Technical Secondary Schools Recapitalisation Grant Framework – 2011/12 Interim Report - 31 March 2012 Conditional Grant, Division of Revenue Act, 2011, as amended

The profile of the 200 selected Technical High schools per province 2 Table 1: Profile of the 200 Identified Technical Schools according to the Audit Results Province Number of Technical Schools per Province Average Number of Technical Subjects Offered per Province Number of Learners enrolled in Technical Schools in Gr’s Number of Learners enrolled for Technical Subjects per Province Number of Teachers involved in Technical Subjects Number of new workshops required per Province Number of Workshop Refurbishmen t required per Province Number of Schools with teachers identified for Training Number of Workshops to receive Equipment, Tools and Machinery Eastern Cape ,2918, Free State ,8508, Gauteng ,73615, KwaZulu- Natal ,13013, Limpopo ,7954, Mpumalanga ,2413, Northern Cape103.27,9883, North West ,1888, Western Cape93.47,5363, TOTALS ,75568,8492, ,749663

Technical Secondary Schools Recapitalisation Grant Framework Strategic goal To improve conditions of technical schools and modernise them to meet the teaching requirements of learners in the technical fields and increase the number of suitably qualified and technically skilled graduates from these schools Grant purpose To recapitalise up to 200 technical schools to improve the capacity to contribute to skills development and training in the country by: – building workshops at technical schools to support the technical subject offerings – refurbishing or re-designing workshops in technical schools to comply with safety laws and regulations and to meet minimum industry standards – buying and installing new machinery and equipment consistent with the technical subjects that are offered in technical schools – training and up-skilling teachers at technical schools to acquire new trends, practical skills, and developments in their technical subjects

Allocation of funding for the Grant 4 The Department of Basic Education (the Department) was initially allocated R80 million (2010/11), R200 million (2011/12), R210 million (2012/13 to implement the grant through provinces respectively. During the budget review period of 2011/12 the financial allocations were revised as follows: R210 million: 2011/12, R209 million: 2012/13, R221 million: 2013/14 and R233 million: 2014/15.

Financial Performance for the period 5 Table 1: Consolidated Financial Data (R’000) Conditional GrantTotal AllocationAmount Transferred Total Expenditure (Excl. Commitments) % Spent on Total Allocation Technical Secondary Schools Recapitalisation 210, ,76972% Total210, ,76972% Table 2: Detailed Financial Data (R’000) Province Annual Allocation Amount Transferred Amount Spent per Province Amount Committed to Goods and Services Total Amount Spent (incl Commitmen ts) % Spent on Actual Payments/Al location % Total Spent on Transfers (Incl. Comms) Total Amount Withheld to date Total Amount Retained/U nspent Under/Over - expenditure EC40,272 34,4928,75043,24286%107%0-2,970 FS14, % 00 GP30,596 10,64919,94730,59635%100%00 KZN38,563 35,2763,83239,10891%101%0-545 LP31,894 11,0439,40020,44335%64%011,451 MP21,464 21, % NC7,667 7, % NW17,015 7, ,42745%50%08,588 WC8,619 8,61098,619100% 00 TOTAL210, ,76942,703194,47272%92%016,046

Non-Financial Performance for the period 6 Table 3: Detailed Performance Information as at 31 March 2012 (Unaudited data) ELEMENTECFSGPKZNLPMPNCNWWCTOTALS No. of Schools Funds Allocated for 2011/1240,27214,42830,59638,56331,89421,4647,66717,0158,619210,518 Funds Transferred during the period40,27214,42830,59638,56331,89421,4647,66717,0158,619210,518 % Funds transferred during the period100% Target Output 1: New Workshops Target Output 2: Refurbishment of Workshops Target Output 3: New Equipment Target Output 4: Teacher Training Total Targets Projected ,072 Total Targets Completed % Completed (Targets)50%100%40%77%102%100% 67%134%89% Actual Expenditure 34,49214,42810,64935,27611,04321,7807,8297,6628, ,769 Financial Commitments 8,750019,9473,8329, ,703 Total Expenditure (Actual+Com)43,24214,42830,59639,10820,44321,7807,8298,4278,619194,472 % Spent/Total Transfer (Excl Comm) 86%100%35%91%35%101%102%45%100%72% % Spent/Total Allocation (Incl Comm) 107%100% 101%64%101%102%50%100% 92% Balance/Retained Funds (to cover commitments where possible)5,780019,9473,28720, ,353958,749

Performance Analysis The financial expenditure has declined by 3% compared to the previous period (R60 million of R80 million, 75% in 2010/11 and R151 million of R210 million 72% in 2011/12). The output’s performance has increased from 70% to 89%. The number of outputs completed this period is 949 of 1072 compared to 516 of 731 in the previous period. The outputs refer to building of new workshops, refurbishing old workshops, supplying new equipment and training teachers. The overall expenditure (when financial commitments are taken into consideration) is 92%, which is similar to the previous period. An amount of R16 million may be surrendered to the National Revenue Fund because it was not committed at the close of financial books (March 2011/12). 7

Performance Analysis (Continue) The most completed output is refurbishment of workshops, followed by teacher training and building of new workshops, while the supply of equipment lags behind as the least completed output. Provinces that performed well in terms of expenditure and outputs are Free State, Mpumalanga, Northern Cape, and Western Cape. The performance for KwaZulu-Natal and Eastern Cape requires verification before confirmation. Limpopo has recorded the highest completion of outputs with the lowest expenditure. This may be due to the capital expenditure paid for by the Infrastructure department instead of education. The Eastern Cape has recorded the highest expenditure with the lowest outputs. This is due to the high charge or cost of building new workshops, which are currently under construction. 8

Performance Analysis (Continue) The following provinces recorded over-expenditure (EC: 7%, KZN: 1%, MP: 1% and NC: 2%). These deviations will be dealt with by provincial treasuries and provincial equitable shares will also be considered to supplement where necessary. Financial commitments for incomplete projects or unpaid invoices (accruals) amounted to R42 million. The total projected outputs were 1,072 and 949 were completed by all Provinces, which represents 89% and. In financial terms, the performance has declined by 3% to the previous period (2010/11) at 72% expenditure, however, in non-financial terms, the output performance has significantly improved from 71% to 89% achievement of targets. 9

Compliance with the conditions of the Division of Revenue Act, as amended Compliance with section 10(5) of the Act (submission of monthly reports by the transferring department) was met. Compliance with section 12(2) (submission of monthly and quarterly reports by the receiving departments) was met by four provinces (monthly reports) and by all nine provinces (quarterly reports). A concern was however raised with regards to late submission and unapproved/unsigned reports. The application of Section (16)(1)(c) of the Act (withholding of funds for under-expenditure) was effected once and funds were released in January 2012 after significant improvements were recorded. The fulfillment of Section 10(6) of the Act (evaluation of the grant) is current underway, and will be completed in June