Chapter 2 - P rogramme 1 - Department of Defence

| Department of Defence | Vote 20 |
REPORT OF THE ACCOUNTING OFFICER
for the year ended 31 March 2008 (continued)
1.2.3 The following are indications of the extent of the increases:
• Foreign exchange rate adjustments - Rm882
• General modernisation - Rm300
• Military skills development system - Rm50
• Salary adjustments - Rm10
• Remuneration of health professionals - Rm14
1.2.4 The Special Defence Account (34,76%) and Landward Defence (16,26%) remained the two
largest programmes within the Defence Vote. The year-on-year increase of 20% in the Joint
Support programme was mainly due to the increased provision for the maintenance and repair
of defence facilities and infrastructure, the centralisation of funds for the training provided at
the SA National War College and the Warrant Officer’s Academy as well as the provision of
funds to the Military Academy to provide candidate officer training to military skills development
system members during their second year of training. The depreciation of the Rand against other
major currencies has resulted in a turnaround in the continued decrease of the projected cost
of the Strategic Defence Procurement Programme from Rb52, 944 (2003/2004) to Rb48, 744
(2004/2005) to Rb45, 615 (2005/2006) to Rb44, 793 (2006/2007) to an estimated Rb47, 483 for
the financial year 2007/2008.
1.2.5 Exploring the financial year 2007/2008 budget from an economic classification perspective,
Transfers and Subsidies (37,06%) and Compensation of Employees (36,55%) represented 73,61%
of the Vote, leaving an available 26,39% for the operating of the DOD. Significant Standard Chart
of Accounts classifications provided for were maintenance, repair and running costs (Rm2, 223),
inventory (Rm1, 225), computer services (Rm740), travel and subsistence (Rm426), operating
leases (Rm372) and consultants, contractors and special services (Rm339).
1.3 Defence Adjustment Vote: Rm369, 530 (Adjustment Appropriation Act, 2007)
1.3.1 The Defence Vote was increased by Rm369, 530 through the Adjustment Vote due to the
following:
1.3.1.1 Self financing expenditure resulting from the sale of equipment during the previous financial year
originally procured through:
• The General Defence Account
• The Special Defence Account
- Rm6, 8
- Rm125, 423
1.3.1.2 Roll over commitments from the previous financial year amounting to Rm83, 007 for:
• Repair and maintenance of facilities - Rm58, 084
• Upgrading and construction of buildings - Rm24, 923
1.3.1.3 Reimbursement to the amount of Rm45, 680 for costs incurred by the DOD in support of national
and provincial health departments during the national public service strike of June 2007.
1.3.1.4 Salary increases to the amount of Rm108, 620 resulting from the Public Service Bargaining Coordinating
Council Resolution.
221 Annual Report FY 2007 - 2008
| Financial Performance |