E-mail: Kenneth. Brown@treasury.gov.
The first quarter 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 30 July 2008, covers spending for the first three months of the 2008/09 financial year, which ended 30 June 2008. It is available on the treasury website at www.treasury.gov.za.
The information is based on 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 July 2008. 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.
In aggregate, provinces have spent 24.1 per cent or R59.8 billion of their budgets of R248.4 billion for the first quarter ended 30 June 2008.
Social welfare services (social development) spending for the first quarter of the 2008/09 financial year is recorded at 20.2 per cent or R1.7 billion of the R8.3 billion social welfare services budgets.
Total personnel expenditure, in aggregate, is at 25 per cent or R34 billion of the R136.1 billion personnel budget. These figures exclude the recent announced improvements in conditions of service (ICS), which were only effected from 01 July 2008.
In aggregate, provinces spent 18.5 per cent or R4.1 billion of their R22.2 billion combined capital budgets. This is a significant improvement of 32.1 per cent over the previous financial year, exceeding the R3.1 billion spent over the same period in 2007/08 by R1 billion.
Provincial education departments spent 14.2 per cent or R684.2 million of their R4.8 billion education capital budgets. However, this is higher by 10.4 per cent or R64.3 million more than spending over the same period of the previous financial year.
Health provincial departments also improved on capital spending. They have spent 17 per cent or R1.
11.8 per cent or R124.1 million more than the same period for 2007/08.
The greatest share of provincial capital is on the budgets of public works, roads and transport departments at 37.6 per cent. The sector spent 23.9 per cent or R2 billion against its combined capital budget of R8.4 billion. This represents a massive increase of 56 per cent or R716.6 million compared to the same period last year.
Provincial own revenue collected thus far is at 22 per cent or R2 billion of the total own revenue budget of R9.2 billion. National government has transferred R49.8 billion of the equitable share and R10.2 billion in conditional grants to provinces, during the first quarter of the 2008/09 financial year.
A more detail analysis of the expenditure outcome as at 30 June 2008 is set out in Annexure A, which also includes a comparative spending analysis for the same period over the 2007/08 financial year.
The budgeted figures for provinces are based on the 2008/09 provincial budget statements (main budgets) tabled in the various provincial legislatures during February and March 2008.
Table 1 indicates that provinces have spent 24.1 per cent or R59.8 billion of budgeted expenditure for the first quarter into the current financial year. Spending to date is at a higher level in percentage terms compared to spending against budgets over the same period in the 2007/08 financial year (20.8 per cent).
However, in nominal terms, spending is 36.3 per cent or R15.9 billion higher than for the same period last year when provinces had spent R43.9 billion. Between provinces, spending ranges from the lowest share of 21.
21.6 per cent in Limpopo, to the highest at 25.6 per cent in Free State and 25.3 per cent in Gauteng.
Eastern Cape 29 723 932 5 128 765 3 232 033 38 084 730 7 180 923 1 548 731 839 652 9 569 306 25.1% 5 714 831 67.
Free State 11 760 168 2 025 488 1 899 247 15 684 903 3 021 210 559 726 427 487 4 008 423 25.6% 2 840 005 41.
Gauteng 30 969 212 12 235 507 3 466 970 46 671 689 7 595 411 3 802 310 394 082 11 791 803 25.3% 8 120 822 45.
KwaZulu-Natal 38 369 765 7 210 990 5 520 171 51 100 926 9 807 754 1 947 359 1 062 560 12 817 673 25.1% 9 728 605 31.
Limpopo 23 422 020 4 047 232 2 163 636 29 632 888 5 537 632 529 575 335 759 6 402 966 21.6% 5 245 688 22.
Mpumalanga 14 925 239 1 946 775 1 867 605 18 739 619 3 530 893 526 595 404 312 4 461 800 23.8% 3 206 359 39.
Northern Cape 5 207 535 761 084 720 161 6 688 780 1 326 141 207 670 132 265 1 666 076 24.9% 1 225 177 36.
North West 13 063 974 2 502 826 1 370 769 16 937 569 2 940 159 614 811 256 222 3 811 192 22.5% 3 224 892 18.
Western Cape 18 720 441 4 202 298 1 985 004 24 907 743 4 166 979 860 189 260 397 5 287 565 21.2% 4 564 137 15.
Total 186 162 286 40 060 965 22 225 596 248 448 847 45 107 101 10 596 966 4 112 736 59 816 804 24.1% 43 870 515 36.
Provinces have budgeted R181.9 billion for social services, which includes spending on education, health and social development. Spending on social services is recorded at R43.6 billion or 24 per cent of the total provincial social services budgets in 2008/09.
Education 104 198 890 24 797 672 23.8% 41.5% 56.9% 19 389 333 27.
Health 69 439 904 17 125 192 24.7% 28.6% 39.3% 13 174 439 30.
Social Development 8 289 441 1 675 012 20.2% 2.8% 3.8% 1 095 376 52.
Total 181 928 235 43 597 876 24.0% 72.9% 100.0% 33 659 148 29.
Education budgets of R104.2 billion comprise 41.9 per cent of total provincial budgets. Table 3 indicates that education expenditure is at 23.8 per cent or R24.8 billion of the total education budget, an increase of 27.9 per cent or R5.4 billion compared to the R19.4 billion spent over the same period in 2007/08.
22.2 per cent and Limpopo at 22.
29.4 per cent and KwaZulu-Natal at 25.3 per cent.
Eastern Cape 17 810 197 4 144 624 23.3% 43.3% 57.2% 2 880 087 43.
Free State 6 598 569 1 607 078 24.4% 40.1% 55.1% 1 287 128 24.
Gauteng 16 629 082 3 691 388 22.2% 31.3% 52.0% 2 965 273 24.
KwaZulu-Natal 21 389 127 5 417 381 25.3% 42.3% 56.4% 4 178 294 29.
Limpopo 14 221 050 3 169 951 22.3% 49.5% 61.5% 2 662 859 19.
Mpumalanga 8 934 232 2 238 959 25.1% 50.2% 66.8% 1 726 747 29.
Northern Cape 2 601 238 766 001 29.4% 46.0% 60.6% 519 143 47.
North West 6 995 482 1 636 688 23.4% 42.9% 60.5% 1 418 449 15.
Western Cape 9 019 913 2 125 602 23.6% 40.2% 49.8% 1 751 353 21.
Total 104 198 890 24 797 672 23.8% 41.5% 56.9% 19 389 333 27.
Spending on goods and services (mostly learner support material) in education is recorded at 16.2 per cent or R2 billion of its R12.1 billion budget. It comprises approximately 11.6 per cent of total provincial education budgets, which is 0.7 percentage points more than the share in 2007/08.
The bulk of education expenditure is on personnel (78.8 per cent). Current spending on education personnel amounts to 24.6 per cent or R19.5 billion of the education personnel budgets of R79.3 billion.
Spending by provinces ranges from the lowest in Eastern Cape at 22.5 per cent and both Gauteng and North West at 24.3 per cent, to the highest in Northern Cape and Mpumalanga at 26.4 per cent and 26.2 per cent respectively.
Education capital expenditure is at 14.2 per cent or R684.2 million of the R4.8 billion budget. This is 10.4 per cent or R64.3 million more than the R619.9 million spent on capital over the same period last year.
Spending by provinces ranges from the lowest in Gauteng at only 2.3 per cent and Western Cape at 9.4 per cent to the highest in Northern Cape at 48.1 per cent and Mpumalanga at 27.1 per cent.
Eastern Cape 945 279 150 752 15.9% 18.0% 3.6% 3 224 4575.
Free State 443 394 64 536 14.6% 15.1% 4.0% 48 275 33.
Gauteng 635 560 14 787 2.3% 3.8% 0.4% 169 725 -91.
KwaZulu-Natal 1 259 549 124 631 9.9% 11.7% 2.3% 221 652 -43.
Limpopo 666 343 163 655 24.6% 48.7% 5.2% 76 612 113.
Mpumalanga 377 493 102 219 27.1% 25.3% 4.6% 44 274 130.
Northern Cape 42 890 20 609 48.1% 15.6% 2.7% 4 493 358.
North West 252 191 25 063 9.9% 9.8% 1.5% 14 713 70.
Western Cape 191 842 17 984 9.4% 6.9% 0.8% 36 967 -51.
Total 4 814 541 684 236 14.2% 16.6% 2.8% 619 935 10.
Health budgets totalling R69.4 billion comprise 27.9 per cent of total provincial budgets. Table 6 indicates that health expenditure is at 24.7 per cent or R17.1 billion of the total health budget, representing a significant increase of 30 per cent or R4 billion compared to spending over the same period in 2007/08.
Eastern Cape 9 746 015 2 809 381 28.8% 29.4% 38.8% 1 510 071 86.
Free State 4 287 858 1 200 596 28.0% 30.0% 41.2% 848 420 41.
Mpumalanga 4 241 773 971 921 22.9% 21.8% 29.0% 669 047 45.
Northern Cape 1 773 588 426 411 24.0% 25.6% 33.8% 332 074 28.
North West 4 222 549 964 409 22.8% 25.3% 35.7% 735 923 31.
Western Cape 8 641 973 1 909 897 22.1% 36.1% 44.8% 1 615 347 18.
Total 69 439 904 17 125 192 24.7% 28.6% 39.3% 13 174 439 30.
21.8 per cent and 22.1 per cent respectively. The highest shares are recorded in Eastern Cape at 28.8 per cent and Free State at 28 per cent.
Table 7 indicates that health personnel expenditure is R10.2 billion or 26.6 per cent of the health personnel budget, a significant increase of R2.7 billion or 35 per cent compared to the R7.6 billion spent over the same period in 2007/08. This can be attributed to the implementation of the Occupational Specific Dispensation (OSD) for Nurses.
Eastern Cape 5 480 717 1 534 432 28.0% 28.6% 54.6% 1 006 003 52.
Free State 2 599 600 691 333 26.6% 30.1% 57.6% 514 280 34.
Gauteng 6 987 921 1 888 990 27.0% 34.8% 62.3% 1 401 571 34.
KwaZulu-Natal 8 707 238 2 435 258 28.0% 33.7% 62.0% 1 865 939 30.
Limpopo 4 357 296 1 096 605 25.2% 24.0% 58.2% 858 027 27.
Mpumalanga 2 307 646 602 937 26.1% 22.1% 62.0% 435 789 38.
Northern Cape 915 369 214 481 23.4% 23.8% 50.3% 177 783 20.
North West 2 268 883 597 741 26.3% 25.7% 62.0% 433 156 38.
Western Cape 4 771 834 1 154 337 24.2% 36.5% 60.4% 872 602 32.
Total 38 396 504 10 216 114 26.6% 30.0% 59.7% 7 565 150 35.
Eastern Cape 1 094 183 232 716 21.3% 27.7% 8.3% 59 746 289.
Free State 399 688 107 945 27.0% 25.3% 9.0% 66 147 63.
Gauteng 1 405 043 247 732 17.6% 62.9% 8.2% 280 829 -11.
Total 6 954 880 1 179 237 17.0% 28.7% 6.9% 1 055 121 11.
Between provinces, with a varying degree of spending, the lowest rate of health capital spending is in Northern Cape at 11.5 per cent and Mpumalanga at 12.3 per cent with Free State and North West recording the highest rate of spending at 27 per cent and 22 per cent respectively.
Social welfare services budgets, at R8.3 billion, comprise 3.3 per cent of total provincial budgets.
Provinces registered spending of 20.2 per cent or R1.7 billion of their R8.3 billion budget. This represents a significant increase of 52.9 per cent or R579.6 million above the R1.1 billion spent over the same period last year.
Between provinces, there are varying degrees of spending with the lowest being in Limpopo at only 14.2 per cent and North West at 16.9 per cent while the highest are KwaZulu-Natal at 22 per cent and both Mpumalanga and Gauteng at 21.4 per cent.
Western Cape 1 088 065 228 609 21.0% 4.3% 5.4% 183 754 24.
Total 8 289 441 1 675 012 20.2% 2.8% 3.8% 1 095 376 52.
Housing and local government budgets at R14.2 billion comprise 5.7 per cent of total provincial budgets.
Housing and local government spending at the end of the first quarter is at 18.6 per cent or R2.6 billion of the R14.2 billion budget (table 10). This represents a significant increase of 47.2 per cent or R847.7 million more than the R1.8 billion spent over the same period last year.
33.4 per cent and Mpumalanga at 26.2 per cent.
Eastern Cape 1 968 111 346 265 17.6% 3.6% 55.5% 134 381 157.
Free State 1 022 024 340 927 33.4% 8.5% 83.0% 106 236 220.
Gauteng 3 325 991 610 896 18.4% 5.2% 64.6% 517 782 18.
KwaZulu-Natal 2 827 509 388 023 13.7% 3.0% 57.2% 315 543 23.
Limpopo 1 158 967 212 515 18.3% 3.3% 66.4% 101 907 108.
Mpumalanga 982 049 257 149 26.2% 5.8% 70.7% 137 245 87.
Northern Cape 340 088 59 781 17.6% 3.6% 41.4% 73 369 -18.
North West 1 144 745 210 111 18.4% 5.5% 82.5% 204 777 2.
Western Cape 1 451 041 217 131 15.0% 4.1% 73.2% 203 857 6.
Total 14 220 525 2 642 798 18.6% 4.4% 67.0% 1 795 097 47.
Personnel expenditure ("compensation of employees") is at 25 per cent or R34 billion of the R136.1 billion budget. Spending to date is 24.6 per cent or R6.7 billion higher than the R27.3 billion spent over the same period last year.
24.1 per cent and 24.3 per cent respectively while KwaZulu-Natal, Mpumalanga and Free State all recorded the highest rates at 25.5 per cent.
By the end of the first quarter, provinces have spent 18.5 per cent or R4.1 billion of their R22.2 billion capital budgets ("payments for capital assets").
(32.1 per cent or R1 billion) than the R3.1 billion spent over the same period last year.
KwaZulu-Natal 5 520 171 1 062 560 19.2% 8.3% 25.8% 928 454 14.
Limpopo 2 163 636 335 759 15.5% 5.2% 8.2% 247 348 35.
Table 13 provides capital spending information by province, which indicates low rates of spending in Gauteng at 11.4 per cent and Western Cape at 13.1 per cent and high rates in Eastern Cape at 26 per cent and Free State at 22.5 per cent. However, in absolute terms, KwaZulu-Natal has spent the most at R1.1 billion followed by Eastern Cape at R839.7 million and Free State at R427.5 million.
The biggest capital budgets in provinces are in public works, roads and transport departments at 37.6 per cent or R8.4 billion of the total provincial capital budget of R22.2 billion. Spending by these departments is at 23.9 per cent or R2 billion which is a massive 56 per cent or R716.6 million more than the R1.3 billion spent last year over the same period.
Between provinces, the lowest rate of spending is recorded in Limpopo at 4.6 per cent and Gauteng at 9.6 per cent, while Eastern Cape and Mpumalanga recorded the highest rates of spending at 38.6 per cent and 28.6 per cent respectively.
The total conditional grant allocation is R38.7 billion (including Schedule 4 grants) with health making up the bulk at R13.7 billion.
Table 15 (overleaf) reflects spending on conditional grant allocations as at 30 June 2008 for all provinces. It excludes expected conditional grant roll-overs from the 2007/08 financial year and 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. However, when excluding the Gautrain Rapid Rail Link grant, the conditional grant expenditure amounts to R3.4 billion or 17.1 per cent against a total allocation of R19.9 billion.
(5.9 per cent), Land Care Programme (6.
(9.8 per cent) and Mass Sport and Recreation Participation Programme (10.1 per cent).
Total excluding Schedule 4 grants and Gautrain exp 38 699 359 10 210 272 3 397 148 17.
Total excluding Schedule 4 grants expenditure 38 699 359 10 210 272 5 811 922 25.
Spending on the Further Education and Training College Sector Recapitalisation grant is at 47.5 per cent or R378 million and reflects actual transfers from the provincial education departments to the FET colleges.
Table 16 indicates the actual amounts transferred by provincial education departments to colleges and amounts spent by colleges, as provided by the national Department of Education. FET colleges' expenditure is at 25.3 per cent or R100.4 million of the R397.5 million received from the provincial education departments.
Table 17 indicates selected conditional grant spending rates as at 30 June 2008. It further indicates that five or more provinces have spent less than 10 per cent of their grants budgets after the first quarter for the following grants: Land Care Programme, Community Library Services, HIV and Aids (Life Skills Education) and Mass Sport and Recreation Participation Programme.
The table also indicates the number of provinces spending at slightly higher levels between 10 and 20 per cent and greater than 20 per cent of their conditional grant budgets.
Although the conditional grant rate of spending is encouraging and reflects an improvement over previous financial years, overall conditional grants spending still lies below the total provincial spending average of 24.1 per cent.
Percentages represent actual expenditure of main budget as published in the Division of Revenue Act, 2008 (Act No.2 of 2008).
26.4 per cent or R10.2 billion in conditional grants, to provinces after the first quarter of the current financial year.
After the first quarter, provinces have collected 22 per cent or R2 billion of the budgeted own revenue of R9.2 billion which is closely matched or R0.5 million more than what was collected by the end of June for the previous financial year.
The collection rate varies from 18.3 per cent in Limpopo and 20.1 per cent in KwaZulu-Natal, to a high of 31.6 per cent in North West and 26.3 per cent in Eastern Cape.
Eastern Cape 927 462 243 491 26.3% 12.1% 202 005 20.
Free State 556 366 134 113 24.1% 6.6% 126 002 6.
Gauteng 2 818 890 575 250 20.4% 28.5% 515 671 11.
KwaZulu-Natal 1 591 724 320 657 20.1% 15.9% 359 316 -10.
Limpopo 530 062 97 052 18.3% 4.8% 57 649 68.
Mpumalanga 359 727 75 707 21.0% 3.8% 74 230 2.