1. THE STANDING COMMITTEE ON APPROPRIATIONS FINANCIAL PERFORMANCE
PRESENTATION TO
THE STANDING COMMITTEE ON APPROPRIATIONS
FINANCIAL PERFORMANCE
AS AT 30 JUNE 2009
20 October 2009

2. STRATEGIC OBJECTIVES
Promoting the coordinated implementation of government’s economic vision and priorities;
Promoting direct investment and growth in the industrial and services economy, with particular focus on employment creation;
Raising the level of exports and promoting equitable global trade;
Promoting broader participation, equity and redress in the economy; and
Contributing to Africa's development and regional integration within the NEPAD framework

3. Five year comparison of budget vs expenditure

4. ANALYSIS OF THE 2009/10 BUDGET
ECONOMIC CLASSIFICATION
ANNUAL BUDGET
PERCENTAGE
Compensation of Employees
470,481
7,4%
Goods & Services
548,282
8,6%
Capital Assets
35,470
0,6%
Transfer Payments made up of:
5,289,959
83,4%
Transfers including Agencies
1,448,980
22,8%
Incentive Payments
3,840,979
60,6%
Total variance
6,344,192
100%

5. YEAR-ON-YEAR COMPARISON 2008/09 vs 2009/10

6. OVERVIEW OF EXPENDITURE AS AT 30 JUNE 2009
The YTD expenditure of R1,446b represented 23% of the total allocated budget of R6,344 billion
The YTD expenditure represented 90% of the YTD actual drawings of R1,606b from National Treasury (NT)
The YTD expenditure represented 83% of the YTD projections of R1,733b that were made at the commencement of the financial year
It is a requirement of the NT to provide a projected cash flow for the year at the commencement of each financial year. The department assesses its cash flow requirements on a monthly basis and advises the NT of its requirement for the following month. Hence, the difference between [2] & [3] above

7. OVERVIEW OF EXPENDITURE AS AT 30 JUNE 2009
1. The YTD variances of Expenditure against actual drawings were:-
ECONOMIC CLASSIFICATION
ANNUAL BUDGET
YTD BUDGET
YTD EXPENSES
VARIANCE
Compensation of Employees
470,481
95,690
89,557
6,133
Goods & Services
548,282
98,531
82,517
16,014
Capital Assets
35,470
2,985
1,114
1,871
Transfer Payments (inclusive of Incentives)
5,289,959
1,409,391
1,273,256
136,135
Total variance
6,344,192
1,606,597
1,446,445
160,152
2. The YTD variances of Expenditure against annual projections were:-
ECONOMIC CLASSIFICATION
ANNUAL BUDGET
YTD BUDGET
YTD EXPENSES
VARIANCE
Compensation of Employees
470,481
95,891
89,557
6,334
Goods & Services
548,282
122,866
82,517
40,349
Capital Assets
35,470
20,674
1,114
19,560
Transfer Payments (inclusive of Incentives)
5,289,959
1,493,079
1,273,256
219,823
Total Variance
6,344,192
1,732,510
1,446,445
286,065

8. REASONS FOR UNDER-EXPENDITURE
The following are some of the reasons for the under-expenditure:
Compensation of Employees:
Vacancies of 18,5% but reduced from 25% in 01 April 2008
Implementation of the notch increases and performance bonuses
Goods & Services:
Implementation of cost saving measures in areas such as travel & subsistence, catering, venue & facilities, advertising
Outstanding invoices from some of the service providers for research projects. NLA liquor inspections, etc.
Some of the projects also commenced later than planned
Capital Assets
The requirement had substantially reduced and the funds redirected during the adjustments estimate process to priority areas

9. REASONS FOR UNDER-EXPENDITURE
Transfers & Subsidies:
Total R180m was not transferred to IDZ’s and agencies due to compliance issues not being finalised ie. the relevant MOU’s, approval of business plans, etc.
A total of R38m was unspent with respect to Incentives as fewer claims were received that expected for BPO&O, Film Incentive, Coooperatives and other Critical Infrastructure
It should be noted that the spending trend had improved substantially to the extend that as at the end of the second quarter the status was as follows:
The under spending based on actual drawings from the NT was only 2,7%
The under spending based on annual projections was 6,8%

10. KEY ITEMS FOR EXPENDITURE MONITORING

11. Actual = funds requested & received from NT
EXPENDITURE PER ECONOMIC CLASSIFICATION [ACTUAL DRAWINGS VS EXPENDITURE]
R’000
Revised Budget 2009/10
YTD
Drawings
Expenditure
Variance
% Variance
Available Budget %
Available
Compensation of Employees
470,481
95,690
89,557
6,133
6.41%
380,924
80.96%
Goods & Services
548,282
98,531
82,517
16,014
2.92%
465,765
84.95%
Capital Assets
35,470
2,985
1,114
1,871
62.67%
34,356
96.86%
Transfer payments
5,289,959
1,409,391
1,273,256
136,135
9.66%
4,016,703
75.93%
TOTAL
6,344,192
1,606,597
1,446,445
160,152
9.97%
4,897,747
77.20%
Actual = funds requested & received from NT

12. EXPENDITURE PER PROGRAMME [ACTUAL DRAWINGS VS EXPENDITURE
Revised Budget 2009/10
YTD
Drawings
Expenditure
Variance
% Variance
Available Budget %
Available
Administration
416,485
85,767
82,172
3,595
4.19%
334,313
80.27%
ITED
173,541
37,238
29,341
7,897
21.21%
144,200
83.09%
EEDD
1,308,854
331,777
316,222
15,555
4.69%
992,632
75.84%
IDD
415,849
141,697
103,896
37,801
26.68%
311,953
75.02%
CCRD
238,595
62,772
60,202
2,570
4.09%
178,393
74.77%
TEO
3,442,093
875,569
787,129
88,440
10.10%
2,654,964
77.13%
TISA
283,051
60,823
58,879
944
1.55%
223,172
78.85%
Marketing
65,724
10,954
7,605
3,349
30.58%
58,119
88.43%
TOTAL
6,344,192
1,606,597
1,446,445
160,152
9.97%
4,897,747
77.20%
Actual = funds requested & received from NT

13. YTD projections = forecasts made by Divisions in Feb 09
EXPENDITURE PER ECONOMIC CLASSIFICATION [YTD PROJECTIONS VS EXPENDITURE
R’000
Revised budget 2009/10
YTD Projections
YTD
EXPENSES
Variance %
variance
Available Budget
available
Compensation of Employees
470,481
95,891
89,557
6,334
6.61%
380,924
80.96%
Goods & Services
548,282
122,866
82,517
40,349
32.84%
465,765
84.95%
Capital Assets
35,470
20,674
1,114
19,560
94.61%
34,356
96.86%
Transfer payments
5,289,959
1,493,079
1,273,256
219,823
14.72%
4,016,703
75.93%
TOTAL
6,344,192
1,732,510
1,446,445
286,065
16.51%
4,897,747
77.20%
YTD projections = forecasts made by Divisions in Feb 09

14. EXPENDITURE PER PROGRAMME [YTD PROJECTIONS VS EXPENDITURE
Revised budget 2009/10
YTD Projections
YTD
EXPENSES
Variance %
variance
Available Budget
available
Administration
416,485
90,274
82,172
8,102
8.97%
334,313
80.27%
ITED
173,541
40,696
29,341
11,355
27.90%
144,200
83.09%
EEDD
1,308,854
336,867
316,222
20,645
6.13%
992,632
75.84%
IDD
415,849
174,300
103,896
70,404
40.39%
311,953
75.02%
CCRD
238,595
113,584
60,202
53,382
47.00%
178,393
74.77%
TEO
3,442,093
894,123
787,129
106,994
11.97%
2,654,964
77.13%
TISA
283,051
61,689
59,879
1,810
2.93%
223,172
78.85%
Marketing
65,724
20,977
7,605
13,372
63.75%
58,119
88.43%
TOTAL
6,344,192
1,732,510
1,446,445
286,065
16.51%
4,897,747
77.20%
YTD projections = forecasts made by Divisions in Feb 09

15. THANK YOU