annrep 1011 1 to 148.qxp - Department of Defence

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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
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