PRESENTATION TO THE PORTFOLIO COMMITTEE – EXPENDITURE AS AT 31 MARCH 2013 18 JUNE 2013

CONTENTS Introduction Expenditure as at 31 March 2013: Per Programme – high level Per Economic classification Per Sub-Programme Per Province

INTRODUCTION The presentation will cover the expenditure against the budget as at 31 March 2013 as per the Annual Financial Statements submitted to the Auditor General on the 31st of May 2013. In earlier presentations to the Portfolio Committee and in the Strategic Plan as presented, the Department indicated that it had established a Trading Entity. The purpose of the Trading Entity was for the Department to retain the funds from producing of face value documents and then use it to cover the production costs of the documents. This applied to Civic and Immigration Services Revenue. The approval obtained from National Treasury was effective from 2011/12 financial year but the Department deferred the operations of the Trading Entity to the 2012/13 financial year and in agree to the postponement, the National Treasury granted the Department additional funds for the printing of the face value documents, passports specifically.

INTRODUCTION (CONT…) In operationalising the Trading Entity, the Department liaised with National Treasury on the expenditure items that should be covered from the Trading Entity Revenue. The confirmation obtained from National Treasury made provision of the direct expenditure incurred by the Department in producing the face value documentation. All other costs e.g. rental of office space, compensation of employees, etc. will form part of the VOTE as funds were appropriated. In discussing the matter with the Auditor-General (AG), a number of challenges arose. For example, in the view of the AG, all expenditure line items should form part of the Trading Entity. This will then leave the Department only with Administrative Expenditure. Also, AG wanted the Department to account for revenue as a sale of service instead of sale of goods. This prosed a significant challenge to the Department as the Department did not have adequate systems to account for revenue as a sale of service.

National Treasury was then consulted and it was agreed that: INTRODUCTION (CONT…) In short, the Trading Entity was facing an unfavourable audit opinion which would have an impact on the audit opinion of the VOTE. National Treasury was then consulted and it was agreed that: The Trading Entity be deferred for at least another 3 years During the 3 years, research should be conducted to find the appropriate vehicle for the Department to achieve the ‘self funding’ objective The over-expenditure as a results of the Trading Entity expenditure will be supported by National Treasury This therefore led to the Department overspending on the VOTE. The revenue collected for the year under review amounts to R687m, which will be paid to the National Revenue Fund.

EXPENDITURE BEFORE TRADING ACCOUNT Adjusted Appropriation Per Programme Adjusted Appropriation Actual Expenditure Variance   R'000 % Administration Support Services 1,601,803 1,461,555 91.2% 140,248 Services to Citizens 2,895,195 2,894,803 100.0% 392 Immigration Services 746,890 746,888 2 Total 5,243,888 5,103,246 97.3% 140,642 Note: This represents the budgeted expenditure before the Trading Entity expenditure was taken into account.

EXPENDITURE AS AT 31 MARCH 2013 – PER PROGRAMME Adjusted Budget Allocation Actual Expenditure % Budget spent Amount Available   R'000 Administration Support Services 1,616,723 1,476,591 91.3% 140,132 Services to Citizens 2,951,269 3,177,492 107.7% (226,223) Immigration Services 675,896 750,199 111.0% (74,303) Total 5,243,888 5,404,282 103.1% (160,394) NOTE: Detailed explanations per programme on next slide. The main reason for the over spending on the vote is due to the postponement of the implementation of the Trading Entity as explained above.

EXPENDITURE AS AT 31 MARCH 2013 – PER ECONOMIC CLASSIFICATION Description Adjusted Budget Allocation Actual Expenditure % Budget spent Amount Available   R'000 CURRENT 4,121,080 4,319,349 104.8% (198,269) Compensation of Employees 2,224,235 2,179,593 98.0% 44,642 Goods and Services 1,896,845 2,139,756 112.8% (242,911) TRANSFERS AND SUBSIDIES 980,462 980,179 100.0% 283 Provinces and municipalities 857 856 99.9% 1 Departmental agencies and accounts 967,219 – Households 12,386 12,104 97.7% 282 PAYMENT OF CAPITAL ASSETS 141,988 104,396 73.5% 37,592 Machinery and equipment 119,999 96,753 80.6% 23,246 Software and intangible assets 21,989 7,643 34.8% 14,346 PAYMENT FOR FINANCIAL ASSETS 358 GRAND TOTAL 5,243,888 5,404,282 103.1% (160,394)

EXPENDITURE AS AT 31 MAY 2013 – PER PROGRAMME The expenditure at the end of March 2013 is 103.1% against the linear projections of 100.0%. During the year under review, the Department overspent its allocation by 3,1% (R160 million), however, considering that the unspent funds in Programme 1 (R140 million) represents earmarked funds for DHA IT Modernisation, the department has overspent its budget by 6% (R301 million). This overspending is due to the non-implementation of the Trading Entity. Expenditure in respect of Inv:Sta&Prnt: Government Printer, Courier Services and Cash in Transit which was allocated to the Trading account was journalised back into the vote creating an overspending. Programme One: Administration – Spending at the end of March 2013 is 91.3% which is lower than the linear projection of 100.0% and can mainly be attributed to: Delays in the spending against the Modernisation Information System (WAIO) allocation. In April 2013, the Department requested a roll over of the funds but due to technical over expenditure, the roll over request was not further considered.

EXPENDITURE AS AT 31 MAY 2013 – PER ECONOMIC CLASSIFICATION Programme Two: Citizen Affairs - Spending at the end of March 2013 is 107.7% and can be attributed to the non-implementation of the Trading Entity as discussed above. Programme Three: Immigration Affairs - Spending at the end of March 2013 is 111.0% which is 11% higher than the linear projections. There are three cost centres that overspent namely: Deportation APP Transportation of Immigration Officers The non-implementation of the Trading Entity which also had an impact on the overspending.

Adjusted Budget Allocation EXPENDITURE AS AT 31 MAY 2013 PER SUB-PROGRAMME Description Adjusted Budget Allocation Actual Expenditure % Budget spent Amount Available   R'000 ADMINISTRATION SUPPORT SERVICES 1,616,723 1,476,591 91.3% 140,132 Ministry 26,633 100.0% – Management Support Services 107,681 Corporate Services 681,534 Transversal IT Management 473,360 333,228 70.4% Office Accommodation 327,515 CITIZEN AFFAIRS 2,951,269 3,177,492 107.7% (226,223) Citizen Affairs Management 31,385 28,473 90.7% 2,912 Status Services 67,175 302,282 450.0% (235,107) Identification Services 242,817 242,549 99.9% 268 Access to Services 66,956 62,866 93.9% 4,090 Service Delivery to Provinces 1,575,726 1,574,112 1,614 Film and Publication Board 69,835 Government Printing Works 135,219 Electoral Commission 762,156 IMMIGRATION AFFAIRS 675,896 750,199 111.0% (74,303) Immigration Affairs Management 42,624 99,902 234.4% (57,278) Admission Services 293,487 319,780 109.0% (26,293) Immigration Services 271,867 271,866 1 Asylum Seekers 67,918 58,651 86.4% 9,267 GRAND TOTAL 5,243,888 5,404,282 103.1% (160,394)

EXPENDITURE AS AT 31 MARCH 2013 PER SUB-PROGRAMME   BUDGET EXP % SPENT AVAILABLE SUB PROGRAMME R'000 % CORPORATE SERVICES 681,534 100% - COMMUNICATION SERVICES 29,543 29,542 1 COUNTER CORRUPTION&SECURITY 145,783 145,782 FINANCE & SUPPLY CHAIN MAN 275,465 275,466 -1 HUMAN RESOURCES 104,309 LEARNING ACADEMY 126,434 126,435 MANAGEMENT SUPPORT SERVICES 107,681 AUDIT SERVICES 19,917 11,088 56% 8,829 DIRECTOR-GENERAL OFFICE 10,002 8,930 89% 1,072 INTERGOVERNMENTAL RELATIONS 8,714 8,211 94% 503 LEGAL SERVICES 53,579 66,351 124% -12,772 POLICY, AND STRAT MANAGEMENT 15,469 13,102 85% 2,367

EXPENDITURE AS AT 31 MARCH 2013 PROGRAMME AND SUB PROGRAMME PER SUB-PROGRAMME   BUDGET EXP % SPENT AVAILABLE PROGRAMME AND SUB PROGRAMME R'000 % IMMIGRATION AFFAIRS 675,896 750,198 111% -74,302 ADMISSION SERVICES 293,487 319,780 109% -26,293 2010 PROJECT MANAGEMENT - 71 0% -71 AFCON 2013 14,985 9,351 62% 5,634 AIR&MARITIME PORT CONTR 231,179 266,512 115% -35,333 PERMITS 47,323 43,846 93% 3,477 ASYLUM SEEKERS 67,918 58,650 86% 9,268 ASYLUM SEEKERS MANAGEMENT 55,911 49,451 88% 6,460 BOARDS AND COMMITTEES 12,007 9,199 77% 2,808 IMMIGRATION AFFAIRS MNGMNT 42,624 99,902 234% -57,278 19,662 63,386 322% -43,724 3,021 2,038 67% 983 CD:IMMIGRATION SUPPORT 664 DDG:IMMIGRATION SERVICES 8,760 6,370 73% 2,390 FOREIGN OFF COORD & SUPP 4,490 3,847 643 INSPECTORATE 2,256 3,250 144% -994 3,549 20,976 591% -17,427 ZIMBABWEANS PROJECT 35 -35 IMMIGRATION SERVICES 271,867 271,865 100% 2 FOREIGN MISSIONS 65,443 48,668 74% 16,775 6,667 6,349 95% 318 199,757 216,849 -17,092

EXPENDITURE AS AT 31 MARCH 2013 Adjusted Budget Allocation PER PROVINCE Description Adjusted Budget Allocation Actual Expenditure % Budget spent Amount Available   R'000 Service Delivery to Provinces 1,575,726 1,574,112 99.9% 1,614 Eastern Cape 210,907 207,846 98.5% 3,061 Free State 121,733 119,604 98.3% 2,129 Gauteng 334,857 337,001 100.6% (2,144) Kwazulu-Natal 187,120 186,417 99.6% 703 Limpopo 204,833 200,087 97.7% 4,746 Mpumalanga 155,458 164,388 105.7% (8,930) North West 143,494 144,360 (866) Northern Cape 77,059 76,824 99.7% 235 Western Cape 140,265 137,585 98.1% 2,680

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