Legal Aid South Africa reported that the projected shortfall for 2017/18 is estimated to be R71.5 million. In addition, the actual budget cut for 2018/19 is R92.8 million, making a cumulative budget shortfall of R164.3 million for 2018/19. There were 2 863 employees in 2016/17 and 2 753 in 2017/18. The 2 753 employees were reduced by 10 employees, and a further 97 employees are expected to be retrenched during 2018/19. The percentage of employees reduced over the last few years is 7%. The budget cut received by the National Treasury MTEF grant allocation is R164 million, which an 8.8% budget cut. Much of the budget is spent on salaries because of the labour intensive nature of its mandate.
Legal Aid SA is concerned about the increasing job losses, as the reduction in legal aid services infringe on the rights of South Africans, as stated in Sections 34, 35(3) and 28 of the Constitution. Other decreases in expenditure are due to the once off rollover funds for impact litigation which were included in the 2017/18 budget. The Internal Audit department has considered reducing face to face audits as a means to save costs, however this can affect the organisation negatively due to the negative impact on the assessment of the control environment, as the assessment is not only transaction oriented but also entails direct observation for the application of controls, management’s attitude and operating style.
The Chairperson asked if Legal SA has had any communication with the Department of Rural Development and Land Reform to provide lawyers in the rural areas for land claim cases. The Committee asked about the retrenchment process; which skills would be lost; usage of pro-bono work; effect of salary reductions and the courts’ use of mainly English and Afrikaans languages.
The Chairperson said Legal Aid South Africa is an autonomous Board, which was set up by former President Nelson Mandela to serve the poor. If Legal Aid is thought not to be delivering on its mandate, then it would mean government has failed in carrying on the vision of the former President. He noted that Judge President Dunstan Mlambo – chairperson of Legal Aid SA - has communicated to the Committee that he has a formula that could be applied to speed up the procedures involved in land claims, however government has not given him the opportunity to present the formula. The Chairperson thought it would be advisable for the Committee to make use of his expertise and allow the Judge President to present the formula. The Committee has not received any credible explanations from the Department why the Land Claims courts do not have permanent judges. The Department of Rural Development and Land Reform has made funds available to pay lawyers residing in the rural areas to handle the land claims cases.
Legal Aid South Africa on its Annual Performance Plan
Mr Motsamai Makume, Deputy Chairperson: Legal Aid SA, said the presentation will explain how the recent budget cuts affected both service delivery and the internal performance of the organisation. Due to the budget cuts Legal Aid has started a retrenchment process – as it found it necessary to cut down on some of its positions. Also, salaries of most of the employees had to be reduced for it to be able to operate within its budget. Legal Aid’s budget decreases every year and there is a great concern that this will affect the organisation’s strategic risks over the 2015-2020 years.
Ms Vidhu Vedalankar, Chief Executive Officer: Legal Aid LA, said the projected shortfall for 2017/18 is estimated to be R71 504 989. In addition, the actual budget cut for 2018/19 is R92 807 000, making the total budget cut of R164 311 989 for 2018/19.
For the past few years the average target for criminal legal services in District Courts was 83%, while the average target for Regional Courts was 93%. In the Higher Courts all legal aid matters covered have seen a budget cut, this has resulted in a revision of targets, as well as for District and Regional Courts. For civil legal services, the target was 46 000 civil matters in 2018/19 but the budget cut resulted in a reduction of 2 750 civil matters, which brought the new target to 42 750. In 2016/17 the total number of employees was 2 863, in 2017/18 there were 2 753 - which was reduced by 10 employees, and in 2018/19 there are 2 656 employees - which will further be reduced by 97 more employees. The percentage reduction in the number of employees over the last few years is 7%.
Mr Jerry Makokoane, Chief Operating Officer: Legal Aid SA, said the total budget cut from National Treasury in the MTEF Grant Allocation letter received by the organisation is a reduction of the organisations’ budget by R164 million in 2018/19, which is an 8.8% budget cut. This budget cut increases to a projected R180.7 million (8.9%) in 2019/20 and to R221.2 million (10%) cuts in the outer years. Eighty percent of the budget is spent on salaries because of the labour intensive nature of the mandate to provide legal services.
Legal Aid SA has carefully considered the cumulative budget cut of R164 million for 2018/19 and its impact on the business of the organisation and agreed that the budget cuts are unworkable. The main reason is that the cuts will result in high levels of staff reduction and a consequential decrease in service delivery. Also of concern to Legal Aid SA are the impending job losses. Legal Aid SA noted its major concern with the reduction in legal aid services as the infringement of the rights of South Africans as enshrined in Section 34, 35(3) and 28 of the Constitution. This could potentially open the organisation and the state to legal challenges in the future.
In 2017/18 Legal Aid SA reprioritised the budget to reduce expenditure to meet the budget shortfall, which resulted from National Treasury requiring government entities and departments to fund the difference between wage settlements and Treasury’s macro increases to the grant of R45 million. This was to be done by reducing expenditure on performance incentive bonuses, reducing the Judicare budget and reducing the operating budget, containing the capital budget by extending the life cycle of assets, including computers and vehicles, beyond their normal timelines of productive use and reducing the salaries budget.
The variances in salaries for 2018/19 were due to a reduction of staff performance bonuses by R21 million and a reduction of salaries budget by R43.8 million by cutting 97 staff posts. Other direct expenditure decreased by 14.8% in 2018/19 compared to 2017/18. This reduction is due to the once off rollover funds for impact litigation included in the 2017/18 budget but not in the 2018/19 budget.
The Internal Audit department is contemplating reducing the level of face to face audits at the organisation’s offices by doing more desktop audits and only visiting offices to conduct physical verification of assets and head counting to cut travelling and accommodation costs. This approach will have a negative impact on the assessment of the control environment, as the assessment is not only transaction orientated but also entails direct observation of application of controls, management’s attitude and operating style. As source documents are kept at offices, inspecting electronic instead of original documents poses audit risks. On the other hand, moving original documents to national office for auditing poses risks for losing documents in-transit and delays in executing audits.
Mr Patrick Hundermark, Chief Legal Executive, said the information they received from the Chief Land Claims Commissioner indicates that current legal aid regulations exclude assistance with claim lodgment and investigation which may have to be amended. The Land Rights Management Facility (LRMF) means test is similar to the Legal Aid SA means test. The information on the current LRMF tariffs are used to remunerate practitioners has not been made available to them and no information was provided on the 325 land restitution matters before the Land Claims Court. There are 164 000 claims that were lodged in the period July 2014 to July 2016.
The Chairperson asked if Legal SA has had any communication with the Department of Rural Development and Land Reform to provide lawyers in the rural areas for land claim cases. Before the Legal Aid SA chairperson steps down, the Committee must use this opportunity to assist instead of playing political games and game blaming.
Ms M Mothapo (ANC) said budget constraints defeat the Legal Aid mandate in assisting poor people, especially those living in the rural areas. The budget cuts have also caused a backlog in legal cases.
Mr M Maila (ANC) said the perception that the legal system only favours the wealthy minority is owing to government’s own wrong-doings within Treasury. The budget constraints have affected not only the poor people who rely on the services of Legal Aid, but the staff as well. He asked what criteria it used to determine which positions should be cut from operations.
Mr G Skosana (ANC) said Legal Aid SA has done everything possible to operate within the budget cuts. Salary reductions are not an easy decision to make unless one is really under pressure because it affects staff morale.
Mr S Swart (ACDP) said state capture has effected the budget cuts, therefore it is imperative that the Committee has a joint meeting with the Finance and Appropriations Committees to amend the budget within the fiscal framework. In the light of the budget cuts, he asked if Legal Aid SA was able to incorporate pro-bono work, and as a short-term solution the money that Legal Aid SA collects from civil cases it wins should be allocated back to it to assist with meeting its mandate.
Mr W Horn (DA) asked at which level did the staff reduction take place, and which critical skills were lost during the staff reduction.
Mr L Mpumlwana (ANC) asked if Legal Aid SA would be able to effectively operate without the R164 million. He was concerned about the level of transparency in the courts, and how lawyers and judges are not diverse in speaking multiple South African languages to accommodate Black people who do not understand English or Afrikaans which is spoken in most courts.
Mr T Mulaudzi (EFF) said the budget cuts are a consequence of the corruption in the country. He said that the budget cuts are not in line with Batho Pele principles.
Judge President Mlambo, Legal Aid SA chairperson, replied that although Legal Aid SA has identified the posts which will be affected by the retrenchment, it has however not retrenched any of its employees yet. He told the Committee that once the retrenchment process starts, Legal Aid SA will engage with trade unions to ensure that proper procedures are followed. The pro-bono work does indeed help to reduce spending costs, and Legal Aid SA also provides for the staff to do the work.
Ms Vedalankar plied that criteria for retrenchment of staff will only be determined once Legal Aid SA has consulted with trade unions. She said that cash reserves will not be used outside the acceptable ratio between assets and liabilities.
The Chairperson said Judge President Mlambo should be invited to do a presentation on how the land claims matter can be resolved before his term ends. He said that due to time constraints the questions which Legal Aid SA did not respond to should be addressed to the Committee in writing.
The meeting was adjourned.
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