IN-YEAR-MONITORING (IYM) FOR 2020/21 FINANCIAL YEAR - PowerPoint Presentation

1. IN-YEAR-MONITORING (IYM) FOR 2020/21 FINANCIAL YEAR30 SEPTEMBER 2020

2. 2Part A: Summary of the National State of Expenditure up to 30 September 2020Part B: Summary of the National State of Expenditure per programme up to 30 September 2020Part C: Summary of National State of Expenditure per economic classification up to 30 September 2020Part D: Summary of Departmental Revenue up to 30 September 2020Part E: COVID-19 Regional State of Expenditure per GFS up to 30 September 2020Part F: Overview on cost containment measures implementationOutline of the presentation

3. 3A. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

4. 4OVERVIEW:The year-to-date expenditure of the Department as at 30 September 2020 was R12,095 billion (46.69%) against the spending plan of R13,460 billion (51.96%) resulting in R1,364 billion underspending of the projected expenditureThe spending plan included in this analysis is the revised spending plan as approved by National Treasury on 20 August 2020 after the implementation of Special Budget Adjustment The Minister of Finance tabled the 2020 Special Adjustment Budget on 24 June 2020During the AENE process, the following budget adjustments have been effected;A virememt of R374,355 million from item: Compensation of Employees(Salaries and Wages) to Households: Post Retirement BenefitsA virement of R1,476 million to fund Judicial Inspectorate on Correctional Services (JICS) for Information technology servicesA virement of R2,540 million shifted from Goods and Services to Machinery and Equipment for procurement of vehicles under JICSSelf financing amounting to R623 thousand for offender gratuityCorrections on level 4 items that were approved in SAB adjustments;R23,193 million for procurement of mattressesR600 thousand for procurement of generatorsR21,041 million for funding leasing of quarantine sites (installation and rental)The spending plan will be revised further later in the financial year after the AENE Bill has been enactedA. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

5. 5B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

6. 6B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020 Factors that contributed to the under-/ over spending per Programme are as follows:

7. 7The actual spending of programme Administration is R2,222 billion (41.91%) against the spending plan of R2,771 billion (52.25%) resulting in R549 million underspending as a result of the following:Compensation of Employees: The actual spending of R1,487 billion (50.43%) against the revised spending plan of R1,644 billion (55.74%) resulting in R157 million underspending due to the spending plan which has a Cost of Living Adjustment ( COLA) projectionB. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

8. 8Compensation of Employees (cont): The Budget Committee resolved that Branch HR must clean up PERSAL so as to ensure a credible database for reconciliation with the HRBP tool. This process of aligning PERSAL to the HRBP Tool remains incomplete due to further cutting of posts which must be incorporated into this alignment. The permanent funded establishment as published in 2020 ENE was reported to be 5,678 against permanent PERSAL establishment of 6,846 resulting in a variance of 1,168 postsHereunder is the analysis of filled and vacant posts as per HRBP tool and PERSAL as at 30 September 2020 Goods and Services: The actual spending of R407 million (38.37%) against the revised spending plan of R740 million (69.68%) resulting in R332 million underspending was mainly on items: Fleet Services, Travel and Subsistence due to National Lockdown as a result of COVID-19, the other contributing factors were on items Computer Services, Inventory: Food and Food Supplies and Consumables: Stationery, Printing and Office Supplies due to provision made for accruals/payables in the spending plan for the first two months of the 2020/21 financial year Interest and Rent on Land: There was an expenditure of R826 thousand incurred against a zero budget mainly due to interest paid on arrears salary in Head Office B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

9. 9Transfers and subsidies: The actual spending of R305 million (34.82%) against the revised spending plan of R257 million (29.25%) resulting in R49 million overspending mainly on item Households: Employee Social Benefits as a result of leave gratuities paid in the current financial year for the added financial obligation of early retirement without penalisation of pension benefits cases Payments for capital assets: The actual spending of R21 million (5.09%) against the revised spending plan of R130 million (31.47%) resulting in R109 million underspending was mainly on item: Transport Equipment due to delays in procurement of vehicles B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

10. 10B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

11. 11Programme Incarceration: The actual spending of programme Incarceration is R7,253 billion (48.23%) against the revised spending plan of R7,919 billion (52.66%) resulting in R666 million underspending as a result of the following:Compensation of Employees: The actual spending of R5,543 billion (50.61%) against the revised spending plan of R5,699 billion (52.04%) resulting in R156 million underspending due to the spending plan which has a COLA projectionThe Budget Committee resolved that Branch HR must clean up PERSAL so as to ensure a credible database for reconciliation with the HRBP tool. This process of aligning PERSAL to the HRBP Tool remains incomplete due to further cutting of posts which must be incorporated into this alignment. The permanent funded establishment as published in 2020 ENE was reported to be 26,184 against permanent PERSAL establishment of 28,359 resulting in a variance of 2,175 postsHereunder is the analysis of filled and vacant posts as per HRBP tool and PERSAL as at 30 September 2020:B. ANALYSIS OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

12. 12Goods and Services: The actual spending of R1,584 billion (45.48%) against the revised spending plan of R1,901 billion (54.56%) resulting in R317 million underspending due to provision made for accruals/payables on item Property Payments in the spending plan for the first two months of the 2020/21 financial yearInterest and Rent on Land: There was an expenditure of R124 thousand incurred against a zero budget mainly due to interest paid on arrears salary in KZN region Transfers and subsidies: The actual spending of R54 million (33.54%) against the revised spending plan of R75 million (46.00%) resulting in R20 million underspending as a result of lower than anticipated leave gratuities due to service terminations Payments for capital assets: The actual spending of R72 million (16.28%) against the revised spending plan of R245 million (55.60%) resulting in R173 million under spending was mainly on item: Buildings and Other Fixed Structures due to lockdown level 5 and poor performance of Capital Works ProgrammeB. ANALYSIS OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

13. 13B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020The actual spending of programme Rehabilitation is R890 million (44.27%) against the revised spending plan of R1,042 billion (51.85%) resulting in R152 million underspending as a result of the following: Compensation of Employees: The actual spending of R736 million (50.46%) against the revised spending plan of R792 million (54.36%) resulting in R57 million underspending due to the spending plan which has a COLA projection

14. 14B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020Compensation of Employees (cont): The Budget Committee resolved that Branch HR must clean up PERSAL so as to ensure a credible database for reconciliation with the HRBP tool. This process of aligning PERSAL to the HRBP Tool remains incomplete due to further cutting of posts which must be incorporated into this alignment. Therefore aligning PERSAL to HRBP tool is anticipated to be finalised by 30 September 2020. The permanent funded establishment as published in 2020 ENE was reported to be 2,163 against permanent PERSAL establishment of 2,555 resulting in a variance of 392 postsHereunder is the analysis of filled and vacant posts as per HRBP tool and PERSAL as 30 September2020:

15. 15B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020Goods and Services: The actual spending of R144 million (27.51%) against the revised spending plan of R238 million (45.44%) resulting in R94 million underspending on item Inventory: Farming Supplies due to less procurement of animal feed as well as on item Inventory: Clothing Materials and Accessories and Consumable Supplies The other contributing factor was on item: Inventory: Clothing Materials and Supplies as a result of orders for textile and toweling material that could not be placed early in the financial year due to the department awaiting for the finalisation of price adjustment process at National Treasury. However deliveries will mostly commence towards the end of 2nd quarter and beginning of third quarter, as testing of material by SABS still needs to be undertakenTransfers and subsidies: The actual spending of R4,504 million (6255.56%) against R49 thousand (68.06%) revised spending plan resulting in R4,455 million overspending as a result of payment of leave gratuities due to service terminations Payments for capital assets: The actual spending of R5,560 million (19.68%) against the revised spending plan of R11,520 million (40.77%) resulting in R5,960 million underspending on Machinery and Equipment as a result of delays in procurement of agricultural and workshop equipment

16. 16 The actual spending of programme Care is R1,249 billion (48.73%) against the revised spending plan of R1,194 billion (46.60%) resulting in an underspending of R54 million as a result of the following:Compensation of Employees: The actual spending of R516 million (52.43%) against the revised spending plan of R510 million (51.84%) resulting in R6 million overspendingB. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

17. 17Compensation of Employees (cont): The Budget Committee resolved that Branch HR must clean up PERSAL so as to ensure a credible database for reconciliation with the HRBP tool. ManCo will monitor progress on PERSAL clean up project. This process of aligning PERSAL to the HRBP Tool remains incomplete due to further cutting of posts which must be incorporated into this alignment. Therefore aligning PERSAL to HRBP tool is anticipated to be finalised by 30 September 2020. The permanent funded establishment as published in 2019 ENE was reported to be 1,778 against permanent PERSAL establishment of 2,055 resulting in a variance of 277 postsHereunder is the analysis of filled and vacant posts as per HRBP tool and PERSAL as at 30 September2020:B. SUMMARY OF THE PRELIMINARY NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

18. 18Goods and Services: The actual spending of R716 million (46.43%) against the revised spending plan of R681 million (44.18%) resulting in R35 million overspending mainly items: Cons Supplies, Inventory: Other Supplies and Inventory: Medical Supplies as a result of expenditure incurred due to COVID-19 for procurement of PPEs, mattresses and medical supplies for DCS members and inmatesTransfers and subsidies: The actual spending of R3,788 million and (823.48%) against the spending plan of R364 thousand (79.13%) resulting in R3,424 million overspending as a result of payment of leave gratuities due to service terminations higher than anticipated Payments for capital assets: The actual spending of R13,169 million (36.11%) against the spending plan of R2,563 million (7.03%) resulting in R10,606 million overspending as a result of procurement of kitchen appliances in Eastern cape for renovations that took place in St Albans Management Area as well as in Western Cape at Pollsmoor Management AreaB. ANALYSIS ON THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

19. 19The actual spending of programme Social Reintegration is R482 million (48.52%) against the revised spending plan of R534 million (53.77%) resulting in R52 million under spending as a result of the following:Compensation of Employees: The actual spending of R443 million (50.22%) against the revised spending plan of R481 million (54.48%) resulting in R37 million underspending was due to the spending plan which has a COLA projectionB. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

20. 20B. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020Compensation of Employees (cont): The Budget Committee resolved that Branch HR must clean up PERSAL so as to ensure a credible database for reconciliation with the HRBP tool. This process of aligning PERSAL to the HRBP Tool remains incomplete due to further cutting of posts which must be incorporated into this alignment. Therefore aligning PERSAL to HRBP tool is anticipated to be finalised by 30 September 2020. The permanent funded establishment as published in 2020 ENE was reported to be 1,955 against permanent PERSAL establishment of 2,243 resulting in a variance of 288 postsHereunder is the analysis of filled and vacant posts as per HRBP tool and PERSAL as at 30 September 2020

21. 21Goods and Services: The actual spending of R34 million (31.54%) against the revised spending plan of R52 million (47.96%) resulting in R18 million underspending due to outstanding invoices from DPW for Office Accommodation: Community Corrections for the month of August 2020 amounting to R3 million and on items: Fleet Services and Travel and Subsistence due to National Lockdown as a result of COVID-19Transfers and subsidies: The actual spending of R3,460 million (1587.16%) against R190 thousand (87.16%) revised spending plan resulting in R3,270 million overspending as result of payment of leave gratuities due to service terminations that are higher than the anticipatedPayments for capital assets: The actual spending of R813 thousand (43.71%) against the revised spending plan of R867 thousand (46.61%) resulting in R54 thousand underspending on other: Machinery and Equipment due to due to delays in payment for financial lease invoicesB. ANALYSIS OF THE NATIONAL STATE OF EXPENDITURE PER PROGRAMME FOR THE YEAR TO DATE : 30 SEPTEMBER 2020

22. 22C. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

23. 23C. SUMMARY OF THE NATIONAL STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

24. 24Compensation of Employees The actual spending of R8,725 billion (50.65%) against the revised spending plan of R9,126 billion (52.98%) resulting in an underspending of R401 million due to the spending plan which has a COLA projection. The budget for 2020/21 COLA has been cut during the 2020 AENEThe department enrolled 1 032 students in learnership programme in the previous financial year effective from 28 October 2019. These 1 032 learners were suppose to complete the learnership programme by end of October 2020 but due to suspension of experiential learning phase as a result of COVID-19, the completion date still needs to be reviewedThe National Commissioner approved 843 application of Early Retirement without penalisation of pension benefits in line with DPSA circular dated 25 February 2019. The estimated financial implications for 2019/20 was R225,738 million and in March 2019 invoices of R95,993 million and R104,637 million were paid over to GEPF. In this current financial year an estimated amount of R374,355 million will be paid over GEPFA virement of R374,355 million from Compensation of Employees to Transfers and Subsidies was approved by National Treasury on 7 September 2020 for early retirement without penalisation of pension benefits cases. This virement will form part of 2020 AENE OSD phase 2The department has not yet finalised implementing OSD as per DBC resolution of 1 of 2016 which was signed on the 21 November 2016 for 23% in lieu of salary back pay for service termination cases. It is estimated that an amount of R81,906 million will be paid for OSD phase2 C. ANALYSIS OF THE PRELIMINARY STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

25. 25Compensation of Employees (cont): The Budget Committee resolved that Branch HR must clean up PERSAL so as to ensure a credible database for reconciliation with the HRBP tool. This process of aligning PERSAL to the HRBP Tool remains incomplete due to further cutting of posts which must be incorporated into this alignment. Therefore aligning PERSAL to HRBP tool is anticipated to be finalised by 30 September 2020. The permanent funded establishment as published in 2020 ENE was reported to be 37,758 against permanent PERSAL establishment of 42,058 resulting in a variance of 4,300 postsHereunder is the analysis of filled and vacant posts as per HRBP tool and PERSAL as at 30 September 2020:PERSAL reported a funded permanent establishment of 42,058 of which 38,808 are funded filled posts, 2,849 posts are filled additional to the funded establishment, mostly on entry level, resulting in a total PERSAL head count of 41,657, but leaving 3,250 vacant funded posts (7.73%)C. ANALYSIS OF THE STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

26. 26Compensation of Employees – Projected Over ExpenditureCurrently the CoE is projected to overspend due to the payment of additional standard and special danger allowances; appointment of SANDF members; and additional payment of overtime above the 30% thresholdThe CoE projections, as at end October 2020, were reviewed and it is estimated that the CoE budget ceiling will be exceeded by R273,917 million The projections will be monthly reviewed so as to ensure that we down-manage the projected over expenditureWith the directive to stop effective 01 November 2020 the additional standard and special danger allowances the projections will be revised downC. ANALYSIS OF THE PRELIMINARY STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

27. 27Goods and Services: The actual spending of R2,886 billion (42.95%) against the revised spending plan of R3,612 billion (53.75%) resulting in an underspending of R726 million due to provision made for accruals/payables in the spending plan for the first two months of the 2020/21 financial year for items such as Property Payments, Food and Food Supplies, Consumable: Stationery, Printing and Office supplies Some of the payables were settled after the submission of the spending plan during March 2020Interest and Rent on Land: There was an expenditure of R950 thousand incurred against a zero budget mainly due to interest paid on arrears salary in Head Office under Programme AdministrationC. ANALYSIS OF THE STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

28. 28Transfers and Subsidies: The actual spending of R371,708 million (35.72%) against the revised spending plan of R331,973 million (31.90%) resulting in an overspending of R39,735 million as result of payment of leave gratuities due to service terminations that are higher than anticipatedPayments for Capital Assets: The actual spending of R112 million (12.19%) against the revised spending plan of R390 million (42.35%) resulting in an underspending of R278 million mainly on item: Buildings and Other Fixed Structures due to lockdown level 5 and poor performance of Capital Works Programme as well as under Transport Equipment due to delays in procurement of vehiclesC. ANALYSIS OF THE STATE OF EXPENDITURE PER ECONOMIC CLASSIFICATION FOR THE YEAR TO DATE: 30 SEPTEMBER 2020

29. 29D. SUMMARY OF THE DEPARTMENTAL REVENUE FOR THE YEAR TO DATE: 30 SEPTEMBER 2020The revenue estimated was revised down from R147,869 million to R144,959 due to Covid-19 lockdownIn 2020/21 financial year, the actual revenue for 30 September 2020 is R51 million (34.59%) against the estimated revenue collection of R56 million (37.62%) resulting in under collection of R4 million mainly on Fines, penalties and forfeits and interest, divided and rent on landThe department is mostly generating revenue from letting of accommodation facilities to personnel, selling of products made in correctional centres workshops and hiring out of offender labourThe offender labour also assist to supplement the budget for inmates’ gratuities. An amount of R623 thousand will additionally be allocated to offender gratuity, this amount is included in the AENE

30. 30E. COVID-19 SUMMARY COVID -19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020 Economic Classification:

31. 31E. COVID-19 SUMMARY COVID -19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020There is an actual spending of R225,508 million against the budget of R606,947 million. Up to 30 September 2020 there were 366 nurses appointed on contract in head office and regions. The non personnel expenditure is under Goods and Services for provision of PPEs, leasing of quarantine/isolation sites and medical supplies Economic Classification (Cont…):

32. 32E. COVID-19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020There was an expenditure of R67,973 million incurred mostly under Goods and Services on items Inventory: Other supplies and Consumable Supplies due to procurement of mattresses and also for provision of PPEs and leasing of quarantine/isolation sites

33. 33E. COVID -19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020There was an expenditure of R30,618 million was incurred due to Compensation of Employee for nurses and also for provision of PPEs and medical supplies

34. 34E. COVID -19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020 There was an expenditure of R27,520 million incurred under Compensation of Employees for nurses and also for provision of PPEs and medical supplies

35. 35E. COVID -19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020There was an expenditure of R16,746 million incurred under Compensation of Employees for nurses and also for provision of PPEs and medical supplies

36. 36E. COVID -19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020There was an expenditure of R34,147 million incurred under Compensation of Employees for nurses and also for provision of PPEs and medical supplies

37. 37E. COVID -19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020There was an expenditure of R32,184 million incurred under Compensation of Employees for nurses and also for provision of PPEs and medical supplies

38. 38E. COVID -19 REGIONAL STATE OF EXPENDITURE PER ITEM LEVEL 4 FOR THE YEAR TO DATE : 30 SEPTEMBER 2020There was an expenditure of R16,319 million incurred under Compensation of Employees for nurses and also for provision of PPEs and medical supplies

39. 39E. OVERVIEW ON COST CONTAINMENT MEASURES IMPLEMENTATIONThe department furthermore reviewed the cost containment financial circular no. 3 of 2017/18 with an Addendum no. 2 that provides sub-delegations for deviations and withdrawal of embargo on the procurement of machinery and equipment which was effective from 1 February 2019The impact of the cost containment measures and year on year savings on targeted expenditure items is attached as Annexure A

40. Thank YouTHANK YOUSTRIVING FOR A SOUTH AFRICA IN WHICH PEOPLE ARE AND FEEL SAFE