1. North West Department of Education Presentation to the Select Committee on Appropriation Parliament of the Republic of South Africa Wednesday 21 April 2010

2. Report on the Under-Expenditure of the HIV/AIDS Conditional Grant  There has been a number of differing factors that has impacted on the North West Department of Education achieving 100% expenditure in terms of the conditional grant availed to the Department. This presentation will provide detailed information in this regard.

3. Data On Trends in Allocations, Transfers and Actual Expenditure of Conditional Grants of the Department ITEMBUDGETROLLOVERSADJUSTED BUDGET YTD EXPENDITURE % SPENTAVAILABLE BUDGET R’000 % HIV/AIDS12,9121,20714,11910,41273.7%3,707

4. Monitoring Capacity of the Department  Monitoring is undertaken by Life Orientation and Life Skills Specialists in the District. Currently there are 36 specialists, who work on the curriculum programme.  The monitoring exercise is also undertaken by child care coordinators (CCC). The Department has 35 CCCs.

5. Monitoring Capacity of the Department  It is important to note however that whilst these officials are in the system, there is an acute shortage of transport which hampers the actual work on the ground.  The 35 CCCs are allocated 8 schools each for monitoring purposes in respect of the Care and Support Programme. These officials extend their monitoring functions beyond the mandatory 8 schools.

6. Monitoring Capacity of the Department  Beyond those officials who are responsible for the task at the cold face, monitoring is undertaken by the Internal Audit Unit of the Department and regular meetings are convened with the HIV/AIDS Life Skills Unit.

7. Factors That Have Contributed to Under Expenditure  First Aid Kits Early in 2009 the Department initiated the process of purchasing top-up items for First Aid Kits for schools. Following advice received from the Department of Health we approached the National Treasury for details of suppliers. We were requested to make formally solicit permission by the National Treasury.

8. Factors That Have Contributed to Under Expenditure On 20 May 2009 permission was formally requested from the National Treasury. Permission to participate in the national tender was granted by the National Treasury on 19 August 2009. On 2 September 2009 orders were dispatched to Icembe Medical Supplies and Central Medical Suppliers. These suppliers failed to deliver items to the value of R200 740.60.

9. Factors That Have Contributed to Under Expenditure Interventions undertaken to address the delay include: i. Regular telephonic follow-ups were made with both service providers ii. Matter was brought under discussion with the Departmental CFO and the National Treasury iii. On 9 November 2009 the National Treasury was requested to intervene iv. On 2 February 2010 the order was cancelled

10. Factors That Have Contributed to Under Expenditure  Career Guides Career guides to the total value of R519840.00 were purchased during August 2009. Payment was however only processed on 14 March 2010 due the service provider being unable to provide the Department with a valid tax clearance certificate.

11. Factors That Have Contributed to Under Expenditure  Tender for Hygiene Packs for Orphans and Vulnerable Children A tender for the purchase of hygiene packs was advertised and the tender was consequently awarded to Industrimed. The amount allocated to this activity was R4 519 200.00, constituting 35% of the HIV/AIDS conditional grant.

12. Factors That Have Contributed to Under Expenditure Chronological Order of Events DATEEVENT August 2009Process of purchase of hygiene packs initiated Approached other government institutions to utilize their service providers. We were informed that there were no existing suppliers Specifications were drafted. 30 September 2009Submission for open bid tender was submitted to Departmental Procurement Committee

13. Factors That Have Contributed to Under Expenditure DATEEVENT 5 November 2009The Departmental Procurement Committee approved a request to invite suppliers to tender 19 November 2009Tender was advertised 30 November 2009Briefing session with prospective bidders was convened 14 December 2009Closing date for suppliers to submit bid documents 8 February 2010Bid Evaluation Committee inspects the samples submitted for compliance with the specifications

14. Factors That Have Contributed to Under Expenditure DATEEVENT 8 February 2010The tender was adjudicated by the Departmental Procurement Committee 18 February 2010Letter of award dispatched to Industrimed 19 February 2010Industrimed formally accepts the tender and further confirms that complete consignment will be delivered by the end of March 2010 8 March 2010First consignment of hygiene packs were delivered to the Department. Supplier was immediately informed that consignment differed from the approved sample

15. Factors That Have Contributed to Under Expenditure DATEEVENT 9 March 2010Acting Chief Financial Officer informed of discrepancy. Service provider telephonically requested by the Acting CFO to correct the sample Acceptance of hygiene packs and payment of Industrimed has become a litigation issue

16. Factors That Have Contributed to Under Expenditure The Department has handed the matter over to the Office of the State Attorney The order in the amount of R3.6 million has not been cancelled. A request has been made for a rollover of funds (i.e R3.6 million) to enable the Department to pay the service provider once the error with the products has been addressed. Once this issue has been resolved expenditure in respect of this cost centre will register 100%.

17. Receipt of Monthly Reports Monthly as well as quarterly reports are submitted to the following authorities: Life Skills HIV/AIDS Coordinator at the National Department of Basic Education Senior Management Team of the North West Department of Education Provincial Treasury who receive only quarterly reports

18. THANK YOU EXECUTIVE MANAGEMENT TEAM NORTH WEST DEPARTMENT OF EDUCATION