PRESENTATION ON THE CONDITIONAL GRANT TO THE SELECT COMMITTEE 25 August 2019 PRESENTATION ON THE CONDITIONAL GRANT TO THE SELECT COMMITTEE 13 FEBRUARY 2019 MANCO

Performance during 2018/19; and Support provided by national DSD PURPOSE Brief the Select Committee members on the implementation of ECD Conditional Grant in Eastern Cape province with specific focus on: Performance during 2018/19; and Support provided by national DSD

REMINDER OF BACKGROUND

FINANCIAL ALLOCATIONS, PAYMENTS AND EXPENDITURE 2018/19

ECD CONDITIONAL GRANT MTEF ALLOCATIONS   2017/18 2018/19 2019/20 R' 000 Early Childhood Development Grant 317 612 490 800 518 228 ECD subsidy expansion 248 892 412 055 435 101 ECD centre maintenance 68 720 78 746 83 127

CONDITIONAL GRANT ALLOCATIONS FOR MTEF PERIOD Provinces   Allocations Allocation MTEF Estimates 2017/2018 2018/19 2019/20 2020/21 R’000 R'000 Eastern Cape 56 365 78 788 83 196 88 771 Free State 18 398 21 573 22 776 24 302 Gauteng 38 489 62 810 66 322 70 766 KwaZulu-Natal 71 879 107 623  113 641 121 254 Limpopo 41 085 68 561 72 389 77 240 Mpumalanga 25 799 41 965 44 309 47 278 Northern Cape 13 761 18 493 19 525 20 833 North West 32 686 52 186 55 103 58 795 Western Cape 19 150 38 790 40 955 43 698 TOTAL 317 612 490 800 518 228 552 949 Audit Committee

PROVINCIAL ALLOCATIONS SUBSIDY & MAINTENANCE Province Total Subsidy Maintenance Administration EC 78 715 000 72 727 000 3 336 000 2 652 000 FS 21 656 000 14 328 000 4 528 000 2 800 000 GT 62 777 000 57 762 000 2 215 000 KZN 107 543 000 95 383 000 9 360 000 LP 68 561 000 48 391 000 17 370 000 MP 41 998 000 33 364 000 6 167 000 2 467 000 NC 18 472 000 6 496 000 9 176 000 NW 52 185 000 43 942 000 5 939 000 2 754 000 WC 38 893 000 28 125 000 7 968 000 TOTAL 490 800 000 400 518 000 66 059 000 24 673 000

BUDGET VS EXPENDITURE AS AT 30 SEPTEMBER 2018 Province 2018/19 Allocation Amount Transferred R Spent PDSD Unspent Funds % Spent Subsidy 72 727 000 36 364 000 16 643 216 19 720 784 23% Maintenance 3 336 000 0% Administration 2 652 000 1 326 000 736 490 589 510 28%

BUDGET VS EXPENDITURE AS AT 31 DECEMBER 2018 Province 2018/19 Allocation Amount Transferred R Spent % Spent Subsidy 72 727 000 54 546 000 47 956 497 66% Maintenance 3 336 000 1013 860 30% Administration 2 652 000 1 989 000 588 077 22%

PERFORMANCE AS AT 31 DECEMBER 2018

SUMMARY ON PERFORMANCE AS AT 31 DECEMBER 2018 Eastern Cape was allocated R78 715 000 from the total allocation of R490 800 million. As at the end of December 2018, 63% of the Provincial allocation was spent. Subsidy: R72 727 000-allocated; During Q2 23% of subsidy allocation was spent reaching to 20 429, 66% in Q3 benefiting the same number of children (20 429) Maintenance: R3 336 000 – allocated; 0% expenditure, 30% was spent in Q3 where 2 centres were completed. Administration: R2 652 000- allocated; 28% expenditure on remuneration in Q2; 22% in Q3. Audit Committee

PERFORMANCE ON SUBSIDY QUARTER 1 QUARTER 2 Annual Target Number of children benefiting Number of days 20 472 900 237 Annual Target Number of children benefiting Number of days 20 472 20 429 237 Audit Committee

PERFORMANCE ON SUBSIDY Quarter 3 Annual Target Number of children benefiting Number of days 20 472 20 429 237 Audit Committee

PERFORMANCE ON MAINTENANCE QUARTER 1 QUARTER 2 Annual Target ECD centre benefitted 26 Annual target ECD centres benefitted 26 Audit Committee

PERFORMANCE ON MAINTENANCE Quarter 3 Annual Target Number of centres benefitted 26 2 Audit Committee

PERFORMANCE ON MAINTENANCE GRANT AS AT FEB 2019 Annual Target Completed Work has commenced Advertised 1 Feb, closing 15 Feb Current % of centres completed (9/26 centres) % of centres to be complete by 15 February 2019 (18/26) 26 9 8 35% 69%

4TH QUARTER WORK IN PROGRESS Total Allocation Expenditure to date Invoices in hand (to be paid 7 Feb 2019 Total Projected expenditure by 20 Feb 2019 % Total Projected expenditure by 20 Feb 2019 R3 336 000 R1 725 526  R376 721 R2 035 166 63% Audit Committee

DETAILED STATUS Project Status Detail information Complete:   Complete: There are 9 centres completed. Work Commenced: There are 9 centres where work has commenced that will be completed by the 15th of February 2019.

OUTSTANDING WORK UP TO 31 MARCH 2019 There are 8 centres still outstanding. The advert went out on the 1st of February 2019. The advert will be closing on the 15 February 2019. Evaluation and appointment will be completed by the 22 February 2019. Handover by 1 March 2019. Work will be completed by 19th of March 2019. The invoices will be paid by 26 of March 2019. All 26 centres and 100 percentage expenditure on the grant will be achieved by the 31st of March 2019.

REASONS FOR UNDER PERFORMANCE CHALLENGES MITIGATIONS Reviewing of SLA on an annual basis Standardisation of the signing of the three year SLA. Non compliance with the framework on the implementation of 264 days Province will implement the 264 days as per the framework in 2019/20 Utilisation of incorrect code in the first quarter for 900 children who benefited from the grant. The province has since created journal to correct the misallocation. Audit Committee

SUPPORT PROVIDED TO THE PROVINCE

INTERVENTION BY NATIONAL TO ADDRESS EASTERN CAPE POOR PERFORMANCE The turn around Strategy was developed to look into the following: Reduced Allocations The allocation on the maintenance grant for 2018/19 was reduced from R12 million to R5 million to enable the province to address their challenges and fine tune their processes. Monitoring and Support The task team continues to meet to monitor the implementation project plan that was developed. Meetings have been held to assess progress and provide guidance on the intervention to implement the grant. The following engagements to place: National Meeting with ECD grant provincial team on the 15th-17th of October 2018. Site visits were undertaken to check progress on the 3rd- 4th of December 2018 and 5th- 6th of February 2019. A task team meeting has been scheduled to take place on the 25th of February 2019. These interventions from National are working because the grant progress moved from 0% in the second quarter to 30% at the end of the third quarter and to a projected expenditure of 61% by the 20th of February 2019. National is continuing to work with the Eastern Cape province to ensure that 100% will be spent by the end of the 4th quarter.

IMPLEMENTATION OF THE GRANT FOR 2019/20 The 2019/20 Conditional Grant Framework was reviewed and consulted with provinces It was finalised and signed off by the Acting DG and submitted to National Treasury in December 2018. Provinces have to submit their signed off Business Plans to National Department by 31 March 2019. The Plans have to be signed off by the Acting DG and submitted to National Treasury in April 2018. Meeting with provinces to prepare for quarter 1 implementation is scheduled for 26 February 2019. Quarterly meetings are held with provinces to monitor implementation of the grant

RECOMMENDATIONS It is recommended that the committee note the implementation of Conditional Grant in Eastern Cape province with specific focus on: Performance made during 2018/19; and Support provided by national DSD

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