PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL EXPENDITURE

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PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL
EXPENDITURE

• Parliament 2nd September 2008

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Contents

• 2008/09 Conditional Grants Allocation
• First quarter Conditional grants spending
• National School Nutrition Programme
• HIV and Aids
• Infrastructure Allocation to Provinces
• Early Childhood Development
• Conclusion

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Overall Departmental expenditure at 30 June 2008
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Trends in Education Conditional Grants
Actual spending on FET Recapitalistion Grant for
1st quarter by Colleges is R5,672 million
representing 21,73 spending against the
allocation
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Trends in Education Conditional Grants

• The department recorded a good performance in
  term of conditional grants spending from the past
  financial years
• In 2006/07 spending for all grants was 100 per
  cent
• The reduction in the allocation of National
  School Nutrition programme in 2007/08 created a
  pressure
• The grant was exhausted and commitments amounting
  to R19 million could not be paid

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The 2008/09 Budget Allocation
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2008/09 First Quarter Performance
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HIV and AIDS Grant

• The main objective for this grant is to Educate
  learners on Life Skill and HIV and AIDS and Care
  and Support to those infected and affected by HIV
  and AIDS
• The grant recorded a slow expenditure of 13 per
  cent in the first quarter
• Expenditure is expected to increase in the second
  and the third quarters
• The allocation for this grant will be exhausted
  at the end of the financial year

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National School Nutrition Grant

• The grant recorded 44.12 per cent for the first
  quarter
• The high expenditure was mainly as a result of
  payment of previous year commitments
• It is projected that the grant will over spend by
  R23 million in the current financial year
• Other challenges
• Insufficient administration budget for
  operational resources e.g. vehicles, computers.
• Insufficient personnel for monitoring and
  administration at District and Provincial
  Offices.

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Infrastructure Allocation to Provinces

• The first quarter expenditure not far from the 25
  per cent norm (22.19 per cent)
• Slow expenditure as a result of delays in the
  awarding of the contract for construction of 15
  schools
• The process finalized and contractors are on site
• Expenditure expected to increase in the 2nd
  quarter

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Challenges for Infrastructure

• Anticipated over-expenditure on allocations for
  existing projects (other than 15 schools) due to
• bids closing above estimates
• Escalation costs
• Cost increases due to non-performance of original
  contractors
• Therefore have limited funds available to
  commence new projects.

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Capital Expenditure

Item Budget R000 Expenditure R000 Available budget R000 spent
Building other fixed structures. 391 494 61 057 330 437 15.59
Machinery Equipment. 51 900 3 479 48 421 6.70
Total. 443 394 64 536 378 858 14.55
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Reasons for slow spending

• Bulk of the budget for machinery is for Computers
  for schools (R36 million)
• The department constituted a task team to
  investigate alternatives to the SITA procurement
  processes
• Only during the week of 18 August 2008, the
  decision was taken to follow the SITA route. 
• It is expected that orders will be placed by end
  November 2008

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ECD BUDGET
2008/2009 Allocation Amount (R000)
Grade R SUBSIDY RESOURCE BUDGET R 50,092
TEACHERS PAID ON PERSAL R 13,166
TOTAL R 63,258
PLANNED EXPENDITURE FOR 2008/2009 (Grade R classes already selected and receiving subsidy) R 59, 017
BALANCE TO IDENTIFY NEW SCHOOLS R 4,241
Additional Schools (in process of identification) Between 250 300
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PERFORMANCE OF GRADE R FUNDING (excluding
salaries paid via Persal)
FINANCIAL YEAR BUDGET R'000 EXPENDITURE R'000 SPENT
2002/2003 4,638 3,608 77.79
2003/2004 12,091 11,307 93.52
2004/2005 29,949 28,270 94.39
2005/2006 31,557 31,072 98.46
2006/2007 33,829 33,827 99.99
2007/2008 39,576 38,184 96.48
2008/2009 50,092 24,358 48.63
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CURRENTLY FUNDED INSTITUITIONS
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PAYMENTS

• SUBSIDY FOR TEACHERS SALARIES
• The subsidy allocation for salaries are made as
  follows
• R1 800.00 (unqualified teachers)
• Teachers below the relevant NQF level 4
  qualification
• R3 000.00 (under-qualified teachers)
• Teachers with the minimum relevant NQF Level 4
  qualification (National Certificate in Early
  Childhood Development) but not fully qualified
• R5 000.00 (qualified teachers)
• Teachers with the appropriate 3-year teachers
  qualification (relevant to ECD)

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PAYMENTS-CONTROL MEASURES

• Transfers are only made if all the relevant forms
  have been submitted in time and are correct.
• The following forms need to be completed and
  attached before the next transfer is made to the
  institution
• Claim form / Certificate of Compliance

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PAYMENTS-CONTROL MEASURES

• Financial Statement Grade R Subsidy indicating
  expenditure for the previous funds received
  Attached with
• Monthly signatures of teacher receiving a salary
  at the back of the Financial Statement
• Original or certified copies of all invoices of
  resources procured with FSDoE funds for the
  implementation of Grade R
• An original or certified copy of the bank
  statement indicating the amount for previous
  funds received for the Grade R subsidy

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Pre-Grade R.

• The pre-Grade R allocation for 2008/09 is R6.9
  million
• The department planned to train 200 Pre-Grade R
  practitioners towards NQF Level 5 during this
  current financial year.
• The preparation towards advising the bid for
  training is underway.

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Pre-Grade R achievements

• 2007/08 250 practitioners from 100
  community-based sites were trained towards NQF
  Level 4 and 96 were successful (Flemish Project)
• Developed Pre-Grade R Curriculum through the
  assistance of the Flemish Project

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Monitoring Capacity

• Monthly Finance Committee meetings are held to
  discuss underspending and remedial actions
• Quarterly review sessions are held to provide
  feedback on service delivery and the budget.
• Monthly expenditure reports are sent for the
  attention and the comment of the HOD and the
  Executive authority.
• Each branch is allocated a management accountant
  to assist with all financial related queries
  including budget management
• Letters are written to managers who underspent to
  inform them of the status quo and the
  implications of their underspending.
• Where underspending persist affected manager are
  brought before the executive leadership and the
  MEC to account for their actions.
• Where managers are not able to spent despite all
  the interventions funds are diverted and spent in
  line with objectives of the department.

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Monitoring Capacity Continued

• National School Nutrition Programme grant
• Lack of human resource capacity is experienced
  under this project
• Regular progress reports, monthly/quarterly
• HIV and AIDS grant
• Monitoring is effective with a full-time
  Provincial co-ordinator ensuring that the
  activities take place strictly to the approved
  business plan and assisted by District Directors
• Infrastructure Allocation to Provinces
• Monitoring is effective between the Department
  and the Department of Public Works, Roads and
  Transport through monthly meetings held between
  the two departments
• Further Education and Training grant
• Actual spending by College is monitored on a
  monthly basis by officials at Head Office.
• Reasons for under / over spending must be
  submitted on a monthly basis by the respective
  Colleges

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CHALLENGES

• Most of the schools in the lower quintiles that
  still have to be identified for Grade R Funding
  are farm schools with a Grade R or Grade 1(to be
  used as benchmark) enrolment of less than 10
  learners
• Additional classrooms need to be built for some
  schools to enable them to offer Grade R. ECD
  section busy with audit to determine the exact
  need.
• HR Implications
• Growing Grade R also requires that additional
  officials be appointed at District level for
  monitoring and support

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Conclusion

• Generally spending on conditional grants was low
  in the first quarter
• Department project over expenditure on National
  School Nutrition Programme
• Expenditure on Infrastructure Allocation to
  increase as construction of 15 schools started

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• Thank you!!