1. Basic Education Supplementary Presentation: National &Provincial Education Expenditure Trends and Projections
Presentation by Dept of Basic Education to the Joint Sitting of the HET & Basic Education Portfolio Committees
Parliament, 13 October 2010

2. Department of Basic Education Expenditure Trends & Projections

3. 2010/11 Allocation vs Expenditure per programme
Actual Expenditure at 30 Sept 2010
Balance
% spent
R’000
1: Administration
45.1%
2: Curriculum Policy, Support and Monitoring
15.8%
3: Teacher Education Human Resource Development and Monitoring
63 243
87.7%
4: Planning, Quality Assessment and Monitoring and Evaluation
54 082
94 616
36.4%
5: Social Responsibility
51.3%
Total
45.9%

4. Spending trends per economic classification
Allocation
Actual Expenditure at 30 Sept 2010
Deviation
% spent
R’000
Compensation of Employees (Including Examiners and Moderators)
44.3%
Goods and Services
17.8%
Financial transactions in assets and liabilities
Transfer Payments
55.8%
Provinces and municipalities
51.2%
Departmental agencies and accounts
8 674
98.0%
Foreign governments and international organisations
12 157 0%
Non-profit institutions 50
Households 60
-60
Capital Expenditure
4 050
2 698
1 352
66.6%
Machinery and equipment
4 065
1 658
2 387
40.8%
Software and other intangible assets 5
1 040
-1 035 %
Total
45.9%

5. Allocation per Programme over the 2010 MTEF
2010/11
R’000
2011/12
2012/13
P1: Administration
P2: Curriculum Policy, Support & Monitoring
P3: Teacher Education Human Resources Development and Management
P4: Planning, Quality Assessment and Monitoring and Evaluation
P5: Social Responsibility
TOTAL

6. Allocation Summary over the 2010 MTEF
SERVICE
2010/11
R’000
2011/12
2012/13
Compensation of Employees
Examiners and Moderators
13 830
14 660
15 393
Transfers to Public Entities
Other Transfers
12 348
13 081
13 730
Conditional Grants
Earmarked Funds
Departmental Operations
65 119
68 135
71 763
Projects
47 958
54 610
57 564
Total

7. Conditional grants over the 2010 MTEF
 2010/11
R’000
 2011/12
 2012/13
Technical Secondary Schools Recapitalisation
80 000
Dinaledi Schools
70 000
HIV and Aids Life Skills
National School Nutrition Programme
TOTAL: CONDITIONAL GRANTS

8. Total Provincial Education Expenditure Trends and Budget Pressures

9. The table below reflects a summary of the budget and expenditure figures obtained from In-year monitoring reports
Provinces
Approved Budget
Adjusted Budget
Actual Expenditure August 2010
Projected Expenditure Sept 2010-Mar 2011
Total Projected Expenditure for 2010/11
Projected under/(over)-expenditure
% Spent-August 2010
 PEDs
R'000 %
Eastern Cape
41.2%
Free State 8  5  8 
( )
37.8%
Gauteng
( )
40.4%
KwaZulu-Natal
( )
40.3%
Limpopo
( )
38.8%
Mpumalanga
( )
39.1%
Northern Cape
( )
39.6%
North West
( )
36.5%
Western Cape
39.0%
TOTAL
137 
137 
85 
139 
(2 413 682)

10. The total average expenditure by PEDs for the reporting period is R54,469 billion (39,6%) of the adjusted budget of R137,438 billion. The spending rate is lower compared to 41,8 per cent in 2009/10 due to cost containment measures introduced by the PEDs in 2010/11 financial year.
The PEDs are projecting an over-expenditure of R2,413 billion at the end of the financial year, but the current expenditure does not support that, clear picture will be realised once the annual increases have been finalised.
Compensation of employees
The PEDs incurred an expenditure of R43,682 billion (41,7%) of R104,643 billion on compensation of employees. The projected expenditure for the remaining months is R65,258 billion, resulting in over-expenditure of R4,297 billion at the end of the financial year. The current projected over expenditure is expected to increase after the conclusion of the improvement of conditions of services (ICS). The PEDs budgeted 5,3 per cent and the current percentage on the table is 7,5 excluding the expected increase in housing allowance of R300,00. Compensation of employees remains a cost pressure in the education sector and compromises service delivery regarding the shortage of other resources.
Goods and services
The actual expenditure on goods and services is very low at R3,841 billion, representing 26,4 per cent of R14,524 billion. Little improvement is expected in the course of the financial year, but this item is a target for cost containment measures as most of PEDs have already indicated during the first quarter visits.

11. Capital Assets
The actual expenditure on capital assets is still low at R1,511 billion, representing 21,1 per cent of R7,159 billion. Northern Cape reflects the highest spending rate of 38,4 per cent followed by KZN (36,6%) and Western Cape (31,9%), mainly on buildings and other fixed structures. The lowest expenditure is realised in Free State at 8,3 per cent. The expenditure on machinery and equipment has been slow, the highest being in Gauteng at 38,6 per cent and the lowest being North West at 1,6 per cent. Most of the PEDs indicated that this items will also suffer because of the cost cutting measured introduced.
Conditional Grants
The average spending for all conditional grants is less than 30,9 per cent except for new conditional grants Technical Schools which is low at 4,9 per cent. Only two PEDs, namely, Eastern Cape (35.0%) and Gauteng (3.1%) has spent on its budget for Technical Schools Recapitalisation. The Department continues to check readiness of the PEDs, in implementing the said conditional grant.

12. Personnel Expenditure Trends and Budget Pressures

13. Oversight : Planning & budget projections
Projections for the 2010/2011 MTEF
Budget trends
Reasons for over expenditure
Recommendations

14. Budget with carry through effect R'000
Projected cost : 2010/2011
Province
Budget with carry through effect R'000
PED Budgets R'000
Variation R'000
Comment EC
18,278,224
17,372,413
-905,811
Outside budget FS
6,500,672
6,666,435
Within budget GP
16,320,025
16,100,096
-219,929
KZN
22,402,126
22,022,542
-379,584 LP
15,135,536
14,667,809
-467,727 MP
8,988,367
9,217,097 NW
6,944,098
6,814,709
-129,389 NC
2,665,977
2,674,086 WC
8,773,312
9,107,962
Total
106,008,336
104,643,149
-2,102,439

15. Percentage in expenditure Percentage trend in Increases
Budget Trends
Percentage in expenditure
Percentage trend in Increases
PROVINCES
2008/09
2009/10
2010/11
2011/12
2012/13 %
Eastern Cape
100.0%
105.3%
18.1%
6.9%
7.2%
3.2%
Free State
106.7%
98.9%
23.0%
7.4%
5.6%
4.6%
Gauteng
102.7%
102.2%
21.0%
7.7%
10.1%
2.8%
KwaZulu-Natal
103.7%
100.2%
20.4%
5.2%
6.3%
5.1%
Limpopo
103.9%
103.8%
19.7%
7.5%
5.7%
4.2%
Mpumalanga
106.0%
101.6%
19.1%
11.6%
7.0%
6.5%
Northern Cape
111.4%
100.4%
24.3%
8.2%
4.5%
North West
98.2%
17.1%
2.9%
9.1%
Western Cape
15.7%
11.1%
5.4%
TOTAL
102.9%
101.8%
19.5%
7.6%
Expected growth percentage
17.5%
6.8%
6.80%
Explanation
11.5% COL+ 6% OSD

16. Reasons for shortfall Filling of unfunded posts
Excess educators not placed which is costing Education an estimated R2.9 billion
Incorrect grading of posts in offices by some PEDs

17. RECOMMENDATIONS
1. Vacant teaching posts be frozen in cases whereby the curriculum is
not compromised
2. Vacant teaching posts be filled if excess educators/bursars fit the profile
of the post
3. Office based posts be frozen in 2010/11 if they are not critical
4. Clear criteria on what is “critical” must be determined
5. Staff establishments on PERSAL must be aligned with approved staff
establishment
6. The Task Team established on filling of teaching posts must conclude
their work and provide :-
Guidelines on how educator posts at schools are to be filled in
provinces in line with existing policy and collective agreements
with preference given to excess educators and bursars.
An exit strategy when placement is not possible.

18. School Infrastructure
With a focus on the Accelerated School Infrastructure Development Initiative (ASIDI)

19. BASIC SERVICES AND IN-APPROPRIATE STRUCTURES
Summary per province
Schools below basic Functionality
Province
No Of Schools
Total Amount
Eastern Cape
1319 R
Free State
206 R
Gauteng 50 R
KwaZulu Natal
576 R
Limpopo
570 R
Mpumalanga
513 R
North West
144 R
Northern Cape 19 R
Western Cape 15 R
Totals
3412 R
Total
Capacity R
Grand Total R

20. Projected Financial Requirements
2011/12
2012/13
2013/14
TOTAL
1. Infrastructure R R R R
2. Capacity building
R8 232 
R11 812 
R20 404  R

21. 2010-2014 Strategic Planning Period:
ASIDI FOCUS
Strategic Planning Period:
Schools without water, sanitation, electricity and or fencing
Schools constructed from inappropriate material and are a danger to learners and educators and overcrowded schools
In addition, prioritised critical teaching and learning spaces in those identified schools will be provided.
Phase delivered in an accelerated mode

22. 2020-2025 Strategic Plan period
ASIDI FOCUS
Strategic Plan
Expand the provision of critical teaching and learning spaces that are essential to enhance teaching and learning outcomes.
Strategic Plan period
By 2025 schools and their teaching and learning environments will be at new and relevant international best practice level of provision and functionality.

23. 2010-2025 Strategic Planning Period:
ASIDI FOCUS
Strategic Planning Period:
Strategic Asset Management plan to be put in place and maintenance plans designed, budgeted for and implemented for each school;
Develop and roll out an innovative strategy to incorporate E-Learning, mobile laboratories and libraries to enhance the learning and teaching environment;
Future planning and backlogs arising from new space requirements which present new challenges to be timeously addressed.

24. STATUS QUO Developed ASIDI Initiative;
Current funding in the 2010 MTEF amounts to R26b;
Bid amounting to R40b submitted to National Treasury (includes capacity to DBE and provinces) but unlikely to receive given budget pressures;
Service provider appointed for development of standard school designs, specifications and a cost model;
Exploring the use of experienced programme/project management support from the private sector to manage the programme for DBE;
Exploring the use of implementing agents to provide programme management support.

25. Way Forward
Develop Model, funding arrangements, procedures, monitoring and reporting
Consultations with affected provinces and stakeholders
Develop Implementation Plan and submit to Senior Management, HEDCOM & CEM for approval
Implement Plan and monitor

26. Overall Conclusion
Provincial budgets are projected to remain under serious pressure
This is largely due to pressure on personnel expenditure and need for additional funding for school infrastructure
Improving the credibility of Provincial Education Budgets is a very important priority
There is scope to improve efficiencies especially (but not only) in personnel expenditure
DBE will focus on monitoring and support – including a detailed expenditure review to be done in collaboration with Treasuries and PEDs