1. FREE STATE DEPARTMENT OF SPORT, ARTS, CULTURE AND RECREATION Presentation to Select Committee on Conditional Grants and Capital Expenditure on Under-Spending on the Community Library Services Grant 19 May 2010

2. 8/29/20152 CONTENT Community Library Services Grant: Business Plan Community Library Services Grant: Expenditure Plan Expenditure Trends up to 31 December 2009 General Analysis of Trends Plan to Address Shortcomings Expenditure shifting plan for under-spending Up to date Expenditure at close of Financial Year Assessment of Department’s Monitoring Capacity

3. 8/29/20153 BUSINESS PLAN: SUMMARY ProjectTarget DateBudget R’000 Provide ICT infrastructure to 59 libraries and maintain existing infrastructure Quarter 310 115 Provide photocopiers to 30 libraries and maintain existing equipment Quarter 21 529 Provide furniture to 23 libraries Quarter 3460 Provide A-V Equipment to 10 libraries Quarter 3220

4. 8/29/20154 BUSINESS PLAN: SUMMARY ProjectTarget DateBudget R’000 Upgrade security at 35 libraries Quarters 3 and 4 3 672 Upgrade 10 libraries Quarter 4 2 000 Upgrade library collections with 50 000 publications and subscriptions to periodicals and electronic publications Quarters 1-4 5 600 Provide services to visually impaired at 15 libraries Quarter 3 375

5. 8/29/20155 BUSINESS PLAN: SUMMARY ProjectTarget DateBudget R’000 Improve staff capacity with 63 appointments, training programmes and bursary scheme Quarter 2 15 082 Transfers to municipalities Quarter 3 552 Promote a culture of reading Quarter 3 300 Administration of grantQuarters 1- 4 410 TOTAL ALLOCATION40 315

6. 8/29/20156 EXPENDITURE PLAN & ACTUAL EXPENDITURE AllocationQuarter 1Quarter 2Quarter 3Quarter 4Total Amount5 3359 24515 01610 71940 315 % of total allocation 13.23%22.93%37.25%26.59% Actual expenditure 3 7697 3279 57120 667 % of planned expenditure 70.65%79.25%63.74%51.26% Deviation1 5661 9185 4458 929

7. 8/29/20157 ANALYSIS OF LIBRARY SERVICES CONDITIONAL GRANT SPENDING UP TO QUARTER 3 ProjectsTotal BudgetQuarter 1Quarter 2Quarter 3Total Expenditur e To Quarter 3 % of Total Budget ICT Infrastructure 10 1554453 0652 1995 70956 % Photocopiers 1 529-8058388858 % Furniture 46081940142893 % A-V Equipment 220--168 76 % Security upgraded 3 672-511 783183450 % Buildings upgraded 2 000393308375107654 % Library collections upgraded 5 6007066611 4932 85851 % Services to visually impaired 375----0 % Improved staff capacity 15 0822 1892 3302 9037 42249 % Transfers to municipalities 552----- Promotion of a culture of reading 200-27426935 % Grant Administration 410286112421352 % - TOTAL 40 3153 76973279 57120 66751 %

8. 8/29/20158 NOTES ON EXPENDITURE TRENDS ICT Infrastructure -Equipment and networks installed at 45 of 59 targeted libraries. -Delays with delivery of equipment and installation of networks: Contractor could not deliver and SITA had to appoint a new contractor. -Deviation from targeted expenditure due to late installation of networks and delays by SITA in invoicing for data lines.

9. 8/29/20159 NOTES ON EXPENDITURE TRENDS Furniture and Equipment -Photocopiers installed as planned. Deviation in expenditure due to over- budgeting for maintenance and late invoicing. -A-V equipment installed as planned at 10 libraries. -Furniture delivered

10. 8/29/201510 NOTES ON EXPENDITURE TRENDS Security upgraded -Electronic security systems installed as planned at 5 libraries. -Installation of burglar alarms and appointment of security services not achieved due to non-responsive bid documents and Provincial Treasury’s policy directives on arrangement of security contracts. -One of 4 security fences done. Public Works Dept. experienced challenges in appointing contractors

11. 8/29/201511 NOTES ON EXPENDITURE TRENDS Buildings upgraded -Progress on one project only: Philippolis. -Deviation due to challenges experienced with the appointment of contractors. Transfer payments -Not done: municipalities to submit required documentation.

12. 8/29/201512 NOTES ON EXPENDITURE TRENDS Improved staff capacity –Target: 63 additional staff appointed not achieved. –Recruitment delayed due to late approval to continue. –Library collections –Target: 50 000 items of library material bought. –36 651 items delivered and subscription to electronic publications done. –Renewal of periodical subscriptions postponed till January. Contractor experienced challenges with invoicing. –Deviation caused mostly by slow delivery by SMMEs who experienced difficulties in obtaining seed money.

13. 8/29/201513 NOTES ON EXPENDITURE TRENDS Services to visually impaired - SLA with Library for the Blind to be finalized. Number of Libraries served by Conditional Grant –Library collections upgraded: 20 libraries –ICT Infrastructure: 59 libraries –Photocopiers: 30 libraries –Additional staff: 50 libraries –Infrastructure: Renovations, security: 10 libraries

14. 8/29/201514 GENERAL ANALYSIS OF TRENDS Under-expenditure caused mostly by: Delay in recruitment and appointment of staff. Challenges experienced with appointment of contractors for infrastructure projects. New Provincial Treasury directives on the arrangement of new contracts. Late or non-delivery of orders for library materials.

15. 8/29/201515 PLANS TO ADDRESS SHORTCOMINGS Obtain approval to amend business plan to redirect under-expenditure to other projects where contracts are in place and delivery can be fast-tracked. Obtain approval from Provincial Treasury to deviate from directives on arrangement of new contracts, especially security contracts. For 2010/11 appoint an infrastructure manager to assist Public Works Dept. with infrastructure contracts and improve monitoring of infrastructure projects.

16. 8/29/201516 PLANS TO ADDRESS SHORTCOMINGS Enter into an SLA with the Dept of Public Works and Rural Development to have a framework for service delivery. Expand the database of suppliers of library materials to have alternative suppliers in case of non-delivery. Strengthen the management capacity in the Library Services Directorate by filling 2 vacant posts of deputy director.

17. 8/29/201517 EXPENDITURE SHIFTING PLAN FOR UNDER-EXPENDITURE ProjectAmount R’000 Upgrade library collections4 447 Provide photocopiers to 14 libraries266 Provide electronic security gates to 6 libraries 1 375 Computer equipment and consumables 1 041 Computer equipment and software for visually disabled 150 Additional training programmes250 Philippolis Upgrade1 400 Total8 929

18. 8/29/201518 UP-TO-DATE EXPENDITURE AT CLOSE OF FINANCIAL YEAR AllocationQuarter 1Quarter 2Quarter 3Quarter 4Total Amount5 3359 24515 01610 71940 315 Actual expenditure (detailed breakdown available on) 3 7697 3279 57119 52440 191 Deviation1 5661 9185 445(8 805)124 Note: Under-expenditure (R68 000) on compensation budget and R54 000 on library materials (roll-over requested) Actual expenditure as % of total budget 9.35%18.17%23.74%48.43%99.69%

19. 8/29/201519 ASSESSMENT OF DEPARTMENT’S MONITORING CAPACITY Financial Control Committee meeting under chairpersonship of Head of Department. Chief Director: Cultural Affairs and Library Services and Director: Library and Archive Services. Expenditure trend-tracking overview by Chief Financial Officer. Finance, Supply Chain Management and Human Resources clerks appointed from grants to focus on grant commitments.

20. 8/29/201520 ASSESSMENT OF DEPARTMENT’S MONITORING CAPACITY Reporting system: –Quarterly reports to National Department (and National Treasury via Provincial Treasury) with comments on variances. –Monthly IYM reports, with comments on variances. –Monthly progress and evaluation reports by Budget Managers.