SMD

Annual Report 2023/2024

Annual Financial Statements for the year ended 31 March 2024

Notes to the Appropriation Statement

4.2 Per economic classification

Final Budget

Actual Expenditure

Variance

Variance as a % of Final Budget

Economic classification

R’000

R’000

R’000

%

Current payments Compensation of employees

203 278

181 452

21 826

11%

Goods and services

141 154

138 413

2 741

2%

Transfers and subsidies Departmental agencies and accounts

1 404 785

1 404 484

301

0%

Public corporations and private enterprises

761 620

742 445

19 175

3%

Non-profit institutions

8 000

8 000

-

0%

Households

838

817

21

3%

Payments for capital assets Machinery and equipment

7 113

6 700

413

6%

Payments for financial assets

2520

2516

4

0

Total

2 529 308

2 484 827

44 481

1.8%

Compensation of Employees – Accumulated expenditure as at 31 March 2024 amounted to R181.5 million (89.3%) against the final budget of R203.3 million resulting in a variance of R21.8 million (10.7%). The result in underspending is mainly due to the vacancy rate of 24%. Goods and services – Accumulated expenditure as at 31 March 2024 amounted to R138.4 million (98.1%) against a the final budget of R141.2 million, resulting in a variance of R2.7 million (1.9%). The year-to-date underperformance was mainly on travel and subsistence (R1.3 million) due to cancelled foreign trips for the SMME exposure to international platforms project, and Computer services (R831 thousand) as Microsoft expenditure was expensed monthly than the once-off payment initially projected. The invoice covered twelve months from June 2023 to May 2024. The cost drivers of Goods and Services expenditure are IMEDP Inventory assets for redistribution (R57.5 million), travel and accommodation for official trips undertaken and SMME exposure to international markets (R31.7 million), Operating Lease for payment of office accommodation (R10.2 million), Administration fees largely for SMME exposure (R5.9 million), Computer services (R4.4 million), Audit cost (R3.4 million), Fleet services (R2.7 million), Venues and facilities (R3.2 million), Operating payments (R2.3 million), Consultants (R5.7 million), Rental and Hiring (R1.7 million), property payments (R1.5 million), Legal costs (R1.7 million), Bursaries (R1.4 million), Catering (R1.1 million), as well as Training and development (R983 thousand). Capital assets – Accumulated expenditure as at 31 March 2024 amounted to R6.7 million (94.2%) against the final budget of R7.1 million resulting in an underperformance of R414 thousand (5.8%). Transfer payments – Accumulated Expenditure as at 31 March 2024 amounted to R2.156 billion against the final budget of R2.175 billion which resulted in an under expenditure of R19.5 million (0.9%). •Product Markets (R18.8 million): Funds not transferred due to tax non-compliance issues for the Northwest Development Corporation (R6.7 million). A payment of R5 million was made to the Manguzi market stalls project instead of the R10 million approved due to the slow progress of the project. •Craft Customised Sector Programme (CCSP) (R650 thousand): Funds not transferred to Trade and Investment KwaZulu Natal (TIKZN) (R300 thousand) as their co-funding was withdrawn, and to the Feree State Development Corporation (FDC) (R350 thousand) due to compliance issues

Part F • FINANANCIAL INFORMATION • Department of Small Business Development

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