Presentation to the Standing Committee on Appropriations SCo

Presentation to the Standing Committee on Appropriations (SCo. A) Response on the 2011 Adjustment Appropriation Bill 15 November 2011

RESPONSE TO CONCERN 1 SPENDING AT THE END OF THE SECOND QUARTER WAS AT 30. 3 PERCENT WHICH IS BELOW THE 50 PER CENT BENCHMARK 2

Reasons for the quarter 2 under expenditure • Slow pace in filling of vacant posts as well as the Occupational Specific Dispensation (OSD) • Late submission of invoices by big service providers • Accelerate Community Infrastructure Programme (ACIP) – Difference in the financial years between national and local government (resulting in the delays in the appointment of implementing agents and finalising the Mo. Us) – Lack of capacity at municipal level • Delays in implementing Masibambane projects • Delays in the transfer of funds to municipalities • Delays in Regional bulk infrastructure projects 3

RESPONSE TO CONCERN 2 REQUEST FOR A ROLLOVER AMOUNT OF R 145. 8 MILLION DESPITE THE UNDER SPENDING 4

Reasons for the R 145. 8 million rollover request Description Rollover R 000 Construction of boreholes Supply and installation of sewerage effluent pumps Regional Bulk Infrastructure: Indirect grant Development Trust: Rainwater harvesting tanks Water schemes: Lephalale Municipality (Limpopo) Fleet management services Drought relief in the Ndlambe Municipality Masibambane III project TOTAL Spent R 000 Available Spent R 000 % Comments 26 000 5 200 20 800 20 The project is underway and 100% spending is anticipated 2 000 - 10 592 9 699 893 7 000 - 3 150 12 922 - 0 Funds to be transferred in December once the government gazette has been published 100 All funds have been spent 9 933 - 100 All funds have been spent 74 231 5 965 68 266 145 828 52 719 91 109 100 All funds have been spent 92 All funds have been committed, the department is in the process of finalising outstanding payments 100 All funds have been spent 8 Spending is now underway and indications are that most of the funds will be spent 36 5

RESPONSE TO CONCERN 3 SHIFTING OF FUNDS FROM THE TRANSFER BUDGET (8. 6 PER CENT) IN PROGRAMME 3 AND MORE THAN 4 PER CENT FROM PROGRAMME 4 TO FUND CAPITAL PROJECTS WHICH IS A VIOLATION OF SECTION 43(C) OF THE PFMA 6

Reasons for the shifting of funds • An amount of R 203 million for the construction of the Nandoni Dam pipeline was erroneously allocated to programme 3 (Infrastructure) in the ENE instead of allocating it to programme 4 (Regional management). • This error was communicated to the National treasury and hence the shifting of funds to correct this error and to ensure the true reflection of reporting 7

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