SUMMARY BY DIRECTOR GENERAL

PRESENTATION TO THE SELECT COMMITTEE ON FINANCE BY THE DEPARTMENT OF SOCIAL DEVELOPMENT ON THE DIVISION OF REVENUE

INTRODUCTION
· Department has managed conditional grants since 1998/99
· Two remaining grants are:
- Improvement in social security
- HIV/AIDS (National Integrated Plan for Children Infected and Affected)
· Final year of grants is 2002/2003

SOCIAL SECURITY
· Purpose:
- Increase effectiveness of end-to-end processing of grant applications
· Outputs
- Technology and office automation tools for effective service delivery
- Improved communication network and information service for speedier responses to beneficiaries

Conditions
Approved business plan
· Monthly reports on progress and expenditure
· Quarterly reports
· Written assurance in terms of PFMA with respect to financial management and internal control systems

Criteria for allocation
· Initially based on beneficiary population in respective provinces
· 2001/2002 allocation is continuation of programme, all provinces receiving same allocation (R642 000)
· Exception is Northern Province with infrastructure backlog (additional R5m)

Monitoring and Auditing
Review of reports submitted
· Structured visits to provinces
· Financial auditing by provincial offices of Auditor-General
· Administrative costs are borne by national and provincial departments

Rationale for conditional grant
· Improvement of social security is a national priority, flowing from CRSS recommendations
· Conditional grant can ensure consistency in planning and implementation, effective monitoring
· Ensuring funds are utilised for intended purposes

Past Performance
· Funds for re-registration project were utilised
· Funds for improving financial management and establishing operations centres were not utilised fully for following reasons:
- Difficulties in locating funds in provincial treasuries
- Difficulties in obtaining approvals within provincial departments to utilise funds
- Capacity constraints within the provincial departments

Payment Schedule 2001/2002

	1^st tranche May	2^nd tranche Sept	Total
Eastern Cape	642 000	-	642 000
Free State	642 000	-	642 000
Gauteng	642 000	-	642 000
KwaZulu- Natal	642 000	-	642 000
Mpumalanga	642 000	-	642 000
Northern Cape	642 000	-	642 000
Northern Province	3 060 000	2 040 000	5 100 000
North West	642 000	-	642 000
Western Cape	642 000	-	642 000
Total	8 196 000	2 040 000	10 236 000

Capacity of National
· Expanded capacity through restructuring:
- Established social security branch
- Monitoring and evaluation directorate
- Internal audit capacity strengthened
- Financial management capacity enhanced

HIVIAIDS ALLOCATION
· Purpose:
- Implementation of National Integrated Plan for Children Infected and Affected (jointly with Health and Education
· Outputs:
- Increase in number of orphans identified, monitored and receiving care
- Establishment of effective local institutions

Conditions
· Approved business plan
· Monthly reports on progress and expenditure
· Quarterly reports
· Written assurance in terms of PFMA with respect to financial management and internal control systems

Criteria for allocation
· First year:
- HIV/AIDS prevalance
- Eastern cape, Free State, Mpumalanga, North West, Northern Province, Northern cape
- KZN excluded because of existing initiatives
· Second year:
- all provinces included
- Slightly lesser amounts for Gauteng and western Cape because of their available resources

Monitoring and Auditing
· Review of reports submitted
· Progress reviewed by Integrated Committee and DGs Committee
· Structured visits to provinces by interdepartmental teams
· Financial auditing by provincial offices of Auditor-General Steering

Rationale for conditional grant
· National pilot programme of 3 departments, need consistency in approach
· Provides provinces with opportunity to implement new programmes with assistance from national departments
· More effective for monitoring
· Ensuring that funds are spent for intended purposes

Past Performance
· Implementation has been slow due to:
- Complexity of developing integrated plan of 3 departments at provincial level
- Limited capacity in provinces
- Awaiting final expenditure information from provinces
· Note this is a new programme and new grant so slow start can be expected

Payment Schedule 2000/2001

Province	Allocation	Nov 2000	Nov 2000	Jan 2001
Eastern Cape	950 000	380 000	475 000	95 000
Free State	910 000	364 000	455 000	91 000
Mpumalanga	960 000	384 000	480 000	96 000
Northern Cape	1 000 000	400 000	500 000	100 000
Northern Prov	800 000	320 000	400 000	80 000
North West	1 000 000	400 000	500 000	100 000
Total	5 620 000	2 248 000	2 810 000	562 000

Payment Schedule 2001/2002

	Gazetted	May 2001	Sept 2001	January 2002
Eastern Cape	1 500 000	500 000	500 000	500 000
Free State	1 500 000	500 000	500 000	500 000
Gauteng	1 500 000	500 000	500 000	-
KZN	1 500 000	500 000	500 000	500 000
Mpumalanga	1 500 000	500 000	500 000	500 000
Northern Cap	1 500 000	500 000	500 000	500 000
Northern Pro	1 500 000	500 000	500 000	500 000
North West	1 500 000	500 000	500 000	500 000
Western Cap	1 500 000	500 000	500 000	-
TOTAL	12 500 000	4 500 000	4 500 000	3 500 000

Capacity of National
· Expanded capacity through restructuring:
- Established HIVIAIDS Directorate
- National Co-ordinator appointed (Health)
- Internal audit capacity strengthened
- Financial management capacity enhanced
· Note: Administrative costs built into provincial business plans. National
carries own administrative costs

Assessing National's Performance
· Timeous transfer of funds in accordance with schedule and conditions of DORA
· Quality of information, guidance and support to provinces
· Effectiveness of monitoring systems for early detection of problems and taking corrective action
· Effective evaluation of impact of grants