The Department of Home Affairs saw spending increase in the first six months of the year, partially due to hardware leases related to the 'Who Am I Online' contract.
According to Treasury's adjusted estimates of national expenditure, the department's spending for the first six months of the 2011/12 year was R2.85 billion, or 48.7% of its adjusted budget of R5.851 billion for the year.
Treasury increased Home Affairs' budget by R386.68 million, to R5.85 billion, for the current financial year. Its spending last year came to 111.8% of its total budget.
By the middle of last year, the department had spent R2.065 billion, or 35.4%, of its 2010/11 budget. Treasury's document indicates that one of the reasons for the year-on-year increase is related to payment of hardware leases as part of the 'Who Am I Online' contract.
Gijima was awarded the 'Who Am I' deal in 2007 and signed the contract the following year. The project aims to replace the department's outdated and obsolete legacy systems, as well as improve security at an estimated cost of R2.4 billion.
A Treasury official explains that when the contract was initially entered into, the department agreed to pay for the use of hardware, but would not end up owning it.
Home Affairs cancelled the deal last April, and subsequently renegotiated the contract, agreeing to pay R852 million to Gijima in order to own the hardware. The amounts were paid out in the last quarter of the past financial year and in April.
Settling with the department resulted in Gijima incurring R374 million in costs, of which R263 million related to home affairs debt that was written off. It also wrote off another R80 million in future discounts, which it promised the department, and R30 million in expenses related to the settlement.
'Who Am I' is set to be completed in the 2014/15 financial year.
Other aspects that pushed up expenditure were higher costs in printing passports and spending on documenting Zimbabweans' process. Treasury did not split out the increase on each item.
Home Affairs collected revenue of R233.3 million in the first half of the year compared with R124 million last year. The amount is 48.3% of its expected revenue collection for the full year.
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