1. Select Committee on Finance 14 August 2012
GAUTENG PROVINCIAL GOVERNMENT PRELIMINARY OUTCOME FOR 2011/12 AND 2012/13 Q1 PERFORMANCE
Presented By:
Gauteng Provincial Treasury

2. 2011/12 PES and Conditional Grant receipts
Contents
2011/12 PES and Conditional Grant receipts
2011/12 Expenditure Overview
2011/12 Rollovers
2012/13 Q1 GPG Expenditure Trends
Conclusions

3. 2011/12 Expenditure Overview
In the 2011/12 financial year, R65.6bn was received by the Province as follows:
Provincial Equitable Share (PES): R50.9bn
Conditional Grants: R14.7bn
All PES and Conditional grant monies were transferred except R9.8m of GDE’s HIV/Aids (Life Skills) Conditional Grant withheld by National Treasury

4. 2011/12 Expenditure Overview
During 2011/12, ring-fencing of infrastructure grants and conditional grants was strictly enforced to ensure that these were used for intended purposes
As at the end of the financial year there was net under-expenditure of R977.6m (Vote level)as follows:
Infrastructure projects funded from PES (R471m)
Conditional grants (R778.3m)
NGO’s/others (R268.2m)
Goods and Services (R238.2m)
There was also over-expenditure of R730.2m (Economic Classification)in ‘Compensation of Employees’

5. Adjusted Budget Allocation Actual YTD Expenditure
2011/12 Expenditure by Vote
Vote
Department
Adjusted Budget Allocation
Actual YTD Expenditure
Outcome
R’000’ % 1
Office of the Premier
228,742
207,233
91%
21,509 2
Gauteng Provincial Legislature
402,720
378,710
94%
24,010 3
Economic Development
822,573
797,002
97%
25,571 4
Health
23,386,833
23,813,393
102%
-426,560
Social Development
2,433,081
2,333,714
96%
 99,367 5
Education
26,437,607
26,122,180
99%
315,427 6
Local Government and Housing
4,588,379
4,457,706
130,673 7
Roads and Transport
6,357,678
5,784,647
573,031 8
Community Safety
423,747
400,622
95%
23,125 9
Agriculture and Rural Development
516,658
477,506
92%
39,152 10
Sport, Arts, Culture and Recreation
389,828
389,857
100%
-29 11
Finance
1,551,236
1,486,138
65,098 12
Infrastructure Development
1,347,606
1,260,419
87,187
Total
68,886,688
67,909,127
977,561

6. 2011/12 Expenditure by Vote
The following departments over-spent their 2011/12 adjusted appropriations:
Health (R426.5m): Of which R884.9m was in ‘Compensation of Employees’ and R558.3m within ‘Goods and Services’, offset by the R627m under-expenditure in the category ‘Payments for Capital Assets’ and the balance in ‘Transfers and Subsidies’
Marginal over-expenditure of R29 thousand for Sport, Arts, Culture and Recreation

7. 2011/12 Expenditure by Vote Significant under-spending was noted for:
Roads and Transport (R573m): Of which R511.4m in ‘Goods and Services’, R75.8m in ‘Payments for Capital Assets’ and offset by R14.6m over-expenditure in ‘Compensation of Employees’
Education (R315.4m): of which of which R147.7m was in ‘Goods and Services’, R119.1m in ‘Payments for Capital Assets’ (R119.1m) and R15.1m in ‘Compensation of Employees’, R33.5 on ‘Transfers and Subsidies
Local Government and Housing (R130.7m): R63.9m in ‘Compensation of Employees’, R16.7m in ‘Goods and Services’ and R41.6m in ‘Machinery and Equipment’
Social Development (R99.4m): R57.5m in ‘Goods and Services’, R59m in ‘Transfers and Subsidies’ to non-Profit Institutions (NPIs), offset by R16.6m over-expenditure under ‘Compensation of Employees’

8. 2011/12 Expenditure by Economic Classification
Item
Adjusted Budget Allocation
Available Funds
Actual YTD Expenditure
Outcome 1 2 3 4
5=(2-3)
R’000’ %
Current payments
52,019,396
51,813,561
52,308,540
101%
-494,979
Compensation of employees
36,427,390
36,447,452
37,177,636
102%
-730,184
Goods and services
15,586,905
15,327,232
15,088,784
97%
238,448
Transfers and subsidies
14,480,611
14,540,190
13,968,571
96%
571,619
Provinces and municipalities
1,037,042
1,037,044
749,549
72%
287,495
Departmental agencies and accounts
2,848,329
2,849,154
2,807,857
99%
41,297
Universities and technikons
16,028
15,727
98%
301
Foreign governments and international organisations -
Public corporations and private enterprises
1,903,822
1,906,573
1,905,955
100%
618
Non-profit institutions
4,627,002
4,680,906
4,412,716
95%
268,190
Households
4,048,388
4,050,485
4,076,767
-26,282
Payments for capital assets
2,386,111
2,410,136
1,529,101
64%
881,035
Buildings and other fixed structures
1,259,284
903,075
356,209
Machinery and equipment
1,068,843
1,087,243
589,457
55%
497,786
Heritage assets
Specialised military assets
Biological assets
Land and sub-soil assets
52,500
18,053
34%
34,447
Software and other intangible assets
5,484
11,109
18,516
338%
-7,407
Payments for financial assets
570
122,801
102,914
18055%
19,887
Total
68,886,688
67,909,126
977,561

9. 2011/12 Conditional Grant Expenditure
Adjusted Grant Allocation
National Transfers
Actual YTD Exp
Outcome
R’000’ %
Agriculture and Rural Development
69,849
66,962
96%
52,463
75%
17,386
Comprehensive Agric. Support Prog.
44,060
41,173
93%
28,860
66%
15,200
Illima/Letsema Projects
20,000
100%
19,558
98%
442
Land Care Programme
4,044
4,045 -1
Disaster Management
1,745 - 0%
Sport, Arts, Culture & Recreation
130,494
125,864
129,501
99%
993
Community Library Services
55,297
54,716
54,986
311
Mass Sport & Recreat Participation
75,197
71,148
95%
74,515
682
Education
2,225,152
2,057,081
92%
2,095,648
94%
129,504
Dinaledi Schools
14,140
Education Infrastructure
473,393
461,011
97%
461,622
11,771
HIV and Aids (Life Skills Education)
31,146
18,314
59%
26,751
86%
4,395
National School Nutrition Prog.
539,707
509,798
468,871
87%
70,836
Technical Secondary Schools Recap
34,173
30,596
90%
10,647
31%
23,526
Further Educ & Training Colleges
1,132,593
1,023,222
1,113,617
18,976

10. 2011/12 Conditional Grant Expenditure
Adjusted Grant Allocation
National Transfers
Actual YTD Exp
Outcome
R’000’ %
Health
6,243,744
6,169,569
99%
6,097,739
98%
146,005
Comprehensive HIV & Aids
1,620,673
100%
1,621,949
-1,276
Forensic Pathology Services
97,966
96,533
1,433
Health Infrastructure
142,694
135,440
95%
7,254
Health Prof. Train & Development
690,803 -
Hospital Revitalisation
931,640
857,465
92%
793,293
85%
138,347
National Tertiary Services
2,759,968
2,759,721
247
Human Settlements
3,804,647
3,804,611
3,831,680
101%
-27,069
Housing Disaster Relief Grant 36 0%
Human Settlements Development
Infrastructure Development
349,833
306,058
87%
271,152
78%
78,681
Devolution of Property Rates
270,775
242,692
90%
28,083
EPWP Incentive Grant
44,210
435 1% 5
44,205
EPWP Grant - Social Sector
34,848
28,455
82%
6,393
Transport
2,377,088
2,149,829
1,944,083
432,846
Provincial Roads Maintenance
566,917
134,596
24%
432,321
Gautrain Rapid Rail Link
5,300
Transport Disaster Management
159
Public Transport Operations
1,804,712
1,577,612
1,804,187
525
Total
15,200,807
14,679,974
97%
14,422,266
778,346

11. 2011/12 Conditional Grant Expenditure
Conditional grant expenditure of R14.4bn in 2011/12, representing 95% of the R15.2bn adjusted allocation
High under-expenditure within:
Vote 8: Roads and Transport, where only R134.6m of the R566,917 for Provincial Roads Maintenance Grant was spent due to delays in concluding contractual arrangements for the outsourced routine maintenance
Vote5: Education, particularly:
National School Nutrition Programme (NSNP) (R70.8m un der spending)
Technical School Recapitalisation Conditional Grant (R23.5m under spending)
Health Services Branch of Vote 4: Health and Social Development (R146 m), with Hospital Revitalisation Conditional Grant according for R138 m.

12. 2011/12 Rollovers
Of the 2011/12 pre-audited net under-expenditure of R977.6m, R737.9m was in PES funds, of which R471m was ring-fenced capital expenditure funding, and R778.3m conditional grants
Stringent criteria were applied to rollover requests e.g. surrendering unspent PES funds to PRF, supplying lists of accruals and commitments, invoices awaiting payment, and demonstration by departments that funds requested were allocated to policy outcomes envisaged to have a positive impact on service delivery
R572.1m in conditional grant funding thus motivated to National Treasury for rollover
R390m for continuation of electromechanical works under Vote 4: Health and Social Development, R5.9m for Social Development Branch and R12m for Vote 12: Finance, supported in PES rollovers; all other departments had insufficient cash to surrender to PRF as part of the process

13. Original Budget Allocation Actual YTD Expenditure
2012/13 Q1 Expenditure by Vote
Vote
Department
Original Budget Allocation
Actual YTD Expenditure
YTD Balance
R’000’ % 1
Office of the Premier
236,734
44,469
19%
192,265 2
Gauteng Provincial Legislature
455,000
141,928
31%
313,072 3
Economic Development
912,008
218,252
24%
693,756 4
Health
24,519,336
7,156,675
29%
17,362,661 5
Education
27,150,751
7,455,208
27%
19,695,543 6
Social Development
2,490,492
496,667
20%
1,993,825 7
Local Government and Housing
4,737,125
649,115
14%
4,088,010 8
Roads and Transport
4,363,790
1,013,957
23%
3,349,833 9
Community Safety
435,946
72,774
17%
363,172 10
Agriculture and Rural Development
493,976
93,713
400,263 11
Sport, Arts, Recreation and Culture
392,837
50,906
13%
341,931 12
Finance
1,322,700
307,056
1,015,644 13
Gauteng Provincial Treasury
428,934
58,514
370,420 14
Infrastructure Development
1,371,052
426,202
944,850
Total
69,310,681
18,185,435
26%
51,125,247

14. 20122/13 Q1 Expenditure by Vote
Of the 2012/13 appropriation of R69.3bn, YTD expenditure stood at R18bn, or 26%
Most GPG department expenditure was significantly lower than or marginally close to the 25% threshold, except for Vote 14: Infrastructure Development, which spent R426.2m (31%) of its 2012/13 budget
Significantly slow spending was seen for:
Vote 7: Local Government and Housing: R649.2m of the R4.7bn 2012/13 allocation
Vote 13: Gauteng Provincial Treasury: R58.6m of the R428.9m allocation spent
Vote 1: Office of the Premier: 44.5m of the R236m 2012/13 budget spent

15. 2012/13 Q1 Expenditure by Economic Classification
Item
Original Budget Allocation
Actual YTD Expenditure
YTD Balance
R’000’ %
Current payments
53,350,438
13,602,306
25%
39,748,132
Compensation of Employees
39,107,564
9,342,027
24%
29,765,537
Goods and Services
14,240,774
4,258,488
30%
9,982,287
Interest and Rent on Land
2,100
1,678
80%
422
Payments -
113
-113
Transfers and Subsidies
13,380,710
3,791,072
28%
9,589,638
Provinces and municipalities
926,735
459,716
50%
467,019
Departmental agencies and accounts
1,420,862
627,281
44%
793,581
Higher education institutions
16,676
1,816
11%
14,860
Foreign governments and international organisations
Public corporations and private enterprises
1,644,429
217,912
13%
1,426,517
Non-profit institutions
5,067,760
1,866,398
37%
3,201,362
Households
4,304,248
617,950
14%
3,686,298
Payments for Capital Assets
2,579,533
791,270
31%
1,788,263
Buildings and other fixed structures
1,542,995
494,765
32%
1,048,230
Machinery and equipment
977,233
203,574
21%
773,659
Heritage assets
9,411
-9,411
Specialised military assets
Biological assets
Land and sub-soil assets
52,515
79,602
152%
-27,087
Software and other intangible assets
6,790
3,919
58%
2,871
Financial Transactions in Assets and Liabilities
786
-786
Total
69,310,681
18,185,435
26%
51,125,247

16. 2012/13 Q1 Expenditure by Economic Classification
Expenditure of R9.3bn on ‘Compensation of Employees’, of which R3.6bn in Vote 4: Health and R4.9bn in Vote 5: Education; most indications are that there will once again be over-expenditure within this line item, particularly for Vote 4: Health, and Vote 5:Education
Relatively high spending of R4.2bn (30%) of the R13.2bn budget within ‘Goods and Services’ reflects the significant number of accruals from 2011/12
Under ‘Transfers and Subsidies’, R459.7m transferred, mainly Emergency Medical Services (EMS) and Primary Health Care (PHC), the bulk of which were accrued from the 2011/12 financial year
Slow spending in transfers to households (in the form of housing subsidies) in the period under review
Within ‘Payments for Capital Assets, YTD expenditure of R787.7m mainly under ‘Buildings and Other Fixed Structures’ (492.4m) and ‘Machinery and Equipment’ (R202.3m)

17. 2012/13 Q1 Conditional Grant Expenditure
Grant Allocation
Actual YTD Exp
Outcome
R’000’ %
Agriculture and Rural Development
71,060
9,484
13%
61,576
Comprehensive Agric. Support Prog.
48,016
8,500
18%
39,516
Illima/Letsema Projects
16,798
984 6%
15,814
Land Care Programme
6,246 - 0%
Disaster Management
Sport, Arts, Culture & Recreation
130,382
5,665 4%
124,717
Community Library Services
56,452
623 1%
55,829
Mass Sport & Recreat Participation
73,930
5,043 7%
68,887
Education
2,249,375
474,980
21%
1,774,395
Dinaledi Schools
20,139
Education Infrastructure
512,866
83,143
16%
429,723
HIV and Aids (Life Skills Education)
29,147
3,761
25,386
National School Nutrition Prog.
548,690
103,516
19%
445,174
Technical Secondary Schools Recap
25,000
10,477
42%
14,523
Further Educ & Training Colleges
1,113,533
274,083
25%
839,450

18. 2012/13 Q1 Conditional Grant Expenditure
Grant Allocation
Actual YTD Exp
Outcome
R’000’ %
Health
6,620,950
877,045
13%
5,743,905
Comprehensive HIV & Aids
1,901,293
247,180
1,654,113
National Health Insurance Grant
31,500
138 0%
31,362
Health Infrastructure
110,361
11,229
10%
99,132
Health Prof. Train & Development
725,310
38,436 5%
686,874
Hospital Revitalisation
795,439
107,875
14%
687,564
National Tertiary Services
3,044,567
472,188
16%
2,572,379
Nursing Colleges and Schools Grant
12,480 -
Human Settlements
4,003,776
513,964
3,489,812
Housing Disaster Relief Grant
Human Settlements Development
Infrastructure Development
323,414
850
322,564
Devolution of Property Rates
281,469
EPWP Incentive Grant
EPWP Grant - Social Sector
41,945 2%
41,095
Transport
2,113,346
309,840
15%
1,803,506
Provincial Roads Maintenance
487,600
100,263
21%
387,337
Gautrain Rapid Rail Link
Transport Disaster Management
Public Transport Operations
1,625,746
209,576
1,416,170
Total
15,512,303
2,191,828
13,320,475

19. 2012/13 Q1 Conditional Grant Expenditure
R15.6 billion in conditional grant funding, an increase of R311.5 million from the 2011/12 financial year
YTD expenditure of R2.2bn is rather low, and is mainly due to the same difficulties with overall spending that are attributable to the changes in the Standard Chart of Accounts effective from 1 April 2012

20. 2012/13 Q1 Infrastructure Expenditure
Department
2012/ Budget
Expenditure at end of Q1
% Expenditure
Balance /13 Financial Year
R ‘000
Vote 4: Health
1,484,047
148,933
10%
1,335,114
Vote 5: Education
1,245,333
352,297
28%
893,036
Vote 6: Social Development
95,424
11,685
12%
83,739
Vote 7: Local Government And Housing
4,058,776
505,341
3,553,435
Vote 8: Roads And Transport
1,244,980
195,426
16%
1,049,554
Vote 10: Agriculture And Rural Development
4,000 -
Vote 14: Infrastructure Development
127,363
27,731
22%
99,632
Total
8,259,923
1,241,413
15%
7,018,510

21. 2012/13 Q1 Infrastructure Expenditure
A total of R8.3bn has been allocated for infrastructure delivery in 2012/13, of which R6bn (73%) is funded by conditional grants and R2.3bn (27%) via the PES
Of the 2012/13 infrastructure budget, the highest allocation is to Vote 7: Local Government and Housing
YTD expenditure of R1.2bn (15%), with the highest spending of R352.3m within Vote 5: Education
No expenditure was reported for Vote 10: Agriculture and Rural Development

22. Conclusions
Accruals and over-commitments continue to negatively impact on the service delivery targets for 2012/13 financial year. Engagements between Gauteng Provincial Treasury and respective departments has been held to deal with these challenges.
Delays in the payment of invoices – stemming from misallocation of invoices at delivery stage, delays on inter-departmental cash transfers, interface of payment processes within and between departments continue to adversely affect infrastructure delivery programmes
Misallocations on expenditure achieved across various funding sources distort the presented expenditure figures on the Basic Accounting System (BAS) used by all stakeholders to determine expenditure patterns.

23. Conclusions
The current processes for supply chain management for infrastructure delivery and maintenance apply similar principles used for general goods and services, thereby restricting exploration of alternative procurement and contracting strategies.
The value for money on infrastructure delivery continues to be undermined by both internal and external factors thus compromising the provincial infrastructure delivery targets.
Currently, the lack of skilled personnel internally inhibits efficient management of infrastructure delivery and there is heavy reliance on external service providers.
The Provincial Treasury working with National Treasury is currently rolling the IDMS to fast track on the infrastructure delivery.

24. THANK YOU

25. Select Committee on Finance 14 August 2012
GAUTENG PROVINCIAL GOVERNMENT’S PLANS TO
DETER FRAUD AND CORRUPTION
Presented By:
Gauteng Department of Finance

26. PRESENTATION OUTLINE Purpose Background
Gauteng Anti-Corruption Strategic Framework (GACSF)
GACSF
Strategic Objectives
Governance Structure
Action plans, and
Achievements

27. Purpose
Present to Parliament’s Select Committee on Finance the Gauteng Department of Finance’s (GDF) plans and systems employed to reduce fraud and corruption in all Gauteng Provincial Departments (GPG).

28. Background
Tackled the prevalence of fraud and corruption in the Gauteng Provincial Government
Revised the Gauteng Anti-Corruption Strategy which is led by the Office of the Premier, and duly supported by the Forensic Services Unit which is located in the GDF
The Forensic Services Unit provides central fraud prevention and investigations of actual cases within GPG departments

29. Gauteng Anti-Corruption Strategic Framework
The Gauteng Anti-Corruption Strategic Framework (GACSF) was revised in 2009 and approved by EXCO in 2010
It was then launched at the 2010 Gauteng Anti-Corruption Summit
The summit passed numerous Anti-Corruption resolutions which were signed by the Provincial Government, Organised Business and Civil Society Representatives

30. Strategic Objectives
The revised GPG’s Anti-Corruption Strategy consists of eight (8) strategic objectives. Each objective has its own key performance indicator, activities, outputs, responsible department and timeframes. These objectives are:
Report corruption, effective follow up and impose maximum
penalties
Promote ethical procurement
Build a social compact against corruption
Campaign against corruption and build an ethical public service
Develop and implement sectoral anti-corruption strategies
Fight nepotism
Promote an ethical public service
Manage conflict of interest

31. Governance Structure
A Provincial Anti-Corruption Coordinating Committee (PACCC) is the governing structure, to whom all GPG departments report
The PACCC in turn reports to the Provincial Anti-Corruption Forum (PACF) which consists of Organised Business, Civil Society Representatives, and GPG Executive Members

32. Action Plans Minimum Anti-Corruption Capacity (MACC) audit
MACC Training and Ethics certification
Restriction on supplier database
Publication of sanctions upon conviction
Departmental fraud risk profile drawn – mitigating tasks and responsibilities assigned
Fraud prevention plans developed and maintained for each department. These plans are informed by fraud risk profiles of event risk event

33. Accomplishments
An Anti-fraud awareness DVD was produced which provided clear fraud reporting guidelines, and details of the National Anti-Corruption Hotline
On-line fraud quiz to GPG officials which provides feedback to respondents on their level of fraud risk awareness
Visible Anti-Corruption poster campaign launched in all GPG buildings
Risk management units established in all departments to increase awareness of fraud risk, and to report same accordingly

34. Accomplishments Heightened fraud risk awareness achieved
Reduced year on year fraud risk incidents reported
Losses attributed to fraud reduced

35. Thank You
Thank you