MBOMBELA – Shortfalls in the budget of the Mpumalanga Tourism and Parks Agency (MPTA) and the Mpumalanga Economic Growth Agency (MEGA) have resulted in the accumulation of wasteful and fruitless expenditure as far back as 2009.
This is according to a memorandum presented by the Department of Finance, Economic Development and Tourism to the Select Committee on Public Accounts (Scopa) on Friday October 10. The memorandum dealt with the progress made in the MTPA and MEGA on committee findings and house resolutions made by Scopa for the financial years 2009 to 2012. It was signed in November 2013 by former HOD Dr Vusanani Dlamini and addressed to Ms Pinky Phosa, MEC for economic development at the time.
The MTPA
According to the memorandum, some of the MTPA’s creditors had not been paid within 30 days as far back as 2009/10, which the department found was due to limited budget allocation and not any individual’s conduct. Again, in 2011/12 it was a limited budget that caused the non-payment of creditors within 30 days. The late payments resulted in interest being charged and the money was classified as fruitless and wasteful expenditure.
Yet, since the official and accounting officer for the 2011/12 financial year was no longer in the MTPA’s employ at the time the report had been compiled, disciplinary steps could not be instituted for the submission of annual financial statements without supporting evidence and making misstatements therein and failing to report or prevent irregular expenditure.
In November 2012 the agency attempted to source additional funding in the adjustment budget and received R20 million of which R12 million was allocated to settle litigation and R8 million to fence MTPA reserves.
The agency then requested that R44 million, earmarked for infrastructure upgrades, be reprioritised for trade payables and the provincial administration agreed that R21 million be reallocated for salaries and R10 million for security services.
According to the department, these funds were reallocated in 2013/14 for planned infrastructure. That year the agency’s funding increased from R298 million to R319,4 million.
The MEGA
MEGA experienced similar cash-flow problems. The Auditor General found in 2011/12 that MEGA had achieved only 58 per cent of its targets. This was attributed to a budget shortfall, staff shortages and inadequate policies. As a result, a moratorium had been placed on the issuing of loans. “The net result of targets not being met was that certain of our communities did not benefit from economic growth interventions that MEGA was supposed to provide as well as socio-economic upliftment programmes,” the memorandum reads.
“Due to the utilisation of the Micro Agricultural Financial Institutions of South Africa fund and payment made towards projects implemented on behalf of the department, MEGA experienced cash-flow challenges which resulted in the inability of the entity to honour its payments and therefore attracted interest and penalties which resulted in wasteful and fruitless expenditure.” These penalties and interest amounted to R2,6 million in fruitless and wasteful expenditure.
