1. 1 Second Quarter Provincial Outcome for the 2006/07 Financial Year Select Committee on Finance National Council of Provinces November 2006

2. 2 Key highlights as at 30 September 2006 Presentation covers provincial spending for the first six months of 2006/07 –Published in Government Gazette on 30 October 2006 –Press release issued on 02 November 2006 Expenditure against main budget –Projecting to overspend by R4,3 billion –Anticipated roll-overs and last year’s unspent funds will change overall outcome (Provincial Adjusted Estimates – November 2006) Complement Financial with performance information to NCOP There are some emerging patterns to make inferences: –In general, provincial finances look satisfactory –Over expenditure is projected in a few instances Personnel Capital –These areas will need close monitoring –Capital is moving slowly in some sectors This is another area which needs close monitoring –Forecasts/projections appear to be unrealistic in some cases

3. 3 Provincial Aggregated Expenditure

4. 4

5. 5 Personnel (compensation of employees)

6. 6 Personnel

7. 7 Payments for Capital Assets Provinces have spent R5,6bn or 38,2% of R14,7bn budgets –Projecting to overspend by R1,5bn - NW (R578,2m) & GP (R517,1m) –Increase of R1,0bn or 21,8% to comparative spending last year Low rate of capital spending in WC (34,9%) and EC (35,7%) NW (49,6%) and FS (44,7%) reflect the highest rate of capital spending

8. 8 Payments for Capital Assets

9. 9 Education

10. 10 Education

11. 11 Education: Personnel

12. 12 Education: Personnel

13. 13 Education: Capital

14. 14 Education: NPNC

15. 15 Health

16. 16 Health Nearly all provincial health departments’ budgets are under pressure with possible overspending –GP (R971,6m), MP (R224,6m), WC (R173,3m) & FS (R166,8m) Most of projected overspending registered for health capital (R646,3m) –GP (R518,2m), FS (R89,6m) and EC (R55,9m)

17. 17 Health

18. 18 Health: Personnel

19. 19 Health: Capital

20. 20 Health: NPNC

21. 21 Social Welfare Services

22. 22 Public Works, Roads & Transport: Capital

23. 23 Housing and Local Government

24. 24 Conditional Grants

25. 25 Conditional Grants (1)

26. 26 Conditional Grants (2)

27. 27 Conditional Grants: Spending Rates

28. 28 Integrated Housing and Human Settlement Development Grant

29. 29 Recommendations (1) The SCOF (NCOP) to: –Note the state of provincial finances for the 2 nd quarter year-to-date of 2006/07; –Endorse that Provinces complement section 32 reports with non financial perform info –Note that Y-on-Y growth in education is low; –Note that nearly all provincial health departments budgets are under pressure - overspending; –Note that capital is moving slowly in education; –Agree that provinces re-examine projected outcome to determine the extent to which the projections are reasonable bearing in mind past performances;

30. 30 Recommendations (2) –Agree that provinces initiate processes to support departments that are experiencing difficulty with spending their capital budgets; –Agree that where it can be determined that projections are unreliable, they be revised accordingly; and –Note inadequate personnel budgets and provinces agree to fix them.