1. CONDITIONAL GRANTS AND CAPITAL EXPENDITURE
PUBLIC HEARING ON
CONDITIONAL GRANTS AND CAPITAL EXPENDITURE
08 May 2006

2. INTRODUCTION
The Free State Department of Education has been invited to Public Hearings and to address the NCOP Select Committee on Finance on the following:
Data trends in conditional grants and capital expenditure allocations
2005/06 Transfers and actual expenditure
Assessment on Department’s monitoring capacity
Indication of under spending/ overspending
Capacity constraints and their impact

3. 2001/02 – 05/06 CONDITIONAL GRANTS DATA TRENDS SUMMARY
2002/03
2003/04
2004/05
2005/06
2006/07
Total Amount Received
73,355
177,471
130,454
196,662
217,193
239,157
Total Spending
20,579
76,606
111,978
181,409
204,218
N/A
Balance
52,776
100,865
18,476
15,253
12,975
% Spending
28%
43%
86%
92%
94%

4. CONDITIONAL GRANTS SPENDING TRENDS

5. 2005/06 CONDITIONAL GRANTS RECEIVED
Appropriated
R’000
Roll-overs
Additional Funds
Total
HIV and AIDS
7,947
0,455
8,402
NSNP
53,817
2,951
11,747
68,515
Provincial Infrastructure grant
55,913
4,638
60,551
Own Infrastructure grant
73,360
6,365
79,725
191,037
14,409
217,193

6. 2005/06 SPENDING ON CONDITIONAL GRANTS

7. 2005/06 CONDITIONAL GRANT SPENDING

8. LEARNERS FED THROUGH Bread Menu: NSNP DURING 2005/06
District
No Learners
No of schools
FEZILE DABI
17 941
197
LEJWELEPUTSWA
21 923
239
MOTHEO
26 317
168
THABO MOFUTSANYANA
488
XHARIEP
26 128 79
TOTAL
1171

9. 2005/6 SCHOOLS FED COOKED MENU
District
No Learners
No of schools
FEZILE DABI
34 638 50
LEJWELEPUTSWA
45 294 61
MOTHEO
38 130 49
THABO MOFUTSANYANA
3 854 5
XHARIEP
16 127 44
GRAND TOTAL
209

10. NSNP GRAND TOTAL 2005/06 Number of Learners Number of Schools
feeding of cooked meals
209
feeding of bread menu
1171
GRAND TOTAL
1380

11. LEARNER SUPPORT PROGRAMMES
Learner transport provided to farm school learners in Province.
3 more Hostels (initial 8); in Edenburg for 55 learners, Villiers for 40 and Thaba Nchu for 100 learners
Feed total learners through NSNP; exceeding initial target of
Provide hot meals to 21 schools in pilot project, feeding over learners

12. HIV AND AIDS PROGRAMMES
A total of 1,818 educators have been trained in Basic Counseling Skills
A further 1,000 educators were trained from all schools at GET and ECD level in Life Skills and HIV and AIDS education
1,000 educators were trained in awareness programmes that include prevention, care and support at school level
All School Management Teams were trained in the management of the impact of HIV and AIDS, programme extended to SGB’s
ABET educators were trained in Life Skills and HIV and AIDS education

13. ADDITIONAL FUNDING R70,7 MILLION

14. MINOR REPAIRS: EPWP PROJECTS
252 schools completed, entails renovations at R31,6 million where SMME’s were utilised
Further 355 schools allocated by end of February 2006 for similar project at R39,1 million
22 farm schools refurbishment with unsafe structures utilising mobile classrooms
Letsema projects completed at 90 schools to repair broken windows, painting of ceilings and walls etc.

15. TRANSFER PAYMENTS TO SCHOOLS
Funds transferred to schools for renovations were executed through a selected process and training was given before payments were made into their banking accounts
Teams were set up in order to monitor and manage individual school projects
Teams consist of the School Governing Bodies and the principal plays a critical role.
District teams assisted schools in their respective districts, lead by the Physical Planners and at Head Office level, a Project Manager was appointed to co-ordinate the above.

16. ACTUAL SPENDING ON CAPEX AS 31 MARCH 2006
Description
2005/06 Allocation
R’000
Spending as at 31 March 2006
% Spending
Capital transfers
213,683
210,583
99%
Buildings and fixed structures
56,799
39,998
70%
Machinery and equipment
27,708
23,116
83%
Total
298,190
273,697
92%

17. TRANSFER OF FUNDS FROM EDUCATION TO PWR&T
Funds for capital projects implemented by Public Works were transferred as per the agreements between the two departments
A total amount of R106,942 million was made available to Education and subsequently transferred to the Department of Public Works to speed up capital projects
As at 31 March 2006 an amount of R95,634,845 was spent
This amount includes R8,956,713which is for retentions and guarantees to contractors.
An amount of R10,827,271 was brought forward to the current financial year, being funds already committed

18. SERVICE LEVEL AGREEMENT
The existing Service Level Agreement makes provision for the Department of Public Works to execute all Capital projects, whilst the Department of Education is responsible for the implementation of Minor Capital Projects (renovations) and day-to-day maintenance
The Department of Education remains responsible for funds transferred to the Department of Public Works
Meetings between the two departments take place on monthly. These meetings are attended by Senior Managers from both departments
The Service level Agreement is in the process of revision to make provision that the Department of Public Works will also take responsibility for the implementation of the latter

19. PROGRESS ON CAPITAL PROJECTS IN 2005/06
Completed 6 new schools:
Tawana
JJ Kubheka
Disasterpark
SS Paki
Louriepark ( completed April 2006)
Tumisang (Completed April 2006)
And good progress on others:
JC Motumi (Kutlwanong)
Kgotso- Uxolo(Reitz)
Commenced with construction of 2 new schools:
Dr. Mgoma- January 2006 (Welkom)
EE Monesa – January 2006
(Senekal)
Commenced with construction of Additional facilities at:
Mmabana P/S- Jan 2006
AND finalised:
PPP feasibility study completed for construction of 13 new schools to eliminate platooning schools by 2008/09

20. OVER / UNDER SPENDING
It is important to note that according to MINMEC figures, only 74% was spent on Capex. This figure was disputed in that meeting and the correct figure is 90% of our budget
The main reason for not spending all the funds is due to the heavy rains in the Province since January 2006
The Department of Public Works promised that the outstanding amount will be spent by June on the projects affected by rain

21. OVER / UNDER SPENDING AND CAPACITY CONSTRAINTS
The only areas of under expenditure are located in the implementation of small capital projects, day-to-day maintenance and the Letsema Project due to capacity constraints of implementers of projects .
Improved planning – projects were approved prior to the commencement of the 2006/07 financial year to ensure more efficiency in 2006/07
Improving staffing levels by appointing additional technical staff to monitor progress on site

22. MONITORING CAPACITY AND PLANNING
Capital and Expenditure trends throughout the Department are now monitored by a dedicated Directorate one Management Accountant is dedicated to this assignment .
Monthly reconciliation on BAS Expenditure reports are done to track expenditure against each project
Monthly in-house monitoring meetings are now held to provide early warning to all Managers.
The relevant Directorate must now report at the Quarterly Review meetings of its remedial measures on under/over expenditure.
Regular monitoring meetings with Department of Public Works, Roads and Transport are held to monitor progress on major capital works.
The full implementation of the Infrastructure Development Programme will also assist to ensure projects are effectively executed. (IDIP)
National Treasury is also assisting with the Technical Assistant to support both Education and Department of Public Works, Roads and transport
The Planning of Projects is also improved to ensure the projects start on time and are timeously completed.
Business Plans for the 2006/07 have been submitted on time to PWR&T for the current financial year according to the Division of Revenue Act.

23. INFRASTRUCTURE ACTION PLAN 2006/07

24. INFRASTRUCTURE ACTION PLAN 2006/07 (CONTINUED)

25. 2006/07 INFRASTRUCTURE DELIVERY IMPROVEMENT PROGRAMME
Align the Budget Process ; Strategic Planning Process
and
the multi-year Infrastructure Plans
Regular Monitoring of infrastructure projects
Keeping accurate expenditure and commitment register for the Capital Budget Transferred to PWR&T
Regular Management meetings with PWR&T

26. THANK YOU