As KwaZulu-Natal’s (KZN) economic noose tightens, the responsibility and actions of the provincial Treasury becomes increasingly crucial in terms of budgeting and ensuring fiscal compliance.

In yesterday’s KZN Budget Debate, I spoke about the province’s R44 billion irregular expenditure, which Treasury is trying to deal with. With the irregular expenditure report having been submitted to SCOPA, it is clear that the majority of KZN’s government Departments are unable or unwilling to comply with evidence required from Treasury to determine condonation of this spending.

The R44 billion is not all current irregular expenditure, which makes the situation even worse. The older the irregular expenditure, the more it highlights Departmental failures in terms of compliance. This is either due to obstinacy or lack of capacity which remain symptomatic of a failed state.

Despite Treasury having undertaken extensive capacity training within various Departments and entities - in the evidence required by Treasury to approve irregular expenditure - some Departments and entities still fail to submit the required documentation. This has even led to Treasury pleading with SCOPA to assist in enforcing timeous compliance.

The dire situation also led to National Treasury issuing an amendment to the Irregular Expenditure Framework on 31 May 2021 which includes;

-      That the accounting officer must confirm allegations into irregular expenditure within 30 days after the alleged irregular expenditure has been reported to the accounting officer

-      That if there are disputes regarding whether the alleged irregular expenditure meets the definition of irregular expenditure, the assessment process must be conducted and completed within three (3) months from the date the alleged irregular expenditure was reported to the accounting officer

-      That the determination test referred to in paragraph 19 of the Framework must commence and be finalised within 30 days after assessment of irregular expenditure and;

-      That if there are any disputes, the determination process must be completed within four (4) months after the assessment of irregular expenditure.

The Office of the Premier (OTP) in KZN has also drafted and issued a consequence management framework to Departments to implement, with little or no improvement. Ultimately the challenge of compliance remains at the door of Provincial Treasury. On a positive note, SCOPA will now be calling Departmental HOD’s and CFO’s to explain why this non-compliance continues. It continues to be the mandate of the Members of this Legislature to ensure accountability and compliance by Departments and officials.

A concern recently raised by KZN’s Finance portfolio committee is Treasury’s ongoing under-expenditure on Compensation of Employees (COE). This is not a new phenomenon but it continues to beleaguer Treasury and will ultimately impact on its responsibilities of financial oversight through budgeting and compliance. Now, more than ever, Treasury needs to ensure that this shortcoming is addressed once and for all.

Another important issue highlighted by the Finance committee is the continued challenges around infrastructure development and the lack of capacity within KZN’s Department of Public Works, to deliver these projects timeously. Treasury needs to ensure that its infrastructure crack team plays a more proactive role in the monitoring of such projects. Now, more than ever, our province needs to rebuild its economy and infrastructure projects are key to this objective. Where failures exist they must be exposed and dealt with speedily.

The DA has never shied away from complimenting the KZN Provincial Treasury and its staff. This Department is a shining example when it comes to a capable state. We again acknowledge the sterling work done by this capable team and can be proud that our province has one of the best Treasuries in the country.