1. PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE
Parliament 2nd September 2008

2. Contents 2008/09 Conditional Grants Allocation
First quarter Conditional grants spending
National School Nutrition Programme
HIV and Aids
Infrastructure Allocation to Provinces
Early Childhood Development
Conclusion

3. Overall Departmental expenditure at 30 June 2008

4. Trends in Education Conditional Grants
Actual spending on FET Recapitalistion Grant for 1st quarter by Colleges is R5,672 million representing 21,73% spending against the allocation

5. Trends in Education Conditional Grants
The department recorded a good performance in term of conditional grants spending from the past financial years
In 2006/07 spending for all grants was 100 per cent
The reduction in the allocation of National School Nutrition programme in 2007/08 created a pressure
The grant was exhausted and commitments amounting to R19 million could not be paid

6. The 2008/09 Budget Allocation

7. 2008/09 First Quarter Performance

8. HIV and AIDS Grant
The main objective for this grant is to Educate learners on Life Skill and HIV and AIDS and Care and Support to those infected and affected by HIV and AIDS
The grant recorded a slow expenditure of 13 per cent in the first quarter
Expenditure is expected to increase in the second and the third quarters
The allocation for this grant will be exhausted at the end of the financial year

9. National School Nutrition Grant
The grant recorded per cent for the first quarter
The high expenditure was mainly as a result of payment of previous year commitments
It is projected that the grant will over spend by R23 million in the current financial year
Other challenges
Insufficient administration budget for operational resources e.g. vehicles, computers.
Insufficient personnel for monitoring and administration at District and Provincial Offices.

10. Infrastructure Allocation to Provinces
The first quarter expenditure not far from the 25 per cent norm (22.19 per cent)
Slow expenditure as a result of delays in the awarding of the contract for construction of 15 schools
The process finalized and contractors are on site
Expenditure expected to increase in the 2nd quarter

11. Challenges for Infrastructure
Anticipated over-expenditure on allocations for existing projects (other than 15 schools) due to
bids closing above estimates
Escalation costs
Cost increases due to non-performance of original contractors
Therefore have limited funds available to commence new projects.

12. Capital Expenditure Item Budget Expenditure Available budget % spent
Building & other fixed structures.
61 057
15.59
Machinery & Equipment.
51 900
3 479
48 421
6.70
Total.
64 536
14.55

13. Reasons for slow spending
Bulk of the budget for machinery is for Computers for schools (R36 million)
The department constituted a task team to investigate alternatives to the SITA procurement processes
Only during the week of 18 August 2008, the decision was taken to follow the SITA route. 
It is expected that orders will be placed by end November 2008

14. ECD BUDGET 2008/2009 Allocation Amount (R’000)
Grade R SUBSIDY & RESOURCE BUDGET
R 50,092
TEACHERS PAID ON PERSAL
R 13,166
TOTAL
R 63,258
PLANNED EXPENDITURE FOR 2008/2009 (Grade R classes already selected and receiving subsidy)
R 59, 017
BALANCE TO IDENTIFY NEW SCHOOLS
R 4,241
Additional Schools (in process of identification)
Between 250 & 300

15. PERFORMANCE OF GRADE R FUNDING (excluding salaries paid via Persal)
FINANCIAL YEAR
BUDGET R'000
EXPENDITURE R'000
% SPENT
2002/2003
4,638
3,608
77.79%
2003/2004
12,091
11,307
93.52%
2004/2005
29,949
28,270
94.39%
2005/2006
31,557
31,072
98.46%
2006/2007
33,829
33,827
99.99%
2007/2008
39,576
38,184
96.48%
2008/2009
50,092
24,358
48.63%

16. CURRENTLY FUNDED INSTITUITIONS
Number of schools/sites according to poverty ranking
Number of Schools %
Number of classes
Quintile 1
232
28.57%
428
35.79%
Quintile 2 90
11.08%
174
14.55%
Quintile 3 80
9.85%
139
11.62%
Quintile 4 42
5.17% 81
6.77%
Quintile 5 13
1.60% 19
1.59%
Independent Schools
355
43.72%
29.68%
TOTAL
812
100.00%
1196

17. PAYMENTS SUBSIDY FOR TEACHERS’ SALARIES
The subsidy allocation for salaries are made as follows:
R (unqualified teachers)
Teachers below the relevant NQF level 4 qualification
R (under-qualified teachers)
Teachers with the minimum relevant NQF Level 4 qualification (National Certificate in Early Childhood Development) but not fully qualified
R (qualified teachers)
Teachers with the appropriate 3-year teacher’s qualification (relevant to ECD)

18. PAYMENTS-CONTROL MEASURES
Transfers are only made if all the relevant forms have been submitted in time and are correct.
The following forms need to be completed and attached before the next transfer is made to the institution:
Claim form / Certificate of Compliance

19. PAYMENTS-CONTROL MEASURES
Financial Statement – Grade R Subsidy indicating expenditure for the previous funds received: Attached with:
Monthly signatures of teacher receiving a salary at the back of the Financial Statement
Original or certified copies of all invoices of resources procured with FSDoE funds for the implementation of Grade R
An original or certified copy of the bank statement indicating the amount for previous funds received for the Grade R subsidy

20. Pre-Grade R. The pre-Grade R allocation for 2008/09 is R6.9 million
The department planned to train 200 Pre-Grade R practitioners towards NQF Level 5 during this current financial year.
The preparation towards advising the bid for training is underway.

21. Pre-Grade R achievements
2007/ practitioners from 100 community-based sites were trained towards NQF Level 4 and 96% were successful (Flemish Project)
Developed Pre-Grade R Curriculum through the assistance of the Flemish Project

22. Monitoring Capacity
Monthly Finance Committee meetings are held to discuss underspending and remedial actions
Quarterly review sessions are held to provide feedback on service delivery and the budget.
Monthly expenditure reports are sent for the attention and the comment of the HOD and the Executive authority.
Each branch is allocated a management accountant to assist with all financial related queries including budget management
Letters are written to managers who underspent to inform them of the status quo and the implications of their underspending.
Where underspending persist affected manager are brought before the executive leadership and the MEC to account for their actions.
Where managers are not able to spent despite all the interventions funds are diverted and spent in line with objectives of the department. 22

23. Monitoring Capacity Continued
National School Nutrition Programme grant
Lack of human resource capacity is experienced under this project
Regular progress reports, monthly/quarterly
HIV and AIDS grant
Monitoring is effective with a full-time Provincial co-ordinator ensuring that the activities take place strictly to the approved business plan and assisted by District Directors
Infrastructure Allocation to Provinces
Monitoring is effective between the Department and the Department of Public Works, Roads and Transport through monthly meetings held between the two departments
Further Education and Training grant
Actual spending by College is monitored on a monthly basis by officials at Head Office.
Reasons for under / over spending must be submitted on a monthly basis by the respective Colleges

24. CHALLENGES
Most of the schools in the lower quintiles that still have to be identified for Grade R Funding are farm schools with a Grade R or Grade 1(to be used as benchmark) enrolment of less than 10 learners
Additional classrooms need to be built for some schools to enable them to offer Grade R. ECD section busy with audit to determine the exact need.
HR Implications
Growing Grade R also requires that additional officials be appointed at District level for monitoring and support

25. Conclusion
Generally spending on conditional grants was low in the first quarter
Department project over expenditure on National School Nutrition Programme
Expenditure on Infrastructure Allocation to increase as construction of 15 schools started

26. Thank you!!