third party funds reforms and enhancements. manage maintenance beneficiary monies (local and...
TRANSCRIPT
•Manage maintenance beneficiary monies (local and foreign),
•Collect fines on behalf of government institutions (national, provincial, local and other authorities),
•The safe-keeping of bail monies on behalf of depositors,
•The safe-keeping of payments into court, and
•The collection of debts on behalf of government institutions through the State Attorney and deeds transfers on behalf of government.
Introduction: The purpose of TPF
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These transactions are recorded on JDAS4 or SAS which are mainly administration
systems with the main objective of delivering a service to the public.
As JDAS and SAS are case management systems it does not have sufficient
financial capabilities and internal controls to allow for proper accounting principles in
accordance with the Public Finance Management Act (PFMA) on TPF.
The administration part of the systems allow for capturing of case details of
parties, court orders, etcetera while the current financial part of the systems allows
for the recording of receipts, payments and provide for reports on these receipts
and payments, although no reliable consolidated reporting functionality is available
on JDAS or SAS.
Administrative arrangements
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The Third Party Funds Portfolio: Receipts
Module 2010 2011
Maintenance 1,681,087,876 1,774,765,283
Bail 326,109,875 349,443,717
Fines 398,127,028 377,539,712
Payments into Court 7,398,739 5,445,513
Unclassified Money 542,772,991 175,840,046
Deeds 46,571,749 128,670,533
Litigation 96,022,523 58,424,954
Commission 248,407 273,962
Total 3,098,339,188 2,870,403,720
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The Third Party Funds Portfolio: Receipts – Proportional Allocations per Module
Maintenance1,774,765,283
62%
Bail349,443,717
12%
Fines377,539,712
13%Payments into Court5,445,513
0%Unclassified Money
175,840,0466%
Deeds128,670,533
5%
Litigation58,424,954
2%Commission
273,9620%
The Challenge : Unclassified Receipts6
The Third Party Funds Portfolio: Regional Receipts
Province 2008 2009 2010 2011 2012
Eastern Cape 200,361,769 365,760,719 400,937,782 350,312,326 409,026,788
Free State 75,784,196 163,462,629 187,187,987 210,375,068 220,656,713
Gauteng 144,172,606 557,915,985 527,958,174 451,466,488 462,192,649
KwaZulu-Natal 196,585,486 396,649,663 429,047,412 460,802,478 488,061,159
Limpopo 270,193,782 384,906,162 361,497,758 375,086,436 387,161,657
Mpumalanga 143,636,388 224,721,696 228,008,426 234,606,030 241,005,439
North West 248,126,305 246,438,663 256,011,717 262,625,908 291,597,868
Northern Cape 57,239,115 67,311,844 72,895,436 78,338,550 88,918,304
Western Cape 128,351,621 286,895,665 273,912,818 288,520,577 303,025,527
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The Third Party Funds Portfolio: Receipts – Proportional allocation per Region
Eastern Cape409,026,788
14%
Free State220,656,713
8%
Gauteng462,192,649
16%
KwaZulu-Natal488,061,159
17%
Limpopo387,161,657
13%
Mpumalanga241,005,439
8%
North West291,597,868
10%
Northern Cape88,918,304
3%
Western Cape303,025,527
11%
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The Third Party Funds Portfolio: Cash Payments
Module 2010 2011
Maintenance 1,687,140,651 1,775,076,540
Bail 289,074,180 311,249,640
Fines 205,421,212 219,319,455
Payments into Court 10,295,781 7,351,926
Unclassified Money 233,873,432 167,446,451
Deeds 43,344,838 129,279,260
Litigation 80,916,327 44,615,385
Payments into Vote Account 218,607,112 225,408,969
Total 2,768,673,533 2,879,747,626
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The Third Party Funds Portfolio: Payments into National Revenue Fund
2010 2011
Maintenance 231,407 176,474
Bail 20,765,106 25,504,673
Fines 184,268,134 189,322,118
Unclassified Money 13,094,058 10,131,742
Commission 248,407 273,962
Total 218,607,112 225,408,969
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The Third Party Funds Portfolio: Cumulative Shortages
2010 2011
Dishonoured Cheques 12,580,550 12,512,769
Maintenance Debtor 3,340,178 3,986,740
Shortage 63,703,027 63,405,253
Total 79,623,755 79,904,762
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PwC
Elements of the AFS Project
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AFS Validation
2. Codification2. Codification 3. Queries3. Queries
5. SQL Scripts5. SQL Scripts
6. SQL Packages
6. SQL Packages
4. Format of the AFS
4. Format of the AFS
9. Courier Services
9. Courier Services
7. Printing and Binding Services
7. Printing and Binding Services
8. Quality Control of AFS
pack
8. Quality Control of AFS
pack11. Additional
Software11. Additional
Software
12. Project Alignment / Education
12. Project Alignment / Education
13. Communicatio
n
13. Communicatio
n
15. Validation Process
15. Validation Process
• JDAS Data• Bank Statements
• SAS Data
• SQL Developers Licenses
• CASEWARE
10. Additional Hardware
10. Additional Hardware
1. Data1. Data
The Third Party FundsStatement of Financial Position – Balance Sheet
2010 2011
ASSETS
Current Assets
Receivables 79 623 755 79 904 762
Cash and Cash equivalents 659 380 913 618 322 368
739 004 668 698 227 130
LIABILITIES
Current Liabilities
Third Party fund payables 739 004 668 698 227 130739 004 668 698 227 130
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We are not alone – International (HM) Experience
The courts service risks losing around £1.4 billion in uncollected fines and other financial penalties by not being able to properly account for them, according to the National Audit Office, which laid part of the blame with the beleaguered £444 million Libra system.
In a report to parliament, NAO auditor general Amyas Morse said HM Courts Service has been "unable to provide proper accounting records supporting fines, confiscation orders and penalties". This meant he "could not give an audit opinion on whether transactions and balances were complete, proper and appropriately raised".
Morse said: "Because of limitations in the underlying systems, HM Courts Service has not been able to provide me with proper accounting records relating to the collection of fines, confiscation orders and penalties. I have therefore disclaimed my audit opinion on its accounts
December 2011
”
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Service delivery enhancement through decentralized EFT payment channel Launched in Worcester – August 2010
Reduced turn around time – payment with 24/48 hours after
identification has been concluded
Management oversight and control
Full audit trial
Segregation of duties
Actual number of courts rolled-out : 103
Number of beneficiaries paid through this system; 89 287 paid in April
2012
Planned roll-out to further sites: 100 courts in 2012/13
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EFT Payments - Maintenance
Region Amount Beneficiaries Paid Amount Beneficiaries Paid
EC 8,664,013 13,430 11,590,167 20,534
FS 648,873 1,199 7,584,596 13,900
GP 6,748,344 10,161 9,064,961 13,584
KZN 8,254,222 13,284 8,888,830 14,131
LIM 4,443,161 6,294 15,792,801 26,078
MPU 4,090,434 6,443 5,203,627 8,675
NC 1,347,414 2,212 446,970 708
NW 15,592,494 23,318 722,095 1,349
WC 7,090,022 12,946 3,830,592 8,331
TOTAL 56,878,977 89,287 63,124,639 107,290
AVERAGE R 637.04 588.36
Decentralised - Courts Centralised - National Office
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EFT Payments – Proportional Utilization of Decentralized EFT
8,66
4,01
3
648,
873 6,74
8,34
4
8,25
4,22
2
4,44
3,16
1
4,09
0,43
4 1,34
7,41
4
15,5
92,4
94
7,09
0,02
2
11,5
90,1
67
7,58
4,59
6
9,06
4,96
1
8,88
8,83
0
15,7
92,8
01
5,20
3,62
7
446,
970
722,
095
3,83
0,59
2
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
EC FS GP KZN LIM MPU NC NW WC
Over 90 % of payments in the North West is directly in beneficiary bank accounts
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Region Court Payments Beneficiaries
EC Mthatha R 2,207,743.34 3337
GP Pretoria R 1,574,380.59 2072
LIM Giyani R 1,433,082.52 2065
EC New Brighton R 867,773.78 1908
LIM Vuwani R 941,832.41 1687
EC Ngqeleni R 257,480.83 1646
LIM Seshego R 1,240,246.50 1642
LIM Mankweng R 906,817.51 1510
LIM Malamulele R 786,382.72 1448
GP Tembisa R 837,188.22 1422
FS Botshabelo R 721,951.80 1385
EFT Decentralization – 2012 Priority Courts
Region Court Payments Beneficiaries
LIM Mokerong R 760,215.15 1345
MPU Ntsikazi R 678,915.29 1330
KZN Durban R 944,257.40 1301
FS Thaba Nchu R 770,320.83 1250
FS Kroonstad R 711,767.75 1237
FS Bethlehem R 665,478.93 1211
LIM Thabamoopo R 809,813.21 1157
LIM Mhala R 692,319.65 1134
KZN Umbumbulu R 663,411.64 1112
LIM Mutale R 522,876.00 1095
GP Mamelodi R 644,990.82 1087
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The TPF
Challenge
TransactionVolumes
477 JDAS
Databases
Expected Shortages
Cash Collections/Payments
Unreferenced deposits
Theft And
corruption
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The TPF Roadmap for Enhanced Management of TPF …. Effecting the Change
Business Case
Baseline Financial Reporting
Capicitation
Business Process Review
Legislative Review
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Targeted outputs and defined outcomes
Accountability
Transparency
Enhanced delivery
of TPF
Services
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Conclusion of Compressive Business Case • Option 1:Maintenance of the status-quo• Option 2: Outsourcing through a PPP• Option 3: Enhanced Public Sector Managed TPF
Selection: Option3 – Based on affordability and Employment consideration
Communication of selection to stakeholders ( Executive Authority, Parliamentary Committees and NT)
Considerations: Value for Money, Affordability and Risk
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Finalised a reporting framework for TPF
Annual Financial Statements 2009/10 -2010/11 - 474 Courts - 12 Corporate Accounts - 11 State Attorney Offices (Accounts) - 27 Million Transactions - Consolidation - Submission to AG for Audit
Interim Financial Statements – 2011/12 - All Accounts as above as at 30 November 2011 - Submission for Internal Review – 31 March 2012
Annual Financial Statements – 2011/12 - 30 June 2012
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Personnel training - Comprehensive training manuals developed - Level 1 Training: 41 Senior Financial Practitioners and Senior Managers - Level 2 Training: 116 Area Court Managers, Directors: Court Operations,
National and Regional TPF staff and Financial Operations Managers trained by SAIPA accredited accountants
Personnel Appointments - Funding secured for 45 finance practitioners at middle management and technical level - 25 contract appointments concluded whilst remainder advertised - 2 database administrators and 8 quality assurance and
technical personnel appointed on six months contracts
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Revised and Standardized Business Process - Concluded a review linking audit trails, daily reconciliations and operational performance - TPF processes standardized and process mapped - Financial operations managers and Area Court managers orientated on the standardized operating procedures Next Steps: Training all court managers and checking officers on standardized operating procedures New Payment Channel - Introduced decentralized EFT payment system at courts with reduced cycle times - Full audit trial and segregation of duty (key requirement) -Reduction of payment time from10 days to within 24 and 48 hours after beneficiary has been identified
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Possible Legislative amendments to be considered
- Amendments to Maintenance Act in relation to direct beneficiary payments
- Amendment of Criminal Procedure Act to redirect local authority admission of guilt fines to Municipalities
- Investigate options to amend legislation for refunding of bail (Electronic refund of bail)
- Legislation Governing TPF