1. Provincial Budgets and Expenditure as at 31 December 2007 2007/08 Financial Year AGRICULTURE
SCOF (NCOP) Hearings
Presented by:
Intergovernmental Relations
National Treasury
February 2008

2. Broad Observations
The presentation covers provincial spending as at 31 December 2007
Based on Section 40(4) PFMA reports (IYM) submitted by PTs
Published in Government Gazette on 30 January 2008
Provincial spending is on track with 71.6% or R153.9bn spent of their budgets
Projected overspending of R1.4 billion in 6 provinces
Includes adjusted budgets
National adjustments (R2.8bn)
Provincial adjustments (R1.6bn)
Total adjustments (R4.4bn) (health – R1.6bn, education – R1.2bn)
4 provinces projecting to overspend education budgets (NW and KZN significantly; GT to underspend)
R1.2 billion added to cover wage agreement – only R641.7m allocated by provinces
Capital – R1.2bn added, however only have capacity to spend close to main budget
Spending against budgets on conditional grants is lower than the total provincial spending average

3. Challenges addressed through 2007 AENE
NW was impacted more significantly by re-demarcation
the sheer magnitude of the “shock” combined with use of incorrect data (number of schools, learners, educators, etc.) resulting in extreme budgetary pressures on NW education
Once-off conditional allocation of R250 million allocated to NW
Wage agreement is 1.5% higher than what prov budgeted
Costs associated with the higher than anticipated wage settlement was allocated to provinces (R1.2bn)

4. Provincial Adjustments

5. Key highlights
Provinces show a slight decrease in the share of Social Services total budget from 73.8% in 2006/07 to 73.2% in 2007/08
Education remains largest item of budget at 41.9%
Health at 28.3%
Social Welfare Services only 3.0% of budget
Spending in social services sectors:
Education at R66.3bn (73.7%)
Health at R45.3bn (74.4%)
Social Welfare Services at R4.6bn (72.0%)
Spending in non-social services sectors:
Agriculture at R3.9bn (63.4%)
Housing and Local Government at R7.6bn (61.8%)
Public Works, Roads and Transport at R16.3bn (66.6%)
Sport, Arts and Culture at R1.6bn (65.7%)
Personnel spending is at R88.7bn (74.7%)
Capital expenditure is at R11.7bn (61.4%)

6. Provincial Aggregated Expenditure (1)

7. Provincial Aggregated Expenditure (2)

8. Provincial Social Services (2)

9. Conditional grants

10. Conditional Grants (3)

11. Agriculture Grants (1) Agricultural Disaster Management Grant
Objective (Schedule 5 Grant):
To provide support and relief from the effects of drought / veldfire, cold spell, hail storm and floods in identified areas within provinces
First Nine Months Expenditure:
Two provinces have reported spending of R15.7m or 5.0% of the R316m allocation
No funds have been transferred
Spending: WC 30.1% and KZN 8.6%
Service Delivery Outcome:
Department / Sector to respond

12. Agriculture Grants (1) Comprehensive Agricultural Support Programme Grant
Objective (Schedule 4 Grant):
To expand the provision of agricultural support services. and promote and facilitate agricultural development by targeting beneficiaries of the Land and Agrarian Reform programmes
First Nine Months Expenditure:
Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required
However, provinces reported spending of R185.8m or 43.4% of R428.6m adjusted allocation
Transfers received amounted to 74.2% of national allocation
Highest spending: GP 70.1% and EC 62.0%
Lowest spending: KZN 16.4% and LP 22.6%
Service Delivery Outcome:
Department / Sector to respond

13. Agriculture Grants (2) Land Care Programme Grant: Poverty Relief and Infrastructure Development
Objective (Schedule 5 Grant):
To address the degradation problems of natural/agricultural resources and to improve the socio-economic status and food security of rural communities
First Nine Months Expenditure:
Provincial Agriculture Depts spent R26.9m or 46.3% of the R58.0m Land Care Programme adjusted allocation
Transfers received amounted to 80.0% of national allocation
Highest spending: MP 84.3% and EC 74.5%
Lowest spending: GP 21.9%, no spending recorded for LP
Service Delivery Outcome:
Department / Sector to respond

14. Conditional Grants (5) Spending Rates
5 or more provinces have spent less than 60% of their grant budget for the following grants:
Land Care Programme;
Community Library Services;
HIV and AIDS (Life Skills Education);
Forensic Pathology Services;
Integrated Housing and Human Settlement Development
Although the rate of spending is encouraging and reflects an improvement over previous financial years, overall CG spending (60.4%) still lies below total provincial spending (71.6%)

15. Conditional Grants (6) Spending Rates