Social Development Provincial spending 3rd Quarter 2006/7

NCOP Finance

13 February 2008
Chairperson: Mr T Ralane (ANC, Free State)
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Meeting Summary

The Select Committee on Finance held hearings at which the Provincial Departments of Social Development gave reports on their capital expenditure and conditional grants. Their presentations spending on spending priorities on the departmental programmes of Administration and Management, Social Welfare Services and Development and Research. These three programmes encapsulated the core mandate of the Department of Social Services both Nationally and Provincially.

The Provinces raised various challenges. These related to lack of infrastructural funding, senior staff turn over, lack of policy guidance from the National Department, under-spending by municipalities and generally limited budgets. The Committee expressed concerns on the issues raised by provinces and committed to provide support or guidance so that Provinces could fulfill their mandate of alleviating poverty amongst the poor. The Committee would facilitate engagement with various departmental or government stakeholders who were critical in the delivery of services to the communities. In addition, the National Department should develop policy directives on how to spend certain aspects of the budget. The Committee also expressed serious concern at the under expenditure trend by provinces, noting that it demonstrated lack of capacity and the ability of provinces to retain senior staff. 

Meeting report

Provincial Departments of Social Development Briefings on 3rd quarter spending:
Western Cape Provincial Department Briefing

The Chairperson of the Committee explained the purpose of the public hearings and the oversight role of the Committee over government expenditure.

Ms Kholeka Mqulwana, Western Cape MEC for Social Development indicated that the Department was on track in terms of its expenditure but there were major problems in the province that related to under expenditure at municipal level. The provinces transferred funds to municipality for spending in social services and development and research, but the municipalities did not spend the funding and in some instances the province had had to re-allocate the funding to other municipalities with capacity to spend the funds. Currently the Social Development Department had R3 million under expenditure due to funds unspent by municipalities, and due to the fact that a number of Early Childhood Development (ECD) centres did not quality to receive funding from government because they had not met the criteria set by the National Department. The provincial department had established a strong partnership with the Department of Education, which provided training to Early Childhood Development teachers in various communities, so that children were ready to join the mainstream education at age seven.

Discussions
Mr E Sogoni (ANC, Gauteng) clarified to the MEC that a transfer of funds to provinces did not equate to expenditure and the province was to develop mechanisms to monitor expenditure by municipalities. It was not sufficient merely to accuse municipalities of under expenditure.

The MEC indicated that the province had no control over how Municipalities spent their income and had no monitoring mechanisms to enforce appropriate spending. She also clarified that much spending at municipal level was also driven by political decisions, and that again the province had little influence over such decisions. She admitted to the weakness of controls and monitoring and committed her department to explore mechanism to mitigate against the problem.

Mr Sogoni enquired whether the province was feeding children at ECD centres.

The MEC said that the province was not feeding due to limited funding, but they provided infrastructure for ECD centres if these centers were perceived to be meeting the criteria. In her response she expressed concerns about the children of farm workers, noting that the department as unable to penetrate to the farms and conduct stimulation programmes, because the farms were privately owned and often farm owners were not keen to partner with government in various programmes. However, there were interventions that ere undertaken by Non Government Organisations (NGOs) at a minimal rate with limited impact.

Finally she noted that the department had inherited one country but two nations and it was a complex exercise to address and undo the imbalances of the past without experiencing loopholes.

North West Provincial Department briefing
Ms Nikiwe Nkwe, North West MEC for Social Development, indicated that the province was seriously struggling to fulfill its mandate due to various challenges. These ranged from poaching of staff by the National Department, through lack of infrastructure budget, poor planning in the department, to the fact that there was limited knowledge at local government level of its social development role. The latter stemmed from the fact that most of the integrated development planning (IDP) strategies were not responsive to the needs of the people, and hence there was no particular attention paid to social development spending or issues. At a demand level, the institutions that were central in driving social development were resisting transformation, and communities were not yet mobilized in terms of initiating racially diverse community-based organisations to provide social service or act as a delivery arm of government. The province provided food for ECD centres and currently was spending R9 per child, which as less than the national threshold of R12. However, this amount had increased by comparison with 2006.

Discussion
The Chairperson sought clarification on the implications of demarcation for the province.

The MEC responded that the demarcation posed a serious challenge, because all the well-serviced towns or regions had been moved to Gauteng Province, while North West had inherited the under serviced towns or regions. Some communities were multi ethnic (including those from Zimbabwe, Lesotho, Mozambique, and Botswana) and had a big population of non-South Africans seeking social services. Because of the demand, the province provided the services. In a nutshell, there had been a smooth transition and service delivery had immensely improved.

The Chairperson sought clarification on the mitigating strategy for the province to curb senior staff turnover to other provinces or the National Department. He also suggested that the department should explore incentive schemes to retain skilled staff members, and they could learn from the Department of Health.

Ms A Mchunu (IFP, Kwazulu Natal) observed that the province had a good social service programme, as shown by their report, but sought more information on the nature of support provided by the department to the social workers to ensure sustainability of the programme.

Mr Sogoni commented that the National Department should explore mechanisms to better compensate social workers, to reduce the exodus of personnel out of the department.

The MEC said that the National Department of Social Development should advocate for conditional grants for social development departments in provinces, because the National Department had more clout to justify additional funding. The National Department, in partnership with the Department of Education, should interrogate the expenditure on ECD by the province because there were serious loopholes.

The Chairperson commented that provinces had created serious problems for themselves because every department had a development fund which was equivalent to a conditional grant and yet the funding was not spent on the core mandate of the department. He also indicated that he would have liked to hear the effects of HIV/AIDS on the delivery of social services by the departments.

Kwazulu Natal Provincial Department Briefing
Dr
Mqadi, Head Of Provincial Department, tendered an apology on behalf of the MEC for Social Development who was unable to attend due to other commitments. He stated that the report would be brief because the department had not undertaken any serious programmes on the core mandate, due to a court case against the department that had been dragging on for almost three years. The legal challenge arose from alleged tender irregularities in the department. One of the service providers who was not awarded the tender challenged the tender board decision. Dr Mqadi indicated that the department as building a place of safety in Nkandla and Msinga. The department did not receive a conditional grant but received an equitable share of funding. The most serious challenges were the lack of infrastructure in rural areas and the fact there was no departmental visibility in rural areas, staff turnover, the poor functioning of the ECDs in the rural areas and the fact that, due to limited infrastructure. NGOs could not operate optimally.  

Discussion
The Chairperson raised a serious concern on how provinces ensured that there was equity in the provision of service delivery between the rural and urban areas. Other earlier presentations also attested to the rural urban divide. He invited the National Department to look at this matter because people were being attracted to the cities even though there were limited resources.

Ms Mchunu enquired whether the province had any mechanism to reduce the load of social workers needed for HIV/AIDS by creating a central service centre for the social services, which might include teachers, social workers and other public services provided by government.

Mr Sogoni commented that the rural / urban lack of equilibrium would suggest that an urgent workshop should be conducted by the Financial and Fiscal Commission (FFC), dealing constitutionally mandated issues, so that provinces did not defer their responsibility. If they were avoiding their responsibility, then the citizens would be likely to take the government to court for non delivery of essential services. He also indicated that there was a serious under expenditure in the province, and the department should present to the Committee some mechanism of ensuring that they would build internal capacity and improve service delivery. 

The Chairperson suggested that KwaZulu Natal should undertake an audit of social development services in rural areas so as to ensure that the needs of the people were elevated to the higher levels.

Free State Provincial Department briefing
Mr Thabang Makwetla, tendered an apology on behalf of the MEC. It was indicated that the province did not transfer funds to municipalities. Instead, it would implement its programme priorities through the Department of Public Works, particularly those that were related to capital expenditure or infrastructure development. It was further indicated that the major hurdle in terms of expenditure was that there was no clear policy guideline regarding programme 3 – dealing with Development and Research – and this was the reason for the under expenditure. Lastly, the province was facing exactly the same types of challenges as other provinces.

The Chairperson proposed to the Committee that as part of provincial visits, the Committee should engage with various stakeholders that were critical to service delivery, in particular poverty alleviation.

The meeting was adjourned.

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