Premier warns departments

SKUKUZA – The premier Mr David Mabuza has instructed that provincial departments of agriculture, rural development and land administration (Dardla), community, safety, Security and liaison (DCSSL) and also health be given intensified support because of their poor state of finances.

Speaking at the Executive Council Lekgotla on Monday, he instructed the provincial treasury and the Office of the Premier, to send special teams to the three departments to provide intensified financial management support.

This was after the provincial treasury had presented six-monthly reports on budgets and expenditure for all provincial departments.The provincial treasury had also recommended that the three departments receive special attention.

At Dardla, the provincial treasury recommended that a moratorium be declared since the department faced huge financial challenges caused by overspending, among others. It filled posts without necessary funding and was currently not in a position even to replace the current resignations.

The department even regressed on the audit outcome of the Auditor General and the current problems will make it almost impossible to correct the qualification on the basis of materialism and other previously reported matters.

The department is seriously under severe pressure with regard to issues of accruals while performance is relatively low. In the current financial year, the department will not be able to meet targets while the budget will be spent in full. The department’s accruals had increased from R38 million, to R92 million and to R113 million.

On the other hand, DCSSL’s budget has already been depleted. The provincial treasury reported during the Lekgotla that DCSSL has already presented a request for funding to the value of R275 million.

The department is expected to run out of cash in February and March in 2014 because of the security services that had created serious challenges for the management and administration of the department’s budget items.

According to the provincial treasury, over and above these challenges, payment for security service onwards might not be possible due to unavailability of the budget. Other challenges had been created by monthly payments of the use of government vehicles, audit fees, communication items, operating leases, property and electricity payments.

According to the provincial treasury, the situation might create challenges not only for the department, but for the entire provincial government because most of the security officers would not get salaries in time.

These problems would further affect the department in honouring its contractual obligations in paying the service providers within 30 days period as per the requirement by the public funds management act.

The department of health was sent back to reprioritise its budget as it had cash-flow problems. Its accruals which amounted to R247 million would make it impossible to achieve its plans. Shockingly it had also budgeted R364 million for overtime work.

The Lekgotla further decided that the department should review its budget and use the money to pay for accruals. Mabuza demanded that the departments’ chief financial officers should explain themselves before the provincial budget and finance committee as their monetary situations were way out of hand.

“What happened in these departments was nothing but carelessness. The three chief financial officers must explain themselves, if needs be, they must leave the departments. Prudent financial management must be implemented at all costs,” said Mabuza.

The intensified support by the teams to be dispatched, will strengthen financial management directorates by monitoring their spending and provide spending plans.

Financial transactions will now be administered by the provincial treasury and assisted to reprioritise until they could function on their own.

The Lekgotla is being attended by all members of the executive, heads of departments, mayors, chief executive officers of parastatals and municipal managers.