SELECT COMMITTEE ON FINANCE
INPUT ON THE DIVISION OF REVENUE TO THE SELECT COMMITTEE ON FINANCE,
DEPARTMENT OF SOCIAL DEVELOPMENT
1. INTRODUCTION
PROVINCE |
2001/02 R'000 |
2002/03 R'000 |
Eastern Cape |
642 |
1 200 |
Free State |
642 |
1 200 |
Gauteng |
642 |
1 200 |
KwaZulu-Natal |
642 |
1 200 |
Mpumalanga |
642 |
1 200 |
Northern Cape |
642 |
1 200 |
Northern Province |
5 100 |
1 200 |
North West |
642 |
1 200 |
Western Cape |
642 |
1 200 |
TOTAL |
10 236 |
10 800 |
Monitoring mechanisms and auditing arrangements
|
1st Tranche |
2nd Tranche |
Total |
Province |
May - 01 |
Sept - 01 |
|
Eastern Cape |
642 000 |
nil |
642 000 |
Free State |
642 000 |
nil |
642 000 |
Gauteng |
642 000 |
nil |
642 000 |
Mpumalanga |
642 000 |
nil |
642 000 |
Northern Cape |
642 000 |
nil |
642 000 |
Northern Province |
3 060 000 |
2 040 000 |
5 100 000 |
North West |
642 000 |
nil |
642 000 |
Western Cape |
642 000 |
nil |
642 000 |
KwaZulu Natal |
642 000 |
nil |
642 000 |
Total |
8 196 000 |
2 040 000 |
10 236 000 |
Capacity and preparedness of the transferring department and assessment of performance
2.15 The national department, despite capacity problems in terms of personnel has since the 1998/99 fiscal year successfully transferred the conditional grant. A number of current initiatives in the department will further strengthen its capacity to deliver on its obligation in terms of the conditional grants. These initiatives include:
(a) Restructuring the department to strengthen core functions, especially social security, financial management and internal audit and the establishment of a monitoring and evaluation unit for social security.
(b) Appointment of financial expertise in the national and provincial departments to improve financial management in general and the management of conditional grants in particular.
(c) Capacity building workshops for officials on the implementation of the Division of Revenue Act.
2.16 The performance of the department should be assessed against the following:
(a) Timeous transfer of funds in accordance with payment schedules and conditions set out in the Division of Revenue Act.
(b) Quality of information, guidance and support provided to the province on the effective and correct utilization of the funds.
(c) Effectiveness of monitoring systems put in place by the national department, for early identification of problems and taking corrective action.
(d) Effective evaluation by the national department on the impact of the conditional grants.
3. HIV/AIDS CONDITIONAL GRANT
Purpose and measurable objectives of the grant
3.1 In 2000, Cabinet approved a R450 million special allocation for HIV/AIDS, over and above the normal allocations in departmental budgets. For 2000/2001, Cabinet approved that R75 million of the grant be utilized for the implementation of the National Integrated Plan for Children Infected and Affected by HIVIAIDS. The plan is a joint initiative of the Departments of Social Development, Health and Education.
3.2 The purpose of the grant is to provide for integrated services to children and youth, in the form of life skills education, voluntary testing and counselling and social services. Furthermore, the purpose is to establish and strengthen local institutional structures and partnerships in combating HIV/AIDS.
3.3 For 2000/2001, an amount of R6.8 million was allocated to the Department of Social Development. Of this, R1.18 million was earmarked to strengthen existing projects, while R5.62 million was to be transferred to the provinces as conditional grants.
3.4 The outputs for the grant are:
(a) An increase in the number of orphans (infected and affected by H V/Aids) identified and monitored.
(b) An increase in the number of orphans receiving appropriate care.
(c) Establishment of effective local institutional structures and partnerships for the management and maintenance of home/community-based care and support programmes.
Conditions attached to the grant
3.5 The following conditions apply:
(a) Business plans should be submitted by the provinces to the Department for approval.
(b) The financial section of the provincial departments must be aware of the funds.
(c) A monthly report on the progress and expenditure of funds to be submitted on the tenth working day after each month in terms of section 7(8) of the Act is necessary.
(d) The quarterly reports must be submitted to this Department before the fifteenth working day after that quarter in terms of section 7(10) to comply with section 40(4) of the PFMA.
Criteria for allocation between provinces
3.6 In the first year of the grant (2000/2001) a decision was made to prioritise provinces on the basis of HIV/AIDS prevalence as revealed by the Ante-Natal Surveys of the Department of Health. The grant was made available to the following provinces:
· Eastern Cape
· Northern Cape
· North West Province
· Northern Province
· Free State
· Mpumalanga
KwaZulu-Natal was not included as the province already had a number of initiatives underway.
3.7 For 2001/2002, the resources available in the provinces were taken into account in making the allocation between the provinces. Western Cape and Gauteng, which had considerable resources allocated an amount slightly lower than the other provinces.
Monitoring mechanisms and auditing arrangements
3.8 For monitoring purposes, monthly progress reports and quarterly progress reports are expected from provinces. The reports are discussed at the respective project team meetings that consist of provincial and national project leaders and at the Heads of Department meetings to verifying outputs and expenditure. Provincial visits to evaluate implementation of the programmes are made.
3.9 The auditing arrangements are that provinces will be accountable for the spending of the money and audited by the provincial officials of the Office of the Auditor-General.
Rationale for conditional grant
3.10 The conditional grant route was preferred for the following reasons:
(a) The National Integrated Plan for Children Infected and Affected by HIV/AIDS is a pilot of three national departments. The conditional grant route provides the opportunity to establish a consistent approach across the provinces in terms of planning and implementation.
(b) The conditional grant route provides for more effective monitoring of the programme by the national departments.
(c) The ringfencing of the funds ensures that the funds are used for the intended purpose.
Administrative costs
3.11 No specific amount was made available for administrative costs. The provinces had to indicate in their business plans if administrative costs were necessary. The administrative costs incurred by the national department are funded through the normal departmental budget.
Past performance
3.12 The payment transfers for 2000/2001 are shown in the table below.
PAYMENT SCHEDULE FOR THE YEAR 2000/2001: HIV/AIDS
PROVINCE |
AMOUNT GAZETTED |
1ST TRANCHE AMOUNT PAID |
2ND TRANCHE AMOUNT PAID |
3rd TRANCHE AMOUNT PAID 21 Jan 2001 |
Eastern Cape |
R 950 000 |
R 380 000 |
R 475 000 |
R 95 000 |
Western Cape |
- |
- |
- |
- |
Northern Cape |
R 1 000 000 |
R 400 000 |
R 500 000 |
R 100 000 |
North West |
R 1 000 000 |
R 400 000 |
R 500 000 |
R 100 000 |
Northern Province |
R 800 000 |
R 320 000 |
R 400 000 |
R 80 000 |
Free State |
R 910 000 |
R 364 000 |
R 455 000 |
R 91 000 |
KwaZulu Natal |
- |
- |
- |
- |
Mpumalanga |
R 960 000 |
R 384 000 |
R 480 000 |
R 96 000 |
Gauteng |
- |
- |
- |
- |
TOTAL |
R 5 620 000 |
R 2 248 000 |
R 2 810 000 |
R 562 000 |
Projected life of the grant
PROVINCE |
AMOUNT GAZETTED |
1ST TRANCHE May 2001 |
2nd TRANCHE Sept 2001 |
3rd TRANCHE |
Eastern Cape |
1 500 |
500 |
500 |
500 |
Free State |
1 500 |
500 |
500 |
500 |
Gauteng |
1 500 |
500 |
500 |
- |
KwaZulu-Natal |
1 500 |
500 |
500 |
500 |
Mpumalanga |
1 500 |
500 |
500 |
500 |
Northern Cape |
1 500 |
500 |
500 |
500 |
Northern Province |
1 500 |
500 |
500 |
500 |
North West |
1 500 |
500 |
500 |
500 |
Western Cape |
1 000 |
500 |
500 |
- |
TOTAL |
12 500 |
4 500 |
4 500 |
3 500 |
Capacity and preparedness of the transferring department and assessment of performance
PROVINCE |
TOTAL ALLOCATION |
PROJECTED EXPENDITURE |
EASTERN CAPE |
R 5 066 700 |
R 4 538 700 |
WESTERN CAPE |
R 4 583 200 |
R 2 833 200 |
NORTHERN CAPE |
R 1 420 600 |
R 782 033 |
NORTH WEST |
R 2 232 800 |
R 1 704 800 |
NORTHERN PROVINCE |
R 3 083 300 |
R 3 083 300 |
FREE STATE |
R 3 545 700 |
R 1 045 700 |
KWAZULU-NATAL |
R 5 972 600 |
R 4 222 600 |
MPUMALANGA |
R 1 371 900 |
R 843 900 |
GAUTENG |
R 2 725 200 |
R 2 197 200 |
TOTAL |
R 30 002 000 |
R 21 251 433 |
Kindly note that the amount allocated per province for operation centres is R278 000,for financial management R250 000 and for electronic registries R250 000 which was only available to the Western Cape, KwaZulu-Natal and Free State in 2000-2001 where the project was being piloted before being rolled out to other provinces.