PRESENTATION TO THE SELECT COMMITTEE ON FINANCE

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PRESENTATION TO THE SELECT COMMITTEE ON FINANCE

• GAUTENG
• DEPARTMENT OF SOCIAL DEVELOPMENT

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TABLE OF CONTETS

• Summary of Audited Expenditure and the MTEF
  Allocation per Conditional Grant
• Prior Years Spending VS Allocation per Grant Type
• Current Spending on Conditional Grants as at
  November 2005
• Allocation for Capital Expenditure
• Conclusion

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SUMMARY OF THE ALLOCATION
2001/02 AUDITED ACTUAL EXPENDITURE R 000 2002/03 AUDITED ACTUAL EXPENDITURE R 000 2003/04 AUDITED ACTUAL EXPENDITURE R 000 2004/05 AUDITED ACTUAL EXPENDITURE R 000 2005/06 MTEF R 000 2006/07 MTEF R 000 2007/08 MTEF R 000
1. Social Assistance Grants 6,454,145 7,221,414 7,838,460
2. Social Assistance Grants (Administration) 350,000 375,514 391,923
3. Child Support Extension 112,873 382,663
4. Social Grant Arrear 93,196 33,382
5. Financial Management Social Security System 1,692 1,258
6. HIV/AIDS 1,000 6,983 9,823 10,315 20,341 20,409 20,988
7. Woman Flagship 167
8. Integrated Social Development Services 4,061 18,380 27,904 29,578 31,057
Total 2,589 101,437 160,139 411,358 6,852,390 7,646,915 8,282,428
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SPENDING VS ALLOCATION

• SOCIAL ASSISTANCE GRANTS
• The Provision for the Administration and Payment
  of Grant has prior to the beginning of 2005/06
  formed part of the baseline allocation of the
  Department
• As a result of the establishment of Social
  Security Agency the allocation mentioned above
  was provided in a form of Conditional Grants with
  effect from the 1st April 2005
• The Conditional Grant was made for both the
  Administration of the Social Security Grants and
  the Payment of the Grants
• The Department has in recent past been
  overspending its total budget as a result of the
  high intake of beneficiaries of qualified for
  Social Security Grants

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PRIOR YEARS SPENDING VS ALLOCATION

• The total overspending in Programme 2 Social
  Assistance Grants has been as follows
• 2004/05 R 55 193 000
• 2003/04 R 242 776 000
• 2002/03 R 105 531 000
• 2001/02 R 107 378 000
• There was however a noticeable decrease in the
  amount of overspending in 2004/05 as a result of
  additional R 100m that was received from
  Provincial Treasury and a further R 500m received
  from National Department during the adjustment
  period. There has been furthermore dedicated
  efforts to clean the Social Security System of
  persons who do not qualify for the Grants
• The was furthermore curtailment in expenditure on
  the Grants as a result of the effects of the
  Indemnity Campaign that was announced by the
  Minister for Social Development. To date 7000
  cases of people who did not qualify for the
  Grants have been cancelled in Gauteng.
• The Gauteng Provincial Department further
  commissioned a Consortium of Doctors and
  Occupational Therapist on a contract basis to
  review disability Grants.
• The latest expenditure Reports indicates that in
  the 2005/06 financial year there is currently a
  projected saving of over R 200m in Programme 2
  which can be attributed to the efforts as
  indicated above

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PRIOR YEARS SPENDING VS
ALLOCATION

• b) Social Grants Arrear (Regulation 11)
• This particular Grant Type was last made
  available to the Gauteng Department of Social
  Development in the 2003/04 financial year.
• It was made available as a result of changes in
  Legislation which required that beneficiaries of
  grants be paid as such from the date of
  application of the grant and not from the date of
  approval. Those that had previously been paid
  from the date of approval had to be provided with
  the backdated payments.
• Child Support Extension
• This Conditional Grant has been made available in
  order to accommodate the extension of Children
  who qualify for Child Support Grant to 9yrs in
  2003/04 and 11yrs in 2004/05 financial years
• CSG extension for qualifying children to 14 yrs
  currently forms part of Social Assistance Grant
  Conditional Grant.

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PRIOR YEARS SPENDING VS ALLOCATION

• c) Financial Management and Social Security
  System
• The particular Conditional Grant was made
  available to improve the Financial Management
  System and in particular the appointment of the
  Chief Financial Officer in order to comply with
  reforms as was required in term of the Public
  Finance Management Act
• It was last made available in the 2002/03
  financial year and since then the provision was
  made available from the Departmental equitable
  share.
• Quarterly progress reports on PFMA compliance are
  prepared and submitted to Provincial Treasury at
  the end of each Quarter

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PRIOR YEARS SPENDING VS
ALLOCATION

• d) HIV AIDS
• The Departments allocation for HIV AIDS has
  significantly been increasing over the years to
  respond to the requirements/needs of the infected
  and affected persons.
• The Conditional Grant has increased from R 1m in
  2001/02 to over R20m in 2005/06
• In dealing with social issues of HIV AIDS the
  Department works in collaboration with the
  Provincial Department of Health.
• In addition to the Conditional Grant received in
  the current financial year from National
  Department, an additional R 40m was made
  available during the adjustment budget from
  Provincial Health Department in order to provide
  for HIV AIDS programmes (See the attached
  copies of the Business Plans)

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PRIOR YEARS SPENDING VS
ALLOCATION

• e) Integrated Social Development Services
  Programme
• The Programme initially took form of Emergency
  food Parcel Programme in the 2003/04 Financial
  Year with an allocation of R 27,9m.
• Of the total allocation in that financial year R
  4m could only be spent at the end of the
  financial year as a result of delays experience
  in the appointment of Service Providers through a
  Centralized National Tender that was finalized in
  the last Quarter of the Financial year.
• A request for the Roll Over of the Unspent amount
  was declined by Provincial Treasury as a result
  of the Department having overspent its total
  allocation in the 2003/04 financial year by R
  243m for Social Security.
• In the 2004/05 financial year R 18,3m of the
  total R 27,m was spent and furthermore the
  request for a Roll Over was declined on the basis
  of the Department having overspent its total
  allocation an unwavering stance that Provincial
  Treasury has taken when evaluating the requests
  for Roll Overs from Provincial Departments

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CURRENT SPENDING
NAME OF GRANT CURRENT ALLOCATION R 000 AMOUNT SPENT AS AT 30 NOV 2005 R 000 AMOUNT SPENT AS A PERCENTAGE OF THE CURRENT ALLOCATION AMOUNT TO BE SPENT BY END OF THE FINANCIAL YEAR
1. Social Assistance Grants 6 454 145 3 932 221 61 85,8
2. Social Assistance Grants ( Administration) 350 000 152 128 43 85,3
3. Integrated Social Development Services Grant 27 904 13 162 46 100
4. HIV/AIDS 20 341 20 341 100 100
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CONDITIONAL GRANTS AS A
PERCENTAGE OF TOTAL

ALLOCATION

• Intergrated Social Development R
  27 904 0,36
• HIV/AIDS
  R 20 341 0,27
• Social Assistance Grants Administration R 350
  000 4,6
• Social Assistance Transfer Grants R 6 454
  145 84
• Total Allocation of the Department R 7
  663 665

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ANALYSIS OF CURRENT SPENDING

• Social Assistance Grants
• Though 61 has been spent of the total allocation
  as at the end of Nov 05, the Department still
  Projects to spent less than the total allocation
  by an amount in excess of R 200m.
• This could be attributable to the less than
  anticipated uptake in beneficiaries who qualify
  for Social Grants especially Child Support Grant
  and Disability Grant
• The Department has furthermore been spending
  significantly less than the current R 12m
  that has been spent on Social Relief of Distress
  (2004/05 R 820 000 was spent)
• Social Assistance Grants ( Administration)
• 43 of the total allocation has been made spent
  by the end of November 05 as a result of amongst
  others delay in the appointment of Support Staff
  ( Posts were advertised in the 3rd Quarter of the
  Financial Year)
• However the expenditure is expected to pick up
  significantly in the last quarter of the
  financial year as the Unit (i.e. Social Security)
  is expect to occupy a new Building thus the
  expenditure related preparing the building for
  utilization is expected to be incurred.

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ANALYSIS OF CURRENT SPENDING

• Integrated Social Development Services Grant
• The Integrated Social Development Services Grant
  makes provision for the following objectives
• To ensure the provision of social relief to
  targeted people
• To ensure the provision of appropriate
  psychosocial, development and material support
  services to vulnerable youth, children and their
  families including persons with disabilities
• To provide appropriate additional support and
  resources to Early Childhood Development
  Programmes linked to women development
• To provide appropriate additional HR capacity to
  implement and monitor the integrated Social
  Development Services Programme
• Provision had to be made to defray commitments
  which existed at end of 2004/5 which related to
  the Distribution of food parcels as a request for
  a Roll Over, as previously stated, was not
  condoned by the Provincial Treasury

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ANALYSIS OF
CURRENT SPENDING

• Integrated Social Development Services Grant
  (Cont)
• Allocation to Integrated Social Development
  Services Grant R 18,904,000.00
• Allocation to commitments of food parcels (12 833
  households) R 9,000,000.00
• 
  
  Total R 27,904,000.00
• 46 has been spent to date. It is expected that
  the total grant will be will be spent by the end
  of the financial year as significant preparatory
  work had to be undertaken in the first portion of
  the financial year to ensure that organizations
  that are to be funded are capacitated to deal
  with the monies to be transferred.
• NGOs were not project ready and there were
  delays in signing Service Level Agreements.
• Capacity building Programmes have been undertaken
  and payments are now being made.
• The Department utilizes 6 established NGOs to
  assist with delivery according to the business
  plan submitted.
• Service Level Agreements have been entered into
  with these organizations as they became project
  ready. New SLAs will be entered into at the
  beginning of the next financial year.
• 43 functional ECDs centers were identified to be
  empowered for the rendering of Early Childhood
  Development on community level
• Youth unemployment and underdevelopment is a
  major focus of the programme. Youth living and
  working on the streets are taken to shelters and
  introduced to skills programmes with the view of
  placing them in employment.
• The Department budgeted for the appointment of 9
  additional personnel on contract basis to ensure
  efficient and effective management and monitoring
  of the programme

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ANALYSIS OF CURRENT SPENDING

• HIV/AIDS
• Total allocation has been spent by the end
  November 05
• Further commitments would be honored from the R
  40m suspended to the Department of Social
  Development by the Provincial Department of
  Health.
• The appointment of 11 HIV/AIDS Co-coordinators (2
  additional coordinators to be appointed) enabled
  the Department to manage and monitor the
  conditional grant effectively
• Community-based services to persons infected and
  affected by HIV AIDS as well as Orphans and
  Vulnerable Children is rendered by 75 NGOs in
  terms of Service Level Agreements signed in the
  beginning of the financial year.
• The conditional grant in future will form part of
  the equitable share of the Province and the
  Department is in the process of revisiting the
  post structure to ensure effective management and
  service delivery

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ALLOCATION FOR CAPITAL
EXPENDITURE

• The Departmental allocation for Capital
  Expenditure is constituted by amounts provided
  for from the Discretionary Allocation ( Capital
  Budget) and amounts Earmarked as such from
  Provincial Treasury( i.e. Infrastructure
  Allocation)
• EARMARKED ALLOCATION FROM PROVINCIAL TREASURY
• (INFRASTRUCTURE)
• R 24,4m has been allocated to the
  Department over the last 3 years for Capex. Over
  70 of the allocated amounts is suspended to the
  Provincial Public Works Department during the
  adjustment period in order for them to perform
  major Capital Works Projects on behalf of the
  Department. (R 17,4m was suspended to Public
  Works in the current financial year)

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EARMARKED ALLOCATION FROM PROVINCIAL TREASURY (
INFRASTRUCTURE)

• Capital Expenditure
• The Departments major Capital Expenditure
  project in the current financial year is the
  conversion of Place of Safety facilities at the
  Walter Sisulu Centre to accommodate Children in
  Conflict with the Law.
• Site handover done in September 2005 and
  contractors have commenced work with shortened
  timeframes for delivery.
• Due to the delay in commencing the project, some
  funding that had been made available in the
  current financial year for this particular
  project that might not be spent in the current
  financial year have diverted to other projects
  and in particular the reconstruction of the Sewer
  system at the Magaliesoord Youth Centre.
• The Expectation is that the total cost of
  Conversion will be approximately R3m by year end
  and the reconstruction of the Sewer system will
  require R1.8m.
• Additional minor projects at Head Office,
  Regional Offices and Institutions will ensure
  that the total allocation in the current
  financial year is utilised at year end.

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NEW CAPITAL PROJECTS
BUDGET 2005/06 EXPENDITURE TO END NOVEMBER 2005 PROJECTED EXPENDITURE FOR REMAINING PERIOD OF THE YEAR
Total 5,120,000 2,405,873 2,714, 127
Note The available resource R3,2m which was
rolled over from the financial year 2004/05 and R
1,9m that has been made available from the
Current years allocation.
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CAPITAL WORKS PROGRAMME 2005/06
MAINTENANCE
PREVENTATIVE MAINTENANCE (Upgrades to prevent major capital expenses at a later stage) PREVENTATIVE MAINTENANCE (Upgrades to prevent major capital expenses at a later stage) STATUTORY MAINTENANCE (Mainly the term contracts the Department is obliged to honour) STATUTORY MAINTENANCE (Mainly the term contracts the Department is obliged to honour) ROUTINE MAINTENANCE (Day-to-day maintenance of buildings, electrical and mechanical) ROUTINE MAINTENANCE (Day-to-day maintenance of buildings, electrical and mechanical)
Budget 2005/06 Expenditure to Oct. 2005 Budget 2005/06 Expenditure to Oct. 2005 Budget 2005/06 Expenditure to Oct. 2005
5 412 094 2 915 139 6 215 402 896 887 10 872 869 1 598 759
Spent 53 Spent 14 Spent 15
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Measures to prevent an under
spending on capital programmes

• The Department has already undertaken joint
  planning process with the Directorate Integrated
  Planning of the Department of Public Transport,
  Roads and Works to ensure that in future
  implementation of projects takes place timeously
  within the financial year.
• In addition monthly detailed reports are
  submitted by DPTRW for monitoring of progress on
  projects and expenditure and these reports are
  monitored and discussed Senior Management level
  to ensure prompt response to identified problems

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EARMARKED ALLOCATION FROM PROVINCIAL TREASURY (
INFRASTRUCTURE) Cont.

• Planning 2006-2007
• Provincial Treasury has made a commitment to
  provide additional funding over the MTEF to
  finance the Rehabilitation, Maintenance and
  Upgrading of existing facilities including Secure
  Care facilities.

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ALLOCATION FOR CAPITAL
EXPENDITURE

• ALLOCATION FROM DISCRETIONARY ALLOCATION
  (CAPITAL BUDGET)
• This particular provision is made in order
  to enable the Department to execute minor
  maintenance work at its Institutions and Regional
  Offices and for the procurement of Machinery and
  Equipment.
• The revised Standard Chart of account which
  became effective from the 1st April 2004 had a
  significant impact on this particular expenditure
  classification as it required reclassification of
  some items of expenditure (e.g. Equipment less
  than R 5 000).
• The revised Chart of Accounts required
  also a paradigm shift in the manner in which
  Budgets were prepared. Provision which in prior
  year was made from this Classification as Capital
  had to be made as per the revised structure as
  Current Expenditure.
• 2004/05 Budget R 11 647 000 vs.
  Expenditure R 5 754 000
• 2003/04 Budget R 15 147 000 vs.
  Expenditure R 9 182 000
• The avg. spending for the above mentioned
  financial years amounts to 55. The programme
  managers have had sufficient time to adjust to
  revised reporting formats and this would ensure
  that provision has currently been made is spent.
  Already more than 50 of the total current
  allocation excluding Programme 2(Social
  Assistance Conditional Grant) has been spent by
  the end of November 2005.

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Conclusion

• The Department is improving on its capacity to
  respond to the requirements of PFMA and the
  Division of Revenue Act
• This is ensured through prompt submission of
  Monthly and Quarterly Financial and Non Financial
  Reports to the relevant stakeholders by the due
  dates.

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THANK YOU