annrep 1011 1 to 148.qxp - Department of Defence

D E P A R T M E N T O F D E F E N C E2ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of DefenceAnnual Report1 April 2010 to 31 March 2011Safeguarding South Africa for a Better Life for allANNUAL REPORT FY 2010/2011 3

D E P A R T M E N T O F D E F E N C EDepartment of DefenceVisionEffective defence for a democratic South AfricaMissionTo provide, manage, prepare and employ Defence capabilitiescommensurate with the needs of South Africa, as regulatedby the Constitution, National Legislation, Parliamentary andExecutive DirectionThe Department of Defence Annual Report is available on the DOD website (www.dod.mil.za).Annual Report Enquires:Head of CommunicationMr S. DlaminiTel: +27 12 355 5663Fax: +27 12 355 6134E-mail: hoc@mil.zaISBN: 978-0-621-40307-7RP192/20114ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDEPARTMENT OF DEFENCEANNUAL REPORT FY2010/11Ms L. N. Sisulu, MPMinister of Defence & Military VeteransDear MinisterTHE DEPARTMENT OF DEFENCE ANNUAL REPORT ON THE STRATEGIC PLAN 2010 (FY2010/11 TOFY2012/13)I have the honour of submitting the Department of Defence Annual Report for the reporting year 01 April 2010 to31 March 2011.The Annual Report has been prepared as required by Section 40 (1) (d), read together with Treasury Regulation18.3 of the Public Finance Management Act (PFMA), Act 1 of 1999 as amended. The Government Framework forManaging Programme Performance, the requirements of the Public Service Regulations, 2001, Chapter 1 part 111and the reporting guidelines given by the National Treasury were also complied with.I hereby formally submit this report to the National Assembly as a statutory requirement to Parliament.SECRETARY FOR DEFENCE: DIRECTOR-GENERAL(N.Z.H. MPOFU)ANNUAL REPORT FY 2010/2011i

D E P A R T M E N T O F D E F E N C EDOD ANNUAL REPORT FOR THE FY2010/11TABLE OF CONTENTSList of Tables .........................................................................................................................................................List of Figures ........................................................................................................................................................Foreword by the Honourable Minister of Defence and Military Veterans, Lindiwe Sisulu, MP ...........................C H A P T E R 1 : I N F O R M A T I O N O N T H E M I N I S T R YP A R T 1 : T H E M I N I S T R YInstitutions reporting to the Executive Authority ....................................................................................................Bills Submitted to the Legislature and Finalised During the Reporting Year .......................................................Ministerial Visits Abroad for the FY2010/11 ..........................................................................................................Appearances before the Parliamentary Committees ............................................................................................Parliamentary Questions .......................................................................................................................................Council on Defence ...............................................................................................................................................Minister of Defence and Military Veterans Priorities FY2010/11 ..........................................................................Programme Performance: Administration: Subprogramme Ministry ...………………………………………Overview ...............................................................................................................................................................Objectives and Measures .....................................................................................................................................Output Detail (Performance Report) ....................................................................................................................Strategic Overview by the Secretary for Defence, Director-General, Ms N.Z.H. Mpofu ............................viiixxi111222244556P A R T 2 : S T R A T E G I C D I R E C T I O NC H A P T E R 2 : S T R A T E G I C P R O F I L E A N D D E F E N C E O B J E C T I V E SIntroduction ............................................................................................................................................................Constitutional and Legislative Mandate of the DOD .............................................................................................Vision .....................................................................................................................................................................Mission ...................................................................................................................................................................Mission Success Factors ......................................................................................................................................The DOD Shared Value System ...........................................................................................................................Defence Strategic Objectives ................................................................................................................................Defence Outcome ..................................................................................................................................................DOD Medium-term Strategic Focus .....................................................................................................................Defence Outputs ...................................................................................................................................................DOD Alignment with Cabinet and Clusters Priorities ..........................................................................................Services Rendered ...............................................................................................................................................Discontinued Services ..........................................................................................................................................New Services or Outputs to be Scaled Up ..........................................................................................................Services Scaled Down or Suspended .................................................................................................................Losses and Damages ...........................................................................................................................................Events after the Accounting Date .........................................................................................................................C H A P T E R 3 : D E F E N C E V O T EP A R T 3 : P R O G R A M M E P E R F O R M A N C EAim of the Vote ......................................................................................................................................................Main Programmes ................................................................................................................................................Defence Vote 21 ...................................................................................................................................................1010101010101111121212131313131313141414iiANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EBudget Allocation ................................................................................................................................................Departmental Revenue, Expenditure and other Specific Topics .......................................................................C H A P T E R 4 : P r o g r a m m e 1 : A d m i n i s t r a t i o nIntroduction ..........................................................................................................................................................Purpose ...............................................................................................................................................................Outputs ................................................................................................................................................................S u b p r o g r a m m e D e p a r t m e n t a l D i r e c t i o nOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e G o v e r n m e n t I n f o r m a t i o n T e c h n o l o g y O f f i c e r ( G I T O )Overview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e P o l i c y a n d P l a n n i n gOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e M i l i t a r y P o l i c y , S t r a t e g y a n d P l a n n i n g O f f i c eOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e F i n a n c i a l S e r v i c e sOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e H u m a n R e s o u r c e S u p p o r t S e r v i c e sOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e L e g a l S e r v i c e sOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e I n s p e c t i o n S e r v i c e sOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e A q u i s i t i o n S e r v i c e s ( D e f e n c e M a t é r i e l )Overview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e D e f e n c e S u p p l y C h a i n I n t e g r a t i o nOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e C o m m u n i c a t i o n S e r v i c e s ( C o r p o r a t e C o m m u n i c a t i o n )Overview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................1516232323232425262626282829313131323232333434363636383838394141424343444445ANNUAL REPORT FY 2010/2011iii

D E P A R T M E N T O F D E F E N C ES u b p r o g r a m m e S A N D F C o m m a n d a n d C o n t r o lOverview ...............................................................................................................................................................Objectives and Measures .....................................................................................................................................Output Detail (Performance Report) .....................................................................................................................S u b p r o g r a m m e C o r p o r a t e S t a f f O f f i c eOverview ..............................................................................................................................................................Objectives and Measures ...................................................................................................................................Output Detail (Performance Report) ...................................................................................................................S u b p r o g r a m m e R e l i g i o u s S e r v i c e sOverview ...............................................................................................................................................................Output Detail (Performance Report) .....................................................................................................................D e f e n c e R e s e r v e D i r e c t i o nOverview ...............................................................................................................................................................Objectives and Measures .....................................................................................................................................Output Detail (Performance Report) .....................................................................................................................S u b p r o g r a m m e D e f e n c e I n t e r n a t i o n a l A f f a i r sOverview ...............................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) .....................................................................................................................S u b p r o g r a m m e D e f e n c e F o r e i g n R e l a t i o n sOverview ...............................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) .....................................................................................................................S u b p r o g r a m m e O f f i c e A c c o m m o d a t i o nObjectives and Measures ....................................................................................................................................Output Detail (Performance Report) .....................................................................................................................C H A P T E R 5 : P r o g r a m m e 2 : F o r c e E m p l o y m e n tOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Subprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) .....................................................................................................................Planned Exercises (Service Unique) ...................................................................................................................C H A P T E R 6 : P r o g r a m m e 3 : L a n d w a r d D e f e n c eOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Subprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) ....................................................................................................................Planned Exercises (Service Unique) ...................................................................................................................C H A P T E R 7 : P r o g r a m m e 4 : A i r D e f e n c eOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Subprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) .....................................................................................................................Planned Exercises (Service Unique) ...................................................................................................................C H A P T E R 8 : P r o g r a m m e 5 : M a r i t i m e D e f e n c eOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................454646464647474849495050515151525253535455555556586162626363666768686969717374ivANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESubprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) ....................................................................................................................Planned Exercises (Service Unique) ..................................................................................................................C H A P T E R 9 : P r o g r a m m e 6 : M i l i t a r y H e a l t h S u p p o r tOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Subprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) ....................................................................................................................Planned Exercises (Service Unique) ..................................................................................................................C H A P T E R 1 0 : P r o g r a m m e 7 : D e f e n c e I n t e l l i g e n c eOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Subprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) ....................................................................................................................747475767778787979828484858585C H A P T E R 1 1 : P r o g r a m m e 8 : G e n e r a l S u p p o r tOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Subprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................S u b p r o g r a m m e J o i n t L o g i s t i c S e r v i c e sOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Subprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) ....................................................................................................................S u b p r o g r a m m e C o m m a n d a n d M a n a g e m e n t I n f o r m a t i o n S y s t e m sOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Subprogrammes ..................................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) ....................................................................................................................S u b p r o g r a m m e M i l i t a r y P o l i c eOverview ..............................................................................................................................................................Purpose of the Programme .................................................................................................................................Objectives and Measures ....................................................................................................................................Output Detail (Performance Report) ....................................................................................................................868686868687878888909191919192939393P A R T 4 : O R G A N I S A T I O N A L S T R U C T U R E A N D H U M A N R E S O U R C E SC H A P T E R 1 2 : O r g a n i s a t i o n a l S t r u c t u r e a n d H u m a n R e s o u r c e sOverview .............................................................................................................................................................DOD Macro-Personnel Strength .........................................................................................................................Selected Performance Indicators ........................................................................................................................Service Delivery Improvement Plan ....................................................................................................................Expenditure ..........................................................................................................................................................Employment and Vacancies ................................................................................................................................Job Evaluation .....................................................................................................................................................Employment Changes .........................................................................................................................................95969899101103104105ANNUAL REPORT FY 2010/2011v

D E P A R T M E N T O F D E F E N C EEmployment Equity ..........................................................................................................................................Performance Rewards .....................................................................................................................................Foreign Workers ...............................................................................................................................................Leave Utilisation ...............................................................................................................................................HIV/Aids and Health Promotion Programmes .................................................................................................Labour Relations ..............................................................................................................................................Skills Development ...........................................................................................................................................Injury on Duty ...................................................................................................................................................Utilisation of Consultants ..................................................................................................................................Performance Agreements ................................................................................................................................A P P E N D I X ADefence Diplomacy Report for FY2010/11 ........................................................................................................A P P E N D I X BForeign Aid Assistance to the DOD for FY2010/11 ........................................................................................A P P E N D I X CCriminality in the DOD for the year ending 31 March 2011 .............................................................................A P P E N D I X DDOD Enterprise Risk and Mitigation Strategies for FY2010/11 ......................................................................A P P E N D I X ENew Services/Outputs Scaled Up and Services/Outputs Scaled Down or Suspended ................................108112113114117120122123123125126131136137140P A R T 5 : F I N A N C I A L P E R F O R M A N C EReport of the Audit Committee ..........................................................................................................................Report of the Accounting Officer for the year ended 31 March 2011 ................................................................Report of the Auditor-General to Parliament on the Financial Statements of Vote 21 ......................................Statement of Accounting Policies and Related Matters ...................................................................................Annual Financial Statements of Vote 21 ...........................................................................................................South African National Defence Force Fund Annual Report .............................................................................Report of the Auditor-General to Parliament on the South African National Defence Force Fund ..................Financial Statements of the South African National Defence Force Fund ........................................................151153178183191271280282O T H E R R E P O R T SAssurance Report of the Auditor-General to Parliament on Compliance with Section 4 of the NationalConventional Arms Control Act, 2002 (Act No. 41 of 2002) in terms of Section 12 of the NationalConventional Arms Control Act, 2002 (Act No. 41 of 2002) for the period ended 31 March 2011 ................G l o s s a r y o f A b b r e v i a t i o n s a n d A c r o n y m s295298Detail information will be available in a seperate document.P A R T 6 : M I L I T A R Y V E T E R A N ST E R M I N O L O G YFor the purpose of this document the term “The Minister” will at all times refer to the Minister of Defence and Military Veterans(MOD & MV), unless specifically stated otherwise.At the time of publishing, a seperate vote for the Department of Military Veterans was not created. The term Department ofDefence and Military Veterans (DOD & MV) and the Department of Defence (DOD) are used interchangably in the document.In general terms, the former will be used, however, the latter will be used mostly when referring specifically to DOD.viANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ELIST OF TABLES1.1 International Visits by the Minister in the FY2010/11 ..........................................................................1.2 International Visits by the Deputy Minister in the FY2010/11 ..............................................................1.3 Ministerial Direction Output Detail for the FY2010/11 .........................................................................3.1 Defence Budget Structure Programmes ..............................................................................................3.2 Defence Vote for the 2010/11 MTEF ...................................................................................................3.3 Total Defence Budget ..........................................................................................................................3.4 Policy Proposals for Additional Funding ...............................................................................................3.5 Additional Funding Received by the DOD ............................................................................................3.6 Sources of Revenue ............................................................................................................................3.7 Transfer Payments for the FY2010/11 ................................................................................................3.8 DOD Expenditure for the FY2010/11 ..................................................................................................3.9 Projects Currently in Progress for the FY2010/11 ..............................................................................3.10 Major Maintenance Projects Undertaken during FY2010/11 ...............................................................3.11 Projects Carried Forward to FY 2010/11 from FY2010/11 ..................................................................3.12 New Projects that will commence in FY2010/11 .................................................................................4.1 Departmental Direction Output Detail for the FY2010/11 ....................................................................4.2 GITO Output Detail for the FY2010/11 ................................................................................................4.3 Policy and Planning Output Detail for the FY2010/11 .........................................................................4.4 Military Policy, Strategy and Planning Office (MPSPO) Output for the FY2010/11 ............................4.5 Financial Services Output Detail for the FY2010/11 ...........................................................................4.6 Human Resource Support Services Output Detail for the FY2010/11 ................................................4.7 Legal Services Output Detail for the FY2010/11 .................................................................................4.8 Inspection Services Programme Output for the FY2010/11 ...............................................................4.9 Defence Aquisition Services Output Detail for the FY2010/11 ............................................................4.10 Defence Supply Chain Integration Output Detail for the FY2010/11 ...................................................4.11 Communication Services Output for the FY2010/11 ...........................................................................4.12 SANDF Command and Control Output for the FY2010/11 .................................................................4.13 Corporate Staff Office Output for FY2010/11 .......................................................................................4.14 Religious Services Output for the FY2010/11 .....................................................................................4.15 Defence Reserves Direction Output for the FY2010/11 ......................................................................4.16 Defence International Affairs Output Detail for the FY2010/11 ...........................................................4.17 Defence Foreign Relations Output for the FY2010/11 ........................................................................4.18 Office Accommodation Subprogramme Output for FY2010/11 ............................................................5.1 Force Employment Programme Output for the FY2010/11 ................................................................5.2 Force Employment Programme Joint, Interdepartmental and Multinational Exercises for theFY2010/11 .............................................................................................................................................6.1 Landward Defence Programme Output for the FY2010/11 ................................................................6.2 Landward Defence Programme Planned Exercises (Service Unique) for the FY2010/11 .................7.1 Air Defence Programme Output for the FY2010/11 ............................................................................7.2 Air Defence Programme Planned Exercises (Service Unique) for the FY2010/11 .............................7.3 Air Defence Programme Planned Joint, Interdepartmental and Multinational Exercises for theFY2010/11 ..............................................................................................................................................8.1 Maritime Defence Programme Output for the FY2010/11 ..................................................................8.2 Maritime Defence Programme Planned Exercises (Service Unique) for the FY2010/11 ..................9.1 Military Health Support Programme Output for the FY2010/11 ..........................................................9.2 Military Health Support Programme Planned Exercises (Service Unique) for the FY2010/11 ...........10.1 Defence Intelligence Programme Output for the FY2010/11 ..............................................................11.1 Joint Logistic Services Output for the FY2010/11 ...............................................................................11.2 CMIS Division Output for the FY2010/11 ............................................................................................11.3 Military Police Division Output for the FY2010/11 ...............................................................................12.1 DOD's Average Planned and Actual Strength as at 31 March 2011 .....................................................12.2 DOD Selected Performance Indicators for the FY2010/11 .................................................................12.3 Main Services Provided and Standards ...............................................................................................12.4 Consultation Arrangements with Clients ..............................................................................................12514141515161617182020212125272931323436384143454647485051525356586366697171757679828588919396989999ANNUAL REPORT FY 2010/2011vii

D E P A R T M E N T O F D E F E N C E12.5 Service Delivery Access Strategies .....................................................................................................12.6 Service Information Tools ....................................................................................................................12.7 Complaints Mechanisms ......................................................................................................................12.8 Personnel Costs by Programme ..........................................................................................................12.9 Personnel Costs by Salary Bands ........................................................................................................12.10 Salaries, Overtime, Home Owners Allowance and Medical Assistance by Programme .....................12.11 Salaries, Overtime, Home Owners Allowance and Medical Assistance by Salary Bands ....................12.12 Employment and Vacancies by Programme as at 31 March 2011 .......................................................12.13 Employment and Vacancies by Salary Band as at 31 March 2011 .......................................................12.14 Employment and Vacancies by Critical Occupation as at 31 March 2011 ............................................12.15 Job Evaluations for the Period 1 April 2010 to 31 March 2011 .............................................................12.16 Profile of Employees Whose Salary Positions were Upgraded due to Their Posts being Upgradedfor the Period 1 April 2010 to 31 March 2011 ........................................................................................12.17 Employees Whose Salary Level Exceed the Grade Determined by Job Evaluation as at 31 March2011 (in terms of PSR 1.V.C.3) .............................................................................................................12.18 Profile of Employees Whose Salary Level Exceed the Grade Determined by Job Evaluation as at 31March 2011 (in terms of PSR 1.V.C.3) ..................................................................................................12.19 Annual Turnover Rates by Salary Band for the Period 1 April 2010 to 31 March 2011 .........................12.20 Annual Turnover Rates by Critical Occupation for the Period 1 April 2010 to 31 March 2011 ..............12.21a Reasons why Staff Left the Department for the Period 1 April 2010 to 31 March 2011 ........................12.21b Mobility Exit Mechanism Granted for the Period 1 April 2010 to 31 March 2011 - UniformedPersonnel .............................................................................................................................................12.21c Employee Initiated Severance Packages Granted for the Period 1 April 2010 to 31 March 2011 -Public Service Act Personnel ................................................................................................................12.22 Promotions by Critical Occupation for the Period 1 April 2010 to 31 March 2011 .................................12.23 Promotions by Salary Band for the Period 1 April 2010 to 31 March 2011 ...........................................12.24a Total Number of Employees (Including Employees with Disabilities) in Each of the FollowingOccupational Categories as at 31 March 2011 .....................................................................................12.24b Total Number of Employees (Only Employees with Disabilities) in Each of the FollowingOccupational Categories as at 31 March 2011 ....................................................................................12.24c Total Number of Employees (Including Employees with Disabilities) in Each of the FollowingOccupational Bands as at 31 March 2011 ............................................................................................12.24d Total Number of Employees (Only Employees with Disabilities) in Each of the FollowingOccupational Bands as at 31 March 2011 ............................................................................................12.25a Recruitment (Including Employees with Disabilities) for the Period 1 April 2010 to 31 March 2011 .....12.25b Recruitment (Only Employees with Disabilities) for the Period 1 April 2010 to 31 March 2011 ...........12.26a Promotions (Including Employees with Disabilities) for the Period 1 April 2010 to 31 March 2011 ......12.26b Promotions (Only Employees with Disabilities) for the Period 1 April 2010 to 31 March 2011 .............12.27a Terminations (Including Employees with Disabilities) for the Period 1 April 2010 to 31 March 2011 ..12.27b Terminations (Only Employees with Disabilities) for the Period 1 April 2010 to 31 March 2011 ...........12.28 Disciplinary Action for the Period 1 April 2010 to 31 March 2011 .......................................................12.29 Skills Development Training Provided for the Period 1 April 2010 to 31 March 2011 ...........................12.30 Performance Rewards by Race, Gender and Disability for Personnel below Senior ManagementService (Including Employees with Disabilities) for the Period 1 April 2010 to 31 March 2011 .............12.31 Performance Rewards by Salary Band for Personnel below Senior Management Service for thePeriod 1 April 2010 to 31 March 2011 ...................................................................................................12.32 Performance Rewards by Critical Occupation for the Period 1 April 2010 to 31 March 2011 ................12.33 Performance Related Rewards (Cash Bonus) by Salary Band for Senior Management Service forthe Period 1 April 2010 to 31 March 2011 .............................................................................................12.34 Foreign Workers by Salary Band for the Period 1 April 2010 to 31 March 2011 ...................................12.35 Foreign Workers by Major Occupation for the Period 1 April 2010 to 31 March 2011 ..........................12.36a Sick Leave Granted for the Period 1 January 2010 to 31 December 2010 - Uniformed Personnel ......12.36b Sick Leave Granted for the Period 1 January 2010 to 31 December 2010 - Public Service ActPersonnel ..............................................................................................................................................12.37a Disability Leave (Temporary and Permanent) Granted for the Period 1 January 2010 to 31December 2010 - Uniformed Personnel .............................................................................................100100100101101102102103103104104104105105105106106106107107107108108109109109109110110110111111111112112113113113113114114114viiiANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C E12.37b Disability Leave (Temporary and Permanent) Granted for the Period 1 January 2010 to 31December 2010 - Public Service Act Personnel ..................................................................................12.38a Annual Leave Taken for the Period 1 January 2010 to 31 December 2010 - Uniformed Personnel .12.38b Annual Leave Taken for the Period 1 January 2010 to 31 December 2010 - Public Service ActPersonnel .............................................................................................................................................12.39a Capped Leave Taken for the Period 1 January 2010 to 31 December 2010 - Uniformed Personnel12.39b Capped Leave Taken for the Period 1 January 2010 to 31 December 2010 - Public Service ActPersonnel .............................................................................................................................................12.40a Leave Payouts FY2010/11 - Uniformed Personnel ............................................................................12.40b Leave Payouts FY2010/11 - Public Service Act Personnel ................................................................12.41a Steps Taken to Reduce the Risk of Occupational Exposure ...............................................................12.41b Details of Health Promotion and HIV/AIDS Programmes ....................................................................12.42 Collective Agreements for the Period 1 April 2010 to 31 March 2011 .................................................12.43 Misconduct and Disciplinary Hearings finalised for the Period 1 April 2010 to 31 March 2011 ..........12.44 Types of Misconduct addressed at Disciplinary Hearings for the Period 1 April 2010 to 31 March2011 .....................................................................................................................................................12.45 Grievances Lodged for the Period 1 April 2010 to 31 March 2011 ......................................................12.46 Disputes Lodged with Councils for the Period 1 April 2010 to 31 March 2011 ....................................12.47 Strike Actions for the Period 1 April 2010 to 31 March 2011 ................................................................12.48a Precautionary Suspensions with Pay for the Period 1 April 2010 to 31 March 2011 - UniformedPersonnel ............................................................................................................................................12.48b Precautionary Suspensions with Pay for the Period 1 April 2010 to 31 March 2011 - Public ServiceAct Personnel .......................................................................................................................................12.49 Training Needs Identified for the Period 1 April 2010 to 31 March 2011 ..............................................12.50 Training Provided for the Period 1 April 2010 to 31 March 2011 .........................................................12.51a Injury on Duty for the Period 1 April 2010 to 31 March 2011 - Uniformed Personnel ..........................12.51b Injury on Duty for the Period 1 April 2010 to 31 March 2011 - Public Service Act Personnel ..............12.52 Report on Consultant Appointments using Appropriate Funds FY2010/11 ........................................12.53a Performance Agreements Signed by Salary Band for Senior Management Service for the Period1 April 2010 to 31 March 2011 - Uniformed Personnel ........................................................................12.53b Performance Agreements Signed by Salary Band for Senior Management Service for the Period1 April 2010 to 31 March 2011 - Public Service Act Personnel ...........................................................115115115116116116117117118120120120121121121121121122122123123123125125L I S T O F F I G U R E S12.1 Organisational Structure of the Department of Defence for the FY2010/11 ....................................12.2 Department of Defence Year-end Strength as at 31 March 2011 .....................................................9697P H O T O G R A P H SPhotographs in the Annual Report FY2010/11, are used with the permission of the SA Soldier, official monthly magazine of theSouth African National Defence Force and depict events during the period 1 April 2010 to 31 March 2011. For more informationon the photographs, visit the Department of Defence website www.dod.mil.zaANNUAL REPORT FY 2010/2011ix

Chapter 1D E P A R T M E N T O F D E F E N C EF o r e w o r d b y t h eH o n o u r a b l e M i n i s t e ro f D e f e n c e a n dM i l i t a r y V e t e r a n s ,L . N . S i s u l u , M PThe year under review has, from the outset, been framed bythe challenge issued by His Excellency JG Zuma, Presidentof the Republic of South Africa during his State of the Nationaddress of 11 February 2010. Here he articulated the strategicfocus of Government and its commitment to build astrong developmental state, able to respond to the needs andaspirations of the people of the country, and able to performbetter and faster.This was amplified through the affirmation that the strategicintent of Government for the period was to build a performance-orientatedstate, through the optimising of planning aswell as performance monitoring and evaluation. Efforts wereto be measured by outcomes, with an emphasis on accountabilityand an action orientation.Within the parameters of this context, the Departments ofDefence and Military Veterans have embarked on the vigorouspursuance of a number of key strategic objectives. Thesehave included, inter alia, a focus on such pivotal elements asthe creation of a Defence Dispensation; ensuring the fullfunctionality of the Department of Military Veterans;addressing audit qualifications; border security; Defenceinfrastructure and budget. We also committed ourselves to amuch-needed policy review in a number of critical sectorsincluding the repositioning of the Defence Secretariat, thecreation of a National Youth Service, and the repositioning ofthe Defence Industry. These areas of policy review haveyielded noteworthy results, and the positive realisation ofthese is anticipated.Furthermore, it is with much pleasure that we are able toreport on significant achievements in the majority of all otherdomains. Most notably, a revised defence dispensation hasbeen instituted, with the associated Defence Amendment Billbeing passed in Parliament. This will impact significantly onthe ability of the department to address such key aspects asANNUAL REPORT FY 2010/2011MS L.N. SISULUMINISTER OF DEFENCE ANDMILITARY VETERANSaccommodation, grievance resolution and discipline, as wellas to optimise matters of human resource administration,including remuneration, conditions of service in recognitionof associated hardships inherrently unique to the military.Furthermore, the Department of Military Veterans has beenestablished, with the structures having been approved by theDepartment of Public Service and Administration on 30 June2010. In support of this entity, the requisite regulations havebeen drafted, including the Military Veterans Affairs Bill.The matters of good governance in general, and audit quali-xi

D E P A R T M E N T O F D E F E N C Efications in particular, have been systematically pursuedthrough a programme of interventions addressing internaldepartmental controls. This has had the desired outcome,with the concomitant reduction in audit qualifications fromseven in FY2007/08 to one in the FY2010/11. The remainingaudit qualification falls within the defence asset domain, anarea of genetic disadvantage in defence departments internationally,given the unique nature of the core business. Thematter of asset management, both pertaining to tangible andintangible assets, will remain a critical departmental objectivein the coming period.We are particularly proud to report on the return of our menand women to the borders. Currently, some 1500 kilometresof border are being covered, with this distance anticipated toexpand to some 4 471 kilometres of land border, 2 700 kilometresof maritime border and 76 600 kilometres of air borderby the end of the deployment. The effects of this presenceare readily apparent, with cross-border crime having declinedsignificantly.The matter of infrastructure has received considerable attention,and we are gratified to note that on 01 April 2011 theDefence Works Capability was formally instituted. This hasbeen the result of constructive deliberation between thedepartment and the National Department of Public Works inorder to give effect to our intent of establishing a DefenceEstate Management mechanism. The implementation of thecapability in its full spectrum will receive our continued attentionin the forthcoming period.Two areas which have not seen full resolution have been therevitalisation of the landward forces and the expansion of thebudget in order to accommodate the emergent Constitutionalrequirements. These priorities will remain key strategic focusareas for FY2011/12.Further critical priorities which shall occupy our attention inthe coming period will include, inter alia, entrenchment of ournew dispensation for South African National Defence Forcemembers, and the associated improvement of the conditionswithin the South African National Derence Force, includingthe pressing concerns, raised by the Interim NationalDefence Force Commission, of accommodation. Our effortsin supporting Government intent on the matter of youth ingeneral and furthering our agenda with regard to the NationalYouth Service in particular, will receive our concerted attention.The effects of the successful implementation of this initiativewill be significant, and we await the realisation thereofwith anticipation.The defence and security of South Africa is inextricablylinked to that of the region and continent. South Africa isessentially a littoral state, and accordingly the requirementfor a balanced maritime capability, able to respond to identifiedand potential maritime security threats, is undisputed.This is particularly pertinent, given the recent escalation ofmaritime crime in the region. This matter will therefore begiven particular focus in our efforts.Additional priorities for FY2011/12 remain the matter of therepositioning of ARMSCOR and DENEL, to ensure synthesisbetween these entities and departmental requirements,and the revitalisation of our Reserve Force.In conclusion, allow me to acknowledge the dedication, loyaltyand commitment of our men and women who serve ourcountry and who so relentlessly pursue the furthering of ourstrategic intent as a department. We extend our considerableappreciation to all those who have so selflessly ensured thatthe year under review, has been such a notable success.(MS L. N. SISULU)MINISTER OF DEFENCE ANDMILITARY VETERANS: MPxiiANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EPART 1: THE MINISTRYChapter 1I n f o r m a t i o n o nt h e M i n i s t r yI n s t i t u t i o n s R e p o r t i n g t o t h eE x e c u t i v e A u t h o r i t yThe following Organs of State and Public Entities report to theMinister of Defence and Military Veterans in terms of thePFMA. These include the following;Department of Military Veterans. The Department ofMilitary Veterans is responsible for the overall managementand administration of military veteran affairsincluding but not limited to developing policy, legislation,programmes, benefits and services that assist thetransition from active service to civilian life.Defence Force Service Commission (DFSC). TheCommission is responsible for making recommendationsto the Minister concerning conditions of service ofSANDF members.Armaments Corporation of South Africa (ARM-SCOR). ARMSCOR is a schedule 2 entity under thePublic Financial Management Act (PFMA) mandated tosupport the delivery of the strategic Defence Capabilities.Castle Control Board. The Castle Control Board is classifiedas a public entity under the PFMA and carries themandate of managing and protecting the Castle of GoodHope on behalf of the Minister who has the ultimateownership responsibility for the Castle.B i l l s S u b m i t t e d t o t h e L e g i s l a t u r ea n d F i n a l i s e d D u r i n g t h eR e p o r t i n g Y e a r Defence Amendment Act, 2010 (Act No 22 of 2010)Defence Force Service Commission (DFSC) BillMilitary Ombudsman Bill Military Veterans Bill (B1 - 2011)M i n i s t e r i a l V i s i t s A b r o a d f o rt h e F Y 2 0 1 0 / 1 1The Minister and Deputy Minister of Defence and MilitaryVeterans were engaged in a number of defence-related diplomaticactivities. International visits made by the Minister areshown in Table 1.1, whilst those made by the Deputy Ministerare shown in Table 1.2 below.Table 1.1: International Visits by the Minister of Defence in the FY2010/11Date31 May 2010 - 06 June 201011 - 15 July 201022 - 23 July 201002 - 08 August 201017 - 21 August 201025 - 26 August 201009 - 10 September 201024 September 2010 -02 October 2010CountryIndiaSeychellesMozambiqueRussiaSwedenBurundiNamibiaBelgiumPurposePart of the President's delegation on a Bi-nationalmeeting to strengthen relations between the two countriesAttended the International Symposium On PiracyAttended the SADC Inter-State Defence and SecuritymeetingPart of the President's delegation on a Bi-national meetingto strengthen relations between the two countriesChaired the meeting of the Board of the InternationalUrban Poor Fund and attended the related seminarRepresented the President of the RSA at the inaugurationof the President of Burundi in BujumburaBilateral meeting on Defence Cooperation matters: JointPermanent Commission on Defence and Security(JPCDS)Part of the President's delegation on a Bi-national meetingto strengthen relations between the two countriesANNUAL REPORT FY 2010/2011 1

D E P A R T M E N T O F D E F E N C ETable 1.1: International Visits by the Minister of Defence in the FY2010/11 (continued)Date19 - 21 October 201018 - 22 November 201031 January 2011 to04 February 201110 - 15 February 2011CountryBotswanaArgentinaSpainIndiaPurposeBilateral meeting of the Joint Permanent Commission onDefence and Security (JPCDS)Sign a Memorandum of Understanding and to strengthenrelations between the two countriesInvitation as part of the SANDF's commitment tostrengthen relations with European countriesVisited counterpart and attended the InternationalDefence and Aerospace ExhibitionTable 1.2: International Visits by the Deputy Minister of Defence and Military Veterans in theFY2010/11Date08 - 12 May 201021 - 22 May 201028 - 30 May 201022 - 23 July 201009 - 10 September 201019 - 21 October 201024 - 30 October 201006 - 08 December 2010CountryJordanSeychellesBotswanaMozambiqueNamibiaBotswanaFranceEthiopiaPurposeAttend the Special Operation Forces Exhibition andConferenceAttended a Regional Ministerial Conference on a RegionalApproach to fight piracy off the Coast of SomaliaAttended the funeral of a military veteran of uMkhontoweSizwe who died in BotswanaAttended the SADC Inter-State Defence and SecuritymeetingBilateral meeting on Defence Cooperation matter: JointPermanent Commission on Defence and Security inSwakopmundBilateral meeting of the Joint Permanent Commission onDefence and Security (JPCDS)Attended a EURONAVAL 2010 Exhibition in ParisAttended a Defence Cooperation meeting of the AfricanChief Defence Staff and Heads of Security and Safety inAddis AbabaA p p e a r a n c e s b e f o r e t h eP a r l i a m e n t a r y C o m m i t t e e sThe Minister and DOD appeared before the PortfolioCommittee on Defence and Military Veterans (PCD) on 16occasions and attended one hearing of the StandingCommittee on Public Accounts (SCOPA) during the reportingperiod.P a r l i a m e n t a r y Q u e s t i o n sThe Minister replied to 16 questions form the NationalCouncil of Provinces and gave 113 replies to the NationalAssembly during the period under review.C o u n c i l o n D e f e n c eThe Council on Defence, the highest decision making body inthe DOD, met four times during the period under review.2M I N I S T E R O F D E F E N C EP R I O R I T I E S F O R F Y 2 0 1 0 / 1 1Performance against the Priorities of the Minister of Defencefor the FY2010/11 is reported as follows:The Establishment of a functional Department ofMilitary Veterans. In pursuit of this priority, the organisationalstructure of this department was designed andapproved by the Minister on 28 May 2010, subsequentto the approval, a determination of functions was doneby the Minister of Public Service & Administration. Theappointment of the senior members is in process andwill be completed in the early part of FY2011/12. Toensure a mandate for the department, the MilitaryVeterans Affairs Bill has been drafted and the costing ofmilitary veterans' benefits as contemplated in the Bill iscurrently being considered by Cabinet.Rejuvenation and Upgrading of the LandwardProgramme. This project has been prioritised for theANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EFY2011/12. The Landward Defence Capability has nothad the advantage of being part of the Strategic DefencePackage programme and is thus lagging in technologicallyadvanced prime mission equipment. The developmentof this capability relies on the acquisition of specificcombat and logistic product systems. This capabilityis essential to ensure the sustainment of deploymentsbeyond the borders of the RSA. Apart from additionalfunding allocated for the upgrade of the operationalambulance fleet in FY2011/12, no additional funds havebeen allocated or approved.Infrastructure and the Department of DefenceWorks Regiment. At the end of the period underreview, Project LEBAKA was completed and transferredfrom the SA Army to the Logistics Division andmerged with the Service Corps and existing facilitymanagement agencies to form the Defence WorksCapability. The macro-structure was approved by theMinister of Defence on 23 March 2011. Subsequently,the A/CSANDF issued an implementation instructionfor the establishment of the Defence Works Formationunder command of Chief of Logistics with effect from01 April 2011. The new formation is aimed at providingefficient, effective and economical operational levelfacility management, including maintenance, repair andconstruction, in support of the strategy and objectives ofthe DOD. The Service Corps, previously under commandof Chief of Human Resources, has also been integratedinto this capability. Skills development traininghas been undertaken with 676 members (56 alreadyqualified) who have gained valuable practical experienceby working on DOD and other construction projects.These members will form the core of the DefenceWorks Formation.Alignment of Defence Secretariat with its Constitutionaland Legislative Mandate. Research has beenconducted into the best possible manner of repositioningthe Defence Secretariat so as to assist the Minister in hercivil control responsibility. Both domestic and internationalexperiences were taken into account in thisresearch. During 2010, a Defence Secretariat repositionproposal was submitted to the Minister for consideration.Depending on which option is adopted, the repositioningof the Defence Secretariat might have consequentialpolicy implications.The Establishment of the Defence Force ServiceCommission and Supporting Structures. The DefenceAmendment Act (Act No 22 of 2010) which providesfor the establishment of the permanent Defence ForceService Commission was promulgated in December2010. FY2011/12 will see the promulgation of theapplicable regulations to give content to the DefenceAmendment Act with respect to the ServiceCommission. Over and above this, all necessary supportstructures to the Service Commission will also be establishedand operationalised.Transformation of ARMSCOR. ARMSCOR is establishedin terms of legislation to serve as the acquisitionagency of the DOD. ARMSCOR is therefore a criticalstakeholder in so far as the SANDF operational effectivenessis concerned. ARMSCOR falls under the jurisdictionalauthority of the Minister. Experience over theyears has repeatedly pointed towards the need for areview of the relationship between the DOD and ARM-SCOR so as to enhance efficiency and economy. A conceptualFramework for the repositioning of ARMSCORhas been developed. This framework addresses detailsof the relationship between ARMSCOR and the DOD inthe areas of business process, governance, risk, complianceand accounting.Incremental Refocusing of DENEL to Support theidentified Defence Strategic Capabilities. DENEL isa public enterprise that falls under the jurisdiction of theMinister of Public Enterprises. DENEL is crucial to theDOD in as much as it serves as the repository of certainSANDF strategic capabilities. Noting the importance ofDENEL to the SANDF operational efficiency and effectiveness,the DOD has adopted a framework whichforms the basis of its discussions with the Department ofPublic Enterprises on its relationship with DENEL. Theaim is an end state in which DENEL remains a strategicsupplier to the DOD whilst maintaining economic viabilityin its own right.Promote a Culture of Good Governance Prescripts.During 2009, the DOD introduced specific interventionsto strengthen internal controls. These interventions haveresulted in the reduction of audit qualifications fromseven to one. The one remaining audit qualification inthe area of defence asset management has been the focusfor this financial year. International experience hasshown that most defence forces across the world experiencemajor challenges with asset management.Notwithstanding this, the DOD has made significantimprovement to the management of its tangible andintangible assets. A new single logistic process has beendeveloped to ensure compliance with National Treasuryaccounting and reporting requirements and internationalauditing standards. An organisational structure wasdeveloped to support this process.Information Technology (IT). The pilot HumanResource Module has been rolled-out with a formallaunch by the Department of Public Service andAdministration. The DOD is currently undergoing trainingand testing of the module which is intended toreplace the current Human Resources application withinthe National Treasury set timelines. The DOD and theNational Treasury are finalising the discussions to gainapproval for the lifting of the moratorium for the developmentof the DOD unique logistics systems. An inte-ANNUAL REPORT FY 2010/2011 3

D E P A R T M E N T O F D E F E N C Egrated financial management system for the asset registerand procurement implementation charter betweenNational Treasury and the DOD was also formulated.Eleven units have been identified as lead sites for theimplementation of the asset register. Procurement willcommence from 01 April 2011. A number of IT projectsto help improve health care are also in various stages ofimplementation.Defence Strategy that responds to the DOD's Currentand Emerging Needs. The Defence StrategyConceptual Framework has been completed and hasbeen accepted by the Minister. This can now be discussedwith Cabinet as part of the consultation process.The Revitalisation of the Reserves. The DefenceAmendment Act (Act 22 of 2010) promulgated in December2010 makes provision for the utilisation ofReserve members and their obligation to serve in timesof need. The implementation of the legislative provisionsshall be given effect through the applicable regulationsand contracts to be developed during the course ofFY2011/12. The roll-out of the University ReserveTraining Programme for under-graduates is progressingwell, with a number of tertiary education institutionsparticipating in the programme.Optimal Utilisation of the Collateral Value of DefenceCapabilities in Responding to the Country'sSocio-Economic Needs. The SANDF prepared andemployed multi-roled military capabilities on requestand in accordance with the prescripts of the Defence Act(42 of 2002) in support of other government departments.Border safeguarding, safety and security support,maintaining essential services, disaster relief andhumanitarian assistance and search and rescue missionswere conducted during the period under review.Assistance provided to 74 hospitals during the nationalstrike of nursing personnel, is a particular case in point.In addition, two bridges were constructed by the SAArmy engineers in the Eastern Cape to provide safe andeasy access to the local communities.Provide a lead to the development and Implementationof the Community Service Programme. A conceptpaper on a National Youth Service has been completedand approved. A pilot programme was launchedin Bloemfontein with a group of 500 recruits undergoingtraining. A further 1500 recruits are planned forFY2011/12, 2 000 for FY2012/13 and 6 000 forFY2013/14.P R O G R A M M E P E R F O R M A N C E :A D M I N I S T R A T I O N :S U B P R O G R A M M E : M I N I S T R YO v e r v i e wDuring the year under review, the Minister of Defence and4Military Veterans and the Deputy Minister of Defence andMilitary Veterans, as the executive authorities, continued touphold and fulfil the mandate of the DOD as spelt out in theConstitution of the Republic of South Africa. The primaryresponsibility of the Ministry of Defence was to provide politicaldirection to the DOD enabling a contribution to globalpeace, security and stability through the deployment of theSANDF in peacekeeping missions and the participation indefence-related bilateral and multilateral engagements.The period under review began with the SANDF gearing upfor the increased demand on internal deployment capabilitiesto support the South African Police Service (SAPS). Duringthe 2010 FIFA Soccer World Cup the SANDF (OperationKGWELE) supported the SAPS by deploying on average4 573 members per day, ensuring the maintenance of a safeand secure South Africa. The success of this event proved tothe sceptics and the international community that SouthAfrica could successfully host world class major events. TheSANDF also provided internal assistance during the xenophobiaincidents, public service strikes, the opening ofParliament and the voter registration security for the 2011local elections. The SANDF successfully partnered with theSAPS by providing personnel, helicopters and fixed wing aircraftfor the crime combating operation DUTY CALLS duringthe festive season.In compliance with the Cabinet decision for the SANDF toreturn to border safeguarding, the Minister directed theSANDF to undertake this function effectively. Phase 1 of thedeployment was completed by the 1 st April 2011; the deploymenthas now moved into Phase 2 to cover additional areasidentified for border safeguarding.Internally, in order to ensure full functionality of theDepartment of Military Veterans (DMV), the MilitaryVeterans Bill was presented and approved during December2010. An analysis and determination of the strategic resourcerequirement of the DMV was completed and presented to theMinister at the Ministerial Work session in March 2011. TheMTEF budget costing and MTEC funding requirements, asapproved by the Minister, were articulated in a CabinetMemorandum and presented to Cabinet on 16 March 2011.The Minister is in the process of formulating departmentalregulations and policies in support of the approved Bill.The Minister appointed a new Secretary for Defence and anew Chief Financial Officer during the year under review.The Minister directed the DOD to resolve all audit qualificationsin pursuance of the consolidation of good corporategovernance, effective administration and accounting. TheDOD was able to reduce the seven audit qualifications downto one in the FY2009/10. During this review period, focussedattention has been given to addressing the remaining complexasset management qualification.The term of Interim Defence Force Service Commission(IDFSC) came to an end in April 2011 and a permanentDefence Force Service Commission (DFSC) will be appoint-ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C Eed during the course of the coming financial year. The promulgationof the Defence Amendment Act (Act 22 of 2010)provides for the establishment of the permanent DFSC. Themandate of the DFSC will be, amongst others, to focus on theimprovement of conditions of service of SANDF members.The Minister provided direction on the defence policyreviews. This included, the Defence Review, the repositioningof the Defence Secretariat, the National Youth Service(NYS) programme and the repositioning of the DefenceIndustry. Consultative processes will be followed during thecoming year prior to the above being submitted to the relevantParliamentary Committees for consideration andapproval.O b j e c t i v e s a n d M e a s u r e sThe Ministerial Direction Subprogramme provides politicaldirection to the DOD to ensure the defence of South Africa bymeeting the ordered defence commitments and providingappropriate defence capabilities.O u t p u t D e t a i lTable 1.3 below provides details of the Ministerial DirectionSubprogramme outputs, performance measures and targets asspecified in the DOD Strategic Plan FY2010/11.Table 1.3: Ministerial Direction Output Detail for the FY2010/11OutputMinisterialdirection to theDepartment ofDefence(DOD)Defence policyAdvisoryproducts andservicesPerformanceIndicatorsAlignment of theDOD's prioritiesand activitieswith Government'sProgrammeof Action andCabinet LekgotlaresolutionsTimeliness, relevantand qualitydefence and securitypolicyupdates, inputsand proposalsAnnual TargetFull implementationof Minister's prioritiesProvide the nationalpolicy frameworkon Defence mattersfor the approval ofCabinet andParliament anddirect and overseethe implementationof such policy in theDepartmentActual Target AchievementFull implementation ofMinister's prioritiesA work team commencedwith the drafting of the newDefence Strategy. Variouspapers on research subjectsrelated to the analysis of thestrategic environment havebeen completedProgress on other defencepolicy reviews: DefenceReview, the repositioning ofthe Defence Secretariat, theNational Youth Service and theRepositioning of the DefenceIndustryReason(s) for Over/Under AchievementAchievedA moratorium wasplaced on the drafting ofthe new DefenceStrategy. Later during theperiod under review, theMinister instructed thatwork in this regardshould proceedEffect of Programme / Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The Subprogramme Ministerial Direction successfully provided political direction to the DOD to ensure the defence ofSouth Africa by meeting the ordered defence commitments and providing appropriate defence capabilities.ANNUAL REPORT FY 2010/2011 5

D E P A R T M E N T O F D E F E N C ES t r a t e g i c O v e r v i e wB y t h e S e c r e t a r y f o r D e f e n c e ,D i r e c t o r -G e n e r a l ,M s N . Z . H . M p o f uI n t r o d u c t i o nAccelerated service delivery, good governance and the institutionalisationof the Government's theme of doing things differentlyto achieve more with less; have been identified asimportant success factors in the attainment of our strategicobjectives. Within the context of many achievements, theDOD is grappling with a limited budgetary allocation.Comprehensive plans of action have been generated andimplemented in order to prioritise defence objectives andoptimise performance accordingly. In pursuit of the DOD'smandate to provide, prepare and employ defence capabilitiescommensurate with the needs of South Africa, a multitude ofdecisive interventions aimed at improving the quality of livesof all the people of South Africa, the region, the continent andthe globe were successfully implemented and are reportedherein.In the year under review, underperformance and revised targetswere mainly as a result of severe underfunding of therenewal of the Landward Defence Programme. The integrationand operationalisation of the Strategic Defence Packageswere also affected by limited funding. The poor state of facilities,IT infrastructure obsolescence in the financial, logisticsand human resource domains as well as prime mission equipmentmaintenance negatively impacted the efficient andeffective functioning of the DOD. The loss of scarce skillsprior to specific interventions aimed at retention, led to ashortage of critical personnel resulting in the overburdeningof the remaining capacity especially in the training environment.P e a c e M i s s i o n sIn pursuit of the Government's support for peace, security andstability and to enhance the diplomatic initiatives in the regionand the continent, the DOD continued to play a pivotal roleduring the year under review. On average a total of 2 238SANDF members including 148 Reserves, were deployed intwo Peace Support Operations in the Democratic Republic ofCongo (DRC) and Sudan, as well as three general militaryassistance operations in the DRC, the Central AfricanRepublic (CAR) and the rendering of support to theMozambique Government to curb piracy in the Mozambique6The Secretary for Defence,Ms N.Z.H. Mpofu.Channel. Operation TEUTONIC in DRC was successfullycompleted and terminated at the end of October 2010. TheSA Army successfully trained 1 780 FARDC members andhanded soldiers over to the Minister of Defence of the CARafter completing a planned cycle of training in October 2010.S u p p o r t t o t h e P e o p l eDomestically, several missions in support of otherGovernment departments continued with the emphasis onsafety and security support, search and rescue on sea and landand borderline control. A total of 556 099 man days wereused during internal operations. The deployment of theSANDF for border safeguarding ensured that 20 613 illegalimmigrants were apprehended, 263 criminals were arrested,21 stolen vehicles were recovered, 14 weapons were recovered,18 livestock were recovered and various narcotics wereconfiscated including 807kg marijuana (dagga), 137g tik-tikand 122 mandrax tablets. The SANDF also provided safetyand security support during the 2010 FIFA World Cup andANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C Epublic service strike.E n t r e n c h i n g t h e n e w D e f e n c eD i s p e n s a t i o nThe promulgation of the Defence Amendment Act (Act 22 of2010) provided for the establishment of the permanentDefence Force Service Commission (DFSC). The mandate ofthe DFSC will be amongst others, to focus on the conditionsof service of SANDF members. Support structures to facilitatethe mandate of the DFSC are to be completed during theFY2011/12.M i l i t a r y V e t e r a n sThe Department of Military Veterans was proclaimed inDecember 2009. The organisational structure of the departmentwas approved by the Minister on 28 May 2010, subsequentto the approval, a determination of functions was doneby the Minister of Public Service & Administration. TheDirector-General of the Department has been appointed andother senior members of the department are in the process ofappointment. This senior staff appointment process will becompleted in the early part of FY2011/12.In order to realise the mandate of the department, the MilitaryVeterans Affairs Bill has been drafted. The costing of militaryveterans benefits contemplated in the Bill was considered andapproved by Cabinet. The implementation of the Act willoccur soon after the Bill has been passed by Parliament andaccented to by the President. It is, however, important to notethat the full realisation of the object of the Military VeteransAffairs Bill will be largely dependent on the availability ofthe necessary budget for both the Department of MilitaryVeterans and the budget allocation in other governmentdepartments towards the benefits for military veterans. It iswith this understanding that the Department of MilitaryVeterans accords this matter the priority status it deserves.The costing of military veterans' benefits, which include theNon-statutory Forces (NSF) pension, as contemplated in theBill is currently being considered by Cabinet. The finalisationof the necessary budget for the NSF pension will enablethe payment of the NSF pension to the deserving militaryveterans.N a t i o n a l Y o u t h S e r v i c eThe DOD drafted the MOU with the Department of RuralDevelopment and Land Reform on co-operation regardingNational Youth Service (NYS), with particular reference to apilot programme. Participation in meetings with variousyouth stakeholders in order to consult on the DOD's conceptfor NYS (i.e. the National Youth Development Agency, politicalparties, religious organisations, etc) was undertaken. AConference that took place in Egypt during late October 2010was organised by the International Association for NYSwhere the DOD was represented; thereafter a report with recommendationswas submitted to the Sec Def. On 04 November2010 a presentation was submitted to the Minister onthe DOD's concept for NYS. The DOD has also participatedin various social responsibility activities which have assistedin the improvement of the living conditions of the youth inthe previously disadvantaged communities.During the period under review, the concept paper on NYSwas completed and at the same time a pilot programme inBloemfontein took place with a group of 500 recruits undergoingtraining. A further 1 500 recruits will be trained and areplanned for FY2011/12, 2 000 recruits planned forFY2012/13 and 6 000 recruits planned for FY2013/14.P r o v i s i o n o f S k i l l sThe Military Skills Development System (MSDS) wasimplemented in January 2003 with the aim to provide theSANDF with military trained human resources as requiredfor force preparation and force employment specifications. Itforms the DOD's primary contribution to youth developmentand alleviates unemployment and poverty by preparingyoung people between the age of 18 and 26 years for rewardingcareers either in the SANDF or for decent employment inthe broader public and private sectors. The MSDS is a twoyearcontract based service system and is the main feeder systemfor the Regulars and Reserves.Since the inception of the MSDS, 33 536 youths participatedin the system of the SANDF. Of the total intake, 8 542 arecurrently serving in the MSDS, 6 770 have separated fromthe SANDF, of whom 4 821 are serving in the Reserves, and18 224 translated to the Regulars where they are undergoingadvanced training in various disciplines and are being utilisedaccordingly. The results of implementing the MSDS are bestviewed from the vantage point of rank-age compliance: only10.8% of Privates were in the age group 18 to 24 years old inthe year 2000 compared to 55% currently. The MSDS also isa feeder system, at entry levels, of scarce skills and criticalmusterings. Since its inception, 6 172 youths were employedin critical musterings i.e. air space control, aircrew, combatnavy, engineer, medical professional, nursing, technical andtechnical air. Thus, the MSDS significantly contributes, atentry level, to the sustainment of scarce skills and criticalmusterings.The young men and women who emerge after MSDS serviceare on the whole, much more mature, disciplined, servicedelivery orientated, career orientated and patriotic than onewould normally expect from young people who have justcompleted high-school. Through the MSDS, the SANDFcontinues to invest directly in South Africa's most importantasset, our youth. In support of the government outcome onjob creation, the DOD plans to create job opportunities for5 700 young South Africans per year through the MSDS.ANNUAL REPORT FY 2010/2011 7

D E P A R T M E N T O F D E F E N C ER e v i t a l i s a t i o n o f t h e R e s e r v e sThe current Reserves strength has increased to 26 147 ofwhich approximately 84% are from the previously disadvantagedgroups. About 12 000 Reserves are calledup per year.This has enabled the DOD not only to utilise the Reserves inexternal deployment but also to deploy them on the borderswhere they are achieving success. During the reporting year,the Defence Act was amended to make it compulsory for theReserves to respond to call-ups not only in times of war butalso in times of need. This has provided the ability to investin the development of the Reserves.B o r d e r S e c u r i t yAs per the 2009 Cabinet decision, the SANDF has assumedthe border safeguarding function. In execution of this taskunder Operation CORONA, the SANDF has adopted aphased strategy. The first phase of the borders betweenZimbabwe and South Africa and the second phase of the borderbetween Mozambique and South Africa have been rolledout. The last phase of the strategy with regard to the Lesothoand South Africa border will be completed by FY2012/13.The safeguarding of the borders of South Africa is one of thekey responsibilities of government which helps protect thepeople and the economy of the country from illegal crossingsof people as well as the illegal exportation and importation ofgoods. In the short period that the SANDF has been on theborders, numerous illegal activities have been stopped andprevented. The positive outcomes achieved by the SANDFwith the border safeguarding function will escalate as theSANDF's presence at borders is expanded.P o l i c y R e v i e wDuring September 2010, a work team finalized the developmentof the Defence Strategy Conceptual Framework as aprelude to the development and drafting of the DefenceStrategy. The Defence Strategy Conceptual Framework waspresented to the Minister during March 2011 for her considerationand approval. As a further input to the development ofthe Defence Strategy, two detailed staff papers pertaining togeostrategic environment and defence scenarios as key elementsof the Defence Strategy are in the process of development.It is envisaged that the Defence Strategy will be consideredfor approval by the Minister during the course of theFY2011/12 after a public/stakeholder consultation processhas been finalized. In addition to the above, a staff paper onthe National Security Strategy is in the process of developmentwithin which the National Security Strategy Policyanchors impacting on Defence are to be identified.D e f e n c e W o r k s C a p a b i l i t yThe reversal of the DOD deteriorating infrastructure requiresboth additional financial allocations and increased technicalcapacity. In order to address the declining state of defenceinfrastructure, the DOD will be finalising discussions withthe National Department of Public Works on the establishmentof the Defence Estate Management mechanism whichwill result in DOD progressively exiting from its currentarrangement on Property and Facilities Management with theDepartment of Public Works. In pursuance of this objectiveand the roll-out of the Defence Works Capability, which is anin-house capacity to maintain and repair defence facilities,will be implemented in the coming financial year. On 01April 2011 Project LEBAKA officially merged with ServiceCorps and existing Facility Management elements to form theDefence Works Capability. The new formation is aimed atproviding efficient, effective and economical operationallevel facility management in support of the strategy andobjectives of the DOD. The macro-structure of the DefenceWorks Capability was approved by the Minister of Defenceon 23 March 2011. Subsequently, the A/CSANDF issued animplementation instruction for the establishment of theDefence Works Formation with effect from 01 April 2011.C l e a n A u d i tThe DOD has reduced audit qualifications from 16 to sevenin FY2008/09. In the FY2009/10 the DOD introduced specificinterventions to strengthen its internal controls and toimprove financial processes. These interventions furtherresulted in the reduction of qualifications from seven to one.During FY2010/11 particular focus was paid on addressingthe one very complex remaining asset management qualification.Other matters of emphasis include the continuousenhancement of financial management and internal controls.International experience shows that the asset managementchallenge is not unique and is inherent in most DefenceForces across the World. International benchmarking is beingpursued with the Auditor General, the Accountant Generaland the Standing Committee on Public Accounts (SCOPA) inorder to implement a sustainable solution to this challenge.Notwithstanding this, the DOD has made significant progressin putting action plans in place to address the qualificationon tangible and intangible assets.8ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EThe audit on tangible assets has registered progress, with theaudit of the immovable assets, such as properties and thelarge assets including transportation and equipment, alreadycompleted.In order to sustain the achieved audit results, the DOD has,during the period under review, embarked on a process toensure robust internal controls. The Accounting Officer andChief Financial Officer of the DOD were appointed witheffect from 01 April 2010 and 01 May 2010 respectively.These appointments have contributed to stability in the DODaudit process. To complement this, the Minister has appointedthe Compliance Officer in the Ministry to focus on DODcompliance with all applicable regulatory frameworks.FY2011/12 will see further consolidation of the DOD financialmanagement and internal control system through theimplementation of the DOD Internal Audit Function. The oneremaining audit qualification in the area of defence assetsremained a focus in the reporting year.(N.Z.H. MPOFU)SECRETARY FOR DEFENCE:DIRECTOR-GENERALANNUAL REPORT FY 2010/2011 9

D E P A R T M E N T O F D E F E N C EPART 2: STRATEGIC DIRECTIONChapter 2S t r a t e g i c P r o f i l e a n dD e f e n c e O b j e c t i v e sI n t r o d u c t i o nThe Department of Defence Annual Report FY2010/11accounts for the performance against the approved DODStrategic Business Plan for the period 01 April 2010 to 31March 2011. The DOD outcomes have been fully alignedwith government policy enhancing national, regional andglobal security goals through the existence of combat-readydeployable defence capabilities.In the year under review, the DOD bid farewell to a numberof people who have contributed significantly to where theDOD is. The DOD bid farewell to C SANDF, General G.N.Ngwenya who has been appointed Ambassador of SouthAfrica to Angola. In addition, the Board of ARMSCOR andthe Commissioners of the Interim Defence ForceCommission (IDFSC) terms of office ended in April 2011.The forthcoming period will mark the new dispensation withnew appointments; the DOD welcomed the newChairpersons of the Portfolio Committee on Defence (PCD)and of the Joint Standing Committee on Defence (JSCD).The DOD has made significant progress in many areasagainst priorities set. SANDF troops were deployed outsidethe country in various peace missions and internally, on severalmissions in support of other Government departments.The emphasis on internal deployment was on safety and securitysupport, search and rescue on sea and land and bordersafeguarding. Impressive achievements were made onimproving the service conditions of SANDF members andmilitary veteran's matters; policy reviews. Attention is furthergiven to the decline in defence infrastructure and cleaning upthe audit report. Notwithstanding the limited budgetary allocation,the DOD is committed to executing its function interms of its mandate.The DOD comprises of the Defence Secretariat which isestablished in terms of section 204 of the Defence Act and theSANDF established in terms of section 200(2) of the interimconstitution.V i s i o nEffective defence for a democratic South Africa.M i s s i o nTo provide, manage, prepare and employ defencecapabilities commensurate with the needs of SouthAfrica, as regulated by the Constitution, national legislationand Parliamentary and Executive direction.This will be provided through the proper management,provision, preparedness and employment of defencecapabilities that are in line with the domestic andglobal needs of South Africa.M i s s i o n S u c c e s s f a c t o r sFor the DOD to achieve its mission, it is essential that it ismanaged strategically. As part of this process, certain factorsthat are fundamental to achieving success were identified.The Mission Success Factors of the DOD are as follows:National consensus on DefenceExcellent strategic directionExcellent resource managementEffective combat forces and support forcesProfessionalism in the conduct of operationsC o n s t i t u t i o n a l a n d L e g i s l a t i v eM a n d a t e o f t h e D O DSuccessful implementation of the transformationprocessThe DOD derives its mandate primarily from Section 200(2)of the Constitution of the Republic of South Africa, 1996 (Act108 of 1996). This mandate is given substance by the DefenceAct, 2002 (Act 42 of 2002), the White Paper on Defence(1996), the Defence Review (1998) and delegated legislation.T h e D O D S h a r e d V a l u e S y s t e mThe DOD has committed itself to organisational values thatare rooted in individual values, codes of conduct and unitcohesion.10ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EO r g a n i s a t i o n a l V a l u e sIn delivering the defence mission, the DOD will follow theprinciples set out below:Service standards. Service standards are based on cleardirection and strong leadership. Our priority is, and shallalways be, to maximise our defence capability and ourcontribution to peace and security. We shall maintainhigh standards of excellence and professionalism ineverything we do.Excellence. We shall build on what we do well andactively foster a climate of success. We shall invest inour people and encourage innovation. We shall providethe right incentives and recognise individual and teamcontributions.Ethics. We shall adopt and encourage reasonable workingpractices. We shall not be deflected by the demandsof vested interests. We shall foster fairness and trustworthinessin all that we do. We shall not ignore difficultissues.Openness and transparency. We shall ensure clearcommunication and better understanding. We shallensure that our messages are understood. We shall listento clients' concerns and make sure we understand whatthey are saying to us. We shall aim to create a climate oftrust and transparency in our decision-making.Consultation rooted in effective and efficient partnershipand collaboration. We shall encourage andimprove links with other Government departments andother relevant organs of state. We will strengthen partnershipswith industry, allies and the community atlarge. We shall promote collaboration within the DOD,harmonise activities and systems and, where sensible,share knowledge.People. We shall uphold the values as espoused in thefounding principles of the Constitution and furtherexpressed in the Bill of Rights.Teamwork. Within the DOD we are one team andembrace one purpose. We shall debate issues fully,whilst rigorously representing our individual responsibilities.Our overriding aim, however, is to reach conclusionsthat are best for the entire department and then toact on them.Accountability. We shall create a learning organisationin which all employees seek and share knowledge andinformation, whilst committing themselves to personalgrowth. We shall lead by example and influence othersto follow these principles. We shall be sensible to thedemands we make on people and recognise the uniquecommitments they make.Discipline. We shall consistently strive towards upholdinga high level of discipline. We shall individually andcollectively rebuild the profile and image of the defenceestablishment as the best-disciplined profession.I n d i v i d u a l V a l u e sPatriotismLoyaltyHuman dignityProfessionalismIntegrityLeadershipAccountabilityD e f e n c e S t r a t e g i c O b j e c t i v e s a n dP r e c o n d i t i o n sThe following strategic objectives and preconditions, identifiedas being critical to the achievement of the DOD's mission,were incorporated into strategic plans at all levels:The execution of defence commitments as ordered andfunded by Government.The provision of contingency-ready and cost-effectivedefence capabilities as specified by approved policy.Sound management of the Department.The administration of the DOD within the prescripts ofthe law, the regulatory framework and Government policy.The assurance of sustainability, the continuous improvementof output quality and the reduction of the cost ofDOD processes, as well as the accounting thereof.The assurance of the continuous quality improvement ofpeople in the DOD.The assurance of quality command and managementinformation in the DOD.The assurance of continuous quality improvement ofDOD equipment and facilities.D e f e n c e O u t c o m eThe DOD delivered all outputs as specified in the DODStrategic Plan for the FY2010/11 in order to achieve therequired outcome of 'Effective defence for a democraticSouth Africa'.ANNUAL REPORT FY 2010/2011 11

D E P A R T M E N T O F D E F E N C ET h e D O D M e d i u m T e r m F o c u sAs directed by Government's imperatives, the DOD focusedon a mandate-driven force design and structure in order tomeet the ordered commitments stipulated in the Constitution,of defending and protecting the Republic ofSouth Africa (RSA) and its people;support Government's diplomatic initiatives on theContinent and in the Region; andprovide support to other Government departments asand when required.These are met in accordance with the principles of internationallaw, the MTSF priorities, the Government Programmeof Action (POA) and the Medium Term ExpenditureFramework (MTEF) of Government.Whilst primarily focussed on its constitutional obligation, theDOD embraces Government initiatives and priorities to combatpoverty and underdevelopment through various socioeconomicdevelopment programmes. These are regarded as anecessary condition for lasting peace and stability nationally,sub-regionally and continentally. Such alignment shall entailthatdefence capabilities of the DOD are enhanced and maintained;peace, security and confidence-building in the SADCsub-region and on the entire Continent are promotedthrough constructive dialogue aimed at nurturing sounddefence diplomatic relations and projecting SouthAfrica's foreign policy principles and objectives;Government policy on the resolution of conflicts peacefullythrough recognised international instruments andmechanisms will be supported by deploying the SANDFin international peace missions; andGovernment required diplomatic engagements are supportedthrough participation in multilateral institutionssuch as the Southern African Development Community(SADC), African Union (AU) and United Nations (UN).D e f e n c e O u t p u t sThe outputs provided by the DOD to Government are as follows:Defence commitments, which include:12operations that are ongoing in nature, and forwhich plans and financial provision can be made inadvance;operations that must be executed during the yearand, if unforeseeable, for which no provision hasbeen made; andjoint and multinational exercises required to prepareforces for operations.Landward defence capabilitiesAir defence capabilitiesMaritime defence capabilitiesMilitary health support capabilitiesDefence diplomacy, which includes:the deployment of defence attachés;the servicing of defence-related Memoranda ofUnderstanding (MOUs); andparticipation in the defence structures of the UN,the AU and SADC.The provision of Defence-related policy and MinisterialadviceCryptographic security services for Government departmentsThe National Codification BureauThe provision of appropriate framework for sound policy,direction and advice and the systemic monitoringand evaluation thereofThe provision of defence capabilities that can respondto the needs of South Africa within the evolving policyand national priority trajectory that characterise a developmentalstateThe DOD's performance in achieving these outputs isdetailed in Chapters four to eleven of this document.D O D A l i g n m e n t w i t h C a b i n e t a n dC l u s t e r P r i o r i t i e sThe DOD is highly involved in the Justice, Crime Preventionand Security (JCPS) Cluster and has a secretariat responsibilityin the International Cooperation, Trade and Security(ICTS) Cluster since the appointment of the Minister ofDefence and Military Veterans as Chairperson of the Cluster.The DOD also actively participates in the Governance andAdministration (G&A), Economic and Skills Clusters as partof the Government Programme of Action. In the period underreview, the DOD's role in the international affairs as far as thedefence diplomacy and security sphere are concerned hasbeen enhanced. In so far as Cluster participation is concerned,the DOD achieved the following:Was represented in the South African Delegation to theregional meeting of 32 states during an African group ofexperts seminar in the Cluster Munitions Conventionheld in Pretoria 30 April 2010,In line with the government outcome; "All people in SAare and feel safe" and subsequent to a Cabinet decisionto confirm the long-term responsibility of the SANDFfor border safeguarding, the SANDF continued to collaboratewith the SAPS in its crime fighting efforts.ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EThe signing of the Performance Agreement between thePresident and the Minister was facilitated to commencethe implementation of Outcome 11. This process wasfollowed by a delivery agreement which defined theoutputs, key activities and inputs that described rolesand responsibilities against timelines and budgets ofICTS Cluster departments.Defence-related and security inputs were provided tothe Presidency and to various Clusters for incorporationinto the State of the Nation Address (SONA).In collaboration with other organs of state, the DODcontributed substantially towards the achievement ofnational priorities and provided progress reports on obligationsarising from Clusters on time.S e r v i c e s R e n d e r e dThe services rendered by the DOD are detailed in Chaptersfour to eleven of this document.N e w S e r v i c e s o r O u t p u t s t o b eS c a l e d U pNew Services/Outputs to be Scaled Up are described inAppendix E of this document.S e r v i c e s D i s c o n t i n u e d / S c a l e dD o w n o r S u s p e n d e dServices Discontinued/Scaled Down or Suspended aredescribed in Appendix E of this document.L o s s e s a n d D a m a g e sDuring the year under review, the Minister’s task team investigatedmatters of efficiency and effectiveness with respect tothe utilisation of resources. A report containing 134 recommendationswas presented and adopted for implementationduring the coming financial year. These initiatives will significantlylimit losses and damages in the years to come.Excluding the write-offs of the portion on the long outstandingunauthorised expenditure and other prescribed debts, thisexpenditure was reduced from Rm49,5 to Rm 30,5.E v e n t s a f t e r t h e A c c o u n t i n g D a t eThere were no events after the accounting date.ANNUAL REPORT FY 2010/2011 13

D E P A R T M E N T O F D E F E N C EPART 3: PROGRAMME PERFORMANCEChapter 3T h e D e f e n c e V o t eA I M O F T H E V O T EThe aim of the Department of Defence (DOD) is to defendand protect the Republic of South Africa, its territorial integrityand its people, in accordance with the Constitution and theprinciples of international law regulating the use of force.M a i n P r o g r a m m e sThe outputs of Defence are provided through the programmesas indicated in Table 3.1.Table 3.1Defence Budget Programme StructureProgrammeAdministrationForce EmploymentLandward DefenceAir DefenceMaritime DefenceMilitary Health SupportDefence IntelligenceGeneral SupportPurposeConducts the policy development, management and administration of thedepartmentSuccessfully conduct all operations, as well as joint interdepartmental andmultinational military exercises.Provide prepared and supported landward defence capabilities for the defence andprotection of South AfricaProvide prepared and supported air defence capabilities for the defence andprotection of South AfricaProvide prepared and supported maritime defence capabilities for the defence andprotection of South AfricaProvide prepared and supported military health capabilities and services for thedefence and protection of South AfricaProvide a Defence intelligence and counter-intelligence capabilityProvide general support capabilities and services to the departmentD E F E N C E V O T E 2 1Details of the final DOD Medium Term Expenditure Framework (MTEF) Allocation are reflected in the Defence Vote for theFY2010/11, according to Table 3.2Table 3.2Defence Vote for the 2010/11 MTEFDefence Vote2010/11R'0002011/12R'0002012/13R'000Defence Vote per Main ProgrammeAdministration3 247 0803 617 1513 991 745Force Employment1 908 8701 997 1422 086 315Landward Defence9 982 89210 431 22411 062 075Air Defence6 059 1267 910 4918 361 920Maritime Defence2 179 8222 320 0152 574 21414ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 3.2Defence Vote for the 2010/11 MTEF (continued)Defence VoteMilitary Health SupportDefence IntelligenceGeneral SupportTotal Expenditure Estimates2010/11R'0002 770 215631 1493 936 17930 715 3332011/12R'0002 961 306665 9614 028 06633 931 3562012/13R'0003 201 260698 8994 410 09136 386 519Defence Vote per Economic ClassificationCurrent PaymentsTransfers and SubsidiesPayment for Capital AssetsTotal Expenditure Estimates23 099 0016 830 147786 18530 715 33324 858 9148 616 545455 89733 931 35626 725 2568 815 707845 55636 386 519B U D G E T A L L O C A T I O NThe total Defence budget for the 2010/11 MTEF is reflected in Table 3.3.Table 3.3: Total Defence BudgetDefence Vote2010/11 MTEF2010/11R'00030 715 3332011/12R'00033 931 3562012/13R'00036 386 519A d d i t i o n a l F u n d s R e q u e s t e dDuring the course of FY2010/11 MTEF process, the DOD submitted policy proposals for additional funding.Details of submitted policy proposals for additional funding for the FY2010/11 are reflected in Table 3.4.Table 3.4 Policy Proposals for Additional FundingPolicy ProposalSANDF Remuneration SystemUpgrade of Landward Defence SystemsM & R of the Operational Vehicle FleetProcurement of Critical AmmunitionReplacing the Operational Ambulance FleetOperating the SDP AircraftOperating the SDP VesselsContinuation Training for ReservesImplementation of the DEIS Master PlanTotal Policy Proposals2010/11R'000904 781543 870150 000100 0003 000224 500186 070135 864351 8942 599 9792011/12R'000959 0681 628 128158 000105 000244 800299 100204 677142 521397 9914 139 2852012/13R'0001 016 6132 081 330165 000110 0000344 100225 144149 505461 8894 553 581ANNUAL REPORT FY 2010/2011 15

D E P A R T M E N T O F D E F E N C EA d d i t i o n a l F u n d s R e c e i v e dAfter the 2010/11 MTEF process was completed, the DOD only received additional funding as reflected in Table 3.5. Only twoof the policy proposals were partially funded, while the department at the same time still had to institute efficiency savings.Table 3.5Additional Funding Received by the DODAdditional Funding ReceivedSANDF Remuneration SystemMilitary Skills Development SystemOffice for Military Veterans AffairsLandward Defence ModernisationStrategic Defence Procurement ProgrammeCompensation of Employees AdjustmentBaseline Efficiency SavingsSavings from the A400M Contract TerminationAFB Waterkloof Upgrade ReschedulingTotal Policy Proposals2010/11R'000600 00050 00020 0000(502 878)422 721(446 792)(2 067 022)250 000(1 673 971)2011/12R'000730 00070 00030 000100 0000470 316(626 672)(1 010 912)(250 000)(487 268)2012/13R'000850 000100 00030 000500 000200 000510 142(624 367)(1 445 170)0120 605D E P A R T M E N T A L R E V E N U E , E X P E N D I T U R E A N D O T H E R S P E C I F I CA S P E C T SC o l l e c t i o n o f D e p a r t m e n t a l R e v e n u eThe general improvement in revenue management processes is a direct consequence of Operation Clean Audit. The substantialincrease in Transfers received was a result of the collection of arrears from the United Nations reimbursements for foreigndeployments.The sources of revenue are reflected in Table 3.6 below.Table 3.6Sources of RevenueEconomic ClassificationTax revenueNoneNon-tax revenueSale of goods and services other thancapital assetsFines, penalties and forfeitsInterest, dividends and rent on landSales of capital assetsFinancial transactions in assets and liabilitiesTransfers receivedTotal Revenue Received2007/08ActualR'00000551 855172 4841 1571 710128 91322 894224 626551 8552008/09ActualR'00000629 390193 5531 0581 398122 06620 662290 653629 3902009/10ActualR'00000699 949209 6063 7242 75019 481236 097228 291699 9492010/11TargetR'00000902 466299 4973 6152 47352 684348 515195 682902 46620010/11ActualR'00000689 687263 9894 4592 62823 068144 777250 767689 688% Deviationfrom Target00-23.58%-11.86%23.35%6.27%-56.21%-58.46%28.15%-23.58%16ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EC O N D I T I O N A L G R A N T S A N DE A R M A R K E D F U N D SNo Conditional Grants and Earmarked Funds were reportedfor the FY2010/11.T R A N S F E R P A Y M E N T S F O R2 0 1 0 / 1 1T r a n s f e r P a y m e n t sThe DOD provided transfer payments to the following institutionsduring the course of FY2010/11:The Armaments Corporation of South Africa Ltd(ARMSCOR) to subsidize them in their mission to meetthe acquisition, maintenance and disposal needs of theDOD and other clients in terms of defence materiel,related products and services. Audited financial statementsfor FY2009/10 were submitted according to paymentconditions.Table 3.7Transfer Payments for FY2010/11The Safety and Security Sector Education and TrainingAuthority (SASSETA), which acts as the Sector EducationalTraining Authority (SETA) for Defence, to subsidizetheir administrative expenditure in terms of theSkills Development Act, No 97 of 1998. Audited financialstatements for FY2009/10 were submitted accordingto payment conditions.The Reserve Force Council to subsidise it in their missionto obtain and secure community and private sectorsupport for the Reserves and to maintain a sound relationshipand communication between the Reserves, theMinister of Defence and the SA National DefenceForce. Audited financial statements for FY2009/10 weresubmitted according to payment conditions.The St John's Ambulance Brigade to provide accreditationfor training of Defence members and make theirmembers and equipment available to be called-up by theSA Military Health Service (SAMHS) during times ofnational disaster and emergency. Audited financial statementsfor FY2009/10 were submitted according to paymentconditions.The Special Defence Account (SDA) to acquire, procureand develop armament and technology. Audited financialstatements for FY2009/10 were submitted accordingto payment conditions.To Defence Force members that are being separatedfrom the department through the Mobility ExitMechanism in terms of the employment benefits due tothem.The estimated expenditure and actual amounts transferred forthe FY2010/11 are reflected in table 3.7 below.InstitutionSpecial Defence AccountArmaments Corporation of South Africa LtdRegular Force Medical Continuation FundSocial BenefitsSafety and Security Sector Education and Training Authority(SASSETA)Reserve Force CouncilSt John's Ambulance BrigadeTotal Transfer PaymentsEstimated ExpenditureR'0003 010 320737 510220120 60914 4084,8273603 888 238Amount TransferredR'0003 010 320737 5100120 59214 4084 8273603 888 017ANNUAL REPORT FY 2010/2011 17

D E P A R T M E N T O F D E F E N C ED E P A R T M E N T A L E X P E N D I T U R E F O R F Y 2 0 1 0 / 1 1Table 3.8DOD Expenditure for FY2010/11ProgrammeAdministrationForceEmploymentLandwardDefenceAir DefenceMaritime DefenceMilitary HealthSupportDefenceIntelligenceGeneral SupportTotalVoteR '0003 247 0801 908 8709 982 8926 059 1262 179 8222 770 215631 1493 936 17930 715 333TotalAdditionalAppropriationR '000170 132373 326(973 326)(522 709)178 479279 35425 464196 538(272 742)AdjustedAppropriationR '0003 417 2122 282 1969 009 5665 536 4172 358 3013 049 569656 6134 132 71730 442 591Shiftingof FundsR '000000000000VirementR '00035 703(16 739)286 002(47 481)(8 385)100 765(22 760)(327 105)0FinalAppropriationR '0003 452 9152 265 4579 295 5685 488 9362 349 9163 150 334633 8533 805 61230 442 591ActualExpenditureR '0003 452 9152 265 4579 295 5685 488 9362 349 9163 150 114633 8533 805 61230 442 371VarianceR '0000000022000220O V E R V I E W O F T H E S E R V I C ED E L I V E R Y E N V I R O N M E N T F O RT H E F Y 2 0 1 0 / 1 1A d d i t i o n s t o M a i n A p p r o p r i a t i o nThe Defence Vote was decreased by Rm272.742 toRbn30.442 through the Adjustments Vote for the following:Unforeseeable and Unavoidable Expenditure.Unforeseeable and Unavoidable Expenditure to Rm225:An additional Rm200 was allocated for the support providedto the South African Police Service (SAPS) duringthe hosting of the 2010 FIFA World Cup.An additional amount of Rm25 was allocated for supportprovided during the 2010 public service strike.Other Adjustments. Other adjustments of Rm497.742.A d j u s t m e n t s d u e t o s i g n i f i c a n ta n d u n f o r e s e e a b l e e c o n o m i c a n df i n a n c i a l e v e n t sAn additional Rm352.400 has been allocated for higher personnelremuneration increases than the main budget providedfor, including the increased housing allowance, as follows: Programme 1: Administration Rm 28.172 Programme 2: Force Employment Rm 20.032 Programme 3: Landward Defence Rm 149.412 Programme 4: Air Defence Rm 49.199 Programme 5: Maritime Defence Rm 29.789 Programme 6: Military Health Support Rm 43.754 Programme 7: Defence Intelligence Rm 4.340 Programme 8: General Support Rm 27.702S e l f F i n a n c i n g E x p e n d i t u r e :R m 1 4 9 . 8 5 8Departmental revenue was collected from selling equipmentand spares procured through the Special Defence Account.This amount will be used for special defence activities as follows: Programme 3: Landward Defence Rm 13.396 Programme 4: Air Defence Rm135.197 Programme 5: Maritime Defence Rm 1.265F u n d s s h i f t e d w i t h i n a V o t e t of o l l o w a f u n c t i o n s h i f t w i t h i n t h es a m e V o t eProgramme 8 General Support: Rm38 936 has been receivedfrom Programme 3 following the migration of the WorksRegiment.Declared Savings. Programme 4: Air Defence. Savings ofRbn1 due to delays in the strategic defence procurement programmehave been declared.18ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ERoll-overs. No roll-overs were requested from theFY2009/10 as a very small balance was available at the endof the 2009/10 financial year.R E A S O N S F O R A D D I T I O N S T OO R V I R E M E N T B E T W E E N M A I NA P P R O P R I A T I O N A L L O C A T I O NN a t i o n a l T r e a s u r y ( N T )A p p r o v e d :The reallocation of Rm6 within Programme MaritimeDefence from Goods and Services to Transfers andSubsidies to Departmental Agencies and Accounts foran additional transfer to the ARMSCOR Dockyard.The reallocation of Rm50 from the Special DefenceAccount to Programme Military Health Support for theprocurement of medical equipment. The reallocation of Rm180.244 to increaseCompensation of Employees from various Programmeswithin the Defence operating allocation in order to partiallyfund the implementation of the OccupationalSpecific Dispensation for engineers and the newDefence Reserves Salary Dispensation.The reallocation of Rm210 to increase Compensation ofEmployees from Programme General Support(Rm111.800 Capital Assets), from Programme MaritimeDefence (Rm9.500 Transfers and Subsidies(Households)) and from various other Programmes'budget (Rm8. 700 Goods and Services).The reallocation of Rm41 from Programme GeneralSupport (Capital Assets) to Programme Air Defence(Goods and Services) to fund the shortfall as a result ofthe increased number of VVIP flights.T h e A c c o u n t i n g O f f i c e ra p p r o v e d :The reallocation of Rm4 from Programme ForceEmployment to Programme Administration (ChiefHuman Resources) for services rendered by the Centrefor Conflict Simulation to Joint Operations Division.The reallocation of Rm2.697 from Programme GeneralSupport (Departmental Support) to Programme MilitaryHealth Support for the establishment of a Private PublicPartnership (PPP).The reallocation of Rm11.790 from Programme GeneralSupport (Command and Management InformationServices) to Programme Force Employment for the procurementof UHF digital tactical radio equipment forutilisation during border control by the SANDF.The reallocation of Rm5.378 from Programme AirDefence to Programme Administration (AcquisitionServices) for the payment of ARMSCOR to set-up asystem of Intellectual Property (IP) Management.The reallocation of Rm117 from Programme GeneralSupport (Joint Logistic Services) to ProgrammeAdministration (Ministerial Direction and PropertyManagement) for the Multi Media Campaign (Rm8)and Municipality Services (Rm109).The reallocation of funds between Programmes withinthe Defence Budget to defray expenditure in respect ofauthorised losses, Compensation of Employees and tobalance the expenditure for the FY2010/11.D E S C R I P T I O N O F S I G N I F I C A N TD E V E L O P M E N T S E X T E R N A L T OT H E D O D T H A T M A Y H A V EI M P A C T E D E I T H E R O N T H ED E M A N D F O R T H E D O D ' SS E R V I C E S , O R T H E D O D ' SA B I L I T Y T O D E L I V E R O N T H ES T R A T E G I C P L A NThe following unforeseeable and unavoidable PSOs activitiesled to the reprioritisation of activities; Support to the SAPS during the hosting of the 2010FIFA World Cup.Support to the SAPS during the 2010 public servicestrike.The higher personnel remuneration increases than whatwas provided for in the main budget.C A P I T A L I N V E S T M E N T ,M A I N T E N A N C E A N D A S S E TM A N A G E M E N T P L A NC a p i t a l I n v e s t m e n t sDetails of Building projects currently in progress forFY2010/11 are reflected in table 3.9 below.ANNUAL REPORT FY 2010/2011 19

D E P A R T M E N T O F D E F E N C ETable 3.9: Projects Currently in Progress for FY2010/11LocationBloemfonteinVariousLadysmithLangebaanLangebaanPretoriaVariousPhalaborwaProject DescriptionUpgrading of 3 Military HospitalUpgrading of facilities for disabledpersonnelInstallation of Burglar bars, securitydoors and gates in buildingsConstruction of Boat ParkConstruction of 20 married quartersUpgrading of facilities for disabledpersonnelInstallation Burglar bars, security doorsand gates in buildingsConstruction of new ammunitionstorage facilityProgress StatusUnder ConstructionUnder constructionUnder ConstructionUnder ConstructionPlanningConstructionPlanningAccording to planExpected CompletionDateMarch 2012OngoingMarch 2012March 2012July 2013OngoingOngoingSeptember 2011M a i n t e n a n c eThe Current Maintenance Backlog. The DOD made fundsavailable and requested NDPW to address the maintenancebacklog on identified facilities. During the reporting period,the NDPW changed both the scope and procurement processesresulting in non-execution of projects and thereby increasingthe backlog. However, the DOD has increased the fundsfor the upcoming years in order to decrease the maintenancebacklog.Actual Maintenance Expenditure. The DOD expresseddissatisfaction with the resources allocated by NDPW formaintenance projects. The figures provided by the NDPW on25 February 2011 are as follows: Projected expenditure Rm112.8 Funds committed Rm101.2 Expenditure Rm81.7Addressing the Maintenance Backlog. Insufficient progresswas made by NDPW to address the maintenance backlogcreating an increased in the backlog. In addressing theproblem, the NDPW has embarked on a RefurbishmentProgramme in place of the Repair and MaintenanceProgramme (RAMP), which will address the backlog duringthe MTEF period. The Development of the Defence WorksCapability will impact positively in years to come.Table 3.10:Major Maintenance Projects Undertaken during FY2010/11LocationPretoriaPretoriaCape TownDunnottarMiddelburgSimon’s TownJohannesburgMafikengPretoriaProject Description1 Military Hospital: Repair and Maintenance to hospital.AFB Waterkloof: Repair and Maintenance to facilities2 Military Hospital: Repair and Maintenance to hospital35 Engineer Support Regiment: Repair and Maintenanceto facilities4 SA Infantry Battalion: Repair and Maintenance to facilitiesRepair and Maintenance to Naval BaseRepair and Maintenance to facilitiesRepair and Maintenance to facilitiesRepair and Maintenance to facilitiesReasonConstruction phaseConstruction phaseConstruction phaseConstruction phaseConstruction phaseConstruction phaseConstruction phaseConstruction phaseConstruction phase20ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EP r o j e c t s C a r r i e d F o r w a r dDetails of projects carried forward to FY2010/11 from the previous reporting year are reflected in Table 3.12 below.Table 3:11 Projects carried forward to FY2010/11 from the previous reporting yearLocationBloemfonteinDurbanDurbanLadysmithLangebaaanLangebaanPretoriaVariousProject DescriptionUpgrading of 3 Military HospitalInstallation of Burglar bars security doors and gates inbuildingsUpgrading of facilities for disabled personnelInstallation of Burglar bars, security doors and gates inbuildingsConstruction of Boat ParkConstruction of 20 married quartersUpgrading of facilities for disabled personnelInstallation Burglar bars, security doors and gates inbuildings.ReasonMulti-year projectMulti-year projectMulti-year projectMulti-year projectMulti-year projectPoorly managed by NDPWMulti-year projectMulti-year projectN e w P r o j e c t s t o C o m m e n c e I n F Y 2 0 1 1 / 1 2Details of New Projects to Commence in FY2011/12 are reflected in Table 3.12 below.Table 3.12:New Projects to commence in FY2011/12LocationGISFRS/Assets Register SystemVariousVariousProject DescriptionGeographic Information SystemMerging of the two systemsSecurity Projects (10 projects)Disability Projects (2 projects)Tendering Process. National Treasury compliant procurementprocesses are followed by the department.A S S E T M A N A G E M E N TA s s e t M a n a g e m e n t R e g i s t e rThe CSIR was appointed to verify all State immovable assetsutilised by the DOD in order to update the DOD ImmovableAsset Register.During the period under review, updates to the movable assetsystems were done so that the DOD can report accurately onassets in the future. The population of the register is beingdone according to the Asset Register Project Plan, which ismonitored on a bi-weekly basis.As part of National Treasury requirements for proper managementof assets, the DOD has developed interfacesbetween logistic and financial information management systemsso as to ensure compliance with reporting on accrualsand additions in the Annual Financial Statements.I m m o v a b l e A s s e t M a n a g e m e n tP l a nEnvironmental awareness within the DOD has to beimproved in order for the current initiatives to be successfulthroughout the Department.The facility management capability has played a vital role inthe DOD in ensuring that property, buildings and real estatesupport DOD objectives. The lack of capacity of NDPW hasnegatively impacted on this function. In order to solve thisproblem, the Minister approved the proposed MacroStructures for the establishment of the Defence WorksCapability. This has been done by merging Project LEBA-KA, the Service Corps and facility elements of the LogisticsDiv with effect from 1 April 2011. This will enable the DODto address facility matters with its own capabilities.ANNUAL REPORT FY 2010/2011 21

D E P A R T M E N T O F D E F E N C EThe DOD has also developed a short and long-term plan toaddress audit qualifications. In the short-term the focus is onthe utilisation of the existing systems (OSIS and CALMIS) toestablish an asset register, whereas the long-term plan focuseson the implementation of a single integrated defence logisticsinformation management system.immovable assets improves.Reduced Demand for new Immovable Assets. Thereduced demand is expected to continue and excessproperties will be disposed of.The immovable asset management plan has ensured:Accountable, Fair and Transparent Management ofImmovable Assets. During the review period, anImmovable Asset Register was compiled and the finalisationprocess will take place in the next financial year.Effective, Efficient and Economic use of ImmovableAssets. Condition assessments were done to assist indetermining the maintenance requirements and estimatedbook value of immovable assets.Reduced overall Cost of Service Delivery. Consultationfees will decrease as soon as the condition ofG e n e r a l A s s e t M a n a g e m e n tI s s u e sThe threat with respect to the high volume of unserviceableammunition in the SANDF is being managed through regularinspections to determine any problematic degradation of theammunition resulting in the immediate disposal of any problemstock.The DOD has adopted a proactive approach to resolvingissues so as to minimise negative impacts. Management interventionsand teamwork between stakeholders has positivelyaffected outcomes.22ANNUAL REPORT FY 2010/2011

Chapter 4D E P A R T M E N T O F D E F E N C EP R O G R A M M E 1 :A d m i n i s t r a t i o nI N T R O D U C T I O NThe Administration Programme is aimed at facilitating theoverall management of the DOD ensuring that the responsibilitiesof the Accounting Officer are achieved. This programmeensures that norms and standards throughout thedepartment are developed and complied with. Broadly, someof the responsibilities included in this program are the provisionof human resource support, financial and legal services,governance, the provision of risk and compliance expertise,the determination of working methods and procedures thatimprove internal controls and the accuracy of informationprovided.The Administration Programme provides services in the formof ministerial direction emanating from the office of theMinister of Defence as well as departmental direction fromthe office of the Secretary for Defence and Chief of the SouthAfrican National Defence Force (CSANDF). Administrationconsists of the following subprogrammes;MinistryDepartmental Direction*Government Information Technology Officer (GITO)*Corporate Staff OfficeReligious ServicesDefence Reserve DirectionDefence Foreign RelationsOffice AccommodationThe annual reports of the individual subprogrammes are presentedbelow in the respective order of appearance in theDOD Strategic Plan for the FY2010/11.P U R P O S EThe Defence Administration Programme ensures the overallmanagement, administration and policy development of theDOD.O U T P U T SThe main outputs of the Defence Administration Programmeare ministerial and departmental direction, defence policyadvice, strategic direction, corporate planning and reporting.Policy and Planning (Defence Policy, Strategy andPlanning)*Financial Services*S U B P R O G R A M M E : M I N I S T R Y( s e e C h a p t e r 1 )Human Resource Support Services*Legal Services*Acquisition Services (Defence Matériel)*Defence Supply Chain Integration*Defence International Affairs*In addition, the following subprogrammes of the AdministrationProgramme fall within the responsibilities of theC SANDF:Military Policy, Strategy and Planning OfficeInspection ServicesCommunication ServicesSANDF Command and ControlS U B P R O G R A M M E : D E P A R T M E N -T A L D I R E C T I O NO v e r v i e wDuring the period under review, Ms N.Z.H. Mpofu wasappointed as the Secretary for Defence (Sec Def). The mainresponsibilities remained to provide strategic direction to theDOD through various actions and interventions. These, interalia, included timeous decision-making on strategic matters,effective consideration and processing of documents, attendanceof high-profile Cabinet Makgotla, Cabinet Clustermeetings and chairing the various DOD command bodymeetings. Furthermore, the Sec Def continually ensuredalignment of the strategic plans of the DOD to Governmentprogrammes and outcomes. The Sec Def ensured that the* Defence SecretariatANNUAL REPORT FY 2010/2011 23

D E P A R T M E N T O F D E F E N C EDOD honoured all its engagements and obligations with theParliamentary Committees and oversight bodies includingthe National Treasury and Auditor-General.One of the roles of Defence, as contemplated in theConstitution, is to contribute to security, peace and stabilityengagements in the region and on the continent. In pursuit ofdefence diplomacy, the Sec Def undertook visits to and hostedvarious countries, strengthening bi-lateral relations anddefence co-operation. The Sec Def participated in numerousdefence related discussions held at multilateral organisationslike SADC, the African Union and the United Nations.As part of the responsibility of the DOD to support the peopleof South Africa, the Sec Def engaged other governmentdepartments and stakeholders to improve co-operation. Theseefforts have had a positive outcome in streamlining defencebusiness processes with those of other state departmentsenhancing co-operative governance. Some of the more noteworthyachievements were; the DOD collaboration withother government departments during the public servicestrike, xenophobia attacks, the hosting of the 2010 FIFAWorld Cup and the security challenges during the festive season.During the period under review, through DepartmentalDirection the DOD achieved the following:The Department of Military Veterans is functioning, itssupporting structures have been approved and legislationpassed.The non-statutory Force Military Veterans Pension, ascontemplated in the Bill has been approved byParliament.Improvement of the SANDF members service conditionsand the promulgation of legislation to establish thepermanent Defence Force Service Commission.The reduction of audit qualifications from seven to onein the FY2009/10 and special focus on the remainingasset management qualification in the reporting year.The ongoing development of the Balanced Score Card(BSC) performance measurement tool within the DODhas been enhanced through the development of theDOD Strategic Planning Framework (SPF) during theyear under review. The BSC has been aligned with thecorporate Level 0 and 1 performance information ascontained within the SPF and approved by the Minister.The translation of the noted SPF performance informationinto the electronic COGNOS system in conjunctionwith SITA will see the incremental roll-out of electronicallymanaged performance information during the comingyear.As instructed by the Minister of Defence, the DODStrategic Plan (SP) and Annual Performance Plans (APP)were separated into plans for the SANDF and theDefence Secretariat respectively. These plans were successfullytabled in parliament during March 2011.In support of the government initiatives on job creation,the DOD has developed plans to create job opportunitiesfor 5 700 young South Africans per year through theMilitary Skills Development System (MSDS).The SANDF has successfully assumed the border safeguardingfunction and has adopted a three phased strategyfor the rollout. The last phase of the strategy will becompleted during FY2012/13.A concept paper on National Youth Service has beendeveloped and a pilot programme implemented inBloemfontein with a group of 500 recruits undergoingtraining.The Military Ombudsman Bill was approved by Cabineton 10 November 2010.The Defence Amendment Act (Act 22 of 2010) promulgatedin December 2010 regulates the obligation to servefor Reserve Force members.The Defence Strategy Conceptual framework has beencompleted and is ready for consultation with Cabinet.The Repositioning of the Defence Industry proposal,including DENEL, is ready for consultation.Two Peace Support Operations (PSOs) were conductedunder the Memoranda of Understanding (MOUs). 1Two General Military Assistance Operations were conductedunder the signed MOUs.O b j e c t i v e s a n d M e a s u r e sThe Departmental Direction Subprogramme provides departmentaldirection to the DOD to ensure the effective, efficientand proper conduct of defence activities in accordance withlegislation and policy. The Sec Def is the Accounting Officerand the Principal Policy Advisor to the Minister of Defence.The Sec Def, in conjunction with the Chief of the SANDF,guide the provision of strategic direction to the DOD. TheSubprogramme provides corporate direction to the DODthrough the following:1At the time of publishing the MOUs were in the process of being signed.24ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EProvision of strategic direction to the DOD.Policy advice to the Minister of Defence.Management of DOD Parliamentary activities andengagements.Management of DOD participation in Cabinet Clustersas well as the implementation of DOD obligations arisingthere from.Management of defence policy in the DOD.Management of National Convention Arms Control(NCACC) support activities.O u t p u t D e t a i lTable 4.1 below provides details on the DepartmentalDirection Subprogramme outputs, performance measuresand targets as specified in the DOD Strategic PlanFY2010/11.Table 4.1: Departmental Direction Output Detail for the FY2010/11OutputPerformanceIndicatorAnnual TargetActual TargetAchievementReasons for Over/Under AchievementDefencepolicy adviceto theMinister ofDefenceDepartmentaldirection tothe DODDirectivesissued toDOD-alignedGovernmentprogrammeof actionEnsure tradein conventionalarms isconducted incompliancewith theNCACCEnsure theinternal regulatoryprocesses ofthe NCACCare compliedwithDefence policies alignedwith GovernmentprioritiesTimeliness, relevanceand quality of policyadvice to the Minister('client')Quality of directives tothe Department andplanning guidelines tothe Department as awholeTimeous and relevantguidelines provided tothe DODAudit, inspections andinvestigations of registered/ unregisteredarmaments-related companiesnationally, withrespect to trade in saidarmamentsAudits and attendance ofScrutiny Council (SC)meetings. Guidance toNCACC on internalprocessesMinisterial directives tothe DODComplete clientsatisfactionTimeous directives tothe Department andthe delegation offinancial authority tothe C SANDFEvaluate the implementationof structure foraccounting and reportingby C SANDF andmake improvementsFull implementation ofdirectives aligned toPOAContinued audits,inspections and investigationsContinued attendance ofSC and NCACC meetingsand conductingaudits of role-playersinvolved in the internalprocesses of theNCACCMinisterial directivesprovided and implementedin the DODRelevant Policy advice providedto the Minister ontimeTimeous directives providedto the DOD and thedelegation of financialauthority provided to theC SANDFThe implementation ofC SANDF accounting andreporting structuresevaluatedGovernment programmeof action translated intoDOD priorities; planningguidelines; and the implementationthereof monitoredand evaluated8 audits and 100 inspectionswere conducted onindustry and other roleplayersAll scheduled SC meetingwere attendedRegular NCACC meetingscommenced from August2009 after the appointmentof the new CommitteeAchievedAchievedAchievedAchievedAchievedNational audits couldnot be conducteddue to a moratoriumplaced by theMinister on ForeignvisitsAchievedEffect of Programme / Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The Subprogramme Departmental Direction successfully provided departmental direction to the DOD to ensure theeffective, efficient and proper conduct of defence activities in accordance with legislation and policy.ANNUAL REPORT FY 2010/2011 25

D E P A R T M E N T O F D E F E N C ES U B P R O G R A M M E : G O V E R N M E N TI N F O R M A T I O N T E C H N O L O G YO F F I C E R ( G I T O )O v e r v i e wIn accordance with the Division's strategic objective to provideInformation and Communication System (ICS) strategicdirection to the DOD, the Control Plan for the implementationof the DOD Information Strategy was developed. TheICS Control Plan controls the implementation of the DODInformation Strategy to enable the systematic improvementof the effectiveness and interoperability of the ICS of theDOD. ICS policies are promulgated in accordance with theICS Policy Development plan. The risk identified within theDivision regarding possible non-realisation of promulgatedICS Policy was mitigated and managed by an ICS PolicyDevelopment Plan executed by the Command andManagement Information System (CMIS) Division by callingup Reserve Force members to provide the capacity andcapability.To improve inter-operability and interconnectivity betweeninformation and communication systems within and externalto the DOD, the following ICS Strategic Studies were completedand approved. These include the following:Defence Information and Communication SystemStandard on De-Militarised Zone (DMZ)Defence Data and Information Standard for Data warehouseStrategic Study on the use of Virtualisation TechnologiesDefence Information and Communication SystemStandard for Key Public InfrastructureDuring the period under review, another main concern was tosystematically improve compatibility and interoperability ofthe ICS of the DOD through collaboration with the NationalTreasury in preparation for the rollout of the IntegrationFinancial Management System (IFMS).The Human Resources (HR) Module, led by the Departmentof Public Service & Administration (DPSA), was rolled outwith a formal launch in February 2011. The DOD is currentlyundergoing training and testing of the said module whichis intended to replace the current HR application within theNT's set timelines. The DOD and the NT are finalising discussionson the lifting of the moratorium for the developmentof the DOD unique logistics systems and is the lead site forthe implementation of Asset Management and ProcurementModules of the IFMS.It is important to note that the current Information andCommunication Technology (ICT) inventory is not integratedand has a high level of obsolescence. Although efforts aremade to optimise the existing ICT systems, the current budgetonly allows for a progressive approach that is linked to theavailability of financial resources as well as the ability of theSITA and Defence ICT system providers to provide solutionsin accordance with the requirements of the DefenceEnterprise Information System (DEIS) Master Plan schedule.O b j e c t i v e s a n d M e a s u r e sThe GITO is responsible for Strategic governance of theDEIS. The Division seeks to ensure the delivery of effectiveand efficient strategic direction in order to manage informationas a strategic resource and provide guidelines to ensurethat the right, accurate and quality information is distributesecurely to support decision-making in achieving the department’sobjectivesThe DEIS Management Division provides norms and standardsfor:Providing sound Information and CommunicationSystem direction and advice;Developing consensus on Information and CommunicationSystem;Providing sound policy and administration; andSystemic monitoring and evaluation.O u t p u t D e t a i lTable 4.2 below details on the GITO Sub-programme's outputs,performance measures and targets as specified in theDOD Strategic Plan FY2010/11.26ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 4.2: GITO Output Detail for FY2010/11OutputPerformanceIndicatorAnnualTargetActual TargetAchievementReasons for Over/Under AchievementTo providestrategicdirection forthe managementof informationas astrategicresource intheDepartmentTo managethe alignmentof the InformationandCommunication SystemPolicy RegulatoryFrameworkPromulgated DODInformation StrategyPercentage ofInformation andCommunication SystemPolicy aligned toRegulatory Framework100%100%DOD Information Strategy wasreviewed, approved and promulgatedon 18 January 2010 by the PDSCControl Plan for the implementation isin its second draftCompleted: Strategic Study on Defence Informationand CommunicationInfrastructure Reference Model Strategic Study on Defence Dataand Information ReferenceModel Bulletin on Data Management Defence Information and CommunicationSystem Standard onDe-Militarised Zone (DMZ) Defence Application ReferenceModel Defence Data and InformationReference Model Defence Data and InformationStandard for Data warehouse Strategic Study on the use ofVirtualisation Technologies Defence Information andCommunication SystemStandard for Public KeyInfrastructureThe DOD ICS Policy Developmentand Maintenance Plan is completedand await promulgation andimplementationThe Request for Bid to obtain theRegulatory Framework IT solutionwas completed and it will be advertisedthrough the SITA procurementprocess in April 2011Availability ofServices andDivisions for fullcollaborationFinal approval of therole clarifications andresponsibilitiesbetween the GITOand C CMIS as wellas the approval ofthe CMIS Div(Domino) structureThe ICS RegulatoryFramework EnablerProject was placedon hold for threemonths to ensureproper interactionwith other role-playersand informationsystemsEffect of Programme / Subprogramme Output Achievement of ENE Vote 21 Purpose, Objectives and Measures.The Sub-programme GITO successfully provided a command and management information system that is fullyintegrated and aligned with Government's Executive Information management system.ANNUAL REPORT FY 2010/2011 27

D E P A R T M E N T O F D E F E N C ES U B P R O G R A M M E : P O L I C Y A N DP L A N N I N G ( D E F E N C E P O L I C Y ,S T R A T E G Y A N D P L A N N I N G )O v e r v i e wIn the period under review, the Division successfully achievedmost of its core objectives notwithstanding resource-relatedchallenges. The Division continued to provide excellent servicesby ensuring that policy, strategic planning and reportingwere done according to national guidelines, policy and relatedprescripts and in line with the Medium Term StrategicFramework (MTSF).During the period under review, fundamental work was doneto realise the announcements made in the Minister's DefenceBudget Vote Speech (2010) concerning a review of thedefence policy framework. The Division led a departmentalprocess to develop a concept future Defence Policy, DefenceStrategy and Force Design, which was tailored throughengagements with the Minister.Various other policy research initiatives that were conductedincluded the development of a draft framework for a MilitaryOmbud, a framework for Defence inputs to the NationalSecurity Strategy and the development of a DOD ResearchUnit.In support of the priority of the Minister, the Division led theprocess of developing the South African Maritime SecurityStrategy with a particular focus on the linkages with thedeployment of the SANDF inside Mozambique and in internationalwaters to effect SADC Maritime Security. TheMaritime Security Strategy was presented to Cabinet andapproved for engagement at the SADC level.All ongoing defence deployments were approved for continuancein the period under review. New authorisations wereprocessed for matters including, inter alia, the deployment ofthe SANDF to monitor and deter piracy activities in theSouthern African region of the Indian Ocean, as well asdeployments to evacuate South African nationals from theIvory Coast, Libya and Sudan.Following the National Treasury prescripts regarding planningand reporting on performance, the Division has developedthe DOD Strategic Planning Framework (SPF), whichprovides guidelines for the development of the Strategic Plans(SPs) and Annual Performance Plans (APPs) in the DOD. TheDOD plans for the FY2010/11 were subjected to technicalevaluation, which ensured their alignment with DOD outputsand outcomes. In order to allow for statutory reporting of thetwo Defence institutions that have complementary mandatesthat are serviced differently, whilst not compromising thesecurity and sensitivity of the SANDF information, theDefence Secretariat and SANDF Strategic Plans were separatedand successfully tabled in Parliament on 8 March 2011.In line with the statutory requirements on the submission ofperformance reports, the Division ensured that the DODAnnual Report FY2009/10 was tabled in Parliament inSeptember 2010, and that quality DOD Quarterly Reportswere approved and submitted to the Executive Authority andthe Auditor-General within the prescribed timelines.The ongoing development of the Balanced Score Card (BSC)within the DOD has been enhanced through the developmentof the DOD Strategic Planning Framework (SPF) during thereporting year. The BSC has aligned itself with the corporateLevel 0 and 1 performance information as contained withinthe SPF and approved by the Minister. The translation of thenoted SPF performance information into the electronic COG-NOS system in conjunction with SITA will see the incrementalroll-out of electronically managed performance informationduring the coming financial year.As part of its mandate to provide expert advice and supportservices to decision makers, the Division played a criticalrole in the development of the Strategic Plans and AnnualPerformance Plans of the Public Entities and Organs of statereporting to the Minister of Defence and Military Veterans.The Division also assisted in finalising the concept paper forthe National Youth Service, which was presented to a studygroup on peace and security on 4 November 2010.In order to comply with Government policy on enterprise riskmanagement which stipulates that all enterprise risks shouldbe identified, assessed / appreciated and contingency measuresbe considered. The Division ensured the development ofthe Enterprise Risk Management (ERM) Framework, whichwas approved by the Secretary for Defence in December2010. Excellent progress was made regarding the communicationof the ERM philosophy within the Departmentthrough ERM training workshops, assisting Services/Divisions to ensure that risk management was encapsulatedin their day-to-day activities, the establishment of theStrategic Risk Management Committee, and to address Riskmanagement issues in relevant strategic forums.In ensuring the effective regulation of arms transfer in SouthAfrica, the Division provided administrative and secretarialsupport to the National Conventional Arms ControlCommittee (NCACC). During the reporting period, about 6587 permits were issued in this environment. The Divisionfurthermore ensured that the operational commitments of theDOD were authorised by Cabinet and the President asrequired by the Constitution, National Legislation and theHandbook on the Executive Acts of the President.The Division provided timely and relevant reports and policyinputs to ensure appropriate DOD representation and participationin the DG Cluster system. The Division representedthe DOD in the South African Delegation to the regionalmeeting of 32 states for an African group of experts seminaron the Cluster Munitions Convention held in Pretoria on 30April 2010.28ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EIn the area of integrated management systems, the BusinessProcess Management DODI was promulgated. The draft policyon the Macro Structure Management is in the corporateapproval process. About 15 Organizational Structure reportswere assessed for compliance through the Critical DesignReview process. 60 reports were implemented on theStructural Management Control System (SMCS) and 700requests were implemented on the Organization andInformation System (OIS). 317 Management InformationReports were provided to clients. Systems changes as peruser requirement on DOD unit closure have been finalizedand implemented. A total of 1 087 posts/job evaluationreports were quality controlled and moderated.O b j e c t i v e s a n d M e a s u r e sThe Subprogramme Defence Policy, Strategy and Planningprovides the DOD with defence policy, strategy and planningcapabilities through the following:Defence strategic business architecture, planning guidance,plans, risk and performance management andreports.Defence policy advice and policy support to the DOD.Provision of secretariat and administrative support to theNCACC and its sub-committees.O u t p u t D e t a i lTable 4.3 below provides details of the Policy and PlanningSubprogramme outputs, performance measures and targets asspecified in the DOD Strategic Plan FY2010/11.Table 4.3: Policy and Planning Output Detail for the FY2010/11OutputPerformanceIndicatorAnnualTargetActual TargetAchievementReasons for Over/Under AchievementTo provideexpert products,adviceand supportservices onNationalDefence andSecurityPolicyQuality, policy decisionsupport is given accordingto decision-makers'requirementOperational commitmentsproducts preparedper requirement accordingto law for authorisationby defence decisionmakersTimeous and relevantreports and policy inputsto ensure appropriateDOD representation andparticipation in the DGCluster system in accordancewith GovernmentobjectivesDepartmental policiesare well developedmaintained, and accessibleaccording to departmentand GovernmentobjectivesConsistent provisionof comprehensive,expert and credibleadvice is giventimeously to defencedecision makers forthe achievement ofthe Defence MandateNew and currentDefence deploymentsare properly mandatedas required by lawand duly adjusted orterminated whenrequiredDefined DOD responsesand quality positionsare providedtimeously Defencedecision makers arekept updated on clusteractivities Integrationof Governmentpriorities into departmentalstrategicdirectionPolicy Board operatesand takes effectivecontrol over policyproducts according toits constitutionProfessional advice wasgiven and acknowledged perinstance to higher authoritiesTimely Presidential authorisationand Cabinet approvalsecured for each mission.Terminated defence operationalcommitments with allaspects of the terminationcovered in terms of theMinisterial DirectivesDOD representation and participationin cluster meetingsPOA reports submittedaccording to defined timelinesInternal processes, proceduresand controls in theDOD are regulatedAchievedAchievedAchievedAchievedANNUAL REPORT FY 2010/2011 29

D E P A R T M E N T O F D E F E N C ETable 4.3: Policy and Planning Output Detail for the FY2010/11 (continued)OutputTo provideeffectiveDODStrategicManagementProvide effectiveand efficientAdministrativeSupportto theNationalConventionalArms ControlCommittee(NCACC)PerformanceIndicatorDefence Strategyaligned withConstitutional Mandateand Government prioritiesTimeliness, relevanceand quality of DODStrategic Plan andAnnual PerformancePlanTimeliness, relevanceand quality of DODperformance reportsBusiness processes andstructures aligned withDepartmental requirementsAll enterprise risks areidentified, assessed/appreciated and contingencymeasures areconsideredArms transfers conductedin line with theNational ConventionalArms Control Act andGovernment policyApplications dealt within terms of the determinationof the NCACCin the context of the ActAnnual TargetDefence Strategy willbe presented for considerationandapproval by Clusters,Cabinet andParliament by October2010Strategic Plan andAnnual PerformancePlan aligned torequirement ofPresidency, NationalTreasury as per prescribedtimelinesDOD Performancereports are providedas per GovernmentrequirementsDOD structures thatsupport the DefenceStrategyRisk ManagementFramework promulgatedTimely issuing of permitsand professionalservice in terms ofapplicable standardsTimely processing ofapplications forAuthorization interms of applicableActActual TargetAchievementThe draft Defence Strategy hasbeen completedDOD Overarching Statement,Def Sec SP and the APP alignedwith Government prescriptson planning weretabled and presented to Parliamenton 09 March 2011 and 23Mach 2011 respectively. Laterthe SANDF SP and APP weretabled as classified documentsDOD Annual Report forFY2009/10 was tabled inParliament in September 2010.The DOD Quarterly Reportswere submitted to theExecutive Authority andAuditor-GeneralDOD structures that supportthe Defence Strategy arereviewedDOD ERM Framework waspromulgatedA total of 6587 Permits wereissued on time2 applications were receivedand processed accordinglyunder the Regulation ofForeign Military AssistanceAct (Act No 15 of 1998)Reasons for Over/Under AchievementAchievedAchievedAchievedAchievedAchievedAchievedAchievedEffect of Programme / Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The Subprogramme Defence Policy, Strategy and Planning successfully provided defence policy, strategy and planningcapability to the DOD.30ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ES U B P R O G R A M M E : M I L I T A R YP O L I C Y , S T R A T E G Y A N D P L A N -N I N GO v e r v i e wThe outputs of the Military Policy, Strategy and PlanningOffice (MPSPO) have contributed positively to the achievementof the C SANDF strategic planning objectives and targetsin compliance with the government timelines and thegoals of the DOD.During the period under review, the MPSPO took the lead atdefining the SANDF Readiness Index Model UserRequirement and has developed the preliminary ReadinessIndex Strategy. The results of the Readiness Index Model willbe used for the Balanced Scorecard Measures. The Officealso developed the SANDF Strategic Plan in accordance withthe guidelines from National Treasury and identified theStrategic Outcomes and Outputs, which the SANDF willendeavour to achieve over the MTEF 2011/12 to 15/16 period.These have also been incorporated into the SANDFAnnual Performance Plan FY2011/12.The Office completed and delivered the EnvironmentalAnalysis of the DOD for the period FY2012/13 toFY2014/15 as an input to the strategic planning process ofthe DOD. This process identified clearly formulated StrategicIssues and Enterprise Risks for the DOD.O b j e c t i v e s a n d M e a s u r e sThe MPSPO is part of the Policy and Planning subprogramme2 of the Administration Programme and is to adviseon national security policy matters and coordinate the strategicdirection process by developing, formulating, monitoringand adapting defence policy, strategy and plans in accordancewith national policy to enable the effective, efficient andproper conduct of defence activities.O u t p u t sTable 4.4 below provides details of the Military Policy,Strategy and Planning Office Subprogramme outputs, performancemeasures and targets as specified in the DODStrategic Plan FY2010/11.Table 4.4: Military Policy, Strategy and Planning Office Output Detail for the FY2010/11OutputPerformanceIndicatorDegree to which SANDFstrategic planning andreporting objectives aremet according to CSANDF DirectivesAnnualTargetSANDF plans andreports submitted intimeActual TargetAchievementSANDF plans and reportswere submitted timeouslyReasons for Over/Under AchievementAchievedManaging thestrategic /control andprogrammingprocess of theSANDFProviding amilitarystrategisingcapabilityand servicefor the Chiefof theSANDFThe degree of alignmentof the MilitaryStrategy with NationalSecurity Strategy imperativesand the successfulimplementation thereofMonitoring of compliancewith MilitaryStrategy in theSANDFCompliance with MilitaryStrategy in the SANDF wasmonitoredAchievedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievements of the Military Policy, Strategy and Planning Office's Outputs have contributed positively to theAdministration Programme's Purpose to execute the DODs overall management, administration and policydevelopment.2In the ENE, the Policy and Planning allocation includes funding for the Corporate Staff Office as well as the Military Policy,Strategy and Planning Office.ANNUAL REPORT FY 2010/2011 31

D E P A R T M E N T O F D E F E N C ES U B P R O G R A M M E : F I N A N C I A LS E R V I C E SO v e r v i e wDuring the reporting period, the Financial ManagementDivision played a pivotal role in ensuring that the DOD continuedto uphold the principles of best practice of financialmanagement. The Division ensures an environment in whichthe prescribed deliverables in the utilisation of resources arein line with the principles in the Public Finance ManagementAct (PFMA) of efficiency, effectiveness and economy. Theprescribed products include, inter alia, the Estimates ofNational Revenue and Expenditure, the Annual and InterimFinancial Statements and the internal Financial Managementinformation and other related reports used for decision-makingin the DOD such as the monthly Early Warning Reportson expenditure and cash flow as well as those that are submittedto the National Treasury.In support of the Minister of Defence's commitment to cleaningup the audit report, the Division coordinated the achievementof an improvement in the audit outcomes during theyear under review, within the auspices of the Operation CleanAudit project whose central aim is to produce positive annualaudit outcomes for the DOD. Sustainable mitigation plansof action have been put in place to ensure that the negativeaudit outcomes of the past years do not recur and that the onlyoutstanding asset management audit qualification is alsoeliminated.During the year under review, the Division has worked hardat refining departmental financial processes, systems andpolicies with a view to aligning them with the public financemanagement regulatory framework in order to improve servicedelivery. It is planned that in the coming year, anAccounting Manual will be completed to serve as a tool toempower the DOD regarding defence accounting standards.Furthermore, the Division collaborated with other key roleplayersin the analysis of key issues during preparation forDOD appearance before the Parliamentary Committees suchas the Portfolio Committee on Defence (PCD) and theStanding Committee on Public Accounts (SCOPA) on budgetaryand financial aspects of the strategic plan and theAnnual Report. The SCOPA preparation was used to sensitisethe DOD to key risk areas that contribute to the negative outcomesin the financial statements of the DOD, such as irregularexpenditure, fruitless and wasteful expenditure and unauthorisedexpenditure.The Financial Accounting function paid suppliers of goodsand services and remunerated personnel within the determinedtime frames. Financial transactions were recorded andreported as required. Initiatives are in progress to improvepayments and reduce cash in circulation through the introductionof electronic methods of payment, for which a purchasecard is currently under investigation.In the area of budget Management, the Division providedadvice and support in giving effect to both government prioritiesand DOD initiatives within appropriate adjustments duringthe year under review. These initiatives included interalia, general modernisation, MSDS, improved infrastructure,training of Reserves, compensation of employees and peacesupport operations within a limited budget. The Division alsofocussed on improving revenue management by enhancingexisting policies, providing comprehensive monthly datafrom the logistic and personnel feeder systems, despite theiroutdated status. Budget Management also participated in thedevelopment of the IFMS, while at the same time it enhancedthe existing Financial Management system to ensure compliancewith the new economic reporting framework.Despite high staff turnover, the division continued the excellentservice in respect of its mandate. It recruited competentand skilled people to join the Division by employing the HRDivision to speed up the staffing process.O b j e c t i v e s a n d M e a s u r e sTo provide a cost-effective financial management service tothe Minister of Defence, the Secretary for Defence and theChief of the South African National Defence Force within theevolving regulatory framework, by means of a professionalrepresentative civilian financial management corps and anappropriate financial management system.O u t p u t D e t a i lTable 4.5 below provides detail of the Financial ServicesSubprogramme output, performance measures and targetsspecified in the DOD Strategic Plan FY2010/11.Table 4.5: Financial Services Output Detail for the FY2010/11OutputProvide aneffective andefficientFinancialManagementservicePerformanceIndicatorBudget Preparations:Percentage deviationfrom National Treasurybudget guidelinesBudget Control:Percentage of underexpenditureAnnual TargetComplete and accurateDefence estimateof Revenue andExpenditureFully expendedbudgetActual TargetAchievementThe budget proposals weresubmitted on due dates compliantwith the NT Guidelines.All monthly presentations toPDSC were made. No adversefindings on budget weremade.Reasons for Over/Under AchievementAchievedAchieved32ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 4.5: Financial Services Output Detail for the FY2010/11 (continued)OutputEffective andefficient provisionofdepartmentalsupportthrough thetimeous settlementoffinancial obligationsby theDepartment.PerformanceIndicatorFinancial Accounting:Number of adverseaudit findingsFinancial Services(Governance RiskCompliance): Numberof incidences of noncompliance with theframeworkTimeous paymentsclaims against theDepartmentTimeous payments forexternal auditing forservices rendered to thedepartmentTimeous payments oftransaction cost, includingbank chargesAnnual TargetComplete and accuratefinancial statementsCompliance with regulatoryframeworkand appropriate KingreportWithin 30 days ofreceipt of a courtorderWithin 30 days ofreceipt of substantiatinginvoiceWithin 30 days of substantiating documentationActual TargetAchievement1 Audit qualification for2009/10 as issued by AG inAugust 2010Regulatory framework largelycomplied with.100% payment85% payment100% paid within 30 daysperiodReasons for Over/Under AchievementAchievedAchievedAchievedAchievedAchievedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The Subprogramme Financial Services succeeded in providing financial management service to the DOD within the evolvingregulatory framework by means of professional, representative civilian financial management corps supported by anappropriate financial management system.S U B P R O G R A M M E : H U M A NR E S O U R C E S U P P O R T S E R V I C E SO v e r v i e wIn the year under review, the Division remained committed tofocus on establishing programmes to ensure the provision ofhuman resource support in the DOD. This has been achievedby means of the development of the DOD Corporate HRSupport Plan, the provisioning of HR strategic inputs for theDOD Strategic Direction Process, continuous monitoring ofthe implementation of the DOD HR Strategy, provision ofadvice on equal opportunity issues, monitoring of the implementationof equity legislation and monitoring the executionof HR Support Plans and budgets through the monthly HRPlanning Committee.During August 2010, the Division was convened and hostedthe annual DOD Gender Conference with the theme"Together Entrenching Constitutional Imperatives within theDOD". The primary purpose was to report on the progressmade in implementing the Gender Mainstreaming ActionPlan and also to reflect on the Research Findings on the statusof women in the DOD, sixteen years into Democracy.During the period under review, the revised Non-statutoryForces (NSF) Pension Dispensation was approved byCabinet. This makes provision for 100% recognition of theservice period of former NSF members without a requirementto contribute 5%. This, revised dispensation, alsobrought about equity amongst members with more or lessthan 10 years' service to the extent that the 50% recognitionfor members with less than 10 years' service in the previousdispensation was cancelled. The Government EmployeesPension Fund (GEPF) rules for the revised dispensation wereapproved, paving the way for the implementation.The Division has had to embark on an additional project emanatingfrom a Government Instruction to implement PublicService Co-ordinating Bargaining Council (PSCBC)Resolution 7 of 1998 and Resolution 12 of 2002 relating topension restructuring. Command Body sanction has beengranted for the Division to continue with the implementationof these Resolutions within the DOD. Services and Divisionsprovided personnel to form part of a Task Team to serve andassist with the roll-out of the Pension Restructuring Project.Subsequently, the Task Team has held a number of meetings,primarily to discuss strategy, training venues, time framesand funding of the Project that will include countrywidetraining.The Interim Defence Force Service Commission (IDFSC)crafted a Programme of Action and embarked on the followingactivities during the reporting period:The process of advising the Minister on the organisationalstructure of the Defence Force ServiceCommission and the Draft Defence Force ServiceRegulations.ANNUAL REPORT FY 2010/2011 33

D E P A R T M E N T O F D E F E N C EVisited the deployment areas to further evaluate andgather first-hand information from deployed membersregarding remuneration and conditions of service ondeployment in order to present feedback to the Minister.The final report was presented to the Minister and to theJoint Standing Committee on Defence during March2011.The Military Bargaining Council (MBC) and MilitaryArbitration Board (MAB) remained non-functional as noneof the military trade unions met the required threshold of 15000 members, a requirement, as stipulated in Chapter 20 ofthe General Regulations of the SANDF, to be admitted to theMBC. However, the DOD continued to engage the militarytrade unions outside the MBC to discuss issues of mutualinterest.On 11 March 2011, the Registrar of Military Trade Unionsderegistered the South African Security Forces Union(SASFU) for non-compliance with Regulation 42 of theGeneral regulations for the SANDF and Reserve members.SASFU therefore has no collective bargaining and organizationalrights in the DOD.During the year under review, the Minister approved the recommendationfor the implementation of the re-ranking of formerNon-statutory Force members within the FinanceManagement Division. In terms of this recommendation, allmembers who were so disadvantaged will have their ranksrectified and be compensated accordingly.Owing to serious infrastructure shortcomings at the PersonnelServices School, accreditation as a training facility could notbe obtained as a result and the accredited curricula for thetraining of Human Resource Practitioners could not beimplemented. This situation is crippling the entire DOD interms of the training of Human Resource Practitioners.During the FY2010/11 an amount of R600 000 was allocatedtowards the upgrading of the facilities and this project willbe carried to the next financial year.The Division continued to coordinate the management of HRrelated audit queries and with the establishment of a nodalpoint for communication with the Auditor General (AG) onHR related matters, this has already resulted in fewer negativefindings.Despite relatively low staffing levels and financial constraints,the Division has continued to render the expectedoutput during the past financial year. The Division is committedto continuing with its efforts to support the overall strategicgoals of the SANDF and the DOD as a whole.O b j e c t i v e s a n d M e a s u r e sThe Human Resource Strategic Support Services providedirection and policy for the effective management of humanrights and labour relations in the DOD.O u t p u t D e t a i lTable 4.6 below provides details of the Human ResourceSupport Services Subprogramme output, performance measuresand targets specified in the output table in the DODStrategic Plan FY2010/11.Table 4.6: Human Resource Support Services Output Detail for the FY2010/11OutputTransformationmanagementserviceto the DODHuman Resources(HR)StrategicDirection andPlans serviceto the DODHR managementserviceto the DODPerformanceIndicatorCompilation and submissionof an annualDOD Equity ReportAnnual approved DODcorporate HR SupportPlanAnnual reduction ofDOD collective grievancesPercentage completionof Non-Statutory ForcesPension ProjectAnnual TargetOctober120%30%Actual TargetAchievementNovember125%8.26%514/6220 = 8.26%Reasons for Over/Under AchievementAchievedAchievedAchieved. Implementation of theSingle Grievance Procedure hascontributed to a higher targetachievementThe Cabinet Memorandum forthe revised NSF dispensationwas only approved in Dec 2010and the revised GEPF rules forsuch a dispensation was onlyapproved on 16 Mar 2011. Theimplementation can only commenceafter such an approval34ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 4.6: Human Resource Support Services Output Detail for the FY2010/11 (continued)OutputDirected,orchestratedand controlledHRdevelopmentfor the DODProfessionaland non-combat/missioncommonfunctionaleducationtraining anddevelopmentfor the DODLabour marketentryenablementand redeploymentcapability forthe SANDFEstablishmentof afully functionalDepartmentof MilitaryVeteransPeace MissionTrainingCentrePerformanceIndicatorApproved DOD HRDevelopment StrategyImplementation of anoperational Level 2DOD Law of ArmedConflict capabilityAnnual graduation ofExecutive NationalSecurity Programme(ENSP) members with acertificate in NationalSecurityAnnual graduation oflearners with a MilitaryAcademy Bachelor'sDegree (B Mil)Annual availability ofre-skilling trainingopportunities to learnersexiting the DODObtain full accreditationof the Centre forAdvanced Training(CAT) provided skillsprogrammes/ coursesFully functionalStructure in place withappropriate systems,processes and policyFully operational PeaceMission TrainingCentreAnnual TargetApprovedImplemented72 Members56 Learners150 OpportunitiesFully accreditedFunctional macroorganisationalstructureapprovedDevelop andfinalise appropriatepolicies andprocedures100%Actual TargetAchievementThe draft StrategyfinalisedStructure not yetapproved and only 1post staffed61 members completedcourse successfully40 Learners have graduatedduring the FY2010/11191 opportunities wereprovided in theFY2010/11Partially accreditedMacro organisationalstructure approvedLegislative mandate andadministrative supporthave been developed.Benefits and services ascontemplated in the legislationis currentlybeing considered byCabinet100%Reasons for Over/Under AchievementNot Achieved. The HRDevelopment Strategy is stillunder considerationNot Achieved. Full approvaland staffing of the proposed poststructure has not yet taken placeNot Achieved. Deviation ENSP21/10: 2 Foreign learners and 5PSAP learners did not report forENSP 21/10. 1 learner withdrawnfor medical reasons.Deviation ENSP 22/10: 3 membersfrom other Departments didnot report. 1 additional SANDFmember was accepted. 1 learnerwithdrawn by his Departmentduring mid-courseNot Achieved. 36 membersgraduated in Dec 2010, fourmembers graduated in March2011, 9 members failed. Only 49students enrolled for academicyear 2010Achieved. Additional assistancewas provided for MilitaryVeterans and DOD WorksCapability clientsNot Achieved. The facilitieswere not in line with the requirementsof MERSETAAchievedAchievedAchievedEffect of Programme / Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Subprogramme Human Resources Support Services' Outputs has contributed positively to theAdministration Programme's Purpose to execute the Department's overall management, administration and policydevelopment.ANNUAL REPORT FY 2010/2011 35

D E P A R T M E N T O F D E F E N C ES U B P R O G R A M M E : L E G A LS E R V I C E SO v e r v i e wThe period under review saw the Defence Legal ServicesDivision (DLSD) making significant progress in filling allnewly established posts. However, further structural expansionsare still required.The Division provided law support and legal advice asrequired for external and internal operations, exercises, adhoc deployments / investigations, operational law traininglectures and refresher law training sessions. Military law supportand legal advice was also rendered with the drafting of17 bilateral and multilateral Memoranda of Understanding.A total of 1 312 requests for legal advice was received and theDivision could attend to 1 305 of those. The Court ofMilitary Appeals finalised 42 cases that were set down forhearing and 29 dockets were received from the MilitaryProsecution.In support of the priority of the Minister to improve theservice conditions of the members of the SANDF, theDivision was instrumental in the formulation and developmentof the Defence Amendment Bill. The Bill was approvedby Cabinet, passed by the National Assembly and sent to theNational Council of Provinces and assented to by the Presidenton 09 Dec 2010. The Defence Amendment Act (Act No.22 of 2010) provides for the establishment of a permanentDefence Force Service Commission (DFSC) to advise theMinister on the conditions of service of SANDF membersand also for obligatory service for the Reserves in circumstancesshort of war or a state of national defence.In order to enhance skills development in the defence legalcorps, the Division presented four Military Law Courses atthe School for Military Justice. The school received fullaccreditation from the SA Qualification Authority as a serviceprovider for three (3) subjects and accreditation for seven(7) of the facilitators as moderators and assessors.The challenges that placed an enormous burden on theDivision during the reporting period, included the seriousdecline in the allocated operating budget due to the expansionof the human resources budget, the non-availability of variousposts as a result of the Division being inadequately capacitatedin the operations environment as well as the shortage oftrained Military Law Practitioners, both Regular and Reservemembers.Despite the human resources, skills and structural constraintsthe Division continued to ensure that military justice was providedin the DOD in line with national standards.O b j e c t i v e s a n d M e a s u r e sThe Legal Services provides professional, legitimate anddeployable military legal services and support commensuratewith the needs of the DOD.O u t p u t D e t a i lTable 4.7 below provides details of the Legal ServicesSubprogramme output, performance measures and targets asspecified in the output table in the DOD Strategic PlanFY2010/11.Table 4.7: Legal Services Output Detail for the FY2010/11OutputDefence LegalService capabilityandservicesPerformanceIndicatorDegree to which MilitaryJustice inputs and legalsupport have been providedas prescribed inthe Military DisciplineSupplementary MeasuresAct (MDSMA), ActNo 16 of 1999, theDefence Act, Act 42 of2002 and any other applicablelegislationDegree to which a comprehensive legal adviceservice and capability areprovided to the MOD,Sec Def and the Chief ofthe SANDFAnnualTargetMilitary justice inputsand legal supportprovided as prescribed100% of all requestedlegal advice provided80% of all facilitatedlitigation must beattended toActual TargetAchievementMilitary justice inputs andlegal support were providedas prescribed99% of all requested legaladvice was provided100% of all facilitated litigationwas attended toReasons for Over/Under AchievementAchievedAchievedAchieved36ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 4.7: Legal Services Output Detail for the FY2010/11 (continued)OutputLegal adviceand supportservice to theDODLegal adviceand supportservice to theDODMilitaryjudiciaryservice to theSANDFMilitaryDefenceCouncil serviceto theSANDFMilitaryjudicialreview serviceto theSANDFDefenceLegalServicesSupportPerformanceIndicatorPercentage compliancewith the Chief of theSANDF requirementswith regard to operationallegal advice and supportfor all external and internaloperationsTimelines and quality towhich HR, Policy, MOUand Legislative legaladvice complies withDOD Legislation, PolicyPrescripts and InstructionsThe degree to whichoperations and forcepreparations legal advicepolicy and procedurescomplies with DOD legislationand instructionsThe degree to whichDLSD plans and proceduresin respect of MilitaryJudges, Presiding Officersand Assessors complieswith the provisions ofDefence Act, Act No 42 of2002 and the MDSMA,Act No 16 of 1999The degree to whichMilitary Defence Counselsectoral policy with regardto Military Counsel andprocedures complies withthe Defence Act, Act No 42of 2002 and the MDSMAAct No 16 of 1999 andinstructionsThe degree to whichMilitary Judicial Reviewpolicy and procedurescomplies with the DefenceAct, Act No 42 of 2002 andthe MDSMA Act No 16 of1999The degree to which anETD service (legal training)is provided to theDOD and the DLSD100%AnnualTargetFull compliance withregulatory frameworkFull compliance withregulatory frameworkto ensure deployableoperational legaladvice and supportservices to the SANDF(CJ Ops), and relevantDivisionsFull compliance withregulatory frameworkFull compliance withregulatory frameworkFull compliance withregulatory frameworkProvide andImplement an effectiveETD Service. "In accordancewith DODPolicy and Prescripts"expressed ito percentageof functions conducted.Actual TargetAchievement100% Compliance withChief of the SANDFrequirementsFully complied with regulatoryframeworkFully complied with regulatoryframework toensure deployable operationallegal advice andsupport services to theSANDF (CJ Ops) and relevantDivisionsFull compliance withregulatory frameworkFull compliance withregulatory frameworkFully complied withregulatory frameworkFully complied withregulatory frameworkReasons for Over/Under AchievementAchievedAchievedAchievedAchievedAchievedAchievedAchievedANNUAL REPORT FY 2010/2011 37

D E P A R T M E N T O F D E F E N C ETable 4.7: Legal Services Output Detail for the FY2010/11 (continued)OutputMilitaryprosecutionservice to theSANDF 3PerformanceIndicatorThe degree to whichMilitary Prosecution(MPros) apply policy andprocedures that complieswith the Defence Act, 2002(Act 42 of 2002) and theMDSMA, 1999 (Act 16 of1999)Annual TargetFull compliance withregulatory frameworkActual TargetAchievementProvided and implementedan effective Education,Training and Developmentservice, "in accordancewith DOD policy and prescripts"Reasons for Over/Under AchievementAchievedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Subprogramme Legal Services' Outputs has contributed positively to the AdministrationProgramme's Purpose to execute the Department's overall management, administration and policy development.S U B P R O G R A M M E : I N S P E C T I O NS E R V I C E SO v e r v i e wDuring the year under review, the Defence InspectorateDivision achieved its objectives as a multi-functionary Divisionby conducting performance, regulatory, compliance andclosing down unit audits, anti-corruption and anti-fraud services.The Division also conducted perception surveysnotwithstanding capacity challenges experienced such asvacant posts, the non-alignment of the Resource Managementstructure and the unfunded status of Project MOUNTING(closing down audits). The Division helped the DOD toaccomplish its objectives by bringing a systematic and disciplinedapproach to evaluation and the improvement in theeffectiveness of governance, risk management and controls.The Defence Inspectorate Division retained certification ofISO 9001: 2008 Quality Management certificate and establisheda nodal point for the Fraud and Corruption Forum. TheFraud and Prevention Plan was finalized in the period underreview. All Commando Units and Group Headquarters weresuccessfully closed and de-activated from the system.A SADC Seminar was hosted in Cape Town during August2010, where the Division presented the draft InspectionManual as tasked by the SADC Standby Force.Formal training of Internal Auditors was conducted and 23members completed the General Internal Auditors Course.The graduation ceremony will take place in May 2011. TheInternal Auditors were also involved with the practical trainingpresented by the KPMG Consortium. The Division utilizesthe Internal Auditors as required by law to ensure thatsystems and processes are in place to minimize/prevent auditqualifications.The Directorates responsible for performance and regulatorycompliance audits achieved their audit objectives inclusive ofseven and eight ad hoc audits respectively.O b j e c t i v e s a n d M e a s u r e sThe Inspection Services Subprogramme ensures the validityand veracity of the management information of the DOD.O u t p u t sTable 4.8 below provides details of the Inspection Servicesoutputs, performance measures and targets as specified in theDOD Strategic Plan FY2010/11.Table 4.8: Inspection Services Output Detail for FY2010/11OutputPerformanceAudit capabilityPerformance MeasureNumber of performanceaudit reports finalizedaccording to the AnnualPerformance AuditSchedule30AnnualTargetActual TargetAchievement30 plus 7 ad hoc auditsReasons for Over/ UnderAchievementOver achieved as 7 ad hocaudits were conducted3Changes to the DOD Strategic Plan FY2010/11, as directed by C SANDF Instruction 10/09: CCS/CMP/R/3022/2/1(FY2010/11) dd 28 May 2009.38ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 4.8: Inspection Services Output Detail for FY2010/11 (continued)OutputComplianceAudit capabilityAnti-Fraudand Anti-CorruptioncapabilityInspectionServices capabilityClosingDown capabilityPerceptionSurvey capabilityPerformanceIndicatorNumber of complianceaudit reports finalizedaccording to the AnnualCompliance AuditScheduleAwareness Training.Number of memberssensitized on the reportingof fraud and corruptionin the DOD throughan awareness campaign.Number of inspections/reports finalized accordingto the AnnualInspection scheduleNumber of closing downaudit reports completedaccording to the AnnualClosing Down ScheduleNumber of perceptionsurvey reports completedaccording to the AnnualPerception SurveyScheduleReasons for Over/ UnderAnnualActual Target36 5 34Achieved. Two perceptionTargetAchievementAchievement64 410 00069050 plus 8 ad hocaudits11 8520148Achieved. The fact that theDirectorate was involvedwith training and assistanceto the Consortium, 6 auditswere postponedOverachievement.Successful road showsattracted more membersthan estimatedThis function has notbeen undertaken yet as thenew structure for the separationof audit/inspectionfunction has not been implementedOver achieved. Themandate of ProjectMOUNTING was to closedown/de-activate the 183Commando Units and the14 Group HQ's, achievedobjective. 50 Naval Unitswere also de-activatedsurveys were cancelledon request of the ServicesEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Inspection Services Outputs has contributed positively to the Administration Programme'sPurpose to execute the Department's overall management, administration and policy development.S U B P R O G R A M M E : A C Q U I S I T I O NS E R V I C E S ( D E F E N C E M A T É R I E L )O v e r v i e wThe Defence Matériel Division, as the main policy advicerepository for the Minister of Defence and Military Veteransas well as the Secretary for Defence on Category 1 MatérielAcquisitions, directs and manages the acquisition ofDepartment of Defence specific matériel and technologyrequirements within the allocated budget and in accordancewith all policies and prescripts.During the period under review, based on the SANDF prioritiesdetermined by Chief of Joint Operations (CJ Ops) anddue consideration to the prevalent industrial capability as wellas the particular approval status and strategy of individualprojects, the Division scheduled update and renewal projectsfor the DOD. This was done within the limits of MTEF allocationfor weapon systems and technology development andacquisition.The focus of defence acquisition for the year under reviewwas firstly to finalise the remaining part of the StrategicDefence Packages and secondly on acquiring new equipmentand upgrading existing equipment, as prioritised by CJ Ops insupport of ordered commitments assigned to the SANDF.Some of this equipment / systems played an integral role inthe SANDF participation in support of the 2010 FIFA World4The original target as per the DOD Strategic Plan FY 2010/11 was 65.5The original target as per the DOD Strategic Plan FY 2010/11 was 50.ANNUAL REPORT FY 2010/2011 39

D E P A R T M E N T O F D E F E N C ECup. The technology development support to ChemicalDefence ensured that adequate decontamination supportmeasures were in place during the 2010 FIFA World Cup.Similarly, some of the acquired or upgraded systems willplay an integral role in the SANDF border safeguardingactivities (Op CORONA).Specific technology programmes were pursued to ensure theretention of the required technology base for effective localindustry participation in scheduled acquisition programmes.These technologies were also used to optimise or extend theremaining life of existing equipment. The defence science,engineering and technical expertise is focussed on the strategicallyessential requirements of the SANDF.During the period under review, Chief of Defence Matériel(C Def Mat) accepted responsibility for the provision of anodal point for reporting to the Auditor General on matterspertaining to the management of defence Intangible CapitalAssets (ICA). A distinct component of this portfolio consistsof interventions to manage the defence materiel and relatedIntellectual Property (IP). This is done in collaboration withARMSCOR as mandated through the ARMSCOR Act asbeing the custodian of the DOD IP. Defence IP will be managedby the DOD as crucial to the enhancement of the DODtechnology knowledge base and possible economy of scalebenefits. Of critical importance is the development of futureorientated definitions of military strategic IP with requisiteprotocol regimes for protection from infringement.In the period under review the following capabilities werecompleted:Landward Defence Acquisition.Strategic Defence Packages. No packages allocated.Other. The acquisition of the 60 mm long-rangemortar for the SA Army has been completed andthis weapon system will be commissioned in theFY2011/12. The training module of the UnmannedAerial Observation System was also deliveredto the SA Army. Night vision and navigationequipment for dismounted soldiers was deliveredto the SA Army as well. Two Thuthla radars withtheir support vehicles were deployed during the2010 Soccer World Cup event. The Thuthla radarsas well as the Tactical Battlefield SurveillanceSystem and the Mamba armoured personnel carrierswere handed over to the SA Army.Air Defence Acquisition.Strategic Defence Packages. With all 30 AgustaA109 Light Utility Helicopters delivered, theprocess of correcting deficiencies identified duringOperational Testing and Evaluation continued, asdid the delivery of contracted spares, training andground support and test equipment. A further foursingle-seater Saab Gripen advanced light fighterswere delivered. Delivery of contracted spares,training and ground support and test equipmentcontinued. The operational capability wasenhanced by the clearance of the IRIS-T interiminfra-red air-to-air missile. Operational Capability 4expansion of the BAE Systems Hawk Lead-inFighter Trainer to the SA Air Force was tested andqualified. Imple-mentation will take place in thenext financial year.Other. The Westland Super Lynx Maritime Helicopterhas been handed over to the SA Air Forcewith the exception of some training and delivery oftest equipment. The development of the A-Darterinfra-red air-to-air missile was continued as a successfuljoint venture with the Brazilian Air Force,with a number of successful test firings and clearanceon the Gripen fighter. The Minister of Defenceapproved an interim continuation of the RooivalkCombat Support Helicopter in May 2010. In termsof the programme, the first five aircraft were handedover with full Type Certification to the SA AirForce on 01 April 2011. The avionics upgrade ofthe Oryx Medium Transport Helicopter suffered asignificant setback when DENELAviation declareda 14 month delay in schedule. High-level managementintervention and oversight was instituted tocorrect the deficiencies and to ensure that there wasno further delay in the schedule. The local implementationprogramme for the avionics upgrade ofthe Astra PC7 Mk II aircraft has been initiated andgood progress has been made with 11 out of 35 aircraft,as well as one of two aircraft simulators delivered.The upgrade of the Cessna 208 Caravan withan observation ball (10 aircraft fitted for and threeobservation balls provided) has been completed.Naval Acquisition.Strategic Defence Packages. Both the SA NavyStrategic Defence Package programmes (fourMeko 200 Frigates and three Class 209 Type 1400Submarines) have entered the closing phase.Other. The focus of Naval Acquisition was aimedat the SA Navy patrol vessel requirement, as well asthe core mine warfare and hydrographical capabilities.The magnetic treatment range for the depermingof ships and submarines is in the processof being handed over from the project to the SANavy, and the logistic support requirements for thissystem are being addressed.Common Weapon Acquisition. The DepartmentalInformation and Communications Infrastructure projectsdevelopment are progressing according to plan with thefirst Ultra High Frequency and Very High Frequency40ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C Etactical radios nearing a final product. The tactical commandand control systems, although not commissioned,have been utilized in various joint exercises as part ofoperational testing and evaluation.Defence Technology Development. Research and technologydevelopment into High Energy Lasers and theirapplication to the protection of mobile defence systems,achieved world-first outcomes and established theNational Laser Centre as the recognised world leader inthis field. Good progress between the Institute forMaritime Technology (IMT) and the frigates was madetoward obtaining and sharing an integrated maritimepicture. This capability will enhance the SA Navy abilityto conduct anti-piracy and anti-poaching patrols. IMTalso successfully conducted infra-red trials with aNATO research institute. Within landward technologydevelopment, excellent progress was made in determiningthe source of and elimination of unwanted pressurewaves in the combustion chamber of large calibre cannonsystems.O b j e c t i v e s a n d M e a s u r e sThe Acquisition Services Subprogramme optimally directsand manages the acquisition of DOD specified matériel andtechnology requirements by means of competent personnelwithin the allocated budget and in accordance with policiesand prescripts.O u t p u t D e t a i lTable 4.9 below provides details of the Defence MatérielSubprogramme outputs, performance measures and targets asspecified in the DOD Strategic Plan FY2010/11.Table 4.9: Acquisition Services Subprogramme Output Detail for the FY2010/11OutputDefenceAcquisitionManagementTechnologyDevelopmentPerformanceIndicatorTimely, relevance andquality of advice anddirection provided withrespect to Defenceacquisition mattersExecution of Defenceacquisition projects asapproved on theSCAMPTechnology Developmentprojects approvedand funded by theDefence Research andDevelopment Board(DRDB)Timely, relevance andquality of advice anddirection providedduring execution ofTechnologyDevelopment projectsAnnualTargetAdvice and directionprovided asand when requiredExecution ofDefence acquisitionprojects as approvedon the SCAMPTechnology developmentprojectsapproved andfundedAdvice provided asand when requiredActual TargetAchievementAdvice and direction providedto principals, clients and staffas and when required throughofficial acquisition boards andcommittees, briefings and writtencorrespondenceDefence acquisition projectswere executed in accordancewith the prescripts of DAP 1000 6 .All projects were authorised fortheir particular phase and allexpenditure took place accordingto approved business plansand within the bounds of thefinancial allocations awarded toeach projectProgramme approved andprojects fundedAdvice and direction providedto principals, clients and staff asand when required through officialtechnology developmentboards and committees, briefings,"show and tells" and writtencorrespondenceReasons for Over/Under AchievementAchievedNot all projects couldbe executed in accordancewith theirplanned cardinaldate plansAchievedThe Defence Science,Engineering andTechnical know-howare focussed onstrategically essentialrequirements of theSANDFEffect of Programme / Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The Subprogramme Acquisition Services succeeded in directing and managing the acquisition of DOD specified matérieland technology requirements by means of competent personnel within the allocated budget and in accordance withpolicies and prescripts.6DAP 1000 = Process and Procedure for the Acquisition of Armaments.ANNUAL REPORT FY 2010/2011 41

D E P A R T M E N T O F D E F E N C ES U B P R O G R A M M E : D E F E N C ES U P P L Y C H A I N I N T E G R A T I O NO v e r v i e wThe aim and objectives of Defence Supply ChainIntervention (DSCI) have not changed as there have been nocorresponding policy changes that affected its mandate.However, a work session was held during April 2010 to repositionthe Division in terms of its focal area. The intention ofrepositioning was to form the strategic baseline for futureplanning and meaningful reporting. The strategic repositioningof the Division resulted in the overhauling of its strategicobjectives as reflected in the DOD Strategic Plan 2010. Newstrategic objectives were formulated. The Divisional strategicplan was then amended from the original copy to an abridgedversion submitted to the Chief Defence Policy Strategy andPlanning for record and analysis purposes.The current structure as approved in February 2011 as well aspersonnel does not complement the required operations. Thestructure needs significant adjustments to support current andfuture strategic initiatives. Appropriate steps have been takento have the structure reviewed in a scientific manner.Despite this challenging situation, the execution of the planwas successful and steady progress has been made towardsthe achievement of the DSCI objectives. Key milestones inline with performance were met. Notwithstanding personnellimitations, the achievement of the milestones and executionof the plan was successful. The Division has made progresstoward supporting the Secretary for Defence in the oversightfunction where identified policy gaps prevent enforcement ofcompliance to the regulatory framework.During the reporting period the following achievements wererecorded:The Division submitted a conceptual paper on the repositioningof the Defence Industry, in particular DENEL.This is ready for consultation with various stakeholdersas well as Parliamentary Committees. DSCI is also participatingin the development of a Defence IndustrySupport Strategy that will allow the magnification ofstrategic areas such as the refocusing of DENEL versusDefence Strategic Capabilities.The Division conducted research on the alignment of theDefence Secretariat with its Constitutional andLegislative Mandate in order to assist the Minister in hercivil control responsibility. During 2010 a DefenceSecretariat reposition proposal was submitted to theMinister for consideration.The Chief Director Matériel Governance and theDirector Defence Industry Governance attended theRSA/Algeria bi-national in Algiers and developed anagreement on the two countries' industrial participation.This agreement formed part of the bi-national agreementsigned by the President of Algeria, Mr Bouteflika andthe President of RSA, Mr J.G. Zuma.The Division successfully customised three NationalTreasury Practice Notes in line with DepartmentalSupply Chain procedures, including "National TreasuryInstruction on the amended guidelines in respect of bidsthat include functionality as a criterion for evaluation(issued September 2010)", that revised the applicationof Preferential Procurement Policy Framework Act(PPPFA) during evaluation of bids.Through implementing fraud prevention measures, theDivision successfully identified a "fronting" case by aparticular company. This was subsequently won in acourt of law and the contract was cancelled.The Division has exerted significant effort throughidentification of 203 incomplete Ex Post Facto casesthat were referred back to the respective services anddivisions for investigation. The number of cases condonedis 242 out of 486 registered cases. The Divisionis currently in the possession of 41 cases of which 13have already been condoned.The Division successfully coordinated the conclusion ofphase 1 feasibility studies for Public-Private Partnership(PPP) project pertaining to building of SAHMS andNavy HQs.The Division successfully led the process of contractingthe University of Stellenbosch to develop accreditationof Military Academy qualification.The Division successfully hosted the 2011 DefenceIndustry Day at the Council for Scientific and IndustrialResearch (CSIR) on 17 March 2011. The DefenceIndustry Day is fast transforming into a national event.The event was attended by the Deputy Minister ofDefence and Military Veterans, Secretary for Defence,Chiefs of Services and Divisions, various esteemed dignitarieswhich include the following:Department of Trade and IndustryDepartment of International Relations andCooperationDepartment of Science and Technology, andGauteng Department of Economic Affairs that hasdictated DOD to invite other MECs to ensurenational support to Defence Industry internationally.DSCI successfully concluded the following contracts:Contract for the termination of accommodation ofthe Ops SADAIT team,Contract for Medical Air Evacuation of DODmembers who are detached to deployment areas42ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C Ewho might need attention, andContract for accommodation of Op VIMBEZELAmembers.O b j e c t i v e s a n d M e a s u r e sThe Subprogramme Supply Chain Integration ensures theeffective and efficient procurement and disposal of goods andservices in the DOD.O u t p u t D e t a i lTable 4.10 below provides details of the Defence SupplyChain Integration Subprogramme outputs, performancemeasures and targets as specified in the DOD Strategic PlanFY2010/11.Table 4.10: Defence Supply Chain Integration Output Detail for the FY2010/11OutputTo strengthenthe 'oversight'role withinthe matérielvalue chainTo Promoterepresentivityand sustainabilityin theSA DefenceIndustryTo enforcepolicy with aview to maintainingandguiding thefunction ofconsultant'sutilisationTo promotethe sustainabilityin theSA DefenceIndustryPerformanceIndicatorPercentage Reduction ofnon compliance (tool) inGRCIncreased economicparticipation by HDIsand women (policyrequirement 25%)Improved accountabilityon consultantsutilisation (violationbaseline 65%)Increased participationof RSA industry in supportof manufacturedproducts and servicessupplied to the SANDFAnnualTarget20%15%30%15%Actual TargetAchievementThe implementation ofARMSCOR Service LevelAgreement was monitored closelywhere process deviationswere discussed and correctivemeasures takenInvestigations on 203 incidents ofnon-compliance/irregularexpenditure are being investigatedto reach finalityThe ARMSCOR Board meetingsare often used to pursue themonitoring functions, one ofthem being performance of theissuing of tenders to theHistorically DisadvantagedIndividuals (HDI). The blockagesof issuing of tenders to HDIwere identified in the ARM-SCOR Tendering Processes andwere addressedThe policy on the utilisation ofconsultants is reviewed in orderto improve accountability. Anitem code that is specific to consultants'utilisation has been createdto address the mix betweenconsultation and contracts forgoods and services. There hasbeen a significant improvementin the management of consultantssubsequent to the use of aseparate item codeVisited by delegations fromCongo Brazzaville, DemocraticRepublic of Congo (DRC) andBenin resulting in a tender forSAAB. The US/RSA IndustrySymposium was also held duringthe 2010 AADReasons for Over/Under AchievementAchievedAchievedAchievedAchievedANNUAL REPORT FY 2010/2011 43

D E P A R T M E N T O F D E F E N C ETable 4.10: Defence Supply Chain Integration Output Detail for the FY2010/11 (continued)OutputRegularisedthe outsourcingof all thenon-coreactivities inthe DODPerformanceIndicatorImproved compliancewith outsourcing regulationsAnnualTarget40%Actual TargetAchievementA database of companies used bythe DOD has been updated andthe nodal points were also establishedto improve the managementof Alternative ServiceDelivery (ASD) at divisionallevel. The ASD ImplementationBoard (ASD IB) ensured that thecriterion aimed at improvingefficiency was metReasons for Over/Under AchievementAchievedEffect of Programme / Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The Subprogramme Supply Chain Integration successfully ensured the effective and efficient procurement anddisposal of goods and services in the DOD.S U B P R O G R A M M E :C O M M U N I C A T I O N S E R V I C E SO v e r v i e wDefence Corporate Communication (DCC) continued with itsefforts to ensure stronger public awareness, understandingand support for Defence, and to develop the CorporateCommunication (Corp Com) function to effectively supportoperations and to promote the image of the DOD among keystakeholders.Liaison with the media ensured that several DOD events werecovered that showcased the capabilities of the SANDF andportrayed the DOD as an organization that cares. Theseevents included the budget vote of the Minister, the DOD supportto the 2010 FIFA World Cup, the launch of theDepartment of Military Veterans and the SANDF taking-overof the border safeguarding responsibility from the SouthAfrican Police Service (SAPS). Coverage of major multinationalexercises such as Exercise IBSAMAR between thenavies of India, Brazil and South Africa and Exercise ATLA-SUR between Argentina, South Africa and Uruguay furtherpromoted the image of the DOD.Other major activities that also significantly promoted theimage of the DOD were the SANDF support to hospitals duringthe public service strike, the DOD participation in theAfrican Aerospace and Defence Exhibition (AAD), the AirForce Day, the Naval Festival, Exercise YOUNG EAGLE,the National Youth Service Pass-out Parade and the MOD &MV's address to the MSDS intake in January 2011.DCC has established a good working relationship with theSABC and is able to secure free airtime during SABC 2Morning Live programmes to conduct live broadcasts ofmajor events. Mutually beneficial working relationships werealso established with E TV and with print media houses. Thishas provided the DOD with the opportunity to increase publicawareness of DOD support to government priorities.During the period under review, Defence TV won an internationalfilm award in Italy, the third such award since 2001. Inthe Institutional Information Category the Defence TV entry:"Cheetah Farewell" won the first prize and received the covetedChief of Staff of the Italian Defence Force Award.The Corporate Communication Restructuring Task Team(CCRTT) continued with a range of investigations that willcontribute to the establishment of a professional corporatecommunication service. Smaller task teams have been establishedto conduct the respective investigations. Some of thetask teams have commenced with their work and will continueuntil the end of the FY2010/11. The location of the Headof Communication is still to be approved by the Minister.O b j e c t i v e s a n d M e a s u r e sThe Communication Services Subprogramme providesdefence communication policy, strategy and plans in accordancewith DOD policy and national (GovernmentCommunication and Information System - GCIS) policy, andprovides a centralized corporate communication capability,services and products in order to enable effective, efficient,two-way communication between the DOD and itspublics/stakeholders.O u t p u t sTable 4.11 below provides details of the report on theCommunication Services (Corporate Communication)Subprogramme outputs, performance Indicators and targetsas specified in the DOD Strategic Plan FY2010/11.44ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 4.11: Communication Services Output Detail for FY2010/11OutputCorporateCommunicationPolicy,Strategy andspecialistadviceCorporateCommunicationproductsand servicesPerformanceIndicatorTimeliness, relevanceand quality of corporatecommunication advice tothe DODDegree of integrated andaligned DODCommunicationStrategy, Policy andGuidelines provided tothe DODPercentage compliancewith annual requirementsin terms of medialiaison, communicationinformation productsand services as well asmarketing and communicationsupport requirementsAnnualTargetCorporate communicationadvice providedas and whenrequiredPromulgated andimplementedCorporateCommunicationStrategy and Policy95%Actual TargetAchievementCorporate communicationadvice was provided asand when requiredCorporate CommunicationPolicy was completedJWP 116 - Doctrine forCorporate Communicationin Operations was completed95%Reasons for Over/Under AchievementAchievedApproval and implementationwillcommence inFY2011/12AchievedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Communication Services Subprogramme has contributed positively to the AdministrationProgramme's Purpose to execute the Department's overall management, administration and policy development.S U B P R O G R A M M E : S A N D FC O M M A N D A N D C O N T R O LO v e r v i e wThe Office of the C SANDF accomplished all the objectivesand targets set for the year under review. The C SANDF providedeffective strategic direction and command and controlover the SANDF.The Chief of the SANDF devoted his efforts during the yearunder review towards advancing defence diplomacy and multilateralinitiatives of Government within the multinationalorganisations of the African Union (AU) and the SouthernAfrican Development Community (SADC). Internally, theChief of the SANDF was fully engaged in the GovernmentProgramme of Action requirements, with full participation inthe monthly clusters, as well as the Forum of SA Directors-General. Military policy advice to the Minister and DeputyMinister of Defence & Military Veterans was a constant andongoing activity.Externally, on average a total of 2 238 members, including148 Reserves, were successfully deployed by J Ops Div intwo Peace Support Operations in the Democratic Republic ofCongo (DRC) and Sudan, as well as three general militaryassistance operations in the DRC, the Central AfricanRepublic (CAR) and the support to the MozambiqueGovernment to curb piracy in the Mozambique Channel.Operation TEUTONIC in DRC was successfully completedand terminated at the end of October 2010. The SAArmy successfullytrained 1 780 Defence Force members of the DRC(FARDC) and handed them over to the Minister of Defence ofthe DRC after completing a planned cycle of training inOctober 2010.Internally, several missions in support of other Governmentdepartments continued with the emphasis on safety and securitysupport, search and rescue on sea, land and border safeguarding.A total of 556 099 man-days were used duringinternal operations. The deployment of the SANDF for bordersafeguarding resulted in the apprehension of 20 613 illegalimmigrants, 263 criminals were arrested, 21 stolen vehicleswere recovered, 14 weapons were recovered, 18 livestockwere recovered and various narcotics were confiscated including807kg marijuana (dagga), 137g tik-tik and 122 mandraxtablets. The SANDF also provided safety and security supportduring the 2010 FIFA World Cup and the public service strike.During the year under review, the A/C SANDF paid visits toten Defence Forces, namely, USA, India, Mozambique, RoyalThai, Congo Brazzaville, Namibia, Lesotho, Peoples Republicof China and Indonesia to strengthen ties and advance defencediplomacy. The Chiefs of Mozambique and Royal ThaiArmed Forces conducted reciprocal visits to the Chief of theSANDF.In order to improve the Command and Control in the SANDF,ANNUAL REPORT FY 2010/2011 45

D E P A R T M E N T O F D E F E N C EChief of the SANDF continued to conduct activities in termsof the Commander Communication Strategy to ensure thatSANDF members were kept informed on the latest developmentsand continued progress was made with the repositioningof the SANDF.Through the Subprogramme SANDF Command and Control,the Chief of the SANDF has continued to provide relevantand timely military advice to the Minister of Defence whilesimultaneously executing effective command and controlover the SANDF.O b j e c t i v e s a n d M e a s u r e sThe Subprogramme SANDF Command and Control providescommand and control for the SANDF.O u t p u t sTable 4.12 below provides detail of the SANDF Commandand Control outputs, performance Indicators and targets asspecified in the DOD Strategic Plan FY2010/11.Table 4.12: SANDF Command and Control Output Detail for FY2010/11OutputMilitary policyadvice tothe Ministerof Defence(MOD)Commandand control ofthe SANDFPerformanceIndicatorTimeliness, relevance andquality of military policyadvice to the MinisterProvision of strategicdirection on operationalreadinessaccording toSANDF Force EmploymentrequirementsLevel of success ofordered commitmentsAnnualTargetMilitary policy adviceprovided as and whenrequiredReadiness maintainedin accordance withforce employmentguidelinesSuccessful conduct ofordered commitmentsActual TargetAchievementMilitary policy advice wasprovided as and whenrequired (continuous)Readiness was maintainedin accordance with forceemployment guidelinesOrdered commitmentswere successfullyconductedReasons for Over/Under AchievementAchievedAchievedAchievedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the SANDF Command and Control Outputs has contributed positively to the AdministrationProgramme Purpose to execute the Departmental overall management, administration and policy development.S U B P R O G R A M M E : C O R P O R A T ES T A F F O F F I C EO v e r v i e wThe outputs of the Corporate Staff Office have contributedpositively to the achievement of C SANDF corporate staffcapability. The capability includes inter alia strategic direction,policy and strategic advice and support from theMilitary Policy Strategy and Planning Office as well as thesupport services provided by the DOD Headquarters Unit.Other additional management responsibilities that were delegatedto the Corporate Staff Office include the performancemanagement of the Reserve Force Council and the managementof the Specialist Advisory Team (Team BULISA)deployed to assist in the capacity building of the DemocraticRepublic of the Congo Defence Force (FARDC). TheCorporate Staff Office ensured that the Specialist AdvisoryTeam made significant progress with the completion of therespective strategy document for the FARDC.The Acting Chief of Corporate Staff involvement in threebilateral and multilateral agreements of Defence Committeemeetings during FY2010/11 had a direct impact on enhancinginternational military relations and the portrayal of a positiveimage of the DOD / SANDF during the FY2010/11.O b j e c t i v e s a n d M e a s u r e sThe Corporate Staff Office is part of the Policy and Planningsubprogramme of the Administration Programme 7 .O u t p u t sTable 4.13 below provides details of the Corporate StaffOffice of the outputs, performance Indicators and targets asspecified in the DOD Strategic Plan FY2010/11.7In the ENE, the Policy and Planning allocation includes funding for the Corporate Staff Office as well as the Military Policy,Strategy and Planning Office.46ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 4.13: Corporate Staff Office 8 Administration Subprogramme Output for FY2010/11OutputCorporate staffcapability forChief of theSANDF (MilitaryPolicy, Strategyand Planning,ReligiousServices,CorporateCommunicationand DefenceReserveDirection)PerformanceIndicatorTimeliness, relevanceand quality of strategicadvice to the Chief ofthe SANDFTimeliness, relevanceand quality of directionprovided to theDivisions and Officeswithin the CorporateStaff DivisionTimeliness, relevanceand quality of staffcoordination of theSupporting Divisions asdelegated by Chief ofthe SANDFAnnualTargetStrategic advice providedas and whenrequiredDirection provided asand when requiredStaff coordinationprovided as and whenrequiredActual TargetAchievementStrategic advice wasprovided as and whenrequiredDirection was providedas and when requiredStaff coordination wasprovided as and whenrequiredReasons for Over/Under AchievementAchievedAchievedAchievedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Corporate Staff Office's Output has contributed positively to the Administration Programme'sPurpose to execute the Department's overall management, administration and policy development.S U B P R O G R A M M E : R E L I G I O U SS E R V I C E SO v e r v i e wDuring the year under review, the Religious Servicesachieved their planned objectives. The Chaplain GeneralDivision (Religious Services) focus was on a ministry thatfollowed a holistic religious approach to all DOD membersand their dependants including those on internal and externaldeployments.The Chaplain Service contributed immensely to SADC chaplains'development. As chair of the Spiritual and MoralSupport Workgroup of the Operations Sub-subcommittee(OSSC) of the Interstate Defence and Security Council(ISDSC), the Chaplain General attended the ISDSC inMaputo, Mozambique to present a report. He also chaired theSpiritual and Moral Support Work Group work session inLesotho. Assistance in writing religious policies was providedto Namibia and Lesotho and three SADC chaplainsobtained training. Support was provided during the researchmissions to the SANAE bases, Gough and Marion islands.Three chaplains participated in these voyages where eachchaplain was attached to one of the three destinations.Ten Chaplains were deployed externally in all DOD deploymentmissions and both Regular and Reserve chaplains weredeployed at the borders. The Chaplain General and some ofhis Senior Staff Officers were part of the team that conducteda goodwill visit to deployed areas and military hospitalsduring which Christmas related devotions were conducted.The Chaplain Service also played an important role duringthe 2010 FIFA World Cup event by offering trauma counselingand participating in national, regional and local structuresof this event. It also contributed to the Government MoralRegeneration Programme by running specific ethical programmesin all units. The Combating HIV and AIDS throughSpiritual and Ethical Conduct (CHATSEC) programmetrained approximately 4 507 MSDS candidates. Training wasalso extended to facilitators where 30 chaplains were trainedincluding two from Botswana and other government departmentswhere 15 members from the Department of SocialDevelopment trained as facilitators. An interdepartmental tiewas also sustained between the DOD and the Department ofEnvironmental Affairs.The Chaplain Service was invited to the internationalChaplains conference in Germany and the Chaplain Generalalso attended the Chief of Chaplains Conference in the CzechRepublic. A senior member of the Division was invited to aChaplains conference in Italy where he shared with them thesubject of reconciliation from the South African perspectiveand experience. The Chaplain Service also took advantage of8Also budgeted within Policy and Planning.ANNUAL REPORT FY 2010/2011 47

D E P A R T M E N T O F D E F E N C Ethe international learning opportunities by sending threechaplains to the annual NATO Chaplains Peace Operationcourse in Germany.The Chaplain Service also continued to make strides in theircovenantal relationship with the internal Religious AdvisoryBoards (RABs). Meetings and invitation to events with RABsof all recognized religions in the DOD such as Christianity,Islam and Hinduism were conducted and communication wasalso made with the African Traditional Religions.About 29 Reserve chaplains attended courses during the year.Reserve chaplains were also allowed on the M PhilChaplaincy Studies Programme at the University ofStellenbosch for the first time.Throughout the reporting year, the Chaplain Service has successfullysupported the DOD by proactively enhancing thespiritual, moral and ethical level of members of the DODcontributing to the maintenance of the defence capabilities ofthe SANDF for the people of South Africa.O u t p u t sTable 4.14 below provides details of the Religious ServicesSubprogramme outputs, performance indicators and targetsas specified in the DOD Strategic Plan FY2010/11.Table 4.14:Religious Services Output Detail for FY2010/11OutputReligious policyadviceand chaplaincapabilityand servicefor theSANDFPerformanceIndicatorDegree of relevance andcredibility of religious policiesand guidelines accordingto National andDepartmental policy aswell as Religious AdvisoryBoard guidelinesLevel of acceptance ofSANDF Religious Servicesby Religious AdvisoryBoards (RABs) of majorreligions represented withinthe DODEffective spiritual, ethicaland social support is availableat all levels of theDODAnnualTargetMonitoring of compliancewith religiouspolicies and guidelinesin the SANDFDOD religious policyaccepted by all RABsA chaplain available toensure support at 92%of unitsActual TargetAchievementCompliance with religiouspolicies andguidelines in theSANDF was monitoredDOD religious policywas accepted by allRABsA chaplain was availableto ensure support at95% of unitsReasons for Over/Under AchievementAchievedAchievedTwenty new chaplainswere appointedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Religious Services Output has contributed positively to the Administration Programme purposeto execute the Department’s overall management, administration and policy development.48ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ES U B P R O G R A M M E : D E F E N C ER E S E R V E D I R E C T I O NO v e r v i e wThe Defence Reserve Division continued its monitoring rolethrough the Defence Reserve Board to ensure the implementationof the Reserve Strategy by the Services and Divisions.During the period under review, the strength of the totalReserves was 26 147 of which 12 362 were called up. Theexternal deployments conducted by the Reserves in PeaceSupport Operations continued and Reserves were also successfullyemployed in border safeguarding duties.Several tertiary institutions have been engaged to give effectto the roll-out of the University Reserve Training Programme(URTP) and most institutions have shown great enthusiasmand have pledged to support the programme. The SA Armywill commence with the programme at the University of theFree State during FY2011/12 and the other services will startimplementing the programme in FY2012/13.Six Defence Provincial Liaison Councils (DPLCs) have beenestablished in six of the nine provinces to ensure support forReserves service from industry, non-governmentalOrganisations (NGOs), academia and traditional leaders.Other DPLCs are in the process of being established.A delegation from the Defence Reserve Division and ServiceReserve representatives attended the New York StatePartnership Program Conference conducted by the New YorkNational Guard. The aim of the visit was to bring togetherrepresentatives of the South African Ministry of Defence andMilitary Veterans, the SANDF, the New York National Guardand the New York State Government to discuss the future ofthe partnership programme.In terms of marketing the Defence Reserve System, the followingwas achieved:Two editions of the "Reserve Force Volunteer" werepublished and widely distributed while the websitewww.rfdiv.mil.za was continuously updated.Marketing and physical support were provided to theexpanded annual Combat Rifle Shooting Competition inBloemfontein in which 34 Reserve shooting teamsfrom different units competed.A number of Captains of Industry and local opinionmakers attended marketing and promotional activitiesof the Reserves, such as the SA Navy seagoing daysand the Artillery Corps of the South African Army openday.Support was provided to the Cape Town and KwaZuluNatal tattoos.The Division was instrumental in providing strategic directionand specialist policy advice to the Minister, C SANDF,Secretary for Defence, Service and Division during aMinisterial work session on matters pertaining to theenhancement of the Reserve Service System.The Division was active in the development of the DefenceAmendment Bill that provided for the obligation on Reservemembers to serve when called upon to do so in times otherthan war. This bill was passed in December 2010 and the legislationis now part of the Defence Amendment Act (Act No.22 of 2010). Another achievement is that the 22% pay differentialbetween Regulars and Reserves was resolved duringthe reporting year.Strategically, the main challenges for the development of aviable Reserve System remain the lack of an effective feedersystem to ensure the rejuvenation of the Reserve and thelimited continuation training budget to maintain the readinessof the members in the system.O b j e c t i v e s a n d M e a s u r e sThe Defence Reserve Direction Subprogramme directs thedevelopment and maintenance of the Reserve Force system,provides specialist advice on Reserve matters and promotes/markets the Reserve and the volunteer Reserve system.O u t p u t sTable 4.15 below provides details of the Defence ReserveDirection outputs, performance indicators and targets asspecified in the DOD Strategic Plan FY2010/11.ANNUAL REPORT FY 2010/2011 49

D E P A R T M E N T O F D E F E N C ETable 4.15: Defence Reserve Direction Output Detail for FY2010/11OutputStrategic directionto the developmentandmaintenance ofthe ReservesystemReserve promotionand employers'support serviceto the Chiefof the SANDFPerformanceIndicatorTimeliness, relevanceand quality of Reservestrategic and policyadvice to the DODThe number of ProvincialBusiness LiaisonForum structures functionalThe number of publicevents facilitated tomarket the ReserveSystemAnnualTargetReserve strategicand policy adviceprovided as andwhen required620Actual TargetAchievementReserve strategic andpolicy advice were providedas and whenrequired620Reasons for Over/Under AchievementAchieved. Amendmentsto the Defence Act (Act22 of 2010) as promulgatedon the 09December 2010Achieved. The Forumsstill have to undergo aprocess of vetting andscreeningAchieved. All plannedmarketing events wereconducted and achievedsuccessfullyEffect of Sub programme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Defence Reserve Direction Outputs has contributed positively to the Administration ProgrammePurpose to execute the Department overall management, administration and policy development.S U B P R O G R A M M E : D E F E N C EI N T E R N A T I O N A L A F F A I R SO v e r v i e wThe Defence International Affairs Division is mandated toprovide policy related products and strategic direction relatingto establishing bilateral and multilateral relations in thefield of defence. In addition the Division provides advice andsupport on international legal instruments within the contextof defence international affairs.The Division was actively involved in co-ordinating and providingpolicy direction in the following spheres:Provided advice to the Minister of Defence and theMilitary Veterans through the Secretary for Defence onkey defence international affairs policy issues and internationalengagements,Participated in the diplomatic activities of the AU,SADC and the UN multilateral organisations, and.Ensured that the DOD met its diplomatic obligations byservicing all existing defence co-operation agreements.In the year under review, the Division was instrumental innegotiating and concluding bilateral and multilateral agreementswith South Africa's foreign allies and internationalorganisations. In order to ensure that the conduct of internationalrelations by the DOD accords with government policy,the Division coordinated several departmental meetings toensure proper preparation for bilateral engagements with foreignpartners. The Division coordinated and supported theformulation of South African International Relations Policythrough participation in the Department of International50Relations and Cooperation (DIRCO) led scheduled meetingsand activities.The Division facilitated the processing and signing of theDefence Cooperation agreements/Memoranda of Understanding(MOUs) with countries such as Argentina,Zimbabwe and Botswana. The Division succeeded in thenegotiating and finalisation of defence co-operation agreementswith Ecuador and Kenya. However, the former isawaiting Ministerial consideration, while the latter will besigned at a period to be determined by the Minister.The Division participated during the planning of the SANDFcontingency evacuation plan for South African citizens in theevent of the situation deteriorating during the Southern Sudanreferendum. In this respect, the Note of Exchange betweenRSA and Uganda was prepared and finalised in order to facilitatethe airlifting of South African nationals from the Sudanto Uganda. A similar legal instrument in the form of an MOUwas finalised to provide legal and administrative protectionfor the deployment of the SA Navy element in a joint maritimepatrol with Mozambique to counter piracy on the IndianOcean.During the period under review, the Division led the co-ordinationand successful convening of obligatory defence internationalagreements such as bi-national Commissions, theJoint permanent Commission on Defence and Security(JPCDS), Defence Committees and SADC forums such asthe Inter-State Defence and Security Committee (ISDSC). Inparticular, these involved Mozambique, Algeria, Botswana,DRC, the USA, Namibia, China, Zimbabwe and the UK. Aspart of its core responsibility to represent the DOD at forumsconvened and/or led by the DIRCO.ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EThe Division provided reports on the state of defence relations,including progress on defence co-operation withFrance, Spain, India, Benin and Kenya. As the DOD beguninitiating formal defence relations with Cuba, the Divisionprovided valuable policy advice to a high level delegationtasked by the Minister to visit in order to initiate steps to formalisedefence relations.Notwithstanding the structural challenges that impacted oncontinuity, the Division was able to achieve its planned objectives.Structural transformation was necessitated by theupgrading of the function to a Divisional level from aDirectorate. Despite this, the current structure has proven tobe inappropriate and inadequate. A revised structure has beendeveloped and tabled for consideration.O b j e c t i v e s a n d M e a s u r e sThe Subprogramme Defence International Affairs providesthe Minister of Defence and the DOD with a foreign relationscapability and services.O u t p u t D e t a i lTable 4.16 below provides details of the DefenceInternational Affairs' Subprogramme outputs, performancemeasures and targets specified in the output table in the DODStrategic Plan FY2010/11.Table 4.16: Defence International Affairs Output Detail for the FY2010/11OutputAligned ForeignRelations Policywith GovernmentandDefence needsMarketing strategyand Plan ofthe DefenceForeignRelations PolicyForeignRelationsStrategyLegal instrumentsto informDefenceDiplomacyPerformanceIndicatorTimeliness, relevanceand quality of policyadvice and support tothe DODImproved compliancewith the policyDefence Diplomacyinformed by foreignpolicy and DOD foreignrelations strategyLegal instruments inline with the Constitutionalmandate, Governmentprescripts andinternational lawAnnualTargetCollaborativelydeveloped Defenceforeign policy that isaligned withGovernment policyInformation campaigntargetingDOD and othersocial partnersPosition Paper onDOD Foreign relationStrategyTimeliness, relevancequality servicingof legalInstrumentsActual TargetAchievementEngaged actively inSADC, AU, internationalforums wrt Def Coms andother bilateral meetings inpursuit of defence interestsLed the co-ordinationand successful conveningof obligatory defenceinternational agreementssuch as the BinationalCommissions, Joint permanentCommission onDefence and Security(JPCDS), DefenceCommittees and SADCforums such as the Inter-State Defence and SecurityCommittee (ISDSC)A draft Position Paper onDOD Foreign relationStrategy has been completedServiced various Def Co--operation agreements withkey international partnersReasons for Over/Under AchievementAchievedAchievedAchievedAchievedEffect of Programme / Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The Subprogramme Defence International Affairs successfully provided the Minister of Defence and the DOD with aforeign relations capability and services.S U B P R O G R A M M E : D E F E N C EF O R E I G N R E L A T I O N SO v e r v i e wThe Defence Foreign Relations (DFR) Subdivision has maintainedits defence representation abroad. Although a newDefence Office was opened in Cuba, the Defence Office inTunisia will be closed shortly, bringing the Subdivision backto its objective of 37 military diplomatic missions abroad. InMarch 2011, accreditation to Ghana on a non-residential basiswas received.ANNUAL REPORT FY 2010/2011 51

D E P A R T M E N T O F D E F E N C EThe Subdivision contributed to the promotion of the SouthAfrican foreign relation policy by facilitating DefenceCommittee meeting with Germany, the PRC, the USA and theUK, as well as the bilateral Joint Permanent Commissions onDefence and Security with respectively Namibia, Zimbabweand Botswana. The Subdivision also facilitated the attendanceby the Minister and a representative of C SANDF at the 6thMeeting of the African Chiefs of Defence Staff and Heads ofSecurity in Addis Ababa. At the same time, the 4th OrdinaryMeeting of the Specialised Technical Committee on Defence,Safety and Security met and was attended by a SANDF representative.The Defence Attachés supported the SA DefenceRelated Industry abroad through the facilitation of trade meetings.In order to provide strategic direction, staff teams visited variousDefence Attaché offices abroad, these offices includedEthiopia, Vietnam, Kenya and the DRC.The DOD VIP Lounge at the O.R. Tambo InternationalAirport continued to render a service to the members of theDOD and visiting foreign delegations. About 1 346 personsmoved through the lounge.During September 2010, the biennual African Aerospace andDefence Exposition was co-hosted with the SA DefenceIndustry. The Subdivision was responsible for coordinatingthe Foreign Visitors Programme whereby seventeen Ministersof Defence six Chiefs of Defence force; seven Chiefs ofArmy; 21 Chiefs of Air force; seven Chiefs of Navy and twoSurgeons General and/or their representatives were hostedduring the Defence Industry Exposition.During the year under review, the Subdivision focused on thepreparation of Defence Attachés designated for thechangeovers and no new courses were presented. The nextDefence Attaché course is scheduled for May 2011 to prepareDefence Attachés designate to deploy in July and December2011.Despite the structural misalignment and insufficient budgetallocation for operational requirements of Defence Attachéoffices, the subdivision has managed to reach the performanceoutputs that were within the direct control. Services andDivisions contributed to the development and maintenance ofthe Subdivision as part of their on going activities within thebroader context of defence diplomacy. In turn, theSubdivision has contributed positively to the purpose of theAdministration Programme.O b j e c t i v e s a n d M e a s u r e sThe Defence Foreign Relations Subprogramme purpose is toprovide the DOD and MOD with a foreign relations capabilityand services.O u t p u t sTable 4.17 below provides details of the Defence ForeignRelations Subprogramme outputs, performance indicatorsand targets as specified in the DOD Strategic PlanFY2010/11.Table 4.17: Defence Foreign Relations Output Detail for FY2010/11OutputDefence ForeignRelations capabilityand servicesPerformanceIndicatorLevel of compliancewith timely and accuratedelivery of consularservices asrequiredNumber of diplomaticmissionsAnnualTargetFull compliance37Actual TargetAchievementFull compliance38Reasons for Over/Under AchievementAchievedA Defence Office wasopened in Cuba duringOctober 2010. The officein Tunisia will be closedby May 2011 returningto the planned targetEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.DFR remained in the forefront in directing the DOD's foreign relations effort towards the region, the African continent andthe international community as a whole. The successful achievement of the objectives contributed positively to the purposeof Administration Programme to execute the DOD's overall management, administration and policy development.52ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ES U B P R O G R A M M E : O F F I C EA C C O M M O D A T I O NO b j e c t i v e s a n d M e a s u r e sThe Office Accommodation is a Subprogramme of theAdministration Programme (managed within GeneralSupport Subprogramme) and is responsible for managing thepayment of accommodation charges, leases and municipalservices as a direct result of the devolution of a portion of theNational Department of Public Works budget to nationaldepartments.O u t p u t D e t a i lTable 4.18 below provides details of the Office AccommodationSubprogramme output, performance indicator and targetas spesified in the DOD Strategic Plan FY2010.11.Table 4.18: Office Accommodation Subprogramme Output Detail for FY2010/11OutputPayment ofaccommodationcharges, leasesand municipalservicesPerformanceIndicatorPercentage expenditureaccording to planin respect of the servicelevel agreements withNational Departmentof Public WorksAnnualTarget100%Actual TargetAchievement100%Reasons for Over/Under AchievementAchievedANNUAL REPORT FY 2010/2011 53

Chapter 5D E P A R T M E N T O F D E F E N C EP R O G R A M M E 2 :F o r c e E m p l o y m e n tO v e r v i e wDuring the year under review, the SANDF maintained what iscalled a "mission based" approach as opposed to a "militarythreat dependent" approach. This allowed for the requiredflexibility to deal with a number of issues within a volatileand unpredictable environment.The SANDF established a situational awareness system thatincluded strategic early warning, regional military cooperation,the conducting of joint, interdepartmental and multinational(JIM) military exercises. It maintained the ability toreact quickly to safety and security support requirementsfrom other government departments.On average a total of 2 238 1 members, including 148 Reservemembers, were successfully deployed for the FY2010/11 intwo peace support operations, namely Operation MISTRALin the Democratic Republic of Congo (DRC) and OperationCORDITE in the Sudan, as well as three general militaryassistance operations, namely Operation TEUTONIC in theDRC, Operation VIMBEZELA in the Central AfricanRepublic (CAR) and Operation COPPER. Operation COP-PER is a new operation whereby the RSA Government is renderingsupport to the Mozambique Government as requested,to curb piracy in the Mozambique Channel. Operation TEU-TONIC in the DRC was terminated at the end of October2010 after all the objectives for the operation were achieved.The SANDF continuously provided support to governmentdepartments in pursuance of national security objectives andgovernment initiatives. In realising these, the SANDF providedsafety and security-related support to the South AfricanPolice Service (SAPS). During the 2010 FIFA World Cup(Operation KGWELE), the SANDF cooperated with theSAPS by deploying on average 4 573 members per dayensuring the maintenance of safety and security. Assistancewas also provided during the xenophobia incidents, publicservice strike, the opening of Parliament and the voter registrationfor local elections. The SANDF continued to partnerwith the SAPS by providing personnel, helicopters and fixedwing aircraft for Operation DUTY CALLS during the festiveseason for the combat of crime.In supporting the people of South Africa, the SANDF built aBailey bridge in April 2010 and a pedestrian suspensionbridge during September 2010 in the Umtata area in theEastern Cape. These bridges were built and donated by theSA Army Engineers to provide safe and easy access to thecommunities. The SANDF provided assistance with firefightingin the Western Cape, Northern Cape, Eastern Capeand Limpopo Provinces, search-and-rescue at sea and on landin the Eastern Cape, Free State and KwaZulu-Natal Provincesas well as support during the floods in the Northern Cape(Upington area).Subsequent to the cabinet decision that the SANDF shouldtakeover the responsibility for border safeguarding, theSANDF changed the limited concept of borderline control tothat of border safeguarding. Operation CORONA has beendesigned to encompass the safeguarding of the land, air andmaritime borders simultaneously. The SANDF has beendeployed in Limpopo (Pontdrift and Musina), Mpumalanga(Macadamia) and Kwa-Zulu Natal (Ndumu) Provinces. Thedeployment of the SANDF for border safeguarding ensuredthat 20 613 illegal immigrants were apprehended, 263 criminalswere arrested, 21 stolen vehicles were recovered, 14weapons were recovered, 18 livestock were recovered andvarious narcotics were confiscated. The SANDF also providedcontrol of the maritime and airspace environment. Thissupport was provided by the SANDF through the collateralvalue of core conventional capabilities.The Joint Operations Division planned, co-ordinated anddirected seven JIM force preparation activities. Theseexclude the Special Forces exercises and the support to foreigndefence force exercises conducted in accordance withthe Joint Force Employment concept and existing bilateral/multilateral agreements.During the year under review, the Joint Operations Divisionutilised 922 Reserve members to alleviate staff shortages and1In the Minister's budget speech inputs, the figures for external deployments are 2 045 and they represent only deploymentsup until 01 March 2011. Op COPPER also played a major role in increasing the average figure to 2 238.54ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C Ecapacity problems; and to address structural inadequacies inthe various support environments.The land claims on the Madimbo training area remainedunresolved although various meetings were scheduledbetween the Department of Rural Development and LandReform, the Regional Land Claims Commissioner and theDOD to resolve the land claims. The risk and impact of thisclaim will be that, if successful, there will be a gap on the borderthat could be exploited for the illegal crossing of peopleand merchandise, and as a consequence, undermine theSANDF deployments for border safeguarding.Strategic lift capability remains a challenge which negativelyimpacts deployments and sustainment of the SANDF externaloperations, as well as the deployment and sustainment ofthe SANDF reaction force. The chartering of aircraft andships is a short-term solution and comes at a high price.The total cost for the SANDF support to the preparation andhosting of the 2010 FIFA World Cup, (Operation KGWELE)was Rm276. The SANDF received an additional allocationfrom the National Treasury of Rm200 and the deficit ofRm76 was obtained by reprioritising the Joint OperationsDivision Budget.During the reporting period, the Division focused on ensuringthe safety and security of the RSA and its people by maintainingthe employment of military capabilities as directed by theauthorities. In addition, the SANDF continued to execute itsmandate to defend the RSA's sovereignty and its territorialintegrity through the Force Employment Programme.Special Operations provides and employs a specialoperations capability within the approved SpecialForces mandate for the SANDF. Funding is distributedaccording to the number and size of units, systems andequipment operating, maintenance requirements and thenumber of Special Forces operations, force preparationexercises and training courses.Regional Security provides for the deployment offorces in support of South Africa's commitment toregional, continental and global security. Funding is distributedaccording to the number, size and duration ofdeployments, and systems and equipment operating andmaintenance requirements.Support to the People provides for the internal deploymentof forces in support of the SAPS and otherGovernment departments. Funding is distributedaccording to the number, size and duration of deployments,and systems and equipment operating and maintenancerequirement.Defence Capability Management provides for theplanning and control of joint, interdepartmental andmulti-national (JIM) military force preparation exercises;the development of joint force employment commandand control plans; and the management of capabilitydevelopment. Funding is distributed according tothe needs of exercise control equipment for JIM militaryexercises and contractual obligations for the developmentof joint force employment command and controlplans and capability development.P u r p o s e o f t h e P r o g r a m m eThe Force Employment Programme provides and employsdefence capabilities, including an operational command andcontrol capability that ensures the successful conduct of alloperations as well as all joint, interdepartmental and multinationalmilitary training exercises.S u b p r o g r a m m e sStrategic Direction formulates and controls strategies,policies and plans for the employment of forces.Funding is based on the cost of operating a joint operationsdivision headquarters.Operational Direction provides direction to joint andmultinational task forces and joint tactical headquartersthrough an operational level headquarters. Funding isdistributed according to the cost of operating one operationaland nine tactical headquarters.O b j e c t i v e s a n d M e a s u r e sProvide and manage defence capabilities, including an operationalcapability, to conduct operations and JIM militaryexercises by:Providing and employing special operations capabilityin accordance with national requirements;Conducting an average of 12 2 external peace missionsper year in accordance with requirements to promotepeace and security;Conducting 21 joint, interdepartmental and multinationalmilitary force preparation exercises over the next 3years (excluding Special Forces and multinational airtransport exercises); andConducting an average of 4 operations per year in supportof other Government departments and complyingwith international obligations.2As Instructed in Chief SANDF Directive 133/2009: Short and Medium Term Force Employment Requirements andGuidelines: Period 2010/11 to 2013/14.ANNUAL REPORT FY 2010/2011 55

D E P A R T M E N T O F D E F E N C EO u t p u t D e t a i lTable 5.1 below reports of the achievement of the outputs,performance indicators and targets as specified in the DODStrategic Plan FY2010/11.Table 5.1: Force Employment Programme Output Detail for FY2010/11OutputPerformanceIndicatorAnnualTargetActual TargetAchievementReasons for Over/ UnderAchievementRegional SecurityPeace SupportOperationsNumber of Large- 3 toMedium 4 Scale PeaceSupport OperationsNumber of Small- 5Scale Peace SupportOperationsNumber of Small ScaleGeneral MilitaryAssistance Operations444203The SANDF participated intwo large to medium scalePeace Support Operationsnamely, Operations MIS-TRAL (DRC) and CORDITE(Sudan)The SANDF received no furtherrequests to participate inmedium to large scale PeaceSupport OperationsNote. Deployments in PeaceSupport Operations aredependent on requests fromthe United Nations and/orAfrican Union and the securitysituation that can change atany moment leading to additionalrequests being receivedThe SANDF received norequests from the UnitedNations and/or AfricanUnion to participate in smallscale Peace SupportOperationsNote. Deployments in PeaceSupport Operations aredependent on requests fromthe United Nations and/orAfrican Union and the securitysituation that can change atany moment leading to additionalrequests being receivedThe SANDF conducted threesmall-scale general militaryassistance operations namelyOperations TEUTONIC(DRC), VIMBEZELA (CAR)and COPPER (SANDF assistedby deploying SANDFassets in the MozambiqueChannel for counter piracyoperations)3Large-scale deployment. Unit-size joint task force/formed elements with command and control capabilities, main equipmentincluding tailor-made support and specialist elements from the force providers.4Medium-scale deployment. Unit-size (minus) joint task force/formed elements with command and control capabilities, mainequipment including tailor-made support and specialist elements from the force providers.5Small-scale deployment. Sub-unit joint task force/formed elements including specialised elements and tailor-made supportfrom force providers.56ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 5.1: Force Employment Programme Output Detail for FY2010/11 (continued)OutputPerformanceIndicatorAnnualTargetActual TargetAchievementReasons for Over/ UnderAchievementOperation TEUTONIC (DRC)was planned to be terminatedon 31 March 2010, but followinga request by the DRC government,the missions havebeen extended (see JointOperations Directives056/2010 and 061/2010). ThisOperation's focus was to participatein the process to registercandidates for the DRCArmed Forces. After all objectiveswere reached OperationTEUTONIC was terminatedon 31 October 2010. ClosingAuthority: Joint OperationHeadquarters Instruction103/2010: Closing downOperation TEUTONIC dated20 August 2010The SANDF received nofurther requests to participatein general military assistanceoperationsNote. Deployments in generalmilitary assistance operationsare dependent onrequests from the UnitedNations and/or AfricanUnion and the security situationthat can change at anymoment leading to additionalrequests being receivedSupport to the PeopleInternalOperationsPercentage compliancewith approved bordersafeguardingtasks(Operation CORONA)100%100%AchievedPercentage compliancewith approved safetyand security supportrequests(Operation PROSPER)100%100%AchievedPercentage compliancewith approved disasteraid and disaster reliefrequests (OperationCHARIOT)100%100%AchievedPercentage compliancewith approved searchand rescue requests(Operation ARABEL-LA)100%100%AchievedPercentage compliancewith requirements forsupport to the 2010FIFA World Cup(Operation KGWELE)100%by 31 July 2010100%AchievedANNUAL REPORT FY 2010/2011 57

D E P A R T M E N T O F D E F E N C ETable 5.1: Force Employment Programme Output Detail for FY2010/11 (continued)Output PerformanceIndicatorDefence Capability ManagementControlledJIM ExercisesThe number of JIMexercises (excludingSpecial Forces exercises)controlled annuallyAnnualTargetActual TargetAchievementReasons for Over/ UnderAchievement8 6Exercise OXIDE was postponedto FY2011/12 by theFrench Navy. The SANDFdoes not have any controlover decisions made byForeign Forces with regardsto exercises where the SANDFis invited to participateEx TRANSOCEANIC wascancelled by the SouthAfrican Navy, due to the factthat they were unable toattend the planning meetingin Argentina prior to theexerciseEffect of Programme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Force Employment Programme's Outputs has contributed positively to the Programme's Purposeto provide and employ defence capabilities, including an operational capability to successfully conduct all operationsand joint interdepartmental and multinational (JIM) military exercises.J O I N T , I N T E R D E P A R T M E N T A L A N D M U L T I N A T I O N A L E X E R C I S E STable 5.2 provides feedback on Force Employment Programme Joint, Interdepartmental and Multinational Exercises forFY2010/11.Table 5.2: Force Employment Programme Joint, Interdepartmental and Multinational Exercises forthe FY2010/11.Exercise Name AimScheduling 2010/11Actual AchievementInterdepartmental ExercisesExercise SHIELDExercise WAYSIDECommand post and fieldtraining exercise in preparationfor OperationKGWELECommand post exercisein preparation forOperation KGWELE(2010 FIFA World Cup)Maintenance of theProvincial Chemical,Biological andRadiological ResponseTeams and interdepartmentalco-operation forthe management ofChemical, Biological andRadiological incidentsApril/MayMayExercise SHIELD took place during April 2010with all the Services and relevant Divisions ofthe SANDF as well as SAPS participating. Thepurpose of the exercise was successfully executedin order to confirm and exercise commandand control for the conduct of Airspace Controlin the RSA especially during the hosting of the2010 FIFA World CupThe purpose of this exercise was to maintain theProvincial Chemical, Biological and RadiologicalResponse and interdepartmental co-operation forthe management of Chemical, Biological andRadiological incidents. This exercise took placeduring May 2010 and was aimed at the provisionof Chemical, Biological and Radiologicalresponse support during the 2010 FIFA WorldCup58ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 5.2: Force Employment Programme Joint, Interdepartmental and Multinational Exercises forthe FY2010/11. (continued)Exercise Name AimScheduling 2010/11Actual AchievementMultinational ExercisesExercise OXIDEincorporatingExerciseBOURBONExercise TRANS-OCEANICExercise BELLBUOYExercise FAIR-WAY BUOYExerciseATLASURField training exercise todevelop and maintain maritimeco-operation at theoperational and tacticallevels between the SANavy and French forcesbased in La RéunionCommand post exerciseto exercise naval controland guidance of shipping(NCAGS) and to representthe SANDF as a full-timemember of the TRANS-OCEANIC organisationCommand post exerciseto exercise NCAGS and torepresent the SANDF as afull-time member of thePacific and Indian OceanShip Work GroupCommand post exercise toexercise NCAGS withinSouthern AfricanDevelopment CommunitycontextExercise to maintain andpromote maritime co-operationbetween the SANavy and South Americancountries (Argentina,Brazil and Uruguay)NovemberLa RéunionAugustMayJuneNamibiaSeptemberArgentinaExercise OXIDE was postponed to FY2011/12 bythe French Navy. The SANDF does not haveany control over decisions made by ForeignForces with regards to exercises where theSANDF is invited to participateEx TRANSOCEANIC was cancelled by the SouthAfrican Navy, due to the fact that they wereunable to attend the planning meeting inArgentina prior to the exerciseThe participation in the conduct of Exercise BELLBOUY's main purpose was of ensuring cooperationbetween countries sharing the same oceansin order to provide for safer Sea Lines ofCommunication. This was a naval exercise, executedin Australia, between various countries.The purpose of this exercise was to exercise thenecessary procedures for the guiding of ships inthe Pacific Ocean. It was attended by twoSANDF staff officers and no SANDF mainequipment was utilisedExercise FAIRWAY BUOY was scheduled to beexecuted in June 2010 on verbal request from theNamibian Defence Force was postponed toAugust 2010. The Namibian Defence Force wasresponsible for the planning and arrangementthereof. This naval exercise was executed inNamibia over the period 02 August 2010 to 18August 2010. The main purpose was to ensureco-operation with countries sharing the sameoceans in order to provide for safer Sea Lines ofCommunication. The relevant navies of theSouthern African Development Community participatedin a Command Post Exercise (CPX)with the purpose to exercise the necessary proceduresfor guiding of ships in the Indian andAtlantic Oceans. It was attended by nine SANDFmembers and no SANDF main equipment wasutilisedExercise ATLASUR was an exercise between thenavies of SA, Argentina, Brazil and Uruguay.A Senior Staff Officer from the Joint OperationsDivision attended the final planning conferencein Argentina over the period 28 June 2010 to 02July 2010. The exercise was executed over theperiod 27 October 2010 to 10 November 2010.The SANDF contingent deployed consisted ofthe SAS DRAKENSBERG, the SAS CHAR-LOTTE MAXEKE, 1 x Operational Diving Team,1 x Maritime Reaction Section, 1 x Oryx helicopterwith its support team, 1 x Submarine Logisticsupport team, 1 x Submarine OperatingAuthority team and a medical teamANNUAL REPORT FY 2010/2011 59

D E P A R T M E N T O F D E F E N C ETable 5.2: Force Employment Programme Joint, Interdepartmental and Multinational Exercises forthe FY2010/11.Exercise Name AimScheduling 2010/11Actual AchievementExercise IBSAMARExercise to maintain andpromote maritime cooperationbetween the SANavy and SouthAmerican countries(Argentina, Brazil andUruguay)SeptemberExercise IBSAMAR took place over the period 07to 27 September 2010 in the RSA between India,Brazil and South Africa with the aim to maintainand promote maritime co-operation between thenavies. The SANDF contingent participating inthis exercise consisted of the SAS DRAKENS-BERG, the SAS GALESHEWE, SAS AMATOLAand SAS SPIOENKOP60ANNUAL REPORT FY 2010/2011

Chapter 6D E P A R T M E N T O F D E F E N C EP R O G R A M M E 3 :L a n d w a r d D e f e n c eO v e r v i e wIn the year under review, the South African Army (SAArmy)fulfilled all its internal and external commitments, notwithstandingthe fact that it is severely overstretched, especially inthe infantry, engineer and support capabilities.Approximately 85% of force levels required by C SANDFwere provided. Deviations were as a result of logistics andhuman resource challenges experienced, especially theunavailability and / or un-serviceability of prime missionequipment (PME) (A, B, C and D vehicle fleets), shortages ofcertain ammunition types, medical health status of personnel,shortage of personnel in specific musterings, ie technical andhospitality service personnel as well as suitable qualified andknowledgeable instructors to ensure quality training andskills transfer.The SA Army's commitments for the year under review,included inter alia, the provisioning of landward forces forPSO deployment in the Democratic Republic of the Congo(DRC) (Op MISTRAL) and Sudan (Op CORDITE); trainingmissions in the Central African Republic (CAR) (Op VIM-BEZELA) and the DRC (Mission THEBE); border safeguardingdeployments on the RSA/Zimbabwe, Mozambique/RSA and Swaziland/RSA borders; and internal deployment inco-operation with the South African Police Service (SAPS).In the DRC 109 SA Army members are on the verge of completingtraining of two rapid deployment battalions (FARDC42 & 43 Bns) consisting of six infantry companies trainedfrom lower / sub-unit level. In total 1 780 FARDC memberswere trained. In the DRC soldiers were handed over to theMinister of Defence of the DRC after completing a plannedcycle of training in October 2010.The SAArmy provided 8 923 members for deployment to theUnited Nations (UN) and African Union (AU) Missions inAfrica, border safeguarding and internal deployment.Learning opportunities were afforded to 93 members belongingto 11 foreign defence forces namely: Botswana,Zimbabwe, Namibia, Rwanda, South Korea, Nigeria,Republic of Congo, Pakistan, CAR, India and Tanzania at SAArmy Centres of Excellence.The support to the SAPS and the Department of Health by theSA Army forces provided during the national public servicestrike by government employees in August/September 2010was among the 'not initially planned for' milestones. In thisregard, 1 868 members were deployed. This was over andabove the forces provided for the successful hosting of 2010FIFA World Cup (Op KGWELE).The SAArmy demonstrated its collateral utility by contributingto the construction of a suspension bridge in conjunctionwith the National Department of Public Works (NDPW).Limited construction work by SAArmy engineers is in stagesof completion at a number of facilities. The Works Regimentrefurbished the hospice in the Lenz military base and theRegiment was transferred to Joint Logistics as an operationalcapability on 1 April 2011.The rejuvenation of the support musterings, particularly inthe Technical Service Corps (TSC), Ordinance Service Corps(OSC), Signals, Catering and Ammunition Corps environmentsremains a challenge as only a limited number ofMSDS members could be accommodated due to financiallimitations. The retention of qualified members is not alwaysguaranteed and this negatively impacts on the sustainmentcapacity and the ability to support SA Army forces and unitsin their force employment and preparation roles.In the wake of the increased operational tempo in external,internal and border safeguarding deployments, the SA Armyutilized its Reserve component substantially to augmentshortages in its Regular component. Approximately 18 000call-ups were issued for a variety of duties including administrative,guards training and operations. Despite this, thedefined end state for the SA Army Reserves could not beachieved, due to the low rate of MSDS members entering theReserves and a lack of funding in general.All current SA Army projects are essentially partial acquisitionsand do not provide for the full capability requirementsin accordance with the Defence Review or the SA ArmyForce Design/Structure due to current funding shortfalls.Operational gaps due to shortages of PME are already evidentin certain capability areas due to end of life-cycle, obsolescence,under-funding and late delivery dates. Currentfunding levels will not be able to sustain the SAArmy's PMErequirement. An achievement however, in terms of the rejuvenationof PME, is the 35mm Mk V Gun system that hasbeen re-commissioned.ANNUAL REPORT FY 2010/2011 61

D E P A R T M E N T O F D E F E N C EIn summary, the challenges faced by the SA Army remainedthe critical shortage and continued loss of scarce skills, theage and health status of the HR component and the unsatisfactorystatus of the A, B and D vehicle fleets, PME, ammunitionand facilities, as well as the lack of critical structures toproduce specific outputs in support of force preparation andoperations. These challenges are being addressed throughvarious initiatives, but owing to the cost and time, they willnot be fully mitigated in the near future. However, the implementationof a technical allowance in the SA Army and theSANDF at large will go a long way to alleviate continued lossof scarce skills in the technical service environment. Salaryincreases as instituted by the Minister of Defence have alsoreduced the high outflow figures but have not stopped them.Notwithstanding the complex challenges and limitedresources, the SA Army provided combat-ready forces andsupported landward operations as required. The SA Armyremains committed to the achievement of its constitutionalobligations.P u r p o s e o f t h e P r o g r a m m eThe Landward Defence Programme provides prepared andsupported landward defence capabilities for the defence andprotection of South Africa.S u b p r o g r a m m e sStrategic Direction directs, orchestrates and controlsthe South African Army in achieving its mission to provideprepared and supported landward capabilities forthe defence and protection of South Africa. Funding isbased on the cost of operating the landward defenceheadquarters and managing centralised funds for scarcecommodities and specialist services.Infantry Capability provides combat-ready infantrycapabilities through training, preparing, exercising andsupporting mechanized, motorized and airborne infantryunits. Funding is distributed according to the numberand size of units, systems and equipment operating andmaintenance requirements, and the number of forcepreparation exercises and training courses.Armour Capability provides combat-ready armourcapabilities through training, preparing, exercising andsupporting tank and armoured car units. Funding is distributedaccording to the number and size of units, systemsand equipment operating and maintenance requirements,and the number of force preparation exercisesand training courses.Artillery Capability provides combat-ready artillerycapabilities through training, preparing, exercising andsupporting composite and light artillery units. Fundingis distributed according to the number and size of units,systems and equipment operating and maintenancerequirements, and the number of force preparation exercisesand training courses.Air Defence Artillery Capability provides combatreadyair defence artillery capabilities through training,preparing, exercising and supporting air defenceartillery units. Funding is distributed according to thenumber and size of units, systems and equipment operatingand maintenance requirements, and the number offorce preparation exercises and training courses.Engineering Capability provides combat-ready engineeringcapabilities to ensure mobility and establishinfrastructure during exercises and deployments,through training, preparing, exercising and supportingfield and construction engineer units. Funding is distributedaccording to the number and size of units, systemsand equipment operating and maintenance requirements,and the number of force preparation exercisesand training courses.Operational Intelligence provides combat-ready operationalintelligence capabilities to enable successfulplanning and execution of operations, through training,preparing, exercising and supporting intelligence units.Funding is distributed according to the number and sizeof units, systems and equipment operating and maintenancerequirements, and the number of force preparationexercises and training courses.Command and Control Capability provides combatreadytactical command and control capabilities for integratedforces during force preparation and forceemployment. Funding is distributed according to thenumber and size of units, systems and equipment operatingand maintenance requirements, and the number offorce preparation exercises and training courses.Support Capability provides first and second line supportcapabilities to units and bases and ensures supportto deployed combat units through training, preparing,exercising and supporting of first and second line maintenanceunits and workshops. Funding is distributedaccording to the number and size of units, systems andequipment operating and maintenance requirements, thenumber of force preparation exercises and trainingcourses and product systems requirement.General Training Capability provides general trainingcapabilities through basic military training, junior leadertraining, common landward training and command andmanagement training at the Training Depot (and decentralizedunits), SA Army Gymnasium, the CombatTraining Centre and the SA Army College. Funding isdistributed according to the number and size of units,equipment operating and maintenance requirements,and the number of force preparation exercises and trainingcourses.Signal Capability provides combat-ready signal capa-62ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C Ebilities to ensure command, control and communicationsduring exercises and deployments, through training,preparing, exercising and supporting signal units.Funding is distributed according to the number and sizeof units, systems and equipment operating and maintenancerequirements, and the number of force preparationexercises and training courses.O b j e c t i v e s a n d M e a s u r e sDefend and protect South Africa and its territory by:Preparing an infantry capability to provide 3 infantrybattalions a year for external deployment, 1 battalion asChief of the South African National Defence ForceReaction Force, 1 multi-role battalion for internal safetyand security, 1 battalion in support of internal securityoperations and 4 battalions involved in exercises;Preparing an armoured capability by exercising 1 tankregiment and 1 armoured car regiment with onesquadron for internal deployment a year;Preparing an artillery capability by exercising 1 compositeartillery regiment and 1 light (airborne) artillerybattery, having 1 light artillery battery in reserve and 1battery for internal deployment a year;Preparing an air defence artillery capability by exercising1 air defence artillery regiment and 1 light (airborne)air defence artillery battery, and having the 1 light airdefence artillery battery as part of the mobile capabilityand one battery for internal deployment a year;Preparing an engineer capability by providing 3 sustainedcomposite engineer squadrons for externaldeployment, 1 composite engineer squadron for internalreserve and exercising 1 light (airborne) engineersquadron a year; andPreparing a signal capability by providing 2 signal regimentsa year for external deployment, internal reserveand involvement in exercises.O u t p u t D e t a i lTable 6.1 below reports of the achievement of the outputs,performance indicators and targets as specified in the DODStrategic Plan FY2010/11.Table 6.1:Landward Defence Programme Output Detail for FY2010/11OutputPerformanceIndicatorAnnualTargetActual TargetAchievementReasons for Over/Under AchievementInfantry CapabilityMechanisedCapabilityAirborneCapabilityMotorisedCapabilityNumber of unitsprepared accordingto force requirementsNumber of unitsprepared accordingto force requirementsNumber of unitsprepared accordingto force requirementsOne battalion combatreadyfor conventionalexercisesOne parachute batallioncombat-ready forconventional exercisesand Chief of theSANDF reserveThree battalions combat-readyfor peacesupport operationsTwo battalions combatreadyfor conventionalexercisesTwo battalions combatreadyat all times forinternal reserveOne battalion was available forconventional exercises, howeverdid not participate in anyconventional exercise thereforecombat readiness could not beestablishedOne parachute batallionwas combat-ready for conventionalexercises (YOUNGEAGLE) and Chief of theSANDF reserveThree battalions werecombat-ready for peace supportoperations and deployedin the DRC and SudanOne battalion was combatreadyfor conventional exercises,however, the other battaliondid not participate in any conventionalexercise thereforecombat readiness could not beestablishedTwo battalions were combat-readyat all times for internalreserve and were utilised inOp CORONA (Border safeguarding)AchievedAchievedAchievedAchievedAchievedANNUAL REPORT FY 2010/2011 63

D E P A R T M E N T O F D E F E N C ETable 6.1:Landward Defence Programme Output Detail for FY2010/11 (continued)OutputPerformanceIndicatorAnnualTargetActual TargetAchievementReasons for Over/ UnderAchievementArmour CapabilityTankCapabilityArmouredCarCapabilityArtillery CapabilityNumber of unitsprepared accordingto force requirementsNumber of unitsprepared accordingto force requirementsOne tank regiment(minus) combat-readyfor conventionalexercisesOne armoured car regiment(minus) combatreadyfor conventionalexercisesOne tank regiment(minus) was combat-readyfor conventional exercises(DIBETSA and KUTL-WANO)One armoured car regiment(minus) was combatreadyfor conventionalexercises (DIBETSA andKUTLWANO)AchievedAchievedCompositeArtilleryNumber of unitsprepared accordingto force requirementsOne composite artilleryregiment (minus) combat-readyfor conventionalexercises (sustained)One light (parachute)artillery battery combat-readyfor conventionalexercises andChief of the SANDFreserve (sustained)One composite artilleryregiment (minus) wascombat-ready for conventionalexercises (sustained).The capability participatedin an integratedcorps conventional exerciseunder the auspices ofthe School of ArtilleryOne light (parachute)artillery battery was combat-readyfor conventionalexercises (YOUNGEAGLE) and Chief of theSANDF reserve (sustained)AchievedAchievedAir Defence Artillery CapabilityCompositeAir DefenceArtilleryCapabilityNumber of unitsprepared accordingto force requirementsOne air defenceartillery regiment(minus) combat-readyfor conventional exercisesOne light (parachute)air defence artillerybattery combat-readyfor conventional exercisesand Chief of theSANDF reserveOne air defence artilleryregiment (minus) was notcombat-ready for conventionalexercises but wasused in its secondary role(infantry)One light (parachute) airdefence artillery batterywas trained, but not fullycombat-ready for conventionalexercises and Chiefof the SANDF reserve dueto a lack of equipmentNo unit exercises wereconducted therefore criticalelements of the capabilitywere not evaluatedin terms of combat readinessThe Regimental Headquartersstructure wasstaffed and equipped butdid not conduct any trainingas main equipmentwas not available andonly recommissioned latein the financial yearOnly a sub-unit of theMobile Air DefenceSystem could be provideddue to the shortage ofequipmentPartially AchievedThe capability was parachutetrained but the requisiteequipment was notdelivered by industry asplanned. Commissioningof the equipment will takeplace in the short tomedium term64ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 6.1:Landward Defence Programme Output Detail for FY2010/11 (continued)OutputPerformanceIndicatorAnnualTargetActual TargetAchievementReasons for Over/ UnderAchievementEngineer CapabilityFieldEngineerCapabilityNumber of unitsprepared accordingto force requirementsOne engineer regiment(minus) combat-readyfor conventional exercisesThree compositesquadrons combatready for peace supportoperationsOne compositesquadron for internaldeployment asrequired (sustained)One light (parachute)field engineersquadron combatreadyat all times forChief of the SANDFreserve and conventionalexercisesOne engineer regiment(minus) was combat-readyfor conventional exercises(SUPER SAPPER)Three compositesquadrons were combatready for peace supportoperations and utilised inthe DRC, Sudan and theCAROne composite squadronfor internal deployment asrequired (sustained) in OpCORONAOne light (parachute) fieldengineer squadron wascombat-ready at all timesfor Chief of the SANDFreserve and conventionalexercise (sustained)(YOUNG EAGLE)AchievedAchievedAchievedAchievedGeneral Training CapabilityGeneral trainingforRegular andReserve membersNumber of learnerson planned courses4 709 13 825Partially AchievedFive courses were cancelleddue to insufficientnominations. 37 courseswere not conducted at fullstrength as plannedbecause of unavailabilityof learners due to deployment.Some learners withdrewfor medical reasonsSignal CapabilitySignalCapabilityNumber of unitsprepared accordingto force requirementsTwo signal regiments(minus) combat-readyfor conventional exercisesand peace supportoperationsTwo signal regiments(minus) were combatreadyfor conventionalexercises (YOUNGEAGLE) and peace supportoperations in theDRC and SudanAchievedEffect of Programme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Landward Defence Programme's Outputs has contributed positively to the Programme'sPurpose to provide prepared and supported landward defence capabilities for the defence and protection of SouthAfrica.1The original target as per the DOD Strategic Plan FY 2010/11 was 4 375, however this was increased to 4 709.ANNUAL REPORT FY 2010/2011 65

D E P A R T M E N T O F D E F E N C EP L A N N E D E X E R C I S E S ( S E R V I C E U N I Q U E )Table 6.2 provides feedback on Landward Defence Programme unique exercises that were planned for FY2010/11.Table 6.2: Landward Defence Programme Planned Exercises (Service Unique) for the FY 2010/11Exercise: Name and Aim Scheduling 2010/11 Actual AchievementExercise SEBOKA. Conventional exercise forone Brigade (minus)Exercise YOUNG EAGLE. Conventional exercisefor one Airborne Brigade (minus) in compliancewith C SANDF reserveNovemberFebruaryThe exercise was replaced by a number of formationspecific exercises, namely Ex DIBETSA, ExKUTLWANO and Ex SUPER SAPPER, in preparationfor the command post exercise, ExerciseNDLOVUTraining objectives for MSDS integrated trainingwere not achieved in totality due to a lack ofleader group training at the tactical level. The SAArmy will in future focus on the empowermentof the junior leader group at tactical level toensure proper execution of TTPs and doctrineKey personnel of regular units were exercised at abrigade level planning session and training66ANNUAL REPORT FY 2010/2011

Chapter 7D E P A R T M E N T O F D E F E N C EP R O G R A M M E 4 :A i r D e f e n c eO v e r v i e wDuring the year under review, the South African Air Force(SAAF) has again demonstrated its dependability in deliveringon its mandate despite the diverse challenges encounteredduring FY2010/11. The SAAF managed to keep combatreadiness at the required levels and ensured that 98,6% of theplanned flying hours were achieved. In total 33 930 flyinghours were generated which included amongst others internaloperational missions, force preparation activities, support toSANDF contingents outside RSA in support to governmentimperatives. The Air Force Reserve Squadrons generated 2860 hours during the year under review. This figure indicatesthat the Air Force Reserves contributed 8,4% of the AirForce's total flying hours and 17.5% of the force employmenthours. The successes of the Air Force can be attributed to thededication and commitment of the Air Force personnel whohad continually demonstrated dependable skill and loyaltyunder challenging circumstances. However, these achievementscame at a cost of lack of future assurance in terms of theAir Force's diverse capabilities' integrity and sustainability.There was a marked and visible increase in the Air Force'scontribution towards Defence Diplomacy during the yearunder review. These include flying of VVIPs and VIPs duringthe reporting period. The support towards DefenceDiplomatic activities is regarded as an essential contributiontowards the country's first line of defence within the context ofconflict prevention and peaceful resolution of conflicts. In thisregard the Air Force has managed to meet its mandatenotwithstanding challenging conditions. The considerablychanged scope and frequency of activities of the RSA government'sinvolvement in regional and international affairs from1994 to date has a direct impact on the current SAAF availableresources. During the Africa Aerospace and DefenceExhibition (AAD) held in September 2010, 28 Air ForceChiefs or representatives were hosted with the aim to strengthenmilitary relations with these countries and to discuss possibleareas of future cooperation.The SAAF has supported different Joint OperationsRequirements for external operations and internal exercises.Within the external operations domain the Air Force providedsustainment flights to the external SANDF operations.Successful exercises with foreign countries included participationin the naval exercise held on the East Coast of SouthAfrica with Brazil, India and the South African Navy. Thesecombined efforts have contributed in enhancing the AirForce's expertise in combined maritime operations.In keeping with the mandate of providing support to the peoplethe Air Force provided support to the people by executing15 flights in fire-fighting operations, 34 flights during medicaland casualty evacuationsa and 9 flights searching for persons.The 2010 FIFA World Cup was the RSA's highlight event thatrequired high level of expertise in airspace security and continuoussurveillance and monitoring. During this event theNational Airspace Security was delegated to the SAAF viathe National Joint Operations Centre. Over this period, theSAAF committed diverse assets and resources such as controlsectors, different tactical mobile radar systems, Hawk andGripen supersonic fighters, helicopters, Electronic Warfare(EW) capabilities and Intelligence SurveillanceReconnaissance (ISR) capabilities.Utilizing these diverse capabilities, the SAAF managed toscreen 12 921 aircrew of which 6 were rejected as undesirable,conducted 64 739 flight authorisations, 347 combat airpatrols, took appropriate action against 65 non-compliant aircrafts,carried out 51 interceptions and diverted 9 aircraftaway from the prohibited flying zones. The technologicaledge of the Gripen's data link, advanced airborne radar andIIR pod proved to be a valuable investment as it provided realtime information simultaneously to diverse users during theair defence operations. Opportunities to use Air Power to supportGovernment security and anti-crime initiatives with newtechnology were fully exploited.The Hawk lead in fighter trainers were delivered and handedover to the Air Force. Integration and phasing in of the systeminto the SAAF is essentially completed but diverse challengescontinue to prevail due to insufficient operational funding.During the year under review, 9 crew members were quali-ANNUAL REPORT FY 2010/2011 67

D E P A R T M E N T O F D E F E N C Efied. The lack of steady state contract for the Hawk capabilitywill continue to negatively impact on the sustained longterm combat and mission readiness of this capability.The Helicopter Capability has served as a paramount asset toboth internal and external operations. Long lead times oncomponents required by the Lynx and late approval of aninterim support contract for the Rooivalk system had a directimpact on the cash flow of the capability area. The orderedcommitments, humanitarian support and search and rescueoperations were honoured.The Side-by-Side pupil pilot training by Babcock FlyingAcademy at Air Force Base Swartkop was conducted and dueobservations were made regarding its overall impact on theSAAF pupil pilot training efforts.The Avionic retrofit of the PC7 MKII aircraft progressed asplanned. Funds were made available to repair three enginesand overhaul six engines in order to increase aircraft availabilityand mission readiness.The Air Force unfortunately suffered two major accidentswith the Agusta A109 helicopter crashes in November 2010at Potchefstroom and in December 2010 at Balito. RelevantBoards of Inquiry have been convened and are in progress.There is another investigation being conducted following theincident at AFB Makhado where a pilot lost his life during hisfirst solo flight on a HAWK aircraft. Aviation safety training,however, continued to be provided, with 306 Air Force membersqualifying in aviation safety. Safety, Health,Environment, Risk and Quality (SHERQ) training courseswere presented with a total of 266 SAAF members beingdeclared competent during the financial year.Within the SAAF strategic focus, the critical challenges in theshort and medium term remains in the domain of four areas,Human Resource development and utilization, affordability,operational readiness and support optimisation. Actions wereinitiated to retain skilled personnel and to improve representivity.Although recruitment by aviation industries hasreduced, skilled Air Force personnel will be in demand oncethe effect of the global economic downturn improves.Cutting through every sphere of these strategic issues is achallenge of underfunding. The Air Force's diverse interventionsefforts towards infrastructure maintenance, developmentand retention of specialist skills, enhancing operationalsupport, do not have a long term and lasting impact. Theyprovide an important emergency relief of a temporal nature.The impact of underfunding further exacerbates the obsolescenceproblems especially on the older generation aircraftsystems that are more than 40 years old.A strategic guideline decision to relocate the Air Force BaseDurban to King Shaka during the year under review could notbe implemented due to the financial implication. The totalcosts for the relocation is estimated at Rm 800.Given the account of the SAAF on the expected output for theyear under review, the Air Force has managed to deliver on68the planned output albeit at a cost. There is clear evidence, aselaborated in this report, that the previous cuts and underfunding in the SAAF operating budget has reached culminationpoint in terms of adverse effects on SAAF capabilities.A risk exists that not all the required system tests can beeffectively done due to lack of adequate flying hours. Thesystem operational hand-over timeline to the SAAF isplanned for March 2012.There is no doubt that the SAAF diverse air capabilities,given the adequate support in terms of resources, can deliveron the required output beyond expectations as was demonstratedduring the 2010 FIFA World Cup.P u r p o s e o f t h e P r o g r a m m eThe Air Defence Programme provides prepared and supportedair defence capabilities for the defence and protection ofSouth Africa.S u b p r o g r a m m e sStrategic Direction provides strategic direction to theAir Defence programme by formulating and controllingstrategies, policies and plans via the Air Force Office toprepare and provide the capabilities required by Chief ofthe SANDF. In principle, budgeting is based on the costof operating the air defence headquarters.Operational Direction provides operational directionto the Air Defence programme by means of an AirCommand. In principle, budgeting is based on the costof operating the air command.Helicopter Capability provides and sustains operationallyready light utility helicopters, medium transporthelicopters and combat support helicopters, staffed byappropriately qualified personnel. In principle, fundingis distributed according to the number and size of units,systems and equipment operating and maintenancerequirements, and the number of force preparation exercisesand training courses.Transport and Maritime Capability provides and sustainsoperationally ready transport and maritime aircraft,staffed by appropriately qualified personnel. Inprinciple, funding is distributed according to the numberand size of units, systems and equipment operating andmaintenance requirements, and the number of forcepreparation exercises and training courses.Air Combat Capability provides and sustains operationallyready fighter aircraft, staffed by appropriatelyqualified personnel. In principle, funding is distributedaccording to the number and size of units, systems andequipment operating and maintenance requirements,and the number of force preparation exercises and trainingcourses.ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EOperational Support and Intelligence Capabilityprepares, develops, provides and supports protectionsupport, intelligence systems and counter-intelligencesupport to the South African Air Force (SAAF) throughprotection squadrons, intelligence subsystems and AirForce-unique intelligence training. In principle, fundingis distributed according to the number and size ofsquadrons, systems and equipment operating and maintenancerequirements, and training courses.Command and Control Capability supplies and maintainsoperationally ready command and control elementsin support of air battle space operations. In principle,funding is distributed according to the number andsize of units, systems and equipment operating andmaintenance requirements, and of force preparation andtraining courses.Base Support provides air base infrastructure facilitiesto squadrons and resident units on bases, includingmaintenance of all relevant systems and personnel, tosupport flying operations. In principle, funding is distributedaccording to the number and size of Air Forcebases and units, systems and equipment operating andmaintenance requirements, and the number of trainingcourses.Command Post renders command and control over allmissions flown. In principle funding is distributedaccording to the number and size of command posts anddeployments, and readiness and aircraft charteringrequirements.Training Capability provides for the general education,training and development of SAAF personnel. Fundingis distributed according to the number and size of units,systems and equipment operations and maintenancerequirements, and the number of force preparation exercisesand training courses.Technical Support Services establishes, maintains andprepares optimized technical and tactical logistic supportcapabilities to provide support to system groupsand manage air service units. In principle, funding isdistributed according to the number and size of units,systems and equipment operating and maintenancerequirements, and contracted human resources andproduct system requirements.O b j e c t i v e s a n d M e a s u r e sDefend and protect South Africa and its airspace by providingFour helicopter squadrons and one combat supportsquadron a year;Three medium transport squadrons, one maritime andtransport squadron, one light transport squadron andnine reserve squadrons at the required readiness levels ayear;One air combat squadron a year; andA 24-hour air command and control capability.O u t p u t D e t a i lTable 7.1 below reports on the achievement of the outputs,performance indicators and targets as specified in the DODStrategic Plan FY2010/11.Table 7.1: Air Defence Programme Output Detail for FY2010/11Output PerformanceIndicatorHelicopter CapabilityAnnualTargetActual TargetAchievementReasons for Over/ UnderAchievementMedium andLightTransportCapabilityCombatSupportCapabilityNumber of flyinghoursNumber ofsquadrons availableaccording to forcerequirements12 900Four mixed (mediumand light) squadronsOne combat supportsquadron10 700.5Four mixed (medium andlight) squadronsOne combat supportsquadronDue to operationalrequirements less forcepreparation hours wereflown. Due to protractedcontract negotiations noPSS contract was in placefor the technical supportof the Rooivalk fleet.Insufficient crews trainedon LynxAchievedAchievedANNUAL REPORT FY 2010/2011 69

D E P A R T M E N T O F D E F E N C ETable 7.1: Air Defence Programme Output Detail for FY2010/11 (continued)OutputVery importantpersons(VIP)TransportCapability,Medium andLightTransportCapability,MaritimeCapabilityFighterCapabilityBase SupportCapabilitycountrywidePerformanceIndicatorTransport and Maritime Surveillance CapabilityAir Combat CapabilityNumber of flyinghoursNumber ofsquadrons availableaccording to forcerequirementsNumber of flyinghoursNumber ofsquadrons availableaccording to ForceRequirementsAir Base Support CapabilityNumber of airbases/stations providedthroughoutthe year, ensuringcompliance withforce requirementsCommand and Control Capability11 394AnnualTargetThree medium transportsquadrons includingone VIP squadronOne maritime surveillanceand transportsquadronOne light transportsquadronNine Air Force Reservesquadrons550One combat squadronEight air basesOne air station10 015.9Actual TargetAchievementThree medium transportsquadrons including oneVIP squadronOne maritime surveillanceand transport squadronOne light transportsquadronNine Air Force Reservesquadrons2 962.2One combat squadronEight air basesOne air stationReasons for Over/ UnderAchievementTechnical failures (awaitingspares) and scheduledmaintenance. Additionalflying required duringBasic Air TransportCourses, OperationalCamps, tasks and the 2010FIFA World CupAchievedAchievedAchievedAchievedAdditional hours flowndue to OperationKGWELEAchievedAchievedAchievedAir DefenceManagementCapabilityNumber of missionreadymission controllersavailablePercentage availabilityof two missionreadystatic controlcentresNumber of radarsystems available27 daily95% at all times10 at all times27 daily95% at all times12 radars at least 90% ofthe timeAchieved. In preparationfor the implementation ofOP CORONA, additionalmission controllers wererequired to be missionreadyto form part of the24hr/7AchievedAchieved70ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 7.1: Air Defence Programme Output Detail for FY2010/11 (continued)OutputAir TrafficManagementCapabilityPerformanceIndicatorNumber of missionreadyAir TrafficControllers availablePercentage availabilityof seven missionready air traffic serviceunitsTraining Capability64 dailyAnnualTarget98% at all times32 dailyActual TargetAchievement100% at all timesReasons for Over/ UnderAchievementNot achieved. Due to failuresof fitness tests, memberscould not completeinitial training. Vast numberof transfers also resultedin retraining to be conductedat various unitsAchievedGeneral education,trainingand developmentof SAAir Force personnelNumber of learnerson planned courses2 556 learners1 471 learnersNot achieved. Some courseswere ad hoc and notrequired during quarter.Members did not pass fitnesstest or medicalEffect of Programme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Air Defence Programme's Outputs has contributed positively to the Programme's Purpose toprovide prepared and supported air defence capabilities for the defence and protection of South Africa.P L A N N E D E X E R C I S E S ( S E R V I C E U N I Q U E )Table 7.2 provides feedback on Air Defence Programme exercises (service unique) that were planned for FY2010/11.Table 7.2: Air Defence Programme Planned Exercises (Service Unique) for the FY2010/11Exercise: Name and Aim Scheduling 2010/11 Actual AchievementElectronic Warfare (EW) Camp, providingAir Force pilots an opportunity tofly in a high density EW threat environment.AugustPartially achieved28 Squadron is currently the only Squadron withthe C-130BZ aircraft that has EW self-protection equipmenton the aircraft. Due to the high demand for theC-130BZ aircraft in support of operations, a very limitedinteraction with the EW camp is currently possibleTable 7.3 provides feedback on Air Defence Programme Joint, Inter-departmental and Multi-national exercises that were plannedfor FY2010/11.Table 7.3: Air Defence Programme Planned Joint, Inter-departmental and Multi-national Exercises forthe FY2010/11Exercise: Name and Aim Scheduling 2010/11 Actual AchievementMulti-national ExercisesExercise PEGASUS, a combined air transportexercise involving the South African andRegional Air ForcesSeptember/OctoberBotswanaEx PEGASUS was not exercised duringFY2010/11 due to various exercises, especiallywith Operation KGWELE (2010 FIFA WorldCup) that took place from June 2010 to July 2010ANNUAL REPORT FY 2010/2011 71

D E P A R T M E N T O F D E F E N C E72ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EChapter 8P R O G R A M M E 5 :M a r i t i m e D e f e n c eO v e r v i e wThe FY2010/11 was extremely demanding for the SA Navydue to an increased operational tempo.At the multi-national level, the SA Navy successfully participatedin Exercise ATLASUR - a biennual, joint and combinedmaritime exercise between the Navies of Argentina,Brazil, South Africa and Uruguay. The aim of the exercisewas to provide collective training, improve interoperabilityand enhance mutual understanding on maritime matters forthe participating nations. This exercise was held in Argentina,South America and all the objectives were achieved. The SANavy also participated successfully in Exercise IBSAMAR II- a multi-national exercise involving the navies of Brazil,India and South Africa. The objective of the exercise was toimprove interoperability and this was deemed to have beenan overwhelming success by the participating nations. Theskills and experience acquired during Exercise IBSAMAR IIwill contribute to the SA Navy's ability to deal with issuessuch as conducting humanitarian aid operations and the combatingof threats like terrorism and piracy in the future. TheIndian Commander of the IBSAMAR II Task Force commentedon the exercise as follows: "The meticulous planning,efficient co-ordination and flawless execution of theexercises reflect dynamic leadership, high levels of motivation,well-trained crews, efficient ship management andmaterial preparedness of the three Navies."The SA Navy's international diplomacy program with itsstrong regional focus continued to yield good results. At thestrategic level of international cooperation, the Chief of theNavy or his delegated representative visited the followingcountries: Argentina, China, France, India, Italy, Sri Lanka,UK, Vietnam and USA with reciprocal visits being paid byIndia, Vietnam, UK and USA. Elements of the MaritimeReaction Squadron and support personnel were deployed invarious peacekeeping missions thereby contributing to theRSA's diplomatic initiatives in Africa. The deployment ofthe frigate SAS MENDI on Operation COPPER, an anti-piracypatrol in the Mozambique Channel, further enhanced theRSA's contribution to safety and security in the region. Thecombat support vessel, SAS DRAKENSBERG conductedOperation IKHALA, an emergency evacuation contingencyoperation off the West Coast of Africa.The SA Navy successfully prepared and deployed the SASDRAKENSBERG, the frigate SAS AMATOLA, the hydrographicsurvey vessel SAS PROTEA and the mine countermeasures vessels SAS UMZIMKULU and SAS UMKO-MAAS at the required levels of readiness during the 2010FIFA World Cup (Operation KGWELE). Also deployedwere the submarines SAS CHARLOTTE MAXEKE andSAS QUEEN MODJADJI I, as part of force preparation toensure maximum maritime security during this period. Whatis significant about Operation KGWELE is that the SA Navywas at its highest level of operational readiness, since theacquisition of the Strategic Defence Packages. In total 16 897sea hours were achieved during force preparation andemployment, of which 3 033 were during the unforeseenoperations off the West coast and in the MozambiqueChannel.The SA Navy acquired the Shallow Water Route SurveySystem and the system proved most effective in mine detectionoperations conducted during Operation KGWELE. Thesystem has proved to be an excellent asset in ensuring thecontinued safety and security of the RSA ports. What isequally significant is that policy option funding obtained wasdirected at providing a core maritime defence capability. Thisis a niche capability that no other state maritime agency couldprovide and also proved to be invaluable during recoveryoperations when it was used to assist the South African CivilAviation Authority to locate and recover the wreckage of thelight aircraft that crashed off Plettenberg Bay.Internally, the SA Navy achieved a payment figure of 99.2%for FY2010/11. The SA Navy also participated actively in thetask team that prepared a report on achieving better efficiencieswith the DOD's budget.An integral part of the SA Navy's planning and strategicdirection process is the SA Navy's social responsibility programme.Several disadvantaged communities have beenassisted and continue to be assisted through these programmes.The ISIVUNGUVUNGU sailing team continuedto attain excellent results in international competitions wheretwo sailors attained ninth position at the Volvo Youth SailingISAF World Championships held in Turkey and fifth positionin the Open 420 World Championships in Haifa, Israel. Atnational level one sailor, Asenathi Jim, was twice nominatedas SA Sailor of the month and eventually became the SASailor of the year for 2010. This great achievement resultedin him being introduced to the Olympic Class 470. He willANNUAL REPORT FY 2010/2011 73

D E P A R T M E N T O F D E F E N C Ealso skipper the SB3 to defend their title in the UK in the2011 UK championships.The SA Navy continued to experience critical shortages ofpersonnel within the technical, combat, diver, submariner andlogistics domains during the reporting period. Although thereare sufficient newly recruited candidates in these domainsthat are under training, it will take time before these candidatesacquire the requisite skills, knowledge and experienceto counter the loss of experienced personnel.The general status of buildings in the Simon’s Town areacontinued to be a cause for concern. Day to day maintenanceis being carried out, but due to the age of the buildings theircondition continues to deteriorate.Although the Directed Levels of Capability as stipulated interms of the force employment requirements for the respectivecapabilities were achieved, the SA Navy will not be ableto sustain these levels of capability into the future, due to thecontinued underfunding. The SA Navy performed in accordancewith its plan and exceeded expectations in certaininstances i.e. in its force preparation and force employmentcommitments. It remains committed to pursuing its primaryobjective of providing a credible maritime defence to thepeople of South Africa.P u r p o s e o f t h e P r o g r a m m eThe Maritime Defence Programme provides prepared andsupported maritime defence capabilities for the defence andprotection of South Africa.O b j e c t i v e s a n d M e a s u r e sDefend and protect South Africa and its maritime zones byprovidingA surface combat capability of four frigates, one combatsupport vessel, three offshore patrol vessels, threeinshore patrol vessels and a maritime reaction squadronin each annual operational cycle;A sub-surface combat capability of three submarines ineach annual operational cycle;Two mine countermeasures systems in each annualoperational cycle to ensure safe access to South Africanharbours, and where mine clearance may be required;andAn ongoing hydrographic survey capability to ensuresafe navigation in charting areas and to meet internationalobligations.S u b p r o g r a m m e sMaritime Direction provides strategic direction withinthe Maritime Defence programme by formulating andcontrolling strategies, policies, plans and advice in orderto prepare and provide the maritime capabilitiesrequired for the defence and protection of South Africa.Funding is distributed based on the cost of operating theNaval Headquarters.Maritime Combat Capability provides mission readyand supported maritime combat capabilities in accordancewith the approved force design of the DOD.Funding is distributed according to the number and sizeof units, systems and equipment operating and maintenancerequirements and the number of force employmentoperations.Maritime Logistic Support Capability sustains theavailability of the force structure elements in the navalforce design to ensure compliance with ordered operationalcommitments. Funding is distributed accordingto the number and size of units, systems and equipmentoperating and maintenance requirements, and the numberof force preparation exercises and training courses. Maritime Human Resources and TrainingCapability ensures that the maritime combat capabilityrequirements are met in terms of qualified personnel forRegular and Reserve members. Funding is distributedaccording to the number and size of units, systems andequipment operations and maintenance requirements,and the number of force preparation and training courses.Base Support Capability provides a general base supportcapability to ships and submarines, shore units andother identified clients to ensure that the fleet complieswith specified operational-readiness levels. Funding isdistributed according to the size of the naval base, systemsand equipment operating and maintenance requirements.O u t p u t D e t a i lTable 8.1 below reports on all outputs, performance measuresand targets specified in the output table in the DOD StrategicPlan FY2010/11.74ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 8.1: Maritime Defence Programme Output Detail for FY2010/11OutputPerformanceIndicatorMaritime Combat CapabilitySurface WarfareCapabilitySubmarine WarfareCapabilityCombat Supportand SealiftCapabilityMine WarfareCapabilityHydrographicServicesCapabilityPatrol CapabilityMaritimeReactionSquadronCapabilityMaritime Training CapabilityGeneral education,trainingand developmentof NavypersonnelBase Support CapabilityBase SupportCapabilityNumber of vesselsoperated in the annualoperational cycleNumber of submarinesoperated in the annualoperational cycleNumber of combat supportvessels operated inthe annual operationalcycleNumber of mine countermeasure vessels operatedin the annual operationalcycleNumber of hydrographicvessels and mobilehydrographic surveyteams operated in theannual operational cycleNumber of patrol vesselsoperated in the annualoperational cycleNumber of teams of theOperational Boat Divisionprepared in accordancewith the Navy ForceDesignNumber of teams of theOperational DivingDivision prepared inaccordance with theNavy Force DesignNumber of platoons of theNaval Reaction Divisionprepared in accordancewith the Navy ForceDesignNumber of learners onplanned coursesNumber of Naval Bases/Stations provided, ensuringcompliance with forcerequirementsAnnualTargetFour frigatesThreeOneThreeOne vesselOne mobile hydrographicsurvey teamThree inshore vesselsThree offshore vesselsThreeThreeThree4 964One Naval BaseTwo Naval StationsActual TargetAchievementFour frigatesThreeOneThreeOne vesselOne mobile hydrographicsurvey teamThree inshorevesselsThree offshore vesselsThreeThreeThree3 007One Naval BaseTwo Naval StationsReasons for Over/Under AchievementAchievedAchievedAchievedAchievedAchievedAchievedAchievedAchievedAchievedAchievedAchieved67 learning opportunitieswere cancelled dueto operational and workcommitments, resultingin 1 957 less learnersthan planned forAchievedAchievedEffect of Programme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Maritime Defence Programme's Outputs has contributed positively to the Programme's Purposeto provide prepared and supported maritime defence capabilities for the defence and protection of South Africa.ANNUAL REPORT FY 2010/2011 75

D E P A R T M E N T O F D E F E N C EP L A N N E D E X E R C I S E S ( S E R V I C E U N I Q U E )Table 8.2 provides feedback on Maritime Defence Programme Unique Exercises that were planned for FY2010/11.Table 8.2. Maritime Defence Programme Planned Exercises for FY2010/11Exercise: Name and Aim Scheduling 2010/11 Actual AchievementExercise RED LION. Annual Task ForceexerciseDIVEX. Annual diving exerciseFebruary/MarchSeptemberThe exercise has been postponed to May 2011 dueto the commitment of vessels in OperationsIKHALA and COPPERThe first Divex was held under OperationKOWIE in preparation for 2010 FIFA World Cupfrom 16 - 30 Apr 10 in Simon' TownThe second Divex ran concurrently with ExerciseREVIVE I, from 22 - 26 Nov 10 in Simon's Town.This was to train new operators and divers in theuse of the MCM system used during SWCThe third Divex was held in Mossel Bay underExercise REVIVE II from 8 - 12 Feb 11. Thisexercise was a continuation from REVIVE I,where more divers were exposed to the system76ANNUAL REPORT FY 2010/2011

Chapter 9D E P A R T M E N T O F D E F E N C EP R O G R A M M E 6 :M i l i t a r y H e a l t hS u p p o r tO v e r v i e wIn the year under review, the Military Health SupportProgramme continued to render health services according toits dual mission to support deployed forces and secondly todeliver a base-orientated health service. The factors impactingon the service delivery objectives are the loss of scarceskills, an insufficient budget to fulfil ordered commitmentsand to renew the SA Military Health Service (SAMHS) obsoleteequipment and capabilities.The SAMHS contributed to the broader State service deliveryobjectives through its partnership and support to theDepartment of Health in providing health support to the 2010FIFA World Cup during Operation KGWELE. A total of 902SAMHS members were deployed at National HealthOperation Centres, stadiums and fan parks. SAMHS memberswere also deployed with the SA Army during OperationKGWELE and health elements also rendered health supportto maritime operations during Operation KGWELE. Supportwas also provided to the Department of Health during thenational strike of nursing personnel in provincial hospitals.During Operation PROSPER, the SAMHS supported 74 hospitalsin the nine provinces with a total of 2 822 membersconsisting of 1 266 health care practitioners.The health care to designated military veterans was operationalizedafter the approval of the Minister in December2010.The SAMHS contributed immensely to the strengthening offoreign relations. Medical equipment and general officeequipment was donated to the Uganda People’s DefenceForce. The 6 th Annual Protection Course for African Statesparty to the Chemical Weapons Convention on behalf of theSA Council for Non-Proliferation of Weapons of Mass Destructionand the Organisation for the Prohibition of ChemicalWeapons was presented by the SAMHS in September2010. The course was attended by representatives fromAlgeria, Burkina Faso, Burundi, Cote D'Ivoire, Kenya,Malawi, Morocco, Nigeria, Tanzania, Tunisia, Zambia, Zimbabweand Uganda. The Chemical and Biological DefenceAdvisor attended an international workshop on StrengtheningInternational Efforts to Prevent the Proliferation of BiologicalWeapons in November 2010 and made a presentation on theIntercessional Process in preparation of the 7 th ReviewConference that will be held in 2011. The Surgeons Generalhad bilateral meetings with the Surgeons General of theNetherlands and Zambia during the attendance of the AfricanAerospace Defence and a working visit to France. The aimwas to strengthen military health relations with these countriesand to discuss possible areas of future co-operation.The SAMHS Facility Master Plan continued to guide therepair and upgrading of infrastructure through a phasedapproach. The day-to-day maintenance of facilities is hampereddue to the insufficient budget allocation. Donor fundingdirected to antiretroviral treatment has been utilised toupgrade and renovate health facilities such as the Sickbay atLangebaanweg and the pharmacy at the Military MedicalClinic Waterkloof. The upgrade of the Military HealthTraining facility at Lephalale was completed for the trainingof members of the military skills development system.Progress continued to be made with the repair and maintenanceprogramme at the three military hospitals. The constructionof the main building at 3 Military Hospital wascompleted and occupation took place during November2010. The refurbishment of the main building of 2 MilitaryHospital has commenced in January 2011. Progress wasmade with the repair and upgrade of the field hospital capability.The Military Base Hospital at the Combat TrainingCentre in Lohatlha has been equipped with integrated digitalmain medical equipment.During the reporting period, a total number of 128 emergencycare technician learners graduated and are being utilised atdecentralised military health facilities. The AfricanContingency Operations Training Assistant (ACOTA) programmepresented a Trauma Nursing Care Course. BasicAmbulance Assistant courses were presented during thereporting period to 266 recruits of the Department of Healthat decentralised military health training facilities in Pretoria,Bloemfontein and Simon’s Town. The Nursing College diplomaand pledge of service ceremony was held in October2010 during which 103 diplomas were conferred to candidateswho successfully completed the four year diploma andprimary health care courses. A total of 54 SAMHS membersfrom the military skills development system have successfullycompleted the Internal Support Services logistical courseANNUAL REPORT FY 2010/2011 77

D E P A R T M E N T O F D E F E N C Eat the School for Logistical Training. These members willreinforce the SAMHS logistical capability.A comprehensive appreciation was done on patient administrationto facilitate service delivery improvements and adherenceto the Public Finance Management Act, ie to ensure thatthe payment of all medical accounts are finalised within 30days. Turnkey solutions are being implemented and havedelivered results.The establishing of an integrated health system as a strategicresource has become indispensable to the delivery of anincreasingly sophisticated primary and tertiary health caresystem. The development of new systems promotes best businesspractices and accountability through tested technologies.Good progress has been made with the development of newtechnology such as digital scanning, clinical imaging, electronichandheld palmtops, telemedicine and smart card identificationcards.The HIV counselling and testing campaign launched byPresident Zuma and the National Department of Health on25 April 2010 was executed under the auspices of theComprehensive Care and Management Treatment programme.Focused activities took place on 1 December 2010,World Aids Day. During a training visit in December 2010 toSan Antonio, Texas, the Directorate HIV and Aids presenteda HIV Prevention poster.Although the retention of health care practitioners remains astrategic issue, the Occupational Specific Dispensation formedical officers, dentists and pharmacists, Resolution 1 of2010, has been implemented.A total number of 108 members of the Military SkillsDevelopment System were translated to the Core ServiceSystem and 160 members were translated to the Reserves.The roll-out of the University Reserve Training programmecontinued. The challenge of recruiting and remuneratinghealth care practitioners in the Reserves remains unresolved.The SAMHS continued to promote a culture of good governanceduring the reporting period by implementing and executingrectification plans after negative audit findings. TheSAMHS Accountability Management Committee stands centralto the monitoring of the rectification plans.P u r p o s e o f t h e P r o g r a m m eThe Military Health Support Programme provides preparedand supported health capabilities and services for the defenceand protection of South Africa.S u b p r o g r a m m e sStrategic Direction formulates strategy, policies andplans, and gives advice from the Surgeon General'sOffice to prepare and provide the capabilities requiredby the Chief of the SANDF. Funding is based on thecost of operating the military health headquarters.Mobile Military Health Support provides health supportelements for deployed and contingency forces.Funding is distributed according to the number and sizeof units, systems and equipment operating and maintenancerequirements and the number of force preparationactivities.Area Military Health Service provides a comprehensive,self-supporting, multidisciplinary geographic militaryhealth service through a formation headquarterscommanding and controlling nine area military healthunits to ensure a healthy military community. Fundingis distributed according to the number and size of unitsand health care facilities, systems and equipment operatingand maintenance requirements and the number andtype of patient health services rendered, as well as forcepreparation activities.Specialist/Tertiary Military Service provides a specialisthealth service to develop and maintain tertiarymilitary health capabilities within the parameters of relevantlegislation as contained in the South AfricanMilitary Health Service (SAMHS) strategy. Funding isdistributed according to the number and size of militaryhospitals and specialist units, systems and equipmentoperating and maintenance requirements, the number ofand type of patient health services rendered as well asforce preparation activities.Military Health Product Support Capability providesfor warehousing pharmaceuticals, sundries, militaryhealth mobilisation equipment and unique stock, procuringunique military health products, materials and services;and an asset management service, military healthproduct systems and cooperative common militaryhealth logistics. Funding is distributed according to thenumber and size of units and the use of military healthproducts, equipment and consumables and the requirementsfor maintaining strategic military health reserves.Military Health Maintenance Capability providesgeneral base support services to identified SAMHS unitsto sustain and maintain the approved force design andstructure. Funding is distributed according to the numberand size of units, systems and equipment operatingand maintenance requirements.Military Health Training Capability provides a militaryhealth training service to develop and maintain militaryhealth capabilities within the parameters of relevantlegislation and policies. Funding is distributedaccording to the training inputs of the sub-units, equipmentoperating and maintenance requirement and thenumber of force preparation exercises and trainingcourses presented to Southern Africa DevelopmentCommunity (SADC) countries.78ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EO b j e c t i v e s a n d M e a s u r e sProvide prepared and supported health capabilities and servicesby providing:a health support capability of five medical battaliongroups, including one specialist medical battaliongroup, for deployed and contingency forces; anda comprehensive multidisciplinary health service to aprojected patient population of 230 000 members peryear.O u t p u t D e t a i lTable 9.1 below reports on the achievement of the outputs,performance indicators and targets as specified in the DODStrategic Plan FY2010/11Table 9.1:Military Health Support Programme Output Detail for FY2010/11Output PerformanceIndicatorMobile Military Health Support CapabilityCombat-readyMilitaryHealthSupportElements fordeployed andcontingencyforcesNumber of units preparedaccording toforce requirementsAnnualTargetOne conventionalmedical battaliongroupOne specialistbattalion groupThree Reserve medicalbattalion groupsActual TargetAchievementOne conventionalmedical battaliongroup (minus)One specialist battaliongroup (minus)Three Reserve medicalbattalion groups(minus)25% of the unitstrengthReasons for Over/ UnderAchievementPartially achieved. Insufficientstaff to fulfil the dual missionof the SAMHS and to staff theRegular ConventionalMedical Battalion Group. Thecombat readiness of theSAMHS is compromised bythe inability to retain scarceskills, especially health carepractitioners, and the inabilityto procure and upgrade mainmedical equipment from theinsufficient budget allocationPartially achieved. Insufficienthealth care practitioners andinability to recruit and retainscarce skills such as healthcare practitioners, eg medicalofficers and air-borne andparachute qualified members.Also the inability to procureand upgrade main medicalequipment from the insufficientbudget allocationPartially achieved. Althoughthere was an increase in thelevel of staffing, the correctprofile of members, eg therecruitment and retention ofhealth care practitionersremains challenging. Theremuneration of health carepractitioners for the Reserveshas not been resolved. Thedecentralised and modulartraining of SAMHS Reserveshad been approvedANNUAL REPORT FY 2010/2011 79

D E P A R T M E N T O F D E F E N C ETable 9.1:Military Health Support Programme Output Detail for FY2010/11 (continued)Output PerformanceIndicatorArea Military Health ServiceComprehensive,self supporting,multidisciplinarygeographicmilitaryhealth serviceSpecialist/Tertiary militaryhealth servicesand capabilitiesbymeans of militaryhospitals,institutes anda unit for dignitaryandVIP healthservicesNumber of health careactivities at the 88 geographichealth carefacilitiesNumber of healthassessment activitiesexecuted at the 88 geographichealth carefacilitiesNumber of medicalsupport activities at the88 geographic healthcare facilitiesNumber of health careactivities at the threemilitary hospitalsMaximum number ofaviation health careactivities1 300 00050 000 12 200Specialist/Tertiary Military Health Service990 00015 850AnnualTargetActual TargetAchievement1 241 84165 4285 275784 42320 912Reasons for Over/ UnderAchievementAchieved. The target remainsto be an estimate. Increase inhealth care activities from theprevious year can be ascribedto improved data capturing.Fewer patients were referredfor outsourced health care.The impact and effect of thehealth care to veterans willonly be experienced in thenext financial yearOver Achieved. The demandsfor health assessments, ie concurrenthealth and predeploymentassessments haveincreased. All the demandsfor health assessments weremet in line with the prescribedpolicy in spite ofinsufficient health care practitioners,ie psychologistsOver achieved. The demandfor medical support activitieshas increased as a result ofincreased force preparationactivities. Data capturing ofthe medical support activitieshas also improved. The targetwill be amended forFY2011/12Slightly under achieved.Fewer patients could be consultedand had to be referredto provincial and privatehealth facilities due to theunavailability of certain capabilities/medicaldepartmentsas a result of the Repair andMaintenance Programmes atthe three military hospitalsOver achieved. The demandsfor health services and assessmentsat the Institute forAviation Medicine haveincreased. More members ofthe SA Air Force and the SACivil Aviation Authorityreported for health assessmentsand consultations. Theaviation health capabilityneeds to be renewed in termsof the facility and obsoleteequipment1The original target as per the DOD Strategic Plan FY2010/11 was 125 000 but was adjusted to 50 000.80ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 9.1:Military Health Support Programme Output Detail for FY2010/11 (continued)OutputWarehousingof pharmaceuticalsandsundries andmilitaryhealth mobilisationandunique stockPerformanceIndicatorMaximum number ofmaritime health careactivitiesMaximum number ofMilitary PsychologicalInstitute contactsNumber of animalhealth activitiesNumber of nationaland international dignitaryand VIP medicalsupport and healthcare activitiesPercentage availabilityof stock at all times60 00010 2003 240584Military Health Product Support Capability75%AnnualTarget60 3379 6205 98560961.5%Actual TargetAchievementReasons for Over/ UnderAchievementAchieved. Demands for servicedelivery were met. Due toan increase in maritime activitiesmore healthcare relatedactivities are imminentAchieved. Demands for servicedelivery were met in spiteof the low staffing levels ofpsychologistsOver achieved. The estimatedtarget was achieved in spite ofthe shortage of veterinary officers.The increase in activitiesis due to preventative healthprogrammes, ie immunisationsand de-worming programmeof canines. Trainingtook place according to theplanned programmeOver achieved. The PresidentialMedical Unit has performedmore medical supportthan expected. The structureof the unit had been approvedto meet the increaseddemandsNot achieved. The sustainmentof stock levels and thestrategic reserve is challengingdue to insufficient funding.The stock levels andstrategic reserve has increasedto 71% in the 4th quarter ofthe period under review.Suppliers do not honour thespecified delivery periods andoften deliver partial quantitiesProcurementof unique militaryhealthproducts,materials andservicesAsset and lifecyclemanagementof mainmedicalequipmentPercentage compliancewith stock procurementand deliveryrequirementsNumber of mainmedical equipmentassets verified and registered80%17 85382.5%17 858Over achievedSuppliers reacted well todelivery periods and therewas a larger focus on the following-upof ordersAchievedThe asset and life-cycle managementof main medicalequipment has been performedaccording to plan inspite of the initial impact ofOperations KGWELE andPROSPERANNUAL REPORT FY 2010/2011 81

D E P A R T M E N T O F D E F E N C ETable 9.1:Military Health Support Programme Output Detail for FY2010/11 (continued)Output PerformanceIndicatorMilitary Health Training CapabilityMilitaryhealth trainingcapabilityNumber of learners onplanned coursesAnnualTargetActual TargetAchievementReasons for Over/ UnderAchievement3 966 5 223Over achievedAchieved targets in spite of -challenges with accommodationas a result of the refurbishmentand renovation programmeat the MilitaryHealth Training Capability.The focus was on the accreditationof instructors to eitherobtain or maintain accreditationEffect of Programme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.Military Health Support Programme's Outputs has contributed positively to the Programme's Purpose to provide preparedand supported health capabilities and services for the defence and protection of South Africa. Most of the outputsof the sub-programmes had been achieved. The quality of military health services had been questioned and will beaddressed in FY2011/12 by means of formalised customer surveys.P L A N N E D E X E R C I S E S ( S E R V I C E U N I Q U E )Table 9.2 provides feedback on Military Health Support Programme service unique exercises that were planned for FY2010/11.Table 9.2: Military Health Support Programme Planned Exercises (Service Unique) for the FY2010/11Exercise: Name and Aim Scheduling 2010/11 Actual AchievementExercise WAYSIDE: force preparation exercise March/April Exercise WAYSIDE took place from 23 March to1 April 2011 at Ditholo. The objectives wereachieved, namely, the detailed analysis of decontaminationand detection equipment and proceduresutilised during the 2010 FIFA World Cup,evaluation of the existing conventional decontaminationand detection procedures in order toalign them with the urban procedures and forutilisation on the battlefield. The technologydemonstrator for the new level 1 resuscitationpost was also evaluated and improvements wereidentified82ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EANNUAL REPORT FY 2010/2011 83

Chapter 10D E P A R T M E N T O F D E F E N C EP R O G R A M M E 7 :D e f e n c e I n t e l l i g e n c eO v e r v i e wThe Defence Intelligence (DI) Division fulfilled all obligationsrequired by clients and delivered its products on time.The Division continued to ensure adherence to its intelligencemandate of conducting intelligence on foreign military forcesand their intentionsIn support of Operation KGWELE (the 2010 FIFA WorldCup), a secure intelligence data communication network wasestablished between DI HQ, the National Joint OperationsCentre (JOC) and the various Provincial JOCs to enable theflow of information among all the military intelligence andcounter-intelligence entities. This enabled the instant andsecure flow of information (data) between mobile intelligencefunctionaries deployed at the various events directly tothe Nat JOC and DI HQ. In conjunction with the NationalCommunication Centre (NCC), with some equipment suppliedby DI, the same capability was also established betweenDI and other intelligence role-players at national level.Similarly, equipment was also issued to intelligence functionariesdeployed in border safeguarding.Borderline security visits were also conducted while operationalborderline liaison forums, national border managementcoordinating centre and intelligence coordinating centremeetings were held to address border safeguarding and theinternal security situation.Following the rendering of support during OperationKGWELE, DI was requested to provide operational intelligencesupport to curtail violence against foreign nationals andsubsequently re-tasked to provide support during the hostingof the International Cricket T20 Cup tournament. Operationalintelligence support, including counter-intelligence support,was also provided to all external operations.Some of the previously reported challenges were still relevant.The lack of language proficiency experienced by membersin the locally spoken languages in the different deploymentareas continued during this year. Although membersearmarked for deployment attended courses on the relevantlanguages, it often takes time to become proficient. The poorstate of the DI headquarters building continued to impact onthe productivity of the division. A PPP has been registered toestablish a new facility and it is currently in the feasibilityphase.The intelligence needs of the DOD have become moresophisticated and DI is required to provide information andadvice to support the SANDF's mission and Government initiativesto bring about lasting peace and prosperity in Africa.These developments necessitated the redirection of DI to beable to respond quickly to changing intelligence requirementsand fast breaking contingencies. The focus for the next tenyears will therefore be to expand in-time early warning andthe current intelligence coverage.P u r p o s e o f t h e P r o g r a m m eThe Defence Intelligence Programme provides a defenceintelligence and counter-intelligence capability.O b j e c t i v e s a n d M e a s u r e sThe detail of the output of Defence Intelligence is classifiedand not available to the public.S u b p r o g r a m m e sStrategic Direction provides defence intelligence poli-84ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C Ecy, doctrine and intelligence advice to support thedepartment's decision-making and policy formulationprocesses. Funding is based on the cost of operating thedefence intelligence headquarters.Operations provide timely defence prediction, intelligenceand counter-intelligence capabilities and services.Funding is distributed based on the number and size ofintelligence offices, systems and equipment operatingand maintenance requirements, and the number of intelligenceproducts produced.Defence Intelligence Support Services provide humanresource, logistic, planning, security, labour relations,and training and information support services to thedefence intelligence community. Funding is distributedaccording to the number and size of units and offices,equipment operations and maintenance requirements,and the number of force preparation exercises and trainingcourses.O u t p u t D e t a i lTable 10.1 below reports on the achievement of the outputs,performance indicators and targets as specified in the DODStrategic Plan FY2010/11.Table 10.1:Defence Intelligence Programme Output Detail for FY2010/11OutputPerformanceIndicatorAnnualTargetActual TargetAchievementReasons for Over/ UnderAchievementMobile Military Health Support CapabilityIntelligenceprocessingcapabilityCounter-IntelligencecapabilityNumber of defenceintelligence productsaccording to the annualschedule and clientrequirementsNumber of vettingdecisions taken inaccordance withrequirement3316 5003304 985AchievedDeviation from target of 6 500was due to the delay in turnaround time of feedbackreceived from SAPSEffect of Programme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the DI Programme's Outputs has positively contributed to the purpose of the Programme to providea defence intelligence and counter intelligence capability.ANNUAL REPORT FY 2010/2011 85

Chapter 11D E P A R T M E N T O F D E F E N C EP R O G R A M M E 8 :G e n e r a l S u p p o r tO v e r v i e wThe General Support Programme is divided into the followingsub-programmes, i.e. Joint Logistic Services, Commandand Management Services and the Military Police.P u r p o s e o f t h e P r o g r a m m eThe General Support Programme provides general supportcapabilities and services to the Department.O b j e c t i v e s a n d M e a s u r e sProvide general support capabilities and services by:86Repairing and maintaining the DOD's infrastructureat 33 bases over the next 3 years (13 in2010/11, 9 in 2011/12 and 11 in 2012/13) and executingthe Capital Works Plan in 52 projects (7 in2010/11, 24 in 2011/12 and 21 in 2012/13).Providing appropriate, ready and sustainedmatériel, facilities, movement and logistic servicesfocussing on supply chain management to enableforce preparation and employment.Provide the department with key information and communicationsystems by: Ensuring that the mainframe service is available 98per cent of the time and the Wide Area Network 95per cent of the time.Providing Information and CommunicationSystems solutions in accordance with the DefenceEnterprise Information Systems (DEIS) MasterPlan, as per the programme and project milestonesand associated deliverables. Reduce the number of new criminal cases under investigationby the military police by 10 per cent a year, andsustain 1 provost company for deployment, 4 regionalhead-quarters, 22 area offices and 22 detachments forinvestigations and crime prevention, and 2 military correctionalfacilities.S u b p r o g r a m m e sJoint Logistic Services provide logistic services to thedepartment. Funding is distributed according to thenumber and size of units, use and warehousing requirementsfor ammunition, main equipment and stores, thedefence facility repair and maintenance programme andthe number of training courses.Command and Management Information Systemsprovides command and management information systemsand related services to the department. Funding isdistributed according to the number and size of mainframesystems, the communication infrastructure operatedby the department, and maintenance and upgradingrequirements.Military Police provide a military policing capability tothe department. Funding is distributed according to thenumber and size of units, systems and equipment operatingand maintenance requirements, and the number offorce preparation exercises and training coursesS U B P R O G R A M M E :J O I N T L O G I S T I C S E R V I C E SO v e r v i e wDuring the year under review, the Logistics Division partiallyachieved its objectives due to many challenges that wereidentified and experienced. The management interventionsundertaken and working together as a team with numerousstakeholders has made it possible to address challenges in aprofessional and specialist way in accordance with the businessplan and business ethics, thereby minimising the impactand ensuring good service delivery.The inability to provide appropriate, ready and sustainedmateriel, facilities, movement and logistic services and noncomplianceat the operational level by Services and Divisionsand the lack of enforcement of logistic asset managementpolicies (moveable and immoveable) resulted in poor assetmanagement due to inadequate and fragmented defencelogistics strategy, policy, planning, budgeting, systems,processes and skills. Slow progress was also experiencedwith updating and promulgating of logistic policies due to alack of capacity within the Logistics Division.During the FY2010/11 the Logistic Intervention andANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ERepositioning Programme (LIRP) started to finalise thedevelopment of a new logistic process framework. This is asingle logistic process based on supply chain and life cyclemanagement, and a draft macro-structure for the futureSANDF logistics organisation.The DOD under the auspice of the Operation Clean Audit(OCA) teamed up with SITA, embarked on alleviating currentand possible future audit qualifications by a concertedeffort in developing appropriate draft policy in respect ofassets, leases, official gifts, donations, sponsorships and disposalsin compliance with the Minister of Defence's instructionfor a zero qualification audit cycle for a FY2010/11.In order to address the audit qualifications, the LogisticsDivision has developed a short and long-term plan. The shortterm plan focuses on the utilisation of the existing systems(OSIS and CALMIS) to establish an asset register, while thelong term plan focuses on the implementation of a single integrateddefence logistics information management system,including a codification and cataloguing system that willenhance stock/inventory rationalisation within the DOD.During the reporting period, a supply chain management andprocurement implementation charter between NationalTreasury (IFMS) and the DOD was finalised. Eleven unitshave been identified as lead sites and the implementation ofthe asset register and procurement will commence in the nextfinancial year.In order to improve the serviceability of equipment, contractsfor the maintenance and repair of materiel handling equipmentfor internal and external operations were concluded forthe next two years. The approval of the technical allowanceshas made a significant contribution towards the attraction andretention of suitably qualified technical members within theDOD.A tender for bar coding of all equipment in the DOD, withspecial attention to firearm and vehicle control was publishedwith implementation during the next financial year, whichwill greatly enhance the DOD's ability to accurately manageits assets.New legislation concerning the management of fuel installationsrequired the DOD to assess all its installations throughoutSouth Africa to ensure compliance with municipal bylawsand other legislation to bring about continued safe operations.The DOD produced a user assets management plan (UAMP)that will address the rapid and escalating deterioration of thedefence immovable assets. From the UAMP, the DOD willbe able to develop accurate and functional accommodationand maintenance plans that are consistent with DOD strategicand operational requirements.Progress was also made with the capturing and verification ofthe Defence Endowment Property (DEP). A DEP register isin place with associated market values. This register willassist in the assessment of options available to maximise utilisationof endowment properties to address DOD facilityrequirements.Facilities management plays a vital role within the DOD inensuring that property, buildings and real estate are in supportof DOD objectives. Due to the lack of capacity in the NDPW,DOD facilities and infrastructure are in disrepair and furtherdeterioration will tarnish not only the image of the DOD, butalso constrain force preparation and employment and impacton the execution of the Defence mandate.The DOD Works Capability (Project LEBAKA) was transferredfrom the SA Army to the Logistics Division, and itsstructure under command and control of Chief of Logisticswas approved by the Minister. This capability places theDOD in a better position to assume the execution of the custodianfunctions as presently performed by NDPW.The DOD funded 28 capital works building projects duringthe reporting period. The bulk of the capital works fundswere spent on the upgrading of military health facilities,installing fire detection and protection systems, makingchanges to buildings to accommodate disabled members,upgrading kitchens, buildings and improving security atbuildings.Range clearance operations on the former Hell's Gate trainingarea (Project UMTHOMBO) were concluded. The Madimbotraining area has been marked and prepared for clearance. Anenvironmental awareness programme is underway within theDOD that will ensure sustainability of the current initiativesto enhance environmental management within the department.Operation VUSELELA projects which is the removal of allalien trees and plants, was optimized in the Free Stateprovince for increased mutual benefit to both the environmentand beneficiaries; ie military veterans. Improved projectmanagement has brought about enhanced monitoring andcontrol measures between the DOD, Department of WaterAffairs (DWA) and its implementing agent; ie theIndependent Development Trust (IDT).In support of the government initiative of creating jobs, a totalof 1 718 MSDS members obtained training in various logisticcourses and accreditation within the DOD and the privatesector. The SAQA awarded full accreditation to the DODAmmunition Depot and School of Ammunition while givingprovisional accreditation to the DOD School of LogisticalTraining.P u r p o s e o f t h e P r o g r a m m eJoint Logistic Services is a subprogramme of the GeneralSupport Programme and is to provide logistic services to theDepartment.S u b p r o g r a m m e sJoint Logistic Services provide logistic services to the department.Funding is distributed according to the number andANNUAL REPORT FY 2010/2011 87

D E P A R T M E N T O F D E F E N C Esize of units, use and warehousing requirements for ammunition,main equipment and stores, the defence facility repairand maintenance programme and the number of trainingcoursesO b j e c t i v e s a n d M e a s u r e sProvide general support capabilities and services by:Repairing and maintaining the department's infrastructureat 33 bases over the next 3 years (13 in 2010/11, 9in 2011/12 and 11 in 2012/13) and executing the CapitalWorks Plan in 52 projects (7 in 2010/11, 24 in 2011/12and 21 in 2012/13).Providing appropriate, ready and sustained matériel,facilities, movement and logistic services focussing onsupply chain management to enable force preparationand employment.O u t p u t D e t a i lTable 11.1 below reports of the achievement of the outputs,performance indicators and targets as specified in the DODStrategic Plan FY2010/11Table 11.1: Joint Logistic Services Output Detail for FY2010/11OutputCentralisedLogisticCapabilitiesPerformanceIndicatorNumber of units preparedand maintainedto support forceemployment requirementsAnnualTargetOne joint logisticoperational supportunitOne main ordnancedepotTwo ordnancesub-depotsThree ammunitiondepotsActual TargetAchievementOne joint logistic operationalsupport unitNoneNoneThree ammunitiondepotsReasons for Over/ UnderAchievementAchievedDepot transferred to SA Army(function shift)Depots transferred to SAArmy (function shift)AchievedOne technicalservice unitOne mobilisationcentreTwo central procurementservice centresNoneNoneTwo central procurementservice centresUnit transferred to SA Army(function shift)Unit transferred to SA Army(function shift)AchievedOne logistics schoolOne ammunitionschoolOne logistics schoolOne ammunitionschoolAchievedAchievedOne hospitalityschoolOne hospitality schoolAchievedCentralisedLogisticServicesPercentage compliancewith Capital WorksProgrammeOne South AfricanForces Institute100%One South AfricanForces Institute100%AchievedAchievedPercentage compliancewith Repair andMaintenanceProgramme100%46,27%No submission of invoicesfrom NDPW for completedworkProjects delayed due to uncertaintyregarding the acquisitionof the A-400M Aircraft88ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 11.1: Joint Logistic Services Output Detail for FY2010/11 (continued)OutputPerformanceIndicatorPercentage compliancewith DOD codificationrequirements100%AnnualTarget89%Actual TargetAchievementReasons for Over/ UnderAchievementChange from RAMP toRefurbishment Programmedelayed projectsThe underperformance wasdue to the extension of theenvironmental contingent liabilityto include all environmentallyrelated rehabilitationliabilities on military trainingareasEnvironmental involvementsin the planning and executionof exercises has increased withthe promulgation of the forceemployment requirementsIn additional to this, thecontractor is awaiting approvalfor the explosive workplacelicense for Madimbofrom Department of LabourPercentage compliancewith environmentalservices projectrequirements100%73.5%The codification system usedby the DOD is not fully compliantwith the requirementsof NATO ACod P and needsto be replacedInadequate structure, staffshortages and non-compliantCodification SystemShortage of project management,quality assurance andtechnically qualified codifiersInadequate facilities (officespace)Percentage tonnes ofammunition disposedin accordance with disposalplan100%100% (1000 Tonnes)AchievedPercentage of procurementsof commercialvehicles for the DODversus total requestsPercentage courses successfullycompletedSANDF requirement100%100%96%93%4% of requirements werecancelledThe cancellation of requestsoriginates from the end users218 Learning Programmes(LPs) were planned, 204 LPswere presented in which 3467learners were trained and 52were found not competentPercentage procurementrequests satisfiedversus DOD requirement90%90%14 LPs were cancelled due tostudents not reporting forcoursesAchievedANNUAL REPORT FY 2010/2011 89

D E P A R T M E N T O F D E F E N C ETable 11.1: Joint Logistic Services Output Detail for FY2010/11 (continued)OutputPerformanceIndicatorTotal stock verificationof items found correctversus items on chargewithin test siteAnnualTargetActual TargetAchievement80% 80%AchievedReasons for Over/ UnderAchievementEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Joint Logistic Services' Outputs has contributed positively to the General Support Programme'sPurpose to provide general support capabilities and services to the Department.S U B P R O G R A M M E :C O M M A N D A N D M A N A G E M E N TI N F O R M A T I O N S Y S T E M SO v e r v i e wDuring the FY2010/11, the CMIS Division continued to provideviable Information Communication Technology (ICT)services and a Joint Information Warfare Strategic DirectionCapability to the DOD, in accordance with its AnnualPerformance Plan. This was achieved despite funding, infrastructureand personnel deficiencies.The CMIS Division provided support to the 2010 FIFAWorld Cup by rendering a Very Small Aperture Terminal(VSAT) (Two Way Satellite Ground Station) capability fornational Video Conferencing.The Free Open Source Software (FOSS) Desktop and Server(Office Application) recommendation, that forms part of theFOSS feasibility within the DOD, has been completed andapproved. The DOD is now in a better position to make decisionson further platforms for the future. The preliminarydesign of the Electronic Content Management System(ECMS) for Defence Intelligence has been completed and isready for implementation during the next financial year.The CMIS Division managed to rollout the IntegratedCommunication Experimental Network (ICENET) in theDOD during the financial year. A total of 338 DOD membersare now connected both internally and externally to the DOD.To protect the DOD systems and users, a Protection AgainstMalicious Code (PAMC) evaluation has been concluded withresults documented in a System Prospectus.The funding for the essential upgrade of the DOD CentralServer has been activated through a re-allocation of fundsfrom projects that have a lesser priority on the DefenceEnterprise Information System Master Plan (DEIS MP). Theprocess for the purchase of a new central server has been initiatedand the delivery is expected in the next financial year.As reported previously, the lack of adequate storage space forthe DOD Archives, combined with the moratorium placed on90the destruction of records, is still an obstacle as far as achievementsafekeeping of DOD records in the DOD Archives isconcerned. The CMIS Division is in consultation with theLogistics Division and National Department of Public Works(NDPW) for additional archive storage space.The problem with regard to the poor infrastructure at thefacility where the DOD's mainframe is located was alsoaddressed in the previous report and remains a concern. If theinfrastructure is not upgraded or adequately repaired, the serviceabilityand availability of the DOD's mainframe withinthis complex may be questionable.The new CMIS Division force design and structure that wassubmitted to the Minister for approval was referred back tothe CMIS Division for clarification and amendments duringthe year. The updated proposal was resubmitted andapproved by the acting C SANDF in January 2011 and later,was submitted to the Secretary for Defence for further action.The continued shortage of personnel in most sections of theCMIS Division will only be addreassed after the finalapproval of the structure.The continued shortfall in funding of the DEIS Master Planresulted in the extension of the realisation of the Master Plan.This may result in some technologies being "obsolete" beforebeing implemented. The value that the DOD ultimatelyrealises from these projects may therefore not be in accordancewith expectations.Difficulties were also experienced during the last quarter ofthe year with the obsolete telecommunication equipment,local area network data, voice cable infrastructure and poweroutages. New equipment needs to be purchased, to avoid possiblepoor service delivery from the CMIS Division that mayhave a negative impact on the DOD. An increase in the baselineallocation of the Division will, however, be required toadequately address this requirement in the next financial year.Despite the challenges experienced, the CMIS Division managedto successfully execute its objectives. The challengesand risks have been managed to ensure that all planned outputswere achieved. The Division will endeavor to continueto provide viable ICT Services and a Joint InformationANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EWarfare Strategic Direction Capability for the DOD.P u r p o s e o f t h e P r o g r a m m eCommand and Management Information Systems is a subprogrammeof the General Support Programme and is to providecommand and management information and relatedservices to the department.O b j e c t i v e s a n d M e a s u r e sProvide the department with key information and communicationsystems byInformation Systems (DEIS) Master Plan, as per theprogramme and project milestones and associated deliverables.S u b p r o g r a m m eCommand and Management Information Systems providescommand and management information systems andrelated services to the department. Funding is distributedaccording to the number and size of mainframe systems, thecommunication infrastructure operated by the department,and maintenance and upgrading requirements.Ensuring that the mainframe service is available 98 percent of the time and the Wide Area Network 95 per centof the time.Providing Information and Communication Systemssolutions in accordance with the Defence EnterpriseO u t p u t D e t a i lTable 11.2 below reports of the achievement of the outputs,performance indicators and targets as specified in the DODStrategic Plan FY2010/11.Table 11.2:Command and Management Information Systems Output Detail for FY2010/11OutputIntegratedInformationand CommunicationSystems (ICS)solutions andenablers forthe DODPerformanceIndicatorLevel of compliancewith the DOD ICSProject Portfolio (DEISMaster Plan) wrt ICSsolutions90%AnnualTarget87%Actual TargetAchievementReasons for Over/ UnderAchievementUnder achievement. Fundswere reallocated from theDEIS MP to the upgrade ofthe DOD Central Server andthis project caused deviationin achievement of projects onthe DEIS MP. When the procurementof the CentralServer did not materialise inthis FY, the expenditure andplanned activities did not takeplace on the DEIS MPThe Electronic ContentManagement System (ECMS)project was delayedAchievedSupportedDOD ICS andJointCommandand ControlProductSystemCapabilityMinimum percentageavailability of ICS supportcapabilityPercentage availabilityof all corporate telecommunicationsandinformation technologyproduct systemsand products98% availability ofmainframe serviceat all times95% availability ofthe Wide AreaNetwork at all times98% availability ofthe DOD tele-communicationbackboneat all times99.94% availability ofmainframe service atall times99.42% availability ofthe Wide AreaNetwork at all times98.33% availability ofthe DOD tele-communicationbackbone atall timesAchieved. The Wider AreaNetwork was reconfigured inorder to implement redundancyin terms of connectivityAchievedANNUAL REPORT FY 2010/2011 91

D E P A R T M E N T O F D E F E N C ETable 11.2: Command and Management Information Systems Output Detail for FY2010/11 (continued)OutputJointInformationWarfare (JIW)StrategicDirectionCapability forthe DODPerformanceIndicatorPercentage Implementationof JIW policies,strategic plans andcontrols in the DODMinimum percentagesecured InformationSystem Security (ISS)solutions provided forDOD ICS Projects 1according to requirementsat al times30%80%AnnualTarget30%Actual TargetAchievement80% of all requirementswere satisfiedReasons for Over/ UnderAchievementAchievedAchievedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Command and Management Information Systems' Outputs has contributed positively to theGeneral Support Programme's Purpose to provide general support capabilities and services to the department.S U B P R O G R A M M E :M I L I T A R Y P O L I C EO v e r v i e wThe Military Police (MP) Division has achieved most of itsobjectives successfully, despite structural challenges andbudget constraints. In striving towards a crime-free militaryenvironment, the MP Division involved Services andDivisions in crime-combating exercises and established ananti-criminality capability to orchestrate the management ofcrime in the DOD. Although service delivery to DOD clientsremained a priority, MP members were also involved inexternal and internal deployments.In the reporting year, a total of 260 members was providedfor deployment in operations. In the DRC 134 memberswere deployed as part of Operation MISTRAL, 10 as part ofOperation THEBE, and two as part of an advisory team. Afurther 10 members were deployed in Sudan, while 104 weredeployed internally during operations and exercises. Of thetotal number, 26 were female of which seven were deployedin command positions.In April 2010, the Provost Marshal General led a delegationto visit the USA to engage with the USA military police inorder to discuss the exchange of training opportunitiesbetween the two countries. Training slots on their criminalinvestigation training programme and basic special investigatorcourse during FY2011/12 were secured.During the opening of Parliament and the 2010 FIFA WorldCup, the MP Division assisted by rendering security supportduring and provided escort services to the DOD as required.A total of 654 deliberate crime prevention operations wereconducted jointly with the SAPS and traffic departmentsthroughout the country, ranging from roadblocks and checkpointsto searches and targeting of identified hot spots.A total of 5 056 criminal and disciplinary cases was carriedover from FY2009/10 and 2 166 new cases were reported. Ofthe reported cases 2 339 were finalized, however, 4 883 docketswill be carried over to FY2011/12. Liaison forums wereestablished between the MP Division and the Legal ServicesDivision to ensure contribution to watertight cases resultingin the speeding up and successful finalisation of cases by bothmilitary and civilian courts.The monetary value of assets that were reported stolen or lostduring FY2010/11 was Rm1.4 and assets to the value of R349798 were recovered. A total of 261 DOD members werearrested, about 200 are uniform and 61 civilian members.Most of them were detained at SAPS facilities because of alack of holding cell capacity at a number of MP structures.The MP Division continued to play a critical role in theFinance Management Division's upgrading of security measuresat cash offices nationwide and in evaluating securitymeasures of cash offices in the deployment areas outside theRSA; ie DRC, CAR and Sudan. 31 crime prevention forumswere held with military communities in different areas ofresponsibility to encourage the understanding of the crimepicture and to address the levels of crime.The Division participated in the Africa Aerospace andDefence Exhibition 2010 held at AFB Ysterplaat inSeptember 2010, with the slogan 'mobilise the youth today tosustain the aerospace and defence capability of tomorrow',which was also aimed at creating MP awareness and targetingthe MSDS interest. Furthermore, in October 2010, the1No ICT project can be released if it is not 100% ISS secured.92ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EMP Division hosted an Annual Anti-criminality Conferencewith the outcome that SITA will integrate data systems duringFY2011/12 in order to accommodate reporting on allidentified transactional systems.Despite the challenges experienced, the MP Divisionremained focused and committed to rendering an effectivepolicing service to the DOD.O b j e c t i v e s a n d M e a s u r e sReduce the number of new criminal cases under investigationby the military police by 10 per cent a year, and sustaining 1provost company for deployment, 4 regional head-quarters,22 area offices and 22 detachments for investigations andcrime prevention, and 2 military correctional facilities.P u r p o s e o f t h e P r o g r a m m eThe Military Police is a subprogramme of the GeneralSupport Programme and provides a military policing capabilityto the department.O u t p u t D e t a i lTable 11.3 provides details of the Military Police outputs,performance indicators and targets as specified in the DODStrategic Plan FY2010/11.Table 11.3:Military Police Output Detail for FY2010/11OutputMilitaryPolicing (MP)Capability tothe DODPerformanceIndicatorNumber of militarypolicing service unitsReducing the numberof criminal cases underinvestigation by theMP that go to courtAnnualTargetFour regional headquarters22 Area offices22 DetachmentsTwo military correctionalfacilities10%Actual TargetAchievementFour regional headquarters22 Area offices22 DetachmentsTwo military correctionalfacilities4.6%Reasons for Over/ UnderAchievementAchievedAchievedAchievedAchievedMost cases are awaiting courtdecision for finalisation.MilitaryPolicingCombatCapabilityNumber of combatreadyprovost companiesavailable accordingto force requirementsOneOneAchievedEffect of Subprogramme Output Achievement on ENE Vote 21 Purpose, Objectives and Measures.The achievement of the Military Police's Outputs has contributed positively to the General Support Programme's Purposeto provide general support capabilities and services to the department.ANNUAL REPORT FY 2010/2011 93

D E P A R T M E N T O F D E F E N C E94ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EPART 3: ORGANISATIONAL STRUCTUREAND HUMAN RESOURCESChapter 12O r g a n i s a t i o n a lS t r u c t u r e a n d H u m a nR e s o u r c e sO v e r v i e wIn pursuance of the new growth path which places people'semployment at the centre of Governments' economic policy,the Department of Defence (DOD) continued during theFY2010/11 with the implementation of its OverarchingHuman Resource Strategy. The strategy aims to ensure anappropriately composed, empowered and managed defencehuman resource complement to execute the DOD's mandateand mission. The emphasis of implementation remained theongoing rejuvenation of the South African National DefenceForce's (SANDF) human resources, the ongoing configurationof the DOD's human resource composition to meet operationalrequirements and the development of the DOD'shuman capital, including youth development initiativesembedded in the Military Skills Development System(MSDS) and National Youth Service (NYS).A total of 4 296 young members were appointed in theMSDS. The sustained implementation of the MSDS has ledto 57% of Privates and equivalent ranks in the Regulars havingcomplied with the ideal rank-age norm of between 18 and24 years, at the end of FY2010/11.As part of the DOD's continued efforts to rejuvenate, 145Uniformed Personnel and 43 Public Service Act Personnelexited voluntarily by means of the Mobility Exit Mechanismand Employee-Initiated Severance Package, respectively.Besides facilitating the DOD's rejuvenation efforts, these voluntaryexits also gave further impetus to improve the demographicrepresentation within the DOD. At the end ofFY2010/11, the full-time human resource composition of theDepartment comprised 71% Africans, 13% Coloureds, 1%Indians and 15% Whites. The total gender composition was27% women and 73% men.During FY2010/11, the acquisition and retention of scarcecombat, technical and professional skills and experience continuedto be a challenge. The DOD continued, however, topursue new retention incentives for the above scarce skillscategories, including the implementation of a new TechnicalAllowance.Besides the intakes for the MSDS, the DOD executed the firstintake for the new NYS. The seven week foundation phasepilot project provided for 500 young people who receivedtraining in amongst others, personal discipline, civic education,patriotism and voluntarism. Together with the MSDS,the NYS remained core Departmental initiatives to preparethe youth for careers either within or outside the DOD.In order to give further impetus to human capital development,the DOD's Human Resource Development Strategywas finalized and is in the final stages of approval.Concomitant with the development of the DOD's WorksCapability to maintain its own facilities, a reskilling programmehas also been embarked on to build capacity withinthe SANDF for the development of qualified professionalsand artisans who will form the core of the future DefenceWorks Capability. At the end of FY2010/11, there were 673members under training with subsequent intakes having beenplanned for the coming financial years.In summary, during FY2010/11 the DOD continued to pursuea human resource composition of appropriate quality, quantity,composition and cost, accountable human resource administrationand meeting its commitments in pursuance ofGovernment's human resource policy and strategy.Note: In cases where the added total differs from theindicated total in the table, it will be due to the roundingoff of figures.The current DOD Organisational Design is presented inFigure 4.1 below.ANNUAL REPORT FY 2010/2011 95

D E P A R T M E N T O F D E F E N C EFigure 12.1Organisational Structure of the Department of Defence for FY2010/11Level 0Level 1Ministry of Defence and Military VeteransDepartment of DefenceDefence SecretariatSA National Defence ForceDefence Policy,Strategy andPlanningDivisionFinancialManagementDivisionDefenceMatérielDivisionDefenceInternationalAffairsInternalAuditDivisionDefence EnterpriseInformation SystemsManagementDivisionLevel 2HumanResourcesDivisionDefence LegalServicesDivisionDefence ForeignRelationsDivisionDOD CentralJointOperationsDivisionSAArmySAAir ForceSANavySAMilitaryHealthServiceDefenceIntelligenceDivisionCorporateStaffDivisionDefenceInspectorateDivisionMilitary Policy,Strategy andPlanningDefenceReservesChaplainGeneralLogisticsDivisionMilitaryPoliceDivisionCommand &ManagementInformationSystemDivisionM A C R O -P E R S O N N E L S T R E N G T HThe Macro-Personnel Strength of the DOD as at 31 March2011 was 70 134, excluding 8 911 MSDS and 26 147 Reservemembers. The planned average strength budgeted forthe FY2010/11 is compared with the actual strength at the endof the financial year, in Table 12.1 below:Table 12.1: DOD's Average Planned and Actual Strength as at 31 March 2011Budget HolderPlannedActualSA ArmySA Air ForceSA NavySA Military Health ServicesDefence Legal Services DivisionDefence Corporate CommunicationDefence ReservesDefence Foreign Relations DivisionCorporate Staff DivisionMilitary Policy, Strategy and Planning40 28011 2616 6418 87136669301073762540 28611 1927 5089 00134055251024122396ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.1: DOD's Average Planned and Actual Strength as at 31 March 2011 (continued)Budget HolderPlannedActualHuman Resources DivisionMinistry of DefenceChief of the SANDF OfficeDefence Inspectorate DivisionChaplain GeneralDefence Policy, Strategy and Planning DivisionFinancial Management DivisionSecretary for DefenceDefence International AffairsLogistic DivisionCommand and Management Information System DivisionMilitary Police DivisionDefence Intelligence Division*Joint Operations DivisionDefence Material DivisionDepartment of Military VeteransTotal1 6833116137249886740182 3411731 9587521 85875078 0971 7004013142228787135172 6461461 7537681 775731379 045The DOD right-sizing and changes in the year-end strengths since the FY2001/02 are indicated in Figure 2 below:Figure 12.2 Department of Defence Year-end Strength as at 31 March 201180 000Year-end Strength79 00078 00077 00076 00075 00074 00073 00072 0002001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11* Support Personnel.ANNUAL REPORT FY 2010/2011 97

D E P A R T M E N T O F D E F E N C ES E L E C T E D P E R F O R M A N C E I N D I C A T O R STable 12.2 provides the achievement of the selected performance indicators and targets during the past three years and reportson the achievement for the year under review in accordance with the Strategic Plan for FY2010/11.Table 12.2: DOD Selected Performance Indicators for the FY2010/11ProgrammeLandwardDefenceForce EmploymentForce EmploymentForce EmploymentForce EmploymentForce EmploymentLandwardDefenceAir DefenceMaritimeDefenceMilitaryHealthSupportIndicatorTotal number of activeReservesNumber of external operationseach yearAverage number of personneldeployed daily in externaloperations 2Number of internal operationsin support of other Governmentdepartments per yearNumber of person days usedduring internal operationsNumber of joint, inter-departmentaland multinational militaryexercises conducted peryearNumber of Military SkillsDevelopment members in thesystem per yearNumber of flying hours in supportof operations each yearNumber of multi-nationalexercise flying hours 4Number of sea hours on patrolin South African maritimezones per yearNumber of health care activitiesper year2006/0713 050144 8103-164 7109 7889 949-PerformancePast2007/0812 583112 6983515 516104 67712 2719 648-2008/0919 76392 9316231 608106 73611 09910 478-2009/1013 352123 0245156 38198 833950012 945-Projection2010/1113 500 1Current122 1025515 5168 311 1409 50010 0002 086 002ActualAchievement2010/1112 36252 2385556 09967 98315 265016 89713 8651The estimate of 31 500 active Reserves is the projected number of Reserves in the department's database, however, theactual Projection for FY2010/11 was 13 500 which reflects the number of Reserves called up during the financial year.2For every member deployed in operations, there are two members being prepared for rotation. The actual number of membersinvolved in deployment is therefore three times the number indicated in the table, to allow for sufficient "depth" of forcepreparation and readiness.3J Ops Div was responsible for eight JIM exercises and the SAAF for one.4A combined Air Transport exercise involving the South African and Namibian Air Forces and the Lesotho Air Wing which isan Air Force unique exercise, however, did not materialize during FY2010/11 as expected.98ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ES E R V I C E D E L I V E R Y I M P R O V E M E N T P L A NTable 12.3: Main Services Provided and StandardsMain ServicesPrimaryClientsSecondaryClientsStandard of ServiceActual Achievement AgainstStandardsMilitary Skills DevelopmentSystem. TheMSDS will provide qualifiedmilitary practitionerswho will enhance theoperational readiness ofthe SANDF (deploymentin external and internaloperations), by rejuvenatingRegulars andReserves and grantingdevelopment andempowerment opportunitiesto the SA Youth.Balanced Scorecard(BSC). Implementationof performance managementin the DOD bymeans of the BSCmethodology in order toempower leadership tomake informed decisionsand enhance visibility ofperformanceDOD (HR rejuvenationofRegulars andReserves)Youth of theRSA.Public andPrivateEnterpriseswith membersexiting theDOD after twoyears of serviceThe plannedstrength of 5 570 willenter into service toensure the rejuvenationof Regulars andthe Reserves.Approximately1 350 empoweredMSDS members jointhe Reserves toimprove the conventionalcapability ofthe SANDF4 296 entered into service toensure the rejuvenation ofRegulars and the Reserves.Approximately 708 empoweredMSDS members joined theReserves to improve the conventionalcapability of the SANDFDODLeadershipMembers andemployees ofthe DOD(Personnel governedby theDefence Actand PublicService Actrespectively)Top three scorecardsintegrated into DOD2011/12 StrategicBusiness PlanQuantityTop three scorecards aligned withNational Treasury requirements,the DOD's Electoral and sustainedmandate. Fully integratedinto the DOD 2011/12 StrategicBusiness Plan.QualityLevel 1 Strategic Business Plansfor 2011/12 approved in BalancedScorecard formatTable 12.4:Consultation arrangements with clientsType of ArrangementPrimary ClientsSecondary ClientsActual AchievementsThe recruitment target set for theSANDF is met in terms of qualityand quantityThe members who exit theSANDF join the Reserves afterReserves briefingsThe young school leavers are providedwith both military and lifeskills before leaving the SANDFThe service contracts are issued tothose members who qualify to supportthe drive to rejuvenate theRegulars and ReservesDepartment of Treasury involved inthe full integration of the BSCDOD (HR rejuvenationof Regulars andReserves)DOD LeadershipYouth of the RSAPublic and PrivateEnterprises with membersexiting the DODafter two years ofserviceMembers and employeesof the DOD(Personnel governedby the Defence Act andPublic Service Actrespectively)That the recruiting target setfor the SANDF is 1 330 lessthan the quantity but thequality standard remain thesame.Development of organisationalperformance and individualperformance other than seniormanagement (post level 12and lower) to align based onBalanced Scorecardmethodology.ANNUAL REPORT FY 2010/2011 99

D E P A R T M E N T O F D E F E N C ETable 12.5:Service delivery access strategiesAccess StrategiesThe DOD embarks on structured recruitmentdrives for school leavers to enter the MSDS, utilizingphysical recruitment visits and lectures atschools and by means of television, newspapers,periodicals, radio and the internet.Partial automation of the DOD's BSC'sActual Achievements4 296 entered into service to ensure the rejuvenation of Regulars andthe Reserves.Approximately 708 MSDS members joined the Reserves to improvethe conventional capability of the SANDFAutomation of DOD's Balanced Scorecard undergoing testing andevaluation.Table 12.6:Service information toolTypes of Information ToolsInformation is provided through physicalrecruitment visits to schools, including lectures,and by means of television, brochures, pamphlets,periodicals, radio and the internet, opendays and Commanding Officers' briefings, oncein service.Policies and directivesDOD HR intranet websiteSA SoldierDOD Information BulletinsPublic Service Act Personnel Induction andReorientation ProgrammesEmpowerment Workshops for CommandersActual AchievementsInformation tools utilized optimallyPromulgated and updated annually.Updated weekly with information about DOD HR managementnotices, developments and activities.Official DOD monthly publication that includes articles focusing onDOD HR activities.Published to inform personnel about HR-related developments within the DOD.Scheduled programmes conducted twice per year to introduce newlyappointed and serving Public Service Act Personnel to the organisationand functioning of the Department at large.Ongoing workshops presented to empower Commanders in themanagement of Labour Relations.Table 12.7:Complaints mechanismComplaints MechanismNew Individual Grievances Regulationspromulgated by MOD on 30 June 2010Actual AchievementsThe new process is fully supported by the Grievance IT System andavailable throughout the DOD100ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EE X P E N D I T U R ETable 12.8: Personnel Costs by Programme, FY 2010/11ProgrammeAdministrationLandward DefenceAir DefenceMaritime DefenceMilitary Health SupportDefence IntelligenceGeneral SupportForce EmploymentTOTALTotalExpenditure(Rand)3 452 849 3829 418 620 0915 343 217 2212 371 665 7823 150 995 306632 933 9033 678 036 0452 265 456 73730 313 774 467PersonnelExpenditure(Rand)1 148 220 1047 334 288 9032 364 473 5921 385 130 0492 092 896 619213 150 516989 033 6051 190 430 73616 717 624 125TrainingExpenditure(Rand)13 361 19429 594 01031 770 5477 311 5329 950 3422 530 55621 020 2123 438 407118 976 799Professionaland SpecialServices(Rand)42 546 86724 669 089292 218 65625 329 46165 816 4752 957 564244 868 38016 639 092715 045 584PersonnelCost as aPercent ofTotalExpenditure33%78%44%58%66%34%27%53%55%AveragePersonnelCost perEmployee(Rand)289 224182 056211 265184 487232 518277 540217 609670 665211 495Note: Personnel expenditure includes payments to the value of Rm120 592 272 which were made to Households in respect of attrition. Inaddition, the Total Expenditure includes Special Defence Account to the value of Rm3 010 319 990.Table 12.9:Personnel Costs by Salary Bands FY2010/11Salary BandsPersonnel Expenditure(Rand)Percentage of TotalPersonnel CostAverage Personnel Costper Employee (Rand)Senior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledMilitary Skills Development SystemInternsTOTAL252 029 204126 496 0753 791 691 3235 639 056 2116 079 015 489180 847 562647 865 326622 93516 717 624 1251.508%0.757%22.681%33.731%36.363%1.082%3.875%0.004%100.000%961 9441 374 957421 580236 637174 40486 53072 70462 294211 495ANNUAL REPORT FY 2010/2011 101

D E P A R T M E N T O F D E F E N C ETable 12.10: Salaries, Overtime, Home Owners Allowance and Medical Assistance by ProgrammeFY2010/11ProgrammeAdministrationLandwardDefenceAir DefenceMaritimeDefenceMilitary HealthSupportDefenceIntelligenceGeneralSupportForceEmploymentTOTALAmount758 835 4504 844 589 1681 511 183 477902 980 6031 325 336 146154 008 262677 463 251308 795 45110 483 191 809Salaries Overtime Home OwnersAllowanceSalariesasa % ofPersonnelCost66%66%64%65%63%72%68%26%63%Amount3 268 95543 895 7386 248 69029 748 373136 441 440283 8927 650 700166 300 570393 838 358Overtimeas a % ofPersonnelCost0.3%0.6%0.3%2.1%6.5%0.1%0.8%14.0%2.4%Amount18 621 964179 394 57247 408 95828 664 13629 648 7233 702 62822 553 6787 399 700337 394 359HOA asa % ofPersonnelCost1.6%2.4%2.0%2.1%1.4%1.7%2.3%0.6%2.0%Medical AssistanceAmount13 006 64032 140 37914 396 15212 581 9107 872 488558 6235 893 5891 199 99087 649 771MedicalAssistanceas a % ofPersonnelCost1.1%0.4%0.6%0.9%0.4%0.3%0.6%0.1%0.5%Table 12.11: Salaries, Overtime, Home Owners Allowance and Medical Assistance by Salary BandsFY2010/11Salary BandsSeniorManagementSeniorProfessionalsHighly SkilledSupervisionHighly SkilledProductionSkilledLower SkilledInternsTOTALAmount124 239 03962 078 3532 432 083 5363 729 497 0554 019 956 685114 844 154492 98710 483 191 809Salaries Overtime Home OwnersAllowanceSalariesasa % ofPersonnelCost49%49%64%66%66%64%79%63%Amount1 075 72428 147 830127 178 942112 617 774123 357 1961 460 8920393 838 358Overtimeas a % ofPersonnelCost0.4%22.3%3.4%2.0%2.0%0.8%0.0%2.4%Amount0037 805 018121 281 019164 777 38213 530 9410337 394 359HOA asa % ofPersonnelCost0.0%0.0%1.0%2.2%2.7%7.5%0.0%2.0%Medical AssistanceAmount003 165 98829 100 09643 732 72611 650 962087 649 771MedicalAssistanceas a % ofPersonnelCost0.0%0.0%0.1%0.5%0.7%6.4%0.0%0.5%102ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EE M P L O Y M E N T A N D V A C A N C I E STable 12.12: Employment and vacancies by Programme as at 31 March 2011ProgrammeNumber ofPostsNumber ofEmployeesVacancyRateNumber of Posts FilledAdditional to theEstablishmentDefence Administration51853 97023.43%1 215Landward Defence43 35440 2867.08%3 068Air Defence12 81811 19212.69%1 626Maritime Defence7 1757 508-4.64%-333Military Health Services9 8639 0018.74%862Defence Intelligence1 08676829.28%318General Support5 4224 54516.17%877Force Employment2 4261 77526.83%651TOTAL87 32979 0459.49%8 284Note: Posts refer only to approved production posts on the post establishment of which only 78 097 were funded for FY2010/11.Table 12.13: Employment and vacancies by Salary Bands as at 31 March 2011Salary BandsNumber ofPostsNumber ofEmployeesVacancyRateNumber of Posts FilledAdditional to theEstablishmentSenior Management30326213.53%41Senior Professionals2929268.49%200Highly Skilled Supervision10 2588 99412.32%1 264Highly Skilled Production33 09223 83027.99%9 262Skilled32 41334 856-7.54%-2 443Lower Skilled10 9712 09080.95%8 881Military Skills Development System08 9110.00%-8 911Interns0100.00%-10TOTAL87 32979 0459.49%8 284Note: Posts refer only to approved posts captured on the post establishment. There are no designated MSDS posts as MSDS membersare placed in training posts at the commencement of their training and only after training are they utilised in approved productionposts.ANNUAL REPORT FY 2010/2011 103

D E P A R T M E N T O F D E F E N C ETable 12.14: Employment and vacancies by Critical Occupation as at 31 March 2011Critical OccupationNumber ofPostsNumber ofEmployeesVacancyRateNumber of Posts FilledAdditional to theEstablishmentAir Space Control537548-2.05%-11Aircrew61851716.34%101Anti-Aircraft9709076.49%63Artillery1 2921 498-15.94%-206Combat Navy38634111.66%45Engineer17714020.90%37Health Professional*1 6451 40414.65%241Nursing1 6551 785-7.85%-130Technical7 7356 78812.24%947TOTAL15 01513 9287.24%1 087Note:Occupations included in the Health Professional category are Medical Practitioners, Pharmacists, Specialists and Ancillary Health.Posts refer only to approved production posts captured on the post establishment. There are currently 1 138 MSDS under trainingof which 270 are in the Artillery occupation resulting in a figure of 206 members additional to the establishment.J O B E V A L U A T I O NTable 12.15: Job Evaluation for the Period 01 April 2010 to 31 March 2011Salary BandsNumberof PostsNumber ofJobsEvaluated% of PostsEvaluatedby SalaryBandPosts UpgradedNumber% of PostsEvaluatedPosts DowngradedNumber% of PostsEvaluatedSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledMilitary Skills DevelopmentSystem30329210,25833,09232,41310,97103301341,2581,186783010.89%0.00%1.31%3.80%3.66%7.14%0.00%00034000.00%0.00%0.00%0.24%0.34%0.00%0.00%00020000.00%0.00%0.00%0.16%0.00%0.00%0.00%InternsTOTAL087,32903,3940.00%3.89%070.00%0.21%020.00%0.06%Table 12.16: Profile of Employees Whose Salary Positions were Upgraded due to Their Posts beingUpgraded for the Period 1 April 2009 to 31 March 2010BeneficiariesAfricanIndianColouredWhiteTOTALFemale00000Male00000TOTAL00000Employees with a disability0104ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.17: Employees whose salary level exceed the grade determined by job evaluation as at 31March 2011 (in terms of PSR 1.V.C.3)Employees whose salary level exceed the grade determined by job evaluation 0Table 12.18: Profile of employees whose salary level exceed the grade determined by job evaluationas at 31 March 2011 (in terms of PSR 1.V.C.3)Profile of employees whose salarylevel exceed the grade determinedby job evaluationFemaleMaleTOTALAfrican000Indian000Coloured000White000TOTAL000E M P L O Y M E N T C H A N G E STable 12.19: Annual Turnover Rates by Salary Band for the Period 01 April 2010 to 31 March 2011Salary BandsMinister/Deputy/AdvisorsSenior Management Service Band DSenior Management Service Band CSenior Management Service Band BSenior Management Service Band ASenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledMilitary Skills Development SystemInternsTOTALNumber ofEmployees as at1 April 20010521452184798 83723 21833 2862 2478 8741476 812Appointments andTransfers into theDepartment0112091852321703164 29695 221Terminations andTransfers out ofthe Department00261464496229006991282 988TurnoverRate0.00%50.00%-7.14%-7.69%-7.61%3.80%-2.99%-1.68%-2.19%10.99%38.13%7.14%2.91%ANNUAL REPORT FY 2010/2011 105

D E P A R T M E N T O F D E F E N C ETable 12.20: Annual Turnover Rates by Critical Occupation for the Period 01 April 2010 to 31 March2011Critical OccupationAir Space ControlAircrewAnti-AircraftArtilleryCombat NavyEngineerHealth ProfessionalNursingTechnicalTOTALNumber ofEmployees as at1 April 20105575258971 5473371491 3841 6946 47913 569Appointments andTransfers into theDepartment48970111010249132189818Terminations andTransfers out ofthe Department121857158101123957185747TurnoverRate6.46%-1.71%1.45%-3.04%-2.97%-0.67%0.72%4.43%0.06%0.52%Note: 541 MSDS members are included in the total appointment figure for all critical occupations.Table 12.21a: Reasons why staff left the department for the Period 01 April 2010 to 31 March 2011Termination TypeDeathResignationContract ExpiryTransferDismiss - Ops RequirementDismiss- Ill HealthDismiss - MisconductDischarge - IncapacityRetirementMEM/EISP/VSPTotal Number of Employees who left as a % of the Total Employment as at31 March 2011Number58541799373110215634701882 988% of Total19.58%13.96%33.23%2.44%0.03%3.41%5.22%0.10%15.73%6.29%3.78%Table 12.21b: Mobility Exit Mechanism Packages Granted for the Period 1 April 2010 to 31 March2011 - Uniformed PersonnelSenior ManagementHighly skilled supervisionHighly skilled productionSkilledTOTALSalary BandNumber of PackagesApproved6774220145106ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.21c: Employee Initiated Severance Packages Granted for the Period 1 April 2010 to 31 March2011 - Public Service Act PersonnelHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledTOTALSalary BandNumber of PackagesApproved72510143Table 12.22: Promotions by Critical Occupation for the Period 01 April 2010 to 31 March 2011Critical OccupationAir Space ControlAircrewAnti-AircraftArtilleryCombat NavyEngineerHealth ProfessionalNursingTechnicalTOTALNumber ofEmployees as at1 April 20105575258971 5473371491 3841 6946 47913 569Promotions toAnother Salary Level8964846178541431147871 474Salary Level Promotionsas a % of Employees byOccupation15.98%12.19%9.36%3.94%23.15%36.24%10.33%6.73%12.15%10.86%Table 12.23: Promotions by Salary Band for the Period 01 April 2010 to 31 March 2011Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledMilitary Skills Development SystemInternsTOTALNumber ofEmployees as at1 April 2010257798 83723 21833 2862 2478 8741476 812Promotions toAnother Salary Level1098552 4314 55133007 889Salary Level Promotionsas a % of Employees byOccupation3.89%11.39%9.68%10.47%13.67%1.47%0.00%0.00%10.27%ANNUAL REPORT FY 2010/2011 107

D E P A R T M E N T O F D E F E N C EE M P L O Y M E N T E Q U I T YTable 12.24a: Total number of employees (INCLUDING employees with disabilities) in each of thefollowing occupational categories as at 31 March 2011Occupational Category(SASCO)Legislators, Senior Officialsand ManagersProfessionalsTechnicians and AssociateProfessionalsClerksService and Sales WorkersCraft and Related TradesWorkersPlant and MachineOperators and AssemblersElementary OccupationsTOTALAfrican17503 2135 72422 0044 6242765 41842 010Male Female TOTALAsian08560101176182123628Coloured01434331 5152 9411 070951 0657 262White04961 1981 1321 9752 222225297 574African16831 5743 4285 0241 14862 51314 377Asian08351722611013256Coloured019331067177119915812 726White05975642 12651224501684 21223 0307 40314 76933 4299 70140110 31079 045Table 12.24b: Total number of employees (ONLY employees with disabilities) in each of the followingoccupational categories as at 31 March 2011Occupational Category(SASCO)ProfessionalsTechnicians and AssociateProfessionalsClerksService and Sales WorkersCraft and Related TradesWorkersPlant and MachineOperators and AssemblersElementary OccupationsTOTALAfrican31668832719207Male Female TOTALAsian00211004Coloured0419121201562White2112618360497African036310417Asian00000000Coloured00310015White453106065293915511883139444108ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.24c: Total number of employees (INCLUDING employees with disabilities) in each of thefollowing occupational bands as at 31 March 2011Occupational BandTop ManagementSenior ManagementProfessionally QualifiedSkilled TechnicalSemi-skilledUnskilledMilitary SkillsDevelopment SystemInternsTOTALAfrican151422 59810 51523 2939194 521742 010Male Female TOTALAsian111157317892510628Coloured077752 9602 73818959307 262White11003 0363 2197411346407 574African4429803 3926 4467752 735314 377Asian0876114325210256Coloured041787921 17416041802 726White1181 1942 5213432710804 212223328 99423 83034 8562 0908 9111079 045Table 12.24d: Total number of employees (ONLY employees with disabilities) in each of the followingoccupational bands as at 31 March 2011Occupational BandProfessionally QualifiedSkilled TechnicalSemi-skilledUnskilledTOTALAfrican22671171207Male Female TOTALAsian04004Coloured23424262White35548097African269017Asian00000Coloured04105White6388052672071673444Table 12.25a: Recruitment (INCLUDING employees with disabilities) for the Period 01 April 2010 to31 March 2011Occupational BandsTop ManagementSenior ManagementProfessionally QualifiedSkilled TechnicalSemi-skilledUnskilledMilitary SkillsDevelopment SystemInternsTOTALAfrican163355621612 11662 440Male Female TOTALAsian011050129046Coloured0015115103200361White002218831900241African143389791221 30531 636Asian001361013033Coloured009165132580301White0050321066501632111852321703164 29695 221Table 12.25b: Recruitment (ONLY employees with disabilities) for the Period 01 April 2010 to31 March 2011Recruitment employees with disabilities 0ANNUAL REPORT FY 2010/2011 109

D E P A R T M E N T O F D E F E N C ETable 12.26a: Promotions (INCLUDING employees with disabilities) for the Period 01 April 2010 to31 March 2011Occupational BandsTop ManagementSenior managementProfessionally QualifiedSkilled TechnicalSemi-skilledUnskilledTOTALAfrican163601 4072 61154 390Male Female TOTALAsian02152817062Coloured007120734814640White051631681590495African011224001 19781 728Asian029155031Coloured0117821656271White01981244902721188552 4314 551337 889Table 12.26b: Promotions (ONLY employees with disabilities) for the Period 01 April 2010 to 31March 2011Occupational BandProfessionally QualifiedSkilled TechnicalSemi-skilledTOTALAfrican351220Male Female TOTALAsian0101Coloured0426White0101African1135Asian0000Coloured0000White10015121734Table 12.27a: Terminations (INCLUDING employees with disabilities) for the Period 01 April 2010 to31 March 2011Occupational BandTop ManagementSenior ManagementProfessionally QualifiedSkilled TechnicalSemi-skilledUnskilledMilitary SkillsDevelopment SystemInternsTOTALAfrican06872046163846251 418Male Female TOTALAsian00177106031Coloured001753676620205White114164100260670372African134284157182553563Asian011612102032Coloured00824246440106White0298138811402612264496229006991282 988110ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.27b: Terminations (ONLY employees with disabilities) for the Period 01 April 2010 to31 March 2011Occupational BandProfessionally QualifiedSkilled TechnicalSemi-skilledUnskilledTOTALAfrican022610Male Female TOTALAsian00000Coloured00101White12306African00000Asian00000Coloured00000White01102157619Table 12.28: Misconduct and Disciplinary Hearings Finalized for the Period for the Period 01 April2010 to 31 March 2011Occupational BandsSenior managementProfessionally QualifiedSkilled TechnicalSemi-skilledUnskilledMilitary SkillsDevelopment SystemTOTALAfrican04006010Male Female TOTALAsian0012306Coloured1000001White0300003African0100203Asian0000000Coloured0000000White0003003181511026Table 12.29: Skills Development - Training Provided during the Period 01 April 2010 to 31 March2011Occupational BandsSenior managementProfessionally QualifiedSkilled TechnicalSemi-skilledUnskilledMilitary SkillsDevelopment SystemTOTALAfrican253 9872 07416 108304 05126 275Male Female TOTALAsian3172382710257741Coloured83773971 04108692 692White101 0895666 44501 8239 933African151 2587645 200372 0479 321Asian16531165021283Coloured3175532710215717White44842501 43607852 959697 6074 17330 9376710 06852 921ANNUAL REPORT FY 2010/2011 111

D E P A R T M E N T O F D E F E N C EP E R F O R M A N C E R E W A R D STable 12.30: Performance Rewards by Race, Gender and Disability for Personnel below SeniorManagement Service (INCLUDING members with disabilities) for the Period 01 April 2010 to31 March 2011RaceGenderTotal number ofEmployees in Groupas at 1 April 2010Number ofBeneficiaries% of TotalwithinGroupTotal Cost(Rand)Average costper Employee(Rand)AfricanAfrican TotalAsianAsian TotalColouredColoured TotalWhiteWhite TotalGrand TotalEmployees with DisabilitiesMaleFemaleMaleFemaleMaleFemaleMaleFemale40 86213 27654 1386072488557 0992 5329 6317 6344 29711 93176 5554647 2082 0309 238115591741 5265742 1001 7001 1442 84414 3569317.6%15.3%17.1%18.9%23.8%20.4%21.5%22.7%21.8%22.3%26.6%23.8%18.8%20.0%20 417 2445 896 41326 313 656458 566259 760718 3264 721 5001 687 5746 409 0747 730 3744 668 37012 398 74445 839 800286 9002 8332 9052 8483 9884 4034 1283 0942 9403 0524 5474 0814 3603 1933 085Note: The total costs for performance rewards excludes the appreciation allowance, Rm65, 640, 330, paid to all DOD uniformed personnelin Dec 2010.Table 12.31: Performance Rewards by Salary Band for Personnel below Senior Management Servicefor the Period 01 April 2010 to 31 March 2011Salary BandSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledMilitary SkillsDevelopment SystemInternsTOTALTotal numberof Employeesas at 1 April2009798 83723 21833 2862 2478 874Beneficiary Profile1476 555Numberof Beneficiaries61 9995 7456 2093970014 356% of TotalwithinSalaryBand7.59%22.62%24.74%18.65%17.67%0.00%0.00%18.75%Total Cost(Rand)48 24012 251 52219 000 30913 991 840547 8900045 839 800CostAveragecost perEmployee(Rand)8 0406 1293 3072 2531 380003 193Total Cost as a % ofthe Total PersonnelExpenditure perSalary Band0.04%0.32%0.34%0.23%0.30%0.00%0.00%0.27%112ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.32:2011Performance Rewards by Critical Occupations for the Period 01 April 2010 to 31 MarchCritical OccupationTotal number ofEmployees as at1 April 2009Beneficiary ProfileNumberof Beneficiaries% of Totalwithin SalaryBandTotal Cost(Rand)CostAverage cost perEmployee (Rand)Air Space ControlAircrewAnti-AircraftArtilleryCombat NavyEngineerHealth ProfessionalNursingTechnicalTOTAL5515138961 5443241441 3691 6926 47013 503998216522871151922801 0412 17318.0%16.0%18.4%14.8%21.9%10.4%14.0%16.5%16.1%16.1%419 288474 400511 608683 360393 60082 4401 248 2001 310 9603 760 3248 884 1804 2355 7853 1012 9975 5445 4966 5014 6823 6124 088Table 12.33: Performance Related Rewards (cash bonus) by Salary Band for Senior ManagementService for the Period 01 April 2010 to 31 March 2011Salary BandSenior ManagementService Band ASenior ManagementService Band BSenior ManagementService Band CSenior ManagementService Band DMinister/Deputy/AdvisorsTOTALTotal numberof Employeesas at1 April 2009184Beneficiary Profile521425257Numberof Beneficiaries000000% of TotalwithinSalary Band000000TotalCost(Rand)000000CostAveragecost perEmployee(Rand)000000Total Cost as a % ofthe Total PersonnelExpenditure perSalary Band000000 0.0%F O R E I G N W O R K E R STable 12.34: Foreign Workers by Salary Band for the Period 01 April 2010 to 31 March 2011Foreign Workers by Salary Band 0Table 12.35: Foreign Workers by Major Occupation for the Period 01 April 2010 to 31 March 2011Foreign Workers by Major Occupation 0ANNUAL REPORT FY 2010/2011 113

D E P A R T M E N T O F D E F E N C EL E A V E U T I L I S A T I O NTable 12.36a: Sick Leave (taken by Uniformed Personnel) for the Period 01 January 2010 to31 December 2010Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledMilitary Skills DevelopmentSystemTOTALTotalDays95130039 275113 630121 3036 962282 421Number ofEmployees usingSick Leave124385 17213 63915 0391 54735 559% of TotalEmployees usingSick Leave60.19%50.00%63.21%66.70%52.35%17.36%53.43%Average Days perEmployee usingSick Leave8888858EstimatedCost (Rand)1 577 964801 75940 097 05369 860 87755 010 9301 969 479169 318 062Table 12.36b: Sick Leave (taken by Public Service Act Personnel) for the Period 01 January 2010 to 31December 2010Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledInternsTOTALTotalDays163284 42134 42550 39715 55962105 055Number ofEmployees usingSick Leave2855622 9984 5431 402109 548% of TotalEmployees usingSick Leave50.00%31.25%69.21%88.65%74.11%67.08%100.00%76.41%Average Days perEmployee usingSick Leave668111111611EstimatedCost (Rand)271 01158 6504 732 55918 323 22714 272 6903 649 24015 87641 323 254Note: Employees are entitled to 36 working days sick leave in a cycle of 3 years on an average norm of 11 working days per year.Table 12.37a: Disability Leave (temporary and permanent - taken by Uniformed Personnel) for thePeriod 01 January 2010 to 31 December 2010Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledMilitary Skills DevelopmentSystemTOTALTotalDays278317 45517 48418 9733544 256Number ofEmployees usingDisability Leave6122959658541 421% of TotalEmployees usingDisability Leave2.91%1.32%2.80%2.91%2.04%0.04%2.14%Average Days perEmployee usingDisability Leave4631332932931EstimatedCost (Rand)456 29582 2337 731 34311 042 1808 770 81114 75528 097 617114ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.37b: Disability Leave (temporary and permanent - taken by Public Service Act Personnel) forthe Period 01 January 2010to 31 December 2010Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledInternsTOTALTotalDays002985 71313 2633 048022 322Number ofEmployees usingDisability Leave0010165248710494% of TotalEmployees usingDisability Leave0.00%0.00%1.23%4.88%4.05%3.40%0.00%3.95%Average Days perEmployee usingDisability Leave0030355343045EstimatedCost (Rand)00372 1292 964 4043 723 535736 62407 796 693Note: Employees are entitled to disability leave after the 36 working days of normal sick leave have been fully utilized.Table 12.38a: Annual Leave (taken by Uniformed Personnel) for the Period 01 January 2010 to31 December 2010Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledMilitary Skills Development SystemTOTALTotal Days Taken4 7411 735198 377484 581567 957229 5071 286 900Average Days per Employeeusing Annual Leave242324242211323Table 12.38b: Annual Leave (taken by Public Service Act Personnel) for the Period 01 January 2010 to31 December 2010Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledInternsTOTALTotal Days Taken95723913 49578 843152 15140 31992286 096Average Days per Employeeusing Annual Leave202423242522724Note: Employees with less than 10 years service are entitled to 22 working days annual leave and employees with more than 10 yearsservice are entitled to 26 working days annual leave.ANNUAL REPORT FY 2010/2011 115

D E P A R T M E N T O F D E F E N C ETable 12.39a: Capped Leave (taken by Uniformed Personnel) for the Period 01 January 2010 to31 December 2010Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledTOTALTotal Days ofCapped LeaveTaken105555 6699 3029 05224 183Average Numberof Days Taken perEmployee586565Average Capped Leave perEmployee as at 31 December20101186951262130Table 12.39b: Capped Leave (taken by Public Service Act Personnel) for the Period 01 January 2010 to31 December 2010Salary BandSenior ManagementSenior ProfessionalsHighly Skilled SupervisionHighly Skilled ProductionSkilledLower SkilledTOTALTotal Days ofCapped LeaveTaken1701 1261 0353 0284555 660Average Numberof Days Taken perEmployee60254676Average Capped Leave perEmployee as at 31 December201044514731513444Note:Although 8% of employees took capped leave, it is to the benefit of the DOD as it will reduce the financial contingent liability on theDOD with respect to leave creditsTable 12.40a: Leave Payouts, FY2010/11 - Uniformed PersonnelReasonLeave Payout for FY2010/11 due tonon-utilization of leave for previous cycleLeave Payout for FY2010/11 due todiscounting of LeaveLeave Payout for FY2010/11 onTermination of ServiceTOTALTotal Amount045 885 05945 073 90290 958 962Number ofEmployees04 4419135 354Average Payment perEmployee010 33249 36916 989116ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.40b: Leave Payouts, FY2010/11 - Public Service Act PersonnelReasonLeave Payout for FY2010/11 due tonon-utilization of leave for previous cycleLeave Payout for FY2010/11 due todiscounting of LeaveLeave Payout for FY2010/11 onTermination of ServiceTOTALTotal Amount01 983 43912 053 42914 036 869Number ofEmployees0464515979Average Payment perEmployee04 27523 40514 338Note: All vacation leave to an employee's credit on termination of service by means of retirement medical retirement early retirement contractexpiry or exit mechanisms are paid out. Discharges (misconduct) are excluded.H I V / A I D S A N D H E A L T H P R O M O T I O N P R O G R A M M E STable 12.41a:Steps taken to reduce the risk of occupational exposureUnits/categories of employees identified to beat high risk of contracting HIV & related diseases(if any)Low risk: All membersMedium risk: Members on deployment (internalto RSA) ie RSA border protection bases / postsHigh risk: Members on deployment (external to RSA)Key steps taken to reduce the riskHIV workplace programmesPeer education programmesBuddy aid programmesAvailability first aid kits/boxesWellness programmeCondom distribution points for both males and femalesHealth promotion programmes before deploymentAll the above programmes and interventions apply. The emphasiseis on discipline and the conduct of military personnelBuddy aid lecturesTrained operational emergency care practitionersAll the programmes and interventions reflected for low andmedium risk exposurePeer educationTrained operational emergency care practitionersSpecific HIV prevention programmesSpecific health promotion programmes during deploymentANNUAL REPORT FY 2010/2011 117

D E P A R T M E N T O F D E F E N C ETable 12.41b: Details of Health Promotion and HIV / Aids ProgrammesQuestionHas the department designated amember of the SMS to implementthe provision contained in Part VIe of Chapter 1 of the Public ServiceRegulations 2001? If so provideher/his name and position.Does the department have a dedicatedunit or has it designated specificstaff members to promote thehealth and well-being of youremployees? If so indicate thenumber of employees who areinvolved in this task and the annualbudget that is available for thispurpose.Has the department introduced anEmployee Assistance or HealthPromotion Programme for youremployees? If so indicate the keyelements/services of thisProgramme.YesXXXNoDetails if YesBrig Gen L.L. SiwisaDirector HIV/AIDSSANDF HIV/AIDS Programme ManagerThe Directorate HIV/AIDS Programmes coordinate "TheComprehensive Plan for Care, Management and Treatment ofHIV/AIDS in the DOD" with a staff compliment of three members,including the Director.Two members manage monitoring and evaluation of theDOD HIV/AIDS programme.HIV prevention and health promotion Programmes are plannedand implemented throughout the organisation by 15 RegionalHIV Managers.Wellness programmes are executed at SA Army, SA Air Force,SA Navy and SAMHS unit level through Military CommunityDevelopment Committees. All Commanding Officers in theSANDF have the responsibility to ensure that wellness programmestake place in their respective environments.Health care practitioners at primary health care level provideHIV prevention, health promotion and curative HIV/AIDSProgrammes to all patients/clients throughout the organisation.The HIV/AIDS Programme of the DOD is funded through thedepartments' budget and the SAMHS Budget and the performancereport on policy options by the SAMHS Budget Managerindicates a budget allocation of Rm33,4.The SAMHS remained committed to intensifythe campaign against communicable diseases and the treatmentof patients through the Comprehensive Plan for Care, Managementand Treatment of HIV/AIDS in the DOD and MilitaryVeterans that includes prevention of HIV and health promotionprogrammes. The plan is currently under revision to acceleratethe accessibility for treatment and prevention programmes suchas workplace programmes.The key elements of the HIV Prevention Programme are:HIV/AIDS workplace programmes.Mass awareness campaigns.Management of occupational transmission.Prevention of vertical transmission, previously known asmother to child transmission.Prevention of opportunistic infections.Utilisation of all awareness opportunities (eg National HealthDays, Health Month, World AIDS Day, CommemorationDays, etc).Programmes/projects that focus on abstinence and faithfulness.Key elements of the Health Promotion Programmes are:Counselling.Health education training and development by means of e.g.lectures.Management of sexually transmitted infections.Health promotion through physical training, sport andrecreation.118ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EQuestionHas the department established (a)committee(s) as contemplated inPart VI E.5 (e) of Chapter 1 of thePublic Service Regulations 2001?If so please provide the names ofthe members of the committee andthe stakeholders that they represent.Has the department reviewed itsemployment policies and practicesto ensure that these do not unfairlydiscriminate against employees onthe basis of their HIV status? If solist the employment policies/practices so reviewed.Has the department introducedmeasures to protect HIV-positiveemployees or those perceived tobe HIV positive from discrimination?If so list the key elements ofthese measures.Does the department encourage itsemployees to undergo voluntarycounselling and testing? If so listthe results that you have achieved.YesXXXNoXDetails, if YesPoster presentationsHealth programmes targeting women of childbearing ageAwareness programmes.Involvement of non-governmental organisations and communities.Community development programmes, e.g. Thaba TshwaneProjectHealth Fairs and Health Walks.The facilitation of the Combating HIV/AIDS ThroughSpiritual and Ethical Conduct (CHATSEC) programme to 982members of the SAMHS MSDS formed part of prevention andpromotion interventions.Six mobile clinics were procured with donor funds for the provisionof health care services to eligible patients in remote ruralareas. An agreement has been reached with the United States ofAmerica President's Emergency Funds For AIDS Relief donorsto take over the training of health care practitioners in anti-retroviraltreatment from September 2009 in collaboration with theUniversity of Pretoria.The "Comprehensive Plan for Care, Management and Treatmentof HIV/AIDS in the DOD: 2011-2016" is coordinated through theDirectorate HIV/AIDS Programmes.Coordination within the SANDF through bilateral meetingsbetween the SAMHS and the SA Army, the SA Navy and theSA Air Force.The Director HIV/AIDS coordinate matters through theSAMHS HIV/AIDS Coordinating Committee. The committeeconsists of members representing formations and units that providehealth care services.All HIV infected uniformed members of the DODare managed according to "The DOD Directive on the HealthClassification and Deployability of SANDF Members withHIV/AIDS". The document is currently under review.The department adheres to the principle of equity and equally ofopportunities in all practices. It values and manages diversityand in doing so recognises that talent, ability and potential areinherently distributed across the population. It strives to eradicateall forms of unfair discrimination within the department.Policy documents:DOD Directive: Transformation Management in the DODDOD Instruction: Policy on Transformation Management in theDODJoint Defence Publication: Process and Procedures forTransformation Management in the DOD.All uniformed members of the DOD are required toundergo regular HIV testing as part of Comprehensive HealthAssessments.In addition, the SAMHS is a Key Stakeholder in the NationalDepartment of Health HIV Counselling and Testing Campaignwith 49% of all SANDF members and dependants to be testedby 31 May 2011.ANNUAL REPORT FY 2010/2011 119

D E P A R T M E N T O F D E F E N C EQuestionHas the Department developedmeasures/indicators to monitor &evaluate the impact of its healthpromotion programme? If so listthese measures/indicatorsYesXNoDetails, if YesThe monitoring and evaluation of the Department of Defenceand Military Veterans HIV and AIDS Programme is managed byInstruction.Sources of data are:Knowledge Attitude and Practice Survey (Last survey performed2007, next survey planned for September 2011).Health Informatics Clinical Data Management SystemProject Feedback Forms submitted following interventions (allplanned HIV prevention interventions are monitored).L A B O U R R E L A T I O N STable 12.42: Collective Agreements for the Period 01 April 2010 to 31 March 2011Total Collective Agreements 0Table 12.43: Misconduct and Disciplinary Hearings finalised for the Period 01 April 2010 to 31 March2011Outcomes of disciplinary hearingsFinal written warningSuspended without payDismissalNot guiltyCase withdrawnTOTALNumber92131126% of Total0.00%34.62%7.69%3.85%11.54%100%Note: Fines do not form sanctions as contained in PSCBC Resolution 2/99 as amended by PSCBC Resolution 01/03.Table 12.44: Types of Misconduct addressed at Disciplinary Hearings for the Period 01 April 2010 to31 March 2011Type of misconductAbsence without permissionTheftFraudPunctualityUnder the InfluenceDisobedienceUnauthorised removal of InformationSecurity RiskUnprofessional ConductSexual HarassmentTOTALNumber645214111126% of Total23.08%15.38%19.23%7.69%3.85%15.38%3.85%3.85%3.85%3.85%100%Note:The figures indicated in tables 12.43 and 12.44 differ due to the reason that an employee may be charged for more than one offenceat a single disciplinary hearing.120ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable 12.45: Grievances Lodged for the Period 01 April 2010 to 31 March 2011GrievancesNumber of Grievances ResolvedNumber of Grievances not ResolvedTotal Number of Grievances LodgedNumber61622Note: Not all grievances are resolved within the financial year in which they were lodged.Table 10.46: Disputes Lodged with Councils for the Period 01 April 2010 to 31 March 2011Number of Disputes UpheldNumber of Disputes DismissedTotal Number of Disputes LodgedDisputesNumber05858Note: Councils do not schedule all disputes referred in a financial year for resolution in the same financial year.Table 12.47: Strike Actions for the Period 01 April 2010 to 31 March 2011Total number of person working days lostTotal cost of working days lostAmount recovered as a result of no work no pay369 DaysR93 883,45R93 883,45Table 12.48a: Precautionary Suspensions (of Uniformed Personnel) for the Period 01 April 2010 to 31March 2011Number of people suspendedNumber of people whose suspensions exceeded 30 daysAverage number of days suspendedCost of suspensions3838365R 511 481Table 12.48b: Precautionary Suspensions (of Public Service Act Personnel) for the Period 01 April2010 to 31 March 2011Number of people suspendedNumber of people whose suspensions exceeded 30 daysAverage number of days suspendedCost of suspensions76237R 651 070ANNUAL REPORT FY 2010/2011 121

D E P A R T M E N T O F D E F E N C ES K I L L S D E V E L O P M E N TTable 12.49: Training Needs Identified for the Period 01 April 2010 to 31 March 2011Occupational CategoriesLegislators, senior officials andmanagersProfessionalsTechnicians and associateprofessionalsClerksService and sales workersCraft and related trades workersPlant and machine operators andassemblersElementary occupationsSubtotalTOTALGenderFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleNumber ofEmployeesas at 1April 2010272361 5631 5711 9314 6125 8978 8204 47028 6601 1008 668105083 1737 79918 17160 87479 045Training Needs Identified at Start of Reporting PeriodLearnerships0000132972686320214300001 0232 0123 9641 0475 011Skills Programmesand otherShort Courses22362774736391 5031 4281 7501 6356 69258289913198524785 43612 15017 586OtherForms ofTraining133448564482 9611 0181 2291 37812 1754791 51451321 2154 5325 88822 40228 290Total23396211 3291 1004 4933 1723 8423 21519 0101 0612 41364513 0907 02215 28835 59950 887Table 12.50: Training Provided for the Period 01 April 2010 to 31 March 2011Occupational CategoriesGenderNumber ofEmployeesas at 1April 2010Training Provided within Start of Reporting PeriodLearnershipsSkills Programmesand otherShort CoursesOtherForms ofTrainingTotalLegislators, senior officials andmanagersProfessionalsTechnicians and associateprofessionalsClerksService and sales workersCraft and related trades workersPlant and machine operators andassemblersElementary occupationsSubtotalTOTALFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMaleFemaleMale272361 5631 5711 9314 6125 8978 8204 47028 6601 1008 668105083 1737 79918 17160 87479 0450000203073086521015000001 0252 0201 9853 0655 05022433074847701 5002 2532 6501 6406 7005801 10053258604806 43713 28219 719133618515242 7608551 3001 38412 2005101 52031301 2204 5304 85823 29428 15223466681 3351 3144 2903 8384 8153 23419 0501 0902 62084553 1057 03013 28039 64152 921122ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EI N J U R Y O N D U T YTable 12.51a: Injury on Duty (by Uniformed Personnel) for the Period 01 April 2010 to 31 March 2011Nature of Injury on DutyRequired basic medical attention only 5Temporary total Disablement 6Permanent Disablement 7Fatal 8TOTALNumber1,1447052171,283% of Total89.17%5.46%4.05%1.33%100.00%Table 12.51b. Injury on Duty (by Public Service Act Personnel) for the Period 01 April 2010 to 31March 2011Nature of Injury on DutyNumber% of TotalRequired basic medical attention only 5Temporary total Disablement 6Permanent Disablement 7Fatal 8TOTAL236327127685.51%11.59%2.54%0.36%100.00%U T I L I S A T I O N O F C O N S U L T A N T STable 12.52:Report on Consultant Appointments using Appropriate funds FY2010/11Project TitleSA NavyViability of Construction of New Naval Headquartersand Naval Mess BuildingSA NavyRendering of Transaction Advisor Service to the DODfor Establishment of Sea Safety Training Centre for theSA NavySA Air ForceTraining of Air Force crews in the use and applicationof the Lynx helicopter systems in the maritime environment.SA Air ForceSupply of specialised imaging interpretation training(analytical/metrics aspects)Total Number ofConsultants thatWorked on the Project1*1*One Royal NavyObserver1Duration:Worked DaysProject workedaccording to milestonesand not toworkdaysProject workedaccording to milestonesand not toworkdays183 Days10 DaysContract Valuein Rand for theFY 2010/11505 558,08471 293,101 519 443,0055 000,005Required Basic Medical Attention Only. This is the action or manner of treating an individual medically or surgically tostabilise and promote healing.6Temporary Total Disablement. This is the temporary alteration of an individual's physical or mental status that limits activity.Medical or surgical treatment may stabilize the condition and restore the health of an individual to normal within a definedperiod.7Permanent Disablement. This is the permanent alteration of an individual's capacity to meet personal social or occupationaldemands or statutory or regulatory requirements.8Fatal. An injury, disease or condition causing or ending in organ or multi-organ failure and death.ANNUAL REPORT FY 2010/2011 123

D E P A R T M E N T O F D E F E N C ETable 12.52: Report on Consultant Appointments using Appropriate funds FY2010/11 (continued)Project TitleSA Air ForceSupply of specialised Security Risk managementtrainingSA Air ForceSurvival ElectronicsSA Air ForceEW Training of SAAF membersC LogisticsSupply Chain Strategic Plan of Action and TechnicalSupport towards the Creation of an enabling environmentfor DOD Facilities to undertake their mandatefunctions.CSIR: CPSC/G/230/08C LogisticsAsset Management Stock Verification programmeClassic One Consortium: B/G/839/08C LogisticsOrigin ExchangeSA ArmyBusiness Architecture for CD Army Force StructureSA ArmyPersonnel related activities for SA Army SignalFormationChief Financial OfficerKPMG - Operation Clean AuditMinistry of DefenceMinisterial Task Team Academics on National YouthService -5 x ProfessorsDefence IntelligenceAppointment of a Transaction Advisor to conduct afeasibility study for a possible PPP for a head quartersfor Defence Intelligence - Kagiso Financial ServicesTotal Number ofConsultants thatWorked on the Project1111*1*1*1*11*51*Duration:Worked Days10 Days100 Days119 Days235 Days254 Days117 Days260 Days2 Days151 Days127 DaysPer MilestoneContract Valuein Rand for theFY 2010/1178 000,00500 000,00435 703,0089 080 500,0045 841 901,0059 161 374,002 284 849,91900.0040 955 643,331 035 294,002 615 352,15Total number of ProjectsTotal individualconsultantsTotal duration:Work daysTotal contractvalue in Rand15111 568244 540 811,57* Denotes that one firm was appointed as a consultant and provided the DOD with personnel at different remuneration rates aswell as their administration fees and overheads. As a result it would be inappropriate to mathematically distribute the figuresbased on mainly man-hours or man-days. The DOD Policy on the management and utilisation of Consultants is currentlyunder review.124ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EP E R F O R M A N C E A G R E E M E N T STable 12.53a: Performance Agreements Signed (by Uniformed Personnel) by Salary Band for SeniorManagement Service for the Period 01 April 2010 to 31 March 2011Salary BandBand A - Level 13Band B - Level 14Band C - Level 15Band D - Level 16TOTALNumber ofemployees as at1 April 20101513471193Number of SignedPerformanceAgreements1181800136Number of UnsignedPerformanceAgreements33167157Table 12.53b: Performance Agreements Signed (by Public Service Act Personnel) by Salary Band forSenior Management Service for the Period 01 April 2010 to 31 March 2011Salary BandBand A - Level 13Band B - Level 14Band C - Level 15Band D - Level 16TOTALNumber ofemployees as at1 April 201026138249Number of SignedPerformanceAgreements1860125Number of UnsignedPerformanceAgreements878124ANNUAL REPORT FY 2010/2011 125

D E P A R T M E N T O F D E F E N C EChapter 12Appendix AD e f e n c e D i p l o m a c y R e p o r tf o r F Y 2 0 1 0 / 1 1The defence diplomacy actions by the DOD continued tovary from focussed efforts such as defence representationabroad, bilateral and multilateral meetings to indirect actionswhich had a defence diplomacy impact. The latter includeparticipation in combined exercises, participation in functionaland developmental training with foreign defence forcesand attendance of conferences and seminars. The benefits tobilateral cooperation are greatly valued and give impetus tothe defence diplomacy drive of the DOD.S A N D F D e f e n c e A t t a c h éR e p r e s e n t a t i o nFigure A.1 below indicates SANDF Defence Attaché representationinternationally for the FY2010/11.Figure A.1: Map indicating Representation by SANDF Attachés.SANDF DEFENCE ATTACHÉS126Resident representation in countriesand at organisations (38)Algeria; Angola; Argentina; AU; Belgium; Botswana;Brazil; Côte d'Ivoire; Cuba; Democratic Republic of theCongo; Ethiopia; Egypt; France; Germany; India;Italy; Kenya; Malaysia; Mozambique; Namibia;Nigeria; Pakistan; PRC; Russia; Saudi Arabia; Spain;Sudan; Sweden; Tanzania; Tunisia; UAE; Uganda;UK; UN; USA; Vietnam; Zambia; ZimbabweNon-residential representation(22)Bahrain, Brunei; Burundi; Canada; Chile; Ghana;Indonesia; Jordan; Kuwait; Lesotho; Malawi;Mauritius; Morocco; Netherlands; Oman,Philippines; Qatar; Rep of Congo; Romania;Rwanda; Swaziland; UruguayANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EM i l i t a r y A t t a c h é a n d A d v i s o r C o r p s ( M A A C ) R e p r e s e n t a t i o nFigure A.2 below indicates MAAC representation in South Africa for the FY2010/11.Figure A.2:Map indicating MAAC Representation in South Africa.MILITARY ATTACHÉ AND ADVISORCORPS IN SOUTH AFRICAResident (48)Algeria; Angola; Argentina; Belgium; Botswana; Brazil; Burundi; Cameroon; Canada; Chile; Côte d'Ivoire;Egypt; France; Gabon; Germany; Greece; India; Indonesia; Italy; Kenya; Korea (ROK); Malawi; Malaysia;Mozambique; Namibia; Netherlands; Nigeria; Pakistan; PRC; Republic of Congo; Romania; Russia; Rwanda;Saudi Arabia; Senegal; Spain; Sweden; Tanzania; Thailand; Turkey; Uganda; Ukraine; United Kingdom;United States of America; Uruguay; Vietnam; Zambia; ZimbabweNon-resident (3)Australia; Israel, KuwaitB i l a t e r a l a n d M u l t i l a t e r a lI n t e r a c t i o nThe South African Development Community (SADC) as aregion, as well as the African continent remains the mainfocus of the DOD for bilateral and multilateral interaction.Table A.1 indicates the meetings held within the frameworkof the SADC Interstate Defence and Security Committeestructures (ISDSC).ANNUAL REPORT FY 2010/2011 127

D E P A R T M E N T O F D E F E N C ETable A.1: Map indicating Representation by SANDF Attachés.CommitteeDateVenuePersonnel Work GroupOps Sub sub-committee and Chiefs of DefenceEvaluation workshop of the Strategic Indicative Plan of the OrganLogistical Technical CommitteeTelecommunication Workgroup31 st Interstate Defence and Security Committee meetingMeeting of the Ministerial Committee of the OrganSADC Military HIV/AIDS 1 st Technical Committee meetingSADC Military Malaria managers meeting1 st SADC Non-communicable Diseases Technical Committee meeting4 th annual SADC Standing Maritime Committee Work SessionSADC Standing Maritime CommitteeLogistics Workgroup13-15 April11-15 May22-26 May21-23 June27 Apr - 1 May22-23 July02-07 August01-07 August26-30 September21-24 September7-11 September20-26 February16-20 MarchCape TownMaputoBotswanaBotswanaTanzaniaMozambiqueMozambiqueZimbabweMadagascarNamibiaTanzaniaNamibiaTanzaniaAfrican Union. During December 2010, the Minister ofDefence and a representative of C SANDF attended the6 th Meeting of the African Chiefs of Defence Staff andHeads of Security in Addis Ababa. Concurrently the 4 thOrdinary Meeting of the Specialised TechnicalCommittee on Defence, Safety and Security met andwas attended by the SANDF representative.Intergovernmental Meetings. Defence representativesattended intergovernmental bilateral meetings, namely;the Mozambique/RSA Joint Bilateral Commission forCooperation. The bilateral Joint Permanent Commissionson Defence and Security with respectivelyNamibia, Zimbabwe and Botswana met during the year.Participation in these meetings enables Defence supportto South African foreign policy.Bilateral Defence Committee Meetings. During thereporting year the Germany/RSA Defence Committee,the PRC/RSA Defence Committee, the RSA/USADefence Committee and the RSA/UK DefenceCommittee met to discuss co-operation between theSANDF and respective countries.Service Level Bilateral Meetings. On Service andDivisional level, Naval Staff talks were held betweenthe SA Navy and their counterparts from the USA, Indiaand Malawi. The latter was in support of Government'sAfrican Agenda and the ICTS cluster objectives. TheSAAF held staff talks with the Air Forces of Germanyand the USA respectively.F o r e i g n V i s i t sForeign visits to African Countries. About 54 visitswere undertaken by members from the SANDF toAfrican countries for reasons varying from high-levelgoodwill visits, planning, debriefing conferences andmeetings on combined exercises, quarterly non-residentialaccreditation to Lesotho, and visits to SA troopsdeployed in Africa and intelligence exchanges. The SAArmy is involved in training in the 'Train the Trainer'concept in Namibia as part of bilateral co-operationbetween the two countries. The presentation by theSAAF of the Senior Air Power Programme in Rwandademonstrates the SANDF commitment to co-operationin Africa. Fifty members from five African countriesattended the 4 th SA Army Rifle Shooting Evaluation.Visits to the DOD by African Countries. The SANDFhosted six delegations from Africa. The reasons forthese visits varied from benchmarking and comparativestudies on training, human resource management tomedical matters, intelligence exchanges, sport andgoodwill visits.Foreign Visits to Countries from the Rest of theWorld. About 98 visits took place during theFY2010/11. The purpose of these visits included;observers to military exercises, benchmarking of training,attendance of conferences as members of professionalbodies, programmes on strategic issues or workgroups and defence exhibitions.128ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EVisits to the DOD by Countries from the Rest of theWorld. The 25 visits to the SANDF ranged from reciprocalgoodwill visits, discussions on specific functionaltopics, study visits by military training institutions andthe hosting of workgroups.Foreign Military Training. About 18 foreign officersattended the flagship development courses of theSANDF, namely the Executive National SecurityProgramme and the Joint Senior Command and StaffProgramme. The SANDF hosted foreign members on55 functional courses. SANDF officers attended developmentcourses in 11 foreign countries. A further 111members of the SANDF attended functional courses inforeign countries. Seven foreign delegations comprisingofficers on Senior Command and Staff courseschose South Africa as destination for their foreign studyvisits.Ship Visits. During the reporting year, various shipsfrom the Navies of France, the UK, Korea and Pakistancame alongside at South African ports. During EXINTEROP EAST, the Navy sailed to Maputo with theSAS DRAKENSBERG, SPIOENKOP andGALESHEWE and during Operation COPPER; theSAS MENDI sailed to Mozambican ports of Maputoand Pemba.The African Standby Force and the SouthernAfrican Standby Force. The Roadmap II for the operationalisationof the African Standby Force (2006-2010)envisaged a validation exercise that will test early warningand crises management, as well as the structures thatunderpin the African Standby Force concept. Againstthis background, the AU Peace Support OperationsDepartment hosted EX AMANI, a command post exercise,during October 2010 in Addis Ababa. As part ofRoadmap III (2011-2015), the operationalisation of theAfrican Standby Force will continue with a continentalexercise during the FY2011/12, which is currently beingplanned. Also during the FY2011/12, the SADC willhost EX BLUE CRANE, which is an exercise undertakenin support of humanitarian assistance.S p e c i f i c D e f e n c e D i p l o m a c yA c t i o n sThe biennual African Aerospace and DefenceExhibition (AAD) was co-hosted with the SA DefenceIndustry took place from 21 to 25 September 2010. TheSANDF was responsible for co-ordinating the ForeignVisitors Programme. About 17 Ministers of Defence orrepresentatives attended the Expo including; six Chiefsof Defence Force; seven Chiefs of Army; 21 Chiefs ofAir Force, seven Chiefs of Navy and two SurgeonsGeneral and / or their representatives were hosted duringAAD.Military Operations. Operational co-operation formsa mainstay of military bilateral and multilateral cooperationbetween countries, in general and enhances operationalinter-operability, whilst knowledge transfer takesplace. Although military operations do not always commenceas a defence diplomacy action, the advantages ofparticipation in multinational peace support operationslie in the enhancement of the RSA's commitment to providingcapacity to these operations and the image of theSouth African soldier abroad. Multinational peace supportoperations in which the SANDF participatedinclude Operations MISTRAL in the DRC, CORDITEin Sudan and VIMBEZELA in the Central AfricanRepublic. Through participation in these operations, theSANDF supported the work of the African Union andthe United Nations in striving for peace and security inthe African continent.Specialist Advisory Team to Kinshasa, DRC. TeamBULISA is currently developing plans for the implementationof the now completed Military Strategy forthe FARDC. A number of workshops and benchmarkingvisits were conducted, during the period under review,in the fields of financial management and humanresources management in the SANDF.Mission THEBE. The SA Army provided 120 instructorsto train three Battalions in the DRC. This was completedsuccessfully and the handing and taking overparade was held on 25 February 2011. This was attendedby the South African Ambassador to the DRC, whopresided as the chief dignitary at the parade. A small HQelement remains in the DRC to look after the RSAequipment that is still there.Joint, Interdepartmental and Multinational (JIM)Military Exercises. JIM military exercises reported indetail under the Force Employment Programme havemajor impact on defence diplomacy. The decisionstaken on multinational force preparation cooperationand interaction during bilateral and multilateral forumswere aligned with the requirements of the SANDF interms of the approved Joint Force Employment (JFE)objectives and missions. In May 2010, two members ofthe SANDF were in Australia to participate in ExerciseBELL BUOY, an exercise on naval co-ordination andguidance of shipping in the Pacific and Indian Oceansinvolving a number of Navies. Exercise IBSAMARtook place during September 2010, which was a maritimeinteraction and co-operation exercise with theNavies of India and Brazil. Exercise FAIRWAY BUOY,a naval co-operation and guidance of shipping exercisewith SADC counties also took place in Namibia from 2to 18 August 2010. EX ATLASUR, another annual maritimeexercise between the Navies of Argentina, Braziland Uruguay took place during October/November2010. The SANDF representatives also participated inANNUAL REPORT FY 2010/2011 129

D E P A R T M E N T O F D E F E N C EEx COBRA GOLD (Thailand) and FLINT LOCK(Senegal) respectively.Secondments to Multinational Organisations. Fourmembers of the DOD are currently seconded to the AUPeace and Support Operations Divisions, of which onemember heads this Division. At the UN, the SANDFmember was seconded to UNAMID in Sudan and histerm of duty was completed during November 2010.130ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EChapter 12Appendix BF o r e i g n A i d A s s i s t a n c e t o t h eD O D f o r F Y 2 0 1 0 / 1 1The table below indicates the foreign aid assistance to theDOD for FY2010/11. Funding was mostly in kind and tookthe form of the provisioning of air tickets and/or messingaccommodation and/or a daily stipend. Tuition fees for atten-dance of military courses are normally free. The actual cost tothe donor is therefore not visible and the rand value is merelyan estimate.Table B.1: Foreign Aid Assistance to and from the DOD for the FY2010/11Donorcountry(Source)Type of Aid(Funds orIn-kind)RandValue(R’000)Intended Useof theAssistanceActual Performanceon the Use ofAssistanceReason forDeviationPendingApplicationfor AssistanceForce EmploymentUSAUSAUSAUSAGermanyIn-kindIn-kindIn-kindIn-kindIn-kind1001201704029Joint Forces StaffcourseUS Army RangerTrainingHealth CareSpecialist courseProgramme on terrorismand SecurityStudiesLegal aspects ofCombating TerrorismAttended by onememberAttended by onememberAttended by onememberAttended by onememberAttended by onememberNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableLandward DefenceUSAUSAUSAUSAUSAUSAIn-kindIn-kindIn-kindIn-kindIn-kindIn-kind122223605994540US Basic Leaderurban courseInternational MilitarySTO Manoeuvre(Armour)Senior LeadershipSeminar in PortugalArmy Command andGeneral Staff CollegeVisit of US MilitaryService Commandsfor the SANDFVision 2030 for trainingand career pathsfor other ranksUS Environment,Energy, Security andSustainabilitySymposiumAttended by onememberAttended by onememberAttended by onememberAttended by onememberAttended by onememberEach attended byone member (threeSANDF members intotal)Not applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableANNUAL REPORT FY 2010/2011 131

D E P A R T M E N T O F D E F E N C ETable B.1: Foreign Aid Assistance to and from the DOD for the FY 2010/11 (continued)Donorcountry(Source)Type of Aid(Funds orIn-kind)RandValue(R’000)Intended Useof theAssistanceActual Performanceon the Use ofAssistanceReason forDeviationPendingApplicationfor AssistanceUSAUSAUKGermanyPRCPRCZimbabweMalaysiaNetherlandsUKSwitzerlandIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kind287367006037144339625608080New York NationalGuard State PartnershipProgramme planningconferenceUS Army War CollegeRoyal College ofDefence StudiesUN Military ObserverscourseDefence and StrategicStudies courseArmy Command andStaff courseJoint Senior Commandand Staff courseDSA ExpoParticipation in the18th NetherlandsShooting CompetitionParticipation inEdinburgh MilitaryTattooParticipation in BaselTattooAttended by fourreserves and threeregular membersAttended by onememberAttended by onememberAttended by onememberAttended by onememberAttended by onememberAttended by onememberAttended by onememberAttended by ninemembersAttended by SAIrish Pipes andDrumsAttended by theCape Town HighlandersPipes andDrumsNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableAir DefenceZambiaGermanyKenyaUSAUSAUSAUSAUSAUSAIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kind99866811360130110120140280Joint Senior Commandand Staff courseProgramme inAdvanced SecuritystudiesNational War CollegeAir War CollegeComprehensive Securityresponse toTerrorismAviation Safety CourseDefence Acquisitionmanagement courseSenior NCO OfficersAcademyJoint Forces StaffCollegeAttended by onememberAttended by twomembersAttended by onememberCourse attended bytwo membersAttended by onememberAttended by a twomembersAttended by onememberAttended by onememberAttended by twomembersNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicable132ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable B.1: Foreign Aid Assistance to and from the DOD for the FY2010/11 (continued)Donorcountry(Source)Type of Aid(Funds orIn-kind)RandValue(R’000)Intended Useof theAssistanceActual Performanceon the Use ofAssistanceReason forDeviationPendingApplicationfor AssistanceUSAUSAUSAIn-kindIn-kindIn-kind5013080Purchase AdvancedtrainingComprehensivecrises managementNext Generation ofAfrican militaryAttended by onememberAttended by onememberAttended by twomembersNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableMaritime DefenceIndiaPRCUSAUSAUSAUSAUSAUSAUSAUSAIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kindIn-kind5096504998105675258849Senior DefenceCollege courseSenior Staff courseMaritime SecurityconferenceInspector GeneralcourseCourse on LegalAspectsSecurity ResponseseminarProgramme onTerrorismNaval AcademySenior EnlistedcourseWarrant OfficerssymposiumAttended by onememberAttended by onememberAttended by twomembersAttended by threemembersAttended by onememberAttended by onememberAttended by onememberAttended by onememberAttended by twomembersAttended by onememberNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableMilitary Health SupportWilton Park(Organisers),UK Foreignand CommonwealthOffice,Ministry ofDefence, Ministryof ForeignAffairs of Netherlands,USGovernmentIn-kind50Wilton Park ConferenceonProspects for the2011 Biological &Toxic WeaponsConvention ReviewConferenceAttended by onememberNot applicableNot applicableSponsored byAstra Zenecaand the LungFunction TrustFundIn-kind77EuropeanRespiratory SocietyAnnual CongressAttended by twomembersNot applicableNot applicableSponsored bythe InternationalMilitaryForum onEmergingInfectiousDiseasesIn-kind45InternationalMilitary Forum onEmerging InfectiousDiseasesAttended by onememberNot applicableNot applicableANNUAL REPORT FY 2010/2011 133

D E P A R T M E N T O F D E F E N C ETable B.1: Foreign Aid Assistance to and from the DOD for the FY2010/11 (continued)Donorcountry(Source)Type of Aid(Funds orIn-kind)RandValue(R’000)Intended Useof theAssistanceActual Performanceon the Useof AssistanceReason forDeviationPendingApplicationfor AssistanceSponsored bythe DepartmentofTrade andIndustry onbehalf of theNon-ProliferationCouncil.USA(PEPFAR)USA(PEPFAR)USA(PEPFAR)USANationalInstitute ofAllergy andInfectiousDisease(NIAID)In-kindIn-kindIn-kindIn-kindIn-kindSee noteSee noteSee note5490Workshop on thestrengthening ofInternational effortsto prevent the proliferationof BiologicalWeapons, therole of the Biologicaland ToxinWeapons Conventionin Beijing,China from 2-8 Nov2010.HIV/AIDS Strategicplanning and policydevelopment conferenceSponsorship ofdrugs for anti-retroviraltreatmentProject MASIBAM-BISANE: HIV andAIDS preventionprogram forSANDF membersProject PHIDISA:Sponsorship ofdrugs for anti-retroviraltreatment andthe establishment ofa Clinical ResearchCapability.Attended by onememberAttended by twomembersThe donation is not apredeterminedamount. The valueof the donation isdetermined by thenumber of patientsreceiving treatment.A complete databaseof implementedprograms isavailable at MilitaryPsychologicalInstituteThe donation is not apredeterminedamount. The valueof the donation isdetermined by thenumber of patientsreceiving treatment.P1A - ±1 771patients. (to be confirmed)Not applicableNot applicableNot applicableThere hasbeen a deviationfromplanned programactivitiesdue to adelay in submissionofprojects andhumanresourcesshortagesProtocols I &II ended inDecember2007 as thescientificintegrity ofdata collectedwas sufficientto continuewith actualresearch untilthe studycompletes in2010.Not applicableNot applicableOngoing projectuntil donorindicates otherwise.Ongoing projectuntil donorindicates otherwiseA 5-year projectthat ismeant to beended in 2010Note: Information on the value of the donation in kind was requested from the US DOD, however, was not available at the time of publication.134ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable B.1: Foreign Aid Assistance to and from the DOD for the FY2010/11 (continued)Donorcountry(Source)Type of Aid(Funds orIn-kind)RandValue(R’000)Intended Useof theAssistanceActual Performanceon the Use ofAssistanceReason forDeviationPendingApplicationfor AssistanceGeneral Support (Logisitics)USAUSAUSACanadaIn-kindIn-kindIn-kindIn-kind40589545US Environment,Energy, Securityand SustainabilitySymposiumGuidebook on environmentalauditingin the MilitaryLogistics InformationManagementcourseMilitary Trainingand Co-operationprogramme - UNIntegrated MissionStaff Officers courseGeneral Support (Command And Management Information Systems)Attended by twomembersTwo members participatedin the compilationof theguidebookAttended by twomembersAttended by onememberNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableNot applicableUKIn-kind84Global MilitarySatelliteCommunicationconferenceAttended by fourmembers.Not applicableNot applicableDefence Reserve DirectionUSAIn-kind167New York NationalGuard StatePartnershipProgramme planningconferenceAttended by sevenofficersNot applicableNot applicableANNUAL REPORT FY 2010/2011 135

Chapter 12D E P A R T M E N T O F D E F E N C EAppendix CC r i m i n a l i t y i n t h e D O D f o r t h ey e a r e n d i n g 3 1 M a r c h 2 0 1 1The DOD made significant progress during the year underreview on the management of Anti-Criminality. The AnnualDOD Anti-Criminality Conference held on 8 October 2010was aimed at providing orientation-training to representativesof Services and Divisions in support of the Nodal Point onAnti-Criminality. Members were trained to conduct crimerisk surveys in order to determine the extent to which physicalsecurity measures were lacking and/or adequate at units inthe DOD.In order to strengthen the management of Anti-Criminality,policies will have to be aligned with the Strategy on Anti-Criminality and DOD members will have to undergo formaltraining on managing crime. To this end, the ProvostMarshall General has been tasked to formalize the DODAnti-Criminality Policy by no later than the end of June2012. The DOD Nodal Point on Anti-Criminality hasengaged Defence Intelligence on the design of a training programwhich will be specifically aimed at managing crime inthe DOD.The DOD Nodal Point on Anti-Criminality also activelyinteracted with SITA for the design of an overarching CrimeInformation System that integrates all the existing fragmentedinformation data already available in other DOD systems.The aim of this system is to verify the integrity of informationfrom the existing systems and to make business intelligenceavailable to commanders and managers at all levels.This overarching integrated data system is in an advancedstage of development.The management of crime requirement has been included inthe performance agreements and management directives ofall commanders and managers. In addition, Anti-Criminalityhas been incorporated as a standing agenda point in the commandand management forums of the DOD. This serves as aconstant reminder and raises awareness of crime in the driveto implement the Anti-Criminality Strategy. The DODSafeguarding Board meets monthly and is attended by theServices and Divisions. The commitment of commandersand managers to the management of crime was demonstratedby their personal signature on all safeguarding or anti-criminalityreports and compliance plans.The DOD vehicle fleet is safeguarded through the use of nonremovablestickers on D-vehicles in order to make them easilyidentifiable. Some vehicles have also been fitted withsatellite tracking systems, which are monitored by DefenceIntelligence or the respective Service/Division.Anti-Criminality in the DOD is well on its way to achievingthe goals of the Strategy on Anti-Criminality. All membersof the DOD will be part of the fight against crime.136ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EChapter 12Appendix DD O D E n t e r p r i s e R i s k a n dM i t i g a t i o n S t r a t e g i e s f o rF Y 2 0 1 0 / 1 1Table D.1. provides the actual achievement of the Enterprise Risk and Mitigation Strategy for the FY2010/11, in accordance withthe DOD Strategic Plan FY2010/11.Table D.1: DOD Risks and Mitigation Factors for the FY2010/11RiskMitigation ActionResponsibleService/DivisionActual AchievementThe continued lossof scarce skills dueto the exit of largenumbers of highlyskilled personnelInterim ServiceCommission has beenestablished to considerremuneration and theconditions of service ofmembers of the SouthAfrican National DefenceForce (SANDF). Aunique service dispensationfor the SANDF outsidethe ambit of thePublic ServiceImplementation of theDOD retention strategyAir Force partneringwith local aviation industryCHRCHRCHR/CAFThe DOD has developed a remuneration dispensationthat recognises military uniqueness for theSANDF, salary levels 1 to 12 and will be implementedin phases starting 1 July 2011The Occupation Specific Dispensations (OSD)has been implemented for nurses, social workers,medical practitioners and legal practitioners.On 15 March 2011 the DOD implemented a specialallowance for technicians in all applicableenvironmentsThe 22% increase in the payment scales ofReserve Force personnel has resulted in anincreasingly positive response from call-upsThe vigorous implementation of the retentionstrategy by Services and Divisions has led to18% decline in scarce skills exit compared to theprevious financial yearThe Services and Divisions are complying withDOD Planning Instruction 13/09 and this is furtherdemonstrated by the above-mentioneddecline in the scarce skills exitThe SAAF together with DENEL Aviation havepartnered in a SAAF/DENEL Co-Operationagreement. This agreement is known as theMaintenance, Repair Organisation (MRO). Sincethe signing of this agreement the SAAF hasexperienced a huge improvement in the availabilityof aircraft especially the C130. TheSAAF/DENEL MRO has contributed to a 50%increase in the C130 availability. An amount ofRm460 465 51 was used in the FY2010/11 and afurther Rm344 050 2 has been allocated for theFY 2011/12ANNUAL REPORT FY 2010/2011 137

D E P A R T M E N T O F D E F E N C ETable D.1: DOD Risks and Mitigation Factors for the FY2010/11 (continued)RiskMitigation ActionResponsibleService/DivisionActual AchievementInadequate fundingfor human resourceexpenditure couldresult in a furtherburden on DOD'sbudget vote/allocationThe declining Randvalue of the DODbudget could negativelyimpact on theDepartment's operatingbudget andcapital acquisitionsbudgetInadequate facilityinfrastructure maintenanceand renovationcapacity resultingin unacceptablefacility repair andrenovation backlogthat detrimentallyimpacts on forcepreparation andemploymentDOD will engageNational Treasury foradditional fundingDOD will engageNational Treasury foradditional funding toaddress deficiencies inthe capital acquisitionbudgetImmediately establishbilateral forum betweenDPW and DOD leadingtowards migrating somecustodian functions tothe DOD, and developmentof an effectivememorandum of understanding.Finalize the developmentof the Works Capabilityto assume some of themigrated functions fromDPW to address capacityinadequaciesCFOCFOC LogNational Treasury was engaged during theAdjustment Budget process for additional funding.Rm352,4 was allocated to DOD's Budget forincrease in the cost of living and housingallowance and the deficit in terms of the newsalary dispensation for military personnel, wasmade available by means of internal savingsThe DOD presented policy proposals foradditional funding that amounted to R2, 600 billionfor FY2010/11 to the National Treasury.Due to economic circumstances and other, morepressing, priorities of government the NationalTreasury only provided an additional amount ofR650 million to the DOD for the FY2010/11. TheDepartment continues to engage with NationalTreasury on the policy proposals for the additionalfundingThe Council for Scientific Industrial Research(CSIR) is developing a DOD User AssetsManagement Plan (UAMP) that will address therapid and escalating deterioration of the Defenceimmovable assets. The condition assessment willenable the DOD to bridge a maintenance gapand determine the immovable assets book value.However, the limited capability to manage facilitymaintenance funds via NDPW continues tocontribute further to the collapse and deteriorationof facilities. The DOD Works Capabilitystructures and migration were approved. TheMaintenance Programme has progressed wellwith the completion of 10 projects with a further13 projects in progress. Simultaneously, a SkillsDevelopment Programme is underway with 674students undergoing specialised facility relatedtraining and 40 students have qualifiedIncompatible systemscould result inineffective and inefficientperformanceLack of single logisticsmanagementinformation systemdue to historic fragmentationsystemenhancements. Thishas led to inabilityto comply withNational Treasuryasset managementrequirementsincluding financialreporting leading toaudit qualificationAnalysis of all the systemsin the Departmentwith the intention of integrationApproaching NationalTreasury for permissionto procure DOD integratedsystemEmployment of outsourced capabilities toassist in addressing auditqualification and assetverification challenges.Establishment of IntegratedProject Team toinvestigate all availableoptions to develop a singlelogistics informationsystemGITOC LogA task team has been appointed by the A/GITOand the CMIS to draft the DOD ICT Strategythat will enable the effective and efficient alignmentof all legacy and new ICT requirements insupport of the DOD's business requirement. TheICT Strategy is to be completed by end of July2011An Integrated Financial Management System forsupply chain management and procurementimplementation charter between NationalTreasury and the DOD was formulated. ElevenDOD units have been identified as lead sites andthe implementation of the asset register and procurementwill commence from 1 April 2011138ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable D.1: DOD Risks and Mitigation Factors for the FY2010/11 (continued)RiskMitigation ActionResponsibleService/DivisionActual AchievementNon-compliancewith legislation, e.g.certain aspects of thePFMAPoor communicationon Defencecould lead to poorreputation in thepublic domainEnhance good corporategovernance throughoutthe DODEnhance the DOD'scommunication strategyCFOHOCThe DOD is in the process of establishing aCompliance Chief Directorate. The process ofdrafting a Compliance framework, policy andstandard operating procedures commenced inthe period under reviewThe DOD (Corporate Communication DivisionRestructuring Task Team) has completed thefirst draft of the DOD CorporateCommunication Doctrine and DOD CorporateCommunication Policy and Strategy. ThePersonnel Management Code for the CorporateCommunication Division was approved by theMinister of Defence. This approval professionalizesCorporate Communication as a musteringand career dispensation for the CorporateCommunication function in the DODANNUAL REPORT FY 2010/2011 139

D E P A R T M E N T O F D E F E N C EChapter 12Appendix EN e w S e r v i c e s / O u t p u t s S c a l e dU p a n d S e r v i c e s / O u t p u t sS c a l e d D o w n o r S u s p e n d e df o r t h e F Y 2 0 1 0 / 1 1N e w S e r v i c e s / O u t p u t s S c a l e d U pH u m a n R e s o u r c e s S u p p o r t S e r v i c e sThe migration of the corporate Occupational Health andSafety functions from the SA Military Health Services to theHR Division has been finalised. However, the migration ofthe corporate Physical Training, Sports and Recreation functionsis still not finalised. The required staff liaison and staffwork in this regard is continuing.S A A r m yDetails of New Services/Outputs and/or Services/OutputsScaled Up is reflected in Table E.1 below.Table E.1: Landward Defence (SA Army) New Services/Outputs and/or Services/Outputs Scaled UpSub-Sub ProgrammeOutput(Quantity, Quality)Reason forNew Output / Up-Scaling of ServiceStatusCommand andControl CapabilityTraining Capability,Mot Inf Capability,Mech Inf Capability,Para Inf CapabilityTraining Capability,Mot Inf Capability,Mech Inf Capability,Para Inf CapabilitySupport Capability2 x HQ units(Fort Ikapa andKensingtonGarrison)Crowd ControlBorder Safeguarding5 x unitsMigration of the SA Army Reservesfacility footprint from the status quoto agreed footprint (SA ArmyImplementation Instruction044/2009)SAAO/C Dir Army FPrep/002/01/09 dd 20 Jul 09 task toGOC SA Army Inf Fmn - "GOC SAArmy Inf Fmn is to establish before 1Apr 2010 and thereafter manage theSA Army's crowd con cap until furtherorders."Cabinet decision to employ theSANDF on the RSA borders withphased approach, deploying in threephases starting in the short termMigration to the SA Army SupportFormation from the DOD LogSupport FormationIn process1 Apr 2010 target attained. Rest inprocess, ie waiting delivery ofvideo cameras, shotgun bandoliersand crowbars; and procurementof crowd controlequipment for one sub-unit at allthe remaining Regular andReserve nodal training points isin processIn process. One bn (-) deployedon the RSA Zimbabwe border(Madimbo), One sub-unitdeployed on the RSA/Mozambiqueborder (Macadamia) andone sub-unit deployed on theRSA/Mozambique border(Ndumo)In process140ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ES A M i l i t a r y H e a l t h S e r v i c e sThe following services were scaled up:The planning has been completed for the establishmentof a SAMHS unique operational logistical support unitto prepare and support SAMHS members for externaland internal deployments. The initial appreciation for 9Medical Battalion Group has been completed. However,a decision was taken to defer any further planning andimplementation until such time that the SA Army structureshave been approved and funding is made availablefor new services or outputs.The SADC Military Health Secretariat was establishedduring FY2009/10; however, funding has become achallenge. The SADC Military Health Doctrine is beingdeveloped to guide the different operational activities ofthe regional Military Health Workgroups.The establishment of a SAMHS counter-intelligencestaff function is negatively affected by structural issuessuch as the availability of posts, suitable humanresources and funding.Donor funding continues to be utilised for the renovationand upgrading of military health facilities under theArea Military Health Service Sub-programme.Renovations of the pharmacies at the SickbaysLangebaanweg and the Waterkloof Military MedicalClinic have been completed for the roll-out of antiretroviraltreatment. The pharmacies at 2 Military Hospitaland the roll-out site in Potchefstroom have been completedand contributed to the provision of services andthe managing of patients accessing anti-retroviral treatment.The dental treatment facility at Overberg inBredasdorp has been scaled up for rendering a dentalservice.The establishment of a hospice/palliative care facility atLenz Military Base was completed in liaison with theSA Army, however, is not operational due to the shortageof human resources. The initial appreciation andstaff work for the establishment of emergency care facilitiesat the three military hospitals have also been completed.The Military Veterinary Institute has initiated a basicVeterinary Epidemiology section to provide the SurgeonGeneral and the DOD with early warning pertaining tozoonotic diseases. Funding and structural changes arerequired to establish a full capability.The establishment of unique cleaning services for thethree military hospitals has proved to be challenging interms of funding, structural changes and trained humanresources. The management interventions to implementthis initiative are continuing.The internal restructuring of the Military HealthProcurement unit and the establishment of a codificationsection has assisted the SAMHS to address challengeswith regard to the codification of suppliers. The structureof Military Health Procurement Unit must bereviewed in accordance with legislative prescripts interms of the separation of functions. Restructuring ofthe unit is also required to execute the codification function.The establishment of additional accommodation andmessing facilities have been appreciated and possibleoptions for consideration have been investigated.SAMHS has performed initial planning for border safeguardingin liaison with CJ Ops for the establishment ofhealth facilities in accordance with the concept of operationsfor Operation CORONA.D e f e n c e F o r e i g n R e l a t i o n s ( D F R )The Minister of Defence instructed that a Defence Attachéoffice be opened in Cuba. As this was an unfunded change toplan, it was approved that residential Defence representationin Tunisia be closed down and that representation be continuedby means of non-residential accreditation from Algiers.The Defence Office in Tunisia will be closed by the end ofMay 2011.C o m m a n d M a n a g e m e n t I n f o r m a t i o nS y s t e m ( C M I S )Concurrent with involvement in the Integrated FinancialManagement System (IFMS) initiative, the DOD is positioningitself to be able to accept IFMS modules and integratethese modules with DOD Unique information systems.S A A i r F o r c eOperational Support and Intelligence Systems (ProtectionServices)Creation of Centre of Excellence for FunctionalProtection Training. Functional training became thefull responsibility of Operational Support andIntelligence Systems following the relocation of BasicMilitary Training to Air Force Base Hoedspruit.Protection Services training is also relocating to the AirForce Gymnasium at Hoedspruit. The relocation is onschedule as instructed by Air Command Council. Theintended relocation date was 01 January 2011, however,due to the Department of Public Works preparationphase" 2" that is yet not completed, the relocation datewas moved to 01 January 2012.Protection Services are awaiting confirmation of thestart of phase "2" in the new financial year starting April2011. The phase will be monitored to ensure the commencementof training from 01 January 2012. All membershave been notified and transfer list will be finalisedat the end of September 2011.ANNUAL REPORT FY 2010/2011 141

D E P A R T M E N T O F D E F E N C EThe training to qualify protection members to CivilAviation Security Standards. The aim is to exit MSDSmembers with portable skills at the end of their serviceperiod. The SAAF must also comply with InternationalCivil Aviation Standards in adherence to Air FieldSecurity Regulations. This process has been postponeddue to the high cost and budget restrictions implementedby the SAAF. The identified qualification to replacethe Civil Aviation Security Standard is the SASSETAaccredited Aviation Ground Protection (AGP) Course.The first accredited AGP was presented in theFY2010/11.S e r v i c e s / O u t p u t s S c a l e d D o w n o rS u s p e n d e dH u m a n R e s o u r c e s S u p p o r t S e r v i c e sTable E.2.: Subprogramme Human Resources SupportServices Services/Outputs Scaled Down or Suspended duringFY2010/11Table E.2.: Subprogramme Human Resources Support Services Services/Outputs Scaled Down orSuspended during FY2010/11SubProgrammeReduction inOutputReason for ScalingDown/ Suspension/AbolishmentImplicationsActualAchievementReason forDeviationHR Div(DMVA)Quantitativereduction inthe outputThe DirectorateMilitary VeteransAffairs has been integratedwith theDepartment ofMilitary VeteransThe integrationresulted in adecrease in thestructure as wellas the allocatedbudget of HRDiv (CD HRM)With the establishmentof theDepartment ofMilitary Veterans theresponsibility for thisaspect no longerresides within theHR DivNot ApplicableUnits Closed Down during the FY2010/11. Out of the 30Force Structure Element (FSE) codes to be closed, 22 FSECodes were submitted to IG DOD for final inspection. 22FSE Codes were submitted to DIMS for re-allocation to DODHQ Unit as these codes were incorrectly allocated to the HRDivision.S A A r m yUnits Closed Down during the FY2010/11. The status ofclosing down of redundant FSEs as on 15 March 2011 isdepicted in the tables below.Table E.3.: SA Army Units Closed Down during the FY2010/11.InstitutionTotal FSE's tobe closedClosedFY 2010/11Still to beClosedAwaitingDe-activationRectificationProcessGp HQsCommandosLegaciesASBsCMITOTAL201831843726251220193170164372305100670007142ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EIn the SA Army a maximum period of three years is requiredto close a structure to its full consequence due to the numberof external role players involved.S A M H STable E.4.: Military Health Support ProgrammeServices/Outputs Scaled Down or Suspended duringFY2010/11.Table E.4.: Military Health Support Programme Services/Outputs Scaled Down or Suspended duringFY2010/11.SubProgrammeReduction inOutputReason for ScalingDown/ Suspension/AbolishmentImplicationsActualAchievementReason forDeviationProductSupportCapabilityBaseMaintenanceCapabilityArea MilitaryHealthServiceClosing downof theMedical BaseOrdinanceDepotRolling backof functionsDispensing ofmedication atapproveddecentralisedservice pointsDecision fromauthoritiesCorporate DOD decisionto close theGeneral SupportBase conceptShortage of qualifiedpharmacistsNo implicationsas the functionshave been takenoverFunctions fromthe support baseconcept to berolled back tounitsClosing of pharmacies,ie AirForce BaseBloemspruitFunctions and activitieshave been migrated tothe Military HealthMobilisation DepotUnitProcess of rollingback of the functionshad been initiated.Training of humanresources had been initiated.Self accountingstatus and structuralimplications are beingappreciated by theDirectorate MilitaryHealth Plan,Management andRenewal Services, inliaison with all SAMHSrole playersIn processAchievedStructures for theself-accounting statusof units have to beaddressedShortage of qualifiedpharmacistsNoneSAMHS Units Closed Down during the FY2010/11. TheSAMHS has 141 force structure elements and/or accountingcodes with the status "Closing". The final audit by the IGDOD on the Pomfret Military Base Hospital (Com Log) hadbeen completed. Three more force structure elements namelyNorth West Medical Command, Eastern TransvaalMedical Command and 14 MSD Unit Services are ready forthe scheduled pre-audit. A 108 accounting codes require ashortened closure process. The Chiefs of Divisions are toperform the investigation and to certify the readiness for closureto the IG DOD. Chief Human Resources has completedsome of the investigations. The normal closing down processhas to be followed with 29 force structure elements. Seven ofthese force structure elements are ready for the pre-auditsnamely Gauteng Medical Command, the Senior Medical andStaff School, the SAMHS Academy, the Military BaseOrdinance Depot, Sickbay Thaba Nchu, SickbayWallmansthal and the Prop Items Standard Stock.ANNUAL REPORT FY 2010/2011 143

D E P A R T M E N T O F D E F E N C ES A N a v ySAS CHAPMANUnits Closed Down during the FY2010/11. The outstandingadministrative actions were finalised during the financialyear to close the following units:SAS ADAM KOKSAS UNITIEJ O P STable E.5.: Force Employment Programme Services/OutputsScaled Down or Suspended during FY2010/11Table E.5.: Force Employment Programme Services/Outputs Scaled Down or Suspended duringFY2010/11.SubProgrammeReduction inOutputReason for ScalingDown/ Suspension/AbolishmentImplicationsActualAchievementReason forDeviationSupport tothe PeopleOperationKGWELE(SANDFsupport duringthe hostingof the2010 FIFAWorld Cup)Once off event.2010 FIFA WorldCup successfullyexecutedWith the successfulcompletionof thisevent SouthAfrica provedto the wholeworld thatMajor events inthe future canbe successfullyhostedThe operation was successfullyexecuted. The SANDF providedsupport in the provision of safetyand security to the SAPS, the provisionof airspace security, the provisionof Special Forces teams, theprovision of maritime resources toensure maritime safety; the provisionof Chemical, Biological andRadiological Response teams; andthe provision of medical staff insupport of the Department ofHealth. In total the SANDFresources for this operation was asfollow: On Average from 21 May2010 to 15 July 2010, 4 573 memberswhere deployed per day, (deployedmembers peaked at 6 421)supported by the SAAF withGrippens, Hawks, C130 TransportAircraft, C212 Cessna TransportAircraft, C47TP Dekota TransportAircraft, Koiler aircraft, King Air(VIP Transport) Oryx Helicopters,C208 Casa aircraft, A109 AgustaHelicopter, Lynx Helicopter,MBK7 Helicopter, PC12 Pilatus aircraftand PC7 Pilatus aircraft.Total flying hours 2 328SA Navy support:SAS AMATOLA, SAS DRAKENS-BERG, SAS PROTEA, SAS UMZ-IMKULU, SAS QUEEN MODJAD-JI, SAS CHARLOTTE MAXEKE,SAS GALESHEWE, SAS UMKO-MAAS and SAS TERN with a totalof 9 215 Sea Hours utilisedService Support was provided bythe SAMHSNo deviationUnits Closed Down during the FY2010/11. 4 Units, namely: Operations Division, Regional Joint Task Force Central, RegionalJoint Task Force South and Regional Joint Task Force North was prepared for closure. Final Inspection Report is awaited forfinal closure.144ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EL o g i s t i c sTable E.6.: Joint Logistic Services Subprogramme Service/Outputs Scaled Down or Suspended.Table E.6.: Joint Logistic Services Subprogramme Service/Outputs Scaled Down or SuspendedSubProgrammeReduction inOutputReason for ScalingDown/ Suspension/AbolishmentImplicationsActualAchievementReason forDeviationLogisticsCentralisedLogisticCapabilitiesCentralisedLogisticCapabilitiesFunction Shift - Onemain ordinancedepot and two subordinancedepotsFunction Shift - Onemobilisation centreand sub-depotSA Armyobtained theresponsibility forthe managementof the depots andits contentSA Army obtainedtheresponsibility forthe managementof mobilisationand of the subdepotand itscontentsDepots transferredMobilisation centreand sub-depottransferredMinisterial Instruction(function shift)Ministerial Instruction(function shift)I n s p e c t i o n S e r v i c e sTable E.7.: Inspection Services Subprogramme Services/Outputs Scaled Down or Suspended during FY2010/11.Table E.7.: Inspection Services Subprogramme Services/Outputs Scaled Down or Suspended duringFY2010/11.SubProgrammeReduction inOutputReason for ScalingDown/ Suspension/AbolishmentImplicationsActualAchievementReason forDeviationDirectorateRegulatoryAuditsInspectionServicescapabilityPostponed 6complianceauditsNo inspectionsconducted.The DirectorateRegulatory/Compliance Audits had toscale down on commitmentsdue totheir involvementwith the ConsortiumtrainingStructure for separationof audit/inspectionfunction notimplementedRevision of targetNo inspectionsconducted580The DirectorateRegulatory/Compliance Audits had to scaledown on commitmentsdue to theirinvolvement with theConsortium trainingNo capacity to conductinspectionsANNUAL REPORT FY 2010/2011 145

D E P A R T M E N T O F D E F E N C ES A A i r F o r c eTable E.8.: Air Defence Programme Services/Outputs Scaled Down or Suspended during FY2010/11.Table E.8.: Air Defence Programme Services/Outputs Scaled Down or Suspended during FY2010/11.SubProgrammeReduction inOutputReason for ScalingDown/ Suspension/AbolishmentImplicationsActualAchievementReason forDeviationAir Combat CapabilityFighter capability(Gripen)Fightertrainer capabilityAmmunition/ bombs/cartridges/pyrotechnicsReduction offlying hoursper current aircrewmemberto 110 hoursversus 224requiredReduction inflying hoursper current aircrewmemberto approximately120 versusrequired 175 forthe yearBelow requirementweaponacquisitionsFunding shortfallon Gripen operatingbudgetFunding shortfallon Hawk operatingbudgetFunding shortfallon munitionsbudgetOutput objectiveswill notbe achievedOutput objectiveswill notbe achievedOutput objectiveswill notbe achievedThe serviceability of theGripen fleet peaked at 9 aircraftand has stabilised to 6during the 4 th quarter andan average of 7 for the year.The Capability managed toincrease 550 allocated hoursto 850 by means of theSAAF allocating additionalfundsThe Hawk fleet serviceabilitywas 6 during the 4 thquarter; an average 9 forthe year. No additionalhours could be fundedThis expenditure plan isstill unchanged for themunitions of 120, 250 kgbombs, fireball fuses andpractice fuses. It must beindicated that this concepthas been derived to reducea once off large commitmentof funds to a limitedbudget. This enormouscommitment has thereforebeen staggered over a 4-year term contract so that itmay be aligned with theAir Force budgetary constraints.The limited stockof countermeasure flareoperational stock requiresurgent attention. No fundingis available for Gripen27 mm ammunition. Hawk30 mm ammunition hasvery limited stock.Operational countermeasureflare stock for Gripen(Flare Countermeasure 218Mk3) limited stock. Theseflares are utilised by Gripenand C130 aircraft and only1300 flares are leftUnderfundingUnderfundingUnderfunding146ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ETable E.8.: Air Defence Programme Services/Outputs Scaled Down or Suspended during FY2010/11.SubProgrammeReduction inOutputReason for ScalingDown/ Suspension/AbolishmentImplicationsActualAchievementReason forDeviationAir Transport and Maritime CapabilityVIP transportcapabilityMediumtransportcapability(C130)LightTransportCapability(CASA)LiaisonCapability(King Air,PC12 andCitation)MaritimePatrol /MediumLightTransport(C47TP)LightTransport(C208)250 Hours404 Hours672 Hours389 Hours606 Hours474 hoursLimited fundingallocationFunding shortfalon C130 operatingbudgetLimited fundingallocationLimited fundingallocation.Limited fundingallocationLimited fundingallocationOutput objectiveswill notbe achievedOutput objectiveswill notbe achievedOutput objectiveswill notbe achievedOutput objectiveswill notbe achievedOutput objectiveswill notbe achievedOutput objectiveswill notbe achievedBBJ received additional 160Hours and a 100 Hours fromthe Falcon 900 was reallocatedto assist other A/C systemsBBJ received additionalfunding to reduce the reductionin outputDue to lack of spares andalso the low serviceability ofaircraft, the Squadron flew496.7 hours that was allocatedfor FY2010/11Due to lack of spares andhigh unserviceability of theCASA fleet, the Squadronflew 490 hours less than thatwas allocated (1560 Hours) tothemHours utilised to assistother A/C SystemsDue to poor serviceability ofthe Citation fleet, reductionin 85 hours to assist otherA/C SystemsIncrease in allocated hoursfor the King Air fleet by 170hours for the FY2010/11Increase in allocated hoursfor the PC12 by 68 hours forthe FY2010/11The C47-TP fleet was wellmaintained throughout theFY2010/11 with the shortageof spares and limitations ofthe aircraftDue to increased tasking,this system received an additional200 hours from theoriginal 1,400 hours that wasallocated for FY2010/11This A/C system was allocated 2 270 hours forFY2010/11, an additional1 290 was allocated due toincreased taskingUnderfundingUnderfundingUnderfundingUnderfundingUnderfundingUnderfundingUnits Closed Down during the FY2010/11. During thecourse of the financial year, the SAAF has finalised and preauditedthe accounting documentation of eight units and 45accounting codes. About six units and 41 accounting codeshave been forwarded to the IG DOD to conduct their finalclosing down audits. The remaining two units and fouraccounting codes are still in the logistical finalisationprocess.ANNUAL REPORT FY 2010/2011 147

D E P A R T M E N T O F D E F E N C E148ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 212DEPARTMENT OF DEFENCEAND MILITARY VETERANSFINANCIAL PERFORMANCE1 April 2010 to 31 March 2011Safeguarding South Africa for a Better Life for allANNUAL REPORT FY 2010/2011 149

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21150ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21PART 4: FINANCIAL PERFORMANCEREPORT OF THE AUDITCOMMITTEE - DEPARTMENTOF DEFENCE AND MILITARYVETERANSfor the year ended 31 March 2011We are pleased to present our report for the financial year ended 31 March 2011.A u d i t C o m m i t t e e M e m b e r s a n d A t t e n d a n c e :The Audit Committee consists of the external members listed hereunder and should meet 4 times per annum as per its approvedterms of reference. During the current year, 5 meetings were held.Name of MemberDr D. Konar (Chairperson)Mr K.A. RossMs J. Kumbirai (contract expired 6 December 2010)Number of Meetings Attended553Mr V. Nondabula (Chairperson from 26 May 2011)Mr S. RadebeMr Z. NgcakaniDr Konar’s contract expired in May 2011. Mr Ross passed on in January 2011. Mr Nondabula, Mr Radebe and Mr Ngcakaniwere appointed as members of the Audit Committee on 26 May 2011. The Audit Committee, under the chairmanship of Mr V.Nondabula, reviewed the Audit Report, Management Letter and Financial Statements for the year ending 31 March 2011.A u d i t C o m m i t t e e R e s p o n s i b i l i t yThe Audit Committee reports that it has complied with its responsibilities arising from section 77 of the PFMA and TreasuryRegulation 3.1.The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, hasregulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.T h e e f f e c t i v e n e s s o f i n t e r n a l c o n t r o lThe system of internal control applied by the Department over financial risk and risk management is partially effective, efficientand transparent.The system of internal control was not entirely effective for the year under review. During the year under review, several deficienciesin the system of internal control and/or deviations were reported by the internal auditors and the Auditor-General SouthAfrica. In certain instances, the matters reported previously have not been fully and satisfactorily addressed.ANNUAL REPORT FY 2010/2011 151

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE AUDIT COMMITTEE -DEPARTMENT OF DEFENCE AND MILITARY VETERANSfor the year ended 31 March 2011T h e q u a l i t y o f i n y e a r m a n a g e m e n t a n d q u a r t e r l y r e p o r t s s u b m i t t e d i nt e r m s o f t h e P F M AThe Audit Committee is satisfied with the content and quality of monthly and quarterly reports prepared and issued by theAccounting Officer of the Department during the year under review.E v a l u a t i o n o f F i n a n c i a l S t a t e m e n t sThe Audit Committee has:reviewed and discussed the audited annual financial statements to be included in the annual report, with the Auditor-Generaland the Accounting Officer;reviewed the Auditor-General's management report and management's response thereto;reviewed changes in accounting policies and practices;reviewed the departments compliance with legal and regulatory provisions, andreviewed significant adjustments resulting from the audit.The Audit Committee concurs and accepts the Auditor-General's conclusions on the annual financial statements, and is of theopinion that the audited annual financial statements be accepted and read together with the report of the Auditor-General.I n t e r n a l a u d i tThe Audit Committee is not satisfied that the internal audit function is operating effectively and that it has addressed the riskspertinent to the Department in its audit. The internal audit function needs to be further capacitated to execute its professionalresponsibilities.A u d i t o r -G e n e r a l S o u t h A f r i c aThe Audit Committee has met with the Auditor-General South Africa to ensure that there are no unresolved issues.Chairperson of the Audit CommitteePretoria29 July 2011152ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 212REPORT OF THEACCOUNTING OFFICERfor the year ended 31 March 2011Report by the Accounting Officer to the Executive Authority and Parliament of the Republic of South Africa.The Annual Financial Statements attached to this report include the expenditure of the Department of Military Veterans and theperformance information of the Department of Military Veterans is covered in the Annual Report of the Department of Defence.1. General Review of the State of Financial Affairs1.1 Strategic issues and decisionsThis section provides an overview of the strategic positioning that the Department of Defence (DOD) has taken asdirected by the Executive Authority and the Accounting Officer to improve its resource base as well as to maximisethe efficient, economic and equitable accountability thereof. During the period under review the following progresswas made on previously identified strategic issues and policy decisions.1.1.1 Strategic issues1.1.1.1 White Paper on Defence and Defence Review. During September 2010, a work team finalised the development ofthe Defence Strategy Conceptual Framework as a prelude to the development and drafting of the Defence Strategy.The Defence Strategy Conceptual Framework was presented to the Minister of Defence and Military Veterans duringMarch 2011 for her consideration and approval. As a further input to the development of the Defence Strategy, twodetailed staff papers pertaining to Geostrategic Environment and Defence scenarios and key elements of the DefenceStrategy are in the process of development. It is envisaged that the Defence Strategy will be considered for approvalby the Minister of Defence and Military Veterans during the course of the financial year 2011/12 after a public/stakeholderconsultation process has been finalised as a final input to the Defence Strategy. In addition to the above, a staffpaper on the National Security Strategy is in the process of development wherein the National Security Strategy PolicyAnchors impacting on Defence are being identified.1.1.1.2 The Department of Military Veterans. The Military Veterans' Bill was approved during December 2010, which wasconsequently followed with an analysis and determination of the strategic resourcing to enable the Department ofMilitary Veterans to achieve its constitutional mandate of ensuring justifiable socio-economic rights to military veterans.This was presented to the Minister of Defence and Military Veterans during a Ministerial work session in March2011. The developed Medium Term Expenditure Framework budget costing and Medium Term ExpenditureCommittee funding requirements as approved by the Minister of Defence and Military Veterans were articulated in aCabinet Memorandum and presented to Cabinet on 16 March 2011. The DOD is in the process of formulating subsequentDepartmental regulations and policies in support of the approved Bill. During the year under review the activitiesof the Department of Military Veterans continued to be funded under this Vote with progress being made to operationalisethese for future implementation under a separated Vote.1.1.1.3 Improvements of the SANDF members service conditions. The promulgation of the Defence Amendment Act 22of 2010 provided for the establishment of the permanent Defence Force Service Commission (DFSC). The mandateof the DFSC will be, amongst others, to focus on the conditions of service of SANDF members. Support structuresto facilitate the mandate of the DFSC are to be completed during the financial year 2011/12.1.1.1.4 Establishment of the National Youth Service (NYS). The concept paper on the NYS has been completed. A pilotprogramme has been completed in Bloemfontein with a group of 500 recruits undergoing training. 1 500 recruits areplanned for the financial year 2011/12, 2 500 recruits planned for the financial year 2012/13 and 6 000 recruits plannedfor the financial year 2013/14.ANNUAL REPORT FY 2010/2011 153

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20111.1.1.5 Provision of skills1.1.1.5.1 The Military Skills Development System (MSDS) was implemented in January 2003 with the aim of providing theSANDF with military human resources as required for force preparation and force employment specifications. Itforms the DOD's primary contribution to youth development. The MSDS also alleviates unemployment and povertyby preparing young people between the age of 18 and 26 years for rewarding careers either in the SANDF or for decentemployment in the broader public and private sectors. The MSDS is a two-year contract based service system and isthe main feeder system for the Regular Force and Reserves. The MSDS has the following goals:The system inducts new members into the SANDF.It equips members with basic military skills and functional training for service in the military.It evaluates member's development potential and suitability for continued services in the Regular Force andReserves.It tests members so that the organisation can choose individuals for a possible continued career in the military.It ensures a sufficiently trained pool of young and fit members to fulfil the SANDF's deployment needs.It feeds the Reserves with trained troops and junior leaders.Is the primary vehicle to rejuvenate the SANDF's Human Resource composition (Regular Force and Reserves)to improve mission readiness and to grant development opportunities to the youth.1.1.1.5.2 Since the inception of the MSDS, 33 536 youths joined the employment system of the SANDF. Of the total intake,8 542 are currently serving in the MSDS, 6 770 have separated from the SANDF (of whom 4 821 are serving in theReserves) and 18 224 translated to the Regular Forces where they are undergoing advanced training in various disciplinesand are being utilised accordingly.1.1.1.5.3 The results of implementing the MSDS are best viewed from the vantage point of rank-age compliance: only 10.8%of Privates were in the age group 18 to 24 years old in the year 2000 compared to 55% currently.1.1.1.5.4 The MSDS also is a feeder system, at entry levels, of scarce skills and critical musterings. Since its inception, 6 172youths have been employed in critical musterings i.e. air space control, aircrew, combat navy, engineer, medical professional,nursing, technical and technical air. Therefore, the MSDS significantly contributes, at entry level, to the sustainmentof scarce skills and critical musterings.1.1.1.5.5 The young men and women who emerge after MSDS service are on the whole much more mature, disciplined, servicedelivery orientated, career orientated and patriotic than one would normally expect from young people who havejust completed high-school. Through the MSDS, the SANDF continues to invest directly in South Africa's mostimportant asset, our youth. In support of the government initiative on job creation, the DOD plans to create job opportunitiesfor 5 700 young South Africans per year through the MSDS.1.1.1.6 Border Safeguarding. As per the 2009 Cabinet decision, the SANDF has assumed the borderline control function.In execution of this task under Operation CORONA, the SANDF has adopted a phased-in strategy. The first phase(Zimbabwe/South Africa border) and the second phase (Mozambique/South Africa border) has been rolled out. Thelast phase of the strategy with regards to the Lesotho/South Africa border will be completed by the financial year2012/13.1.1.1.7 Defence Industry.1.1.1.7.1 ARMSCOR and DENEL are central in this regard. Armscor is established in terms of applicable legislation to serveas the acquisition agency of the DOD. Because of this role, ARMSCOR is a critical stakeholder in so far as theSANDF's operational effectiveness is concerned. As the agency serving the DOD, ARMSCOR falls under the juris-154ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011dictional authority of the Minister of Defence and Military Veterans. Experience over the years has continuouslypointed towards the need for the review of the relationship between the DOD and ARMSCOR for the purposes ofachieving efficiency and economy. A conceptual framework for the repositioning of ARMSCOR has been developed.This framework addresses matters of relationships between ARMSCOR and the DOD in terms of business process,governance, risk, compliance and accounting.1.1.1.7.2 DENEL is a public enterprise falling under the jurisdiction of the Minister of Public Enterprises. DENEL is veryimportant to the DOD as it serves as the repository of some of the SANDF's strategic capabilities. For DENEL toremain such an important supplier of defence capabilities and given the current challenges faced by DENEL, the relationshipbetween the DOD and DENEL has to be clearly defined. Noting the importance of DENEL to the SANDF'scontinued operational efficiency and effectiveness, the DOD has adopted a framework which forms the basis of itsdiscussions with the Department of Public Enterprises on DENEL. Central to the discussions is the realisation of anend state where DENEL shall remain the reliable supplier of strategic capital equipment to the SANDF, yet remainsa going concern that claims a share in the international defence market. A presentation outlining several options interms of the public entities will be made to the Minister of Defence and Military Veterans for consideration andapproval by the Council on Defence (COD) during the financial year 2011/12.1.1.1.8 Revitalisation of the Reserves. The current Reserves strength has increased to 26 147 of which approximately 84%are from the previously disadvantaged groups. About 12 500 of the 26 147 are being called-up per year. This hasenabled the DOD not only to utilise the Reserves in external deployment but also to deploy them on the borders wherethey are achieving success. During the reporting period, the Defence Act was amended to make it compulsory for theReserves to respond to call-ups not only in times of war but also in times of national need. This has provided the abilityto invest in the development of the Reserves.1.1.1.9 Defence Infrastructure. The reversal of the DOD deteriorating infrastructure requires both additional financial allocationand increased technical capacity. In order to address the declining state of defence infrastructure, the DOD willbe finalising discussions with the Department of Public Works on the establishment of the Defence EstateManagement mechanism which will result in the DOD progressively exiting from the current arrangement on Propertyand Facilities Management by the Department of Public Works. In pursuance of this objective, the rolling-out of theDefence Works Capacity, which is an in-house capacity to maintain and repair defence facilities, will be implementedin the financial year 2011/12. On 01 April 2011 Project LEBAKA officially merged to form the Defence WorksCapability. The new formation is aimed at providing efficient, effective and economical operational level FacilityManagement in support of the strategy and objectives of the DOD. The macro-structure of the Defence WorksFormation was approved by the Minister of Defence and Military Veterans on 23 March 2011. Subsequently, theActing CSANDF issued an implementation instruction for the establishment of the Defence Works Formation witheffect from 01 April 2011.1.1.1.10 Balanced Scoreboard (BSC) Project. The ongoing development of the BSC within the DOD has been enhancedthrough the development of the DOD Strategic Planning Framework (SPF) during the financial year 2010/11. TheBSC has aligned itself with the corporate Level 0 and 1 performance information as contained within the SPF andapproved by the Minister of Defence and Military Veterans. The translation of the noted SPF performance informationinto the electronic COGNOS system, in conjunction with SITA, will see the incremental roll-out of electronicallymanaged performance information during the financial year 2011/12.1.1.2 Strategic decisions. During the year under review the following strategic decisions were confirmed:On 3 March 2011, the Minister of Defence and Military Veterans made a determination on matters considered importantfor the DOD to pursue as strategic priorities during the financial year 2011/12 and beyond. These defence prioritiesseek, on the one hand, to implement the State of the Nation Address pronouncements applicable to the DODwhilst on the other hand, they place at focus other defence important sustained agenda matters. The strategic prioritiesidentified are as follows:ANNUAL REPORT FY 2010/2011 155

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011Execution of the border safeguarding function.Establishment of the new Service Dispensation.Enhancement of the SANDF's Landward Defence capabilities.Maritime security.Job creation.Enhancement of the SANDF's peacekeeping capability.National Youth Service.Revitalisation of the Reserves.Restructuring and support of the Defence Industry.Department of Defence Works Capability.1.2 Defence Vote: Rm 30 715,333 (Appropriation Act, Act No 3 of 2010)1.2.1 The DOD approved budget published in the Estimate of National Expenditure: 2010 report for the period 1 April 2010to 31 March 2011 was compiled on a cash basis per programme and amounted to Rm30 715,333. It included all entitiesunder control of the Minister of Defence and Military Veterans. The original budget was approved through legislativeaction and specifically the Appropriation Act, Act 3 of 2010. The original budget objectives and policies permain division of the Vote were also published in the 2010/11 Strategic Business Plan and will be reported on in detailin the relevant parts of this Annual Report. This was adjusted by a net reduction of Rm272,742 after virements, fundsshifts and additional allocations through the Adjustment Appropriation Act of 2010. Full details of the adjustmentsare provided in par 1.3 below.1.2.2 The 2010/11 Defence Vote decreased by Rm1 673,971 (5,17%) from the 2008 Medium Term Expenditure Frameworkallocation for the same year and decreased by Rm1 309,051 from the previous financial year's annual audited expenditureoutcomes. The Defence Vote amounted to 1,14% of South Africa's gross domestic product (GDP) or 3,75% oftotal government expenditure (GE). The overall decrease in the allocation is due to the termination of the A400M aircraftprocurement contract, exchange rate savings on the strategic defence procurement programme and the institutionof some efficiency savings.1.2.3 Additional and reduced allocations that influenced the 2010/11 Defence Vote are: Inflation related adjustment for salaries Rm 423 New SANDF remuneration system Rm 600 Upgrade of Air Force Base Waterkloof runway Rm 250 Military Skills Development System Rm 50 Military Veterans' affairs Rm 20 Foreign exchange rate adjustments Rm (503) Termination of the A400M contract Rm (2 067) Efficiency savings Rm (447)1.2.4 Landward Defence (32,5%) and Air Defence (9,73%) are the two largest programmes within the Defence Vote. Theyear-on-year increase in the Landward Defence programme was mainly due to the Military Skills DevelopmentSystem, procurement of critical ammunition and the establishment of a works capability. The large decrease in theAir Defence programme was due to the termination of the A400M aircraft procurement contract. The higher than156ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011average, year-on-year increases in the Administration and General Support programmes were mainly due to the establishmentof the Department of Military Veterans, the activities of the Interim Defence Force Service Commission,upgrade of the Air Force Base Waterkloof runway and the maintenance and repair of Defence infrastructure and facilities.1.2.5 From an economic classification perspective compensation of employees (43,79%) and transfers and subsidies(22,24%) amounted to 66,03% of the Vote, leaving available 33,97% for operating the department and renewing capitalassets. Significant operating costs provided for are contractors (Rm3 844), inventory, food and food supplies(Rm560), computer services (Rm971) and property payments (Rm506).1.3 Defence Adjustment Vote: Minus Rm272,742 (Adjustment Appropriation Act, 2010)1.3.1 The Defence Vote in total has decreased by Rm272,742 through the Adjustment Vote due to the following:1.3.1.1 Increases1.3.1.2 DecreasesUnforeseen and unavoidable expenditure to the amount of Rm225,000 for the support provided to the SouthAfrican Police Service during the hosting of the 2010 FIFA World Cup and for support provided during the2010 public service strike.Salary increase, including housing allowance, not included in the Vote to the amount of Rm352,400 whichwere allocated to the following programmes: Administration Rm 28,172 Force Employment Rm 20,032 Landward Defence Rm 149,412 Air Defence Rm 49,199 Maritime Defence Rm 29,789 Military Health Support Rm 43,754 Defence Intelligence Rm 4,340 General Support Rm 27,702Self financing expenditure to the amount of Rm149,858 resulting from the sale of equipment and spares duringthe previous financial year, originally procured through the Special Defence Account. This amount wasreallocated to the following programmes: Landward Defence Rm 13,396 Air Defence Rm 135,197 Maritime Defence Rm 1,265A declared saving on the Air Defence programme to the amount of Rm 1 000,000 due to the cancellation ofthe procurement of the A400M airlift capability.1.4 Adjusted Defence Vote: Rm 30 442,5911.5 Expenditure1.5.1 The total expenditure against the Adjusted Defence Vote amounted to Rm 30 313,985 resulting in a relative smallunder expenditure of Rm128,606 including an amount of Rm0,220 earmarked for the Regular Force MedicalANNUAL REPORT FY 2010/2011 157

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011Continuation Fund which was not transferred. The under expenditure to the amount of Rm128,386 was utilised topartially write off the unauthorised expenditure incurred on the personnel budget during the 1997/98 financial year.1.5.2 Spending TrendThe DOD has again managed to achieve a relatively small under expenditure of its allocated appropriation. Theexpenditure for the period under review, in comparison with the previous two years, is indicated in the table below:Financial yearAdjustment Estimate of National Expenditure (Rm)Expenditure (Rm)Amount surrendered (Rm)Amount surrendered as a percentage of the Vote2008/0927 899,02727 801,28697,7410,35%2009/1031 325,25631 324,2471,0090,01%2010/1130 442,59130 442,3710,,2200,00%1.6 VirementsThe following virements were approved during the period under review:1.6.1 Approved by the National Treasury1.6.1.1 The reallocation of Rm6,000 within Programme Maritime Defence from Goods and Services to Transfers andSubsidies to Departmental Agencies and Accounts for an additional transfer to the Armscor Dockyard.1.6.1.2 The reallocation of Rm50,000 from the Special Defence Account to Programme Military Health Support for the procurementof medical equipment.1.6.1.3 The reallocation of Rm180,244 to increase Compensation of Employees from various Programmes within theDefence operating allocation in order to partially fund the implementation of the Occupational Specific Dispensationfor engineers and the new Defence Reserves Salary Dispensation.1.6.1.4 The reallocation of Rm210,000 to increase Compensation of Employees from Programme General Support(Rm111,800 Capital Assets), from Programme Maritime Defence (Rm9,500 Transfers and Subsidies - Households)and from various Programmes' budget (Rm88,700 Goods and Services). The reason for the virement was to fund theexpenditure of the new Military Dispensation, Technical Allowances and Defence Reserves' salary dispensation andthe military aviator's career incentive remuneration.1.6.1.5 The reallocation of Rm41,000 from Programme General Support (Capital Assets) to Programme Air Defence (Goodsand Services) to fund the shortfall as a result of the increased number of VVIP flights.1.6.2 Approved by the Accounting Officer1.6.2.1 The reallocation of Rm4,000 from Programme Force Employment to Programme Administration (Chief HumanResources) for services rendered by the Centre for Conflict Simulation to Joint Operations Divisions.1.6.2.2 The reallocation of Rm2,697 from Programme General Support (Departmental Support) to Programme MilitaryHealth Support for the establishment of a Private Public Partnership (PPP).1.6.2.3 The reallocation of Rm11,790 from Programme General Support (Command and Management Information Services)to Programme Force Employment for the procurement of UHF digital tactical radio equipment for utilisation by theSANDF during border control.158ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20111.6.2.4 The reallocation of Rm5,378 from Programme Air Defence to Programme Administration (Acquisition Services) forthe payment of Armscor to set up a system of Intellectual Property (IP) Management.1.6.2.5 The reallocation of Rm117,000 from Programme General Support (Joint Logistic Services) to ProgrammeAdministration (Ministerial Direction and Property Management) for the Multi Media Campaign (Rm8,000) andMunicipality Services (Rm109,000)1.6.2.6 The reallocation of funds between Programmes within the Defence Budget to defray expenditure in respect of authorisedlosses, compensation of employees and to balance the expenditure for the 2010/11 financial year.2. Services rendered2.1 The services rendered by the DOD are detailed in Part 1 Chapter 2 of the Annual Report.2.2 Tariff policyThe DOD tariff policy consists of the following elements:2.3 Free servicestariffs instituted by law,tariffs prescribed by a department that are applicable to all spheres of government; andtariffs unique to the DOD determined by the tariff owner and where the tariff structure is approved by theNational Treasury.Free services to the amount of Rm0,291 were provided by Naval Base Simon's Town to visiting foreign ships.3. Capacity Constraints and the impact thereofCapacity constraints impacted again on the DOD across most functional areas.3.1 The downward trend in skills losses continued throughout the period under review resulting in some critical skills tobe acquired from industry at exorbitant cost due to the expertise not being available in the department anymore.Although new personnel, as an initiative to address a joint human resource strategy for training and the utilisation ofscarce human resources were recruited and trained, it will take time for these members to gain the necessary experience.The improved remuneration dispensation implemented during the year under review, is expected to decreasethe rate of loss of personnel at specifically the lower levels.3.2 The impact of non-repair and maintenance of Defence facilities has resulted in further dilapidation of DOD facilities.This continued to negatively affect service delivery. A forum has been established at a strategic level between theDepartments of Defence and Public Works to ensure better service delivery and liaison between the two departments.This has already led to a slight improvement in services provided by the National Department of Public Works(NDPW). The phased approach to create own maintenance of facilities capability and migration away from relianceon the NDPW which was accepted by the DOD in the previous financial year has been pursued. In this regard, aDefence Works Capability has been established and has already undertaken some maintenance and repair tasks.3.3 The state of prime mission equipment, particularly in the Landward Defence programme, continued to decline to unacceptablelevels. Additional funding provided for maintenance and repair of the operational vehicle fleet has had someeffect, but is not sufficient to address this concern adequately. The rejuvenation of these capabilities therefore remainsone of the DOD's top priorities. It is expected that in the ensuing financial year, this capacity will be upscaled.3.4 The shortage of specialists (technical staff) and support personnel continued to have a negative effect on the staffingof personnel to all the peace support missions, resulting in contingents not being fully staffed. This again has resultedin the non-compliance of minimum standards of serviceability of major equipment and as a result thereof the DODANNUAL REPORT FY 2010/2011 159

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011is not fully reimbursed by the United Nations if serviceability levels of major equipment are not maintained at the prescribedlevel in peacekeeping deployment areas.3.5 Also in the environments of financial and logistic management, critical personnel shortages are experienced which hasbeen increased by developing regulatory requirements of accounting and financial reporting. To mitigate this, theFinancial Management Division is in the process of realigning its structures with the intention of creating capacity interms of skills and qualifications as well as the number of incumbents. Within the Logistic Division the macro structurehas already been adjusted making provision for the appointment of senior managers in the specialist areas of assetmanagement, accruals and leases. Micro structures will be developed in the 2011/12 financial year and will be staffedwith skilled and qualified incumbents.4. Utilisation of donor funding4.1 The DOD did not receive any donations that were directly administered by the department.4.2 The DOD received reimbursements from the United Nations for the participation in peace support operations amountingto Rm250, 767. This was deposited into the National Revenue Fund and recognised in note 2 of the financial statementsto this report.5. Public EntitiesThe Castle Control Board and the Armaments Corporation of South Africa (ARMSCOR) are reported as listed publicentities under the ownership control of the Minister of Defence and Military Veterans. Each of these public entitiesis controlled by a Board of Directors reporting to the Minister of Defence and Military Veterans. The transfer paymentmade to Armscor is included in the table of transfer payments below and no transfer payment was made to theCastle Control Board.6. Organisations to whom transfer payments have been madeTransfer payments were made to the following organisations:TransfereeArmamentsCorporationof SouthAfrica Ltd(ARMSCOR)Reason forPaymentTo subsidiseARMSCOR in theirmission to meet theacquisition, maintenanceand disposalneeds of theDepartment ofDefence and otherclients in terms ofdefence matériel,related products andservicesAccountabilityArrangementsArmscor is a Schedule 2 PublicEntity managed by a Board ofDirectors appointed by theMinister of Defence and MilitaryVeterans. ARMSCOR annuallysubmits a business plan and anestimate of expenditure, which ismotivated by the GeneralManager Finance andAdministration of ARMSCOR, tothe Department's Programmeand Budget EvaluationCommittee before such funds areincluded in the DepartmentalVote. Audited financial statementsfor the financial year2009/10 were submitted accordingto payment conditionsAdjustedAppropriation2010/11RmFinalAppropriation2010/11RmAnnualExpenditure2010/11Rm731,510 737,510 737,510160ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011TransfereeReason forPaymentAccountabilityArrangementsAdjustedAppropriation2010/11RmFinalAppropriation2010/11RmAnnualExpenditure2010/11RmSt John'sAmbulanceBrigadeTo provide accreditationfor training of Defencemembers and make theirmembers and equipmentavailable to be called-upby the SA MilitaryHealth Service (SAMHS)during times of nationaldisaster and emergencyAudited financial statementsfor the financial year2009/10 were submittedaccording to payment conditions0,3600,3600,360RegularForceMedicalContinuationFund(MedicalFund B)To reimburse the RegularForce MedicalContinuation B-Fund formembers who retiredbefore 19640,2200,2200SpecialDefenceAccountTo acquire, procure anddevelop armament andtechnologyUnder control of theAccounting Officer of theDepartment of Defence3 060,3203 010,3203 010,320ReserveForceCouncilTo subsidise the ReserveForce Council in theiraim to secure communityand private sector supportfor the ReserveForces and to maintain asound relationship andcommunication betweenthe Reserve Forces, theMinister of Defence andMilitary Veterans the SANational Defence ForceThe Accounting Officer ofthe Department is representedin the National Council.The Council annually submitsa business plan and anestimate of expenditurebefore such funds areincluded in theDepartmental Vote.Audited financial statementsfor the financial year2009/10 were submittedaccording to payment conditions4,8274,8274,827HouseholdsTo cover the cost ofemployment benefits dueto Defence membersbeing separated from thedepartment through theMobility Exit MechanismAs approved by the Ministerof Defence and MilitaryVeterans135,638120,593120,593TOTAL3 946,0823 888,2383 888,018ANNUAL REPORT FY 2010/2011 161

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20117. Public private partnershipsNo formal Public Private Partnership (PPP) has been concluded in the DOD. The following progress is reportedregarding identified PPP projects registered with the National Treasury:7.1 SA Navy. The SA Navy is currently involved in two possible PPPs. This is only in the feasibility study phase. Thefirst project is the establishment of a Sea Safety Training Centre in Simon's Town and the second the establishment ofa new Navy Headquarters and Mess in Pretoria. The feasibility studies for both projects are completed. The DOD isin the process of obtaining approval.7.2 SA Military Health Service. The SA Military Health Service (SAMHS) is currently involved in three possible PPPs:The establishment of Medical Referral Services in eight regional centres. The Request for Proposal is in theprocess of being advertised to appoint a possible Private Party for the actual PPP.The establishment of a new headquarters. The feasibility study was completed by the Transaction Advisor. TheDOD is in the process of obtaining approval.The establishment of new facilities for a Military Health Training Formation. A Transaction Advisor must stillbe appointed to conduct the feasibility study.7.3 Human Resources Division. The establishment of a SA National Defence Training Institute. The feasibility studyhas been concluded by the Transaction Advisor. The DOD is in the process of obtaining approval.7.4 Defence Intelligence. The establishment of a new headquarters for Defence Intelligence. The feasibility study wascompleted by the Transaction Advisor. The DOD is in the process of obtaining approval.8. Corporate Governance Arrangements8.1 Standard of behaviour8.1.1 Leadership. Senior commanders and managers of the Department exercise their leadership in accordance with theconstitutional principles of transparency, good governance and accountability. Confidentiality is preserved in certaincircumstances when it is in the national interest to do so.8.1.2 Codes of Conduct. Codes of conduct have been formally adopted for military members and public service employees.All officials subscribed to the standards contained in these codes by signature. Disciplinary procedures areapplied for non-conformance.8.1.3 Conflict of Interest. Members of the DOD are expected to declare their economic interest annually. Although this isnot always complied with, accountability is enforced through the line of command and management bodies. Membersof management bodies dealing with procurement and acquisition are required to declare potential conflicts and withdrawbefore commencement of meetings. All officials are required to declare gifts in registers open to scrutiny. Toenhance the understanding of good governance by improving systems and processes that will enable the DOD to riseto the challenges of contemporary public service of accountability, fairness and transparency and based on moral dutiesthat find expression in discipline. The DOD intends to strengthen the capability regarding the management of conflictof interest. The DOD Inspectorate and Internal Audit will provide assurance capacity to monitor progress in theseareas. The DOD will ensure the integrity of the DOD's integrated report to have control, to enable, to verify and safeguard.The DOD will delegate the Audit Committee to evaluate sustainability disclosures.8.2 Departmental Structures and Processes8.2.1 Compliance. Compliance with the applicable statutes and regulations are monitored through various levels of auditand inspections. However, the Department's capacity to ensure compliance is inadequate because of the scope of activitiesand complexity of the environment in which it operates. The DOD seeks to improve the situation through risk162ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011and accountability forums.8.2.2 Statutory Accountability. The Secretary for Defence accounts to Parliament for the management of the implementationof the Defence Vote. All departmental budget authorities are held to account by the Secretary for Defence forthe economic, efficient and effective utilisation of resources to achieve the objectives of their respective programmesthrough the monthly Accountability Management Committee (AMC) meetings. The AMC agenda provides for thediscussion of delegation management, risk management, internal and external audit reports management, SCOPAResolutions and reports on irregular and fruitless and wasteful expenditure.8.2.3 Communication with Stakeholders. DOD officials appear regularly before relevant Parliamentary committees oninstruction of the Minister to explain departmental plans, programmes and budgets (including resource managementpolicies) as well as account for performance. All media enquiries are answered through a corporate communicationservice.8.2.4 Roles and Responsibilities. The Minister of Defence and Military Veterans directs and controls the DOD functionsthrough the Council on Defence. The Secretary for Defence and the Chief of the SANDF implement ministerial directivesthrough the Defence Staff Council. Top level budget authorities are members of the Defence Staff Council.Subordinate boards and committees serve this Council. A formal strategic direction and control process is followedthat sets the agenda for these councils, boards and committees.8.3 Control8.3.1 Risk Management8.3.1.1 The DOD Enterprises Risk Management Framework which is aligned to the Public Sector Risk ManagementFramework and the South African National Standard 31000:2009 (ISO 31000:2009) was approved in December 2010.This framework is a set of components that provide the foundations and organisational arrangements for designing,implementing, monitoring, reviewing and continually improving risk management in the DOD. Based on theapproved framework, the revision of the current DOD Risk Management Policy and DOD Risk Management Strategyis at an advanced stage to be promulgated in the calendar year 2011 and to be implemented in the calendar year 2012.8.3.1.2 To enhance the culture of risk management, extensive awareness initiatives were embarked on during the period underreview. Training workshops and risk assessments were held with members of the Services and Divisions.8.3.2 Fraud Prevention8.3.2.1 The Directorate Anti-Corruption and Anti-Fraud (DACAF) is organised to produce a Corruption and Fraud PreventionPlan within its mandate for the DOD and monitors the implementation thereof. The Prevention Plan, together withthe approved processes within the DACAF regulates all the activities for the directorate.8.3.2.2 A sound Corruption and Fraud Prevention Strategy formed the basis for the DACAF activities during the year underreview with the focus on:The promotion of transparency and accountability in the actions and conduct of DOD members.Regulatory measures to determine correct conduct of individuals.Policies and controls to prevent the occurrence of fraudulent and corrupt acts within the DOD.Alternative measures in addition to the main strategy of the DOD to combat fraud and corruption.The awareness of DOD personnel concerning the nature and extent of fraud and corruption, and what to lookout for to detect such activities.Emphasis on promoting integrity of individuals as well as work ethics, as these are factors to prevent corruptionand fraud from taking place in the first place.ANNUAL REPORT FY 2010/2011 163

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20118.3.2.3 DACAF Mandate. To provide anti-corruption and anti-fraud services, including serving as a nodal point for forensicauditing, to the department, provided that evidence of corruption and fraud shall be handed over to the MilitaryPolice Division for further investigation in terms of and in accordance with applicable law.8.3.2.4 The Corruption and Fraud Prevention Plan (version 2) was reviewed and is effective from 1 April 2011. The PreventionPlan is distributed to Service and Divisional Chiefs and also being communicated by means of road-shows in aneffort to reach all members of the DOD on all levels.8.3.3 Internal Audit8.3.3.1 Internal Audit is an independent process conducted to evaluate internal controls implemented by management toensure that resources have been acquired economically, utilised efficiently and effectively, and to report this to managementand its legislative body. It is acknowledged that during the year under review, the Internal Audit Unit did notoperate under the leadership of the Head of Internal Audit as the post was vacant, thus all its activities were carriedout under the leadership of the Inspector General DOD. It is anticipated that the unit's head will be appointed duringthe financial year 2011/12 as the recruitment process has reached an advanced stage. It is anticipated that once theinternal audit function is fully functional in the coming years, it will provide management with the assurance aboutthe processes in place to ensure accurate reporting in-year and the adequacy of these before the external audit is conductedwhich should reduce the number of findings and misstatements in the interim and final financial and performancereports.8.3.3.2 During the period under review, 87 audits were conducted and the following components were addressed:Performance Measurement. Annual and quarterly reports were audited and inconsistencies in the reportingof targets were identified and reported to the appropriate management. However, there has been a remarkableimprovement on the accuracy of performance information reported in the quarterly and annual reports.Combat Readiness. Although no combat readiness audits were conducted in the period under review, the outcomeof the audits conducted in the previous financial year proved to be valuable. Chronic and critical shortcomingsin the resources, budget constraints and loss of technically qualified and/or skilled personnel reportedin the previous financial year, led to the improvement of combat readiness of forces reporting to the mobilisationcentres.Mobilisation and Foreign Deployment. Based on the audit findings and recommendations of the mobilisationand foreign deployment audits conducted, the Joint Operations Division is developing a mission readinesstraining curriculum.Risk based audits. 50 risk based audits were conducted. Internal auditors recommended to management asystem of internal controls to prevent, detect and correct deviations that may occur in the operational procedures. Follow-up audits. Follow-up audits were conducted mainly on two risks (Procurement System andCodification System) and the internal auditors recommended control measures to mitigate the risks.8.3.4 Audit Committee8.3.4.1 The Audit Committee provided guidance to the Defence Inspectorate Division during the period under review. TheAudit Plan and Auditor General's audit report revealed that the financial statements were not adequately addressed,which was ascribed to the lack of expertise of the internal auditors. The external members of the Audit Committeemade their services available to assist the DOD to address the lack of expertise. The Audit Committee was partly satisfiedwith the content and quality of quarterly reports prepared by the IG DOD during the period under review.164ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20118.3.4.2 The Defence Inspectorate Division provided the secretarial services for the Audit Committee. The following informationregarding the Audit Committee is relevant:Composition. During the year under review, the Audit Committee for the Department of Defence (DOD AC)was duly constituted according to the Public Finance Management Act (PFMA). The external members to theDOD were as follows with their appointment dates indicated in brackets: Dr D. Konar (Chairperson) (30 May2008); Mr K.A. Ross (26 May 2008) and Ms J. Kumbirai (December 2007). Mr Ross passed away on 21January 2011. Ms Kumbirai's contract expired in December 2010 and indicated that she is not available toserve another term as a member of the DOD AC. Mr Radebe and Mr Mudaly were appointed by the Ministerof Defence and Military Veterans in January 2009, but are not active members due to security clearances. MrMudaly indicated that he was no longer available to serve as a DOD audit committee member. Mr Radebeapplied for a security clearance which was submitted for evaluation. Dr T. Gamede (Chief Defence Policy,Strategy and Planning) was appointed as an internal member to the DOD AC on 31 March 2009.Responsibilities. The Audit Committee complied with its responsibilities arising from Section 38 (1)(a) of thePFMA and Treasury Regulation 3.1.3. Three scheduled and two special meetings were held. Two Special Incommittee-meetingswere held with the Auditor-General. Activities of the Audit Committee were formalisedinto a plan, allowing the coverage of the total spectrum of risk areas that need to be assessed and monitored,in accordance with the Public Finance Management Act and National Treasury Regulations. The Terms ofReference, which guide the activities of the Department of Defence's Audit Committee, were reviewed in May2010 and was approved by the Accounting Officer. The Terms of Reference were distributed for review inJanuary 2011. The external and internal members, Ex-Officio Officers, the Auditor-General, Chief AuditExecutive and the Accounting Officer, formally assessed the DOD Audit Committee.Activities. The Audit Committee members had direct access to the Auditor-General, the Secretary for Defenceand the Chief of the South African National Defence Force.8.3.5 Consolidated Control System8.3.5.1 The Consolidated Control System, specifically the financial misconduct module, was signed off at the end of the previousreporting period and activated through DODI 01/10 dated 22 February 2010. The aim of the system is to:register all non-compliant events as it occurs in the DOD;finalise it in accordance with legislation, prescripts and DOD policies;generate reports to substantiate the Annual Financial Statements;provide managers at all levels in the DOD access to management information regarding non-compliance andmisconduct;provide guidance regarding which policies/governance in the DOD requires to be addressed; andperform trend analysis to identify, confirm and evaluate risks.8.3.5.2 During the financial year 2010/2011 officials at level 1 and 2 of the DOD were trained to manage incidents and aprocess is underway to commence with training of officials at levels 3 and 4 in the financial year 2011/2012. The aimis to further develop processes that prevent and therefore, in the medium term, eliminate the occurrence of incidentsof financial misconduct in the department.8.3.6 Budgeting and Financial ManagementThe DOD budget is developed in accordance with Government's guidelines and priorities, is aligned with departmentalstrategies and plans, tabled in Parliament and enacted through the annual Appropriation Act. The ExecutiveAuthority, Accounting Officer and budget authorities monitor budget execution on a monthly basis in accordance withANNUAL REPORT FY 2010/2011 165

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011the financial management regulatory framework. The budget and supporting systems are cash-based resulting in limiteddecision making financial management information. Defence is continuously assessing and updating its budgetingsystems to ensure compliance with the regulatory framework.8.4 External reporting8.4.1 Annual Report. The Minister tables the annual report including financial statements to provide an account of thedepartment's performance against the objectives set in the strategic business plan and its financial position and performanceagainst the appropriate budget.8.4.2 Accounting Standards. The Financial Statements have been prepared on the cash basis of accounting modified forthe recognition of certain near-cash balances and supplemented with disclosures on transactions and balances notrecognised in the primary statements.8.4.3 Performance Measures. The performance measures for departmental outputs are set out in the strategic businessplan as measurable outputs and targets. The actual performance against these measures is reported in the main portionof the annual report.8.4.4 External Audit. An objective and professional relationship has been established with the Auditor-General. TheSecretary for Defence chairs first, interim and final audit steering committee meetings. Co-ordination meetings areheld with the Secretary for Defence quarterly and with the Chief Financial Officer monthly. The Audit Committeeco-ordinates the internal audit programme with that of the Auditor-General.8.5 Occupational Health and Safety (OHS)8.5.1 The function shift of the Joint Directorate Occupational Health and Safety (JDOHS) from the SA Military HealthService (SAMHS) to the Human Resources Division was approved by the Minister of Defence and Military Veteranson 19 July 2010. This has improved the line of reporting to the Secretary for Defence and the Chief of the SANDF.8.5.2 Significant progress was achieved in the execution of OHS by the Services and Divisions. The formally constitutedDOD OHS Forum contributed to this improvement. The DOD OHS Forum is a coordinating management forumwhich meets monthly. As constituted, all divisions with units under command are represented on the DOD OHSForum. The Forum also provides for the participation of experts to provide OHS training and health service deliveryinputs or legal advice.8.5.3 The review of the OHS policy was completed and the draft has been distributed for comments. The OHS policyadopts a wider scope. It incorporates the need for the DOD to address precautionary and preventative measures; toidentify the need for strict selection and training of members, and to review training and equipment doctrine to matchanthropomorphic features of members. The emphasis has also been placed on instituting good monitoring systems.8.5.4 Good progress was also made in building capacity through training. Altogether 345 officials underwent OHS training.The OHS course curriculum was redesigned to train managers on the OHS Management System at the level ofexecution. This was undertaken to align the training curriculum with the new OHS policy and to meet the requirementsfor accreditation. An OHS Seminar was held in February 2011 and attended by 89 delegates. The Seminarserved to expand the knowledge of DOD officials on the nature of occupational hazards in the military.8.5.5 Monitoring OHS compliance is undertaken through the monthly and quarterly reporting system that has been instituted.In addition, on-site inspections of units were conducted. This is instrumental in rectification actions and preventativemeasures.8.5.6 The emphasis was placed on units conducting the workplace assessment as prescribed in section 8(d) of the OHS Act1993. The Hazard Identification and Risk Assessment (HIRA) was conducted in 64 units. This achievement will beimproved as the DOD builds its OHS capacity and skills. By means of the HIRA, the Unit commander is informed166ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011of health and safety risks and is in a better position to take precautionary measures or plan and budget for rectifications.The SAMHS continued to render a multi-professional OHS service at the five Regional OHS Centres. Theirprimary output being the OHS assessments conducted at units and biological monitoring of members. As regards professionalskills and staffing, it must be noted that there is a national skills shortage of occupational medical practitioners,nurses and occupational hygienists. To address this skill shortage, the SAMHS has initiated a Service LevelAgreement (SLA) with the National Institute of Occupational Health to meet this need.8.5.7 The JDOHS and IG DOD held discussions during the period under review regarding OHS inspections and audits. Thekey issue being; the building of capacity and skills. The concepts of establishing an OHS inspectorate is under discussionwith the Chief of Human Resources and requires the approval of the concept and a post structure. The IGDOD inspects the OHS management aspects during their scheduled inspections.8.5.8 The status of OHS compliance of facilities received critical attention in the department. Under the direction of theChief of Logistics the facilities refurbishment programme has been prioritised and the Works Capability Formationhas been established. This programme will see many occupational health and safety issues addressed.8.6 Military Integrated Environmental Management8.6.1 International Environmental Co-operation. The RSA-USA Environmental Security Working Group (ESWG)under the RSA-USA Defence Committee achieved all its objectives including the initiation of the Joint Guidebook onEnvironmental Auditing and attendance of the US Environment, Energy Security and Sustainability (E2S2) symposiumin June 2010 in Denver, Colorado. In collaboration with the ESWG, two events namely, on Maritime SpillResponse during August 2010 in Durban and on Contaminated Land and UXO Contamination during September 2010in Pretoria, were presented to arrange, plan and train personnel from military training areas.8.6.2 Military Range Clearance and Total Environmental Contingent Liability. The range clearance operations on theformer Hell's Gate Training Area as part of Project UMTHOMBO were concluded with the finalisation of independentquality assurance. The surface clearance operations on the thirteen identified priority areas at Madimbo TrainingArea have been initiated with one of the danger areas finalised. The development of various training modules for thefunctional streams have been finalised for delivery in May 2011 at the Centre of Excellence at De Aar. Relevant militarypersonnel are being trained to support and provide decision support to the proposed Military Range Clearancecapability, as well as the implementation of Integrated Training Area Management on military training areas. TheUXO costing model has been extended to include spill contamination, soil erosion and alien vegetation to determinethe total environmental contingent liability for disclosure in the DOD financial statements.8.6.3 Operation CORONA. DOD Environmental Services are providing environmental decision support in the re-establishmentof operational bases for the border safeguarding as part of Operation CORONA to ensure environmentalcompliance by the DOD.8.6.4 Operation VUSELELA. Operation VUSELELA projects were optimised in the Free State Province for increasedbenefit to the environment as well as the military veterans. Monitoring and control measures between the DOD,Department of Water Affairs (DWA) and its implementing agent, the Independent Development Trust (IDT) werestrengthened to improve the management of the project. The identification and verification of military veterans by theDepartment of Military Veterans for participation in this project remain a challenge for the DOD, DWA and IDT.8.6.5 Environmental Appreciation in Force Employment Planning Processes. The Joint Operations Force EmploymentRequirements and Guidelines were promulgated by CSANDF Directive 069/2010. A permanent factor "Environment"for all force employment planning processes will in future be appreciated and incorporated in planning processes. Inthis sense, environmental personnel have been involved in the planning of joint, bilateral and multi-national exercises,namely, Exercise YOUNG EAGLE, Exercise IBSAMAR II, Exercise SHARED ACCORD and Exercise BLUECLUSTER, respectively. Military environmental personnel have also been deployed in the Sudan.ANNUAL REPORT FY 2010/2011 167

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20119. Discontinued activities/activities to be discontinued and new/proposed activities.Discontinued activities, activities to be discontinued, new services/outputs to be scaled up and services scaled up andservices scaled down or suspended are reported on in Appendix E of the Annual Report.10. Asset Management10.1 Background. The DOD was not in a position to disclose the required asset information in the Annual FinancialStatements for the past three years as a result of the following challenges:10.1.1 Assets are managed manually or on one of the five logistical systems and are paid for via the Financial ManagementSystem (FMS). These systems support cash accounting and are not integrated.10.1.2 The use of the multiple logistic systems lead to data integrity issues, especially when assets are transferred betweenunits using different logistical systems.10.1.3 No segregation between asset and inventory items on the system as required by the National Treasury's Standard Chartof Accounts (SCOA).10.1.4 Monetary values such as the original purchase price are only carried in respect of certain items as it was not requiredon the system.10.1.5 In cases where the original purchase price has been captured, it is not always verifiable.10.1.6 Acquisition dates were also not carried on the systems and it is therefore difficult to determine the value of the assets.10.1.7 Not all assets are uniquely identifiable (equipment unique serial number or bar code) such as office furniture. Theyare managed based on quantities per National Stock Number (NSN) and location only.10.2 Asset Management PlanIn order to address these challenges and the audit qualifications, the DOD developed a short and long term rectificationplan. The short term plan focuses on the utilisation of the existing systems, Operational Support InformationSystem (OSIS) and Computer Aided Logistic Management Information System (CALMIS) to establish an assetregister, while the long term plan focuses on the implementation of an integrated defence supply chain and life cyclemanagement system based on internationally recognised best practices, and enabled by a single integrated logisticmanagement information system, including the IFMS asset register and procurement modules.10.3 Progress against plan10.3.1 Short Term Intervention Plan. As a result of the high volumes of assets, geographical spread and in some cases thelack of unique identification (bar coding) of assets, the short term plan is executed in three phases. Phase one focussedon the serial controlled items, while phase 2 and 3 will focus on the bar coding and verification of the other asset categories.Highlighted below is the progress with regards to phase 1.10.3.1.1 Moveable Capital AssetsA draft asset management policy framework has been developed.The Item Identification Database (IID) has been updated to allow for the indication of SCOA AssetClassifications. Each NSN can be marked as an Asset or an Inventory Item based on the SCOA and managedaccordingly.The current logistic Information Systems (CALMIS and OSIS) have been updated to carry the informationrequired as reflected in the National Treasury Asset Management Framework in order to adhere to the minimumrequirements of an asset register. Although these are two separate registers - a single view on assets has168ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 2011been created within the DOD Corporate Warehouse.The systems were also updated to:Cater for all forms of acquiring assets.Continuously update and verify data as well as to support fair value updates (asset verification).Support the management of assets (includes capitalisation, depreciation, improvements, impairmentsand disposal).As part of phase 1 of the plan in compiling an asset management register, in cooperation with Servicesand Divisions, the verification and population of the acquisition data for end items such as aircraft, vessels,military combat vehicles, other vehicles and weapons has commenced. The first step in phase 2will be to complete this process.The relevant asset information is available on the DOD Corporate Data Warehouse in order to providea single view on end assets (Asset Register).10.3.1.2 Immoveable Capital Assets - Defence Endowment Property (DEP)The Endowment Property Asset Register compilation project has advanced considerably. Category A assets, being theLand and Buildings register has been fully compiled and work to complete valuation in that regard is nearing completion.CategoryB assets, being Leases and Agreements and Category C assets, being Securities are currently beinganalysed and appropriately classified and valued and it is anticipated that the work on this will be completed by 30September 2011 at which stage the DOD will be in a position to have a fully compliant asset register of all these assetsin line with the requirements of the Endowment Property and Account Act (Act No 33 of 1922).10.3.2 Long Term Repositioning Plan10.3.2.1 A draft Supply Chain Management and Life Cycle Management Framework has been developed.10.3.2.2 The User Requirement Specification for an integrated Defence Logistic Information System is in the process of beingdeveloped.10.3.2.3 An implementation charter was signed with the IFMS project team of the National Treasury, whereby it was agreedthat the DOD will implement the Asset and Procurement modules of the IFMS. National Treasury (IFMS Section)will assist the DOD in acquiring approval for the lifting of the moratorium on procurement and implementation of aunique Single Defence Logistic Integrated Information Management System.10.4 ValuationsAs highlighted above, all the assets were carried at the latest purchase price on the current logistical systems. As partof the short term intervention plan, all serial controlled items are in a process of being revalued at fair value or in caseswhere sufficient evidence was available, it was recorded at cost price.10.5 DisclosureIn order to illustrate the progress that has been made during Phase 1 of the short term intervention plan the DODagreed to disclose assets information in the Annual Financial Statements. The DOD recognizes that the asset informationdisclosed is not complete and has therefore included additional notes to explain what has been disclosed in orderto ensure a fair presentation of the financial statements. The work largely completed in Phase 1 of the project dealtwith the verification and data clean-up on the complete systems of the major categories of Transport Assets andSpecialised Military Equipment. The balance will be carried out together with the other categories of assets underPhase 2 of the project which will entail the bar coding of these assets as well.ANNUAL REPORT FY 2010/2011 169

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 201110.6 Intangible AssetsThe DOD established a task team to compile an asset register for all intangible assets. A proper project plan has beencompiled and it is envisaged that a proper intangible asset register will be completed by the end of the 2011/12 financialyear. In the meantime all the additions as per the SCOA definitions for the 2010/11 financial year have been disclosed.11. InventoriesBoth the short and long term asset management plan will also address the current challenges with regards to inventory,especially the segregation between assets and inventory and the valuation of inventory. The DOD will however,in the interim, disclose inventory on the first-in-first-out (FIFO) basis which matches the design of the current systemsthat reflect values at the latest purchase price.12. Special Defence AccountIn the year under review, the annual financial statements of the Special Defence Account are excluded from the AnnualReport of the DOD. This has been necessitated by the decision to change the accounting framework from an entityspecificframework to GRAP. The change in the framework necessitated the financial statements to be reconstructedto be in line with the new framework, including the restatement of all comparative figures for the previous year, includingthe notes and accounting policies applicable. It is anticipated that these statements will be available for tabling tothe Legislature immediately after completion of the audit process.13. Events after the reporting dateThere were no events after the reporting date.14. Performance information14.1 Performance information is described in Part 1 to 4 of the Annual Report.14.2 The DOD is addressing the following issues regarding performance information as identified by the Auditor General:14.2.1 Policy Framework. In order to deal with the weaknesses in the policy framework around the management of performanceinformation, the department is developing a comprehensive corporate policy which clearly describes roles,responsibilities and control activities necessary for the efficient management of this task.14.2.2 Strategic Plan. During the financial year 2010/11 the DOD undertook the institutionalisation and implementation ofthe results-based planning process principles (outcomes, outputs, activities and inputs) as prescribed by the NationalTreasury through the development of the DOD Strategic Planning Framework (SPF). The SPF facilitated the reformulationand enhancement of departmental performance information as aligned to outcomes and outputs, thereby ensuringthe auditability of performance information in compliance with the National Treasury performance informationstandards. This will be evident in the financial year 2011/12.14.2.3 Internal Control. Taking cognisance of the weaknesses that have been raised regarding the accuracy and completenessof the information reported in the Annual Report, during the year under review, improvements in controls havebeen implemented to ensure that the information planned and reported at the lower levels is accurately and completelytransferred to the Annual Report. The matters raised in the Audit Report have been investigated and rectified inpreparation for the next audit cycle.14.2.4 Risk Management. The DOD Strategic Risk Register has been updated to include the risks and mitigation actionsrelating to performance information.170ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 201115. SCOPA Resolutions15.1 The DOD appeared before SCOPA on 1 March 2011 on its 2007/08 and 2008/09 Annual Reports and is awaiting theresultant resolutions to be adopted by SCOPA.15.2 The DOD has prepared a preliminary response to SCOPA on issues raised and commitments made at the hearing,which is in the approval process.15.3 The SCOPA Hearing on the DOD's 2006/07 AG Report was held on 21 November 2007 and the 2006/07 SCOPAResolutions were adopted on 8 February 2008 by Parliament. The DOD submitted the action plans on the 2006/07SCOPA Resolutions to Parliament (SCOPA) on 9 June 2008. The detailed feedback in the table below reflectsprogress made with the implementation of these action plans (only on those not yet finalised):0607 AG ANNUALREPORT REFER-ENCEPage 190RECOMMENDATIONS MADEIN SCOPA RESOLUTIONSDATED 8 FEB 08Par 1 - Tangible & intangible assets,accruals. The Committee recommendsthat the Accounting Officerensures that:a) the current information systemsused, are upgraded or alternativesbe investigated to implementa single logistical systemthat can provide the financialinformation as required byNational Treasury in respect ofaccruals, tangible and intangiblecapital assets;b) shortcomings in the informationsystems are reduced by implementingmanual controls toensure proper identification,classification, recording and disclosureof accruals andtangible/intangible capital assets;DOD PROGRESS ON ACTION PLANSThe Asset Management Project has been implementedin 2007. The scope of this project is brokeninto three phases, namely a) inventory verificationand error identification, b) asset register clean-upand functional specification development, and c)rolling out an Integrated Asset ManagementSystem in line with IFMS requirements. Phase onehas been completed and phase two is currentlyrunning. It is envisaged that phase three will kickin late 2010. Until then, CALMIS and OSIS willremain as the main systems.DOD representatives are involved with the developmentof the National Treasury IFMS system.CALMIS is implemented in the SA Army accordingto plan and OSIS has been implemented in 80%of SAAF units and 90% of SA Navy units. Once allunits are computerized migration to IFMS will proceed.The manual system implemented was refined andan amended instruction was issued to Services andDivisions to obtain additional information in orderto accurately complete accruals disclosure in the08/09 Annual Financial Statements. Differentteams, under the leadership of the Operation CleanAudit team (Accruals) were sent to pre-determinedunits to assist with the compilation of information.The outcome of this initiative will only be availableafter final reconciliation of accruals for the 08/09FY.ANNUAL REPORT FY 2010/2011 171

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 20110607 AG ANNUALREPORT REFER-ENCEPage 191-192Page 268-269RECOMMENDATIONS MADEIN SCOPA RESOLUTIONSDATED 8 FEB 08Par 3 - Lease commitments. TheCommittee recommends that theAccounting Officer ensures that:a) internal controls are implementedto ensure that transactionsand other significantevents with respect to leasecommitments are properlyidentified, classified, promptlyrecorded and disclosed;Par 6 - Special Defence Account(SDA). The Committee recommendsthat the Accounting Officerensures that:a) the accounting frameworkapplicable to the SDA and theclassification of the SDA,which have been outstandingsince 2004/05, is clarified withNational Treasury as a matterof urgency;b) surplus funds not required forimmediate use are investedand withdrawn when necessary;andc) a policy governing investmentsof all moneys to thecredit of the account is compliedwith, approved andimplemented as a matter ofurgency. If investing is not theway to go, the Defence SpecialAccount Act, 1974 (Act No. 6of 1974) must be amended.DOD PROGRESS ON ACTION PLANSAn interim instruction was issued in April 2008,clearly spelling out the processes and procedures forthe control of leases and also how to maintain thelease register. Although Services and Divisions havemaintained the required register, a lack of training atunit level resulted in limited successes beingachieved. Interventions undertaken include thedeployment of specialists from the consortium ofKPMG and SAB&T(Operation Clean Audit Team)throughout the DOD to assist with training andcompilation of lease registers. A letter was also distributedto Services and Divisions to confirm the correctaccounting of all hired equipment.Classification. The DOD has decided not to proceedwith the reclassification of the SDA as aSchedule 4.Framework. The National Treasury wasapproached for guidance on the accounting frameworkfor the SDA. In the absence of an answer fromthe National Treasury and in the light of the possiblerepeal of the Defence Special Account Act to beincluded in the Public Finance Management Bill theDOD recommended to the National Treasury to proceedpreparing the financial statements for the SDAon the entity-specific basis of accounting and it wasagain approved for the 2008/09, 2009/10 and2010/11 financial statements.The National Treasury instructed the DOD to, inspite of the requirements of the Defence SpecialAccount Act, not invest the reserve funds of the SDAas it will not be in the economic interest of the State.The investment policy is currently in the approvalprocess and will be promulgated during the 2011/12financial year.The DOD has prepared an investment policy for theSDA reflecting the instruction by the NationalTreasury not to invest the reserve funds of the SDA.The amendment of the Defence Special Account Actis not currently considered in the light of the possiblerepeal of the Act and the inclusion of the conditionsof the Act in the Public Finance ManagementBill.172ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 201116. Prior modifications to audit reportsMatters reported on by the AGSA in the 2009/10 financial year.09/10 AGSA Audit ReportReferenceTangible and Intangible CapitalAssets Qualification - Page 176.The department did not discloseany financial information forboth the current and prior yearin notes 34, 35 and 36 to thefinancial statements as requiredby the financial reporting frameworkset by National Treasury.The DOD did not maintain aproper asset register, supportedby relevant documentation toenable me to quantify the misstatements.FY firstreported06/07Progress made in clearing/resolving the matterTangible Movable Capital Assets. The following initiativesare underway to accomplish NT asset managementrequirements: Implementation of a DOD Asset and InventoryVerification Program (started in 2008 - first phase completed,busy with second phase). Busy procuring a two-dimensional bar-coding, taggingand scanning capability to enhance item identificationand tracking. Continuous monitoring of National Stock Numbers(NSNs) to SCOA which enables the DOD to report inthe required categories. Completed functional specifications for a single, integratedasset and inventory management system (inclusiveof cataloguing and codification).Busy engaging the IFMS team to consider the uniquenessof the DOD supply chain requirements and togrant a deviation from the moratorium for the procurementof a single logistics information system.Tangible Immovable Assets. The following initiativesare underway to accomplish NT asset managementrequirements:A user Asset Management Plan has been developed inco-operation with the CSIR.Busy with the verification of all Defence EndowmentProperties, assisted by the CSIR.The requirement specifications for an IntegratedImmovable Asset Management System have beendeveloped.Intangible Capital Assets (ICA). The following initiativesare underway to accomplish NT asset managementrequirements:SLA with Armscor was extended to include the establishmentand maintenance of an ICA register.Busy revising the DOD IP policy to include all ICAs.Busy establishing the current and historical DefenceICA and population of the ICA register.ANNUAL REPORT FY 2010/2011 173

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 201109/10 AGSA Audit ReportReferenceIrregular expenditure Emphasisof Matter - Page 177. ·Irregularexpenditure (as disclosed in note27 to the financial statements) tothe amount of R1 billion, mainlycomprising of housingallowance, new military dispensationand performance awardswas paid during the year underreview without following theproper approval processes asprescribed in section 55 of theDefence Act, 2002 (Act no. 42 of2002) and section 2 of the PublicService Act, 1994 (Act no. 103 of1994).Predetermined objectives -Reliability of reported performanceinformation Other Matter -Page 178.For the three selected programstested the validity, accuracy, orcompleteness of some of thereported targets could not beestablished as sufficient appropriateaudit evidence could notbe provided for audit purposes.Non-compliance with the PublicFinance Management Act andTreasury regulations OtherMatter - Page 178. The department did not complywith section 38 (1)(a)(ii) ofthe PFMA as an internal auditfunction was not fully operationalfor the year underreview. Furthermore, contraryto the requirements ofTR 3.2.1 the department didnot have an approved fraudprevention plan.FY firstreported08/0909/1009/10Progress made in clearing/resolving the matterThe CFO has implemented the following correctiveactions: Irregular and fruitless and wasteful expenditure arefrom 1 Apr 09 reported to the nodal point immediatelyupon discovery thereof. Incidents of irregular and fruitless and wasteful expenditureare from 1 Apr 09 properly investigated anddealt with in accordance with PFMA and TR prescripts. The Financial Misconduct policy has been revised toinclude irregular and fruitless and wasteful expenditureand has been promulgated and implemented. Boards of Inquiry processes are being followed up toensure speedy conclusion of investigations andinquiries. The Mandating Committee has condoned the expenditurefor 2009/10.The following corrective measures were implemented: The DOD has contracted the services of the TechnicalAssistance Unit (TAU) of National Treasury to assistwith the streamlining and improvement of the DODplanning process in terms of definition of performanceindicators, measures and targets. Over and above the yearly comprehensive reportinginstructions, the DOD has started a process to developa DOD policy framework to streamline the reportingrequirements, responsibilities and accountabilities. A DOD team was established to coordinate and verifyDOD performance information. (DOD CorporateStrategic Planning Team) The head of the Internal Audit Unit is in the process ofbeing appointed.Appointment of the Head of Internal AuditThe first round of interviews for the post of Chief InternalAuditor has been held and recommended to the Ministerfor final interviews by a Committee of Ministers as is thecase for the appointment of Deputy Directors-General inthe Public Service.Approval and roll-out of the DOD Fraud PreventionPlan A corruption and fraud prevention plan was developedand implemented for the DOD. A fraud prevention forum was established to ensureactive participation and commitment of all Servicesand Divisions. The DOD is in the process of conducting road showsto create awareness and ensure compliance with thepolicy.174ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 201109/10 AGSA Audit ReportReferenceInternal Control DeficienciesOther Matter - Page 179.Leadership - Management didnot have approved policies andprocedures to guide managementat the lowest level toensure compliance with NationalTreasury disclosure requirementswith regard to the recording anddisclosure of the various categoriesof tangible and intangibleassets. Furthermore, the departmentdid not have the necessarykey controls in place to effectivelymanage performance againstpredetermined objectives. Thedepartment also did not effectivelymonitor compliance withlaws, regulations and policies.Internal Control DeficienciesOther Matter - Page 178.Financial and performancemanagement - Manual and automatedsystems are not adequateto facilitate the preparation andaccurate recording and disclosureof the various categories ofassets in the financial statementsas required by National Treasury.Furthermore, the record keepingpertaining to performance informationwas not adequate, resultingin information not alwaysbeing readily available for audit.The performance information inthe annual report was not adequatelyreviewed for completenessand accuracy prior to submissionfor audit.FY firstreported09/1009/10Progress made in clearing/resolving the matterPolicies and Procedures for Asset ManagementThe DOD is in the process of establishing policy frameworksfor key asset management policies.Key Controls for Performance ManagementThe DOD has an established system of managing performanceinformation which is governed by DODinstructions issued on an annual basis detailing how theDOD provides performance reports on predeterminedobjectives on a quarterly and annual basis as required bylaw. The system also helps to provide performancereports to NT and government cluster system as requiredand consists amongst others of the following: Issue a Quarterly Report Instruction for the 2010/11financial year. Issue an Annual Report Instruction for the 2010/11financial year. Develop and implement a DOD PerformanceManagement Policy.Compliance MonitoringThe following corrective measures were implemented: A Ministerial Directive outlining the compliancerequirements have been issued. The top high risk acts were identified and risk assessmentswere initiated. The DOD is in the process of developing compliancerisk management plans for the above mentioned acts. A compliance structure has been developed and is inthe approval process.Adequacy of manual and automated systemsNational Treasury's moratorium on the major enhancementof systems including logistics is a major barrier inthe ability of DOD to submit the required information inthe format required by AG. The current logistics systemsare designed to support operations and maintenance ofmilitary capabilities and not the reporting requirementsas required by the AG. A task team commenced negotiationswith the IFMS Team from NT on the lifting of themoratorium on unique modules of logistics in the DOD.The DOD is currently the lead site for the implementationof the IFMS module on asset management. The full rolloutof the asset management module and integration tothe different logistics systems will enable the DOD toreport accordingly. In the mean time, the DOD will beacquiring a single logistic system for the department.Record keeping and review of performance information The DOD has contracted in the services of theTechnical Assistance Unit (TAU) of National Treasuryto assist with the streamlining and improvement of theDOD planning process in terms of definition of performanceindicators, measures and targets.ANNUAL REPORT FY 2010/2011 175

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 201109/10 AGSA Audit ReportReferenceFY firstreportedProgress made in clearing/resolving the matterOver and above the yearly comprehensive reportinginstructions, the DOD has started a process to developa DOD policy framework to streamline the reportingrequirements, responsibilities and accountabilities.A DOD team was established to coordinate and verifyDOD performance information. (DOD CorporateStrategic Planning Team).SDA - Irregular expenditure(A400M) Emphasis of Matter -Page 263. As disclosed in note7.3 to the financial statements,irregular expenditure to theamount of R63 999 205.32 wasincurred, as the AccountingOfficer did not obtain the necessaryexemption from NationalTreasury to deviate from thestandard tender process.SDA - Non-compliance withapplicable legislation OtherMatters - Page 264. Contrary tothe requirements of section 3 ofthe Defence Special Account Act,moneys standing to the credit ofthe account, which were notrequired for immediate use or asa reasonable working balance,were not invested. TheDepartment of Defence wasauthorised to deviate from theDefence Special Account Act byNational Treasury per letterdated 30 June 2008.08/0909/10 Airbus made a proposal to the DOD on 4 October 2010regarding the repayment of the advance payments onthe A400M purchase contract. On 3 March 2011 the Ministers of Trade and Industryand Finance accompanied by NT representatives metAirbus representatives in Paris to discuss the A400Madvance payment reimbursement. An inter-departmental work group (IDWG) consistingof representatives from the DPE, DTI, NT, DOD, andArmscor has been established to harmonise a RSAposition.Notwithstanding the requirements of the Defence SpecialAccount Act the National Treasury has requested theDOD not to invest the reserve on the SDA.17. Exemptions and deviations received from the National Treasury.No exemptions or deviations were received.18. AppreciationThe progress and success of the Department's achievements over the past year is due to the efforts of many. The strategicguidance and support of the Minister and Deputy Minister of Defence and Military Veterans has been consistentexemplary and is acknowledged. The funding and support provided by the Minister of Finance and the NationalTreasury is appreciated. My colleagues in the Plenary Defence Staff Council and the Defence Secretariat Councilhave provided wise council and shared the operational load. To our various forces, locally and abroad, and our administrativeand management personnel go my heartfelt thanks for their commitment, dedication and perseverance in achallenging year of major accomplishments.176ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE ACCOUNTING OFFICERfor the year ended 31 March 201119. ApprovalThe Annual Financial Statements set out in pages 183 to 269 have been approved by the Accounting Officer.(N.Z.H. Mpofu)Secretary for Defence: Director GeneralPretoria30 July 2011ANNUAL REPORT FY 2010/2011 177

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Chapter 2REPORT OF THEAUDITOR-GENERAL TOPARLIAMENT ONVOTE N o. 21: DEPARTMENTOF DEFENCE AND MILITARYVETERANSR E P O R T O N T H E F I N A N C I A L S T A T E M E N T SI n t r o d u c t i o nI have audited the accompanying financial statements of the department of Defence and Military Veterans, which comprise theappropriation statement, statement of financial position as at 31 March 2011, the statement of financial performance, statementof changes in net assets, cash flow statement for the year then ended, and a summary of significant accounting policies and otherexplanatory information as set out on pages 183 to 269.A c c o u n t i n g o f f i c e r ' s r e s p o n s i b i l i t y f o r t h e f i n a n c i a l s t a t e m e n t sThe accounting officer is responsible for the preparation of the financial statements in accordance with the DepartmentalFinancial Reporting Framework prescribed by the National Treasury and the requirements of the Public Finance ManagementAct of South Africa, 1999 (Act No. 1 of 1999) (PFMA), and for such internal control as management determines necessary toenable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.A u d i t o r -G e n e r a l ' s r e s p o n s i b i l i t yAs required by section 188 of the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) and, section 4 of thePublic Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), my responsibility is to express an opinion on these financialstatements based on my audit.I conducted my audit in accordance with International Standards on Auditing and General Notice 1111 of 2010 issued in GovernmentGazette 33872 of 15 December 2010. Those standards require that I comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevantto the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements.I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit opinion.178ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE AUDITOR-GENERAL TO PARLIAMENTON VOTE NO. 21: DEPARTMENT OF DEFENCEAND MILITARY VETERANSB a s i s f o r q u a l i f i e d a u d i t o p i n i o nM o v a b l e a n d i m m o v a b l e t a n g i b l e c a p i t a l a s s e t sThese assets are now stated at R 76.9 billion (no disclosure in prior years) in disclosure notes 32, 33 and 34 to the financial statements.Although the department has commenced addressing some of the prior year qualification matters, the process is unfinished,in that the department could not provide sufficient appropriate audit evidence to support the amount disclosed, and therecords did not permit the application of alternative procedures.Q u a l i f i e d o p i n i o nIn my opinion, except for the possible effects of the matter described in the Basis for qualified opinion paragraph, the financialstatements present fairly, in all material respects, the financial position of the department of Defence and Military Veterans as at31 March 2011 and its financial performance and cash flows for the year then ended, in accordance with the DepartmentalFinancial Reporting Framework prescribed by the National Treasury and the requirements of the PFMA.E m p h a s i s o f m a t t e rI draw attention to the matters below. My opinion is not modified in respect of these matters:R e s t a t e m e n t o f c o r r e s p o n d i n g f i g u r e sAs disclosed in note 25 to the financial statements, the corresponding figures for operating leases for 31 March 2010 have beenrestated as a result of an error discovered during 2010-11 financial year.I r r e g u l a r e x p e n d i t u r eAs disclosed in note 27 to the financial statements, irregular expenditure to the amount of R 799,349 million, mainly comprisingprocurement not in terms of Treasury Regulations, was incurred by the department.A d d i t i o n a l m a t t e rI draw attention to the matters below. My opinion is not modified in respect of these matters:F i n a n c i a l r e p o r t i n g f r a m e w o r kThe financial reporting framework prescribed by the National Treasury and applied by the department is a compliance framework.Thus my opinion would have reflected that the financial statements had been properly prepared instead of fairly presentedas required by section 20(2)(a) of the PAA, which requires me to express an opinion on the fair presentation of the financialstatements of the department.ANNUAL REPORT FY 2010/2011 179

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE AUDITOR-GENERAL TO PARLIAMENTON VOTE NO. 21: DEPARTMENT OF DEFENCEAND MILITARY VETERANSU n a u d i t e d s u p p l e m e n t a r y s c h e d u l e sThe supplementary information set out in annexures 1A to 6 on pages 255 to 269 do not form part of the financial statements andis presented as additional information. I have not audited these schedules and, accordingly, I do not express an opinion thereon.R E P O R T O N O T H E R L E G A L A N D R E G U L A T O R Y R E Q U I R E M E N T SIn accordance with the PAA and in terms of General notice 1111 of 2010, issued in Government Gazette 33872 of 15 December2010, I include below my findings on the annual performance report as set out on pages 23 to 93 and material non-compliancewith laws and regulations applicable to the department.P r e d e t e r m i n e d o b j e c t i v e sThere are no material findings on the annual performance report.C o m p l i a n c e w i t h l a w s a n d r e g u l a t i o n sI n t e r n a l A u d i tThe accounting officer did not ensure that an internal audit function was in place as per requirements of Treasury Regulation(TR) 3.2.2. However, the Inspector General did perform certain compliance and other procedures which were reported to theaudit committee.F i n a n c i a l m i s c o n d u c tSufficient appropriate audit evidence was not available in all instances, to determine if the accounting officer ensured that investigationswere conducted into all allegations of financial misconduct made against officials within 30 days from the date of discoveryof the allegation as required in terms of TR4.1.2.A n n u a l f i n a n c i a l s t a t e m e n t s , p e r f o r m a n c e a n d a n n u a l r e p o r tThe accounting officer did not implement adequate control systems for the safeguarding and maintenance of assets to preventtheft, losses, wastage and misuse, as required by the PFMA section 38(1)(d) and TR 10.1.1(a).The accounting officer submitted financial statements for auditing that were not prepared in all material aspects in accordancewith modified cash basis of accounting determined by the National Treasury, supported by full and proper records in all instancesas required by section 40(1)(a) and (b) of the PFMA. Certain material misstatements identified with regards to operating leasecommitments were subsequently corrected, however, the uncorrected material misstatements in capital assets resulted in thefinancial statements receiving a qualified audit opinion in contravention of section 40(3)(a).H u m a n r e s o u r c e m a n a g e m e n t a n d c o m p e n s a t i o nSome senior managers did not enter into a performance agreement for the current year as per the requirements of PSR 4/III/B.1and Department of Defence Instruction: POL and PLAN No. 00065/2002 (Edition 2) dated 1 January 2005.180ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE AUDITOR-GENERAL TO PARLIAMENTON VOTE NO. 21: DEPARTMENT OF DEFENCEAND MILITARY VETERANSP r o c u r e m e n t a n d c o n t r a c t m a n a g e m e n tIn some instances goods and services with a transaction value of more than R500 000 were not procured by means of a competitivebidding process as per the requirements of TR 16A6.1, TR 16A6.4 and National Treasury Practice Note 6 and 8 of 2007/08.Awards were made to suppliers who did not declare their employment by the state or their connection with a person employedby the state or their relationship with persons involved in the evaluation and/or adjudication of the bids as per the requirementsof Practice Note 7 of 2009/10. Contrary to Supply Chain Management (SCM) requirements this is not a requirement in terms ofdepartmental policies.Instances were identified where senior managers did not disclose their business interest in a supplier to the department and to theexecutive authority as per the requirements of chapter 3(C1) of the Public Service Regulations.In some instances the SCM officials and/or other SCM role players and those whose close family members and/or partners and/orassociates had a private or business interest in contracts awarded by the department failed to disclose their interest and in somecases participated in the process relating to the awarding of the contract contrary to the requirements of TR 16A8.4(a) and (b).Some employees performed remunerative work outside their employment in the department without written permission from therelevant authority as per the requirements of section 30 of the Public Service Act and Department of Defence Instruction: PERSNo. 4/99 dated 22 December 1999.E x p e n d i t u r e m a n a g e m e n tThe accounting officer did not, in all instances, immediately upon the discovery reported irregular expenditure to the NationalTreasury as per the requirements of section 38(1)(g) of the PFMA.I N T E R N A L C O N T R O LIn accordance with the PAA and in terms of General notice 1111 of 2010, issued in Government Gazette 33872 of 15 December2010, I considered internal control relevant to my audit, but not for the purpose of expressing an opinion on the effectiveness ofinternal control. The matters reported below are limited to the significant deficiencies that resulted in the basis for the qualifiedopinion and the findings on compliance with laws and regulations included in this report.L e a d e r s h i pThe department did not exercise sufficient oversight responsibility regarding financial reporting over capital assets, complianceand related internal controls. This is evident as the department did not have sufficient monitoring controls to ensure the properimplementation of the overall process of reporting, and regular reviewing of information to ensure the accuracy, and completenessof the information reported.Management does not, in all instances, have approved updated policies and procedures, including the reporting process to guidemanagement at the lowest level to ensure compliance with National Treasury disclosure requirements.F i n a n c i a l a n d p e r f o r m a n c e m a n a g e m e n tExisting manual and automated controls are not designed to ensure adequate record keeping and accurate and complete financialANNUAL REPORT FY 2010/2011 181

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21REPORT OF THE AUDITOR-GENERAL TO PARLIAMENTON VOTE NO. 21: DEPARTMENT OF DEFENCEAND MILITARY VETERANSreporting in a timely manner which is accessible and available and to ensure that the transactions are complete and accuratelyrecorded without delay as required by the National Treasury.The assets are currently managed on various logistical subsystems. These systems are not integrated nor are they integrated withthe financial system or reconciled. Inventory and capital assets are also not separated on these subsystems. Due to a moratoriumon the acquisition of a new assets system the above shortcomings could not be addressed. Records of some units/depots are stillmanual and are not integrated for reporting purposes.Adequate controls were not implemented over daily and monthly processing and recording of transactions to ensure the accuracy,and completeness of the information reported.Adequate processes were not in place to ensure complete and timely reporting to relevant authorities as required by laws and regulations.G o v e r n a n c eThe department is still in the process of capacitating the internal audit component.O T H E R R E P O R T SP e r f o r m a n c e a u d i t sA performance audit was conducted during the year under review on the department's use of consultants, contractors and agencies/outsourcedservices. The management report was issued in February 2011.Pretoria30 July 2011182ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Chapter 2ACCOUNTING POLICIESfor the year ended 31 March 2011The Financial Statements have been prepared in accordance with the following policies, which have been applied consistently inall material aspects, unless otherwise indicated. However, where appropriate and meaningful, additional information has beendisclosed to enhance the usefulness of the Financial Statements and to comply with the statutory requirements of the PublicFinance Management Act, Act 1 of 1999 (as amended by Act 29 of 1999), and the Treasury Regulations issued in terms of theAct.1. Presentation of the Financial Statements1.1 Basis of preparationThe Financial Statements have been prepared on a modified cash basis of accounting, except where stated otherwise.The modified cash basis constitutes the cash basis of accounting supplemented with additional disclosure items.Under the cash basis of accounting transactions and other events are recognised when cash is received or paid.1.2 Presentation currencyAll amounts have been presented in the currency of the South African Rand (R) which is also the functionalcurrency of the department.1.3 RoundingUnless otherwise stated all financial figures have been rounded to the nearest one thousand Rand (R'000).1.4 Comparative figuresPrior period comparative information has been presented in the current year's financial statements. Where necessaryfigures included in the prior period financial statements have been reclassified to ensure that the format in which theinformation is presented is consistent with the format of the current year's financial statements.1.5 Comparative figures - Appropriation Statement2. RevenueA comparison between actual amounts and final appropriation per major classification of expenditure is included inthe Appropriation Statement.2.1 Appropriated fundsAppropriated funds comprises of departmental allocations as well as direct charges against revenue fund (i.e.statutory appropriation).Appropriated funds are recognised in the financial records on the date the appropriation becomes effective.Adjustments made in terms of the adjustments budget process are recognised in the financial records on the date theadjustments become effective.Unexpended appropriated funds are surrendered to the National Revenue Fund. Any amounts owing to the NationalRevenue Fund at the end of the financial year are recognised as payable in the statement of financial position.Any amount due from the National Revenue Fund at the end of the financial year is recognised as a receivable in thestatement of financial position.ANNUAL REPORT FY 2010/2011 183

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21ACCOUNTING POLICIESfor the year ended 31 March 20112.2 Departmental revenueAll departmental revenue is recognised in the statement of financial performance when received and is subsequentlypaid into the National Revenue Fund, unless stated otherwise.Any amount owing to the National Revenue Fund is recognised as a payable in the statement of financial position.No accrual is made for the amount receivable from the last receipt date to the end of the reporting period. Theseamounts are however disclosed in the disclosure note to the annual financial statements.2.3 Aid assistanceAid assistance is recognised as revenue when received.All in-kind aid assistance is disclosed at fair value on the date of receipt in the annexures to the Annual FinancialStatements.The cash payments made during the year relating to aid assistance projects are recognised as expenditure in thestatement of financial performance when final authorisation for payments is effected on the system (by no later than31 March of each year).The value of the assistance expensed prior to the receipt of funds is recognised as a receivable in the statement offinancial position.Inappropriately expensed amounts using aid assistance and any unutilised amounts are recognised as payables in thestatement of financial position.All CARA funds received must be recorded as revenue when funds are received. The cash payments made during theyear relating to CARA earmarked projects are recognised as expenditure in the statement of financial performancewhen final authorisation for payments effected on the system (by no later than 31 March of each year).Inappropriately expensed amounts using CARA funds are recognised as payables in the statement of financialposition. Any unutilised amounts are transferred to retained funds as they are not surrendered to the revenue fund.3. Expenditure3.1 Compensation of employees3.1.1 Salaries and wagesSalaries and wages are expensed in the statement of financial performance when authorisation for payment iseffected on the system (by no later than 31 March each year).Other employee benefits that give rise to a present legal or constructive obligation are disclosed in the disclosurenotes to the financial statements at its face value and are not recognised in the statement of financial performance orposition.Employee cost are not capitalised to the cost of a capital project when an employee spends more than 50% ofhis/her time in the project. These payments do not form part of expenditure for capital assets in the statement offinancial performance.3.1.2 Social contributionsEmployer contributions to post employment benefit plans in respect of current employees are expensed in the statementof financial performance when the final authorisation for payment is effected on the system (by no later than 31March each year).184ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21ACCOUNTING POLICIESfor the year ended 31 March 2011No provision is made for retirement benefits in the financial statements of the department. Any potential liabilitiesare disclosed in the financial statements of the National Revenue Fund and not in the financial statements of theemployer department.Employer contributions made by the department for certain of its ex-employees (such as medical benefits) areclassified as transfers to households in the statement of financial performance.3.2 Goods and servicesPayments made during the year for goods and/or services are recognised as an expense in the statement of financialperformance when the final authorisation for payment is effected on the system (by no later than 31 March of eachyear).The expense is classified as capital if the goods and/or services were acquired for a capital project or if the totalpurchase price exceeds the capitalisation threshold (currently R5, 000). All other expenditures are classified ascurrent.Rental paid for the use of buildings or other fixed structures is classified as goods and services and not as rent on land.3.3 Interest and rent on landInterest and rental payments are recognised as an expense in the statement of financial performance when the finalauthorisation for payment is effected on the system (by no later than 31 March of each year). This item excludes rentalfor the use of buildings or other fixed structures. If it is not possible to distinguish between payment for the use ofland and the fixed structures on it, the whole amount should be recorded under goods and services.3.4 Payments for financial assetsDebts are written off when identified as irrecoverable. Debts written-off are limited to the amount of savings and/orunderspending of appropriated funds. The write-off occurs at year-end or when funds are available. No provision ismade for irrecoverable amounts but an estimate is included in the disclosure notes to the financial statements amounts.All other losses are recognised when authorisation has been granted for the recognition thereof.3.5 Transfers and subsidiesTransfers and subsidies are recognised as an expense when the final authorisation for payment is effected on thesystem (by no later than 31 March of each year).3.6 Unauthorised expenditureWhen confirmed unauthorised expenditure is recognised as an asset in the statement of financial position until suchtime as the expenditure is either approved by the relevant authority, recovered from the responsible person or writtenoff as irrecoverable in the statement of financial performance.Unauthorised expenditure approved with funding is derecognised from the statement of financial position when theunauthorised expenditure is approved and the related funds are received.Where the amount is approved without funding it is recognised as expenditure in the statement of financialperformance on the date of approval.3.7 Fruitless and wasteful expenditureFruitless and wasteful expenditure is recognised as expenditure in the statement of financial performance according tothe nature of the payment and not as a separate line item on the face of the statement. If the expenditure is recoverableANNUAL REPORT FY 2010/2011 185

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21ACCOUNTING POLICIESfor the year ended 31 March 2011it is treated as an asset until it is recovered from the responsible person or written-off as irrecoverable in the statementof financial performance.3.8 Irregular expenditure4. AssetsIrregular expenditure is recognised as expenditure in the statement of financial performance. If the expenditure is notcondoned by the relevant authority it is treated as an asset until it is recovered or written-off as irrecoverable.4.1 Cash and cash equivalentsCash and cash equivalents are carried in the statement of financial position at cost.Bank overdrafts are shown separately on the face of the statement of financial position.For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held, othershort-term highly liquid investments and bank overdrafts.4.2 Other financial assetsOther financial assets are carried in the statement of financial position at cost.4.3 Prepayments and advancesAmounts prepaid or advanced are recognised in the statement of financial position when the payments are made andare derecognised as and when the goods/services are received or the funds are utilised.Prepayments and advances outstanding at the end of the year are carried in the statement of financial position at cost.4.4 ReceivablesReceivables included in the statement of financial position arise from cash payments made that are recoverable fromanother party (including departmental employees) and are derecognised upon recovery or write-off.Receivables outstanding at year-end are carried in the statement of financial position at cost plus any accrued interest.Amounts that are potentially irrecoverable are included in the disclosure notes.4.5 Investments4.6 LoansCapitalised investments are shown at cost in the statement of financial position.Investments are tested for an impairment loss whenever events or changes in circumstances indicate that theinvestment may be impaired. Any impairment loss is included in the disclosure notes.Loans are recognised in the statement of financial position when the cash is paid to the beneficiary. Loans that areoutstanding at year-end are carried in the statement of financial position at cost plus accrued interest.4.7 InventoryAmounts that are potentially irrecoverable are included in the disclosure notes.Inventories that qualify for recognition must be initially reflected at cost. Where inventories are acquired at no cost,or for nominal consideration, their cost shall be their fair value at the date of acquisition.All inventory items at year-end are reflected using the FIFO cost formula.186ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21ACCOUNTING POLICIESfor the year ended 31 March 20114.8 Capital assets4.8.1 Movable assetsInitial recognitionA capital asset is recorded in the asset register on receipt of the item at cost. Cost of an asset is defined as the totalcost of acquisition. Where the cost cannot be determined accurately, the movable capital asset is stated at fair value.Where fair value cannot be determined, the capital asset is included in the asset register at R1.All assets acquired prior to 1 April 2002 are included in the register at R1.Subsequent recognitionSubsequent expenditure of a capital nature is recorded in the statement of financial performance as "expenditure forcapital assets" and is capitalised in the asset register of the department on completion of the project.Repairs and maintenance is expensed as current "goods and services" in the statement of financial performance.4.8.2 Immovable assetsInitial recognitionA capital asset is recorded on receipt of the item at cost. Cost of an asset is defined as the total cost of acquisition.Where the cost cannot be determined accurately, the immovable capital asset is stated at R1 unless the fair value forthe asset has been reliably estimated.Subsequent recognitionWork-in-progress of a capital nature is recorded in the statement of financial performance as "expenditure for capitalassets". On completion, the total cost of the project is included in the asset register of the department that isaccountable for the asset.5. Liabilities5.1 PayablesRepairs and maintenance is expensed as current "goods and services" in the statement of financial performance.Recognised payables mainly comprise of amounts owing to other governmental entities. These payables are carriedat cost in the statement of financial position.5.2 Contingent liabilitiesContingent liabilities are included in the disclosure notes to the financial statements when it is possible thateconomic benefits will flow from the department, or when an outflow of economic benefits or service potential isprobable but cannot be measured reliably.5.3 Contingent assetsContingent assets are included in the disclosure notes to the financial statements when it is possible that an inflow ofeconomic benefits will flow to the entity.5.4 CommitmentsCommitments are not recognised in the statement of financial position as a liability or as expenditure in the statementof financial performance but are included in the disclosure notes.ANNUAL REPORT FY 2010/2011 187

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21ACCOUNTING POLICIESfor the year ended 31 March 20115.5 AccrualsAccruals are not recognised in the statement of financial position as a liability or as expenditure in the statement offinancial performance but are included in the disclosure notes.5.6 Employee benefitsShort-term employee benefits that give rise to a present legal or constructive obligation are disclosed in the disclosurenotes to the financial statements. These amounts are not recognised in the statement of financial performance or thestatement of financial position.5.7 Lease commitmentsFinance leaseFinance leases are not recognised as assets and liabilities in the statement of financial position. Finance lease paymentsare recognised as an expense in the statement of financial performance and are apportioned between the capital andinterest portions. The finance lease liability is disclosed in the disclosure notes to the financial statements.Operating leaseOperating lease payments are recognised as an expense in the statement of financial performance. The operating leasecommitments are disclosed in the disclosure notes to the financial statements.5.8 Impairment and other provisionsThe department tests for impairment where there is an indication that a receivable, loan or investment may beimpaired. An assessment of whether there is an indication of possible impairment is done at each reporting date. Anestimate is made for doubtful loans and receivables based on a review of all outstanding amounts at year-end.Impairments on investments are calculated as being the difference between the carrying amount and the present valueof the expected future cash flows or service potential flowing from the instrument.Provisions are disclosed when there is a present legal or constructive obligation to forfeit economic benefits as a resultof events in the past and it is probable that an outflow of resources embodying economic benefits will be required tosettle the obligation and a reliable estimate of the obligation can be made.6. Receivables for departmental revenue7. Net assetsReceivables for departmental revenue are disclosed in the disclosure notes to the annual financial statements.7.1 Capitalisation reserveThe capitalisation reserve comprises of financial assets and/or liabilities originating in a prior reporting period butwhich are recognised in the statement of financial position for the first time in the current reporting period. Amountsare recognised in the capitalisation reserves when identified in the current period and are transferred to the NationalRevenue Fund when the underlining asset is disposed and the related funds are received.7.2 Recoverable revenueAmounts are recognised as recoverable revenue when a payment made in a previous financial year becomesrecoverable from a debtor in the current financial year. Amounts are either transferred to the National Revenue Fundwhen recovered or are transferred to the statement of financial performance when written-off.188ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21ACCOUNTING POLICIESfor the year ended 31 March 20118. Related party transactionsSpecific information with regards to related party transactions is included in the disclosure notes.9. Key management personnelCompensation paid to key management personnel including their family members where relevant, is included in thedisclosure notes.ANNUAL REPORT FY 2010/2011 189

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21ACCOUNTING POLICIESfor the year ended 31 March 2011190ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21ANNUAL FINANCIALSTATEMENTS FOR THEDEPARTMENT OF DEFENCEAND MILITARY VETERANSfor the year ended 31 March 2011ANNUAL REPORT FY 2010/2011 191

D E P A R T M E N T O F D E F E N C EProgramme1. AdministrationCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets2. Landward DefenceCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets3. Air DefenceCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets4. Maritime DefenceCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets5. Military Health SupportCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTfor the year ended 31 March 2011AdjustedAppropriationR'000Shifting ofFundsR'000VirementR'0002010/11 2009/10FinalAppropriationR'000ActualExpenditureR'000VarianceR'000Expenditure as% of finalappropriation%FinalAppropriationR'0003 359 32738 90918 976-3 417 2123 371 63233 17029 15218 9613 452 9153 371 63233 17029 15218 9613 452 915----------12 305(5 739)10 17618 96135 703100.0%100.0%100.0%100.0%2 828 42339 19835 88310 5862 914 0908 460 782494 58054 204-9 009 566107 2742 033172 3794 316286 0028 568 056496 613226 5834 3169 295 5688 568 056496 613226 5834 3169 295 568----------100.0%100.0%100.0%100.0%6 606 6672 326 127107 1252 3079 042 2264 088 5421 422 88424 991-5 536 417(47 568)(22 410)17 0755 422(47 481)4 040 9741 400 47442 0665 4225 488 9364 040 9741 400 47442 0665 4225 488 936----------100.0%100.0%100.0%100.0%3 427 2935 182 18433 7465388 643 7611 894 218414 86549 218-2 358 30117 835(36 804)9 739845(8 385)1 912 053378 06158 9578452 349 9161 912 053378 06158 9578452 349 916----------100.0%100.0%100.0%100.0%1 552 356366 42678 0086641 997 4542 964 46735 75649 346-3 049 569-----61 9482 79533 3272 695100 7653 026 41538 55182 6732 6953 150 3343 026 41538 33182 6732 6953 150 114-220--220100.0%99.4%100.0%100.0%2 454 75710 081113 68429 6672 608 189ActualExpenditureR'0002 828 42339 19835 88310 5862 914 0906 606 6672 326 127107 1252 3079 042 2263 427 2935 182 18433 7465388 643 7611 552 356366 42678 0086641 997 4542 454 75710 021113 68429 6672 608 129192ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENT (continued)for the year ended 31 March 2011Programme6. Defence IntelligenceCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets7. General SupportCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets8. Force EmploymentCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000252 106401 0603 447-656 6132 652 340992 675487 702-4 132 7172 074 143145 35462 699-2 282 196Shifting ofFundsR'000-----2010/11 2009/10FinalAppropriationR'000222 359404 6276 8625633 8532 334 805997 590338 607134 6103 805 6122 011 507139 151114 6541452 265 457ActualExpenditureR'000222 359404 6276 8625633 8532 334 805997 590338 607134 6103 805 6122 011 507139 151114 6541452 265 457VarianceR'000----------VirementR'000(29 747)3 5673 4155(22 760)(317 535)4 915(149 095)134 610(327 105)(62 636)(6 203)51 955145(16 739)---------------Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%100.0%FinalAppropriationR'000192 539399 5032 662-594 7042 050 619873 761707 1665 7973 637 3431 663 206166 20858 075-1 887 489Total30 442 591-Reconciliation with Statement of Financial PerformanceAdd: Departmental receiptsActual amounts per Statement of Financial Performance (Total Revenue)Actual amounts per Statement of Financial Performance Expenditure-30 442 591689 68831 132 27930 442 37130 442 371220100.0%31 325 256699 94932 025 205ActualExpenditureR'000192 539399 5032 662-594 7042 050 619873 761707 1665 7973 637 3431 662 257166 20858 075-1 886 54031 324 24731 324 247ANNUAL REPORT FY 2010/2011 193

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENT (continued)for the year ended 31 March 2011ProgrammeCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayments for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'00016 212 0969 533 829--3 073 527731 5105 407135 639-482 624247 986-19 556100-317-30 442 591Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10-VarianceR'000-220------ActualExpenditureR'00016 597 0988 890 703--3 024 728-220--------VirementR'000385 002(643 126)--(48 799)6 000-(15 047)-(231 421)333 402-47 204(29)-(185)166 999-FinalAppropriationR'00016 597 0988 890 703--3 024 728737 5105 407120 592-251 203581 388-66 76071-132166 99930 442 591737 5105 187120 592-251 203581 388-66 76071-132166 99930 442 371Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%100.0%95.9%100.0%0.0%100.0%100.0%0.0%100.0%100.0%0.0%100.0%100.0%100.0%FinalAppropriationR'00012 705 5798 070 281--8 629 128603 6084 402126 350-599 094537 105--10-14049 55931 325 256ActualExpenditureR'00012 705 5798 069 332--8 629 128603 6084 342126 350-599 094537 105--10-14049 55931 324 247---------------------------------194ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 1 - Administrationfor the year ended 31 March 2011Details per Sub-Programme1.1 MinisterCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'0001 816Shifting ofFundsR'0002010/11 2009/10FinalAppropriationR'0001 930ActualExpenditureR'0001 930VarianceR'000Expenditure as% of finalappropriation%100.0%0.0%0.0%0.0%FinalAppropriationR'0001 709ActualExpenditureR'0001 709-----------------VirementR'000114---------1.2 Deputy MinisterCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets1 496701 5661 566100.0%0.0%0.0%0.0%1 4071 407--------------------------1.3 Ministerial DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets40 274-1 547-49 6583932281 73889 9323931 7751 73889 9323931 7751 738--------100.0%100.0%100.0%100.0%40 2612 6274 148970(148)601(17)26 05060153026 05060153018 6401881 96640 2612 6274 14897018 6401881 966-1.4 Departmental DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets26 198-547------------100.0%100.0%100.0%0.0%-1.5 Policy and PlanningCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets84 4196 887978-(19 820)(567)622664 5996 3201 600664 5996 3201 6006--------100.0%100.0%100.0%100.0%61 4296 4041 190461 4296 4041 1904ANNUAL REPORT FY 2010/2011 195

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 1 - Administration (continued)for the year ended 31 March 2011Details per Sub-Programme1.6 Financial ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000234 4215 9531 104-Shifting ofFundsR'000----VirementR'000(1 068)(2 282)1 6809952010/11 2009/10FinalAppropriationR'000233 3533 6712 784995ActualExpenditureR'000233 3533 6712 784995VarianceR'000----Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'000210 4583 0564 833556ActualExpenditureR'000210 4583 0564 8335561.7 Human Resources SupportServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets637 38423 5114 374-----(56 721)(4 130)3 6731 595580 66319 3818 0471 595580 66319 3818 0471 595----100.0%100.0%100.0%100.0%502 25021 6216 992890502 25021 6216 9928901.8 Legal ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets172 0312681 499-----(29 909)34037114 422142 1226081 87014 422142 1226081 87014 422----100.0%100.0%100.0%100.0%120 856851 5728 052120 856851 5728 052962(52)13260 6031781 25260 6031781 25252 7267322 07252 7267322 072-1.9 Inspection ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets59 6412301 120------------100.0%100.0%100.0%0.0%-1.10 Acquisition ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets49 691-2 088-----6441720450 33512 09520450 33512 095204----100.0%100.0%100.0%100.0%39 4001771 07511439 4001771 075114196ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 1 - Administration (continued)for the year ended 31 March 2011Details per Sub-Programme2010/11 2009/10VarianceR'000Expenditure as% of finalappropriation%FinalAppropriationR'00027 3591 186607ActualExpenditureR'00027 3591 186607-1.11 Communication ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'00029 756Shifting ofFundsR'000ActualExpenditureR'00027 535725854------------VirementR'000(2 221)725854-FinalAppropriationR'00027 535725854-100.0%100.0%100.0%0.0%-1 985(188)79092 0134973 89992 0134973 89976 1071 1126 38776 1071 1126 387-1.12 South African NationalDefence Force CommandAnd ControlCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets90 0286853 109------------100.0%100.0%100.0%0.0%-(244)(471)8 7068 7067 312596127 31259612-1.13 Religious ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets8 950471------------------100.0%0.0%0.0%0.0%-11 91722988211 917229882-1.14 Defence Reserve DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets15 267-845-(1 579)42373113 688421 218113 688421 2181--------100.0%100.0%100.0%100.0%-ANNUAL REPORT FY 2010/2011 197

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 1 - Administration (continued)for the year ended 31 March 2011Details per Sub-Programme2010/11 2009/10FinalAppropriationR'000136 3117533 228ActualExpenditureR'000136 3117533 228VarianceR'000Expenditure as% of finalappropriation%FinalAppropriationR'000112 2511 1854 147ActualExpenditureR'000112 2511 1854 147-1.15 Defence Foreign RelationsCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000145 6649041 765-Shifting ofFundsR'000VirementR'000(9 353)(151)1 463-----------100.0%100.0%100.0%0.0%-1.16 Property ManagementCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets1 762 29179 9351 842 2261 842 226100.0%0.0%0.0%0.0%1 544 3411 544 341--------------------------Total3 417 212- 35 703 3 452 915 3 452 915- 100.0% 2 914 090 2 914 090198ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 1 - Administration (continued)for the year ended 31 March 2011Program 1 Per EconomicclassificationCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayment for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'0001 211 0582 148 269--13 207-4 82720 875--18 962-14-3 417 212Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10----VirementR'000(76 707)89 012--1 201--(6 940)-3010 110-30--618 96135 703FinalAppropriationR'0001 134 3512 237 281--14 408-4 82713 935-3029 072-30--2018 9613 452 915ActualExpenditureR'0001 134 3512 237 281--14 408-4 82713 935-3029 072-30--2018 9613 452 915VarianceR'000------------Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%0.0%100.0%100.0%0.0%100.0%100.0%0.0%100.0%0.0%0.0%100.0%100.0%100.0%FinalAppropriationR'000950 0011 878 422--9 938-4 00225 258--35 861-2210 5862 914 090ActualExpenditureR'000950 0011 878 422--9 938-4 00225 258--35 861-2210 5862 914 090---------------------------------------------ANNUAL REPORT FY 2010/2011 199

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 2 - Landward Defencefor the year ended 31 March 2011Details per Sub-Programme2.1 Strategic DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000369 6882 946784-Shifting ofFundsR'0002010/11 2009/10VarianceR'000--------VirementR'00019 6191 426131 60314FinalAppropriationR'000389 3074 372132 38714ActualExpenditureR'000389 3074 372132 38714Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'000335 7504 9849 27382.2 Infantry CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets2 988 138330 3002 175-59 3157 1323 3171 9493 047 453337 4325 4921 9493 047 453337 4325 4921 949--------100.0%100.0%100.0%100.0%2 225 595843 8816 3891 0422.3 Armour CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets288 9955 160464-4 052(2 208)162218293 0472 952626218293 0472 952626218--------100.0%100.0%100.0%100.0%209 69029 6529681172.4 Artilery CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets291 98612 325791-11 661769(626)696303 64713 094165696303 64713 094165696--------100.0%100.0%100.0%100.0%219 623106 9341 4443722.5 Air Defence ArtileryCapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets5 4941 820652-204 811(466)(256)54210 3051 35439654210 3051 35439654--------100.0%100.0%100.0%100.0%155 221232 92149028ActualExpenditureR'000335 7504 9849 27382 225 595843 8816 3891 042209 69029 652968117219 623106 9341 444372155 221232 92149028200ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 2 - Landward Defence (continued)for the year ended 31 March 2011Details per Sub-Programme2.6 Engineering CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000506 0012 3771 620-Shifting ofFundsR'0002010/11 2009/10VarianceR'000--------VirementR'000(19 760)(495)(440)97FinalAppropriationR'000486 2411 8821 18097ActualExpenditureR'000486 2411 8821 18097Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'000352 9342 2821 32552ActualExpenditureR'000352 9342 2821 325522.7 Operational IntelligenceCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets200 21675 699308-(45 387)(1 123)(134)11154 82974 57617411154 82974 57617411--------100.0%100.0%100.0%100.0%112 516151 9602636112 516151 96026362.8 Support CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets2 561 83152 55524 838-(160 932)1 10452 5979482 400 89953 65977 4359482 400 89953 65977 435948--------100.0%100.0%100.0%100.0%2 017 817944 75158 5665072 017 817944, 75158 5665072.9 General Training CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets369 9002 9734 162-(20 289)(1 576)(259)293349 6111 3973 903293349 6111 3973 903293--------100.0%100.0%100.0%100.0%261 5251 9276 010156261 5251 9276 01015695 7483 10474195 7483 104741-2.10 Command And ControlCapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets127 7983 456100-150(890)1981127 9482 5662981127 9482 5662981--------100.0%100.0%100.0%100.0%-ANNUAL REPORT FY 2010/2011 201

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 2 - Landward Defence (continued)for the year ended 31 March 2011Details per Sub-Programme2.11 Signal CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000750 7354 96918 310-Shifting ofFundsR'000VirementR'00054 034(1 640)(13 783)352010/11 2009/10FinalAppropriationR'000804 7693 3294 52735ActualExpenditureR'000804 7693 3294 52735VarianceR'000--------Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'000620 2483 73121 65619ActualExpenditureR'000620 2483 73121 65619Total9 009 566- 286 002 9 295 568 9 295 568- 100.0% 9 042 226 9 042 226202ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 2 - Landward Defence (continued)for the year ended 31 March 2011Program 2 Per EconomicclassificationCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayment for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'0006 798 8031 661 979--414 36239 000-41 218-6754 040-51--46-9 009 566Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10----VirementR'000492 235(384 961)-FinalAppropriationR'0007 291 0381 277 018--414 36239 000-43 251-158225 630-795-4 3169 295 568ActualExpenditureR'0007 291 0381 277 018--414 36239 000-43 251-158225 630-795-4 3169 295 568VarianceR'000--------------2 033-91171 590-744--(46)4 316286 002----Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%100.0%0.0%100.0%0.0%100.0%100.0%0.0%100.0%0.0%0.0%0.0%100.0%100.0%FinalAppropriationR'0005 331 5791 275 088--2 286 916--39 211-116107 009-2 3079 042 226ActualExpenditureR'0005 331 5791 275 088--2 286 916--39 211-116107 009-2 3079 042 226----------------------------------------------ANNUAL REPORT FY 2010/2011 203

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 3 - Air Defencefor the year ended 31 March 2011Details per Sub-Programme3.1 Strategic DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'00016 987114253-Shifting ofFundsR'000----VirementR'000(660)93(110)9602010/11 2009/10FinalAppropriationR'00016 327207143960ActualExpenditureR'00016 327207143960VarianceR'000----Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'00013 057-668953.2 Operational DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets99 7592 090665-----29 426-(591)150129 1852 09074150129 1852 09074150----100.0%100.0%100.0%100.0%139 994-1 281153.3 Helicopter CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets660 602271 9811 845-----(130 453)(22 829)(783)20530 149249 1521 06220530 149249 1521 06220----100.0%100.0%100.0%100.0%487 846236 5832 705280 957(49)(4 550)361 128260 2802 716361 128260 2802 716336 4042,378 9652 715ActualExpenditureR'00013 057-66895139 994-1 28115487 846236 5832 7052336 4042,378 9652 715-3.4 Transport And MaritimeCapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets280 171260 3297 266------------100.0%100.0%100.0%0.0%-3.5 Air Combat CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets260 145520 4074 863-----(20 543)24(1 903)17239 602520 4312 96017239 602520 4312 96017----100.0%100.0%100.0%100.0%182 8322,346 4546 6822182 8322,346 4546 6822204ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 3 - Air Defence (continued)for the year ended 31 March 2011Details per Sub-Programme3.6 Operational Support AndIntelligence CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000190 64052 362526-Shifting ofFundsR'000----VirementR'00011 9717052 172132010/11 2009/10FinalAppropriationR'000202 61153 0672 69813ActualExpenditureR'000202 61153 0672 69813VarianceR'000----Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'000140 05462 3482 18813.7 Command And ControlCapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets199 00477 622782-----20 40517 755118219 40977 6238 537118219 40977 6238 537118----100.0%100.0%100.0%100.0%183 97938 0081 910123.8 Base Support CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets1 308 98012 3072 125-----34 161(1 557)13 6802701 343 14110 75015 8052701 343 14110 75015 805270----100.0%100.0%100.0%100.0%1 097 7299, 3359 714274 343626(252)49 3166826449 3166826431 6261 809431ActualExpenditureR'000140 05462 3482 1881183 97938 0081 910121 097 7299 3359 7142731 6261 809431-3.9 Command PostCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets44 97356316------------100.0%100.0%100.0%0.0%-ANNUAL REPORT FY 2010/2011 205

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 3 - Air Defence (continued)for the year ended 31 March 2011Details per Sub-Programme3.10 Training CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000375 940223 9974 194-Shifting ofFundsR'000----VirementR'000(21 698)245(2 668)3 4472010/11 2009/10FinalAppropriationR'000354 242224 2421 5263 447ActualExpenditureR'000354 242224 2421 5263 447VarianceR'000----Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'000276 214106 7858393423.11Technical Support ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets651 3411 6192 156-----(55 477)3314 325427595 8641 9506 481427595 8641 9506 481427----100.0%100.0%100.0%100.0%537 5581 8974 61342Total5 536 417- (47 481) 5 488 936 5 488 936- 100.0% 8 643 761ActualExpenditureR'000276 214106 785839342537 5581 8974 613428 643 761206ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 3 - Air Defence (continued)for the year ended 31 March 2011Program 3 Per EconomicclassificationCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayment for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'0002 416 9461 671 596--1 407 3582 090-13 436--20 437-4 554-5 536 417Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10-ActualExpenditureR'0002 350 0931 690 881--1 384 003VarianceR'000-------FinalAppropriationR'0002 350 0931 690 881--1 384 0032 090-14 381-3739 316-2 613--1005 4225 488 936--------VirementR'000(66 853)19 285--(23 355)--945-3718 879-(1 941)--1005 422(47 481)2 090-14 381-3739 316-2 613--1005 4225 488 936Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%100.0%0.0%100.0%0.0%100.0%100.0%0.0%100.0%0.0%0.0%100.0%100.0%100.0%FinalAppropriationR'0001 885 0781 542 215--5 167 580--14 604--33 691--10-455388 643 761ActualExpenditureR'0001 885 0781 542 215--5 167 580--14 604--33 691--10-455388 643 761---------------------------------------ANNUAL REPORT FY 2010/2011 207

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 4 - Maritime Defencefor the year ended 31 March 2011Details per Sub-Programme4.1 Maritime Combat CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000308 558213 557233-Shifting ofFundsR'0002010/11 2009/10ActualExpenditureR'000344 720186 9681 86619VarianceR'000--------VirementR'00036 162(26 589)1 63319FinalAppropriationR'000344 720186 9681 86619Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'000244 384209 261822154.2 Maritime Logistic SupportCapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets406 253178 2992 269-(16 197)6 3948 66413390 056184 69310 93313390 056184 69310 93313--------100.0%100.0%100.0%100.0%326 318145 99515 668104.3 Maritime Training CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets272 452-972-38 693438143119311 1454381 115119311 1454381 115119--------100.0%100.0%100.0%100.0%244 16758749934.4 Base Support CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets516 076-41 836-(24 534)2 659(9 763)254491 5422 65932 073254491 5422 65932 073254--------100.0%100.0%100.0%100.0%423 7773 24254 7872004.5 Maritime DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets390 87923 0093 908-(16 289)(19 706)9 062440374 5903 30312 970440374 5903 30312 970440--------100.0%100.0%100.0%100.0%313 7107 3416 682346Total2 358 301- (8 385) 2 349 916 2 349 916- 100.0% 1 997 454ActualExpenditureR'000244 384209 26182215326 318145 99515 66810244 1675874993423 7773 24254 787200313 7107 3416 6823461 997 454208ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 4 - Maritime Defence (continued)for the year ended 31 March 2011Program 4 Per EconomicclassificationCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayment for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'0001 309 929584 289--249 479142 377-23 009-29 85618 002-1 160--200-2 358 301Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10-FinalAppropriationR'0001 378 280533 773--222 834148 377-6 850-15 46243 032-463ActualExpenditureR'0001 378 280533 773--222 834148 377-6 850-15 46243 032-463-8452 349 916VarianceR'000-----------VirementR'00068 351(50 516)--(26 645)6 000-(16 159)-(14 394)25 030-(697)--(200)845(8 385)-8452 349 916----Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%100.0%0.0%100.0%0.0%100.0%100.0%0.0%100.0%0.0%0.0%0.0%100.0%100.0%FinalAppropriationR'0001,047 487504 869--249 499104 853-12 074-33 25644 752-6641 997 454ActualExpenditureR'0001 047 487504 869--249 499104 853-12 074-33 25644 752-6641 997 454------------------------------------------------ANNUAL REPORT FY 2010/2011 209

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 5 - Military Health Supportfor the year ended 31 March 2011Details per Sub-Programme5.1 Strategic DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000185 38310 3012 346-Shifting ofFundsR'000----VirementR'0005 632(6 313)(770)2712010/11 2009/10FinalAppropriationR'000191 0153 9881 576271ActualExpenditureR'000191 0153 7681 576271VarianceR'000-220--Expenditure as% of finalappropriation%100.0%94.5%100.0%100.0%FinalAppropriationR'000162 8743 3722 8392 9845.2 Mobile Military HealthSupportCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets107 26223 5752 453-----(19 893)(156)(1 706)1 24287 36923 4197471 24287 36923 4197471 242----100.0%100.0%100.0%100.0%72 0818671 13613 6785.3 Area Military HealthServiceCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets980 02124012 510-----(36 872)3 9534 883122943 1494 19317 393122943 1494 19317 393122----100.0%100.0%100.0%100.0%807 2101 92713 5641 3425.4 Specialist/Tertiary HealthServiceCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets934 86017027 756-----40 5624 10529 787986975 4224 27557 543986975 4224 27557 543986----100.0%100.0%100.0%100.0%828 9182 92834 11310 849ActualExpenditureR'000162 8743 3122 8392 98472 0818671 13613 678807 2101 92713 5641 342828 9182 92834 11310 849210ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 5 - Military Health Support (continued)for the year ended 31 March 2011Details per Sub-Programme5.5 Product Support CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000214 131931 500-Shifting ofFundsR'0002010/11 2009/10FinalAppropriationR'000166 838662374-ActualExpenditureR'000166 838662374-VarianceR'000--------VirementR'000(47 293)569(1 126)-Expenditure as% of finalappropriation%100.0%100.0%100.0%0.0%FinalAppropriationR'000147 01926922 4981ActualExpenditureR'000147 01926922 49815.6 Base Support CapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets207 261812190-13 0874509770220 3481 26228770220 3481 26228770--------100.0%100.0%100.0%100.0%183 84570711 230771183 84570711 2307715.7 Military Health TrainingCapabilityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets335 5495652,591-106 7251872 1624442 2747524 7534442 2747524 7534--------100.0%100.0%100.0%100.0%252 8101128 30442252 8101128 30442Total3 049 569- 100 765 3 150 334 3 150 114220 100.0% 2 608 189 2 608 129ANNUAL REPORT FY 2010/2011 211

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 5 - Military Health Support (continued)for the year ended 31 March 2011Program 5 Per EconomicclassificationCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayment for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'0002 081 579882 888--24 700-58010 476-10148 534-554100-57-3 049 569Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10-VirementR'000(1 954)63 902-FinalAppropriationR'0002 079 625946 790--24 700-58013 271-92681 676--71--2 6953 150 334ActualExpenditureR'0002 079 625946 790--24 700-36013 271-92681 676--71--2 6953 150 114VarianceR'000-220-220------------2 795-82533 142-(554)(29)-(57)2 695100 765--------Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%0.0%62.1%100.0%0.0%100.0%100.0%0.0%0.0%100.0%0.0%0.0%100.0%100.0%FinalAppropriationR'0001 666 774787 983--1 771-4007 910-19 98093 631-7329 6672 608 189ActualExpenditureR'0001 666 774787 983--1 771-3407 910-19 98093 631-7329 6672 608 129-------------------------------------212ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 6 - Defence Intelligencefor the year ended 31 March 2011Details per Sub-Programme6.1 Defence IntelligenceStrategic DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'0001 488Shifting ofFundsR'0002010/11 2009/10FinalAppropriationR'000156ActualExpenditureR'000156VarianceR'000Expenditure as% of finalappropriation%100.0%0.0%0.0%0.0%FinalAppropriationR'0001 360ActualExpenditureR'0001 360-------VirementR'000(1 332)-------------------(655)-101482396 779301482396 779301809391 540157809391 540157-6.2 OperationsCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets1 137396 779200------------100.0%100.0%100.0%0.0%-190 3707 9632 505190 3707 9632 505-6.3 Defence IntelligenceSupport ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets249 4814 2813 247-----(27 760)3 5673 3145221 7217 8486 5615221 7217 8486 5615----100.0%100.0%100.0%100.0%-Total656 613- (22 760) 633 853 633 853- 100.0% 594 704594 704ANNUAL REPORT FY 2010/2011 213

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 6 - Defence Intelligence (continued)for the year ended 31 March 2011Program 6 Per EconomicclassificationCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayment for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'000229 92822 178--396 779--4 281--3 447-656 613Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10-VirementR'000(24 626)(5 121)---3 567--3 415FinalAppropriationR'000205 30217 057--396 779--7 848--6 862-5633 853ActualExpenditureR'000205 30217 057--396 779--7 848--6 862-5633 853VarianceR'000----------------5(22 760)----Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%0.0%0.0%100.0%0.0%0.0%100.0%0.0%0.0%0.0%0.0%0.0%100.0%100.0%FinalAppropriationR'000173 34219 197--391 540--7 963--2 662-594 704ActualExpenditureR'000173 34219 197--391 540--7 963--2 662-594 704-------------------------------------------------------------214ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 7 - General Supportfor the year ended 31 March 2011Details per Sub-Programme7.1 Joint Logistic ServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'0001 405 3787 951469 389-Shifting ofFundsR'000----VirementR'000(253 182)3 556(154 999)2802010/11 2009/10FinalAppropriationR'0001 152 19611 507314 390280ActualExpenditureR'0001 152 19611 507314 390280VarianceR'000----Expenditure as% of finalappropriation%100.0%100.0%100.0%100.0%FinalAppropriationR'000960 4077 542631 7272617.2 Command AndManagement InformationServicesCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets767 79482 35410 596-----(82 838)(62)4 8164684 95682 29215 4124684 95682 29215 4124----100.0%100.0%100.0%100.0%671 756107 36050 94247.3 Military PoliceCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets398 9615507 717-----2 2571 4211 08816401 2181 9718 80516401 2181 9718 80516----100.0%100.0%100.0%100.0%318 4451 91124 48315(12)4357 7524357 75265258 19314ActualExpenditureR'000960 4077 542631 727261671 756107 36050 9424318 4451 91124 4831565258 19314-7.4 Technology DevelopmentCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets16357 752-----------------100.0%100.0%0.0%0.0%-ANNUAL REPORT FY 2010/2011 215

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 7 - General Support (continued)for the year ended 31 March 2011Details per Sub-Programme7.5 Departmental SupportCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'00072 260544 068Shifting ofFundsR'000----VirementR'00021 836--134 3102010/11 2009/10FinalAppropriationR'00094 096544 068-134 310ActualExpenditureR'00094 096544 068-134 310VarianceR'000------Expenditure as% of finalappropriation%100.0%100.0%0.0%100.0%FinalAppropriationR'00088 610498 755-5 517ActualExpenditureR'00088 610498 755-5 5177.6 British Peace Support AndTraining TeamCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets7 931(5 596)2 3352 335100.0%0.0%0.0%0.0%11 33611 336--------------------------Total4 132 717- (327 105) 3 805 612 3 805 612- 100.0% 3 637 343 3 637 343216ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 7 - General Support (continued)for the year ended 31 March 2011Program 7 Per EconomicclassificationCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayment for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'000967 9321 684 408--438 288544 068-10 319-440 02636 792-10 884-4 132 717Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10----VirementR'0005 868(323 403)---4 915-(211 001)13 431-48 463--12134 610(327 105)FinalAppropriationR'000973 8001 361 005--438 288544 068-15 234-229 02550 223-59 347--12134 6103 805 612ActualExpenditureR'000973 8001 361 005--438 288544 068-15 234-229 02550 223-59 347--12134 6103 805 612VarianceR'000----------------Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%100.0%0.0%100.0%0.0%100.0%100.0%0.0%100.0%0.0%0.0%100.0%100.0%100.0%FinalAppropriationR'000769 9941 280 625--365 073498 755-9 933-544 267162 899-5 7973 637 343ActualExpenditureR'000769 9941 280 625--365 073498 755-9 933-544 267162 899-5 7973 637 343---------------------------------------------ANNUAL REPORT FY 2010/2011 217

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 8 - Force Employmentfor the year ended 31 March 2011Details per Sub-Programme2010/11 2009/10VarianceR'000Expenditure as% of finalappropriation%FinalAppropriationR'00054 1815 8481 085ActualExpenditureR'00054 1815 8481 085-8.1 Strategic DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'00084 3805 6221 764-Shifting ofFundsR'000--------VirementR'000(10 757)(2 991)392-FinalAppropriationR'00073 6232 6312 156-ActualExpenditureR'00073 6232 6312 156-100.0%100.0%100.0%0.0%-162 8711 8554 955162 8711 8554 955-8.2 Operational DirectionCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets236 7724 7337 369-(14 238)(3 551)(3 029)20222 5341 1824 34020222 5341 1824 34020--------100.0%100.0%100.0%100.0%-278 607125 36913 242278 607125 36913 242-8.3 Special OperationCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets376 85997 88914 042-(19 607)33910 701117357 25298 22824 743117357 25298 22824 743117--------100.0%100.0%100.0%100.0%-(132 903)-(1 622)892 61333 13533 851892 61333 13533 851981 72733 13629 140980 77833 13629 140-8.4 Regional SecurityCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets1 025 51633 13535 473------------100.0%100.0%100.0%0.0%-218ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 8 - Force Employment (continued)for the year ended 31 March 2011Details per Sub-Programme2010/11 2009/10ActualExpenditureR'000455 139VarianceR'000Expenditure as% of finalappropriation%FinalAppropriationR'000143 172-8 410ActualExpenditureR'000143 172-8 410-8.5 Support To The PeopleCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assetsAdjustedAppropriationR'000339 621Shifting ofFundsR'000----VirementR'000115 518-47 2458FinalAppropriationR'000455 139-47 2458-47 2458-------100.0%0.0%100.0%100.0%-(649)-(1 732)10 3463 9752 31910 3463 9752 31942 648-1 24342 648-1 243-8.6 Defence CapabilityManagementCurrent paymentTransfers and subsidiesPayment for capital assetsPayment for financial assets10 9953 9754 051------------100.0%100.0%100.0%0.0%-Total2 282 196- (16 739) 2 265 457 2 265 457- 100.0% 1 887 489 1 886 540ANNUAL REPORT FY 2010/2011 219

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21APPROPRIATION STATEMENTDetail per programme 8 - Force Employment (continued)for the year ended 31 March 2011Program 8 Per EconomicclassificationCurrent paymentsCompensation of employeesGoods and servicesInterest and rent on landTransfers and subsidiesProvinces & municipalitiesDepartmental agencies & accountsUniversities & technikonsForeign governments & internationalorganisationsPublic corporations & private enterprisesNon-profit institutionsHouseholdsGifts and donationsPayment for capital assetsBuildings & other fixed structuresMachinery & equipmentHeritage assetsSpecialised military assetsBiological assetsLand & subsoil assetsSoftware & other intangible assetsPayment for financial assetsTotalAdjustedAppropriationR'0001 195 921878 222--129 3543 975-12 025-12 57447 772-2 353-2 282 196Shifting ofFundsR'000Appropriation per economic classification2010/11 2009/10-VirementR'000(11 312)(51 324)-FinalAppropriationR'0001 184 609826 898--129 3543 975-5 822-5, 565105 577-3 512-1452 265 457ActualExpenditureR'0001 184 609826 898--129 3543 975-5 822-5 565105 577-3 512-1452 265 457VarianceR'000---------(6 203)-(7 009)57 805-1 159-------------145(16 739)Expenditure as% of finalappropriation%100.0%100.0%0.0%0.0%100.0%0.0%0.0%100.0%0.0%100.0%0.0%100.0%100.0%0.0%100.0%0.0%0.0%0.0%100.0%100.0%FinalAppropriationR'000881 324781 882--156 811--9 397-1 47556 600-1 887 489ActualExpenditureR'000881 324780 933--156 811--9 397-1 47556 600-1 886 540-----------------------------------------------------220ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21NOTES TO THE APPRORIATION STATEMENTfor the year ended 31 March 20111. Detail of transfers and subsidies as per Appropriation Act (after Virement):Detail of these transactions can be viewed in note 6 to Transfers and subsidies and Annexure 1 (A-E) to the AnnualFinancial 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 financial transactions in assets and liabilities:Detail of these transactions per programme can be viewed in note 5 to Financial transactions in assets and liabilitiesto the Annual Financial Statements.4. Explanations of material variances from Amounts Voted (after Virement):4.1 Per programme:Per programmeFinalAppropriationR’000ActualExpenditureR’000VarianceR’000Variance as a %of Final Approp.%Military Health Support 3 150 334 3 150 114 2200.01%The variance of R220 000 under spending is on Transfers Payments to the Regular Force Medical ContinuationFund that did not occur and have to be surrendered.4.2 Per economic classification:Per economic classificationFinalAppropriationR’000ActualExpenditureR’000VarianceR’000Variance as a %of Final Approp.%Transfers and subsidiesNon-profit institutions 5 407 5 187 2204.07%The variance of R220 000 under spending is on Transfers Payments to the Regular Force Medical ContinuationFund that did not occur and have to be surrendered.4.3 Restatement of prior year figures:Prior year figures have been restated because of additional sub-programmes in the current year.ANNUAL REPORT FY 2010/2011 221

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21STATEMENT OF FINANCIAL PERFORMANCEfor the year ended 31 March 2011REVENUENote 2010/112009/10R’000R’000Annual appropriationDepartmental revenueTOTAL REVENUE1230 442 591689 68831 132 27931 325 256699 94932 025 205EXPENDITURECurrent expenditureCompensation of employeesGoods and servicesTotal current expenditure3416 597 0988 890 70325 487 80112 705 5798 069 33220 774 911Transfers and subsidies63 888 0179 363 427Expenditure for capital assetsTangible capital assetsSoftware and other intangible assetsTotal expenditure for capital assets77899 422132899 5541 136 2101401 136 350Payments for financial assets5166 99949 559TOTAL EXPENDITURE30 442 37131 324 247NET SURPLUS FOR THE YEAR689 908700,958Reconciliation of Net Surplus for the yearVoted FundsDepartmental revenueNET SURPLUS FOR THE YEAR1516220689 688689 9081 009699 949700 958222ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21STATEMENT OF FINANCIAL POSITIONas at 31 March 2011ASSETSNote 2010/112009/10R’000R’000Current assetsUnauthorised expenditureFruitless and wasteful expenditureCash and cash equivalentsPrepayments and advancesReceivablesLoans8910111214740 82960 9182958 60774 964533 94912 362915 54960 91892770 95192 237678 15412 362Non-current assetsInvestments1375 00075 00075 00075 000TOTAL ASSETS815 829990 549LIABILITIESCurrent liabilitiesVoted funds to be surrendered to the Revenue FundDepartmental revenue to be surrendered to theRevenue FundBank overdraftPayables15161718598 9132204 139538 00056 554784 1451 0092 371737 69543 070TOTAL LIABILITIES598 913784 145NET ASSETS216 916206 404Represented by:Capitalisation ReservesRecoverable revenue75 000141 91675 000131 404TOTAL216 916206 404An amount of R6 135 215 disclosed as non-current payables in the 2008/09 financial statements has beenreclassified as current payables.ANNUAL REPORT FY 2010/2011 223

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21STATEMENT OF CHANGES IN NET ASSETSfor the year ended 31 March 2011ASSETSNote 2010/112009/10R’000R’000Capitalisation ReservesOpening balanceOther movementsClosing balance75 000-75 00075 000-75 000Recoverable revenueOpening balanceTransfersIrrecoverable amounts written offDebts revisedDebts recovered (included in departmental receipts)Debts raisedClosing balance5.4131 40410 512(3 326)(5 975)(27 135)46 948141 916162 016(30 612)(5 245)(52 725)(25 295)52 653131 404TOTAL216 916206 404224ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21CASH FLOW STATEMENTfor the year ended 31 March 2011ASSETSNote 2010/112009/10R’000R’000CASH FLOWS FROM OPERATING ACTIVITIESReceiptsAnnual appropriated funds receivedDepartmental revenue received1231 109 21130 442 591666 62032 005 72431 325 256680 468Net decrease/(increase) in working capitalSurrendered to Revenue FundCurrent paymentsPayments for financial assetsTransfers and subsidies paidNet cash flows available from operating activities19175 860(688 929)(25 487 801)(166 999)(3 888 017)1 053 325(22 777)(803 273)(20 774 911)(49 559)(9 363 427)991 777CASH FLOWS FROM INVESTING ACTIVITIESPayments for capital assetsProceeds from sale of capital assetsNet cash flows from investing activities(899 554)23 068(876 486)(1 136 350)19 481(1 116 869)CASH FLOWS FROM FINANCING ACTIVITIESIncrease/(decrease) in net assetsNet cash flows from financing activities10 51210 512(30 612)(30 612)Net increase/(decrease) in cash and cash equivalents187 351(155 704)Cash and cash equivalents at beginning of period(666 744)(511 040)Cash and cash equivalents at end of period20(479 393)(666 744)ANNUAL REPORT FY 2010/2011 225

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 20111. Annual Appropriation1.1 Annual AppropriationProgrammesFinalAppropriationR’000Actual FundsReceivedR’000Funds notrequested/not receivedR’000AppropriationReceived2009/10R’000AdministrationForce EmploymentLandward DefenceAir DefenceMaritime DefenceMilitary Health SupportDefence IntelligenceGeneral SupportTotal3 452 9152 265 4579 295 5685 488 9362 349 9163 150 334633 8533 805 61230 442 5913 452 9152 265 4579 295 5685 488 9362 349 9163 150 334633 8533 805 61230 442 591---------2 914 0901 887 4899 042 2268 643 7611 997 4542 608 189594 7043 637 34331 325 2562. Departmental RevenueNote 2010/112009/10R’000R’000Sales of goods and services other than capital assetsFines, penalties and forfeitsInterest, dividends and rent on landSales of capital assetsTransactions in financial assets in liabilitiesTransfer receivedDepartmental revenue collected2.12.22.32.42.52.6263 9894 4592 62823 068144 777250 767689 688209 6063 7242 75019 481236 097228 291699 9492.1 Sales of goods and services other than capital assetsSales of goods and services produced by the departmentAdministrative feesOther salesSales of scrap, waste and other used current goodsTotal255 33815255 3238 651263 989194 41053194 35715 196209 6062.2 Fines, penalties and forfeitsFines4 4593 7242.3 Interest, dividends and rent on landInterest2 6282 7502.4 Sales of capital assetsTangible assetsMachinery and equipmentSpecialised military assets32.232.223 06814022 92819 48119 481-2.5 Transactions in financial assets and liabilitiesOther Receipts including Recoverable RevenueTotal144 777144 777236 097236 097226ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 2011Note2010/11R’0002009/10R’0002.6 Transfers receivedForeign governmentsTotal250 767250 767228 291228 2913. Compensation of employees3.1 Salaries and wagesBasic salaryPerformance awardService BasedCompensative/circumstantialOther non-pensionable allowancesTotal10 483 192111 48048 5981 825 2122 371 25714 839 7398 136 264112 57940 176998 9352 012 69311 300 6473.2 Social contributions3.2.1 Employer contributionsPensionMedicalBargaining councilTotal1 669 04387 6506661 757 3591 331 78272 7783721 404 932Total compensation of employees16 597 09812 705 579Average number of employees77 12574 5604. Goods and servicesAdministrative feesAdvertisingAssets less then R5 000CateringCommunicationComputer servicesConsultants, contractors and agency/outsourced servicesEntertainmentAudit cost – externalInventoryOperating leasesOwned and leasehold property expenditureTravel and subsistenceVenues and facilitiesTraining and staff developmentOther operating expenditureTotal4.14.24.34.44.54.64.74.810 3185 553108 64738 01688 873856 2803 940 2039 17049 9721 787 881259 120580 930728 5019 972118 977298 2908 890 7039 6687 186126 73639 235107 906841 3583 517 8916 99746 4421 591 843222 160485 521703 03414 897110 696237 7628 069 332ANNUAL REPORT FY 2010/2011 227

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 2011Note2010/11R’0002009/10R’0004.1 Assets less than R5 0004Tangible assetsBiological assetsMachinery and equipmentSpecialised military assetsIntangible assetsTotal108 647-101 1157 532-108 647126 73643121 3345 359-126 7364.2 Computer services4SITA computer servicesExternal computer service providersTotal832 67723 603856 280815 99925 359841 3584.3 Consultants, contractors and agency/outsourced services4Business and advisory servicesInfrastructure and planningLaboratory servicesLegal costsContractorsAgency and support/outsourced servicesTotal288 0982 23120 4361 5683 263 031364 8393 940 203311 61310 57711 6986352 834 305349 0633 517 8914.4 Audit cost – external4Regularity auditsPerformance auditsOther auditsTotal41 9681 9586 04649 97241 2274154 80046 4424.5 Inventory4Food and food suppliesFuel, oil and gasOther consumable materialsMaintenance materialStationery and printingMedical suppliesMedicineMilitary storesTotal708 875405 662166 715122 36568 76299 388152 82563 2891 787 881697 727312 415135 503123 54574 16874 483143 33430 6681 591 8434.6 Property payments4Municipal servicesOtherTotal544 56036 370580 930451 06034 461485 521228ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 2011Note2010/11R’0002009/10R’0004.7 Travel and subsistence4LocalForeignTotal516 724211 777728 501460 351242 683703 0344.8 Other operating expenditure4Professional bodies, membership and subscription feesResettlement costsOtherTotal1 52542 190254 575298 2901 91141 677194 174237 7625. Payments for financial assetsOther material losses written offDebts written offForex lossesTotal5.15.25.3158 8732 1995 927166 99942 4091 3895 76149 5595.1 Other material losses written offNature of lossesSettlementLegal fees State AttorneyMotor vehicle lossesOther claims against the stateLegal opinionsLegal feesInterest claimsFruitless and wasteful expenditureSpectacle lossesUnauthorised expenditure written offTotal4 811-1 7144424 06818 540298803128 386158 87329 361741 7657244219 45859277-42 4095.2 Debts written offNature of debts written offDebt transferSalary relatedMedicalState guaranteesEstatesTreatment of private patientsLoss of state propertyLoss of state fundsHumanitarianTotal61 375271781-666-2 199-1 015-1041432111951 389ANNUAL REPORT FY 2010/2011 229

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 2011Note2010/11R’0002009/10R’0005.3 Forex lossesNature of lossForeign exchange losses on operations5 9275 7615.4 Recoverable revenue written offNature of lossesSalary relatedContractual LiabilitiesState guaranteesEstatesMotor vehicle accidentsLoss of state propertySales per tenderTreatment of state patientsOperations/Marketing SupportPrivate institutions and OtherTotalStat Chg in NA5.15.25.381 84870621 17936352054143 326243 74890103575458-165-825 2455.5 Assets written offNature of write-offTransport assetsComputer equipmentOther machinery and equipmentSpecialised military assetsTotal13 2095244261714 320-----6. Transfers and subsidiesDepartmental agencies and accountsPublic corporations and private enterprisesNon-profit institutionsHouseholdsGifts, donations and sponsorships madeTotalAnnex 1AAnnex 1BAnnex 1CAnnex 1DAnnex 1G3 024 728737 5105 187120 592-3 888 0178 629 128603 6084 342126 349-9 363 4277. Expenditure for capital assetsTangible assetsBuildings and other fixed structuresMachinery and equipmentSpecialised military assetsBiological assets7.17.17.17.1899 422251 203581 38866 760711 136 210599 093454 01583 09210Software and other intangible assetsComputer softwareTotal7.1132132899 5541401401 136 350230ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 20117.1 Analysis of funds utilised to acquire capital assets - 2010/11Voted FundsR’000Aid AssistanceR’000TOTALR’000Tangible assetsBuildings and other fixed structuresMachinery and equipmentSpecialised military assetsBiological Assets899 422251 203581 38866 76071-----899 422251 203581 38866 76071Software and other intangible assetsComputer software132132--132132Total899 554-899 5547.2 Analysis of funds utilised to acquire capital assets - 2009/10Voted FundsR’000Aid AssistanceR’000TOTALR’000Tangible assetsBuildings and other fixed structuresMachinery and equipmentSpecialised military assetsBiological Assets1 136 210599 093454 01583 09210-----1 136 210599 093454 01583 09210Software and other intangible assetsComputer software140140--140140Total1 136 350-1 136 3508. Unauthorised expenditure8.1 Reconciliation of unauthorised expenditureOpening balanceAmounts approved by ParliamentTransfer to receivables for recovery (not approved)Unauthorised expenditure awaiting authorisation/written off8.2 Analysis of unauthorised expenditure awaiting authorisationper economic classificationCurrentTotal8.3 Analysis of unauthorised expenditure awaiting authorisationper typeUnauthorised expenditure incurred not in accordance with thepurpose of the vote or main divisionTotalNote2010/11R’00060 918--60 91860 91860 91860 91860 9182009/10R’000-60 918--60 91860 91860 91860 91860 918The prior year figures were restated with an amount of R40 292 420 which was previously classifiedwithin receivables.ANNUAL REPORT FY 2010/2011 231

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 2011Note2010/11R’0002009/10R’0009. Fruitless and wasteful expenditure9.1 Reconciliation of fruitless and wasteful expenditureOpening balanceLess: Amounts condonedCurrentCapitalTransfers and subsidiesLess: Amounts transferred to receivables for recoveryFruitless and wasteful expenditure awaiting condonement9.2 Analysis of awaiting condonement per economic classificationCurrentTotal10. Cash and cash equivalents927(897)(897)--(1)292929931(4)(4)---927927927Cash on handCash with commercial banksTotal5.15.25.339 51119 09658 60748 28522 66670 951In the 2009/10 financial year, an amount R10 635 773,26 was reclassified from cash on handto staff debtors (salary related). An amount of R3 001 420,95 was also reclassified fromcash on hand to current payables.11. Prepayments and advancesTravel and subsistenceTotal74 96474 96492 23792 23712. ReceivablesLess thanone yearR’000One tothree yearsR’000Older thanthree yearsR’0002010/11TotalR’0002009/10TotalR’000Claims recoverableStaff debtOther debtorsTotal12.1 & Annex 412.212.33 42349 09530 21782 7351 37010 13625 67037 1762 2387 921403 879414 0387 03167 152459 766533 9499 38391 192577 579678 15412.1 Claims recoverableNational departmentsTotal7 0317 0319 3839 383232ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 2011Note2010/11R’0002009/10R’00012.2 Staff debtorsDescriptionSalary relatedStudentsMotor vehicle accidentsDepositsState guaranteesLoss of state moneyDamage to state propertyPrivate patientsTotal45 02710 1674 5825 0351 3567638513767 15269 1179 1914 2326 1841 4018447514891 192In the 2009/10 financial year, an amount of R10 635 773,26 was reclassified from cash on hand tostaff debtors (salary related).12.3 Other debtorsUnauthorised expenditure not approved by Parliament and tobe written offOperationsContractual liabilitiesAviation servicesSuppliersMotor vehicle accidentsEstatesState guaranteesMedical claimsPrivate patientsMarket supportHumanitarian aidInstitutionsDamage to state propertyMiscellaneousLoss of state moneyFruitless and wasteful expenditureState departmentsSalary overpaymentsSales per tenderTotal299 02961 63160 2214 5911 5174 4378293951 980229636-162834413 828128-9 927-459 766427 41144 99358 5837 6532 1404 1437765862 6482132 8334762304213 7343602911 26135577 579ANNUAL REPORT FY 2010/2011 233

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 2011Note2010/11R’0002009/10R’00013. Investments14. LoansNon-CurrentShares and other equityArmscorTotalAnalysis of non current investmentsOpening balanceClosing balancePublic CorporationsTotalAnalysis of BalanceOpening BalanceClosing Balance75 00075 00075 00075 00012 36212 36212 36212 36275 00075 00075 00075 00012 36212 36212 36212 362This represents a loan to the South African Forces Institute (SAFI) for the purpose of bridging finance.This loan is unsecured. The interest rate is fixed at 0% per annum and was payable by March 2007.Refer to Note 31 for the details on impairment of the SAFI loan.15. Voted funds to be surrendered to the Revenue FundOpening balanceTransfer from Statement of Financial PerformanceAdd: Unauthorised expenditure for current yearVoted funds not requested/not receivedPaid during the yearClosing balance81.11 009220--(1 009)22097 7411 009--(97 741)1 00916. Departmental revenue to be surrendered to the Revenue FundOpening balanceTransfer from Statement of Financial PerformancePaid during the yearClosing balance2 371689 688(687 920)4 1397 954699 949(705 532)2 37117. Bank overdraftConsolidated Paymaster General accountTotal538 000538 000737 695737 695234ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 2011Note2010/11R’0002009/10R’00018. Payables - currentAmounts owing to other entitiesAdvances receivedClearing accountsOther payablesTotalAnnexure 518.118.218.32013 8001 05941 67556 55424-2 84440 20243 07018.1 Advances receivedNational Rural Youth Service Corps ProgrammeTotal13 80013 800--18.2 Clearing accountsSubsistence and Travel Cash Voucher ReceiptForeign Subsistence and Travel not included in Subsistenceand Travel Cash Voucher Receipt aboveTotal18.3 Other payablesUnclaimed salariesDebtors in creditOther payablesState guaranteesSuppliersTotal1 059-1 0599 9534 20016 9034 6605 95941 6752 791532 84414 7582 88814 7214 9492 88640 202For the financial year 2009/10 an amount of R7 461 654,50 has been reclassified from debtors in credit toother payables and an amount of R832 061,86 has been reclassified from debtors in credit to suppliers.An amount of R3 001 420,95 was reclassified from cash on hand to other payables (unclaimed salaries) forthe 2009/10 financial year.19. Net cash flow available from operating activitiesNet surplus/(deficit) as per Statement of Financial PerformanceAdd back non cash/cash movements not deemed operating activities(Increase)/decrease in receivables – current(Increase)/decrease in prepayments and advances(Increase)/decrease in other current assetsIncrease/(decrease) in payables – currentProceeds from sale of capital assetsExpenditure on capital assetsSurrenders to Revenue FundVoted funds not requested/not receivedOther non-cash itemsNet cash flow generated by operating activities689 908363 417144 20517 27389813 484(23 068)899 554(688 929)--1 053 325700 958290 819(24 816)(2 073)44 108(19 481)1 136 350(803 273)--991 777ANNUAL REPORT FY 2010/2011 235

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Notes to the Annual Financial Statementsfor the year ended 31 March 201120. Reconciliation of cash and cash equivalents for cash flow purposesConsolidated Paymaster General accountCash on handCash with commercial banks (Local)TotalNote2010/11R’000(538 000)39 51119 096(479 393)2009/10R’000(737 695)48 28522 666(666 744)236ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 2011These amounts are not recognised in the financial statements, and are disclosed to enhance the usefulness of the financial statementsand to comply with the statutory requirements of the Public Finance Management Act, Act 1 of 199921. Contingent liabilitiesLiable toNatureNote 2010/11 2009/10R’000R’000Housing loan guaranteesEmployeesClaims against the departmentOther departments(interdepartmental unconfirmed balances)Environmental rehabilitation liabilityOtherTotalAnnexure 3AAnnexure 3BAnnexure 5Annexure 3BAnnexure 3B15 773858 2727 077129 372-1 010 49419 954428 72022 197181 84511 815664 531Included in the claims against the department is an amount of 35 563 211 euro in respect of foreign currency claims.The total outstanding balance as on 31 March 2011 is R343 281 008 (exchange rate as at 31 March 2011 was R9,6527)22. CommitmentsCurrent expenditureApproved and contractedApproved but not yet contractedCapital expenditure (including transfers)Approved and contractedApproved but not yet contracted1 788 3161 892 2273 680 54374 783119 924194 7072 855 899862 6103 718 509141 00954 685195 694Total Commitments3 875 2503 914 203Commitments longer than 1 yearCurrent expenditureApproved and contractedApproved but not yet contractedCapital expenditureApproved and contractedApproved but not yet contracted97 605100 337197 9423 86153 8662 855 899862 6103 718 509141 00954 685195 69423. Accruals2010/112009/10Listed by economic classification30 DaysR’00030+ DaysR’000TotalR’000TotalR’000Goods and servicesInterest and rent on landTransfers and subsidiesCapital assetsOtherTotal193 995-8 2372 258-204 490149 860--1 612-151 472343 855-8 2373 870-355 962333 929-9 50968956344 183ANNUAL REPORT FY 2010/2011 237

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 2011Listed by programme levelNote 2010/11 2009/10R’000R’000AdministrationLandward DefenceAir DefenceMaritime DefenceMilitary Health SupportDefence IntelligenceJoint SupportForce EmploymentTotal64 56622 09488 51412 303105 2785726 04637 104355 96245 43784, 82015 5529 42191 15043622 15475 213344 183The opening balance has been restated by an amount of (R42 568 662,61) due to a change in estimate.Confirmed balances with departmentsConfirmed balances with other government entitiesTotal24. Employee benefitsLeave entitlementService bonus (Thirteenth cheque)Capped leave commitmentsOtherTotal65 905-65 905359 566464 437987 560182 8941 994 4575 570-5 570343 051418 228985 049219 8591 966 187Leave entitlement with negative balances amounting to R31 194 860 for the 2010/11 financial year and R40 805 209for the 2009/10 financial year were included in the figures above.25. Lease Commitments25.1 Operating leases expenditure2010/11SpecialisedmilitaryassetsR'000LandR'000Buildings andother fixedstructuresR'000Machineryand equipmentR'000TotalR'000Not later than 1 yearLater than 1 year and not laterthan 5 yearsLater than five yearsTotal lease commitments----12 6003 85722716 684180 755428 478340 780950 013----193 355432 335341 007966 697238ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 20112009/10SpecialisedmilitaryassetsR'000LandR'000Buildings andother fixedstructuresR'000Machineryand equipmentR'000TotalR'000Not later than 1 yearLater than 1 year and not laterthan 5 yearsLater than five yearsTotal lease commitments----11 2553 00519214 452167 104364 620296 490828 214----178 359367 625296 682842 666The amount disclosed in the financial year 2009/2010 with regards to Operating leases has been restated fromR662 407 000 to R842 665 407. This was due to the extention of lease contracts which existed in the prior year.The Department has open-ended contracts on Land and properties and are mainly used as shooting ranges andcommunication sites.25.2 Finance leases expenditure2010/11SpecialisedmilitaryassetsR'000LandR'000Buildings andother fixedstructuresR'000Machineryand equipmentR'000TotalR'000Not later than 1 yearLater than 1 year and not laterthan 5 yearsLater than five yearsTotal lease commitmentsLESS: finance costsTotal present value of lease liabilities------------------13 3206 467-19 78755019 23713 3206 467-19 78755019 2372009/10SpecialisedmilitaryassetsR'000LandR'000Buildings andother fixedstructuresR'000Machineryand equipmentR'000TotalR'000Not later than 1 yearLater than 1 year and not laterthan 5 yearsLater than five yearsTotal lease commitmentsLESS: finance costsTotal present value of lease liabilities------------------29 4809 773-39 2531 32037 93329 4809 773-39 2531 32037 933The amount disclosed in the 2009/10 financial year for Finance Lease Expenditure has been restated from R37 262 000to R37 932 128 due to an understatement of the commitment for pool cell phones in the lease register.Assumptions:1. Discounting rate: Repo rate at 5.5% in 2011 and 6.5% in 2010.ANNUAL REPORT FY 2010/2011 239

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201126. Receivables for departmental revenueNote 2010/11 2009/10R’000R’000Sales of goods and services other than capital assetsFines, penalties and forfeitsSale of capital assetsTransactions in financial assets and liabilitiesTransfers received (incl conditional grantsto be repaid by prov depts)Total26.1 Analysis of receivables for departmental revenueOpening balanceLess: Amounts receivedAdd: Amounts recognisedClosing balance27. Irregular expenditure27.1 Reconciliation of irregular expenditureOpening balanceAdd: Irregular expenditure - relating to prior yearAdd: Irregular expenditure - relating to current yearLess: Amounts condonedLess: Amounts recoverable (not condoned)Less: Amounts not recoverable (not condoned)Irregular expenditure awaiting condonementAnalysis of awaiting condonement per age classificationCurrentPrior yearsTotal27.2 Details of Irregular expenditure - Current Year344-25 38356 501172 770254 998310 462400 625345 161254 9981 765 277139799 349(1 522 522)(55 440)-986 803694 888291 915986 803763-22 931126 164160 604310 462351 692466 954425 724310 46265 128723 7311 000 874(24 423)(13)(20)1 765 277991 618773 6591 765 277IncidentProcurement without FinancialAuthority and Government OrderHousing allowanceFinancial lease paymentsA400M Airbus: Day-to-dayPayments were made after thecontract has expiredDeviation from bidding processDeviation from payment processTotalDisciplinary steps taken/criminalproceedingsUnder investigation to determineresponsible officialUnder investigation to determineresponsible officialUnder investigation to determineresponsible officialUnder investigation to determineresponsible officialUnder investigation to determineresponsible officialUnder investigation to determineresponsible officialUnder investigation to determineresponsible official13 90189 8882 564101866467 449224 580799 349240ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201127.3 Details of irregular expenditurecondonedIncidentProcurement without FinancialAuthority and Government OrderLease paymentsHousing AllowanceMilitary DispensationExceeding delegated powersService continued after contracthad expiredOther matters27.4 Details of irregular expenditurerecoverable (not condoned)IncidentAMG Account: Order number 2H209112Incorrect payments to suppliersDouble payment for goods, because of fraudCondoned by (condoningauthority)Central Commercial ProcurementSub-CommitteePractice note 5 of NTAccounting OfficerCommittee of MinistersProsecution and RecoveryCommitteeCentral Commercial ProcurementSub-CommitteeProsecution and RecoveryCommitteeCondoned by (condoningauthority)Chief Air ForceProsecution andRecovery CommitteeProsecution andRecovery CommitteeNote 2010/11 2009/10R’000R’00028 1212 5641 010 728480 9815018601 522 52255 300136455 44027.5 Details of irregular expenditure under investigationIncidentProcurement without Financial Authority and GovernmentOrderContract irregularitiesPayment BMO Payment schedule without authorityA400M Airbus day-to-day operational costsDeviation from paymentExceeding delegation limitAMG AccountDeviation from Bidding processPerformance incentivesOther matters22 6804 0554 22538 027224 5806 859106 306467 449112 002620986 80328. Fruitless and wasteful expenditure28.1 Reconciliation of fruitless and wasteful expenditureOpening BalanceFruitless and wasteful expenditure – relating to prior yearFruitless and wasteful expenditure – relating to current yearLess: Amounts condonedLess: Amounts transferred to receivables for recoveryFruitless and wasteful expenditure awaiting condonement10 537-491(15)(424)10 5894 587-6 065(107)(8)10 537ANNUAL REPORT FY 2010/2011 241

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201128.2 Analysis of awaiting condonement per economicclassificationCurrentCapitalTotalNote 2010/11 2009/10R’000R’0006 3864 20310 5895 9734 56410 53728.3 Analysis of Current Year's Fruitlessand wasteful expenditureIncidentPayment of allowances to members notentitled to itDeviation from State contract resulting inpaying moreCancellation fees paid on different occationsCash withdrawal charges levied twice onthe same amountPayment of interest claim on air servicesPayment of finance for late payment ofinvoices regarding navigation and over flightTotalDisciplinary steps taken/criminal proceedingsStill under investigationStill under investigationStill under investigationStill under investigationStill under investigationStill under investigation115494837849129. Related party transactionsLoans to/from related partiesNon-interest bearing loans to/(from)Interest bearing loans to/(from)Total12 362-12 36212 362-12 362Identification and nature of related party relationshipAs at 31 March 2011 the DOD had the following related parties, namely the:- President of the RSA;- Deputy President of the RSA;- Cabinet of the Government of the RSA, including the Ministers of all National Departments;- National Departments;- Public Entities resorting under the National Departments;- Public Entities resorting under the portfolio of the Minister of Defence and Military Veterans, these being the:- Armaments Corporation of South Africa Limited (Armscor) including subsidiaries, joint ventures or units underits control;- Castle Control Board (CCB);- South African National Defence Force Fund (SANDF Fund); and- Reserve Force Council- Key management personnel of the DOD (members of the Plenary Defence Staff Council); and- All entities under the control, joint control or significant influence of a key management personnel member of theDOD.As per clarification letter from the National Treasury dated 31 March 2009, Department of Defence funds (messes,clubs, regimental funds, etc.) are not regarded as related parties.242ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 2011Related party transactionsThe Department is not aware of any related party transactions (i.e. transactions not at arms length) that occurred duringthe period between the Department and the President of the RSA; the Deputy President of the RSA; the Cabinetof the Government of the RSA, including the Ministers of all National Departments; National Departments and publicentities falling under these departments. Armscor and the Department are not aware of any related party transactionsthat occurred during the period between the related parties other than, the use of six South African Military(SAMIL) vehicles. Four SAMIL 50’s and two SAMIL 100 vehicles, owned by the Department were allocated to Gerotek(Pty) Ltd, a subsidiary of Armscor, several years ago. Gerotek (Pty) Ltd uses these vehicles in its operations at no considerationto the Department. These vehicles are primarily for Defence purposes. Gerotek (Pty) Ltd carries theresponsibility of the maintenance and insurance of the above mentioned vehicles. The age of the vehicles is in excessof 20 years. During the period the following related party transactions occurred between the Department and theCastle Control Board (CCB);- The CCB is mandated in terms of the Castle Management Act, 1993 (Act 207 of 1993), to govern and manage theCastle of Good Hope on behalf of the Minister of Defence and Military Veterans. The CCB is housed and locatedin the Castle of Good Hope, Cape Town.- The following entities and activities occupy or utilise parts of the Castle of Good Hope, at no consideration to theDepartment however in some instances consideration is paid to the CCB:- Die Goewerneur restaurant;- Waterblommetjie restaurant;- Castle Forge;- Carriage rides;- Castle Military Museum;- Souvenir shop;- Iziko Museum of Cape Town;- The Western Cape Army Support Base (forming part of the Department) supplied guards to the CCB to guardthe Castle of Good Hope and to perform ceremonial duties at no charge.- Defence Reserves Provincial Office Western Cape;- SA Heritage Resources Agency (SAHRA);- Good Hope Art Studio;- 5X Reserve Force Regiments.- The Department provides management and advisory services to the CCB at no consideration. The cost to theDepartment for the time and subsistence for these services for the period was R2 373 734 (2009/10: R2 270 696).The Deparment provides management and administrative support to the SANDF Fund at no consideration. The costto the Department for the time spent in providing this support for the period was R25 690 (2009/10: R5 772).TheDepartment is not aware of any related party transactions that might have occurred during the period between theDepartment and the Reserve Force Council. The Department did not identify any related party transaction during theperiod between the Department and its key management personnel, and the entities under the control, joint controlor significant influence of key management personnel of the Department, except for the following:- Major-General R.C. Anderson, a member of key management personnel (PDSC) of the Department is the chairpersonof Murray & Roberts, which provides training services to the Works Regiment of the SANDF at no consideration.ANNUAL REPORT FY 2010/2011 243

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201130. Key management personnelDescriptionPolitical Office Bearers:OfficialsLevel 15 to 16Level 14Family members of key management personnelTotalNo. ofIndividuals3161716Note 2010/11 2009/10R’000R’0003 49919 16613 4843 96040 1095 52418 26210 8832 97837 64731. Impairment and other provisionsPotential irrecoverable debtsImpairmentLoansTotal12 36212 36212 36212 362Other provisionsStaff DebtorsOther DebtorsClaims Recoverable1 584352 9422 238356 7641 612478 6701 397481 679Total369 126494 04132. Movable Tangible Capital AssetsMOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED31 MARCH 2011HERITAGE ASSETSHeritage assetsOpeningbalanceR'000--Current year adjustmentsto prioryear balancesR'000--AdditionsR'000--DisposalsR'000--ClosingbalanceR'000--MACHINERY AND EQUIPMENTTransport assetsComputer equipmentFurniture and office equipmentOther machinery and equipment-----38 655 0277 758 680423 38758 70630 414 254674 089218 85949 4701 726404 034235 175218 40718884115 73939 093 9417 759 132472 66959 59130 802 549SPECIALISED MILITARY ASSETSSpecialised military assets--37 758 67237 758 67231 56731 56780 51980 51937 709 72037 709 720BIOLOGICAL ASSETSBiological assets--3030----3030TOTAL MOVABLE TANGIBLECAPITAL ASSETS-76 413 729705 656315 69476 803 691244The amount disclosed for closing balance is stated at a combination of either the historical cost of an asset, or at thelast purchase price of assets of a similar type grouped together under one National Stock Number (NSN). It alsoexclude assets recorded in manual asset registers as well as asset items for which the National Stock Numbers (NSN)are not yet linked to National Treasury Standard Chart of Accounts (SCOA).ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201132.1 AdditionsADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31MARCH 2011HERITAGE ASSETSHeritage assetsOpeningbalanceR'000--Current year adjustmentsto prioryear balancesR'000--AdditionsR'000--DisposalsR'000--ClosingbalanceR'000--MACHINERY AND EQUIPMENTTransport assetsComputer equipmentFurniture and office equipmentOther machinery and equipment581 388316 07357 5337 712200 070169 4096 4568 09858154 797(73 595)(101 881)(15 872)(6 034)50 192(3 113)(1 789)(289)(10)(1 025)674 089218 85949 4701 726404 034SPECIALISED MILITARY ASSETSSpecialised military assets66 76066 76022 30622 306(54 585)(54 585)(2 914)(2 914)31 56731 567BIOLOGICAL ASSETSBiological assets7171--(71)(71)----TOTAL ADDITIONS TOMOVABLE TANGIBLE CAPITALASSETS648 219191 715(128 251)(6 027)705 656The amount disclosed for non cash additions includes assets purchased through the Special Defence Account, butrecorded in the asset register together with the assets purchased through the General Defence Account.The amount disclosed for work-in-progress comprises differences in Standard Chart of Accounts (SCOA) classificationsas well as differences in additions monetary values between the Financial Management System and the LogisticSystems used for the recording of the Department's assets.The amount disclosed for total additions excludes purchases not yet posted in the logistic systems as well as purchasesfor which the National Stock Numbers (NSN's) are not yet linked to the National Treasury Standard Chart ofAccounts (SCOA).ANNUAL REPORT FY 2010/2011 245

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201132.2 DisposalsDISPOSALS OF MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31MARCH 2011HERITAGE ASSETSHeritage assetsSold for cashR'000--Transfer out ordestroyed orscrappedR'000--Total disposalsR'000--CashreceivedActualR'000--MACHINERY AND EQUIPMENTTransport assetsComputer equipmentFurniture and office equipmentOther machinery and equipment183 918182 22410483076051 25736 183841114 979235 175218 40718884115 739140---140SPECIALISED MILITARY ASSETSSpecialised military assets55 00055 00025 51925 51980 51980 51922 92822 928BIOLOGICAL ASSETSBiological assets--------TOTAL DISPOSAL OF MOVABLETANGIBLE CAPITAL ASSETS238 91876 776315 69423 068The amount disclosed for disposals is not stated at assets historical cost or fair value but at the last purchase price ofassets of a similar type grouped together under one National Stock Number (NSN), and exclude assets for which theNational Stock Number (NSN) are not yet linked to National Treasury Standard Chart of Accounts (SCOA). Theamount disclosed for cash received excludes monies received for assets sold on auction, these monies are disclosedunder another category of Departmental Revenue.246ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201132.3 Movement for 2009/10MOVEMENT IN MOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED31 MARCH 2010HERITAGE ASSETSHeritage assetsOpening balanceR'000--AdditionsR'000--DisposalsR'000--ClosingbalanceR'000--MACHINERY AND EQUIPMENTTransport assetsComputer equipmentFurniture and office equipmentOther machinery and equipment--------------------SPECIALISED MILITARY ASSETSSpecialised military assets--------BIOLOGICAL ASSETSBiological assets--------TOTAL MOVABLETANGIBLE CAPITAL ASSETS----32.4 Minor assetsMOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011Opening balanceCurrent Year Adjustments to Prior YrBalancesAdditionsDisposalsTOTAL MINOR ASSETSSpecialisedmilitaryassetsR'000-2 548 24415 0048132 562 435IntangibleassetsR'000-59--59HeritageassetsR'000-----MachineryandequipmentR'000-5 507 382158 47810 6985 655 162BiologicalassetsR'000-242583297TotalR'000-8 055 927173 54011 5148 217 953Number of R1 minor assetsNumber of minor assets at costTOTAL NUMBER OF MINORASSETS121 3602 213 3432 334 70399113212---496 13829 152 53329 648 67124099339617 83731 366 08831 983 925MINOR ASSETS OF THE DEPARTMENT AS AT 31 MARCH 2010Minor AssetsTOTAL------------Number of R1 minor assetsNumber of minor assets at costTOTAL NUMBER OF MINORASSETS------------------ANNUAL REPORT FY 2010/2011 247

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201133. Intangible Capital AssetsMOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED31 MARCH 2011OpeningbalanceR'000Current yearadjustments to prioryear balancesR'000AdditionsR'000DisposalsR'000ClosingbalanceR'000CAPITALISED DEVELOPMENT COSTS-----COMPUTER SOFTWARE-21 44749915621 790MASTHEADS AND PUBLISHINGTITLES-----PATENTS, LICENCES, COPYRIGHT,BRAND NAMES, TRADEMARKS-----RECIPES, FORMULAE, PROTOTYPES,DESIGNS, MODELS-----SERVICES AND OPERATING RIGHTS-----OTHER INTANGIBLES-----TOTAL INTANGIBLE CAPITAL ASSETS-21 44749915621 790The amount disclosed for closing balance is stated at the last purchase price of assets of a similar type grouped togetherunder one National Stock Number (NSN). It also exclude assets recorded in manual asset registers as well as assetitems for which the National Stock Numbers (NSN) are not yet linked to National Treasury Standard Chart ofAccounts (SCOA).248ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201133.1 AdditionsADDITIONS TO INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011CashR'000Non-cashR'000(Developmentwork-inprogresscurrentcosts)R'000Received current,not paid(Paid currentyear, receivedprior year)R'000TotalR'000CAPITALISED DEVELOPMENT COSTS-----COMPUTER SOFTWARE13256311-499MASTHEADS AND PUBLISHINGTITLES-----PATENTS, LICENCES, COPYRIGHT,BRAND NAMES, TRADEMARKS-----RECIPES, FORMULAE, PROTOTYPES,DESIGNS, MODELS-----SERVICES AND OPERATING RIGHTS-----OTHER INTANGIBLES-----TOTAL ADDITIONS TO INTANGIBLECAPITAL ASSETS13256311-499The amount disclosed as work-in-progress comprises differences in Standard Chart of Accounts (SCOA) classificationsas well as differences in additions monetary values between the Financial Management System and the LogisticSystems used for the recording of the Department's assets. The amount disclosed as total additions excludes purchasesnot yet posted in the logistic systems as well as purchases for which the National Stock Numbers (NSN's) are notyet linked to the National Treasury Standard Chart of Accounts (SCOA).ANNUAL REPORT FY 2010/2011 249

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201133.2 DisposalsDISPOSALS OF INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2011Sold forcashR'000Transfer out ordestroyed orscrappedR'000TotaldisposalsR'000CashreceivedActualR'000CAPITALISED DEVELOPMENT COSTS----COMPUTER SOFTWARE-156156-MASTHEADS AND PUBLISHING TITLES----PATENTS, LICENCES, COPYRIGHT, BRANDNAMES, TRADEMARKS----RECIPES, FORMULAE, PROTOTYPES, DESIGNS,MODELS----SERVICES AND OPERATING RIGHTS----OTHER INTANGIBLES----TOTAL DISPOSAL OF INTANGIBLE CAPITALASSETS-156156-33.3 Movement for 2009/10MOVEMENT IN INTANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED 31 MARCH 2010OpeningbalanceR'000AdditionsR'000DisposalsR'000ClosingbalanceR'000CAPITALISED DEVELOPMENT COSTS----COMPUTER SOFTWARE----MASTHEADS AND PUBLISHING TITLES----PATENTS, LICENCES, COPYRIGHT, BRANDNAMES, TRADEMARKS----RECIPES, FORMULAE, PROTOTYPES, DESIGNS,MODELS----SERVICES AND OPERATING RIGHTS----OTHER INTANGIBLES----TOTAL----250ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201134. Immovable Tangible Capital AssetsMOVEMENT IN IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED31 MARCH 2011OpeningbalanceR'000Current yearadjustments to prioryear balancesR'000AdditionsR'000DisposalsR'000ClosingbalanceR'000BUILDINGS AND OTHER FIXEDSTRUCTURESDwellingsNon-residential buildingsOther fixed structures----102 062--102 062107--10720--20102 149--102 149HERITAGE ASSETSHeritage assets----------LAND AND SUBSOIL ASSETSLandMineral and similar non-regenerativeresourcesINVESTMENT PROPERTYInvestment property-------------------------TOTAL IMMOVABLE TANGIBLECAPITAL ASSETS-102 06210720102 149The amount disclosed for closing balance comprises specialised shipping and storage containers, storage tanks, mobilehomes etcetera, and is stated at the last purchase price of assets of a similar type grouped together under one NationalStock Number (NSN). It also exclude assets recorded in manual asset registers as well as asset items for which theNational Stock Numbers (NSN) are not yet linked to National Treasury Standard Chart of Accounts (SCOA).ANNUAL REPORT FY 2010/2011 251

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201134.1 AdditionsADDITIONS TO IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED31 MARCH 2011CashR'000Non-cashR'000(Capital workin-progresscurrentcosts andfinance leasepayments)R'000Received current,not paid(Paid currentyear, receivedprior year)R'000TotalR'000BUILDINGS AND OTHER FIXEDSTRUCTURESDwellingsNon-residential buildingsOther fixed structures251 203-244 1817 02266--66(251 162)-(244 181)(6 981)----107--107HERITAGE ASSETSHeritage assets----------LAND AND SUBSOIL ASSETSLandMineral and similar non-regenerativeresources---------------INVESTMENT PROPERTYInvestment property----------TOTAL ADDITIONS TO IMMOVABLETANGIBLE CAPITAL ASSETS251 20366(251 162)-10734.2 DisposalsDISPOSALS OF IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED31 MARCH 2011Sold forcashR'000Transfer out ordestroyed orscrappedR'000TotaldisposalsR'000CashreceivedActualR'000BUILDINGS AND OTHER FIXED STRUCTURES12820-DwellingsNon-residential buildingsOther fixed structures--12--8--20---HERITAGE ASSETSHeritage assets--------LAND AND SUBSOIL ASSETSLandMineral and similar non-regenerative resources------------INVESTMENT PROPERTYInvestment property--------TOTAL DISPOSAL OF IMMOVABLE TANGIBLECAPITAL ASSETS12820-252ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201134.3 Movement for 2009/10MOVEMENT IN IMMOVABLE TANGIBLE CAPITAL ASSETS PER ASSET REGISTER FOR THE YEAR ENDED31 MARCH 2010OpeningbalanceR'000AdditionsR'000DisposalsR'000ClosingbalanceR'000BUILDINGS AND OTHER FIXED STRUCTURES----DwellingsNon-residential buildingsOther fixed structures------------HERITAGE ASSETSHeritage assets--------LAND AND SUBSOIL ASSETSLandMineral and similar non-regenerative resources------------INVESTMENT PROPERTYInvestment property--------TOTAL TANGIBLE CAPITAL ASSETS----ANNUAL REPORT FY 2010/2011 253

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21Disclosure notes to the Annual Financial Statementsfor the year ended 31 March 201134.4 Immovable assets valued at R1IMMOVABLE ASSETS VALUED AT R1 IN THE ASSET REGISTER FOR 31 MARCH 2011Buildings andother fixedstructuresRHeritageassetsRLand andsubsoil assetsRInvestmentpropertyRTotalRR1 Immovable assetsTOTAL----------IMMOVABLE ASSETS VALUED AT R1 IN THE ASSET REGISTER FOR 31 MARCH 2010Buildings andother fixedstructuresRHeritageassetsRLand andsubsoil assetsRInvestmentpropertyRTotalRR1 Immovable assetsTOTAL----------Refer to paragraph 1.1.2.12.7 of the Report of the Accounting Officer concerning the non disclosure of Tangibleand Intangible Assets.254ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 1ASTATEMENT OF TRANSFERS TO DEPARTMENTAL AGENCIES AND ACCOUNTSDEPARTMENTS/AGENCY/ACCOUNTAdjusted AppropriationActTRANSFER ALLOCATION TRANSFER2009/10Actual TransferRollOversAdjustmentsTotalAvailable% of Available fundsTransferredFinal AppropriationActR'000R'000 R'000 R'000R'000%R'000Safety and Security Sector Education andTraining Authority (SASSETA)9 108-5 30014 40814 408100%9 938Special Defence Account3 060 320- 50 000 3 110 320 3 010 32097%8 619 190TOTAL3 069 428- 55 300 3 124 728 3 024 7288 629 128ANNUAL REPORT FY 2010/2011 255

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 1BSTATEMENT OF TRANSFERS/SUBSIDIES TO PUBLIC CORPORATIONS AND PRIVATE ENTERPRISESNAME OF PUBLIC CORPORATION/PRIVATE ENTERPRISEAdjusted AppropriationActR'000TRANSFER ALLOCATION EXPENDITURE2009/10Capital CurrentRollOversR'000AdjustmentsR'000TotalAvailableR'000ActualTransferR'000% of AvailablefundsTransferred%R'000R'000TotalAvailableR'000PUBLIC CORPORATIONArmaments Corporation of South AfricaTOTAL731 510731 510--6 0006 000737 510737 510737 510737 510100.0%----603 608603 608256ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 1CSTATEMENT OF TRANSFERS TO NON-PROFIT INSTITUTIONSNON PROFIT ORGANISATIONAdjusted AppropriationActTRANSFER ALLOCATION EXPENDITURE2009/10Actual TransferRollOversAdjustmentsTotalAvailable% of Available fundsTransferredFinal AppropriationActR'000R'000 R'000 R'000R'000%R'0003404 002-TransfersSt John's Ambulance BrigadeReserve Force CouncilMedical Fund3604 827220---TOTAL5 407-- 5 4075 1874 342---3604 8272203604 827-100%100%0%ANNUAL REPORT FY 2010/2011 257

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 1DSTATEMENT OF TRANSFERS TO HOUSEHOLDSHOUSEHOLDSAdjusted AppropriationActTRANSFER ALLOCATION EXPENDITURE2009/10Actual TransferRollOversAdjustmentsTotalAvailable% of Available fundsTransferredFinal AppropriationActR'000R'000 R'000 R'000R'000%R'000TransfersDOD membersTOTAL135 638135 638--(15 045)(15 045)120 593120 593120 592120 592100%126 349126 349258ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 1ESTATEMENT OF GIFTS, DONATIONS AND SPONSORSHIPS RECEIVED FOR THE YEAR ENDED 31 MARCH 2011NAME OF ORGANISATIONNATURE OF GIFT, DONATION OR SPONSORSHIP2010/11R'000Received in cashVarious institutionsSponsorships and donations for sport and/or social eventsSubtotalReceived in kindOld MutualVarious institutionsVarious institutionsBritish High CommissionEmbassy of the Kingdom of NetherlandsHlambanyathi Game ReserveEve Graham MarketingPrimary Health CareGovernment of the United States of AmericaGovernment of the United States of AmericaSubtotalGifts in kind to DOD Units or OfficialsUpgrading of Facilities in unit to accommodate VIP visitorsand foreign studentsGifts in kind to DOD Units or Officials4 Toyota Land CruisersGifts in kind to DOD Units or OfficialsGameGift PacksLabour Saving DevicesVarious Transport assets (vehicles)PistolsTotal-------1012945701 0281 0282009/10R'000222296801196021-----1 1681 190ANNUAL REPORT FY 2010/2011 259

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 1FSTATEMENT OF AID ASSISTANCE RECEIVED FOR THE YEAR ENDED 31 MARCH 2011NAME OF DONORPURPOSEOPENINGBALANCER'000REVENUER'000EXPENDITURER'000Received in kindGovernment of the United States of AmericaGovernment of the Peoples Republic of ChinaGovernment of the United Kingdom of GreatBritian and Northern IrelandGovernment of KenyaGovernment of the Republic of ZimbabweGovernment of the Federal Republic ofGermanyGovernment of the United States of AmericaGovernment of the United States of AmericaGovernment of the Republic of ZambiaGovernement of the United State of AmericaGovernment of the United Kingdom of GreatBritain and Northern IrelandGovernment of the United Kingdom of GreatBritain and Northern IrelandThe Government of the Federal State ofSwitzerlandThe Lung Function Trust FundThe Government of the Kingdom of theNetherlandsGovernment of the United States of AmericaTraining CoursesTraining CourseTraining CourseTraining CourseTraining CourseTraining CourseSponsorship for the New York National Guard StatePartnership Programme planning conferenceSponsorship for the Seminar on Security ResponseTraining CourseSponsorship from the HIV/AIDS Strategic planning and policydevelopment conferenceSponsorship for the Global Military Satellite CommunicationconferenceSponsorship for the participation in Edinburgh MilitaryTattooSponsorship for the participation in Basel TattooSponsorship for the European Respiratory Society AnnualCongressSponsorship for the participation in the 18th NetherlandsShooting CompetitionSponsorship for the guidebook on environmental auditing inthe Military----------------5 43291070068139617516710599908480807760585,4329107006813961751671059990848080776058CLOSINGBALANCER'000----------------260ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 1F (continued)STATEMENT OF AID ASSISTANCE RECEIVED FOR THE YEAR ENDED 31 MARCH 2011NAME OF DONORPURPOSEOPENINGBALANCER'000REVENUER'000EXPENDITURER'000Received in kindThe Non-Proliferation Council (Departmentof Trade and Industry).Wilton Park (Organisers), UK Foreign andCommonwealth Office, Ministry of Defence,Ministry of Foreign Affairs of theNetherlands, US GovernmentGovernment of the United States of AmericaGovernment of the Republic of IndiaGovernment of the United States of AmericaThe International Military Forum onEmerging Infectious DiseasesGovernment of the United States of AmericaGovernment of CanadaGovernment of the United States of AmericaGovernment of the United States of AmericaGovernment of the United States of AmericaGovernment of MalaysiaSponsorship for the workshop on the strengthening ofInternational efforts to prevent the proliferation of BiologicalWeapons, the role of the Biological and Toxin WeaponsConvention in Beijing, China from 2-8 Nov 2010.Sponsorship for the Conference on Prospects for the 2011Biological & Toxic Weapons Convention ReviewSponsorship for the Conference on Maritime SecurityTraining CourseSponsorship for the Symposium for Warrant OfficersSponsorship for the International Military Forum onEmerging Infectious DiseasesSponsorships for the visit of US Military Service Commandsfor the SANDF Vision 2030 for training and career paths forother ranksTraining CourseSponsorship for the symposium on US Environment, Energy,Security and SustainabilitySponsorship for the US Environment, Energy, Security andSustainability SymposiumSponsorship for the Conference on New York NationalGuard State Partnership Programme planningSponsorship for DSA Expo------------545050504945454540402825545050504945454540402825TOTAL- 9 7159 715- Totals do not form part of the totals as on the face of the Statement of Financial PerformanceCLOSINGBALANCER'000-------------ANNUAL REPORT FY 2010/2011 261

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 1GSTATEMENT OF GIFTS, DONATIONS AND SPONSORSHIPS MADE AND REMISSIONS REFUNDS AND PAYMENTS MADE ASAN ACT OF GRACE FOR THE YEAR ENDED 31 MARCH 2011NATURE OF GIFT, DONATION OR SPONSORSHIPS2010/11R'000Made in kindMedical & General Equipment - UgandaObsolete medals and decorations - SA Museum for Military HistoryTOTAL- Totals do not form part of the totals as on the face of the Statement of Financial Performance-------2009/10R'0002851----286262ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 2ASTATEMENT OF INVESTMENTS IN AND AMOUNTS OWING BY/TO NATIONAL/PROVINCIAL PUBLIC ENTITIES AS AT 31 MARCH 2011(Only Public and Private Entities)Name of Public EntityNational/ProvincialPublic EntityCastle Control Board(under control of theMinister of Defence)Armaments Corporationof South Africa (managedand controlled by aboard of Directorsappointed by theMinister of Defence)Profit/(loss) for the yearis for the Armscor GroupSouth African NationalDefence Force FundState Entity’sPFMA Scheduletype (state yearend if not 31March)3A23A (not listed)%Held10/11100.0%100.0%100.0%%Held09/10100.0%100.0%100.0%Number of shares held2010/1175 000 000(Issued to thePresident ofthe Republicof SouthAfrica and incustody at theDepartmentof Defence )2009/10 2010/10 2009/1075 000 000(Issued to thePresident ofthe Republicof SouthAfrica and incustody at theDepartmentof Defence)Cost of investmentR'00075 00075 000Net Asset value ofinvestmentR'0002010/11 2009/1012 431553 80312 04011 566536 77211 385Profit/(Loss) for theyearR'0002010/11 2009/1086617 0316551 192(15 785)747Subtotal75 000 75 000 578 274 559 723 18 552 (13 846)Total75 000 75 000 578 274 559 723 18 552 (13 846)COMMENTSLossesguaranteedYes/NoNoNoNoANNUAL REPORT FY 2010/2011 263

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 2BSTATEMENT OF INVESTMENTS IN AND AMOUNTS OWING BY/TO CONTROLLED/PUBLIC ENTITIES AS AT 31 MARCH 2011(Only Public and Private Entities)Name of Public EntityNature of businessCost of investmentR'000Net Asset value ofinvestmentR'000Amounts owing toEnititiesR'0002010/112009/10 2010/11 2009/102010/11 2009/10-Controlled entitiesSouth African NationalDefence Force FundThe SANDF Fund is established in terms of the FundRaising Act, Act 107 of 1968. The aim of the fund is torender aid to SA National Defence Force and AuxiliaryServices and their dependants who suffer financialhardship and distress as a result of duties in terms ofthe Defence Act12 04011 385--Castle Control Board(under control of theMinister of Defence)To preserve and protect the military and cultural heritageof the Castle; optimise the tourism potential of theCastle; and maximise the accessibility to the public ofthe whole or any part, as the case may be, of the Castlewhich is not used by the SANDF, or any part thereof.12 43111 566--ArmamentsCorporation of SouthAfrica (managed andcontrolled by a Board ofDirectors appointed bythe Minister of Defence)To acquire defence products, mainly for the SANDF,and co-manage, with the SANDF, the development oftechnologies for future weapon systems and productsand also to manage the disposal of excess, forfeited,redundant, or surplus defence material for the SANDFand the subsidy companies which directly supporttechnology and acquisition strategies.75 00075 000553 803536 7723 911-Total75 000 75 000 578 274 559 723 3 911Amounts owing byEntitiesR'0002010/11 2009/10----3637 9373637 937264ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 3ASTATEMENT OF FINANCIAL GUARANTEES ISSUED AS AT 31 MARCH 2011 - LOCALGuarantor InstitutionGuarantee inrespect ofHousingABSAAfrican BankFirst National BankFree State Development CorporationGreenstar Home LoansIthala Development Financial CorporationMasikheniNedbankOld Mutual BankSouthfinStandard BankVenda Nat Development CorporationOtherSubtotalOriginalGuaranteedcapitalamountR'000Openingbalance as at1 April 2010R'0004 771954 4359815523832444 6335063813 0961227920 278Guaranteesdrawdownsduring theyearR'000137-6878-283RevaluationsR'000Closing balance31March 2011R'0004 216623 3537805082262443 2333483562 1682007915 773Guaranteedinterest outstandingas at31 March 2011R'000Realisedlosses notrecoverableR'000----------------------------------------------------------------Guaranteed repayments/cancelled/reduced/released during the yearR'000692331 08220144157-1 40015825996--4 788-Total- 20 278 2834 788- 15 773-The amount disclosed for the financial year 2009/2010 with regards to Housing Loan Guarantees has been restated from R19 953 891 to R20 278 510 due to an understatement in theprevious financial year. The understatement was due to certain guarantees incorrectly captured or omitted from the PERSOL system.ANNUAL REPORT FY 2010/2011 265

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 3BSTATEMENT OF CONTINGENT LIABILITIES AS AT 31 MARCH 2011Nature of LiabilityOpening Balance1 April 2010R'000Liabilities incurredduring the yearR'000Liabilities paid/cancelled/reduced during the yearR'000LiabilitiesrecoverableR'000Closing Balance31 March 2011R'000Claims against the departmentCivil claimsMotor vehicle accident claimsSubtotal467 7906 086473 876399 9443 317403 26115 1323 73318 865---852 6025 670858 272Environmental LiabilityEnvironmental LiabilityAviation Fuel underground contamination rehabilitationBitumen contamination at Air Force BaseSubtotal124 84552 5004 500181 845----52 473--52 473----72 37252 5004 500129 372OtherRegional Services Councils LeviesSubtotal11 81511 815--11 81511 815----Total667 536403 26183 153-987 644The amount disclosed for the financial year 2009/2010 with regards to Civil Claims against the Department has been restated from R414 422 106 to R473 876 394 due to an understatement inthe previous financial year.266ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 4CLAIMS RECOVERABLEGovernment EntityConfirmed balance Unconfirmed balanceTotal2011/03/31 2010/03/31 2011/03/31 2010/03/31 2011/03/31 2010/03/31R'000 R'000 R'000R'000R'000R'000DepartmentDepartment of AgricultureDepartment of Correctional ServicesDepartment of EducationDepartment of Environmental Affairs and TourismDepartment of HealthDepartment of International Relations and CorporationsDepartment of LabourDepartment of Public WorksDepartment of Social DevelopmentDepartment of TransportGauteng Provincial GovernmentNational TreasuryNational IntelligenceMinistry of State SecuritySouth African Revenue ServiceSouth African Police ServiceSubtotal-----------------9073-8651 485573181 636-4233635322683-277 0319061413216 919-542336196--118399 383--9073-8651 485573181 636-4233635322683-277 0319061413216 919-542336196---------------------118399 383TOTAL--7 0319 3837 0319 383ANNUAL REPORT FY 2010/2011 267

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 5INTER-DEPARTMENTAL PAYABLESGovernment EntityConfirmed balance Unconfirmed balanceTotal2011/03/31 2010/03/31 2011/03/31 2010/03/31 2011/03/31 2010/03/31R'000 R'000 R'000R'000R'000R'000DepartmentAmounts not included in Statement of Financial PositionDepartment of EducationSouth African Police ServiceDepartment of HousingDepartment of Social DevelopmentProvincial AdministrationDepartment of International Relations and CorporationsDepartment of LabourDepartment of AgricultureDepartment of HealthNational Prosecuting AuthorityDepartment of Justice and ConstitutionDepartment of Public WorksDepartment of TransportDepartment of FinanceNational TreasuryThe PresidencyPALAMAAuditor General - Special Defence AccountAuditor General - General AccountGovernment Printing WorksDepartment of Water AffairsDepartment of Housing, Local Government and TraditionalAffairsTOTAL--186--42-55559 254-4995 36965 905-----------5-1 738-3 808--27514-23-46-1 1327234 4188-67462--9512-7 077-----34953131525-2574 72927415 137352-940-44922 197-----275200--4223-46-1 68759 9774 4188--4624995 3699512-72 9153410031315251 7382574 72923 88215 137352--3--943-449-16----165 570-----27 767268ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military Veterans - Vote 21Annexures to the Annual Financial Statementsfor the year ended 31 March 2011ANNEXURE 6INVENTORY2010/11 2009/10NoteQuantityR'000QuantityR'000InventoryOpening balanceAdd/(Less): Adjustments to prior year balancesAdd: Additions/Purchases - CashAdd: Additions - Non-cash(Less): Disposals(Less): IssuesAdd/(Less): AdjustmentsClosing balance-2 925 032 24688 141 35630 660 096(456 694)(11 825 735)(2 222 094 469)809 456 800-165 287 8662 499 266680 455(36 480)(161 727)(148 468 253)19 801 127----------------The amount disclosed for closing balance is stated at last purchase price and exclude inventory recorded in manual inventoryregisters as well as inventory items for which the National Stock Number (NSN) are not yet linked to National TreasuryStandard Chart of Accounts (SCOA).The amount disclosed for non cash additions includes inventory purchased through the Special Defence Account, but recordedin the inventory register together with the inventory purchased through the General Defence Account.ANNUAL REPORT FY 2010/2011 269

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransVote 21270ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EChapter 2SOUTH AFRICAN NATIONALDEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011IntroductionStrategic directionOrganisational structureCorporate governancePerformanceAccounting Authority’s ReportReport of the Auditor-GeneralFinancial statementsStatement of Financial PositionStatement of PerformanceStatement of Changes in Net assetsCash Flow StatementNotes to the Financial Statements272272272274276278280282283284285286ANNUAL REPORT FY 2010/2011 271

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011I N T R O D U C T I O NB a c k g r o u n dThe SANDF Fund was established in terms of the Fund Raising Act 1978, (Act No. 107 of 1978), as amended. The aim of theFund is to render aid to members and former members of the South African National Defence Force and Auxiliary Services, andtheir dependants who suffer hardship or financial distress arising, directly or indirectly, as a result of any service or duties in termsof the new Defence Act 2002, (Act No. 42 of 2002) and to provide facilities to such members and former members who performsuch services or duties.S T R A T E G I C D I R E C T I O NV i s i o nThe SANDF Fund's vision is aid to all beneficiaries of the Fund suffering hardship or financial distress.M i s s i o nThe SANDF Fund's mission is, with due regard to the financial position of the Fund and the requirements of each case, to rendersuch aid as the Board may deem fair and reasonable to members and former members of the South African National DefenceForce and Auxiliary Services established in accordance with the Defence Act, and their dependants who suffer hardship or financialdistress arising, directly or indirectly, as a result of any service or duties in terms of the new Defence Act 2002, (Act No. 42of 2002), performed by such members, and to provide facilities to or for such members and former members or dependants whoperform such services or duties.L e g i s l a t i v e M a n d a t eThe Fund is mandated in terms of the Fund Raising Act 1978, (Act No. 107 of 1978), as amended.O R G A N I S A T I O N A L S T R U C T U R EMinister of DefenceChairperson of the BoardBoard membersFinance CommitteeSecretaryAdministrationAccountantAdministratorSecretary272ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011B o a r d m e m b e r sThe following were the officially appointed members of the Board until new appointments were made during the year underreview:Full Time MembersLt Gen J.L. Jansen van Rensburg - (Chairperson)Lt Gen T.T. MatanzimaMaj Gen J.C. van der Poel - (Deputy Chairperson)Maj Gen L.C. PepaniBrig Gen J.C. BeukusBrig Gen N.E. MotumiR Adm (JG) J.G. BarkerCol M.J. LouwCol R.C.J. Wood - (Secretary)Part Time MembersProf D.F.S. FourieLt Gen (Ret) D.P. KnobelR Adm (JG) (Ret) L.M. BakkesThe position of most of the Board members had changed due to internal transfers and appointments and retirement. Subsequentto the official appointment of the Board, there were various persons acting as Board members including the chairpersons Lt GenRamlakan and Lt Gen Matanzima.A submission was forwarded to the Minister of Defence for the appointment of the following persons who were acting as Boardmembers. The Minister formally approved the appointments on 13 August 2010.MembersFull Time MembersLt Gen D.M. Mgwebi (Chairperson)Brig Gen N. YengeniMaj Gen H.A. BhembeR Adm (JG) A.E. KubuR Adm (JG) G. MbulaheniCol R. PillayMs F.G. MabilaneWO1 F.J.S. ScheepersCol M.J. Louw (Minuting secretary)RepresentingSA ArmySA Air ForceSA NavyHR DivisionSA Medical Health ServiceSecretary for DefenceWarrant Officer of the SANDFHRANNUAL REPORT FY 2010/2011 273

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011MembersPart Time MembersProf D.F.S. Fourie - Deputy ChairpersonLt Gen (Ret) D.P. KnobelBrig Gen A. MaminzaR Adm (JG) L.M. BakkesLt Col (Ret) L. PoorterLt Col M.A. ThulareMs M.N. TsotsiRepresentingSelfMilitary VeteransSAMHS ReservesReserve ForceCouncil of Military OrganisationsReserve ForceMilitary VeteransCo opted MembersCapt (SAN) R.B. WarrinAsst Dir P.J. du BoisSA NavyAccountantF i n a n c e C o m m i t t e e m e m b e r sMembersFull Time MembersLt Col (Ret) L. Poorter - ChairpersonBrig Gen N. YengeniCol R. PillayCapt (SAN) R.B. WarrinRepresentingCouncil of Military OrganisationsSA ArmySA Medical Health ServiceSA NavyA d m i n i s t r a t i o n p e r s o n n e lPersonnelVacantAsst Dir P.J. du BoisRepresentingAdministratorAccountantC O R P O R A T E G O V E R N A N C EA u d i t C o m m i t t e eAlthough not a legislative requirement, an Audit Committee has not yet been appointed due to the fact that the Fund is not yetfully operational. However, taking cognisance of best practice in this regard the Fund has already made an approach to theDefence Force Audit Committee to assist with these functions to which they have agreed and will commence with once the Fundis fully operational.274ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011I n t e r n a l a u d i tThe Inspector General, DOD (IG DOD) has agreed to provide an internal audit function to the Fund and will commence withsuch function once the Fund becomes operational. Since the formal appointment of the Board it is anticipated that the Fund willbecome operational during the 2011/12 financial year thus implying that the internal audit function will become a reality.A t t e n d a n c e o f B o a r d m e e t i n g sThe Board is established in terms of the Fund Raising Act 1978, (Act No. 107 of 1978), as amended to manage the Fund. TheBoard is required to meet 4 times per annum. However, the Board has been inactive due to the majority of members serving inan acting capacity awaiting official appointment. Thus the Board was limited in its powers of decision making until such timethe members were officially appointed. Notwithstanding, although it is envisaged to hold at least four meetings per year and theyare scheduled as such, during the year under review, due to other pressing service exigencies this was not always possible. Onlythree Board meetings were held during the financial year.The meetings were attended as follows:MembersLt Gen D.M. Mgwebi (Chairperson)Brig Gen N. YengeniMaj Gen H.A. Bhembe / Maj Gen J.D. PelserR Adm (JG) A.E. Kubu / Capt (SAN) R.B. WarrinR Adm (JG) G. Mbulaheni / Col M.F. Dibetso / Col E. YonCol R. Pillay / E.C. MoremiWO1 F.J.S. ScheepersProf D.F.S. Fourie - Deputy ChairpersonLt Gen (Ret) D.P. KnobelBrig Gen (Dr) K.O.P. Matseki / Col A. MamunzaR Adm (JG) L.M. BakkesLt Col L. PoorterLt Col M.A. ThulareMs F.G Mabilane / Mr I. van der WaltMs M.N. TsotsiCol M.J. Louw (Minuting Secretary)No of meetings attended2133331322220213Meetings held3333333333333333Co opted MembersCapt (SAN) R.B. WarrinMr P.J. du Bois3333The objective of the Board is, with due regard to the financial position of the Fund and the requirements of each case, to rendersuch aid as the Board may deem fair and reasonable to members and former members of the South African National DefenceForce and Auxiliary Services established in accordance with the Defence Act, and their dependants who suffer hardship or finan-ANNUAL REPORT FY 2010/2011 275

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011cial distress arising, directly or indirectly, as a result of any service or duties in terms of the new Defence Act 2002, (Act No. 42of 2002) performed by such members, and to provide facilities to or for such members and former members who perform suchservices or duties.S t a t e m e n t o f r e s p o n s i b i l i t yThe Board members are responsible for monitoring the preparation of and the integrity of the financial statements and relatedinformation included in this Annual Report.The Auditor-General South Africa is responsible for auditing and reporting on the financial statements.The financial statements are prepared in accordance with statements of South African Generally Recognised Accounting Practice(GRAP) and incorporate disclosure in line with the accounting philosophy of the entity. The financial statements are based onappropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.The Board members believe that the entity will be a going concern in the year ahead. For this reason they continue to adopt thegoing concern basis in preparing the entity's annual financial statements.P E R F O R M A N C ES t r a t e g i c o b j e c t i v e sA Strategic Plan for the Fund has been prepared and submitted to the Interim Board for consideration. Once the appointment ofthe members of the Board has been confirmed and the Fund resumes its activities, the plan will be formally approved and thestrategic objectives therein pursued.The objective of the Board is, with due regard to the financial position of the Fund and the requirements of each case, to rendersuch aid as the Board may deem fair and reasonable to members and former members of the South African National DefenceForce and Auxiliary Services established in accordance with the Defence Act, and their dependants who suffer hardship or financialdistress arising, directly or indirectly, as a result of any service or duties in terms of the new Defence Act 2002, (Act No. 42of 2002), performed by such members, and to provide facilities to or for such members and former members who perform suchservices or duties.KeyobjectiveStrategyPerformanceIndicatorQuarterlytargetsActualperformanceMembersProvide aid toqualifying membersand dependants..To enable military social workersand veterans' organisationsto identify and process the needand applications for aid.No of personsaided.30 Jun 20103 personsR0.00The Fund was not operationaldue to the following reasons:Board members were notofficially appointed and thuslacked an official mandate. TheBoard was only appointed on13 August 2010.The SANDF Order is stillunder review after which itwill be promulgated.276ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011KeyobjectiveStrategyPerformanceIndicatorQuarterlytargetsActualperformanceNo of personsaided.30 Sep 20103 persons31 Dec 20103 persons31 Mar 20113 personsR0.00The Fund was not operationaldue to the following reasons:Board members were notofficially appointed and thuslacked an official mandate. TheBoard was only appointed on13 August 2010.The SANDF Order is stillunder review after which itwill be promulgated.R0.00The Fund was not operationaldue to the following reasons:Board members were notofficially appointed and thuslacked an official mandate. TheBoard was only appointed on13 August 2010.The SANDF Order is stillunder review after which itwill be promulgated.R0.00Applications for aid were notapproved.FacilitiesProvide financialaid for provisionof facilitiesTo enable military social workersand veterans' organisationsto identify and process the needand applications for aid onbehalf of beneficiaries.No of Facilitiesaided.30 Jun 2010Nil30 Sep 2010Nil31 Dec 2010Nil31 Mar 2011NilR0.00Not a present priority.R0.00Not a present priority.R0.00Not a present priority.R0.00Not a present priority.ANNUAL REPORT FY 2010/2011 277

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011A C C O U N T I N G A U T H O R I T Y ’ S R E P O R T F O R T H E Y E A R E N D E D3 1 M A R C H 2 0 1 1The Board presents their Annual Report, which form part of the audited financial statements of the Fund for the year ended31 March 2011.N a t u r e a n d a i m o f t h e S A N D F F u n dThe SANDF Fund was established in terms of the Fund Raising Act 1978, (Act No. 107 of 1978) as amended. The aim of theFund is to render aid to members and former members of the South African National Defence Force and Auxiliary Services, andtheir dependants who suffer hardship or financial distress arising, directly or indirectly, as a result of any service or duties in termsof the new Defence Act 2002, (Act No. 42 of 2002) and to provide facilities and matters connected therewith to such membersand former members who perform such services or duties.G e n e r a l r e v i e wThe activities in the SANDF Fund were still at a low level for the year under review. Isolated requests for aid were reviewedbut not approved. The newly appointed Board has finally been officially approved by the Minister of Defence and MilitaryVeterans. With the Board in place and the finance committee functioning, it is anticipated that activities of the Fund will increaseand the Fund will render aid to the beneficiaries of the Fund during the 2011/2012 financial year.F i n a n c i a l r e s u l t sIncome for the financial year consisted of interest received mainly on investments. Interest on investments was capitalised. Thisresulted in the investment capital increasing by 5.97 %. (7.39 % in 2009/2010). The growth of the investment is lower than theprior year due to the lower interest rates during the current year and the transfer of capital (R16 000) to the current account tofinance operating costs.Expenditure for the financial year consisted mainly of audit fees, honorarium of the accountant and travelling expenses for Boardmembers attending Board meetings.E v e n t s a f t e r t h e r e p o r t i n g d a t eThere were no events, favourable and unfavourable, that occurred after the reporting date.I n t e r e s t o f t h e B o a r d m e m b e r sBoard members do not have any interest in the SANDF Fund.278ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDANNUAL REPORTfor the year ended 31 March 2011A u d i t o r sThe Auditor of the SANDF Fund is the Auditor-General South Africa.A d d r e s sArmscor Building, Nossob Street, Erasmusrand.LIEUTENANT GENERAL D.M. MGWEBICHAIRPERSON OF THE SANDF FUND BOARD31 July 2011ANNUAL REPORT FY 2010/2011 279

D E P A R T M E N T O F D E F E N C EREPORT OF THE AUDITOR-GENERAL TOPARLIAMENT ON THE SOUTH AFRICANNATIONAL DEFENCE FORCE FUNDfor the year ended 31 March 2011R E P O R T O N T H E F I N A N C I A L S T A T E M E N T SI n t r o d u c t i o nI have audited the accompanying financial statements of the South African National Defence Force Fund, which comprise thestatement of financial position as at 31 March 2011, and the statement of financial performance, statement of changes in net assetsand cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information,and the accounting authority's report, as set out on pages 278 to 279 and 282 to 294.A c c o u n t i n g a u t h o r i t y ' s r e s p o n s i b i l i t y f o r t h e f i n a n c i a l s t a t e m e n t sThe accounting authority is responsible for the preparation and fair presentation of these financial statements in accordance withSouth African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP), and the requirements of theFund-Raising Act, 1978 (Act No. 107 of 1978) and General Notice 1111 of 2010 issued in Government Gazette 33872 of15 December 2010, and for such internal control as management determines necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.A u d i t o r -G e n e r a l ' s r e s p o n s i b i l i t yAs required by section 188 of the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) and section 4 of thePublic Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), my responsibility is to express an opinion on these financialstatements based on my audit.I conducted my audit in accordance with International Standards on Auditing and General Notice 1111 of 2010 issued inGovernment Gazette 33872 of 15 December 2010. Those standards require that I comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of thefinancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevantto the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements.I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.O p i n i o nIn my opinion, the financial statements present fairly, in all material respects, the financial position of the South African NationalDefence Force Fund as at 31 March 2011, and its financial performance and cash flows for the year then ended in accordancewith South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP) and the requirements ofsection 22 (7) of the Fund Raising Act 1978, (Act No. 107 of 1978).A d d i t i o n a l m a t t e r sI draw attention to the matters below. My opinion is not modified in respect of these matters:280ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EREPORT OF THE AUDITOR-GENERAL TOPARLIAMENT ON THE SOUTH AFRICANNATIONAL DEFENCE FORCE FUNDfor the year ended 31 March 2011R E P O R T O N O T H E R L E G A L A N D R E G U L A T O R Y R E Q U I R E M E N T SIn accordance with the PAA and in terms of General notice 1111 of 2010, issued in Government Gazette 33872 of 15 December2010, I include below my findings on the annual performance report as set out on pages 276 to 277 and material non-compliancewith laws and regulations applicable to the fund.P r e d e t e r m i n e d o b j e c t i v e sThere are no material findings on the annual performance report.C o m p l i a n c e w i t h l a w s a n d r e g u l a t i o n sS t r a t e g i c p l a n n i n g a n d p e r f o r m a n c e m a n a g e m e n tNo predetermined measurable objectives, expected outcomes and targets were set at the beginning of the financial year, and noevidence could be obtained that these objectives were agreed on by the executive authority as required by the 2010/11 AuditDirective - (General Notice 1111 issued in Government Gazette 33872).I N T E R N A L C O N T R O LIn accordance with the PAA and in terms of General notice 1111 of 2010, issued in Government Gazette 33872 of 15 December2010, I considered internal control relevant to my audit, but not for the purpose of expressing an opinion on the effectiveness ofinternal control. The matters reported below are limited to the significant deficiencies that resulted in the finding on compliancewith laws and regulations included in this report.L e a d e r s h i pOversight responsibility was not exercised regarding performance reporting and compliance, as the Board was only appointedduring August 2010.Pretoria31 July 2011ANNUAL REPORT FY 2010/2011 281

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDSTATEMENT OF FINANCIAL POSITIONfor the year ended 31 March 2011ASSETSNote 2010/20112009/10RRASSETSCurrent assetsCash and cash equivalentsInvestmentsTotal assets2324 97612 021 03512 046 01147 00011 343 33311 390 333LIABILITIESCurrent liabilitiesPayableProvisionTotal liabilities44186 0006 4186145 0005 614Net assets12 039 59311 384 719NET ASSETSAccumulated surplusesTotal net assets12 039 59312 039 59311 384 71911 384 719282ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDSTATEMENT OF FINANCIALPERFORMANCEas at 31 March 2011ASSETSRevenueOther operating revenueTotal revenueNote 2010/11R2009/10R5 693 836781 891693 836781 891ExpensesAdministration expensesInterestTotal expenses38 72923338 96234 872-34 872Surplus for the period654 874747 019Attributable to Net asset holders654 874747 019ANNUAL REPORT FY 2010/2011 283

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDSTATEMENT OF CHANGESIN NET ASSETSfor the year ended 31 March 2011ASSETSBalance at 31 March 2008Surplus for the periodBalance at 31 March 2009Surplus for the periodBalance at 31 March 2010Surplus for the periodBalance at 31 March 2011Note 2010/11R2008/2009R’000Accumulated5surpluses1 085 7711 085 7719 574 9171 062 78310 637 70022 988747 01922 98811 384 719654 8741 062 78312 039 5931 062 783284ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDCASH FLOW STATEMENTfor the year ended 31 March 2011ASSETSNote 2010/112009/10RRCASH FLOWS FROM OPERATING ACTIVITIESOther paymentsNet cash flows from operating activities7(37 925)(37 925)(34 259)(34 259)CASH FLOWS FROM INVESTING ACTIVITIESIncome from investmentsIncrease in investmentsFinance incomeFinance expensesNet cash flows from investing activities693 702.(677 702)134.(233)15 901.780 698.(780 698)1 193.-.1 193.Net increase in cash and cash equivalentsCash and cash equivalents at beginning of periodCash and cash equivalents at the end of period2(22 024)47 000.24 976.(33 066)80 066.47 000.ANNUAL REPORT FY 2010/2011 285

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 20111. Accounting Policy1.1 Basis of preparationThe annual financial statements have been prepared in accordance with the effective Standards of GenerallyRecognised Accounting Practice (GRAP), including any interpretations and directives issued by the AccountingStandards Board. The measurement base applied is historical cost.The financial statements was prepared on a going concern basis in accordance with GRAP, issued by the AccountingStandards Board.1.2 Investments in Financial InstrumentsHeld to maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixedmaturities that the fund's management has the positive intention and ability to hold to maturity. Held to maturityis included in non-current assets, except for those with maturities less than 12 months from the reportinge date, theseare classified as current assets.1.2.1 RecognitionFinancial assets and financial liabilities are recognised on the Fund's Statement of Financial Position when the Fundbecomes a party to the contractual provisions of the instrument.1.2.2 MeasurementFinancial instruments are initially measured at fair value. Subsequent measurement of financial instruments isdetermined based on the category of financial instruments. Held to maturity investments are subsequently measuredat amortised cost.1.2.3 Investment in Financial AssetsThe Fund's principle financial assets are investments and cash and cash equivalents.1.3 Derecognition of Financial Assets and LiabilitiesFinancial assets are derecognised where the right to receive cash flows from the asset has expired or matured.A financial liability is derecognised when the obligation under the liability is discharged or cancelled.1.4 Revenue1.4.1 Other incomeOther income is measured at the fair value of consideration received or receivable. Other income is recognised whenit is probable that future economic benefits will flow to the Fund and these benefits can be measured reliably.Interest income is accrued on a time proportion basis, taking into account the principal outstanding and the effectiveinterest rate over the period to maturity.1.4.2 RevenueRevenue is measured at fair value of consideration received or receivable. Revenue comprises of donations received.1.5 ProvisionsProvisions are recognised when there is a present obligation as a result of a past event and it is probable that this willresult in an outflow of economic benefits that can be estimated reliably. The amount recognised shall be the bestestimate of expenditure required to settle the present obligation at the reporting date.286ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 20111.6 Cash and cash equivalentsCash and cash equivalents are stated at the fair value.1.7 Related partiesRelated parties represent those transactions which have been entered into between the SANDF Fund and relatedparties.1.8 Unauthorised, irregular, fruitless and wasteful expenditureThe financial statements must, in terms of the Public Finance Management Act, 1999 (Section 55(2)(h)(1), include particularsof any such expenditure. When such expenditure is incurred, it would be charged against income whenincurred.1.9 BudgetsThe SANDF Fund prepares the budget on the cash basis for a period of twelve months which coincides with thereporting period.The SANDF Fund does not budget for interest income because of the fluctuation of interest rates and because theincome from interest is not the core business of the Fund.Budget for expenditure is limited to 90% of the prior year interest earned on investments.1.10 Use of Estimates, Judgements and AssumptionsManagement is required to make estimates and assumptions in preparing the annual financial statements. Theseassumptions and estimates are made on the best available information relating to provisions.1.11 Events after the reporting dateEvents after the reporting date are those events, both favourable and unfavourable that occur between the reportingdate and the date when the financial statements are authorised for issue. Two types of events can be identified:1.11.1 Adjusting eventsAdjusting events are those that provide evidence of conditions that existed at the reporting date (adjusting events);and1.11.2 Non-adjusting eventsNon-adjusting events are those events that are indicative of conditions that arose after the reporting date (non-adjustingevents).ANNUAL REPORT FY 2010/2011 287

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 20112. Cash and cash equivalentsCash and cash equivalents consist of cash on hand and balances with banks.Note2010/11R2009/10RCash on hand and balances with banks24 97624 97647 00047 0003. Investments in financial assets3.1 Fixed term deposit3.1.1 Maturity date: 26/05/10Interest rate: 6.5%Opening balanceInterest accruedClosing balanceOpening balanceInterest earnedClosing balance transferred to Investment (refer 3.1.3)3.1.2 Maturity date: 31/05/10Interest rate: 7%Opening balanceInterest accruedClosing balanceOpening balanceInterest earnedClosing balance transferred to Investment (refer 3.1.5)3.1.3 Maturity date: 26/08/2010Interest rate: 5.85%Opening balanceInterest earnedClosing balance transferred to Investment (refer 3.1.4)3.1.4 Maturity date: 30/11/2010Interest rate: 5.65%Opening balanceInterest earnedClosing balance transferred to Investment (refer 3.1.7)3.1.5 Maturity date: 30/11/2010Interest rate: 6.1%Opening balanceInterest earnedClosing balance transferred to Investment (refer 3.1.6)1 028 72910 1991 038 92810 314 604117 84110 432 4451 038 92815 3201 054 2481 054 24815 6671 069 91510 432 445319 06110 751 5061 022 7196 0101 028 72910 073 124241 48010 314 604288ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 2011Note2010/11R2009/10R3.1.6 Maturity date: 31/05/2011Interest rate: 5.50%Opening balanceInterest accrualClosing balance at year end 31/03/20113.1.7 Maturity date: 31/01/2011Interest rate: 5%Opening balanceInterest earnedClosing balance transferred to Investment (refer 3.1.8 and 3.1.10)3.1.8 Maturity date: 28/02/2011Interest rate: 4.95%Opening balanceInterest earnedClosing balance transferred to Investment (refer 3.1.9)3.1.9 Maturity date: 31/03/2011Interest rate: 5.05%Opening balanceInterest earnedClosing balance transferred to Investment (refer 3.1.11)3.1.10 Maturity date: 31/3/2011Interest rate: 5%Opening balanceInterest earnedClosing balanceTransferred to current accountClosing balance transferred to Investment (refer 3.2.2)3.1.11 Maturity date: 30/6/2011Interest rate: 5.25%Opening balanceInterest earnedClosing balance at year end 31/03/201110 751 506197 65110 949 1571 069 9159 0861 079 00169 91526570 18070 18030170 4811 009 0878 1561 017 243(16 000)1 001 2431 071 7241541 071 87847 00047 0001,022,7196,0101,028,72910,073,124241 48010,314 6044. ProvisionsA provision for accounting fees has been recognised to be incurred in the 2010/11 financial year.The accounting fees relate to an Honorarium fee for meetings attended, monthly accounting work and compilationof annual financial statements. The accounting fee and the timing of the payment are determined based on the discretionof the Board (no fix contract exist between the accountant and the Board) subsequent to the year end andpreparation of financial statements.ANNUAL REPORT FY 2010/2011 289

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 2011Note2010/11R2009/10RAccountant feesOpening balanceAdditionsUsedClosing balance5. Other operating revenueInvestment income on held to maturity investmentsSA National Defence Force FundSA National Defence Force Welfare FundInterest earned on investment is capitalised5 000.6 000.(5 000)6 000.693 702.4.130.693 836.5 000.5 000.(5 000)5 000.780 698.18.1 175.781 891.6. Profit for the yearProfit for the year includes expenditure for:Audit fees7. Cash flow from operating activitiesSurplus for the yearAdjusted for:Interest received on investmentsInterest paidInterest paidIncrease in payables26 816.26 816.654 874.(693 702)(134)233.804.(37 925)25 258.25 258.747 019.(781 891)--613.(34 259)8. Financial instruments8.1 Financial risk factors8.1.1 Market riskMarket risk is the risk that changes in market prices. Interest rates will affect the SANDF Fund. The objective ofmarket risk management is to manage and control market risk exposure within acceptable parameters while optimisingreturn. The SANDF Fund does not manage this risk aggressively as the investments of funds are determinedby the Minister of Defence and the Minister of Finance. Within these parameters, funds are invested withreputable commercial banks.8.1.2 Credit riskCredit risk is the risk of financial loss to the SANDF Fund if a financial institution to a financial instrument fails tomeet its contractual obligations.The SANDF Fund's exposure to credit risk is influenced only by the individual characteristics of the financial institutionswhere funds are deposited or invested. Reputable financial institutions are used for investing and cashhandling purposes.290ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 2011Note2010/11R2009/10RABSA BankRand Merchant Bank (RMB)2324 97612 021 03512 046 01147 00011 343 33311 390 333The investment contractual maturities for all borrowings and payables outstanding at 31 March 2011 are12 months or less.8.1.3 Liquidity riskLiquidity risk is the risk that the SANDF Fund will not be able to meet its financial obligations as they fall due. TheSANDF Fund’s approach to managing liquidity is to ensure that investment terms chosen will ensure that it willalways have sufficient liquidity to meet it’s liabilities when due.The liquidity risk is considered being low, because the SANDF Fund has adequate funds at their disposal.Cash and cash equivalentsInvestmentsCurrent liabilities24 976.12 021 035.12 046 011.(6 418)12 039 593.47 000.11 343 333.11 390 333.(5 614)11 384 719.8.1.4 Interest riskThe SANDF Fund's exposure to changes in interest rates is limited to that of the reputable financial institutions.Interest earned on cash and cash equivalents are not material and does not pose a risk. Investment funds areinvested for short terms.Investment2010/11Effective Rate%2009/10Effective Rate%Change5.97 7.39(1.42)8.1.5 Interest risk sensitivity analysis2010/11R2009/10RInvestments1% interest fluctuation impact12 021 035120 21011 343 333113 433ANNUAL REPORT FY 2010/2011 291

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 20118.1.6 Capital managementsThe policy of management is to maintain a strong capital base so as to maintain aid in the future. There were no changesin management's approach to capital management during the year.2011InterestbearingRNon-InterestbearingRTotalRASSETSCash and cash equivalentsInvestmentsCurrent liabilitiesNet financial assets (liabilities)24 97612 021 03512 046 011-12 046 011---(6 418)(6 418)24 97612 021 03512 046 011(6 418)12 039 5932010InterestbearingRNon-InterestbearingRTotalRASSETSCash and cash equivalentsInvestmentsCurrent liabilitiesNet financial assets (liabilities)47 00011 343 33311 390 333-11 390 333---(5 614)(5 614)47 00011 343 33311 390 333(5 614)11 384 7198.1.7 Currency riskThe SANDF Fund does not enter into forward exchange contracts and therefore have no currency risk.8.2 Fair value estimationThe face values of cash, and trade payables less any estimated credit adjustments, are the approximate fair valueson 31 March 2011, as a result of the short-term maturity of these assets and liabilities.292ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 20119. Related partiesThe SANDF related parties and the Department of Defence are related because of common control under theMinister of Defence. Board members are related parties.The related party transactions for the year under review are as follows:Attendance allowance for attendance of meetings of non Departmentof Defence (DOD) Board Members:Prof D.F.S. FourieLt Gen (Ret) D.P. KnobelR Adm (JG) L.M. BakkesLt Col L. PoorterDepartment of Defence (DOD) personnel serving on the Board or representativeswho provide services to the SANDF Fund during DODofficial working hours without compensation from the SANDF Fund.2010/11R3002006002 40025 69129 1912009/10R1001003002 10010 77213 37210. Budget and actual amounts10.1 The Fund did not plan for any fund raising events for the year under review and consequently no budget wasprepared. The income from interest is not the core business of the Fund and does not require a budget.10.2 Budget for expenditure is limited to 90% of the prior year interest earned on investments. The increase of administrativeexpenses were due to the significant increase of audit fees.Reconciliation of budget deficit with the surplus in the statement of financial performanceNote2010/11R2009/10RNet surplus per the statement of financial performanceAdjusted for:Administration expensesMembers aidOther operating revenueNet deficit per approved budget10.210.210.1654 874(11 462)(653 278)(693 278)(703 702)1001003002 10010 77213 372ANNUAL REPORT FY 2010/2011 293

D E P A R T M E N T O F D E F E N C ESOUTH AFRICAN NATIONAL DEFENCE FORCE FUNDNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 March 2011Reconciliation of budget with the actualRECEIPTSOther operating revenueNote10.1Approvedbudget2010/2011R--Actual2010/2011R693 836693 836Difference:Budget lessActual2010/2011R(693 836)(693 836)PAYMENTSAdministration expensesMembers aid10.250 424653 278703 70238 962-38 96211 462653 278664 740294ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransASSURANCE REPORT OF THEAUDITOR-GENERAL TO PARLIAMENTON COMPLIANCE WITH SECTION 4OF THE NATIONAL CONVENTIONALARMS CONTROL ACT IN TERMSOF SECTION 12 OF THE NATIONALCONVENTIONAL ARMS CONTROLACT OF 2002,FOR THE YEAR ENDED 31 MARCH 2011I n t r o d u c t i o nI have performed my limited assurance engagement on the compliance by the National Conventional Arms Control Committee(NCACC) with section 4 of the National Conventional Arms Control Act, 2002 (Act No. 41 of 2002) (the Act), as required bysection 12 of the Act.To the fullest extent permitted by law, I do not accept or assume responsibility to anyone other than Parliament for my work, forthis report, or for the conclusions I have formed.N C A C C ' s r e s p o n s i b i l i t yThe NCACC is responsible for compliance with the Act and related regulations.A u d i t o r -G e n e r a l ' s r e s p o n s i b i l i t yAs required by section 12 of the Act, my responsibility is to conclude on compliance by the NCACC with section 4 of the Act.I performed my assurance engagement in accordance with the International Standard on Assurance Engagements (ISAE 3000),(Assurance Engagements Other Than Audits or Reviews of Historic Financial Information). That standard requires me to complywith the ethical requirements and plan and perform my assurance engagement to obtain sufficient appropriate evidenceregarding the subject matter of the engagement to support my assurance conclusion expressed below.S u m m a r y o f w o r k p e r f o r m e dAs the auditor of the NCACC, I have also audited the Department of Defence, which provides the secretariat to the NCACC, forthe period ended 31 March 2011. My limited assurance procedures included the following specific procedures:Inspecting the processes and structures established by the NCACC for effective control of trade in conventional arms.Inspecting the guidelines, structures and processes established by the NCACC for the scrutiny and assessment of the applicationfor a permit.Confirming that the committee liaises with relevant government agencies regarding the enforcement of the Act.ANNUAL REPORT FY 2010/2011 295

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransASSURANCE REPORT OF THE AUDITOR-GENERALTO PARLIAMENT ON COMPLIANCE WITH SECTION 4OF THE NATIONAL CONVENTIONAL ARMS CONTROLACT IN TERMS OF SECTION 12 OF THE NATIONALCONVENTIONAL ARMS CONTROL ACT OF 2002,for the year ended 31 March 2011Inspecting cases where the issue of a permit was refused by the NCACC and confirming that this had been done as requiredby section 14 of the Act.Inspecting on a sample basis permits issued to ensure that the conditions under which a permit is issued are complied withas detailed in the regulations.No compliance procedures were performed in the following areas of the NCACC's responsibilities:The evaluation of end user certificates received.Control evaluation at development and manufacturing companies.Compliance visit reports, conclusion and recommendations.Inspecting the register that must be kept in the prescribed form, indicating persons involved in the trade in conventionalarms.Inspecting the register for all permits issued and undertaking the following:Selecting a sample of permits issued and following it through to the register.Selecting a sample of entries in the register and following it through to the issued permits.Confirming that all reports issued had been issued as required by section 23 of the Act.An analysis to identify anomalies in reported data.Determining whether information supplied is relevant, reliable, comparable and understandable.For the purpose of my limited assurance conclusion, my evidence-gathering procedures were more limited than for a reasonableassurance engagement, and therefore less assurance was obtained than in a reasonable assurance engagement.I believe that the evidence obtained as part of my assurance engagement with the NCACC for the period ended 31 March 2011is sufficient and appropriate to provide a basis for my conclusion expressed below.C o n c l u s i o nIn my opinion, except for non-compliance with section 23(1)(b) of the Act as described in the finding below, nothing came tomy attention to indicate that the NCACC did not comply with section 4 of the Act in all material respects.296ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EDepartment of Defence and Military VeteransASSURANCE REPORT OF THE AUDITOR-GENERALTO PARLIAMENT ON COMPLIANCE WITH SECTION 4OF THE NATIONAL CONVENTIONAL ARMS CONTROLACT IN TERMS OF SECTION 12 OF THE NATIONALCONVENTIONAL ARMS CONTROL ACT OF 2002,for the year ended 31 March 2011F i n d i n gN o n -c o m p l i a n c e w i t h s e c t i o n 2 3 ( 1 ) ( b ) o f t h e A c tThe NCACC did not submit three quarterly reports (April to June 2010, July to September 2010 and October to December 2010)on all conventional arms export concluded during the preceding quarters to a committee of Parliament, as required in terms ofsection 23(1)(b) of the Act.Pretoria28 July 2011ANNUAL REPORT FY 2010/2011 297

D E P A R T M E N T O F D E F E N C EChapter 1GLOSSARY OFABBREVIATIONS AND ACRONYMSAADAACBAASBFI5 ACACCORDAFBALFAAMCAMDAMHUARMSCORARVASBASGISAAUAfrican Aerospace and DefenceArmaments Acquisition Control BoardAuditing and Assurance Standards BoardFI5 AircraftAfrican Centre for the Constructive Resolution of DisputesAir Force BaseAdvanced Light Fighter AircraftAccountability Management CommitteeAerospace, Maritime and Defence Industries AssociationArea Military Health UnitArmaments Corporation of South Africa LtdAntiretroviralArmy Support BaseAccelerated and Shared Growth Initiative for South AfricaAfrican UnionBEEBOSTBPSTBSCBlack Economic EmpowermentBasic Operational Sea TrainingBritish Peace Support TrainingBalanced ScorecardC 2CARC Def MatCD HRCFOC HRCHATSECCIC 4 I 3 RSCJ OpsC LogCMISCOTSCPXC SANDFCommand and ControlCentral African RepublicChief Defence MatérielChief Director Human ResourceChief Financial OfficerChief of Human ResourcesCombating HIV/Aids through Spiritual and Ethical ConductCounter-IntelligenceCommand and Control, Communications, Computers, Information,Intelligence, Infrastructure, Reconnaissance and SurveillanceChief Joint OperationsChief LogisticsCommand and Management Information SystemsCommercial Off-the-ShelfCommand Post ExerciseChief of the South African National Defence Force298ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ECSIRCSNDCSSCouncil for Scientific and Industrial ResearchCouncil for Support to National DefenceCore Service SystemDCAC I&ADEISDEISMDERIDFRDIDICTADIMSDISCDI DivDLSDDODDPBECDPEDPSADPSPDPWDRCDRIDSADSCDSTDTIDirectorate Conventional Arms Control Audits and InspectionsDefence Enterprise Information SystemDefence Enterprise Information System ManagementDefence Evaluation and Research InstituteDefence Foreign RelationsDefence IntelligenceDefence information Communication Technology ArchitecturesDirectorate Integrated Management SystemsDefence Intelligence Standing CommitteeDefence Intelligence DivisionDefence Legal Services DivisionDepartment of DefenceDepartmental Programme and Budget Evaluation CommitteeDepartment of Public EnterpriseDepartment of Public Service and AdministrationDefence Policy, Strategy and PlanningDepartment of Public WorksDemocratic Republic of the CongoDefence-Related IndustryDefence Services AsiaDefence Staff CouncilDepartment of Science and TechnologyDepartment of Trade and IndustryEFQMEISENEETDEXEuropean Foundation for Quality ManagementEnterprise Information SystemEstimates of National ExpenditureEducation, Training and DevelopmentExerciseFAZSIOFIFAFMDFMSFOSADFSEFTXFYForces Armées de la Zone Sud de I'Océan Indien(French Armed forces in the Southern Indian Ocean)Fédération Internationale de Football AssociationFinancial Management DivisionFinancial Management SystemForum of South African Directors-GeneralForce Structure ElementField Training ExerciseFinancial YearANNUAL REPORT FY 2010/2011 299

D E P A R T M E N T O F D E F E N C EGEPFGITOGOCsGovernment Employees' Pension FundGovernment Information Technology OfficerGeneral Officers CommandingHQHRHeadquartersHuman ResourcesIBSAICSICTICTSIFMSIG DODIPISDSCISSITIndia, Brazil and South AfricaInformation and Communications SystemInformation and Communication TechnologyInternational Cooperation, Trade and Security ClusterIntegrated Financial Management SystemInspector General Department of DefenceIntellectual PropertyInter-State Defence Security CommitteeInformation Security SystemInformation TechnologyJCPSJDJIMJIPSAJustice, Crime Prevention and Security ClusterJoint Defence CommitteeJoint, Interdepartmental and MultinationalJoint Initiative for Priority Skills AcquisitionLHDLIALLSLIRPLPDLanding Helicopter DockLessons Identified and Lessons Learned SystemLogistic Intervention and Realignment ProgrammeLanding Platform DockMAACMABMDSMAMEDUNSAMODMOUMPMP DivMPSPOMRCCMSDSMSFMTEFMTSFMilitary Attaché and Advisor CorpsMilitary Arbitration BoardMilitary Discipline Supplementary Measure ActMedical University of Southern AfricaMinistry of DefenceMemorandum of UnderstandingMember of ParliamentMilitary Police DivisionMilitary Policy, Strategy and Planning OfficeMaritime Rescue Coordination CentreMilitary Skill Development SystemMission Success FactorsMedium-Term Expenditure FrameworkMedium-Term Strategic FrameworkNATONorth Atlantic Treaty Organisation300ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C ENB SMSTNCACCNCAGSNDOTNDPWNEPADNICOCNIAIDNQFNSINaval Base Simon's TownNational Conventional Arms Control CommitteeNaval Coordination and Guidance of ShippingNational Department of TransportNational Department of Public WorksNew Partnership for African's DevelopmentNational Intelligence Co-ordinating CentreNational Institute of Allergy and Infectious DiseaseNational Qualification FrameworkNational System of InnovationOBSOCOHSOSDOperational Boat SquadronOfficer CommandingOccupational Health and SafetyOccupational Specific DispensationParaPCDPDSCPEPFARPFMAPMEPMTCPOAPSOPXDParachutePortfolio Committee on DefencePlenary Defence staff CouncilPresident's Emergency Plan for Aids ReliefPublic Finance Management ActPrime Mission EquipmentPeace Mission training CentreProgramme of ActionPeace Support OperationsPost-Exercise DiscussionR&DRABRAMPRegtRSAResearch and DevelopmentReligious Bodies and Advisor BoardsRepair and Maintenance ProgrammeRegimentRepublic of South AfricaSAAFSABSSACAASADCSADC BRIGSADESOSADRISAISAMHSSANSANADSouth African Air ForceSouth African Bureau of StandardsSouth African Civil Aviation AuthoritySouthern African Development CommunitySouthern African Development Community BrigadeSouth African Defence Export Support OrganisationSouth African Defence-Related IndustrySouth African IndustrySouth African Military Health ServiceSouth African NavySouth African Naval Armaments DepotANNUAL REPORT FY 2010/2011 301

D E P A R T M E N T O F D E F E N C ESANDFSAMVASAPSSAQASASSETASBPSCSCAMPSCOASec DefSGSITASMESMSSMJSSRSouth African National Defence ForceSouth African Military Veterans' AssociationSouth African Police ServiceSouth African Qualification AuthoritySafety and Security Sector Education and Training AuthorityStrategic Business PlanSecretariat CouncilStrategic Capital Acquisition Master PlanStandard Chart of AccountsSecretary of DefenceSurgeon-GeneralState Information Technology AgencySmall and Medium-Sized EnterprisesSenior Management ServiceSchool of Military JusticeSecurity Sector ReformTBDTo Be DeterminedUKUNUNISAUSAUSAFUNSCUnited KingdomUnited NationsUniversity of South AfricaUnited States of AmericaUnited States Air ForceUnited National Security CouncilVIPVery Important PersonWANWATCWHOWide Area NetworkWest African Training CruiseWorld Health OrganisationYFTPYouth Foundation Training Programme302ANNUAL REPORT FY 2010/2011

D E P A R T M E N T O F D E F E N C EANNUAL REPORT FY 2010/2011 303