MID-TERM REPORT

MPUMALANGA PROVINCE

DEPARTMENT OF HEALTH AND SOCIAL SERVICES

PUBLIC HEARING ON CONDITIONAL GRANTS

7 JUNE 2005

PRELIMINARY OUTCOMES 2004/05 FINANCIAL YEAR

DATA ON TRENDS IN ALLOCATIONS, TRANSFERS AND ACTUAL EXPENDITURE OF THE ENTIRE DEPARTMENT’S CONDITIONAL GRANTS AND CAPITAL GRANTS

Trends on conditional grants

Table 1: Preliminary Expenditure on Conditional Grants: 2004/05 and 2003/04

Conditional Grant Name
Original Budget

2004/05
Adjustment budget

2004/05

Adjusted Budget 2004/05

Actual Received by the Depart 2004/05

Actual Exp 2004/05

Under/ over Spending 2004/05

Actual Exp as a percent of Adjusted budget 2004/05
Adjusted Budget

2003/04
Actual Exp

2003/04

Under /over Spending 2003/04
Actual Exp as a percent of Adjusted budget

2003/04

R’000

R’000

R’000

R’000

R’000

R’000

%

R’000

R’000

R’000

%

Health Financial Management

0

2,008

2,008

2,008

2,008

0

100

2,844

836

2,008

29

Integrated Nutrition Programme

8,713

6,340

15,053

12,796

13,498

1,555

90

67,183

60,834

6,340

91

Comprehensive HIV and AIDS

53,840

11,821

65,661

52,200

56,421

9,240

86

34,550

22,731

11,819

66

National Tertiary Services

41,427

7,100

48,527

45,075

46,526

2,001

96

41,796

34,675

7,121

83

Health Professions Training and Development

41,808

275

42,083

42,083

42,083

0

100

46,575

46,300

275

99

Hospital Revitalisation

68,292

20,131

88,423

88,423

52,359

36,064

59

65,944

45,802

20,142

69

Provincial Infrastructure

35,724

4,829

40,553

40,553

25,418

15,135

63

29,171

24,278

4,893

83

Flood Relief

0

6,677

6,677

6,534

98

98

98

11,016

4,339

6,677

39

Hospital Management and Quality Improvement

12,833

16,157

28,990

25,782

22,748

6,242

79

20,273

4,191

16,082

21

Coroner Special Services

0

1,000

1,000

1,000

1,000

0

100

1,000

0

1,000

0

Malaria and Cholera Prevention

0

5,000

5,000

4,357

4,902

98

98

N/A

N/A

N/A

N/A

Total

262,637

76,338

343,975

327,325

273,750

70,225

80

320,352

243,995

76,357

76

Table 2: Percentage Spread, of Expenditure on Conditional Grants: 2004/205

3 spent 100%

4 spent over 90%

1 spent between 80% and 90%

1 spent between 70% and 80%

2 spent between 70% and 59%

Health Financial Management

Health Professions Training and Development

Coroner Special Services

Integrated Nutrition Programme

National Tertiary Services

Flood Relief

Malaria and Cholera Prevention

Comprehensive HIV and AIDS

Hospital Management and Quality Improvement

Hospital Revitilisation

Provincial Infrastructure

The unspent amount on the budget for conditional grants totals R70,225,000, an average percentage expenditure of 80% on the 11 conditional grants managed by the Department during the 2004/05 financial year. Three (3 ) grants spent 100% and 2 grants spent below 70%. The percentage expenditure in the 2004/05 financial year varies from 59% recorded by the Hospital Revitilisation Grant followed by the Provincial Infrastructure Grant at 63% to 100%. Table 2 above gives an indication of the spread of expenditure from a range of below 59% to 100%.

Table 3: Percentage Spread of Expenditure on Conditional Grants: 2003/04

None spent 100%

2 spent over 90%

2 spent between 80% and 90%

2 spent between 60% and 70%

4 spent below 60%

None

Integrated Nutrition Programme

Health Professions Training and Development

National Tertiary Services

Provincial Infrastructure

Comprehensive HIV and AIDS

Hospital Revitilisation

Health Financial Management

Flood Relief

Hospital Management and Quality Improvement

Coroner Special Services

The average percentage expenditure on conditional grants in the 2003/04 financial year was 76% with a variance of R76,357,000. None of the grants incurred a percentage expenditure of 100%, 2 grants spent over 90% and 4 grants spent over 60%. The lowest percentage expenditure of 0% was recorded by the Coroner Special Services Grant followed by the Health Financial Management Grant at 29%, the highest percentage expenditure was incurred by the Integrated Nutrition Programme.

Table 4: Preliminary comparison of expenditure outcomes: 2004/05 and 2003/04

Conditional Grant Name

Actual Exp 2004/05

Under/over Spending 2004/05
Exp as a percent of Adjusted budget

2004/05
Actual Exp

2003/04

Under/over Spending 2003/04
Actual Exp as a percent of Adjusted budget

2003/04
Year on Year Increase/

decrease

2003/04 2004/05
Percentage difference

2003/04 2004/05

R’000

R’000

%

R’000

R’000

%

R’000

%

Health Financial Management

2,008

0

100

836

2,008

29

1,172

71

Integrated Nutrition Programme

13,498

1,555

90

60,834

6,340

91

(47,336)

(1)

Comprehensive HIV and AIDS

56,421

9,240

86

22,731

11,819

66

33,690

20

National Tertiary Services

46,526

2,001

96

34,675

7,121

83

11,851

13

Health Professions Training and Development

42,083

0

100

46,300

275

99

4,217

1

Hospital Revitalisation

52,359

36,064

59

45,802

20,142

69

6,557

(10)

Provincial Infrastructure

25,418

15,135

63

24,278

4,893

83

1,140

(20)

Flood Relief

4,902

98

98

4,339

6,677

39

563

59

Hospital Management and Quality Improvement

22,748

6,242

79

4,191

16,082

21

18,558

58

Coroner Special Services

1,000

0

100

0

1,000

0

1,000

100

Malaria and Cholera Prevention

4,902

98

98

N/A

N/A

N/A

4,902

98

Total

273,750

70,225

80

243,995

76,357

76

34,657

4

The average improvement is 4%. Most of the grants showed an improvement ranging from 1% to 100%. The following grants showed a decrease in expenditure:

Integrated Nutrition

The reason for the decrease in expenditure is that the budget for the Primary School Nutrition Programme was transferred to the Department of Education.

Hospital Management and Quality Improvement

The under expenditure can be attributed to the delayed implementation of the business plans which led to the failure by service providers to deliver services in time for the year end closure.

Provincial Infrastructure

The challenges that contributed to the under expenditure are as mentioned in 2.1 below.

Hospital Revitalisation

The challenges that contributed to the under expenditure are as mentioned in 2.1 below.

A BRIEF ASSESSMENT ON THE DEPARTMENT’S PERFORMANCE

Under spending/overspending, capacity constraints that impacted on service delivery, especially on Capital Budgets.

Table 5: Preliminary Expenditure Outcomes Per Programme: 2004/2005

Programme Name

Adjusted Budget 2004/05
Revision

2004/05
Revised Budget Allocation

2004/05

Actual Exp 2004/05

Under/ over Spending 2004/05

Actual Percen tage Expendi ture
Revised Budget Allocation

2003/04

Actual Exp 2003/04

Under/ over Spending 2003/04

Actual Percen tage Expendi ture

R’000

R’000

R’000

R’000

R’000

R’000

R’000

R’000

Health Administration

197,133

2,008

198,741

194,771

3,970

98

172,947

153,390

19,557

89

District Health Services

1,469,502

(11,553)

1,457,949

1,439,529

18,420

99

1,398,850

1,354,737

44,113

97

Emergency Medical Services

84,549

6,076

90,625

68,299

22,326

75

70,031

46,729

23,302

67

Provincial Hospital Services

310,553

75,895

386,448

378,344

8,104

98

317,417

309,802

7,615

98

Health Sciences Training and Development

55,619

3,300

58,919

58,918

1

100

47,422

45,160

2,262

95

Health Care Support Services

31,501

(7,736)

23,765

23,299

466

98

27,793

15,427

12,366

56

Health Facilities Management

143,515

24,960

168,475

104,142

64,333

62

117,736

81,148

36,588

69

Total

2,292,372

82,853

2,384,922

2,266,672

117,640

95

2.152,196

2,006,393

145,803

93

The Department incurred an under expenditure of 5% which is 2% less than that incurred in the 2004/2005 financial year. The under expenditure is incurred mainly in Programme 3 and Programme 8 at 75% and 62% respectively. Five (5) Programmes spent over 98% with Health Sciences Training and Development scoring 100%.

Table 5.1: Preliminary Expenditure Outcomes Per Economic Classification: 2004/05

Economic Classification

Adjusted Budget 2004/05

Actual Exp 2004/05

Under/over Spending 2004/05
Actual Percentage Exp

2004/05

R’000

R’000

R’000

R’000

Current expenditure

2,038,715

2,081,639

(42,924)

102

Transfers payment

93,716

93,418

235

99

Acquisition of capital assets

252,491

91,615

160,876

36

Total

2,384,922
2,266,672

118,250

95

Table 5.2: Revised Expenditure Outcomes Per Economic Classification: 2004/05

Economic Classification

Adjusted Budget 2004/05

Actual Exp 2004/05

Under/over Spending 2004/05
Actual Percentage Exp

2004/05

R’000

R’000

R’000

R’000

Current expenditure

2,046,223

2,002,108

35,346

98

Transfers and subsidies

93,716

93,481

235

99

Acquisition of capital assets

244,983

162,314

82,669

64

Total

2,384,922

2,266,672

118,250

95

Table 5.1 is an indication of the preliminary expenditure outcomes before preliminary year-end book closure, table 5.2 provides the revised expenditure after the preliminary year-end book closure with the updated information on the capital expenditure performance.

The percentage expenditure on the capital budget is 64% as updated after year-end book closure. The under expenditure may be attributed to the following capacity constraints:

The dissolution of the Mpumalanga Provincial Tender Board at the beginning of the financial year as part of the Province’s attempts to comply with the Supply Chain Management requirements led to the late appointment of service providers.

As a result of the above, the Department was challenged by the transition from utilising the Provincial Tender Board to establishing Departmental Bid Adjudication Committee.

The completion of projects were delayed instances wherein after appointment of service providers, guarantees were not issued timeously for the contractors to begin the construction process.

The appointment of service providers who did not meet the required standards delayed the progress of capital projects.

Table 6: Preliminary Expenditure outcomes on the conditional grants for capital projects: 2004/05 and 2003/04

Mechanisms put in place to deal with these related problems and the results due to these pro-active measures.

The following proactive measures were put in place:

The Department has signed a Service Level Agreement with the Department of Public Works which has improved mutual relations.

The Department will strengthen the management of capital projects appointing a project manager and architect to focus on the capital revitalisation projects of the Department. Advertisements have been made to this regard.

All capital projects were submitted timeously to the Department of Public Works to avoid the late appointment of contractors.

The participation of Departmental officials in the Joint Bid Adjudication Committee on capital projects ensures that all requirements are met by bidding companies before the appointment of contractors.

Receipt of monthly reports from receiving departments or municipalities, and measures put in place by the Department to ensure compliance?

This matter is not applicable to the Department. The Department is a transferee of the conditional grants and not a transferer.

Submission of certificates/ business plans for conditional grants to National Treasury for the current financial year 2005/06 as indicated by the Division of Revenue Act.

All certificates/business plans for conditional grants have been submitted to National Treasury for the financial year 2005/06.

Conditional Grant Name	Original Budget 2004/05	Adjustment budget 2004/05	Adjusted Budget 2004/05	Actual Received by the Depart 2004/05	Actual Exp 2004/05	Under/ over Spending 2004/05	Actual Exp as a percent of Adjusted budget 2004/05	Adjusted Budget 2003/04	Actual Exp 2003/04	Under /over Spending 2003/04	Actual Exp as a percent of Adjusted budget 2003/04
	R’000	R’000	R’000	R’000	R’000	R’000	%	R’000	R’000	R’000	%
Health Financial Management	0	2,008	2,008	2,008	2,008	0	100	2,844	836	2,008	29
Integrated Nutrition Programme	8,713	6,340	15,053	12,796	13,498	1,555	90	67,183	60,834	6,340	91
Comprehensive HIV and AIDS	53,840	11,821	65,661	52,200	56,421	9,240	86	34,550	22,731	11,819	66
National Tertiary Services	41,427	7,100	48,527	45,075	46,526	2,001	96	41,796	34,675	7,121	83
Health Professions Training and Development	41,808	275	42,083	42,083	42,083	0	100	46,575	46,300	275	99
Hospital Revitalisation	68,292	20,131	88,423	88,423	52,359	36,064	59	65,944	45,802	20,142	69
Provincial Infrastructure	35,724	4,829	40,553	40,553	25,418	15,135	63	29,171	24,278	4,893	83
Flood Relief	0	6,677	6,677	6,534	98	98	98	11,016	4,339	6,677	39
Hospital Management and Quality Improvement	12,833	16,157	28,990	25,782	22,748	6,242	79	20,273	4,191	16,082	21
Coroner Special Services	0	1,000	1,000	1,000	1,000	0	100	1,000	0	1,000	0
Malaria and Cholera Prevention	0	5,000	5,000	4,357	4,902	98	98	N/A	N/A	N/A	N/A
Total	262,637	76,338	343,975	327,325	273,750	70,225	80	320,352	243,995	76,357	76

3 spent 100%	4 spent over 90%	1 spent between 80% and 90%	1 spent between 70% and 80%	2 spent between 70% and 59%
Health Financial Management Health Professions Training and Development Coroner Special Services	Integrated Nutrition Programme National Tertiary Services Flood Relief Malaria and Cholera Prevention	Comprehensive HIV and AIDS	Hospital Management and Quality Improvement	Hospital Revitilisation Provincial Infrastructure

None spent 100%	2 spent over 90%	2 spent between 80% and 90%	2 spent between 60% and 70%	4 spent below 60%
None	Integrated Nutrition Programme Health Professions Training and Development	National Tertiary Services Provincial Infrastructure	Comprehensive HIV and AIDS Hospital Revitilisation	Health Financial Management Flood Relief Hospital Management and Quality Improvement Coroner Special Services

Conditional Grant Name	Actual Exp 2004/05	Under/over Spending 2004/05	Exp as a percent of Adjusted budget 2004/05	Actual Exp 2003/04	Under/over Spending 2003/04	Actual Exp as a percent of Adjusted budget 2003/04	Year on Year Increase/ decrease 2003/04 2004/05	Percentage difference 2003/04 2004/05
	R’000	R’000	%	R’000	R’000	%	R’000	%
Health Financial Management	2,008	0	100	836	2,008	29	1,172	71
Integrated Nutrition Programme	13,498	1,555	90	60,834	6,340	91	(47,336)	(1)
Comprehensive HIV and AIDS	56,421	9,240	86	22,731	11,819	66	33,690	20
National Tertiary Services	46,526	2,001	96	34,675	7,121	83	11,851	13
Health Professions Training and Development	42,083	0	100	46,300	275	99	4,217	1
Hospital Revitalisation	52,359	36,064	59	45,802	20,142	69	6,557	(10)
Provincial Infrastructure	25,418	15,135	63	24,278	4,893	83	1,140	(20)
Flood Relief	4,902	98	98	4,339	6,677	39	563	59
Hospital Management and Quality Improvement	22,748	6,242	79	4,191	16,082	21	18,558	58
Coroner Special Services	1,000	0	100	0	1,000	0	1,000	100
Malaria and Cholera Prevention	4,902	98	98	N/A	N/A	N/A	4,902	98
Total	273,750	70,225	80	243,995	76,357	76	34,657	4

Programme Name	Adjusted Budget 2004/05	Revision 2004/05	Revised Budget Allocation 2004/05	Actual Exp 2004/05	Under/ over Spending 2004/05	Actual Percen tage Expendi ture	Revised Budget Allocation 2003/04	Actual Exp 2003/04	Under/ over Spending 2003/04	Actual Percen tage Expendi ture
	R’000	R’000	R’000	R’000	R’000		R’000	R’000	R’000
Health Administration	197,133	2,008	198,741	194,771	3,970	98	172,947	153,390	19,557	89
District Health Services	1,469,502	(11,553)	1,457,949	1,439,529	18,420	99	1,398,850	1,354,737	44,113	97
Emergency Medical Services	84,549	6,076	90,625	68,299	22,326	75	70,031	46,729	23,302	67
Provincial Hospital Services	310,553	75,895	386,448	378,344	8,104	98	317,417	309,802	7,615	98
Health Sciences Training and Development	55,619	3,300	58,919	58,918	1	100	47,422	45,160	2,262	95
Health Care Support Services	31,501	(7,736)	23,765	23,299	466	98	27,793	15,427	12,366	56
Health Facilities Management	143,515	24,960	168,475	104,142	64,333	62	117,736	81,148	36,588	69
Total	2,292,372	82,853	2,384,922	2,266,672	117,640	95	2.152,196	2,006,393	145,803	93

Economic Classification	Adjusted Budget 2004/05	Actual Exp 2004/05	Under/over Spending 2004/05	Actual Percentage Exp 2004/05
	R’000	R’000	R’000	R’000
Current expenditure	2,038,715	2,081,639	(42,924)	102
Transfers payment	93,716	93,418	235	99
Acquisition of capital assets	252,491	91,615	160,876	36
Total	2,384,922	2,266,672	118,250	95

Conditional Grant Name	Original Budget 2004/05	Adjust ment budget 2004/05	Adjusted Budget 2004/05	Actual Received by the Depart 2004/05	Actual Exp 2004/05	Under/ over Spend ing 2004/05	Actual Exp as a percent of Adjusted budget 2004/05	Adjusted Budget 2003/04	Actual Exp 2003/04	Under/ over Spend ing 2003/04	Actual Exp as a percent of Adjusted budget 2003/04
	R’000	R’000	R’000	R’000	R’000	R’000	R’000	R’000	R’000	%	R’000
Hospital Revitilisation	68,292	20,131	88,423	88,423	52,359	36,064	59	65,944	45,802	20,142	69
Provincial Infrastructure	35,724	4,829	40,553	40,553	25,518	15,035	63	29,171	24,278	4,893	83
Equitable share	27,946	11,553	39,499	39,499	26,265	13,234	66	22,621	11,068	11,553	49
Total	131,962	36,513	168,475	168,475	104,265	64,333	62	117,736	81,148	36,588	69