1. 1 Provincial Treasury Western Cape NCOP Select Committee on Finance Public Hearings Conditional Grant and CAPEX 20 November 2006

2. 2 Outline Conditional grant, infrastructure and capital expenditure 2005/06; 2006/07 second quarter expenditure; Business plan 2006/07 and 2007/08 process; and Monitoring provincial expenditure.

3. 3 Conditional Grant, Infrastructure and Capital Expenditure 2005/06

4. 4 CG Expenditure 2005/06 Conditional Grant Expenditure – 2005/06 2 nd and 4 th quarter

5. 5 CG Expenditure 2005/06 (2) Although expenditure was below notional benchmark of 50 per cent for some conditional grants at the end of the 2nd quarter of 2005/06, by the end of the financial year all grants had performed well.

6. 6 Capital and Infrastructure Expenditure 2005/06 Adjusted4th quarter expenditure R000'sbudgetR'000% Education 373 808 362 64597.0% Health 263 725 216 45682.1% Agriculture 48 194 51 545107.0% Transport and Public Works 1 173 815 1 166 86999.4% Total 1 859 542 1 797 51596.7% Total4th quarter expenditure R000'savailableR'000% Payments for capital assets 1 443 962 1 479 235102.4% 2005/06 - Infrastructure and capital expenditure Infrastructure and capital expenditure was at an acceptable level at the end of the 2005/06 financial year

7. 7 2006/07 2nd Quarter Expenditure

8. 8 CG Expenditure - Agriculture DORA 2006 Transfers received Spent by Province spent as % of DORA Spent as % transfers received Land care programme 3 115 1 402 1 28241.2%91.4% Comprehensive Agricultural Support Programme 20 648 9 292 4 13320.0%44.5% Provincial Infrastructure Grant 3 000 1 533 4 585152.8%299.1% Total 23 763 10 694 5 41522.8%50.6% Agriculture – Conditional Grant Expenditure as at 30 September 2006

9. 9 CG Expenditure – Agriculture (2) Challenges to Overcome –Land Care Programme Expenditure is season dependent as invasive plants grow in summer and the eradication thereof can only take place once crops have been harvested –Comprehensive Agriculture Support Programme Difficult to get community agreement on project plans Delay in tender process

10. 10 CG Expenditure - Education DORA 2006 Transfers received Spent by Province spent as % of DORA Spent as % transfers received FET College Sector Recapitalisation 70 000 35 000 50.0%100.0% HIV and Aids (Life Skills Education) 11 870 5 936 7 04759.4%118.7% National School Nutrition Programme 48 313 24 157 20 49042.4%84.8% Provincial Infrastructure Grant 61 829 30 901 18 51629.9%59.9% Total 192 012 95 994 81 05342.2%84.4% Education – Conditional Grant Expenditure as at 30 September 2006

11. 11 CG Expenditure – Education (2) Challenges to Overcome –National School Nutrition Programme Grant The reduction in the number of school days as a result of the winter school holidays has resulted in lower than expected expenditure –Provincial Infrastructure Grant A number of projects are in the tender and awarding phase Seasonality of the Western Cape impacts infrastructure expenditure Department projects to spend entire budget by the end of the financial year

12. 12 CG Expenditure - Health DORA 2006 Transfers received Spent by Province spent as % of DORA Spent as % transfers received National Tertiary Services 1 272 640 636 318 642 52350.5%101.0% Health Professions Training and Development 323 278 161 640 50.0%100.0% Comprehensive HIV and Aids 115 670 57 836 61 44953.1%106.2% Forensic Pathology Services 68 605 34 302 8 61512.6%25.1% Hospital Revitalisation 149 703 74 850 59 36639.7%79.3% Provincial Infrastructure Grant 61 829 30 901 22 90737.0%74.1% Total 1 991 725 995 847 956 50048.0%96.0% Health – Conditional Grant Expenditure as at 30 September 2006

13. 13 CG Expenditure – Health (2) Forensic Pathology Services –Constraints in the appointing of staff for the Forensic Pathology Services Unit Hospital Revitalisation Grant –Slow progress has been reported on large projects (Worcester, Paarl and Khayelitsha) –The Department projects to spend the entire budget by the end of the financial year Provincial Infrastructure Grant –Expenditure slow as a result of projects being put on hold in 2005/06 –Experienced professionals are leaving the department –Seasonality of the Western Cape impacts infrastructure expenditure –The Department projects to spend the entire budget by the end of the financial year

14. 14 CG Expenditure – Local Government and Housing DORA 2006 Transfers received Spent by Province spent as % of DORA Spent as % transfers received Integrated Housing and Human Settlement Development 598 800 360 000 362 22560.5%100.6% Local Government and Housing – Conditional Grant Expenditure as at 30 September 2006 Expenditure on the IHAHSDG is higher than transfers received

15. 15 CG Expenditure – Transport and Public Works DORA 2006 Transfers received Spent by Province spent as % of DORA Spent as % transfers received Provincial Infrastructure Grant 126 329 63 157 30 61524.2%48.5% Transport and Public Works – Conditional Grant Expenditure as at 30 September 2006 Challenges to Overcome Provincial Infrastructure Grant - A large number of projects are in the tender and design stage -Seasonality of the Western Cape impacts infrastructure expenditure -Department projects to spend entire budget by the end of the financial year

16. 16 CG Expenditure – Cultural Affairs and Sport DORA 2006 Transfers received Spent by Province spent as % of DORA Spent as % transfers received Mass sport and Recreation Participation Programme 12 100 7 128 3 24426.8%45.5% Cultural Affairs and Sport – Conditional Grant Expenditure as at 30 September 2006

17. 17 CG Expenditure – Cultural Affairs and Sport (2) Challenges to overcome –Mass Sport and Recreation Participation Programme 20 new hubs funded from April 2006/07 Currently, stipends only being paid for 11 hubs which are already in place Payment of stipends for 20 new hubs will commence in October 2006, backdated to August 2006

18. 18 Infrastructure and Capital Expenditure Infrastructure and capital expenditure as at 30 September 2006 *Infrastructure expenditure includes maintenance which is recorded as current expenditure in SCOA AdjustedSecond Quarter Expenditure R000'sbudgetR'000% Education 279 476 109 51039.2% Health 324 946 112 60934.7% Agriculture 50 535 16 79233.2% Transport and Public Works 1 314 717 490 32337.3% Total 1 969 674 729 23437.0% Total1st quarter expenditure R000'savailableR'000% Payments for capital assets 1 616 771 564 91234.9%

19. 19 Infrastructure and Capital Expenditure Challenges to Overcome –Bottlenecks in the procurement process, IDIP aims identify these bottlenecks and identify means to overcome them; –Inefficiencies in the link between planning; budgeting and implementation; and –Skills shortage. Measures instituted –Promotion of earlier planning cycle (IDIP).

20. 20 Conditional Grant Business Plans 2006/07 Financial Year

21. 21 CG Business Plans Business plans 2006/07 –All business plans for 2006/07 have been approved Business plans 2007/08 –Department of Agriculture Land Care Grant –Business plan submitted, awaiting feedback from National Department. Comprehensive Agriculture Support Programme –Business plan submitted to the national department

22. 22 CG Business Plans 2007/08 –Department of Education HIV and Aids (Life Skills Education) Grant –Business plan submitted, awaiting feedback from National Department of Health National School Nutrition Programme Grant –Business plan submitted, feedback received from national department Further Education and Training –DORA requires submission to be made by 25 November 2006, first draft will be ready for submission by 22 October 2006

23. 23 CG Business Plans 2007/08 –Department of Health Comprehensive HIV and Aids Grant –Business plan submitted, awaiting feedback from the national Department of Health Forensic Pathology Services Grant –Business plan completed in consultation with national Department of Health and submitted 23 October 2006 –Signed copy submitted 17 November 2006 National Tertiary Services Grant –Awaiting Service Level Agreement from National Department of Health Health Professions Training and Development Grant –Business plan format in process of finalisation by Department of Health

24. 24 CG Business Plans 2007/08 –Department of Local Government and Housing Integrated Housing and Human Settlement Development Grant –Business plan submitted, awaiting feedback from national department –Department of Cultural Affairs and Sport Mass Sport and Recreation Participation Programme Grant –Business plan submitted, awaiting feedback from national department –National Treasury Provincial Infrastructure Grant –Consolidated infrastructure plan submitted to National Treasury

25. 25 Monitoring Provincial Expenditure

26. 26 Monitoring Provincial Expenditure Continuous engagements with departments in a cooperative manner to jointly seek solutions; Quarterly reports to Top Management, Exco and Legislature; Frequent interaction with departments on spending performance and general issues as highlighted by monthly IYM’s; Quarterly narrative reports to AO’s and CFO’s; Quarterly meetings between MEC’s for finance, education, health and public works to discuss infrastructure spending and other difficulties; Specific provincial initiatives to ameliorate the March spike; and CFO intergovernmental forums.

27. 27 Discussion