PRESENTATION ON THE CONDITIONAL GRANT TO THE SELECT COMMITTEE 18 November 2018 PRESENTATION ON THE CONDITIONAL GRANT TO THE SELECT COMMITTEE 23 MAY 2017 18 November 2018 ECD Conditional Grant Workshop MANCO

BACKGROUND In order to enhance the implementation of the ECD policy, Treasury has allocated R812 million as a conditional grant for 2017/18 (R319 828 000) and 2018/19 (R493 065 000). This is to enable National DSD to better control and ring-fence expansion of ECD in the country in line with the approved national Integrated ECD Policy. The allocation will be used to increase coverage of children accessing ECD services through the ECD subsidy to poor children as well as assist to improve the conditionally registered ECD centres to meet basic requirements in order to be fully registered. The grant is divided into two: Subsidy component to cover 1004 children by 2018/19 ECD maintenance component to upgrade 400 sites by 2018/19 Five national workshops were held with provinces to prepare for the implementation of the Conditional Grant A comprehensive document was sent to the provinces on the 25 May 2016 which included the following: Submission to HOD’s on the grant including timelines for implementation; Criteria for assessment of ECD’s; The assessment tool; and The database template

SUMMARY ALLOCATION 2016/17 2017/18 2018/19 R' 000   2016/17 2017/18 2018/19 R' 000 Early Childhood Development Grant - 319,828 493,065 ECD subsidy expansion 250,000 413,187 ECD centre maintenance 69,828 79,878 18 November 2018

KEY CONDITIONS OF THE ECD CONDITIONAL GRANT Subsidy Grant The grant will assist registered centres that are not fully funded from the equitable share, fully registered centres that are not funded or conditionally registered partial care facilities not funded offering Early Childhood Development programmes. The subsidy is targeted for qualifying children from birth to 5 years or until they enter Grade R. The value of the subsidy paid is at a rate of R15 per child for a maximum period of 264 days. 18 November 2018

KEY CONDITIONS OF THE ECD CONDITIONAL GRANT Maintenance Grant Partial care facilities offering ECD programmes that are registered conditionally will be eligible for the maintenance grant. ECD centres must be conditionally registered Minor building and maintenance improvements aimed at ensuring ECD centres comply with the health and safety norms and standards, as identified by the National Department of Social Development will be funded from the grant. The maximum value to be spent per ECD centre for maintenance improvements is R100 000.00 Prior approval for any amount exceeding the R100 000 should be obtained from the HOD and CFO. The exceeding amount should not be more than 30% of the R100 000. Provinces must conduct assessments of conditionally registered centres and cost them in order to qualify for maintenance grant funding in 2018/19. All maintenance projects must be recorded on the National Treasury Infrastructure Reporting Model (IRM).

CATEGORIES FOR MAINTENANCE COMPONENT Health and Safety Minor Building improvement Early Learning Material Equipment 18 November 2018 Audit Committee

STEPS AND TIMELINES FOR THE PROCESS 01 August 2016 to 30 September 2016 01 March 2016 to 31 July 2016 National analysis of the lists from provinces Approval of the final list Identification of ECD’s. Assessment of Issues Costing of the issues Categorisation of ECD’s 01 October 2016 to 31 October 2016 Finalisation of the CG framework and allocations Reporting as per conditional grant Database management Payment approval Invoice management Implementation (Fixing the issues) 01 April 2017 to 31 March 2019

RESPONSIBILITIES OF NATIONAL DEPARTMENT Monitoring of implementation, progress and compliance to conditional grant framework; Provide the guidelines and criteria for the development and approval of Business Plans; To approve the Business Plan submitted by provinces; Monitor implementation through project site visits and provide support on a monthly and/or quarterly basis; Submitted the allocation criteria for 2017 MTEF provincial allocations and the Conditional Grant Framework to National Treasury by 30th November 2016; Comply with prescribed terms and conditions of the national transferring officer outlined in the Division of Revenue Act (DoRA); Submit monthly financial reports to National Treasury 15 days after the end of the month; Consolidate and submit quarterly performance reports to National Treasury within 45 days after the end of each quarter; Monitor the utilisation of the grant against the set outcomes and take appropriate action in cases of non-compliance; Submit an annual evaluation report after the end of the 2017/18 financial year;

RESPONSIBILITIES OF PROVINCES Appointment and management of service providers; Develop Business Plans and submit after they get signed off by Heads of Department to national DSD; Provinces to implement the Business Plans as approved by national department (national should be notified in writing about deviations before implementation can take place); Comply with terms and conditions of the receiving officer outlined in the Division of Revenue Act (DoRA); Submit monthly financial reports to National Treasury 15 days after the end of the month; Submit quarterly performance reports to national department within 30 days after the end of each quarter; 18 November 2018

TOTAL ALLOCATION TO PROVINCES Column A Column B Allocation MTEF Estimates 2017/18 2018/19 2019/20   R'000 Eastern Cape 56 365 86 968 91 830 Free State 18 398 25 903 27 346 Gauteng 38 489 61 883 65 344 KwaZulu-Natal 71 879 112 347 118 629 Limpopo 41 085 62 414 65 901 Mpumalanga 25 799 39 989 42 223 Northern Cape 13 761 18 127 19 139 North West 32 686 51 692 54 581 Western Cape 19 150 31 477 33 235 Total 317 612 490 800 518 228

PAYMENT SCHEDULES PROVINCE Actual /proposed payment date Actual amount Q1 Actual/proposed payment date Actual/proposed amount Q2 Q3 Q4 Total amount for 2017/18 EC 17 May 14 039 822 31 July 14 245 532 31 October 14 039 820 30 January 2018 14 039 826 56 365 000 FS 5 929 781 14 July 5 953 217 5 952 217 562 785 18 398 000 GP 9 221 570 9 821 570 9 822 930 9 622 930 38 489 000 KZN 30 June 16 229 250 29 September 19 710 250 29 December 31 March 2018 71 879 000

PAYMENT SCHEDULES PROVINCE Actual /proposed payment date Actual amount Q1 Actual/proposed payment date Actual/proposed amount Q2 Q3 Q4 Total amount for 2017/18 LIM 17 May 10 346 250 31 July 10 246 250 31 October 30 January 2018 41 085 000 MPU 6 460 848 03 July 6 414 810 2 October 6 427 594 15 January 2018 6 495 748 25 799 000 NC 5 454 393 3 440 250 3 439 676 1 426 679 13 761 000 NW 9 287 985 15 August 15 November 7 055 015 32 686 000 WC 4 787 500 19 150 00

NATIONAL PROGRESS TO DATE Consultations with provinces have been done; Final criteria for qualifying ECD centres has been agreed between National, Provinces and National Treasury; Standard operating procedures document has been developed; Business Plan was developed and sent to provinces; The terms of reference for the appointment of service providers have been developed with provinces; Invoice payment management and process finalised; Conditional Framework linked to the Division of Revenue Act (DoRA) has been developed, finalised and submitted to National Treasury; Levels of registration framework for ECD centres has been developed and being finalised through consultation with provinces and environmental health professionals; Guidelines for implementation of the ECD Conditional Grant have been developed and finalized (Maintenance Grant Component); Service Level Agreements for maintenance and subsidy have been developed;

NATIONAL PROGRESS TO DATE All provinces have submitted their Business Plans to national DSD; Payment schedule has been approved by the Director General and submitted to National Treasury; Payments of the grant will be done to provinces on a quarterly basis and the first payment to be done by end of May 2017; Conditional Grant Project Team to provide technical support to provinces on subsidies and infrastructure is being put in place through the Human Resource unit; The following approved documents were forwarded to provinces: 1.Service Level Agreement (SLA) template for the Subsidy and maintenance 2.Guidelines for the conditional grant; 3.Checklist for submission of claims to National DSD/ Claim Certificate; 4.The approved ECD Conditional Grant Framework. 5. Payment schedules

PROVINCIAL PROGRESS TO DATE EASTERN CAPE To sign Service Level Agreements (SLA) by 31 May 2017 The claim certificate to be sent by 7 June 2017 Pre-implementation workshop to be held with districts to give guidance on implementation. They have advertised posts for administration of the grant, the closing date is 26 May 2017 FREE STATE To submit the SLA and claim form documents to National by 26 May 2017 SLA not signed yet, the delay of approval of sites to benefit from grant was caused by the social work strike. GAUTENG SLAs will be signed by the 31 May 2017 The claim certificate will immediately follow thereafter Posts for the administration of the grant will be advertised by 31 May 2017 whilst existing personnel continue to administer the grant

PROVINCIAL PROGRESS TODATE KWAZULUNATAL SLA submitted to cluster Chief Directorates to be signed by 25 May 2017 The claim will be compiled once contracts have been signed with service providers. Appointment of staff will be finalized by 29 May 2017 for assumption of duty by 01 June 2017. LIMPOPO Service Level Agreements will be signed by 31 May 2017 Documents for the release of funds will be sent thereafter. Currently conducting verification for qualifying children, the process to be finalised by 19 May 2017. 18 November 2018 Audit Committee

PROVINCIAL PROGRESS TO DATE MPUMALANGA They are currently signing SLAs with service providers and anticipating to complete the process by 26 May 2017. Posts have been advertised closing date was 12 May 201. Human resource unit is finalising the process. NORTHERN CAPE They are being assisted by their infrastructure unit of as well as COGHSTA and LOCAL authority building inspectors. The upgrades of the centres will be done by service providers appointed through supply chain procedures. Posts advertised to shortlist by 19 May 2017

PROVINCIAL PROGRESS TO DATE NORTH WEST Pre implementation workshop will be held with district officials to give guidance on the implementation workshop SLAs will be signed by the 31 May 2017 Claim certificate will be sent to National Office by 07 June 2017 Posts to be advertised by 21 May 2017 Planning to sign SLAs with service providers by end of May 2017 WESTERN CAPE Not yet submitted any claims as they are still in process of finalising allocations for children qualifying for subsidy with their funding unit SLA submission for approval of the identified service provider was completed and is in the process of being signed by the senior management and executive First payment will be made by end June 2017 The province will appoint service organisations/providers currently providing support to the province

NUMBER OF CENTRES TO BENEFIT FROM MAINTENANCE GRANT PER PROVINCE Total Gauteng 15 Western Cape 53 Northern Cape 66 North West 48 Free State 79 Mpumalanga 62 Limpopo 98 KwaZulu Natal 117 Eastern Cape 180 Grand Total 718 18 November 2018 Audit Committee

ADMINISTRATION FOR THE IMPLEMENTATION OF THE GRANT National DSD have allocated R2.3 million for administrative management of the grant; Provinces are to utilise R2.1 million from their conditional grant allocation for administrative management of the grant, this includes capacity to manage the grant and funding for maintenance improvement assessments of ECD centres. Proposed Administration Support for National 1 Project Manager, 3 ECD project coordinators(subsidy), 3 infrastructure coordinators, 3 state accountants and 2 administration officers. Proposed Administration Support for Provinces Programme coordinators(subsidy) x 9, Project coordinators(maintenance)x9 Administration officer x9, Chief Quantity Survey x9

WAYFORWARD National DSD will continue to meet with provinces and provide technical support, for instance a meeting is being planned for early July 2017.

Thank you!!! 18 November 2018 Audit Committee