Outcome of Conditional Grants & Capital Expenditure as at 30 June 2005 [Section 32 of PFMA] Select Committee on Finance National Council of Provinces Presented by: Jan Hattingh Intergovernmental Relations National Treasury 11 October 2005

First Quarter Spending

Provincial Aggregated Expenditure

Provincial Social Services

Provincial Social Services by Province

Provincial Education

Provincial Public Ordinary School Education (Programme 2)

Provincial Education – Personnel

Provincial Education – NPNC

Provincial Health

Provincial District Health Services (Programme 2)

Provincial Hospital Services (Programme 4)

Central Hospital Services (Programme 5)

Provincial Health – Personnel

Provincial Health – NPNC

Provincial Social Development

Provincial Social Grants (Programme 2)

Provincial Personnel

CAPEX TRENDS

Provincial Capital

Capital Year-on-year growth, 2004/05 to 2005/06

Provincial Capital

Provincial Education – Capital

Provincial Health – Capital

Provincial Capital – Roads & Transport

Integrated Housing and Human Settlement Development Expenditure

Possible reasons for underspending –Inadequate focus on infrastructure delivery by line depts –Poor project planning and management of infrastructure delivery in spite of a relatively stable three year budget system No reason not to link procurement to fin year Culture of excuses (example funds committed) Poor governance arrangement where agency are involved –Lack of clarity in roles and responsibility (PW & client depts) –Inadequate asset management system –Poor reporting on expenditure and on progress –Inadequate capacity (include staffing gaps and skills) –Delays in processing of payments for completed work Treasuries must monitor SPIKE in last two months of financial year Should core function be fragmented? –Decision to build class rooms Why Underspending on Capital?

Infrastructure Delivery Improvement Programme (IDIP) endorsed by Cabinet aims to improve planning and implementation: –Improve capacity and management systems in line departments –Improving contracting arrangements with PW – SLA to better define client-agent relationships –Strengthen capacity for procurement, project & contract management in public works Success of IDIP depends –Commitment at all levels of government, esp within depts –Improvement in information systems to support needs identification, prioritisation & performance monitoring –Adequately functioning asset management systems in place – asset registers including assessment of condition & utilisation –Recruitment of appropriate skills (level of posts vs required skills) Proposed solutions

INFRASTRUCTURE TRENDS

Provincial Education: Capex v/s Infrastructure Budgets

Provincial Education: Capex v/s Infrastructure Spending

Provincial Health: Capex v/s Infrastructure Budgets

Provincial Health: Capex v/s Infrastructure Expenditure

Provincial Capital – Roads & Transport: Capital v/s Infrastructure Budgets

Provincial Capital – Roads & Transport: Capital v/s Infrastructure Expenditure

MARCH SPIKE

Quarterly Provincial Spending – 2004/05 Financial Year

Quarterly Comparison between the 2003/04 and 2004/05 Financial Years

Monthly Expenditure for the 2002/03, 2003/04 and 2004/05 Financial Years

Provincial Monthly (Actual and Projected) Expenditure

CONDITIONAL GRANTS EXPENDITURE

Conditional Grants [Overview – 1 st Quarter]

Conditional Grants – continued [Overview – 1 st Quarter]

Provincial CGs Spending Rate

2005/06 Financial Year: –2 nd Quarter (as at 30 September 2005) 28 October 2005 –3 rd Quarter (as at 31 December 2005) 30 January 2006 –4 th Quarter (as at 31 March 2006) 28 April 2006 Publication Dates for Provincial S32 Reports

Practice Note 3 of 2005 (issued with effect from 01 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 below. –The dates are as follows: First Quarter: 08 August 2005 Second Quarter: 07 November 2005 Third Quarter:07 February 2006 Fourth Quarter:08 May 2006 Proposed Dates for QPRs

Detail on Conditional Grants by Grant Type

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 First Quarter Expenditure: –Agriculture spent R9,3 million or 23,4% of the R40 million allocation –Transfers amounted to 10% –Highest: NC 299%; MP 32,6% and KN 14,1% –Lowest: GP 0%; NW 0% and EC 0,1% 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 First Quarter Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Agriculture spent R31,3 million or 12,5% of R250 million allocation –Transfers amounted to 10% –Highest: FS 36,7%; WC 19,6% and MP 19,6% –Lowest: GP 0%; NW 0% and LP 4,7% Service Delivery Outcome: –Department / Sector to respond

Education Grants HIV and Aids Grant (Life Skills Education) Objectives: –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 First Quarter Expenditure: –Education spent R18,5 million or 13,6% of the R136,3 million allocation –Transfers amounted to 25% –Highest: KN 33,9%; EC 16,4% and NC 13,2% –Lowest: NW 0% and GP 0,4% Service Delivery Outcome: –Department / Sector to respond

Education Grants National School Nutrition Programme Objective: –To improve the nutrition status of South African children: specifically to enhance active learning capacity and improve attendance in schools First Quarter Expenditure: –Education spent R168,6 million or 18,5% of the R912,2 million allocation –Transfers amounted to 25% –Highest: NC 27,9%; MP 27,8% and KN 27,1% –Lowest: WC 4,3% and LP 6,8% 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 First Quarter Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Health spent R1 154 million or 24,5% of the R4 709 million allocation –Transfers amounted to 25% –Highest: KN 27%; FS 25,8%; GP 25% and WC 25% –Lowest: NW 7% and LP 10% 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 First Quarter Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Health spent R314,7 million or 20,7% of the R1 520 million allocation –Transfers amounted to 25% –Highest: FS 32,5%; GP 25% and WC 25% –Lowest: EC 3,5%; KN 11% and LP 10% Service Delivery Outcome: –Department / Sector to respond

Health Grants Comprehensive HIV and Aids Grant Objectives: –To Enable the health sector to develop an effective response to the HIV/Aids epidemic and other matters First Quarter Expenditure: –Health spent R187,6 million or 16,5% of the R1 135 million allocation –Transfers amounted to 13,7% –Highest: GP 27,7% and WC 22% –Lowest: NW 9,1%; LP 10% and FS 11,5% Service Delivery Outcome: –Department / Sector to respond

Health Grants Hospital Revitalisation Grant Objective: –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 First Quarter Expenditure: –Health spent R125,6 million or 12,2% of the R1 027 million allocation –Transfers amounted to 25% –Highest: GP 43,9% –Lowest: KN 0,9%; FS 6,2% and NW 8,6% Service Delivery Outcome: –Department / Sector to respond

Health Grants Integrated Nutrition Programme Grant Objective: –To implement integrated nutrition activities aimed at improving the nutritional status of all South Africans First Quarter Expenditure: –Health spent spent R16 million or 13% of the R123,4 million allocation –Transfers amounted to 22,2% –Highest: NC 29,9%; MP 25,4% and EC 21,6% –Lowest: GP 1%; WC 7,3%; NW 7,8% and FS 7,8% 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 First Quarter Expenditure: –Health spent spent R20,7 million or 13,8% of the R150,3 million allocation –Transfers amounted to 25% –Highest: MP 38,8% –Lowest: NC 0% 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 Housign Programmes and to facilitate habitable, stable and sustainable human settlements First Quarter Expenditure: –Housing spent R1 072 million or 22,1% of the R4 843 million allocation –Transfers amounted to 26,3% –Highest: NC 58,3% –Lowest: WC11,7%; LP 12,3%; EC17% and KN 18,3% 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 First Quarter Expenditure: –Housing spent R8,1 million or 33,1% of the R24,4 million allocation –Transfers amounted to 31,9% (Not all funds transferred as per the payment schedule) –Highest: LP 118%; –Lowest: GP 0% Service Delivery Outcome: –Department / Sector to respond

Land Affairs Land Distribution:Alexandra Urban Renewal: Project Grant Objectives (Schedule 5 Grant): –TO contribute towards the purchase of land for the relocation and settlement of Alexandra residents and other qualifying beneficiaries First Quarter Expenditure: –Gauteng spent the entire allocation for this grant but no funds were transferred 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 First Quarter Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Transfers amounted to 16,7% (Not all funds transferred as per the payment schedule) Service Delivery Outcome : –Department / Sector to respond

Social Development Grants Social Assistance Administration Grant Objectives (Schedule 5 Grant): –To fund the administration of social assistance grants First Quarter Expenditure: –Social Development spent R541,6 million or 16% of the R3 382 million allocation –Transfers amounted to 25% (Not all funds transferred as per the payment schedule) –Highest: NC 20,6%; NW 20,4%; and KN 20,2% –Lowest: MP 3,1% 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 First Quarter Expenditure: –Social Development spent R million or 20,7% of the R million allocation –Transfers amounted to 27% (Not all funds transferred as per the payment schedule) –Highest: LP 24,1%; WC 24,1%; EC 23,7%; NC 23,1%; FS 21,8%; KN 21,1%; and GP 20,7% –Lowest: NW 5,6% 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 First Quarter Expenditure: –Social Development spent R9,3 million or 6,7% of the R138,4 million allocation –Transfers amounted to 60% –Highest: GP 23,7% –Lowest: EC 0%; FS 0% and WC 0% 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 First Quarter Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Social Development spent R18,8 million or 4,9% of the R388 million allocation –Transfers amounted to 50% –Highest: MP 23% and FS 23% –Lowest: EC 0%; KN 0%; LP 0%; NC 0% ; NW 0 % and WC 0,1% Service Delivery Outcome: –Department / Sector to respond

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 First Quarter Expenditure: –Sport and Recreation spent R2,6 million or 11% of the R24 million allocation –Transfers amounted to 44,4% –Highest: MP 43% –Lowest: LP 0% Service Delivery Outcome: –Department / Sector to respond

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