joint opposition rejects second adjustment appropriation bill, requests investigation into R65.7 million

Andrew Louw, MPL

DA Provincial Leader:

The opposition in the Northern Cape Provincial Legislature jointly rejects the second adjustment appropriation bill 2014/15 on the basis that it promotes a lack of accountability. The DA, COPE and EFF are of the view that the portfolio committees must call the department of Transport, Safety & Liaison as well as NCEDA as a matter of extreme urgency to account for the spending of the funds. We must have a report from both by the end of the month and the provincial Treasury must intervene to prevent similar occurrences in the future.

We appreciate that we were given the opportunity to engage in the portfolio committee on Finance. However, we want to repeat what we said in the committee meeting on record so that the public knows that we do not condone any wrongdoing.

Firstly, as it relates to the department of Transport, Safety &

Liaison: An amount of R60 million had been transferred, purportedly for road safety education. The first red flag is that since 2011/12, the sub-programme Road Safety Education under Transport Regulation has received a budget of two to three million. For the 2015/16 financial year, the Road Safety Education sub-programme is set to receive R2.7 million. Why is it necessary to increase this sub-programme’s allocation twentyfold?

The second flag is the rate against which the department spent its funds. The funds were allocated with the condition that unspent funds would have to be surrendered on the 31st of March 2015.The R60 million was transferred in batches, with the first batch of R35 million received in August 2014. So why is the R60 million left out of the first adjustment appropriation bill? The first adjustment appropriation bill, tabled in November 2014, only makes reference to

R5.5 million, the bulk of which was approved for learner transport.

Secondly, as it relates to NCEDA: An amount of R5.7 million has been transferred to accelerate the development of the Special Economic Zones. As it stands, NCEDA has one board member and no supply chain management unit. The chief executive officer of NCEDA is the accounting authority, subject to the control of the board. If there is only one member, the chairperson, there really is no board to speak of and the board cannot exercise control over the chief executive officer.

In the absence of a supply chain management unit, goods and services are procured in a way which openly flouts the Public Finance Management Act and Treasury Regulations 16A6. In a report tabled on the 3rd of March 2015, NCEDA admitted that a contract valued at approximately R600 000 had been awarded at the sole discretion of the accounting officer. This is in direct contravention of Treasury Regulation 16A6, which clearly states that goods and services must be procured either by way of inviting competitive quotations or through a bid committee. Public funds cannot be used to buy anything on the say so of one person alone.

Treasury knows that if it transfer funds to NCEDA, goods and services will be procured in a way that is inconsistent with laws and regulations. How can it be allowed?

Yesterday in the Portfolio Committee meeting on Finance, Treasury put forth the view that they are the conduit through which funds flows into the province and that the ultimate accountability rests with departments and entities. This is just a half-truth.

We are of the view that Treasury must own up to its responsibilities in terms of section 18 of the Public Finance Management Act. Section

18(1) and (c) specifically states that Treasury must exercise control over the implementation of the provincial budget. Section 18(1)(c) goes a step further and states that Treasury must “enforce”

transparent, efficient management.

Treasury has an oversight responsibility that it cannot shirk. It cannot exonerate itself of all responsibility, pay over funds and shrug off any questions as to how it is spent. The Public Finance Management Act is clear on what is expected of Treasury and we call on Treasury to be serious about its role.

For the sake of accountability, we will not let this issue rest.