Understanding and Using this Act > National Treasury Guidelines for Annual Reporting

It is important that institutions, after completion of the financial year, report on the institution’s actual performance as measured against pre-determined objectives.

The report also needs to show that money has been spent in accordance with the appropriations and priorities of Parliament or the relevant Provincial Legislature. To accomplish this, institutions need to adhere to the following guidelines for the compilation of annual reports:

PART 1: GENERAL INFORMATION

PART 2: HUMAN RESOURCES MANAGEMENT

PART 3: PROGRAMME PERFORMANCE

PART 4: AUDIT REPORTS, FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION

PART 1: GENERAL INFORMATION

The following information must be provided under this particular part:

Submission of the annual report to the executive authority

Under this particular sub-heading, the accounting officer should formally submit the annual report to the executive authority responsible for the institution.

Introduction by the head of the institution

The head of the institution should summarize the institution’s highlights and indicate publications and key documents published for the period of reporting.

Information on the Ministry

A summary should be given as to what work the Ministry is involved with as well as (if practical) the names of institution’s falling under the executive authority’s control. The executive authority should also give an indication of the bills that he or she has submitted to the legislature during the financial year. Further, the executive authority’s official visits abroad, indicating the dates and purposes of visit would ideally complete the information required under this sub-heading.

Mission statement

The mission statement must be a concise statement indicating the institution’s fundamental unique purpose that distinguishes it from any other organization of its type and identifies the scope of its operations in terms of its products, services and the market that it serves. The mission is a general statement of an institution’s reason for existence. The mission defines what the institution does, whom it serves and how this should be done.

Legislative mandate

The legislative mandate refers to the legislation that governs the existence of the institution and its operations (core mandates). An indication must also be given of the trading and/or public entities controlled by the institution, clearly indicating the:

•	legislation under which the trading and/or public entity was established;

•	functions of each trading and/or public entity; and

•	accountability arrangements established between the accounting officer/executive authority and the management of the trading and/or public entity.

PART 2: HUMAN RESOURCES MANAGEMENT

Public Service Regulations

The executive authority shall:

•

in terms of sections 92(3)(b) or 133(3)(b) of the Constitution, 1996, include in the annual report, contemplated in sections 40(1)(d)(i), 40(3), 65(1)(a) and 65(2) of the Public Finance Management Act (PFMA), 1999 and paragraph 18.5.1 of the Treasury Regulations, the information set out in regulations III J2 to J11; and

•	in accordance with section 65(1)(a) of the PFMA, within one month after the accounting officer for the department received its audit report, table in the relevant legislature that annual report, and simultaneously submit that annual report to the relevant treasury, the media and the public.

The following human resource requirements (as required by Part III J of the Public Service Regulations, 1999) must where possible, be presented in a graphic format.

Planning and service delivery

The core mandates should be addressed under ‘Legislative mandates’ in Part 1, whereas the functions and objectives of the department should be addressed under ‘Organisation’ (Part 2) and Programme Performance (Part 3) respectively.

Organisation

•	The organisational structure, briefly indicating the functions of each branch (point above) and the approved establishment;

•	The employment numbers and vacancies indicated by component, grade and nature of employment; and

•	The employment number of persons additional to the approved establishment.

Job evaluation

•	The number of posts evaluated, upgraded and downgraded all in accordance with the Code of Remuneration (CORE) and grade.

•	The number of employees promoted as a result of posts that were upgraded, by race, gender and disability.

•	The number of employees whose remuneration exceeds the grade determined by a job evaluation and the reasons for each deviation, by CORE.

Remuneration

•	The percentage of the budget excluding transfer payments, expenditure on land and buildings, as well as miscellaneous payments spent on —

o	total personnel costs;

o	administrative expenditure; and

o	professional and special services.

•	The personnel costs in intervals of R20 000, by race, gender, disability and CORE.

•	The percentage of total personnel costs spent on the senior management service.

•	The cost of overtime, allowances and benefits expressed as a percentage of total personnel costs.

Affirmative action, recruitment, promotions and termination of services

•	The progress made in terms of the affirmative action with regard to:

o	A policy statement that sets out the institution’s commitment to affirmative action and how that policy will be implemented;

o	Numeric and time-bound targets for achieving representativeness;

o	Annual statistics on recruitment, training and promotion of persons historically disadvantaged within each grade of each occupational category; and

o	A plan to redress numeric under-representativeness and to report the advancement of persons historically disadvantaged.

•	The number of employees recruited by grade and occupation, as well as by race, gender and disability;

•	The number of employees promoted by grade and occupation, as well as by race, gender and disability;

•	The number of employees’ services terminated by grade and occupation, as well as by race, gender and disability; and

•	The number, occupations and grades of foreign appointees.

Performance management and skills development

•	Any rewards made for performance by grade, CORE, race, gender and disability;

•	The number of employees falling into each performance category, by race, gender and disability in each grade in each CORE.

•	Targets for training in the training plan, as well as progress in reaching them;

•	The departmental training budget and actual amounts spent on each training target by race, gender and disability in each grade in each CORE.

•	The number and type of training programmes conducted externally and internally.

Injury, illness and death

The number and nature of incidents of injury, illness and death resulting from official duty or the work environment.

Collective agreements

The number and subject matter of collective agreements entered into.

Sick leave

•	The average number of days sick leave taken by employees in the department, indicated according to their grades and occupation;

•	The total number of days’ sick leave taken by employees in a department;

•	The estimated cost to the department of the leave so taken; and

•	The number of employees who took more than 15 continuous days’ sick leave in the year under review.

Ill- Health

The number of employees discharged due to ill-health.

Disciplinary steps

Disciplinary steps taken against employees for, inter alia, unauthorized, irregular and fruitless and wasteful expenditure.

PART 3: PROGRAMME PERFORMANCE

For the 2000/2001 financial year, the annual reporting framework for programme performance must be in accordance with the programmes (main divisions within the vote) as presented to Parliament and as reflected in the National Treasury’s publications ‘ESTIMATE OF EXPENDITURE TO BE DEFRAYED FROM THE NATIONAL REVENUE ACCOUNT (Blue Book)’ and the NATIONAL EXPENDITURE SURVEY (NES). As from the financial year 2001/2002, the framework must be in accordance with the NATIONAL MEDIUM TERM EXPENDITURE ESTIMATES (NMTEE).

The following serves a format for this particular part, using the Department of Trade and Industry as an example:

Aim of the Vote

The aim of the Department of Trade and Industry is………

Key programmes and achievements

Requiring departments to publish information on key programmes and achievements strengthens the link between annual reporting and budgeting.

There must be a distinct link between the annual report and the programmes specified in the budget documentation.

The Department of Trade and Industry has achieved ………….

Overview and key policy developments: Period covered by the annual report (financial year)

Major policy developments that have taken place during the period of review must be reflected here.

The Department of Trade and Industry has continued its …………..

Key areas of work undertaken by the Department during the year of reporting were ……

The Department, in collaboration with the Department of ………

PROGRAMME 1: ADMINISTRATION

Aim:

To conduct the overall management of the Department

Policy and developments: ……………………………..

Output and service delivery trends: ……………………………..

PROGRAMME 2: TRADE, INVESTMENT AND ENTREPRENEURIAL DEVELOPMENT

Aim:

To facilitate trade, investment and entrepreneurial development through sectoral policies, investment, export assistance, technology and support to SMME’s

Policy developments:

The Trade, Investment and Entrepreneurial Development programme consists of the following eleven sub-programmes:

(1)	Investment support

(2)	National empowering

(3)	Environmental Support Fund

(4)	Competitiveness Fund

(5)	Foreign investment promotion and international marketing

(6)	Spatial development, initiative and investment facilitation

(7)	Industry development and promotion

(8)	Promotion of standardisation, quality and environmental management in industry

(9)	Technology enhancement in industry

(10)	Entrepreneurial development and promotion

(11)	Trade facilitation

The Environmental Support Fund (ESF) focused on ……

•	The Department embarked on a quality development programme ….

•	The Department supported the following ……

The three main activities with the sub-programme Industry development and promotion included:

•	Sectoral industrial promotion through the implementation of strategies for key industries in each sector and the role of the Board on Tariffs and Trade

•	Promoting industrial development through appropriate customs and excise duties, tariffs and trade investigations in terms of Act 107 of 1986

•	Contribution to the SABS for the setting up of an emission test facility

Outputs and service delivery trends

Sub-programmes	Outputs	*Service delivery indicators	Actual performance
Investment support		(Quantity indicators)	Actual quantity
National empowering		The Dept supports investment and manufacturing activities through…......
Environmental Support Fund		The sectoral Partnership Fund gives financial assistance to …...
Competitiveness Fund		Approximately 200 applications are dealt with each year …...	220 applications were processed
Foreign investment promotion and international marketing
Spatial development, initiative and investment facilitation Industrial development and promotion
Promotion of standardisation, quality and environmental management in industry
Technology enhancement in industry
Entrepreneurial development and promotion
Trade facilitation

*Although section 27(4) of the PFMA (measurable objectives) has been delayed for implementation from 1 August 2002 (2003/2004 financial year), departments are expected to start with initiatives in preparation for its implementation. For the 2000/2001 to 2002/2003 financial years, departments should at least try and furnish the information (as set out in the strategic and operational plans and budget documentation) in the above format, even if not in totality, together with the actual performance.

Annexure A provides a guideline for the establishment of Service Delivery Indicators.

Transfer payments

Information on transfer payments per organisation for the entire financial year must be tabulated as follows:

NAME OF INSTITUTION	AMOUNT TRANSFERRED
S A Bureau of Standards	R 100 000
S A Quality Institute	R 150 000
Council for Scientific and Industrial Research (CSIR)	R 200 000

A report must also be included on the institution’s compliance with section 38(1)(j) of the PFMA.

PROGRAMME 3: TRADE POLICY AND GLOBAL REPOSITIONING

(Ditto)

PROGRAMME 4: BUSINESS REGULATION AND CONSUMER SERVICES

(Ditto)

PART 4: AUDIT REPORTS, FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION

This part must consist of the following information relevant to the institution:

•	The Auditor-General’s report on the financial statements;

•	The audit committee’s report on the effectiveness of internal controls; and

•	The audited financial statements.

The annual financial statements as required by the Public Finance Management Act (PFMA), 1999 and the Treasury Regulations, must consist of the following:

•	A balance sheet;

•	An income statement;

•	A cash flow statement;

•	Notes to the financial statements; and

•	Any other information as may be determined by the Accounting Standards Board.

The Office of the Accountant-General will furnish the formats of the financial statements and guidelines for its completion.

In addition to the notes prescribed by the Office of the Accountant-General (in consultation with the Office of the Auditor-General), the following additional information must also be disclosed as notes, as required by the Treasury Regulations:

•	Information on the institution’s tariff policy, including any free service(s) that were rendered, but not taken into account in the budget and which could have yielded significant revenue;

•	All contingent liabilities incurred during the financial year;

•	Any material losses recovered or written off;

•	Any material losses through criminal conduct, and any unauthorized, irregular, fruitless and wasteful expenditure that occurred during the financial year; and

•	The use of foreign aid assistance, detailing the source and intended use of the assistance (including the value of any aid-in-kind expressed in Rands), performance information on the institution’s use of the assistance, and any pending applications for assistance.

Public Finance Management Act, 1999 (Act No. 1 of 1999)

Understanding and Using this Act

National Treasury Guidelines for Annual Reporting

5. Contents of the Annual Report