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Presented by: Acting Director-General Mandisa Fatyela --Lindie

Standing Committee on Appropriation Programme 4 th Quarter Financial Performance - 2011/12 Financial year 05 September 2012. Presented by: Acting Director-General Mandisa Fatyela --Lindie. Presentation Outline. 1. Budget outcome for 2011/12 will include:

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Presented by: Acting Director-General Mandisa Fatyela --Lindie

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  1. Standing Committee on Appropriation Programme4th Quarter Financial Performance- 2011/12 Financial year05 September 2012 Presented by: Acting Director-General Mandisa Fatyela --Lindie DPW Briefing to SCOA – 05 September 2012

  2. Presentation Outline 1. Budget outcome for 2011/12 will include: • Expenditure summary and programmes • Monthly expenditure trend • Notes to expenditure • Monthly expenditure analysis • Infrastructure Performance • EPWP Performance DPW Briefing to SCOA – 05 September 2012

  3. Preliminary Expenditure Report – Programme summary DPW Briefing to SCOA – 05 September 2012

  4. Preliminary Expenditure Report – Economic classification DPW Briefing to SCOA – 05 September 2012

  5. Programme 1: Expenditure per economic classification DPW Briefing to SCOA – 05September 2012

  6. Programme 2: Expenditure per economic classification DPW Briefing to SCOA – 05 September 2012

  7. Programme 3: Expenditure per economic classification DPW Briefing to SCOA – 05 September 2012

  8. Programme 4: Expenditure per economic classification DPW Briefing to SCOA – 05 September 2012

  9. Programme 5: Expenditure per economic classification DPW Briefing to SCOA – 05 September 2012

  10. Notes to expenditure - 2011/12 Compensation of employees • Expenditure for the year ended March 2012 is R1.270 billion and expenditure is equivalent to 101% of the total allocation of R1.253 billion. • Overspending on compensation of employees is R17 million and overspending is on both Programme 1 and 2. • Overspending in Programme 1 has been disclosed as unauthorised expenditure in the annual report and unauthorised expenditure has been reported to both National Treasury and Office of the Auditor General. DPW Briefing to SCOA – 05 Septemeber2012

  11. Notes to expenditure - 2011/12 Goods and services • Goods and services for the financial year ended March 2012 is R1.035 billion and expenditure is equivalent to 100% of the total allocation of R1.033 billion. • Programme two is overspending on goods and services and overspending relates to energy efficiency project. • Overspending of goods and services is due to advance payment for payment made to Independent Development Trust (IDT) during 2010/11 financial year with the roll over not being approved by National Treasury. • With the project continuing during 2011/12 financial year expenditure incurred was included with no allocation and therefore leading to overspending. DPW Briefing to SCOA – 05 September 2012

  12. Notes to expenditure - 2011/12 Transfers and subsidies • Expenditure on transfers and subsidies for the financial year ended March 2012 is R3.656 billion and expenditure is equivalent to 91% of the total allocation of R4.010 billion. • Under spending on transfers and subsidies relates conditional grant allocation to provinces and municipalities for EPWP infrastructure. • Programme 4 is over spending on transfers and subsidies and expenditure relate to payment made to Agrement South Africa. DPW Briefing to SCOA – 05 September 2012

  13. Notes to expenditure - 2011/12 Payments for capital assets • Capital assets expenditure for the financial year ended March 2012 is R1.011 billion and expenditure is equivalent to 71% of the total allocation of R1.528 billion. • Under spending on payments for capital assets relate infrastructure with the budget of R425 million not being spent at the end of the financial year. • Under spending on machinery and equipment is equivalent to 5% (R3.9 million) of the total allocation of R91.6 million. DPW Briefing to SCOA – 05 September 2012

  14. Infrastructure Performance • By end of year R 720 493 048 was committed to Project on Construction (Stage 5A-7) • R 247 630 198 was for Project not issued for implementation (Stage 2- 3) • R 96 721 281 for Projects on Design - Tender stages DPW Briefing to SCOA – 05 September 2012

  15. REASONS FOR UNDER EXPENDITURE OF BUDGET • National Treasury Policy Instruction: For the period from May 2011 to July 2011, tender process was interrupted by the NT Circular requesting projects procurement information for concurrence. Three month was lost while awaiting concurrence to advertised. • Planning and registering projects while having money on hand remain problematic. Ideally the building program must be completed prior to requesting funds from National Treasury. • Program Approved (Workshops, Water Operators Program, Horticulture Program at Port of Entries) were not allocated funds from DPW Capital - Suspension of Programs. • Low Expenditure of Allocation by IDT (School Program) affects transfer of Funds • Late issuing of Procurement Instructions in particular for Accessibility Program. Funded PI where confirmed in September 2011 for implementation in same year. • Instability of project leadership at Regional Offices were head of Projects Positions cannot be filled (Pretoria, Mmabatho, and Polokwane) due to lower classification of the Post and Strict Criteria of OSD. DPW Briefing to SCOA – 05 September 2012

  16. Performance on the EPWP integrated incentive by Provinces after the 3rd quarter of the 11/12 financial year reporting (Paid in the 4th quarter of 11/12) DPW Briefing to SCOA – 05 September 2012

  17. Performance on the EPWP integrated incentive by Municipalities after 3rd quarter 11-12 reporting ( Paid in the 4th quarter 11-12 ) DPW Briefing to SCOA – 05 September 2012

  18. Causes of low Incentive draw-down Poor or under reporting on EPWP work opportunities created on projects. The amount of incentive paid to Public bodies is dependent on reporting by Public bodies. Low Labour-intensity of projects being implemented by Public bodies. Poor technical capacity at Public bodies to design and implement projects labour-intensively. DPW Briefing to SCOA – 05 September 2012

  19. Measures taken to improve performance EPWP unit officials and Data Capturers are helping Public bodies collect EPWP information for reporting. Municipal Officials are being trained in Labour-intensive methods of construction. Over 1,000 officials had been trained in this regard in the 11/12 financial year. Public body officials are being trained on reporting, so that they have improved capacity to report. EPWP incentive grant has been revised from a schedule 8 grant to a schedule 5 and 6 grant for Provincial Departments and Municipalities respectively. 40% of the incentive is being upfront to Public bodies. It enables better planning by Public bodies. DPW Briefing to SCOA – 05 September 2012

  20. Thank you DPW Briefing to SCOA – 05 September 2012

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