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Projected provincial Budget Outcome of Conditional

Grantsas at 30 September 2006

Select Committee on FinancePresentation by

Free State Provincial Treasury

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OBJECTIVES

• To brief the Select Committee on Finance on the actual and projected Conditional Grant outcomes as at 30 September 2006

– Aggregate projected expenditure– Trends in allocations and projected

expenditure of conditional grants

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2006/2007 Budget

• Breakdown of budget– Equitable Share R9,544 billion (82.1%)– Conditional Grants R1,687 billion (14.5%)– Own revenue R 395 million ( 3.4%)

Total Provincial Budget R11,626 billion

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SECOND QUARTER PROVINCIAL EXPENDITURE ANALYSIS

• Actual second quarter expenditure = R5,484 billion (47.2%)

• Total projected spending R11,994 billion (103.2%) against budget of R11,626 billion

• Net projected over expenditure amounts to R367 million (3.2%) compared to R87 million (0.7%) after first quarter– Over expenditure by 9 departments = R415

million (3.6%)– Under expenditure by 3 departments = R48

million (0.4%)

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SECOND QUARTER PROVINCIAL EXPENDITURE ANALYSIS (continue)

• Departments projecting to overspend – Premier = R1 million (0.9%)– Legislature = R12 million (16%)– Tourism = R12 million (5.2%)– Health = R167 million (5.1%)– Education = R133 000 (0%)– Public Works, etc.= R216 million (20.2%)– Safety = R1 million (2.5%)– Agriculture = R4 million (1.7%)– Sport = R3 million (2.4%)

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PROJECTED AGGREGATE EXPENDITURE AS AT 30 SEPT 06

DEPARTMENTExp until 30/9/06

Proj (Oct 06 – Mch 07)

2006/07 Total Proj exp

2006/07 Budget

Projected (Over)/Under

exp

R’m % R’m % R’m % R’m R’m %

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Premier 46 50.4 47 50.5 93 100.9 92 (1) -0.9

Provincial Legislature 38 50.6 48 65.4 86 116.0 74 (12) -16.0

Tourism 92 40.0 150 65.3 242 105.2 230 (12) -5.2

Provincial Treasury 45 37.7 68 56.9 113 94.7 120 7 5.3

Health 1,628 50.1 1,788 55.0 3,416 105.1 3,250 (166) -5.1

Education 2,544 48.3 2,728 51.7 5,272 100.0 5,272 0 0

Social Development 169 40.5 210 50.3 379 90.8 418 39 9.2

Local Gov & Housing 274 38.2 441 61.4 715 99.6 718 3 0.4

Works, Roads & Transport

462 43.3 821 76.9 1,283 120.2 1,066 (217) -20.2

Safety, Security & Liaison

13 41.3 19 61.2 32 102.5 32 (1) -2.5

Agriculture 107 47.9 120 53.8 227 101.7 223 (4) -1.7

Sport 66 49.8 69 52.5 135 102.4 131 (3) -2.4

TOTAL 5,484 47.2 6,509 56.011,99

3103.2 11,626 (367) -3.2

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AGGREGATE EXPENDITURE ON CONDITIONAL GRANTS AS AT 30 Sept 2006

• Second quarter expenditure on Conditional Grants amounts to R796 million which equals: – 47.2% of the Conditional Grant budget of

R1,687 billion;– 99.2% of received/transferred C-grant funds

amounting to R802 million;– 14.5% of total provincial second quarter

expenditure of R5,484 billion.• Departments project to spend the total

2006/07 Conditional Grant allocation

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Expenditure on C-grants as at 30 Sept 2006

Department Budget Expenditure Projections Proj ExpProj Under

exp

R’m R’m % R’m % R’m R’m %

(1) (2) (3) (4) (5) (6) (7) (8) (9)

Agriculture 28 9 31.3 19 68.7 28 0 0

Education 103 69 66.9 34 33.1 103 0 0

Health 780 385 49.4 395 50.6 780 0 0

Housing 523 217 41.5 306 58.5 523 0 0

Sport and Recreation SA

10 3 25.8 7 74.2 10 0 0

PIG 243 113 46.5 130 53.5 243 0 0

SUB-TOTAL 1,687 796 47.2 891 52.8 1,687 0 0

OIG 409 211 51.5 198 48.5 409 0 0

TOTAL 2,096 1,006 48.0 1,089 52.0 2,096 0 0

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Conditional-grants by Grant Type as at 30 Sept 2006

 Conditional Grant

Original budget

Exp ProjProjected 

Expenditure

Projected Under Exp

Exp as % of bud

Proj as % of budget

 

    R'm R'm R'm R'm R'm % %  

Agriculture  28,421 8,886 19,535 28,421 0 31.3 68.7  

  Comprehensive Agricultural Support Programme 25,306 8,050 17,256 25,306 0 31.8 68.2  

  LandCare Programme: Poverty Relief & Infrastr Dev 3,115 836 2,279 3,115 0 26.8 73.2  

Local Gov & Housing  522,601 217,187 305,414 522,601 0 41.6 58.4  

  Integrated Housing Subsidy Grant 522,601 216,780 305,821 522,601 0 41.5 58.5  

Education 162,476 123,321 39,155 162,476 0 75.9 24.1  

  Provincial Infrastructure Grant 59,268 54,283 4,985 59,268 0 91.6 8.4  

 Further Education and Training College Sector Recapitalization 30,000 30,000 0 30,000 0 100.0 0.0  

  HIV and Aids (Life Skills Education) Grant 8,424 4,812 3,612 8,424 0 57.1 42.9  

  Primary School Nutrition Programme Grant 64,784 34,226 30,558 64,784 0 52.8 47.2  

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Conditional-grants by Grant Type as at 30 Sept 2006

 Conditional Grant

Original budget

Exp ProjProjected 

ExpenditureProjected Under Exp

Exp as % of bud

Proj as % of 

budget  

    R'm R'm R'm R'm R'm % %  

Health 779,992 385,062 616,485 779,992 0 49.4 50.6  

 Health Professions Training and Development Grant 92,517 57,535 34,982 92,517 0 62.2 37.8  

  Comprehensive HIV and Aids Grant 142,265 48,604 93,661 142,265 0 34.2 65.8  

  Hospital Revitalisation Grant 45,673 21,612 24,061 45,673 0 47.3 52.7  

  National Tertiary Services Grant 458,043 246,102 211,941 458,043 0 53.7 46.3  

  Forensic Pathology Services 41,494 11,209 30,285 41,494 0 27.0 73.0  

Sport, Arts, Culture, Science and Technology  9,780 2,520 7,260 9,780 0 25.8 74.2  

 Mass Sport and Recreation Participation Programme 9,780 2,520 7,260 9,780 0 25.8 74.2  

Public Works, Roads & Transport  183,410 58,702 124,708 183,410 0 32.0 68.0  

  Provincial Infrastructure Grant 183,410 58,702 124,708 183,410 0 32.0 68.0  

Total IYM Conditional Grants 1,686,680 795,271 891,409 1,686,680 0 47.2 52.8  

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Detail on Conditional Grants per department: Agriculture

• Agriculture spent 31.3% or R8,9 million of their total Conditional Grant allocation of R28 million and project to spend the remainder of the allocation of both grants.

• Budget Outcome per grant– CASP:

• Budget = R25 million• Second quarter expenditure = R8 million (31.8%)

– LandCare Grant:• Budget = R3 million• Second quarter expenditure = R0,8 million (26.8%)

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Detail on Conditional Grants per department: Local Government and Housing

• Local Gov and Housing spent 41.5% or R216,8 million of the Housing fund allocation of R522,6 million during the first two quarters and project to spend the remaining R305,8 million by the end of the financial year.

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Detail on Conditional Grants per department: Education

• First two quarters’ expenditure by Education (including PIG) amounts to R123 million or 75.9% of their total Conditional Grants allocation of R162 million and they project to spend the remainder by the 31st of March 2007.

• Budget Outcome per grant– Further Education and Training College Sector

Recapitalization Grant:• Allocation = R30 million• Second quarter expenditure = R30 million (100%)

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Detail on Conditional Grants per department: Education (continue)

• Budget Outcome per grant (continue)– HIV and Aids Grant:

• Allocation = R8,4 million• Second quarter expenditure = R4,8 million (57.1%)

– National School Nutrition Programme Grant:• Allocation = R64,8 million• Second quarter expenditure = R34, 2 million (52.8%)

– Provincial Infrastructure Grant:• Allocation = R59 million• Second quarter expenditure = R54 million (91.6%)

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Detail on Conditional Grants per department: Health

• Health spent 49.4% or R385 million of their Conditional Grant allocation of R780 million and they project to spend the total budget by the end of the financial year.

• Budget Outcome per grant– HIV and Aids Grant:

• Allocation = R142 million• Second quarter expenditure = R48,6 million (34.2%)

– Forensic Pathology Services Grant• Allocation = R41 million• Second quarter expenditure = R11,2 million (27%)

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Detail on Conditional Grants per department: Health (continue)

• Budget Outcome per grant (continue)– Health Professions Training and Development

Grant:• Allocation = R92,5 million• Second quarter expenditure = R57,5 million (62.2%)

– Hospital Revitalisation Grant:• Allocation = R45,7 million• Second quarter expenditure = R21,6 million (47.3%)

– National Tertiary Services Grant:• Allocation = R458 million• Second quarter expenditure = R246 million (53.7%)

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Detail on Conditional Grants per department: Sport, Arts, Culture

• Sport, Arts, Culture spent 25.8% or R2,5 million of their 2006/07 allocation of R9,78 million for the Mass Sport and Recreation Participation Programme grant during the first two quarters and project to spend the remainder before the end of the financial year.

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Detail on Conditional Grants per department: Public Works, Roads and Transport

• Public Works, Roads and Transport spent 32% or R58,7 million of their Provincial Infrastructure Grant allocation amounting to R183 million after two quarters and they project to spend the total budget by the end of the financial year.

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National Treasury (Provincial Infrastructure grant)

• Second quarter expenditure of the Provincial Infrastructure grant (included in discussions per department) amounts to R113 million or 46.6% of the allocation of R242,7 million from National Treasury and projections indicate that the total allocation will be spent by the end of the financial year.

• Two departments benefit from this grant:– Public Works, Roads and Transport

• Allocation = R183,4 million (75.6%)• Second quarter expenditure = R58,7 million (32%)

– Education• Allocation = R59,3 million (24.4%)• Second quarter expenditure = R54,3 million (91.6%)

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Projected aggregate CAPITAL expenditure as at 30 Sept 06

DEPARTMENTSCapital

TransfersCapital Assets Total Capital (Over)/Under

Exp

BudR’m

ExpR’m

BudR’m

ExpR’m

BudR’m

Exp R’m

Exp as % of Bud R’m

% of Bud

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Education* 156 70 60 14 186 81 43.3 0 0

Health 0 0 163 88 163 88 54.2 (90) -55.0

Soc Development

0 0 12 4 12 4 58.0 1 6.9

Tourism 0 0 19 4 19 4 19.0 (20) -104.7

Housing 544 221 8 1 552 222 40.1 0 0.1

Public Works 0 0 281 123 281 123 43.9 (191) -68.1

Agriculture 0 0 24 11 24 11 44.2 (3) -13.5

Sport 0 0 26 15 26 15 56.9 0 0

Total 700 291 593 260 1,293 551 42.6 (303) -24.1• The budget of Education iro Capital transfers includes – R117 million transferred to Public Works of which R67 million was spent– R30 million to FET colleges of which R2,7 million was spent– About R9 million to schools – no feedback on amounts spent

• Column 3 only reflects the amount spent (R70 m) and not transferred (R147 m).

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Areas for Intervention

• Address deficiencies in capacity in different Departments• Identify gaps in infrastructure plans & improve prioritization for

2007/08 MTEF• Address deficiencies in information and analysis that supports

planning• Consider options to improve delivery this year and preparation for

next year• Identify and implement in-year interventions to ensure that:

06/07 budgets are spent Capacity to deliver of infrastructure is consistently improved

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• Quarterly Infrastructure Review Meetings now under-way

• Provincial Treasury engage with respective departments on a monthly basis

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Areas for Intervention

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THANK YOU