IYM PRESENTATION UP TO 31 DECEMBER 2011 PRESENTATION 24 April 2012 STANDING COMMITTEE ON APPROPRIATIONS 2011/12 THIRD QUARTER SPENDING By Finance:(Management Accounting) By CFO

PRESENTATION OUTLINE 1. Non Financial Performance – 3rd Quarter 2011/12 2. Introduction: Financial Performance - 3rd Quarter 2011/12 3. Summary of National State of Expenditure for the year to date 31st December 2011 4. Comments on National State of Expenditure per Programme 5. Comments on National State of Expenditure per Economic Classification 6. Virements 7. Unauthorised expenditure 8. Infrastructure Spending

1. NON FINANCIAL PERFORMANCE – 3RD QUARTER 2011/12 Performance Indicator Programme Projection 2011/12 ENE/APP Q3 Target (Cumulative Actual Q3 Percentage of inmates who escape from correctional and remand detention facilities Security 0.036% 0.027% 0.019% (30) Percentage of inmates assaulted in correctional and remand detention facilities 2.5% 1.9% 2.3% (3 694) Percentage of overcrowding in correctional and remand detention facilities Corrections 36% 34.52% Percentage of offenders with approved parole dates who completed pre-release progammes 60% 15% 97% (5 799) Percentage of eligible offenders who participate in literacy programmes as per their correctional sentence plans Development 64.7% 83.7% (2 852) Percentage of eligible offenders who participate in skills development programmes as per their correctional sentence plans 18.9% 10.8% (4 053) Percentage of eligible offenders who participate in ABET programmes as stipulated in their sentence plans 60.9% 56.6 (9 773) Percentage of parolees without violations Social Reintegration 72.2% - 74.7% (34 623) Offender involvement in Corrections Programme 53% 12 233 234.3% (28 667)

2. INTRODUCTION: FINANCIAL PERFORMANCE 3RD QUARTER 2011/12 The Department is compiling monthly In Year Monitoring reports with reasons for deviations against the spending plans which are signed off by the Accounting Officer and submitted on time to National Treasury and Executive Authority as per PFMA section 40 (4) (c) Budget Committee and Financial meetings are held in the Department with different Programme and Responsibility Managers in order to ensure that all units are spending according to the spending plans The Department also administer and manage re-prioritisation of unspent funds on a quarterly basis according to section 43 of the PFMA act. All fund shifts are endorsed by the Budget Committee of the Department as well as National Treasury

3. SUMMARY OF NATIONAL STATE OF EXPENDITURE FOR THE YEAR TO DATE: 31 DECEMBER 2011

4. COMMENTS ON THE NATIONAL STATE OF EXPENDITURE FOR THE YEAR TO DATE PER PROGRAMME: 31 DECEMBER 2011 The final overall year-to-date expenditure of the Department as at 31 December 2011 was R11.4 billion (68.6%) against the revised spending plan of R12.432 billion (74.3%) resulting in R983 million (5.7%) of the allocated budget [under-spending] against the spending plan. Factors that contributed to the under-spending per programme are as follows: Programme Administration: The actual spending of R3.162 billion (68.36%) against the budget spending plan of R3.400 billion (73.50%) (under-spending) is mainly on Compensation of Employees for the advertised posts that are in the process of being filled as well as 3% pay progression estimated from July which is in the process of being paid and on goods and services because of lower than anticipated spending on consultants and stores. Programme Security: The actual spending of R3.981 billion (72.20%) against the budget spending plan of R4.136 billion (75.03%) (under-spending) is mainly on Compensation of Employees for the advertised posts that are in the process of being filled as well as 3% pay progression estimated from July which is in the process of being paid and because of lower than anticipated spending on capital assets. Programme Corrections: The actual spending of R1.177 million (75.74%) against the budget spending plan of R1.154 million (74.24%) (over spending) is mainly due to the increase in number of posts filled and transfers more than what was originally anticipated in the spending plan

4. COMMENTS ON THE NATIONAL STATE OF EXPENDITURE FOR THE YEAR TO DATE PER PROGRAMME: 31 DECEMBER 2011 (Cont…) Programme Care : The actual spending of R1.223 million (66.01%) against the budget spending plan of R1.396 billion (75.32%) (under-spending) is mainly on Compensation of Employees as a result of the advertised posts that the department is in the process of filling and 3% pay progression estimated from July which is in the process of being paid as well as Goods and Services due to the low movement of the stores items broadly as a result of the slow clearance of internal charges in line with the request and consumption of items Programme Development: The actual spending of R373 million (64.81%) against the budget spending plan of R423 million (73.50%) (under-spending) is mainly on Compensation of Employees because of the advertised posts that are in the process of being filled and 3% pay progression estimated from July which is in the process of being paid as well as Goods and Services because of the low spending on workshop and agricultural materials Programme Social Reintegration: The actual spending of R418 million (71.54%) against the budget spending plan of R432 million (73.86%) (under-spending) is mainly on Compensation of Employees because of the advertised posts that are in the process of being filled and 3% pay progression estimated from July which is in the process of being paid as well as Goods and Services due to slow clearing of payments for GG transport costs of vehicle Programme Facilities: The actual spending of R 1.115 billion (56.30%) against the budget spending plan of R1.491 billion (75.28%) (under-spending) is mainly due to the lower billing from the Department of Public Works for capital works projects than anticipated in projections

4. SUMMARY OF STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE: 31 DECEMBER 2011 (Cont…)

4. STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE: 31 DECEMBER 2011 (Cont…)

5. COMMENTS ON THE NATIONAL STATE OF 5. COMMENTS ON THE NATIONAL STATE OF EXPENDITURE FOR THE YEAR TO DATE PER ECONOMIC CLASSIFICATION: 31 DECEMBER 2011 Compensation of Employees: The actual spending of R7.707 billion (70.67%) against the budget spending plan of R8.421 billion (77.21%) (under-spending) is mainly due to the vacancies which the department is in the process of filling and because of 3% pay progression estimated from July in the process of being paid . Goods & Services: The actual spending of R3.159 billion (70.21%) against the budget spending plan of R3.082 billion (68.50%) (over-spending) is mainly because of higher than anticipated spending plan contractors, lease payment s, stores, travel & subsistence's and operating expenditure. Transfers and Subsidies: The actual spending of R42 million (59.69%) against the budget spending plan of R34 million (47.84%) (over-spending) is mainly due to more leave gratuity payments made to the employees as a result of the terminations of services than anticipated in the revised spending plan that was submitted to National Treasury in line with Adjusted Estimates of National Expenditure . Payments for Capital Assets: The actual spending of R540 million (44.68%) against the budget spending plan of R894 million (73.95%) (under-spending) is mainly due to the low billing from the Department of Public Works for capital works projects than anticipated in the projections and infrastructure technology because the projects are not yet completed.

5. SUMMARY OF STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 31 DECEMBER 2011 (Cont…)

5. STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 31 DECEMBER 2011 (Cont…)

6. VIREMENTS The first fund shifts were implemented on endorsement by the Budget Committee meeting of the 26 August 2011, approved by the Accounting Officer and submitted to the Executive Authority and National Treasury on time in line with section 43(3) of PFMA A surplus of R185 million was identified under Compensation of Employees as a result of vacancies. This surplus was utilised to fund shortfalls registered as follows: An amount of R129.535 million was shifted to Goods and Services to fund training for newly appointed Parole board members, catering for new intake for both colleges, computer consumables An amount of R953 000 was shifted to Transfers and Subsidies: Provinces and Municipalities to fund vehicle licences An amount of R38.452 million was shifted to Transfers and Subsidies: Households for payment of leave gratuity for employees exiting the system and inmates indigent gratuity An amount of R16.520 million was shifted to item Machinery and Equipment to purchase office equipment

6. VIREMENTS (Cont…) The second fund shifts were implemented on endorsement by the Budget Committee meeting of 27 October 2011, approved by the Accounting Officer and submitted to the Executive Authority and National Treasury on time in line with section 43(3) of PFMA An amount of R7.774 million identified under Goods and Services was shifted to Machinery and Equipment to fund the following: Installation of telephone equipment Installation of CCTV cameras Computers for newly appointed employees Air conditioners The department received additional allocation of R127 million for the salary increases under Compensation of Employees and R729 thousand for gratuities to inmates under Transfers and Subsidies: Households factored in during the Adjustment Estimates budget. The original budget was then adjusted from R16.559 billion to R16.686 billion.

7. UNAUTHORISED EXPENDITURE The department had unauthorised expenditure amounting to R483,821 million incurred in 2008/09 financial year. There was engagement with SCOPA on this matter on the 17 August 2011, SCOPA recommended to Parliament that the Unauthorised Expenditure be funded through savings from the Department’s budget The matter was subsequently adopted by National Assembly on the 08th November 2011

8. INFRASTRUCTURE SPENDING The actual spending of R348,527 million (38.45%) (under-spending) against the budget of R906.341 million was mainly due to low billing and slowness of implementation of capital projects There were engagements with DPW management which did not yield any desired results The Department sought intervention at Portfolio Committee level wherein both Departments appeared before the committee on 22 February 2012 The Department is in continuous engagement with DPW in order to fast-track the implementation of capital works There was also intervention to utilise Independent Development Trust (IDT) and an MoA was signed in October 2011 to complement the capacity of DPW in implementing infrastructure projects

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