Chapter 2 - P rogramme 1 - Department of Defence

| Financial Performance |
Annual Report FY 2007 - 2008 224
| Department of Defence | Vote 20 |
REPORT OF THE ACCOUNTING OFFICER
for the year ended 31 March 2008 (continued)
2.2.3 Tariffs unique to the DOD as determined by the tariff owner and where the tariff structure was
approved by the National Treasury.
2.2.4 Tariffs agreed to by international organisations such as United Nations and the African Union.
2.3 Free services
The following free services were provided by the DOD during the reporting period:
2.3.1 The presentation of a seminar (Seminar 2) by the SA Army in partnership with the Institute for
Security Studies to the amount of Rm0, 400.
2.3.2 The recovery by the SA Army of a bus belonging to Drifter Adventure Tours that had driven into
a river to the amount of R0, 001.
2.3.3 Harbour services provided by the SA Navy to various vessels, to the total amount of Rm0, 123.
2.4 Inventory. The DOD is unable to disclose the accurate monetary value of its inventory at year-end
because accurate prices are not carried in current DOD logistic systems. The LIRP is currently in
process of cleaning up data to be able to report the accurate value of inventory in the future.
3. Capacity constraints and the impact thereof
3.1 Capacity constraints impacted on the department in two areas, i.e. force preparation and
expenditure.
3.2 Readiness levels required for peace support missions and internal deployments were largely
satisfactorily achieved with limited constraints and all its ordered commitments were successfully
executed. Parliament, the Executive Cabinet and the Minister of Public Service and Administration
acknowledged the excellent performance of the SANDF during the public sector labour action of
June 2007.
3.3 Human resources and structural constraints, i.e. critical skills shortages and the difficulties in
staffing logistical and administrative posts, due to organisational restructuring that took place.
Remedial measures have been implemented to systematically reduce the impact of these
constraints on the department in future, e.g. the establishment of a Logistic Intervention and
Realignment Programme (LIRP) to address the issues that are hampering joint logistic services
and the rebuilding of the SA Army Support Formation Technical Service Corps Reserve units.
The efficacy of the LIRP will thus be realised and reported accordingly as the project unfolds. It
is thus anticipated that the project will fast track the alignment of all logistical processes with the
holistic national asset management framework. The above will have direct effect on the current
and future DOD resource base as well as skills and competency base to ensure sustainability of
the recapitalisation of asset management within the DOD.
3.4 Within the acquisition environment the constraint presented by the dependency on external
companies to provide the resources required remains a challenge and continues to be a concern.