1. GRANTS ADMINISTERED BY THE DEPARTMENT OF EDUCATION CONDITIONAL GRANTS Financial Management and Quality Enhancement in Education ( pages 2-12); Early Childhood Development (pages 19-27); HIV/AID (page s14-18); POVERTY ALLEVIATION GRANTS Thuba Makote (pages 37); and Ikhwelo (pages 38-45)

2. BACKGROUND ON EACH GRANT FMQEE – introduced in1998/1999 to deal with financial management and enable the implementation of TIRISANO; Life skills:HIV/AIDS – introduced in 2000/2001 to deal with the scourge by targeting particular age groups at school level; ECD- introduced in 2001/2002 with the aim of extending the service to poor communities; Thuba Makote – introduced in 2001/2002 to model innovative school design to take care of curricula and other societal needs. Ikhwelo – Introduced 2001/2002 to provide literacy and skills to adult learners.

3. FORMULA AND CRITERIA USED FOR ALLOCATION OF GRANTS TO PROVINCES: 2002/2003 TO 2005/2006 The education component of the equitable share is used to allocate funds in all the grants except Thuba Makot The target for the education component is primary and secondary schools and Grade R in the case of ECD. School-age population and enrolment numbers are considered and in the case of Ikhwelo literacy rates per province are taken into consideration. In the first phase of Thuba Makote provinces were allocated the same budget but in the second stage infrastructure backlogs per province will be considered.

4. THE CONSTITUTIONAL PRINCIPLES TAKEN INTO ACCOUT BY THE GRANTS The following principles in the exception of (b) are taken into account by all the grants: a) National interest and the division of resources; c) National government needs and interests; d) Provincial government basic needs; e) Fiscal capacity and efficiency; f) Developmental needs; g) Economic disparities; h) Obligation in terms of national legislation; i) Predictability and stability; and j) Need for flexibility in responding to emergencies.

5. MONITORING, REPORTING AND COMPLIANCE ISSUES All the grants use the following system: Approved business plans Monthly reporting; Quarterly reporting and or reviews; On-site monitoring; Reporting to HEDCOM and CEM Annual reporting Withholding of transfers in cases of low expenditure rates In addition to this Thuba Makote also uses progress payment to enforce compliance

6. TRANSFERS TO PROVINCES PER GRANT For FMQEE, ECD and HIV/AIDS the transfer of funds happens on a quarterly basis April July October January - and where there is non-compliance payment is delayed by 30 days or more depending on the circumstances of a province. For Ikhwelo there is indirect transfer in the form of LSM, ESM, equipment and personnel. For Thuba Makote payment is effected when claims have been submitted and after the DoE official has verified the information provided.

7. ALLOCATION PER GRANT FMQEE – see page 6 HIV/ADS – see page 15 ECD see page – pages 23, 24 and 25 Thuba Makote – page 31, 34 Ikhwelo – pages 41

8. EXPENDITURE PER GRANT FMQEE – see pages 7 for 2003/2004 and page 8 for comparison since inception. HIV/AIDS – see page 16 for 2001/2002 and 2003/2004. ECD – see pages 24 for 2002/2003. Thuba Makote – see page 34 for2002/2003. Ikhwelo – see salaries of practitioners on page 43.

9. PERFORMANCE INDICATORS FOR FMQEE A significant number of school governing bodies, school management teams, educators, learners and district officials trained in financial management, governance, conflict resolution and this resulted well- functioning schools; Educators and office based educators were offered training in curriculum and related issues and this contributed towards stabilising the schools. The grant also was used to build three systems such as EMIS, LSM, and the system to do with finacial management ( see page 11-12 and pages 78-99 of the REPORT ON THE UTILISATION AND IMPACT OF CONDITIONAL GRANTS (FMQEE) IN THE DEPARTMENT OF EDUCATION:2001/2002).

10. PERFORMANCE INDICATORS FOR ECD 2 699 sites are receiving subsidies; 4 500 practitioners registered by SACE; Tenders to assist in the development of monitoring and support tools in an advanced stage; LSM delivered in selected sites (see pages 26- 27)

11. PERFOMANCE INDICATORS FOR THUBA MAKOTE 1 st phase of the programme is underway; Tenders for the construction of 8 schools has been awarded; Integrated delivery achieved (see pages 36- 370

12. MOTIVATION FOR CONTINUATION OF THE GRANTS MQEE – ends in 2005/2006 and thereafter may be refocused to deal with curriculum reforms such as the establishment of A GETC and Implementation of FET in 2006. HIV/AIDS – to continue so as to focus on care and support and targeting of other age groups for prevention; ECD – to continue for at least one year to make up for lost opportunity in the first year and provide support to provinces lagging behind. Thuba Makote – ends in 2003/2004 as construction of schools is a provincial competence and the programme was a modelling exercise. Ikhwelo – to continue to consolidate the gains to be achieved,now that educators and project managers are in place.

13. PERFORMANCE INDICATORS FOR HIV/AIDS About 35,000 educators trained in life skills and sexuality education; A significant number of workshops conducted for SGS’s and other stakeholders; Appropriate LSM provided (see pages17-18 )