Gauteng treasury tables R818m budget, seeks to bolster financial management

23rd May 2023 By: Natasha Odendaal - Creamer Media Senior Deputy Editor

Gauteng treasury tables R818m budget, seeks to bolster financial management

Gauteng Finance MEC Jacob Mamabolo
Photo by: Creamer Media

The Gauteng Provincial Treasury on Tuesday tabled a budget of just over R818-million for the 2023/24 financial year, which it aims to use to ensure effective and efficient financial management in the province and to drive radical economic transformation.

Speaking during the 2023/24 Budget Vote of Gauteng Provincial Treasury, Gauteng Finance MEC Jacob Mamabolo said that focus would be on enhancing sound finances, improving local government finances and increasing compliance with legislative prescripts.

“We must continue to do more with less. We must vigorously implement measures to address practices that lead to the province incurring irregular, fruitless and wasteful expenditure,” he said.

One area of concern was the state of finances in municipalities, with only the Midvaal local municipality tabling a funded budget, he said.

“Failure to meet financial commitments persist in most municipalities and this led to the provincial government imposing financial recovery plans in three municipalities, namely the Emfuleni and Merafong local municipalities and the West Rand district municipality.”

Mamabolo expected, however, that the provinces’ ten technical advisers, appointed and deployed across various municipalities to improve financial management capacity in local government, would close the gaps and resolve some of the recurring problems in the municipalities.

Their scope of work includes municipal financial management and the implementation of financial recovery plans where municipalities are under provincial interventions.

“In March of this year, we convened door-to-door meetings with Members of the Mayoral Councils responsible for finance to discuss the state of finances and the implementation of audit action plans. We will be meeting with all the political leaders of the district and local municipalities on a regular basis to discuss action plans to improve the performance of their entities,” he said.

In terms of the debt owed to State-owned power utility Eskom, he said that the Provincial Treasury and National Treasury were consulting on the incentivised debt relief package Finance Minister Enoch Godongwana announced during the tabling of the 2023 National Budget Speech.

To implement activities aimed at supporting local government in the province to improve their financial management capacity, the Gauteng Provincial Treasury allocated the Municipal Financial Governance business unit R90-million in this financial year.

Meanwhile, Mambolo noted that his department would continue to improve fiscal management and increase compliance that promotes clean governance and accountability; integrate and synergise budget and planning processes; and improve revenue collection during this financial year.

“The department will continue to implement cost-cutting measures on cost containment items. This will be done during both budget formulation and operations. We will apply appropriate fiscal policy to inform budgets and performance management reviews of compensation of employees to ensure outcome, impact, efficiency and productivity gains to inform budgets,” he continued.

To achieve this, R170-million has been allocated to the Sustainable Fiscal Resource Management business unit to implement its strategic objectives in the 2023/24 financial year.

In terms of the compliance with legislative prescripts, the Financial Governance business unit is committed to promote transparency and accountability by ensuring compliance with financial standards, norms and standards as contained in the Public Finance Management Act.

“As part of efforts to improve clean audits, we will enhance our oversight and support role to address findings that lead to regression in audit outcomes and improve on accountability and governance matters. The department will continue to provide support to the resolution of outstanding audit matters raised by internal audit and Auditor General South Africa to improve on areas of concern in governance and financial management through targeted interventions,” said Mamabolo.

Meanwhile, significant progress is being made to ensure that suppliers are paid on time, with data indicating that, with the exception of the Department of Health, all departments pay their suppliers within 30 days of receiving a valid invoice.

“Our efforts for compliance for all 14 departments and the six entities are directed to facilitate invoice processing towards compliance for all departments and entities. As such, we have issued a directive, which is being strictly enforced, that all supplier invoices must be submitted through the Electronic Invoices Submission for processing and payment. This is an Internet-based supplier portal which allows suppliers to upload invoices and to track invoice statuses.”

The Financial Governance business unit has been allocated an amount of R135-million for this financial year to do the work of promoting clean and accountable governance in the province.

Further, a total of R142-million has been allocated to the Gauteng Audit Services (GAS) for this financial year to support the provincial government in achieving a clean administration through performing risk-based audits, information systems reviews and service delivery audits.

Meanwhile, to strengthen the fight against corruption and ensure compliance with rules, Provincial Treasury will introduce pre-compliance checks prior to creating a purchase order for quotations between R500 000 and R1-million.

“This is a proactive measure to ensure that transactions are compliant with rules and regulations before they are implemented. We will explore procurement rules which allow government and its main contractors to buy from large groups of township-based businesses, with systems linking them to supply as if they were one large firm. This will build the needed capacity for these businesses to supply large markets and discover new suppliers.”

The Provincial Supply Chain Management business unit is allocated a budget of R105-million in this financial year.

The Gauteng Infrastructure Financing Agency (GIFA), which continues to implement the mandate of raising alternative funding for strategic infrastructure projects that would be financed off-budget, has been given R63.7-million to fund its activities for the 2023/24 financial year.

The key projects to be supported by GIFA are the State-owned bank and the State-owned pharmaceutical company, for which legal due diligence for their establishment has been completed.

“The focus in 2023/24 financial year is to develop the business cases for the State-owned bank and the State-owned pharmaceutical company in line with the proposed form of establishment as outlined in the legal due diligence reports,” he said, noting that a number of GIFA’s projects achieved significant milestones in 2022/23 financial year with the focus in this current financial year to propel them to market release and financial close.

These include the Gauteng Schools Programme, Innovation Hub - EB3 and the Merafong Solar Farm Cluster, besides others.