Select Committee on Finance National Council of Provinces Outcome of Conditional Grants & Capital Expenditure as at 31 March 2006 (Preliminary Outcome) [Section 32 of PFMA] Select Committee on Finance National Council of Provinces Presented by: Jan Hattingh Intergovernmental Relations National Treasury 02 May 2006

National Treasury’s Role National Treasury (NT) develops culture of publishing information Assessing credibility of provincial budgets Ensure that each provincial treasury prepares quarterly reports for its Cabinet or Exco NT prepares a consolidated quarterly report for all provinces

Key highlights Presentation covers provincial preliminary outcome (as at 31 March 2006) for the 2005/06 financial year Spending is at R214,8bn (98,0%) of adjusted budget (R219,2bn) The highest rate of spending is in KN (99,8%); WC and EC (98,6%) Lowest in FS (94,4%) and NW (95,8%)

Provincial Aggregated Expenditure

Key highlights Spending in social services sectors: Education at R72,0bn (99,6%) Health at R46,9bn (99,5%) Social Development at R58,0bn (96,7%) Personnel spending at R95,7bn (99,0%) Capital expenditure is at R13,1bn (94,0%)

Provincial Aggregated Expenditure

Social Services Social services adjusted budgets at R179,4bn - 81,9% of total provincial budgets (education, health, social development) Provinces have spent R176,9bn or 98,6% R21,3bn or 13,7% more compared to last year Spending accounts for 82,4% of total provincial spending Education at 33,5%, Health at 21,8% Social Development at 27,0% KN (100,4%), LP and NC (99,6%) records the highest rate of spending while FS (95,3%) and NW (97,0%) the lowest

Education Spending at R72,0bn or 99,6% against R72,3bn adjusted budget Increase of R7,5bn or 11,7% compared to the previous year Low rate of education spending in GP (96,3%) and MP (97,0%) LP (102,9%) and KN (101,5%) reflects the highest rate of spending in education Education Personnel spending at R58,2bn or 99,9% (R58,3bn adjusted budget) Goods and services (mostly LSM) at R7,1bn or 98,8% (R7,2bn adjusted budget) Capital spending at R2,8bn or 83,0% Increase of R436,7m or 18,5% compared to spending last year Low rate of capital spending in MP (52,3%) and FS (74,7%) NC (103,3%) and NW (97,0%) reflects the highest rate of capital spending in education

Education

Provincial Public Ordinary School Education (Programme 2)

Provincial Education – Personnel

Provincial Education – NPNC

Health Spending at R46,9bn or 99,5% against R47,2bn adjusted budget Increase of R6,7bn or 16,6% compared to the previous year Low rate of health spending in LP (94,4%) and EC (98,3%) NC (105,8%) and GP (101,3%) reflects the highest rate of spending in health Health Personnel spending at R25,4bn or 99,4% (R25,6bn adjusted budget) Capital spending at R3,8bn or 92,4% Increase of 53,0% compared to spending for the same period last year Low rate of capital spending in NC (75,5%) and LP (77,5%) GP (114,4%) and WC (97,3%) reflects the highest rate of capital spending in health

Health

Health – Programme Analyses Prog 2: Provincial District Health Services Spending at R18,4bn or 100,8% of R18,2bn adjusted budget Lowest rate of spending in FS (94,2%) and highest in KN (105,3%) Prog 4: Provincial Hospital Services Spending at R11,7bn or 99,9% of R11,8bn adjusted budget Lowest rate of spending in KN (95,6%) and highest in FS (106,8%) Prog 5: Central Hospital Services Spending at R8,1bn or 103,8% of R7,8bn adjusted budget Lowest rate of spending in LP (95,0%) and highest in GP (106,3%)

Provincial District Health Services (Programme 2)

Provincial Hospital Services (Programme 4)

Central Hospital Services (Programme 5)

Provincial Health – Personnel

Provincial Health – NPNC

Social Development Spending at R58,0bn or 96,7% against R60,0bn adjusted budget Increase of R7,0bn or 13,8% compared to the previous year Low rate of spending in FS (89,4%) and NW (93,0%) LP (99,0%) and KN (98,8%) reflects the highest rate of spending Underspent by R2,0bn Underspending linked to key initiatives to address weaknesses in the grant administration system: investigation and prosecution of fraudulent activities comprehensive review of all temporary disability grants implementation of systems that provides updates on key indicators for how the programme is being administered, including early warning indicators piloting, finalising and implementing a new disability assessment tool

Social Development

Provincial Social Grants (Programme 2)

Social Grants - Beneficiary Numbers

Social Grants - Payments

Personnel Provincial personnel spending totalled R95,7bn or 99,0% of R96,7bn personnel adjusted budgets Increase of R7,8bn or 8,9% over comparative spending last year LP projecting to overspend by R451,3m Low level of personnel spending in GP (96,1%) and WC (96,3%) LP (103,4%) and NW (99,9%) reflects the highest level of personnel spending

Personnel

Payments for Capital Assets Trends (Capital Expenditure)

Payments for Capital Assets Provinces have spent R13,1bn or 94,0% of R14,0bn adjusted capital budgets Increase of R2,8bn or 26,8% to comparative spending during last year Low rate of capital spending in NW (82,3%) and MP (82,6%) GP (116,2%) and WC (95,9%) reflects the highest rate of capital spending Largest provincial capital budgets (adjusted) are for public works, roads and transport departments at R4,8bn or 34,3% Spending at R5,1bn or 106,4% compared to R4,5bn spent last year (12,3% increase) Overspent by R308,5m

Payments for Capital Assets

Payments for Capital Assets Education

Payments for Capital Assets Health

Payments for Capital Assets Public Works, Roads & Transport

Integrated Housing and Human Settlement Development Grant (transfers)

Conditional Grants

Conditional Grants – Flow of Info

Conditional Grants Conditional grant allocations total R75,1bn (2005 DoRA and Adjusted Estimates Gazette of 07 December 2005) Social assistance grants making up the bulk at R55,9bn Reported expenditure excludes Schedule 4 grants such as the NTS Grant and Provincial Infrastructure grant These grants are included in “general” provincial expenditure Specific grants that show low spending include: - Forensic Pathology Services (Health) (14,9%) - Disaster Relief (DPLG) (83,8%) - Hospital Revitalisation (84,2%) - Social Assistance Administration (93,5%) - Agricultural Disaster Management (93,8%)

Conditional Grants

Conditional Grants - continued

Conditional Grants 3 or more provinces have spent less than 90,0% for the following grants: Hospital Revitalisation (Health) Integrated Nutrition Programme (Health) Social Assistance Administration However the majority of grants reflects spending within the 90,0% and 95,0% range

Conditional Grants

Important dates and submissions

Publication Dates for Provincial S32 Reports 2006/07 Financial Year: 1st Quarter (as at 30 June 2006) 28 July 2006 2nd Quarter (as at 30 September 2006) 30 October 2006 3rd Quarter (as at 31 December 2006) 30 January 2007 4th Quarter (as at 31 March 2007) 30 April 2007

Proposed Dates for QPRs Practice Note 3 of 2005 (issued with effect from 1 August 2005): National departments administering conditional grants are required to table QPRs (including both financial and non-financial information) with the SCOF in the NCOP at the end of each quarter in line with the requirements of Sections 19(1)(c) and 21(2)(d) of the Act, Grant Frameworks and Treasury Regulation 5.3 Departments are required to provide the NT with copies of the reports tabled at SCOF in NCOP. The quarterly reports for each quarter should be tabled by the dates provided The dates are as follows: Third Quarter: 07 February 2006 Fourth Quarter: 08 May 2006

Detail on Conditional Grants by Grant Type

Objective (Schedule 5 Grant): Agriculture Grants Land Care Programme: Poverty Relief and Infrastructure Development Objective (Schedule 5 Grant): To address the degradation problems of natural/agricultural resources and improve the social-economic status, and food security of rural communities Preliminary Outcome: Agriculture spent R47,7m or 119,2% (90,1% incl. prov roll-overs) of the R40m allocation (R52,9m incl. prov roll-overs) Transfers amounted to 100,0% Highest: FS 175,3%; EC 171,0% and MP 150,6% Lowest: NW 21,1% and NC 98,1% Service Delivery Outcome: Department / Sector to respond

Agriculture Grants Comprehensive Agriculture Support Programme Objective (Schedule 4 Grant): To enhance the provision of support services to promote and facilitate agricultural development targeting beneficiaries of the Land and Agrarian Reform programme and resource poor land-users Preliminary Outcome: Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required However, provinces reported spending of R265,7m or 106,3% (86,0% incl. provincial roll-overs) of R250m allocation (R309m incl. provincial roll-overs) Transfers amounted to 100,0% Highest: FS 172,9%; EC 141,1% and LP 125,0% Lowest: NW 13,0%; NC 69,7% and GP 79,9% Service Delivery Outcome: Department / Sector to respond

Education Grants HIV and Aids Grant (Life Skills Education) Objectives (Schedule 5 Grant): To ensure access to an appropriate and effective integrated system of prevention, care and support for children infected and affected by HIV and Aids To deliver life skills, sexuality and HIV and Aids education in primary and secondary schools Preliminary Outcome: Education spent R182,1m or 133,6% (98,3% incl. prov. roll-overs) of the R136,3m allocation (R185,3m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: EC 195,9%; KN 163,1% and NW 124,3% Lowest: NC 87,5% and LP 87,7% Service Delivery Outcome: Department / Sector to respond

Education Grants National School Nutrition Programme Objective (Schedule 5 Grant): To improve the nutrition status of South African children: specifically to enhance active learning capacity and improve attendance in schools Preliminary Outcome: Education spent R1 048m or 94,2% (85,5% incl. prov. roll-overs) of the R1 112m allocation (R1 225m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: NW 110,8%; EC 102,7% and WC 100,9% Lowest: KN 82,1%; MP 89,5% and GP 90,6% Service Delivery Outcome: Department / Sector to respond

Health Grants National Tertiary Services Grant Objective (Schedule 4 Grant): To fund national tertiary delivery in 27 hospitals across the nine provinces, as identified by the national department of Health (DOH), in order to ensure equitable access to basic tertiary health services by all South Africans Preliminary Outcome: Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required However, spent R4 701m or 99,8% (99,0% incl. prov. roll-overs) of the R4 709m allocation (R4 750m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: NW 110,3%; MP 104,7% and EC 103,4% Lowest: LP 64,2% and FS 99,0% Service Delivery Outcome: Department / Sector to respond

Health Grants Health Professions Training and Development Grant Objectives (Schedule 4 Grant): Support provinces to fund service costs associated with training of health professionals Enable shifting of teaching activities from central hospitals to regional and district facilities Development and recruitment of medical specialist in under-served provinces Preliminary Outcome: Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required However, spent R1 511m or 99,4% (98,6% incl. prov. roll-overs) of the R1 520m allocation (R1 532m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: EC 103,4% Lowest: KN 93,6%; NW 98,3% and LP 98,9% Service Delivery Outcome: Department / Sector to respond

Health Grants Comprehensive HIV and Aids Grant Objective (Schedule 5 Grant): To Enable the health sector to develop an effective response to the HIV and Aids epidemic and other matters Preliminary Outcome: Health spent R1 144m or 99,5% (98,9% incl. prov. roll-overs) of the R1 150m allocation (R1 157m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: NC 120,0%; WC 112,4% and GP 112,0% Lowest: LP 74,8% and FS 83,2% Service Delivery Outcome: Department / Sector to respond

Health Grants Hospital Revitalisation Grant Objective (Schedule 5 Grant): To transform and modernise infrastructure and equipment in hospitals in line with national policy and to achieve a sustainable infrastructure from which modern, equitable and sustainable services can be delivered Preliminary Outcome: Health spent R930,6m or 84,2% (75,5% incl. prov. roll-overs) of the R1 105m allocation (R1 232m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: MP 129,1%; NW 120,8% and NC 115,9% Lowest: KN 60,7% and WC 67,1% Service Delivery Outcome: Department / Sector to respond

Health Grants Integrated Nutrition Programme Grant Objective (Schedule 5 Grant): To implement integrated nutrition activities aimed at improving the nutritional status of all South Africans Preliminary Outcome: Health spent R123,5m or 100,0% (94,1% incl. prov. roll-overs) of the R123,4m allocation (R131,2m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: LP 120,9%; MP 116,3% and KN 100,0% Lowest: NC 48,4%; FS 85,8% and GP 87,1% Service Delivery Outcome: Department / Sector to respond

Health Grants Hospital Management and Quality Improvement Grant Objective (Schedule 5 Grant): To transform hospital management and improve quality of care in line with national policy Preliminary Outcome: Health spent R149,6m or 99,5% (89,8% incl. prov. roll-overs) of the R150,3m allocation (R166,6m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: MP 150,6%; NW 141,2% and EC 131,2% Lowest: GP 23,5%; KN 82,1% and LP 91,8% Service Delivery Outcome: Department / Sector to respond

Housing Grants Integrated Housing and Human Settlement Grant Objective (Schedule 5 Grant): To finance subsidies, the implementation of National Housing Programmes and to facilitate habitable, stable and sustainable human settlements Preliminary Outcome: Housing spent R4 986m or 102,9% (95,2% incl. prov. roll-overs) of the R4 843m allocation (R5 237m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: NW 131,5%; WC 116,8% and EC 104,6% Lowest: MP 81,6%; FS 89,2% and LP 93,8% Service Delivery Outcome: Department / Sector to respond

Housing Grants Human Settlement and Redevelopment Grant Objective (Schedule 5 Grant): To fund projects that aim to improve the quality of the environment by identifying dysfunctionalities in human settlements Preliminary Outcome: Housing spent R50,5m or 207,0% (55,2% incl. prov. roll-overs) of the R24,4m allocation (R91,5m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: LP 352,6% and WC 198,5% Lowest: FS 156,3% and GP 109,3% Service Delivery Outcome: Department / Sector to respond

Land Affairs Land Distribution:Alexandra Urban Renewal: Project Grant Objective (Schedule 4 Grant): To contribute towards the purchase of land for the relocation and settlement of Alexandra residents and other qualifying beneficiaries Preliminary Outcome: Gauteng spent R14,2m or 177,5% (100,0% incl. prov. roll-overs) of the R8m allocation (R14,2m incl. prov. roll-overs) Service Delivery Outcome: Department / Sector to respond

National Treasury Provincial Infrastructure Grant Objectives (Schedule 4 Grant): Help accelerate construction, maintenance and rehabilitation of new and existing infrastructure in education, roads, health and agriculture Gradually increase the labour-intensity of certain specific types of projects over the next five years Preliminary Outcome: Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required Transfers amounted to 80,0% (Not all funds transferred as per the payment schedule) Service Delivery Outcome: Department / Sector to respond

Social Development Grants Social Assistance Administration Grant Objective (Schedule 5 Grant): To fund the administration of social assistance grants Preliminary Outcome: Social Development spent R3 162m or 93,5% (92,8% incl. prov. roll-overs) of the R3 382m allocation (R3 409m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: EC 104,0%; WC 100,2% and NC 96,2% Lowest: FS 81,1%; GP 84,0% and MP 85,1% Service Delivery Outcome: Department / Sector to respond

Social Development Grants Social Assistance Transfers Grant Objective (Schedule 5 Grant): To fund social assistance transfer payments to eligible beneficiaries Preliminary Outcome: Social Development spent R51 092m or 98,2% (97,9% incl. prov. roll-overs) of the R52 023m allocation (R52 161m incl. prov. roll-overs) Transfers amounted to 98,1% Highest: MP 117,0%; LP 100,1% and WC 98,5% Lowest: FS 90,0% and GP 93,9% Service Delivery Outcome: Department / Sector to respond

Social Development Grants HIV and Aids Grant (Community-Based Care) Objectives (Schedule 5 Grant): To provide social welfare services to orphans and vulnerable children who are infected by HIV and Aids, within family and community context, in partnership with non profit making organizations (NGOs, CBOs and other community organisations) To develop and support institutional structures and professionals, community workers and child and youth care workers through targeted training programmes in order to ensure effective delivery of services Preliminary Outcome: Social Development spent R139,7m or 100,9% (99,3% incl. prov. roll-overs) of the R138,4m allocation (R140,7m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: EC 120,5%; MP 108,2% and FS 104,7% Lowest: LP 82,6%; KN 92,1% and NW 96,9% Service Delivery Outcome: Department / Sector to respond

Social Development Grants Integrated Social Development Services Grant Objective (Schedule 4 Grant): To enable provinces to support and provide appropriate social welfare services and development interventions, and for immediate and appropriate short-term relief to vulnerable individuals and households who are not eligible and not receiving any from of assistance Preliminary Outcome: Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required However, spent R330,1m or 85,1% (70,7% incl. prov. roll-overs) of the R388 m allocation (R466,8m incl. prov. roll-overs) Transfers amounted to 83,1% Highest: MP 163,7% and FS 121,2% Lowest: LP 44,9% and KN 48,6% Service Delivery Outcome: Department / Sector to respond

Objective (Schedule 5 Grant): Sport and Recreation SA Grants Mass Sport and Recreation Participation Programme Objective (Schedule 5 Grant): Promotion of mass participation within disadvantaged communities in a selected number of sport activities and the empowerment of communities to manage these activities in conjunction with provincial departments responsible for sport Preliminary Outcome: Sport and Recreation spent R23,3m or 97,0% (94,6% incl. prov. roll-overs) of the R24m allocation (R24,6m incl. prov. roll-overs) Transfers amounted to 100,0% Highest: MP 119,1%; KN 100,0% and WC 99,9% Lowest: GP 80,2%; NW 92,3% and FS 93,2% Service Delivery Outcome: Department / Sector to respond

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