1. Joint Meeting of the Standing Committee on Appropriations & Select Committee on Appropriations Department of Basic Education Presentation on the Division of Revenue Bill (Government Gazette No of February 2012)
29 February 2012

2. Response of the Bill to Priorities
The conditional grants create space for the Department to favourably address some of the priorities in the Basic Education Sector, in line with the intent of Action Plan to 2014: Towards the Realisation of Schooling 2025.
Much consultation has ensued amongst the Department, Provinces and National Treasury in the development of inputs to the current Division of Revenue Bill. In some instances grant allocations were revised and plans adjusted in accordance with the revised grant values.

3. Vote 15 Allocations
For the 2012 financial year, the DBE, through Vote 15, has been allocated 5 conditional grants for implementation of programmes in provinces.
The grants are allocated over three schedules, viz. Schedule 4: Education Infrastructure Grant; Schedule 5:Dinaledi Schools Grant; HIV and AIDS (Life Skills Education) Grant ; the National Schools Nutrition Programme Grant and the Technical Secondary Schools Recapitalisation Grant and Schedule 7: School Infrastructure Backlogs Grant.

4. Vote 15 Allocations (cont’d)
The total value of all the grants, excluding the Schedule 7 grant, allocated for Vote 15 activities is R (excluding Schedule 7)
The Schedule 7 grant makes provision for an additional amount of R , bringing the gross value of grant allocations to R
The Value and Purpose of each grant is captured in the following slides:

5. Schedule 4: Education Infrastructure Grant
Type of allocation: General conditional allocation to provinces
The total value of this grant is R
The purpose of the grant is
to help accelerate the construction, maintenance, upgrading and rehabilitation of new and existing infrastructure in education;
to enhance capacity to deliver infrastructure in education; and
to address damage to schools infrastructure from disasters.

6. Schedule 4: Education Infrastructure Grant (cont’d)
Provincial disbursements:
Eastern Cape: R
Free State: R
Gauteng: R
KwaZulu-Natal: R
Limpopo: R
Mpumalanga: R
Northern Cape: R
North West: R
Western Cape: R

7. Schedule 5: Dinaledi Schools Grant
Type of allocation: Conditional allocation
The total value of this grant is R
The purpose of the grant is
to promote Mathematics and Physical Science teaching and learning ;
to improve learner performance in Mathematics and Physical Science in line with Action Plan 2014;
to improve teacher’s content knowledge of Mathematics and Physical Science.

8. Schedule 5: Dinaledi Schools Grant (cont’d)
Provincial disbursements:
Eastern Cape: R
Free State: R
Gauteng: R
KwaZulu-Natal: R
Limpopo: R
Mpumalanga: R
Northern Cape: R
North West: R
Western Cape: R

9. Schedule 5: HIV and AIDS (Life Skills Education) Grant
Type of allocation: Conditional allocation
The total value of this grant is R
The purpose of the grant is
to support South Africa’s HIV prevention strategy by increasing sexual and reproductive health knowledge, skills and appropriate decision-making among learners and educators;
to mitigate the impact of HIV by providing a caring, supportive and enabling environment for learners and educators;
to ensure the provision of a safe, rights-based environment in schools that is free of discrimination, stigma and any form of sexual harassment/abuse .

10. Schedule 5: HIV and AIDS (Life Skills Education) Grant (cont’d)
Provincial disbursements:
Eastern Cape: R
Free State: R
Gauteng: R
KwaZulu-Natal: R
Limpopo: R
Mpumalanga: R
Northern Cape: R
North West: R
Western Cape: R

11. Schedule 5: National School Nutrition Programme Grant
Type of allocation: Conditional allocation
The total value of this grant is R
The purpose of the grant is
Provide nutritious meals to targeted learners.

12. Schedule 5: National School Nutrition Programme Grant (cont’d)
Provincial disbursements:
Eastern Cape: R
Free State: R
Gauteng: R
KwaZulu-Natal: R
Limpopo: R
Mpumalanga: R
Northern Cape: R
North West: R
Western Cape: R

13. Schedule 5: Technical Secondary Schools Recapitalisation Grant
Type of allocation: Conditional allocation
The total value of this grant is R
The purpose of the grant is
to recapitalise up to 200 technical schools to improve their capacity to contribute to skills development and training in the country.

14. Provincial disbursements:
Schedule 5: Technical Secondary Schools Recapitalisation Grant (cont’d)
Provincial disbursements:
Eastern Cape: R
Free State: R
Gauteng: R
KwaZulu-Natal: R
Limpopo: R
Mpumalanga: R
Northern Cape: R
North West: R
Western Cape: R

15. Potential Challenges to Grant Implementation

16. Implementation Capacity
Members of the Select Committee visited Provinces in January One challenge noted from the Northern Cape visit, was inadequate human resources to effectively implement programmes.
The Department has established a dedicated Conditional Grants Management office in the Strategy, Research and Communication Branch at DBE, to monitor and evaluate delivery more efficiently.
This unit will make recommendations to Senior Management, HEDCOM and CEM on the utilisation of the 5% allocated per grant for administration and to appoint dedicated personnel to monitor and track progress on each of the grants.

17. Limited Monitoring
The NSNP cites the following as some of the challenges:
Lack of cooking equipment at some sites;
Non-compliance with menu guidelines by some service providers;
Lack of involvement of educators in the feeding of children;
No allowance for Subsistence and Travelling (Monitors travel short distances and neglect far flung areas – Northern Cape).

18. Some mitigating measures
Provinces are allowed an annual allocation to purchase cooking equipment and have to report on this, providing evidence of procurement;
Meal planning workshops have been held with SGBs and educators to enhance compliance with menu guidelines and to advocate for more educator involvement;
Presentations have been made to Provincial Budget Monitoring meetings, raising the importance of making allowance for S & T for NSNP monitors.

19. Schedule 7: School Infrastructure Backlogs Grant
The total value of this grant is R
The purpose of the grant is
for the eradication of school infrastructure; and
provision of water, sanitation and electricity to schools.
The grant is in its second year and is also referred to as the ASIDI (Accelerated School Infrastructure Delivery Initiative).

20. Schedule 7: School Infrastructure Backlogs Grant(cont’d)
Provincial allocations:
Eastern Cape: R
Free State: R
Gauteng: R
KwaZulu-Natal: R
Limpopo: R
Mpumalanga: R
Northern Cape: R
North West: R
Western Cape: R

21. Inappropriate Structures
Province
Pre Fab
Wood
Mud
Metal
Total
Eastern Cape 13
393 22
428
Free State 27 1 2 30
Gauteng
KwaZulu-Natal 3
Limpopo
Mpumalanga 4 5
North West
Northern Cape
Western Cape 21 37
394 38
496
The budget allocation for the ASIDI programme over the MTEF period is R8.2 billion and allocated as indicated in the table below:
MTEF ALLOCATIONS
2011/12
R 700
2012/13
R2 315
2013/14
R5 189
TOTAL
R8 204

22. ASIDI Targets The targets are as follows:
Infrastructure Category
Baseline
2011/2012
2012/2013
2013/2014
Balance
Inappropriate Structures
496 50
100
346
Water
1257
188
1069
Electrification
878
164
714
Sanitation
868
354
514
Specialist Classrooms
Specialist classrooms were not part of the original scope on ASIDI but have now been included.

23. 2012/13 ASIDI INAPPROPRIATE SCHOOLS
50 Schools in the EC to be implemented in the 2012/13 financial year are listed per district below. Assessments have been completed.
DISTRICT
NO OF SCHOOLS PER DISTRICT
BUTTERWORTH 6
COFIMVABA 5
DUTYWA 8
EAST LONDON 1
FORT BEAUFORT 2
GRAAFF-REINET
KING WILLIAMS TOWN
LUSIKISIKI 3
MBIZANA 4
MT FLETCHER
MT FRERE
MTHATHA
NGCOBO
QUMBU 7
UITENHAGE
TOTAL 50

24. 2012/13 ASIDI BASIC SERVICES BACKLOG PER PROVINCE
A breakdown of the 2012/13 financial year basic services backlog per province is below:
Province
Water
Electrification
Sanitation
Specialist Classrooms
1069
714
514 50
Eastern Cape
604
219
425
Free State 90 97 18 5
Gauteng
KwaZulu -Natal
229
 116 47
Limpopo
118
135 3 10
Mpumalanga 15
106
North West 13 41
Northern Cape
Western Cape

25. DORA CONDITIONS FOR THE SCHEDULE 7 (ASIDI) GRANT
Grant-in-kind administered by the national Department of Basic Education (DBE).
DBE must submit a Programme Management Plan which includes detailed project plans, procurement strategies and procurement strategies, projected cash flow schedules and plans detailing the monitoring and evaluation of project implementation of projects funded through this grant to National Treasury for sign off, before requesting the first drawings on this grant.

26. DORA CONDITIONS
Provincial departments must appoint Programme Planning and Monitoring Teams (PPMTs) that will assist the DBE plan and oversee the implementation of projects.
The DBE must submit monthly project cash flow reports to National Treasury 7 days after the end of each month that show how actual payments and cash flow reconcile with the projected cash flow schedule and explain any deviations from the original projected cash flow.
Provincial departments of education must report on the progress of projects funded through this grant in their annual report and describe how the schools have been considered in their future planning.

27. LESSONS FROM 2011/12 FINANCIAL YEAR
The programme has been approached through a number of relationships entered into with implementing agents specific to delivery requirements viz. DBSA for the Mud Schools; Mvula Trust; and IDT (through a sanitation programme of the Department of Human Settlements) for Water and Sanitation and Eskom for Electrification.
In the 2011/12 financial year, 50 schools were allocated to DBSA as implementing agent.
The outcomes and outputs of the various implementing agents have not been logically related to an overall ASIDI programme plan.
In those instances where Programme Implementation Plans have been submitted by implementing agents, they have been limited to the projects allocated and have not been adequate to determine if and how they will complete the targeted number of projects within the time and budget parameters.

28. LESSONS FROM 2011/12 FINANCIAL YEAR (cont’d)
The PEDs and previous initiatives have adopted a practice of handing over project lists to implementing agents and consultants, without adequate control and decision gates.
The consequence has been a loss of control and inadequate control on the programme.
The DBE has noted that all implementing agents have been surprised by the level of monitoring and accountability and, in most instance, have had difficulty in meeting requirements.
Cost of school infrastructure is exorbitant with hidden costs. DBE insisting on renegotiation of price.

29. IMPLEMENTATION APPROACH
DBE is considering the following implementation measures and principles in 2012/13:
Work Packages be adopted as a mechanism to manage the work breakdown structure but, retain the economy and scale required to accelerate delivery.
The Project Cycle turnaround time can be reduced to accelerate the programme and minimise bottlenecks.
Procurement bottlenecks be minimised by using a range of procurement strategies and expanding the resource pool beyond DBE.
Adopt a mix of delivery modalities increasing the number and diversity of implementing agents.
In addition to traditional procurement and procurement through implementing agents, it is proposed that the DBE enter into strategic relationships with those PEDs who have already established their own resources panels. These rosters would be made available to the programme in the procurement of professional service providers and contractors.

30. IMPLEMENTATION APPROACH (cont’d)
DBE will negotiate with other National Departments and Department of Public Works in relevant provinces where their rosters are constituted of the relevant built environment skills sets and may already have a geographic focus.
The DBE has initiated a process to implement a framework agreement procurement model.
Implementing Agents, Professional Service Providers and Contractors are pre-qualified. The services can be secured through their inclusion in a pre- approved panel. DBE and the implementing agents have access to the panel appointed through the framework agreement, thus reducing procurement through traditional open tender routes. It has the possibility of attracting larger contractors and professional teams. Project Teams will be assembled from the framework agreement.

31. PROGRAMME DELIVERY CYCLE
The traditional project cycle is linear and stages are dependent on each other.
Any interference or challenge experienced in the process has a significant impact on the delivery time frame.

32. PROGRAMME DELIVERY CYCLE (cont’d)
The shorter cycle is proposed whereby:
Undertaking of assessment, scoping and briefing and design steps are completed independent of procurement, construction and closeout.
It will be possible to release different work packages in a diverse range of programmes in response to the available capacity and performance.

33. REQUIRED CAPACITY TO DELIVER
The current capacity within the DBE and PSU has been tailored to an implementation model that assumed that the programme will be managed through a limited number of strategic relationships with implementing agents.
Further, it had been assumed that the DBE will be able to focus its efforts at the portfolio level relying on the programme and project management capability of its implementing agents.
It has become apparent that the DBE will need to become more hands-on and have a greater degree of control at a project level.
A revised approach that aims to accelerate implementation to the extent that it is able to manage 20 Teams implementing 10 Project each.
Provides a production capacity to manage 200 projects at any time. It should be noted that project duration can be long where EIAs, land availability issues and Geotechnical conditions are encountered. It is therefore imperative to increase the number of active projects at any one time.

34. REQUIRED CAPACITY TO DELIVER
Project Teams (20)
Project Manager (principal agent)
Quantity Surveyor
Architect
Engineer
Supplementary DBE Resources (estimates)
Design Supervision Team (4 Architects, 2 quantity surveyors and 2 Engineers)
Contract Administration (4 Administrators + increased legal resource)
Procurement Capacity (1 lead and 4 admin)
Monitoring and reporting (4)

35. TIME FRAMES

36. ESTIMATED BUDGETS ASIDI Programme Current Projection 2011/12 2012/13
2013/14
Total
Original Budget Allocation
Short fall or Surplus from previous year
Revised Annual Budget
Inappropriate Structures 49
100
346
495
Water
321
1069
1390
Sanitation
262
514
776
Electrification
152
714
866
Special Spaces 50
Others
PSU (SLA Fees)
PSU (Scoping) incl VAT but excl Disb
PSU (Framework Agreements)
TU Administration Costs
Cumulative Surplus or Short Fall from original Allocation

37. RISKS AND MITIGATIONS FOR IMPLEMENTATION
Current programme management and delivery experience is limited. Capacity of all the Implementing Agents contracted is limited, and their systems do not meet requirements.
Diversify delivery modality. Reduce reliance and dependence on implementing agents.
DBSA has low project maturity and capacity. Experiencing a learning curve on the first 50 Schools allocated.
Additional contract allocation will be dependent on competence, capacity and will be subject to performance.
Mvula Trust is receptive and co operative but, needs support and assistance in developing systems, reporting, accountability and national programme management. They are equipped to deliver at local level and work through provincial directorates that work independently of each other.
Use their allocation in 2011/12 to develop their systems. On assessment of their compliance and performance increase allocations.
Identify additional delivery modelities.
Have not established a relationship with, or finalise an agreement with IDT at a national level. Performance between different provinces has been observed to be variable. They demonstrated an ability to deliver for PEDs in selected provinces (Gauteng, North West, Limpopo).
Limit risk exposure to contracting with IDT at a provincial level. It will contain risk on allocations to one province and also slow release of work package in relation to performance.

38. RISKS AND MITIGATIONS FOR IMPLEMENTATION
Eskom, as with other implementing agents, has not been used to being held accountable and reporting to a “client”. No alternative available for electrification especially with regard to securing network point of connection.
Develop their reporting capacity and closer monitoring.
PEDs have not demonstrated an ability to implement water and sanitation allocations . They are often stretched by EIG and Equitable share projects with a few exceptions.
Shift allocations away from PEDs in subsequent periods.
Institutional capacity for traditional procurement timeframes and inadequate planning for procurement result in delays and also will require more capacity to cope with the programme.
Adopting a range of procurement options in addition to traditional approach.
Capacity of smaller or lower CIDB grade contractors to complete projects.
Work packages will allow for subcontracting and alternative delivery modalities will allow them to be accommodated in different sub- programmes.
The range of Schedule 2 (Major Public Entities e.g DBSA, IDT, ESKOM, etc.), implementing agents limited and they cannot be relied upon.
Expanding the range of delivery agents to reduce reliance on implementing agents.

39. Conclusion
The Department supports the promulgation of the Division of Revenue Bill as an Act of Parliament.
Thank you