FIRST QUARTER 2010-11 NATIONAL VOTE
SPENDING TRENDS REVIEW
| 25 August 2010
Agenda
• Introductions
• Spending overview
– Report structure
– Aggregate spending trends
– First quarter provincial budget and expenditure report
• Sector spending trends
• Selected votes
1. Health
9. CoGTA
17. EDD
2. DSD
10. Communications 18. Environment
3. Basic Education
11. Energy
19. DMR
4. Higher Education 12. Transport
20. RDLR
5. Corrections
13. DHS
21. DST
6. Defence
14. Water Affairs
22. Tourism
7. Justice
15. DPE
23. DTI
8. Police
16. Agriculture
2
Introductions
•
•
•
•
•
Mark Blecher (Health and Social Development CD)
Rendani Randela (Justice and Protection Services CD)
Devan Naidoo (Economic Services CD)
Petrus Matji (Urban Development and Infrastructure CD)
Robert Clifton (Technical Assistance Unit CD)
3
Spending overview - Report structure
• Cover spending by national government department for the first
quarter 2010-11 financial year, which ended 30 June 2010
• Produced in terms of Section 32 of the PFMA
• Information sourced from Section 40 (4) PFMA reports submitted to
the National Treasury 15 days after the end of each month
• Contains:
– 77 page Excel spreadsheet including summary per vote spending
per economic classification and detailed vote spending per
Appropriation Act items
– 102 page vote spending trends analysis detailing per vote
• Total spending trends
• Economic classification trends
• Programme trends
• Other relevant spending issues
• For consideration: Develop a standing agreement with the committee
in terms of form, content and timeframes for the report
4
Spending overview – Excel report
structure
Expenditure per Appropriation Act, 2010
4
Main
appropriation
Shifts and
Virements
Available
budget
Year-to-date
actual
expenditure
Percent of
budget
expended
R'000
R'000
R'000
R'000
%
HOME AFFAIRS
Current Payments
Compensation of Employees
Goods and Services
Other
Transfers and Subsidies
Payments for Capital Assets
Payments for Financial Assets
5,719,584
3,992,428
1,896,203
2,096,225
1,587,837
139,319
-
-
5,719,584
3,992,428
1,896,203
2,096,225
1,587,837
139,319
-
942,425
633,647
442,468
191,179
291,025
17,753
-
16.48
15.87
23.33
9.12
ADMINISTRATION
Current Payments
Compensation of Employees
Goods and Services
Other
Transfers and Subsidies
Payments for Capital Assets
Payments for Financial Assets
1,470,926
1,371,767
289,966
1,081,801
1,338
97,821
-
-
1,470,926
1,371,767
289,966
1,081,801
1,338
97,821
-
142,045
130,947
62,382
68,565
195
10,903
-
9.66
9.55
21.51
6.34
SERVICES TO CITIZENS
Current Payments
Compensation of Employees
Goods and Services
Other
Transfers and Subsidies
Payments for Capital Assets
Payments for Financial Assets
1,446,011
1,401,247
845,431
555,816
3,266
41,498
-
-
1,446,011
1,401,247
845,431
555,816
3,266
41,498
-
307,838
300,159
255,247
44,912
850
6,829
-
21.29
21.42
30.19
8.08
IMMIGRATION SERVICES
Current Payments
Compensation of Employees
Goods and Services
Other
Transfers and Subsidies
Payments for Capital Assets
Payments for Financial Assets
1,219,694
1,219,414
760,806
458,608
280
-
-
1,219,694
1,219,414
760,806
458,608
280
-
198,430
202,403
124,701
77,702
(3,994)
21
-
16.27
16.60
16.39
16.94
TRANSFERS TO AGENCIES
Current Payments
Compensation of Employees
Goods and Services
Other
Transfers and Subsidies
Of which
Departmental agencies and accounts
– Film and Publication Board: Contribution to operations
– Government Printing Works: Contribution to operations
– Electoral Commission: Contribution to operations
Payments for Capital Assets
1,582,953
1,582,953
55,217
97,228
1,430,508
-
-
1,582,953
1,582,953
55,217
97,228
1,430,508
-
294,112
138
138
293,974
13,803
97,228
182,943
-
18.33
12.74
14.57
11.15
26.03
16.46
-1426.43
18.58
18.57
5
25.00
100.00
12.79
First quarter provincial budget and
expenditure report
• For the committee’s information, the National Treasury’s quarterly
provincial budgets and expenditure report is included in the packet
• The report reviews aggregate spending trends and between
provinces:
• Per major sector (Education, Health, Social Development)
• Per major economic classification (personnel and capital)
• Conditional grants
• Provincial revenues (equitable share and own revenues)
6
Spending overview - Aggregate (‘000)
Proportion of Appropriation
R 900,000,000
R 800,000,000
1%
3%
R 700,000,000
16%
R 600,000,000
R 500,000,000
37%
R 400,000,000
Percent of Appropriation spent
R 300,000,000
R 100,000,000
11%
25%
21%
24%
R0
23%
R 200,000,000
43%
2010-11 Appropriation (with
adjustments) = R812.1b
Payments for capital assets
Payments for financial assets
Current payments
Transfer & subsidies
Direct charges
2010-11 1st quarter spending =
R187.2b (23%)
2010-11 Appropriation (with adjustments) = R812.1b
R 9,314,845
R 20,888,851
R 128,672,018
R 302,642,218
R 350,625,011
2010-11 1st quarter spending = R187.2b (23%)
R 1,056,281
R 5,154,169
R 26,851,470
R 72,437,864
R 81,724,174
7
Spending overview - Current payments (‘000)
R 140,000,000
Proportion of Appropriation
R 120,000,000
36%
R 100,000,000
R 80,000,000
R 60,000,000
64%
R 40,000,000
Percent of Appropriation spent
R 20,000,000
15%
23%
R0
2010-11 Appropriation (with adjustments)
2010-11 1st quarter spending
Other
Goods & Services
Compensation of employees
2010-11 Appropriation (with adjustments)
R 2,253
R 46,825,286
R 81,844,479
2010-11 1st quarter spending
R 1,056
R 7,427,756
R 19,422,658
8
Central Government & Administration
Sector
9
Sector spending trends - Central
Government & Administration ('000)
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
800,000
716,939
10,613
0
275,254
307,558
279,237
212,500
198,657
200,000
1,067,301
400,000
942,425
1,136,797
600,000
1,591,267
1,767,476
1,737,989
1,000,000
The Presidency
Parliament
CoGTA
Home Affairs
Projection
DIRCO
Actual
Public Works
WC&PD
10
Financial & Administrative Services Sector
11
Sector spending trends – Financial &
Administrative services ('000)
600,000
500,000
400,000
300,000
257,337
132351
151,361
165,039
188,955
154,727
175,240
100,000
348,454
200,000
GCIS
National Treasury
Public Enterprises
Projection
DPSA
Actual
Statistics South Africa
12
Social Services Sector
13
Sector spending trends - Social Services
('000)
12,000,000
26,057,926
26,656,053
14,000,000
10,000,000
8,000,000
10,679,261
11,143,059
6,000,000
4,000,000
5,265,523
5,323,069
716,080
734,462
488,061
563,667
1,648,443
482,531
558,241
1,716,410
2,000,000
Arts
Basic Education
Health
Higher Ed
Projection
Actual
Labour
Social Dev
Sport & Rec
14
Selected votes – Health
2010/11
•
•
•
Total expenditure increased from R4.477 billion in June 2009 to R5.265
billion in June 2010 at an annual rate of 17.6 per cent.
The largest expenditure increase is 43.6 per cent in Programme 2, from R1.1
billion by June 2009 to R1.7billion in June 2010, due to the step up for
HIV/AIDS funding.
Spending in Programme 6 decreased by 18.4 per cent from R16 million in
June 2009 to R12 million in June 2010.This is due to the large expenditure
that happened abroad and claimed via Foreign Affairs account which is only
received in 5 months after expenditure incurred.
15
Selected votes – Health
•
•
There is an increase to Payments for Capital due to the finalisation of the
move to the new CIVITAS building. The movement was delayed , but
finally happened between June and July 2010.
Goods and Services increased by 32.3 per cent, while Personnel
spending decreased to 22.4% in June 2010 from 25.7 per cent in June
2009.This is due to the reason that Improvement of Conditions of Services
(salary increase) only started later ( in July) than planned due to the
current wage negotiations.
16
Selected votes – Health
•
•
HIV /AIDS Grant spending increased by 53.1 per cent from R940 million
in June 2009 to R1.4 billion in June 2010 (R1.1 billion spent in
provinces). The step up in HIV/AIDS funding is due to the new policy
announcement by the President during the World AIDS day.
Hospital Revitalisation spending decreased by 5.6 per cent from R1.048
billion in June 2009 to R990 million in June 2010 (R836 million spent in
provinces – 20.8%). Slower than expected spending occurred in:
- Free State – 7.6%
- Kwa-Zulu – 10.5%
- Limpopo – 11.5%
17
Selected votes – Health
• HIV/AIDS
– As announced by President Zuma on World AIDS Day in December
2009, started on 1 April 2010 to provide Antiretroviral Treatment to
pregnant women at CD4 count of 350 or less, to enhance maternal
survival. ART is also being provided to people co-infected with TB
and HIV at a CD4 count of 350 or less
– The new policy resulted to a step up in the HIV/AIDS funding and
expenditure
– Consideration needs to be given to the problems of the vertical
programme and whether the time has come to integrate into PES
18
Selected votes – Health
• Health Infrastructure / Hospital Revitalisaion
– Slow spending on the programme in 2009/10 looks likely to continue
this year
– The department is putting in place various strategies to accelerate
infrastructure delivery.
– These include:
• Employment of additional engineers
• Technical support including IDIP, DBSA
• Strengthening national and provincial programme and project
management
• PPPs
• 5 tertiary hospital projects
– Would be useful to ensure increased oversight of slow spending in
this programme
19
Selected votes – Social Development
•
•
•
•
Expenditure increased from R18.619 billion in 2009/10 to R26.057 billion in 2010/11
at a rate of 39.9 per cent . There was a decrease of 18.4 per cent in Programme 1
from R43.558 million in 2009/10 to R35.524 million in 2010/11 because the lease
payment of accommodation was done in the second quarter.
Programme 2 grew at 40.6 per cent mainly because of the payments of Appeals
Backlog cases and the higher number of beneficiaries that applied for social grants
due to amendments in the means test.
Programme 3 grew at 26.3 per cent mainly because of the first payment for NSFAS
was made for the social workers bursaries.
Programme 4 decreased by 59.8 per cent due to a decrease in the allocation to the
National Development Agency, and programme 5 decreased by 22.1 per cent
because the Appeals Unit was shifted to programme 2.
20
Selected votes – Social Development
•
•
There was an increase of 40.2 per cent in compensation of employees in
2009/10 to 2010/11 due to the filling of vacant posts and the higher inflation
adjusted annual increases as expected.
Goods and Services decreased by 27.8 per cent mainly because of
invoices that were received late and paid in the second quarter. Transfers
and subsidies grew at 40.1 per cent due to the payments of Appeals
Backlog cases and the higher numbers of beneficiaries that applied for
social grants due to amendments in the means test. Payment for capital
assets decreased because of stricter measures taken by department.
21
Selected votes – Social Development
•
•
•
A major policy issue that is currently under reviewing by the South
African Social Security Agency (SASSA) is that a large amount of the
Agency’s administration funds are spent on cash payment contractors.
SASSA is reviewing these cash payments contracts in order to negotiate
cheaper prices which will resulted in a significant savings for the
department and for government as a whole. About 80 per cent of social
grant recipients are currently paid via cash payment contractors at a
significant cost to government.
SASSA is also looking at ways to move beneficiaries to bank accounts
which will also resulted in a significant savings because the bank
charges are much less than the cash payment contractor fees.
22
Selected votes – Basic Education
• Spent R1.6 billion or 27 per cent of the total available budget of R6.1
billion by the end of the first quarter.
• Spending broadly in line with expectations, except in programme 2
• Programme 2 spent R62.8 million or 4.64 per cent of the R1.4 billion
appropriation in this programme. The slower than expected spending is
mainly in goods and services where 3 per cent of allocated funds have
been spent thus far . This is mainly due to:
– delays in the submission of claims for payments related to Kha-RiGude (the adult mass literacy campaign), which will be processed in
Q2; and
– delays in the roll out of the Workbooks project
23
Selected votes – Basic Education
• DBE was allocated R750 million for the provision of workbooks to
Grade R – 7 learners in the 2011 academic year
• None of these funds spent by 30 June, but the process is now
underway
• DBE is employing curriculum and materials development experts on
contract to develop, translate and quality assure the workbooks inhouse rather than tender for outside consultants
• Project split into a Workbook A (for 1st and 2nd terms in 2011) and
Workbook B (for 3rd and 4th terms)
• Planned piloting of workbooks for alternate grades by Sept/Oct – to
be printed and distributed thereafter (the major expenditure)
• Department confident that Workbook A will be at schools and ready
for use by learners at the start of the 2011 school year in January.
• Printing and distribution of Book B thereafter
24
Selected votes – Higher Education
• Spent R10.6 billion or 45% of the total available budget of R23.7
billion
• Spending broadly in line with expectation, with some slow spending
• Spent R58.2 billion of 15% of it current payments allocation, which is
mainly due to:
– Delays in the QCTO project
– Delays in carrying-out he forensic audit of Indlela
– Delays in the submission of accommodation and transport claims
• Transfers: Spent R12.2 billion of the projected R13.1 billion, which is
7% or R881 million less than anticipated mainly because approved
claims for capital grants were less than expected. (i.e., Universities
submit business plans for capital projects, and if approved are paid
according to projections and progress reports)
25
Justice, Crime Prevention & Security Sector
26
Sector spending trends - Justice, Crime
Prevention and Security ('000)
10,000,000
9,000,000
8,000,000
7,000,000
11,874,684
11,878,103
6,000,000
5,000,000
4,000,000
2,199,621
2,533,698
22,731
31,119
3,071,697
1,000,000
3,553,389
2,000,000
5,961,161
5,763,477
3,000,000
Correctional Services
DoD
ICD
Projection
Actual
Justice
Police
27
Selected votes – Correctional Services (‘000)
1,400,000
1,200,000
1,000,000
1,191,820
1,221,635
234,573
390,061
118,612
132,327
108,345
124,180
339,811
363,288
200,000
323,342
350,098
400,000
755,194
600,000
971,800
800,000
Administration
Security
Corrections
Projected Spending Jun-10
care
Development
Social
Reintegration
Facilities
Actual Spending June-10
28
Selected votes – DoD & MV (‘000)
Defence and Military Veterans
29
Selected votes – Justice & CD (‘000)
1,200,000
1,000,000
454,890
482,463
399,077
367,278
602,474
132,909
161,472
125,193
200,000
407,342
400,000
537,445
997,132
600,000
1,004,997
800,000
0
Projection Q1
Actual Q1
30
Selected votes – Police (‘000)
6,000,000
5,000,000
730,017
662,550
441,749
419,210
1,000,000
1,925,448
1,886,902
5,098,761
3,678,709
2,000,000
3,982,848
3,000,000
4,927,239
4,000,000
Administration
Visible Policing
Detective Services
Projection Q1 2010/11
Crime Intelligence
Protection and Security
Services
Actual Q1 2010/11
31
Economic Services Sector
32
Sector spending trends - Economic
Services ('000)
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
800,000
600,000
443,742
491,267
99,201
109,541
249,163
257,372
200,000
404,485
RDLR
431,578
850,610
DAFF
869,124
831,682
919,695
400,000
1,018,270
1,455,749
1,555,926
1,983,554
1,000,000
DST
Tourism
Projection
DTI
Actual
DMR
EDD
DEA
33
Selected votes – Public Enterprises
• R351 million total budget for 2010/11
–
–
–
–
R37 million transfers and subsidies
R175 million current payments
139 million financial assets
R600 thousand capital assets
• Actual expenditure to end of July 2010: R184 million (53%)
–
–
–
–
R45 million (26%) current
R222 thousand (37%) capital assets
R139 million (100%) financial assets - transferred to Broadband Infraco
The only transfer will be to Alexkor in September 2010
• R167 million (47%) unspent
• Spending trends: 2008/09 – 98.6% ; 2009/10 - 99.8%
34
Selected votes – DAFF
• 2010/11 budget R3.6 billion : Q1 expenditure R832m (23%)
• Shifts – Q1 - R28m shifted to various items in programmes
• Transfers – Allocation R1.8 b: Q1 amount transferred R497m
(R28%)
• Spending trends 08/09 - 97% ; 09/10 – 98%
35
Selected votes – Economic Development
•
•
•
•
•
R419 million total budget for 2010/11
– R319 million transfers and subsidies
– R95 million current
– R5 million capital assets
Q1 spending = R99 million (24%)
– R93 million (29%) transfers and subsidies
– R6 million (6%) current
– R1 million (20%) capital assets
R10 million under spent (9% of R109 million in approved drawings for Q1)
– Low spending is due to the large number of vacancies in the department.
Few of the critical positions have been filled, the department is in the
process of filling posts.
Actual expenditure until end of July: R165 million (39%)
– R9 million (9 %) current
– R1 million (20%) capital assets
– R156 million (49%) transfers and subsidies
Under spent by R7 million (4 % of approved R172 million)
1
Selected votes – Environmental Affairs
• R2.6 billion total budget for 2010/11
– R1.2 billion transfers and subsidies
– R910 million current payments
– R473 million capital assets
• R541 million (21%) was spent:
– R802 million (26%) transfers and subsidies
– R66 million (25%) current payments
– R0.5 million (0.7%) capital Assets
• Slow spending
– Due to late payment to for the SA Aghulas Polar Vessel
• Transfers
– R17 million was requested
– R1 million approved
– R16 million recommended but not approved yet
37
Selected votes – DMR
• 2010/11 Budget of R1 billion: Q1 expenditure R249m
(24%)
• Shifts – Q 1: R22m
• Transfers – Allocation R409m: Q1 amount transferred
R108m (26%)
• Spending trends: 08/09 - 99%; 09/10 - 97%
38
Selected Votes – Rural Development and
Land Reform
• 2010/11 budget R7 billion: Expenditure R852 (13%)
• Shifts – R5 million shifted to various items in programmes
• R2 billion vired from Land Reform to Restitution for the
settlement of Restitution court cases. The department’s
properties has been attached due to non payment of claims,
hence a need for this virement
• Transfers – Allocation R4.9 billion: amount transferred R601
million (13%)
• Spending trends: 2007/08 - 99% 2008/09 - 99%; 2009/10 92%
39
Selected votes – DST
• R4.6 billion total budget for 2010/11
– R4.3 billion transfers and subsidies
– R362 million current payments
– R4.1 million capital assets
• R869.1 million (18.8%) was spent:
– R802.2 million (18.9%) transfers and subsidies
– R66.4 million (18.3%) current payments
– R0.5 million (12.0%) capital Assets
• Slow spending
– Delays in implementation of projects viz. Biotechnology Strategy,
SANERI, HIV/AIDS project, Innovation projects and Innovation fund
– Delays in finalisation of Memorandum of Agreements
40
Selected votes – Tourism
• R1.2 billion total budget for 2010/11
– R196.1 million current payments
– R953.3 million transfers and subsidies
– R2.4 million capital assets
• R404.5 million (35.1%) was spent:
– R 37.1 million (18.9%) current payments
– R367.3 million (38.5%) transfers and subsidies
– R0.07 million (2.9%) capital Assets
• Fast spending
– 60% (R279,3 million) of the International Marketing Grant was
transferred to South African Tourism (SAT) in April 2010 and
the remaining 40% (R186,2 million) will be transferred in
September 2010
– Performance bonuses for 2009/10 were paid in April 2010; this was
projected in July 2010
41
Selected votes – DTI
• R6.1 billion total budget
– R1.1 billion (19%) - current payments
– R5 billion (81%) - transfers and subsidies
– R15 million (.2%) - capital assets
• R1 billion spent (16%) - 1st quarter
– R197 million (3%) - current payments; R820 million (13%);
transfers and subsidies; R1 million (.02%) - capital assets
• Underspending compared to approved drawings (30%) - 1st quarter
– Mainly related to underspending under various incentive
schemes: Business Process Outsourcing, Clothing and Textiles
and the Automotive Production and Development Programme.
Increase in claims is anticipated during latter part of financial year
• Expenditure to 31 July 2010
– R1.6 billion spent (26%): R283 million (5%) - current payments;
R1.3 billion (21%) - transfers and subsidies; R2 million (.04%) capital assets
1
Infrastructure & Urban Development Sector
43
Sector spending trends – Infrastructure &
Urban Development ('000)
8,000,000
7,000,000
6,000,000
5,000,000
8,499,340
8,191,833
4,000,000
3,000,000
1,274,936
684,506
778,129
208,491
475,239
1,000,000
1,928,395
3,636,862
3,818,222
2,000,000
Human Settlements
Communications
Energy
Projection
Actual
Transport
Water Affairs
44
Selected votes – Cooperative Governance &
Traditional Affairs
 At the end of the 1st Quarter, CoGTA’s actual expenditure
was R1,7 billion, as compared to projected expenditure of
R275 million
 This faster than expected trend is due to Local
Government equitable share transfer that were
transferred to the municipalities earlier than normal.
According to CoGTA, the transfer was informed by a
strategic decision taken to assist selected municipalities
that were financial stretched
45
Selected votes – Cooperative Governance &
Traditional Affairs
2009/10
Programme
Previous Structure
Allocation
Actual
R'000
R'000
R'000
Administration
Governance,
Policy and
Research
163,543
49,035
42,823
9,845
2010/11
%
spending
Current Structure
Allocation
Actual
R'000
R'000
%
spending
y/y growth
25.8%
26.2%
Administration
188,131
34,031
18.1%
20.1%
Policy, Research and
Knowledge Management
Support
50,076
5,325
10.6%
43,570,837
1,679,519
3.9%
Urban and Rural
Development
12,909
3,257
25.2%
Governance and
Intergovernmental
Relations
Systems and
Capacity Building
106,265
20,541
19.3%
National Disaster
Management Centre
41,563
5,758
13.9%
41,942
10,414
24.8%
Traditional Affairs
70,863
13,356
18%
2,152,164
6.1%
19,107
19.4%
70,863
13,356
18.9%
2,258,151
18.7%
43,921,470
Free Basic
Services and
Infrastructure
Provincial and
Local Government
Transfers
Fiscal Transfers
TOTAL
35,131,362
101,983
35,607,039
1,737,989
4.0%
29.9%
46
Selected votes – Cooperative Governance &
Traditional Affairs
Economic classification
Previous Structure
2009/10
Allocation
Actual
2010/11
%
spending
R'000
R'000
Current Payments
382,407
89,900
23.50%
Transfer and subsidies
35,216,431
2,167,550
Payments for capital
assets
8,201
701
TOTAL
35,607,039
2,258,151
Current Structure
Allocation
Actual
%
spending
y/y
growth
116.15%
R'000
R'000
Compensation of
employees
241,929
41,591
23.98%
6.20%
Goods and
services
377,776
106,991
17.19%
8.50%
Transfer and
subsidies
43,288,456
1,589,064
3.67%
Payments for
capital assets
13,309
343
2.58%
43,921,470
1,737,989
3.96%
6.30%
29.93%
 Expenditure decreased from R2.2 billion in 20091/0 to R1.7 billion in
2010/11. This was due to structural changes that led to Rural
Development function being moved from CoGTA to Department of Rural
Development and Land Reform
47
Selected votes – Communications
2010/11
Economic classification
Allocation
Actual
R’000
R’000
Compensation of Employees
160414
33762
Goods and services
322762
Transfer and subsidies
2009/10
% spending
Allocation
Actual
% spending
y/y growth
R’000
R’000
21.0%
147428
29513
20.0%
14.4%
26711
8.3%
235940
40129
17.0%
-33.4%
1626704
147508
9.1%
2077679
197084
9.5%
-25.2%
Payments for capital assets
4119
510
12.4%
9447
4958
52.5%
-89.7%
Financial assets
0
2
Total
2113999
208493
0.507721
2470494
271684
11.0%
-23.3%
 The projected expenditure in the first quarter of 2010/1 was R551.1
million, however, actual expenditure was R208.5 million. This was
about 37.83% of the projection. The primary reason for underexpenditure was attributed to transfers that were not made to public
entities. Public entities such as Telkom and Sentech did not submit
drawdown requests.
48
Selected votes – Energy
Economic classification
R'000
R'000
R'000
R'000
%
-
202,123
42,976
21.26
Compensation of Employees
132,994
-
132,994
31,641
23.79
69,129
-
69,129
11,335
16.40
5,328,667
-
5,328,667
641,426
12.04
4,600
-
4,600
104
2.26
5,535,390
-
5,535,390
684,506
12.37
Payment for Capital Assets
Total
•
Year-to-date Percent of
actual
budget
expenditure expended
202,123
Transfers and Subsidies
•
Available
Budget
Current payments
Goods and Services
•
Main
Shifts and
Appropriation Virements
Note: comparison of the department’s current expenditure to the expenditure of
the 2009/10 financial year has not be done because the analysis might give a
distorted picture of the department’s performance.
For the 1st quarter, the department’s total projected expenditure amounted to
R778.13 million.
However, for the period under review, the department has spent R684.51 million
which is 87.96 per cent of the Department’s projected quarterly expenditure, and
this translates to slower spending than expected of R93.62 million or 13.68%
49
Selected votes – Human Settlements
•
•
•
Housing Policy, Research and Monitoring – Expenditure is slower than expected due to the
delay in the issuing of tenders related to evaluation study on the upgrading of informal
settlements and the performance of rental housing.
Housing Planning and Delivery Support – The slow spending relates to the sanitation
programme, a function that has been transferred to the department in 2010/11. The
programme has been experiencing delays in contracting service providers to provide on-site
training to rural households on the maintenance of the infrastructure before the infrastructure
is installed.
Strategic Relations and Governance – Expenditure is slower than expected as a result of
invoices not received from SITA for the maintenance of the Housing Subsidy System.
50
Selected votes – Human Settlements
•
•
•
Slower than expected expenditure on current payments relate to:
– Signing the contract with the Special Investigations Unit,
– Issuing tenders for impact and evaluation studies on rental housing, and informal
settlement upgrading
– Invoices not received from SITA for the maintenance of the Housing Subsidy System
– Slow implementation support on the rural sanitation programme.
Slower than expected expenditure on payments for capital assets relates to an indirect grant to
municipalities, the Rural Households Infrastructure Grant for on site sanitation services to rural
households.
The slower than expected expenditure on transfers to public entities is as a result of the delay
in the finalisation of the business plans of the Housing Development Agency and the Rural
Housing Loan Fund.
51
Selected votes – Human Settlements
• Human Settlements Development Grant finances 13 housing programmes
– Limpopo and Northern Cape spending faster than expected, with slowest
spenders including Free-State, North-West and KwaZulu-Natal
• Housing Disaster Relief Grant to support flood damage in KwaZulu-Natal
• Rural Households Infrastructure Grant - Allocation in kind to municipalities
– New programme in department; policy maker to implementer
52
Selected votes – Transport
• Higher than projected expenditure was partly due to
payment schedules for the PTIS which were increased to
cover short term bridge funding agreements made by the
City of Johannesburg and City of Cape Town in terms of
MFMA Section 45 for BRT systems
• Higher than projected expenditure was partly due to capital
transfers to PRASA being increased to reduce to loan for
inter-city busses.
53
Selected votes – Water Affairs

The Department has been allocated an appropriation of R7.997 billion for
the current financial year. Projected expenditure was R1.999 billion and
the Department expended R1.275 billion (15.94%). This represents an
slower spending of R724.2 million or (9.06 %) for the 1st quarter of this
financial year. Some of the primary reasons:
 Outstanding invoices for services rendered in the previous financial
year (e.g. fleet management, information technology, construction
works (De Hoop Dam) and consultancy). The delay was due to the
BAS structure that was not ready for implementation from April 2010.
 Contractual agreement between DWA and professional services
providers not being finalised
 Vacant posts
54
Selected votes – Water Affairs
2010/11
Allocation
Actual
Actual as %
Allocation
R'000
R'000
%
R 884,205
R 123,549
14.0%
R 364,749
R 50,858
13.9%
Current Programme
Structure
Administration
Water Management
•
•
National Water
Resources
Infrastructure
R 2,241,418
R 507,795
22.7%
Regional Management
R 4,239,013
R 575,090
13.6%
Water Sector
Regulation
R 177,207
R 17,644
10.0%
Total
R 7,906,592
R 1,274,936
16.1%
2009/10
Previous
Programme
Structure
Allocation
Actual
Actual as %
Allocation
Year-onYear
Growth
R'000
R'000
%
%
Administration
R 795,353.00
R 120,982.00
15.2%
2.12%
Water Resources
Management
R 3,895,794.00
R 848,258.00
21.8%
Water Services
R 2,717,039.00
R 452,020.00
16.6%
R 485,641.00
R 123,717.00
25.5%
R 7,893,827.00
R 1,544,977.00
19.6%
Forestry
-17.48%
In the financial years 2009/10 and 2010/11, the Department of Water Affairs changed
programme structure. It makes it difficult to compare the two financial years. On the other hand,
the Forestry and Sanitation functions were also moved out of the department. This is also
confirmed by the negative year-on-year growth.
Total expenditure decreased from R1.554 billion in June 2009 to R1.274 billion in June 2010 at
an annual rate of 17 per cent as a result of the sanitation function to the Department of Human
Settlements and the Forestry function to the Department of Agriculture, Forestry and Fisheries.
55
Selected votes – Water Affairs
2010/11
Allocation
Actual
Actual as %
Allocation
Allocation
Actual
Expenditure
%
Expenditure
Growth (YoY)
R'000
R'000
%
R'000
R'000
%
%
Compensation of
employees
R 1,163,836
R 240,969
20.7%
R 1,327,863
R 287,816
21.7%
-16%
Goods and Services
R 2,468,727
R 282,422
11.4%
R 2,113,255
R 391,848
18.5%
-28%
Transfers and
subsidies
R 3,238,687
R 742,035
22.9%
R 1,989,201
R 529,009
26.6%
40%
Payments for capital
assets
R 1,125,342
R 9,510
0.8%
R 1,114,223
-R 27,379
-2.5%
-135%
Total
R 7,996,592
R 1,274,936
15.9%
R 6,544,542
R 1,181,294
18.1%
8%
Economic
Classification
•
•
2009/10
In the financial years 2009/10 and 2010/11, the negative growth in compensation of
employees, goods and services is due to the functions of Forestry and Sanitation that
were moved out of the department
Negative growth of 135% for capital payments in the 1st quarter was due to the
Department’s incorrect allocation of the expenditure for building and other fixed
structures in the Department’s Regional Offices of North West and Mpumalanga
Provinces. This was subsequently corrected.
56
Selected votes – Water Affairs
2010/11
Allocation
Economic
Classification
Actual
Expenditure
2009/10
Actual as %
Allocation
Allocation
%
Expenditure
Growth
(YoY)
Actual Expenditure
R'000
R'000
%
R'000
R'000
%
%
Water services operating
subsidy
R 661,704.00
R 213,508.00
32.3%
978,579
182,364
18.6%
17.08%
Regional Bulk
Infrastructure
R 833,650.00
R 85,275.00
10.2%
611,500
45,245
7.4%
88.47%
Total
R 1,495,354.00
R 298,783.00
20.0%
1,590,079
227,609
14.3%
31.27%
•
•
Water Services Operating Subsidy Grant spending increased by 17.08% per
cent from R182.364 million in June 2009 to R213.508 million in June
2010.This increase could be attributed to expenditure on the refurbishment of
water schemes prior to transfer to municipalities
Regional Bulk Infrastructure Grant spending increased from R45.245 million in
June 2009 to R85.275 million in June 2010 as the Department has
commenced with the implementation of capital projects.
57
Thank you
Q&A
58