ANNUAL PERFORMANCE PLAN 2016/17 WITH MTEF BUDGET 2016/17 2018/19 1
PART A: STRATEGIC OVERVIEW The SADPMR comprises of three programmes, namely:- Programme 1: Administration The purpose of this programme is to enable the SADPMR to deliver on its mandate by providing support management services and administrative support. It consists of the following sub-programmes:- Finance; Human Resources; Corporate Governance; Communication; Information Communication Technology (ICT); Legal Services; Internal Audit and Security. The main focus of this programme is to strengthen compliance and governance with the Regulator. The priority focus areas will include:- Improving service delivery; Facilitating alignment of budget and spending to strategy; Improving controls to achieve clean audit outcomes; and Enforcing compliance with the PFMA and other governance legislation. Programme 2: Diamond Trade The purpose of this programme is to regulate and facilitate the buying, selling, exporting and importing of diamonds. This is to ensure equitable access and local beneficiation of diamonds as well as compliance with the Kimberley Process Certification Scheme (KPCS). The programme consists of the following sub-programmes:- Diamond Exchange and Export Centre (DEEC); Government Diamond Valuator (GDV) and Kimberley Process Certification Scheme (KPCS). 2
Programme 3: The purpose of this programme is to enforce compliance with the Diamond Act, Precious metals Act as well as the Diamond Export (Administration) Levy Act. The programme consists of the following sub-programme:- Licensing Diamond Inspectorate Precious Metals and Beneficiation The focus of this programme is twofold: (a) to issue licenses for diamond and precious metals businesses for trade and beneficiation; (b) inspections to ensure transformation and adherence to the legislation. 3
PART B: BUDGET OVERVIEW Budget Estimates 2016/17 to 2018/19 R thousand 2016/17 /18 2018/19 Revenue Own Revenue Generated 34 440 36 506 38 696 Government Funding 45 878 48 631 51 549 Third Party Funding 0 0 0 Total Revenue 80 318 85 137 90 245 Service Delivery Costs 79 687 84 468 89 536 Surplus/Deficit 631 669 709 Programme 1 Administration Programme 2 Diamond Trade Programme 3 4
R thousand 2016/17 /18 2018/19 This budget has been allocated proportionally to the three programmes of the Regulator to enable them to deliver services in line with set strategic objectives. In view of the limited resources appropriated to the Regulator, management is committed to exercise sound financial management so that more is achieved with less. The Regulator will continue to identify areas which can generate revenue to augment the allocation while austerity measures to eliminate unnecessary spending will be implemented. 5
PART C: PROGRAMMES/STRATEGIC OBJECTIVES Schedule of performance indicators and targets for 2016/17 to /18 (a) PROGRAMME 1: ADMINISTRATION Strategic Objective To enforce compliance with the legislative requirements Justification/Key Activities INTERNAL Comply with Legislation, policies and procedures Improve organisational capacity for maximum execution of excellence Implement the approved Human Resource (HR) Plan Implement the approved SADPMR communication policy Implement Minimum Information Security Standards (MISS) Develop action plans to address audit findings Provide legal support to the Regulator 6
AUDITED ACTUAL PERFORMANCE Estimated performance at 30 June MEDIUM-TERM TARGETS Actions /Strategic initiatives Who When Performance Indicator(s) 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 Reduction in the number of repeat audit findings 0 6 2 5 Less than 5 Less than 5 Less than 5 Implement the recommended corrective measures All programme s Number of HR plan pillars implemented Developm ent of the HR plan Approval of the HR plan 5 5 5 5 5 Implement the following HR pillars; Employer/ employee relations management PMDS HRD strategy OD practices policy/ Implement Talent Management strategy Administrati on Number of engagements with internal and external stakeholders N/a 12 12 12 12 12 12 Develop a communication plan for internal and external stakeholders Administrati on 7
AUDITED ACTUAL PERFORMANCE Estimated performance at 30 June MEDIUM-TERM TARGETS Actions /Strategic initiatives Who When Performance Indicator(s) 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 Number of MSP components implemented N/a N/a Master System Plan approved 2 2 2 2 Implementation of Disaster recovery plan Development and implementation of Web admin system Administrati on Risk mitigation measures implemented n/a n/a n/a 3 3 3 3 Conduct Emergency evacuation drills Submit employees security-vetting forms to SSA Implementation of vetting procedures Administrati on Percentage of matters referred for legal advice and opinions addressed within 30 days 100% 100% 100% requests received and addressed requests received and addressed requests received and addressed requests received and addressed Drafting, reviewing commenting, and recommending Administrati on 8
AUDITED ACTUAL PERFORMANCE Estimated performance at 30 June MEDIUM-TERM TARGETS Actions /Strategic initiatives Who When Performance Indicator(s) 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 Percentage of legal opinions obtained on behalf of the SADPMR n/a n/a n/a matters addressed matters addressed matters addressed Facilitate the review of the Codes of Good Practice applicable to diamonds and precious metals Administrati on Percentage of Contracts and SLA s vetted within 30 days 100% 100% 100% contracts vetted contracts vetted contracts vetted contracts vetted Drafting, reviewing, comment, and recommending of contracts Administrati on 2016 Quarterly Targets Performance Indicator(s) 2015/16 Q1 Q2 Q3 Q4 Actions /Strategic initiatives Who When Reduction in the number of repeat audit findings 5 0 0 3 2 Develop or review Policies, procedures/guidelines All programmes Number of HR plan pillars implemented 5 5 5 5 5 Implement the following HR pillars; Employer/ employee relations management Administratio n PMDS HRD policy/ strategy OD practices 9
Performance Indicator(s) 2015/16 Q1 Q2 Q3 Q4 Actions /Strategic initiatives Who When Implement Talent Management strategy Number of engagements with internal and external stakeholders 12 3 3 3 3 Develop an communication plan for internal and external stakeholders Administratio n Number of MSP components implemented 2 0 1 0 1 Implementation of Disaster recovery plan Development and implementation of Web admin system Administratio n Risk mitigation measures implemented 3 0 1 1 1 Conduct Emergency evacuation drills Implementation of vetting procedures Administratio n Percentage of matters referred for legal advice and opinions addressed within 30 days requests received and addressed 100% 100% 100% 100% Drafting, reviewing commenting, and recommending Administratio n Percentage of legal opinions obtained on behalf of the SADPMR matters addressed matters matters addressed matters addressed addressed matters addressed Facilitate the review of the Codes of Good Practice applicable to diamonds and precious metals Administratio n 10
Performance Indicator(s) 2015/16 Q1 Q2 Q3 Q4 Actions /Strategic initiatives Who When Percentage of Contracts and SLA s vetted within 30 days contracts vetted contracts vetted contracts vetted contracts vetted contracts vetted Drafting, reviewing, comment, and recommending of contracts Administratio n (b) PROGRAMME 2: DIAMOND TRADE Strategic Objective Justification/Key Activities COMPETITIVENESS To improve competitiveness, sustainable development and job creation in the diamond and precious metals industry DEEC - Facilitate diamond trade SUSTAINABLE DEVELOPMENT To promote equitable access to resources for local beneficiation Facilitate skills development initiatives for the industries Increase access to diamonds for local beneficiators Implement the diamond marketing strategy of the DEEC To enforce compliance with the legislative requirements Provide diamond valuation services 11
AUDITED ACTUAL PERFORMANCE ESTIMATED MEDIUM-TERM TARGETS Actions /Strategic PERFORMANC initiatives E as at 30 June Who When Performance Indicator(s) 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 Number of skills initiatives facilitated for the industries 0 0 2 2 2 2 2 Provide training on GDV planning machines; Facilitate training in diamond valuation Diamon d Trade Number of Beneficiators accessing the DEEC 0 0 176 287 180 185 190 Implementation of the diamond marketing strategy of the DEEC Promote local beneficiation by allocating certain viewing rooms to Beneficiators Diamon d Trade 12
Number of clients accessing DEEC 1234 N/a 3546 3550 1400 3550 3560 Implement the DEEC Marketing strategy Diamon d Trade Percentage valuations conducted of diamonds offered/ presented diamonds offered/ presented diamonds offered/ presented diamonds offered/ presented diamonds offered/ presented diamonds offered/ presented diamonds offered/ presented Implement the Diamonds Act and related legislation Diamon d Trade % of disputes on valuations regarding fair market value lodged n/a n/a n/a 0 2% 2% 2% Implement the Diamonds Act and related legislation Diamon d Trade % compliance to KPCS requirements 100% complianc e with KPCS minimum requirem ents 100% compliance 100% compliance 100% compliance with KPCS with KPCS with KPCS minimum minimum minimum requirements requirements requirements 100% compliance with KPCS requirements 100% compliance with KPCS requirements 100% compliance with KPCS requirements Implement KPCS statutes and related legislation Issuing of KPCS certificates Submission of quarterly reports (statistics) Diamon d Trade 13
Quarterly Targets Performance Indicator(s) 2015/16 Q1 Q2 Q3 Q4 Actions /Strategic initiatives Who When Number of skills initiatives facilitated for the industries 2 0 1 0 1 Provide training on GDV planning machines; Facilitate training in diamond valuation Diamond Trade Increase in numbers Beneficiators trading at the DEEC 290 70 75 75 70 Implementation of the diamond marketing strategy of the DEEC Promote local beneficiation by allocating certain viewing rooms to Beneficiators Diamond Trade Number of clients accessing DEEC 3550 900 870 880 900 Implement the DEEC Marketing strategy Diamond Trade % of valuations conducted at fair market value diamonds offered/ presented diamonds offered/ presented diamonds offered/ presented diamonds offered/ presented diamonds offered/ presented Implement the Diamonds Act and related legislation Diamond Trade % of disputes on valuations regarding fair market value lodged less than 2% Less than 2% Less than 2% Less than 2% Less than 2% Implement the Diamonds Act and related legislation Diamond Trade 14
Performance Indicator(s) 2015/16 Q1 Q2 Q3 Q4 Actions /Strategic initiatives Who When % compliance to KPCS and relevant legislation 100% complianc e with KPCS minimum requireme nts 100% compliance 100% compliance 100% compliance 100% compliance with KPCS with KPCS with KPCS with KPCS minimum minimum minimum minimum requirements requirements requirements requirements Implement KPCS statutes and related legislation Issuing of KPCS certificates Submission of quarterly reports (statistics) Diamond Trade 15
(c) PROGRAMME 3: REGULATORY COMPLIANCE Strategic Objective Justification/Key Activities COMPETITIVENES Issue licenses to enable diamond and PM trade. To improve competitiveness, sustainable development and job creation in the diamond and precious metals industry SUSTAINABLE DEVELOPMENT BUSINESS SUSTAINALIBITY - Assist prospective entrepreneurs and inactive beneficiation licensees in the diamond and precious metals industries Facilitate skills development initiatives for the industries JOB CREATION Oversee the provision for issuing of beneficiation licenses To enforce compliance with the legislative requirements EXTERNAL Oversee the provision of the compliance audits on licensees Oversee the provision of inspection services within the diamond and precious metals sectors To transform the diamonds and precious metals industries Promote participation of HDSAs in the diamond and precious metals industries Decrease the number of inactive businesses of the historically disadvantaged individuals 16
AUDITED ACTUAL PERFORMANCE ESTIMATED PERFORMANCE as at 30 June MEDIUM-TERM TARGETS Actions /Strategic initiatives Who When Performance Indicator(s) 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 Number of licenses issued within 60 working days based on the completeness of the applications 721 287 136 150 155 160 165 Implement the Broad Based Socio-Economic Empowerment Charter Number of license renewals processed within 60 working days based on completeness of the applications N/A N/A N/A 360 80 81 82 Implement the Broad Based Socio-Economic Empowerment Charter Number of new entrepreneurs assisted n/a 0 8 8 9 10 11 Assist new entrepreneurs in line with new licence issued Number of BBSEEC compliance inspection/audits conducted 382 217 405 272 300 305 310 Implement the Diamonds Act and Precious Metals Act Assess ownership (HDSA) Skills development 17
AUDITED ACTUAL PERFORMANCE ESTIMATED PERFORMANCE as at 30 June MEDIUM-TERM TARGETS Actions /Strategic initiatives Who When Performance Indicator(s) 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 Monitoring of fronting through audit inspections Number of inspections conducted 725 965 1444 1444 1445 1446 1448 Implement the Diamond and precious metals legislation Number of Beneficiation licences issued 467 155 63 63 64 65 66 Implement the Diamonds Act and Precious Metals Act Process license applications as per legislative requirements Business Case Document Developed (State Bourse) n/a n/a n/a Establish baseline Consultati on with stakehold ers Draft business case Approval of business case Administratio n 18
AUDITED ACTUAL PERFORMANCE ESTIMATED PERFORMANCE as at 30 June MEDIUM-TERM TARGETS Actions /Strategic initiatives Who When Performance Indicator(s) 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 Workshops information conducted and N/a n/a n/a Establish baseline 4 4 4 Implement transformation plan for the Diamonds and PMs Process license applications as per legislative requirements Number of inactive businesses engaged N/a N/a 22 30 23 24 25 Facilitate a workshop for inactive licensees with regards to: Diamond and Precious metal product suppliers, import and export and beneficiation. Where and how diamonds and precious metal may be accessed Existing Gold loan and platinum advance schemes Inspection Checks conducted on business premises for approval 19
AUDITED ACTUAL PERFORMANCE ESTIMATED PERFORMANCE as at 30 June MEDIUM-TERM TARGETS Actions /Strategic initiatives Who When Performance Indicator(s) 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 Facilitate partnerships with lending institutions Number of skills initiatives facilitated for the diamond and precious metals industries N/a N/a 3 3 3 3 3 Facilitate experiential training for cutting and polishing as well as jewellery manufacturing Number of licencees verified against their commitments n/a n/a n/a Establish baseline 70 80 90 20
Quarterly Targets Performance Indicator(s) 2015/16 Q1 Q2 Q3 Q4 Actions /Strategic initiatives Who When Number if new licences issued within 60 working days based on completeness of the applications 155 39 38 34 44 Implement the legislation Process license applications as per legislative requirements Number of license renewals processed within 60 working days based on completeness of the applications 80 22 20 15 23 Implement the legislation Process license applications as per legislative requirements Number of BBSEEC compliance inspections/audits conducted 300 80 80 60 80 Implement the Diamonds Act and Precious Metals Act Assess ownership (HDSA) Skills development Monitoring of fronting through audit inspections Number of inspections conducted 1444 270 390 392 392 Implement the Diamond and precious metals legislation Number of Beneficiation licences issued 64 16 17 14 17 Implement the Diamonds Act and Precious Metals Act Process license applications as per legislative requirements 21
Performance Indicator(s) 2015/16 Q1 Q2 Q3 Q4 Actions /Strategic initiatives Who When Business Case Document Developed (State Bourse) Consultati ons with Stakehold ers Consultation with Government Consultation with Government Consultation Consultation with external with external stakeholders stakeholders Administrat ion Workshops information conducted and 4 1 1 1 1 Implement the Diamonds Act and Precious Metals Act Process license applications as per legislative requirements Number of inactive businesses engaged 30 0 10 10 10 Facilitate a workshop for inactive licensees with regards to: Diamond and Precious metal product suppliers, import and export and beneficiation. Where and how diamonds and precious metal may be accessed Existing Gold loan and platinum advance schemes Inspection Checks conducted on business premises for approval Facilitate partnerships with lending institutions Number of skills initiatives facilitated for the industries 3 0 1 1 2 Focus on facilitating development of platinum jewellery-making skills Assist jewellery manufacturing & design graduates with Trade Test preparation and completion by partnering with MQA 22
Performance Indicator(s) 2015/16 Q1 Q2 Q3 Q4 Actions /Strategic initiatives Who When Number of new entrepreneurs assisted 9 2 2 3 2 Provide information and advice on: Diamond and Precious metal product suppliers, import and export and beneficiation. Where and how diamonds and precious metal may be accessed Existing Gold loan and platinum advance schemes Inspection Checks conducted on business premises for approval Facilitate partnerships with lending institutions Number of licences verified against their commitments 70 15 18 18 19 Administrat ion 23
DETAILED BUDGET Detailed Budget Medium term estimates (as per ENE document) Summary of revenue and expenses 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 R thousand Audited Estimates Outcome Medium-term estimate Revenue Tax revenue - - - - - Entity revenue 9 006 7 978 28 479 24 417 41 354 43 835 46 466 Sale of goods and services other than capital assets 3 819 3 981 25 286 21 187 37 653 39 912 42 307 Of which: Admin fees Sales by market establishments 3 819 3 981 25 286 21 187 37 653 39 912 42 307 Levy income, licence and service fees 3 745 3 890 25 167 21 087 37 452 39 699 42 081 Sales of Diamonds books and registers 74 91 119 100 201 213 226 Interest, dividends and rent on land Other non-tax revenue Entity revenue other than sales 5 187 3 997 3 193 3 230 3 701 3 923 4 159 Fines penalties and forfeits - - - - 2 000 2 120 2 248 Gains from -49 20-29 - - - - 24
Summary of revenue and expenses 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 R thousand Audited Estimates Outcome Medium-term estimate Sale of fixed assets - - - - - - - Adjustments to fair value of assets -49 20-29 - - - - Other - - - - - - - Interest, dividends and rent on land 4 481 3 642 2 777 2 500 1 500 1 590 1 685 Interest 4 481 3 642 2 777 2 500 1 500 1 590 1 685 Dividends - - - - - - - Rent on land - - - - - - - Unclassified revenue 755 335 445 730 - - - Realisation of deferred income (other than transfers) - - - - - - - Other income - - - - - - - Other income 755 335 445 730 201 213 226 Transfers received 40 643 39 374 41 601 44 161 53 205 55 865 59 217 Social contributions received (social security funds only) - - - - - - Other government units 40 643 39 374 41 601 44 161 53 205 55 865 59 217 25
Summary of revenue and expenses 2012/13 2013/14 2014/15 2015/16 2016/17 /18 2018/19 R thousand Audited Estimates Outcome Medium-term estimate Executive Authority (Department of Mineral Resources) 40 643 39 374 41 601 44 161 53 205 55 865 59 217 Total revenue 49 649 47 352 70 080 68 578 94 559 99 700 105 683 Expenses Current expense 52 810 60 281 71 873 67 848 93 336 98 938 105 873 Compensation of employees Goods and Services Depreciation 34 196 41 254 15 942 16 485 2 601 2 472 48 706 49 392 70 536 74 768 79 254 21 321 16 672 19 972 21 172 23 442 1 794 1 733 2 828 2 998 3 177 Interest, dividends and rent on land 71 70 52 51 - - - Transfers and subsidies 97 Total expenses 52 810 60 281 71 873 67 848 93 336 98 938 105 873 Surplus / (Deficit) (3 161) (12 929) (1 793) 730 1 223 762 (190) 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 R thousand Audited Estimated outcome Medium term estimate Cash flow data Cash receipts from stakeholders 54 179 50 994 65 132 71 188 94 559 99 700 105 683 26
Tax receipts Sales of goods and services other than capital assets 9 055 7 978 21 531 24 527 37 653 39 912 40 307 Transfers received 40 643 39 374 41 601 44 161 53 205 55 865 59 217 Fines, penalties and forfeits 2 000 2 120 2 248 Interest and rent on land 4 481 3 642 2 000 2 500 1 500 1 590 1 685 Unclassified revenue 245 260 275 Sales of capital assets Tax benefit Outside shareholders interest Cash paid to stakeholders 49 431 57 302 61 201 66 812 90 508 95 940 102 696 Current payments 49 431 57 302 61 201 66 812 90 508 95 940 102 696 Compensation of employees 34 233 41 251 45 775 48 732 70 536 74 768 79 254 Goods and services 15 198 16 051 15 426 18 080 19 972 21 172 23 442 Interest and rent on land - - - Tax payment Transfers and subsidies Cash flow from operating activities 4 748 (6 308) 3 931 4 376 4 051 3 760 2 987 Cash flow from advancing activities (Financial Institutions only) Loan disbursements Loan principal repayments Other Cash flow from investing activities (3 249) 8 289 (1 289) (4 028) - - Acquisition of property, plant, equipment & intangible assets 27
Other flows from Investing Activities (3 249) 8 289 (1 289) (4 028) - - Domestic (3 249) 8 289 (1 289) (4 028) - - Foreign Cash flow from financing activities 104 (188) 45 (25) - Deferred Income 45 (25) - Borrowing Activities Domestic Foreign Repayment of finance leases 104 (188) Other (e.g. issuance of shares, revaluations) Net increase / (decrease) in cash and cash equivalents 1 603 1 793 2 687 323 4 051 3 760 2 987 28