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DOJ&CD 2014 Estimate of National Expenditure

This document provides key assumptions and alignment to MTBPS, estimates of national expenditure and spending trends, and medium-term spending pressures.

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DOJ&CD 2014 Estimate of National Expenditure

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  1. DOJ&CD2014 Estimate of National Expenditure

  2. Index • Key assumptions and alignment to MTBPS • Estimates of National Expenditure and Spending Trends • Medium Term Spending pressures

  3. DOJ&CD2014 Key Assumptions and Alignment

  4. Economic mission statement • Macroeconomic stability, supported by prudent fiscal management and sound monetary policy • Revenue Stabilises at around 29% of GDP (Revenue generated DOJ&CD 2013/14 R403.8m) • Non interest expenditure declines from 30.2% of GDP in 2013/14 to 28.8% of GDP in 2016/17 • Economic growth improves and spending limits/ceilings stay in place leading to budget deficit declining from 4% to 2.8% by 2016/17

  5. Implications Cost Containment Measures to achieve fiscal sustainability Improved Costing and Reprioritization of Compensation Spend Reprioritization of spending on goods and services to achieve allocative efficiency

  6. Performance on Cost Containment measures without impacting on service delivery • Between 2009/10 to 2013/14 average saving of • 40% on Consultant costs • 10% on Travel and Subsistence

  7. Performance on Operation Excellence • Focus on efficiency of processes • Reengineering of processes related to Masters Office and Guardians Fund allowed for expansion of services within headline inflationary increase of budget • Reengineering of processes related to Maintenance payments (Third Party Funds)

  8. Performance in 2013/2014 Financial Year THIRD PARY FUNDS Tabled outstanding AFS for 5 years in parliament Third party Funds - Total of R3 billion received and paid of which R2,024 billion (67%) is for maintenance Average Monthly Payments to 252 000 beneficiaries (Of which currently only 4 798 is in cash)

  9. Performance in 2013/2014 Financial Year GUARDIAN FUND Total Assets – R9,359 Billion Total Liabilities – R8,586 billion Accumulated surplus - R773,1 million Payments to 60 675 beneficiaries – R1,130 billion Investment Revenue – R492,2 million Interest distributed to beneficiaries R400,4 million Profit Surplus for the year – R89,6 million

  10. Performance in 2013/2014 Financial Year PRESIDENT FUND Total Assets – R1,199 billion Total Liabilities – R3,216 million Accumulated surplus - R1,195 billion CARA ACCOUNT Total Assets – R246,9 million Total Liabilities – R552 000 Accumulated surplus - R246,382 million Revenue from confiscation and forfeiture orders – R102 million Funds available for distribution as at 31 March 2014 - R189m

  11. Alignment to Value for Money Initiatives in Budget Policy Statement Better accountability, discipline and stewardship of public resources Rigorous procurement reforms initiated in infrastructure project management

  12. Alignment to NDP-All citizens should feel and be safe • Enhancing court efficiency and Strengthening judicial governance and rule of law (ISM spent R494m and CJS& IJS spent R472m in 2013/14) • Audiovisual remand systems, enhanced court record systems, improved appeal processes and transcriptions • Integrated seamless and modern criminal justice system through IT • Improving access to justice especially to vulnerable groups including LGBTI (Sexual offences spending R11m in 2013/14 and R19.7m 2014/15, Child Justice Act and Children Act spending R2.9m in 2013/14 and R3.3m in 2014/15, LGBTI R1.1m 2014/15)

  13. Alignment to NDP • Contribution to Broad Based Black Economic empowerment • 80% in value of spending on goods and services Level1-4 • Building Corruption Free Society • Internal Audit, Anti corruption and Risk Management R63m 2013/14 and R68.8m 2014/15 • Building of a Capable State • Alignment of policy, process, resources, technology and data • Improved people and performance measurement • Improved audit outcomes – VOTE account, CARA, President Fund and Guardian Fund unqualified 2013/14,

  14. DOJ&CD2014 Estimates of National Expenditure and Spending Trends

  15. Department of Justice and Constitutional Development 2013/142012/132011/12 Final Budget 11,138, 314 10, 181, 592 8 960 034 Less Expenditure 10,663,313 10, 180, 586 8 958 959 Balance 475,001 1, 006 1, 075 Capital Expenditure 347 607 IJS 120 002 Current 7 392 Percentage Expenditure 95,7100 100

  16. Capital Works • Under Spending 2013/14 • Delays in implementation – 1 year and longer • Justice College refurbishment • Limpopo High Court • Plettenberg Bay Magistrate office • Mamelodi Magistrate Office • Kagiso Magistrate Office • Mpumalanga High Court • Port Shepstone Magistrate Court

  17. Capital Works • Challenges 2014/15 • Mandate of DPW • Adequate technical support • Number of offices with serious structural problems (Bultfontein, Hennenman, Wepener, Lehuritse) • Outstanding lease renewals since 2012 • New dispensation of limitation of lease period and impact on costs (80 leases impacted)

  18. Integrated Justice System • Under Spending 2013/14 • Disaster Recovery Site and Network Upgrade • Challenges experienced • Legislation on implementing agency, e.g. SITA • Delays in publishing approved specifications • Delays in evaluation of bids • Delays in the adjudication process

  19. Intervention Strategies Implemented • Meeting and formal correspondence • at project management level • at CFO level • at Accounting Officer level • at Ministerial level • Escalation to National Treasury • Escalation to Cabinet

  20. Headline on Spending

  21. Cost Drivers - Goods and Services

  22. Cost Drivers - Goods and Services

  23. DOJ&CD2014 Estimates of National Expenditure

  24. MTEF BUDGET ALLOCATIONS:Year on Year Growth

  25. Total Budget Allocation

  26. Budget Allocations per Programme

  27. MTEF BUDGET ALLOCATIONS:Growth in Programme Allocations

  28. Budget Allocations per Economic Classification

  29. Budget Distribution

  30. MTEF BUDGET ALLOCATIONS:Growth in Item Allocations Budget growth driven by rise in personnel cost

  31. MTEF BUDGET ALLOCATIONS Programmes and Sub programmes Regions Independent Bodies Earmarked Funds Facilities Management

  32. Programme 1: AdministrationDivision per sub programme Corporate services (HR, Fin and IT )major spending sub programme

  33. Programme 1: Administration 2014/15Division per sub programme R’000

  34. Programme 2: Court ServicesDivision per sub programme 465 Lower Courts 13 High Courts (R8.19m/court) ; (R28.19m/court)

  35. Programme 2: Court Services 2014/15Division per sub programme R’000

  36. Court Services: Regions

  37. Programme 3: State Legal ServicesDivision per sub programme

  38. Programme 3: State Legal Services 2014/15Division per sub programme R’000

  39. Programme 5: Auxiliary and Associated ServicesDivision per sub programme Major spending area is on Legal Aid .. and mainly driven by increased personnel cost

  40. Programme 5: Auxiliary Services 2014/15Division per sub programme R’000

  41. INDEPENDENT BODIES

  42. EARMARKED AMOUNTS 1 • May not be used for other proposes than those specified

  43. FACILITIES MANAGEMENT

  44. FACILITIES MANAGEMENT

  45. TRANSFER OFFICE OF THE CHIEF JUSTICE

  46. MEDIUM TERM SPENDING PRESSURES

  47. Medium Term: Spending Pressures • Additional accommodation and Leasing Costs - Capital investment in new court infrastructure and additional office accommodation. - Leasing costs due to delays in capital works: Lead times in capital works necessitates leasing • Personnel establishment expansion - DOJ currently funding new courts with minimum concurrent additional allocations for personnel and operational expenditure - Regional capacitation – additional personnel for regions including court personnel (Interpreters, finance and supply chain management personnel) - Internship, learning and development and recruitment • Technical personnel adjustments Compensation of employees – OSD for legally qualified personnel pay progression and performance awards • Funding for Commissions - Marikana Commission extended until September 2014 - Arms Deal Commission

  48. Medium Term: Spending Pressures • Implementation and roll-out cost of legislation – Civil Jurisdiction of Regional Courts. Child Justice and Children's Act Superior Courts Act - High Courts for Mpumalanga and Limpopo - OCJ • Security and risk management Guarding Services for new courts and Security Infrastructure for new and existing courts • Review of the Criminal Justice System Implementation cost of recommendations after Cabinet and Parliamentary endorsement and approval • Increased proximity of courts services to all, especially in townships and rural areas Replace branch courts to ensure that they provide full court services Introduce multilingualism in courts

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