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HIGH LEVEL OVERVIEW

WATER SECTOR FINANCIAL PERFORMANCE

25 February 2010

Masibambane Coordinating Committee Meeting

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Content

o Overview of Water Sector Expenditure as at 31 December 2010

o Challenges with Water Sector Financial Information

o Detailed expenditure analysis per quadrant

o Donor Budget Allocation for 2010/11

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WATER SECTOR 2009/10 FINANCIAL SUMMARY: 31 DEC 2009

Budget Actual %

Donor Projects R516m R166m 32

Prog 3 R2,795m R1,688m

60

Budget Actual %

Capital R3,985m R2,010m 50

Recurrent R8,060m R6,081m 75

2009/2010 WS Grand total budget = R19.5b2009/10 Expenditure to 31 Dec 2009 = R12.8

1

3 4

2

Quadrant 4Non DWANon WS specific

Quadrant 3DWA

WR specific

Quadrant 2Non DWA

WS specific

Quadrant 1DWA

WS specific

Budget Actual %

Prog 2 - Cur R1,797m R1,143m 64

Prog 2 - Cap R2,169m R1,679m 77

Budget Actual %

Recurrent R47m R5m 9

n/a – information not available

Total Q2Bud= R12.1bExp= R8.1b

Total Q1Bud= R3.3bExp= R1.9b

Total Q3Bud= R4.0bExp= R2.8b

Total Q4Bud= R0.05b

Exp =0.005b

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CHALLENGES WITH SECTOR INFORMATION

Information on actual expenditure is unavailable for thefollowing items:

• Equitable Share-This is unconditional grant with no formal reporting requirements, only Payment Schedules could be availed by CoGTA

• Financial Management Grant and Local Government-Expenditure Reports available for up to 30 June 2009

• Municipal Systems Improvement Grant-Expenditure Reports available for up to 31 August 2009

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CHALLENGES WITH DONOR FUNDING

– The delay in receipt of funds from donors led to limited implementation of donor projects in 2009/10 financial year

– Expenditure to 31/12/2009 has therefore been low due to the risk averse approach adopted by the Accounting Officer in 2009/10 in regard to expenditure on donor funds informed by the audit risk related to spending funds not yet received.

– The delay in receipt of funds was been occasioned by administrative matters arising from the donors’ side

– The CFO has authorized limited use of Voted Funds to support donor projects as the department awaits the receipt of funds

– There is no realistic expectation of receiving the outstanding R350m out of the R476m budgeted for 2009/10

Overview of Expenditure Performance April to December 2009

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QUADRANT VIEW OF WATER SECTOR BUDGET & EXPENDITURE TO 31 DEC 2009

Quadrant 1: DWA - Water Services Specific         Quadrant 2: Non-DWA - Water Services Specific          

  2009/2010   2009/2010

  Budget Expend.

% Expenditure

  Budget Expen WS Budget WS Expend.% WS Expenditure  R'000 R' 000   R'000 R'000 R' 000 R' 000

    - Municipal Infrastructure Grant (MIG) (45%) 8,852,830 4,465,481 3,983,774 2,009,466 50%

- Donor Funding (EU, DCI, Flemish, Swiss 515,987 165,503 32%    

> EU (Contract signature - Sep 07) 480,000 143,994 30% Hospital Revitalisation Grant (5%) 3,490 1,992 174 100 57%

> Irish Aid 35,987 21,510 60% Integrated Housing and Human Settlement Dev Grant (5%) 12,442 10,350 622 517 83%

> Flemish - - 0% Infrastructure Grant to Provinces (2.5%) 9,300 6,811 233 170 73%

> Swiss - - 0%      

  515,987 165,503 32%    

       

- Current Budget Prog 3: Water Services 719,225 326,653 45%   33,730,656 4,484,633 3,984,803 2,010,254 50%

- Indirect Grant Water Services Operating Subsidy 1,113,778 809,091 73%    

- Water & Sanitation @ Clinics and Schools 350,000 206,482 59% - Equitable Share (34%) 23,847,558 17,884,877 8,059,628 6,080,858 75%

- Bulk Infrastructure 611,500 345,373 56%    

  2,794,503 1,687,599 60%   23,847,558 17,884,877 8,059,628 6,080,858 75.4%

Total 3,310,490 1,853,102 56% Total 57,578,214 22,369,509 12,044,430 8,091,112 67.2%

                   

   Quadrant 3: DWA - Non-Water Services Specific     Quadrant 4: Non-DWA - Non-Water Services Specific

  2009/2010   2009/2010

  Budget Expend.

% Expenditure

  Budget Expen WS Budget WS Expend.% WS Expenditure  R' 000 R' 000   R' 000 R'000 R' 000 R' 000

Programme 2 - Water Resources        

Current 1,689,004 1,071,140 63.4% - Local Government Financial Management Grant (10%) 299,990 41,867 29,999 4,187 14%

Augmentation of Trading Account          

+ Infrastructure 2,169,201 1,678,486 77.4% - Municipal Systems Improvement Grant (10%) 200,000 5,272 20,000 527 3%

+ KOBWA 107,835 71,890 66.7%    

         

Total 3,966,040 2,821,516 71.1% Total 499,990 47,139 49,999 4,714 9.4%

                     

  Figures based on Transfers, NOT actual Expenditure Total Sector 19,370,959 12,770,444 65.9%

  Latest information available as at end of August 2009

  Latest information available as at end of June 2009

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QUADRANT 1: DONOR FUNDS EXPENDITURE PER PROVINCE

REGION EXP TO DEC 31

BUDGET 2009/10

EXP TO BUDGET

Sector Partners (SALGA, DCGTA, CBOs, DoH, Regional Offices, Municipalities, etc)

90,451,879 270,702,540 33%

Eastern Cape 6,181,891 20,722,326 30%

Free State 2,541,195 25,000,000 10%

Gauteng 11,900,601 17,806,547 67%

KwaZulu Natal 1,000,000 20,000,000 5%

Limpopo 21,509,621 35,987,000 60%

Mpumalanga 10,108,484 20,800,000 49%

Northern Cape 11,794,831 33,200,000 36%

North West 1,849,543 28,920,000 6%

Western Cape 8,165,429 19,394,000 42%

Total

165,503,472

492,532,413 34%

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QUADRANT 1: PROGRAMME 3: WATER SERVICES BY REGION

Key Focus AreaExpenditure Year to 31.12.2009

Budget VarianceExp YtdvsBudget

Policy and Regulation 46,024 71,442 25,418 64%

KFA10A Provisioning Policies 1,450 2,644 1,194 55%

KFA11A Water Sector Policies 34,048 52,962 18,914 64%

KFA12A Institutional Policies 4,439 6,440 2,001 69%

KFA14A Africa Initiative 111 112 1 99%

KFA18A Water Services Administration 5,976 9,284 3,308 64%

         

Operations 1,641,575 2,723,061 1,081,486 60%

KFA10B Water and Sanitation Services 625,650 1,295,708 670,058 48%

KFA11B Water Sector Support 79,766 132,157 52,391 60%

KFA12B Institutional Support 30,285 65,156 34,871 46%

KFA13B Transfers 22,506 13,984 -8,522 161%

KFA14B Africa Co-operation 0 919 919 0%

KFA18B Water Services Support 74,277 101,359 27,082 73%

KFA21B Operations of Water Services 809,091 1,113,778 304,687 73%

  R 1,687,599 R 2,794,503 R 1,106,904 60%

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QUADRANT 1: PROGRAMME 3: WATER SERVICES BY REGION

Regional Expenditure Year to 31.12.2009

Budget VarianceExpvs

Budget

KwaZulu Natal 121,686 206,271 84,585 59%

Mpumalanga 212,076 337,776 125,700 63%

Eastern Cape 193,404 363,492 170,088 53%

Northern Cape 106,298 127,835 21,537 83%

Western Cape 15,495 37,539 22,044 41%

North West 83,704 163,376 79,672 51%

Free State 61,343 133,551 72,208 46%

Limpopo 716,193 1,000,182 283,989 72%

Gauteng 54,411 70,046 15,635 78%

Head Office - Ops 76,377 282,993 206,616 27%

Head Office - P&R 46,024 71,442 25,418 64%

FORESTRY Mis allocationds 588 0 -588  

  R 1,687,599 R 2,794,503R 1,106,904 60%

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QUADRANT 2: MIG EXPENDITURE PER PROVINCE

Province

MIG BUDGET 2009/10 as per

DoRAQ3 MIG Cumulative

Expenditure 2009/10

Estimated MIG WS Budget 2009/2010

(45% of DoRA allocation)

Q3 - MIG WS Cumulative Expenditure

(2009/10)

% MIG WS Expenditure

2009/10EC 1,968,928,935 880,961,579 886,018,021 396,432,711 45%FS 745,500,913 347,625,000 335,475,411 156,431,250 47%GT 282,058,395 110,783,000 126,926,278 49,852,350 39%KZ 2,107,578,706 1,238,566,000 948,410,418 557,354,700 59%LP 1,446,349,765 835,573,278 650,857,394 376,007,975 58%MP 838,913,989 387,561,000 377,511,295 174,402,450 46%NC 307,242,339 118,423,000 138,259,053 53,290,350 39%NW 892,573,549 374,236,000 401,658,097 168,406,200 42%

WC 271,363,918 171,751,908 122,113,763 77,288,359 63%

Grand Total 8,860,510,509 4,465,480,765 3,987,229,729 2,009,466,344 50%

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EXPENDITURE ANALYSIS QUAD. 2: EQUITABLE SHARE

ProvinceEquitable Share Sector

Budget 2009/10WS - Equitable Share

Budget 2009/10Equitable Share Transfer

to Dec 2009

WS Equitable Share Transfer

to Dec 2009 (34% of Total

Transfer)

% of WS Transfer to

BudgetEC 3,518,385,000 1,219,197,590 2,638,792,392 897,189,413 74%FS 2,255,756,000 803,936,350 1,691,815,719 575,217,345 72%GT 3,991,532,000 1,574,355,397 2,993,647,637 1,017,840,197 65%KZ 4,373,543,000 1,485,235,028 3,280,114,018 1,115,238,766 75%LP 2,914,792,000 959,933,379 2,186,093,935 743,271,938 77%MP 2,303,532,000 665,849,175 1,727,649,756 587,400,917 88%NW 2,197,506,000 681,844,966 1,648,127,643 560,363,398 82%NC 736,676,000 214,650,750 552,507,655 187,852,603 88%WC 1,555,836,000 454,625,013 1,166,127,747 396,483,434 87%Grand Total 23,847,558,000 8,059,627,648 17,884,876,502 6,080,858,011 75%

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QUADRANT 3: DWAF WATER RESOURCES

  2009/2010

  Budget Expend.

% Expenditure

  R' 000 R' 000

Programme 2 - Water Resources      

Current 1,689,004 1,071,140 63.4%

Augmentation of Trading Account      

+ Infrastructure 2,169,201 1,678,486 77.4%

+ KOBWA 107,835 71,890 66.7%

     

Total 3,966,040 2,821,516 71.1%

       

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EXPENDITURE ANALYSISQUADRANT 4: NON-DWAF, “NON WATER SECTOR” (CAPACITY

BUILDING GRANTS)

Quadrant 4: Non-DWA - Non-Water Services Specific

 2009/2010

 Budget Expen WS Budget WS Expend.

% WS Expenditure

 R' 000 R'000 R' 000 R' 000

 

- Local Government Financial Management Grant (10%)

299,990

41,867

29,999

4,187

14%

   

- Municipal Systems Improvement Grant (10%)

200,000

5,272

20,000

527 3%

   

   

Total 499,990 47,139 49,999 4,714 9.4%

          

  Latest information available as at end of June 2009

  Latest information available as at end of August 2009

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Update on Donor Budget allocation process for 2010/11

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During the 2010/11 financial year the sources of funding are two fold-

i. 2009/10 Budget allocations that are unspent “roll overs” at 31 March 2010

ii. A once of amount of R200m for 2010/11 earmarked by National Treasury for MSB3 exit strategy (this is essentially the final year that MSB 3 donor funding will be available)

On the 2 December 2009 Top Management appointed an internal task team to make recommendations

regarding the allocation of the above funds to key priority areas

To date the following progress can be reported regarding the 2010/11 MSB 3 Budget Allocation process-

– Work session held on 22 January 2010 with all (“MSB”) Project Managers where they were briefed about Task team role, 2009/10 “roll overs” were determined using cash flow projections from all project

– On 28 Jan 2010 Task Team appointed smaller work group to make recommendations and interface with MSB project managers regarding their 2010/11 budget requests and motivations

– On 16 Feb 2010 Work Group presented recommendations to Task Team who have made their input and this will now be factored into DBA 2010/11 and a submission is being prepared for presentation to Top Management for their consideration and approval.

Update on Donor Budget Allocation 2010/11

END

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