1 Presentation of the Financial Performance of the Department to the Standing Committee on Appropriations 23 March 2011 Presented by Cathy Motsisi Chief Financial Officer

2 Purpose To present the financial performance of the department as at the 28 February 2011 with comparatives of the 3 rd Quarter. To Provide an explanation why under Immovable Asset Management there is a 0 per cent spent for Energy Efficiency in Government Buildings. Explain why there is an over expenditure on the Devolution of Property Rate funds to provinces grant. And to present a detailed plan on how the department is addressing poor performance. 1

3 Total Department: Financial Performance per Economic Classification Economic classification Adjusted Budget Allocation 2010/11 Exp as 28 Feb 2011 % Spent % Spent 3rd Quarter R'000 R’000 Compensation of employees %68% Goods and services %60% Property Management %73% Transfers and subsidies %84% Infrastructure %46% Machinery and equipment %46% Total %75% 2

4 Breakdown of the Expenditure Capital Budget- Infrastructure Item Adjusted Allocation R’000 Actual Expenditure R’000 % Spent Feb 2011 % Spent 3rd Quarter ‘000 Departmental %71% Accessibility for disabled people %57% Dolomite Risk Management %6% Land Ports of Entry %56% Prestige %54% Inner City Regeneration %11% TOTAL %48% 3

5 Explanations – Capital Budget The infrastructure budget under departmental was increased in February to cater for new projects on fixing of potholes and building bridges. This resulted with a decrease in the % spent for February. Almost 90% of the funds are committed and rollovers will be requested. The Dolomite spending is very low at 6%. This is largely attributable to the fact that spending in this area is largely directly related to the RAMP projects which were put on hold pending the assessment and restructuring of projects. 4

6 Summary of Projects per status StatusDescriptionTotal number of Projects 4PI issued ( Expenditure is for consultants only 101 4bTender Stage39 5Tender recommendation stage 45 5APre site handover12 5BConstruction Stage112 6AFirst delivery stage29 7Final delivery stage80 8Construction completed86 TOTAL505 5

7 Financial Performance per Programme – (Benchmark 92%) Programme Adjusted Budget Allocation 2010/11 Actual Expenditure 28 Feb % Spent 3rd Quarter ‘000 Prog 1. Administration % 79% Prog 2. Immovable Asset Management % 77% Prog 3. Expanded Public Works Programme % 50% Prog. 4 Property and Construction Industry Policy Regulation % 73% Prog 5. Auxiliary and Associated Services % 84% Total %72% 6

8 Expenditure Analysis- Earmarked Funds February 2011 Function Budget ‘000 Expenditure 28 Feb ‘000 % Spent 3rd Quarter ‘000 Office Accommodation %73% DPW Infrastructure %46% CIDB % CBE % Agrement Board % Boundary Fencing % Aug of PMTE %1000% Property Rates – Conditional Grants % EPWP Incentives to Provinces %27% EPWP Incentives to Municipalities %44% IDT Intermediaries % 7

9 Expenditure Analysis- Earmarked Funds Cont. Function Budget ‘000 Actual Spent 28 Feb 2011 ‘000 % Spent 3rd Quarter ‘000 EPWP – Non State Sector % EPWP – Non State Sector (Province) % CETA (HR) %0 % Parliamentary Villages % Energy Efficiency (PPM) %0% Audit fee %91% Compensation for Losses % State Function % Common Wealth War Graves % Distress relief100% Loskop Settlement100% Total %73% 8

10 Explanations – Energy Efficiency The energy efficiency budget allocation of R75 mil was not spent as at 31 st December. These finds were earmarked for the retrofitting in all state buildings. Spending was delayed by –the protracted bidding process which unfortunately resulted in the late awarding of the bid. –Capacity for the management of the project The department has entered into an agency agreement with the IDT who implementing on our behalf. The baseline line studies have been concluded and there is significant progress in the retrofitting on identified buildings. Project plan is attached to the report. 9

11 Devolution of Property Rates Grant – January 2011 ProvinceBudget AllocatedAmount Transferred to Provinces R’000 Actual payments to Municipalities R’000 BalanceExpenditu re % Eastern Cape % Free State % Gauteng % KwaZulu Natal % Limpopo % Mpumalanga % Northern Cape % North West % Western Cape % Total % 10

12 Explanations – Devolution of Property Rates Four Provinces namely; Eastern Cape, Free State, Mpumalanga and Western cape are already on 99% spending which signals possible overspending. KZN has indicated that a significant amount of the unspent funds will be spent in February. We are already engaging Provinces that are not spending to look at possibilities of shifting of funds. We have also alerted them to increase their vigilance on spending to avoid un-authorised expenditure. Overall there is a commendable improvement on the payments to municipalities. 11

13 I thank you