In a virtual meeting, the Select Committee on Appropriations received briefings from National Treasury (NT) on the 2021 Division of Revenue Amendment Bill and the 2021 Adjustments Appropriation Bill.
The NT briefing on the Division of Revenue Amendment (DoRA) Bill provided details on the changes to provincial and local government allocations, the gazetted conditional grant frameworks and allocations, as well as the 2022 Division of Revenue in the Medium Term Budget Policy Statement (MTBPS). It also presented on the Adjustments Appropriation Bill and detailed unforeseeable and unavoidable expenditure, expenditure earmarked in the 2021 budget speech, roll-overs, self-financing expenditure, declared unspent funds, and virements and shifts.
On the DoRA Bill, most of questions were on the NT’s plans, particularly regarding the public expenditure programme. These included the R243 million that was reprioritised for the shortfall in the placement of medical interns; funds for tending to the pollution in the Vaal River; funding for the continuous maintenance of vehicles, water infrastructure, and roads, which were described as being in "a shocking state." Members questioned the purpose and effectiveness of the District Development Model (DDM), given its poor performance in the past. Had the sector department submitted a plan to the NT to ensure that the R178 million added for the Early Childhood Development Grant (ECDG), to provide unemployment risk support to 70 000 (ECD) workers impacted by the COVID-19 lockdown was used for the intended purpose? A Member said that considering COVID-19 and the parlous state of health facilities South Africa, there was a need to be very cautious about delaying the allocation of funds for health infrastructure.
On the Adjustments Appropriation Bill, Members referred to the additional allocation towards the police for the additional expenses that were incurred as a result of the July 2021 unrest in KZN and Gauteng, and asked if any funds were in the pipeline to make up for the shortfall that would be incurred with the movements of funds from the construction and upgrading of police stations to salary and wage overtime payments, as police stations were falling apart. The continued "fiscal dumping" at the end of the financial year was strongly criticised, and Treasury officials spent some time explaining under what circumstances roll-overs and virements were authorised.
The Chairperson welcomed Members of the Select and Standing Committees on Appropriations, and the chairpersons of the portfolio committees from the various provinces.
The Minister of Finance had tabled the 2021 Medium Term Budget Policy Statement (MTPBS) on 11 November 2021. The Select Committee (SC) was in the process of processing the MTPBS as was tabled, together with the Division of Revenue Amendment Bill [B19 – 2021] and the Adjustments Appropriation Bill [B20 - 2021]. In processing those bills, especially the Division of Revenue Amendment (DoRA) Bill, it was a known factor that the SC had a responsibility to work hand-in-hand with the provinces, hence the provincial portfolio committees had been invited to the meeting. She believed that all attendees had received the relevant documents, which were sent by the Secretariat.
The delegation from National Treasury (NT) included: Ms Malijeng Ngqaleni, Deputy Director-General (DDG): Intergovernmental Relations, NT; Ms Nompumelelo Radebe, Director: NT; and Dr Mampho Modise, DDG: Public Finance, NT, who would be leading the DoRA team.
The Chairperson assumed that Dr Dumisani Jantjies and his team from the Parliamentary Budget Office (PBO) were there, as well as Financial and Fiscal Commission (FFC) and the South African Local Government Association (SALGA).
She also welcomed members of civil society and the media to the meeting.
National Treasury briefing on Division of Revenue Amendment Bill
Ms Malijeng Ngqaleni, Deputy Director-General (DDG): Intergovernmental Relations, NT, presented.
The presentation covered an overview of the 2021 Division of Revenue Amendment Bill, including changes to provincial and local government allocations, changes to gazetted conditional grant frameworks and allocations, and the 2022 Division of Revenue in the MTBPS.
Changes in the clauses and schedules
• The main purpose of the DoRAB was to amend “Column A” of the DoRA schedules, which show the allocation for the current year;
• The new “Column A” created by the DoRAB shows the original allocation, the adjustment and the new allocation so as to maximise transparency in the adjustment process;
• “Column A” is amended for schedules 1, 2, 5 (Part B) and 6 (Parts A & B);
• Part A of Schedule 5 is substituted for Part A of Schedule 5 to the principal Act.
Changes to provincial allocations
Mr Bongani Daka, Intergovernmental Policy and Planning, National Treasury, presented this section.
Additional allocations for wage agreement
• To assist provinces to implement the wage agreement of the Public Service Co-ordinating Bargaining Council, R14.7 billion has been added to provincial allocations for the 2021/22 Presidential Youth Employment Intervention;
• In the 2021 budget, a provisional allocation of R11 billion was set aside in order to continue the response by government to address the impact of COVID-19 on unemployment;
- Applications were received from different sectors and several engagements were held between National Treasury, the Presidency and applicants;
- On 11 August, in terms section 6 1 of the Appropriation Act 2021 the Minister of Finance conditionally approved amounts to be allocated for the Presidential Youth Employment Intervention.
Presidential Youth Employment Intervention: Provincial Equitable Share (PES)
• Education: R6 billion was added to the PES for the employment of education assistants and general school assistants at public ordinary schools and public special schools. The funds were allocated by the Department of Basic Education (DBE) based on the number of job opportunities that would be created in the different provinces
• Health: R350 million was added to the PES to support provinces in the health sector. The funding will be used to employ staff and assistant nurses, and had been allocated through the PES formula
• Social Development: R120 million was added to the PES for the appointment of social workers as part of addressing the backlog of unemployed graduates. The funds were allocated based on the extent of social ills, number of service points and the nature of services provided
Presidential Youth Employment Intervention: Provincial Conditional grants
• Early Childhood Development Grant: R178 million was added to the grant to provide unemployment risk support to early childhood development (ECD)- related workers currently employed in ECD centres
Other changes to provincial allocations were shown on pages eight to nine, while a tabular summary was shown on pages ten to 11.
Changes to local government allocations
Mr Letsepa Pakkies, Senior Economist, NT, presented this section.
Budget Facility for Infrastructure
• Reduction of R1.3 billion in the Public Transport Network Grant (PTNG) to correct an over-allocation for the City of Cape Town’s MyCiTi public transport network;
• Addition of R81.3 million to the Regional Bulk Infrastructure Grant (RBIG) to fund the potable water security and remedial works project in George Municipality
Presidential Youth Employment Intervention
• Addition of R841 million in the direct Neighbourhood Development Partnership Grant (NDPG) to fund city-led public employment programmes
Reprioritisation in the NDPG
•R90 million would be shifted from the direct component to the indirect component to fund the provision of technical assistance to ill-capacitated municipalities
Rollover in the RBIG
• R582 million is rolled-over in the indirect RBIG for operational payments for the Vaal River Pollution Remediation Project in Emfuleni Local Municipality.
See page 14 for the tabular summary.
Changes to gazetted conditional grant frameworks and allocations
Integrated urban development grant (IUDG)
• Amended to include a provision for purchasing special vehicles for waste management to ensure alignment with conditions in the municipal infrastructure grant (MIG),as municipalities can move between the two grants
Municipal infrastructure grant (MIG)
• Amended to correct for the omission of the baseline allocation of R14.8 billion in 2019/20 in the past performance section of the framework
Neighbourhood development partnership grant (NDPG)
• Amended to remove reference to the submission of Built Environment Performance Plans
• Amended to include conditions attached to the approval of funds from the Presidential Youth Employment Initiative. Conditions require cities to expand the existing Expanded
Public Works Programme projects and enter into new partnerships with the private sector and civil society
Regional bulk infrastructure grant (RBIG)
• Amended to include the conditions attached to the approval of funding from the Budget
Facility for Infrastructure for the implementation of the potable water security and remedial works project in George Local Municipality. Conditions require submission of business plan, a revised cost benefit analysis and signing of a cofounding agreement
2022 Division of Revenue in the MTBPS
• Over the 2022 MTEF, national government resources decline at an annual average of 1.8 per cent, provincial resources increase by 0.7 per cent and local government resources increase by 4.1 per cent.
• No spending reductions are proposed in the 2021 Medium Term Budget Policy Statement (MTBPS)
• Over the medium-term:
• Allocations to provinces increase by R15.7 billion relative to the indicative allocations in the 2021 Budget;
• Allocations to local government increase by R1 billion relative to the indicative allocations in the 2021 Budget;
• Changes will be set out in more detail in the 2022 Budget Review.
• A shift of R1.7 billion from national government to the provincial roads maintenance grant
(PRMG) in 2022/23;
• Reprioritisations of R15 million in 2022/23; R20 million in 2022/23; and R30 million in 2024/5 from the PRMG to the Department of Transport to fund the central data collection system.
2022 MTEF Changes to provincial transfers
Mr Daka presented this section.
Changes to PES Formula
For the 2022 MTEF, changes will be made to the health component of the formula, resulting from a recent review and an update of the risk adjusted index which was last updated when the formula was reviewed in 2010;
- Changes will be phased in over a period of three years in order to allow for the provinces to adjust to the impact of the changes on their allocation
- Further details will be provided in the 2022 Division of Revenue Bill
• Agricultural colleges function shift:
- The Department of Higher Education and Training (DHET) and the Department of Agriculture, Land Reform and rural Development (DALRRD) have been working closely on the agricultural colleges function shift. It is anticipated that the process will be concluded by the time of the 2022 budget;
- This will result in the Comprehensive Agricultural Support Programme Grant shifting from provinces to national government.
• ECD function shift:
- The social development and education sectors have been working very closely along with NT and the Department of Public Service and Administration (DPSA) to oversee the migration of the function;
- As a result, the Early Childhood Development Grant will be shifted from Department of Social Development to the Department of Basic Education from 2022/23
Changes to Structure of Provincial Conditional Grants
Restructuring & shifting of funds between the conditional grants in health
• The HIV, TB, Malaria and Community Outreach Grant will be restructured from 2022/23 into two components, being the HIV/TB component and District Health Programme component.
• Furthermore, the Mental Health and Oncology components in the indirect National Health Insurance Grant will be shifted to the direct National Health Insurance Grant
• Funds have also been reprioritised from various components of the indirect National Health Insurance Grant to the Human Resources and Training Grant to cover the costs of medical interns and community services posts over the 2022 medium term expenditure framework (MTEF).
Repriotisation from Provincial Roads Maintenance Grant and the incentive component
• Due to delays in developing clear and objective criteria to allocate the incentive component in the PRMG, this allocation will be removed from the grant for 2022/23
• R15 million in 2022/23, R20 million in 2023/24 and R30 million in 2024/25, will be reprioritised from the PRMG to the Department of Transport (DoT) to fund a system that will be used to centralise data collected.
Changes to structure of Local Government Conditional Grants
Mr Pakkies presented this section
Municipal Systems Improvement Grant
• DCoG is proposing repurposing 100 per cent of the allocation to support the District Development Model.
Creation of indirect component of the MIG
• Envisaged to improve efficiency in grant expenditure to develop more and better quality infrastructure;
• Criteria determined by the Department of Cooperative Governance (DCoG) include indicators related to expenditure and reliability of infrastructure.
Application of non-financial performance in the in-year stopping and reallocation process
• To be tested in the MIG and focus on performance related to asset management;
• Full set of indicators, including those already identified for the MIG conversions, to be scored and ranked accordingly to determine which DoRA enforcement measure is most appropriate.
More details would be provided in the 2022 Division of Revenue Bill.
Mr S du Toit (FF+, North West) asked about the R243 million that was reprioritised for the shortfall of placements of medical interns. Did that include students from Cuba, or was it mainly for South African students? The rollover in the RBIG was good news. What amount was on the initial wish list regarding tending to the pollution in the Vaal River, with the current disaster situation? It was mentioned that R582 million would be availed. What was the actual amount that was needed? On the Integrated Urban Development Grant (IUDG), could the NT tell the Committee if the JB Marks municipality was included in that? It was a “great shock” for the whole MSIG to be allocated to the District Development Model (DDM). There was more than enough proof to show that amalgamated municipalities did not work, and making that footprint even wider would be detrimental to local municipalities in the country.
Mr M Moletsane (EFF, Free State) asked whether the sector department had submitted a plan to the NT to ensure that the R178 million added for the Early Childhood Development Grant (ECDG), to provide unemployment risk support to 70 000 early childhood development (ECD) workers impacted by the COVID-19 lockdown, had been used for the intended purpose. He was happy that ECD would be migrating from the Department of Social Development (DSD) to the Department of Basic Education (DBE). He wanted to believe that this would bring a solution to the parity between the provinces. When one looked at the stipend that provinces got at the end of the month (especially when comparing Gauteng and the Free State), the Free State was getting very little. When one compared the Free State and the Eastern Cape, the Free State was getting very little. He hoped that by migrating to the DBE, the DBE would deal with that parity of the stipend the provinces were getting at the end of the month, so that provinces could be treated equally and earn equally. The provinces were doing the same job, and were reporting for the same hours. There were some changes whereby the NT had increased some money in the provinces via local governments. He wanted to remind the NT that it needed to revisit its distribution model, as it needed to be changed. It was outdated. It was important that the NT started thinking about upgrading the distribution model.
Mr Y Carrim (ANC, KZN) said that all understood how perilous the situation was and how badly strained the budget was. It was not just COVID-19, but the July unrest as well, which had caused approximately R37 billion in damage. Given COVID-19, and given the parlous state of health facilities South Africa, surely one should be very cautious about delaying more funds for health infrastructure and saying that it would be revised, and money allocated as the cash flow allowed? The maintenance of existing infrastructure was badly needed, as was new infrastructure and maintenance of health facilities. The NT had explained how the health grant would be restructured. Surely infrastructure was utterly crucial? If COVID-19 had shown SA anything, it was that its public sector hospitals were in a very bad state. These hospitals were likely to be challenged even more by the fourth surge of COVID-19, which was likely to emerge according to scientists and the Department of Health “in the next two weeks or so”.
In short, he knew that there was no money, but surely there were ways that the NT could reprioritise? One of the things he had raised before with the Department of International Relations and Co-operation (DIRCO) was whether South Africa needed so many missions abroad? Did SA need so many staff there? It was not a priority at the moment. SA’s trade and investment links were crucial, especially now with COVID-19, but beyond that, did government need staff? Over the years, he and others had gone on many study tours over the years. Those on study tours had gone to the embassies and high commissions, and had seen for themselves the “deluge” of staff in some of these institutions, and it was not always clear what the staff were doing. DIRCO was an obvious example to look at.
Mr S Aucamp (DA, Northern Cape) said that there had been a lot of allocations to various departments. There were allocations in the aftermath of the riots in KZN, and there were allocations to the education departments and to the Department of Health (DoH). What had been put in front of the NT to make sure that money allocated for certain projects and certain purposes would be spent for those purposes? “We have seen too many times in the past that money has been allocated for something, but then it is spent on something else.” It must be ensured that money was spent for the reasons it was given for. Had plans been put in front of the NT to make sure that that would happen?
He said his province, the Northern Cape, had gone through a prolonged drought. Recently, it had enormous veld fires. In the past, the province had asked on numerous occasions for additional funding for the Department of Agriculture, Land Reform and Rural Development in order to assist the farmers that were really struggling there. He did not see anything in the allocations, but he might have been mistaken. What would be done to alleviate the problems that the Northern Cape farmers had, and in that way to secure the Northern Cape’s food sources?
The integrated urban development grant made provision for the purchasing of vehicles. There were also other grants that would help to build roads, for example. What funding was available for the continuous maintenance of vehicles, water infrastructure, and roads being built? What was in place to make sure that maintenance of whatever was built or purchased was being done properly? There were lots of municipalities who misused the money that had been appropriated to them. “We know for a fact that there are municipalities who use the MIG grants that they get to pay, for instance, their electricity bills.” Were there any municipalities who had received MIG grants and misallocated or misused those funds? Were these municipalities being penalised by getting fewer MIG grants for those purposes, due to the fact that they had misappropriated those funds?
Mr D Ryder (DA, Gauteng) said there was a massive storm in Gauteng, and the electricity was off. As a result, he had also missed some of the presentation. He said that there were some “fairly alarming” moves announced that day. Mr Carrim and Mr Du Toit had spoken partly to what he was getting at. Specifically, the move of the mental health and oncology grant away from provinces to the NT, and to the DoH, and its application into the National Health Insurance (NHI) system, was “massively concerning”. It had been seen that the NHI pilot projects had indicated that the NHI would take a lot more work and funding than was initially anticipated. It might not have been the “quick win” that certain people were hoping it would be when they started with it. If Government sat with the centralisation of the mental health budget in an NHI Fund, was it going to find itself once again in a situation where there was insufficient money to be spent in the provinces on mental health patients? Would it sit with another Life Esidimeni situation or something similar to that? They could not risk another one of those as a country. To have people most in need of Government assistance dying at the hands of bad policy roll-outs – SA could not afford that again.
The same applied to the oncology unit. The Committee had seen with the problems at Charlotte Maxeke Hospital, with the fire that was experienced, that the backlogs in dealing with oncology in Gauteng had become extreme. These were two very important parts of the provincial health system, and if Government was “messing with them” without having a very clear plan, it was putting lives at risk. If it was an NT decision that was not being done in conjunction with the provinces and with the DoH, and with the inputs of the provincial health and finance departments, there would be serious trouble -- the NT would end up having to answer questions that were really uncomfortable if a policy decision had been taken that ended up costing lives.
He asked about taking money away from road repairs and putting it into office jobs. The person who thought of that scheme sat in an office in Pretoria, and had not driven around SA. He was sure the Chairperson and other Members in the meeting had driven around SA over the last couple of months, and would have seen that the provincial roads were in a “shocking state of disrepair”. If the NT was moving money away from road repair, and putting it into a computer system, then the computer system may have been worthwhile and valid, but “we need to seriously look at our priorities”. SA’s infrastructure was in a sorry state, if one looked at the state of the roads. That had a direct impact on the economy, and particularly tourism. As one is driving through the Free State while going to (or driving past) a wildlife reserve there, one has to drive slowly because of potholes on the provincial roads. The same applied in provinces across the country, where provincial roads were in a sorry state. Moving funds from road repair and infrastructure maintenance was a “very dangerous” thing to do.
He agreed with the point that that the District Development Model (DDM) had been abject failure, and that throwing more money into that was problematic -- in his view, and in the view of other Members. He thought that the NT needed to motivate where that was coming from. The Department of Cooperative Governance and Traditional Affairs (COGTA) had a lot to answer for on the failure of local government. With the recent local government election results, the turnout figure could be laid squarely at the feet of COGTA, because it had allowed local government to deteriorate to a stage where SA’s communities no longer trusted local government. That fell directly under COGTA. The upskilling of SA’s councillors lay with COGTA. People had tried to deflect that matter when he pointed it out previously in the House, but the reality was that the Minister was ultimately accountable. One could not say that the councils were primarily responsible, as the Deputy President had said in the House. The Minister was accountable -- that was why she earned the “big bucks” that she did. Taking money away from the municipalities and putting it into the DDM was problematic. The Committee still had not seen how that was going to be rolled out properly. If money was being thrown into a project that had been piloted at a desperate time like this, and not successfully, then he was very worried. The messages that the NT was sending out through this adjustment appropriation were very concerning.
Every year, “fiscal dumping” took place in the last three or four months, where housing budgets were shifted away from underperforming provinces and given to provinces that were performing. Had pre-emptive moves been taken, or would there still be fiscal dumping and a few last-minute gazettes towards the end of the year, because people had not met their targets? Had Government started to look already at who was not meeting their targets, and who were not spending their allocations for this adjustment appropriation?
Mr F Rogers (DA, KZN Legislature) said that he had a question related to his province. If he looked at the additional allocations to provinces to deal with the wage agreement, KZN’s mid-term reflected that it was looking at a R5 billion over-expenditure on that wage agreement. If he understood correctly, in terms of the NT’s new allocation, it would get only R4.4 billion. Overall, KZN’s mid-term budget was sitting at a R7 billion projected over-expenditure, so it created headaches for those in KZN.
Mr E Njadu (ANC, Western Cape) commented on the MIG, specifically the changes that would be made in terms of the DDM. He welcomed that, and believed that infrastructure was the key to service delivery. One would want to see something on that matter in the circular that would be coming out. He asked about the R841 million that was added to Direct Neighbourhood Development Partnership. He believed that that was a key programme in crime prevention. Did the sector department submit a plan to ensure that that R841 million, out of which jobs had to be created, would be used for the intended purpose?
The Chairperson said that she was covered by other Members’ questions on most of the issues that she wanted to raise. She wanted to emphasise the issue of plans. What informed the amounts that were allocated to sector departments – had these departments presented their expenditure plans to the NT? The NT and the provinces would then be able to monitor the expenditure to ensure the money that was allocated was spent on the planned projects. This would also ensure that government would not see what was seen during COVID-19, where money was misdirected.
She asked about the conversation on municipal infrastructure, specifically the MIG. There had always been a problem in the MIG, where the MIG was being misdirected by the municipalities to the extent where the MIG was used to pay salaries. It was related to what Mr Ryder had raised on fiscal dumping. There were instances where some had spent the money for the sake of dumping. The Committee had the responsibility to appropriate money to the municipalities and the provinces, but it also had a responsibility to follow up on the funds that had been allocated to the provinces and municipalities. What had been seen during the campaigns was something like a stadium that was supposed to be built, but which was not built, and was something that was very embarrassing and insulting to the community. It could not be tolerated. The Committee was appealing to the NT to also monitor expenditure. There should be value for money, and not money just being dumped or people spending money for the sake of it because it was there. Consequence management needed to be practiced. The Committee would not allow itself to be “lashed” by the public for not doing its responsibility, and was just agreeing on giving money to people who were irresponsible. She wanted to caution the NT, the sector departments and local government, that those giving money should also talk to the implementers, and also ensure that the officials in the different spheres of government had the capacity to spend that money as expected.
National Treasury's Response
Ms Ngqaleni said in response that the biggest portion of issues raised was on plans, particularly regarding the public expenditure programme. Questions included what the NT was putting into the Neighbourhood Development Programme, which was allocated R841 million. She wanted to assure Members that in that programme, there had been an elaborate process of evaluating proposals and plans. There was a very elaborate monitoring system that was run by the programme management unit in the Presidency. That offered some assurance that there were plans, a monitoring system and a team dedicated to ensuring that money was spent for the purposes for which it was allocated. The programme management unit could form part of informing Members of the outcomes of the monitoring system.
On funding the DDM, it was not about taking over and consolidating the municipalities. It was about driving coordination and alignment (which COGTA was driving), and ensuring that within those spaces, there was capacity to enable planning, coordination and alignment across spheres of governance. It was meant to ensure that there were systems in place that would enable delivery into those spaces in a more integrated way. The DDM did not have to do with consolidating municipalities, or with centralising municipalities.
She said that perhaps the NT had not communicated on health allocations properly. She thought that there was a good story, because the NT was shifting money from indirect NHI to the direct NHI grant. The mental health and oncology components would be shifted to the direct National Health
Insurance grant. That would enable provinces to directly procure those oncology services and mental health services. It was a good story that acknowledged that provinces were doing better when compared to what the national sphere was able to do. There was quite a lot of conversion of grants, specifically indirect grants, to support the provinces.
Ms Wendy Fanoe, Chief Director: Intergovernmental Policy and Planning, NT, asked Mr Daka to assist with the provincial questions, and Mr Pakkies to assist with the local government questions. Ms Ulrike Britton, Chief Director: Urban Development Infrastructure, NT, would assist with transport-related questions. She would then deal with any questions that “fell through the cracks”.
Ms Britton responded on the Provincial Roads Maintenance Grant. The shift was to get a central database that would allow provinces to make better decisions in their road asset management systems -- for example, how provinces collect that information, and where that information goes then allows the NT to evaluate whether provinces are spending money efficiently, how they are prioritising which roads are being upgraded, and which roads are being maintained in a way that would allow the NT to spend the money to “get a better bang for our buck.” Currently, the NT was seeing major inefficiencies within the system. By moving R65 million over three years in a R10 billion a year grant, which was a relatively small amount of money, the NT was hoping that the efficiencies it got out of that would multiply the outcomes it would derive.
Mr Daka said there was a question on the R243 million that was reprioritised for medical interns, and whether it was for medical interns from Cuba. That money was for all the medical interns who were qualifying. Some were from Cuba, and some were from SA. As soon as medical students finished with their studies and needed to do an internship as part of their training, then they were admitted into that programme.
The ECD funding would be used for the workers who were already in the system, and that had already been identified. That money would be used to supplement their income.
Referring to delays in the funding of the healthcare facilities, he said the two amounts of R150 million for a Limpopo academic hospital and R10 million for a hospital in the Western Cape, were allocated specifically for those projects. The funding that was approved through the budget facility for infrastructure was for a specific project. If, for example, the Limpopo academic hospital was not able to spend this year, given that the cost was still the same, that funding would be added over the lifetime of that project, based on the time period that was approved for that project, so the money was not lost. It was the project sponsors that requested that the NT reduced that funding, because the funders said that they would not be able to use the funding in the current financial year.
On the shifting of money for oncology and mental health services from provinces to national, he said the money was going the other way around. There was funding that was an indirect grant. That funding that was an indirect grant of R167 million was moving from the indirect NHI grant, and the NT was giving that money to provinces so that they could procure directly. Even over the medium-term expenditure framework (MTEF), the NT was saying that funding was available in the indirect NHI grant, and also in the HIV/TB grant. Those two funds (HIV/TB and oncology and mental health) were being put together into the direct NHI grant, where provinces would be able to procure directly for oncology and mental health.
R3 billion was added to the funding for the KZN wage bill. That was in line with the head-count. In determining the allocation of R14.7 billion to the provinces, the NT had calculated that amount based on the head-count and looking at the number of people at each salary level.
Mr Pakkies said that Mr Du Toit had asked about IUDG, and whether the JB Marks municipality was part of the grant. The answer was “no.” The grant was by application, and there were pre-qualifying criteria that Mr Pakkies thought JB Marks would struggle with, because the grant had a lot of qualifying criteria on governance issues. The governance issues must be in order -- there must not be qualified audit reports, and there must be stability with the personnel, especially at a higher level.
On the misuse of the MIG, he said there were some municipalities who tried to circumvent the rules that had been set for the grants. Such municipalities would use the MIG, at the very worst, for paying salaries. There was a mechanism that the NT had for recouping the funds through the equitable share. Members had asked if municipalities were penalised in the following year for that. Because the MIG was a formula-based allocation, there were no penalties, because the NT just ran a formula. However, for municipalities that had perpetual problems regarding mismanagement, there were other avenues to bring the districts into delivery, to ensure that the citizens were not impacted. The Chairperson had touched on the inefficiencies within the MIG, and had used the example of a stadium that was built for a considerable amount. The MIG was one of the most elaborate frameworks in terms of the responsibilities that were bestowed on the sector departments and the roles that they needed to be playing. Not all sector departments played their role. That was why one would find that the quality of the stadium that was built, for instance, would not be at the level that was expected because the municipalities would then need to be advised by the sector departments. The sector departments would have the specifications on how much it would cost to build that kind of facility. Without that, one would find that there was variation across municipalities regarding the costs involved.
Mr Jan Hattingh, Chief Director: Local Government Budget Monitoring and Analysis, NT, said the Conditional Grant Frameworks (CGFs) that Parliament approved as part of the Division of Revenue Bill was facilitating the framework within which municipalities were allowed to spend the grant for its intended purpose. As part of its monitoring and oversight responsibility, the NT had ways it could detect whether municipalities used the money for the intended purpose or not. Some of those measures were that the DoRA allocation had to be transparently reflected in the municipal budget. It must be in the monthly reports the municipalities submit to the NT and to Council. He was referring to section 71 of the Municipal Finance Management Act (MFMA). The municipalities needed to disclose that in their annual financial statements. This was where the NT considered municipalities' performance. For instance, when municipalities asked for a rollover, that was where the NT could see and detect if there was sufficient cash in the bank to support that request. As part of a disclosure in the financial statements, the NT could see if the money was used for the intended purpose. The moment the NT detected that a municipality abused the grant (it did not matter what type of grant), such as if it was used for salary purposes, then the NT recalled the full amount. The NT had done that, and it was part of its institutional arrangements. The NT also advised municipalities in the annual budget circular of the criteria that would be applicable for the NT to consider rollovers, or any other matters.
The Division of Revenue (DoR) Act allowed the NT to stop and reallocate money. It had institutionalised that practice so that in the local government system, the NT did not lose the money back to the National Revenue Fund. The Act also allowed the NT to try and keep the resources in a province, because one did not want to penalise the communities for mismanagement when it came to the bureaucrats or officials. That was a very transparent and consultative process, which the NT oversaw in consultation with the sector departments that administered the grants, such as the MIG, in that case COGTA. The NT did that in consultation with the provincial treasuries and the sector departments. Everything was based on performance, and if the NT did get a request where it could not see that there was cash to support the request, and the municipality conformed to the requirements as per the legislation, then it used that process to evaluate the request. The intention was to fast track performance, and to make sure that it allowed those municipalities that were in a more advanced position from a planning perspective, to use the money productively. If the NT did detect that there were bad practices, then it used the tools at its disposal to bring those municipalities to book. It was in the form of correspondence, and if the NT did not get a reaction then it tried to facilitate consequence management in the sense of bringing it to the attention of the accountable authorities. In that case, it would be the council of the municipality and that the NT interacted with.
Ms Britton responded to the question on the rollover for the Vaal River intervention. The rollover had two components. Firstly, the Department had cancelled the contracts with one of the service providers, and those contracts had to be ceded to the Department. To do that, it needed a deviation approval from the Chief Procurement Officer. There were delays in all of that. The funds were committed, but could not be spent because the contracts were ceded late, after the end of the financial year. The second component was related to invoices that the Department had received and was not able to verify and pay before the end of the financial year. That took some time, where service providers had done work and departments needed to first verify that the work had been done to the standard set within the contract before payment was made. The Department was not able to complete all of that work before the end of the financial year, which then resulted in the funds being rolled over to the next year.
Ms Fanoe responded on the issue of maintenance. The focus was on asset management, rather than maintenance, because if one did not know what one’s assets were, then one would not know what to maintain. What the NT had done in the CGF, and focusing on the MIG as well, was focusing on improving asset management practices. The focus and reforms were in the latter. The NT was also putting in place incentives to focus on asset management and getting that in place.
Drought was a “thorny” issue, and the NT had had that discussion a number of times in the Committee, and it had explained how the process worked. Drought must be declared as a municipal, provincial, or national disaster. The applications must go through the Provincial Disaster Management Centre to the National Disaster Management Centre, to reach the NT. Only then could it consider those requests. If those requests did not come through, then there was nothing to consider. Unfortunately, regarding the request from the Northern Cape, the NT had not received anything from the National Disaster Management Centre.
Regarding fiscal dumping on the housing issue, she acknowledged the late gazettes, and said the NT would try to do those things earlier, so that it was not done as late as in the past.
Ms Ngqaleni said that the only question that was difficult to answer was the broader question on the capacity of the state. That was a much bigger issue, and did not depend only on the Treasury. Each department was structured in such a way that they needed to be able to put in the right people. When departments chose not to put in the right people, it made things quite difficult for everyone. The NT was concerned about value for money and spending. Hence, it tried all kinds of initiatives to push in that direction. That remained a challenge.
The Chairperson said the NT must note that matter as a concern. It was not the first time that the Committee had raised that matter of people who were supposed to do work, but did not have the capacity to do it. Hence the Committee found that there was a mismanagement of funds. Treasury should to take into consideration the capacity of the relevant people, and to look if it could use that as a condition for it to allocate money. She suggested finding a way to communicate with those institutions to which it was allocating money. The NT could not just blindly give money to people that it knew would not be able to manage it. The NT might not be in a position to know to what extent, but the institutions needed to know that the NT was also concerned, and that Parliament was concerned.
Mr Njadu said that the last point was very important, specifically on the mismanagement, overspending and underspending. The Committee could not have a situation where it always had reports on mismanagement, overspending and underspending. All of that came from poor planning and capacity. He wanted to support the Chairperson, that when grants were being allocated, the municipalities and the departments must add in their proposals or plans their capacity for implementation, so that money being allocated was allocated where the NT already knew whether the department or municipality had the capacity to spend that money. In many instances, there were huge amounts of money that were being returned due to a lack of capacity and poor planning. Going forward, it could not be business as usual. The plans must indicate an implementation plan and the capacity of that institution.
The Chairperson felt that Members were satisfied that the NT was taking the Committee’s concerns and views very seriously.
Mr T Makaringe (ANC, Mpumalanga Legislature) asked about the Presidential Youth Employment Intervention (PYEI), to check if there was a detailed plan on how this money would be spent to create employment, taking into account that SA had a high unemployment rate, particularly among those coming from a rural province. Regarding the R6 billion that was meant to hire education assistants and general school assistants at public ordinary schools and public special schools, he asked if it was for multiple years or just one financial year.
Dr Modise responded that the R6 billion was for one financial year. All the money that the NT had allocated for the PYEI was for one year. Detailed plans had been provided. When the NT did an assessment, it got budget bids of up to R30 billion. After the NT had assessed the capacity and the ability of the departments to implement, only R10.9 billion was proposed for allocation. The departments had to report monthly to the Project Management Office in the Presidency. The NT also had statistics on the monthly expenditure and jobs created. In the MTBPS, the NT had detailed the outcomes of the PYEI. She thought that it would be helpful for Members to have a look and to see where those employment opportunities had been created, and in which sectors.
[Mr Aucamp wrote in the chat box: Regarding the drought relief, as well as assisting farmers that lost grazing due to fires in the Northern Cape, I just wanted it on record that again, nothing was requested or done by the Provincial Government. There was a motion that I moved in the House which was unanimously agreed to where the Premier of the Northern Cape was requested to declare the fire affected areas as a disaster area. It is a shame that our farmers are side lined again. Thank you for putting it on record.]
National Treasury briefing on Adjustments Appropriation Bill [B20 - 2021]
Ms Nompumelelo Radebe, National Treasury, presented.
Role players in the budget process
Ms Radebe said that at the executive (technical) level, there was the Medium Term Expenditure Committee (MTEC), which comprised Directors-General of selected departments in the centre of government. Once departments submitted their MTEF submissions to the NT, it evaluated submissions, had consultation meetings with departments, and then sent a report with recommendations to the MTEC. The report was then escalated to the political level, which was the Minister’s Committee on the Budget (MINCOMBUD), the Cabinet and the extended Cabinet. Once the budget was tabled, it went through the parliamentary process (see page five of the presentation). Other stakeholders included the FFC, the provincial Budget Council and the local Budget Forum stakeholders.
The Money Bills Amendment Procedure and Related Matters Amendment Act, 2018, was a key piece of legislation in the parliamentary process, in relation to the Adjustments Appropriation Bill (see pages five to six of the presentation for the full details.) For example, the Money Bills Amendment Procedure and Related Matters Amendment Act, 2018 required that after the tabling of a national adjustments budget, an Adjustments Appropriation Bill must be tabled.
In short, Parliament votes first on the fiscal framework, then the Division of Revenue Bill and then the Appropriation Bill. Any amendment to the Appropriation Bill must be consistent with the adopted Fiscal Framework and Division of Revenue Bill, as passed by Parliament.
In practice, the fiscal framework was a total resource envelope for the government, providing for the vertical division of revenue distribution of resources across the three spheres of government. The Appropriation Bill was responsible for the distribution of resources across 41 national votes. Thus, any amendments to allocations for votes in the Appropriation Bill imply that additions to one vote must come from reductions to another vote.
Amendments to an Appropriation Bill
(See page eight of the presentation for the full details)
2021 Adjustments Appropriation Bill
• The Adjustments Appropriation Bill provides for increases or decreases to allocations set out in the main Appropriation Act, including shifts in the anticipated economic classification of this spending;
• Adjustments to allocations to provinces and municipalities are set out in the Division of Revenue Amendment Bill;
• The Adjusted Estimates of National Expenditure publication explains national changes in detail, together with in-year performance and expenditure information;
• Shifts of allocated expenditure and other adjustments are subject to the Public Finance Management Act (PFMA) and its regulations, as well as section 5 of the Appropriation Act, 2021;
• The adjustments budget serves both to effect necessary changes and to contribute to in-year oversight and management.
Structure of the 2021 Adjustments Appropriation Bill
• A vote purpose is set out for each vote;
• The Bill is divided by vote and by main division (programme) within a vote;
• Adjustments to allocations are stated in terms of current payments, transfers and subsidies, payments for capital assets and for financial assets;
• Further details of allocations are listed for some programmes;
• Headings group some of these listed items;
• Allocations marked with an (*) refer to specifically and exclusively appropriated amounts;
• Compensation of employees and conditional grants are specifically and exclusively appropriated.
Revisions to Non-Interest Spending For 2021/22
The net change to non-interest spending, when one compares what was tabled in the February budget with what was tabled in the recent adjustment budget, was that the NT was increasing non-interest spending by R59.4 billion. The total increase was R77 billion, but because some of the increases set off by drawdowns from the revenue fund and the contingency reserve, one would find that the net change was then R59.4 billion. The R59.4 billion increase was driven by the allocations that the NT had made to provinces and national departments for the wage increase that was signed earlier this year. The biggest portion of the increase went towards the Presidential Employment Programme Stimulus. There was also R32.9 billion allocated in the second special Appropriation Bill just before the NT tabled the adjustments budget as well.
2021/22 Total Fiscal Relief Package
This was a breakdown of the R32.9 billion that was allocated in the second special appropriation Bill.
R26.7 billion was allocated for the extension of the special COVID-19 relief of social distress grant until March 2022. Of that R26.7 billion, R500 million was for the administration of the grants. The other allocations were to deal with the cost implications of the riots and unrest SA had in July. These included the money that was allocated to small businesses to help them to repair some of the destruction to infrastructure as a result of the July unrest.
2021/22 Adjusted Expenditure Estimates
This was a summary of the adjustments that Ms Radebe would be discussing in the next few slides, and showed the net effect of the adjustments in terms of the budget. The NT was showing how much was going to departments, and how much was going to departments in the form of direct charges. It was breaking down the allocations to separate and show the two allocations. Ms Radebe would go through the details of some of the adjustments that were actually included in the Adjustments Appropriation Bill.
The following types of adjustments were provided for under section 32 of the PFMA. (See the presentation for the full details).
1. Significant and Unforeseeable Economic and Financial Events (R20.512 billion)
A total of about R20.5 billion was allocated. This was money allocated to provinces and national departments for the implementation of the 2021/22 wage bill. R14.9 billion went to provinces, and the rest was what the NT allocated to national departments. The bulk of that went to the police.
2. Unforeseeable and Unavoidable (U&U) Expenditure (R102.600 million)
U&U expenditure is expenditure that could not be anticipated at the time of the budget.
Treasury Regulation 6.6.1 specifies that the following may not be regarded as U&U:
spending that was known when the budget was being finalised but could not be accommodated in the allocations at the time;
spending increases due to tariff adjustments and price increases; and
spending to extend existing services or create new services that are not unforeseeable and unavoidable.
3. Expenditure Earmarked in the 2021 Budget Speech (R13.585 billion)
This showed the breakdown in allocations for the different departments. The total was just over R13 billion, because part of the allocation included R2.3 billion that would help with the purchasing of vaccines.
4. Roll-overs (R2.847 billion)
Unspent funds from the previous fiscal year which had been contracted for but not yet
spent may be requested to be rolled over into the current fiscal year. Treasury Regulation 6.4 restricts roll overs as follows:
compensation of employees funding may not be rolled over;
a maximum of 5 per cent of a department’s budget for goods and services may be rolled over;
funding for transfers and subsidies may not be rolled over for any purpose other thanwhat the funds were originally allocated for; and
unspent funds on payments for capital assets may be rolled over only to finalise projects or the acquisition of assets already in progress
5. Self-financing expenditure (R1.077 billion)
This spending was financed from revenue derived from a vote’s/department’s specific activities. This revenue is paid into the National Revenue Fund. If self-financing expenditure is approved, these funds are allocated to the vote/department in the adjustments budget. An example is the expenditure incurred by the Department of Home Affairs in issuing official documents, which is defrayed by revenue generated from issuing the documents
6. Declared unspent funds (R8.227 billion)
The following departments declared that they would not spend the full allocation for specific programmes that were allocated funding:
- National Treasury
- Public Enterprises
- Higher Education and Training
- Military Veterans
- Communications and Digital Technologies
- Trade, Industry and Competition
The biggest amount of unspent funds was from the Department of Transport (vote 40), which was due to delays in the implementation of the MyCiti phase 2A extension project in the City of Cape Town.
Ms Radebe added that the NT also monitored spending by departments on a monthly basis. When it did the adjustment budget, it also assessed, based on the departments’ spending trends, how much they would most likely underspend by the end of the financial year. The projected underspending for National Government was approximately R3.8 billion. That projected figure would not necessarily be realised, but it was instead based on the NT’s analysis of spending trends in the first six months.
7. Virements and shifts - Section 5 of the Appropriation Act, 2021
Ms Radebe said that the NT was often asked why departments were moving money between programmes, and who gave them approval for that. The NT wanted to show those virements or shifts that departments had implemented, but for which the NT or the Minister of Finance was not authorised to give departments the approval. Only Parliament could give departments approval for those specific virements.
Despite section 3 of this Act and section 43(4) of the Public Finance Management Act, the Minister may approve that unspent funds in an amount in the Schedule intended for –
a) compensation of employees, be used within the same vote for transfers and subsidies for the payment of severance or exit packages;
b) goods and services, be used within the same vote for compensation of employees;
c) transfers and subsidies to other institutions, be used elsewhere within the same main division;
d) payments for capital assets, be used elsewhere in any main division within the same vote;
e) payments for financial assets, be used elsewhere within the same main division.
The Minister may not approve the use of unspent funds in terms of subsection (1)(c), (d) or (e) for the compensation of employees.
The sum of the unspent funds in a main division of a vote approved for use in another main division of that vote in terms of (a) subsection (1); and (b) section 43(1) of the Public Finance Management Act, may not exceed eight per cent of the amount appropriated under that main division.
(Pages 24 to 36 of the presentation show those specific virements that only the legislature is authorised to approve).
Ms Radebe gave an example of how in the case of Basic Education, the Department was moving money from a conditional grant -- the school infrastructure backlogs grant operational budget, which was specifically and exclusively appropriated. Those types of virements could be approved only by the legislature.
8. Consolidated Government Expenditure by Function
The NT wanted to show that once money had been shifted across the different departments, then that was the net effect on the allocation for the 2021/22 financial year. It also wanted to show the impacts on the different government functions. After the virements and adjustments, the biggest share of the allocation was still going to the social wage. For example, learning and culture, where basic education and higher education were funded, continued to receive the bulk of the allocation, as well as health and social development.
Mr Du Toit referred to Vote 28 (police), where there was an additional allocation towards police for the additional expenses that were incurred as a result of the July 2021 unrest in KZN and Gauteng. Were there any funds in the pipeline that might be allocated in the new budget to fill up the shortfall that would be incurred with the movements of funds from the construction and upgrading of police stations to salary and wage overtime payments? Police stations were falling apart. He thought that this was something that must receive urgent attention.
Mr Njadu asked about roll-overs, specifically on unspent funds for capital projects and for completion. With the monitoring of the National Treasury, how specific was that in terms of the effectiveness of the monitoring of those projects? Last year, there was a municipality where money was returned to the NT, or given to another municipality. Something like R5 billion was not spent on that project, and the municipality could not complete it due to planning and capacity issues. How effectively could one manage that type of situatiuon, to make sure that municipalities or institutions were not reporting at the last point to say that they could not spend that money? He asked how one could be more hands-on with that type of exercise.
The Chairperson said that the presentation was clear, and that the NT had said a lot on the issue of virements, with which she had had problems. Different departments needed to understand which virements they were allowed to implement, and which ones needed the approval of the NT at a provincial or national level, or which ones needed the approval of the legislature. That difference was necessary, because in most cases people did as they wished. It was not just something that the NT and the Committee were concerned about -- it was also something that was in the PFMA, specifically that one was allowed to move only to a certain extent. That should be made clear, and provinces could also assist in making sure that they oversaw that departments sought permission from the NT or legislatures for the relevant amount before they could do the virement.
Referring to roll-overs she said one could roll-over funds only if there was a commitment. If there was no commitment, then the one did not just spend money, or if one had started the project but did not finish it. If it was a multi-year project, then that was understandable. She asked for clarity from Dr Modise and the team, who were more knowledgeable on the finances and legislation on finance. Her understanding was that roll-overs could be allowed only if there was a certain commitment that was justifiable.
Dr Modise said that the NT’s criteria for roll-overs were stringent, to avoid a situation where departments were applying for roll-overs because of inefficiencies and to avoid fiscal dumping. The considerations the NT made for roll-overs were that firstly, it looked at roll-overs for payments of capital assets -- if it was rolling over funds there to finance the projects, or asset acquisitions that were still in progress. It did not roll over money for capital assets on a normal basis. On transfers and subsidies, unspent funds may not be rolled over for a purpose other than what they were intended for. It also looked at current payments, where there was a maximum of 5% of the department’s payments for goods and services that the NT could roll over. As an example, those would be mainly for a department that had procured computers, and was busy finalising the invoices, and the NT could see that it had already made a commitment -- that was what would be rolled over. It did not really roll over money for recurring expenditure. It could not roll over money for compensation, or for paying of security at buildings. It did not normally provide rollovers for funds that were small relative to the budget, where it thought the department could reprioritise within the baseline. It also tried not to provide roll-overs for expenditure that was not ready for payment. If by the close of financial year, one was not ready for payment, then the NT would not consider a roll-over
On monitoring of the infrastructure projects, the NT did that through the in-year monitoring monthly from the departments. It also presented to the Standing Committee on Appropriations on a quarterly basis on the spending patterns of these departments.
The new funding proposals for the police was a very difficult topic because the spending pressures did not emanate only from the police. The recent budget reductions had impacted on the different budgets for departments. The NT ran a budget process throughout the year since June, and there had been a lot of budget requests from different departments. The NT proposed to MINCOMBUD and to Cabinet on some of the spending pressures that the NT thought should be considered for funding. As the Minister of Finance said in the MTPBS, the finalisation of those allocations would be presented at the time of the budget. The July unrest had showed that funding for the security cluster was critical. The NT was definitely looking into that.
Mr Hattingh responded to the Chairperson’s second question. The rules for national and provincial government were the same, and that was articulated in the PFMA. Although the NT had presented the national adjustment budget, the same process was applied to the provincial treasuries. The roll-over process for local government was regulated by the Municipal Finance Management Act (MFMA). Again, it was the same set of rules and the same set of practices. However, when it came to provinces and municipalities, there was a simple concept. The concept was: Did the cash leave the National Revenue Fund or did it remain with the National Revenue Fund? Even if the NT made a transfer to provinces or municipalities, it was subject to a similar process. The Chairperson was correct -- the Division of Revenue Act talked about a firm commitment prior to the end of the financial year. If a provincial department or a municipality conformed to that requirement as part of the process that the NT ran for provincial and local government roll-overs, the same principles applied.
Mr Carrim said that the Committee had raised the roll-over issue for many years. Some of those roll-overs were “hugely damaging” to SA’s infrastructure and service delivery needs. The Committee kept saying to the Treasury that it was also a reflection on the national sphere of government and Parliament, that people did not have the capacity at the provincial and local government levels. Perhaps personnel were not technically competent enough. Whatever it was, surely the NT should do far more to invest those provinces and municipalities with greater capacity? Parliament kept talking about moving senior officials, such as DGs, around. Mr Carrim said he had been in local government at the time, and officials had said that salaries would need to be made commensurate. There might have been a scenario where the government was moving a DG to a small rural municipality that might not be able to pay. What had happened to all of that? SA was one cooperative system of governance across three spheres. It was not a federal system, although the DA and others “liked to think that,” and were free to do so. SA was one cooperative governance system with three distinct, interrelated and interdependent spheres. What was the NT doing to ensure that roll-overs in crucial areas were reduced substantially by investing in capacity?
It was “a delight” for him to see that there was a new crop of people, most of whom were women. In the last two to three years, there was a flush of new faces, most of whom were women. It demythologised the gender and racial stereotypes about who was cut out to deal with that important sphere. He did not necessarily like the NT’s overall approach, and he had some difficulties with the overall policy, but as one listened to the NT today, one was struck by how technically competent this Department was. For a developing society, the NT’s system was sophisticated in how it allocated resources, how it allowed roll-overs, how it moved money from one programme to another, etc. He wished that with all that technical capacity, and all that sophisticated legislation, SA could implement even one-tenth of the potential that that legislation and capacity potentially provides.
Mr A Motswana (ANC, North West Legislature) said he wanted to add his voice on the issue of roll-overs. The issue of capacity was not that much of a larger problem. He believed that, until proven otherwise, there was capacity. There were people appointed in various sphere of government, such as senior managers and directors, and if one looked at the qualifications and level of experience of some of the people who served in government, it appeared that there was capacity. Of course, the Committee should continue to say that support must be given, and that capacity must be built. When these individuals were interviewed, one could hear that, and come to a conclusion; it would not be difficult to put before a council records that assured that those were capable people with the requisite skills, capacity and knowledge to do what was required in terms of legislation. For him, the problem was where people had the appetite to fill their pockets in whatever form it happened, whether it was corruption, maladministration, etc. For him, it was a question of people not wanting to do what was required by legislation. That was what propelled people to apply for roll-overs. The other reason that he thought exacerbated that matter was the lack of will to take corrective measures against offending officials.
The NT had for some time been found wanting, because in an attempt to regulate that particular process, the NT would come up with all kinds of unending legislation and regulations that would try to ensure that funds could not be mismanaged. The sphere of local government was highly regulated. It would take many years for people to understand, because there were new regulations being introduced “almost every day” at that particular level of governance. What was the NT doing to try to come with uniformity, in order to ensure that the system became simple? That would allow spending, and the spending would have to be done according to what had been submitted to meet the needs of a specific department or municipality.
Dr Modise said that some of the questions were outside of her capacity, because regulations and legislation would form part of the Office of the Accountant-General and the Office of the Chief Procurement Officer (OCPO).
She appreciated the compliments that the NT had received. It made it want to work even harder.
The NT would have to share with the Committee Secretariat the criteria for roll-overs, so that the Committee could see the stringent criteria that it had. The NT avoided a situation where it did budgeting using roll-over processes. Most of the time with roll-overs, one would find that the applications for roll-overs were close to R20 billion, and only R2 billion would be approved, precisely because of the stringent criteria that it used. Members could then have insight into what was rolled over and why.
The Chairperson said that it would be good if the NT shared that information with the Secretariat, and then the Secretariat would share with Members and the provinces.
The Chairperson said that the Secretary of Committee needed to make an announcement on what was expected of Members the following week during the process of the DoRA Bill.
Mr L Nodada, the Secretary of Committee, said that the following Wednesday, Members would be briefing the provinces on the DoRA Bill. Thereafter, the provinces would facilitate the issue of negotiating mandates, which the Committee would consider on Thursday. Final mandates would be considered on Friday.
The Chairperson said that Members were expected to go and seek a negotiated mandate, and report back on Thursday. She asked provinces to communicate with their chairpersons and the relevant authorities in terms of the provinces’ legislatures, specifically the Speaker, so that they had a sitting in time for the Committee to finalise the report on Friday. The final mandates and report would need to be done on Friday. This was a section 76 matter, so the Committee had a timeframe and could not “do as it wished.”
Mr Carrim moved to adopt the minutes of 16 November, and Mr Njadu seconded.
Mr Njadu moved to adopt the minutes of the 16 November evening meeting, and Mr Aucamp seconded.
Mr Carrim moved to adopt the minutes of 17 November, and Mr Du Toit seconded.
Mr Nodada said that the next meeting would be on Tuesday, where the Committee would be consulting with the South African Local Government Association (SALGA), and would also be having public hearings on the Division of Revenue Bill.
The Chairperson said that the Committee would be having back-to-back meetings from Tuesday until Friday. She was sure that Members were aware of the programme, and that this time of the year was “hectic” for the Select Committee on Appropriations. The Committee would be equal to the task, and she hoped that it would get the necessary co-operation from the provinces, so that the Committee was not left frustrated.
The meeting was adjourned.
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