PRESENTATION INFRASTRUCTURE SPENDING

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PRESENTATION INFRASTRUCTURE SPENDING 31 AUGUST
2006Department of Agriculture, Conservation and
Environment

• PUBLIC HEARING ON CONDITIONAL GRANTS AND CAPITAL
  EXPENDITURE
• ON TUESDAY 19 SEPTEMBER 2006
• V454 (OLD ASSEMBLY) PARLIAMENT

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CONTENTS
COMPARISON OF SPENDING TRENDS BASED ROLL-OVER
FUNDS

• High Impact Projects
• Efforts to Spend DoRA funds
• Summary of Financial Performance (1st Quarter)
• Capital Expenditure
• Amount Rolled-over 2005/06 Financial year
• Comparison of Spending Trends based on Roll-over
  Funds
• Analysis spending (including Commitments)
• Challenges and Measures Taken

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HIGH IMPACT PROJECTS 2005/06

• Some of the major projects approved and
  implemented during 2005/06 financial year
• Doornlaagte Livestock Water
• Mampa Beef Cattle
• Nocolasdoorlaagte Livestock Water
• Livestock Handling Facilities in all the
  Districts
• Shiela/Mooifontein Soil Fertility improvement
  Project
• Reseoposengwe Trust in Bophirima
• Boskop Community Trust in Southern
• Mosita Beef Project in Bophirima
• The Department could not complete all the
  projects and implementation of these is
  continuing in the current financial year

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2006/07 EFFORTS TO SPEND DORA FUNDS

• Meeting held with officials of National
  Department of Agriculture (NDA)
• Visits by NDA officials and impediments to
  implementation and expenditure on projects
  highlighted
• Lack of capacity with respect to Engineers and
  Economists (for design and business planning)
• Project management capacity
• Procurements processes (increased delegations)
• A detailed schedule of spending roll-over funds
  agreed
• Schedule submitted to NDA through Provincial
  Treasury
• Financial results of the first quarter indicated
  an improvement in infrastructure spending R16,5
  million including earmarked funds from the
  province

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SUMMARY OF FINANCIAL INFORMATION FOR 30 JUNE 2006
BUDGET (R000) Expenditure YTD (R000) USED
CURRENT EXPENDITURE Employee Compensation Transfer Payments Administration Stores Professional Fees Other 264 759 6 653 23 630 10 242 6 434 27 890 60 972 305 8 814 1 751 472 8 755 23 5 37 17 7 31
CAPITAL EXPENDITURE Equipment Land Buildings Infrastructure (Projects) Other Capital 1 486 504 85 730 512 326 0 16 447 0 22 0 19 0

Total expenditure 427 840 97 842 23
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FINANCIAL PERFORMANCE FOR THE MONTH
ENDING 30 JUNE 2006

• Financial performance was brought in for the
  purpose of determining the position of
  infrastructure spending as at the 1st Quarter.
• Total infrastructure spending including earmarked
  funds amounted to R16.7 million

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CAPITAL EXPENDITURE

• An amount of R2,5 million made up as
• Equipment R1 486
• Land Buildings R 504
• Other R 512
• Spending as at 31 August 2006 for Equipment
  amounts to R521
• Equipment includes purchase of laboratory
  equipment for Research Technology and
  replacement of computer equipments
• Land Buildings fencing around the Agricentre
  Building
• Other installation of the security system in
  the Agricentre Building

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AMOUNT ROLLED-OVER FROM 2005/06
FINANCIAL YEAR
Conditional Grant Budget (R000) Spent (R000) Spent Roll-over (R000)
Land Care CASP Drought Relief 5 000 33 594 16000 1 468 4 351 - 29 13 - 3 532 29 243 16 000
TOTAL 54 594 5 819 10.7 48 775
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COMPARISON OF SPENDING TRENDS BASED
ON ROLL-OVER FUNDS

• As at the end of the previous financial year
  10.7 of the allocated funds were spend
• As previously reported Agriculture Disaster
  Management Grant was not spend as at the end of
  the financial year
• The spending pattern for the current financial
  year indicates that the Department has overcome
  most of the implementation problems

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2006/07 SPENDING (FROM ROLL-OVER FUNDS)
Conditional Grant Roll-over (R000) Spent 1ST QUARTER (R000) Spent Spent 31 AUG 2006 (R000)
Land Care CASP Drought Relief 3 532 29 243 16 000 549 6 803 7 029 15.5 23.3 43.9 1 473 13 256 13 322
TOTAL 48 775 14 381 29.5 28 051
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ANALYSIS OF SPENDING 31 AUGUST 2006

• 29.5 of the roll-over funds were spend as at the
  first quarter of the current financial year
• 57.5 of the roll-over funds were spend as at 31
  August 2006
• Agricultural Disaster Management Grant was mainly
  spend in the Bophirima District
• Commitments were considered as a measure to test
  the feasibility of the plans put in place to
  improve service delivery with respect to
  infrastructure spending (these are not meant to
  form part of the measure for spending)

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SPENDING INCLUDING COMMITMENTS31
AUGUST 2006
Conditional Grant Roll-over (R000) Spent 31 AUG 2006 (R000) Commitments TOTAL INCL COMMITTMENTS (R000)
Land Care CASP Drought Relief 3 532 29 243 16 000 1 473 13 256 13 322 517 20 999 213 1 990 34 255 13 535
TOTAL 48 775 28 051 21 729 49 780
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TOTAL SPENDING ON DORA FUNDS INCLUDING
COMMITMENTS TO DATE

• Commitments to date include the order for bulk
  fencing for identified projects in the Province
  (delivery expected in September 2006)
• Expenditure, including commitments indicates that
  the province will spend all the roll-over funds
  by 30 Sept 2006 as planned
• An excess spending on roll-over funds is possible
  due to the existence of the current year budget
  funds

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2006/07 SPENDING (FROM ROLL-OVER FUNDS)
Conditional Grant Roll-over (R000) Spent 1ST QUARTER (R000) Spent Spent 31 AUG 2006 (R000)
Land Care CASP Drought Relief 3 532 29 243 16 000 549 6 803 7 029 15.5 23.3 43.9 1 473 13 256 13 322
TOTAL 48 775 14 381 29.5 28 051
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CHALLENGES AND MEASURES TAKEN

• CHALLENGES
• The under-expenditure in relation to both the
  Land Care and CASP is mainly of the following
  factors
• Individual item procurement of services per
  project
• Misunderstanding between the national and
  provincial managers about flexibility and power
  to change projects
• Shortage of specialist skills (Project
  management, economist and engineers)
• Constraints imposed by financial delegations at
  the beginning of 2004/2005.
• Establishment of the Supply Chain Unit and
  training of members of the DPC

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CHALLENGES AND MEASURES TAKEN

• MEASURES TAKEN
• Implementation of Bulk Procurement Systems
• Increased in financial delegation to responsible
  officials
• Outsourcing of specialist skills
• Projects affected by unforeseen circumstances and
  which will not able to spend are now reviewed and
  new ones approved from time to time.
• Establishment of the Supply Chain Management Unit
  and restructuring of the Departmental Procurement
  Committee.
• Monthly reports form responsible officials
  discussed regularly to ensure timeous
  interventions