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PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATION

PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATION. DIRECTORS’ GENERAL: MR. E AFRICA PROF. MC NWAILA 16 November 2011. OUTLINE OF THE PRESENTATION. 1. Introduction 2. Adjusted Estimates Expenditure of

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PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATION

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  1. PRESENTATION TO THE STANDING COMMITTEE ON APPROPRIATION DIRECTORS’ GENERAL: MR. E AFRICA PROF. MC NWAILA 16 November 2011

  2. OUTLINE OF THE PRESENTATION 1. Introduction 2. Adjusted Estimates Expenditure of National Estimates (AENE) Allocation 2011 3. Explanations 4. Transfers and Subsidies 5. Expenditure on Transfers and Subsidies

  3. 1. Introduction • The purpose of the presentation is to brief Standing Committee on Appropriations on the Departmental Financial Expenditures

  4. 2. ADJUSTED ESTIMATES OF NATIONAL EXPENDITURE (AENE) ALLOCATION 2011 • Roll-overs – R5.6 million • Programme 6: Infrastructure and Economic Development • R5.6 million has been rolled over to establish 18 committed employment sites for the community work programme. • Unforeseeable and unavoidable expenditure – R266.317 million • Programme 3: Governance and Intergovernmental Relations • R266.317 million was granted to the department to pay non-returning local councillors whose term has ended after the 18 May 2011 elections as a once-off gratuity • Adjustments due to significant and unforeseeable economic and financial events • Programme 5: Provincial and Municipal Government Systems • An additional amount of R2.165 million has been allocated for higher personnel remuneration increases than the main budget provided for. • Declared savings • Programme 1: Administration • Savings of R3 million have been declared due to under-spending on computer services. • Virement • All Programmes: • Compensation of employees has been increased by R6 million to cater of prioritised posts • Programme 6: Infrastructure and Economic Development: R17 880 has been allocated for establishment and support of co-operatives at the local level (SANACO)

  5. Adjusted Estimates of National Expenditure 2011 • Roll-overs – R5.600 million R5.600 million has been rolled over to implement 18 committed sites for the CWP programme • Unforeseeable and unavoidable expenditure – R266 317 million An amount of R266 317 million was granted to the department as a new transfer payment to Municipal Councillors Pension Fund. • R3 million was surrendered to National Treasury as a contribution to the National fiscus.

  6. 3. Explanations • The low expenditure of 39.5% was due to work that was previously done by consultants which is now done in-house after employing skilled officials during restructuring. • The Committee should note that the R266.3 million allocated to the department during the Adjusted Estimates was not as a result of a request for roll-over but a request for unforeseeable and unavoidable to the department to pay non-returning local councillors whose term has ended after the 18 May 2011 elections as a once-off gratuity. • The deviation of section 43 (2) of the PFMA on shifting of 9.8 per cent within Programme 2 to Programme 6 was due to low expenditure after the contract of ICT came to an end and the department elected to perform this task in-house. As a result there were savings anticipated which was disclosed to and approved by National Treasury. This approval was done in accordance with section 43 (1) • The Shifting of R38.4 million was done because when the Siyenza Manje programme was transferred to COgTA, the sole intention was to create an entity called Municipal Infrastructure Support Agency (MISA) but since the process of establishing an new entity was not yet finalised, National Treasury approved that only 20% could be shifted to current expenditure for the continuation of the programme. • National Treasury requested departments to declare efficiency savings back to the fiscus and the Department was able to reprioritise and surrender R3 million. • The R5.6 million rollover was requested to establish 18 committed employment sites for the community work programme that were delayed in the 2010/11 financial year.

  7. 4. TRANSFERS AND SUBSIDIES

  8. 5. Expenditure on Transfers and Subsidies • Transfers and Subsidies: Equitable Share, Municipal Share, Municipal Infrastructure grants transfers were made according to their cash flow with the exception of MSIG grant where only 71% was transferred due to 14 municipalities grants which were withheld due to non compliance. • MISA: The Department has recently signed a contract with Development Bank of Southern Africa (DBSA). The contract entails that all procurement processes would be done by the DBSA except for certain listed items; the first payment of R49.1 million has been paid over to DBSA. • Transfers to ULGA are still under management consideration in consultation with the Executive on the best manner disburse the allocation.

  9. THANK YOU

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