Purpose of the presentation

1

Presentation of the 4th Quarter Financial Performance of the

Departmentto the Standing Committee on

Appropriations (SCOA)

24 August 2010

1

2

Purpose of the presentation

• To present the financial performance of the department for the 4th quarter of the financial year ending 31 March 2010.

• To provide explanations on the unspent funds under Programme 2,Provision of Land and Accommodation and incentive grants under Programme 3.

2

3

Total Department: Financial Performance per Economic Classification

Economic classification

Adjusted Budget

Allocation2009/10

Exp as 31 Mar 2010

Exp % as at 31

March 2010

Exp % as at 31

Dec 2009

% increase

in expendit

ure

Comments

R'000 R'000

Compensation of employees

988 158 976 110 99% 72% 27%

Goods and services

532 023 526 957 99% 61% 38%

Increased spending is largely attributable to the R30 mil written off against fruitless exp and R10 mil against irregular exp and debtors.

Property Management

411 203 411 203 100% 97% 3%

Transfers and subsidies

2 607 897 2 478 282 95% 84% 11%

Infrastructure 1 462 325 1 253 584 86% 55% 31%Trends normal with the payment projections

Machinery and equipment

47 524 41 080 86% 59% 27%

Total 6 049 130 5 687 216 94% 73% 21%

3

4

Breakdown of the Expenditure Capital Budget- Infrastructure

Item Allocation

R’000

ActualExpenditureR’000

% Spentas at March 2010

Departmental 58,260 51,991 89%

Accessibility for disabled people

20,000 14,614 73%

Dolomite Risk Management

25,376 21,168 83%

Land Ports of Entry

668,284 626,205 94%

Prestige 415,569 356,229 85%

RKTP 33,150 25,832 78%

Rolled over funds & adjustment budget paid to the PMTE

241,686 157,544 65%

TOTAL 1,462,325

1,253,584 86%

Roll over approved was for the following projects:

RKTP - R 54,285 millionDepartmental – R 6,187 millionLand Port of Entry – R 17,101 millionPrestige – R 34,113 million

Adjustment budget of R 130 million was for Prestige accommodation for newly appointed Ministers and Deputy Ministers

4

5

Reasons for under spending under theInfrastructure budget

Departmental Budget

• Delays related to the acquisition of prestige accommodation – Suitability and availability of houses– Price negotiation process

Land Ports of Entry

– Skilpadshek : Negotiations for the acquisition of a portion of property (tavern)

required for the construction of the Border Post precinct delayed the execution of

the project . Estimated under-expenditure.

– Lebombo : The One Stop Border Post project initially planned for Lebombo had to

be restructured into phases due to financial constraints and legal implications

relating to operations and construction required on foreign territory. Estimated

under-expenditure.

5

6

Reasons for under spending under the Infrastructure budget cont.

Re kgabisa Tshwane Programme:

– Delay in obtaining approval for additional

work for Government Garage

project.

– Delay in the procurement process to

appoint consultants for the joint DPW and

Tshwane Inner City Precinct Plan.

6

7

Reasons for under spending under the Infrastructure budget cont.

DOLOMITE :

• Delay in procuring specialist consultants and contractors

required to implement dolomite projects.

ACCESSIBILITY :

• Non responsiveness of the bidders delayed the appointment of service providers.

• Cancellation of SAPS facilities from the program due to devolution process, which led re- prioritisation of buildings occupied by DPW.

• Change of the initial scope of work.

7

8

Year on Year Comparison- Capital Expenditure

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2009/10 2008/09 2007/08

Budget

Expenditure

86%

87%

57%

8

9

Financial Performance per Programme

Programme

Adjusted budget

allocation2009/10

Exp as 31 Mar 2009

Exp % as at 31 Mar

2010

Exp % as at the 31

Dec 2009

% increase in

expenditure

R'000 R'000 R’000

Prog 1. Administration

774 228 773 431 100% 79% 21%

Prog 2.Provision of Land and Buildings

4 390 594 4 170 356 95% 75% 20%

Prog 3.National Public Works Programme

837 177 697 223 83% 59% 24%

Prog 4.Auxiliary and Associated Services

47 131 46 207 98% 96% 2%

Total 6 049 130 5 687 217 94% 73% 21%

Increased spending under Prog 3 relates to incentive grants which were not yet due at the end of Q3.

9

10

Expenditure Analysis- Earmarked Funds

FunctionBudget‘000

Expenditure31 Mar % Spent

Property Management (Office Accommodation) 411 203 411 203 100%

DPW Infrastructure 1 462 325 1 253 584 86 %

CIDB 59 269 59 269 100 %

Council of the Built Environment 24 155 24 155 100 %

Agrement Board 8 554 8 554 100 %

Boundary Fencing 7 364 5 654 77%

Augmentation of the PMTE 588 411 588 411 100%

Property Rates – Conditional Grants 1 349 738 1 349 738 100%

EPWP INCENTIVE GRANTS 353 167 216 706 61 %

Independent Development Trust (IDT) intermediaries 14 500 14 500 100 %

10

11

Expenditure Analysis- Earmarked Funds Cont.

FunctionBudget‘000

Expenditure‘000 % Spent

EPWP – Non State Sector 190 000 190 000 100 %

CETA (HR) 2 215 887 40 %

Parliamentary Villages 6 607 6 607 100 %

Energy Efficiency 35 000 19 465 56%

State Functions 22 106 23 940 108 %

Commonwealth War Graves 16 478 14 775 90%

TOTAL 4 550 462 4 187 448 93 %

11

12

EPWP incentive update

1

12

13

1.0 Introduction

• The EPWP incentive has now been introduced to all sectors of the EPWP from the 10/11 financial year.

• The Infrastructure sector incentive is applicable to Provincial Departments and Municipalities.

• The Environmental sector incentive is applicable to National Departments through their appropriations from National Treasury.

• The Non-state sector grant is paid to Non-Government Organisations ( NGOs) and Non-Profit Organisations through the Independent Development Trust ( IDT) which was appointed as the intermediary.

• The Social sector grant has been paid as a schedule 5 grant to Provincial Departments of Social Development and Education.

13

14

2.0 EPWP infrastructure sector incentive progress for 09/10 financial year after the 3rd quarter of the 09/10 financial year ( paid in 4th quarter 09/10)

• 5 out of the 16 Provincial Departments have been paid incentive payments totaling R

53,633 million considering 3rd quarter payment reports. Total payment to Provincial

departments considering payments in previous quarters is R116.6 million out of an

allocation of R 151.4 million (77% of Provincial allocation).

• 47 of the 68 eligible municipalities have been paid their incentive payment of R 78.6

million considering the 3rd quarter report of the 09/10 financial year. Total incentive

payment to municipalities after the 3rd quarter is R 114.17 million out an allocation of R

201.7 million ( 57% of Municipal allocation).

• Total incentive payment to Provincial Departments and Municipalities made for the

09/10 financial year totals R 230.8 million, out of the total allocation of

• R 352.1 million, representing expenditure of 66% of the allocation for the 09/10 financial

year. 14

15

Province Incentive allocation for the 09-10 financial year(R’000)

Incentive payment after 3rd quarter 09-10(R’000)

Incentive payment for 3rd quarter 09-10 ( R’000)

Eastern Cape 29,992 17,457 15,381

Free State 23,008 0 0

Gauteng 500 0 0

KwaZulu-Natal 84,180 84,854 35,100

Limpopo 500 0 0

Mpumalanga 5,047 0 0

Northern Cape 500 0 0

North West 7,192 0 0

Western Cape 500 14,269 3,152

Total 151,419 116,581 53,633

Performance on the EPWP incentive grant by Provinces after 3rd Quarter 09/10 financial year ( paid in 4th quarter 09/10)

15

16

Province Incentive allocation for the 09-10 financial year(R’000)

Incentive payment after 3rd quarter 09-10(R’000)

Incentive payment for 3rd quarter 09-10 (R’000)

Eastern Cape 53,559 7,818 3,905

Free State 9,073 1,956 1,047

Gauteng 34,881 59,875 51,038

KwaZulu-Natal 39,974 26,102 15,038

Limpopo 18,328 6,140 2,626

Mpumalanga 13,454 2,453 1,468

Northern Cape 15,496 5,769 960

North West 9,694 2,787 1,493

Western Cape 7,289 1,271 708

Total 201,748 114,170 78,644

Performance on the EPWP incentive grant by municipalities after 3rd Quarter 09/10 financial year ( Paid in the 4th quarter of the 09/10 financial year).

16

17

3.0 Performance on the EPWP infrastructure Incentive after the 4th quarter of the 09/10 financial year ( Paid in the 1st quarter of the 10/11 financial year)

• 8 out of the 16 Provincial Departments will be paid incentive payments totaling R

54.551 million considering EPWP 4th quarter report for the 09/10 financial year . Total

payment to Provincial departments considering payments in previous quarters is

R171.132 million out of the full incentive allocation of R 201.892 million for 09/10

reporting ( 85% of the full allocation). This payment includes 4th quarter payment paid in

the 10/11 financial year.

• 36 out of the 68 of the eligible municipalities will receive a total incentive payment of

R93.463 million considering the 4th quarter report for the 09/10 financial year.

• Considering the 4th quarter report ( 3rd quarter for municipalities) 56 of the eligible 68

municipalities will have accessed R 207.61 million out of the available R 302.383

million available in the 09/10 municipal financial year ( 69% of the allocation for the

municipal financial year). This is comparable to the 75% of allocation expected to be

paid after 3 of the 4 quarters in the municipal financial year.17

18

• The EPWP incentive grant is beginning to have the intended performance of encouraging Public bodies to exceed their Full Time Equivalent ( FTE) work opportunity targets. Provincial Departments in KZN, GP, WC and EC have exceeded their targets and have paid extra incentive amounts.

• 11 of the 68 eligible municipalities in GP,KZN, LP, NW and WC have already exceeded their FTE targets by the 4th quarter of reporting ( 3rd quarter of municipalities) for 09/10.

• The number of Municipalities that will access the incentive will increase to 126 municipalities in the 10/11 financial year from the 68 municipalities in the 09/10 financial year.

18

19

4.0 Progress of the Infrastructure sector incentive in the 10/11 financial year• For Provincial Departments, the incentive has been paid

to 8 of the eligible departments in 5 provinces. R85.943 million will be paid out of the R330.67 million available for the 10/11 financial year considering 1st quarter reporting. This represents 26% of the Provincial allocation.

• For Municipalities, 56 of the eligible Municipalities have been paid the incentive in all the Provinces. R 200.259 million of the R 622.996 million will be paid considering 1st quarter reporting. This represents 32% of the Municipal allocation for the 10/11 financial year.

• Provincial Departments in Gauteng, Mpumalanga, Western Cape, Northern Cape and North West reported in the 1st quarter 10/11 but did not exceed the threshold for incentive payment.

19

20

Province Full Incentive allocation for the 09-10 reporting including 4th quarter payment in 10/11 (R’000)

Incentive payment after 4th quarter 09-10(R’000)

Incentive payment for 4th quarter 09-10 ( R’000)

Percentage of 09/10 full incentive paid (%)

Eastern Cape 39,989 34,789 17,332 87

Free State 30,678 0 0 0

Gauteng 667 2,498 2,498 375

KwaZulu-Natal

112,240 115,259 30,269 103

Limpopo 667 2,617 2,617 393

Mpumalanga 6,730 0 0 0

Northern Cape

667 0 0 0

North West 9,589 0 0 0

Western Cape

667 15,969 1,700 2395

Total 201,892 171,132 54,551 85

4.1 Performance on the EPWP incentive grant by Provinces after 4th quarter 09/10 reporting

20

21

Province Incentive allocation considering 09/10 municipal financial year (R’000)

Incentive payment after 4th quarter 09-10(R’000)

Incentive payment for 4th quarter 09-10 ( R’000)

Percentage of 09/10 full incentive paid (%)

Eastern Cape 80,339 16,778 8,961 21

Free State 13,609 2,093 137 15

Gauteng 52,077 99,081 39,208 190

KwaZulu-Natal

59,962 50,572 24,469 84

Limpopo 27,495 17,358 11,240 63

Mpumalanga 20,181 247 34 12

Northern Cape

23,244 5,801 32 25

North West 14,541 11,581 8,797 80

Western Cape

10,934 1,855 584 17

Total 302,383 207,610 93,463 69

4.2 Performance on the EPWP incentive grant by Municipalities after 4th quarter 09/10 reporting ( 3rd quarter 09/10 for municipalities)

21

22

4.3 Performance on the EPWP infrastructure incentive by Provinces after the 1st Quarter of the 10/11 financial year reporting

Province Infrastructure Incentive allocation for the 10/11 National financial year (R’000)

1st Quarter incentive payment for the 10-11 financial year(R’000)

Total incentive disbursedIn the 10/11 financial year (R’000)

Percentage of the 10/11 incentive disbursed

Eastern Cape 60,354 5,640 19,011 31

Free State 13,767 817 817 6

Gauteng 38,821 0 2,498 6

Kwa-Zulu Natal 169,470 28,896 59,300 35

Limpopo 2,903 0 2,617 90


Northern Cape 1,167 0 0 0


Western Cape 23,218 0 1,700 7

Total 330,671 35,352 85,943 2622

23

4.4 Performance on the EPWP infrastructure incentive by Municipalities after 1st quarter 10-11 reporting

23





Eastern Cape 97,806 6,844 16,182 17

Free State 34,400 1,402 1,539 4

Gauteng 165,048 69,984 110,476 67

Kwa-Zulu Natal 123,613 18,056 42,526 34

Limpopo 55,355 4,955 16,195 29

Mpumalanga 37,288 568 602 2

Northern Cape 50,399 1,889 1,931 4

North West 36,049 1,887 9,400 26

Western Cape 26,038 823 1,408 5

Total 622,996 106,119 200,259 32

24

2.1 Performance on the EPWP infrastructure incentive by Provinces after the 1st Quarter of the 10/11 financial year reporting





Eastern Cape 60,354 5,640 19,011 31

Free State 13,767 817 817 6

Gauteng 38,821 0 2,498 6

Kwa-Zulu Natal 169,470 28,896 59,300 35

Limpopo 2,903 0 2,617 90


Northern Cape 1,167 0 0 0


Western Cape 23,218 0 1,700 7

Total 330,671 35,352 85,943 2624

25

2.1 Performance on the EPWP infrastructure incentive by Municipalities after 1st quarter 10-11 reporting





Eastern Cape 97,806 6,844 16,182 17

Free State 34,400 1,402 1,539 4

Gauteng 165,048 69,984 110,476 67

Kwa-Zulu Natal 123,613 18,056 42,526 34

Limpopo 55,355 4,955 16,195 29

Mpumalanga 37,288 568 602 2

Northern Cape 50,399 1,889 1,931 4

North West 36,049 1,887 9,400 26

Western Cape 26,038 823 1,408 5

Total 622,996 106,119 200,259 3225

26

3.0 Non State Sector (NSS) Progress for the 2009/10 financial year• The final budget allocation for the NSS was R

204.5 m. This was the result of an additional allocation of R114.5m for the Community Works Programme (CWP) in the adjustment budget on the original budget ofR90m.

• Included in the NSS allocation is a transfer of R14.5m to the Independent Development Trust (IDT) as the appointed intermediary to manage the NSS on behalf of DPW.

• The allocation for the CWP was made up of wage costs and non-wage costs. The non-wage costs amount to R58.5m and the wage costs R91m

• By the end of the 2009/10 financial year DPW had transferred the full allocation to the two programmes.

26

27

3.1 Community Works Programme Budget performance for the 2009/10 financial year

Budget Actual

Balance of supervision costs: community level 1 048 384 2 537 038

Bank charges 3 639 990 686 997

Protective clothing 3 471 177 8 593 238

Tools and materials costs 18 916 719 11 570 957

Training and technical support 9 099 976 7 130 120

Project management 14 130 668 13 714 420

VAT - 5 610 472

Assets - 463 673

Venue hire, accommodation 138 000 138 000

Project Management Fee 213 045 213 045

Travel & Subsistence 210 000 210 000

Tools and materials 531 450 531 450

Technical Support and Training Crew 911 000 911 000

Wages (supervisors) 340 000 340 000

Programme Management Fees: TIPS 5 850 000 5 850 000

Total Expenditure 58 500 409 58 500 410

Budget Actual % Spent

Wage 90 999 935 87 544 300 96%

Goods and services (less programme management) 50 306 914 50 306 915 100%

Totals 141 306 849 137 851 215 98%

Table : Site level expenditure, 2009/10

27

28

3.2 Non Governmental Organizations (NGOs) performance for the 09/10 financial year

PROVINCE AMOUNT PAID

EASTERN CAPE 6 560 000

FREE STATE 4 872 300

GAUTENG 2 636 400

KWAZULU NATAL 6 620 432

LIMPOPO 5 083 700

MPUMALANGA 3 684 000

NORTHERN CAPE 2 400 000

WESTERN CAPE 4 330 750

NORTH WEST 3 972 825

TOTAL 40 160 407

• The full allocation of R40.1 million was transferred to NGO’s participating in the institution based programme.

• The full allocation is for wages at a rate of R50 per person per day.

28

29

I thank you

29

Documents

Purpose of the presentation