PRESENTATION TO THE STANDING COMMITTEE ON

APPROPRIATION

DIRECTORS’ GENERAL: MR. E AFRICA PROF. MC NWAILA 01 JUNE 2011

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OUTLINE OF THE PRESENTATION• Introduction• Summary of Expenditure Estimates for 2010/11- 2011/12 Financial

Year• Request for Roll-Over of Funds from 2010/11-2011/12 Financial Year

• Overview of the Expenditure Outcome 2010/11 Financial Year

-Expenditure Outcomes Classified per Programme 2010/11 Financial Year

-Expenditure Outcome per Economic Classification 2010/11 Financial Year

• Reasons for under-expenditure• Measures to improve expenditure trends

• Overview of Implementation Plans 2011/12 Financial Year

-Financial resources per programme 2011/12 Financial Year

-Implementation of the Budget of 2011/12 Financial Year

-Implementation of the Budget 2011/12 Financial Year

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Introduction

The purpose of the presentation is to brief Standing

Committee on Appropriations on the Departmental Financial Expenditures

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Summary of Expenditure estimates

2010/11 -2011/12

R'000 R'000 TOTAL APPROPRIATION 44,573,119

EXPENDITURE 4,457,917 47,934,580 7.50%

SURPLUS 115,202 -

SPLIT OF THE SURPLUS % of relevant allocation

COMPENSATION OF EMPLOYEES 26,302 13%

GOOD AND SERVICES 11,194 3%

TRANSFERS AND SUBSIDIES 69, 696 0.20%

CAPEX 8,005 31%

-

Grand Total 115,202 0.26%

%Budget Allocation 2010/11 2011/12

REQUEST FOR ROLL-OVER OF FUNDS FROM 2010/11-2011/12 FINANCIAL YEAR

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ROLL OVER PER ECONOMIC CLASSIFICATION AMOUNT

CAPITAL ASSETS -

TRANSFERS AND SUBSIDIES 41,239

GOODS AND SERVICES 307

COMPENSATION OF EMPLOYEES 4,193

TOTAL (40% of surplus) 45,685

Expenditure Outcome Classified per programme 2010/11 FY

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1. Administration 183 322 169 539 13 783 92.5%2.Policy, Research and Knowledge Mang Support 43 168 35 433 7 735 82.1%3. Governance and Intergovernmental Relations 43 982 712 43 908 036 74 676 99.8%4. National Disaster Management Centre 289 840 283 092 6 748 97.7%5. Traditional Affairs 74 077 61 817 12 260 83.4%

Grand Total 44 573 119 44 457 917 115 202 99.7%

Underspending/ (Overspending)COGTA

Expenditure as % of Total Allocation

AENE Budget 2010

Total Expenditure (R’000)

Expenditure Outcome per Economic Classification 2010/11 FY

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Economic ClassificationCurrent expenditure 625,974 588,473 37,501 94.0%

Of which:Compensation of employees 200,603 174,301 26,302 86.9%

Goods and Services 425,371 414,172 11,199 97.4%

Transfers and subsidies 43,921,269 43,851,573 69,696 99.8%

Of which:

Provinces and municipalities 43,513,951 43,497,356 16,595 100.0%

Departmental agencies and accounts 110,713 110,713 - 100.0%Foreign governments and international organisations 489 119 370 24.3%

Non profit institutions 9,104 7,468 1,636 82.0%

Households 287,012 235,917 51,095 82.2%

Payments for capital assets 25,876 17,871 8,005 69.0%

Machinery and equipment 25,597 17,592 8,005 68.7%

Payments for financial assets 279 279 - 100.0%

Grand Total 44,573,398 44,458,196 115,202 99.7%

Underspending/ (Overspending)COGTA

Expenditure as % of Total Allocation

ENE Budget 2010/11

Total Expenditure (R’000)

Reasons for under expenditure

Posts not filled on time Protects implemented lateCurrent expenditure related to employees Protects not completed during the year:

Community Work ProgrammeDelivery delays on ordered furniture and

equipments

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Measures to improve expenditure trends

COMPENSATION OF EMPLOYEES92% (138 of 150) SMS posts have been filled, and 12 posts will

be filled by the end of June 2011 which will normalise the expenditure

trends.

PROJECT MANAGEMENT APPROACHThe project management approach has been enforced at the

level of thebudget thereby linking the budget to performance management.

All approved projects have been allocated budgets linked to the

various milestones, this will ensure that expenditure movement is in

accordance with the projections.

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PROCUREMENT PLAN

A procurement plan has been developed linked to the project management

approach, the timeframes for projects synchronised with the procurement

requirements to ensure that the service providers are in place when required

and department can focus on the implementation phase.

MONITORING AND EVALUATION

The Department has put monitoring measures of evaluating the expenditure

trends on monthly basis to ensure that programs spend according to their monthly

projections, this is linked to the monthly progress reporting on projects.

Provincial Support Technical Unit (PSTU) is in place to assist in protect monitoring

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Measures to improve expenditure trends cont..

Financial Resources per programme 2011/12

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PROGRAMME NAME: TotalCompensation of employees

Goods and Services

Capital Assets

Transfers & Susidiaries

Administration 212,569 90,885 117,898 3,686 100Policy, Research & Knowledge Management 46,006 20,501 18,545 6,960 0Governance & Intergovernmental Relations 34,213,870 20,089 11,748 0 34,182,033National Disaster Management Centre 821,172 18,473 24,555 3,144 775,000Prov & Municipal Government System 248,316 19,362 9,500 34 219,420Infrastructure and Economic Development 12,307,878 25,590 445,006 5,600 11,831,682Department of Traditional Affairs 83,769 38,561 22,703 355 22,150

2011 MTEF Allocation 47,933,580 233,461 649,955 19,779 47,030,385

Implementation of the Budget 2011/12 Financial Year

Compensation of Employees:

The departments will spend R233 million on salaries for 2011/12 FY. Good and Services:

An amount of R649 million will be spent on goods and services while R243 million is ear marked for Community Work Programme (CWP) and R192 million is allocated for Special Purpose Vehicle (SPV) therefore R214 million is for operational budget to implement some of the following projects:

Ensuring that the developed municipal turnaround strategies are implemented and that there is consistent monitoring of progress in this regard.

Addressing the municipal financial and administration problems to achieve 100% unqualified audit opinions by 2014.

Strengthening the Minister’s regulatory powers. Strengthening the ward committees capacity after the local government

elections for 2011 The finalization of Green Paper on Cooperative Governance Facilitation of local participatory governance and Improving the integrated development plan across the three spheres of

government

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Good and Services:Department Traditional affairs will focus on finalizing policies on traditional cultural

practices such as initiation schools and “ukuthwala” with a view to regulate and

development of the assessment instrument for the evaluation of the state and governance

in the areas of Traditional Affairs in all the affected Provinces.

Payments for Capital Assets:The department allocated R19.7 million on capital assets R5.6 million is earmarked

for

Community Work Program (CWP) while the rest of R14.1 million will be spent on

upgrading information communication technology infrastructure and on software

licenses used within the department. Other funds will be used for office furniture on

newly appointed staff.

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Implementation of the Budget 2011/12 Financial Year continue…

Transfers and Subsidies: The department is responsible for managing and transferring the

Municipal Infrastructure Grant (MIG), Municipal Systems Improvement Grant (MSIG) and Equitable Share to municipalities, support will be provided to municipalities on the

implementation of MIG and MSIG projects.

The allocation for disaster relief for 2011/12 amounts to R314 million, this amount is earmarked to put systems in place to provide immediate relief for disaster.

As part of department job creation initiative, the annual work opportunities target is 63 720 participants in historically marginalised communities through Community Work Programmes (CWP) and Professionals will be appointed to provide technical support to low capacity and weak municipalities from Special Purpose Vehicle (SPV) to enhance infrastructure delivery.

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Implementation of the Budget 2011/12 Financial Year continue

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THANK YOU