Committee Report on Provincial Expenditure 2017/18

NCOP Finance

07 August 2018
Chairperson: Mr C De Beer (ANC; Northern Cape)
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Meeting Summary

The Select Committee on Finance adopted the draft report on the provincial treasuries’ preliminary budget outcomes for the 2017/18 financial year.

The Committee resolved it would request the National Treasury and Auditor-General of SA (AGSA) to brief it on the audited figures because the reported figures by the provinces were not audited. The National Treasury and AG would also have to brief the Committee on the progress made by the provinces on the implementation of the economic growth and development strategies. The Committee pointed out that though the majority of the provinces were implementing the economic growth and development strategies, things on the ground were not depicting the rosy picture painted.

The Committee further agreed to arrange a follow-up meeting with all the provincial treasury departments to iron out concerns the National Treasury raised in order to assess progress that has been made. It also resolved to meet with COGTA regarding the R800m remuneration for the izinduna in KwaZulu-Natal because it was affecting the fiscus of the province.

The Committee also expressed concern about the never-ending rise in irregular and wasteful expenditure in the health and education departments of Mpumalanga, North West and Eastern Cape. It maintained that serious interventions were needed because it has been condoning this irregular expenditure for years and this was reflecting badly on the provinces and the manner in which they handle their finances.

The Committee then adopted three sets of minutes.

Meeting report

Mr M Terblanche (DA; Western Cape) wanted to understand how the Committee is going to deal with the document [Committee report on Provincial Treasuries preliminary budget outcomes for 2017/18 financial year] if the majority of ANC members were not in the meeting.

Mr M Monakedi (ANC; Free State) proposed the meeting should carry on even if the ANC members were not there because the Committee was quorating.

Mr Terblanche wanted to know how people who were not part of the proceedings were going to vote if they were brought in in case the Committee needed to vote on the contents of the document.

Mr F Shabangu (EFF; Free State) stated that if a member was not part of the meeting, that member would not be able to take a decision.

The Chairperson stated he has raised the matter with the members of his political party and said it is a matter he was really concerned about.

Mr L Gaehler (UDM; Eastern Cape) suggested that the meeting proceed.

Committee report on Provincial Treasuries preliminary budget outcomes for 2017/18 financial year


The Chairperson then took the Committee through the draft document, page by page.

Mr F Essack (DA) stated that the oversight visit to the Eastern Cape was an eye-opener for Members. The high rate of irregular and wasteful expenditure in the provincial departments of health and education is an area for concern and it shows how provinces were badly managing their finances. The figures were telling a story of how desperate the health departments in Mpumalanga and North West were. The Committee needs to do something about the doubling figures as this was a damning scenario to provinces because for years the Committee has been condoning this irregular expenditure.

The Chairperson said the matter would be discussed internally by the Committee. There is a solution because the problem could not be left unattended to.

Mr Shabangu wanted to know why a sum of R30m received by the Free State Department of Health from the Lesotho government was not reflected in the budget.

Mr Zolani Rento, Committee Secretary, explained that what the Members were seeing is what was presented to them when the Committee engaged with the provincial health department. The document was reporting on what the provincial department said to the Committee, not on what was not said.

Mr Essack remarked that the R353m overdraft of the Free State province needed to be interrogated because sureties given for this were not known.

Mr Monakedi reminded the Committee it was dealing with a report that captured its interaction with the provinces and National Treasury. Some of the issues, it appears, have not been captured though there are recommendations from National Treasury.

Mr Terblanche did not agree with the observations of the Committee that the provinces were making progress on economic growth and job creation because during the oversight visits he had not seen the roses that were presented to the Committee. On the ground there is nothing happening.

The Chairperson admitted there were challenges and indicated the Committee did not have the opportunity to see what was being done in each and every corner of the provinces.

Mr Monakedi remarked that what is important is that the majority of the provinces were trying to implement the economic growth and development strategies though not all implemented strategies were successful.

Mr Gaehler suggested that in future the provinces should be assessed by jobs lost and created.

Mr Essack advised Mr Monakedi to note concerns raised by Mr Terblanche against Committee concerns on persistent underspending on capital infrastructure and poor maintenance of economic and social infrastructure in some provinces that may negatively affect economic growth.

Mr Monakedi replied that he was not suggesting the economic growth and development strategies were successful, but it was important to note they were being implemented.

The Chairperson maintained that programmes run in provinces should be appreciated because it is not fair to say there is nothing happening. The Committee needs to be balanced in its assessment.

Mr Terblanche stated he was not changing his view because what the Members were seeing is not as rosy as the way it was presented to them.

Mr Gaehler commented that when the provincial MECs of Finance report on progress made in the implementation of economic growth and development strategies, the Committee must be informed about jobs created and lost because jobs can be created while they are being lost at the same time.

The Chairperson noted that the figures presented in the document were not audited. Now that there was an audit process in place, the AG and National Treasury would be asked to brief the Committee on the audited figures.

Mr Terblanche requested that when the AG and National Treasury appear before the Committee they must explain how successful the provinces are in the implementation of the economic growth and development strategies.

The Chairperson indicated the progress made so far needed to be acknowledged though Members want to see more.

Mr Gaehler suggested there should be a report back on what is being done to officials who wasted other people’s money on VBS Mutual Bank.

Mr Shabangu said the officials did not do this on their own. Political heads need to be accountable because they made the decisions and the officials executed the work.

Mr Essack proposed that a detailed report on the R800m for the remuneration of izinduna in KZN should be tabled before the Committee.

The Chairperson said the izinduna matter was affecting the KZN fiscus.

Mr Monakedi stated when the matter was discussed with COGTA; it was indicated there was no limit set on the number of izinduna for communities.

The Chairperson said the issue of izinduna would be discussed with COGTA in January 2019. The Committee would also arrange a follow-up meeting will all provincial treasury departments to deal with matters raised by the National Treasury on each province to assess progress made.

Mr Monakedi moved for the adoption of the report.

Mr Gaehler seconded the move.

The report was adopted with minor amendments.

Adoption of Minutes

19 June 2018 Minutes

The Chairperson took the Committee through the document, page by page.

Mr Gaehler proposed for the acceptance of the minutes.

Mr Shabangu supported the motion.

The minutes were adopted with no amendments.

22 June 2018 Minutes

The Chairperson took the Committee through the document, page by page.

Mr Terblanche moved for the adoption of the minutes.

Mr L Ndzimande (ANC) seconded the motion.

The minutes were adopted with no amendments.

26 June 2018 Minutes

The Chairperson took the Committee through the document, page by page.

Mr Essack proposed for the acceptance of the minutes.

Mr Gaehler supported the motion.

The minutes were adopted with no amendments.

The meeting was adjourned.

 

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