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PRESENTATION ON 2009/10 ANNUAL REPORT – FINANCE INPUTS

Detailed analysis of spending breakdown by program and classification, highlighting savings and underspending factors in the financial year. Auditor-General's comments on asset management and adjustments.

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PRESENTATION ON 2009/10 ANNUAL REPORT – FINANCE INPUTS

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  1. PRESENTATION ON 2009/10 ANNUAL REPORT – FINANCE INPUTS

  2. Contents • Part A Finance • Part B Performance Information

  3. FINANCE PART A • National state of expenditure for the year ended 31 March 2010 • Report of the Auditor-General • Progress on 2009/10 qualification

  4. NATIONAL STATE OF EXPENDITURE FOR THE YEAR ENDED: 31 MARCH 2010

  5. COMMENTS ON THE NATIONAL STATE OF EXPENDITURE FOR THE YEAR ENDED PER PROGRAMME: 31 MARCH 2010 • The final overall expenditure of the Department as at 31 March 2010 was standing at 98.94%. • The actual spending of programme Security is 98.54% ,net underspending under programme Security is mainly due to savings under Compensation of Employees as a result of lower than anticipated expenditure on medical benefits of members with the conversation to GEMS,funds allocated to finance posts for New Kimberley Correctional Centre not been spent due to appointments not materialising before financial year end and vacancy resulting from natural attrition • The actual spending of programme Care is 99.36% ,net under-spending under programme Care is mainly due to savings under Compensation of Employees as a result of the non-finalisation of the payment for the occupation specific dispensation related to Pharmacists, Medical Practitioners and Psychologists

  6. COMMENTS ON THE NATIONAL STATE OF EXPENDITURE FOR THE YEAR ENDED PER PROGRAMME: 31 MARCH 2010 • The actual spending of programme Development is 95.75%, net under-spending under Programme Development is mainly due to the savings under Compensation of Employees as a result of the non-finalisation of the payment for occupation specific dispensation related to educators. • The actual spending of programme Facilities is 97.24%, net under-spending under programme Facilities is mainly due to savings under Building and Other Fixed Structures as a result of lower than anticipated expenditure arising from the late billing from the Department of Public Works as well as the non-finalisation of the PPP correctional centre bid processes. The R22,590 million was requested for roll-over.

  7. COMMENTS ON THE NATIONAL STATE OF EXPENDITURE FOR THE YEAR ENDED PER GFS CLASSIFICATION: 31 MARCH 2010 • The actual spending of Compensation of Employees is 98.90%, net under-spending under Compensation of Employees is mainly due to savings as a result of lower than anticipated expenditure on medical benefits of members with the conversation to GEMS, funds allocated to finance posts for New Kimberley Correctional Centre not been spent due to appointments not materialising before financial year end and vacancy resulting from natural attrition, the non-finalisation of the payment for the occupation specific dispensation related to Pharmacists, Medical Practitioners and Psychologists and educators. • The actual spending of Payment for Capital Assets is 95.52%, net under-spending under Payment for Capital Assets is mainly due to savings under Building and Other Fixed Structures as a result of lower than anticipated expenditure arising from the late billing from the Department of Public Works as well as the non-finalisation of the PPP correctional centre bid processes. The R22,590 million was requested for roll-over.

  8. STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR ENDED: 31 MARCH 2010

  9. STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR ENDED: 31 MARCH 2010

  10. STATE OF EXPENDITURE PER GFS CLASSIFICATION FOR THE YEAR ENDED: 31 MARCH 2010

  11. STATE OF EXPENDITURE PER GFS CLASSIFICATION FOR THE YEAR ENDED: 31 MARCH 2010

  12. NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR ENDED 31 MARCH 2010: 2009/2010 FINANCIAL YEAR

  13. NATIONAL STATE OF EXPENDITURE PER GFS CLASSIFICATION FOR THE YEAR ENDED 31 MARCH 2010: 2009/2010 FINANCIAL YEAR

  14. REPORT OF AUDITOR-GENERAL SOUTH AFRICA • Qualification on: Moveable tangible major capital assets • Adjustments of R129 million (2009: R264 million) that were effected to the opening balance of last year for which supporting documents to support these adjustments were not provided to AGSA • Existence of major movable tangible assets with an approximate value of R63 million (2009: R236 million) as these assets could not be physically identified.

  15. REPORT OF AUDITOR-GENERAL SOUTH AFRICA (Continued) • Qualification on: Moveable tangible major capital assets (Continued) • Some of assets physically identified on the floor could not be traced back to the asset register • Assets did not always reflect the cost or fair value of the assets and consequently assets were overvalued by approximately R57 million (2009: R236 million).

  16. REPORT OF AUDITOR-GENERAL SOUTH AFRICA (Continued) • Qualification on: Moveable tangible minor capital assets • Minor tangible capital assets valued at approximately R31 million (2009: R38 million) could not be physically verified • Some minor tangible capital assets identified on the floor could not be traced back to the asset register

  17. REPORT OF AUDITOR-GENERAL SOUTH AFRICA (Continued) • Emphasis of matters on: • Unauthorised expenditure - As disclosed in note 10 to the financial statements, unauthorised expenditure to the amount of R483 million was incurred by the department during 2008/09 financial year

  18. REPORT OF AUDITOR-GENERAL SOUTH AFRICA (Continued) Non-compliance to legislation • AGSA identified non-compliance to legislation which is being addressed through action plans • Interns will soon be appointed to assist in going through all 2010/11 documentation to verify full compliance with prescripts

  19. Progress on 2009/10 qualification • Monthly reconciliation was improved through the submission of supporting documents to Head Office on a monthly basis • Asset verification was conducted and the asset register updated accordingly • Interns will soon be appointed to do a full scale asset verification (from the floor to the asset register and vice versa) in all centres

  20. Progress on 2009/10 qualification (Continued) • Correction of misallocations and values on asset register as identified from monthly asset reconciliations – head office team visited all regions and assisted with actual rectifications on asset register and offered on-the-job training • Conducting of monthly asset verification spot checks by asset controllers

  21. Progress on 2009/10 qualification (Continued) • Head office team visiting management areas to follow-up on progress made on correcting identified deficiencies • Appointment of Asset and Sub Asset Controllers with clear delegations

  22. Progress on 2009/10 Emphasis of matter • Monthly unauthorised expenditure return was implemented for submission with the monthly IYM • Cost containment measures introduced in 2008/09 were further tightened and new ones were introduced in 2009/10

  23. Progress on 2009/10 Emphasis of matter (Continued) • The monthly financial meeting agenda was enhanced to incorporate unauthorised, irregular, fruitless and wasteful expenditures to be discussed and corrective measures taken at all management levels including other compliance matters • Introduced monthly financial statements including monthly appropriation statement to closely monitor levels of expenditure • The voted funds for 2009/10 were 98,9% spent

  24. REPORT OF AUDITOR-GENERAL SOUTH AFRICA (Continued) • Auditing of performance information • Lack of effective, efficient and transparent systems and internal controls regarding performance management • Inadequate quarterly reporting on performance information • Reasons for major variances between planned and actual reported targets were not explained adequately • Inadequate presentation of reported information • Inadequate content of strategic plan • Reported information not consistent with planned targets

  25. PERFORMANCE INFORMATION PART B • Overview • Programme Performance • Administration • Security • Corrections • Care • Development • Social Reintegration • Facilities • AGSA report on Performance Information • Departmental Response • Conclusions

  26. OVERVIEW • During 2009/10 several developments in DCS that impacted on its performance • Appointed new National Commissioner & CFO • Presidency finalised outcomes to be delivered by departments & Service Delivery Agreement for Ministers was drafted in line with outcome document • Financial year started with a deficit of R483,8 million which affected significant number of strategic projects across budget programmes. • DCS signed GPSSBC Resolution number 2 of 2009 -made provision for implementation of OSD for correctional officials • Intensive exercise of savings identification also took place & belt-tightening measures were implemented in various areas such as • Travelling • subsistence & related accommodation expenditure; • appointment of consultants in Department; • purchases of furniture & vehicles

  27. OVERVIEW cont’d • Improving Performance Information & development & approval of Policy on MER • Finalisation of LOGIC model, outcomes & outputs for DCS, & suite of indicators & approval of 44 performance indicators • Initiation of process of validation of data against these indicators • Several senior managers were suspended of including former National Commissioner. • Outcome of disciplinary hearings for Regional Commissioners of Gauteng & of Limpopo, Mpumalanga & North West are still pending • Acting Regional Commissioners have been appointed to ensure continuity in service delivery & stability at executive management level.  • A number of SMS members faced disciplinary action for various infringements ranging from poor performance to financial mismanagement.

  28. PROGRAMME PERFORMANCE:Programme A: Administration • Finance: • Percentage expenditure for 2009/10 was 98.9% • Qualification on major movable tangible assets • Matter of emphasis in unauthorized expenditure. • Corporate Services • OSD was implemented with several challenges • 7 Day Establishment was implemented • Housing Policy for SMS was approved & implemented • Implementation of a youth programme which benefited 33 unemployed youth & 27 offenders in Zonderwater • In response to Presidential call, department in conjunction with SASSETA has placed interns. • A master training programme for firearms was implemented to decentralise

  29. Programme A: Administration • Central Services: • Anti-Fraud & corruption capacity of department rated as third most efficient of 85 Departments by DPSA. • There was 88.99% convictions rates for corruption cases in 2009/10 • R 2.5 million recovered from 702 officials found guilty of defrauding department ‘s medical aid scheme. • DCS functioned co-ordinator of United Nations Commission on Crime Prevention & Criminal Justice (UNCCPCJ) & convened inter-departmental committee & drive development of a Country Report on progress made since previous Congress • Department of Correctional Services serves as Secretariat of Africa Correctional Services Association (ACSA). In 2009/10 department organised a meeting of Senior Officials aimed at developing a Strategic Plan for newly formed association • Department implemented Automated Personal Identification System in 14 Correctional Centers

  30. PROGRAMME PERFORMANCE: Programme B: Security • Decrease in number of escapes from 241 in 2000/01 to 56 in 2009/10. • Increase in assaults & unnatural deaths. • Security Technology Framework finalised & approved • Security Inspection Manual as a tool to monitor implementation of Security policies & procedures was approved & implemented

  31. PROGRAMME PERFORMANCE: Programme C: Corrections • Reduction of overcrowding by 4%, from 42.03% - 38.70% • Discussion document on improved management of remand detainees was developed & consulted with internal & external stakeholders of JCPS cluster. • Department signed bail protocol with Ministers in Criminal Justice Cluster • Monitoring tools on Case Management & on Overcrowding approved for implementation. •  A total number of 44 481 offenders sentenced for longer than 24 months have completed correctional programmes which exceeds target of 40 975 offenders (target exceeded by 7.88%). • Draft protocol on Foreign Nationals was developed

  32. PROGRAMME PERFORMANCE: Programme C: Corrections • 40 381 Correctional Sentence Plan Revision Frameworks were compiled •  63 officials orientated on generic facilitation skills & implementation of correctional programmes • 4000 correctional programme booklets were distributed to regions & orientation material distributed to selected centres • Only 1 of 12 facilities has been upgraded with video postponement room's All necessary equipment for Video Remand was procured but owing to readiness of facilities, installation could not be completed • There has been a decrease in a number of child detainees

  33. PROGRAMME PERFORMANCE: • Programme D: Care • Department launched Imbeleko project which addresses management & treatment of babies incarcerated with their mothers. • Two additional sites were accredited to provide ARVs, bringing to 21 number of sites within DCS. • A total number of 7640 offenders were on ARVs which exceeded target of 5100 for 2009/10 financial year. • 72227 of offenders that have participated in Prevention Programmes & Correctional Centre Based Care • 14% of total offender population participated in Comprehensive HIV & AIDS programmes

  34. PROGRAMME PERFORMANCE: • Programme E: Development • Average number of offenders participated in Offender SRAC Programmes & Services were 127 293. • Total participation of offenders in skills development programmes was 78 282. • Average number of offenders involved in agriculture from 1 April 2009 were 2 905 offenders against May 2005 Baseline of 2 471 offenders. • Average number of offenders involved in production workshops were 1 745 offenders • Skills Development Master Plan has been implemented consisting of • Computer Skills Training, • Basic Occupational Skills Training, NC(V), • Engineering Studies, Business Studies, Vocational Training, & • Entrepreneurial Training • 97 % pass rate in Grade 12 Examination in KZN.

  35. PROGRAMME PERFORMANCE: • Programme E: Development • High participation in skills development due to: • Huge interest of offenders in NC (V) programme • Improved reporting by Regions as a result of implementation of reviewed Skills Development statistics gathering tool (spread sheet • Improved marketing of skills development programmes to offenders. • Launched Skills Development Project for female offenders in partnership with Services Seta, Susca Watts Academy for Advanced Beauty Technology & Isikhati Training Dynamics • Established a partnership with Department of Education. DoE trained 42 Master Trainers from all regions on New ABET Level 2 Curriculum & training material was procured for this purpose

  36. PROGRAMME PERFORMANCE: • Programme E: Development • 56 632 Wood products were completed (197,7% of objective.) • 71 752 Steel products completed (76%) • 1 350 285 Textile products were completed (70,2%) • Number of bread baked was 2 098 209 (70,8%) • Milk production was 6 133 467 lt (100,6 %)Red meat production was 581 477kg (105,1%)Pork production was 1 870 286 kg (91,4%) • Chicken production was 1 083 177kg (78.9%)Egg production was 1 543 542doz (110.3%) Vegetable production was 9 420 220 kg (66.3%) • E-literacy training commenced at identified Correctional Centres targeting Youth Offenders.

  37. PROGRAMME PERFORMANCE: • Programme F: Social Reintegration • Implementation of project on Prevention & Management of absconding & parole violation led to reduction in parole violations. • department hosted parole board submit to evaluate parole system. • 9757 parolees violated their parole against target 10780 in 2009/10 financial year, 95% reduction.

  38. PROGRAMME PERFORMANCE: • Programme G: Facilities • addition of 2880 bed spaces to existing capacity • Completion of Kimberly Correctional Center • upgrading of existing correctional centre project at Ceres (262 additional beds) - 47% complete • Upgrading of existing correctional centre project at Brandvlei (346 additional beds) - 51% complete • Construction of replacement correctional centre at Vanrhynsdorp (338 additional beds) - 66% complete • Construction of 53 social reintegration facilities (parole boards) - 81.1%

  39. AGSA Management Report: OTHER LEGAL & REGULATORY REPORTING REQUIREMENTS Basis for adverse conclusion •  Reasons for major variances between planned & actual reported targets were not explained adequately • Inadequate content of strategic plan • Reported targets not reliable & complete when compared to source information • Reported targets not accurate when compared to source information • Planned & reported performance targets not specific • Inadequate presentation of reported information • Reported information not consistent with planned targets

  40. AGSA Management Report: OTHER LEGAL & REGULATORY REPORTING REQUIREMENTSContinued Other matters • Non-compliance with applicable legislation - Public Finance Management Act (Act 1 of 1999) • Lack of effective, efficient & transparent systems & internal controls regarding performance management - • Inadequate quarterly reporting on performance information

  41. DCS’S RESPONSE TO ADVERSE OPINION • Action Plan has been drafted to address areas of concern. This will be monitored monthly • New framework has been published by NT & this will assist in improving on performance information • Planning & MER policies are being revised in line with changes in regulatory framework to enhance internal controls • Proposal in increase in capacity in department to enhance planning & reporting • A forum, PRRCC, established to improve on integrated planning • Quarterly, feedback is provided to Budget Programme Managers (BPM) & Responsibility Managers on performance information. • An exercise undertaken with BPM on improving performance information • Mid-year review process to highlight critical areas in performance information • Produced several memos & circulars aimed at educating managers & improving management of performance information – not complied with. Reports on Performance Information submitted to NC on monthly basis

  42. CONCLUSION • Department has acknowledged steps have been taken to address critical areas in relation to Performance Information • New framework will enhance planning & reporting alongside internal controls & policies • Turn around approach includes • Appointment of Budget Programme Managers • Training on management of Performance Information • Verification of information (Certification required from Managers) • Audit of performance indicator information • Revival of Planning Reporting & Resourcing Coordinating Committee • The department’s performance has make achievements against its objectives, despite the tight financial measures: • Implementation of the OSD and 7 day establishment • Remand Detention - Policy developments that include the signing of the Bail Protocol • Improved relations with Stakeholders: • Workshop of experts in the field psychiatry, psychology, criminology • NPA in the Ndabezitha initiative • Relations with academic institutions

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