2005/06 fourth quarter report on conditional grants and capex

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2005/06 Fourth Quarter Report on Conditional grants and CAPEX

Select Committee on FinanceGauteng Treasury

02 May 2006

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Content of Presentation

Total spending for 2005/06 FY

Conditional grants spending

CAPEX spending

Challenges moving forward

Provincial Treasury’s Intervention

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2005/06 total spending

Department

R thousand

Actual spending for Jan - March 2006

% of the

Adjusted

budget

Total spending 2005/06

% of the

Adjusted

budget

Budget 2005/06

Adjustm

ents

Adjusted Budget

Total (Over)/Un

der Adjusted budget

Education 2,642,783 24% 10,412,115 96%10,360,36

8 447,04210,807,41

0 395,296

Health 3,076,301 31% 9,972,970 101% 9,257,806 582,834 9,840,640 -132,330

Social Development 1,976,093 26% 7,239,548 94% 7,541,242 122,423 7,663,665 424,117

Office of the Premier 35,286 34% 104,215 99% 104,801 -54 104,747 532

Gauteng Legislature 35,266 31% 111,866 98% 113,064 1,033 114,097 2,231

Finance and Economic Affairs 566,973 46% 1,153,330 94% 1,685,396 -454,405 1,230,991 77,661

Housing 422,023 24% 1,673,214 95% 1,647,987 116,308 1,764,295 91,081

Local Government 62,863 49% 128,479 100% 107,378 21,707 129,085 606

Transport 468,075 31% 1,490,545 100% 1,445,548 42,459 1,488,007 -2,538

Community Safety 26,553 15% 181,525 100% 182,218 -950 181,268 -257

Agriculture 64,193 29% 218,574 98% 228,842 -5,597 223,245 4,671

SRAC 99,841 51% 176,469 90% 148,060 48,228 196,288 19,819

GSSC 265,707 42% 635,727 99% 585,366 54,514 639,880 4,153

Total 9,741,95

6 28%33,498,57

6 97%33,408,0

76 975,54234,383,6

18 885,042

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Provincial summary for 2005/06

Provincial aggregate Total spending equals R33,4b which translates to 97%

of the adjusted budget Net underspending amounts to R885m and represents

3% of adjusted budget Depts. contributing to underspending incl.

Education – R395m Social Development – R424m Housing – R91m Finance – R71m

Dept showing significant overspending Health - R132m

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Provincial summary for 2005/06 Depts. contributing to underspending incl.

Education R395m Vacant public servants posts not filled Delays in the implementation Integrated Quality Management

System due to current disputes i.e salary progression and incentives

Social Development (R424m) Saving due to less intake of beneficiaries

Housing (R91m) Goods delivered late in the financial year.

Finance (R78m) Claims received late from depts. for GPG Precinct Unfilled posts due to late approval of the structure

Dept showing significant overspending Health (R132m)

Early delivery of equipment expected in 06/07

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2005/06 total conditional grants Dept & Grant Total

budget

From National

2005/06

Provincial

rollovers

Total availabl

e

Total received from National

Variance (Budget less

received

from National)

Total spendin

g 2005/06

Variance (Total available less total spending

)

% spent

DACE

Comprehensive Agricultural

Support 5,727 5,727 5,727 4,576 1,151 80%

Land Care Programme 2,000 2,000 2,000 2,037 37 102%

EDUCATION

HIV and Aids (Life Skills ) 18,880 2,821 21,701 18,880 22,202 -501 102%

School Nutrition Programme 101,124 581 101,705 101,124 91,580 10,125 90%

HEALTH

Comprehensive HIV and Aids 185,048 185,048 185,048 207,328 -22,280 112%

Health Professions Training

and Development 554,039 554,039 554,039 554,039 100%

Hospital Management and

Quality Improvement 18,510 18,510 18,510 4,348 14,162 23%

Hospital Revitalisation 88,955 88,955 88,955 88,955 100%

Integrated Nutrition Programme 11,333 11,333 11,333 9,875 1,458 87%

National Tertiary Services 1,760,465

1,760,465 1,760,465

1,760,465 100%

Forensic Pathology 16,944 16,944 16,944 1,461 15,483 9%

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2005/06 total conditional grants Dept & Grant Total

Budget from

National 2005/06

Provincial

rollovers

Total available

Total received

from National

Variance

(Budget less

received

from Nationa

l)


Variance (Total

available less total

spending)

% spent

HOUSING

Integrated Housing & Human Settlement 1,340,675 9,025

1,349,700 1,340,675 1,349,125 575 100%

Human Settlement & Redevelopment 4,130 3,169 7,299 4,130 4,514 2,785 62%

Land Distribution (Alex) 8,000 6,200 14,200 8,000 14,200 100%

NATIONAL TREASURY

Provincial Infrastructure 369,777 10,960 380,737 92,445 277,332 250,692 130,045 66%

SOCIAL DEVELOPMENT

HIV/aids Community based 20,341 20,341 20,341 20,341 100%

Integrated Social Development Services 27,904 27,904 27,904 22,148 5,756 79%

Social Assistance Administration 350,000 350,000 350,000 293,949 56,051 84%

Social Assistance Transfers 6,454,145

6,454,145 6,156,817 297,328 6,062,945 391,200 94%

SRAC

Mass Sport and Recreation

Participation 2,670 2,670 2,670 2,142 528 80%

TOTAL11,340,6

67 32,75611,373,2

3810,766,00

7 574,66010,766,92

2 606,501 95%

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Total conditional grants expenditure Adjusted budget amounts to R11,4b

Includes provincial rollover R32,7m Total expenditure amounts to R10,7b and translates to 94% of

the adjusted budget Total amount received equals R10,766b instead of R11,340b

Reduced transfers (R297m) due to revised payment schedule for social assistance grant; low number of beneficiaries

Stopping of 3 infrastructure installments (R277m) due to low level of spending on infrastructure, late submission of infrastructure reports and plans and submission of incomplete/inaccurate reports

Province reflects an underspending of R606m or 6% of the adjusted budget

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Conditional grants spending per dept.

Agriculture, Conservation & Environment Dept manages Land Care and Comprehensive

Agricultural Support programme (CASP) Land Care – prevention of degradation of natural resources

Adjusted budget – R2,2m; Includes provincial rollover of R185,000

Total received from National – R2m Expenditure amounts to R2,m or 93% of the budget Reason for underspending

delays in processing the quotations packages by the implementing agents due to noncompliance with specifications

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Conditional grants spending per dept.

CASP – assisting beneficiaries with land reform program

Total Adjusted Budget - R5,7m Full allocation received as per payment schedule Spending amounts to R4,5m and translates to 80%

of the budget Reasons for underspending

service providers were too slow in implementing the projects due to lack of service level agreements

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Conditional grants spending per dept cont.

Education Dept administers two cond. grants i.e HIV/AIDS & School

nutrition HIV/AIDS

Adjusted budget – R21,7m & includes the provincial rollover of 2,8m

Total received from National – R18,90m Actual spending amounts to R22,2m or 102% of the

budget Reason for overspending

Incorrect allocation to be corrected before financial

year closure

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National School Nutrition Adjusted budget – R101,7m Includes the provincial rollover of R581 000

Total amount received from National – R101,1m Expenditure incurred until March amounts to R91,6m

or 90% of the budget Reason for underspending

Delays in the delivery materials such as containers and kitchen equipment

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Social Development Manages four cond. grants i.e HIV/AIDS, Integrated Social Development, Social Assistance Administration and Social Assistance Transfer HIV/AIDS

Adjusted budget – R20,3m Total budget received as per payment

schedule Total expenditure R20,3m or 100% of the

budget

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Integrated Social Development Adjusted budget – R27,9m Full allocation received Actual spending amounts to R22,2m & translates to 79% of

the budget Underspending attributed to

Business plan approved in August 2005 Transfers to service providers was reduced due to non-compliance

Social Assistance Administration Adjusted budget – R350m Full allocation received R293m spent as at end of March or 84% of the budget Reason for underspending

Administration less due to low take up rate of beneficiaries

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Social Assistance Transfer Adjusted budget – R6,5b R6,2b received & less by R297m at year end

Due to revised payment schedule during the year

Total expenditure R6b or 93,9% of the budget or 98% funds received

Reasons for recording a saving Decrease in the number of applications for

grants Indemnity campaign by national dept Clean up exercise by province

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Sports, Recreation, Arts and Culture Mass Sport and Recreation programme

Adjusted budget – R2,7m Total received – R2,7m Total expenditure R2,1m or 80% of the budget Reason for underspending

Computers and printers in Hubs not delivered on time

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Health Responsible for HIV/AIDS, Hospital Management &

Quality Improvement, Integrated Nutrition Programme, Hospital Revitalisation, Forensic Pathology Services

HIV/AIDS Adjusted budget – R185m Total budget received Actual expenditure amounts to

R207m or 112% of the budget Overspending due to

Increase in the number of patients requiring ARV’s (target was 25000 and they reached 38000).

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Hospital Management & Quality Improvement

Adjusted budget – R18,5m Full allocation received R4,3m spent & translates to 23% of the budget Reason for underspending

Business plan approved in November 2005 Revised business plan submitted later but not all projects

were approved

Integrated Nutrition Programme Adjusted budget – R11,3m Full budget transferred to the province Spending to date R9,8m or 87% of the budget Underspending due to

Nutritional supplements ordered and delivered was not according to specifications

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Hospital Revitalisation

Adjusted budget – R88,9m Full budget transferred to the province Full allocation spent i.e 100% of the budget

Forensic Pathology Adjusted budget – R16,9m Full budget transferred to the province Total amount spent R1,5m or 8,6% of the budget Reason for underspending

Full allocation received during the adjustment Equipment orders placed but not yet delivered Process of transferring staff & assets from SAPS has not

been finalized

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Housing Manages 3 conditional grants, i.e Integrated

Housing & Human settlement, Human Settlement and Alexandra Urban Renewal

Integrated Housing & Human settlement Adjusted budget – R1,3b & includes provincial

rollover of R9m Total received – R1,3b Total expenditure R1,3b or 100% of the budget

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Human Settlement Adjusted budget – R7,3m & includes provincial

rollover of R3,2m Total received – R4,1m Total expenditure R4,5m or 81% of the budget Reasons for underspending

Misallocation of expenditure. Pre-final IYM will reflect the corrections (which will translate to 100% expend)

Alexandra Urban Renewal Adjusted budget – R14,2m & includes provincial

rollover of R6,2m Funds transferred – R8m Total expenditure R14,2m and translates to 100% of

the budget

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Provincial Infrastructure grant Receiving depts. are Health, Education and

Transport Adjusted budget amounts to R369m Only first installment received R92m; last three

installments withheld Total expenditure R250m or 65% of the budget

Health - R73m spent Education – R38m spent Transport – R139m spent

Reasons for not receiving the full allocation low spending on infrastructure, late submission of infrastructure

reports and plans and submission of incomplete/inaccurate reports

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2005/06 total capital spending

Department

R thousand

Actual spending for Jan - March 2006

% of the

Adjusted

budget


% of the

Adjusted

budget Budget 2005/06

Adjustme

nts Adjusted Budget

Total (Over)/Und

er Adjusted budget

Education 253,816 43% 516,273 88% 525,492 60,098 585,590 69,317

Health 530,840 63% 969,148 114% 525,492 383,889 847,096 (122,052)

Social Development 2,759 21% 10,617 80% 15,227

(1,920) 13,307 2,690

Office of the Premier 1,154 38% 2,257 75% 2,310 690 3,000 743

Gauteng Legislature 4,955 31% 14,301 91% 13,071 2,675 15,746 1,445

Finance and Economic Affairs 14,414 29% 22,245 45% 28,903 21,050 49,953 27,708

Housing

(58) 0% 3,011 7% 16,875 25,759 42,634 39,623

Local Government 3,435 76% 4,334 96% 3,434 1,086 4,520 186

Transport 416,566 102% 756,010 186% 389,773 17,406 407,179 (348,831)

Community Safety 2,805 39% 6,747 95% 4,305 2,809 7,114 367

Agriculture 5,270 45% 16,140 137% 10,975 829 11,804 (4,336)

SRAC 26,250 73% 26,783 74% 246 35,861 36,107 9,324

GSSC 46,089 73% 73,463 117% 11,168 51,631 62,799 (10,664)

Total 1,308,295 63% 2,421,329 116% 1,547,271 601,863 2,086,849 (334,480)

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Total capital expenditure Total spending amounts to R2,4b and represents 116%

of the adjusted budget Report shows an overspending of R334m Depts. contributing to overspending incl.

Health – R122m Transport – R344m

Depts. showing an underspending incl. Education – R69m Housing – R39m Finance – R27m

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Capital spending per dept

Health Adjusted Budget R847m Expenditure to date amounts to R969m i.e

or 114% of the budget Reason for overspending

Early delivery of equipment expected in 06/07 FY

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Education Total adjusted budget amounts to R585m Total spending R516m & represents 88% of the budget Spending during the year was slow due to procurement

challenges, but picked up in the last quarter Increase in spending due

Money transferred to IDT in Feb to build 23 schools Mobile schools purchased in January Appointed a project management company to facilitate

the process of ensuring that projects are delivered on time

Reasons for underspending Incorrect allocation of GautengOnline payments under

current objective.

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Transport and Public Works Adjusted budget – R407m Spending – R756m or 185% of adjusted

budget Overspending occurred due to

Misallocation of goods and services under capital which is being rectified.

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Housing Adjusted budget - R42,6m Actual expenditure – R3m or 7% of the

budget Reasons for underspending

Misallocation of capitalised compensation under current objective.

Late purchasing of new furniture

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Social Development Adjusted budget amounts to R13m Expenditure at the end of March equals to

R10,6m and represents 80% of the budget Reasons for underspending

Delays in ordering equipment - this is due to lack of proper planning

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Challenges moving forward

Submission of quarterly reports i.e conditional grant and infrastructure report most times either late/ partial submission/ not submitted Submissions are in most instances incomplete and inaccurate makes comparison between IYM & performance achievements difficult/

impossible Credibility of departmental projections in IYM Strengthening of monitoring and evaluation of performance by depts. Misallocations of expenditure. Depts. Currently passing journals

CFO’s offices not properly capacitated

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Provincial Treasury’s Intervention Continue to hold individual meetings with departments showing

significant underspending and overspending Conduct training and address identified gaps Create a public finance unit that will specifically focus on

monitoring the departments spending and evaluating their performance Ensuring value for money and efficiency Detailed analysis & interrogate depts. expenditure Providing guidance and advise depts. on any issues relating to budgets,

spending and delivery Identify training needs and provide it where necessary

Financially assist departments to capacitate their CFO’s offices Introduction of non-compliance strategy

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THANK YOU!!!

2005/06 fourth quarter report on conditional grants and capex

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