ATC100601: Report on 3rd  Quarter Conditional Grants Spending Patterns on HIV and AIDS (Life Skills Education) for the 2009/10 financial year

NCOP Appropriations

The Report of the Select Committee on Appropriations on the third quarter conditional grants spending patterns on HIV and AIDS (Life Skills Education) for the 2009/10 financial year dated 01 June 2010.

 

1. Introduction

 

1.1 Background

The Select Committee on Appropriations (the Committee) invited identified provincial departments of education, who were either under-spending or over-spending on the HIV and AIDS Grant, to come and make a presentation on their third quarter spending on 2009/10 financial year. The statistics on spending patterns were published by National Treasury in March 2010. 

 

The Committee meetings took place on 20 and 21 April 2010.  

 

1.2 Terms of reference 

The public hearings formed part of the Committee’s ongoing interaction with provinces to monitor their spending on conditional grants allocated to them. A framework for each grant sets out the purpose of the grant, measurable objectives, conditions, allocation criteria, and past performance among other things.

 

Provincial departments of education were requested to make presentations on HIV and AIDS Grant and to take into consideration the following:

• Data trends in allocations, transfers and actual expenditure of conditional grants of the department;
• Assessment of department’s monitoring capacity for the 2009/2010 financial year and indicate under/overspending and what capacity constraints that impacted on these outcomes;
• Report whether monthly reports are received from receiving departments and or municipalities, and if not, what the departments are doing in order to ensure compliance with monthly reporting; and
• Medium-term strategic plans.

 

The provincial departments of Education of Eastern Cape, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape and KwaZulu Natal were identified and invited. However, the provincial departments of Education of Western Cape and KwaZulu-Natal did not attend, and there were no notifications that they were unable to attend.

 

The National Treasury was invited to brief the Committee on the third quarter spending of the above-mentioned provincial departments. 

 

2 Presentations

 

2.1 National Treasury

 

The National Treasury reported that the total expenditure for all provincial departments of education is R94.7 billion (or 79 per cent) of the R124.8 billion adjusted budget as at 31 December 2009. The R124.8 billion adjusted budget for education comprises 41 per cent of the total provincial adjusted budgets. This spending shows an increase of R13 billion compared to R81.7 billion that was spent over the same period in the 2008/09 financial year.

 

The National Treasury added that provincial departments of education that had contributed to the spending increase of R13 billion (15.9 per cent) areEastern Cape (which has over-spent by 22.5 per cent); North West (which has over-spent by 19.3 percent); Limpopo (which has over-spent by 18.7 per cent) and Gauteng (which has over-spent by 18.1 per cent). On year-on-year growth, the National Treasury said that provincial departments have spent 15.9 per cent of the projected over-spending of R1.7 billion in 7 provinces. The National Treasury further reported that Eastern Cape spent R649 million on the compensation of employees. Current spending on education personnel amounts to R72.7 billion (which is 74.5 per cent of the education personnel adjusted budget of R97.6 billion). Furthermore, spending by provincial departments of education, from lowest to the highest, is 72.3 per cent for the Free State; 72.4 per cent for the North West); 74.9 per cent for Gauteng and 77.6 per cent for the Eastern Cape. With respect to total projected over-spending of R1.7 billion in 6 provinces Eastern Cape spent R559.4 million (which is the highest amount spent by a single province) due to the implementation of Human Resource Operational Project Team. KwaZulu-Natal spent R387.4 million (which is the lowest amount spent by a province). 

 

With respect to the conditional grants, the National Treasury reported that the overall spending by provincial departments has declined by 10 per cent compared to the same period in the previous year. The largest declines in spending were identified in the provincial departments of education of Eastern Cape, Mpumalanga and North West. The National Treasury concluded that the spending on the HIV and AIDS grant indicates that national and provincial departments of education need to manage cash flows more prudently.

 

The National Treasury reported that the budget of the North West’s Provincial Department of Education for the HIV/AIDS had been cut based on the fact that this department had been spending grant funds on programmes not meant for. The National Treasury added that this provincial department had used the grant funds meant for administration purposes to purchase capital asset like vehicles. The National Treasury said that was not allowed. Furthermore, the National Treasury reported that the provincial department of education of North West was identified as one of the provincial departments with noticeable supply chain management challenges.

 

The National Treasury informed the Committee that the provincial departments of education of Mpumalanga, Eastern Cape and North West were spending lower than expected in comparison to the same period in the 2008/9 financial year. With respect to the Provincial Department of Education of Northern Cape, the National Treasury said this provincial department was improving on spending on the HIV/AIDS programme. But the National Department of Basic Education disputed this and reported that the Northern Cape’s Provincial Department of Education was the only provincial department that had not submitted its performance reports as required by the Division of Revenue Act (DORA). The Department of Basic Education said this was in violation of Section 12 of the DORA.

 

2.2 The Province of the Eastern Cape

The Eastern Cape’s Provincial Department of Education (PoEC) reported that they have been allocated R30.17 million for the HIV and Aids Grant and they have planned to spend R22.63 million, but spent R22.63 million (or 59 per cent) on this grant. Put differently, the PoEC have under-spent by R4.94 million.

 

The PoEC reported that 1 100 educators were trained on: the integration of HIV and AIDS issues into curriculum; the coordination of all Life-skills HIV and AIDS projects, seminars, conferences and campaigns; report writing and monitoring and evaluation of the programme (Integration of HIV and AIDS into curriculum). The PoEC added that 5 314 Early Childhood Development practitioners were trained on HIV and AIDS broad games; and 10 000 learners were trained in peer education. The PoEC further reported that the afore-mentioned learners coordinated campaigns against teenage pregnancy and, drug and substance abuse in 800 schools and its surrounding communities. The PoEC further reported that Orphans and Vulnerable Children’s programme in 300 schools was rolled out, and that these programmes provided academic materials and psycho-social support to orphans and vulnerable learners with an aim to promote access and retention of this category of learners in the schooling system. The PoEC further reported that the Health Advisory Committees in 300 schools were established and capacitated to ensure that there are functional Life-skills HIV and AIDS programmes in schools.

 

The PoEC further reported that reasons for its under-expenditure are as follows:

• Fewer activities in the business plan were planned for the third quarter of the financial year because the emphasis is on examination preparations during October/November; this further affects the availability of the targeted groups (learners and educators) for the Life-skills HIV and AIDS programme; and
• Transfer of conditional grant’s money was done in tranches. Some of these transfers are made in October and it is not appropriate to conduct training during this time of the year owing to the end-of-the-year examinations. Implication is that money that is transferred during this time remains unspent due time table priorities.

 

The PoEC informed the Committee that the mechanisms to deal with the under-Expenditure on the HIV and AIDS conditional grant as reported by theEastern Cape are as follows:

 

• To motivate for rollover from 2009/10 financial year to deal with the under-expenditure of R2.59 million; and
• The under-expenditure will be off-set by the accruals of R2.52 million for the 2009/10 financial year.

 

 

With respect to reporting, the PoEC reported that:

• The monthly in-year monitoring meetings were held and monthly reports were compiled and submitted to relevant stakeholders;
• The reports were submitted to the National Department of Education (as the transferring Department);
• All schools implementing the training programme have been monitored by district department of education; and
• Annual evaluation for the 2009/10 financial year shall be conducted on 03-07 May 2010 and a report will to be forwarded to National Department of Education.

 

Furthermore, the PoEC reported that irregularities were suspected on spending HIV& AIDS Life-skills grant, and that the Special Investigation Unit was to conduct investigation and charges against certain employees have been formulated and a disciplinary hearing date has been scheduled for 19 April 2010.

 

2.3 The Province of Limpopo

The Limpopo’s Provincial Department of Education (PoL) reported that an initial amount of R25.88 million was allocated for the financial year 2009/10 and that this amount has been spent. The PoL further reported that the roll-over from the 2008/09 financial year was R3.9 million. This roll-over, reported thePoL, has pushed the adjusted budget for the 2009/10 financial year to R29.79 million. Furthermore, the PoL reported that only R0.6 million of the R3.9 million rollover was spent. And that this insignificant spending level has resulted in the total expenditure for the 2009/10 financial year to amount to R26.51 million. The PoL reported that it has under-spent by 11.2 per cent (or by R3.28 million). This amount reduces to R2.8 million when taking into account commitments made.

 

The reasons for under-spending were reported as follow:

·         There was a delay in the appointment of home-based care givers and those care givers were appointed towards the end of the 2009/10 financial year; and

·         The appointment of the service provider for the training of adult-based education and training coordinators and practitioners did not take place due to delay in the supply chain processes.

 

The PoL informed the Committee that there are spending intervention plans for 2010/11 financial year in order to improve on spending. These interventions include: assuring that all activities which involve supply chain processes shall be conducted at the beginning of the financial year; appointment of additional staff to coordinate HIV and AIDS (Life Skills) grant at a district level to assist 3 officials at the head office who are under-staffed.

 

2.4 The Province of Mpumalanga

The Mpumalanga’s Provincial Department of Education (PoM) reported that it was allocated R14.63 million for the 2009/10 financial year and a roll-over of R0.36 million. The PoM further reported that the actual expenditure was R8 116 million as at 31 December 2009.

 

The PoM reported that it had planned to train 1 800 educators on sexuality education and prevention of drugs and substance abuse, but trained 2 173 educators. The PoM further reported that it had planned to train 120 master trainers but trained 118 master trainers. The PoM further reported that it had planned to train 600 members of the school management teams on policy development but it managed to train 450 members. Furthermore, the PoMreported that it planned to convert 600 schools into nodes of care and support for Orphaned and Vulnerable Children (OVC) but it managed to convert 339 schools. And in addition, 1 692 educators and other support staff were trained on OVC programmes against a target of 1 800, and one coordinated service delivery campaign was held and it reached 43 schools.

 

The PoM reported that 1 680 grade ten learners were educated on a peer support programme which intended to promote healthy living styles, the initial target was to empower 3 000 Learners. The PoM further reported that one Soul Buddyz Congress was hosted and 450 delegates attended the event, and 637 Soul Buddyz clubs have been established.

 

The PoM reported that, with respect to Learner-Teacher Support Materials, it had planned to train 5 000 educators and 3 600 learners, but it managed to train 4666 and 3 000 respectively. In terms of advocacy, the PoM reported that 9 open discussion workshops were conducted against a target of 12 workshops. The PoM further reported that only 12 School Governing Bodies (SGBs) were trained out of 48 clusters of SGBs. Furthermore, the PoMreported that 3 workshops on Faith Based Organizations were conducted.

 

With respect to monitoring, evaluation and reporting, the PoM reported that monitoring is done as per the requirements of the Division of Revenue Act and the Public Finance Management Act. This is done, said the province, within the broader monitoring process led by the Department of Basic Education (DoE). The PoM further reported that 3 life skills officials monitor and support the implementation of the programme on a quarterly basis. The PoM said it has employed 10 life skills regional officials who monitor the implementation of the programme by visiting the schools and submitting reports to the provincial office. In addition, the PoM reported that quarterly and annual reports are compiled and sent to the DoE and National Treasury by the provincial officials reporting on financial and non-financial indicators.

 

The PoM reported that a provincial evaluation team consisting of officials responsible for the grants conducted pre-evaluation of 10 to 20 schools. This was done before the final evaluation by the national department was conducted at the end of the financial year. The PoM further reported that the national coordinator of life skills and the Development Support Directorate monitored the implementation of the programme twice a year as per Grant Framework. Furthermore, the PoM reported that 12 monthly reports, 4 quarterly reports and annual reports were compiled and submitted to the National Department of Basic Education and National Treasury, and that 4 regions submitted monthly, quarterly and annually reports to the Regional Director and Provincial Officer.

 

The PoM reported that a number of issues have contributed to under-spending, including a system used in the province which entailed delivery of activities by the Education department and payments processed utilizing the equitable shares budget. The province reported that it was allowed to claim back amounts utilized from Provincial Treasury. Furthermore, the PoM reported that it had cash flow challenges as a result there were delays in effecting payments of service providers; and that payment schedule for the third quarter was transferred at the end of October of the financial year which had affected spending of the grants in the third quarter.

 

The PoM informed to the Committee that the proposed solutions to its challenges include reviewing the provincial arrangement with Provincial Treasury which should be relooked at to resolve the cash flow challenges. In addition, the PoM reported that curriculum support staff is to be invited to assist with the monitoring of the delivery of the programme at schools.

 

2.5 The Province of Northern Cape

The Northern Cape’s Provincial Department of Education (PoNC) reported that it was allocated R3.83 million, and it had spent R3.68 million (96 per cent) as at 31 December 2009. 

 

On achievements, the PoNC reported that a total of 4 485 learners were reached through advocacy programmes to raise awareness on HIV and AIDS. ThePoNC presented that 84 schools, Adult-Based Education and Training, and Further Education Training College sites are being monitored; 105 learners were motivated through the Matric Intervention programme; 33 educators were trained in Care and Support programme; 74 educators were trained as Lay Counsellors; 25 educators were trained in Drug Abuse; and 196 learners were trained as Peer Educators.

 

The PoNC further reported that an approved monitoring tool was utilised by schools and district offices to monitor the implementation of the Life Skills and HIV & AIDS Education programme. The PoNC reported that bi-monthly meetings were held with districts to monitor progress and address challenges. ThePoNC added that monthly, quarterly and annual reports were submitted by the district offices. However, the PoNC informed the Committee that there were challenges that were experienced in districts due to, mainly, inavailability of coordinators.

 

The PoNC informed the Committee that there are no Life Skills and HIV & AIDS coordinators in the Siyanda and John Taolo Gaetsewe Districts and this contributed to under spending. In addition, the PoEC reported that it did not have clerical staff in the Life Skills and HIV & AIDS Unit to capture data and process payments.

 

2.6 The Province of North West

The North West’s Provincial Department of Education (PoNW) reported that it was allocated a total of R12.91 million and had a rollover of R1.21 million. Therefore, its adjusted budget amounted to R14.12 million. Furthermore, the PoNW reported that it spent R10.41 million (73.7 per cent) as at 31 December 2009 and that available funds amounted to R3.71 million. 

 

The PoNW reported that the process of monitoring was undertaken by 36 life orientation and life skills specialists. The PoNW added that the process of monitoring was undertaken by 35 Child Care Coordinators. The PoNW noted that, although it had the aforementioned coordinators and specialists, there was still a shortage of vehicles which negatively impact on their performance. Furthermore, the PoNW reported that the afore-mentioned coordinators were allocated 8 schools each. However, these officials extended their services to other schools. The PoNW reported that, in addition to coordinators, the monitoring process is undertaken by the provincial Internal Audit unit and regular meetings were convened with the HIV/AIDS Life Skills unit.

 

On under spending, the PoNW reported that it had experienced problems in procuring first aid kits which led to under spending. The PoNW explained that although the procurement of First Aid Kits for schools was initiated early in 2009 it was yet to be finalized. The PoNW said it had consulted the Department of Health (DoH) and National Treasury and raised the issue but the Icembe Medical Suppliers and Central Medical Suppliers failed to deliver items to the value of R200 740. The PoNW reported that as a corrective intervention, due to the delay, National Treasury was requested to intervene and could not succeed and the order was cancelled. Furthermore, the PoNW reported that the procurement of career guides to the total value of R519 840 led to under spending because the service provider was unable to produce a valid tax clearance certificate after it transpired that the tax certificate had expired.

 

The PoNW reported that the tender for hygiene packs for orphans and vulnerable children to the value of R4.52 million (35 per cent of the HIV/Aids conditional grant) was awarded to the company called Industrimed. And the first consignment of hygiene packs delivered to the PoNW did not conform to contract specification and the matter was following a legal process. The PoNW further reported that it had requested a rollover of R3.6 million to enable it to pay the service provider once the quality hygiene packs had been addressed.

 

With respect to reporting, the PoNW argued that monthly and quarterly reports are duly submitted to the life skills HIV/Aids coordinator at the National Department of Basic Education; the Senior Management Team of the North West Department of Education; and Provincial Treasury.

 

 

4. Observations

 

The Committee is of the view that there are challenges that persist within the provincial departments of education with respect to supply chain management processes.

 

The Committee ascertained that some provincial departments of education do not comply with provisions of the Division of Revenue Act.

 

The Committee identified that some provincial departments of education do not follow proper reporting procedures as stipulated in the Public Finance Management Act.

 

The Committee observed that payment schedule of the third quarter is transferred towards the end of October of each year. Implication is that provincial departments must plan more activities during the first, second and fourth quarters of the financial year. It is proposed that the National Treasury should not transfer funds for the third quarter in October because it is an examination time which is followed by holidays.

 

The Committee has identified that the provincial departments do not follow their business plans and/or they spend their conditional grants for other items other than the intended purposes of these conditional grants.

 

5 Recommendations

 

Having considered the presentations on the spending on the HIV/Aids (Life Skills) conditional grant by the National Treasury and the afore-mentioned provincial departments, the Select Committee on Appropriations recommends that the National Council of Provinces considers the following:

 

5.1 That all provincial departments of education should formulate, implement, monitor and evaluate proper tendering and tender-related payment processes within three months after the adoption of this report by the House.

 

5.2 That all provincial departments of education should ensure that conditional grants are only spent as per provisions of the Division of Revenue Act.

 

5.3 That all provincial departments of education should report to all relevant stakeholders as per Public Finance Management Act.

 

5.4 That all provincial departments of education should improve the management of compensation budgets and control their growth in line with spending on other items.

 

5.5 That all provincial departments of education should ensure the full payment for relevant services of relevant service providers out of HIV/AIDS grant budget.

 

 

Report to be considered.