FS government sliding into a financial abyss

David van Vuuren, MPL

DA Chief Whip in the Free State Provincial Legislature

The Auditor-General’s audit outcomes for the provincial government for the financial year 2013/14 show that there has been little improvement in financial management and financial controls.

During the last financial year the province saw an increase of 87% in unauthorised expenditure amounting to R470 million. This is due to a 441% increase in unauthorised expenditure within the Department of Education totalling R427 million alone.

Irregular expenditure also skyrocketed. A total of 4 768 instances of irregular expenditure has been identified, more than double from the 2012/13 financial year. More worryingly is that the AG identified more than half of all cases. A clear indication that the provincial government is unable to adhere to sound financial practise. In total, irregular expenditure came in at R2, 429 billion for the 2013/14 financial year.

We also saw an increase in fruitless and wasteful expenditure amounting to R29 million.

This is largely due to key financial positions that have remained unfilled for 6 months or more. The government has unfilled positions for four Chief Financial Officers, seven Heads of Supply Chain Management units, two Heads of Strategic Planning and two Heads of Monitoring and Evaluation.

In total, due to the inability of the provincial government at large to effectively manage public finances, the province, at provincial level, lost almost R3 billion to questionable financial management practise. Coupled with the R4,858 billion lost towards unauthorised, irregular and fruitless and wasteful expenditure across all Free State municipalities, and an outstanding household debt totalling R5,4 billion, we have no doubt that the Free State is on the verge of becoming a failed province.

The Free State is sliding into the financial abyss.

Most departments and public entities remain stagnant, meaning that there has been little to no improvement in how public finances are managed.

Broadly, the audit outcomes of the provincial government for the previous financial year are:

  • Four unqualified audits;
  • Ten unqualified audits with findings;
  • Four qualified audits;
  • The Political Party Fund’s audit remains outstanding.

The DA has long maintained that the provincial departments of Health, Education, Human Settlements and the Office of the Premier are unable to effectively manage their finances. All four these departments received qualified audits with findings. The departments of Education and the Office of the Premier regressed in their audit outcomes over the last financial year.

Premier Ace Magshule’s office went from an unqualified to a qualified audit with findings in the space of one year. It would appear that as the premier is afforded more resources the less his office could be bothered with maintaining sound financial management.

Financial mismanagement and the deterioration in good governance in Free State has a direct negative impact in the quality of life of the people of the province. The current provincial unemployment rate is at 40% (expanded definition). Out of a total workforce population of 1.25 million, 496 000 people are unable to find jobs. Youth unemployment in the Free State is the highest in the country at 48.2%. The inability of Premier Magashule’s administration to effectively manage its resources compounds and entrenches socio-economic suffering of the people of the Free State.

Almost R8 billion has been lost in the Free State to financial mismanagement. This is R8 billion that, if applied appropriately, could have a major positive impact on the lives of the people of the province.

The ANC-led government does not have a good story to tell. Any attempt to do so is tantamount to misleading the people of the province. We make this statement not as mere political opportunism, but the facts in the audit outcomes of government in the province proves just this point. The ANC led-government of Premier Ace Magashule has total disregard for the people and the problems of the Free State.