Four KZN departments need R1 billion from disasters fund
MONEY meant for provincial disaster management and other contingencies is at risk of being used to bail out provincial departments which will probably overspend their budgets to the tune of around a billion rand.
Four provincial government departments are projecting they will overspend their budgets by a combined figure of close to R1 billion.
The revelation was made during a midyear budget performance report presented by the Provincial Treasury to the finance portfolio committee at the provincial legislature yesterday.
Three of the four departments which are projecting they will overspend their budgets received the lion’s share of the provincial budget allocation; a combined amount of close to R100 billion of the province’s R115 billion budget.
These departments are the Department of Education, (which received R39,5 billion at the start of the financial year), the Department of Health (which received R47,4 billion) and the Department of Transport (which received R9,8 billion).
The Department of Agriculture and Rural Development, which re ceived R2,1 billion at the start of the financial year, is also projecting to overspend its budget.
The Department of Education is projecting it will overspend by R453 million. This is after additional funding of R353 million allocated to the department, the Provincial Treasury said.
The Department of Health is projecting to overspend by R398 million
The Department of Transport is projecting to overspend its budget by R102 million.
The Department of Agriculture and Rural Development is projecting to overspend by R13 million.
Committee member Maggie Govender said the provincial contingency reserve, which she said should be used during disasters, had already been used during budget adjustments to offset spending pressures in departments that had overspent.
“If we are going to have this overexpenditure in departments, Treasury is expected to draw from the contingency reserves.
“We need to put our heads together to ensure that we do have that reserve,” she said.
Govender asked for a report on how much was left in the contingency reserves and how much had been spent to offset spending pressures in government departments.
IFP MPL Laurens de Klerk said if the trend continues, the reserves will soon be totally emptied. “It cannot be sustainable.” He said using the contingency reserves encourages departments not to budget properly “because treasury will bail them out”.
Treasury MEC Belinda Scott said the department was “consistently negotiating” with the Department of Education to try and deal with that department’s overspending.
Scott said the department had been able to reduce its projected overexpenditure from R814 million.
She said senior Treasury officials were also working closely with the Department of Health to improve the department’s finances.
Chief director of public finance at the department, Tanya Stielau, said while the province’s nett monthly bank balance remained positive, the monthly and daily balances indicated downward trends.
She said the province’s financial position was expected to remain in good stead in this current financial year but at a much lower level.
“The interest revenue is expected to be lower when compared to previous years due to the decrease in the daily cash balances.
“It is therefore important that departments who have projected overspending contain their spending pressures to zero, in order not to put the fiscus into risk,” she said.
Meanwhile, the committee lashed out at many government departments that underspent their budgets because they had not filled vacant posts.
DA MPL Francois Rodgers asked if the departments really needed to fill these vacant posts if they were able to deliver services while these posts were vacant.