1 THIRD QUARTER ENDING 31 DECEMBER 2006 2007-02-14 NCOP PRESENTATION ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE – NORTH WEST THIRD QUARTER ENDING 31 DECEMBER 2006 2007-02-14

PURPOSE To provide information to the NCOP on data trends in allocations, transfers and actual expenditure of all conditional grants and capital expenditure managed by the department. A brief assessment of the monitoring capacity for the period ending 31 December 2006. Over/under spending and the capacity constraints. A brief indication of achievements.

OVERVIEW 6 conditional grants and one Fund from Belgium managed by NWDoH. Constitutes 16% of total budget. There has been a marked increase in the allocations and expenditure for the province with a view of closing the equity gap with other provinces. Strengthening of project management in relation to conditional grants has improved the monitoring capacity.

3RD QUARTER OVERALL DEPARTMENT’S PERFORMANCE. Total allocation 3rd Quarter Expenditure 3rd Qrt. %. Year To Date Expend. %. Year To date Exp.%. 3,616,004 2,489,967 69% 2,811,612 78%

OVERALL PERFORMANCE HIGHLIGHTS. Expenditure patterns over the months have picked up in December 2006. It is expected that there will be no “March spike “ specifically in capital expenditure as the bulk of the expenditure was incurred in December for construction work mainly for the Infrastructure and Clinic Building projects. The increased expenditure was also related to performance remuneration which was delayed in the second quarter due to inadequate funding. Funding was addressed in the Adjustment Estimates. Payment outstanding laboratory services was also done in December after the additional allocations from the Adjustment Estimates.

PROJECTIONS TO MARCH’07. The Department projects expenditure to be on target at the end of the financial year based on the following: Expenditure for personnel will cover all outstanding performance remuneration costs. Expenditure for equipment will include the payment for the delivered 46 ambulances; 26 Patient Transport vehicles; 6 Forensic vehicles and 6 Mobile clinics. (R45m). Payment for all outstanding laboratory costs for the National Health Laboratory Services (NHLS).(R30m). Accruals are expected to be reduced in comparison with the previous financial year ( 2005/200) which was at R181m.

3RD QUARTER OVERALL CONDITIONAL GRANTS PERFORMANCE. Total allocation 3rd Quarter Expenditure 3rd Qrter %. Year To Date Expend. %. Year To date Exp.%. 595,470 411,312 69% 449,190 76%

3RD QRT. GRANTS FOR THE YEAR 2006/07. BUD. ROLL-OVER TOTAL AVAIL. AMT RECEIVED AMT SPENT % SPENT COMPREHENSIVE HIV & AIDS 142,316 6 000 148,316 106,740 107,837 73% HOSPITAL REVITALIZATION 190,884 32,704 223,588 157,586 147,541 65% HEALTH PROFESSION TRAINING & DEVELOPMENT 62,564 46,925 50,542 81% NATIONAL TERTIARY SERVICES GRANT 69,380 52,038 42,289 61% FORENSIC PATHOLOGY SERVICES 29,440 10,666 40,106 22,080 8,262 21% INFRASTRUTURE GRANT 51,000 50,874 46,052 90% TB & HIV COLLABORATION 516 387 75% TOTAL 546,100 49,370 595,470 436,759 411,312 69%

ANALYSIS OF VARIANCE. The overall expenditure is at 69% against the 75% target, with a 6% variance. The Comprehensive HIV & AIDS grant is almost on target at 73%. Grants above target are : Health Professional Training and the Infrastructure grant while the TB & HIV Collaboration donor fund is also on target. The National Tertiary service grant is not on target, however has committed funds in equipment such as CT Scan for the Rustenburg Hospital and X-ray machines for both Potchefstroom and Tshepong hospitals. This will bring the expenditure on target. The Hospital Revitalization grant is not on target due to delays in the construction on Moses Kotane and Vryburg hospitals. These are currently being addressed. The projected under spending amounting to R35m is earmarked to address the envisaged shortfall in the Infrastructure grant. The under expenditure in the Forensic Pathology Services grant is also being addressed. There are commitments for delivery of office furniture amounting to R2m as well as the envisaged claim from SAPS amounting to R3,5m for expenditure incurred for salaries. The commitments are expected to reduce the projected amount to be rolled over.

EXPENDITURE YEAR TO DATE GRANT BUDGET 1ST QRT 2ND QRT 3RD QRT YTD % SPENT COMPREHENSIVE HIV & AIDS 148,316 24,857 54,125 107,837 131,465 89% HOSPITAL REVITALIZATION 223,588 19,675 74,803 147,541 149,104 67% HEALTH PROFESSION TRAINING & DEVELOPMENT 62,564 15,391 34,858 57,645 56,967 92% NATIONAL TERTIARY SERVICES GRANT 69,380 12,862 26,028 45,737 52,800 76% FORENSIC PATHOLOGY SERVICES 40,106 717 2,275 8,950 9,756 24% INFRASTRUTURE GRANT 51,000 12,508 32,299 46,070 47,890 94% TB & HIV COLLABORATION 516 23 389 472 TOTAL 595,470 86,010 224,411 411,312 449,190

OVER/UNDER EXPENDITURE Total amount received for the period under review is: R436,759m. Total amount spent as at end Dec.: R411,312m. The unspent amount is R25,447m which is 6% of the amount received. There is a 6.44% improvement in comparison with 05/06 same period. Total amount spent as at 12TH February 2007 is R449,190m which is 76% of the overall allocation.

PROJECTIONS TO MARCH’07. All conditional grants will be fully utilized with the exception of the Revitalization grant and the Forensic Pathology Services grants. Treasury has been approached for the utilization of R35m of the Revitalization grant for the shortfall in the Infrastructure and Clinic Building projects. Approval is still awaited. Should the request be approved, there will not be roll over of funds for the Revitalization grant. An estimated amount of R10m will have to be rolled over for the Forensic Pathology Services grant.

ACHIEVEMENTS – CAPITAL EXPENDITURE. TARGET – 21 CLINICS 8 Clinics Completed – Churchill, Coldridge, Mothotlung, Setlagole, Tseoge, Disaneng, Vriesgewacht, Austrey, Swaartdam. 10 clinics at completion stage. 1 clinic at window height- level and 2 clinics at roof height. 3 On tender. 11 on Planning

ACHIEVEMENTS – CAPITAL EXPENDITURE. TARGET – 12 CHC’S 1 CHC Completed – Boitekong. 3 CHC’s at completion stage. 4 CHC’s at adjudication stage – Bapong, Tswelelang 2, JB Marks and Letlhabile. 2 CHC’s are on planning - Boikie Tlhapi and Madikwe.

ACHIEVEMENTS – CAPITAL EXPENDITURE. IMPLEMENTATION OF MASTER PLAN: 4 ARV Clinics completed. 3 ARV Clinics under construction. 1 on planning. Master plan of Jubilee Hospital complete. 6 Health Posts under construction.

ACHIEVEMENTS – CAPITAL EXPENDITURE. Rehabilitation of 3 Hospitals. Ganyesa Hospital Rehabilitation –site handed over, the contractor casting foundations. Bloemhof Hospital – Painting of Roof completed, Casting of foundations – 25%, brick work just started. Christiana Hospital -Doctors Quarters – The project is Gaining Momentum – Foundations 100% and Brickwork is 30%.

ACHIEVEMENTS – CAPITAL EXPENDITURE. Rehabilitation of 4 Hospitals on planning stage. Witrand on Planning. Klerksdorp /Tshepong MDR TB Unit on Planning. Potchefstroom Hospital Standby generator – Contractor is on site. Potchestroom Hospital Kitchen – Preparation of Tender documentation. Mafikeng Hospital Orthopaedic Workshop – Internal Finishes.

ACHIEVEMENTS. Transfers to NGOs rendering health services including Home Based Care programme have been completed. Payments to 3168 Community Health Workers / care givers have been effected.

REMEDIAL ACTION. Compliance with PFMA requirements have been tightened. Monitoring tools for different grants have been reviewed and implementation is taking place. Internal capacity is being reinforced specifically with the Forensic Pathology Services and the Revitalization programme.

TRENDS IN EXP. & ALLOCATIONS Year 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 NTSG 38,520 32,891 35,000 38,606 71,889 69,380 81,409 94,114 HPT&D 24,377 52,824 37,112 44,903 64,012 62,564 65,692 68,977 Hosp.Revt. 44,707 6,513 37,981 81,930 70,142 190,884 176,966 231,966 HIV/AIDS 2,253 21,303 31,260 64,619 100,921 142,316 156,429 181,168 HMQI 14,193 12,196 9,407 17,849 Forensic 734 2,230 29,440 22,835 22,158 Infrstrc 8,587 43,971 26,419 22,722 42,174 51,000 70,900

TRENDS IN EXP,TRANSFERS.& ALLOCATIONS Transfers from National Health has been received in full from the first to the third quarter. Allocations for the HIV & AIDS Grant specifically for the ARV programme do not meet the increasing demand. R6m was received additional from NDoH. An additional amount of R64m has been received from the Provincial Treasury as requested by the NWDoH.

CONCLUSION. The department is confident that systems are now in place to monitor the performance of conditional grants in line with DORA hence the improved outcome in comparison with the 2005/06 financial year. Roll over will be limited to only one grant.

CLOSURE Thank you for listening