NORTH WEST PROVINCE TRENDS IN ALLOCATION, TRANSFERS & ACTUAL EXPENDITURE – CONDITIONAL GRANTS

1. NORTH WEST PROVINCETRENDS IN ALLOCATION, TRANSFERS & ACTUAL EXPENDITURE – CONDITIONAL GRANTS • CASP • 2004/05: • Allocation R26m • Actual Expenditure R12m • Rollover R14m – Exp to date: R10,1m • 2005/06 • Allocation R33m • Actual Expenditure R1,3m • Commitments to date R12m • LANDCARE • 2004/05 • Allocation R5m • Actual expenditure R3,6m • Rollover R1,4m • 2005/06 • Allocation R5m • Actual expenditure R0 • Commitments R3,1m • DROUGHT RELIEF • 2004/05 • Allocation R18m • Actual expenditure R18m • 2005/6 • Allocation R16m • Actual expenditure R0

2. TRENDS IN ALLOCATION, TRANSFERS & ACTUAL EXPENDITURE – EARMARKED FUNDS • POST SETTLEMENT • 2004/05: • Allocation R26m • Actual Expenditure R12m • Rollover R14m – Exp to date: R10,1m • 2005/06 • Allocation R33m • Actual Expenditure R1,3m • Commitments to date R12m • SUPPORT TO COMMUNAL FARMERS • 2004/05 • Allocation R5m • Actual expenditure R3,6m • Rollover R1,4m • 2005/06 • Allocation R5m • Actual expenditure R0 • Commitments R3,1m

3. ASSESSMENT OF MONITORING CAPACITY • Unit responsible for monitoring & evaluation – 4 economists & 4 coordinators from Farmer Settlement Support • Realigned organizational structure to strengthen monitoring & evualation component • Monitoring & evaluation systems in place – Provincial Project Register (ProMIS) • Funding agreement requirements included in business plan approval conditions • Monthly & quarterly reports to clusters • Pre-audit expenditure reconciliation on all projects • Regular spot checks by management team of projects • Funding agreement requirements are incorporated into performance agreements of senior managers

4. Under/over spending • Current budget allocation: Under-spending on conditional grants: • Capacity constraints: Human resource capacity related to retention of scare skills, competition with private sector when recruiting staff, negative impact on project management & implementation • Corrective measures: Targets set for approval of business plans; prioritized process of filling critical vacant posts; recruited scarce skills experts by tying them into bursary contracts; redeployment of support personnel to augment supply chain staff; & revised procurement thresh holds & delegations • Result: Increase in business plan approvals which have resulted in expenditure & Commitments on conditional grants • Isolated projects where expenditure is hampered due to community dynamics & external factors beyond control of Dept

5. DORA COMPLIANCE • Business Plans for conditional grants submitted & presented to DOA and approved • Financial monthly reports submitted • Quarterly reports submitted as required • Despite compliance through submission of reports, experience has shown that ‘built in early warning’ system not effective – hence management interventions through ‘spot checks’, pre-audit reconciliations, monthly reporting at Departmental Management Meetings & organizational realignment have been introduced

6. SERVICE LEVEL AGREEMENTS • Funding agreement signed with DOA – May 2005 • Service level agreements signed with partners on high impact projects funded from earmarked funds to ensure improved expenditure control (Dec 2005 & ongoing as new projects roll out)

7. CONCLUSION • Agriculture has to assist in the fight to alleviate poverty - rural areas • Expansion of poor rural communities is linked with access to land and water • Land ownership to be balanced against the need to sustain existing commercial farming sector • Key challenge - to strengthen planning and project management capacity • Appointment of Senior Management Team