SECOND QUARTER CONDITIONAL GRANTS AND CAPITAL REPORT FOR 200506
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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!!!