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2006/07 CONDITIONAL GRANTS AND CAPITAL EXPENDITURE (THIRD QUARTER )

2006/07 CONDITIONAL GRANTS AND CAPITAL EXPENDITURE (THIRD QUARTER ). Gauteng Treasury 12 February, 2006. PRESENTATION OUTLINE. EXPENDITURE STATUS OF THE PROVINCE EXPENDITURE ON CONDITIONAL GRANTS SERVICE DELIVERY PER DEPARTMENT EXPENDITURE ON CAPITAL BUDGET

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2006/07 CONDITIONAL GRANTS AND CAPITAL EXPENDITURE (THIRD QUARTER )

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  1. 2006/07 CONDITIONAL GRANTS AND CAPITAL EXPENDITURE (THIRD QUARTER) Gauteng Treasury 12 February, 2006

  2. PRESENTATION OUTLINE • EXPENDITURE STATUS OF THE PROVINCE • EXPENDITURE ON CONDITIONAL GRANTS • SERVICE DELIVERY PER DEPARTMENT • EXPENDITURE ON CAPITAL BUDGET • SERVICE DELIVERY PER DEPARTMENT • EXPENDITURE CHALLENGES • INTERVENTIONS BY TREASURY

  3. Purpose To provide the National Council of Provinces (NCOP) with an overview of Conditional Grant and Capital Expenditures in the Gauteng province during the First Three quarters of the 2006/07 Financial year.

  4. EXPENDITURE STATUS IN THE PROVINCE

  5. Consolidated Revenue & Expenditure

  6. Revenue Receipts • A total of R33,864 billion is estimated at the end of the financial year : • This consists of : • R1,927 billion of own revenue. • R8,744 billion of conditional grants. • R23,362 billion from the equitable shares. Total revenue of amounting to R25,589 billion was received for the third quarter ending in December, 2006.

  7. Expenditure position • R23,448 billion was spent this quarter • There is a projected overspending of R168 million as total expenditure is anticipated to exceed estimated revenue.

  8. RECEIPTS AND EXPENDITURE ON CONDITIONAL GRANTS

  9. Conditional Grants Receipts 2006/07 • R 8,937 billion was allocated to the province as conditional grants for 2006/07 financialyear . • R6,321 billion has been received to date by Departments against R 6,237 billion as per payment schedule.

  10. CONDITIONAL GRANTS EXPENDITURE

  11. CONDITIONAL GRANTS EXPENDITURE ( Continue )

  12. Overall Conditional Grants Performance , 2006/07 (Third Quarter) • Aggregate Spending Position • R 5,808 billion was spent against the projections of R6,237 billion (under spending of R429,260million ) • Lowest performance : Landcare (R79,000 or 2,1%), Mass Sport and Recreation participation (R2,866 million or 17%), and CASP (R2,3692 million or 34,5%). • High Performance: FET ( R106,000 million or 100%) , and Comprehensive HIV & AIDS (R287,411 million or 106%).

  13. Agriculture • Expenditure Analysis • The CASP program had spent 34,5% of the allocated budget of R6,873million by the end of the third quarter of 2006/07, with R1,916million expected to be spent during the fourth quarter; • CASP is expected to underspend by 37,7% (R2,588million) during the current financial year • LCP only spent R79,000 during the first three quarters and is expected to spend R3,115million during the fourth quarter. The program will overspend by 2,5% of its budget allocation. • R3,115million (in February 2007) to Rand Water for the eradication of alien vegetation in Elandsfontein and Mogale City. A request , was sent t indicate whether this amount has been spent by the implementing agency . • A financial commitment for Q4 on CASP has been requested to the department.

  14. EDUCATION

  15. EXPENDITURE ANALYSIS • HIV/AIDS (Life Skills Education) reflects low spending (55,2%), suggesting that not all funds may be used • National School Nutrition Programme is just below benchmark 75% of expenditure by end of Q3, may still be fully utilised • Dept projects to spend entire 2006/07 allocation of conditional grants

  16. OVERALL EXPENDITURE • R225,9 million allocated to three grants • Overall expenditure as at end December R187,4 million • Percentage of grants spent as at end December 83% • FET College Recapitalisation fully spent (transferred) • HIV/AIDS Life Skills grant only 55,2% spent

  17. HEALTH

  18. EXPENDITURE ANALYSIS • Comprehensive HIV/AIDS expenditure greatly exceeded allocation, with R287, 4 million spent against R252, 7 million allocated and R193, 9 million received as at 31 December 2006; • Forensic Pathology Services still reflecting low expenditure, with R35, 1 million spent as at end-December 2006 against allocation of R76, 8 million; despite projections, runs risk of under-expenditure; • Health Professions Training and Development, Hospital Revitalisation and National Tertiary Services are on track in terms of expenditure.

  19. HOUSING • Financial Performance • 69,2 percent of the Integrated Housing And Human Settlement Development grant has been spent for • the last nine months. • 33 percent of the Alexandra Urban Renewal grant was spent during last nine months • Long Environmental Impact Assessment process has delayed the implementation of the project • The department projects to spend all budget by end of financial year

  20. Provincial Infrastructure Grant (PIG) • Expenditure Analysis • R 218, 54 million was spent by the participating Departments ( Education, Health and Transport ) during • the third quarter; • No transfers were received from national for the first and second; quarter (Due to Non reporting - • compliance by departments) • Transfers from National Treasury were received in December 2006 ( R138,667) • Infrastructure specialist from Gauteng Treasury continue provide support to departments in cleaning the database for infrastructure and populating the Infrastructure reporting model

  21. SPORTS AND CULTURE • Expenditure Analysis • Significant under-spending in Sports has been observed this quarter ( 18 %) of the R15million transferred from national; • The low spending is a concern • A financial commitment Report requested by GT for Quarter fours shows that: • R7,880,624 has been committed to the Siyadlala project • R1,999,626 has already been paid January to service providers • This leaves an amount of R6,074million to be spent during February and March 2007

  22. DEPARTMENT OF PUBLIC TRANSPORT, ROADS &WORKS • Spending on Gautrain remain the same as in Q2 at R1,756 billion and project to spend R2, 885 in the last quarter • The department has been requested to submit a detailed financial plan for Q4

  23. RECEIPTS AND EXPENDITURE ON CAPITAL BUDGET

  24. Capital Budget Receipts • Capital programme includes payments for capital assets within departments and Capital Transfers; • Capital transfers includes housing programmes and special infrastructure development projects (to accelerate economic growth); • Total Adjusted budget for capital transfers amounts to R 6,858 million; • Total Adjusted budget for payments of capital amounts to R2,618 billion and the largest share goes to the Departments of Health ( R1 billion) and Education( R723 million).

  25. PAYMENTS FOR CAPITAL ASSETS

  26. AGREGGATE CAPITAL EXPENDITURE • R 1,6 billion or 60% percent was expended as at the end of December, with the projected expenditure of R 1,1billion for the fourth quarter.

  27. LOW SPENDING DEPARTMENTS • Community Safety (6%) of its total budget • Sports and Culture (37 %); • No Reason provided • Office of the Premier ( 29%) • No Reason provided • Local Government ( 1%) • No reason provided • Provincial Legislature ( 45%) • No reason provided • There is Risk of Under spending in this departments

  28. HIGH SPENDING DEPARTMENTS • Department of Health ( 71%); • The department is experiencing budget pressures on capital projects, due to increase in construction costs and fast tracking of projects • Although some departments project an overspending , but the average spending rate is low (50%) • Department is projecting an over expenditure (informed to keep their spending within the budget)

  29. SERVICE DELIVERY

  30. AGRICULTURE

  31. EDUCATION

  32. EDUCATION (Project Type)

  33. HEALTH

  34. HOSPITAL REVILITISATION • Chris Hani Baragwanath Hospital: new AE&T OPD, pharmacy relocation and demolition • Project is 25% complete. • Chris Hani Baragwanath Hospital level 1: new 300 bed hospital • Phase I comprising of bulk earthworks and enabling works and the progress is 30% complete • Phase II tender documentation is ready for procurement • Germiston Hospital: new 300 bed hospital • Phase i comprising of earthworks, progress is 65% complete • Phase ii tender documentation is ready for procurement • Mamelodi Hospital: new 300 bed hospital • Construction has commenced and the progress is 75%.

  35. DEPARTMENT OF HOUSINGAlexandra Renewal

  36. DEPARTMENT OF HOUSING

  37. ECONOMIC SECTOR (ROADS)

  38. SPORTS AND CULTURE

  39. SPORTS AND CULTURE (Project Type)

  40. PUBLIC TRANSPORT ROADS AND WORKS

  41. Challenges in Implementing Conditional Grants and Capital Budgets • Absence of Integration in Infrastructure and Capital projects Planning; • Absence of Infrastructure Planning and Budgeting Skills; • Incorrect Data in the IRM (Infrastructure Reporting Model)

  42. Proposed Intervention by Treasury Intervention • Infrastructure specialists have been appointed and will focus on monitoring and evaluation of the IRM information to improve reporting on capital projects; • Treasury would encourage the utilisation of Infrastructure Delivery Improvement Program to help integrate planning , budgeting and reporting cycles; • Treasury conducted a rigorous analysis of departments projections in Q3 and made recommendation to surrender funds for reallocation in some departments.

  43. END OF PRESENTATION THANK YOU

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