SAMSA Annual Report 2015 - 2016

CHAPTER 06 ANNUAL FINANCIAL STATEMENTS ANNUAL FINANCIAL STATEMENTS CHAPTER 06
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016
Reconciliation of provisions - 2015
Opening
Balance
R ‘000
Additions
R ‘000
Utilised during
the year
R ‘000
Total
R ‘000
Analysis of expenditure awaiting condonation per age classification
2016
R ‘000
2015
R ‘000
Onerous contract 5 704 - (1 387) 4 317
Leave pay provision 6 686 1 642 (333) 7 995
Bonus provision 11 427 12 106 - 23 533
23 817 13 748 (1 720) 35 845
Opening balance 133 355 35 061
Current year 77 137 16 352
Prior year period adjustment (expenditure on and before 2014/03/31) - 28 870
Adjustment to prior period - 53 072
210 492 133 355
Leave pay, service bonus and onerous contract
The leave pay provision and service bonus provisions are based on the liability for the current leave cycle not utilised and bonuses
payable respectively. The onerous contract provision is based on the signed lease agreement. The utilised amount recognised for the
onerous contract provision has been reduced to ensure that the balance ties up to the amount which still remains to be paid on the
lease agreement.
21. IRREGULAR EXPENDITURE
2016
R ‘000
2015
R ‘000
Opening balance 133 355 35 061
Prior year period adjustment (expenditure on and before 2014/03/31) - 28 870
Irregular Expenditure - current year 77 137 16 352
Less: Amounts condoned - -
Less: Amounts recoverable (not condoned) - -
Less: Amounts not recoverable - -
Adjustment to prior period - 53 072
210 492 133 355
Irregular expenditure of R36.2 million was incurred during the year due to the utilisation of service providers whose contracts had
either expired or were not in place. The Authority has also adjusted prior year figures for unsolicited bids process not followed by an
additional R11.5 million for the additional amounts spent on the contract. The amount of R22.45 million has also been recognised as
irregular expenditure for a contract awarded in 2011 as a result of the bid adjudication process that was not done in line with Treasury
Regulations. Additional amounts of R48.0 million have been recognised in the prior year due to service providers that were utilised from
2010 up to 2015 without valid contracts in place.
There are still outstanding matters regarding the introduction and payment of the 13th cheque to the SAMSA staff members approved
by the previous Board. The outstanding matters relate to the clarification of the issue of the payments being self-funded and the
matter is being considered for finalisation by the current Board. As a result, an amount of R10.2 million has been recognised as irregular
expenditure. A CPI salary adjustment for the former CEO has not yet been ratified by the Board and has been included in irregular
expenditure.
Staff bonuses amounting to R4.9 million were paid to staff members in June 2016 when SAMSA did not have a fully constituted Board.
The bonus payments have not yet been ratified by the Board.
The former CEO went on an international trip just after the new Board had been appointed in July 2015 to attend a function at the
International Maritime Organisation (IMO). As there was no Board approval for the trip, the amount spent has been recognised as
irregular expenditure.
SAMSA’s tariffs have only been adjusted once since 2009 by CPI which led to the organisation not being able to generate enough
revenue to cover its increasing costs. The organisation also had mandates which were transferred from the Department of Transport
and were either under-funded or unfunded. It is against this backdrop that the Authority had to prepare balanced budgets based on
its projected revenues. The reality however, was that the balanced budgets could not be fully adhered to without compromising the
ability of the organisation to fulfil its legal mandates. This resulted in a budget overspend of R25.2 million which has been recognised as
irregular expenditure.
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