gFleeT Management 2021/22 Annual Report Presentation
gFleeT Management presents its 2021/22 Annual Report to the Roads and Transport Portfolio Committee, highlighting non-financial performance, financial data, human resources, and governance. The report discusses strategies implemented during the COVID-19 lockdown, changes to strategic and performance plans, and overall performance outcomes.
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Presentation Transcript
gFleeT Management 2021/22 ANNUAL REPORT PRESENTATION TO THE ROADS AND TRANSPORT PORTFOLIO COMMITTEE 4 NOVEMBER 2022
TABLE OF CONTENTS 1. SUMMARY OF NON-FINANCIAL PERFORMANCE 2. FINANCIAL PERFORMANCE INFORMATION 3. HUMAN RESOURCE AND GOVERNANCE 02
2021/22 NON-FINANCIAL PERFORMANCE INFORMATION 2
NON-FINANCIAL PERFORMANCE INFORMATION COVID -19 LOCKDOWN During the year 2021/22, the Entity continued to adopt and implement various risk adjusted strategies and plans in response to COVID-19 lockdown levels to minimise disruptions and ensure business continuity in its business operations, both within the Entity and its clients. The strategies and plans implemented by the Entity were aligned to directives and regulations issued at national level and comprised, amongst others, the disinfection of our vehicles and facilities, sanitisation of our VIP/Pool vehicles utilised by our officials and clients, monitoring and enforcement of policies and directives issued for observing social distance, wearing of masks, screening of employees and our visitors and issuing of Personal Protective Equipment (PPE) to our officials. Despite the challenges the Entity continued to operate and remain functional as employees worked on a rotational basis. During the financial year under review, a total of 15 COVID-19 positive cases were reported. 04
NON-FINANCIAL PERFORMANCE INFORMATION Changes to the 2020-2025 Strategic Plan and 2021/22 Annual Performance Plan The Entity had to revise its 2020-2025 Strategic Plan and its 2021/22 Annual Performance Plan to ensure compliance with recommendations made by AG in the 2020/21 report. These two plans were revised during the third quarter of the financial year under review and was approved in January 2022. The following Technical Indicator Descriptions indicators were revised and enhanced with the assistance from Office of the Premier and GDRT : Monitoring and Evaluation Unit: Minimum of 30% of procurement budget to be allocated to township businesses and ICT Strategy developed and implemented, the Entity obtained approval to remove the following output indicators relating to maintenance from the APP were removed due to challenges experienced with the RT46 Transversal Service Provider. Average number of days taken for mechanical repairs and Average number of days taken for accident repairs. 05
NON-FINANCIAL PERFORMANCE INFORMATION While challenges were continuously encountered, the Entity worked very hard to improve the overall performance against targets approved in the Annual Performance Plan for 2021/2022 financial year. Out of ten (10) approved targets in the 2021/22 Annual Performance Plan, The Entity achieved a total of six (6) targets. This translates into an overall percentage achievement of 60%. This is despite of all COVID19 challenges and ongoing challenges experienced with the RT46 service provider incurred during the year under review. Below is a summary of the Entity s performance: 06
SUMMARY OF NON-FINANCIAL PERFORMANCE Indicators Achieved: PROGRAMME ONE: OPERATIONAL MANAGEMENT SERVICES This programme is responsible for providing fleet management services that are effective, efficient, and client-focused. The following is the sub-programmes of the structure: Permanent Fleet Finance Transport Support Services Fleet Maintenance Communications 07
SUMMARY OF NON-FINANCIAL PERFORMANCE OUTCOME OUTPUT OUTPUT INDICATOR PLANNED ANNUAL TARGET 2021/22 4% ACTUAL ACHIEVED 2021/22 5% Reduced Carbon footprint from The Entity Passenger vehicles below 120g/KM (environmentally friendly) Average age of fleet % of passenger vehicles with CO2 emissions below 120g/KM Improve efficiency & customer service Maximised return on investment Safeguard state assets Average age of fleet 3.7 years 4 Years Percentage of vehicles auctioned Vehicles tracked % of vehicles auctioned 80% 93% % of in-service vehicles tracked 90% of in-service vehicles tracked. 90% (5802) of in-service vehicles tracked 08
SUMMARY OF NON-FINANCIAL PERFORMANCE Indicators Achieved: PROGRAMME TWO:CORPORATE AND FINANCIAL MANAGEMENT This programme is responsible for ensuring a well-run organisation by designing and maintaining effective systems and processes that will result in optimal use of The Entity s assets in the delivery of services. The following are the sub-programme structures: VIP and Pool Services Finance ICT 09
SUMMARY OF NON-FINANCIAL PERFORMANCE OUTCOME OUTPUT OUTPUT INDICATOR PLANNED ANNUAL TARGET 2021/22 52% of rental days utilised for VIP self-drive vehicles 73% of rental days utilised for Pool vehicles ACTUAL ACHIEVED 2021/22 72.51% Maximise on return on investment Average % of rental days utilised. Average % or rental days utilised by VIP self- drive vehicles. Average % of rental days utilised Maximise on return on investment Average % of rental days utilised. 94.89% for Pool vehicles. 10
SUMMARY OF NON-FINANCIAL PERFORMANCE Indicators not Achieved: PROGRAMME TWO: CORPORATE AND FINANCIAL MANAGEMENT SERVICES OUTCOME OUTPUT OUTPUT INDICATOR PLANNED ANNUAL TARGET 2021/22 Unqualified opinion from Auditor General ACTUAL ACHIEVED 2021/22 Qualified 2020/21 audit report from the Auditor- General 26% of the Entity s discretionary procurement spend directed towards township suppliers. 12.96% Clean Administration Unqualified opinion from Auditor General Unqualified opinion from Auditor General Township Economy Revitalization (TER) Spending on Township businesses Percentage of the Entity s discretionary procurement spend directed towards township suppliers. Percentage decrease in average debtors collection days (excluding outstanding balances of clients that have payment arrangements with The Entity) 30% of the Entity s discretionary procurement spend directed towards township suppliers 15% (Excluding amounts owed by clients that have submitted written payment arrangements) Improved debt collection Reduced debtor s collection 11
SUMMARY OF NON-FINANCIAL PERFORMANCE Indicators not Achieved: OUTCOME OUTPUT OUTPUT INDICATOR Number of Integrated Fleet Management Modules / Processes developed and implemented in the approved strategy. PLANNED ANNUAL TARGET 2021/22 2 IFMS Modules / processes mapped and developed. ACTUAL ACHIEVED 2021/22 2 IFMS Modules / processes (registration of transport officers and drivers) have been mapped by eGOV. However, development is underway. Improve efficiency & customer services Approved ICT Strategy. IFMS Module 1 and 2 mapped and developed. Projects for implementation from the ICT Strategy: Module 1: (Registration of Transport Offices) Integrated Fleet Management System (IFMS) Modular development. Module 2: (Registration of Drivers) Dashboard and Digital screen solutions and technologies. Acquisition of scanners and licenses. Tracker system with integrated telematics. CCTV camera and biometrics Implementation of the Electronic Document and Records Management System (eDRMS) Scanners procured and delivered. Licenses made available from DRT. Implementation of the Electronic Document and Records Management System (eDRMS) Electronic Document and Records Management System (eDRMS) Research Report on 4IR required skills. 12 Business processes have been developed and deployed in the testing Security Information Policies
SUMMARY The overall year to date expenditure (R759 million) is 4% less than the overall budget. The reported underspending was mainly located within the units of Technical Support Services and Fleet Maintenance which remain impacted by the slow turnaround periods/slow performance by the appointed service provider, i.e., Westbank in relation to the transversal RT46 contract. 2021/22 DRT BUDGET VS EXPENDITURE The YTD overall revenue collected amounts to approximately 116% (R1 045 566 124) of the budget. The increased collections is due to improved levels of engagements with our clients on the settlement of long-outstanding debts. The Entity achieved 97% (i.e., 1485 invoices totalling approximately R684 million) in terms of invoices paid within 30 days. The entity has not reported any new fruitless and wasteful expenditure for both the quarter and 2021/2022 financial year. The entity has reported irregular expenditure in terms of property rental to the value of R474 000 for the financial year. 14
2021/2022 OVERALL EXPENDITURE APP REPORT 21/22 FY YEAR TO DATE RESULTS BUSINESS UNIT ANNUAL BUDGET ACTUAL SPENT TOTAL VARIANCE % SPENT OFFICE OF THE CEO R 3,328,707.00 R 3,173,755.00 R 154,952.00 95% OFFICE OF THE COO R 1,634,278.00 R 1,275,354.00 R 358,924.00 78% OFFICE OF THE CFO R 11,524,770.00 R 6,938,889.00 R 4,585,881.00 60% FINANCIAL SERVICES R 17,958,200.00 R 14,567,461.00 R 3,390,739.00 81% CORPORATE SERVICES R 89,461,317.00 R 73,709,967.00 R 15,751,350.00 82% MARKETING & COMMUNICATION R 12,864,822.00 R 11,082,118.00 R 1,782,704.00 86% MAINTENANCE SERVICES R 145,598,111.00 R 121,912,239.00 R 23,685,872.00 84% TRANSPORT SUPPORT SERVICES R 201,380,928.00 R 188,891,553.00 R 12,489,375.00 94% PERMANENT SERVICES R 287,643,291.00 R 319,514,056.00 -R 31,870,765.00 111% VIP POOL SERVICES R 17,618,126.00 R 17,734,220.00 -R 116,094.00 101% TOTAL R789,012,550.00 R758,799,612.00 R 30,212,938.00 96% 15
REVENUE - RECEIPTS REVENUE RECEIPTS 2022/23 FY TOTAL BUDGET YEAR TO DATE REPORT LEASING OF VEHICLES ANNUAL BUDGET ACTUAL COLLECTIONS TOTAL VARIANCE % ACTUAL Revenue - Exchange (Leases) R 800,000,000 R 933,239,790 -R 133,238,790 117% Revenue - Non-Exchange (Interest) R 30,000,000 R 31,800,245 -R 1,800,245 106% Revenue - Non-Exchange (Accident Claims and Fines) R 0 R 60,082 -R 60,082 100% Revenue - Transport R 1,800,000 R 1703,900 R 96,100 95% Revenue - Auctions R 70,000,000 R 78,763,106 -R 8,763,106 113% GRAND TOTAL R 901,800,000 R 1,045,566,124 -R 143,766,124 116% 16
VACANCY RATE During the period under review, the Entity reported a vacancy rate of 31%, broken down as follows: Filled Approved Establishment (including contract workers) Level Vacant Vacancy Rate SMS (Level 13 to 16) Level 11 to 12 Level 7 to 10 Level 1 to 6 TOTAL 8 3 14 79 95 191 5 3 28 48 84 63% 17% 26% 34% 31% 17 107 143 275 18
FILLING OF POSTS Thirty-one (31) critical posts were subsequently advertised in December 2021 and the closing date was 28 December 2021 (05 December 2021 (Sunday Times), 07 December 2021 (Internal Communications) and 10 December 2021 (DPSA). The selection and recruitment process has commenced and it is envisaged that the recruitment process will be finalised by December 2022. 19
REVIEW OF ORGANISATIONAL STRUCTURE The Entity is directly competing with the private sector therefore there is a need to operate in terms of the business principles like any private leasing company to remain competitive and provide good service to its clients for survival. For the Entity to be efficient and sustainable, its form, shape, structure and systems must allow for improvement on governance and accountability, sustainability (both financial and operationally); be able to attract and retain scarce skills, be able to procure and deploy resources and improve on programme management / monitoring and evaluation of its projects. During the 2021/22 financial year, the draft organogram with proposed posts and functions and the costing of the structure was developed and submitted to GDRT, OoP and the Gauteng Provincial Treasury (GPT). The Change Management Strategy, to support the Draft Business Case, has been developed and submitted to GPT. 20
RISK MANAGEMENT The Risk Management Committee is regulated by the approved Risk Management Committee Charter. An independent chairperson has been appointed in January 2021. The performance and progress of the risk management are monitored and reported at the Risk Management Committee on a quarterly basis. Below are the Entity s top risks that were identified and monitored by management throughout the financial year: Inadequate Automated Systems to support Business Operations. Possible Misstatements in the Annual Financial Statements. Loss/Theft of Assets. Compromised Implementation of the long-term strategy of the Entity. Under Collection of Revenue. Inadequate Contribution to Provincial Economic Growth 21
AUDIT COMMITTEE The Audit Committee consists of three external Members and is required to meet a minimum of at least two times per annum as per provisions of the Public Finance Management Act (PFMA). In terms of the approved Terms of Reference (GPG Audit Committee Charter), five meetings were held during the current year, i.e. Three meetings to consider the Quarterly Performance Reporting (financial and non-financial) and Two meetings to review and discuss the Annual Financial Statements and the Auditor-General of South Africa s Audit and Management Reports 22
AUDIT OPINION The Entity obtained a qualified audit opinion with findings for Annual Financial Statements (AFS) and for Performance Information during the 2021/22 audit. Basis for qualified opinion on AFS The trading entity did not recognise all items of property, plant and equipment in accordance with GRAP 17, Property, plant and equipment. Prepaid maintenance cost was incorrectly capitalised into the motor vehicle cost. AG was unable to determine the full extent of the overstatement of motor vehicles and the understatement of prepayments as it was impracticable to do so. There was a resultant impact on the repairs and maintenance for the period and on the accumulated surplus. The trading entity did not present motor vehicles for physical verification. This resulted in motor vehicles being misstated by R60 964 087. The trading entity did not recognise accumulated depreciation in accordance with GRAP 1 7, Property, plant and equipment. The depreciation calculation for motor vehicles was not in line with GRAP 17. I was unable to determine the full extent of the misstatement of the accumulated depreciation as it was impracticable to do so. 23
AUDIT OPINION Findings on Performance Information Auditor General was unable to obtain sufficient appropriate audit evidence that clearly defined the predetermined method of collection or that related systems and processes were established to enable consistent measurement and reliable reporting of the actual achievement for the indicator. This was due to a lack of measurement definitions and processes. We were unable to confirm that the indicator was well-defined and verifiable by alternative means. As a result, AG was unable to audit the reliability of the achievement reported in the annual performance report. Percentage of the Entity s discretionary procurement spend directed towards township suppliers. Some supporting evidence provided materially differed from the reported achievement for the following Key Performance indicators . This was due to the lack of accurate and complete records. Average % or rental days utilised by VIP self-drive vehicles. Average % of rental days utilised for Pool vehicles. 24
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