Provincial Treasury Western Cape NCOP Select Committee on Finance Public Hearings Conditional Grant and CAPEX 12 February 2007

Outline Conditional grant, infrastructure and capital expenditure 2005/06; 2006/07 third quarter expenditure; Service delivery information; Business plan 2006/07 and 2007/08 process; and Monitoring provincial expenditure.

Conditional Grant, Infrastructure and Capital Expenditure 2005/06

3rd quarter expenditure 4th quarter expenditure CG Expenditure 2005/06   Adjusted budget 3rd quarter expenditure 4th quarter expenditure R'000 % Agriculture Disaster management 18 000 4 500 25.0% 16 435 91.3% Comprehensive Agricultural Support Programme Grant 19 264 8 513 44.2% 19 385 100.6% Land Care Programme Grant: Poverty Relief and Infrastructure Development 3 174 2 194 69.1% 3 275 103.2% Education National School Nutrition Programme Grant 49 321 26 840 54.4% 49 318 100.0% HIV and Aids (Life Skills Education) Grant 11 205 7 709 68.8% 11 443 102.1% Health National Tertiary Services Grant 1 214 684 911 014 75.0% Health Professions Training and Development Grant 323 278 242 453 Hospital Revitalisation Grant 148 038 74 227 50.1% 99 357 67.1% Comprehensive HIV and Aids Grant 82 451 66 815 81.0% 92 649 112.4% Hospital Management and Quality Improvement Grant 17 608 7 997 45.4% 17 937 101.9% Forensic Pathology Services 14 583 - 4 392 30.1% Integrated Nutrition Programme Grant 5 288 2 723 51.5% 5 078 96.0% Conditional Grant Expenditure – 2005/06 3rd and 4th quarter

3rd quarter expenditure 4th quarter expenditure CG Expenditure 2005/06 (2)   Adjusted budget 3rd quarter expenditure 4th quarter expenditure R'000 % Housing Integrated Housing and Human Settlement Development Grant 533 249 363 023 68.1% 100.0% Human Settlement and Redevelopment Grant 29 738 12 904 43.4% 18 601 62.5% Disaster relief 24 500 - 17 911 73.1% Social Services and Poverty Alleviation Social Assistance Transfers Grant 4 002 671 3 010 696 75.2% 3 943 583 98.5% Social Assistance Administration Grant 236 234 134 031 56.7% 236 680 100.2% Integrated Social Development Services Grant 20 034 197 1.0% HIV and Aids (Community-Based Care) Grant 6 089 5 197 85.4% National Treasury Provincial Infrastructure Grant 259 757 175 536 67.6% 91 476 35.2% Cultural Affairs and Sport Mass Sport and Recreation Participation Programme Grant 2 670 2 003 75.0% 2 667 99.9% 7 021 836 5 058 572 72.0% 6 727 521 95.8% Although expenditure was below notional benchmark of 75 per cent for some conditional grants at the end of the 3rd quarter of 2005/06, by the end of the financial year all grants had performed well.

Capital and Infrastructure Expenditure 2005/06 2005/06 - Infrastructure and capital expenditure   Adjusted 4th quarter expenditure R000's budget R'000 % Education 373 808 362 645 97.0% Health 263 725 216 456 82.1% Agriculture 48 194 51 545 107.0% Transport and Public Works 1 173 815 1 166 869 99.4% Total 1 859 542 1 797 515 96.7% available Payments for capital assets 1 443 962 1 479 235 102.4% Infrastructure and capital expenditure was at an acceptable level at the end of the 2005/06 financial year

2006/07 3rd Quarter Expenditure

CG Expenditure – Local Government and Housing Local Government and Housing – Conditional Grant Expenditure as at 31 December 2006   Adjusted budget Transfers received Spent by Province spent as % of DORA Spent as % transfers received Integrated Housing and Human Settlement Development 987 006 665 006 614 007 62.2% 92.3% The Department has spent 102% of original budget of R598,8 million. - R372 million was received in the adjusted budget specifically for the N2 Gateway Project and it is envisaged that more than half of this allocation will be spent by 31 March 2007. The balance will be rolled over and spent in the 2007/08 financial year.

CG Expenditure - Agriculture Agriculture – Conditional Grant Expenditure as at 31 December 2006   Adjusted budget Transfers received Spent by Province spent as % of DORA Spent as % transfers received Land Care Programme 3 730 2 492 1 862 49.9% 74.7% Comprehensive Agricultural support Programme 20 648 16 519 10 150 49.2% 61.4% Provincial Infrastructure Grant 3 000 4 806 160.2% Agriculture Disaster Management Grant 33 000 - Total 60 378 22 011 24 380 40.4% 110.8%

CG Expenditure – Agriculture (2) Challenges to Overcome Land Care Programme Expenditure is season dependent as invasive plants grow in summer and the eradication thereof can only take place once crops have been harvested Comprehensive Agriculture Support Programme Difficult to get community agreement on project plans Delay in tender process Some projects are still in the planning phase Agriculture Disaster Management Grant Implementation plans are in the process of being finalised with the National Department of Agriculture. Spending will commence in 2007/08.

CG Expenditure - Education Education – Conditional Grant Expenditure as at 31 December 2006   Adjusted budget Transfers received Spent by Province spent as % of DORA Spent as % transfers received FET College Sector Recapitalisation 70 000 100.0% HIV and Aids (Life Skills Education) 11 870 8 903 8 910 75.1% 100.1% National School Nutrition Programme 48 313 36 235 34 330 71.1% 94.7% Provincial Infrastructure Grant 126 829 78 871 54 554 43.0% 69.2% Total 257 012 194 009 167 794 65.3% 86.5%

CG Expenditure – Education (2) Challenges to Overcome Provincial Infrastructure Grant A number of projects are in the tender and awarding phase Seasonality of the Western Cape impacts infrastructure expenditure Department projects to spend entire budget by the end of the financial year

CG Expenditure - Health Health – Conditional Grant Expenditure as at 31 December 2006   Adjusted budget Transfers received Spent by Province spent as % of DORA Spent as % transfers received National Tertiary Services 1 272 640 954 477 957 581 75.2% 100.3% Health Professions Training and Development 323 278 242 460 75.0% 100.0% Comprehensive HIV and Aids 133 170 91 126 94 127 70.7% 103.3% Forensic Pathology Services 77 405 51 454 20 383 26.3% 39.6% Hospital Revitalisation 149 703 112 275 125 578 83.9% 111.8% Provincial Infrastructure Grant 61 829 45 661 40 512 65.5% 88.7% Total 2 018 025 1 497 453 1 480 641 73.4% 98.9%

CG Expenditure – Health (2) Forensic Pathology Services Constraints in the appointing of staff for the Forensic Pathology Services Unit, there are currently 87 vacant posts in the programme. R26,8 million has been budgeted for the construction of six new Forensic Pathology Laboratories, the majority of these projects are still in the planning phase. Provincial Infrastructure Grant Due to changes in the priority list, some projects have been put on hold in 2006/07 Experienced professionals are leaving the department The Department projects to spend the entire budget by the end of the financial year (overspend by R4 million).

CG Expenditure – Transport and Public Works Transport and Public Works – Conditional Grant Expenditure as at 31 December 2006   Adjusted budget Transfers received Spent by Province spent as % of DORA Spent as % transfers received Provincial Infrastructure Grant 229 967 146 525 137 625 59.8% 93.9% Challenges to overcome Slow spending is as a result of additional allocations received by the Department in the adjustments estimate. Department projects to spend full budget by the end of the financial year.

CG Expenditure – Cultural Affairs and Sport Cultural Affairs and Sport – Conditional Grant Expenditure as at 31 December 2006   Adjusted budget Transfers received Spent by Province spent as % of DORA Spent as % transfers received Mass sport and Recreation Participation Programme 12 100 9 782 6 721 55.5% 68.7% Challenges to overcome Mass Sport and Recreation Participation Programme School Mass Participation Programme is in its first year of implementation. The Department did not have a dedicated unit to roll out clusters which resulted in delays. The 2nd and 3rd quarters saw a significant improvement in spending, with spending expected to accelerate in the final quarter.

Infrastructure and Capital Expenditure Infrastructure and capital expenditure as at 31 December 2006   Adjusted Third Quarter Expenditure R000's budget R'000 % Education 379 222 195 787 51.6% Health 371 893 247 724 66.6% Agriculture 50 229 23 703 47.2% Transport and Public Works 1 482 246 965 121 65.1% Total 2 283 590 1 432 335 62.7% available Payments for capital assets 1 268 691 1 007 505 79.4% *Infrastructure expenditure includes maintenance which is recorded as current expenditure in SCOA

Infrastructure and Capital Expenditure Challenges to Overcome Bottlenecks in the procurement process, IDIP aims identify these bottlenecks and identify means to overcome them; Inefficiencies in the link between planning; budgeting and implementation; and Skills shortage. Measures instituted Promotion of earlier planning cycle (IDIP).

Service Delivery Information

Conditional Grants Service delivery information as at 31 December 2006 Target Quarter 3 Percentage Integrated Housing and Human Settlement Development Programme   Houses 16 000 12 060 75% Serviced houses 18 000 15 476 86% Comprehensive HIV and Aids Grant ART service points registered 50 49 98% ART patients registered 20 666 23 452 113% National School Nutrition Programme Number of learner days covered by the nutrition programme 34 680 000 26 129 433

Infrastructure Projects Transport and Public Works - Service delivery information as at 31 December 2006   Total Identification Feasibility study Design Tender Construction Retention Handover Public works Own revenue 86 8 4 15 11 33 12 3 PIG 6 1 Other 13 Roads infrastructure 26 7 9 2 41

Infrastructure Projects Service delivery information as at 31 December 2006   Total projects Construction phase Completion / retention phase Completion / Handover phase % Completion 12% 25% 50% 75% 100% Agriculture PIG 4 2 1 Equitable share 34 9 16 7 CASP 55 13 12 20 10 Land care 14 6 5 Health Own revenue 17 24 HRP Education 3

Conditional Grant Business Plans 2006/07 Financial Year

CG Business Plans Business plans 2006/07 Business plans 2007/08 All business plans for 2006/07 have been approved Business plans 2007/08 Department of Agriculture Land Care Grant Business plan submitted, verbal approval received, awaiting written approval. Comprehensive Agriculture Support Programme

CG Business Plans 2007/08 Department of Education HIV and Aids (Life Skills Education) Grant Business plan submitted incorporating feedback received from National Department on the first draft National School Nutrition Programme Grant Business plan submitted, feedback received from national department. Further Education and Training First draft submitted timeously, feedback received from National Department, second draft submitted incorporating feedback.

CG Business Plans 2007/08 Department of Health Comprehensive HIV and Aids Grant Business plan submitted, awaiting feedback from the national Department of Health Forensic Pathology Services Grant Business plan completed in consultation with national Department of Health and submitted 23 October 2006 Signed copy submitted 17 November 2006 National Tertiary Services Grant Awaiting Service Level Agreement from National Department of Health Health Professions Training and Development Grant Business plan format in process of finalisation by Department of Health

CG Business Plans 2007/08 Department of Local Government and Housing Integrated Housing and Human Settlement Development Grant Business plan submitted, awaiting feedback from national department Department of Cultural Affairs and Sport Mass Sport and Recreation Participation Programme Grant Business plan submitted, awaiting feedback from national department. National Treasury Provincial Infrastructure Grant Consolidated infrastructure plan submitted to National Treasury

Monitoring Provincial Expenditure

Monitoring Provincial Expenditure Continuous engagements with departments in a cooperative manner to jointly seek solutions and prevent fiscal dumping; Quarterly reports to Top Management, Exco and Legislature; Frequent interaction with departments on spending performance and general issues as highlighted by monthly IYM’s; Quarterly narrative reports to AO’s and CFO’s; Quarterly meetings between MEC’s for finance, education, health and public works to discuss infrastructure spending and other difficulties; Specific provincial initiatives to ameliorate the March spike; and CFO intergovernmental forums.

Discussion