1. Provincial Preliminary Outcome of Conditional Grants and CAPEX As at 31st December 2007
National Council of Provinces
Select Committee on Finance
Presentation by
Northern Cape Provincial Treasury R 1

2. Objectives
To brief the Select Committee on Finance on the CAPEX and Conditional Grants Preliminary outcomes as at 31st December 2007:
Summary of total CAPEX
Summary of Infrastructure [Infrastructure Reporting Model (IRM)]
Conditional Grants - reasons for under/ over expenditure per Department 2

3. Broad Overview
Total expenditure on Payments for Capital Assets amount to R 401, 386 million or 53% of the adjusted budget as at 31th December 2007.
The Province projects to under-spend its CAPEX by R24,732 million or 3,% of the adjusted budget.
Total expenditure on infrastructure amount to R474, 711 million or 52% of the total infrastructure budget
Total expenditure on conditional grants amount to R 599,751 million or 51,% of the adjusted budget as at 31 December 2007. 3

4. Summary of Capital Expenditure per Department as at 31st December 20074

5. Payments for Capital Assets (Capital Expenditure)
Total Capital Expenditure as at 31th December 2007 amount to R401,386 million or 53% of CAPEX budget.
A decline compared to 69% in 2006/07.
Social Sector Capital Expenditure amount to R192,625 million as at 31th December 2007 or 50% of sector capital budget
A decline compared to 65% in 2006/07
Education capital expenditure amount to R32,388 million or 73% of capital budget.
A considerable improvement compared to 68% in 2006/07. 5

6. Payments for Capital Assets (Capital Expenditure)
Health capital expenditure total to R139,722 million or 45% of adjusted capital budget.
A decline compared to 66% in 2006/07.
Social Services & Population Development capital expenditure amount to R20,515 million or 66% of adjusted capital budget.
An improvement compared to 45% in 2006/07.
Non Social Sector Capital Expenditure amount to R208, 761 million as at 31th December or 57% of sector capital budget
A decline compared to 76% in 2006/07 6

7. Total Infrastructure (Maintenance & Capital)7 7

8. Summary spending on Infrastructure
Adjusted Budget: R905,498 million
Total Infrastructure Spending as at 31 December is R474,711 million or 52% of the total infrastructure budget – a decline compared to 63% in December 2006.
The Province projects to under spend its infrastructure budget by a net amount of
R97,826 million at the end of the financial year. 8 8

9. Spending on Infrastructure per Department
Education
Adjusted Budget: R78,284 million – of which R48, 098 million represents IGP
Spending as at 31 December 2007 is R53,067 million or 68% of their total infrastructure budget – an improvement compared to 66% in December 2006.
This improvement is as a result of better relations between Education and Public Works 9 9

10. Spending on Infrastructure per Department cont….
Transport, Roads and Public Works,
Adjusted Budget : R466,005 million, of which R257,716million represents IGP.
Spending as at 31 December 2007 is R265,809 million or 57% of the total infrastructure budget – a considerable decline compared to 71% in December 2006.
Slow spending is as a result of reprioritization from existing projects to new projects (SKA Access road) 10 10

11. Spending on Infrastructure per Department cont…
Health
Adjusted Budget: R287,664 million, of which R36,698 million represents IGP.
Spending as at 31 December 2007 is R117,016 million or 41% of the total infrastructure budget – a considerable decline compared to 54% in December 2006.
The department is projecting to under-spend its infrastructure budget by R98,358 million.
The major contributing factor is the roll over in respect of the Revitalization Grant (refer to CG for details). 11 11

12. Spending on Infrastructure per Department cont….
Agriculture and Land Reform
Adjusted Budget : R44,312 million, of which R8,806 million represents IGP.
Spending as at 31 December 2007 is R19,102 million or 43% of the total infrastructure budget – a considerable decline compared to 60 % in December 2006.
Non- compliance of suppliers to tender specifications
Slow delivery by service providers 12 12

13. Spending on Infrastructure per Department cont….
Social Services & Population Development
Adjusted Budget : R27,291million
Spending as at 31 December 2007 is R17,826 million or 65% of the budget.
Major reasons for the slow expenditure relate to the implementing agent (Public Works). 13 13

14. Conditional Grants 14

15. Conditional Grants by Grant Type15

16. CONDITIONAL GRANTS 1st QUARTER EXPENDITURE COMPARISON (2007/08 VS 2008/09 FINANCIAL YEAR)16

17. Aggregate Expenditure of CG as at 31 December 2007
Total adjusted budget : R1,161 billion
Total transfers received : R794,5 million
Expenditure to date : R599,8 million
75% of total received funds
52% of adjusted budget – a considerable decline compared to 63% in 2006/07

18. Details on Conditional Grant per Department18

19. Detail on Conditional Grant per Department - Agriculture
Department of Agriculture Grants
Comprehensive Agriculture Support (CASP)
Land Care Programme
Disaster Management Grant (received during adjustment
Budget Outcome : 3rd Q
Total Adjusted Budget: R79,630 million
Total Transfers from National : R27,704 million
Total spent as at 31 December 2007 – R18,706 million
67% of total received
23% of the adjusted budget – a decline compared to 68% in December 2006
CASP
Adjusted Budget – R28,555 million
Total Transfers from National: R22,844 million
Total spent as at 31 December 2007 – R15,387 million
54% of adjusted budget – slightly declined compared to 55% in December 2006

20. Detail on Conditional Grant per Department – Agriculture cont…
Land Care Programme Grant
Adjusted Budget – R6,075 million
Total Transfers from National: R4,860 million
Total spent as at 31 December 2007 – R3,319 million
68% of total received
55% of adjusted budget – considerable declined compared to 72% in December 2006
Disaster Management Grant
Adjusted Budget – R45,0 million
Total Transfers from National: Rnil
Total spent as at 31 December 2007 – Rnil
0% of total received
0% of adjusted budget

21. Detail on Conditional Grant per Department – Agriculture cont…
Reasons for below underspending as indicated by the department:
CASP
Slow delivery service providers
Re-advertisement of tenders as a result of inaccurate information
Implementation of projects delayed by Environmental Studies
Land Care Programme
Awaiting approval for removal of protected plant species by DWAF
Suppliers do not comply in terms specifications hence the return of tender documents
Disaster Management Grant
Amount only appropriated during the Adjustment Appropriation in November 2007

22. Detail on Conditional Grant per Department - Education
Department of Education Grants
FET Recapitalisation
HIV and AIDS-Life Skills
National School Nutrition Programme
Budget Outcome : 3rd Q
Total Adjusted Budget: R49,054 million
Total Transfers from National : R36,472 million
Total spent as at 31 December 2007 – R39,098 million
107% of total received
80% of the adjusted budget – a considerable improvement compared to 77% in December 2006
Adjusted Budget – R8,0 million
Total Transfers from National: R8,0 million
Total spent as at 31 December 2007 – R8,075 million
101% of total received
101% of adjusted budget – remain constant compared to December 2006

23. Detail on Conditional Grant per Department – Education cont…
HIV and AIDS – Life Skills
Adjusted Budget – R3,922 million
Total Transfers from National: R2,591 million
Total spent as at 31 December 2007 – R3,042 million
117% of total received
78% of adjusted budget – considerable improvement compared to 56% in December 2006
National School Nutrition Programme
Adjusted Budget – R37,132 million
Total Transfers from National: R25,881 million
Total spent as at 31 December 2007 – R27,981 million
108% of total received
75% of adjusted budget – an improvement compared to 72% in December 2006

24. Detail on Conditional Grant per Department – Education cont…
Reasons for deviations
In all grants the department is above the average of 75%.
Transfers from national do not match the rate at which the department is spending, hence a pressure in provincial resources.
Actual transfers are lower than payment schedule.

25. Detail on Conditional Grant per Department - Health
Department of Health Grants
Comprehensive HIV & AIDS
Forensic Pathology Services
Health Professions Training and Development
Hospital Revitalisation
National Tertiary Services
Budget Outcome : 3rd Q
Total Adjusted Budget: R515,955 million
Total Transfers from National : R318,850 million
Total spent as at 31 December 2007 – R228,966 million
72% of total received
44% of the adjusted budget – a considerable decline compared to 59% in December 2006
Adjusted Budget – R74,091 million
Total Transfers from National: R55,566 million
Total spent as at 31 December 2007 – R66,514 million
119% of total received
90% of adjusted budget – considerable improvement compared to 62% in December 2006

26. Detail on Conditional Grant per Department – Health cont…
Forensic Pathology Services
Adjusted Budget – R36,519 million
Total Transfers from National: R18,139 million
Total spent as at 31 December 2007 – R26,808 million
147% of total received
73% of adjusted budget – considerable improvement compared to 28% in December 2006
Health Professions Training and Development
Adjusted Budget – R43,122 million
Total Transfers from National: R32,340 million
Total spent as at 31 December 2007 – R1,506 million
4% of total received
3% of adjusted budget – expenditure transacted wrongly to other programmes

27. Detail on Conditional Grant per Department – Health cont…
Hospital Revitalisation
Adjusted Budget – R251,448 million
Total Transfers from National: R129,726 million
Total spent as at 31 December 2007 – R133,344 million
102% of total received
53% of adjusted budget – slightly declined compared to 54% in December 2006
National Tertiary Services
Adjusted Budget – R110,775 million
Total Transfers from National: R83,079 million
Total spent as at 31 December 2007 – R0,794 million
0% of total received
1% of adjusted budget – same as in Health Professions Training and Development

28. Detail on Conditional Grant per Department – Health cont…
Reasons for below underspending as indicated by the department:
Comprehensive HIV and AIDS
The grant is 90 % of the adjusted budget as at 31st December 2007 , 15% above the annual average.
The grant has not been adjusted to cater for the incorporation of Kgalagadi, notwithstanding the higher than anticipated intake of ARV patients
Forensic Pathology Services
The spending in this grant is progressing considerably well
However, the mismatch between the actual cash received and the actual spending put tremendous pressure on our liquidity cash position (actual transfer received amount to R18, 139 million vs actual spending of R26, 808 million)
Health Professions Training and Development
Expenditure has been transact in wrong programmes
Journals will be passed to correct the expenditure

29. Detail on Conditional Grant per Department – Health cont…
Reasons for below underspending as indicated by the department:
Hospital Revitalization
In 2006/07 two projects were put on hold (Upington & De Aar) by the national department of Health, resulting in the under spending by R78, 482 million.
The amount was rolled over to the current financial year during the adjustment estimate, however the national department did not inform the provincial department on time that the money will be rolled over
For example, when discounting the roll over, the department will be at 77 %
National Tertiary Services
Expenditure has been transacted in wrong programmes
Journals will be passed to correct the expenditure

30. Detail on Conditional Grant per Department - Housing
Department of Housing Grants
Integrated Housing and Human Settlement Development
Budget Outcome : 3rd
Total Adjusted Budget: R131,036 million
Total Transfers from National : R122,457 million
Total spent as at 31 December 2007 – R125,454 million
102% of total received
96% of the adjusted budget – a considerable improvement compared to 88% in December 2006

31. Detail on Conditional Grant per Department – Housing cont…
Treasury observation:
The grant was 96 % of the adjusted budget as at 31st December 2007, 21% above the annual average of 75%.
If the department continue spending on the same rate during the remaining period, it may over spend its adjusted budget.

32. Detail on Conditional Grant per Department – Sports, Arts & Culture
Department of Sports, Arts & Culture Grants
Mass Sport and Recreation Participation Programme
Community Library Grant
Budget Outcome : 3rd Q
Total Adjusted Budget: R33,544 million
Total Transfers from National : R25,506 million
Total spent as at 31 December 2007 – R16,414 million
64% of total received
49% of the adjusted budget – a decline compared to 63% in December 2006
Adjusted Budget – R9, 514 million
Total Transfers from National: R7, 482 million
Total spent as at 31 December 2007 – R4, 672 million
62% of total received
49% of adjusted budget – a considerable declined compared to 63% in December 2006

33. Community Library Services Grant
Detail on Conditional Grant per Department – Sports, Arts & Culture cont…
Community Library Services Grant
Adjusted Budget – R24,030 million
Total Transfers from National: R18,024 million
Total spent as at 31 December 2007 – R11,742 million
65% of total received
49% of adjusted budget

34. Detail on Conditional Grant per Department – Sports, Arts & Culture
Reasons for below underspending as indicated by the department:
Mass Sport and Recreation Participation Programme
School Recovery Plans delayed the implementation process
Non- compliance with the specifications as required in the tender delayed the process
Appointment of coordinators were halted
Verification process by national department with regard to new clubs was slow
Community Library Services Grant
MIS specifications from National Department outstanding
Transfers to Municipalities not effected due to non-compliance of payment criteria
Recovery Plan in place to accelerate expenditure

35. Reasons for over/under expenditure CG (cont…)
Reasons for below average spending as indicated by the department:
Library Service Grant
Lack of supply management personnel
Delayed procurement processes
Slow expenditure also relate to the appointment of personnel in the unit managing the grant
MIS specifications from National Department also outstanding
Transfers to Municipalities not effected due to non-compliance of payment criteria
Recovery Plan in place to accelerate expenditure 35

36. Reasons for over/under expenditure CG (cont…)
Reasons for below average spending as indicated by the department:
Mass Sport & Recreation Grant
School Recovery Plans delayed the implementation process
Inconsistencies between required specifications and actual tender specification also delayed the process
Appointment of coordinators were halted
National department also needed to verify new clubs before money could be spent on them. 36