The third quarter year to date provincial budget statement of receipts and payments, published by the National Treasury in terms of Section 32 of the Public Finance Management Act, 1999 (PFMA) on 29 January 2010, covers spending for the first nine months of the 2009/10 financial year, which ended 31 December 2009. It is available on the treasury website at www.treasury.gov.za.
The information is sourced from the Section 40(4) PFMA reports signed by each head of provincial department to their provincial treasury, and submitted to the National Treasury by 22 January 2010. Queries on spending or budget numbers should therefore, in the first instance, be referred to the relevant head official of the provincial department, and in the second instance to the head official of the provincial treasury. Queries on conditional grants may also be referred to the relevant head official of the administering national department.
The budgeted expenditure figures in the third quarter publication take account of revisions effected in the provincial adjustment budgets, which were presented to their provincial legislatures during November 2009. It includes R10.8 billion allocated to provinces (R9 billion to the provincial equitable share and R1.8 billion to conditional grants) through the 2009 Adjusted Estimates of National Expenditure.
The approved additional adjustments to provinces were gazetted on 10 December 2009 and these additional transfers were taken up in the provincial adjusted budgets in terms of Section 31(2) of the PFMA and Section 24(2) of the Division of Revenue Act, 2009.
The wage agreement (Resolution 5 of 2009 of the PSCBC) is 5 per cent higher than what provinces planned for when they tabled their 2009 Budgets. R4.5 billion is approved to cover for this shortfall.
The Occupation Specific Dispensation (OSD) for educators concluded in 2009 (ELRC collective agreement 4 of 2009) is also placing additional funding responsibilities on provinces. R3.8 billion is approved to cover for this shortfall.
The agreement reached in the Public Health and Social Development Sectoral Bargaining Council (PHSDSBC) on 7 August 2009 gave effect to the introduction of an OSD for medical doctors, dentists, medical and dental specialists, pharmacists, pharmacy assistants and emergency medical services personnel (paramedics). R646 million is approved to cover for these shortfalls.
An amount of R353.2 million is set aside to cover the shortfall in property rates in selected provinces.
An additional R900 million is approved to scale up both preventative and treatment components on the Comprehensive HIV and Aids programme.
An additional R144 million is approved for the Gautrain Rapid Rail Link conditional grant to protect the real value of spending on this programme.
An additional R213.8 million is approved to fund selected provinces for unforeseeable and unavoidable expenses.
An additional R30 million is approved to fund the final FIFA 2010 World Cup preparation strategies that are to be implemented by the health sector.
R197.6 million of provincial conditional grants not transferred by national departments were approved to be rolled over.
In addition to the national adjustments, provinces increased their main budgets by R3.3 billion. The provincial adjustments consist mainly of unspent conditional grants not surrendered to the National Revenue Fund and other funds surrendered to the respective Provincial Revenue Funds during 2008/09.
In light of the above, in aggregate, provinces increased their main budgets (expenditure side) by R14.1 billion with the bulk to education (R6.5 billion), health (R4.2 billion) and public works, roads and transport (R2.6 billion).
In aggregate, provinces have spent 74.7 per cent or R226.9 billion of their adjusted budgets of R303.8 billion for the period ended 31 December 2009. This represents a spending increase year-on-year of 13.8 per cent or R27.6 billion higher than for the same period last year when provinces had spent R199.3 billion.
Education expenditure totalled R94.7 billion or 75.9 per cent of the R124.8 billion combined education adjusted budgets and remains the largest item on provincial budgets (41.1 per cent). The spending pattern reflects a 15.9 per cent or R13 billion increase over the same period last year.
Health expenditure totalled R65.5 billion or 76 per cent of the R86.2 billion combined health adjusted budgets and is the second largest item (after education) on provincial budgets (28.4 per cent). The spending pattern reflects a 14.7 per cent or R8.4 billion increase compared with the same period in 2008/09.
Social development spending for the first nine months of the 2009/10 financial year is recorded at 70.5 per cent or R6.5 billion of the R9.3 billion social development adjusted budgets.
Personnel expenditure, in aggregate, is at 74.9 per cent or R125.9 billion of the R168 billion personnel adjusted budgets.
In aggregate, provinces spent 67.4 per cent or R16.2 billion of their R24 billion combined capital adjusted budgets. This is 2.8 per cent higher when compared to the same period in 2008/09.
Provincial education departments spent 84 per cent or R4.5 billion of their R5.4 billion education capital adjusted budgets. This is significantly higher by 36.4 per cent or R1.2 billion more than spending over the same period of the previous financial year.
59.7 per cent or R5.2 billion against their R8.6 billion health capital adjusted budgets, which is 7.9 per cent or R379 million more than the same period for 2008/09.
The second highest share of provincial capital adjusted budgets, after health, is for public works, roads and transport departments at 32.2 per cent. The sector spent 68.2 per cent or R5.3 billion against its combined capital adjusted budgets of R7.7 billion.
Provincial own revenue collected thus far is at 74.8 per cent or R7 billion of the total own revenue adjusted budget of R9.3 billion. National government has transferred R179.1 billion of the equitable share and R40.2 billion in conditional grants to provinces, during the first nine months of the 2009/10 financial year.
A more detail analysis of the expenditure outcome as at 31 December 2009 is set out in Annexure A, which also includes a comparative spending analysis for the same period over the 2008/09 financial year.
The budgeted figures for provinces are based on the 2009/10 adjusted estimates of provincial expenditure tabled in the various provincial legislatures during November 2009.
The analysis is based on the statement of receipts and payments, which covers spending for the first nine months of the 2009/10 financial year, as at 31 December 2009.
The information is based on the Section 40(4) PFMA reports signed by each head of provincial department to their provincial treasury by 15 January 2010, and submitted to the National Treasury by 22 January 2010.
Table 1 indicates that provinces have spent 74.7 per cent or R226.9 billion of adjusted budgeted expenditure of R303.8 billion for the first nine months into the current financial year. Spending to date is at a lower level in percentage terms compared to spending against adjusted budgets over the same period in the 2008/09 financial year (76.8 per cent).
However, in nominal terms, spending is 13.8 per cent or R27.6 billion more than for the same period last year when provinces had spent R199.3 billion. Between provinces, spending ranges from the lowest share of 69.9 per cent in Free State and 71.2 per cent in Western Cape, to the highest at 79.4 per cent in Eastern Cape and 76 per cent in KwaZulu-Natal.
Eastern Cape 35 129 367 5 824 515 3 611 552 44 565 434 27 978 839 4 794 047 2 610 100 35 382 986 79.4% 29 522 918 19.
Free State 14 698 595 2 756 186 1 896 273 19 351 054 10 201 941 2 196 561 1 119 937 13 518 439 69.9% 12 597 199 7.
Northern Cape 6 276 702 1 028 838 1 085 167 8 390 707 4 784 538 805 700 496 251 6 086 489 72.5% 5 382 712 13. Spending on social services is recorded at R166.7 billion or 75.7 per cent of the total provincial social services adjusted budgets for the first nine months of 2009/10.
Education adjusted budgets of R124.8 billion comprise 41.1 per cent of total provincial adjusted budgets. Table 3 indicates that education expenditure is at 75.9 per cent or R94.7 billion of the total education budget, an increase of 15.9 per cent or R13 billion compared to the R81.7 billion spent over the same period in 2008/09.
Spending by provinces on education ranges from the lowest rate in Free State at 73 per cent and Western Cape at 74.
80.5 per cent and Northern Cape at 77 per cent.
Eastern Cape 20 529 488 16 533 975 80.5% 46.7% 60.6% 13 494 247 22.
Free State 7 921 932 5 785 315 73.0% 42.8% 58.1% 5 221 107 10.
Spending on goods and services (which includes learner and teacher support material) in education is recorded at 73.5 per cent or R9.4 billion of its R12.8 billion adjusted budget. It comprises approximately 10.3 per cent of total provincial education adjusted budgets.
The bulk of education expenditure is on personnel (76.7 per cent). Current spending on education personnel amounts to 74.5 per cent or R72.7 billion of the education personnel adjusted budgets of R97.6 billion.
Spending by provinces ranges from the lowest in Free State at 72.3 per cent and North West at 72.4 per cent, to the highest in Eastern Cape and Gauteng at 77.6 per cent and 74.9 per cent respectively.
Education capital expenditure is at 84 per cent or R4.5 billion of the R5.4 billion adjusted budget. This is a significant increase of 36.4 per cent or R1.2 billion more than the R3.3 billion spent on capital over the same period last year.
Spending by provinces ranges from the lowest in Mpumalanga at only 63.5 per cent and Western Cape at 69.1 per cent to the highest in Northern Cape at 97.2 per cent and Eastern Cape at 96.7 per cent.
Eastern Cape 867 583 838 580 96.7% 32.1% 5.1% 679 646 23.
Free State 439 603 373 118 84.9% 33.3% 6.4% 291 750 27.
Health adjusted budgets totalling R86.2 billion comprise 28.4 per cent of total provincial adjusted budgets.
Table 7 indicates that health personnel expenditure is R36.9 billion or 77 per cent of the health personnel adjusted budget, an increase of R5.1 billion or 15.9 per cent compared to the R31.8 billion spent over the same period in 2008/09.
Eastern Cape 6 267 262 5 608 713 89.5% 26.6% 57.6% 4 556 914 23.
Free State 3 183 257 2 300 875 72.3% 28.7% 62.0% 2 164 361 6.
Between provinces, with a varying degree of spending, the lowest rate of health capital spending is in Gauteng at 45.6 per cent and Free State at 46.4 per cent with North West and KwaZulu-Natal recording the highest rate of spending at 90.
70.5 per cent respectively.
Social development adjusted budgets of R9.3 billion, comprise 3 per cent of total provincial adjusted budgets.
Provinces registered spending of 70.5 per cent or R6.5 billion of their R9.3 billion adjusted budget. This represents an increase of 6.7 per cent or R411.9 million above the R6.1 billion spent over the same period last year.
Between provinces, there are varying degrees of spending, with the lowest being in North West at only 60.6 per cent and Mpumalanga at 66.1 per cent while the highest are KwaZulu-Natal at 74.6 per cent and Limpopo at 74.5 per cent.
Eastern Cape 1 454 622 1 021 803 70.2% 2.9% 3.7% 982 664 4.
Housing and local government adjusted budgets of R18.1 billion comprise 6 per cent of total provincial adjusted budgets.
Housing and local government spending is at the end of the first nine months of the 2009/10 financial year 78.4 per cent or R14.2 billion of the R18.1 billion adjusted budget (table 10). This represents a significant increase of 22.7 per cent or R2.6 billion more than the R11.6 billion spent over the same period last year.
68.5 per cent and Mpumalanga at 71.
87.8 per cent and Limpopo at 84.5 per cent.
Eastern Cape 2 301 987 1 754 455 76.2% 5.0% 60.6% 1 220 210 43.
Most of the housing and local government expenditure is on the Integrated Housing and Human Settlement Development conditional grant.
Table 11 indicates that provinces spent 83.2 per cent or R10.3 billion of their R12.4 billion adjusted housing conditional grant.
26.1 per cent or R2.1 billion over the same period last year.
Personnel expenditure ("compensation of employees") is at 74.9 per cent or R125.9 billion of the R168 billion adjusted budget. Spending to date is 16.3 per cent or R17.7 billion higher than the R108.3 billion spent over the same period last year.
Free State and both Northern Cape and North West recorded the lowest rate of personnel spending at 71.9 per cent and 72.6 per cent respectively while Eastern Cape and KwaZulu-Natal recorded the highest rates at 79.8 per cent and 75.5 per cent respectively.
67.4 per cent or R16.2 billion of their R24 billion capital adjusted budgets (payments for capital assets). This is higher by 2.8 per cent or R433.5 million more than the R15.7 billion spent over the same period last year.
Table 13 provides capital spending information by province, which indicates low rates of spending in Northern Cape at 45.7 per cent and Gauteng at 57.2 per cent and high rates in North West at 84.7 per cent and KwaZulu-Natal at 75.2 per cent. However, in absolute terms, KwaZulu-Natal has spent the most at R3.9 billion followed by Eastern Cape at R2.6 billion.
The total conditional grant adjusted allocation is R52.2 billion (including Schedule 4 grants and provincial roll-overs) with health making up the bulk at R17 billion.
Table 14 (overleaf) reflects spending on conditional grant adjusted allocations as at 31 December 2009 for all provinces. It includes conditional grant roll-overs from the 2008/09 financial year and other provincial adjustments, but excludes spending on general purpose conditional grants (Schedule 4 grants) like National Tertiary Services, Health Professions Training and Development and the Infrastructure grant to provinces, as reporting against these grants cannot be separated from the provinces' health and capital budgets.
Against the total adjusted allocation of R29.9 billion, this excludes Schedules 4 and 8 grants, the rate of conditional grants spending amounts to 73.8 per cent or R22.1 billion. However, when excluding the Gautrain Rapid Rail Link grant, the conditional grant expenditure amounts to R19.1 billion or 71 per cent against a total adjusted allocation of R26.9 billion.
Specific grants that show low rates of spending include Health Disaster Response (Cholera) (20.2 per cent), Agricultural Disaster Management (35.8 per cent), Overload Control (44.8 per cent), Illema/Letsema Projects (49.5 per cent), Housing Disaster Relief (53 per cent) and Devolution of Property Rate Funds (56.6 per cent).
Total excluding Schedules 4,8 grants & Gautrain 24 413 577 1 694 581 822 384 26 930 542 20 705 340 19 120 758 71.
Table 15 indicates selected conditional grant spending rates as at 31 December 2009. It further indicates that four or more provinces have spent less than 60 per cent of their grants adjusted budgets after the first nine months for the following grants: Community Library Services, HIV and Aids (Life Skills Education), Hospital Revitalisation and Devolution of Property Rate Funds. The total provincial revenue received and collected to date is recorded at 75.3 per cent or R226.3 billion of total adjusted revenue of R300.5 billion.
National government transferred 74.6 per cent or R179.1 billion of the equitable share and 78.7 per cent or R40.2 billion in conditional grants, to provinces after the first nine months of the current financial year.
After the first nine months, provinces have collected 74.8 per cent or R7 billion of the own revenue adjusted budget of R9.3 billion which is 7.4 per cent or R478.9 million more than what was collected by the end of December for the previous financial year.
The collection rate varies from 64 per cent in Free State and 66 per cent in Gauteng, to a high of 93 per cent in Northern Cape and 90.3 per cent in Eastern Cape.