The Select Committee on Finance today received a briefing from the National Treasury and the Mpumalanga provincial treasury on the preliminary outcomes of 2017/18 provincial expenditures, as at 31 May 2018.
The committee noted with concern the overall fiscal risk pertaining to the education and health sectors, as well as high accruals.
The committee agreed with National Treasury that skills capacity, particularly in project execution and planning, should be sought by departments to reduce underspending on certain spending items and conditional grants.
Briefing the committee, the MEC of Mpumalanga provincial treasury, Mr Sikhumbuzo Kholwane, said: "We are worried about the Department of Health, [particularly] around systems within the department. I have started discussions with the MEC of health around the possibility of the provincial treasury taking over the department. I want to emphasise that there is no decision at this point in time."
In its presentation, the National Treasury said the provincial health department's accumulated unauthorised expenditure increased to approximately R200 million and irregular expenditure still awaiting condonation amounts to R6.7 billion. Accumulated accruals in the provincial department of education increased to almost R327 million and accumulated unauthorised expenditure increased to R705 million. Accumulated accruals increased from R661 million in 2015/16 to R1.3 billion in 2017/18.
The select committee is concerned by the overall poor performance in provincial departments of health and education, which has been raised in all the presentations from provincial treasuries. This is disturbing and unacceptable, the committee said.
The committee expressed its frustration in that the committee raises concerns and recommendations with provinces. The provinces must adhere to simple issues within the Public Finance Management Act (PFMA), as every year there is irregular expenditure, in addition to accruals the departments cannot spend.
Mpumalanga has a record of unauthorised and under-expenditure, indicating that employees are not doing their jobs, and which has serious implications for service delivery.
Committee Chairperson, Mr Charel De Beer said provinces need to address concerns raised by the committee.
Issued by: Parliament of South Africa