Gauteng's R465.4 million surrender dwarfed other provinces, representing nearly half of all surrendered funds.
South African provinces surrendered R923 million in unspent conditional grant funds during the 2023-24 financial year, according to Finance Minister Enoch Godongwana.
The surrendered amount represents funds that provinces were unable to utilise within the allocated timeframe across critical sectors, including health, education, and human settlements.
Gauteng province recorded the highest surrender at R465.4 million, while KwaZulu-Natal was the only province that did not surrender any funds.
Provincial breakdown reveals disparities
The provincial breakdown, revealed in a parliamentary response to DA MP Wendy Alexander, shows stark differences in spending capacity across South Africa’s nine provinces.
Gauteng’s R465.4 million surrender dwarfed other provinces, representing nearly half of all surrendered funds.
The Western Cape surrendered R224.4 million, making it the second-highest contributor to unspent funds.
Limpopo followed with R68.6 million, while the North West province surrendered R66.6 million.
The Eastern Cape surrendered R62.7 million, while the Free State’s unspent amount totalled R19.3 million.
Mpumalanga surrendered R10.5 million, and the Northern Cape recorded the smallest surrender at R5.6 million.
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Human settlements sector records highest underspending
According to information provided by Godongwana, analysis by sector revealed that human settlements experienced the most significant underspending, surrendering R409.1 million of allocated funds.
This represented nearly 45% of all surrendered provincial grant money.
Health sector underspending reached R193.3 million, while roads and transport surrendered R155.9 million.
The education sector returned R92.3 million in unspent funds.
Sports, arts and culture surrendered R32.7 million, while agriculture returned R24.4 million.
The public works sector recorded the smallest surrender at R15.5 million.
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Systemic challenges behind underspending
Godongwana outlined specific challenges that prevented provinces from utilising allocated funds across different sectors.
Human settlements faced particularly severe constraints that hindered project delivery.
“Unfilled vacancies, such as planners, engineers and project managers, led to projects not being delivered on time, resulting in the under expenditure, and subsequent surrender of funds,” Godongwana explained regarding human settlements underspending.
Meanwhile, the health sector encountered procurement delays that significantly impacted spending capacity.
“Delays in procurement on the National Tertiary Services grant. A large part of health technology is imported,” the minister noted.
Education and infrastructure sectors face implementation delays
The education sector underspending stemmed from procurement and staffing challenges that delayed programme implementation.
“Delays in the procurement of laptops for officials and the non-appointment of personnel under the School Nutrition Programme” contributed to the R92.3 million surrender, according to Godongwana.
Public works struggled with employment programme timelines that affected the utilisation of funds.
“Contracts of EPWP workers not finalised on time, hence unspent funds were surrendered and not rolled over,” the minister stated.
Transport sector challenges included legal obstacles and contractor performance issues.
“Delays in project completion due to legal action that halted implementation, and poor contractor performance, which resulted in the project not being completed,” Godongwana explained.
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Agriculture sector hampered by community unrest
The agriculture sector’s R24.4 million surrender resulted from external disruptions.
“Projects not completed due to community unrest, and planned training of farmers not completed on time” prevented full fund utilisation, the minister revealed.
Bus subsidy allocations within the transport sector also contributed to underspending due to contracting delays.
“Regarding bus subsidies, some contracts were only finalised in the 2nd quarter, resulting in the funds being unspent,” Godongwana noted.
National Treasury response and oversight measures
According to Godongwana, the National Treasury has implemented regular engagement mechanisms to address provincial underspending challenges.
These interventions aim to improve grant performance across all sectors and provinces.
“The National Treasury regularly engages with departments responsible for administering conditional grants,” Godongwana stated.
The treasury’s approach includes active participation in sector-specific review processes.
“The National Treasury officials frequently participate in sectoral meetings where grant performance is reviewed,” the minister explained.
He said the treasury provides ongoing support to enhance implementation capacity.
“During these engagements, issues of non-performance are raised with both provincial and national departments and the National Treasury provides guidance to support improved implementation,” Godongwana stated.
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