1. as at 31 March 2016 NW Provincial Performance
Presentation to the Select Committee on Finance
Date: 20th May 2016
Presentation by:
MEC For Finance, Economy and Enterprise Development
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2. Presentation Outline Slide 2 Provincial Growth
Actual Revenue Collection
Actual expenditure per department and Economic Classification
NW Compensation of Employees Analysis
Goods and Services
Conditional Grants Spending
Infrastructure spending
Bank balances and cash flow statements
Accruals
Unauthorised, Irregular, fruitless and wasteful expenditure
Comparative Analysis of Co-management Departments
Recommendations
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3. Provincial Growth Slide 3 Together moving Bokone Bophirima forward.
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4. Provincial Growth Slide 4 Together moving Bokone Bophirima forward.
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5. Provincial Growth Slide 5 Slow Growth High rate of Unemployment
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6. Provincial Growth Provincial & National Shares Slide 6
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7. sector performance for 2015
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8. Municipal District growth level: 2015
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9. Challenges Facing The Province
Demand for minerals resources have decreased in recent years
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10. Developmental Challenges
1996
2014
Population
2,928,877
3,670,889
More Youth
HDI
0.53
0.58
Should be close to 1
Gini Coefficient
0.57
0.61
Should be below 0.5
Poverty
1,010,262
881,407
Eradicate
No schooling*
287,337
256,675
Universal Acces to Education
Matric only
225,131
680,928
Matric & Bachelors degree
18,455
64,207
Matric & Postgrad degree
6,051
29,099
Very Few with Higher Qualification
*Education refers to people aged 20+
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11. Actual Revenue Collection – 31 March 2016
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12. Actual Revenue Collection – 31 March 2016
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13. Actual Revenue Collection – 31 March 2016
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14. Actual Revenue Collection – 31 March 2016
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15. Actual Revenue Collection – 31 March 2016
Economy and Enterprise Development
The under collection is mainly on casino taxes, horse racing taxes and liquor licenses.
Department of Community Safety and Transport Management
Under collection is attributable to challenges in respect of the E-Natis contract with the service provider;
Late payment of log sheets and non-payment of traffic fines;
The department has registered a late recovery whereby the actual collection for March exceeds the projected collection after issues with the collecting municipalities were resolved.
The March collection serves as a base for an optimistic outlook for the 2016/17 financial year.
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16. Actual Revenue Collection – 31 March 2016
Department of Public Works & Roads
Undercollection is attributed to the delay in transferring rental money by various departments;
Delay in finalizing the process of disposing yellow fleet resulted in 90% of under collection from planned sales of capital assets;
Continuous follow up will be made with the transferring departments, to ensure timeous revenue collection and accurate reporting.
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17. Expenditure Per Department as at – 31 December 2015
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18. Expenditure as at 31 December 2015
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19. Expenditure as at 31 December 2015
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20. Expenditure as at 31 December 2015
The graph depicts efficiency of efforts to bring the expenditure on par with the quarterly norm.
The expenditure has improved from two percentage points below the norm to one percentage point below.
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21. Expenditure Per Department as at – 31 March 2016
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22. Expenditure as at – 31 March 2016
Underexpenditure has increased by 1.1 percentage points as compared to 2014/15.
However, no department has overspent its 2015/16 allocation
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23. Underspending as at 31 Mar ‘16
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24. Expenditure as at year end (Y-on-Y comparison)
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25. Expenditure as at year end (Y-on-Y comparison)
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26. Expenditure – as at 31 March 2016 Social Cluster
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27. Education & Sports Dev Exp – as at 31 March 2016
Underspending of 3.3 percentage points is mainly attributed to CoE which has underspent by R million.
Goods and Services has underspent by R million mainly on LTSM.
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28. Health Exp– as at 31 March 2016
The spending is slightly below the 100 per cent mark by 1.71 percentage points. The underspending is mainly recorded under goods and services as well as Compensation of Employees.
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29. Soc Dev Exp – as at 31 March 2016
The department’s underspending on CoE is attributable to nonpayment of PMDS for the SMS and MMS personnel, outstanding OSD payments as well as the salary grading for level 9 and 11.
Furthermore, the department has had challenges in respect of making transfer payments as a result of non-compliance by beneficiaries.
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30. Public Works & Roads Exp – as at 31 March 2016
Spending of shows an improvement as compared to the 2014/15 financial year.
Expenditure has been improved on the two key programmes i.e. Public Works and Transport infrastructure.
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31. Office of the Premier Exp – as at 31 March 2016
The spending of per cent is driven by MRRR Projects.
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32. Provincial Legislature Exp – as at 31 March 2016
The per cent expenditure is an aggregate of the R25 million underspent on goods and services and the overspending of R20.2 million on compensation of employees.
The expenditure of R300.7 million reflects an improvement of R32.1 million compared to the 2014/15 expenditure of R281.2 million.
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33. CATA Exp – as at 31 March 2016
Spending of per cent is attributable to underspending on capital expenditure at per cent.
The department has cited late awarding of projects by DPWR, inaccurate reporting by the implementing agents, lack of urgency in addressing critical construction matters and Eskom connection delays.
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34. CS&TM Exp – as at 31 March 2016
Low spending of per cent is attributable to the capital equipment which was ordered but not yet delivered. A roll over of funds has been requested.
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35. EED Exp – as at 31 March 2016
The department recorded an expenditure of R million or percent and an underexpenditure of R8.46 million.
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36. Finance Exp – as at 31 March 2016
The expenditure of R425.8 million or per cent is registered with minimal underspending.
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37. LG&HS Exp – as at 31 March 2016
The department expenditure is at per cent or R2.6 billion. Development and Planning programme recorded an underspending of R7.56 million due to the roll over of funds with an amount of R17.7 million
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38. Tourism Exp – as at 31 March 2016
Spending for the period ending 31st March 2016 accounts for per cent which is far below the threshold. The gross underspending is attributable to nonpayment of PMDS for 2014/15 financial year as well as outstanding Invoices for the month of March due to financial year end closure.
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39. READ Exp – as at 31 March 2016
The department recorded an expenditure of per cent or R1.09 billion, which shows an improvement of 2.5 percentage points as compared to the 2014/15 financial year. The underspending is attributable to non-filling of vacant posts as well as transfers and subsidies in respect of Ilima/Letsema grant.
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40. Expenditure Per Econ Class as at – 31 March 2016
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41. Expenditure – as at 31 March 2016
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42. NW Compensation of Employees
Comparative Analysis of
NW Compensation of Employees
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43. COE Expenditure – as at 31 March 2016
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44. CoE Expenditure as at 31March 2016 ( Based on Main Budget)
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45. CoE Expenditure as at 31 March 2016 ( 2nd Adjust. Budget)
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46. % Share CoE Y-on-Y Comparison
-0.51%
The table above reflects the year-on-year comparison of CoE as a percentage of the total departmental budget.
Although the rand value has increased from R18.3 billion in 2014/15 to R19.5 billion in 2015/16, the percentage share of CoE to the total budget, has reduced i.t.o percentage share.
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47. CoE Budget % Share (Y-on-Y comparison)
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48. % Growth: 2014/ /16
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49. 2015/16 In-Year Budget Growth Departmental Allocation vs CoE Growth
The 2nd adjustment budget resulted in the percentage share of CoE from per cent to per cent.
Most departments reflect a decline on CoE despite the overall budget increases.
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50. CoE Percentage Growth Over The MTEF
The red Shaded areas reflect a higher than ICS budget growth.
The growth in 2016/17 is based on the Preliminary 2015/16 year-end expenditure.
The higher than ICS growth makes provision for the existing staff and additional staff anticipated to be recruited in the respective years.
Notably the percentage share of CoE to the 2016/17 budget is 58 per cent
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51. % Share Exp. Per Sal Level
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52. % Share Headcount Slide 52
The provincial labour force is mainly dominated by officials in salary level 6-8
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53. Monthly CoE Exp 2015/16
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54. Slide 54
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55. Slide 55
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56. Slide 56
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57. Slide 57
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58. Goods & Services, Conditional Grants and Infrastructure
Comparative Analysis of
Goods & Services, Conditional Grants and Infrastructure
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59. Goods & Services Expenditure – as at 31 March 2016
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60. Goods & Services Expenditure – as at 31 March 2016
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61. Conditional Grants Spending – as at 31 March 2016
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62. HEALTH Conditional Grants Spending as at 31 March 2016
The slow spending on EPWP is as a result of short term contracts been awarded to EPWP workers;
87.2 per cent spending on NHIG is as a result of uniforms and health promotion materials amounting to R546.6 thousand that could not be paid as suppliers failed to deliver by March 2016.
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63. CATA Conditional Grants Spending as at 31 March 2016
Actual spending of R million or per cent R147.9 million is mainly due to the planned opening of libraries events that did not materialize as well as the non-finalization of promotional materials’ procurement.
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64. CS &TM Conditional Grants Spending as at 31 March 2016
The slow spending on EPWP grant is driven by the delays in recruitment of beneficiaries that was made in February 2016;
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65. ESD Conditional Grants Spending as at 31 March 2016
Math, Science & Technology grant is allocated R42.6 million and has the lowest spending of R32.2 million or 75.6 per cent. A rollover request of R10.3 million has been submitted in relation to ICT equipment's; Workshop equipment's; protective clothing as well as printing of Technical Science Textbooks
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66. LG&HS Conditional Grants Spending as at 31 March 2016
The Human Settlement Development Grant recorded a 100 per cent expenditure even after the grant was augmented by R100 million during the second adjustment budget.
The Extended Public Works Programme (EPWP) Integrated Grant for Provinces has spent per cent or R3.69 million as a result of municipalities which did not replace beneficiaries whose contracts were terminated.
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67. PW&R AND Soc Development Conditional Grants Spending as at 31 March 2016
DPWR: PRMG spending is at per cent or R million.
SocDev: The EPWP integrated and Incentive grants the grant recorded spending of 90.2 per cent while the EPWP(Social Sector) grant only spent 42 per cent. Both grants underspent due to the late Appointment of EPWP beneficiaries..
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68. READ Conditional Grants Spending as at 31 March 2016
The gross under spending on Land Care is attributed to the delays in implementation of the programme. This is mainly as a result of challenges relating to the buy-in by beneficiaries;
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69. Infrastructure Spending as at 31 March 2016
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70. Infrastructure Spending as at 31 March 2016
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71. Infrastructure Spending as at 31 March 2016(Excl. Con Grants)
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72. BANK BALANCES AND CASH FLOW STATEMENTS
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73. NW: Provincial Bank Balances
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74. ACCRUALS
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75. ACCRUALS
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76. UNAUTHORISED, IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE
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77. UNAUTHORISED EXPENDITURE
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78. IRREGULAR EXPENDITURE
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79. FRUITLESS AND WASTEFUL EXPENDITURE
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80. REMEDIAL ACTIONS TO ADDRESS U.I.F
All the irregular expenditure incurred were investigated;
Request for condonement were made based upon investigation to the relevant authorities;
Recommendation from the investigation is implemented in the departments;
Following steps were taken to curb any future UIF recurring:
Checklists were introduced in the critical areas of the SCM to ensure that all the steps were followed before the procurement
Reporting to the Provincial Treasury and follow ups are done on a regular basis
Consequence management were introduced and also included in the Performance Agreement of the Accounting Officers
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81. Recommendations It is recommended that the Select Committee notes:-
The aggregate provincial spending of R34.14 billion as at the end of March 2016 which is skewed towards non-infrastructure and non- conditional grant spending;
That the Provincial Treasury has issued a directive to minimize accruals and also enforce accountability with regards to accruals;
Provincial Treasury will conduct Quarterly expenditure reviews with provincial departments to minimise poor budget planning and implementation that leads to a March spike;
Stricter measures will be put in place to avoid under spending and non- spending of conditional grant and infrastructure allocations in 2016/17 financial year;
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82. Recommendations It is recommended that the Select Committee notes:-
The reduction on unauthorised expenditure resultant from the R829 million that was condoned during the financial year;
The 50 per cent reduction on accruals as compared to the R1.4 billion that was registered at the end of 2014/15;
Improvement on infrastructure spending as compared to 2014/15, from per cent to 96.7 per cent in 2015/16;
The improved conditional grant spending from the 94.9 per cent of 2014/15 to per cent expenditure as at end of 2015/16;
A decline on the CoE budget as a result of the flexible moratorium;
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83. Thank you
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