Projected Provincial Budget Outcome of Conditional Grants as at 30 September 2007 Select Committee on Finance Presentation by Free State Provincial Treasury

DISCUSSIONS To brief the Select Committee on Finance on Audited 2006/07 provincial budget report Projected Provincial Conditional Grant outcomes as at 30 September 2007 Trends in allocations and projected expenditure of conditional grants

2006/07 AUDITED BUDGET OUTCOME Audited actual expenditure = R12, 298 billion (103.5%) with an average monthly expenditure of R1,025 billion (8.6%) Expenditure during February accounts for 8.7% and March expenditure for 14.2% of budget Net over expenditure amounts to R414 million (3.5%) Under expenditure by 8 departments = R 50,8 million (0.4%) Over expenditure by 4 departments = R465,0 million (3.9%) Departments overspending PWRT = R358,8 million (33.7%) Health = R 91,9 million (2.7%) Education = R 12,5 million (0.2%) Premier = R 2,2 million (2.3%)

Audited 2006/07 Departmental Performance

AUDITED EXPENDITURE ANALYSIS Social Services departments (SHE) : Social Sector’s adjusted budget of R9,148 billion = 77.0% of total 2006/07 adjusted budget. Audited expenditure of R9,250 billion of the SHE accounts for 101.1% of the adjusted SHE budget of R9,148 billion 75.2% of total provincial expenditure (R12,298 billion) R9,250 billion exp resulting in over expenditure of R101,7 m (1.1%) Non-social services departments spent R3,048 billion 111.4% against their adjusted budgets of R2,734 billion 24.8% of total provincial expenditure (R12,298 billion)

DEPARTMENTAL ANALYSIS (SHE) – March 07

AUDITED EXPENDITURE ON CONDITIONAL GRANTS AS AT 31 MARCH 2007 Expenditure of Conditional Grants amounts to R1,784 billion which equals: 98.7% of the adjusted Conditional Grant budget of R1,807 billion; 14.5% of total provincial expenditure of R12,298 billion. Under expenditure amounts to R23,3 million. Deviations from budgets: Agriculture Disaster Man - R 3,417 million (51.2%) LandCare - R 0,147 million (3.8%) Forensic Pathology - R11,292 million (24.1%) Integrated Housing - R 0,229 million (0%) Mass Sport & Recreation - R 0,145 million (1.5%) Integrated Soc Dev Services - R 0,120 million (0.4%) PIG: Health - R 7,997 million (15.6%)

Audited Expenditure on C-grants as at 31 March 2007

2006/07 Conditional-grant budgets by Grant Type

AUDITED CAPITAL EXPENDITURE – 2006/07

2007/2008 Budget Breakdown of budget Equitable Share R10,642 billion (80.0%) Conditional Grants R 2,202 billion (16.5%) Own revenue R 465 million ( 3.5%) Total Provincial Budget R13,309 billion (100%)

PROJECTED BUDGET OUTCOME – 2nd QUARTER Actual expenditure = R6 241,5 billion (46.9%) Total projected expenditure of R13 824,0 billion (103.9%) against budget of R13 309,1 billion Nine departments project to overspend: Education, Health, Premier, Legislature, TEEA, LGH, PWRT, Safety & SAC Net projected over expenditure amounts to R514,9 million (3.9%)

DEPARTMENTAL PERFORMANCE – September 07 Projections include about R466 million Unauthorised expenditure iro over expenditure of the 2006/07 financial year

CAPITAL EXPENDITURE – 2007/08

INFRASTRUCTURE EXPENDITURE – September 07 Updated 22/10/07 No projections was included in the IRM for Agriculture ( Use IYM figures)

Conditional Grant expenditure Aggregate Conditional Grant expenditure per department Conditional Grant expenditure per grant type Detail on Conditional Grant expenditure per department

Second quarter expenditure on Conditional Grants Expenditure of Conditional Grants amounts to R892,1 million which equals: 40.5% of the Conditional Grant budget of R2,202 billion; 82.1% of transferred R1,087 billion from National Treasury; 14.3% of total provincial expenditure of R6,241 billion.

Projected Expenditure on C-grants as at 30 Sep 2007

Conditional-grants by Grant Type as at 30 Sept 2007

Detail on Conditional Grants per department: Agriculture Agriculture spent 47.0% or R19,4 million of their C-grant allocation of R41,4 million. Projected Budget Outcome per grant CASP: Budget = R38,1 million Expenditure = R18,2 million (47.8%) Projections = R19,9 million (52.2%) LandCare Grant: Budget = R3,3 million Expenditure = R1,3 million (38.5%) Projections = R2,0 million (61.5%)

Detail on Conditional Grants per department: Local Government and Housing Local Gov and Housing spent R185,4 million (28.4%) of the total Housing fund allocation of R653 million during the first two quarters and project to spend the remainder by the end of the financial year.

Detail on Conditional Grants per department: Education Education spent R111,8 million or 48.0% of their Conditional Grant allocation of R233 million and they project to overspend the total allocation during the 2007/08 financial year by about R5,0 million (2.2%). Projected Budget Outcome per grant Further Education and Training College Sector Recapitalization Grant: Allocation = R36 million Expenditure = R18 million (50%) Projections = R18 million (50%) HIV and Aids Grant: Allocation = R9,2 million Expenditure = R3,8 million (41.1%) Projections = R3,1 million (33.9%) Projected underspending of R2,3 million (25.0%) – Workshops did not take place as planned due to strikes

Detail on Conditional Grants per department: Education (continue) Projected Budget Outcome per grant (continues) National School Nutrition Programme Grant: Allocation = R68,0 million Expenditure = R38,5 million (56.6%) Projections = R36,9 million (54.2%) Projected overspending of R7,3 million (10.8%) Infrastructure Grant to Provinces: Allocation = R119,7 million Expenditure = R51,5 million (43.0%) Projections = R68,2 million (57.0%)

Detail on Conditional Grants: Health Health spent 50.7% or R447,6 million of their Conditional Grant allocation of R882,6 million and project to spend the remaining budget by the end of the financial year. Projected Budget Outcome per grant HIV and Aids Grant: Allocation = R153,6 million Expenditure = R64,1 million (41.7%) Projections = R89,6 million (58.3%) Forensic Pathology Services Grant Allocation = R30,4 million Expenditure = R24,1 million (79.2%) Projections = R6,3 million (20.8%) Health Professions Training and Development Grant: Allocation = R97,1 million Expenditure = R61,8 million (63.7%) Projections = R35,3 million (36.3%)

Detail on Conditional Grants: Health (continue) Projected Budget Outcome per grant (continue) Hospital Revitalisation Grant: Allocation = R90,4 million Expenditure = R41,4 million (45.8%) Projections = R49,0 million (54.2%) National Tertiary Services Grant: Allocation = R480,9 million Expenditure = R249,6 million (51.9%) Projections = R231,3 million (48.1%) Infrastructure Grant to Provinces: Allocation = R30,0 million Expenditure = R6,6 million (22.1%) Projections = R23,4 million (77.9%)

Detail on Conditional Grants: Sport, Arts and Culture Sport, Arts and Culture spent R9,6 million (30.4%) of the 2007/08 Conditional Grant allocation of R31,7 million during the first two quarters. Projected Budget Outcome per grant Mass Sport and Recreation Participation Programme grant Allocation = R15,2 million Expenditure = R5,8 million (38.1%) Projections = R9,4 million (61.9%) Community Library Services grant Allocation = R16,5 million Expenditure = R3,8 million (23.2%) Projections = R12,6 million (76.8%)

Detail on Conditional Grants per department: Public Works, Roads and Transport The total allocation in respect of the Infrastructure Grant to Provinces to Public Works, Roads and Transport amounts to R360,3 million of which R118,2 million (32.8%) was spent at the end of September 2007. The department project to overspend the total allocation by the end of the financial year with about R7,9 million (2.2%).

National Treasury (Infrastructure Grant to Provinces) Expenditure at the end of the second quarter recorded against the Infrastructure Grant to Provinces (included in discussions per department) amounts to R176,4 million or 34.6% of the allocation of R510 million from National Treasury. Three departments benefit from this grant: Public Works, Roads and Transport Allocation = R360,3 million (70.6%) Expenditure = R118,2 million (32.8%) Projections = R249,9 million (69.4%) Projected overspending of R7,9 million (2.2%) Education Allocation = R119,7 million (23.5%) Expenditure = R51,5 million (43.0%) Projections = R68,2 million (57.0%) Health Allocation = R30,0 million (5.9%) Expenditure = R6,6 million (22.1%) Projections = R23,4 million (77.9%)

Monitoring Capacity in the Provincial Treasury Established a Public Finance Unit To monitor budget implementation Advice on the compilation of expenditure and non financial performance reports Quarterly Infrastructure Review Meetings Regular visits to infrastructure projects Meeting with departments on a regular basis

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