1. Building a caring correctional system that truly belongs to all SELECT COMMITTEE BRIEFING 2007 Estimates of National Expenditure

2. ESTIMATES OF NATIONAL EXPENDITURE CONTENT 1.PRINCIPLES OF CALCULATIONS FOR THE ALLOCATION 2.PRINCIPLES APPLIED ON A MORE DETAILED LEVEL PER ECONOMIC CLASSIFICATION 3.COST DRIVER 4.BASELINE BEFORE REDUCTION 5.REDUCTION MIN COM BUD 6.REINSTATEMENTS 7.ADDITIONAL FUNDING 8.ENE ALLOCATION PER PROGRAMME 9.ENE ALLOCATION PER GFS

3. 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).

4. 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)

5. PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION: Financed39,013PERSNAF report 7-Days2,627October Appointments 7-Days2,627Last appointment of 7-days in 2007 Head Office±118Captured as Rand value and not as posts on the ENE Big 5 Centers±464Captured as Rand value and not as posts on the ENE White Paper±300Captured as Rand value and not as posts on the ENE Supervisory±525Junior Management Posts TOTAL±45,674Projected total for 2007/2008( including 5% vacancy rate) Current Payments: Compensation of Employees: Baseline for establishment:

6. 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 2 nd White Paper posts = R57million Current Payments: Compensation of Employees: Budgeted Posts

7. 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

8. 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 1 ½ (BCEA Section 16 determines if employee normally works on a Sunday, overtime payment is x 1 ½) 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. COST DRIVER: OFFENDER POPULATION Detained Inmate Population 2007/082008/092009/10 DCS 152,548153,484155,148 PPP’S 5,952 Total Inmate population 158,500159,800161,100 Probationer/ Parolee Population 2007/082008/092009/10 DCS 60,90061,60062,400 PPP’S 000 Total Probationer parolee population 60,90061,60062,400 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.

15. 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.

16. 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 71211 767 48912 451 18613 385 025

17. REDUCTION MIN COM BUD 2007/08 R’000 2008/09 R’000 2009/10 R’000 Capital1,085, 2461,150,4341,219,208 Compensation of employees750,000 Offender Related142,800150,654158,940 Total1,978,0462,051,0882,128,148

18. REINSTATEMENT RECOMMENDED 2007/08 R’000 2008/09 R’000 2009/10 R’000 Compensation of employees *227,962221,99895,770 Capital565,926559,702610,118 Total793,888781,700705,888 * DCS TO MAINTAIN 5% VACANCY RATE DECREASING TO 3% IN OUTER YEAR IN LINE WITH REDUCED BUDGET

19. ALLOCATION LETTER: ADDITIONAL FUNDING 2007/08 R’000 2008/09 R’000 2009/10 R’000 Administration - MISP35,00050,000100,000 Security – Access Control & X Ray Scanners 100,000 Care – Remuneration for Health professionals 17,00019,00047,000 All Programmes – salary adjustments 7,00015,00058,000 Total159,000184,000305,000

20. 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 9,831,51210,742,33111,365,79812,267,765 % Increase2.089.265.807.94

21. ENE ALLOCATION: PER PROGRAMME ProgrammeAdjusted 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 Administration2,573,9462,771,3232,983,0013,313,878 Security3,062,9283,244,7973,371,0283,454,145 Corrections766,9141,236,7911,333,824 1,430,447 Care1,180,7551,339,2901,426,6771,515,538 Development394,343403,917463,479490,780 Social reintegration 323,894336,118334,446359,422 Facilities1,528,7321,410,0951,453,3431,703,555 Total9,831,51210,742,33111,365,79812,267,765

22. 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 5,792,1386,517,9506,870,4517,227,052 Goods and services 2,837,8523,160,7173,419,4073,726,794 Interest and rent on land 48505357 Transfers and subsidies 33,27730,85932,46834,839 Payments for Capital Assets 1,168,1971,032,7551,043,4191,2789,823 Total9,831,51210,742,33111,365,79812,267,765

23. 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