1 Outcome of Conditional Grants & Capital Expenditure as at 30 November 2005 [Section 40(4) of PFMA] Select Committee on Finance National Council of Provinces Presented by: Chris Adams Intergovernmental Relations National Treasury 17 January 2006

2 National Treasury’s Role National Treasury dev. Culture of publishing information Assessing credibility of prov. Budgets Ensure that each treasury prepares quarterly reports for its cabinet or exco. NT prepares a consolidated quarterly report for all provinces.

3 Key highlights Presentation covers provincial spending for the first 8 months (1 April to 30 November 2005) of 2005/06 financial year Spending is at R136bn (62,1%) of adjusted budget (R219,2bn) The highest rate of spending is in KZN (63,2%); NC and MPU (63,1%) Lowest in FS & GT (60,8%)

4 Provincial Aggregated Expenditure

5 Key highlights Spending in social services sectors: - Education at R46,7bn (64,6%) - Health at R29,4bn (62,3%) - Social Development R37,4bn (62,8%) Personnel spending at R63,3bn (65,4%) Capital expenditure is at R6,6bn (47,2%)

6 Provincial Aggregated Expenditure

7 Social services adjusted budgets at R178,9bn - 81,6% of total provincial budgets (education, health, social development) Provinces have spent R113,5bn or 63,4% –R12,3bn or 12,1 % more compared to last year Spending accounts for 83,4% of total provincial spending –Education at 34,3%, –Health at 21,6% –Social Development at 27,5% NC (65,2%), KZN (64,7%) records the highest rate of spending while FS (62%) and GT (62,1%) the lowest Social Services

8

9 Health Spending at R29,4bn or 62,3% against R47,1bn adjusted budget –Increase of R3,9bn or 15,4% compared to the previous year –Lowest rate of health spending in LIM (55,6%) and GT (61,6%) –NC (66,1%) and MPU (65,5%) reflects the highest rate of spending in health Health Personnel spending at R16,7bn or 65,2% (R25,6bn adjusted budget) Capital spending at R1,7bn or 42,1% –Increase of 59,9% compared to spending for the same period last year Lowest rate of capital spending in LIM (27,9%) and FS (35,3%) MPU (58,4%) and KZN (49%) reflects the highest rate of capital spending in health

10 Health

11 Health – Programme Analyses Prog 2 - Prov Dist Health Services -Spending at R11,7bn or 63,9% of R18,2bn adjusted budget. -Lowest rate of spending in NC (57,8%) and highest in MP (67,4%) Prog 4 - Prov Hospital Services -Spending at R7,7bn or 65,6% of R11,7bn adjusted budget. -Lowest rate of spending in KZN (61,1%) and highest in FS (73,7%) Prog 5 - Central Hospital Services -Spending at R5,1bn or 65,1% of R7,8bn adjusted budget. -Lowest rate of spending in LIM (57,9%) and highest in FS (72,5%) However Prog 8 – Health Facilities Management shows highest overspending of R208m while spending R1,5bn (44%) of R3,2bn budget.

12 Provincial District Health Services (Programme 2)

13 Provincial Hospital Services (Programme 4)

14 Central Hospital Services (Programme 5)

15 Provincial Health – Personnel

16 Provincial Health – NPNC

17 Provincial personnel spending totalled R63,3bn or 65,4% of R96,7bn personnel adjusted budgets –Increase of 9,1% or R5,3bn over comparative spending last year Projecting to overspend by R223,6m Lowest level of personnel spending in GT (63,4%) and WC (63,6%) LIM (68,5%) and NW (66%) reflects the highest level of personnel spending Personnel

18 Personnel

19 Payments for Capital Assets Trends (Capital Expenditure)

20 Provinces have spent R6,6bn or 47,2% of R13,9bn adjusted capital budgets –Increase of R1,5bn or 30% to comparative spending during last year Low rate of capital spending in LIM (36,4%) and FS(38,4%) EC (58%) and MPU (57,8%) reflects the highest rate of capital spending Payments for Capital Assets

21 Provinces have spent R1,7bn or 42,1% of R4,1bn adjusted capital budgets –Increase of R1,1bn or 59,9% to comparative spending during last year Lowest rate of capital spending in LIM (27,9%) and FS(35,3%) MPU (58,4%) and KZN (49%) reflects the highest rate of capital spending EC and MP overspending while 6 depts are underspending and one breaking even Payments for Capital Assets - HEALTH

22 Payments for Capital Assets

23 Payments for Capital Assets - Health

24 Conditional Grants

25 Conditional Grants – Flow of Info

26 Conditional Grants Conditional grant allocations total R74,6bn (2005 DoRA) –Social assistance grants making up the bulk at R55,9bn Reported expenditure excludes Schedule 4 grants such as the NTS Grant and Provincial Infrastructure grant These grants are included in “general” provincial expenditure Specific grants that show low spending include: - Hospital Revitalisation (Health) (44,3%) - Hospital Management and QI (Health) (46,6%) - Integrated Nutrition prog (53,6%)

27 Conditional Grants

28 Conditional Grants - continued

29 Conditional Grants 5 or more provinces have spent less than 50% for the following grants: –Hospital Revitalisation (Health) –Hospital Management and Quality Improvement (Health) However the majority of grants reflects spending within the 50% and 70% range against the DORA.

30 Conditional Grants

31 Important dates and submissions

/06 Financial Year: –3 rd Quarter (as at 31 December 2005) 30 January 2006 –4 th Quarter (as at 31 March 2006) 28 April 2006 Publication Dates for Provincial S32 Reports

33 Practice Note 3 of 2005 (issued with effect from 01 August 2005): –National departments administering conditional grants are required to table QPRs (including both financial and non-financial information) with the SCOF in the NCOP at the end of each quarter in line with the requirements of Sections 19(1)(c) and 21(2)(d) of the Act, Grant Frameworks and Treasury Regulation 5.3 –Departments are required to provide the NT with copies of the reports tabled at SCOF in NCOP. The quarterly reports for each quarter should be tabled by the dates provided –The dates are as follows: Third Quarter:07 February 2006 Fourth Quarter:08 May 2006 Proposed Dates for QPRs

34 Detail on Conditional Grants by Grant Type

35 Health Grants National Tertiary Services Grant Objective (Schedule 4 Grant): –To fund national tertiary delivery in 27 hospitals across the nine provinces, as identified by the national department of Health (DOH), in order to ensure equitable access to basic tertiary health services by all South Africans 8 month Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Health spent R3 117 m or 66,2% of the R4 709 m allocation –Transfers amounted to 66,7% –Highest: MPU 88,4%; KZN 73,5% and NC 66,7% –Lowest: LIM 28,7% and NW 48,9% Service Delivery Outcome: –Department / Sector to respond

36 Health Grants Health Professions Training and Development Grant Objectives (Schedule 4 Grant): –Support provinces to fund service costs associated with training of health professionals –Enable shifting of teaching activities from central hospitals to regional and district facilities –Development and recruitment of medical specialist in under- served provinces 8 month Expenditure: –Spending of this grants is subsumed in the spending of a range of programmes and therefore no reporting is required –Health spent R1 008 m or 66,3% of the R1 520 million allocation –Transfers amounted to 66,7% –Highest: FS 84,7%; NW 72,1% and GT 66,7% –Lowest: EC 49,9% and MPU 64,7% Service Delivery Outcome: –Department / Sector to respond

37 Health Grants Comprehensive HIV and Aids Grant Objective (Schedule 5 Grant): –To Enable the health sector to develop an effective response to the HIV and Aids epidemic and other matters 8 month Expenditure: –Health spent R710,4 m or 62,6% of the R1 135 m allocation –Transfers amounted to 59,6% –Highest: KZN 78,6%; GT 75,5% and WC 71,7% –Lowest: LIM 36,8% and NC 41,8% –Service Delivery Outcome: –Department / Sector to respond

38 Health Grants Hospital Revitalisation Grant Objective (Schedule 5 Grant): –To transform and modernise infrastructure and equipment in hospitals in line with national policy and to achieve a sustainable infrastructure from which modern, equitable and sustainable services can be delivered 8 month Expenditure: –Health spent R490,2 m or 47,7% of the R1 027 million allocation –Transfers amounted to 61,2% –Highest: GT 359,6%; NC 79,3% and MPU 67,3% –Lowest: FS 25,4% and EC 30,2% Service Delivery Outcome: –Department / Sector to respond

39 Health Grants Integrated Nutrition Programme Grant Objective (Schedule 5 Grant): –To implement integrated nutrition activities aimed at improving the nutritional status of all South Africans 8 month Expenditure: –Health spent R66,2 m or 53,6% of the R123,4 m allocation –Transfers amounted to 77,3% –Highest: MPU 62,8%; GT 60,7% and EC 54,5% –Lowest: WC 43,8%; NC 48,4%; and NW 49,2% Service Delivery Outcome: –Department / Sector to respond

40 Health Grants Hospital Management and Quality Improvement Grant Objective (Schedule 5 Grant): –To transform hospital management and improve quality of care in line with national policy 8 month Expenditure: –Health spent R70 m or 46,6% of the R150,3 m allocation –Transfers amounted to 75% –Highest: MPU 142,7%; NW 56,4% and EC 50,2% –Lowest: GT 12%; KZN 30,8% and WC 33,4% Service Delivery Outcome: –Department / Sector to respond

41 THANK YOU THANK YOU