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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!!!
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