Parliament, Tuesday, 29 May 2018 – The Select Committee on Finance today received a briefing from the National Treasury, and the Northern Cape and Limpopo provincial treasuries on the preliminary outcomes of 2017/18 provincial expenditures, as at 31 May 2018.
The committee noted with concern the overall fiscal risk pertaining to education and health in both provinces, as well as the high accruals. Unauthorised and irregular expenditure is high in both provinces, and the committee asked about action plans to address this.
In the Northern Cape, irregular expenditure is caused by high levels of non-compliance in supply-chain management within the departments of education and health.
The committee agreed with the National Treasury that capacity enhancements, better planning and project execution skills should be sought by the departments to reduce underspending on certain items and on conditional grants.
The department of health in Limpopo is reported to have the highest rate of underspending, amounting to R236 million. Members of the committee said the provincial treasury should account and explain this, which was also noticeable in the provincial department of education, amounting to R155 million.
The committee said it unacceptable for the Northern Cape to underspend on its conditional grant, year in and year out, and for departments to make continual applications for roll-overs. The committee asked for an explanation of why departments continually underspend their conditional grants, as failure to spend budget impacts on service delivery.
Furthermore, the operationalisation of new health facilities presents challenges to the health department because of the non-availability of operational budgets. The committee fears that new facilities will become white elephants, as the department has failed to provide operational budgets for them.
The committee called for consequence management for officials implicated in flouting expenditure rules and guidelines. It also said that it is unacceptable to appoint service providers to investigate irregular expenditure.
Members of the committee called for action to be taken against individuals involved in the VBS Bank matter. They welcomed news of a forensic investigation instituted by Mr Rob Tooley, MEC of the Limpopo Provincial Treasury. Seven municipalities are alleged to have links to VBS Bank.
The committee Chairperson, Mr Charel De Beer, said non-compliance of the law, the Public Financial Management Act is trespassing the law, and the must be consequences. “If we can address public entities and departments to comply it is our responsibility as Members of Parliament to hold accounting officers to account.”
Meanwhile, the committee welcomed the economic growth of 1.2% in Limpopo.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE SELECT COMMITTEE ON FINANCE, MR CHAREL DE BEER
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