1. DCS 2010/11 ENE BUDGET ALLOCATIONS PORTFOLIO COMMITTEE
17 MARCH 2010

2. CONTENTS 2010/11-2012/13 Estimates of National Expenditure Allocation
2010/ /13 Estimates of National Expenditure Allocation per programme and GFS
2010/ /13 Estimates of National Expenditure Allocation: Comments
2010/11 ENE Allocation per Budget Committee Decision
ENE 2010/11 Summary Per Region per programme and GFS

3. 2010/11-2012/13 ESTIMATES OF NATIONAL EXPENDITURE ALLOCATION

4. 2010/ /13 MTEF ALLOCATION
2010/11
R’000
2011/12
2012/13
Departmental Baseline
Additional funds allocated to baseline
Occupational Specific Dispensation: Correctional Officials
Compensation of Employees Adjustment
Minus: Baseline Efficiency Savings
(22 627)
(62 480)
( )
Rescheduling of Prison PPPs
( )
( )
Total
*The 2010/11 MTEF allocation letter further states that the inflation outcomes above the forecasted estimates will be funded from the budget baseline of the Department.

5. MTEF ALLOCATION 2010/11-2012/13 Economic classification 2009/10 R’000
2011/12
2012/13
Current payments
Transfer and subsidies
38 657
13 063
8 326
8 798
Payments for capital assets
Total

6. 2010/11-2012/13 ESTIMATES OF NATIONAL EXPENDITURE PER PROGRAMME AND GFS:

7. 2010/11-2012/13 ESTIMATES OF NATIONAL EXPENDITURE PER PROGRAMME : TOTAL VOTE

8. 2010/11-2012/13 ESTIMATES OF NATIONAL EXPENDITURE PER GFS CLASSIFICATION: TOTAL VOTE

9. 2010/11-2012/13 ESTIMATES OF NATIONAL EXPENDITURE EARMARKED FUNDS
Earmarked amounts
2010/11
R’000
2011/12
2012/13
Devolution of funds from Public Works
Specifically and exclusively appropriated: New PPP Correctional Centres
Specifically and exclusively appropriated: Capital Works

10. 2010/11-2012/13 ESTIMATES OF NATIONAL EXPENDITURE : COMMENTS

11. 2010/11-2012/13 ENE ALLOCATION: TOTAL VOTE: COMMENTS
Expenditure grew at an average annual rate of 14.4 per cent, from R9.3 billion in 2006/07 to R13.8 billion in 2009/10, and is projected to reach R18.3 billion in 2012/13 at an average annual rate of 9.7 per cent.
This is as a result of additional allocations over the MTEF period for OSDs (R300 million per year) and adjustments to compensation of employees (R583.1 million,R619.4 million and R million).

12. 2010/11-2012/13 ENE ALLOCATION: PROGRAMME ADMINISTRATION: COMMENTS
Expenditure in the programme increased from R2.6 billion in 2006/07 to R3.5 billion in 2009/10 at an average annual rate of 10.7 per cent, and is expected to grow to R4.5 billion in 2012/13 at an average annual rate of 8.7 per cent.
The growth over the medium term is mainly due to the implementation of the occupation specific dispensation, inflation related salary adjustments and allocations for a master information system plan.

13. 2010/11-2012/13 ENE ALLOCATION: PROGRAMME SECURITY: COMMENTS
Expenditure increased from R2.9 billion in 2006/07 to R5 billion in 2009/10 at an average annual rate of 19.2 per cent, and is expected to increase to R5.7 billion at an average annual rate of 4.6 per cent.
The growth in expenditure provided for improving security in correctional centres, and for the ongoing implementation of the occupation specific dispensation for correctional officials and the 7-day establishment.
The programme’s activities are labour intensive and expenditure in compensation of employees accounts for 98 per cent of the programme’s budget over the medium term.

14. 2010/11-2012/13 ENE ALLOCATION: PROGRAMME CORRECTIONS: COMMENTS
Expenditure in this programme increased from R722 million in 2006/07 to R1.2 billion in 2009/10, at an average annual rate of 19.8 per cent.
Expenditure is expected to increase to R1.8 billion in 2012/13, at an average annual rate of 12.4 per cent over the medium term. This is due to a substantial increase in compensation of employees spending between 2009/10 and 2012/13 to provide for the ongoing implementation of the occupation specific dispensation for correctional officials and the inflation related salary adjustment carry through costs.

15. 2010/11-2012/13 ENE ALLOCATION: PROGRAMME CARE: COMMENTS
The growth in expenditure from R1.1 billion in 2006/07 to R1.6 billion in 2009/10, at an average annual rate of 13.2 per cent, provided for the implementation of the 3-meal system.
The projected growth to R1.7 billion, at an average annual rate of 2.2 per cent, provides for the additional remuneration of healthcare workers in line with the occupation specific dispensation and carry through costs for the inflation salary adjustment.
The expected increase in expenditure over the medium term is due to payments for pharmaceutical and nutritional services and the implementation of the occupational specific dispensation.

16. 2010/11-2012/13 ENE ALLOCATION: PROGRAMME DEVELOPMENT: COMMENTS
Expenditure increased from R347.1 million in 2006/07 to R438 million in 2009/10, at an average annual rate of 8.1 per cent.
Expenditure is projected to increase to R584.5 million over the medium term, at an average annual rate of 10.1 per cent. This is mainly due to the inflation salary adjustment carry through costs and the implementation of occupation specific dispensations.

17. 2010/11-2012/13 ENE ALLOCATION: PROGRAMME SOCIAL REINTEGRATION: COMMENTS
Expenditure increased at an average annual rate of 14.1 per cent from R319.2 million in 2006/07 to R474.7 million in 2009/10, due to an increase in activities at community corrections offices following the implementation of the special remissions initiatives.
Expenditure is projected to increase to R636.8 million in 2012/13, at an average annual rate of 10.3 per cent. This is mainly due to the implementation of the occupation specific dispensation for correctional officials and carry through costs for the general annual inflation related salary adjustment.

18. 2010/11-2012/13 ENE ALLOCATION: PROGRAMME FACILITIES: COMMENTS
Expenditure increased from 1,3 billion in 2006/07 to R1.7 billion in 2009/10 at annual average rate of 9.1 per cent mainly due to the construction of the new Kimberley correctional facility.
Expenditure is expected to grow at an average annual rate of 27.7 per cent to R3.5 billion in 2012/13. This is mainly due to the allocation of additional funds for the construction of 4 new PPP correctional facilities at Paarl, East London, Klerksdorp and Nigel.
The bulk of this programme’s expenditure is on capital assets, which includes the construction, upgrading and renovation of existing correctional facilities over the medium term. This will create an additional bed spaces (excluding Kimberley and the 4 public private partnerships).

19. 2010/11 ENE ALLOCATION AS PER BUDGET
COMMITTEE DECISION

20. 2010/11 ENE ALLOCATION AS PER BUDGET COMMITTEE DECISION
Implementation of Occupational Specific Dispensations as required by the Public Service Coordinating Bargaining Council resulted in the budget shortfall.
The shortfall was presented in various means to National Treasury for them to allocate sufficient funds to fund the budget shortfall.
The additional amounts of R883,103 million; R919,4 million and R952,8 million were respectively allocated over the MTEF period to fund the inflation salary adjustment carry through costs and carry through costs for the implementation of OSD for correctional officials.
These amounts are not enough to fund the total costs for the implementation of all OSDs.
The budget reductions of an amounts of R22,7 million; R62,5 million; and R140,8 million were also imposed respectively over the MTEF period which makes the situation worse.
It should be noted that the Department requested an amounts of R1,8 billion, R1,9 billion and R2,0 billion respectively over the MTEF period to fund the overall implementation of OSDs.

21. 2010/11 ENE ALLOCATION AS PER BUDGET COMMITTEE DECISION
Given the financial constraints experienced within the Department, an exercise was embarked upon to first fund the following priorities within the Department in line with the decision of the Budget Committee as follows:
-Compensation of Employees including phase 2 of OSD implementation (R10,869 billion).
-Property management earmarked funds for DPW (R1,144 billion)
-Earmarked funds for capital works projects (R913,529 million)
-Inmates costs (R900,683 million)
-Livestock costs (R77,272 million)
-Contractual obligations (R786,473 million)
-Bare minimum administrative costs (R107,276 million)
The total amount of priorities is R15,526 billion which exceeds the allocated budget of R15,129 billion resulting into the shortfall of R396,697 million.

22. 2010/11 ENE ALLOCATION AS PER BUDGET COMMITTEE DECISION
The total inmates, livestock and contractual obligations costs submissions per Region are as follows in line with the response to the letter sent to the Regions to request ENE inputs as per Budget Committee decision:
-Head Office FCO: R529,373 million.
-Gauteng Region: R403,959 million.
-KwaZulu-Natal Region: R174,106 million.
-Eastern Cape Region: R188,166 million.
-Western Cape Region: R178,547 million.
-LMN Region: R112,782 million.
-Free State/Northern Cape Region: R177,495 million.
The total amount of the inmates, livestock and contractual obligations received from Regions and Head Office, FCO is R1,764 billion.

23. 2010/11 ENE ALLOCATION AS PER BUDGET COMMITTEE DECISION
National Treasury did not support the request for utilisation of earmarked funds to fund the shortfalls of an amount of R396,697 million.
-The SITA service level consultants fees was reduced by R12 million to partly fund the budget shortfalls.
-The total budget shortfall of R384,697 million still remains under the Compensation of Employee budget.
Rescheduling of new PPPs:
- 2011/12 (2,928,200,000)
2012/13 (1,610,510,000)
The revised allocation letter was received on the 27/01/2010 which takes into account the above.

24. 2010/11 ENE ALLOCATION AS PER BUDGET COMMITTEE DECISION

25. 2010/11 ENE ALLOCATION AS PER BUDGET COMMITTEE DECISION

26. ENE 2010/11 SUMMARY PER REGION PER PROGRAMME AND GFS

27. ENE 2010/11 SUMMARY PER REGION PER PROGRAMME27

28. ENE 2010/11 SUMMARY PER REGION PER ECONOMIC CLASSIFICATION28

29. Together doing more & better to break the cycle of crime