Projected provincial Budget Outcome of Conditional Grants as at 30 September 2006 Select Committee on Finance Presentation by Free State Provincial Treasury

OBJECTIVES To brief the Select Committee on Finance on the actual and projected Conditional Grant outcomes as at 30 September 2006 Aggregate projected expenditure Trends in allocations and projected expenditure of conditional grants

2006/2007 Budget Breakdown of budget Equitable Share R9,544 billion (82.1%) Conditional Grants R1,687 billion (14.5%) Own revenue R 395 million ( 3.4%) Total Provincial Budget R11,626 billion

SECOND QUARTER PROVINCIAL EXPENDITURE ANALYSIS Actual second quarter expenditure = R5,484 billion (47.2%) Total projected spending R11,994 billion (103.2%) against budget of R11,626 billion Net projected over expenditure amounts to R367 million (3.2%) compared to R87 million (0.7%) after first quarter Over expenditure by 9 departments = R415 million (3.6%) Under expenditure by 3 departments = R48 million (0.4%)

SECOND QUARTER PROVINCIAL EXPENDITURE ANALYSIS (continue) Departments projecting to overspend Premier = R1 million (0.9%) Legislature = R12 million (16%) Tourism = R12 million (5.2%) Health = R167 million (5.1%) Education = R133 000 (0%) Public Works, etc. = R216 million (20.2%) Safety = R1 million (2.5%) Agriculture = R4 million (1.7%) Sport = R3 million (2.4%)

PROJECTED AGGREGATE EXPENDITURE AS AT 30 SEPT 06 DEPARTMENT Exp until 30/9/06 Proj (Oct 06 – Mch 07) 2006/07 Total Proj exp 2006/07 Budget Projected (Over)/Under exp R’m % (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Premier 46 50.4 47 50.5 93 100.9 92 -0.9 Provincial Legislature 38 50.6 48 65.4 86 116.0 74 (12) -16.0 Tourism 40.0 150 65.3 242 105.2 230 -5.2 Provincial Treasury 45 37.7 68 56.9 113 94.7 120 7 5.3 Health 1,628 50.1 1,788 55.0 3,416 105.1 3,250 (166) -5.1 Education 2,544 48.3 2,728 51.7 5,272 100.0 Social Development 169 40.5 210 50.3 379 90.8 418 39 9.2 Local Gov & Housing 274 38.2 441 61.4 715 99.6 718 3 0.4 Works, Roads & Transport 462 43.3 821 76.9 1,283 120.2 1,066 (217) -20.2 Safety, Security & Liaison 13 41.3 19 61.2 32 102.5 -2.5 Agriculture 107 47.9 53.8 227 101.7 223 -1.7 Sport 66 49.8 69 52.5 135 102.4 131 -2.4 TOTAL 5,484 47.2 6,509 56.0 11,993 103.2 11,626 (367) -3.2

AGGREGATE EXPENDITURE ON CONDITIONAL GRANTS AS AT 30 Sept 2006 Second quarter expenditure on Conditional Grants amounts to R796 million which equals: 47.2% of the Conditional Grant budget of R1,687 billion; 99.2% of received/transferred C-grant funds amounting to R802 million; 14.5% of total provincial second quarter expenditure of R5,484 billion. Departments project to spend the total 2006/07 Conditional Grant allocation

Expenditure on C-grants as at 30 Sept 2006 Department Budget Expenditure Projections Proj Exp Proj Under exp R’m % (1) (2) (3) (4) (5) (6) (7) (8) (9) Agriculture 28 9 31.3 19 68.7 Education 103 69 66.9 34 33.1 Health 780 385 49.4 395 50.6 Housing 523 217 41.5 306 58.5 Sport and Recreation SA 10 3 25.8 7 74.2 PIG 243 113 46.5 130 53.5 SUB-TOTAL 1,687 796 47.2 891 52.8 OIG 409 211 51.5 198 48.5 TOTAL 2,096 1,006 48.0 1,089 52.0

Conditional-grants by Grant Type as at 30 Sept 2006   Conditional Grant Original budget Exp Proj Projected Expenditure Projected Under Exp Exp as % of bud Proj as % of budget R'm % Agriculture  28,421 8,886 19,535 31.3 68.7 Comprehensive Agricultural Support Programme 25,306 8,050 17,256 31.8 68.2 LandCare Programme: Poverty Relief & Infrastr Dev 3,115 836 2,279 26.8 73.2 Local Gov & Housing  522,601 217,187 305,414 41.6 58.4 Integrated Housing Subsidy Grant 216,780 305,821 41.5 58.5 Education 162,476 123,321 39,155 75.9 24.1 Provincial Infrastructure Grant 59,268 54,283 4,985 91.6 8.4 Further Education and Training College Sector Recapitalization 30,000 100.0 0.0 HIV and Aids (Life Skills Education) Grant 8,424 4,812 3,612 57.1 42.9 Primary School Nutrition Programme Grant 64,784 34,226 30,558 52.8 47.2

Conditional-grants by Grant Type as at 30 Sept 2006   Conditional Grant Original budget Exp Proj Projected Expenditure Projected Under Exp Exp as % of bud Proj as % of budget R'm % Health 779,992 385,062 616,485 49.4 50.6 Health Professions Training and Development Grant 92,517 57,535 34,982 62.2 37.8 Comprehensive HIV and Aids Grant 142,265 48,604 93,661 34.2 65.8 Hospital Revitalisation Grant 45,673 21,612 24,061 47.3 52.7 National Tertiary Services Grant 458,043 246,102 211,941 53.7 46.3 Forensic Pathology Services 41,494 11,209 30,285 27.0 73.0 Sport, Arts, Culture, Science and Technology  9,780 2,520 7,260 25.8 74.2 Mass Sport and Recreation Participation Programme Public Works, Roads & Transport  183,410 58,702 124,708 32.0 68.0 Provincial Infrastructure Grant Total IYM Conditional Grants 1,686,680 795,271 891,409 47.2 52.8

Detail on Conditional Grants per department: Agriculture Agriculture spent 31.3% or R8,9 million of their total Conditional Grant allocation of R28 million and project to spend the remainder of the allocation of both grants. Budget Outcome per grant CASP: Budget = R25 million Second quarter expenditure = R8 million (31.8%) LandCare Grant: Budget = R3 million Second quarter expenditure = R0,8 million (26.8%)

Detail on Conditional Grants per department: Local Government and Housing Local Gov and Housing spent 41.5% or R216,8 million of the Housing fund allocation of R522,6 million during the first two quarters and project to spend the remaining R305,8 million by the end of the financial year.

Detail on Conditional Grants per department: Education First two quarters’ expenditure by Education (including PIG) amounts to R123 million or 75.9% of their total Conditional Grants allocation of R162 million and they project to spend the remainder by the 31st of March 2007. Budget Outcome per grant Further Education and Training College Sector Recapitalization Grant: Allocation = R30 million Second quarter expenditure = R30 million (100%)

Detail on Conditional Grants per department: Education (continue) Budget Outcome per grant (continue) HIV and Aids Grant: Allocation = R8,4 million Second quarter expenditure = R4,8 million (57.1%) National School Nutrition Programme Grant: Allocation = R64,8 million Second quarter expenditure = R34, 2 million (52.8%) Provincial Infrastructure Grant: Allocation = R59 million Second quarter expenditure = R54 million (91.6%)

Detail on Conditional Grants per department: Health Health spent 49.4% or R385 million of their Conditional Grant allocation of R780 million and they project to spend the total budget by the end of the financial year. Budget Outcome per grant HIV and Aids Grant: Allocation = R142 million Second quarter expenditure = R48,6 million (34.2%) Forensic Pathology Services Grant Allocation = R41 million Second quarter expenditure = R11,2 million (27%)

Detail on Conditional Grants per department: Health (continue) Budget Outcome per grant (continue) Health Professions Training and Development Grant: Allocation = R92,5 million Second quarter expenditure = R57,5 million (62.2%) Hospital Revitalisation Grant: Allocation = R45,7 million Second quarter expenditure = R21,6 million (47.3%) National Tertiary Services Grant: Allocation = R458 million Second quarter expenditure = R246 million (53.7%)

Detail on Conditional Grants per department: Sport, Arts, Culture Sport, Arts, Culture spent 25.8% or R2,5 million of their 2006/07 allocation of R9,78 million for the Mass Sport and Recreation Participation Programme grant during the first two quarters and project to spend the remainder before the end of the financial year.

Detail on Conditional Grants per department: Public Works, Roads and Transport Public Works, Roads and Transport spent 32% or R58,7 million of their Provincial Infrastructure Grant allocation amounting to R183 million after two quarters and they project to spend the total budget by the end of the financial year.

National Treasury (Provincial Infrastructure grant) Second quarter expenditure of the Provincial Infrastructure grant (included in discussions per department) amounts to R113 million or 46.6% of the allocation of R242,7 million from National Treasury and projections indicate that the total allocation will be spent by the end of the financial year. Two departments benefit from this grant: Public Works, Roads and Transport Allocation = R183,4 million (75.6%) Second quarter expenditure = R58,7 million (32%) Education Allocation = R59,3 million (24.4%) Second quarter expenditure = R54,3 million (91.6%)

Projected aggregate CAPITAL expenditure as at 30 Sept 06 DEPARTMENTS Capital Transfers Capital Assets Total Capital (Over)/Under Exp Bud R’m Exp Exp as % of Bud % of Bud (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Education* 156 70 60 14 186 81 43.3 Health 163 88 54.2 (90) -55.0 Soc Development 12 4 58.0 1 6.9 Tourism 19 19.0 (20) -104.7 Housing 544 221 8 552 222 40.1 0.1 Public Works 281 123 43.9 (191) -68.1 Agriculture 24 11 44.2 -13.5 Sport 26 15 56.9 Total 700 291 593 260 1,293 551 42.6 (303) -24.1 The budget of Education iro Capital transfers includes R117 million transferred to Public Works of which R67 million was spent R30 million to FET colleges of which R2,7 million was spent About R9 million to schools – no feedback on amounts spent Column 3 only reflects the amount spent (R70 m) and not transferred (R147 m).

Areas for Intervention Address deficiencies in capacity in different Departments Identify gaps in infrastructure plans & improve prioritization for 2007/08 MTEF Address deficiencies in information and analysis that supports planning Consider options to improve delivery this year and preparation for next year Identify and implement in-year interventions to ensure that: 06/07 budgets are spent Capacity to deliver of infrastructure is consistently improved 21

Areas for Intervention Quarterly Infrastructure Review Meetings now under-way Provincial Treasury engage with respective departments on a monthly basis 22

THANK YOU