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NATIONAL TREASURY BRIEFING TO THE STANDING COMMITTEE ON FINANCE: - RESPONSES TO THE BRR REPORT - 2015/16 QUARTER 4 REPORT Presenter: Lungisa Fuzile | Director-General, National Treasury | 17 May 2016 Mandate of the Treasury Support economic growth and development, good governance, social progress and rising living standards through the accountable, economical, efficient, equitable and sustainable management of public finances, maintenance of macroeconomic and financial sector stability, and effective financial regulation of the economy. The department is mandated by law to : promote national governments fiscal policy and the coordination of its macroeconomic policy ensure the stability and soundness of the financial system and financial services coordinate intergovernmental financial and fiscal relations manage the budget preparation process enforce transparency and effective management in respect of revenue and expenditure, assets and liabilities, public entities, and constitutional institutions. 2 Alignment to NDP / MTSF goal Programme Administration Economic Policy, Tax, Financial Regulation and Research Public Finance and Budget Management Asset and Liability Management Financial Accounting and Supply Chain Management Systems Key programme activities Strategic Objectives NDP / MTSF Goal Value of government gross annual borrowing Cost to service debt as a percentage of GDP Number of active training providers delivering the municipal regulated minimum competency levels programme per year Optimal debt management and funding of government borrowing requirement Outcome 4: Decent employment through inclusive economic growth Support and facilitate capacity development across all spheres of government in order to improve financial management execution Outcome 12: An efficient, effective and development oriented public service Percentage of identified transversal contracts with strategic sourcing principles introduced per year Number of individuals trained per year to assist with the implementation of financial management reforms Develop and Implement strategic procurement Support and facilitate capacity development across all spheres

of government in order to improve financial management execution International Financial Relations Civil and Military Pensions, Contributions to Funds and Other Benefits 3 Alignment to NDP / MTSF goal Programme Technical Support and Development Finance Key programme activities Number of neighbourhood development partnership grant projects under construction per year Total estimated third party investment leveraged Total number of new jobs contracted for approved and active projects in the Jobs Fund Number of long term urban regeneration programmes registered per year Number of training placements contracted with active private companies in the Jobs Fund per year Number of placements contracted with project partners on the Jobs Fund (cumulative inception to date and still active) per year3 Strategic Objectives Promotion of urban integration and neighbourhood development NDP / MTSF Goal Outcome 9: Responsive, accountable, effective and efficient developmental local government system Promotion of urban Outcome 8: Sustainable integration and human settlements and neighbourhood development improved quality of household life Facilitation of employment Outcome 4: Decent creation and inclusive growth employment through inclusive economic growth Outcome 8: Sustainable human settlements and improved quality of household life Facilitation of employment Outcome 4: Decent creation and inclusive growth employment through inclusive economic growth Outcome 4: Decent employment through inclusive economic growth 4 RESPONSE TO THE BRR REPORT Recommendations on BRR report National Treasury responded to the recommendations as per the BRR report as printed in ATC no 136. Responses are submitted as Annexure A 5 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Programme

Partially Not Achieved Achieved Achieved Not yet due for reporting Total To date % To date % To date % Partially Not Achieved 31 Achieved 31 Achieved 31 March 2016 March 2016 March 2016 Administration 7 3 0 0 10 70% 30% 0% Economic Policy, Tax and Financial Sector Policy 9 1 0 0 10 90% 10% 0% Budget Office and Public Finance 12 3 1 0 16 75% 19% 6% Intergovernmental Relations 6 2 0 0 8 75%

25% 0% Assets and Liability Management 9 2 0 0 11 81% 19% 0% Office of the Accountant General 17 3 0 0 20 85% 15% 0% Office of the Chief Procurement Officer 10 8 7 0 25 40% 32% 28% International Financial Relations 2 4 0 0 6 33% 67% 0% Civil Military Pensions, Contributions to Funds and Other Benefits 3 1 0 0 4

75% 25% Technical Support and Development Finance Programme Management 18 7 0 0 25 76% 24% National Treasury Department 93 34 8 0 135 69% 25% 0% 0% 6% 6 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Cost efficient management of goods and services. Annual Target Target performance status Programme 1 Administration Savings in goods and services. Achieved Strategic alignment of business and ICT and 80% of approved solutions deployed with 95% compliance to SLA/ OLA. Achieved Retain appropriately skilled personnel: Agreed percentage of positions retained 87% retention rate Achieved 89% retention rate Implement Enterprise Risk Management (ERM) strategy. 100% implementation of

enterprise risk management strategy Partially Achieved Tabling of public entities strategic and annual performance plans i. Public entities quarterly report submissions to ii. Minister Achieved Provide an effective and efficient information and communication technology (ICT) service. Exercise oversight over the i. public entities to enable the achievement of government policy objectives in a ii. financially sustainable manner Reasons for deviation or variance N/A LAN migration in 240 Madiba, 40 Church and Cape Town. Implementation of hosted SharePoint applications for business. A saving of R4 925 306.40 against expenditure of R657 212 685.63 was attained for April to March16. This result in a saving of 0.7% 82 % on Business solutions and 97 % Compliance to SLA / OLA SLA / OLA Allocating technicians dedicated floors (ICT Business Partners) assisted in improving the overall turnaround times. Migrating email databases to new infrastructures improved performance. Close monitoring SLA performance by management improved service delivery. The target has been exceeded by 2% due to the retention of employees through the implementation of the NT retention framework and 69 promotions within the organisation. The 4th quarter RMC meeting did not convene and a Risk Awareness Survey was not distributed. 95.5% of ERM strategy implemented. N/A The Minister tabled the Public Entities Strategies and Annual Performance Plans All quarterly reports were submitted to the Minister in compliance with the Treasury Regulations, 30 days after submission from the Entities 7 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator

Annual Target Target performance status Reasons for deviation or variance Programme 2 Number of papers published i. by research institutions and internally ii. Academic and research institutions publish 40 papers. i. Department publishes 4 papers ii. each year. Achieved 80 ERSA papers published. 4 discussion papers Implement Twin Peaks model legislation Implement legislation to establish Twin Peaks regulators Partially Achieved FSR Bill is currently in Parliament, which is expected to pass the Bill by the end of this calendar year. Implementation of the legislation is only possible after it is enacted into law. FIC Amendment Bill currently before Parliament. Exact timing dependant Parliamentary process Achieved 2016 Tax proposals published in Chapter 4 of Budget Review on Budget Day, 24 February 2016 Revenue Laws Amendment Bill and Rates Bill currently before Parliament Consultations for 2016 TLAB have commenced N/A Publish tax proposals annual budget review in Proposals published on budget day. Papers are demand driven and it is difficult to predict how many will be published per month Implement, monitor and evaluate environmentally sustainable tax legislation Implement, monitor and evaluate effectiveness of legislation Achieved The draft Carbon Tax Bill is being revised to take account of public comments. Process of consultation completed N/A Development

maintenance models Quarterly updates models as required Achieved Update CPI model Quarterly forecast model update Improving the global demand measure in the quarterly forecast model Macroeconomic determinants of the yield curve and improving the long run yield specification in the model Develop regional input/output model Improving short term inflation forecasting accuracy Building a 2012 Social Accounting matrix for South Africa N/A of and economic to various 8 on Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Annual Target Target performance status Reasons for deviation or variance Programme 3 Ensure enhanced alignment of budget documentation with fiscal guidelines based on principles of countercyclicality, debt sustainability and intergenerational equity Review measures and engage with relevant stakeholders Achieved Timely preparation and completion i. of a well-coordinated and communicated budget process, ii. culminating in making of wellconsidered and appropriate revenue iii. and spending proposals to Cabinet MTEF guidelines issued in July Scheduling of committees meeting process in July Cabinet endorsement of national government expenditure allocations in December Achieved i. ii.

MTEF guidelines issued on 12 June 2015 Preliminary schedule of committees' meeting process complete on 23 June 2015. The first MTEC meeting took place on 23 July 2015 Cabinet endorsement of allocations in December 2015 and January 2016 Compile ENE and AENE As per programme iii. parliamentary N/A Cabinet approved the MTEF guidelines in June 2015. The guidelines were then issued and the schedule of committee meetings drafted and finalised. Cabinet endorsed the national government allocations in December 2015 and also requested that further work be undertaken by the National Treasury and the Department of Planning, Monitoring and Evaluation. In line with this, further proposals were then considered and endorsed by Cabinet in January 2016. N/A Fiscal Risks committee meetings held in May and August 2015. The Fiscal Risks report was published. Achieved The ENE and AENE was compiled and tabled in line with the parliamentary programme 9 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Undertake selected expenditure and performance reviews Annual Target Six per year Target performance status Programme 3 Cont. Partially Achieved 50% (3 out of 6) expenditure and performance review reports completed on a) government lease accommodation' b) TVET and c) NSFAS Publish the Division of Revenue Bill and Division of Revenue Amendment Bill annually Accurate Division of Revenue Bill tabled on budget day and tabled with Medium Term Strategic Framework Achieved

Division of Revenue Bill was tabled on 2016 Budget Day (24 February 2016) and Division of Revenue Amendment Bill was tabled with the 2015 MTBPS on 21 October 2015 Promote on-going improvements in environment Assessment of all provincial health and education infrastructure plans and incentivising of improved planning through conditional grants Achieved 2015/16 Assessment process to inform 2016/17 incentive allocation was concluded during quarter 3. All infrastructure plans assessed (18) for education and health. performance the built Reasons for deviation or variance 3 expenditure and performance review still in progress, service providers are not getting the requisite data required for the reviews and constructing the data from scratch is time consuming. N/A N/A 10 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Annual Target Target performance status Reasons for deviation or variance Programme 4 Analysis of corporate i. plans, shareholder compacts and annual reports of SOCs, DFIs and water boards ii. iii. iv. Review of the regulatory i. environment for SOCs/DFIs ii. iii.

Analyse and submit reports annually on all corporate plans, shareholder compacts and annual reports of SOCs and DFIs Exercise oversight over SOCs/DFIs reporting to the Minister of Finance Compile information and report on SOCs/DFIs borrowing and infrastructure expenditure Review and report on SOC/DFI remuneration Achieved i. Analysed and reviewed the 2014/15 AFS and 2015/16 Corporate plans of SOCs and DFIs. The Corporate Plans for PIC, Sasria, DBSA, SAA and Landbank were tabled in Parliament. Concluded shareholder compacts with SAA, PIC and Sasria, DBSA and LandBank. Also concluded the Annual Review reports of Bloem Water, Magalies Water and Mhlathuze Water. Q1, Q2 & Q3 reports on CAPEX and Borrowings by SOCs have been compiled. And also Complied the borrowing requirement and outcomes for the Budget Review and Quarter 3 reporting Reviewed SOC/ DFI executive remuneration and compiled a memo for Minister and also Reviewed the performance bonuses and incentives for the SOCs reporting to the Minister of Finance Review Treasury Regulations and Treasury Best Practice Guidelines Publish instruction notes relating to the amendments to the Treasury Regulations Analyse and compile responses to legislation, policies, sector responses and strategies being introduced or amended in terms of their impact on SOCs/ DFIs Achieved i. Last review of the Treasury Regulation and Treasury Best Practice Guidelines was done in 2013. It only happens as and when there is a need. Instruction notes will be published after the finalisation of the Treasury Regulations amended in 2013 Provided required inputs on proposed SOC reforms, ICT policy review, raw water pricing strategy and norms and standards, and DOT's white paper on National Civil Aviation Policy. And collected documents for literature review for Treasury Best Practice ii. iii. iv. ii. iii. Annual report of SAA has not yet been finalised and hence could not be tabled. SAA, SAPO, BBI & NECSA Annual Financial statements not received. N/A 11

Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Annual Target Target performance status Programme 4 Cont. Ensure timely and accurate payment of interest and redemptions Ensure timely and Pay R157.9 billion including Treasury Bills Achieved Retain current, and attract new investors Conduct two domestic and two foreign road shows Achieved Quarterly report outlining the performance of SOCs Achieved Management government liabilities of contingent Reasons for deviation or variance Actual amount paid on interest was more compared to the budgeted amount due to higher interest costs on domestic bonds as a result of yields having traded higher than anticipated during the year. There was a third international road show during the year due to the fact that the Budget 2016 international leg was held in March, which is sooner than usual. This was an urgent road show requested by the Minister. N/A Total actual interest cost (Domestic, Retail, TBs, Bonus bonds, and Foreign loans) and redemptions during 2015/16 amounted to R160 billion Conducted a total of five road shows during the year. Two local and three international, post Budget processes. Compiled quarterly reports on government's contingent liability exposure, which were presented to the Fiscal Liabilities committee. Compiled inputs into Chapter 7 of the Budget Review on government obligations. Compiled annual credit risk assessment reports on government's contingent liability exposure from State Owned Companies, Development Finance institutions and Social. 12 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator

Target Target performance status Reasons for deviation or variance Programme 5 Monitor improvement of financial management in national and provincial institutions. Submit reports to Parliament by 30 November of each year Partial Achieved Maintain and enhance Treasury regulations and instructions Conduct on-going maintenance and enhancement of Treasury regulations and instructions Achieved Conduct and support forensic i. investigations to eradicate fraud and corruption ii. Undertake investigations in 20 targeted departments / projects. i. Refer 25 cases for criminal proceedings and civil ii. recovery. Improve FMCMM municipalities in Maintain, enhance and roll out FMCMM for all municipalities The delay was caused by late submission of information requested from relevant stakeholders which affected a part of the reports which addresses those initiatives that the Office of the Accountant-General plans on developing to further improve financial management in PFMA Compliant institutions.

N/A The target was exceeded due to lots of effort put in by the team N/A The Annual progress report on improvement of financial management has been developed and will be finalised by the end of April 2016. The revision of the Treasury Regulations has been completed and publication of the regulations will be included in the Government Gazette on April 2016 after approval of the Minister. Achieved The division has undertaken investigation in 28 targeted departments/projects The division has referred 44 cases for criminal proceedings and civil recovery Achieved FMCMM assessments completed. Reports communicated to all municipalities that participated in the assessments during 2015/16 financial year. 13 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Assessment of government systems Annual Target local Target performance status Programme 5 Cont. Assessment concluded by 30 June 2015 Develop an Performance Module eSCM Management Establish an e-Tender Portal Review government SCM i. legislative framework and update supply chain management (SCM) policy ii. Achieved Reasons for deviation or variance N/A Circular 80 for implementation of local Government was published to ensure use of CSD from 1 July 2016 Assessment of local government ICT was conducted All provincial treasuries visited to create awareness on CSD, eTenders and gCommerce Transversal tender published for the local government financial systems" Survey to determine what systems are used- 34

responses were received from 278 municipalities, 1 budget and treasury circular issued to make CSD compulsory- 1 Circular. e-performance management enabled for national and provincial government by 31 March 2016 Not achieved The performance management framework for SCM was not developed by the Policy unit and it was impossible to develop a technology to automate SCM Performance management Module All tenders published centrally by 30 June 2015 Achieved N/A Conclude the draft i. standard operating ii. procedures (SOPs) for consultation on informal and formal quotations and for emergency procurement Draft the SCM Bill Not completed Draft Bill version 4 available for procurement Due to insufficient capacity, the SOPS could not be finalised. eTender portal was launched on 1 April 2015. On 31 March 2016, 3050 tenders were published on the eTender portal. 14 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Annual Target Target performance status Reasons for deviation or variance Programme 6 Assessment of initial conditions and projects and plans to accelerate regional integration i. ii. iii. Review current content of economic relations (SACU). Review current content of economic relations (SADC). Assess constraint on PIDA (AU).

Achieved i. National Treasury has prepared assessments on the current economic climate and future financial sustainability of Lesotho and Swaziland. National Treasury has also prepared a proposal on the establishment of a SACU Development Fund that would assist with the financial stability within the SACU countries. The desk also prepared an outline of the current climate within SACU for the Minister in preparation of a round-trip of meetings to the BLNS. The collection of trade data was compiled and finalised. The National Treasury attended the first PIDA Week that was held from 13-15 November 2015, in Abidjan. The PIDA Week provided all the relevant stakeholders in the African Infrastructure space the opportunity to receive an update on the implementation of PIDA PAP projects, and discuss the key challenges with implementing PIDA, including financing challenges. The National Treasury also participated in the NEPAD Infrastructure Project Preparation Fund Steering Committee meeting and a report of the implementation of projects of the previous year and the following year was presented. ii. iii. Expansion of relations with key strategic partners i. ii. Identify specific areas of cooperation / bottlenecks and their resolution (SouthSouth). Identify specific areas of cooperation / bottlenecks and their resolution (Bilateral). Achieved i. Convened bilateral with Chinas Minister of Finance Lou Jiwei on 5th September 2015. Briefing notes addressed issues of SSA IMF 3rd Chair and IFA issues. Bilateral consultations were conducted with Botswana, Lesotho, Namibia and Swaziland. The objective of the visits was to develop an understanding from a country perspective of the bottlenecks and stumbling blocks in resolving the current SACU impasse. The outcomes of the meetings would assist in preparing the Minister, as Chair of the SACU Council of Ministers to Chair the SACU Ministerial Retreat. ii) Convened bilateral with US Treasury Secretary Jack Lew on 8th October 2015. Briefing note addressed trade issues such as AGOA, IMF Reform and SSA 3rd Chair in the IMF. ii. N/A N/A 15 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Pay 100% of all benefits within liability date Annual Target i. ii. iii. Ensure 100% compliance with National Treasury SLA To consistently improve client data integrity

100% customer service complaints are resolved within seven days Target performance status Programme 7 Pay 100% of all benefits within liability date: Injury on duty paid within 45 days Special pension paid within 60 days Post-retirement medical benefits paid within 30 days Partially Achieved i. ii. iii. IOD:74% SP: 100% MBA: 100% 95% compliance with National Treasury SLA Achieved Total indicators: 3: 97% = 91% (On-time payments) + 100% data integrity + 100% (Customer Service Experience) Achieved 74% Achieved IOD: 100% SP: 100% MBA: 100% Total for the Programme: 100% 55% client data integrity 100% complaints received are resolved within seven days Reasons for deviation or variance IOD - Delays caused by errors from Compensation Funds The target was exceeded due effective management and monitoring of Programme performance.

The target was exceeded due continuous monitoring and addressing all exceptions on the system. Management runs an application review reports on a monthly basis. New exceptions were identified in Q4 hence a decrease from 79% to 72% Complied. The target was exceeded due to Ability of the team to respond to clients enquiries and request, ease of accessibility, excellent timelines to responses. Total for the Programme: 91% 16 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Annual Target Target performance status Reasons for deviation or variance Programme 8 Establishment of GTAC and Programme 8 management office Compliance with governance and reporting, monitoring and evaluation of implementation Achieved Number of technical assistance projects supported 100 + Achieved 135 Capital project advice and expenditure reviews on behalf of National Treasury Number of interns appointed to municipalities Municipal compliance with Budget and Treasury Office, supply chain management, internal audit and audit committee requirements >10 projects a year 1390 Progress in compliance with financial management requirements, against 2015 baseline

N/A Number of supported projects exceeds target as number of projects depends on demand. Achieved 16 NCP Unit: additional studies done on Moloto Rail Corridor as per client request. PER: More priorities were identified by senior treasury officials than planned Partially Achieved 1284 Variance due to absorption of interns into permanent positions at municipalities and interns leaving for other opportunities Achieved N/A FMCMM assessments completed and reports on the outcome of the assessments were sent to all municipalities that participated in the assessment The division has complied with the governance and reporting, monitoring and evaluation during the 2015/16 financial year. Quarter reports prepared and submitted to the Minister 17 Quarter 4 targets performance status Summarised Quarter 4 service delivery targets performance Indicator Annual Target Total number of catalytic projects approved (cumulative) Number of projects confirmed for planning within identified integration/ spatial transformation zones (per year) Employment, income distribution and inclusive growth research project i. ii. Number of Jobs Fund projects approved (cumulative) Value of grant funding disbursed (cumulative)

340 10 10-15 papers contracted a year. 3-5 conferences / workshops 125 R3 850 m Target performance status Programme 8 Cont. Achieved 352 Achieved 30 Achieved i. ii. 15 Econ 3x3 articles have been published Three workshops held: Spatial Inequality (17 18 August 2015); Income Distribution (30 September) and Inclusive Growth (6 November 2015). Partially Achieved 107 Partially Achieved R 2 890 m Reasons for deviation or variance The driver of this indicator is the 2015/16 NDPG capital grant allocation. Project approvals are required for this allocation in terms of the DORA. It is not possible to project the nature and value of individual projects and therefore smaller project values will result in more projects funded by the grant. Hence a 4% positive variation. Demand driven N/A The Agriculture funding round (5th CFP) did not yield the anticipated number of new projects and therefore without the opening and processing of applications of a new Funding round in this financial year the number

of projects approved will be lower than projected. Disbursements are slower than estimated. Contributing factors include: project withdrawals; terminations; non-compliance with JF reporting framework and overestimations provided by projects. The detailed annual progress report as at the 31 March 2016 is submitted as an annexure. 18 NATIONAL TREASURY FINANCIAL PERFORMANCE AS AT 31/03/2016 Performance per programme Programme Adjusted Budget R'000 Virement/ Shift Final Budget R'000 R'000 Actual outcome R'000 Variance R'000 % spend 1. Administration 363,629 23,016 386,645 375,583 11,062 97.1% 2. Eco Pol, Tax, Fin Reg & Res 135,387 (2,657) 132,730 131,290 1,440 98.9% 3. Public Finance & Budget Man 266,104 2,785 268,889 262,578 6,311 97.7% 4. Asset & Liability Management 3,264,890 281

3,265,171 3,264,294 877 100.0% 807,090 (23,337) 783,753 774,495 9,258 98.8% 6. International Financial Relations 3,533,926 13,736 3,547,662 3,546,134 1,528 100.0% 5. Fin Systems & Accounting 7. Civ & Mil Pen, Cont to Funds 3,962,941 4,800 3,967,741 3,967,698 43 100.0% 8. Tech Sup & Dev Finance 2,774,593 (18,624) 2,755,969 2,472,245 283,724 89.7% 9. Revenue Administration 9,334,439 9,334,439 9,334,439 - 100.0% 10. Fin Intel & State Security 4,562,062 4,562,062 4,562,062 - 100.0% 29,005,061 28,690,818

Total National Treasury 29,005,061 - 314,243 98.9% 20 Outcome per economic classification Item Classification Compensation of employees Goods and services Payments for capital assets Adjusted Budget R'000 Virement/ Shift R'000 Final Budget R'000 733,419 (407) 733,012 732,744 268 100.0% 1,189,053 (43,075) 1,145,978 1,093,166 52,812 95.4% 45,853 33,210 12,643 72.4% 65,723 - 96.6% 26,101 19,752 Actual Outcome R'000 Variance R'000 % spend Total Operational Expenditure 1,948,573 (23,730) 1,924,843 - 1,859,120

Payment for Financial Assets 5,886,380 (40,376) 5,846,004 - 5,846,273 Transfers and Subsidies 21,170,108 64,106 21,234,214 20,985,425 248,789 98.8% Total National Treasury 29,005,061 - 29,005,061 28,690,818 314,243 98.9% (269) - Provincial Equitable Share 386,500,009 386,500,009 386,500,009 State Debt Costs 127,902,018 127,902,018 128,809,901 10,658,909 10,658,909 10,658,909 - 100.0% 681,654 681,654 681,654 - 100.0% 525,742,590 526,650,473 (907,883) 100.2% 554,747,651

555,341,291 (593,640) 100.1% Fuel Levy National Revenue Fund Payments Total Statutory Transfers 525,742,590 Total Vote Budget 554,747,651 - - 100.0% (907,883) 100.0% 100.7% 21 Significant variances and reasons (1/2) The main items excluding the statutory amounts making up the overall positive variance of R314.243 million are Transfers (R248.789 million) and Operational Expenditure (R 65.723 million), as follows: R225 million for Employment Creation Facilitation Fund (ECFF) transfer payments which was scheduled for payment in March 2016, however, the funds could not be disbursed as the Jobs Fund Partners have not met the disbursement conditions which includes the job targets, due to the effect of change in environmental conditions that affected the in the 2015/16 financial year. Consequently, R60 million of the above funds has been requested as rollover to the 2016/17 financial year and the remaining R165 million was declared to National Revenue Fund (NRF). R22.1 million on ECFF operational budget as there were delays in Government Technical Advisory Centre (GTAC) recovering expenses from the ECFF. The funds will be declared to NRF. R23.4 million unspent funds due to a number of municipalities transfer payments which were withheld due to the non-compliance with the Division of Revenue Act (DoRA) (Act no 1 of 2005 Gazette no39746 dated 26 February 2016) and the Neighborhood Development Partnership Grant (NDPG framework). R12.5 million surpluses on NDPG (Indirect Grant). The funds were initially transferred to GTAC but returned later in March 2016 due to delays in the appointment of service providers in municipalities for the new collaborative Urban network precinct planning process. 22 Significant variances and reasons (2/2) R7.5 million unspent funds mainly for the procurement of 4 servers system which was requested as part of the rollover to the 2016/17 financial year. R3.5 million unspent funds mainly for the rollout of the Municipal Regulation on a Standard Chart of Accounts (mSCoA) project which was requested as part of the rollover to the 2016/17 financial year. R20.2 million cumulative saving due to cost saving measures on items such as travel, training and stationery and consultancy services etc. 23 Statutory Amounts : Debt Service Cost The Debts Service Costs reflect an amount of R 907.883 million as at end of 31 March 2016 higher than projected. The main reasons for the over payment are as follows: higher interest on Bonds than expected due to the impact of the switch transactions in bonds on the interest received set against interest paid. higher interest on Treasury bills than expected due to change in the repo rate from 6.75% to 7%. 24 Questions and Answers Thank You 25

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