Published by the National Treasury in terms of Section 32 of the Public Finance Management Act (PFMA), this provincial budget statement of receipts and payments covers spending for the first nine months (April to December 2010) of the 2010/11 financial year. The statement is available on the treasury website at www.treasury.gov.za.
The information comes from the Section 40(4) PFMA reports submitted by heads of provincial departments to provincial treasuries, who, in turn, submitted the information to the National Treasury. Queries on spending or budget numbers should therefore, in the first instance, be referred to the head of the relevant provincial department, and in the second instance to the head of the relevant provincial treasury. Queries on conditional grants may be referred to the head of the administering national department.
The budgeted figures in the third quarter publication take account of revisions effected in the 2010 Adjusted Estimates of Provincial Expenditure, which were presented to the provincial legislatures during November and December 2010. It includes R5.3 billion appropriated by national government to provinces (R4.2 billion to the provincial equitable share and R1.1 billion to conditional grants) through the Adjustments Appropriation Act and Division of Revenue Amendment Act.
Higher than budgeted personnel remuneration increases, including the increased housing allowance.
Over and above the additional transfers, provinces increased their main budgets by R3.8 billion. The increases consist mainly of unspent conditional grants not surrendered to the National Revenue Fund and other funds surrendered to the respective Provincial Revenue Funds during 2009/10.
In light of the above, in aggregate, provinces increased their main budgets (expenditure side) by R9.1 billion with the bulk going to education (R3 billion), health (R2.3 billion) and public works, roads and transport (R1.8 billion).
In aggregate, provinces spent R242.9 billion, or 71.7 per cent, of their adjusted budgets of R338.9 billion for the period ended 31 December 2010. This represents a spending increase of 7.1 per cent or R16.1 billion compared to the same period last year when provinces had spent R226.8 billion.
Education expenditure totalled R104.5 billion, or 74.4 per cent of the R140.4 billion combined education adjusted budgets, and remains the largest item on provincial budgets (41.4 per cent). This expenditure is an increase of 10.3 per cent or R9.7 billion on the same period last year.
Health expenditure totalled R72.2 billion, or 71.7 per cent, of the R100.
(29.7 per cent). This represents an increase of 10.3 per cent or R6.8 billion on the same period last year.
Social development spending is R7 billion or 66.1 per cent of the R10.6 billion social development adjusted budgets.
Personnel expenditure in aggregate is at R145.2 billion, or 75.8 per cent of the budgeted R191.5 billion.
In aggregate, provinces spent R14.2 billion or 55.9 per cent of their R25.4 billion combined capital adjusted budgets. This is a decline of 12.8 per cent when compared to the same period in 2009/10.
Provincial education departments spent R3.6 billion or 57.4 per cent of the budgeted R6.2 billion for capital expenditure. This is R1 billion or 21.1 per cent less than what was spent in the previous financial year.
Provincial health departments spent R4.6 billion or 50.7 per cent of the budgeted R9.1 billion for capital expenditure, which is R550.2 million or 10.7 per cent, less than the same period for 2009/10.
After health, the second biggest share of provincial capital adjusted budgets, is for public works, roads and transport departments (31 per cent), which spent R5.
64.9 per cent of the total capital budget of R7.9 billion.
Provincial own revenue collected thus far is at R7.3 billion or 76.6 per cent of the budgeted own revenue of R9.6 billion. After nine months, national government had transferred R198.8 billion of the equitable share and R46.7 billion of conditional grants to provinces.
A more detailed analysis of the expenditure outcome as at 31 December 2010 is set out in Annexure A, which also includes a comparative analysis of spending for the same period over the 2009/10 financial year.
The budgeted figures for provinces are based on the 2010/11 adjusted estimates of provincial revenue and expenditure documents (adjusted budgets) tabled in the provincial legislatures during November and December 2010.
Table 1 indicates that nine months into the current financial year provinces had spent R242.9 billion, or 71.7 per cent, of the adjusted budgeted expenditure of R338.9 billion. Spending against adjusted budgets is lower in percentage terms compared to the same period for the 2009/10 financial year when it stood at 74.6 per cent. However, spending in nominal terms is 7.1 per cent, or R16.1 billion, higher than last year, when provinces spent R226.8 billion.
Among provinces, spending is the lowest in KwaZulu-Natal (68.7 per cent of the adjusted budget) and the Free State (69.4 per cent) and highest in Gauteng at 74.9 per cent and the Eastern Cape at 74.4 per cent.
Total 261 992 257 51 162 845 25 397 373 339 714 338 892 189 191 448 265 37 001 764 14 205 705 210 264 242 865 998 71.7% 226 815 686 7.
Spending on social services is recorded at R183.7 billion, or 73 per cent of the total provincial social services adjusted budgets for the first nine months of 2010/11.
Education adjusted budgets of R140.4 billion comprise 41.4 per cent of total provincial adjusted budgets. Table 3 indicates that education expenditure is at 74.4 per cent or R104.5 billion of the total education adjusted budget, an increase of 10.3 per cent, or R9.7 billion, on the R94.7 billion spent over the same period in 2009/10.
Spending by provinces on education ranges from the lowest rates of 70.9 per cent in the Free State and 73.
76.6 per cent, followed by Limpopo at 75.3 per cent. It comprises approximately 10.7 per cent of total provincial education adjusted budgets.
Spending by provinces on personnel expenditure in education ranges from 73.1 per cent in the Western Cape, to 79.3 per cent in the Eastern Cape.
Education capital expenditure is at R3.6 billion, or 57.4 per cent, of the R6.2 billion adjusted budget. This is significantly lower than the spending over the same period of the previous financial year.
Spending on education capital expenditure is lowest in the Free State at 28.8 per cent and highest in Gauteng at 107.6 per cent.
Health adjusted budgets totalling R100.7 billion comprise 29.7 per cent of total provincial adjusted budgets.
Table 6 indicates that, at R72.2 billion or 71.7 per cent of the total health adjusted budget, health expenditure increased by 10.3 per cent, or R6.8 billion, on the same period in 2009/10.
The Free State and KwaZulu-Natal provinces spent the lowest share of their health adjusted budgets at 67.6 per cent and 68.5 per cent respectively. The highest shares are recorded by Gauteng at 75.8 per cent and the Eastern Cape at 74.2 per cent.
Table 7 indicates that health personnel expenditure is R43.6 billion, or 75.8 per cent, of the health personnel adjusted budget, an increase of R6.7 billion, or 18.1 per cent, on the R36.9 billion spent over the same period in 2009/10.
Spending on non-personnel non-capital items, including medicines, drugs and other current expenditure, is at R24.1 billion, or 70.5 per cent, of the R34.2 billion adjusted budget.
Spending by provinces varied, with the lowest rate of health capital expenditure being in the Free State at 33.3 per cent, Gauteng at 42.8 per cent, and the highest being North West and the Western Cape at 77.7 per cent and 62.5 per cent respectively.
At R10.6 billion, the social development adjusted budget comprises 3.1 per cent of total provincial adjusted budgets.
Provinces registered spending of R7 billion, or 66.1 per cent, of the total R10.6 billion adjusted budget. This represents an increase of R461.4 million, or 7.1 per cent, on the R6.5 billion spent over the same period last year.
There are varying degrees of spending among provinces, the lowest being KwaZulu-Natal at 58.9 per cent and Gauteng at 60.9 per cent while the highest are the Northern Cape at 73.3 per cent and Eastern Cape at 72.5 per cent.
Eastern Cape 1 566 136 1 135 595 72.5% 3.1% 3.9% 1 021 803 11.
Human settlements and local government adjusted budgets, at R21.
6.3 per cent of total provincial adjusted budgets.
Eastern Cape 2 646 448 1 834 855 69.3% 5.0% 64.0% 1 754 454 4.
Free State 1 788 436 1 074 437 60.1% 7.0% 70.4% 1 062 803 1.
Spending by human settlements and local government was R14.1 billion, or 65.8 per cent, of the R21.4 billion adjusted budget. This represents a decrease of R123.4 million, or 0.9 per cent, on the R14.2 billion spent over the same period last year.
56.7 per cent and the Free State at 60.
Northern Cape at 87.1 per cent and Gauteng at 72.7 per cent.
Most of the human settlements and local government expenditure is from the Human Settlements Development conditional grant. Table 11 indicates that provinces spent R10.2 billion, or 66.8 per cent, of the R15.2 billion Human Settlements Development grant adjusted budget. These spending figures are R63.7 million or 0.6 per cent lower than the same period last year.
Personnel expenditure (compensation of employees) for the first nine months of the 2010/11 financial year is at R145.2 billion, or 75.8 per cent, of the R191.5 billion adjusted budget.
72.6 per cent and 74 per cent respectively, while Gauteng and the Eastern Cape recorded the highest at 78.4 per cent and 77.8 per cent respectively.
By the end of December 2010, provinces had spent R14.2 billion or 55.9 per cent of the R25.4 billion capital adjusted budget (payments for capital assets).
12.8 per cent compared to the same period in 2009/10.
Table 13 provides capital spending information by province and shows low rates of spending in the Eastern Cape at 49 per cent and Gauteng at 51.6 per cent, and high rates in North West at 64 per cent and the Western Cape at 60 per cent. However, in absolute terms, KwaZulu-Natal spent the most, with total spending of R3.8 billion followed by the Western Cape at R1.8 billion and the Eastern Cape at R1.7 billion.
Provincial education departments spent R3.6 billion, or 57.4 per cent, of their R6.2 billion education capital adjusted budgets. This is R1 billion, or 21.1 per cent, less than spending over the same period in the previous financial year.
Provincial health departments spent R4.6 billion, or 50.7 per cent, of their R9.1 billion health capital adjusted budgets, which is R550.2 million or 10.7 per cent less than the same period for 2009/10.
At 31 per cent, public works, roads and transport departments has, after health, the second highest share of provincial capital adjusted budgets. The sector spent R5.1 billion or 64.9 per cent against its combined capital adjusted budgets of R7.9 billion.
The total conditional grant adjusted allocation is R64.5 billion (including conditional grant roll-overs from the 2009/10 financial year and other provincial adjustments), with health making up the bulk at R20.4 billion.
Total excluding Schedules 4,8 grants & Gautrain 32 038 734 1 088 433 1 083 794 34 210 961 25 608 794 21 575 666 63.
Table 14 reflects spending by all provinces on conditional grant adjusted allocations as at 31 December 2010. It includes conditional grant roll-overs from the 2009/10 financial year and other provincial adjustments, but excludes spending on Schedule 4 and Schedule 8 grants. Schedule 4 grants specify allocations to provinces to supplement the funding of programmes or functions funded from provincial budgets. The Expanded Public Works Programme (EPWP) Incentive grant for the infrastructure sector (Schedule 8 grant) specifies incentives to provinces to meet targets for priority government programmes.
Against the total adjusted allocation of R34.6 billion (which excludes Schedules 4 and 8 grants), the rate of conditional grants spending amounts to R22 billion, or 63.5 per cent. Excluding the Gautrain Rapid Rail Link grant, the conditional grant expenditure amounts to R21.6 billion, or 63.1 per cent, of the total adjusted allocation of R34.2 billion.
Agricultural Disaster Management (12.
Technical Secondary Schools Recapitalisation (18.
Expanded Public Works Programme for the Social Sector (41.
Transport Disaster Management (46.
Devolution of Property Rate Funds (49.
Community Library Services (53.
HIV and Aids (Life Skills Education) (55.4 per cent).
Table 15 indicates selected conditional grant spending rates as at 31 December 2010.
It further indicates that after nine months, five or more provinces had spent less than 60 per cent of the following grants: Land Care Programme, Community Library Services, HIV and Aids (Life Skills Education) and Hospital Revitalisation.
The table also indicates the number of provinces where spending of conditional grant adjusted budgets is at between 60 and 75 per cent, and where it is greater than 75 per cent.
Percentages represent actual expenditure against total available.
Provincial revenue includes adjusted equitable share allocations of R265.1 billion, conditional grants of R63 billion and own revenue of R9.6 billion. The total provincial revenue received and collected to date is recorded at R252.8 billion, or 74.8 per cent, of total adjusted revenue of R337.7 billion.
Within the first nine months of the current financial year, national government transferred R198.8 billion or 75 per cent of the equitable share to provinces, and R46.
74.1 per cent in conditional grants to provinces..
After nine months, provinces have collected R7.3 billion or 76.6 per cent of the budgeted own revenue of R9.6 billion, which is R408.1 million, or 5.9 per cent, more than what was collected by the end of December for the previous financial year.
The collection rate varies from 65.8 per cent in North West and 67.9 per cent in Mpumalanga, to a high of 95 per cent in the Northern Cape and 81.7 per cent in KwaZulu-Natal.