1 Outcome of Conditional Grants & Capital Expenditure as at 30 November 2005 [Section 40(4) of PFMA] Select Committee on Finance National Council of Provinces Presented by: Chris Adams Intergovernmental Relations National Treasury 16 January 2006

2 National Treasury’s Role National Treasury dev. Culture of publishing information Assessing credibility of prov. Budgets Ensure that each treasury prepares quarterly reports for its cabinet or exco. NT prepares a consolidated quarterly report for all provinces.

3 Key highlights Presentation covers provincial spending for the first 8 months (1 April to 30 November 2005) of 2005/06 financial year Spending is at R136bn (62,1%) of adjusted budget (R219,2bn) The highest rate of spending is in KZN (63,2%); NC and MPU (63,1%) Lowest in FS & GT (60,8%)

4 Provincial Aggregated Expenditure

5 Key highlights Spending in social services sectors: - Education at R46,7bn (64,6%) - Health at R29,4bn (62,3%) - Social Development R37,4bn (62,8%) Personnel spending at R63,3bn (65,4%) Capital expenditure is at R6,6bn (47,2%)

6 Provincial Aggregated Expenditure

7 Social services adjusted budgets at R178,9bn - 81,6% of total provincial budgets (education, health, social development) Provinces have spent R113,5bn or 63,4% –R12,3bn or 12,1 % more compared to last year Spending accounts for 83,4% of total provincial spending –Education at 34,3%, –Health at 21,6% –Social Development at 27,5% NC (65,2%), KZN (64,7%) records the highest rate of spending while FS (62%) and GT (62,1%) the lowest Social Services

8

9 Education Spending at R46,7bn or 64,6% against R72,2bn adjusted budget –Increase of R4,5bn or 10,7% compared to the previous year –Low rate of education spending in FS & NW (63,6%) –NC (67,4%) and LIM (65,6%) reflects the highest rate of spending in education Education Personnel spending at R38,7bn or 66,4% (R58,2bn adjusted budget) Goods and services (mostly LSM) at R3,9bn or 53,3% (R7,2bn adjusted budget) Capital spending at R1,3bn or 39,6% –Marginal decrease of 0,9% compared to spending last year Low rate of capital spending in KZN (20,7%) and MPU (30,8%) WC (58,4%) and NW (56,9%) reflects the highest rate of capital spending in education

10 Education

11 Provincial Public Ordinary School Education (Programme 2)

12 Provincial Education – Personnel

13 Provincial Education – NPNC

14 Health Spending at R29,4bn or 62,3% against R47,1bn adjusted budget –Increase of R3,9bn or 15,4% compared to the previous year –Low rate of health spending in LIM (55,6%) and GT (61,6%) –NC (66,1%) and MPU (65,5%) reflects the highest rate of spending in health Health Personnel spending at R16,7bn or 65,2% (R25,6bn adjusted budget) Capital spending at R1,7bn or 42,1% –Increase of 59,9% compared to spending for the same period last year Low rate of capital spending in LIM (27,9%) and FS (35,3%) MPU (58,4%) and KZN (49%) reflects the highest rate of capital spending in health

15 Health

16 Health – Programme Analyses Prog 2 - Prov Dist Health Services -Spending at R11,7bn or 63,9% of R18,2bn adjusted budget. -Lowest rate of spending in NC (57,8%) and highest in MP (67,4%) Prog 4 - Prov Hospital Services -Spending at R7,7bn or 65,6% of R11,7bn adjusted budget. -Lowest rate of spending in KZN (61,1%) and highest in FS (73,7%) Prog 5 - Central Hospital Services -Spending at R5,1bn or 65,1% of R7,8bn adjusted budget. -Lowest rate of spending in LIM (57,9%) and highest in FS (72,5%)

17 Provincial District Health Services (Programme 2)

18 Provincial Hospital Services (Programme 4)

19 Central Hospital Services (Programme 5)

20 Provincial Health – Personnel

21 Provincial Health – NPNC

22 Social Development Spending at R37,4bn or 62,8% against R59,5bn adjusted budget –Increase of R3,8bn or 11,4% compared to the previous year –Low rate of spending in FS (58,2%) and GT (60%) –KZN (65,2%) and LIM (64,8%) reflects the highest rate of spending Projecting to underspend by R972m 2 provinces projecting to overspend – KZN R244,1m and LIM R79,4m Projected underspending linked to key initiatives to address weaknesses in the grant administration system: –investigation and prosecution of fraudulent activities –comprehensive review of all temporary disability grants –implementation of systems that provides updates on key indicators for how the programme is being administered, including early warning indicators –piloting, finalising and implementing a new disability assessment tool

23 Social Development

24 Provincial Social Grants (Programme 2)

25 Social Grants - Beneficiary Numbers

26 Social Grants - Payments

27 Provincial personnel spending totalled R63,3bn or 65,4% of R96,7bn personnel adjusted budgets –Increase of 9,1% or R5,3bn over comparative spending last year Projecting to overspend by R223,6m Low level of personnel spending in GT (63,4%) and WC (63,6%) LIM (68,5%) and NW (66%) reflects the highest level of personnel spending Personnel

28 Personnel

29 Payments for Capital Assets Trends (Capital Expenditure)

30 Provinces have spent R6,6bn or 47,2% of R13,9bn adjusted capital budgets –Increase of R1,5bn or 30% to comparative spending during last year Low rate of capital spending in LIM (36,4%) and FS(38,4%) EC (58%) and MPU (57,8%) reflects the highest rate of capital spending Largest provincial capital budgets (adjusted) are for public works, roads and transport departments at R4,7bn or 34% –Spending at R2,9bn or 61,8% compared to R2,2bn spent last year (31% increase) –Projecting to overspend by R48,9m however…. Payments for Capital Assets

31 Payments for Capital Assets

32 Payments for Capital Assets - Education

33 Payments for Capital Assets - Health

34 Payments for Capital Assets – PW, R&T

35 Integrated Housing and Human Settlement Development Grant (TRANSFERS)

36 Conditional Grants

37 Conditional Grants – Flow of Info

38 Conditional Grants Conditional grant allocations total R74,6bn (2005 DoRA) –Social assistance grants making up the bulk at R55,9bn Reported expenditure excludes Schedule 4 grants such as the NTS Grant and Provincial Infrastructure grant These grants are included in “general” provincial expenditure Specific grants that show low spending include: - Hospital Revitalisation (Health) (44,3%) - Hospital Management and QI (Health) (46,6%) - Social Assistance Admin (51,5%) - Integrated Nutrition prog (53,6%) - National School Nutrition Prog (56,7%)

39 Conditional Grants

40 Conditional Grants - continued

41 Conditional Grants 5 or more provinces have spent less than 50% for the following grants: –Hospital Revitalisation (Health) –Hospital Management and Quality Improvement (Health) –Social Assistance Administration However the majority of grants reflects spending within the 50% and 70% range against the DORA.

42 Conditional Grants

43 Important dates and submissions

/06 Financial Year: –3 rd Quarter (as at 31 December 2005) 30 January 2006 –4 th Quarter (as at 31 March 2006) 28 April 2006 Publication Dates for Provincial S32 Reports

45 Practice Note 3 of 2005 (issued with effect from 01 August 2005): –National departments administering conditional grants are required to table QPRs (including both financial and non-financial information) with the SCOF in the NCOP at the end of each quarter in line with the requirements of Sections 19(1)(c) and 21(2)(d) of the Act, Grant Frameworks and Treasury Regulation 5.3 –Departments are required to provide the NT with copies of the reports tabled at SCOF in NCOP. The quarterly reports for each quarter should be tabled by the dates provided –The dates are as follows: Third Quarter:07 February 2006 Fourth Quarter:08 May 2006 Proposed Dates for QPRs

46 Detail on Conditional Grants by Grant Type

47 Agriculture Grants Land Care Programme: Poverty Relief and Infrastructure Development Objective (Schedule 5 Grant): –To address the degradation problems of natural/agricultural resources and improve the social-economic status, and food security of rural communities 8 month Expenditure: –Agriculture spent R35,9 m or 89,7% of the R40 m allocation –Transfers amounted to 80% –Highest: NC 566,8%; MPU 118,4% and FS 109,9% –Lowest: NW 0%; GT 36,5%; and LIM 51,9% Service Delivery Outcome: –Department / Sector to respond

48 Agriculture Grants Comprehensive Agriculture Support Programme Objective (Schedule 4 Grant): –To enhance the provision of support services to promote and facilitate agricultural development targeting beneficiaries of the Land and Agrarian Reform programme and resource poor land-users 8 month Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –However, provinces reported spending of R103,3 m or 41,3% of R250 m allocation –Transfers amounted to 80% –Highest: FS 61,8%; GT 56,9% and EC 55,1% –Lowest: NW 0%; WC 27,6% and KZN 30,5% Service Delivery Outcome: –Department / Sector to respond

49 Education Grants HIV and Aids Grant (Life Skills Education) Objectives (Schedule 5 Grant): –To ensure access to an appropriate and effective integrated system of prevention, care and support for children infected and affected by HIV and Aids –To deliver life skills, sexuality and HIV and Aids education in primary and secondary schools 8 month Expenditure: –Education spent R129 m or 94,7% of the R136,3 m allocation –Transfers amounted to 75% –Highest: GT 307%; EC 79,3% and KZN 72,9% –Lowest: LIM 31,6% and NW 46,9% Service Delivery Outcome: –Department / Sector to respond

50 Education Grants National School Nutrition Programme Objective (Schedule 5 Grant): –To improve the nutrition status of South African children: specifically to enhance active learning capacity and improve attendance in schools 8 month Expenditure: –Education spent R630,5 m or 69,1% of the R912,2 m allocation –Transfers amounted to 61,5% –Highest: EC 74,7%; KZN 73,9% and NC 72,6% –Lowest: WC 51,6% and FS 61,9% Service Delivery Outcome: –Department / Sector to respond

51 Health Grants National Tertiary Services Grant Objective (Schedule 4 Grant): –To fund national tertiary delivery in 27 hospitals across the nine provinces, as identified by the national department of Health (DOH), in order to ensure equitable access to basic tertiary health services by all South Africans 8 month Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Health spent R3 117 m or 66,2% of the R4 709 m allocation –Transfers amounted to 66,7% –Highest: MPU 88,4%; KZN 73,5% and NC 66,7% –Lowest: LIM 28,7% and NW 48,9% Service Delivery Outcome: –Department / Sector to respond

52 Health Grants Health Professions Training and Development Grant Objectives (Schedule 4 Grant): –Support provinces to fund service costs associated with training of health professionals –Enable shifting of teaching activities from central hospitals to regional and district facilities –Development and recruitment of medical specialist in under- served provinces 8 month Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Health spent R1 008 m or 66,3% of the R1 520 million allocation –Transfers amounted to 66,7% –Highest: FS 84,7%; NW 72,1% and GT 66,7% –Lowest: EC 49,9% and MPU 64,7% Service Delivery Outcome: –Department / Sector to respond

53 Health Grants Comprehensive HIV and Aids Grant Objective (Schedule 5 Grant): –To Enable the health sector to develop an effective response to the HIV and Aids epidemic and other matters 8 month Expenditure: –Health spent R710,4 m or 62,6% of the R1 135 m allocation –Transfers amounted to 59,6% –Highest: KZN 78,6%; GT 75,5% and WC 71,7% –Lowest: LIM 36,8% and NC 41,8% –Service Delivery Outcome: –Department / Sector to respond

54 Health Grants Hospital Revitalisation Grant Objective (Schedule 5 Grant): –To transform and modernise infrastructure and equipment in hospitals in line with national policy and to achieve a sustainable infrastructure from which modern, equitable and sustainable services can be delivered 8 month Expenditure: –Health spent R490,2 m or 47,7% of the R1 027 million allocation –Transfers amounted to 61,2% –Highest: GT 359,6%; NC 79,3% and MPU 67,3% –Lowest: FS 25,4% and EC 30,2% Service Delivery Outcome: –Department / Sector to respond

55 Health Grants Integrated Nutrition Programme Grant Objective (Schedule 5 Grant): –To implement integrated nutrition activities aimed at improving the nutritional status of all South Africans 8 month Expenditure: –Health spent R66,2 m or 53,6% of the R123,4 m allocation –Transfers amounted to 77,3% –Highest: MPU 62,8%; GT 60,7% and EC 54,5% –Lowest: WC 43,8%; NC 48,4%; and NW 49,2% Service Delivery Outcome: –Department / Sector to respond

56 Health Grants Hospital Management and Quality Improvement Grant Objective (Schedule 5 Grant): –To transform hospital management and improve quality of care in line with national policy 8 month Expenditure: –Health spent R70 m or 46,6% of the R150,3 m allocation –Transfers amounted to 75% –Highest: MPU 142,7%; NW 56,4% and EC 50,2% –Lowest: GT 12%; KZN 30,8% and WC 33,4% Service Delivery Outcome: –Department / Sector to respond

57 Housing Grants Integrated Housing and Human Settlement Grant Objective (Schedule 5 Grant): –To finance subsidies, the implementation of National Housing Programmes and to facilitate habitable, stable and sustainable human settlements 8 month Expenditure: –Housing spent R3 017 m or 62,3% of the R4 843 m allocation –Transfers amounted to 72,6% –Highest: NC 88,3%; NW 81,1% and WC 63,3% –Lowest: LIM 53,5%; MPU 53,7%; and FS 55,3% Service Delivery Outcome: –Department / Sector to respond

58 Housing Grants Human Settlement and Redevelopment Grant Objective (Schedule 5 Grant): –To fund projects that aim to improve the quality of the environment by identifying dysfunctionalities in human settlements 8 month Expenditure: –Housing spent R31,1 m or 127,4% of the R24,4m allocation –Transfers amounted to 80,4% –Highest: LIM 383,6%; WC 131,4% and FS 98% –Lowest: GT 26,4% Service Delivery Outcome: –Department / Sector to respond

59 Land Affairs Land Distribution:Alexandra Urban Renewal: Project Grant Objective (Schedule 5 Grant): –To contribute towards the purchase of land for the relocation and settlement of Alexandra residents and other qualifying beneficiaries 8 month Expenditure: –Gauteng has not spent any of allocation for this grant and no funds were transferred Service Delivery Outcome: –Department / Sector to respond

60 National Treasury Provincial Infrastructure Grant Objectives (Schedule 4 Grant): –Help accelerate construction, maintenance and rehabilitation of new and existing infrastructure in education, roads, health and agriculture –Gradually increase the labour-intensity of certain specific types of projects over the next five years 8 month Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Transfers amounted to 57,2% (Not all funds transferred as per the payment schedule) Service Delivery Outcome : –Department / Sector to respond

61 Social Development Grants Social Assistance Administration Grant Objective (Schedule 5 Grant): –To fund the administration of social assistance grants 8 month Expenditure: –Social Development spent R1 743 m or 51,5% of the R3 382 m allocation –Transfers amounted to 66,7% –Highest: NC 60,5%; KZN 59,5%; and EC 55,1% –Lowest: FS 42,9%; GT 43,5% and MPU 44,2% Service Delivery Outcome: –Department / Sector to respond

62 Social Development Grants Social Assistance Transfers Grant Objective (Schedule 5 Grant): –To fund social assistance transfer payments to eligible beneficiaries 8 month Expenditure: –Social Development spent R33 409m or 64,2% of the R52 023m allocation –Transfers amounted to 69,3% –Highest: MPU 71,2%; LIM 66,7% and NW 65,9% –Lowest: FS 59,5%; GT 60,1% and NC 62,9% Service Delivery Outcome: –Department / Sector to respond

63 Social Development Grants HIV and Aids Grant (Community-Based Care) Objectives (Schedule 5 Grant): –To provide social welfare services to orphans and vulnerable children who are infected by HIV and Aids, within family and community context, in partnership with non profit making organizations (NGOs, CBOs and other community organisations) –To develop and support institutional structures and professionals, community workers and child and youth care workers through targeted training programmes in order to ensure effective delivery of services 8 month Expenditure: –Social Development spent R85,1 m or 61,5% of the R138,4 m allocation –Transfers amounted to 90% –Highest: GT 100,9%; MPU 80,3% and LIM 72% –Lowest: FS 35,7%; KZN 37,3% and WC 41,9% Service Delivery Outcome: –Department / Sector to respond

64 Social Development Grants Integrated Social Development Services Grant Objective (Schedule 4 Grant): –To enable provinces to support and provide appropriate social welfare services and development interventions, and for immediate and appropriate short-term relief to vulnerable individuals and households who are not eligible and not receiving any from of assistance 8 month Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Social Development spent R93,3 m or 24,1% of the R388 m allocation –Transfers amounted to 52,6% –Highest: MPU 98,3% and FS 83,5% –Lowest: LIM and KZN 0%; WC 0,3%; Service Delivery Outcome: –Department / Sector to respond

65 Sport and Recreation SA Grants Mass Sport and Recreation Participation Programme Objective (Schedule 5 Grant): –Promotion of mass participation within disadvantaged communities in a selected number of sport activities and the empowerment of communities to manage these activities in conjunction with provincial departments responsible for sport 8 month Expenditure: –Sport and Recreation spent R15,2 m or 63,3% of the R24m allocation –Transfers amounted to 84,1% –Highest: FS 82,9%; MPU 80,5% and EC 71,8% –Lowest: NW 28,9%; NC 52,8% and WC 56,2% Service Delivery Outcome: –Department / Sector to respond

66 THANK YOU THANK YOU