Public hearing on conditional grants and capital expenditure: 3rd quarter

1
Public hearing on conditional grants and capital
expenditure 3rd quarter

• Presentation to Select Committee on Finance
• Northern Capes Department of Agriculture and
  Land Reform
• 19 February 2007

2
Overview

• Equitable share versus Conditional Grant
  allocation
• 3rd quarter expenditure on conditional grants
• Conditional grant spending vs. cash allocation
• Conditional Grant expenditure Jan 2007
• Expenditure trends per month
• Situation analysis on conditional grants
• Monitoring and Evaluation
• Challenges for conditional grants
• Plans to improve delivery on conditional grants

3
Trends equitable share versus conditional grant
allocation
SUMMARY COMPARISON BASED ON ORIGINAL ALLOCATIONS SUMMARY COMPARISON BASED ON ORIGINAL ALLOCATIONS SUMMARY COMPARISON BASED ON ORIGINAL ALLOCATIONS SUMMARY COMPARISON BASED ON ORIGINAL ALLOCATIONS SUMMARY COMPARISON BASED ON ORIGINAL ALLOCATIONS
  05/06 06/07 Increase increase
Equitable Share 97,002 103,664 6,662 7
Conditional Grants 18,320 24,782 6,462 35
  115,322 128,446 13,124 11
4
3rd quarter expenditure Conditional Grants
Conditional Grant 2006/2007 allocation 2006/2007 allocation 2006/2007 allocation
  Budget Actual
CASP 22,496 12,460 55
LAND CARE 8,023 6,019 75
PIG 4,808 2,632 55
TOTAL 35,327 21,111 60
5
Conditional Grant spending versus cash allocation
Conditional Grant 3rd quarter allocation 3rd quarter allocation 3rd quarter allocation
  Cash received Actual spent
CASP 12,622 12,460 99
LAND CARE 4,629 6,019 130
PIG   1,611 2,632   163
TOTAL 18,862 21,111 112
6
End January 2007 expenditure Conditional Grants
Conditional Grant 2006/2007 allocation 2006/2007 allocation 2006/2007 allocation
  Budget Actual
CASP 22,496 15,559 69
LAND CARE 8,023 6,626 83
PIG 4808 2797 58
TOTAL 35,327 24,982 71
7
Expenditure trends per month
Conditional Grant April May June July Aug Sep Oct Nov Dec Jan Total
                       
CASP 820 1826 3202 809 773 1660 737 363 2269 3100 15559
LAND CARE 127 323 810 803 44 536 958 1042 1376 607 6626
PIG 0 0 63 11 184 887 37 202 1248 165 2797
                       
TOTAL 947 2,150 4,075 1,624 1,001 3,084 1,732 1,607 4,893 3,872 24,982
8
Situation Analysis - CASP

• Situation analysis
• 28 projects implemented during 2005/6 with a
  budget of R 13,148m
• Struggled to complete all projects and thus
  requested R6,719 m rollover
• Only 12 new projects approved for 2006/7 with
  budget of R15,777 m
• Officials concentrated on completing projects
  remaining from 2005/6 and implementing new
  projects for 2006/7
• Expenditure 3rd quarter
• The total transfer received from National to
  Province by the third quarter is R 12,622 million
  and
• R12,460m actual expenditure as at end December
  06.
• 99 of the transfer received was spent

9
Situation Analysis Land Care

• Situation analysis
• 15 projects implemented during 2005/6 with a
  budget of R2,000 m
• Requested rollover of R1,873 m
• 15 projects approved for 2006/7 with a budget of
  R5,785 m
• Expenditure
• R 4,629 m transferred from National to Province
  by the 3rd quarter and
• R 6,019 m actual expenditure as at end Dec 06.
• 130 of transfer received was spent
• Issues requiring on-going attention
• Monitoring of the implementation phase
• Conflict management within communities/project
  beneficiaries
• All projects tenders already advertised
• Project schedule still on track

10
Situation Analysis - PIG

• Situation analysis
• 8 projects implemented during 2005/6 with a
  budget of R3,172
• R1,588 requested for roll over
• 5 projects approved for 2006/7
• Expenditure
• Transfer from National to Province by 3rd quarter
  is R1,611
• R2,632 m actual expenditure as at end December
  06.
• 163 of the transfer received was spent
• Issues requiring on-going attention
• PIG projects in tendering phase during 1st
  quarter
• Implementation only in 2nd and 3rd quarter

11
Monitoring and Evaluation

• Senior management evaluates expenditure monthly
• Project Coordinating Committee established and
  meetings held quarterly
• Assesses project proposals
• Recommends for approval
• Assesses and evaluates progress

12
Challenges for conditional grants

• Same officials have to implement new projects and
  provide after-care at the same time
• More demands by other land reform beneficiaries
  especially the more they see implementation and
  changes in the neighbouring approved projects or
  communities
• Credit facilities for BEE contractors problematic
  thus a delay in delivery of material and other
  services
• Some of the suppliers do not deliver material on
  the agreed timeframes and that delays payment
• Some of the companies experience cash flow
  problems during the course of completing a
  project

13
Plans to improve delivery on conditional grants
Conditional Grant Spent by February 15th Projection February 28th Projection March 15th Projection March 27th Total Projections
CASP 756 2,500 2,744 937 6,181
LAND CARE 267 700   430   1,130
PIG 235 889 887   1,776
           
TOTAL 1,258 4,089 4,061 937 9,087

• 2006/7 projects
• Ensure that 2006/7 projects are implemented
  according to plans
• Not to allow any roll-overs from 2006/7
• Monitor and assess implementation through

14
Plans to improve delivery on conditional grants

• Monthly review of expenditure
• Holding quarterly reviews with project leaders
• Senior managers visiting projects regularly to
  monitor progress
• 2007/8 projects
• Completed business plans for 2007/8 projects by
  end of September 2006
• Advertise tenders between Jan-March 2007
• Start implementing as of April 2007

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Trends in capital expenditure
Programmes for 2006/2007 Main AppropriationR'000 3rd quarter spendingR'000 spent
Administration 260 664 255
Sustainable Resource Management 8053 2494 31
Equitable 30 17 57
Conditional Grants 8,023 2477  31
Farmer Support and Development 28,419 12327 43
Equitable 1,115 1,406 126
Conditional Grants 27,304 10921 40
Veterinary Services 111 286 258
Technological Research and Development 190 203 107
Agricultural Economics 31 0 0.00
Total 37,064 15974 43
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Solar Power for Stock Watering
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Sub surface Drainage Installation
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Sub surface Drainage Installation
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Soil Conservation
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THANK YOU