Over­spend­ing crisis

Four KZN de­part­ments need R1 bil­lion from disasters fund

The Witness - - NEWS - SABELO NSELE • sabelo.nsele@wit­ness.co.za

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.

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