Treasury little more than a crutch for weak and incompetent departments

By Francois Rodgers, MPL, DA KZN Spokesperson on Finance:

THE KZN Treasury faces an uphill challenge as it struggles with its mandate to;

  • Promote sound financial management
  • Fiscal management through good governance.
  • Ensure targeted financial resource allocation
  • Enhance department /municipalities and public entities capacity and capabilities on SCM to eliminate irregular expenditure.

This struggle is not within its own lack of capacity and the Finance MEC, her HOD and staff need to be congratulated for their continued effort in these fundamental strategic goals. If it were not for Treasury’s efforts over the past few years, KZN would certainly not be in the position it finds itself today.

Political will

The question that faces Treasury is simply this: do all departments in this province have the political will or the capability to comply with fiscal discipline?

The continued non compliance by certain provincial departments does not reflect this.  Perhaps it’s a case of “you can take a horse to the water but you can’t make it drink.” Quite clearly we face a scenario of repeat offenders with no accountability or consequence.

When will KZN reach the juncture to collectively state “so far and no further?

When will this province, under the leadership of the ANC, ensure that officials and/ or comrades will be held accountable?

To quote from the AG’s report on unauthorised expenditure, “The intense fluctuation in this expenditure highlights auditees inability to steadily monitor and control their spending. It is of concern that management can detect but does not prevent unauthorised expenditure”.

Education and Health, the repeat offenders in unauthorised expenditure, are now facing ‘first charges’, ultimately effecting service delivery.

On irregular expenditure the AG also had this to say: “Irregular expenditure incurred and the high number of instances thereof over the past three years is a matter that requires swift and decisive action to contain this trend”.

Here again Education, Health with the addition of Arts and Culture are the key culprits, collectively being responsible for 93% of all irregular expenditure.

The AG’s report continues to state that fruitless and wasteful expenditure has increased by 18%.  Here again repeat offender Education takes centre stage followed by Public Works, CoGTA and Human Settlements.

The AG’s findings are a clear as mud when it comes to recognising that some departments clearly lead while others appear unable to follow when it comes to fiscal discipline.

Forensic investigations

Further evidence of limited capacity and no apparent accountability or consequence, is clearly evident in the number of forensic investigations and the use of consultants in certain provincial departments.

Allow me to unpack some of this information.

  • Currently this province has 694 forensic investigations taking place costing the KZN taxpayers almost R600 million
  • The repeat offenders Education and Health are here again but the worst of them all is the Transport department, which has run up the obscene cost of R481 million.

It should be noted that nine departments failed to respond to the written question, MEC Scott raising her frustration that certain MEC’s seem unable or unwilling to respond. So much for transparency and oversight in the ruling party!

If one looks at the evidence it becomes evident that Treasury has become nothing more than a crutch to weak and incompetent departments.

Treasury Budget

One would think that after 21 years in Government the ANC would have been able to ‘separate the wheat from the chaff’.  Clearly this is not the case as the ANC continues on its path of the systematic destruction of the South African economy under the ever watchful eye of President Zuma.

The province of KZN can no longer continue to spend inordinate amounts of money on protecting non performing comrades and cadres, at the expense of service delivery, which ultimately effects the poorest of the poor.

The DA values charter sums it up succinctly “All South Africans pay tax and every cent of government money belong to the people. Taxpayers money should be spent for the benefit of the people, not the connected few”.

Evidence of this inordinate spending is evident in the budget allocation for treasury, which has increased a whopping 73% – from just over R400 million to over R712 million – in the past four financial years.   This is almost 200% above the inflationary factor.

The question is why?

The answer is quite simple – as the fiscal crunch took its grip on the country and our province so it exposed weakness in the management of certain departments and so Treasury had to increase its budget to support, mentor and in some case manage the finances of some departments.

Don’t take my word for this; allow me to drill down further into the budget.

  • Programme 1, Administration, increased by 73% over the same period – the main reason for the way above inflation increase – to allow for an increase in staff numbers to assist non performing departments
  • Programme 2, Fiscal Resource management, increased by 220% – this to ensure efficient expenditure management and accurate financial reporting by departments and municipalities. One can only surmise that the increase in this programme’s cost of R32million in 11/12 to over R103million this year-is to salvage ANC led municipalities in a state of collapse
  • This reminds me of a recent statement made by the minister of CoGTA, “If you are found to have benefited as a municipal official or employee in any improper conduct in tender management, we will come to you through the state attorney’s office”.  The DA hopes to soon see the entire Harry Gwala Municipality in the state attorney’s office.
  • Programme 3 and 4 budgets have also increased by well over 70% – these programmes to address SCM and internal audit.

Fiscal discipline

The DA welcomes the E’procurement tool to be launched by Treasury.  With both this and the cash blocking mechanism many departments will be restricted and financially ham strung when it comes to SCM and over expenditure. The challenge is whether this can be applied across the board, unlike the selective cash blocking currently implemented.

KZN needs a fiscal discipline that is enforced by all departments, all MEC’s, all HOD’s, all CFO’s and all officials. Those repeat offender or individuals who don’t comply should simply be shown the door.