Title: NORTH WEST
1- NORTH WEST
- PROVINCIAL TREASURY
- PRESENTATION ON CONDITIONAL GRANTS
- MEC. DE AFRICA
2INTRODUCTION
- Conditional grants are allocated for three years
but change annually - Division of Revenue Act only available on 1 April
- Additional conditional grants gazetted only in
December
3Transfers Expenditure
4Transfers Expenditure
5ALLOCATION AND SPENDING TRENDS
- Departmental baseline allocations reduced to
fixed costs - Benchmark controllable expenditure
- 10 top-slice for development and skills
- Budget allocations will be fixed for three years
6Assessment of monitoring capacity
- Sub directorate established to monitor
infrastructure including conditional grants - Early warning system used to report deviations on
spending on monthly basis - Departmental CFOs are responsible to analyze
over/ under expenditure and provide reasons - The under-spending results from beneficiary
departments not being able to plan properly and
tender on time.
7Assessment of monitoring capacity
- Procurement/ Tendering responsibility has been
assigned to departments. - All departments are establishing supply Chain
Management Units whos role is to manage
procurement - Monthly financial reports
- Meetings with departments
- Monitoring constraints by PFMA and DoRA
8UNDER-EXPENDITURE ON CONDITIONAL GRANTS (R000)
DEPARTMENT Health Education Housing Local Government Social Development Agriculture Infrastructure TOTAL UNDER 72,885 13,452 141,915 9,031 62,946 0 50,111 350,340
9UNDER-EXPENDITURE CAPACITY
DEPARTMENT Health Education School nutritional programme Local government Housing Infrastructure REASON Lack of planning Dept did not have enough time to appoint officials to manage the grant when function transferred from Health Lack of capacity in municipalities Lack of planning capacity Lack of planning
10NEW INITIATIVES
- Budget Oversight Committee
- Quarterly meetings with departments and entities
- Intervention by Premier
- Cash appropriation is based on ability to spend
by dept.
11MONTHLY REPORTING
- Previously Monthly reporting by departments
- Current year Monthly and quarterly reporting by
departments and public entities
12BUSINESS PLANS
- Business plans submitted directly to national
departments - National departments submit to National Treasury
- Provincial treasury only monitors submission of
business plans
13OWN ANALYSIS
- National Treasury delayed the first instalment
of the Infrastructure Conditional Grant as is it
was only received during July 2004. - Forensic Audits, departmental planning and Tender
processes delayed the start of projects and the
appointment of consultants as these projects were
held back for investigation. - The splitting and merging of some departments
resulted in major disruptions of payments and
planning - New staff members were appointed to assist with
payment processing in merged departments, which
resulted in delays. - Capacity problems and planning of projects are
experienced at municipalities with regard to
local government.
14OWN ANALYSIS
- Inability to plan in time
- Lack of capacity in terms of appropriately
qualified officials - Inability to retain qualified personnel
15Spending in 1st 4th quarter
16Spending by other Agencies
- Infrastructure grant Health and Education use
IDT (26) - Housing grant and human resettlement Transfers
to municipalities - HIV/AIDS grant Health transfers 34 to NGOs
- Agriculture Transfers to public entities (DED)
17Challenges and lessons learned in implementing
financial management legislation
- Problem with appointing and retaining staff for
PFMA implementation - Inability to plan in advance to implement
programs - Lack of capacity in terms of project management
- Excessive use of consultants
18Challenges and lessons learned in implementing
financial management legislation
- Implementation of MFMA also poses similar
challenges to PFMA - Local Governments regard assistance as
interference. - Difficulty in separating roles
- No uniformity in financial systems
19CONCLUSION
- Receipts are evenly spread
- Only Agriculture received bulk of funds in the
last quarter - Spending trends confirm lack of planning and
tendering
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