The conditional grant that performed well during the first quarter is the hospital management and improvement grant. It spent 25.8% of the available budget. The rest of the grant did not do well because the department spent less than the funds that were received from National Treasury. Reasons for under spending vary from poor planning to poor implementation of the projects.

Social Services conditional Grant [PMG Note : table not included]

The province-received funds as indicated in the approved payment schedule. The department spent less than what was received in each conditional grant. It we assume the straight-line target of 25%, only two conditional grants were very close to the target.

Education conditional grants[PMG Note : table not included]

Only one conditional grant performed well during the first quarter. The other two conditional grants did not do well. HIV and Aids spent less than what was received from National Treasury. No funds were received for the infrastructure grant because the department of Education did not comply with conditions of the grant. The infrastructure report for the previous year and the 2005/06 plans were not submitted to National Treasury.

Capital budget

Health was allocated R228, 966 million towards the payment of capital assets. Expenditure incurred in the first quarter amount to R28, 083, million, which representsl2.3% of the capital budget. R143, 198 million is for the construction of health facilities whereas R85 million is for the purchasing of equipment. The provincial treasury did not visit any health project during the first quarter.

Education was allocated a capital budget of R252, 974 million for the payments of capital assets. Expenditure incurred for the first quarter is 41,226 million. Which represents 16,2% of the allocated budget. The department do not have the capacity to monitor the capital projects. The department of public works was recently requested to manage all infrastructure projects for the department of Education. The expenditure for this department will improve in the third and fourth quarter.

4.Conclusion

• Health and Education were requested to beef up their monitoring capacity.

• The department of Public Works was requested to manage all infrastructure projects for the department of Health and Education.

• The Provincial Treasury is adding capacity in the monitoring and evaluation unit to assist the programme officers to monitor departmental expenditures.

• The Premier's one on one quarterly meetings with departments are also assisting to track the progress made by departments.