TITLE: FIVE YEAR EXPENDITURE REVIEW 2010-2014: FIRST QUARTER ANALYSIS 2015/16: DEPARTMENT OF LABOUR Research Unit PRESENTED BY: PHELELANI DLOMO 22 September 2015

OUTLINE OF THE PRESENTATION DEPARTMENTAL OUTCOME OVERALL BUDGET ALLOCATION VS EXPENDITURE 2010-2014 OVERALL PERFORMANCE TARGETS 2010 -2014 REASONS FOR UNDERSPENDING AND OTHER KEY ISSUES 2010-2014 TRENDS ON IRREGULAR AND FRUITLESS EXPENDITURE 2010-2014 SHIFTING AND VIREMENT OF FUNDS 2010 -2014 ANALYSIS OF 2014/15 AS A MAIN FOCUS QUARTELY EXPENDITURE FOR 2014/15 OVERALL UNDEREXPENDITURE AND SUBPROGRAMMES 2014/15 PLANNED PERFORMANCE TARGETS VS ACHIEVED TARGETS FIRST QUARTER EXPENDITURE FOR 2015/16 ISSUES FOR CONSIDERATION, SOME RECOMMENDATIONS IMPLICATIONS FOR THE COMMITTEE

OVERALL ALLOCATION AND EXPENDITURE DEPARTMENT OUTCOME 4: DECENT EMPLOYMENT THROUGH INCLUSIVE ECONOMIC GROWTH Advocates for the creation of decent jobs through inclusive economic growth, This consists, labour, Trade and Industry, CoGTA, Agriculture, Forestry and Fisheries, Mineral Resources, Energy, Transport and Public works. These departments are directly or indirectly involved in employment creation. Each department’s role is important.

OVERALL BUDGET ALLOCATIONS VS EXPENDITURE 2010 – 2014

BUDGET , EXPENDITURE VS PERFORMANCE TARGETS 2010-2014 “ 000” 2010 2011 2012 2013 2014 overall unspent Budget 1844 2025 2155 2445 2546 11.015 - Expenditure 1826 2007 2034 2371 2419 10.657 358 M % Spent 99.5 95.1 97.0 95.0 96.7% 3.2 % Performance 43.4% 140,82 59% 53,28 53% 80,60 75% 48,20 42%  

ECONOMIC CLASSIFICATIONS: BUDGET VS EXPENDITURE

PROGRAMME BUDGET VS EXPENDITURE 2010 -2014   PROGRAMME “000” 2010 % Spent 2011 2012 2013 % Spent 2014 % spent Administration 685.1 99.% 707.0 99.6% 756.9 89.% 820.8 94.% 764.9 88.4 % Inspection and Enforcement Service 329.3 100% 375.7 399.5 98.% 425.3 96.% 432.4 99.6 % Public Employment Services 293.0 332.7 99.8% 210.0 246.0 100.0% 481.5 96.6% Labour Policy and Industrial Relations 528.3 601.8 98.8% 107.8 80.% 111.6 86.% 867.4 97.7% Total 1835 2017 99.4% 2035 95.1 2445 97.% 2546 95.0%

REASONS FOR UNDER EXPENDITURE AND KEY ISSUES: 2010 – 2014

TREND:IRREGULAR, FRUITLESS EXPENDITURE 2010 – 2014 TYPE   2010 2011 2012 2013 2014 IRREGULAR 10.2 15.6 49.1 11.7 18.5 WASTEFUL,& FRUITLESS - 880 413 UNAUTHORIZED

TREND: SHIFTS AND VIREMENTS OF FUNDS 2010 -2014   PROGRAMME 2010 2011 2012 2013 2014 ADMINISTRATION R6.9 from compensation of employees and goods and services. R89.0 from compensation of employees, goods and services and household. R421000 from compensation of employees. R58.3 from compensation of employees, goods and services. R31.1 from compensation of employees and goods and services. INSPECTION AND ENFORCEMENT SERVICES R9.7 from compensation of employees and household. R5.2 from compensation of employees. R45.8 from compensation of employees. R41.7 compensation of employees. R2.0 million from goods and services. PUBLIC EMPLOYMENT SERVICES R4.5 from compensation of employees. R250 000 from goods and services. R4.9 from compensation of employees. R250000 from goods and services. R31.7 million from goods and services and non-profit organisations LABOUR POLICY AND INDUSTRIAL RELATIONS R49000 from goods and services and machinery and equipment. R559000 from compensation of employee, machinery and equipment. R2.0 from goods and services. R4.7 from compensation of employees. R2.6 from goods and services and compensation of employees.  ROLL OVERS R4.4 for Labour Policy: research on M&E R2.9 for Labour Policy: Evaluation study R1.7 for Labour Policy: R30.0 for administration: unpaid invoices for DPW. -

ANALYSIS OF BUDGET ALLOCATIONS FOR 2014/15 (R2.6 b)

BUDGET ALLOCATIONS PER ECONOMIC CLASSIFICATIONS 2014/15

QUARTERLY EXPENDITURE PERFORMANCE FOR THE 2014/15

OPERATIONAL SPENDING BY PROGRAMMES (Q 1: 2014/15)

SPENDING BY ECONOMIC CLASSIFICATIONS (Q1:2014/15)

OPERATIONAL EXPENDITURE BY PROGRAMMES(Q 2:2014)

SPENDING BY ECONOMIC CLASSIFICATIONS, 2nd Q

OPERATIONAL EXPENDITURE BY PROGRAMMES (Q3:2014

SPENDING BY ECONOMIC CLASSIFICATIONS (Q 3: 2014)

TOTAL EXPENDITURE PER PROGRAMMES Q4 : 2014/15

BUDGET UNDERSPENT PER PROGRAMME AND SUBPROGRAMME

UNDERSPENDING BY SUB PROGRAMMES: P 1

INSPECTION AND ENFORCEMENT SUBPROGRAMME (R1.5 m)

SUB-PROGRAMME PUBLIC EMPLOYMENT SERVICES R16.3 M

COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS SUB-PROGRAMME LABOUR POLICY & INDUSTRIAL RELATIONS R19.6 M

PERFORMANCE AGAINST PLANNED TARGETS/ INDICATORS Programme Planned Target Overall Achieved Not Achieved Actual Number Percentage Percent Administration 18 8 44 % 10 56 % Inspection And Enforcement Services 14 6 43 % 57 % Public Employment 9 4 5 Labour Policy And Industrial Relations 7 2 29 % 71 % Total 48 20 42 % 28 58 %

% BUDGET SPENT VERSUS PERCENTAGE OF TARGETS ACHIEVED

SOME REASOS FOR UNDER EXPENDITURE – 2014/15 FINANCIAL YEAR Slow spending in P1 relates to the termination of the IT-PPP contract with Siemens, Delays in obtaining lease invoices for office accommodation from the Department of Public Works. Vacant positions not being filled, Payments to be made in respect of travel, stationery, and research projects It is concerning to see the CAPEX expenditure rising from 1 % to 77.7 % within the short period. Low spending resulted from major events and workshops that have not taken place such as the Employment Equity roadshows, and Child Labour Day, Payments to be made in respect of office leases, invoices for travel, stationery and research projects,

FIRST QUARTER EXPENDITURE ANALYSIS – 2015/16 FINANCIAL YEAR CATEGORY “000” BUDGET EXPENDITURE % SPENT Current payments 1.6 billion 351.3 million 20.9 per cent Compensation of employees 1.0 billion 253.9 million 23.5 per cent Goods and services 604.2 million 97.4 million 16.1 per cent Transfers and subsidies 956 million 426.9 million 44.6 per cent CAPEX 46.9 million 4 thousand 0.7 per cent TOTAL 2686.9 billion 778.8 million 29.0 per cent

OPERATIONAL BUDGET EXPENDITURE PER PROGRAMME

SOME OF THE REASONS FOR UNDER EXPENDITURE Q 1 2015/16 Slow spending on stationery, office lease (DPW) and travel (Travel and flair) as a results of less than anticipated payment, The unfilled funded vacancies due to the funding pressures in programme 2 due to budget reduction (67.6 million) under personnel and this has affected about 98 inspector posts in this current financial year, The Department has decided to put on hold some of the funded vacancies until April 2016.

ISSUES FOR CONSIDERATION

ISSUES FOR CONSIDERATION CONT…………

PROPOSED RECOMMENDATIONS GOING FORWARD

SOME IMPLICATIONS FOR COMMITTEE :OVERSIGHT