Fourth Quarter Expenditure Report: consideration

Budget Committee on Appropriation

17 June 2008
Chairperson: Ms L Mabe (ANC) and Mr B Khaliphi (ANC, Mpumalanga)
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Meeting Summary

The Committee continued its consideration on its second Draft of its Report on Fourth Quarter National Expenditure. The Committee was satisfied that its proposed recommendations were reflected in the current draft.

The Committee raised serious concerns with the perennial pattern of under-spending by government departments, and agreed to adopt a much firmer and pro-active approach in curbing the cavalier spending behaviour of certain government departments.

Meeting report

Draft Committee Report on Fourth Quarter Expenditure
The Committee continued its consideration of the Report and effected various technical and grammatical amendments. Additional recommendations were made by the Committee and included in the Draft report. It was further suggested that Members scrutinize the report further.

Ms J Fubbs (ANC) stated that the report needed further clarity on its actual thrust, which was to define the critical issue of the report in one sentence. She understood there to be three core issues emphasises in the report, namely the lack of accountability and service delivery, chronic under-expenditure of the budget and the planning and expenditure in large capital projects.

Mr M Swart (DA) suggested that the focus of the report be placed on the Committee’s role in checking on expenditure of departments against the allocated budgets, so as to guard against under-expenditure.

Ms Fubbs added that the report should highlight the impacts of under-spending. Secondly, even though the virements and shifts were relatively small, there were undeniable significant negative impacts on service delivery.

Ms L Mabe (ANC) pointed out that reports on previous quarters reflected the same problems that were included in this report on the Fourth Quarter, namely the problem of spending on staff vacancies.

Dr D Gumede (ANC) recognized that there are some improvements in some areas; however, there must be comparison in projects within all the spheres of government. Therefore the focus should not be on the negative, the positive aspects should be acknowledged as well.

Mr B Mkhalipi (ANC) urged that everything, especially the figures, should be dissected as often reports are given in percentages and not Rands and that the under-spending amount is in actual fact substantial (in millions).

Mr Swart emphatically highlighted the lack of proper planning in departments when the budgets are compiled; they make no provisions should there be changes in the department.

Ms Mabe pointed out that departments often complain that the National Treasury is too strict in allocating funds, so how could it then be asked to be more stringent.

Dr Gumede raised concerns with the process in which departments prove their eligibility for additional funds, and the delays caused to service delivery.

Ms R Mashigo (ANC) suggested that the eligibility for more funds be based on existing criteria.

Ms Fubbs added that instead of departments simple motivating their requests, there ought to be stringent enquiries and monitoring of their expenditure. This would solve the service delivery issue.

Mr Swart stated that departments must motivate their ability to fill staff vacancies.

Ms Mabe sought clarity from the Committee as to whether the central issue was in fact poverty elevation.

Ms Fubbs raised the concern that the allocation of conditional grants was eight to nine months behind schedule, and that that departments blamed that delay for their staff vacancies.

Ms Mabe noted that the Department of Social Development would be receiving a budget boost, but that funds would be going to an entity which did not currently function under any monitoring mechanisms.
Ms Fubbs highlighted the lack of accountability of public entities, and the need to identify the specific challenges they faced. She emphasised that the Committee did not only have powers of review, but also oversight.

Secondly, she expressed concern that a huge amount of money was not spent by a specific government department, yet the Committee failed to comment. There was indeed a need for accountability for action to be taken, particularly in the Department of Transport.

Ms Mabe was alarmed that the expenditure figures displayed a continuous trend of under-expenditure, year-after-year, with the extent increasing each year.

Ms Fubbs was troubled by the fact that the Committee was not doing enough to hold departments accountable for their expenditure patterns. She was of the view that this made the Committee tantamount to an enabler of their poor behaviour. This would only stop once the Committee took stringent action and called them to account, especially the Department of Transport .
Ms Mabe highlighted that a meeting had already been called for at which certain departments, including the Department of Transport, would have to provide clarity, yet they had failed to do so. The Committee therefore needed to take a firm stance.

The Committee Secretary testified that the Department of Transport Report was not clear, yet it has failed to date to present a more detailed hardcopy, as requested.

Mr Swart urged the Committee adopt a firmer stance against the cavalier behaviour and under-spending of departments.

Ms Mabe said that the Committee should place more emphasis on the monitoring of departments.

The report would be considered further.
The meeting was adjourned.


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