PRESENTATION TO NCOP BY THE MEC LIMPOPO PROVINCIAL TREASURY

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PRESENTATION TO NCOPBY THE MEC LIMPOPO
PROVINCIAL TREASURY
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• 16TH JANUARY 2006

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(No Transcript)
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EDUCATION

• HIV/AIDS
• The commitment is R10,117m which will increase
  expenditure to R16,554m at the end of the
  financial year.
• Redesigning of the HIV/Aids Conditional Grant is
  being proposed in order to enhance impact.
• Primary School Nutrition Programme
• This grant feeds about 1 400 000 school children.
  The Department projects full utilisation of the
  grant by the end of the financial year.

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Conditional Grants Actual expenditure as at 31
December 2005 of the financial year 2005 / 06
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Conditional Grants Actual expenditure as at 31
December 2005
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Conditional Grants

• Expenditure 2005 / 06
• The department has managed to increase the
  expenditure per quarter as follows
• 6.27 R40.67m in the first quarter
• 22.1 R 106.391m in the second quarter
• 43.5 R 241 860 in the third quarter
• The inability of the department to secure Tenders
  for the purchase of Medical Equipment has
  resulted in limited expenditure to date on the
  following grants
• Hospital Management and Quality Improvement at
  37.26,
• National Tertiary Services at 28.76
• The tenders for Medical Equipment was finalised
  in November and expenditure is expected to
  substantially increase in the last quarter as the
  business plans include the assets required.
• Equipment has been ordered and deliveries are
  awaited

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Conditional Grants

• Expenditure - HIV AIDS
• The business plans for HIV AIDS was adjusted in
  an attempt to ensure that service delivery is
  speeded up, the revised plans were forwarded to
  National Health in November 2005.
• Some R20 million was transferred to NGOs during
  October 2005, after proper screening the NGOs
  ability to deliver on the part of the
  Comprehensive HIVAIDS programme that they are
  expected to deliver service on.
• Personnel Expenditure is not expected to increase
  as health professional posts catered for are not
  being filled as anticipated under spending of R
  11 m or 8.2 .
• Expenditure increased from 7.7 in Sept. to 45.3
  in Dec 2005
• The expenditure should be increased once a system
  to account for medicines and tests used on
  HIVAIDS related treatments in the hospitals is
  agreed upon.
• Identifying the medicines used for the treatment
  of Aids Patients remains to be a challenge as all
  medicines are procured at a central point on the
  equitable share and have to be journalised to
  capture the expenditure under the Conditional
  Grant.

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Conditional Grants

• Expenditure and interventions - I N P
• The participation on the National Tender RT 289
  has not been available to the department.
• R 2 m for food supplements committed in November,
  purchased via quotations.
• R 1.5 m for equipment already delivered, invoices
  awaited.
• An additional R 2 m for equipment has been
  ordered.
• Future participation on RT 289 is being
  negotiated to streamline procurement.
• Vitamin A supplements (tablets) is being procured
  via the Pharmacy Depot to comply to contract
  requirements including the Bar Coding, to the
  value of R 700 000 to year end.

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Conditional Grants

• Expenditure and interventions - I N P cont.
• The use of multi vitamins was also slowed down
  due to contract requirements, R 1.5 m yet to be
  procured.
• Skills development for food service management
  personnel to take place in February 2006 for R 2
  m and the programme will continue into the next
  financial year.
• Backlog of R 600 000 in Greenery projects in
  Bohlabela district due to un-availability of the
  system.
• R 3 m yet to be spent by year end on all Greenery
  projects.
• HPTD Grant
• Expenditure on the HPTD Grant has been above the
  average and no problems is foreseen in spending
  the funds on service delivery in this regard, as
  equipment tenders are now in place.

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Conditional Grants

• Expenditure and interventions HMQI
• The training of management is ongoing but
  availability of management for training over
  extended periods are restrictive.
• Personnel costs are below norm due to vacant
  posts.
• The purchase of equipment R 2.8 m has not taken
  place-
• Computers
• Filling systems - Delay in the implementation of
  the Information and Records Management tender
• Lack of equipment tender for medical equipment
  that was only finalized in December

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Conditional Grants

• Expenditure - NTSG
• Purchase of equipment has been delayed due to the
  unavailability of a tender that is now being
  finalised, has resulted in low expenditure
  patterns but an amount of R 32 m has since been
  committed.
• It is envisaged that the full budget for
  Equipment of R 46 m will be utilised
• Personnel costs for Specialists employed on the
  equitable share has been identified to be funded
  from this grant for the first three years of
  their employment and the Grant does carry these
  costs.
• Expenditure - Cholera / Malaria
• The full amount of R 2.718 m received as a roll
  over will be spent during the year on-
• Pesticides for Malaria control
• Vehicles for Vector control have been ordered
• In response to the recent instances of reported
  Malaria cases R1.26m has been committed against
  the grant.

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Conditional Grants

• Expenditure Hospital Revitalisation
• The department surrendered R10 m to National
  Health with a request to increase the allocation
  for the 2006/07 year with the same amount due to
  the projects being completed in the following
  financial year.
• This grant is fully committed but expenditure is
  dependant on the progress made by contractors.
• The capacity of emerging contractors together
  with the availability of building materials
  especially Building Bricks has been a constraint
  that impacts on the timeous completion of the
  current contracts
• Upgrading of the filing system at Revitalised
  Hospitals to the value of R 4.6 m has been
  ordered.

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Local Government

• Housing Subsidy
• Shortage of clay bricks in the province,
  difficulties experienced by contractors in
  raising funding for the acquisition of materials
  for construction and delays in implementing
  contracts by developers contributed to the low
  levels of spending on the Housing Subsidy.
• Spending improved gradually and total spending is
  projected at R417.29 million which is 91.32.
• 3 880 houses will be completed as at the 31 March
  2006.

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Local Government (Cont)

• Human Settlement and Redevelopment Programme
• The overspending is as a result of the
  expenditure on projects whose budgets were rolled
  over from 2004/05 to 2005/06

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Social Development

• HIV/AIDS
• The expenditure is high because the Department
  has already transferred funds to 64 NGOs for the
  smooth running of the programme. The transfers
  are in line with the Departments planning.
• Social Assistance Admin Grant
• The underspending is as a result of the delay in
  filling of posts identified as critical, and also
  on goods and services as a result of shared
  items, e.g. Stationery, telephone, water and
  electricity. South African Social Security Agency
  is currently housed within the Department of
  Health and Social Development.

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Social Development

• Social Assistance Transfers Grant
• A growth of 2 is projected and the actual growth
  in our province is about 2.6.
• Integrated Social Dev Grant
• There is no actual expenditure to date due to the
  delay of business plan approval. The delay was
  caused by the change of the conditions of the
  grant by National Department and identification
  of the projects to be funded. The business plan
  has now been approved and the expenditure will
  start to reflect in the third quarter.

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Sports, Arts and Culture

• Mass Sport and Recreation Programme
• The underspending on the grant is due to the fact
  that new hubs were supposed to have been launched
  during November, but was postponed to February
  2006. Grant will be fully utilised.

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Agriculture

• Comprehensive Agricultural Support Programme
  (CASP)
• The underspending is due to limited capacity for
  infrastructure development and project
  registration in districts. There are numerous
  small projects that makes it difficult to manage.
• Land Care Programme Grant
• The underspending is due to the delay in supply
  of fencing materials by suppliers. Orders were
  issued but payments could not be processed due to
  non delivery.

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Provincial Infrastructure Grant
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PIG
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Reasons for underspending (PIG)

• Total Total spending on the grant is at 40.2 is
  projected to be at 98 by yearend.
• Education
• Spending on the grant is at 44 of the grant.
• It is expected the department will end the year
  at 100 of its budget (including commitments at
  yearend).
• The low expenditure to the end of September is
  due to projects starting late (the departmental
  business plan was changed due a review of
  priorities, i.e. focus areas).
• Roads Transport
• 41.2 has been spent so far. Most of the big
  contracts were awarded in September, spending is
  low as a result. (Spending has been picking up
  since September which stood at 14.8).
• The department projects to spend all its budget.

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Reasons cont

• Health Social Development
• 26.2 of the grant has been spent so far.
  Spending on projects is dependant on stages of
  completion of the projects and most of these
  started late. There were other project related
  problems such as
• 1. The late Appointments of Main Sub
  Contractors.
• 2. Project delays by the Implementing Agent, i.e.
  project implementation taking more time than it
  should.
• 3. Poor performance by the main Contractors.
• The department projects an underspending of 10
  of its budget (R9.0M).
• Agriculture
• The department has spent 40.2 of the grant and
  this is due to the review of the small-holder
  irrigation schemes that were targeted to benefit
  from the grant (during the review process, these
  projects were put on hold).
• With regard to fencing projects, supplier
  capacity for the poles to be used for fencing was
  overstretched, with the major suppliers being
  affected, leading to further delays in project
  starting times.
• The department will underspend its budget by 15
  (R5.9M).

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Intervention strategies (PIG)

• Health Social Dev.
• The department has adopted a proactive approach
  in project management, e.g. the project
  documentation stages are started earlier in order
  to pre-empt delays in tendering, etc.
• Most of the grant is used for clinic projects (33
  projects, most of these have just started and
  some will start in Feb ave. cost per clinic
  R3M).
• The department is unlikely to spend its full PIG
  budget in this financial year and could end the
  year at around 90 of its budget.

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Intervention strategies

• Education
• The department is identifying projects for
  fasttracking and this will boost expenditure
  (almost all the budget is already committed).
• (NOTE There could be some amounts that are not
  PAID but committed by yearend).

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Cont

• Agriculture
• The department is unlikely to spend its full PIG
  budget and will end the year at around 85 of the
  budget (underspending of R5.9M).
• Roads Transport
• Engineers from the Roads Agency are currently
  assessing the projects in the province and
  identifying fast-moving projects and reallocating
  funds to these in order to eliminate the risk of
  underspending.

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Total Infrastructure Budget
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Total Nov YTD Spending
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Total Spendingcont
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Total budget reasons for underspending

• Total Total capital spending (incl. PIG) is at
  34.3 and is projected to be at 96 by yearend).
• Roads Transport
• Most of the big contracts were awarded in
  September.
• Education
• Projects started late due to a review in
  priorities (which impacted on the business plan,
  i.e. it was changed).

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Agricreasons

• Lack of skills to undertake technical
  infrastructure planning functions, e.g. the
  inability to compile the bills of quantities
  required for the projects.
• Progress on projects has been delayed by the
  demand planning processes whereby a certain level
  of technical expertise, e.g. engineering is
  inadequate to expedite most projects.
• With regard to fencing projects, supplier
  capacity for the poles to be used for fencing was
  overstretched, with the major suppliers being
  affected, leading to further delays in project
  starting times.

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Agric..reasons

• The decentralization process of both the planning
  and financial processes of several programs to
  the Districts affected CASP as District Senior
  Managers had to take full charge of the several
  programs with inadequate capacity.
• Most districts did not develop detailed project
  implementation plans on time and as such this led
  to a slow start for some of the projects.

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Agricreasons

• In order to boost project performance and
  delivery, the department has
• Developed a Project Database which will improve
  the monitoring of the projects.
• Initiated the buying of materials for fencing in
  bulk.

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Health Soc. Dev

• Reasons that contributed to delays are the
  following
• For 15 of the main contracts, contractors went on
  site from the 15th of July, which negatively
  affected spending.
• Delays on supply of medical equipment for the
  hospital projects, orders were issued in April
  2005 but to due to delays in delivery, no
  payments were made for these projects in the 1st
  Quarter of 2005/06.
• Spending on clinics (both new construction and
  upgrades), health centres and mortuaries was also
  hampered by delays in the documentation phase of
  project implementation (e.g. tender evaluations,
  etc in line with the Construction Industry
  Development Board (CIDB) guidelines which require
  contractors to be registered and categorised per
  amount of project that they can undertake).

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Health

• The department is also taking proactive measures
  to ensure that delays are minimized, e.g. by
  appointing contractors early and having them take
  site before the scheduled departmental project
  starting time.

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Health Soc. Dev

• Reasons that contributed to delays are the
  following
• For 15 of the main contracts, contractors went on
  site from the 15th of July, which negatively
  affected spending.
• Delays on supply of medical equipment for the
  hospital projects, orders were issued in April
  2005 but to due to delays in delivery, no
  payments were made for these projects in the 1st
  Quarter of 2005/06.
• Spending on clinics (both new construction and
  upgrades), health centres and mortuaries was also
  hampered by delays in the documentation phase of
  project implementation (e.g. tender evaluations,
  etc in line with the Construction Industry
  Development Board (CIDB) guidelines which require
  contractors to be registered and categorised per
  amount of project that they can undertake).

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Health

• The department is also taking proactive measures
  to ensure that delays are minimized, e.g. by
  appointing contractors early and having them take
  site before the scheduled departmental project
  starting time.

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Possible risks of underspending

• Education
• Projects will be fasttracked to avert
  underspending. By yearend all the money will be
  committed.
• Agriculture
• This sector will underspend its budget by 15
  (R35.6M).
• Health Social Development
• This sector will spend about 90 of its budget
  (underspending of R42.5M)
• There are 33 clinic project at a cost of R3M each
  which have just started. Some of the projects
  will start in Feb which will impact on spending.
• Roads Transport
• The full budget will be spent.
• About R179M was spent in Dec.
• With the balance spent as follows about R100M in
  Jan, about R100M in Feb and the balance, about
  R250M in March.
• Rain could derail projects in other areas but the
  department is proactively moving funds to
  projects that are not affected by rain.

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The End