1. 2006/07 CONDITIONAL GRANTS AND CAPITAL EXPENDITURE (THIRD QUARTER)
Gauteng Treasury
12 February, 2006

2. PRESENTATION OUTLINE EXPENDITURE STATUS OF THE PROVINCE
EXPENDITURE ON CONDITIONAL GRANTS
SERVICE DELIVERY PER DEPARTMENT
EXPENDITURE ON CAPITAL BUDGET
EXPENDITURE CHALLENGES
INTERVENTIONS BY TREASURY

3. Purpose
To provide the National Council of Provinces (NCOP) with an overview of Conditional Grant and Capital Expenditures in the Gauteng province during the First Three quarters of the 2006/07 Financial year.

4. EXPENDITURE STATUS IN THE PROVINCE

5. Consolidated Revenue & Expenditure
Actual till
Main
Estimated
YTD actual
Projected
end of Dec
Budget
Expenditure/ Revenue
% Budget
(Over)/Under
Revenue
Transfers from National
24,075,952
32,105,943
75,0%
Equitable share
17,754,883
23,361,686
76,0%
Conditional grants
6,321,069
8,744,257
72,3%
Provincial Own Revenue
1,513,451
1,758,263
1,926,992
86,1%
Less: Public Office Bearers charges
40,417
Total Revenue
25, 589,403
33,864,206
Expenditure
Total Expenditure
23,447,558
35,277,864
34,032,935
Surplus/(Deficit)
2,141,845
(1,413,658)
(168,729)

6. Revenue Receipts
A total of R33,864 billion is estimated at the end of the financial year :
This consists of :
R1,927 billion of own revenue.
R8,744 billion of conditional grants.
R23,362 billion from the equitable shares.
Total revenue of amounting to R25,589 billion was received for the third quarter ending in December, 2006.

7. Expenditure position R23,448 billion was spent this quarter
There is a projected overspending of R168 million as total expenditure is anticipated to exceed estimated revenue.

8. RECEIPTS AND EXPENDITURE ON CONDITIONAL GRANTS

9. Conditional Grants Receipts 2006/07
R 8,937 billion was allocated to the province as conditional grants for 2006/07 financial year .
R6,321 billion has been received to date
by Departments against R 6,237 billion as per payment schedule.

10. CONDITIONAL GRANTS EXPENDITURE
Department
Grant
R’(000)
2006/07
(DORA)
2006/07 Adjusted Budget
Expenditure as at 31 December 2006 (3rd quarter)
Projection (Jan-March)
% of Total Budget spent as at 31 December 2006
Agriculture
Comprehensive Agricultural Support Programme
6,873
2,369
1,916
34,5 %
Land Care Programme
3,115 79
2,5%
Education 
Further Education and Training college sector recapitalization
106,000
100%
HIV and Aids (Life Skills Education)
20,012
11,040
8,972
75,0%
National School Nutrition Programme
99,921
70,413
29,508
70,5%
Health
Comprehensive HIV and Aids
252,695
270,195
287,411
(7,316)
106,4%
Forensic Pathology services
76,752
82,020
35,137
46,883
42,8%
Health Professions Training and Development
554,039
415,530
138,509
Hospital Revitalization
327,525
415,201
229,136
186,065
55,2%
National Tertiary Services
1,866,094
1,399,572
466,522

11. CONDITIONAL GRANTS EXPENDITURE ( Continue )
Department
Grant
R’(000)
2006/07
(DORA)
2006/07 Adjusted Budget
Expenditure as at 31 December 2006 (3rd quarter)
Projection (Jan-March)
% of Total Budget spent as at 31 December 2006
Housing
Integrated Housing and Human Settlement Development
1,757,666
1,839,523
1,273,812
653,854
69,2%
Alexandra Urban Renewal Project
8000
8,000
2,648
5,810
33%
ED, Do H, and DPTRW
Provincial Infrastructure
407,745
218,521
213,200
54%
Sport and Recreation SA
Mass Sport and Recreation Participation Programme
16,820
2,866
13,954
17%
Transport
Gautrain Rapid Rail Link
3,241,000
1,756,238
54,1%
Total
8,754,690
8,936,558
5,808,124
1,760,067
65%

12. Overall Conditional Grants Performance , 2006/07 (Third Quarter)
Aggregate Spending Position
R 5,808 billion was spent against the projections of R6,237 billion (under spending of R429,260million )
Lowest performance : Landcare (R79,000 or 2,1%), Mass Sport and Recreation participation (R2,866 million or 17%), and CASP (R2,3692 million or 34,5%).
High Performance: FET ( R106,000 million or 100%) , and Comprehensive HIV & AIDS (R287,411 million or 106%).

13. Spent by Province as at 31-Dec-06
Agriculture
Department
Grant
R’(000)
2006/07
(DORA)
Transfers from National
((Y-T-D End Dec)
Spent by Province as at 31-Dec-06
% of Total Budget Spent as at 31-Dec-06)
Projection
(Jan to Mar 2007)
% Variance
(over)/under
Agriculture
Comprehensive Agricultural Support Programme (CASP)
6 873
5 598
2, 369
34,5
1 916
37,7
Land Care Programme (LCP)
3 115
2 492 79
2,5
(2,5)
Expenditure Analysis
The CASP program had spent 34,5% of the allocated budget of R6,873million by the end of the third quarter of 2006/07, with R1,916million expected to be spent during the fourth quarter;
CASP is expected to underspend by 37,7% (R2,588million) during the current financial year
LCP only spent R79,000 during the first three quarters and is expected to spend R3,115million during the fourth quarter. The program will overspend by 2,5% of its budget allocation.
R3,115million (in February 2007) to Rand Water for the eradication of alien vegetation in Elandsfontein and Mogale City. A request , was sent t indicate whether this amount has been spent by the implementing agency .
A financial commitment for Q4 on CASP has been requested to the department.

14. EDUCATION R ‘000 2006/07 Payment Schedule as at 31-Dec-06
Spent by Province as at 31-Dec-06
% of Total Budget Spent as at 31-Dec-06
Projection
% U/Spend +/ O/Spend (-)
FET College Sector Recapitalisation
106,000
100.0% -
HIV and AIDS (Life Skills Education)
20,012
15,009
11,040
55.2%
8,972
National School Nutrition Programme
99,921
74,941
70,413
70.5%
29,508
Total
225,933
195,950
187,453
83.0%
38,480

15. EXPENDITURE ANALYSIS
HIV/AIDS (Life Skills Education) reflects low spending (55,2%), suggesting that not all funds may be used
National School Nutrition Programme is just below benchmark 75% of expenditure by end of Q3, may still be fully utilised
Dept projects to spend entire 2006/07 allocation of conditional grants

16. OVERALL EXPENDITURE R225,9 million allocated to three grants
Overall expenditure as at end December R187,4 million
Percentage of grants spent as at end December 83%
FET College Recapitalisation fully spent (transferred)
HIV/AIDS Life Skills grant only 55,2% spent

17. Spent by Province as at 31 Dec 06
HEALTH
R '000
2006/07
Payment Schedule as at
31-Dec-06
Spent by Province as at 31 Dec 06
% of Total Budget Spent as at
Projection
% U/Spend + / O/Spend (-)
Comprehensive HIV and AIDS
252,695
193,897
287,411
113.7%
(7,316)
110.8%
Forensic Pathology Services
76,752
57,564
35,137
45.8%
46,883
106.9%
Health Professions Training and Development
554,039
415,530
75.0%
138,509
100.0%
Hospital Revitalisation
327,525
267,563
229,136
70.0%
186,065
126.8%
National Tertiary Services
1,866,094
1,399,572
466,522
Total
3,077,105
2,334,126
2,366,786
76.9%
830,663
103.9%

18. EXPENDITURE ANALYSIS
Comprehensive HIV/AIDS expenditure greatly exceeded allocation, with R287, 4 million spent against R252, 7 million allocated and R193, 9 million received as at 31 December 2006;
Forensic Pathology Services still reflecting low expenditure, with R35, 1 million spent as at end-December 2006 against allocation of R76, 8 million; despite projections, runs risk of under-expenditure;
Health Professions Training and Development, Hospital Revitalisation and National Tertiary Services are on track in terms of expenditure.

19. Transfers from National
HOUSING
Department
Grant
R’000
2006/07
Transfers from National
(Y-T-D End –SEP)
Spent by Province
(Y-T-D End –Dec)
% of Total Budget spend
% Variance
Housing
Integrated Housing and Human Settlement Development
1,757,666
1,273,812
69%
30%
Land Distribution: Alexandra Urban Renewal Project
8,000
2,648
33%
70%
Financial Performance
69,2 percent of the Integrated Housing And Human Settlement Development grant has been spent for
the last nine months.
33 percent of the Alexandra Urban Renewal grant was spent during last nine months
Long Environmental Impact Assessment process has delayed the implementation of the project
The department projects to spend all budget by end of financial year

20. Provincial Infrastructure Grant (PIG)
Department
Grant
R’000
2006/07
Payment Schedule
(Y-T-D End –Dec)
Transfers from National
Spent by Province
% of Total Budget spend
Spent & Projection
% Variance
DoED, DoH &DPTRW
Provincial Infrastructure Grant
407,745
138,667
218,521
54%
213,200
(5.8)
Expenditure Analysis
R 218, 54 million was spent by the participating Departments ( Education, Health and Transport ) during
the third quarter;
No transfers were received from national for the first and second; quarter (Due to Non reporting -
compliance by departments)
Transfers from National Treasury were received in December 2006 ( R138,667)
Infrastructure specialist from Gauteng Treasury continue provide support to departments in cleaning the database for infrastructure and populating the Infrastructure reporting model

21. Transfers from National
SPORTS AND CULTURE
Department
Grant
R’000
2006/07
Transfers from National
Spent by Province
% of Total Budget spend
Sport and Recr. SA
Mass Sport and Recreation Participation Programme
16,820
15,096
2,866 18
Expenditure Analysis
Significant under-spending in Sports has been observed this quarter ( 18 %) of the R15million transferred from national;
The low spending is a concern
A financial commitment Report requested by GT for Quarter fours shows that:
R7,880,624 has been committed to the Siyadlala project
R1,999,626 has already been paid January to service providers
This leaves an amount of R6,074million to be spent during February and March 2007

22. DEPARTMENT OF PUBLIC TRANSPORT, ROADS &WORKS
Grant
R’000
Adjusted budget 2006/07
Actual by grant expenditure
% of Total Budget spend
Infrastructure
163,098
111,305
68%
Gautrain Rapid Rail Link
4,641,000
1,756,238
37,8%
Total
4,804,098
1,867,543
39%
Spending on Gautrain remain the same as in Q2 at R1,756 billion and project to spend R2, 885 in the last quarter
The department has been requested to submit a detailed financial plan for Q4

23. RECEIPTS AND EXPENDITURE ON CAPITAL BUDGET

24. Capital Budget Receipts
Capital programme includes payments for capital assets within departments and Capital Transfers;
Capital transfers includes housing programmes and special infrastructure development projects (to accelerate economic growth);
Total Adjusted budget for capital transfers amounts to R 6,858 million;
Total Adjusted budget for payments of capital amounts to R2,618 billion and the largest share goes to the Departments of Health ( R1 billion) and Education( R723 million).

25. PAYMENTS FOR CAPITAL ASSETS
Department
R’000
Actual Spending to end of Dec 2006
Projection
Jan to Mar 2007
Budget
Adjusted Budget
2006/07
% of Total Budget spend
Education
415,020
388,550
725,679
723,924
57%
Health
730,314
312,117
943,756
1,030,332
71%
Social Development
5,354
6,494
31,489
11,715
46%
Office of the Premier
995
1,995
2,235
3,402
29%
Provincial Legislature
8,061
13,622
17,073
18,032
45%
Economic Development
7,019
928
66,307
16,343
43%
Housing
34,503
27,629
58,371
62,132
56%
Local Government
338
26,807
27,145 1%
Public Transport, Roads and Works
304,417
241,366
568,051
592,671
Community Safety
992
14,512
20,100
15,534 6%
Agriculture, Conservation and Environment
9,536
9,592
8,069
19,123
50%
Sports and Recreation
22,936
39,244
47,650
62,180
37%
Gauteng Shared Service Centre
20,511
11,441
31,952
64%
Gauteng Provincial Treasury
2,138
2,270
386
4,408
49%
SUBTOTAL
1,562,134
1,096,567
2,548,263
2,618,893
60%

26. AGREGGATE CAPITAL EXPENDITURE
R 1,6 billion or 60% percent was expended as at the end of December, with the projected expenditure of R 1,1billion for the fourth quarter.

27. LOW SPENDING DEPARTMENTS
Community Safety (6%) of its total budget
Sports and Culture (37 %);
No Reason provided
Office of the Premier ( 29%)
No Reason provided
Local Government ( 1%)
No reason provided
Provincial Legislature ( 45%)
There is Risk of Under spending in this departments

28. HIGH SPENDING DEPARTMENTS
Department of Health ( 71%);
The department is experiencing budget pressures on capital projects, due to increase in construction costs and fast tracking of projects
Although some departments project an overspending , but the average spending rate is low (50%)
Department is projecting an over expenditure (informed to keep their spending within the budget)

29. SERVICE DELIVERY

30. Actual Expenditure as at End of December 2006 ( Q3)
AGRICULTURE
NO OF PROJECTS
PROGRESS
BUDGET
R’000
Actual Expenditure as at End of December 2006 ( Q3)
% of Total Budget spend 6
Below 25 %
Started Construction
7,352
1,618
22%
25% 0% 2
50% 96
402
419%
75%
1,936
253
13%
Retention
7,286
3,958
54% 9
Handed over
6,686
3,748
56%
Design stage
1,000 38
TOTAL
24,356
R9,979
41%

31. Actual Expenditure as at End of December 2006 ( Q3)
EDUCATION
NO OF PROJECTS
PROGRESS
BUDGET
R’000
Actual Expenditure as at End of December 2006 ( Q3)
% of Total Budget spend 54
Below 25 %
Started Construction
361,676
148,998
44% 10
25%
61,924
21,094
34% 16
50%
55,654
30,438
54% 17
75%
58,579
50,659
84% 75
Retention
26,003
13,459
51% 23
Handed over
3,478
1,653
48% 3
Tendering stage
11,812
2,067
17%
Design stage
50,595
142
0.3%
186
Identification stage
1,381
1,895
137%
TOTAL
631,102
270,405
43%

32. EDUCATION (Project Type)
NO OF PROJECTS
BUDGET
R’000
Actual Expenditure as at End of December 2006 ( Q3)
% of Total Budget spend
REHABILITATION 65
23,156
8,412
36%
MAINTENANCE
141
72,807
26,112
35%
NEW
252
539,210
380,492
70%
TOTAL
635,173
415,016
65%

33. Actual Expenditure as at End of December 2006 ( Q3)
HEALTH
DESCRIPTION OF PROGRAM
Budget
R’000
Actual Expenditure as at End of December 2006 ( Q3)
% of Total Budget spend
HOSPITAL REVITALIZATION
396,123
295,488
74.6%
PROVINCIAL
INFRASTRUCTURE GRANT
81,548
81,157
99.5%
INFRASTRUCTURE
GRANT
166,148
253,980
152.96%
TOTALS
643,819
630,625
98%

34. HOSPITAL REVILITISATION
Chris Hani Baragwanath Hospital: new AE&T OPD, pharmacy relocation and demolition
Project is 25% complete.
Chris Hani Baragwanath Hospital level 1: new 300 bed hospital
Phase I comprising of bulk earthworks and enabling works and the progress is 30% complete
Phase II tender documentation is ready for procurement
Germiston Hospital: new 300 bed hospital
Phase i comprising of earthworks, progress is 65% complete
Phase ii tender documentation is ready for procurement
Mamelodi Hospital: new 300 bed hospital
Construction has commenced and the progress is 75%.

35. DEPARTMENT OF HOUSING Alexandra Renewal
Category/
Type of Structure
No. of Projects
Budget
Actual Expenditure as at End of December 2006 ( Q3)
R’000
% of Total Budget spend
New Construction 15
96,595
12,303 13
Rehabilitation/
Upgrading 27
121,389
83,891 69
Recurrent Maintenance 25
32,067
29,954 93
Total Provincial Infrastructure 78
250,393
126,148 50

36. Actual Expenditure as at End of December 2006 ( Q3)
DEPARTMENT OF HOUSING
Category/
Type of Structure
No. of Projects
Budget
Actual Expenditure as at End of December 2006 ( Q3)
R’000
% of Total Budget spend
New Construction
204
214,689,614
50,232,148 23
Rehabilitation/
Upgrading
1007
656,941,181
308,911,258 47
Recurrent Maintenance
282
11,669,940
40,228,741
345
Total Provincial Infrastructure
1493
883,300,735
399,372,147 45

37. ECONOMIC SECTOR (ROADS)
Category/
Type of Structure
No. of Projects
Budget
R’000
Actual Expenditure as at End of December 2006 ( Q3)
% of Total Budget spend
New Construction
(Roads & Infrastructure,
Buildings,ICT) 7
216,428
128,423
59%
Rehabilitation/
Upgrading
(Rehab. of roads including
resealing) 2
52,046
31,278
60%
Recurrent
Maintenance
(General maintenance,
Pot-Holes) 35
70,714
34,422
49%
Total Provincial
Infrastructure 44
339,188
194,123
57%

38. Actual Expenditure as at End of December 2006 ( Q3)
SPORTS AND CULTURE
NO OF PROJECTS
PROGRESS
BUDGET
R’000
Actual Expenditure as at End of December 2006 ( Q3)
% of Total Budget spend 4
Below 25%
Construction Started
R5,700 0% 6
50% Completed
R48,000
R36,712
76% 3
75% Completed
R2,900
R1,200
41% 11
Identification stage
R2,750 1
Feasibility
R200
Retention stage
R1,500
TOTAL
R61,050
R37,912
62%

39. SPORTS AND CULTURE (Project Type)
NO OF PROJECTS
BUDGET
R’000
Actual Expenditure as at End of December 2006 ( Q3)
% of Total Budget spend
REHABILITATION 13
3 Multi-Purpose Sport Centre
7 Soccer Stadiums
1 Art Centre
1 Tennis Stadium
1 Theatre
7,700
500
6,5%
NEW 2
1 Sports Field
1 Museum
1,500 - 0%
UPGRADING 12
9 Heritage sites
1 Soccer Stadium
2 Multi-Purpose Sports Centre
51,850
37,412
72%
TOTAL
61,050
37,912
62%

40. PUBLIC TRANSPORT ROADS AND WORKS
Category/
Type of Structure
No. of Projects
Budget
R’000
Actual Expenditure as at End of December 2006 ( Q3)
% of Total Budget spend
New Construction
(Roads,MPCC,
Home Based Care,
etc) 51
142,868
127,802 89
Rehabilitation/
Upgrading
472
609,703
412,336 68
Recurrent
Maintenance 10
228,127
97,472 43
Gautrain 1
3,241,000
1,756,238 54
Total Capital Expenditure
534
4,221,698
2,393,849 57

41. Challenges in Implementing Conditional Grants and Capital Budgets
Absence of Integration in Infrastructure and Capital projects Planning;
Absence of Infrastructure Planning and Budgeting Skills;
Incorrect Data in the IRM (Infrastructure Reporting Model)

42. Proposed Intervention by Treasury Intervention
Infrastructure specialists have been appointed and will focus on monitoring and evaluation of the IRM information to improve reporting on capital projects;
Treasury would encourage the utilisation of Infrastructure Delivery Improvement Program to help integrate planning , budgeting and reporting cycles;
Treasury conducted a rigorous analysis of departments projections in Q3 and made recommendation to surrender funds for reallocation in some departments.

43. END OF PRESENTATION
THANK YOU