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PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE ON TUESDAY 19 SEPTEMBER 2006

PRESENTATION INFRASTRUCTURE SPENDING – 31 AUGUST 2006 Department of Agriculture, Conservation and Environment. PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE ON TUESDAY 19 SEPTEMBER 2006 V454 (OLD ASSEMBLY) PARLIAMENT. COMPARISON OF SPENDING TRENDS BASED ROLL-OVER FUNDS.

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PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE ON TUESDAY 19 SEPTEMBER 2006

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  1. PRESENTATION INFRASTRUCTURE SPENDING – 31 AUGUST 2006Department of Agriculture, Conservation and Environment PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE ON TUESDAY 19 SEPTEMBER 2006 V454 (OLD ASSEMBLY) PARLIAMENT

  2. COMPARISON OF SPENDING TRENDS BASED ROLL-OVER FUNDS CONTENTS • High Impact Projects • Efforts to Spend DoRA funds • Summary of Financial Performance (1st Quarter) • Capital Expenditure • Amount Rolled-over 2005/06 Financial year • Comparison of Spending Trends based on Roll-over Funds • Analysis spending (including Commitments) • Challenges and Measures Taken

  3. HIGH IMPACT PROJECTS – 2005/06 • Some of the major projects approved and implemented during 2005/06 financial year: • Doornlaagte Livestock Water • Mampa Beef Cattle • Nocolasdoorlaagte Livestock Water • Livestock Handling Facilities in all the Districts • Shiela/Mooifontein Soil Fertility improvement Project • Reseoposengwe Trust in Bophirima • Boskop Community Trust in Southern • Mosita Beef Project in Bophirima The Department could not complete all the projects and implementation of these is continuing in the current financial year

  4. 2006/07 EFFORTS TO SPEND DORA FUNDS • Meeting held with officials of National Department of Agriculture (NDA) • Visits by NDA officials and impediments to implementation and expenditure on projects highlighted • Lack of capacity with respect to Engineers and Economists (for design and business planning) • Project management capacity • Procurements processes (increased delegations) • A detailed schedule of spending roll-over funds agreed • Schedule submitted to NDA through Provincial Treasury • Financial results of the first quarter indicated an improvement in infrastructure spending – R16,5 million including earmarked funds from the province

  5. SUMMARY OF FINANCIAL INFORMATION FOR 30 JUNE 2006

  6. FINANCIAL PERFORMANCE FOR THE MONTH ENDING 30 JUNE 2006 • Financial performance was brought in for the purpose of determining the position of infrastructure spending as at the 1st Quarter. • Total infrastructure spending including earmarked funds amounted to R16.7 million

  7. CAPITAL EXPENDITURE • An amount of R2,5 million made up as: • Equipment R1 486 • Land & Buildings R 504 • Other R 512 Spending as at 31 August 2006 for Equipment amounts to R521 • Equipment – includes purchase of laboratory equipment for Research & Technology and replacement of computer equipments • Land & Buildings – fencing around the Agricentre Building • Other – installation of the security system in the Agricentre Building

  8. AMOUNT ROLLED-OVER FROM 2005/06 FINANCIAL YEAR

  9. COMPARISON OF SPENDING TRENDS BASED ON ROLL-OVER FUNDS • As at the end of the previous financial year 10.7% of the allocated funds were spend • As previously reported Agriculture Disaster Management Grant was not spend as at the end of the financial year • The spending pattern for the current financial year indicates that the Department has overcome most of the implementation problems

  10. 2006/07 SPENDING (FROM ROLL-OVER FUNDS)

  11. ANALYSIS OF SPENDING – 31 AUGUST 2006 • 29.5% of the roll-over funds were spend as at the first quarter of the current financial year • 57.5% of the roll-over funds were spend as at 31 August 2006 • Agricultural Disaster Management Grant was mainly spend in the Bophirima District • Commitments were considered as a measure to test the feasibility of the plans put in place to improve service delivery with respect to infrastructure spending (these are not meant to form part of the measure for spending)

  12. SPENDING INCLUDING COMMITMENTS31 AUGUST 2006

  13. TOTAL SPENDING ON DORA FUNDS INCLUDING COMMITMENTS TO DATE • Commitments to date include the order for bulk fencing for identified projects in the Province (delivery expected in September 2006) • Expenditure, including commitments indicates that the province will spend all the roll-over funds by 30 Sept 2006 as planned • An excess spending on roll-over funds is possible due to the existence of the current year budget funds

  14. 2006/07 SPENDING (FROM ROLL-OVER FUNDS)

  15. CHALLENGES AND MEASURES TAKEN • CHALLENGES • The under-expenditure in relation to both the Land Care and CASP is mainly of the following factors: • Individual item procurement of services per project • Misunderstanding between the national and provincial managers about flexibility and power to change projects • Shortage of specialist skills (Project management, economist and engineers) • Constraints imposed by financial delegations at the beginning of 2004/2005. • Establishment of the Supply Chain Unit and training of members of the DPC

  16. CHALLENGES AND MEASURES TAKEN • MEASURES TAKEN • Implementation of Bulk Procurement Systems • Increased in financial delegation to responsible officials • Outsourcing of specialist skills • Projects affected by unforeseen circumstances and which will not able to spend are now reviewed and new ones approved from time to time. • Establishment of the Supply Chain Management Unit and restructuring of the Departmental Procurement Committee. • Monthly reports form responsible officials discussed regularly to ensure timeous interventions

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