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BUDGET PRESENTATION TO THE SELECT COMMITTEE ON SOCIAL SERVICES

24 APRIL 2012

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PRESENTATION OUTLINE

1. Planning and Budgeting Process

2. Additional Funding request

3. DHA allocation over the MTEF period

4. Budget allocation: 2011/12 vs 2012/13

5. Budget allocation: Programmes

6. Budget allocation per Province

7. Estimates of National Expenditure

8. Challenges

9. Budget vs Expenditure 2009/10 – 2011/2012

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PLANNING AND BUDGETING PROCESS

The planning and budgeting process started with the development of the Strategic Plan which covers the three years of the Medium Term Expenditure Framework (MTEF).

The plans are then broken down into priorities for each of the three years, which is called Annual Performance Plan

Once the planning cycle is complete, that is when the budgeting process starts

The Budgeting process starts with a costing of the Key Performance Area of the Strategic and Annual Performance Plan (APP) on the following basis:

• Compensation of employees is calculated using the incremental budgeting approach (meaning it takes the compensation of the current year multiplied by the inflationary increase as determined by National Treasury) plus any additional staff needed to implement the APP

• Contractual obligations (e.g. leases) is calculated based on the escalation clause in the agreements

• Other operating costs (e.g. telephone) is also calculated on the incremental budgeting approach

• All other expenditure is calculated using zero based budgeting

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PLANNING AND BUDGETING PROCESS Once the costing is complete, the Department submits its budget request to National

Treasury for funding of its Plan. For the MTEF 2012/13 to 2014/15, the Department requested the following and the National Treasury Allocation was as follows:

NOTES

Re-prioritisation was done within the budget to ensure that all priorities included in the Strategic Plans are funded within the above allocation.

The R110-m has been allocated to DPW, however it is earmarked specifically to Home Affairs. In 2012/13 the allocated amount will be used to acquire office space at the maritime border facilities and for improvements at several border posts. For the remainder of the MTEF the amount will be used for the construction of residential space for employees and additional office space to replace the use of tents at the Lebombo, Beitbridge and Maseru Border Posts.

2012/13 2013/14 2014/15R'billion R'billion R'billion

MTEF Baseline allocation 5,249.7 5,864.3 6,064.4 Additional request (details included) 513.8 1,267.7 1,261.3 Required funds 5,763.4 7,131.9 7,325.7

Final Allocation from Treasury - VOTE 4 5,269.3 6,257.8 6,536.6 Allocation to DPW for Border Post Infrastructure 110.0 130.0 160.0

Requests not appropriated (384.2) (744.1) (629.1)

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ADDITIONAL REQUEST TO NT FOR THE MTEFDESCRIPTION OF SERVICES REQUIRED ADDITIONAL FUNDING 2012/13

R’000

2013/14

R’000

2014/15

R’000

Re-training of immigration and civic officials on security awareness 10 000 10 600 11 236

Security upgrade 30 000 5 000 5 000

Profiling Border Community Immigrants and strengthening Stakeholder Forum

20 000 10 600 11 236

Advance Passenger Processing System 143 000 148 550 154 380

Capacity improvement: 54 714 57 997 61 477

– Immigration Affairs (282 posts) 47 310 50 149 53 158

– Counter Corruption (19 posts) 7 404 7 848 8 319

Financial management improvement 35 000 37 100 39 326

Deportation 30 000 30 000 30 000

Building Project for new DHA Head Office – 5 000 10 000

DHA Modernisation (Previously known as WAIO) – 518 138 450 000

SUB TOTAL OF BUDGET PROCESS REQUEST VOTE 4 322 714 822 985 772 655

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DESCRIPTION OF PROJECTS 2012/13

R’000

2013/14

R’000

2014/15

R’000

Create capacity for effective and efficient Maritime Ports and Border Management

22 579 16 200 20 200

Implementation of a new model for effective and efficient Refugee Status Determination

28 000 22 000 13 000

Relocation of Refugee Reception Offices towards the Borderline 0 80 000 100 000

Law Enforcement, Monitoring and Compliance - Improve systems records, turn rail stations into proper ports of entry, improve tracing and analysis functions, porous borderline (informal crossings)

100 479 136 479 156 479

Recruitment and training of new Immigration Officers (expansion of OR Tambo pilot)

40 000 50 000 55 000

Rollout of Smart Card

0 140 000 144 000

SUB TOTAL OF POST RETREAT REQUEST 191 058 444 679 488 679

TOTAL ADDITIONAL FUNDS REQUESTED FOR VOTE 4 513 772 1 267 664 1 261 334

ADDITIONAL REQUEST TO NT FOR THE MTEF (cont…)

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DHA BUDGET 2012/13 to 2014/15 2011/12 2012/13 2013/14 2014/15R'billion R'billion R'billion R'billion

Administration 1,897.9 1,674.1 1,766.8 1,933.6 Civic Services (incl Provinces and Public entities) 3,374.2 3,067.8 3,894.6 3,975.1 Immigration Services 578.8 554.4 596.5 627.9 TOTAL 5,850.8 5,296.3 6,257.8 6,536.6

Change in Rand-value (554.5) 961.56 278.79 Change in % -10% 15% 4%NOTES

The major contributors to the decrease from 2011/12 to 2012/13 relates to once-off funding from National Treasury to cover the shortfall in the production cost of passports (R327 Million as well as the R234 million decrease in IT Modernisation (previously known as WAIO) budget. Only R314 million has been allocated for IT Modernisation as against the R548 million previously allocated.

No funding allocated for passports as a Trading Account has been established for all passport related revenue and expenditure in line with the National Treasury recommendation.

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DHA BUDGET 2012/13 to 2014/15ECONOMIC CLASSIFICATION

NotesThe compensation of employees budget is calculated on total of 10, 775 funded posts.

The department is re-prioritsing its budget to ensure that sea and air ports of entry are adequately capacitated.

2011/12 2012/13 2013/14 2014/15R'billion R'billion R'billion R'billion

Compensation of employees 2,225.6 2,363.9 2,495.2 2,646.6 Goods and Services 2,573.2 1,915.5 2,084.3 2,264.9 Total Current 4,798.8 4,279.3 4,579.5 4,911.5

Municipalities 1.2 1.3 1.4 1.4 Public Entities 1,034.3 960.8 1,665.0 1,611.4 Households 1.5 1.5 1.5 1.6 Total Transfers and Subsidies 1,037.0 963.6 1,667.9 1,614.5

Machinery and Equipment 11.9 0.4 10.5 10.6 Software and Intangible Assets 3.1 - - Total Payment for capital assets 15.0 0.4 10.5 10.6

Payment for financial assets - 53.0 - -

TOTAL 5,850.8 5,296.3 6,257.8 6,536.6

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BUDGET ALLOCATION: 2011/12 vs 2012/13

ALLOCATED BUDGET 2011/12

R’000

2012/13

R’000

BASELINE AMOUNT 5 464 134 5 296 269

LESS EARMARKED FUNDS (1 541 650) (1 275 681)

Public Entities Allocation (993 650) (960 819)

IT MODERNISATION (previously known as WAIO) (548 000) (314 862)

DHA OPERATIONAL BUDGET 3 922 484 4 020 588

UNAUTHORISED EXPENDITURE OF 2005/06 (The 2012/13 budget should be cut to make provision for this expenditure)

Total unauthorised expenditure approved without funding is R99,883 million, but R53 million will come out of future allocations.

(53 003)

AVAILABLE FOR DHA 3 967 585

Border post infrastructure (allocated to the DPW vote) 110 000

NET ALLOCATION 4 077 585

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BUDGET : 2012/13 – PER PROGRAMME

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BUDGET : 2012/13 – ALLOCATION PER PROVINCE

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ESTIMATE OF NATIONAL EXPENDITURE 2012/13

IT Modernisation has been budgeted under Transversal IT Projects (R314,862,000)Over the MTEF, the following projects will be completed: live capture functionality for identity documents and passports, the cleaning of the national population register; core systems integration of civics and immigration; the visa and permitting system, the rollout of the movement control system to 30 remaining ports of entry.

2012/13 ESTIMATE OF NATIONAL EXPENDITURE ALLOCATIONADMINISTRATIONMINISTRY 17,284 23,443 – 40,727 – – – – – 40,727

MANAGEMENT SUPPORT SERVICES 51,427 46,363 – 97,790 – 594 594 – – 98,384

CORPORATE SERVICES 232,095 266,015 – 498,110 625 485 1,110 60 53,003 552,283

COMMUNICATION SERVICES 10 17,400 18,398 – 35,798 – – – – – 35,798

COUNTER CORRUPTION&SECURITY 10 46,379 110,323 – 156,702 – – – – – 156,702

HUMAN RESOURCES SUPPORT 82,913 31,397 – 114,310 – – – 60 – 114,370

LEARNING ACADEMY 14,915 16,731 – 31,646 – – – – – 31,646

FINANCIAL ADMINISTRATION 70,488 89,166 – 159,654 625 485 1,110 – 53,003 213,767

GOVERNMENT MOTOR TRANSPORT – – – – – – – – – –

TRANSVERSAL IT MANAGEMENT 44,429 598,781 – 643,210 – 93 93 – – 643,303

OFFICE ACCOMMODATION – 339,105 – 339,105 – – – 305 – 339,410

ADMINISTRATION TOTAL 345,235 1,273,707 – 1,618,942 625 1,172 1,797 365 53,003 1,674,107

TOTAL PAYMENT

FOR CAPITAL ASSETS

COMPENSA-TION OF

EMPLOYEES

GOODS AND SERVICES

INTEREST AND RENT ON

LAND

TOTAL CURRENT

MUNICI-PALITIES

GRAND TOTAL 2012/13

RESPONSIBILITY

CURRENT TRANSFERS AND SUBSIDIES

PAYMENT FOR

FINANCIAL ASSETS

HOUSE-HOLDS

TOTAL TRANS-FERS &

SUBSIDIES

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ESTIMATE OF NATIONAL EXPENDITURE 2012/13

CIVIC AFFAIRS 461,531

CIVIC AFFAIRS MANAGEMENT 10,556 22,284 32,840 – – 32,840

STATUS SERVICES 10 73,323 12,239 85,562 – – 85,562

IDENTIFICATION SERVICES 107,020 134,854 241,874 – – 241,874

ACCESS TO SERVICES 40,895 59,720 100,615 – 640 101,255

SERVICE DELIVERY BY PROVINCES 1,506,418 139,041 1,645,459 – – 1,645,459

EASTERN CAPE 193,841 23,451 217,292 – – 217,292

FREE STATE 121,032 9,187 130,219 – – 130,219

GAUTENG 339,076 25,786 364,862 – – 364,862

KWAZULU-NATAL 174,560 14,891 189,451 – – 189,451

LIMPOPO 191,863 17,911 209,774 – – 209,774

MPUMALANGA 142,261 13,613 155,874 – – 155,874

NORTH WEST 130,087 14,539 144,626 – – 144,626

NORTHERN CAPE 71,278 8,550 79,828 – – 79,828

WESTERN CAPE 142,420 11,113 153,533 – – 153,533

FILM AND PUBLICATION BOARD 10 – – – 69,372 69,372 69,372

GOVERNMENT PRINTING WORKS 10 – – – 135,219 135,219 135,219

ELECTORAL COMMISSION 10 – – – 756,228 756,228 756,228

CIVIC AFFAIRS TOTAL 1,738,212 368,138 2,106,350 – 640 2,106,990

COMPENSA-TION OF

EMPLOYEES

GOODS AND SERVICES

TOTAL CURRENT

GRAND TOTAL 2012/13

RESPONSIBILITY

CURRENTTRANSFERS AND

SUBSIDIES

DEPART-MENTAL

AGENCIES

TOTAL TRANS-FERS &

SUBSIDIES

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ESTIMATE OF NATIONAL EXPENDITURE 2012/13

IMMIGRATION AFFAIRS – – – – – – –

IMMIGRATION AFFAIRS MANAGEMENT 10,942 20,389 31,331 – 296 296 31,627

ADMISSION SERVICES 118,502 56,997 175,499 – – – 175,499

IMMIGRATION SERVICES 131,463 156,875 288,338 – – – 288,338

ASYLUM SEEKERS 19,537 39,352 58,889 – – – 58,889

IMMIGRATION AFFAIRS TOTAL 280,444 273,613 554,057 – 296 296 554,353

COMPENSA-TION OF

EMPLOYEES

GOODS AND SERVICES

TOTAL CURRENT

GRAND TOTAL 2012/13

RESPONSIBILITY

CURRENT TRANSFERS AND SUBSIDIES

DEPART-MENTAL

AGENCIES

HOUSE-HOLDS

TOTAL TRANS-FERS &

SUBSIDIES

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CHALLENGES Insufficient funding for Advanced Passenger Processing

system (only R50-m allocated) The implementation of the Border Post Infrastructure is in

conjunction with DPW. It is not solely in the hands of the DHA

Inadequate capacity within sea and air ports of entry Financial management capacity both skills and human

resources

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BUDGET vs. EXPENDITURE 2009/10-2011/12

Notes for 2011/12 • Included in the savings is earmarked funds of R46 million for the printing of passports. • A request to roll over R53 million will be submitted to National Treasury to fund the unauthorised

expenditure relating to 2005/06 financial year approved without funding.• Therefore the preliminary saving is R54,503 million

Programme

2009/10 2010/11 2011/12

Budget Expenditure(Over)/ Under-

spendingBudget Expenditure

(Over)/ Under-

spendingBudget

Preliminary Expenditure

as at 31/03/2012

(Over)/ Under-

spending

  R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000

Administration 1,515,145

1,498,687 16,458 1,516,111 1,692,261 (176,150) 1,995,984 1,937,897 58,087

Citizen Affairs 1,382,559 1,383,104 (545) 1,535,123 1,793,479 (258,356) 3,202,059 3,128,761 73,298

Immigration Affairs

1,054,228 1,001,766 52,462 1,191,801 1,444,599 (252,798) 652,771 630,653 22, 218

Transfers to Agencies

1,311,852 1,311,852 – 1,591,355 1,591,355 – – – –

Total 5,263,784

5,195,409 68,375 5,834,390 6,521,694 (687,304) 5,850,814 5,697,311 153,503

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THANK YOU