first quarter 2010-11 national vote spending trends review | 25 august 2010

FIRST QUARTER 2010-11 NATIONAL VOTE SPENDING TRENDS REVIEW

| 25 August 2010

Agenda

• Introductions• Spending overview

– Report structure– Aggregate spending trends– First quarter provincial budget and expenditure report• Sector spending trends

• Selected votes1.Health2.DSD3.Basic Education4.Higher

Education5.Corrections6.Defence7.Justice8.Police

9.CoGTA10.Communicatio

ns11.Energy12.Transport13.DHS14.Water Affairs15.DPE16.Agriculture

17.EDD18.Environment19.DMR20.RDLR21.DST22.Tourism23.DTI

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Introductions

• Mark Blecher (Health and Social Development CD)• Rendani Randela (Justice and Protection Services CD)• Devan Naidoo (Economic Services CD)• Petrus Matji (Urban Development and Infrastructure CD)• Robert Clifton (Technical Assistance Unit CD)

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Spending overview - Report structure • Cover spending by national government department for the first quarter 2010-

11 financial year, which ended 30 June 2010• Produced in terms of Section 32 of the PFMA• Information sourced from Section 40 (4) PFMA reports submitted to the

National Treasury 15 days after the end of each month• Contains:

– 77 page Excel spreadsheet including summary per vote spending per economic classification and detailed vote spending per Appropriation Act items

– 102 page vote spending trends analysis detailing per vote• Total spending trends• Economic classification trends• Programme trends• Other relevant spending issues

• For consideration: Develop a standing agreement with the committee in terms of form, content and timeframes for the report

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Spending overview – Excel report structure

R'000 R'000 R'000 R'000 %

4 5,719,584 - 5,719,584 942,425 16.48

Current Payments 3,992,428 - 3,992,428 633,647 15.87Compensation of Employees 1,896,203 - 1,896,203 442,468 23.33Goods and Services 2,096,225 - 2,096,225 191,179 9.12Other - - - -

Transfers and Subsidies 1,587,837 - 1,587,837 291,025 18.33Payments for Capital Assets 139,319 - 139,319 17,753 12.74Payments for Financial Assets - - - -

ADMINISTRATION 1,470,926 - 1,470,926 142,045 9.66Current Payments 1,371,767 - 1,371,767 130,947 9.55

Compensation of Employees 289,966 - 289,966 62,382 21.51Goods and Services 1,081,801 - 1,081,801 68,565 6.34Other - - - -

Transfers and Subsidies 1,338 - 1,338 195 14.57Payments for Capital Assets 97,821 - 97,821 10,903 11.15Payments for Financial Assets - - - -

SERVICES TO CITIZENS 1,446,011 - 1,446,011 307,838 21.29Current Payments 1,401,247 - 1,401,247 300,159 21.42

Compensation of Employees 845,431 - 845,431 255,247 30.19Goods and Services 555,816 - 555,816 44,912 8.08Other - - - -

Transfers and Subsidies 3,266 - 3,266 850 26.03Payments for Capital Assets 41,498 - 41,498 6,829 16.46Payments for Financial Assets - - - -

IMMIGRATION SERVICES 1,219,694 - 1,219,694 198,430 16.27Current Payments 1,219,414 - 1,219,414 202,403 16.60

Compensation of Employees 760,806 - 760,806 124,701 16.39Goods and Services 458,608 - 458,608 77,702 16.94Other - - - -

Transfers and Subsidies 280 - 280 (3,994) -1426.43Payments for Capital Assets - - - 21

Payments for Financial Assets - - - -

TRANSFERS TO AGENCIES 1,582,953 - 1,582,953 294,112 18.58Current Payments - - - 138

Compensation of Employees - - - 138 Goods and Services - - - - Other - - - -

Transfers and Subsidies 1,582,953 - 1,582,953 293,974 18.57Of which - - - -

Departmental agencies and accounts - - - -

– Film and Publication Board: Contribution to operations 55,217 - 55,217 13,803 25.00– Government Printing Works: Contribution to operations 97,228 - 97,228 97,228 100.00– Electoral Commission: Contribution to operations 1,430,508 - 1,430,508 182,943 12.79Payments for Capital Assets - - - -

Payments for Financial Assets - - - -

Total expenditure by vote 5,719,584 - 5,719,584 942,425 16.48

Main appropriationExpenditure per Appropriation Act, 2010

Percent of budget

expended

HOME AFFAIRS

Shifts and Virements

Available budget

Year-to-date actual

expenditure

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First quarter provincial budget and expenditure report

• For the committee’s information, the National Treasury’s quarterly provincial budgets and expenditure report is included in the packet

• The report reviews aggregate spending trends and between provinces:• Per major sector (Education, Health, Social Development) • Per major economic classification (personnel and capital)• Conditional grants• Provincial revenues (equitable share and own revenues)

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Spending overview - Aggregate (‘000)

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Spending overview - Current payments (‘000)

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Central Government & Administration Sector

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Sector spending trends - Central Government & Administration ('000)

10

Financial & Administrative Services Sector

11

Sector spending trends – Financial & Administrative services ('000)

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Social Services Sector

13

Sector spending trends - Social Services ('000)

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Selected votes – Health

• Total expenditure increased from R4.477 billion in June 2009 to R5.265 billion in June 2010 at an annual rate of 17.6 per cent.

• The largest expenditure increase is 43.6 per cent in Programme 2, from R1.1 billion by June 2009 to R1.7billion in June 2010, due to the step up for HIV/AIDS funding.

• Spending in Programme 6 decreased by 18.4 per cent from R16 million in June 2009 to R12 million in June 2010.This is due to the large expenditure that happened abroad and claimed via Foreign Affairs account which is only received in 5 months after expenditure incurred.

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2010/11

• There is an increase to Payments for Capital due to the finalisation of the move to the new CIVITAS building. The movement was delayed , but finally happened between June and July 2010.

• Goods and Services increased by 32.3 per cent, while Personnel spending decreased to 22.4% in June 2010 from 25.7 per cent in June 2009.This is due to the reason that Improvement of Conditions of Services (salary increase) only started later ( in July) than planned due to the current wage negotiations.


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• HIV /AIDS Grant spending increased by 53.1 per cent from R940 million in June 2009 to R1.4 billion in June 2010 (R1.1 billion spent in provinces). The step up in HIV/AIDS funding is due to the new policy announcement by the President during the World AIDS day.

• Hospital Revitalisation spending decreased by 5.6 per cent from R1.048 billion in June 2009 to R990 million in June 2010 (R836 million spent in provinces – 20.8%). Slower than expected spending occurred in:- Free State – 7.6%- Kwa-Zulu – 10.5%- Limpopo – 11.5%


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• HIV/AIDS– As announced by President Zuma on World AIDS Day in December

2009, started on 1 April 2010 to provide Antiretroviral Treatment to pregnant women at CD4 count of 350 or less, to enhance maternal survival. ART is also being provided to people co-infected with TB and HIV at a CD4 count of 350 or less

– The new policy resulted to a step up in the HIV/AIDS funding and expenditure

– Consideration needs to be given to the problems of the vertical programme and whether the time has come to integrate into PES


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• Health Infrastructure / Hospital Revitalisaion

– Slow spending on the programme in 2009/10 looks likely to continue this year

– The department is putting in place various strategies to accelerate infrastructure delivery.

– These include:

• Employment of additional engineers

• Technical support including IDIP, DBSA

• Strengthening national and provincial programme and project management

• PPPs

• 5 tertiary hospital projects

– Would be useful to ensure increased oversight of slow spending in this programme


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• Expenditure increased from R18.619 billion in 2009/10 to R26.057 billion in 2010/11 at a rate of 39.9 per cent . There was a decrease of 18.4 per cent in Programme 1 from R43.558 million in 2009/10 to R35.524 million in 2010/11 because the lease payment of accommodation was done in the second quarter.

• Programme 2 grew at 40.6 per cent mainly because of the payments of Appeals Backlog cases and the higher number of beneficiaries that applied for social grants due to amendments in the means test.

• Programme 3 grew at 26.3 per cent mainly because of the first payment for NSFAS was made for the social workers bursaries.

• Programme 4 decreased by 59.8 per cent due to a decrease in the allocation to the National Development Agency, and programme 5 decreased by 22.1 per cent because the Appeals Unit was shifted to programme 2.

Selected votes – Social Development

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• There was an increase of 40.2 per cent in compensation of employees in 2009/10 to 2010/11 due to the filling of vacant posts and the higher inflation adjusted annual increases as expected.

• Goods and Services decreased by 27.8 per cent mainly because of invoices that were received late and paid in the second quarter. Transfers and subsidies grew at 40.1 per cent due to the payments of Appeals Backlog cases and the higher numbers of beneficiaries that applied for social grants due to amendments in the means test. Payment for capital assets decreased because of stricter measures taken by department.

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• A major policy issue that is currently under reviewing by the South African Social Security Agency (SASSA) is that a large amount of the Agency’s administration funds are spent on cash payment contractors.

• SASSA is reviewing these cash payments contracts in order to negotiate cheaper prices which will resulted in a significant savings for the department and for government as a whole. About 80 per cent of social grant recipients are currently paid via cash payment contractors at a significant cost to government.

• SASSA is also looking at ways to move beneficiaries to bank accounts which will also resulted in a significant savings because the bank charges are much less than the cash payment contractor fees.


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• Spent R1.6 billion or 27 per cent of the total available budget of R6.1 billion by the end of the first quarter.

• Spending broadly in line with expectations, except in programme 2• Programme 2 spent R62.8 million or 4.64 per cent of the R1.4 billion

appropriation in this programme. The slower than expected spending is mainly in goods and services where 3 per cent of allocated funds have been spent thus far . This is mainly due to:– delays in the submission of claims for payments related to Kha-Ri-

Gude (the adult mass literacy campaign), which will be processed in Q2; and

– delays in the roll out of the Workbooks project

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Selected votes – Basic Education

• DBE was allocated R750 million for the provision of workbooks to Grade R – 7 learners in the 2011 academic year

• None of these funds spent by 30 June, but the process is now underway

• DBE is employing curriculum and materials development experts on contract to develop, translate and quality assure the workbooks in-house rather than tender for outside consultants

• Project split into a Workbook A (for 1st and 2nd terms in 2011) and Workbook B (for 3rd and 4th terms)

• Planned piloting of workbooks for alternate grades by Sept/Oct – to be printed and distributed thereafter (the major expenditure)

• Department confident that Workbook A will be at schools and ready for use by learners at the start of the 2011 school year in January.

• Printing and distribution of Book B thereafter

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Selected votes – Basic Education

• Spent R10.6 billion or 45% of the total available budget of R23.7 billion

• Spending broadly in line with expectation, with some slow spending• Spent R58.2 billion of 15% of it current payments allocation, which is

mainly due to:– Delays in the QCTO project– Delays in carrying-out he forensic audit of Indlela– Delays in the submission of accommodation and transport claims

• Transfers: Spent R12.2 billion of the projected R13.1 billion, which is 7% or R881 million less than anticipated mainly because approved claims for capital grants were less than expected. (i.e., Universities submit business plans for capital projects, and if approved are paid according to projections and progress reports)

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Selected votes – Higher Education

Justice, Crime Prevention & Security Sector

26

Sector spending trends - Justice, Crime Prevention and Security ('000)

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28

Selected votes – Correctional Services (‘000)

Defence and Military Veterans

29

Selected votes – DoD & MV (‘000)

30

Selected votes – Justice & CD (‘000)

31

Selected votes – Police (‘000)

Economic Services Sector

32

Sector spending trends - Economic Services ('000)

33

Selected votes – Public Enterprises

• R351 million total budget for 2010/11– R37 million transfers and subsidies– R175 million current payments – 139 million financial assets– R600 thousand capital assets

• Actual expenditure to end of July 2010: R184 million (53%)– R45 million (26%) current– R222 thousand (37%) capital assets– R139 million (100%) financial assets - transferred to Broadband Infraco – The only transfer will be to Alexkor in September 2010

• R167 million (47%) unspent • Spending trends: 2008/09 – 98.6% ; 2009/10 - 99.8%

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Selected votes – DAFF

• 2010/11 budget R3.6 billion : Q1 expenditure R832m (23%) • Shifts – Q1 - R28m shifted to various items in programmes• Transfers – Allocation R1.8 b: Q1 amount transferred R497m

(R28%)• Spending trends 08/09 - 97% ; 09/10 – 98%

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1

Selected votes – Economic Development• R419 million total budget for 2010/11

– R319 million transfers and subsidies– R95 million current– R5 million capital assets

• Q1 spending = R99 million (24%)– R93 million (29%) transfers and subsidies– R6 million (6%) current– R1 million (20%) capital assets• R10 million under spent (9% of R109 million in approved drawings for

Q1)– Low spending is due to the large number of vacancies in the department.

Few of the critical positions have been filled, the department is in the process of filling posts.

• Actual expenditure until end of July: R165 million (39%)– R9 million (9 %) current– R1 million (20%) capital assets– R156 million (49%) transfers and subsidies

• Under spent by R7 million (4 % of approved R172 million)

Selected votes – Environmental Affairs

• R2.6 billion total budget for 2010/11– R1.2 billion transfers and subsidies– R910 million current payments– R473 million capital assets

• R541 million (21%) was spent:– R802 million (26%) transfers and subsidies– R66 million (25%) current payments– R0.5 million (0.7%) capital Assets

• Slow spending – Due to late payment to for the SA Aghulas Polar Vessel

• Transfers– R17 million was requested– R1 million approved– R16 million recommended but not approved yet

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Selected votes – DMR

• 2010/11 Budget of R1 billion: Q1 expenditure R249m (24%)

• Shifts – Q 1: R22m• Transfers – Allocation R409m: Q1 amount transferred

R108m (26%)• Spending trends: 08/09 - 99%; 09/10 - 97%

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Selected Votes – Rural Development and Land Reform

• 2010/11 budget R7 billion: Expenditure R852 (13%)• Shifts – R5 million shifted to various items in programmes• R2 billion vired from Land Reform to Restitution for the

settlement of Restitution court cases. The department’s properties has been attached due to non payment of claims, hence a need for this virement

• Transfers – Allocation R4.9 billion: amount transferred R601 million (13%)

• Spending trends: 2007/08 - 99% 2008/09 - 99%; 2009/10 - 92%

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Selected votes – DST

• R4.6 billion total budget for 2010/11– R4.3 billion transfers and subsidies– R362 million current payments– R4.1 million capital assets

• R869.1 million (18.8%) was spent:– R802.2 million (18.9%) transfers and subsidies– R66.4 million (18.3%) current payments– R0.5 million (12.0%) capital Assets

• Slow spending – Delays in implementation of projects viz. Biotechnology Strategy,

SANERI, HIV/AIDS project, Innovation projects and Innovation fund– Delays in finalisation of Memorandum of Agreements

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Selected votes – Tourism

• R1.2 billion total budget for 2010/11– R196.1 million current payments– R953.3 million transfers and subsidies– R2.4 million capital assets

• R404.5 million (35.1%) was spent:– R 37.1 million (18.9%) current payments– R367.3 million (38.5%) transfers and subsidies– R0.07 million (2.9%) capital Assets

• Fast spending – 60% (R279,3 million) of the International Marketing Grant was

transferred to South African Tourism (SAT) in April 2010 and the remaining 40% (R186,2 million) will be transferred in September 2010

– Performance bonuses for 2009/10 were paid in April 2010; this was projected in July 2010

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1

Selected votes – DTI

• R6.1 billion total budget – R1.1 billion (19%) - current payments– R5 billion (81%) - transfers and subsidies– R15 million (.2%) - capital assets

• R1 billion spent (16%) - 1st quarter– R197 million (3%) - current payments; R820 million (13%);

transfers and subsidies; R1 million (.02%) - capital assets• Underspending compared to approved drawings (30%) - 1st quarter

– Mainly related to underspending under various incentive schemes: Business Process Outsourcing, Clothing and Textiles and the Automotive Production and Development Programme. Increase in claims is anticipated during latter part of financial year

• Expenditure to 31 July 2010– R1.6 billion spent (26%): R283 million (5%) - current payments;

R1.3 billion (21%) - transfers and subsidies; R2 million (.04%) - capital assets

Infrastructure & Urban Development Sector

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Sector spending trends – Infrastructure & Urban Development ('000)

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Selected votes – Cooperative Governance & Traditional Affairs

At the end of the 1st Quarter, CoGTA’s actual expenditure was R1,7 billion, as compared to projected expenditure of R275 million This faster than expected trend is due to Local

Government equitable share transfer that were transferred to the municipalities earlier than normal. According to CoGTA, the transfer was informed by a strategic decision taken to assist selected municipalities that were financial stretched

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Programme 2009/10 2010/11

Previous Structure Allocation Actual % spending

Current Structure Allocation Actual % spending

y/y growth

R'000 R'000 R'000 R'000 R'000

Administration 163,543 42,823 26.2% Administration 188,131 34,031 18.1% 25.8%

Governance, Policy and Research 49,035 9,845 20.1%

Policy, Research and Knowledge Management Support 50,076 5,325 10.6%

Urban and Rural Development 12,909 3,257 25.2%

Governance and Intergovernmental Relations 43,570,837 1,679,519 3.9%

Systems and Capacity Building 106,265 20,541 19.3%

National Disaster Management Centre 41,563 5,758 13.9%

Free Basic Services and Infrastructure 41,942 10,414 24.8% Traditional Affairs 70,863 13,356 18%

Provincial and Local Government Transfers 35,131,362 2,152,164 6.1%

Fiscal Transfers 101,983 19,107 19.4% 70,863 13,356 18.9%

TOTAL 35,607,039 2,258,151 18.7% 43,921,470 1,737,989 4.0% 29.9%


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Economic classification 2009/10

2010/11

Previous Structure Allocation Actual % spending

Current Structure Allocation Actual % spending

y/y growth

R'000 R'000 R'000 R'000

Current Payments 382,407

89,900 23.50%

Compensation of employees

241,929

41,591 23.98% 116.15%

Transfer and subsidies 35,216,431

2,167,550 6.20%

Goods and services

377,776

106,991 17.19%

Payments for capital assets

8,201

701 8.50%

Transfer and subsidies

43,288,456

1,589,064 3.67%

Payments for capital assets

13,309

343 2.58%

TOTAL 35,607,039

2,258,151 6.30%

43,921,470

1,737,989 3.96% 29.93%

Expenditure decreased from R2.2 billion in 20091/0 to R1.7 billion in 2010/11. This was due to structural changes that led to Rural Development function being moved from CoGTA to Department of Rural Development and Land Reform

The projected expenditure in the first quarter of 2010/1 was R551.1 million, however, actual expenditure was R208.5 million. This was about 37.83% of the projection. The primary reason for under-expenditure was attributed to transfers that were not made to public entities. Public entities such as Telkom and Sentech did not submit drawdown requests.

Selected votes – Communications

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2010/11 2009/10

Economic classification Allocation Actual % spending Allocation Actual % spending y/y growth

R’000 R’000 R’000 R’000

Compensation of Employees 160414 33762 21.0% 147428 29513 20.0% 14.4%

Goods and services 322762 26711 8.3% 235940 40129 17.0% -33.4%

Transfer and subsidies 1626704 147508 9.1% 2077679 197084 9.5% -25.2%

Payments for capital assets 4119 510 12.4% 9447 4958 52.5% -89.7%

Financial assets 0 2

Total 2113999 208493 0.507721 2470494 271684 11.0% -23.3%

Selected votes – Energy

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• Note: comparison of the department’s current expenditure to the expenditure of the 2009/10 financial year has not be done because the analysis might give a distorted picture of the department’s performance.

• For the 1st quarter, the department’s total projected expenditure amounted to R778.13 million.

• However, for the period under review, the department has spent R684.51 million which is 87.96 per cent of the Department’s projected quarterly expenditure, and this translates to slower spending than expected of R93.62 million or 13.68%

Main Appropriation

Shifts and Virements

Available Budget

Year-to-date actual expenditure

Percent of budget expended

R'000 R'000 R'000 R'000 %

202,123 - 202,123 42,976 21.26

132,994 - 132,994 31,641 23.79

69,129 - 69,129 11,335 16.40

5,328,667 - 5,328,667 641,426 12.04

4,600 - 4,600 104 2.26

5,535,390 - 5,535,390 684,506 12.37

Payment for Capital Assets

Total

Economic classification

Current payments

Compensation of Employees

Goods and Services

Transfers and Subsidies

Selected votes – Human Settlements

R thousand Allocation Projected ActualActual as % allocation Allocation Projected Actual

Actual as % allocation

Year-on-Year growth

Administration 176 175 37 168 25 201 14.3% 198 540 40 578 22 983 11.6% 10%Housing policy, research and monitoring 45 907 10 033 4 763 10.4% 58 000 12 447 8 272 14.3% -42%Housing planning and delivery support 206 831 39 895 23 742 11.5% 138 486 28 460 20 392 14.7% 16%Housing development finance 15 598 126 3 695 906 3 571 064 22.9% 13 011 341 4 037 800 3 991 387 30.7% -11%Strategic relations and governance 174 442 35 220 12 092 6.9% 182 206 35 850 38 089 20.9% -68%Total 16 201 481 3 818 222 3 636 862 22.4% 13 588 573 4 155 135 4 081 123 30.0% -11%

2009/102010/11

• Housing Policy, Research and Monitoring – Expenditure is slower than expected due to the delay in the issuing of tenders related to evaluation study on the upgrading of informal settlements and the performance of rental housing.

• Housing Planning and Delivery Support – The slow spending relates to the sanitation programme, a function that has been transferred to the department in 2010/11. The programme has been experiencing delays in contracting service providers to provide on-site training to rural households on the maintenance of the infrastructure before the infrastructure is installed.

• Strategic Relations and Governance – Expenditure is slower than expected as a result of invoices not received from SITA for the maintenance of the Housing Subsidy System.

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• Slower than expected expenditure on current payments relate to:– Signing the contract with the Special Investigations Unit, – Issuing tenders for impact and evaluation studies on rental housing, and informal

settlement upgrading– Invoices not received from SITA for the maintenance of the Housing Subsidy System– Slow implementation support on the rural sanitation programme.

• Slower than expected expenditure on payments for capital assets relates to an indirect grant to municipalities, the Rural Households Infrastructure Grant for on site sanitation services to rural households.

• The slower than expected expenditure on transfers to public entities is as a result of the delay in the finalisation of the business plans of the Housing Development Agency and the Rural Housing Loan Fund.

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R thousand Allocation Projected ActualActual as % allocation Allocation Projected Actual

Actual as % allocation

Year-on-Year growth

Current payments 599 465 125 945 71 907 12.0% 620 021 125 347 95 690 15.4% -25%Current transfers 282 194 122 736 2 003 0.7% 364 875 133 405 16 539 4.5% -88%Capital transfers 15 160 563 3 561 723 3 561 725 23.5% 12 592 276 3 968 418 3 968 418 31.5% -10%Payments for capital assets 159 259 7 818 1 041 0.7% 11 401 3 273 476 4.2% 119%Payments for financial assets - - 186 - - - - - 0%

16 201 481 3 818 222 3 636 862 22.4% 13 588 573 4 230 443 4 081 123 30.0% -11%

2010/11 2009/10


• Human Settlements Development Grant finances 13 housing programmes– Limpopo and Northern Cape spending faster than expected, with slowest

spenders including Free-State, North-West and KwaZulu-Natal• Housing Disaster Relief Grant to support flood damage in KwaZulu-Natal• Rural Households Infrastructure Grant - Allocation in kind to municipalities

– New programme in department; policy maker to implementer

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R thousandHuman Settlements Development Grant 15 026 763 3 528 274 23.5% 2 361 080 66.9% 15.7%Housing Disaster Relief Grant 133 800 33 450 25.0% 10 308 30.8% 7.7%

R thousandAllocation Expenditure

Spending as % allocation

Rural Households Infrastructure Grant 350 000 0 0%

AllocationTransferred

by DHS

Transferred as % total allocation

Provincial actual

expenditure

Spending as % transfer

Spending as % allocation

Selected votes – Transport

• Higher than projected expenditure was partly due to payment schedules for the PTIS which were increased to cover short term bridge funding agreements made by the City of Johannesburg and City of Cape Town in terms of MFMA Section 45 for BRT systems

• Higher than projected expenditure was partly due to capital transfers to PRASA being increased to reduce to loan for inter-city busses.

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Selected votes – Water Affairs

The Department has been allocated an appropriation of R7.997 billion for the current financial year. Projected expenditure was R1.999 billion and the Department expended R1.275 billion (15.94%). This represents an slower spending of R724.2 million or (9.06 %) for the 1st quarter of this financial year. Some of the primary reasons: Outstanding invoices for services rendered in the previous financial

year (e.g. fleet management, information technology, construction works (De Hoop Dam) and consultancy). The delay was due to the BAS structure that was not ready for implementation from April 2010.

Contractual agreement between DWA and professional services providers not being finalised

Vacant posts

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• In the financial years 2009/10 and 2010/11, the Department of Water Affairs changed programme structure. It makes it difficult to compare the two financial years. On the other hand, the Forestry and Sanitation functions were also moved out of the department. This is also confirmed by the negative year-on-year growth.

• Total expenditure decreased from R1.554 billion in June 2009 to R1.274 billion in June 2010 at an annual rate of 17 per cent as a result of the sanitation function to the Department of Human Settlements and the Forestry function to the Department of Agriculture, Forestry and Fisheries.

2010/11

2009/10

Current Programme Structure

Allocation Actual Actual as % Allocation

Previous Programme Structure


Year-on-Year Growth

R'000 R'000 % R'000 R'000 % %

Administration R 884,205 R 123,549 14.0% Administration R 795,353.00 R 120,982.00 15.2% 2.12%

Water ManagementR 364,749 R 50,858 13.9%

Water Resources Management

R 3,895,794.00R 848,258.00 21.8%

National Water Resources Infrastructure R 2,241,418 R 507,795 22.7%

Water Services R 2,717,039.00

R 452,020.00 16.6%

Regional Management R 4,239,013 R 575,090 13.6% Forestry R 485,641.00 R 123,717.00 25.5%

Water Sector Regulation R 177,207 R 17,644 10.0%

Total R 7,906,592 R 1,274,936 16.1% R 7,893,827.00 R 1,544,977.00 19.6% -17.48%


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2010/11

2009/10

Economic Classification


Allocation Actual Expenditure

% Expenditure Growth (YoY)

R'000 R'000 % R'000 R'000 % %

Compensation of employees R 1,163,836 R 240,969 20.7% R 1,327,863 R 287,816 21.7% -16%

Goods and Services R 2,468,727 R 282,422 11.4% R 2,113,255 R 391,848 18.5% -28%

Transfers and subsidies R 3,238,687 R 742,035 22.9% R 1,989,201 R 529,009 26.6% 40%

Payments for capital assets R 1,125,342 R 9,510 0.8% R 1,114,223 -R 27,379 -2.5% -135%

Total R 7,996,592 R 1,274,936 15.9% R 6,544,542 R 1,181,294 18.1% 8%

• In the financial years 2009/10 and 2010/11, the negative growth in compensation of employees, goods and services is due to the functions of Forestry and Sanitation that were moved out of the department

• Negative growth of 135% for capital payments in the 1st quarter was due to the Department’s incorrect allocation of the expenditure for building and other fixed structures in the Department’s Regional Offices of North West and Mpumalanga Provinces. This was subsequently corrected.


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2010/11 2009/10

Economic Classification

Allocation Actual Expenditure

Actual as % Allocation

Allocation

Actual Expenditure

% Expenditure Growth (YoY)

R'000 R'000 % R'000 R'000 % %

Water services operating subsidy R 661,704.00 R 213,508.00 32.3% 978,579 182,364 18.6% 17.08%

Regional Bulk Infrastructure R 833,650.00 R 85,275.00 10.2% 611,500 45,245 7.4% 88.47%

Total R 1,495,354.00 R 298,783.00 20.0% 1,590,079 227,609 14.3% 31.27%

• Water Services Operating Subsidy Grant spending increased by 17.08% per cent from R182.364 million in June 2009 to R213.508 million in June 2010.This increase could be attributed to expenditure on the refurbishment of water schemes prior to transfer to municipalities

• Regional Bulk Infrastructure Grant spending increased from R45.245 million in June 2009 to R85.275 million in June 2010 as the Department has commenced with the implementation of capital projects.

Thank you

Q&A

58

first quarter 2010-11 national vote spending trends review | 25 august 2010

Documents

spending overview aggregate

detailed vote spending

relevant spending issues

social services sector

major sector education

large expenditure

quarter provincial budget

largest expenditure