1. PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATION
DIRECTORS’ GENERAL: MR. E AFRICA
PROF. MC NWAILA
16 November 2011

2. OUTLINE OF THE PRESENTATION
1. Introduction
2. Adjusted Estimates Expenditure of
National Estimates (AENE) Allocation 2011
3. Explanations
4. Transfers and Subsidies
5. Expenditure on Transfers and Subsidies

3. 1. Introduction The purpose of the presentation is to brief Standing
Committee on Appropriations on the Departmental Financial Expenditures

4. 2. ADJUSTED ESTIMATES OF NATIONAL EXPENDITURE (AENE) ALLOCATION 2011
Roll-overs – R5.6 million
Programme 6: Infrastructure and Economic Development
R5.6 million has been rolled over to establish 18 committed employment sites for the community work programme.
Unforeseeable and unavoidable expenditure – R million
Programme 3: Governance and Intergovernmental Relations
R million was granted to the department to pay non-returning local councillors whose term has ended after the 18 May 2011 elections as a once-off gratuity
Adjustments due to significant and unforeseeable economic and financial events
Programme 5: Provincial and Municipal Government Systems
An additional amount of R2.165 million has been allocated for higher personnel remuneration increases than the main budget provided for.
Declared savings
Programme 1: Administration
Savings of R3 million have been declared due to under-spending on computer services.
Virement
All Programmes:
Compensation of employees has been increased by R6 million to cater of prioritised posts
Programme 6: Infrastructure and Economic Development: R has been allocated for establishment and support of co-operatives at the local level (SANACO)

5. Adjustments appropriation
Adjusted Estimates of National Expenditure 2011
Programme
2011/12
Adjustments appropriation
Total
Main
Roll-
Unforeseeable/
Virements
Other
adjustments
Adjusted
R thousand
appropriation
overs
unavoidable
and shifts
Administration –
(4 200)
(3 000)
(7 200)
Policy, Research and Knowledge Management
46 006
(4 500) -
41 506
Governance and Intergovernmental Relations
(3 620)
Disaster Response Management
(4 940)
Provincial and Municipal Government Systems
(620)
247696
Infrastructure and Economic Development
5 600
17 880
23 480
Traditional Affairs
83 769
(3 000)
Roll-overs – R5.600 million
R5.600 million has been rolled over to implement 18 committed sites for the CWP programme
Unforeseeable and unavoidable expenditure – R million
An amount of R million was granted to the department as a new transfer payment to Municipal Councillors Pension Fund.
R3 million was surrendered to National Treasury as a contribution to the National fiscus.

6. 3. Explanations
The low expenditure of 39.5% was due to work that was previously done by consultants which is now done in-house after employing skilled officials during restructuring.
The Committee should note that the R266.3 million allocated to the department during the Adjusted Estimates was not as a result of a request for roll-over but a request for unforeseeable and unavoidable to the department to pay non-returning local councillors whose term has ended after the 18 May elections as a once-off gratuity.
The deviation of section 43 (2) of the PFMA on shifting of 9.8 per cent within Programme 2 to Programme 6 was due to low expenditure after the contract of ICT came to an end and the department elected to perform this task in-house. As a result there were savings anticipated which was disclosed to and approved by National Treasury.
This approval was done in accordance with section 43 (1)
The Shifting of R38.4 million was done because when the Siyenza Manje programme was transferred to COgTA, the sole intention was to create an entity called Municipal Infrastructure Support Agency (MISA) but since the process of establishing an new entity was not yet finalised, National Treasury approved that only 20% could be shifted to current expenditure for the continuation of the programme.
National Treasury requested departments to declare efficiency savings back to the fiscus and the Department was able to reprioritise and surrender R3 million.
The R5.6 million rollover was requested to establish 18 committed employment sites for the community work programme that were delayed in the 2010/11 financial year.

7. 4. TRANSFERS AND SUBSIDIES

8. 5. Expenditure on Transfers and Subsidies
Transfers and Subsidies: Equitable Share, Municipal Share, Municipal Infrastructure grants transfers were made according to their cash flow with the exception of MSIG grant where only 71% was transferred due to 14 municipalities grants which were withheld due to non compliance.
MISA: The Department has recently signed a contract with Development Bank of Southern Africa (DBSA). The contract entails that all procurement processes would be done by the DBSA except for certain listed items; the first payment of R49.1 million has been paid over to DBSA.
Transfers to ULGA are still under management consideration in consultation with the Executive on the best manner disburse the allocation.

9. THANK YOU