2020/21 QUARTER 3 SPENDING OUTCOMES
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2020/21 QUARTER 3 SPENDING OUTCOMES 1 STANDING COMMITTEE ON APPROPRIATIONS Presenter: Dr Mampho Modise| DDG: Public Finance, National Treasury | February 2021
Transcript of 2020/21 QUARTER 3 SPENDING OUTCOMES
2020/21 QUARTER 3SPENDING OUTCOMES
1
STANDING COMMITTEE ON APPROPRIATIONS
Presenter: Dr Mampho Modise| DDG: Public Finance, National Treasury | February 2021
CONTENTS
1. Summary of spending
2. Spending outcome by Chief Directorate grouping:
• Administrative Services
• Education and Related departments
• Health and Social Development
• Protection Services
• Economic Services
• Urban Development and Infrastructure
2
SUMMARY OF SPENDING
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The preliminary data for the third quarter of 2020/21 shows spending of R730.9 billion, which is lower byR767.1 million or 0.1 per cent against the projected expenditure of R731.6 billion
• Good and services contributed to largest proportion of the lower than projected underspending(R4.3 billion)
• Compensation of employees (R2.0 billion)
• Payment for capital assets (R1.9 billion)
• While transfer and subsidies, payment for financial assets and interest and rent on land spent higher thanprojected by R3.9 billion, R3.4 billion and R5.7 million, respectively
• COVID-19 expenditure amounted to R24.5 billion at the end of the third quarter
SUMMARY OF SPENDING
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The following departments recorded the most significant higher than projected expenditure for the thirdquarter of the 2020/21 financial year
Cooperative Governance: Transfer and subsidies contributes to majority of higher than projected spending.This is mainly due to withholding of the transfer payment of the Local Government Equitable Share, inSeptember, to ensure recipient municipalities comply with the requirements set out in the Division ofRevenue Act. These funds were then only transferred in the third quarter (December) of the financial year
Public Enterprises: The higher than projected spending was mainly under payment to financial assets due todisbursement of funds to Eskom and South African Airways for payment of guaranteed debt andimplementation of the business rescue plan, respectively
Social Development: Transfer and subsidies mainly contributed to the higher than projected expenditure.This was due to a higher number of beneficiaries eligible for the R350 special COVID-19 social relief ofdistress grant that came into effect from May 2020
SUMMARY OF SPENDING
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National treasury: The higher than projected spending was mainly attributed to the payment for financialassets for South Africa’s sixth capital contribution instalment to the New Development Bank due to theexchange rate fluctuations.
Science and Innovation: The higher than projected spending is mainly under transfers and subsidies.Payments under the Strategic Science platform were initially scheduled for the second quarter but due toissues with finalisation of contracts these payments were only made in the third quarter. The departmentreceived approval to increase this transfer in November, which was too late to revise their projections.
SUMMARY OF SPENDING
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The following departments incurred the most significant lower than projected expenditure for the thirdquarter of the 2020/21 financial year
Police (R2,5 billion):
• vacant funded posts & the non-implementation of the 2020/21 cost-of-living adjustments
• utilisation of virtual platforms for meetings which reduces interprovincial travel costs
• delays in receiving invoices from the Department of Public Works and Infrastructure for officeaccommodation.
Transport (R2 billion):
• withholding of scheduled capital transfer payments to the Passenger Rail Agency of South Africa pendingthe approval of the second adjustments budget
• withholding of the transfer payment of the public transport network grant to Mangaung and Rustenburgmunicipalities as a result of non-compliance
• revision of the grant payment schedule for Johannesburg and CT municipalities
• lower than expected demand on the taxi recapitalisation programme.
Defence (R1,6 billion):
• late verification of invoices received from the Department of Public Works and Infrastructure resulting innon-payment
• delayed procurement plans due to COVID 19
SUMMARY OF SPENDING
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Human Settlements (R1,1 billion):
• amendments to the payment schedules
• withholding of the Human Settlements Development Grant transfers for the North West in October andfor Eastern Cape and Free State in November due to non-compliance with the requirements prescribed bythe Division of Revenue Act
• the Institutional Investment Grant transfer processed in November was lower than anticipated anderroneously classified, while the operational transfer scheduled for December was not transferred as theentity did not adhere to the department’s internal financial management process requirements
• transfers not made on the National Housing Finance Corporation’s: Finance Linked Individual SubsidyProgramme as the entity did not adhere to the department’s internal financial management processrequirements.
Agriculture, Land Reform and Rural Development (R1,0 billion):
• vacant posts that have not been filled and delay in payment to beneficiaries of the Presidential StimulusInitiative
• delays in the implementation of land tenure reform projects and finalisation of land claims due to COVID-19 travel restrictions
• delays in the processing of the Comprehensive Agricultural Support Programme conditional grants toprovinces
SUMMARY OF SPENDING
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Basic Education (R743 million):
• slowing down of construction activity due to lockdown measures
• because infrastructure spending is only authorised after verification of completed work, which has beenmore difficult under Covid-19 related restrictions.
Justice and Constitutional Development (R677 million):
• vacant posts (natural attrition)
• delays in the receipt of invoices for contractual payments and office accommodation from the StateInformation Technology Agency and Department of Public Works and Infrastructure
Public Works and Infrastructure (R599 million):
• delays in the filling of vacant positions
• deceleration of departmental activities as a result of the nation-wide lockdown
• non-transfer of funds to the Independent Development Trust. The Acting Director-General has since thensigned for the approval to transfer these funds and payment will be made before the end of the financialyear.
SUMMARY OF SPENDING
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Personnel spending and vacancy rates
Police:
• The high vacancy rate and lower than projected expenditure was mainly due to the delayed enlistment ofnew student police officers and/or trainees which was supposed to take place in April 2020 but wasdelayed due to the national lockdown
• The filling of vacant posts in the remaining months of the financial year will have to be done in line withthe department’s revised compensation of employees ceiling following the in-year reductions and non-implementation of the 2018 public sector wage agreement.
Higher Education and Training:
• Lower than the projected expenditure is mainly because claims from Technical and Vocational Educationand Training (TVET) and Community and Education Training (CET) college examiners and moderators werenot received as anticipated.
Justice and Constitutional Development:
• A total of 20 709 posts were filled against the Human Resource Budget Plan target of 20 985. Personnelnumbers are therefore below the Human Resource Budget Plan headcount target by 276 post. Thesevacant posts resulted in the department spending lower than projected.
ADMINISTRATIVE SERVICES
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0,3 0,6
6,14,7
0,2
27,2
0,3 0,3 0,2
5,6
1,60,4 0,6
6,34,9
0,2
26,3
0,3 0,3 0,2
6,2
1,7
0,0
5,0
10,0
15,0
20,0
25,0
30,0
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Q3 Actual expenditure
Q3 Projected expenditure
ADMINISTRATIVE SERVICES
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R million
Main
Appropriation
Adjusted
Appropriation
Available
Budget
Q3 Actual
expenditure
Expenditure
as % of
Available
Budget
Q3 Projected
expenditure
Variance from
projected
expenditure
% variance
from
projected
expenditure
COVID-19
Spending
Departments
1 The Presidency 611.6 572.9 572.9 331.4 57.8% 379.4 48.0 12.7% 1.0
4 Government
Communication and
Information System
720.5 725.1 725.1 559.4 77.1% 569.1 9.7 1.7% 53.2
5 Home Affairs 9 029.6 8 787.4 8 787.4 6 050.4 68.9% 6 306.9 256.5 4.1% 22.3
6 International Relations
and Cooperation
6 850.2 6 315.0 6 315.0 4 704.3 74.5% 4 886.8 182.5 3.7% 1.2
7 National School of
Government
206.6 227.4 227.4 163.8 72.0% 159.7 -4.1 -2.5% 0.3
8 National Treasury 33 123.2 34 525.7 34 525.7 27 112.2 78.5% 26 268.9 -843.3 -3.2% 1.6
9 Planning, Monitoring
and Evaluation
500.0 400.0 400.0 272.3 68.1% 277.3 4.9 1.8% 0.2
11 Public Service and
Administration
565.7 468.9 468.9 314.0 67.0% 327.0 13.0 4.0% 1.0
12 Public Service
Commission
297.6 273.8 273.8 191.0 69.8% 199.0 8.0 4.0% 1.0
13 Public Works and
Infrastructure
8 070.8 7 724.4 7 724.4 5 583.1 72.3% 6 182.2 599.1 9.7% 0.7
14 Statistics South Africa 3 452.2 3 131.6 3 131.6 1 649.8 52.7% 1 724.5 74.7 4.3% 5.0
Total 63 428.0 63 152.1 63 152.1 46 931.8 74.3% 47 281.0 349.1 0.7% 87.5
Vote 1: Presidency
• Lower than projected spending by R48.4 million mainly on goods and services and compensation ofemployees due to less economic activity (e.g. travelling), non-implementation of salary increases and non-payment of performance incentives.
Vote 4: Government Communication and Information System
• Lower than projected spending by R9.7 million mainly due to funded vacancies, suspended travel due tothe COVID-19 pandemic, and delays in the procurement of machinery and equipment.
Vote 5: Home Affairs
• Lower than projected spending by R258.5 million mainly on goods and services and compensation ofemployees as a result of lower than projected spending under goods and services in the InformationSystem Modernisation project and also under spending under compensation of employees due cost-of-living adjustments not implanted in the current financial year. Covid-19 lockdown also slowed downoverall expenditure and the slow recovery of the country’s economy however it is projected that spendingwill gain momentum in the final quarter of the financial year.
HIGHLIGHTS
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Vote 6: International Relations and Cooperation
• The lower than projected expenditure by R182.5 million is mainly attributed to: (a) low spending on goodsand services mainly as a result of the cancellation of planned travel (in programmes 2 and 4) in line withthe requirements of the COVID-19 pandemic lockdown regulations, (b) the failure of the Information andCommunication Technology (ICT) systems (in programmes 2 and 3) to timeously interface with the BasicAccounting System (BAS) and report on spending by 29 missions for the month of December 2020, (c) lowexpenditure on the transfers and subsidies’ budget (to departmental agencies and accounts andinternational organisations) in Programme 5, specifically for the South African Development PartnershipAgency (SADPA), due to the non-operationalisation (or delayed operationalistion) of the plannedestablishment of SADPA (as the Partnership Fund for Development bill has not yet repealed the AfricanRenaissance and International Cooperation Fund Act), and (c) underspending on the budget for paymentfor capital assets in Programme 1 owing to delays in the finalisation of the Information andCommunication Technology strategy and implementation plan.
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HIGHLIGHTS
Vote 7: National School of Government
• Higher than projected spending by R4.1 million is mainly due to the NSG’s inability to generate sufficientown revenue from face to face training as a result of the Covid-19 lockdown restrictions.
Vote 8: National Treasury
• Higher than projected expenditure by R843.3 million mainly attributed to higher than anticipated transferpayments to the New Development Bank owing to foreign exchanges differences. The higher thananticipated spending was also realised under transfers to the South African Revenue Service, FinancialIntelligence Centre and the State Security Agency. Transfers. Although the department transferred morefunds that it had projected to these entities as at the end of the third quarter, the expenditure on theaffected line items is still within the total allocated budget for 2020/21.
Vote 9: Planning, Monitoring and Evaluation
• Lower than projected expenditure by R4.9 million was mostly due to outstanding invoices from theDepartment of Public Works and Infrastructure for office accommodation, and suspension of training andtravel due to the COVID-19 pandemic.
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HIGHLIGHTS
Vote 11: Public Service and Administration
• Lower than projected spending by R13.0 million is mainly evident on compensation of employees andgoods and services due to funded vacant posts and travel restrictions imposed by the Covid-19 pandemiclockdown, respectively.
Vote 12: Public Service Commission
• Lower than projected spending by R8.0 million on compensation of employees and goods and servicesmainly due to vacant posts and outstanding invoices from services providers due to Covid-19 lockdownrestrictions.
Vote 13: Public Works and Infrastructure
• The Department of Public Works and Infrastructure spent R5.583 billion or 72.3 per cent of its 2020/21adjusted budget allocation of R7.724 billion as at the end of December 2020. The R5.583 billion in actualspending is R599 million or 9.7 per cent lower than the projected expenditure of R6.182 billion for thisperiod. The lower than projected spending is attributed to: (a) the low spending on the compensation ofemployees’ budget due to delays in the filling of vacant positions, (b) the low spending on the goods andservices’ budget (across various items) due to the deceleration of departmental activities attending theCovid-19 pandemic related lockdown, and (c) low spending on transfers and subsidies, specifically on theNon-State Sector Programme, due to the non-transfer of funds to the Independent Development Trust forthe implementation of the programme.
HIGHLIGHTS
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Vote 14: Statistics South Africa
• Lower than the projected expenditure by R74.7 or 4.3 per cent of R97.9 million mainly due to thetemporary suspension of face to face household data collection, including the Census pilot, due to theCOVID-19 pandemic, and funded vacancies.
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HIGHLIGHTS
VOTE 1: PRESIDENCY
• Administration: spent R279.2 million against projected expenditure of R321.9 million which resulted in alower than planned spending of R42.7 million, mainly due to compensation of employees and goods andservices as a result of non-implementation of salary increases and non-payment of performanceincentives for 2019/20 which were projected to be processed in the Month of December, and also and lessdomestic and non-international travels as a result of Covid-19 pandemic. Some of the national activitieswhich required public gatherings were virtually held to comply with Disaster Management Act.
• Executive Support: spent R39.9 million against projected expenditure of R42.7 million which resulted in alower than planned spending of R2.8 million, mainly on compensation of employees due to non-implementation of salary increases and non-payment of performance incentives for 2019/20 which wereprojected to be processed in the month of December.
• Policy and Research Services: spent R12.3 million against projected expenditure of R14.8 million whichresulted in a lower than planned spending of R2.5 million, mainly on compensation of employees due tonon-implementation of salary increases and non-payment of performance incentives for 2019/20 whichwere projected to be processed in the month of December.
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VOTE 5: HOME AFFAIRS
• Administration: spent R1.5 billion against projected expenditure of R1.6 billion which resulted in a lowerthan planned spending of R72.8 million, mainly due to delays with implementation of the InformationSystem Modernisation project (formerly WAIO).
• Citizen Affairs: spent R3.6 billion against the projected expenditure of R3.8 billion which resulted in lowerthan planned spending of R168.4 million, mainly due to lower than projected spending is mainly undergoods and services due to the Covid-19 lockdown which resulted in less applications of enablingdocuments such as smart identity documents, birth certificates and passports which resulted in lesscourier services being procured for delivering of identity and passports documents to office and also lessexpenditure in printing of forms for frontline offices.
• Immigration Affairs: spent R965 million of the projected expenditure R980.3 million, which resulted inlower than planned spending of R15.3 million mainly on compensation of employees due to non-implementation of cost-of-living adjustment and goods and services due to lockdown restrictions thatresulted in less spending in items such as in travelling and training.
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VOTE 6: INTERNATIONAL RELATIONS AND COOPERATION• Administration: Administration spent R952.9 million or 4.2 per cent lower than the projected spending of
R994.2 million. The lower than projected spending is mainly on the budgets for goods and services andpayments for capital assets. Lower than projected spending on the budget for goods and services isattributed to the deceleration in the department’s activities attending the department’s adherence to therequirements of Covid-19 pandemic management regulations, and low spending on the payments forcapital assets budget due to delays in the finalisation of the Information and Communication Technology(ICT) strategy and implementation plan.
• International Relations: International Relations spent R2.553 billion or 2.3 per cent lower than theprojected spending of R2.614 billion. The R2.553 billion in actual expenditure is R60.7 million lower thanthe projected expenditure, as a result of spending on travel and subsistence that is lower than projecteddue to the cancellation of official trips by missions in keeping with the requirements of the COVID-19pandemic related regulations, as well as expenditure for 28 missions which did not timeously interfacewith the department’s Basic Accounting System (BAS) in December 2020.
• International Cooperation: International Cooperation spent R386.5 million or 4.7 per cent lower than theprojected spending of R405.6 million. The R386.5 million in actual expenditure is R19.1 million lower thanthe projected expenditure mainly on operating leases and travel and subsistence budgets. The lowspending on operating leases is attributed to expenditure for one mission which did not interface with thedepartment’s Basic Accounting System (BAS) in December 2020. The low spending on travel andsubsistence is due to the cancellation of official trips by missions in keeping with the requirements of theCOVID-19 pandemic related regulations.
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VOTE 6: INTERNATIONAL RELATIONS AND COOPERATION (2)
• Public Diplomacy and Protocol Services: Public Diplomacy and Protocol Services spent R178.1 million or10.5 per cent lower than the projected spending of R199 million. The R178.1 million in actual expenditureis R20.8 million lower than the projected spending mainly on the budget for goods and services,specifically on travel and subsistence, due to the cancellation of official trips (due to the COVID-19pandemic) which had been scheduled for December. The cancellation of travel also affected therepatriation of South African citizens abroad whose return had been scheduled for December 2020.
• International Transfers: International Transfers spent R633.5 million or 6 per cent lower than theprojected spending of R673.9 million. The R633.5 million is R40.5 million lower than projected spendingmainly due to the lower than planned expenditure on transfers and subsidies (departmental agencies andaccounts and international organisations). Lower than projected spending on the South AfricanDevelopment Partnership Agency (SADPA) is due to the non-operationalisation of the SADPA as thePartnership Fund for Development bill has not yet repealed the African Renaissance and InternationalCooperation Fund Act. Low spending on the Commonwealth of Nations budget is attributed to thedepartment’s delaying payments for its membership fees to this organisation so as to consider whether toseek approval for the relevant virements required to provide for the financial implications of the higherexchange rates.
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VOTE 7: NATIONAL SCHOOL OF GOVERNMENT• Administration: spent R71.9 million against projected expenditure of R67.8 which resulted in a higher
than projected spending of R4.1 million, mainly due to the NSG’s inability to generate sufficient ownrevenue from face to face training as a result of the Covid-19 lockdown restrictions.
• Public Sector Organisational and Staff Development: The National School of Government’s TrainingTrading Account reported an actual expenditure of R94.6 million, which is R30.6 million lower than theactual receipts of R125.2 million. Low expenditure is mainly evident under goods and services due to thedeceleration of activities attending the Covid-19 pandemic lockdown.
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VOTE 8: NATIONAL TREASURY
• Financial Accounting and Supply Chain Management Systems: lower than projected expenditure ofR56.8 million or 10.3 per cent, mainly due to slow spending under the Integrated Financial ManagementSystems project as a result of outstanding invoice for services rendered by State Information TechnologyAgency, and the delayed appointment of a service provider to implement the Common Design phase ofthe project; as well as the Municipal Financial Recovery Services project due to the cancellation of thetender process on discovery of non-compliance.
• International Financial Relations: higher than projected by R675.4 million or 13.7 per cent, mainly onpayments for financial assets for South Africa’s sixth capital contribution instalment to the NewDevelopment Bank due to the exchange rate fluctuations.
• Civil and Military Pensions, Contributions to Funds and Other Benefits: lower than projected byR70.4 million or 1.9 per cent mainly relating to the pending processing of Government PensionsAdministration Agency administrative claims for the previous months as the claims have to be validatedfor accuracy and completeness before payment can be authorised; and the Post-Retirement MedicalBenefit due to a lower than anticipated number of claims on medical subsidies, as well as a high rate ofmortality on principal members resulting in lower medical subsidies processed to date.
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VOTE 11: PUBLIC SERVICE AND ADMINISTRATION• Administration: spent R154.0 million against the projected expenditure of R165.2 million which resulted in
lower than the projected expenditure of R11.2 million, mainly on goods and services (travel andsubsistence) mainly due to the travel restrictions imposed by the Covid-19 pandemic lockdown.
• Policy Development, Research and Analysis: spent R21.5 million against projected expenditure ofR22.8 million which resulted in lower than projected expenditure of R1.3 million, mainly on compensationof employees due to funded vacant posts which include two Director posts and four Deputy Director posts.
Lower than expected expenditure is also evident under goods and services (travel and subsistence) due tothe deceleration of activities attending the Covid-19 lockdown travel restrictions.
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VOTE 11: PUBLIC SERVICE AND ADMINISTRATION (2)• Public Service Employment and Conditions of Service: spent R39.5 million against projected expenditure
of R39.4 million which resulted in higher than projected expenditure of R100 000 mainly due to higherthan expected payments for leave gratuities.
• Government Chief Information Officer: spent R12.7 million against projected expenditure of R12.4 millionwhich resulted in higher than projected expenditure of R600 000, mainly under compensation ofemployees due to the transfer for an official between programmes, remunerated at the same level. Thedepartment remains within its compensation of employees ceiling.
• Service Delivery Support: spent R58.8million against projected expenditure of R57.7 million whichresulted in higher than projected expenditure of R100 000 , mainly due to higher than expected paymentsfor leave gratuities.
• Governance of Public Administration: spent R27.5 million against projected spending of R29.3 millionwhich resulted in lower than projected expenditure of R1.8 million, mainly on goods and services (traveland subsistence) mainly due to the travel restrictions imposed by the Covid-19 pandemic lockdown anddelays in the receipt of invoices from the State Information Technology Agency for the payment of e-disclosure services (i.e. computer services).
Lower than expected expenditure is further visible under compensation of employees due to fundedvacant posts which include one Chief Director post, one Director post, and four Deputy Director posts.
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VOTE 12: PUBLIC SERVICE COMMISSION• Administration: spent R87.2 million against projected expenditure of R90.1 million which resulted in lower
than planned projected of R2.8 million, mainly under compensation of employees due to funded vacantposts. Contract workers have been appointed using funds from these vacant posts.
Lower than projected expenditure is also evident under goods and services (computer services, operatingleases and audit costs) due to outstanding invoices from the State Information Technology Agency andother service providers. The spending remains slow due to Covid-19 pandemic restrictions.
• Leadership and Management Practices: spent R35.2 million against projected expenditure ofR35.2 million which resulted in lower than projected expenditure of R100 000, mainly under payments forcapital assets (operating lease for the photo copying machines) due to outstanding invoices from theservice provider.
• Monitoring and Evaluation: spent R28.7 million against projected expenditure of R31.1 million whichresulted in lower than projected expenditure of R2.4 million, mainly under compensation of employeesdue to vacant funded posts.
• Integrity and Anti-Corruption: spent R39.9 million against projected expenditure of R42.7 million whichresulted in lower than projected expenditure of R2.7 million, mainly under compensation of employeesdue to vacant funded posts.
Lower than expected expenditure is also evident under goods and services (property payments andcommunications) due to delayed invoices from service providers.
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VOTE 13: PUBLIC WORKS AND INFRASTRUCTURE• Administration: spent R280.7 million or 11.4 per cent lower than the projected spending of R316.6 million,
mainly due to delays in filling vacant positions, as well as lower than projected spending on the budget for goodsand services (mainly on audit fees, computers services, communication travel subsistence and propertypayments). The low spending on goods and services is a result of planned departmental activities which werelower than projected due to the Covid-19 nation-wide lockdown.
• Intergovernmental Coordination: spent R35.1 million or 11.9 per cent lower than the projected spending ofR35.7 million. Low spending is evident in the budgets for compensation of employees and goods and services.Low spending on compensation of employees is due to delays in filling vacant positions, and lower than plannedspending on the goods and services’ budget (mainly on venue and facilities, catering and travel and subsistence),attributed to the Covid-19 nation-wide lockdown which resulted in planned departmental activities being fewerthan projected.
• Expanded Public Works Programme: spent R1.612 billion or 26.1 per cent lower than the projected spending ofR2.182 billion. The low spending is evident in the budgets for compensation of employees, goods and services,and transfers and subsidies. The lower than projected spending on the budget for compensation of employees isdue to delays in filling vacant positions. The low spending on the goods and services’ budget, specifically on theAgency and support/outsourced services, consultant and business advisory, and travel and subsistence is due tolow spending on planned activities resulting from the nation-wide lockdown. There is also low spending ontransfers and subsidies, specifically on the Non-State Sector Programme due to the non-transfer of funds to theIndependent Development Trust for implementing the programme. The Acting Director-General has since thensigned for the approval to transfer funds to the Independent Development Trust. The payment will be madebefore the end of January 2021.
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VOTE 13: PUBLIC WORKS AND INFRASTRUCTURE (2)• Property and Construction Industry Policy and Research: spent R3.623 billion or 0.5 per cent higher than
the projected spending of R3.605 billion. The higher than projected spending is reflected in the budget fortransfers and subsidies due to an unbudgeted for transfer payment to the Independent Development Trustwhich was made to the Trust in terms of section 29 of the Public Finance Management Act and TreasuryRegulation 6.3.1(b) to enable the financially distressed Trust to cover operational costs.
• Prestige Policy: spent R35.8 million or 17.6 per cent lower than the projected spending of R43.4 million.The low spending is evident in the budgets for compensation of employees and goods and services. Thelower than projected spending on the budget for compensation of employees is due to delays in fillingvacant positions. The lower than projected spending on the goods and services’ budget (specifically oncontractors and travel and subsistence) is attributed to the Covid-19 nation-wide lockdown, resulting inthe planned departmental activities being lower than projected.
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VOTE 14: STATISTICS SOUTH AFRICA
• Administration: spent R488.5 million or 69.8 per cent of its total available budget of R700.1 million as atthe end of the third quarter of 2020/21, which represents a lower than anticipated expenditure ofR47.5 million or 8.9 per cent against a projected expenditure of R536 million for the period under review,mainly due to outstanding invoices for office accommodation.
• Statistical Operations and Provincial Coordination: spent R619.1 million or 39.1 per cent of its totalavailable budget of R1.6 billion as at the end of the third quarter of 2020/21. Spending in this programmehas been slow mainly due to uncertainties around the Census pilot, which was originally planned forOctober 2020. The pilot has been suspended for the current year, and new discussions around the mostappropriate time for the project to take place are underway.
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EDUCATION AND RELATED DEPARTMENTS
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18,4
87,4
2,3 3,7
19,1
87,8
2,4 3,6
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
100,0
Basic Education Higher Education and Training Employment and Labour Sports, Arts and Culture
R B
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Q3 Actual expenditure
Q3 Projected expenditure
EDUCATION AND RELATED DEPARTMENTS
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R million
Main
Appropriation
Adjusted
Appropriation
Available
Budget
Q3 Actual
expenditure
Expenditure
as % of
Available
Budget
Q3 Projected
expenditure
Variance from
projected
expenditure
% variance
from projected
expenditure
COVID-19
Spending
16 Basic Education 25 328.2 23 395.0 23 395.0 18 403.3 78.7% 19 146.6 743.3 3.9% 123.7
17 Higher Education and
Training
97 444.0 94 094.9 94 094.9 87 412.8 92.9% 87 766.3 353.5 0.4% 2.5
31 Employment and Labour 3 637.7 3 299.3 3 299.3 2 330.5 70.6% 2 395.6 65.1 2.7% 17.6
37 Sports, Arts and Culture 5 720.2 5 310.7 5 310.7 3 738.3 70.4% 3 556.1 -182.2 -5.1% 101.8
Total 132 130.1 126 100.0 126 100.0 111 884.9 88.7% 112 864.6 979.7 0.9% 245.6
VOTE 16: BASIC EDUCATION
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• Programme 2: Curriculum Policy, Support and Monitoring – Spending is higher than projected byR165.7 million or 12.7 per cent, mainly under goods and services. This is mainly due to the developmentand provision of digital solutions for teaching and learning in the light of the impact of Covid-19 onschooling.
• Programme 4: Planning, Information and Assessment – Spending is lower by R892.5 million or 9.3 percent, mainly due to slow spending of the school infrastructure backlogs grant, where spending was lowerthan projected by R816.4 million. The low spending was initially due to the slowing down of constructionactivity due to lockdown measures but also because infrastructure spending is only authorised afterverification of completed work, which has been more difficult under lockdown restrictions.
Covid-19 spending
The department has spent R123.7 million, of which R118.6 million is in programme 4 where it was used torent and hire mobile toilets and the provision of 2.2 million masks for learners in LMP, GT, MP and NW. Theremaining expenditure of R4.9 million in programmes 1 and 2 was for the nationwide Covid-19 advocacy andawareness campaign to support leaners, teachers and parents, and to provide masks, sanitisers andtemperature checking equipment for departmental employees.
VOTE 17: HIGHER EDUCATION & TRAINING
32
• Programme 3: University Education – Spending is R83.4 million or 0.1 per cent lower than projected. Thisis mainly due to delays in the transfer payments to Higher Education Institutions for the earmarked grantsas the required progress reports were not timeously received.
• Programme 4: Technical and Vocational Education and Training – Spending is R216.9 million or 2.4 percent lower than projected. The slow spending is mainly under compensation of employees as claims fromexaminers and moderators were not received as projected due to the postponement and restructuring ofTVET College national examinations as a result of lockdown restrictions.
• Programme 6: Community Education and Training – Spending is R74.3 million or 4.6 per cent lower thanprojected. The slow spending is mainly under compensation of employees due to unfilled posts and delaysin receiving travel and subsistence claims from moderators and examiners.
Covid-19 spending
The department spent R2.5 million on personal protective equipment and other Covid-19 related purchases.The lower than projected spending is mainly due to delays in receiving invoices from suppliers. Spending onCovid-19 by institutions such as TVET colleges and universities is included in their transfers.
VOTE 31: EMPLOYMENT & LABOUR
33
• Programme 1: Administration: low spending by this programme amounts to R19.2 million or 2.9 per centmainly under compensation of employees due to vacant finance, supply chain, and management posts atprovincial offices and labour centres and IT posts at head office and delayed invoicing by SITA forcomputer services; and fewer claims from the DPW&I.
• Programme 2: Inspection and Enforcement Services: Spending by the programme was lower thanprojected for the quarter by R30.6 million or 7.7 per cent. The largest item of low spending by thisprogramme is on compensation of employees due to vacant funded posts. The low spending on goods andservices is attributed to the lockdown restrictions which reduced spending on travel and accommodation,as well as training and development.
Covid-19 spending
R17.6 million was spent, mainly by Programme 1 for personal protective equipment, decontamination anddeep cleaning of the buildings occupied and sanitisers.
VOTE 37: SPORT, ARTS & CULTURE
34
• Programme 2: Recreation Development and Sport Promotion: Expenditure for this programme is lowerthan the third-quarter projection by R156.7 million or 21.1 per cent: capital funds not being paid to publicentities as the budget reductions during the special adjustments budget (SAB) were too late to be includedin the new projections and slow spending on Non-profit institutions was due to withheld transfers toloveLife, The Sports Trust, and various Sport Federations due to outstanding compliance documentation.Further slow spending was reported under Payment for Capital Assets due to delays in the payment to thecontractor responsible for the Sarah Baartman Centre of Remembrance and on travel and subsistence dueto the cancellation of sporting events.
• Programme 3: Arts and Culture Promotion and Development: Expenditure for this programme is higherthan the third-quarter projection by R318.3 million or 41.9 per cent mainly on Transfers and subsidies.Higher spending on departmental agencies and accounts was due to transfer payments made to theNational Arts Council for the Presidential Stimulus Package disbursements to arts and culture beneficiariesfor employment creation and retention. These changes were too late to be included the new projections.
VOTE 37: SPORT, ARTS & CULTURE (2)
35
Covid-19 spending
The department has spent R101.8 million of the R250 million reprioritised for Covid-19 emergency spending tabled in the 2020 Special Adjustments Budget:
• Covid-19 relief funding to the sport sector:
‒ R9.4 million has been paid to The Sports Trust and ‒ R10 million to various Sport Federations
• COVID-19 related relief support to the art and culture sector:
‒ R37 million has been paid to Business and Arts South Africa, ‒ R18 million to National Film and Video Foundation, and
• R30 million to the National Arts Council
• Covid-19 relief support to the African Union Sports Council of R110 000
• R7.2 million was spent by the department for sanitisers, PPE and decontamination of buildings.
HEALTH AND SOCIAL DEVELOPMENT
36
42,3
176,2
0,5
42,1
174,2
0,50,0
20,0
40,0
60,0
80,0
100,0
120,0
140,0
160,0
180,0
200,0
Health Social Development Women, Youth and Persons with Disabilities
R B
illio
ns
Q3 Actual expenditure
Q3 Projected expenditure
HEALTH AND SOCIAL DEVELOPMENT
37
R million
Main
Appropriation
Adjusted
Appropriation
Available
Budget
Q3 Actual
expenditure
Expenditure
as % of
Available
Budget
Q3 Projected
expenditure
Variance from
projected
expenditure
% variance
from projected
expenditure
COVID-19
Spending18 Health 55 516.0 58 052.6 58 052.6 42 294.9 72.9% 42 142.2 -152.7 -0.4% 2 468.8
19 Social Development 197 718.3 230 807.3 230 807.3 176 197.7 76.3% 174 238.0 -1 959.7 -1.1% 15 527.3
20 Women, Youth and
Persons with Disabilities
778.5 621.0 621.0 511.9 82.4% 511.3 -0.6 -0.1% 0.5
Total 254 012.8 289 480.9 289 480.9 219 004.5 75.7% 216 891.4 -2 113.1 -1.0% 17 996.5
VOTE 18: HEALTH
38
Summary: The department has spent R42.3 billion or 72.9 per cent of its R58.1 billion adjustedappropriation. This is higher than the projected spending of R42.1 billion for this period, indicating avariance of R152.7 million or 0.4 per cent, largely due to higher than projected spending in transfers andsubsidies, wherein R4.5 billion against R4.3 billion projected was erroneously transferred under the HealthFacility Revitalisation grant. A lower tranche, will accordingly be transferred in the fourth quarter. Paymentsfor capital assets also reflected a higher than projected spending (R630.2 million spent against a projectionof R571.6 million indicating a variance of R58.7 million) and this will be resolved when the departmentpasses it journals as some expenditure was incorrectly classified.
• The Civitas building (NDOH head office) is still closed, causing delays in processing payments, placingorders for capital assets and good and services, and correctly classifying expenditure, including COVIDexpenditure. This has contributed to expenditure being lower than projected in several areas.
Programme 2
Spending in this programme is R558.9 million or 45.2 per cent of its R1.2 billion adjusted appropriation,which is R68.3 million or 10.9 per cent lower than projected spending of R627.1. The variance is largely dueto lower than projected spending under goods and services, where R369.4 million was spent against aprojection of R428.1 million, indicating a variance of R58.7 million and payments for capital assets(R15.9 million spent against a projection of R24.2 million, indicating a variance of R8.4 million). The lowspending emanates partly from the National Health Insurance indirect grant, the non-personal and personalcomponents. This is due to less activities taking place due to the lockdown and the implementation of NHIrelated activities being put on hold.
VOTE 18: HEALTH (2)
39
Programme 5
Spending in this programme is R15.7 billion or 73.8 per cent of its R21.2 billion adjusted appropriation, this is higherthan projected spending by R232.2 million or 1.5 per cent. The variance is largely due to transfers and subsidieswhere R15.0 billion is spent against a projection of R14.8 billion, indicating a variance of R178.5 million. Thisvariance results from the Health Facility Revitalisation grant, wherein R4.5 billion is transferred against a projectionof R4.3 billion. The fourth quarter tranche will be lower by R178.5 million to balance back to the total appropriationof the grant.
The high spending in this programme is also due to higher than projected spending under payments for capitalassets with expenditure of R586.9 million against a projection of R523.2 million indicating a variance ofR63.7 million. This is due to the misclassification of goods and services spending as payments for payments capitalassets, the department will correct this classification.
Covid-19 spending
R2.46 billion has been spent as part of COVID-19 response against a projection of R2.5 billion, indicating a varianceof R35.0 million, this difference comes from lower than projected spending under goods and services, mostly onconsultants and business advisory services. There is no record of expenditure under medical supplies which alsowould include Protective Personal Equipment (PPE). While the department has reported that it is still going to passjournals related to this, it has been proposed that some of the funds appropriated for the COVID-19 response(approximately R124.4 million) be reprioritised for the procurement of COVID-19 vaccines as there may beunderspending by end of the financial year. There are concerns about excessive spending under domestic travel andsubsistence, the department is yet to provide explanation for high spending in this item.
VOTE 19: SOCIAL DEVELOPMENT
40
• Social Assistance: Spent 76.7 per cent of budget, which is R2.0 billion above the projected expenditure ofR167.2 billion. This was mainly due to a higher number of eligible beneficiaries of the R350 special COVID-19 social relief of distress grant that came into effect from May 2020.
• Social Security Policy and Administration: Spent 76.4 per cent of budget, R14.6 million below theprojected expenditure of R5.8 billion. The lower expenditure is under compensation of employees andgoods and services, and this is due to the delay in establishing the Inspectorate for social assistance.
• Welfare Services Policy Development and Implementation Support: spent 32.2 per cent of budget whichis R31.7 million less than projected expenditure of R625.0 million. Lower spending is mainly due to delaysin the appointment of social workers and ECD registration support officers for which the departmentreceived additional funding as part of the Presidential Employment Initiative.
• Administration: Spent 65.8 per cent of budget, R3.9 million below the projected expenditure ofR284.5 million. The lower spending was mainly on compensation of employees and various goods andservices items including computer services, operating leases and travel and subsistence due to lockdowntravel restrictions
VOTE 20: WOMEN, YOUTH AND PERSON WITH DISABILITIES
41
• Administration: The programme spent R68.8 million which is R1.7 million higher than the projectedexpenditure of R 67.1 million. Higher than projected spending is attributed to previous months’ invoices ofoffice accommodation which came higher than projected.
• Social Transformation and Economic Empowerment: The programme spent R73.5 million ofR104.5 million. Spending was R100 thousands lower than the projected. The lower spending is mainly ingoods and services o- Consultants: Business and advisory services, as well as travel and subsistence due tolimitations posed by COVID-restrictions.
• Policy, Stakeholder Coordination and Knowledge Management: The programme spent R18.1 million or53.2 percent of the available budget of R34.1 million. Spending was R3.4 million lower than projectedexpenditure of R21.5 million due to suspended outreach activities due to lockdown restrictions.
• Rights of Persons with Disabilities: R800 thousand or 5.8 percent of R13 million was spent. Spending wasR 3.1 million lower than projected expenditure of R 3.9 million. A total of R6.9 million spent on thisprogramme remains unclassified.
• National Youth Development: The programme has spent R343.9million or 91.3 percent of the availablebudget of R376.8 million. Spending was R1.3 million lower than the projected expenditure of R345.1 Thelower expenditure on goods and services was mainly due to cancelled consultations, trips, meetings dueto Covid-19 travelling restrictions.
JUSTICE AND PROTECTION SERVICES
42
0,1
18,3
38,1
0,3
12,2
0,2 0,7
70,5
0,1
18,6
39,7
0,3
12,9
0,3 0,8
73,0
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
CivilianSecretariat for
the Police Service
CorrectionalServices
Defence IndependentPolice
InvestigativeDirectorate
Justice andConstitutionalDevelopment
Military Veterans Office of the ChiefJustice
Police
R B
illio
ns
Q3 Actual expenditure
Q3 Projected expenditure
JUSTICE AND PROTECTION SERVICES
43
R million
Main
Appropriation
Adjusted
Appropriation
Available
Budget
Q3 Actual
expenditure
Expenditure
as % of
Available
Budget
Q3 Projected
expenditure
Variance from
projected
expenditure
% variance
from projected
expenditure
COVID-19
Spending
21 Civilian Secretariat for
the Police Service
156.3 137.2 137.2 89.5 65.2% 90.7 1.3 1.4% 0.1
22 Correctional Services 26 800.0 25 596.8 25 596.8 18 305.4 71.5% 18 565.3 259.9 1.4% 177.8
23 Defence 52 438.6 54 201.3 54 201.3 38 074.5 70.2% 39 666.7 1 592.2 4.0% 2 648.0
24 Independent Police
Investigative Directorate
355.7 341.0 341.0 262.3 76.9% 258.8 -3.5 -1.4% 1.4
25 Justice and
Constitutional
Development
19 860.6 18 666.3 18 666.3 12 230.6 65.5% 12 907.6 676.9 5.2% 36.7
26 Military Veterans 683.1 480.3 480.3 237.5 49.5% 272.6 35.0 12.9% 0.7
27 Office of the Chief
Justice
1 259.8 1 188.1 1 188.1 749.7 63.1% 806.6 56.9 7.1% 2.5
28 Police 101 711.0 99 560.9 99 560.9 70 466.9 70.8% 72 987.2 2 520.3 3.5% 1 687.8
Total 203 265.1 200 171.9 200 171.9 140 416.4 70.1% 145 555.4 5 139.0 3.5% 4 555.1
SPENDING HIGHLIGHTS
44
Vote 21: Civilian Secretariat for the Police Service
• Recorded slower than planned spending of R1.3 million, mainly on compensation of employees(R3.1 million) due to vacant funded posts. By the end of the third quarter of 2020/21, the departmenthad a vacancy rate of 3.8 per cent (6 vacant posts).
Vote 22: Correctional Services
• Lower than planned spending by R259.9 million mainly on compensation of employees and goods andservices due to non implementation of cost of living adjustments (COLA) and COVID-19 national lockdown.
Vote 23: Defence
• Lower than planned spending of R1.6 billion was mainly on goods and services due to late verification ofinvoices received from the Department of Public Works and Infrastructure resulting in non-payment.Furthermore, the closure of local and international businesses as a result of the COVID-19 pandemic hasaffected the planned procurement activities and subsequent payments to suppliers.
SPENDING HIGHLIGHTS
Vote 24: Independent Police Investigative Directorate
• Recorded higher than planned spending of R3.5 million, mainly on compensation of employees(R4.5 million). The high spending on compensation of employees was due to the carry through costsemanating from the adjustments of salary notches for all active investigators on salary levels 9 - 14 as partof the implementation of section 23 of the Independent Police Investigative Directorate (IPID) Act (2011).
Vote 25: Justice and Constitutional Development
• Lower than planned spending by R676.9 million (excl direct charges) due to funded vacant posts (naturalattrition) and delays in the receipt of invoices for accommodation charges from the DPWI
Vote 26: Military Veterans
• Lower than projected spending of R35 million mainly on goods and services due to delays in theprocessing and authenticating of invoices for healthcare support provided to the military veterans as wellas delays in scheduled training and travel due to the nation-wide lockdown.
45
SPENDING HIGHLIGHTS
Vote 27: Office of the Chief Justice
• Lower than projected spending by R56.9 million (excl direct charges) mainly due to the delay in theimplementation of salary adjustments and pay progression as well as COVID-19 national lockdown.
Vote 28: Police
• Recorded slower than planned spending of R2.5 billion, mainly on compensation of employees(R640.6 million) and goods and services (R1.8 billion). The slow spending on compensation of employeeswas due to vacant funded posts and the non-implementation of cost of living adjustments for staff. Theslow spending on goods and services was mainly on consumable supplies (R872.6 million) due to thedecrease in the prices of consumable items given the availability of multiple service providers and thedepartment’s use of other PPE options such as cloth masks instead of surgical masks to save costs.
46
VOTE 22: CORRECTIONAL SERVICES
47
• Administration: spent R3.402 billion against the projected expenditure of R3.471 billion resulting in lowerthan projected spending of R68.9 billion due to non-implementation of cost of living adjustment (COLA)and COVID 19 national lockdown
• Incarceration: spent R10.9 billion against the projected expenditure of R11 billion which resulted in alower than planned spending of R113.7 million, mainly due to the non implementation of COLA andCOVID-19 national lockdown.
• Rehabilitation: spent R1.34 billion against the projected expenditure of R1.43 billion which resulted inlower than planned spending of R49.9 million, mainly attributed to compensation of employees as a resultof non implementation of COLA and goods and services due to the item inventory: clothing materials andaccessories as a result of orders for textiles and towelling materials that could not be placed early in thefinancial year due to the department awaiting for the finalisation of price adjustment.
• Care: spent R1.88 billion against the projected expenditure of R1.9 billion which resulted in lower thanplanned spending of R25.5 million, mainly due to item: food and food supplies. The lower than projectedspending on this item was due to the over projection by the department in the beginning of the financialyear to cater for accruals and payables.
VOTE 23: DEFENCE
48
• Administration: spent R3.5 billion against projected expenditure of R3.9 billion which resulted in lower thanplanned spending of R407 million, mainly due to the delay in the verification of invoices from the Department ofPublic Works and Infrastructure as well as the administrative backlog at the Department of InternationalRelations and Cooperation which resulted in a delay in the submission of payment vouchers for military attachéexpenditure abroad.
• Landward Defence: spent R13.2 billion against projected expenditure of R13.4 billion which resulted in lowerthan planned spending of R164.7 million, mainly due to delays in the procurement processes for machinery andequipment as well as non implementation of cost of living adjustment (COLA).
• Air Defence: spent R4.8 billion against projected expenditure of R4.9 billion which resulted in lower than plannedexpenditure of R123 million, mainly due to the prolonged procurement processes concerning the upkeep of theaircraft systems as well as the unprecedented nation-wide lockdown which had a negative impact on the cashflow plan of the department, especially on the delivery of goods and services, resulting in subsequent lower thananticipated payments to suppliers.
• Military Health Support: spent R4 billion against projected spending of R4.4 billion which resulted in lower thanplanned expenditure of R356.1 million, mainly due to the department’s prolonged procurement processes interms of purchasing essential medical equipment as well as non implementation of cost of living adjustment(COLA).
• General Support: spent R5.4 billion against projected spending of R5.8 billion which resulted in lower thanplanned expenditure of R406.5 million, mainly due to the lower than projected spending on compensation ofemployees as result of non-payment of salary increases as well as delays in the procurement of personalprotective equipment which affected payments to perspective suppliers.
VOTE 24: INDEPENDENT POLICE INVESTIGATIVE DIRECTORATE
• Administration: Spent R69.3 million against projections of R67.7 million, thus resulting in a deviation ofR1.6 million between planned and actual spending. The high spending was mainly recorded on goods andservices (R2.4 million) under operating leases (R2.8 million). This was due to the settlement of outstandingmonthly office lease invoices for the national office and some of the provincial offices to the Departmentof Public Works and Infrastructure (DPW-I).
• Investigation and Information Management: Spent R179 million against projections of R177 million, thusresulting in a deviation of R2 million between planned and actual spending. The high spending was mainlyrecorded on compensation of employees (R4.7 million). This was due to the carry through costs emanatingfrom the adjustment of salary notches for all active investigators as part of the implementation of section23 of the IPID Act (2011).
49
VOTE 25: JUSTICE AND CONSTITUTIONAL DEVELOPMENT
50
• Administration: Spending is lower by R298.8 million (mainly goods and services), due to delays in receiptof invoices for office accommodation from DPWI.
• Court Services: Spending is lower by R110.1 million (compensation of employees and buildings and otherfixed structures), due to funded vacancies (natural attrition) and slow progress by DPWI in implementationof planned infrastructure projects (COVID-19 restrictions).
• State Legal Services: Spending is lower by R67.2 million (compensation of employees and goods andservices), due to funded vacancies (natural attrition) and reduced expenditure on legal costs (temporaryclosure of offices and slow invoicing due to COVID-19 interruptions).
• National Prosecuting Authority: Spending is higher by R28.3 million (machinery and equipment), due topayment of invoices for laptops and printers procured in 2019/20, but only delivered in 2020/21.
• Auxiliary and Associated Services: Spending is lower by R229.2 million (goods and services), due to delaysin receipt of invoices for contractual payments from SITA, and delayed implementation of planned ICTprojects (COVID-19 restrictions).
VOTE 26: MILITARY VETERANS
51
• Socioeconomic Support: spent R106.1 million against projected expenditure of R117.2 million whichresulted in lower than planned expenditure of R11.1 million, mainly due to the delays in the receiptof invoices related to key benefits such as education support and housing. Moreover, healthcaresupport invoices, although available to the department, usually require intense validation whichfurther delays the payment of invoices.
• Empowerment and Stakeholder Management: spent R40.7 million against projected expenditureof R63.6 million which resulted in lower than planned expenditure of R22.9 million, mainly due tonation-wide lockdown which had a negative impact on the planned activities of the departmentsuch as training, travel and accommodation.
VOTE 27: OFFICE OF CHIEF JUSTICE AND JUDICIAL ADMINISTRATION
52
• Administration: spent R147,1 million against projected expenditure of R161 million which resulted inlower than planned expenditure of R13,9 million, mainly due to to non implementation of cost of livingadjustments (COLA) and COVID-19 national lockdown.
• Superior Court Services: spent R584.3 million against projected expenditure of R618.7 million whichresulted in lower than planned expenditure of R34.5 million, mainly due to the partial implementation ofthe pay progression which was projected to be implemented in December 2020 and the lesser usage ofjudges’ vehicles, less stationery bought since some staff and judges are working remotely, and lesstravelling by judges and officials due to lockdown restrictions.
VOTE 28: POLICE
53
• Administration: Spent R13.4 billion against projections of R13.7 billion, thus resulting in slow spending ofR290.9 million between planned and actual spending. Slow spending was mainly recorded oncompensation of employees (R37.5 million) and goods and services (R155.6 million). The slow spending oncompensation of employees was due to vacant posts and the non-implementation of cost of livingadjustments for staff. The slow spending on goods and services was mainly recorded on travel andsubsistence (R58.5 million) due to savings realised as a result of limited interprovincial travel and use ofvirtual platforms for internal meetings.
• Visible Policing: Spent R38 billion against projected spending of R39.5 billion, thus resulting in a varianceof R1.5 billion between planned and actual spending. Slow spending was mainly recorded goods andservices (R1.3 billion), specifically on consumable supplies (R838.2 million) due to internal controlsimplemented to ensure the utilisation of PPE across the department’s police stations, divisions andcentres is managed within available budget. Given the uncertainty regarding the spread of the COVID-19pandemic, the department is exercising caution in its spending on COVID-19 interventions.
• Detective Services: Spent R13.6 billion against projected spending of R14.3 billion, thus resulting in avariance of R658.7 million between planned and actual spending. Slow spending was mainly recorded oncompensation of employees (R295.8 million). This was due to vacant posts and the non-implementation ofcost of living adjustments for staff.
ECONOMIC SERVICES
54
27,6
9,8
6,0 5,8
2,10,8
5,1
24,8
10,8
5,5 5,3
2,00,8
5,5
0,0
5,0
10,0
15,0
20,0
25,0
30,0
Pu
blic
Ente
rpri
ses
Agr
icu
ltu
re, L
and
Re
form
an
d R
ura
lD
eve
lop
me
nt
Envi
ron
men
t,Fo
rest
ry a
nd
Fish
erie
s
Scie
nce
an
dIn
no
vati
on
Smal
l Bu
sin
ess
De
velo
pm
en
t
Tou
rism
Trad
e, I
nd
ust
ryan
d C
om
pe
titi
on
R B
illio
ns
Q3 Actual expenditure
Q3 Projected expenditure
ECONOMIC SERVICES
55
R million
Main
Appropriation
Adjusted
Appropriation
Available
Budget
Q3 Actual
expenditure
Expenditure
as % of
Available
Budget
Q3 Projected
expenditure
Variance from
projected
expenditure
% variance
from projected
expenditure
COVID-19
Spending
10 Public Enterprises 37 849.4 77 606.9 77 606.9 27 592.2 35.6% 24 832.4 -2 759.7 -11.1% 0.4
29 Agriculture, Land Reform
and Rural Development
16 810.1 15 247.6 15 247.6 9 759.4 64.0% 10 804.0 1 044.7 9.7% 18.3
32 Environment, Forestry
and Fisheries
8 954.7 9 937.8 9 937.8 5 982.5 60.2% 5 489.7 -492.8 -9.0% 13.8
35 Science and Innovation 8 797.4 7 278.3 7 278.3 5 789.4 79.5% 5 306.2 -483.2 -9.1% 128.2
36 Small Business
Development
2 406.8 2 277.8 2 277.8 2 066.7 90.7% 2 045.0 -21.7 -1.1% 1 164.3
38 Tourism 2 481.0 1 426.9 1 426.9 800.5 56.1% 827.1 26.5 3.2% 0.5
39 Trade, Industry and
Competition
11 082.1 9 273.3 9 273.3 5 101.0 55.0% 5 503.2 402.1 7.3% 0.5
Total 88 381.4 123 048.5 123 048.5 57 091.8 46.4% 54 807.7 -2 284.1 -4.2% 1 326.0
SPENDING HIGHLIGHTS
• Vote 10: Public Enterprises
Spending was higher than projected by 11.1 per cent or R2.8 billion. This mainly occurred on Programme 3: BusinessEnhancement, Transformation and Industrialisation due to disbursement of funds particularly to Eskom and the SouthAfrican Airways for payment of guaranteed debt and implementation of the business rescue plan. Despite the overallhigher than projected spending, slow spending occurred on compensation of employees and goods and services due tovacant posts and delays in the commencement of planned projects.
• Vote 29: Agriculture, Land Reform and Rural Development
Spending was lower than projections by R1 billion or 9.7 per cent, this was mainly driven by lower expenditure oncompensation of employees (due to vacancies), goods and services, delayed implementation of land tenure reformprojects and finalisation of land claims; and delayed quarterly transfer payments of conditional grants: ComprehensiveAgricultural Support Programme.
• Vote 32: Environment, Forestry and Fisheries
Spending was R492,8 million or 9 per cent higher than projections, the overspending is mainly due to the payment of thepresidential stimulus programme funds to public entities to commence with planned programmes and initiatives, as wellas due to processing of invoices for the forestry and fisheries office accommodation. These invoices were only receivedfrom the Department of Public Works and Infrastructure in December 2020.
• Vote 35: Science and Innovation
Spending was R483.2 or 9.1 per cent higher than projections, due to higher spending on transfers and subsidies withinthe Research, Development and Support and Socioeconomic Innovation Partnerships programmes due to delayedtransfers to projects that were only settled in the third quarter.
56
SPENDING HIGHLIGHTS
• Vote 36: Small Business Development
Higher than projected spending of R21.7 million or 1.1 per cent was mainly driven by Small EnterpriseFinance Agency (SEFA) due to redirected budget towards COVID-19 Emergency Fund.
• Vote 38: Tourism
Spending was R26.5 million or 3.2 per cent lower than projections. This is mainly attributable to slowspending on goods and services as a result of delays in the rollout of Expanded Public Works Programme(EPWP) under Programme 3: Destination Development, implementation of programmes has beenimpacted by the COVID-19 lockdown restrictions
• Vote 39: Trade, Industry and Competition
Spending was lower than projections by R402.1 million or 7.3 per cent, mainly under transfers andsubsidies, goods and services and compensation of employees. This was attributed to low disbursementof incentive schemes due to suspension of economic activities during lockdown, cancellation of activitiesincluding trade export missions and pavilions, international events and fora in the areas of trade andinvestment. The moratorium on the filling of vacant posts also contributed to slow spending oncompensation of employees.
57
VOTE 10: PUBLIC ENTERPRISES
58
• Programme 1: Administration: Spending was R6.3 million or 6.7 per cent slower than projected. This wasmainly on compensation of employees due to vacant posts.
• Programme 2: State-owned Companies Governance Assurance and Performance: Spending wasR1.9 million or 6.9 per cent slower than projected mainly on subprogramme Legal and FinancialAssessment and Investment Support. This occurred on compensation of employees due to unfilled posts.
• Programme 3: Business Enhancement, Transformation and Industrialisation: Spending was R2.8 billionor 11.2 per cent higher than budget. This was mainly due to disbursements for SOCs particularly Eskomand the SAA for debt settlement for both entities and business rescue plan for the SAA.
COVID-19 spending
• During the quarter, the department spent R393 thousand on purchase of personal protective equipmentfor staff.
VOTE 29: AGRICULTURE, LAND REFORM AND RURAL DEVELOPMENT
59
• Programme 1: Administration: Spending was R219 million or 9.8 per cent higher than projected. This was oncompensation of employees and goods and services, mainly due to the misalignment between the persal systemstructure and the budget structure pending the finalisation of the department's micro organisation structure; andpayment of office accommodation charges' debt carried over from the previous financial years.
• Programme 2: Agricultural Production, Health, Food Safety, Natural Resources and Disaster Management:Spending was R99.6 million or 3.8 per cent higher than projected. This occurred on compensation of employees,mainly due to misalignment between the persal structure and the budget structure, mainly due to incorrectmapping of staff following the NMOG 2019. The Department indicated that following the merger, there was aninterim arrangement that all compensation of employees’ related expenditure of the agriculture function wouldbe paid using programme 2 objective fund until the finalisation of the microstructure of the new department.
• Programme 3: Food Security, Land Reform and Restitution: Spending was R1.1 billion or 25.1 per cent slowerthan the projected spending of R4.5 billion. The slow spending was under compensation of employees, goodsand services, and transfers and subsidies, due to vacant posts, and misalignment between the persal structureand the budget structure (the bulk of the personnel budget for the former agriculture function is incurred inprogramme 2 and delays in the implementation of land tenure reform projects and finalisation of land claims dueto COVID-19 restrictions on travelling to conduct activities such as research, consultation and verification of theclaimants. There were also delays in the processing of the Comprehensive Agricultural Support Programmeconditional grants to provinces.
COVID-19 spending
The Department has spent R18.3 million on goods and services: consumable supplies, for expenditure related tocleaning services, fumigation, and procurement of washing and cleaning detergents.
VOTE 32: ENVIRONMENT FORESTRY AND FISHERIES
60
• Programme 1: Administration: Spending was R124.7 million or 21.9 per cent higher than projected. This was primarilydue to processing of invoices for the forestry and fisheries office premises. These invoices were only received from theDepartment of Public Works and Infrastructure in December 2020.
• Programme 2: Regulatory Compliance and Sector Monitoring: Spending was R2.8 million or 2 per cent higher thanprojected due to payment for laboratory services required under the Enforcement Programme to support evidencesamples for poaching activities.
• Programme 4: Climate Change, Air Quality and Sustainable Development: Spending was R13.1 million or 3.1 per centhigher than projected mainly due to payment of outstanding international membership fees to the Green EnvironmentFund.
• Programme 6: Environmental Programmes: Spending was R512.3 million or 32.2 per cent higher than projected mainlydue to the payment of the presidential stimulus programme funds to public entities to commence with plannedprogrammes and initiatives.
• Programme 9: Fisheries Management: Spending was R1.8 million or 0.5 per cent higher than projected mainly due to theadvancement of transfers to the Marine Living Resources Fund earlier than scheduled.
Covid-19 spending
COVID-19 spending in the third quarter was R13.8 million for the procurement of personal protective equipment (PPE) andperiodic disinfection of the head office building.
VOTE 35: SCIENCE AND INNOVATION
61
• Programme 3: International Cooperation and Resources: Spending was R11.7 million or 19.5 per cent higher thanprojected. The variance was mainly on transfers and subsidies under Global Science international agreements. Mostpayments that were due in the second quarter were processed in the third quarter, which includes transfers to theNational Research Foundation and Academy of Science of South Africa for bursary payments.
• Programme 4: Research, Development and Support: Spending was R409.4 million or 14.8 per cent higher than projected.The variance was mainly due to transfer and subsidies under Strategic Science Platforms: some payments that were duefor payment in the second quarter were paid in November 2020 after the finalisation of the consolidated contract.
• Programme 5: Socio-Economic Innovation Partnership: Spending was R118.6 million or 10.6 per cent higher thanprojected due to payments made towards the following projects:
‒ Mining research, development and innovation for inclusive development: Payments were only processed inNovember after finalisation of submissions and contracts.
‒ Information communication technology: Budget changes mostly resulted from the late start of approval submissionsor contract amendments. Payment was made in quarter three instead of the second quarter.
‒ Advanced Manufacturing Technology Strategy: Submissions and contracts were processed for payment in December2020.
COVID-19 spending
• During the third quarter, the department spent R128.2 million on COVID-19 related initiatives. Expenditure was mainlyunder consumable supplies, for example: sanitisers, sanitiser dispensers, masks, etc. With the move to level three of theCOVID-19 lockdown and majority of the officials working from home, the department is anticipating less spending onCOVID-19 activities going into the fourth quarter
VOTE 36: SMALL BUSINESS DEVELOPMENT
62
• Programme 1: Administration: Spending was R1.6 million or 2 per cent lower than projected. This was mainly undergoods and services, specifically on computer services, travel and subsistence and training and development items due tooutstanding invoices and less training courses attended.
• Programme 2: Sector Policy and Research: Spending was R900 000 or 8.6 per cent lower than projected. This was mainlyunder compensation of employees due to vacancies and lower spending on goods and services items such as travel andsubsistence.
• Programme 3: Integrated Cooperative Development: Spending was higher than projected by R1.5 million or 3 per cent.This was mainly on communication and payments for capital assets items due to increased need to support the staffworking from home with computers and data as a number of staff members continue working from home.
• Programme 4: Enterprise Development and Entrepreneurship: Spending was higher than projected by R22.8 million or1.2 per cent driven by transfers and subsidies to SEFA due to redirected budget towards COVID-19 Emergency Fund. Thedepartment had initially projected to spent R693.3 million under the transfers and subsidies: Township EntrepreneurialFund from the Fund’s original budget of R800 million by end of December 2020, however, the entire R800 million budgethas already been spent towards COVID-19 Emergency Fund. This resulted in R106.7 million higher than projectedspending of the COVID-19 Emergency Fund.
COVID-19 spending
• In the third quarter of 2020/21, COVID-19 related spending amounted to R1.1 million mainly due to expenditure foroffice cleaning, fumigation and procurement of consumable supplies. An amount of R1.2 billion was transferred to SmallEnterprise Finance Agency for COVID-19: Emergency Fund to support struggling small businesses.
VOTE 38: TOURISM
63
• Programme 1: Administration: Spending was R900 000 or 0.4 per cent lower than projected.
• Programme 2: Tourism Research, Policy and International Relations: Spending was R3.4 million or0.9 per cent lower than projected. This is attributable to slow spending due to the COVID-19 lockdown.
• Programme 3: Destination Development: Spending was R18 million or 14 per cent lower than projecteddue to slow spending within EPWP and other programme projects due to the COVID-19 lockdownrestrictions that have limited physical interaction on projects.
• Programme 4: Tourism Sector Support Services: Spending was R4 million or 3.9 per cent lower thanprojected due to slow spending within Tourism Incentive Programme as a result of the COVID-19lockdown restrictions that are affecting the tourism industry.
COVID-19 spending
• During the third quarter, the Department has spent R534 thousand on personal protective equipment andperiodic disinfection of the head office building.
VOTE 39: TRADE, INDUSTRY AND COMPETITION
64
• Programme 1: Administration: Spending was R17.3 million or 2.9 per cent slower than projected. Thiswas mainly on compensation of employees due to vacant posts, and goods and services due to loweractivities during lockdown
• Programme 5: Consumer and Corporate Regulation: Spending was R10.8 million or 4 per cent slowerthan projected. This was largely driven by slow spending on compensation of employees due to vacantposts and, goods and services due to amongst others, education and awareness sessions on policies andlegislation that could not take place due to the lockdown restrictions.
• Programme 6: Industrial Financing: Spending was R341.5 million or 17.5 per cent slower than projected.This was mainly on incentive programmes namely manufacturing development incentives and the specialeconomic zones. The slow spending is attributed to low claims due to low business activity duringlockdown.
• Programme 10: Economic Research and Coordination: Spending was R10.7 million or 34.2 per centslower than projected for the programme. This occurred on compensation of employees due to vacantposts and on goods and services due to delays in commencement and completion of research work.
COVID-19 spending
• During the quarter, the department spent R538 thousand on the procurement of personal protectiveequipment for staff.
URBAN DEVELOPMENT AND INFRASTRUCTURE
65
76,9
0,12,1
18,3
5,8
42,4
9,8
72,7
0,12,1
19,5
5,7
44,4
9,6
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
CooperativeGovernance
Traditional Affairs Communicationsand Digital
Technologies
Human Settlements Mineral Resourcesand Energy
Transport Water andSanitation
R B
illio
ns
Q3 Actual expenditure
Q3 Projected expenditure
URBAN DEVELOPMENT AND INFRASTRUCTURE
66
R million
Main
Appropriation
Adjusted
Appropriation
Available
Budget
Q3 Actual
expenditure
Expenditure
as % of
Available
Budget
Q3 Projected
expenditure
Variance from
projected
expenditure
% variance
from projected
expenditure
COVID-19
Spending3 Cooperative Governance 96 234.0 106 942.8 106 942.8 76 904.8 71.9% 72 728.8 -4 176.0 -5.7% 1.6
15 Traditional Affairs 173.4 161.7 161.7 100.3 62.0% 93.6 -6.7 -7.2% 0.5
30 Communications and
Digital Technologies
3 394.5 3 280.9 3 280.9 2 085.5 63.6% 2 145.6 60.0 2.8% 1.7
33 Human Settlements 31 324.9 29 079.0 29 079.0 18 340.4 63.1% 19 459.8 1 119.4 5.8% 4.2
34 Mineral Resources and
Energy
9 337.0 7 567.1 7 567.1 5 815.7 76.9% 5 747.9 -67.8 -1.2% 2.7
40 Transport 62 036.3 57 354.7 57 354.7 42 399.7 73.9% 44 412.4 2 012.7 4.5% 31.9
41 Water and Sanitation 17 216.2 16 994.3 16 994.3 9 805.9 57.7% 9 631.0 -174.9 -1.8% 237.0
Total 219 716.3 221 380.5 221 380.5 155 452.3 70.2% 154 218.9 -1 233.4 -0.8% 279.6
VOTE 3: CO-OPERATIVE GOVERNANCE
67
At the end of the 3rd quarter, the department spent R76.9 billion or 71.9 per cent of the available budget.Spending at the end of the 3rd quarter is R4.2 billion or 5.7 per cent higher than projected.
• Institutional Development spent R5.3 billion or 9.1 per cent more than projected on transfers for thelocal government equitable share to municipalities. Funds were withheld in the second quarter due tonon-compliance and transferred in the 3rd quarter.
• Local Government Support and Intervention Management spent R1.4 billion or 12.2 per cent less thanthe projected due to a misalignment between drawdown dates on safety web, rejecting the payments tomunicipalities.
VOTE 15: TRADITIONAL AFFAIRS
68
At the end of the 3rd quarter, the department spent R110.3 million or 62 per cent of the available budget.Spending at the end of the 2nd quarter is R6.7 million or 7.2 per cent higher than projected.
• Institutional Support and Coordination spent R9.6 million or 18.4 per cent higher than projected due tohigher than projected transfers to the Commission for the Promotion and Protection of the Cultural,Religious and Linguistic Communities, as well as legal costs for traditional leadership dispute and claims.
VOTE 30: COMMUNICATIONS AND DIGITAL TECHNOLOGIES
At the end of the 3rd quarter, the Department spent R2.1 billion or 63.6 per cent of the total budget.Spending is R60 million or 2.8 per cent lower than projected.
69
VOTE 33: HUMAN SETTLEMENTS
70
At the end of the 3nd quarter, the department spent R18.3 billion or 63.1 per cent of the available budget.Spending is R1.1 billion or 5.8 per cent lower than projected.
• Informal Settlements spent R31.1 million or 39.2 per cent higher than projected mainly due to higherthan anticipated transfers of the Emergency Housing Grants.
• Rental and Social Housing spent R342.7 million or 38.6 per cent lower than projected mainly due to thenon-payment of the Social Housing Regulatory Authority’s: Consolidated Capital Grant and theInstitutional Investment Grant transfers.
• Affordable Housing spent R198.7 million or 51.5 per cent lower than projected mainly due to lower thananticipated Finance Linked Individual Subsidy transfers to the National Housing Finance Corporation.
VOTE 34: MINERAL RESOURCES AND ENERGY
71
At the end of the 3rd quarter, the Department spent R5.8 billion or 76.9 per cent of the total budget.Spending at the end of the third quarter is R67.8 million or 1.2 per cent higher than projected.
• Mineral and Energy Resources Programmes and Projects spent R117.5 million or 3.9 per cent higher thanprojected, mainly attributable to Integrated National Electrification Programme: Municipalities andpayments were made for the storage and warranty fees for solar water heater units, which was notbudgeted for in the current financial year.
VOTE 40: TRANSPORT
72
At the end of the 3rd quarter, the department spent R42.4 billion or 73.9 per cent of the total budget. Thedepartment spent R2 billion or 4.5 per cent lower than project.
• Rail Transport spent R1.4 billion or 16.8 per cent lower than projected mainly due to the withholding ofcapital transfer payments to the Passenger Rail Agency of South Africa.
• Public Transport spent R385.9 million or 4.9 per cent lower than projected mainly due to the withholdingof the transfer payment of the public transport network grant to Mangaung and Rustenburg municipalitiesas result of non-compliance with DORA and the revision of the grant payment schedule for Johannesburgand Cape Town municipalities.
VOTE 41: WATER AND SANITATION
73
At the end of the 3rd quarter, the department spent R9.8 billion or 57.7 per cent of the total budget.Spending at the end of the quarter is R174.9 million or 1.8 per cent higher than the projected
• Administration spent R105.6 million or 9.5 per cent higher than projected due to higher than plannedspending on operating leases and office accommodation
• Water Infrastructure Development spent R106.2 million or 1.4 per cent higher than projected due tospending on War on Leaks programme
