Justice Budget: input by Chief Financial Officer & Court Services

Meeting report

JUSTICE AND CONSTITUTIONAL DEVELOPMENT PORTFOLIO COMMITTEE
4 June 2003
JUSTICE BUDGET: INPUT BY CHIEF FINANCIAL OFFICER & COURT SERVICES

Chairperson: Adv J H de Lange

Relevant documents:
Summary per Programme per Standard Item for Virement and Audit Purposes 2002/03
MTEF Allocations: 2003/04 -2005/06: Annexure A
Department of Justice and Constitutional Development: Vote 23
Application for Write Off of Outstanding Balances Reflected in Various Accounts
Management of Monies in Trust: Discussion Document
Project Positioning in the Office of the CFO
Integrated Justice System
Presentation - High Courts (criminal courts)
Courts Services: Report

SUMMARY
The Committee continued with Budget Hearings. The Chief Financial Officer reviewed the 2002/2003 budget and the 2003/2004 budget. The Committee was concerned with over and under spending in the 2002/03 budget as well as with the Department's ability to move funds within and between programmes in the virement. The Department has received nearly R750 million additional funding for the 2003/04 budget. A large amount of the increase would be received by Court Services. The Committee requested that the Department envision an ideal Integrated Justice System so that such a system could be worked towards to increase government efficiency.

Court Services presented a picture of criminal cases in the High Courts, Regional Courts, and District Courts and the ability of each court to dispense of the caseload. The Committee believed that court hours, in general, should be longer. The Department explained the steps being taken to assist vulnerable groups in the courts.

MINUTES
Review of 2002/2003 Budget
The Chairperson requested that the Chief Financial Officer (CFO) of the Department of Justice review the Department's budget for the fiscal year that ended on 31 March 2003. He particularly wanted the CFO to note the areas in which under-spending had occurred.

Mr McKenzie, the CFO, explained that for the year, the Department over-spent by approximately R76,220 million. He warned that the number was not exact because it was the unaudited number.

The Chairperson asked if within the Department, there were any units or sections who under-spent.

The CFO answered that there were. He turned the Committee's attention to the document entitled "Summary per Programme per Standard Item for Virement and Audit Purposes 2002/03" (see document), which lists the amount of over and under spending per programme. The Office of the CFO, Information Systems Management (ISM) Division, and the Masters Office were among the programmes where under-spending occurred. Under-spending in the Masters Office was mostly a result of personnel as posts remained unfilled.

The Chairperson asked why the posts were not filled.

The CFO explained that the following programmes over-spent: court services, legal services, Office of the Minister, Office of the Deputy Minister, human resources, and the Public Education and Communication programme.

The Chairperson was perplexed by the column Virement, which was money that was designated for one programme but was moved, by the Department, to another programme. This undermines the point of allocating money in the budget. The Department can simply shift the funds as they see fit.

The CFO explained that the Department moved allocated money within the Department according to the guidelines in the PFMA. That arrangement allowed eight percent of the allocated money for one programme to be moved at the discretion of the Department. It also allowed the Department to move around funds within a programme.

The Chairperson asked about the R56 million of foreign aid received by the Department.

The CFO answered that the money, unlike money received from Treasury, did not have to be spent during the budget year. The Department would spend the money as needed.

The Chairperson asked about the document entitled, "Application for Write Off of Outstanding Balances Reflected in Various Accounts".

The CFO detailed the process the Department was going through in order to write off nearly R200 million in outstanding balance. The Department has until the end of June to finalise the plan to write off the money. Talks were ongoing with the Accountant General and Treasury. The major obstacle is that the Department does not have most of the documents because they were thrown away by past administrations. The Department must prove that it does not have the vouchers.

Mr Pikoli, the Director General, stated that the Department would get an affidavit.

The CFO explained that if the amount is written off, R200 million will be added to the over-expenditure, but the Department will be left with a clean bill.

With respect to the virement spending within the Department, the CFO stated that it was necessary in some cases. Court services would have further over-spent if it had not received reallocated money. The Department must do everything possible to avoid over or under spending.

The CFO explained that the increase Treasury has allotted the Department for court services in the current budget year would not suffice. Based on spending in April 2003, court services could overspend by R70 million in 2003/2004.

The Chairperson asked why the trust accounts have not been reconciled.

The CFO explained that the accounts have never been produced. The Department is rolling out a programme in which courts will be required to report all of their accounts. In August, this reporting will begin. The courts must comply. In two test runs, the feedback was 50% and 59%, respectively. The courts that have not replied, in general, are those that are problematic.

The Director General explained that when the process commences in August, a full picture of the financial problems will be available.

The Chairperson argued that the Department should fire someone if they do not send in the required information. The Department must not tolerate incompetence. The President has stated that incompetence would not be tolerated in government officials. If a few people get fired, others will comply with the orders of the Department. The Department should issue warnings, as specified in the labour relations act, and those that have failed to comply should be fired.

The Director General informed the Chairperson that warnings have been issued, but not in accordance with the labour relations act.

The Chairperson reiterated that some people may need to lose their jobs in order for the Department to function properly. He wanted to be informed of those that did not comply, come August, and whether or not they lost their jobs.

The CFO said that the people will be informed that their jobs are on the line. The courts must be accountable for their trust accounts.

The Director General wished to further explain over and under spending. The Department had an obligation to not over or under spend. If it did it was in violation of the PFMA. That is why the virement is essential.

The Chairperson could not see how the Department planned properly considering use of the virement. The figures should simply be corrected when the allocations are designated, making the virement obsolete.

The CFO answered that the units that received the virement money were under-funded, such as court services. These units must be paid for. The virement is the only way.

Mr S N Swart (ACDP) asked about the issue of the missing vouchers and the nearly R200 million that the Department wishes to write-off. He questioned if the money amounted to money that other people did not want to pay.

The CFO answered that it did.

Mr Swart asked how the Department plans to stop this in the future.

The CFO explained that this non-payment is no longer a problem. The problem is the previous administration's bill. Currently, when the state law advisor appoints an outside attorney to do work for another department, the Department of Justice pays for the work and is paid back by the Department. While the Department is now collecting this money, in the past the Department was not always reimbursed.

Imam G Solomon (ANC) was worried that if this R200 million is written off and reflected as vast over-spending, the Department would look bad. This could be misinterpreted in many ways and could pose a political problem.

The Chairperson asked if it was accurate to say that for the year 2001/2002, the Department under-spent by R60 million and that in the year 2002/2003 the Department over-spent by R76 million.

The CFO said that that characterisation was accurate. The R60 million in under-spending was given back to the Department for the following year, but only R17million of that was spent. The Department will have to reapply to receive that money again for this year.

The Chairperson mentioned a media-story from last year that stated that the Department of Justice was responsible for 50% of the unauthorised expenditure in South Africa. That is quite a distinction.

The CFO explained that this figure resulted from the Auditor General's report on the year 2000 budget. Great improvement has been made since that report. The CFO was seconded to the Department following the report. Since that time, the Department has shifted classifications in the vote account from disclaimer to qualifier. With regard to the trust account, the Department is still listed as a disclaimer. When the Department makes good the losses in the trust accounts, that designation will change as well.

The CFO informed the Committee that he had a meeting with the Auditor General and with SCOPA to expedite the appointment of transaction manager. He informed that the Auditor General agrees that the R200 million should be written-off, he just wants to see the problem with the trust accounts fully disclosed first.

The 2003/2004 Budget
The CFO referred to Annexure A (see document) in order to show the Committee the allocations for 2003/2004.

The Committee was informed that total budget for the upcoming year was close to R4,7 billion. The figure was arrived at by adding the baseline figure, the addition to the baseline (R330 million), inflation (R117 million) and a R198 million addition.

The Chairperson asked which programmes and units would benefit from the R330 million addition.

The CFO listed the following units as beneficiaries: the PPP cash management, forensic unit, the CFO's office, protection of vulnerable groups, the International Criminal Court, the improvement of court performance, the Masters Office, the Public Protector, the Human Rights Commission, and the Commission on Gender Equality. The additional money for inflation will be shared equally.

The Chairperson asked to whom the additional R198 million was designated.

The CFO responded that the following units would receive allocations from those funds: the Office of the CFO, the unit for increasing efficiency, psychiatric evaluation, the Masters Office, and implementation of legislation.

The Chairperson asked how the money for psychiatric evaluation was spent.

The CFO replied that the funding was insufficient. Whenever an accused person had to be evaluated, the Department was in no position to review the bill received. The CFO of the Department of Health has been contacted about the possibility of that Department reviewing the bills in exchange for payment.

The Chairperson stated that the Department must work in conjunction with the Department of Health to work out a mechanism for Health to assist the Department. Our prosecutors must have access to the necessary services. He asked Mr P du Rand to look at the problem and come up with a suitable solution.

The CFO suggested that the Department of Health should second a person to the Department to review the Bills. The Department would pay that person's salary.

Mr S Jiyane, Managing Director: Court Services, stated that the NPA believed the section of the CPA allowing them to request psychiatric evaluations was not able to be implemented.

The Chairperson requested that the Department do a full investigation and write a report with issues concerning psychiatric evaluations. All problems and solutions should be written out so that the Committee and the Director General could move forward on the issue.

The CFO reviewed the total allotment that each programme and unit is slated to receive in 2003/04. The Director General will receive R51 million. The Office of the CFO will receive R114 million. The PEC programme (Public Education and Communication) will receive R21 million. Information Systems Management (ISM) will receive R193 million. Human Resources is slated to receive R109 million. Legal Services will receive R120 million. R21 million will go towards the implementation of legislation. The Masters Office will receive R111 million. Court Services will receive R2,1 billion while the National Prosecuting Authority will receive close to R1,1 billion. Independent bodies will receive R500 million. Those bodies include the Public Protector, the Human Rights Commission, the Legal Aid Board, and the Commission for Gender Equality. The Legal Aid Board will receive R367 million of that total, plus inflation.

The Chairperson addressed the issue of the salary of judges. Since 1994, the salary of a judge has risen from R360 000 to R540 000. But a judge also has several other benefits. A judge receives a car. If a judge works for fifteen years, upon resignation the judge receives an R1,5 million gratuity, which is not taxed. Judges do not pay pension. After retirement, a judge continues to collect a salary. When a judge passes away, the spouse collects two-thirds of the judge's salary until death. The Chairperson ordered a report conducted to determine the actual salary of a judge.

The CFO believed that the Committee had received a report that compared a judge's pay with the pay that would be received in an equal job in the private sector. The report concluded that the pay was comparable.

The Chairperson marvelled that the Department was going to receive a three-quarters of a billion rand increase for this year.

The CFO believed that it would amount to the largest increase the Department has ever received. The figure is approximately R747 million accounting for roughly a 10 percent increase.

Adv M T Masutha (ANC) was impressed to hear of the increase. He questioned how the increase in funds would affect the case backlog and the Department's capacity to deliver. He also asked to what extent the Department has had to outsource various projects.

The Chairperson asked for a list of unfunded programmes.

The CFO answered that Treasury has processed with Treasury the mid-term allocations. The unfunded programmes were identified during the process. An updated version will be available within a few weeks.

Adv Masutha asked to what extent the footprint programme informed the distribution of the increased funding. For instance, it would be a waste of resources to provide more prosecutors without providing a proportional increase in the number of clerks.

The CFO answered that it has seriously impacted the funding. Extensive research has been conducted on the capacity of courts throughout South Africa. The research informs court services of the problem areas. Part of the research includes predicting crime into the future. The research received an award from the United States Justice Department as the best programme to improve government efficiency.

The Director General added in response to Adv Masutha that the operational plans will help the Department spend the increased funds wisely.

The Chairperson reminded the CFO to compile a list of programmes that are unfunded for the Committee to view during the budget vote. With reference to the projection of crime, the Chairperson warned that the Department should not necessarily jump to the conclusion that an increase in magistrates and prosecutors is the automatic answer for an area that will experience an increase in crime. In some instances, courts need to work harder and more efficiently to dispose of cases.

The Chairperson brought up the slated increase of 16 000 more policemen. This will lead to more cases and a need for more magistrates and prosecutors. Government does not presently engage in the proper co-operation to co-ordinate changes like this.

The Director General agreed that the proper co-operation does not yet take place. He informed the Chairperson that a Committee was being established to look at joint planning.

The Chairperson admitted that this is a difficult issue, since each department is set up to compete for its own budget. But the criminal justice system should be examined as a whole. Every department with an interest in criminal justice should meet in a city and examine the system closely in order to come up with viable solutions. Officials within the Department of Justice need to feed solutions to the Director General in order for the system to be improved. The Chairperson referenced an issue raised during the previous days meeting and stated that he would not deal with mediocrity at the regional office level. People must be held accountable. If work that is outsourced is not being completed properly, the Department should pull out of the contract.

The Chairperson asked for the R194 million allotment to Information Systems Management (IMS) to be explained.

The CFO related that IMS was an IT programme, aimed at providing fast DNS administration and an integrated Financial Administration System (FAS). Cost for personnel for this programme is small. Personnel come from the State Information Technology Agency (SITA). Most of the money is spent on equipment, such as computers.

The Director General added that the IMS was part of the Department's larger operational plan.

The Chairperson pointed out the need to examine the validity of the programme. The Committee should be questioning what the government will get out of the large investment in IMS. IMS has stated that they need another R1,25 billion to complete there work. The Committee needs to decide whether this is a good use of money. Courts visited by the Committee had unopened boxes of computers that no one could answer for. If this is what will come out of that vast expenditure, the Committee should think about cutting its losses now. Similar projects have collapsed in both Holland and Britain.

The CFO explained the document entitled Project Positioning in the Office of the CFO. The document tracks the thirty projects begun last year.

The Chairperson asked what discretion a court manager has in spending funds.

The CFO stated that the court manager may move funds around as he sees fit.

He explained that the project for budget training is well under way. A DVD is being produced by the Department. The script has been written and filming will begin next week in Kwazulu-Natal. The training film will be issued to all of the 52 court managers along with a training session. The process will be completed by the end of August with all court managers having been trained on how to utilise their budget.

The Director General added that this training will be important for those that have the responsibility of running the courts financially.

The Chairperson noted that along with the decentralisation of funding should come control from the Department.

The CFO explained that the Department was assuming the role of standard setter and overseer as the power of function resides with the court managers.

The Chairperson asked whether all courts have their own budget.

The CFO answered that they did, and should be able to answer questions regarding their own budget.

The CFO informed the Committee that the Department was in the process of re-engineering the payroll. Currently, cheques are paid from a multitude of computation centres. The Department will save money by centralising the cheque writing in Pretoria.

With regard to capacity building, the CFO explained that the Department has trained 55 trainers and 52 operations managers to help train 2 109 new employees. The first training programme was outsourced for R16 million, but the Department is now doing a similar session on its own. Vacancies are being filled, but the positions are hardest to fill at the lowest level.

The CFO stated, regarding trust account diversion, that an advisor has been appointed from Ernst & Young. The question examined will be the allocation of resources and how payment is received.

The Chairperson raised a solution to something he saw as a national problem. He suggested that the government set up an ATM system throughout the country for people to draw their pensions and other government funds. This system would help the poor immensely, as the cost of travel to receive government money often makes the collection of funds worthless. The government should do this as it would improve the lives of the poor immensely.

The CFO noted that the Department was looking into such a system but it would use the banking industries ATMs, rather than establish new, government ATMs.

Adv Masutha noted that in discussions concerning welfare, it has been suggested that payment of social grants could be handled by a parastatal organisation.

The Chairperson reiterated that this issue affects the poor. If the system is created through the current banking industry, then government will have to pay the banking fees. This, however, would be difficult to track.

The CFO advised that banks already have the infrastructure in place. In rural areas, the cost of receiving money from a bank is 10% of the cost of receiving money from the government.
The Chairperson argued that those statistics are true under the current system. But if the government institutes its own system of ATMs and issues cards similar to identification cards, the cost of receiving social grants will be nothing. This issue needs to be taken up in a broader discussion with various Director Generals.

The CFO characterised the Department's internal audit division as excellent.

The Chairperson stated that he was impressed with the direction in the Department. He thanked the CFO for his part in helping turn around the Department in the last three years. The system is now in place for the Department to move forward.

Court Services: Business Unit
The Chairperson asked Mr S Jiyane what he was doing with the R400 million.

Mr Jiyane delivered the unit's presentation, which largely focused on statistics of the criminal court system (see document).

The Chairperson stated that the 3h 32 min average court time for the High Court was "scandalous".

The Chairperson ordered the unit to compile figures for each individual judge and magistrate so that the Committee can see which ones are holding more court time. He also told the unit to list for every judge how many judgements are outstanding and how long the judgements have been outstanding for.

In terms of regional courts, Mr Jiyane explained that for the year, the courts finalised 6 000 fewer cases.

The Chairperson informed the Director General of the need to devise a formula for magistrates in district courts to count their total hours worked for both civil and criminal cases.

On page nine of the presentation, the Chairperson asked what happened to the 500 000 cases that are unaccounted for. He asked if the figure of 1 million new cases, actually meant new cases, or simply complaints. There is a difference between a crime being investigated and a new case. Only cases going to court should be characterised as a new case.

Mr Jiyane said that he would correct the figure for the Committee.

The average court hours (see slide 13) were listed per province. The Chairperson noted the low average in Free State. He was fascinated by the statistics.

Mr Jiyane pointed out the best and worst courts, noting that the list of worst courts has changed as some improved from the previous year.

The Chairperson brought up the idea of Integrated Justice Systems (IJS) that the Committee had witnessed on its most recent study tour and had been extremely impressed. He suggested that the system be implemented in the ten biggest cities across the country. He explained that the Committee witnessed such a system during a study tour to Port Elizabeth. Where there is a large concentration of courts, such as in Port Elizabeth, an IJS system is necessary so that there is one point of entry for each docket. A new case is given to two senior prosecutors who ascertain what investigation is to be conducted. The police then get the docket back and do the work. A senior police officer is responsible for ensuring that all court matters are dealt with properly. This senior police officer will make sure that the docket arrives back to the court in time for trial.

The Chairperson further suggested to the Director General that the system of court rolls is changed so as to separate the court cases handled by Legal Aid. The court to deal with the Legal Aid roll should be staffed for five to six hours of court time per day. This will be a more efficient way to deal with the cases since the public defender is already in court.

The IJS system is an effective centre that administers the case flow into the court. The system also interacts with the prisons. Representatives visit prisoners awaiting trial to ascertain whether the prisoners can pay bail or whether the prisoner wishes to plead guilty. The system expedites the entire process. Due to this system, Saturday courts are now held in Port Elizabeth.

The Chairperson further suggested that there should be a ghost role of three or four cases each day. Whichever court completes its own roll first will assume the ghost role.

These interventions should be taken up by the Department in co-operation with the police, when necessary.

The Chairperson stressed that the Judge Presidents should be at the centre of this change. They should be part of the process. He asked if all IJS centres would be the same as the one the Committee looked at in Port Elizabeth.

Mr Jiyane answered that the capacity would vary from province to province.

The Chairperson asked him to prepare a document with the Department's idea of an ideal IJS centre. This ideal could serve as a model so that implementation in the ten largest urban areas could commence.

Mr Jiyane notified the Committee that the problem is the co-ordination of data. This is one area in which the IMS system would improve greatly.

The Chairperson agreed that the collection of data was a big issue. The government should work harder towards centralising the data.

Mr Jiyane raised the issue of Saturday courts. He stressed that Saturday courts often lead to a reduction of regular court hours. There is a strong need to monitor the Saturday court system.

The Chairperson suggested that there should be a requirement stipulating that any court that holds session on a Saturday cannot sit unless they sit for four hours per day during the week, or some other amount of time determined to be fit by the Department. Personnel should not receive extra pay for working on Saturday when the work could have been done during the week.

The Committee discussed the process of improving the court system, especially case flow management. The Chairperson asked the Department to review every function, e.g., integrated case flow management, and give the Committee the best pilot project. The Committee could visit the best example of each project and then have a vision of the ideal IJS centre.

Mr Jiyane brought up the issue of court accessibility. The biggest portion of the budget goes to administration, so the possibility of a travelling court, e.g. small claims court, could be discussed.

The Chairperson agreed with the notion of a travelling small claims court. Before increasing the jurisdiction of a small claims court, however, the court must be found to be functioning properly. The attorneys could travel once a month to rural areas where courts are not otherwise easily accessible. This should be run as a pilot program first.

Mr Williams stated that a meeting was held with the Law Society of the Western Cape in which the Department was informed of an Act that regulated against such a travelling courtroom.

The Chairperson informed him to bring the said Act to the Committee so that it could be amended. Perhaps it could be passed as a Committee amendment to expedite the process.

Mr Jiyane stated that the Department requested the upper limit on small claims cases to be raised to R10 000. The Law Society insisted on R 5 000, even though the Bar had no problem. The figure of R7 000 was reached as a compromise.

The Chairperson stated that the Committee should consider raising the limit to R10 000 in the Act. He asked Mr Williams to inform the Law Society of the Committee's desires. Today, the sum of R10 000 is nothing. The Committee had to protect the interests of the poor in their dealings with lawyers. The poor should not be taken advantage of. The Department should spend the money necessary to alleviate the situation in small claims courts. He was confident that the Department would help the situation of the poor.

Vulnerable Groups
Ms Chohan-Kota asked if the addition of seventeen courts was all that would be done by the Department for the further protection of vulnerable groups.

The Chairperson asked what is meant by "additional courts". Was the R40 million designated for additional courts going to new physical courtrooms?

Mr Jiyane explained that there are plans for a fully integrated sexual offences court. The court has been blue printed. He stated that "additional courts" does not equate to new court rooms. The funding for these "additional courts" is separate from the funding designated for vulnerable groups. It is a separate issue.

The Chairperson stated the need for the Department to clarify the plan for assisting vulnerable groups. A much clearer vision is necessary so that work can be done towards the realisation of a plan. He asked if the vision included one sexual offences court in each court. He asked the Department to work out a clear plan that explains how the Department should go forward.

Adv Masutha asked if courts for vulnerable groups would simply consist of special courts for sexual and domestic issues, or if court accessibility for physical impairment would also be addressed.

Mr Jiyane stated that the plans for equality courts and sexual offences courts were two different plans.

The Chairperson suggested that the Department integrate them.

Ms Chohan-Kota requested a copy of the blue-prints for the sexual offences court.

Mr Jiyane informed her he would get the blue-print to the Committee. The blue-print contains information concerning the work that has been accomplished to date as well as the plan for the future.

The Chairperson stated that the Committee would review the capital works segment of the budget at the following meeting. He reminded the Department to detail an ideal integrated court and also to write an accompanying business plan.

The meeting was adjourned.