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Provincial Budgets and Expenditureas at 30 June 2009

(2009/10 Financial Year)[Section 32 of PFMA]

Select Committee on Finance and Appropriations

National Council of Provinces

Presented by:Intergovernmental RelationsNational Treasury

2 September 2009

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Key highlights (1)• The presentation covers provincial spending as at 30 June 2009 (first quarter)

– Based on Section 40(4) PFMA reports (IYM) submitted by PTs– Published in Government Gazette on 30 July 2009– Press Release published on 14 August 2009– Provincial spending for the first quarter of 2009/10 is at 24.9% or R72.4bn of their

main budgets of R290.6bn• Provincial projected overspending of R4.7 billion in all 9 provinces

– Should be viewed against anticipated roll-overs, additional adjustments, etc.

• Education budgets remain largest item of total provincial budgets (40.8%)• Health at 28.3% of total provincial budgets• Social Development 3.2% of total provincial budgets

– 4 provinces projecting to overspend their education budgets (EC, LP, NC and NW)• KZN and MP projecting to underspend

– 7 provinces projecting to overspend their health budgets (EC – R727.9m, KZN – R486m, LP – R478.9m, MP – R350.3m)

– Low spending rate recorded for social development (21.2%)• However, 2 provinces (NC, NW) projecting to overspend by R53.6m

– Personnel – Provinces spent R38.2bn (24.1%)• Projected overspending of R3.4bn in 7 provinces

– Capital - Provinces spent R5.4bn or 23.5% which is 32.5% more than 2008/09– Spending against budgets on conditional grants is lower than the total provincial

spending average

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Key highlights (2)• Spending in social services sectors:

– Education at R30.2bn (25.5%) – Health at R20.9bn (25.4%) – Social Development at R2bn (21.2%)

• Spending in non-social services sectors:– Agriculture at R1.8bn (24.4%) – Housing & Local Government at R4.5bn (25.8%) – Pub. Works, Roads & Transport at R8.3bn

(23.3%)– Sport, Arts & Culture at R793.7m (22.2%)

• Personnel spending is at R38.2bn (24.1%)• Capital expenditure is at R5.4bn (23.5%)

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Provincial Aggregated Expenditure (2)

Table: Provincial Aggregated Budgets and Expenditure as at 30 June 2009

Eastern Cape 42 634 734 43 454 048 11 274 171 26.4% -819 314 – -1.9% 15.6% 1 699 043 9 575 128 17.7%

Free State 18 373 982 18 588 313 4 199 691 22.9% -214 331 – -1.2% 5.8% 193 972 4 005 719 4.8%

Gauteng 55 259 121 55 831 898 15 010 975 27.2% -572 777 – -1.0% 20.7% 3 219 544 11 791 431 27.3%

Kw aZulu-Natal 60 462 953 60 626 456 14 606 979 24.2% -163 503 – -0.3% 20.2% 1 869 493 12 737 486 14.7%

Limpopo 34 475 750 36 289 248 8 051 707 23.4% -1 813 498 – -5.3% 11.1% 1 648 609 6 403 098 25.7%

Mpumalanga 22 545 454 22 753 424 5 721 113 25.4% -207 970 – -0.9% 7.9% 1 250 231 4 470 882 28.0%

Northern Cape 7 940 758 8 174 700 1 848 101 23.3% -233 942 – -2.9% 2.6% 182 022 1 666 079 10.9%

North West 19 866 210 20 357 526 4 847 793 24.4% -491 316 – -2.5% 6.7% 1 036 601 3 811 192 27.2%

Western Cape 29 034 342 29 198 248 6 794 116 23.4% -163 906 – -0.6% 9.4% 1 506 549 5 287 567 28.5%

Total 290 593 304 295 273 861 72 354 646 24.9% -4 680 557 – -1.6% 100.0% 12 606 064 59 748 582 21.1%

Actual payments

as % of main

budgetR thousand

Main budgetProjected outcome

Actual payments as

at 30 June 2009

Year-on-year

growth(Over) Under

% (Over)/ under of

main budget

% share of total

provincial expenditure

2008/09: Outcome as at 30 June

2008

Year-on-year

increase

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Provincial forecasting trends: 2005/06 - 2009/10

Table: Provincial forecast trends for 2005/06 - 2009/10 financial years

2005/06 2006/07 2007/08 2008/09 2009/10

Actual expenditure

as % of appro-

priation 1

Pre-audited under/ over(-)

Actual expenditure

as % of appro-

priation 1

Pre-audited under/ over(-)

Actual expenditure

as % of appro-

priation 1

Pre-audited under/ over(-)

Actual expenditure

as % of appro-

priation 1

Preliminary under/ over(-)

Actual expenditure

as % of appro-

priation 1

Projected under/ over(-)

30-Apr 6.0% 175 946 6.1% 496 753 6.1% -44 831 7.0% -1 021 993 7.7% -838 105

31-May 14.2% -55 993 13.5% -440 104 13.8% -419 958 16.1% -2 773 348 16.3% -1 483 142

30-Jun 21.9% -1 096 630 21.0% -2 155 541 20.8% -839 278 24.1% -7 062 922 24.9% -4 680 557

31-Jul 30.3% -885 642 28.8% -3 063 566 29.4% -620 351 33.4% -9 998 067

31-Aug 38.4% -2 118 969 37.0% -3 949 402 38.1% -2 349 081 42.7% -10 532 856

30-Sep 46.8% -2 944 880 45.2% -4 341 023 46.0% -3 805 224 51.8% -13 711 879

31-Oct 55.0% -4 203 042 53.5% -5 620 306 54.7% -4 026 009 61.0% -17 396 000

30-Nov 62.1% 34 486 60.7% -1 129 940 62.7% -1 564 437 67.6% -9 951 175

31-Dec 70.7% 464 602 69.9% -1 034 900 71.6% -1 102 337 76.8% -10 935 920

31-Jan 78.5% 2 326 965 77.7% 795 246 79.4% 675 416 84.4% -8 309 904

28-Feb 86.9% 3 996 837 86.2% 2 358 851 88.7% 1 692 871 92.3% -5 574 434

31-Mar 98.0% 4 416 057 98.7% 2 398 845 98.9% 2 421 330 101.4% -3 585 159

R thousand

1. The actual expenditure as at 30 November to 31 March is compared with the adjusted appropriation.

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Provincial Monthly Expenditure

PROVINCIAL MONTHLY EXPENDITURE AND PROJECTIONS (2009/10)

22 000 000

22 500 000

23 000 000

23 500 000

24 000 000

24 500 000

25 000 000

25 500 000

26 000 000

26 500 000

27 000 000

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

ACTUAL AS AT30 JUNE 2009

PROJECTIONS

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Sport, Arts and Culture• Provincial spending totalled R793.7m or 22.2% of R3.6bn Sport,

Arts and Culture (SAC) main budgets– Increase of R96.3m or 13.8% over outcome last year (first

quarter)– Low rate of spending in NC (15.5%) and MP (15.9%) – FS (31.1%) and EC (30%) reflects the highest rate of spending

in SAC• Projected under-expenditure of R154m in 3 provinces

– KZN (R128.9m), EC (R16m), MP (R9.1m)

• SAC Personnel spending at R247.8m or 21% (R1.2bn main budget)– Projected underspending of R19m in 4 provinces

• SAC capital spending at R31.7m or 10.7% – Decrease of R8.5m or 21.1% compared to outcome last year

(first quarter)– Low rate of capital spending in NW (1.2%) and KZN (9.4%) – GP (121.7%??) and MP (15%) reflects the highest rate of

capital spending in SAC

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Sport, Arts and Culture

Table: Provincial Sport, Recreation, Arts and Culture Expenditure

Eastern Cape 781 315 765 352 234 646 30.0% – 15 963 2.0% 2.1% 29.6% 242 099 -3.1%

Free State 313 440 313 440 97 633 31.1% – – 0.0% 2.3% 12.3% 40 160 143.1%

Gauteng 358 297 369 170 99 266 27.7% -10 873 – -3.0% 0.7% 12.5% 64 126 54.8%

Kw aZulu-Natal 644 494 515 619 110 634 17.2% – 128 875 20.0% 0.8% 13.9% 119 212 -7.2%

Limpopo 231 040 231 040 44 546 19.3% – – 0.0% 0.6% 5.6% 23 167 92.3%

Mpumalanga 278 696 269 547 44 209 15.9% – 9 149 3.3% 0.8% 5.6% 53 335 -17.1%

Northern Cape 177 736 177 736 27 570 15.5% – – 0.0% 1.5% 3.5% 24 666 11.8%

North West 488 171 489 857 82 111 16.8% -1 686 – -0.3% 1.7% 10.3% 88 419 -7.1%

Western Cape 296 445 296 445 53 047 17.9% – – 0.0% 0.8% 6.7% 42 211 25.7%

Total 3 569 634 3 428 206 793 662 22.2% -12 559 153 987 4.0% 1.1% 100.0% 697 395 13.8%

% share of SRAC to

total provincial

expenditure

Projected outcome

(Over)Year-on-

year growth

2008/09: Outcome as at 30 June

2008

% share of SRAC to

total SRAC expenditure

% (Over) / under of

M ain budget

R thousand

Main budget

Actual payments

as % of main

budget

Under

Actual payments as

at 30 June 2009

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Sport, Arts and Culture: Personnel

Table: Provincial Personnel Expenditure: Sport, Recreation, Arts and Culture

Eastern Cape 287 773 281 031 62 849 21.8% – 6 742 2.3% 1.0% 26.8% 88 491 -29.0%

Free State 119 133 117 322 26 162 22.0% – 1 811 1.5% 1.1% 26.8% 20 217 29.4%

Gauteng 110 349 110 349 19 084 17.3% – – 0.0% 0.3% 19.2% 17 611 8.4%

Kw aZulu-Natal 184 633 176 802 37 839 20.5% – 7 831 4.2% 0.5% 34.2% 31 205 21.3%

Limpopo 74 411 74 407 19 221 25.8% – 4 0.0% 0.4% 43.1% 15 603 23.2%

Mpumalanga 92 092 89 505 18 422 20.0% – 2 587 2.8% 0.6% 41.7% 15 322 20.2%

Northern Cape 65 775 65 775 12 107 18.4% – – 0.0% 1.2% 43.9% 10 134 19.5%

North West 124 453 125 129 25 467 20.5% -676 – -0.5% 1.0% 31.0% 21 516 18.4%

Western Cape 121 855 121 855 26 607 21.8% – – 0.0% 0.8% 50.2% 22 236 19.7%

Total 1 180 474 1 162 175 247 758 21.0% -676 18 975 1.6% 0.6% 31.2% 242 335 2.2%

R thousand

Main budget

Actual payments

as % of main

budget

Under

Actual payments as

at 30 June 2009

% share of SRAC

Personnel to total

personnel expenditure

Projected outcome

(Over)Year-on-

year growth

2008/09: Outcome as at 30 June

2008

% share of SRAC

personnel to total SRAC

expenditure

% (Over) / under of

M ain budget

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Sport, Arts and Culture: Capital

Table: Provincial Capital Expenditure: Sport, Recreation, Arts and Culture

Eastern Cape 18 997 18 771 1 799 9.5% – 226 1.2% 0.2% 0.8% 1 359 32.4%

Free State 48 529 48 870 6 238 12.9% -341 – -0.7% 1.9% 6.4% 3 173 96.6%

Gauteng 1 280 3 950 1 558 121.7% -2 670 – -208.6% 0.3% 1.6% 15 869 -90.2%

Kw aZulu-Natal 43 056 50 191 4 034 9.4% -7 135 – -16.6% 0.3% 3.6% 2 422 66.6%

Limpopo 49 241 49 241 6 654 13.5% – – 0.0% 1.3% 14.9% 218 2952.3%

Mpumalanga 44 174 44 174 6 638 15.0% – – 0.0% 1.4% 15.0% 2 131 211.5%

Northern Cape 34 236 34 480 3 740 10.9% -244 – -0.7% 2.3% 13.6% 108 3363.0%

North West 51 915 51 764 598 1.2% – 151 0.3% 0.1% 0.7% 14 054 -95.7%

Western Cape 3 477 5 198 399 11.5% -1 721 – -49.5% 0.1% 0.8% 783 -49.0%

Total 294 905 306 639 31 658 10.7% -12 111 377 -4.0% 0.6% 4.0% 40 117 -21.1%

% share of SRAC

Capital to total

Capital expenditure

Projected outcome

(Over)Year-on-

year growth

2008/09: Outcome as at 30 June

2008

% share of Capital to total SRAC expenditure

% (Over) / under of

M ain budget

R thousand

Main budget

Actual payments

as % of main

budget

Under

Actual payments as

at 30 June 2009

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Conditional Grants

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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

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Provincial Treasury

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Safety And Liaosn

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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

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Submission dates for CG QPRs

• National departments administering conditional grants are required to table QPRs (including both financial and non-financial information) with the SCOFA in the NCOP at the end of each quarter in line with the requirements of the DoRA, Grant Frameworks and Treasury Regulation 5.3

• Departments are required to provide the NT with copies of the reports tabled at SCOFA in NCOP

• The quarterly reports for each quarter should be submitted to the NT by the dates provided

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• 5 or more provinces have spent less than 15% of their grants budgets for the following grants:

– Land Care Programme– Community Library Services– HIV and Aids (Life Skills Education)– Devolution of Property Rate Funds– Mass Sport and Recreation Participation

Programme– Public Transport Operations

• Although the rate of spending is encouraging and reflects an improvement over previous financial years, overall spending still lies below total provincial average (22.1% vs. 24.9%)

Conditional Grants: Spending Rates (1)

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Conditional Grants – Spending RatesTable: Selected Conditional Grants Spending Rates as at 30 June 2009

Number of provinces spent less than 15%

Number of provinces spent between 15% and 25%

(inclusive)

Number of provinces spent more than 25%

Agriculture

Land Care Programme: Poverty Relief and Infrastructure Development Grant8 EC, FS, GT, KZN, LIM, MPU, NW, WC 1 NC

Arts and Culture

Community Library Services Grant 9 All provinces Education

HIV and Aids (Life Skills Education) Grant 5 GT, KZN, LIM, MPU, NC 4 EC, FS, NW, WC

National School Nutrition Programme Grant 1 MPU 6 FS, GT, KZN, LIM, NC, WC 2 EC, NW Health

Comprehensive HIV and Aids Grant 2 EC, GT 5 FS, KZN, MPU, NC, NW 2 LIM, WC

Forensic Pathology Services Grant 1 EC 3 LIM, MPU, NC 5 FS, GT, KZN, NW, WC

Hospital Revitalisation Grant 2 KZN, LIM 6 EC, FS, GT, MPU, NC, WC 1 NW Housing

Integrated Housing and Human Settlement Development Grant 6 EC, KZN, MPU, NC, NW, WC 3 FS, GT, LIM Public Works

Devolution of Property Rate Funds Grant 7 EC, FS, GT, LIM, MPU, NW, WC 2 KZN, NC Sport and Recreation South Africa

Mass Sport and Recreation Participation Programme Grant5 EC, KZN, LIM, MPU, NW 4 FS, GT, NC, WC

Transport

Gautrain Rapid Rail Link Grant 1 GT

Public Transport Operations Grant 7 EC, FS, GT, KZN, LIM, MPU, NC 2 NW, WC Percentages represent actual expenditure of Main budgets as published in the Division of Revenue Act, 2009 (Act No.12 of 2009).

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Detail on Conditional Grants

by Grant Type

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Arts and Culture GrantCommunity Library Services Grant

• Strategic Goal (Schedule 5 Grant):– To enable the South African society to gain access to

knowledge and information that will improve their socio-economic situation

• 1st Quarter expenditure:– Arts and Culture departments spent R32.1m or 7.3% of the

R440.6m community library services allocation – Transfers received amounted to 21.2% of national allocation– Highest spending: NC 12.4% and FS 11.3%– Lowest spending: WC 0.9% and GP 1.4%

• Service Delivery Outcome:– Department / Sector to respond

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Sport and Recreation SA Grants Mass Sport and Recreation Participation Programme Grant

• Strategic Goal (Schedule 5 Grant):– To broaden participation in sport within an integrated

development continuum and mass mobilisation for and beyond the 2010 World CupTM

• 1st Quarter expenditure:– Sport and Recreation departments spent R50m or

12.4% of the R402.3m main allocation– Transfers received amounted to 24.4% of national

allocation– Highest spending: NC (20.9%) and WC (19.6%) – Lowest spending: MP (1.8%) and EC (8.1%)

• Service Delivery Outcome:– Department / Sector to respond

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Important dates and submissions

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Publication Dates for Provincial S32 Reports

(financial and non-financial data)

• 2009/10 Financial Year:– 2nd Quarter (as at 30 September 2009)

30 October 2009– 3rd Quarter (as at 31 December 2009)

29 January 2010– 4th Quarter (as at 31 March 2010)

30 April 2010

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THANK YOU

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