SECOND QUARTER CONDITIONAL GRANTS AND CAPITAL REPORT FOR 2005/06
Select Committee on Finance 16 January 2006
Contents Conditional grants
Transfers Actual spending
Capital Expenditure Allocations Actual spending
Assessment of department monitoring capacity Reporting by departments Submission of conditional grants business plans
Conditional grants
TRANSFERS
Conditional grants cont. Dept & Grant Total Budget
2005/06Payment
Schedule as at end of Sept
Transfers received as at
end of Sept
Variance (Payment
schedule less transfers received)
DACE
Comprehensive Agricultural Support 5,727 2,577 2,578 1Land Care Programme 2,000 900 900 0EDUCATION 0HIV and Aids (Life Skills Education) 18,880 9,440 9,440 0School Nutrition Programme 83,006 41,504 41,504 0HEALTH 0Comprehensive HIV and Aids 185,048 91,491 91,491 0Health Professions Training and Development 554,039 277,020 277,020 0Hospital Management and Quality Improvement 18,510 9,256 9,256 0Hospital Revitalization 17,955 8,979 8,979 0Integrated Nutrition Programme 11,333 6,807 6,807 0National Tertiary Services 1,760,465 880,230 880,230 0
Conditional grants cont. Dept & Grant Total Budget
2005/06Payment Schedule as
at end of Sept
Transfers received as at end of
Sept
Variance (Payment schedule
less transfers received)
HOUSING
Integrated Housing and Human
Settlement 1,340,675 611,900 611,900 0
Human Settlement and Redevelopment 4,130 910 910 0
Land Distribution (Alex) 8,000 0 0 0
NATIONAL TREASURY 0
Provincial Infrastructure 369,777 184,888 92,444 92,444
SOCIAL DEVELOPMENT 0
HIV and Aids (Community-Based
Care) 20,341 18,306 18,306 0
Integrated Social Development Services 27,904 13,952 13,952 0
Social Assistance Administration 350,000 175,002 175,002 0
Social Assistance Transfers Grant 6,454,145 3,322,568 3,322,568 0
SRAC 0
Mass Sport and Recreation Participation 2,670 2,127 2,127 0
TOTAL 11,234,605 5,657,857 5,565,414 92,443
Conditional grants cont. Installment for infrastructure grant
was not received due to Non-submission of plans for 2006
MTEF by Education, Health, Finance Non-submission of 2nd quarter report
by Education, Finance Inaccurate and incomplete reports
Conditional grants cont.
ACTUAL SPENDING
Conditional grants cont. Dept & Grant Total
Available
2005/06
Spent by Province
by end of
Sept
% budget spend end
of Sept
Projection Spent & Projection
Variance
DACE
Comprehensive Agricultural Support 5,727 1,602 27.90% 4,317 5,919 -192Land Care Programme 2,000 486 24.30% 1,456 1,942 58EDUCATION HIV and Aids (Life Skills Education) 18,880 3,065 16.20% 15,815 18,880
School Nutrition Programme 83,006 36,706 44.20% 46,300 83,006
HEALTH Comprehensive HIV and Aids 185,048 113,505 61.30% 71,543 185,048
Health Professions Training and Development 554,039 277,020 50.00% 277,019 554,039
Hospital Management andQuality Improvement 18,510 1,086 5.80% 18,510 19,596 -1,086Hospital Revitalization 17,955 32,838 182.80% 63,176 96,014 -78,019Integrated Nutrition Programme 11,333 5,709 50.30% 5,624 11,333
National Tertiary Services 1,760,46
5 880,230 49.90% 880,235 1,760,465
Conditional grants cont.Dept & Grant Total
Available 2005/06
Spent by Province by end of Sept
% budget spend end
of Sept
Projection
Spent & Projection
Variance
HOUSING
Integrated Housing and Human Settlement 1,340,675 628,979 46.90% 1,082,296 1,711,275 -370,600
Human Settlement and Redevelopment 4,130 1,091 26.40% 3,039 4,130
Land Distribution (Alex) 8,000 - 0.00% 8,000 8,000 NATIONAL TREASURY Provincial Infrastructure 369,777 107,860 29.10% 260,223 368,083 1,694SOCIAL DEVELOPMENT
HIV and Aids (Community-Based Care) 20,341 19,523 95.90% 41,566 61,089 -40,748Integrated Social Development Services 27,904 12,537 44.90% 15,367 27,904 Social Assistance Administration 350,000 111,196 31.80% 201,082 312,278 37,722Social Assistance Transfers Grant 6,454,145 3,189,220 49.40% 3,092,219 6,281,439 172,706SRAC
Mass Sport and Recreation Participation 2,670 282 10.60% 2,388 2,670
TOTAL 11,234,605 5,422,935 48.30% 6,090,175 11,513,110 -278,505
Conditional grants cont. Overall the province has spent 48,3% of the available budget
for Conditional Grants as at the end of Q2.
DACE spending low on both grants Comprehensive Agricultural Support Grant’s no Q1 expenditure
due to delays in the receipt of quotations for irrigation system, provision of bore holes and fencing foe supported emerging farmers
Land Care Programme low spend due to the finalisation of 2004/05 projects incl. effects of planning for 2005/06 projects
Education School nutrition grant programme grant-44% spent after the
second quarter HIV/AIDS-Life Skills grant-16% spent due to late distribution of
budgets to district offices
Conditional grants cont. Health
Hospital management and improvement grant-5,8% spent (awaiting approval of business plans from National Health)
All other grants spending is on track Hospital revitalisation grant (allocation for 2005/06
drastically reduced) – has already overspent after the second quarter
Projected over expenditure on revitalisation projects estimated at R78m, (partially defrayed by rollover of R22,8m)
Received R71m for Revitalisation from National during the adjustment
Conditional grants cont. Housing
Integrated housing grant spent 47%, Human settlement grant spent 26% in context
comprehensive plan - merger of grants; grant funding remaining commitments
Land distribution’s 0% expenditure emanates from prolonged planning activities from the first quarter for the acquisition of land for the Alex low cost housing initiative, expenditure is projected to effect during third quarter
Conditional grants cont. Overall provincial infrastructure grant
spending is at 29% Transport spent 29% (R43,5m) of budget (R147,9m) and
project to under spend by R12,4m Health spent 56% (R41m) of budget (R84,7m); projected
over spending of R10,8m Education spending at 16% of budget although
projections show that entire budget will be spent
Conditional grants cont. Social Development
Other grants spending is on par except for the Social assistance administration grant-32% spent
The Social assistance grant spending influenced by the indemnity campaign launched by the National Minister of Social Development that resulted in the cancellation of more than 7,000 cases of fraudulent beneficiaries in Gauteng alone.
HIV/AIDS grant shows 95% expenditure due to the incorrect allocation of Health’s HIV/AIDS grant spendingto the department; to be corrected in the next report
Capital ExpenditureALLOCATIONS
Capital Expenditure cont.Departmental Allocations (Before adjustment)
* Includes Gautrain ( (R900m), Blue IQ projects (R146m) and Cradle of Humankind and Dinokeng (R144m)
Department 2005/06 % of total allocation
Health 453,085 10%
Education 555,492 13%
Transport and Public 642,819 15%Works
Housing 1,524,581 35%
Social Development 24,420 1%
Finance and Economic 1,190,698 27%Affairs *
Agriculture , Conservation 5,538 0%and Environment
Sports 12,400 0%
Total Infrastructure 4,409,033 100%
Capital Expenditure cont.Some of the changes during Adjustment includes
Health Funds to purchase equipment for Pretoria Academic Hospital
(R270m) Maintenance backlog (R70m) for maintenance and
rehabilitation of health facilities Revitalization projects (R23m) Medical Equipment was delivered late (R29m)
Education Capex rollover of R60m due to pay contractors after the
completion of the 3 months retention period
Capital Expenditure cont. Transport and Public Works
Funds suspended from Dace and Social development for various projects (R22m)
Finance and Economic Affairs Gautrain budget reduced by R300 to fund pressures in the
social sector Dinokeng and Cradle of Humankind reduced by R58m
Housing Housing fund, Alex and Human settlement conditional grants
(R18m) to accommodate capital projects in progress Kliptown project R75m
Capital Expenditure cont.
ACTUAL SPENDING
Capital Expenditure cont.Compliance PLANS: Formats of the IDIP plans which all departments are expected to
comply with have been given to departments; however, DFEA & Sports submitted plan in Jan 06 Housing initially indicated that they do not consider building houses as
infrastructure therefore no plan was submitted We continue to follow up with the aforementioned departments to ensure
their final strategic plans include these infrastructure plans.
INFRASTRUCTURE REPORTING: 8 departments contribute in the provincial infrastructure: DFEA, Health,
Educ, SocDev, Housing, DPTRW, DACE & SRAC No report submitted by DFEA & Education submitted Q2 in Dec 05 However, NT reported material gaps in the information provided (Q1 & Q2) Expect information to be complete for Q3 report
Capital Expenditure cont. Health Infrastructure spend till end Dec 2005
Maintenance – 62,2% spent Infrastructure grant – 76,1% spent Provincial Infrastructure – 67,8% spent Revitalization grant – 84,6% spent
Dept indicate spending on track i.t.o allocation Measures to accelerate infrast. delivery
Appointment of project manager to increase capacity to monitor, manager & expedite
Management meetings on cash flow management Dedicated revitalization project managers to strengthen manage
capacity Early Warning System for routine reporting
Capital Expenditure cont.
Measures to accelerate infrast. Delivery Flagship projects identified for special attention SLA with health institutions Closer cooperation and communication implemented for
user requirements
Capital Expenditure cont. Education Infrastructure spend till end Nov R174m
Maintenance - R53m Schools – R75m GautengOnline R46m
Projected spend till year end R267m Measures to accelerate infrast. Delivery
Turnkey approach - advertised 45 schools in Nov grouped in clusters
Response not good – few contractors submitted tenders & prices very high
Re- advertised tender for 22 schools and tender closes in Jan Use IDT to build 23 schools and tender closes in Jan Appoint a project management company in Jan to facilitate the
process of ensuring that projects are delivered on time
Capital Expenditure cont. Transport and Public Works Infrastructure spend as at the end of Sept R195m
Maintenance R109,3m Upgrade R86m Public Works portion was not submitted
Measures to accelerate infrast. Delivery Developed a supplier database to assist in evaluating the
capacity and expertise of contractors
Developed a programme to improve technical capacity of contractors on site
Capital Expenditure cont. Housing The budget for Conditional Grant (Capex) is R1,340 billion
2005/06; Spending as at 30 November 2005 is R834m The Projected Spending Dec 2005 to March 2006 is R876m. Estimated over expenditure amounts to R370 million There is a huge projected expenditure for the month of March
amounting to R344 million. Continued 3rd quarter monitoring to validate credibility of
spending.
Capital Expenditure cont. Key concerns
Partial/ Non submission by: Public Works (Partial) Education DFEA
Inaccurate and/or incomplete reports
Capital Expenditure cont. Action by Treasury – drafted letters to all
HODs & CFOs: Detailed Q1&2 trend analysis on revenue (incl. CG) and
expenditure Highlighted key spending concerns Requested departments to clarify issues of concern Requested departments to formulate remedial plans for
low spending areas Reported spending to Exco; Premier
requested remedial plans from each HOD of low spending dept
Key interventions to be implemented included in previous slides
Assessment of departments monitoring capacity
CFO’s offices not properly capacitated – delay in submissions of reports, incomplete reports
Fiscal management unit responsible for monitoring has increased its capacity
Will continue to increase its capacity in the coming financial year
Reporting by departments
Receive monthly reports from departments Submit to National Treasury Submit quarterly reports to National Treasury and
the Legislature Provide feedback to departments on a quarterly
basis Presented 2nd quarterly report at the 2nd budget
Lekgotla Premier had discussions with the Departments on
the 2nd quarter report
Business plans for conditional grants
Business plans are submitted by departments directly to National Departments
Approval of plans are done by the relevant national department
Way Forward
Continue to monitor spending against budget Hold individual meetings with departments showing
significant underspending and overspending Capacitate CFO’s office and Treasury in 2006/07 Facilitate delivery between planning and
implementing agencies Establishment of dedicated M&E function within
Public Finance Unit at Provincial Treasury
Thank you!!!