PRESENTATION OF THE DOD

1

• PRESENTATION OF THE DOD
• ANNUAL REPORT FOR THE FY2006/07
• TO THE SELECT COMMITTEE ON SECURITY AND
  CONSTITUTIONAL AFFAIRS
• 20 NOVEMBER 2007

2
AIM

• To present to the Portfolio Committee on
  Defence( PCD), the non-financial and audited
  financial performance report on the work of the
  Department of Defence for the financial year
  ended on 31 March 2007, in compliance with
  section 40(1)d of the PFMA,1999 ( Act No. 1 of
  1999)

3
DECISION REQUIRED

• It is requested that the Portfolio Committee on
  Defence
• approves the DOD Annual Report for the FY2006/07.

4
SCOPE APPROACH

• INTRODUCTION
• OUTLOOK OF THE REPORT
• PROGRESS MADE
• ANNUAL PERFORMANCE AGAINST THE PLAN FY2006/07
• TIMELINES
• CONCLUDING REMARKS
• QUESTIONS AND ANSWERS
• FINANCIAL PERFORMANCE INFORMATION FY2006/07

5
Introductory Statement
The year under review has marked an important
chapter in the history of the Department of
Defence. It has seen the affirmation of our
commitment to the vision of ensuring a better
life for all and an entry into the Age of Hope.
This commitment has been realised through
those activities which best equip the Department
to pursue its strategic intent and, in so doing,
support the consolidation of democracy in the
country, the region and the continent.
6
INTRODUCTION

• The DOD has demonstrated its commitment to
  ensuring effective Defence for a democratic South
  Africa through enhancement and maintenance of the
  strategic defence packages which include
• Strengthening of maritime capabilities through
  the commissioning of three MEKO Class frigates,
  the SAS ISANDLWANA,SAS SPIOENKOP, SAS MENDI, and
  one Type-209 submarine, the SAS MANTHATISI
• Strengthening of air capabilities marked by the
  arrival of sixteen Hawk MK 120 lead-in fighter
  trainers and sixteen Augusta Westland A-log light
  utility helicopters
• Contribution to strengthening the African Agenda
  as demonstrated by participation in the
  following
• Election processes in the Comoros, the DRC,
  Lesotho and Madagascar
• Peace support and post-conflict reconstruction
  operations in Burundi,Ethiopia, Eritrea, the
  Sudan and Côte dIvoire.

7
INTRODUCTION

• Contribution to security - related objectives of
  the AU as epitomized by increased participation
  in bi and multilateral agreements as well as the
  establishment of the African Standby Force for
  the SADC region.
• Contribution to NEPAD through participation in
  redefining the Defence industry sector strategy
  and widening of participation within this
  regulated industry
• Embracing the Skills Revolution Agenda and
  Accelerated Shared Growth Initiative through
• increased participation within the MSDS and the
  Youth Foundation Programme
• strengthening the DODs contribution towards
  social responsibility through the Works Regiment
  and re-skilling of ex - combatants through the
  National Skills Fund
• Commitment to gender mainstreaming has been
  demonstrated through the increased female
  appointment to higher ranks.
• Compliance with corporate governance prescripts
  on sustainable planning, and accountability
  reporting

8
OUTLOOK OF THE REPORT

The Draft DOD Annual Report covers the following
Chapter 1 Strategic Overview Chapter
2 Defence Administration Chapter 3 Force
Employment Chapter 4 Landward Defence Chapter
5 Air Defence Chapter 6 Maritime
Defence Chapter 7 Military Health
Support Chapter 8 Defence Intelligence Chapter
9 Joint Support Chapter 10 Special Defence
Account Chapter 11 Organisational Structure and
Human Resources Management Appendices AStatus
of the SANDF reserves BDefence
Diplomacy CReport on foreign aid
assistance
9
Subprogramme Political Direction

• CHAPTER 2 PROGRAMME 1 DEFENCE ADMINISTRATION

• Highlights
• The Minister of Defence provided political
  direction to the DOD ensuring that required
  defence commitments were met and appropriate
  defence capabilities were provided within the
  allocated budget.
• Issued ministerial priorities for the FY2006/07
• The Ministers worksession was held during the
  period under review.
• The Minister provided strategic direction to the
  finalisation of the White Paper on Defence,
  Defence Review (Defence Update 2007)
• Service and Divisional Chiefs were compelled to
  continuallly review their State of Readiness in
  line with the MOD theme Are we ready.
• Identified gaps in terms of State of Readiness
  had to be addressed as per MOD instruction.
• Focussed attention was directed to the ongoing
  transformation of the Military Justice System as
  well as restructuring of the Department for
  greater effective and efficiency.
• The MOD gave direction to the transformation of
  the Defence Industry in conjunction with the
  Mninister of public Enterpises
• Contributed to global security by giving
  political direction to and participating in the
  peace processes in the DRC, Burundi and Ivory
  Coast and provision of Mil Obs in Sudan, Ethiopia
  and Eritrea.
• Contributed to deepening of democacy in Africa
  through series of initiatives notably supporting
  election in Comores, Madagascar and Lesotho
• Output detail Table 2.1

10
Subprogramme Departmental Direction

• Highlights
• Guidelines of the Minister of Defence were
  analysed and translated into clear DOD
  deliverables.
• Ensured alignment of DOD priorities, plans and
  processes with broad Government priorities,
  trajectory, strategies, plans and programmes
• Interrogated and optimised the funding
  priorities which were presented to National
  Treasury for consideration during the MTEC
  hearings
• Implemented perfomance improvement mechanisms in
  order to optimise compliance with Government
  prescripts and accountability.
• DOD activities refocused in terms of DOD
  strategic objectives and performance against
  plan.
• Extensive progress has been made in realising the
  Ministers directive regarding the
  transformation of the Department to provide for
  optimal functionality in terms of internal,
  external and allocative efficiency
• Output detail Table 2.2
• Challenges
• Balancing the allocated resources with
  government commitments
• Impact of the delayed implementation of the IFMS
  on the integration of the Departmental systems

11
Subprogramme GITO

• Highlights
• Departmental Enterprise Information Systems
  (DEIS) formalised and approved
• Review plan for the DEIS regulatory framework
  completed
• Output details Table 2.3
• Most objectives and targets met as planned
• Performance and Service Delivery Improvement-
  Table 2.4
• Challenges
• The DOD CMIS Policy Development and Maintenance
  Plan is under continuous revision.

12
Subprogramme Policy and Planning

• Highlights
• The subprogramme managed to render policy advice
  to the Department, as well as drafted, negotiated
  and concluded bilateral and multilateral defence
  agreements with other states.
• Ensured that all statutory documents are
  consulatively developed , approved and timeously
  submitted to the appropriate oversight
  functionaries and organs of state
• Provision of research and analytic support to
  defence policy and planning actvities was
  rendered in line with domestic and international
  law
• Spearheaded the DOD structure management,
  refocusing of Command bodies, as well as the
  systemic perfomance management through the
  Balanced Score Card
• Coordinated the development, consultation and
  finalisation of the update of the White Paper on
  Defence (1998) and Defence Review (1996) which
  was approved by the Minister on 11 December 2006
• Output details Table 2.6
• Performance and service delivery improvement are
  shown in Table 2.7
• Challenges
• There is lack of clarity on nodal points in
  respect of functions that relate to cluster and
  multilateral commitments.
• Organisational readiness to ensure successful
  implementation of the Balanced Score Card. A
  targeted orientation programme is planned for the
  current financial year, which is focused on
  senior management as well as services and
  divisional planners.

13
Subprogramme Financial Services

• Highlights
• The provision of a cost-effective financial
  management service to the Minister of Defence,
  Secretary for Defence and the Chief of the SANDF
• Development and incorporation training module on
  section 45 of the PFMA, 1999 to ensure compliance
  with the evolving regulatory framework
• Provision of a professional financial
  management service
• Output details Table 2.8
• Performance and service delivery improvement are
  shown in Table 2.9
• Challenges
• The old financial management information system
  resulting in the DODs current inability to
  achieve unqualified financial statements unless
  exemptions from reporting requirements are
  authorised by National Treasury.
• The delayed implementation of the National
  Treasurys initiatives of the Financial
  Management Improvement Programme (FMIP) and the
  Integrated Financial Management Information
  System (IFMS).

14
Subprogramme Acquisition Services

• Highlights
• First two aircafts were delivered to Gabon.
• A minimum of 14 000 orders were processed
  amounting to more than R1. 867 billion.
• Four (4) Public Private Partnerships involving
  different arms of Services, were considered
  during the period under review
• Public Public Partnership with Armscor for the
  transfer of the Naval Dockyard was finalised and
  the handing over is planned for September 2007.
• Within the Alternative Service Delivery (ASD) 28
  approvals were processed out of 30 requests for
  outsourcing received, thus translating to 93,3
  throughput.
• A total of 11 fully certified A-09 Light Utility
  Helicopters were delivered to the SA Air Force
  during this period.
• Production of all four maritime helicopters has
  been completed.
• The first production Hawk aircraft was delivered
  to 85 Combat Flying School at Air Force Base
  Makhado.
• Delivery of the first Gripen Aircraft to Test
  Flight Development Centre (TFDC).
• The Mirage F1 package was successfully sold and a
  5-year purchase contract was signed.
• Sixteen Hawk aircraft were delivered to AFB
  Makhado.

15
Subprogramme Acquisition Services( contd)

• Highlights
• Four audits conducted by the Auditor General, as
  well as the office of IG DOD, on Procurement
  Service Centres (PSC) and the reports received
  were favourable.
• Arrival of the first submarine, SASMANTHATISI,
  in April 2006 and acceptance of the second
  submarine in Germany in March 2007.
• Commisioning of frigate SAS ISANDLWANA in
  September 2006 and handing over SAS MENDI in
  February 2007
• Output details Table 2.10
• improvement are shown in Table 2.11
• Challenges and interventions
• Delay in the establishment of the Defence
  Matériel Division results in lack of structure
  and capacity to address policy imperatives.
• Ground-based Air Defence System (GBADS).
• Non-performance by the main contractor
  (Denel)remains a serious problem. The
  consequences are
• -a delay of some three years in contractual
  deliveries and
• - a major deviation from planned cash flow, which
  is managed through redirection of funds in the
  short term.

16
Subprogramme Inspection Services

• HIGHLIGHTS
• The Defence Inspectorate Division hosted the
  consultative conference from 3 to 7 July 2006
  wherein the SADC Defence Inspectors General Forum
  which will be an arm of the Association of
  Defence Auditors Conference (ADAC) was
  established
• Output detail Table 2.12
• Performance and Service delivery improvement are
  shown in table 2.13
• Challenges
• Full implementation of the audit tool system,
  whose phased roll out is currently aggressively
  pursued in collaboration with SITA.

17
Subprogramme EO and AA

• HIGHLIGHTS
• Mission Readiness Training. Programmes conducted
  in order to raise members awareness of human
  rights and equity issues.
• Gender Audit. A reliable database is now
  available on women in terms of their military and
  academic qualifications.
• 2nd National Conference on Women in Defence.
  EOCD hosted the Second National Conference on
  Women in Defence, at the Kopanong Hotel
  Conference Centre from 24 to 26 May 2006.
• SADC Womens Peace Table. EOCD also hosted this
  seminar in Tshwane from 27 to 29 November 2006.
  Ten countries participated. Best practices on
  the promotion of gender equity in the regional
  armed forces were shared.
• Output detail Table 2.14
• Most objectives and targets were met as planned
• Performance and service delivery improvement are
  shown in Table 2.15
• Challenges
• While the set target of 53,7 of Blacks in
  Senior Management has been achieved, gender
  transformation remains a challenge. Remedial
  strategies are being implemented.

18
Programme 1 Defence Administration (SANDF)

• Command and Control (C SANDF)
• Highlights
• Details in Chapters 2 to 8
• Output details Table 2.5
• Readiness of military capabilities maintained
  which is in accordance with employment
  requirements
• Operations were conducted successfully
• Challenges
• Mismatch between resource allocation from the
  Government and the expected DOD readiness levels
  explained in Chapters 2 to 8
• Military capabilities required for Peace Support
  Operations are approaching sub-critical levels
• Corporate Staff Division
• Corporate Staff Office
• Output details Table 2.16
• Strategy Plan Office (SPO)
• Output details Table 2.17

19
Programme 1 Defence Administration SANDF
(Continued)

• Defence Legal Services Division
• Highlights
• Output details Table 2.19
• Establishment of amalgamated Defence Legal
  Services Division
• Participation in 20 exercises, 24 and 26 shorter
  deployments
• Recruited 14( mainly Reserves) as military legal
  practitioners into Regulars
• Challenges operations
• Lack of skilled military legal practitioners,
  trained interpreters
• Non-availability of members of Courts of Military
  Appeal snr military practitioners not always
  available on scheduled dates as determined by the
  chairperson of the Court of Military Appeal
• Religious Services
• Highlights
• Output details Table 2.20
• Moral Regeneration Conference on 28 Jan to 1 Feb
  07 Dep Pres keynote speaker
• Involvement with SADC wrt religious
  matters/HIV/AIDS CHATSEC programme
• Support to deployed members and families
• 7 Chaplains deployed
• 4 Reserve Chaplains workshops held in various
  regions

20
Programme 1 Defence Administration SANDF
(Continued)

• Defence Corporate Communication
• Highlights
• Output details Table 2.21
• Favourable media coverage received on the
  rejuvenation and re-equipping of the South
  African National Defence Force (SANDF)
• Research indicating increased public support for
  the role of the DOD in peace support operations
  in the region.
• Challenge. Lack of competent communication
  functionaries.
• Reserve Force Office
• Highlights
• Output details Table 2.23
• Increasingly successful participation of the
  Reserve component in external deployments of
  SANDF
• Increasing institutionalisation of the Reserve
  Force component through internal and external
  marketing initiatives
• Challenge. Military Skills Development System
  (MSDS) not operating as an optimal feeder for the
  Reserve component in accordance with the design
  strategy.
• Defence Foreign Relations
• Highlights
• Output details Table 2.25

21
Chapter 3 Programme (8) Force Employment

• CHAPTER 3 PROGRAMME (8) FORCE EMPLOYMENT
• Highlights
• Output details Tables 3.1 to 3.4
• All primary force employment commitments have
  been met
• To enhance and maintain comprehensive Defence
  capabilities
• Detail in tables on joint and multinational
  exercises 3.2 3.3
• Supporting People of South Africa
• Details in Table 3.1
• Promote Peace, Security and Stability in the
  Region and Continent
• - Detail in Table 3.1
• Challenges
• Capabilities required for Peace Support
  Operations are constrained by the mismatch
  between allocated resources and government
  ordered commitments.

22
Chapter 3 Programme 8 Force Employment
(continued)
External Force Employment Achievements 2006/07
Operation Members Deployed Achievement
Op MISTRAL, DRC 1 214 Continuous replanning to adjust to the changing situation of the mission. The repatriation of the Ferry and Well Drill units. One successful rotation was completed in October/November 2006
Op FIBRE, Burundi 1 319 Op terminated in Dec 06. Change-over from UN to AU mission. Op CORDITE
Op PRISTINE, Cote dIvoire 45 Complement prepared, but not deployed from Jul 05 until termination in Dec 06. Op terminated owing to reasons associated with peace - process in Cote dIvoire
Op ESPRESSO, Ethiopia/ Eritrea 6 Staff officers/mil observers according to UN/AU requirements
Op TEUTONIC I, DRC 47 Two Brassage Centres established, assistance with integration of 147 000 former belligerents. African Renaissance funds used for post - conflict reconstruction
Op TEUTONIC II, DRC 63 Two training facilities constructed. Mission concluded in Sep 06
Op TEUTONIC III, DRC 2 Senior members deployed to coordinate SANDF assistance to the Congolese Defence Force
Op TRITON, Comoros 318 AU appointed South Africa as lead nation in AU mission in the Comoros. Mission commended and received recognition from AU Peace and Security Council
Op CORDITE, the Sudan 648 AU requested increased force levels, from 2 companies to battalion strength being deployed. Two successful rotations were completed. Sustainment flights were and remain a problem due to Sudanese authorities not giving over-flight and landing clearances
23
Chapter 3 Programme 8 Force Employment
(continued)
External Force Employment Achievements 2006/07
(continued)
Operation Members Deployed Achievement
Operations SOLITAIRE I, II, III and IV. DRC 26 A total of 2 165 tons of ballot material were distributed. 200 observers from DFA were successfully deployed and supported by the DOD
Op CURRICULUM, Burundi 1 110 Protected the Burundi leader element returning from exile. New mission with a temporary time frame and anticipated to end in 2008.
Op MARINER Madagascar 30 29 November to 12 December 2006. All objectives with regards to transportation and general assistance were achieved. The mission was commended and received recognition from the international community.
Op INDAWO, Lesotho 27 15 February 2007 to 20 February 2007. All ballot papers for the Lesotho election were successfully distributed and collected by the SA Air Force. The SANDF used its own air capabilities for the deployment.
Op LITCHI II, Mozambique 80 6 March 2007 and remains current. A total of 630 tonnes of food and 2.5 million litres of purified water were distributed. Three SA Air Force aircraft as well as water purification plants were deployed.
Op BAPISA, Mozambique 53 From 26 March 2007. The successes of the operation will be made visible in the FY2007/08 report
24
Chapter 3 Programme 8 Force Employment
(continued)
Internal Force Employment Achievements 2006/07
Operation Members Deployed Achievement
Op INTEXO Borderline control 1 111 Borderline control was executed along the Zimbabwe, Mozambique, Swaziland and Lesotho borders. Successes include 46 weapons found 15 676 kg marijuana confiscated and 727 criminals arrested. Force decreasing on continuous basis in accordance with the agreed SANDF Exit and SAPS Entry Strategy between the SANDF and the SAPS.
Op STIPPER, Rural safeguarding 197 ATR The target was fully met in compliance with SAPS requirements. Successes include 170 weapons found 2 657 kg marijuana confiscated and 2 742 criminals arrested.
Op HUMAN Support to Government 84 mostly Reserves The Dept of Agriculture was assisted in the containment of classical swine fever in the Eastern Cape, KwaZulu - Natal and the Free State. A total of 13 352 pigs were killed. Supported the Marine and Coastal Management by conducting coastal patrols to curb abalone poaching, and routine fishery patrols. A total of 40 abalone poachers were arrested. The SA Air Force patrolled the maritime coast of the RSA (Operation NEPTUNE- RSA West Coast and Operation ORCA at the RSA East Coast).
25
Chapter 3 Programme 8 Force Employment
(continued)
Joint Exercises 2006/07
Exercise Achievement
SA Special Forces Exercises Three exercises to rehearse contingencies were executed as planned
SANDF Communication Exercise This exercise was integrated with other planned exercises to ensure effective communication skills and radio procedures
Ex MATHOLE. Command post exercise (CPX) to test rapid reaction capability and develop SANDF doctrine and procedures in peacekeeping. Prepare forces training exercise in 2007 The exercise was cancelled due to the non-availability of force structure elements. Focus on planning and preparing of forces for Exercise NDLOVU planned for 2009
Ex MATHOLE SANDF joint Peace - keeping Operations exercise (field training exercise) to test and evaluate doctrine on peace support operations The exercise was cancelled due to non-availability of force structure elements. The focus will be placed on planning and preparing of forces for Exercise NDLOVU planned for 2009
Ex OXIDE. (GERANIUM). Enhance preparedness of the SANDF to render support to the Dept of Transport in search and rescue, in conjunction with French forces based in La Reunion as per MOU The exercise was cancelled due to unavailability of French forces. The last exercise was conducted in May 2005.
Ex EMEX. To render support to the National Nuclear Regulator in dealing with a nuclear incident at Koeberg nuclear plant as required by legislation The exercise at the Koeberg nuclear plant in March 2006 was attended by military observers. Different scenarios were simulated whereby contingencies were confirmed and rehearsed.
EXERCISE AFFIX. To render support to the Airports Company of South Africa in dealing with aircraft disasters at South African airports, as required by legislation The exercise at O.R. Tambo Airport In Johannesburg in March 2006 was attended by military observers. Different scenarios were simulated and contingencies were confirmed and rehearsed
26
Chapter 3 Programme 8 Force Employment
(continued)
Multi-national Exercises 2006/07
Exercise Achievement
Ex AIR BORNE AFRICA. Airborne forces competition This exercise was cancelled, as no host nation for the exercise could be found
Ex BELL BUOY. Military (naval) control of merchant shipping in times of emergency (Indian Ocean) The maritime exercise was conducted with the Navies of Uruguayan, Brazilian and Argentinean. All the objectives for the exercise were met. The exercise took place in Brazil in Sept 2006.
Ex TRANSOCEANIC. Military (naval) control of merchant shipping in times emergency in participation with South American countries (South Atlantic Ocean) Exercise TRANSOCEANIC took place from 14 to 25 Aug 06 in South Africa. Participating countries were Brazil, Argentina, Uruguay and SA. SA Navy Reserve teams stationed at the six main ports of SA participated in this exercise.
Ex INTEROP EAST and WEST. Naval exercise with Africa countries on the east and west coast of Africa to build trust capacity and capability in the navies in the SADC regions INTEROP EAST was conducted as part of Exercise BOURBON from 28 Oct to 14 Nov 2006. Due to the operational commitments of the SA Navy the force structures were changed at very short notice. No helicopters were deployed as originally planned due to the SA Navys Operational Commitments. INTEROP WEST took place in 2006. SAS AMATOLA visited four African countries Nigeria, Cameroon, Gabon and Sao Tome. Participated in the Nigerian Navy Presidential Fleet Review to mark their 50th anniversary.
Exercise BOURBON. Combined search and rescue exercise between the DOD, DTA and Environmental Affairs as well as French forces in La Reunion This exercise was conducted as part of Exercise INTEROP EAST. The exercise took place at Reunion from 29 Sep to 14 Nov 2006 with the French Indian Ocean Navy. The objectives of the exercise were achieved. The same vessels were utilised in both exercises.
27
Chapter 3 Programme 8 Force Employment
(continued)
Multinational Exercises 2006/07
Exercise Achievement
Exercise COMBINED ENDEAVOUR. Partnership for Peace Communications and Information Systems technical demonstration The multinational interoperability exercise took place during March, May, Sep, Nov 2006, Jan and March 2007. The exercise was executed in Georgia, Germany, the Netherlands, Armenia, Slovakia, Ukraine and Germany. 24 members of the CMIS Div were involved in the planning and execution of the exercise.
Exercise AFRICA ENDEAVOUR. African communications and information systems interoperability exercise CMIS Div conducted the African interoperability exercise in Jul 2006 at Wonderboom Military Base. Planning was done in Nov 2006 and Jan 2007 to host the second Exercise AFRICA ENDEAVOUR in the RSA in Jul 2007. The United States European Command (USEUCOM) invited most of SADC to participate. The aim is to establish SADCBRIG interoperability
EXERCISE ATLASUR. Maritime exercises between SA Navy and South American countries to enhance multinational conventional naval warfare capabilities in the South Atlantic Ocean The maritime exercise took place in Uruguay from 28 Oct to 7 Nov 2006. The SA Navy as well as Uruguayan, Brazilian and Argentinean navies participated.
Exercise BLUE RUVUMA. Humanitarian relief exercise based on a flood disaster scenario in one of the SADC member states The SAAF conducted the exercise in Tanzania supported by other services and divisions. The exercise took place from 9 to 13 Oct 2006.
28
CHAPTER 4 PROGRAMME 2 LANDWARD DEFENCE

• Highlights
• Output details Tables 4.1 to 4.3
• SA Army Future Vision SA Army Strategic
  Profile which defines the desired effets and
  capabilities was completed
• Successfully provided forces for 11 external and
  3 internal operations
• 4 638 Infantry conventional Reserves were
  utilised for external and internal deployments,
  administration and guards.
• As a contribution to the rejuvination of the
  Army Conventional Reserves,transferred more than
  1 000 volunteers from Army Territorial Reserves
  to Army Conventional Reserve
• Provided 2 Reserve coys and combat support
  elements for external deployment
• Rejuvenation of SA Army (MSDS) 2 421 from Jan
  2005 intake appointed in Core Service System. Jan
  2006 intake 3 000 trained in first cycle. Jan
  2005 MSDS intake completed force prep cycle with
  Exercises SEBOKA and YOUNG EAGLE
• Training
• Infantry 131/129 learning opportunities
  6719/7073 learners
• General Jnr Leader 15/18 learning
  opportunities 1 466/1 825 learners
• Challenges
• Mismatch between allocated funds and ordered
  commitments
• Revitalisation of SA Armys Technical Service
  Corps capability
• state of readiness is compromised by shortage of
  ammunition and general commodities
• Attrition of skilled technical personnel to the
  private sector.

29
CHAPTER 5 PROGRAMME 3 AIR DEFENCE

• Highlights
• Output details Tables 5.1 to 5.2
• 37 160 hours were flown of which 9 788 hours were
  in direct support of Joint Operations
• Support to Italian and Brazilian air forces,
  trained VIP protectors for Pakistan
• Air Force Reserves delivered 52 496 man-days,
  flew 2 737 hours
• Exercise BLUE RUVUMA, Exercise NEW HORIZON (NH)
  5, Air Capability Demonstrations
• HR transformation - increased numbers of black
  candidates for training,
• 2 pupil pilot courses completed 33 learners,
  30 males, 3 females while 67 were black
• MSDS altogether 613 learners trained
• Vigorous initiaitives to retain scarce skills
  implemented.
• Training
• Air Space Controllers 16/9 learning
  opportunities - 99/65 learners
• Pilots 2/2 33/34 learners
• Flying Instructors 2/2 learning opportunities
  16/12 learners
• Challenges
• Significant levels of under-funding of operating
  budget
• Impact of late release of the Hawk Jet Trainer
  caused disruptions to the planned training and
  conversion schedule
• Deterioration of operational infrastructure and
  facilities.

30
CHAPTER 6 PROGRAMME 4 MARITIME DEFENCE

• Highlights
• Output details Tables 6.1 to 6.2
• 1 frigate and 2 strike craft exercises in
  East/West Africa
• Exercise TRANSOCEANIC, ATLASUR, DIVE EX 06 ,
  INTEROP EAST/WEST
• Four frigates and 2 of 3 new submarines are in
  service
• Involvement in SADC maritime matters, trained
  over 40 learners from various African countries
• Maritime Reaction Squadron established
• Increased representivity in combat domains
• Progress in rejuvenating the SA Navy as
  demonstrated by 480 MSDS recruits joining the
  Naval Reserves
• Public Private Partnership for Sea Safety
  Training Centre Transaction Advisor appointed
• Training
• Functional and warfare 135/169 learning
  opportunities 1 847/2 185 learners
• Technical 74/74 learning opportunities 646/835
  learners 216 technically trained
• Challenges
• Current funding level - maintained only
  facilities required for force preparation
• Loss of technical skills and expertise diving
  and technical domains in spite of measures to
  retain
• Continuing deterioration of facilities.

31
CHAPTER 7 PROGRAMME 5 MILITARY HEALTH SERVICE

• Highlights
• Output details Tables 7.1 to 7.3
• Supported all operations and exercises
• Force preparation consolidated through Exercise
  LANCET
• Intergration of the Health support systems with
  the requirements of the Strategic Defence
  Packages.
• Optimised alignment between Strategy and Plan
  roll-out
• Renewal and maintenance of health facilities
  prioritised and commenced with at the three
  military hospitals
• Race and gender demographic configuration of the
  SAMHS realigned.
• Interdepartmental training cooperation reinforced
  through the training of MSDS and other health
  care workers (Dept of Health)
• Military Psychological Institute (MPI) made
  significant strides in developing developing
  health readiness measurement instrument for
  military needs
• Training
• Nursing diploma 237/280 diploma students (Year
  1 to 4).
• 40 learners completed diploma in Dec 2006
• Military Health Training 190/250 learning
  opportunities 2 989/4 047 learners
• Military Training. 3/2 MSDS intakes 2 974 /1
  945 learners.
• Challenges
• Availability and retention of health care
  practitioners
• SAMHS facilities and renewal of main medical
  equipment

32
CHAPTER 8 PROGRAMME 6 DEFENCE INTELLIGENCE

• Highlights
• Output details Table 8.1
• Positive feedback from national clients - DI
  supports national intiatives on African
  continent, level of assessment national
  benchmark
• Support provided to SANDF operations/exercises as
  required
• Training agreements with SAPS
• Training. Functional intelligence courses and
  skills programmes addressing the analysis,
  collection and counter-intelligence domains 17/18
  216/90 learners
• Challenge. Recruitment and retention of
  personnel

33
CHAPTER 9 PROGRAMME 7 JOINT SUPPORT

• CMIS Division
• Highlights
• Output details Tables 9.2 to 9.3
• Supported 12 operations and 3 exercises
• Received additional Rm50 to initiate
  implementation of DEIS Master Plan
• Participation in joint/multinational exercises,
  Exercise Combined ENDEAVOUR
• Upgrading of main equipment projects
• Reserve man-days 43 133 increased to meet
  divisions needs
• Training
• 309/184 learning opportunities - 1 774 /2 159
  learners
• Challenges
• Loss of expertise ICT domain greater reliance
  on contracted services provided by SITA
• ICT obsolescence
• Lack of personal and signals equipment,
  serviceability of vehicles
• National moratorium on destruction of records
  Dept of Arts and Culture manages submission to
  Cabinet

34
CHAPTER 9 PROGRAMME 7 JOINT SUPPORT (Continued)

• DOD Logistic Agency
• Highlights
• Output details Table 9.6
• Good progress with migration of fragmented log
  info systems to OSIS
• 1 000 tons unserviceable ammo demolished, 5 of 7
  demolition ranges qualified
• Good progress with capturing of assets in
  register
• Successful purchasing of materiel handling
  equipment
• Environmental issues incorporated during
  operations. Env practitioners deployed
• Transfer of Technical Service Corps
  function/units to SA Army started
• Training of 761 MSDS recruits in all logistic -
  related fields
• Trg 187/191 learning programmes 98 learning
  opportunities has been achieved, 3 043 learners
  (104)
• Challenges
• Maintenance backlog of facilities concern about
  DPW services
• Asset accounting management system not fully
  compliant with GRAP
• Backlog in disposal of redundant and
  unserviceable ammunition
• Renewal and transformation of Reserves, lack of
  specialist logistic personnel
• Training Institutions non-alignment with SAQA,
  lack of competent ETD practitioners,
  deteriorating facilities
• DOD Air Supply Unit deteriorating facilities
  and lack of equipment
• Land reform and restitution, delays in
  finalising Regional Land Claims Commissioners
  priorities in conflict with DODs. Unexploded
  ordnance at Hells Gate/Madimbo corridor

35
CHAPTER 9 PROGRAMME 7 JOINT SUPPORT (Continued)

• Human Resources Support Centre
• Highlights
• Ouput detail Table 9.8
• Processed 78 783 applications for career
  opportunities in DOD
• Exit Administration of 5 393 members who left
  service of DOD
• Updated more than 7 000 records on miliary
  veterans database
• Processing of 1 469 applications for the
  recognition of previous NSF service for pension
  purposes
• Ceremonial support for all SANDF Ceremonial
  activities
• Implementation of Operation Clean Audit for the
  FY 05/06 AG report
• Challenge
• The implementation of the NSF Pension
  dispensation ito the approved Legislation and
  GEPF Pension Fund Rules
• Migration of HR Satelite Centres back to Services
  and Divisions

36
CHAPTER 9 PROGRAMME 7 JOINT SUPPORT (Continued)

• Joint Training
• Highlights
• Output detail Table 9.9
• Batho Pele compulsory Frontline training
  Programme roll out 383 DOD employees trained
• A high level of readiness was mantained
• Mil Acad - 4 staff members appointed as
  Professors by University of Stellenbosch
• Full accrediation status accorded to Warrant
  Officers Academy as a learning provider
• Youth Foundation 240 learners with 98 pass
  rate. 180 learners employed in DOD
• Trg Institutions presented 304 programmes for 1
  688 learners, 30 learners not found competent
• Challenges
• Establishment of SANDF Trg Institute (Project
  BRILLIANT) slow due to number of stakeholders to
  take appropriate action. It is envisaged that
  this Institute will improve the human capital
  development and support as a hub.
• DPWs lack of capacity to maintain the facilities
  at an acceptable level as these are learning
  environment that need to comply with specific
  provisions of the OSH Act, 1985

37
CHAPTER 9 PROGRAMME 7 JOINT SUPPORT (Continued)

• Military Police Agency
• Highlights
• Output details Table 9.10
• 56 Military Police members deployed at any given
  time
• Expansion of ceremonial motorcycle fleet, soft -
  skin vehicles and radio communication equipment
• Joint training with SAPS and traffic depts
• Improved representivity at middle management
  level
• 56 MSDS members recruited
• Challenges
• Implementation of the new Military Police Agency
  Organisational Structure

38
CHAPTER 9 PROGRAMME 7 JOINT SUPPORT (Continued)

• Service Corps
• Highlights
• Output details Table 9.11
• Total training to 1 622 learners including 107
  learners from Mozambique
• Center for Advanced Training (CAT), trained to
  225 of the 250 planned learners.
• Reskilling, placement and training of more than
  95 military veterans. ABET to 261 veterans
  Conversion training for SANDF members to transfer
  to SAPS
• Reskilling assistance to 130 SANDF members MEM
  (968 registered but not all reported)
• Challenges
• CAT not yet accredited by SAQA
• Implementation of the Works Regiment concept in
  conjunction with the SA Army
• British Peace Support Training Team
• Output detail Table 9.13
• Support to J Ops Div /J Trg
• Mission ready training to all rotating forces
• UK funding of fitting out of class room facility
  at Mob Centre and PMTC MOU
• Property Management
• Output detail Table 9.14
• Devolution of PWDs budget for payment of
  accommodation charges, leases and municipal
  services

39
Subprogramme Special Defence Account

• Highlights
• General Defence Account (GDA) funds were spent
  according to corporate priorities to ensure cost
  - effective solutions to requirements
• Output details Table 10.11 to 10.12
• Performance and service delivery improvement are
  shown in Table 10.3
• Challenges
• 97,9 of the target was achieved due to
  outstanding invoices that will be addressed
  during the next financial year.
• The new submarine project has underspent on
  project management due to invoices not being
  submitted to the project team.

40
Chapter 11 Organisation and Human Resource
Management

• Chapter Content
• Organisational Structure
• Service Delivery Improvement
• Personnel Expenditure and Personnel Statistics
  (Table Format)
• HIV / Aids and Health Promotions
• Labour Relations
• Graphs on HR Evolution ito Personnel Expenditure,
  Appointments, Attritions, Promotions and Equity

41
Personnel Expenditure as a of Total Expenditure
2006/07 FY
42
Macro Personnel Evolution by Salary Band for
2006/07 FY
43
Macro Personnel Flow ito Appointments, Promotions
and Attritions by Salary Band
44
Macro Personnel Evolution by Critical Occupation
for 2006/07 FY
Total 13595
Total 13509
In terms of critical occupations personnel
strength was reduced from 13595 to 13509. The
turnover rate for scarce skills during the
financial year was -0.6
45
Macro Personnel Flow ito Appointments, Promotions
and Attritions by Critical Occupation
46
Macro Personnel Flow ito Equity (Race)
47
Macro Personnel Flow ito Equity (Gender)
48
Equity Evolution (Race) ito Appointments
49
Equity Evolution (Gender) ito Appointments
50
Equity Evolution (Race) ito Promotions
51
Equity Evolution (Gender) ito Promotions
52
Equity Evolution (Race) ito Attrition
53
Equity Evolution (Gender) ito Attrition
54
ANNUAL FINANCIAL STATEMENTSFINANCIAL YEAR
2006/2007

• Presented by the Acting Chief Financial Officer

55
AIM OF THE PRESENTATION

• To present the
• Financial performance of the DOD for the
  Financial Year 2006/2007
• Financial position of the DOD at the end of the
  Financial Year 2006/2007

56
SCOPE

• Appropriation Statement
• Statement of Financial Performance
• Statement of Financial Position
• Notes to the Financial Statements
• Special Defence Account
• Challenges
• Highlights

57
APPROPRIATION STATEMENT

• Final
  Appropriation Expenditure 2006/07
  2006/07
• Rm Rm
• Administration 1 811,901 1 753,818
• Landward Defence 3 991,322 3 989,521
• Air Defence 2 513,893 2 513,893
• Maritime Defence 1 311,840 1 311,840
• Military Health Support 1 704,107 1
  704,107
• Defence Intelligence 147,494 147,494
• Joint Support 2 671,544 2 646,108
• Command and Control 1 470,065 1 470,065
• Special Defence Account 8 280,738 8 280,738
• TOTAL 23 902,904 23 817,584

58
APPROPRIATION STATEMENT
2006/07 Rm Final appropriation 23
902,904 Less Actual expenditure 23
828,824 Variance 74,080 Plus Fruitless
and wasteful expenditure 0,494 Plus
Local and foreign aid assistance
11,240 Surplus 85,814 Variance
reasons Property Man Portfolio
Rm58,083 Committed capital works
Rm24,924 Unspent transfer payment Rm
0,512 Unspent Rm 2,295 Unspent as
of Vote 0,36
59
Statement of Financial Performance (Income
Statement)

• REVENUE
• 2006/07 2005/06
• Rm Rm
• Annual Appropriation 23 902,904 22 670,482
• Departmental revenue 492,792
  729,136
• Local and foreign aid -
  38,750
• TOTAL REVENUE 24 395,696 23 438,368
• EXPENDITURE
• Current expenditure 14 511,711 12 563,888
• Transfers and subsidies 8 882,837 9
  715,847
• Expenditure for capital assets 434,276
  412,621
• Revenue to be paid back 492,792
  729,136
• Less Local and foreign aid 11,240 -
• TOTAL EXPENDITURE 24 310,376 22 692 356

60
Statement of Financial Position (Balance
Sheet)

• 
  2006/07 2005/06
• Assets Rm Rm
• Current assets
• Unauthorised expenditure 20,625 495,824
• Fruitless and wasteful expenditure 0,959
  0,472
• Cash and cash equivalents 67,330 51,599
• Loans 12,362 12,362
• Prepayments and advances 176,471 144,659
• Receivables 688,693 103,317
• TOTAL ASSETS 966,440 808,233
• Liabilities
• Current liabilities
• Voted funds to be surrendered 85,814
  5,653
• Departmental revenue to be surrendered 37,919
  54,099
• Bank overdraft 690,987 646,665
• Payables 42,347 28,115
• Local and foreign aid unutilised -
  11,240

61
Notes to Financial Statements

• Departmental Revenue
• 2006/07 2005/06
• Rm Rm
• Sales of goods and services 175,512 232,844
• Fines, penalties and forfeits 2,272
  2,448
• Interest, dividends and rent on land 0,813
  0,337
• Financial transactions in assets and
  liabilities 314,195 493,507
• TOTAL REVENUE 492,792 729,136

62
Notes to Financial Statements (cont)

• Local and Foreign Aid Assistance received in cash
• Received in 2005/2006 Rm38,750
• Less Utilised in 2005/2006 Rm27,510
• Sub total Rm11,240
• Less Utilised in 2006/2007 Rm11,240
• Local and foreign aid unutilised Rm 0

63
Notes to Financial Statements (cont)

• Losses
• 2006/07 2005/06
• Rm Rm
• Losses through criminal conduct 0,006
  0,392
• Other material losses written off 14,812
  32,090
• Debts written off 1,631 67,292
• Forex losses 1,508 0,334
• TOTAL 17,957 100,108

64
Notes to Financial Statements (cont)

• Unauthorised expenditure
• Balance at yearend 2005/2006 Rm495,824
• Less Transfer to receivables for recovery (not
  approved) Rm467,704
• Approved Rm 7,495
• Unauthorised expenditure awaiting authorisation
  Rm 20,625

65
Notes to Financial Statements (cont)

• Fruitless and wasteful expenditure
• Balance at year-end 2005/2006 Rm0,472
• Fruitless and wasteful expenditure Rm0,494
• Less Amounts condoned Rm0,007
• Fruitless and wasteful expenditure
• awaiting condonement Rm0,959

66
Notes to Financial Statements (cont)

• Cash and cash equivalents
• 2006/07 2005/06
• Rm Rm
• Cash on hand 39,941 32,961
• Cash with commercial banks 27,389 18,638
• TOTAL 67,330 51,599
• Prepayments and advances
• 2006/07 2005/06
• Rm Rm
• Travel and subsistence 49,846 45,588
• Prepayments 126,625 99,071
• TOTAL 176,471 144 659

67
Notes to Financial Statements (cont)

• Receivables
• 2006/07 2005/06
• Rm Rm
• Staff debtors 46,652 39,389
• Other debtors 630,405 57,938
• Claims recoverable 11,636 5,990
• TOTAL 688,693 103,317
• Loans
• 2006/07 2005/06
• Rm Rm
• Public Corporations 12,362 12,362
• This represents a loan to the South African
  Forces Institute (SAFI) for the purpose of
  bridging finance

68
Notes to Financial Statements (cont)

• Contingent liabilities
• 2006/07 2005/06
• Rm Rm
• MVA guarantees - 0,246 Housing loan
  guarantees 115,290 123,026
• Claims against the department 1 301,853 1
  002,321
• Other departments 89,525 29,412
• Environmental rehabilitation 7,170
  7,100
• TOTAL 1 513,838 1 145,874

69
Disclosure notes to Financial Statements

• 2006/07 2005/06
• Rm Rm
• Commitments 1 632,353 1 359,847
• Accruals 272,966 155,100
• Irregular Expenditure 0,481 0,955

70
SPECIAL DEFENCE ACCOUNT
Balance Sheet

• 2006/07 2005/06
• Rm Rm
• Advances 12,049 8,842
• Trade and other receivables 117,066
  87,392
• Cash and cash equivalents 3 898,893 3 706,650
• Investments 16,930 15,653
• TOTAL ASSETS 4 044,938 3 818,537
• Reserves 3 441,586 2 763,145
• Creditors 605,202 1 055,392
• TOTAL EQUITY LIABILITIES 4 044,938 3 818,537

71
SPECIAL DEFENCE ACCOUNT
Income Statement

• REVENUE
• 2006/07 2005/06
• Rm Rm
• Transfer received 8 280,738 9 258 839
• Other revenue 97,720 202 637
• Interest received 0,010 0,008
• TOTAL REVENUE 8 378,468 9 461,484
• Less Expenditure 7 700,027 7 870,012
• NET PROFIT FOR THE PERIOD 678,441 1 591,472

72
SPECIAL DEFENCE ACCOUNT
Notes to the Financial Statements

• OTHER REVENUE
• 2006/07 2005/06
• Rm Rm
• Sales of strategic equipment 168,222 53,482
• Forex on the SDPP 51,366 192,636
• Other 3,555 12,698
• Subtotal 223,143 258,816
• Less Payable to the Revenue Fund 125,423
  56,179
• TOTAL OTHER REVENUE 97,720 202,637

73
SPECIAL DEFENCE ACCOUNT
Notes to the Financial Statements

• EXPENDITURE
• 2006/07 2005/06
• Rm Rm
• Major projects 6 512,874 6 727,245
• Other projects 359,167 385,732
• Operating projects 590,809 656,936
• Other 237,177 100,099
• TOTAL EXPENDITURE 7 700 027 7 870 012

74
SPECIAL DEFENCE ACCOUNT
Notes to the Financial Statements

• 2006/07 2005/06
• Rm Rm
• Estimated future expenditure 17 494,992 18
  686,150
• by Armscor
• Contingent Liability 252,872 23,957

75
CHALLENGES

• 17 QUALIFICATIONS
• Tangible and intangible capital assets
• Irregular expenditure
• Travel and subsistence
• Prepayment and advances
• Accruals
• Lease commitments
• Regional Services Council levies
• Contingent liabilities
• Misclassification of expenditure
• Receivables

76
CHALLENGES

• 17 QUALIFICATIONS (continued)
• Departmental revenue to be surrendered to Revenue
  Fund
• Commitments
• Clearing accounts
• Fruitless and wasteful expenditure
• Rank review audit
• Comparatives
• Local and foreign aid

77
OTHER CHALLENGES

• Unauthorised expenditure
• Systems

78
HIGH LIGHTS

• Insignificant under-spending
• Development of financial statements
• Submitted on time
• Competency levels of team
• Improvement of awareness among stakeholders

79
Concluding Remarks
Siyabonga

• Overview
• During the period under review the DOD has
  managed to maintain a balance in so far as
• - Ensuring that appropriate defence
  capabilities are provided in order to honour
  ordered commitments within available resources.
• - Ensuring that sound corporate governance is
  enhanced and institutionalised.
• -Promoting accelerated service delivery, while
  creatively managing the retention of scarce
  skills within a highly competitive labour market.
• -Finding creative means of developing
  sustainable and reliable accounting systems for
  its resources.

80
Concluding Remarks

• Going forward
• The DOD remains committed to protecting the
  integrity of the territory, its people and
  borders through diplomacy
• Fasttrack the establishment of African Standby
  Force for the SADC region, a strategy to
  resiliently promote the philosophy of collective
  defence as a means to resolve conflict within
  the SADC region
• Within the available resources, address the
  challenges presented by the South Africas
  assumption of the non- permanent seat in the
  Security Council in pursuit of further
  strengthening compliance with international law.
• Prioritise the modernisation of the landward
  defence capabilities as part of its affirmation
  of core business while creatively dealing with
  the misalignment between the defence policy and
  resource allocation through securing Cabinet
  approval of the Update of the White Paper ( 1996)
  and the Defence Review ( 1998) and the aggressive
  implementation thereof.

81
Concluding Remarks
Siyabonga

• Going forward
• The DOD will resiliently embrace the Governments
  concerted effort of deepening the Africa Agenda,
  leapfrogging strengthening the Africa Diaspora to
  realise the vision of a United State of Africa
• The DOD will continue to raise its public image
  as an organ of state that serves, belongs and
  cares and as such an employer of choice

82
QUESTIONS