GDF Annual Report - Gauteng Provincial Treasury

SECTION 3: REPORT ON THE PERFORMANCE OF PROGRAMMESCompliance to Statutory tax requirementIn the year under review the unit has successfullycomplied with the tax legislation in submitting theEMP 501 on the required due date to SARS. This hasensured that GPG employees receive the IRP5s on timeand in turn comply with the tax legislation regardingsubmission of tax returns.Provincial Revenue Fund and Consolidated AnnualFinancial StatementsThe Provincial Revenue Fund attained a clean auditopinion, which is an improvement on the previousfinancial year audit opinion. The unit has also finalisedthe consolidated financial statements and duly tabledthem in the legislature.Unauthorised ExpenditureThe unauthorised expenditure of R1.4 billion wasapproved by the legislature and has since been clearedin the books of the affected departments.Financial Management Capability Maturity ModelThe unit has successfully assisted departments tofinalise the survey of Financial Maturity CapabilityModel and has used the results to formulate an actionplan to assist the departments in addressing identifiedinefficiencies.Appointment of provincial bankerThe unit has successfully appointed a new provincialbanking services provider (FNB) and has since migratedfrom the previous service provider.Cash Flow ManagementThe unit had to use an overdraft facility in the first quarterof the financial year as a result of cash requirementpressures from departments. However during the latterhalf of the financial year, GDF managed to markedlyimprove the situation and operated without theoverdraft and closed the year with a positive balance.Other InitiativesIn our endeavour to monitor the departments’compliance to PFMA, Treasury regulations and DORAwe implemented the following:• Enhanced the system to produce a report to assistin monitoring the departments’ accruals.• Configured the system to schedule the payment ofinvoices in accordance to the terms of paymentsor in terms of priority of the invoice.• Issued guidelines to departments regardingthe use of manual orders except in emergencysituations.• Ring - fenced all schedule 5 conditional grants andinfrastructure funds to ensure that the funds arebeing utilised for the purpose intended.We encountered challenges during the year underreview and these include:• Budget constraints which impacted adversely onthe implementation of the following two projects:~ Automation of the debts take on process.~ Cash management system.• Increase in departmental debts for collection bythe unit due to delays in termination of employeeson the system. Departments’ delay in paying thesuppliers has resulted in suppliers refusing ordelaying in settling their debts• The departments’ continued demand for cash thatexceed their cash allocation remains an ongoingand serious challenge for the unit. GDF hasimplemented a process that ensures that monthlycash allocation to departments are congruent tocash availability in the province.108108Annual Report 2010 / 2011