Fourth Quarter Expenditure 2009/10: Committee's Draft Report: consideration
Meeting Summary
The Committee met to consider its draft Report on the Fourth Quarter Expenditure of 2009/10. Members were asked to concentrate on, and consider, certain underlined portions of that report.
The Committee had been considering spending patterns in the various departments, and was concerned to note that all departments, with the exception of the Department of Transport, had under spent in this quarter. The Department of Water and Environmental Affairs under-spent by R187.1 million which amounted to 2.4% of its budget, and R13.6 million for Water Services Operating Subsidy Grant for the refurbishment of water scheme was not transferred to municipalities due to a lack of accountability by municipalities. The Department requested a roll-over of R 126.4 million from National Treasury. The Committee was concerned to note that some households, schools and clinics still had a desperate need for water yet underspending was occurring in areas such as Water Services and the Water Services Operating Subsidy Grant to municipalities. Members noted further concerns around sanitation throughout
The Department of Transport had overspent by 1% of its budget, as a result of high spending on the bus subsidy in the Public Transport programme. Members were concerned that the shift of funds might be indicative of poor planning, and noted that appropriate measures were needed to ensure accurate and proper financial and programme planning. Members asked that this Department be called in to account to the Committee and be asked to give a detailed written report.
The Report outlined other underspending by the Department of Home Affairs, Statistics South Africa, the Department of Labour and Department of Human Settlements, but there was no specific comment on these sections of the Report. Members noted that the Department of Agriculture, Forestry and Fisheries was allocated R367 million for Micro-Agricultural Institutions of South Africa (MAFISA), but had, by the end of the third quarter, only transferred 39.8% of the funds. Furthermore, although funds amounting to R48.6 million were allocated to AgriBEE, there was no transfer of funds for this purpose at the end of the third quarter. The Committee wished both Land Bank and the Department to appear to explain this.
Members felt that the reports should be provided also to the Standing Committee on Public Accounts. Members also said that although time frames for responses to recommendations were given, it seemed that the system was failing as only National Treasury had so far responded, and suggested that if departments failed to respond within 60 days, they should be called in to explain their failure to respond and to report on what was being done about recommendations. Members discussed the “Findings” section of the Report and commented on changes to the wording.
Meeting report
Fourth Quarter expenditure 2009/10: Committee’s draft Report
The Committee’s draft Report (the Report) on expenditure in the fourth quarter of 2009/10 was tabled.
The Chairperson asked that Members should focus on the underlined sentences of the document (see attached document for details) when discussing the issues. He added that new additions to the document outlined the areas of engagement between the departments and the Committee.
The report outlined spending patterns by various departments. All, with the exception of the Department of Transport, had underspent in this quarter. The Department of Water and Environmental Affairs under-spent by R187.1 million, or 2.4% of its budget. An amount of R13.6 million for Water Services Operating Subsidy Grant for the refurbishment of water scheme was not transferred to municipalities due to a lack of accountability by municipalities. The Department requested a roll-over of R 126.4 million from National Treasury. Members had expressed concern that certain households, schools and clinics were still without water in certain areas, yet the Department under-spent in areas such as Water Services and Water Services Operating Subsidy Grant to municipalities.
The Department of Transport had overspent by R263.3 million, or 1% of its budget. This over-spending resulted from high spending on the bus subsidy in the Public Transport programme. Despite the over-spending, there had been a shift of funds, which might be an indication of a lack of proper planning by this department. Appropriate measures were required to ensure accurate and proper financial and programme planning.
The Department of Home Affairs under-spent by R56.7 million due to slow spending in Immigration Services. Statistics
The Department of Labour shifted R93 million from the compensation of employees under the Service Delivery Programme due to the early realization of high spending variance as a result of vacancies.
The Department of Human Settlements under-spent by R233.3 million due to vacancies, consultants’ costs and acquisition of goods and services.
The Department of Agriculture, Forestry and Fisheries was allocated R367 million for Micro-Agricultural Institutions of South Africa (MAFISA). At the end of the third quarter, the Department only transferred 39.8% of the funds. Funds amounting to R48.6 million were allocated to AgriBEE. No funds were transferred to the Land Bank for AgriBEE at the end of the third quarter. Based on the information provided, it was clear that there were challenges on both MAFISA and AgriBEE funds. The Committee would consider inviting both the Department and Land Bank to hearings where they would account for the use of these funds.
The Chairperson asked the Members to focus on the underlined sentences of the document (see attached presentation for details) and noted that new additions were the areas of engagement between the departments and the Committee.
Paragraph 3.8: Department of Water and Environmental Affairs
Mr M Swart (DA) commented that there was a concern regarding sanitation throughout
The Chairperson commented that water was a major issue and at the end of the day it was difficult to assess which municipalities did not receive the grant.
Mr J Gelderblom (ANC) said that water was vital for farming activities and that saving water would be a major challenge worldwide. There were many drought areas. Food security was also of utmost importance for all farmers, including poorer and new farmers.
Mr D Mavundla (ANC) commented that the masses were seriously affected by the lack of accountability of the municipalities. He noted the Committee’s recommendations to reach the upper structures in government.
Dr P Rabie (DA) wanted to know whether the Goede Hoop dam was completed.
The Chairperson commented that the Committee did not focus on this issue but rather looked at the bigger projects.
Ms R Mashigo (ANC) commented that the Department was a slow spender and that sanitation would be moving to the Department of Human Settlements.
Paragraph 3.9 Department of Transport
The Chairperson commented that the issue of bus subsidies was a problem. Subsidies were not forthcoming and schools could not pay for the buses. As a result of overspending, there was shifting of funds from elsewhere. The Infrastructure and Systems Grant were important areas. The Department of Transport had not planned properly. The 1% over-expenditure may sound small, but became quite significant in this context.
Ms B Ngcobo (ANC) suggested that the Department of Transport should be invited to the Committee soon, so that it could give more insight into what was happening.
The Chairperson said that accurate reporting by all Departments was imperative to enable the Committee could get a better understanding of what was taking place in each Department.
Mr Swart wanted to know whether the Department could give a written response to the Committee about the over-expenditure on the bus subsidies.
Mr L Ramatlakane (COPE) wanted to know what time-frame should be given for departments to respond, and what explanation this Department had given to National Treasury regarding its over-expenditure and the adjustments that followed.
Ms R Mashigo (ANC) suggested that the Department must properly outline its programme and goals for the future.
Paragraph 4. Other spending issues
Mr Swart said that the Committee could get the whole schedule from the Micro-Agricultural Institutions of South Africa (MAFISA) to see what exactly was spent.
Conclusion
Mr Gelderblom commented that the Standing Committee on Public Accounts (SCOPA) dealt with the issue of audit reports and that it was important that the reports be given to SCOPA.
Dr Rabie agreed with Mr Gelderblom and said that SCOPA was reactive.
Mr Ramatlakane commented that the word “indicative” in the first sentence of the conclusion should be replaced with the word “reported”.
Mr G Snell (ANC) said that the rules of Parliament set time-frames for responses to recommendations. He wanted to know whether the system was failing.
Mr Ramatlakane said that the recommendations made by the Committee should be taken seriously and that National Treasury normally captured all the recommendations on all Departments into one publication. He would like to see responses to the recommendations within 60 days, failing which the departments should be called back to explain why they failed to respond, and why the recommendations were not acted upon.
Ms Mashigo noted that only National Treasury had thus far responded to the Committee’s recommendations.
The Chairperson commented that the Committee should only focus on specific recommendations and not general ones.
Paragraph 6: Findings
Ms Mashigo and Mr Swart recommended that paragraph 6.1 should not appear in the findings.
Mr D Mavundla (ANC) and Mr Ramatlakane felt that it should remain.
No Members submitted comments on paragraph 6.2.
In relation to Paragraph 6.3, Mr Snell commented that the “transfer of grant funds” had changed.
There were no comments on paragraph 6.4 or 6.6.
Mr Mavundla said that he did not like the last sentence in paragraph 6.5, but the Chairperson did not see that there was a problem with this paragraph.
(ANC) had an issue with the last sentence in this section.
The Chairperson had no problem with the section.
In relation to paragraph 6.7, Mr Ramatlakane felt that the Committee should not speak on the Department’s behalf.
The Chairperson said that the issue of bus subsidies continues to pose a challenge to the Department.
There was no comment on paragraph 6.8.
In relation to paragraph 6.9, Mr J Gelderblom (ANC) asked whether a finding should be approximate and what message wanted to be sent.
Mr Snell commented that it was possible that the entire R700 million did not go to covering court cases.
The Chairperson commented that the Department seemed to be evading the question when asked about how much money they spent court cases.
Mr Ramatlakane suggested that the Committee should look at the latest report given to them by the Department.
The meeting was adjourned.
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