1. Projected provincial Budget Outcome of Conditional Grants as at 30 September 2006
Select Committee on Finance
Presentation by
Free State Provincial Treasury

2. OBJECTIVES
To brief the Select Committee on Finance on the actual and projected Conditional Grant outcomes as at 30 September 2006
Aggregate projected expenditure
Trends in allocations and projected expenditure of conditional grants

3. 2006/2007 Budget Breakdown of budget
Equitable Share R9,544 billion (82.1%)
Conditional Grants R1,687 billion (14.5%)
Own revenue R million ( 3.4%)
Total Provincial Budget R11,626 billion

4. SECOND QUARTER PROVINCIAL EXPENDITURE ANALYSIS
Actual second quarter expenditure = R5,484 billion (47.2%)
Total projected spending R11,994 billion (103.2%) against budget of R11,626 billion
Net projected over expenditure amounts to R367 million (3.2%) compared to R87 million (0.7%) after first quarter
Over expenditure by 9 departments = R415 million (3.6%)
Under expenditure by 3 departments = R48 million (0.4%)

5. SECOND QUARTER PROVINCIAL EXPENDITURE ANALYSIS (continue)
Departments projecting to overspend
Premier = R1 million (0.9%)
Legislature = R12 million (16%)
Tourism = R12 million (5.2%)
Health = R167 million (5.1%)
Education = R (0%)
Public Works, etc. = R216 million (20.2%)
Safety = R1 million (2.5%)
Agriculture = R4 million (1.7%)
Sport = R3 million (2.4%)

6. PROJECTED AGGREGATE EXPENDITURE AS AT 30 SEPT 06
DEPARTMENT
Exp until 30/9/06
Proj (Oct 06 – Mch 07)
2006/07
Total Proj exp
2006/07 Budget
Projected (Over)/Under exp
R’m %
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
Premier 46
50.4 47
50.5 93
100.9 92
-0.9
Provincial Legislature 38
50.6 48
65.4 86
116.0 74
(12)
-16.0
Tourism
40.0
150
65.3
242
105.2
230
-5.2
Provincial Treasury 45
37.7 68
56.9
113
94.7
120 7
5.3
Health
1,628
50.1
1,788
55.0
3,416
105.1
3,250
(166)
-5.1
Education
2,544
48.3
2,728
51.7
5,272
100.0
Social Development
169
40.5
210
50.3
379
90.8
418 39
9.2
Local Gov & Housing
274
38.2
441
61.4
715
99.6
718 3
0.4
Works, Roads & Transport
462
43.3
821
76.9
1,283
120.2
1,066
(217)
-20.2
Safety, Security & Liaison 13
41.3 19
61.2 32
102.5
-2.5
Agriculture
107
47.9
53.8
227
101.7
223
-1.7
Sport 66
49.8 69
52.5
135
102.4
131
-2.4
TOTAL
5,484
47.2
6,509
56.0
11,993
103.2
11,626
(367)
-3.2

7. AGGREGATE EXPENDITURE ON CONDITIONAL GRANTS AS AT 30 Sept 2006
Second quarter expenditure on Conditional Grants amounts to R796 million which equals:
47.2% of the Conditional Grant budget of R1,687 billion;
99.2% of received/transferred C-grant funds amounting to R802 million;
14.5% of total provincial second quarter expenditure of R5,484 billion.
Departments project to spend the total 2006/07 Conditional Grant allocation

8. Expenditure on C-grants as at 30 Sept 2006
Department
Budget
Expenditure
Projections
Proj Exp
Proj Under exp
R’m %
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Agriculture 28 9
31.3 19
68.7
Education
103 69
66.9 34
33.1
Health
780
385
49.4
395
50.6
Housing
523
217
41.5
306
58.5
Sport and Recreation SA 10 3
25.8 7
74.2
PIG
243
113
46.5
130
53.5
SUB-TOTAL
1,687
796
47.2
891
52.8
OIG
409
211
51.5
198
48.5
TOTAL
2,096
1,006
48.0
1,089
52.0

9. Conditional-grants by Grant Type as at 30 Sept 2006
Conditional Grant
Original budget
Exp
Proj
Projected Expenditure
Projected Under Exp
Exp as % of bud
Proj as % of budget
R'm %
Agriculture 
28,421
8,886
19,535
31.3
68.7
Comprehensive Agricultural Support Programme
25,306
8,050
17,256
31.8
68.2
LandCare Programme: Poverty Relief & Infrastr Dev
3,115
836
2,279
26.8
73.2
Local Gov & Housing 
522,601
217,187
305,414
41.6
58.4
Integrated Housing Subsidy Grant
216,780
305,821
41.5
58.5
Education
162,476
123,321
39,155
75.9
24.1
Provincial Infrastructure Grant
59,268
54,283
4,985
91.6
8.4
Further Education and Training College Sector Recapitalization
30,000
100.0
0.0
HIV and Aids (Life Skills Education) Grant
8,424
4,812
3,612
57.1
42.9
Primary School Nutrition Programme Grant
64,784
34,226
30,558
52.8
47.2

10. Conditional-grants by Grant Type as at 30 Sept 2006
Conditional Grant
Original budget
Exp
Proj
Projected Expenditure
Projected Under Exp
Exp as % of bud
Proj as % of budget
R'm %
Health
779,992
385,062
616,485
49.4
50.6
Health Professions Training and Development Grant
92,517
57,535
34,982
62.2
37.8
Comprehensive HIV and Aids Grant
142,265
48,604
93,661
34.2
65.8
Hospital Revitalisation Grant
45,673
21,612
24,061
47.3
52.7
National Tertiary Services Grant
458,043
246,102
211,941
53.7
46.3
Forensic Pathology Services
41,494
11,209
30,285
27.0
73.0
Sport, Arts, Culture, Science and Technology 
9,780
2,520
7,260
25.8
74.2
Mass Sport and Recreation Participation Programme
Public Works, Roads & Transport 
183,410
58,702
124,708
32.0
68.0
Provincial Infrastructure Grant
Total IYM Conditional Grants
1,686,680
795,271
891,409
47.2
52.8

11. Detail on Conditional Grants per department: Agriculture
Agriculture spent 31.3% or R8,9 million of their total Conditional Grant allocation of R28 million and project to spend the remainder of the allocation of both grants.
Budget Outcome per grant
CASP:
Budget = R25 million
Second quarter expenditure = R8 million (31.8%)
LandCare Grant:
Budget = R3 million
Second quarter expenditure = R0,8 million (26.8%)

12. Detail on Conditional Grants per department: Local Government and Housing
Local Gov and Housing spent 41.5% or R216,8 million of the Housing fund allocation of R522,6 million during the first two quarters and project to spend the remaining R305,8 million by the end of the financial year.

13. Detail on Conditional Grants per department: Education
First two quarters’ expenditure by Education (including PIG) amounts to R123 million or 75.9% of their total Conditional Grants allocation of R162 million and they project to spend the remainder by the 31st of March 2007.
Budget Outcome per grant
Further Education and Training College Sector Recapitalization Grant:
Allocation = R30 million
Second quarter expenditure = R30 million (100%)

14. Detail on Conditional Grants per department: Education (continue)
Budget Outcome per grant (continue)
HIV and Aids Grant:
Allocation = R8,4 million
Second quarter expenditure = R4,8 million (57.1%)
National School Nutrition Programme Grant:
Allocation = R64,8 million
Second quarter expenditure = R34, 2 million (52.8%)
Provincial Infrastructure Grant:
Allocation = R59 million
Second quarter expenditure = R54 million (91.6%)

15. Detail on Conditional Grants per department: Health
Health spent 49.4% or R385 million of their Conditional Grant allocation of R780 million and they project to spend the total budget by the end of the financial year.
Budget Outcome per grant
HIV and Aids Grant:
Allocation = R142 million
Second quarter expenditure = R48,6 million (34.2%)
Forensic Pathology Services Grant
Allocation = R41 million
Second quarter expenditure = R11,2 million (27%)

16. Detail on Conditional Grants per department: Health (continue)
Budget Outcome per grant (continue)
Health Professions Training and Development Grant:
Allocation = R92,5 million
Second quarter expenditure = R57,5 million (62.2%)
Hospital Revitalisation Grant:
Allocation = R45,7 million
Second quarter expenditure = R21,6 million (47.3%)
National Tertiary Services Grant:
Allocation = R458 million
Second quarter expenditure = R246 million (53.7%)

17. Detail on Conditional Grants per department: Sport, Arts, Culture
Sport, Arts, Culture spent 25.8% or R2,5 million of their 2006/07 allocation of R9,78 million for the Mass Sport and Recreation Participation Programme grant during the first two quarters and project to spend the remainder before the end of the financial year.

18. Detail on Conditional Grants per department: Public Works, Roads and Transport
Public Works, Roads and Transport spent 32% or R58,7 million of their Provincial Infrastructure Grant allocation amounting to R183 million after two quarters and they project to spend the total budget by the end of the financial year.

19. National Treasury (Provincial Infrastructure grant)
Second quarter expenditure of the Provincial Infrastructure grant (included in discussions per department) amounts to R113 million or 46.6% of the allocation of R242,7 million from National Treasury and projections indicate that the total allocation will be spent by the end of the financial year.
Two departments benefit from this grant:
Public Works, Roads and Transport
Allocation = R183,4 million (75.6%)
Second quarter expenditure = R58,7 million (32%)
Education
Allocation = R59,3 million (24.4%)
Second quarter expenditure = R54,3 million (91.6%)

20. Projected aggregate CAPITAL expenditure as at 30 Sept 06
DEPARTMENTS
Capital Transfers
Capital Assets
Total Capital
(Over)/Under Exp
Bud
R’m
Exp
Exp as % of Bud
% of Bud
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
Education*
156 70 60 14
186 81
43.3
Health
163 88
54.2
(90)
-55.0
Soc Development 12 4
58.0 1
6.9
Tourism 19
19.0
(20)
-104.7
Housing
544
221 8
552
222
40.1
0.1
Public Works
281
123
43.9
(191)
-68.1
Agriculture 24 11
44.2
-13.5
Sport 26 15
56.9
Total
700
291
593
260
1,293
551
42.6
(303)
-24.1
The budget of Education iro Capital transfers includes
R117 million transferred to Public Works of which R67 million was spent
R30 million to FET colleges of which R2,7 million was spent
About R9 million to schools – no feedback on amounts spent
Column 3 only reflects the amount spent (R70 m) and not transferred (R147 m).

21. Areas for Intervention
Address deficiencies in capacity in different Departments
Identify gaps in infrastructure plans & improve prioritization for 2007/08 MTEF
Address deficiencies in information and analysis that supports planning
Consider options to improve delivery this year and preparation for next year
Identify and implement in-year interventions to ensure that:
06/07 budgets are spent
Capacity to deliver of infrastructure is consistently improved 21

22. Areas for Intervention
Quarterly Infrastructure Review Meetings now under-way
Provincial Treasury engage with respective departments on a monthly basis 22

23. THANK YOU