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Gauteng: Barbara Creecy, Address by Gauteng MEC for Finance, during the debate on the 2017/18 Annual Report of Gauteng Provincial Treasury, Gauteng Legislature (28/11/2018)

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Gauteng: Barbara Creecy, Address by Gauteng MEC for Finance, during the debate on the 2017/18 Annual Report of Gauteng Provincial Treasury, Gauteng Legislature (28/11/2018)

Gauteng MEC for Finance Barbara Creecy

28th November 2018

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Honourable Members thank you for your contribution to the debate.

Yesterday Mokgethi Nkosi wrote an interesting piece on the choices that confront voters in 2018.

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He said that the DA seems at a loss to define a convincing policy platform distinct from merely raising questions about corruption and accountability.

Since February 2018, the party seems to have completely run out of ideas, and consequently has not been able to build or sustain a coherent narrative about its value propositions for SA votes.

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In fact, he argues, the DA has been wanting on key policy debates including on land expropriation without compensation, black economic empowerment, and general questions of racism. There is nothing he concludes in the DA’s pronouncements that appeals to the most down-trodden in society.

The EFF also does not escape his criticisms. He concludes that the party is running short on answers to critical policy questions to which South Africans are yearning for answers. The less said about the EFF leadership’s entanglement in the VBS Mutual Bank heist the better.

Let me deal with some of the key issues raised in the debate.

Financial sustainability of municipalities

When I presented the MTBPS to this House on the 15th of this month, I said the current financial sustainability of our municipalities is a serious risk to service delivery in the province. It is therefore important to document what we have done to assist in this regard:

Firstly, working with National Treasury we have deployed advisors in the field of General MFMA, Technical and Institutional Support, Supply Chain Management, Asset Management, Revenue Management, and MSCOA to assist all the delegated municipalities in the province.

Secondly, I have had two rounds of meetings with district and local municipalities who tabled unfunded budgets earlier this year. All have agreed to re-work their budgets, so they table funded budgets in the municipal adjustment process.

Although legislation indicates that the primary responsibility to avoid, identify and resolve financial problems rests with the municipality itself, the Gauteng Government, has had to intervene directly in two municipalities

The province instituted a formal intervention at Emfuleni Local Municipality after the municipality’s financial status deteriorated. One of the conditions of this intervention was for me to request the Municipal Financial Recovery Services Unit based in the National Treasury to assist in developing a Financial Recovery Plan

The draft Financial Recovery Plan was published for public comments and the Municipal Financial Recovery Services is busy considering the inputs and comments before the plan can be finalized.

The plan focuses on the development of a financial resources plan; revenue management; expenditure management; indigents management and local economic development.

We have also had several engagements with Eskom and Rand Water to discuss how we work together on debt recovery, distribution losses and billing for services not only at Emfuleni but also in relation to Rand West, Merafong but also with regards to other municipalities that are struggling to keep up with their payment plans.

As provincial government we have already used our own resources to improve waste collection and road maintenance in Emfuleni and as you know, Honourable Members, last week we budgeted further contributions for waste removal, renovation of the Vaal pump stations and road upgrades in Sebokeng and Evaton.

The province is currently also in the process of institutionalising Section 139 (5)(a) of the constitution in the West Rand District Municipality after the municipality also failed to meet its financial obligation.  It must be noted that this intervention, like the one at Emfuleni, is not putting the municipality under administration but only to implement a financial recovery plan to improve the functionality of the municipality.

I also want to report to you today that the independent forensic investigation into the VBS investments made by Merafong and the West Rand District Municipality should be completed by the end of the month.

While we are on the subject of municipalities facing problems, I must take this opportunity to raise my concerns in this house about recent reports that the Mayor of Tshwane has written to the leader of the DA to ask for help in getting rid of the City Manager, whom we all know Honourable Members, has been embroiled in a corruption scandal.

Eish! Honourable Members, I don’t know what you think but this sounds suspiciously like DA cadre deployment gone horribly wrong.

You know, horribly wrong like it went in the Western Cape with that deployed cadre called Patricia De Lille and look how long that took to get sorted out!!

Let me also express my sincere concerns regarding the understanding on the Urban Settlements Development Grant last year by both the cities of Tshwane and Johannesburg. Honourable Members will recall that last year, both cities surrendered hundreds of millions of rands, almost six hundred million between them, (for which National Treasury declined a roll over) which could have been put to good use in providing water and sanitation to hundreds of thousands living in formal settlements.

In this financial year the problem is repeating itself. Right now, three months into the financial year the two are sitting at 6% on their infrastructure spend when they should be closer to 25%. Ag shame it’s tough to govern isn’t it!

Audit Outcomes

So, let’s start here with the fact that Gauteng was the only province in the country to get unqualified audits for all its departments and entities… we also got 54% clean audits.  Now the DA beat us on clean audits, but they also got a disclaimer and guess what… they have taken the AG to court!

Now Honourable Members you can’t have it both ways: you can’t have your cake and eat it. Either you respect the independence of the AG or you don’t.

If you raise questions on the AG’s decision-making on the disclaimer by implication you are also questioning his decision-making ability on your clean audit outcomes.

Challenges facing the implementation of the open tender system

Honourable Members, Open Tender has been one of the greatest interventions of this Administration to fight fraud and corruption and eliminate irregular spending. Since 2014, the value of contracts awarded through public adjudication because of Open Tender is more than R18 billion.

In 2017/18, this system detected non-compliance matters in 26 tenders before award. In cancelling these procurement processes, we managed to save government a total of R1.2 billion in irregular expenditure.

However, as is often the case with big projects of this nature, we have experienced some challenges as we continue to implement it. These include:

Poor skills in development of specification requires several amendments to a bid spec before publication can be approved;

Poor commitment by bid committee members to honour meetings scheduled; and

Insufficient capacity to run concurrent bid committees;

And a situation in which departments advertise only.

We are also reviewing whether we should hand over procurement of probity audits to the accounting officers of Departments so that Treasury does not constitute a bottleneck in this regard.

Treasury recognised for innovation in public sector

Honourable Members, Provincial Treasury has once again been recognised for innovation in public sector financial management. At the beginning of this month, the Department won three awards at the 16th Annual Public-Sector Innovation Awards hosted by the Centre for Public Service Innovation. The projects that won the awards were BAS Automation Tool, Electronic Invoicing and the Purchase Card.

These projects won in the categories “Innovative Enhancements of Internal Systems of Government” and “Innovative use of ICTs for Effective Service Delivery”. The Annual CPSI Public Sector Innovation Awards celebrate best practices in public sector innovation and service delivery.

I take this opportunity to once again congratulate Provincial Treasury under the leadership of HOD Nomfundo Tshabalala for pioneering work that the department continues to do to improve the management of finances in the province. Well done to the Team!

I thank you

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