1. Building a caring correctional system that truly belongs to all Original Budget 2006/2007 Financial Year Presentation to Portfolio Committee

2. CONTENTS 1.ENE baseline 2.Principles Of Calculations For The Draft Allocation 3.ENE Allocation per Economic Classification 4.Nominal growth per Economic Classification 5.ENE Allocation per Programme 6.Nominal growth per Programme 7.Personnel 8.Infrastructure 9.Cost Drivers and allocation per Region

3. ENE BASELINE ALLOCATIONS 2005/2006 - 2008/2009 R’000 Year 0 2005/2006 R’000 Year 0+1 2006/2007 R’000 Year 0+2 2007/2008 R’000 Year 0+3 2008/2009 R’000 Baseline Allocation 9 888 88710 630 71211 767 48912 451 186 % Increase16.915.110.75.8

4. PRINCIPLES OF CALCULATIONS FOR THE DRAFT 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).

5. PRINCIPLES OF CALCULATIONS FOR THE DRAFT ALLOCATION Inflation provided was 5% (Provision for price fluctuations etc). Annual salary adjustment of 5.1% plus 0.4% (real growth) plus 0.5% (gap between 2005 settlement on projected inflation outcome for 05/06) (Preliminary figure). Pensions contribution of 16%. 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 2006/07 – 2008/09)

6. PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION ARE AS FOLLOWS: Current Payments: Compensation of employees: Key cost driver are personnel totals (Financed and Actual posts for December 2005) All inclusive packages were determined and used for allocation per level per number of personnel. Overtime: Based on current Sunday establishment. –Provide for 6% annual salary adjustment + 1% pay progression. –Provide for requirement of Collective agreement concluded on 29/04/2005 ito 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 X1½ ) »Public holiday (BCEA Section 18 determines if employee works on a Public holiday overtime payment is X2 )

7. PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION ARE AS FOLLOWS: 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 etc. Indirect expenditure / new services - calculation based on new prices, tariffs, quotations etc. Accommodation, Leases and Municipal services budget was devolved from DPW to departments –Departments were instructed to create a Sub Programme for Property Management under the Programme Administration

8. PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION ARE AS FOLLOWS: 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

9. PRINCIPLE APPLIED ON A MORE DETAIL LEVEL PER ECONOMIC CLASSIFICATION ARE AS FOLLOWS: 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

10. ENE BASELINE ALLOCATIONS PER GFS 2006/2007– 2008/2009 R’000 Note: RSC: Levies will be discontinued from July 2006

11. AVERAGE ANNUAL MEDIUM TERM NOMINAL GROWTH PER GFS STRUCTURE

12. ENE BASELINE ALLOCATIONS PER PROGRAMME 2006/2007 – 2008/2009 R’000

13. AVERAGE ANNUAL MEDIUM TERM NOMINAL GROWTH PER PROGRAMME

14. BREAKDOWN: PERSONNEL BUDGET 2006/2007 – 2008/09

15. ENE BASELINE ALLOCATIONS PER SUB PROGRAMME: FACILITIES: 2006/2007 – 2008/2009 R’000

16. COST DRIVERS USED FOR CALCULATION OF REGIONAL BUDGET R’000

17. BUDGET ALLOCATION PER REGION: 2006/07 BUDGET R’000

18. Thank you Building a caring correctional system that truly belongs to all