SCOPA report on 2011/12 provincial audit outcomes

Bobby Stevenson MPL

DA Eastern Cape Provincial Legislature Leader

The Eastern Cape Provincial Legislature will consider a report by the Standing Committee on Public Accounts (SCOPA) this afternoon (Thursday, 25 April 2013) on the audit outcomes of provincial departments for the 2011/12 financial year.

Speech notes: On the Standing Committee on Public Accounts report on audit outcomes for the 2011/2012 year

There are a number of issues that concern the Democratic Alliance.  They are:

1.            The need for competency testing;

2.            Irregularities in supply chain management;

3.            The implementation of SCOPA Resolutions;

4.            The use of accruals as a smoke screen for unauthorised expenditure;

5.            Planned targets are not met; and

6.            The lack of compliance with the Public Finance Management Act.

A key issue that concerns us is the matter of competency testing in the Department of Education.   This is a matter I pushed for in the committee. I’m glad it forms part of the report.

The problems of the Education Department, who received a disclaimer, will continue to haunt us until we deal with the core issue, which is the ability of senior managers in that department to do their job. National intervention has very limited value as when they withdraw the same people continue to do the work.

I fully endorse the recommendation of the committee that the Office of the Premier and Public Service Commission must consider competency testing of the management of that department.

This issue has been brought sharply into focus with the department having to spend R28 million by getting Stats SA to count Eastern Cape’s pupils because the directorate responsible cannot be relied on.

Let us be brutally honest. There has been turnaround plan after turnaround plan but the audit disclaimers continue.  The only way to turn education around is to get rid of the rot that is destroying opportunities for millions of our learners. Performance contracts for all managers going all the way down to school principals needs to be enforced if education is to be improved in this province.

We cannot afford to continue to sacrifice the future of millions of learners on the altar of political cowardness. There needs to be the political will to hold people accountable for poor performance.

Secondly, irregularities in supply chain management are the root cause of corruption in this province. Variations, last minute issuing of tenders, lack of value for money and price fixing are ways used to engage in corrupt practices. Strict compliance with supply chain management regulations needs to take place.

In the year under review the report is characterised by repeat findings.  This is due to the lack of implementation of previous resolutions. Of the R2 billion in irregular expenditure that occurred in this period R1, 85 billion was supply chain management related. This follows a similar trend in our municipalities.

With regards to the lack of implementation of resolutions, the Auditor General recently commented that only 3% had been implemented from the 2010/ 2011 financial year.  This acts as a stark reminder of a statement made by former colleague Eddie Trent in 2000, that none of the 43 resolutions taken by SCOPA between 1996 and 2000 were implemented.

I welcome the new approach of the committee where it has been agreed that we will receive quarterly reports on the implementation of these resolutions and we will debate progress in the house.

A fourth issue that concerns the DA is the use of accruals as a smoke screen for unauthorised expenditure. Nine departments did not have a sufficient budget to pay the accruals. As a result, the 2012/13 budgets were eaten into…Education, Health and Roads and Public Works used 10% or more of their 2012/13 budgets to settle outstanding liabilities for the previous year.

There was also under spending on conditional grants in this period as well. Housing underspent its conditional grant by R472 million. In the 2012/13 year it was R290 million. This, in a climate where housing backlog increased from 700 000 to 750 000. Education, Health, Sport Recreation, Arts and Culture also under-spent their conditional grants by 10% or more.

The fifth issue that concerns the DA is the fact that planned targets were not achieved during the year. The worst performing department in this regard was the Department of Rural Development and Agrarian Reform. Only 10% of targets were achieved in the year under review.

When we questioned the department we were informed that the current staff are not fully aligned to what their department should be doing. It was also stated that there is a problem with the capacity with senior management. There is also a poor working relationship between the head of department and the MEC. These issues need to be dealt with as a matter of urgency as this department needs to be a key driver of development and job creation in our province.

A final issue concerns the compliance with the Public Finance Management Act. The lack of political will to enforce its provisions ensures clean audits will remain a pipe dream

This province is facing a R5, 2billion cut in equitable share over the next three years as a result of the census. In this context our efforts need to be redoubled to ensure we get value for money expenditure.

Increasingly, there is growing frustration with the slow pace of service delivery in our province. People are recognising that this is a result of corruption, maladministration and greed. The failure of the province to root out incompetence, mismanagement and corruption undermines our democracy and forces people to take to the streets.

The evil of apartheid and its legacy of skewed patterns of development in our society, the havoc it wrecked on families will be with us for years to come. No one can deny this.

However we ignore Trevor Manual’s warning at our peril: “We cannot continue to blame apartheid for the failings of our state. We cannot plead ignorance or inexperience. For almost two decades the public has been patient in the face of mediocre services. The time for change, for ruthless focus on implementation has come.”

That time is now.

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