1. GAUTENG PROVINCIAL GOVERNMENT 2017/18 PRELIMINARY BUDGET OUTCOMES
Presentation to
Select Committee on Finance

2. Outline of the presentation
Principles of the Budget
Revenue
Expenditure
Personnel
Conditional grants
Infrastructure
Health intervention
Off Budget Financing
TER
30 Day payments
Progress on Open Tender

3. Principles of the budget
Reduce spending on non-core goods and services and decisively fight fraud and corruption;
Increase our own revenue and alternate funding sources;
Maintain spending on quality social services
Increase spending on infrastructure to give expression to the TMR and create work.

4. REVENUE

5. Provincial Own Revenue Collection Performance - 2017/18
Source: March IYM (Final Submission)

6. Provincial Own Revenue Collection Performance - 2017/18
Achievements
The Provincial revenue target of R5.4bn was adjusted upwards to R5.8bn
Preliminary results reveal that own revenue collection stood at R6.1bn, representing 106% collection, against an adjusted target of R5.8bn
The 6% over collection for the period under review is approximately R336m
Main revenue contributing sources to this performance are motor vehicle licence fees, interest on short term investments and patient fees which exceeded the set targets; while casino licenses narrowly under-collected against set target

7. EXPENDITURE

8. 2017/18 Aggregate Provincial Expenditure
YTD, 98.6% of the 2017/18 GPG Adjusted Budget was spent as at the end of the year, as outlined below:
79%
of total expenditure is by Health, Education and Social Development departments
57%
of total expenditure to date was on CoE, again largely driven by Health, Education and Social Development
21%
of total expenditure in 2017/18 was on ‘Goods and Services, for which Health accounts for 60 per cent of this amount
Source: March IYM (Final Submission)

9. 2017/18 Aggregate Provincial Expenditure - Health
As at the end of Q4, GDoH had spent R41.9bn (99%)of the adjusted budget, with under-expenditure of R204m, as outlined below:
60%
of total GDoH expenditure was incurred on ‘Compensation of Employees’
32%
of total 2017/18 expenditure was on ‘Goods and Services’ 5%
of total expenditure in 2017/18 was under ‘Transfers and Subsidies’
Source: March IYM (Final Submission)

10. 2017/18 Aggregate Provincial Expenditure - Education
The GDE 2017/18 main appropriation of R40.8bn was adjusted to R41.7bn, of which Q4 expenditure stood at R41.4bn (99.4%)
76%
of total expenditure was on ‘Compensation of Employees’
10%
of total expenditure to date was on ‘Goods and Services’
10%
of total expenditure in 2017/18 was ‘Transfers and Subsidies’
Source: March IYM (Final Submission)

11. Goods and Services Expenditure - Top 15 Line Items by Budget
GPG Goods and Services by Department
Overall expenditure on G&S amounted to R23bn or 94% of the adjusted budget of R24.5bn, driven by - GDoH and GDE, expenditure that together account for 77% of the entire G&S allocation
Goods and Services Expenditure - Top 15 Line Items by Budget
Source: March IYM (Final Submission)

12. COMPENSATION OF EMPLOYEES

13. GPG Compensation of Employees by Department
YTD, GPG spent R63bn or 101.5% of the adjusted CoE budget of R63bn, driven by GDoH, GDE, and DSD which account for 93% of this expenditure outcome; over-expenditure of R942m concentrated mainly in GDE, and to a lesser extent, GDoH
Source: March IYM (Final Submission)

14. CONDITIONAL GRANTS

15. YTD Conditional Grant Expenditure – March 31 2018
Preliminary final 2017/18 expenditure on Conditional Grant amounted to R19.8bn or 95.4% of the adjusted budget of R20.7bn 9
Source: March IYM (First Submission)

16. INFRASTRUCTURE

17. 2017/18 Infrastructure Expenditure Summary
Departments
2017/18 Financial Year
Main Budget
Adjusted Budget
Expenditure
% Expenditure
Health
1,601,777
1,626,440
1,553,491
96%
Education
1,745,366
2,012,675
1,961,365
97%
Social Dev
79,967
207,055
204,952
99%
Human Settlement
5,556,746
5,465,274
5,345,341
98%
DRT
1,683,023
1,813,072
1,812,950
100%
GDARD
12,993
17,805
11,863
67%
SACR
153,125
183,733
84,134
46%
DID
75,934
283,057
273,491
Total
10,908,931
11,609,111
11,247,587
The 2017/18 revised allocation for infrastructure was R11.6bn, representing 97% of the adjusted budget
SACR under expenditure was due to delay in appointment of contractors.
GDARD under expenditure was due to the delay in filling built environment professionals’ posts.

18. HEALTH INTERVENTION

19. Resolution of the Executive Council pertaining to Gauteng Health
At a meeting held on 6-8 June 2017, the Executive Council resolved as follows:
That a special Cabinet Committee be established to assist with the challenge on the Department’s financial position.
The Cabinet Committee will be Led by the Member of the Executive Council for Finance, supported by the Member of the Executive Council for Health, Cooperative Governance and Traditional Affairs, Director General, Head of Department Provincial Treasury and acting Head of Department for Health.
The Executive Council Sub Committee comprises of a:
Executive Council Political Sub Committee, which meets on a monthly basis.
Executive Council Technical Sub Committee, which meets on a bi-monthly basis.

20. Work Stream 1
The Executive Council Political Sub Committee agreed to establish the following six (6) Work Streams supported by the following preliminary action plan:
Work Stream
Action Plan
FINANCIAL
MANAGEMENT
Effective Budget Management
Management and Reduction of Accruals
Revenue Management
Management of Conditional Grants
Monitoring of in year reporting
Management of Expenditure
Plans to address Wasteful, Fruitless, Irregular expenditure
Supply Chain Management optimisation

21. Work Stream 2 & 3 Work Stream Action Plan HUMAN RESOURCES MANAGEMENT
Compensation of Employees
RWOPS
Overtime
Performance Management, Culture, Consequence Management
HEALTH OPERATIONS MANAGEMENT
Medical Supplies Depot
Inventory Management
Consignment Stock
Stock levels
Infrastructure Facilities and Delivery

22. Work Stream 4 & 5 Work Stream Action Plan INFORMATION MANAGEMENT
Assessment of Management Information System
E-Health
MEDICO LEGAL
Litigation Battle Plan
Assessment of current cases including Rand value
Assessment of cases lost vs settled vs won

23. Work Stream 6 Work Stream Action Plan CORPORATE GOVERNANCE
Clinical Governance
Assessment of Governance structures for optimal decision making
Delegation of Authority

24. Principles guiding the payment of Health accruals
All suppliers owed below R10.0 million will be settled immediately.
Health has put in place a payment plan negotiated with all other suppliers.

25. OFF-BUDGET FINANCING

26. Summary of project status for off-budget financing29
Summary of project status for off-budget financing
PROJECT STATUS SUMMARY (R 72 bn)
Initiation Stage
Feasibility Stage
Market Release
Procurement Stage
Commercial/Financial Close
Disassembly Knock Down
Sedibeng Precinct
Solar Rooftop phase 2
Tshwane Bio-Energy
Gauteng Planning House
Merafong Solar Farm Cluster
Sedibeng Agro-processing Hub
Merafong Bio-energy Park
ConHill Precinct
West Rand Agro-processing Hub.
PWV 15
Silverton Automotive Industrial Park
Krugersdorp Game Reserve Theme Park
COJ: AWTT*
Ekurhuleni: AWTT
Tshwane: AWTT
Sedibeng/ West Rand Bio-gas
Gauteng Schools Programme
Vaal LH*
*AWTT = Alternative Waste Treatment Technology
*LH = Logistics Hub
Kopanong Precinct
Tshwane Agro-processing Hub
Tshwane Innovation Hub: EB 2
TIH: EB 3
Tri-generation (CH-Baragwanath Hosp)
Rooftop Solar Panels
West Rand LH
Jewellery Manufacturing Precinct
Lindley Waste Water Treatment Plant

27. TOWNSHIP ECONOMY REVITALISATION

28. Procurement Spend Performance: 2017/18
2017/18 EXPENDITURE ON TER
% SPENT
Total Spend:
100
Departments
82,9
Entities & Agency
1,8
Municipalities
15,2
Township Spend
*24,2
25,9
16,5
16,0
* The preliminary township spend information still requires verification, especially with municipalities

29. 30 DAY PAYMENTS

30. 30 Day Payments – 31 March 2018 Department 2017/2018
Office of the Premier
100%
Health
28%
Education
85%
Transport
98%
Infrastructure Development
56%
Safety
93%
Agriculture
Human Settlement
Social Development
Economic Development
99%
E-Government
Treasury
SRAC
92%
COGTA
GPG Total
51%
GPG Total (Excl. GDoH, GDE and DID)
A total of 9 Departments achieved above 95% compliance for 30 day payments, whilst 6 departments achieved above 90% compliance for 15 day payments

31. OPEN TENDER

32. Open Tender Process (OTP) background and Targets
Open Tender is an initiative of Gauteng Provincial Government to improve transparency in government procurement processes in order to build public confidence in the procurement system.
It aims to:
Restore public confidence in the public procurement process
Promote transparency of the procurement process
Ensure accountability in the spending of public money; and
Ensure all departments adhere to SCM regulatory environment
The key distinctive features of the open tender process are the following:
Appointment of probity auditors to quality assure the procurement process
Publication of tender information on each stage of the procurement process.
Opening the Bid Adjudication Committee (BAC) process to public observation
The target for the open tender process has been increased gradually as follows:
2016/17 FY (60% of new procurement processed through OTP)
2017/18 FY (80% of new procurement processed through OTP)
2018/19 FY (100% of new procurement above R2 million processed through OTP)
Open Tender Process (OTP) background and Targets

33. Progress on Open Tender
The provincial departments’ new procurement budget for 2017/2018 was R20,5 billion, with 80% of the allocation identified for open tender.
Open tender has processed 66% of departmental spend which include projects adjudicated, projects at evaluation, advert, specification and cancelled projects.
A total number of 26 projects have been cancelled during the year under review and these cancellations are mainly attributed to irregularities detected in the tender.
As a result of the early detection (before the tender is awarded) this has saved the province a total of 1,2bn in irregular expenditure.

34. OPEN TENDER LEGISLATION
Legislation Process
Status/Timeframe
Publish Draft Bill for public comment and stakeholder engagement
Completed. Was published for public comment for 30 days, which concluded on 11 May 2018
Pre- Certification of the Draft Bill
State Law Advisor analyses the draft Bill and prepares report for Legislature Technical Committee
Submitted to State Law Advisor during mid May 2018 and currently consultations are ongoing.
Review of the Draft Bill
Review draft bill for constitutionality, consistency and quality of drafting
June 2018
Final Certification of the Draft Bill
July 2018
Approval of the Draft Bill
EXCO approval for the introduction of the draft Bill
August 2018
Subsequent to the above processes, the Bill is submitted to Legislature for processing as per the Path to Legislation.

35. THANK YOU