THE STANDING COMMITTEE ON APPROPRIATIONS FINANCIAL PERFORMANCE PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATIONS FINANCIAL PERFORMANCE AS AT 30 JUNE 2009 20 October 2009

STRATEGIC OBJECTIVES Promoting the coordinated implementation of government’s economic vision and priorities; Promoting direct investment and growth in the industrial and services economy, with particular focus on employment creation; Raising the level of exports and promoting equitable global trade; Promoting broader participation, equity and redress in the economy; and Contributing to Africa's development and regional integration within the NEPAD framework

Five year comparison of budget vs expenditure

ANALYSIS OF THE 2009/10 BUDGET ECONOMIC CLASSIFICATION ANNUAL BUDGET PERCENTAGE Compensation of Employees 470,481 7,4% Goods & Services 548,282 8,6% Capital Assets 35,470 0,6% Transfer Payments made up of: 5,289,959 83,4% Transfers including Agencies 1,448,980 22,8% Incentive Payments 3,840,979 60,6% Total variance 6,344,192 100%

YEAR-ON-YEAR COMPARISON 2008/09 vs 2009/10

OVERVIEW OF EXPENDITURE AS AT 30 JUNE 2009 The YTD expenditure of R1,446b represented 23% of the total allocated budget of R6,344 billion The YTD expenditure represented 90% of the YTD actual drawings of R1,606b from National Treasury (NT) The YTD expenditure represented 83% of the YTD projections of R1,733b that were made at the commencement of the financial year It is a requirement of the NT to provide a projected cash flow for the year at the commencement of each financial year. The department assesses its cash flow requirements on a monthly basis and advises the NT of its requirement for the following month. Hence, the difference between [2] & [3] above

OVERVIEW OF EXPENDITURE AS AT 30 JUNE 2009 1. The YTD variances of Expenditure against actual drawings were:- ECONOMIC CLASSIFICATION ANNUAL BUDGET YTD BUDGET YTD EXPENSES VARIANCE Compensation of Employees 470,481 95,690 89,557 6,133 Goods & Services 548,282 98,531 82,517 16,014 Capital Assets 35,470 2,985 1,114 1,871 Transfer Payments (inclusive of Incentives) 5,289,959 1,409,391 1,273,256 136,135 Total variance 6,344,192 1,606,597 1,446,445 160,152 2. The YTD variances of Expenditure against annual projections were:- ECONOMIC CLASSIFICATION ANNUAL BUDGET YTD BUDGET YTD EXPENSES VARIANCE Compensation of Employees 470,481 95,891 89,557 6,334 Goods & Services 548,282 122,866 82,517 40,349 Capital Assets 35,470 20,674 1,114 19,560 Transfer Payments (inclusive of Incentives) 5,289,959 1,493,079 1,273,256 219,823 Total Variance 6,344,192 1,732,510 1,446,445 286,065

REASONS FOR UNDER-EXPENDITURE The following are some of the reasons for the under-expenditure: Compensation of Employees: Vacancies of 18,5% but reduced from 25% in 01 April 2008 Implementation of the notch increases and performance bonuses Goods & Services: Implementation of cost saving measures in areas such as travel & subsistence, catering, venue & facilities, advertising Outstanding invoices from some of the service providers for research projects. NLA liquor inspections, etc. Some of the projects also commenced later than planned Capital Assets The requirement had substantially reduced and the funds redirected during the adjustments estimate process to priority areas

REASONS FOR UNDER-EXPENDITURE Transfers & Subsidies: Total R180m was not transferred to IDZ’s and agencies due to compliance issues not being finalised ie. the relevant MOU’s, approval of business plans, etc. A total of R38m was unspent with respect to Incentives as fewer claims were received that expected for BPO&O, Film Incentive, Coooperatives and other Critical Infrastructure It should be noted that the spending trend had improved substantially to the extend that as at the end of the second quarter the status was as follows: The under spending based on actual drawings from the NT was only 2,7% The under spending based on annual projections was 6,8%

KEY ITEMS FOR EXPENDITURE MONITORING

Actual = funds requested & received from NT EXPENDITURE PER ECONOMIC CLASSIFICATION [ACTUAL DRAWINGS VS EXPENDITURE] R’000 Revised Budget 2009/10 YTD Drawings Expenditure Variance % Variance Available Budget % Available Compensation of Employees 470,481 95,690 89,557 6,133 6.41% 380,924 80.96% Goods & Services 548,282 98,531 82,517 16,014 2.92% 465,765 84.95% Capital Assets 35,470 2,985 1,114 1,871 62.67% 34,356 96.86% Transfer payments 5,289,959 1,409,391 1,273,256 136,135 9.66% 4,016,703 75.93% TOTAL 6,344,192 1,606,597 1,446,445 160,152 9.97% 4,897,747 77.20% Actual = funds requested & received from NT

EXPENDITURE PER PROGRAMME [ACTUAL DRAWINGS VS EXPENDITURE Revised Budget 2009/10 YTD Drawings Expenditure Variance % Variance Available Budget % Available Administration 416,485 85,767 82,172 3,595 4.19% 334,313 80.27% ITED 173,541 37,238 29,341 7,897 21.21% 144,200 83.09% EEDD 1,308,854 331,777 316,222 15,555 4.69% 992,632 75.84% IDD 415,849 141,697 103,896 37,801 26.68% 311,953 75.02% CCRD 238,595 62,772 60,202 2,570 4.09% 178,393 74.77% TEO 3,442,093 875,569 787,129 88,440 10.10% 2,654,964 77.13% TISA 283,051 60,823 58,879 944 1.55% 223,172 78.85% Marketing 65,724 10,954 7,605 3,349 30.58% 58,119 88.43% TOTAL 6,344,192 1,606,597 1,446,445 160,152 9.97% 4,897,747 77.20% Actual = funds requested & received from NT

YTD projections = forecasts made by Divisions in Feb 09 EXPENDITURE PER ECONOMIC CLASSIFICATION [YTD PROJECTIONS VS EXPENDITURE R’000 Revised budget 2009/10 YTD Projections YTD EXPENSES Variance % variance Available Budget available Compensation of Employees 470,481 95,891 89,557 6,334 6.61% 380,924 80.96% Goods & Services 548,282 122,866 82,517 40,349 32.84% 465,765 84.95% Capital Assets 35,470 20,674 1,114 19,560 94.61% 34,356 96.86% Transfer payments 5,289,959 1,493,079 1,273,256 219,823 14.72% 4,016,703 75.93% TOTAL 6,344,192 1,732,510 1,446,445 286,065 16.51% 4,897,747 77.20% YTD projections = forecasts made by Divisions in Feb 09

EXPENDITURE PER PROGRAMME [YTD PROJECTIONS VS EXPENDITURE Revised budget 2009/10 YTD Projections YTD EXPENSES Variance % variance Available Budget available Administration 416,485 90,274 82,172 8,102 8.97% 334,313 80.27% ITED 173,541 40,696 29,341 11,355 27.90% 144,200 83.09% EEDD 1,308,854 336,867 316,222 20,645 6.13% 992,632 75.84% IDD 415,849 174,300 103,896 70,404 40.39% 311,953 75.02% CCRD 238,595 113,584 60,202 53,382 47.00% 178,393 74.77% TEO 3,442,093 894,123 787,129 106,994 11.97% 2,654,964 77.13% TISA 283,051 61,689 59,879 1,810 2.93% 223,172 78.85% Marketing 65,724 20,977 7,605 13,372 63.75% 58,119 88.43% TOTAL 6,344,192 1,732,510 1,446,445 286,065 16.51% 4,897,747 77.20% YTD projections = forecasts made by Divisions in Feb 09

THANK YOU