Provincial Treasury Western Cape NCOP Select Committee on

Provincial Treasury Western Cape NCOP Select Committee on Finance Public Hearings Conditional Grant and CAPEX 9 May 2007 1

Outline • Conditional grant, infrastructure and capital expenditure 2005/06; • 2006/07 expenditure as at 31 March 2007; • 2007/08 Business Plan process; and • Monitoring provincial expenditure. 2

Conditional Grant, Infrastructure and Capital Expenditure 2005/06 3

CG Expenditure 2005/06 Conditional Grant Expenditure – 2005/06 Adjusted budget R'000 4 th quarter expenditure R'000 % Agriculture Disaster management 18 000 16 435 91. 3% Comprehensive Agricultural Support Programme Grant 19 264 19 385 100. 6% 3 174 3 275 103. 2% National School Nutrition Programme Grant 49 321 49 318 100. 0% HIV and Aids (Life Skills Education) Grant 11 205 11 443 102. 1% 1 214 684 100. 0% Health Professions Training and Development Grant 323 278 100. 0% Hospital Revitalisation Grant 148 038 99 357 67. 1% Comprehensive HIV and Aids Grant 82 451 92 649 112. 4% Hospital Management and Quality Improvement Grant 17 608 17 937 101. 9% Forensic Pathology Services 14 583 4 392 30. 1% 4 5 288 5 078 96. 0% Land Care Programme Grant: Poverty Relief and Infrastructure Development Education Health National Tertiary Services Grant Integrated Nutrition Programme Grant

CG Expenditure 2005/06 (2) Adjusted budget R'000 4 th quarter expenditure R'000 % Housing Integrated Housing and Human Settlement Development Grant 533 249 100. 0% Human Settlement and Redevelopment Grant 29 738 18 601 62. 5% Disaster relief 24 500 17 911 73. 1% 4 002 671 3 943 583 98. 5% 236 234 236 680 100. 2% Integrated Social Development Services Grant 20 034 100. 0% HIV and Aids (Community-Based Care) Grant 6 089 100. 0% 259 757 254 895 98. 1% 2 670 2 667 99. 9% 7 021 836 6 727 521 95. 8% Social Services and Poverty Alleviation Social Assistance Transfers Grant Social Assistance Administration Grant National Treasury Provincial Infrastructure Grant Cultural Affairs and Sport Mass Sport and Recreation Participation Programme Grant 5

Capital and Infrastructure Expenditure 2005/06 - Infrastructure and capital expenditure Adjusted R 000's budget 4 th quarter expenditure R'000 % Education 373 808 362 645 97. 0% Health 263 725 216 456 82. 1% 48 194 51 545 107. 0% Transport and Public Works 1 173 815 1 166 869 99. 4% Total 1 859 542 1 797 515 96. 7% Agriculture Total R 000's Payments for capital assets available 1 443 962 4 th quarter expenditure R'000 1 479 235 % 102. 4% Infrastructure and capital expenditure was at an acceptable level at the end of the 2005/06 financial year 6

2006/07 Expenditure as at 31 March 2007 7

CG Expenditure – Local Government and Housing – Conditional Grant Expenditure as at 31 March 2007 Adjusted budget including rollovers Integrated Housing and Human Settlement Development 998 143 Transfers received 987 006 Spent by Province 768 209 spent as % of DORA 77. 0% Spent as % transfers received 77. 8% -The Department has spent 128% of original budget of R 598, 8 million. -R 372 million was received in the adjusted budget specifically for the N 2 Gateway Project. Underspending on the project is a result of: -The decision to release funds only once actual delivery on site; -Delays in the finalisation of land availability agreements; and -Amendments being made to the policy. 8

CG Expenditure - Agriculture – Conditional Grant Expenditure as at 31 March 2007 Adjuste d budget includin g rollover s Transfe rs receive d Spent by Provinc e spent as % of DORA Spent as % transfer s receive d 3 730 3 376 90. 5% 20 648 20 644 100. 0% 3 000 100. 0% Agriculture Disaster Management Grant 43 199 33 000 7 581 17. 5% 23. 0% Total 70 577 60 378 34 601 49. 0% 57. 3% Land Care Programme Comprehensive Agricultural Support Programme Provincial Infrastructure Grant 9

CG Expenditure – Agriculture (2) • Challenges to Overcome – Land Care Programme • A number a projects are in the finalisation phase • The Department is awaiting invoices so that payment can be affected • Additional money received in the adjustments estimate will be spent in 2007/08 – Agriculture Disaster Management Grant • Implementation plans are in the process of being finalised with the National Department of Agriculture. Spending will commence in 2007/08. 10

CG Expenditure - Education – Conditional Grant Expenditure as at 31 March 2007 Adjusted budget Transfers received Spent by Province spent as % of DORA Spent as % transfers received FET College Sector Recapitalisation 70 000 100. 0% HIV and Aids (Life Skills Education) 11 870 11 872 100. 0% National School Nutrition Programme 48 313 45 956 95. 1% Provincial Infrastructure Grant 126 829 120 068 94. 7% Total 257 012 247 896 96. 5% 11

CG Expenditure – Education (2) • Challenges to Overcome – National School Nutrition Programme • Delay in payment – payment went through on 4 April 2007. – Provincial Infrastructure Grant • Forced closure took place on 10 April 2007. • Journals to correct erroneous allocations took place till 2 May 2007. • Final spending R 126, 705 million, or 99, 9 per cent of adjusted budget. 12

CG Expenditure - Health – Conditional Grant Expenditure as at 31 March 2007 Adjuste d budget includin g rollover s Transfe rs receive d Spent by Provinc e spent as % of DORA Spent as % transfer s receive d 1 272 640 100. 0% Health Professions Training and Development 323 278 100. 0% Comprehensive HIV and Aids 133 170 132 016 99. 1% 85 734 77 405 44 168 51. 5% 57. 1% 178 256 149 703 177 652 99. 7% 118. 7% 61 829 61 467 99. 4% 2 054 907 2 018 025 2 011 221 97. 9% 99. 7% National Tertiary Services Forensic Pathology Services Hospital Revitalisation Provincial Infrastructure Grant Total 13

CG Expenditure – Health (2) • Forensic Pathology Services – Constraints in the appointing of staff for the Forensic Pathology Services Unit – R 26, 8 million has been budgeted for the construction of six new Forensic Pathology Laboratories. There are currently four contractors on site and one project is out to tender. 14

CG Expenditure – Transport and Public Works – Conditional Grant Expenditure as at 31 March 2007 Adjusted budget including rollovers Provincial Infrastructure Grant Transfers received 231 032 229 967 Spent by Province 188 975 spent as % of DORA Spent as % transfers received 81. 8% 82. 2% Challenges to overcome • Two projects are in the design and feasibility phase • The remaining projects are at least 50% complete with one project being in the retention phase. 15

CG Expenditure – Cultural Affairs and Sport – Conditional Grant Expenditure as at 31 March 2007 Adjusted budget Mass sport and Recreation Participation Programme 12 101 Transfers received 12 100 Spent by Province 11 351 spent as % of DORA 93. 8% Spent as % transfers received 93. 8% • Challenges to overcome – Mass Sport and Recreation Participation Programme • The roll out of the School Mass Participation Programme was slow as the Department had to establish training of sports assistants prior to their placement in their respective schools. • The Department did not have a dedicated unit to roll out clusters which resulted in delays. • A training and recruitment team has been put in place to fast track the establishment of clusters and the placement of sport assistants in their respective teams. 16

Infrastructure and Capital Expenditure Infrastructure and capital expenditure as at 31 March 2007 Adjusted R 000's budget R'000 % Education 379 222 333 447 87. 9% Health 371 893 342 588 92. 1% 50 229 45 653 90. 9% Transport and Public Works 1 485 140 1 439 027 96. 9% Total 2 286 484 2 160 715 94. 5% Agriculture Total R 000's Payments for capital assets available 1 785 055 R'000 1 709 970 % 95. 8% *Infrastructure expenditure includes maintenance which is recorded as current expenditure in SCOA 17

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). 18

Conditional Grant Business Plans – All business plans for the 2007/08 financial year have been approved 19

Monitoring Provincial Expenditure 20

Monitoring Provincial Expenditure • Continuous engagements with departments in a cooperative manner to jointly seek solutions and prevent fiscal dumping; • 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. 21

Discussion 22