NPA Budget & Finance Briefing

Portfolio Committee on Justice and Constitutional

Development

17 June 2009

1

Agenda• 2008/09 - Expenditure Outcome

• 2009/10 - Budget Allocations

• Budget vs Expenditure Status as at 31st of May 2009

• Audit Action Plan and Progress – 2007/08

• Possible Audit Qualification Issues - 2008/09

• Facilities

• DSO relocation to SAPS2

2008/09 - Expenditure Outcome

3

 Economic Classification

2008/09   2007/08

Adjusted Appro

Virement Final Actual Variance

Exp as % of final Appro

Final Appro

Actual Exp

  R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Compensation of employees 1,555,395 1,170 1,556,565 1,556,566

(1) 100.0% 1,231,885 1,230,642

Goods and services 510,650 (3,463) 507,187 506,817

370 99.9% 573,321 573,673

Provinces and Municipality - - - - - - 92 -

Financial transactions inassets and liabilities

-

324

324

325

(1) 100.3%

960

936

Departmental agencies & accounts

1,240

- 1,240 1,073 167 86.5%

-

-

Households 7,697 (1,743) 5,954 4,575 1,379 76.8% 3,258 3,268

Buildings & other fixed structures

-

-

-

-

- 0.0%

57

57

Machinery and Equipment 36,272 - 36,272 2,607 33,665 7.2% 47,982 47,982

Software and otherintangible assets 4,267 - 4,267 12 4,255 0.3 3,711 3,711

Total 2,115,521 -3,7122,111,80

92,071,97

5 39,834 98%1,861,26

61,860,26

9

2008/09 Expenditure

Outcome

4

2008/09 Expenditure

Outcome (Cont.)  2008/09   2007/08

Sub-ProgrammeAdjusted Appro Virement Final Actual Variance

Exp as % of

final Appr

o

Final Appr

oActual

Exp

  R'000 R'000 R'000 R'000 R'000 % R'000 R'000

Public Prosecutions                

Current payment 1,647,389 (27,035) 1,620,354 1,619,986 368 100.0% 1,420,334 1,419,419

Transfers and subsidies 6,757 (1,193) 5,564 4,018 1,546 72.2% 2,391 2,309

Payment for capital assets 32,530 (35) 32,495 1,677 30,818 5.2% 27,614 27,614

Witness ProtectionProgramme              

Current payment 107,540 (4,734) 102,806 102,806 - 100.0% 77,968 77,968

Transfers and subsidies 80 (42) 38 38 - 100.0% 5 5

Payment for capital assets 4,920 - 4,920 323 4,597 6.6% 1,345 1,345

Directorate Of SpecialOperations                

Current payment 255,744 21,025 276,769 276,769 - 100.0% 248,603 248,603

Transfers and subsidies 2,000 (472) 1,528 1,528 - 100.0% 924 924

Payment for capital assets 3,089 - 3,089 584 2,505 18.9% 22,768 22,768

Asset Forfeiture Unit              

Current payment 55,372 8,775 64,147 64,147 - 100.0% 59,261 59,261

Transfers and subsidies 100 (36) 64 64 - 100.0% 30 30

Payment for capital assets - 35 35 35 - 100.0% 23 23

Total 2,115,521 -3,712 2,111,8092,071,97

5 39,834 98% 1,861,2661,860,26

9

5

2009/10 - Budget Allocations

6

Sub-Programme

2009/10 2010/11

Original MTEF

Allocation

Revised MTEF

Allocation NT Cut% NT Cut

Original MTEF

Allocation

Revised MTEF

Allocation NT Cut% NT Cut

Public Prosecutions 1,564,786 1,532,847 -31,939 -2.04% 1,641,304 1,602,883-

38,421 -2.34%

Witness Protection 132,766 130,056 -2,710 -2.04% 142,838 139,578 -3,260 -2.28%

Directorate of Special Operations 304,822 298,600 -6,222 -2.04% 321,298 313,814 -7,484 -2.33%

Asset Forfeiture Unit 69,895 68,468 -1,427 -2.04% 73,748 72,032 -1,716 -2.33%

Support Service 459,492 450,113 -9,379 -2.04% 501,250 489,968-

11,282 -2,25

Total 2,531,761 2,480,084 -51,677 -2.04% 2,680,438 2,618,275 -62,163 -2.32%

ENE Allocation per Sub-programme

7

Economic Classification

2009/10 2010/11

OriginalMTEF

Allocation

RevisedMTEF

Allocation NT Cut% NT

Cut

OriginalMTEF

Allocation

RevisedMTEF

Allocation NT Cut% NT

Cut

COMPENSATION OF EMPLOYEES 1,836,535 1,824,536 -11,999 -0.65% 1,921,146 1,902,760 -18,386 -0.96%

GOODS AND SERVICES 607,357 567,689 -39,668 -6.53% 663,769 620,007 -43,762 -6.59%

HOUSEHOLDS 10,057 10,057 0 0.00% 10,817 10,817 0 0.00%

MACHINERY & EQUIPMENT 64,043 64,043 0 0.00% 69,892 69,892 0 0.00%

DEPARTMENTALAGENCIES ANDACCOUNTS 1,425 1,415 -10 -0.70% 1,480 1,465 -15 -1.01%

SOFTWARE AND OTHERINTANGEBLE ASSETS 12,344 12,344 0 0.00% 13,334 13,334 0 0.00%

Total 2,531,761 2,480,084 -51,677 -2.04% 2,680,438 2,618,275 -62,163 -2.32%

ENE Allocation per Economic Classification

8

Budget Allocation 2009/10

BU2008/09 Budget

Allocation 2009/10 Budget Allocation % Increase

ASSET FORFEITURE UNIT 60,472,000 71,242,000 18%

SUPPORT SERVICES 358,658,000 456,021,000 27%

NATIONAL PROSECUTING SERVICES 1,142,494,000 1,322,857,000 16%

OFFICE OF THE NDPP 8,882,000 20,760,000 134%

COMMUNICATIONS UNIT 17,989,000 18,876,000 5%

INTERGRITY MANAGEMENT UNIT 10,584,000 15,036,000 42%

PCLU (MISSING PERSONS) 3,292,000 3,476,000 6%

PRIORITY CRIME LITIGATION UNIT 8,417,000 10,126,000 20%

WITNESS PROTECTION UNIT 112,540,000 126,140,000 12%

SEXUAL OFFENCES & COMM AFF UNIT 35,780,000 37,876,000 6%

SPECIALISED COMMERCIAL CRIME UNIT 93,280,000 104,584,000 12%

DIRECTORATE OF SPECIAL OPERATION 263,133,000 293,090,000 11%

Grand Total 2,115,521,000 2,480,084,000 17%9

Support Services

Budget Allocation -2009/10

BU2008/09 Budget

Allocation2009/10 Budget

Allocation% Increase

FINANCE AND PROCUREMENT 129,788,000 155,061,000 19%

HUMAN RESOURCES MANAGEMENT & D 39,321,000 48,552,000 23%

INFORMATION MANAGEMENT 65,621,000 105,117,000 60%

OFFICE OF THE CEO 10,258,000 12,725,000 24%

PROJECT MANAGEMENT OFFICE 44,986,000 57,072,000 27%

POLICY AND RESEARCH 11,855,000 13,609,000 15%

SECURITY AND RISK MANAGEMENT 56,829,000 63,885,000 12%

Grand Total 358,658,000 456,021,000 27%

Note: Reprioritisation within the NPA resulted in the ENE allocated budget difference against the final allocated budget 10

Budget vs Expenditure Status as at 31st of May 2009

(Preliminary)

11

NPA Overall Budget & Exp

as at 31st of May 2009 (Preliminary)

Economic Classification

Total Expenditure as

at 31 May 2009(Preliminary)

Current Budget

AvailableBudget

% Budget

Available

COMPENSATION OF EMPLOYEES 257,448,854 1,824,536,000 1,567,087,146 86%

GOODS AND SERVICES 97,355,771 567,689,000 470,333,229 83%

HOUSEHOLDS 1,088,869 10,057,000 8,968,131 89%

MACHINERY AND EQUIPMENT 290,315 64,043,000 63,752,685 100%

SOFTWARE & INTANGIBLE ASSETS 0 12,344,000 12,344,000 100%

DEPARTMENTAL AGENCIES & ACCOUNTS 0 1,415,000 1,415,000 100%

Grand Total 356,183,809 2,480,084,0002,123,900,19

1 86%

12

Actual Exp vs Projected Cash Flow

-

50,000

100,000

150,000

200,000

250,000

APRIL '09 MAY '09

Actual Exp

Projected Exp

Underspending of R19,9m

Overspending of R7,393m

13

BU Overall Budget & Exp

as at 31 May 2009

Business Unit Total Expenditure Current Budget Available Budget% Budget Available

ASSET FORFEITURE UNIT 11,555,162 71,242,000 59,686,838 84%

SUPPORT SERVICES 62,938,508 456,021,000 393,082,492 86%

NATIONAL PROSECUTING SERVICES 191,228,049 1,322,857,000 1,131,628,951 86%

OFFICE OF THE NDPP 1,134,039 20,760,000 19,625,961 95%

COMMUNICATIONS UNIT 1,559,641 18,876,000 17,316,359 92%

INTERGRITY MANAGEMENT UNIT 1,402,344 15,036,000 13,633,656 91%

PCLU (MISSING PERSONS) 361,567 3,476,000 3,114,433 90%

PRIORITY CRIME LITIGATION UNIT 1,032,374 10,126,000 9,093,626 90%

WITNESS PROTECTION UNIT 23,048,529 126,140,000 103,091,471 82%

SEXUAL OFFENCES & COMM AFF UNIT 5,376,073 37,876,000 32,499,927 86%

SPECIALISED COMMERCIAL CRIME UNI 12,981,526 104,584,000 91,602,474 88%

DIRECTORATE OF SPECIAL OPERATION 43,565,997 293,090,000 249,524,003 85%

Grand Total 356,183,809 2,480,084,000 2,123,900,191 86%14

CS Overall Budget & Exp

as at 31 May 2009

SS Service Centre Total Expenditure Current Budget Available Budget% Budget Available

FINANCE AND PROCUREMENT 37,239,463 155,061,000 117,821,537 76%

HUMAN RESOURCES MANAGEMENT & DEV 4,120,897 48,552,000 44,431,103 92%

INFORMATION MANAGEMENT 8,962,164 105,117,000 96,154,836 91%

OFFICE OF THE CEO 1,281,694 13,725,000 12,443,306 91%

PROGRAMME MANAGEMENT OFFICE 1,799,169 56,072,000 54,272,831 97%

POLICY AND RESEARCH 1,829,934 13,609,000 11,779,066 87%

SECURITY AND RISK MANAGEMENT 7,705,187 63,885,000 56,179,813 88%

Grand Total 62,938,508 456,021,000 393,082,492 86%

15

NPA

Audit Action Plan and Progress – 2007/08

16

• Irregular, Fruitless & Wasteful Expenditure• Asset Management (Tangibles)• Leave Entitlement• Asset Management (Intangibles)• Prepayments and Advances• Financial Management• Lease commitments• Housing guarantees• Governance Issues

Disclaimer of Audit Opinion

17

Irregular, Fruitless & Wasteful Expenditure

Progress: • HR busy with organisational design of SCM processes &

mapping. • Circulars, Practice Notes and Guidelines addressing the

issues of non-compliance & adherence to SCM policies, have been issued.

• Request for deviations are adequately reviewed and considered for approval from BU's.

• IMU finalised the review on the SCM processes & procedures.

• SCM training plan has been developed and weekly training sessions are being conducted.

18

Irregular, Fruitless & Wasteful Expenditure (cont.)

Progress: • Condonation for R113 million was approved by the DG

of DOJ&CD on the 18 March 2009. • Have met with the Accountant-General on the CFM

lease and now awaits written confirmation • The understated amount of R86m was disclosed in the

2008/09 AFS. This matter is currently being investigated by the Irregular Committee.

• Investigations have been finalised into SCM unit and a report has been submitted.

• HRMD has instituted disciplinary proceedings against the alleged officials involved.

19

Asset Management (Tangibles)

Progress:– The NPA Asset Register with values was

provided to the AG on the 30th of April 2009.– Conducted 4 asset verifications during the

2008/09 financial year– Can fully account for all assets acquired

during the 2008/09 financial year– Systems and procedures in place– Now focusing on correcting opening balances

23

Leave EntitlementProgress: • Continous monitoring, reviews & reconciliations are

performed.• Various circulars have been distributed with regards to

leave management.• Meetings held with management on leave management,

leave related issues and concerns were discussed and solutions identified, i.e. Manco.

• Corporate Manager meeting, etc. Roles and responsibilities with various actions identified were communicated during these sessions.

• Management and monitoring of leave will also be included in the performance agreements of Corporate Managers.

24

Prepayments & Advances

Progress: • NPA Management held meetings with OAG & Office of

the Auditor-General on the 15 September 2008, 14 October 2008 & 13 May 2009.

• The Accountant-General raised concerns on the cost benefit of the R22 million on the Sale & Lease Back of IT Equipment.

• The NPA has requested a Forensic Audit on this Sale & Lease Back transaction.

26

Financial Management

Progress: • To address late prioritization of funds, the joint budget

committee reviews expenditure patterns to eliminate such future occurrences.

• Expenditure is monitored in line with the draw-downs on a monthly basis to ensure that requests for virements & reprioritization of funds are adequately addressed.

27

Lease Commitments

Progress:

Cell Phone Lease Commitments – • New cell phone policy has been adopted & implemented.• Contracts now in the name of individual employees and

not NPA.Finance Lease Commitments – • The matter was addressed with the OAG. Awaiting the

determination of the National Treasury on the correct disclosure (whether it should be Finance or Operating Lease with particular reference to CFM).

• Awaiting the outcome from NT.

28

Housing Guarantees

Progress: • Management of the Housing Loan Guarantees is now

progressing well.• Engagements with the relevant banking institutions• Housing Guarantee register is being updated and is

monitored by the operations manager on a monthly basis.

• Communication was forwarded to financial institutions to obtain the liability in respect of housing guarantees,

• Where financial institutions have responded, records were updated.

• Meetings have already been held with supervisors within the relevant section about the enforcing of standard controls.

29

SCOPA Resolutions

Accountability Status of NPA: • This matter is still being considered by the Minister.

Capacity & people related issues:• Review of the NPA Establishment.• Critical vacant posts have been advertised.

30

Governance Issues

Progress – Strategic Plan: • Strategic Plan includes the measurable

objectives, expected outcomes, indicators, etc. It is compliant with the NT guidelines.

• The Strategic Plan was presented at high level to Minister for approval.

• A stakeholder workshop was held on 12th March 09 to provide input on the strategic plan.

• The NPA Strategic Plan for 2009-2012 is ready for sign-off and printing

31

CARA

Audit Action Plan and Progress – 2007/08

34

Disclaimer of Audit Opinion

• Asset Forfeiture Unit Case Register

– The AFU case register is the only source for the identification and monitoring of court cases that will affect the Criminal Asset Recovery Account.

– Total monetary value declared confiscated and forfeited in these cases, dating back to 2000, that had not been followed up amounted to R163 million.

35

Disclaimer of Audit Opinion (Cont.)

• Forfeiture assets and monies receivable from confiscation and forfeiture orders not disclosed in AFS.

• CARU did not maintain an asset register in order to account for all the assets forfeited to the State. As a result of the incomplete case register it is not possible to quantify the effects of non disclosure.

36

Audit Action Plan

• In order to address all the above audit concerns, an Audit Action Plan was developed to monitor and review progress on a monthly basis.

• Management information is reported to the DG –DOJCD, NPA EXCO monthly and CS MANCO fortnightly and periodically to Audit Committee.

37

Progress

• CARU Unit has filled the 3 of the 4 permanent vacant positions in April/May 2008 (Total establishment 5).

• CARU has appointed 5 interns in April 2008 to assist in updating over 1800 case files.

• CARU is working with AFU on the Electronic Case Management System.

• CARU has implemented a manual case follow up system to monitor unfulfilled cases with the curators, AFU and other stakeholders.

• CARU has started with regional visits since October 2008.• Consultants have been appointed to review the AFU/CARU

functions and to advise on possible solutions for the units to obtain an unqualified audit opinion in the AFS.

38

Possible Audit Qualification Issues – 2008/09

39

Possible Audit Qualification Issues - 2008/09

• Asset Management (Tangibles) – opening balances, values, completeness

• Leave Entitlement• Lease Commitments• Governance Issues

• Audit Action Plan in place to address these issues

40

Facilities

41

Facilities• NPA no separate capital budget• Capital budget held in Programme 2: Court

Services• NPA capital budget allocation for 2009/10 =

R20 million• NPA managing the following facilities: ??• Challenges:

– Lack of funding – Innes Chambers – R189 million– DSO handover – Promat complex– Accommodation for prosecutors at the lower

courts 42

DSO transfer to SAPS

43

DSO transfer• Proposed fixed date = 5 July 2009; consent date = 5

June 2009• 28DSO investigators have transferred to SAPS before

the fixed date – budget will follow investigative capacity

• 214 DSO investigators have consented to transfer to SAPS on the fixed date – budget will follow investigative capacity

• 70 DSO investigators that have not consented to the transfer to SAPS have been offered alternative placement at SIU – budget will follow to SIU

• DSO prosecutors and administrative support will remain with the NPA – budget stays with NPA

44

DSO transfer

• DSO = subprogramme of the NPA• DSO ENE budget 2009/10 = R298 million;

(2008/09 = R429 million)• Have agreed with SAPS to negotiate the

amount of budget to be transferred based on the number of DSO investigators (salary bill plus operational budget)

• Budget transfers will be finalised during the Adjustment Estimates

45

DSO transfer• DSO assets and liabilities were determined and

verifications were performed• DSO assets and liabilities will be transferred to

SAPS on fixed date• Special arrangements in place for covert assets• Facilities – SAPS will find alternative

accommodation for DSO investigators that transfer to SAPS

• Promat complex – in discussions with SAPS on the possible use of the complex by SAPS as headquarters of the DPCI

46

Thank You!

47