REPORT OF THE SELECT COMMITTEE ON FINANCE ON THE 2012/13 QUARTERLY PROVINCIAL TREASURY BUDGETS AND EXPENDITURE , DATED 19 MARCH 2014

Introduction and background

The Select Committee on Finance was established in terms of Section 4(1) of the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009. In terms of Section 4(2) of this Act, the Committee has powers and functions conferred to it by the Constitution, legislation, the standing rules or a resolution of a House, including considering and reporting on:

· The national macro-economic and fiscal policy;

· Amendments to the fiscal framework, revised fiscal framework and revenue proposals and Bills;

· Actual revenue published by the National Treasury; and

· Any other related matter set out in this Act.

Furthermore, the mandate encompasses the Committee’s function to legislate, conduct oversight on the Executive actions; facilitate public participation, facilitate international agreements and review matters of public interest in relation to the National Treasury and its entities, and the South African Reserve Bank.

The Committee through its Strategic Plan adopted a programme of engagement with provincial treasuries as part of its key priority areas. The Committee continues to interact with all provincial treasuries to ensure financial sustainability and enhance its oversight role.

The Committee had engagements with the Members of the Executive Council (MECs) of Finance from the following provinces: Eastern Cape, Northern Cape, North West, Western Cape, Gauteng, Mpumalanga, Free State, and KwaZulu-Natal. The public hearings were held on 14 and 29 May 2013, 05 June 2013 and 13 August 2013, in Parliament.

The Public Finance Management Act (section 18 (1) (a) and (b) and section 18 (2) (e) and (g) requires that the provincial treasuries must amongst other things, exercise control over the implementation of the provincial budget; promote and enforce transparency and effective management in respect of revenue, expenditure, assets and liabilities of provincial departments and provincial public entities and may assist the provincial departments and entities in building capacity for efficient, effective and transparent financial management and must intervene by taking appropriate steps, which may include the withholding of funds, to address a serious or persistent material breach of this Act by a department or entity.

1. Briefing by the National Treasury

1.1 Overview of the 2012/13 provincial budgets and expenditure

The National Treasury reported that the provinces had spent R395 billion or 98.2 per cent of the total provincial adjusted budgets by the end of the financial year 2012/13. Four provinces, Free State, Gauteng, KwaZulu-Natal and the Western Cape tabled a second adjustment budget during March 2013.

On aggregate, all provinces have under-spent their adjusted budgets by R7.4 billion or 1.8 per cent. The bulk of the under-spending as a percentage of the total adjusted budget was in the following provinces: North West (R1.3 billion or 4.7 per cent); Northern Cape (R558 million or 4.7 per cent); Limpopo (R2.2 billion or 4.6 per cent) and the Eastern Cape (R1.2 billion or 2.1 per cent). KwaZulu-Natal had the biggest budget but reflected the smallest under-spending of R539 million or 0.6 per cent.

Table 1: Provincial aggregated budgets and expenditure as at 31 March 2013

Source: National Treasury, 13 August 2013

The provinces had under-spent their compensation of employees’ budget for the first time since 2007/08. This could be seen as an opportunity to seek permanent stability on this item. Stronger controls over personnel were evident in the majority of provinces (Eastern Cape, Gauteng, KwaZulu-Natal, Limpopo, Northern Cape and the Western Cape). There had been improvements in capital spending, with an increase from 88 per cent to 94 per cent on aggregate.

1.2 Summary of Provincial Issues Identified by the National Treasury

The provinces still needed to do more in order to establish the productivity gains from historical personnel injections. PERSAL data standards and interpretation issues made it difficult to differentiate between “front line” and support staff. Budgeting for goods and services remained poor, particularly, budgeting for medicines and medical supplies and contractors. Despite the improvements, management of capital budgets and performance was insufficient. Fiscal projections were still poor in most provinces and conditional grants were the largest contributor to under-spending.

Health outcomes had improved in Gauteng Province, from an over-expenditure of R426.6 (1.8 per cent) in 2011/12 to under-spending of R229.5 million in 2012/13. Compensation of employees’ budgets in Gauteng and KwaZulu-Natal provinces had also improved. In Mpumalanga Province, infrastructure performance in the Department of Health remained a concern.

The National Treasury had started on the following interventions:

· Roll out of the latest round of the Budget Formulation and Budget Analysis courses to capacitate provincial officials with the technical skills required in these areas;

· Roll out of Infrastructure Delivery Management System (IDMS) to all provinces to prepare for the 2014 bidding process for infrastructure funds;

· Taken steps through the Technical Committee on Finance to address poor spending projections;

· Roll out of the Financial Management Improvement Programme (FMIP), in partnership with the European Union, to improve financial management practices in provinces; and

· An expenditure report review project had been launched between the National Treasury and the Department of Performance Monitoring and Evaluation (DPME) to assess the success or failure of government programmes and propose policy reforms that will improve delivery in the future.

2. Briefing by the Provincial Treasuries

2.1 Eastern Cape Province

The Eastern Cape Provincial Treasury reported that, the full allocation, 100 per cent of its equitable share from National Treasury was received. On the conditional grants, a total amount of R286.2 million was not received by the Province due to the slow spending during the 2012/13 financial year in respect of the following conditional grants: Health Professions Training and Development grant (R928 thousand); Human Settlements Development grant (R284.8 million); and Mass Sport and Recreation Participation Programme Grant (R584 thousand).

The Province collected provincial own revenue amounting to R1.019 billion which, translates into 131.6 per cent against the adjusted budget of R774.5 million. This resulted in over collection of own revenue amounting to R244.6 million, mainly from the following departments: Provincial Planning and Treasury ( R141.3 million from interest earned on bank balances); Rural Development and Agrarian Reform ( R82.7 million mainly from the monies s surrendered from the prior years’ surplus funds; Health ( R33.5 million due to the over collection on patient fees).

Overall, the Province had spent R55.9 billion or 97.4 per cent of its adjusted budget, which resulted in an under expenditure of R1.469 billion (2.6 per cent of the adjusted budget).

Under-expenditure in the Eastern Cape was evident in the following departments, the Basic Education (R691.9 million), Health (R169.5 million) and Human Settlements (R291.7 million).

The Eastern Cape Provincial Treasury cited the following reasons that contributed to the under spending by the Department of Education; payment of temporary educators whose contracts were extended until 31 March 2013, delay in the payment of the Rural Allowance incentive scheme and delay in the payment of temporary educators appointed by the School Governing Bodies.

The Province managed to contain expenditure on the compensation of employees within its budget. Compensation of Employees was the main contributor to the R1.469 billion under expenditure.

There was one instance of over spending reported by the Province, which was on the goods and services budget (R245.4 million). The following reasons were provided; medicines, National Health Laboratory Services (NHLS), blood emanating from accruals in the Department of Health; t he centralised procurement and payment of Learner, Teacher Support Material (LTSM) for section 21 schools (whose budget is under transfers and subsidies) in the Department of Education and c ommunication and lease costs in the Department of Social Development.

Interventions

With the improved spending in 2012/13 financial year, it was reported that, the Provincial Treasury will strengthen its monitoring controls to ensure that the increased spending is commensurate with value for money. These controls include continuation of service delivery site visits and detailed verification of the “March expenditure spike”. It was emphasised that, Provincial Treasury will continue to institutionalise the Accountability Model wherein letters will be issued to the Executive Authorities to give account on poor performance by the provincial departments.

2.2 Northern Cape Province

The Northern Cape Provincial Treasury reported that the adjusted provincial own revenue amounted to R228.2 million against the actual budget of R263.59 million at the end of March 2013.

The Province over-collected its adjusted own revenue budget as at the end of March 2013, with a net amount of R35.4 million. This was mainly as a result of interests generated by the Provincial Treasury, amounting to R27.7 million and Motor Vehicle Licenses over-collection in the Department of Transport, Safety and Liaison amounting to R11.5 million .

The total provincial expenditure by all departments amounted to R12.2 billion ( 95.3 per cent) of the total adjusted budget of R11.795 billion in 2012/13 financial year . It was further reported that, the expenditure on conditional grants up to the end of March 2013 amounted to R2.7 billion ( 87 per cent) of the total adjusted budget of R3.1 billion .

The Department of Agriculture, Land Reform and Rural Development spent R216 million ( 43.1 per cent) of the total R500.7 million budget on conditional grants allocated, under spending by R284.7 million. It was further reported that, the Department had under spent on the Comprehensive Agriculture Support Programme Grant (CASP), with a total amount of R269.8 million . The Department of Health had under-spent on the Comprehensive HIV and Aids Grant with a total amount of R20.308 million and furthermore, the Department spent only R0.977 million ( 16 per cent) of the total allocation of R6.080 million in respect of the Nursing College Grant.

The aggregate provincial under-spending by all departments amounted to R560.1 million and conditional grants account for a net of R405.8 million . The Province under-spent on the budget of compensation of employees by R156.065 million, largely by the departments of Health (54. 8 million), Education (R42.7) and Roads and Public Works (R24.7 million).

The Province indicated that the reason for the under-spending by the Department of Agriculture, Land Reform and Rural Development was a delay in the technical assessment of the damages that occurred during the floods in the Province. An agreement had been reached between National Treasury, Provincial Treasury, national and provincial departments of Agriculture to reschedule this allocation beyond the 2013 Medium Term Expenditure Framework (MTEF) period to allow the provincial department time to address the current challenges in terms of spending this allocation.

The Provincial Treasury expressed its concern towards the National Department of Sport, Arts and Culture about only availing an additional amount of R2.6 million for the Mass Sports Participation Grant towards the end of March 2013 for the Provincial Department of Sport, Art and Culture, as the Department could not spend it within the financial year.

2.3 North West Province

The North West Provincial Treasury reported that, for the 2012/13 financial year, the budget allocation amounted to R26.91 billion. The Province had an adjusted budget of R5.2 billion for the conditional grants, of which the Province spent R4.5 billion (87 per cent) resulting in preliminary under-spending of R683 million.

The preliminary provincial spending was R25.6 billion (95 per cent) of the approved adjusted budget of R26.9 billion as at 31 March 2013 with under-spending of R1.3 billion.

The average provincial spending on compensation of employees was R15.3 billion (99.8 per cent) of the allocated budget of R15.319 billion.

The Provincial Treasury reported that, the under-spending was mainly registered under Land and Buildings (R614 million), while goods and services contributed R406 million, transfer payments R172 million, equipment R104 million and compensation of employees R26 million.

The lowest spending of 53 per cent was recorded by the Department of Public Works, Roads and Transport. The under-spending occurred In the Provincial Roads Maintenance Grant, which was mainly as a result of the supply chain committee not being fully functional.

It was reported that the under-spending primarily occurred in the following departments: Public Works, Roads and Transport (R816 million); Sport, Arts and Culture (R103 million); Education and Training (R88 million); Agriculture and Rural Development (R85 million); Health (R63 million); Economic Development; and Environment, Conservation and Tourism (R58 million).

The reasons for under-spending include lack of capacity and skills to plan and strategise to implement and deliver on infrastructure and conditional grant projects; vacant key personnel posts in some departments; lack of financial skills and awareness of government policies and prescripts and monitoring and obtaining invoices for payments from service providers for services rendered.

Interventions

The following were reported as intervention measures by the Province:

· Support the Department of Public Works, Roads and Transport to ensure that the R10 million that was allocated for infrastructure capacity building will enable them to perform their implementing role as custodian of assets;

· Strengthen financial control and monitoring, thus ensuring that the budget allocated is well spent and the value for money initiative is attained;

· Support the Provincial Treasury Supply Chain Unit to ensure the roll out of the new Treasury Regulations in terms of the construction procurement for the delivery and maintenance of infrastructure;

· Establish the Provincial Budget Forum which aims to improve budget planning and execution by creating a platform to share challenges; identify best practices and procedures to improve the quality and comprehensiveness of the Estimates of Provincial Revenue Expenditure and ultimately improve government spending;

· Improve the credibility of the MTEF process and the scope of practical economic impact analysis coupled with the refinement of expenditure management; and

· Conduct quarterly engagements with departments on the provincial management of personnel and the compensation of employees regarding the growth in numbers in non-critical areas such as support and administration.

2.4 Western Cape Province

The Western Cape Provincial Treasury reported that the main budget for the 2012/13 financial year was R39.92 billion, which was adjusted to the amount of R40.3 billion.

The Provincial Treasury reported that an amount of R8.809 billion as per the Division of Revenue Act (Act No. 5 of 2012) was received in the form of conditional grants, another gazetted amount of R57.7 million and an amount of R15.3 million through provincial rollovers. It was reported that the total conditional grant allocation was R8.882 billion for the 2012/13 financial year.

The preliminary spending for the financial year 2012/13 amounted to R39.9 billion (99.2 per cent) of the adjusted budget of R40.3 billion. It should be noted that a second adjustment budget was appropriated to account for the Devolution of Property Rates and Mass Participation and Sports Development conditional grants.

The Western Cape Provincial Treasury reported that the provincial departments had reflected a total under-spending of R318.793 million, which relates to compensation of employees of R305.3 million, goods and services under-spending of R106.2 million, capital under-spending of R182.5 million while total transfers and subsides reflects an over-spending of R264.1 million (Education transfers to schools).

Spending on conditional grants amounted to R8.776 billion (98.8 per cent) against the total national allocation of R8.882 billion.

2.5 Gauteng Province

The Gauteng Provincial Treasury reported that, a t the end of the financial year 2012/13, a total of R74.8 billion was received, of which R70.9 billion was transfers from national in the form of equitable share and conditional grants. O wn revenue collections by the Province amounted to R3.95 billion.

The preliminary spending by Gauteng Provincial Government (GPG) departments stood at R71.7 billion against national transfers. This means that without provincial own revenue, the Province would have largely overspent. It was reported that a n amount of R582 000 for the Mass Sport and Recreation Grant under the Gauteng Department of Sport, Arts, Culture and Recreation was not transferred by the National Department of Sport and Recreation due to internal challenges.

The following departments over-collected revenue during the 2012/13 financial year:

· Department of Economic Development has collected R721.8 million compared to an estimate of R663.8 million, mainly in gambling fees;

· Department of Health has collected R477 million of the R471.6 million estimated, largely on patient fees;

· Department of Roads and Transport’s adjusted appropriation was R2.406 billion but managed to collect R2.459 billion, mainly motor vehicle licence fees ; and

· Provincial Treasury has collected R187.828 million of the adjusted appropriation (an over-collection of R37.8 million in interest income).

The under-collection was mostly from non-revenue generating departments such as Education (R3.97 million), Sport, Arts, Culture and Recreation (R182 thousand) and Infrastructure Development (R1.364 million).

The Gauteng Provincial Treasury reported that the main budget was adjusted upwards by R5.4 billion, from R69.3 billion to R74.7 billion. The increase was mainly for accrual payments in Health and Improved Conditions of Service (ICS) for GPG departments and decentralisation of functions from Finance to GPG departments.

The preliminary expenditure was at R73.7 billion, under-spending by R925 million. An amount of R500 million of the R925.3 million was for the commitments and invoices that could not be processed by the end of the 2012/13 financial year.

The Gauteng Provincial Treasury had received requests for rollovers from GPG departments amounting to R500 million which corresponds to R510.945 million available cash and had assessed the request as part of the established budget processes.

Almost all GPG departments were showing a slight under-spending, which could be explained by commitments and invoices that could not be processed except for GDARD, which had overspent by R374 thousands. T he total provincial wage bill was at R40.3 billion, of which the Province spent R40 billion, with R280.6 million remaining unspent. Under goods and services budget item, the Province overspent by R528 million, mainly due to funding pressures in the departments of Education and Health.

The overall provincial grant funding was increased by R596 million from R15.6 billion to R16.2 billion. A total amount of R15.2 billion (93 per cent) was spent at the end of the 2012/13 financial year. The major under-spending was recorded in the departments of Education, Health and Transport. It was further reported that the Provincial Treasury will conduct a deeper analysis during 2013/14, to improve the performance of grants.

Achievements

The following were reported as achievements emanating from intervention measures by the Province:

• The overall fourth quarter financial performance showed a general improvement in the management of finances in the Province;

• The Province implemented cost-containment measures;

• The management of cash has significantly improved; and

• The Provincial Own revenue collection had improved and would be given priority in order to enable funding of provincial imperatives.

2.6 Mpumalanga Province

The Mpumalanga Provincial Treasury reported that the provincial main budget allocation was R30.967 billion and it was adjusted with R585.303 million, taking the total adjusted budget to R 31.553 billion. The Department of Education ’s adjusted budget amounted to R14.284 billion while the Department of Health’s adjusted budget amounted to R7.649 billion.

Overall, the Province spent R31.3 billion of the R31.5 adjusted budget and under-spent by R219.5 million (2.4 per cent) by the end of the financial year 2012/13. Largely, the departments that contributed to under-spending were Social Services (R510.5 million), Health (R326.7 million), Legislature (R16.9), Cooperative Government and Traditional Affairs (R12.6 million) and Community Safety, Security and Liaison (10.4 million).

The Mpumalanga Provincial Treasury reported that the actual compensation of employees spending as at 31 March 2013 was R18.365 billion of the adjusted budget of R18.659 billion.

The Department of Education’s adjusted budget amounted to R14.284 billion, over-spending by R67.596 million (0.5 per cent). The Department of Health’s adjusted budget amounted to R7.649 billion, with the actual expenditure being R7.499 billion (98.0 per cent) , under -spending by R149.646 million (2 per cent). The Department of Education had over-spent its allocated conditional grant budget of R1.451 billion, having spent R1.488 billion.

Challenges

The Provincial Treasury reported the following challenges for the Province:

· The budget planning and management processes are not effective at most departments;

· Poor planning delays commencement of projects and procurement processes;

· Problems of the “March spike”, accruals which exceed unspent voted funds, delays in appointments, overspending on line items and economic classification, which then necessitates virements; and

· The completeness of accruals. Accruals are not disclosed upfront by most departments and the risk of being discovered by the Auditor-General may easily result in qualification depending on the materiality level. Also, this resulted in matters of emphasis on misstatements in the annual financial statements.

2.7 Free State Province

The Free State Provincial Treasury reported that the 2012/13 financial year adjusted budget amounted to R25.9 billion. The E quitable Share amounted to R18.795 billion (72.6 per cent) , conditional grants amounted to R5.96 billion (23.0 per cent) and provincial own receipt amounted to R821 million (3.2 per cent).

The Free State Provincial Treasury reported that the overall provincial expenditure amounted to R25.7 billion (99.0 per cent spent). It was reported that the provincial departments managed to spend an amount of R5.562 billion of the conditional grant funding.

The major contributors to the under-spending were the Health Department, mainly due to payments for capital assets (R241 million), and the Provincial Treasury, mainly due to the compensation of employees (R13 million) and buildings and fixed structures (R27 million).

The major contributors to the over-spending on the Compensation of Employees were the Education and Health departments. The following reasons for over-spending were provided by the Department of Education : changes in conditions of service in respect of Compensation of Employees and learner and teacher support material (R72 million). It was further mentioned that over-spending in the Health Department was attributed to the filling of vacant critical posts (these are higher than projected condition of services increment), in-sourcing of security and cleaning staff and the intake of Cuban doctors.

The Provincial Treasury reported that the following provincial departments under-spent on the allocated grants: Department of Education - Dinaledi Schoosl Grant (70.3 per cent) and HIV and Aids Grant (Life Skills Education) 75.3 per cent; and the Department of Health - National Health Insurance Grant (66.5 per cent), Health Infrastructure Grant (45.1 per cent), Nursing Colleges and Schools Grant (35.5 per cent), and Hospital Revitalization Grant (74.9 per cent).

It was reported that the current payments amounted to R19.6 billion (75.6 per cent), o f which the compensation of employees expenditure amounted to R15.2 billion (58.6 per cent).

The Provincial Treasury reported inadequacy of the provincial fiscal envelope due to declining equitable share allocations as the main challenge for the Province.

Interventions

The following were reported as planned interventions by the Province:

· Introduction of Provincial Budget Management Forum;

· Investigate different options to address accruals in a phased-in approach, e.g. budget top slicing;

· Source in additional professional capacity to assist with budget restructuring and reprioritisation;

· Further reprioritisation of the 2013/14 budget in order to i dentify possible areas where government can scale down without compromising service delivery and a lign the budget structure to respond to socio-economic challenges in the Province; and

· Building capacity to benefit from alternative sources of funding.

2.8 KwaZulu-Natal Province

The KwaZulu-Natal Provincial Treasury reported that the bulk of the provincial receipts relate to equitable share, contributing 79.7 per cent of total revenue, with conditional grants at 17.2 per cent and provincial own revenue making up the balance of 3.1 per cent . The unaudited actual outcomes show that the Province received R14.8 billion conditional grant funding, with a shortfall of R14.7 million when compared to the Final Appropriation.

The Province over-collected revenue against provincial own receipts, collecting R2.671 billion compared to the budget of R2.3 billion. The surplus at the end of 2012/13 financial year amounted to R1.76 billion and results from the following:

· The Province budgeted for a surplus of R900 million in 2012/13 financial year;

· The Province under-spent its budget allocation by R539.2 million, in aggregate;

· The Province over-collected its own revenue when compared to the final appropriation by R331.6 million; and

· Mitigating this, to a lesser extent, is the fact that National Treasury did not transfer R14.6 million in respect of the Land Care Grant, Education Infrastructure Grant and Mass Participation and Sport Development Grant.

The Provincial Department of Health reflects year-end over-collection of R53.2 million, mainly due to the unanticipated sale of redundant vehicles against sale of capital assets , as well as the higher than anticipated collection of patient fees resulting from the Provincial Treasury-led initiative to collect all patient and boarding services fees due.

The Department of Education over-collected revenue by R27.99 million, mainly due to higher than anticipated recovery of outstanding staff debts and clearing of stale cheques.

The aggregated expenditure for the year amounted to R85.6 billion, compared to the Final Appropriation of R86.183 billion, resulting in under-spending of R539.2 million. While the Province ended the year with under-expenditure, it is worth noting that compensation of employees over-spent by R432.5 million. This was mainly due to the Department of Education, the carry-through effects of the shortfall in funding for Occupation Specific Dispensation (OSD) and various wage agreements, the carry-through effects of the conversion of 600 teacher assistants to teacher aids and provision for rural incentivised posts (such as Mathematics and Science), which were made available in 2011/12 without funding.

It was reported that three departments over-spent their budget at year-end, with the most significant by far being the Department of Health, at R99.602 million, followed by the Department of Transport at R6.514 million and the Provincial Legislature at R1.971 million.

The Provincial Treasury reported the following reasons for the over-spending by the Department of Health:

· Faster progress than originally expected; higher than expected costs on some infrastructure projects including the Dr Pixley Ka Seme Hospital, the Pomeroy and Dannhauser Community Health Centers (CHCs) as well as the KZN Provincial Laundry;

· The higher than expected costs of forensic investigations, audit fees, subsistence and travel costs;

· Closing the gap in standards for municipal clinics that had been provincialised , progressive commissioning of CHCs and the King Dinizulu Hospital; and

· The increased demand for various “non-negotiable” items such as medicines and blood transfusions.

3. Observations

The Committee made the following observations:

3.1 The Provincial Treasuries relied on the information provided by the provincial departments in monthly spending reports without verification of such information;

3.2 Some provincial departments were not able to spend the allocated budgets during the year with most of their spending taking place during the last quarter of the financial year. The “March spike” was of concern to the Committee;

3.3 The KwaZulu-Natal and Gauteng Provinces reflected amounts as being spent by the provincial departments whereas funds were transferred to implementing agencies and not necessarily spent;

3.4 Some provincial departments consistently failed to spend proportionally in the first quarter of each financial year due to poor planning;

3.5 Under-spending was a recurring issue in most provinces and that compromises service delivery;

3.6 Over-spending on compensation of employees remained an issue although trends are moving in the right direction. Some provinces were not budgeting accurately for goods and services;

3.7 Financial management in some departmental Chief Financial Officer’s offices in the provinces remained a challenge;

3.8 Over-expenditure in the KwaZulu-Natal Provincial Department of Health is of great concern to the Committee as there are often no consequences for overspending in general;

3.9 Unfunded mandates remained a problem in some departments in the KwaZulu-Natal Province;

3.10 The Western Cape Provincial Treasury submitted a highly technical report, which the Committee could not substantively interact with;

3.11 The Gauteng Provincial Department of Health surrendered R3 billion unspent money in 2012/13 to the National Treasury. This money was mainly for the Hospital Revitalisation Grant which could not be spent as the hospital was not yet completed; and

3.12 Under-spending in the Gauteng Province occurred mainly in the Department of Health, particularly in the Infrastructure and Administration programmes.

4. Recommendations

The Committee made the following recommendations:

4.1 The Provincial Treasuries should:

• Interrogate the monthly reports received from the provincial departments as some reports are not the true reflection of their actual finances;
• Put measures in place, that would assist the provincial departments with proper planning for in-year spending in order to curb fiscal dumping;
• Present an analysis of the financial and non-financial information, within three months of the commencement of the 5 ^th Parliament; and
• Ensure that appropriate staff members attend the training that is provided by National Treasury.

4.2 The KwaZulu-Natal, Gauteng and Western Cape Provincial Treasuries should develop measures to monitor the performance of the implementing agencies as according to their records funds allocated are well spent. Verification and monitoring of the work that is done by implementing agencies is necessary;

4.3 National Treasury should:

• Continue to provide the Essentials of Budget Formulation and Budget Analysis training to the relevant officials in provincial departments;
• Continue to assist the Provincial Treasuries to improve target setting;
• Fast-track and share with the Committee the CFO skills audit report.

4.4 All provinces should use the Limpopo headcount model for Health and Education to verify and manage employees in their departments.

Report to be considered.