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NORTH WEST

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Title: NORTH WEST


1
  • NORTH WEST
  • PROVINCIAL TREASURY
  • PRESENTATION ON CONDITIONAL GRANTS
  • MEC. DE AFRICA

2
INTRODUCTION
  • 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

3
Transfers Expenditure
4
Transfers Expenditure
5
ALLOCATION 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

6
Assessment 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.

7
Assessment 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

8
UNDER-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
9
UNDER-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
10
NEW INITIATIVES
  • Budget Oversight Committee
  • Quarterly meetings with departments and entities
  • Intervention by Premier
  • Cash appropriation is based on ability to spend
    by dept.

11
MONTHLY REPORTING
  • Previously Monthly reporting by departments
  • Current year Monthly and quarterly reporting by
    departments and public entities

12
BUSINESS PLANS
  • Business plans submitted directly to national
    departments
  • National departments submit to National Treasury
  • Provincial treasury only monitors submission of
    business plans

13
OWN 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.

14
OWN ANALYSIS
  • Inability to plan in time
  • Lack of capacity in terms of appropriately
    qualified officials
  • Inability to retain qualified personnel

15
Spending in 1st 4th quarter
16
Spending 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)

17
Challenges 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


18
Challenges 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


19
CONCLUSION
  • Receipts are evenly spread
  • Only Agriculture received bulk of funds in the
    last quarter
  • Spending trends confirm lack of planning and
    tendering


20
  • THANK YOU
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