ATC080523: Report Oversight visit to Limpopo

NCOP Finance

Report of the Select Committee on Finance on the oversight visit to Limpopo,   22 February 2008, dated 23 May 2008

 

1)                  Introduction

 

The Select Committee on Finance conducted an oversight visit to the province of Limpopo on Friday, 22 February 2008. The delegation was follows:

 

·                    Hon T S Ralane (Chairperson of the Committee)

·                    Hon D Botha (ANC MP)

 

Support staff:

·                    Ms T Xaso (Committee Secretary)

·                    Mr M Tau (Researcher)

·                    Ms N Tshoma (Committee Assistant)

 

2)         Background

 

From Tuesday, 22 January 2008 the Select Committee commenced with hearings wherein Provincial departments accounted for their expenditure of the 1st, 2nd and 3rd Quarter Conditional Grants, Capital Expenditure and Personnel & Non-personnel. It was evident from these hearings that the Committee needed to undertake a visit to the Province of Limpopo to follow up on matters that had been raised during the hearings. The Committee intended to meet with the following departments:

(a)                Roads and transport

(b)               Local Government and Housing

(c)                Agriculture

(d)               Health

(e)                Sports, Arts and Culture

(f)                 Water Affairs and Forestry

(g)                Provincial Treasury

 

The following National Departments and entities were invited to accompany the Committee on this visit:

(a)                Department of Housing

(b)               Department of Sports and Recreation, Arts and Culture

(c)                Department of Provincial and Local Government (DPLG)

(d)               Development Bank of South Africa (DBSA)

(e)                Department of Water Affairs and Forestry (DWAF)

 

3)         Terms of reference

·        The Committee wanted to follow up on a report by the Department of Agriculture that they were constructing roads in farm areas. Roads and Transport in the province had been invited so that they could respond to this matter;

·        The Department of Health had expressed concerns that it was under-funded;

·        The Committee also needed to interact further with the Department of Sports, Arts and Culture to discuss their under-spending in respect of the grant for libraries;

 

4)         Findings

 

Having discussed at length matters of concern with departments which were in attendance, the Committee made the following observations:

 

Provincial Departments of Agriculture and Roads and Transport

The Committee concluded that there was

• Generally no collaboration amongst departments in the province;
• no collaboration between the two departments;
• a lack of cooperation on the part of Roads Agency Limpopo (RAL) with regard to business plans and reporting back;
• evident non-participation by departments in IDP’s;
• high salaries paid by Road Agency Limpopo (RAL) when compared to Roads and Transport;
• staff component at RAL was 40 versus the department’s staff component of about 2000 despite the fact that RAL received 70% of the infrastructure budget. These issues had been raised by the Committee with the MEC for Roads and Transport, requesting the MEC to resolve issues of parity between the officials of the department and those of RAL; accountability and;
• gaps were identified in terms of district roads in areas that had no powers to build road (e.g. Greater Skhukune).

 

The following were the recommendations of the Committee:

·        The Departments of  Roads and Transport, Agriculture and the Provincial Department of Local Government and Housing were requested to convene an urgent meeting to look at the issue of infrastructure in the province, inclusive of district roads, in respect of areas relating to agriculture. Out of that meeting they should draft a proposal to the FFC, Provincial Treasury and the National Departments of Roads and Agriculture requesting more funding. IDP’s were  to be an integral part of that proposal;

·        Mr Tooley, was tasked to coordinate this meeting and report back to the Committee within three weeks.

 

   Department of Sports and Recreation, Arts and Culture

 

The Committee observed that there was:

• disagreement between the Provincial Department and the Provincial Treasury in terms of figures on expenditure; National Department was, however, in agreement with the Provincial Department;
• under-spending with respect to libraries and was of great concern;
• a concern that transferred figures did not necessarily translate to expenditure;

 

Whilst pointing out that reports at Treasury emanated from submissions by accounting officers, the Committee recommended the following:

• Provincial Treasury and the Provincial Department of Sports, Arts and Culture meet to resolve differences in reported figures;
• Report back to the Committee within two weeks after consideration of the report by Council;
• The Committee committed itself to monitor this closely;
• It was proposed that national projects should be done in consultation with the Provincial Treasury in order to provide a synergy and avoid disjuncture in reporting.  
• The Committee advised the Provincial Department to draft a report outlining how the adjustment budget of R16m was to be spent

 

National Department of Housing

 

The Provincial Department of Local Government failed to make input at the Committee’s proceedings due to their late arrival, after the meeting adjourned.

 

The Committee observed that provinces were still not capacitating municipalities to become housing developers. Provincial Treasury informed the Committee of challenges they experienced when meeting with the Provincial Department of Local Government and Housing, thereby requesting the intervention of the Committee.

 

The Committee reiterated to the meeting that housing was a provincial competence and that the provincial department had the responsibility to capacitate municipalities and avoid dumping money on them. It was noted that a major challenge was that of planning.

 

In the absence of the Provincial Department of Housing the Committee permitted the National Department to leave stating that discussions on housing would be taken further at hearings on the Division of Revenue Bill which were scheduled to follow shortly.

 

Development Bank of Southern Africa (DBSA)

 

The Committee was still waiting for a report from the DBSA and DPLG on what was being done to assist municipalities in need of assistance. The observation of the Committee was that assistance given to municipalities was in the context of Siyenza Manje, which did not speak to other programmes, which were also under the DBSA.  The Committee resolved that this would be taken

 

Provincial Department of Health

 

While the department acknowledged that some of its challenges related amongst other things to issues of high procurement costs and abuse of the departments vehicles, it stressed that its biggest problem was the fact that it was extremely under funded. The department also expressed its difficulty in adhering to the PFMA given its circumstances within the province. At a recent hearing before the Select Committee on Finance the province had raised a concern at a baseline allocation of 24.1%. Furthermore the Committee was also informed that due to the gross under funding, the department would carry over into the new financial year debts of the last two months of the previous year. Some of the reasons given by the provincial department for over expenditure included costs for the transporting of bio-hazardous waste; importing of vaccines; warehousing of medicines and distribution thereof; personnel and other expenses, which include Occupation Specific Dispensation (OSD’s). The Committee resolved to verify the matter of OSD’s with the National Department of Health.

 

Having heard the report of the Department, the Committee made the following observations with respect to the Department of Health in Limpopo:

·               For the Provincial Growth and Development Strategy of any province to work, it requires healthy people to partake in it;

·               Expenditure for OSD’s was very high;

·               There was a need to align provincial priorities with national priorities

·               The baseline had risen to 25.9%.

 

Recommendations

The Committee recommends that:

·               the MEC’s for Treasury and for Health meet and discuss funds available through OSD’s.

·               HOD’s of these two departments also meet to discuss matters at an official level;

·               the National Department of Health conduct an audit to determine the rate at which professionals are leaving the province and come up with strategies for staff retention;

·               Portfolio Committees in the provincial legislatures should be part of interactions with provincial departments. 

 

Report to be considered