1. Presentation to the Provincial Budget Committee
PRE-AUDITED PERFORMANCE OUTCOMES FOR THE FOURTH quarter of 2018/19 FINANCIAL YEAR
Presentation to the Provincial Budget Committee
Provincial Treasury and the Department of the Premier
2 August 2019

2. Pre-Audited 4th Quarter Outcomes of the 2018/19 Financial Year for Expenditure, Infrastructure and Revenue

3. Contextualising the In Year Monitoring & Reporting Process

4. In Year Monitoring Purpose
Purpose of the In Year Monitoring:
Allows for the oversight of the In Year Expenditure and revenue management
Provides transparency & accountability of financial management
Early warning system in respect of In Year expenditure and revenue
Revenue and expenditure actuals and projections(implementation of the current budget) are incorporated into the annual budget process of the coming financial year
It is the foundation of our fiscal discipline principle
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

5. Legislative requirements of the In Year Monitoring Reporting Process
Public Finance Management Act, Act 1 of 1999 (PFMA):
Emphasis on accountability, regular monitoring and performance reporting on a monthly basis
S40(4)(c) of PFMA
The accounting officer, must within 15 days of end of each month, submit to relevant Treasury & Executive Authority
The actual revenue & expenditure for the reporting month and a projection of expected expenditure & revenue collection for remainder of financial year
When necessary, an explanation of material variances and steps to be taken to remain within budget
Treasury Regulations
A Provincial Treasury must, before the 22nd day of each month, submit a statement on the actual and projected revenue & expenditure to National Treasury, based on information submitted in terms of S40(4)(c) of the PFMA
S32 of PFMA
National Treasury must publish a statement of province’s actual revenue & expenditure in a national Government Gazette
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

6. Budget Policy Statement
How the In Year Monitoring information informs the Provincial reporting and oversight structures
IYM/IRM
Database
WC Medium Term
Budget Policy Statement
(WC MTBPS)
Cabinet
Dataset
Budget Com
Adjustment
Budget
Provincial Treasury
National Treasury
NCOP
Executive Authority
Audit Com
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

7. Provincial Expenditure

8. Summary of pre-audited departmental payments as at 31 March 2019
Note: Total expenditure includes Interest and rent on land (R ), for the Provincial Parliament, and the Departments of Agriculture, and Transport and Public Works.
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

9. Provincial Expenditure as at 31 March 2019 (Pre-Audit) [1]
The Province reflect pre-audited spending of R billion or 99.5 per cent of the R billion adjusted budget, noting under spending amounting to R million, equivalent to 0.5 per cent of the budget
As part of the budget policy principles of fiscal consolidation, the Province applies the 80/20 principle for Compensation of Employees. This principle explains that 80 per cent of under spending will revert back to the Provincial Revenue Fund, while departments will be able to apply for reallocation of the remaining 20 per cent, subject to the approval of the Provincial Treasury
The departments largely contributing to the overall under spending amounting to R million, include the following:
Human Settlements: The net under spending of R million is mainly attributed to the Provincial Emergency Housing Grant (PEHG) (R million) appropriated as an additional adjustments budget at the beginning of the 2018/19 financial year and therefore the respective tender processes could not be finalised. The funding was received for emergency housing relating to fires in the Khayelitsha and Phillippi areas
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

10. Provincial Expenditure as at 31 March 2019 (Pre-Audit) [2]
Health: The net under spending of R million is mainly related to under spending of R million in terms of the Global Fund (donor funding due to delays in filling of posts as well as outstanding invoices and claims at the time); R million in Programme 8: Health Facilities Management, related to slow progress and delays in respect of scheduled maintenance; R6.973 million related to refunds from Cape Peninsula University of Technology (CPUT) and bursaries. The bulk of the under spending has been requested to be rolled over to the 2019/20 financial year
Premier: The net under spending amounts to R million, and relates to Compensation of Employees (R million), as well as Machinery and Equipment (R million) that was not delivered timeously by the supplier
Education: The under spending amounting to R million is mainly related to conditional grants for the Education Infrastructure Grant; Maths, Science and Technology Grant; and the Learners with Profound Intellectual Disabilities Grant. The Department has applied for roll-over of these respective grants and has subsequently been approved by National
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

11. Provincial Expenditure as at 31 March 2019 (Pre-Audit) [3]
Social Development: The under spending of R million is largely attributed to Compensation of Employees, due to internal promotions, resignations and the lag time in the filling of vacant posts
Transport and Public Works: The net under spending amounting to R million is largely related to less Building Condition Assessment reports finalised than initially planned. Furthermore, the under spending within Public Works Infrastructure includes the under spending on the provision for alternative service delivery mechanisms as permanent appointments for built environment professionals were made earlier than anticipated  
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

12. Infrastructure

13. Infrastructure pre-audited Expenditure as at 31 March 2019
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

14. Summary of Public Entity pre-audited payments as at 31 March 2019
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

15. Provincial Public Entities expenditure as at 31 March 2019 (pre-audit) [1]
The pre-audited performance reflects spending of R million or per cent of the R million adjusted budget
At the end of March 2019, Provincial Public Entities recorded an under spending of R million, which largely relates to CapeNature, Saldanha Bay Industrial Development Zone (SBDIZ), Casidra and Western Cape Gambling and Racing Board
CapeNature: Spending amounts to R million or 95.8 per cent of the R million adjusted budget, reflecting under spending of R million. The net under spending relates mainly to the Kogelberg Nature Reserve project, with delays experienced given the recent fires, impacting the delivery date as well as affecting the progress of the phase two developments at Kogelberg. These costs are expected to be incurred in the next financial year (2019/20), and are included in the Entity’s commitments
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

16. Provincial Public Entities expenditure as at 31 March 2019 (pre-audit) [2]
Saldanha Bay Industrial Development Zone (SBDIZ): Spending performance amounts to R million or 78.8 per cent of the R million adjusted budget, reflecting under spending of R million. The under spending relates mainly to the Transnet National Ports Authority (TNPA) lease deposit of R7.000 million, estate costs, and the April 2019 rent to be paid in the new financial year. The under spending is thus committed for the 2019/20 financial year
Casidra: The Entity reported pre-audited spending amounting to R million or per cent of the R million adjusted budget, reflecting under spending of R4.698 million, attributed to efficiencies and cost savings initiatives implemented by the Entity. Furthermore, savings were realised on Compensation of Employees, due to posts not filled as planned
Western Cape Gambling and Racing Board: The Entity recorded pre-audited spending amounting to R million or 94 per cent of the R million adjusted budget. The under spending of R3.751 million mainly relates to savings with Goods and Services due to the utilisation of in-house capacity. Furthermore, savings of R1.800 million was realised given the Board’s relocation costs (that took place later than expected) and subsequently approved to be taken up as part of the 2019/20 budget
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

17. Provincial Own Revenue

18. Summary of pre-audited Provincial Own Receipts as at 31 March 2019
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

19. Provincial Own Receipts as at 31 March 2019 (pre-audit) [1]
Provincial own revenue collections at the end of March 2019 amounted to R3.535 billion or per cent of the R2.967 billion adjusted budget
Key Revenue Drivers include:
Transport and Public Works: The Own revenue collections amounting to R1.835 billion at the end of March 2019 which is mainly derived from Motor Vehicle Licence (MVL) fees, recording collections of R1.685 billion during the 2018/19 financial year. The 2018 MVL fee revenue is higher, in comparison to the 2017/18, due to an increase in MVL fee tariffs and an increase in the motor vehicle population
Health: The Own revenue collected at the end of March 2019 amounts to R million or per cent. The higher own revenue collections were mainly as a result of an increase in revenue received from hospital patient fees, transfers received from the Global Fund, and refunds received from the Cape Peninsula University of Technology (CPUT) for the training of nurses at this institution, as the Western Cape Department of Health has taken a decision to directly provide training to nursing students
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

20. Provincial Own Receipts as at 31 March 2019 (pre-audit) [2]
Provincial Treasury: Registered collections in Own revenue amounts to R million or per cent of the adjusted budget. The own revenue collections at the end of March 2019 includes casino taxes that contributed R million, while horse racing taxes contributed R million
The Department of Education collected R million or 87.8 per cent of the adjusted budget at the end of March The lower collections in 2018/19 was due to lower debt, impacting on revenue being written off
Human Settlements: The Own revenue collections amounts to R million or per cent of the adjusted budget at the end of the 2018/19 financial year, and is mainly driven by returned subsidies received from municipalities. The revenue also includes proceeds from the sale of land (R81 million) to the Airports Company South Africa (ACSA). R43 million of this revenue has been appropriated in the 2019/20 financial year
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

21. Non-financial pre-audited performance information for the fourth quarter of the 2018/19 financial year for all departments and public entities
Zeenat Ishmail

22. Contextualising the Non-Financial Performance Reporting

23. Context of Quarterly Non-Financial Performance Reporting
Performance data is generated for all 13 Departments and 10 Entities against set performance targets
The performance data is published quarterly that ensures transparency and accountability on progress as it relates to service delivery
Non-financial performance monitoring is done using the electronic Quarterly Performance Report System (eQPRS). Monitoring occurs quarterly and annually
Quarterly Performance Reports (QPR) must be signed off by the Accounting Officer
In terms of value; QPR provide programme (budget) performance data on the progress made against a set of performance targets as agreed to within an institution’s Annual Performance Plans (APPs)
Quarterly Reporting is used as a monitoring tool by line managers which enables Accounting Officers/CEOs to make decisions on tracked progress against planned based on evidence generated
QPR data is formally reported to the Provincial Top Management and Cabinet and shared with key stakeholders
QPR data to be used for further application to assess what is working and not working
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

24. Legislative and other Requirements
Treasury Regulations: Section 5.3.1
The accounting officer of an institution must establish procedures for quarterly reporting to the executive authority to facilitate effective performance monitoring, evaluation and corrective action
National Treasury instruction Note No.33/2011
This instruction outlines the mandatory requirements as set in the framework for Strategic and Annual Performance Plans
These guidelines are applicable to all Provincial Departments and Section 3A and 3C Public Entities (excluding 3D Public Entities)
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

25. Provincial Reporting:
Value chain
Brief:
Provincial Cabinet,
HODs and CEOs
Presentation:
Provincial Budget Committee
eQPRS
(DPME)
Provincial Reporting:
BizPerformance
(DotP)
Publication:
DotP Website
Provincial
Audit Committees
Public view
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

26. Departments: Pre-Audited Performance Information for the Fourth Quarter 2018/19 Financial Year

27. Summary: Pre-Audit Performance Information 2018/2019 FY
Source : Pre-audit eQPR
Key: Achieved = 100 per cent or more of target achieved; Partially achieved = 50 per cent or more but less than 100 percent; Not achieved = below 50 per cent.
Due to rounding, percentages do not always add up to 100 per cent
Note: Health uses 95 per cent and above to reflect “achieved” due to many of the indicators being demand driven and therefore unpredictable.
Source : pre-audited QPR Model
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

28. Pre-audit performance against the provincial average
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

29. Key Observations – Provincial Departments
Provincial average - performance targets achieved: WCG Departments achieved 750 (84%) of the 898 performance indicator targets
Achieving more than or equal to (≥) the WCG average of 84% : Eight departments: DotP (94%), PT (98%), DLG (96%), DHS (88%), DOCS (99%), DCAS (97%), DEDAT (89%) and DEA&DP (92%)
Achieving less than (<) the WCG average of 84% : Five departments: WCED (54%), DOH (77%), DSD (70%), DOA (81%) and DTPW (56%)
118 targets (or 13 per cent) have been partially achieved
30 targets (or 3 per cent) have not been achieved
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

30. Key Observations – Provincial Clusters
Overall cluster (unit of analysis) average achieved of performance targets:
Governance cluster = 96 per cent
Social cluster = 82 per cent
Economic cluster = 78 per cent
Achieving % performance targets more than (≥) WCG average of 84 per cent:
All departments within the Governance Cluster achieved more than the WCG average
Three departments within the Social Cluster achieved more than the WCG average, namely Human Settlements, Cultural Affairs and Sport and Community Safety
Two department within the Economic Cluster achieved more than the WCG average, namely Economic Development and Tourism and Environmental Affairs and Development Planning
Achieving % performance targets less than (<) WCG average of 84 per cent:
Three departments within the Social Cluster achieved less than the WCG average, namely Health, Social Development and Education
Two departments within the Economic Cluster achieved less than the WCG average, namely Transport and Public Works and Agriculture
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

31. Preliminary vs Validated Performance Information-Q431

32. Key Observations
The analysis of the Preliminary vs Validated non-financial performance reporting for quarter 4 revealed the following:
Two (2) departments reported a lower validated performance achieved than their initial preliminary performance: DOA and DEA&DP
Four (4) departments reported higher validated performance achieved than their initial preliminary performance: DoTP, DCAS, Health and DEDAT
The preliminary and validated performance of departments who remained the same:
DLG, PT, DHS, DOCS, DSD, WCED and DTPW
There is a significant improvement on the performance reporting of preliminary and validated achievements by the majority departments
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

33. Public Entities: Pre-Audited Performance Information for the Fourth Quarter 2018/19 financial year

34. Preliminary Performance Information for Q2
Source : Pre-audit eQPR
Key: Achieved = 100 per cent or more of target achieved; Partially achieved = 50 per cent or more but less than 100 percent; Not achieved = below 50 per cent.
Due to rounding, percentages do not always add up to 100 per cent
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

35. Pre-audit performance against the provincial average
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

36. Key Observations – Public Entities
WCG public entities achieved 140 (87%) of the total 161 performance indicator targets
Achieving more than or equal to (≥) the WCG average of 87 per cent : Eight Public Entities: WCGRB (88%), WCLA (89%), HWC (100%), WCLC (100%), WCCC (100%), WESGRO (93%) SBIDZ (92%) and CapeNature (100%)
Achieving less than (<) the WCG average of 87 per cent: One Public Entity: Casidra (71%)
13 targets (or 8 per cent) have been partially achieved
8 targets (or 5 per cent) have not been achieved
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

37. Key Observations – Provincial Cluster perspective
Overall cluster (unit of analysis) average achieved of performance targets:
Governance cluster = 88 per cent
Social cluster = 91 per cent
Economic cluster = 85 per cent
Achieving % performance targets more than (≥) WCG average of 87 per cent:
The WCGRB within the Governance Cluster achieved more than the WCG average
All four entities within the Social Cluster achieved more than the WCG average, namely WCLA,WCCC, WCLC and HWC
Three of the four public entities in the Economic Cluster achieved more than the WCG average, namely WESGRO, SBIDZ, CapeNature
Achieving % performance targets less than (<) WCG average of 87 per cent:
Casidra within the Economic Cluster did not achieve more than the WCG average
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

38. Preliminary vs Validated Performance Information – Q438

39. Key Observations
The analysis of the Preliminary vs Validated non-financial performance reporting for quarter 4 revealed the following:
One (1) public entity reported a lower validated performance achieved than their initial preliminary performance: Casidra
Two (2) public entities reported higher validated performance achieved than their initial preliminary performance: SBIDZ and Wesgro
The preliminary and validated performance of public entities who remained the same:
WCGRB; HWC; WCCC;WCLA; WCLC and CapeNature
There is a significant improvement on the performance reporting of preliminary and validated achievements by the majority public entities
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

40. A closer look at the In Year Monitoring Model

41. Practical Example of an IYM Report (Departmental Expenditure)
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

42. Practical Example of an IYM Report (Departmental Revenue)
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

43. Practical Example of an IYM Report (Vote Deviation sheet)
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

44. Practical Example of an IYM Report (Conditional Grants)
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

45. Practical Example of a S32 Report (Departmental) [For NT Publication]
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

46. Practical Example of a S32 Report (Conditional Grants) [For NT Publication]
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

47. Practical Example of a S32 Report (Infrastructure- Financial) [For NT Publication]
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

48. Practical Example of a S32 Report (Infrastructure - Non-Financial) [For NT Publication]
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

50. Discussions/Questions
Pre-Audited Performance Outcomes for the Fourth Quarter of 2018/19 financial year

51. Acting Chief Director: Provincial Government Public Finance (Ms A Pick)
Chief Director: Strategic Management Information (Ms Z Ishmail)
Legislature Building, 7 Wale Street, Cape Town