus as per Statement of Financial Performance

1 084

9 575

Add back non cash/cash movements not deemed operating activities

45 801

78 578 (Increase)/decrease in receivables – current (9 645) 3 867 Increase in payables – current 4 244 116 Proceeds from sale of capital assets 60 906 72 218 Surrenders to Revenue Fund (658 244) (648 726) Own revenue included in appropriation 648 540 651 103 Net cash flow generated by operating activities 46 885 88 53

161

18. Reconciliation of cash and cash equivalents for cash flow purposes

2017/18 2016/17 R’000 R’000 Consolidated Paymaster General account 25 666 30 196 Total 25 666 30 96

19. Contingent liabilities and contingent assets 19.1 Contingent liabilities

Note 2017/18 2016/17 R’000 R’000 Liable to Nature Claims against the department Annex 3A 74 829 72 224 Other Annex 3A 47 112 39 502 Total 121 941 111 726

Other consists of: • R37, 8 million relating to Fleet Africa. The Department of Transport has an ongoing dispute with Fleet Africa Eastern Cape (Pty)

Ltd whereby Fleet Africa undertook to render services for the Department whilst Eastern Cape Provincial Government Fleet Management Services (ECGFMS) undertook to lease certain vehicles.

• R 7,610 million relating to the South African Revenue Services (SARS). An objection was lodged to SARS for interest and penalties that were charged for leave gratuity underpaid.

• All these matters are still pending at reporting date.

19.2 Contingent assets

2017/18 2016/17 R’000 R’000 Nature of contingent asset Industrial Strike 391 391 Total 391 391

There is no change in R 391 thousand from prior year due to unresolved matters / disputes.

162

20 Commitments

2017/18 2016/17 R’000 R’000 Current expenditure Approved and contracted 573 837 9 954 573 837 9 954 Capital expenditure Approved and contracted 369 144 1 487 395 369 144 1 487 395 Total Commitments 942 981 1 497 349

Total commitments exceeding one year amounts to R 369, 144 million relating to scholar transport.

21.Accruals and payables not recognised

21.1 Accruals

2017/18 2016/17 R’000 R’000 Listed by economic classification

30 Days 30+ Days Total Total Goods and services 59 332 1 917 61 249 40 032 Transfers and subsidies 13 838 - 13 838 12 012 Capital assets 618 46 664 61 Total 73 788 1 963 75 751 52 105

2017/18 2016/17 R’000 R’000 Listed by programme level Programme 1: Administration 8 150 2 622 Programme 2: Transport Infrastructure 438 - Programme 3: Transport Operations 58 199 42 658 Programme 4: Transport Regulation 5 148 3 266 Programme 5: Community Based 3 816 3 559 Total 75 751 52 105

Included in the R 75,751 million is accruals for scholar transporters amounting to approximately R 42 million.

163

21.2 Payables not recognised

2017/18 2016/17 R’000 R’000 Listed by economic classification

30 Days 30+ Days Total Total Goods and services 16 961 1 588 18 549 21 862 Transfers and subsidies 7 253 - 7 253 - Capital assets 7 848 2 7 850 576 Other 153 - 153 - Total 32 215 1 590 33 805 22 438

2017/18 2016/17 Listed by programme level Programme 1: Administration 5 043 845 Programme 2: Transport Infrastructure 61 10 Programme 3: Transport Operations 19 838 18 758 Programme 4: Transport Regulations 8 728 2 802 Programme 5: Community Based 135 23 Total 33 805 22 438

22. Employee benefits

2017/18 2016/17 R’000 R’000 Leave entitlement 33 486 30 916 Service bonus (Thirteenth cheque) 16 816 15 464 Overtime 1 653 677 Total 51 955 47 057

Included in the leave entitlement amount of R33, 486 million is negative leave days amounting to R398 thousand affecting 38 employees. The figure has not been adjusted for cut off leave as the impact of such is immaterial.

164

23. Lease commitments

23.1 Operating leases

2017/18

Buildings and other fixed structures

Total Not later than 1 year 1 156 1 156 Later than 1 year and not later than 5 years 1 186 1 186 Later than five years 1 774 1 774 Total lease commitments 4 116 4 116

2016/17


Total Not later than 1 year 152 152 Total lease commitments 152 152

23.2 Finance leases

2017/18

Machinery and

equipment

Total Not later than 1 year 30 012 30 012 Later than 1 year and not later than 5 years 34 291 34 291 Later than five years Total lease commitments 64 303 64 303

2016/17

Machinery and equipment

Total Not later than 1 year 24 104 24 104 Later than 1 year and not later than 5 years 33 249 33 249 Total lease commitments 57 353 57 353

The R 64,303 million in the current year relates to the leasing of cellphone lines, photocopiers with a term of 3 years and vehicles with 3 – 5 year contract terms.

165

24 Accrued departmental revenue Note 2017/18 2016/17 24.1 R’000 R’000 Tax revenue 46 331 39 525 Sales of goods and services other than capital assets 302 108 Interest, dividends and rent on land 17 296 15 985 Sales of capital assets 12 712 12 465 Total 76 641 68 083

24.1 Analysis of accrued departmental revenue

Note 2017/18 2016/17 24 R’000 R’000 Opening balance 68 083 60 895 Less: amounts received (619 615) (614 073) Add: amounts recorded 628 173 621 261 Closing balance 76 641 68 083

24.2 Impairment of accrued departmental revenue

Note 2017/18 2016/17 R’000 R’000

Estimate of impairment of accrued departmental revenue

30 375

29 065 Total 30 375 29 065

25. Irregular expenditure

25.1 Reconciliation of irregular expenditure

Notes 2017/18 2016/17 R’000 R’000 Opening balance 130 583 117 913 Add: Irregular expenditure – relating to current year 25.2 27 446 39 879 Less: Prior year amounts condoned - (16 603) Less: Amounts not condoned and recoverable - (5) Less: Amounts not condoned and not recoverable 25.3 (1 625) (10 601) Closing balance 156 404 130 583

Analysis of awaiting condonation per age classification

Current year 25 821 39 879 Prior years 130 583 90 704 Total 156 404 130 583

166

25.2 Details of irregular expenditure – added current year (relating to current and prior years)

Incident Disciplinary steps taken/criminal proceedings 2017/18 R’000

Upgrading of Traffic Offices without performance agreements

Awaiting response from DPSA to be condoned

13 672 Finance lease exceeding lease period Written off by the Accounting officer 1 625 Non -compliant Scholar Transporters Under investigation 9 727 Contracts management To be investigated 2 422 Total 27 446

25.3 Details of irregular expenditure not recoverable (not condoned)

Incident Not condoned by (condoning authority) 2017/18

R’000 Finance lease exceeding lease period Accounting officer 1 625 Total 1 625

26. Fruitless and wasteful expenditure 26.1 Reconciliation of fruitless and wasteful expenditure

Notes 2017/18 2016/17 R’000 R’000 Opening balance 815 645

Fruitless and wasteful expenditure – relating to current year 26.3

296

170 Less: Amounts resolved (700) - Closing balance 411 815

26.2 Analysis of awaiting resolution per economic classification

2017/18 2016/17 R’000 R’000 Current 245 815 Total 245 815

26.3 Analysis of Current year’s (relating to current and prior years) fruitless and wasteful expenditure

Incident Disciplinary steps taken/criminal proceedings 2017/18

R’000 Interest paid Under Investigation 218 Payment for a service rendered in vain Under Investigation 78 Total 296

167

27.Related party transactions

Revenue received 2017/18 2016/17 R’000 R’000 Claims received 38 206 36 768 Total 38 206 36 768

Payments made 2017/18 2016/17 R’000 R’000 Goods and services 24 987 17 018 Salaries paid 38 052 36 766 Expenditure for capital assets 33 043 39 097 Transfers 117 704 113 801 Total 213 786 206 682

2017/18 2016/17 R’000 R’000 Year end balances arising from revenue/payment Receivables from related parties 2 091 1 Payables to related parties (3 496) (5 891) Total (1 405) (5 890)

Refer to note 19 for contingent liabilities that have a related party effect.

2017/18 2016/17 R’000 R’000 In kind goods and services provided/received Rental 27 789 17 886 Municipal services 3 725 2 110 Total 31 514 19 996

The Department occupies Stellenbosch Park and other buildings free of charge. These properties are leased by the Department of Roads and Public Works (DRPW) and they also pay municipal services. The municipal services incurred by the DRPW can be identified and have been disclosed as related party transactions. Related part relationships

• Mayibuye Transport Corporation – the department has 100% share investment in the entity • Eastern Cape Government Fleet Services – is under the direct control of the department and salaries are paid to employees

as part of Human Resource function • Department of Safety Security and Liaison – under the department’s MEC portfolio

14.

168

28. Key management personnel

No. of Individuals 2017/18 2016/17

R’000 R’000 Political office bearers (provide detail below) Officials: 1 1 970 1 901

Level 15 to 16 2 3 535 3 350 Level 14 (incl. CFO if at a lower level) 6 7 218 5 754

Total 12 723 11 005

29. Provisions

2017/18 2016/17 R’000 R’000 Capped leave 72 336 75 355 Performance bonus 8 453 7 962 Total 80 789 83 317

29.1 Reconciliation of movement in provisions – 2017/18

Capped leave Performance bonus Total provisions

R’000 R’000 R’000 Opening balance 75 355 7 962 83 317 Increase in provision 15 467 8 453 23 920 Settlement of provision (18 486) (3 334) (21 820) Unused amount reversed - (4 628) (4 628) Closing balance 72 336 8 453 80 789

29.2 Reconciliation of movement in provisions – 2016/17

Capped leave Performance bonus Total provisions

R’000 R’000 R’000

Opening balance 77 721 7 836 85 557

Increase in provision 6 889 - 6 889

Settlement of provision (9 255) (2 388) (11 643)

Unused amount reversed - (5 448) (5 448) Provision raised - 7 962 7 962

Closing balance 75 355 7 962 83 317

The capped leave amount is estimated based on current number of capped leave days outstanding and the notch at year end. The performance services bonus is estimated based on 1.5% of the budgeted cost of employment in line with PMDS policy.

169

30 .Non-adjusting events after reporting date Nature of event Transfer of the Roads Function from the Department of Roads and Public Works to the Department of Transport The Premier of the Province of the Eastern Cape, acting in terms of section 137 (b) of the Constitution of the Republic of South Africa, 1996, read with section 3A (b) of the Public Service Act, 1994 made a pronouncement that the Roads Function from the Department of Roads and Public Works be transferred to the Department of Transport with effect from the 1st April 2018. The budget is approximately R 2.8 billion. The Member of the Executive Council (MEC) for Transport tabled her policy speech inclusive of the Roads transfer for the 2018/19 financial year on the 15th March 2018.

31.Movable Tangible Capital Assets

MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2018

Opening balance

Value adjustments Additions Disposals Closing Balance

R’000 R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT

92 956

-

21 197

3 528

110 625 Transport assets 40 144 - 4 996 1 518 43 622 Computer equipment 17 722 - 2 308 1 326 18 704 Furniture and office equipment 9 739 - 347 307 9 779 Other machinery and equipment 25 351 - 13 546 377 38 520 TOTAL MOVABLE TANGIBLE CAPITAL ASSETS

92 956

-

21 197

3 528

110 625

Movable Tangible Capital Assets under investigation Number Value R’000 Included in the above total of the movable tangible capital assets per the asset register are assets that are under investigation:

Machinery and equipment 8 47 The above assets were stolen or lost and reported to the loss control unit which is undertaking the investigation process.

170

31.1 Additions

ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2018

Cash Non-cash (Capital Work in Progress current costs and finance lease payments)

Received current, not paid (Paid current year, received prior year)

Total

R’000 R’000 R’000 R’000 R’000 MACHINERY AND EQUIPMENT 57 293 - (36 096) - 21 197 Transport assets 38 038 - (33 042) - 4 996 Computer equipment 2 308 - - - 2 308

Furniture and office equipment 347 - - - 347

Other machinery and equipment 16 600 - (3 054) - 13 546 TOTAL ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS

57 293

-

(36 096)

-

21 197 The expenditure for Capital Assets per vote 10 amounts to R57, 293 million, split as follows: R36, 096 million for Financial Leases Transport assets and R 3, 054 million for Finance Leases other machinery and equipment. Included in Transport assets is an amount of R4, 072 million for 3 Cattle Trucks for Traffic Control which were paid for from Aid Assistance. 31.2 Disposals

DISPOSALS OF MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2018

Sold for cash Non-cash disposal

Total disposals Cash Received Actual

R’000 R’000 R’000 R’000 MACHINERY AND EQUIPMENT 1 518 2 010 3 528 454 Transport assets 1 518 - 1 518 454 Computer equipment - 1 326 1 326 - Furniture and office equipment - 307 307 - Other machinery and equipment - 377 377 - TOTAL DISPOSAL OF MOVABLE TANGIBLE CAPITAL ASSETS

1 518

2 010

3 528

454

The asset disposals amounting to R3, 528 million are as a result of Donations, Scrapping, Write-Off, Losses and auctioning of departmental assets.There is a cash received amount of R454 thousand resulting from an Insurance payout

171

31.3 Movement for 2016/17

MOVEMENT IN TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2017

Opening balance Prior period

error Additions Disposals Closing Balance R’000 R’000 R’000 R’000 R’000

MACHINERY AND EQUIPMENT

82 039

-

12 301

1 384

92 956 Transport assets 31 605 - 8 539 - 40 144 Computer equipment 16 289 - 1 941 508 17 722 Furniture and office equipment 8 990 - 1 536 787 9 739 Other machinery and equipment 25 155 - 285 89 25 351 TOTAL MOVABLE TANGIBLE CAPITAL ASSETS

82 039

-

12 301

1 384

92 956

31.4 Minor assets

MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED AS AT 31 MARCH 2018 Machinery and

equipment Total R’000 R’000

Opening balance 9 578 9 578 Additions 732 732 Disposals (152) (152) TOTAL MINOR ASSETS 10 158 10 158

Machinery and

equipment Total Number of R1 minor assets 12 028 12 028 Number of minor assets at cost 5 895 5 895 TOTAL NUMBER OF MINOR ASSETS

17 923

17 923

172

Minor Capital Assets under investigation Number Value R’000 Included in the above total of the minor capital assets per the asset register are assets that are under investigation:

Machinery and equipment 12 13

MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED AS AT 31 MARCH 2017

Machinery and equipment Total

R’000

R’000

Opening balance 8 851 8 851 Additions 827 827 Disposals 100 100 TOTAL MINOR ASSETS

9 578

9 578

Machinery and equipment

Total

Number of R1 minor assets 13 372 13 372 Number of minor assets at cost 5 643 5 643 TOTAL NUMBER OF MINOR ASSETS

19 015

19 015

31.5 Movable assets written off

MOVABLE ASSETS WRITTEN OFF FOR THE YEAR ENDED AS AT 31 MARCH 2017

Machinery and equipment Total R’000 R’000

Assets written off

100

100 TOTAL MOVABLE ASSETS WRITTEN OFF 100 100

MOVABLE ASSETS WRITTEN OFF FOR THE YEAR ENDED AS AT 31 MARCH 2018 Machinery and

equipment Total R’000 R’000

Assets written off 152 152

TOTAL MOVABLE ASSETS WRITTEN OFF 152 152

173

32. Intangible Capital Assets

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2018

Opening balance Value adjustments Additions Disposals Closing Balance

R’000 R’000 R’000 R’000 R’000 SOFTWARE 43 - - - 43 TOTAL INTANGIBLE CAPITAL ASSETS

43

-

-

-

43

32.1 Movement for 2016/17

MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2017

Opening balance Prior period

error Additions Disposals Closing Balance

R’000 R’000 R’000 R’000 R’000 SOFTWARE - - 43 - 43 TOTAL INTANGIBLE CAPITAL ASSETS

-

-

43

-

43

33.Immovable Tangible Capital Assets

MOVEMENT IN IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2018

Opening balance Value

adjustments Additions Disposals Closing Balance

R’000 R’000 R’000 R’000 R’000

BUILDINGS AND OTHER FIXED STRUCTURES

-

-

462

-

462

Non-residential buildings - - 462 - 462

TOTAL IMMOVABLE TANGIBLE CAPITAL ASSETS

-

-

462

-

462

174

33.1 Additions

ADDITIONS TO IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2018

Cash Non-cash (Capital Work in Progress current costs and finance lease payments)

Received current, not paid (Paid current year, received prior year)

Total

R’000 R’000 R’000 R’000 R’000 BUILDING AND OTHER FIXED STRUCTURES

3 613

-

(3 151)

-

462

Non-residential buildings 3 613 - (3 151) - 462 TOTAL ADDITIONS TO IMMOVABLE TANGIBLE CAPITAL ASSETS

3 613

-

(3 151)

-

462 33.2 Capital Work-in-progress

CAPITAL WORK-IN-PROGRESS AS AT 31 MARCH 2018 Note Opening

balance 1 April 2017

Current Year WIP

Ready for use (Assets to the AR) / Contracts terminated

Closing balance 31 March 2018

Annexure 6 R’000 R’000 R’000 R’000 Buildings and other fixed structures

300 004

3 151

-

303 155

Machinery and equipment 4 493 - - 4 493 TOTAL 304 497 3 151 - 307 648

Age analysis on ongoing projects

Number of projects 2017/18

Planned, Construction

not started


started Total

R’000 0 to 1 Year 3 7 644 1 to 3 Years - - 3 to 5 Years - - Longer than 5 Years 1 300 004 Total 4 307 648

175

CAPITAL WORK-IN-PROGRESS AS AT 31 MARCH 2017 Note Opening

balance 1 April 2016

Prior period error

Current Year WIP

Ready for use (Assets to the AR) ) / Contracts terminated

Closing balance 31 March 2017

Annexure 6

R’000 R’000 R’000 R’000 R’000


-

-

300 004

-

300 004

Machinery and equipment - - 4 493 - 4 493 TOTAL - - 304 497 - 304 497

The Work-In-Progress relates to the Upgrade at Mthatha Airport and the Assembling of a Fire Foam Truck for Mthatha Airport.

34. Principal-agent arrangements

34.1 Department acting as the principal Received by the Department 2017/18 2016/17 R’000 R’000 Municipalities 70 726 69 940 South African Post Office 74 615 74 103 Total 145 341 144 043

The agent collect and retain 19% of collected fees as agency fees and pay over the balance by the end of the following month. 34.2 Department acting as the agent 34.2.1 Revenue received for agency activities

2017/18 2016/17 R’000 R’000 Road Traffic Management Corporation 38 359 30 052 Total 38 359 30 052

176

34.2.2 Reconciliation of funds and disbursements – 2017/18

Category of revenue or expenditure per arrangement Total funds received Expenditure incurred

against funds R’000 R’000 Road Traffic Management Corporation 38 359 - Total 38 359 -

34.2.3 Reconciliation of carrying amount of receivables and payables – 2017/18 Payables

Name of principal entity Opening balance Total agency

funds received

Amounts committed to the

principal Closing Balance R’000 R’000 R’000 R’000 RTMC 1 328 38 359 33 402 6 285 Total 1 328 38 359 33 402 6 285

The eNatis system used by the department and registration authorities is the property of RTMC. Administration fees are charged on each transaction which is paid by the registration authorities to the department. RTMC appointed the department to collect these administration fees and pay them over to RTMC monthly. Funds due to RTMC for fees collected in March 2018 is held in the books of the department

177

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EXPE

NDIT

URE

2016

/17

Adju

sted

Ap

prop

riatio

n Ac

t

Roll

Over

s Ad

just

men

ts

Tota

l Av

ailab

le Ac

tual

Tran

sfer

%

of

Avail

able

fund

s Tr

ansf

erre

d

Fina

l Ap

prop

riatio

n

R'00

0 R'

000

R'00

0 R'

000

R'00

0 %

R'

000

Socia

l ben

efits

18 48

7 -

- 18

487

18 48

7 0%

9 3

26

TOTA

L 18

487

- -

18 48

7 18

487

0%

9 326

181

ANNE

XURE

1D

STAT

EMEN

T OF

GIF

TS, D

ONAT

IONS

AND

SPO

NSOR

SHIP

S RE

CEIV

ED

NAME

OF

ORGA

NISA

TION

NA

TURE

OF

GIFT

, DON

ATIO

N OR

SPO

NSOR

SHIP

2017

/18

2016

/17

R’00

0 R’

000

Rece

ived

in ca

sh

Ol

d Mutu

al Ba

r frid

ge

- 3

RTMC

Tw

o tru

cks

- 8 5

38

Spon

sor –

Joe G

qabi

Shee

p 1

- TO

TAL

1

8 538

182

ANNE

XURE

1E

STAT

EMEN

T OF

AID

ASS

ISTA

NCE

RECE

IVED

NA

ME O

F DO

NOR

PURP

OSE

OPEN

ING

BALA

NCE

REVE

NUE

EXPE

NDI-

TURE

PAID

BAC

K ON

/BY

31

MARC

H CL

OSIN

G BA

LANC

E

R'

000

R'00

0 R'

000

R'00

0 R'

000

Rece

ived

in ca

sh

Tra

nspo

rt Ed

ucati

on &

Tra

ining

(TET

A)

Lear

nersh

ip

1 04

2 1

278

1 455

-

865

Tra

nspo

rt Ed

ucati

on &

Tra

ining

(TET

A) F

lagsh

ip pr

ogra

mme

Lear

nersh

ip

1 -

- -

1 P

ublic

Sec

tor E

duca

tion T

raini

ng A

uthor

ity (P

SETA

) Le

arne

rship

78

- -

- 78

Ro

ad T

raffic

Man

agem

ent C

orpo

ratio

n (RT

MC)

Profe

ssion

alism

of T

raffic

Se

rvice

s 6

077

- 5

004

- 1 0

73

T

OTAL

7 19

8 1 2

78

6 459

-

2 017

183

ANNE

XURE

1F

STAT

EMEN

T OF

GIF

TS, D

ONAT

IONS

AND

SPO

NSOR

SHIP

S MA

DE

NATU

RE O

F GI

FT, D

ONAT

ION

OR S

PONS

ORSH

IP

(Gro

up m

ajor c

ateg

ories

but

list m

ater

ial it

ems i

nclu

ding

nam

e of o

rgan

isatio

n

2017

/18

2016

/17

R’00

0 R’

000

Ma

de in

kind

Vario

us or

ganis

ation

s 1 0

99

764

TO

TAL

1 09

9 76

4

184

ANNE

XURE

1G

STAT

EMEN

T OF

ACT

UAL

MONT

HLY

EXPE

NDIT

URE

PER

GRAN

T

Apr

May

Jun

Jul

Aug

Sept

Oc

t No

v De

c Ja

n Fe

b Ma

r

20

17

2017

20

17

2017

20

17

2017

20

17

2017

20

17

2018

20

18

2018

To

tal

Gran

t Typ

e R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

R'00

0 R'

000

Algo

a bus

and

EPW

P -

17 06

8 22

361

21 41

8 20

220

21 97

0 20

837

21 84

4 21

951

15 91

8 20

577

32 00

8 23

6 172

TO

TAL

- 17

068

22 36

1 21

418

20 22

0 21

970

20 83

7 21

844

21 95

1 15

918

20 57

7 32

008

236 1

72

EPW

P gr

ant a

moun

ted to

R 4,

920 m

illion

and P

ublic

Tra

nspo

rt Op

erati

ons a

moun

ted to

R 23

1, 25

2 mi

llion

185

ANNE

XURE

2A

STAT

EMEN

T OF

INVE

STME

NTS

IN A

ND A

MOUN

TS O

WIN

G BY

/TO

NATI

ONAL

/PRO

VINC

IAL

PUBL

IC E

NTIT

IES

Na

me o

f Pub

lic E

ntity

Stat

e Ent

ity’s

PFMA

Sc

hedu

le ty

pe

31 M

arch

2018

%

Held

20

17/18

Nu

mbe

r of s

hare

s he

ld

Cost

of i

nves

tmen

t Ne

t Ass

et va

lue o

f in

vest

men

t Pr

ofit/

(Los

s) fo

r the

ye

ar

Loss

es

guar

ante

ed

R’00

0 R’

000

R’00

0 %

Held

20

16/17

20

17/18

20

16/17

20

17/18

20

16/17

20

17/18

20

16/17

20

17/18

20

16/17

Ye

s/No

Natio

nal/P

rovin

cial

Publ

ic En

tity

May

ibuye

Tra

nspo

rt Co

rpor

ation

Sc

hedu

le 3D

100%

100%

24

8 356

24

1 356

24

8 356

24

1 356

10

8 354

11

7 458

(19

670)

(32 2

60)

EC G

over

nmen

t Flee

t Ma

nage

ment

Servi

ces

Trea

sury

Regu

lation

s 19

N/

A

N/

A

-

- 36

2 002

36

2 002

1 1

43 18

4

1 1

43 31

4

18

2 118

22

2 892

T

OTAL

248 3

56

241 3

56

610 3

58

603 3

58

1 251

538

1 260

772

162 4

48

190 6

32

186

ANNE

XURE

2B

STAT

EMEN

T OF

INVE

STME

NTS

IN A

ND A

MOUN

TS O

WIN

G BY

/TO

ENTI

TIES

(CON

TINU

ED)

Nam

e of P

ublic

Ent

ity

Natu

re o

f bus

ines

s

Cost

of i

nves

tmen

t Ne

t Ass

et va

lue o

f In

vest

men

t Am

ount

s owi

ng to

En

tities

Am

ount

s owi

ng b

y En

tities

R’

000

R’00

0 R'

000

R'00

0

2017

/18

2016

/17

2017

/18

2016

/17

2017

/18

2016

/17

2017

/18

2016

/17

Mayib

uye T

rans

port

Corp

orati

on

Publi

c Bus

Tra

nspo

rt Se

rvice

24

8 356

241 3

56

108 3

54

11

7 458

-

EC

GFMS

Tra

ding

Entity

Pr

ovinc

ial G

over

nmen

t Fle

et

362 0

02

36

2 002

1 1

43 18

4

1 143

314

( 3 49

6)

(5

891)

2

091

1

TOTA

L

610 3

58

603 3

58

1 251

538

1 260

772

(3 49

6)

(5 89

1)

2 091

1

187

ANNE

XURE

3A

STAT

EMEN

T OF

CON

TING

ENT

LIAB

ILIT

IES

AS A

T 31

MAR

CH 20

18

Natu

re o

f Liab

ility

Open

ing

Balan

ce

Liab

ilities

in

curre

d du

ring

the

year

Liab

ilities

pa

id/ca

ncell

ed/re

duce

d du

ring

the y

ear

Liab

ilities

re

cove

rabl

e (P

rovid

e de

tails

he

reun

der)

Clos

ing

Balan

ce

1 Apr

il 201

7 31

Mar

ch

2018

R’

000

R’00

0 R’

000

R’00

0 R’

000

Claim

s aga

inst

the d

epar

tmen

t

Clai

ms ag

ainst

State

72

224

3 26

8 66

3 -

74 82

9 S

ubto

tal

72 22

4 3 2

68

663

- 74

829

Othe

r

Fleet

Afric

a 37

804

- -

- 37

804

HROP

T 1 6

98

- -

- 1 6

98

SARS

-

7 610

-

- 7 6

10

Sub

tota

l 39

502

7 610

-

- 47

112

TOTA

L 11

1 726

10

878

663

- 12

1 941

188

ANNE

XURE

4 CL

AIMS

REC

OVER

ABLE

Go

vern

men

t Ent

ity

Conf

irmed

bala

nce o

utst

andi

ng

Unco

nfirm

ed b

alanc

e ou

tsta

ndin

g To

tal

Cash

in tr

ansit

at ye

ar en

d 20

16/17

31

/03/20

18

31/03

/2017

31

/03/20

18

31/03

/2017

31

/03/20

18

31/03

/2017

Re

ceip

t dat

e up

to si

x (6)

wo

rkin

g da

ys

afte

r yea

r end

Amou

nt

R’00

0 R’

000

R’00

0 R’

000

R’00

0 R’

000

R’

000

Depa

rtmen

t

G

P: W

ater a

nd S

anita

tion

- -

- 11

6 -

116

- -

EC:

Dep

artm

ent o

f Hea

lth

- -

27

- 27

-

- -

EC:

Dep

artm

ent o

f Soc

ial

Deve

lopme

nt

- -

296

- 29

6 -

- -

-

- 32

3 11

6 32

3 11

6 -

-

Othe

r Gov

ernm

ent E

ntiti

es

EC

GFMS

Tra

ding

Entity

-

1 3

- 3

1 -

-

-

1 3

- 3

1 -

-

TOTA

L -

1 32

6 11

6 32

6 11

7 -

-

189

ANNE

XURE

5 IN

TER-

GOVE

RNME

NT P

AYAB

LES

GOVE

RNME

NT E

NTIT

Y

Conf

irmed

bala

nce

outs

tand

ing

Unco

nfirm

ed b

alanc

e ou

tsta

ndin

g TO

TAL

Cash

in tr

ansit

at ye

ar en

d 20

16/17

31

/03/20

18

31/03

/2017

31

/03/20

18

31/03

/2017

31

/03/20

18

31/03

/2017

Pa

ymen

t dat

e up

to si

x (6)

wo

rkin

g da

ys

befo

re ye

ar

end

Amou

nt

R’00

0 R’

000

R’00

0 R’

000

R’00

0 R’

000

R’

000

DEPA

RTME

NTS

Curre

nt

EC: D

epar

tmen

t of S

afety

and L

iaiso

n -

- 3

- -

- -

- Su

btot

al -

- 3

- -

- -

-

OTHE

R GO

VERN

MENT

ENT

ITY

Curre

nt

EC

GFMS

Tra

ding

Entity

-

- 3 4

96

- -

- -

- Su

btot

al -

- 3 4

96

- -

- -

-

Tota

l -

- 3 4

99

- -

- -

-

190

ANNEXURE 6 MOVEMENT IN CAPITAL WORK IN PROGRESS

MOVEMENT IN CAPITAL WORK IN PROGRESS FOR THE YEAR ENDED 31 MARCH 2018 Opening

balance Current Year Capital WIP

Ready for use (Asset register) / Contract

terminated

Closing balance

R’000 R’000 R’000 R’000 MACHINERY AND EQUIPMENT 4 493 - - 4 493 Transport assets 4 493 - - 4 493 BUILDINGS AND OTHER FIXED STRUCTURES 300 004 3 151 303 155 Other fixed structures 300 004 - - 300 004 Non-residential buildings - 3 151 - 3 151 TOTAL 304 497 3 151 - 307 648

Age analysis on ongoing projects

Number of projects 2017/18 Planned,

Construction not started


started

Total R’000

0 to 1 Year 3 7 644 1 to 3 Years - - 3 to 5 Years - - Longer than 5 Years 1 300 004 Total 4 307 648

191

MOVEMENT IN CAPITAL WORK IN PROGRESS FOR THE YEAR ENDED 31 MARCH 2017 Opening balance Prior period

error Current

Year Capital WIP

Ready for use (Asset register) / Contract

terminated

Closing balance

R’000 R’000 R’000 R’000 R’000 MACHINERY AND EQUIPMENT - - 4 493 - 4 493 Transport assets - - 4 493 - 4 493 BUILDINGS AND OTHER FIXED STRUCTURES

287 975

-

12 029

-

300 004

Other fixed structures 287 975 - 12 029 - 300 004 TOTAL 287 975 - 16 522 - 304 497

192

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Officer’s Responsibilities and Approval 1. Accounting Officer's Responsibilities and Approval

The accounting officer is required by the Public Finance Management Act (Act 1 of 1999) as amended, to maintain adequate accounting records and is responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is the responsibility of the accounting officer to ensure that the annual financial statements fairly present the state of affairs of the entity as at the end of the quarter and the results of its operations and cash flows for the period then ended.

The annual financial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.

The annual financial statements are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The accounting officer acknowledges that she is ultimately responsible for the system of internal financial control established by the entity and places considerable importance on maintaining a strong control environment. To enable the accounting officer to meet these responsibilities, the accounting authority sets standards for internal control aimed at reducing the risk of error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a dearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards in ensuring the entity's business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the entity is on identifying, assessing, managing and monitoring all known forms of risks across the entity. While operating risk cannot be fully eliminated, the entity endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The accounting officer is of the opinion, based on the information and explanations given by management. that the system of internal control provides reasonable assurance that the financial records can toe relied on for the preparation of the annual financial statements.

The accounting officer has reviewed the entity's cash flow forecast for the year to 31 March 2018 and, in the light of this review and the current financial position, she is satisfied that the entity has access to adequate resources to continue in operational existence for the foreseeable future. The entity has surrendered R322 million in the current financial year which then reduced the entity's surplus for the year. The surrender of funds to Provincial Treasury is depleting from the entity's reserves that should be kept for replacement of tease vehicles, and as a result there is possibility that the entity will not have sustainable cash reserves to cover its capital commitments in the medium-long term future

The annual financial statements set out on pages 221 to 258, which have been prepared on the going concern basis, were approved by the accounting authority on 30 July 2018 and were signed by: ____________________________ Ms I.N Mpolweni Head of Department

200

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Officer’s Report Government Fleet Management Services Trading Entity Audit and Risk Committee Report for the year ended 31 March 2018 Report of the Audit Committee We are pleased to present our report for the financial year ended 31 March 2018. Audit Committee and attendance The Audit Committee consists of the members listed hereunder and should meet per the schedule of meetings as per its approved Audit Committee charter. Name of member Ms. L Smith (CA) SA – Chairperson Mr. J Emslie (CA) SA Mr. V Tshangana (Practising Attorney) It should be noted that Mr. J Emslie’s term came to an end on 31 March 2018. Audit and Risk Committee Responsibility The Audit Committee reports that it has complied with its responsibilities arising from section 38 (1)(a)(ii) and 77 of the Public Finance Management Act. The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein, except that we have not reviewed changes in accounting policies and practices as this function was performed by the internal audit. The Effectiveness of Internal Control and Financial Concerns Management presents to the Audit Committee an audit tracking document whereby all the items raised by the previous internal audit and Auditor General Reports are monitored. Recommendations are not always implemented by the Entity. Quarterly Financial and Performance Reports The Audit Committee reviews the quarterly finance and performance reports. The Committee is concerned over the lack of achievement of targets in respect of the performance report. In terms of the financial reporting the Committee has recommended that the Entity consider establishing a Capital Replacement Reserve for replacing all vehicles in order to ensure that there are sufficient funds available to capitalize the Entity adequately. Such a fund will ensure that the entity continues to meet its core mandate. Internal Audit The Entity has a functioning internal audit unit which has presented the following reports to the Committee during the year: -

• Annual Financial Statements Review • Annual Performance Report • Performance Information Quarterly Reviews • Interim Financial Statements Quarterly Reviews • Audit Intervention Plan • Fleet Maintenance Review and Standard Bank Account • Fleet Risk Administration • Fleet Development and Provision • Revenue Management • Performance Management and Development System (PMDS) Review

Other Matters Structure of the Entity The Committee is concerned over the Structure of the Entity, i.e. been a “Trading Entity” within the Eastern Cape Department of Transport as it does not allow for ease of trading and strategic planning for the Entity. Hence this needs to be reviewed and a different Entity Structure should be considered.

201

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Officer’s Report Delegations Due to the nature of the Trading Entity being part of the Department of Transport it requires that for improved timely decisions and transactions to be implemented that there are delegations in respect of Human Resources and Finance from the Department of Transport to the Trading Entity. There is currently no delegation framework in place. Key Vacancies within the Trading Entity and Contract employees There are a number of key vacancies in place at the Trading Entity as well as employees who are on one-year contracts. This leads to a disruptive working environment and creates uncertainty. Evaluation of Financial Statements and Performance Information The Audit and Risk Committee has met to perform a review and discussion of the unaudited annual financial statements and the annual performance information report. In respect of the annual financial statements, the Committee performed a high level review of the financial statements and annual performance information. Auditor General’s report The Audit Committee concur with the findings of the Auditor General for the year ended 31 March 2018. _____________________ Ms. Loren Smith (CA) SA Chairperson: Audit Committee 31st July 2018

202

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Statement of Financial Position as at 31 March 2018

Notes

2018

R

2017 Restated*

R Assets Current Assets Finance lease receivables 3 178.130,956 227.140,737 Inventories 4 116,714,374 88,081,071 Receivables from exchange transactions 5 111,930,393 146,773,588 Cash and cash equivalents 6 298,000,713 509,135,930

704,776,436 971,131,326

Non-Current Assets Property, plant and equipment 7 128.897.645 78.706.804 Intangible assets 8 4.590 4,590 Finance lease receivables 3 396,642,061 339,926,613

525,544,296 418,638,007

Total Assets Liabilities 1,230,320,732 1,389,769,333

Current Liabilities Payables from exchange transactions 9 57,909.846 78,868.805 Provisions 10 27,405,756

85,315,602 29,222,597

108,091,402 Total Liabilities 85,315,602 108,091,402 Net Assets 1,145,005,130 1,281,677,931 Reserves Capital contribution

362,001.648 362,001,648

Accumulated surplus 783,003,482 919,676,283 Total Net Assets 1,145,005,130 1,281,677,931

203

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Statement of Financial Performance

Notes

2018

R

2017 Restated*

R Revenue Revenue from exchange transactions Rendering of services 11 420,434,957 385,251,985 Interest earned 12 89,607.568 114,834,485 Other income 13 10.735,126 4,182,980 Investment income 14 - 7.174,726

Total revenue from exchange transactions 520,777,651 511,444,176

Expenditure Personnel costs 15 36,679.530 37,087,495 Fleet running costs 16 303,083,681 269,826.802 Depreciation on property, plant and equipment 7 21,664,415 13,225,603 Inventory write down 17 1,075.947 126,354 Finance costs - 336,160 Debt written off - 14,603 Office building maintenance 117,339 185,151 Movements in provisions (1,823,307) 1.685,732 Administration costs 18 34,811.349 28,679.897

Total expenditure 397,598,954 351,167,797

Operating surplus 123,178,697 160,276,379 Loss of asset due to theft (22,558) (8.247) Fair value adjustments 19 - (5 462.648) Gain on sale of inventory held for sale 20 2,276,577 4,146,994 Derecognition of assets 60,462,024 87,916,349

62,716,043 86,592,448

Surplus for the year 185.894,740 246,868,827

204

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Statement of Changes in Net Assets Capital Accumulated Total net contribution surplus assets R R R Opening balance as previously reported Adjustments

362,001,648 578,216,524 940,218,172

Prior year adjustments - refer to Note 28 - 114.385,932 114,385.932

Balance at 01 April 2016 as restated' Changes in net assets

362,001,648 692,602,456 1,054,604,104

Surrender of surplus funds - (19,795,000) (19,795,000)

Net income (fosses) recognized directly in net assets - (19,795,000) (19.795,000) Restated surplus for the year - 246,868.827 246,868,827

Total recognised income and expenses for the year - 227,073,827 227.073,827

Total changes - 227,073,827 227,073.827

Restated* Balance at 01 April 2017 Changes in net assets

362,001,648 919,676,283 1,281,677,931

Surrender of surplus funds - (322,598,000) (322.598,000) Correction of error - Refer to note 28 - 30.459 30,459

Net income (losses) recognised directly in net assets - (322,567.541) (322,567,541) Surplus for the year - 185,894,740 185.894,740

Total recognised income and expenses for the year - (136,672,801) (136.672,801)

Total changes - (136.672.801) (136,672,801)

Balance at 31 March 2018 362,001,648 783,003,482 1,145,005,130

205

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Cash Flow Statement

Note(s) 2018

R

2017 Restated*

R Cash flows from operating activities Receipts

Safe of goods and services 455,278.152

411,281,717

Interest income - 7,174,726

Other receipts 10,735,126

4.182,980

Interest earned 12 89,607,568 114,834,485 555,620,846 537,473.908 Payments Employee costs (38,679.530) (37,087,495) Suppliers (531,569,397) (368,542,861) Finance costs - (336,160) (570,248,927) (405,966,516) Net cash flows from operating activities 22 (14,628.081) 131,507,392 Cash flows from investing activities Purchase of property, plant and equipment Movement in investment 7 220,182

- (10,382,267) 408.054,386

Net cash flows from investing activities 220,182 397,672,119 Cash flows from financing activities Finance lease receipts Surrender of surplus 125,870,682

(322.598,000) 109,853,888

(230,617,000) Net cash flows from financing activities (196,727,318) (120,763,112) Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year

(211,135,217) 509,135,930

408,416,399 100,719,531

Cash and cash equivalents at the end of the year 6 298,000,713 509,135,930

206

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Statement of Comparison of Budget and Actual Amounts

Statement of Financial Performance Revenue

Budget on Accrual Basis Approved Adjustments Final Budget Actual amounts Difference Reference budget on comparable between final basis budget and actual R R R R R

Revenue from exchange transactions Rendering of services 384,681.211 - 384,681,211 420,434.957 35,753,746 Note 34 interest received 125,458,661 - 125.458,661 89,607,568 (35,851,093) Note 34 Other income - - - 10,735,126 10,735,126 Note 34

Total revenue from exchange transactions 510,139,872 - 510.139,872 520,777,651 10,637,779

Expenditure

Personnel costs (43,124,833) * (43,124.833) (38,679,530) 4,445,303 Note 34 Fleet running costs (331,047,353) - (331.047,353) (303,083,681) 27,963,672 Note 34 Depreciation and amortisation - - - (21,654,415) (21,654,415) Note 34 Impairment of assets - - - (1,075,947) (1,075,947) Note 34 Other building maintenance (4,700,000) 1,000.000 (3,700,000) (117,339) 3,582,661 Note 34 Movements in provisions - - 1,823,307 1,823,307 Note 34 Administration costs (51,561,966) • (51,561,966) (34,811,349) 16,750.617 Note 34 Total expenditure (430,434,152) 1.000,000 (429,434,152) (397,598,954) 31,835,198

Operating surplus 79,705,720 1,000,000 80,705,720 123,178.697 42,472,977 Loss on asset due to theft - - - (22,558) (22,558) Gain on sale of inventory held - - - 2,276,577 2,276,577 Note 34 for sale Derecognition of assets - - - 60,462,024 60,462,024 Note 34 - - - 62,716,043 62,716,043 Surplus before taxation 79,705,720 1,000,000 80,705,720 185,894,740 105,189,020

Actual Amount on Comparable 79,705,720 1,000,000 80,705,720 185,894,740 105,189,020 Basis as Presented in the Budget and Actual Comparative Statement

207

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies

1. Presentation of Annual Financial Statements The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 91(1} of the Public Finance Management Act (Act 1 of 1999) as amended.

These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention as the basis of measurement, unless specified otherwise. They are presented in South African Rand-

A summary of the significant accounting policies, which have been consistently applied in the preparation of these annual financial statements, are disclosed below,

1.1 Presentation currency

These annual financial statements are presented in South African Rand, which is the functional currency of the entity,

1.2 Going concern assumption

These annual financial statements have been prepared based on the expectation that the entity wilt continue to operate as a going concern for at least the next 12 months.

1.3 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures, Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include:

Receivables from exchange transactions The entity assesses its trade receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the entity makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

Impairment testing The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value- in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions.

Provisions Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 10 - Provisions.

Accrued revenue At year end an estimation is made by management of kilometres travelled between the Iasi billing date and the last day of the financial year and an accrual is raised in this effect.

Gross investment in lease - residual value Residual values used in the calculation of the gross investment in lease are based on management's estimation, vehicle condition and expected use of the leased vehicles,

These residuals are calculated using a rate determined with reference to 1he potential decline in the value of fleet vehicles over the lease period as per trade value data. As the entity does not trade in the open market, the outcome as per the trade value data is reduced further by taking into account our operational environment. The residual values are aligned to those used for pricing as per approved rate card which are based on regression analysis of vehicle's market value, age and kilometres.

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Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies 1.3 Significant judgements and sources of estimation uncertainty (continued) Depreciation and amortization Depreciation and amortisation recognised on property, plant and equipment and intangible assets is determined based on the useful lives and residual values of the underlying items. The residual values and useful lives are based on managements’ estimation of the asset condition, its current use and expected future use of the asset. 1.4 Property, plant and equipment

Properly, plant and equipment are tangible non-current assets that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one reporting period. Initial recognition The cost of an item of properly, plant and equipment is recognised as an asset when

• it is probable that future economic benefits or service potential associated with the item will flow to the entity; and • the cost or fair value of the item can be measured reliably.

Property, plant and equipment is initially measured at cost. The cost of an item of properly, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost. Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition. Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or assets, or a combination of assets and non- monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item's fair value was not determinable, its deemed cost is the carrying amount of the asset(s) given up. Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment, Any remaining inspection costs from the previous inspection are derecognised. Operating lease are vehicles that exceed the maximum kilometres or lease period per the rate card but are still being used by the User departments are transferred to property, plant and equipment at deemed cost. The cost of a tracker and installation cost is recognised when a tracker has been fitted in the vehicle. Before the tracker is installed in the vehicle it is classified as inventory. Subsequent measurement Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. Any increase in an asset's carrying amount, as a result of a revaluation, is credited directly to a revaluation surplus. The increase is recognised in surplus or deficit to the extent that it reverses a revaluation decrease of the same asset previously recognised in surplus or deficit. The operating lease vehicles are subsequently measured at the deemed cost less accumulated depreciation and impairment over the remaining useful life. Properly, plant and equipment are depreciated on the straight line basis over their expected useful lives. The useful lives of items of property, plant and equipment have been assessed as follows: Item Average Useful life Furniture and fixture 4-7 years Motor vehicles/leased vehicles/ relief vehicles 5 years Office equipment 4-7 years Computer equipment 3 years Fleet tracker 3 years

209

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies 1.4 Property, plant and equipment (continued) The residual values and useful life of each asset are reviewed at the end of each reporting date. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.

Reviewing the residual values and useful life of an asset on an annual basis does not require the entity to amend the previous estimate unless expectations differ from the previous estimate.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset.

Derecognition Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use or disposal of the asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any and the carrying amount of the item.

Operating lease vehicles returned by user departments are derecognised from property, plant and equipment and transferred at their carrying amount when they cease to be rented and become held for sale.

1. 5 Intangible assets An asset is identifiable as an intangible asset when it:

• is an identifiable asset without physical substance. An intangible asset is recognised when:

• it is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the entity: and

• the cost or fair value of the asset can be measured reliably.

An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows or service potential. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life,

The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date, Reassessing the useful life of an intangible asset with a finite useful life after il was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested tor impairment and the remaining carrying amount is amortised over its useful life.

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:

Item Useful life Computer software licenses indefinite

1.6 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity.

The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition A derivative is a financial instrument or other contract with all three of the following characteristics

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Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies 1.6 Financial instruments (continued)

• Its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable, provided in the case of a non-financial variable that the variable is not specific to a party to the contract (sometimes called the underlying ).

• It requires no initial net investment or an initial net investment that is smaller than would be required for other types of • contracts that would be expected to have a similar response to changes in market factors. • It is settled at a future date

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm’s length transaction.

A financial asset is: • cash; • a residual interest of another entity; or • a contractual right to:

o receive cash or another financial asset from another entity; or o exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable

to the entity.

A financial liability is any liability that is a contractual obligation to: • deliver cash or another financial asset to another entity; or • exchange financial assets or financial liabilities under conditions that are potentially unfavourable to the entity.

Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial liabilities that have fixed or determinable payments, excluding those instruments that

• the entity designates at fair value at initial recognition; or • are held for trading.

Financial instruments at fair value comprise financial assets or financial liabilities that are • derivatives; • combined instruments thatare designated at fair value; • instruments held fortrading. A financial instrument is held for trading if:

o it is acquired or incurred principally for the purpose of setting or repurchasing it in the near-term; or o on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which

there is evidence of a recent actual pattern of short term profit-taking; o non-derivative financial assets or financial liabilities with fixed or determinable payments that are designated at fair

value at initial recognition; and o financial instruments that do not meet the definition of financial instruments at amortised cost or financial instruments

at cost,

1.7 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Finance leases - lessor

The entity recognises finance lease receivables as assets on the statement of financial position. Such assets are presented as a receivable at an amount equal to the net investment in the lease.

Finance revenue is recognised based on a pattern reflecting a constant periodic rate of return on the entity's net investment in the finance lease.

The finance lease receivable is derecognised when the vehicles either reach pre-determined kilometres or their economic life/ lease period, whichever occurs earlier.

211

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies

1.7 Leases (continued)

Operating leases - lessor Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease revenue. The aggregate cost of incentives is recognised as a reduction of rental revenue over the lease term on a straight-line basis. The aggregate benefit of incentives is recognised as a reduction of rental expense over the lease term on a straight-line basis. Income for leases is disclosed under revenue in statement of financial performance. Operating teases - lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability. 1.8 Inventories

Initial measurement Inventories are initially measured at cost except where inventories are acquired through a non-exchange transaction, then their costs are their fair value as at the date of acquisition. Vehicles returned by user departments to the entity at the end of the lease arrangement are transferred from property, plant and equipment and recognised separately as inventory held for sale. Inventory held for sale are recognised in inventory at carrying value when they cease to be rented and become held for sale. Subsequent measurement Subsequently inventories are measured at the lower of carrying value and net realisable value. Vehicles that are being made ready for leasing to departments are classified as inventory. This category of Inventory is not subsequently measured at lower of cost or net realisable value, this is because the economic benefits will be fully realized once they are leased. Net realisable value is the estimated selling price in the ordinary course of operations less the estimated costs of completion and the estimated costs necessary 1o make the sale, exchange or distribution. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Each inventory item is measured at its actual costs Inventory held for sale are subsequently measured at the lower of carrying value or fair values as determined using motor vehicle trade books. Derecognition Vehicles (new) inventory are derecognized when they are issued to user department or written off. Vehicles issued to user department are recognised as finance leases and derecognised as inventory at their carrying amounts. Amount of any inventory write off is recognised as deficit in the Statement of Financial Performance 1.9 Impairment of cash-generating assets Cash-generating assets are those assets held by the entity with the primary objective of generating a commercial return, When an asset is deployed in a manner consistent with that adopted by a profit-orientated entity, it generates a commercial return Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset s future economic benefits or service potential through depredation (amortisation)

212

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies 1.9 Impairment of cash-generating assets (continued) Carrying amount is the amount at which an asset is recognized in the statement of financial position after deducting any accumulated depreciation and accumulated impairment losses thereon. A cash-generating unit is the smallest identifiable group of assets held with the primary objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.

Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax expense.

Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal. Recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. Useful life is either: (a) the period of time over which an asset is expected to be used by the entity; or (b) the number of production or similar units expected to be obtained from the asset by the entity. Identification When the carrying amount of an asset exceeds its recoverable amount, the asset is impaired and is written down to its recoverable amount. The reversal of the loss is recognised as part of surplus/deficit in the statement of financial performance.

The entity assesses at each reporting date whether there is any indication that assets may be impaired. If any such indication exists when annual impairment testing for assets is required, the entity estimates the assets recoverable amount

1.10 Contributed capital

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Consideration received for the establishment of the entity shall be recognised directly in equity as capital contributions.

1.11 Employee benefits

Employee benefits are all forms of consideration given by an entity in exchange for services rendered by employees

Termination benefits are employee benefits payable as a result of either: • an entity's decision to terminate an employee s employment before the normal retirement dale; or • an employee’s decision to accept voluntary redundancy in exchange for those benefits.

An entity has a defined benefit plan which is then accounted for as contribution plan (see Note 24).

1.12 Provisions and contingencies

Provisions are recognised when; • the entity has a present obligation as a result of a past event; • it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation;

and • a reliable estimate can be made of the obligation.

The amount of a provision i$ the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate, Provisions ape-reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the obligation,

A provision is used only for expenditures for which the provision was originally recognised. -

213

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies 1.12 Provisions and contingencies (continued) Provisions are not recognised for future operating deficits. No obligation arises as a consequence of the sale or transfer of an operation until the entity is committed to the sale or transfer, that is, there is a binding arrangement, After their initial recognition contingent liabilities recognised in entity combinations that are recognised separately are subsequently measured at the higher of:

• the amount that would be recognised as a provision; and • the amount initially recognised less cumulative amortisation.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 26. 1.13 Revenue from exchange transactions Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners. Revenue is recognised as kilometers travelled by user departments. An exchange transaction is one in which the entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange. 1.13 Revenue from exchange transactions (continued) Measurement Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates. Revenue is billed at estimated kilometers travelled throughout the year. The entity bills actual kilometers when the vehicle has been returned back by the user department. Fuel revenue is billed as the actual cost incurred by user departments. Revenue for managed maintenance vehicles is billed at a fixed rate. Expenditure relating to the running of these vehicles is recovered in full from the user department. Rendering of services When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied

• the amount of revenue can be measured reliably; • it is probable that the economic benefits or service potential associated with the transaction will flow to the entity; • the stage of completion of the transaction at the reporting date can be measured reliably; and • the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable. Interest Revenue arising from the use by others of entity assets yielding interest or similar distributions is recognised when:

• It is probable that the economic benefits or service potential associated with the transaction will flow to the entity, and • The amount of the revenue can be measured reliably.

Interest is recognised, in surplus or deficit, using the effective interest rate method.

214

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies 1.14 Investment income Investment income is recognised on a time-proportion basis using the effective interest method 1.15 Comparative figures

Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current year. Fruitless expenditure means expenditure which was made In vain and would have been avoided had reasonable care been exercised.

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.16 Irregular expenditure

Irregular expenditure as defined in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation. Including -

(a) this Act; or (b) any provincial legislation providing for procurement procedures in that provincial government.

National Treasury practice note no. 4 of 2008/2009 which was issued in terms of sections 76(1) to 76(4) of the PFMA requires the following (effective from 1 April 2008):

Irregular expenditure that was incurred and identified during the current financial and which was condoned before year end and/or before finalisation of the financial statements must also be recorded appropriately in the irregular expenditure register. In such an instance, no further action is also required with the exception of updating the note to the financial statements,

Irregular expenditure that was incurred and identified during the current financial year and for which condonement is being awaited at year end must be recorded in the irregular expenditure register. No further action is required with the exception of updating the note to the financial statements.

Where irregular expenditure was incurred in the previous financial year and is only condoned in the following financial year, the register and the disclosure note to the financial statements must be updated with the amount condoned.

Irregular expenditure that was incurred and identified during the current financial year and which was not condoned by the National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accounting officer or accounting authority may write off the amount as debt impairment and disclose such in the relevant note to the financial statements. The irregular expenditure register must also be updated accordingly. If the irregular expenditure has not been condoned and no person is liable in law, the expenditure related thereto must remain against the relevant programme/expenditure item, be disclosed as such in the note to the financial statements and updated accordingly in the irregular expenditure register.

1.17 Related parties

The entity operates in an economic sector currently dominated by entities directly or indirectly owned by the South African Government. As a consequence of the constitutional independence of the three spheres of government in South Africa, only entities within the provincial sphere of government are considered to be related parties,

Management are those persons responsible for planning, directing and controlling the activities of the entity, including those charged with the governance of the entity in accordance with legislation, in instances where they are required to perform such functions.

Only transactions with related parties not at arm's length or not in the ordinary course of business are disclosed.

1.18 Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand and demand deposits, and other short-term highly liquid investments trial are readily convertible 1o a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

215

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Accounting Policies 1.20 Commitments

Items are classified as commitments when an entity has committed itself to future transactions that will formally, result in the outflow of cash.

Commitments are disclosed for goods and services and capital assets when orders are issued but delivery has not occurred Further disclosure Is done for vehicles that have reached the Kilometers/ year threshold that will be replaced within the next financial year.

216

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Notes to the Annual Financial Statements 2. New standards and interpretations

2.1 Standards and interpretations issued and effective but not relevant

Standard/ Interpretation: Effective date: Years beginning on or after

Expected impact:

GRAP 18; Segment reporting 01 April 2016 No expected impact:

1.3 Standards and interpretations issued but not yet effective

Standard /Interpretation: Effective Date: Years beginning on or after

Expected impact

GRAP 20 : Related party disclosure No effective date No expected impact GRAP 32 : Service Concession Arrangements-Grant No effective date No expected impact GRAP 38: Disclosure of Interest I Other Entities No effective date No expected impact GRAP 108: Statutory Receivables No effective date No expected impact GRAP 109: Accounting by principals and Agents No effective date No expected impact

3. Finance lease receivables Gross investment in the lease due - within one year 219,279.933 285,125,617 - in second to fifth year inclusive 435,780,942 366,005,507 655,060,875 651,131,124

less: Unearned finance revenue (80,287,858) (84,063,774) 574,773,017 567,067,350 Present value of minimum lease payments due

- within one year 178,130,956 227,140.737 - in second to fifth year inclusive 396,642,061 339,926,613 574,773,017 567,067,350 Non-current assets 396,642,061 339,926,613 Current assets 178,130,956 227.140,737 574,773,017 567,067,350

The entity entered into material finance leasing arrangements with provincial departments. The agreement between the entity and the user departments requires the entity to maintain the vehicles during the lease period and to replace these as directed by the rate card and the service level agreement when they reach predetermined kilometres or the period.

Unguaranteed residual values used in the calculation of the gross investment in lease are based on management's estimation, vehicle condition and expected use of the leased vehicles,

These residual values are calculated using a rate determined with reference to the potential decline in the value of fleet vehicles over the lease period as per trade value data. As the entity does not trade in the open market, the outcome as per the trade value data is reduced further by taking into account our operational environment. The residual values are aligned to those used for pricing as per approved rate card which are based on regression analysis of vehicle's market value, age and kilometres.

217

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Notes to the Annual Financial Statements

4. Inventories

New motor vehicles Inventories held for sale

116,714,374 88,081,071

Reconciliation of new motor vehicles - 31 March 2018: Opening Balance 62,147.735 12,283,092 Additions 262,366,290 191,719,441 Transfer to lease receivables (219,465.441) (141.854,798) 105,048,584 62,147,735

The inventory balance for the year ended relates to 361 (PY:150) motor vehicles acquired by the Entity not yet distributed to the provincial departments which were slid stationed at the Entity's premises as at 31 March 2018.

Reconciliation of inventories held for sale - 31 March 2018 Opening balance 25,933,336 43,256,466 Transfer from lease receivable 37,130,914 28,471.284 Write offs (1.324,743) (499,564) Inventory write down - (126,354) Disposal (50,073,717) (45,168,496) 11,665,790 25,933,336

The inventory held for sale relates to vehicles which have reached the end of the leasing period in terms of the lease agreement between the user department and the trading entity and have been returned to the entity for disposal.

5. Receivables from exchange transactions

Trade debtors - Provincial Departments 107,469,860 133,308,135 Accrued Revenue 2.849,995 2,971,186 Mozi Auctioneers - 9,378,330 Staff debtors 563,751 237,492 Department of Education - other receivable - 31,005 Department of Home Affairs 1,046,787 847,440 111,930,393 146,773,588

Receivables from exchange transactions pledged as security

These balances are not secured by any collateral. Credit quality of trade and other receivables Trade

receivables

Counterparties without external credit rating Trade Receivables 107,469.860 133,308,135 Accrued Revenue 2.849,995 2.971.186 Department of Education - 31,005 Mozi Auctioneers - 9,378,330 Staff Debtors 563,751 237,492 Department of home affairs

1,046,787 847,440

111,930,393 146,773,588

105.048,584 62,147,735 11,665,790 25,933,336

218

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Notes to the Annual Financial Statements 5. Receivables from exchange transactions {continued) Trade and other receivables Trade and other receivables comprise provincial departments and are considered to be fully recoverable. As a result these receivables have not been impaired or encumbered in any way.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above.

Trade debtors - Provincial departments comprises the following Provincial Treasury 64,640 63,021 Office of the Premier 831,259 703,620 Department of Human Settlement 2.081,743 1,403,052 Department of Co-orporative Governance & Traditional Affairs 301,462 191,720 Department of Sport, Arts and Culture 3,217,092 2.755,621 Department of Economic Affairs and Tourism 106,962 223,837 Department of Rural Development and Agrarian Reform 8,655,203 23,213,713 Department of Public Works 4,066,370 5,123,620 Department of Education 7,562,579 9,993,816 Department of Transport 637,515 4,228,361 Department of Social Development 2,025,836 8,906.815 Department of Health 44,904,416 37.283.844 Emergency Medical Rescue Services 33,014,783 39,217,095 107,469,860 133,308,135

6 Cash and cash equivalents

Cash and cash equivalents consist of;

Bank balances 183,125,530 98,547,714 Call account 114,875,183 410.588,216 298,000,713 509,135,930

Cash and cash equivalents pledged as security

No cash and cash equivalents have been pledged as security or are encumbered in any way.

Restrictions on cash and cash equivalents There are no restrictions on bank balances 298.000,713 509,135,930

219

Eastern Cape Government Fleet Management Services Annual Financial Statements for the year ended 31 March 2018 Notes to the Annual Financial Statements 7. Property, plant and equipment

2018 2017 Cost Accumulated Carrying value Cost Accumulated Carrying value

depreciation depreciation and and accumulated accumulated impairment impairment

Furniture and fixtures 2,239,581 (785,539) 1,454.042 1,360,724 (547,319) 813.405 Motor vehicles 2,224,290 (1,002,873) 1,221.417 1,811,676 (873,915) 937,761 Office equipment 332,746 (202,226) 130,520 290,956 (144,050) 146,906 Computer equipment 1,618.64? (1,240,647) 378,000 1.556,169 (994.D35) 562,134 Relief vehicles 13,278,643 (1,907,430) 11,371,213 8,993,774 (239,586) 8,754.188 Leased Motor Vehicles - Operating lease

137.841,281 (24,985,143) 112,856,138 87,065,550 (24,243,059) 62,822,491

Fleet Tracker 9,550,812 (8,064,497) 1,486,315 9,550,812 (4,880.893) 4,669.919 Total 167,086,000 (38,188,355) 128.897,645 110,629,661 (31,922,857) 78.706,804

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8. Intangible assets

Cost Accumulated

Amortization and accumulated

impairment

Carrying value Cost Accumulated Amortization and

accumulated impairment

Carrying value

Computer software 4,590 - 4,590 4,590 - 4,590

Reconciliation of intangible assets - March 2018

Opening Balance Total Computer software 4,590 4.590 Reconciliation of intangible assets - March 2017 Opening Balance Total Computer software 4,590 4.590 9. Payables from exchange transactions Trade payables 45,207,675 66,949,371 Auction Proceeds Payable to User Departments 8,222,864 - Accrued leave pay 1,254,194 795,318 Accrued bonus 447.875 442,624 Other payables 1,755,641 3,469,842 Accrued expense 1,021,597 7,211,650

57,909,846 78,868,805

Trade Payables comprise of the following: Standard Bank 31,887,708 57.411.037 General Motors - Ford SA 2,410,723 6,808,100 Isuzu Truck SA 3,320,891 Hyundai 3.141,518 Department of Safety-debtor with credit balance 23,782 29,278 Other trade payables 4,423,050 2,700,956

45,207,672 66,949,371

The bonus accrual relates to the portion of the annual service bonus payable which would have accrued to employees as at 31 March 2018.

The leave pay accrual relates to the liability which would arise when the employee exit the employment of the Trading Entity and the related charge will need to be paid out at reporting date, due to past event of the rendering services as an employee of the Entity and based on the monthly salary of each employee. Other payables Other payables - Accrued revenue 1,265,222 3.469,841 Department of Transport 490,419 - 1,755,641 3,469,841

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10. Provisions Reconciliation of provisions - March 2018 Opening

Balance Additions Utilised during the year

Reversed during the year Total

Provision of insurance claims 12,870.140 11,564.124 - (12,870,140) 11,564,124 Provision for performance bonus 545,690 552.156 (35.145) (510,545) 552,156 Provision for maintenance of vehicles 13,781,440 13.444,917 - (13,781,440) 13.444,917 Provision for capped leave 2.025,327 34,448 (215,216) - 1,844,559 29,222,597 25,595,645 (250,361) (27,162,125) 27,405.756 Reconciliation of provisions • March 2017 Opening

Balance Additions Utilised during the year

Reversed during the year Total

Provision of insurance claims 14,398.275 12,870,140 - (14,398,275) 12.870,140 Provision for performance bonus 471,813 545,690 (141.881) (329,932) 545,690 Provision for maintenance of vehicles 10.641,550 13.781.440 - (10.641,550) 13,781,440 Provision for capped leave 1,951,350 73,977 - - 2,025,327 27,462,988 27,271,247 (141,881) (25,369,757) 29,222,597

The provision for the maintenance of motor vehicles relates to the estimated costs associated with the maintenance of vehicles based on usage of vehicles during the time which has elapsed from the previous service interval to financial year end,

The provision for insurance claims relates to claims incurred prior to year end that have not yet been settled and have be actuarially valued.

The provision for capped leave relates to leave accumulated by employees before 1st July 2000. the leave was then set aside and will only be payable to the employees at retirement

11.Revenue Rendering of services 420.434.957 385,251,985 The amount included in revenue arising from exchanges of goods or services are as follows: Rendering of services 420,434.957 385,251,985 Revenue from the rendering of services comprises the following: Full maintenance lease - fixed charge 135.199,975 118,610.969 Full maintenance -utilisation charge 285.234,982 264,730.494 420,434,957 383,341,463 12.Interest earned Interest earned comprises the following: Interest on outstanding debtors 5,714,781 6,236,117 Interest portion of finance lease receivables 50,595,669 84.940,868 Interest earned on current and call account 33,297.118 23.657,500 89.607,568 114,834,485 13. Other income Other income 10.735.126 4,182,980

.

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14. Investment income Interest revenue Stanlib Classic Investment - 7,174,726 15. Employee related cost Basic 27,532,217 26,498,313 Bonus 1,074,251 952,414 Medical aid - company contributions 769,461 761,188 Bargaining council levies 6,314 6.194 Leave pay provision charge 458.876 215,891 Performance bonus 41,611 215.756 Bursaries - 19,504 Pension contributions 1.910,222 1,806.327 Fuel claim and subsistence travel allowances 146.652 176,739 Overtime payments - 15,441 Long-service awards 29,657 18,582 Car allowance 401,448 462.459 Housing benefits and allowances 555,656 393,896 Non-pensionable cash allowance 5,463,700 5,510,672 Resettlement allowance - 20,553 Subsidy insurance - 13,564 Leave gratuity 289.465 - 38.679,530 37,087,495 16. Fleet running costs Fleet running costs comprises the following: Motor vehicle - fuel and oil 171,991,471 149,147.689 Motor vehicle - repairs & maintenance 98,360,073 83,249,642 Motor vehicle - other vehicle expenses 32.732,137 37,429,471 303,083,681 269,826,802 17. Inventory write down Impairments Inventory held for sale 1,075,947 126,354 This relates to inventory held for sale that was reassessed value at year end.

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18. Administration costs Accommodation and travel 789,387 674,258 Advertising 333,353 379,400 Audit committee fees 277,975 212,351 Auditors fees 2,592,487 2,953,692 Bank charges 19,959 503.727 Catering 167.221 143.937 Cleaning 573,329 354,894 Commission paid 4,013.070 3,152,280 Computer expenses - 2,695 Consulting and professional fees 1,973,079 1,699,281 Consumables 99,559 112,561 Drivers tags 148,270 295,437 Electricity and water 1,168.694 1,300,159 Entertainment 11,400 10.196 Fuel and oil 437,020 397,356 Hiring of venues and equipment 167.847 158,642 Licensing fees 34,734 28,326 Postage and courier 2,832 1,870 Printing and stationery 149,961 316,741 Qualification verification 7,924 16.492 Rental of office equipment 576,967 597,199 Repairs and maintenance - motor vehicles 248.373 21,593 Risk committee fe18.es - 209,569 Security 3,328,115 2,914,026 Staff training and development 44,790 140,247 Subscriptions and membership fees 193,469 154,664 Telephone, fax and data 591,064 812,679 Third party claims - accidents FML 614,076 563,239 Tracker expenses 1,017,450 331,968 Tracker rentals 15,095,623 10,143,623 Recruitment expenses 63.029 7,773 Wellness 70.292 69,022 34.811,349 28,679,897 19. Fair value adjustments Investments • Stanlib Classic Investment - (5,462.648) 20. Profit on disposal of inventory Proceeds received 52.350.934 49,315,491 Carrying amount of vehicles sold (50,074,357) (45.168,497) 2,276,577 4,146,994 21. Auditors' fees Fees 2.592.487 2,953.692

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22. Cash generated from/ (used in) operations

Surplus 185,894,740 246,868,827 Adjustments for: Depreciation and amortisation 21,654,415 13,225,603 Loss of assets due to theft 22,558 5,247 Profit on sale of inventory (2,276,577) (4,146,994) Derecognition of assets (60,462,024) (87,916,349) Fair value adjustments - 5.462,648 Inventory write down 1,075,947 126.354 Debt written off - 14,603 Movements in provisions (1,816,841) 2,231,422 Changes in working capital: Inventories (172,634,994) (108,836,835) Receivables from exchange transactions (34,843,195) 26,029,732 Payables from exchange transaction (20,928,500) 38,440,134 (14,628,081) 131,507,392 23 Financial instruments disclosure Categories of financial instruments March 2018 Financial assets At amortised

cost Total

Receivables from exchange transactions 111,930,393 111,930,393 Cash and cash equivalents 298,000,713 298,000,713 Finance lease receivables 574,773,017 574,773,017 984,704,123 984,704,123 Financial liabilities At amortised

cost Total

Accrued expenses 1,021,597 1,021,597 Payables from exchange transactions 45,207,672 45,207.672 Accrued leave pay 1,254,194 1.254,194 Accrued bonus 447,875 447,875 Other payables 1,755,641 1,755.641 Non fleet vehicle auctioned 8,222,864 8,222,864 57,909,843 57,909,843 March 2017 Financial Assets At amortised

cost Total

Trade and other receivables from exchange transactions 146,773,588 146.773.588 Cash and cash equivalents 509,135,930 509,135,930 Finance lease receivables 567.067,350 567,067,350 1.222,976,868 1.222,976,868

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23.Financial instruments disclosure (continued) At amortised

cost Total

Financial liabilities Accrued expenses 7,211,650 7,211,650 Trade and other payables from exchange transactions 66,949,371 66,949,371 Accrued leave pay 795.318 795,318 Accrued bonus 442,624 442,624 Other payables 3,469,842 3,469,842 78,868,605 78,868,605

24. Employee benefit obligations defined benefit plan

It is the policy of the entity to provide retirement benefits to all its permanent employees in respect of pension funds. All permanent employees of the entity are members of the Government Employees Pension Fund (GEPF). to which the Entity contributes, the fund is administered and underwritten by an external party through National Treasury, and the entity bears no further obligation.

The entity is unable to provide quantitative amounts relating to its portion of assets and liabilities of the defined benefit plan. This is because the plan is administered nationally for all slate institutions. Information specifically relating to the entity is not readily available

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25 Commitments

Operating leases - as lessee

Minimum lease payments due

* within one year – 220,611 318,912 in second to fifth year inclusive 131,116 196,884 351,727 515,796 Operating lease payments represent rentals payable by the entity for printing and photocopy machines. Leases are negotiated for an average of 36 months. Konica Minolta and Bytes Document Solution agreement has an option of 24 months extension with an additional of 25% of current rental. Escalation clause is 0% in all of our contracts. No contingent rent is payable. Authorized capital expenditure Contracted for but not yet commenced Motor vehicles 109,556.362 135,016,463 Contracted for but not yet completed Motor vehicles 5,859,736 50.615,790 Not yet contracted for Motor vehicles 220,068,131 221,912,125 Goods and services Contracted for but not yet commenced Goods and services 192,974 258.427 Contracted for but not yet completed Goods and services 1,185,228 1,225,191

26 Contingencies

Contingent liabilities

The Department of Transport has an ongoing dispute with Fleet Africa Eastern Cape (Ply) Ltd amounting to R37,804.000 which related to penalties for the Trading Entity's alleged failure to meet the agreed order of 2.888 units of vehicles per paragraph 8.1.2.1 of the transfer extension agreement dated 18 February 2012. The matter was referred for arbitration in terms of the agreement for the decision whether or not Fleet Africa is entitled to claim the said amount or any lesser amount. ECGFMS was subsequently established and assumed the provision of fleet services. Although legal documents are in the name of Department of Transport, it is anticipated that the entity will assume liability if the case is lost. In our opinion, prospects of success in resisting the claim by Fleet Africa Eastern Cape (Pty) Ltd are good.

Third Party Claims - Government owned vehicles are not insured by insurance companies. The State carries its own accident risk and accepts liability for any expenditure arising from claims instituted by third parties that would ordinarily be payable by an insurer, including damages to State owned vehicles. As at year end the Entity has a possible obligation/ contingent arising from third party claims amounting to R961 407.

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27. Related partie

Relationships Controlling entity Members of key management

Eastern Cape Department of Transport Mr K Gazt (Head of Entity) Mr F Narkedien (Senior Manager: Fleet Maintenance and SMME Development) Mr P Yeko (Senior Manager: Finance)- Resigned 31 March 2018 Mr M Mboya (Legal and Assurance) Mr B Chirrmuta (Senior Manager: Fleet Development) Ms N Nyalela (Senior Manager: Internal Audit)- Resigned 30 April 2018.

Service provided by Department of Transport The Trading Entity enjoys the benefit of free services being delivered by the Department of Transport in respect of its Human Resources. The costs relating to these functions cannot be reliably measured and is therefore not disclosed.

Related party balances Amounts included in Trade receivables from exchange transactions Eastern Cape Department of Transport 637.515 4.228,361 Amounts included in Trade payables Eastern Cape Department of Transport (490 419) -

-

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2018 2017 R R 27. Related parties (continued) Related party transactions Salaries paid to employees by related party on behalf of the trading entity for the Human Resources function - reimbursement Eastern Cape Department of Transport 38,679.530 37,087,495 Revenue received from related parties in terms of finance lease agreement

Eastern Cape Department of Transport 28.053,723 29,874.417 - Compensation of key members of management - 2018 K Gazi F. Narkedien P Yeko B Chirimuta M Mboya N Nyalela Basic salary 837,568 612,880 781,843 608,412 856,246 704.462 Bargaining council 82 82 82 75 82 82 Medical aid - 16,560 32,964 - 8.960 - Pension fund 108,684 79.674 101,639 - 111,312 - Motor car allowance 120,000 30,000 72.000 - 93,048 - Non pensionable cash allowance 130,074 21,279 128,472 260,748 82.289 301,912 Service bonus - 51,073 - • 71,354 - Housing allowance - 210.000 - - - - Long Service Award - 9,886 - - - - 1,196,608 1,031,434 1,117,000 869,235 1,223,291 1,006,456 Compensation of key members of management - 2017 K Gazi F. Narkedien P Yeko B Chirimuta M Mboya N Nyalela Basic salary 798,744 586,514 748,210 635,169 793,295 635,169 Bargaining council 74 74 74 74 74 74 Medical aid - 18.496 32,964 - 8,960 - Pension fund 102.368 74,310 97,267 - 103,128 - Motor car allowance 120,000 57,500 72,000 - 93,048 - Non pensionable cash allowance 115,110 138,730 118.430 272,215 68,739 272,215 Service bonus - 48,411 - - 66,499 - Housing allowance - 53,096 - - - - 1,136,296 977,131 1,068,945 907,458 1,133,743 907,458 28. Prior period errors The following prior period errors were identified during the year: Error 1: Finance lease accounting The Entity enters into vehicle lease contracts with various Departments As per paragraph 45 of GRAP 13 lessors shall recognize lease payments receivable under a finance lease as assets in their statement of financial position. They shall present such assets as a receivable at an amount equal 1o the net investment in the lease, being the gross investment in the lease discounted at the interest rate implicit) upon initial recognition. The entity has previously incorrectly accounted for the lease receivable at amounts equal to the cost of the leased vehicles or, if lower, the present value of the minimum lease payments receivable determined at the inception of the lease. As a consequence the Finance lease receivable has been understated, Furthermore, in terms of subsequent measurement, the receivable should be have been adjusted upon the change in the rental amount and interest rate as per new rate card that became into effect as at 1 April 2016. The entity incorrectly accounted for certain vehicles using incorrect categories as per the rate card. The correction of the errors result in adjustments as follows:

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28. Prior period errors (continued)

Error 2: Other Income The entity has licensed the motor vehicles for Department of Home Affairs in the prior years and no bill recovery has been made from the department.

Error 3: Expenditure The entity overstated accrued expenses in prior year. The entity incurred interest on vehicles invoices in the 2016/17 financial year. The amount has been subsequently written off by the supplier.

Error 4 : Receivable from exchange transactions The Entity has misallocated the payments received from Emergency Medical Services in the 2015/16 financial year to Department of Health

The correction of the errors result in adjustment as follows;

Statement of financial position - Decrease in Increase in Finance Lease Receivable - 154.326.263 Department of Home Affairs - 847,440 Opening accumulated surplus or Deficit 30,459 114,385,932 Increase in receivable (department of Health - 37,261,976 Decrease in receivable (EMS) - (37,261,976) Statement of Financial Performance Decrease in interest revenue - 65,632,223 Increase in gain/Loss in Finance Lease Asset - 106,071.631 Other income - 206,911 Increase in Rental - 141,451 Cash flow statement Cash Flow from operating activities - (65,490,773) Decrease in payments - 575.412 - (64,915,361) Cash flow from financing activities Increase in finance lease receipts 64, 915,361

-

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29 Risk management

Financial risk management The entity’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), and liquidity risk.

Liquidity risk The entity's risk to liquidity is a result of the funds available to cover future commitments. The entity manages liquidity risk through an ongoing review of future commitments.

Current assets Finance lease receivables 178.130,956 227.140,737 Inventories 116,714,374 - Receivables from exchange transactions 111.930.393 146,773,588 Cash and cash equivalents 298.000,713 509,135,930 704,776,436 971,131,326 Current Liabilities Payables from exchange transactions 57,909,843 78,868.805

Market risk

Interest rate risk The entity's interest rate risk arises from finance leases, short-term deposits and investment issued at variable rates expose the entity to cash flow interest rate risk.

Price risk

The entity is not exposed to significant price risk mitigation factors

Liquidity risk has no significant risk exposure to be mitigated.

30 Fruitless and wasteful expenditure

Opening balance 679,775 328,734 Interest paid - 336,160 Travel and accommodation 133 6,601 Staff training - 8.280 Leasing Charges expense 877 - Branding of vehicles 183,451 - Fruitless and wasteful expenditure condoned (Travel & Accommodation) (1.273) - Fruitless and wasteful expenditure to be recovered (Travel & Accommodation) (2,428) - Fruitless and wasteful expenditure condoned (Interest charged) (336,160) - Travel expense incorrectly classified as fruitless (1,980) - Opening Balance condoned (Transportation costs paid to buyers due to erroneous de- registration) (46,341) -

Opening Balance condoned (Fuel cards for government vehicles that were used fraudulently. (282,393) -

193,661 679,775 Fuel fraud case CAS81/11/2014 relating to a government driver and fuel card holder has colluded with petrol attendant to fuel cash cars transactions. The petrol attendant was arrested pending investigation. The expenditure was condoned during 2017/18 financial year.

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30. Fruitless and wasteful expenditure (continued) Interest paid - An amount of R317 689 relates to interest that was charged by Toyota on overdue account on invoices that were relating to

2013/14.The amount was condoned. - R18 471 relates to Toyota invoices that were not paid within 30 days during the year. The amount was condoned.

Travel and accommodation - R1 980 - A scheduled flight which was changed to an earlier flight. The flight was changed due to a call received by an official to

attend Bid Award Committee. This was a compulsory sitting, - The amount has been removed as it was incorrectly classified as fruitless and wasteful expenditure instead of treating it as normal expenditure,

- R1 140 - The flight cancellation fee for an audit committee member in relation to a meeting that was cancelled. Investigation finalized, expenditure condoned

- R471 and R1957 - Two officials missed a flight while attending training. Investigation concluded, a cost will be recovered from the officials.

- R1 053 - An audit committee interview candidate that cancelled the interview which then led to flight cancellation. - R133.38 - Service cancellation fee charged for Travel & Accommodation of Mr Abdullah RCM chairperson for cancelled Risk

Management Meeting. The expenditure has been condoned in the same financial year.

Staff training -R8 280 Two official did not attend training that was confirmed due to reasons communicated to their respective supervisors. The training fees was based on a confirmed number of attendees - The matter is under investigation.

Leasing charges - R876.98 A payment was made in respect of utilization of a photocopy machine with an expired contract-Disciplinary action to be taken by a supervisor

Branding of vehicles - R60 751 Five vehicles were bought and branded for EMS and discovered after branding that this is unwanted type , now are to be rebranded for other departments

Commission and transportation costs relate to auctioned vehicles that were incorrectly de-registered on eNatis, as a result they were classified as code 2, Due to that classification buyers refused to take them as code 2 and they returned vehicles back and incurred costs which the entity had to re-imburse. These vehicles were sold at the auction and the auctioneer claimed commission for the sale. The expenditure was condoned during 2017/18 financial year.

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31. Irregular expenditure Opening balance - 555,016 Add: Irregular Expenditure - current year 1.303,753 - Less: Irregular reversed - (555,016) 1,303,753 - Details of irregular expenditure-current year Contract for Afrirent came to an end on 31 January 2018 Provincial Treasury granted approval for Department of Transport to deviate from normal procurement processes for March and April 2018. Expenditure for month of Feb 2018 was incurred without prior approval by Provincial Treasury.

Still under investigation

1,303,753

32. Change in estimate Property, plant and equipment

In the 2017 financial year, the entity revised the estimated useful life for vehicles, The entity has decided to change the estimated useful life for Operating Lease Vehicles from 7 years to 5 years and implement residual values for vehicles based on the vehicle category as per the rate card, as it will result in a more appropriate presentation of events for the entity.-

A change in the estimated useful life of Operating Lease Vehicles has resulted in the following change in depreciation for the year.

Depreciation: Operating Lease Vehicles According to initial estimated useful life - (16,634,267) According to the re-estimated useful life - 9,231,497 - (7,402,770)

The effect in future periods is not disclosed because estimating it is impracticable, The vehicles under operating lease are expected to be replaced immediately after reaching either estimated kilometers or years as per approved rate card and therefore the nature of the operating lease account is temporary.

Motor vehicles - own

In 2017 financial year, the entity revised the estimated useful life for vehicles. The entity has decided to change the estimated useful life for motor vehicles from 4 years to 5 years and implement residual values for vehicles based on the vehicle category as per the rate card, to result for a more appropriate presentation of events for the entity

A change in the estimated useful life of motor vehicles has resulted in the following change in depreciation for the year: Depreciation:

Motor Vehicles

According to initial estimated useful life - (809,154)

According to the re-estimated useful life - 332,773

- (476,381)

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33. Budget variances

Material differences between budget and actual amounts

Rendering of services - The utilization of vehicles by the Departments has increased which resulted in increase in our revenue

Interest received - Budget for interest was based on actual interest received on leases in the prior year, in the 2nd quarter of the current year we have made an adjustment on the calculation of leases which resulted in decrease on the actual interest recognised.

Personnel costs - It was anticipated that approved vacancies that are in the interim structure will be fully filled by now and we also have some contracts that ended and took some time to be filled and some were still vacant as at end of the financial year. Budget also includes amounts for performance bonus which was not fully utilised.

Fleet running costs - Budget for fuel and overhauls was based on prior year spending .however expenditure for fuel has decreased and no expenditure has been incurred for overhauls. The fuel consumption of motor vehicles has decreased due to less kilometers travelled compare to prior year.

Office building maintenance - Budget was based on major repairs and office refurbishment to be done on the building lt was anticipated that the projects will be done in the current year .however there were delayed that took place from Department of Public Works since we are dependent to them for these renovations, The expenditure incurred is mainly due to emergencies that took place in the 3 garages

Administration costs - Variance is resulted from the following items; 1. Third Party Claims -The basis of budgeting for this item is based on prior year payments made to third parties and if also depends on number of accidents. 2. Office Building Rental - Budget was based on the anticipation that by the beginning of this financial year, we would be occupying the new premises, however this is not the case. 3. Rental Relief Vehicles - The entity has budget to rent vehicles for user department should their vehicles break down and there were no vehicles to be given to the department. No expenditure has been incurred to date as we have not run out of relief vehicles to be given to departments.4 Software licence - The entity has planned to procure a new accounting system software but as at end of the financial year the SCM processes were still in progress.5 ICT Infrastructure - The entity has planned to procure a new IT Infrastructure through SITA but the process has delayed.

# - The following items were not budgeted for. - Other Income- Depreciation and Impairment- Movement in provision- Gain on sale of inventory held for sale- Derecognition of asset

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TABLE OF CONTENTS...Ms Weziwe Tikana MEC for Transport, Safety and Liaison SUBMISSION OF THE ANNUAL...

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