SECOND QUARTER CONDITIONAL GRANTS AND CAPITAL REPORT FOR 200506

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SECOND QUARTER CONDITIONAL GRANTS AND CAPITAL REPORT FOR 200506 Powered By Docstoc
					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      Payment Schedule     Transfers received   Variance (Payment
                                   2005/06           as at end of Sept    as at end of Sept      schedule less
                                                                                              transfers received)


DACE

Comprehensive Agricultural
Support                                     5,727                2,577                2,578                     1

Land Care Programme                         2,000                  900                  900                     0

EDUCATION                                                                                                       0

HIV and Aids (Life Skills
Education)                                 18,880                9,440                9,440                     0

School Nutrition Programme                 83,006               41,504               41,504                     0

HEALTH                                                                                                          0

Comprehensive HIV and Aids                185,048               91,491               91,491                     0

Health Professions Training and
Development                               554,039              277,020              277,020                     0

Hospital Management and
Quality Improvement                        18,510                9,256                9,256                     0

Hospital Revitalization                    17,955                8,979                8,979                     0

Integrated Nutrition Programme             11,333                6,807                6,807                     0

National Tertiary Services              1,760,465              880,230              880,230                     0
                 Conditional grants cont.
          Dept & Grant              Total Budget      Payment Schedule     Transfers received   Variance (Payment
                                        2005/06            as at end of          as at end of        schedule less
                                                               Sept                  Sept              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      Spent by     % budget     Projection     Spent &       Variance
                              Available    Province     spend end                  Projection
                              2005/06             by     of Sept
                                          end of Sept
DACE

 Comprehensive
Agricultural Support              5,727         1,602      27.90%          4,317          5,919       -192

Land Care Programme               2,000          486       24.30%          1,456          1,942         58

EDUCATION

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 and
Quality Improvement              18,510         1,086       5.80%         18,510         19,596      -1,086

Hospital Revitalization          17,955        32,838      182.80%        63,176         96,014     -78,019

Integrated Nutrition
Programme                        11,333         5,709      50.30%          5,624         11,333

National Tertiary Services    1,760,465       880,230      49.90%        880,235      1,760,465
                    Conditional grants cont.
       Dept & Grant             Total        Spent by           % budget     Projection    Spent &       Variance
                              Available     Province by       spend end of                Projection
                              2005/06       end of Sept           Sept

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         1,694

SOCIAL DEVELOPMENT

HIV and Aids (Community-
Based Care)                        20,341         19,523            95.90%       41,566         61,089       -40,748

Integrated 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        37,722

Social Assistance Transfers
Grant                           6,454,145      3,189,220            49.40%    3,092,219      6,281,439       172,706

SRAC

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 spending
        to the department; to be corrected in the next
        report
Capital Expenditure




       ALLOCATIONS
         Capital Expenditure cont.
         Departmental Allocations (Before adjustment)
Department                           2005/06               % of total allocation

Health                                          453,085                            10%

Education                                       555,492                            13%

Transport and Public
Works                                           642,819                            15%

Housing                                        1,524,581                           35%

Social Development                               24,420                            1%

Finance and Economic
Affairs *                                      1,190,698                           27%

Agriculture , Conservation
and Environment                                   5,538                            0%

Sports                                           12,400                            0%

Total Infrastructure                       4,409,033                         100%

* Includes Gautrain ( (R900m), Blue IQ projects (R146m) and Cradle of
    Humankind and Dinokeng (R144m)
        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!!!