1. 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. 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. 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 employees1 200 4321 001 20683%68% Goods and services529 975467 41088%60% Property Management318 027301 59995%73% Transfers and subsidies3 798 6453 215 18585%84% Infrastructure1 375 982842 16661%46% Machinery and equipment141 28167 39548%46% Total7 364 7975 894 96180%75% 2

4. 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 307 199114 11037%71% Accessibility for disabled people 25 00013 62755%57% Dolomite Risk Management 29 0007 87427%6% Land Ports of Entry 409 115327 39180%56% Prestige 486 967322 55366%54% Inner City Regeneration107 70067 88563%11% TOTAL1 364 982853 44163%48% 3

5. 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. 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. 7 Financial Performance per Programme – (Benchmark 92%) Programme Adjusted Budget Allocation 2010/11 Actual Expenditure 28 Feb % Spent 3rd Quarter ‘000 Prog 1. Administration629 344614 12198% 79% Prog 2. Immovable Asset Management 5 199 4374 455 84986% 77% Prog 3. Expanded Public Works Programme 1 479 110777 58653% 50% Prog. 4 Property and Construction Industry Policy Regulation 30 03923 53178% 73% Prog 5. Auxiliary and Associated Services 26 86723 87489% 84% Total7 364 7975 894 96180%72% 6

8. 8 Expenditure Analysis- Earmarked Funds February 2011 Function Budget ‘000 Expenditure 28 Feb ‘000 % Spent 3rd Quarter ‘000 Office Accommodation318 027301 59995%73% DPW Infrastructure1 375 982842 16661%46% CIDB63 66563 655100% CBE25 527 100% Agrement Board8 982 100 % Boundary Fencing7 0006 30090% Aug of PMTE612 967 100%1000% Property Rates – Conditional Grants1 865 227 100% EPWP Incentives to Provinces331 004129 45239%27% EPWP Incentives to Municipalities622 996255 44241%44% IDT Intermediaries10 515 100% 7

9. 9 Expenditure Analysis- Earmarked Funds Cont. Function Budget ‘000 Actual Spent 28 Feb 2011 ‘000 % Spent 3rd Quarter ‘000 EPWP – Non State Sector179 811 100% EPWP – Non State Sector (Province)56 537 100% CETA (HR)2 3411 20151 %0 % Parliamentary Villages6 982 100 % Energy Efficiency (PPM)75 000 100%0% Audit fee29 16627 31794%91% Compensation for Losses1 945-0% State Function5 1128 826173 % Common Wealth War Graves17 46713 86379% Distress relief100% Loskop Settlement100% Total5 616 2554 416 36979%73% 8

10. 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. 11 Devolution of Property Rates Grant – January 2011 ProvinceBudget AllocatedAmount Transferred to Provinces R’000 Actual payments to Municipalities R’000 BalanceExpenditu re % Eastern Cape181 672 165 69915 97391% Free State222 386 204 06118 32592% Gauteng294 457 200 03194 42668% KwaZulu Natal709 891 318 703391 18845% Limpopo15 154 7 577 50% Mpumalanga57 615 57 16744899% Northern Cape39 600 29 8589 74275% North West79 990 56 67523 31571% Western Cape264 462 263 1111 35199% Total1 865 227 1 104 326760 90159% 10

12. 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. 13 I thank you