1. Provincial Treasury Western Cape
NCOP Select Committee on Finance Public Hearings
Conditional Grant and CAPEX
12 February 2007

2. Outline
Conditional grant, infrastructure and capital expenditure 2005/06;
2006/07 third quarter expenditure;
Service delivery information;
Business plan 2006/07 and 2007/08 process; and
Monitoring provincial expenditure.

3. Conditional Grant, Infrastructure and Capital Expenditure 2005/06

4. 3rd quarter expenditure 4th quarter expenditure
CG Expenditure 2005/06
Adjusted budget
3rd quarter expenditure
4th quarter expenditure
R'000 %
Agriculture
Disaster management
18 000
4 500
25.0%
16 435
91.3%
Comprehensive Agricultural Support Programme Grant
19 264
8 513
44.2%
19 385
100.6%
Land Care Programme Grant: Poverty Relief and Infrastructure Development
3 174
2 194
69.1%
3 275
103.2%
Education
National School Nutrition Programme Grant
49 321
26 840
54.4%
49 318
100.0%
HIV and Aids (Life Skills Education) Grant
11 205
7 709
68.8%
11 443
102.1%
Health
National Tertiary Services Grant
75.0%
Health Professions Training and Development Grant
Hospital Revitalisation Grant
74 227
50.1%
99 357
67.1%
Comprehensive HIV and Aids Grant
82 451
66 815
81.0%
92 649
112.4%
Hospital Management and Quality Improvement Grant
17 608
7 997
45.4%
17 937
101.9%
Forensic Pathology Services
14 583 -
4 392
30.1%
Integrated Nutrition Programme Grant
5 288
2 723
51.5%
5 078
96.0%
Conditional Grant Expenditure – 2005/06 3rd and 4th quarter

5. 3rd quarter expenditure 4th quarter expenditure
CG Expenditure 2005/06 (2)
Adjusted budget
3rd quarter expenditure
4th quarter expenditure
R'000 %
Housing
Integrated Housing and Human Settlement Development Grant
68.1%
100.0%
Human Settlement and Redevelopment Grant
29 738
12 904
43.4%
18 601
62.5%
Disaster relief
24 500 -
17 911
73.1%
Social Services and Poverty Alleviation
Social Assistance Transfers Grant
75.2%
98.5%
Social Assistance Administration Grant
56.7%
100.2%
Integrated Social Development Services Grant
20 034
197
1.0%
HIV and Aids (Community-Based Care) Grant
6 089
5 197
85.4%
National Treasury
Provincial Infrastructure Grant
67.6%
91 476
35.2%
Cultural Affairs and Sport
Mass Sport and Recreation Participation Programme Grant
2 670
2 003
75.0%
2 667
99.9%
72.0%
95.8%
Although expenditure was below notional benchmark of 75 per cent for some conditional grants at the end of the 3rd quarter of 2005/06, by the end of the financial year all grants had performed well.

6. Capital and Infrastructure Expenditure 2005/06
2005/06 - Infrastructure and capital expenditure
Adjusted
4th quarter expenditure
R000's
budget
R'000 %
Education
97.0%
Health
82.1%
Agriculture
48 194
51 545
107.0%
Transport and Public Works
99.4%
Total
96.7%
available
Payments for capital assets
102.4%
Infrastructure and capital expenditure was at an acceptable
level at the end of the 2005/06 financial year

7. 2006/07 3rd Quarter Expenditure

8. CG Expenditure – Local Government and Housing
Local Government and Housing – Conditional Grant Expenditure as at 31 December 2006
Adjusted budget
Transfers received
Spent by Province
spent as % of DORA
Spent as % transfers received
Integrated Housing and Human Settlement Development
62.2%
92.3%
The Department has spent 102% of original budget of R598,8 million.
- R372 million was received in the adjusted budget specifically for the N2 Gateway Project and it is envisaged that more than half of this allocation will be spent by 31 March The balance will be rolled over and spent in the 2007/08 financial year.

9. CG Expenditure - Agriculture
Agriculture – Conditional Grant Expenditure as at 31 December 2006
Adjusted budget
Transfers received
Spent by Province
spent as % of DORA
Spent as % transfers received
Land Care Programme
3 730
2 492
1 862
49.9%
74.7%
Comprehensive Agricultural support Programme
20 648
16 519
10 150
49.2%
61.4%
Provincial Infrastructure Grant
3 000
4 806
160.2%
Agriculture Disaster Management Grant
33 000 -
Total
60 378
22 011
24 380
40.4%
110.8%

10. CG Expenditure – Agriculture (2)
Challenges to Overcome
Land Care Programme
Expenditure is season dependent as invasive plants grow in summer and the eradication thereof can only take place once crops have been harvested
Comprehensive Agriculture Support Programme
Difficult to get community agreement on project plans
Delay in tender process
Some projects are still in the planning phase
Agriculture Disaster Management Grant
Implementation plans are in the process of being finalised with the National Department of Agriculture. Spending will commence in 2007/08.

11. CG Expenditure - Education
Education – Conditional Grant Expenditure as at 31 December 2006
Adjusted budget
Transfers received
Spent by Province
spent as % of DORA
Spent as % transfers received
FET College Sector Recapitalisation
70 000
100.0%
HIV and Aids (Life Skills Education)
11 870
8 903
8 910
75.1%
100.1%
National School Nutrition Programme
48 313
36 235
34 330
71.1%
94.7%
Provincial Infrastructure Grant
78 871
54 554
43.0%
69.2%
Total
65.3%
86.5%

12. CG Expenditure – Education (2)
Challenges to Overcome
Provincial Infrastructure Grant
A number of projects are in the tender and awarding phase
Seasonality of the Western Cape impacts infrastructure expenditure
Department projects to spend entire budget by the end of the financial year

13. CG Expenditure - Health
Health – Conditional Grant Expenditure as at 31 December 2006
Adjusted budget
Transfers received
Spent by Province
spent as % of DORA
Spent as % transfers received
National Tertiary Services
75.2%
100.3%
Health Professions Training and Development
75.0%
100.0%
Comprehensive HIV and Aids
91 126
94 127
70.7%
103.3%
Forensic Pathology Services
77 405
51 454
20 383
26.3%
39.6%
Hospital Revitalisation
83.9%
111.8%
Provincial Infrastructure Grant
61 829
45 661
40 512
65.5%
88.7%
Total
73.4%
98.9%

14. CG Expenditure – Health (2)
Forensic Pathology Services
Constraints in the appointing of staff for the Forensic Pathology Services Unit, there are currently 87 vacant posts in the programme.
R26,8 million has been budgeted for the construction of six new Forensic Pathology Laboratories, the majority of these projects are still in the planning phase.
Provincial Infrastructure Grant
Due to changes in the priority list, some projects have been put on hold in 2006/07
Experienced professionals are leaving the department
The Department projects to spend the entire budget by the end of the financial year (overspend by R4 million).

15. CG Expenditure – Transport and Public Works
Transport and Public Works – Conditional Grant Expenditure as at 31 December 2006
Adjusted budget
Transfers received
Spent by Province
spent as % of DORA
Spent as % transfers received
Provincial Infrastructure Grant
59.8%
93.9%
Challenges to overcome
Slow spending is as a result of additional allocations
received by the Department in the adjustments estimate.
Department projects to spend full budget by the end of
the financial year.

16. CG Expenditure – Cultural Affairs and Sport
Cultural Affairs and Sport – Conditional Grant Expenditure as at 31 December 2006
Adjusted budget
Transfers received
Spent by Province
spent as % of DORA
Spent as % transfers received
Mass sport and Recreation Participation Programme
12 100
9 782
6 721
55.5%
68.7%
Challenges to overcome
Mass Sport and Recreation Participation Programme
School Mass Participation Programme is in its first year of implementation. The Department did not have a dedicated unit to roll out clusters which resulted in delays.
The 2nd and 3rd quarters saw a significant improvement in spending, with spending expected to accelerate in the final quarter.

17. Infrastructure and Capital Expenditure
Infrastructure and capital expenditure as at 31 December 2006
Adjusted
Third Quarter Expenditure
R000's
budget
R'000 %
Education
51.6%
Health
66.6%
Agriculture
50 229
23 703
47.2%
Transport and Public Works
65.1%
Total
62.7%
available
Payments for capital assets
79.4%
*Infrastructure expenditure includes maintenance which is recorded as current
expenditure in SCOA

18. Infrastructure and Capital Expenditure
Challenges to Overcome
Bottlenecks in the procurement process, IDIP aims identify these bottlenecks and identify means to overcome them;
Inefficiencies in the link between planning; budgeting and implementation; and
Skills shortage.
Measures instituted
Promotion of earlier planning cycle (IDIP).

19. Service Delivery Information

20. Conditional Grants Service delivery information as at 31 December 2006
Target
Quarter 3
Percentage
Integrated Housing and Human Settlement Development Programme
Houses
16 000
12 060
75%
Serviced houses
18 000
15 476
86%
Comprehensive HIV and Aids Grant
ART service points registered 50 49
98%
ART patients registered
20 666
23 452
113%
National School Nutrition Programme
Number of learner days covered by the nutrition programme

21. Infrastructure Projects
Transport and Public Works - Service delivery information as at 31 December 2006
Total
Identification
Feasibility study
Design
Tender
Construction
Retention
Handover
Public works
Own revenue 86 8 4 15 11 33 12 3
PIG 6 1
Other 13
Roads infrastructure 26 7 9 2 41

22. Infrastructure Projects
Service delivery information as at 31 December 2006
Total projects
Construction phase
Completion / retention phase
Completion / Handover phase
% Completion
12%
25%
50%
75%
100%
Agriculture
PIG 4 2 1
Equitable share 34 9 16 7
CASP 55 13 12 20 10
Land care 14 6 5
Health
Own revenue 17 24
HRP
Education 3

23. Conditional Grant Business Plans 2006/07 Financial Year

24. CG Business Plans Business plans 2006/07 Business plans 2007/08
All business plans for 2006/07 have been approved
Business plans 2007/08
Department of Agriculture
Land Care Grant
Business plan submitted, verbal approval received, awaiting written approval.
Comprehensive Agriculture Support Programme

25. CG Business Plans 2007/08 Department of Education
HIV and Aids (Life Skills Education) Grant
Business plan submitted incorporating feedback received from National Department on the first draft
National School Nutrition Programme Grant
Business plan submitted, feedback received from national department.
Further Education and Training
First draft submitted timeously, feedback received from National Department, second draft submitted incorporating feedback.

26. CG Business Plans 2007/08 Department of Health
Comprehensive HIV and Aids Grant
Business plan submitted, awaiting feedback from the national Department of Health
Forensic Pathology Services Grant
Business plan completed in consultation with national Department of Health and submitted 23 October 2006
Signed copy submitted 17 November 2006
National Tertiary Services Grant
Awaiting Service Level Agreement from National Department of Health
Health Professions Training and Development Grant
Business plan format in process of finalisation by Department of Health

27. CG Business Plans 2007/08 Department of Local Government and Housing
Integrated Housing and Human Settlement Development Grant
Business plan submitted, awaiting feedback from national department
Department of Cultural Affairs and Sport
Mass Sport and Recreation Participation Programme Grant
Business plan submitted, awaiting feedback from national department.
National Treasury
Provincial Infrastructure Grant
Consolidated infrastructure plan submitted to National Treasury

28. Monitoring Provincial Expenditure

29. Monitoring Provincial Expenditure
Continuous engagements with departments in a cooperative manner to jointly seek solutions and prevent fiscal dumping;
Quarterly reports to Top Management, Exco and Legislature;
Frequent interaction with departments on spending performance and general issues as highlighted by monthly IYM’s;
Quarterly narrative reports to AO’s and CFO’s;
Quarterly meetings between MEC’s for finance, education, health and public works to discuss infrastructure spending and other difficulties;
Specific provincial initiatives to ameliorate the March spike; and
CFO intergovernmental forums.

30. Discussion