Under-spending on HIV & AIDS Life Skills Grants: North-West Provincial Department of Education: public hearings Day 2

Meeting report

Presentation by the National Treasury
In his presentation, Mr Edgar Sishi (Director - National Treasury) said that the education budgets of the majority of provinces had, particularly in relation to compensation budgets, been placed under significant pressure. As of 31 December the average total overspend figure of the provinces stood at R1.7 billion. Increases were highest in the Eastern Cape, North-West, Limpopo and Gauteng provinces. A number of provinces were, however, projecting an under spend on their goods and services budgets. There was a projected overspending of R211.2 million in seven provinces on capital spending. Transfers were at R8.1 billion (90.5%) against adjusted budgets.

With regard to the Public Ordinary Schools Programme, the Eastern Cape and North-West provinces had spent their budgets quickest when compared to the same time in the last financial year.  There had been a projected under-expenditure of the HIV and AIDS Life Skills Grant of R1.628 m. Year-on-year growth for spending on this grant was negative with provinces spending 10% less compared to the same time last year. The largest declines were noted in the Eastern Cape (-24%), Mpumalanga (-28%) and North-West (-47%) provinces. National Treasury had discussed with provinces the fact that, as this was a purpose-specific grant, there could not be any projected over-expenditure.

Spending in relation to the National School Nutrition Programme had accelerated quite significantly (46%) compared to the same time last year. Most notable in this regard were Gauteng (78%), the Western Cape (72%) and Mpumalanga (66%).

Presentation by the North-West Province Department of Education
Mr Errol Gradwell, Acting Superintendent-General, Department of Education, North-West Province, said that the Department’s percentage spent of its allocated budget was 73.7%. Monitoring was undertaken by the 36 Life Skills Specialists in the Districts currently. The monitoring exercise was undertaken by child-care coordinators, of which there were 35. There was, however, an acute shortage of transport which hampered the actual work done on the ground. Although the 35 child-care coordinators were allocated across eight schools each for monitoring of the Care and Support Programme, they extended their monitoring functions beyond these eight schools. Further, in addition to monitoring also being undertaken by the Department’s Internal Audit Unit, regular meetings were convened with the HIV/AIDS Life Skills Unit.

Factors that contributed to the Department’s under-expenditure included problems in the procurement of first-aid kits. The Department had, in early 2009, initiated the process of purchasing top-up items for first-aid kits for schools. The suppliers who were given the tender failed to deliver items to the value of R200 740.60. The order was cancelled on 2 February 2010. Secondly, there was the issue of career guides. During August 2009 the Department purchased career guides to the value of R519 840.00. Payment in this regard was however only processed on 14 March 2010 due to the service provider being unable to provide the Department with a valid tax clearance certificate. Thirdly, there was the matter of the tender for hygiene packs for orphans and vulnerable children. A tender for the purchase of hygiene packs was awarded. The amount allocated for this was R4 519 200.00. The first delivered consignment however differed from the approved sample. Payment had subsequently become a litigation issue. The order (amounting to R3.6 million) had as yet not been cancelled and a request had been made for a rollover of funds (R3.6 million) to enable the Department to pay the service provider once the error with the products had been addressed. Once this issue was resolved, expenditure in respect of this cost centre would register 100%.

Monthly as well as quarterly reports were submitted to the Life Skills Coordinator at the national Department of Basic Education, and the Senior Management team of the North West Department of Education. The Provincial Treasury, who received quarterly reports only.

Discussion
Mr Makhubela (Limpopo, COPE) asked how the Department planned to address the lack of transport. To how many schools did the child-care coordinators extend their activities?

Mr Gradwell answered that there had been budgetary constraints which prevented the Department from purchasing vehicles. This year it had however purchased the necessary vehicles. The number of schools varied. As some areas offices were in densely populated areas, there were more and bigger schools and this would determine how many schools, over and above the mandatory eight, to which child-care coordinators extended their activities.

Mr C De Beer (Northern Cape, ANC) asked how many were reached through the grant money that the Department had spent.

Mr Gradwell replied that this information would be forwarded to the Committee in writing.

Mr Harris (Western Cape, DA) asked whether the Department could explain why there was, despite its explanations around tender irregularities, still an amount not accounted for. How did the Department spend only 73% of the grant two months after it had projected 100% expenditure?

Mr Ashraf Suliman, Acting Chief Financial Officer, North West Department of Education, said that the outstanding 40% was due to the issue around the hygiene packs. If these had been paid for, the Department would have noted 100% expenditure.

The Chairperson asked what specific plans the Department had in place to correct its constant under-expenditure.

The Rev. Johannes Tselapedi, Member of the Executive Council (MEC) for Education, North West, said that the new Chief Director had put plans in place to address this issue. A spending plan had been drawn up and the Department had already initiated aspects of this plan. The Department was not proud of its spending record and was determined to correct this.

Mr Sishi said the budget for HIV/AIDS for the province had been cut due to poor spending and funds not being spent in line with the purposes of the grant. To use the administration budget for the purposes of purchasing vehicles was stretching the terms of the budget. He asked why the tender for career guides was awarded without a tax clearance certificate.

Mr Suliman replied that the Department had increased its budget for the purchasing of vehicles for its employees by R5 million, which was taken from the equitable share and not the grant. During the tender process there had been a valid tax clearance certificate. This had, however, expired by the end of the payment period.

The Chairperson asked what the contents of the hygiene packs were and how they related to HIV/AIDS. How many educators and schools were there in the province? Where, in relation to the R3.6 million rollover requested and the contract amount of R4.5 million, would the shortfall come from?

The Department advised the Committee that the hygiene packs consisted of basic necessities which the Department believed children needed to acquire in order to access schooling, such as toothbrushes, toothpaste, Vaseline and sanitary pads for pubescent girls. The target group in this regard were children attending farm schools and indigent pupils in urban areas. They were purchased in order to assist in the Education for All Campaign.

Mr Gradwell continued there were 28 000 educators and 1 732 schools in the province.

Mr Ashraf Suliman added that if the supplier had delivered before the end of March the province would have been willing to take the remaining R900 000 from its provincial allocation in order to make up for this shortfall.

Mr Harris said it would be useful if National Treasury could look at the Department’s new spending plan to either approve it or raise issues around it.

Mr Sishi agreed to do this.

Mr De Beer said that the Department should, in its spending plan, include how many people it would reach through this spending.

The meeting was adjourned.