PRESENTATION TO PORTFOLIO COMMITTEE 2013 ESTIMATES OF NATIONAL EXPENDITURE (ENE)

PRESENTATION TO PORTFOLIO COMMITTEE

2013 ESTIMATES OF NATIONAL EXPENDITURE (ENE)

OUTLINE OF THE PRESENTATION3

Purpose of the presentation is to brief the Portfolio Committee onDCS’s 2013 Estimates of National Expenditure (ENE)

A. Summary of overall Departmental 2013 ENE

B. Reprioritisation initiatives and budget baseline reductions

C. Personnel as reported in 2013 ENE: Details of funded vacancy rates

D. Comments on 2013 ENE per programme

E. 2013 ENE allocations per programme

F. Comments on ENE per economic classification

G. 2013 ENE allocations per economic classification

H. 2013 ENE allocations per region, per programme and per

economic classification.

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• Table 1 below shows summary of total departmental allocation over the

2013 MTEF period

• Baseline allocation figures are R18,748 billion (5.9% increase) in

2013/14, R19,721 billion (5.2% increase) in 2014/15 and R20,795

billion (5.5% increase) in 2015/16

• Cabinet approved budget cuts of R237,6 million in 2013/14, R458

million in 2014/15 and R504,5 million in 2015/16 were implemented

• New additional allocations for Improved Conditions of Services (ICS)

amounted to R222 million for 2013/14, R278,4 million for 2014/15 and

R483,6 million for 2015/16

A. Summary of overall Departmental 2013 ENE

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• Allocations are in support of the 3 of the 12 national outcomes and DCS

adopted 3 outcomes: Improved quality of education, long and healthy life

for all South Africans, all people in SA are and feel safe.

• Consideration of high strategic priorities for the Department: sound

planning supported by programmes, objectives, qualitative performance

indicators and relevant targets.

• Linkage between medium term planning and budgeting

• Other priorities that are identified over the medium term period are as

follows:

– Remand Detention Management

– Offender Population Management

– Improve offender involvement in offender labour

– Increase in offender involvement in rehabilitation programmes

– Enhance Management of Parole System

A. Summary of overall Departmental ENE for 2013/14 MTEF

(continued)

Table 1: Summary of allocations for ENE 2013/14 MTEF (continued)

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MTEF Allocation 2013/14



R'000 R'000 R'0002013 MTEF ALLOCATIONS 18,748,074 19,721,111 20,795,271Earmarked amountsDevolution of funds from Public Works of which: 1,685,783 1,786,931 1,869,128Accommodation charges 874,151 926,600 969,224Leases 75,276 79,793 83,463Municipal services 736,356 780,538 816,442Repair and maintenance 199,000 207,203 216,734Payments for capital assets: Upgrading, rehabilitation and refurbishment of facilities 604,067 605,757 603,214

B. Reprioritisation initiatives and budget baseline reductions

• After the initial submission of the draft ENE the following amendments were implemented:-

• A letter was written to National Treasury requesting a shift of funds from Programme 1: Admin: Goods and services to Programme 2: Incarceration: Compensation of employees for the creation of 95 posts to increase capacity for facilities management with a budget allocation of R38,7 million in 2013/14, R41 million in 2014/15 and R42,9 million in 2015/16.

• An approval was granted by National Treasury on the 15 January 2013 to shift funds and to incorporate changes in 2013 ENE.

• Remand Detention branch was funded R30,9 million for detainee uniform through a reprioritisation of funds from GITO amounting to R17,9 million and from Security amounting to R13 million. In GITO branch, an amount of R30 million was also shifted from Goods and Services to payments for capital assets under Software and other intangible assets for the payment of software licenses.

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B. Reprioritisation initiatives and budget baseline reductions (continued)

•A revised allocation letter concerning further reduction of budget was received from National Treasury on 7 February 2013. •National Treasury indicated that due to increasing economic challenges Cabinet has approved on 6 February 2013 that spending in the entire country be reduced by R14.8 billion over the MTEF period. The impact of the budget reduction on DCS was as follows:

R50 million in 2013/14;

R60 million in 2014/15; and

R70 million in 2015/16 these amounts were reduced under the Programme Administration: Item: Compensation of

Employees.•The impact of these reductions are summarised as per table 2 below.

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B. Impact of baseline reductions over MTEF

80 000 85 000

Table 2

2013/14 2014/15 2015/16R’000 R’000 R’000

Special Remmission savings

52,487 54,775 57,070

Travel & Subsistence: Accommodation

5,150 31,500 33,000

GITO 0 102,862 96,000

Facilities 130,000 164,878 203,416

Non-essential items 0 44,000 45,000Total baseline reductions 187,637 398,015 434,486

7 Febr 2013 reductions - against Compensation of Employees

50,000 60,000 70,000

Total baseline reductions over MTEF 237,637 458,015 504,486

Detail of reduction

C. Personnel as reported in 2013 ENE: Details offunded vacancy rates

• The Department’s 2012/13 current funded establishment is 41 911 posts. There were 1 507 posts as at end of September 2012 been carried additional to the establishment.

• The filled posts up to 30 September 2012 are 40 349 permanent posts + 1 507 carried additional to the funded establishment bringing the total filled posts to 41 856.

• The Department is continuing with the process of filling all funded vacant posts.

• The Department’s post establishment will increase from 1 April 2013/14 with the additional 95 posts funded under subprogramme Facilities to 42 006.

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D. Comments on ENE 2013/14 Per Programme

Programme 1: Administration

The bulk of spending goes towards compensation of employees and goods and services, while the programme’s two largest subprogrammes are Office Accommodation and Corporate Services.

Over the medium term, expenditure on compensation of employees is expected to increase due to additional allocations for improved conditions of service, while expenditure on goods and services, specifically operating leases and property payments, is expected to increase mainly because of additional allocations for escalating accommodation charges and municipal services.

The significant increase in expenditure on travel and subsistence in 2013/14 provides for above average increases in transport costs, while the increase in expenditure on food and food supplies from 2013/14 provides for the planned self-provision of food services in centres where it is currently outsourced. Expenditure in the Corporate Services subprogramme is expected to increase over the medium term to provide for improved conditions of service and training for personnel.

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D. Comments on ENE Per Programme

Programme 1: Administration

As part of the Cabinet approved budget reductions, the department will reduce spending by R55.2 million in 2013/14, R220.4 million in 2014/15 and R216 million in 2015/16. These reductions will be effected on compensation of employees and non-essential goods and services items such as assets whose value is below the capitalisation threshold, consumables, stationery and printing, and machinery and equipment.

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D. Comments on ENE Per Programme

Programme 2: Incarceration

The bulk of spending in this programme goes towards compensation of employees, mainly due to the labour intensive nature of the Security Operations subprogramme.

Growth in expenditure in the Facilities subprogramme between 2012/13 and 2015/16 provides for improved security in correctional centres and operational costs for the Brandvlei, Ceres and Van Rhynsdorp correctional centres, which are set to open in 2012/13.

Over the same period, the increase in expenditure on the Offender Management subprogramme will provide for improved work of case management committees.

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D . Comments on ENE Per Programme (Continued)

Programme 3: Rehabilitation

The bulk of spending in this programme goes towards compensation of employees, due to the labour intensive nature of its largest subprogramme, Offender Development.

Spending on compensation of employees over the seven-year period increases, mainly due to the filling of vacant posts and additional funding for the implementation of the OSD for correctional officials, educators and artisans, and improved conditions of service as required by resolution 1 of 2007 of the PSCBC.

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D . Comments on ENE Per Programme (Continued)

Programme 3: Rehabilitation

The significant increase in expenditure in the Psychological, Social and Spiritual Services subprogramme from 2012/13 to 2015/16 was due to an increase in the number of offenders using the services this subprogramme offers and the intensification of awareness programmes at correctional centres.

Expenditure on goods and services over the medium term to provide for the purchase of additional material, supplies, transport costs and fuel for processing items and products in departmental production workshops and agricultural activities. Payments for capital assets also increased as a result of replacing equipment in production workshops countrywide.

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D. Comments on ENE Per Programme (Continued)

Programme 4: Care

The bulk of spending in the programme goes towards goods and services, and its two largest subprogrammes are Nutritional Services and Health Services. The largest goods and services items are agency and support services, and food and food supplies inventory for outsourced catering services.

As part of the Cabinet approved budget reductions, the department will reduce spending by R49.8 million in 2013/14, R62.2 million in 2014/15 and R64.6 million in 2015/16. The reductions will be effected in spending on goods and services items such as inventories, and agency and support services. A large part of these reductions are as a result of savings realised from the 2012 special remission of sentences, which reduced the number of offenders in custody.

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D. Comments on ENE Per Programme (Continued)

Programme 5: Social Reintegration

The bulk of this programme’s spending goes towards compensation of employees due to the labour intensive nature of its largest subprogramme, Supervision. The increase in expenditure in this subprogramme over the seven-year period is due to additional funding for the implementation of OSD for correctional officers and improved conditions of service as required by resolution 1 of 2007 of the PSCBC.

The increase in expenditure in the Community Reintegration subprogramme over the medium term provides for an expected increase in the number of persons under parole and correctional supervision and the implementation of integration programmes, such as the halfway house project to reintegrate released offenders into society.

E. ENE 2013/14 Allocations per Programme

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Programme

Current Budget Baseline 2012/13




% 12/13-13/14

% 13/14-14/15

% 14/15-15/16

R'000 R'000 R'000 R'000ADMINISTRATION 4,653,742 5,250,679 5,474,024 5,851,495 13% 4% 7%INCARCERATION 9,462,397 10,021,544 10,567,748 11,051,753 6% 5% 5%REHABILITATION 966,813 1,092,355 1,144,263 1,208,721 13% 5% 6%CARE 1,871,871 1,582,155 1,676,452 1,768,269 -15% 6% 5%SOCIAL REINTEGRATION 745,460 801,341 858,624 915,033 7% 7% 7%Total 17,700,283 18,748,074 19,721,111 20,795,271 6% 5% 5%

Table 3

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F. Comments on ENE per Economic Classification

• Table 4 below shows allocation per Economic Classification over MTEF period.

• Allocation for compensation of employees is R12,452 billion in 2013/14, R13,316 billion in 2014/15 and 14,113 billion in 2015/16. Spending on this item is expected to grow to R13,1 billion at an average annual rate of 7.1% mainly due to additional allocations for improved conditions of service as indicated above and the implementation of occupational specific dispensation for correctional officials and others as required by resolution 1 of 2007 of the Public Service Coordinating Bargaining Council

• Allocation for Goods and Services is R5,102 billion in 2013/14, R5,344 billion in 2014/15 and R5,614 billion in 2015/16 at an average of 3.9% over the MTEF.

• Allocation for Transfers is R77.6 million in 2013/14, R75.4 million in 2014/15 and R79.5 million in 2015/16 for estimated legal claims costs against the state and number of personnel exiting the system.

• Allocation for Capital assets is R1,117 billion in 2013/14, R986 billion in 2014/15 and R988 billion in 2015/16. There was budget cut of 12% on this item in 2012/13 as a result of under spending on capital works projects.

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Table 4

Programme





% 12/13-13/14

% 13/14-14/15

% 14/15-15/16

R'000 R'000 R'000 R'000Compensation of Employees 11,550,343 12,452,068 13,315,604 14,113,318 8% 7% 6%Goods and Services 5,033,123 5,101,955 5,343,677 5,614,110 1% 5% 5%Transfers 74,864 77,555 75,411 79,547 4% -3% 5%Payment for Capital Assets 1,041,953 1,116,496 986,419 988,296 7% -12% 0%Total 17,700,283 18,748,074 19,721,111 20,795,271 6% 5% 5%

G. ENE Allocations per Economic Classification

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H. ENE Allocations per Region, per Programme and per Economic classification

• Table 5 and 6 shows below ENE allocations to Regions as per Programmes and Economic Classification.

• The ENE allocations to regions was based on their previous baseline adjusted with the inflator of 5 per cent. Regions have reprioritized the funds within the above-mentioned allocation.

H. ENE 2013 Allocations per Region and per Programme

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Table 5Region Administratio

nIncarceration

Rehabilitation Care Social reinte-gration

Total

R'000 R'000 R'000 R'000 R'000 R'000Head Office 3,123,615 2,104,493 43,982 38,481 54,413 5,364,984Of which the following sub-programmes are centralised in Head Office

- 1,695,715 - - 35,000 3,419,625Staff and office accomodation 1,688,910 - - - 35,000 1,723,910PPP Prisons - 934,152 - - - 934,152Capital works - 761,563 - - - 761,563Gauteng 354,918 1,750,546 247,121 433,753 123,589 2,909,927Western Cape 438,259 1,483,053 246,866 280,364 160,170 2,608,712Eastern Cape 292,548 1,092,731 147,193 239,552 104,906 1,876,930KwaZulu/Natal 341,261 1,416,067 141,625 217,141 107,057 2,223,151LMN 369,205 1,089,296 123,887 169,746 145,250 1,897,384Free State/NC 330,873 1,085,358 141,681 203,118 105,956 1,866,986Total 5,250,679 10,021,544 1,092,355 1,582,155 801,341 18,748,074

H. ENE 2013 Allocation per Region and per Economic Classification

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Table 6Region Compen-sation

of EmployeesGoods and Services

Transfers Payment for Capital Assets

Total

R'000 R'000 R'000 R'000 R'000Head Office 1,082,246 3,218,049 46,517 1,018,172 5,364,984Of which the following GFS item are centralised in Head Office - 2,620,827 - 798,798 3,419,625Office & staff accomodation - 1,723,910 - 1,723,910PPP Prisons - 739,421 - 194,731 934,152Capital works - 157,496 - 604,067 761,563Gauteng 2,361,336 507,654 5,786 35,150 2,909,927Western Cape 2,213,218 357,858 8,448 29,188 2,608,712Eastern Cape 1,607,808 243,379 2,323 23,420 1,876,930KwaZulu/Natal 1,905,583 306,394 6,124 5,050 2,223,151LMN 1,669,226 224,880 3,250 28 1,897,384Free State/NC 1,612,651 243,740 5,107 5,488 1,866,986Total 12,452,068 5,101,954 77,555 1,116,496 18,748,074

• THANK YOU• STRIVING FOR A SOUTH AFRICA IN WHICH PEOPLE ARE AND FEEL SAFE

PRESENTATION TO PORTFOLIO COMMITTEE 2013 ESTIMATES OF NATIONAL EXPENDITURE (ENE)

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