Preliminary outcomes of 2017/18 provincial expenditure as at 31 March 2018 Eastern Cape
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1 outcomes of 2017/18 provincial expenditure as at 31 March Eastern Cape Intergovernmental Relations, National Treasury SCOF 15 May
2 Provincial, 2017/18 Table: Provincial adjustments for the 2017/18 financial year Main Appropriation to Equitable Share to Conditional Grants Total National Total Provincial Total Adjusted Appropriation Projected (over)/ under expenditure DoRA, as amended Other Gazettes* Eastern Cape Free State Gauteng Kw azulu-natal Limpopo Mpumalanga Northern Cape North West Western Cape Total * Other gazettes includes Government Gazette No tabled on the 25 October 2017 to provide for the immediate release of funds for disaster response (Provincial Disaster Grant) in the Western Cape; Government Gazette No tabled on the 26 January for the Human Settlements Development Grant and; Government Gazette No tabled on the 27 March for the Eduation Infrastructure Grant. Table : Provincial by Province by Sector as at 31 March Total, 2017/18 Sector Eastern Cape Free State Gauteng KwaZulu- Natal Limpopo Mpumalanga Northern Cape North West Education Health Social Development Public Works, Roads and Transport Agriculture Cooperative Governance and Human Settlements Other Total Economic classification Current payments Compensation of employees Goods and services Interest and rent on land Transfers and subsidies Payments for capital assets Payments for financial assets of which: NPNC Total * 2017/18 Provincial adjustments includes all national and provincial adjustments (including roll-overs) as well as other relevant government gazettes. Western Cape Total
3 Provincial s and preliminary at 31 March Table: Provincial Aggregated Budgets and Expenditure as at 31 March 2016/17: Year-onyeayear Year-on- Main under of Outcome as at 31 March at 31 March increase growth 2017 Eastern Cape % % % Free State % % % Gauteng % % % Kw azulu-natal % % % Limpopo % % % Mpumalanga % % % Northern Cape % % % North West % % % Western Cape % % % Total % % % Eastern Cape: The preliminary outcome amounts to R74.6bn or 99% of the R75.3bn provincial s Increase in expenditure of 7.3% or R69.5bn compared to 2016/17 All departments underspent 2
4 Education preliminary at 31 March Eastern Cape: Accounts for the largest proportion of provincial preliminary outcomes at 44% Education personnel seems to be under control underspending is recorded at R61.7m. This is the situation after a decrease of R242.2m to the original education personnel Education capital spending has decreased by R1.8bn or 12.3% when compared to the 2016/17 financial year. underspending in education capital is at R213.4m or 12.1% Education spending on goods and services has been slowing down with an underspending of R73.1m against the goods and services s Table: Provincial Education Expenditure as at 31 March % share of % share of Education 2016/17: Education Year-onyear Main under of to total Outcome as to total at 31 March Social at 31 March provincial growth Services 2017 expenditure expenditure Eastern Cape % % 44.0% 57.0% % Free State % % 39.3% 54.3% % Gauteng % % 37.4% 47.1% % Kw azulu-natal % % 41.6% 53.0% % Limpopo % % 46.7% 58.8% % Mpumalanga % % 43.0% 58.6% % Northern Cape % % 36.3% 52.6% % North West % % 38.9% 56.1% % 4 Western Cape % % 34.8% 46.6% % Total % % 40.5% 53.0% %
5 Education: Compensation of Employees Table: Provincial Personnel Expenditure: Education as at 31 March % share of % share of Education Education 2016/17: Year-onyear Mainb under of Personnel Personnel Outcome as at 31 March to total to total at 31 March growth personnel Education 2017 expenditure expenditure Eastern Cape % % 54.4% 78.7% % Free State % % 51.1% 79.3% % Gauteng % % 50.0% 75.9% % Kw azulu-natal % % 55.9% 82.9% % Limpopo % % 54.5% 80.4% % Mpumalanga % % 57.6% 79.7% % Northern Cape % % 50.0% 76.7% % North West % % 52.3% 76.9% % Western Cape % % 48.1% 73.8% % Total % % 53.1% 78.8% % Accounts for the largest proportion of provincial preliminary education expenditure (78.8%) In aggregate educator headcounts has increase by only 0.4% or heads from 2016/17 Education personnel expenditure has increased by 7.7% mainly attributed to the cost of living adjustments and other personnel related matters in 2017/18 Table: Summary: Education Headcount as at 31 March 2016/ /18 as at 31 March 2017 as at 31 March Estimated actual change (Nominal) 2016/ /18 % Growth rates: Estimated actual (Nominal) 2016/ /18 Eastern Cape % Educators Other % Free State (0.9%) Educators (0.8%) Other (1.2%) Gauteng % Educators % Other % Kw azulu-natal (1.7%) Educators (1.3%) Other (3.7%) Limpopo % Educators % Other % Mpumalanga % Educators % Other (2.5%) Northern Cape (1.4%) Educators (0.6%) Other (4.1%) North West % Educators % Other % Western Cape % Educators % Other % Total % Educators % Other % 5
6 Education: LTSM preliminary at 31 March Table: Provincial Learner and Teacher Support Material: Education as at 31 March % share of 2016/17: LTSM to under of Outcome as Year-on-year Education at 31 March at 31 March growth G&S 2017 expenditure Eastern Cape % % 20.6% % Free State % % 10.6% % Gauteng % % 12.3% % Kw azulu-natal % % 16.2% % Limpopo % % 24.3% % Mpumalanga % % 20.6% % Northern Cape % % 11.9% % North West % % 39.2% % Western Cape % % 8.1% % Total % % 17.5% % The underspending of R1.9 billion of the education goods and services s is mainly due to the Learner and Teacher Support Material (LTSM) item with a preliminary underspending of R541.7 million. 6
7 Education: Throughput Pass Rate 2017 Matrics 2017 Throughput Pass Rate 2016 Matrics 2016 Throughput Pass Rate Total Wrote Total Achieved Traditional Matric Pass Rate Throughput Passrate 1: Matric Pass Rate as % of Gr2 (2007) Throughput Pass Rate 2: Matric Pass Rate as % of Gr10 (2015) Total Wrote Total Achieved Traditional Matric Pass Rate Change in Traditional Matric Pass Rate ( ) % change in number of Gr12s writing matric in 2017 compared to 2016 Eastern Cape % 22% 28% Free State % 40% 36% Gauteng % 58% 48% Kwazulu-Natal % 39% 37% Limpopo % 40% 33% Mpumalanga % 42% 39% North West % 37% 36% Northern Cape % 29% 33% Western Cape % 49% 56% National % 39% 37% % 6% -18% % -2% -6% % 0% -6% % 6% -16% % 3% -18% % -2% -11% % -3% -4% % -3% -13% % -3% -4% % 3% -12% Source: Pg51 NSC Exam Report 2017 Pg 7 NSC Technical Report
8 Health preliminary at 31 March Table: Provincial Health Expenditure as at 31 March % share of % share of 2016/17: Health to Health to Year-onyear Main under of Outcome as total total Social at 31 March at 31 March provincial Services growth 2017 expenditure expenditure Eastern Cape % % 29.8% 38.6% % Free State % % 29.7% 41.0% % Gauteng % % 37.9% 47.8% % Kw azulu-natal % % 34.3% 43.8% % Limpopo % % 29.7% 37.5% % Mpumalanga % % 27.1% 36.9% % Northern Cape % % 27.6% 40.0% % North West % % 26.6% 38.4% % Western Cape % % 36.3% 48.6% % Total % % 32.5% 42.5% % Eastern Cape: Health preliminary outcome is at R22.2bn or 99.5% against the total provincial health s of R22.3bn Personnel expenditure seems to be under control with underspending recorded at R106.7m or 0.7% Compared to the previous financial year, payments for claims against the state have increase by 103% or R214.8m Very high and growing claims Need improved systems to prevent and manage this problem Table: Payment trends on claims against the state R tho usand 2012/ / / / / / 18 % A verage Gro wth R ate 2016/ / / / 18 Eastern Cape % 26.9% Free State % 28.8% Gauteng % 38.9% KwaZulu-Natal % 64.8% Limpopo % -33.8% M pumalanga % 19.7% Northern Cape % -10.5% North West % 40.0% Western Cape % 40.8% T o tal % 37.8% 8
9 Health: Compensation of Employees Table: Provincial Personnel Expenditure: Health as at 31 March % share of % share of Health Health 2016/17: Year-onyear Main under of Personnel Personnel Outcome as at 31 March to total to total at 31 March growth personnel Health 2017 expenditure expenditure Eastern Cape % % 30.7% 65.5% % Free State % % 31.0% 63.9% % Gauteng % % 39.9% 59.7% % Kw azulu-natal % % 34.4% 61.7% % Limpopo % % 30.5% 70.6% % Mpumalanga % % 27.1% 59.7% % Northern Cape % % 27.9% 56.3% % North West % % 29.0% 62.2% % Western Cape % % 40.1% 59.0% % Total % % 33.6% 62.2% % Eastern Cape health headcounts added 895 personnel in 2017/18 Nurses (643 heads) Medical Doctors (153 heads) Medical Specialist (4 heads) Other (95 heads) In aggregate, the sector reduced by personnel in the 2017/18 financial year Nurses (254 heads) Medical Doctors (561 heads) Medical Specialist (-137 heads) Other ( ) 9
10 Health Spending Pressures (Goods and Services) Table : Provincial Medical Supplies Expenditure: Health as at 31 March % share of M ed 2016/17: under of Supplies & Outcome as Year-on-year at 31 March M edicine to at 31 March growth Health G&S 2017 exp Eastern Cape % % 11.4% % Free State % % 15.4% % Gauteng % % 19.6% % Kw azulu-natal % % 13.3% % Limpopo % % 9.6% % Mpumalanga % % 10.6% % Northern Cape % % 8.0% % North West % % 12.1% % Western Cape % % 21.6% % Total % % 15.2% % Table : Provincial Medicines Expenditure: Health as at 31 March % share of M ed 2016/17: under of Supplies & Outcome as Year-on-year at 31 March M edicine to at 31 March growth Health G&S 2017 exp Eastern Cape % % 34.0% % Free State % % 30.0% % Gauteng % % 28.8% % Kw azulu-natal % % 32.5% % Limpopo % % 31.9% % Mpumalanga % % 41.0% % Northern Cape % % 21.9% % North West % % 24.4% % Western Cape % % 20.8% % Total % % 29.8% % Table : Provincial Laboratory Services: Health as at 31 March % share of M ed 2016/17: under of Supplies & Outcome as Year-on-year at 31 March M edicine to at 31 March growth Health G&S 2017 exp Eastern Cape % % 10.9% % Free State % % 12.7% % Gauteng % % 11.5% % Kw azulu-natal % % 16.6% % Limpopo % % 11.3% % Mpumalanga % % 12.0% % Northern Cape % % 7.9% % North West % % 10.4% % Western Cape % % 9.6% % Total % % 12.3% % Table : Provincial Property Payments Expenditure: Health as at 31 March % share of M ed 2016/17: under of Supplies & Outcome as Year-on-year at 31 March M edicine to at 31 March growth Health G&S 2017 exp Eastern Cape % % 16.1% % Free State % % 2.9% % Gauteng % % 14.8% % Kw azulu-natal % % 14.8% % Limpopo % % 20.3% % Mpumalanga % % 8.2% % Northern Cape % % 12.1% % North West % % 15.3% % Western Cape % % 15.3% % Total % % 14.4% % 10
11 Provincial Health Payments for Capital Assets / Infrastructure by Category as at 31 March Rand Thousand Province 40.0% 20.0% 0.0% 2017/18: Health Payments for capital assets by province as at 31 March VS 31 March % 104.3% 91.4% 100.8% 95.0% 100.0% 89.3% 87.0% 89.8% 90.9% 84.6% 75.4% 77.7% 80.0% 69.1% 68.4% 56.0% 60.0% Outcome as at 31 March 2017/ /17 Variance % Outcome against s Audited Outcome as at 31 March 2017 % Audited Outcome against s 112.4% 101.0% 101.7% 92.8% EC FS GT KZN LIM MPU NC NW WC 2017/ /17 Variance in spending % Year on Year ECEastern Cape % % % FSFree State % % % GTGauteng % % % KZKwaZulu-Natal % % % LI Limpopo % % % MMpumalanga % % % N Northern Cape % % % N North West % % % WWestern Cape % % % Total % % % growth Table : Provincial Health Infrastructure Expenditure as at 31 March Province Main appropriation Adjusted appropriation at 31 March % Payments against Adjusted Appropriation (over)/under outcome Existing infrastructure assets ( ) % M aintenance and repair: Current % (38 291) Eastern Cape ( ) % ( ) Free State % Gauteng % (12 083) KwaZulu-Natal (69 425) % Limpopo (19 942) % ( ) Mpumalanga % Northern Cape % North West (5 966) % Western Cape % Upgrade and additions: Capital ( ) % (59 811) Eastern Cape (22 511) % ( ) Free State % Gauteng ( ) % KwaZulu-Natal (4 413) % (3 632) Limpopo % Mpumalanga ( ) % (7 083) Northern Cape % North West (45 769) % (20 101) Western Cape (8 632) % Refurbishment and rehabilitation: Cap (52 075) % Eastern Cape ( ) % Free State % (14 350) Gauteng (51 000) % KwaZulu-Natal % Limpopo % (13 820) Mpumalanga % Northern Cape % North West % Western Cape (21 776) % New infrastructure assets: Capital % Eastern Cape % Free State (51 950) % Gauteng ( ) % KwaZulu-Natal (55 378) % ( ) Limpopo (4 859) % (43 006) Mpumalanga % Northern Cape % North West % (32 081) Western Cape % (8 368) Infrastructure transfers % Capital % Current Infrastructure: Payments for financial assets Infrastructure: Leases (7 914) % Non infrastructure % Capital infrastructure % Current infrastructure % (24 810) Total % Eastern Cape ( ) % Free State (8 000) % Gauteng % KwaZulu-Natal % Limpopo % (145) Mpumalanga (94 955) % Northern Cape % 658 North West % Western Cape %
12 Progress on health facilities identified to be ideal in 2017/18 Ideal Clinics/Facilities Clinics with good infrastructure, adequate staff, adequate medicine and supplies, good administrative processes, and sufficient adequate bulk supplies. The National Health Council gave a directive that all Primary Health Care facilities must be Ideal within the next three years from April Facilities conducted in the status determination are scored and categorized as: no category achieved silver (70-79 percent) gold (80-89 percent) platinum (90-99 percent) 12
13 Conditional grants preliminary at 31 March Table: Selected Conditional Grants Spending Rates as at 31 March Number of provinces spent less than 90% Number of provinces spent betw een 90% and 95% (inclusive) Number of provinces spent more than 95% Agriculture, Forestry and Fisheries Comprehensive Agricultural Support Programme Grant 3 FS, GT, KZN, 1 NC, 5 EC, LIM, MPU, NW, WC Ilima/Letsema Projects Grant 3 FS, GT, KZN, 1 LIM, 5 EC, MPU, NC, NW, WC Land Care Programme Grant: Poverty Relief and Infrastructure Development 1 NC, 8 EC, FS, GT, KZN, LIM, MPU, NW, WC Arts and Culture Community Library Services Grant 2 GT, NC, 3 FS, LIM, NW, 4 EC, KZN, MPU, WC Basic Education HIV and AIDS (Life Skills Education) Grant 2 LIM, NW, 7 EC, FS, GT, KZN, MPU, NC, WC Learners w ith Profound Intellectual Disabilities Grant 6 EC, FS, KZN, LIM, MPU, NC, 1 GT, 2 NW, WC Maths, Science and Technology Grant 5 EC, FS, GT, LIM, NW, 1 KZN, 3 MPU, NC, WC National School Nutrition Programme Grant 2 KZN, LIM, 7 EC, FS, GT, MPU, NC, NW, WC Health Comprehensive HIV, AIDS and TB Grant 9 EC, FS, GT, KZN, LIM, MPU, NC, NW, WC Health Facility Revitalisation Grant 3 LIM, MPU, WC 4 EC, FS, GT, NW, 2 KZN, NC, National Professionals Training And Development 4 GT, KZN, MPU, NC, 5 EC, FS, LIM, NW, WC Grant Human Settlements Human Settlements Development Grant 1 NC, 8 EC, FS, GT, KZN, LIM, MPU, NW, WC Public Works Expanded Public Works Programme Integrated Grant for Provinces Social Sector Expanded Public Works Programme Incentive Grant for Provinces Social Development 2 NC, NW, 7 EC, FS, GT, KZN, LIM, MPU, WC Early Childhood Development Grant 5 EC, FS, KZN, LIM, NW, 1 GT, 3 MPU, NC, WC Social Workers Employment Grant 6 EC, FS, GT, KZN, NC, NW, 3 LIM, MPU, WC Sport and Recreation South Africa 9 EC, FS, GT, KZN, LIM, MPU, NC, NW, WC Mass Participation and Sport Development Grant 1 FS, 3 EC, GT, NW, 5 KZN, LIM, MPU, NC, WC 13 Note: Percentages represent actual expenditure against allocations as per the Division of Revenue Amendment Act, 2017 including other relevant government gazettes.
14 Human Settlements Development Grant (HSDG) preliminary at 31 March (1) Table: Provincial Human Settlements Development Grant Expenditure as at 31 March Division of % share of 2016/17: Revenue Year-onyear Government Provincial rollovers Budget at 31 March total grant at 31 March under of grant to Outcome as Act, 2017 Gazettes (Act No. 3 of growth expenditure ) Eastern Cape % 1 0.0% 11.6% % Free State % % 5.9% % Gauteng % % 26.3% % Kw azulu-natal % 0.0% 18.3% % Limpopo % 0.0% 6.2% % Mpumalanga % 0.0% 7.5% % Northern Cape % % 2.4% % North West % % 10.2% % Western Cape % 0.0% 11.6% % Total % % 100.0% % Table: Provincial Human Settlements Development Grant: Delivery Performance as at 31 March Annual Delivery Targets Delivery Performance Targets Achieved % Delivery Performance Targets Achieved Total Total Total Sites Housing Sites Housing Sites Housing Delivery Delivery Delivery Serviced Units Serviced Units Serviced Units Targets Targets Targets Eastern Cape % 99.8% 107.5% Free State % 67.1% 84.2% Gauteng % 52.4% 47.7% Kw azulu-natal % 83.4% 96.3% Limpopo % 90.5% 79.9% Mpumalanga % 112.0% 109.4% Northern Cape % 61.3% 83.1% North West % 51.9% 57.2% Western Cape % 73.2% 82.3% Total % 73.4% 76.1% Source: National department of Human Settlements Eastern Cape: Human Settlement Development Grant (HSDG) has been fully spent (100%) housing units were completed (99.8% against the target of housing units) sites serviced were completed (119.3% against the target of sites) Spending has improved by 17.2% compared to 2016/17. The stopping and reallocation of s has resulted in an additional R100m towards this province. This reflects improved and increased performance particularly for this grant
15 Human Settlements Development Grant (HSDG) preliminary at 31 March (2)
16 . Eastern Cape 16
17 Eastern Cape Expenditure as at 31 March Table : Eastern Cape s and expenditure as at 31 March Main Appropriation Adjusted Appropriation Actual spending as at 31 Dec 2017 Actual spending as % of Adjusted (Over)/ Under % (Over)/ under of Adjusted Adjusted Appropriation Available funds* outcome Actual spending as at 31 Dec 2017 Actual spending as % of Adjusted (Over)/ Under Education % % % % Health % % % % Social Development And Special Prog % % % % Office Of The Premier % % % % Provincial Legislature % % % % Roads And Public Works % % % % Cooperative Governance And Traditio % % % % Rural Development And Agrarian Refo % % % % Economic Development, Environmenta % % % % Transport % % % % Human Settlements % % % % Provincial Treasury % % % % Sport, Recreation, Arts And Culture % % % % Safety And Liaison % % % % Total % % % % Economic classification Current payments % % % % Compensation of employees % % % % Goods and services % % % % Interest and rent on land % % % % Transfers and subsidies % % % % Payments for capital assets % % % % Payments for financial assets of which: NPNC % % % % Total % % % % * Available funds refers to including any post adjustment (Virements and shifts) 2017/18 3rd Quarter 2017/18 4th Quarter % (Over)/ under of Adjusted Education and Health projections in December 2017 were largely unreliable. All departments have underspent in 2017/18 numbers Goods and Services CAPEX Health (R268 million) offset the overspending on Transfers and subsidies due to uned medico legal claims payments Roads and Public Works (R220 million); Delays in spending on Disaster Projects Education: slow implementation of Service Delivery Model which affects procurement of LTSM and furniture However, overspending in: Compensation of employees, largely in Health due to delays in filling 190 clinic posts ring-fenced for highly litigated clinics Significant Underspending on CoE and Goods & services: Education CoE (R61m) and Goods & services (R73m) Health CoE (R107m) and Goods & services (R268m) Social Development CoE (R49m) and Goods & services (R29m) OTP CoE (R14m) and Goods & services (R64m)
18 Eastern Cape Provincial Specific Issues Health: Medico-legal claims remains the biggest risk for the department of Health Claims have increased from R23 million in 2010/11 to an accumulated amount of R467 million in 2017/18 financial year. Contingent liabilities relating to claims against the department amount to R22.5 billion as at the end of the 3 rd Quarter of 2017/18. There is a need for consequence management for general wrongdoing and medical negligence in health facilities across the province. Moreover, Health has accruals of R171 million and payables of R930.8 million as at the 3 rd Quarter of 2017/18 financial year and is currently struggling to make payments due to medico-legal costs. There has been approximately 458 health employees leaving the sector as at 31 March (since March 2017) with the bulk of employees leaving the sector being non-clinical personnel. Significant under spending on CoE and Goods and Services for the 2017/18 financial year. Medico Legal (Expenditure) 2010/ / / / / / / /18 Total LEGAL COST Private Firm: Legal Advice (6 765) Private Firm: Messenger of the court State Attorney: Legal Advice (610) State Attorney: Messenger of the court CLAIMS AGAINST STATE (CASH) Claims against the state (Cash) Grand Total
19 Eastern Cape Provincial Specific Issues Education: Inspite of 8.2 % increase in Education personnel, the educator numbers remained the same [52 633] between 16/17 and 17/18 financial year, whilst learner numbers have declined by or 9.2 per cent. Most teachers in the system [age analysis], are above the age of 50 years of age [though acknowledging the potential wealth of experience], there aught to be a balance young teachers to provide continuity of change for the sharing of good experiences, transfer of skills and sustainability of quality Education. Owing to norms and standard challenges, an amount of R246.4 million has been ring fenced [earmarked / set aside] in the department to augment norms and standard allocation so as to improve education infrastructure as per EXCO Resolution. Though progress [slow] is being made to eradicate school infrastructure backlogs [ASIDI] in the province by DBE, poor spending[17/18] on ASIDI has detrimental effect. Through an NT facilitated meeting, there is a commitment by both DBE and Provincial Department of Education to work together to improve spending going forward. Cross cutting Issues Poor infrastructure spending due to inadequate management of contractors and late processing of payments by departments. Escalating cost of consultants - escalating consultancy costs and its impact in the overall management of compensation of employees. There is a need to expedite the approval of the department s organogram to alleviate this challenge. Accruals - R3.9 billion at the end of March 2017 (money owed by provincial departments to the suppliers/ creditors, and this non-payment of suppliers / creditors negatively affects the economy of the province, especially the SMMEs).
20 Thank You 20
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