1

Outcome of Conditional Grants & Capital Expenditure as at

31 December 2006[Section 32 of PFMA]

Select Committee on Finance

National Council of Provinces

Presented by:

Intergovernmental Relations and Public FinanceNational Treasury

February 2007

2

Key priorities for 2006 MTEF (1)

• Education– Reduce backlog in school equipment;

– Expand Grade R;

– Facilitate teacher development and HRM systems;

– Extend new curriculum to grades 10-12; and

– Implement norms and standards for school funding, special schools and expand information management systems.

3

Provincial Social Services (2)

Table: Provincial Social Services Expenditure as at 31 December 2006

Education 80 238 155 80 873 734 58 020 188 72,3% -635 579 – -0,8% 44,1% 57,9% 52 962 445 9,5%

Health 53 230 283 53 790 743 38 685 905 72,7% -560 460 – -1,1% 29,4% 38,6% 33 488 006 15,5%

Social Development 5 321 680 5 255 525 3 540 595 66,5% – 66 155 1,2% 2,7% 3,5% 2 930 246 20,8%

Total 138 790 118 139 920 001 100 246 688 72,2% -1 196 039 66 155 -0,8% 76,1% 100,0% 89 380 697 12,2%

Net -1 129 884

Year-on-year

growth(Over) Under

% (Over) / under of adjusted budget

% share of total

provincial expenditure

2005/06: Actual as at

31 December 2006

R thousand

% share of total Social

Services expenditure

Adjusted budget

Projected Outcome

Actual as at 31 December

2006

Actual as % of adjusted

budget

4

Education (1)

• Spending at R58,0bn or 72,3% against R80,2bn adjusted budget, projecting to overspend by R635,6m (mostly personnel)– Increase of R5,1bn or 9,5% compared to the previous year– Low rate of education spending in GP (68,8%) and MP (71,5%) – KZN (75,2%) and NC (75,1%) reflects the highest rate of

spending in education • Education Personnel spending at R46,6bn or 74,1%

(R62,9bn adjusted budget)– Projecting to overspend by R518,7m

• Goods and services (mostly LSM) at R5,1bn or 56,0% (R9,0bn adjusted budget)

• Capital spending at R2,4bn or 61,4% – Significant increase of R834,7m or 54,9% compared to

spending last year– Wide fluctuations compared to last year 3rd quarter y-to-d– Low rate of capital spending in WC (49,5%) and KZN (50,8%) – FS (76,6%) and NC (73,6%) reflects the highest rate of capital

spending in education

5

Table: Provincial Education Expenditure as at 31 December 2006

Eastern Cape 13 122 093 13 122 087 9 508 018 72,5% – 6 0,0% 49,7% 62,9% 8 583 596 10,8%

Free State 5 333 257 5 333 393 3 895 443 73,0% -136 – 0,0% 44,8% 58,4% 3 604 749 8,1%

Gauteng 12 458 959 12 829 840 8 565 940 68,8% -370 881 – -3,0% 36,5% 49,1% 7 769 332 10,3%

Kw aZulu-Natal 16 136 078 16 264 847 12 138 937 75,2% -128 769 – -0,8% 45,3% 56,9% 10 801 115 12,4%

Limpopo 11 318 098 11 459 759 8 167 470 72,2% -141 661 – -1,3% 48,6% 65,6% 7 541 615 8,3%

Mpumalanga 6 325 857 6 314 328 4 523 017 71,5% – 11 529 0,2% 49,9% 65,5% 4 329 537 4,5%

Northern Cape 1 647 976 1 653 643 1 237 008 75,1% -5 667 – -0,3% 37,0% 51,4% 1 189 552 4,0%

North West 6 779 976 6 779 976 4 849 326 71,5% – – 0,0% 45,4% 64,3% 4 365 918 11,1%

Western Cape 7 115 861 7 115 861 5 135 029 72,2% – – 0,0% 37,4% 49,5% 4 777 031 7,5%

Total 80 238 155 80 873 734 58 020 188 72,3% -647 114 11 535 -0,8% 44,1% 57,9% 52 962 445 9,5%

Net -635 579

R thousand

Adjusted budget

Projected Outcome

Actual as at 31 December

2006

Actual as % of adjusted

budget(Over) Under

% (Over) / under of adjusted budget

% share of Education

to total provincial

expenditure

% share of Education

to total Social serv expenditure

2005/06: Actual as at

31 December 2006

Year-on-year

growth

Education (2)

6

Table: Provincial Public Ordinary School Education Expenditure (Programme 2) as at 31 December 2006

Eastern Cape 11 169 342 11 169 342 8 238 712 73,8% – – 0,0% 43,1% 86,7% 7 469 595 10,3%

Free State 4 146 038 4 148 114 3 048 181 73,5% -2 076 – -0,1% 35,1% 78,2% 2 820 914 8,1%

Gauteng 9 761 527 10 100 407 6 622 878 67,8% -338 880 – -3,5% 28,2% 77,3% 6 111 948 8,4%

Kw aZulu-Natal 13 994 239 14 284 266 10 660 032 76,2% -290 027 – -2,1% 39,8% 87,8% 9 453 656 12,8%

Limpopo 9 718 978 9 860 639 6 993 279 72,0% -141 661 – -1,5% 41,7% 85,6% 6 281 318 11,3%

Mpumalanga 5 279 755 5 260 121 3 746 839 71,0% – 19 634 0,4% 41,3% 82,8% 3 638 152 3,0%

Northern Cape 1 283 844 1 283 168 954 250 74,3% – 676 0,1% 28,5% 77,1% 918 280 3,9%

North West 5 734 509 5 734 509 4 172 556 72,8% – – 0,0% 39,1% 86,0% 3 787 830 10,2%

Western Cape 5 796 342 5 796 342 4 200 146 72,5% – – 0,0% 30,6% 81,8% 3 978 072 5,6%

Total 66 884 574 67 636 908 48 636 873 72,7% -772 645 20 310 -1,1% 36,9% 83,8% 44 459 765 9,4%

Net -752 335

% share of POSE to

total provincial

expenditure

% share of POSE to

total Education

expenditure

2005/06: Actual as at

31 December 2006

Year-on-year

growth

Actual as % of adjusted

budget(Over) Under

% (Over) / under of adjusted budget

R thousand

Adjusted budget

Projected Outcome

Actual as at 31 December

2006

Education: Public Ordinary Schools

7

Table: Provincial Personnel Expenditure: Education as at 31 December 2006

Eastern Cape 10 447 980 10 447 980 8 037 130 76,9% – – 0,0% 65,1% 84,5% 7 501 149 7,1%

Free State 4 163 791 4 162 268 3 104 491 74,6% – 1 523 0,0% 57,5% 79,7% 2 931 069 5,9%

Gauteng 9 726 166 9 952 339 6 721 139 69,1% -226 173 – -2,3% 56,7% 78,5% 6 221 440 8,0%

Kw aZulu-Natal 13 084 149 13 160 107 9 700 779 74,1% -75 958 – -0,6% 60,1% 79,9% 8 912 810 8,8%

Limpopo 9 008 030 9 239 937 6 866 899 76,2% -231 907 – -2,6% 63,2% 84,1% 6 613 592 3,8%

Mpumalanga 4 611 047 4 598 757 3 348 559 72,6% – 12 290 0,3% 62,8% 74,0% 3 242 518 3,3%

Northern Cape 1 315 031 1 313 531 983 763 74,8% – 1 500 0,1% 54,8% 79,5% 928 222 6,0%

North West 5 185 489 5 185 489 3 939 868 76,0% – – 0,0% 61,6% 81,2% 3 698 228 6,5%

Western Cape 5 388 030 5 388 025 3 940 761 73,1% – 5 0,0% 54,2% 76,7% 3 727 476 5,7%

Total 62 929 713 63 448 433 46 643 389 74,1% -534 038 15 318 -0,8% 60,3% 80,4% 43 776 504 6,5%

Net -518 720

% share of Education Personnel

to total personnel

expenditure

% share of Education personnel

to total Education

expenditure

2005/06: Actual as at

31 December 2006

Year-on-year

growth

Actual as % of adjusted

budget(Over) Under

% (Over) / under of adjusted budget

R thousand

Adjusted budget

Projected Outcome

Actual as at 31 December

2006

Education: Personnel

8

Table: Provincial Capital Expenditure: Education as at 31 December 2006

Eastern Cape 664 081 664 081 435 488 65,6% – – 0,0% 35,1% 4,6% 217 737 100,0%

Free State 188 782 189 283 144 636 76,6% -501 – -0,3% 21,5% 3,7% 31 112 364,9%

Gauteng 723 924 803 570 415 020 57,3% -79 646 – -11,0% 26,6% 4,8% 262 457 58,1%

Kw aZulu-Natal 695 759 709 068 353 280 50,8% -13 309 – -1,9% 16,5% 2,9% 191 512 84,5%

Limpopo 494 640 469 918 344 208 69,6% – 24 722 5,0% 28,3% 4,2% 265 266 29,8%

Mpumalanga 352 127 332 493 230 491 65,5% – 19 634 5,6% 30,9% 5,1% 115 577 99,4%

Northern Cape 26 194 26 465 19 275 73,6% -271 – -1,0% 5,2% 1,6% 15 131 27,4%

North West 418 341 418 341 277 482 66,3% – – 0,0% 27,7% 5,7% 184 906 50,1%

Western Cape 274 028 274 028 135 714 49,5% – – 0,0% 13,0% 2,6% 237 231 -42,8%

Total 3 837 876 3 887 247 2 355 594 61,4% -93 727 44 356 -1,3% 23,6% 4,1% 1 520 929 54,9%

Net -49 371

R thousand

Adjusted budget

Projected Outcome

Actual as at 31 December

2006

Actual as % of adjusted

budget(Over) Under

% (Over) / under of adjusted budget

% share of Education Capital to

total Capital

expenditure

% share of Capital to

total Education

expenditure

2005/06: Actual as at

31 December 2006

Year-on-year

growth

Education: Capital

9

Table: Provincial Non-Personnel, Non-Capital Expenditure: Education as at 31 December 2006

Eastern Cape 2 010 032 2 010 026 1 035 400 51,5% – 6 0,0% 5,4% 10,9% 864 710 19,7%

Free State 980 684 981 842 646 316 65,9% -1 158 – -0,1% 7,4% 16,6% 642 568 0,6%

Gauteng 2 008 869 2 073 931 1 429 781 71,2% -65 062 – -3,2% 6,1% 16,7% 1 285 435 11,2%

Kw aZulu-Natal 2 356 170 2 395 672 2 084 878 88,5% -39 502 – -1,7% 7,8% 17,2% 1 696 793 22,9%

Limpopo 1 815 428 1 749 904 956 363 52,7% – 65 524 3,6% 5,7% 11,7% 662 757 44,3%

Mpumalanga 1 362 683 1 383 078 943 967 69,3% -20 395 – -1,5% 10,4% 20,9% 971 442 -2,8%

Northern Cape 306 751 313 647 233 970 76,3% -6 896 – -2,2% 7,0% 18,9% 246 199 -5,0%

North West 1 176 146 1 176 146 631 976 53,7% – – 0,0% 5,9% 13,0% 482 784 30,9%

Western Cape 1 453 803 1 453 808 1 058 554 72,8% -5 – 0,0% 7,7% 20,6% 812 324 30,3%

Total 13 470 566 13 538 053 9 021 204 67,0% -133 018 65 530 -0,5% 6,9% 15,5% 7 665 012 17,7%

Net -67 488

% share of NPNC to

total provincial

expenditure

% share of NPNC to

total Education

expenditure

2005/06: Actual as at

31 December 2006

Year-on-year

growth

Actual as % of adjusted

budget(Over) Under

% (Over) / under of adjusted budget

R thousand

Adjusted budget

Projected Outcome

Actual as at 31 December

2006

Education: Non-personnel Non-capital

10

Payments for Capital Assets trends (Capital Expenditure)

11

• Education capital spending at R2,4bn or 61,4%

– Increase of R834,7m or 54,9% compared to spending last year

– Wide fluctuations compared to last year 3rd quarter

– Low rate of education capital spending in WC (49,5%) and KZN (50,8%)

– FS (76,6%) and NC (73,6%) reflects the highest rate of capital spending in education

Payments for Capital Assets (Education and Health)

12

Table: Provincial Capital Expenditure: Education as at 31 December 2006

Eastern Cape 664 081 664 081 435 488 65,6% – – 0,0% 35,1% 4,6% 217 737 100,0%

Free State 188 782 189 283 144 636 76,6% -501 – -0,3% 21,5% 3,7% 31 112 364,9%

Gauteng 723 924 803 570 415 020 57,3% -79 646 – -11,0% 26,6% 4,8% 262 457 58,1%

Kw aZulu-Natal 695 759 709 068 353 280 50,8% -13 309 – -1,9% 16,5% 2,9% 191 512 84,5%

Limpopo 494 640 469 918 344 208 69,6% – 24 722 5,0% 28,3% 4,2% 265 266 29,8%

Mpumalanga 352 127 332 493 230 491 65,5% – 19 634 5,6% 30,9% 5,1% 115 577 99,4%

Northern Cape 26 194 26 465 19 275 73,6% -271 – -1,0% 5,2% 1,6% 15 131 27,4%

North West 418 341 418 341 277 482 66,3% – – 0,0% 27,7% 5,7% 184 906 50,1%

Western Cape 274 028 274 028 135 714 49,5% – – 0,0% 13,0% 2,6% 237 231 -42,8%

Total 3 837 876 3 887 247 2 355 594 61,4% -93 727 44 356 -1,3% 23,6% 4,1% 1 520 929 54,9%

Net -49 371

R thousand

Adjusted budget

Projected Outcome

Actual as at 31 December

2006

Actual as % of adjusted

budget(Over) Under

% (Over) / under of adjusted budget

% share of Education Capital to

total Capital

expenditure

% share of Capital to

total Education

expenditure

2005/06: Actual as at

31 December 2006

Year-on-year

growth

Education: Capital

13

Monthly Exp and Projections: Payments for Capital Assets

MONTHLY EXPENDITURE ON PAYMENTS FOR CAPITAL ASSETS FOR 2006/07

-

100 000

200 000

300 000

400 000

500 000

600 000

700 000

800 000

900 000

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Public Works,Roads andTransport

Health

Education

ACTUAL AS AT 31 DECEMBER 2006 PROJECTIONS

14

Conditional Grants

15

Office Of The Premier

Provincial Legislature

Health

Social Development

Roads And Public Works

Education

Housing,Local Government And Traditional Affairs

Agriculture

Economic Affairs,Environment And Tourism

Transport

11

Provincial Treasury

13

Safety And Liaosn

16

17

18

Conditional Grants : Flow of information

Provincial TreasurySubmit a report within 22 days after the end of each month as part of consolidated monthly

report.

National Treasury

National departmentSubmit a report within 20 days after

the end of each month.

Provincial departmentSubmit a report within 15 days after the end of each month.

Legislation

* Public Finance Management Act.

* Division of Revenue Act.

Conditional Grants – Flow of Info

16

Conditional Grants (2)

• Spending on the Further Education and Training College Sector Recapitalisation grant is at 97,0 per cent or R456,0 million and reflects actual transfers from the provincial education departments to the FET colleges

• FET colleges expenditure is at 41,1 per cent or R187,4 million of the R456,0 million transferred from the provincial education departments

• Expenditure by college published for the first time

– Information provided by national Department of Education

17

Table: Provincial Conditional Grants Expenditure as at 31 December 2006

Agriculture 344 500 56 638 104 335 505 473 275 577 53 672 32,8%

Agricultural Disaster Management Grant – 45 403 55 871 101 274 – 24 101 23,8%1. Comprehensive Agricultural Support Programme 300 000 – 41 948 341 948 239 973 169 444 49,6%

Land Care Programme Grant: Poverty Relief and Infrastructure Development44 500 11 235 6 516 62 251 35 604 29 571 47,5%

Education 1 712 507 – 125 946 1 838 453 1 396 488 1 441 005 78,4%

Further Education and Training College Sector Recapitalisation470 000 – – 470 000 470 000 456 000 97,0%

HIV and Aids 144 471 – 1 701 146 172 102 958 95 384 65,3%

National School Nutrition Programme 1 098 036 – 124 245 1 222 281 823 530 889 621 72,8%

Health 10 033 366 173 176 430 435 10 636 977 7 559 192 2 552 008 62,0%

Comprehensive HIV and Aids 1 567 214 49 000 56 994 1 673 208 1 187 659 1 269 755 75,9%

Forensic Pathology Services 525 176 36 500 62 246 623 922 393 884 168 153 27,0%1. Health Professions Training and Development 1 520 180 – 18 202 1 538 382 1 140 134 1 114 598 72,5%

Hospital Revitalisation 1 439 647 87 676 292 179 1 819 502 1 101 642 1 114 100 61,2%1. National Tertiary Services 4 981 149 – 814 4 981 963 3 735 873 3 659 946 73,5%

1.

Actual as % of budget ( excluding Schedule 4

grants)

Spending of these grants is subsumed in the spending of a range of programmes across provincial departments and therefore no reporting is required on these grants.

R thousand

Division of Revenue Act, 2006

(Act No. 2 of 2006)

Other Gazetted Amounts

Provincial roll-overs

Total available 2006/07

Transferred from

National to province

Actual as at 31 December

2006

Conditional Grants (3)

18

Table: Selected Conditional Grants Spending Rate as at 31 December 2006

Number of provinces spent less than 60%

Number of provinces spent between 60% and

70% (inclusive)

Number of provinces spent more than 70%

Agriculture

Agricultural Disaster Management 2 EC, WC

Land Care Programme: Poverty Relief and Infrastructure Development7 EC, FS, GT, KZN, MPU, NW, WC 2 LIM, NC, Education

Further Education and Training College Sector Recapitalisation1 NW, 8 EC, FS, GT, KZN, LIM, MPU, NC, WC

HIV and AIDS (Life Skills Education) 4 GT, KZN, LIM, NC, 1 NW, 4 EC, FS, MPU, WC

National School Nutrition Programme 1 EC, 1 FS, 7 GT, KZN, LIM, MPU, NC, NW, WC Health

Comprehensive HIV and AIDS 5 FS, KZN, LIM, MPU, NC, 4 EC, GT, NW, WC

Forensic Pathology Services 8 EC, FS, GT, KZN, MPU, NC, NW, WC 1 LIM,

Hospital Revitalisation 3 GT, KZN, NC, 2 FS, NW, 4 EC, LIM, MPU, WC Housing

Integrated Housing and Human Settlement Development5 EC, FS, GT, LIM, MPU, 1 WC 3 KZN, NC, NW, Sport and Recreation South Africa

Mass Sport and Recreation Participation Programme4 GT, LIM, NW, WC 4 EC, FS, KZN, NC, 1 MPU, Trade and Industry

Industrial Development Zones 1 EC Transport

Gautrain Rapid Rail Link 1 GT Percentages represent actual expenditure of adjusted budget as published in the Division or Revenue Act, 2006 (Act No.2 of 2006) and subsequent gazettes.

Conditional Grants: Spending Rates

19

Education GrantsFurther Education and Training College Sector

Recapitalisation Grant

• Objectives (Schedule 5 Grant):– To recapitalise the 50 public FET Colleges to improve their

capacity to contribute to skills development training in the country

• 3rd Quarter Expenditure:– FET College Sector Recap grant reflects transfers to

colleges– Provincial education transferred R456m or 97% to the FET

Colleges of the available R470,0m allocation – Spending of FET colleges published in Section 32 for the first

time - R187,4m

• Service Delivery Outcome:– Department / Sector to respond

20

FET Recap

Province

R thousandEastern Cape 61,000 61,000 100.0% 100.0% 61,000 - Free State 30,000 30,000 100.0% 100.0% 30,000 - Gauteng 106,000 106,000 100.0% 100.0% 106,000 - KwaZulu-Natal 90,000 90,000 100.0% 100.0% 90,000 - Limpopo 43,000 43,000 100.0% 100.0% 43,000 - Mpumalanga 32,000 32,000 100.0% 100.0% 32,000 - Northern Cape 10,000 10,000 100.0% 100.0% 10,000 - North West 28,000 14,000 100.0% 50.0% 28,000 - Western Cape 70,000 70,000 100.0% 100.0% 70,000 - Total 470,000 456,000 100.0% 97.0% 470,000 -

% Actual payments

of total available

Projected outcome for

financial year

Projected (over)/under

Provincial actual

payments

% Transferred of national allocation

Total available

21

Education GrantsNational School Nutrition Programme Grant

• Objective (Schedule 5 Grant):– To contribute to enhanced learning capacity through school

feeding

• 3rd Quarter Expenditure:– Education spent R889,6m or 72,8% of the R1,2bn adjusted

allocation (includes provincial roll-overs)– Transfers received amounted to 75,0% of national allocation– Highest spending: NW (87,1%); LP (85,9%) and MP (74,4%)– Lowest spending: EC (59,2%); FS (64,1%) and GP (70,5%)

• Service Delivery Outcome:– Department / Sector to respond

22

National School Nutrition programme

Province

R thousandEastern Cape 266,107 157,612 75.0% 59.2% 267,218 (1,111) Free State 72,672 46,608 75.0% 64.1% 72,672 - Gauteng 99,921 70,413 75.0% 70.5% 99,921 - KwaZulu-Natal 315,372 233,141 75.0% 73.9% 315,372 - Limpopo 202,039 173,488 75.0% 85.9% 212,698 (10,659) Mpumalanga 84,549 62,909 75.0% 74.4% 84,549 - Northern Cape 31,910 22,844 75.0% 71.6% 31,909 1 North West 101,398 88,276 75.0% 87.1% 101,398 - Western Cape 48,313 34,330 75.0% 71.1% 48,313 - Total 1,222,281 889,621 75.0% 72.8% 1,234,050 (11,769)

% Transferred of national allocation

% Actual payments

of total available

Projected outcome for

financial year

Projected (over)/under

Total available

Provincial actual

payments

23

Education GrantsHIV and Aids Grant (Life Skills Education)

• Objectives (Schedule 5 Grant):– To coordinate and support the structured integration of life

skills and HIV and Aids programmes across all learning areas in the school curriculum

– To ensure access to an appropriate and effective, integrated system of prevention, care and support for children infected and affected by HIV and Aids

– To deliver life skills, sexuality and HIV and Aids education programmes in primary and secondary schools

• 3rd Quarter Expenditure:– Education spent R95,4m or 65,3% of the R146,2m adjusted

allocation (includes provincial roll-overs)– Transfers received amounted to 71,3% of national allocation– Highest spending: FS (91,9%); MP (82,0%) and EC (81,8%)– Lowest spending: LP (46,9%); GP (55,2%) and NC (55,5%)

• Service Delivery Outcome:– Department / Sector to respond

24

HIV/AIDS (Education)

Province

R thousandEastern Cape 25,805 21,097 75.0% 81.8% 25,805 - Free State 8,865 8,149 75.0% 91.9% 8,865 - Gauteng 20,012 11,040 75.0% 55.2% 20,012 - KwaZulu-Natal 32,994 18,728 75.0% 56.8% 32,994 - Limpopo 21,594 10,128 50.0% 46.9% 20,668 926 Mpumalanga 10,936 8,964 75.0% 82.0% 10,936 - Northern Cape 2,747 1,525 75.0% 55.5% 2,747 - North West 11,349 6,843 75.0% 60.3% 11,349 - Western Cape 11,870 8,910 75.0% 75.1% 11,870 - Total 146,172 95,384 71.3% 65.3% 145,246 926

% Actual payments

of total available

Projected outcome for

financial year

Projected (over)/under

Provincial actual

payments

% Transferred of national allocation

Total available

25

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