1 2 may 2006 acting cfo sandra gomm ncop select committee on security and constitutional affairs
TRANSCRIPT
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2 May 2006Acting CFO
Sandra Gomm
NCOP
Select Committee on Security and Constitutional
Affairs
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AGENDA
• 2004/05 ANNUAL REPORT OVERVIEW
• 2005/06 BUDGET & EXPENDITURE OVERVIEW
• 2005/06 AUDIT MATTERS
• MTEF ALLOCATIONS
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2004/05 ANNUAL REPORT
OVERVIEW
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2004/05 ANNUAL REPORT OVERVIEW
Final Appr Actual expVariance
R’000 R’000R’000
DOJ & CD R 5 054 418 R5 005 643 R 48 775
Statutory* R 177 083 R 242 093 (R 65 010)
Total R 5 231 501 R5 247 736 (R 16 235)
* Judges Remuneration and Allowances
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2004/05 ANNUAL REPORT OVERVIEW
Programme Final Appr Actual Variance
(after exp
virement)
R’000 R’000 R’000
1. Administration R 579 420 R 579 419 R 1
2. Court Services R 2 291 164 R 2 274 216 R 16 948
3. State Legal Services R 222 684 R 222 684 R 0
4. NPA R 1 202 260 R 1 170 435 R 31 825
5. Auxiliary Services R 758 890 R 758 889 R 1
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2004/05 ANNUAL REPORT OVERVIEWEconomic Final Appr Actual exp Varianceclassification (after
virement)R’000 R’000 R’000
CURRENT
Compensation ofEmployees R 2 727 532 R 2 727 532 R 0
Goods & Services R 1 142 765 R 1 110 940 R 31 825
Financial Transactionsin Assets & Liabilities R 92 504 R 92 335 R 169
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2004/05 ANNUAL REPORT OVERVIEWEconomic Final Appr Actual Variance
classification (after virement)
R’000 R’000 R’000
TRANSFERS & SUBSIDIES
Prov & Municipalities R 8 480 R 8 480 R 0
Dept agencies &Accounts R 606 837 R 606 836 R 1
Foreign gov & internOrganisations R 162 R 162 R 0
Households R 12 550 R 12 550 R 0
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2004/05 ANNUAL REPORT OVERVIEWEconomic Final Appr Actual Varianceclassification (after
virement)
R’000 R’000 R’000
PAYMENT ON CAPITAL ASSETS
Buildings & other fixedStructures R 270 483 R 270 483 R 0
Machinery & Equipment R 183 392 R 166 612 R 16 780
Software & other Intangible assetsR 9 713 R 9 713 R 0
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2004/05 ANNUAL REPORT OVERVIEWDOJ & CD
Unqualified audit report
Emphasis of Matter• Asset management• Suspense accounts
(Agency services)• Contingent Liability –
Monies in Trust• Human Resource
Management• Inability to confirm
compliance with TR 8.2.3
NPA
Unqualified audit report
Emphasis of Matter• Asset management• Debt management• Accountability and
Governance status • Internal Audit• Policies not approved• Annual financial
statements for CARA submitted late
• Donor funds
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2005/06
BUDGET &
EXPENDITURE OVERVIEW
NOTE: UNAUDITED/PRELIMINARY
INFORMATION
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2005/06 – Financial Performance
• R 309 million – Year to date underspending (26 April 2006)
• R 289 million – Roll-over request to NT
• R 20 million – Surplus to be surrendered (0.37% of Departmental Budget)
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• R120 million anticipated underspending as at 7 Feb 2006
• Reduced to R 20 million, as at 26 April 2006, due to the finalisation of projects resulting in increased commitments (Roll-overs)
2005/06 – Financial Performance
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2005/06 Budget & Expenditure OverviewUPP's (Red) Stacked upon Budget Allocations (Blue)
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2005/06 2004/05 2003/04 2002/03
Years
R'0
00
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2005/06 Budget & Expenditure Overview• 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
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2005/06 Budget & Expenditure OverviewDoJ&CD - Monthly Expenditure Trend
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1 2 3 4 5 6 7 8 9 10 11 12
Months
R'0
00 2005/06
2004/05
2003/04
2002/03
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2005/06 Budget & Expenditure Overview• High expenditure in last quarter of
financial year due to – – Capital Works payments (DPW)– Payments for software licenses– Government Garage payments– Computer Hardware (DNS)– Payments for Professional Service
Providers– Authorised write-offs
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2005/06 Budget & Expenditure Overview
ProgrammeAdjusted Estimates
Expenditure VariancePercentage
Expenditure
R Thousand
Administration 389,279 370,097 19,182 95.07%
Court Services 2,289,577 1,948,405 341,172 85.10%
State Legal Services 313,824 299,590 14,234 95.46%
National Prosecuting Authority 1,354,810 1,398,187 -43,377 103.20%
Auxiliary and Associated Services 838,243 860,607 -22,364 102.67%
Sub Total 5,185,733 4,876,886 308,847 94.04%
Judges & Magistrates Salaries 849,977 1,040,097 -190,120 122.37%
TOTAL 6,035,710 5,916,983 118,727 98.03%
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2005/06 Budget & Expenditure Overview
Economic classification Adjusted Estimates
Final Expenditure
VariancePercentage Expenditure
Compensation of employees 2,403,989.00 2,226,667.00 177,322.00 92.6%
Goods and services 1,613,707.00 1,384,592.00 229,115.00 85.8%
Financial trans in assets and liab - 39,798.00 (39,798.00)
Departmental agencies and accounts 685,407.00 703,812.00 (18,405.00) 102.7%
Provinces and Municipalities 7,784.00 10,482.00 (2,698.00) 134.7%
Foreign govts and internat organ 3,942.00 4,107.00 (165.00) 104.2%
Households - 42,567.00 (42,567.00)
Machinery and Equipment 151,135.00 158,097.00 (6,962.00) 104.6%
Buildings and other fixed structures 317,975.00 306,312.00 11,663.00 96.3%
Software and other intangible assets 1,794.00 452.00 1,342.00 25.2%
Total 5,185,733.00 4,876,886.00 308,847.00 94.0%
R Thousand
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2005/06 Budget & Expenditure Overview
MAJOR REASONS FOR UNDERSPENDING
• Savings on personnel because of vacancies and staff turnover. The approval of the framework for court managers in September 2005 resulted in most court management position only being filled now;
• Magistrates salaries direct charge against Revenue Fund w.e.f. 1 April 2005;
• The Monies in Trust project – delays in the negotiation and final approval/s stages;
• Savings in operational cost because of delays in appointments;
• Infrastructure projects still in progress (Court building, maintenance and upgrading);
• Government and departmental priorities not yet finalised such as the finalisation of the Children’s Bill, the Child Justice Bill, the Sexual Offences Bill; and
• Delays in the procurement processes.
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2005/06 AUDIT MATTERS
• Matters potentially affecting the audit reports of the DOJ & CD and the NPA (as per interim management letters from AG)
– Asset management
– Debt management
– Accountability and Governance Status of the NPA
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2005/06 AUDIT MATTERS
• Monies in Trust– 2004/05: Qualified audit opinion
• Guardians Fund– 2002/03 & 2003/04: Disclaimer of audit opinions
and Publication and Tabling outstanding;– 2004/05: Audit in process
• President Fund – Unqualified audit opinion
• CARA – Unqualified audit opinion for period 1999 to 2005
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MTEF ALLOCATIONS
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MTEF Allocations 2005/06 – 2008/09
ProgrammeRevised Estimate
R Thousand 2005/06 2006/07 2007/08 2008/09
Administration 389,279 761,679 848,747 920,701
Court Services 2,289,577 2,609,746 2,927,983 3,202,664
State Legal Services 313,824 376,354 421,731 478,613
National Prosecuting Authority 1,354,810 1,535,562 1,709,691 1,947,314
Auxiliary and Associated Services 838,243 986,539 1,045,118 1,138,910
Sub Total 5,185,733 6,269,880 6,953,270 7,688,202
Judges & Magistrates Salaries 849,977 1,042,665 1,114,547 1,182,789
TOTAL 6,035,710 7,312,545 8,067,817 8,870,991
Year on Year Growth 21.15% 10.33% 9.96%
Medium -term expenditure estimates
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Observations on 2006 ENE Allocations • Between 2002/03 and 2008/09, the department’s budget, including statutory amounts, is expected to increase at an average annual rate of 11,2 per cent, from R4,7 billion to R8,9 billion.
• The largest part of this increase goes towards increasing personnel capacity and providing services, hence the relatively large increases in the Court Services and National Prosecuting Authority programmes.
• The 2006 Budget sets out additional allocations of R495 million for 2006/07, R722 million for 2007/08 and R1,1 billion for 2008/09 mainly for spending on the policy priorities of improving access and increased capacity, but also for an increase in the statutory provision for judges’ and magistrates’ salaries.
• From April 2006, the department has taken responsibility for accommodation costs which were devolved from the Department of Public Works. [R309,8 million in 2006/07, R344,9 million in 2007/08 and R369,4 million in 2008/09]
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• Over the MTEF, there is a relatively large increase in expenditure on the Lower Court subprogramme, which accounts, on average, for 70,5 per cent of this programme’s budget, from R1,5 billion in 2005/06 to R2,3 billion in 2008/09, an average annual rate of 15,8 per cent. This will go towards improving service delivery, integrating the management of cases and people through the justice chain, human resources development and filling vacancies.
• The increase in expenditure on the Capital Works subprogramme, from R268,1 million in 2006/07 to R308,3 million in 2008/09, is to fund the building of new courts and the rehabilitation of existing court infrastructure.
• Additional allocations of R34 million in 2006/07, R 61 million in 2007/08 and R92,9 million in 2008/09 are for improving access to the services of the Guardian’s Funds and for deceased and insolvent estate services.
Observations on 2006 ENE Allocations
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Regional Budget Allocation (Court Services)
2005/06 2006/07 Growth
KWAZULU NATAL 202,280,000 265,303,000 31.2%
EASTERN CAPE 229,260,000 282,785,000 23.3%GAUTENG 240,460,000 317,208,000 31.9%MPUMALANGA 71,810,000 98,883,000 37.7%LI MPOPO 128,010,000 160,890,000 25.7%WESTERN CAPE 122,200,000 163,512,000 33.8%FREE STATE 107,770,000 135,764,000 26.0%NORTHERN CAPE 38,200,000 61,331,000 60.6%NORTH WEST 85,790,000 121,064,000 41.1%
NATI ONAL OFFI CE 882,426,000 832,617,000 -5.6%
TOTAL BUDGET 2,108,206,000 2,439,357,000
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Transfer payments - Public Entities and Constitutional Institutions
Public Entities and Constitutional Institutions
Revised Estimate
R Thousand 2005/06 2006/07 2007/08 2008/09
South African Human Rights Commission 41,774 49,220 53,381 58,103
Commission on Gender Equality 26,469 37,757 38,145 41,193
Special Investigating Unit 43,851 55,582 63,111 76,297
Legal Aid Board 440,008 501,409 554,729 610,312
Public Protector 55,127 67,784 74,722 80,725
Total 607,229 711,752 784,088 866,630
Year on Year Growth 17.21% 10.16% 10.53%
Medium -term expenditure estimates
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Transfer payments - Public Entities and Constitutional Institutions
Within the additional amounts allocated in the
2006 Budget, R75 million, R79 million, and
R129 million have been provided for each of the
2006 MTEF years to –
• increase human resources capacity in the Legal Aid Board;
• increase legal representation for children;
• increase capacity in the office of the Public Protector, the Special Investigating Unit,
the Commission on Gender Equality and the South African Human Rights Commission.
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Allocations to National Prosecuting Authority
NPARevised Estimate
R Thousand 2005/06 2006/07 2007/08 2008/09
Public Prosecutions 944,350 1,069,475 1,210,099 1,368,754
W itness Protection Programme 45,899 59,271 64,435 88,171
Special Operations 364,561 406,816 435,157 490,389
Total 1,354,810 1,535,562 1,709,691 1,947,314
Medium -term expenditure estimates
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Allocations to National Prosecuting Authority
Within the additional amounts allocated in the
2006 Budget, R145 million, R232 million,
and R384,8 million have been provided for each of
the 2006 MTEF years to facilitate: – the rollout of specialised courts;
– the appointment of additional prosecutors;
– implementation of job evaluation results in the National Prosecuting Authority;
– special projects on organised crime syndicates and cyber crime, and
– enhancing capacity in the asset forfeiture and witness protection units.
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THANK YOU