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Outcome of Conditional Grants & Capital Expenditure as at
30 November 2005[Section 40(4) of PFMA]
Select Committee on Finance
National Council of Provinces
Presented by:Chris AdamsIntergovernmental RelationsNational Treasury
20 January 2006
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National Treasury’s Role
• National Treasury dev. Culture of publishing information• Assessing credibility of prov. Budgets• Ensure that each treasury prepares quarterly reports for its cabinet or exco.• NT prepares a consolidated quarterly report for all provinces.
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Key highlights
• Presentation covers provincial spending for the first 8 months (1 April to 30 November 2005) of 2005/06 financial year
• Spending is at R136bn (62,1%) of adjusted budget (R219,2bn)
• The highest rate of spending is in KZN (63,2%); NC and MPU (63,1%)
• Lowest in FS & GT (60,8%)
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Provincial Aggregated ExpenditureTable 2: Provincial Aggregated Budgets and Expenditure as at November 2005
Eastern Cape 34 500 746 34 300 109 21 743 536 63,0% – 200 637 0,6% 16,0% 1 123 212 20 620 324 5,4%
Free State 15 062 118 14 693 465 9 150 615 60,8% – 368 653 2,4% 6,7% 830 425 8 320 190 10,0%
Gauteng 34 383 619 34 297 364 20 920 207 60,8% – 86 255 0,3% 15,4% 1 867 477 19 052 730 9,8%
Kw aZulu-Natal 45 891 813 46 512 715 29 000 865 63,2% -620 902 – -1,4% 21,3% 3 769 638 25 231 227 14,9%
Limpopo 28 681 412 29 136 345 17 682 066 61,6% -454 933 – -1,6% 13,0% 1 905 413 15 776 652 12,1%
Mpumalanga 15 882 730 15 728 135 10 026 569 63,1% – 154 595 1,0% 7,4% 1 855 953 8 170 616 22,7%
Northern Cape 5 319 879 5 277 368 3 358 807 63,1% – 42 511 0,8% 2,5% 424 522 2 934 285 14,5%
North West 18 232 414 18 069 067 11 101 498 60,9% – 163 347 0,9% 8,2% 1 351 388 9 750 110 13,9%
Western Cape 21 211 319 21 116 996 13 056 806 61,6% – 94 323 0,4% 9,6% 1 801 387 11 255 418 16,0%
Total 219 166 050 219 131 564 136 040 968 62,1% -1 075 835 1 110 321 0,0% 100,0% 14 929 416 121 111 552 12,3%
Net 34 486
% share of total
provincial expenditure
Difference 2004/05 vs
2005/06
2004/05: Actual as at November
2004
Year-on-year
growth
Actual as % of adj budget
(Over) Under
% (Over) / under of
adj budget
R thousand
Adjusted budget
Projected Outcomes
Actual as at November
2005
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Overview : Housing and LG
Spending is at R4,6bn or 54,3% of an adjusted budget of 8,5bn. • Lowest spending is in LIM (40,7%), FS (48,1%) and MP (48,2%)• Highest rate of spending is in NC (70%) and NW (63,7%).
Sector projects to overspend by R188,3m or 2,2%.• GT reflects highest overspending of R189,2m or 10% of adj budget of R1,9bn• WC yields lowest rate of underspending at R4,9bn or 0,6% of adj budget of R811,8m followed by EC at R8,9m or 0,8% of adj budget of R1,1bn
LIM and NW are the only provinces projecting to break even
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Provincial Aggregated Expenditure
Adj Projected Actual as at Actual as % Under % (OverBudgets Outcome Nov-05 of adj (Over) under of
budget Adj BudgetR thousand
Eastern Cape 1 065 255 1 056 329 603 221 56,6 8 926 0,8 Free State 669 426 661 293 322 082 48,1 8 133 1,2 Gauteng 1 893 380 2 082 590 1 083 690 57,2 -189 210 -10,0 KwaZulu-Natal 1 486 000 1 504 336 857 685 57,7 -18 336 -1,2 Limpopo 936 302 936 302 381 308 40,7 - Mpumalanga 630 060 623 515 303 482 48,2 6 545 1,0 Nortern Cape 253 108 262 317 178 396 70,5 -9 209 -3,6 North West 793 122 793 122 505 546 63,7 0 - Western Cape 811 808 806 914 398 547 49,1 4 894 0,6
0TOTAL 8 538 461 8 726 718 4 633 957 54,3 -188 257 -2,2
Provincial Aggregated Expenditure - Housing and LG
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Payments for Capital Assets Trends (Capital Expenditure)
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• Provinces on aggregate have spent R6,6bn or 47,2% of R13,9bn adjusted capital budgets
– Increase of R1,5bn or 30% to comparative spending during last year
• Housing Sector is spending at R56,8m or 24,8% of an adjusted capital budget of R228,9m
• However sector is projecting to underspend by R40,6m or 17,7%
- Lowest rate of capital spending is in GT (8,3), LIM (11,5%), FS
(16,9%) & EC (18,1%)
- Highest rate of capital spending reflects in NC (58,8%) & WC (53,5%)
- Buildings and other fixed structures is the highest contributor to the
underspending at R44,9m or 29% of an adj budget of R153,8m
Payments for Capital Assets
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Payments for Capital Assets
Adj Projected Actual as at Actual as % Under % (OverBudgets Outcome Nov-05 of adj (Over) under of
budget Adj BudgetR thousand
Eastern Cape 19 233 13 831 3 484 18,1 5 402 28,1 Free State 7 018 6 068 1 185 16,9 950 13,5 Gauteng 46 509 16 851 3 851 8,3 29 658 63,8 KwaZulu-Natal 30 431 29 782 10 336 34,0 649 2,1 Limpopo 18 585 14 585 2 145 11,5 4 000 21,5 Mpumalanga 70 676 70 623 22 636 32,0 53 0,1 Nortern Cape 2 320 2 484 1 365 58,8 -164 -7,1 North West 24 488 24 488 6 631 27,1 0 - Western Cape 9 592 9 592 5 127 53,5 0 -
0TOTAL 228 852 188 304 56 760 24,8 40 548 17,7
Provincial Aggregated Expenditure for Capital- Housing and LG
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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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Conditional Grants
Conditional grant allocations total R74,6bn (2005 DoRA)
Reported expenditure excludes Schedule 4 grants such as
the NTS Grant and Provincial Infrastructure grant
Housing grants show good performance:
- Integrated Housing and Human Settlement Grant
(62,3%)
- Net overspending of R506,2m and y-o-y growth of
2,8%
- Human Settlement and Redevelopment (127,4%)
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Integrated Housing and Human Settlement Development Grant
(TRANSFERS)Table 24: Provincial Integrated Housing and Human Settlement Development Grant Expenditure as at November 2005
Eastern Cape 581 218 607 259 355 092 61,1% -26 041 – -4,5% 1,6% 11,8% 478 842 -25,8%
Free State 398 618 471 461 220 603 55,3% -72 843 – -18,3% 2,4% 7,3% 302 519 -27,1%
Gauteng 1 340 675 1 711 275 834 953 62,3% -370 600 – -27,6% 4,0% 27,7% 695 381 20,1%
Kw aZulu-Natal 799 659 790 065 481 975 60,3% – 9 594 1,2% 1,7% 16,0% 521 772 -7,6%
Limpopo 397 650 325 522 212 629 53,5% – 72 128 18,1% 1,2% 7,0% 184 347 15,3%
Mpumalanga 321 123 221 129 172 506 53,7% – 99 994 31,1% 1,7% 5,7% 238 513 -27,7%
Northern Cape 79 917 79 917 70 562 88,3% – – 0,0% 2,1% 2,3% 89 300 -21,0%
North West 467 880 609 795 379 646 81,1% -141 915 – -30,3% 3,4% 12,6% 168 398 125,4%
Western Cape 456 740 533 249 289 164 63,3% -76 509 – -16,8% 2,2% 9,6% 256 080 12,9%
Total 4 843 480 5 349 672 3 017 130 62,3% -687 908 181 716 -10,5% 2,2% 100,0% 2 935 152 2,8%
Net -506 192
% share of grant to
total provincial
expenditure
% share of grant to
total grant expenditure
2004/05: Actual as at November
2004
Year-on-year
growth
Actual as % of adj budget
(Over) Under
% (Over) / under of
adj budget
R thousand
Division of Revenue Act, 2005
(Act No. 1 of 2005)
Projected Outcomes
Actual as at November
2005
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Conditional Grants
Table 25: Provincial Conditional Grants Expenditure as at November 2005
Agriculture 290 000 – 290 000 232 000 35 860 89,7%1 Comprehensive Agricultural Support Programme Grant 250 000 250 000 200 000 103 263 41,3%
Land Care Programme Grant: Poverty Relief and Infrastructure Development40 000 40 000 32 000 35 860 89,7%
Education 1 048 444 – 1 048 444 786 337 759 507 72,4%
HIV and Aids (Life Skills Education) Grant 136 293 136 293 102 222 129 029 94,7%
National School Nutrition Programme Grant 912 151 912 151 684 115 630 478 69,1%
Health 8 665 835 – 8 665 835 5 722 919 1 336 782 54,9%
Comprehensive HIV and Aids Grant 1 135 108 1 135 108 684 942 710 418 62,6%1 Health Professions Training and Development Grant 1 520 180 1 520 180 1 013 451 1 007 515 66,3%
Hospital Management and Quality Improvement Grant 150 342 150 342 112 760 69 990 46,6%
Hospital Revitalisation Grant 1 027 427 1 027 427 676 792 490 184 47,7%
Integrated Nutrition Programme Grant 123 392 123 392 95 379 66 190 53,6%
National Tertiary Services Grant 4 709 386 4 709 386 3 139 595 3 116 874 66,2%
Transferred from
National to province
Actual as at November
2005
Actual as % of budget ( excluding provincial roll-overs)
R thousand
Division of Revenue
Act, No. 1 of 2005
Other Gazetted Amounts
Total available 2005/06
(excluding rollovers)
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Conditional Grants - continuedHousing 4 867 876 – 4 867 876 3 538 327 3 048 222 62,6%
Integrated Housing and Human Settlement Development Grant4 843 480 4 843 480 3 518 722 3 017 130 62,3%
Human Settlement and Redevelopment Grant 24 396 24 396 19 605 31 092 127,4%
Land Affairs 8 000 – 8 000 – – 0,0%
Land Distribution: Alexandra Urban Renew al Project Grant 8 000 8 000 – – 0,0%
National Treasury 3 730 773 – 3 730 773 2 132 176 1 412 182 37,9%1 Provincial Infrastructure Grant 3 730 773 3 730 773 2 132 176 1 412 182
Social Development 55 931 759 – 55 931 759 38 634 573 35 237 056 63,4%
HIV and Aids (Community-Based Care) Grant 138 391 138 391 124 551 85 064 61,5%1 Integrated Social Development Services Grant 388 000 388 000 204 017 93 325 24,1%
Social Assistance Administration Grant 3 382 055 3 382 055 2 254 703 1 743 394 51,5%
Social Assistance Transfers Grant 52 023 313 52 023 313 36 051 302 33 408 598 64,2%
Sport and Recreation South Africa 24 000 – 24 000 20 183 15 193 63,3%
Mass Sport and Recreation Participation Programme Grant 24 000 24 000 20 183 15 193 63,3%
Total 74 566 687 – 74 566 687 51 066 515 40 432 620 63,2%
1) 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.
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Conditional Grants
• 8 provinces have spent more than 50% for the Housing grants:
– GT is the only province spending less than 50%, I.e. Human Settlement and Redevelopment Grant
– 7 Provinces are spending between 50% and 70% while 2 are above the 70% mark for the Integrated Housing and Human Settlement Development.
– 5 Provinces are spending more than 70% on any of the two grants.
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Conditional GrantsTable 26: Selected Conditional Grants Spending Rate as at November 2005
Agriculture
Land Care Programme Grant: Poverty Relief And Infrastructure Development2 GT, NW, 3 EC, KZN, LIM, 4 FS, MPU, NC, WC,
Education
Hiv And Aids (Life Skills Education) 3 LIM, NW, WC, 3 FS, MPU, NC, 3 EC, GT, KZN,
National School Nutrition Programme 0 5 FS, GT, LIM, NW, WC, 4 EC, KZN, MPU, NC,
Health
Comprehensive Hiv And Aids 3 FS, LIM, NC, 3 EC, MPU, NW, 3 GT, KZN, WC,
Hospital Revitalisation 5 EC, FS, LIM, NW, WC, 2 KZN, MPU, 2 GT, NC,
Integrated Nutrition Programme 3 NC, NW, WC, 6 EC, FS, GT, KZN, LIM, MPU, 0
Hospital Management And Quality Improvement6 FS, GT, KZN, LIM, NC, WC, 2 EC, NW, 1 MPU,
Housing
Integrated Housing And Human Settlement Development Grant0 7 EC, FS, GT, KZN, LIM, MPU, WC, 2 NC, NW,
Human Settlement And Redevelopment1 GT, 0 3 FS, LIM, WC,
Land Affairs
Land Distribution: Alexandra Urban Renew al Project1 GT, 0 0
Social Development
Social Assistance Administration 5 FS, GT, LIM, MPU, WC, 4 EC, KZN, NC, NW, 0
Social Assistance Transfers 0 8 EC, FS, GT, KZN, LIM, NC, NW, WC, 1 MPU,
Hiv And Aids (Community-Based Care)3 FS, KZN, WC, 3 EC, NC, NW, 3 GT, LIM, MPU,
Sport and Recreation South Africa
Mass Sport And Recreation Participation Programme1 NW, 4 GT, LIM, NC, WC, 4 EC, FS, KZN, MPU,
1) Percentages represent actual expenditure of main budget as published in the Division or Revenue Act, 2005 (Act No.1 of 2005)
Number of provinces spent less than 50%
Number of provinces spent between 50% and 70%
(inclusive)
Number of provinces spent more than 70%
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Important dates and submissions
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• 2005/06 Financial Year:
– 3rd Quarter (as at 31 December 2005)
30 January 2006
– 4th Quarter (as at 31 March 2006) 28 April 2006
Publication Dates for Provincial S32 Reports
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• Practice Note 3 of 2005 (issued with effect from 01 August 2005):– National departments administering conditional grants
are required to table QPRs (including both financial and non-financial information) with the SCOF in the NCOP at the end of each quarter in line with the requirements of Sections 19(1)(c) and 21(2)(d) of the Act, Grant Frameworks and Treasury Regulation 5.3
– Departments are required to provide the NT with copies of the reports tabled at SCOF in NCOP. The quarterly reports for each quarter should be tabled by the dates provided
– The dates are as follows: • Third Quarter: 07 February 2006 • Fourth Quarter: 08 May 2006
Proposed Dates for QPRs
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Detail on Conditional Grants by Grant Type
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Housing GrantsIntegrated Housing and Human Settlement Grant
• Objective (Schedule 5 Grant):– To finance subsidies, the implementation of National
Housing Programmes and to facilitate habitable, stable and sustainable human settlements
• 8 month Expenditure:– Housing spent R3 017 m or 62,3% of the R4 843 m
allocation– Transfers amounted to 72,6% – Highest: NC 88,3%; NW 81,1% and WC 63,3%– Lowest: LIM 53,5%; MPU 53,7%; and FS 55,3%
• Service Delivery Outcome:– Department / Sector to respond
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Housing GrantsHuman Settlement and Redevelopment Grant
• Objective (Schedule 5 Grant):– To fund projects that aim to improve the quality of
the environment by identifying dysfunctionalities in human settlements
• 8 month Expenditure:– Housing spent R31,1 m or 127,4% of the R24,4m
allocation– Transfers amounted to 80,4%– Highest: LIM 383,6%; WC 131,4% and FS 98%– Lowest: GT 26,4%
• Service Delivery Outcome:– Department / Sector to respond
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