Third Quarter Report on National Expenditure

JOINT BUDGET COMMITTEE
17 February 2007
THIRD QUARTER REPORT ON NATIONAL EXPENDITURE

Chairperson: Ms L Mabe (ANC) [NA]; Mr B Mkhaliphi (ANC) [NCOP; Mpumalanga]

Document handed out:
Draft Committee Report on Third Quarter National Expenditure 2006/07 Financial Year: Part1 & Part2

SUMMARY
The Committee received a briefing by its Parliamentary Researcher on the Quarterly Report National Expenditures 2006/07 reflecting department spending for the third quarter ending 31 December 2006. The following concerns were identified based on his research:
- The slow expenditure of capital budgets
- The ability of provincial agencies to spend transfer funds they receive in the final quarter
- Departments having to spend a large part of the budget during the final quarter of the financial year
- Projected under expenditure by Parliament, Home Affairs, Justice and Constitutional development and       Water Affairs.

The Committee asked the researcher to establish the reasons for each department's under or over-spending and to provide these in the amended Committee Report.

MINUTES
Total Expenditure; Current Expenditure; Transfers, and Capital Expenditure
Mr Abdullah Ganief (Parliamentary Researcher) briefed the committee on Total Expenditure,  Current Expenditure, Payment Transfers and Capital Expenditure for the third quarter of the 2006/07 financial year (see document).

Table One showed the five government departments with the highest expenditure at the end of the third quarter and also illustrated any projected over- or under-expenditure at the end of the financial year. Although Education had spent the highest portion (91%) of its annual budget, based on its projected expenditure for the final quarter and previous history, it would not overspend its budget.

Table Two demonstrated the five government departments (Sport, Public Enterprises, Statistics South Africa, Provincial and Local Government, Water Affairs and Forestry) with the lowest expenditure at the end of the third quarter and also illustrated any projected under-expenditure at the end of the financial year. The Committee would be engaging with Statistics South Africa and Water Affairs and Forestry to evaluate the reasons for the under-expenditure and the impact this will have on its targets.

Table Three illustrated how all departments had spent to date. Only Defence predicted overspending in the final quarter.

Table Four, Five and Six demonstrated current expenditure for all departments as well as highlighting the top five highest  and lowest spenders.

Table Seven, Eight and Nine illustrated transfer payments to date to all departments as well as highlighting the top five highest and lowest transfer expenditure.

Table Ten represented overall capital expenditure at the end of the third quarter of the 2006/7 financial year for all department. Tables Eleven and Twelve showed highest and lowest capital expenditure performers. 

Mr Ganief identified the following concerns based on his research:

- The slow expenditure of capital budgets
- The ability of provincial agencies to spend transfer funds they receive in the final quarter
- Departments having to spend a large part of the budget during the final quarter of the financial year
- Projected under expenditure by Parliament, Home Affairs, Justice and Constitutional development and       Water Affairs.

Discussion
Ms Mashigo and Ms.Mabe (ANC) referred to Table 1 and asked how the Committee could exert control over the high expenditure by some departments.

Ms Fubbs (ANC) referred to the Eastern Cape Health Department as an example and asked what the Committee was going to do with provinces which are failing to manage their funds.

Mr Mkhaliphi (ANC) answered that they need to call all such government departments to account to the Joint Budget Committee how they spend their budget.

Mr Rabie (DA) referred to Table 2 which showed the Department of Sport and Recreation as the lowest spenders and wondered how far they are in terms of World Cup preparations.

Ms Mabe (ANC) responded that they needed to invite the Portfolio Committee on Sport and Recreation to give an account of how far the Department is in its World Cup preparations.

Ms Chikunga (ANC) proposed that the Committee should meet the Portfolio Committee on Sport and Recreation.

Mr Mkongi (ANC) noted the overspending of the Department of Home Affairs and suggested that Committee should engage with the Home Affairs Portfolio Committee.

Mr Goeieman (ANC) commented on the transfers trends which he thought were worrying. How was the Committee going to monitor the funds after the transfers had been made?

Ms Fubbs (ANC) asked if there was any monitoring process in place of the transfers that the agencies were receiving.

Ms Dambuza (ANC) said that the departments have to clarify why they are not complying.

The researcher was asked to obtain the reasons that each of the problematic departments were not complying and furnish these in the next draft of the report.
 
Meeting adjourned.