CFO Report

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DOJCDPortfolio Committee Budget Hearings

• CFO Report
• 7 March 2006

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• AGENDA
• 2005/06 FINANCIAL AND AUDIT REPORT OVERVIEW
• 2006/07 PRELIMINARY / UNAUDITED FINANCIAL
  OVERVIEW
• MTEF BUDGET ALLOCATIONS

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2005/06 FINANCIAL OVERVIEW

• Final Appr Actual exp Variance
• R000 R000 R000
• 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-PRIORITISATION
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2005/06 BUDGET RE-PRIORITISATION
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2005/06 BUDGET RE-PRIORITISATION
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UPPS VS BUDGET ALLOCATION
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UPPS VS BUDGET ALLOCATION

• Budget allocations (Blue) include marginally
  funded projects
• UPPs (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-PRIORITISATION

• COURT 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 MATTERS

• 2005/06 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 MATTERS

• 2005/06 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 MATTERS

• 2006/07 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
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2006/07 Budget Expenditure Overview
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Budget Expenditure Trends
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2006/07 Budget Expenditure Overview

• 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 UPPs (funds
  to be committed for roll-overs)

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2006/07 Financial Performance

• 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

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2006/07 Financial Performance

• Approved re-allocations
• Branch Details Amount
• (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 R1,510
• Officer
• 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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2006/07 Financial Performance

• Identified UPPs funds to be committed for
  roll-overs
• Facilities Management / DPW R 256 m
• Library books/legal reports R 38,5 m
• Mobile Courts (30 units) R 3 m
• Legal Aid Board (Case Backlogs) R 1,8 m
• TOTAL 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
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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 programmes 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 programmes 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)
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Court Services
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Regional Budget Allocation (Branch Court
Services)
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State Legal Services

• 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
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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
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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