The end of the financial year over-expenditure in the province is nowhere near the levels where it stood at the beginning of this parliamentary term but it still substantial in the two major service delivery departments – Education and, to a lesser extent, Health.
At Education, this is mainly due to the appointment of additional teaching staff without the requisite budget. How this came about has been explained at length to the finance committee but some questions still remain.
We are aware of the challenges Education faces with fluctuating staff numbers at the beginning of each school year. We also accept that managing a payroll of this size cannot be easy. The staff component of the Department of Education is the single biggest line item of budget expenditure in the province.
We acknowledge all these factors, but we question why only two provinces in the entire country, namely KwaZulu-Natal and Limpopo, overspent their budgets on compensation of employees while the other seven managed their staff numbers within budget.
What is really needed is better planning to anticipate the enrollment capacity of individual schools. One way to correctly anticipate enrollment numbers in schools is by introducing incentives for early registration. Early registration should be the case but this is rarely enforced and late enrollment leads to all sorts of challenges, including surplus teachers and distribution of textbooks.
We all have voiced our concerns about the underfunding of education in KwaZulu-Natal compared to other provinces. The funding we receive per child is below the national average and our options in trying to change this as a province are limited.
There are, however, two things we can do. We can reprioritise our departmental budgets from non-performing or underspending programmes towards education. And we can maximise our efficiency savings in all departments, including Education.
This is being done to some extent already through various cost-cutting measures but with limited success in some departments. Education is notorious for failing to implement Treasury’s cost-cutting measures despite numerous warnings and interventions.
As I said, managing the overheads of the size of our Department of Education is not easy. But many private businesses are managing to contain similar overheads and it is to them this government should be looking for best practices.
Education needs to streamline contracts for security, utilities, cleaning, printing, and catering. It also needs to rationalise its fleet and travel management. Every cent saved on such overheads is a cent that could go directly towards service delivery.
With regards to Health, some of its overspending was due to the increased cost of the services of the NHLS. This is a long-standing matter and a major drag on the department’s budget. The facts of the matter are well known and I will only say that we all hope that the legal challenge will be resolved soon and in favour of the Department of Health.
Two institutions I wish to single out of praise in this debate are Provincial Treasury’s Infrastructure Crack Team and the Integrity Unit housed in the Office of the Premier. There have been notable improvements in the delivery infrastructural projects by departments since the Crack Team got involved in the process last year.
One department where underspending led to delays in infrastructural projects was Social Development. Unsurprisingly, this was a result of the involvement of the Independent Development Trust. Its record in the delivery of infrastructure in other departments has become notorious. The finance committee has resolved to task the Infrastructure Crack Team to get to the bottom of these delays.
The Integrity Unit is making similar strides in investigating cases of corru
ption in the provincial government. The finance committee is ame and it is therefore right to request the Office of the Premier for the full costing of the Unit’s requirements and provide for them in the upcoming Adjustments.
One encouraging development at Health was the expenditure on conditional grants. Some of the most vital service delivery items, such as hospital revitalisation, infrastructure, and HIV/Aids, used to be repeatedly underspent, sometimes to such an extent that service delivery on these items was non-existent.
Health has now demonstrated that conditional grants can be spent if they are managed properly and if the procedures that govern them, including project management, reporting and verification, are being implemented correctly. Credit for this must go to the departmental officials and the Hon. MEC for Health whose leadership made this happen.
At the same time, the success at Health should be a lesson to those departments that did not spend their conditional grants in the past financial year. Two important grants that went unspent were the Housing Disaster Relief grant by the Department of Human Settlements and the EPWP grant by some departments that receive them, namely Economic Development and Tourism, Health, and Human Settlements.
These unspent grants, although not large, are all the more symbolic given the high unemployment rate and the ongoing difficulties surrounding the natural disaster funding for KwaZulu-Natal.
Millions of people in our province remain out of work and the EPWP programme remains the provincial government’s flagship job creation policy. With the government rejecting more workable alternatives to the EPWP, such as the wage subsidy, it is inexcusable that individual government departments which receive funding for EPWP job opportunities do not spend it.
Yes, it is true that EPWP programmes do not create sustainable jobs. All they create are short-term employment opportunities where little or no transfer of marketable skills takes place. Even so, there is no excuse for the fact that this programme is not being implemented at all.
What we need in view of these examples of underspending is a review of the performance of the existing EPWP programmes. We need to establish their performance, including the number, nature, average duration and geographical location of all employment opportunities created in the province. We also need to be aware of all the challenges associated with the spending of these grants by the departments that receive this funding.
We have similar concerns about the underspending on disaster relief. We complain that the funding this province receives from National Treasury as compensation for disasters is often late and insufficient. This routinely creates unfunded mandates for the departments that are tasked with the implementation of our disaster management framework.
But at the same time, some departments, such as Human Settlements, are not even spending the modest amounts that are allocated to them for disasters. The calls on National Treasury for a full reimbursement of disaster funding are disingenuous when the funds that have already been paid to the province go unspent and cannot be rolled over into the new financial year due to poor planning.
Another example of gross underspending is the Department of Sport and Recreation. The R50-million it underspent its allocation by is a vast proportion of its budget. It is also important to note that this department had underspent its budget in the previous three financial years.
Related to this underspending is its high vacancy rate and most notably the vacancy in the post of Accounting Officer which has not been filled for the past three years. As a result, this department is hardly delivering sports infrastructure which is an important part of its mandate.
While we do acknowledge that the MEC for Sport and Recreation is a newcomer to this department, we urge her to prioritise the filling of all funded vacant posts, especially that of Head of Department, and the spend
ing of the department’s infrastructure budget.
My lasspending by the Department of Royal Household. This is an annual event and it is getting more serious every year. I am sceptical about the endless commitments by the department about implementing better financial and management controls to prevent future overspending.
The time has perhaps come for reporting all cases of financial misconduct to the Public Service Commission in terms of Treasury Regulations and invoking the PFMA in bringing those responsible for such misconduct to book.
I thank you.