DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND TOURISM REPORT TO THE PORTFOLIO COMMITTEE ON THE MLRF ANNUAL REPORT FOR THE 2006/7 FINANCIAL YEAR

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DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND
TOURISMREPORT TO THE PORTFOLIO COMMITTEE ON THE
MLRF ANNUAL REPORT FOR THE2006/7 FINANCIAL YEAR

• March 2008

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CONTENTS
Overview..

• Introduction
• Vision and Mission
• Background to the MLRF
• Performance Information
• Vision and Mission
• Background to the MLRF
• Achievements
• Audit Report
• Comparison with prior year
• Results of 2006/07 audit
• Way forward

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OVERVIEW OF MLRF

• vision a prosperous and equitable society
  living in harmony with our natural resources.

DEATs AIM
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OVERVIEW OF MLRF CONTINUED

• mission leading sustainable development of
  our environment for a better life for all
  through
• Promoting conservation and sustainable
  utilization of our natural resources to enhance
  economic growth.
• Promoting a global sustainable development
  agenda.
• Transformation of the fisheries sector

DEATs AIM
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MCM/MLRF Relationship to DEAT

• The Branch Marine and Coastal Management falls
  under Programme 3 of DEAT
• Programme 3 Marine and Coastal Management
• Promote the development and management of South
  Africa's marine and coastal environments in a way
  that ensures sustainability of the marine
  resources while maximising economic
  opportunities, job creation and poverty
  alleviation.

Programmes of DEAT
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MARINE LIVING RESOURCES FUND

• MLRF established in terms of Section 10 of the
  MLRA, Act 18 of 1998
• MLRF is a schedule 3A Public Entity (PFMA)
• MLRF is the main source of funding for operations
  of the Branch Marine Coastal Management

Background to MLRF
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MARINE LIVING RESOURCES FUND CONTINUED

• MLRF covers the operational costs of the 5 Chief
  Directorates
• R, A I Investigate and advise on sustainable
  use of resources through carrying out research
• RM (Marine) Regulating utilisation through admin
  of fishing rights, permits licences
• MCS Enforcing relevant laws and regulations
• ICM Managing human impacts on the coast through
  regulation
• CFO Financial management of the MLRF

Background to MLRF
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MARINE RESEARCH
Scientific Research

• Achievements
• Stock estimates and recommendations completed for
  18 fisheries
• Stock estimate reports for 2 new fishery sectors
  (horse mackerel octopus)
• Developed a graduate science programme to ensure
  skills development
• Ecosystems effects of fishing top predators
  studies completed for BCLME

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MARINE RESOURCE MANAGEMENT
Rights allocation Regulation

• Achievements
• Long-term fishing rights granted in 20 fisheries
• Average interest by previously disadvantaged
  rights holders 59 (December 2006)
• Draft policies on Subsistence Small-scale
  fisheries published
• Draft policy on the Management of Seals, Seabirds
  Shorebirds published

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INTEGRATED COASTAL MANAGEMENT
Coastal conservation

• Achievements
• Published the Integrated Coastal Management Bill
  for comment
• Gazetted Draft Marine Aquaculture policy for
  public comment
• 3 Marine Protected Areas (MPAs) were declared
  (Aliwal Shoal, De Hoop and Goukamma)
• Draft policies on BBWW WSCD published for
  public comment
• ToR for NPOA on land based sources of marine
  pollution

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MONITORING, CONTROL SURVEILANCE
Enforcement

• Achievements
• Improved monitoring capacity through the
  implementation of the new Vessel Monitoring
  System
• Effective deployment of EPVs
• Joint SADC patrol to Mozambique
• Co-operation agreements with law-enforcement
  agencies signed

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CHIEF FINANCIAL OFFICER
Turnaround Financial Strategy

• Achievements
• Implemented an MLRF turnaround strategy for
  weaknesses identified (AG and SCOPA)
• Implemented Oracle and MAST - Dec 06
• Financial Management System
• Management Information System
• Draft Cost Recovery Model developed
• Accounting policies and internal controls changed
  to ensure compliance with International
  Accounting Standards (IAS) and PFMA

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MARINE LIVING RESOURCES FUND AUDIT REPORTFROM
DISCLAIMED AUDIT OPINIONS (2003/04, 2004/05,
2005/06) TO A QUALIFIED AUDIT OPINION IN 2006/07
Moving Towards an Unqualified Audit for 2007/08
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MLRF AUDIT 2006/07 OVERVIEW

• Comparison of 2005/06 and 2006/07 financial
  years audit opinions
• Present management plan to move from disclaimers
  and qualifications towards an unqualified audit
  report in 2007/08

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SUMMARY OF ANNUAL REPORT

• This Annual Report represents a significant
  turnaround in the management and systems
  governing the Fund
• Previous audit report had 20 qualifications - AG
  decided not to express an opinion
• Current audit report has 5 qualifications - AG
  decided to express an opinion
• still a concern to the Department
• Improvement in financial management has led to
  the clearing of significant disclaimers relating
  to revenue, debtors and disposal of assets

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SUMMARY OF ANNUAL REPORT CONTINUED

• Correct application of IAS
• Continued improvement of governance issues, with
  a focus on due diligence, strengthening the
  control environment and improving coordination,
  communication and monitoring
• Special attention given to strengthening the
  financial accounting skills and capacity of the
  entity

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COMPARISONS BETWEEN 2005/06 AND 2006/07 FINANCIAL
YEARS
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COMPARISONS BETWEEN 2005/06 AND 2006/07 FINANCIAL
YEARS continued.
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COMPARISONS BETWEEN 2005/06 AND 2006/07 FINANCIAL
YEARS continued.
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TOWARDS AN UNQUALIFIED AUDIT REPORT

• Management formed a Project Steering Committee
  called Lets Fix It - meets weekly, internal
  audit participates
• Temporary staff appointed to assist in
  problematic areas i.e. creditors recons, balance
  sheet accounts recons, deferred income recons and
  fixed assets
• CFO appointed

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PROGRESS TO DATE

• Asset verification process commenced and
  procedures for disposal of assets functional
• Procedure manual on payables developed
• Ongoing work on Supplier recons, payment on
  statement only
• Budget process for the 2008/09 financial year was
  finalised
• Ongoing training on Oracle financial system
• Financial management training schedule with SAMDI
  finalised

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• LETS FIX IT!