FREE STATE-PROVINCIAL TREASURY
PUBLIC HEARINGS ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE
Presentation by MJ Phukuntsi
TREASURY
OBJECTIVES
To inform the Select Committee on Finance
2005/2006 ADJ BUDGET
Breakdown of Adjusted Budget Original Budget R14, 541, 544 billion
Conditional Grants
Equitable Share
2005/2006 Adj Budget R15, 062, 118 billion
Original Budget increased by R520, 574 million or 3, 6 %
Grants Adj 40, 7% (R211, 679 million) of adjustments of R521 million
TRENDS IN C-GRANT ALLOCATIONS
Before the inclusion of Social Security grants as part of conditional grants (2001/02 - 2004/05), the average total provincial Conditional Grant allocation was about 13 % of the total provincial budget.
If historical numbers are amended in order to convert Social Security Grants portion of equitable share to Conditional Grants, this percentage increases to 32 % over the same period (2001/02 - 2004/05).
From 2005/06 over the MTEF, the total Conditional Grant allocation constitutes 38 % of the total provincial budget.
.
C-GRANT ALLOCATIONS
|
(1) |
Total Provincial Budget |
C-grant allocation |
C-grant allocation inclusive of Social Security Grant |
Increase in allocation from year to year |
||
|
R'm (2) |
R'm (3) |
% (4) |
R'm (5) |
% (6) |
% (7) |
|
|
2001/02 |
8,484,517 |
1,102,325 |
13.0 |
2,436,508 |
28.7 |
- |
|
2002/03 |
9,841,109 |
1,270,829 |
12.9 |
3,014,643 |
30.6 |
23.7 |
|
2003/04 |
11,865,354 |
1,411,317 |
11.9 |
3,792,069 |
32.0 |
25.8 |
|
2004/05 |
13,489,087 |
1,823,698 |
13.5 |
4,777,388 |
35.4 |
26.0 |
|
2005/06 |
15,062,118 |
5,702,937 |
37.9 |
5,702,937 |
37.9 |
19.4 |
|
2006/07 |
16,018,574 |
6,079,972 |
38.0 |
6,079,072 |
38.0 |
6.6 |
TRENDS IN C-GRANT EXPENDITURE
Provincial expenditure on Conditional Grants was very slow during the 2001/02 financial year at R283 million or 26 0/0 of the total provincial allocation for Conditional grants.
This percentage took up during the following financial years with expenditure amounting to R1 billion or 82 % of the allocation in 2002/03 and R1, 3 billion or 94 % in 2003/04.
In 2004/05 financial year, expenditure on Conditional Grants according to the pre-audited financial statements (Annual Reports of two departments are still outstanding) reached R1, 6 billion or 87 % of the total provincial allocation.
The province is projecting to spend R5/3 billion or 93 % of the 2005/06 allocation for Conditional Grants.
C-GRANT EXPENDITURE
|
(1) |
C-grant allocation |
Total Provincial expenditure |
Expenditure as % of total C-grant allocation |
|
|
R'm (2) |
% (3) |
R'm (4) |
% (5) |
|
|
2001/02 |
1,102,325 |
13.0 |
283,422 |
25.7 |
|
2002/03 |
1,270,829 |
12.9 |
1,045,215 |
82.2 |
|
2003/04 |
1,411,317 |
11.9 |
1,328,455 |
94.1 |
|
2004/05 |
1,823,698 |
13.5 |
1,587,307 |
87.0 |
|
2005/06 |
5,702,937 |
37.9 |
5,320,095 |
93.3 |
|
2006/07 |
6,079,972 |
38.0 |
- |
- |
Expenditure on C-grants as at 30 November 2005
|
Transferring Department |
Original Budget R'm |
Adjustments R'm |
Adjusted Budget R'm |
Expenditure R'm |
Exp as % ofbudget % |
|
Agriculture |
23,088 |
49,889 |
72,977 |
24,965 |
34.2 |
|
Education |
61,764 |
15,890 |
77,654 |
38,543 |
49.6 |
|
Health |
759,278 |
(4,634) |
754,644 |
450,855 |
59.7 |
|
Housing |
408,093 |
99,787 |
507,880 |
237,320 |
46.7 |
|
National Treasury |
220,921 |
12,085 |
233,006 |
152,919 |
65.6 |
|
Social Development |
4,015,444 |
38,662 |
4,054,106 |
2,353,831 |
58.1 |
|
Sport and Recreation SA |
2,670 |
° |
2,670 |
2,213 |
82.9 |
|
TOTAL |
5,491,258 |
211,679 |
5,702,937 |
3,260,646 |
57.2 |
Agriculture - Expenditure on C-grants
|
Grant |
Original Budget R'm |
Adjustments R'm |
Adjusted Budget R'm |
Expenditure R'm |
Exp as % ofbudget % |
|
Comprehensive Agricultural Support Programme |
21,088 |
15,375 |
36,463 |
13,036 |
35.8 |
|
LandCare Programme: Poverty Relief and Infrastructure Development |
2,000 |
1, 514 |
3,514 |
2,198 |
62.5 |
|
Agricultural Disaster Management |
° |
33,000 |
33,000 |
9,731 |
29.5 |
|
TOTAL |
23,088 |
49,889 |
72,977 |
24,965 |
34.2 |
AGRICULTURE - EXPENDITURE ON C-GRANTS ( CONTINUE)
Agriculture spent 34,2 % or R25 m of their adjusted allocation of R72,977 m.
Projects to break even.'
Local Government and Housing - Expenditure on C-grants
|
Grant |
Original Budget R'm |
Adjustments R'm |
Adjusted Budget R'm |
Expenditure R'm |
Exp as % of Budget% |
||
|
Provincial Project Management Capacity for Municipal Infrastructure Development |
0 |
1,923 |
1,923 |
1,129 |
58.7 |
||
|
Local Government Capacity Building Fund |
0 |
13,813 |
13,813 |
6,301 |
45.6 |
||
|
Housing Subsidy |
398,618 |
72,843 |
471,461 |
220,603 |
46.8 |
||
|
Human Settlement and Redevelopment |
9,475 |
11,208 |
20,683 |
9,287 |
44.9 |
||
|
TOTAL |
408,093 |
99,787 |
507,880 |
237,320 |
46.7 |
||
LOCAL GOVERNMENT AND HOUSING - . EXPENDITURE ON C-GRANTS (CONTINUE)
Local Government and Housing spent 46, 7 % or R237 million of their adjusted budget of RS08 million.
Projects to spend the total allocation for Conditional Grants.
Education - Expenditure on C-grants
|
Grant |
Original Budget R'm |
Adjustments R'm |
Adjusted Budget R'm |
Expenditure R'm |
Exp as % of Budget% |
|
HIV and Aids (Life Skills Education) |
7,947 |
455 |
8,402 |
4,467 |
53.2 |
|
Primary School Nutrition Programme |
53,817 |
14,698 |
68,515 |
33,321 |
48.6 |
|
Early Childhood Development |
0 |
737 |
737 |
755 |
102.4 |
|
TOTAL |
61,764 |
15,890 |
77,654 |
38,543 |
49.6 |
EDUCATION - EXPENDITURE ON C-GRANTS ( CONTINUE)
Education spent 49,6 % or R38 million of their adjusted allocation of R77,7 m.
Projects to spend the total allocation for Conditional Grants, with a slight under expenditure of R3 000 on Primary School Nutrition grant.
Health - Expenditure on C-grants
|
Grant |
Original |
Adjustments |
Adjusted |
Expenditure |
Exp as % of |
|
Budget |
Budget |
budget |
|||
|
R'm |
R'm |
R'm |
R'm |
% |
|
|
Health Professions Training & Development |
92,517 |
0 |
92,517 |
78,380 |
84.7 |
|
Comprehensive HIV and Aids |
100,874 |
0 |
100,874 |
46,631 |
46.2 |
|
Hospital Management & Quality Improvement |
13,393 |
0 |
13,393 |
5,860 |
43.8 |
|
Hospital Revitalisation |
113,082 |
(7, 000) |
106,082 |
28,700 |
27.1 |
|
Integrated Nutrition Programme' |
7,296 |
0 |
7,296 |
3,906 |
53.5 |
|
National Tertiary Services |
432,116 |
0 |
432,116 |
287,378 |
66.5 |
|
Forensic Pathology Services |
2,366 |
2,366 |
0 |
0 |
|
|
TOTAL |
759,278 |
(4,634) |
754,644 |
450,855 |
59.7 |
HEALTH - EXPENDITURE ON C-GRANTS . ( CONTINUE)
Health spent 59, 7 % or R451 million of their adjusted budget amounting to R755 million.
Projects to spend total conditional grant allocation, except iro Hospital revitalisation (projects to spend 63 %)
Social Development - Expenditure on C-grants
|
Grant |
Original |
Adjustments |
Adjusted |
Expenditure |
Exp as % of |
|
Budget |
Budget |
budget |
|||
|
R'm |
R'm |
R'm |
R'm |
% |
|
|
Social Assistance Admin |
232,876 |
0 |
232,876 |
99,818 |
42.9 |
|
Social Assistance |
3,725,860 |
0 |
3,725,860 |
2,215,898 |
59.5 |
|
Transfers |
|||||
|
Integrated Social |
37,334 |
37,320 |
74,654 |
31,192 |
41.8 |
|
Development Services |
|||||
|
HIV and Aids |
19,374 |
1,342 |
20,716 |
6,923 |
33.4 |
|
(Community-Based Care) |
|||||
|
TOTAL |
4,015,444 |
38,662 |
4,054,106 |
2,353,831 |
58.1 |
SOCIA I DEVELOPMENT - EXPEND ITU RE ON C-GRANTS (CONTINUE).
Social Development spent 58, 1 % or R2, 354 billion of their adjusted allocation of R4 billion.
Projects to spend 92 % of the total allocation for Conditional Grants.
Sport - Expenditure on C-grants
|
Grant |
Original |
Adjustments |
Adjusted |
Expenditure |
Exp as % of |
|
Budget |
Budget |
budget |
|||
|
R'm |
R'm |
R'm |
R'm |
% |
|
|
Mass Sport & Recreation |
2,670 |
0 |
2,670 |
2,213 |
82.9 |
|
Participation Programme |
|||||
|
TOTAL |
2,670 |
0 |
2,670 |
2,213 |
82.9 |
SPORT – EXPENDITURE ON C- GRANTS (CONTINUE)
Sports spent 82,9% or R2.7 million
Projects to spent for allocation for Grants
National Treasury (Provincial Infrastructure. grant) - Expenditure per department
|
Grant |
Original |
Adjustments |
Adjusted |
Expenditure |
Exp as % of |
|
Budget |
Budget |
budget |
|||
|
R'm |
R'm |
R'm |
R'm |
0/0 |
|
|
Health |
46,818 |
0 |
46,818 |
19,712 |
42.1 |
|
Education |
55,913 |
4,346 |
60,259 |
60,259 |
100 |
|
Public Works, Roads & |
82,983 |
0 |
82,983 |
50,969 |
61.4 |
|
Transport |
|||||
|
Agriculture |
16,569 |
7,739 |
24,308 |
16,563 |
68.1 |
|
Social Development |
18,638 |
0 |
18,638 |
5,416 |
29.1 |
|
TOTAL |
220,921 |
12,085 |
233,006 |
152,919 |
65.6 |
National Treasury (Provincial Infrastructure. grant) - Expenditure per department (continue)
The allocation iro of this grant was excluded in the above-mentioned reporting of each department of the National Treasury grant 65, 6 % or R152, 9 million was spent of the adjusted allocation amounting to R233 million.
The departments who benefit from this grant are Health (20, 1%), Education (25, 9%), Social Development (8%), Agriculture (10, 4%), Works, Roads & Transport (35, 6%).
Health projects to under spend by R11, 8 million or 25 % and Social Development by R1 million or 3, 8%
PAYMENT FOR CAPITAL ASSETS
|
DEPARTMENTS |
ACT |
PROJ |
TOTAL |
ADJ |
O/U |
% |
% |
% |
|
EXP |
BUD |
DIU |
SPENT |
PRDJ |
||||
|
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
|
Education |
27 |
55 |
82 |
82 |
0 |
0 |
33 |
67 |
|
Health |
90 |
105 |
195 |
255 |
60 |
24 |
35 |
41 |
|
Sac |
9 |
11 |
20 |
22 |
2 |
11 |
39 |
49 |
|
Development |
||||||||
|
Public Works |
95 . |
121 |
215 |
209 |
(6) |
(3) |
45 |
58 |
|
Agriculture |
28 |
29 |
57 |
57 |
0 |
0 |
49 |
50 |
|
Sport |
7 |
19 |
26 |
26 |
0 |
0 |
28 |
72 |
|
Tourism |
2 |
7 |
9 |
14 |
5 |
38 |
12 |
50 |
INFRASTRUCTURE SPENDING
Adjusted Infrastructure Budget: R1, 103 billion
Actual expenditure for 8 months: R638, 718 million
Percentage spent: 58 per cent
ON ACTION TAKEN TO AVERT UNDERSPENDING
PT is co-ordinating a provincial programme steering committee where infrastructure spending is discussed
Infrastructure unit in PT has been established
IDIP to assist in addressing identified deficiencies in Infrastructure Delivery Management (Toolkit)
PLANNING PROCESS
Infrastructure plans for 2006/07 have being received from departments and forwarded to NT.
18 contracts for 2006/07 finalised by DPW
5 projects to be finalised soon
The rest to be confirmed and finalised soon
CONCLUSION
Considering the fact that the Department of Social Development's projected under expenditure of R327 million takes the biggest share in terms of overall net projected under expenditure of the province, it is our view that departments need to improve their . spending with regard to Conditional Grants and Capital expenditure in order to avoid huge understanding.
THANK YOU