1 CFO Report 7 March 2006 DOJ&CD Portfolio Committee Budget Hearings.

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CFO Report7 March 2006

DOJ&CD

Portfolio Committee Budget Hearings

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AGENDA

1. 2005/06 FINANCIAL AND AUDIT REPORT OVERVIEW

2. 2006/07 PRELIMINARY / UNAUDITED FINANCIAL OVERVIEW

3. MTEF BUDGET ALLOCATIONS

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2005/06 FINANCIAL OVERVIEW

Final Appr Actual exp VarianceR’000 R’000 R’000

DOJ & CD R 5 185 733 R4 883 241 R302 492

Statutory* R 849 977 R1 040 097 (R190 120)

Total R 6 035 710 R5 923 338 R112 372

* Judges’ and Magistrates’ Remuneration and Allowances

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2005/06 BUDGET RE-PRIORITISATIONBranch / Programme

Details of bid / re-allocation approved by the Accounting

Officer Rm Court Services X ray machines / metal detectors 35 Transcription Services 136.8 Burglar proofing 18

Masters Office furniture and vehicles 6 Overspending on compensation 15 of employees (job upgradings implemented without funds) State Attorney

OfficesKimberley (new office) 7

Furniture and office equipment 10

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2005/06 BUDGET RE-PRIORITISATIONBranch /

Programme

Details of bid / re-allocation approved by the Accounting

Officer Rm

ISM DNS roll-out phase III 40 Family

Advocates Office equipment, computers and vehicles3.5

Public Protector High Profile Cases & JYP 3.5 implementation SIU Vehicles, access control, laptops, 5.05

software licences etc

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2005/06 BUDGET RE-PRIORITISATIONBranch / Programm

e

Details of bid / re-allocation approved by the

Accounting Officer Rm

LAB Judicare, vehicles, computers, 13.22 software licences etc NPA State Attorney fees, GG accounts, 77 specialised and other vehicles, computers etc HR Internship Programme 10Total amount

approved for

re-allocations

380.07 [7,3 % of budget allocation]

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UPP’S VS BUDGET ALLOCATIONUPP's (Red) Stacked upon Budget Allocations (Blue)

6,99

5,49

0

5,18

5,73

3

5,05

4,41

8

4,55

7,35

3

4,25

1,82

6

1,72

8,05

0

1,23

5,91

13,87

9,86

4

5,38

2,42

0

6,88

6,28

9-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2006/07 2005/06 2004/05 2003/04 2002/03

Years

R'00

0

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UPP’S VS BUDGET ALLOCATION• Budget allocations (Blue) include marginally

funded projects• UPP’s (Red) – Unfunded Priority Projects

– Registered MTEF process– Updated regularly– Changes as costing information becomes firm (Process

of estimation & investigation before costing becomes final)

– Dynamic process• Underspending due to various reasons• Process of Reprioritisation – moving projects and

budgets out of blue and move projects and expenditure from red to blue

• Strict adherence to virement limitations as required by PFMA and NTR

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2005/06 BUDGET RE-PRIORITISATIONCOURT SECURITY

– 259 Court buildings with burglar proofing – 50 X-ray machines and 200 Walkthrough Metal Detectors

installed at courthouses nationwide

COURT RECORDING AND TRANSCRIPTION SERVICES– Supply and installation of digital audio recording equipment in

all our courts– This will modernise our current court recording system which is

analogue

DNS III / IT NETWORK ROLL-OUT– 282 Additional sites connected to the IT Network, bringing the

total to 505 sites out of 555 sites– All sites connected have access to Govt transversal systems,

access to email, enable roll-out of E-Scheduler, JDAS, which will improve service delivery

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2005/06 AUDIT MATTERS• Vote Account

– Qualified audit opinion on Monies in Trust Revenue Receivable for Departmental Revenue

– NAQ previous two financial years (2003/04 and 2004/05)

• Monies in Trust– Audit in progress (Audit opinion to be disclaimed)

• Guardians Fund– 2002/03 to 2005/06: Disclaimer of audit opinions and late

publication and tabling

• President Fund – Unqualified audit opinion

• NPA – Unqualified audit opinion (Emphasis of Matter items)

• CARA – Unqualified audit opinions from period 1999 to 200506

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2005/06 AUDIT MATTERS2005/06 Audit Qualification Audit Qualification on Monies in Trust

Departmental Revenue Receivable Emphasis of Matter issues:

• Financial Management (Budget Reprioritisation Process)• Asset and Inventory Management (Inventory

Management and Policy for Software and Intangibles)• Compensation of Employees (Policies not approved, Long

suspended employees, Human Resources Management)• Contingent Liabilities (Monies in Trust)• Performance Information• Forensic Audit

AUDIT ACTION PLAN MONITORED BY AUDIT COMMITTEE ON QUARTERLY BASIS

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AUDIT MATTERS2005/06 Audit Qualification – Action

Plans

• Monies in Trust Revenue Receivable– Legal opinion Chief State Law Advisor– Reconciliations– Letter to OAG – clarification of receipts vs

revenue– MMT PPP– JDAS roll-out

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AUDIT MATTERS2006/07 Audit on Vote and Monies in

Trust?

• Monies in Trust audit – “…Lack of effective and efficient financial management system…” and “…not being able to prepare reliable, accurate and complete accounting records for Monies in trust…”

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2006/07 - BUDGET AND EXPENDITURE OVERVIEW

&REPRIORITISATION

NOTE: UNAUDITED / PRELIMINARY INFORMATION

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2006/07 Budget & Expenditure Overview

ProgrammeAdjusted Estimates

Projected Expenditure Variance

Percentage Expenditure

R Thousand

Administration 775,679 657,583 118,096 97%

Court Services 2,748,613 2,256,805 491,808 79%

State Legal Services 385,754 337,933 47,821 88%

National Prosecuting Authority 1,582,062 1,583,903 (1,841) 100%

Auxilliary and Associate Services 986,539 986,538 1 100%

Sub Total 6,478,647 5,822,762 655,885 90%

Judges & Magistrates 1,071,056 1,098,502 (27,446) 103%

Total 7,549,703 6,921,264 628,439 92%

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ProgrammeAdjusted Estimates

Projected Expenditure Variance

Percentage Expenditure

R Thousand

Compensation of employees 2,830,444 2,595,311 235,133 92%

Goods and Services 2,225,381 1,872,012 353,369 84%

Financial trans in assts and Liab 0 2,886 (2,886) 100%

Departmental agencies and accounts 795,110 795,110 0 100%

Provinces and Municipalities 4,456 2,292 2,164 51%

Foreign govts and intern.organs 3,644 4,729 (1,085) 130%

Household (leave Gratuities) 2,678 11,921 (9,243) 445%

Machinery and Equipment 299,338 209,529 89,809 70%

Buildings and other fixed structures 305,836 305,836 0 100%

Software and other intangible assets 11,760 23,138 (11,378) 197%

Sub-total

Judge’s and Magistrate’s Salaries

6,478,647

1,071,056

5,822,764

1,098,502

655,883

(27,446)

90%

103%

Total 7,549,703 6,921,266 628,437 92%

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Budget & Expenditure Trends

540,142

406,231

513,403500,387

483,787

677,592

506,585

619,045

659,992

527,987

596,540

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

R'000

Mon

th

2006/07 2005/06 2004/05 2003/04 2002/03

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REASONS FOR UNDERSPENDING

• Savings on personnel because of vacancies and staff turnover;

• Savings in operational cost because of delays in appointments;

• The Monies in Trust project – extension approved for submission of bids to 5 February 2007, evaluation and adjudication processes to commence during March 2007;

• Outstanding DPW claims for Property Management (Municipal rates and taxes);

• Delays in the roll-out of the Digital Court Recording Solution; and

• Time involved in supply chain management processes.

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2006/07 – Financial Performance• R 628,4 million – Year to date projected

underspending (28 February 2007)

• Total amount approved by DG for re-allocation – R 166,5 million (next slides)

• Branches indicated that we can spend and / or commit funds totaling R 136,6 million [spend = R56,4 m and roll-over/committed = R80,2 m]

• R 491,8 million towards identified UPP’s (funds to be committed for roll-overs)

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Approved re-allocations:

Branch Details Amount(R ,million)

Court Services Mobile Courts, Vehicles, Upgrade of buildings and office accommodation, Equipment and Furniture R48,727 used

R45,626

Justice College Additional Courses R5,681 used R5,200

Masters Accommodation and Office Equipment R11,744 used R1,612

2006/07 – Financial Performance

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Approved re-allocations:

Branch DetailsAmount (R ,million)

Human Additional Training – performance Resources management, employee wellness,

job evaluation R13,200 used R3,276

Office of Equipment in own office the DG and regions, Workshops R78,050 used R74,200

Chief Litigation Equipment R1,510 used R1,510Officer

Chief Financial Officer Guardians’ Fund Accounting

Turnaround Project R7,600 used R5,200

Total amount approved / used R166,5 used R136,6


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Identified UPP’s – funds to be committed for roll-overs:

1. Facilities Management / DPW R 256 m2. Library books/legal reports R 38,5 m3. Mobile Courts (30 units) R 3 m4. Legal Aid Board (Case Backlogs) R 1,8 mTOTAL R 299,3 m

[R192,5 m unspent = 3 % of budget]


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MTEF ALLOCATIONS

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MTEF Allocations 2006/07 – 2009/10

ProgrammeRevised Estimate

R Thousand 2006/07 2007/08 2008/09 2009/10

Administration 711,145 838,052 897,999 1,043,729

Court Services 2,446,547 2,998,673 3,333,346 3,731,042

State Legal Services 348,737 415,925 471,985 530,681

National Prosecuting Authority 1,425,893 1,804,491 2,085,314 2,380,911

Auxiliary and Associated Services 953,429 1,220,429 1,377,808 1,541,947

Sub Total 5,885,751 7,277,570 8,166,452 9,228,310

Judges & Magistrates Salaries 1,109,739 1,263,518 1,339,329 1,419,689

TOTAL 6,995,490 8,541,088 9,505,781 10,647,999

Year on Year Growth 22.09% 11.29% 12.02%

Medium -term expenditure estimates

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Observations on 2006 ENE Allocations Growth in budget allocations

• The 2007 Budget sets out additional allocations of R473,5 million in 2007/08, R634,8 million in 2008/09 and R836,3 million in 2009/10 for spending on expanded capital works, human resource capacity and reducing criminal case backlogs. This translates to an average annual growth rate of 11, 2 per cent between 2006/07 and 2009/10 financial years, which is a growth from R7, 5 billion to R10, 5 billion – the figures include the statutory appropriation.

Priorities Funded

• The largest part of the additional allocation contributes towards taking over the personnel of the Witness Protection Unit from the Department of Safety and Security; increasing the number of personnel particularly in Court Services and the National Prosecuting Authority; setting up temporary service points to deal with criminal case backlogs; addressing the shortfall in the statutory appropriation; and providing for additional and temporary judges and magistrates.

Infrastructure spending

• The annual average growth rate of 28,5 per cent in the allocation of Facilities Management subprogramme in programme 2 – rising from R268,1 million in 2006/07 to R569,3 million in 2009/10 - will fund the construction of new court facilities and the rehabilitation of existing court infrastructure.

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Observations on 2006 ENE Allocations Major areas of growth

• Over the MTEF, expenditure on the Lower Courts sub-programme, which accounts for 66 per cent of this programme’s budget, increase from R1,9 billion in 2006/07 to R2,5 billion in 2009/10, an average annual rate of 8,2 per cent. The increase will go towards the reduction of criminal case backlog, integrating the management of cases and people through the justice chain, human resources development and filling of vacancies

• Expenditure of the NPA is expected to increase rapidly over the MTEF at an average annual rate of 14.9 per cent, rising from R1,6 billion in 2006/07 to R2,4 billion in 2009/10. The main contributor to the growth is the Public Prosecutions subprogramme for which expenditure rises from R1,1 billion in 2006/07 to R1,7 billion in 2009/10, an average annual rate of 15,2 per cent. This sub-programme accounts for 71 per cent of the programme’s budget

• Additional amounts allocated in the 2007 MTEF budget include R57,5 million, R91,3 million and R153,5 million to increase human resources capacity in the Legal Aid Board, the Special Investigating Unit, the Commission on Gender Equality and the South African Human Rights Commission. The allocation also includes funding for the development of an electronic case management system and the integration of existing IT systems to address the operational and administrative requirements of the Office of the Public Protector.

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Observations on 2006 ENE Allocations

Major areas of growth (cont)

• The 2007 Budget sets out additional allocations of R88 million in 2007/08, R92 million in 2008/09 and R97 million in 2009/10 for spending on the Modernisation of the Integrated Justice Sector Programme. The Programme aims to automate and modernize systems and to improve inter-connectivity between Departments in the Criminal Justice System.

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MTEF ALLOCATIONS PER BRANCH (Preliminary)

2006/07 2007/08 % 2008/09 2009/10R'000 R'000 INCREASE R'000 R'000

CEO 100,240 121,873 22% 125,231 177,394MINISTRY 17,427 19,349 11% 20,316 21,536COO 210,811 205,602 -2% 215,882 228,835CFO 191,188 202,873 6% 213,317 233,782PEC 38,903 42,132 8% 44,239 46,803ISM 300,389 363,019 21% 404,020 427,742HR 58,972 79,099 34% 83,030 89,825L&CD 44,953 47,661 6% 50,006 58,375SLA 21,949 29,003 32% 30,697 33,212CLO 139,655 180,648 29% 190,000 210,741MASTERS 163,764 196,613 20% 241,562 270,647COURT SERV 2,770,797 3,000,114 8% 3,341,813 3,774,098JUST COLL 45,829 59,549 30% 74,321 82,912IND BODIES 791,138 924,943 17% 1,046,068 1,190,785INTERCEPT 570 601 5% 636 712NPA 1,582,062 1,804,691 14% 2,085,314 2,380,911TOTAL 6,478,647 7,277,770 12% 8,166,452 9,228,310

JUDGES 1,071,056 1,263,518 1,339,329 1,419,689TOTAL 7,549,703 8,541,288 9,505,781 10,647,999

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Court ServicesCourt Services 2006/07 2007/08 2008/09 2009/10Constitutional Court 44,850,000 46,267,000 49,968,000 55,465,000

Supreme Court of Appeal 14,099,000 15,942,000 17,242,000 18,232,000

High Courts 155,522,000 175,482,000 189,687,000 200,535,000

Specialised Courts 20,701,000 20,577,000 22,221,000 23,491,000

Lower Courts 1,936,698,000 1,910,759,000 2,158,785,000 2,453,330,000

Family Advocate 56,780,000 72,309,000 78,210,000 83,185,000

Judicial Service Commission 1,132,000 1,189,000 1,257,000 1,414,000

Magistrate's Commission 5,334,000 6,948,000 7,372,000 7,852,000

Government Motor Transport 28,863,000 30,306,000 31,821,000 34,366,000

Facilities Management 268,134,000 466,902,000 508,703,000 569,350,000

Administration of Courts 217,632,000 251,992,000 268,080,000 283,822,000

TOTAL 2,749,745,000 2,998,673,000 3,333,346,000 3,731,042,000

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Regional Budget Allocation (Branch: Court Services)

Court Services 2006/07 2007/08 2008/09 2009/10KWAZULU NATAL 260,104,000 294,107,000 323,098,000 334,989,000

EASTERN CAPE 282,485,000 299,126,000 323,444,000 342,242,000

GAUTENG 317,208,000 349,781,000 377,967,000 399,866,000

MPUMALANGA 98,883,000 108,844,000 117,470,000 124,268,000

LIMPOPO 160,890,000 171,265,000 184,053,000 194,701,000

WESTERN CAPE 162,712,000 212,381,000 229,685,000 242,666,000

FREESTATE 135,764,000 155,972,000 165,184,000 174,540,000

NORTHERN CAPE 60,036,000 66,665,000 70,661,000 74,664,000

NORTH WEST 121,064,000 137,454,000 146,396,000 154,833,000

NATIONAL OFFICE 731,770,000 916,388,000 1,094,708,000 1,370,188,000

TOTAL 2,330,916,000 2,711,983,000 3,032,666,000 3,412,957,000

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State Legal Services R Thousand 2006/07 2007/08 2008/09 2009/10

State Law Advisors 21,949 23,003 24,337 26,534

Litigation and Legal Services 156,088 148,648 156,080 175,125

Legislation and Constitutional development 44,953 47,661 50,006 58,375

Master of the High Court 162,764 196,613 241,562 270,647

Total 385,754 415,925 471,985 530,681

Expenditure is expected to continue to increase steadily, rising from R385,8 million in 2006/07 to R530,7 million in 2009/10, at an average annual rate of 11,2 per cent over the MTEF.

The increase in spending on this programme goes towards - • improving access to Guardian Fund Services,• facilitating accessibility of deceased and insolvent estates services• increasing capacity through employment of additional personnel and developing the skills of existing personnel

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National Prosecuting Authority

NPARevised Estimate

R Thousand 2006/07 2007/08 2008/09 2009/10

Public Prosecutions 1,115,975 1,265,099 1,468,754 1,686,412

Witness Protection Programme 59,271 104,435 126,171 139,744

Directorate of Special Operations 352,900 373,100 414,650 469,555

Asset Forfeiture Unit 53,916 62,057 75,739 85,200

Total 1,582,062 1,804,691 2,085,314 2,380,911


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National Prosecuting Authority

• Within the additional amounts allocated in the 2007 Budget, R120 million, R170 million and R199 million have been provided for each of the MTEF years to the –

– acquisition of a new building in KwaZulu-Natal; – the refurbishment of the Inner Chambers building in

Johannesburg;– taking over 85 SAPS officials currently performing the

witness protection functions; and – the appointment of 650 prosecutors to fully implement

the initiative of assigning two prosecutors per court and to reduce criminal case backlogs

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Transfer payments - Public Entities and Constitutional Institutions

Public Entities and Constitutional Institutions

Revised Estimate

R Thousand 2006/07 2007/08 2008/09 2009/10

South African Human Rights Commission 49,220 55,281 60,603 66,129

Commission on Gender Equality 37,757 39,745 44,193 46,550

Special Investigating Unit 55,582 93,111 116,297 149,435

Legal Aid Board 501,409 574,729 650,312 740,094

Public Protector 67,784 78,722 86,475 95,099

Total 711,752 841,588 957,880 1,097,307

Year on Year Growth 18.24% 13.82% 14.56%


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Transfer payments - Public Entities and Constitutional Institutions

Within the additional amounts allocated in the 2007 Budget, R27,5 million, R41,25million, and R93,5 million have been provided for each of the 2006 MTEF years to -

– increase human resources capacity in the Legal Aid Board; (R120 million)

– increase capacity in the office of the Public Protector, the Commission on Gender Equality and the South African Human Rights Commission.

• In the 2007 budget The Special Investigating Unit receives an additional R130 million for increasing capacity.

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THANK YOU

1 CFO Report 7 March 2006 DOJ&CD Portfolio Committee Budget Hearings.

Documents

Transcript of 1 CFO Report 7 March 2006 DOJ&CD Portfolio Committee Budget Hearings.