5.1 In compliance with Section 28 of the Division of Revenue Act, 2009, the national Department of Transport stopped the transfer of funds to the value of R60 million following slow spending on the part of KwaZulu-Natal.
5.2 In compliance with Section 29 of the Division of Revenue Act, 2009, the national Department of Transport re-allocated funds to the value of R60 million to North West following demonstrated capacity to spend.
In addition to the national adjustments, provinces increased their main budgets by R3.4 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 for the 2008/09 financial year.
In light of the above, in aggregate, provinces increased their main budgets (expenditure side) by R14.2 billion with the bulk to education (R6.5 billion), health (R4.2 billion) and public works, roads and transport (R2.7 billion).
In aggregate, provinces have spent R305.3 billion or 100.5 per cent of their adjusted budgets of R303.9 billion in 2009/10 (preliminary outcome). This represents a spending increase year-on-year of 15.8 per cent or R41.6 billion over the R263.7 billion spent in 2008/09. Spending varies between provinces with the lowest share of 96.8 per cent in Free State and 97.4 per cent in Northern Cape to the highest at 102.9 per cent in KwaZulu-Natal and 101.9 per cent in Gauteng.
The preliminary outcome shows that in aggregate six provinces have underspent their adjusted budgets by R2.3 billion. This is largely due to capital expenditure and conditional grants which reflect underspending in most provincial departments for 2009/10. However, Eastern Cape, Gauteng and KwaZulu-Natal overspent their adjusted budgets by R3.6 billion in aggregate, largely due to over-expenditure in their education and health departments.
Kw aZulu-Natal 61 906 779 63 713 664 102.9% 20.9% 55 508 791 14.
17.4 per cent or R18.7 billion increase compared with the spending in the 2008/09 financial year.
Health expenditure (preliminary outcome) is at R88.6 billion or 102.8 per cent of the R86.2 billion combined health adjusted budgets and is the second largest item (after education) on provincial adjusted budgets (28.4 per cent). The spending pattern reflects an 18.1 per cent or R13.6 billion increase compared with the spending in the 2008/09 financial year. This is a growth of 1.1 per cent over the previous financial year, exceeding the R21.2 billion spent in 2008/09 by R230.6 million.
Provincial education departments show improvement on capital spending when compared to the previous financial year, which is 13.8 per cent or R648.2 million more than the spending of the previous financial year. They have spent almost R5.
99.8 per cent against their R5.4 billion education capital adjusted budgets.
Provincial health departments spent R6.4 billion or 73.7 per cent of their R8.6 billion health capital adjusted budgets, which is 6.6 per cent or R395.2 million more than the spending over the previous financial year.
The second highest share of provincial capital adjusted budgets, after health, is for public works, roads and transport departments at 32.3 per cent. The sector spent R7.7 billion or 99.7 per cent against its combined capital adjusted budget of R7.8 billion.
Provincial own revenue collected is 3.6 per cent or R336.2 million more than the adjusted forecast of R9.3 billion. National government has transferred R240 billion of the equitable share and R50.6 billion in conditional grants to provinces, for the 2009/10 financial year.
A more detail analysis of the provincial preliminary outcome for the 2009/10 financial year is set out in Annexure A.
The budgeted figures take account of revisions effected in the adjusted estimates of provinces, which were tabled in their provincial legislatures during November 2009. The budgeted figures also take account of revisions effected in a second adjusted estimate for three provinces (Free State, Gauteng and North West), which were tabled in their provincial legislatures during March 2010.
Table 1 indicates that provinces have spent R305.3 billion or 100.5 per cent of adjusted budgeted expenditure of R303.9 billion for the 2009/10 financial year. The preliminary outcome is at a lower level in percentage terms compared to the outcome against adjusted budgets for the 2008/09 financial year (101.6 per cent).
However, in nominal terms, spending is 15.8 per cent or R41.6 billion higher than last year when provinces had spent R263.7 billion. Between provinces, spending ranges from the lowest share of 96.8 per cent in Free State and 97.4 per cent in Northern Cape to the highest at 102.9 per cent in KwaZulu-Natal and 101.9 per cent in Gauteng.
Eastern Cape Free State Gauteng Kw aZulu-Natal Limpopo Mpumalanga Northern Cape North West Western Cape 35 129 367 5 824 515 3 611 552 44 565 434 14 661 653 2 820 136 1 869 264 19 351 053 40 851 352 14 699 502 2 995 817 58 546 671 47 936 780 8 801 578 5 168 421 61 906 779 29 218 363 4 328 482 2 408 030 35 954 875 18 757 231 2 816 727 2 282 086 23 856 044 6 276 702 1 028 838 1 085 167 8 390 707 15 629 632 3 327 796 1 713 351 20 670 779 22 237 774 5 571 722 2 862 608 30 672 104 36 452 876 5 529 975 3 305 139 45 287 990 14 287 868 2 848 846 1 593 377 18 730 091 42 892 248 14 505 967 2 266 054 59 664 269 49 733 421 8 757 151 5 223 092 63 713 664 28 995 544 4 402 196 2 256 476 35 654 216 19 485 092 2 733 309 1 477 115 23 695 516 6 106 654 994 714 1 070 108 8 171 476 15 333 522 3 245 645 1 714 525 20 293 692 22 137 133 5 435 407 2 512 754 30 085 294 101.6% 96.8% 101.9% 102.9% 99.2% 99.3% 97.4% 98.2% 98. This is 17.3 per cent or R33 billion more than the spending in 2008/09.
Spending by provinces on education ranges from the lowest rate in Free State at 98 per cent and North West at 98.7 per cent, to the highest in both Limpopo and Eastern Cape at 103.1 per cent and Mpumalanga at 102.4 per cent. The preliminary outcome on education personnel amounts to R99.2 billion or 101.6 per cent of the education personnel adjusted budgets of R97.5 billion.
Spending by provinces ranges from the lowest in Free State at 98 per cent and North West at 98.5 per cent, to the highest in Eastern Cape and Limpopo at 105.3 per cent and 103.9 per cent respectively.
The preliminary outcome on goods and services (include learner and teacher support material) in education is recorded at 98.4 per cent or R12.6 billion of its R12.8 billion adjusted budget. It comprises approximately 10.2 per cent of total provincial education adjusted budgets.
The preliminary outcome for education capital is at almost R5.4 billion or 99.8 per cent of the R5.4 billion education capital adjusted budget. Capital spending for education between provinces ranges from the lowest in Western Cape at 85 per cent and Mpumalanga at 86.9 per cent to the highest in Northern Cape at 124.5 per cent and Limpopo at 106.1 per cent.
Kw aZulu-Natal 1 239 026 1 312 734 105.9% 25.1% 1 220 490 7.
Health expenditure is at R88.6 billion or 102.8 per cent against the total provincial health adjusted budget of R86.2 billion, representing an increase of 18.1 per cent or R13.6 billion compared to the spending of the previous financial year. The original health budget, in aggregate, has been increased by R4.2 billion during the provincial adjusted estimates process.
Free State and Mpumalanga have spent the lowest share of their health adjusted budgets at 94.3 per cent and 95.
Gauteng recording the highest rate of spending at 111 per cent and 106.9 per cent respectively. This is an increase of 22.5 per cent or R5.9 billion compared to the R26.3 billion outcome in 2008/09.
Capital expenditure in the health sector is R6.4 billion or 73.7 per cent of the R8.6 billion health capital adjusted budget. This is lower than the overall capital expenditure against adjusted budgets of 89.3 per cent.
However, this is higher by 6.6 per cent or R395.2 million more than the R6 billion spent for the same period last year. Between provinces, the lowest rate of spending is in Mpumalanga at 12.7 per cent and Gauteng at 62.5 per cent with KwaZulu-Natal and North West recording the highest rate of spending at 102.6 per cent and 98.7 per cent respectively.
Provinces registered spending of R9.1 billion or 98.2 per cent of their R9.2 billion social development adjusted budgets. This represents an increase of 8.7 per cent or R721.9 million above the R8.3 billion spent in 2008/09.
Eastern Cape 1 454 622 1 434 382 98.6% 3.2% 1 318 792 8.
Between provinces, there are varying degrees of spending with the lowest being in North West at 95.8 per cent and Free State at 97.3 per cent while the highest are KwaZulu-Natal at 99.5 per cent and Limpopo at 98.9 per cent.
Housing and local government adjusted budgets at R18.1 billion comprise 6 per cent of total provincial adjusted budgets.
The preliminary outcome for the housing and local government sector is recorded at R17.7 billion or 97.5 per cent of the housing and local government adjusted budgets. This represents an increase of 16.9 per cent or R2.6 billion more than the R15.1 billion outcome in 2008/09.
95.5 per cent and KwaZulu-Natal at 95.9 per cent while the highest are Northern Cape at 99.6 per cent and Free State at 99.5 per cent.
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 97.4 per cent or R12.1 billion of their R12.4 billion housing conditional grant adjusted budget. These spending figures are higher by 17.1 per cent or R1.8 billion over the outcome of last year.
97.9 per cent and 98 per cent respectively while Eastern Cape and KwaZulu-Natal recorded the highest rates at 107.2 per cent and 102.7 per cent respectively. This is 1.1 per cent or R230.6 million more than the R21.2 billion spent in the 2008/09 financial year.
Table 13 provides capital spending information by province, which indicates low rates of spending in Mpumalanga at 64.7 per cent and Gauteng at 75.6 per cent and high rates in KwaZulu-Natal at 101.1 per cent and North West at 100.1 per cent. However, in absolute terms, KwaZulu-Natal has spent the most at R5.2 billion followed by Eastern Cape at R3.3 billion and Western Cape at R2.5 billion.
Table 14 (overleaf) reflects the preliminary outcome on conditional grant adjusted allocations of the 2009/10 financial year 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.
Total excluding Schedules 4,8 grants & Gautrain 24 413 577 1 694 581 822 384 26 930 542 25 727 094 24 973 074 92.
Against the total adjusted allocation of R29.9 billion, this excludes Schedules 4 and 8 grants, the rate of conditional grants spending amounts to 93.5 per cent or R27.9 billion. However, when excluding the Gautrain Rapid Rail Link grant, the conditional grant expenditure amounts to R25 billion or 92.7 per cent against a total adjusted allocation of R26.9 billion.
Specific grants that show low rates of spending include 2010 World Cup Health Preparation Strategy (16.
(20.6 per cent), Transport Disaster Management (51.
(65.6 per cent), Hospital Revitalisation (76.
(88.7 per cent) and Devolution of Property Rate Funds (79.2 per cent).
Table 15 indicates selected conditional grant spending rates as at 31 March 2010 (preliminary outcome). It further indicates that five or more provinces have spent less than 95 per cent of their grants adjusted budgets at the end of the financial year for the following grants: Community Library Services, HIV and Aids (Life Skills Education), Hospital Revitalisation and Devolution of Property Rate Funds.
Provincial revenue includes adjusted equitable share allocations of R240 billion, conditional grants of R51.1 billion and own revenue of R9.3 billion. The total provincial revenue received and collected at the end of the 2009/10 financial year is recorded at R300.4 billion or 100 per cent of total adjusted revenue of R300.5 billion.
National government transferred R240 billion of the equitable share and R50.6 billion or 99 per cent in conditional grants, to provinces at the end of the 2009/10 financial year.
The preliminary outcome on provincial own revenue suggests that provinces have collected R9.7 billion or 104.4 per cent of their own revenue adjusted budgets of R9.3 billion, which is 3.6 per cent or R336.2 million more than what was collected for the 2008/09 financial year.
The collection rate varies from 92.1 per cent in Gauteng and 98.2 per cent in Free State, to a high of 127.2 per cent in Northern Cape and 115.1 per cent in Limpopo.