Building a caring correctional system that truly belongs to all

PORTFOLIO COMMITTEE BRIEFING

2007 Estimates of National Expenditure

ESTIMATES OF NATIONAL EXPENDITURE

CONTENT

1. PRINCIPLES OF CALCULATIONS FOR THE ALLOCATION 2. PRINCIPLES APPLIED ON A MORE DETAILED LEVEL PER ECONOMIC

CLASSIFICATION3. COST DRIVER4. BASELINE BEFORE REDUCTION5. REDUCTION MIN COM BUD6. REINSTATEMENTS7. ADDITIONAL FUNDING8. ENE ALLOCATION PER PROGRAMME9. ENE ALLOCATION PER GFS

PRINCIPLES OF CALCULATIONS FOR ALLOCATION

Division based on zero base as well as incremental base as prescribed by the MTEF manual.

Zero Base:

• Budget from zero mainly non-recurrent expenditure -such as capital projects, equipment and new services etc.

Incremental Base:

• Historical data exists and is taken into account during budgeting phase as well as cost drivers such as personnel numbers (salary level packages) and offender totals (per capita expenditure per offender).

PRINCIPLES OF CALCULATIONS FOR THE ALLOCATION

• Inflation provided was 5% (Provision for price fluctuations etc).

• Key Cost Drivers

– Personnel totals.– Inmates including awaiting trial detainee totals.– Probationer and Parolees– Strategic intentions (Implementation of White Paper etc.)

• Balancing to cabinet approved baseline. (See allocation letter 2007/08 – 2009/10)

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION:

Financed 39,013 PERSNAF report

7-Days 2,627 October Appointments

7-Days 2,627 Last appointment of 7-days in 2007

Head Office ±118 Captured as Rand value and not as posts on the ENE

Big 5 Centers ±464 Captured as Rand value and not as posts on the ENE

White Paper ±300 Captured as Rand value and not as posts on the ENE

Supervisory ±525 Junior Management Posts

TOTAL ±45,674 Projected total for 2007/2008( including 5% vacancy rate)

Current Payments: Compensation of Employees: Baseline for establishment:

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION:

• 464 posts for Big 5 Correctional Centers, 300 White Paper posts and 118 Head Office posts were only captured as rand value

• Rand value of posts captured (Programmes listed as follows)– Administration– Corrections– Development

• Head office posts = R32,3million

• Big 5 Posts = R73,4million

• 2nd White Paper posts = R57million

Current Payments: Compensation of Employees: Budgeted Posts

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION:

BASIC SALARY

Allocation of basic salary is based on salary notches + the annual salary adjustment according to the guidelines set by National Treasury.

6% on year one 2007/2008 5% on year two 2008/2009 5% on year three 2009/2010

Note: Provision is also made for 1% notch increase

Current Payments: Compensation of Employees: Principles applied during ENE Preparation

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION:

• Medical Aid Provision– Pensioners (8200) budgeted @ R1,521 each– Serving members budgeted @ R1014 each– GEMS not provided at this stage due to lack of information on projected take up

• Overtime– Provision is made according to approved post establishment– Provide for requirement of Collective agreement concluded on 29/04/2005 to which

Saturday duties will be compensated with time-off.– From 1 April 2008 actual overtime payment

• Sunday 1½ (BCEA Section 16 determines if employee normally works on a Sunday, overtime payment is x 1½)

• Public holiday (BCEA Section 18 determines if employee works on a Public holiday, overtime payment is x2)

• Pension– Provision of 16% per official per salary notch

• Performance Bonus– Provision of 1.5% of the basic salary

• Housing Allowances– Provided for 60% of the home owners allowance for 2007/2008

• Service Bonus– Provision of one month salary of the basic salary

Current Payments: Compensation of Employees: Principles applied to allocate allowances

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION:

• All the following allowances were allocated based on the per capita cost. Expenditure report for the month end October 2006.

– Capital Remuneration – Empl Contr Bargain Council– Leave discounting – Periodic Payment

Current Payments: Compensation of Employees: Principles applied to allocate allowances

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION:

Provision for the effect of interim promotion is captured on the ENE.

Promotion 5-6 = 2022 Promotion 6-7 = 629

The number of posts to be upgraded with interim promotion has been reduced respectively and added to the next level according to the above numbers.

Current Payments: Compensation of Employees: Interim promotion

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION:

Goods and Services

• Direct cost – use cost drivers (inmates including ATD/ probationers/ parolees) X per unit cost (historical per capita cost) e.g. Per unit / per capita cost for medicine X inflator X number of offenders.

• Indirect expenditure / new services - calculation based on new prices, tariffs, quotations.

• Accommodation, Leases and Municipal services budget was devolved from DPW to departments

– Provision made according to allocation letter. Totals still to be verified by DCS

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION:

Buildings and other fixed structures

• Based on cost and space norms.

Transfers and Subsidies

• Labour gratuity to offenders based on new tariffs and projected number that may qualify.

• Indigent gratuity (Material assistance upon release) to offenders based on new tariffs and projected number that may qualify.

• SAS SETA 1% OF 10% of basic salary

PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION

Machinery and equipment

• Estimations as provided to Directorate Management Accounting by Regional Heads Finance and FCO Head Office. (Prices, tariffs, quotation etc.)

• Minimum allocation R5000

Note : All Principles subjected to availability of Budget

COST DRIVER: OFFENDER POPULATION

Detained Inmate Population 2007/08 2008/09 2009/10

DCS

152,548 153,484 155,148

PPP’S

5,952 5,952 5,952

Total Inmate population

158,500 159,800 161,100

Probationer/ Parolee Population

2007/08 2008/09 2009/10

DCS

60,900 61,600 62,400

PPP’S

0 0 0

Total Probationer parolee population

60,900 61,600 62,400

Note: •DAIP info as on DCS A&R system extracted from MIS- calculated average from April to end of Sep 2006. •DASCP info as on DCS A&R system extracted from MIS- calculated average from April 2005 to end of Dec 2005.•The apparent surplus funding has been absorbed through the increase in per capita cost.

COST DRIVERS USED FOR CALCULATION OF REGIONAL BUDGET R’000

Note:

DAIP info as on DCS A&R system extracted from MIS - calculated average from April to end of Sep 2006.

DASCP info as on DCS A&R system extracted from MIS - calculated average from April 2005 to end of Dec 2005.

RegionsDASCP 2005/06

P ro Rata Fin DASCP 2006/07

DAIP 2006/07

P ro Rata Fin. DAIP 2006/07

Gauteng 13,527 13,768 43,829 43,855Western Cape 10,880 11,074 24,906 24,921Nw/Mp/Lp 11,044 11,241 24,157 24,171Kwazulu/Natal 11,359 11,561 25,804 25,819Eastern Cape 6,311 6,423 19,620 19,632Fs/Nc 6,713 6,833 20,091 20,103TOTAL 59,834 60,900 158,407 158,500

ENE BASELINE BEFORE REDUCTION

Year 0

2006/2007

R’000

Year 0+1

2007/2008

R’000

Year 0+2

2008/2009

R’000

Year 0+3

2009/2010

R’000

Baseline Allocation

10 630 712 11 767 489 12 451 186 13 385 025

REDUCTION MIN COM BUD

2007/08

R’000

2008/09

R’000

2009/10

R’000

Capital 1,085, 246 1,150,434 1,219,208

Compensation of employees 750,000 750,000 750,000

Offender Related 142,800 150,654 158,940

Total 1,978,046 2,051,088 2,128,148

REINSTATEMENT RECOMMENDED

2007/08

R’000

2008/09

R’000

2009/10

R’000

Compensation of employees * 227,962 221,998 95,770

Capital 565,926 559,702 610,118

Total 793,888 781,700 705,888

* DCS TO MAINTAIN 5% VACANCY RATE DECREASING TO 3% IN OUTER YEAR IN LINE WITH REDUCED BUDGET

ALLOCATION LETTER: ADDITIONAL FUNDING

2007/08

R’000

2008/09

R’000

2009/10

R’000

Administration - MISP 35,000 50,000 100,000

Security – Access Control & X Ray Scanners

100,000 100,000 100,000

Care – Remuneration for Health professionals

17,000 19,000 47,000

All Programmes – salary adjustments

7,000 15,000 58,000

Total 159,000 184,000 305,000

ENE BASELINE ALLOCATIONS 2006/2007 - 2009/2010 R’000

Year 0

2006/2007

R’000

Year 0+1

2007/2008

R’000

Year 0+2

2008/2009

R’000

Year 0+3

2009/2010

R’000

Baseline Allocation

9,831,512 10,742,331 11,365,798 12,267,765

% Increase 2.08 9.26 5.80 7.94

ENE ALLOCATION: PER PROGRAMME

Programme Adjusted budget allocation 2006/07

R’000

Year 0+1

2007/2008

R’000

Year 0+2

2008/2009

R’000

Year 0+3

2009/2010

R’000

Administration 2,573,946 2,771,323 2,983,001 3,313,878

Security 3,062,928 3,244,797 3,371,028 3,454,145

Corrections 766,914 1,236,791 1,333,824 1,430,447

Care 1,180,755 1,339,290 1,426,677 1,515,538

Development 394,343 403,917 463,479 490,780

Social reintegration

323,894 336,118 334,446 359,422

Facilities 1,528,732 1,410,095 1,453,343 1,703,555

Total 9,831,512 10,742,331 11,365,798 12,267,765

ENE ALLOCATION PER GFS STRUCTURE

GFS Classification

Adjusted budget allocation 2006/07

R’000

Year 0+1

2007/2008

R’000

Year 0+2

2008/2009

R’000

Year 0+3

2009/2010

R’000

Compensation of employees

5,792,138 6,517,950 6,870,451 7,227,052

Goods and services

2,837,852 3,160,717 3,419,407 3,726,794

Interest and rent on land

48 50 53 57

Transfers and subsidies

33,277 30,859 32,468 34,839

Payments for Capital Assets

1,168,197 1,032,755 1,043,419 1,2789,823

Total 9,831,512 10,742,331 11,365,798 12,267,765

THANK YOU

An Age of Hope: A National Effort for Corrections, Rehabilitation and

Social Re-integration of Offenders

An Age of Hope: a National Effort for Corrections,

Rehabilitation and Social Re-integration of Offenders

THANK YOU