South Africa: Committee to Call Provincial Treasuries to Address Worrying Trends

The Select Committee on Finance has resolved to arrange a follow-up meeting with all provincial Treasury departments to deal with matters raised by the National Treasury on each province to measure progress made.

As part of its oversight process, the committee engaged provincial Treasuries in June to assess and ensure fiscal sustainability, as well as to enhance oversight over provinces. During the sessions, the provinces presented their preliminary budget outcomes for the 2017/18 financial year.

Some of the challenges that the committee raised that provincial Treasuries will report on, include the continued worrying trend of irregular, fruitless and wasteful expenditure, the budgets of most Departments of Health and Education which are under serious pressure, impacting on service delivery, high medico-legal claims, as well as high accruals.

While the committee welcomed the fact that a majority of provinces had economic growth and development strategies that are aligned to broader government objectives of creating job opportunities, it has highlighted concerns of persistent underspending on capital infrastructure and poor maintenance of economic and social infrastructure in some provinces, which pose a risk of negatively impacting on economic growth.

The committee is also concerned about the continued concentration of economic activity to various provinces. To address this, the committee has called for the strengthening of a speedy implementation of economic strategies through various interventions and initiatives such as the establishment of Special Economic Zones (SEZs), AgriParks, oceans economy and small, medium and micro enterprises.

The late payment of invoices by government departments has a negative impact on small, medium and micro enterprises and goes against the spirit of the Public Finance Management Act. The provincial Treasuries must play an active role in ensuring that there is compliance in paying service providers within 30 days.

The increasing pressure on the fiscus caused by the high medico-legal claims to provinces, especially the Eastern Cape, KwaZulu-Natal and Gauteng, requires a workable strategy to ensure that money is redirected to service delivery. The three provinces currently have liabilities of R16.6 billion, R9.1 billion R22.6 billion in medico-legal claims, respectively.

The committee requires the provincial Treasuries to report on actions to hold those responsible for investing municipal funds in the VBS Mutual Bank. The committee has emphasised that the newly passed Public Audit Amendment Bill should be implemented as soon as it is signed into law,rdquo; said Mr Charel de Beer, the Chairperson of the committee.

The committee has reiterated the need for provinces to consider utilising the services of the Anti-Corruption Task Team to fast-track cases that are under investigation due to financial misconduct.

The committee will use the envisioned meeting to get action plans from provincial Treasuries on how they will address the raised challenges and report on progress made.

Source: Republic of South Africa: The Parliament