Milestones in money management
The financial resources of departments and municipalities are being managed more effectively
Reporting back at the inaugural Free State Global Investors Trade Bridge, MEC Elzabe Rockman said the Provincial Treasury has redefined its approach and support to its local government sector, with increased monitoring and support in respect of financial management and accountability to ensure the financial resources, assets and liabilities of provincial departments and municipalities are managed efficiently and effectively to ensure optimal service delivery.
“The scope of our task is illustrated by the fact that the provincial budget has consistently shown slower year-on-year growth than the inflation rate since [advent of] the 2009 Medium Term Expenditure Framework,” said Rockman.
“Given the dynamics of the national and provincial economy in the global economic slowdown, the Provincial Treasury responded well and increased the estimated revenue of the Free State by 6.7% between the 2009/10 and 2014/15 financial years.
“The focus on improving management and accountability helped us to achieve a significant improvement in the audit outcomes of the provincial government, including a 300% increase in the number of clean audits. We achieved six consecutive clean audits for the Provincial Treasury, three consecutive clean audits for the Department of Sport, Arts, Culture and Recreation, the Free State Legislature and Fleet Management Trading Entity, four clean audits for the Office of the Premier and the first clean audit obtained by the Department of Public Works and Infrastructure, for the last financial year.”
Rockman said its efforts to strengthen governance in municipalities, evidenced by the establishment of internal audit units and the appointment of audit committees in all the municipalities are already bearing fruit, with a steady improvement in municipal audit outcomes from 2009 to 2014, including a 350% improvement i n municipalities obtaining unqualified audit opinions.
She said the Provincial Treasury established and continues to lead an intergovernmental debt steering committee, which has achieved a drastic reduction in government debt owed to municipalities — by 56% — between June 2011 and August 2015.
“We also established proactive and practical relationships with institutions such as the National Energy Regulator of South Africa and the South African Revenue Services to ensure continued capacity building and enhancing compliance with laws and regulations, as well as reducing the reliance on consultants in the local government sector,” she said.
“Provincial Treasury is at the forefront of the fight against fraud and corruption in the Free State in both the public and private sector and we have established partnerships with the Association of Certified Fraud Examiners, PWC, Standard Bank and the Public Service Commission to facilitate the annual Fraud Awareness Week, and have extended our initiatives to include regular information and education sessions throughout all districts of the province.
“The department has also initiated a programme of conducting headcounts in all provincial departments to ensure that we eliminate the possibility of paying ghost workers and [to] ensure the integrity of our payroll systems.”
Two significant initiatives led by the treasury to review the supply chain environment of the provincial and local government are its Supply Chain Management Toolkit and the enhancement of its central supplier database system. It has also implemented a number of transversal contracts to capitalise on economies of scale and ensure value for money.
“Through these initiatives, we ensure that we support stated government objectives, i ncluding SMME and co-operative development, as well as women and youth economic empowerment,” said Rockman.
“We introduced a Revenue Enhancement Allocation programme aimed at investing in projects that have potential to yield revenue for the province. Over the past three years Provincial Treasury has allocated R64-million towards revenue enhancement projects, including case management in health, revamping of the dairy enterprise at Glen and the revolving restaurant, fencing of reserves and maintenance of resorts, establishing a liquor database for the Free State Grambling and Liquor Authority and renovation of houses for health workers and doctors.”
The need for economic intelligence led to the treasury producing 21 research papers from 2009, ranging from a study into the funding adequacy in Free State education to an empirical survey and assessment of the impact of infrastructure invest-