1. 1 BUDGET PRESENTATION TO THE PORTFOLIO COMMITTEE ON HOME AFFAIRS 15 MARCH 2011 PRESENTER: RUDZANI RASIKHINYA (CHIEF FINANCIAL OFFICER)

2. 2 TABLE OF CONTENTS OUTLINE OF THE DHA PROGRAMMES APPROPRIATION PER PROGRAMME, EXPENDITURE FOR 2009/10 & ANALYSIS APPROPRIATION PER PROGRAMME, EXPENDITURE FOR 2010/11 & ANALYSIS PROCESSES IMPLEMENTED TO PREVENT FURTHER DEBTS COMPARISON OF BUDGET ALLOCATION FOR 2009/10 TO 2011/12 FINANCIAL YEARS OVERVIEW OF 2011/12 BUDGET IN DETAIL DETAILED GOODS AND SERVICES BUDGET SPLIT FOR 2011/12 MTEF BUDGET PROCESS FOR 2011/12 TO 2013/14 VS APPROPRIATION ALLOCATIONS DHA BUDGET ALLOCATION OVER MTEF PERIOD MTEF ALLOCATION PER PROGRAMME MTEF ALLOCATION PER ECONOMIC CLASSIFICATION REVENUE COLLECTION FOR 2008/09 TO 2010/11 ESTIMATED REVENUE COLLECTION WAY FORWARD

3. 3 OUTLINE OF DHA PROGRAMMES leadership, management and support services. Information Services, Finance, Supply Chain Management, Internal Audit, Legal Services, etc. Programme 1 – Administration secure, efficient and accessible services for RSA residents. documents for citizens and lawful residents. Transfers to entities Programme 2 – Citizen Affairs Secure movement of people into and out of RSA through Ports of Entry. Regulate refugee affairs including asylum seekers. Programme 3 – Immigration Affairs

4. 4 APPROPRIATION PER PROGRAMME AND ACTUAL EXPENDITURE FOR 2009/10 PROGRAMME FINAL APPROPRIATION 2009/10 ACTUAL EXPENDITURE 2009/10 EXPENDITURE AS % FINAL APPROPRIATION R’000 Administration1,093,9271,282,474117,2% Services to Citizens1,359,6571,372,353100,9% Immigration Services1,498,3481,228,73082,0% Transfers to Agencies 1,311,852 100% Total5,263,7845,195,40998.7%

5. 5 ANALYSIS OF 2009/10 PERFORMANCE In the 2009/10 financial year, DHA had an under expenditure of R68,375 million. R56,704 million of the under expenditure was rolled over to the 2010/11 financial for the Movement Control System as approved by National Treasury. Government records transactions i.t.o. cash basis of accounting, which means that only amounts paid are recorded as expenditure for that financial year. Unspent funds at the end of each financial year are surrendered to the National Revenue Fund. In accrual accounting, transactions are recorded when they occur. In this regard, the department reported accruals amounting to R533,969 million as at 31 March 2010. This amount was not budgeted for in the 2010/11 financial year. Furthermore, DHA is operating abroad at foreign missions, which are headed by Department of International Relations and Cooperation (DIRCO). As a result of this, DHA entered into an agreement with DIRCO. DIRCO collects revenue on behalf of DHA and also pay expenses, i.e. allowances, accommodation, operational expenditure, etc. on recoverable basis.

6. 6 ANALYSIS OF 2009/10 PERFORMANCE –CONTINUED At the 31 March 2010, DHA owed DIRCO approximately R709 million of which R459 million relate to the Vote and the rest is Repatriation deposit. This represented the debts for the past 5 years. In return, DIRCO owes approximately R895 million. Both these amounts are included in Disclosure Note 18 (and Annexure 4) and 19 (Annexure 5) respectively in the AFS for 2009/10 financial year. These amounts were not included in the expenditure and revenue for the past 5 years. In the past, the department received a qualified audit opinion from the AGSA over these issues. In its quest to resolve these matters, the Department approached the National Treasury in this financial year. During December 2010, National Treasury agreed that the Department should pay all the debts before 31 March 2011. The AGSA concurred, with an emphasis that the clearing of the debts must be supported by all relevant supporting documents.

7. 7 APPROPRIATION PER PROGRAMME AND PROJECTED EXPENDITURE FOR 2010/11 PROGRAMME FINAL APPROPRIATION 2010/11 PROJECTED EXPENDITURE UP TO 31 MARCH 2011 UNDER/ (OVER) SPENDING PROJECTED EXPENDITURE AS % OF FINAL APPROPRIATION R’000 % Administration1,478,8731,720,913(242,040)116.37% Services to Citizens 1,469,4451,665,542(196,097)113.34% Immigration Services 1,294,7171,588,962(294,245)122.73% Transfers to Agencies 1,591,355 _100.00% Total5,834,3906,566,772(732,382)112.55%

8. 8 ANALYSIS OF THE OVERSPENDING The overspending will be due to settlements of debts including payment to DIRCO. After the approval from National Treasury and consultation with the AGSA, all the debts have been settled except for DIRCO account. An amount of approximately R65 million to DIRCO is still outstanding due to lack of supporting documentation. This account will only be settled once all the supporting documents are retrieved from DIRCO. A dedicated team that consist of DHA and DIRCO are working to resolve this issue by 31 March 2011. These amounts will not affect the 2011/12 financial year unless resolved and paid by 31 March 2011. In addition, we will pay R286 million to settle the leases with HP and IBM as part of the WAIO settlement with Gijima. In terms of the PFMA, the department will inform in writing the relevant oversight committees, i.e. this committee, SCOPA, and Standing Committee on Appropriation.

9. 9 PROCESSES IMPLEMENTED TO PREVENT FURTHER DEBTS Signed Memorandum of Understanding with DIRCO covering revenue collection, assets, expenditure. Revenue –Bank accounts opened for each mission with approval from National Treasury. –DHA monies recorded separately from expenditure and other departments’ revenue. Expenditure –Advance payments especially for allowances and accommodation. –Do not wait for claims from DIRCO, however reconciliations are done. –Only last quarter outstanding

10. 10 COMPARISON OF BUDGET ALLOCATIONS 2009/10- 2011/12 PROGRAMME BUDGET 2009/10 BUDGET 2010/11 BUDGET 2011/12 R’000 Administration1,515,1451,466,1931,782,879 Citizen Affairs 1 3,189,4133,665,9573,093,652 Immigration Affairs559,226702,240587,603 Total5,263,7845,834,3905,464,134 % Increase/(Decrease)10.84%(6.35%) Transfers to Agencies 1 1,311,8521,591,355993,650

11. 11 Presentation per standard charts of accounts (SCOA) STANDARD CHARTS OF ACCOUNT Compensation of Employees Goods and services Transfers and subsidies (1) Payment for capital assets Sub Total DHA allocation Transfer and subsidies (2) Total allocation OVERVIEW OF THE 2011/12 BUDGET IN DETAIL AMOUNT R,000 2,206,560 2,230,826 6,422 26,676 4,470,484 993,650 5,464,134 % BUDGET 40,38% 40,83% 0,12% 0,49% 81,82% 18,18% 100%

12. 12 DETAILED GOODS AND SERVICES BUDGET SPLIT 2011/12 FINANCIAL YEAR Breakdown of goods and services Amount % of Total Goods and Services Budget Who Am I Online ( WAIO)548,00024.56% IT Projects -104,7704.70% Special Projects (APP)50,0002.24% Office Accommodation (Leases & Municipal charges) 304,16913.63% Operational Costs1,223,88754.86% Total Goods and Services Budget2,230,826100%

13. 13 POLICY PROPOSALS DEPARTMENT'S REQUEST APPROVED ADDITIONAL FUNDS 2011/122012/132013/142011/122012/132013/14 R'000 1 Passport Projects 240,880268,191297,090 – – – 2 Mobile Offices 17,00027,00022,000 –21,471 – 3 Advance Passenger Processing 79,600–– – – – 4 Asylum Seeker & Refugee Man 34,00037,00042,000 – 37,00042,000 5 Scare & Critical Skills by issuing relevant permits 16,00017,50020,800 –17,50020,800 6 Coaching Clinics 6,0006,7207,526 – – – 7 Development of a Talent Management Strategy and System 2,0001,000500 – – – 8 Setting up of Learning Academy 10,57911,108 11,691 – – – MTEF BUDGET PROPOSALS FOR 2011/12 - 2013/14 VERSUS APPROVED ALLOCATION

14. 14 POLICY PROPOSALS DEPARTMENT'S REQUEST APPROVED ADDITIONAL FUNDS 2011/122012/132013/142011/122012/132013/14 R'000 9 Front Office (CS & IMS) Training 11,00012,32013,798 – – – 10 Increase capacity of Counter Corruption 30,16832,93836,040 – – – 11 Physical Security at Offices 60,00070,00080,000 – – – 12 Smart Card 50,000100,000200,000 –– – 13 Infrastructure 53,000100,000150,000 –264,856296,772 14 Municipal & Accommodation Charges – – –21,56626,04729,930 15 Improve conditions of service : Department – – –71,80073,80076,400 MTEF BUDGET PROPOSALS FOR 2011/12 - 2013/14 VERSUS APPROVED ALLOCATION CONTINUES

15. 15 POLICY PROPOSALS DEPARTMENT'S REQUEST APPROVED ADDITIONAL FUNDS 2011/122012/132013/142011/122012/132013/14 R'000 16 Film and Publication Board 21,000 20,30015,6003,5154,1524,284 17 Government Printing Works 167,600 102,900117,700 ––– 18 Electoral Commission –––80,000–130,000 TOTAL 798,827806,9771,014,745 176,881444,826 600,186 MTEF BUDGET PROPOSALS FOR 2011/12 - 2013/14 VERSUS APPROVED ALLOCATION CONTINUES

16. 16 DHA BUDGET ALLOCATION OVER THE MTEF PERIOD DESCRIPTION ALLOCATION 2011/12 ALLOCATION 2012/13 ALLOCATION 2013/14 R’000 Baseline Amount5,003,5205,144,8465,427,813 Additional Funds176,881444,826600,186 Adjustment283,733(340,006)(163,742) Total5,464,1345,249,6665,864,257 % increase/(decrease)(6.3%)(3.9%)11.7%

17. 17 MTEF ALLOCATION PER PROGRAMME PROGRAMME2010/112011/12 % INCREASE/ (DECREASE) Administration1,478,8731,782,87911.1% Services to Citizens1,469,4452,100,00242.9% Immigration Services1,294,717587,603(54.6%) Transfers to Agencies1,591,355993,650(37.5%) Total5,834,3905,464,134(6.3%)

18. 18 MTEF ALLOCATION PER ECONOMIC CLASSIFICATION ECONOMIC CLASSIFICATION2010/112011/12 % INCREASE/ (DECREASE) Compensation of Employees1,945,9032,206,56013.4% Goods and Services2,152,9292,230,8263.6% Transfers and Subsidies1,596,2391,000,072(37.4%) Payment for Capital Assets139,31926,676(80.9%) Total5,834,3905,464,134(6.3%)

19. 19 REVENUE COLLECTION 2008/09 TO 2010/11 PROGRAMME2008/092009/102010/11 Sales of goods and services produced by department 304,891415,126440,031 Sales of scrap, waste, arms and other used current goods 1300 Fines, penalties and forfeits 17,09414,16415,014 Interest, dividends and rent on land 608199211 Transactions in financial assets and liabilities 33,06700 Total355,673429,489455,256

20. 20 ESTIMATED REVENUE COLLECTION PROGRAMME2011/122012/132013/2014 Sales of goods and services produced by department 466,436489,758538,733 Fines, penalties and forfeits15,91516,71118,382 Interest, dividends and rent on land224235259 Total482,575506,704557,374

21. 21 WAY FORWARD Establishment of a Trading Account by 1 July 2011 –From 1 April 2011, National Treasury approved the retention of revenue collected for passports by DHA. –Introduce the rest of the revenue generating services from 2012/12 financial year. Strengthening of financial management in the department –Appointment of Directors: Financial Administration and State Accountants in the provincial offices. –Decentralisation of procurement and payment functions with clear delegation of powers. –Bid Adjudication Committee, Loss Control Committee, ISTEC functioning. Clearing of the audit issues to achieve an unqualified audit report –Asset register being complied. –Supporting documents for revenue collected. –Establishment of the Records Management directorate

22. 22 THANK YOU