Gauteng Provincial Treasury: Head of Department Gauteng Provincial Preliminary Expenditure for 2013 and Gauteng Treasury Spending Gauteng Provincial Treasury: Head of Department

Table of Contents Provincial equitable share and conditional grant receipts and expenditure Cash allocations Ring-fenced funds Summary of funds requested against budget Summary of GPG Revenue Collections Summary of GPG Expenditure (Preliminary outcome) Recommendations GPT Expenditure estimates (economic classification) GPT Expenditure estimates (per programme) GPT Non Financial Performance

Provincial Equitable Share and Conditional Grants Receipts YTD   1 2 3 4=1-2 5=4/1 Period National Treasury Transfers (ES, CG) per payment schedule R’000’ Actual Funds Requisitioned by GPG Departments Projected Expenditure Variance % First Quarter 17,556,667 18,731,840 17,502,367 -1,175,173 -6.69 Second Quarter 17,822,725 18,015,944 18,597,511 -193,219 -1.08 Third Quarter 17,733,301 20,275,470 18,566,358 -2,542,169 -14.34 Fourth Quarter 17,744,918 17,663,371 16,633,374 81,547 0.46 Total 70,857,611 74,686,625 71,299,610 -3,829,014 -5.40 Own Revenue 3,946,259 - 1.00 GRAND TOTAL 74,803,870 71,699,610 117,245 0.16%

Provincial Equitable Share and Conditional Grants Receipts YTD… At year end, a total of R74.8bn was received by the province. Of which R70.9bn was transfers from national in the form of equitable share and conditional grants, and Own revenue collections by the province amounted to R3.95bn. The preliminary outcome of GPG departments is at R71.7bn against national transfers. This means that without provincial own revenue, the province would have largely overspent. An amount of R582 000 for Mass Sport and Recreation Grant under GDSACR was not transferred by the National Department of Sport and Recreation due to their internal challenges. Provincial own revenue plays a significant role in funding the province.

Ring-fenced funds- end of March 2013 Vote Departments Infrastructure (Earmarked Equitable Share)   R’000’ Conditional Grants Total 1 Office of the Premier - 2 Provincial Legislature 3 Economic Development 4 Health 388,202 5 Education 61,348 6 Social Development 4,019 4,021 7 Local Government and Housing 3,418 2,321 5,739 8 Roads and Transport 34 8,768 8,801 GMA (Gautrain Rapid Link Project) 9 Community Safety 10 Agriculture and Rural Development 2,310 286 2,596 11 Sport, Arts, Culture and Recreation 1,875 12 Finance 13 Gauteng Treasury 14 Infrastructure 36,166 2,196 38,362 TOTAL 45,947 464,998 510,945

Funds requested against budget - YTD Vote Department Total Voted Funds R’000’ Funds Requested Financial Year-End Variance Percentage Requested YTD 1 Office of the Premier 249,810 100% 2 Provincial Legislature 476,305 3 Economic Development 874,412 4 Health 27,191,294 27,191,594 5 Education 28,500,245 6 Social Development 2,543,918 7 Local Govt and Housing 4,737,125 8 Roads and Transport 4,138,957   GMA (Gautrain) 1,598,711 9 Community Safety 436,798 10 Agric and Rural Develop 517,659 11 Sport, Arts, Culture and Recreation 437,938 437,356 582 99.87% 12 Finance 1,333,265 13 Gauteng Treasury 238,610 14 Infrastructure 1,411,281 TOTAL 74,687,207 74,686,625

Net Interest payments/receipts on CPD Net Interest Position- Comparative Amount Q1 R’000’ Q2 Q3 Q4 Total YTD Interest Paid - Interest Received 44,527 44,779 41,079 47,105 177,489 Net Gain/Loss Average CPD rate (Dr/Cr)   5.02%

Summary of Revenue collected GPG Department 2011/12 FY collection (Audited) Preliminary YTD (2012/13) Collection March 2013 Adjusted Appropriation (2012/13) YTD (2012/13) Collection March 2013 % contribution YTD Collection less Adjusted Appropriation   R'000 % Office of the Premier 465 277 246 112.60 31 Economic Development 614,726 721,756 663,762 108.74 57,994 Health Department 449,362 476,961 471,551 101.15 5,410 Education 44,452 42,705 46,675 91.49 -3,970 Social Development 4,143 5,488 3,494 157.07 1,994 Local Government & Housing 20,074 13,135 5,317 247.04 7,818 Roads and Transport 2,283,758 2,459,790 2,406,856 102.20 52,934 Community Safety 13,781 20,609 12,681 162.52 7,928 Agriculture and Rural Development 838 1,631 1,566 104.15 65 Sport, Arts, Culture & Recreation 295 183 365 50.14 -182 Finance 2,572 2,308 1,813 127.30 495 Provincial Treasury 164,758 187,828 150,000 125.22 37,828 Infrastructure Development 15,636 13,636 15,000 90.91 -1,364 Total 3,614,860 3,946,307 3,779,326 104.42 166,981 Source: IYM March 2013 and Adjusted Estimates of Provincial Revenue & Expenditure 2012 Red Highlighted: Under collection as at end of March 2013

Summary of Collected Revenue Total own revenue collection as at end of March 2013 amounted to R3.946 billion (This amounts to 104.42%). The under collection is mostly from non revenue generating departments The GPG has exceeded its adjusted appropriation by 4.42% and exceeded its targeted collection by R166.981 million. Most of the GPG departments exceeded their 2012/13 financial year adjusted appropriation except GDE, DID and SACR that have under collected. Major collectors performed as follows: DED estimated to collect R663.762 million collected R721.756 million. GDoH has collected R476.961 million or 101.15% of their estimate of R471.551 million. DRT adjusted appropriation was R2.406 billion but managed to collect R2.459 billion or 102.20%. GPT has collected R187.828 million or 125.22% of their adjusted appropriation. The Department adjusted upwards by R95 000 from a main appropriation of R55 000.

Summary of Preliminary GPG Expenditure Department Original Budget Allocation Adjustments Increase/ (Decrease) Adjusted Budget Total Expenditure Actual Expenditure (Against Adj Budget) Outcome - Under/ (Over)   R’000’ % Office of the Premier 236,734 13,076 249,810 238,369 95% 11,441 Gauteng Provincial Legislature 455,000 21,305 476,305 465,232 98% 11,073 Economic Development 912,008 (37,596) 874,412 845,278 97% 29,134 Health 24,519,336 2,671,958 27,191,294 26,962,073 99% 229,221 Education 27,150,751 1,350,073 28,500,824 28,250,101 250,723 Social Development 2,490,492 53,426 2,543,918 2,525,066 18,852 Local Government and Housing 4,737,125 4,631,036 106,089 Roads and Transport 4,363,790 1,373,878 5,737,668 5,568,287 169,381 Community Safety 435,946 852 436,798 415,705 21,093 Agric. and Rural Development 493,976 22,503 516,479 516,853 100% (374) Sport, Arts, Recr and Culture 392,837 45,101 437,938 433,718 4,220 Finance 1,322,700 10,565 1,333,265 1,305,414 27,851 Gauteng Provincial Treasury 428,934 (190,324) 238,610 225,202 94% 13,408 Infrastructure Development 1,371,052 40,229 1,411,281 1,378,114 33,167 TOTAL 69,310,681 5,375,046 74,685,728 73,760,448 925,280

Summary of GPG Expenditure The main budget was adjusted upwards by R5.4 billion, from R69.3bn to R74.7bn. The increase was mainly for accrual payments in Health and ICS for GPG departments, and decentralisation of functions from Finance to GPG departments. Preliminary expenditure is at R73.7bn, under spending by R925mil. R500 million of the R925.3 million is commitments and invoices that could not be processed by the end of the financial year. Gauteng Provincial Treasury received requests for rollovers from GPG departments amounting to R500 million which corresponds to R510.945 million available cash and has assessed the request as part of the established budget processes. The difference of R425.3 million under-spending is just on paper because it is accounted for by suspense accounts, surrenders and BAS transaction processing rules which causes disjuncture between under-spending and available cash.

Summary of GPG Expenditure… Almost all GPG departments are showing a slight under-spending which can be explained by commitments and invoices that could not be processed except GDARD which has overspent by R374 thousands The total provincial wage bill was at R40.3bn, from which the province spent R40 billion, with R280.6mil remaining unspent. Under goods and services: the province overspent by R528 million, mainly due to funding pressures in education and health;

2012/13 Preliminary Infrastructure Expenditure Department Main Budget 2012/13 Adjusted Budget 2012/13 Actual Expenditure at end of March 2013 % Expenditure Outcome Vote 04: Health 1 484 046 1 481 422 1 243 059 84% 238 363 Vote 05: Education 1 245 336 1 585 336 1 654 737 104% -69 401 Vote 06: Social Development 95 426 125 424 121 401 97% 4 023 Vote 07: Local Government And Housing 4 058 778 4 052 439 99.8% 6 339 Vote 08: Roads And Transport 1 244 980 1 713 477 1 561 128 91% 152 349 Vote 10: Agriculture And Rural Development 4 000 10 000 10 337 103% -337 Vote 14: Infrastructure Development 127 363 87 983 69% 39 380 Grand Total 8 259 929 9 101 800 8 731 084 96% 370 716

2012/13 Preliminary Infrastructure Expenditure Infrastructure budget was adjusted upwards by R 841.8 million to R9.1 billion. GDE budget adjusted upward by R340 million and DRT adjusted upwards by R439 million. At the end of the financial year, an expenditure of R8.7 billion (96%) is recorded with an under-expenditure outcome of R370.7 million. DoH, DRT and DID recorded a notable under-expenditure whilst the GDE, GDARD recorded an over-expenditure outcome

2012/13 Preliminary Infrastructure Expenditure In 2012/13 financial year, various alternative delivery initiatives were introduced including amongst the others; utilisation of alternative delivery material and contracting approaches. At the end of the financial year, an expenditure of R8.7 billion (96%) is recorded with an under-expenditure outcome of R370.7 million which is a marked improvement taking into account commitments and invoices that could not be accommodated by the end of the financial year. There is a slight improvement on the alignment of planning with the budget cycle, however some projects and programmes have been affected by the long turn-around on SCM. Gauteng Provincial treasury is currently working a way to improve supply chain management processes for all the infrastructure departments.

2012/13 Preliminary Conditional Grant Expenditure Annual Grant Allocation Adjustments Increase/ (Decrease) Adjusted Annual Budget Transfers from National Amount transferred to Dept. Total Actual Exp. Actual YTD Exp. Outcome (Over) / Under   R’000’ R’000 % Agriculture and Rural Dev. Comprehensive Agric. Support Prog. 48 016 12 458 60 474 100% - Ilima/Letsema Projects grant 16 798 423 17 221 Land Care Programme 6 246 Education Dinaledi Schools Grant 20 139 HIV & Aids (Life Skills Education) 29 147 19 525 67% 9 622 National School Nutrition Prog. 548 690 70 836 619 526 587 466 95% 32 060 Tech. Secondary Schools Recap. 25 000 23 524 48 524 39 312 81% 9 212 Health Comprehensive HIV & Aids 1901 293 1905 215 3 922 Health Infrastructure 110 361 73 818 36 543 Health Prof. Train & Dev. 725 310 685 147 94% 40 163 Hospital Revitalisation 795 439 411 139 52% 384 300 National Health Insurance 31 500 8 068 26% 23 432 National Tertiary Services 3044 567 2790 854 2682 687 88% 361 880 Nursing Colleges & Schools 12 480 7 702 62% 4 778 Social Sector EPWP Incentive 29 072

2012/13 Preliminary Conditional Grant expenditure Annual Grant Allocation Adjustments Increase/ (Decrease) Adjusted Annual Budget Transfers from National Amount transferred to Dept. Total Actual Exp. Actual YTD Exp. Outcome (Over) / Under   R’000’ R’000 % Local Govt. and Housing Human Settlements 4003 776 - 4001 568 100% Infrastructure Development Devolution of Property Rates 281 469 28 083 309 552 309 502 Sport, Arts, Culture and Recr. Mass Sport & Recreation Participation 73 930 682 74 612 75 522 102% -1 592 Community Library Services 56 452 1 010 57 462 55 877 99% 575 Transport Provincial Roads Maintenance 579 081 424 038 1003 119 639 448 995 835 13 284 Public Transport Operations 1625 746 1587 923 98% 37 823 TOTAL 15622 619 561 054 14525 566 13710 799 13310 124 13579 458 93% 956 002

Preliminary Conditional grants Expenditure Overall provincial grant funding was increased by R596mil from R15.6bn to R16.2bn. A total amount of R15.2bn (or 93%) was spent at the end of the year. The major under-spending was recorded in the department of Education, Health and Transport. Treasury will conduct a deeper analysis on the performance of grants to also assist in finding ways to improve grant performance during the course of 2013/14.

Conclusions The overall Q4 financial performance shows a general improvements in the management of finances in the province. This level of performance shows the benefits from the cost-containment measures implemented. The management of cash has significantly improved Provincial Own revenue should furthermore be given priority in order to fund provincial imperatives

Gauteng Treasury Spending

GPT Preliminary Expenditure 2013  PROGRAMMES FINAL APPROPRIATION R’000 ACTUAL EXPENDITURE R ’000 VARIANCE R ’000 (%) Administration 63 019 59 768 3 251 (5%) Sustainable Resource Management 95 284 85 341 9 943 (10%)  Financial Governance 36 482 35 994 488 (1%) Provincial Accounting Services 43 825 43 824 (0%) TOTAL 238 610 224 927 13 683 (6%)

GPT Expenditure Estimates over the MTEF  ECONOMIC CLASSIFICATION FINAL APPROPRIATION R ’000 ACTUAL EXPENDITURE VARIANCE Compensation of Employees 141 127 141 098 29  Goods & Services 44 027 32 139 11 888  Transfers & Subsidies 50 110 50 108 2 Capital 3 346 1 573 1 773 TOTAL 238 610 13 683 (6%)

GPT Non Financial Performance Actual Achievement 2011/12 Planned Target 2012/13 Actual Achievement 2012/13 Deviation from planned target to actual achievement for 2012/13 Comments on deviations New indicator Develop, approve and implement security vetting strategy by 31 March 2013 100% of new employees were security vetted according to SSA guidelines before appointment for criminal record, citizenship, credit record and employment history. The department was required to Implement the DPSA instruction to vet 100% of all new employees and Not develop a separate security vetting strategy as per the Target in the APP N/a   Provincial Adjustment budget tabled in November 2011. Table 1 provincial Adjustment budget in November 2 Provincial Adjustment budgets tabled at legislature in November 2012 and March 2013. The tabling of March adjustment budget was to allocate funds that became available after the November 2012 adjustment. N/A New Indicator Prepare and submit 4 IGR forum reports on Indaba, CFO’s, Debt, Grant and Internal Audit 3 IGR’s forum reports on Indaba, CFO’s, Debt, Grant and Internal Audit prepared and submitted. Chief Financial Officers Forum and Municipal Finance Indaba for quarter 3 cancelled due to non-availability of key stakeholders.

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