1. 1 CFO Report 7 March 2006 DOJ&CD Portfolio Committee Budget Hearings

2. 2 2 AGENDA 1.2005/06 FINANCIAL AND AUDIT REPORT OVERVIEW 2.2006/07 PRELIMINARY / UNAUDITED FINANCIAL OVERVIEW 3.MTEF BUDGET ALLOCATIONS

3. 3 3 2005/06 FINANCIAL OVERVIEW Final ApprActual expVariance R’000R’000R’000 DOJ & CD R 5 185 733R4 883 241 R302 492 Statutory*R 849 977R1 040 097(R190 120) Total R 6 035 710R5 923 338 R112 372 * Judges’ and Magistrates’ Remuneration and Allowances

4. 4 4 2005/06 BUDGET RE-PRIORITISATION Branch / Programme Details of bid / re-allocation approved by the Accounting OfficerRm Court Services X ray machines / metal detectors35 Transcription Services136.8 Burglar proofing18 MastersOffice furniture and vehicles6 Overspending on compensation15 of employees (job upgradings implemented without funds) State Attorney Offices Kimberley (new office)7 Furniture and office equipment 10

5. 5 5 2005/06 BUDGET RE-PRIORITISATION Branch / Programme Details of bid / re-allocation approved by the Accounting OfficerRm ISMDNS roll-out phase III40 Family Advocates Office equipment, computers and vehicles 3.5 Public ProtectorHigh Profile Cases & JYP3.5 implementation SIU Vehicles, access control, laptops, 5.05 software licences etc

6. 6 6 2005/06 BUDGET RE-PRIORITISATION Branch / Programme Details of bid / re-allocation approved by the Accounting Officer Rm LABJudicare, vehicles, computers,13.22 software licences etc NPAState Attorney fees, GG accounts,77 specialised and other vehicles, computers etc HRInternship Programme10 Total amount approved for re-allocations 380.07 [7,3 % of budget allocation]

7. 7 7 UPP’S VS BUDGET ALLOCATION

8. 8 8 Budget allocations (Blue) include marginally funded projects UPP’s (Red) – Unfunded Priority Projects –Registered MTEF process –Updated regularly –Changes as costing information becomes firm (Process of estimation & investigation before costing becomes final) –Dynamic process Underspending due to various reasons Process of Reprioritisation – moving projects and budgets out of blue and move projects and expenditure from red to blue Strict adherence to virement limitations as required by PFMA and NTR

9. 9 9 2005/06 BUDGET RE-PRIORITISATION COURT SECURITY –259 Court buildings with burglar proofing –50 X-ray machines and 200 Walkthrough Metal Detectors installed at courthouses nationwide COURT RECORDING AND TRANSCRIPTION SERVICES –Supply and installation of digital audio recording equipment in all our courts –This will modernise our current court recording system which is analogue DNS III / IT NETWORK ROLL-OUT –282 Additional sites connected to the IT Network, bringing the total to 505 sites out of 555 sites –All sites connected have access to Govt transversal systems, access to email, enable roll-out of E-Scheduler, JDAS, which will improve service delivery

10. 10 2005/06 AUDIT MATTERS Vote Account –Qualified audit opinion on Monies in Trust Revenue Receivable for Departmental Revenue –NAQ previous two financial years (2003/04 and 2004/05) Monies in Trust –Audit in progress (Audit opinion to be disclaimed) Guardians Fund –2002/03 to 2005/06: Disclaimer of audit opinions and late publication and tabling President Fund – Unqualified audit opinion NPA – Unqualified audit opinion (Emphasis of Matter items) CARA – Unqualified audit opinions from period 1999 to 200506

11. 11 2005/06 AUDIT MATTERS 2005/06 Audit Qualification Audit Qualification on Monies in Trust Departmental Revenue Receivable Emphasis of Matter issues: Financial Management (Budget Reprioritisation Process) Asset and Inventory Management (Inventory Management and Policy for Software and Intangibles) Compensation of Employees (Policies not approved, Long suspended employees, Human Resources Management) Contingent Liabilities (Monies in Trust) Performance Information Forensic Audit AUDIT ACTION PLAN MONITORED BY AUDIT COMMITTEE ON QUARTERLY BASIS

12. 12 AUDIT MATTERS 2005/06 Audit Qualification – Action Plans Monies in Trust Revenue Receivable –Legal opinion Chief State Law Advisor –Reconciliations –Letter to OAG – clarification of receipts vs revenue –MMT PPP –JDAS roll-out

13. 13 AUDIT MATTERS 2006/07 Audit on Vote and Monies in Trust? Monies in Trust audit – “…Lack of effective and efficient financial management system…” and “…not being able to prepare reliable, accurate and complete accounting records for Monies in trust…”

14. 14 2006/07 - BUDGET AND EXPENDITURE OVERVIEW & REPRIORITISATION NOTE: UNAUDITED / PRELIMINARY INFORMATION

15. 15 2006/07 Budget & Expenditure Overview Programme Adjusted Estimates Projected ExpenditureVariance Percentage Expenditure R Thousand Administration775,679657,583118,09697% Court Services2,748,6132,256,805491,80879% State Legal Services385,754337,93347,82188% National Prosecuting Authority1,582,0621,583,903(1,841)100% Auxilliary and Associate Services986,539986,5381100% Sub Total6,478,6475,822,762655,88590% Judges & Magistrates1,071,0561,098,502(27,446) 103% Total7,549,7036,921,264628,43992%

16. 16 2006/07 Budget & Expenditure Overview Programme Adjusted Estimates Projected ExpenditureVariance Percentage Expenditure R Thousand Compensation of employees2,830,4442,595,311235,13392% Goods and Services2,225,3811,872,012353,36984% Financial trans in assts and Liab02,886(2,886)100% Departmental agencies and accounts795,110 0100% Provinces and Municipalities4,4562,2922,16451% Foreign govts and intern.organs3,6444,729(1,085)130% Household (leave Gratuities)2,67811,921(9,243)445% Machinery and Equipment299,338209,52989,80970% Buildings and other fixed structures305,836 0100% Software and other intangible assets11,76023,138(11,378)197% Sub-total Judge’s and Magistrate’s Salaries 6,478,647 1,071,056 5,822,764 1,098,502 655,883 (27,446) 90% 103% Total7,549,7036,921,266628,43792%

17. 17 Budget & Expenditure Trends

18. 18 2006/07 Budget & Expenditure Overview REASONS FOR UNDERSPENDING Savings on personnel because of vacancies and staff turnover; Savings in operational cost because of delays in appointments; The Monies in Trust project – extension approved for submission of bids to 5 February 2007, evaluation and adjudication processes to commence during March 2007; Outstanding DPW claims for Property Management (Municipal rates and taxes); Delays in the roll-out of the Digital Court Recording Solution; and Time involved in supply chain management processes.

19. 19 2006/07 – Financial Performance R 628,4 million – Year to date projected underspending (28 February 2007) Total amount approved by DG for re- allocation – R 166,5 million (next slides) Branches indicated that we can spend and / or commit funds totaling R 136,6 million [spend = R56,4 m and roll-over/committed = R80,2 m] R 491,8 million towards identified UPP’s (funds to be committed for roll-overs)

20. 20 Approved re-allocations: BranchDetailsAmount (R,million) Court ServicesMobile Courts, Vehicles, Upgrade of buildings and office accommodation, Equipment and FurnitureR48,727 used R45,626 Justice CollegeAdditional CoursesR5,681 used R5,200 MastersAccommodation and OfficeEquipmentR11,744 used R1,612 2006/07 – Financial Performance

21. 21 Approved re-allocations: BranchDetailsAmount (R,million) HumanAdditional Training – performance Resourcesmanagement, employee wellness, job evaluationR13,200 used R3,276 Office ofEquipment in own office the DGand regions, WorkshopsR78,050 used R74,200 Chief Litigation EquipmentR1,510 used R1,510 Officer Chief Financial OfficerGuardians’ Fund Accounting Turnaround ProjectR7,600 used R5,200 Total amount approved / used R166,5 used R136,6 2006/07 – Financial Performance

22. 22 Identified UPP’s – funds to be committed for roll-overs: 1.Facilities Management / DPWR 256 m 2.Library books/legal reports R 38,5 m 3.Mobile Courts (30 units)R 3 m 4.Legal Aid Board (Case Backlogs)R 1,8 m TOTALR 299,3 m [R192,5 m unspent = 3 % of budget] 2006/07 – Financial Performance

23. 23 MTEF ALLOCATIONS

24. 24 MTEF Allocations 2006/07 – 2009/10

25. 25 Observations on 2006 ENE Allocations Growth in budget allocations The 2007 Budget sets out additional allocations of R473,5 million in 2007/08, R634,8 million in 2008/09 and R836,3 million in 2009/10 for spending on expanded capital works, human resource capacity and reducing criminal case backlogs. This translates to an average annual growth rate of 11, 2 per cent between 2006/07 and 2009/10 financial years, which is a growth from R7, 5 billion to R10, 5 billion – the figures include the statutory appropriation. Priorities Funded The largest part of the additional allocation contributes towards taking over the personnel of the Witness Protection Unit from the Department of Safety and Security; increasing the number of personnel particularly in Court Services and the National Prosecuting Authority; setting up temporary service points to deal with criminal case backlogs; addressing the shortfall in the statutory appropriation; and providing for additional and temporary judges and magistrates. Infrastructure spending The annual average growth rate of 28,5 per cent in the allocation of Facilities Management subprogramme in programme 2 – rising from R268,1 million in 2006/07 to R569,3 million in 2009/10 - will fund the construction of new court facilities and the rehabilitation of existing court infrastructure.

26. 26 Observations on 2006 ENE Allocations Major areas of growth Over the MTEF, expenditure on the Lower Courts sub-programme, which accounts for 66 per cent of this programme’s budget, increase from R1,9 billion in 2006/07 to R2,5 billion in 2009/10, an average annual rate of 8,2 per cent. The increase will go towards the reduction of criminal case backlog, integrating the management of cases and people through the justice chain, human resources development and filling of vacancies Expenditure of the NPA is expected to increase rapidly over the MTEF at an average annual rate of 14.9 per cent, rising from R1,6 billion in 2006/07 to R2,4 billion in 2009/10. The main contributor to the growth is the Public Prosecutions subprogramme for which expenditure rises from R1,1 billion in 2006/07 to R1,7 billion in 2009/10, an average annual rate of 15,2 per cent. This sub-programme accounts for 71 per cent of the programme’s budget Additional amounts allocated in the 2007 MTEF budget include R57,5 million, R91,3 million and R153,5 million to increase human resources capacity in the Legal Aid Board, the Special Investigating Unit, the Commission on Gender Equality and the South African Human Rights Commission. The allocation also includes funding for the development of an electronic case management system and the integration of existing IT systems to address the operational and administrative requirements of the Office of the Public Protector.

27. 27 Observations on 2006 ENE Allocations Major areas of growth (cont) The 2007 Budget sets out additional allocations of R88 million in 2007/08, R92 million in 2008/09 and R97 million in 2009/10 for spending on the Modernisation of the Integrated Justice Sector Programme. The Programme aims to automate and modernize systems and to improve inter-connectivity between Departments in the Criminal Justice System.

28. 28 MTEF ALLOCATIONS PER BRANCH (Preliminary)

29. 29 Court Services

30. 30 Regional Budget Allocation (Branch: Court Services)

31. 31 State Legal Services Expenditure is expected to continue to increase steadily, rising from R385,8 million in 2006/07 to R530,7 million in 2009/10, at an average annual rate of 11,2 per cent over the MTEF. The increase in spending on this programme goes towards - improving access to Guardian Fund Services, facilitating accessibility of deceased and insolvent estates services increasing capacity through employment of additional personnel and developing the skills of existing personnel

32. 32 National Prosecuting Authority

33. 33 National Prosecuting Authority Within the additional amounts allocated in the 2007 Budget, R120 million, R170 million and R199 million have been provided for each of the MTEF years to the – –acquisition of a new building in KwaZulu-Natal; –the refurbishment of the Inner Chambers building in Johannesburg; –taking over 85 SAPS officials currently performing the witness protection functions; and –the appointment of 650 prosecutors to fully implement the initiative of assigning two prosecutors per court and to reduce criminal case backlogs

34. 34 Transfer payments - Public Entities and Constitutional Institutions

35. 35 Transfer payments - Public Entities and Constitutional Institutions Within the additional amounts allocated in the 2007 Budget, R27,5 million, R41,25million, and R93,5 million have been provided for each of the 2006 MTEF years to - –increase human resources capacity in the Legal Aid Board; (R120 million) –increase capacity in the office of the Public Protector, the Commission on Gender Equality and the South African Human Rights Commission. In the 2007 budget The Special Investigating Unit receives an additional R130 million for increasing capacity.

36. 36 THANK YOU